Bloomberg Technology 08/23/2023
>> FROM THE HEART OF AN TECHNOLOGY COMBINE, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE AT BLOOMBERG WORLD HEADQUARTERS IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: SHARES OF PELOTON PLUNGE AFTER ISSUING A DISAPPOINTING FORECAST. ED: WE PUSH EARNINGS OUT AFTER THE BELL FROM NVIDIA. DOES THE AI RALLY HAVE STAYING POWER? CAROLINE: SPEAKING OF SEMICONDUCTORS, WE ARE LOOKING AT HUAWEI BUILDING A SECRET NETWORK OF CHIP FABRICATION ACROSS CHINA. WE WILL BRING YOU THE WHY. LET'S CHECK IN ON THESE MARKETS, BECAUSE EVEN THOUGH WE HAVE ANXIETY IT FEELS LIKE A SHORT SQUEEZE IN THE BOND MARKET IS LIFTING TEXT STOCKS HIGHER, 1.6% . THE NASDAQ ON THE UPSIDE. THERE'S MUCH HELP ON THE EARNINGS TO COME EVEN THOUGH SOME THAT WE ARE ABOUT TO DIVE INTO A LOOKING -- INTO OUR LOOKING UGLY. WE ARE SEEING IT ACROSS THE
ENTIRE CURVE, ACROSS THE ENTIRE WORLD. YOU ARE SEEING BOND BUYING IN THE U.K., EUROPE, AND THE U.S. SOME TECHNICAL ELEMENTS AT PLAY. SOME UGLY DATA WHEN YOU ARE LOOKING AT THE PMI DATA SUDDENLY SLOWING IN EUROPE AND SEEN WEAKNESS IN THE U.S. MAYBE BAD NEWS IS GOOD NEWS ON THE DAY. WE ARE SEEING THE GOLDEN DRAGON NASDAQ BUYING IN CHINESE NAMES EVEN AFTER WE SEE SUCH A SELLOFF IN THE CSI 300 TRADING AT ITS LOWEST SINCE NOVEMBER.
IN BITCOIN, AMID THIS MACRO PICTURE OF BAD NEWS BEING GOOD NEWS, THE DOLLAR IS SELLING OFF. PERHAPS THE FED CANNOT TIGHTEN TO THAT MOOD MUSIC. GOING INTO MICRO, THE EARNINGS. ED: NVIDIA, EXPECTATIONS INCREDIBLY HIGH. WE ARE FORECASTING TOPLINE GROWTH, 65% TO $11 BILLION IN THE FISCAL SECOND QUARTER. INSTITUTIONAL INVESTORS ARE LOOKING FOR 12 BILLION DOLLARS IN SALES.
THE DATA CENTER AT THE MAJORITY OF THAT. DOES THE AI STORY HAVE STAYING POWER? IS THERE DEMAND? WHAT ABOUT THE NEXT GEN GPU WITH GREATER CAPACITY? HOW DOES THAT DRIVE THE STORY FOR NVIDIA? OPTIONS MARKET PRICING A 10% SWING, ALMOST 4% OF THE S&P 500 AND MORE THAN 30% OF THE NASDAQ'S RALLY YEAR TO DATE. WE CANNOT WAIT FOR THESE EARNINGS AFTER THE BELL. THE OPPOSITE STORY IS PELOTON. THE STOCK HIT A RECORD LOW
AFTER ITS FISCAL FOURTH-QUARTER EARNINGS. REVENUE OF 600 MILLION IS WAY BELOW EXPECTATIONS, EVEN AT THE HIGH-END OF ITS GIVEN RANGE. THE STORY IN THE QUARTER GONE? THE SEAT POST ISSUE, A RECALL. 750,000 PEOPLE SAY I DO WANT A NEW SEAT POST. SUBSCRIBERS HIT PAUSE. THEY LOST 29,000 SUBSCRIBERS. PELOTON GOING FROM A HARDWARE
MAKER TO A SUBSCRIPTION AND SOFTWARE PROVIDER IS UNRAVELING. LET'S GET MORE OF THE PELOTON EARNINGS. WHAT WORRIED YOU MOST ABOUT WHAT YOU HEARD FROM PELOTON? >> THANKS FOR HAVING ME, ED. THERE ARE A FEW THINGS. PELOTON, IT IS CLEAR THAT THEY ARE HAVING SOME POTENTIALLY STRUCTURAL ISSUES IN TERMS OF THEIR ABILITY TO SELL MORE HARDWARE. THE FUNDAMENTAL QUESTION FOR PELOTON REMAINS WHETHER THERE ARE ALREADY ENOUGH HOUSEHOLD OWNERS FOR FITNESS EQUIPMENT ALREADY.
THE REASON I SAY THAT IS BECAUSE, YES, IT WAS A SEASONABLY SOFT QUARTER BUT THEY CHANGED PRICES ON THEIR HARDWARE. THEY HAVE BEEN MARKETING AGAINST IT. PELOTON IS A WELL-KNOWN BRAND BUT THEY CAME IN BELOW EXPECTATIONS AND THE SEAT RECALL DID NOT HELP THE BRAND IMAGE AND PAUSING SUBSCRIPTIONS. THE SUSTAINABILITY OF TOPLINE GROWTH.
PROFITABILITY, THE REPORTING QUARTER CAME IN UNDER EXPECTATIONS AND EVENTS IS BELOW FOR THE FIRST FISCAL QUARTER. THE BACK HALF OF NEXT FISCAL YEAR, IT IS PARTLY BECAUSE THEY WILL BE EATING INTO THE HOLIDAY QUARTER. THIS TELLS US THAT IT IS VERY DIFFICULT TO DRIVE TOPLINE GROWTH AS WELL AS SHOW MEANINGFUL EXPANSION IN THE BOTTOM LINE. FOR THIS COMPANY, THIS BALANCE WILL BE THE BIGGEST CHALLENGE. POSITIVE FREE CASH FLOW AND DRIVE TOPLINE GROWTH.
WE SEE THEY ARE HAVING CHALLENGES ALREADY. CAROLINE: WHAT IS THE ANSWER? BMO CAPITAL MARKETS SAYING THEY SHOULD BEAR HUG THEIR LOYALISTS AND BE SMALLER, HEALTHIER, MORE NICHE. SHOULD WE REMIND OURSELVES THAT THIS IS NOT A MASS-MARKET PLAYER? MAX: I WOULD AGREE.
THEY UNDERPERFORMED BECAUSE OF THAT REASON. WE THOUGHT THE PROFITABILITY FOR THE QUARTERS WOULD BE IN QUESTION. THAT CAME TRUE. I THINK AT THIS POINT I WOULD SOMEWHAT AGREE WITH THAT. THE QUESTION IS, CAN PALATINE BE A STANDALONE COMPANY FOR THE FORESEEABLE FUTURE? IS THIS SOMETHING THAT CAN LAST AS A STANDALONE COMPANY? I WOULD ARGUE THAT IT MAY NOT. AS SOON AS THEY GET TO POSITIVE FREE CASH ON A SUSTAINABLE BASIS WITH MODESTLY HIGHER TOPLINE GROWTH, PEOPLE MAY BE LOOKING FOR ACQUISITION TARGETS. ED: YOUR $10 PRICE TARGET, IN-LINE RATING ON THE STOCK, IS IN REVIEW AFTER THE NUMBERS. DO YOU ASSESS THIS COMPANY AS A
TECHNOLOGY COMPANY OR DOES IT JUST MAKE FITNESS EQUIPMENT? >> WITH BARRY AS THE CEO I WOULD HAVE TO SAY THAT THEY ARE PIVOTING TO A TECHNOLOGY COMPANY. THE REASON I SAY THAT IS THEY ARE MANAGING THE COMPANY, THE LEADERSHIP TEAM IS MANAGING THE COMPANY, AS A TECHNOLOGY COMPANY WITH A GREAT FOCUS ON SUBSCRIPTION FEES. IT IS CLEAR THAT IS WHERE THE INTRINSIC VALUE OF THE COMPANY IS, RICH -- THE COMPANY IS, RETENTION IS HIGH. THAT IS WHERE THE VALUE OF THE COMPANY IS. THE COMPANY IS ACTUALLY FOCUSING ON THE SUBSCRIPTION FEES. SOME OF THE EXAMPLES ARE THAT
THEY ARE ALLOWING THE THREE TIERS OF THE SUBSCRIPTION. THEY HAVE SEVERAL HUNDRED THOUSAND MONTHLY USERS FOR THE FREE SUBSCRIPTIONS HERE. THEY ARE EXPANDING THOSE INTO DIFFERENT PRICE POINTS AND FOCUSING MORE ON THEIR ABILITY TO ENTER THESE HOUSEHOLDS AT A LOWER PRICE POINT. I THINK THAT THAT IS THEIR FOCUS. THE QUESTION IS IF IT WILL WORK OR NOT. CAROLINE:
THAT IS THE QUESTION. I WANT TO THANK YOU. I UNDERSTAND THAT YOU ARE ON VACATION AND YOU HAVE COME ON TO DISCUSS THIS, DIGEST THIS, AND GIVE IT TO OUR AUDIENCE. GREAT TO SPEAK WITH YOU. WE HAVE OTHER EARNINGS THAT ARE
ALL IMPORTANT FOR THE DIRECTION OF THE ENTIRE MARKET. NVIDIA, THE CHIP COMPANY, IS FRONT AND CENTER WHEN IT COMES TO THE GUY FRENZY -- TO THE AI FRENZY. SO MUCH BACKED -- BAKED IN. DO YOU THINK THAT WE WILL SEE THE SORT OF 65% INCREASE IN REVENUE THAT THE MARKETS ANTICIPATED? >> I DON'T THINK THERE IS HIGH CONFIDENCE. THE PRIMARY DRIVER WILL BE THE DATA CENTER SEGMENT, DRIVEN BY THE A100'S AND H 100'S HARDWARE SYSTEMS. IT IS SET TO DOUBLE ON A YEAR ON YEAR BASIS AND ADD NORTH OF $50 BILLION TO A COMPANY THAT DID 27 BILLION DOLLARS LAST YEAR.
THERE COULD BE SOME ADDITION FROM GAMING, BUT IT WILL PRIMARILY COME FROM THE DATA CENTER SEGMENT. ED: YOU ARE COMING AT THIS FROM THE BLOOMBERG INTELLIGENCE ANALYSIS PERSPECTIVE. DOES THE AI MOMENTS AND HAVE STAYING POWER? WHAT DO YOU NEED TO HEAR FROM NVIDIA TO BELIEVE THAT THE HYPER SCALARS, LLM DEVELOPERS, AND EVERYONE CONTINUES TO BUY INTO AI FOR THE REST OF THE YEAR AND BEYOND? >> WE HAVE SEEN SIGNALS THAT THE DEMAND IS THERE AND RISING. THE TWO THINGS WE WANT TO HEAR IS CAN THEY GET THE ADDITIONAL SUPPLY HERE, AND ALSO VALIDATION ON VISIBILITY AND BACKLOG ORDERS GOING INTO THE NEXT YEAR. ED: FOR ME, THE QUESTION IS TECHNOLOGY LEADERSHIP.
WE HAVE COVERED ON THE SHOW THAT THEY HAVE THEIR OWN OFFERING. INTEL WANTS A PIECE OF THE PIE. I WONDER HOW THEY MAINTAIN THEIR LEADERSHIP? CAROLINE: IT COMES DOWN TO MARKET DYNAMICS, AND IT HAS FELT LIKE NVIDIA IS THE ONLY GAME IN TOWN WITH ITS TRILLION DOLLAR MARKET VALUATION WHEN IT COMES TO BETS ON AI? IS IT? ARE OTHERS PLAYING CATCH-UP? >> THE FASTEST GROWING MARKET IS SEMICONDUCTORS SO OTHER PLAYERS ARE TRYING TO GET A PIECE OF IT AND ARE PLAYING CATCH-UP. WE DON'T EXPECT NVIDIA TO LOSE ITS LEADERSHIP ANY TIME SOON, BUT THERE IS ROOM FOR OTHER PLAYERS TO GRAB A PIECE OF HUGE PIE. A SMALL PERCENTAGE COULD ADD BILLIONS OF DOLLARS TO THE REVENUES. ED: WHEN THE BAR IS HIGH AND THE STAKES ARE HIGH THERE'S ALWAYS ROOM FOR DISAPPOINTMENT. HOW WORRIED ARE YOU ABOUT THE SUPPLY ISSUE? ABOUT BEING ABLE TO HAND OVER ENOUGH CHIPS? >> SUPPLY WILL BE A KEY FACTOR GOING INTO THIS CALL.
IN THE NEAR TERM, I'M NOT AS WORRIED BECAUSE THE COMPANY SEEMS CONFIDENT THAT THEY HAVE GARNERED ENOUGH SUPPLY TO MEET THE GUIDED NUMBERS DRIVEN BY THEM. I WOULD DEFINITELY LIKE TO SEE IF THEY CAN MEET THE LONG-TERM, ESPECIALLY THE 20 24 NUMBERS, AND GATHER SUPPLY FOR THAT. ED: THE GUIDED NUMBERS CAME FROM THE COMPANY, AND THAT IS WHY THE NOTE FROM CITI ABOUT INSTITUTIONAL INVESTORS SEEING GREATER TOPLINE GROWTH IS WORTH BEARING IN MIND. THANK YOU. COMING UP ON BLOOMBERG, A LUNAR LANDING. INDIA IS UPPING ITS RANK IN THE
GLOBAL SPACE RACE AFTER ITS SPACECRAFT SUCCESSFULLY TOUCHED DOWN ON THE MOON'S SOUTH POLE. SHARES OF GRAB AFTER POSTING A NARROW LOSS IN THE SECOND QUARTER BUOYED BY EXTENSIVE COST CUTS. THIS IS THE UBER OF SOUTHEAST ASIA, THE RIDE-HAILING FOOD DELIVERY GIANT PERFORMING IN THAT REGION.
UP ALMOST 12% IN U.S. TRADING. THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: TIME FOR TALKING TECH. INDIA IS THE FIRST COUNTRY TO LAND A SPACECRAFT NEAR THE MOON'S SOUTH POLE.
THE LAUNCH WAS LAST MONTH AND IT CARRIES A ROVER. IT IS TASKED WITH ANALYZING THE CHEMICAL MAKEUP OF THE MOON'S SURFACE. RUSSIA TRIED TO LAND IN THE SAME AREA BUT CRASHED INTO THE MOON AFTER AN ENGINE MALFUNCTION. FOREIGN INVESTORS SELLING OFF CHINA'S BLUE-CHIP STOCK. DATA TRACKED BY BLOOMBERG FOUND THAT INVESTORS HAVE OFFLOADED THE EQUIVALENT OF 10.7 BILLION
DOLLARS BETWEEN AUGUST 7 AND 18TH. SOME OF THE MOST SOLD INCLUDE A SOLAR COMPANY, AN EV MAKER, AND A MEDICAL SUPPLY MAKER. TELECOMMUNICATIONS GIANT HUAWEI MAY BE BUILDING A SECRET NETWORK OF CHIP FABRICATION CENTERS ACROSS CHINA ACCORDING TO THE SEMICONDUCTOR INDUSTRY ASSOCIATION, THE LEADING GLOBAL TRADE GROUP FOR CHIPS. HUAWEI HAS BEEN BLACKLISTED BY THE U.S. TIMBRE OF COMMERCE AMID
TENSIONS WITH CHINA. A SHADOW NETWORK WOULD ALLOW THE COMPANY TO START -- TO SKIRT THOSE REGULATIONS. CAROLINE: IS THE SEC PERHAPS -- HEDGE FUNDS TO DISCLOSE FEES IMPACTING INVESTORS? WE WILL SEE WHAT THE MARKET MAKES OF IT. SONALI BASAK IS HERE. WHY ARE VENTURE CAPITAL COMPANIES WORRIED ABOUT THESE NEW RULES? SONALI: YOU HAVE TO THINK ABOUT OTHER FUNDS LIKE TIGER GLOBAL MOVING INTO THE EQUITY STRUCTURE, VENTURE CAPITAL STRUCTURE. WHAT THEY ARE INITIALLY CONCERNED ABOUT IS STRAIGHTFORWARD. VERY MUCH NEW RULES FOR $17 TRILLION INDUSTRY THAT HADN'T FACED THIS MUCH DISCLOSURE OR SCRUTINY BEFORE.
THE INDUSTRY HAS BALLOONED MEANINGFULLY. I WILL SAY THAT EVEN THOUGH THEY ARE CONCERNED ABOUT THESE NEW RULES, ONE OF WHICH INVOLVES SIDECAR VEHICLES, WHICH IS PREFERENTIAL TREATMENT THAT OFTEN APPLIES TO LARGE INVESTORS , THE SEC IS TRYING TO LEVEL THE PLAYING FIELD IN TERMS OF FEE STRUCTURES. IMPORTANTLY, THERE HAVE BEEN LARGE WHEN HE W -- LARGE WINS. WHEN YOU LOOK AT THE OPEN MEETING THEY ARE DISCUSSING THESE RULES, BUT THE COMMISSION IS MADE OUT OF FIVE MEMBERS IN WHICH THREE OF THEM ARE DEMOCRATIC AND EXPECTED TO VOTE IN FAVOR OF THE RULES.
WHERE THE INDUSTRY HAS WON IS THE IDEA OF A GRANDFATHERING PROVISION, INVESTING AGREEMENTS WILL -- PREVIOUS AGREEMENTS WILL INVESTORS WILL LIVE ON. THIS WILL BE FOR NEW INVESTORS AND AGREEMENTS BEING MADE. INDEMNIFICATION, THERE WAS A WORRY THAT NEGLIGENCE WOULD BE MADE MORE STRICT, WHICH WOULD, IN THEORY, ACCORDING TO INDUSTRY PARTICIPANTS, RESTRICT CERTAIN FORMS OF RISK-TAKING BECAUSE IT WOULD BE EASIER TO SUE YOUR INVESTMENT PROVIDER. PULL UP THE SCREEN FOR PANGAEA'S TERRY HAYNES WHICH HAS BEEN WEIGHING IN WITH A LOT OF DOUBT. THE MFA SAID THAT IT WOULD POTENTIALLY SUE INTO TWO WEEKS, AND TERRY BELIEVES THAT THE SEC WILL BE STOPPED IN ITS TRACKS AND SHUT DOWN IN ITS VENTURE, BECAUSE THE COURTS MAY PUT THIS PLAN ON HOLD AND THE LOWER COURTS WILL NOT BE CONVINCED THAT THE SEC WOULD BE LIKELY TO PREVAIL ON APPEAL.
THERE IS A LOT OF DOUBT ON HOW MUCH THESE RULES SEE THE LIGHT OF DAY, BUT IT IS CERTAINLY A MOMENT OF TENSION BETWEEN THESE PRIVATE FUNDS AND THEIR MAIN REGULATORS. CAROLINE: IT IS HOW MUCH TRANSPARENCY INVESTORS ULTIMATELY GET. THANK YOU FOR THE BREAKDOWN. THE CEO OF RAMP.
THE COMPANY SECURING 300 MILLION DOLLARS IN ADDITIONAL FUNDING. FROM NEW YORK, SAN FRANCISCO, THIS IS "BLOOMBERG TECHNOLOGY." ♪ CAROLINE: IT IS TIME FOR WORK SHIFT IN WHERE WE LOOK AT THE CHANGING LANDSCAPE OF THE WORK MARKET. WE ARE FOCUSED ON HOW CORPORATE LEGAL DEPARTMENTS ARE TENTATIVELY EMBRACING ARTIFICIAL INTELLIGENCE BY HARNESSING AI TO DO THE GRUNT WORK ON TASKS LIKE REVIEWING SIMPLE CONTRACTS, IN-HOUSE COUNSEL THAT CAN REDUCE THE TIME AND MONEY TO A FRACTION OF WHAT WAS NEEDED BY HUMANS.
SINCE GENERATIVE AI IS NEW THE INDUSTRIES NAVIGATING CRITICAL QUESTIONS AROUND THE SECURITY AND QUALITY OF THE DATA. SLOWLY, SLOWLY WE GO. LET'S LOOK AT ANOTHER WAY THAT WORK HAS SHIFTED AND MAY BE GOTTEN CHEAPER. UNNATURAL SERVICES PLATFORM RAMP RAISE $3 MILLION FOR A VALUATION OF $5.8 BILLION. WE SPOKE WITH FOUNDERS FUND WHO HAD THOUGHTS ON AI MORE BROADLY IN THE SPACE.
>> SOME OF THESE TECHNOLOGIES ARE DISRUPTIVE AND SOME ACTUALLY ENABLE COMPANIES TO GET STRONGER. AI IS MOST LIKELY GOING TO GENERATE MORE POWER FOR LARGE TECH, LARGE MARKET CAP TECH COMPANIES AND NOT REALLY BE A SUBSTITUTE. IF THERE IS A SUBSTITUTE IT WILL PROBABLY BE OPENAI, WHICH WE INVESTED IN, FORTUNATELY. CAROLINE: HE ALSO INVESTED IN RAMP. THE CEO IS HERE. WE WILL -- THIS ENVIRONMENT FOR FUNDRAISING. YOU GOT THE MONEY, BUT YOU HAVE
SIGNIFICANTLY CUT YOUR VALUATION. WHY? WAS IT THAT YOU NEEDED THE MONEY HERE AND NOW? >> THIS WAS AN OPPORTUNISTIC RAISE. WE WERE APPROACHED BY INVESTORS EXCITED BY THE EXTRAORDINARY GROWTH.
WE REACHED OVER $3 MILLION IN ANNUALIZED REVENUE LESS THAN 3.5 YEARS FROM THE LAUNCH, THE FASTEST EVER. THIS IS ABOUT INVESTING IN CUSTOMERS. MOST OF OUR COMPETITORS AND THE INDUSTRY ARE SPENDING LESS ON THEIR CUSTOMER EXPERIENCE. RAMP'S PURPOSE IS TO HELP OUR CUSTOMERS BUSINESSES BE MORE EFFICIENT WITH EVERY DOLLAR SPENT. WE DO THIS AS AN EXTRAORDINARY
OPPORTUNITY TO INCREASE NOT ONLY OUR BALANCE SHEET BUT THE PACE AT WHICH WE CAN INVEST IN INNOVATIONS FOR OUR CUSTOMERS. WE ARE SUPER EXCITED TO DO THIS. ED: ON THE $300 MILLION IN ANNUALIZED REVENUE, THERE WILL BE A LOT OF FOUNDERS WATCHING THE SHOW WHO MIGHT BE ABLE TO RAISE OPPORTUNISTICALLY, AS YOU PUT IT, OR FACE UNFAVORABLE TERMS. HOW MUCH EMPHASIS DID INVESTORS PUT ON THAT METRIC AND WHAT OTHER METRICS DID THEY WANT TO SEE BEFORE THEY SIGNED OFF? ERIC: FOR MOST INVESTORS, IT IS A SIMPLE PROPOSITION.
IS THIS A LARGE MARKET? ARE YOU BUILDING A PRODUCT THAT CAN SERVE AN EXTRAORDINARY NUMBER OF CUSTOMERS? IS THIS A PRODUCT THAT CUSTOMERS LOVE? FOR US, WHAT MADE THIS SIMPLE IS THE GROWTH OF THE BUSINESS. SINCE THE LAST RAISE TRANSACTION, VOLUME HAS INCREASED BY A FACTOR OF SIX INTO THE TENS OF BILLIONS OF DOLLARS PER YEAR. WE ARE THE NUMBER ONE RATED PLATFORM IN THE UNITED STATES, AND WE BELIEVE THAT THERE IS NO BETTER DEAL IN BUSINESS. WE HELP THE AVERAGE BUSINESS A
3.5% PER YEAR ON THEIR EXPENSES FROM CORPORATE CARDS, EXPENSE MANAGEMENT, TO AUTOMATION. I THINK THAT INVESTORS ARE REALLY EXCITED FOR THE PROSPECTS OF RAMP TAKING ON WHAT HAS BEEN A PRETTY SLEEPY INDUSTRY, CLASSICALLY. CAROLINE: HOW DO YOU TAKE IT ON? IS IT ABOUT MARKETING SPEND, ORGANIC GROWTH, INORGANIC? ERIC: IT IS TWO SETS. THE CUSTOMER EXPERIENCE. AT THE TIME OF THE LAST RAISE
WE HAD SAVED $100 MILLION AND NOW THAT IS OVER $600 MILLION AND 8.5 MILLION HOURS OF WORK. WE HAVE DONE IT BY LAUNCHING NEW VERTICALS. WHEN WE LAST LAUNCHED WE WERE ONLY A CORPORATE CARD EXPENSE MANAGEMENT AND NOW WE ARE THE FASTEST-GROWING ACCOUNTS PAYABLE PLATFORM, TRAVEL, AND THE LIKE. THIS IS MAKING THE EXPERIENCE
BETTER FOR THE AVERAGE CUSTOMER AND SOME IS REACHING MORE BUSINESSES. THE NUMBER OF BUSINESSES THAT USE RAMP ARE OVER 15,000, WHETHER THAT IS SMALL BUSINESSES TO LEADING PUBLICLY TRADED COMPANIES. A LOT OF IT IS EXPANDING AND TAKING MARKET SHARE. ED: WHAT IS GOOD FOR YOUR CUSTOMERS IS GOOD FOR YOU, AND VICE VERSA. DOES THAT SOUND TOO GOOD TO BE TRUE? ERIC: WE THINK THAT ALIGNED BUSINESSES AND CUSTOMER OBSESSED BUSINESSES WENT FOR TOO LONG -- THIS WAS AN INDUSTRY WHERE IF YOU WERE A BANK THAT YOU CAN MOVE MONEY AND IF YOU WEREN'T YOU COULDN'T. YOUR CREDIT CARD NEVER GOT
BETTER. I THINK THAT RAMP'S GROWTH IS A REFLECTION OF OUR ALIGNMENT. IT REALLY IS THE WINNING RECIPE. HELPING CUSTOMERS SPEND LESS. WE THINK IN THE LONG RUN IT WILL ALLOW US TO GO FASTER. WILL ALLOW OUR BUSINESSES TO BE MORE PROFITABLE AND LONG-TERM ENDURING WHICH WE THINK IS A BETTER BOTTOM LINE FOR CUSTOMERS AND RAMP AS WELL.
CAROLINE: KEITH WAS SAYING THAT THIS IS A MOMENT WHERE COMPANIES HAVE TO GET MORE REALISTIC ABOUT WHAT THEY'RE WORTH, ABOUT VALUATIONS. YOU HAVE TAKEN IT ON IN AN OPPORTUNISTIC FASHION. WHAT ARE THE OTHER HEADACHES FOR YOU IN THIS MACROENVIRONMENT? IS IT TALENT? CONTINUING TO GET MORE CLARITY ON WHERE THE ECONOMY GOES? HOW DO YOU ENSURE THAT WE YOU CAN GROW THE BUSINESS IN A MINDFUL MANNER? ERIC: REALLY GREAT QUESTION.
THIS IS WHY WE ARE SO EXCITED. I THINK THAT THIS IS AN UNCERTAIN RATE ENVIRONMENT. THE FASTEST INTEREST RATE RISE IN 40 YEARS. TO HAVE INTEREST-RATE CAPITAL TO DOUBLE THE BALANCE SHEET AND BE ABLE TO INVEST DEEPLY, NO MATTER THE NATURE OF THE MARKET, WAS SUPER EXCITING. TO YOUR POINT, SO MANY OTHER FIRMS ARE HIRING LESS.
MANY ARE DOING REDUCTIONS IN FORCE. SO MANY OTHER FIRMS ARE MAKING THE CUSTOMER EXPERIENCE WORSE TO SHORE UP MARGINS. AS MUCH AS WE'VE GROWN, WE BELIEVE THAT WE HAVE 99 PERCENT PLUS OF THE MARKET TO GO, 15,000 BUSINESSES IS A LOT BUT MANY MORE COULD BE USING RAMP.
ED: ONE WORD ANSWER. DO YOU NEED MORE SALES REPS OR ENGINEERS? ERIC: BOTH. ONE WORD. ED: YOU MET MY CONDITION. $300 MILLION ROUND, DOWN ROUND, BUT IT SOUNDS LIKE YOU ARE IN GROWTH MODE. COMING UP, WE WILL TURN TO ANOTHER STARTUP THAT JUST RAISE $255 MILLION TO HELP TILDE A HIGH-TECH -- IN NEW JERSEY ON THE EAST COAST. MORE DETAILS
NEXT. FROM SAN FRANCISCO AND NEW YORK, THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY ED LUDLOW IN SAN FRANCISCO. CAROLINE: LET'S CHECK ON THE MARKETS WE ARE GOING HIGHER. WE MANAGED TO SHAKE A BIG SOCIETY BECAUSE BAD NEWS IS GOOD NEWS.
THE PMI'S ARE LOOKING UGLY BUT DOES THAT MEAN BANKS WILL HAVE TO FALL BACK ON INFLATION. NASDAQ UP 1.44%, 10 YEAR YIELD IS DOWN 4.9538. BITCOIN IS DOWN 1.91% AT 26,300 52. INDIVIDUAL NAMES THAT ARE IMPORTANT, PATTERSON WIPED OUT BECAUSE THEY ARE LOSING SUBSCRIPTION -- PELOTON THEY NEED TO BECOME MORE NICHE. NETFLIX IS HAVING A GREAT DAY.
IT LOOKS LIKE THEY ARE SEEING SOLUTIONS ADDED FROM THE U.S.. IN VIDEO IS UP 2.29%. IT'S BEEN A ROLLER COASTER FOR THE PAST FEW DAYS. THEY HAVE BEEN DRIVEN HIGHER BY REVENUE.
ED: A DAY IN PUBLIC MARKETS WITH SO MANY HEADLINES WITH MONEY BEING RAISED. CELL THERAPY CONTRACTOR RAISED 250 MILLION IT IS THE HIGH CLIENT IN NEW JERSEY WHICH IS BIG FOR PHARMACEUTICAL PRODUCTION RESEARCH. JOINING US AS THE COFOUNDER OF C ELARIS. YOU HAVE RAISED A TON OF CATCH
TO BRING A SOFTWARE DRIVEN PLAN. WHY NEW JERSEY? >> IS A HOT BED FOR BIOPHARMACEUTICALS. WE ARE DELIGHTED TO ANNOUNCE THAT TODAY WE RAISED 255 WITH THE LIFESAVING CELL THERAPIES. DEPLOYING OUR CELL SHUTTLE AND SMART FACTORIES AROUND THE GLOBE. THE IDEA IS IF YOUR CRYSTAL, DEVELOPING A CELL THERAPY.
YOU CAN HELP THEM TAKE IT TO -- FROM A RESEARCH PROJECT TO COMMERCIAL PROJECT. CELL THERAPIES ARE BREAKTHROUGHS IN MODERN MEDICINE IS SHOWN TO CURE AGGRESSIVE DISEASES THAT WERE UNTREATABLE. WE HAVE SEEN CHILDREN WITH AGGRESSIVE CANCERS CHEERED. IT IS EXPENSIVE, AND IMPOSSIBLE TO SCALE.
PATIENTS ARE DYING ON WAITING LIST. IMAGINE THAT YOUR CHILD HAS CANCER AND THERE IS CELL THERAPY ON THE MARKET THAT COULD CURE YOUR CHILD. YET, YOUR KID STILL DIES THEY ARE UNABLE TO ACCESS THE CELL THERAPIES BECAUSE OF THE MANUFACTURING LINK. THAT'S WHAT WERE SOLVING FOR. THAT'S A REALITY NO ONE WANTS TO IMAGINE.
ED: FDA APPROVAL AND REGULATORY RISK. CAROLINE: REGULATORY APPROVAL IS NECESSARY AND WHAT ARE THE RISKS AROUND THAT? THAT CAN HOLD BACK THE WAY IN WHICH YOUR BUSINESS WORKS? >> ON THE PLATFORM WE'VE DEVELOPED IT'S NOT A MEDICAL DEVICE. IT DOESN'T NEED TO GO THROUGH CLINICAL TRIALS BEFORE BEING USED. WHAT DOES NEED APPROVAL ARE THE CLINICAL TRIALS BY THE SPONSORS. THE PHARMA COMPANIES IN THE OUR CLIENTS.
WE USE A SUPPORT SYSTEM AND PROVIDE REGULATORY SUPPORT. CAROLINE: TO GREASE THE WHEELS OF PEOPLE TO USE TECHNOLOGY THEY WILL HAVE TO GET REGULATORY APPROVAL. THERE ARE SOME THINGS YOU CAN'T CONTROL BUT WHAT YOU CAN CONTROL IS HOW YOU MARKET YOURSELF WORLDWIDE. YOU MENTIONED EUROPE, ASIA. WHERE YOU LOOKING AT? >> LOCATIONS ARE NOT FINALIZED IN EUROPE AND ASIA BUT AS WE MENTIONED, WE JUST ANNOUNCED WERE OPENING THE WORLD'S FIRST SMART FACTORY IN BRIDGEWATER, NEW JERSEY.
IT'S 118,000 SQUARE-FOOT, TO FOOTBALL FIELDS FILLED WITH ROBOTS MANUFACTURING CURES FOR CANCER IN AN AUTOMATED FASHION. WERE DEPLOYING 40000 AND CELL THERAPY DOSES PRODUCED PER YEAR AND TO PUT THAT INTO PERSPECTIVE. THAT IS 10 TIMES AS MANY DOSES PRODUCED OUT OF THE FACILITY COMPARED TO CONVENTIONAL MANUFACTURING METHODS. HOW ARE WE ACHIEVING THIS? WE HAVE TESTED A FULLY ROBOTIC SOLUTION AND THE CELL SHUTTLE IS ABOUT THE SIZE OF A SMALL TRUCK AND INSIDE YOU HAVE TWO ROBOTS AND IT COMBINES THE FUNCTIONALITY OF 100 DIFFERENT INSTRUMENTS OF ONE MACHINE. THE NET EFFECT, A PRIEST ON THE
COST OF MANUFACTURING AND THE LABOR. A PRIEST ON FACILITY SIZE BY 90%. WITH THE FACILITY OF A SAME SIZE AND WORKFORCE WE CAN PRODUCE 10 TIMES AS MANY CELL THERAPIES PER YEAR COMPARED TO CONVENTIONAL MANUFACTURING PRODUCTS. ED: YOU HAVE NOT YET SELECTED A THIRD SITE BUT YOU ARE LOOKING? FABIAN: WE HAVE TWO SITES IN THE U.S.. WE ARE BASED IN SAN FRANCISCO FOR CLINICAL MANUFACTURING AND NEW JERSEY FOR COMMERCIAL SCALE MANUFACTURING IN THE NEXT UP WE WILL HAVE A SITE IN EUROPE IN 2024 AND THEN ASIA AS WELL. ED: WHEN YOU ANNOUNCE THAT SITE PLEASE COME BACK TO BLOOMBERG TECHNOLOGY. YOU MENTIONED A LOT OF BIG
NUMBERS BUT YOU DID NOT MENTION THE VALUATION WHICH IS 255 MILLION. A UNICORN AT THIS STAGE? FABIAN: THAT'S A FAIR QUESTION. WE'RE ARE STILL A PRIVATE COMPANY SO WE DON'T HAVE PRECISE VALUATION. THIS IS A MASSIVE ROUND WITH THE MASSIVE STEP UP VALUATION. WHILE EVERYONE ELSE SEEMS TO BE RAISING WE RAISED A STEP UP IN VALUATION AND ARE HAPPY WITH THE RESULTS.
$255 MILLION IS MORE THAN WHAT WE RAISED IN OUR IPO. WE ARE PROUD OF THIS RESULT AND THEY RESPECT THE EXCITEMENT AND CONFIDENCE IN THE INVESTMENT COMMUNITY FOR WHAT WE'VE ALREADY BUILT IN THE SPEED WITH WHICH WE BUILT THE PLATFORM AND FUTURE STRATEGY PLANS FOR WHAT COULD COME AS WELL AS THE DATA WE HAVE PUBLISHED ON OUR WEBSITE. CAROLINE: YOU'VE ALREADY RAISED 300 MILLION BUT IT'S A PHENOMENAL AMOUNT OF MONEY AND YOU'VE REINVESTED IN GOT INDIVIDUALS, CAN YOU TALK ABOUT BRISTOL-MYERS SQUIBB ARE THEY CUSTOMERS? FUTURE CUSTOMERS? AS WELL AS BACKERS? FABIAN: AS YOU MENTIONED IT WAS LED WITH NEW INVESTORS PARTICIPATING SPECIFICALLY IN GROWTH AND BLOOMBERG'S ADVISORS IN BRISTOL-MYERS SQUIBB AND PARTICIPATION FROM INSIDERS NOTABLY ECLIPSE, ATC, DUCHENNE. BRISTOL-MYERS SQUIBB IS HE MENTIONED AS A GLOBAL PHARMACEUTICAL COMPANY, IS CELL THERAPY USER AND VERY PROUD TO HAVE THEM AS AN INVESTOR IN THIS ROUND AND WE ARE WORKING WITH THEM ON CORPORATE PARTNERSHIPS. THERE IS MORE NEWS TO COME. ED:
MICHAEL BLOOMBERG, IS THE FOUNDER OF BLOOMBERG TELEVISION. FINAL QUESTION FOR ME. IF YOUR RESEARCH-BASED CUSTOMERS DON'T GET FDA APPROVAL YOU CAN'T RAMP UP THE COMMERCIAL STAGE OF OUTPUT. HOW DO YOU MAKE SURE THAT PROCESS DOES HAPPEN? FABIAN: IN MOST CASES THERE'S THE CLINICAL TRIAL REQUIRED. THERE IS ONE EXCEPTION IF IT'S ALREADY FDA APPROVED AND HAS APPROVAL.
IF WE STICK EXACTLY TO THE PROCESS THAT THE PHARMA COMPANIES ARE RUNNING AND SWITCH UP THE UNDERLYING PLATFORMS IN PRINCIPLE, THAT DOES NOT NECESSITATE A NEW CLINICAL TRIAL AND WE CAN MANUFACTURE DIRECTLY. CAROLINE: THANK YOU FOR BRINGING THE ENTHUSIASM. THE COFOUNDER OF CELLARES . IS H UAWEI SECRETLY BUILDING UP A CHIP COMPANY AND HOW THE BIDEN ADMINISTRATION COULD TAKE ACTION.
AS WE HAD TO BREAK WERE SEEING SNAP IS APPOINTING A FORMER GOOGLE EXECUTIVE TO LEAD OPERATIONS IN WE SEEN SOME GROWTH THERE. THEY ALSO ANNOUNCED NEW TEAMS IN CHARGE OF CONTENT, ECOSYSTEMS. FROM NEW YORK, THIS IS BLOOMBERG TECHNOLOGY. ED: WE MENTIONED HUAWEI THEY SAID THE TELECOMMUNICATION COULD BRING A NETWORK IN AN EFFORT TO SKIRT U.S. CURBS.
THIS IS NOT STRAIGHTFORWARD, EXPLAIN THESE BASICS. >> HUAWEI HAS BEEN BLACKLISTED BY THE U.S. GOVERNMENT AND IT MAKES IT DIFFICULT FOR U.S.-BASED COMPANIES TO SAFEGUARD TECHNOLOGY.
WHAT THIS REPORT SAYS ON THE BACK REPORTS WE GOT EARLIER THAT HUAWEI IS TRYING TO A DIY EFFORT TO CREATE A NETWORK THAT COULD REPLACE OVERSEAS SUPPLY OF THESE COMPONENTS WHICH WILL KEEP IT IN BUSINESS AND ABLE TO MAKE THESE TELECOMMUNICATION SYSTEMS. BASICALLY, IT USES OTHER COMPANIES AND OTHER NAMES TO TRY AND GET EQUIPMENT THAT THEY WOULD NOT BE ABLE TO GET. WHO HAS BEEN SHINING A LIGHT ON THIS AND HOW HAVE YOU MANAGED THIS? IAN: WE BROKE THE NEWS THAT ONE OF THESE CHINESE COMPANY WAS IN FACT CONNECTED TO HUAWEI. IT WAS A SHELL COMPANY USING GOVERNMENT MONEY BUYING U.S. EQUIPMENT TO CONTINUE HUAWEI'S ABILITY TO GET THESE COMPONENTS. THE U.S. DEPARTMENT OF COMMERCE WENT ON
TO BLOCK PLUS -- BLACKLISTS I COMPANY. THEY GOT A REACTION OUT OF THE U.S. GOVERNMENT THAT SAID IT WAS NOT JUST THAT PARTICULAR COMPANY BUT OTHER COMPANIES AS WELL THAT ARE ALREADY ON THE BLACKLISTS THEY CONTINUE TO STOCKPILE U.S. EQUIPMENT AND FOR EQUIPMENT TO STAY IN PRODUCTION AND THEY ARE IN FACT SUPPLYING HUAWEI WITH COMPONENTS OR ATTEMPTING TO SUPPLY THEM WITH THE COMPONENT AS IT NEEDS THEM. CAROLINE: IT MUST BE HARD FOR A LOT OF
THESE COMPANIES RIGHT NOW? IAN: WHERE DOES THE BURDEN OF PROOF LIVE IN -- PROOF LIVE? IT'S HARD TO TRACE INDIVIDUAL SHIPMENTS AND IT'S NEXT TO IMPOSSIBLE. SOME OF THESE CHIPMAKING PIECES OF EQUIPMENT'S ARE WORTH TENS OF MILLIONS OF DOLLARS. THERE ARE NOT AS MANY OF THOSE AND THEY CAN TRACK WHERE THEY'RE GOING IN WHAT THEY'RE USED FOR. NONETHELESS, BECAUSE REGULATIONS ARE EVOLVING AND BEING TIGHTENED.
THIS IS A MOVING PROCESS. ED: HUAWEI AND OTHER COMPANIES IDENTIFIED DID NOT RESPOND TO REQUEST A COMMENT. YOU NOTICED IN YOUR PRIVATE REPORTING THAT IT IS BEEN ACTIVE ON THAT ACTIVE REPORT AND WHAT HAVE THEY SAID? IAN: THEY SAID WE ARE NOT SURPRISED. THE CHINESE GOVERNMENT MONEY IS GOING INTO EFFORTS TO TRY TO KEEP THIS ENTERPRISE UNDERWAY.
IF WE PERCEIVE THIS TO BE A THREAT TO NATIONAL SECURITY WE WILL TAKE ACTION REQUIRED TO PAIR FRIES -- PARAPHRASE WHAT THEY SAY. CAROLINE: AN AMAZING PIECE OF REPORTING, THANK YOU SO MUCH. MEANWHILE, WE WORK IS RUNNING OUT FOR HELP ON RESTRUCTURING. STRUGGLING WITH THE HEAVY DEBT LOAD. AND POOR PERFORMANCE COME TO LIGHT OF LEFT AND THEY TOLD INVESTORS THEY HAVE DOUBTS ABOUT STAYING IN BUSINESS. IT WANTS TO RESTRUCTURE ITS
DEBTS OUT AND THEY HAVE HIRED REAL ESTATE ADVISOR AND HAVE REENGAGED TO HELP GET OUT OF IMPORTANT LEASES AND MARKETS AND INVESTING PRODUCT OFFERINGS AND TAKING NECESSARY STEPS TO RAID AND COSTS. ED: COMING UP ON BLOOMBERG TECHNOLOGY, THE HOLLYWOOD WRITERS STRIKE. HOW MUCH LONGER WILL IT TAKE TO GET A DEAL. WE ARE WATCHING SHARES OF SEMANTIC TALKING ABOUT AUTOMAKERS.
IT IS LOOKING AT BEJA ON LEAF MOTOR IN ORDER TO EXPAND ITS OFFERING AND THOSE MARKETS. THE SHARES ARE UP MODESTLY .4%. YOU CAN CHECK THAT OUT ON THE WEBSITE, BLOOMBERG TERMINAL. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: GOING VIRAL, WE ARE WATCHING COMING ONLINE IN TODAY IT IS THE SERIES AHSOKA. ED, I KNOW YOU'RE A STAR WARS
MAN, DID YOU WATCH IT? ED: I WATCHED EPISODE ONE BUT I HAVE SAVED EPISODE TWO FOR THE LATER THIS WEEK. IT IS INCREDIBLE TO SEE X, INSTAGRAM, TALKING ABOUT THE SHOW. IT WAS HIGHLY ANTICIPATED NEXT SPINOFF FROM THE STAR WARS UNIVERSE. CAROLINE: AND THERE IS A MOTION AROUND IT. ONE OF THE LEAD CHARACTERS, NO
SPOILERS. EXTERNALLY, THEY LOST THE KEY CHARACTER THAT DIED IN ITHACA I BELIEVE IT WAS? ED: NEVER SPOILERS ON BLOOMBERG TECHNOLOGY. BUT RAY STEVENSON DID PASS AWAY IN MAY AFTER PRODUCTION HAD WRAPPED AND THERE WAS A TRIBUTE TO HIM WHICH LOADS OF OTHER PEOPLE HAVE TALKED ABOUT ON SOCIAL MEDIA. WHEN I POSTED THAT I WOULD BE WATCHING IT A FEW PEOPLE REPLIED AND SAID IT IS A NICE MOMENT FOR RAY STEFANSSON WHO HAS SUCH SUPPORT OUT THERE.
STUDIOS RELEASE THE DETAILS OF CONTRACT PROPOSALS TO THE FILM INDUSTRY SCREENWRITERS. IT'S THE LATEST IN THE BID TO END A STRIKE THAT STALLED PRODUCTION AND DELAYED NEW RELEASES. THAT IS WHY WE ARE SO FOCUSED ON THE CONTENT. WE WILL BRING IN LUCAS SHAW WHO LEADS OUR SCREEN TIME COVERAGE. DID YOU TRACK IT DAY BY DAY AND
WHAT IS THE LATEST IN THESE NEGOTIATIONS? . LUCAS: IT IS NOT GOOD. THERE'S NOT BEEN A RESUMPTION IN CONVERSATION BETWEEN HOLLYWOOD STUDIOS AND SCREENWRITERS AND THEY HAD GONE QUIET DURING THAT PERIOD WHICH WAS SEEN AS A POSITIVE. THE FACT THAT THEY CHOSE TO AVOID THE PROPOSAL AND BRING ON FIREPOWER THEY ARE HAVING TROUBLE FINDING COMMON GROUND. CAROLINE: WGA WAS FIGHTING BACK IT FEELS AS THOUGH THERE IS NO MEETING OF THE MINDS ABOUT THE PROFITABILITY INTAKE OF MONEY FROM THE STUDIOS AND WHAT'S GETTING INTO THE HANDS OF THE WRITERS HERE. LUCAS:
THE STUDIOS DID COME TO THE WRITERS WITH THOSE SUBSTANTIAL PROPOSAL. THEY CHANGE THEIR OFFER BUT THERE WERE STICKING POINTS. ONE OF THEM IS A SHARE AND A MINIMUM NUMBER OF WRITERS IN THE ROOM. THEY ARE SAYING WHY THAT CAN'T BE UP TO THE SHOW RUNNER BUT THEY WANT THE STUDIO TO PROMISE THAT.
THERE'S JUST A LACK OF TRUST BETWEEN RIDERS MEMBERS AND AMONG DIFFERENT MEMBERS OF THE GUILD. ED: TED SARANDOS AND BOB IGER CAME IN TO PLAY A ROLE BUT IT HAS NOT HELP MUCH. CAROLINE: THAT IS FASCINATING IS THAT CONTINUES TO UNFOLD FROM A TECHNOLOGY ANGLE WITH AI AND WHAT THAT MEANS FOR THE FUTURE OF WORK. IS THAT ANOTHER DISH IN THE BLOOMBERG TECHNOLOGY. ED: THAT'S A BIG ONE, 24 HOURS WE WILL DIG INTO IT AGAIN. DON'T FORGET TO CHECK OUT THE PODCAST WHEREVER YOU GET YOUR PODCAST BUT IT'S ON SPOTIFY, APPLE AND NEIHART.
WHAT A WEEK IT IS BEEN.
2023-08-24 14:58
