Bloomberg's Caroline Hyde discusses Arm's potential IPO which is expected to be the biggest of the year. Plus, a conversation with venture capitalist and entrepreneur Keith Rabois on how his company OpenStore is helping small businesses grow online. And, Meta plans to launch a web version of its microblogging app Threads early this week, in the latest challenge to take on competitor X.
From Mahart where Innovation of Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heidel, Bloomberg's world headquarters in New York and Ludlow He's off This is Bloomberg Technology coming up. Aren't prepares to file for its IPO as soon as today and what could be one of the biggest tech listings ever on a US exchange. We will bring you the details. Plus we'll sit down with venture capitalist and entrepreneur keithra Boy to discuss how his company opens stores, helping small businesses grow amid a pretty competitive e commerce landscape, and Meta plans to launch a web version of its microbloggerging app Threads early this week. We understand the newest challenge is going to be taking on competitor x. I have all of that and so much more throughout the appt first with Sticking on Chips is sticking this time on the designer of Chips expected to Cools to file paperwork as seems today for its initial public offering, which is expected to be the biggest of the year, most certainly with US for the latest muggs Leanna Baker, who I think perhaps doesn't have as RESTful weekends as she is used to recently. So when we're looking towards these numbers, how much clarity will we get on the actual amount of the soft Bank is going to be selling here and what valuation?
Those are all great questions. We're not actually going to get those answers in the filing today. There's going to be a lot of blank spots. For example, how much are they trying to raise. We've reported it could be somewhere around eight to ten billion, but we've also having a story today that it could now be lower than that because soft Bank is not selling as much as they had originally liked. There was an insider transaction we've reported on where the Vision Fund, which owns twenty five percent of ARM, sold their stake back to SoftBank.
So the Vision Fund is no longer a seller in this deal. So it's a little.
Complicated, but it does seem like they don't need as much proceeds as before, so that's something we'll be trying to figure out when the filing finally hits today.
What was interesting is a Vision Fund sort a bit of an uplift Suddenly to the evaluation, what was it about?
Sixty four sixty four billion, which is an interesting number because they bought that stake for around thirty two billions, So the Vision Fund has doubled their money. So that's great for their LP, Saudi Arabia, et cetera, whoever is involved in the Vision Fund. But what does that mean for arms valuation? Because to me it would seem to be that they now need to get above sixty four billion as a value, although that's just an insider mark on it.
So there's really going to be a lot of questions.
How do you value this company? How's it valued against its peers. We've already reported on some of the financials the revenue Tiltal revenue is down one percent last year, but there's going to be more to uncover and unpack.
In the filing.
We'll see more on margins and other things we haven't reported yet.
And let's get to the nitty gritty O of the business model, because this is a company that helps basically define a blueprint for a chip then be able to really understand how it's the most productive it can be. It is so wedded to the mobile phone industry, and of course that's one that's been slowing. So how is this company trying to set itself up for success?
So it's right that mobile and ARM.
It's ubiquitous in mobile, but Rene has the CEO, has been trying to diversify ARM away from mobile and some more lucrative areas like the data center PC's servers.
So we'll be.
Trying to see how that's going, what the progress is. Remember, an IPO filing is also backward looking, so it won't have forecasts.
So there's going.
To be a lot that we see in this filing, but we won't know, you know how what the future holds for ARM. But we'll be trying to figure that out.
And can you try and get into the head a little bit of Masayoshi's son here as to what SoftBank would hold back a little bit for. Is it because they think they could get better valuations they sold stakes later. They therefore want to hold back in terms of putting it all into the market, which is still a testing market. To be polite, at the moment.
We've reported that soft Bank would look to float about ten percent of the company, So by holding on to ninety percent of ARM, that would indicate they're still bullish on the future. They're not ready to part ways. They have owned it since twenty sixteen. They do need a win after a lot of their failed bets on STARTUS, but they're not willing to just you know, get rid of this. Although they did try to sell to Nvidia, that deal was scuppered last.
Year the regulators a headache for many. We thank you so much, Anabaka. I mean, of course going to be all over this throughout the week when it comes to arms IPO, but let's get you an update of really what this says about the border IPO market in the world of tech piller hazards with us some place of say co found of equities, then it's a marketplace for accessing pre IPO equity. Now, Phil, I don't think I can access our equity here because I'm sure there haven't been that many secretary market sales going on at the moment, apart from seft Bank buying back from the Vision Fund. But ultimately, what has desire been like to be buying company equity at this moment in the private market.
Yeah, it's a great question.
You know, we've seen historically that trans actions on the secondary market very much coincide what we see in the IPO market, and so what that means is that over the last year and a half things have been a little bit slower. However, we have similar optimism kind of posts this RM IPO that a number of other.
Companies will test the market.
But it's worth kind of saying that ARM is not your classic venture backed company, going back to the or company of the market. ARM is a company that was public up until twenty sixteen, so investors are very familiar. It's a very different kind of beast than you might have a venture backed company coming out.
Yeah, well said one that I'm sure many are at and prior analyst in the UK is rubbing their hands and the beginning to get back into the financials of this business. Phil, I'm interested for what we're hoping for if this IPO goes well, go successfully. Who's there standing by? We know Instacrat for example, eyeing the market as soon as September for example.
Yeah, Unfortunately, I can't give specific names given that we work with a lot of the companies that are hopefully going to be coming public soon.
But I'd say that what investors will be looking at is how successful.
Is this IPO and say September, does that mean we have enough time to get our affairs in order and maybe lifts before the end of the year. Historically these two weeks leading up to Labor Day have been incredibly quiet. I'm sure there's a lot of very frustrated investment bankers all across the world galvanting and finding their way back to New York or London.
Wherever to work on this. So I would imagine if we do actually see.
A couple venture back tech IPOs, we'll see rumors of filing and paperwork between now and Labor Day, because that's the only way these companies are going to have are going to be ready enough to actually list and start trading by say October November, before you get to the next quiet season, which is in December, and.
It's leading the tea leaves. There have been a couple of relatively successful initial public offerings. Just remind us of who's come and tapped and what the signal is there for for the rest of the market.
Sure, I mean, in the last two years, it's been incredibly quiet of a tech front, apart from probably just some spinouts. You know, we saw Kenview come out from Johnson Johnson, So we've seen some spinouts. Work is going to be closer to tech, right, you know. I think a fun fact is that Arn't was actually started by a three million dollar investment from Apple, so it has silicon value roots. And so I think it also serves as a bit of a bell weather for how much do people really think AI is worth and how valuable is it to the people selling the picks and shovels and videos certainly indicated that it's worth a lot, but arm will be yet another bell weather and kind of indicate if there are other companies that are building on top of this new AI foundation, they can perform well in this market as well, because we honestly haven't seen a large tech IPO in the last say two plus years, and you know, we had kind of this BAC pocalypse that happened in twenty twenty one two twenty two, and so that's not really available anymore. Growth fundings are down, so I know that there's a lot of investors and a lot of founders and CEOs that are eager to see if this is a new channel for fundraising.
How frustrating has it been for those that need a liquidity event right now who are working at some of these startups and you know, need to manage their life, need to buy a home, need to put kids through school.
Yeah, sometimes it's even worse and they're no longer working at the company because they've been asked politely to no longer come to the company, and that's even more frustrating.
You've got this combination of.
Layoffs and at equities, and we hear a lot about employees current and former, desperately looking for liquidity. And I think the most proactive founders that we've talked to equities and are ones that are talking to their companies and their shareholders about ways to address liquidity through maybe tender offers or future IPOs. But it's something we hear about a lot. There's still a disconnect on what management thinks is not really an issue, and how employees are asking all the time for places like equities and can we sell shares?
I have downt painents on a house.
Interest rates have gotten higher, and so I think there's a bit of a kind of a boiling sensation happening amongst co founders or sorry amoungst employees and optimistic that we'll see a bit of that release valve in the IPO market, which will find its way down into the pre IPO markets as well.
I mean, you're all about access to add ups to private companies with accredited investors. What about sort of the global nature of that investor. Now we are in a time of geopolitical tension, to put it mildly, between the US and China. How much do you think when these companies are coming to market, we will see a global abound interest in buying US companies or indeed UK companies such as.
O't absolutely, We've actually seen it already. So we've worked with individual investors and investment on the equities and platform from.
Ninety plus countries.
Obviously there's a large concentration amongst the US and the UK, but we're eager to see that more and more US companies are breaking through and working on really hard technology problems. I think what's really exciting what we've seen in the last eighteen twenty four months is kind of the emergence of hard tech, deep tech, really difficult problems that companies are trying to solve, and that's really peaked the curiosity of people around the world that we've seen so We continue to see investor interests for US based companies in cybersecurity and AI in particular, those are probably the most common themes, which is unsurprising given the aforementioned geopolitical risks.
So we're excited to see that that trend can continue.
But ultimately, yes, our goal is to kind of bring this market opportunity to not just the wealthier the one percent, but everyone else that wants.
To be included.
Well, thanks so much for giving us your expertise today. Phil has that it's course co founder of equity Zen. Meanwhile, when we want to talk about something else that's affecting potentially and a load of tech entrepreneurs and builders at the moment. But following Tropical Storm Hillary, it's a weather event. It's pummeling California, flooding rains today, disrupting flights, knocking out power in fact across parts of the state, now across the southwest region. The ongoing and historic amount of rainfall. We understand it's expected to cause life threatening to catastrophic floods along with landslides mudslides so well, according to the National Hurricane Center. We'll continue to monitor storm for you and bring you updates from New York. This is Brittemberg Technology. Let's talk China for a moment. Search engine provide a by Do. It's set to report second quarter earnings tomorrow. The sluggish Chinese economy and for some setbacks from a key segment of its business. It calls brokeers to lower their earnings expectations to this particular company. For more, that's bringing blue eggs Isabelle, who's going to be analyzing and keeping a breasts of what's gonna happen with Bardo And I mean it's had a big run out. What do we expect in terms of numbers? So a couple of things.
You're right, brokers have really lower to expectations. In fact, they expect a slowdown and that income growth. And this is a combination of many things. So in the beginning, Baydo was one of the first movers into the AI space, and first mover is important. It created a chat GPT like technology called erning Bot. But then disappointments are now slowly piling up on earning Bot. Main key reason is the lack of consumer consumption. I guess it's just getting it hard. It's finding it hard for people to use the machine and Because of that, analysts are saying, hmm, maybe this isn't as promising as we imagine, and there's slow really just lowering their expectations, and that's really what's weighing the stock lower. And if you look at it, options traders are also moving because they put call ratio, which is a sign of bearish sentiment, is rising this month, so people are kind of positioning against that tomorrow. So we'll see, but who knows, maybe earnings will surprise those exactly.
I mean there have been nervous ahead of perhaps these numbers because actually there's been a normal profit to take off the table when it comes to party. It has outperformed some of it. So all the competitors, right, it definitely has.
It's up around thirty thirteen percent year todate and it's the best performer to hang saying index which is down kind of three percent. But we must remember that Bido maybe a little bit ahead, but it's competitors. They're closely behind, from Pencent to Alibaba and both of them those giants are also now creating their own AI chat GPT like thing. I mean, yes, you're the first mover, but you have to maintain that because if a competitor is second or third leaves over you, then that's going to spell trouble for you. Are saying that the outlook remains cloudy at best. So it's actually not looking that good.
I mean, it's such early days when it comes to generatorve ai and any of that becoming revenue injuicing. But what is revenue inducing for by Doo is well, local governments and the actual Chinese economy spending on AUR related products. At least, how have we seen that considering the macro economy.
Okay, that's true, A is just one arm. They also have a cloud arm. But then overall it's just not looking good for China. We have consumers spending down, prices are down, the company's real estate sector is one of the biggest companies is on the cusp of a default. One in five young people there don't have jobs. It's just not really looking that good overall, and the big rebound that people were hoping to see just didn't pan out. A lot of analysts are saying that the five percent target that China is aiming for may not come true. But then, you know, you don't also want to be all this gloom and doom. Maybe too early, but for now it's not looking good to China. In effect, it's affecting its biggest sector, which is the tech sector. And because this sector is very dom stick and like you're in the US, a lot of international people use whatever products the Wall Street here a Silicon Valley makes, but it's not the same in China. A lot of the products there are really used by domestic.
I think, I mean really to the point that some of these GDP figures a city, for example, economists downgrading where they think overall China is going to go. Some analysts starting to figure that into bider and the rest of the tech sector. Brilliant to get Isabelle ahead of those, of course, keep an eye on how by do performs isabella LEI there. Meanwhile, let's stick with AI and chatbots, because well, neither who is line messaging app and search engine dominates Japan and South Korea's internet landscape. It's got a mail guess what its own answer to chatshetpt as it joins a race and is global to tap potentially transformative AI technology. Now, the company is expected to take the lid off several generative AI services. It's been working on latest and soon as this week. We understand time now for talking tech first up. After plunging following its earning support last week, addi End's most bearish analyst predicts even further declines that The City Group analyst said in a note he remained skeptical of adiends reaching its long term margin target, maintaining his Cell rating on the stock. Meanwhile, Broadcom's sixty one billion dollar takeover of VMware was cleared by the UK's anti trust watchdog, paving the wave for the one of the largest ever tech deals, and the CMA confirmed its provisional decision to clear the deal after finding that it wouldn't substantially reduce competition in the supply of key computer server products. Plus, let's talk about the Tesla data breach that was back in May. Impacted more than seventy five thousand people and included employee related records. Now, according to a notice posted by the Office of the main Attorney General, the breach was a result of insider wrongdoing. Tesla says two former employees shared information with a foreign media outlet. So let's get the details on that story. For most Anna Halla's with us and Dena I mean it was Hannelds. Black was a German publication that we understand got the information contacted Tesla. What do you think that was being shared here? Shared here by who?
Well, it sounds like it was internal employee information, things like names, addresses, social Security numbers, and you know. The details that we learned on Friday are thanks to the fact that the state of Maine is one of the few states in the United States that kind of regularly posts data breach information. So Tesla is now informing former and current employees if they were impacted.
Apparently nine of them live in the state of Maine.
So the state of Maine got this notification, and they're saying that two former employees basically shared this data with handles Plot and that Tesla has taken legal action against them.
The one thing that.
I don't know is where exactly these former employees live. I'm assuming that it's in Europe. I'm guessing that it could be in Germany, given that handles Plot was the was a publication that originally got this information. But it does not appear that these folks are in the United States. I can't find any record of a lawsuit being filed here in the U. So in terms of next steps, we're just sort of wondering, well, okay, where is this lawsuit, who are the employees and is there any kind of EU gdpr sinction coming given.
This data breach?
Interesting? I mean, Tesla's said that they've cooperated with law enforcement, but is there any well ramification of what they should have been doing could have been doing, because when it's internal wrongdoing, that must be pretty hard to prevent, right, Well, it sounds.
Like, you know, internal wrongdoing and two employees basically sharing employee data. So to be clear, no consumers were impacted by this that we know of. This really seems to be impacting Tesla employees. But why there were more controls how these internal employees had access to this database, I'm not entirely clear. And you know, the Tesla statement on this main website is pretty vague, like cooperating with law enforcement, but like which law enforcement? Like are we talking like the Dutch regulatory authorities, the EU Germany? Like It's that's that entirely clear where within Europe this is all happening.
And Autopilot, the driver assistance product, that was something that seemed to be flagged in some of the data that was at least leaked to Handles Black. Why is that so important to Tesla?
Well, autopilot is just a big part of Tesla's valuation, you know, Elon Musk himself has said that, you know, the promise of future self driving is like a big part of why investors believe in the company. And this data breach covered all kinds of things. What we learned on Friday is really more just about the employee information. But yeah, I mean autopilot is a fugiturist to investors and it's a big differentiator, right, Like you know, electric vehicles are now becoming more common, but Tesla's autopilot is something that Tesla still markets as being something that sets that apart from.
Their evs one to watch considering also just how global teslra is and I know that that was something Handles Abount was shining light on the fact of access perhaps by China as well. Anaha, we thank you so much coming to us on that data breach, well the nuances within it. Welcome back to Blombo Technology. I'm Karen Hide in New York. What about payments, premissessing and the world of e commerce more generally, what about e commerce in terms of our enthusiasm around it and pleased to say we could get a really close look at it via open Stores, the largest operator of Shopify brands in the world. It's announced ways to actually support some of the smaller players on the platform using open Store Boost to help the businesses grow. Joining us now as of course the even still CEO and well Home VC Keith through a boy Keith. It is great to have some time with you, And what we loved about some of the announcements coming out is actually the intricate detail you're giving of just who's on there selling via Shopify and how small some of them are. Was it a surprise of how small some of these online commerce players are.
Well, we always knew that of the two million Shopify stores that many of them would be long stile businesses. The whole premise of open s Store is that we will offer to buy a long tail Shopify store or allow the owner to turn it into pass cash flow and take a break. And we're always targeting one to ten million dollar GMB stores, so pretty small.
But in studying the market.
Over the last few years that we've been in business, we realize that eighty five percent of Shopifi stores are very small and they don't have the tools and the opportunities to grow into that scale. So eighty five percent of business on Shopify earn less than fifty thousand dollars a year, and so we're going to fix that. Anybody who's earning fifty eighty to five hundred K will allow them to apply, and we'll give them access to all of our tools and expertise and try to grow them ten x in a few months.
Okay, and then they get into the remint of your sweet spot. So does your sweet spot change at all? Or do you continue to want to be looking at buying and running companies that are about a million to the likes of ten million in terms of GMV.
I think the biggest market opportunity for us where people don't have access to brand owners, don't have access to capital, and where they really don't have a lot lot of equity options and they're confronting a really challenging choice, which is to run a business twenty four to seven sweat twenty four to seven forever, or they can allow us to drive the business.
It will guarantee them the cash.
Flow, or they can sell the business and walk away and do whatever's next and whatever's important in their life. This area has never had opportunities before. I think, as you grow a business into fifty one hundred million dollars sales, there's other options, but most people don't have those options, and that's why we exist.
Of course, you exist to mainly help US based companies, right but would you go global? Would you look at companies that perhaps are international in them in their perspective or at least where they build to be selling vibe into the US?
Absolutely, We already will price to acquire or drive a business that targets US customers wherever in the globe the business is located. For now, though, our focus is building a value proposition for US consumers and at some point in the future.
Works found that US consumers have got quite a lot of choice right now, and in fact, they're getting a lot of choice from abroad. I'm just thinking of how Sheen has really managed to dominate capture attention in the lower end price point of garments. You're thinking about TikTok that's potentially going to start adding shopping to its remit Like, how is the world of e commerce in the US from real perspective well.
Most digitalization of commerce hasn't been very successful. So we're thirty years into e commerce and roughly e commerce ac counselor at twelve thirteen, maybe fourteen percent of e commerce. And there's fundamental reasons why that's true. Why there's a big blocker is that nobody has a way of discovering inspired purchases. Products that you serendipitously discover when you're in the real world, if you're at a shopping mall or if you're at a department store back in the day, you see things that inspire you. And really the only way that works online today is through Instagram ads to shopify stores, which is a very inefficient way of discovering products. Most of the time when you're on Instagram, you really want to see your friend's content. You don't really want to be shopping, but you get interrupted by adds to one percent of those people click on those ads and buy something, and that's, you know, not the best way to substitute to go to the design district in Miami or a shopping mall in New Jersey when I was growing up. But that's what we're building, is aggregation that inspires purchases and nobody in the West has ever done that before successfully.
So how like when you've got you know, door dash engineers, some of the early ones really thinking about the way in which we engage in shop, like what are the innovations that we can't see around the corner of yet.
Well, we're going to ship some products to the next quarter, so it's the starting in September that will show some inspired purchases. The first thing we needed to do was acquire brands, products, Scus and a customer base.
You really need.
You know, you have a kind of a proverbial chicken leg problem, So we needed to start with products and SKUs. Now that we have a supply of over one hundred thousand scues and over two million consumers that bought something from.
Us, we can stitch them together into.
Compelling value or proposition that is a standalone app that people are going to want on the phone screen on their phone.
What's interesting about your business course, is it where you're buying other businesses? Sometimes that right, sometimes just managing what's that like? From a valuation perspective? Have those lifestyle CEOs are they willing to sell the business when perhaps things don't look as pretty from a valuation perspective for them.
Well, we've study this empirically and a seven percent of brand owners on Shalpifi wants to sell their business right now and seventy four percent want to sell at some time in future. So the acquisition process works really well for the seven percent who want to sell, will make them an offer it's very attractive.
And then they can go on invest the money however they like.
For people who are in the seventy four percent, they may opportunistically want to sell, but they can just get the cash flow and have the passive income with none of the stress. So we've kind of created a product suite that appeals to a very wide set of brand owners.
On Shopify, you've got a one hundred and thirty there are thereabout some employees. What's the market like for talent at the moment, Keith.
It's a great question. I think the talent's widely available right now. I think people are frustrated at large company bureaucracy in a real to join new companies and trying to transform parts of the world or all the world or industries, so that's become easier. I think there's a lot of less sort of vanity metrics and fake fundings where companies are getting funded that they shouldn't to be sort of migrating to create a critical density of talent around companies that have high potential.
You can show off your high potential, of course, because of the money that you were able to raise was more than one hundred and fifty million, inequity you've valued at about a billion dollars. You're a man who also sits on the other side of the table and often is writing these checks in this environment. How are evaluations big tech startups right now?
We've been very disciplined at Founders Fund. I think we've been consistently disciplined, maybe even before the market change, but fundamentally there's been a massive transformation in Series A, Series B and late stage growth company valuations. And so we're investing with very soluctively the right founders who are the extraordinary founders within a compelling vision. But we have to pay prices valuations that reflect reality. So we went through about a two or three year window when valuations were really divorced from reality.
That occasionally happens in.
Tech about every twenty thirty years, Like this happened in ninety ninety six, ninety seven, ninety eight.
With ninety ninety to two thousand.
You know that three to four year window was totally gone and things were back to normal.
So if you take arc of forty years, if you pay, if.
You invest at the right prices, things work out well on technology. But there's blips of two to three years when you could feel good with just momentum investing.
Is that just momentum investing around AI at the moment right?
We think? So? I don't believe in AI companies.
As a good place for a VCS to be spending their time, but I'm glad like competitors want to waste their money there.
Really, like what makes you reticent because you don't think that a lot of them are actually integrally AI at their core?
Well, no, I think that there's a classic structural advantage in new technologies, and some of these technologies are disruptive and they disrupt incumbents in their powers, and some actually enabling combents to get stronger. AI is most likely going to generate more power for large tech large market cap tech companies not really be a substitute. And if there is a substitute, it's probably going to be open AI, which we've investigated unfortunately.
And so how you seeing the global nature of AI and the face competition there is do you think that the US giants are going to be the ones stealing the funder hair or do you think it will be in China?
For example, I'm seriously concerned about China's progress in AI. I think it's been under reported and under uh you know, and uh policy makers and regulators haven't paid enough attention. That's starting to change. But there's a lot of advantages China has an AI. There's less privacy, there's more people. More data usually makes AI better. Their organizational top down hierarchy may work better for AI building.
So in the and their computing power and their chips are actually pretty first rate. I think people underestimated that as well.
So the combination is very scary and this is a major threat to the United States. The future geopolitical future of the United States is whoever Wednesday AI race.
Well major advantages.
So this is something that everybody United States, from entrepreneur, from the entrepreneur level to the presidential level, you need to pay attention.
To every day.
Wow, thanks for making us pay attention to it. Thanks for shining alout and some of the Chinese competition coming in in commerce stretch as well, and just the whole world lens that you get from an open store and and you've found us fund. We appreciate it so much. CEO of Open Store, Keith boy there. Meanwhile, coming up, we've got to talk a little bit about social media. Talk to TikTok a moment ago. Let's talk threads, Let's talk X. Let's talk about threads coming on too desktop and what X is doing to disable your blocks. I'll discuss at all and going viral. This is bluemog technology. Time for going viral and look at what the Internet is talking about. According to reports, Meta is planning to launch a web version of its app Threads early this week.
Now.
The web version is already been tested internally at the company. We've also got some updates on XO. Meg's Max Chaffkin is here with more. And I mean there was a lot of hype and actually, you know, reinforced hype when it came to Threads, and then it's kind of just pulled away a little bit.
Yeah, you know, back when Meta, you know, the company formerly known as Facebook, launch Threads, the kind of criticism was they're just taking the audience from Instagram, which is a huge platform, you know, obviously with billions of users, and sort of grafting it onto this new social network. Critics were questioning whether that audience would stay. We saw a hundred million people download the app, and what's happened is is kind of what I'd say critics were worried about, which is that the audience has kind of fallen off.
We're seeing, you know, it's still getting used.
It's still if it weren't a Facebook product, I think people will be really impressed by it, but now they're back down sort of more in startup territory. We're seeing the company kind of start to do these normal things. You know, a web interface doesn't sound that exciting, it does. There is a little bit of a you know what, like you know, two thousand called and it's it's it's not what you would normally think of as a product update. But this is the kind of thing that is important for marketers, social media people if they want to have kind of like brands using the service, having having a web interface will help.
And I think therein lies the issue is that brands wanted to save a space, but we, as the user, wanted things that we were familiar with that Twitter now known as X makes Interestingly, X is taking away things that we quite like using on x Y.
Elon Musk kind of showing up on X formerly Twitter last week saying he's going to get rid of the block feature. That's the feature that allows you to essentially prevent people from reading your tweets while while you're logged into the account. Also means you don't see messages from trolls and so on. A lot of people like this, people on sort of both sides of publical aisle brands like it. It's it's a little bit surprising to see Elon Musk doing this. The one thing I'll say is, you know, Musk has seemed to be trying to do whatever he can to kind of goose engagement to you know. We've seen reports about you know, and it's disputed to what extent has Twitter's traffic gone up or down, And it seems like this would be an effort to get more people logging in more of the time, because if you're getting trolled, if you're getting into fights, then you're using the platform and it's all gold as far as Elon Musk concerned. The point the response to that is that brands, of course do not like having their ads appear next to trolls, and that's kind of been one of the central criticisms from Madison Avenue of Twitter now X in the Elon Musk era has been.
One of the central focuses of the new CEO. In the yak Areina, I mean de facto, whether she's not in control or is trying to drive real change, but it's something about brand safety from their perspective.
Well, she's certainly talking a lot about brand safety because it's something that the brands care about. But on the other hand, there hasn't been a lot of necessarily action around that besides statements by Linda Yakarino. I think a lot of advertising people are sort of taking a wait and see approach. They like what she's saying, they like her, they know her track record, but they're not seeing steps towards brand safety, or they might question whether there's been real effort in terms of brand safety. And this is not going to help. This is not going to assure those concerns in any way, although it may add a little bit more traffic. A little bit more engagement, which of course social networks need, and you know, Thread's engagement seems to be falling, and of course Elon Musk certainly craves that attention.
Meanwhile, he says there isn't a good social media network out there at the moment, sort of self flagellation. At the same time, Max always great to catch up with him. You've got to go and meet him all across Boomberg, of course, whether it be on BusinessWeek or him like. This year continues to mark a kind of gradual turn to a five day in office work week, as more company requires after we return to the office at least four days at least. However, some argue that limiting work from home will hit women that took advantage of the flexibility horder than men. So how are this trend impact what diversity looks like on the executive level going forward. Place to say that someone's putting a lot of thought into this is the Chief People Officer of Service now, Jackie Canny, and it's great to have some time with you, Jackie. And just at the moment, you're trying to think about talent, about retainment, about ensuring that people can work most effectively from wherever they are. Are you asking people to come back to the office to ensure that it's that serendipity you keeping a flexibility around Service Now?
Well, first, thank you for having us here. It's such a great opportunity to talk about what I care so much about, which is talent strategy and people and how they can thrive and here at Service Now, we've been always leading with flexibility and trust for our people, even before COVID and then certainly during COVID, and now we still lean on we have the opportunity where are people with their managers can pick what persona they want to be in. Is it to be a remote person meaning you're not in the office at all? Is it to be a flexible person where you're one to three days in the office per week, and then are you in the office all the time? And we continue to you know, let our people let that unfold, and it's been working really great for us.
Does that I was talking to someone who works another key tech companies having to make that decision right now as to whether they sign up to be fully remote or not, and well, they're mainly worried about what the winter looks like, how they will then feel in months to come. How that ultimately unfolds. How do you ensure that flexibility remains flexible to help in and opt out of.
It's for sure, this conversation between a manager and a person here, it's we have flexibility in that conversation too, and we're continually, you know, adding these requests and trying to manage them all so that people get to put their point of view out there and then if we can make it happen, they can pick the persona that they want to they want to be in. So I expect the winter could create a different environment. There's summer here in the US. That also, you know, people need more flexibility and we've been able to keep those promises.
So without a mandatory office attendance, are you kind of like the biggest flexible distributed workforce.
I'd like to think so. I haven't really checked on that, but we certainly are amongst the biggest, and you know, I think the people being able to have a covenant with each other on I'm going to be in the office one to three days as flexible is really important. And if if you're not going to be in one to three days, then you have to talk to your manager about why you're not going to be there. So I think we can continue with flexibility and accountability in the same way, so we can get the growth, the innovation, the shoulder to shoulder camaraderie where we can and certainly really dial it into moments that matter. So I'm in the New York office today. One of the jobs I take seriously is to represent this workforce in New York. Whether it's about coming in because there's a great learning and development opportunity, or you know, we have other visitors coming in that you can learn from, or there's a community social event where we're helping give back in New York. And I think that is actually what's bringing people into the office more than a mandate or you know, sort.
Of being specific.
And I think that those moments that matter will continue to like have us earn the commute for our people to come in.
I'm sure they're coming in to talk about the technology they're building. How much are they worried, particularly in your area of focusing on reducing bias and ensuring equality. When we think about generator of AI and AI, how much is there thought about that in the moment the way in which you deploy it at Service Now.
We are such an optimistic company. You know, we have great ambitions. You've probably heard Bill McDermott talk about us becoming the DESCO twenty one C, which is the you know, defining enterprise software company of the twenty first century. So innovation technology generative AI are always at the top of everyone's mind and it's an exciting optimistic place to be to talk about those things, specific around bias and the things that you just asked me about. You know, I believe that the technology can help us take that out. So you have a job description, you can use generative AI to review that job description and say these are the things that come out because it is creating bias versus the negative, darker side of AI, and we take it very seriously in how we build governance and trust.
We're here for the optimism. Jackie Kenney, thank you so much. Service Now CPO. Great to have some time. But then and ultimately that does it for this edition of Bloomberg Technology. Don't forget to check out our podcast. You can find it on the Terminal, online on Apple, Spotify, iHeart from New York. This is Bloomberg Technology.