I'm Caroline Higher, Bloomberg's world headquarters in New York, and I made Lovelow in San Francisco. This is Bloomberg Technology coming up. Espionage in the chip industry ASML accusing a former China based employee are stealing confidential information, the second such breach in less than a year. We discussed plus are we there yet? Elon Musk says he needs until late this year to fix Twitter before handing over to a new CEO. Will bring you the details and valuing the AI opportunity. We sit down with Sonja Juang, partner on Sequoia's capital growth team, for a look at the future of generative AI technology and the startups driving it. But first were checking on the markets because well, initially there was panic that retail sales were growing at almost the fastest clip in two years up three. Does that mean inflation is going to be high too? But then the market decides to drive higher and in fact we closed session highers in the natstack up nine. The modern markets more worried about the good data and there are some six spaces points as they think the Fed's going to have to tackle that inflammation inflation. Interestingly, we've got a bit of a sell off in Chinese related names at the moment. Maybe this is a bit more of a focus on what's happening in terms of geopolitics rather than what's happening in the macro economy in the US. Flipping on a gear, I'm going to delve into some of the micro stories. On the day, we had some significant rallies. I mean notably Roadblocks up twenty six percent, best day since December twenty Everyone was gaming over the holiday season, and also they were really adding those active users. Airbnb up best dayance November twenty one really on a tear as well, as it seems as though the strength of twenty two it's going to continue into next year. Yeah, earning is a real driver, and that's still the case after ours this Wednesday. These are names I'm watching. Cisco forecasting sales in the April quarter will rise eleven to thirteen sent, double what analysts were forecasting, that stock having a positive reaction. Twilio of course just gone through a second round of layoffs, but a surprise forecast for an adjusted profit cents per share for the current fiscal quarter. The street looking for a two cent lost That a big surprise and boosting that stock boos Roku one that we haven't spoken about as much carry up even after saying first quarter sales will be seven hundred million dollars slightly above street expectations. That there's been concerned about how they're losing market share to everyone else out there and seemed to be weathering the storm. The big story of the day in markets but also geo politically was a SML the Dutch chip equipment makers saw It's u s A d r S actually under pressure for most of Wednesday session but basically closing flat. What we know, the company disclosed that a former employee in China stole information. That's what was driving the narrative. Now in the last thirty minutes of breaking bloomberg scoop which gives us some more insight into exactly what that information, what that data was. That's bringing an executive editor, Tom Giles, who has the details. Tom, what have we learned in the last thirty minutes We have gotten information about We've got more information on exactly what was stolen. So this ex employee, this China based employee, took information from a data management system that's used internally to let employees collaborate on products, and the products in this instance are very expensive lithography machines that a s m L uses that that customers use to actually make chips. It's very expensive equipment. It's these these are these could be the size of busses and costs upwards of a hundred and seventy million dollars a piece. So it's very very valuable information. And what this person took, we don't have the specifics, but they we know where it came from, and it came from this like information sharing system called life Cycle life Center, Team Center. Is that what I mean? If he seems to be coming from the likes of Siemens Tom. What's so interesting is that this is what the second time that we've seen such a breach from China being linked for a s mL, and all of this just speaks to the tension around US and China, particularly in technology. Yeah, you know, the US is doing everything it can to deprive China of the information and the and the and the technology it needs in order to become a force in hip making. It legs far behind the US in this critical technology, and the US is doing everything it can, and it has asked players in Japan and the Netherlands, which are some of the companies, including a s mL that make the most sophisticated equipment. If you don't have a s m L on your side, it's really hard for you to come anywhere near the capabilities of the US and the West. And that's why a s m L is so critical. It is one of the very few companies in the world that makes these photography systems that the information was stolen about UM using everything from e vs to military gear. Tom As always, thank you so much for helping break down what is another great scoop coming from your team. Now turning to another company that we're watching, just talking about Evis and well, the man that's behind one of the key ones, but he's also behind Twitter at the moment. Elon Musk spoke to the World Government's summit in Dubai earlier today, so that he may need to rest, in fact, have the rest of this year to make things right at Twitter before handling off to a new chief executive officer. Just take a listen. I think I need to um stabilize the organization and just make sure it's in a financially healthy place. UM and that the product road map is clearly laid out. UM, So I don't know. I'm guessing probably towards the end of this year, UM, we should would be good timing to um find someone else to run the company, because I think it should be in a stable position around you know, at the end of this year, well Man has followed his entire journey over Twitter is one cut Wagner and I feel like a lot of Tesla shareholders were a bit disappointed by that timeline. But what it was the Twitter reaction? Yeah, Well for me, having you know, seen the pole that Elon Musk came out with at the end of last year saying should I find someone? I think the expectation from folks is that this was going to happen a lot quicker than a full calendar year, right, But as he pointed out, he has really been dramatically trying to cut down on the costs at Twitter. He's still spending a lot more time physically in the building than I would have predicted when he first took over. So you know, he he clearly doesn't feel like Twitter is in eight place where he can hand it off to someone else. Now. I also think, let's be real when he does find a new CEO. It's not as if he's suddenly going to disappear, right. This is someone who likes to be very, very hands on with the companies that he has. But I do think that it's taking a lot longer it will. It sounds like take a lot longer than I had expected. As we do each and every day, we went to our audience and asked, what do you think must should be doing right now? Should he be doubling down on Twitter? Should he go back to Tesla? These are the results. They kind of speak for themselves. Respondents say, get a new CEO in a SAP. What I'm finally hard to pass is what has he actually done there? What is he actually changed? And what is a brief amount of time since taking over? Well, we know that he has gotten rid of a lot of people, right in terms of costs, They've cut more well over half of the staff. They're not paying some of their bills, they're trying to renegotiate contracts with vendors. So you know, there are business things that he's doing to try and drastically limit how much money Twitter is spending. So that's one thing from a product standpoint, you know, it doesn't feel like there's been a ton. Of course, for those of us who use Twitter all the time, we've seen things like, uh, you know, the algorithm changes or the tweaks too, maybe the types of things we see in our feed that we didn't before. But it's not as if there's been some major new product then none of us were expecting that's come out yet. Yeah. Well, I guess Twitter blue to a setting stand you have the edit if you you know edit button issues. I canna ask you a difficult question, knowing full well none of us had an answer. But who could be yea and the next CEO at Twitter? Well, what's funny is that, you know, I think we we've heard and reported that there's kind of a search going on, or there was a search at the end of last year. But what's you know, My read on this is that it's going to be someone who Ellen is very close with already, right, I mean, he's not going to just hand this company over to someone that a search firm finds for him. It's going to be a trusted adviser. It's going to be a friend. And you know, I think that list is probably relatively short. You see you look at the people who have been helping out most at Twitter, which maybe it gives you the best idea. There's people like David Sachs, right, who he knows from his PayPal days of venture capitalist Steve Davis, the president of the boring Company, has been spending a lot of time on Twitter. Those are the types of names that I would be leaning toward. But again it sounds like we have a lot of time before he's going to make that decision. Cogner, love having you on about it, Thank you so much. Meanwhile, let's stick on the theme of elon Musque because thanks to Tesla's se many scent rise this year, that's the stock price. The millionaire is closing in on recapturing his title as the world's which is person since, of course he fell behind Bernard oh No in December, but may take a bit longer for mus to actually overtake No, who's of course behind LVMH. He disclosed in fact this week he gave eleven point six million Tesla shares to unnamed charitable causes between August and December two. Now, the stock was worth about one point nine billion dollars based on closing prices on the days must donated the securities. Earlier today, the SEC proposed expanding certain requirements to cover a range of assets, including virtual currencies. Bloomberg Shnali Bassek caught up with coin Bases General counsel and chief legal officer Paul Grell about how these changes were impacked his company, coin Base cuse c Truck's company is a qualified custodian today, It was a qualified custodian yesterday, and it will remain a qualified custodian tomorrow. UM And the reason for that is that in many ways, coin bases operated exactly in accordance with these rules, and we think that's good for the industry, and we think that's good for consumers and investors. Against that, back draw, Paul, what do you make of these SEC share comments that investment advisors can't necessarily rely on platforms such as coin Base as qualified custodians. Well, I think that when it comes to coin But when it comes to coin Base, we've seen actually SEC officials explicitly recognized that UM coin based can and does operate operate as a qualified custodian in a safe, reliable manner that investors and consumers can have confidence in as for others, we think standards are a good thing. We think that UM investors and consumers have a right to understand that their assets are safe, that the standards are being followed by those charge with that responsibility. Are are those our standards that have been vetted by appropriate UH over overseers and regulators. So in a lot of ways, this is about bringing the rest of the industry up to the standard coin basis set for itself, and on balance, we think that's positive, Pa Paul. What does that then mean for something like international expansion? At the end of the day, UH, cryptocurrencies broadly are an international prospect. How does that translate? They are? I mean, there's no question about it that UM. One of the things that I think is has has has accounted for LAD to so much of the interests in crypto is it's borderless nature. But the factor remains that each jurisdiction has its own rules, and coin base of course follows those rules UM in to the strict letter of the law. UM. The thing is though, that for UM, for many in crypto UM, the options to operate are are truly international. What that means is that the United States needs to understand that um its standards are in some ways, uh competing against those of the rest of the world, and so yes, we always want to make sure that investors and consumers are protected. Yes, we want to make sure that those standards are clear. But it's also important to strike the right balance between innovation on the one hand and protection on the other. That was Coin Basis Teeth legal officer Pool Grail. Let's get into it with Bloomberg Shnali Bassek, who is a part of that conversation that brought us that intoview. I guess the starting point is what does that mean for coin bases business? How does this complicate things for them going forward? Well, I think a couple of things are interesting here. Ed you have them clearing the record here and seeing them as a qualified custodian even under these new proposed rules that it's still unclear on how long they would take to become real rules given the feedback that they're getting. Overall, remember, even though you have coin Base here kind of applauding certain parts of this process here, coin base has such a nuanced relationship with the SEC they applaud certain parts of this rule making process us. But remember there are other things that they heavily dispute, such as some things that the SEC feels about staking. Even when it comes to this qualified custodian issue, remember coin based is one, you have other members of the crypto community a little more concerned. Jake Travinsky, for example, of the Blockchain Association voicing his frustrations online about how these proposed changes could violate the SEC's mission by making investors less safe and discouraging capital formation. And I have to say, when you look at the other SEC commissioners that have weighed in, there are a number that have also voiced concerns about the amount of qualified custodians. What happens outside of coin based in this industry, remember both because Bitcoin was up over the twenty four hour period as well as some positive, frankly regulatory news for coin based you saw the shares just completely ripping today. But again there are some things on the sidelines, like the staking issue, which remains to be unresolved. Let's go outside the world of coin based las because my husband's a manager over there, so I don't want to talk about it too much, but I'm interested in you'll world outside what other ripple effects, What is you know, e crypto at large being reading into the SEC crackdown? Is it where did the ripple effects go well outside of coin based Like I was saying, the reason this matters so much is because we've reported a couple of times this week that the SEC and other regulators have largely been whispering to the rest of the financial industry, is saying that listen, your relationship to crypto matters to you, and by the way, could open you up to more liabilities. So if you're a hedge fund, do you have to worry about how your assets are custody? It's interesting because let's see how the next twelve months play out, because as that forced these hedge funds like a Brevan Howard or others to start working with the likes of a coin base more, what happens to something like b n y Melon you have, for example, just a couple of days ago. Brian, I'm so from talking about how institutional interests has grown in this space, even despite some of the crypto winter issues. But what happens as the SEC brings down a stronger arm on the industry, do the traditional players start to get a little spook to the main question and to take it full circle back to why the SEC is so rankled about crypto and why in many ways people are staying acting with hindsight is because of what happened in the fd X. It's up to speeding. What's happening with the founder of f t X. Some I'm not freed has been all over the press today. What a day. So this has been weeks where we knew that Sam Bank been freed as well as his lawyers have been trying to keep the name of the guaranteurs behind this really record setting bail package, this bond that you wander fifty million dollar bond secret. But now we have the judge really saying that this doesn't apply to these particular instances because these guaranteurs decided to be involved in such a public case. These are two people that are very closely closely related to the parents of Sam Bank been freed. Remember this is Barbara Freed and Joseph Bankman, who were been Stamford law professors. Remember this is one of the people involved in the guarante guarante our program. Here's Larry Kramer, who was a Stanford lawd d mean a legal historian alongside Barbara Feed for a very long time. And if you take a look at the statement here, really he makes it very very personally. Has nothing to say about the legal matter itself. But his family has faced a harrowing battle with cancer, he says, and the Bankman Freed family has been the truest of friends, and so this is a very personal matter for him to show up for the Bankman Freed family and the time of need. According to his statement provided to us on Wednesday, Tomorrow, Thursday, Sam Bankman Freed does face court in New York again to discuss his bail conditions. Remember, there's been a lot of questions about how he's been communicating with people via signal and other means in the course of his house arrest here where he is living with his family on essentially what is uh land and property owned ultimately by Stanford as well. I'm sure you'll be giving us up to speed with all that happens in that court tomorrow, shnais we kind come Meanwhile, sticking with oversight, the CEOs of Apple, Metta, Amazon, Microsoft, well, they've all been subpoenaed by the House does are Committee chair Jim Jordan is seeking more information from the tech giants on content moderation that the subpoenas requires and a bit Shiye and new Jasseye, Tim Cookmark Zuckerberg, and Satyanadella to respond to the committee with documents and communications by Marche. We do not know if there will be an in person hearing. Ed Thank you, Karen. Are coming up. Apple pushing back it's long awaited debut of its mixed reality headset. We bring you the Bloomberg scoop. That's next before we head to break, I'm checking in on Roku cool Underway shares continues to push higher, up almost eleven percent, forecasting revenue of seven hundred million in the fiscal first quarter, above expectations. I'm looking at commentary on the call from Anthony Wood, CEO, Steve Loud and CFO saying two very tough year, but the outlook going forward a bit brighter and on that adjusted the bit dar basis they're moving towards positivity. Will continue to try that stop as the calls ongoing. This is Bloomberg, let's talk about Apple, and they're setback for the company's next big initiative. According to people familiar in the matter, that touch Jon is postponing that planned introduction of its first mixed reality headset. Let's go go to June instead of April, Bloomberg's Mark German. Of course he did. Of course he had the scoop for us. Just talk to us a little bit about well, what's having to put the brakes on here? Yeah, thank you so much for having me as always. So this is the latest incarnation of the status of Apple's long awaited mixed reality headset. They wanted to get it out the door in about this time last year. They pushed it back to the end of last year, than to January of this year, than to April of this year. Now it's being postponed yet again early June at the annual Worldwide Developers Conference, Right, that's ww d C. This makes a lot of sense. This is Apple's big showcase every early summer, late spring, where they introduced their next platforms, their next software updates for all the devices. So it makes sense to showcase this device there too. I get that. I get the marketing decision, but was that what drove it? According to our sources, did they basically say, you know what, let's wait for the big splash, or in looking at the products, was it just that there were issues, it wasn't ready. What have you found out? I'm sure it was a blend of both. Obviously, Apple's a very marketing and PR driven company, so I'm sure that had a big role to play in it. But this was mostly an engineering based decision. Uh. There were quite a few issues related to both hardware and software on the device, and maybe a little bit attributed to production as well, So it made sense to push it back, keeping the oven for a couple more months and really have that introduction down correctly and have that gap in between when the products introduced and released really stay in that initial time frame, right, because if they introduced it in April, you know, they probably would have to push back the release by a couple of months as well because there were still quite a few snags to to work through its pivoting from hardware to services. You had another story twenty four hours ago about Apple strategy when it comes to buy now, pay later, and it's changing how it makes decisions on basically lending to the consumer. What have you found out? So this is actually quite interesting. So Apple will be doing lending for the first time. They'll be actually giving out these loans up to about a thousand dollars for by now pay later. Uh. This would be very similar to what a firm and clarn on some of the other providers do. And so what Apple will be doing is they'll be using all that data and that history they have on individual customers to make those decisions to decide how much they want alone. Baby. You know they look at your Apple Pay right, how many cards you have on Apple Pay, where you move you're denied for an Apple card? How many apps do you buy on the App Store? How much have you spent and then paid are devices in the past Bloomberg Smart German, just ongoing terrific reporting on Apple. Thank you so much. If you think that that artificial intelligence is going to is going to influence the enterprise in a big way, then I think this represents a just a staggering addressible market opportunity. Welcome back to Bloomberg Technology. I'm card Hard in New York and I made Lovelow in San Francisco. You heard their carry the thoughts of C three AI CEO Tom Sebo on the show twenty four hours ago. Let's carry on this conversation because it just won't stop euphoria, the buzz around AI. It won't go away. It won't go away. And I think what's notable is we're all thinking about the consumer use right now, what is the enterprise use? And I know that there's some big bets and the fact that they're gonna be some killer apps out there, but not just for you and E by the way in which we work and which we put this to a real productive endpoint. Yeah, and those are some of the names. They're continuing to raise funds as well. So let's get all of this under wraps with Sonya Huang, a partner as the Oil Capital's Growth Teams's co led investment in AI focused companies such as Gong where Sonya is on the board, as well as Glean and Hugging Face. You can see some of the portfolio names there. Sonya, welcome. You set out a thesis in September, and in that thesis you said, here's where generative AI takes us. A lot has changed since September. Has any of what's happened accelerated, what's possible and how soon it could happen? To your mind? Thank you so much for having me here. We think this is a watershed moment for a technology if we think about previous platform shifts going from desktop to mobile, going from on premise assass we think that this one is even larger in magnitude as a PLATFORMSFT. I want to just take a moment to underscore the significance of what is happening right now in technology. We now have models that are capable of writing, of creating, of conversing at human or even superhuman levels of intelligence. That's something that computer scientists have been dreaming of since the nineteen fifties and it's finally arrived, and I think the impacts are going to be profound. Every industry is getting reinvented by AI. Nieva and Glean are doing that, the search Gong is doing that with sales, iron Cloud is doing it with legal. There's this Cambrian explosion of applications right now because whenever there is a platform shift, it opens the door for founders to build new and daring, legendary companies. And that's exactly the gold rush that we're seeing right now in the startup ecosystem. You've called it a gold rush. Bloomberg and some of his headlines is called it a frenzy. There are publicly traded stock C three AI Big Bai that are of triple digits year today. Is this overhyped or is the hype justified? Look, I think there's hype and there's substance, and we try to separate the two. Hype comes and goes. It kind of creates this crazy animal spirits. You can't control it, and so for the better of our part, we try to ignore what happens with hype and focus on the substance. And when it comes to substance, it is just stunning to see some of the results in generative AI already. If you think about previous times when everyone got excited about AI, a lot of it was a head fake. This time is different. This time is it's not vapor where everyone has chat chypt in the palm of their hands. Everyone is using this technology. If you look at some of the results that are being delivered, get hub has some results that they've published that fort lines of codes are now being auto completed by their model co pilot. If you look at AI that can now generate entire screenplays and movies from scratch, the results are there. So we try to ignore the hype and focus on the substance. And when we see the substance of the results are being created right now. Boy, do we get excited. And when you wrote in September that thought leadership pace Sonya, what was interesting is you hold it a large model War's law dream for us. Therefore, already we got chat chypt on a han. Where in the next decade does it take us? What will we be able to do? Yeah, as as we think about it, the pace of progress and R and D on the large models has just been breathtaking, and I think it's only going to accelerate. If you see all the announcements that Google and Microsoft have been made. There is an arms race happening right now as it comes to training and investing in these large models, both the algorithms and the compute and the data. And I think that benefits the entire ecosystem because all these applications rely on great foundational models. And as the foundational models get larger and larger, their emerging capabilities just are blowing everybody away. And I think that means it positive for the entire ecosystem. These applications are now capable of doing things that weren't possible before. Let me give you example, iron Clad in our Portfolio is a company that does legal contracting software. Now that GPT three three point five, now we're going onto GPT four is getting so good it is finally becoming possible for us to automate away the creation in the analysis of legal contracts. These are the sorts of capabilities that get unlocked at the application layer when the foundational layer starts to get really good. Talked to the previous answer you gave was about separating hype from reality, and the way in which you talk it does, unfortunately take me back a year or so when the hype was all around crypto and I know you have nothing to do with f t X yourself personally, but Sequoia has has itself abroad in that in some way. And I'm interested as to how you think about the due diligence you do an AI and really understanding the value of these companies, because it must be really hard to understand when you think it's such explosive growth. How do you line up the valuations, how do you decide what checks you're going to write and where this company's future can go. Well, I was an investor or a specialist in crypto, so I can't speak to that. What I can tell you is when it comes to AI, we are leaning into the approach that we always take, which is to find each of us finds one or two companies that we really really want to partner with um every year. It's a very small number of companies. We're trying to find future category leaders, and then we are running down due diligence in order to understand whether the evidence lines up with the story. Right now, the story of these companies is incredibly promising when you think about the things that they're able to do with They're able to automate away the entire film creation process, the entire game development process. The burden is then on us as investors to go and make sure that the evidence lines up to the story, and that means talking to customers. That means looking at dollar retention rates to make sure that customers as are as finding value out of these products and that we're not just dreaming and hoping that they will see and see that value. What's been so interesting about open AI in particular is its closed profit model, and a lot of emphasis has been on the investment from Microsoft into that business, but a question that has kept coming out of that is how do these companies monetize, Will they ever monetize to a level where they they change the game? Can? Normically speaking? Yeah, Well, first of all, Opening Eye deserves a ton of credit for taking what happened with transformers and large language models and taking it out of the research labs of these big tech companies and turning it into a real arms race. And they have the results to show GPT three, GPT three point five chat GPT Dolly, these results are stunning. To your question on business model, I actually think the business models fairly straightforward. It is intelligence as an API, just as we were in an API economy, just as you buy Stripe over API, you buy Twilio over a PI. A lot of the companies were working with need to rely on these foundational models in orders to run their goods and services, and a lot of them are looking to pay open Aye for that. So the same way you pay for an AP I call the Stripe, you pay for an API called the open Eye. What's interesting around open Ai, of course, has been the rapid pace at which we've suddenly seen everyone wanted to use a hundred million within a week or so. It's also now we as they team up with Microsoft. They are trying to very slowly but surely get it into consumers hands, people learning it, t wating and proving with it. But unsurprisingly humanity falls his chat bolts to the brink sometimes, and there has been some reporting around some of the inaccuracies or sometimes some of the extraordinary comments around sentient or not. To that point, how do you feel about some of the regulation or indeed focus on ethics that we're getting to in the point in artificial intelligence. I think all of these questions are very real, They're very thoroughny, they're very hairy. Some of them are getting solved as we speak. So, for example, the concept that you were just talking about hallucinations, which is that these models have the tendency to make up things on the fly, that's getting solved by these foundational model companies. I wouldn't be surprised if in the next six to twelve months we have models that are actually capable of truthfulness. There's other questions over ethics, over copyright. These are sort of harrier problems that require all the stakeholders together on the table and agree on what's fair. Is it's fair for stability and to profit off the back of other artists work and stability for their part has been a really good ecosystem player, and you collaborating and bringing artists to the table. I think these are all problems that are solvable in the nearest medium term. I actually think long term about the economic impact what happens when all these jobs start to get automated way. I think it has the potential to create a lot of disruption in terms of our labor force, in terms of the fabric of our society and the economy. And in that sense, I think it's incredibly important that we're all investing in reskilling to make sure that we are all able to make use of these new technologies and nobody is left behind. This is a rising tide here. We want the rising tide to lift all boats. So it's interesting to see also names from China by Do ten Cent kind of follow suit very quickly. How interesting is the opportunity there? There's an initiative in Conquress to kind of block access to investing into Chinese companies right now. Is that an area that you'll look to the talent and innovation that's coming out of China in Ai? Yeah, absolutely, I focus on investments in the US and Europe. We are Sequoia are set up as three separate teams US, Europe, China and India Southeast Asia. So I primarily focus on investments in the US and Europe, where we're seeing a lot of investment and efforts from the legs of Microsoft, Google, n ai UM. I think that this will likely play out similar to the cloud computing revolution, where you ended up with Microsoft Asser, you ended up with Google Cloud platform platform, you ended up with a WS in the US, and then the western world in China has its equivalent clouds. I think a similar thing will play out in the foundational model world. Absolutely fascinating, a calm believe they're called hallucinations. That's absolutely brilliant. Sekoia Capital partner Sonja Kaim, thank you so much for spending some time with us. Wonderful to deep dive on AI there. Meanwhile, coming up, let's deep dive on ACoM I the shares falling after the infrastructure software company reported results that well show pressure from the cloud computing costs. The investment there, we're going to discuss it all with the CEO and co founder is Tom Laton, Johnnys next and Ed you've got some breaking news. Yeah, President Biden has done a surprise tweet. Actually in lading our EV charging network. We have to ensure there's many charges work for as many drivers as possible. He name checks to that end at Elon Musk will open a big part of that Tesla's network up to our drivers. Remember President Biden naming Tesla and naming Elon Musk. That does not happen often. It's a story. Will continue to track. This is Bloomberg most check in on the shares of ACAM Technologies like they fell the most. It's May of last year after reporting results. That's as Alice started to note perhaps that the coward computing costs are pressuring some free cash flow margins. Let's talk about why that investment is being made and what the future of the company is. Tom Layton is a doctor. Is Acham i CEO as well. They're just great to have some time with you. Tom, Just talk to us about it. Seems as though Alice were a bit worried about the conservative nature of your forward looking guidance in the first quarter full cost Talk to us about the shift to compute. Why will it pay off eventually? Because perhaps you're pulling back home as and when it will pay off. Yeah, the compute market is enormous, you know, well north of a hundred billion dollars a year, and Acomy is in a great position to tap into that market with our launch of Acoma Connected Cloud. You know, we already have a platform with over four thousand locations doing edge computing where function as a service, and now we're integrating in Lenode and growing it so that we'll have a core cloud compute functionality and a distributed compute functionality so containers and vms can get a lot closer to end users around the world. And by putting it all together, we're going to be able to offer major enterprises better performance for a lot of compute function at a lower price point. And cost is a big issue today with the cloud, and that's the place I think am I can really help. So when all bcs on this says you're going all in on compute, we would wait for evidence it can pay off before getting back involved in your stock. When can they get back involved? When will it pay off? Fienji thing, Tom, Well, I think now is a great time to get involved. You know, obviously weren't happy with a sell off today but I think Akama has it a great value now uh and as we do the build out this year and add the functionality, will be signing up more customers. You know, I've had the chance to meet with senior executives at many of the world's leading media companies, commerce companies, and they are very excited about being able to use ACAM Connected Cloud. Uh. You know, they care a lot about performance, they care about getting their apps close to end users, and they care about cost. Uh. And so I think you'll see increasing numbers of large enterprises start to adopt Akama Connected Cloud, and then that will translate into substantial revenue growth for ack AM. I down the road saw me mentioned costs. I think one specific uh complaint from the street I point out is they worried about you taking on the likes of AWS and Asual on price. They you know, all BC for example, says, that's a pretty tough value proposition. Is that your strategy to take on the big boys when it comes to price. Well, yeah, you know, we've been competing with the cloud giants for over ten years, uh, and we still have the market leading delivery solutions and the market leading security solutions. Despite competing with the hyper scalers. In fact, you know, the hyper scale ers are some of our largest customers. They use those services from ocom I, even though we're competing with them, And now we're going to compete on core cloud compute too, and you know, I think it'll be a compelling, compelling value proposition for major enterprises. Also, it's it's good to realize we're not a threat to the hyper scale ers. You know, we're going after a one or two percent market share over the next few years, which for us is huge. That's billions of dollars, which makes a big difference to doc am I. But you know, they've got businesses that are growing fifteen percent a year and if Alcamy, you know, manager to take one or two percent, that's not gonna slow them down. So I don't think they're worried about, oh, they've got a lower price to compete with Acama. You taught us on the cool about new segmentation customers. I just wondered if you could took us through some of the areas where you feel you're winning. What kind of customers are they? What sectors are all spending money with you right now? Yeah, for segmentation that's the companies that have you know, mission critical functions, key infrastructure, banks, utilities, UH, companies that can't afford to get be hit with ransomware. And increasingly you're seeing the government authorities require a solution there. And Guardicle now is recognized as the market leader. So I think you know, over time, pretty much every major enterprise is going to need that solution. But today it's starting with you know, mission critical infrastructure. Tom Laighton A, come, I see, thank you for your time on a busy earnings stay and let's stick with earnings. Bloomberg caught up earlier with Airbnb CEO Brian Chesky post earnings, talking about robust travel demand. Here's what he had to say about where exactly the company is seeing any signs of that strength. We are expecting pretty steady growth. Now. We are expecting a little bit more accelerated growth in the short term stays, but that's that's more of a recovery. We're seeing more recovery short term stays. We're seeing more people go to cities, and we're seeing more people cross borders between urban and cross border. That was around eight percent of our night's book before the pandemic. So it's really more a matter of a recovery of the old ways of traveling and a real sustainability of the new ways, like including people staying longer and traveling to more to places. C O. Brian Chesky that let's talk about UFOs and how they can help the US fend off Russia and China. In the past few years, the US has been a lot more willing to talk about UFOs, and for a very good reason. It's not that authorities wants to talk about aliens, but there is no again, no indication of aliens or extraterrestrial activity. They mean unidentified flying objects in the truest sense, something airborne that they can't identify. They prefer to call them unidentified aerial phenomena. The u S breaks these so called u a p s into five categories, according to a declassified report from one airborne clutter such as birds, plastic bags, and civilian drones, natural atmospheric phenomena such as ice crystals or thermal fluctuations, the US government or industrial development programs which speak for themselves, foreign adversary systems, including technologies allegedly deployed by Russia or China, and the fairly nebulous. On the other that's the one that tends to excite people because it includes flying sources and little green men. But it's the penultimate category foreign adversaryist that the government really has, which is why it's been trying to encourage the military to report UFO sightings. Navy or Air Force personnel might have felt embarrassed about reporting a potential UFO sighting for fear of ridicule, but some of those might actually have been spy balloons or drones from a geopolitical competitor such as China. If the UFO isn't reported, then the government may never know that a spy balloon has entered its airspace. The issue soared into the headlines when the U S shot down what it said was a Chinese spy balloon in February and said it was part of a broader trend. If pilot's report what they think are alien sightings more often, that it might help the US better identify actual threats from terrestrial rivals. Wimberg quick takes Alex web there and let's dig into this more. Ryan Hartman is president and CEO of Worldview. It's a company that focuses on remote sensing and stratospheric surveillance, and which has we to go public through a merger with a black check firm, Ryan, stratosphere, it is a new economy. Explain that for us? Well, I think what we've seen over the last few weeks is that the stratosphere is in fact a contested domain and what that means is there's going to be nations all around the world that are using this kind of technology to deliver remote sensing or surveillance types of capabilities. And that's why we call it the stratospheric economy. Ryan, can you give us any size and scope on how your business has been buffered by what's happening in the headlines of recent weeks. Are you winning new business because of this, Well, we're certainly getting a lot more interest, and I think, you know, the timing of us taking the company public helps UH investors understand that, you know, this is an area where it's a great place to invest. There's there's certainly a lot more work to be done in the in the stratosphere, and it's not just government work, it's commercial work. You can do things like methane detection or monitoring our lines are other critical infrastructure, and so you know, it's it's it's it's really exciting. Um. You know, it's concerning as well to see those kind of technologies flying over our own country, but but it's quite exciting. Put your technology versus what we've seen out of China. How much more ahead of the game are they or not? Well, you know, one of the key difference differences of our technology is the ability to navigate. You know, we're not going to fly over a country where we shouldn't be flying. Our technology enables us to maneuver quite freely and enables us to stay over an area for a very long period of time. And so those are the things that are important. Ryan Hartman, president and CEO of world View, will continue to track your company. I am sure now that does it for this edition of Bloomberg Technology. Car Yesh sadly, I'm gonna be off in the next couple of days. Time at schools shut down for a couple of days. But I know that you're gonna do an amazing job. We're gonna be tuning in it, and you don't want to forget to choose to listen to our podcast to you can finding on the terminal Hill online on Apple and Spotify, on iHeart and our Twitter spaces. I'm already gonna start promoting that for Friday midday New York Time from New York. From San Francisco, discipline Berg