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Bloomberg Audio Studios, podcasts, radio news.

From Mahard.

From Mahard.

We're Innovation, Money and Power Collie in Silicon Valley, NBN.

We're Innovation, Money and Power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

I'm Caroline Heid at Bloomberg's World headquarters in New York.

I'm Caroline Heid at Bloomberg's World headquarters in New York.

And I Amed Ludlow in San Francisco. This is Bloomberg.

And I Amed Ludlow in San Francisco. This is Bloomberg.

Technology coming up.

Technology coming up.

Intel, it slides amid some tepid forecasts. We're going to discuss all of that with the CEO, Pat Girl Singer.

Intel, it slides amid some tepid forecasts. We're going to discuss all of that with the CEO, Pat Girl Singer.

Plus Microsoft and Google posts strong results on AI demand for cloud full coverage ahead.

Plus Microsoft and Google posts strong results on AI demand for cloud full coverage ahead.

And Jeff Bezos and Andy Jesse deleting chats in an anti trust probe. Now that's according to the FTC. We bring you their response and the details right now.

And Jeff Bezos and Andy Jesse deleting chats in an anti trust probe. Now that's according to the FTC. We bring you their response and the details right now.

Caro, we start with semiconductors.

Caro, we start with semiconductors.

We do.

We do.

Let's dig in on ill things Intel. Blumberg's in king was on, of course, across the earnings last night, discussing with the business and look, this seems to be a worry about forecasts.

Let's dig in on ill things Intel. Blumberg's in king was on, of course, across the earnings last night, discussing with the business and look, this seems to be a worry about forecasts.

Q one actually pretty resilient. The forecast Teppid.

Q one actually pretty resilient. The forecast Teppid.

Yeah, no, you're absolutely right. All of the divisions performed roughly where Wall Street was expecting.

Yeah, no, you're absolutely right. All of the divisions performed roughly where Wall Street was expecting.

If not a little bit better.

If not a little bit better.

The issue that investors had was with the forecast that Partner's team put out there, and I was considerably lighter than the consensus, and that was explained by Partner's management team as that being related to a structural issue that some of the excess demand that out there can't be met because of an issue with a shortages of a certain type of manufacturing.

The issue that investors had was with the forecast that Partner's team put out there, and I was considerably lighter than the consensus, and that was explained by Partner's management team as that being related to a structural issue that some of the excess demand that out there can't be met because of an issue with a shortages of a certain type of manufacturing.

It's important about the server market. What did we learn about Intel's place in the server market?

It's important about the server market. What did we learn about Intel's place in the server market?

Yeah? I mean, as I forwarded along to you and analyst to put it this way, look at the server market. The fund you know, the basic server market that Intel has owned for many years just isn't growing at a rate that it has in the past because spending is going elsewhere. It's going into AI accelerators and that isn't a big market for Intel yet.

Yeah? I mean, as I forwarded along to you and analyst to put it this way, look at the server market. The fund you know, the basic server market that Intel has owned for many years just isn't growing at a rate that it has in the past because spending is going elsewhere. It's going into AI accelerators and that isn't a big market for Intel yet.

And finally, we should talk about foundry. Intel is unique in that sense that it is pursuing two business models.

And finally, we should talk about foundry. Intel is unique in that sense that it is pursuing two business models.

What did you learn there?

What did you learn there?

Yeah, I mean that's the big story, isn't it. That you know, Pap is pursuing some long term fundamental changes to the chip industry and if it plays out how he projects, we're going to see a whole different Intel and a whole different industry.

Yeah, I mean that's the big story, isn't it. That you know, Pap is pursuing some long term fundamental changes to the chip industry and if it plays out how he projects, we're going to see a whole different Intel and a whole different industry.

But in the meantime, he's.

But in the meantime, he's.

Got a report quarterly earnings based upon what's happening right now.

Got a report quarterly earnings based upon what's happening right now.

Bloomberg's in king who leads our semiconduct to coverage here at Bloomberg. Thank you very much, And Caro, you know it's the earnings context, right. They are numbers relative to street expectations, But like every earnings, it's about.

Bloomberg's in king who leads our semiconduct to coverage here at Bloomberg. Thank you very much, And Caro, you know it's the earnings context, right. They are numbers relative to street expectations, But like every earnings, it's about.

An outlook and the long term.

An outlook and the long term.

The story with Intel that I think the market's seizing on right now.

The story with Intel that I think the market's seizing on right now.

The long term we want to dig into with a CEO.

The long term we want to dig into with a CEO.

In the short term, though, we have to ignore the market reaction and one point the worst sell off that we've seen since twenty twenty July of twenty twenty. We're now coming off of those lows ed but we're now at the worst since January twenty twenty four. But just to add to the fact that this is a company that's lost a third of its market capitalization in this year.

In the short term, though, we have to ignore the market reaction and one point the worst sell off that we've seen since twenty twenty July of twenty twenty. We're now coming off of those lows ed but we're now at the worst since January twenty twenty four. But just to add to the fact that this is a company that's lost a third of its market capitalization in this year.

Alone, we know that AI is a complicated story. Yes, AI accelerators, but the server market needs CPUs. It also needs memory, which we discussed with Micron just the other day. A lot of this is happening in parallel, and as we learned with Microsoft and Google, some of the cloud growth is not necessarily AI related. Data center infrastructure is needed for non AI reasons as well. So let's try and unpick what's happening in a name that, as you say, is down. We welcome now our Bloomberg TV and radio audiences worldwide, and joining us is the Intel CEO Pat Gelsinger. A Pat, good morning to you and thank you for your time. You know, the stock is down more than ten percent, and we're kind of here again right where there's the short term and the long term where you're trying to convince investors of a return to technology leadership and also grow a foundry business. Have you an updated timeline and when you think you will achieve that target?

Alone, we know that AI is a complicated story. Yes, AI accelerators, but the server market needs CPUs. It also needs memory, which we discussed with Micron just the other day. A lot of this is happening in parallel, and as we learned with Microsoft and Google, some of the cloud growth is not necessarily AI related. Data center infrastructure is needed for non AI reasons as well. So let's try and unpick what's happening in a name that, as you say, is down. We welcome now our Bloomberg TV and radio audiences worldwide, and joining us is the Intel CEO Pat Gelsinger. A Pat, good morning to you and thank you for your time. You know, the stock is down more than ten percent, and we're kind of here again right where there's the short term and the long term where you're trying to convince investors of a return to technology leadership and also grow a foundry business. Have you an updated timeline and when you think you will achieve that target?

Yeah?

Yeah?

Thanks Ed, And obviously, hey, we delivered a solid Q one, right, We met on revenue, We beat on earnings a bit tep it in the first half, as we said, but we see a lot of improvement as we go through the year. And with that, obviously the foundry business, as I would say, we're going to see progress in the foundry business every quarter from now to the end of the decade. It just gets better and better as we move into our new technologies, you know, as we've said, getting back to process leadership, which have better asps and we can build better products with them. We win more external foundry customers as our scale growth, and we also get past this period where we had to invest to catch up right and create the capacity for a decade plus of under investment. So everything there becomes a tailwind going forward. And we hit key milestones and one of those I was very proud of just this week we went to production with our first server part on Intel three. The US is back to leadership process technology being manufactured on our shores for the first.

Thanks Ed, And obviously, hey, we delivered a solid Q one, right, We met on revenue, We beat on earnings a bit tep it in the first half, as we said, but we see a lot of improvement as we go through the year. And with that, obviously the foundry business, as I would say, we're going to see progress in the foundry business every quarter from now to the end of the decade. It just gets better and better as we move into our new technologies, you know, as we've said, getting back to process leadership, which have better asps and we can build better products with them. We win more external foundry customers as our scale growth, and we also get past this period where we had to invest to catch up right and create the capacity for a decade plus of under investment. So everything there becomes a tailwind going forward. And we hit key milestones and one of those I was very proud of just this week we went to production with our first server part on Intel three. The US is back to leadership process technology being manufactured on our shores for the first.

Time in a decade.

Time in a decade.

So some key milestones, and I'll just say everything is coming together as we would say, and we're very optimistic that yes, in fact, we will deliver the foundry business and the manufacturing capabilities as we've laid out for the company, the industry, and the world Stiphil.

So some key milestones, and I'll just say everything is coming together as we would say, and we're very optimistic that yes, in fact, we will deliver the foundry business and the manufacturing capabilities as we've laid out for the company, the industry, and the world Stiphil.

Interestingly, anais over there.

Interestingly, anais over there.

Twenty twenty four should mark the bottom in many aspects.

Twenty twenty four should mark the bottom in many aspects.

Pat but they.

Pat but they.

Really want to understand the pace of the climb that is necessary. How can you tell us about how quickly you'll be able to scale that market share that.

Really want to understand the pace of the climb that is necessary. How can you tell us about how quickly you'll be able to scale that market share that.

You're so far lost.

You're so far lost.

Yeah, And you know, we look at Intel now in these two different perspectives Intel products, and we expose through our recast financials that we have a very solid, fabulous business with healthy financials and we expect those to improve over time. But the big story has been about exposing the foundry financials and the losses associated with those. And what we see is over the decade, you know that we'll cross through profitability in the middle of the period for that business as we get back to process leadership and start to moderate the level of investment required to go rebuild that decade of under investment. And as we do that, if we would have that today, we'd be more than double the earnings this year that we're forecasting. So it becomes a huge positive lever for us. And as I like to say, all of that's in our control, the wafers, getting back to leadership, the product implications of it, all of these things are our control, and it gets better as we win additional external foundry customers.

Yeah, And you know, we look at Intel now in these two different perspectives Intel products, and we expose through our recast financials that we have a very solid, fabulous business with healthy financials and we expect those to improve over time. But the big story has been about exposing the foundry financials and the losses associated with those. And what we see is over the decade, you know that we'll cross through profitability in the middle of the period for that business as we get back to process leadership and start to moderate the level of investment required to go rebuild that decade of under investment. And as we do that, if we would have that today, we'd be more than double the earnings this year that we're forecasting. So it becomes a huge positive lever for us. And as I like to say, all of that's in our control, the wafers, getting back to leadership, the product implications of it, all of these things are our control, and it gets better as we win additional external foundry customers.

The link I think pat is that is about growing market share a server to support the costs necessary for the foundry business. You're asked an interesting question on the call in the context of servers built on x eighty six versus on based alternatives, And you gave a pretty thorough explanation about the place of all of those particular data center CPUs. But what I didn't hear was what's happening out there in the real world. Where are data centers being built and what are they being built on right now?

The link I think pat is that is about growing market share a server to support the costs necessary for the foundry business. You're asked an interesting question on the call in the context of servers built on x eighty six versus on based alternatives, And you gave a pretty thorough explanation about the place of all of those particular data center CPUs. But what I didn't hear was what's happening out there in the real world. Where are data centers being built and what are they being built on right now?

Yeah, and this is important because we've been at the period now for a number of quarters where data centers CPUs have been fairly tepid, and we do see that improving. We had good improvement in the first quarter of the year, and we expect that to continue through the year, and you know, there's time for refrash in those data centers.

Yeah, and this is important because we've been at the period now for a number of quarters where data centers CPUs have been fairly tepid, and we do see that improving. We had good improvement in the first quarter of the year, and we expect that to continue through the year, and you know, there's time for refrash in those data centers.

But we're also seeing that the.

But we're also seeing that the.

CPUs now has head nodes for AI use cases. We've posted some pretty incredible results that we can now run seventy billion parameter models natively.

CPUs now has head nodes for AI use cases. We've posted some pretty incredible results that we can now run seventy billion parameter models natively.

On the CPU.

On the CPU.

I don't need accelerator. I can do everything on the software stack that I already use inside of data centers. And we're seeing that these power efficient products that we're bringing to the marketplace, such as our Xeon six that we just announced, are going to enable us to stabilize and regain market share with much higher core counts. The asps are going up very nicely on that through the year, So we saw growth in Q one. We expect that to continue through the year, and as we get to the back half of the year, our Accelerator product line with Goudy Xeon plus Goudy, we become, we believe, becomes a very compelling solution for enterprise customers, and we have quite a number of announcements of those this quarter. Customers such as Bosh and Dell and super Micro all bringing those into the marketplace, Roach and IBM, and eCloud partners like Nahvor, the fastest growing cloud provider in Asia, all of those coming alongside the Intel strategy.

I don't need accelerator. I can do everything on the software stack that I already use inside of data centers. And we're seeing that these power efficient products that we're bringing to the marketplace, such as our Xeon six that we just announced, are going to enable us to stabilize and regain market share with much higher core counts. The asps are going up very nicely on that through the year, So we saw growth in Q one. We expect that to continue through the year, and as we get to the back half of the year, our Accelerator product line with Goudy Xeon plus Goudy, we become, we believe, becomes a very compelling solution for enterprise customers, and we have quite a number of announcements of those this quarter. Customers such as Bosh and Dell and super Micro all bringing those into the marketplace, Roach and IBM, and eCloud partners like Nahvor, the fastest growing cloud provider in Asia, all of those coming alongside the Intel strategy.

So we see that momentum.

So we see that momentum.

Building it momentum, and we want to just remind us that we are with TV radio audiences. The CEO of Intel, Pat Gelsinger, Pat on the momentum. Everyone wants to talk about AI in all.

Building it momentum, and we want to just remind us that we are with TV radio audiences. The CEO of Intel, Pat Gelsinger, Pat on the momentum. Everyone wants to talk about AI in all.

Of its ways and means.

Of its ways and means.

You've been focusing in on an AIPC and I'm just really interested in Ultimately you're going to be watch shipping in excess. Originally forty million AIPC CPUs that's target for twenty twenty four, But what's the demand like at the moment, pat and what's the cost like.

You've been focusing in on an AIPC and I'm just really interested in Ultimately you're going to be watch shipping in excess. Originally forty million AIPC CPUs that's target for twenty twenty four, But what's the demand like at the moment, pat and what's the cost like.

Yeah, And when we announced the category at the end of last year, Carolyn, it was sort of like everybody says, Wow, what's going on the AIPC And you're seeing a flurry of interest of other people coming into that market. But Intel unquestionably the leader. You're first to declare the market, first to describe the use cases. And our first product, Core Ultra, is having a very robust ramp into the marketplace, and to some degree, I'm racing the catch up to the demand. We're meeting all of our supply commitments, but not all of the upside requests yet that we're getting from customers.

Yeah, And when we announced the category at the end of last year, Carolyn, it was sort of like everybody says, Wow, what's going on the AIPC And you're seeing a flurry of interest of other people coming into that market. But Intel unquestionably the leader. You're first to declare the market, first to describe the use cases. And our first product, Core Ultra, is having a very robust ramp into the marketplace, and to some degree, I'm racing the catch up to the demand. We're meeting all of our supply commitments, but not all of the upside requests yet that we're getting from customers.

So this is very robust.

So this is very robust.

We expect that we'll exceed the forty million units this year. We'll be introducing our next generation product in the middle of this year, so all of these pieces, we are very optimistic. And you're seeing use cases and communications where all of a sudden, I get summarization, contextualization, translation in real time, all running on my PC. Developers, gamers, all of these use cases are now becoming AI Enabled and Intel leading the AIPC parade. It's a very exciting time for I believe will be the biggest cycle of PC refrash and expansion that we've seen in likely decades.

We expect that we'll exceed the forty million units this year. We'll be introducing our next generation product in the middle of this year, so all of these pieces, we are very optimistic. And you're seeing use cases and communications where all of a sudden, I get summarization, contextualization, translation in real time, all running on my PC. Developers, gamers, all of these use cases are now becoming AI Enabled and Intel leading the AIPC parade. It's a very exciting time for I believe will be the biggest cycle of PC refrash and expansion that we've seen in likely decades.

Pat this is a conversation about your technology and about ultimately your fundamentals of a business. I'm just going to take a turn for a moment, and it's a sensitive question, so I give you a moment to.

Pat this is a conversation about your technology and about ultimately your fundamentals of a business. I'm just going to take a turn for a moment, and it's a sensitive question, so I give you a moment to.

Think about it.

Think about it.

But giving your relationship with Israel and the fact that you are one of the largest employers over there, how are you currently feeling about Well, students in the United States protesting against endowments being invested in companies that are associated with Israel.

But giving your relationship with Israel and the fact that you are one of the largest employers over there, how are you currently feeling about Well, students in the United States protesting against endowments being invested in companies that are associated with Israel.

At this moment.

At this moment.

Well, we have been in Israel for forty years now and it's been an incredible country for us, incredible innovators, and extraordinary resilience by the Israeli people, and they continue, despite the challenges of the war that's going on there, to deliver against their objectives. So we're very committed to support our teams wherever they are in the world that said, hey, we seek peace, and we've been clearly emphasizing that we need to find routes of sustainable peace in the region. I've been supporting perspectives that reinforce that across the region, and as we look across the world, we say, boy, you know, there continues to be the turbulence. And fundamentally, our strategy is around building globally rec zillient supply chains that are balanced across the world. So our core strategy is so emphasizing that there will be these challenges across the world, you know, whether that's in Israel, Ukraine or Asia, and we are committed to making sure that we can support the global markets that we serve right with a strategy that really was built for a turbulent world.

Well, we have been in Israel for forty years now and it's been an incredible country for us, incredible innovators, and extraordinary resilience by the Israeli people, and they continue, despite the challenges of the war that's going on there, to deliver against their objectives. So we're very committed to support our teams wherever they are in the world that said, hey, we seek peace, and we've been clearly emphasizing that we need to find routes of sustainable peace in the region. I've been supporting perspectives that reinforce that across the region, and as we look across the world, we say, boy, you know, there continues to be the turbulence. And fundamentally, our strategy is around building globally rec zillient supply chains that are balanced across the world. So our core strategy is so emphasizing that there will be these challenges across the world, you know, whether that's in Israel, Ukraine or Asia, and we are committed to making sure that we can support the global markets that we serve right with a strategy that really was built for a turbulent world.

Pat let's end on AI accelerators. Goudi is on track for five hundred million this year, AMD's MI I three hundred X will probably do three and a half billion, and Nvidia with its generations will do forty billion. You've said that choice is important and also the CPU is important, and I accept that many share it, but do you see a clear path where the numbers I just outlined rebalance in your favor in the AI accelerator market going forward.

Pat let's end on AI accelerators. Goudi is on track for five hundred million this year, AMD's MI I three hundred X will probably do three and a half billion, and Nvidia with its generations will do forty billion. You've said that choice is important and also the CPU is important, and I accept that many share it, but do you see a clear path where the numbers I just outlined rebalance in your favor in the AI accelerator market going forward.

Given the strength that we saw at our vision event that we had, we had twenty plus customers coming out publicly in support of our accelerator and our Z plus accelerator strategy. We're really starting to see that pipeline of activity convert and ultimately much of the activity that you've seen so far on generative AI has been in cloud training and now and I think the ultimate monetization of AI happens as business deployments start to occur, and those are the areas that we see strength. We launch the open platform for Enterprise AI. How do we enable these use cases inside of the enterprise, but in an open architecture that many get to participate in. We announced the open AI Networking, you know, from closed proprietary networking to standard ethernet based scale up and scale out networking. We announced that this quarter, and obviously the momentum that we're seeing with Goudy, know, all of that half a billion, almost all of it's in the second half of the year, so you can see a very accelerated cycle, a lot of enthusiasm for Goudy, you know, the unquestioned leader in TCO total call the ownership for enterprises, building on the Xeon franchise and the position that we have in the enterprise and literally ISVs and cloud providers, but most importantly enterprise customers seeing that value proposition. Yeah, we feel like we're gaining a lot of momentum now in this category and feel good about the potential for our AI everywhere AIPC, AI Edge, AI Enterprise and AI cloud.

Given the strength that we saw at our vision event that we had, we had twenty plus customers coming out publicly in support of our accelerator and our Z plus accelerator strategy. We're really starting to see that pipeline of activity convert and ultimately much of the activity that you've seen so far on generative AI has been in cloud training and now and I think the ultimate monetization of AI happens as business deployments start to occur, and those are the areas that we see strength. We launch the open platform for Enterprise AI. How do we enable these use cases inside of the enterprise, but in an open architecture that many get to participate in. We announced the open AI Networking, you know, from closed proprietary networking to standard ethernet based scale up and scale out networking. We announced that this quarter, and obviously the momentum that we're seeing with Goudy, know, all of that half a billion, almost all of it's in the second half of the year, so you can see a very accelerated cycle, a lot of enthusiasm for Goudy, you know, the unquestioned leader in TCO total call the ownership for enterprises, building on the Xeon franchise and the position that we have in the enterprise and literally ISVs and cloud providers, but most importantly enterprise customers seeing that value proposition. Yeah, we feel like we're gaining a lot of momentum now in this category and feel good about the potential for our AI everywhere AIPC, AI Edge, AI Enterprise and AI cloud.

Ending on an optimistic mote, we thank you so much, Intel CEO Pat Gelsinger there on all things AI, all things Intel numbers. Got to get back to those earnings, got to get back to the new two trillion dollar entrant Google Microsoft two shares absolutely popping higher after the surge and.

Ending on an optimistic mote, we thank you so much, Intel CEO Pat Gelsinger there on all things AI, all things Intel numbers. Got to get back to those earnings, got to get back to the new two trillion dollar entrant Google Microsoft two shares absolutely popping higher after the surge and.

Cloud revenue those businesses.

Cloud revenue those businesses.

And fueled in part, I guess what booming use of artificial intelligence services is helping deliver strong earnings results and we want to get to it with Clearbridge Investments Senior research analyst Hillary Frish, who just comment on the one that's moving the most today and alphabet.

And fueled in part, I guess what booming use of artificial intelligence services is helping deliver strong earnings results and we want to get to it with Clearbridge Investments Senior research analyst Hillary Frish, who just comment on the one that's moving the most today and alphabet.

Parent at Google.

Parent at Google.

Interestingly, cloud always been seen as the laggard there, but infusing artificient intelligence is helping bring about market share, particularly with startups.

Interestingly, cloud always been seen as the laggard there, but infusing artificient intelligence is helping bring about market share, particularly with startups.

Indeed, it is thanks for having me cure line.

Indeed, it is thanks for having me cure line.

Yeah.

Yeah.

Google is well known for having a strong presence among startups tech companies and they have among the best AI assets around historically, and so they're going to benefit from this along with everybody else. And we've seen two quarters of improvement at Google Cloud now, and.

Google is well known for having a strong presence among startups tech companies and they have among the best AI assets around historically, and so they're going to benefit from this along with everybody else. And we've seen two quarters of improvement at Google Cloud now, and.

I think many were waiting for Okay, you've got these offerings, how are people using them, adopting them and actually boosting their own productivity? Microsoft shone a light on the fact that what is It's like sixty five percent of the Fortune one hundred are using their Azure Cloud at the moment. I mean, they must be just ripping away market share from everyone else. Even though cloud is still good for Google, Microsoft still firing on all the senators for you.

I think many were waiting for Okay, you've got these offerings, how are people using them, adopting them and actually boosting their own productivity? Microsoft shone a light on the fact that what is It's like sixty five percent of the Fortune one hundred are using their Azure Cloud at the moment. I mean, they must be just ripping away market share from everyone else. Even though cloud is still good for Google, Microsoft still firing on all the senators for you.

Indeed, it is, in fact, those cylinders are just really starting to get going. It's interesting because Microsoft is absolutely benefiting from a share perspective due to their leading position in AI across all their businesses. Certainly cross cloud and I view AI as ultimately, you know, an ultimate contributor, but it's definitely an accelerant to cloud migrations.

Indeed, it is, in fact, those cylinders are just really starting to get going. It's interesting because Microsoft is absolutely benefiting from a share perspective due to their leading position in AI across all their businesses. Certainly cross cloud and I view AI as ultimately, you know, an ultimate contributor, but it's definitely an accelerant to cloud migrations.

Hillary, good morning, It's ed in San Francisco.

Hillary, good morning, It's ed in San Francisco.

The share reactions of each are interesting, you know, alphabet more pronounced when I talked to Ruth poor Out on the phone last night, about cloud.

The share reactions of each are interesting, you know, alphabet more pronounced when I talked to Ruth poor Out on the phone last night, about cloud.

She basically said AI.

She basically said AI.

Solutions did make a meaningful contribution to that that twenty eight percent cloud growth year on year, but she didn't put a number on it. Now, Microsoft and amy Hood did put a number on it. They said thirty one percent asure growth, seven percent of which came from AI.

Solutions did make a meaningful contribution to that that twenty eight percent cloud growth year on year, but she didn't put a number on it. Now, Microsoft and amy Hood did put a number on it. They said thirty one percent asure growth, seven percent of which came from AI.

So really interesting share reaction.

So really interesting share reaction.

I put it to you that Alphabet probably isn't jumping as much on that cloud narrative as it is the sweetener of a dividend.

I put it to you that Alphabet probably isn't jumping as much on that cloud narrative as it is the sweetener of a dividend.

I think you're right about that, Ed.

I think you're right about that, Ed.

I think investors were pleased to see the results across the board.

I think investors were pleased to see the results across the board.

I think they breathe a.

I think they breathe a.

Sigh of relief that cloud accelerated, that all businesses accelerated quarter over quarter. But the big piece of new information here was was operating margin improvement and commitment to that through the year, as well as the dividend. And that can draw a whole new class of users. But importantly, it signals a shareholder friendlier stance than we've seen from Google historically.

Sigh of relief that cloud accelerated, that all businesses accelerated quarter over quarter. But the big piece of new information here was was operating margin improvement and commitment to that through the year, as well as the dividend. And that can draw a whole new class of users. But importantly, it signals a shareholder friendlier stance than we've seen from Google historically.

Hillary, do you believe now through the lens of Alphabet and Microsoft earnings, that corporate America is actually spending on and using generative AI.

Hillary, do you believe now through the lens of Alphabet and Microsoft earnings, that corporate America is actually spending on and using generative AI.

I believe they are.

I believe they are.

I believe most of corporate America is experimenting with AI and testing generative AI, and in Microsoft's are cloud and elsewhere, certainly in Amazon and Google as well, there are some early adopters who are starting to get to some level of scale. Microsoft seven points of AI contribution were good. I would say they were generally in line, though, but Mycrosoft did signal on their call that they were actually a capacity constrained, alluding to the idea that that number would have actually been higher were it not for those constraints. I still believe it's going to be starting in the second half where we see that Microsoft inferencing base of users doing inferencing on their Azure Cloud really broaden out and start to drive that number.

I believe most of corporate America is experimenting with AI and testing generative AI, and in Microsoft's are cloud and elsewhere, certainly in Amazon and Google as well, there are some early adopters who are starting to get to some level of scale. Microsoft seven points of AI contribution were good. I would say they were generally in line, though, but Mycrosoft did signal on their call that they were actually a capacity constrained, alluding to the idea that that number would have actually been higher were it not for those constraints. I still believe it's going to be starting in the second half where we see that Microsoft inferencing base of users doing inferencing on their Azure Cloud really broaden out and start to drive that number.

I want to dig into basically the broadening idea.

I want to dig into basically the broadening idea.

Here we're talking about two names.

Here we're talking about two names.

That have already done phenomenally well on the hype around AI. We're waiting for the spin over effects. Now you shine a light on certain companies that I keep an eye on because they're New York based Mongo dB.

That have already done phenomenally well on the hype around AI. We're waiting for the spin over effects. Now you shine a light on certain companies that I keep an eye on because they're New York based Mongo dB.

We also think about what data dog is up to.

We also think about what data dog is up to.

How are these companies going to benefit from the adoption of jener to AI.

How are these companies going to benefit from the adoption of jener to AI.

So these companies will benefit the whole consumption complex, Cloud Consumption Complex, Mango, dB Snowflake, Data Dog, the.

So these companies will benefit the whole consumption complex, Cloud Consumption Complex, Mango, dB Snowflake, Data Dog, the.

First and third being in New York.

First and third being in New York.

They'll benefit with a lag what they will. So I agree with your Caroline that we're not seeing it on a broad based basis yet there are select few who are actually going to benefit. But what they will benefit from is the absence of the extreme cost optimization we saw last year, companies going on a buyer strike in terms of new projects. They're going to see the flow through of what's effectively a cyclical upturn in cloud consumption. And we actually heard that from Microsoft last night that companies are commencing new projects, that they're starting to do things, they're taking out mothballed projects and bringing those back. So I think that's a positive for this whole group.

They'll benefit with a lag what they will. So I agree with your Caroline that we're not seeing it on a broad based basis yet there are select few who are actually going to benefit. But what they will benefit from is the absence of the extreme cost optimization we saw last year, companies going on a buyer strike in terms of new projects. They're going to see the flow through of what's effectively a cyclical upturn in cloud consumption. And we actually heard that from Microsoft last night that companies are commencing new projects, that they're starting to do things, they're taking out mothballed projects and bringing those back. So I think that's a positive for this whole group.

Hillary, we're down week one of megacap Tech and I'm bracing for week two. What do you think is the kind of blanket takeaway of this seven day period so far?

Hillary, we're down week one of megacap Tech and I'm bracing for week two. What do you think is the kind of blanket takeaway of this seven day period so far?

I'd say overall cautiously optimistic. Again, I stick to the names where expectations are low, valuations are reasonable, and companies have idiosyncratic drivers. Microsoft with AI and share gains the cloud consumption complex with the A and some negatives. Amazon should show some pretty good results based on the fact that they have a lot of tech companies and startups on their platform too who are experimenting with AI. But it's really company by company and enterprise budgets overall remain somewhat constrained in first half. I'd experience more of that opening up in second half.

I'd say overall cautiously optimistic. Again, I stick to the names where expectations are low, valuations are reasonable, and companies have idiosyncratic drivers. Microsoft with AI and share gains the cloud consumption complex with the A and some negatives. Amazon should show some pretty good results based on the fact that they have a lot of tech companies and startups on their platform too who are experimenting with AI. But it's really company by company and enterprise budgets overall remain somewhat constrained in first half. I'd experience more of that opening up in second half.

Lud Fresh all is.

Lud Fresh all is.

So good to get your expertise on the time that we have earnings and all the time actually clearbridge investments.

So good to get your expertise on the time that we have earnings and all the time actually clearbridge investments.

We thank you for being here and what have you got.

We thank you for being here and what have you got.

Let's get some news in talking tech and first up food delivery service Metwan is planning to launch its international platform in Reard, its first location outside of China, according to sources involved in discussions. The companies looked into expanding in the Middle East for months and could launch as early as a few months from now. The move comes as Chinese companies seek growth abroad to combat a domestic slowdown. Plus, US Secretary of State Anthony Blincoln and Chinese President Jijingping met in Beijing. She's China. She issued a warning to blink in against quote vicious competition between the two countries, saying quote, China and the United States should.

Let's get some news in talking tech and first up food delivery service Metwan is planning to launch its international platform in Reard, its first location outside of China, according to sources involved in discussions. The companies looked into expanding in the Middle East for months and could launch as early as a few months from now. The move comes as Chinese companies seek growth abroad to combat a domestic slowdown. Plus, US Secretary of State Anthony Blincoln and Chinese President Jijingping met in Beijing. She's China. She issued a warning to blink in against quote vicious competition between the two countries, saying quote, China and the United States should.

Be partners rather than rivals.

Be partners rather than rivals.

The two day meeting composed the dialogue on trade, geopolitical tensions, and even an announcement of AI talks that will begin in the coming weeks. And finally, Huawei's latest smartphones are said to be utilizing an updated version of its made in China chips. According to an independent analysis, the purest seventy phones sport a kirre In ninety ten processor, which is a new version of the nine thousand chips that alarmed Washington officials due to their seven nanimeter tech, long thought to be beyond China's capabilities. According to Jeffreys, the Pure seventy smartphones sold out within two days of being launched.

The two day meeting composed the dialogue on trade, geopolitical tensions, and even an announcement of AI talks that will begin in the coming weeks. And finally, Huawei's latest smartphones are said to be utilizing an updated version of its made in China chips. According to an independent analysis, the purest seventy phones sport a kirre In ninety ten processor, which is a new version of the nine thousand chips that alarmed Washington officials due to their seven nanimeter tech, long thought to be beyond China's capabilities. According to Jeffreys, the Pure seventy smartphones sold out within two days of being launched.

Carol, fascinating.

Carol, fascinating.

Coming up, Look, we're going to talk FTC allegations against the Amazon founder Jeff Bezos and it's currency Leo Andy Jesse. Apparently, according to the FDC, they've been destroying messages amid an antitrust probe. We'll get you the details and the response from Amazon next you more just of course happening with dark Trace today, UK listed company up sixteen percent. Why the UK cyber Companies actually agreed to sell itself to a private equity firm Tomo Bravo for an equity.

Coming up, Look, we're going to talk FTC allegations against the Amazon founder Jeff Bezos and it's currency Leo Andy Jesse. Apparently, according to the FDC, they've been destroying messages amid an antitrust probe. We'll get you the details and the response from Amazon next you more just of course happening with dark Trace today, UK listed company up sixteen percent. Why the UK cyber Companies actually agreed to sell itself to a private equity firm Tomo Bravo for an equity.

Value of five point three billion dollars.

Value of five point three billion dollars.

That's basically a twenty percent premium. So still a little bit of caution in the market that this deal will get done. Remember tom O Bravo actually walked away back in twenty twenty two for talks to buy dark Trace. But really interesting and this is a company, of course in somewhat an interesting relationship with the battle British entrepreneur Mike Lynch who is on trial for Ford. Here in the US, we shine a light on dark Trace today. This is Broome, their technology.

That's basically a twenty percent premium. So still a little bit of caution in the market that this deal will get done. Remember tom O Bravo actually walked away back in twenty twenty two for talks to buy dark Trace. But really interesting and this is a company, of course in somewhat an interesting relationship with the battle British entrepreneur Mike Lynch who is on trial for Ford. Here in the US, we shine a light on dark Trace today. This is Broome, their technology.

Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.

Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.

Aaron Hyed back in New York.

Aaron Hyed back in New York.

Let's get to one of the top stories on the Bloomberg terminal and dot com. Top Amazon executives, including founder Jeff Bezos and CEO Andy Jesse destroy Lloyd's text messages discussing business, according to allegations by the FTC, A raising evidence the agency could have used in an antitrust case against the retail giant. I want to bring in Bloomberg's Mike Shepherd, who leads our coverage of the kind of intersection of tech and politics. Now, Amazon is pushing back against this FTC allegation with some force. We will get to that, but we're talking about communications made by executives on the Signal app. Mike explain it to us, well, I.

Let's get to one of the top stories on the Bloomberg terminal and dot com. Top Amazon executives, including founder Jeff Bezos and CEO Andy Jesse destroy Lloyd's text messages discussing business, according to allegations by the FTC, A raising evidence the agency could have used in an antitrust case against the retail giant. I want to bring in Bloomberg's Mike Shepherd, who leads our coverage of the kind of intersection of tech and politics. Now, Amazon is pushing back against this FTC allegation with some force. We will get to that, but we're talking about communications made by executives on the Signal app. Mike explain it to us, well, I.

Think it's important to turn the clock back a couple of months to September, and this is when the FTC filed its initial anti trust case against Amazon, and they've gradually been increasing the pressure on the company in this particular matter, in this lawsuit.

Think it's important to turn the clock back a couple of months to September, and this is when the FTC filed its initial anti trust case against Amazon, and they've gradually been increasing the pressure on the company in this particular matter, in this lawsuit.

In November, they had.

In November, they had.

A less redactive version of the case released to the public, and that indicated that they had concerns executives have been concealing some information, but they didn't name names.

A less redactive version of the case released to the public, and that indicated that they had concerns executives have been concealing some information, but they didn't name names.

Today.

Today.

We learned last night we're discussing today the latest and that is that they are naming names, including CEO Andy Jase and the founder of Jeff Bezos. And that indicates the kind of pressure that the agency is putting on the company, and it echoes what this broader effort against big tech by anti trust and forces here in DC.

We learned last night we're discussing today the latest and that is that they are naming names, including CEO Andy Jase and the founder of Jeff Bezos. And that indicates the kind of pressure that the agency is putting on the company, and it echoes what this broader effort against big tech by anti trust and forces here in DC.

Mike, turn the clock back even further, and you go to twenty nineteen, when Jeff Bezos indeed made clear and evident that his phone had been hacked, he felt and that is the argument as to why executives moved to signal and these automatic discussions that can delete themselves.

Mike, turn the clock back even further, and you go to twenty nineteen, when Jeff Bezos indeed made clear and evident that his phone had been hacked, he felt and that is the argument as to why executives moved to signal and these automatic discussions that can delete themselves.

And I'm noting.

And I'm noting.

That Amazon has currently said, Look, the FDC has a complete picture of Amazon's decision making in this case, including one point seven million documents from sources like email, internal messaging applications, and laptops, among other sources, over.

That Amazon has currently said, Look, the FDC has a complete picture of Amazon's decision making in this case, including one point seven million documents from sources like email, internal messaging applications, and laptops, among other sources, over.

One hundred terabytes of data.

One hundred terabytes of data.

What more needed they do to prove that they weren't using signal for well, conversations they didn't want seen by the FTC.

What more needed they do to prove that they weren't using signal for well, conversations they didn't want seen by the FTC.

Well, you know, the FTC is actually alleging that maybe there was more that they needed to know about.

Well, you know, the FTC is actually alleging that maybe there was more that they needed to know about.

Maybe there was more in.

Maybe there was more in.

Those conversations that disappeared that they don't have access to and are not privy to in the case yet, and that they should therefore be able to see to have a clear and complete picture. But Amazon is saying that, look, you already have enough, You have more than enough. Then you need to be able to carry on your work here. And I'm glad you brought up, Caroline, the point about twenty nineteen, because of course that's when Jeff Bezos's texts were purportedly hacked, and his desire to maintain some degree of privacy is another driver here, and so the company is saying, look, we've done enough, and also we had cause to try to protect some of these communications against people on the outside.

Those conversations that disappeared that they don't have access to and are not privy to in the case yet, and that they should therefore be able to see to have a clear and complete picture. But Amazon is saying that, look, you already have enough, You have more than enough. Then you need to be able to carry on your work here. And I'm glad you brought up, Caroline, the point about twenty nineteen, because of course that's when Jeff Bezos's texts were purportedly hacked, and his desire to maintain some degree of privacy is another driver here, and so the company is saying, look, we've done enough, and also we had cause to try to protect some of these communications against people on the outside.

Mike Shepherd, you always sum it up so beautifully, Thank you very much. Indeed, of all things FTC and Amazon.

Mike Shepherd, you always sum it up so beautifully, Thank you very much. Indeed, of all things FTC and Amazon.

Today.

Today.

Meanwhile, a shift gears a little bit. Elon Musk's artificial intelligence startup.

Meanwhile, a shift gears a little bit. Elon Musk's artificial intelligence startup.

Xai parently is nearing a deal to raise six billion dollars in funding, and that would value the company at eighteen billion. It's all according to a person familiar when the matter. Bluembg's Max Chafkin all in on Elon Inc. Joins us now, and I'm interested by the fact that this year at mount they're raising versus the capitalization of the business. But we did know they were going for funding to beef up XAI.

Xai parently is nearing a deal to raise six billion dollars in funding, and that would value the company at eighteen billion. It's all according to a person familiar when the matter. Bluembg's Max Chafkin all in on Elon Inc. Joins us now, and I'm interested by the fact that this year at mount they're raising versus the capitalization of the business. But we did know they were going for funding to beef up XAI.

Well, here's the thing.

Well, here's the thing.

Elon Musk was able to kind of spin this open ai competitor. This is this company basically it makes large language models very similar to open ai.

Elon Musk was able to kind of spin this open ai competitor. This is this company basically it makes large language models very similar to open ai.

He did this kind of quickly and with a very small staff.

He did this kind of quickly and with a very small staff.

But the thing is to keep these models training, you need an insane number of very very expensive GPUs.

But the thing is to keep these models training, you need an insane number of very very expensive GPUs.

These are the graphics chips that artificial intelligence companies use.

These are the graphics chips that artificial intelligence companies use.

Elon Musk on a x spaces interview last month's said that they were using twenty thousand already of these Nvidia each one hundreds. They would need one hundred thousand of these chips. So this is you know, that's an expense that's in the hundreds of millions of dollars, if not the billions of dollars.

Elon Musk on a x spaces interview last month's said that they were using twenty thousand already of these Nvidia each one hundreds. They would need one hundred thousand of these chips. So this is you know, that's an expense that's in the hundreds of millions of dollars, if not the billions of dollars.

So that's why he's raising this money and why they need it.

So that's why he's raising this money and why they need it.

There is a little backstory of all of this that the Zett, Chapman and I have. Bloomberg News reported on January nineteenth that Xai was in talks to raise funds at evaluation between fifteen and twenty billion dollars. Eighteen billion is pretty much between fifteen and twenty billion, and Elon.

There is a little backstory of all of this that the Zett, Chapman and I have. Bloomberg News reported on January nineteenth that Xai was in talks to raise funds at evaluation between fifteen and twenty billion dollars. Eighteen billion is pretty much between fifteen and twenty billion, and Elon.

Must denied it.

Must denied it.

He said false, fake, and then the ft followed up with the same report and he said fake. And then the information came out yesterday with the report which Bloomberg then reported too, And he hasn't said anything yet. The main thing is irrespective of what Elon Musk says. He's got an edibility to raise money for pretty much any project he's doing max well.

He said false, fake, and then the ft followed up with the same report and he said fake. And then the information came out yesterday with the report which Bloomberg then reported too, And he hasn't said anything yet. The main thing is irrespective of what Elon Musk says. He's got an edibility to raise money for pretty much any project he's doing max well.

And it's not that he only has an ability, but he has to raise money here because you know, Elon Musk, as many people know, is you know, very wealthy, right, but he is not very liquid. Most of his wealth is tied up in Tesla stock, SpaceX stock. He does not have billions of dollars. He spent a lot of money to buy Twitter turn it into x. He does not have billions of dollars rattling around his pocket without selling some assets, which would you know, create some disruption within his empire. So he needs this outside money if he has any prayer of sort of catching up to open Ai. And from the point of view of investors, you can see why they're happy to give it to him, because Open Ai anthropic.

And it's not that he only has an ability, but he has to raise money here because you know, Elon Musk, as many people know, is you know, very wealthy, right, but he is not very liquid. Most of his wealth is tied up in Tesla stock, SpaceX stock. He does not have billions of dollars. He spent a lot of money to buy Twitter turn it into x. He does not have billions of dollars rattling around his pocket without selling some assets, which would you know, create some disruption within his empire. So he needs this outside money if he has any prayer of sort of catching up to open Ai. And from the point of view of investors, you can see why they're happy to give it to him, because Open Ai anthropic.

These companies, you know, there are some.

These companies, you know, there are some.

Real questions about the business models, but they have been able to achieve huge valuations, a lot of adoption. You know, taking a flyer on Elon Musk and the hottest category in business makes a lot of sense if you're these venture capitalists who are considering this.

Real questions about the business models, but they have been able to achieve huge valuations, a lot of adoption. You know, taking a flyer on Elon Musk and the hottest category in business makes a lot of sense if you're these venture capitalists who are considering this.

Deal, and to his credit, a lot of these projects then do tend out to be influential, and it's a lean team at XAI, and it looks like they're making progress doing best match Taffick and Happy Friday to you. A quick news story that we're looking at shares of IBM a little lower down a percentage point, but they're backing a project in Canada seven hundred and thirty million US dollars one billion Canadian dollars. This is for semiconductors, but in the context of what IBM is involved in, which is packaging and also testing labs, it's.

Deal, and to his credit, a lot of these projects then do tend out to be influential, and it's a lean team at XAI, and it looks like they're making progress doing best match Taffick and Happy Friday to you. A quick news story that we're looking at shares of IBM a little lower down a percentage point, but they're backing a project in Canada seven hundred and thirty million US dollars one billion Canadian dollars. This is for semiconductors, but in the context of what IBM is involved in, which is packaging and also testing labs, it's.

An interesting bet.

An interesting bet.

We haven't really talked as much about Canada in the context of, well, are they going to be on shoring making some kind of domestic effort when it comes to semi conductors like the United States are, Well, IBM's doing something to the tune seven hundred and thirty million dollars.

We haven't really talked as much about Canada in the context of, well, are they going to be on shoring making some kind of domestic effort when it comes to semi conductors like the United States are, Well, IBM's doing something to the tune seven hundred and thirty million dollars.

We will be right back. This has Bienbo Technology.

We will be right back. This has Bienbo Technology.

Cybersecurity firm Rubric remember jumped yesterday on its IPO day.

Cybersecurity firm Rubric remember jumped yesterday on its IPO day.

And well it's holding on to its gains.

And well it's holding on to its gains.

Remember it about seven hundred and thirty two million dollars on.

Remember it about seven hundred and thirty two million dollars on.

The back of that IPO.

The back of that IPO.

One of the key backers long term backers was gray Lock PRIP please to say that we have grey.

One of the key backers long term backers was gray Lock PRIP please to say that we have grey.

Lock partner asheme Chanda with us and.

Lock partner asheme Chanda with us and.

Ashme you there stock exchange, ringing the bells, celebrating and how does it feel ultimately to see an early payoff like that? What was the signals that you got early on to know that will go public.

Ashme you there stock exchange, ringing the bells, celebrating and how does it feel ultimately to see an early payoff like that? What was the signals that you got early on to know that will go public.

And do so so well?

And do so so well?

Yeah, so now thanks so much for having me. You know, the hounderstand sor of when you back a company very early, you don't really fully know what lies ahead. I'd say this is this company is really a story of an exceptional leadership team, exceptional leader targeting a very very large market. So I think early on in the company's history it was very clear like the size of the markets that they were targeting, you know, our market sizes that most companies don't really go after, and then the quality of the people.

Yeah, so now thanks so much for having me. You know, the hounderstand sor of when you back a company very early, you don't really fully know what lies ahead. I'd say this is this company is really a story of an exceptional leadership team, exceptional leader targeting a very very large market. So I think early on in the company's history it was very clear like the size of the markets that they were targeting, you know, our market sizes that most companies don't really go after, and then the quality of the people.

Yeah.

Yeah.

And I think what's interesting more broadly about the direction of travel with Rubric is that vantage they popped, they've increased, but also that there are other cybersecurity companies I'm sure in your portfolio eyeing the market, but there's also the juggernaut that is Microsoft. And the same day that they went public, Microsoft came out with its earnings saying, look, we're still making strides in cybersecurity, all interlaced with generator of AI. How much room is that for this sort of element of competition.

And I think what's interesting more broadly about the direction of travel with Rubric is that vantage they popped, they've increased, but also that there are other cybersecurity companies I'm sure in your portfolio eyeing the market, but there's also the juggernaut that is Microsoft. And the same day that they went public, Microsoft came out with its earnings saying, look, we're still making strides in cybersecurity, all interlaced with generator of AI. How much room is that for this sort of element of competition.

Yeah, I would say, you know, so cybersecurity is a you know, is a secular kind of growing market. These markets, you know, have become very, very large and today, you know, it's one of the most important parts of intermission technology. Most large and mid sized companies spend anywhere from five to ten percent of the IT budget on cyber and so there's a lot of room for multiple providers, you know, provide different pieces of the stack. And then and then and then Rubric is an important partner with you know, Rubrick and Microsoft have a strong partnership together.

Yeah, I would say, you know, so cybersecurity is a you know, is a secular kind of growing market. These markets, you know, have become very, very large and today, you know, it's one of the most important parts of intermission technology. Most large and mid sized companies spend anywhere from five to ten percent of the IT budget on cyber and so there's a lot of room for multiple providers, you know, provide different pieces of the stack. And then and then and then Rubric is an important partner with you know, Rubrick and Microsoft have a strong partnership together.

Ashan, I'm really really interested in Rubik's very close relationship with Microsoft. There's a financial element to it. But given how AI in all of its guys is playing out, I just wondered if you had a particular thesis on how that relationship continues.

Ashan, I'm really really interested in Rubik's very close relationship with Microsoft. There's a financial element to it. But given how AI in all of its guys is playing out, I just wondered if you had a particular thesis on how that relationship continues.

Yeah, I would say, it's it's, it's it's it's a multifaceted relationship, but fundamentally you know, what what Microsoft and Rubric are trying to do is really provide customers with cyber resilience, so, you know, and just bring different pieces together.

Yeah, I would say, it's it's, it's it's it's a multifaceted relationship, but fundamentally you know, what what Microsoft and Rubric are trying to do is really provide customers with cyber resilience, so, you know, and just bring different pieces together.

So what's next? A gray lot?

So what's next? A gray lot?

I mean, you have a lot going on, you would claim, I think, and and many of your colleagues who said on this show that you guys early on generative AI and organized on generative AI, wondered if you've kind of sharpened your focus on any other areas in particular.

I mean, you have a lot going on, you would claim, I think, and and many of your colleagues who said on this show that you guys early on generative AI and organized on generative AI, wondered if you've kind of sharpened your focus on any other areas in particular.

Yeah, I would say, you know, so I've been a greylock now just a little over two decades. It's never been a more exciting time to be in venture capital, just with everything going on with Jene AI. You know, the I'd say that, I'd say the average day in the life of a VC has it's really become an AI job. And you know, we think of it fundamentally at three layers, kind of the foundational layer at the lowest level, enabling infrastructure in the middle, and then applications at the top. And you know, it's say, in particular for VC backed startups, there's a lot of opportunity around enabling infrastructure and also in applications. You know, I think it's a safe statement to say that over the coming five to ten years, you're going to see lots of applications completely reinvented, you know, with new workflows, you know, leveraging generator AI.

Yeah, I would say, you know, so I've been a greylock now just a little over two decades. It's never been a more exciting time to be in venture capital, just with everything going on with Jene AI. You know, the I'd say that, I'd say the average day in the life of a VC has it's really become an AI job. And you know, we think of it fundamentally at three layers, kind of the foundational layer at the lowest level, enabling infrastructure in the middle, and then applications at the top. And you know, it's say, in particular for VC backed startups, there's a lot of opportunity around enabling infrastructure and also in applications. You know, I think it's a safe statement to say that over the coming five to ten years, you're going to see lots of applications completely reinvented, you know, with new workflows, you know, leveraging generator AI.

And you've got companies in the portfolio already doing that, and you can name some of the other key AI companies that you might want to anticipate coming to the market, I'm sure, But what about the companies that aren't in inherently AI focused and just tried to become So how do you advise those?

And you've got companies in the portfolio already doing that, and you can name some of the other key AI companies that you might want to anticipate coming to the market, I'm sure, But what about the companies that aren't in inherently AI focused and just tried to become So how do you advise those?

Yeah, I think I think for I think any company that started let's say more than three or four years ago there at risk of being completely disrupted by a new startup. So I think it's as a company that's you know, that's that has a product line that whether whether it's a publicly traded company or in newer startup, they have to really go in AI enable. They have to go and look at the application of AI, you know, to their product line and you know and kind of re imagine you know, other ways and either you know, in a copilot mode or really you know, the more important trend, if you know, if you take him the one year review from here is it's all about asient frameworks and agentic approaches. So most companies you know, really should be looking at like, you know, how do these technologies really apply, you know, to the product area.

Yeah, I think I think for I think any company that started let's say more than three or four years ago there at risk of being completely disrupted by a new startup. So I think it's as a company that's you know, that's that has a product line that whether whether it's a publicly traded company or in newer startup, they have to really go in AI enable. They have to go and look at the application of AI, you know, to their product line and you know and kind of re imagine you know, other ways and either you know, in a copilot mode or really you know, the more important trend, if you know, if you take him the one year review from here is it's all about asient frameworks and agentic approaches. So most companies you know, really should be looking at like, you know, how do these technologies really apply, you know, to the product area.

Assuming there's one thing Caroline and I have learned in the last I say, twelve months or so, it's that not just a company is being founded incredibly quickly, but a platform or products being built very quickly. You guys have this EDGE program where that basically is what you facilitate an idea from an individual through to a business quickly. Just explain the process and how that's playing out.

Assuming there's one thing Caroline and I have learned in the last I say, twelve months or so, it's that not just a company is being founded incredibly quickly, but a platform or products being built very quickly. You guys have this EDGE program where that basically is what you facilitate an idea from an individual through to a business quickly. Just explain the process and how that's playing out.

Yeah, I know, thanks for asking about that, Ed. So, yeah, we have a bespoke company building program at Graylock.

Yeah, I know, thanks for asking about that, Ed. So, yeah, we have a bespoke company building program at Graylock.

It's called Edge.

It's called Edge.

We're very selective about you know, who we pick in the program, and uh, you know, once we do mutually once an entrepreneur in Graylock, you know, kind of mutually select each other. We basically work very closely with engineers and founding teams all the way from market segmentation to product strategy to insertion you know for initial product, working with initial customers, building customer advisory boards. Then you know, over time helping you know, recruit go to market. So it's a very beastpoke program. And you know many years ago Palo Alto Network start in our office through that, you know, through you know, through that approach. You know another one that when public started through that approach is Zoomo Logic as well.

We're very selective about you know, who we pick in the program, and uh, you know, once we do mutually once an entrepreneur in Graylock, you know, kind of mutually select each other. We basically work very closely with engineers and founding teams all the way from market segmentation to product strategy to insertion you know for initial product, working with initial customers, building customer advisory boards. Then you know, over time helping you know, recruit go to market. So it's a very beastpoke program. And you know many years ago Palo Alto Network start in our office through that, you know, through you know, through that approach. You know another one that when public started through that approach is Zoomo Logic as well.

Uh.

Uh.

And you know, more recently, you know a company called Abnormal Security started in that process as well. They've rapidly grown to become a late stage company. And we have another one in stealth mode today, saying the San Francisco office.

And you know, more recently, you know a company called Abnormal Security started in that process as well. They've rapidly grown to become a late stage company. And we have another one in stealth mode today, saying the San Francisco office.

You know in that program, shame Shan now Gray Lot partner. It's great to have you on the program out of New York. We really appreciate it. The Operator Have Shared Electric Bikes and Scooters line, which is backed by the likes of Uber, is planning to invest more than fifty five million dollars this year to expand its fleet globally. Joining us now is the line CEO Wayne Ting and Wayne I find this really interesting because it's not just San Francisco. The story of and relationship of micro mobility here is well told, but you're looking at other regions around the world. Which region is most receptive right now to adding more to the microability offering?

You know in that program, shame Shan now Gray Lot partner. It's great to have you on the program out of New York. We really appreciate it. The Operator Have Shared Electric Bikes and Scooters line, which is backed by the likes of Uber, is planning to invest more than fifty five million dollars this year to expand its fleet globally. Joining us now is the line CEO Wayne Ting and Wayne I find this really interesting because it's not just San Francisco. The story of and relationship of micro mobility here is well told, but you're looking at other regions around the world. Which region is most receptive right now to adding more to the microability offering?

Ed Thank you for having me. We actually see demand from all of the world. Line is today in thirty countries, five continents, three hundred plus cities. And the reason why cities are so interested is because the biggest challenge of our time is the challenge of the climate crisis. And the number one source or corbon pollution in Europe and in the United States is from transportation. The vast majority of that is from personal cars and trucks. And if we're going to need the challenge of climate change, that we must transition away from cars and adopt more green transportation alternatives like bikes and scooters, which is why I think you're seeing cities all around the world embrace microability as a way to reduce their reliance on cars.

Ed Thank you for having me. We actually see demand from all of the world. Line is today in thirty countries, five continents, three hundred plus cities. And the reason why cities are so interested is because the biggest challenge of our time is the challenge of the climate crisis. And the number one source or corbon pollution in Europe and in the United States is from transportation. The vast majority of that is from personal cars and trucks. And if we're going to need the challenge of climate change, that we must transition away from cars and adopt more green transportation alternatives like bikes and scooters, which is why I think you're seeing cities all around the world embrace microability as a way to reduce their reliance on cars.

Wait and I told our audience who are coming on the show, and I put a poll out there to ask do cities need more electric scooters and bikes? The majority of respondents said no. Yeah, well almost the majority, and in some cases they voted for few. There's still sort of frustration and skepticism and disinterest out there.

Wait and I told our audience who are coming on the show, and I put a poll out there to ask do cities need more electric scooters and bikes? The majority of respondents said no. Yeah, well almost the majority, and in some cases they voted for few. There's still sort of frustration and skepticism and disinterest out there.

How do you overcome it?

How do you overcome it?

I think the best way we need to earn the trust of residents and city governments in order to operate.

I think the best way we need to earn the trust of residents and city governments in order to operate.

I think the best way to.

I think the best way to.

Ensure that is to make sure that our scooters and bikes are parked responsibly, that we have a great safety record, which we do that we continue to invest in technology and line builds and r and ds every scooter bike that we put on the street to ensure that they're the safest, best ride on the out there. And when we continue to deliver an excellent service, we will continue to hopefully build that trust with cities to expand.

Ensure that is to make sure that our scooters and bikes are parked responsibly, that we have a great safety record, which we do that we continue to invest in technology and line builds and r and ds every scooter bike that we put on the street to ensure that they're the safest, best ride on the out there. And when we continue to deliver an excellent service, we will continue to hopefully build that trust with cities to expand.

Waan, you're talking to a bike addict here.

Waan, you're talking to a bike addict here.

I actually prefer the non electric ones than the electric ones here, but I do it a lot here in New York City.

I actually prefer the non electric ones than the electric ones here, but I do it a lot here in New York City.

I do it when I'm over in London.

I do it when I'm over in London.

I use the Uber apt to get what you're currently seeing on your screen the line bike. But they're a mess and they're everywhere, and I think that's a key concern here. How do you ensure do you have to spend more on infrastructure to ensure that people do have places to park them? What is the responsibility of you, Visa VI, the overall government right now?

I use the Uber apt to get what you're currently seeing on your screen the line bike. But they're a mess and they're everywhere, and I think that's a key concern here. How do you ensure do you have to spend more on infrastructure to ensure that people do have places to park them? What is the responsibility of you, Visa VI, the overall government right now?

I think it's it's a joint effort.

I think it's it's a joint effort.

So you mentioned London, So London has two.