Bloomberg TechBloomberg's Caroline Hyde and Ed Ludlow break down why OpenAI and Microsoft's partnership is facing potential antitrust scrutiny in the UK. Plus, EU negotiators continue to debate rules for AI.
From Marhart where Innovation, Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Love Love.
I'm Caroline Heide Bloomberg's world headquarters in New York and I'm Ed Lovelow in San Francisco.
This is Bloomberg Technology coming up.
Open AI and Microsoft's partnership facing potential antitrust scrutiny in the UK and the US will break down the CMA and the FTC's concern on the competition and.
EU negotiators continue to debate rules for AI. Will discuss the sticking points as regulators balancing the risks of artificial intelligence and its potential benefits.
Plus, Harpoon Ventures raises one hundred and twenty five million dollars for its forth fund to invest in ELI stage startups. Will sit down with the founder Lars and Jensen from today's PC Spotlight A first, let's checking on these markets and completely flat on the Nasdaq. Look, we try to digest the macro picture that is resilience in the US economy, a strong jobs market, a confidence building in the consumer and we're currently just what one point to the downside on the Nasdaq after we've of course, we saw that injection of buying yesterday. We do see big moves in the bomb market. Though thirteen basis, let's call fourteen basis points to the upside on the two years. People think that perhaps we've got a little bit too exuberant about thinking we'll have some sort of rate cuts as soon as March, those probabilities dialing back in the market. We're seeing Brent crew popping up about two point three percent after indeed oil has been under pressure, but notably some views that the US is going to have to build up at stockpiles, just managing to push it up a little bit higher. Let's move on and have a look at what's happening in the world a crypto, of course, because the dollar shows resilience. Today we see although over the course of the five pass trading days, what a tear bitcoin has been on. We're up more than ten percent. Forty three eight hundred is where we currently traded. But what about those micro details today.
Yeah, so a lot of newsflow heading into the end of the year. One story we reported this morning Tesla another executive has left the Dojo project, this time Bill Chang, who is the principal engineer for Ai on the project. You remember twenty four hours ago Mark German and I reported that Ginesh Vin Kateramanan, who was the lead for Dojo, had left.
We're now reporting on another departure.
Stock a little softer three tens to one percent, but kind of in line with the market, not really drawing a causal link. The big technology story right now is Microsoft and open Ai. In the last hour, Bloomberg of reported, citing a source, that the FTC has opened a preliminary look from an antitrust perspective in Microsoft's investment on open Ai, following the UKCMA, which has done a similar early or prelim look, an invitation for the thoughts of the public on what they feel about it, but it could lead to a full blown probe. This is important. Did we see it coming. Let's bring in Bloomberg, Thomas Seal out of London. Thomas, they's start with the UKCMA. What are the details of what we know?
Yeah, as you say, Edward, it's early stages, but I think we did see it coming.
We saw some early signs.
It's hard to keep up with the CMA probes, even on Microsoft's front. You know, it's only less than two months since they closed the activision probe, but in recent months they've been looking at AI foundation models. They've also been looking at the cloud market, and in today's statement on open Ai, they do explicitly mention the relationship with Microsoft Azure and open Ai. So, yeah, really interesting and interesting to see other regulators making similar any moves.
It's kind of fascinating ultimately, when we're looking across at what also the USFTC is examining into the nature of the investment that Microsoft.
Made in open Ai.
We know they put in what ultimately is about thirteen billion dollars in terms of overall valuation that they've been contributing to open Ai. But what the CMA is looking at is whether, particularly through the governance situation, the unraveling, the firing then rehiring of Sam Altman, that de facto Microsoft has more control than well, they're less than fifty percent ownership, they have inequity. What is it that the CMA is trying to prove here? Hope and how can consumers and competition competition be hurt?
Yeah, the key phrase, and when you look at antitrust, there's a lot of dry or arcane phrases. The key phrase with the CMA is substantial lessening of competition or relevant merger situation. Now clearly this isn't a merger per se, but it is a substantial investment. We don't know the term sheet. I'm sure they would like to take a look at it. In fact, on stage at the Bloomberg Technology Conference last month, no back in October, I asked the senior director at the CMA that very question whether he'd like to see the term sheets, and you know, you could tell you could tell that he would, and he implied that they wanted to look at these vertical relationships, as he says, between big tech companies and foundation models, not just Microsoft OpenAI, but also substantial investments in anthropic Obviously Google's full blown takeover several years ago of deep Mind, and that.
Is precisely the deal that Brad Smith, president of Microsoft, referenced in his post when responding to all of this, he said, look, this is very different from Google's outright acquisition of deep Mind in the UK, and they reference that the only thing that has changed is that Microsoft will now have non voting observer on the Open Ai board. Thomas Seal great reporting and analysis on what's happening in terms of.
The regulatory focus.
I mean has mentioned earlier in the USCFGC is examining the nature of Microsoft's investment in the open AI as well whether it may violate antitrust laws. It's all according to a source and the inquiries of preliminary agency hasn't opened a formal investigation, and the source says Microsoft didn't report the transaction to the agency because look, the investment in open AI doesn't amount control of the company under US law. All of this, though, just shows the frenzy with which many are regulators are trying to wrap their head around the technological advancements that we see in AI and how we see some guardrails for it. Let's just go to the EU, where negotiators are still working to hammer out rules on AI, hitting a snag when it comes to face scanning technology in particular most Julian Deutsch has had well a pretty intense week over there in Brussels, where just people have been falling asleep at their desks.
It sounds like, in terms of trying to get.
A deal over the line, the stumbling block for you at the moment, what do we know.
Yeah, So today Mark's we're about nine hours into the second marathon round of trying to get a deal on the Artificial Intelligence Act. Now this is after an nearly twenty four hour round ended on Thursday afternoon without a deal. So they reconvene this morning. I even kind of started off with a bit of a hitch. Lawmakers were too busy debating amongst themselves to actually enter the negotiating room.
Now we're seeing lots of Connor.
Proposals going back and forth between lawmakers and use dowing some number of states.
But everyone's bucking up for another long night ahead.
And as we put on the screen right now, what's its state? It would be the world's first comprehensive AI law if we get some progress, Bloom. Most of the dust's carry said, been busy, and we'll continue to be busy tracking that one, thank you. The US labor market continues to defy slow down forecast is evident in today's payrolls report. However, this week we saw Spotify announced job cuts that will impact seventeen percent of its workforce. There are others Twilio, for example, So what's going on? Joining us now to get a read on the labor market is LinkedIn senior economist Corey Kintango, and Corey, great to have you on the program. Let's just get right to the technology sector. Do you have any sort of micro focus on what is happening there with hiring firing into context of what was a really robust jobs report.
So what we're seeing now on LinkedIn and the technology sector are signs of stabilization. So hiring overall is down about three percent since July, which is also a positive sign for stabilization, but hiring in tech is actually up three percent. So it's been about a year and a half of cool down in tech and we are finally starting to see some positive signs of stabilization in the hiring market for tech.
What about well, the overall inflationary pressure wage inflation, that was something that we saw in the bigger macro data we're looking at at the moment, we're seeing while I increased a zero point four percent for the average hourly earnings month for month, we're seeing prices of people in talent go up.
So in this week's jobs report, we did see an acceleration in nominal wage growth, and that can kind of fuel concerns about inflation, because one of the keys that the FED thinks to controlling inflation is bringing down the job market, bringing down nominal wage growth, so that wages aren't feeding so much into price pressures. But that's this month's job support is actually just kind of a reversal of the slowdown that we saw last month. Nominal wages are still running above what the FED would like, but some of that that we're seeing is actually just coming from the composition of workers. We saw a big drop off in retail employees in this month's jobs report, so those low wages are dropping off, which is kind of inflating that number as well.
The low wages are dropping off, what are the higher wages doing. One of my Caroline's favorite pastimes is to go on the internet and look at all the postings for AI related jobs and then despair at how well paid those potential postings are.
But is he jealous?
Not the way jealous, but is AI having a serious impact in the way that the news headlines would have you believe?
Well, I'm going to have to get on and start looking at those job postings myself.
That's the kiss.
So right now we're only seeing nascent impact from AI. On the job market, only about four percent of employers plan to make changes to their headcount. Is a result of the innovations we've seen this year in AI. Conversations are certainly up. We're all talking about it about seventy ear a seventy percent higher this year than they were last year. We're also saying that people are looking at job postings to say AI, as you said, about seventeen percent higher. They're getting about seventeen percent higher views compared to jobs that don't see anything about AI. Now, a lot of these jobs aren't AI jobs, they're just jobs that mentioned generator of AI are mentioned AI in the job hosting, in part because we know that this is an exciting area and no one wants to be left behind.
It's great getting your perspective on really the nuance that's happening within the technology sector, as well as more broadly, the ramifications for what was a pretty sturdy set of numbers from macro Data Today LinkedIn senior economist crow contango.
We thank you for your time.
Meanwhile, let's get the read across from economists to market implication.
We're so pleased to have in the building.
Leafetengla's Investment CIO as a tengler who really has such a great viewpoint on when it comes to valuations in this space, the technology space in particular. You've sort of seen this economy before, you say, key, looking at the nineties, We've been here, We've done that. Therefore, from the nineth this resilience. Do you still buy tech? Yes, I think you do.
I mean, if you look Caroline and thank you so much for having me in studio.
It's great to be here.
I think when you look back at the nineties, you learn that we can coexist. That is, stock equity investors with higher interest rates the tenure averaged five to eight percent during the decade, higher levels of inflation we were above three percent for the entire decade, and a tight labor market with productivity growth, and a number of other things that we pay attention to, like the vix it was low during the nineties. These are things that have been before, and yet we've still been able to generate excess returns. And where were the best returns in the nineties. They they were in technology. I think we're at the beginning of a new supercycle. So I think there's a lot of reasons on weakness to buy these names.
Okay, we haven't actually seen that much weakness in Magnificent seven yet. For example, maybe a bit of a dip on some of the chip makers, but ultimately all you still saying let's go for the Microsoft's then videos, Oh, do you.
Broaden that viewpoint? We're broadening it.
So if you look back at the valuations, I mean, let's not forget in the nineties it was the four horsemen. I mean, at least now we have seven, right, and Microsoft then was trading at fifty one times peak earnings. It's only around thirty times, not peak earnings. So yes, you want to own that name. I'm less enamored as we talked about last time. I think I shocked ed with Meta. We own a little bit of Google, but we like Adobe, we like Service Now the poor man's Nvidia broadcom which reported great returns yesterday, great results, and Race a dividend fourteen percent. So those are some of the places we broadened out to Oracle, which is a generative AI computing play, but when we were buying it, it was just kind of a cheap old economy technology stock out.
Nancy ed is not that easily shocked, but one thing that did catch my eye this year. I spent a day with AA and they had this forecast that the market for AI accelerators AI accelerators only will be four hundred billion dollars in twenty twenty seven. That's up from their forecast that they only just gave in August of one hundred and fifty billion dollars. Last year, the entire semiconductor market, every chip you can think of, was five hundred billion dollars, which makes this forecast of multi multi year ongoing expansion from AI even more.
Amazing.
I suppose do you see the investors following that trajectory from now through twenty twenty seven.
I think eventually yes.
I mean what you continue to see is that the bears don't get to be in charge very often, so they're kind of loath to leave the stage. You know, we heard that the tech trade was over in October in the fall, but in particular October of twenty twenty two, we were in buying. At the end of the summer, the stock scot you know, pretty well trounced and including the Magnificent seven. We wrote a piece on October thirty first said you ought to get in here and buy some of this stuff, and we were doing that, So I think what you want to do. I mean, this won't work forever ed, I mean, that's for sure, but these super cycles can run five to ten years. And we're in early days and you have identified the total addressable market, which is critical and it it extends beyond chips into software as well.
That is the conversation I'm having every day. At the moment, everyone's obsessed with the GPUs, What about all the other stuff? Producer John Hyland saying in our chat, if in Nvidia's the champagne, then broad comms the pbr bit based on your fisis, but what about the Ethernet infrastructure that's needed the memory chips. Do you think that that's kind of being discounted right now?
Yeah, I think you know, in Nvidia is sucking all the air out of the room, and now you've got AMD and they're kind of adding some value, you know, adding some narrative to this. Broadcom is only partially it's going to be about twenty five percent of revenues, the enterprise cloud computing chip part of it. But they've got VMware which is going to pick up some of the slacks. So we're looking at names like Adobe, which I call the unsung hero of generative AI, and we own it and we're looking for opportunities to add to it. Service now is taking it spend away from some of the other providers directing the traffic in the clouds. So there are a lot of ways to play this, and I think, you know, I don't think you have to chase Nvidia up the ladder.
Always so straight talking and coming out showing how you've been putting your money where your mouth is. We really appreciate it and as of love a Tanglar Investments. Great to have a here in New York. Meanwhile, add to you.
Yeah, coming up, we're going to have a conversation about DOC you sign out with its quarterly report. We're going to recap those results and get the outlook with the CEO coming up next, Alan Tigerson on the program Quick one TSMC four tenths of a percent on the ADRs.
It's so weird. What's going on.
November data for sales not good. October had been good, down the eleven foot first eleven months of the year, the down four percent year and year. We have no hard gauge on what's going on with this chip industry. If we bottomed out in some areas, we're still sinking in others, but we'll keep tracking it.
This is bloonbo technology.
Time for talking tech.
First up, Indian conglomerate Tata Group is planning to build one of the country's biggest iPhone assembly plants now. The facility will likely have about twenty assembly lines employ fifty thousand workers. According to sources, Tato's plant would bolster Apple's efforts to increase production in India. Meanwhile, ten Cent is betting on its new open world adventure game to help expand its global reach, and the official trailer for Last Sentinel, while it was unveiled during the twenty twenty three Game Awards send in a dystopian future Tokyo. Last Sentinel was developed by ten centts California based Lightspeed at La Studio.
No word yet on the game's release date.
Plus raad coom we're just talking about it when that's ten Lember Broadcom says it expects the rapid expansion of AI computing to how offset its worst slowdown since twenty twenty. CEO Hoc Tan referred to AI as someone a lot of bright Spot for the chip maker, which expects salesforce AI supporting chips to grow more than twenty percent in twenty twenty four. Yesterday was Comm's the first calling reports since it's acquisition of software firm VMware.
Ed well for we got yeah another earnings conversation. Doc you sign out with results beating expectations on revue in the third quarter gone, but offering a margin outlook that was seen as cautious by some analysts. I like to say that joining us now is DOCU sign CEO Alan Tiger Sin Docu sign e signature document generation.
We all use it. Ye had great results.
The stock opened significantly lower, then rebounded, your up four percent, and the analyst is saying, come on, give us a little bit more on your margin outlook. Why were you so conservative?
Well, we've I think shown that we can drive great operating efficiency inside the business. I think that was really the highlight of our Q three results, record operating profit.
Record free cash flow.
But we still have growth ambitions as well, So we're balancing our investment and growth and our new roadmap with continuing to find new operating efficiencies.
Most of Openingberg Technology audience with no docu signed from e signature. Someone sends you something, you sign it electronically, done, dusted, simple. But what is the technology story for dock sign he talk it's about growth into what.
Yes, so historically we pioneered E signature and that continues to be the majority of our business. But over the last several years we've been investing what we call agreement management, which is essentially helping companies manage agreements from development, editing, negotiating, settling, signing, and then once you have the signed agreements, what are you doing with them? How are you performing against your obligations, how are your vendors performing, and how would you like to renegotiate them when they're up for renewal. That whole suite we call agreement management. We've delivered various pieces of it, and we're really putting the whole thing together now.
Morgan Stanley analyst over there, Josh bare talking about decelerating trends, of course, which you try to counteract with this growth story of focus on a broader agreement. What is the macro economy paint for you and your customers at the moment.
Yeah, I would say it's still a cautious outlook. Our outlook reflects what we see right now. We don't try to be macro prognosticators. But I would say the B to B software space and enterprise spend in that area is steady. Certainly, to the extent that the macro environment and interest rates improved, then that will be very helpful. But we're not projecting that yet. But I'd say that we're in a stable environment.
We're not falling anymore.
Your background before, of course, Doc youre side Google. Before Google, you were asset managing. You were also investing in startups at Karlau for example, Alan, What is it that you've managed to do because many would reflect that your manager did contained costs. You already managed to show this expansion while not bringing up the overall cost of doing business. How have you brought over your playbook of seeing others do it before to your business now?
Yes, so a guy, I'm an entrepreneur at heart. I spent the early part of my career in startups and then as an active venture investor, and so I still look for entrepreneurial opportunity and growth and that's what excites me and what excited me about the Docus sign opportunity, and so I look for opportunities to invest in new growth areas. At the same time, I've seen scale at Google, and you know, some of the things that struck me as I looked at DocuSign coming in was, for example, we were not we were taking orders through humans for the vast majority of our business. When at Google, if an advertiser spend one hundred dollars or one hundred million dollars a month with us, they placed their orders on the system. So I felt there were some opportunities to improve our self service options, not just for small customers, but for customers of all sizes.
We're in the process of doing that.
That's doing really well.
Okay, I'm going to do it. I'm going to ask it.
What is the doc you sign AI story? If there is one.
Actually, I think we have a great story. Now, I'm sure all your guests say that. But if you think about if you think about agreements, historically, the way companies are treated agreements is they're essentially dumb flat files. There's no sense of yeah, we may have digitized them, but we still can barely find them. We certainly don't know what's in them. The beauty of AI is. It allows us to extract the essence of the agreement, the data of the agreements, and then you can then measure those agreements versus the actual performance as well as versus other agreements with similar entities. And so we are in the process of building that out. We're actually in active trials with a number of large companies. We've built a sandbox where they can try all this out. So I think the agreement space is particularly well poised, and we as a by far the largest player in the agreement space with trusted relationships with almost a million and a half companies pay us monthly dues. That puts us in a great position too to do your begory.
Docu signed CEO Alan think it's in as great catch up. Thank you.
Welcome back to bloombow Technology ed love though here in San Francisco.
I'm Caroline hid in New York. Let's get a check in on these markets. Last day of training of the week, and well, we actually see a little bit of cautious buying. When I'm looking at the NASDAK, we're up just a tenth of a percent. Of course, we had a lot of exuberance around AI will dig into that in a moment, But the two year yield is showing significant sell off, actually across the curve. Bond's selling off because look, good news is bad news in terms of the strength of the US economy. The jobs data showing growth, resilience, unemployment coming down, all of this meaning that maybe the Federal Reserve, oh, we keep rates a little bit higher for longer than we'd anticipated. And certainly the confidence coming from the consumer as well showing that too.
Interesting.
Though Bitcoin once again managed to shrug off the issues with the bond market, it's still rallying today. Move on, have a look at some of the individual movers that we've got on the move. I'm looking at Alphabet just pulling back on some of those that we saw yesterday. Remember it did manage to push higher on the back of its Gemini announcements. Pame Olsen, our opinion writer, really digging into the detail of that announcement, saying, look, it still lags open AI and actually some of those videos and marketing tools just when all they were cracked up to be. But still we're off by only about one and a half percent. Video on the high side up almost two percent. The exuberance around what's happening with AMD that's putting back a little bit today. Interesting moves in the chip sector in general, and TSMC not pointing to all that much resilience in certain parts, but in video gets a little bit of buying on the day. I'm looking at Paramount quite a bit of buying in this particular name. Will the studios be bought? Is it on offer? In general, we're seeing Redbird capital to medicine as well, potentially eyeing this particular company. That's what of course Deadline is currently reporting, but people buying on that room ed a.
Big story this Friday.
A gene editing treatment for sickle cell disease based on the Crisper technology was approved by US regulators, marking the first time the technology can be used in patients in the US. Uses precisely targeted changes in DNA to repair flaws in patients genomes related to inherited disease, and if approved, would be the first time this technology can be used in patients. As we say in America, the treatment is offered by Vertex Pharmaceuticals and Crisper Therapeutics. There was some interesting equity or share response when the news broke. You can see those names now lower in US trading. Jennifer Dowdner is a biochemist at the University of California, Berkeley and pioneered the crisper technology, which led to her winning the twenty twenty Nobel Prize in Chemistry along with her collaborator Emmanuel Chaventier. Jennifer Dowdner joins US now, I start by asking you to just give your reaction to the news we outlined well, and.
I'm just amused.
It's eleven years from a fundamental discovery in science.
To an approved therapeutic.
It's just extraordinary speed, and it speaks for the many, many people that contributed to make that possible.
I posted on X the news, and what I was surprised by is the number of people who responded saying that they had been impacted by sickle cell disease, either a family member, somebody they know. Could you just explain the basics of what this treatment would do, how it would work well.
Sickle cell disease is a human condition that results from a single gene in our DNA that is defective, and in patients that have two copies of that gene, they have terrible symptoms. Pain crises they go through, it shortens their lifespan. It's really a devastating disorder. And what chrispher offers now is for some patients at least an opportunity to have a treatment that is effectively a cure.
They don't.
They get a one and done therapy that removes their symptoms for the rest of their life.
I'm interested in now the application, Jennifer, and ultimately, how could you think this can be in the hands of patients and really from an economic perspective and an equality perspective, in the hands of patients when it's likely to be pretty expensive.
Right Well, you bring up a very important point, and that's a reason that we're working hard at the Innovative Genomics Institute at the University of California to ensure that this type of therapy becomes widely available and affordable, because, as you point out, it's an expensive treatment right now, and it also involves weeks of hospitalization to deliver the therapy. So we really weren't want to figure out ways to have new technologies intersecting with genomediting that will reduce class and make it more available to people worldwide.
And talking of worldwide, the UK, the regulators there had signed off the use of Chrispher cast nine. How do you think this will become a global story. How do you think that it will evolve to help other diseases that currently affect in a pass down the generations.
Well, here's a very exciting thing about chrispher and that is but it's a therapeutic that can be programmed for different diseases. And now that we see the path forward with sickle cell disease, which is amazing first start, it's really the beginning of what I think will be a new era of medicine where we have in the future viewers for various kinds of genetic disorders and perhaps even one day preventive treatments that result from modifying our genes.
The supply chain for these treatments is complicated, Jennifa, We've covered on the show the idea that you do a lot of the R and D and prelim manufacturing planning while.
It's pre approval.
Do you have confidence that there will be a sort of availability of treatments for those that need them based on the market's ability to make them to provide them.
Well, I do. I think it won't happen overnight, but there's enormous effort going on, both in nonprofits and of course in many companies to ensure that there will be supply chain benefit. It's from this that we'll be able to figure out how to get these products made and the quantities that are needed. And I think that over time, and it will take some time, there's going to be some streamlining processes that will just advance the therapies and make it more and more available to people around the world.
We outlined your twenty twenty Nobel Prize award. The work that you've done is their work, at least at the intersection of academia and biotechnology that still needs to be done in this field. And if so, what are you doing right now?
Yes, as I was driving to work this morning, I was thinking, you know, this is a wonderful, exciting day, but it's also the very beginning and there's a lot of work to be done. It's time to roll up our sleeves. I think we need to really work hard to figure out how to, as we discussed, make these therapies more widely available, of course bring down the cost, and I think that will be a combination of technical developments as well as working with regulators, working with patient advocacy groups, and really figuring out how we appropriately partner between academics and companies to control the cost in a way that will make this benefit available to many.
And you do that, you are that sort of go between between academia and helping advise companies. And I look at Crispo, which the company involved here that has about five billion dollar market capitalization. Vertex as a ninety billion dollar market capitalization. Can put in the R and D spend. But what about the money allocated to this field of work at the moment, Jennifer, And where is the money necessary to come from?
Well, it comes from various sources. Of course, investors are playing a big role in these companies, but we're also seeing big input from the governments. So you may know the National Institutes of Help in the US has the major effort to advance gena editing and the context of gene and cell therapy, so that's very important. We have other nonprofit organizations that do filmanthropic support of science. The Gates Foundation comes to mind, but there are many others who are supporting this. So there's a lot of effort here and I think many people appreciate the potential of genomeliting to impact large numbers of people if we can really figure out how to reduce costs and make these widely available therapies available to people around the world.
Of course, back in twenty twenty the world was in a very different place, and the joy and necessary optimism around leaps and bounds of creativity and technological development in science, in particular medicine was really important. It feels that twenty twenty three all the oxygen has been dragged out of the room when it comes to AI innovation and generative AI. To that end, there's a lot of discussion about safety, and I know that's a big point for you, Jennifer. How are you thinking about the application of crisper technologies and ensuring that this is rolled out in the safest way, manner and manner possible.
Well, it's a great question. It's very important. This is one of our founding principles that are at our institute, is ensuring safety and responsibility as chrisper technologies continue to advance. I think it's for me one of the questions regarding ethics is really about equity, and we've touched on that a lot in this conversation. It's very important, but I also think we have to continue to think about safety and effectiveness of these therapies and to figure out really how to work with regulators to ensure that we have a process for testing the safety, but also that we advance the therapy as quickly as we can to help patients. It's a delicate balance.
But Jennifer, I want to return to the idea that if sick will Sell is the start, what is the next step, What is the next breakthrough that could help humankind.
Well, I'm very excited about a couple of things. I think that certainly advancing the genomeediting approach into their types of tissues will be important, and we're seeing some great progress there in terms of especially for liver disease, work being done by a company called Intellia that, for disclosure, I'm a founder of, although I didn't do any of the science they are doing, and they've shown effectiveness in treating rare liver diseases using Chrisper genomeediting. And the important thing there is they're delivering these molecules directly into patients without requiring a bone marrow transplant which is required for the sickle cell treatment. So I think that's an exciting advance. And then there's also work to in the future provide protective medicine for people who have genes that might make them susceptible to cardiovascular disease, for example. So that's work coming out of a company called VERB.
So I would keep an eye on those.
I think they're really exciting developments in the field going forward.
And developments that you keep out driving. Jennifer.
We really appreciate you making some time for us today on this milestone here in the US. Jennifer Downa of Correspound with the Innovative Genomics Institute, and of course chrisper coh inventor.
Thank you.
Great to talk to you.
And we were just talking.
A bit about venture and the backing in medicine. Let's talk about Harpoon Ventures raising one hundred and twenty five million dollar fund and back early stage startups. We'll discuss where that money is being allocated. That's Jensen's with us. There's some blue meg technology.
It's time for the VC roundup.
First up Airspace Intelligence and AI startup targeting air travel has raised thirty four million dollars in a funding round lead by Andresen Horowitz to more aggressively pursued deals with the US Department of Defense. The new financing brings a bit of chunk of change to the equation. Meanwhile Group, a Sam Outland backed crypto startup, has launched a bitcoin private credit fund via its investment management Sidiery Meanwhile Advisors. According to new reports, the fund is targeting a five percent bitcoin denominated yield by lending bitcoin to borrowers.
Plus.
Harpoon Ventures, whose investors include Andresent Horowitz, veteran Pete Levine, and former Olympic swimmer Michael Phelts, has raised one hundred and twenty five million dollars for a new fund to back early stage enterprise startups serving the public and private sectors.
Caroc's dig into that very story. Let's bring in Helping Ventures founder Ausin Jensen for more on today's VC spotlight and the money, the repeat.
Ability to raise money.
What is it that brings LPs back and have you attracted new LPs for example?
Absolutely, it's a pleasure to be here and really appreciate the time today. It's really a testament, I think to what we built over the past.
Number of years.
When we started years ago, I really think that we were the first to observe the emerging technology in startups. We're going to have further reaching implications than they previously had, at least in my lifetime. Maybe more specifically, they were going to have national security and geopolitical implications that they really hadn't until this current era. And we see this more recently with the announcement by the Five Eyes of Chinese Espionage. We see this with President Biden's Executive Order on artificial Intelligence, and we're seeing it within our portfolio. And so as we think about the LPs that are re upping to us nowadays, there repeat LPs that have been with us for the past five years, and we certainly have brought on some new ones as well. But it's no secret that LPs are actually struggling in this environment due to the denominator effect, due to being over allocated to private investments broadly speaking. But I think what we built has been a testament to our progress over the past six years.
And what's been interesting is you raise this fund at a time where there is a lot of pand ringing around artificial intelligence, future regulations, EOS being written, you still try to get it back together with the AI act. It's interesting that some of your portfolio companies already are in the area of safety and AI. How have you decided to switch companies a week from chaff in this particular arena.
It's very difficult to do, and I think it's difficult to do because the space is changing so drastically. So when we think about what we're investing in, we're investing in things from a first principle standpoint where we have generally speaking, domain expert technologists who have a core defensible technology. There are serial entrepreneurs oftentimes, and we're very customer obsessed. We think that there's no greater gauge than talking to the early customers of these technologies to understand the pain points, to understand the budgets, and align those with our investment decisions.
Really interested in Stratus as an example, right of a target company or a portfolio company. There are a section of the VC community that kind of say, hey, our portfolio companies have access to a lot of public capital, whether it's defense or government or municipal. Does that make for an attractive potential investment for you guys?
It does but I think.
The way we put it it needs to be dual use in nature, we like to see companies with a large addressable market in the enterprise and in the case of a strawas they're selling predominantly to internet service providers around the world. But our thesis in investing with them and in subsequoling and helping with them was to do business with Uncle Sam as well. And we think that's a large scale, durable market for that company, and I think really should increase the possible outcome of what that company can do.
Luson what was the experience of raising the fund? How long did it take? Was it challenging, was it easy? Were you being pushed? We you do in the pushing a little bit of both.
I think that this year, in twenty twenty three, it's no secret that it was much more difficult than in twenty twenty one.
In twenty twenty one, investors and.
Allocators and limited partners were really jumping both feet into the pool, maybe diving into the pool adventure capital, probably led by large scale IPOs, and getting cash back into their wallets for them to redeploy. The IPO window has been effectively shut, as we've seen since then, and so it really puts allocators in a little bit of a bind in terms of where they allocate that incremental dollar. And it's also no secret that the opportunity cost of capital has gone up. Many of the institutional investors out there have about eight percent target on their overarching endowment or foundation, and now you can essentially get that not necessarily risk free, but much more so than allocating to longer horizon asset classes like venture capital. So it took a little bit longer, but I think we're fortunate that we have durable capital partners that have worked with us for the past six years, and the majority of which have really stepped up to the plate to continue to back us.
You mentioned the word pool, and I mean ask a personal question, because my new people will recognize you for the fact that you've got not one.
But two Olympic medals.
You're of course still deeply involved in jumping in the sea every now and then, and I'm interested as to how that mentality has affected the way in which you raise money or actually and allocate.
And do business.
Actually does it make because people know who you are and what you were dedicated to them more willing to invest in you too.
I think it's a combination of attributes, to be honest, and I think that really the wraw ingredients that I used as an adolescent young swimmer going from high school into professional swimming and going to the Olympics are the ingredients of waking up early, grinding it out, and investing in myself for decades, perhaps in order to make an Olympic appearance. I think investing in venture capital is very similar in the sense that you can't control necessarily the outputs, but you can't control the inputs. You can control day in and day out if you're going to be the first in the pool and the last out, And ultimately that's the effort we expect of our team and we expect of our founders, and that's what we bring to bear when we work with them.
In still a record holder in four hundred meter freestyle, not to mention next Navy seal. We thank you so much helping Ventures founder and general partner Nelson Jensen.
It's the latest edition of Blue Boy Business Week, and it.
Takes a deep dive into salesforce, particularly an environment that's actually much harsher than it was pre pandemic, and it's impacting tech firms across the broad This particular breakdown of his piece the era of eight hundred dollars dinners and luxury car bonuses over at Salesforce. That's why again Bloomberg's Brodie Ford. It's a great cover, it's a great story, and you really take a look at one particular individuals sort of rise within sales role and ultimately how much he was winning and bringing in what has changed CRM now.
So there was a while where at Salesforce and the industry at large, you show up, you had a nice smile, you can make four hundred k. I mean, software was flying off the shelves. We saw entire industries had to digitize in the pandemic. And even before that, I mean there was just really this kind of golden era of these software companies because there were so many customers.
Everybody needed to digitize.
Obviously, interest rates have gone up, the economic picture is different and companies are saying, how the hell did we was spending so much money on software, which has caused companies like salesforces say, okay, we need to actually start cutting costs. Where the costs with salespeople, so the job gets a lot harder.
Mm hm, Brady, you got to shout out from Mark Bennioff, the CEO Salesforce, says, you know, and I know you write about somebody's company, it can go one way or another. He seems to agree with the thesis outline in your peace.
I think they know that they need to be seen as the bad guy for a little bit right now, because remember they had all these activists investors a year ago that were saying, you are not raising your profit margins quickly enough. Essentially, this story shows what it looks like when you raise your profit margins ten percentage points in six months, things get harder. Salesforce is aware that they need to be doing that, and they, I think are happy to see it explained.
You go into detail that Bennioff himself is a really a natural salesman. What sort of talent are they now focusing in on? What if it's not a nice smile, Like, what do they have to bring to the table? And how is that the read across the rest of the sales community.
Yeah, well, you know they still have salespeople.
It's funny is that they're just kind of hiring more engineers now, you know, I mean when.
They're looking to Amazon, they're on marketplace, right.
I mean, when they hired thirty thousand people in the pandemic, majority of those were salespeople, whereas now in the layoffs, the majority cut or salespeople.
And so they're really just.
Focusing in on what's going to get us to the next level, and a lot of that is having to build new products. And we're seeing that across the industry. I mean, there's a lot of high flying startups. You can name any of them, Zoom, Twillia, doesn't matter. They had a similar trajectory and now they're having a similar bus cycle.
On that happy note, we'll leave it, but it's a phenomenal story. It's getting a lot of pickup across online and go pick it off a shelf or how you consume of course your business week. Bloombog's body forward really interesting deep dive into salesforce. While that does it for this edition of Bloombog Technology ed.
In a relentless year and another relentless week. A lot to recap.
Check out the pod, the Bloomberg Technology podcasts and Apple Spotify, iHeart and we post It's Bloomberg and We're on YouTube from San Francisco and New York City.
Happy Friday. This is Bloomberg Technology.
