Transcripts For BLOOMBERG Bloomberg Technology 20240713

Years of trade tensions. We have his exclusive interview. And we look at the competitive space of rental kitchens. First, to our top story. Apple says it is considering bundling its Digital Services including news plus, tv plus, and digital music. Get more bid to subscribers. The tech giant is already experimenting with this kind of approach, offering free subscriptions for tv users to apple music. What are we bundling and why . Said, apple wants to bundle together different paid services. They have had apple music since 2015. They came out with four or five new services this year. They want to lower the price if you subscribe to multiple. Right now, apple music costs 10. News plus costs 10. Play payorage, i three dollars a month. To 40 or, it adds up 50 depending on how much storage you have. Imagine being able to get month. Ing for 15 a that will generate recurring revenue because people will want to subscribe to Additional Services and save money by doing so. Taylor i get that, except that we learned with cable and tv that consumers, muelle bundlingls do not like. Mark its true. People are subscribing to Different Services from different companies. But all of these are available on your phone coming from one specific company, so its a little different in this case. Taylor the timing of your reporting is not suspect. It comes a few days after ney plus pause think disney plus had an incredible lunch. Is apple playing catchup . Did they get caught on their heels a little bit . Mark i dont think its related much, actually. I think this is something they have been working on and considering for at least a year or two. They knew they would be putting out these services and it was only a matter of time before they bundled them together. The apple news plus agreement and publishers was signed around march or april of 2019, about six months ago. It includes a clause that gives apple the right to bundle with Additional Services. That was the first hard evidence this was something apple was going to do. The clause says apple will be getting as giving a smaller share of the news profit to publishers if they bundle it. That makes sense because it will be at a cheaper rate. Are publishers and advertisers saying, because this is one of the instances where re is not targeting targeted advertising. It may not be as beneficial as targeted advertising on a google or a facebook. Mark they are not going to allow publishers or other third parties they work with on these Subscription Services to do any sort of data mining and get information on their users. That is pretty much never going to happen with the current apple. I dont imagine that everchanging. They have really been leveraging it in terms of marketing. Withrms of news plus advertisers and publishers, news plus has been putting much of failure compared to other services. They had 200 thousand subscribers on day one. This is not something a lot of people are subscribing to. I notice they have been putting the marketing for it on the so it seemstwitter, like something they are dedicated to. It has not been the success i think they may have been expecting in march when they announced it. If you think about the price, 10 is not a lot compared to considering what you have access to, but it is a lot compared to their other services. For a lot ofa lot they plan that, and to cut the price it will be interesting to see if they plan to cut the price to up the Subscriber Base or just bundle it with the other services. Taylor switching from apple to another big tech company, uber. They got hit with a 650 million bill for miss classifying drivers as independent contractors when they should be considered employees. To further explain, we are newcomer. Eric who is right . Eric the independent contractor issue was a huge risk factor. Itew per went public was among the risk factors when uber went public this year. The legal system is so slow to play out in the lifecycles of these companies. The idea that the independent issue what contractor issue wasnt resolved public. Ime uber went but california had a law that made it much more likely that drivers would lose independent contractor status. This is a big threat for coopers Business Model. Ubers you brought up Business Model. Taylor you brought up california. New jersey, california, what other states are looking at this . Eric you have all these court cases that of played out. Uber has try to force those into arbitration. You also have states can set their own labor rules. , even if massachusetts had the same avc test that was taken over to california, there is a wonkeryegal here, but it remains a big threat to uber. Taylor another big story we are following when it comes to uber is the former ceo selling about 711 million of his shares. Our investors nervous . Eric i think savvy investors would expect it. He has been pushed aside. He remains on the board but this isnt his company. Its very much a turnaround and he is building an adjacency company. Its not surprising if he wants to cash out. He has already sold shares to softbank. I dont think its that surprising. But any selling is negative, even when there is a logic to it. When do we expect institutional, longterm investors to come in and stabilize the stock . I think as long as people are worried that the losses will track on the top line until itr can convince people that can operate profitably and continue to grow the market, investors are worried that ridesharing is not that much exponentially bigger than the existing transportation, taxi industry. Without the subsidies, thats going to worry people. As long as you have the business and softbanks portfolio doing poorly generally, i think people are going to be worried. Technologysberg eric newcomer, thank you for joining us. Another story, some of the worlds wealthiest investors are moving their money, and that includes Big Tech Companies. We bring in chanel he a flood of information coming in. We will look at it tomorrow on aggregate. Who do we have buying in . Global, known for its private market bets as well. We also have them buying into slack and beyond meet, more Ipo Companies for this year. Who else is a hot stock . Harvard management is flowing into facebook as well as tiger. Lobal people seem mixed on apple and google. Warren buffett trended down on apple a tiny bit, nothing to be super alarmed by. I would love to see what all these numbers look like in aggregate because it seems like Hedge Fund Managers have a mixed view on what the value is. Taylor when Warren Buffett bought into apple we were all surprised given its a tech company and not a traditional value company. What do we know about where he stands . He trimmed a very little bit. To stay awayies from Big Tech Companies he doesnt understand, but he has been warming up to more of them, including amazon, which he wishes he bought much earlier. More and moreing to cash and reducing equities. Not super surprising. His stance on the Banking Sector as well. Taylor thanks for joining. Google is changing its Advertising Technology to better protect peoples privacy, but will it be enough . We discussed next. This is bloomberg. Taylor the iconic motorola razor is back, but not how you remember it. Its a 6. 2 inch smartphone with a foldable display. The company says they are confident in its durability compared to Samsungs Galaxy fold. The new razor is the most affordable model in its category. Devices so far are more affordable tablets. 1500 dollars and will be available for preorder in december, arriving in stores in january. Google said it would make changes to its Advertising Technology to better protect peoples technology. Googleg in february, will no longer dive old information to participants in its ad options about the divulge information to participants in its ad options. We are joined by the Senior Vice President of Public Policy and government relations. Lets talk about the eu. They have been more strict when it comes to data privacy. What are some takeaways the u. S. Can glean from the eu . The most recent action we saw that google show can always play a little bit of the shell game when pressure is on them to dodge scrutiny. The major scrutiny that has happened in the last few years is the antitrust ruling against google. We are seeing new antitrust activity in the United States to try to catch up with europe. I read in the news today that the state attorneys general have expanded their investigation beyond simply advertising the euogy, which is what did in response to the google news today. Android, iearch to dont think you can have two giant markets like the eu and the u. S. Out of sync for long and thats why you are seeing the u. S. Really play catch up with antitrust issues. Take on google . When a mom does a search for a pediatrician today on google, rather than amass the best information from across the web, today, she gets siphoned into lowquality convergence information that google has collected. It doesnt go through the same vetting. Thats not good for the mom. Its not good for competition on the web. The only entity its good for is google. They have put their hand on the scale to protect their dominance in general search. Yelp is involved in these issues because it is competitive. Google, by putting their hand on the scale, creates a competitive threat. But local searching is the most common thing we do on google. Taylor has it impacted your business . Yelp i am proud to say has weathered the storm pretty well. Fight to have another this. Spite of we are i think in good shape. I wouldnt have worked here for 12 years if i were not optimistic about the business. But its not even necessarily about yelp or google. Its about the fact that there are so Many Companies and being deprived of the ability to create new businesses on the web because of google. Taylor what about facebook and amazon . Are they as big a threat . Its a great question. I dont think as much about facebook and amazon because i will say personally i am withhat less concerned facebook and amazon because they are portals in and of themselves. Launched, they presented themselves as a turnstile. We will match you with the best info from across the web. Its hard to decouple the rise of google from the rise of web generated content services, social media services. Google was instrumental in unlocking core innervation on innovation on the internet. But we know they could have done a 180 in their Business Model. Taylor what are you doing at yelp to keep Customer Data privacy safe . The good news about vertical Search Services is that you dont have to have a ton of creepy info about a user to serve up a relevant ad. If someone is doing a search for a dentist in san diego, you dont need to know a ton of info about that individual. They just need to go to the san bucket and fish out a relevant ad. Theink thats one of advantages of having robust competition on the web. You can have smaller competitors where people can optimize for privacy and do better by consumers. But if you are putting all of the power into the hands of one going companies, you are to trigger these types of privacy concerns. Taylor thank you for joining us. Up, former uber coming up, a battle of cloud kitchens. We bring you the story next. Former uberw employees have created a new startup, virtual kitchen, renting kitchen space to restaurants desperate to satisfy demand from hungry homebodies. Travis kalanick, ubers cofounder and former chief officer formed a competing business, creating tension between former and current ceos last year. Joining us to discuss is the ceo of virtual kitchens. Great to have you. Its a pleasure to be here today. Food delivery is really popular. Consumers continue to love the convenience of it. We talked to a lot of restaurant tours, and it turns out, it is a challenge for restaurants that are built for dine in. Possible tog it expand delivery in a simple way with low cost. And it brings more selection and great food to more customers. Uber in parteft because you saw the strain delivery apps were putting on the restaurants. How are you solving for that strain . Absolutely. Restaurants are really built for dine in first. It turns out for delivery there is a set of whole new challenges, similar to. Rickandmortar 10 years ago we build Space Operations and with staffing, menu, and Site Selection to help them do the best delivery product possible, bringing it really close to customers. Taylor every analyst on the street talks about how capitalintensive this is. Can you tell us how much cash you are burning through . Absolutely. We think it is a massive space with a ton of problems to be solved. Some companies are focusing on the staffing aspect. We decided to focus on taking the best sites, leasing them, and building them out to be the most seamless for delivery and the most plugandplay for our top restaurant brands. Taylor you work with a lot of partners. Uber eats is one of them. How is that relationship . Dowe work with them and they the delivery part of it. Its really plugandplay. I think this is one of those thats win, win, win all around. Its great for restaurants to expand seamlessly. It brings great, highquality food to customers in a fast way. App, itse delivery about expanding selection and really delivering the best experience possible. Taylor how are you using data to predict demand ahead of time . Our demand patterns you can use software to figure out. Inventory, holiday and weekend patterns, and we want to make that available for restaurants so they can better plan inventory and better serve their customers. Carer do customers really where their food is made . I dont think so. I think what customers care about is the high quality product and safety of foods. We really try to put our locations as close to customers as possible. In turn, they get high quality food fast. What was your biggest lesson you took away from uber that you are now applying . We try to be restaurant forward and customer first. I spent a lot of time talking to restaurants about how their businesses have shifted due to delivery. They told me about five years ago, it was 5 10 delivery, and now its in some cases 60 . Thats really dramatic. We are here to help them and listen. Virtual kitchen ceo ken chong, thank you for joining us. Ceong up, we speak to the and their investor. This is bloomberg. When it comes to using data, everyone is different. Which is why Xfinity Mobile is a different kind of Wireless Network that lets you design your own data. Choose unlimited, shared data, or mix lines of each and switch any line, anytime. Giving you more choice and control compared to other top wireless carriers. Save up to 400 a year when you switch. Plus, get 50 off when you buy any new lg phone. Xfinity mobile. Click, call or visit a store today. Taylor this is Bloomberg Technology. In sanlor riggs francisco. Move works is a startup founded in 2016, close to 75 million founding funding round led by sapphire adventures. Raisedings the total 105 million. Move works counts linkedin, cement text, broadcom and Western Digital lend more as part of its user base. Joining us to discuss, move works ceo and cofounder robin mamoud. Perkins partner describe the company and what you want to use the funding for. Thanks for having us. Great to be here. Move works uses natural language to understand tickets submitted by employees of large companies. Right now we are resolving 35 of all tickets that come into those companies you just mentioned, broadcom, Western Digital, align technologies, etc. The three of us are knowledge workers, and knowledge workers all over the planet are submitting about one ticket a month to their i. T. Teams. Those tickets involve things like, can i get access to a new application, can you add me to this distribution list, can you remove me from this troubleshooting list . We take the language in those emails, understand it, interpreted and does the entire job of resolving it end to end. Industrywide today the average time to resolve those tickets is three days. We are bringing that down to three seconds. There are thousands of companies that solve problems using ai and data and software. What do you see specifically about this company that you like as an investor. Move works has taken a leadership position in i. T. Support automation. This is a space we have been intrigued by, the use of machines and ai in solving the natural language problems, and what makes move works really special is what is under the hood, the natural language processing, ai, semantic search, a lot of buzzwords but real work the company has ton to build something customers use to solve problems. Up to 35 of tickets are honestly resolved inside these companies without human interaction. This is surprising to me. A lot of clients, you count them as Tech Companies, so do you think they would be good as if you think they would be good at solving techrelated problems, why are they outsourcing that to you . When we started, we decided that instead of making Machine Learning our customers problems, we would make it our job. What we do is actually build these models, we train these models, annotate the data, we retrain, come up with new algorithm designs and will deploy continuously, because at scale across all these customers, we are able to learn very rapidly. Is types of issues, and what needed to resolve them. So every new customer is actually a Network Effect where we can actually be better, more precise and more accurate in that resolution, because we are serving so many customers. Where, if one customer did it themselves, they would be limited to their own data. Taylor beyond these tickets, what did you see in ai we see future opportunities . Today we are solving these i. T. Issues, but what is under the hood applies to way beyond around, what is the vacation schedule for my company, how much can i contribute to my for when to my 401 k , so hr related issues. Throughax provided tickets to hr and finance are different, but you can apply what is under the hood at moveworks to a variety of applications across the enterprise, not just i t specific workflows. We like the platform to go beyond i. T. Itself. To go beyond i. T. Itself. Taylor in the past year, how much more focus have you put on profitability and expenses, given that some of the highprofile names we have talked about havent done well on the profitability front . Is a topic of conversation at every board meeting. We tend to invest in Software Businesses where Gross Margins are in the 80percent to 90percent range, so you naturally expect these companies to have to raise less capital than companies that deploy physical assets and by physical buildings and buy physical buildings, very different than the companies we invest in, which are high gross margin businesses. Taylor what is the mostasked question from investors in the pasture . The process of raising this new round was updated by investors. Vestors. A lot of what we have been focused on of the key metric we care about is how we resolve more tickets for our customers. Customers have been getting that value. Investors have actually been hearing from customers that this is one of the few ai initiatives that have delivered that promise all people talk about ai being able to do. So that is kind of how we have been oriented in terms of what to focus on. And for us, there is one metric that matters. Every morning i wake up and look at a dashboard and it tells me how any tickets we resolve that broadcom, how many we resolve that through tannics, and that clarity of purpose on what we are supposed to do for each customer as the conversation we have with investors. Because if we can do this at a global scale across all companies, every company in the world that has an i. T. Department, then we have a real opportunity to build a sustainable business. Taylor final question, within the software space, as you look at the private company landscape, how overvalued does it feel . There are at last count i think over 400 companies valued at 1 billion or more, combined valuation of over 1 trillion. The beauty of markets is that once one becomes private for long enough, they go public. In the Public Market typically publicthem the Way Investors do want to profitability basis, so at some point it all catches up. I think the source of truth ands up being the Public Markets. And i think we found that when these private Companies Find their median valuation or the right valuation it in Public Markets eventually, so the truth will come out eventually. Whether it is private markets or the Public Markets. Taylor our Public Markets smarter than private markets . Public markets have value coming a certain way, based on very defined metrics. They are very public and are released on a quarterly basis. Perfect, but also sometimes imperfect. Taylor thank you both for joining us. Alibaba cofounder jack ma says trade tensions between the u. S. And china could last 20 years if the superpowers arent careful. He sat down for an exclusive interview with bloomberg in the western african country of togo. The trade war might be a u. S. A u. S. Lationship ichina relationship that might be in turbulence, the next 20 years it may last. We have to be very, very, very careful. I think it is so important for greatand the usa, two countries, to Work Together o support economies, keep people in prosperity and share a lot of technology together. For so many years, china and the u. S. Have been working together. There is a problem. That is very natural. If there is no problem, that is not natural. So when the problems, we have to solve the problems, we should not create more problems. You have said that you love africa and you have acted as a bridge between china and africa. What do you see as the main thing china can gain from africa, and vice versa, the main thing africa can gain from china . i looked at things several years ago, my first trip, i read a lot of things about africa but i came here as a novice. And im inspired by the people, so many young people, and inspired by the original cultures. I decided that i would come every year and visit three or four countries at least, and i have tried to visit every country in 10 years. And i would not say how china or how africaa, can benefit from china. Come as a global citizen, as an entrepreneur, as an entrepreneur who has been working in the world for 20 years. I think a lot of our experience, couldeas, our knowhow, help african young people. These years i start to think, how can china help in a more efficient way. China is putting a lot of effort and africa. In africa. Ort when i was very young, i heard a lot of doctors in my hometown, they had to go to africa for years to help. And i think today, china and africa, there are a lot of things of similarity. Africa can learn a lot from china on how china developed in the past 20 years, in such a quick way, and how we lifted poverty out of that. Do you plan to list on the financials . Will, but weably are not in a hurry. We dont have a plan for that in the short term, because financing. First, we are very profitable, we have grown very healthy and we have a lot of things that we want to do in these years to make sure we have enough investment for the future. Yound if you did list, do know what exchange you would be looking at . Like i said, we are not thinking about when to marry, so we have not thought about where to marry. This is bloomberg. Taylor that was jack ma. Tight. Market is how cutthroat is it . We will explore. This is bloomberg. Taylor employers are improving benefit packages but that is not enough as employers compete in a tight employment market. Morescussed the need for tech recruitment by Companies World wide. Thank you for joining us. I am shocked to hear this. With all the salaries and benefits you hear about, why arent these jobs being filled more quickly . The thing to realize is that every company is now a tech company. It used to be just Tech Companies and hightech talent. Now, every company. Disney Just Launched disney plus, you have capital one, everybody is creating apps and they need tech not they need tech talent. Tech talent is exploding, a 32 percent increase in tech jobs over the past year. At the tech supply, people with tech skills, it is relatively flat. So you have a supply and demand and the market. Taylor what do you do to make up for the imbalance . Something seven changed. What is my compensation, how do i growth the company, why is this culture a good fit for me . But you have to pay and understand total compensation, not just salaries but the value of equity. You have to talk about your Company Value proposition in a meaningful way. Taylor what is the most valuable of those you just mentioned to candidates, between salary, equity, work from home days, what is most valuable . Right now it is value it is salary still. Echoes up and down in tech hiring depending on a boom or bust schedule. People are thinking about cash over to equity cash over equity. Two thirds of our candidates on our platform want to work remotely. That is something that companies can do to differentiate themselves among candidates and it doesnt cost them anything. Taylor among tech, where is the supply and demand disconnect . Engineers, blockchain engineers, security engineers, but look at all engineers, Development Operations engineers. Taylor so what do you tell employers . Do you tell them to maybe train more Software Engineers if they cant find these candidates externally . Can they provide Training Services . How do you close the gap . Ceos need to understand that there hiring is as important as the revenue. We need to talk about employer to look fore need engineers that folks who may not have gone to the same universities or have the same degrees but have selftaught skills, not just where you have worked or how many years of experience that you have. Taylor i am trying to figure out at what age this problem starts to get solved. Lets say i graduated school and did not become a software engineer, but perhaps my kids would go to Engineering School. What is the timeframe . What generation would we start closing of the gap, now that we know engineering is the future . Everyone will go to Engineering School . A bureau of labor cyst this statistics says there are 3 million jobs shortage in in tact intact. It starts with middle school and High School Teaching computer science. They michael off to get there english major at university, but they have tech skills to get tech jobs. Taylor you mentioned blockchain. That peaked my interest. Is that a fad or here to stay . Right now there is demand for it. I think people are not sure what blockchain becomes, but it is a highdemand skill set with a low supply of people with skills and right now we are saying that imbalance. It remains to be seen if it continues. Taylor fascinating, thank you for joining us. Ahead, Guild Education looks to leverage tech to give the workforce more schooling. Our conversation with ceo Rachel Carlson and an investor. This is bloomberg. Breaking news taylor breaking news. Alibaba will be launching their ipo. They are going to be offering hong kong shares, no more than 188 hong kong h. There will be setting their institutional offer price by november 20 hong kong time. Again, Alibaba Group launching their hong kong Public Offering at no more than about 188 hong kong h. Each. G kong we will bring you more as we get more details. After closing 157 Million Dollars in funding led by general catalyst, Guild Education is working with employers, universities and more to build Education Programs that will help students avoid shortterm or longterm debt. Along with the funding round, chenault,lt ken former ceo of american express, is joining the guild board. Joining us is rate or colson joining us is Rachel Carlson and ken chenault. Rachel, remind our audience what Guild Education does. Rachel i guild we partner with leading employers like walt disney and walmart and discovered financial to connect education for their employees with a Company Corporate strategy. We have done that by building a Technology Platform that enables companies to offer education to their employees in partnership with leading universities around the country, to offer programs to employees. It is a winwin for employees of get to see benefits from recruitment, retention and up scaling, and for employees who had backtoschool debt free. Andor ken, you are leading helping this funding round. What did you like at guild you couldnt get elsewhere . Really important to us, taylor, is, we want to work with companies on founders who really want to drive powerful,. Ositive change for our site what is incredibly attractive about guild is that, if one has a mission to empower the workforce of america through education, and very importantly, it has tremendous economics. This is a Software Platform that hasvery high margins, and substantial growth opportunities. But i think what is absolutely exciting is this integration of a company that has very strong economic sense growth potential, and yet has the opportunity to transform workforce education in america. Kenor rachel, you hear talk about the economics, tremendous economics of the many. What is your Business Model . How are you making money . Guild we have taken a unique approach to aligning our margin and mission. It is very important. We are paid primarily by the universities, who replaced the large Marketing Budgets that used to have to spend on google and facebook to meet the frontline workforce of america and help them go back to school, and instead when they save those dollars by meeting students through our employers, they pay for our technology and our services, and keep some of the savings themselves. Thisr ken, we talk about being a company that is female led. I wonder about the pressure in the last six months or 12 months to look at Corporate Governance and being invested in female companies. Allfema barton that impart was one reason why they werent able to go public. Ken i have had, i think, a very strong record of promoting and delivering on diversity. And general catalyst shares this philosophy very strongly. I think it is very important to is aGuild Education femaleled company. Putrachel and her team have together a very diverse team. It is very representative of what companies should be doing. So from my standpoint, i believe that businesses and companies have to be more reflective of live inoverall, and we a very diverse society. Absolutely very focused on driving technology through the technology industry, and business in general. En, you are joining the board. Day one, what is the first change at board meetings that you make . Have a high level of confidence and rachel and her management team, and what i want to do is help Guild Education and transform education in this country. And we can do that with Companies Working handinhand weh handinhand, because have in our roster disney, walmart, discover, we have a range of companies i think are at the forefront of innovation, and trying to bring about change and succeeding in workforce education. Taylor Rachel Carlson of guild ofcation and ken chenault general catalyst, thank you for joining us. That does it for this edition of Bloomberg Technology and our livestream on twitter. Check us out a Bloomberg Technology and follow our breaking news network on tictoc and on twitter. This is bloomberg. Good morning. Im Sophie Kamaruddin in hong kong. We are under one hour away from market opens in japan and south korea. Shery im shery ahn. Welcome to daybreak asia. Our top stories this hour, hong kong heads to the end of a chaotic week. Mustdent xi warns violence stop while the u. S. Senate readies a vote on the citys status. Trade talks set to