Will have an exclusive conversation with spotify se integrate Ai Technology into its product. Lets get straight to our top stories. Stability ai is confronting executive departures, struggling to raise funds and an accusation it has not paid its bill in time. After breakout success the start of faces mounting risks to its edge in the booming field of generative ai. The reporters who broke that story, they join me now. What were the main takeaways that we learned in the course of our reporting . Rachel we spent several months looking into the story and speaking to people including the person behind and accompany that came out of nowhere. Has the ceo that tends to make loose guided comments about things that have not happened yet and the Company Seems disorganized thought disorganized i would say. Ed what put stability on the map, the Stable Diffusion model, what is that a basic terms . Rachel its an image generation ai model. You type in a few words and it will give you back an image or number of images. It was initially developed by a group of german researchers from a start up runway. They turned it Fund Research to improve the product. Ed a lot of your reporting featured focus on the ceo. He has a history in london, he worked at hedge and as a consultant prior to stability, it was around emerging markets and finance. He had companies in crypto and blockchain and us rachel said, he said they came out of nowhere. Not a wellknown entity person here in london or the valley. Raise a lot of money from pretty high established investors. What he has positioned his company around open source technology. Some investors got them were excited about the prospect. That has been threatened by Companies Like meta and newcomers introducing opensource products where we see is stability is internal turmoil. They are facing increasing competition. Ed lets get to the internal turmoil. One of the things to report is that they tried to raise funds out of specific valuation at 4 billion u. S. Dollars. They were not able to. And some of the departures they had at the high levels of the company . Rachel it raised over 100 million late last year at the height of the success of Stable Diffusion and they have not announced a funding route. It was announced that 1 billion in our reporting a bloomberg indicated it was trying to raise of 4 billion as far as we are aware, that has not yet happened. Ed we showed some of the responses we got from stability. When stating they have not had problems raising funds and that they were not trying to raise funds. The other there departures were people like go rather than people resigning. What are some other things that you have learned reporting the story . Mark what makes him an Interesting Company despite Stable Diffusion is there trying to build foundational models, groundlevel infrastructure for generative ai which is what people believe is the future of the internet. It comes as an expensive enterprise. We have seen start ups raising a lot of money because this requires a lot of research, compute, hiring top shelf, expensive engineers. The stock in our reporting shows the revenue, he sent out a tweet saying it was 10 million run rate of revenue for the year. It is below that now in part because of their investments in research and development. Its an expensive business and their competitors have felt the need to be on this cost at rampup of fundraising and the fact that they have not is an outlier among their peers. Ed really important reporting on the company we talked about often here on Bloomberg Technology and now we find out the reality behind that name. I want to get a quick check in on the markets. Broadly, this is what were looking at. Nasdaq is down 1. 5 . The index level has been treading water without size declines in ship names, down 2. 6 . The yield is to come down with the selloff in treasuries. The 10year gilts is down to 4 . Bitcoin was just traded in range for the last two weeks around 29,500. Pushing a little higher in the early part of this tuesday session. The single name we are watching is palantir. Down 7 . Our biggest decline since november. The market is not happy with the guidance that they gave. 2. 2 billion for revenue and year 23. Its about not walking the walk while the company is talking the talk. I want to bring in mandeep singh. This is fighting talk from this company about the momentum they have driven by their Artificial Intelligence offering. Do you see any of that momentum show up in Financial Guidance that they gave . Mandeep no and is too early for any company to guide in terms of the revenue when it comes to generative ai. We have a few use cases around health care would seem interesting. It is too early to say it will drive for Revenue Growth as you see in the case of nvidia. Thats the model that palantir model when you are training 18, 20 fields. The growth they are quoting is not enough to sustain that stock momentum and that is why you are seeing that reaction today. Ed this is what the ceo has told bloomberg in an interview. We have a good chance of becoming the most Important Software company in the world. What is the response to that . Mandeep too early. When you look at the partnerships that have been announced so far, snowflake has partnered with nvidia, they are trying to leverage nvidias expertise when it comes to gp use and accelerators and overlap that with the datalink product at commercial enterprises and that is where palantir will find it challenging to grow. On the commercial side, they dont have enough partnerships to drive that momentum and also the Software Sales if you think about it, happened at the top level where you need salesforce, constantly add customers because palantirs Net Retention rate declined around 100 30 . They have some turn issues and commercial signs decelerated during the quarter. The commercial side is a challenge and need partnerships, Service Providers to drive the momentum. Ed you wrote about pollen to your small calendar consumer base. They have described it, for an artificial intelligent platform, 100 organizations as customers but they are talking to 300. What do you make of their ability to convert but on the others to the table, the willingness to big, commercial organization to invest in ai driven analysis . Mandeep there is excitement around generative ai. The way they typically go about it, they compile it in phases in you will not wait for them to allocate a huge budget for 2028. Its a competitive space. You are competing with hyper scalars, the like of snowflake, data breaks that have an army of salespeople which palantir will find it hard to compete with and what it does to their bottom line, they have no way but to hurt sales people. I know they focus on profitability and are doing a buyback but to my mind their expenses have to grow when it comes to sales or marketing. Ed our big thanks to mandeep singh, palantir shares are down but off session lows and reactions to earnings. Coming up, amazon prepares to sit down with the ftc as a look to avoid an antitrust suit by the u. S. Government. David dog data dog is down 18. 8 . On track for its biggest drop ever. A lot of emphasis on how weak its guidance was ended interesting Software Name is down 18. 9 . Some seeing the result is encouraging in the outlook. One analyst accusing them of a large dose of conservatism. We will track it, this is bloomberg. Come on in. Youre turning 65 soon . Yep. 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Joining us now, the chamber of progress founder and ceo. What do you make of this . We are closer towards a showdown between amazon and the ftc are close to avoiding one. What is your assessment . Adam i dont think we are close to avoiding one and thats partly because leah kohn has made her name is an amazon critic. Her original was her log review paper that articulated that while msn has proconsumer justifications for its behavior she believed it was doing harm to rival retailers and Online Sellers in six years ago called for an expansion of antitrust law to deal with this problematic behavior. For her, this is a long time coming. A way to think of this meeting is called the last rites meeting. Its a formality. It is not likely to deter the ftc from bringing the lawsuit. I suspect it will bring a lawsuit and candidly, based on that pace it wont see the inside of a courtroom for two years which may be long after she has left the ftc. Ed the Chamber Progress is attacked Industry Trade group. Antitrust is an area you share policy perspective on. When i was at sun valley a few weeks ago the microsoft activision deal was firm and focus and a lot of people were asking the question, why does the ftc keep picking fights . Too many in the market they feel that they cant win. Adam i think there are things the ftc could do that are more practical wins but is clear when economists come into the agencies as critics of an ftc chair, she feels deep into conciliatory and she wants to bring lawsuits. I call it a yolo strategy. I think this particular suit, all of the behavior in question amazon has compelling proconsumer justifications for but she is seeing a broader goal which is to expand the range of antitrust law to encounter harm to suppliers, or sellers, workers. She is intent on breaking cases that serve that mission. I dont think a losing record hurts her. I think she thinks well we should try it and if we lose maybe it will prompt congress to change laws. Thus pretty explicitly stated as a strategy of hers. Ed to the best of your knowledge when they all go into a room at the ftc and amazons is down, what happens . What do they have to convince the other side of . Adam if you look at the issues that the ftc has been investigating, these are the kinds of issues in prior administrations and other countries might yield to set up my yield to settlement rather than court. The eu settled on the issues with prime and fulfillment programs last year. The u. K. Is exploring a similar settlement. If the ftc wanted to take a constructive approach with amazon they could and i think there is room for compromise. I dont think that is what is going to happen because she has publicly dissed settlements as being over conciliatory, trimming sales. I would not expect next weeks meeting would be an exchange or real opportunity to had off a lawsuit. Its more of a formality and i would expect the ftc to file their lawsuit pretty soon after those meetings. Ed since we last spoke the Big Development in the world of antitrust is the Warren Graham bill. The broad proposal for a new agency to regulate the technology industry. What was the Group Response to that . Adam we took a look at that. One of the thing i see about tech policy debates as you see policymakers doing things like that where we need a new agency. We need a new regulator. What that does, its a bit of a cheat because of puts aside the harder question of what behaviors policymakers want to ban. This amazon case is a good example. Many people look at Big Tech Companies that think they have a lot of power. We need to regulate big companies. That is probably popular. Then you look at the details. This case will be about amazon prime and whether that bundle is procompetitive. I think there is a gap between more regulation. But then what is the problem we want to solve . If you look at amazon, they are not clamoring for change around. Ed a reminder that what weve reported is lena con will meet with amason next week to find common ground. Coming up here on Bloomberg Technology, nba games could be coming to your streaming apps sooner than you think. Why they are for sale. This is bloomberg. Ed time for talking tech. Superconductor stock and south korea plunged tuesday after a u. S. Based Research Center rebutted claims of a breakthrough in technology of a compressed matter Theory Center in maryland challenged claims by over center that said it had a new material. Media and tech giants are open to acquiring vocal sports riots but only if they can obtain a Critical Mass of teams. It seems like a lot of names throwing their hat in the ring and a lot of it contingent on achieving a big package. What we know . That is something we seen in sports media. The biggest change that these Big Tech Companies, amazon, apple, youtube aggressively getting into the space. We saw amazon getting nfl rights. Youtube has sunday ticket and apple has mls and baseball. This is an opportunity wheres local sports rights and many cases, these teams are broadcasted by Diamond Sports group that filed for bankruptcy and one think bankruptcy allows is for them to reject contracts and not pay the teams when that happens the rice go back to the lease and come up for grabs in these Big Tech Companies as well as disney with jones espn want to sweep in a by the rights. Ed explain the distinction of the local and nationwide level . The nba is available on many different cable streaming platforms. What do local rights give you . Gerry there are National Rights in u. S. Owned by espn and warner bros. Discovery and in each teams local market and a broadcaster of games for people who live in that city. If youre a Boston Celtics fan, if youre in the boston area you would get that broadcaster there. These are different teams in different cities and in a lot of cases they are broadcast by a cable channel owner. Diamond, but there owner took on a lot of debt and these rights are potentially up for grabs. Ed gerry smith with the bloomberg reporting. Thank you very much. Coming up, teslas new cfo, who is he . We will bring you the details. This is bloomberg. Ed welcome back to Bloomberg Technology, ed ludlow in san francisco. We have reversed direction on the nasdaq 100, down 1. 4 . We are down the last five of six section sessions. As we will tell you about later in the program, some weakness in software, and the earnings story and the outlook for the rest of the year is weighing on the nasdaq 100 which is tech heavy with high multiple Software Names that are trading lower. The other name we are watching is tesla. Movement to the downside in the past couple of sessions. Zach con standing down trying to find out the reason why. The replacement, the current chief accounting officer who will keep his current post in addition to his new gig. Here is what kathy thought about this. It is a tough job. 13 years was a really good run zach and i can say enough good enough about him and what he did for tesla. He trained to successor well. Ed we will bring in donna hall with everything elon musk and. Are you surprised that zach left tesla . And then you and i thought we dont know much about this guy do we . The announcement was weird. We learned about the filing on monday but it was made on friday and the regulatory friday says that he will keep his current job and add cfo as a second duty so he now has two jobs. Ed two jobs of a lot of questions, what are those questions . Dana hes not well known. He came up through Price Waterhouse coopers is there outside house. He joined tesla after solarcity. He is not well known to the base. Ed i recognize the name from one earnings call. He came from solar city as corporate controller and he has a key job because elon musk is the ceo but he is busy and in the past four years zach has been a shining light. Explain to our audience, the role he has played at tesla. Dana there is this trend in Corporate America where the cfo has business and operational opportunit