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On Fox one, you can stream your.
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Favorite news, sports and entertainment live all in one app.
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Watch breaking news as it breaks.
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Breaking.
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Tonight we're following two major stories.
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Bam.
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And catch History in the making.
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Gimme Meet Freddy.
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Debates, drama.
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Touchdown.
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It's all here baby. Fox one we live for live streaming now.
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Bloomberg Audio Studios Podcasts Radio news Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
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This is Bloomberg Tech coming up hot week for IPOs after fintech company Klein yesterday, we look today to block chain lender figure we'll be joined by its executive chairman.
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Plus Apple sentiment sours again with more analysts downgrades, the lowest in five years. We talk the stock price and iPhone.
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Price and we speak with Box CEO Aaron Levy as the company unveils new AI products at its annual boxworks conference.
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Let's check in on these markets because as we anticipate a conversation on AI with Aaron Levy, we think about how much air stocks are supporting this market rally. We are up for a seventh straight day on the NASDAQ 100. We're in a new record high five. 10 of a percent. But you get underneath the index ad and show us the individual stocks to look at.
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Yes, some of the technology stories today are stock stories. So Micron got its price target raised at Citi. There are other names in the street saying Micron has earnings. September 23rd. We talk a little bit about Oracle and the momentum in the hyperscale as well. Memory chips key to the data center. They see upside for that. Oracle had its best day since 1992 yesterday. It is now giving back some of those gains down a little bit. And then there's Klarna, a company that IPO give yesterday at 40, opened at 52. I think I'm right in saying session high 57 closed around 45. Where we at? We're at 45 there or thereabouts. There's a lot more to discuss on that IPO momentum, though.
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Isn't this perfect person to do it with? Bloomberg's Aisha Ghani joins us. You cover cloud. I have done for years, spoken a lot with the version of the CEO and the CEO himself. Aisha, I'm just interested as to what you deem as the success story of yesterday's listing in the performance today.
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G
Absolutely. Just to set the scene with Sequoia, who of course invested in Khan for a long time. They made a $2.7 billion windfall. And over the years they had invested around 500 million, which kind of indicates that when Khan popped yesterday, a lot of investors are quite happy. Others had held on to this onto their shares while others sold. So it was extremely successful day. But we're yet to see how things will pan out.
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D
One of the things that we discussed with the company's CEO yesterday on the program was the idea that this isn't just a buy now, pay later name. They want to be this kind of everything app. And when a company iPodOS, it's not always about raising money like you just pointed out. It's about getting the name out there. Do you get a sense I show that that story is resonating, that Klarna is so much more than buy now, pay later.
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G
I'm sure as many of your viewers would have seen yesterday across Wall street and the Macy's, they would have seen the Khan banner draping many of New York's hotspots. But I suppose what's been fascinating about their story is this is a European fintech and it is now global. The largest market is in the US And a lot of people will be quite familiar with Klarna at checkout when they're shopping. And of course, now Klarna is going into banking and that's basically the next big push in order to keep those customers on the app for longer.
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Look, it is a success story for European vc, for European tech and all eyes on Revolut. Now. The UK Success story has a much bigger valuation in the private markets.
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G
I'm glad you raised Revolut. Last week I was reporting that Revolut is now engaging its staff in a $75 billion share sale, and which is absolutely staggering when you think about it. But of course, Klarna has been private for 20 years now, so it's an indication of where private firms like Revolut and Klarna are thinking in terms of next steps. Revolut will definitely be eyeing this. Of course, Klarna has IPO'd on the new York Stock Exchange. And a lot of these firms are still deciding where to go. But I'm sure a lot of them will be looking at the Klarna CEO Sebastian Simikowski and the sort of media attention that he had received and also the investor sentiment as well, and would be hoping that they could capture some of that too.
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Bloomberg's Aisha Ghani, thank you very much. So let's bring in Anna Rathbun on broader tech markets. She's the CEO and founder of wealth management firm Grenadilla Advisory. And you heard what I had to say, right? You know, it's been several consecutive weeks and months of interesting IPOs, many of them fintech related. Is there a broader signal that you've taken in the investor response to of those IPOs?
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E
Anna, good morning. I think it's nice to see FinTech IPOs, and I think it's also nice to see tech stories that are not necessarily AI related. These are fintech companies that are coming in that line to actually directly interact with the consumers. And if we pay attention to what the CEO said yesterday, it was really about revolutionizing the way people actually fund their purchases. And I think some of this is very refreshing. I think we're going to have to have a lot of creative ideas like that one in order for investors to get excited. Because right now all the attention seems to be on AI.
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D
And a specific decliner is the discussion about going public versus staying private like some of their peers did. And we discussed on the program the merits of staying private, what it does for some of Klarna's peers like Revolut. But on the other side of the table, what kind of a signal is it that a company is choosing to go public in this environment? What does it tell you about the health of public markets for technology in America?
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E
Yeah, I think it's okay for companies to stay private. And frankly, this has been a trend for a very long time. This isn't anything new. And it's okay because frankly, a lot of the innovation, especially on the front that is taking place, it's so new and so experimental that if you have those companies IPO too early, we may have something like the 1990s tech bubble where you know, the cash flow isn't as steady, it's not as stable and then you have a crash, right. And everything is done on hope. So I actually don't mind companies, especially tech companies that are innovating and doing some something very new, staying private for longer and then after they have stabilized and have they're big enough to enter the IPO market for the health of the retail investors especially.
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What's fascinating is going Back to the 90s yesterday Oracle had its biggest share move in the night since the 90s and we saw significant value accretion not just for the shareholders, but the main owner of those shares, who is the co founder Larry Ellison, now the world's wealthiest. And what do you make of the love being shown for the companies that can add to the infrastructure build out here?
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E
Yeah, and this has to do with the things that everybody is concerned about, which is the concentration in the S&P 500. It is made up of mega, mega tech stocks. And frankly, if you think about what it takes to build infrastructure, to build the picks and shovels, it takes a very, very big check. And these aren't things that venture companies can do. These aren't things that small companies can do and put on their balance sheet. These are things that big, big companies can do. So I think investors are pouring out their love for all these big companies that are building the infrastructure because down the line, we don't know when, but down the line the timeline we're expecting to see the software companies really innovate and develop and bring out more than proof of concept and utilize these hardware and infrastructure.
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F
I mean we need to see that because Salesforce down on the year Adobe has been suffering and we've got the earnings after the bell, Anna.
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E
Yeah, we do need to see it. And I think the investors need to sort of fine tune their expectations and maybe start with dividing out hardware from software. Hardware we already know. We're very, very excited. Software. I think investors need to be a little bit more patient. What I see down the line potentially is, and really down the line is that some of these venture companies will be successful in innovating and bringing out software that actually works and is reliable. And probably companies like Salesforce will end up acquiring them to incorporate them into their infrastructure.
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And we're jumping around a bit with you, but we're enjoying it. You have a great command of everything across hardware and software and is that not the world of technology? So I'm going to ask you about Micron. The market has a lot of enthusiasm for Micron and they're just extrapolating from everything that's happened so far. Micron reports earnings on September 23rd. It's a memory chip maker. And the market's logic seems to be, well, if every other part of the data center story is booming, Micron must be expanded, experiencing the same. Is that a typical behavior in markets that you see that kind of logic?
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You know, I think it is because it's sort of the tide that lifts all boats type of a mentality. It's not unlike to oh, interest rates are falling, the Fed is going to cut rates, let's buy everything. And so I think in tech, as long as AI is still a little bit nebulous in terms of what we're expecting, expecting, I think you can expect that. And that's why this train and tech train is a really hard thing to stop. Even going into the fall in what historically is a difficult year, difficult time for stock market.
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D
What happens next? This is my favorite question to end this segment quickly. Balance of the year in tech.
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Yeah, I think rates cutting. Yeah, it's great for markets to, but tech is going to go up anyway. I think the story is very, very strong. I do think that there is a risk still that we're not talking about necessarily because it's been a while since China and the negotiations on tariffs have been on the docket for discussion. It's been very, very quiet and in the background now, what happens in November with the Supreme Court, I think could be a risk. It's a binary risk. But I think, I don't think the tech market is, is without its hurdles going into the end of the year.
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Anna Rathbun of Granite and Advisory. It's so great to have you back on the show. We appreciate it. And coming up another day with an upsized ipo. We're going to be talking with Mike Cagney, co founder and executive chairman of blockchain based lender Figure the company goes public. This is Bloomberg Tech. Cybercriminals. Count on chaos. Count on Veeam to stop them fast. Partner with them and get 24. 7 ransomware support. From the first red flag to full recovery. Whatever the world throws at your data, it's all good. Learn more@veeam.com that's V E-E-A-M.com you can get the news whenever you want it with Bloomberg News now. I'm Amy Morris.
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The IPO market is proving strong this year. Take a look at some of the largest IPOs of 2025 so far. Blockchain based Figure is next up and the company and investors raised $787.5 million. Its shares are set to begin trading today. Figure Co founder and executive chairman Mike Cagney joins us from the Nasdaq. We've also got Tim Stanwick with us, host of Bloomberg Crypto as well. Mike, where we stand shares indicated to open at $34. You price the IPO at 25. But there's intense interest in figure for two reasons you've elected to go public so we want to understand the rationale. But there's also this mechanism where you as a founder or co founder retain a lot of control. Just explain the logic behind those two points.
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H
Sure. I think starting with the latter point, you know, obviously there's a lot of empirical research that shows that founder led companies outperform and it's important to keep that founder DNA within the business. You know I'm fortunate to have a partner with Mike Tannenbaum, a CEO where we've worked together before and we have a huge amount of synergy. But you know, obviously being able to drive product direction innovation for figures is very important for me and something I continue to add value for. I think you know, as it relates to the ipo. You know what we've done in a very different way is is used real world access or real world assets within blockchain. So we started originating loans on blockchain in 2018. We were one of the first entities to do that. We've done over $17 billion of loan origination on public chain, over $55 billion of transactions and we've been able to build, you know, a very profitable, rapidly growing company in the last four years, which have been incredibly difficult from a regulatory standpoint. So going public now in a situation where the public market is now opening up to the opportunity of blockchain, you know, I view it analogous to there's a magnificent 7 in web 2.0. I think there's going to be the equivalent in Web 3.0. I think we're one of those companies. And so we're very excited to be.
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F
Going public today at the Nasdaq. And the NASDAQ itself, Mike, is pushing towards those tokenized real world assets in the form of equities. How much of a tailwind is that going to be to the business? So how much you want to actually own that space?
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H
Yeah, I think equities is the next big area we want to lean in on. So obviously we've done an enormous amount of work in the private credit space and brought the benefits of blockchain into that ecosystem through liquidity and financing capabilities. But equities are the next thing we want to lean in to do. And I think one of the things that we're exploring is the ability for figure to do a second fast forward follow issuance of stock, but do it native to blockchain, not as a DTCC security. And that introduces some efficiencies and introduces some liquidity benefits. But I think most importantly for the buy side, it introduces the ability to control your stock for stock loan. And I think that's a huge differentiator over the way that we do things historically.
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F
And Mike, who do you want to be the owners by the tokenized equities or in the equity more broadly? Have you been looking to the real retail community or is this much more about institutional hold?
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H
I look, one of the things I really like about blockchain is it's a great leveling force. It's a democratization of financial services. And so, you know, we gave retail one of the largest allocations of the IPO I think that maybe anyone's ever done because of how important retail is to us. And so, you know, we view that as an integral part of the ecosystem that we're building out. That doesn't mean that the institutions aren't equally important. We have over 170 partners that use our tech to originate assets on chain and they're critical to our growth and success. But retail is very much right down the center of the area of focus for us.
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A
Mike, considering the success that you've had with on chain loan Origination and using AI to quickly approve these loans digitally. What's going to stop a traditional financial institution coming in and doing the same thing? What's your moat here?
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H
Yeah, I think the biggest moat is the liquidity that we've been able to build within the ecosystem, the marketplace that we have. We call it Figure Connect. And for the first time, we're allowing originators to be able to directly access capital outside of the GSEs, outside of Fannie and Freddie, where they can sell forward production, guarantee pricing, guarantee liquidity. That's a huge moat. I think that's going to become very pressing as the stablecoin act begins to take effect and you start to see deposit flight out of banks into coin. Banks are going to be stressed on the liability side. They're not going to have their balance sheet the way they historically have. And I think that's where blockchain and in particular decentralized finance can step in and fill that void. And so I don't see so much people trying to replicate the model, but leverage the economy of scale that's there and actually lean in and be part of it.
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A
No question, crypto assets have absolutely had.
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H
A moment over the last year.
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A
A big part of that has to do with this administration. But crypto winter is not too far into recent memory. What happens to figure during the next crypto winter? What do investors need to know about.
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H
How you suspect stand? Crypto is obviously integral to the workings of public blockchains, allows for the decentralization of the networks. We are very much a blockchain company, and so what we're doing is bringing the transactional efficiency, liquidity and financing benefits of blockchain into every asset. So we're somewhat immune from the volatility of the price of crypto and bitcoin in particular. You know, obviously we're involved in those markets, but we're a little more insulated and a little more exposed to traditional finance. But on a web 3 construction mike.
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F
You'Ve obviously created liquidity moment for you for employees. You're also raising funds potentially to make acquisitions where would be a useful addition.
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H
Certainly the blockchain space in the crypto space is generally subscale, so there's an enormous amount of consolidation. I like to view the raising of this capital analogous to last company. I raised $1 billion of capital, was the largest private raise ever done. I raised it from Softbank, and it ended up being an enormous competitive advantage for us in the balance sheet in terms of our ability to take risks that our competitors couldn't I view that analogous here as well. It's really having that balance sheet to lean in and do some really disruptive work in blockchain and crypto over the next several years. You said you want to do the second fast follow. You also said in the S1 that you plan to use some of the proceeds from this IPO for acquisitions.
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A
Specifically.
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H
What are those? We don't have any specific acquisition in line right now. We're looking at the market. We're always open to those conversations. Again, it's a stock subscale space, so there's an enormous amount of opportunity out there, but we're very focused on just core execution right now.
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F
Mike Cagney, so good to have you. Co founder executive chair for figure, along with our own Tim Stanwick. Thank you. And Ed, you got some breaking news.
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D
Yeah, we do have some breaking news. Crossing the Bloomberg Terminal. Hyundai has decided to delay the construction of a battery plant in Georgia following a raid by the United States States, which was part of a broader effort, you'll remember, to crack down on undocumented workers. Hyundai has communicated its decision to delay the construction of that Georgia plant. In an interview with Bloomberg, which was with the CEO Jose Munoz, he's basically saying that there is a plan still for the jv, which is between Hyundai and lg, to resume in two to three months and that the plant will need new workers to resume construction. But for now, that is the breaking news headline from Bloomberg. The Hyundai in a JV with LG has decided to delay construction in Georgia following that US Raid, which was on September the eighth.
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F
You'll remember, Carol, such an important geopolitical story ad.
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D
Apple getting hit with a pair of downgrades today at D.A. davidson and Philips Securities. The latest sign, a bit of caution toward the iPhone maker, which has sharply underperformed its large cap tech peers this year. It's off the back of its new iPhone lineup launch earlier this week. Bloomberg's consumer tech managing editor Mark Gurman is back and joins us for more. There's so much analysis that needs to be done on the lineup of the iPhone 17, its technological capabilities, but also its price points. And in your latest, you write simply that this might be Apple Apple getting us ready for the idea of a $2,000 handset. Would you just explain the reporting and argument you're making?
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C
Of course. So for the first time in the U.S. apple's offering a $2,000 tier of the iPhone. It's a niche device. It's the iPhone 17 Pro Max with two terabytes of storage. But the point I'm really making beyond the fact that there is now a $2,000 tier is that we are getting towards the era of $2000 phones anyways. Look at the pricing for this year's models. They did not raise the prices I think two reasons. One, Samsung and Google did it so it would be really hard for Apple to do so in any meaningful way to the tariffs really haven't kicked in for Apple yet so it would be a bad look for them to raise prices due to tariffs when the tariffs haven't even started. The reality is these phone tariffs will kick in at some point and so I'm not ruling out Apple raising prices later when the prices actually have to be adjusted for app to retain its margins. And that is probably going to bring the phone up a couple hundred bucks. Right. And then you look at next year. Next year they're going to release their first foldable. Samsung's foldable already costs over $2,000. The iPhone Air, which is essentially half the foldable, maybe less, that costs $1,000. So you can put pretty good money on the idea that Apple will be launching a base price $2,000 iPhone 12 months from now. And then you look beyond 2027, the 20th anniversary iPhone, the glass wing, it's all glass. It has translucency, much more advanced technologies, very similar concept to the thousand dollar iPhone 10. In 2017 you're going to see price increases there too. So maybe the $2,000 iPhone, because it's the highest tier 2 terabyte model this year may seem like a joke.
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F
Yeah.
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C
But it will happen in the next 12 to 24 months regardless.
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F
And maybe Mark, that's what analysts need to see to really start to get excited about the stock again from a profitability perspective. Because at the moment with these two downgrades, looking at Gil Luria saying basically we were left uninspired, it feels as though they haven't managed to garner much excitement this time round.
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C
You know, I rarely agree with the, with the Wall street analysts and I will, I will hold to that. I actually think that this year's iPhones are going to sell incredibly well. As I've said many times on this program and elsewhere, what really sells new iPhones is the design. The orange color, I like it. Some may find it ridiculous, but don't discount it. Don't discount Apple's marketing around that device and how new it is, the aluminum, unibody, you name it. The functionality may not be much different but it looks different and that's going to be good enough to spur sales. Don't forget there are a lot of people who have held on to their iPhones the past four or five years because the design hasn't changed much. Now it's finally changed. There's probably going to be some pent up demand.
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F
I'm all in on orange, particularly today. Mark Gurman, we appreciate it. Welcome back to Bloomberg Tech. Let's get to Adobe reporting its earnings after the closing bell today. Investors. While they have watched Adobe's shares get left behind in the air craze, maybe they've got little reason to be optimistic ahead of its range results. Bloomberg's tech reporter Matt Day is here to discuss. We are down 21% year to date. We're down 40% in terms of the last 12 months. Matt, it's all about competition. Is there any way it can prove that actually it's still got it?
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I
I think a lot's going to depend on the forecast. You know, Adobe's been trying to put AI all over its products. It's got a Firefly product it's invested a whole lot into that kind of smatters AI across its creative suite. But investors haven't seen, seen the results that they would have hoped for. You know, the last few quarters has been disappointing guidance after disappointing guidance. Looks like they're looking at flattish profitability this go round. So they'd have to definitely do something to, to change the narrative.
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D
We focus a lot on the stock performance. So like it's down 40% over the last year, 25% year to date. But if you park it to one to one moment, I feel like Adobe has not stopped talking about all of its AI stuff. Like do we understand in the newsroom the story about why Adobe's just not been able to convince anyone that all the attachments you talked about are actually paying off?
- [26:08]
I
Well, I think they've got to convince their buyers, you know, first off that this is worth, you know, sometimes shelling out extra for sometimes using, you know, it's largely a similar story to, to what we've seen with other AI tools in the enterprise, right. That like is it, is it something folks are piloting is something they're taking wholesale. And for now, you know, Adobe's facing a lot of inroads from, you know, not just a sort of freemium AI native upstarts, but also just chatbots. Right. Are the pure AI tools kind of taking, taking some of that creative demand and illustrations and all the like that Adobe depends on.
- [26:41]
F
And it's a global story we understand that, you know, the likes of Deep Sea can now bite dance. They got great image generations that are taking the world by storm across the field. When you're looking at the fundamentals, revenue isn't that bad. We're likely to post 9% growth, but the problem is it just keeps on shrinking in terms of growth.
- [26:59]
H
Yeah.
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I
And the other problem, I mean, if they forecast something like $250 million in recurring revenue from AI, you know, that's, that's not a ton on their enormous user base. Folks would like to see more to, to move the stock. So they still have a, have a whole lot to prove in terms of people actually pulling the shell out and willing to use these tools, you know, at the expense of, of a Canva or a Figma or a beauty.
- [27:18]
D
If anything, it just, it demonstrates us like. Earnings season continues. The next big tech name to go is Adobe. And that's why we're grateful for Bloomberg's Matt Day joining us here on Bloomberg Tech after the bell. We'll go back to it tomorrow.
- [27:29]
J
Okay.
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D
For the next episode of Bloomberg Tech Europe, Tom MacKenzie speaks exclusively with Demis Hassabis, the Nobel laureate responsible for all of Alphabet's core work and the co founder and CEO of Google DeepMind. The service is also on a mission to harness AI to quote, solve all disease through his work at the London based Alphabet subsidiary Isomorphic Labs. Here's a part of that conversation.
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J
Well, that was always the kind of holy grail in a way is to try and tackle cancer. But we've also done it for practical reasons as well because you know, the clinical aspects of that are favorable for new drugs because obviously the disease is so serious. And so there are a number of reasons we pick those two areas is also partly what we think is going, the platform is going to be able to do early on.
- [28:19]
H
There's the speed and efficiency that the platform brings to it. There's the quality as well. Of course, when we're thinking about preclinical research and AI drug discovery, usually using the old methods, you were talking what, three to six years? How, to what extent can you, can you cut that time frame down?
- [28:36]
J
I think in the fullness of time, when our platforms mature in the next couple of years, I'd like to see that cut down into a matter of months, months instead of years. That's what I think is possible, perhaps even faster than that. So kind of order of magnitude speed up, but you know, we'll see if that's possible. There's a lot of work we've got to do first. But, you know, initial, initial work, our initial signs are very promising.
- [28:57]
H
Back in March, you raised your first external funding, 600 million USD. And you're putting that to play in different parts to build out the platform. But also talent seems to be part of that. When you think about talent, when you think about people like Mark Zuckerberg signing checks for $200 million, what does that signal to you?
- [29:12]
J
Well, you know, that's a slightly different market, which is the pure sort of AGI market, let's say. But it's, and, you know, whether or not that's rational or not, I think organizations need to think through themselves. But I do think AI is going to be one of the biggest technologies, if not the biggest, that humanity will ever invent. So in some sense that is rational. But on the other hand, specifically with isomorphic, we have such a compelling mission of applying AI to, to improve human health. I mean, what better use of AI is there than that? And that's a really compelling, compelling proposition for both our investors and our, and our staff.
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F
You've got to catch the full conversation and it's in the next edition of Bloomberg Tech Europe. It's quite early though, Eastern Time, 1.30am, 6.30am in London, but you can catch it online too. Now. Coming up, we speak with Replica CEO. I'm John Massad about the startup's latest funding round and the excitement surrounding the Vibe coding space. This is Bloomberg Tech.
- [30:20]
D
AI coding startup Replit has a new valuation, $3 billion, nearly tripling its previous value. We broke the story Yesterday closed a $250 million funding round led by Prism Capital with American Express Ventures, Google's AI Futures Fund, and existing backers like Andreessen Horowitz and why Combinator? Amjad Massad, CEO and founder, joins us now. Something is happening in coding in particular. There is a lot of momentum behind you and a number of your peers. Why, you know, like the valuations, the headline. But, but what's the thing underneath that that's driving it?
- [30:57]
A
You know, since the dawn of computing, the, the Holy grail, the vision of, of using computers is the ability to program them. And there's been many attempts across the years and most recently with the no code and low code movement, but it really never achieved the potential. And today with AI, you can conjure up software by merely speaking them. And that's a, that's really a magical feeling and it's transforming all sorts of jobs, not just programming, but others as well.
- [31:28]
D
Can we do a vibe check and talk about Vibe Coding?
- [31:32]
H
Yeah.
- [31:32]
D
Are you in the camp of people that accept that Vibe coding was coined by Andre Karpathi earlier in the year? Yeah. And now it's a big thing. I think our audience would really appreciate understanding what is Vibe coding and why do people say things, things like that?
- [31:48]
A
Yeah, yeah. I mean, looking again at the history of computing, Grace hopper, in the 1950s, the inventor, the compiler talked about that what we need to do is get to a position where we're coding in English. And that was always the vision. And so Karpathi last year in his experience coding said, I'm starting to trust AI more. And as I'm coding, the AI is presenting the code. I'm just typing natural language. And I just accepted. So that was the sort of the coinage of the term. But obviously that's something that people have been doing since chat GPT. We started seeing it at Rapid. We released replit agents in September 2024 and it was the first coding agent on the market where you don't even have to look at the code. So, so you just type your prompt, you say, I want to build like a store front for my pet store. And it will like in a few minutes you'll start to see the website. You can say, I want to add login, I want to add my stripe integration, and boom, you have a website that's being built. So Vibe coding initially was coined by Karpathi for professionals saying that you can move a lot faster, you can iterate very quickly. But our take on it is really anyone can program and that's transformation forming. Not just software engineering. We have people, designers, product managers, finance people, operations people. Everyone is automating their jobs, building tools around their jobs, and that's what vive coding is doing.
- [33:21]
F
And so now with the progress in your agents from agent one, I'm down of just doing two minutes of work and now we're up to 200 minutes with your agent three, are you doing engineers, software designers out of a job?
- [33:35]
A
Well, I don't think so. I think we're empowering them. So if you look at some of our customers, what they're saying, for example, we have Duolingo and Zillow. Some of the are exciting customers in the enterprise. What they're telling us is they're cutting product development lifecycle by up to 50%. So previously when you want to produce a new feature, new product, what you would do, a product manager would sit down, write a very long document that we call a prd, will pass it to the designer. Designer takes that typically they misunderstand some aspect of it because it's a lot. And they produce a mock and then a mock goes to the engineer. They also understand some aspect of it. So there's a lot of communication issues there. So what they're doing right now is a product manager. Instead of going from tax to disposal design to, to program, they go straight to program. So they generate a prototype, they pass a prototype to the designer and the engineer and the iteration loop just goes much faster. So companies are a lot more productive, they're shipping faster. And that's really how we're transforming software in the enterprise.
- [34:40]
D
And I think the Bloomberg tech audience would love to learn a bit more about replit as a company. Yeah, you know, again, the headline is the tripling of the valuation. But how have you grown internally? What are the main priorities for you in terms of onboarding talent?
- [34:53]
A
You know, we set up this really big vision when we started the company in 2016. We said we're going to empower a billion people to be able to create software. And people or investors especially were laughing us out of the room. It's like, yeah, no, no way a billion people would want to learn how to code. But we kept talking about how AI is going to change things. We built a platform that removes all the complexity, complexity from creating software. And that is not just the code. That's, you know, creating the development environment, that's creating a database and managing it, that's deploying it. And so we spent 10 years, eight or nine years before the company took off commercially. You know, last year about this time, we're about $3 million in annual recurring revenue release Replit Agent 1 that sent us immediately to $9 million. But you know, by the end of the year we were about, you know, nine or $10 million. And then from there until July, we we 15 x $250 million error agent V2 made it so that you can go from the agent, you can give it an idea or work for two minutes and come back to you with questions or a little struggle. V2 could work for 20 minutes now, V3 could work for 200 minutes. And it's really becoming like a your own programmer. You don't have to go hire programmer off the markets. You can just go to rapid, put in your idea and replay will work like a teammate.
- [36:17]
F
But you are hiring and in many ways that's why you've raised the funds. Amjad, I'm going to make it personal, if you don't mind. But knowing your story of coming here to the United States back in, what was it, 2012, the fact you came to New York. I just spoke with the governor, Kathy Hochul of New York, who's worried about the access of talent for building technology. Technology here in New York. And I'm sure it's something you think about on the West Coast. Can you get the talent you need, particularly from outside of the United States?
- [36:44]
A
I think there's a lot of talent here in the United States still. I think the salaries are getting quite absurd because of the funding that's that's going in AI. But I think we should do obviously immigration is still going to be very important to getting the best and the brightest people from all over the world to America. But also there's a lot of local talent here and I think replit also mission is to teach people those skills. So replace always been used in schools and universities and it's the best time ever if you're a student to start learning how to make software is so easy. You can make your first piece of software in in a matter of like 15 to 20 minutes. And so I think we're going to see an explosion of talent and people coming on the market market being able to not just code but, but you know, use chat, GPT, use, you know, midjourney, be able to design, be able to create videos. I think it's an amazing time for a student to be building a broad set of skills. And I think, I don't think we're going to have a talent problem.
- [37:44]
F
Really appreciate that answer. Thank you. Amjad Massad, CEO and founder. Congratulations on the raise. File management company Box has unveiled a new set of agentic tools at its annual Block Works conference and includes a kind of operating system for agents and an AI cybersecurity tool. Let's get into it. Box CEO Aaron Levy, who joins us now. Aaron, what are you most excited about? Because there's a raft of things you're unveiling, whether it's about extracting data, whether it's about managing the raft of agents we're about to face. How are your consumers going to adopt it?
- [38:21]
B
Yes. So I think the thing we're most excited about is that Box we help companies manage their unstructured data. So if you think about 90% of data in the enterprise are things like financial documents, contracts, invoices, research materials, all of that data traditionally you've never been able to tap into at scale inside of an organization. You kind of create it, you store it, you may look at it again, but you never really are able to actually put it into a workflow flow or deeply understand what's inside that data. So we're announcing a set of capabilities with agents to let you actually finally tap into that data. The probably biggest part of the announcers are new workflow automation capability Box Automate, where you can design an end to end business process directly in box and then drop in agents at any step or multiple steps in that business process to let you go and bring automation to your unstructured workflows. So think about client onboarding at a bank, reviewing a contract at a law firm, being able to work through health care data. These are what you're going to be able to automate now at scale and.
- [39:23]
F
You'Re in like two thirds of the Fortune 500. I really want to get a sense check of how they're embracing these sorts of products, what effectiveness they're seeing. Because with that MIT report blowing up all the vibes around, whether or not this stuff is actually practically delivering on product activity, what are you seeing?
- [39:41]
B
Yeah, so we're seeing probably a different trend from from what I think showed up in that MIT report. That's obviously a very broad based survey across lots of different types of implementations of AI. And one thing actually in particular that was found in the MIT report was a very different success and failure rate based on if companies try and build out their own technology versus work with software vendors that have pre built capabilities to let them go and deploy against their data and workflows. So we're seeing a much higher success rate because within box customers already have their data, they already have security. Now we're introducing workflow capabilities that they can drop agents into, all of which provide the guardrails to make agents much more successful in their environment. So we're seeing very different results. But I think there are important lessons within that MIT survey that CIOs should be paying attention to as they go and deploy AI in their enterprise.
- [40:35]
D
Aaron Extract, Automate and SHIELD Pro, they kind of this package expansion for you. You're a $1 billion revenue a year company. Do you just kind of see immediate acceleration of that because you think it's what your customers are wanting right now?
- [40:51]
B
Yeah. So we introduced a new plan called Enterprise Advanced. And what Enterprise Advanced does is it has our most advanced AI capabilities, are Agent Builder now our new workflow capabilities with agents. And that's providing a really kind of great upgrade cycle from a revenue standpoint. But it's also making it very easy for our customers to actually get into these advanced capabilities in a seamless way. So we think it's a very good match for, again, driving a revenue sort of cycle for us that is driving a very healthy upgrade rate. We've seen some great results where we beat guidance and consensus. It's on our recent numbers and that's really driven by the enterprise advanced momentum that will only continue based on the announcements we're making today on our new set of features that we're launching.
- [41:36]
D
Aaron, I've really enjoyed following your posts on X. In recent months, your onstage appearances, I've been trying to think like, what is the Aaron Levy summary of what's happening in AI right now? And correct me if I'm wrong, I think your position is like, don't take your position in the world of software for granted. Everything is up for grabs. Would you say that's fair and that you apply that philosophy to Box as well?
- [41:59]
B
Yeah, I mean, I'm a, I'm certainly a student of history, you know, Andy Grove, obviously, only the paranoid survive. I sort of grew up in the tech industry at a point when that was just locked in on everybody. You had this new wave of disruptors go after many incumbent industries. We were one of those. And so by living and breathing that ourselves, I think we know how, how tenuous these positions can be if you don't adapt and if you don't move quickly. So the way we run Box today is, is we have this mindset of what would our company do if we started from scratch in 2025, how would we work internally, how would we operate and then most importantly, what value would we deliver for our customers and for us, we're just sitting on this incredible amount of data that our customers have entrusted us with that we can now help them bring all new use cases is to life with the power of AI. So we're incredibly excited. This is the most exciting I've ever been, you know, when, when, when we've been running Box. And this is more exciting than the founding days, just given how many things we can go and help customers with.
- [42:59]
D
Aaron Levy, co founder and CEO of Box. It's great to have you back here on Bloomberg Tech. Thank you so much. That does it for this edition of Bloomberg Tech. My goodness, September has been brutal and what a week it's been. Carrie.
- [43:12]
F
Relentless. I feel it might be. There is so much you've got to digest and catch up on and revisit with our podcast. You can find it on the timeline and on the terminal with Apple, Spotify and Iheart. This is Bloomberg Tech.