Loading summary
Transcript129 lines
- [00:00]
Superhuman Go Advertiser
The most effective people at work aren't working harder than everyone else. They're working smarter inside better systems. Superhuman Go from the makers of Grammarly is the AI assistant that works inside every tool you already use. Always ready, already aware of what you're working on. It's a teammate whose only job is to help you be better at yours. With GO working with you, you can show off what you do best. See what Superhuman Go can do@superhuman.com Amazon
- [00:30]
Amazon Health AI Advertiser
Health AI presents painful thoughts why did
- [00:35]
Ed Ludlow
I search the Internet for answers to
- [00:37]
Natalie Lung
my cold sore problem? Now I'm stuck down a rabbit hole
- [00:40]
Carol Massar
filled with images of alarmingly graphic sores
- [00:43]
Sarah Franklin
in various stages of ooze. I can clear my search history, but I can never unsee that.
- [00:52]
Amazon Health AI Advertiser
Don't go down the rabbit hole. Amazon Health AI gets you the right care fast. Healthcare just got less painful.
- [01:00]
Jacob Goldstein
This is Jacob Goldstein from what's yous Problem? Running a business is hard enough. Don't make it harder With a dozen apps that don't talk to each other. One for sales, another for inventory, a separate one for accounting. That's software overload. Odoo is the all in one platform that replaces them all. CRM, accounting, inventory, E Commerce, hr. Fully integrated, easy to use and built to grow with your business. Thousands have already made the switch. Why not you try Odoo for free at o d o o.com that's odoo.com
- [01:38]
Carol Massar
Bloomberg Audio Studios podcasts Radio News. Bloomberg Tech is live from the heart
- [01:51]
Jacob Goldstein
of Silicon Valley with Ed Ludlow in San Francisco.
- [01:59]
Ed Ludlow
This is Bloomberg Tech. Coming up, the jobs markets cooling with us employers unexpectedly cutting jobs in July and I may be part of the story. Plus tech earnings back in focus will be joined by the CEOs of Twilio, Lyft and DraftKings on their results and OpenAI's first consumer device will be an AI smart speaker that will look like a doughnut. We'll have the details. This is what markets look like this Friday. Happy Friday to you. It is a story about jobs. Data tech stocks pushing higher than is that 100, up 8.10of a percent, some outperformance in chips and the US 10 year yield. I picked the US 10 year yield because we saw a move across the curve. But why not 4.64% on the yield? We need to get into the numbers. Is there an AI story? Bloomberg International Economics and Policy Editor Mike McKee is with us. Start with the numbers themselves. Like what? What did the data show this morning in simple terms?
- [02:55]
Amazon Health AI Advertiser
Well, basically we lost jobs for the first time in many months, 23,000 jobs. Last time we lost some jobs was in February. Now why did that happen? A lot of it was government jobs, local government, education, Fed fell by 50,000. So it's not as bad as it looks on the surface. And unemployment fell to 4.1%. The reason for that is because the labor force shrunk again, 240,000 fewer people looking for work, which pushed unemployment down to 4.1%. If you're not looking for work, you're not unemployed. But the good news and the potential story here is that on the positive side of the jobs numbers, we saw a lot of hiring in the sectors that touch, especially in construction, for data centers, etc. Specialty contractors and non residential construction. Almost 20,000 jobs in total as demand for workers in those areas continues to really ramp up. And then you look at the manufacturing side for computers and semiconductors and they added jobs as well, we haven't seen in a number of other categories. So Ed, at this point it looks like AI is one of the few, few areas that did well last month and that doesn't show any signs of really slowing down the legend.
- [04:14]
Ed Ludlow
Mr. McConaughey, Bloomberg international economics and policy correspondent, Mike McKay, thank you very much. Let's stay with that jobs impact. Joining us is Sarah Franklin, Lattice CEO. And you know, Mike made the data so clear. Where there were gains were in industries that are seeing AI capital deployed, construction of data centers, for example. Your interpretation of those data points.
- [04:39]
Sarah Franklin
Our interpretation is that this isn't a crisis. This really is the recalibration. What you're seeing is the workforce changing and evolving as AI takes shape, not just in the tech sector, but also in manufacturing and construction. So this is really a recalibration that we've been anticipating.
- [05:00]
Ed Ludlow
How committed are companies big and small on your platform to sort of long term hiring? The bit that I'm struggling to understand is like in the short term we get monthly changes in numbers, but companies come up with plans for like this year, next year, all the time. Do you see any evidence that they're restructuring the composition of those workforces?
- [05:22]
Sarah Franklin
And we do, we see that companies are now through the chaos that we had the last several years where there wasn't predictability and now companies are planning the long term. They're understanding what AI is good for and what it's not. They understand it much better than we did a year ago. So you're seeing companies recalibrate their workforce. You're seeing forward deployed engineers, you're seeing people understand how I can help them. And people are also realizing that just because AI is here doesn't mean that the work isn't. You can't just lay off a lot of workers and the work go away. You still need the knowledge, you still need the trust that you have in your company and the culture. And you see companies saying, okay, we need our people, but we need to invest in their skills, not severance packages. We need to help them come along with this new trend. And so again, it's a recalibration of the workforce and it's a transformation that every company is making and they're planning longer term.
- [06:21]
Ed Ludlow
How competitive is compensation right now for existing workforce, but also if they are bringing people in in specific subsectors, the need to pay to get those best people.
- [06:34]
Sarah Franklin
Yeah, I mean, this is, this is a reality, is that people with the skills and demand will be able to command solid compensation. And as costs rise, so do wages need to as well. Well, and this is again a recalibration that you're seeing in the workforce. And it's a call to everyone to make sure that you are skilled in AI, that you understand and are proficient in the technology skills that companies are hiring for. And it's a tried and true thing that if there's skills that are in demand, companies will pay for them.
- [07:11]
Ed Ludlow
What's one thing that you're seeing through the lattice platform that surprised you since last year on the show?
- [07:18]
Sarah Franklin
So something that's surprised me is how a lot of companies are coming to us and saying, sarah, we just want to get back to business basics of how we manage our workforce, how we understand the performance of our workforce, and really that workforce intelligence. And so the basic habits that you need from all the way from your executive suite to your individual contributor to understand how people are performing, how how their work relates to the outcomes of a company. That is, what's the Back to basics is so powerful right now.
- [07:50]
Ed Ludlow
So you're using the word performance. What was so interesting this morning outside of sort of the technology context was how quickly the conversation goes to productivity. Right. When you get a set of jobs numbers, you know, all these different, maybe they're from fixed income, maybe they're in the equities market saying, oh, you know, we're starting to see AI driven productivity in the economy. What's the sort of workforce evidence of that?
- [08:14]
Sarah Franklin
Well, the workforce evidence is that what you're seeing is people are able to really do more, but in a way that is strategic to the business. It's, it's around helping I automate tasks that used to distract your time and attention and when you can put your time into the strategy really thinking of how you're going to grow because you don't shrink your way to growth. Editing this is every company is thinking how do I grow? How do I perform? How do I unlock the human potential? And Lattice helps all of our customers do that. And that's the frame of mind that all of the companies are in right now is how do we grow and how do we use our existing workforce, exist, invest in their skills, invest in how I can help them to grow.
- [08:57]
Ed Ludlow
That was so beautifully succinct. You know how I can automate a task that would be distracting or take up your time. If somebody's good at AI and is good at allowing AI to do that time consumption for them, are they able to then turn around and command higher compensation?
- [09:14]
Sarah Franklin
They are because they have the knowledge that is immediate, that can augment their skills and expertise. And that is how I mean even today the jobs reports information is something which AI helps me deeply understand everything that's going on. Nuance. I don't have to spend an hour doing research. I can get the information very quickly and that is how I can then show up with my perspectives as a CEO of a HR tech company to share what I'm seeing instead of spending my time just understanding all of the data. I can really help me do that and be strategic as a CEO.
- [09:53]
Ed Ludlow
Sarah Franklin of Lattice, thank you very much indeed. A big factor in the market. Space X shares are bouncing back even as a massive wave of insider stock hits the market. Yes, we're up almost 9% shares climbing Thursday, climbing Friday and Thursday in a multi day move as the lockup expired for as many as 912 million shares. That's worth roughly $100 billion but follows a 14% plunge Wednesday after Space X's first earnings report as a public company which showed higher than expected spending. One of the catalysts right now is Argus upgrading the stock to buy, pointing to a rapid payback from those investments. A $160 price target, but we remain pretty firmly below the IPO price of $135 a share set in June. Okay, coming up, earnings season continues. Twilio just beat analyst expectations for its second quarter through. Past them really. We have the CEO Cosmos Chandler with us next. This is Bloomberg Tech. Cloud communications platform Twilio reported second quarter earnings with strong results, beating analysts expectations on revenue and reporting record profit, profitability and free cash flow. Yes, that is a stock that's up 29% on track for its biggest jump since May of 2020. Tulio CEO Cosmos Chandler joins us here in the San Francisco studio. It's a big stock move.
- [11:34]
Cosmos Chandler
Yeah, I mean we had a great quarter. You know we, we were able to reaccelerate growth in the top line, grow our gross profits and turn in record free cash flow and profitability. I mean I think right now we're one of those kind of rare stocks that's able to demonstrate, you know, quite good financial characteristics, also reduce our stock based compensation and you know, kind of position ourselves as an AI winner.
- [11:58]
Ed Ludlow
So an AI winner. I find that really interesting. I've tried to talk to as many people as I can about is Twilio the predator or the prey in this, in this world. And actually the response was they are AI prey proof essentially you have done deals with 4500, 4500 carrier agreements. Right. That that is bulk messaging. Like that shows that you have a big place in this era.
- [12:24]
Cosmos Chandler
Well, I mean I think the way to think about it, it's actually 4800 right. Interconnections across 180 countries all over the world. Like that's a level of complex complexity that is regulated. It requires like physical contracts that actually have to get done and a very, very significant level of compliance that we make sure that our customers go through so that we protect consumers on the other side. And that complexity actually creates moat. And I wouldn't actually necessarily call ourselves predator or prey. I mean the way that we position ourselves is as the Switzerland of kind of this air. I mean we want to be infrastructure that any company can integrate to and be seamless based on what choices they've already made about.
- [13:09]
Ed Ludlow
You do have AI based or AI powered messaging tools for example. Those, those also show traction in the quarter gone.
- [13:16]
Cosmos Chandler
Yeah. I mean the interesting thing to be honest is that AI is a small part of the story, to be honest
- [13:22]
Ed Ludlow
for you right now, for us today.
- [13:24]
Cosmos Chandler
I mean it's certainly creating a little bit of tailwind, but in terms of its like, like material contribution to revenue, that is still relatively modest. And I think given the fact that we're relatively early innings in the AI story, there's a lot more tailwind coming here for the company.
- [13:39]
Ed Ludlow
Look at it another way. How many AI native companies I know people, some people say umbrege with that phrase, rely on Twilio.
- [13:46]
Cosmos Chandler
Thousands. That's the truth. But the reality also is that they are relatively small companies, contributors to revenue.
- [13:54]
David Rischer
Right.
- [13:54]
Cosmos Chandler
The reality on the other side of it is, is that enterprises like they're the ones spending the dollars. Right? So if you think about the contribution to revenue that's really coming from much larger companies, even though we're super excited to be able to work with all these really creative AI startups, Orion AI L Trippy. You know, we all the way through to, you know, a digital native like an Atlassian or you know, kind of even a leading home retailer that we pointed to in our most recent remarks, like that whole breadth of capabilities that we offer to any company on the planet. Like that's what gets me excited about the opportunity.
- [14:30]
Ed Ludlow
Again, the stock is up almost 30% and on track for its best day since May of 2020, but up now 76% year to date. So you're getting the credit for it. The big picture academic debate is what does the world look like where a consumer and individual interacts with a real agent. And there are lots of parts of your business where you have to think about that future. How do you think about it?
- [14:53]
Cosmos Chandler
I mean, actually I think that provides even more tailwind. Right. I mean, the future that we're literally planning for is one in which interactions are human to agent, human agent to human. That's going to require channels. We're also sort of making investments that anticipate a future future in which if you're interacting with an agent, you've got to be able to know who they are on the other side. And so we're starting to make investments in identity, for example, through the channels that we already provide to our customers and then using context as a means to be able to power this next era of agentic AI.
- [15:31]
Ed Ludlow
Prior to being CEO, you had other roles at Twilio. And I think a lot of people are looking at the bottom line and how structurally different the profit story for this company is. I think it's right to say that that was a focus for you in your tenure as CEO of the company.
- [15:48]
Cosmos Chandler
Yeah, I mean it's been a focus and I mean, I think we want to be known as people that are running the company well. We want to be financially disciplined. I think we have opportunities to make new investments, but frankly we don't have to start a new investment cycle. We can can take the cash flows that we're already generating, reinvest some of that back into the company, but also provide operating leverage back to our investor base.
- [16:10]
Ed Ludlow
We've had a very finance focused conversation and I'm going to end that way as well. You know, you have before you double digit organic growth, right. Kind of set out into the future. What's the biggest headwind or risk to that?
- [16:23]
Cosmos Chandler
I don't see a lot of headwinds kind of sitting here today. I mean, look, look, we always operate in a dynamic macroeconomic environment. I think the AI story, you know, it's a very long kind of secular tailwind. It's probably going to be bumpy from time to time. But as I kind of look through like the medium to long term, I see a lot of opportunities for the company and you know, we're ready for the moment. We're kind of hitting our stride and we're very, very excited about what we're building and what our customers are doing. And it's on us to anticipate, anticipate their next move.
- [16:55]
Ed Ludlow
Twilio CEO Cosmos ship China with the stock up more than 30% now. Thank you very much. Let's get over to New York where Bloomberg's your higher Anand is standing by with some news. You hear.
- [17:06]
Jason Schreier
Hi Ed.
- [17:06]
Anand
It's time now for Talking tech. First up, SK Hynix is leading a record $83 billion in share sales by Asian firms, making July the highest ever monthly haul for firms in the Asia Pacific region region. And the South Korean company isn't slowing down with plans to spend $38 billion to expand its chipmaking facilities in the country. Plus, AMD has plans to purchase Canadian startup Talos to build new AI chips, expanding the company's chip offerings as it tries to differentiate itself from competitor Nvidia Talos. This technology is used in chips that handle inference and said that hard wiring AI models and into chips can create more efficient machinery and moonshots. Kimmy K3 is the latest AI model to escape a sandbox in a third party test. That's according to research firm frontier security. Kimmy K3 joins joins the likes of models from Anthropic, OpenAI and Meta, adding to concerns on how well these AI companies can control their technology.
- [18:10]
Ed Ludlow
Ed, thank you Hira and happy Friday Friday to you. Now coming up, look at shares of Take 2 up around 3 to 4% after the company reported earnings with lies on the anticipated release of Grand Theft Auto 6. Discuss that next. This is Bloomberg Tech.
- [18:35]
Superhuman Go Advertiser
The people who seem to get more done than everyone else. The not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re explaining context, hunting for files. Those aren't small inefficiencies. They're hours wasted every week. Superhuman Go gives you those hours back from the makers of Grammarly. Go is an AI assistant that sits inside every tab and tool you already use, always available and already aware of what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting. Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward with Go working with you. You can show off what you do best. Superhuman Go find out more@superhuman.com that's superhuman.com
- [19:42]
Carol Massar
this is the Bloomberg Tech Minute, brought to you by ChatGPT. Now with ChatGPT work, I'm Carol Massar. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory and seasonal trends, while also continuously tracking competitors fares and capacity changes to update prices and in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off peak and lower demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started@chatgpt.com today by selecting Work Mode, available on plus and Pro plans.
- [20:57]
Amazon Health AI Advertiser
Amazon Health AI presents painful thoughts.
- [21:01]
Ed Ludlow
I I can't stop scratching my downtown. Yeah, but I'm not itching to go downtown and tell a receptionist I'm here
- [21:10]
Jacob Goldstein
to talk about my downtown.
- [21:13]
Ed Ludlow
Some things you'd rather type than say out loud.
- [21:16]
Amazon Health AI Advertiser
There's no question too embarrassing for Amazon Health AI. Chat your symptoms and get virtual care 24. 7 Health care just got less painful.
- [21:34]
Ed Ludlow
OpenAI's first consumer device will look like a doughnut, according to sources. The smart speakers designed to be carried around the home with one hand and is slated to be released next year. The device will be positioned as an AI first computer that can help users get things done and will compete with moving and be complete with moving parts that help give it personality and is likely to cost more than $300. Those sources say don't have a picture of it for you. I'm sure we will see one soon. Look at shares of Take Two Interactive. Up more than 4% now. The company posted first quarter bookings beating estimates at 1.39 billion. But Take Two kept its full year forecast below Wall street expectations and trimmed its profit outlook. And of course all eyes remain on the biggest release in the pipeline, Grand Theft Auto 6. Joining us is Bloomberg's Jason Schreier. I honestly kind of feel like we can park the the performance in the quarter gone and the kind of financial outlook it is all about gta. You have been talking to the company about that. They are signaling that the, the pre demand tells us something that this is hasn't happened before.
- [22:54]
Jason Schreier
Yeah, investors, it's funny these, these bookings and even on revenue numbers, beating missing estimates doesn't really matter. The number that investors really want to know is the number of preorders that GTA 6 has right now. And Take 2 is not saying them. Take 2 has said that the number is unprecedented and exceptional and astounding. Those are all words the CEO Strauss Zellnek used. Yes, but they're not saying the exact numbers. So all eyes are on November 19 for the launch day and the final sales figure.
- [23:28]
Ed Ludlow
I guess the idea is that the world will have an expectation of what that number would be because we have a really good sense of what the prior GTA titles were able to achieve.
- [23:37]
Jason Schreier
Right.
- [23:37]
Ed Ludlow
We know the date, but give us the kind of back story of why it's taken us so long to get to GTA 6.
- [23:45]
Jason Schreier
Yeah, a couple of things. So GTA 5, the last game in the series, came out in 2013 and has since sold 230 million copies. It did really well on launch day, but a lot of those sales have come in the year since then. It was, it was really a long tail, an unprecedented long tail for that game. And so the numbers that we're expecting here are going to be exponentially higher than the numbers we saw from GTA 5 on launch day because the series has gotten all that much bigger since then. As for why it's taken so long, this game has been in development for about eight years since the since the release of red Dead Redemption 2, which was Rockstar's previous game. And it's big, it's fast, it's got a lot going on. We'll find out more soon. And one one another kind of date to watch if you're interested in take two shares is August 27th, which is when Rockstar and take two have said they're going to show the first extended look at GTA 6, meaning what it's actually going to look like and feel like to play play the game rather than the kind of cinematic trailers that they've shown so far. And that's actually, it's unprecedented. Another unprecedented thing is that it's going to be a Netflix exclusive. The gameplay is going to be released on Netflix six hours before it's released rest of the Internet.
- [25:03]
Ed Ludlow
Bloomberg's Jason Schreier with all things GTA 6, thank you very much indeed. One other company out with earnings is Airbnb and shares jumping by the most in 16 months after the company. The company boosted its annual revenue forecast for a second time this year, citing robust demand in the US and also in Europe. Bloomberg's Natalie Lung is here. What do we need to know?
- [25:24]
Olivia Carville
Yes.
- [25:24]
Natalie Lung
So Airbnb is seeing this really strong demand, especially from North America Group travel is really strong. People are booking entire homes to go travel with friends. And you know, it's really contributing to this growth optimism that Airbnb is seeing as kind of a different story from last year where they would always call out that North America is sort of the drag on the business. And another thing to call out is, you know, this kind of optimism would bode well for a lot of Airbnb's new business initiatives like a la carte services like in home beauty appointments and grocery stocking as well as their new, you know, hotel booking initiative as well.
- [26:06]
Ed Ludlow
So that's my question. What is Airbnb's technology story? Right, because you have to look past it being a short term rental story right now.
- [26:14]
Natalie Lung
Yeah. So CEO Brian Chesky is trying to turn his company into an AI native company, using AI to help people discover homes more quickly, make a decision on the reservation more quickly and basically convert them into bookers. So upcoming features later this year year include AI search will be which will be more conversational with more visual elements than your traditional chat bot. The other thing is like an AI home comparison to that they're testing. So that's what we're going to expect from them in the coming year.
- [26:47]
Ed Ludlow
Bloomberg's Nasty Lung. Thank you very much. Coming up, Lyft CEO David Rischer joins us to discuss his company's earnings and its global expansion efforts. That's next. This is what markets look like. There has been a sharp slowdown in the US Jobs market. Technology stocks are higher. There is outperformance in semiconductors, Bond yields are falling. And it's all about the idea that, that, that interpretation from the market reflects that the Fed will not be forced to raise interest rates anytime soon. Pretty good economic sum. It's half time. This is San Francisco and Bloomberg Tech. Welcome back to Bloomberg Tech. It's a Friday where markets are being driven by economic data. Technology stocks are higher. We're up 1% on the NASDAQ 100. Some outperformance in chip stocks, but very simply, there was a slowdown in the US Jobs market. Not only are stocks higher, yields are coming down on Treasuries. And the interpretation is that the Federal Reserve is not under sort of immense pressure to raise interest rates any time soon. That is what's kind of happening in the here and now of the market. There are bigger and longer term considerations. BlackRock sought to raise debt financing for a metadata center. But there was one type of investor the asset management giant was trying to avoid, those looking for a quick profit. So it focused on real money accounts, pension funds, insurance funds to avoid fast trading investors who can quickly tank a bond's secondary market performance. And so far the strategy looks to be working. Bloomberg's credit reporter Tesla Vos is here to explain why there is a lot happening. Basically supply has exploded and issuers have tried to reassure the market that supply is not going to overwhelm it. And in the middle, blackrock's trying to manage that environment.
- [28:43]
Tesla Vos
It's exactly that. I mean, we were here last month talking about how these bonds underperform in the secondary market because frankly speaking, people are concerned. People concern that so much bonds are going to come into the market, they won't be able to absorb that many. And what banks are trying to do now, obviously you cannot take away the build up. That's the future. The market has actually agreed with that. So that has to be financed somehow. But what the banks are trying to do do is trying to take away the risks out of the market as much as they can. As you mentioned, fast money accounts, those who like buy the bonds, sell them straight away for a quick profit. We've seen in previous months, they come to the market and the bond price tanks straight away. You have to take them out of the market. And of course you have reassurance by, by companies saying, yes, we're going to raise $25 billion today, but won't come back until the end of the year. As we saw yesterday with Alphabet.
- [29:33]
Ed Ludlow
Yeah, we covered Alphabet. You know, recently there have been several 20, $25 billion bond deals, right. I think about Amazon, Nvidia, Space X. The main point is that there has been poor trading after that issuance. But the market still keeps going.
- [29:50]
Tesla Vos
Indeed it keeps going, but the concerns are brewing a lot. So Barclays, the big British bank, reached out to 300 investors and they ask him, what do you believe is going to drive risk premiums across bonds? Of the hyperscalers, 60% of them said supply cadence. What they meant by that is the pace of supply. Bring too many bonds and the market is going to go berserk. 25%, which is like a distant second, was whether these the investment is going to play out. So the two major risks in the market right now that investors have to digest, one is whether the AI problem is going to keep, which is a bit of a longer term concern. The main concern right now as we speak is what people said, the supply and how you manage that. And this is what banks are trying to do, manage it better.
- [30:39]
Ed Ludlow
This is the story that everyone's been reading about this morning. Bloomberg's Tesla spouses, thank you very much indeed. Back to tech earnings. Shares of Lift higher. The company reported growing demand for premium rides. Also strength in European markets. Super interesting in kind of the global expansion story. Lyft CEO David Rischer is with us. There is a very specific data point actually that I'd like to start on and that is that in markets specifically San Francisco, where you have Lyft rides and Waymo rides, you said San Francisco grew 20% year on year.
- [31:12]
David Rischer
That's right.
- [31:13]
Ed Ludlow
Explain the causal or casual relationship within that data point.
- [31:18]
David Rischer
Yeah. So you know our industry has gone through a big transformation and it is the sort of bringing on of these self driving vehicles. Waymo of course is the market leader in that anytime you see a transformation like this, one or two things can happen. You can either see sort of a substitution or you can see a market expansion. And in this case we're seeing a market expansion. And it's not that surprising. When people take self driving cars, they tend to like them a lot. They're very reliable product, they're a nice private product. So you feel like you could have a private conversation but at the same time it doesn't seem to take away from, from people's interest in driven being driven by humans who can help with luggage or have a good conversation. So it really is accretive.
- [31:53]
Ed Ludlow
This is a micro case study. It's one market, San Francisco. But you know, the questions are, is Lyft gaining market share from Waymo in this city or is it that this is an issue of supply? So because somebody cannot get into a Waymo, within a reasonable time frame, they go to the lift app. Yeah, yeah, which, which is happening.
- [32:12]
David Rischer
I probably both honestly probably so interesting. Yeah. And I think this is such an interesting thing that's going to play out. My expectation over time is what will dominate will be the market expansion. And again, the reason is sort of simple. You have a cool new product coming onto an existing platform and what we believe the hybrid network, which is, you know, human driven cars plus EVs really kind of creates the best possible outcome for everyone. But we'll, you know, we'll have to see how that works.
- [32:35]
Ed Ludlow
I think that you and I have discussed on several occasions the idea that the introduction of the robotaxi and maturity of the market expands the overall TAM for ride hailing. Just recap that that argument.
- [32:48]
David Rischer
I think that's exactly it. So I mean look, people take just in the United States about 160 billion rides a year in their private cars. Okay. Today we deliver a billion, maybe the other guys deliver 2 billion. So it's called that 3 billion out of 160 billion. And it's a good experience. You're sitting in the back seat, you're able to text, you're able to have your own space. What holds it back? Well, for whatever reason, some people might want, not want to be driven by another driver or someone else in the car. This takes that away. I'll tell you a very specific story. So I was just with an old friend of mine, I just ran into the airport. Her son had a tragic, tragic accident a couple of years ago. Absolutely devastating physical accident. He's in rehabilitation. For him, the idea of getting in a self driving car where the doors open wide, maybe there's not even a driver there, not there's anything wrong with that, but it just gives him more space to sort of be in his own zone.
- [33:31]
Ed Ludlow
Is actually going to be technology and an engineering story. Design story.
- [33:36]
David Rischer
It's a design story. Exactly. And so, so anyway, I'm very optimistic about this. And then when I look at our capabilities around fleet management and you know, kind of matching supply and demand, I get really excited about the future.
- [33:46]
Ed Ludlow
Lyft is let's, let's go back to the core business and earnings. But Lyft is pushing outside the United States. You know, every time you've been on the show over the last year, there's been an a development on that front. But what did we actually learn through your earnings about how you're growing ex usa?
- [34:02]
David Rischer
So here's what's really cool. So Lyft was Primarily a domestic company up until about a year ago, maybe call it 18 months ago. Then we started to expand in Canada. That's gone very well now we acquired a company called freenow and a couple of other smaller companies overseas. Okay, what's happened since then? We're in the process of transforming ourself to a truly global company. Some of that is internal stuff, back of the house, multi currency gdpr, all these sorts of things. But we're also beginning to introduce new functionality to customers. So I was just in Barcelona a couple of weeks ago. I was very lucky to be there. I got a chance to check out on our beta app the ability to use the Lyft app, not a new app, but the Lyft app to, to hail local, supply local taxi cab in Barcelona. I did it four times, work flawlessly. So good because I don't have to do a different app. I already know the user interface and so forth and so on.
- [34:44]
Jason Schreier
Free.
- [34:45]
David Rischer
Now, the company we acquired, they're also growing now too because of some of the innovation and the technology we've been able to add to their stack. So it's look, our service levels are really good and I love that about our product and now we can take that to a more global audience and hopefully continue to grow as a result.
- [34:59]
Ed Ludlow
How, you know, it could be Europe, Spain specifically. But how are those markets different to United States? How does the consumer behave differently?
- [35:07]
David Rischer
You know, there are subtle differences. I mean a very significant, I guess difference, not subtle, is the role of the taxicab in a lot of Europe is very significant, significant, you know, this
- [35:15]
Ed Ludlow
culturally entrenched in many economies in Europe as an example, very much so.
- [35:19]
David Rischer
And unlike maybe in New York where people almost begrudgingly take a cab, for example, in a place like Spain and
- [35:26]
Ed Ludlow
certainly going to have New Yorkers phoning into this program now.
- [35:28]
David Rischer
And I get that and I understand well, and New Yorkers have opinions about their taxi cabs, right? But in Spain it tends to be almost a career. You know, you get in the car and it's probably someone who's been doing it for many years, maybe his father did it as well. So certainly in London everyone knows the knowledge. I mean, it's all sort of incredible things. So that's a really significant difference. And for us, it favors us because free now is strong in taxis and the sort of double click there is because taxes seem to be quite regulated. The relationship that that company and our company has with governments tends to be quite strong. Which back to the AV question really matters a lot. Ab is new technology. And for a lot of governments it feels maybe a little bit intense, intimidating, and we can help there. So it's a, it's a really nice sort of set of circumstances that tends to sort of favor our business in
- [36:13]
Ed Ludlow
markets outside of the United States. Uber is already there in some cases. Bolt, etc. How are you going to make Lyft different from a technology perspective or just a product perspective?
- [36:23]
David Rischer
Yeah. So stay tuned on. This is actually a very, very live conversation we're having internally. I can use some of the examples of the US Maybe and give you
- [36:31]
Ed Ludlow
a little sense these.
- [36:32]
David Rischer
So in the US We've really redoubled our innovation. And you know, some of these products, Women Plus Connect. I just heard that we've given over 175 million rides between women and women in the US over the last couple of years. Lift teens, lift silver. This is real innovation. We're hoping to bring some of that innovation to the European space for sure. And then there's also a lot of conversation around, you know, the, let's say the reputation of those guys in Europe isn't necessarily super. People don't necessarily necessarily love the company. I'll just say it that way. And we hope we bring some joy to the conversation as well.
- [37:02]
Ed Ludlow
Internally, where is your biggest focus on the technology side? What are the types of people you're trying to bring in and, and things you're building, rebuilding?
- [37:10]
David Rischer
Yeah.
- [37:10]
Ed Ludlow
Code, migration, Literally anything.
- [37:12]
David Rischer
Yeah, for sure. So many interesting things. So I'll give you a couple of examples. Some of it's basic, some of it's more far reaching. Here's the basic thing. We now pick people up on average. So 75% of the time we will pick you up either the same or faster than our big competitor. Why is that kind of a big deal? Because our market share is smaller. So doing that reliably 24 hours a day, seven days a week, because people are busy, they want to get to where they are. That's an awesome accomplishment. I'm hugely proud of our Marketplace team for accomplishing that. And then bigger picture, I'm really excited about lifting one of our newest products that allows teens to get in and get constant messaging back to their parents to make sure the parents know that they, they're safe and sound. It's just a good. I look at this as almost a generational thing. A new car now costs like 800 bucks. 800 bucks a month, 50,000 at least, basically on a lease basis, plus maintenance, plus gas, all these sorts of things. Lyft is just a better answer for a lot of people. And so I'm sort of excited when I look two, three, four, five years out at some of the kind of, you know, teen innovation now because I think that'll help change a whole generation.
- [38:13]
Ed Ludlow
Lift CEO David Richard, thank you very much for coming in. Thank you being back on the show. Coming up, sports betting platform DraftKings is up next in the earnings conversation. Drafting CEO and co founder Jason Robbins is joining us. This is Bloomberg Tech.
- [38:33]
Jacob Goldstein
With Cricket Wireless. You can count on reliable nationwide 5G because Cricket Wireless is on the AT&T network, which means you can start listening to that new album that just dropped at home while running errands and at the GY without any hiccups. Find plans with unlimited data for every lifestyle and price point. Switch to Cricket today.
- [38:55]
Carol Massar
This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work, I'm Carol Massar. Globe trotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seed prices more quickly and by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory and seasonal trends, while also continuously tracking competitors fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes and as airlines pack flights closer to capacity, but may also result in lower fares on off peak and lower demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started@chatgpt.com today by selecting work mode available on plus and Pro plans.
- [40:10]
Amazon Health AI Advertiser
Amazon Pharmacy Presents Painful Thoughts of course
- [40:15]
Cosmos Chandler
I see my co worker in light at the pharmacy. Can you tell I'm picking up prescription hemorrhoid cream?
- [40:21]
Jacob Goldstein
I'm probably standing weird.
- [40:23]
Ed Ludlow
Why is he smiling?
- [40:25]
Cosmos Chandler
He knows he's going to call me Hemorrhoid Lloyd tomorrow.
- [40:28]
Ed Ludlow
I know it.
- [40:30]
Cosmos Chandler
I got to quit my job.
- [40:31]
Amazon Health AI Advertiser
Next time avoid awkward conversations and get fast free delivery with Amazon Pharmacy. Health care just got less painful.
- [40:41]
Ed Ludlow
Okay, ending the week with more tech earnings. DraftKings reported disappointing second quarter earnings amidst growing competition from new prediction market players like Kalshee, but there's some post momentum post World cup setting up a pretty strong back half. Stock up 7 1/2% on track for its best day since June 26th. DraftKings CEO and co founder Jason Robbins joins us. It's interesting, right initially that was the reaction, disappointment, second quarter earnings, there were favorable sports outcomes, there was promotional spending. And then this morning everyone was like, actually, you know what, the World cup speed seems to have some tailwind with it.
- [41:17]
Jason Robbins
Well, I think that really what you're seeing is that after having a little time to digest and hear some of the context, people understand how Strong a position DraftKings is in from a business perspective. Right now our core business is on track to do about $1 billion in adjusted EBITDA this year. Just a few years ago we were losing money in that business. Now it's a very strong cash flow generator for us and we see really strong traction on predictions. Enormous growth over the last month or two and the best time of year is about to come with, you know, the fall season and NFL and everything that that brings.
- [41:52]
Ed Ludlow
Okay, bear with me. But apparently people were betting on whether you would say Kalshee on the earnings call. Prediction markets are a factor. Just react to that, Jason, please.
- [42:05]
Jason Robbins
Well, I, you know, making trades on, on whether someone is going to say something on an earnings call probably isn't something that I think should be out there in my opinion, but nevertheless, I understand it is. I didn't know that though. I didn't read it. I don't remember. I don't think I said.
- [42:22]
Ed Ludlow
No, no.
- [42:24]
Jason Robbins
Hopefully not too many people took the positive side of that one.
- [42:29]
Ed Ludlow
Jason, can you, can you just explain the World cup, how it manifested for DraftKings, the behavior of people that went to DraftKings during it and whether there is some momentum carried out of it for the second half of this year.
- [42:44]
Jason Robbins
I mean World cup on pretty much every metric that we look at exceeded our expectations. We acquired more customers. That was both true of predictions but also true of our online sports betting business. We are way better than we expected from an acquisition acquisition standpoint. We ended up having much more efficient acquisition to our CACs were 25% lower than we expected. Total engagement was big. We had a really strong increase in mupps as we published in our report. Also saw a really strong post World cup engagement. Probably the most exciting thing to me because you know, a lot of people are probably thinking us included this World cup audience, are they going to stick around or is it sort of come, you know, bet on the World cup trade on the World cup and done not at all the case July we actually saw a 20% handle increase after the World cup ended, which is enormous number compared to where we were going into it. So you're absolutely right. I think a lot of momentum coming out of the World cup, right going into our most important time of year. So it couldn't have been timed better.
- [43:43]
Ed Ludlow
Jason, very quickly those were people that went to DraftKings maybe for the first time in the World cup and then stayed.
- [43:49]
Jason Robbins
A lot of them were. A lot of them were people that had played previously and activated and continued to play afterwards. Remember, after NFL ends, sometimes a lot of customers go dormant. So these big moments are really great opportunities to get people to engage with the product again. And you never know if they're going to drop off or not. We see that sometimes or if they're going to continue. And at least for the World cup audience, it seems like both the new customers and the ones who reactivate are all continuing to play through July. And I think coming into August and September, when we have our most busy time of year, it's going to only continue.
- [44:23]
Ed Ludlow
Jason, in prediction markets, the field of players seem very focused on how they communicate with the under 21 category. What is DraftKings policy and approach basically to marketing to that demographic quickly?
- [44:39]
Jason Robbins
Well, I think this is an important distinction, distinction between DraftKings and some of these other companies out there. We are not, as you see some of them doing marketing that you can pay your rent money and marketing to college campuses, on fraternities and things like that. We are focusing on marketing to adults and positioning this as an entertainment product, which I think is the right way to do it. And you know, listen, those are things that right now are getting a little bit of scrutiny and I think eventually they'll get reined in, but that's not up to us. But I do think it's something that we feel like we are really, you know, as a longtime trusted brand that's been out there for a long time and plays the long game and really understands, you know, it's not as much as it might get you short term volumes. That's not what you want to be doing marketing on college campuses and things like that.
- [45:27]
Ed Ludlow
DraftKings CEO Jason Robbins, thank you very much for your time on Bloomberg tech. Coming up, TikTok tweaked its algorithm in 2021 to stop users from being overwhelmed with harmful content. But it didn't roll out the safer version to everyone. We'll have that story next. This is Bloomberg Tech. The judge in New Mexico has ordered matter to pay over $500 million and make changes to the way young people use its platforms following a landmark child safety case. The fine, which will be paid to a fund to address damages, is in addition to a $375 million civil penalty from the case. Matter says it disagrees with the ruling and will appeal. Another story on the growing concerns about social media and mental health. In 2021, Tick Tock tweaked its algorithm to stop users from being overwhelmed with harmful content. But not every user got the update. According to an internal document, to see if the change might reduce the app's stickiness. The company kept 10% of users, or about 15 million people, on the old version. That control group included 16 year old Chase NASCAR. TikTok's algorithm pushed him thousands of videos about suicide, sadness and loneliness right up until he took his own life. This is a difficult story, but it's an important story that Bloomberg's Olivia Carville reported. Reported for Bloomberg Businessweek, and Olivia is with us now. Take, take us inside the reporting. I outlined the basics of the back story, but it is both a technology story on the algorithm side and a policy decision by the company.
- [47:17]
Olivia Carville
That's right, Ed. I mean, to understand the story you have to understand the timeline. And it really begins back in February of 2022 when a 16 year old boy named Chase NASCAR died by suicide in Long Island. After that, his mum was trying to understand what had happened to Chase because he had no mental health issues, he'd never been diagnosed with depression, he had a big group of friends, he was an honours student at school, happy, friendly, bubbly, energetic. So she wanted to understand what had happened to Chase and she went searching for clues on social media. When she gained access to his TikTok account, she was shocked at what she saw, which was a nonstop stream of really sad videos, many of them encouraging suicide. So a year after Chase's death, I write a story for BusinessWeek about his account and the algorithm was feeding him. And when I reached out to the company for comment, it resulted in this internal review that we're only just understanding now. This was an internal confidential document that outlines how the company essentially analyzed Chase's watch history in extraordinary detail, what he saw in the weeks, days and hours leading up to his death. And it confirmed from the company's perspective that he fell into a filter bubble. This is like an online echo chamber of sad content and it tells us why that happened, which is because TikTok was running an expensive experiment on filter bubble prevention strategies and it withheld a safety feature from 15 million US users and Chase was included in that control group.
- [48:56]
Ed Ludlow
Find this difficult sorry Olivia, to still be explicit on TikTok's response insofar as like what is it they've changed okay, in response to the report and officially what it is they gave you in response response to the report.
- [49:13]
Olivia Carville
So within within this review, the company's own employees talk about how the control group was too big. It shouldn't have been set at 10%. It should reduce the control group down to 1% of users and reduce the length of time they would be exposed to this kind of non stop content about problematic or harmful issues like extreme dieting or in Chase's case, suicide and depression. So they wanted to reduce not only the size of the control group but also the length of exposure. So it went from half a year to a full year down to just seven days and from 10% of users or 15 million people down to just 1% of users. And they made that change right around when they understood what had happened to Chase's account and that is outlined in the document. Document in response to this story, the company did provide a written statement saying that they are deeply committed to the safety and wellbeing of users and their hearts break for any family that's experienced a tragic loss. They pointed to other safety features they've rolled out to try and protect teenagers.
- [50:20]
Ed Ludlow
Bloomberg's Olivia Carville it is a must read, a difficult read in Bloomberg businessweek. Thank you very much. That does it for this edition of Bloomberg 10 Tech. Do not forget to check out the podcast recap all of the reporting and conversations we've had today, this Friday, but also throughout the week. From San Francisco, this is Bloomberg Tech.
- [50:44]
Carol Massar
Health care doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make healthcare work as one for everyone.
- [51:11]
Jacob Goldstein
Learn more@business optum.com Some people use ChatGPT to answer questions. Others use it to get real work done. With ChatGPT work, you bring the goal plus real inputs like briefs, notes, files, feedback, data and project plans. It can help turn them into an analysis, tracker, deck, outline, prototype or workflow you can review and keep shaping. You stay in control, giving direction and choosing the final output. Put Chatgpt to work on your most ambitious ideas and projects. Get started@chatgpt.com by selecting work mode available on plus and Pro plans.
- [51:46]
Amazon Health AI Advertiser
Hey everyone, it's Cal Penn. I'm inviting you to join the best sounding book club you've ever heard with my podcast, Hearsay, The Audible and iHeart Audiobook Club. Every episode, I nerd out with amazing guests and dive into the best new
- [52:00]
Ed Ludlow
audiobooks available on Audible.
- [52:02]
Amazon Health AI Advertiser
It's the book club for your ears. Listen to Earsay, the Audible and iHeart audiobook club on the iHeartradio app or wherever you get your podcasts.