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- [00:01]
Ryan Reynolds
For every six Chinese people, there's a Ping an customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
- [00:13]
Podcast Host
This is the Technology Empowered Growth at Ping an podcast. In our latest episode, Ping an is.
- [00:18]
Caroline Hyde
Utilizing technology to provide integrated and personalized 24.
- [00:21]
Podcast Host
7 support for China's rapidly growing elderly population. Now available on Spotify, Apple Podcast and Ping An's website.
- [00:30]
Express Employment Representative
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Public.com Advertiser
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Express Employment Representative
But having the right staff in place can be when you choose Express employment.
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Public.com Advertiser
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Express Employment Representative
Contract workforce, go to expresspros.com solve your workforce challenges when you choose Express to support your hiring in a variety of roles, including two of our biggest areas, manufacturing and logistics, visit ExpressPros.com today. That's ExpressPros.com.
- [01:27]
Podcast Host
Bloomberg Audio Studios podcasts Radio News. Bloomberg Tech is live from coast to.
- [01:39]
Caroline Hyde
Coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech coming up in video Sell off Softbank isn't the only company exiting the AI MVP as a shareholder. Peter Thiel's hedge fund offloads its entire position details in a 13F filing. Plus the crypto market sell off shows no sign of easing and and some of the riskiest tokens, they're bearing the brunt of it. And Amazon is seeking to raise about $12 billion through a debt offering amid an industry wide race to build AI infrastructure. But first we check in on the markets that have been under pressure. We are once again questioning valuations, we're checking some of the biggest winners and whether or not we're taking money off the table. We're off flat on the day on the Nasdaq 100 more broadly. But it's been a volatile session thus far as we've tried to dissect who wins from some of the purchases, Alphabet being key among them, and who's being sold off. Let's just dig into some IND individual movers that I want to shine a light on because 13 filings, they tell you an awful lot. Who is being bought? Alphabet is being backed by Berkshire Hathaway. We're up 5%, a significant move that helps the Nasdaq 100 more broadly be trading flat, even though sentiment seems to be shifting to the downside. Sentiment on the downside for Nvidia ahead of its earnings later this week. We understand that another key investor that everyone watches, this one, Peter Thiel, offloading his entire holding from his Macro Fund, his hedge fund in Nvidia. We want to get to both of these key stories because the Teal Macro Fund, as we know, has been one that we really do focus in at the moment. It does still hold on to Microsoft and a reduced stake in Tesla, we understand as its main bets, all according to that filing. We want to dig into it with hedge fund reporter Emma Palmer. Now look, this is someone that we always follow. Peter Thiel made his fortune by backing Matter Artists, formerly known as Facebook. And now he takes key bets on publicly traded companies. But why offload $100 million worth of Nvidia?
- [03:35]
Podcast Host
Yes, it's especially interesting how concentrated his portfolio is really only four or five stocks. So when we see a rotation in this portfolio, it holds a lot of meaning, even though the position itself was only about $100 million, which in our hedge fund world isn't that much when we look at the exposure. So you know, this may be a reflection of a lot of the cautions and concerns that we're seeing around the space valuations, the amount of money that's just flooding into the space, concerns people have about the circular nature of investments and money in this industry. And so this could be an expression of that. Typically when you see a concentrated portfolio and a shift that's notable, like exiting, exiting a position entirely, then it often suggests a directional.
- [04:18]
Caroline Hyde
And concerning what's interesting though is that the overall fund in terms of deployed money into equities has gone from excess of 200 million down to about only about 70 million currently deployed. And we understand of course though that he is still making big bets on startups. We just had Substrate on a couple of weeks ago, the CEO that he's now backing to take on ASML and take on some of the chip design and equipment makers in particular Hammer. So do we think in similarity to SoftBank, they exited $5.8 billion worth of Nvidia, but that was about having money to be able to reallocate other areas, the ecosystem.
- [04:53]
Podcast Host
Yes, exactly. So when we look at these startup investors, you know, they put a lot of money into the pre IPO space into these companies before they make a lot of their gains post ipo. And so, you know, how they think about the startup space and then how they think about the public market space could be expressed a little bit differently when we look at SoftBank. To your point, they did make that rotation to invest more into open air. So the 13 apps give us some clarity and how these money managers think and what they do. But really it doesn't show us everything. It doesn't show us intentionality, it doesn't show us shorts index and it doesn't show us other types of hedges against a position. So we do have a limited point of view. We'll take that because hedge funds are so secretive and so private, but it is somewhat of a very specific insight.
- [05:41]
Caroline Hyde
Great context. What is the context around Alphabet and the buying by Berkshire Hathaway?
- [05:45]
Podcast Host
Yes. So when we look at Alphabet, a huge position for them, $18 million. 18 million shares worth about $5 billion as of the end of the third quarter.
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Public.com Advertiser
Quarter.
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Podcast Host
Now that means it is the 10th biggest holding for Berkshire Hathaway sizable. But it also gives you a sense of just how much money this firm puts to work. Its biggest holding is still Apple. They did trim that stake by 15%, but it still holds about a quarter of the portfolio exposure. So it's likely less of a directional view, perhaps more of a rotation of the portfolio to manage its exposure. But when we see a brand new position and a sizable one like an Alphabet Google, then it does suggest that there might be a lot of bullishness as to that stock.
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Caroline Hyde
Love having the hedge fund perspective from you across our world of tech, Palmer. We appreciate it. Meanwhile, all eyes on Nvidia fundamentals as the company reports earnings on Wednesday. Chris Larkin over E Trade from Morgan Stanley saying the monthly jobs report would normally dominate the week's economic calendar. But with the AI trade struggling the past couple of weeks, Nvidia's earnings are once again looking like a key piece of piece of the market's momentum puzzle. Here to break it down in King, because look, we can see companies and hedge funds may be selling their entire holdings of Nvidia, but the fundamentals look pretty strong right now. And it seems, yeah, I mean, as.
- [07:08]
Ryan Reynolds
You know, Caroline, we just had a chat with Jensen in Washington a short time ago and what he was saying at that conference was like, hey, I've got half a trillion dollars worth of orders coming in the next few quarters. So on a fundamental basis, at least from his perspective, nothing to see here, everything is, is kind of still heading up and to the right.
- [07:28]
Caroline Hyde
I mean, extraordinary. We're anticipating what, $55 billion worth of overall sales coming on the quarter and there is areas where we could perhaps get a bit more granularity, whether it's concentration of certain end users, but also whether we're going to get any access to China.
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Ryan Reynolds
Yeah, I mean the concentration thing, they keep giving us a number and it hovers around sort of 50% of their revenue at least for the datacenter business coming from sort of Microsoft, Amazon and that sort of those hyperscalers. I think investors would like to see that number go down as a percentage and see that I was being spread throughout the economy. And as you mentioned, Nvidia keeps saying, look, we're not banking anything from China. We still don't know how the geopolitics is going to work out.
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Caroline Hyde
But he has been very clear on the opportunity of sovereign AI more broadly. So do you think you'll get more of a global perspective there of other end users, whether it be governments or whether it be other enterprises?
- [08:25]
Ryan Reynolds
Yeah, I mean, I think we've heard the sales pitch over and over again. He's very good at the sales pitch, as you know and we've also seen a lot of deals announced here, there and you know, Jensen's been all over the world and that's all good, that's all trying to create the sense of progress. But I think what investors would like to see is that kind of translating into something in terms of revenue that rivals one of his big customers such as Microsoft, such as ws, such as Matter in King.
- [08:52]
Caroline Hyde
Thank you very much. It's going to be a busy week as always for you. Meanwhile, let's get the broader tech view as investors of course are gearing up for Nvidia's results this week. Jay Jacobs is with us. BlackRock, head of U.S. equity ETFs. You've had some phenomenal success with certain of the ETFs you've offered this year alone. In terms of actively managed AI bets in video a key holding. How much of an impact will it make on general sentiment, do you think?
- [09:16]
Ryan Reynolds
I don't think there's going to be a ton of change in sentiment based off of short term earnings or just any individual company. We see a lot of our investors looking at artificial intelligence as just a long term transformational theme that they want in their portfolios. Oftentimes this is being funded by selling out of the tech sector and allocating to AI. So frankly for a lot of investors there hasn't, they haven't changed their position in the Mag 7, they're just extending to get a broader exposure to the entire artificial intelligence value chain.
- [09:45]
Caroline Hyde
In the last couple of weeks we have seen more anxiety though, and you've seen downward pressure on some of the biggest winners. Jay, has that changed any of the types of conversations you're having?
- [09:56]
Ryan Reynolds
No, I mean we've continued to see inflows and to be AI, which is our actively managed AI fund. And I think frankly a fair amount of investors out there have frankly been looking for a buy the dip opportunity. They've seen this trade continue with so much momentum over a couple of years. Now that we're on basically the third year anniversary of ChatGPT coming out. A lot of investors have been looking for a little bit of a buying opportunity to get into the AI trade.
- [10:19]
Caroline Hyde
What therefore are some of the conversations you're having in terms of nuance? Because the nuance is constantly changing. Initially it was all about return on AI, then it was about whether or not enterprises are really using them effectively, whether the pilots are working. What are the types of conversations that you're having about to the upside and the downside when it comes to your actively managed AI trade?
- [10:39]
Ryan Reynolds
Well, we're seeing a lot of investors ask about kind of what's going on beyond the Mag 7. There's been a fair amount of discussions about data centers, about power infrastructure, about some of the early adopters in artificial intelligence. So a lot of that nuance is really about looking across the entire value chain for opportunities, not just concentrating all of the activity around the MAG7.
- [10:59]
Caroline Hyde
So when you're looking at BI, I think it's about $7 billion in active and assets under management there, where are they managing to play out the entirety of the trade? Because as you say, much of the value has been gained in AI infrastructure, infrastructure bets. But that's broadening out now.
- [11:16]
Ryan Reynolds
Well, that's right. I think a lot of the exposure is looking at that infrastructure trade, that semiconductors. But really broadly looking across the semiconductor spectrum that's looking at data centers. We have some power infrastructure names in the fund. I think as we continue to see AI evolve, it's going to move from this capex heavy infrastructure build out into more of the models that are generating revenue as you see more adoption. And I think we're starting to see that in some of the earnings now about how many tokens are being processed by some of the largest large language models. And we're seeing a lot more companies talk about adopting AI in their business practices. So I think over time, over the next couple of years, we will see a shift in the positioning from the infrastructure layer. To the models, data and applications layer of the AI value chain.
- [12:00]
Caroline Hyde
When though you do hear headline Risk Softbank selling its entire stake in Nvidia Peter Thiel Macro Fund selling its entire stake in Nvidia year, do you suddenly get a load more calls? Do you suddenly get a little bit more of a questioning of the circularity of deals that we've had of late?
- [12:19]
Ryan Reynolds
No, that hasn't been the case. And I think it's because, you know, you can, you can look at kind of the near term noise about who's buying or selling or some, you know, very short term earnings. The long term trend of this theme has only been gaining steam. And so I think a lot of our investors really look at it as has there been a structural shift here or not? And oftentimes if you're looking at 13 filings or just headlines, it could just be repositioning within the value chain. It doesn't, it doesn't represent a lesser bet on artificial intelligence as a whole. So we continue to have a ton of conviction. Our clients have not been terribly concerned about headlines. It's really about kind of the continued adoption of artificial intelligence that's been driving so much of the interest in this fund.
- [12:57]
Caroline Hyde
Okay, so maybe a buying opportunity. What about some of the sell off that you see? And in crypto, of course, significant flows have come in to your ETF when it comes to the bitcoin exposure. But that's come back of late, it must be said. How is that feeling sentiment wise?
- [13:13]
Ryan Reynolds
You know, kind of similar. I mean, this fund I bet is still up nearly double since we launched it just last January. So I think, you know, a lot of early people are still quite excited. And then what's been changing is there's been growing availability of iBIT. So some of the major wealth platforms in the United States, which represent trillions of dollars of assets, have just enabled their advisors to be able to buy ibit. And so frankly, for a lot of people who are just getting into the ecosyste, they're quite thrilled that they get to be able to get in, you know, off of, off of highs as they start to think about allocating as a more structural position in people's portfolios.
- [13:47]
Caroline Hyde
JJ because of BlackRock. Great to check in with you. Thank you very much indeed. Today you are coming up. Well, we're just talking about crypto. It's supposed to be crypto's year with an administration in the White House that was more friendly to it. So why is it that digital coins have been foiling? I have More on that next. Meanwhile, just check in on Amazon. We're going cross asset for you because we're down 1.9% on Amazon, but that's the equity trade. The fact is it's selling a six part bond sale at the moment, its first US denominated sale in at least three years. Up to $12 billion worth. 40 year debt at just a percentage point or so over where theoretical US Treasuries would trade. They're cashing in on the debt market, looking to put it into data centers it would seem. From New York, this is Bloomberg Tech. Crypto. It's in sell off mode still. We're currently off for the month 13% on Bitcoin. It's down 25% thereabouts from its highs of $126,000 where it hit back in October. Etherium as you see, has been held harder off by 20%. And look, the smaller crypto Dogecoin, which of course was initially set up as a joke, it's also down for 15% in the last month alone as people start to question really whether we can hold on to the gains and certainly some of the leverage that has been built into the system. Let's talk about all of this with Bloomberg's crypto reporter, Miao Shen. Yeah. What is it that is driving the selling and the sentiment lower? Because we all thought the administration's adoption of crypto in many ways would just continue the asset classes rise.
- [15:23]
Miao Shen
Yeah, exactly. I think what we're seeing today in the crypto market is that it's still recovering from what happened in October where, where we saw this larger liquidation event happen in the crypto. If you look at like both institutional and retail investors, we haven't seen any large firms coming out saying they had any blow up and stuff like that. But it does feel like some trading shops, smaller ones, might have some issues. You can see that from the open interest of Perpetual Futures Market in crypto, the open interest hasn't really recovered since the market crash in October. That tells me something about some trading jobs may have had issues.
- [16:00]
Caroline Hyde
Yeah, I mean remind us what happened. It was October 19th, I think it was over the course of a weekend. Just an awful lot of leverage got pulled out the system because a sudden jarring move in crypto meant everyone then had this sort of. Well, they were margin called. It would feel like, yes, why would we not have heard of certain blow up? So what could have therefore been more broadly making everyone more nervous about trading this going forward?
- [16:22]
Miao Shen
I think we saw the number obviously is one of the larger liquidation numbers ever in history. I think there are a couple of reasons playing to that obvious retailers are looking more leveraging the space. That's why we're seeing more sort of liquidations events. The other thing I think previously both most of futures tradings are happening on centralized exchanges like finance and crypto coinbase, right. So you can't really tell. So sometimes these numbers are more like murky. You don't know exactly what happens when large liquidation events happen. But today a lot of these tradings happens on chain on the blockchain directly so there's more transparency. So the numbers tend to look much bigger than previous cycles.
- [17:00]
Caroline Hyde
I think we're looking at certain ETF flows. They've been more than 50 billion since their creation but we've seen about 2 billion pulled out in the last couple of months. Where are we seeing the most pain? Is it in bitcoin? Is it the larger areas or is it some of the more. Well certainly riskier altcoins that have been traded and whipsawed a little harder.
- [17:18]
Miao Shen
I think for sure from auto coins perspective because you can see that from the prices action, right? Like you mentioned about Dogecoin. Not just Dogecoin, other like cryptocurrencies. During the market crash in October some tokens went down to almost zero. Which is crazy to think about, right? I think that hurts especially retail investors because retail investors are those who tend to buy a lot of auto coins and they got wiped off from that market crash. And right now you just don't see a lot of demand from these auto coins.
- [17:46]
Caroline Hyde
But people are still buying. Look, we just had Jacobs and Blackrock saying for many a pullback in certain of their ETFs means people actually buy into it. I'm seeing Michael Saylor, I mean obviously OG crypto buyer and treasury stocker upper of he's doubled down on, on his digital asset treasury it feels like. So is he making the most of lower bitcoin prices?
- [18:06]
Miao Shen
I think it's a two different stories, right? We're talking about the microstrategy Michael Sellers like bitcoin sort of like buyers and then we have the auto coin buyers. I think that we, we need to separate this to as to like driving forces I think on the bitcoin side because the fundamentally speaking nothing really change on bitcoin specifically so there are still buyers. But I think what's happening in the market has been like sort of like got into the bitcoin market as well. That's why we're seeing what's happening with Bitcoin. I think that's the sort of aftermath of what happened with auto coin crashes and October market crash.
- [18:40]
Caroline Hyde
Except Bloomberg's mia Sean, you've got to follow her all of her work across crypto. It's fascinating. We thank her. Meanwhile, coming up, Apple set to make big changes to its iPhone designs and its release schedule. More on that next. This is Remake Tech.
- [18:59]
Ryan Reynolds
For every six Chinese people there's a Ping an customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
- [19:11]
Podcast Host
This is the Technology Empowered Growth at Ping An Podcast. In our latest episode, Ping an is.
- [19:16]
Caroline Hyde
Utilizing technology to provide integrated and personalized 24.
- [19:19]
Podcast Host
7 support for China's rapidly growing elderly population. Now available on Spotify, Apple podcasts and Ping AD's website.
- [19:28]
Public.com Advertiser
Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is, you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On Public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self direction directed account are offered by Public Investing Inc. Member FINRA and SIPC Crypto trading provided by ZeroHash complete disclosures available at public.com.
- [20:26]
Podcast Host
Disclosures introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more at adobe.com/do that with Acrobat.
- [21:05]
Caroline Hyde
Apple well, it's set to change up not just its iPhone designs but also its release cycle next year, releasing three high end phones next fall with mid tier phones to follow six months later. So latest topic in this weekend's Power on newsletter. For more Bloomberg Senior Tech editor Dana Walman joins us. Dana, why is it so significant that the timing would change?
- [21:26]
Dana Wollman
So I think both consumers like us and also frankly, Apple's competitors have gotten used to Apple releasing new iPhones every year like clockwork in the fall. And that has certain ramifications. One I think consumers, savvy consumers that's many of us know not to necessarily replace an iPhone if they don't have to in the months preceding what they assume will be the launch. And Apple's competitors have moved up the launches of their Flag flagship phones often to over the summer, sort of getting a jump on Apple. So this would be a big change for the company if it does indeed turn to a strategy where it releases new products throughout the year as opposed to concentrating these really powerhouse launches and one particular season season often towards the holiday season.
- [22:12]
Caroline Hyde
But now they're trying to drip feed a little bit more. Dana, what's interesting is that we are expecting some really seismic changes to the actual phone itself.
- [22:21]
Dana Wollman
Yes, absolutely. And this comes on the heels of Apple introducing the iPhone Air, which Mark Gurman said in his newsletter, really feels like a test case for something even more ambitious, which would be Apple's upcoming foldable phone. And that would be just the first of several new changes to Apple's iPhone line, really just coming as part of a larger, what seems like a larger spate of product launches. I think consumers to some extent have gotten used to long lulls between Apple's product launches. And I think the launches now are going to be more frequent and just more numerous. It does seem like Apple is in a period of launching more stuff, in some cases more ambitious products than perhaps consumers have come to expect.
- [23:05]
Caroline Hyde
There must have been economies of scale to a certain extent of having one big event with all the marketing prowess around it and everyone to go and digest rather than this constant drip feed. Was that why initially it all came, one big particular wow moment?
- [23:22]
Dana Wollman
I think that is certainly part of it and I think the holiday timing is no coincidence. As Mark wrote in his newsletter, there were certain downsides of course as well to this strategy. It sounds like it puts some strain on various teams inside Apple, from marketing to engineering and also concentrated revenue in a certain part of the year, which is not ideal for the company. And it sounds like this new strategy is intended to address a number of those pain points. And I didn't even mention the impact that those kind of concentrated launches might have on some of Apple's suppliers. But Mark did mention that as well in this weekend's newsletter.
- [23:59]
Caroline Hyde
Okay. And so more broadly, who do you think the competition is that they've had to really align themselves? I just think of this season that's just gone almost a front run. Apple, we had Google with its announcements just weeks before. Samsung often tries to do it. Is that really where some of the competitive spaces come from?
- [24:16]
Dana Wollman
Yes, and certainly I have a very US centric point of view. So here in the US those would be Apple's biggest competitors on the smartphone front. And then there's a whole crop of other competitors in China which is a huge critical market for, for Apple. And, and that's a market where Apple has, you know, sort of plateaued a bit and has seen rising competition from domestic players. So it does have a lot of competition in different regions and on different fronts and at different price points. I would add not all of its competition is at the premium end. There are a whole bunch of brands, especially in Asia that are making devices that are quite aggressively priced.
- [24:56]
Caroline Hyde
List well said. Dana Wollman. Great to get the context. We thank you. Now it's time for talking tech. And first up, shares of Chinese giant Seattle fell for a major shareholder move to cut its stake in the company. The latest pressure facing the energy storage maker as reports grow that US Lawmakers are actually pushing to curb imports of Chinese made grid components, which could hit sentiment for Seattle further, Morgan Stanley wrote. Plus Google and Matter, they're among those who have delayed their rollout of some sea Internet cables slated to run through the Red Sea. Now this is political tensions and heightened security threats made routes more dangerous and complicated for commercial vessels. The delays are said to be throttling the supply of much needed broadband in underserved countries. Now coming up Ramp CEO Eric Gliman joins us to talk about the startup's latest funding round as its valuation jumps again. This is Bloomberg Tech. Welcome back to Bloomberg Tech. Let's check in on these markets.
- [25:56]
Podcast Host
It's a big week.
- [25:56]
Caroline Hyde
It's our Super Bowl. It is Nvidia earnings coming on Wednesday. But we're just languishing just flat on the day as we build up to that all important macro event, let's call it. We're off by about a tenth of a percent as people try to dissect what we're going to hear from key Jobs reports as well. What we're actually going to get in terms of data, the Fed. But at the moment, stocks retreating, bonds dollar rising a little bit. Let's move on to the individual stocks. I want you to keep an eye on though, because Alphabet higher, 4% high is really sustaining some of the NASDAQ today in large part because Berkshire Hathaway has been a buyer. A huge amount, almost $5 billion worth of Alphabet shares stocked up by Berkshire Hathaway as we got in the 13 filings. Meanwhile though, in video we left for 13 filings coming from Peter Thiel. His Macro fund completely sold out of his position like is only $100 million worth, not $5.8 billion that we'd seen SoftBank have flowed the previous week. Nevertheless, people either make it the most of the share price rise, booking in profits or allocating to different types of trade. We're seeing Dell off by 6% though some big moves coming from that stock today along with HP along with OEM peers, largely because Morgan Stanley is worrying about sluggish demand and more broadly the fact that the price of memory chips is going higher. It's going to be impacting some of the margins. Dell, a significant seller on the double downgrade we got from Morgan Stanley. But let's talk in the price private markets now because we've got some big news because corporate spending management platform Ramp, it's got a new valuation and it's big $32 billion comes after a $300 million primary financing round and an employee tender offer. Another huge jump in the startup's value in a short period of time. Ramp CEO Eric Kleiman joining us now. So the money, why do you need it? Eric?
- [27:32]
Express Employment Representative
Oh my gosh. Well, a couple of things. First, thank you so much for having me today and was a joy. We were incredibly excited to raise this fund for a couple of reasons. First, the business is growing even faster at scale. Ramp's customer base and the revenue we're doing has more than doubled over the past year. And we find in the times we're living in right now, the opportunity to invest in bringing AI to businesses around the world to automate expense reports, make it easier to run a business and also invest further in this growth made it an easy choice to invest best and serve more customers faster.
- [28:03]
Caroline Hyde
Okay, because there has been so much fits and starts of how much generative AI is actually leading to productivity. Many worrying about the 95% of pilots that aren't working according to MIT. So what's working for you? How are you showing that this is really building productivity and or time management allocation where people can do the work they want to do, not just file expense reports.
- [28:24]
Express Employment Representative
Something that's so unique about RAMP is we measure our own success by how much less money we've helped customers spend. And what we find is that the average customer that adopts RAMP is able to reduce their spend by about 5% per year. And the median customer use using RAMP is growing their revenue by about 12% per year, which is more than double the US national average. I think that uniqueness on ROI, on actually showing companies where they can cut out spend, how they can automate expenses, separate us and I would argue makes us part of that 5% of in that study where people are finding is actually very, very useful.
- [28:59]
Caroline Hyde
Are they actually demanding real detail? I loved some of the notes that I got that your treasury agents moved $5.5 million of idle cash into 4% investments. Your policy agent prevented 511,000 out of policy transactions. Is that the granularity that people want to see?
- [29:13]
Express Employment Representative
Yes, it is. Because I think for a lot of companies really they're looking to understand, okay, I know the time money, if you're a company, every hour that you're paying someone, let's say to do their expense reports is an hour that they're not selling the next customer reporting on the news, whatever really drives value to that business. And RAMP being able to show this was attempted spend that on a different type of program would have gone through. This is time your people would have been doing these low value tasks. Instead that's automated. The spend didn't occur in the first place. The categorization is done for you, makes a real difference and for a cfo, I think is really all that matters. It's about the bottom line and that's what we deliver.
- [29:51]
Caroline Hyde
And it matters to the CEO because they want time allocated in a different way. I saw that Brett Taylor, Sierra and also the chairman of OpenAI was quoted saying, you know, his talent and therefore better placed to be working on the agents he wants to build, not filing expense reports. But. But you talk about that 12% average revenue growth, your customer base. Is that because you are serving companies like Sierra at startups rather than the Fortune 500 or the bigger kind of companies that perhaps don't have the revenue growth that startups do?
- [30:18]
Express Employment Representative
It's a great question. First, you know, I like to believe the most disciplined and well run companies of course will be adopting, we think the most cutting edge tools in the market, which is ramp. That helps people just run leaner. But I think the majority of our customers by a long shot are actually traditional businesses. Farms, nonprofit profits, restaurants, hospitals. Traditional businesses that you would not expect in many ways to be cutting edge adopters for them. They're looking for easier to do expense reports, you know, you might be used to, you know, it's the worst hour of your month doing expenses for them. They tap a card, it does itself. They upload an invoice, our OCR will go and automatically categorize the transaction, set the payment date to the date it's actually due. So you're not losing a dollar out in interest, interest, and then categorize in the transaction for you. And so I think, you know, when you look at the type of businesses these are, leaders like cbre, Shopify, the Boys and Girls Clubs of America, businesses of all shapes and sizes, I actually think are looking, especially in these times, get more from every dollar an hour.
- [31:18]
Caroline Hyde
Your venture backers are a who's who list. Basically, Lightspeed has led this financing. We got CO2 of an air Thrive. You've got founders on so many of them continuing to back you. But I want to go to the talent side because there wasn't all opportunity for your employees to tender their shares. How many did or how many are holding on? Thinking 32 billion isn't the end of it.
- [31:37]
Express Employment Representative
It's people at Ramp are very, very excited about the momentum. I mean, just to give you some context, Ramp is now larger than the Median publicly traded SaaS company. And our gross profit, which is a great measure of our profitability, is growing 10 times as fast. And so no doubt, I think people are very, very excited. There's a lot more to deliver. The process is ongoing. But for us, whether an employee chooses to sell or not to sell, it's very valuable, especially in building a public company, to know that you have the option that you, you can say yes or no to selling some shares. And we think that's a great thing.
- [32:12]
Caroline Hyde
Building a public company will address that timeline next time. Ramp CEO Eric Lyman's got to catch a flight. But it's been so good to have you on the show. Thank you very much indeed. Meanwhile, coming up, up, go back to the markets of Fiona Cinculta, Citi Index senior market analyst. Look, we're all thinking about this Nvidia results. That's next. This is Bloomberg Tech.
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- [35:25]
Caroline Hyde
The pressure on tech While it's coming as traders are suddenly getting more selective about the AI beneficial two stocks that show the divergence a Micro, Micro, Core Weave and Micron. Now shares of compute provider Core we've seen down 44% in a month, while Micron has seen a 24% rise on demand for its memory chips. Bloomberg's equities reporter Carmen Reineke has been writing about what seems to be suddenly some discernment coming from the investor base. Let's take Callee first and foremost. It's still much higher than its ipo. But why we suddenly seeing a bit more pressure on the stock? Yeah, so we've really switched from a capex discussion back to an ROI return on investment discussion. And traders are really looking for that roi. They want to see that all of the spending on AI is paying off and that it's really making a difference to companies either top line or bottom line. And so with Core Weave, that's a little bit of the concern. You know, they're spending a lot. Are they actually seeing a return on investment then? The other thing, thing with Corve is that they're financing a lot of their growth with debt. And so those, the difference in balance sheet is something that's also really coming into focus here with traders saying, you know, even though they grew revenue, I think they doubled it in the last quarter, that debt is an issue and they just want to make sure that it's going to be, you know, okay going forward. Yeah, the same sort of concerns, nervousness crept in when Matter sold $30 billion of bonds. But then Alphabet gets a pass. They sold debt. And we're seeing Amazon come to the market as well today. I'm interested then on the hows because Micron look memory flying off the shelves. It seems as though their share prices rocketed this year. Totally. And it's really interesting because it's, it's all of this demand that we hear about. Right. There's incredible demand. People are making these huge forecasts, but it's really balancing it with the other pieces of the puzzle on the balance sheet. I think that's why we're seeing Micron do so well as opposed to Oracle. Apple, remember, had that huge spike when it said it had this incredible revenue forecast. But as it's taken on more debt and some of those other things have shifted, it sold off all of that huge jump. So I mean, as you said, Alphabet getting big jump this year. I mean, Berkshire Hathaway stake also probably juicing that, but we're just seeing a huge sort of diversion in the names that people are flocking to and then selling off. We want to know who's got the Margin and who's got the capital to be able to afford all the investment. It's so good. Your writing is always brilliant, Carmen Reinecke. We appreciate it. Meanwhile, more on the anxiety in the markets that just skittish ahead of Nvidia's numbers. Fiona Sinclair is with us in Citi Index Financial Markets. Senior analyst Fiona we we just come off this conversation with Carmen where people are deciding that they would perhaps sell off some of their previous winners and certainly ones that have taken on a lot of debt. Is that something you're seeing?
- [38:08]
Fiona Cinculta
Yes, I think we are seeing that investors are becoming more selective over where they want to invest as far as the trade is concerned. I mean, previously it had just sort of been invest in AI and anything that really mentioned I seemed to be a winner. But I think as we were sort of seeing this trade mature investors are taking their time to become more selective, questioning, you know, how this is going to be monetized, what can actually be, how it will be used rather than just jumping on the train.
- [38:42]
Caroline Hyde
More broadly, should they be questioning Nvidia?
- [38:46]
Fiona Cinculta
That's a great question. I mean, you know, it's very much in focus for our clients. This is, you know, one of the key earnings or the key earning I would say, each season. And obviously we have seen, you know, the likes of SoftBank, Peter Thiel selling out entirely of their Nvidia holdings. I do think there is that. This is a litmus test, you know, can the chip maker continue powering the rally that has really, you know, defined the broader market tech tech rally this year? I think there are some reasons to be positive that. You know, we heard from CEO Huang that in October that there's $400 billion worth of orders for chips that are very much at the heart of this AI boom. So that is a strong order book. But obviously at the same time, we have seen really impressive rally in this share price. We know that growth is strong but slowing. But I think broadly speaking, I think it would be fair to say that there is potential for that rally to still continue to run further. There are concerns obviously about that circular deal deals, around 1 trillion circular deals that we've been saying. I think that's what the market's nervous about. So, you know, any insight into that I think would be helpful.
- [39:58]
Caroline Hyde
What about the concentration that comes with Nvidia? I think it was last earnings report about 39% of orders are coming from just two key hyperscalers. Is that something that people are worrying about? Not only the secularity of deals, but the overreliance on just so a few players.
- [40:13]
Fiona Cinculta
Yeah, I think that is going to be again, you know, remaining a point of concern. As you mentioned, if you've got sort of, you know, fewer customers or fewer big clients, then obviously there is a risk that is attached to that. So, you know, any broadening out of that is going to be good news as far as the stock is concerned. And obviously, you know, we are saying that the market is nervous and I think we do see this every time we come to Nvidia earnings in recent quarters that there is a little bit of nervous nervousness surrounding the numbers. And I think that does come with reason. You can't just jump blindly into a trade, but I think there is still reason to be positive.
- [40:51]
Caroline Hyde
Can you balance therefore just the level of rationality in the market right now and whether you give credence to the worries over a bubble or whether actually this is just how growth is likely to continue?
- [41:05]
Fiona Cinculta
Yeah, you know, I mean, as you point out, there have been so many discussions surrounding are we in bubble territory comparisons to the dot com era. But you know, I think that the market is still rush, acting rationally. It is still questioning whether, you know, these are valuations which are acceptable. And I think that does point to a market which as I said is acting rationally, which does go against that bubble narrative. But I think, you know, we do need to be moving this forward as well and questioning how will this be monetized, will demand actually be met? You know, what are the strains that could appear? So. So I think that is the signs that the market is asking the right questions.
- [41:51]
Caroline Hyde
They're asking these questions around the equity side. What about the bond market offerings that we're seeing coming thick and fast. How much you seeing just the desire to be gain AI exposure from names like an Amazon that hasn't sold dollar denominated debt in three years.
- [42:06]
Fiona Cinculta
Yeah, so this is really interesting and I think it does point to this sort of almost insatiable demand. I think that, you know, there are reasons to be, to be cautious. Again, you know, going back to that idea of making sure you question investments before jumping in is always a good idea. And I think, you know, creating these, these, the bond sort of aspect of this trade is quite an interesting take on it and one that we'll be following closely.
- [42:35]
Caroline Hyde
Any calls on crypto?
- [42:39]
Fiona Cinculta
Do you know, crypto is a really interesting one at the moment. You know, I think we saw that rejection last week about 107 level. But I think, you know, the fact that we've taken out some really key technical levels. The 50 week SMA was, was one that I was watching very closely. We're seeing that that institutional demand has really faded. Long term sellers, long term holders are selling. So I think there's a lot of reason to be cautious. That said, you know I think the levels that we're holding around at the moment that sort of 93,000 I think as long as that holds and there could be potential if we see institutional demand return for a move higher. But I think you know the market still feels a bit fragile after that massive liquidation event in early October which is causing that reason for caution.
- [43:28]
Caroline Hyde
We like you talking technicals on simple moving averages. We appreciate it. Fiona's and Cotta Citi index stay well. Coming up, Ford strikes a deal with Amazon to sell used cars on the E commerce website. We'll talk about the reason and the impact on other online car dealers. That's next. This is Bloomberg time. Ford is teaming up with Amazon to sell its used vehicles directly through the E commerce giant, becoming the second major automator after Hyundai to list cars on massive online retailer. Let's get more Bloomberg's auto reporter Keith Norton. So Honda went first, now Ford is doing it and am I going to Amazon.com and finding my Ford there or they got other areas in which I'm going to be able to navigate?
- [44:23]
Ryan Reynolds
Yeah, so I mean it's certified used vehicles from Ford initially. Hyundai does, does new vehicles through Amazon and yeah it is, you're very familiar. You know add to my cart kind of Amazon experience. You can do the financing, you can browse the site and pick your car and then you pick it up from a dealer, you do the final paperwork at the dealer. You can do a test drive at the dealer if you'd like to as well.
- [44:48]
Caroline Hyde
What's interesting is that it did have an impact on CarMax, on Cavana, on others that are selling used cars and used vehicles. How much of a significant player do you think Amazon could become?
- [44:58]
Ryan Reynolds
Yeah, I mean they are Amazon, right. So if, if they really get in into this and that is their goal, they could become a very significant player. So you saw those two Carvana CarMax dropped initially on the news, although Carvana is back up again. So you know I think it does stimulate interest in the category of online car buying which a lot of consumers, you know, it sounds good to them because it reduces the hassle, reduces the time. It's the sort of no haggle, one price selling. A lot of people like that option as well. So it is something that has promise.
- [45:34]
Caroline Hyde
What about new vehicles? Would they dip their toe there?
- [45:38]
Ryan Reynolds
Yeah, I mean that's kind of what Ford was telling me. You know, they're going to see how it goes with this certified used program and you know, these are cars that receive multipelling inspections. They have a manufacturer's warranty of up to a year and 12,000 miles on some of them. So it is sort of new car light, if you will. So if that goes well, they may do as Hyundai is doing and sell new cars on the side as well as Keith Norton.
- [46:05]
Caroline Hyde
It's a great story, thanks for sharing. It's a busy day for Amazon more broadly as it announced its first dollar denominated bond sale in three years. It aims to raise $12 billion in a six part debt offering. Bloomberg's Spencer Soper is here to explain why Amazon might be tapping the debt market. Have a feeling it's something about data centers?
- [46:25]
Public.com Advertiser
Yeah, exactly. They've been spending a lot on data centers and this is more, you know, more fuel for that. They're coming in a little lighter than some of their competitors in terms of the amount they're looking to raise at 12 billion. Others have raised, you know, 30 billion, 25 billion when we look at like Oracle and Google and Meta. So they're coming in a little bit light, but that also might just be an indication that they have more cash flow available to keep, keep these investments going on a running basis. And they're looking at 150 billion in 2026 on X. Wow.
- [46:58]
Caroline Hyde
And 12 billion is but a bit of a drop in the ocean in that respect. But I can understand when you're able to sell 40 year debt at just a percentage point over theoretical US treasuries, it looks like a relatively cheap way of financing some of these big names. But Spencer, where have we understood where the big expense is coming for From Amazon in terms of the data center? 150 billion. Is it going into the land, is it going into the infrastructure, is it going to building their own chips as well? A bit more, yes.
- [47:24]
Public.com Advertiser
Going into all of the above and they can't build them fast enough. And a big, a big consideration is still power, you know, is still, once they build these facilities, will they have the, you know, sufficient energy to power them? So yes, it's, it is a race and they just want to make sure that they have the capital available to take care, take advantage of any opportunities as they come.
- [47:48]
Caroline Hyde
It feels hard. I'm sure for those that have recently been said that they're being let go from the company. Though.
- [47:55]
Public.com Advertiser
Yeah, of course. You know, Amazon recently laid off, you know, more than 10,000 workers and yes. So you're, but you're just going to see them constantly recalibrating. It's such a vast business and they have so many, you know, operating lines and some are getting more efficient because of AI and they're letting people go. But then they're going to keep investing in hiring in the artificial intelligence race to make sure that they're, that they're keeping up with, with their peers.
- [48:24]
Caroline Hyde
And briefly talking of AI race, it looks as though finally Jeff Bezos might be coming a CEO at least a co CEO again. Project Prometheus is being reported on the New York Times. So he could be launching a startup.
- [48:36]
Public.com Advertiser
Yeah, that it's very interesting report and it also just highlights how even, even Bezos has to diversify in the air race. You know, because when, when these kind of technologies emerge there's always a question of, you know, you have these big established companies that can throw a lot of money at it, but they also have all of these encumbrances in terms of their existing operations and will that, you know, is it better to have a pure play startup looking at artificial intelligence exclusively to plow ahead. And so it is interesting to see him going, going solo with, with a new, a new artificial intelligence startup reports.
- [49:15]
Caroline Hyde
That it's going to have $6 billion out the gates and it's AI for engineering and manufacturing of computers, automobiles and spacecraft. We know he likes Blue Origin. Meanwhile, Bloomberg. Spencer Sofa. Thanks so much for breaking it all down. That does it for this edition of Bloomberg Tech. Do not forget to check out our podcast. Find it on the terminal as well as online on Apple, Spotify and Iheart. This is Bloomberg Tech.
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