ServiceNow's $3B AI Bet, Crypto Slumps Post Crypto Reserve Announcement
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Live from New York, I'm Caroline Hyde.

And I'm Jackie Davalos in Washington. This is Bloomberg Technology. Coming up, ServiceNow makes a nearly $3 billion bet in a move to buy startup Moveworks. Plus, crypto sinks further with Bitcoin's sub $80,000 as tariff war tensions drown out Trump's pro-crypto announcements. While President Trump says he's negotiating with four different possible buyers for TikTok's U.S. business. And a deal could come soon. But first...

we highlight the market sell-off. We are unwinding that AI trade once again. When growth enthusiasm becomes fear, we're down by 3.3% on the NASDAQ 100, having its worst days since December the 18th. We are the lowest since September 2024. The MAG7 sinks in particular. We're looking at 5.4% drop. Apple now sub $3.5 trillion. You're looking at NVIDIA well

below $3 trillion. We're at about $2.6 trillion in terms of market capitalization. We're off by another 5.6% as we think about what tariffs and what overall geopolitical tensions mean for this AI trade that we were so long at the beginning of this year. Move on and even look at TSMC. They come out with good numbers. Analysts like the pace of growth in excess of 40% for the month of February in terms of sales, all eyes on whether they can live up to their own internal guidance for their fiscal first quarter. But the AI demand

still clearly there when it comes to the making of chips, but it is dragged lower by sentiment. Let's get to that sentiment. Bloomberg's Ryan Vlastelica is here, and boy, are we continuing these gyrations in the market.

Yeah, absolutely. It does seem like there's just no end in sight for all of this selling. You've had major names that were kind of seen as maybe a safety trade in the market. They're all breaking down. Major indexes have fallen under major support levels. Key stocks have fallen under support levels. There's just been hundreds of billions of dollars of value just completely wiped off. It's been a very broad-based weakness here.

Ryan, how broad based is that? Because last week we saw chips really taking a hit. Is what we're seeing today just really a drag down of a couple of the big names that have a high concentration in that NASDAQ 100 index? Or is there broader fears here that we're just not seeing yet?

Well, I do think just the breadth of the selling does speak to just the broadness of the fears out there. If we are going into some kind of economic contraction or just broader weakness, when you do have potential tariffs and escalation and geopolitical tensions, that's going to weigh on the markets pretty broadly. But because tech has done so well for so long, this is a natural place for people to be taking their profits first.

And any hints of buying the dip just seems to be completely... I mean, the key question for the market is, thus far, Trump says he's not listening to the markets, but is there a point at which he starts to?

Well, I don't know about that. But at a certain point, you do have a lot of people remain very positive about the long-term potential of the big tech stocks, even the AI stocks. It is very possible at some point where people will come in and think, you know what? These names have really gotten beaten down. A lot of them are at multiples that they haven't been trading at in a couple of years or even longer.

speaks to an environment where maybe people start to get a little bit more positive, start to nibble in at the bottom. But there's so much uncertainty just in the broader economy right now. It's hard to know when that's going to happen. But certainly, if we did see a rebound from here, I don't think that would be too surprising because it's not like the fundamentals have really changed all that dramatically.

That's Bloomberg's Ryan Vlastelica. Thanks so much for joining us. Later today, President Donald Trump is set to meet with CEOs of major tech companies, including IBM, Intel, Qualcomm and HP. The meeting comes as the White House considers policy changes, including tariffs and stricter economic

export rules that could impact the tech industry's global supply chains and operations. Bloomberg's Mike Shepard joins us now to discuss more. Mike, what are the stakes of this meeting today? Well, we are seeing the stakes of this meeting play out in the market right now. We're seeing the kind of uncertainty that is gripping investors as really a reflection of what these companies are also going through because

the terrorists, whether they're imposed or not, are throwing an element of what happens next for them and their supply chains, and also what happens to costs that they may have to bear, and also markets that they may be trying to sell to. Not only consumers, when you think about endpoint buyers, but also folks...

other companies that may be looking to make some acquisitions along the way for their own supply chain. So there will be a lot to say at this. It's unclear whether there will be some big reveal or announcement from the president. It is not signaling that way when we think about the TSMC announcement from a week ago or the big SoftBank announcement on Stargate with

OpenAI and Oracle. This doesn't have quite that vibe right now, but we'll have to see what the president says. For now, the meeting is closed to press, but maybe they will open it up. That's a great point that you bring up with Stargate, because then it was kind of this flashier meeting that was, you know, we were getting some nuggets beforehand. What does it mean that these are American companies? You know, as we heard from TSMC last week,

Are they looking more for guidance, or is Trump looking something from them? Well, Trump is always looking for something from his counterparties. He wants some sign that they plan to invest, they plan to expand, they plan to do more with their domestic presence. And yet the way the market is heading right now in all of this uncertainty, it is not an environment in which companies and businesses are more inclined to make those kinds of big spending, big investment decisions. What's hitting them most, Mike? Is it tariffs?

Is it a potential repeal of the CHIPS Act? What is going to be their top question to President Trump, these CEOs? That's a great question, Carol, because the terrorists really have taken precedence over almost anything else. And his discomfort with the CHIPS Act, which he expressed during his address to Congress last week, lawmakers quickly shot that down. They don't seem to be too inclined to cut off that spigot of money.

there was enough bipartisan support to get through. But the tariffs are really the thing out there that is sowing this kind of uncertainty about what the impact on supply chains would be. Remember, the president has imposed tariffs on Canada and Mexico and later put them in abeyance for now.

our two largest trading partners here in the U.S. And then there's the world's second largest economy, China, that is the third largest U.S. trading partner. Those tariffs of up to 20 percent of most products coming in from China really have an impact and start to have a bite.

Mike Shepard, we thank you for that breakdown. Now, amid these tariffs and market jitters, deals are actually still getting done. ServiceNow has agreed to buy artificial intelligence firm MoveWorks for $2.8 billion as part of its push into AI tools that can complete tasks without human supervision. Bloomberg's Brodie Ford joins us now. Agentic AI here again, but not organically grown over at ServiceNow.

Yeah, exactly. Every single software company is chasing this prize of a Gen Tech AI. I had to get a new laptop through work and the idea is for a company like ServiceNow is that when I type it in, it automatically routes almost everything. It makes a decision that says, is this user permission for this? Is there a business case? What will it cost? Cool. The idea is ultimately that customers don't need as many people to do in-house tasks.

ServiceNow's real core market is that IT services. And so Moveworks, it is a pretty clear play to be able to double down on that market and inject some AI into it.

Brody, MoveForce has been around for quite a while, even though we've been hearing about these customer service AI agents more as of late. It was last valued in 2021. And as we've seen in the broader startup market, it's really hard to raise money, especially if you're later stage. Did ServiceNow get a good deal here?

It's a pretty good outcome. And as you said, it's been a tough market for VC-backed companies. We've seen a lot of companies selling at below previous valuations. So, I mean, 2.1 to 3, that's a pretty large deal. I think it's pretty successful for everybody. And with ServiceNow, it's funny because their CEO, Bill McDermott, had a reputation for huge deals at SAP. He came in at ServiceNow and said, you know, these days are behind me. We're going for organic growth.

But it seems like today the floodgates may be opening, right? I mean, I think this might send the message that ServiceNow might be kind of ready to be a big acquirer. It doesn't seem as though the market is that jubilant. I mean, the market is down across the board, but ServiceNow is down by more than 6%, which is more than the slump in the NASDAQ 100. Are investors just a little bit nervy about these sorts of big outgoings at a time where ServiceNow has a lot of government exposure, for example, in terms of contracts?

The big question for SaaS companies is how quick are you turning the AI moment into revenue? For ServiceNow and the most recent earnings, they kind of showed that we are still prioritizing adoption rather than revenue. Spending $3 billion to essentially buy sooner revenue recognition, that could be a sign of weakness, certainly.

Freddie Ford, who was front-running the official announcement with a scoop over the weekend. Brilliant, thank you. Now coming up, Bitcoin slump continues despite President Trump's pro-crypto agenda. More on the Bitcoin space in a moment, but shares of Tesla is where we focus in on after. Bitcoin is off by 3.7%. Check out what this magnificent seven name is currently down by.

8.6%. It's leading in terms of the sell-off. We're seeing, from a points perspective, Apple and Nvidia also contributing. We're worrying about China, we're worrying about a sales slump over there, but more broadly, we're worried about valuations for a company that UBS is saying perhaps the AI trade is a little bit too longer term for this particular one. In the here and now, they downgrade their view on sales for the first quarter. This is Blue Bag Technology.

The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge.

But here's the best part. You can build with confidence, knowing that Microsoft security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft.

And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.

I'm Alpine skier, Michaela Schifrin. I've won the most World Cup ski races in history. But what does success mean to me? Success means discipline. It's teamwork. It's the drive and passion inside of us that comes before all recognition. And it's why Stiefel is one of the fastest growing global wealth management firms in the country. If you're looking for success, surround yourself with the people who will get you there. It's

At Stiefel, we invest everything into our advisors so they can invest everything into their clients. That means direct access to one of the industry's largest equity research franchises and a leading middle market investment bank. And it's why Stiefel has won the J.D. Power Award for Employee Advisor Satisfaction two years in a row.

If you're an advisor or investor, choose Stiefel. Where success meets success. Stiefel Nicholas & Company, Inc. Member SIPC and NYSE. For J.D. Power 2024 award information, visit jdpower.com slash awards. Compensation provided for using, not obtaining the award.

Bitcoin slide continues. It's now below $80,000 for the first time since November. Now, the asset class is consumed by macro concerns rather than the slew of pro-crypto rhetoric that we got from President Trump's crypto summit on Friday. For more, let's break it all down with Shonali Basak. And maybe there's a slight underwhelmed feeling from the crypto summit, but it is macro front and center in terms of the sell-off on crypto. Right. First and foremost, the risk appetite is pretty tough out there, and you have a fairly high correlation still for Bitcoin to stocks. So if you're selling off it

assets. You're certainly not buying Bitcoin today. I think what's remarkable is not even just today's decline. And you are now flirting with that $80,000 level. We have dropped below it, but it's trying to kind of keep that mark. You have Bitcoin down more than 25% since the highs that we saw. So if you bought Bitcoin at $110,000 nearly, you're feeling that pain today. On a seven-day basis, Bitcoin is down

more than 11%. So too is Ethereum. But one thing that's important about all this is also that strategic Bitcoin reserve that the White House had been talking about. It's not the idea here that they'll be buying more crypto assets. They would be taking assets from what is already forfeited, right, from what they have seized. So if you're not buying from the U.S. government, then it remains that Bitcoin needs that

Extra marginal buyer story here at a time where, as we've been talking about, risk appetite is quite low. Shanali, crypto is almost synonymous with volatility depending on where you sit. How much of these swings are actually unprecedented? How does it compare to what we've seen in the past?

Well, think about it this way, Jackie. On one hand, it is very... It's something that big investors who have been in Bitcoin a long time have bared before. You have the billionaires in the crypto industry pretty used to losing a billion or a few in a single year. But if you're a retail buyer,

who have maybe got in at the end of last year when the prices were still high through the form of an ETF, it is tougher to bear. Now, if you're thinking about the look ahead as well, there are a lot of meme coins and a lot of altcoins that people have bought into in addition to Bitcoin. Even more of a drop than Bitcoin today is, for example, Doge. And many of you might notice that over the weekend, there was a lot of criticism around

Doge and the plans for it both by judges as well as members of the administration according to different reports that were out there so it's not just Bitcoin it is the altcoins outside of it they saw this big rally when President Trump initially had hinted that Solana Cardano XRP could be considered for this reserve but they were not in that executive order necessarily for purchase for this strategic Bitcoin reserve so now or crypto asset reserve so you do see pain there

as well because the government's plans are somewhat unclear even after that big White House summit on Friday. Jackie. That's Bloomberg's Shanali Basick. Thanks so much for joining us. We caught up with White House AI and crypto czar David Sachs ahead of the crypto summit on Friday. Here's what he had to say about the creation of the Bitcoin Reserve.

The reason why we need a Bitcoin reserve is that the federal government already owns some. In the past, the strategy has been simply to sell it in an ad hoc way, almost willy-nilly. And that cost American taxpayers something like $17 billion in lost value. So we want to have a long-term strategy to maximize the value of these holdings.

For more on the crypto landscape, Stacey Rolland, Zero One Strategies founder joins us now. Stacey, why did this crypto summit fall flat? Because hopes were pretty high. Well, I think it's important to realize that unlike markets that react instantaneously, policymaking requires patience.

It's a slow process. So, yes, the ball started rolling on Friday with the president's call for the creation of a strategic reserve and digital assets stockpile. There's a lot of details, as we've been discussing. A lot of details still need to be filled in, and there's still a role for Congress to play.

Stacey, with the work that you've done, with the government relations that you've built, the advisory work you've been doing to companies trying to ascertain what the government might do, is there consistency enough? Because I think the fact that you're saying it's day one, it takes a while to really digest what a strategic Bitcoin reserve means. But the lead up to the strategic reserve was long and many had anticipated there would be buying, that maybe it wouldn't just be Bitcoin. We were allowed to get overenthusiastic about what the announcement would be.

Well, it's a great question. And I think essentially more conversations will have to happen, right? Congress will have to be involved. These are long discussions. I do think looking at the details, one thing that I think is really interesting is the part that the public was able to see. There were interesting comments made, especially by the Treasury Secretary, where he suggested that

uh, the Treasury was going to be playing a role in assessing the tax code and looking at risk weighting. And I thought that was a really interesting hint. Um, I'm very interested to see what Treasury does working with the OCC and the IRS, uh, in, you know, he, what the Secretary had promised was, uh,

looking at applicable regulations and amending or rescinding as necessary. I'm interested in seeing whether he is limiting those comments just to the strategic reserve or whether he was suggesting something broader and there's more to come. Well, you served within the Treasury Department and you were a staff of the Office of Tax Policy, so you're someone who should know about these tax perspectives. And thanks, Jackie, for holding on for this moment. But, Stacey, I am interested in what...

it means in terms of the future of on-ramps here. We talked about stable coins getting some sort of regulatory clarity. That's something that investors want, not just tax clarity too. Yeah, that's exactly right. There are calls for clarity across the board. Those are largely in Congress's purview. And this week in Congress, if we can take a quick shift to look at what's going on on the other side of Pennsylvania Avenue, there will be... This week we're going to have action on stable coins and on...

information reporting in taxes. So we're going to see it's a very busy week in these areas, both coming out of the White House, reactions to that, and actual policymaking on the Hill. You mentioned that Congress is going to have to be involved. What kind of bipartisanship do we see around crypto? Yeah, increasing. And I think it's important for people to realize, especially in the work that I do, that every Congress is different. And so last year, we did see a shift over the years for

for this issue to be sort of increasingly partisan. But a lot of that was largely to do with the political realities. You had the Biden administration that was signaling skepticism, right? Some would say hostility to some areas of digital assets.

heading into a contentious election year, Democrats were going to defer to their party leader. Now, political winds have shifted, right? We have a Republican-controlled Congress. Clearly, policymaking will be happening in this space. And that middle, that opportunity for bipartisanship is much broader than it ever has been. That's Stacey Rowland of Zero One Strategies. Thank you so much for joining us.

Time now for Talking Tech. First up, shares of Redfin surging today. Rocket Companies has announced a deal to buy the real estate listing site for $1.75 billion, paying $12.50 a share in an all-stock transaction. Rocket CEO Varun Krishna joined Bloomberg Open Interest. Have this to say about the deal.

We're very excited about this deal. Two of the biggest growth opportunities for Rocket that we've talked about are really growing in purchase and AI. And by bringing together the leading home search website with the leading mortgage finance company, we expect to accomplish both.

Plus, Deliveroo is set to exit from its Hong Kong business due to weak sales and mounting competition. Now, the London-based delivery company will sell some of its assets to rival Foodpanda with other assets set to close. The Deliveroo app will remain active in Hong Kong until April 7th.

And self-driving startup Wave says it's near a commercial debut with major automakers to launch its driver assistance system in the US and in Germany. Now, the startup is backed by SoftBank, Nvidia, Microsoft and Uber, also saying that its AI software can adapt to US driving behaviors faster and at a lower cost. Wave did not, however, mention a timeline for release or the name of the car makers involved, Jackie.

For more on Wave, Dana Wollman joins us now. Dana, autonomous vehicles are really having a moment here. How does Wave stack up to what's already on the market and what we've seen so far?

So for listeners who are unaware, Wave is not a consumer-facing product. So it specializes in autonomous driving software. And as you might imagine, it is AI-powered. And that software goes into various automakers' vehicles. And it may not even be branded as Wave in front of consumers. So it's not something consumers can purchase, but it may be something they experience depending on what car model they purchase in the coming years.

So the competitive threat is to Tesla FSD, is to all the other automated offerings that we're about to be consuming? You know, possibly the likes of Waymo. What I find so fascinating about this space is there's a lot of frenemies. There are clear competitors, but sometimes, depending on the web of who's invested in who, a partner could also be a sometimes competitor. I think the relationship, for instance, between Uber and Waymo is really fascinating in that regard.

Dana, what does this mean for the market here in the United States? Does this mean that it's sort of kind of getting crowded when it comes to who's already out there putting the software in there? One thing that you mentioned that really struck me is that it can adapt to U.S. driving behaviors. I mean, are we just bad drivers here?

So that struck me as particularly interesting, too. Alongside us providing some news today about the company's timeline or just vague timeline, the company put out some data today just suggesting that it has a newer and more efficient approach to adapting its algorithms and its AI models to basically U.S. signage and U.S. road rules.

And this has been a really fascinating topic. It's actually something that NVIDIA CEO Jensen Huang brought up at the company's CES keynote.

And Jensen in that keynote talked about how difficult it is for companies to map local roads safely and efficiently at the same time without it just turning into this cost-effective balloon, essentially. And so given that context, it was really interesting that Wave came out and said, "Hey, we've got these models and they were trained in Europe, but we can really adapt them pretty quickly and easily to the uniqueness of U.S. roads."

No comment on US versus European driving. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York.

And I'm Jackie Davalos in Washington. And we check in these markets that are in sell-off territory once again. Look, we are questioning growth in the U.S. We are questioning tariff impact in the U.S. And we're questioning valuations of the AI trade. We're off by the Nasdaq 100, almost 3%, bouncing off of our lows, but nevertheless underwater. We're looking at Bitcoin off by 3.4%. At one point, sub $80,000. We're still higher than the day of the U.S. election, November last year.

but only just. Meanwhile, we're trading at the lowest level for Nasdaq 100 since December the 18th of last year. Move on and have a little... Well, actually, the lowest level since September. It's the worst day on the market since December of last year. I'm looking at basically the entire MAG7 driving us lower in terms of a points perspective.

There are zero sell ratings on a number of these names. NVIDIA, zero sell ratings in terms of analyst expectations. Microsoft, zero sell ratings. But still, we go lower as we cannot fathom when we start to see a bottom and people start to buy the dip. Tesla dragging us the most off by 8.5%. We worry about Chinese growth and we worry about a future of AI where UBS cuts their forecast for this year's sales to the company. But Microsoft and all these names just in the red. But there's much more news when it comes to Microsoft, Jackie.

That's right. Microsoft has created its own in-house AI models that it thinks it can go toe-to-toe with industry rivals like OpenAI. According to sources, Microsoft has been developing a family of models called MAI to perform a variety of tasks. For more on this, Bloomberg's Matt Day joins us now. Matt, Microsoft has poured billions of dollars into OpenAI. Why is it developing its own models now?

Well, I think Microsoft wants a hedge at some point, right? Their agreement with OpenAI, the main one that's gotten all this attention the last couple of years, that only runs through 2030. That could be extended hypothetically, but at some point Microsoft's going to need to shoulder the burden for its own AI services. The company clearly believes that AI is the future, and so even though they've been partnering with OpenAI real closely, as they say, every time they open up their mouths on the subject, they're still working on their own models as well.

We were just talking about frenemies in the AV side of things. Is this a question with frenemies? Are they competitors or are they partners, Matt?

Well, it's both. Like I said, Microsoft sings opening ice praises any time they can, but they're also realistic about it. They've worked on their five models for a long time. These are smaller set of language models that can run on a laptop, or at least they're designed to be smaller than the big kahunas at ChatGPT. But I think both parties are kind of sober and realistic that they're going to work together, but they're also going to build their own mousetraps.

Matt, opening eyes technology like ChatGPT underpins a lot of the existing technology that Microsoft has already sold to its enterprise customers. Does this move risk spooking that base?

You know, it might, but I think we're way, way, way early on that, in part because Microsoft has only just started testing whether they could use their own models like my, whether they could use non-open AI models to power pieces of its co-pilot, which is Microsoft's main sort of AI go-to-market for its office user base. So we're probably really, really early for that. Right now, Microsoft would tell folks, hey, we still use open AI. That's the industry standard, the state of the art.

Fascinating deep dive on Microsoft. We thank you, Matt Day. Meanwhile, let's talk about more in the generative AI space. A startup from two former researchers at Google's DeepMind have raised $130 million for a new company. Its goal? To create AI-powered superintelligence. Co-founder and CEO of Reflection AI, Misha Laskin, joins us now. Misha.

This is around coding and the fact that coding can be done better than a human and not just as some sort of co-pilot but actually going off and building the code itself. That's right. Thank you for having me. So to take a step back, we're a team of researchers and engineers from formerly frontier labs like DeepMind where we contributed to some of the biggest breakthroughs in AI over the last decade. And the mission of the company more broadly is to build super intelligence.

What we believe the starting point is, is exactly what you said. It's building incredibly reliable autonomous coding systems. So that's what we're focused on today. Did DeepMind not want to do that? Why did you have to go off and set up your own company? Well, we think it's really important to not just do research in the wild, but to be really closely coupled to product and customers. A motto that we have at the company that the only eval that really matters is the real world eval. And so we felt that by being really close to the customers, we'd be able to see through the mission better.

Misha, when I think about coding assistants, I think about Microsoft GitHub Copilot. It's extremely popular amongst the coding community out there. And I'm curious what kind of reaction you've seen from your customer base with the notion that you want your tool to be able to do it on its own versus kind of have this human intervention alongside of it.

That's a really good question. So actually we found that the tool both internally at Reflection and the way our customers use it is incredibly empowering because it allows engineers to focus on the stuff that is really high priority and they want to work on and we kind of take the more tedious work off their plates. So we kind of think of an engineer of evolving over the next few years.

and becoming basically an architect that has an army of these hundred AI engineers working for them and helping them see their visions through.

When I hear superintelligence, I remember a lot of the initial more existential kind of concerns that were coming up at the really beginning of ChatGPT taking the world by storm. And just last year, we saw a wave of AI safety-focused researchers leaving OpenAI. I'm curious how you're going about the safety conversation a year afterward.

That's also a really good question. Safety is definitely one of the things we care about a lot. A lot of the work in safety is traced back to what's called reinforcement learning from human feedback, which is what our team led at Gemini.

And the way we think about safety is from a very practical perspective. We believe that superintelligence cannot be built in a vacuum, and so it's really important that you iterate closely with customers and users and make sure that these systems are aligned from day one with their needs and are put on the right guardrails.

Many are worried ultimately about whether this disrupts the labor force. You're saying, look, you're just going to free up the engineers to do even more. But ultimately, what talent do you need right here, right now? And in the longer term, will you need as much talent? Well,

The challenging thing both today and in the future is how to ask the right questions, how to design the systems so that your AI engineers do the work for you. So today a lot of the talent is around research and distributed systems engineering and very kind of complex engineering tasks. Now AI engineers might help offload some of that in the foreseeable future, but I think asking the right questions will still be a really valuable skill.

It's quite busy out there in the world of generative AI coding assistance and startups that are getting mind-boggling valuations. The latest was AnySphere coming out with a $10 billion valuation. We understand they're going to be getting money replete. We think about Poolside. How are you thinking about standing out from the crowd and continuing to be able to raise significant amounts of private money?

What we're building is significantly different from the existing suite of coding AI products today. The way we think about the existing coding AI products is akin to cruise control for engineers.

This is really useful, but the engineer still does most of the driving. We're building systems that are fundamentally autonomous from day one, that you give them a task and they take you from point A to point B, and they need to do so reliably. And to do that, you need to drive fundamental breakthroughs in intelligence, and that's what our team is focused on.

That's Misha Laskin, CEO of Reflection AI. Thank you so much for joining us. Coming up, Alexa von Tobel of Inspired Capital joins us to talk about the future of social commerce. Caroline? And while we check back in on these public markets, and they're having a torrid day, we're off of our lows. We're down by 2.6%, not as much as the more than 3% sell-off we saw earlier on the NASDAQ 100, but still the worst day since December of last year. MAG7 off by 4%. Stay with us. This is Bloomberg Technology. ♪

The world is built on code. From the apps we use every day to the systems powering industries, developers like you are the architects of tomorrow. But let's be real. The road to innovation can get a little tricky. You need the right tools to move fast, but you also need a community to help you go further. That's where Microsoft comes in. Microsoft has the tools to help you move at lightning speed, like GitHub Copilot, VS Code, and a ton of AI resources to keep you on the cutting edge.

But here's the best part. You can build with confidence, knowing that Microsoft security and compliance are already taken care of. No more worrying about vulnerabilities or threats while you focus on your craft.

And with Azure AI Foundry, you can build your way. The future is yours to build, no strings attached. From ready-to-code tools to full flexibility, it's all in one place. The future's in your hands. So learn more at developer.microsoft.com.

I'm Alpine skier Michaela Schifrin. I've won the most World Cup ski races in history. But what does success mean to me? Success means discipline. It's teamwork. It's the drive and passion inside of us that comes before all recognition. And it's why Stiefel is one of the fastest growing global wealth management firms in the country. If you're looking for success, surround yourself with the people who will get you there.

At Stiefel, we invest everything into our advisors so they can invest everything into their clients. That means direct access to one of the industry's largest equity research franchises and a leading middle market investment bank. And it's why Stiefel has won the J.D. Power Award for Employee Advisor Satisfaction two years in a row.

If you're an advisor or investor, choose Stiefel. Where success meets success. Stiefel Nicholas & Company, Inc., member SIPC and NYSE. For J.D. Power 2024 award information, visit jdpower.com slash awards. Compensation provided for using, not obtaining the award. Venture investing is on track to be at its highest level since 2021. That's according to data from PitchBook. But much of that funding is going to start up powerhouses, OpenAI, Andruil.

Let's talk about what it means for the cycle of investing with Alexa Gontobel, founder of Inspired Capital. Nearly $900 million in assets under management, three funds, generalist early stage. But how much have you had to just focus in on the generative AI trade? There's obviously so much happening with AI writ large. And I think it hits so many verticals. So for us, we're very thesis driven. And the future of social commerce, which I know we're talking about today, we've had a three-year thesis that we've just been thoughtfully executing. And so that's how we like to do our work.

Okay, so when you're thinking about a thesis such as social commerce, that is how AI can interweave with my social experience and suddenly my shopping experience becomes that much more targeted? That's exactly right. So in our point of view, you'll have the huge open AI, the LLMs, the perplexities of the world,

But there will be an AI application layer above that. So for example, we backed a company called Duckbill. And what Duckbill does is gets to know you exactly, knows how many children you have, what products you're interested in, and then serves them up for you. So it takes discovery from going to Google and hunting for that birthday product. My daughter turns 10 this month, for example. Duckbill this morning alerted me, here are products you should think about buying and

Should we buy them? And the answer is yes, thank you. But very, very, very customized AI based on who you are and these LLMs really get to know you and then recommend products.

Alexa, what have you seen from like consumer behavior studies? Do people actually like that? Because when I think about seeing a lot of these targeted ads, the first thing that goes to my mind is how do they know this? Am I giving them permission to be able to scrape whatever data to give me this wonderful recommendation for shoes or whatever it might be? What are we seeing from the consumer side of things? Sure. So for example,

And again, just sticking with Duckbill. Duckbill is a platform that you give information to. You tell it. So it's all stuff that you have downloaded in terms of your budgets and what you like to spend, where you like to buy flowers from, what your kids' interests are. And then from there, the recommendations keep getting better based on their AI infrastructure of things you've allowed. So that is all up.

in and I would just say incredibly simple in making your life better in terms of executing on products.

When it comes to where humans are left in this social commerce thesis, because when I go on TikTok, I love seeing product recommendations. Whether or not they're sponsored by a person, it's the human that's making the recommendation that's really the sell for me. How does this fit into how you're going about looking for companies in this space? That's exactly right, Jackie. So Jackie, on the other end of that spectrum where an AI

brain is recommending a product to you. In the last just few years, AI content has exploded 10,000% increase of content online, videos, written content, et cetera. And so we actually have the opposite thesis as well, which is the pendulum is going to swing back to really trusting brands, products, people that you know. And so we backed a company, for example, called ShopMind. ShopMind just announced a $78 million series B. And ShopMind

is a platform where you can go online and follow the exact people, your best friends, people in your sphere, or influencers or content creators that you trust, the enthusiasts that you love, and then buy products directly from their recommendations. And in so many ways, Jackie, that shrinks the internet down to just the people you want to follow, just the things that you're interested in, and it's your front door. So again, Google no longer being your front door. It's going to be your AI application.

application layer and then it's going to be a company like Shopmite for example where you're just buying from the people you love and trust which is how I buy offline and now it's coming online. What about if you're actually a creative that can't find exactly what you want and you want to make it and you're sort of backing companies that almost get rid of the brand entirely right? We're all going to be our own creators in some way. That's

That's right. And actually, so again, on the sort of far out there ideas of our thesis is the idea that we no longer, because of generative AI, need, let's pretend you and I are buying a white coffee table, marble. You know, you would take a photo, you would upload it online or start hunting on Google, seeing pictures, maybe you end up at Etsy and then you perfect it and you buy it. And it's so much work. There's a company called Arcade AI, where

you literally, if you can imagine it, you can make it. And what Arcade allows you to do is write into Gen AI, marble coffee table, three legs, and all of a sudden it starts to show it. And then you can tweak the picture the way you want it. And then it shows you all the places you could buy exactly that table by connecting you directly to the makers. So what that does is it turns...

all of us normal everyday people into expert creators where you can manufacture your own products which again is a more out there edge of the spectrum but a big big big idea and that company's just raised 42 million i mean in terms of being an expert you're also an expert founder yourself you built lenvest and i can imagine at this moment when you're thinking about a company that's building around a global narrative of building your own products you're getting a lot of calls from these founders being like

What do I do in this scenario? We've got no consistency in terms of path or direction right now from a government level. How many calls do you feel from your founders right now? I mean, we often literally see 50 companies a week. We are talking to our founders regularly because we're in a tectonic shift, right? As you think about innovation curves, we are at the edge of the beginning of a brand new innovation curve.

That is more seismic than anything we've seen in the last 20 years. And so I think being very thoughtful and precise and again, thesis driven about where's the world headed? Where do we believe the world is headed and how do you make those bets? And of course, that advice we give at Inspired to all of our founders as well.

Alexa, when I think about shopping, I mean, it's interesting that a lot of your companies are really the software layer. You can't really see it, but it's there. But at the end of the day, these are products that have to arrive at someone's doorstep to kind of really finish off that customer experience. We're seeing a lot of volatility when it comes to those with exposure to manufacturing, kind of tariff concerns.

Are any of your companies grappling with any of those fears right now? Absolutely. I mean, as you think about tariffs and what that will look like and products that are being manufactured outside of the country, every single one of those founders is asking. And my co-founder and business partner, Penny Pritzker, we just did content on tariffs and exactly how people should proactively think about them. And obviously, they're very volatile.

But I think preparing people for the worst of what they should be prepared for is how we operate at Inspired and always providing that macro lens is critical as people are actually executing in the day to day. - Your co-founder helped build Paperless Posts into what it is. Alexa, I go back to where we started.

We started it that VC is having kind of a nice year. Yep. But certainly in the gender AI space, you just mentioned a lot of companies getting big series B series follow on funding. Is that the environment you're seeing right now? People are getting money. I don't think it's typical. I mean, I think it's the haves and have nots. I think you're seeing for companies that have

Big compelling ideas, huge breakout. ShopMy's revenue has grown exponentially, more than 10x in a short period of time. And I think you're seeing in companies that are really working, the dollars are there. And I think then you're also seeing in companies that are not working, it's very dry.

And so it is a tale of the haves and have nots. And I think things that are at the forefront of which we have a few in our portfolio of AI, I think the capital is not only there, it's many funds are there at the same time very, very quickly. And so, again, I think when the traction has really proven out, that's when you're seeing the capital. Alexa von Tobel, great to have her in, managing partner, founder, Inspired Capital. There's going to be a deal on TikToks.

There could be. We're dealing with four different groups, and a lot of people want it, and it's up to me. So there could be. President Trump there speaking about efforts to find a buyer for TikTok's U.S. business. For more, let's speak to Bloomberg's Kurt Wagner. The clock is ticking. It's April the 5th is the time they've got. Are we going to have to extend?

It's very possible, right? I mean, that comment from President Trump was sort of more optimistic, I think, than the things that we've been hearing from behind the scenes. It really feels like things sort of have stalled out. A lot of potential bidders have made outreach, but not necessarily gotten a lot of feedback in return. And so this idea that there might be four possible groups that are all

in the mix here, I think makes it sound more optimistic again than I was feeling that it was 48 hours ago. Let's talk about the in the mix lot, because we've spoken on this show plenty of times to Frank McCourt Jr. He's with Alexis Ohanian on the one front. We've also spoken to Jesse Tinsley, who might or might not be powering up with a Mr. Beast, but certainly he's got some other key founders like the Roblox CEO alongside him. And then there's Sprinkling of Others. Who are these for, do you think?

Yeah, well, obviously, President Trump didn't name the four, right? So we know of three groups that have come out publicly. You mentioned two of them, Jesse Tinsley's group, the Frank McCourt and Project Liberty team. Perplexity AI has, you know, supposedly made some type of bid for TikTok as well. So those are the three that have sort of been public.

um but again we've also heard president trump sort of throw his own names out there right uh larry ellison with oracle elon musk of course with it with uh his stable of businesses and so we don't know who he's talking about we only know who's raised their hand but they're the numbers don't add up he says four we know of three so supposedly there are some some mystery names still out there and the numbers are all in mystery as well because is it worse

up to $50 billion for US TikTok if they don't get the underlying algorithm, such as with Project Liberty's bid. Yeah, I think what makes this so complicated is that, one, the range of prices, you know, I believe Project Liberty bid $25 billion and another group, the Tinza group, I think was saying more $20. We've heard numbers as high as $50, as you mentioned. And I think it all depends on what is included.

in a deal, right, doesn't include that underlying algorithm, doesn't include just the brand and the user base. And also, what role does the U.S. government have here, right? President Trump has talked about the U.S. taking 50 percent of this, right? And so that has to factor in, too. Is that even doable? So this is not traditional, Caroline, as you know. And so I think that's what makes, you know, even basic numbers here or ranges here very hard to predict.

And what's totally unprecedented is the idea that the president himself has the time or the bandwidth to be negotiating any of this. But it is a geopolitical context because China gets sort of a right of reply in all of this and at one point seemed to only want Elon potentially as a bidder.

Yeah, well, I'd point out two things. One, it feels like J.D. Vance, Vice President Vance, has actually taken on some responsibility for trying to get this over the line, right, because the president is presumably very busy, and so he's passed at least some of this off to him. The other thing that hasn't really been mentioned here is, like,

just because President Trump wants a deal done does not mean a deal is going to get done, right? Like, ByteDance has to agree to this, and by association, pretty much the Chinese government has to agree to any type of deal, right? So he is really representing just one side of this equation. And so I think, you know, you factor those two things in, again, there are four people bidding, and I have control over this, those kind of comments from him, I think are lacking some major context around the fact that he's not the only one who gets to decide here.

We also talk about AI

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