Spotify User Growth, Paramount’s Enhanced Offer

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If you're trying to connect the dots behind the headlines, Bloomberg's Trumponomics podcast is here to help. I'm Stephanie Flanders, head of government and economics at Bloomberg. Every week I'll bring you a smart, focused conversation with reporters and experts from Washington, Wall Street, and beyond. Listen to new episodes every Wednesday and follow Trumponomics wherever you listen. Bloomberg Audio Studios Podcasts, Radio, News Bloomberg Tech Bloomberg Tech is alive from coast to coast, with Caroline Hyde in New York and Ed Lovell in San Francisco. This is Bloomberg Tech coming up. Spotify added a record number of users last quarter. Thanks to its end of year, RAPT campaign shares surge. Last paramount enhances its bid for Warner Brothers Discovery, offering billions to cover termination, debt refinancing, and ticking fees. Details are sour. As we buy back into that beaten up sector, we're looking also to what the macro picture is painting. We've got retail sales that come in less than have been expected. What does that mean for a Fed cut? What does it mean for equities? What does it mean for crypto? Because let's face it, that is where the movement's happening today. Bitcoin up by 1.6%. Look at EF. Down almost another 5%. As we still question, what sort of asset this really is? What are you looking at? I'm looking at Spotify and shares are absolutely surging. A record number of subscribers added last quarter, taking the total to $751 million. Later in the show, we'll get to it. With Bloomberg's actually common, but it was all about the end of year RAPT. And I know as a team, we all exchanged our RAPT. The stock was on track for its best day. Other are up almost 20%. Now on track for its biggest jump in about seven years. But that is a big response to strength when it comes to music streaming current. It's certainly here. Tell you well, the elsewhere strength, the bond market. We're looking at shares of Alphabet. But really, I want you to focus on its debt. Because its bond offerings keep coming. And after the US dollar debt sale raised $20 billion. Yesterday it was upsized. The company is now selling over 11 billion more, in sterling in Swiss fracked-denominated bonds. And that's super rare 100-year note we told you about yesterday. Well, it was oversubscribed and then some. Almost 10 times according to sources. Let's talk about it with Robert Schiffman from Bloomberg Intelligence. In less than 24 hours, they've raised $32 billion basically on the debt markets. Let's just focus in on what that 100-year debt signals about the confidence people have in this company. Well, I think what the bond market is telling us is that AI bubble talks are so 2025. That the concerns that at least from the creditor's perspective is not anything near what it is from an equity standpoint. The reality though is what is the benefit of a 100-year bond? To me, it's just a trophy. It's going to be put on the shelf of pension funds and insurance companies. They're going to hold it to maturity. And let me tell you something. If anyone's really worried, if that bond does not pay off in a hundred years, come and look me up at Bloomberg. I'm going to be upstairs in my office, eating free snacks. Robert, the macro point is that they're doing interesting things with capital. The bigger picture to fund CAPEX, right? To grow AI infrastructure at scale. I always read your memo every morning and you revise constantly the kind of trajectory. What are the latest numbers that you see going over the next decade? Yeah, if you know, it sort of becomes anopoly money, the type of spending that we're seeing. I mean, we're now projecting over $4 trillion of cumulative hyperscalar spend through 2030. You can afford a lot of that from operating cash flow. However, how do you supplement it? You supplement it with really cheap bonds. And the way that you can do that is you start off with balance sheets that are in phenomenal shape. You know, if you look at Alphabet's double A plus credit rating, S&P came out yesterday and said, in order to breach their downgrade trigger, they would have to issue more than $180 billion of incremental net debt. So what I would argue is, hey, if they wanted to be a triple B-bame, would they have to issue a trillion dollars of bonds? There is so much capacity. Why not take the money down? Barrow long-dated paper at 5.5%, 5.7%. Put it to work today and grow your future cash flows for another decade if not 100 years. There is some pushback in the market that yes, it's a trophy on a pension fund's desk. Maybe it's a trophy on Alphabet's CFO and Treasurer's desk if they sell 100-year dot bonds, but it also signals the top of the market. Look, we go back to when the last time a tech company did this, it was Motorola back in the '90s, and people are trying to make this search and they may be Motorola. Was it the peak of its game then? And where is it now? What do you say to those question marks about 100-year debt? Yeah, listen, I think what's going to be the top? We can never call the top. Let me tell you something though, I think there's more bonds to come. We still have Microsoft. We still have Meta. We still probably have Amazon. But would they do 100-year? You know what? They might. And they also might do a lot of other incremental currencies, like we talked about yesterday. I'm actually surprised they stayed out of the Euro market. I think there's a big, deep demand. There is every portfolio manager that we are talking to is talking about having excess cash on hand. And everyone is looking at the same compressed yields. There is a bid for yield. It is not going away anytime soon. So if we hit the top of the market, I don't think it's today. Maybe it's next week. Maybe it's going to be in three weeks, but I don't think it's yet. Listen, I've never been as bullish on tech as I am today. I don't think these companies have ever been better positioned. I don't think their balance sheets have ever been better positioned. And I actually think the confidence levels that we see across the bond market far supersede what I think, even Bloomberg News is talking about. Robert Schiffman from Bloomberg Intelligence, bonds are fun. Thank you very much. The software sector may have a chance to rebound. We're so closely tracking what's happening in software right now. According to JP Morgan strategist, fears of AI disruption may be overblown. And the current bearish sentiment is a quote "overshoe at this time." That views echoed by Lauren Webster, managing director of investment banking for technology at Piper Sandler. She writes, "While there is merit that AI will be a death sentence to certain sectors of software, the notion of software's broad obsolescence is overstated." Delighted to say, this should join us now. I mean, this is a day by day thing. Looking at some of the trading and action in the moment, I see a lot of green in the software space. But I say it every day, one market, a session of market does not make. Just go a bit deeper on your thesis and why you're a bit more calm here. Absolutely. So I think where we are is in this phase of forming, storming, norming in the market and the give and take between AI innovation and software stocks. And so you're seeing a lot of volatility, disruption each time there is a new product released from an AI innovator. Yet this broader realization that enterprise software is here for good. You can't rip it out tomorrow. And this is a longer term trend as we figure out how to embed AI into enterprise solutions. What is actually going to be disrupted? We are canvassing a wide and diverse range of views on what's happening in software earlier today. We spoke to the Goldman Sachs CEO David Solomon. Here's what he thinks. We have software exposure, but I say it's insignificant the scale of our, you know, our overall platform, but it's certainly something that we're monitoring. I think the narrative over the last week has been a little bit too broad. There will be winners and losers and plenty of companies pivot to just fine. Sell off too broad. It sounds like you and Mr. Solomon agree that maybe what we've seen in the last seven to 10 days a little over done. Certainly. With that said, though, if I was running a business in the software sector today, I would be taking a hard look, spending time with customers, understanding how they're using AI in place of the products that I offer, where I should be embedding it. And certainly planning for the next decade old transition towards more AI infrastructure tooling. But yes, as I said, nothing is getting ripped out tomorrow and this is a much longer transition period. And the good news in that is that it gives software companies time to catch up, figure out how they can play this opportunity. Lauren, what data do you look to as to what might be being ripped out? What is a point of offering rather than a platform that's integrated more deeply within a business? Yeah, certainly looking at those that have been disrupted most by recent product launches from whether it be Anthropic or others. Workflow tooling is a place at risk. Certainly there are elements within the legal sector that some of the newer announcements are starting to displace. There are however bright spots like cyber securities, one where I spend a lot of time and certainly you need cybersecurity capabilities to even implement some of that AI enterprise infrastructure. So there will be pockets of opportunity in the software sector and then certainly in the picks and shovels around AI infrastructure. Go there a little bit more because that was clearly the read across from some of this capital expenditure spend that we saw last week and now. So I mean extraordinary numbers coming from the hyperscalers and then of course people thought well time to be long energy, time to be long, the chips that go inside these data centers. Is that still the right play for you Lauren? Absolutely. So the money is not pulling out of the market and sitting on the side lines. It truly is going into a lot of the infrastructure opportunity. What is often called the physical AI play where it is energy, networking. I mean we're even seeing physical security around data centers getting another look and so there's a significant opportunity in that infrastructure and elsewhere that is, you know, yeah, IRL or in the physical world. What I'm trying to understand is why the story has changed for lots of investors. You know if you think back to when we started closing, closely tracking capital expenditures, people wanted to see the software revenues on the other side. They wanted to see revenue top line growth that directly resulted from AI investment, right? Think about the course of gone, a name like Salesforce. They posted really good numbers but the anxiety is still there despite the evidence it's backward looking that people are willing to pay for that AI era of software. Why is that? Look there's a broad realization that you're going to have to invest ahead of a head of the real realization of the opportunity, the real realization of the profits and so that's why you're seeing a lot of these hyperscalers, poor tremendous capital, hundreds of billions into their cat-backs infrastructure associated with AI and there will be support for others across the software ecosystem as long as there is also that customer enterprise customer journey narrative going with it as well. Yeah that enterprise evidence is right is what we're looking for. I could ask you one of my favorite questions given we're still early in the year. What happens in the rest of 2026 with the software sector? Yeah I'm going to go back to where I started which is really this forming, norming, storming. You have a lot of AI forming right now and I will tell you we are not we are not at the end of that formation. There are going to be gives and takes and then that storming with traditional software the winner there is going to be those that are really spending time understanding the evolution of their technology with their customers and how those customers are applying AI to their solutions and then you'll have this normalization and it could be a few years out where there's a balance between you know AI infrastructure leaders and those software innovators enterprise SaaS who have really seized the opportunity to embed AI for their customer benefit. Don Webster, kind of wait to have you back on the show. Thank you very much indeed, Pipe Sander, we appreciate it. Coming up, Spotify reporting record user growth in its fourth quarter. What to discuss next? We're in these earnings but what are you looking at? Just a very quick look at TSMC's US listed shares, they're up. Almost 2% 1.7% but trading at a record high the shares in Taiwan overnight traded at record highs. The revenue jumped 37% in January, same story. AI spending marches on, TSMC dominates the market for chip manufacturing. This is Bloomberg Tech. It's checking on a Spotify shares having a strong day up 15% at one point having their biggest move on record. After the company reported, well record user growth in its fiscal fourth quarter and $835 million in operating income. Let's turn to Bloomberg's Ashley Carmen who broke down the numbers and look the mighty have fallen a lot coming into this number Ashley. So the bounce back is perhaps surprising when they're able to give some sort of like ease to the investor base. Yeah and I think that was a lot of what this call was today is just addressing concerns that AI specifically AI music startups might. I mean these are supposed to launch this year so people are concerned are people going to start using AI to generate songs and then listen to those songs on other platforms or they're going to keep coming to Spotify and today the co-CEOs were saying we think they'll keep coming to Spotify. So the stock at one point was up on track for as big as jump ever it's now up 15.5%. I think on track for its biggest jump in seven almost eight years. You write about in the report the impact of RAT for those although I don't imagine there's many that don't know what that is actually just explain it but like why was that such a big factor? So RAT is their annual interactive viral marketing campaign where people share their music and podcasts that they listen to the most this year and every year it is just a moment on the internet people tend to activate their service to participate in RAT. So they always expect to see a boost but I believe on the call today they said this was their biggest RAT ever so we can really see the results of that marketing campaign. But aren't people advertising more with Spotify? Are they able to drive revenues not just by having more of us tune in and on earth are Spotify account every end of year? So this is the one part of the earnings today that was a little bit gloomy the ad supported revenue actually dropped year over year and this has been a part of the business that people are really wondering when are we going to see you start making more money from advertising which is also an important question because when we're talking about them adding users these are ad supported users subscribers grew as well but if you're going to keep adding ad supported users you also want to see the revenue and that department go up as well. Bloomberg is actually coming on Spotify thank you very much. Power amount is trying to sweeten its Warner Brothers bid the media giant saying it will cover a 2.8 billion dollar termination fee that Warner Bros would pay Netflix if it terminates and already agreed upon deal. Bloomberg's Lucas Shore who leads the screen time team is with us. This was interesting right so the headlines here and it's a sweetener and improvement on their deal but actually the specifics are very interesting. They're not just they're not boosting the offer price go into detail explain how we unpick this. Yeah so they are addressing and they being paramount two of the concerns that Warner Brothers has had about their deal. One is this question of the breakup fee right so Warner Brothers has been had been debating between two main offers between Netflix and Paramount they picked Netflix but if they walk away from Netflix to you know renegade with Paramount they have to pay Netflix a bunch of money. Paramount has now offering to cover that and Warner Brothers had been very worried about it because they said that one of the reasons the deals weren't equivalent was Paramount wasn't covering Warner Brothers downside on that which would have come out of the money they get. The other thing here is Warner Brothers have been really concerned about their ability to refinance their debt going forward Paramount has now are David Ellison both first in swallowing Paramount and now trying to swallow Warner Brothers has a history of trying to impose really on earth and covenants on what the company he's acquiring can do which would have limited Warner Brothers in that respect and now Paramount is saying basically we'll cover you on whatever costs are related to that debt financing. To your point they still haven't actually raised a $30 share offer this does increase the total net value of the bid and so we're waiting to see what what the Warner Brothers board has to say about it. What credence to investors give at the moment Lucas to that this would pass through regulators more easily this whole ticking fee the idea that if it goes past the quarter expected they get a chunk of change in return if it's delayed I mean that really just speaks to the bravado here. Yeah well Paramount has been adamant all along that it stands a better chance of getting its deal approved which on its face makes some sense Netflix is a much larger company a more powerful company it's the number one player in streaming Netflix of course has has countered that you know they're very confident in getting their deal approved and raised issues with with Paramount's offer because Paramount plus Warner Brothers Discovery combined would account for technically a larger share of television viewing than Netflix would under the deal but both sides are trying to plead their case Paramount obviously is sort of coming from behind here and what they are trying to do is inject enough doubt in the minds of shareholders that they will not vote for the Netflix deal next month. Lucas both sides trying to plead their case there's been a lot of recent reporting from us on what's also happening kind of in the background there's obviously been an interest from Washington DC. What else do we need to know about how this is going from a regulatory perspective or at least interest from government as well. I didn't know. Right? We've had paramount shareholders or we've had kind of paramount in David Ellison, lobbying people in DC in Europe. We've had Netflix going ahead of the Senate last week. President Trump had said he'll be involved, then he said he's not involved. What we do know is just as a basic set of facts is that the DOJ is looking into both cases and has yet to say whether or not it's going to challenge either of them. In terms of timing, is there anything pressuring? Is there any date, any number, any timeframe that we look to for the next? Yeah, the next big one is the shareholder vote, really. We're expecting Warner Brothers to arrange a vote of its shareholders sometime probably in mid-delay March, kind of at the latest early April. That's something of a deadline for paramount because they need to convince a bunch of shareholders before then to change their mind. Otherwise, then they're really up to the wins of regulators because if it gets to shareholders and shareholders do approve that Netflix deal, there's not much paramount can do besides hope that the government in the US or Europe blocks the deal. We appreciate you on the story, meanwhile coming up. We're going to talk about how the story of VC firm, Andrewson Horowitz, is helping drive the Trump administration's AI approach. That's next. This is Brubette Tech. We're talking top grade products across the board of over 80 bond funds, actively managed by 200 person global squad of sector specialists, analysts, and traders. Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Heppget in London with the hosts of the Blue Bag Daybreak Europe podcast. We're up early every week day, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy, and the people shaping the European Union right now. And from London, I'm looking to know what all that means for markets, money, and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech, or markets, you're hearing it while it happens. It's smart, calm, and to the point. And it fits into your morning. You can find new episodes of the Blue Bag Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube, or wherever you get your podcasts. It's time now for talking tech and first up, Stripe. It's arranging a tender offer that would value the company at $140 billion. Now, according to sources, that marks a roughly $30 billion increase for the most recent valuation in last year. The move is being seen as a sign that the mighty FinTech may continue to delay its initial public offering. Plus, Cadet's design system is introducing a new AI tool designed to speed up semiconductor development. Now, the company's new chip stack AI super agent. Well, it will act as a system. Two engineers, helping with design, debugging, blueprint generation. The move comes as a tech industry, really grapples with the surge in chip demand and ongoing labour shortages. And Ali Baba, when pushing further into robotics, the company has debuted a new AI model called RinBrain, designed to give robots a more advanced understanding of their surroundings. With the release, Ali Baba takes on AI leaders such as Google and Nvidia. Ed, what have you got? OK, so, Andreessen Horowitz has become one of the most influential voices shaping the Trump administration's AI policies. Sources say the venture firm is often the first outside call. The top white house officials and senior Republican congressional aides make when weighing moves that could affect tech companies' AI plans. And like, a lot of this reporting caro is coming from current and former white house officials. There are things that are clearly in plain sight, right? So, Shri Ramkishnan, who is a senior AI policy advisor to the president, is a former Andreessen Horowitz partner. But he was in London, and there's reporting in there about, you know, David Sacks, who is from the world of venture capital and Silicon Valley, is close to the president and wants to hear out, you know, industry and Andreessen has scale. Has scale has money to put into super PACs. We see what they did with the crypto fair shake and the way that they've then retargeted in the AI spectrum. But what's also interesting is one of the lines in the story says they de facto have a veto, really, over certain AI policies. Now, they push back on that in particular. The named lobbyist for A16Z says, look, the only person who's got AI veto is President Trump himself. Yeah, yeah, the president makes policy. But, you know, as we've reported, he often gets handed the dots, reads them himself and says, "Good call. Coming up on the program, runway CEO, Chris the Balvan's Weiler. We'll be with us to talk about the startups' latest funding round at a $5.3 billion valuation. It is half time and that conversation's coming up next. This is Bloomberg Tech." Welcome back to Bloomberg Tech. Let's check in on the markets. They've actually giving away some of their gains that we had earlier in the session. We're now unchanged on the Nasdaq 100. We're trying to digest the retail data that we got, which was weaker than expected. But what does that mean in terms of the Fed and its ability to cut rates more broadly? But also, where are we buying back into? Is software still loved at the moment? Haven't been so beaten up last week. And the hardware selloff is just a little bit crimping some of that risk-on feeling of the day. I'm looking at a risk-off feeling in crypto. Bitcoin, off by 1.4%, was still at 69,000, so well off the lows of last week. But it's still the moon music, not strong, particularly in the eith, we're off by 4.6%. So still looking for a direction and really where the asset class buying comes and steps back in. Move on to what's happening underneath the hood of the benchmarks, because look, we are seeing significant gain to Spotify. I might add it was being crushed leading up to these numbers. So we're still down on the year in terms of a one-year basis, where up 15% almost a record move on their shares after their addition to monthly average users really eclipsed expectations. Snap gets an upgrade, it's really seeing that you could be buying into the strength of subscriptions for this company. Data Dog, check that out, up 16%. Again, software is beaten up by Data Dog giving a earnings report that stated some of those nerves at. Joining us now is Bloomberg, equity's reporter Ryan Vaseleka, who I don't know how he does it, but he's across the entire lot. Let's start with the earnings part, because that's probably more common to some of the bigger move is right across the markets this morning, Spotify, Data Dog. What are the trends we're seeing and what's the action in the moment telling you? Hey, good morning. Thanks for having me. So a lot of these companies have gotten beaten down, as you mentioned, but they did a lot to reassure investors about some of the bigger concerns that are facing them. So in Spotify's case, they give a very strong outlook for their user growth. They give a very strong outlook for their margins, both of which help to address key concerns that people have been having. Spotify, I think, is up by the biggest day, I think in several years by now. So certainly a relief rally there. Data Dog, another company that has been really beaten down as part of the ongoing route in software stocks. Strong revenue forecast there in the full year revenue forecast. I think it was a little bit under expectations, but at the same time, analysts said this looks like it could be conservative, really helping to ease concerns about what is the impact that some of these software companies are going to see from AI related services? That's it, isn't it? That's the read across. It's how much is AI going to be eating any of these company's lunches? Absolutely. And must be the desire of the executives right now to push back and to show real operating margin growth. In a particular real revenue, I mean, data dog was up 29% for their last call to just gone. Yeah, absolutely. Now, I will say that the, not all of the results have been strong. So yesterday we got results from the company called Monday.com. That's not fell 20%. I think that one wasn't strong enough to help ease some of these concerns that have persisted around it. But Data Dog is the one that I feel like you hear a lot of people talking about when you look at the overall software weakness. This is one name that gets singled out repeatedly as when they were sort of thrown out with the bath water. So maybe overdone selling there. Certainly the results here are giving the bull something to cheer about. Limbo's Ryan Flastellika, thank you very much. Let's go to the private markets in the world of startups. AI startup runway hit a $5.3 billion valuation of the company, clicked a new round of funding raising $350 million. Hit a discussed runway CEO, Christopher Valenzuela. You know, I was reading all of the different reports about this round. And we'll get to the money part. But I think what's jumping out at me, Christopher, it's great to have you back on the program by the way, is the need to make models that are more useful. That can do more. Do you think that's a fair place to start? It is. I'm thinking for Jose Miega and I have him here. It is. I think it's a reality of where the thing only is heading or where the models are. We've seen this a little bit with language models. But now I think world models are basically eating research and eating AI. It's kind of clear that the next frontier of what we expect to see progress in all modalities will come from video and for models that are going to understand and simulate the world. And so a lot of what we're doing with this new funding is to basically double down on that vision and that mission, which I think we've been first to market in many other parts of OVAI, including of course video generation, but now feels like more present than ever than world models will start really unlocking the next stage of AI progress. You may be a little beaten down by by this story and line of questioning, but the capital is for compute or it's for talent or it's for both and give us a sense of what that environment is right now. Yeah, it's a it's a very thorough, I mean the growth of the company seems from how we allocate these resources effectively and a look within a very focused and very efficient company spending whether raised in putting it into compute, into training some of the world best video models out there and hiring. We're for the impact that we've had as a company for the kind of customers and enterprises that we serve. We're a small very small team and so right now we are scaling that we are hiring across the board, more researchers, more great talent and of course double down on compute, which is fundamental if you really want to get to the next stage of what we think will come. The kind of customers you serve, Christopher, who is that then? As we still typecast you as an AI video generation company, but you're not. You're a robotics company, you're an avatar company, you're a world company. So who do you serve? Yeah, of course, that's a good question. So look, I think it's important to understand how AI has progressed and language models are basically describing reality. World models are simulating the world and when you simulate the world you can start tackling many different kind of industry. So the question of like will AI models will help advertising, marketing, Hollywood, media. I think that question is answered and the answer is yes. It's kind of a pretty obvious yes to these days. So we're the best company and the best solution for marketers, media, Hollywood entertainment. We've been doing this for quite some time. So I think we're one there and we're going to continue to grow. There's a lot of expansion that we have to do in the industry there. Now the models can simulate the world. So we start to simulate an only media entertainment, but we start to simulate how the world works and that is effectively very valuable for robotics, for physical AI, for AV. And so another way of thinking about it is we have some of the best tools to create media and videos for humans to watch. We now start to create videos and media for robots to watch and for that for those robots to learn from that data, which is fascinating. It is fascinating. It also has different impacts on different people. And when you say it helps in industry, it's kind of in the eye of the beholder. Crystal, well talk to us about how you think about as a leader of your business, the implications this has for the labor market, for what it means more broadly, for for humans watching content that wasn't made by people and the reality of them. Yeah, look, that's a question that we've tried to grapple for a long time. In terms of how do we make sure that companies and industries react accordingly to what's coming on tapening? And I think my team after seeing the industry for quite some time is I think the industry is adapting pretty well to be honest. If you look at advertising agencies, if you look at Hollywood, it's pretty obvious these days is that every studio has an AI department, an AI can function and AIG for and the organization has started to rethink themselves in an AI for native world. And that has allowed themselves to really find new jobs, new types of things that they weren't able to do before. So in a way, that's taking some of the tasks and things we've seen in the past and that will go away and that's natural. I think that we've solely realized that that's the case. At the same time, we've seen more jobs being put out there with new descriptions on things that even a year ago would have been unthinkable of. And I think that we actually now becoming obvious, notably for media, for Hollywood, for gaming companies and for many other industries, even for software engineers. I think it's kind of pretty obvious these days where you start to see that you can automate and simplify a lot of the entry-level tasks and jobs. And so that's where I think we will continue to see growth and just do by meeting an entertainment. Chris, we find that there's a lot of interest in runway, right? As a company, how the models are being deployed and used commercialisation. This was a big round. The valuation is interesting. A lot of the questions we get for you about your future and whether you plan to go public. So I'd ask you to kind of be candid about that. The benefits and negatives of being a public company and why you might consider doing that. It's not something we would not consider at some point. I think we're right now given the breadth and research innovation that we conduct at the company. I think we're in a much better position thinking about being private for a bit more time. I think there's trade-offs. It's been a public company in terms of how you report, how you think about your growth, the kind of things that you need to focus on. Right now, for me, this is an area of unique from three year research. Being a private company allows you to do that from two research with much freedom. So it's something we wouldn't necessarily not consider. But right now, given the growth that we see, we're probably remain a private company for quite some time to retain their independence. Chris, I'll briefly, as I've asked you about whether the employee-based in companies are ready. Am I as a human-ready to digest the wall of AI-made content and discern what's real and what's not? Yeah, you know, that's a interesting question. Actually, we'll kind of flip the assumption there. I would start to assume and I would suggest everyone probably starts to assume that most of the content that you see out is going to be generated. And in that case, what we should be kind of water marketing and protecting isn't necessarily the generated content. Is the real content? Is the content that we've seen and we've recorded from a camera? And then in verse a little bit of the problem because yes, more content will start becoming the norm. More AI content will start becoming the norm of the content we interact with. Specifically, when you can also do it in real time, which is going to be a fascinating new avenue of gaming and non-linear experiences. I think the world is adjusting to that. There's definitely a culture on the social adjustment period. But from what I've seen, I think it's happening faster than I ever before and just just superb because it's going to get even even more crazy. Christopher O'Vallan-Suella, Runway CEO, it's great to have you back. We appreciate it. Of course, thank you guys. Coming up, ahead of a landmark addiction trial, meta, run thousands of commercials to promote its safety work with teens. Details on that next. This is Blinke McTek. I'm Barry Rittalts inviting you to join me for the Masters in Business podcast. Every week we bring you fascinating conversations with the people who shape markets, investing and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market, whether you own stocks, bonds, real estate, commodities, crypto, you really need to hear these conversations. Sometimes its behaviors like Dick Failer or Bob Schiller, sometimes its fund managers like Peter Lynch, Bill Miller, Ray Dalio, sometimes its authors Michael Lewis, author of The Big Short and Moneyball. Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Rittalts. Listen on Apple, Spotify or wherever you get your podcasts. Instagram owner meta paid for thousands of TV commercials that promoted its safety with teens all ahead of a landmark case examining whether the company intentionally designed products to hook children. Blinke McTek, who leads our coverage of Matters here with us. This is about timing and proximity to events. But what do we need to know in our reporting? Yeah, so the trial is sort of the backdrop of this whole thing. That started yesterday in Los Angeles. As you point out, the allegations here that meta and YouTube and others have created these products to addict young people, the infinite scrolling, the algorithms, things like that. And so these advertisements that meta has been running for a while, but really in earnest since November, promote their teen accounts and all of the stuff they're doing to try and help and combat this issue with teenagers. And so again, timing is interesting here. They're trying to sort of set this narrative about themselves with the backdrop of this trial going on at the same time. Now in the story, it talks of tech oversight project executive director Sasha Howarth, really talking about this as being an influence play. But in many ways to take the other side, it's meant to be an influence play for parents for kids to understand that these tools are there for them to use right? Exactly. And you know, you'd think about if you're meta and you're sitting here going, okay, there's going to be this landmark trial. And in fact, there's going to be trials for meta around child safety and teen safety throughout the year. And so if you think about there's this steady drum beat of headlines and news and coverage about that issue, you certainly want to have your viewpoint out there as well. And so I think that's why we see them promoting these teen accounts, which they were rolled out about two years ago. And really trying to your point Caroline, show parents that hey, all these things you're reading in the press, like we are addressing them with these safety settings that we've put in place as well. Remorse coat Wagner, we thank you. We're going to talk more about that story in a moment, but first, did you got some breaking news? Yeah, my understanding is that Tesla has promoted Joe Ward, who was the vice president leading the Amir region operations to basically run sales service in delivery globally. All those teams around the world are now reporting into him. We don't know that much about Joe Ward. I think he started it. Tesla is an intern quite a long time ago. There's kind of closed, climbed up the ranks and been based in Europe. You remember yesterday Bloomberg had reported that Raj, Jig and Ethan had left Tesla and he had been running the sales org. And, you know, we try and track this because of how it runs with everything kind of filtering into Elon Musk ultimately. We'll keep tracking it, Karra. Yeah, EME sales. They've been tough of late. Now, let's just return to our original conversation because, as mentioned, it's not just meta that's currently under scrutiny over safety, particularly for teens. Other tech giants think Google, whether it's YouTube or facing lawsuits as well over the addictive nature of social media. Let's get more on this Eric Goldman. He's a law professor at Santa Clara University School of Law and co-director of the School's Center for High Tech Law. Eric, as I mentioned, it's meta, it's Google. It's also Snap and TikTok facing legal focus throughout the year, correct? Yeah, there's a trial taking place right now in Los Angeles, putting all four of them on trial. There's also a federal case that's putting them on trial in June. And there are lawsuits against all of them throughout the country in parallel with that. The argument at its core from some of these social victims are that these tools and these platforms were designed to hook teens, young brains in particular, and keep them coming back for more. Eric, is that the understanding you have what legal credence, what fight do they have to fight here? So the basic argument for the plaintiffs is as we describe that the sites were designed to intentionally addict users and that the services are therefore liable for the harm that resulted from that addiction. There's a lot of questions about that. For example, we have to ask what does it even mean to be, quote, addicted to a social media service? There aren't medical or psychological definitions of that. But I still have to talk about whether or not the services cause the harms that the victims have suffered. There are many causes of harms in people's lives. And so isolating that causation is going to be tricky for the plaintiffs as well. Let's get Meta's response to these lawsuits and questions, right? The company says that they don't reflect reality. The evidence will show a company deeply and responsibly confronting tough questions concerning research, listening to parents, academics, and safety experts, et cetera. That's the company's reaction. Actually, what's happening in response to the wider issue is you see state-by-state different laws being enacted that are consistent with the complaints of the plaintiffs. That's my read of it, Professor Goldman. Is that a sort of useful strategy towards a solution here? I think you need to be careful about using the term solution because in order for us to talk about that, we have to be very precise about exactly what problem we're trying to fix. There are a lot of problems in our society, a lot of problems, flaking kids, and there are also problems of over-responding to the content online that looks a lot like censorship. And so when we talk about solutions, we can't do that without talking about the problems. Having said that, I think that we're going to see a battle of experts in these trials where both sides are going to bring in the best and brightest minds to tell their case to the jury. And we're going to hear from average Americans essentially plucked off the streets who are going to weigh that evidence and try and tell us, whether or not they think there's a problem here that needs to be addressed. Professor, in the course of proceedings throughout the trials, those that are kind of trying to come to a decision in them, that those presiding over the case, to what degree do they have expertise in the technicalities behind this? So ideally, the jury doesn't have any direct expertise they're bringing in. The idea is that that's not what they're being asked to do. They're going to be presented with evidence from experts that have been chosen by the parties and they're supposed to sift through that evidence, discuss it, evaluate it, and try to say which they find more convincing. So in that sense, I think it's even better for us that it's not a panel of experts' genocide. It's really a bunch of what we hope are well-meaning Americans who are there to just tell us, "I'm not going to respond to the hype. I'm not going to listen to the critics in the media or the plaintiffs' lawyers and the politicians' per se. I'm going to listen to the evidence." Eric Goldman, Ossana Clara University School of Law. Thank you very much for your time. Now, coming up on the show, "Lift's earnings are outlated today. We're going to preview what to expect. That's next. This is Bloomberg Tech." [Music] "Lift earnings are outlated today. And less than a week after rival Uber, it kind of disappoints investors with its profit outlook. Let's talk about what we can expect from Lyft, with Bloomberg's gig economy reporter, Nassalie Lung. We are expecting pretty healthy gross bookings, right, for the fiscal call to just gone. Yes. If Uber's earnings were any guide, they posted pretty strong 4Q and Lyft is also expected to pose pretty strong growth there. One of the strongest growths we've seen in nearly two years." Nassalie, Uber used its earnings to position itself structurally and from a personnel perspective for its robo-taxi era. You know, we've spent a lot of time with Lyft, who planned to do the same, right? What do we expect them to communicate in earnings in that respect? Lyft is going to roll out AVs in a couple of cities this year as they announced last year. Those are Dallas and Nashville. So we might hear some of their row-up plans today and also hear them talk about how their fleet operations, units, subsidiary, flex drive might help with that. And Dave Risher and the team of late have really got the memo that they need to go global. They've been making M&A. How is that speaking to the growth opportunity here? So the fourth quarter will be the first full quarter where they take into account the European business free now, which is the taxi app in Europe that they acquired last year. So they might get a boost there. And they've also acquired this show-faring business, which is this high-end ride type, which could also be well for the bottom line. Lyft actually do anything in the quarter, Natalie, that you kind of think might give them a little bit of a boost. Is there anything that they've already announced? So we think they'll show traction on. So last year was a big year for their silver product, which is aimed at elderly users. They simplified their app interface for users, so there could be a boost in the rider base there. They also boost a lot of their partnerships. In November, they announced a partnership with United Air, letting people earn miles if they'd connect their account to a lift. So that might attract more businesses there, like on AirHod rides too. How are they in terms of scale versus Uber? I mean, at the moment analysts really like the stock, 15 of them say buy, only 2 say sell. But is it a light for light comparison here? Are they always going to be the second fiddle? Yeah, like Lyft's business is 30 or 22%, market share in the US, and they're just starting with their global expansion compared to Uber, which is already in more than 30 countries. So there's still a lot to catch up there, but Lyft is on track with their three-year targets too. Bloomberg's Natalie Lung, thank you very much. I mean, the earnings in the moment carry Spotify on track for the best day in about seven years. 38 million subscribers added, quarter gone, 751 million total. It was all about the unwrapped. My average age, 37-year-old listener apparently. I think I've pipped you to the post with a 32-year-old listener, but I thank my kids for that. That does it for this edition of Bloomberg Tech. Check out the pods. You know where to find it? This is Bloomberg. I'm Carol Maser. And I'm Tim Steneveck inviting you to join us for the Bloomberg Business Week Daily Podcast. Now, every day we are bringing you reporting from the magazine that helps global leaders stay ahead. We've got insight on the people, the companies and trends that are shaping today's complex economy. That's right, Tim, we're all over global business, finance, tech news, all as it is happening in real time and we've got complete coverage of the US market closed. Gotta say, basically, if it impacts financial markets, if it impacts companies, if it's impacting trends and narratives that are out there, we are on it. We also have a lot of fun. Doing it. Bloomberg Business Week also brings you the analysis behind the headlines through conversations with our expert guests. 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