Meta Introduces Palm-Sized Device to Use Muse AI

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2:01Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, this is how it works here. Mandeep Singh walks in the door, and I just say, I got a whole list of things to talk about, Mandeep, but I'm just like, what do you want to talk about it? Mandeep Singh, global tech reporter, I'm sorry, research head for Bloomberg Intelligence, joins us here in studio here. Everybody's talking about this Muse thing. Now there's a Muse charm from Meta. Yeah. I already have the, I just downloaded the Muse app on my phone, so I feel like I'm technically on the cutting edge here.

2:39What's this charm thing? I know that's not usually your belly wick. That's the kids, but. Well, they are launching a new device now. A device. A device where you can interface with their Muse agent using this device. And everything still runs on the cloud. Nothing is on the device. But it's an easier way for you to interact using voice. And instead of, you know, opening your app on the smartphone, This device is listening to you all the time, and you're pretty much talking to it as if it's your agent. Do I put it on my keychain? Do I put it on my Bloomberg lanyard? What do I do with this thing?

3:20Either is fine. He's going to lose this thing in about five minutes, by the way. Yeah, I'm still looking for an earbud down here in this radio studio. But the good thing is the device can figure out if it's lost and, you know, send you some sort of a message that, hey, Paul, you may have left the device. He's got like a million engineering degrees and he's talking about like losing a device. I mean, is this the 2026 version of the Tamagotchi? Well, that's what I think some people are comparing it to. But at the end of the day, they're saying this is a persistent agent that is running 24-7. Whether you initiate the agent through the app on your smartphone or through this device, it's going to work behind the scenes 24 seven.

4:08You don't have to constantly prompt it or engage with it. Once you give it a command, organize my calendar, it's persistent. It's going to do that 24 seven without you having to keep prompting it. And that's the promise. That's why people are so excited here. Is Mark Zuckerberg aware that people are very upset about AI, you know, and how it poses an existential crisis? They don't want data centers near them. Like this is the time to introduce something like this in my pocket. Well, what he's trying to, I think, sell is the functionality, the fact that it can really make you super productive by doing your mundane tasks, like organizing your calendar or, you know, cleaning up your emails, basic tasks, ordering stuff from the internet.

4:54Obviously, it's not Amazon anymore. But they added a few more partners, Walmart, Best Buy. So it sounds like he wants to develop an ecosystem around it, but it's still early days. And I expect Google and Apple to definitely launch something along these lines because it's their turf. It's the new streaming wars. Yeah. I mean, the stock market, like the Stock's up 3.2 % today. It's at a 52-week high. It's not at an all-time high, but darn, within a couple of bucks of an all-time high. So to the extent they ever lost their mojo, which I don't think they really ever did, they kind of got it back a little bit here.

5:36I mean, I'm thinking what their 2027 CapEx number is going to be, given what has transpired. Come 3Q earnings call for Meta, I expect them to raise their capex at least 60, 70 percent, if not higher. And they are right up there in terms of justifying that capex, even though I'm not very clear on the monetization model here, because everything that they are giving to the consumer is free. And Mark Zuckerberg said last night they will take a cut of all the transactions they will facilitate. So one to two percent cut or even higher. And they take your data. I mean, even more than they already have.

6:17Yes, well, that's part of the ads that they show on, you know, the 3.5 billion users they have across their family of apps. So all that is a given, but they seem to be very excited about using all the data center capacity internally. Remember, Google rents out 50 % of their capacity on cloud. 50 % they use on their apps, 50 % rented on cloud. Amazon rents everything on cloud. they use a little portion of it internally. Microsoft rents everything on cloud. Meta was the only one who was betting big on using everything internally. They've found that use case where they can deploy a lot of that capacity internally.

7:01I just feel, is it going to be worth 150 billion plus in CapEx and their ROI on that? That is not clear because they haven't given us a monetization model. But with Meta, we know if something is sticky, they will find a way to monetize that eventually. I know everybody's getting in their Christmas stocking this Christmas. A little muse charm there. How much is that going to set me back? Well, they subsidize all their devices. They launch a lot of, you know, audio AR glasses, VR glasses. Everything is way below the Apple price point for Vision Pro. So Meta believes in subsidizing the hardware because they really want to own that device.

7:39They don't want to be reliant on Apple or Google. I have a hard time believing that parents are going to get this for their kids, especially after all the Instagram stuff. And, you know, like, do you really want to embed your child's life even further into the meta suite of products? Everyone's trying to break that link. I know I'm getting John Tucker for Christmas. That's a good gift. I'll be bringing it back. Sorry. Just for what it's worth here, CapEx for meta in 2023, 27 billion this year, 140. Next year forecast, 200. So that is a different company, a different stock than people have historically owned.

8:14Stay with us. More from Bloomberg Intelligence coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carman report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

9:04Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question? Will these AI bangers have any staying power or just be one-hit wonders? That's the Bloomberg Tech Minute, brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode.

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11:48You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. We've been talking about private equity. Actually, we've been talking about higher interest rates and the impact it's having on stocks, bonds, commodities. The economy. The economy. How about deal flow? And for our private equity friends that have just been rolling in it for 20 years. Well, they really made their bones when interest rates were super low. What happens now that interest rates are higher and will likely stay higher?

12:25And it turns out a lot of people who had been working in the private equity industry are now looking at the investment banking industry and saying, oh, maybe I'll go back there. All right. Allison McNeely joins us here, Bloomberg private equity reporter. The story, private equity's path to riches is getting harder to follow. Allison, thanks so much for joining us here. Talk to us about your story. What's going on in the world of private equity? What are those folks doing these days? I think what we're seeing in the industry is some folks reevaluating whether private equity is really the best bet for them long term.

12:55You know, as Scott was saying, you know, it was kind of like where everyone wanted to go for a long time. There was a lot of money that was made. But in the past few years, as dealmaking has become harder with interest rates higher, there are less exits. And when there's less exits, there's less carried interest or sort of the slice of profits to dealmakers being paid out. And, you know, some folks are looking at entrepreneurship as an option. Some people are actually going back to banking, which is really interesting because I think for a while there, banking was sort of perceived in the industry as this two year slog you had to endure before you could go to the buy side and make real money.

13:31And now people are looking at the investment banking slog as, oh, you know, it's stable. And I mean, there's a lot of deals taking place, you know, just with M &A, for instance. It's just that the M &A does not include private equity firms exiting their investments. Yeah, I mean, you could go make money on IPOs, essentially, for a lot of the tech companies and the AI boom and that sort of thing. Johnson & Associates, the consulting firm, put out a report that said that investment banking compensation is expected to rise 10 % to 15 % this year, flat for middle market private equity, and I believe 2.5 % to 7.5%.

14:08Don't quote me exactly on that, but that ballpark for large buyout. So, you know, you can kind of see it coming through in the data right there. What are the firms, the private equity firms saying in general? Are they OK with the attrition because maybe the deal flow is not there or are they trying to retain these people? What are they saying? I think generally speaking, private equity firms, when you ask them about this topic, they say, yes, it is a problem in the industry, but it is not a problem for us. It's the other guys. Yeah, it's the other guys. Don't, you know, kind of don't don't worry about us.

14:42Scott Nuttall, the co-CEO of KKR, you know, refers to a K-shaped industry where some folks are starting to see a recovery in exits like his firm in the most recent quarter reported the best quarter ever for exits. So they're definitely seeing a rebound. Then other folks, you know, are kind of quietly saying, yeah, you know, it might take a little longer than we expected. But, you know, don't worry. Don't worry. It's going to happen. But they've been saying, don't worry. It's going to happen for several years now. OK, so you mentioned carried interest, the slice of profits that folks in private equity get paid when an investment goes really well.

15:19If you leave the private equity industry, even though you brought some of these deals to the firm, then that's it. you don't get any of that carried interest, right? Like you've given up your rights to any of that. It depends on whether or not it's vested and it depends on sort of the different firms. So, yes, sometimes you will abandon carry, but you might make the calculation that that's fine because you don't actually believe it's going to come through and it's not going to be worth what the model says it will pay. But also you could leave the industry with that carry already invested and so that will actually come to you i see when the time comes so it just depends on the where the fund's at that's exactly right when i left wall street i was approached by a couple private equity shops that i knew pretty well and that was all good it's great stuff great people but the problem is you can't get the carried interest until you participate in a fund raising they're not going to put you in an existing fund so if you're like okay so i'm going to get a salary maybe a little bonus for working it, but I'm not going to get the outsized compensation from a fund that performs well until I participate in one fundraising.

16:29And that could be years away, or it could be six months. You don't really have a good feel. Right. And it also depends on how senior you are, right? So carried interest is allocated on a points basis, like basis points in a fund. They basically take the pie out of 100. And you, managing director get 20 points and you, you know, brand new VP get two. I'm just making numbers up, but you get the idea. So if you're a more senior dealmaker at a firm, you've got points, you've got more points than a junior folks, and you've got points off of multiple funds. Right. So maybe you've got points in the 2018 fund that just did gangbusters because it was still in the low interest era.

17:11You've sold a bunch of stuff for 3x and you're happy as a clam. If you're a junior person who maybe started in the industry in 2018, 2019, and now in 2026, you're, you know, you've got some carry, but you've got carry in funds that really haven't started paying out yet. And so you're not, you're not seeing a lot right now. And that's tough because like people in their 30s, you know, they're, they're having families, they're want to buy houses, they want to like do stuff. And they don't have that. They don't have those prior gains to lean on that the senior folks do. Stay with us. More from Bloomberg Intelligence coming up after this.

17:56This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carman report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

18:40Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question? Will these AI bangers have any staying power, or just be one-hit wonders. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at chatgpt.com today by selecting Work Mode, available on Plus and Pro plans.

19:20You already know how AI is changing how everyday work gets done, how much ground you can cover, and how fast a team can scale. To stay ahead, you need the tools that give you a competitive advantage built for this new era. Welcome to Agentic Revenue. Adio is the CRM for this world. It meets you where you work, compounds every customer signal into context, then acts on it across your pipeline to let you move in on match speed and scale. With agents and automations for every job in revenue, Adio orchestrates your work around the clock. Built to handle the scale of your workloads, extensible with API and MCP, and with the infrastructure to keep up with your most ambitious agents.

19:57Loved by high-growth startups like Granola, Modal, and Etched, Adio runs the work behind every win. That's Adio, the agentic CRM, the intelligent system that never sleeps. Picks up leads at 2 a.m., catches renewals before they slip. Hands you the answer before you ask. Try Adio free at adio.com slash iHeart. That's adio.com slash iHeart.

20:23If you like YouTube, you'll love YouTube Premium. It's destroying. Athlete, creator, and YouTube Maxer. YouTube Premium enhances how I use YouTube with awesome features like offline downloads so I can download my favorite training videos before I hit the gym. So no Wi-Fi doesn't turn leg day into loading day. Plus, I get ad-free videos, background play, and so much more. YouTube Premium is like YouTube got some extra gains. Try YouTube Premium for two months free at youtube.com slash premium. Hey, what's up, guys? It's Haley Bailey. Okay, I need to tell you about something. I just got YouTube Premium.

20:57It's got tons of awesome features like offline downloads, so I can download my favorite videos before I travel and watch them whenever I don't have Wi-Fi. Because we all know airplane Wi-Fi is the worst. I get ad-free, I get backroom play, and there's like a ton more in there. You should try it. If you like YouTube, you'll love YouTube Premium. So try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies. Terms apply. Cancel any time. That's a mouthful. You're listening to Bloomberg Intelligence with Scarlett Foo and Paul Sweeney on Bloomberg Radio. All right, Scarlett Foo and Paul Sweeney, we're live here in our Bloomberg Interactive Broker Studio in New York City.

21:35We are streaming live on YouTube as well. I think where we are with this AI narrative in the marketplace is, okay, we know who's spending money. It's big. We know who's financing the money, debt and equity markets. Now the question is becoming, all right, what's the ROI on this spend? What's the return on this investment here? I think our next guest can help us out a little bit here. Garima Kapoor joins us. She's a co-CEO and co-founder of a private company called Minio out there in Redwood City, California. Garima, thanks so much for joining us here. How do you talk to people about enterprises adapting AI and what type of returns they should be expecting?

22:18How do you think about that? Thank you for having me, first of all. And, you know, enterprises, everyone is excited about AI and for all the right reasons. For enterprises, they are in different stages of the journey when it comes to AI. You know, there are certain applications like software engineering or customer success where AI is getting heavily leveraged on. And that is definitely increasing the productivity of the employees. But how much of that productivity is translating into the actual ROI? For example, if you're using AI to build your software, is it having a meaningful impact in resulting in the time for shipment of your product?

22:58Or is it resulting in less bugs in the software? All those things. So that journey from productivity to ROI, the data is still not clear on that. But enterprises are definitely increasingly adopting the AI for making their lives easier and more productive. Grima, let me rewind a little bit and ask you to just describe what you guys do at Minio in the AI space. Yeah. So Minio provides the data and memory foundation for enterprise AI. As I was discussing earlier, you know, the models are getting extremely commoditized. So for any enterprise to be successful in their AI journey, they need to start bringing all their organization together, organization data together in a secured and a governed way and then expose it to the AI or the agents building the right kind of context to expose for the reasoning engines because last thing you want is expose all your raw data for cloud or open AI to leverage on it and take all the intelligence away so Minaya provides that software infrastructure software for bill for providing data memory and context without burning a hole in your pockets when it comes to tokens.

24:09So enterprises, where are enterprises broadly defined in terms of adopting AI? I mean, just from the consumer level, just yesterday from Meta, we got the Meta Muse. So I mean, that's a couple of days ago with that announcement. So we know consumers are adopting AI. How about enterprises? Enterprises are adopting AI. And like I said, it's in very well-defined use cases like for software engineering because you can see the productivity like Claude Opus is able to or Fable is able to do a really great job and even in our organization we have mandated that it is AI first and all the engineers need to stop writing handwritten codes.

24:50It needs to be generated by AI and that's the direction which I see a lot of the other enterprises also adopting internally. So we do see that adoption, but it's on very specific use cases, not across the board. Customer success is another use case where we see adoption of AI getting increasingly used so that the tickets for the customers who are reaching out to the enterprises for any kind of issues, those tickets can get managed effectively and so on and so forth. So we do see adoption of AI, but in a very specific use cases. There's been a lot of talk, I guess, just recently from some of the leaders of these AI companies talking about maybe putting some guardrails on this technology.

25:33And there's been a lot of pushback, most notably from President Trump on that. What's the feeling out in the valley, how this could play out, should play out? Yeah, I think guardrails are important. If you see all the innovation that is coming out in AIs, either by Front Rail Labs, which is OpenAI and Anthropic or with open source models, which is Alibaba, DeepSeek models, right? And as private companies, as they should, they're motivated by their own personal gains and rightly so. So an AI is a public good that is going to impact everyone. All of our lives are going to be meaningfully impacted.

26:09So government has to step in and build at least a regulatory security framework and validate that this is the security framework that looks like and every model needs to pass through that security framework to be safely be adopted by consumers and by enterprise. So I'm absolutely in favor of having government have an independent regulatory authority that can keep the frontier labs, that can keep the open source models in checks when it comes to the security. It's a little different than historically out in the Valley. Most folks kind of appreciated the light government touch, but you think this time could be different?