Smart Ring Maker Oura Delays IPO

0:00Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans.

0:42This is Robert Smith from Business History. If you're listening to this, there's a good chance you're a small business owner. And like every small business owner, you started with a dream to do what you love and watch it grow. What you probably didn't dream about? Keeping up with cyber threats. That's where MasterCard can help, with access to tools that help identify cyber threats to better protect your business. Building your dream business? Priceless. For cybersecurity in a changing world, there's MasterCard. Learn more at MasterCard.com slash small business. Bloomberg Audio Studios. Podcasts.

1:18Radio. News. You'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. Well, I know the Charlie Pellett, John Tucker, the hipsters, they're all into the Oura rings. They want to know how they're sleeping. Are they getting enough steps and all this kind of stuff? I'm not into it, but it's a company. It's a big and it had planned to go public here. But I just saw some news today or delayed a U.S. initial public offering setting uncertainty in the market.

1:59Anthony Hughes joins us here, equity capital markets reporter for Bloomberg News. Anthony, I'm not buying it. We're near all time highs here in the market. I got a VIX, you know, down like 15. As an IPO banker, this is what you dream of. What's going on here with Orr, do you think? Well, I think the excuse that there is market uncertainty in this case does hold. The company itself is, you know, obviously doing very well at the moment, but people didn't like the deal, some aspects of the deal, you know, particularly the valuation, but also the structure of things like the lock-up. And, you know, there is a track record of these sorts of consumer hardware companies being, you know, sometimes do well initially, or they have strong financials for a few years, and then they fade away.

2:41So, I mean, I think the company tried to address some of these issues around the fattishness of some of these consumer hardware products, but ultimately it was pretty bad timing. And, you know, they were probably looking at pricing below range if they really wanted to get this done. And, you know, I mean, I guess you could say to the company's credit they held firm. They decided not to cut the price and the range. They have enough conviction to, you know, take the deal off the market and look to go public maybe another day. But obviously the market, the investors are lacking conviction in these sorts of, you know, and actually most IPOs at the moment, there's a bit of a lack of conviction.

3:18I mean, I think a lot of people are focused on Anthropik later in the year and a lot of the other stuff doesn't really measure up. So when was it scheduled to price? It was scheduled to price tonight. So this is really a postponement on the eve of, you know, the 11th hour. And that's usually what happens when there is a postponement. It tends to happen right at the last moment, basically. And so when you see something at the last moment like this, it suggests that they weren't getting, I guess, the order flow that they were really looking for at the price level they were looking at. Yeah, yeah.

3:45So, you know, there was a marketing process, a roadshow that went on in the last week or so. And, you know, I think it was pretty slow going. I think because of these market conditions, a lot of the long-only investors who you really want to support these sorts of deals, you know, less so the hedge funds, they were hesitating. And I think some of them we know passed, and many of them passed. Really? And I think they were holding off to see whether the market conditions would improve as well. So, you know, I think the fact that the quality of the demand that they were getting was not adequate was one of the factors in the decision not to go ahead.

4:18Is this deal or the pulling of this deal, is that indicative of the IPO market today? Is the IPO market a little softer than maybe people would like to see? Oh, absolutely. I think that, you know, we've seen three postponements now in three weeks. We saw an insurance company go postpone last week. and the week before that we saw another company postpone. So it's becoming a trend. And basically investors are lacking conviction on these companies, particularly paying up big valuations, you know, and really IPOs are like a lot of business transactions, getting people to agree on a price. And, you know, I think the sellers of these assets are wanting more for them than the buyers are prepared to pay.

4:57And that's basically that disconnect is widened. You know, we've seen a bit more of a focus on macro issues, rising rates, stuff like that, which has made it tougher for growth-oriented companies to get these really high valuations. And people have been more picky and discerning about the quality of the companies that they've been prepared to invest in. Interesting. What is the latest on Anthropic? That's probably maybe one of the reasons that some of these IPO buyers are waiting, because they think they may have the opportunity to put serious capital to work. Yeah, so I think the interesting thing about Anthropic is that we were assuming maybe it'd almost be public by now but i think there's been a lot more uncertainty around the company that's been you know that's been evident in all the all the public discussion around safety and regulation and you know the future of uh of uh ai and also um what's happening in terms of the releasing of releases of these competitive models these are all factors that are added to some level of uncertainty i think it's been quite prudent for them to to delay and the word is they're waiting till after the election now and i don't know whether they're expecting a different political environment to have an impact you would sometimes those factors are a little overstated but that could be a factor uh here but um you know i think the buy side is pretty still pretty keen for this company the the numbers that you've seen floating around show very strong growth uh growth that we've you know it's mind-boggling growth that we don't see at scale that we don't see with um companies you know almost ever but ever and uh you know this is a new era for ai but I think the buy side is pretty eager for Anthropic, just not very eager for most other IPOs that are out there.

6:31Yeah, it was reported earlier today by Axios initially that OpenAI's annual recurring revenue near$70 billion. So the numbers continue to grow pretty dramatically. Yeah, so I think that's another factor is the competitive environment. And, you know, I think while Anthropic is sort of hoping to push ahead here this year, and Ape and AI is pushed into next year, but I think there's quite a serious competitive process going on here where these two companies are trying to assert who has the superior model, who's going to dominate this market going forward. But I think investors are probably looking at the situation now and thinking there are going to be multiple players in this industry.

7:07And if you look at some of the tech themes over the past few decades, I mean, I think maybe some of the Mag 7 companies who dominate our market today really had a dominant position in certain areas of technology. And maybe with large language models and AI, it's less certain that that's the case. Stay with us. More from Bloomberg Intelligence coming up after this. Some people treat ChatGPT like some kind of smart search engine and some use it to get work done. ChatGPT work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work.

7:48It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. A business gift is never just a gift. It's a thank you, a milestone, a moment of appreciation. It's a message about how much someone matters and what your brand stands for. At 4imprint, you'll find thousands of customizable options, like premium apparel, branded drinkware, tech, totes, and more, each chosen not just for function, but for meaning.

8:34You can tailor every detail, your logo, your message, your presentation, so your gift feels personal and on-brand. And with expert support, dependable service, and thousands without a setup fee, creating something thoughtful doesn't mean making it complicated. Every order is backed by 4imprint's 360-degree guarantee, so you can be 4imprint certain it'll arrive exactly as expected, on time, and with the care your brand deserves. Because when the moment matters, the right gift speaks volumes, and the right partner makes it easy. Explore gifting with purpose and certainty at 4imprint.com. 4imprint.

9:094certain. You'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. OpenAI, of course, this is the privately held AI lab company. According to Axios' Madison Mills, OpenAI's annual recurring revenue is nearing$70 billion. Enterprise sales more than doubling since July. So perhaps this is a sign that OpenAI is catching up to Anthropic, which we know had kind of overtaken OpenAI. Speaking of OpenAI, the company is actually holding back a version of its Astra model while it establishes stronger safeguards for AI development.

9:56And of course, this suggests heightened risks after all these spade of recent rogue AI hacking incidents. And people are kind of mindful of all of that. Let's put all of this together into context and bring in our Ed Ludlow. He is our B-Tech anchor on Bloomberg Television, tech reporter for Bloomberg News joining us. And of course, Ed will be at the OpenAI Development Day later today as well. Ed, just put into context the headlines that we just gave you about OpenAI, this Astra model being held back, the annual recurring revenue approaching$70 billion. What does this all suggest? Well, on the ARR, you know, Anthropic, its great rival was tracking at sort of$74 billion.

10:37dollars ARR as of the third quarter. So that's kind of fun. What it tells us in aggregate, right, is how difficult it's going to be for these frontier labs to balance the growth their investors want to see with both of them destined for the public markets with making decisions like hitting pause, which can have commercial impacts, right? So the news headline is that GPT 6.1 Astra was being evaluated internally. It was a model, a new model. And they basically said that this model is not behaving reliably in the way that we thought it would. So out of safety concern, we're just not going to release it.

11:21And, you know, that is OpenAI, to be fair, making good on what it has said over the last 10 days, that it has some kind of more structure in place on how it makes those kinds of decisions. Ed, how are folks out in the Valley thinking about the AI folks there thinking about their policy for guardrail development of AI versus what we're hearing from President Trump, Vice President Vance, and maybe some others here. It feels like it's getting kind of political here. So there are certainly camps emerging, right? Different schools of thought. It's very rare that Sam Altman, the CEO of OpenAI, Dario Amode, the CEO of Anthropic, and Elon Musk agree on anything.

12:00They agree, it would appear, that it is sensible to pace the development of what the capability of the model is so that your work on safety can catch up. The camps are distinguished by who they think should oversee that. You know, someone like the president or David Sachs or even Jensen Wong are like, you guys, the AI labs, you're the ones that see this. You're the ones working on it. If it's not safe, don't release it. And so today with OpenAI, it's a pretty concrete example of that. And the Frontier Labs themselves are also saying we want some third party here to kind of check our work. And those in D.C.

12:43are saying that's fine. But at the end of the day, you're still responsible. You can't sort of pass this off onto someone else. Well, I guess we woke this morning to some reporting out of Reuters, which Tom Keene was calling out repeatedly for good purposes. is Anthropic warned that its technology poses catastrophic or existential risk to humanity. That's a risk factor in their IPO filing. What does that language mean? I mean, what's going on? Yeah, I mean, there was reporting that this would get included in the prospectus. The S1 has not flipped public. Someone somewhere has got their hands on it, and we're trying our best.

13:23It's funny because I went back to the S1 from SpaceX and there were loads of risk factors in there, but not this idea of existential threat to human life. I guess that what people out here would say this points to is Dario Amodei, the CEO of Anthropic, trying to be consistent. When all of this emerged, the idea that in a series of interviews and also in that essay that he published last month on pacing the frontier, that his motivation for doing this, giving a warning signal, was marketing. That might seem paradoxical, right? But if you're going, oh, this is super dangerous, potentially. It also kind of is empowering and gives momentum to an IPO because you're basically saying, like, so cutting edge is this technology that this is the degree of risk we're talking about.

14:16Stay with us. More from Bloomberg Intelligence coming up after this. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects.

14:57Get started at ChatGPT.com by selecting Work Mode, available on Plus and Pro plans. A business gift is never just a gift. It's a thank you, a milestone, a moment of appreciation. It's a message about how much someone matters and what your brand stands for. At 4imprint, you'll find thousands of customizable options, like premium apparel, branded drinkware, tech, totes, and more, each chosen not just for function, but for meaning. You can tailor every detail, your logo, your message, your presentation, so your gift feels personal and on-brand. And with expert support, dependable service, and thousands without a setup fee, creating something thoughtful doesn't mean making it complicated.

15:38Every order is backed by 4imprint's 360-degree guarantee, so you can be 4imprint certain it'll arrive exactly as expected, on time, and with the care your brand deserves. Because when the moment matters, the right gift speaks volumes, and the right partner makes it easy. Explore gifting with purpose and certainty at 4imprint.com. 4imprint. 4certain. You'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. Joining us now is Geetha Ranganathan.

16:19Geetha is Bloomberg Intelligence's analyst on U.S. media. Geetha, Bob Chapek's got a chip on his shoulder. I suppose given the way that he left the company, that makes a lot of sense. Do you agree with him that Disney needs a growth engine, that it lacks a growth engine right now? I do agree with that, Scarlett. I mean, it is absolutely true that, yes, the parks are performing well, given the current situation, given all of the uncertainty that we've seen in the economy, given what we've seen with the Comcast Universal parks and, you know, much softer attendance there. Disney still is somehow managing to hold its ground.

16:54But he's right. I mean, there's nothing there on the horizon that's super exciting in terms of, you know, a growth catalyst or a growth narrative. And it all depends on how they want to spin. I mean, investors are definitely looking at the streaming product. This was this was a business that was losing billions of dollars just a few years ago and now has become, you know, a source of profit. But how profitable it gets to be. I mean, that's the ultimate question. And we really need some more concrete numbers around that to really kind of energize the narrative around Disney. And Geetha, I think for a while there, investors were saying maybe streaming will be that growth story.

17:30Just look at Netflix. But the Netflix stock is underperformed and primarily because they just haven't had any hit shows to kind of get you all jazzed up. It kind of goes back to the old this is how media companies work. You have to have hit shows, hit movies, that kind of thing. Yeah, you're absolutely right, Paul. So the biggest problem for Netflix this year has kind of been this whole story around, you know, engagement and engagement that has been languishing. I mean, we look at some of the numbers that come out of Nielsen's monthly gauge report and they point to, you know, share of TV viewing time that's constantly declining for Netflix.

18:03So right now it's at about it's at less than eight percent of total TV viewing time. Meanwhile, you have YouTube that has climbed to record highs and it's at 14 percent. So you really have all of these media companies that are contending with, you know, a lot of viewing that is happening on YouTube, that's happening on social media platforms, on TikTok, on Instagram. So they really need to kind of tailor that strategy. And yes, you know, Disney, you're right. Disney does have that kind of benchmark from a net, you know, from the Netflix operating profit and margin perspective. But, you know, we need something more to really kind of get investors excited and for a re-rating of multiples, not just for Disney, but for the entire sector, I would think.

18:42Yeah, well said. Well, we know that Disney recently increased the price of its Disney Plus streaming service, at least the one without ads, to$21.49 a month. And if you bundle it with Hulu, then, you know, it's slightly, slightly more expensive. But that idea of bundling things is back in fashion again. How much of a difference is that going to make to the bottom line in the coming quarters? It is definitely going to make a difference. I mean, this is what we've been seeing across all of these streaming platforms. And we've seen kind of quite a noticeable change in terms of the whole profitability picture and the economics.

19:17So majority of the services that were posting pretty huge losses are now posting profits. This is important for all of these streaming services because subscriber growth has kind of come to a screeching halt. So the only way that they get to actually pad that bottom line is by increasing prices. And you bring up a very good point with the bundle. Disney has this unique advantage of the bundle, not just with Hulu, but potentially with ESPN, where you get a lot of sports content and where people absolutely want to subscribe and want to get to that bundle. So, yeah, we do think it'll be it'll be really important to to the profitability equation going forward.

19:50But ultimately, I think, Scarlett, what it's going to come down to is how exactly, and we've heard a lot of rumblings about this, but really no concrete picture just yet, in terms of what exactly or how exactly Josh DeMauro plans to position Disney+. Does he really make it the central hub for all things Disney? Do you go to Disney +, and not just get a streaming subscription, but also your park tickets, also your movie tickets? Does it almost kind of become like an agent for you in terms of getting to anything and everything Disney? So that is what is going to be really interesting to see how, you know, how they kind of position Disney +, how they position the streaming business as kind of the door to the entire Disney ecosystem.

20:30Stay with us. More from Bloomberg Intelligence coming up after this. Some people treat ChatGPT like some kind of smart search engine, and some use it to get work done. ChatGPT Work is a new way of working in ChatGPT that can take action across your apps and files, stay with a project for hours if needed, and turn a goal into finished work. It's designed to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs, and scattered information that you have to grind through to turn into something useful can just become something useful. Put ChatGPT to work on your most ambitious ideas and projects.

21:10Get started at ChachiPT.com by selecting Work Mode, available on Plus and Pro plans. A business gift is never just a gift. It's a thank you, a milestone, a moment of appreciation. It's a message about how much someone matters and what your brand stands for. At 4imprint, you'll find thousands of customizable options, like premium apparel, branded drinkware, tech, totes, and more, each chosen not just for function, but for meaning. You can tailor every detail. Your logo, your message, your presentation, so your gift feels personal and on-brand. And with expert support, dependable service, and thousands without a setup fee, creating something thoughtful doesn't mean making it complicated.

21:52Every order is backed by 4imprint's 360-degree guarantee, so you can be 4imprint certain it'll arrive exactly as expected, on time, and with the care your brand deserves. Because when the moment matters, the right gift speaks volumes. And the right partner makes it easy. Explore gifting with purpose and certainty at 4imprint.com. 4imprint. 4certain. You'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. It turns out Stanford University is not just an elite Ivy League level university.

22:35It's also an incubator of talent for tech startups, which makes a lot of sense given its location in the heart of Silicon Valley in Palo Alto, California. Theo Baker knows this well. He is the author of a new book, How to Rule the World, an Education in Power at Stanford University. It's basically on his four very adventurous years at the school. He and Janet Lauren, our higher education finance reporter, join us now in the Bloomberg Interactive Broker Studio. So, Theo, just walk us through what surprised you the most when you showed up at the Stanford campus ready to take on as I think you came in knowing how to code and maybe looking to pursue computer science as your major.

23:14And you were just totally taken away by what this school does when it comes from his young talent and how they kind of usher you along. Yeah, yeah. Well, it's great to be here with you. It is true. I showed up as a true tech geek, the kind of kid who would build a machine learning model in my room in high school and called it a fun Friday night. And I showed up and I realized that very quickly, you know, either you're in or you're out. Right. There's this system that is designed to extract talent from these teenagers. They are viewed almost as a commodity to be monetized because if you get in on the ground floor of the next Google or Instagram, you've made your own career.

23:51These venture capitalists and assorted hangers on who are constantly on campus trying to to court the next up-and-coming teenagers, these hangers-on are really a huge part of the experience for those people who belong to what I call the Stanford inside Stanford, that is, those future trillion-dollar startup founders who've been tapped on the shoulder at age 17. All right. Your freshman year involved investigative journalism that prompted the Stanford president to step down, part of this book, How to Rule the World, an Education in Power at Stanford University. Talk to us about that. What happened there?

24:23And what's the basis for this book? Talk to us about it. Yeah. Well, I describe this book as being about, you know, the kids who are being raised to rule the world and what they learn from those who already do. And, you know, in that respect, Mark Tessier-Levine, who was the president of Stanford, is a great example. Right. Mark Tessier-Levine was a world renowned neuroscientist, the first in his family to go to college. He ended up earning a Rhodes Scholarship, created an entirely new field of neuroscientific research and eventually went on to become a fabulously wealthy entrepreneur and biotech executive.

24:52I discovered in my reporting for the school newspaper across an eight-month investigation a number of research papers that he had co-authored or otherwise overseen, which contained falsified images and other forms of data manipulation. Mark Tessay-Levine eventually, as a result of this, had to retract several papers and was pushed out as president of Stanford. So you describe in the book wanting to talk to him and sort of staking him out, but you didn't want to appear like you were staking him out. But finally, you got to meet him and talk to him. and you're what, 17 years old at this point. Can you describe that?

25:26I mean, he was at that point sort of a larger than life guy. Yeah, so I've never sat with an interview with Mark Tessie Levine despite over a dozen attempts and I've sent over, I believe it's 126 questions in writing to him, the vast majority of which he has declined to answer. Instead, usually I hear from his lawyers who have tried to prevent the publication of my articles and subsequently the book that was published based on some of that reporting. You know, Mark Tessie Levine, as you say, looms larger than life. I mean, he is this iconic figure. I've tried and basically failed to find a single negative word published about him before 2022.

25:58But of course, you know, that excellence, that these positions of higher and higher acclaim that he segued to over time, masked a lab culture that changed over time. Eventually, Stanford's in-house investigation determined that he created a culture within his labs that rewarded the winners, that is the people who could produce the results that he wanted, and marginalize the losers. Theo, how did he preside at Stanford University? If this is what he was doing in his research, you know, to get his doctorate to kind of make his reputation, what kind of leader was he at Stanford University and what kind of tone did that set for the school?