Apple AI Plan Hinges on Robots, Cisco CEO Talks Tariffs

24:34Caroline Hyde:Okay, coming up, prices of Bitcoin and Ether down following stronger than anticipated inflation. But crypto and crypto related companies have been on a bit of a tear recently to talk about what is going on in the crypto market next. Let's think about some of the names we've been looking at. Apple had a really strong day yesterday, a little softer today, 9%, 10%. Cisco, we've just had that conversation with Chuck Robbins and the market will digest his outlook. Coreweave's down 11%. It fell 21 % yesterday. It's basically the cost of its build out and its scaling is spooking investors. Check out our interview from yesterday.

25:08Caroline Hyde:It was a big one. This is Bloomberg Tech.

25:22Caroline Hyde:Welcome back to Bloomberg Tech. I'm looking at the crypto, frankly, and also sort of the industry at large. It's been like a very heavy news flow 24 hours. You think about Bitcoin and Ether in particular, we were pushing fresh record highs. Largely, it's like this appetite for risk assets. But then we got this PPI print or wholesale inflation print that was high. And it was a little jitters. And it's not just stocks. You see that in the specific digital currencies as well. Bullish in its second day of trading, up another 9 % after an astonishing day yesterday. We just sort of an adjacent crypto platform.

25:56Caroline Hyde:But that would indicate that in that single name, at least, Caroline, there's still a lot of bullish sentiment out there. I can't believe I did that. Gross. Let's move on. We'll excuse you and pardon you the pun. Let's stick with the crypto market and bullish sentiment across the board. Kavita Gupta is with us, founder and general partner of Delta Blockchain Fund. It's a venture firm focusing on early stage blockchain innovation. And Kavita, to that end, is it helpful or not that there is a lot of risk on attitude in the market that is pushing us into new IPOs, into the cryptosphere, when also it is dictated by macro perspective and where interest rates are going.

26:31Is that helpful for the formation of new businesses right now? Oh, 100%. But what's happening with digital asset treasuries in the market, like$500 million new e-digital asset treasuries,$500 million for hyperliquids, for also assets which are not blue chip, coming into the market directly at Nasdaq, now listed, having access, is creating a very interesting buy pressure. For the first time in the history, ETH, actually, we have a shortage of ETH available in the market to buy because we have over$4 billion treasuries coming into the market to buy ETH. That's it. And so we are seeing a lot of changes.

27:08Let's delve into that because this is the micro strategy or now strategy strategy of basically being able to hold Bitcoin initially, now moving to ETH, Solana, other assets on basically your balance sheet, using it as a Treasury, it's starting to trickle down into slightly more riskier asset parts. I mean, just look at what listed yesterday, Alt 5 on the NASDAQ. They've done a SPAC where we're seeing now they're going to be buying up World Liberty coin. Yes. One that you can't trade freely anyway as a crypto. And now they're having a publicly traded entity that's going to be there eventually to buy up a load of that asset, it's got, you know, the Trumps involved, the Wyckoff's involved.

27:49Is it good to see that happen in your ecosystem? I think it's good and bad at the same time. The good is that there is an appetite. There are people who are pumping in a billion dollars into entities like this, right? So there is definitely a demand for it, which is really good for the crypto market. The downside is, where does the buck stop, right? And so we are now seeing assets which don't even have a billion dollar FTV in the market coming in and raising 300 million, 400 million and completely going crazy. And not only in the U.S. From retail investors? Who are they raising? A bunch of them are crypto investors.

28:25Like most of the crypto funds, including ours, are now doing a lot of digital asset treasuries. But apart from that, also a lot of retail investors and institution investors who do not have access still because there is no ETF of Solana. There is no ETF of SOE, say. So where do they get access to these? And that does raise a question. Hey, is it another pump and dump on the Wall Street from crypto market to now Wall Street? And who is really going to have a real exit liquidity here? It's still going to be the insider circle or outsider? Or is it the new landscape for it, at least for next two and a half, three years, till we have the Trump government?

29:03Caroline Hyde:Kavita, you invest at the earliest stage, at the bottom of the curve. those founded on the technological underpinning of everything we're talking about. But I see Robinhood and Stripe and the bigger fintechs and the banks looking at stablecoin in particular, wanting to do their own thing. How disruptive is that to you? You know, if at that scale that activity is happening and you have all of your portfolio companies doing something at a different scale. Yeah, it's very fascinating. Thanks for that question because now we are completely as an early stage investment firm. We are going into a space where we have demand for so many acquisitions of our companies and so many brainpower demand.

29:42Like some of the top banking CEOs, which four years back would not even give me a second in their schedule, are now hosting us for dinners, trying to understand how are these cross-chain stablecoins going to settle, how are the money markets and repos and all these yields are going to happen. and everybody wants to do their own stablecoin settlement platform and want to issue their own stablecoin. I have a feeling in next year and a half, not only Circle, we're going to have like 20 IPOs of some of the top companies, Stripe, Robinhood. I'm pretty sure Square is going to come on the block for that.

30:15Facebook and Instagram will have their own stablecoin. It's only going to be about who's going to have a distribution and everybody's going to have their stablecoin blockchain platform now. Okay. More broadly, if everyone's getting into the space of stablecoins, if we're seeing companies being developed and more and more activity in this space, how do you protect any downside here? Or is it just doing your due diligence, ensuring that you understand how tradable the asset is that you're getting into, and indeed what the future of actually the digital asset is from a project perspective? I think the fundamental of investing in digital assets will always remain the same technology.

30:50Is it scalable? Of course, now we have a new exit place, acquisitions by some of the top companies. So is it an institutional adoption product? Can the founders take it to, let's say, a top bank and say, hey, we can settle all your repos on this? But the other part of this is if I just look at the liquid fund, which is doing way better than a lot of early stage investment in the technology platform, just because where the market is today, I'm realizing that digital asset treasury's trend is not done yet. It's going to go and it's still not there at the peak because more and more people in Hong Kong market, UK market, a lot of smaller European and Asian markets are now suddenly waking up to it.

31:29And that's the demand we are getting. Anything under billion dollar FTV is now going into those Asian markets and completely raising another layer of investments. And that excites me, bothers me and makes me very curious at the same time.

31:46Caroline Hyde:Kavita Gupta, General Partner at Delta Blockchain Fund. It's great to have you back on the show. Thank you very much. Now coming up, Parag Agrawal, the former CEO of Twitter, who's squared off against Elon Musk. Well, he's back. He's got a new AI startup, and he's going to join us to talk about that experience and what he's doing now. This is Bloomberg Tech.

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34:24Caroline Hyde:The former CEO of what was then known as Twitter, Parag Agrawal, has moved on from his days sparring with Elon Musk. And he stepped into the world of AI startups. Agrawal's new company, Parallel Web Systems, is building a tool to help AI agents navigate the web. Parag Agrawal joins us now. It's good to see you back in the world of technology, at least publicly back in the world of technology. I was reading about Parallel Web Systems, the idea that the customer is the AI agent, and there's just a place to start. Tell us about this startup, what you're doing, why you're doing it. Hey, Ed. First of all, thank you so much for having me.

35:02After leaving Twitter, one of the things I was doing was just writing a bunch of code, tinkering around. I was actually building AI agents a couple of years ago that were mostly collecting information from the web, bringing it back to me so that I could read it. And I had a couple of realizations doing so. One, that the AI agents are going to be the primary customer of the web going forward. they will use the web a lot more than humans ever have. And two, the web that exists isn't built for them. It's not ready for them. Everything I and so many people have built over the last 30 years has been built for humans.

35:46And for AIs, their needs are different. And that's the problem that we're starting at Parallel. And that's why we describe AI agents as our primary customer for all the technology that we're building.

35:59Caroline Hyde:There is actually some news that we're breaking here, right? which is that you've raised around$30 million for Parallel. That's a lot out the gate. Just tell us about how that came about and the team that you've built.

36:14When we started with this vision, our vision is like a big vision in order to really transform what the open web looks like. Doing so requires reimagining from the ground up every part of the infrastructure that spans the crawl, the index, ranking systems, reasoning systems, completely new interfaces built for AI systems. And as we sort of thought about what it would take to build all of this, I think that was the appropriate amount of money to raise. The team we have is also the one needed to take on this problem. The team around me is the team that built a lot of the key primitives of the current human web, whether it be at social networks like Twitter and Snap or at Stripe and even marketplaces at Airbnb.

37:07And so the best people who've sort of built the previous version of the web, recognizing ways in which it does not serve the needs of what's coming, have now come together to build this future web. Farag, Ed started off by saying the customer is the agent here, but who actually is the customer? I'm seeing the integration with Lindy, for example, with AI agents. But more broadly, who buys you? Whose problems are you solving? Is it those of open AI and perplexity who are busy building the agentic platforms? I think one way to think about our customer set, right? If you think of any piece of software or any workflow, both of those are changing.

37:47They're changing by incorporating models like LLMs into them that give them intelligence. Now, once you have those, it almost feels silly to not have access to the open web in order to serve your customers or do your workflows. Let me give you an example. We work with a large insurance company. One of the things they do is underwriting, wherein there's a bunch of people that spend 30 minutes, perhaps even two hours, understanding a business they're about to underwrite, to understand everything about it and discover all long-tail risk signals anywhere on the web. Now, they've been doing that with human operations forever.

38:30As we started working with them and they incorporated our APIs into how they do things, combining all of the data from the web with all of the internal proprietary information that they have collected, they're actually able to outperform humans meaningfully, not just in terms of cost and how fast you can do things, but in terms of quality, because it turns out humans hallucinate too. Briefly, Praag, you built Parallel Web Systems hot on the heels of a very combative few years having led Twitter, but you were known as building the machine learning systems over a Twitter and now X. Praag, what lessons have you learned to bring to this new company?

39:12One, a lot of the lessons from the past no longer apply. When you're thinking of building machine learning systems, when we're building those at Twitter at 2014, they look very, very different from the systems we are now able to build, the velocity at which we're able to move, and the kinds of problems we are able to take on. What remains similar, though, for people who've been doing machine learning for a while, is the mindset of solving problems end-to-end, understanding evals, dealing with stochastic systems. and I think those are the lessons that truly inform us.

39:50Caroline Hyde:Parag, Sun Valley 2022, I was there. I remember seeing you there and then everything that followed just for the first time reflect a little bit on what happened and yeah, please. What happened was we built over 11 years that I was at Twitter, one of the most consequential platforms to exist. It allowed everyone to speak and hear directly from others. And there is nothing like it. And I'm very proud of what I was able to achieve there with my years. Now, of course, there is a lot more to be done. It remains a platform that matters in the world. But my new mission pulls a thread from that, which is how do you keep the web open?

40:49It's the same mission around allowing everyone to publish openly on the web, around every AI being able to access what everyone is publishing freely. there is a risk on the open web wherein we might have a bunch of paywalls and silos and an AI model from one vendor is able to access certain parts of the web while the agent you might run on your computer using OpenSWI software cannot. And that's not the future I want. And that's why we're building Parallel. All right, Agrawal. Thanks for joining us. Founder, CEO of Parallel Web Systems and of course previously the CEO of Twitter.

41:37fitness band maker whoop is refusing to disable its blood pressure tracking tool following warnings from the fda saying that the company is operating as a medical device joining us now to discuss whoop ceo will ahmed will what's your view that the fda does not have authority in this moment your wellness not medical device well thanks for having me on you know whoop spent the last three years developing a very innovative feature called blood pressure insights. And this takes our wrist-worn wearable alongside a calibration with a cuff and is allowed to provide you with a daily estimate of your blood pressure.

42:16And in turn, it also then gives you insights how your blood pressure may be affecting other things in your wellness. This could be sleep, stress, nutrition, a variety of different wellness factors. And the FDA has come forward saying that they believe that this should be regulated. Now, the 21st Century Cures Act makes it very clear that wellness intended features are not supposed to be regulated by the FDA. And the FDA is intended to actually just regulate medical devices that are diagnosing something. So there's this key question of intended use. And you can see this with other physiological metrics, like heart rate monitoring, for example, where heart rate monitoring has wellness applications and medical applications.

43:02The wellness applications might be things like exercise or stress monitoring or sleep monitoring, and we do all that. And then alternatively, there could be a diagnosis for AFib, and that would be an example where the FDA would - So, Will,

43:18Caroline Hyde:that's what the FDA misinterpreted, right? But you're a smart guy, and you employ lots of smart people. Why not just go through the FDA process in the first place, kind of foreseeing that this might come up? Well, you have to understand there's different use cases, right? One use case for blood pressure is around wellness, and there's other use cases that might be a medical diagnosis. And we're certainly looking at, you know, cleared products as well on a longer term horizon. But we're providing a lot of value today, and we're following the law. Again, the 21st Century Cures Act makes it very clear if a product is intended for a wellness use case, it's not supposed to be regulated by the FDA.

43:58So then the fundamental question becomes, does blood pressure have wellness intended use cases? We believe it does, right? There's an avalanche of peer-reviewed research that shows that blood pressure, not surprisingly, is influenced and influences other aspects of your wellness. But Will, why call it medical grade? Why market it that way? Well, we recently came out with the WHOOP 5.0 and the WHOOP MG. And a key distinguishing factor between the WHOOP 5.0 and the MG is that the MG has a medically cleared feature on it. Now, both of those products have a number of wellness features associated with it.

44:37The WHOOP MG happens to have an ECG monitor as part of that that can detect AFib. And by the way, we spent two and a half years working with the FDA to have that be a cleared feature. So that is the distinguishing factor between those two hardwares. And I want to be very clear, in the app, there's an enormous number of medical disclaimers explaining what is for wellness and what is for medical capabilities.

45:05Caroline Hyde:Well, you've said this is a misunderstanding. What happens next? Will you continue to fight the FDA on it? Or in the background, are you trying to reach some solution? We have a lot of respect for the FDA. I mean, we've engaged with them on a number of different features over the years. We think in this specific case, they have it wrong. And so we're going to continue engaging with them on it. We've responded to their warning letter outlining how we feel about this and why we think we're following the law. And we look forward to continuing to engage with them on it. Well, that must take up headspace and ultimately your time.

45:41How does that impact your future product roadmap? How does more broadly the FDA acting this way affect innovation more broadly, do you think? Ultimately, I think that, you know, innovation needs to be able to thrive in the United States. Whoop is one of the first wearables in the world that can measure blood pressure accurately from the wrist. That's a really big deal. And it's also being accepted in 50 other markets around the world. So, you know, we want to make sure that there's policies that are consistent here in the U.S. that really allow companies to innovate and to operate. It's also worth noting, you know, we have a lot of people using this every single day.

46:21And overwhelmingly, if you look at the feedback from our members, they absolutely love this feature. And they talk about how accurate it is and how it's helping them understand their wellness. So we feel like we're on the right side of history and we're going to continue educating the FDA on what we're doing.

46:37Caroline Hyde:Well, very quickly, I'm not a Woot user, but I'm very conscious that in the Premier League and other international football players, it's very in the public conscience. I just wonder, like, is this a good PR moment for you to fight America's regulator? I think in the long run, we'll be on the right side of history. And that may be in a very short period of time, too. I think that fighting for innovation, fighting for Americans' access to health data is the right thing to do. And, you know, I've spent 13 years building this company. When I first started, the idea that you could measure sleep or heart rate accurately from the wrist seemed impossible.

47:15And now we're able to do blood pressure accurately from the wrist. that's a really big deal. And I think it should be celebrated as long as there's the right guidelines in place and the right education in place for members to understand how to use it. And that's what we've done with this feature and it's why we're proud of it.

47:33Caroline Hyde:WIB CEO, Will Ahmed, thank you very much. Caro. Great conversation to round out what is the end of this edition of Bloomberg Tech. Ed, programming note, make sure to check out the next edition of Bloomberg Tech Europe. Tom McKenzie can be exploring how AI is changing the way we work. 6.30 a.m. London time on Friday. And given I have 20 seconds I didn't expect, we have a podcast and you know where to find it. It's on the internet and it's also on the Bloomberg platforms. And you should listen to it to recap the show. From New York City and London, this is Bloomberg Tech.

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