Theil’s Hedge Funds Sells Entire Nvidia Stake

22:50But Mark did mention that as well in this weekend's newsletter. OK. And so more broadly, who do you think the competition is that they've had to really align themselves? I just think of this season that's just gone almost to front run Apple. We had Google with its announcements just weeks before. Samsung often tries to do it. Is that really where some of the competitive spaces come from? Yes. And certainly I have a very U.S.-centric point of view. So here in the U.S., those would be Apple's biggest competitors on the smartphone front. And then there's a whole crop of other competitors in China, which is a huge critical market for Apple.

23:25And that's a market where Apple has sort of plateaued a bit and has seen rising competition from domestic players. So it does have a lot of competition in different regions and on different fronts and at different price points, I would add. Not all of its competition is at the premium end. There are a whole bunch of brands, especially in Asia, that are making devices that are quite aggressively priced. Well said, Dana Wallman. Great to get the context. We thank you. Now it's time for Talking Tech. And first up, shares of Chinese giant CATL fell for a major shareholder move to cut its stake in the company.

24:00It's the latest pressure facing the energy storage maker as reports grow that U.S. lawmakers are actually pushing to curb imports of Chinese-made grid components, which could hit sentiment for CATL further, Morgan Stanley wrote. Plus, Google and Meta, they're among those who have delayed their rollout of subsea internet cables slated to run through the Red Sea. Now, this is political tensions and heightened security threats have made routes more dangerous and complicated for commercial vessels. The delays are said to be throttling the supply of much-needed broadband in underserved countries. Now, coming up, Ramp CEO Eric Gleiman joins us to talk about the startup's latest funding round as its valuation jumps again.

24:38This is Bloomberg Tech.

24:47Welcome back to Bloomberg Tech. Let's check in on these markets. It's a big week. It's our Super Bowl. It is NVIDIA earnings coming on Wednesday. But we're just languishing just flat on the day as we build up to that all-important macro event, let's call it. We're off by about a tenth of a percent as people try to dissect what we're going to hear from key jobs reports as well, what we're actually going to get in terms of data, the Fed. But at the moment, stocks retreating, bonds, dollar rising a little bit. Let's move on to the individual stocks. that I want you to keep an eye on, though, because Alphabet, higher, 4 % higher.

25:15It's really sustaining some of the NASDAQ today, in large part because Berkshire Hathaway's been a buyer. A huge amount, almost$5 billion worth of Alphabet shares stocked up by Berkshire Hathaway as we got in the 13F filings. Meanwhile, though, NVIDIA, we learned from 13F filings coming from Peter Thiel, his macro fund, completely sold out of his position. Like, it's only$100 million worth, not$5.8 billion that we'd seen SoftBank have flowed the previous week. Nevertheless, people either making the most of the share price rise, booking in profits, or allocating to different types of AI trade. We're seeing Dell off by 6%.

25:46There's some big moves coming from that stock today, along with HP, along with OEM peers, largely because Morgan Stanley is worrying about sluggish demand. And more broadly, the fact that the price of memory chips is going higher, it's going to be impacting some of the margins. Dell, a significant seller on the double downgrade we got from Morgan Stanley. But let's talk in the private markets now, because we've got some big news, because corporate spending management platform, Ramp. It's got a new valuation and it's big. It's$32 billion. It comes after a$300 million primary financing round and an employee tender offer.

26:17It marks another huge jump in the startup's value in a short period of time. Ramp CEO, Eric Lyman, joining us now. So, the money. Why do you need it, Eric? Oh, my gosh. Well, a couple of things. First, thank you so much for having me today. It was a joy. We were incredibly excited to raise the funds for a couple of reasons. First, The business is growing even faster at scale. Ramp's customer base and the revenue we're doing has more than doubled over the past year. And we find in the times we're living in right now, the opportunity to invest in bringing AI to businesses around the world, to automate expense reports, make it easier to run a business, and also invest further in this growth made it an easy choice to invest and serve more customers faster.

26:57Okay, because there has been so much fits and starts of how much generative AI is actually leading to productivity. Many worrying about the 95 % of pilots that aren't working according to MIT. So what's working for you? How are you showing that this is really building productivity or time management allocation where people can do the work they want to do, not just file expense reports? Something that's so unique about Ramp is we measure our own success by how much less money we've helped customers spend. And what we find is that the average customer that adopts Ramp is able to reduce their spend by about 5 % per year.

27:29and the median customer using Ramp is growing their revenue by about 12 % per year, which is more than double the U.S. national average. I think that uniqueness on ROI, on actually showing companies where they can cut out spend, how they can automate expenses, separate us, and I would argue makes us part of that 5 % in that study where people are finding AI is actually very, very useful. Are they actually demanding real detail? I loved some of the notes that I got that your treasury agents moved$5.5 million of idle cash to 4 % investments. Your policy agent prevented 511 ,000 out-of-policy transactions.

28:05Is that the granularity that people want to see? Yes, it is. Because I think for a lot of companies, really they're looking to understand, okay, I know that time is money. If you're a company, every hour that you're paying someone, let's say to do their expense reports, is an hour that they're not selling the next customer, reporting on the news, whatever really drives value to that business and ramping able to show this was attempted spend that on a different type of program would have gone through. this is time your people would have been doing these low-value tasks instead. That's automated.

28:34The spend didn't occur in the first place. The categorization is done for you. It makes a real difference. And for a CFO, I think is really all that matters. It's about the bottom line, and that's what we deliver. And it matters to the CEO because they want time allocated in a different way. I saw that Brett Taylor of Sierra and also the chairman of OpenAI was quoted saying his talent and therefore better placed to be working on the agents he wants to build, not filing expense reports. But you talk about that 12 % average revenue growth of your customer base. Is that because you are serving companies like Sierra startups rather than the Fortune 500 or the bigger kind of companies that perhaps don't have the revenue growth that startups do?

29:12It's a great question. First, I like to believe the most disciplined and well-run companies, of course, will be adopting, we think, the most cutting-edge tools in the market, which is Ramp that helps people just run leaner. But I think the majority of our customers, by a long shot are actually traditional businesses, farms, nonprofits, restaurants, hospitals, traditional businesses that you would not expect in many ways to be cutting edge adopters. For them, they're looking for easier to do expense reports. You might be used to, it's the worst hour of your month doing expenses. For them, they tap a card.

29:45It does itself. They upload an invoice. Our OCR will go and automatically categorize the transaction, set the payment date to the date it's actually due. So you're not losing a dollar out in interest and then categorizing the transaction for you. And so I think, you know, when you look at the type of businesses, these are leaders like CBRE, Shopify, the Boys and Girls Clubs of America, businesses of all shapes and sizes, I actually think are looking, especially in these times, get more from every dollar an hour. Your venture backers are a who's who list, basically. Lightspeed has led this financing, but you've got Koto, Avenir, Thrive, you've got Founders Fund, so many of them continuing to back you, but I want to go to the talent side because there was an opportunity for your employees to tender their shares.

30:26How many did or how many are holding on thinking 32 billion isn't the end of it? People at Ramp are very, very excited about the momentum. I mean, just to give you some context, Ramp is now larger than the median publicly traded SaaS company. And our gross profit, which is a great measure of our profitability, is growing 10 times as fast. And so no doubt, I think people are very, very excited. There's a lot more to deliver. The process is ongoing, but for us, whether an employee chooses to sell or not to sell, it's very valuable, especially in building a public company, to know that you have the option, that you can say yes or no to selling some shares.

31:04And we think that's a great thing. Building a public company. We'll address that timeline next time. Ramp CEO Eric Lyman's got to catch a flight, but it's been so good to have you on the show. Thank you very much indeed. Meanwhile, coming up, go back to the markets of Fiona Sincotta, Citi Index Senior Market Analyst. Look, we'll all think about those in video results. That's next. This is Bloomberg Tech.

31:33I'm Carol Masser. And I'm Tim Stenevec, 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 U.S. market close. 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.

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32:31And I'm Tim Stanovic. Subscribe today wherever you get your podcasts.

32:43The pressure on tech. Well, it's coming as traders are suddenly getting more selective about the AI beneficiaries. Two stocks that show the divergence, a core weave and Micron. Now, shares of compute provider core weave, as you see, down 44 % in a month, while Micron has seen a 24 % rise on demand for its memory chips. Bloomberg Executives reporter Carmen Reinecke has been writing about what seems to be suddenly some discernment coming from the investor base. Let's take core weave first and foremost. It's still much higher than its IPO, but why are we suddenly seeing a bit more pressure on the stock?

33:17Yeah, so we've really switched from a CapEx discussion back to an ROI, return on investment discussion. And traders are really looking for that ROI. They want to see that all of the spending on AI is paying off and that it's really making a difference to companies either top line or bottom line. And so with CoreWeave, that's a little bit of the concern. You know, they're spending a lot. Are they actually seeing a return on investment? And then the other thing with Corieve is that they're financing a lot of their growth with debt. And so the difference in balance sheet is something that's also really coming into focus here with traders saying, you know, even though they grew revenue, I think they doubled it in the last quarter, that debt is an issue.

33:55And they just want to make sure that it's going to be, you know, OK going forward. Yeah, the same sort of concerns, nervousness crept in when Meta sold$30 billion of bonds. But then Alphabet gets a pass. They sold debt. And we're seeing Amazon come to the market as well today. I'm interested then on the haves because Micron, look, memory flying off the shelves. It seems as though their share prices rocketed this year. Totally. And it's really interesting because it's all of this demand that we hear about, right? There's incredible demand. People are making these huge forecasts, but it's really balancing it with the other pieces of the puzzle on the balance sheet.

34:29I think that's why we're seeing Micron do so well as opposed to Oracle. Remember, had that huge spike when it said it had this incredible revenue forecast. but as it's taken on more debt and some of those other things have shifted, it's sold off all of that huge jump. So, I mean, as you said, Alphabet getting a big jump this year. I mean, Berkshire Hathaway's stake also probably juicing that. But we're just seeing a huge sort of diversion in the names that people are flocking to and then selling off. We want to know who's got the margin and who's got the capital to be able to afford all the investment.

35:01It's so good. Your writing's always brilliant. Carmen Reineke, we appreciate it. Meanwhile, more on the AI anxiety in the markets that are just skittish ahead of NVIDIA's numbers. Fiona Sincott is with us, Citi Index Financial Markets Senior Analyst. Fiona, we just come off this conversation with Carmen where people are deciding that they would perhaps sell some of their previous winners and certainly ones that have taken on a lot of debt. Is that something you're seeing? Yes, I think we are seeing that investors are becoming more selective over where they want to invest as far as the AI trade is concerned.

35:36I mean, previously it had just sort of been invest in AI and anything that really mentioned AI seemed to be a winner. But I think as we're sort of seeing this AI trade mature, investors are taking their time to become more selective, questioning, you know, how this is going to be monetized, what can actually be, how it will be used, rather than just jumping on the AI train more broadly. Should they be questioning NVIDIA? That's a great question. I mean, you know, it's very much in focus for our clients. This is, you know, one of the key earnings or the key earning, I would say, each season. And obviously, we have seen, you know, the likes of SoftBank, Peter Thiel selling out entirely of their NVIDIA holdings.

36:21I do think that this is a litmus test. Can the chipmaker continue powering the AI rally that has really defined the broader market tech rally this year? I think there are some reasons to be positive there. We heard from CEO Huang in October that there's$400 billion worth of orders for chips that are very much at the heart of this AI boom. So, that is a strong order book. But obviously, at the same time, we have seen really impressive rally in this share price. We know that growth is strong, but slowing. But I think broadly speaking, I think it would be fair to say that there is potential for that AI rally to still continue to run further.

37:05There are concerns, obviously, about that circular deals, around one trillion in circular deals that we've been seeing. I think that's what the market's nervous about. So, you know, any insight into that, I think, would be helpful. What about the concentration that comes with NVIDIA? I think it was last earnings report, about 39 % of orders are coming from just two key hyperscalers. Is that something that people are worrying about, not only the circularity of deals, but the over-reliance on just so few players? Yeah, I think that is going to be, again, remaining a point of concern. As you mentioned, if you've got fewer customers or fewer big clients, then obviously there is a risk that is attached to that.

37:44So, any broadening out of that is going to be good news as far as the stock is concerned. And obviously, we are seeing that the market is nervous. And I think we do see this every time we come to NVIDIA earnings in recent quarters, that there is a little bit of nervousness surrounding the numbers. And I think that does come with reason. You can't just jump blindly into a trade. But I think there is still reason to be positive. Can you balance, therefore, just the level of rationality in the market right now and whether you give credence to the worries over a bubble or whether actually this is just how growth is likely to continue?

38:23Yeah, do you know, I mean, as you point out, there have been so many discussions surrounding are we in bubble territory comparisons to the dot-com era. But, you know, I think that the market is still acting rationally. It is still questioning whether, you know, these are valuations which are acceptable. And I think that does point to a market which, as I said, is acting rationally, which does go against that bubble narrative. But I think, you know, we do need to be moving this forward as well and questioning, you know, how will this be monetized? Will demand actually be met? You know, what are the strains that could appear?

39:05So I think that is the signs that the market is asking the right questions. They're asking those questions around the equity side. What about the bond market offerings that we're seeing coming thick and fast? How much are you seeing just a desire to regain AI exposure from names like an Amazon that hasn't sold dollar-derominated debt in three years? Yeah, so this is really interesting. And I think it does point to this sort of almost insatiable demand. aren't. I think that there are reasons to be cautious. Again, going back to that idea of making sure you question investments before jumping in is always a good idea.

39:43And I think creating the bond aspect of this trade is quite an interesting take on it and one that we'll be following closely. Any calls on crypto? Do you know, crypto is a really interesting one at the moment. You know, I think we saw that rejection last week about 107 level. But I think, you know, the fact that we've taken out some really key technical levels, the 50 week SMA was one that I was watching very closely. We're seeing that institutional demand has really faded, long term sellers, long term holders are selling. So I think there's a lot of reason to be cautious. That said, you know, I think the levels that we're holding around at the moment, that sort of 93 ,000, And I think as long as that holds, then there could be potential if we see institutional demand return for a move higher.

40:37But I think, you know, the market still feels a bit fragile after that massive liquidation event in early October, which is causing that reason for caution. We like you talking technicals on simple moving averages. We appreciate it. Fiona Sincotta, City Index. Stay well. Coming up, Ford strikes a deal with Amazon to sell used cars on the e-commerce website. We'll talk about the reason and the impact on other online car dealers. That's next. This is Bloomberg Tech.

41:18Ford is teaming up with Amazon to sell its used vehicles directly through the e-commerce giant, becoming the second major automator after Hyundai. to list cars on massive online retailer. Let's get more. Bloomberg's auto reporter, Keith Norton. So, Honda went first. Now Ford is doing it. And am I going to Amazon.com and finding my Ford there, or have they got other areas in which I'm going to be able to navigate? Yeah, so, I mean, it's certified used vehicles from Ford initially. Hyundai does new vehicles through Amazon. And, yeah, it is your very familiar, you know, add to my cart kind of Amazon experience.

41:53You can do the financing. You can browse the site and pick your car. And then you pick it up from a dealer. You do the final paperwork at the dealer. You can do a test drive at the dealer if you'd like to as well. What's interesting is that it did have an impact on CarMax, on Carvana, on others that are selling used cars and used vehicles. How much of a significant player do you think Amazon could become? Yeah, I mean, they are Amazon, right? So if they really get into this and that is their goal, they could become a very significant player. So you saw those two, Carvana and CarMax, dropped initially on the news, although Carvana is back up again.

42:31So, you know, I think it does stimulate interest in the category of online car buying, which a lot of consumers, you know, it sounds good to them because it reduces the hassle, reduces the time. It's the sort of no haggle, one price selling. A lot of people like that option as well. So it is something that has promise. What about new vehicles? Would they dip their toe there? Yeah, I mean, that's kind of what Ford was telling me. You know, they're going to see how it goes with this certified used program. And, you know, these are cars that receive multipoint inspections. They have a manufacturer's warranty of up to a year and 12 ,000 miles on some of them.

43:12So it is sort of new car light, if you will. So if that goes well, they may do as Hyundai is doing and sell new cars on the site as well. I'm going to ask Keith Norton. It's a great story. Thanks for sharing. It's a busy day for Amazon more broadly. As it announced its first dollar denominated bond sale in three years, it aims to raise$12 billion in a six-part debt offering. Mimeg Spencer Soper is here to explain why Amazon might be tapping the debt market. I have a feeling it's something about data centers. Yeah, exactly. They've been spending a lot on data centers, and this is more fuel for that.

43:49They're coming in a little lighter than some of their competitors in terms of the amount they're looking to raise at$12 billion. Others have raised, you know,$30 billion,$25 billion when we look at like Oracle and Google and Meta. So they're coming in a little bit light. But that also might just be an indication that they have more cash flow available to keep these investments going on a running basis. And they're looking at$150 billion in 2026 on CapEx. Wow. And$12 billion is but a bit of a drop in the ocean in that respect. But I can understand when you're able to sell 40-year debt at just a percentage point over theoretical U.S.

44:24Treasuries, it looks like a relatively cheap way of financing for some of these big names. But, Spencer, where have we understood where the big expense is coming from from Amazon in terms of the data center? $150 billion, is it going into the land? Is it going into the infrastructure? Is it going to building their own chips as well a bit more? Yeah, it's going into all of the above. And they can't build them fast enough. And a big consideration is still power. You know, it's still once they build these facilities, will they have the sufficient energy to power them? So, yes, it is a race. And they just want to make sure that they have the capital available to take care, take advantage of any opportunities as they come.

45:07It feels hard, I'm sure, for those that have recently been said that they're being let go from their company, though. Yeah, of course. You know, Amazon recently laid off, you know, more than 10 ,000 workers. And yes, so you're but you're just going to see them constantly recalibrating. It's such a vast business and they have so many, you know, operating lines and some are getting more efficient because of AI and they're letting people go. But then they're going to keep investing and hiring in the artificial intelligence race to make sure that they're that they're keeping up with their peers. And briefly talking of AI race, it looks as though finally Jeff Bezos might becoming a CEO, at least a co-CEO again.

45:48Project Prometheus is being reported on The New York Times, so he could be launching a startup. Yeah, that's a very interesting report. And it also just highlights how even Bezos has to diversify in the AI race, you know, because when these kind of technologies emerge, there's always a question of, you know, You have these big established companies that can throw a lot of money at it, but they also have all of these encumbrances in terms of their existing operations. And is it better to have a pure play startup looking at artificial intelligence exclusively to plow ahead? And so it is interesting to see him going solo with a new artificial intelligence startup.

46:33Yeah, reports that it's going to have$6 billion out the gates and it's AI for engineering and manufacturing of computers, automobiles, and spacecraft. We know he likes Blue Origin. Meanwhile, Bloomberg Spencer Sofa, thanks so much for breaking it all down. That does it for this edition of Bloomberg Tech. Do not forget to check out our podcast, find it on the terminal, as well as online on Apple, Spotify, and iHeart. This is Bloomberg Tech.

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