Apple’s New iPhone, “The Amazon of Latin America”, and a16z’s Crypto Returns | Sep 9, 2025

0:13Welcome everyone to the information's TI TV. My name is Akash Pasricha. It is Tuesday, September 9th and it is iPhone day. Here on the stream, we've got Apple doing its flagship September iPhone event. We're going to get into some analysis about that in just a bit. We've also got a big guest coming on the show. The CFO of MercadoLibre is joining us for a very special conversation. I'm excited to dive deep into the world of e-commerce in Latin America. And finally, we're going to get to a big story that we just published about Andresen Horowitz's venture capital returns. It is a level of detail that is rare to get inside the VC giant.

0:51We're going to talk all about that story. But let's start with the big news of the day, Apple. It is September, and as has become a fall tradition, Apple is unveiling its new iPhones today. We've already heard a lot of the details about what to expect, but I want to bring on our reporter, Wayne Ma, to have a bit of a broader discussion about what this year's iPhone means for the broader Apple ecosystem. Wayne, thanks for joining us. It's your first time on the show. Glad to have you. Hey, Akash, thanks for having me. So look, I want to start with sort of the AI angle to this year's event, because last year's event really was all about Apple intelligence.

1:32That was the thing that came out quite loud. This year, we've heard less about that, and it's more about the thinner phone. And so let's put the form factor of the phone aside for just a minute. Like, where are we at in the Apple AI story? And does it even matter whether or not AI is good or not on the iPhones right now? Yeah, I mean, I think at the moment, Apple's kind of rebuilding its AI and Apple intelligence after last year where they weren't able to really promise and deliver what they said they would. And so I think the problem is that people expect more and more from AI these days. You want to naturally interact with your phone with your voice.

2:14You want to change your settings just with a simple sentence or voice command. And so there is the expectation there, but the reality hasn't matched up. Right. And so is there any evidence that people actually will or won't buy new phones based on how good the AI is right now for Apple products? I don't think so. Tim Cook said earlier this year that in markets where Apple intelligence existed, sales were up. But I don't really buy that. I think that at the end of the day, people can get a lot of their artificial intelligence tools from apps. And so as long as they can get ChatGPT on their phone or Gemini or Perplexity, I think they'll be happy with that for now.

2:57And what about other smartphones? Have you been paying attention to how good the AI is on other smartphones and whether or not that has moved the needle for them? I think with Google and Samsung, there's a bit of an edge because their models are more mature. They're better than Apple intelligence. And as a result, you can control your phone in ways that you can't right now with the iPhone. And so people will actually buy those phones for the AI? I still don't think so. I think at the end of the day, a lot of people are locked into the Apple ecosystem. They still prefer other things like usability, the user interface, the ease of use.

3:32And so at the end of the day, people who I don't think they're going to change their or switch phones just because of AI. Right, right. Now, let's talk about the form factor changing. Apple has generally done very incremental changes to the actual feel of the phone in your hand. This year is probably one of the biggest changes they've made in a while. What do you make of that decision to finally start thinning the phone or actually changing some significant parts about it? Well, Apple has kind of four phones, four different models every year, and they've always had this one automatic slot. You know, they tried a mini version for the iPhone 12 and 13.

4:10Then they tried the plus version for the 14, 15, and 16. And in all those cases, you know, sales weren't very good. They, you know, they were below expectations. And so this year and next year, they're going to be trying a thin phone. You know, that's like, you know, now that they've tried small and large, you know, that's like one of the only few options they have left. And I guess they're hoping that, you know, it'll be aesthetically pleasing, lighter, and maybe that'll like draw people's attention to it. But there's lots of compromises with that, mainly in battery life. You know, it'll have much less battery than what normal consumers are used to with iPhones.

4:40And so it remains to be seen whether consumers will buy it. Do you think it's going to work? I think it might work better than the Plus and the Mini. But enough to move the needle in sales, I'm not sure. In fact, Apple has allocated only about 10 % of their production capacity to the thin phone because they also are worried that sales aren't going to be that great. right and and this is even with the the battery life being being less i guess people are willing to take that hit i guess to have a thinner phone yeah some people might right uh talk to me a little bit about you know apple in the ai race broadly i want to go back to that you've done a lot of reporting on how apple is trying to catch up now where are we in that story and what are you watching for in the months ahead with respect to AI?

5:30Sure. I mean, Apple, I think at the beginning, wanted to train their own models, completely own everything, and not really use outside partners to help. And so I think what you've seen over the last few months is that they're internally more open to using models by Google or Anthropic or OpenAI. They're still kind of deciding between the three which ones to use. And so they might end up using third-party models or in combination with their own models in order to develop the best product for consumers rather than just try to do it all themselves. Great. Well, Wayne, thanks for coming on the show.

6:05I know it's your first time, but I'm excited to have you on more and more as the Apple story and other stories, NVIDIA, Chips, I mean, you cover so much. So it's definitely a byline to watch, folks, if you haven't. That is Wayne Ma, our Apple reporter here at The Information. Okay. Thanks for having me. Well, e-commerce is a booming business in Latin America. and few companies know that space better than MercadoLibre. The company operates in Brazil, Mexico, and Argentina. Its market cap is more than 118 billion US dollars, but its specialty isn't just e-commerce. MercadoLibre also has a ginormous fintech business, which operates under the name MercadoPago.

6:43It extends credit and issues credit cards. It is a fascinating story, and I'm excited to welcome to the show the company's CFO, Martin de los Santos. Martin, welcome to TITV. It's so great to have you here. Great to be here, Akash. Pleased to meet you. Thank you. So, look, I want to have a conversation here that touches on a couple aspects of your business because there's so much we could talk about. Where I want to start, though, is with the e-commerce business. And given that our audience is mostly people in North America, how is it that buying behaviors in Latin America are different with respect to e-commerce compared to North America?

7:21Yeah, Kashi, I think if you look at Latin America, we're probably 10, 15 years behind the US, but the behaviors are similar. What happened in Latin America, what we found when we started the company 25 years ago, is that the infrastructure was not there, right? So we had to build our own payment solutions that you mentioned Mercado Pago, which started as an acquiring business, but then it evolved into a digital bank as it is today. We have to build our own fulfillment infrastructure. You know, 15 years ago, we didn't touch one single package. Today, 98 % of the packages that are sold on MercadoLibre go through our fulfillment infrastructure.

7:57We have more than 30 warehouses throughout the region. So we have to basically build it from scratch as opposed to the U.S., but the behavior is similar. People want fast shipping, free shipping, have availability of product, a good user experience, credit to buy on the marketplace. So the same thing that you find in more developed countries. America, but we are, as I mentioned, 10 years behind. Peritetic performance in Latin America is 15 % compared to more than 20 % in the US or 40 % in China. So we're making big progress to get into those levels. And this is why our business is growing so rapidly.

8:35And so from your view, it's not a demand issue. People are ready to buy online. It's an infrastructure issue. It's not having credit cards, not having the right shipping in place. Is that the idea? Definitely. I mean, if you look at availability of credit cards in Mexico, it's less than 14%. Most of the population do not have a credit card. As you can imagine, buying online is a very bad user experience if you don't have a credit card. So we develop our own credit card. We develop our own buy now, pay later. We have a digital wallet that you can put your money into, your digital money into Mercado Pavo.

9:10So, for example, in Mexico today, 30 % of the transactions that are bought in Mercado Libre are paid using our own payment methods. So, what transaction might not have happened if we didn't have the infrastructure that we built with Mercado Paro. That's just one example of what's happening in Latin America. So, then as you think about competition, we're going to get to the fintech story in a second. But as you think about competition on the e-commerce front, right, penetration is so low because, for example, people don't have the tools to buy some of these goods online. You know, we have e-commerce players from China.

9:45We even have Amazon. You know, these discount players are making so much inroads in Latin America. How is it that people are buying then, you know, goods from those e-commerce players if the fintech sort of category is so underdeveloped? Yeah, I think, first of all, Brazil, let's take as an example, it's probably one of the most competitive markets in the world. There is so much competition, like you mentioned, your local retailers, you have the Amazon, the Asian players. The reason why there is so much competition is because the opportunity is so large. I mean, it's a market. We grew in Brazil 30 % of our volume last year.

10:23And keep in mind that we are at a very large scale. We continue to grow at the rate of a startup. So the opportunity is so big. And this is the reason why there are so many competitors. And obviously, the infrastructure has been built. We made a lot of progress in that front, but obviously other players are also doing the same thing. So there's no reason why we don't see the penetration of e-commerce at the similar levels as you see in China or in more developed countries in Latin America. It's just a matter of time. But then how do you defend against those Asian retailers that are coming in at discount?

10:57I think our competitor of Danes continues to be our logistic infrastructure. We have built the fastest and more sophisticated logistic network in Latin America. We deliver more than 75 % of the products that we sell within 48 hours. This is something that is very difficult to replicate. The majority of the products that are sold on MercadoLibre are offered with free shipping, which is an important part of eliminating friction for people moving online, you know, the cost of shipping. And obviously the payment solutions that we have built. As I mentioned, on average for the whole ecosystem, more than 20 % of the items paid are paid with our own payment solutions.

11:37So that's an edge. And at the end of the day, it's the user experience. We have 25 years of building a product, bringing assortment and supply into our platform. We have more than 18 ,000 developers that are working day and night improving the user experience. So many, many things that we're doing to improve. The NPS is at all-time high within MercadoLibre. And you mentioned the free shipping. One of the moves that the company made is reducing the price point at which it offers free shipping. And that, to me, felt like a clear play to sort of fight off some of those discount retailers. I mean, you're clearly offering more for less in that way.

12:21Is that a short-term solution or is that going to stick around for the long term? No, this is something that we have been doing for the past seven years. We introduced free shipping in Brazil back in 2017 when we had our logistic infrastructure built. At that time, the threshold for free shipping was 120 reais and we have been decreasing it. as we continue to expand and improve operational efficiencies in our logistic infrastructure and lowering the cost of delivery, we were able to lower the free shipping threshold first to 80 reais, as it was a couple of quarters ago. And this quarter, we lower it to 30 reais.

12:57Strategy that has been taking place for many years. It has worked very nicely for us. If you look at the past five years, we gained, we doubled the market share in Brazil. And part of that was because of the free shipping that we offer. So it's not temporary. This is something that we're doing over time. We have been doing it, and it has been paying off for us very nicely. But how do you then think about that in terms of your bottom line, your profitability? Yeah, at the end of the day, we are investing in the lower threshold of free shipping as we have invested in the past. When we are getting more users, we're getting more repetition.

13:29When people come into our platform, they tend to buy more things. They even hire ASP as well. So we have proven this playbook in the past. And we don't look at individual profit. The profit of individual transaction, we look at the relationship with the user. Then we can trust in-tech products. So it has played out for us, and we're very optimistic. And we have seen the results, right? We have seen our acceleration on our volume after we lowered the threshold last quarter. I want to get to AI, but I just want to ask you broadly about this idea of discount e-commerce players gaining market share, not just in Latin America, but around the world.

14:05And we've seen it here in North America as well. What do you think this move to discount retailers and consumers' preferences to buy from these discount retailers, how do you think that changes the e-commerce landscape, broadly speaking? I think for the most part, it increases the pie, right? These are transactions that might not have been happening in the past, and we are becoming more involved in those. So I think it's net positive for the industry. And obviously, we are adjusting also our offering to participate in those segments, the new segments of the market, which are low ASP, the low ticket items.

14:45So I think it's positive for the market overall. And we, being leaders in e-commerce in all of the countries where we operate in Latin America, we will capture our fair share of those segments, and that will be positive to our users and to MercadoLibre. But do you think it gets to a point where the quality of the product starts to suffer at all? It shouldn't. At least we put a lot of attention in the supply that we offer within our marketplace. So in our case, the quality does not suffer. What we offer are lower ticket items with more frictionless user experience because of free shipping. But it doesn't necessarily mean that in our case, the products are lower value.

15:22You might have other cases where it is, products shipped out of the country. But for the most part, in our case, it's not the case. Right. So we are a technology publication. We cover AI at the intersection of just about everything. And I wanted to ask you about whether or not businesses are moving to adopt AI as quickly in Latin America as they are in North America and how you're thinking about that at Mercado Libre. Yeah, we have been using AI for many years at MercadoLibre. If you think about acquiring business, which we started back in 2003, our fraud prevention models are machine learning models that use AI to try to determine in a fraction of seconds whether a transaction is fraudulent or not.

16:05Before taking the CFO position, I ran and I started the credit business within MercadoLibre. I would have models that use thousands of variables on users to determine the quality of credit for those users. So those type of models we have been using for many years. More recently, we have adopted LLM models, and we have been using them in many different fronts. Let me give you an example. On CX, now we can answer most of the questions from our users using models, right? And we used to have about 10 ,000 people taking care of questions from users. Now we have 7 ,000, but the business has tripled in terms of volume.

16:41So we can service a lot better our users, apply those AI models. Consumer facing, you know, questions that our users pose to merchants in the marketplace. We used to have to wait until the next day for a merchant to answer a question. Now we have these models that can answer right away and that improves the user experience and the conversion of the transaction. Right. Many, many different fronts. So we have adopted, obviously, you know, the 18 ,000 developers that I mentioned earlier, we try to ship code at a faster rate. So many different fronts we have been adopting AI. And obviously the next wave would be to basically change the way our users interact with our platform.

17:23We want to have an AI, a fintech advisor to our users that we have to interact in a much user-friendly way with them. So we're working those. But those are the next wave of innovation that we will implement. Are you using it to reduce your headcount at all at the company? Not really. I mean, given the growth that we're having, we're growing the headcount, fortunately, because the business is growing. But what we're doing is we're getting more things out of the same number of people, you know, more productivity. We think that, at least for now, it has not replaced people. I think it has empowered people to do better and to operate in a much more efficient way within MercadoLibre.

18:05Now, MercadoLibre has a fast-growing advertising business as well. And one of the topics that we've written about at The Information is the possible threat that the advent of AI agents, for example, doing these purchases for people might have to the advertising sector. Do you think about that at all as you build out your advertising business? The fact that, hey, we're building it out, but advertising could be a very different game tomorrow if AI agents are changing the advertising game altogether. Yeah, I think obviously we do think about that. We try to leverage AI to produce better advertising, to do better segmentation for that.

18:42But also, we are very aware that there might be some rules, you know, the rules of the game might change. So we're out of that. But at the end of the day, we had, last year, we had more than 100 million buyers within MercadoLibre. But how are you thinking about the rules of the game changing then? I mean, are you using your own AI agents within your advertising business? I mean, how do you think about that? Right now, we're using AI mostly to create content for advertising, but also we are looking at the way the advertiser will interact with our users. So we will be in the middle of it, but we want to make sure that we take part of it.

19:18And this is why I think at this point, at least to be honest with you, we have more questions than answers on that front. But we have a team that are looking at that and they're paying attention to the changes that are happening within the advertising business. We have more than a billion dollar business in advertising growing very rapidly, but we are aware that changing technology might disrupt that business. But we want to be very agile to take advantage of those changes as opposed to suffer from those changes. Right. So I hear you saying you're aware of it, but you're not concerned of the threat is what I was saying.

19:50We're always concerned about all types of threats, but we do have a team of people who are focused on that and try to be aware. So concerned, we're always concerned. and we're optimistic because of the position that we have and the leverage that we have within Latina. Yeah. What's your biggest concern right now as it relates to MercadoLibre? It's such a big company. You've built a huge company. What's the number one concern that Martin has right now? I think at the end of the day, it's culture. I mean, we have been successful because of the talent of people we have been able to attract and retain and the culture of the company and the way we execute.

20:24We know fairly well what needs to be done. The opportunity is huge in fintech, in commerce, in advertising. At the end of the day, it's execution. We have been executing at a very high level for the past 25 years, and we need to continue to do that. So I think we need to continue to attract talent, to execute at the same level, and to maintain the culture that has made us successful so far. And where do you see the company in 2030? I think we're going to be much larger in terms of e-commerce. There's plenty of growth ahead of us. As I mentioned, the penetration is very small, but we are making significant progress on bringing people online.

20:59We haven't talked about the fintech opportunity, but fintech is even bigger opportunity. The financial inclusion that you see in Latin America is extremely low. I mean, I mentioned the case of Mexico, but the same thing could be said about Argentina. So we have the aspiration in 2030 to be the largest digital bank in Latin America. We are making significant progress. For instance, our credit book has doubled year on year. Asset under management more than doubled as well. Our number of users are growing 31 % year on year. Do you see the fintech business being bigger than the e-commerce business eventually?

21:31They're about the same size. Probably fintech is growing a little bit faster today than commerce. But eventually, you think it'll be bigger? It might be bigger because of the rate of growth today. But the important thing about MercadoLibre is the ecosystem. The fact that we have an e-commerce business very intertwined with a fintech business and they're separate from each other. That's the secret of MercadoLibre. And that's an important strategic advantage that we have in both businesses. So they will both roll very, very nicely in the company. So no predictions on whether the fintech business will be bigger than the e-commerce business in the next month.

22:05I have to. It's like you're asking me if I have to choose between two sons, right? So I think both businesses will do very, very well, and we're very happy with the product. Okay. Well, I mean, what I did want to ask you, though, is you have the e-commerce business. You have the fintech business. Come 2030, do you see an opportunity with a third major line of business that we can expect the company to get into? I think, yeah, we have plenty of room to continue growing within Latin America. We didn't talk about the geographic differences within the countries, but you mentioned Mexico, Argentina, and Brazil, which are the biggest countries.

22:37Yeah. All the other countries within Latin America, they have combined the size of Mexico, and we need to deploy the ecosystem to those markets. We are leaders in those markets, but there's many products that we haven't reached there yet. So we have plenty of room in commerce and fintech. I think advertising is probably an opportunity that is huge for us. And if you execute correctly, I think it's a very large business for us. It's a large business today, growing at 35 % year on year, but it could be much larger if we execute correctly. Does MercadoLibre use their own data centers right now? No, for the most part, we use cloud infrastructure.

23:14Okay. Do you see yourself moving to your own data centers or maybe building out your own cloud business one day? These are the things that we discuss strategically with the team. I mean, there's some pros and cons of both. But I think if you ask me a prediction, I think maybe five years from now, we will have a combination of both. But that would be my guess. Right. And I've got two more questions for you. Very quickly, we had the provincial election results in Argentina this week. How are you thinking about that in the context of your business? I think one thing that we always talked about is that either when macro is doing well or macro is doing bad, the most important thing for us is the type of things that we do within our ecosystem, right?

23:51because the security of people moving online is so strong that macro might help us with 1 % of growth or less. That's one thing. We are very excited about the things that have been done in Argentina for the past year, you know, lowering inflation. The government is running with a balanced budget. I think the normalization of the FX market. So many things that took millions of people out of poverty over the past year and a half. We are going through a certain stability of the midterm elections. This is something that usually happens at this time of the election process. So we have seen a very strong recovery in the first half of the year, but we are optimistic in the long term.

24:35We are investing in Argentina. We recently announced the launch of the credit card in Argentina. Right, right. Third fulfillment center in the country. So even though there are certain, you know, instability in the short term because of the election, we are optimistic and we have a very strong position in Argentina. Have you talked to Javier Mille at all? I mean, our people, I haven't talked personally. Our people in Argentina are obviously very close to the government and they're in touch with them. I don't know if they talked recently. But again, we are positive about what's going on in Argentina, despite the turbulence that we've seen macro-wise in the last couple of weeks.