Atlassian CEO on Data Wars, Klarna IPO, Oracle’s Surge, Microsoft’s Anthropic Deal | Sep 10, 2025

0:13Welcome everyone to the Informations TITV. My name is Akash Pastrich. It is Wednesday, September 10th and we are watching Klarna shares today as the company finally goes public. We've got a lot of coverage on that topic, but we're also going to talk about who the big winners are in this IPO. And don't go anywhere because in about 25 minutes, we have got a great conversation for you with the CEO of Atlassian. We're talking about their big browser company acquisition, about the corporate data wars, and about how the company is using AI internally. And finally, we've also got the inside analysis of a scoop that we published yesterday that Microsoft is now turning to Anthropic as it seeks to become less reliant on open AI.

0:56There is a lot going on. I didn't even mention Oracle. We're actually going to talk about Oracle as well. It wasn't in the intro. We're going to talk about Oracle shares, which are up nearly 40 % today. But let's start with the big news this morning that Klarna is set to debut. Well, it has been a long road for the company. It has been almost 20 years. And really, Klarna, I mean, one of the interesting parts of this IPO is that it is really a referendum on buy now, pay later as an industry as a whole. And so I want to bring on someone who can share with us her perspective on where she's seeing this industry go.

1:33Mercedes-Benz is the founder of a new venture firm called Premise. It is her first time on the show. Mercedes, welcome to TITV. It's great to have you. Thanks so much for having me, Akash. So look, we have not talked about Buy Now, Pay Later on this show yet. And so I want to take a step back from Klarna for just a minute. I mean, talk to us about where we are in the Buy Now, Pay Later story and the sector at large. So the industry is one that I think a couple of years ago became very popular as a new way for the younger generations to access credit and to really spend their transaction money online on the internet.

2:10The big question with the category as a venture capitalist, my question is, is this category going to become one that has primacy with users, meaning their top of wallet, they are the main provider that is being pulled out at transactions. Pulled out is actually terminology still where obviously you can see my bias. I'm referring to credit cards. And I think this is something where we need to look at if the industry has matured to the point of reaching that first kind of top of wallet card or payment method. And that's really what I'm looking for when I look at companies like Klarna. So just to be clear here, I mean, is the bet here with these companies, they will replace credit cards entirely?

2:54You know, I think that would be too early to say. I mean, there isn't exactly a physical replacement for credit cards from a B &PL perspective yet. Obviously, these companies are tacking on and cross-selling a lot of different products. As someone who has been involved in the consumer credit journey for a number of years, I'm on the board of a private late-stage credit card company. I really quillously watch where these transactions are happening, online, card present, card not present. And I don't know that BNPL is going to replace cards. But the idea here is that the younger generations, the hope here is that they sort of turn to these buy-now-pay-later platforms.

3:37Instead of a credit card, right? I think that's the hope, certainly, of the buy now, pay later companies. It's a real threat to the only credit card companies. If you look at, for example, Florida's purchase frequency compared to an average U.S. credit card, this is something they put in their S1. They're still at about 50 % of the monthly credit card frequency purchases for an average U.S. credit card. So that shows they still have a ways to go. But I think that is something they're highly focused on. And so let's get down to the business model here. I mean, you looked at Klarna's Financials, I'm sure.

4:16Is buy now, pay later a good business from a business model perspective? Yes. I mean, what I look at always is, is this company able to grow profitably? It's really easy as a credit business to give away a dollar for 50 cents. And so the question is, what are their gross profit margins? What are their cohorted unit economics looking like? What's the net interest margin? There's a lot of credit-specific metrics I would dive into. But on a very high level, if you just look at the gross profit, you know, Klarna had solid gross profit last year, 44 % in the year of 2024. And that is a strong indication of where they're at relative to, you know, credit card gross profits are not often in the 70s or 80s like a software SaaS product.

5:03So it's strong. If you also look at credit losses as a percentage of their loan book, they are at about 50 % of their peers. So that also shows help in their credit book. So let's talk about the peers. You've got Klarna, you've got Affirm, you've got Afterpay, which is part of Block. You even had PayPal this week. PayPal has a Buy Now, Pay Later offering, and the CEO says that he sees BNPL being part of their growth strategy. Can you just help us differentiate between all these platforms? Do all these platforms literally do the same thing, or how do they differentiate themselves? One of the vectors that I tend to look at for comparing this is what are the type of purchases they're being used for?

5:45Some of the players, like, for example, Affirm is more well-known for being larger average order values, larger purchases. Affirm was famous for their Peloton partnership and being used to finance really large, let's call it on the order of high hundreds of dollars, even thousands of dollars purchases versus Klarna was more well known for smaller, more frequent purchases, your average day. In the credit world, one of the questions we always ask about primacy of wallet, going back to one of my earlier kind of frameworks is that, are we being used for food, gas, and kind of the average everyday purchases?

6:22Now, obviously that's offline transactions, card present, and I'm talking about card not present and really i shouldn't even be using the word card and so that but what i do think is exciting about clarna is that they have tapped into the more average everyday purchase behavior and i i just want to jump in on that because that is something that i've been thinking about is that we've we've heard these stories about uh buy now uh well what was it eat now pay later you know the the idea that the the size of the purchase is is getting smaller and smaller and smaller at this point, you know, you can even buy a sandwich and you can pay later.

6:59And one of the things I've been thinking about is as we think about further, I guess, penetrating this market or rather increasing market share in the payments landscape, has it kind of reached a point of saturation a little bit if people are already using it for these really small purchases that, you know, I don't just use a credit card. I don't know. You're asking the billion-dollar question, Akash. I think that consumer credit in the U.S. has reached a height. Earlier this year, we reached, and we constantly are on this journey, but we reached the highest amount of consumer credit that the market has ever seen.

7:38It came down a little bit in the last quarter. But there's constantly a question of, are Americans okay? Are they able to afford their average daily life? And I think that's a larger societal question. that players like B &BL and credit card companies are facilitators of leverage and enabling people to have liquidity and how they move in and out of their daily finances. I don't think you can speak standpoint to them, but I do think it's something that more holistically as a society we have to consider. Great. Well, Mercedes, thank you so much for coming on the show. We're going to be talking about Klarna more in the weeks to come.

8:20I'm sure as we see shares move. And I think that broader question that you're pointing to here, which is where are we in consumer spending? I mean, we could talk for many more hours about that topic. So we'll have you back on to talk about that. That is Mercedes Bent. She is partner at a new venture firm, Premis. Okay. The Clarida IPO is also set to be a big winner for many venture capitalists, but one of the biggest winners is none other than Sequoia Capital. It is certainly a full circle moment because of all the board of directors drama over the years that very much centered around longtime Sequoia leaders.

8:55I want to bring on Katie Roof, our deputy bureau chief of venture capital to explain to us what she found in her reporting. And Katie, it is your first time on the show. Welcome. It's great to have you. Great to be here. Yeah. So, you know, no surprise, Sequoia made some money there. They made almost$3 billion off of holding Klarna long-term. They still retained a more than 20 % stake because they didn't sell shares, even though they've been a shareholder for 15 years. Okay. And is Sequoia the only winner or who are the other big winners? So this is very unusual for an IPO. The other large shareholders are not typical financial investors.

9:35The next largest shareholder is a family office, a Danish family office called Heartland. They own about 10 % of the company. Part of the reason that a lot of the financial shareholders aren't on the cap table is, unlike Sequoia, many of them, such as General Atlantic, sold shares. Okay. And, I mean, let's go back to Sequoia, though. Sequoia has this kind of interesting history with the company. We've covered it here at The Information, all of the boardroom drama and stuff like that. I mean, gosh, like, just reflect with me a bit. This is kind of, it's had a winding road to the public markets.

10:10And now Sequoia, you know, it's sitting on a$3 billion gain. This is kind of outstanding, really. Sure. I mean, a couple of years ago when there was the tech correction, which disproportionately impacted fintech, that tension led to drama within the board of directors at Klarna and including within Sequoia, the firm. And so ultimately, as some sort of peace agreement, Andrew Reid joined in lieu of Matthew Miller and Mike Moritz, who is still on the board, but no longer has Sequoia's board seat. So there was a bit of, you know, a bit of drama there over how to govern the company and plans on the eventual IPO.

11:06But everyone's making money, so it's fine. Right. In the end, they made money, exactly. Right, yeah. $3 billion, actually. Well, look, I want to talk a little bit about the IPO, broadly speaking. You cover everything venture capital, everything IPOs for the information, and we've been sort of assessing this question on the show about when is the right time to go public? Is this the moment to go public? Do you think this was a good moment for Klarna to go public? What's your sense of that? The stock market was at a record high, so maybe they timed it perfectly. But in general, IPOs this year have been performing very well, tech IPOs.

11:48You look at recently Figma just popped significantly. And clearly Klarna is predicting the same. They priced$3 above the range after raising the range. And IPO nerds know that that means that they're expecting very strong demand. And it's basically assumed that it's going to pop significantly today. And who are the other names that you're watching or that you're asking people about on your list right now? Well, actually, there's three other venture-backed IPOs just this week. There's Gemini, the crypto related thing connected to the Winklevoss twins. There's VIA, the transportation service. And then there's FIGURE, also a fintech.

12:32I like how you said crypto related thing, because that's kind of what all these things are. They just end up being things at the end of the day. No, but I mean, this is kind of a, you know, this is a question we ask just about every investor that comes on the show is, is this the opening of the window? And from your conversations, I wonder, are people rushing to the floodgates now? Do you see that happening? Not as much as you would think. I would say the window's actually been open for over a year because once the public tech stocks rebounded, the appetite for new tech listings also was there.

13:08But considering how many unicorns there are, there's over 1 ,000, we've really seen a very small percentage going public. I think that more and more are starting to get the memo, But there's also a lot of available capital on the private markets, which hasn't really motivated people to go for the IPO. Right. Great. Well, Katie, I'll tell you what. I mean, more IPOs means more talk time with you. And I'm excited to talk with you more because as our newest Deputy Bureau Chief of Venture Capital, I think you're going to be front and center for a lot of these stories. Thank you for coming on the show.

13:46That is Katie Roof from The Information. Okay, we've talked on the show already about how Microsoft and OpenAI's relationship has grown increasingly complicated over the years. In the latest sign of that, the information was first to report this week that Microsoft will now use Anthropics technology for some of its tools. Anthropics, of course, is one of OpenAI's biggest rivals. I want to bring on our Microsoft reporter, Aaron Holmes, who broke that story to share more about what he's learned. Aaron, welcome back to the show. It's great to have you. Hi, Kosh. Okay, so tell us what we learned. Yeah, so I mean, what we're seeing here is for the longest time, Microsoft has relied entirely or almost entirely on OpenAI's models to power the AI features in its Office software that, you know, can theoretically create PowerPoint presentations or edit Excel spreadsheets.

14:38But what I'm hearing now is that Microsoft is getting ready to launch new versions of Office Copilot that are using Anthropic models to power some of those more advanced features. And, you know, there's a lot of speculation that this has to do with the negotiations that are going on between OpenAI and Microsoft. But, you know, what I'm hearing is it's actually just more about the quality of the models themselves and the fact that, you know, Microsoft-bound Anthropics models are simply better at automating some of these tasks than OpenAI's models were. So I think really what this comes down to is a product decision more than anything based on what I'm hearing.

15:15So this actually isn't really so much a reflection of the relationship. This is actually a reflection of the quality. That's right. And, you know, Microsoft has been pretty adamant that it still considers OpenAI its default AI provider. And, you know, in general, I think we're still going to see Microsoft relying on open AI for the vast majority of its AI tools. But I think this really kind of speaks to the fact that, you know, for all of the talk we've heard about the AI market becoming more and more commoditized, there is still, in some cases, a really clear front runner for certain enterprise tasks.

15:48And right now that front runner is Anthropik. Wow. And, you know, one of the things I've been thinking about is sort of the complexities here, because as it relates to Anthropic, I mean, Anthropic has got an investment from Google and also Amazon is a big investor in Anthropic. Amazon and Google are obviously big rivals with Microsoft. And so the fact that it's willing to go with Anthropic here, you know, I mean, look, I mean, these are big businesses. I mean, it's not like this is uncommon, but gosh, the models must be quite a bit better than it. Yeah, I mean, it's also pretty remarkable that we're going to see Microsoft pay for these models via Amazon Web Services, which, you know, hosts Anthropic.

16:29Amazon is, of course, Microsoft's biggest rival in the cloud. And, you know, Microsoft also already has the rights to use OpenAI's models on its own without paying OpenAI for them because it's invested more than$13 billion into the startup and has this, you know, really deep deal. So I think that just speaks even more to how Microsoft right now is prioritizing trying to get Office 365 Copilot to work as well as possible and to really charm customers and that it's not afraid to branch out and use multiple different models to do that. Can you talk a little bit about how customers have been finding the Copilot products or the Office 365?

17:06Has Microsoft been very successful at sort of getting acceptance among customers with them or have there been some hiccups? You know, there's been a mixed response so far. I've heard that customers really love certain features in Copilot, such as the ability for Copilot to sit in on your team's meetings and send you summaries, the ability to generate emails, summarize company documents. And I think where they're struggling is with these more advanced agentic features, things like, you know, manipulating data in an Excel spreadsheet or generating an entire PowerPoint presentation is where we've heard customers say that there's still some bugs that I think Microsoft is now trying to work out.

17:45Got it, got it. And last question for you. I mean, you know, again, we've made it clear this is about the product, not about the relationship. But as it relates to Microsoft's negotiations with OpenAI about their governance structure and stuff like that, do you see this having any impact or giving one party more or less leverage in those conversations at all? Or are they sort of separate? it? You know, I think that both Microsoft and OpenAI have a good reason to, you know, reach a deal that would let OpenAI change its structure and continue to raise money and eventually go public. So I ultimately don't think that this is going to hamper their talks on that deal.

18:25But I think more broadly, it does, you know, send a message that at the end of the day, Microsoft wants its products to be best in class, and it's not going to necessarily rely on the startup that it already made a deal with to do that if it means that it can get better performance from a competing startup. Great. Well, it was a fascinating story and a big one too. Thank you, Aaron, for coming on. That is Aaron Holmes, who covers Microsoft for the information. Okay. Well, Oracle is having a blockbuster day on the markets. The stock was up 40 % this morning after the company's big revenue projections.

18:58The big question now is, could you call this Oracle's NVIDIA moment even. I want to bring on Jackson Ader, who covers the company at KeyBank to help us make sense of all this. Jackson, it's great to have you back on the show. Thank you. Yeah, it's going to be here. Okay, so lay it out for us. What exactly was the projection last night that has investors in a frenzy this morning? The projection would be the OCI revenue targets for the next four to five years. They are so far above street or consensus expectations for OCI, particularly once we get out into fiscal 28, 29 and beyond that, I mean, you're talking about maybe not doubling consensus estimates for OCI contribution in those out years, but close to it.

19:52You seem speechless. You seem speechless almost. I mean, I wasn't necessarily speechless last night. I think we said in the note, you know, it's like we were, you know, audibly reacting to the print here in our office and had to go downstairs and explain to the family why we were so loud. But, you know, as far as the print, not the projection, it was that RPO number that was truly stunning. They put up bookings of over$330 billion. They didn't do$330 billion in total bookings in the last four fiscal years combined. And just to translate for people, I mean, this is basically an indication of the business that they plan to incur as revenue, essentially in the future, right?

20:37That's right. This is contracted future revenue. It's not yet on the balance sheet, but it is off balance sheet in terms of a backlog. Okay. And they chugged this up to a couple of big customers, but they didn't tell us who. No, I think they said four deals, four very large and substantial, call it multi-billion dollar, multi-year deals spread across three customers. They didn't tell us - Open AI, maybe open AI. Right, yeah. They didn't tell us who, but I know at least one media outlet that's been pretty good on this. that might have some insight as to who it is. Open AI. And, you know, the important thing is, and the company stressed this, that one of these deals is certainly outsized.

21:25And that's the one that they released in an 8K, you know,$30 billion in the annual contract revenue. But that the others are nothing to sneeze at and would have been worthy of call-outs and very substantial OCI wins if they weren't kind of dwarfed by this one. And OCI, just for people who don't know the acronym. Apologies, Oracle Cloud Infrastructure. It is the business that competes with Google Cloud or Microsoft Azure or AWS. Right, right. So now I want to take a step back here and talk a little bit about, you know, some of the risks that could come with this projection, because all of this is banking on a couple of big customers spending heavily and investing heavily in AI.

22:08And so I think the bull case is pretty clear. You know, this could mean big things for Oracle's cloud business. Is there a bear case here to be made in that, you know, maybe this relies on those customers being able to raise a lot of money or this relies on the AI boom continuing? Or how are you thinking about the risks that come with this? Yeah. Yeah, so last night we said this is the sprinkling on the parade, right? We don't want to fully rain on the parade that's happening today in Oracle, but there are some sprinkles for sure. So let's talk about financing. It's financing on two levels. One is, yeah, I mean, depending on who these customers are, they are going to have to raise outside financing to pay for these timeframes.

22:57That creates a possible hurdle, although it doesn't seem like capital is shy when it comes to funding some of these AI companies that need the inference and the training. The other financing that you need to be aware of is Oracle's financing. We now assume that they will raise about$100 billion in incremental debt or incremental financing over the next four years in order to fund the capital expenditure investment required to build out this cloud infrastructure. So that's on the financing side. And then the other thing is, at least in terms of Oracle's income statement and Oracle's financials, Oracle Cloud Infrastructure, the OCI business, comes in at a much lower gross margin than your traditional software.

23:45SaaS software is 80%, 85 % gross margin. Support and license software is 95 % plus per second gross margin. And we estimate that OCI is maybe mid to high 30s. Why is that? Because, well, number one, they don't yet have the benefits of scale, right? The economies of scale that will flow into this business are not yet there. The other is, it's just fundamentally a different business. I mean, you are providing servers and hardware to your customers that will pay you on a usage-based model, Whereas software, you write it and distribute it forever, right? I mean, it's a wonderful business model software.

24:29So that mixed shift more toward Oracle Cloud will weigh on, we think, gross margin and operating margin here in the short run. But if numbers on the top line are going to be going up this substantially, clearly investors and ourselves included are willing to look past that. Okay. And so last question, just to wrap things up here. I mean, you've talked about the risks here. You've talked about a lot of the if statements, I guess, that need to fall into place, the financing on both sides. Do you think this plays out the way that investors today are thinking it might? Or do you think that the future is looking slightly different?

25:13I am heartened by the fact that these are not revenue projections without backlog sitting in remaining performance obligation. You know, a lot of these, a lot of the, no, look, contracts can always be amended. Like you said, if the AI boom doesn't actually come to fruition, certainly an open AI is going to say, hey, we need to rework that contract. We're sorry about that, but we just don't have the money to pay for it. So certainly that is a risk. But I would say in terms of the projections from Oracle, I am heartened by the fact that they have so much bookings waiting to be recognized into revenue.

25:56And so that does make me feel a little bit better about these projections. Great. Well, Jackson, thanks for coming on the show and helping us make sense of it. It's your second time on the show, and I'm sure that we will have you on more and more to come as this story gets even more complicated because, like you said, there's a couple if statements in there that need to really go the right way. That is Jackson Ader, who leads equity research for the software sector at KeyBank Capital Markets. Okay. Well, I am really excited for this next conversation. conversation. Atlassian is a software company that many people in the tech community have become reliant on with its popular collaboration tools like Jira and Trello.

26:35And the company made a big bet last week in buying the browser company, all but declaring that it would basically be jumping with two feet into the AI browser wars. Now, last night, I sat down with the CEO of Atlassian, Mike Cannon Brooks, for a wide ranging discussion, not just about that, but also about his take on corporate data wars and what he thinks of Mark Benioff's bold claims that AI can do the work of 4 ,000 people. We spoke for about 20 minutes last night. Here is my conversation with the CEO of Atlassian. Mike Cannon-Brooks, welcome to TITV. It's great to have you. Thanks for having me, man.

27:13So look, it's been an exciting time for Atlassian. You guys are the dealmakers that everyone's watching now with this recent acquisition of the browser company. You know, we talked about this a little bit on the show last week, and we had your head of product on. He kind of explained a little bit of the rationale. But the thing that I've been so fascinated by is that if you go on Twitter and on some of these blogs and stuff like that, I mean, some people are just confused by it. And, you know, people are, they'll write what they want on the internet. But the tweet that I think sort of encapsulate this is that one person said, Arc selling off to Atlassian has been the biggest letdown for nerds this year.