Jobs, AI, and Tech Earnings — Bloomberg Tech 8/07/2026

[00:00:00] Speaker 1: Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco. [00:00:14] Mike McKee: This is Bloomberg Tech. Coming up, the jobs market's cooling with U.S. employers unexpectedly cutting jobs in July and AI may be part of the story. Plus, tech earnings back in focus will be joined by the CEOs of Twilio, Lyft and DraftKings. On their results. And OpenAI's first consumer device will be an AI smart speaker that will look like a doughnut. We'll have the details. This is what markets look like this Friday. Happy Friday to you. It is a story about jobs data. Tech stocks pushing higher than ASAC 100 up, eight tenths of a percent, some outperformance in chips and U.S. 10-year yield. I picked the U.S. 10-year yield because we saw a move across the curve, but why not? 4.64 percent on the yield. We need to get into the numbers. Is there an AI story? Bloomberg International Economics and Policy Editor Mike McKee is with us. Start with the numbers themselves. What did the data show this morning in simple terms? [00:01:11] Speaker 3: Well, basically, we lost jobs for the first time in many months, 23,000 jobs. Last time we lost some jobs was in February. Now, why did that happen? A lot of it was government jobs. Local government education fell by 50,000. So it's not as bad as it looks on the surface. And unemployment fell to 4.1 percent. The reason for that is because the labor force shrunk again. 240,000 fewer people looking for work, which pushed unemployment down to 4.1 percent. If you're not looking for work, you're not unemployed. But the good news and the potential AI story here is that on the positive side of the jobs numbers, we saw a lot of hiring in the sectors that AI touches, especially in construction for AI data centers, et cetera. Specialty contractors and non-residential construction, almost 20,000 jobs in total as demand for workers in those areas continues to really ramp up. And then you look at the manufacturing side for computers and semiconductors, and they added jobs as well that we haven't seen in a number of other categories. So, Ed, at this point, it looks like AI is one of the few areas that did well last month, and it doesn't show any signs of really slowing down. [00:02:28] Mike McKee: Well, the legend, Mr. McConaughey, Bloomberg International Economics and Policy Correspondent, Mike McKee. Thank you very much. Let's stay with that job's impact. Joining us is Sarah Franklin, Lattice CEO. And, you know, Mike made the data so clear. Where there were gains were in industries that are seeing AI capital deployed, construction of data centers, for example. Your interpretation of [00:02:53] Sarah Franklin: those data points. Our interpretation is that this isn't a crisis. This really is the recalibration. What you're seeing is the workforce changing and evolving as AI takes shape, not just in the tech sector, but also in manufacturing and construction. So this is really a recalibration that we've been [00:03:13] Mike McKee: anticipating. How committed are companies big and small on your platform to sort of long-term hiring? The bit that I'm struggling to understand is like, in the short term, we get monthly changes in the numbers, but companies come up with plans for like this year, next year, all the time. Do you see any evidence that they're restructuring the composition of those workforces? Ed, we do. We see that companies are now [00:03:41] Sarah Franklin: through the chaos that we had the last several years, where there wasn't predictability. And now companies are planning the long term. They're understanding what AI is good for and what it's not. They understand it much better than we did a year ago. So you're seeing companies recalibrate their workforce. You're seeing forward deployed engineers. You're seeing people understand how AI can help them. And people are also realizing that just because AI is here doesn't mean that the work isn't. You can't just lay off a lot of workers and the work go away. You still need the knowledge. You still need the trust that you have in your company and the culture. And you see companies saying, okay, we need our people, but we need to invest in their skills, not severance packages. We need to help them come along with this new trend. And so again, it's a recalibration of the workforce and it's a transformation that every company is making and they're planning longer term. How competitive is compensation right [00:04:40] Mike McKee: now for existing workforce, but also if they are bringing people in, in specific subsectors, [00:04:46] Sarah Franklin: the need to pay to get those best people. Yeah. I mean, this is, this is a reality is that people with the skills and demand will be able to command solid compensation. And as costs rise, so do wages need to as well. And this is again, a recalibration that you're seeing in the workforce. And it's a call to everyone to make sure that you are skilled in AI, that you understand and are proficient in the technology skills that companies are hiring for. And it's, it's a tried and true thing that if there's skills that are in demand, companies will, will pay for them. [00:05:25] Mike McKee: What's one thing that you're seeing through, through the Lattice platform that surprised you [00:05:31] Sarah Franklin: since last year on the show. So something that's surprised me is how a lot of companies are coming to us and saying, Sarah, we just want to get back to business basics of how we manage our workforce, how we understand the performance of our workforce and really that workforce intelligence. And so the, the basic habits that you need from all the way from your executive suite to your individual contributor, to understand how people are performing, how their work relates to the outcomes of a company. That is what's, uh, the back to basics is so powerful right now. [00:06:05] Mike McKee: So you're using the word performance. What was so interesting this morning outside of sort of the technology context was how quickly the conversation goes to productivity, right? Uh, when you get a set of jobs numbers, you know, all these different, maybe they're from fixed income, maybe they're in the equities market saying, oh, you know, we're starting to see AI driven productivity in the economy. Um, what's the sort of workforce evidence of that? [00:06:28] Sarah Franklin: Well, the workforce evidence is that what you're seeing is people are able to really do more, but in a way that is strategic to the business. It's, it's around helping AI automate tasks that used to distract your time and attention. And when you can put your time into the strategy, really thinking of how you're going to grow, because you don't shrink your way to growth ed. This is every company is thinking, how do I grow? How do I perform? How do I unlock the human potential? And lattice helps all of our customers do that. And that's the frame of mind that all of the companies are in right now is how do we grow and how do we use our existing workforce existing, invest in their skills, invest in how AI can help them to grow. [00:07:12] Mike McKee: That was so beautifully succinct. You know, how AI can automate a task that would be distracting or take up your time. If somebody is good at AI and is good at allowing AI to do that time consumption for them, are they able to then turn around and command higher compensation? [00:07:29] Sarah Franklin: They are because they have the knowledge that is immediate, that can augment their skills and expertise. And that is how, I mean, even today, the jobs reports information is something which AI helps me deeply understand everything that's going on nuance. I don't have to spend an hour doing research, I can get the information very quickly. And that is how I can then show up with my perspectives as a CEO of a HR tech company to share what I'm seeing instead of spending my time just understanding all of the data. AI can really help me do that and be strategic as a CEO. [00:08:08] Mike McKee: Sarah Franklin of Lattice, thank you very much. Indeed, a big factor in the market, SpaceX shares are bouncing back, even as a massive wave of insider stock hits the market. Yes, we're up almost 9%. Shares climbing Thursday, climbing Friday and Thursday in a multi-day move as the lockup expired for as many as 912 million shares. That's worth roughly $100 billion, but follows a 14% plunge Wednesday after SpaceX's first earnings report as a public company, which showed higher than expected AI spending. One of the catalysts right now is Argus upgrading the stock to buy, pointing to a rapid payback from those AI investments, a $160 price target. But we remain pretty firmly below the IPO price of $135 a share set in June. Okay, coming up, earnings season continues. Twilio just beat analyst expectations for its second quarter, blew past them really. We have the CEO, Cosima Shipchandla, with us next. This is Bloomberg Tech. Cloud communications platform Twilio reported second quarter earnings with strong results, beating analysts' expectations on revenue and reporting record profitability and free cash flow. Yes, that is a stock that's up 29% on track for its biggest jump since May of 2020. Twilio CEO of Cosima Shipchandla joins us here in the San Francisco studio. It's a big stock move. [00:09:51] Speaker 5: Yeah, I mean, we had a great quarter. You know, we were able to reaccelerate growth in the top line, grow our gross profits and turn in record free cash flow and profitability. I mean, I think right now we're one of those kind of rare stocks that's able to demonstrate, you know, quite good financial characteristics, also reduce our stock based compensation and, you know, kind of position [00:10:13] Mike McKee: ourselves as an AI winner. So an AI winner, I find that really interesting. I've tried to talk to as many people as I can about, is Twilio the predator or the prey in this in this AI world? And actually, the response was they are AI proof. Essentially, you have done deals with 4,500 carrier agreements, right? That is bulk messaging. Like that shows that you have a big place in this era. [00:10:40] Speaker 5: Well, I mean, I think the way to think about it, it's actually 4,800, right? 4,800 different interconnections across 180 countries all over the world. Like that's a level of complexity that is regulated. It requires like physical contracts that actually have to get done and a very, very significant level of compliance that we make sure that our customers go through so that we protect consumers on the other side. And that complexity actually creates moat. And I I wouldn't actually necessarily call ourselves predator or prey. I mean, the way that we position ourselves is as the Switzerland of kind of this AI era. I mean, we want to be infrastructure that any company can integrate to and be seamless based on what choices they've already made about it. [00:11:26] Mike McKee: You do have AI based or AI powered messaging tools, for example. We do. Those also show traction in the quarter gone. [00:11:33] Speaker 5: Yeah. I mean, the interesting thing, to be honest, is that AI is a small part of the story, to be honest, for you right now, for us today. I mean, it's certainly creating a little bit of tailwind, but in terms of its like material contribution to revenue, that is still relatively modest. And I think given the fact that we're relatively early innings in the AI story, there's a lot more tailwind coming here for the company. [00:11:55] Mike McKee: Well, look at it another way. How many AI native companies, I know people, some people take umbrage with that phrase, rely on Twilio? [00:12:02] Speaker 5: Thousands. That's the truth. But the reality also is that they are relatively small contributors to revenue, right? The reality on the other side of it is, is that enterprises, like they're the ones spending the dollars, right? So if you think about the contribution to revenue, that's really coming from much larger companies, even though we're super excited to be able to work with all these really creative AI startups, right? Orion AI, L-Tropy, you know, all the way through to, you know, a digital native like an Atlassian or, you know, kind of even a leading home retailer that we pointed to in our most recent remarks. Like that whole breadth of capabilities that we offer to any company on the planet, like that's what gets me excited about the opportunity ahead. [00:12:47] Mike McKee: Again, the stock is up almost 30% and on track for its best day since May of 2020, but up now 76% year to date. So you're getting the credit for it. The big picture academic debate is what does the world look like where a consumer, an individual interacts with a real AI agent? And there are lots of parts of your business where you have to think about that future. How do you think about it? [00:13:10] Speaker 5: I mean, actually, I think that provides even more tailwind, right? I mean, the future that we're literally planning for is one in which interactions are human to agent, human agent to human. That's going to require channels. We're also sort of making investments that anticipate a future in which if you're interacting with an agent, you've got to be able to know who they are on the other side. And so we're starting to make investments in identity, for example, through the channels that we already provide to our customers, and then using context as a means to be able to power this next era of [00:13:46] Mike McKee: agentic AI. Prior to being CEO, you had other roles at Twilio. And I think a lot of people are looking at the bottom line and how structurally different the profit story for this company is. I think it's right to say that that was a focus for you in your tenure as CEO of the company. [00:14:05] Speaker 5: Yeah, I mean, it's been a focus. And I mean, I think we want to be known as people that are running the company. Well, we want to be financially disciplined. I think we have opportunities to make new investments. But frankly, we don't have to start a new investment cycle. We can take the cash flows that we're already generating, reinvest some of that back into the company, but also provide operating [00:14:25] Mike McKee: leverage back to our investor base. We've had a very finance focused conversation. And I'm going to end that way as well. You know, you have before you double digit organic growth, right, kind of set out into the future. What's the biggest headwind or risk to that? I don't see a lot of headwinds kind of sitting [00:14:43] Speaker 5: here today. I mean, look, we always operate in a dynamic macroeconomic environment. I think the AI story, you know, it's a very long kind of secular tailwind. It's probably going to be bumpy from time to time. But as I kind of look through like the medium to long term, I see a lot of opportunities. For the company and, you know, we're ready for the moment. We're kind of hitting our stride and we're very, very excited about what we're building and what our customers are doing. And it's on us to anticipate their next move. Twilio CEO. Cosmo Ship Channel with the stock up more than 30% now. Thank you very much. Let's get over to New York where Bloomberg's Yuhaira Anand is standing by with some news. Yuhaira. [00:15:08] Mike McKee: Hi, Ed. It's time now for Talking Tech. First up, SK Hynix is leading a record $83 billion in share sales by Asian firms, making July the highest ever [00:15:19] Speaker 6: monthly haul for firms in the Asia-Pacific region. And the South Korean company isn't slowing down, with plans to spend $38 billion to expand its chip-making facilities in the country. Plus, AMD has plans to purchase Canadian startup talent, which is a great deal for the company, which is not the same as the stock market. It's going to be a great deal for the company. And the South Korean company isn't slowing down, with plans to spend $38 billion to expand its chip-making facilities in the country. Plus, AMD has plans to purchase Canadian startup Talus to build new AI chips, expanding the company's chip offerings as it tries to differentiate itself from competitor NVIDIA. Talus' technology is used in chips that handle inference and said that hard-wiring AI models into chips can create more efficient machinery. And Moonshot's Kimmy K3 is the latest AI model to escape a sandbox in a third-party test. That's according to research firm Frontier Security. Kimmy K3 joins the likes of models from Anthropic, OpenAI and Meta, adding to concerns on how well these AI companies can control their technology. Ed? [00:16:27] Mike McKee: Thank you, Yahaira, and happy Friday to you. Now, coming up, look at shares of Take-Two, up around 3% to 4% after the company reported earnings, with all eyes on the anticipated release of Grand Theft Auto 6. We'll discuss that next. This is Bloomberg Tech. [00:16:44] Speaker ?: This is Bloomberg Tech. [00:16:48] Mike McKee: OpenAI's first consumer device will look like a doughnut. According to sources, the AI smart speaker is designed to be carried around the home with one hand and is slated to be released next year. The device will be positioned as an AI-first computer that can help users get things done and will compete with moving and be complete with moving parts that help give it personality and is likely to cost more than $300, those sources say. Don't have a picture of it for you. I'm sure we will see one soon. Look at shares of Take-Two Interactive, up more than 4% now. The company posted first quarter bookings, beating estimates at $1.39 billion, but Take-Two kept its full-year forecast below Wall Street expectations and trimmed its profit outlook. And, of course, all eyes remain on the biggest release in the pipeline, Grand Theft Auto 6. Joining us is Bloomberg's Jason Schreier. I honestly kind of feel like we can park the performance in the quarter gone and the kind of financial outlook. It is all about GTA. You have been talking to the company about that. They are signaling that the pre-demand tells us something that this hasn't happened before. [00:18:17] Speaker 1: Yeah, investors, it's funny, these bookings and even on revenue numbers, beating, missing estimates, doesn't really matter. The number that investors really want to know is the number of pre-orders that GTA 6 has right now. And Take-Two is not saying them. Take-Two has said that the number is unprecedented and exceptional and astounding. Those are all words that CEO Strauss Zelnik used. Yes. But they're not saying the exact numbers. So, all eyes are on November 19th for the launch day and the final sales figure. [00:18:51] Mike McKee: I guess the idea is that the world will have an expectation of what that number would be because we have a really good sense of what the prior GTA titles were able to achieve, right? We know the date, but give us the kind of backstory of why it's taking us so long to get to GTA 6. [00:19:08] Speaker 1: Yeah, a couple of things. So, GTA 5, the last game in the series, came out in 2013 and has since sold 230 million copies. It did really well on launch day, but a lot of those sales have come in the year since then. It was really a long tail, an unprecedented long tail for that game. And so, the numbers that we're expecting here are going to be exponentially higher than the numbers we saw from GTA 5 on launch day because the series has gotten all that much bigger since then. As for why it's taken so long, this game has been in development for about eight years since the release of Red Dead Redemption 2, which was Rockstar's previous game. It's big, it's vast, it's got a lot going on. We'll find out more soon. And another kind of date to watch if you're interested in Take-Two shares is August 27th, which is when Rockstar and Take-Two have said they're going to show the first extended look at GTA 6, meaning what it's actually going to look like and feel like to play the game rather than the kind of cinematic trailers that they've shown so far. And that's actually, it's unprecedented, another unprecedented thing is that it's going to be a Netflix exclusive. The gameplay is going to be released on Netflix six hours before it's released on the rest of the internet. So interesting. [00:20:27] Mike McKee: Bloomberg is Jason Schreier with all things GTA 6. Thank you very much indeed. One other company out with earnings is Airbnb and shares jumping by the most in 16 months after the company boosted its annual revenue forecast for a second time this year, citing robust demand in the U.S. and also in Europe. Bloomberg's Natalie Lung is here. What do we need to know? [00:20:48] Speaker 7: Yes, so Airbnb is seeing this really strong demand, especially from North America. Group travelers, really strong people are booking entire homes to go travel with friends. And, you know, it's really contributing to this growth optimism that Airbnb is seeing as kind of a different story from last year, where they would always call out that North America is sort of the drag on the business. And another thing to call out is, you know, this kind of optimism would bode well for a lot of Airbnb's new business initiatives, like a la carte services, like in-home beauty appointments and grocery stocking, as well as their new, you know, hotel booking initiative as well. [00:21:29] Mike McKee: So that's my question. What is Airbnb's technology story, right? Because you have to look past it being a short term rental story right now. [00:21:38] Speaker 7: Yeah. So CEO Brian Chesky is trying to turn his company into an AI native company using AI to help people discover homes more quickly, make a decision on the reservation more quickly and basically convert them into bookers. So upcoming features later this year include AI search will be which will be more conversational with more visual elements than your traditional chat bot. The other thing is like an AI home comparison to that they're testing. So that's what we're going to expect from them in the coming year. [00:22:11] Mike McKee: Bloomberg's Natalie Leung, thank you very much. Coming up, Lyft CEO David Risher joins us to discuss his company's earnings and its global expansion efforts. That's next. This is what markets look like. There has been a sharp slowdown in the US jobs market. Technology stocks are higher. There is outperformance in semiconductors. Bond yields are falling. And it's all about the idea that that interpretation from the market reflects that the Fed will not be forced to raise interest rates anytime soon. Pretty good economic sum. It's halftime. This is San Francisco and Bloomberg Tech. Welcome back to Bloomberg Tech. It's a Friday where markets are being driven by economic data. Technology stocks are higher. We're up 1% on the Nasdaq 100. Some outperformance in chip stocks. But very simply, there was a slowdown in the US jobs market. Not only are stocks higher, yields are coming down on treasuries. And the interpretation is that the Federal Reserve is not under sort of immense pressure to raise interest rates anytime soon. That is what's kind of happening in the here and now of the market. There are bigger and longer term considerations. BlackRock sought to raise debt financing for a metadata center. But there was one type of investor, the asset management giant, was trying to avoid those looking for a quick profit. So it focused on real money accounts, pension funds, insurance funds, to avoid fast trading investors who can quickly tank a bond's secondary market performance. And so far the strategy looks to be working. Bloomberg's credit reporter, Tasos Rosos, is here to explain why. There is a lot happening. Basically, supply has exploded and issuers have tried to reassure the market that supply is not going to overwhelm it. And in the middle, BlackRock's trying to manage that environment. [00:24:07] Speaker 8: It's exactly that. I mean, we were here last month talking about how these bonds underperform in the secondary market because, frankly speaking, people are concerned. People are concerned that so much bonds are going to come into the market. They won't be able to absorb that many. And what banks are trying to do now, obviously, you cannot take away the AI buildup. That's the future the market has actually agreed with that. So that has to be financed somehow. But what the banks are trying to do is trying to take away the risks out of the market as much as they can. As you mentioned, fast money accounts, those who buy the bonds, sell them straight away for a quick profit. We've seen in previous months, they come to the market and the bond price tanks straight away. You have to take them out of the market. And then, of course, you have reassurance by companies saying, yes, we're going to raise $25 billion today, but we won't come back until the end of the year, as we saw yesterday with Alphabet. [00:24:58] Mike McKee: Yeah, we covered Alphabet, you know, recently there have been several $25 billion bond deals, right? I think about Amazon, Nvidia, SpaceX. The main point is that there has been poor trading after that issuance. But the market still keeps going. [00:25:13] Speaker 8: Indeed, it keeps going, but the concerns are brewing a lot. So Barclays, the big British bank, reached out to 300 investors and they ask them, what do you believe is going to drive risk premiums across bonds of the hyperscalers? 60% of them said supply cadence. What they meant by that is the pace of supply. Bring too many bonds and the market is going to go berserk. 25%, which is like a distant second, was whether the AI investment is going to play out. So there are two major risks in the market right now that investors have to digest. One is whether the AI problem is going to keep, which is a bit of a longer term concern. The main concern right now as we speak is what people said, the supply and how you manage that. And this is what banks are trying to do, manage it better. [00:26:04] Mike McKee: This is the story that everyone's been reading about this morning. Bloomberg's Tasos Vosos, thank you very much indeed. Back to tech earnings, shares of Lyft higher. The company reported growing demand for premium rides. Also, strengthening European markets. Super interesting, kind of the global expansion story. Lyft CEO David Risher is with us. There is a very specific data point actually that I'd like to start on. And that is that in markets, specifically San Francisco, where you have Lyft rides and Waymo rides. You said San Francisco grew 20% year on year. That's right. Explain the causal or casual relationship within that data point. Yeah. [00:26:44] Speaker 9: So, you know, our industry is going through a big transformation. And it is the sort of bringing on of these self-driving vehicles. And that's way more courses, the market leader in that. Anytime you see a transformation like this, one of two things can happen. You can either see sort of a substitution or you can see a market expansion. And in this case, we're seeing a market expansion. And it's not that surprising when people take self-driving cars. They tend to like them a lot. They're very reliable product. They're a nice private product. So you can feel like you could have a private conversation. But at the same time, it doesn't seem to take away from people's interest in driven, being driven by humans who can help with luggage or have a good conversation. So it really is accretive. [00:27:18] Mike McKee: This is a micro case study. It's one market, San Francisco. Yeah. But, you know, the questions are, is Lyft gaining market share from Waymo in this city? Or is it that this is an issue of supply? So because somebody cannot get into a Waymo within a reasonable timeframe, they go to the Lyft app. Yeah. Which is happening. Probably both, honestly. Probably both. So interesting. [00:27:40] Speaker 9: Yeah. And I think this is such an interesting thing that's going to play out. My expectation over time is what will dominate will be the market expansion. And again, the reason is sort of simple. You have a cool new product coming onto an existing platform. And what we believe the hybrid network, which is, you know, human driven cars plus AVs, really kind of creates the best possible outcome for everyone. But, you know, we'll all have to see how that works. [00:28:01] Mike McKee: I think that you and I have discussed on several occasions the idea that the introduction of the robotaxi and maturity of the market expands the overall TAM for ride hailing. Yeah. Just recap that argument. I think that's exactly it. [00:28:14] Speaker 9: So, I mean, look, people take just in the United States about 160 billion rides a year in their private cars. Okay. Today we deliver a billion. Maybe the other guys deliver two billion. So let's call that three billion out of 160 billion. And it's a good experience. You're sitting in the back seat. You're able to text. You're able to have your own space. What holds it back? Well, for whatever reason, some people might not want to be driven by another driver or someone else in the car. This takes that away. I'll tell you a very specific story. So I was just with an old friend of mine. I just ran into the airport. Her son had a tragic, tragic accident a couple of years ago. Absolutely devastating physical accident. He's in rehabilitation. For him, the idea of getting in a self-driving car where the doors open wide. Maybe there's not even a driver there. Not that there's anything wrong with that, but it just gives him more space to sort of be in his own zone. [00:28:57] Mike McKee: But it's a technology and an engineering story. It's a design story. [00:29:01] Speaker 9: It's a design story. Exactly. And so anyway, I'm very optimistic about this. And then when I look at our capabilities around fleet management and kind of matching supply and demand, I get really excited about the future. [00:29:12] Mike McKee: LIFT is, let's go back to the core business and earnings, but LIFT is pushing outside of the United States. You know, every time you've been on the show over the last year, there's been a development on that front. But what did we actually learn through your earnings about how you're growing ex-USA? So here's what's really cool. [00:29:28] Speaker 9: So LIFT was primarily a domestic company up until about a year ago, maybe call it 18 months ago. Then we started to expand in Canada. That's gone very well. Now we acquired a company called FreeNow and a couple of other smaller companies overseas. Okay. What's happened since then? We're in the process of transforming ourselves to a truly global company. Some of that is internal stuff, back of the house, multi-currency, GDPR, all these sorts of things. But we're also beginning to introduce new functionality to customers. So I was just in Barcelona a couple of weeks ago. I was very lucky to be there. I got a chance to check out on our beta app, the ability to use the LIFT app, not a new app, but the LIFT app, to hail local supply, local taxi cab in Barcelona. I did it four times, worked flawlessly. So good because I don't have to do a different app. I already know the user interface and so forth and so on. FreeNow, the company we acquired, they're also growing now, too, because of some of the innovation and the technology we've been able to add to their stack. So, look, our service levels are really good. And I love that about our product. And now we can take that to a more global audience and hopefully continue to grow as a result. [00:30:24] Mike McKee: You know, it could be Europe, Spain specifically, but how are those markets different to the United States? How does the consumer behave differently? [00:30:32] Speaker 9: You know, there are subtle differences. I mean, a very significant, I guess, difference, not subtle, is the role of the taxi cab in a lot of Europe is very significant. You know this. [00:30:41] Mike McKee: They're culturally entrenched in many economies in Europe, as an example. [00:30:44] Speaker 9: Very much so. And unlike maybe in a New York where people almost begrudgingly take a cab, for example. In a place like Spain and certainly in London. [00:30:52] Mike McKee: You're going to have New Yorkers phoning into this program now. [00:30:54] Speaker 9: And I get that. And I understand. Well, and New Yorkers have opinions about their taxi cabs, right? Sure. But in Spain, it tends to be almost a career. You know, you get in the car and it's probably someone who's been doing it for many years. Maybe his father did it as well. Certainly in London, everyone knows the knowledge. I mean, it's a whole sort of incredible thing. So that's a really significant difference. And for us, it favors us because FreeNow is strong in taxis. And the sort of double click there is because taxis seem to be quite regulated. The relationship that that company and our company has with governments tends to be quite strong, which back to the AV question, really matters a lot. Because the AV is new technology and for a lot of governments, it feels maybe a little bit intimidating. And we can help there. So it's a really nice sort of set of circumstances that tends to sort of favor our business. [00:31:38] Mike McKee: In markets outside of the United States, Uber is already there in some cases, Bolt, et cetera. How are you going to make Lyft different from a technology perspective or just a product perspective? [00:31:49] Speaker 9: Yeah. So stay tuned on this. This is actually a very, very live conversation we're having internally. I can use some of the examples of the U.S. maybe and give you a little sense. Please. So in the U.S., we've really redoubled our innovation. And you know some of these products, Women Plus Connect. Yes. And I just turned it. We've given over 175 million rides between women and women in the U.S. over the last couple of years. Lyft Teens, Lyft Silver. This is real innovation. We're hoping to bring some of that innovation to the European space for sure. And then there's also a lot of conversation around, you know, let's say the reputation of those guys in Europe isn't necessarily super. People don't necessarily love the company. I'll just say it that way. And we hope we bring some joy to the conversation as well. [00:32:27] Mike McKee: Internally, where is your biggest focus on the technology side? What are the types of people you're trying to bring in and things you're building, rebuilding, code migration, literally anything on the tech side? Yeah, for sure. [00:32:38] Speaker 9: So many interesting things. So I'll give you a couple of examples. Some of it's basic. Some of it's more far reaching. Here's the basic thing. We now pick people up on average. So 75% of the time, we will pick you up either the same or faster than our big competitor. Okay. Why is that kind of a big deal? Because our market share is smaller. So doing that reliably 24 hours a day, seven days a week, because people are busy. They want to get to where they are. That's an awesome accomplishment. I'm hugely proud of our marketplace team for accomplishing that. And then bigger picture, I'm really excited about Lyft Teen, one of our newest products that allows teens to get in and get rich. They want teens to get in and get constant messaging back to their parents to make sure the parents know that they're safe and sound. It's just a good, I look at this as almost a generational thing. A new car now costs like 800 bucks. It looks going to be 800 bucks a month, 50,000 bucks. Yeah, on the lease basis. On the lease basis. Plus maintenance, plus gas, all these sorts of things. Lyft is just a better answer for a lot of people. And so I'm sort of excited when I look two, three, four, five years out at some of the kind of, you know, teen innovation now, because I think that'll help change a whole generation. [00:33:38] Mike McKee: Lyft CEO, David Risher, thank you very much for coming in. Thank you for being back on the show. Coming up, sports betting platform DraftKings is up next in the earnings conversation. DraftKings CEO and co-founder Jason Robbins is joining us. This is Bloomberg Tech. Okay, ending the week with more tech earnings. DraftKings reported disappointing second quarter earnings amidst growing competition from new prediction market players like Koushi. But there's some post momentum post World Cup setting up a pretty strong back half stock up seven and a half percent on track for its best day since June 26th. DraftKings CEO and co-founder Jason Robbins joins us. It's interesting, right? Initially, that was the reaction. Disappointment second quarter earnings. There were favorable sports outcomes. There was promotional spending. And then this morning, everyone, you know, was like, actually, you know what? The World Cup seems to have some tailwind with it. [00:34:38] Speaker 10: Well, I think that really what you're seeing is that after having a little time to digest and hear some of the context, people understand how strong a position DraftKings is in from a business perspective right now. Our core business is on track to do about a billion dollars in adjusted EBITDA this year. You know, just a few years ago, we were losing money in that business. Now it's a very strong cash flow generator for us. And we see really strong traction on predictions, enormous growth over the last month or two. And the best time of year is about to come with, you know, the fall season and NFL and everything that that brings. [00:35:14] Mike McKee: OK, bear with me. But apparently people were betting on whether you would say Koushi on the earnings call. Prediction markets are a factor. Just react to that, Jason, please. [00:35:26] Speaker 10: Well, I, you know, making trades on whether someone is going to say something on an earnings call probably isn't something that I think should be out there in my opinion. But nevertheless, I understand it is. I didn't know that, though. I didn't read it. I don't remember. I don't think I said that. No. Noted. Hopefully not too many people took the positive side of that one. [00:35:50] Mike McKee: Jason, can you can you just explain the World Cup, how it manifested for DraftKings, the behavior of people that went to DraftKings during it and whether there is some momentum carried out of it for the second half of this year? [00:36:05] Speaker 10: I mean, World Cup on pretty much every metric that we look at exceeded our expectations. We acquired more customers. That was both true of predictions but also true of our online sports betting business. We are way better than we expected from an acquisition standpoint. We ended up having much more efficient acquisition, too. Our CACs were 25% lower than we expected. Total engagement was big. We had a really strong increase in MUPS as we published in our report. Also saw a really strong post-World Cup engagement. Probably the most exciting thing to me because, you know, a lot of people were probably thinking us included this World Cup audience. Are they going to stick around or is it sort of come, you know, bet on the World Cup trade on the World Cup and done? Not at all the case. July, we actually saw a 20% handle increase after the World Cup ended, which is an enormous number compared to where we were going into it. So you're absolutely right. I think a lot of momentum coming out of the World Cup, right going into our most important time of year. So it couldn't have been time better. [00:37:04] Mike McKee: And Jason, very quickly, those were people that went to DraftKings maybe for the first time in the World Cup and then stayed? A lot of them were. [00:37:11] Speaker 10: A lot of them were people that had played previously and activated and continued to play afterwards. Remember, after NFL ends, sometimes a lot of customers go dormant. So these big moments are really, you know, great opportunities to get people to engage with the product again. And you never know if they're going to drop off or not. We see that sometimes or if they're going to continue. And at least for the World Cup audience, it seems like both the new customers and the ones who reactivated are all continuing to play through July. And I think coming into August and September when we have our most busy time of year, it's going to only continue. [00:37:44] Mike McKee: Jason, in prediction markets, the field of players seem very focused on how they communicate with the under 21 category. What is DraftKings policy and approach basically to marketing to that demographic quickly? [00:37:59] Speaker 10: Well, I think this is an important distinction between DraftKings and some of these other companies out there. We are not, as you see some of them, doing marketing that you can pay your rent money in marketing to college campuses on fraternities and things like that. We are focusing on marketing to adults and positioning this as an entertainment product, which I think is the right way to do it. And, you know, listen, those are things that right now are getting a little bit of scrutiny and I think eventually they'll get reined in, but that's not up to us. But I do think it's something that we feel like we are really, you know, as a longtime trusted brand that's been out there for a long time and plays the long game and really understands, you know, it's not as much as it might get you short term volumes. That's not what you want to be doing in marketing on college campuses and things like that. [00:38:48] Mike McKee: DraftKings CEO Jason Robbins, thank you very much for your time on Bloomberg Tech. Coming up, TikTok tweaked its algorithm in 2021 to stop users from being overwhelmed with harmful content, but it didn't roll out the safer version to everyone. We'll have that story next. This is Bloomberg Tech. A judge in New Mexico has ordered Meta to pay over $500 million and make changes to the way young people use its platforms following a landmark child safety case. The fine which will be paid to a fund to address damages is in addition to a $375 million civil penalty from the case. Meta says it disagrees with the ruling and will appeal. Another story on the growing concerns about social media and mental health. In 2021, TikTok tweaked its algorithm to stop users from being overwhelmed with harmful content, but not every user got the update according to an internal document. To see if the change might reduce the app's stickiness, the company kept 10% of users or about 15 million people on the old version. That control group included 16-year-old Chase Nasker. TikTok's algorithm pushed him thousands of videos about suicide, sadness and loneliness right up until he took his own life. This is a difficult story, but it's an important story that Bloomberg's Olivia Carville reported for Bloomberg Business Week and Olivia is with us now. Take us inside the reporting. I outlined the basics of the back story, but it is both a technology story on the algorithm side and a policy decision by the company. [00:40:38] Speaker 11: That's right, Ed. I mean, to understand the story, you have to understand the timeline. And it really begins back in February of 2022 when a 16-year-old boy named Chase Nasker died by suicide in Long Island. After that, his mum was trying to understand what had happened to Chase because he had no mental health issues. He'd never been diagnosed with depression. He had a big group of friends. He was an honours student at school, happy, friendly, bubbly, energetic. So she wanted to understand what had happened to Chase and she went searching for clues on social media. When she gained access to his TikTok account, she was shocked at what she saw, which was a nonstop stream of really sad videos, many of them encouraging suicide. So a year after Chase's death, I write a story for Business Week about his account and the algorithm was feeding him. And when I reached out to the company for comment, it resulted in this internal review that we're only just understanding now. This was an internal confidential document that outlines how the company essentially analysed Chase's watch history in extraordinary detail. What he saw in the weeks, days and hours leading up to his death. And it confirmed from the company's perspective that he fell into a filter bubble. This is like an online echo chamber of sad conflict. And it tells us why that happened, which is because TikTok was running an experiment on filter bubble prevention strategies and it withheld a safety feature from 15 million US users. And Chase was included in that control group. [00:42:22] Mike McKee: Find this difficult. Sorry, Olivia. Does this still be explicit on TikTok's response in so far as like what is it they've changed? Okay. [00:42:33] Speaker ?: Sure. [00:42:33] Mike McKee: In response to the report and officially what it is they gave you in response to the report. [00:42:39] Speaker 11: So within within this review, the company's own employees talk about how the control group was too big. It shouldn't have been set at 10 percent. It should reduce the control group down to one percent of users and reduce the length of time they would be exposed to this kind of nonstop content about problematic or harmful issues like extreme dieting or in Chase's case, suicide and depression. So they wanted to reduce not only the size of the control group, but also the length of exposure. So it went from half a year to a full year down to just seven days and from 10 percent of users or 15 million people down to just one percent of users. And they made that change right around when they understood what had happened to Chase's account. And that is outlined in the document. In response to this story, the company did provide a written statement saying that they are equally committed to the safety and well-being of users and their hearts break for any family that's experienced a tragic loss. They pointed to other safety features they have rolled out to try and protect teenagers. [00:43:45] Mike McKee: Bloomberg's Olivia Carville. It is a must read, a difficult read in Bloomberg Business Week. Thank you very much. That does it for this edition of Bloomberg Tech. Do not forget to check out the podcast, recap all of the reporting and conversations we've had today, this Friday, but also throughout the week. From San Francisco, this is Bloomberg Tech.