Its not going to cut it. We are now in a new show me the money era. You might remember monster surged showing investors that ai in this here and going to book a lot of revenue this year. Microsoft announcing earlier this week that it would be charging for its ai tools and shares promptly hit an alltime high, the shares 30 per user per month. Very different than the era of tech when products like gmail were given away for free. One analyst asked if they could generate some 14 billion in new revenue per year from microsoft. It is important that investors see that investment. Here is why. The seven companies, you may know them as the magnificent seven markarian most of the market right now. Three of them report next weekend because expectations are so high, even a wobble from anyone of them could shake the entire market. Lets discuss this. Welcome to the show. Eli, im going to start with you. You can do what nvidia did and that is book actual billions in revenue on this ai shift. The real interesting thing about it is how much risk they took, building up capacity before the ai boom, so i think youre really seeing the upside of that risk payoff. The question for all of these companies now is that it is experimental pricing. I dont know if its worth 30. The market has to decide so we are seeing competition pricing. Much can we charge in an era where there is this much competition . I mean 30 per user per month at the high end, 14 billion potentially but how certain is that . Theyre not going to be booking this with a report next week. No, they are not and they dont even have a date on when this is going to be broadly available. Right now they are only testing that copilot we were talking about with the microsoft 365 suite. Only a very small group of the current enterprise customers and theyre not even talking about selling to the schools yet for the obvious chat gpt cheating reason. As we go into microsoft earnings next quarter, it is not just about selling these copilots or other ai tools. It is also a cloud play because microsoft, the same day they announced that pricing plan, they announce the deal with facebook. Microsoft is also saying our cloud is here for other ai development. Amazon is trying that as well. Google is trying that, as well, but microsoft is playing it on both sides. Right, so more opportunity to book some revenue. By the way, thank you for being with me. Give me the counterpoint. You operate in a world of Venture Capital so you are investing many times before there is even any revenue. You want to get the stock once theyve already booked the money because then the upside is gone. It depends on where you are investing. I think what nvidia is going through is different than everyone else. No one else is going to record a 40 increase in q1 revenue because of ai. Nvidia is a monopoly provider of the core ingredient that makes ai work. The chip that makes it happen. They are in a wonderful business. Will they be a wonderful business for 30 more years to justify this stock price . I dont have a clue. Microsoft is probably in the next best position. Theyre not going to sell 40 more. They might get a few people trying this Office Product in the next couple of quarters. Its not going to move the needle. All right, there is nvidia. If there is nvidia, there is maybe microsoft, amazon, google. Maybe they are further behind but lets say they are closer to booking this revenue that some of the next level down Tech Companies, so how does the shape out . I think the point about nvidia being a monopoly provider is really smart. At the end of the day, nvidia took the big risks early and now they are it. There what you get. We have heard many stories about companies essentially trying to buy their way into position. How durable and profitable those monopolies are remains to be seen. Nvidia knows it in the big difference between ai and [indiscernible] as everyone knows it is useful. You can charge for this at rates that make sense to consumers, that makes sense to businesses, because the productivity gains are there. I think that piece of the puzzle is still undervalued in the market. How theyre going to get that money this quarter eventually they will. Theyre going to charge you asking why are people going to charge for his first book, because you can charge. Its delivering value. Its replacing labor. It saves money. And then the second thing is, it costs money to do this. All these guys are leveraging up the expensive nvidia chips. Chat gpt is not free for anyone other than the casual user. All of these ai products are very computation intensive to deliver. The magic under the hood can be quite expensive and we are definitely seeing that, even at the early stages. It costs a lot of money to build these companies and the pressure was there to monetize that and get paid. Steve, everyone is excited about generative ai. But we recently got a report that apple is looking at its own large language model. How do we know this is not eventually commoditized like a lot of the other bubbles we have talked about. We are so excited about Enterprise Software in 2021 going public and running up to these huge valuations. How do we know that generative aspects are going to become commoditized and microsoft cant charge. I would argue to a degree its already commoditized. Just like my inbox, go in the app store and type in chat gpt and youll get a gazillion different results but look, when you talk about those magnifico seven, one thing we have to look at going into this earnings season starting next week are four p e ratios and how expensive the starts of gotten. You set this up really nicely, how we are going into this earnings season where they have to show the money. Well, also, if they dont show the money we can easily see those stocks come down because of how expensive they have gotten over this ai hype. So have they been commoditized . Maybe a little bit but only a few names are going to actually show. To your point about apple, it sounds like more of a developer to appear in i dont think theyre going to have some supercharged gpt. I think that is more of a demonstration. Obviously we know apple is going to want to do it in a more private way on the device, which also means less capability because if we are doing it on the phone, you cannot use those nvidia chips that are more capable about mobile profits. This is one of those times when you see a simple sentence and answer was two sentences and its totally wrong. Isnt this the quarter that changes . That was the case until nvidia said no, its here. I addressed it very specifically. What you have to understand is the value change, how long it takes before and Business Companies customers pay money. Nvidia is going first because they make the chip that allows people to make the model. Open a i have made the chat gpt model. Everyone is furiously trying to take effort to catch up. Maybe it gets commoditized. The reason nvidia is doing so well, all of those Companies Including microsoft and facebook are spending hundreds of millions of dollars in a catchup game, but there is no revenue and then one level further down, even after you have built a model that someone is got to rapid indecent software to sell it to individual businesses and that is one or two years away so going back to my point. I dont know anything about this quarters earnings season, but its nothing to do with ai. Spoken like a true Venture Capitalist. Investors may be thinking about this in a different way. They may think that this is no longer secular. This is no longer way off in the future and that is what i worry about, that nvidia brought this right in front of them and said if we can book billions of dollars in revenue, why cant you . I agree. Nvidia is the tip of the spear here. Youve got to buy the hardware to run the models. You know what company is not profitable . Open ai, at the heart of this entire boom. They have not figured out a sustainable multiple Business Model that makes all of this work so nvidia is the start of it, so they can sell you hardware. Open ai is selling the model. Theyre selling a lot of this outbound capability. Its a long way to go. You said the magic word, unprofitable. That is something ive been talking about a lot lately so lets talk about it, the return, lets call it, of speculative tech. Some of the pandemic darlings in 2022 were left for dead by investors but they are back. Investors are feeling bold again pillar and Delaware Court rejecting amcs deal to send shares surging after hours for oasis syncing. It feels all very 2021 again. I have been looking at the fundamentals of Companies Like carvalho. Not much has changed. It still unprofitable. Revenue is declining. Does this and like it did in 2022 . Youve seen this at the earliest stages. I think it is super hard to opine on some of these public stocks in 2023 and i saw a really nice tweet that you show the two year trajectory of most of these stocks. It is the value of accident goes down to 1 10 accident may go to to 10. Its just way down from the high. So basically it is in the margin of error like the world is awesome or its going to end on friday oh, it turns out its not going to end until a week next friday. Lets double the stock. I think theres a lot of noise in the system on some of these companies. They were overlooked, under left and people are trying to figure out where they should be. Yes, and where are they now . Should investors be worried that a lot of these names i just mentioned are still nowhere close to where they were in 2021 . My personal theory is that the soldiers tracks with inflation. Inflation is down so mean stocks are up and maybe its just that. I think there are a lot of investors out there who like playing these games. They are not looking at the fundamentals and barbenheimer weekend it seems like a good place to park some money. A good point. We have two big releases. It feels like 2021. How did we end up here . Big tech, is it going to carry the season . I guess that is what it comes back to because they are the ones that make up this market. As you like to say often, as apple goes, so goes the market. Thats right. But again, i am looking at microsoft and meta. Meta is going to give us a good read on the ad market. Microsoft is going to give us a good read on the cloud in their i. T. Spend. Also, i would add it does track inflation. It also tracks the dollar getting a little bit weaker, so these are big, Multinational Companies so the dollar getting weaker really benefits apple. Remember last year, they had to raise prices on the iphone and some of their markets because of the Dollar Exchange rate. So any kind of commentary we get from apple and the rest of no Foreign Exchange is easing up for them is going to be really interesting, too. Im glad you bring that up. We will be talking about that later. For now, guys, thank you so much for being here with me. Coming up, whatever happened to the ridesharing wars . These days it is feeling more like the ridesharing duopoly. We have an exclusive with lyfts new ceo. We are just Getting Started on the cnbc special taking stock. The biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. It still does. What can you do with spy . Is it possible to protect my business from Cyber Threats . It is, with comcast business. Helping every connected device stay protected. Yours. Your employees. Even. Susan . Hers, too. Safe. Secure. And powered by the next generation 10g network. With comcast business, advanced security isnt just possible. Its happening. Get started wih fast spees and advanced security for 49. 99a month for 12 monts plus ask how to get up to a 750 prepaid card with qualifying internet. Back in the day ride sharing competition was fierce. It was seen as some of the most innovative and Disruptive Companies in america. Lyft positioned itself as more of the nice guy with uber taken the brunt of regulatory crises. If you remember left gaining market share and founder travis stepping down. Since then, the gap has only widened with uber polling clearly away with its food delivery business. Now lyft is worth less than the 7. 3 billion it has raised over its lifetime. Lift cofounder handed over the job to david risher who spent most of his career running a nonprofit. Since then, he has cut prices and announced layoffs. I sat down with him to discuss what comes next. What is telling you writers are back . A couple things. First of all the numbers and we have thirdparty data out there. Its a little zerosum when you Start Talking about it that way. More interestingly from what we can tell the whole market is growing, which is better. Why are they coming back . Part of it is we have better pricing than we have for a while and everyone loves a deal. One of the nice things better pricing does is you get picked up a little faster. The better prices you have, the more writers you have and the more writers you have, the more drivers you have and everybody likes that. Then we have a product called weight and save. It allows you to save a little bit of money and everyone likes a deal and about 30 of our rides are weight and save rights which means people are liking having a little choice in being able to save some money. You have been more aggressive on pricing. Thats one of the things you told me when we set here a few months ago and you are just starting. Going back a few Percentage Points in terms of market share, what do you do now . Can you get more aggressive in pricing . Our strategy is not really to compete on price. We want price to be off the table. But it has been most effective so far. Its definitely a good starting point. The way i think about it is, i really think it is in everyones best interest to have uber and lyft on their phone but there are going to be times one of us might let you down. I hope it is never us but i really hope you have choice because people like that and i think if you start thinking of it that way then you will understand how we are thinking about our kind of almost reintroduction to the world. What you want to accomplish in the next 100 days . Thats a personal. So, the real focus is on execution, just doing better and better so wait times go down and prices stay good and on what you are going to start to see are more differentiated services and what i mean by that is, you know, we both, 1019 and lyft, have a basic product that picks you up and take sure you want to go. We are trying to be more clever about it, innovation. For example and some airports now, when you touchdown on the tarmac you can actually open the lyft app and we will start to get a ride coming for you so that by the time you get to the edge of the airport, past baggage claim and to the curb, the car is waiting. The differentiation allows us to say you know what . You really do need both apps on your phone because sometimes one is going to do a better job. So, is your aim to increase your market share . Its funny. I dont think the market share is an end goal. It just is an indicator we are doing well for writers and drivers. Im just as excited and the whole team is, and growing the whole marketing getting more people using rideshare more than the once and twice a week that most people do it. When you say you want people to have both apps on your phone, are you still in competition with uber or are you now happy to be the number two player . We are for sure in competition with uber. But being number two is not necessarily a bad thing. Pepsi is a great business. You can have a great business and be number two but that is not the goal. The goal is to get better every single day for writers and drivers and the better we do it wall street has seen share prices diverge. A lot of that came before youre in this position but even now, uber is the number one company. I think this market wants to be for drivers and writers they want two strong rideshare apps. It helps business and it helps drivers and riders. I think both companies are going to try to differentiate in different ways beside just basic price and that is how i think you are really going to see this play out. When you go back over a lifetime do you think the focus on what product rides and what market in retrospect was that the wrong strategy . I think focus is generally a good thing. I think when a pandemic hits you have got to look at yourself to say, do we have the right tools and i think that was a very difficult time for lyft because we really only had one thing, which was transportation, and nobody wanted to go anywhere. After that, you say gosh, we could have done something different, but where we are right now, i love it. I think there is so much innovation left. So the founders, logan greene and john zimmer, they still maintain control through their voting shares. Are they engaged in the daily business . Met with e daily business but with the Board Members and they have been very gracious at this point about saying look, our big value add at this point is to turn it over. I was talking to logan this morning and im talking to john tomorrow. They are super communicative. How do you think your leadership style differs from theirs . I am both blessed and cursed with an ability or inclination to make decisions quickly. It can be a curse because sometimes you get heavier stuff but i would say on balance, in a fastmoving industry like ours, making quick decisions is a strength and that is something i bring to the table. I also would say i am a very customer obsessed person. I spent many years at amazon. I sort of learned at the altar and i feel that is something that really matters, making sure whatever we do is customer first. I would say those are some of my strengths. Are they slow . Is that why the gap widens so much over the last year . I dont know that they were slow, but it was their own company, so they needed to be thoughtful. In a way, i get a little bit of a pass. Im building on what you built and i can move things forward in a way that is a little different. Is lyft still innovative . What are some of the innovations you are thinking about . I think there is a lot of innovation to be done about older americans. Their kids to want them to drive as much so i think there are some things to be done there. Drivers want to earn more. We know that. Imagine you get a personalized report as a driver saying here are some things that if we did we would earn 10 more. Instead of driving on a tuesday, drive on a wednesday. Or if you see a shift a little bit toward evenings you probably earn 10 more. That is the sort of thing i think ai can do to help our drivers to be better drivers. Door dash and again, the economy is testing a new hourly wage option. Is that so