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A Turning Point for Finance? Examining Tech and the Shifting World Order
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00:00Bonjour, je suis Caroline Kernan de Bloomberg Television, based ici en Paris.
00:08Je suis très heureux que vous vous rejoignez nous pour une nouvelle super-exciting conversation
00:13à la crossroads entre tech et finance.
00:17Je veux commencer avec vous, Lynn Martin.
00:20Obviously, vous êtes une des femmes en Wall Street,
00:24la présidente de la New York Stock Exchange.
00:28And I want to start with how this world order has been shifting over the past few months
00:34since the election of Donald Trump.
00:37Obviously, at the beginning of this year, there was a lot of hope in terms of cooling inflation,
00:44falling rates, a lot of optimism about this new U.S. administration.
00:50How is this anxiety now, since the trade war, really impacting the markets?
00:57And IPOs?
00:59Yeah, it's a good question.
01:00Thanks for having me.
01:03When we entered the year, there was a tremendous amount of optimism that for the first time
01:08in, I guess, three or so years, probably even four years, there would be an onslaught of IPOs.
01:18There would be a large amount of companies coming to market.
01:22And as we moved through Q1, in particular, we saw a variety of companies flip public.
01:29They were making plans to go.
01:31Then, of course, we had the beginning of April, which put a variety of those plans on pause.
01:38At the New York Stock Exchange, what I like to say is we were meant to have about seven
01:44IPOs right before Easter, and all of those had pushed.
01:48Now, fast forward to today, a lot of those are starting to get out.
01:52So, I am very optimistic about IPOs for the rest of this year.
01:58Those companies who have already gone have done really, really well in the market.
02:04A couple that we've seen debut on us include Hinge Health, which was one that was planned
02:10for the beginning of April.
02:12And last week, Circle, which made its public market debut, Circle, in particular, priced
02:20$2 above the revised range.
02:22They upsized the deal a couple of times.
02:25So, now, as I'm talking to you today, they're a $25 billion market cap company in just one
02:31week.
02:32Last night.
02:33Huge.
02:33Yeah.
02:34Yeah.
02:34Huge appreciation considering at the time of their pricing, they were going to be
02:40were around $7 billion.
02:42So, the market has absolutely rewarded them.
02:45Just last night, another amazing technology company, Voyager Space, also priced.
02:52They're actually ringing the bell while I'm sitting on this stage.
02:57Again, upsizing and pricing above the range.
03:00So, the markets feel like they're now open.
03:03So, I'm excited about companies that are going to be coming to market for the rest of this
03:08year.
03:08So, you think that is the right time for all these tech scale-ups are there to go public?
03:16I don't know if it's the right time for every single one.
03:20You have to be public market ready.
03:21Being public market ready comes with a variety of things, including, you know, either profitability
03:28or a path to profitability, a clear, defined strategy, a variety of preparedness internally.
03:38If you are a company that's still in incubation stage, you're still scaling your business up,
03:44you probably shouldn't go public.
03:47You shouldn't rush to the market.
03:48But you should know that the market is ready for you when you are public market ready.
03:55Philippe, obviously, I want to get your perspective now from the private market side, the tech
04:00venture side of things.
04:02You're at Accel.
04:03Obviously, you've done a slack of investments from scale to Dropbox to Dr. Lib, Blablacar,
04:11Facebook in the early days.
04:14What do you think from the private market's perspective?
04:17Are we going to see a revival of dealmaking?
04:20Are we going to see in the second half of the year, perhaps, opportunities finally for
04:24exits?
04:26Yeah, well, it looks like, as Lynn was saying, that now the market, the public markets are
04:32reopening for companies.
04:34I mean, we saw with the IPO of Circle, which is now, as Lynn mentioned, worth $25 billion,
04:40which was one of our investments as well.
04:42We look at CoreWeave, which is now, you know, it has a, you know, difficult start, but now
04:48it's worth like $75 billion.
04:50I think on the M&A side, we're all still seeing some exciting things, like Wix, sorry,
04:57Wizz was $32 billion, Informatica is $8 billion.
05:02So now we're starting to see some momentum on the exit side, which is great after the
05:07lull that we saw between, you know, after kind of 2022.
05:12So I think that's very exciting.
05:14And now we're seeing it like on the, you know, very large transaction.
05:17I think what Lynn said, which is particularly true right now, is that the bar to go public
05:23is pretty high.
05:25Like today, you don't want to go public as a $2 billion market cap, right?
05:30So you want to go public at minimum $5 billion of market cap.
05:33And for that, that means that you will need, you know, $500 million plus in revenue.
05:39So you need to reach a pretty large scale compared to, if you look at, you know, 15 years ago,
05:46you could be a $100 million company and go public and be worth a billion dollar.
05:51And that was, you know, a good outcome.
05:53Today, that path is not possible.
05:55So you have to get from this $100 million revenue to this $500 million in revenue to basically
06:00access, you know, the public markets.
06:03And I think on the M&A side, I think we're seeing a lot of large transaction now.
06:08And hopefully this will also translate into smaller transaction and give more liquidity
06:15to, you know, to the venture portfolio overall.
06:18I'm sure we'll talk about liquidity a bit further on.
06:21But Bruno, I want to get your take.
06:23Obviously, even though there seems to be positive signs about this new momentum
06:28in the second half of this year, there was a lot of volatility since the beginning of this year.
06:34Do you think this geopolitical situation, this U.S. policy shift over the past few months
06:42has actually created opportunities in France and in Europe?
06:49Well, it's kind of a wake-up call for the European tech.
06:53I think the opportunities are quite there because we see that we're moving, even the tech itself
06:59is changing.
07:00I would almost call it like a quantic problem where uncertainty becomes the rules.
07:08And therefore, there is a clear definition that it's not going to be flat again.
07:14So what happens in the U.S. may just stay there.
07:17And what happens in Europe right now may just be interesting to watch because there are some
07:21interesting takeoffs in the redistribution of all the cards.
07:28So I would not see it as a pain.
07:31I would just see it as a huge opportunity for private investment next to public investment
07:38in France and Europe to bet on Eurotech.
07:43And especially with France 2030, which I'm piloting, the French government injects 54 billion euros
07:52in innovation.
07:54That's a massive push.
07:57In the course of three years, we already invested 40 billion in the French innovation tech.
08:02So we're lacking right now the awareness of the private sector next to the public one.
08:10But we know we're investing for the long term.
08:13So that's probably your comment about the turning point for finance, that the quick money might
08:20be just a little bit of the past.
08:22Investing on the longer term might be the new rules, because all your new tech we're betting
08:27on, especially on the data centers, on AI, are probably to be seen with a long tail, not
08:34just like a short return.
08:36That would be my comments.
08:37You presided the Choose France Summit just a few weeks ago, where there was about $20 billion
08:44of new investments announced.
08:46Do you think some of them were actually triggered by this shift in U.S. policy?
08:51are you receiving calls maybe from U.S. investors in tech and science who want to relocate or
08:58redirect their investments from the U.S. towards Europe?
09:02Well, no doubt that there is probably, it's adding to the point.
09:06But the main point is the attraction for especially France and Europe in terms of talent.
09:13I think talent is going to be a major trump card in the future bet on techs.
09:18And in Europe and France, more specifically, the investment in talent this year only has
09:24been close to 1.5 billion euro in hydrogen, nuclear, tech, AI, you name it, bioproduction,
09:33all those new deep tech systems.
09:35And the key is to have in the future those talent generating more startups, more activities,
09:42and building bigger companies.
09:44Lynn, obviously Bruno was talking about all these new investments in France.
09:49There are some French startups, scale-ups I should say, in fact now, like Content Square, Dataiku.
09:57They are potential candidates for IPOs.
10:01They have a foot in New York.
10:03Are you talking to these companies?
10:06Why do tech companies in Europe and in France, as they grow bigger, why do they have to go
10:12to the U.S.?
10:13Is that logical?
10:15I mean, we're talking to companies from all around the globe, not just about IPOs, though,
10:22about how to embed their products within our tech stack.
10:27Because innovation is coming from all around the globe, and we always pride ourselves as
10:31having the best technology, the most resilient technology.
10:35So it would be foolish if we didn't speak to the best that is out there.
10:43I unsurprisingly don't think there's a substitute for the U.S. markets in terms of breadth and depth
10:49and liquidity and resiliency.
10:52It's why we've been around for 233 years.
10:57We've seen many challenges.
10:59We've seen many bouts of volatility.
11:02And the U.S. markets, after those bouts of volatility, have come back stronger.
11:08So what advice, obviously, as the president of the New York Stock Exchange, you were teaming
11:14up before with Euronex, now you're obviously separated.
11:18What advice would you give to your counterpart, Stéphane Boujna, the president of Euronex,
11:25or to other exchanges in Europe about how to replicate this model of liquidity and flexibility
11:33that you have in the U.S. in order to attract those investors?
11:38Well, I mean, as you mentioned, we still consider Euronex a distant, more distant cousin now
11:44than we did when we were part of the same family.
11:47But I think Stéphane's done a fabulous job with that exchange and scaling the services
11:53and building the services that he has built out.
11:57I think it comes back to regulatory uncertainty and lack of regulatory harmonization across
12:05the various exchanges, which is one of the things that has made the U.S. markets uniquely
12:13liquid, uniquely transparent, the regulatory regimes that we operate under.
12:22Philippe, what is your take on this?
12:25Why do tech companies, as they grow bigger, why do they turn to the U.S. for fundraising?
12:31What's missing here in Europe for this?
12:35There was a report, for example, from the French government earlier this year,
12:39mentioning the lack of pre-IPO funds.
12:44Is that something, for example, that's missing here?
12:49Personally, I have a different view on this.
12:51I don't think there is a lack of funding for companies.
12:56I think if you take Accel, I mean, we have a $4 billion late-stage fund dedicated to pre-IPO
13:02company.
13:03And, you know, we're deploying that globally, including in Europe.
13:08So I don't think that there is really a lack of fund.
13:10I think the question is, you know, if these companies want to go public, then what is the
13:18path to going public?
13:21And it really, you know, there is, I think, a difference by sector.
13:26If you look at companies that are the more traditional software companies, the companies
13:32that are selling to big enterprises, I mean, half of the market is in the U.S.
13:38So if you want to be a successful company, you'll have to have a very large footprint in the
13:43U.S. market.
13:44And once you have these large footprints in the U.S. market, then, you know, it's more natural
13:50to go public in the market where, you know, you have the biggest share of revenues, right?
13:56And then there is the, on the other side, you have companies that are more focused on small
14:01businesses or companies like Dr. DeHib, who are focusing on health.
14:05They focus on Europe.
14:07And for these companies, I think Europe is going to be a natural, European markets will
14:13be a natural way to go, you know, to go public at some point.
14:17So what we're now, if you look at the ecosystem in Europe, I mean, there was a lag between,
14:24you know, the U.S.
14:25It started in the early 80s.
14:26I think in Europe, it started in the, you know, at the beginning of the century, so kind
14:30of 25 years ago.
14:32So I think we still need a bit of time and the bar to go public has gone higher.
14:36So we just need a bit of time for these great companies, European companies, to reach a
14:40scale so that they can go public.
14:42But we have seen with companies like Adyen, for example, I mean, they went great European
14:47company, went public, you know, in Amsterdam.
14:52You look, you know, 10 years ago, you look at Showroom Privé.
14:55It was a great French company.
14:57They went public on the French.
14:57But that was a decade ago.
14:59Yeah, that was a decade ago.
15:01You were talking, sorry to interrupt, but the health sector.
15:03Yeah.
15:04Obviously, you're an investor in Doctolib, which is this platform where you can obviously
15:10put your health data and take some appointments.
15:17When is the IPO of Doctolib, for example?
15:20Well, I wish I knew.
15:21But clearly, I think the IPO at some point will be a path for the company.
15:26I think we don't have any specific timeline at this point.
15:30I think what's very interesting right now with Doctolib is that with everything happening
15:34in AI, I mean, they are infusing all their product with AI.
15:38And there is like such a big roadmap of investment that they have to make in the next few years.
15:44And there's such a big potential to transform health that, you know, there is no rush for
15:49the company to go public.
15:50Like, I think the potential here is really immense and with, you know, with a real impact
15:55on the well-being of, I mean, tens of millions of people, right?
16:00I mean, they are in France, they're in Germany, they're in Italy.
16:03It's a good part of Europe.
16:06And, yeah, I mean, it's going to be very exciting.
16:08Not in the U.S. yet, because perhaps the health system in the U.S.
16:11Well, the health system in the U.S. is very different.
16:14And I think Doctolib has really been focusing on the European market.
16:19I mean, who knows?
16:20At some point, maybe they're going to look at the U.S., but I think right now their focus
16:23has been really on Europe.
16:25And there is such a depth in the market there that I think they have a long runway.
16:31Philippe, Bruno, Philippe was just talking about AI and how AI is obviously changing these
16:36software and technologies.
16:39Obviously, in France, we have Mistral, who's perhaps a big challenger to open AI in the U.S.
16:47As part of Choose France, NVIDIA, who's speaking here today, and Mistral announced this big AI data center near Paris.
16:56Do you think Mistral is actually a real challenger to open AI?
17:02Are they going to be real winners of AI in Europe, given OpenAI is also investing billions in another data
17:09center in Texas?
17:11Well, I'm obviously supporting Mistral, right?
17:15French company, I'm not going to leave my flag home, right?
17:21But what we have to learn about AI, and I'm happy that Mistral is leading the wave.
17:26And as I said, we need to be backing this kind of company in Europe.
17:31Now, having said this, I'm too old in the digital world not to remember the Visicalc of the world,
17:39the Yahoo of the world, and many, many others that were, at one point in time, like the leading pack.
17:47The tech is in a 24-7 race.
17:53And the worst I can wish for any of those guys is to stop thinking and innovating.
18:00So I believe that even though I have great expectation, and as I said before, those companies now have to
18:07think long-term,
18:09because AI is just beginning.
18:11We're just starting this kind of new world, including even in the stock market itself.
18:17The way we will trade stock tomorrow will be different.
18:20That's why I call it like the quantic financing, because the complexity of trading tomorrow is probably going to be
18:29very, very helped by this AI structure.
18:33Remember when the first computer came on board, the trading became kind of robotic sometimes,
18:38where the trader was just hoping to be just faster with a faster microprocessor.
18:43Now it's going to be even the next level, where the complexity of AI is going to have new strategies
18:51in finance, even though.
18:52So back to your questions, I think that in Europe, and in France especially, we've set up what we call
19:01the AI clusters,
19:02nine of them in France, where we are going to educate 10,000 people a year in high-end AI
19:11education.
19:12No doubt that from this pool, we'll see many, many other minstrels.
19:18I hope so.
19:19And as I said before, when you think about AI, you have two ways.
19:23You have the AI specialists, the people who are going just to be really working on the LLMs and the
19:30models and the algorithms.
19:32And you need to have all the people using AI to increase their margin, increase their competitivity.
19:38And that's why we need to manage those two camps when we integrate AI in our reflection for the tech
19:46future.
19:47Lynn, how do you think AI is kind of writing the rules of public markets and the way perhaps we
19:52see traditional blue chips and disruptors?
19:57Yeah, I mean, AI is something that we've been using from a variety of perspectives for a decade.
20:05So it's not a new innovation, but the pace of evolution, the pace of evolution of the technology is like
20:14nothing we've ever seen before.
20:16If I look at the impact of AI on our platforms, it provides us the opportunity to surveil the immense
20:26amount of data that comes into our platform every day.
20:29Just to put it in some numerical context, around COVID, a very volatile period, we had about 350 billion incoming
20:38order messages.
20:39During this last bout of volatility we had in April, we had 1.2 trillion incoming order messages on a
20:49single day.
20:50You can't surveil that for nefarious behavior for people who are doing things they shouldn't be doing in your markets
20:59without the use of a good technology, particularly AI.
21:04If you take AI and point it at any good, pure data set, big, voluminous data set, you're going to
21:12have tremendous levels of efficiency that result.
21:19Philippe, obviously you're an investor in all these AI startups.
21:23How do you assess today? It's very difficult to assess the future of all these AI companies.
21:29How do you assess the fact that this one has a future, this one is going to be successful, this
21:36one is going to grow bigger?
21:37How do you assess the success of a future AI startup?
21:41Well, I think what's interesting with AI right now is that the way it is impacting the enterprise has been
21:49through applications, leveraging the models.
21:53But if you look at the areas that have been the most affected right now, I mean, you're obviously coding.
21:59And you have great companies like Cursor who are totally redefining the way code is being written.
22:07And then you have other companies like TESL who are giving, you know, one step further saying, well, if Cursor,
22:13if for engineers, TESL say, well, anybody can develop code with specs.
22:19So they're turning code into specs.
22:22So that's one area where we're seeing, obviously, a lot of innovation.
22:25You have, obviously, customer service with companies like Decagon.
22:29You have media with companies like Synthesia.
22:31So one of the areas we're looking at is, like, what are basically the function where AI can have an
22:38immediate impact and what are the applications that are built on top of these models?
22:42Because a lot of the value, I mean, as we're seeing right now, a lot of these models are getting
22:46commoditized.
22:47A lot of it is open source.
22:49So it's about what is the application layer that you're building on top and how defensible that is and what
22:56is kind of the category that you're redefining.
22:59And I think the next step, which is what we're looking at right now at, you know, the early stage,
23:04is that how is it going to move from, like, application to actually impacting and redefining tasks and processes and
23:15processes and automate tasks and processes in the enterprise?
23:17And I think this is where I think we're seeing a lot of pilot in the enterprise.
23:22We're not seeing yet massive adoption, but that's the next wave that's going to come very soon.
23:27And that's where, you know, companies like H are really trying to push the limit to what computers can do
23:33on their own to basically automate these tasks and processes.
23:37We don't have much time left, but I want to quickly get your thoughts on how is AI going to
23:42replace our jobs?
23:43Obviously, we were talking about talent earlier.
23:46Is there a world tomorrow where we are all unemployed because of AI, but we still get paid and enjoy
23:54the leisure, the free time that we have?
23:57No, you know, I think that the wonder of all those techs is that they will give no excuses to
24:05human beings not to take care of each other.
24:08So that's pretty much what I feel like if tech can just give us a break of daily things just
24:14to take care of people, that could be cool.
24:17That would be my vision for an ultimate tech society.
24:22What do you think, Lynn?
24:24I think that AI is not going to replace humans.
24:29It's going to enable humans to be much more efficient, like every other industrial revolution that has occurred.
24:38I think humans will be obviously very conversant around using AI, but I don't think there's a substitute for human
24:47judgment.
24:48No substitute for human judgment.
24:51I guess we'll leave it there on this little note of optimism.
24:55So thank you for being the living proof that you can talk about AI, geopolitics, and finance, and not be
25:02depressed.
25:03We'll leave on this optimistic tone and enjoy the rest of VivaTech.
25:07Thank you.
25:07Thank you.
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