Patent ownership for AI models heavily concentrated in Mainland China, says Clarivate analyst
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Yahoo
20 minutes ago
- Yahoo
Unity CEO breaks down Q2 beat & video game industry
Unity (U) stock falls despite beating second quarter expectations, as guidance came in slightly below forecasts. Unity CEO and president Matt Bromberg joins Asking for a Trend to break down the results but share how the company's new artificial intelligence (AI) ad platform is fueling ad growth. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend. Matt, great to see you on the show. Let let's start with that earnings report, Matt, because you all did report. I did see the stock finish lower today by about uh 6%. I saw analysts at City, uh Matt cited saying the results beat expectations, but they did say the outlook slightly below consensus on a midpoint basis. But but I'm interested to get your thoughts on the report, Matt. Walk us through the results. What what are you seeing in the business? Yeah, I will thank you for having me. It won't surprise you to hear from me that where the stock moves on any given day is not not much of a concern. I think when with the benefit of time, what folks will do when they look back at the second quarter of 2025, is they'll understand that this was really the inflection point for the unit's turnaround. When investments in fundamental investments in in product development and velocity and relationships with our customers really started to show uh financial performance on our top line. Uh and that's mostly what this quarter was about. We we handily beat both on the top and bottom in Q2 and also guided Q3 really aggressively for renewed growth in our advertising business. So in general, we're feeling really terrific. Matt, in terms of those creation tools that you're offering folks, how much do those tools uh cost, Matt? And how much pricing leverage do you have? Could you could you charge more? Yeah, the the vast majority of the of the folks who use Unity pay nothing because we uh invest very much in the support of our broader community so that people can learn to use Unity, so that they can create freely, uh and they can invest their time and creative energies with us. At the high end, large corporate customers who are operating significant businesses with Unity, um do pay uh substantial sums for unity. And um I so we think we've we've priced the of offering fairly. Um, we did have a price increase um earlier this year and uh it seems to be being tolerated and embraced uh really well by customers. So we think we're in a pretty good place. Um, that's and that's sort of how we feel about it. In terms of the you have this new AI powered ad platform, Matt, called Vector. Can you walk us through that product, what it means for your business and the customers and and how you think it it compares and contrasts with what what what uh the competition offers? Yeah, a year ago when we when we began here at Unity, we were fundamentally uncompetitive in the advertising space. And we immediately realized that we were going to have to invest significantly to build a new neural network uh driven engine to power our ad business forward. And so we set to work immediately and over the last 10 weeks since the launch of Unity vector, what we've seen is that those investments are really starting to pay off. Um the Unity ad network grew 15% in the second quarter, expected to grow um mid-single digits in next quarter. And really from a standing start, we've been delivering uh significantly more value and more return to customers. And we think that there's multiple years of runway available for us in this space. Performance advertisers in our world who are buying installs for their uh for their games will spend effectively infinitely up to their return targets. So as we develop um uh better products, we deliver more return to those customers, they will spend more with us and we're feeling great about that over the long term. Matt, I talked to an analyst today who knows your company in the industry and he brought up a question, want to ping it off you. He said, you know, what what if and he was talking about the Apple Epic fight, right? which has dragged on for a long time, as you know, what if he said those developers that ended up they didn't have to pay Apple and it freed up a whole bunch of money. What could that mean for unity? Could that mean, for example, an uptick and ad spend? How do you answer that question? Listen, I think if you're in a business where overnight that business becomes, you know, more compete a more profitable, call it double digit and a double digit amount. Well, you're typically going to see is those game developers will invest a significant portion of that savings in growth. Uh and when they look to do that, they absolutely will come to us. Um and and and that's one of the most exciting things about um about the environment we find ourselves and the environment is so dynamic. Um and there's so much interest in uh in growth and investment and we feel really well positioned to take advantage of it. Broader question, Matt, you know, we got some data points recently which suggests maybe the economy is is showing some weakness here. If the economy were to wobble, Matt, if, you know, the consumer comes under some more pressure, what would that mean potentially for unity? I think by and large over time, the games uh video game business has proven to be pretty recession resistant. Um especially when you're talking about free to play mobile games and 70% of the top mobile games in the world are built on unity. That's a very, very nice price to value uh equation for consumers. free. So, you know, we feel like we're in a really good spot and you know, I'm hopeful that that won't happen to the economy, but uh, you know, we've been through cycles before and and we tend to weather them just fine. Uh you know, you've worked in the video game industry for for a while. I'm curious to get your just your general thoughts on the industry. You know, you got the new the new switch just came out, Grand Theft Auto, that that's on the way, that's on deck. How generally excited, how enthusiastic are you about the industry right now? What do you see ahead? I'm enormously optimistic about the future of our industry. I I know there's from time to time folks will say that growth is slowing and there have been some some games that haven't haven't released well, there've been some layoffs, but I see this as a period of creative destruction um and dynamism. To your point, I've been in this business for a while. I've seen some hardware cycles and right now we're at the end of a hardware cycle and that always tends to be a point of a little bit slower growth. But as you've seen from the release of the switch 2, which is now the fastest growing uh game console in history, there's a lot of dynamism in this market. And when you make hit games, consumers will buy them. We'll have Grand Theft Auto, the Grand Theft Auto coming out. Um we're going to have innovation in the space, um and there will be some changes, but this space will grow and it'll grow durably for many years to come. Related Videos Opendoor's Q2 beat isn't enough: Here's what's holding them back Applovin, DraftKings, E.l.f. Beauty: After-hours trending stocks Fed's Mary Daly says it's time to cut rates Lyft stock tumbles on Q2 earnings miss Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Washington Post
44 minutes ago
- Washington Post
Nvidia, under pressure from U.S. and China, says its chips have no ‘back doors'
Nvidia declared its highly sought-after AI chips don't have 'back doors' or 'kill switches' and that it opposes such remote control options, in an effort to insulate itself from the intensifying technological rivalry between the United States and China. 'There is no such thing as a 'good' secret backdoor,' Nvidia Chief Security Officer David Reber Jr. wrote on Tuesday, adding that 'until recently' the idea of building in such vulnerabilities on purpose was 'beyond question.'
Bloomberg
44 minutes ago
- Bloomberg
Salesforce Deal 'A Recipe For Value': Informatica CEO
Amit Walia, CEO of Informatica, says the merging of two companies is all about context in 'the world of AI,' emphasizing that Informatica focuses on data management, the area where AI will be most successful. He speaks with Romaine Bostick and Vonnie Quinn on 'The Close,' saying that pairing with Salesforce becomes 'a recipe for huge value creation' for their customers. (Source: Bloomberg)
