1 00:00:02,520 --> 00:00:13,360 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 2 00:00:13,400 --> 00:00:17,200 Speaker 1: from coast to coast with Caroline Hide in New York 3 00:00:17,520 --> 00:00:20,680 Speaker 1: and Eva though in San Francisco. 4 00:00:21,960 --> 00:00:23,560 Speaker 2: This is Bloomberg Tech coming up. 5 00:00:23,640 --> 00:00:27,520 Speaker 3: Tesla's profits plunged despite record vehicle sales and a must 6 00:00:27,600 --> 00:00:31,440 Speaker 3: hijack moment on his proposed trillion dollar pay package, Plus. 7 00:00:31,240 --> 00:00:34,280 Speaker 4: The White House says it is weighing broad software restrictions 8 00:00:34,280 --> 00:00:37,239 Speaker 4: against China as it pushes for tech self reliance. 9 00:00:37,760 --> 00:00:40,839 Speaker 3: And we sit down with t Mobiles incoming CEO Shriny 10 00:00:40,840 --> 00:00:43,879 Speaker 3: Gopalan about the company's third quarter results. 11 00:00:44,120 --> 00:00:47,120 Speaker 4: So first we check in on these markets, which despite 12 00:00:47,120 --> 00:00:51,160 Speaker 4: the geopolitical tensions, despite concern about some numbers not hitting 13 00:00:51,159 --> 00:00:53,000 Speaker 4: the mark in the earnings underneath the bench, but we're 14 00:00:53,000 --> 00:00:55,240 Speaker 4: still up six ten percent on the NASAQ one hundred ED. 15 00:00:55,480 --> 00:00:58,040 Speaker 4: That feels like there's a risk on sentiment more broadly, 16 00:00:58,280 --> 00:01:00,000 Speaker 4: and that says we eye all prices on the hig 17 00:01:00,200 --> 00:01:02,040 Speaker 4: side inflationary concerns, but we. 18 00:01:02,120 --> 00:01:03,680 Speaker 5: Shake it off when it comes to the NASDAK. We're 19 00:01:03,680 --> 00:01:04,800 Speaker 5: looking underneath to herd. 20 00:01:05,400 --> 00:01:09,479 Speaker 3: Yep, let's go to Tesla down three percent, but not 21 00:01:09,520 --> 00:01:11,960 Speaker 3: as down as much as it was when the stock opened. 22 00:01:12,280 --> 00:01:15,959 Speaker 3: The story from earnings was really simple, record vehicle sales 23 00:01:15,959 --> 00:01:20,560 Speaker 3: and deliveries, but profits plunged higher cost Tesla talked about tariffs, 24 00:01:20,720 --> 00:01:23,240 Speaker 3: talked about the impact of policy and how it had 25 00:01:23,280 --> 00:01:27,080 Speaker 3: expanded its products to react to that. But then right 26 00:01:27,160 --> 00:01:29,680 Speaker 3: at the end of the earning school the story became 27 00:01:29,720 --> 00:01:32,679 Speaker 3: about Elon Musk and his proposed pay package. 28 00:01:32,800 --> 00:01:33,320 Speaker 2: Listen to this. 29 00:01:34,480 --> 00:01:36,440 Speaker 6: The point is, I just like that the needs to 30 00:01:36,480 --> 00:01:38,480 Speaker 6: be enough boarding control to give a strong influence, but 31 00:01:38,560 --> 00:01:40,920 Speaker 6: not not so much that I can't be fair if 32 00:01:40,959 --> 00:01:42,160 Speaker 6: I go insane. 33 00:01:42,760 --> 00:01:46,000 Speaker 4: Elon mus there, ending his final moments on the conference call, 34 00:01:46,080 --> 00:01:48,800 Speaker 4: making the case to shareholders for his one trillion dollar 35 00:01:48,880 --> 00:01:49,640 Speaker 4: pay package. 36 00:01:49,880 --> 00:01:51,960 Speaker 5: Let's get more on all of the Tesla numbers. 37 00:01:52,120 --> 00:01:54,600 Speaker 4: Ita mckeenny is with us, senior analyst of autos and 38 00:01:54,600 --> 00:01:56,960 Speaker 4: auto Paths at td Karen, and you're joining us go 39 00:01:57,120 --> 00:01:59,040 Speaker 4: buy rating on the company five on a nine dollars 40 00:01:59,040 --> 00:02:00,960 Speaker 4: price target, which is about twenty percent higher than where 41 00:02:00,960 --> 00:02:05,080 Speaker 4: we currently trade. Going straight to the numbers perspective before 42 00:02:05,360 --> 00:02:06,640 Speaker 4: perhaps a pay package. 43 00:02:06,840 --> 00:02:08,120 Speaker 5: Was there anything to shout about? 44 00:02:09,360 --> 00:02:11,400 Speaker 7: So the quarter overall, thank you again for having me, 45 00:02:12,280 --> 00:02:14,800 Speaker 7: was fairly in line with our preview thoughts that the 46 00:02:14,800 --> 00:02:18,160 Speaker 7: setup was fairly balanced for the stock going in. As 47 00:02:18,160 --> 00:02:20,360 Speaker 7: you know, the stock had kind of rallied into the quarter, 48 00:02:21,120 --> 00:02:23,200 Speaker 7: estimates had gone up a little bit since the record 49 00:02:23,440 --> 00:02:26,360 Speaker 7: kind of deliveries and then and the upside there, and 50 00:02:26,400 --> 00:02:27,840 Speaker 7: so we did think that the balance that the setup 51 00:02:27,919 --> 00:02:31,280 Speaker 7: was fairly balanced. Going in the numbers themselves, we were 52 00:02:31,280 --> 00:02:35,560 Speaker 7: fairly mixed, but overall in line on an operating basis 53 00:02:36,000 --> 00:02:39,079 Speaker 7: that the numbers were about seven percent above street expectations 54 00:02:39,120 --> 00:02:42,160 Speaker 7: when you exclude the restructuring item that came out a 55 00:02:42,320 --> 00:02:44,560 Speaker 7: bit of a surprise. There were some below the line 56 00:02:44,600 --> 00:02:46,959 Speaker 7: items such as a higher tax rate that caused EPs 57 00:02:47,000 --> 00:02:49,400 Speaker 7: to miss. Free cash flow was actually very strong. So 58 00:02:49,440 --> 00:02:51,840 Speaker 7: over some put and takes in the numbers, but fairly 59 00:02:52,720 --> 00:02:55,920 Speaker 7: in line, maybe even a bit better operationally versus consensus, 60 00:02:56,080 --> 00:02:57,920 Speaker 7: including on a better gross margin overall. 61 00:02:58,240 --> 00:03:01,200 Speaker 4: Okay, so that gross margin and actually the cash that's 62 00:03:01,200 --> 00:03:04,400 Speaker 4: still coming into the business, is that enough to really 63 00:03:04,480 --> 00:03:07,280 Speaker 4: drive forward on basically the now focus of Elon Musk 64 00:03:07,320 --> 00:03:09,720 Speaker 4: and Tesla more broadly, which is AI, which is robotics, 65 00:03:09,720 --> 00:03:10,639 Speaker 4: which is autonomous. 66 00:03:11,960 --> 00:03:14,760 Speaker 7: Yes, to your point, the gross margin actually beat nicely 67 00:03:14,800 --> 00:03:17,640 Speaker 7: in the quarter eighteen percent verse consensus at seventeen point 68 00:03:17,639 --> 00:03:21,240 Speaker 7: three percent. Oppex was actually higher, including for SGNA, So 69 00:03:21,240 --> 00:03:25,280 Speaker 7: you're seeing the company making still substantial investments in future growth, 70 00:03:25,280 --> 00:03:28,720 Speaker 7: including of course AI. But the free cash flow very strong. 71 00:03:28,760 --> 00:03:31,760 Speaker 7: Catpex came in a bit below expectations. At the balance 72 00:03:31,840 --> 00:03:35,360 Speaker 7: sheet is very strong with with over forty billion dollars 73 00:03:35,520 --> 00:03:38,920 Speaker 7: of cash and low thirties of net cash after dead 74 00:03:39,400 --> 00:03:41,000 Speaker 7: so the balunary is in great shape. You are seeing 75 00:03:41,000 --> 00:03:43,080 Speaker 7: the company can team to make an investment. Go to 76 00:03:43,120 --> 00:03:45,200 Speaker 7: see the gross margin beat as well. 77 00:03:45,360 --> 00:03:49,240 Speaker 3: We're trying to tie must comments about the compensation package 78 00:03:49,600 --> 00:03:52,240 Speaker 3: to the earnings that were posted. And the way that 79 00:03:52,280 --> 00:03:54,600 Speaker 3: I look at it is that the boarders set him 80 00:03:54,640 --> 00:03:59,440 Speaker 3: over ten years, both operational and financial goals twenty million 81 00:03:59,560 --> 00:04:02,640 Speaker 3: vehicles over ten years. That means he needs to average 82 00:04:02,680 --> 00:04:06,000 Speaker 3: five hundred thousand a quarter. They've set him ebit our 83 00:04:06,080 --> 00:04:09,080 Speaker 3: goals and in the earning statement and on the call, 84 00:04:09,200 --> 00:04:13,240 Speaker 3: they tried to explain with a broader portfolio of models 85 00:04:13,440 --> 00:04:16,880 Speaker 3: and more affordable models how they will achieve that. 86 00:04:17,320 --> 00:04:19,120 Speaker 2: Did they answer those questions? 87 00:04:20,600 --> 00:04:23,599 Speaker 7: Yes? I think when we looked at the CEO compensation 88 00:04:23,760 --> 00:04:26,560 Speaker 7: proposal when it came out, we were actually very encouraged, 89 00:04:26,560 --> 00:04:28,720 Speaker 7: and a lot of analysts have views over what Tesla 90 00:04:28,760 --> 00:04:31,240 Speaker 7: should do, where they should be investing, and what the 91 00:04:31,240 --> 00:04:34,560 Speaker 7: future will hold. We've been very bullish on autonomy, not 92 00:04:34,600 --> 00:04:37,240 Speaker 7: only for the Robotaxi vertical, but also for what we 93 00:04:37,279 --> 00:04:40,880 Speaker 7: call the consumer av vertical, the FSD vertical, and we 94 00:04:40,960 --> 00:04:43,240 Speaker 7: thought the product goals, the four of them kind of 95 00:04:43,279 --> 00:04:46,640 Speaker 7: laid out in the compensation proposal, were very aligned with 96 00:04:46,680 --> 00:04:49,360 Speaker 7: our kind of long term thesis of where Tesla should 97 00:04:49,360 --> 00:04:52,640 Speaker 7: be investing, what they should do, particularly around the FSD 98 00:04:52,800 --> 00:04:55,320 Speaker 7: part of it, given how disruptive that could be, but 99 00:04:55,400 --> 00:04:57,240 Speaker 7: that the company's comments last night on the call were 100 00:04:57,240 --> 00:04:59,760 Speaker 7: supportive of that, including kind of making the point that 101 00:05:00,120 --> 00:05:04,039 Speaker 7: as the launched use incremental FSD features that could accrue 102 00:05:04,080 --> 00:05:06,800 Speaker 7: very nicely to ev demand to kind of address that 103 00:05:06,920 --> 00:05:09,839 Speaker 7: issue as well. So those girls seemed very aligned with 104 00:05:09,880 --> 00:05:12,320 Speaker 7: our thesis. That actually turned us more bullish on the 105 00:05:12,320 --> 00:05:15,119 Speaker 7: star kind of long term, but we read those proposals. 106 00:05:15,800 --> 00:05:16,240 Speaker 2: It's either. 107 00:05:16,240 --> 00:05:19,359 Speaker 3: This morning, the New York State Controller joined us on 108 00:05:19,360 --> 00:05:22,440 Speaker 3: Bloomberg Surveillance. Listen to his take on why they voted 109 00:05:22,520 --> 00:05:24,200 Speaker 3: no on the compackage. 110 00:05:24,960 --> 00:05:28,760 Speaker 8: When you see the excessive compensation package. I mean, you know, 111 00:05:29,360 --> 00:05:31,960 Speaker 8: credit to mister Musk, He's already one of the richest 112 00:05:32,200 --> 00:05:35,640 Speaker 8: men in the world. How much more rich does one 113 00:05:35,680 --> 00:05:36,479 Speaker 8: person have to be? 114 00:05:38,279 --> 00:05:41,760 Speaker 3: But for Elon Musk, it wasn't about money or how rich. 115 00:05:41,920 --> 00:05:45,359 Speaker 3: It was about voting control, the argument that he needs 116 00:05:45,400 --> 00:05:48,919 Speaker 3: a certain level of control for Tesla to realize the 117 00:05:49,000 --> 00:05:52,960 Speaker 3: vision of humanoid robotics and more broadly, AI, where do 118 00:05:53,000 --> 00:05:53,760 Speaker 3: you stand on that? 119 00:05:55,040 --> 00:05:58,400 Speaker 7: Sure? Yeah, absolutely, Elon kind of made that point very clear. 120 00:05:58,520 --> 00:06:01,640 Speaker 7: You know, ultimately the proposals you know, are tied to 121 00:06:01,680 --> 00:06:06,039 Speaker 7: market cap targets as well. They are to your point, ambitious. 122 00:06:06,040 --> 00:06:09,920 Speaker 7: They will require very very strong execution. But once they're delivered, 123 00:06:09,920 --> 00:06:12,760 Speaker 7: if they're delivered, there's a substantial amount of upside to 124 00:06:12,839 --> 00:06:16,560 Speaker 7: EP a longer term as we see it. And and 125 00:06:16,640 --> 00:06:19,400 Speaker 7: you know, we give Tesla a very significant competitive positioning 126 00:06:19,440 --> 00:06:22,240 Speaker 7: as well. So given the amount of execution, UH the 127 00:06:22,360 --> 00:06:24,440 Speaker 7: needs to take there, I told you kind of understand 128 00:06:24,600 --> 00:06:28,360 Speaker 7: UH management and the point around this, and again, those 129 00:06:28,400 --> 00:06:31,040 Speaker 7: goals very well alignment where we think Tesla should focus 130 00:06:31,080 --> 00:06:34,039 Speaker 7: on over the next five plus years. And and so 131 00:06:34,200 --> 00:06:36,640 Speaker 7: you know, we felt pretty good about you know, the 132 00:06:36,720 --> 00:06:40,240 Speaker 7: overall game plan for where to invest where to focus on, 133 00:06:40,600 --> 00:06:43,440 Speaker 7: and we felt those goals for us were positive in 134 00:06:43,480 --> 00:06:45,240 Speaker 7: the scheme of where we see the company going. 135 00:06:46,400 --> 00:06:49,080 Speaker 3: It's I'm mcayley of TD Karen, thank you very much. 136 00:06:49,120 --> 00:06:51,920 Speaker 3: Now coming up, the White House says it's weighing more 137 00:06:52,000 --> 00:06:56,279 Speaker 3: export limits against China, this time targeting critical software. 138 00:06:56,680 --> 00:06:59,760 Speaker 2: We have more in that story. Next, this is Bloomberg Tech. 139 00:07:13,360 --> 00:07:16,360 Speaker 3: Let's get over to the Evident AI symposium taking place 140 00:07:16,440 --> 00:07:18,880 Speaker 3: right now in New York and bring it together hundreds 141 00:07:19,080 --> 00:07:22,920 Speaker 3: of banking executives and innovators to discuss AI adoption in 142 00:07:23,000 --> 00:07:28,080 Speaker 3: financial services. Goldman Sachs cio Marco Orgenti speaking with Bloomberg's 143 00:07:28,160 --> 00:07:29,360 Speaker 3: jeen Eric Shaska. 144 00:07:30,000 --> 00:07:32,480 Speaker 9: How do you take people through this journey? And so 145 00:07:32,560 --> 00:07:36,360 Speaker 9: the human fact or the human element are more important 146 00:07:36,400 --> 00:07:39,120 Speaker 9: than ever today. I say that technology is even what 147 00:07:39,280 --> 00:07:44,000 Speaker 9: technology or what AI can do, is ahead of what 148 00:07:44,160 --> 00:07:46,720 Speaker 9: people accept that they can do with it. 149 00:07:47,160 --> 00:07:47,840 Speaker 2: So there is a. 150 00:07:47,760 --> 00:07:50,920 Speaker 9: Gap there, there's a cultural gap, friction. Think there is friction, 151 00:07:51,040 --> 00:07:56,400 Speaker 9: but it's also like sometimes fear right. And this period 152 00:07:56,440 --> 00:07:59,640 Speaker 9: of transformation creates for the first time, creates almost like 153 00:07:59,640 --> 00:08:03,520 Speaker 9: a competitor to the human species which we never had before, 154 00:08:04,000 --> 00:08:07,000 Speaker 9: which could be in some cases smarter than us. And 155 00:08:07,360 --> 00:08:11,080 Speaker 9: the way people face that pret is very different, and 156 00:08:11,120 --> 00:08:13,480 Speaker 9: some people adopted and embrace it, and some people are 157 00:08:13,480 --> 00:08:16,520 Speaker 9: just resisting it. But back to the importance of the 158 00:08:16,520 --> 00:08:21,400 Speaker 9: first topic that I talked about, why is data so important? 159 00:08:21,480 --> 00:08:23,800 Speaker 9: Sometimes when a lot of you know, we talk with 160 00:08:24,040 --> 00:08:27,360 Speaker 9: other people in the business and other CIOs, etc. Or 161 00:08:27,480 --> 00:08:31,000 Speaker 9: people are asking me what's the best advice, And today 162 00:08:31,040 --> 00:08:32,920 Speaker 9: the best advice is really make sure that you have 163 00:08:32,960 --> 00:08:38,080 Speaker 9: a great data quality story in your firm, because that 164 00:08:38,320 --> 00:08:41,839 Speaker 9: will be the single most important determinant of the. 165 00:08:41,840 --> 00:08:45,520 Speaker 4: Government sachs Ceio there Marco Argenti talking about their own. 166 00:08:45,760 --> 00:08:47,360 Speaker 5: Eric Shatska catch. 167 00:08:47,120 --> 00:08:50,719 Speaker 4: The full conversation going on at the symposium on live go. 168 00:08:51,520 --> 00:08:53,679 Speaker 4: But now we switch gears to what the White House 169 00:08:53,720 --> 00:08:57,319 Speaker 4: is saying. Well, perhaps it's weighing new export limits on China, 170 00:08:57,320 --> 00:09:00,480 Speaker 4: but this time targeting critical software that can send ripples 171 00:09:00,480 --> 00:09:03,240 Speaker 4: through the tech sector. From Vaccinia tech editor Mike shev 172 00:09:03,240 --> 00:09:05,439 Speaker 4: It joins us Now and more. And it's trying to 173 00:09:05,520 --> 00:09:08,760 Speaker 4: understand how far reaching such limitations would be. 174 00:09:08,840 --> 00:09:12,160 Speaker 10: Mike, Well, it's a great question, Karen. We still don't 175 00:09:12,200 --> 00:09:14,600 Speaker 10: know the answer about how far the scope of this 176 00:09:14,720 --> 00:09:18,720 Speaker 10: will go. But the Treasury Secretary said yesterday that everything 177 00:09:18,840 --> 00:09:21,800 Speaker 10: is on the table. And really this is another instance 178 00:09:21,960 --> 00:09:25,080 Speaker 10: of the US or China trying to escalate ahead of 179 00:09:25,080 --> 00:09:27,680 Speaker 10: a key round of negotiations, and we have one coming 180 00:09:27,760 --> 00:09:30,480 Speaker 10: up this weekend where the two sides will try to 181 00:09:30,480 --> 00:09:33,160 Speaker 10: hash out their differences. What the US is hoping to 182 00:09:33,200 --> 00:09:35,760 Speaker 10: get from China this time around as a relaxation of 183 00:09:35,800 --> 00:09:39,320 Speaker 10: some new export controls on rare earths at Beijing just 184 00:09:39,400 --> 00:09:42,160 Speaker 10: imposed much to the chagrin of the US and many 185 00:09:42,240 --> 00:09:45,679 Speaker 10: of its allies, and Treasury Secretary Beston not only says 186 00:09:45,720 --> 00:09:47,920 Speaker 10: that everything is on the table, but he's also saying 187 00:09:47,960 --> 00:09:51,079 Speaker 10: that the US may act in concert with its allies. 188 00:09:51,240 --> 00:09:53,120 Speaker 10: And some of the areas that could be targeted are 189 00:09:53,480 --> 00:09:58,720 Speaker 10: critical software, including chip software used to design chips, but 190 00:09:58,800 --> 00:10:02,360 Speaker 10: it also could be brought Reuters reported yesterday that they 191 00:10:02,400 --> 00:10:06,360 Speaker 10: may go as far as looking at anything made with 192 00:10:06,600 --> 00:10:09,600 Speaker 10: US origin software and trying to restrict that. And that 193 00:10:09,679 --> 00:10:12,480 Speaker 10: is a measure that the US took against Russia back 194 00:10:12,520 --> 00:10:16,200 Speaker 10: in twenty twenty two following Russia's invasion of Ukraine. 195 00:10:16,480 --> 00:10:20,760 Speaker 3: Mike overnight a communicate from the Communist Party's Central Committee 196 00:10:20,800 --> 00:10:23,960 Speaker 3: in China the country who aimed to quote greatly increase 197 00:10:24,000 --> 00:10:27,200 Speaker 3: the capacity for self reliance in the domains of science 198 00:10:27,200 --> 00:10:28,959 Speaker 3: and technology timing. 199 00:10:29,200 --> 00:10:31,640 Speaker 2: What do we need to know well ed? 200 00:10:32,080 --> 00:10:35,280 Speaker 10: This is clearly a challenge for the US because one 201 00:10:35,280 --> 00:10:37,679 Speaker 10: thing we have heard from the Trump administration is an 202 00:10:37,800 --> 00:10:41,719 Speaker 10: articulated desire to try to sell back into the Chinese 203 00:10:41,760 --> 00:10:44,679 Speaker 10: market some of the American tech stack and the idea 204 00:10:44,800 --> 00:10:47,120 Speaker 10: this is one that we have heard from White House 205 00:10:47,120 --> 00:10:50,280 Speaker 10: AI advisor David Sachs and others that if we can 206 00:10:50,360 --> 00:10:54,160 Speaker 10: sell into China, we can compete with China in other 207 00:10:54,360 --> 00:10:57,559 Speaker 10: markets globally. So this is something where we see China 208 00:10:57,640 --> 00:11:00,880 Speaker 10: is perhaps pushing away from the US tech SEC and 209 00:11:00,920 --> 00:11:03,320 Speaker 10: trying to go on its own. We also have some 210 00:11:03,360 --> 00:11:06,160 Speaker 10: great reporting from our colleagues in Asia and Africa that 211 00:11:06,360 --> 00:11:09,280 Speaker 10: is an example of how important this is. We see 212 00:11:09,280 --> 00:11:13,640 Speaker 10: how Deepseek is making inroads in Africa in today's Big Take. 213 00:11:13,760 --> 00:11:16,280 Speaker 10: It's worth reading on the terminal and elsewhere if you 214 00:11:16,400 --> 00:11:18,520 Speaker 10: haven't seen it, but it shows just how China is 215 00:11:18,520 --> 00:11:23,600 Speaker 10: building this model at home of lower cost AI, both 216 00:11:23,640 --> 00:11:26,920 Speaker 10: the hardware and the software, and then offering it in 217 00:11:27,000 --> 00:11:30,040 Speaker 10: markets where the US is hoping to compete, but perhaps 218 00:11:30,240 --> 00:11:32,800 Speaker 10: being beaten to the punch by Chinese innovators. 219 00:11:34,400 --> 00:11:37,640 Speaker 3: Bloomberg's Mike Shephard out of DC, thank you very much. 220 00:11:37,679 --> 00:11:40,920 Speaker 3: We have breaking news crossing the Bloomberg terminal, reporting from 221 00:11:40,960 --> 00:11:45,840 Speaker 3: the Wall Street Journal. President Trump pardoned Binance founder Changpeng 222 00:11:45,920 --> 00:11:50,319 Speaker 3: Jau on Wednesday. The markets are reacting vik at xbi 223 00:11:50,440 --> 00:11:54,559 Speaker 3: usd Binance coin. It is spiked as those headlines cross 224 00:11:54,559 --> 00:11:56,559 Speaker 3: the Bloomberg terminal, the team in New York getting it 225 00:11:56,640 --> 00:11:59,839 Speaker 3: up on the screen. The Wall Street Journal citing sauce 226 00:11:59,880 --> 00:12:02,640 Speaker 3: it is on the pardon of jaw by the President. 227 00:12:02,760 --> 00:12:05,880 Speaker 3: Bloomberg's not match the reporting. We'll showing you the market reaction. 228 00:12:06,160 --> 00:12:08,040 Speaker 3: We'll look into it, and when we have more we'll 229 00:12:08,040 --> 00:12:10,360 Speaker 3: bring it to you. Let's get back to Bloomberg Tech. 230 00:12:10,920 --> 00:12:14,880 Speaker 3: Natalie Galla Princevill economists and director at Board, an aipower 231 00:12:14,920 --> 00:12:19,560 Speaker 3: and enterprise planning platform. Natalie, you provide macroeconomic analysis and 232 00:12:19,640 --> 00:12:24,760 Speaker 3: strategic guidance on business investment and economic policy to global companies. 233 00:12:24,760 --> 00:12:28,720 Speaker 3: You just heard shep going through the software component on 234 00:12:28,800 --> 00:12:31,840 Speaker 3: trade back and forth, and then China realizing that it 235 00:12:31,840 --> 00:12:34,240 Speaker 3: has to look at itself in some domains where it 236 00:12:34,240 --> 00:12:37,720 Speaker 3: relies on the United States as you track trade right now, 237 00:12:37,840 --> 00:12:41,199 Speaker 3: I'd like you to answer, does software actually play any role. 238 00:12:41,000 --> 00:12:42,240 Speaker 2: In any of this negotiation? 239 00:12:42,800 --> 00:12:43,000 Speaker 5: Yeah? 240 00:12:43,040 --> 00:12:45,400 Speaker 11: You know, I think it plays a really significant role 241 00:12:45,400 --> 00:12:48,240 Speaker 11: on this negotiation right because as we talk about AI 242 00:12:48,320 --> 00:12:51,520 Speaker 11: and the importance of really being a leader in this space, 243 00:12:51,640 --> 00:12:55,080 Speaker 11: we know that the US right now outspends China on 244 00:12:55,120 --> 00:12:57,160 Speaker 11: a ratio about five to one. But of course there's 245 00:12:57,280 --> 00:13:02,040 Speaker 11: a lot of accusations around distillation, and when we zone 246 00:13:02,080 --> 00:13:04,400 Speaker 11: out from an economists point of view, it becomes a 247 00:13:04,400 --> 00:13:07,440 Speaker 11: lot less about what's the marginal cost to China to 248 00:13:08,080 --> 00:13:11,280 Speaker 11: produce a model and more about are we doing what 249 00:13:11,320 --> 00:13:14,520 Speaker 11: we can to protect US innovation? And it's really key 250 00:13:14,520 --> 00:13:17,000 Speaker 11: that we get this right because this is an industry 251 00:13:17,080 --> 00:13:21,360 Speaker 11: that's estimated to translate into trillions of dollars in global 252 00:13:21,440 --> 00:13:23,040 Speaker 11: GDP over the next decade. 253 00:13:23,520 --> 00:13:25,960 Speaker 4: So when we think about the actual US names that 254 00:13:26,000 --> 00:13:29,400 Speaker 4: get caught up in this analysappoint to Cadence Design Systems, 255 00:13:29,400 --> 00:13:32,520 Speaker 4: DESCO Systems, Synopsis, as well as being companies that might 256 00:13:32,559 --> 00:13:35,480 Speaker 4: be limited in their ability to export to China. But 257 00:13:35,520 --> 00:13:39,160 Speaker 4: more broadly, what is the biggest element that US can 258 00:13:39,200 --> 00:13:41,720 Speaker 4: bring to bear? It still seems to be semiconductor, it 259 00:13:41,760 --> 00:13:44,320 Speaker 4: still seems to be the IP when it comes to 260 00:13:44,440 --> 00:13:45,640 Speaker 4: GPU and compute. 261 00:13:46,679 --> 00:13:49,280 Speaker 11: Yeah, I would absolutely agree with that. You know, our 262 00:13:49,360 --> 00:13:52,040 Speaker 11: power is really an intellectual property. We've shown a lot 263 00:13:52,080 --> 00:13:55,160 Speaker 11: of resiliency there, a lot of leadership there. That's our 264 00:13:55,200 --> 00:13:57,280 Speaker 11: key metric for as we move forward, what we bring 265 00:13:57,320 --> 00:13:57,839 Speaker 11: to the table. 266 00:13:57,920 --> 00:14:01,280 Speaker 5: Absolutely have to sort of continue. 267 00:14:01,000 --> 00:14:03,240 Speaker 11: To lean into that and really have these conversations around 268 00:14:03,280 --> 00:14:05,720 Speaker 11: policy to continue to lead in that space. 269 00:14:07,000 --> 00:14:12,240 Speaker 3: Right now, are you seeing any data, primary data or 270 00:14:12,280 --> 00:14:17,240 Speaker 3: secondary data from any economy around the world that tariffs 271 00:14:17,720 --> 00:14:22,120 Speaker 3: in the technology context or export controls are damaging any 272 00:14:22,200 --> 00:14:24,600 Speaker 3: industries that we're talking about here. 273 00:14:25,040 --> 00:14:28,160 Speaker 11: So it's actually been really incredible. Tech has shown an 274 00:14:28,400 --> 00:14:32,280 Speaker 11: amazing resiliency. Our global economy has shown an amazing resiliency 275 00:14:32,320 --> 00:14:35,240 Speaker 11: when we talk about the effect of tariffs right and 276 00:14:35,480 --> 00:14:37,360 Speaker 11: where we would anticipate to see it when we talk 277 00:14:37,400 --> 00:14:40,600 Speaker 11: about especially these relations with China, we would anticipate it 278 00:14:40,640 --> 00:14:45,000 Speaker 11: to see in consumer electronics. Now, the story of twenty 279 00:14:45,040 --> 00:14:47,040 Speaker 11: twenty five so far, and I wouldn't just say this 280 00:14:47,120 --> 00:14:49,880 Speaker 11: for the US book, globally has really been this idea 281 00:14:49,960 --> 00:14:53,560 Speaker 11: of delayed pass through effects. Now, as we get into 282 00:14:53,600 --> 00:14:55,920 Speaker 11: the later half of twenty twenty five into twenty twenty six. 283 00:14:56,440 --> 00:15:00,080 Speaker 11: Very likely that it's going to not continue in that 284 00:15:00,120 --> 00:15:04,480 Speaker 11: we expect inflation to be persistent, really moderately accelerate as 285 00:15:04,480 --> 00:15:06,120 Speaker 11: we go into twenty twenty six, So there will. 286 00:15:05,960 --> 00:15:08,200 Speaker 3: Be an en We're talking about the environment, and some 287 00:15:08,240 --> 00:15:12,200 Speaker 3: of it is about headwinds and risk, But actually, when 288 00:15:12,240 --> 00:15:14,760 Speaker 3: I think about where your research is at, you're looking 289 00:15:14,800 --> 00:15:18,600 Speaker 3: at M and A, you're looking at investment flows, deals 290 00:15:18,600 --> 00:15:20,760 Speaker 3: are getting done at least of the infrastructure wise in 291 00:15:20,800 --> 00:15:22,800 Speaker 3: this country. That's all quite positive. 292 00:15:23,200 --> 00:15:24,280 Speaker 2: Yes, absolutely. 293 00:15:24,360 --> 00:15:27,080 Speaker 11: I mean, in many ways the tech sector has acted 294 00:15:27,160 --> 00:15:30,960 Speaker 11: as a macroeconomic stabilizer for greater economic growth, and it's 295 00:15:30,960 --> 00:15:32,480 Speaker 11: been fascinating to see. 296 00:15:33,120 --> 00:15:37,800 Speaker 4: What's also been fascinating is how we discern where we 297 00:15:37,840 --> 00:15:40,880 Speaker 4: protect talent or not. Look, there's been a lot of 298 00:15:40,880 --> 00:15:42,920 Speaker 4: focus on H one B visas and been a lot 299 00:15:42,960 --> 00:15:47,360 Speaker 4: of focus on trying to make the US more self 300 00:15:47,360 --> 00:15:50,800 Speaker 4: sufficient with its own people, But should we be looking 301 00:15:50,800 --> 00:15:53,400 Speaker 4: more broadly at who the AI talent is in some 302 00:15:53,440 --> 00:15:55,320 Speaker 4: of these big tech companies and where they're coming from 303 00:15:55,320 --> 00:16:01,440 Speaker 4: from a national security and in decent economic perspective, athlete. 304 00:16:00,080 --> 00:16:01,920 Speaker 5: I mean, it is such a fair question right. 305 00:16:01,920 --> 00:16:04,960 Speaker 11: When we take a step back, we see that overall 306 00:16:05,040 --> 00:16:07,880 Speaker 11: the labor market has softened meaningfully. But when we talk 307 00:16:07,920 --> 00:16:12,560 Speaker 11: about the specific talent around AI and machine learning, we 308 00:16:12,640 --> 00:16:15,600 Speaker 11: see a lot of labor market titness, meaning there is 309 00:16:15,640 --> 00:16:17,920 Speaker 11: so much demand. So as we talk about H one 310 00:16:17,960 --> 00:16:20,920 Speaker 11: B visas and the overall impact, it's very likely that 311 00:16:21,080 --> 00:16:25,040 Speaker 11: the demand is absolutely there for AI investment to necessitate 312 00:16:25,680 --> 00:16:27,080 Speaker 11: global talent in this space. 313 00:16:28,240 --> 00:16:30,800 Speaker 4: Natalie, it's been great having some time with the Natalie Gallia, 314 00:16:30,920 --> 00:16:33,920 Speaker 4: principal and economist at Board, appreciated. 315 00:16:39,040 --> 00:16:39,600 Speaker 5: New Mobile. 316 00:16:39,800 --> 00:16:42,560 Speaker 4: It added one million post paid mobile customers, it raised 317 00:16:42,600 --> 00:16:44,640 Speaker 4: its outlook for the year, and the boost is coming 318 00:16:44,640 --> 00:16:46,440 Speaker 4: at a time when we're seeing the deal that was 319 00:16:46,480 --> 00:16:48,360 Speaker 4: done with the US Cellular, the launch of the new 320 00:16:48,360 --> 00:16:51,640 Speaker 4: iPhone seventeen. But interestingly, the market's kind of digesting this 321 00:16:51,680 --> 00:16:54,200 Speaker 4: with perhaps looking a little bit at the revenue expectations, 322 00:16:54,320 --> 00:16:56,720 Speaker 4: potentially missing there a little bit, and it's locked in 323 00:16:56,760 --> 00:16:59,120 Speaker 4: a fist battle of course competition at and T Verizon. 324 00:16:59,440 --> 00:17:01,200 Speaker 4: Who better to speak about all of this as Team 325 00:17:01,200 --> 00:17:04,560 Speaker 4: Obile's chief operating officer, but he's the incoming CEO training 326 00:17:04,600 --> 00:17:06,240 Speaker 4: up plan and I know this is a special day 327 00:17:06,280 --> 00:17:08,040 Speaker 4: with really being there for the first set of earnings 328 00:17:08,040 --> 00:17:11,480 Speaker 4: as the incoming CEO. But the market is kind of 329 00:17:11,480 --> 00:17:14,040 Speaker 4: trying to find the flies in the ointment here. Why 330 00:17:14,080 --> 00:17:17,040 Speaker 4: why do you think that million subscriber to postpaid wasn't enough. 331 00:17:17,680 --> 00:17:20,080 Speaker 12: Look, I don't spend my time trying to predict market 332 00:17:20,160 --> 00:17:22,679 Speaker 12: trading on a day to day basis. My focus is 333 00:17:22,680 --> 00:17:26,320 Speaker 12: on building a solid, robust business, which is what we've got, 334 00:17:26,560 --> 00:17:30,280 Speaker 12: and a business where we're constantly expanding and widening our differentiation. 335 00:17:30,760 --> 00:17:32,800 Speaker 12: That's the core of what we're focusing on. Because when 336 00:17:32,840 --> 00:17:35,280 Speaker 12: you look at this quartters results, you know, T Mobile 337 00:17:35,280 --> 00:17:38,120 Speaker 12: has been the growth leader for thirteen years, and yet 338 00:17:38,119 --> 00:17:43,359 Speaker 12: this quatter we added our highest number of new customers ever. 339 00:17:44,119 --> 00:17:48,120 Speaker 12: And it's not just volume growth that translated into value growth. 340 00:17:48,160 --> 00:17:51,840 Speaker 12: I'm not sure where you got the missing revenue expectations from, 341 00:17:51,920 --> 00:17:56,600 Speaker 12: because we exceeded consensus on service revenue and we delivered 342 00:17:56,840 --> 00:18:00,119 Speaker 12: nine percent service revenue growth along with six percent and 343 00:18:00,160 --> 00:18:02,800 Speaker 12: deep a DA growth, and all of that translates into 344 00:18:02,840 --> 00:18:06,960 Speaker 12: that all important metric cash twenty six percent cash conversion, 345 00:18:07,119 --> 00:18:09,320 Speaker 12: which is the highest in the industry. So we're feeling 346 00:18:09,680 --> 00:18:12,240 Speaker 12: really really good about where the business is. 347 00:18:12,480 --> 00:18:13,560 Speaker 5: Just to go into the nuances. 348 00:18:13,600 --> 00:18:15,920 Speaker 4: For example, service revenue eighteen point twenty four billion, it 349 00:18:16,000 --> 00:18:18,280 Speaker 4: was up nine percent, but the estimate according to Bloomberg 350 00:18:18,320 --> 00:18:21,520 Speaker 4: andsensus was for a little bit less than that eighteen 351 00:18:21,520 --> 00:18:24,400 Speaker 4: point one six. Yes, but the revenue of twenty one 352 00:18:24,400 --> 00:18:26,520 Speaker 4: point ninety six was perhaps slightly shy at the. 353 00:18:26,440 --> 00:18:27,400 Speaker 5: Twenty one point nine to eight. 354 00:18:27,680 --> 00:18:30,240 Speaker 4: As I'm saying, this is flies in the ointment perspective here, 355 00:18:30,280 --> 00:18:32,359 Speaker 4: but I think the average revenue we use perhaps is 356 00:18:32,400 --> 00:18:33,920 Speaker 4: one to look at how it's being pulled down a 357 00:18:33,960 --> 00:18:36,639 Speaker 4: little bit. Because you are in this phase competition, and 358 00:18:36,680 --> 00:18:39,320 Speaker 4: I'm interested as to how much to get over all 359 00:18:39,359 --> 00:18:42,040 Speaker 4: these new subscribers, you are having to go toe to 360 00:18:42,040 --> 00:18:43,880 Speaker 4: toe with some of the more incentives out there. 361 00:18:44,560 --> 00:18:46,880 Speaker 12: So let me pass that question into three bits, right, 362 00:18:47,040 --> 00:18:49,680 Speaker 12: getting new customers. Now, if you look at our cost 363 00:18:49,720 --> 00:18:52,800 Speaker 12: of acquisition of new customers and all of that flows 364 00:18:52,840 --> 00:18:55,560 Speaker 12: through to the bottom line, we added a million post 365 00:18:55,640 --> 00:18:59,040 Speaker 12: paid phone customers and still delivered six percent earnings growth. 366 00:18:59,280 --> 00:19:01,080 Speaker 12: That's because of a lot of the new customers are 367 00:19:01,119 --> 00:19:04,199 Speaker 12: coming to us because there's only one place where you 368 00:19:04,240 --> 00:19:08,240 Speaker 12: can get best network, best value, and best experience in 369 00:19:08,280 --> 00:19:10,760 Speaker 12: that's Team Mobile. So while we talk about you know 370 00:19:10,840 --> 00:19:13,880 Speaker 12: cost of new customers and the rest. When you have differentiation, 371 00:19:14,480 --> 00:19:18,119 Speaker 12: you can drive earnings growth as well as bringing in 372 00:19:18,200 --> 00:19:22,040 Speaker 12: new customers. From a competition perspective, look, this industry has 373 00:19:22,119 --> 00:19:25,240 Speaker 12: always been competitive, and let's just pull back out of 374 00:19:25,240 --> 00:19:27,479 Speaker 12: the detail of promotions in the rest you look at 375 00:19:27,480 --> 00:19:30,359 Speaker 12: it on an industry level. The industry SEA has seen 376 00:19:30,359 --> 00:19:33,560 Speaker 12: a fifty percent growth in free cash flow in the 377 00:19:33,640 --> 00:19:37,800 Speaker 12: last three years, right at the same point as delivering 378 00:19:38,160 --> 00:19:41,520 Speaker 12: more value to customers and your last piece of average 379 00:19:41,520 --> 00:19:44,520 Speaker 12: revenue per user. Our POO actually went up by one 380 00:19:44,520 --> 00:19:47,159 Speaker 12: point eight percent this year. In our guide. We have 381 00:19:47,240 --> 00:19:50,000 Speaker 12: an in built two percent guidance increase on our pooh, 382 00:19:50,200 --> 00:19:53,440 Speaker 12: which was higher than our earlier guide. And so from 383 00:19:53,480 --> 00:19:56,680 Speaker 12: our perspective, you know, some other players have a different problem, 384 00:19:57,040 --> 00:19:59,960 Speaker 12: which is some of the incumbents have their existing customers 385 00:20:00,040 --> 00:20:02,480 Speaker 12: being a high price, so when they try and attract 386 00:20:02,560 --> 00:20:06,160 Speaker 12: new customers, what lands up happening is dilution of our 387 00:20:06,440 --> 00:20:10,080 Speaker 12: We don't have that problem. We've historically been the value 388 00:20:10,160 --> 00:20:10,600 Speaker 12: leader in. 389 00:20:10,560 --> 00:20:16,600 Speaker 3: This Hatriny five ten cycles. Yes, are great for attracting switches. 390 00:20:17,280 --> 00:20:18,760 Speaker 3: You and I have talked about that a lot at 391 00:20:18,800 --> 00:20:23,240 Speaker 3: Apple Park, but the companies those incumbents and you don't 392 00:20:23,280 --> 00:20:27,159 Speaker 3: make any money on those handsets, is it fair to 393 00:20:27,200 --> 00:20:33,040 Speaker 3: say you're sacrificing revenues for higher customer numbers in the 394 00:20:33,119 --> 00:20:35,520 Speaker 3: event of a new product cycle light we're having in 395 00:20:35,560 --> 00:20:36,240 Speaker 3: the iPhone. 396 00:20:36,400 --> 00:20:38,920 Speaker 12: So two parts to that, one I agree with and 397 00:20:39,040 --> 00:20:43,479 Speaker 12: one I debate. I just reject the starting point that 398 00:20:44,200 --> 00:20:48,080 Speaker 12: we don't make money when we do new iPhones. Our 399 00:20:48,119 --> 00:20:50,840 Speaker 12: customer lifetime value, which is the way we think about 400 00:20:50,880 --> 00:20:53,879 Speaker 12: the profitability of a customer over the lifetime, are really 401 00:20:53,920 --> 00:20:56,320 Speaker 12: really strong. Look, if we didn't make money when we 402 00:20:56,359 --> 00:21:00,280 Speaker 12: attracted customers, we couldn't deliver a million new pots spaid 403 00:21:00,359 --> 00:21:04,320 Speaker 12: customers and still grow our EBERDA at six percent and 404 00:21:04,359 --> 00:21:07,600 Speaker 12: still deliver twenty six percent cash conversion. So the premise 405 00:21:07,680 --> 00:21:10,840 Speaker 12: of that question, in my mind, is just false. On 406 00:21:10,880 --> 00:21:13,119 Speaker 12: the other hand, I think you have an excellent point 407 00:21:13,200 --> 00:21:16,720 Speaker 12: on the Switchers piece. Look, every time there's a new device, 408 00:21:17,119 --> 00:21:21,560 Speaker 12: customers reassess the trade offs they've made historically and they 409 00:21:21,600 --> 00:21:24,119 Speaker 12: look for what's the best place for the new iPhone? 410 00:21:24,320 --> 00:21:26,879 Speaker 12: And T Mobile is conclusively the best place for the 411 00:21:26,880 --> 00:21:29,480 Speaker 12: new iPhone. Just to give you some stats which give 412 00:21:29,520 --> 00:21:32,520 Speaker 12: you a sense of that, right on the new iPhone 413 00:21:32,960 --> 00:21:36,080 Speaker 12: on the T Mobile network, you get ninety percent higher 414 00:21:36,119 --> 00:21:39,640 Speaker 12: speeds than one of our competitors and forty percent than 415 00:21:39,680 --> 00:21:42,560 Speaker 12: the other. Right, So this is a great switching moment. 416 00:21:42,880 --> 00:21:46,200 Speaker 12: It's a switching moment when our differentiation has widened, and 417 00:21:46,280 --> 00:21:50,320 Speaker 12: that's why you've seen this outsized and profitable growth. 418 00:21:51,760 --> 00:21:55,359 Speaker 3: Schwinigo Palin T Mobile currently the COO, soon to be 419 00:21:55,440 --> 00:21:56,080 Speaker 3: the CEO. 420 00:21:56,640 --> 00:22:04,480 Speaker 5: Thank you very much, Welcome back to Blueberg Tech. 421 00:22:04,560 --> 00:22:06,320 Speaker 4: Let's take a look at these markets because on the 422 00:22:06,400 --> 00:22:08,040 Speaker 4: last at one hundred, we're shrugging off some of the 423 00:22:08,080 --> 00:22:10,000 Speaker 4: anxiety that you see in the bond market and indeed 424 00:22:10,119 --> 00:22:12,960 Speaker 4: in the oil market, worries about inflatory pressure coming from oil. 425 00:22:13,040 --> 00:22:15,360 Speaker 4: Instead we look at what's perhaps happening underneath the hood 426 00:22:15,400 --> 00:22:17,439 Speaker 4: in terms of earnings and some semiconductors on a roll 427 00:22:17,520 --> 00:22:19,560 Speaker 4: today we're up six tens of percent, but I shine 428 00:22:19,600 --> 00:22:21,520 Speaker 4: a light on some areas. 429 00:22:20,920 --> 00:22:22,119 Speaker 5: That are not doing so well. 430 00:22:22,480 --> 00:22:26,000 Speaker 4: There's this surprise pre announcement coming from super Micro. Now, 431 00:22:26,000 --> 00:22:28,439 Speaker 4: this has been a company well loved in the AI 432 00:22:28,560 --> 00:22:30,520 Speaker 4: trade as they designed some of the servers that are 433 00:22:30,520 --> 00:22:32,439 Speaker 4: going into a lot of these data centers. 434 00:22:32,440 --> 00:22:33,560 Speaker 5: But actually they're. 435 00:22:33,440 --> 00:22:35,720 Speaker 4: Saying that the upgrades aren't going to be happening really 436 00:22:35,720 --> 00:22:38,320 Speaker 4: into their fiscal second quarter. Five billion is what they're 437 00:22:38,359 --> 00:22:40,520 Speaker 4: directing us to in terms of sales, and it's well 438 00:22:40,520 --> 00:22:42,080 Speaker 4: below expectations. 439 00:22:41,480 --> 00:22:42,440 Speaker 5: Of six and a half billion. 440 00:22:42,720 --> 00:22:45,320 Speaker 4: Get more detail later in November when they come out 441 00:22:45,320 --> 00:22:47,840 Speaker 4: with their true earnings date. We're looking at Tesla also 442 00:22:47,920 --> 00:22:50,159 Speaker 4: by one point seent percent, bouncing off of its lows, 443 00:22:50,480 --> 00:22:53,240 Speaker 4: but we see also earnings per share the sacrifice there. 444 00:22:53,359 --> 00:22:56,080 Speaker 4: We're seeing profitability down some thirty percent, even though we 445 00:22:56,119 --> 00:22:59,720 Speaker 4: see all record volumes of deliveries in their quarter. We 446 00:22:59,760 --> 00:23:03,480 Speaker 4: see operating expenses just shooting higher, and we want to 447 00:23:03,480 --> 00:23:06,959 Speaker 4: get into all of that with our auto Zar Cragredell. 448 00:23:07,000 --> 00:23:08,000 Speaker 5: He's joining us now. 449 00:23:08,240 --> 00:23:11,080 Speaker 4: And really this was an earnings where the fundamentals were 450 00:23:11,119 --> 00:23:13,680 Speaker 4: almost ignored on the conference call by the executives. It 451 00:23:13,760 --> 00:23:16,800 Speaker 4: was much more about once again AI robotics in the future. 452 00:23:18,320 --> 00:23:20,960 Speaker 6: Yeah, that's right, And you know, I think we've sort 453 00:23:20,960 --> 00:23:24,280 Speaker 6: of grown accustomed to that right where it doesn't necessarily 454 00:23:24,320 --> 00:23:27,399 Speaker 6: matter what the numbers are. Oftentimes what Musk has to 455 00:23:27,440 --> 00:23:31,560 Speaker 6: say matters more. But I think in this case, you know, 456 00:23:31,640 --> 00:23:35,639 Speaker 6: absolutely there was some expectation that you know, after you know, 457 00:23:35,720 --> 00:23:37,760 Speaker 6: vehicle sales were so much better than a lot of 458 00:23:37,760 --> 00:23:41,399 Speaker 6: people anticipated. You know, I think that that maybe contributed 459 00:23:41,440 --> 00:23:46,600 Speaker 6: to some recovery in you know, consensus for these earnings 460 00:23:47,119 --> 00:23:50,280 Speaker 6: results that we got last night. And yet a lot 461 00:23:50,320 --> 00:23:52,439 Speaker 6: of the you know, a lot of this sort of 462 00:23:52,800 --> 00:23:56,840 Speaker 6: pass through from that strong top line was maybe a 463 00:23:56,920 --> 00:23:59,760 Speaker 6: bit on the disappointing side, and there didn't seem to 464 00:23:59,800 --> 00:24:02,320 Speaker 6: be enough oomph to what must had to say to 465 00:24:02,359 --> 00:24:04,760 Speaker 6: sort of, you know, do much for the stock here. 466 00:24:05,560 --> 00:24:08,600 Speaker 3: You know, you must talk largely about AI and the 467 00:24:08,640 --> 00:24:11,680 Speaker 3: promise of AI in the future. But the CFO and 468 00:24:11,720 --> 00:24:15,880 Speaker 3: in the earning stick gave us more about tariff impact, 469 00:24:15,920 --> 00:24:20,320 Speaker 3: to costs, the environment with policy capex plans in the 470 00:24:20,359 --> 00:24:22,800 Speaker 3: teench Q which you caught this morning. I think as well, 471 00:24:23,359 --> 00:24:26,280 Speaker 3: what were the other things that the market could go on. 472 00:24:27,960 --> 00:24:31,320 Speaker 6: Yeah, you know, I think the four hundred million tariff 473 00:24:31,359 --> 00:24:34,800 Speaker 6: impact just in the quarter was noteworthy. It was hard 474 00:24:34,880 --> 00:24:37,600 Speaker 6: to tell from the call last night, you know, to 475 00:24:37,600 --> 00:24:40,959 Speaker 6: what extent they were alluding just to that, you know, 476 00:24:41,000 --> 00:24:44,439 Speaker 6: being the number and the impact for the energy business 477 00:24:44,520 --> 00:24:47,960 Speaker 6: or if it was energy and autos, because there was 478 00:24:47,960 --> 00:24:51,240 Speaker 6: some possibility there that they were referring to multiple sort 479 00:24:51,280 --> 00:24:53,959 Speaker 6: of you know, parts of the energy business. But in 480 00:24:54,000 --> 00:24:56,359 Speaker 6: any case, we've known that that was going to be 481 00:24:57,119 --> 00:25:00,919 Speaker 6: a problem for Tesla because they do procure battery cells 482 00:25:01,080 --> 00:25:03,800 Speaker 6: from China for that side of the business. I think 483 00:25:03,840 --> 00:25:06,080 Speaker 6: another thing that was very interesting to me was just 484 00:25:06,640 --> 00:25:10,600 Speaker 6: you know, we expected to be a drop there to 485 00:25:10,640 --> 00:25:14,480 Speaker 6: be a drop off in regulatory credit revenue, but already 486 00:25:14,480 --> 00:25:17,600 Speaker 6: we're seeing, you know, a pretty substantial drop from a. 487 00:25:17,560 --> 00:25:19,440 Speaker 2: Year ago in that business. 488 00:25:19,480 --> 00:25:22,159 Speaker 6: And you know, you would think that there's more to 489 00:25:22,240 --> 00:25:25,040 Speaker 6: come in that regard now that we have not only 490 00:25:25,160 --> 00:25:27,800 Speaker 6: tax credits are going away, but also you know, fuel 491 00:25:27,800 --> 00:25:31,960 Speaker 6: economy and emissions regulations having been gutted by the Trump administration. 492 00:25:33,040 --> 00:25:36,960 Speaker 3: Blue Bess crazy Dale, thank you very much. Tesla argued, 493 00:25:37,160 --> 00:25:41,080 Speaker 3: it's expanded its products offering, and it emphasized its most 494 00:25:41,119 --> 00:25:43,960 Speaker 3: affordable models. Yet but many investors just aren't buying it. 495 00:25:44,320 --> 00:25:48,760 Speaker 3: Let's get the engineers take. He was called the teardown Titan, 496 00:25:48,920 --> 00:25:53,600 Speaker 3: decades of experience tearing cars apart and telling auto makers 497 00:25:53,640 --> 00:25:57,840 Speaker 3: how well or how badly they're built. Now retired Sandy 498 00:25:57,920 --> 00:26:02,520 Speaker 3: Munro was once a big Tesla scale, criticizing early model threes, 499 00:26:02,880 --> 00:26:05,440 Speaker 3: but he changed his tune as the company improved its 500 00:26:05,480 --> 00:26:08,760 Speaker 3: cars and offered more models at times. A Tesla shareholder 501 00:26:08,960 --> 00:26:12,960 Speaker 3: and part of the Tesla and Elon Musk fan community online, 502 00:26:13,000 --> 00:26:15,800 Speaker 3: he has been watching closely delighted to say, Sandy Munro 503 00:26:16,000 --> 00:26:18,919 Speaker 3: joins us. Now, Sandy, we wanted you to come on 504 00:26:18,960 --> 00:26:22,520 Speaker 3: the program because we thought there'd be more emphasis on 505 00:26:22,600 --> 00:26:27,159 Speaker 3: this new generation of standard model Y model three. And 506 00:26:27,200 --> 00:26:29,880 Speaker 3: the question I get most for you is what did 507 00:26:29,920 --> 00:26:32,639 Speaker 3: they actually engineer out in terms of the cost. 508 00:26:35,320 --> 00:26:39,160 Speaker 13: Well, at the end of the day, they did quite 509 00:26:39,200 --> 00:26:43,359 Speaker 13: a few things that dropt the price, or let me 510 00:26:43,480 --> 00:26:45,639 Speaker 13: rephrase that the cast are getting the job done. 511 00:26:46,320 --> 00:26:47,080 Speaker 2: At number one. 512 00:26:47,240 --> 00:26:53,920 Speaker 13: They moved back away in some cases from the giant 513 00:26:53,960 --> 00:26:57,879 Speaker 13: cast things. The gigacast things are a great way to 514 00:26:57,920 --> 00:27:00,400 Speaker 13: get rid of componentry and one eye bo okay, Aasionally 515 00:27:00,440 --> 00:27:02,919 Speaker 13: what you do is you wind up in a situation 516 00:27:03,119 --> 00:27:07,800 Speaker 13: where your peace costs are a little exorbitant. So they've 517 00:27:07,800 --> 00:27:11,920 Speaker 13: moved a little bit sideways on it. They still have product, 518 00:27:12,320 --> 00:27:14,360 Speaker 13: some of their product there, but some of it has 519 00:27:14,359 --> 00:27:18,040 Speaker 13: moved away. As far as the what I saw, as 520 00:27:18,040 --> 00:27:22,479 Speaker 13: far as the reduction any amount of costs associated with 521 00:27:22,520 --> 00:27:25,960 Speaker 13: the product, those are all kind of things that you 522 00:27:26,240 --> 00:27:33,520 Speaker 13: do after you've launched a program. So the amount of things, 523 00:27:33,560 --> 00:27:36,560 Speaker 13: if you'd like that that will reduce the amount of 524 00:27:36,600 --> 00:27:42,680 Speaker 13: costs are kind of right now insignificant. But they lay 525 00:27:42,680 --> 00:27:45,840 Speaker 13: a plan for the future. So if you start looking 526 00:27:45,880 --> 00:27:50,679 Speaker 13: at some of the things that they've experimented on with 527 00:27:50,800 --> 00:27:55,680 Speaker 13: the cyber truck and whatnot, where they've gone to steerby 528 00:27:55,760 --> 00:28:00,399 Speaker 13: wire ethernet controls, I mean, that's the stuff you need 529 00:28:01,400 --> 00:28:06,040 Speaker 13: to drop the problems associated with latency. Latency being the 530 00:28:06,080 --> 00:28:10,320 Speaker 13: amount of time you need to control a car in 531 00:28:10,400 --> 00:28:10,879 Speaker 13: a crash. 532 00:28:11,560 --> 00:28:14,280 Speaker 4: Yeah, So will they the right sacrifice is Sandy? Are 533 00:28:14,359 --> 00:28:18,200 Speaker 4: you feeling that they're making the right decisions to get 534 00:28:18,240 --> 00:28:19,760 Speaker 4: to the right price point at the moment? 535 00:28:21,280 --> 00:28:21,760 Speaker 2: Yeah. 536 00:28:21,800 --> 00:28:28,280 Speaker 13: Absolutely. Everything i've seen I like. I'm well, not everything, 537 00:28:28,320 --> 00:28:30,000 Speaker 13: but most everything i've seen I like. 538 00:28:30,080 --> 00:28:30,600 Speaker 12: What you like? 539 00:28:32,640 --> 00:28:33,359 Speaker 2: What do I like? 540 00:28:33,760 --> 00:28:35,560 Speaker 5: Don't you, Sandy? What don't you like? 541 00:28:36,640 --> 00:28:40,840 Speaker 13: What don't I like? The things I don't like are 542 00:28:43,240 --> 00:28:48,680 Speaker 13: kind of like, I don't understand why the heaven brought 543 00:28:48,760 --> 00:28:53,080 Speaker 13: the I'm calling it the model to the cyber taxi. 544 00:28:53,240 --> 00:28:56,040 Speaker 13: Why have they brought that out? I'm ready for that 545 00:28:56,120 --> 00:28:58,959 Speaker 13: right now. I don't need a steering wheel I've already 546 00:28:59,160 --> 00:29:03,080 Speaker 13: been in that via goal several times, and I think 547 00:29:03,120 --> 00:29:06,200 Speaker 13: it's the ideal opportunity to sell for people that are 548 00:29:06,200 --> 00:29:11,360 Speaker 13: my age. Now, I'm kind of agile, I'm not a cripple, 549 00:29:11,480 --> 00:29:16,960 Speaker 13: and I my my, My reflexes are pretty quick. Actually, 550 00:29:17,200 --> 00:29:19,680 Speaker 13: two days ago I caught a fly at the restaurant 551 00:29:19,720 --> 00:29:22,920 Speaker 13: and a shot the daylight out of the waiter. At 552 00:29:22,920 --> 00:29:23,320 Speaker 13: the end of the. 553 00:29:23,400 --> 00:29:26,280 Speaker 2: Day that that. 554 00:29:28,120 --> 00:29:31,920 Speaker 13: Product should have been should have been out in the marketplace, 555 00:29:32,000 --> 00:29:36,040 Speaker 13: like right now, we need it for the baby boomers boomers. 556 00:29:36,240 --> 00:29:38,120 Speaker 2: So that's the thing I don't like. Sandy. 557 00:29:38,360 --> 00:29:41,520 Speaker 3: I don't know if you remain a Tesla shareholder or not, 558 00:29:42,560 --> 00:29:45,920 Speaker 3: but right now you know the company, thank you for clarifying, 559 00:29:46,080 --> 00:29:47,800 Speaker 3: has a lot on its plate. One of the pieces 560 00:29:47,800 --> 00:29:50,440 Speaker 3: of news was that they're building out the assembly line 561 00:29:50,480 --> 00:29:54,520 Speaker 3: for the humanoid robot. You have a deep analysis of 562 00:29:54,560 --> 00:29:58,320 Speaker 3: the things that Tesla does itself as a vertically integrated company. 563 00:29:58,960 --> 00:30:00,720 Speaker 3: Could you just give me your set of how you 564 00:30:00,760 --> 00:30:03,560 Speaker 3: think they'll be able to establish their own supply chains 565 00:30:03,840 --> 00:30:07,760 Speaker 3: and build such a product in line with also delivering 566 00:30:07,800 --> 00:30:10,120 Speaker 3: twenty million EBS over the next decade. 567 00:30:12,520 --> 00:30:15,760 Speaker 13: I let me attack that in a couple of different ways. 568 00:30:15,840 --> 00:30:19,920 Speaker 13: Number One, I believe when Elon said that this is 569 00:30:19,920 --> 00:30:24,880 Speaker 13: going to be the maybe the biggest product ever or something. 570 00:30:24,920 --> 00:30:28,960 Speaker 13: I can't remember exact words, he is absolutely correct. Again, 571 00:30:29,040 --> 00:30:33,560 Speaker 13: I go back to this aging population. It constant that 572 00:30:33,560 --> 00:30:37,720 Speaker 13: that robot should sell for somewhere around one hundred one 573 00:30:37,760 --> 00:30:41,920 Speaker 13: hundred and a quarter each. Okay, if I take a 574 00:30:41,960 --> 00:30:49,120 Speaker 13: look at nursing care, you're looking at each each nurse, 575 00:30:49,560 --> 00:30:51,800 Speaker 13: and you'll need three of them because for twenty four 576 00:30:51,840 --> 00:30:54,360 Speaker 13: hour kind of stuff, each nurse is going to be 577 00:30:54,360 --> 00:30:56,760 Speaker 13: getting about one hundred a quarter. I'd say maybe one 578 00:30:56,840 --> 00:31:01,120 Speaker 13: hundred a year with benefits maybe a little higher. Man, 579 00:31:01,200 --> 00:31:04,760 Speaker 13: this is the best return on investment ever. Not only 580 00:31:04,840 --> 00:31:08,200 Speaker 13: that Grandma won't have to worry about taking her pills. 581 00:31:08,640 --> 00:31:11,680 Speaker 13: Somebody won't have to try and pick grandpap and take 582 00:31:11,760 --> 00:31:15,320 Speaker 13: them to wherever he needs to go. I mean, this 583 00:31:15,520 --> 00:31:18,600 Speaker 13: is a huge opportunity. And I've been working on robots 584 00:31:18,600 --> 00:31:21,760 Speaker 13: since I was sixteen, so that's a long long time. 585 00:31:21,840 --> 00:31:22,280 Speaker 2: That's like. 586 00:31:24,520 --> 00:31:28,040 Speaker 13: Sixty years ago. This is this is a huge thing. 587 00:31:28,760 --> 00:31:31,440 Speaker 13: Wh I'm more up on that than I am the cars. 588 00:31:31,440 --> 00:31:34,640 Speaker 4: Sonny Monroe, the test A Tout and Titan. Maybe it'll 589 00:31:34,680 --> 00:31:37,640 Speaker 4: be a robotics Ted and Titan too. We appreciate your time, 590 00:31:37,720 --> 00:31:48,680 Speaker 4: thank you very much. Indeed, battery recycling startup Redwood Materials, 591 00:31:48,680 --> 00:31:50,800 Speaker 4: has just raised three hundred and fifty million dollars in 592 00:31:50,840 --> 00:31:53,520 Speaker 4: a Series E funding round, pushing its valuation past six 593 00:31:53,560 --> 00:31:54,960 Speaker 4: billion dollars according to sources. 594 00:31:55,200 --> 00:31:55,760 Speaker 5: I'm pleased to. 595 00:31:55,720 --> 00:31:59,440 Speaker 4: Say welcome him to the show. JB Stravel, Redwood material CEO. 596 00:31:59,520 --> 00:32:01,360 Speaker 4: Test of member and JB. 597 00:32:02,000 --> 00:32:04,400 Speaker 5: Why raise? What's the money going to be used for? 598 00:32:05,520 --> 00:32:08,960 Speaker 14: Well, thanks for having me, and the primary purpose for 599 00:32:09,040 --> 00:32:12,320 Speaker 14: this particular Series Z raise is actually to accelerate our 600 00:32:13,160 --> 00:32:16,360 Speaker 14: grid energy storage business. So many people think of us 601 00:32:16,400 --> 00:32:20,560 Speaker 14: as a battery recycler only, but on top of that platform, 602 00:32:20,680 --> 00:32:23,680 Speaker 14: you know, we've built a growing energy storage business that 603 00:32:24,880 --> 00:32:25,800 Speaker 14: is really quite exciting. 604 00:32:27,600 --> 00:32:28,000 Speaker 2: JB. 605 00:32:28,200 --> 00:32:31,320 Speaker 3: I'm recognizing that there's a there's a there's a pivot 606 00:32:31,320 --> 00:32:35,000 Speaker 3: here for Redwood, right, and the question that we get 607 00:32:35,040 --> 00:32:38,080 Speaker 3: a lot for you is what is the viability of 608 00:32:38,080 --> 00:32:42,120 Speaker 3: that legacy recycling business under the Trump administration and the 609 00:32:42,120 --> 00:32:45,960 Speaker 3: policy environment we're in. Could you explain that based on 610 00:32:46,000 --> 00:32:49,240 Speaker 3: the emphasis you're putting on this next gen energy demand 611 00:32:49,320 --> 00:32:50,240 Speaker 3: from data centers. 612 00:32:52,160 --> 00:32:54,800 Speaker 14: Yeah, well, I guess the first thing i'd highlight is, 613 00:32:54,840 --> 00:32:57,600 Speaker 14: you know, there are no federal incentives. There's no sort 614 00:32:57,600 --> 00:33:02,320 Speaker 14: of infrastructure for the federal government to support battery recycling. 615 00:33:02,760 --> 00:33:03,640 Speaker 2: There never has been. 616 00:33:04,400 --> 00:33:07,160 Speaker 14: So what we do and others do is is purely 617 00:33:07,240 --> 00:33:11,840 Speaker 14: driven by economics and being competitive today with mind materials, 618 00:33:12,520 --> 00:33:16,720 Speaker 14: and in this current Trump administration, actually, you know, we've 619 00:33:16,760 --> 00:33:21,120 Speaker 14: seen huge excitement around the critical materials nature of what 620 00:33:21,120 --> 00:33:24,680 Speaker 14: we're working on because you know, very directly we're a 621 00:33:24,880 --> 00:33:29,080 Speaker 14: quite substantial source of cobalt, nickel, and lithium and copper, 622 00:33:29,480 --> 00:33:32,840 Speaker 14: you know, all of which is domestically sourced. It's already here, 623 00:33:32,920 --> 00:33:35,800 Speaker 14: it's already secure. So from that point of view, I 624 00:33:36,080 --> 00:33:39,400 Speaker 14: actually am perhaps even more excited about the core recycling 625 00:33:39,440 --> 00:33:42,000 Speaker 14: business in this administration than I have been in the past. 626 00:33:42,240 --> 00:33:43,560 Speaker 2: Well, JB, just real quick. 627 00:33:43,560 --> 00:33:47,280 Speaker 3: I was of the understanding the IRA did provide for 628 00:33:47,360 --> 00:33:51,280 Speaker 3: incentives for recycling, am I Am I wrong about that? 629 00:33:52,600 --> 00:33:55,800 Speaker 14: No, that the IRA provides, you know, incentives for some 630 00:33:55,880 --> 00:33:59,760 Speaker 14: of the material manufacturing that sort of evolves further downstream 631 00:33:59,800 --> 00:34:03,440 Speaker 14: from recycling, so suber to make it. So that's the 632 00:34:03,440 --> 00:34:06,959 Speaker 14: more the manufacturing side, but in terms of collection, refining, 633 00:34:07,320 --> 00:34:11,040 Speaker 14: and selling those materials back there's no incentives, there's no 634 00:34:11,160 --> 00:34:13,280 Speaker 14: particular premiums for that material. 635 00:34:14,000 --> 00:34:17,000 Speaker 4: And boy, in this moment of electrification, in this moment 636 00:34:17,040 --> 00:34:19,160 Speaker 4: of need for compute and data centers, do we need 637 00:34:19,239 --> 00:34:19,640 Speaker 4: a lot of. 638 00:34:19,560 --> 00:34:21,720 Speaker 5: Those materials that you talk about. 639 00:34:22,040 --> 00:34:24,480 Speaker 4: And with rare earth metals being a concern too, I'm 640 00:34:24,480 --> 00:34:27,879 Speaker 4: interested in just who then gets strategically on the cap 641 00:34:27,920 --> 00:34:30,680 Speaker 4: table to drive that forward. JB Why and Video for example, 642 00:34:30,719 --> 00:34:33,200 Speaker 4: interesting that they're coming on well. 643 00:34:33,320 --> 00:34:37,160 Speaker 14: In Vidia's interest is clearly evolving from our energy storage business, 644 00:34:37,280 --> 00:34:41,200 Speaker 14: and what we're doing is taking old transportation battery packs, 645 00:34:41,280 --> 00:34:45,120 Speaker 14: refurbishing them and then redeploying them, extending their life in 646 00:34:45,160 --> 00:34:49,080 Speaker 14: a very low cost setting to provide these energy storage 647 00:34:49,080 --> 00:34:52,560 Speaker 14: services for data centers, for AI factories, and for the 648 00:34:52,640 --> 00:34:56,800 Speaker 14: expansion of industrial grid electrification. And this is one of 649 00:34:56,840 --> 00:35:00,839 Speaker 14: the cheapest ways to provide grid energy storage. It's far 650 00:35:00,920 --> 00:35:04,239 Speaker 14: cheaper than deploying brand new batteries, and it can be 651 00:35:04,320 --> 00:35:09,480 Speaker 14: a complementary strategy alongside of our materials recycling. So this 652 00:35:09,560 --> 00:35:12,160 Speaker 14: is really what's driven in Video's excitement. I think they 653 00:35:12,200 --> 00:35:17,160 Speaker 14: see that energy access and electricity availability is has become 654 00:35:17,400 --> 00:35:20,600 Speaker 14: a key strategic point for AI factory expansion. 655 00:35:21,760 --> 00:35:25,040 Speaker 4: Can we talk about the money therefore that you neque 656 00:35:25,040 --> 00:35:27,880 Speaker 4: coming and you graise this equity, but we're also depending 657 00:35:28,000 --> 00:35:31,000 Speaker 4: on money coming from a federal perspective, a two billion dollar. 658 00:35:30,920 --> 00:35:33,520 Speaker 5: Loan from the Department of Energy. How is that in status? 659 00:35:33,560 --> 00:35:35,719 Speaker 4: How are you seeing that navigation when it looks as 660 00:35:35,719 --> 00:35:38,520 Speaker 4: though the current administration wants well equity for every time 661 00:35:38,600 --> 00:35:40,080 Speaker 4: they're giving some sort of federal funding. 662 00:35:41,800 --> 00:35:45,200 Speaker 14: Well, everything we're doing is supported by private funding. You know, 663 00:35:45,239 --> 00:35:48,320 Speaker 14: that's something we're pretty proud of. And this round continues 664 00:35:48,360 --> 00:35:52,839 Speaker 14: that focus. You know, the government obviously has you know, 665 00:35:52,960 --> 00:35:56,280 Speaker 14: taken a different approach and looking at the DOE loan program, 666 00:35:56,320 --> 00:35:58,880 Speaker 14: and you know there's a huge amount of interest in 667 00:35:58,920 --> 00:36:01,439 Speaker 14: a lot of these projects. But you know, i'd say, 668 00:36:01,719 --> 00:36:03,880 Speaker 14: you know, from our point of view, we're focused on 669 00:36:03,960 --> 00:36:09,000 Speaker 14: critical materials and energy storage and looking at the applicability 670 00:36:09,000 --> 00:36:10,760 Speaker 14: of that for those interests. 671 00:36:12,360 --> 00:36:14,440 Speaker 2: JB. You are on Tesla's board. 672 00:36:14,640 --> 00:36:17,480 Speaker 3: You recuse yourself from the Special Committee on comp I 673 00:36:17,560 --> 00:36:22,040 Speaker 3: know that Elon's argument is he needs voting control of Tesla. 674 00:36:22,760 --> 00:36:24,560 Speaker 3: Explain that to me as if I were a five 675 00:36:24,640 --> 00:36:27,400 Speaker 3: year old. Please the basics of why the board's position 676 00:36:27,520 --> 00:36:29,480 Speaker 3: is that Elon should have voting control. 677 00:36:31,280 --> 00:36:35,040 Speaker 14: Well, I can't say too much more about Tesla matters today, 678 00:36:35,120 --> 00:36:37,880 Speaker 14: but you know, maybe it just comment that, you know, 679 00:36:37,920 --> 00:36:41,720 Speaker 14: the focus is really on you know, providing shareholder value 680 00:36:41,920 --> 00:36:45,520 Speaker 14: and that's really the sort of first and foremost direction 681 00:36:45,600 --> 00:36:47,960 Speaker 14: that we look at these things from. So I think 682 00:36:48,000 --> 00:36:50,760 Speaker 14: this proposal you know, really does that, and it provides 683 00:36:51,680 --> 00:36:54,719 Speaker 14: you know, potential incredible upside growth to the existing and 684 00:36:54,760 --> 00:36:55,640 Speaker 14: future shareholders. 685 00:36:56,560 --> 00:36:59,960 Speaker 3: And lastly, JB, you're aware of the Bloomberg reporting about 686 00:37:00,120 --> 00:37:03,920 Speaker 3: the manual release mechanism in Tesla car doors. From the 687 00:37:03,960 --> 00:37:07,520 Speaker 3: board's perspective, are you aware of any action Tesla's taking 688 00:37:07,960 --> 00:37:10,440 Speaker 3: to change the design of that mechanism or has it 689 00:37:10,480 --> 00:37:11,920 Speaker 3: been discussed at the board level? 690 00:37:13,719 --> 00:37:16,280 Speaker 14: Well, again, I can't go too deep on these topics, 691 00:37:16,440 --> 00:37:19,520 Speaker 14: especially you know, if there's any ongoing legal proceedings, but 692 00:37:19,680 --> 00:37:23,360 Speaker 14: you know, we take any safety matters incredibly seriously. You know, 693 00:37:23,400 --> 00:37:25,719 Speaker 14: this is this is you know, one of the most 694 00:37:25,760 --> 00:37:29,320 Speaker 14: important issues, and we're constantly watching that, We're constantly looking 695 00:37:29,320 --> 00:37:32,719 Speaker 14: at you know, new events and reports, and you know, 696 00:37:32,800 --> 00:37:36,439 Speaker 14: we'll stay closely aware of any actions going on there. 697 00:37:37,640 --> 00:37:40,800 Speaker 3: Redwood just raising three hundred and fifty million dollars untold 698 00:37:40,880 --> 00:37:44,480 Speaker 3: by sources, the valuation more than six billion, a pivot 699 00:37:44,560 --> 00:37:47,960 Speaker 3: from just recycling to a broader look at what's happening 700 00:37:47,960 --> 00:37:49,879 Speaker 3: in data center and the energy supply chain. 701 00:37:50,160 --> 00:37:50,359 Speaker 2: JB. 702 00:37:50,480 --> 00:37:54,160 Speaker 3: Strawbel Redwood Materials really appreciate your time, Thank you very much. 703 00:37:55,239 --> 00:37:59,800 Speaker 3: IBM reporting disappointing revenue in two key software categories, including 704 00:38:00,120 --> 00:38:03,719 Speaker 3: it's closely watched red Hat units, sparking concern among investors 705 00:38:03,960 --> 00:38:07,799 Speaker 3: who see those businesses as essential to growth. IBM CEO saying, quote, 706 00:38:07,800 --> 00:38:09,840 Speaker 3: I'm going to be upfront on one area where it 707 00:38:09,880 --> 00:38:12,680 Speaker 3: didn't look so good. Red Hat growth slowed from fourteen 708 00:38:12,680 --> 00:38:14,920 Speaker 3: percent loss corder to twelve percent. But I'm not worried 709 00:38:14,920 --> 00:38:17,680 Speaker 3: about that. If I'm looking to twenty six CARO, that 710 00:38:17,800 --> 00:38:20,600 Speaker 3: was your interview. What else did you learn in that conversation. 711 00:38:20,880 --> 00:38:24,680 Speaker 4: Yeah, Iman Krishna was really trying to own the area 712 00:38:24,719 --> 00:38:27,160 Speaker 4: that he knew would be of concern and the sequential 713 00:38:27,200 --> 00:38:29,719 Speaker 4: slow down and that was from a constant currency basis said, 714 00:38:29,920 --> 00:38:31,960 Speaker 4: but he was saying that this is legacy issues. This 715 00:38:32,000 --> 00:38:34,880 Speaker 4: is from like twenty three twenty four era. We're now rectifying. 716 00:38:34,960 --> 00:38:38,279 Speaker 4: I'm now seeing really strong upfront demand for red Hat. 717 00:38:38,360 --> 00:38:40,279 Speaker 4: So he's not worried about twenty twenty six. In fact, 718 00:38:40,280 --> 00:38:43,120 Speaker 4: he's really trying to redirect everyone's focus that they are 719 00:38:43,120 --> 00:38:45,239 Speaker 4: an R and D business. They are super heavy in 720 00:38:45,320 --> 00:38:47,360 Speaker 4: terms of the software side of things. We've got a 721 00:38:47,520 --> 00:38:51,160 Speaker 4: pivot this inflection at what's wanting in terms of consulting. 722 00:38:51,560 --> 00:38:53,680 Speaker 4: But he's very pleased about the revenue growth that he 723 00:38:53,800 --> 00:38:56,799 Speaker 4: keeps seeing, and they're also really thinking about the AI 724 00:38:56,920 --> 00:38:59,319 Speaker 4: Booker business nine and a half billion dollars and is 725 00:38:59,320 --> 00:39:01,920 Speaker 4: really shouting approuding that sort of level. But it was 726 00:39:01,960 --> 00:39:04,880 Speaker 4: interesting also that this is a company that's thinking about quantum, 727 00:39:05,000 --> 00:39:07,239 Speaker 4: and boy is there a lot of quantum that's in 728 00:39:07,280 --> 00:39:09,640 Speaker 4: the news, But I think the AI Booker business is 729 00:39:09,640 --> 00:39:11,520 Speaker 4: one to really be keeping an eye on nine and 730 00:39:11,520 --> 00:39:14,239 Speaker 4: a half billion dollars in just about two years. So 731 00:39:14,480 --> 00:39:17,240 Speaker 4: he was more optimistic than perhaps the share price would 732 00:39:17,239 --> 00:39:19,359 Speaker 4: be weathering on the day would seem to show at 733 00:39:19,400 --> 00:39:21,480 Speaker 4: the moment ed. But I think what's really interesting is 734 00:39:21,480 --> 00:39:22,960 Speaker 4: all of this comes on the heels of all these 735 00:39:23,000 --> 00:39:24,440 Speaker 4: earnings that we're seeing, and we're going to be looking 736 00:39:24,480 --> 00:39:26,360 Speaker 4: at Intel a little bit later. I know you in 737 00:39:26,440 --> 00:39:28,000 Speaker 4: particular are going to be trying and analyze that we're 738 00:39:28,000 --> 00:39:30,200 Speaker 4: off by two point six percent on at IBM. Let's 739 00:39:30,239 --> 00:39:32,720 Speaker 4: look at where we are in terms of where Intel 740 00:39:32,760 --> 00:39:36,280 Speaker 4: trades ahead of its numbers, up seven tens percent, notable 741 00:39:36,320 --> 00:39:38,640 Speaker 4: as we think about where its business is going to 742 00:39:38,680 --> 00:39:40,880 Speaker 4: be for growth when they've also given a ten percent 743 00:39:40,920 --> 00:39:43,760 Speaker 4: equity stake to the US government. Who else is giving 744 00:39:43,800 --> 00:39:45,320 Speaker 4: equity stakes to the US government? 745 00:39:45,400 --> 00:39:46,960 Speaker 5: Maybe quantum stocks. 746 00:39:47,000 --> 00:39:48,880 Speaker 4: Some reporting out there from the Wall Street Journal ed 747 00:39:49,400 --> 00:39:51,920 Speaker 4: that we've got a whole raft of quantum companies maybe 748 00:39:51,960 --> 00:39:54,600 Speaker 4: talking about federal fund and going forward, and of course 749 00:39:55,160 --> 00:39:59,080 Speaker 4: that shares or on the up. We see Ion and 750 00:39:59,160 --> 00:40:01,080 Speaker 4: q up eight percent. But look at that d wave 751 00:40:01,080 --> 00:40:04,480 Speaker 4: about fifteen percent now coming up. Let's talk about what 752 00:40:04,480 --> 00:40:06,560 Speaker 4: else you've been up to. Add rivian z bike spinoff 753 00:40:06,800 --> 00:40:09,799 Speaker 4: also wing its first product. That's not the only news 754 00:40:09,880 --> 00:40:12,040 Speaker 4: coming up with TV maker. More on that next as 755 00:40:12,040 --> 00:40:13,000 Speaker 4: a BlueBag. 756 00:40:12,560 --> 00:40:23,320 Speaker 3: Tech this is the first product from also the micro 757 00:40:23,400 --> 00:40:26,760 Speaker 3: mobility startup spun out from ev maker Rivian. It's called 758 00:40:26,880 --> 00:40:30,960 Speaker 3: the TMB an e bike that starts under four thousand dollars. 759 00:40:31,160 --> 00:40:34,920 Speaker 3: TM stands for Transcendent Mobility. It has a unique pedal 760 00:40:34,960 --> 00:40:38,719 Speaker 3: by wire system, no chains or gears, just sensors and 761 00:40:38,800 --> 00:40:41,960 Speaker 3: software converting pedaling to electric power. Two and a half 762 00:40:42,000 --> 00:40:44,880 Speaker 3: years ago, I broke a story that Rivian, the EV maker, 763 00:40:45,040 --> 00:40:46,000 Speaker 3: was working on a bike. 764 00:40:46,120 --> 00:40:47,759 Speaker 2: We just didn't know what kind of bike. 765 00:40:48,280 --> 00:40:50,560 Speaker 3: Now we did, Rivian saw a chance to reach short 766 00:40:50,560 --> 00:40:52,919 Speaker 3: trip riders and leverage is battery tech. 767 00:40:53,120 --> 00:40:53,279 Speaker 13: Now. 768 00:40:53,320 --> 00:40:56,359 Speaker 3: Also is Independent launching its first gen E bike after 769 00:40:56,440 --> 00:40:59,520 Speaker 3: raising hundreds of millions of dollars. I'm riding the premium 770 00:40:59,600 --> 00:41:02,520 Speaker 3: version of the TMB. There's a touchscreen interface for modes, 771 00:41:02,560 --> 00:41:06,359 Speaker 3: maps and music. The detachable battery pack has USBC fast 772 00:41:06,440 --> 00:41:09,840 Speaker 3: charging and uses the same cells as Rivian's evs. The 773 00:41:09,880 --> 00:41:13,319 Speaker 3: modular seat or top frame adjusts without tools. It can 774 00:41:13,360 --> 00:41:16,640 Speaker 3: be shared adjustable pedal assist with speeds up to twenty 775 00:41:16,680 --> 00:41:20,040 Speaker 3: eight miles an hour. There's also an accelerator that throttles 776 00:41:20,120 --> 00:41:22,680 Speaker 3: up to twenty miles per hour where it's allowed. 777 00:41:22,760 --> 00:41:23,359 Speaker 2: One more thing. 778 00:41:23,719 --> 00:41:26,880 Speaker 3: Also is planning four wheeled variants for families and businesses. 779 00:41:27,000 --> 00:41:29,880 Speaker 3: Reservations are open, but deliveries start next year. Can a 780 00:41:29,960 --> 00:41:34,680 Speaker 3: Rivian spin out really redefine the E bike? Ahead of 781 00:41:34,719 --> 00:41:37,719 Speaker 3: that ride, we spoke to Rivian CEORJ Scarrange about what 782 00:41:37,760 --> 00:41:40,680 Speaker 3: the launch of also Z e bike means for his company. 783 00:41:40,760 --> 00:41:41,200 Speaker 2: Listen to this. 784 00:41:42,400 --> 00:41:44,719 Speaker 15: Aside from the fact that Brivian's and shareholder, it also 785 00:41:44,800 --> 00:41:49,840 Speaker 15: allows us from a mission point view to see to 786 00:41:50,200 --> 00:41:53,840 Speaker 15: seed the market or to see customers with an exposure 787 00:41:53,920 --> 00:41:59,239 Speaker 15: to something that's advanced technology in electrification that has a 788 00:41:59,320 --> 00:42:02,160 Speaker 15: much lower step in price. And let's say a car 789 00:42:02,400 --> 00:42:04,439 Speaker 15: even in our two with a starting price forty five 790 00:42:04,440 --> 00:42:07,680 Speaker 15: thousand dollars, you know a lot of folks maybe want 791 00:42:07,680 --> 00:42:09,640 Speaker 15: to try it, likedictional want and try it in more 792 00:42:09,719 --> 00:42:10,800 Speaker 15: like a seven four. 793 00:42:10,640 --> 00:42:11,560 Speaker 2: Thousand R version. 794 00:42:11,960 --> 00:42:14,400 Speaker 4: Now, in other news on Rivian, we understand today it's 795 00:42:14,440 --> 00:42:16,520 Speaker 4: cutting about six hundred jobs as the company contends with 796 00:42:16,560 --> 00:42:17,960 Speaker 4: an unsteady market. 797 00:42:17,640 --> 00:42:19,880 Speaker 5: For evs in the US. It's all according to a source. 798 00:42:20,280 --> 00:42:22,799 Speaker 4: And we should note that the SoundBite that we just 799 00:42:22,880 --> 00:42:24,800 Speaker 4: heard from Marj Scarrine was part of a conversation that 800 00:42:24,840 --> 00:42:27,960 Speaker 4: took place before the news of the layoffs at Revian. 801 00:42:28,120 --> 00:42:32,759 Speaker 3: Right ed, Yeah, that's right, you know, commercial roles being cut. 802 00:42:32,880 --> 00:42:35,759 Speaker 3: But Rivian on the board, big stakeholder. 803 00:42:35,800 --> 00:42:39,560 Speaker 4: And also what a busy show, extraordinary package. I love 804 00:42:39,600 --> 00:42:42,120 Speaker 4: seeing it on LinkedIn and across very of the social networks. 805 00:42:42,160 --> 00:42:43,600 Speaker 4: Go see more of ed on a bike. But that 806 00:42:43,640 --> 00:42:45,239 Speaker 4: does it for this edition of Bloomberg Tech. 807 00:42:46,400 --> 00:42:48,319 Speaker 3: Yeah, check out the pod. You know where to find it. 808 00:42:48,440 --> 00:42:50,319 Speaker 3: Lots of you listen to it. Thank you very much. 809 00:42:50,440 --> 00:42:51,479 Speaker 3: This is Bloomberg Tech.