Speaker 1: From the heart where innovation, money and power Collie in
Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
Speaker 1: and Ed Ludlow.
Speaker 2: I'm Caroline Heinder Bloomberg's weltad quarters in New.
Speaker 3: York, and I'm Ed Ludlow in San Francisco. This is
Speaker 3: Bloomberg Technology.
Speaker 2: Coming up. We push our head to Apple's results after
Speaker 2: the bell.
Speaker 4: This is investors anxiously await iPhone sales numbers.
Speaker 5: US.
Speaker 3: We'll sit down with the CEO of qualcom Is the
Speaker 3: chip maker, offers an upbeat forecast.
Speaker 4: And the CFO of door Dash joins us to run
Speaker 4: through the company's latest results.
Speaker 2: All that and so much more coming up.
Speaker 4: There is a wealth of micro data of company news today.
Speaker 2: That we're going to be digging into.
Speaker 4: Not to mention New York based Peloton, but I'm looking
Speaker 4: at what's happening on a broad index today.
Speaker 5: Ed.
Speaker 4: We're seeing the nasdak cup seven tenths of a percent
Speaker 4: post the FED. We're relieved that we're not going to
Speaker 4: see rate hikes coming, but certainly still no signal over
Speaker 4: those rate cuts as we still see a resilient US
Speaker 4: overall jobs picture, which we get the detail of come Friday.
Speaker 2: Yes there's a calling.
Speaker 4: Maybe the slowest increase in jobs since November, but still resilient.
Speaker 4: We're seeing a ten year yield just down one basis point.
Speaker 4: A little bit of movement into the mode market on
Speaker 4: the day post fed as we anticipate the jobs data
Speaker 4: and Bluemberg dollar index actually weaker as we see a
Speaker 4: little bit of a relief there. We're down by four
Speaker 4: tenths of a percent. What therefore is bitcoin doing the
Speaker 4: versus the US dollar. Let's move it on and have
Speaker 4: a little look that we're up three percent, so a
Speaker 4: little bit of a risk on kind of a trade today,
Speaker 4: but still sub that sixty thousand dollars level. But ed,
Speaker 4: what are you watching on this corporate news front?
Speaker 3: Let's start with Peloton, an absolutely wild morning session in
Speaker 3: the market. So far CEO Barry McCarthy is going to
Speaker 3: step down the board. We'll find a new CEO. Fifteen
Speaker 3: percent of global headcount going to be cut. The story overall,
Speaker 3: things are not getting better for Peloton. Look at the
Speaker 3: chart two day chart to illustrate the point that when
Speaker 3: the market opened there was a session high of eighteen
Speaker 3: percent cheering. What is another restructuring and yet we're now
Speaker 3: down more than ten percent. Having had some time to
Speaker 3: basically look at what Peloton's saying and on the hardware
Speaker 3: side of their business, the multi channel sales side of
Speaker 3: their business, and then subscriptions, things are not going to
Speaker 3: be as good by the end of the year as
Speaker 3: perhaps they had hoped, the.
Speaker 1: Market had hoped.
Speaker 3: We're gonna get deep on that later in the show
Speaker 3: were Bloombos Mark German, but that is just a real
Speaker 3: ride that stocked this morning. The earning story is elsewhere
Speaker 3: as well. Quill Calm up almost ten percent. The smartphone
Speaker 3: market seems to be recovering. There's going to be a
Speaker 3: lot to talk about with CEO Christiano and on later
Speaker 3: in the program in the context of AI and also
Speaker 3: what's happening in China and then door Dash. This is
Speaker 3: a tail as old as not time, but the history
Speaker 3: of gig economy companies investors looking at ebit dar forecast
Speaker 3: and wondering what's going on the relationship between at Basic
Speaker 3: gig platforms and ebit dar is something we've talked about
Speaker 3: a lot. The concern is like are they investing too much?
Speaker 3: What's going on the bottom line, It's the US's biggest
Speaker 3: delivery platform, mid single digit growth team growth in the
Speaker 3: second quarter. Let's find out what's going on with that one, Caroline.
Speaker 4: Yeah, because we did actually see strong numbers for fiscal
Speaker 4: first quarter revenue on the higher side, but it was
Speaker 4: this worry about the forecast that is setting the shares lower.
Speaker 4: DoorDash CFO the perfect person to speak to about it,
Speaker 4: Rabbi in Conda. Thank you very much indeed for joining us,
Speaker 4: Rabbi and just talk to us about why this restrained
Speaker 4: outlook for adjusted a bit dark come the second quarter.
Speaker 2: And why then the ramp in the second half.
Speaker 6: Good morning, Carolina, thanks for having me this morning. Q
Speaker 6: one was a very strong quarter for US across the board.
Speaker 6: If you look at the results, demand on the platform
Speaker 6: continues to be very strong. All time highs in terms
Speaker 6: of users, all time high in terms of subscribers, all
Speaker 6: time high in terms of order frequency. In Q one,
Speaker 6: we fulfilled more orders than ever before in our history. Honestly,
Speaker 6: you've been one of the strongest quarters since I've been
Speaker 6: here for the last six years. When I look at
Speaker 6: the underlying demand on the platform, it really is very good.
Speaker 6: We're not seeing weakness on the consumer side, whether it's
Speaker 6: you know, low income or high income, or the East
Speaker 6: Coast or the west. Goal, we're team trend across all markets.
Speaker 6: We operate in thirty countries across all life of business,
Speaker 6: and at the same time, we posted the lowest netlots
Speaker 6: in our history, which is being aided by the highest
Speaker 6: adjuctity bite in our history. Overall, the business continues to
Speaker 6: do really well, and I'm excited about not just the
Speaker 6: Q one results, but they're going forward Q two as
Speaker 6: well as the rest of twenty four.
Speaker 4: So did you get frustrated when the shares full because
Speaker 4: the market wanted to see more in terms of profitability
Speaker 4: for the forecast.
Speaker 6: Our goal has always been to continue to build the
Speaker 6: best product possible, and you're seeing that in our results.
Speaker 1: Users, Like I said, I've been in an all time high.
Speaker 6: We ended twenty three with over thirty seven million consumers
Speaker 6: and that number continues to grow considerably since that point.
Speaker 6: We're not seeing any weakness, whether it's the large, you know,
Speaker 6: enterprise merchants on the platform or the local merchants on
Speaker 6: the platform. You're seeing wrong double digits scapes, stores, sales
Speaker 6: growth across the world. Our grocery business is growing at
Speaker 6: one hundred percent year on ear for the third straight
Speaker 6: quarter in a row. Our goal will continue to be
Speaker 6: to build the best product possible that consider all three
Speaker 6: sides of the audience, whether it's consumers, merchants or adaptors.
Speaker 3: Robbie, I'm building the best product possible. It's easier way
Speaker 3: in on the adjusteday with the forecast. There's some sense
Speaker 3: that you're investing in specific areas and that might be
Speaker 3: impacting the bottom line. Right you're investing at the technology layer.
Speaker 3: What are you doing and what's the goal there?
Speaker 1: Yeah?
Speaker 6: In Q one, you know, one of the key things
Speaker 6: that impacted the overall business is we did absorb some
Speaker 6: costs in New York as well as Seattle.
Speaker 1: That cost is.
Speaker 6: Going to continue to reduce as we go through the
Speaker 6: rest of the year, as we make the business more efficient,
Speaker 6: as we consider other opportunities to consider to make.
Speaker 1: Those costs go down.
Speaker 6: If you recall our business, the core restaurant's business has
Speaker 6: actually been profitable for many years now. We're taking the
Speaker 6: it's from that business and building two new businesses, grocery
Speaker 6: as well as international, both of which are growing extremely fast.
Speaker 6: They're growing faster than our restaurant's business. At the same time,
Speaker 6: the profitability of both of those businesses is going up.
Speaker 6: If you look at our new verticals business, the third
Speaker 6: party component of it has been gross profit positive for
Speaker 6: a few quarters now. Same is the case with international,
Speaker 6: where many countries the restaurant business is actually contribution margin positive.
Speaker 6: So overall the restaurant business profitability is improving. Our new
Speaker 6: vehicles as well as international is also improving in profitability.
Speaker 3: Just really quick. You mentioned Seattle in New York. There's
Speaker 3: a kind of idiosyncratic factors in the quarter. Just explain
Speaker 3: the basics to audience of what happened there. On the
Speaker 3: policy front, Yeah, on the.
Speaker 6: Policy, if I look up, our goal is always to
Speaker 6: work with policymakers and regulators. We do that in over
Speaker 6: hundreds of cities across thirty different countries to ensure we're
Speaker 6: protecting the flexibility and accessibility the doctors and couriers across.
Speaker 1: The globe we're asking for. I just HELFU are.
Speaker 6: Honestly like extreme examples of that regulation.
Speaker 1: We've taken some action to.
Speaker 6: Change the way in which we operate. We're making the
Speaker 6: business more efficient, and our goal is to continue to
Speaker 6: work with policymakers in.
Speaker 4: That regard, Let's just get details on operating profits. You
Speaker 4: say they'll come in the near future. The market expects
Speaker 4: the third quarter, are they right to expect that?
Speaker 6: Look, I mean, our gap net loss is the lowest
Speaker 6: in our history. What you're seeing in the business is
Speaker 6: the growth is strong. Profitability across all lines of business
Speaker 6: is improving. I do expect the trend to continue. And
Speaker 6: if that trend continues on both the growth as well
Speaker 6: as the profitability, the overall business is going to be
Speaker 6: gap positive.
Speaker 1: It's just a question of time.
Speaker 6: Our free cap flow has been very strong. If you
Speaker 6: look at the quarter, we've generated roughly about half a
Speaker 6: billion dollars of free cash flow. And that's truly our
Speaker 6: north star in being able to rabas in the business.
Speaker 3: Robbi real quick, what are the specific consumer habits, the
Speaker 3: size of the basket that they're doing, Lots of frequency,
Speaker 3: little spend like little things like that.
Speaker 6: Sure, what you're seeing in the business today is more
Speaker 6: consumers ordering from more categories. Historically, people thought of us
Speaker 6: purely as a restaurant delivery platform. Today are consumers roughly
Speaker 6: about twenty percent of our consumers are ordering from convenience
Speaker 6: grocery alcohol. We have increased the basket sizes across Robbi.
Speaker 3: Rabbisfi, Robbi and a condo.
Speaker 7: We've got to go.
Speaker 8: Thank you.
Speaker 7: Caron.
Speaker 4: Yeah, if we have some breaking news, let's go to
Speaker 4: the President Biden delivering remarks right now.
Speaker 8: The first is the right to free speech and for
Speaker 8: people to peacefully assemble and make their voices heard. The
Speaker 8: second is the rule of law. Both must be upheld.
Speaker 8: We are not an authoritarian nation where we silence people
Speaker 8: or squash descent American people are heard. In fact, protests
Speaker 8: is in the best tradition of how Americans respond to
Speaker 8: consequential issues. But neither are we a lawless country. We
Speaker 8: are a civil society. An order must prevail. Throughout our history.
Speaker 8: We've often faced moments like this because we are a big, diverse,
Speaker 8: free thinking and freedom loving nation, and moments like this
Speaker 8: there are always those who rush in to score political points.
Speaker 8: But this isn't a moment for politics. It's a moment
Speaker 8: for clarity. So let me be clear. Peaceful protest in America.
Speaker 8: Violent protest is not protected. Peaceful protest is. It's against
Speaker 8: the law, violence occurs, Destroying property is not a peaceful protest.
Speaker 1: It's against the law.
Speaker 8: Vandalism, trespassing, breaking windows, shutting down campuses, forcing the cancelation
Speaker 8: of classes and graduations. None of this is a peaceful protest.
Speaker 8: Threatening people, instilling, firing people is not peaceful protest.
Speaker 1: It's against the law.
Speaker 8: Descent is essential to democracy, but descent must never lead
Speaker 8: to disorder or to denying the rights of others, so
Speaker 8: students can finish the semester and their college education. Look,
Speaker 8: it's basically a matter of fairness. It's a matter of
Speaker 8: what's right. There's the right to protest, but not the
Speaker 8: right to cause chaos. People have the right to get
Speaker 8: an education, the right to get a degree, the right
Speaker 8: to walk across the campus safely without fear of being attacked.
Speaker 8: But let's be clear about this as well. There should
Speaker 8: be no place in any campus, no place in America
Speaker 8: for anti semitism or threats of violence against Jewish students.
Speaker 8: There is no place for hate speech or violence of
Speaker 8: any kind, whether it's anti Semitism, Islamophobia, or discrimination against
Speaker 8: Arab Americans or Palestinian Americans. It's simply wrong. There's no
Speaker 8: place for racism in America. It's all wrong. It's not American.
Speaker 8: I understand people have strong feelings and deep convictions in America.
Speaker 8: We respect the right and protect the right for them
Speaker 8: to express that. But it doesn't mean anything goes. It
Speaker 8: needs to be done without violence, without destruction, without hate,
Speaker 8: and within the law. You know, I'll make no mistake
Speaker 8: as president. I will always defend free speech and I
Speaker 8: will always be just as strong as standing up for
Speaker 8: the rule of law. That's my responsibility to you, the
Speaker 8: American people, and my obligation of the Constitution.
Speaker 1: Thank you very much.
Speaker 9: The protest forced you to be consider any of the
Speaker 9: policies in regard to the region.
Speaker 1: No, thank you.
Speaker 7: Do you think the national.
Speaker 4: President might delivering remarks at the White House regarding protests
Speaker 4: student protests that's bring in Bluemug's Kaye lines for more
Speaker 4: and against violence and destruction, but well full peaceful protest.
Speaker 9: Yeah, the President making it clear that he does stand
Speaker 9: by Americans' right to free speech and that that should
Speaker 9: not be interfered with. But yes, Caroline, essentially that it
Speaker 9: should be done peacefully. The President, and making these remarks
Speaker 9: in the Roosevelt Room, said descent must never lead to
Speaker 9: disorder or denial of rights, that the right to protest
Speaker 9: does not mean the right to cause chaos, going on
Speaker 9: to say that there is no place for anti Semitism
Speaker 9: in America. He makes these remarks as he is facing
Speaker 9: growing pressure to address what we're seeing happening on college
Speaker 9: campuses across the country, from Columbia University to the West Coast,
Speaker 9: with what we've seen at UCLA in the wee hours
Speaker 9: this morning. All of it just speaking to the pressure
Speaker 9: that he is under as he is trying to stand
Speaker 9: by Israel as an ally, but there is growing concern
Speaker 9: about the way Israel is conducting itself in its war
Speaker 9: against a moss in Gaza. We just heard there the
Speaker 9: President being asked by a reporter whether or not this
Speaker 9: has all made him rethink his policy on Israel.
Speaker 2: He said no.
Speaker 9: He also said no to the question he was asked
Speaker 9: about whether the National Guard should be interfering in these
Speaker 9: instances on the college campuses. He said no to that
Speaker 9: as well. I would also point out we will be
Speaker 9: hearing from President Biden on the issue of anti Semitism
Speaker 9: again next week on Tuesday, May seventh. He is planning
Speaker 9: to speak at the Capital as part of the National
Speaker 9: Holocaust Remembrance ceremony that will be happening on that date.
Speaker 9: We heard from the White House Press Secretary of Karee
Speaker 9: John Pierre yesterday who said the President will discuss the
Speaker 9: moral duty to combat the rising scores of anti Semitism
Speaker 9: and the administration's work on that issue. Of course, we
Speaker 9: probably got a preview of some of what he will
Speaker 9: likely say when we just heard him speak today.
Speaker 3: Bloom bells Ka lines, thank you for the context on that.
Speaker 3: It's interesting because we've been talking about protests at different
Speaker 3: university campuses across the country and indeed across the world
Speaker 3: for several days at least. Now, what was the politics
Speaker 3: of this with the president, but what was the pressure
Speaker 3: on the hill and the conversation about whether or not
Speaker 3: Biden would come out and say anything, and the timing
Speaker 3: of it.
Speaker 9: Well, we had heard President Biden speak on this before,
Speaker 9: saying that he condemns anti Semitism, although he also had
Speaker 9: suggested that people need to understand what's going on with
Speaker 9: the Palestinian people. But certainly the domestic political pressure has
Speaker 9: been growing. We have seen specifically Republican members of Congress
Speaker 9: really taking hold of this issue. We have seen the
Speaker 9: House Speaker Mike Johnson, together with other Republican members of
Speaker 9: the New York delegation actually going to the campus of
Speaker 9: Columbia University just last week, and just last night, the
Speaker 9: House passed by a wide bipartisan margin, a bill that
Speaker 9: would essentially help the definition of anti Semitism be applied
Speaker 9: differently with the Department of Education. There was some concern
Speaker 9: that that would become a free speech issue, that it
Speaker 9: would limit criticism of Israel or the Israeli government, for example,
Speaker 9: but it still got through with a bipartisan majority. It's
Speaker 9: unclear whether or not that will move forward in the Senate,
Speaker 9: but you are definitely seeing through the legislature efforts to
Speaker 9: combat anti Semitism. A lot of blame being cast on
Speaker 9: President Biden, whether rightly or not, for what we're seeing
Speaker 9: on college campuses, and of course he's been dealing with
Speaker 9: the political ramifications of his wider policy toward Israel consistently
Speaker 9: throughout this primary season, as we have seen actual Democratic
Speaker 9: primary voters voting against alternatives, whether it be uncommitted or
Speaker 9: something to the effect in different states like Michigan and others,
Speaker 9: to express their discontent with how the president has been
Speaker 9: handling his Israeli policy.
Speaker 2: Talking of Israeli policy.
Speaker 4: Breaking news that Turkey has indeed halted all trade with Israel.
Speaker 4: That's both exports and imports to and from Israel as
Speaker 4: of Thursday. That's according to two Turkish officials familiar with
Speaker 4: the matter. Katie Lines bringing us the latest from what
Speaker 4: the president has been saying. Meanwhile, now we want to
Speaker 4: return our attention toward is in an investor's focus right now.
Speaker 2: We are still a mid earning season.
Speaker 4: Today is Apple reporting quarterly results after the market closes
Speaker 4: later today, giving investors kind of a better sense of
Speaker 4: how the iPhone maker is weathering at sales slump. We've also, though,
Speaker 4: got to be talking about what on earth is happening
Speaker 4: over at Peloton. It's its shares slump too. Bloomberg's Mark
Speaker 4: Gum and for more on what to expect, let's just
Speaker 4: kick off with Apple because it is the huge company
Speaker 4: that many focus on.
Speaker 2: What are we lining up for?
Speaker 10: Yeah, Apple earnings? The expectation for the fifth time in
Speaker 10: six quarters, Apple is going to report an annual decline.
Speaker 10: Revenue is expected by Wall Street to come in at
Speaker 10: about ninety billion in change, which would be about a
Speaker 10: five billion dollar dip on year over year. The other
Speaker 10: thing that's not so hot here. All of Apple's product categories,
Speaker 10: so hardware categories, from the iPhone to the iPad, the Mac, wearables, AirPods,
Speaker 10: those are expected to decline on an annual basis, with
Speaker 10: the only bright spot potentially being actually some pretty significant
Speaker 10: growth in the services business. Also another decline in Greater China,
Speaker 10: right on the heels of reports from Counterpoint in IDC
Speaker 10: and others that iPhone sales in China dipped by about
Speaker 10: a fifth despite the smartphone market going up in general.
Speaker 10: So overall ninety billion in revenue. That's a big number.
Speaker 10: That's amazing for most companies, but for Apple, Wall Street
Speaker 10: probably would have liked a little bit more.
Speaker 3: Mark Hardware and Services is a pretty wild story when
Speaker 3: it comes to Peloton Bluembo technology team. Let's show the
Speaker 3: two day chart and just go back over what happened.
Speaker 3: Opened up as high as eighteen percent, is now down
Speaker 3: more than ten percent in the session. The CEO is
Speaker 3: going after two years, another headcount reduction, and I think
Speaker 3: no sign really that Peloton's got a strategy to get
Speaker 3: itself out of trouble. Give me the details.
Speaker 10: I don't think people realize how close Peloton is to bankruptcy. Right,
Speaker 10: they'll be lucky to remain on the stock market much longer.
Speaker 10: If you ask me, I'm shocked that Barry McCarthy stuck
Speaker 10: around so long. There is nothing he didn't try. There
Speaker 10: is nothing he didn't do. He's laid off several thousand people,
Speaker 10: He's moved from a hardware focus to a content and
Speaker 10: subscription focus, restructured the company multiple times, hired new executives
Speaker 10: to write the ship, outsourced pretty much everything you could outsource,
Speaker 10: from installation to shipping to manufacturing. And here we are
Speaker 10: missing Wall Street expectations, missing internal forecasts. People still not
Speaker 10: buying as many bikes and rows and different Peloton appliances
Speaker 10: as you would expect, the premium app falling flat on
Speaker 10: its face. Yes, people like their marketing chief continuing to
Speaker 10: leave Pelotons in its worshape as it's ever been. And
Speaker 10: they have no CEO running the company.
Speaker 3: Just looking at the Bloomberg terminal, and just to give
Speaker 3: some specifics, the stock is at a record low. They
Speaker 3: ended the quarter with about seven hundred million dollars seven
Speaker 3: hundred and thirty seven million dollars of cash, and they
Speaker 3: did say that because of the headcut count reduction, they'll
Speaker 3: say about two hundred million dollars a year and cash
Speaker 3: flow positivity is possible by the fourth quarter. But as
Speaker 3: you outline, Mark, the situation of Peloton, which is a
Speaker 3: company way off its pandemic era high, is pretty bleak.
Speaker 3: Bloombo's Mark German. Stay tuned for his reporting on a
Speaker 3: Apple as well after the belt. Now coming up, chip
Speaker 3: maker Quial com up with earnings in a strong forecast.
Speaker 3: There's a lot to talk about with CEO Christiano Ramon
Speaker 3: about the AI smartphone and the AIPC. That conversation is
Speaker 3: coming up. This is Bloomberg Technology.
Speaker 2: Time now for talking tech.
Speaker 4: First up, video game publisher Take too Interactive and plans
Speaker 4: to shut down two subsidiaries as part of a mass
Speaker 4: layoff across its divisions over in London and Seattle.
Speaker 2: That's according to documents review by Bloomberg Now.
Speaker 4: Last month, Take two said it would lay off five
Speaker 4: percent of its staff.
Speaker 2: That's around six hundred workers. Meanwhile, let's take a look
Speaker 2: at Starlink, as it's still operating.
Speaker 4: In multiple unauthorized regions even after the company issued warnings
Speaker 4: last month that its satellite internet will be shut down by.
Speaker 2: May first in those areas.
Speaker 4: These notices come after a March investigation by bloombag News,
Speaker 4: which first revealed the extent which Musk's satellites are being
Speaker 4: used in countries where it is illegal to operate, including
Speaker 4: in territories ruled by repressive regimes. And regulators moved to
Speaker 4: bar a Huawei lab from approving telecom gear.
Speaker 2: For use in the United States.
Speaker 4: Now it's a proposed similar moves now against other providers
Speaker 4: deemed a national security threat, including several Chinese companies. The
Speaker 4: SEC says this will ensure that these non government labs
Speaker 4: aren't quote influenced by untrustworthy actors.
Speaker 2: And we've got more Hunhuawei.
Speaker 3: This is another big Bloomberg story. Chinese seller communication as
Speaker 3: giant Huawei is secretly funding cutting edge research at American universities,
Speaker 3: including Harvard, through an independent Washington based foundation. Here with
Speaker 3: the scoop is Bloomberg's k O'Keeffe in Kate. At the
Speaker 3: heart of this reporting, like all good Bloomberg reporting, is
Speaker 3: you following the money. What did following the money tell you?
Speaker 2: Right?
Speaker 11: Well, what we saw is that over the past few years,
Speaker 11: Huawei has funded hundreds of researchers and spent millions of
Speaker 11: dollars and it was all really without their knowledge. They
Speaker 11: thought they were being funded by a foundation based in Washington,
Speaker 11: DC that is called the Optica.
Speaker 4: Foundation competition administered by Optica and in fact Grant's I
Speaker 4: think you say, there are eleven opportunities on the Optica
Speaker 4: Foundation website to have early career prizes and fellowships, but
Speaker 4: all but the Huawei funded competition are basically clear about
Speaker 4: which backers are providing the money. What did ultimately the
Speaker 4: Optica Foundation save for its quietness on Huawei's money.
Speaker 11: Right exactly, So the other ten opportunities are made clear
Speaker 11: that they were funded by an individual or a company
Speaker 11: or some combination. The Huawei funded prize appeared to all
Speaker 11: the people that I spoke with to be funded by
Speaker 11: the foundation's general funds, and the response from Optica's CEO
Speaker 11: was that, look.
Speaker 7: You know, there's a lot of donors who.
Speaker 11: Want to remain anonymous, including US donors, and you know, effectively,
Speaker 11: you know, there's no issue with it.
Speaker 3: There is examples in other jurisdictions of Huawei being a
Speaker 3: bit more public having initiatives to make inbros in those markets,
Speaker 3: I think, particularly in Europe, Kate, explain what you learned there.
Speaker 7: Yeah, that's right.
Speaker 11: I mean, as we as we reported in countries like France,
Speaker 11: in Germany, Huawei is openly funding, you know, research centers.
Speaker 7: In the US, it's a really different story.
Speaker 11: Because several years ago the US government moved on multiple
Speaker 11: fronts to restrict restrict Huawei. One of the major restrictions
Speaker 11: that have been in place are at sport controls, and
Speaker 11: that blocks people and individual people and companies from sharing
Speaker 11: tech with Huawei.
Speaker 7: But what's interesting about this.
Speaker 11: Competition is it actually kind of falls through the cracks
Speaker 11: of all these different regulations because it deals with academic research,
Speaker 11: which is for the most part meant to be published,
Speaker 11: and therefore it is not subject to the current export
Speaker 11: controls that we have in place in the US.
Speaker 4: Nevertheless, and as a great quote in your piece says,
Speaker 4: it's a bad look for prestigious research foundation to be
Speaker 4: anonymously accepting money from a Chinese company. So really, ultimately
Speaker 4: this is about sort of the feel of it rather
Speaker 4: than actually the letter of the law.
Speaker 11: Well, right, there's nothing illegal about this as far as
Speaker 11: I could tell in my reporting. It does, though, put
Speaker 11: the universities who actually accept the money on behalf of
Speaker 11: these researchers, as well as the researchers themselves in an
Speaker 11: uncomfortable position because a lot of the university these have
Speaker 11: decided independently that you know, they don't want to work
Speaker 11: with well anymore. Some of them have made public statements
Speaker 11: about that, and so they're in this weird spot now
Speaker 11: where some of their researchers have gotten money already but
Speaker 11: you know, to do good work, to do science, but
Speaker 11: they didn't know who was ultimately funding it, and you know,
Speaker 11: maybe something different would have happened had they known the
Speaker 11: true source of funding.
Speaker 4: Kate o'keith, first, great big deep dive for us here
Speaker 4: at Bridemerg.
Speaker 2: We so appreciate you joining the show. Thank you very much.
Speaker 3: Indeed, welcome to our Bloomberg television and radio audiences worldwide.
Speaker 3: Quowdcom stock significantly higher around ten percent the story. Things
Speaker 3: look like they're improving in the smartphone market globally, and
Speaker 3: within that there's a lot of nuance. There is specific
Speaker 3: action in China and there's strength also for the chips
Speaker 3: that go into cars in the automotive sector. Delighted to
Speaker 3: say that Quidcom CEO Christiana and one joins us. Now,
Speaker 3: good morning to you, Christiano, and let's start with China.
Speaker 3: What you guys said is that sales to Chinese handset
Speaker 3: makers serves forty percent in the first half. But I
Speaker 3: wonder what the story behind that is in the end market,
Speaker 3: what's happening, particularly with Android based platforms for the Chinese consumer.
Speaker 12: Very good good morning to you as well. It's a
Speaker 12: great morning I think today. But look the story on
Speaker 12: hints's in China. It's pretty simple. We've seen the market
Speaker 12: had stabilized. We had said about that a couple quarters ago,
Speaker 12: and users aren't buying better phones. It's really for us
Speaker 12: a story of flagship and high tiers within the Android,
Speaker 12: especially a lot of those flagships that are launching with Genai.
Speaker 12: I think we see the very beginning of Genai coming
Speaker 12: to devices and that actually drove you know, a lot
Speaker 12: of the growth. And it's forty percent not only in
Speaker 12: this quarter, but actually expected to have the same in
Speaker 12: the next. As we as we look at the guide,
Speaker 12: he has been a good story as the smartphone markets
Speaker 12: stabilize it and Android flagship has stayed resilient.
Speaker 3: Christiana, As you know and our audience knows, we will
Speaker 3: talk about on device when it comes to generative AI.
Speaker 3: Let's just linger a moment longer on China. It looks
Speaker 3: like some of the domestic players that Android base are
Speaker 3: gaining market share against Apple and the iPhone. You see
Speaker 3: that in the I d C data, you see it
Speaker 3: in the counterpoint research data. If that is the case,
Speaker 3: where the domestic players are gaining that market share, what
Speaker 3: does it mean for Qualcom.
Speaker 12: Look the way you should think about our position in
Speaker 12: China in the hinter market, we have been very focused
Speaker 12: on the premium in height tier word Snapdragon. So when
Speaker 12: when an Android OEM from our customers show me up
Speaker 12: a one plus Honor Vivo when they're selling a flagship device,
Speaker 12: we have a lot of content. Not only we have
Speaker 12: the more content, but we have a lot of the
Speaker 12: application processor, the AI engine. So that has been a
Speaker 12: positive development and that's what is being driving the content
Speaker 12: increase and the ASP increased, especially when the mix changes
Speaker 12: to a premium device. The fact that the Android flagship
Speaker 12: in China with the Chinese OEMs had been stable, proven
Speaker 12: to be resilient in see positive momento at the mixed
Speaker 12: get richer Chinese users are buying a better phone. That's
Speaker 12: a good story for Qualcom and it's reflected into numbers.
Speaker 4: Is there any anxiety from a political perspective, Christiano, You've
Speaker 4: obviously weathered the fact that you're.
Speaker 2: Only in Huawei four G phones.
Speaker 4: Now you're actually seeing basically ultimately revenue pull away by
Speaker 4: the end of this year for Huawei. But the geopolitical
Speaker 4: context is clear. How difficult is it to you to
Speaker 4: be so dependent on China.
Speaker 12: Look, the first thing I want to say is our
Speaker 12: business is not just China, and I think what happened
Speaker 12: with the smartphone this is a phenomenon globally. I think
Speaker 12: you even saw Samsung when they talk about it the
Speaker 12: earnings called they have a commentary about the device AI
Speaker 12: opportunity for flagships.
Speaker 1: It is real.
Speaker 12: So the second part is the way we think about
Speaker 12: everything is if you have a leadership position in technology,
Speaker 12: you're going to have a big business in China. It's
Speaker 12: just a function of the size of the market. And
Speaker 12: I think that's been true not only for Qualcom, for
Speaker 12: a lot of other companies that have leadership product position.
Speaker 1: And to this.
Speaker 12: Point, I think we have been seeing our business in
Speaker 12: China can continue to be a stable business. We have
Speaker 12: not been restricted by like everybody else in the industry,
Speaker 12: you have to monitor the situation. I think this is
Speaker 12: how we have to navigate in the semiconductor industry. But
Speaker 12: we're happy with the results we have right now.
Speaker 4: Let's go therefore to the technology that is winning out,
Speaker 4: and you talk about AI on device, how are people
Speaker 4: using it? You've got snaptrack at eight series Gen three
Speaker 4: mobile platform that's really meant to be supporting generative AI
Speaker 4: at the moment, basically with a personal assystement assistant potentially,
Speaker 4: But how is that a reality for any or many?
Speaker 12: Look, I love talking about this and I wish I
Speaker 12: had a lot of time, so I'm going to try
Speaker 12: to summarize it in just a few minutes.
Speaker 1: The first thing that is happening.
Speaker 12: You need to think about AI running on the cloud
Speaker 12: and the device as a new way of doing computing.
Speaker 12: And we're just at the very beginning of the use cases.
Speaker 12: So right now we can see, for example, multiple tens
Speaker 12: of use cases, and I expect that within six months
Speaker 12: from now will be hundreds, if not more. What are
Speaker 12: people doing with it? You see some use cases of
Speaker 12: life translate. You can watch a video, you can add
Speaker 12: a subtitle in any language, you want. You can do
Speaker 12: a lot of real time photo editing. You can change
Speaker 12: a lot of the images with the way you like it.
Speaker 12: You can create new images, you can summarize documents. But
Speaker 12: the most important thing is the other thing that it's
Speaker 12: going to bring the phones. I'm going to give you
Speaker 12: a point to an example. More and more you do
Speaker 12: more things on the phone today, but there are things
Speaker 12: that you're going to think about it. You know what,
Speaker 12: I have to respond to this very long email. I'd
Speaker 12: rather wait until I get to my laptop. When you
Speaker 12: think about a Microsoft Copilot in the phone, for example,
Speaker 12: you're going to see a lot more use of those devices.
Speaker 12: We're going to see much much more productivity. So we're
Speaker 12: the beginning of something great. It's going to take some time.
Speaker 12: Use cases are developing. You should think about this. What
Speaker 12: happened with the smartphone. In the beginning, there's just a
Speaker 12: few apps in the app store, but then all of
Speaker 12: a sudden, the apps started to define the user experience.
Speaker 12: That's how we feel about AI were the beginning. It's
Speaker 12: going to take a little bit of time, but the
Speaker 12: signs are great.
Speaker 3: For a Bloomberg television and radio audiences worldwide, we're speaking
Speaker 3: to the culowdcom CEO, Christiano Amon, and I think you
Speaker 3: summed it up well. Christiana. We're in the very early
Speaker 3: stages of the world where we're running ten billion parameter
Speaker 3: models locally on device on the small inside. But we're
Speaker 3: already talking about the AIPC.
Speaker 1: Right.
Speaker 3: You guys have your latest generation which will come to
Speaker 3: market Snapdragon ten Elite and plus, and it's very impressive
Speaker 3: combination of CPU, GPU, NPU. Give me a minute, we'll
Speaker 3: talk about MPU. But I still think a lot of
Speaker 3: people struggle to say, what am I going to do
Speaker 3: sitting in a cafe running allion dollar a ten billion
Speaker 3: parameter model while I have a cappuccino, Like, what's the
Speaker 3: actual real.
Speaker 13: World use case?
Speaker 12: Okay, you know, we could not be more excited about
Speaker 12: what's happening in PC. I really think PC is reborn
Speaker 12: with the Snapdragon ex Elite, and it's not only because
Speaker 12: of the performance, but because actually AI. By the way,
Speaker 12: we can run twenty billion parameter on the ax Elite.
Speaker 12: This is it's it's evolving very very fast. But the
Speaker 12: use case are really incredible. Think about now there's AI
Speaker 12: running all the time. Everything you're doing on your PC.
Speaker 12: It is running and it's private, it's your data, it's
Speaker 12: your use. The ICE learning about you, stray to understand
Speaker 12: your intent. And we starting to see right now with
Speaker 12: the Microsoft Copilot that you can use the Copilot for everything,
Speaker 12: for PowerPoint, for Excel, for Word or email.
Speaker 1: But it's much more.
Speaker 12: The AI is helping you recall documents that you have
Speaker 12: on that you've seen or you have on your computer.
Speaker 12: It's going to help you do things, going to reminding
Speaker 12: of things that you have to do or even it's
Speaker 12: going to help you with tasks that you need. You
Speaker 12: don't know how to do it, and they will help
Speaker 12: you one step of the way. That's going to change
Speaker 12: how we use our computers. And the interesting thing is
Speaker 12: how do you do this in a way that you
Speaker 12: don't compromise battery life.
Speaker 1: A CPU and a GPU have a job to do.
Speaker 12: And that's why when you buy a PC today, you
Speaker 12: want a fest CPU and a fast GPU, but you
Speaker 12: need a whole new engine that needs to do something
Speaker 12: else and needs to do it all the time and
Speaker 12: not compromise battery life.
Speaker 1: That's the Qualcom story, and what is.
Speaker 2: The market share story of Qualcolm.
Speaker 4: We've been hearing a lot about other competitors getting into
Speaker 4: the AIPC space.
Speaker 12: I think this is the great story for Qualcom because
Speaker 12: we're new, we're just entering the market. I think we're
Speaker 12: going to see a lot of the devices coming up
Speaker 12: in the second half of this year. I encourage everybody
Speaker 12: to watch the Microsoft build and the incredible things they're
Speaker 12: doing with the new Windows, and I think what's going
Speaker 12: to happen is Qualcom is coming in with the leadership product.
Speaker 1: We like the design traction.
Speaker 12: Financially, that's going to be more of a fiscal twenty
Speaker 12: five event because a lot of the laptops are going
Speaker 12: to be in the shelves for the second half and
Speaker 12: back to school. But the product momentum is great. And
Speaker 12: here's how you should think about Qualcom market share in general.
Speaker 12: One thing about the company, and it's been the history
Speaker 12: of the company, everything that we set ourselves to do.
Speaker 1: The track record exactly not bad.
Speaker 12: When we entered the Wi Fi or, we became number one,
Speaker 12: we entered the rfron end, we became number one automotive,
Speaker 12: we said we're going to go into automotive. I think
Speaker 12: our story there is very very good. We're becoming the
Speaker 12: prefer partner of the industry. We said we're going to
Speaker 12: enter the metaphorse we have every single design. Now we're
Speaker 12: saying we're going to enter the PC. And we started
Speaker 12: off the gate with the leadership in the product. So
Speaker 12: you know, as we continue to execute, time is going
Speaker 12: to show that we can gain share and can be
Speaker 12: a significant player. After that, it's going to be industrial
Speaker 12: as we continue to execute on the growth diversification of
Speaker 12: the company.
Speaker 4: Fart intwo call com CEO Cristiano Aman, We thank you
Speaker 4: for bringing the energy today.
Speaker 1: Thank you great talking to both of you.
Speaker 3: All right, let's get some news in the world of
Speaker 3: private markets and venture. Blood testing company carry Us raised
Speaker 3: one hundred million dollars in a new funding round from
Speaker 3: investors led by existing investor Coastal Adventures, alongside five AM
Speaker 3: Ventures and Glide Healthcare. The company declined to give its valuation,
Speaker 3: but says that we use the cash to get its
Speaker 3: technology for detecting hard to identify infections in to more hospitals.
Speaker 3: Let's stick with all things private venture and startups and
Speaker 3: bring in CRV general partner Max Gaza on today's VC
Speaker 3: Spotlight producer Extraordinairy Marguerite Gallery, and he's been crunching the
Speaker 3: numbers on IPO activity. You don't really need to crunch
Speaker 3: the numbers because we've been quite busy of late, and
Speaker 3: we had a pocket in September. Your affirm that invests
Speaker 3: at the seed and Series A stage. What are the
Speaker 3: numbers that you crunch when activity is happening in the market.
Speaker 1: Yeah, well, great to be back.
Speaker 13: Last time I was here in January, we mentioned that
Speaker 13: we counted over one hundred companies that we felt were
Speaker 13: ip already, and I'm glad to report that that number
Speaker 13: is still holding strong. We've seen also some great activity
Speaker 13: in the public markets with Rubric going out first software
Speaker 13: IPO of twenty four. We saw some strength with the
Speaker 13: Sterei Labs, which is an AI infrastructure hardware play arm held.
Speaker 1: Up post lock up.
Speaker 13: These are all data points that would suggest that not
Speaker 13: only is the IPO market strong, but the M and
Speaker 13: A market is thawing as well. So with Hashi Corporate
Speaker 13: IBM and talks of informatic and salesforce, we feel that
Speaker 13: the big thoughts here were very optimistic for twenty four
Speaker 13: and into twenty five.
Speaker 3: And the reason that we want to have you on
Speaker 3: the show, and I guess that you give yourselves a
Speaker 3: little put on the back is that you identify the
Speaker 3: names early that go on to be successful. It seems
Speaker 3: to me though, like even pre seed, but seed in
Speaker 3: Series A is becoming a very competitive space in the
Speaker 3: context of AI.
Speaker 1: Absolutely.
Speaker 13: You know, look, AI is one of those things that
Speaker 13: people are focused on.
Speaker 1: Every VC in the valley is looking at AI.
Speaker 13: We think of it not just as an innovation from
Speaker 13: a technology point of view, there is a technology you know,
Speaker 13: step function and change there, but also from a business
Speaker 13: model point of view. So let me give you an example.
Speaker 13: Most software today is sold via license model. Whether you
Speaker 13: use it or not, you pay for the license and
Speaker 13: you know that's that, or it's a seat based model
Speaker 13: where it's per set. What if that business model changes
Speaker 13: to a per consumption basis, so you pay for the
Speaker 13: for every task that the AI completes. If that holds,
Speaker 13: we're at the dawn of a new era in business
Speaker 13: software because it's a transformational shift and how software will
Speaker 13: be sold and AI is enabling that. So we're not
Speaker 13: just looking at it from a technology point of view,
Speaker 13: but a business model innovation point of view. At the
Speaker 13: earliest stages, it's really hard to see that so we're
Speaker 13: betting on founders that think in those big terms, and
Speaker 13: we've been doing that for fifty three years.
Speaker 2: Max.
Speaker 4: What's therefore the viewpoint when you bet on those founders
Speaker 4: of their exit right now? Because what we're seeing with
Speaker 4: AI startups is they're having these increasingly interesting partnerships with
Speaker 4: big legacy businesses that the likes of dwn Lobe are
Speaker 4: currently saying are actually going to be the winners of
Speaker 4: the artificial intelligence revolution. Do you think it's all about
Speaker 4: M and A when it comes to these AI bets.
Speaker 7: Well, Carolyn, it's a good, great question.
Speaker 13: If you look historically at the VC market, most of
Speaker 13: the exits have happened via m and A. Right, there's
Speaker 13: a few giant winners and the power to laws take
Speaker 13: effect with IPOs, but MNA is really important, which is
Speaker 13: why it's important for us and encouraging for us to
Speaker 13: see this big thaw that's happening. To your other question.
Speaker 13: Right now, everyone's focusing on the Magnificent seven and these
Speaker 13: big companies and the scale that they have because there's
Speaker 13: so few public AI companies, right, we think that there's
Speaker 13: hundreds to come in the in the next decade or so.
Speaker 13: And I think that the shift will focus away from
Speaker 13: those concentrated winners today to some of the startups that
Speaker 13: we're seeing in the market, the private markets that are
Speaker 13: coming behind that.
Speaker 4: Two, of course, keep on raising fund to keep on
Speaker 4: allocating to the founders the very early. You've got to
Speaker 4: have this proof of track record, which you have. And
Speaker 4: I'm just interested as to if you've got any companies
Speaker 4: that you're thinking about to get out the gates, how
Speaker 4: you bracing yourself for your own IPO pipeline.
Speaker 7: It's a great question.
Speaker 13: A few things have to happen for an IPO to occur,
Speaker 13: and they happen often very far in advance. So one
Speaker 13: is often up leveling of leadership teams, right functional roles
Speaker 13: in finance, in marketing and sales and product et cetera.
Speaker 13: So we see that we see cap table fortification with
Speaker 13: the introduction of crossover investors that are both private and
Speaker 13: public investors that come on.
Speaker 3: In Nvidia is big one doing at the moment.
Speaker 1: That's right.
Speaker 13: And you know, the other thing that we see, which
Speaker 13: is probably the strongest leading indicator is the number of
Speaker 13: independent board searches. Through our executive recruiting partners, we've been
Speaker 13: hearing the uptick in that and we feel at firsthand
Speaker 13: as well, and with many searches that are going on
Speaker 13: with our portfolio, a lot of companies are getting ready
Speaker 13: for this and it's happening, and it's you know, behind
Speaker 13: the scenes, but it will happen.
Speaker 4: Ah, and boy do we brace ourselves for it. CRV
Speaker 4: general partner Maxkazor, thank you so much for spending time
Speaker 4: with us talking all things exits. Meanwhile, coming up, let's
Speaker 4: talk at AB and B revealing a new once in
Speaker 4: a lifetime stay and experience category.
Speaker 2: I bring you all the details. Next, there's some good pictures.
Speaker 2: There's a bluebog technology.
Speaker 3: The world's biggest record label, Universal Music, said it's entered
Speaker 3: a new licensing agreement with TikTok, ending a dispute that
Speaker 3: led to its artist songs being pulled from the social
Speaker 3: media platform Bluemos, Alex Brinka here, Rihanna Drake joining Taylor
Speaker 3: Swift back on the Tiktoks give me the deats.
Speaker 14: They are Since February, basically the music from artists under
Speaker 14: You and g have disappeared from user speeds and from
Speaker 14: the artists themselves because this deal was not e play.
Speaker 14: But basically overnight. There's a new deal in place that
Speaker 14: would give improved payments for UMG songwriters and artists, give
Speaker 14: them access to TikTok shop, the e commerce capabilities, and
Speaker 14: the two companies also say that they will work together
Speaker 14: on promotional campaigns around new songs and records, and that
Speaker 14: there's one more kind of piece to this whole story
Speaker 14: that was a big concern for UMG and a lot
Speaker 14: of kind of protect creators, and that's to do with AI.
Speaker 14: This agreement does say that TikTok will expand its protections
Speaker 14: when it comes to AI, because certainly songwriters are worried
Speaker 14: about not only kind of fake songs being created, fake
Speaker 14: videos and images being created, but also the fact that
Speaker 14: it's been kind of a wackable process on TikTok to
Speaker 14: get those taken down. So exciting move for them, and
Speaker 14: I'm sure that a lot of the users who had
Speaker 14: the sounds kind of disappear overnights and their songs and
Speaker 14: the trends they were doing will be excited to get
Speaker 14: those songs back to less mutes.
Speaker 4: Well thank you from New Meg's Alex BURINCA brilliant get
Speaker 4: all the assessment but also going viral Airbnb announcing is
Speaker 4: the latest category Icons, a new vertical for extraordinary experiences,
Speaker 4: hosted by the greatest names in music, film, television, art, sports,
Speaker 4: and more joining us now at the details blue makes
Speaker 4: Natalie Lung, I mean, is this just a bit of
Speaker 4: good pr or is this actually going to bring in
Speaker 4: real money for Airbnb?
Speaker 5: Right? This is definitely part of their marketing expense. It's
Speaker 5: expensive to build the house from up for example, from
Speaker 5: scratch and placing it in New Mexico and hosting it
Speaker 5: up a fifty of a crane fifty feet off the ground.
Speaker 5: So this is definitely a marketing expense for them, but
Speaker 5: they hope to be able to drive more traffic new users.
Speaker 5: A user account is required to sign up and also
Speaker 5: reach new audiences abroad.
Speaker 3: This was a big thing that played out on social media,
Speaker 3: so they tried to do the thing from the movie up,
Speaker 3: but it was with a crane. And then I saw
Speaker 3: all these founders and people associated with Airbnb, pat Brian
Speaker 3: Chesky on the back. For him, this seems like a
Speaker 3: bit of a personal project, Natalie.
Speaker 5: Right, It is definitely a personal project, something that he
Speaker 5: has done long long before this launch. They put an
Speaker 5: Ikia home up on Airbnb, and of course last year
Speaker 5: there was the Barbie Dreamhouse, which went viral. So this
Speaker 5: is really him taking Airbnb beyond some of the core
Speaker 5: experiences that we all come to know. He wants people
Speaker 5: to be inspired by these homes.
Speaker 4: We'll see he starts wanting to get in on all
Speaker 4: of these one of the kind experiences. Natalie n thanks
Speaker 4: for bringing us a pretty fun story to end, as
Speaker 4: long as you're not afraid of heights or something.
Speaker 2: Meanwhile, that does it for this edition of Bloomberg Technology.
Speaker 3: Yet, what a big show, and I imagine there will
Speaker 3: be another big show in twenty four hours time because
Speaker 3: Apple Reports after the bell recap, all the conversations, so
Speaker 3: many stories, great Bloomberg reporting on the podcast. We're putting
Speaker 3: the pod on Apple's Spotify, iHeart and the Bloomberg platforms.
Speaker 3: And once again, just a big thank you from Karen
Speaker 3: and so many of you reach out saying that you
Speaker 3: listen to the show in podcast form and we'll keep
Speaker 3: bringing you that part every day. Stay tuned. So much
Speaker 3: more to come, but one day left in the week.
Speaker 3: It's almost Friday. Gang from San Francisco and New York City.
Speaker 3: This is Bloomberg technology,