Speaker 1: From Marhard where Innovation of Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline Hyde a Bloomberg's World Headquarters in New York
Speaker 3: and I met Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 5: Coming up. We'll bring you the latest updates from the
Speaker 5: Middle East.
Speaker 3: That's after Iran launched missiles and roans over the weekend
Speaker 3: into Israel, the US, and Europe.
Speaker 5: They ramp up calls for Israeli restraint.
Speaker 6: Full coverage ahead plus shares of Tesla slump amid the
Speaker 6: company's plans to slash ten percent of its global workforce,
Speaker 6: prompting senior executives to depart the company.
Speaker 4: We had the details and Apple.
Speaker 3: It faces its worst liphone slump since Covid as a
Speaker 3: company faces increased.
Speaker 5: Competition in China.
Speaker 3: We'll discuss that and so much more throughout this hour,
Speaker 3: but first we turn our attention to a complex geopolitical
Speaker 3: and macroeconomic picture that's being painted today.
Speaker 5: Now.
Speaker 3: The pullerhead really is the fact that Naslak is currently
Speaker 3: back in the red. We were managing to push higher
Speaker 3: on stocks but certainly the bond market field or full
Speaker 3: effect of actually a stronger, more resilient macroeconomic picture in
Speaker 3: the United States coming from retail sales that were far
Speaker 3: faster than had been anticipated. But on the flip side
Speaker 3: is geopolitics is a concern about, of course, an unprecedented
Speaker 3: attack coming from Iran to Israel and what that really
Speaker 3: means in terms of actually dialing up or cooling of
Speaker 3: some of those geopolitical anxieties, notably oil is on the
Speaker 3: lower side that drags the Bloomerg commodity index down. But
Speaker 3: remember there's actually added sanctions on Russian movement of metals
Speaker 3: into the LME at the moment, and that's been moving
Speaker 3: around aluminium and some other.
Speaker 5: Key metals to be keeping it on.
Speaker 3: So complex going on in the commodity space as well,
Speaker 3: but let's move it on as we try to really
Speaker 3: anticipate which way risk assets are going to be going.
Speaker 3: One that was in full effect because ultimately it was
Speaker 3: the when you ascasset that was really able to be
Speaker 3: traded at the time of those initial reports, as many
Speaker 3: had anticipated an attack coming from Iran into Israel. But
Speaker 3: we see the volatility that was in display when it
Speaker 3: came to bitcoin on Saturday afternoon plumbting.
Speaker 5: We now recover some of that.
Speaker 3: We're still off by more than four percent over the
Speaker 3: course of a three day trading period ed. We're currently
Speaker 3: at sixty three nine hundred of thereabouts.
Speaker 6: But what are you watching on the micro Tesla? It's
Speaker 6: a big one. I broke the story this morning that
Speaker 6: Drew Baglino, who led powertrain and energy at Tesla, one
Speaker 6: of only four named executive officers, has resigned and left
Speaker 6: the company. The stock near session lows down three point
Speaker 6: three percent. We also confirmed Elon Muskers told staff that
Speaker 6: ten percent of the workforce will be cut in pursuit
Speaker 6: of cost reduction, productivity, and what he called duplicate rolls.
Speaker 6: We'll get all the details later from the Bloomberg team.
Speaker 6: The other big one is Apple. IDC data showed shipments
Speaker 6: of about fifty million iPhones in the first quarter, but
Speaker 6: that's down ten percent year on year.
Speaker 4: Now that's third.
Speaker 6: Party data, and it's not just an Apple story. With
Speaker 6: the stockdown eight tens of one percent, it's a story
Speaker 6: about China's domestic smartphone makers having success growing market share
Speaker 6: in a really key market. We will speak to bloom
Speaker 6: those Mark German because it's complicated, but Apple is lower,
Speaker 6: whether that's cause or not.
Speaker 4: Who knows.
Speaker 6: A lot going on in the world of technology this morning,
Speaker 6: but also a lot of news around the world.
Speaker 3: Yeah, and let's get back to it, ed, because Iran's
Speaker 3: attack on Israel is what many are talking of. Israel
Speaker 3: and its allies intercepted the overwhelming majority of more than
Speaker 3: three hundred missiles drones fired by Iran. Joining US now
Speaker 3: from Tel Aviv is Our Israel. You're O chief and
Speaker 3: senior editor Ethan Rohner, and we thank you for your time.
Speaker 5: Ethan.
Speaker 3: Well, probably how is it being felt and digested in
Speaker 3: Israel right now?
Speaker 7: Yeah, that's a great question.
Speaker 8: I mean, I think that the overall senses of relief because,
Speaker 8: as you said, of three hundred and fifty projectiles, including
Speaker 8: one hundred and twenty ballistic missiles that come here in
Speaker 8: eight or ten minutes from around the vast majority, the
Speaker 8: overwhelming majority, were stopped before they got here. They were
Speaker 8: about half a dozen that got through to a military
Speaker 8: base in Israel. They didn't do much damage, but they
Speaker 8: did hit and so there's a kind of a mixed
Speaker 8: feeling of well, we got them, we don't nobody was killed.
Speaker 8: But but there's a seven year old girl fighting for
Speaker 8: a live shrapnel that hit her in the south. But
Speaker 8: the general senses this could have been much much worse.
Speaker 8: So we can we Israel can take its time to decide.
Speaker 5: What to do next.
Speaker 8: But there is a a rubicon that's been crossed. I mean,
Speaker 8: we we have for the very first time in nearly
Speaker 8: four decades as Israel taken direct hits from missiles of
Speaker 8: this kind, and the first time ever in Thish what
Speaker 8: has been a shadow war between Israel and Iran emerged
Speaker 8: from the shadows. So we're in a new era, and
Speaker 8: it's not clear what that means.
Speaker 6: Ething late to the program, we're going to talk a
Speaker 6: little bit about the sort of coalition response. You know,
Speaker 6: Israel made those interceptions in conjunction with the United States
Speaker 6: and the United Kingdom. I'd also like to learn a
Speaker 6: little bit about the kind of operational response on the
Speaker 6: ground in Israel, what it is happening in the streets,
Speaker 6: what the government is telling its citizens of where we stand.
Speaker 8: So at the moment, in fact, there is a sense
Speaker 8: of calm. The government issued a statement that they were
Speaker 8: going to reopen the schools and the sort of day
Speaker 8: camps that they had closed on Saturday night in anticipation
Speaker 8: of this attack. So everything is back to normal, I
Speaker 8: think it's fair to say. And by the way, the
Speaker 8: Iranians also reopened their airspace, so there is no sense
Speaker 8: that there's going to be a continuation of this war
Speaker 8: in the coming three days. On the other hand, the
Speaker 8: Israeli cabinet met last night and met again tonight in
Speaker 8: order to discuss what kind of sponse it needs to have,
Speaker 8: and those on the far right are urging a very
Speaker 8: vigorous response, a crushing attack, as they put it. It's
Speaker 8: not clear if they're going to have their way. It
Speaker 8: doesn't seem so, because it does feel that the embrace
Speaker 8: of the United States, the United Kingdom in France of
Speaker 8: Israel at this point has been a warm bath for
Speaker 8: Israelis after many weeks of hostility because of their war
Speaker 8: in Gaza. At the same time, you see, the Israelis
Speaker 8: have two audiences. They worry about these that we just
Speaker 8: talked about, and then their enemies that it's just Balahamas
Speaker 8: and Iran, and they fear that any lack of reaction
Speaker 8: will be perceived as weakness, and so there is a
Speaker 8: sense that they must react.
Speaker 7: The question is when and.
Speaker 6: How Bloomberg's even brunna on the ground until they're really
Speaker 6: grateful for your time on the ground reporting as well,
Speaker 6: and we have a big audience in this show in
Speaker 6: Europe and the emir regionable broadly. I point out the
Speaker 6: easy Jet, one of the airlines is an example, has
Speaker 6: canceled flights to his through April twenty first, so there's
Speaker 6: a kind of business impact.
Speaker 4: There as well.
Speaker 6: Let's go from Israel to Washington, DC and bring in
Speaker 6: Bloomberg National security reporter Nick Wadhams. Nick I was talking
Speaker 6: to Ethan about the kind of coalition response that United
Speaker 6: States was involved. The United Kingdom was involved in part
Speaker 6: because Iran had given heads up almost on their actions.
Speaker 6: My understanding is Biden has been in touch with the
Speaker 6: Israeli government quite frequently. What we know from the US
Speaker 6: side at this stage.
Speaker 9: Well, what we're hearing from the administration is essentially that
Speaker 9: they want Israel to put the brakes on any sort
Speaker 9: of response. So we've been told the view from the
Speaker 9: White House is listen, Israel, take the win. Your air
Speaker 9: defenses did an extraordinary job deflecting and rebuffing about ninety
Speaker 9: nine percent of those incoming drones and missiles, and there
Speaker 9: is no need for an immediate response. Obviously, as Ethan
Speaker 9: just said, the pressure on Prime Minister Benjamin Netnya, who
Speaker 9: is coming very much from the other direction as well.
Speaker 9: So looking ahead for the next few days, what we're
Speaker 9: really going to see here is a good reflection on
Speaker 9: the limits of US leverage over Prime Minister Netnya, who
Speaker 9: President Biden could not have been more clear about what
Speaker 9: he wants.
Speaker 4: To see next, which is de escalation.
Speaker 9: The US does not want to be pulled in deeper
Speaker 9: into this conflict. They don't want this to turn into
Speaker 9: even a bigger conflagration, and they want Prime Minister Benjamin
Speaker 9: Netnyah to hold fire. Whether he listens to that advice
Speaker 9: is another thing entirely.
Speaker 3: For now, rightly or wrongween the market, and that is
Speaker 3: often what we focus in on here.
Speaker 5: A Boomberg has.
Speaker 3: Been deeming this to be something that's containable. As of
Speaker 3: the moment, Nick, where do we have to align our
Speaker 3: sites now? Is it thinking of the next statement that
Speaker 3: we do get from Biden. We anticipate a conversation a
Speaker 3: press conference as soon as twelve o'clock that's right.
Speaker 9: So I mean, will really be looking at what the
Speaker 9: tone is from the president and from other officials in
Speaker 9: the administration. Are they projecting unity? Is there more sense
Speaker 9: of those fractures that had emerged in recent weeks with Israel?
Speaker 9: Do we have a sense that these two governments are
Speaker 9: diverging in their perspectives on what the outcome will be here?
Speaker 9: I mean, the attack by Iran could have been so
Speaker 9: much worse. I think you're seeing in the market in
Speaker 9: some ways a sense of relief that Israel repelled those
Speaker 9: As Ethan mentioned, there had been no deaths and fairly
Speaker 9: limited destruction. But what happens if Iran decides to respond
Speaker 9: yet again in response to a potential Israeli retaliation. So
Speaker 9: there's a lot of fear that there could be an
Speaker 9: escalatory spiral that gets to a situation that neither side
Speaker 9: can control.
Speaker 3: N it Wardens, thank you for giving us the context
Speaker 3: and keeping us up to speed.
Speaker 4: Let's talk about Tesla.
Speaker 6: The ev maker is going to cut ten percent of
Speaker 6: its workforce after a slowdown in demand, Elon Musk preparing
Speaker 6: the company for the next phase of growth.
Speaker 4: We also reported this.
Speaker 6: Morning that two key executives have left Tesla in the
Speaker 6: last twenty four hours. Drew Baglino, who's been at Tesla
Speaker 6: for eighteen years and led everything to do with powertrain
Speaker 6: energy storage, resigned, is what I'm told by a source,
Speaker 6: and he confirmed that later on in a post. Rowan
Speaker 6: Betel is basically the public policy chief in many ways
Speaker 6: the kind of devacta facto voice piece of Tesla on
Speaker 6: social media. He has also left the company. Let's bring
Speaker 6: in Bloombog's Global Autoza Craig Trudell.
Speaker 4: Craig.
Speaker 6: It was a bit of a long night or an
Speaker 6: early morning, depending on where you were around the world,
Speaker 6: but let's start with Drew Baglino, one of only four
Speaker 6: named executive officers at Tesla. I thought this was a surprise,
Speaker 6: and what sources told me is that he resigned. He
Speaker 6: wasn't laid off off as part of the ten percent
Speaker 6: KA What else do you unite?
Speaker 10: Yeah, I know less than you, you know, but I
Speaker 10: do have to sort of speculate about, you know, the
Speaker 10: extent to which this may be about, you know, a
Speaker 10: difference of opinion on the direction of the company. This
Speaker 10: you know, this these this news comes shortly after reports
Speaker 10: that the company is you know, maybe putting aside its
Speaker 10: work on a cheaper vehicle and focusing efforts on a robotaxi.
Speaker 10: I think Elon Musk, you know, at first called that
Speaker 10: a report by Reuter's false, and then you know, seem
Speaker 10: to sort of lend credence to it by scheduling an
Speaker 10: introduction of a robotaxi months from now, which you know,
Speaker 10: sort of suggests that you know, he's focused on that,
Speaker 10: and you know that raises questions about whether whether Baglino
Speaker 10: thought that's the right move, whether Rohan Patel thinks that's
Speaker 10: the right move. After all, he's going to be the
Speaker 10: person or would have been the person in Washington who
Speaker 10: would have to sort of justify that to regulators, and
Speaker 10: whether or not Tesla is really ready to put that
Speaker 10: forward is a question after years and years of the
Speaker 10: company talking about having robotaxis, or at least Musk talking
Speaker 10: about having robotaxis yes, when they haven't.
Speaker 3: All of this is sort of trying to be a
Speaker 3: level of prioritization or anxiety that is among investors at
Speaker 3: the moment. Many would say, Okay, cutting down on expenses,
Speaker 3: on costs is something that is necessary in the context
Speaker 3: of EV sales. More broadly, Craig. What could be therefore
Speaker 3: be really unnerving the investor.
Speaker 5: Base right now when you have SVPs leaving. Is it
Speaker 5: more the.
Speaker 3: Concern about the handing over of power ultimately any sort
Speaker 3: of fact that Musk currently leads and has done since
Speaker 3: two thousand and eight.
Speaker 10: Yeah, I mean, I think it's this concern about, you know,
Speaker 10: not knowing what the plan is, right, and this is
Speaker 10: not just a store that has only surfaced lately.
Speaker 11: You know.
Speaker 10: We go back to the Walter Isaacson biography months ago,
Speaker 10: and one of the more compelling bits within that book
Speaker 10: was this idea that there was real difference at the
Speaker 10: top of Tesla as to whether or not, you know,
Speaker 10: they should design this next generation vehicle with or without
Speaker 10: a steering wheel.
Speaker 7: And you had.
Speaker 10: Within that book, you know, this really compelling section of
Speaker 10: you know, executives having to kind of talk Musk out
Speaker 10: of this idea that they could just you know, design
Speaker 10: the car without a steering wheel and count on the
Speaker 10: idea that the technology was ready.
Speaker 7: And I think that's something.
Speaker 10: That you know, we've seen for for some time, This
Speaker 10: idea that you know, Musk has has really sort of
Speaker 10: been out on a limb in terms of how quickly,
Speaker 10: this company will be able to put self driving cars
Speaker 10: on the road. And what other executives have said, including
Speaker 10: you know, engineers that have had to testify in lawsuits
Speaker 10: related to people losing their lives because they too much
Speaker 10: trust into Tesla's driver assistance system. So this is something
Speaker 10: that's really tricky if you're an executive who has to
Speaker 10: kind of, you know, square that circle.
Speaker 6: Yeah, Craig, quickly, I think let's just re recap the basics.
Speaker 6: Ten percent of the workforce to be cut. How many
Speaker 6: people is that?
Speaker 4: Where is it?
Speaker 10: Yeah, So this is a company that ended last year
Speaker 10: with over one hundred and forty thousand people. So assuming
Speaker 10: this is company wide, we know it's a global according
Speaker 10: to Musk's email to staff, that would be more than
Speaker 10: fourteen thousand people. We're careful on that because Musk has
Speaker 10: been a little bit all over the place with his
Speaker 10: messaging in the past when he's made job cuts.
Speaker 3: Craig Trudell, we thank you so much. It's just been
Speaker 3: a phenomenal amount of reporting coming from both of you, gentlemen,
Speaker 3: and so thank you very much for setting the context. Meanwhile,
Speaker 3: coming up, Apple iPhone shipments falling ten percent in the
Speaker 3: March quarter, making it the worst sales slump since COVID.
Speaker 3: We're going to bring you the details next. Another key
Speaker 3: points drag on these benchmin Edward. You're watching on the
Speaker 3: micro level.
Speaker 4: Two little bit of MNA.
Speaker 6: Monday, Bloomberg reported that sales forces, according sources, looking at
Speaker 6: a deal for Informatica, and it's all about data capabilities.
Speaker 6: The stock down more than five percent on it. The
Speaker 6: street kind of likes it, but it's a deal. We're
Speaker 6: waiting on confirmation on Bloomberg said it could be reached
Speaker 6: this month, so let's stay tuned for that as we go.
Speaker 6: This is Bloomberg Technology.
Speaker 3: Apple, it's facing its worst iPhone slump since COVID as
Speaker 3: competition in the Chinese market really does heat up now.
Speaker 3: Third quarter shipments are apparently sliding worse than expected, almost
Speaker 3: ten percent, as the tech giant delivered fifty point one
Speaker 3: million phones, falling shy of Anna estemates of fifty one
Speaker 3: point seven mins. And Bloomberg's Mark Gumman joins us now
Speaker 3: with the context of who's providing us this data and
Speaker 3: what it means about Apple versus the other competitors.
Speaker 11: Yeah, so itc puts up their quarterly reports on smartphone shipments,
Speaker 11: and of course these are their analysis based insights into
Speaker 11: how many units for ships, so they don't know for sure.
Speaker 11: We'll get a better idea on May second, when Apple
Speaker 11: announces its earnings report, and then we'll get a better
Speaker 11: idea from the other phonemakers when they announce their earnings reports.
Speaker 11: But IDC is usually on target in terms of a
Speaker 11: general range or in terms of the overall theme, and
Speaker 11: the overall theme this time around is a nearly ten
Speaker 11: percent shipment decline on an annual basis for Apple. It's
Speaker 11: the most significant decline of any of the phonemakers they track.
Speaker 11: It indicates that Samsung is back in the number one
Speaker 11: global smartphone sales position, and it indicates that sales from
Speaker 11: some Chinese brands, one called Transition into particular, within over
Speaker 11: eighty percent year of a year sales increase, are really
Speaker 11: taking steam from Apple at this point. So if I
Speaker 11: were an Apple shareholder, it would be a little bit
Speaker 11: concerning to see the slump going on right now for
Speaker 11: the company, and it seems like most of it is
Speaker 11: China based, so we'll have to wait until May two
Speaker 11: to know for sure.
Speaker 6: However, all right, I believe most Mark, German chief correspondent
Speaker 6: covering Apple.
Speaker 4: Thank you.
Speaker 6: Let's keep the conversation going and bringing in Fionas and
Speaker 6: Kotta now who's senior market analyst at City Index, for
Speaker 6: her take on Apple, and Mark summed up the IDC
Speaker 6: data very well. You either put emphasis on the Apple
Speaker 6: specific data or you put emphasis on the market share
Speaker 6: data coming from the Chinese handset makers and how they
Speaker 6: had gains in sales. Where does your mind goes to first, Fiona, do.
Speaker 4: You know what?
Speaker 1: I think it's a really good idea to actually look
Speaker 1: at these two bits of data together because if you've
Speaker 1: got Apple falling and yet global smartphone shipments elsewhere increasing,
Speaker 1: I think that makes it an even more dramatically difficult
Speaker 1: position and picture for Apple. I mean, it really does
Speaker 1: highlight I think the extent of the problems that the
Speaker 1: Apple is facing, particularly surrounding the iPhone.
Speaker 5: And I think I mean, obviously.
Speaker 1: China here is a very big story. There is a
Speaker 1: lot of competition that Apple is facing in China.
Speaker 5: But I think there's also another side to this as well.
Speaker 1: I just feel that Apple is really behind just as
Speaker 1: Sara as Innovation is concerned, as Sarah's AI is concerned
Speaker 1: and all that's also playing out in the share price,
Speaker 1: which has really had a tough start to twenty twenty.
Speaker 3: Four two point seven trillion dollar market cap still but
Speaker 3: as along with Tesla are two key stories today, these
Speaker 3: two names in this so called Magnificent seven have been
Speaker 3: anything but magnificent. It feels like in the last month
Speaker 3: or so, certainly beginning of this year, Fiona, can Apple
Speaker 3: win back yours and other investors' hearts and minds if
Speaker 3: they are going to be able to show, look, we've
Speaker 3: got AI within the M four process, that we're going
Speaker 3: to be able to have it and you know, sometimes
Speaker 3: they're known to be a little bit slower but getting
Speaker 3: it right.
Speaker 5: Yeah, that's right.
Speaker 1: I mean, definitely a little bit slower. They feel like
Speaker 1: they're very slow to the AI party right now, and
Speaker 1: that's been sort of you know, punished by They've been
Speaker 1: punished by investors, and that I think, you know, has
Speaker 1: been part of that sell off that we've seen. I
Speaker 1: think there is a potential for this to turn around.
Speaker 1: I don't think this is the end of the line
Speaker 1: at all for Apple. I think, you know, we could
Speaker 1: see a good turnaround as long as they get their
Speaker 1: AI products really spot on. I think also sort of,
Speaker 1: you know, the geographical diversification into India is an area
Speaker 1: that again could be very interesting for Apple as it
Speaker 1: moves away from China. But at the end of the day,
Speaker 1: China is a massive in market and it's also a
Speaker 1: very important market. So it's going to be very interesting
Speaker 1: to see whether Apple can actually turn this around quickly
Speaker 1: without any support from really from China.
Speaker 6: Yeah, if you last night, Caroline and I regroup with
Speaker 6: a team and we're like, you know, what's the story
Speaker 6: going to be Monday? It looked like Apple, we had
Speaker 6: the geopolitics of what's happening in the Middle East, and
Speaker 6: then Tesla, and I'm trying to find a commonality between
Speaker 6: all of them. I think that the commonality is should
Speaker 6: we be talking more about the health of the global
Speaker 6: economy right now, particularly for consumer facing technology?
Speaker 5: Yes, exactly.
Speaker 1: So that's a really really important point here as well.
Speaker 1: I think the macro backdrop for these stocks is just
Speaker 1: not ideal right now. You know, if we have a
Speaker 1: look at where we are speaking as far as macro
Speaker 1: picture is concerned, it's not smooth sailing at all.
Speaker 5: For the consumer.
Speaker 1: You know, we've got the prospect of the Federal Reserve
Speaker 1: keeping interest rates high for longer after we've seen those
Speaker 1: hotter than expected inflation figures last week. But then saying that,
Speaker 1: we've also seen that the retail sales in the US
Speaker 1: are holding up. But I think, you know, when you've
Speaker 1: got financing costs so high in the US, that does
Speaker 1: obviously impact those that are purchasing cars their ability to
Speaker 1: be able to get financing or even desire to get financing.
Speaker 1: But also when you've got squeeze on households, you know,
Speaker 1: big expensive items such as the latest iPhones are going
Speaker 1: to be perhaps items which aren't necessarily top of the list.
Speaker 1: So you know, I do think the macro backdrop has
Speaker 1: a lot to play here as well.
Speaker 3: If you if a client cause right now, do you
Speaker 3: say take risks off the table or do you say
Speaker 3: stay in equities even though they're near records.
Speaker 1: Oh, it's a good question, you know. I think there
Speaker 1: is the potential for things to go higher if we
Speaker 1: start to see that inflation starts to cool again, if
Speaker 1: we start to see geographic geopolitical tensions start to calm again,
Speaker 1: then I think there is a potential there. But you know,
Speaker 1: we've got earning season. We're just ramping up earning season now,
Speaker 1: and I think that's going to be a good distraction
Speaker 1: for the market to be able to sort of have
Speaker 1: a look what's actually going on, to see whether the
Speaker 1: lofty valuations are actually supported by the fundamentals.
Speaker 3: Gold and Sachs example, managing to be and talking up
Speaker 3: AI City Index Senior market analyst Fiuna Sincota.
Speaker 6: Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
Speaker 5: Karen Hid right here in New York.
Speaker 3: Let's get you quick check on these markets, because there
Speaker 3: is a complicated context to what's going on in the
Speaker 3: markets right now. Whether it's a macro picture that shows
Speaker 3: resiliency in a US economy, those retail sales still showing
Speaker 3: real strength of a US consumer. And then the geopolitical
Speaker 3: situation we currently find ourselves trying to understand get a
Speaker 3: grips as to where we push forward with Israel and Iran,
Speaker 3: an unprecedented attack coming from Iran on Israel. Over the
Speaker 3: course of the weekend, NASDAK pushing back into the green.
Speaker 3: We had been in the red a little bit on
Speaker 3: the Nasdaq benchmark. More broadly, as some of the anxiety
Speaker 3: was still there to be seen within the markets. But
Speaker 3: Apple actually and indeed Tesla key points drags on the
Speaker 3: Nasdaq one hundred. More broadly, Apple ORF by six ten percent.
Speaker 3: We're worried about market share, particularly as competition builds up
Speaker 3: over in China, and the IDC numbers show that Apple
Speaker 3: has had its worth quarter in terms of sales since
Speaker 3: back in the COVID days. Tesla off by two point
Speaker 3: eight percent. This is down to your reporting ed more
Speaker 3: broadly on the fact that executives are leaving an indeed
Speaker 3: ten percent of the workforce looking to be removed as
Speaker 3: they really try and focus on a market that has
Speaker 3: been under pressure of late.
Speaker 5: That's off by two point eight percent.
Speaker 3: But we want to move on to what happened when
Speaker 3: it comes to risk assets over the course of the weekend.
Speaker 5: This is a geo political story that we need to
Speaker 5: shine a.
Speaker 3: Light on in terms of Bitcoin sold off hard on
Speaker 3: Saturday afternoon. Why it's one of the only risk assets
Speaker 3: that you were able to trade when you first learned that. Indeed,
Speaker 3: Iran has lived up to it to what it had
Speaker 3: been telling certain members of leaders across the world that
Speaker 3: they would indeed be looking to attack Israel, and we
Speaker 3: saw it hit some sixty one thousand dollars at one point.
Speaker 3: We're off by three point six percent over the last
Speaker 3: three trading days, and I think that's where we try
Speaker 3: to dissect there is ongoing volatility in an asset like
Speaker 3: crypto and bitcoin, But then where are the applications in
Speaker 3: the here and the now fabian assets here drill down
Speaker 3: on what he's seeing, is Managing director and global headed
Speaker 3: Digital Economy over at Moody's Ratings.
Speaker 5: You're someone who's been thinking about.
Speaker 3: The harving the so called fundamentals of bitcoin, the way
Speaker 3: in which we can adopt blockchain technology. But when you
Speaker 3: look at the volatility as it it's still not a
Speaker 3: store of value but ultimately a risk asset.
Speaker 5: How does that make your conversations harder?
Speaker 7: Well, it's actually very hard to guess the direction of
Speaker 7: travel for bitcoin overall, because when you think about it,
Speaker 7: it's the value of it is not driven by clear
Speaker 7: economic drivers and like other assets, so trying to predict
Speaker 7: the value of bitcoin is like trying to predict people's start.
Speaker 7: So it can be a lot of things. It could
Speaker 7: be the macro environment, could be the dro political environment,
Speaker 7: that could be many other things, And it could be
Speaker 7: the having that's coming up probably at the end of
Speaker 7: this week, which affects behaviors in particular people right now
Speaker 7: bidding up or down, and it creates more volatility, which
Speaker 7: is to be expected, and it has nothing to do
Speaker 7: with kind of the long term evolution of the price,
Speaker 7: but at least as of now you're seeing volatility.
Speaker 3: Yeah, many would say, look, if it's meant to be
Speaker 3: a store of value, if it's meant to be in
Speaker 3: some way fight against inflation, you would have thought, in
Speaker 3: a risk averse worrying time and geopolitics, you will be
Speaker 3: in bitcoin rather than setting off. But then people say, look,
Speaker 3: this is a risk asset that you could say, show
Speaker 3: your anxiety and for the course of the weekend. So
Speaker 3: when you say that you shouldn't be predicting it on
Speaker 3: a day to day basis, How then do you ensure
Speaker 3: that people are thinking about digitization, about real world assets
Speaker 3: becoming tokenized when people are still fundamentally trying to work
Speaker 3: out whether they should even be having one or two
Speaker 3: percent of their wealth in cryptocurrency.
Speaker 7: So that's a great question, and those are very different things.
Speaker 7: So I would say cryptocurrencies per se are essentially very speculative.
Speaker 7: People are bedding up down, as I said, with probably
Speaker 7: some upward pressure post having at least you believe that
Speaker 7: the past is a good proxy for the future. But traditionally,
Speaker 7: I would say it started with crypto. It started with
Speaker 7: bitcoin and ether and others, and then what we observed
Speaker 7: was that financial institutions and institual investors in general were
Speaker 7: very cautious traditionally about cryptocurrencies per se. So you started
Speaker 7: to see like a different segment of the digital finance ecosystem.
Speaker 7: There was more about using the technology underlying bitcoin and
Speaker 7: other assets and reusing the technology to repipe financial markets
Speaker 7: and the global economy to make it potentially better, faster,
Speaker 7: and more efficient. So crypto was mainly for retail investors,
Speaker 7: and the rest of digital finance mainly for institual investors.
Speaker 7: And that's really what we've been keeping an eye on
Speaker 7: and what we'll probably reshape financial markets going forward. Now
Speaker 7: what's interesting is recent the use of convergence in the
Speaker 7: sense that institutional investors, again that were cautious, would say
Speaker 7: instinctively it was not even regulation, even though it played
Speaker 7: a part of it. This suddenly decided that it was
Speaker 7: time to get into the crypto sphere as well, in
Speaker 7: particular with the approval of bitcoin ETFs recently, and so
Speaker 7: now you're seeing institutional investors in both that kind of
Speaker 7: took anization space, which has many benefits, and also in
Speaker 7: the crypto currency space where they were not involved for
Speaker 7: a long time A Fabian.
Speaker 6: I'm fascinated by the credit rating perspective on this. You
Speaker 6: talk about harving and then you think about the limit
Speaker 6: on supply long term infinitely of bitcoin, but in moments
Speaker 6: like the weekend, in geopolitical crisis or risk of sentiment,
Speaker 6: there's just clear evidence it's a liquid market. So if
Speaker 6: you are approaching this from a credit rating, the effective
Speaker 6: what is the conclusion you draw?
Speaker 7: All right, So let me clary if at one point
Speaker 7: here a cryptocurrency enough itself and become in particular, there's
Speaker 7: no credit risk associated with it. There's no promise associated
Speaker 7: with the cryptocurrency, so you can't really rate whether the
Speaker 7: issue of a cryptocurrency will meet its promise and if
Speaker 7: it doesn't, by how much you gould miss it, which
Speaker 7: is what credit ratings are intended to do. So there's
Speaker 7: no there's no credit risk persuit with the cryptocurrency. The
Speaker 7: reason we're keeping an eye on them and on Becoming
Speaker 7: in particular, is because you know that institutions out there, governments, corporations,
Speaker 7: and others are invested in cryptocurrencies. So we want to
Speaker 7: keep track of whether it could impact their credit risk
Speaker 7: because they have that asset in their portfolio, for instance.
Speaker 7: And we also want to keep track of things like
Speaker 7: market contagion risk that could affect one way or the
Speaker 7: other from the crypto world into traditional finance, or even
Speaker 7: the other around, from traditional finance into a crypto currency.
Speaker 7: So it is an asset class that is, you know,
Speaker 7: that's been very resilient. It has no credit risk per se,
Speaker 7: but indirectly others could see their credit risk profile affected
Speaker 7: by the movements in the bitcoin market.
Speaker 6: But there is a connection for secondary markets and the
Speaker 6: underlying technology, which is blockchain. That's something you look at
Speaker 6: very quickly. Explain your work.
Speaker 7: There, correct, So the financial markets are likely being reshaped
Speaker 7: by technologies that look like bitcoin, that look like that
Speaker 7: looks technologies that look like blockchain. Sorry, And the reason
Speaker 7: is that those technologies make processes a lot more efficient.
Speaker 7: So I'm going to give you an example to illustrate
Speaker 7: asset organization Caroline mentioned that a minute ago. It's really
Speaker 7: the process of turning real world assets into a digital
Speaker 7: stamp on a blockchain PLO. And because it's become a
Speaker 7: digital step, it's very easy to manage to trade. And
Speaker 7: those assets that are being tokenized could be anything from
Speaker 7: a bond or stock, or real estate or art, and
Speaker 7: so you transfer all the legal rights, in particular the
Speaker 7: ownership rights that come with the assets. You push that
Speaker 7: into that digital token that you can trade and manage efficiently.
Speaker 7: So it makes it a lot more efficient to manage
Speaker 7: and trade. In particular, you can settle super quickly, it
Speaker 7: could be even just a immediate or fraction of a
Speaker 7: second to settle payments on that blockchain. You can track
Speaker 7: and control everything that's happening, So it makes it better
Speaker 7: from a risk and complainants perspective, and also yes, really
Speaker 7: creates extra liquidity and new opportunities to find funding and
Speaker 7: to invest overalls. Think about a building, for instance, You
Speaker 7: can be very hard to buy that building alone. But
Speaker 7: if you can tokenize and cut these talkings into small
Speaker 7: trunks that many people can invest in suddenly, right, and
Speaker 7: it makes it as easier to access.
Speaker 6: FABI anastic deep analysis Managing director and global headed Digital
Speaker 6: Economy at Moeting's ratings.
Speaker 4: We're grateful with your time.
Speaker 6: Coming up on the show, we're going to be joined
Speaker 6: by Google Clouds lean more on the company's new training
Speaker 6: initiative in generative AI, cybersecurity and data analytics analytics. That's
Speaker 6: coming right up. Stay tuned. This is Bluebird Technology. Okay,
Speaker 6: quick talking tech. There's a lot going on in the news.
Speaker 6: First start, the BIND Administration plans to award Samsum as
Speaker 6: much as six point four billion dollars in grants.
Speaker 4: To increase chip production in Texas.
Speaker 6: This is part of US efforts to bolster domestic semiconductor manufacturing.
Speaker 6: The southern Korean company plans to invest more than forty
Speaker 6: billion dollars overall. Plus Entry and Horowitz close seven point
Speaker 6: two billion dollars for its newest set of funds on Friday,
Speaker 6: According to an Axios report, the firm beat its own
Speaker 6: fundraising goal of six point nine billion, with that capital
Speaker 6: aimed for its growth fund. And open Ai named the
Speaker 6: former president of aws's Japan to Down Nagasaki to spearhead
Speaker 6: its push to enterprise clients in the world's fourth largest economy.
Speaker 6: Open Ai is opening an office in Tokyo, is it
Speaker 6: releases a custom GPT form model.
Speaker 4: Catering to Japanese language users.
Speaker 3: Caroline, and let's get two more broadly in AI context
Speaker 3: right now, because we're all thinking about how to reskill
Speaker 3: and companies are thinking about how to reskal their own employees.
Speaker 3: At the moment, it's also been the focus of Oh
Speaker 3: Google Cloud, it's been thinking about its own role within this. Today,
Speaker 3: the company is announcing a new tech training initiative is
Speaker 3: in partnership with institutions like the US Department at the Treasury,
Speaker 3: like rax Space as well to prepare the workforce with
Speaker 3: generative AI skills and much more, a police to welcome
Speaker 3: only more global Google Cloud Consulting Vice President Lee, I'm
Speaker 3: really interested in this because you're working with the public sector,
Speaker 3: think of the Treasury Department and thinking of educational foundations
Speaker 3: and institutions as well as private companies.
Speaker 5: You're offering this all for free. Are you going to
Speaker 5: be charging? Where is the reward for you?
Speaker 12: Well, for us, we see that we're really in this
Speaker 12: enterprise AI era and we have the most amazing cloud technologies.
Speaker 12: But it's beyond the technology. It's also about the people
Speaker 12: and in my organization, we're responsible for skilling up the
Speaker 12: workforce and skilling up our customers, and we see this
Speaker 12: huge demand for skills and jobs. And if you look
Speaker 12: at the job data out there, you can see there's
Speaker 12: many hundreds of thousand, seven hundred thousand open roles for
Speaker 12: cloud analysts, five hundred thousand roles open for cybersecurity, and
Speaker 12: the World Economic Forum is quoting a million roles in
Speaker 12: AI coming up. So it's a huge, huge opportunity for
Speaker 12: individuals and we believe launching these programs we are today
Speaker 12: both and the on ramps to further education and the
Speaker 12: on remps to employment is our role in the middle
Speaker 12: of that ecosystem.
Speaker 6: Lead just mechanically. How does this work in simple terms?
Speaker 6: If you're working with a Treasury department.
Speaker 12: Yeah, So individuals can go over to Google Cloud Skills Boosts,
Speaker 12: they can register and take these training programs in data analytics,
Speaker 12: in cybersecurity, and in generative AI. When they pass those qualifications,
Speaker 12: they're able to then jump start the first step in
Speaker 12: the recruiting process for their partners. We've signed up with
Speaker 12: so far so US Department of Treasury, Jack Henry and
Speaker 12: rag Space. They enable them to get through that first
Speaker 12: round of interviews in a kind of consolidated way and
Speaker 12: move on through their process beyond that.
Speaker 3: Lee, What's really interesting some of the statistics the data
Speaker 3: showing that the C suite.
Speaker 5: Has a lot of anxiety about this.
Speaker 3: They're worried about the lack of talent that they can
Speaker 3: get their hands on and the roles you just articulated
Speaker 3: that still need to be filled. How much dare I
Speaker 3: ask does a C suite have the AI skills necessary
Speaker 3: at the moment?
Speaker 12: You think, Yeah, very interesting question. We also run c
Speaker 12: suite training programs here in Google Cloud, and we've been
Speaker 12: the takeup of those has been immense in the past
Speaker 12: six months. We're finding that is really progressing well. Now
Speaker 12: this initiative is much more about a kind of grassroots
Speaker 12: next generation of skills as people either coming into the
Speaker 12: workforce or looking to transfer from their existing roles. So
Speaker 12: we see a lot of people, you know, early in
Speaker 12: their career looking to reskill. These programs are really, really, really,
Speaker 12: really useful for that. The example I've got in my
Speaker 12: head is one where you imagine Caroline, you're just exiting
Speaker 12: the services, You're twenty five years old, you don't quite
Speaker 12: know what you're really do you know you could if only, hey,
Speaker 12: you could, you know, you could take these programs, you
Speaker 12: could move into cybersecurity and these are really really good jobs.
Speaker 12: The average, the median salary of a cybersecurity role in
Speaker 12: the US is one hundred and thirty five thousand dollars.
Speaker 12: You know, they are the sorts of roles that are
Speaker 12: game changing for families and their ecosystem.
Speaker 6: Lee, I get yours roots explanation, but public sector cloud
Speaker 6: is such competitive marketplace for you guys, right, Aws and
Speaker 6: Azure also putting a lot of emphasis on public sector
Speaker 6: spend does kind of literally grassroots training help you grow
Speaker 6: some market share there. Jensen one talks all the time
Speaker 6: about sovereign AI, but I'm yet to see any evidence that,
Speaker 6: you know, government departments know they've got to get the
Speaker 6: checkbook out.
Speaker 7: Well.
Speaker 12: I think what we're seeing is demand across the commercial sector,
Speaker 12: the public sector, and from individuals for skills. And you know,
Speaker 12: when I'm recruiting, you know, I'm looking for people that
Speaker 12: have energy and passion and googling this, but I'm also
Speaker 12: looking that they have the fundamental skills in AI or
Speaker 12: data or cybersecurity, whichever the role is. So these programs
Speaker 12: are really geared for the individual, and then obviously every
Speaker 12: organization needs to determine what skills they need in their group.
Speaker 6: Energy more, passion, lean more, Google Cloud consulting. Vice President
Speaker 6: appreciate the time of the conversation.
Speaker 4: Thank you.
Speaker 13: The President was very direct that this was a huge success,
Speaker 13: that Israel can be proud that it doesn't stand alone
Speaker 13: and that it has superior military capability. Iran utterly failed
Speaker 13: in what they were trying to achieve, and that that
Speaker 13: success alone sends a strong message to Iran and to
Speaker 13: the region about Israel's place there.
Speaker 6: That was US National Security Council Communications Advisor John Kirby,
Speaker 6: speaking earlier on Bloomberg Television. Were waiting for more remarks
Speaker 6: from the White House as President Biden holds a bilateral
Speaker 6: meeting with the Iraq's Prime minister joining us from Washington.
Speaker 6: Bloomberg's Balance of Power hosts Joe Matthew and Joe, I mean,
Speaker 6: the messaging from the administration to Israel has been take
Speaker 6: the win.
Speaker 4: What else are we hearing? That's right?
Speaker 2: Take the win, and if you do decide to do something,
Speaker 2: particularly if you want to overreach and attack Iran directly,
Speaker 2: the US may not.
Speaker 4: Be there to support you.
Speaker 2: Having seen the US provide concerted support over the weekend,
Speaker 2: it was quite remarkable, and this does require perspective, and
Speaker 2: on both sides of things. John Kirby is right, this
Speaker 2: was an extraordinary success. I'm not sure that all the
Speaker 2: parties involved. Even though it was capable to block ninety
Speaker 2: nine percent of the hardware that was thrown up in
Speaker 2: the air by Iran the other night, not a single
Speaker 2: UAV managed to infiltrate Israel. Of the thirty Iranian cruise
Speaker 2: missiles launched, none of them broke into their airspace. But look,
Speaker 2: it also requires some perspective on the other side as well.
Speaker 2: The people of Israel now know that Iran is willing
Speaker 2: to attack Israel directly, and they do believe in many
Speaker 2: quarters that that justifies a response. Certainly benjaminett Ya, who
Speaker 2: is hearing that from the right domestically here, the question
Speaker 2: is whether the White House can keep Benjaminettania, who in
Speaker 2: his government, restrained in whatever response it does pursue.
Speaker 5: Joe Matthew, we thank you so.
Speaker 3: Much, really important ability to break down the story and
Speaker 3: push it forward for us. Meanwhile, look, we're going to
Speaker 3: turn on focus to what's actually currently underway in New
Speaker 3: York because Donald Trump has arrived at the courthouse this
Speaker 3: morning where his first criminal trial is underway. She's expected
Speaker 3: to last six to eight weeks. Let's get the latest
Speaker 3: on the ground with re Meg's Kaylee lines. And it
Speaker 3: is another first for Trump.
Speaker 14: Yeah, this is the first time in US history a
Speaker 14: former president has been under criminal trial. These proceedings, of course,
Speaker 14: begin today. He's charged with thirty four felon accounts of
Speaker 14: falsifying business records related to alleged hush money payments made
Speaker 14: to foreign star Stormy Daniels ahead of the twenty sixteen election.
Speaker 14: Trump has pleaded not guilty. He denies all of these allegations,
Speaker 14: and he right now is sitting upstairs in the fifteenth
Speaker 14: story courtroom at the defense table as there is a
Speaker 14: number of motions that they are dealing with. And actually
Speaker 14: the judge has denied several motions already, including a motion
Speaker 14: for a refusal and also the defense's attempts to block
Speaker 14: entering certain things related to Trump's alleged extra merit to
Speaker 14: affairs into evidence.
Speaker 5: The judge has.
Speaker 14: Ruled that the jury will be able to hear a
Speaker 14: lot of that evidence that said, the jury is not
Speaker 14: assembled yet. Once they get the role of these motions,
Speaker 14: that is when jury selection will begin, and they'll try
Speaker 14: to find twelve jurors and six alternates who can be
Speaker 14: impartial unbiased in assessing this case, which of course relates
Speaker 14: not just to a former president but the current presumptive
Speaker 14: Republican presidential nominee. So highly consequential what begins today, But
Speaker 14: this is a process that could last six to eight
Speaker 14: weeks in total. It could take about two months for
Speaker 14: this trial to.
Speaker 7: Reach a conclusion.
Speaker 5: Haiti Nines outside the courthouse in Manhattan. We thank you.
Speaker 3: And what's so interesting, Ed is almost as a proxy
Speaker 3: for that betting on Trump potentially being the nominee and
Speaker 3: indeed future president again in the United States, has been
Speaker 3: his own social media company, which you are able to,
Speaker 3: of course by shares and exposure to. But that social
Speaker 3: media startup, Trump Media, has been down a lot today.
Speaker 4: Yeah.
Speaker 6: Part of that I think is partly due to an
Speaker 6: offering in some markets. But I was listening to the
Speaker 6: radio and Bloomberg Radio surveillance on the way in, and
Speaker 6: it's like a proxy. I think you're right that whatever
Speaker 6: happens in that trial and Kaylee will be on the
Speaker 6: ground for us. You kind of infer your thinking about
Speaker 6: President Trump from it in this race.
Speaker 3: Yeah, parent are Truth Social, which is Trump Minia and
Speaker 3: Technology Group filed to register shares we understand, so which
Speaker 3: of course are including those link to warrants. That's why
Speaker 3: you're getting a supply side pressure coming on in the
Speaker 3: share price. But notably, it has been down about what
Speaker 3: sixty percent from its highs after it did did des
Speaker 3: back and has been publicly trading as Trump Media and
Speaker 3: Technology Group.
Speaker 5: Meanwhile, though, we've got to go back to.
Speaker 3: Some key technology stories, and you're the person behind one
Speaker 3: of the main ones, Tesla, just bringing us, as you
Speaker 3: raced in this morning, the ability to report on what's
Speaker 3: happening with executives leaving.
Speaker 6: Yeah, it's hard to know if the downward pressure on
Speaker 6: the stock is the ten percent layoffs. Actually I'm hearing
Speaker 6: it's much deeper than ten percent, or Drew Baglino and
Speaker 6: Rowan Beateel leaving. Think about the intellectual capital that's left
Speaker 6: Zach kirk Cohn last August, the Chips leadership that left
Speaker 6: earlier this year.
Speaker 4: Musc's taking an X to talk about it.
Speaker 6: Caro, you know that It's interesting why did they time
Speaker 6: it this way, the executives if it wasn't linked to
Speaker 6: the layoffs. I don't have the answer for that.
Speaker 3: And this next phase of growth that everyone keeps harnessing
Speaker 3: the idea that we are.
Speaker 4: In between these new between two weeks.
Speaker 5: Yeah, but then are.
Speaker 3: We if we were likely to be pulling back from
Speaker 3: a cheaper model and more focusing on robotaxis.
Speaker 6: But what I did here is that whatever the reasons
Speaker 6: for Baglino's departure, things are actually.
Speaker 4: Going very well in planning for that next stage of growth.
Speaker 6: I heard forty six eighty, for example, is really ramping nicely.
Speaker 6: So again, people's reasons are their own, but clearly the
Speaker 6: market and our readers are paying attention this morning.
Speaker 3: There's also, of course, the ongoing ev context. That is
Speaker 3: not a putty picture right now? That does it for
Speaker 3: this edition of blueg Technology.
Speaker 5: Boy, it was a big one.
Speaker 4: Yeah, so much to recap on the podcast. You know
Speaker 4: where to find it. We're publishing into Apple's Spotify and iHeart.
Speaker 4: Of course the pod is all also on the Bloomberg platforms.
Speaker 6: Day one of what is going to be a big
Speaker 6: week from New York City and San Francisco.
Speaker 4: This is Bloomberg Technology,