WEBVTT - Nvidia Stock Surges and the DOJ Comes After Live Nation 0:00:02.400 --> 0:00:08.800 Bloomberg Audio Studios, podcasts, radio news from Marhard. 0:00:08.960 --> 0:00:13.360 We're Innovation, Money and Power co lie in Silicon Valley, NBN. 0:00:13.720 --> 0:00:17.760 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:31.640 --> 0:00:34.160 I'm Caroline hide A Bloomberg's World headquarters in New York, 0:00:34.560 --> 0:00:36.440 and I'm Ed Ludlow in San Francisco. 0:00:36.680 --> 0:00:38.519 This is Bloomberg Technology. 0:00:38.240 --> 0:00:41.479 Coming up you know it. Full coverage on Nvidio as 0:00:41.479 --> 0:00:44.919 its sales forecast lives up to those very high expectations. 0:00:45.479 --> 0:00:48.800 Plus, the Department of Justice takes aim to break up 0:00:48.960 --> 0:00:49.480 Live Nation. 0:00:49.680 --> 0:00:50.760 Details to come, but. 0:00:50.800 --> 0:00:53.840 First let's check in on these markets and more broadly 0:00:53.920 --> 0:00:56.920 on these two singular names. If we want to highlight 0:00:56.960 --> 0:00:59.680 for you front and center, we focus in on Live 0:00:59.760 --> 0:01:02.000 Nation and down more than five percent. The US Justice 0:01:02.000 --> 0:01:05.840 Department and almost thirty states suing Live Nation Entertainment that 0:01:05.880 --> 0:01:07.360 they want to force the company to sell off the 0:01:07.400 --> 0:01:11.240 ticketing giant ticket Master. In response, Live Nations saying once 0:01:11.280 --> 0:01:13.560 again that it is not them, but is the artist 0:01:13.680 --> 0:01:16.880 teams that set prices, not Ticketmaster, and they dispute the 0:01:16.959 --> 0:01:19.360 fact that they are in any way a monopoly. Power 0:01:19.520 --> 0:01:21.360 will have so much more as we go live to 0:01:21.400 --> 0:01:25.200 the DOJ. Meanwhile, in video up more than nine percent, 0:01:25.680 --> 0:01:29.760 extraordinary and eclipsing one thousand dollars. We therefore have a 0:01:30.400 --> 0:01:33.280 of course share split that will be music to retail 0:01:33.319 --> 0:01:36.440 investors ears. But what is music to investors is, more broadly, 0:01:36.880 --> 0:01:38.320 is the fact that they do post more than two 0:01:38.360 --> 0:01:42.280 hundred and sixty percent jump in revenue year on year growth. Now, 0:01:42.319 --> 0:01:44.480 wonder therefore, the share price is up in excess of 0:01:44.520 --> 0:01:47.240 that over the last twelve months, as well ed so 0:01:47.400 --> 0:01:50.720 much to digest in terms of revenue future revenue potential 0:01:50.840 --> 0:01:53.040 fact that they're going to double yet again twenty eight 0:01:53.040 --> 0:01:54.480 billion dollars in the next quarter. 0:01:56.200 --> 0:01:57.440 Look at this chart. 0:01:58.280 --> 0:02:03.640 This chart shows the market value or market capitalization of Nvidia. 0:02:03.680 --> 0:02:08.640 It's currently at almost two zero point six trillion US dollars. 0:02:08.960 --> 0:02:11.520 What that chart on your screen on the Bloomberg terminal 0:02:11.639 --> 0:02:15.600 is showing you is that Nvidia's value is more than 0:02:15.720 --> 0:02:20.320 Tesla an Amazon combined. Interesting in light of the fact 0:02:20.360 --> 0:02:24.360 that Tesla and Amazon are both customers of Nvidia, and 0:02:24.400 --> 0:02:26.720 it sells h one hundreds to both of them in 0:02:26.760 --> 0:02:28.840 this session alone. As you just pointed out, we're up 0:02:28.880 --> 0:02:31.760 more than nine percent. We've added almost two hundred and 0:02:31.800 --> 0:02:34.720 twenty billion dollars of market cap in a single session, 0:02:34.919 --> 0:02:38.240 or in other words, Nvidia has added almost two Intel's 0:02:38.320 --> 0:02:41.480 worth of market cap in a single session. Let's get 0:02:41.480 --> 0:02:45.280 the reaction to the numbers from Bloomberg Intelligence analyst Conngensabani 0:02:45.480 --> 0:02:46.400 here in San Francisco. 0:02:46.800 --> 0:02:48.000 The story is pretty clear. 0:02:48.480 --> 0:02:52.040 They're selling to the hyperscalers to a lesser extent, but 0:02:52.160 --> 0:02:54.800 the growth is that they've moved beyond the hyperscalers. That 0:02:54.880 --> 0:02:56.000 seems to be the read. 0:02:56.280 --> 0:02:59.040 Exactly and something really like we have been pointing on 0:02:59.120 --> 0:03:02.000 for a while, view want the enterprise piece to grow. 0:03:02.360 --> 0:03:04.240 It did grow fast for. 0:03:04.240 --> 0:03:06.760 The very first time in the last many quarters, because 0:03:06.880 --> 0:03:08.760 enterprise is much more diversified and. 0:03:08.760 --> 0:03:13.000 Sticky when we're thinking about the stickiness when we're thinking 0:03:13.000 --> 0:03:16.600 about the ultimate value longer term. Many were worried about 0:03:16.600 --> 0:03:19.400 this so called air pocket, the shift to the more 0:03:19.960 --> 0:03:23.359 the Blackwell architecture. Is that something that we saw any 0:03:23.440 --> 0:03:25.800 hint of how are we going to see companies replacing 0:03:25.880 --> 0:03:26.639 their technology? 0:03:28.040 --> 0:03:29.239 Yeah, there's two aspects to it. 0:03:29.400 --> 0:03:31.400 If we were in a normal cycle, you would think 0:03:31.440 --> 0:03:34.200 these h one hundreds to last about four to eight 0:03:34.280 --> 0:03:36.560 years and replaced on that cycle. But what we are 0:03:36.600 --> 0:03:39.800 seeing is right now, the biggest customers are racing. I 0:03:39.800 --> 0:03:41.880 would want to use the analogy of a pit stop 0:03:42.000 --> 0:03:45.520 in a racing where if you want to go cheap 0:03:45.560 --> 0:03:48.840 and hire a less prominent crew less technology lower parts, 0:03:49.040 --> 0:03:51.840 you can't afford to spend few seconds when you're fighting 0:03:51.840 --> 0:03:55.040 for milliseconds. That's what's happening with its customers. They can't 0:03:55.040 --> 0:03:58.520 afford to slow down and not purchase the most greatest 0:03:58.560 --> 0:04:01.760 and latest new product that puts out because everyone's competing 0:04:01.840 --> 0:04:02.520 against each other. 0:04:02.920 --> 0:04:05.520 The certainly are, but for now we know where the 0:04:05.560 --> 0:04:08.280 market share is ending up country in Savanni. We thank 0:04:08.360 --> 0:04:10.680 you for the latest from Blouemberg Intelligence. For more from 0:04:10.720 --> 0:04:14.680 a portfolio manager perspective, Franklin Equity Group Senior vice president 0:04:14.720 --> 0:04:18.440 and portfolio manager Jp Scandalios, who oversees three point nine 0:04:18.520 --> 0:04:21.880 billion dollar Franklin Small MidCap Growth fund, you oversee a 0:04:21.920 --> 0:04:22.800 holding an Nvidia. 0:04:23.240 --> 0:04:23.800 It has been a. 0:04:23.760 --> 0:04:27.200 Wise choice, friend, Jp, talk to us about what was 0:04:27.400 --> 0:04:30.320 the most important line coming from executives yesterday? 0:04:31.600 --> 0:04:33.480 Certainly, and good morning and thank you for having me. 0:04:33.480 --> 0:04:35.760 And just to be clear, we don't We no longer 0:04:35.760 --> 0:04:37.599 own Nvidia in my MidCap fund. 0:04:37.600 --> 0:04:40.600 I don't think it would qualify as a MidCap. 0:04:40.720 --> 0:04:42.960 The most important thing we heard, I think is that 0:04:43.120 --> 0:04:47.400 cadence that you refer to that Hopper is doing quite nicely, 0:04:47.480 --> 0:04:51.080 and Hopper two hundred is coming, has started shipping, and 0:04:51.120 --> 0:04:54.120 then before the end of the year we'll see Blackwell 0:04:54.160 --> 0:04:58.000 one hundred and Grace Blackwell soon they're following in twenty five. 0:04:58.080 --> 0:04:59.279 And so they have. 0:05:00.000 --> 0:05:03.720 They are putting up such velocity and product introduction that 0:05:03.720 --> 0:05:07.920 they're making it very difficult for challengers to keep up 0:05:07.920 --> 0:05:10.839 with them, especially since you heard Jensen say it yesterday. 0:05:11.440 --> 0:05:12.720 They're a platform company. 0:05:12.800 --> 0:05:17.120 All the software, all the firmware, all the APIs around 0:05:17.240 --> 0:05:22.279 that GPU, all the networking, and so they're really semiconductor 0:05:22.279 --> 0:05:24.760 analysts such as myself, we don't see a lot of these, 0:05:24.800 --> 0:05:28.320 and that's why you're seeing unprecedented numbers and growth rates 0:05:28.680 --> 0:05:33.880 because this artificial intelligence opportunity is really a secular one 0:05:33.880 --> 0:05:37.000 and perhaps one of the largest in our lifetime. The 0:05:37.040 --> 0:05:39.680 only person I can think over the last two or 0:05:39.680 --> 0:05:42.839 three years who's had as much competitive success as someone 0:05:42.880 --> 0:05:46.279 like Patrick Mahomes for the chiefs, This is just incredible 0:05:46.279 --> 0:05:47.240 and unprecedented. 0:05:49.279 --> 0:05:53.159 JP Franklin across all of its properties and all the 0:05:53.200 --> 0:05:55.480 funds has a lot of exposures in video. Right, And 0:05:55.600 --> 0:05:57.520 I know a lot of people at your firm. They 0:05:57.640 --> 0:06:01.080 call you, mister Nvidia. You know your brain focused and 0:06:01.120 --> 0:06:03.200 you're probably going to keep your job for the time being. 0:06:03.200 --> 0:06:06.760 You've done a good job so far. Jensen one's getting 0:06:06.800 --> 0:06:09.480 a lot of airtime. Right, He's got a lot of momentum. 0:06:09.800 --> 0:06:12.080 He has an answer for everything, and just bear with 0:06:12.120 --> 0:06:15.640 me because I want to be accurate on this that 0:06:15.720 --> 0:06:19.400 he's also a little bit inconsistent. Right, So the cadence 0:06:19.400 --> 0:06:23.040 of new product cycles is one new generation of accelerator 0:06:23.080 --> 0:06:25.520 per year. And he talks about how the H one 0:06:25.640 --> 0:06:29.479 hundred generation is designed such that you can just swap 0:06:29.520 --> 0:06:31.560 it out when the new generation comes along, and that 0:06:31.640 --> 0:06:35.400 all the customers have great visibility. But the data center 0:06:35.440 --> 0:06:38.760 guys are lowering exposure. At some point, we have to 0:06:38.800 --> 0:06:41.080 ask when this slows down, right, We have to ask 0:06:41.120 --> 0:06:44.720 when the competition comes, give your sort of most objective 0:06:44.760 --> 0:06:46.360 assessment of that timing. 0:06:47.200 --> 0:06:51.640 Certainly, and you make extremely important and our points. And 0:06:51.680 --> 0:06:55.839 a Franklin equity group, we try to maintain discipline and 0:06:55.880 --> 0:06:59.839 don't let my youthful looks surprise you. I've been aronounced 0:06:59.880 --> 0:07:02.320 to the nineties. I've seen these booms and busts, and tech, 0:07:02.400 --> 0:07:05.760 the tech sector is known for this. Correct, And you're 0:07:05.760 --> 0:07:08.040 absolutely right for those of us who've been doing this 0:07:08.040 --> 0:07:11.600 for twenty eight thirty years, in Vidia through no fault 0:07:11.600 --> 0:07:15.280 of their own semiconductors. In general, it's a cyclical business 0:07:15.440 --> 0:07:17.680 and you do get these boom busts, and people do 0:07:17.720 --> 0:07:20.440 miss quarters. And if I were to wager, I'd be 0:07:20.480 --> 0:07:22.760 on your side that there will be a quarter or 0:07:22.760 --> 0:07:26.280 maybe two quarters where these cloud guys decide, oh, you 0:07:26.320 --> 0:07:28.480 know what, we have enough GPUs right now, we have 0:07:28.640 --> 0:07:29.760 enough dgx's. 0:07:29.960 --> 0:07:32.760 We're going to pause for now. And so you're absolutely right. 0:07:33.240 --> 0:07:35.640 There will be you know, it's not going to be 0:07:35.720 --> 0:07:37.679 linear and up to the right, which Wall Street loves. 0:07:37.720 --> 0:07:40.320 So there will be a time where shares get hit, 0:07:40.640 --> 0:07:44.160 where an air pocket does happen. And so, yes, you 0:07:44.240 --> 0:07:46.560 have to remain disciplined. You have to do your DCF, 0:07:46.880 --> 0:07:48.960 you have to do your modeling, you have to talk 0:07:49.000 --> 0:07:53.720 to the customers, you talk to competitors, and be very disciplined. 0:07:54.000 --> 0:07:57.960 JP for sure, stick with us JAP scandalios of frankline 0:07:57.960 --> 0:07:58.600 equity groups. 0:07:58.600 --> 0:08:00.560 So it's got out to Bloom based Lucas in New 0:08:00.640 --> 0:08:03.600 York City. Lucas leads our screen time coverage, that's our 0:08:03.600 --> 0:08:07.040 coverage of the entertainment industry. And something that the Attorney 0:08:07.040 --> 0:08:10.920 General said Lucas was about illegal actions trying to protect 0:08:10.920 --> 0:08:13.640 a dominant market position. But what is it that the 0:08:13.680 --> 0:08:16.960 DOJ is accusing Live Nation of actually doing to keep 0:08:17.000 --> 0:08:18.080 the competition down. 0:08:18.600 --> 0:08:20.640 Well, that's some of what we'll have to see as 0:08:21.240 --> 0:08:23.600 as the case continues. You know, I don't think anyone 0:08:23.600 --> 0:08:26.440 in the music business would question that Live Nation is 0:08:26.600 --> 0:08:28.960 the most dominant player in the business right It's the 0:08:29.000 --> 0:08:31.840 number one promoter. Ticket Master is the number one ticket seller. 0:08:32.400 --> 0:08:35.120 What the government seems to be arguing is that Live 0:08:35.240 --> 0:08:38.480 Nation has used those two businesses to sort of self 0:08:38.520 --> 0:08:41.200 reinforce each other and strengthen its position. So, for example, 0:08:41.800 --> 0:08:44.120 you know, it would tell a venue that if you 0:08:44.600 --> 0:08:47.439 want to book a certain artist that Live Nation promotes, 0:08:47.600 --> 0:08:49.920 you need to use ticket Master as your ticket seller, 0:08:50.000 --> 0:08:52.600 or vice versa. You also heard in those Merrick Garland 0:08:52.640 --> 0:08:56.439 comments that it believes it's gone and acquired any potential competitors, 0:08:56.440 --> 0:08:59.920 granted much smaller competitors, but done so to consolidate control 0:09:00.360 --> 0:09:03.400 in certain markets. It also has issues with these exclusive 0:09:03.440 --> 0:09:07.520 deals that Live Nation and Ticketmasters strike with venues that 0:09:07.559 --> 0:09:09.600 sort of lock in a relationship for a long period 0:09:09.640 --> 0:09:11.720 of time. They believe that there should be multiple ticket 0:09:11.760 --> 0:09:15.120 sellers at certain venues. You know, people have made claims 0:09:15.160 --> 0:09:17.400 like these in the past, and it'll be really interesting 0:09:17.440 --> 0:09:18.959 to see whether a court. 0:09:19.280 --> 0:09:19.960 Is open to them. 0:09:20.280 --> 0:09:22.480 There has been a response from Live Nations saying the 0:09:22.520 --> 0:09:26.000 DOJ's lawsuit won't solve the issues that fans care about 0:09:26.040 --> 0:09:29.120 relating to ticket prices, service fees, and access in demand shows. 0:09:29.440 --> 0:09:32.079 And they're calling ticket master monopoly. Maybe a pr win 0:09:32.120 --> 0:09:34.199 for the DOJ in the short term, but it will 0:09:34.200 --> 0:09:37.079 lose in court. A sentiment that some analysts are agreeing 0:09:37.080 --> 0:09:38.360 with that this is going to be a very high 0:09:38.360 --> 0:09:41.160 bar to having originally signed off on a deal to 0:09:41.200 --> 0:09:43.120 then unwind it in this horizontal manner. 0:09:43.200 --> 0:09:43.400 Yeah. 0:09:43.440 --> 0:09:46.400 Look, the government approved this deal more than a decade 0:09:46.400 --> 0:09:48.760 ago with a lot of conditions. Live Nation has been 0:09:48.920 --> 0:09:52.440 under scrutiny. There's been a consent decree for most of 0:09:52.440 --> 0:09:55.360 its existence. Since that deal, there's sort of been this 0:09:55.440 --> 0:09:58.680 looming threat of federal investigation. This is the kind of 0:09:58.720 --> 0:10:02.000 the first big suit that we've in a while. You know, 0:10:02.320 --> 0:10:05.000 I think investors will see it as an overhang on 0:10:05.080 --> 0:10:07.400 the stock because there is uncertainty as to what this 0:10:07.440 --> 0:10:10.360 will mean. I think most will probably still air on 0:10:10.400 --> 0:10:12.640 the side that it's unlikely that it gets broken up, 0:10:12.800 --> 0:10:15.480 but there will need to be some behavioral remedies, as 0:10:15.480 --> 0:10:18.679 they say, to Live Nation, to satisfy the government. 0:10:19.360 --> 0:10:21.559 It is so good to have one Luca Sure right 0:10:21.559 --> 0:10:23.920 here in the building in New York. We appreciate him 0:10:23.960 --> 0:10:27.760 weighing in on this landmark case. Meanwhile, let's get back 0:10:27.800 --> 0:10:30.800 to what is really driving sentiment in the benchmarks today. 0:10:30.880 --> 0:10:33.800 It is AI enthusiasm in is one Nvidia. It is 0:10:33.840 --> 0:10:37.760 back to portfolio manager Franklin Equity Group's senior vice president 0:10:38.240 --> 0:10:42.120 as well JP Scandalios and JP just returning to some 0:10:42.160 --> 0:10:45.280 of the enthusiasm we heard from not just CEO CFO 0:10:45.360 --> 0:10:47.920 over at Nvidia and some of the concerns that still 0:10:47.920 --> 0:10:50.760 are about so called air pockets, the shift to the 0:10:50.760 --> 0:10:54.240 most powerful chips and architecture they offer, but also China. 0:10:54.320 --> 0:10:55.920 I just want to get to grips with really how 0:10:56.000 --> 0:10:57.200 much of a concern it is there. 0:10:59.040 --> 0:11:02.079 It's been an issue for the whole industry, including equipment, 0:11:02.120 --> 0:11:08.920 semi connector equipment. So that's largely embedded or understood. The 0:11:09.040 --> 0:11:15.200 US government restrictions, certainly believe it or not, impeded growth 0:11:15.320 --> 0:11:20.240 or slowed growth. But in Nvidia and others have chips, 0:11:20.240 --> 0:11:24.040 and they're making chips the L forty h twenty that 0:11:24.280 --> 0:11:29.600 are despect if you will, that fall beneath the government restrictions. 0:11:29.880 --> 0:11:33.040 The unknown for people like me is that the government 0:11:33.360 --> 0:11:38.080 might move the goal line, if you will, and so 0:11:38.200 --> 0:11:39.680 you have to stay on top of that. It's just 0:11:39.720 --> 0:11:43.240 another variable to consider. But that headwind, if you will, 0:11:43.760 --> 0:11:46.480 has already been communicated and is understood by the market. 0:11:46.559 --> 0:11:49.160 Well, JP, I mean the pushback from Nvidia is that 0:11:49.200 --> 0:11:52.520 there is unanswered demand all around the world that will 0:11:52.520 --> 0:11:54.559 make up for the shortfall. I've been just taking a 0:11:54.559 --> 0:11:56.679 look at Dell, look at the Gainsdell showing, and look 0:11:56.720 --> 0:11:59.560 at Intel moving to the downside, and I wonder how 0:11:59.640 --> 0:12:02.760 much they going to be like a disintermediation between Nvidia 0:12:02.920 --> 0:12:06.120 the people it relies on, like Dell, its rivals, because 0:12:06.400 --> 0:12:09.079 in Nvidia is a systems vendor now, isn't it, JP? 0:12:10.559 --> 0:12:13.840 As I said earlier, right, they consider themselves a platform 0:12:13.920 --> 0:12:17.520 company if you will, they will sell individual GPUs or 0:12:17.640 --> 0:12:23.040 GPU cards. But yes, with the software and all the firmware, 0:12:23.600 --> 0:12:27.400 they do consider themselves a systems or a platform company. 0:12:27.440 --> 0:12:30.679 Certainly, we want to thank you so much JP Scandalias 0:12:30.679 --> 0:12:33.480 for holding over to keep giving us your expertise from 0:12:33.480 --> 0:12:36.079 the research research angle and indeed the investment angle of 0:12:36.160 --> 0:12:39.360 Franklin Equity Group. Thank you. Let's just shift our attention 0:12:39.400 --> 0:12:41.440 to telecoms now, and there's the news out of billionaires 0:12:41.480 --> 0:12:44.079 Avier Neil. He's exploring a bid to buy out other 0:12:44.120 --> 0:12:47.400 shareholders the Latin American telecom provider Millicom, which will value 0:12:47.400 --> 0:12:49.720 the carried about four point one billion dollars. Neil's holding 0:12:49.760 --> 0:12:54.040 company that's at this investor estimate, says it is exploring 0:12:54.160 --> 0:12:56.640 financing options to support an offer price of about twenty 0:12:56.640 --> 0:12:59.640 four dollars per Minicon common share, though it cannot guarantee 0:12:59.679 --> 0:13:02.920 and off will materialize, and there's already the bigger shareholder 0:13:02.920 --> 0:13:04.720 in the company with the twenty nine per cent stake. 0:13:05.400 --> 0:13:08.120 We want to dive deeper though, into this industry right now. 0:13:08.160 --> 0:13:10.079 We want to talk about it from the US perspective 0:13:10.280 --> 0:13:13.000 and globally. One of the biggest telecom providers here is 0:13:13.040 --> 0:13:14.760 at and T and I pleased to say that the CEO, 0:13:15.000 --> 0:13:17.240 John Stankey joins us now fresh off comments from a 0:13:17.240 --> 0:13:19.559 company's multi year growth strategy over at the JP Morgan 0:13:19.600 --> 0:13:22.679 Technology Conference, and I just want to weave in the 0:13:22.679 --> 0:13:25.040 era that we're sitting in at the moment, the fact 0:13:25.040 --> 0:13:27.800 that we just hear from Johnson, Wang and Ai and 0:13:27.840 --> 0:13:31.120 we're talking about open versus clothes. We're talking about infrastructure needs, 0:13:31.120 --> 0:13:33.840 equipment needs, to talk about energy efficiency, and in many 0:13:33.880 --> 0:13:36.200 ways you're having a very similar conversation over in the 0:13:36.200 --> 0:13:39.840 world of telecoms at the moment innovation, the needs for 0:13:39.880 --> 0:13:42.640 open and in particularly god An Ericsson fourteen billion dollars 0:13:42.720 --> 0:13:46.600 spend revamp wireless network focus. You want to have an 0:13:46.640 --> 0:13:47.600 open platform? 0:13:47.800 --> 0:13:48.720 Why we do? 0:13:49.040 --> 0:13:51.680 And we're pretty excited about what I heard before because 0:13:51.760 --> 0:13:55.600 the more workloads Jensen produces that you have to go 0:13:55.720 --> 0:13:58.400 somewhere and we like carrying those around on our networks, 0:13:58.400 --> 0:14:01.800 whether they're wireless or fix. So it's an exciting time 0:14:01.800 --> 0:14:03.840 to be in telecom. And our point of view is 0:14:04.320 --> 0:14:06.680 if you're going to scale at the level we're talking about, 0:14:06.880 --> 0:14:09.360 you need to have more cost efficiency and you need 0:14:09.400 --> 0:14:12.560 to be able to scale more dramatically and so open 0:14:13.000 --> 0:14:16.760 separating hardware and software and our infrastructure starts to give 0:14:16.840 --> 0:14:19.480 us that cost curve and that flexibility, and that's going 0:14:19.520 --> 0:14:21.560 to be critical to have the agility to move forward 0:14:21.560 --> 0:14:22.360 in this environment. 0:14:23.080 --> 0:14:28.000 Agile at a time why wireless demand is plateauing, maybe slowing, No, 0:14:28.080 --> 0:14:28.560 not at all. 0:14:28.600 --> 0:14:31.680 Wireless demands up thirty percent a year and it's not 0:14:31.880 --> 0:14:33.840 slowing down. And I think as you start to look 0:14:33.880 --> 0:14:37.800 at where we are with what's occurring from a usage perspective, 0:14:38.680 --> 0:14:40.960 you start getting workloads that come out of AI, it's 0:14:41.000 --> 0:14:43.360 going to continue to fuel that. And really it's one 0:14:43.400 --> 0:14:45.240 of the key things that this country needs to deal 0:14:45.280 --> 0:14:48.440 with is if you're going to continue to see usage 0:14:48.480 --> 0:14:50.520 go up thirty thirty five percent a year, you've got 0:14:50.520 --> 0:14:53.160 to build bigger highways to take that. And that all 0:14:53.200 --> 0:14:55.880 comes on the foundation of spectrum, and we need to 0:14:55.920 --> 0:14:58.000 make sure we got policy right in this country to 0:14:58.040 --> 0:15:01.640 get more spectrum out there to deal with the rise workloads. So, yeah, 0:15:01.640 --> 0:15:04.080 a handset demand might be coming down a little bit, 0:15:04.240 --> 0:15:06.520 we're not seeing quite the growth we saw ten years ago, 0:15:07.080 --> 0:15:10.760 but the utility of connected devices, how people are using 0:15:10.760 --> 0:15:13.200 those handsets and the demand for the traffic that they 0:15:13.240 --> 0:15:14.840 generate isn't coming down at all. 0:15:16.120 --> 0:15:18.680 John, Good Morning, is ED in San Francisco. Look, my 0:15:18.800 --> 0:15:22.000 head is often outside the bounds of our atmosphere and 0:15:22.080 --> 0:15:25.040 up in space, and I was really interested to see 0:15:25.080 --> 0:15:30.280 your deal with AST. You know, Starlink is doing a 0:15:30.280 --> 0:15:33.240 lot with the other carriers. I just wondered, in the 0:15:33.240 --> 0:15:35.480 first sense, if you have a really clear view of 0:15:35.520 --> 0:15:39.960 what the addressable market is for Constellation Direct to sell. 0:15:40.120 --> 0:15:42.120 I think we have a view of it, Ed. I 0:15:42.120 --> 0:15:44.640 don't know whether or not we're going to all understand 0:15:44.680 --> 0:15:47.760 exactly how consumers are going to use this, but we've 0:15:47.800 --> 0:15:50.840 done a lot of work to not only understand who's 0:15:50.880 --> 0:15:54.800 the segment of the population that truly needs always on connectivity. 0:15:54.840 --> 0:15:56.760 I mean, that's really what we want to do here. 0:15:57.480 --> 0:15:59.640 Most people wake up in the morning they say, I 0:15:59.720 --> 0:16:01.680 can't for to be off the Internet. And some folks 0:16:01.680 --> 0:16:04.840 have a lifestyle that take them to places where they do, 0:16:04.960 --> 0:16:07.160 unfortunately get to the bottom of the Grand Canyon on 0:16:07.200 --> 0:16:10.280 a rafting trip and can't continue to post to their 0:16:10.320 --> 0:16:12.600 website about what's going on with their family and it's 0:16:12.600 --> 0:16:15.600 really important to them, or they have an important business call. 0:16:15.920 --> 0:16:18.240 There's others who do it incidentally. Maybe they're on a 0:16:18.320 --> 0:16:21.080 road trip and they're out on an interstate somewhere and 0:16:21.080 --> 0:16:23.000 they drive off the network and they need it for 0:16:23.040 --> 0:16:26.640 a day. So we know those kind of behaviors in 0:16:26.640 --> 0:16:29.960 our customer base because we run the networks and we 0:16:30.040 --> 0:16:32.800 know what our customers are doing. We think there's a 0:16:32.840 --> 0:16:35.400 good application for this, just like when somebody leaves the 0:16:35.480 --> 0:16:38.640 United States and needs to roam on a network outside 0:16:38.680 --> 0:16:40.840 the US to make sure that they're connected when they're 0:16:40.840 --> 0:16:43.920 in Europe or Asia or wherever they're going. So this 0:16:44.080 --> 0:16:48.160 is just the next step and simplifying connectivity and ensuring 0:16:48.200 --> 0:16:50.120 customers be connected wherever they. 0:16:49.960 --> 0:16:54.720 Go, John YaST and not STYLINGK and SpaceX well. 0:16:55.320 --> 0:16:58.200 As you pointed out at it's a nascent area where 0:16:58.240 --> 0:17:01.440 the technology is starting to develop. We think AST has 0:17:01.480 --> 0:17:05.359 done a remarkable job of getting the technology right where 0:17:05.760 --> 0:17:09.280 it's consumer centric. The customer doesn't have to change any 0:17:09.320 --> 0:17:12.240 equipment and doesn't have to change anything they're doing with 0:17:12.440 --> 0:17:15.960 their handset, and they can still avail themselves of the service. 0:17:16.600 --> 0:17:19.080 That's really important in our view, and so what we 0:17:19.200 --> 0:17:21.479 have going on in other parts of the industry is 0:17:21.920 --> 0:17:24.920 we're kind of taking satellites and services that we're fit 0:17:25.119 --> 0:17:30.240 for fixed wireless connections or fixed satellite connections and now 0:17:30.280 --> 0:17:33.440 trying to make the mobile and it's a little more 0:17:33.520 --> 0:17:36.359 clunky as a result of that. So I think what 0:17:36.400 --> 0:17:39.399 we're looking at is cost performance, how do we make 0:17:39.440 --> 0:17:41.440 it easy for the consumer? And I don't think there's 0:17:41.440 --> 0:17:43.000 going to be one winner. I think there's going to 0:17:43.000 --> 0:17:46.679 be multiple opportunities going forward or providers, and we think 0:17:46.760 --> 0:17:49.199 that's good for us, especially when we have partnerships that 0:17:49.280 --> 0:17:52.159 ultimately we can have the right kind of relationships to 0:17:52.160 --> 0:17:53.840 satisfy the needs of our customers. 0:17:54.520 --> 0:17:56.919 Satisfying the needs of a customer, you articulate it very 0:17:56.920 --> 0:18:00.280 well why we as customer is going to need more 0:18:00.320 --> 0:18:03.600 and more data, more and more wallas, but the actual 0:18:03.680 --> 0:18:07.000 business of selling wallness has kind of been slowing for 0:18:07.040 --> 0:18:09.840 you and competitors. How do you stand apart, how do 0:18:09.880 --> 0:18:12.119 you make sure people reach the AT and T versus 0:18:12.359 --> 0:18:16.080 Verizon T Mobile when you have had some hits, perhaps 0:18:16.080 --> 0:18:18.720 to worries about data security for example. 0:18:19.000 --> 0:18:22.080 First of all, despite the fact that customer net ads 0:18:22.080 --> 0:18:25.639 are slowing, utility and use is continuing to grow, and 0:18:25.840 --> 0:18:28.280 so we had a very good year. When you think 0:18:28.320 --> 0:18:31.080 about what happened from a service revenue growth perspective, we 0:18:31.200 --> 0:18:34.719 led the industry. We're still seeing healthy growth. It's a 0:18:34.720 --> 0:18:38.040 bit higher than what the GDP levels are and an 0:18:38.119 --> 0:18:41.040 infrastructure business like ours, that's kind of what you want 0:18:41.080 --> 0:18:43.400 to see happen, and so it's not a bad thing. 0:18:44.320 --> 0:18:46.280 But in terms of what we do going forward on 0:18:46.320 --> 0:18:49.160 this is it's what I just talked about. Customers want 0:18:49.160 --> 0:18:52.639 to be connected everywhere. Customers want to make a simple 0:18:52.680 --> 0:18:54.560 decision of how they get on the internet. They don't 0:18:54.560 --> 0:18:57.920 wake up in the morning relishing having two or three 0:18:58.000 --> 0:19:00.880 relationships to be able to use my phone when I'm 0:19:00.880 --> 0:19:02.879 on the go, or my phone at home or my 0:19:02.960 --> 0:19:05.280 computer at home. They want to call somebody say just 0:19:05.320 --> 0:19:07.440 get me on the internet. And I think our position 0:19:07.520 --> 0:19:09.359 at AT and T is about doing that better than 0:19:09.400 --> 0:19:12.199 anybody else. And our focus is on making sure we 0:19:12.240 --> 0:19:15.560 take our great fiber assets, we take our wireless business, 0:19:15.560 --> 0:19:19.080 bring it together, start to do things like add value 0:19:19.119 --> 0:19:21.760 to a customer to ensure that their privacy is protected, 0:19:22.200 --> 0:19:25.400 their traffic is secure. They only have to call one 0:19:25.440 --> 0:19:27.359 place to get it done at a great value. They 0:19:27.440 --> 0:19:29.400 can use it in the grand Canyon, they can use 0:19:29.440 --> 0:19:32.080 it at home. That's the race we're on right now, 0:19:32.080 --> 0:19:34.119 and that's what we're focused on doing at AT and T. 0:19:34.880 --> 0:19:36.639 John Sanker, I wish we had more time. Thank you 0:19:36.640 --> 0:19:38.679 so much for talking us through the focus and of 0:19:38.680 --> 0:19:41.960 course some of those commitments to the financial goals that 0:19:42.000 --> 0:19:45.600 were reinstated yesterday and restated at the JP Morgan event. 0:19:45.640 --> 0:19:47.720 We thank him so much. John Stanking of AT and T, 0:19:47.920 --> 0:19:48.520 ed what have you got? 0:19:49.160 --> 0:19:50.480 Okay, So coming up on the show, we're going to 0:19:50.520 --> 0:19:52.359 check back in on in video. We have to and 0:19:52.400 --> 0:19:55.879 discuss the outlet for AI accelerators. Also an AI to 0:19:55.920 --> 0:20:01.359 AIPC Lenovo softer nine tenths. We percent third successive quarter 0:20:01.760 --> 0:20:05.919 of profit beating, and again we talk about the Asian 0:20:05.960 --> 0:20:09.840 OEMs really moving quickly on the AIPC. Dell came out 0:20:09.840 --> 0:20:13.439