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Speaker 1: From the heart of where innovation, money and power collide

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Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with

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Speaker 1: Caroline Hyde and Ed Ludlow.

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Speaker 2: Like from New York, I'm Caroline Hyde and I'm Jackie

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Speaker 2: Devalas in San Francisco, this is Bloomberg Technology coming up.

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Speaker 3: Amazon plans to spend at least one hundred billion dollars

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Speaker 3: this year to keep up with AI demand. We break

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Speaker 3: down the earnings, plus US Treasury Secretary Scott Besson says

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Speaker 3: Elon Musk's Doge effort isn't altering treasury systems.

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Speaker 4: More on our exclusive.

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Speaker 3: Interview and with the Super Bowl this Sunday, we dig

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Speaker 3: into the sports spending industry with DraftKings CEO Jason Robbins.

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Speaker 3: But first we dig in to these markets. But the

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Speaker 3: number one name that is dragging down the NASAC, it's

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Speaker 3: Amazon by three point six percent. The worst day of

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Speaker 3: the stocks is December the eighteenth. This is all about

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Speaker 3: the earnings that we get the fact that they managed

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Speaker 3: to be in line for their fiscal fourth quarter ten

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Speaker 3: percent growth in revenue. We see earnings overall showing sixty

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Speaker 3: percent more than growth in operating profit. But it's the

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Speaker 3: forward looking guidance that once again has us a little

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Speaker 3: bit anxious. And it's all about AWS. Let's get to it,

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Speaker 3: Bloomberg Intelligence analyst Phunam Goyle. And first off, with AWS,

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Speaker 3: they're committing to yet more spend one hundred billion dollars.

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Speaker 3: That's going to be the run rate that's necessary to

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Speaker 3: capture the extent of demand for cloud right now.

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Speaker 4: Yeah, you said it, absolutely right.

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Speaker 5: So we're not still surprised by that because we heard

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Speaker 5: that from Microsoft and Google earlier too. But one hundred

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Speaker 5: and five billion dollars in twenty twenty five and likely

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Speaker 5: thereafter means they're spending more on AI. But that's a

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Speaker 5: good thing, right We want to see them spend more

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Speaker 5: because there is going to be higher demand for AWS

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Speaker 5: services and Amazon needs to make sure that they're investing

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Speaker 5: and not behind the curve.

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Speaker 2: What did the company say about it's eco commerce business?

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Speaker 2: We forget this now and all the talk about artificial intelligence.

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Speaker 2: How is it fending off competition there?

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Speaker 6: Yeah?

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Speaker 5: E commerce actually had a very nice quarter on the

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Speaker 5: heels of a very strong holiday season. They did well,

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Speaker 5: surprisingly in their physical store business, which is also a

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Speaker 5: small piece of the business. But the fact that it

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Speaker 5: grew nearly high single digits was surprising and promising on

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Speaker 5: the efforts there for the online side. Very good growth there,

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Speaker 5: and we are looking to see what happens in twenty

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Speaker 5: twenty five with the added terrace.

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Speaker 3: Let's just talk about whether or not commerce can be

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Speaker 3: supporting ultimately the amount of capital expenditure that's going on here, Poonam.

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Speaker 3: It feels as though this is a company that is

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Speaker 3: cash rich. Most analysts have upgraded their price targets on

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Speaker 3: the company today even though we see those weaknesses in

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Speaker 3: the SHES.

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Speaker 4: People are willing to wait.

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Speaker 5: Right, Yeah, people are definitely willing to wait. I mean

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Speaker 5: there's a lot of profitability that will come out of

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Speaker 5: Amazon over the coming years from the AWS business, but

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Speaker 5: also from advertising, which is a key driver here to

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Speaker 5: profitability with even higher margins than AWS, and retail is

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Speaker 5: the driving force behind that higher advertising momentum.

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Speaker 2: That's Bloomberg Intelligence analyst Punem Gooil, thanks so much.

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Speaker 4: Let's go to.

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Speaker 2: China, where tech stocks have helped power a bull run

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Speaker 2: for their market show me among shares surging to a

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Speaker 2: fresh record on the back of new product launches. Let's

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Speaker 2: bring in Bloomberg's Peter Elstrom for more. Peter, what does

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Speaker 2: show Me unveil that got investors so excited?

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Speaker 7: Yeah, Hi, Jackie. Yeah.

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Speaker 8: Shaumi is best known for its smartphones, of course, and

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Speaker 8: they've competed with Apple and Huawei in the market quite effectively.

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Speaker 8: But they also have this whole ecosystem of other devices

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Speaker 8: that they're able to tap into that includes cars. Now

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Speaker 8: they want ahead with a car venture while Apple pulled

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Speaker 8: away from that. They also have a lot of wearable devices.

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Speaker 8: So there are a couple of bullish sentiments there. One,

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Speaker 8: there's this overall sentiment that the China market is quite

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Speaker 8: strong right now. On top of that, Shaumi seems to

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Speaker 8: be growing quite a bit, and the Chinese government is

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Speaker 8: offering subsidies in a number of different areas, including wearables.

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Speaker 7: Could benefit show Me in the long run.

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Speaker 8: So they have this whole ecosystem that is probably going

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Speaker 8: to be able to benefit from some of these growth opportunities.

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Speaker 3: Looking at Shaomi, auto's another auto that's been on a

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Speaker 3: tap byd We're all looking at autonomous. We're looking at

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Speaker 3: a key competitive threat here for Tesla that saw Chinese

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Speaker 3: sales fall like they have done around the world.

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Speaker 8: Right bid of course, surpassed Tesla in terms of the

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Speaker 8: number of electric vehicles sold. They've been a breakout success

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Speaker 8: from China really, and they've had a success beyond the

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Speaker 8: country in a number of different areas. So they didn't

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Speaker 8: even announce anything that gave the shares this big bump.

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Speaker 8: There's a report that they're going to have an announcement

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Speaker 8: next week, and the anticipation is they're going to talk

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Speaker 8: about their autonomous driving capabilities. They think they're going to

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Speaker 8: take a step forward there, and that really benefited the shares.

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Speaker 8: On top of this overall bullish sentiment in China, there's another.

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Speaker 2: Boost here that's helping lift Chinese tech stocks Deep Seek,

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Speaker 2: which is completely the opposite reaction that US tech markets had.

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Speaker 4: Kind of explain that for US, Peter right.

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Speaker 8: Deep Sea, of course, is this AI model that has

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Speaker 8: come out over the past few months, but really a

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Speaker 8: couple weeks ago captured the world's attention because it's an

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Speaker 8: AI model that is competitive with open aiyes alternative offering.

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Speaker 8: But they did it at just a fraction of the cost.

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Speaker 8: It's unclear exactly whether the costs that they announced at

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Speaker 8: exactly in line, but nevertheless it was certainly much much

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Speaker 8: cheaper than what the companies in Silicon Valley are doing.

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Speaker 8: So Deep Seak itself is of course not publicly traded,

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Speaker 8: but that's given the sense of optimism for the rest

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Speaker 8: of the Chinese market, and you've seen an uplift and

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Speaker 8: a number of different stocks.

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Speaker 7: In particular, Ali Baba.

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Speaker 8: Best known for its e commerce business, announced an AI

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Speaker 8: model that's supposed to be quite good. They said theirs

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Speaker 8: is actually better than Deep Seeks.

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Speaker 7: It's not clear.

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Speaker 8: Whether that's the case, but their stock has been rising

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Speaker 8: quite a bit.

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Speaker 7: Now.

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Speaker 8: This comes against the backdrop that Ali Baba got beat

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Speaker 8: up for years by the Chinese government, So they're still

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Speaker 8: far far off their highs from twenty twenty to twenty

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Speaker 8: twenty one, but they're recovering a fair bit here.

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Speaker 3: The sentiment, of course come whipsaw, and a lot of

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Speaker 3: that's to do with just the economy over in China.

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Speaker 3: There's tariffs and concerns about US China relationship going forward.

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Speaker 3: But for now, does this sort of bullish sentiment feel resilient?

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Speaker 3: Is it all just pegged on the latest day I development?

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Speaker 8: Peter, It's it's so hard to tell, really, especially in China,

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Speaker 8: because there's a lot of things that you can't see

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Speaker 8: that are going on beyond the numbers, beyond.

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Speaker 7: The specifics that we see.

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Speaker 8: There certainly are analysts who believe that this is going

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Speaker 8: to be sustainable from here. One analyst put out a

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Speaker 8: report called China is going to eat China will eat

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Speaker 8: the world, you know, very bullish sentiment for some of

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Speaker 8: these China stocks, including Alli, Baba and Tencent, which had

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Speaker 8: been leaders in the past. But again, the Chinese government

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Speaker 8: had really beat up those companies in the past, so

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Speaker 8: they're just getting back some of that ground.

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Speaker 2: Peter, let's talk about trade tensions, because I'm ad all

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Speaker 2: this optimism. What does all of this mean in the

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Speaker 2: long term or even really in the short term as

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Speaker 2: some of these tensions escalate with President Trump and Beijing.

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Speaker 8: Right, Jackie, you're hitting on another one of the very

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Speaker 8: key actors and the unpredictability of the whole sentiment.

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Speaker 7: Here.

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Speaker 8: You have a number of Chinese companies that will get

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Speaker 8: caught in the crossfire between the US government and the

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Speaker 8: Chinese government if in fact they escalate from here. We've

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Speaker 8: already seen the US put these ten percent tariffs on

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Speaker 8: Chinese goods. Also, they eliminated this rule the deminimous rule

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Speaker 8: that really helped PDD Holdings, the parent company of Timu,

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Speaker 8: that the e commerce player that has been on such

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Speaker 8: a terror and also Shean. Those companies are certainly going

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Speaker 8: to get hit by some of these changes. It's a

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Speaker 8: matter of whether they're going to continue with those. The

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Speaker 8: Trump administration, of course, has gone back and forth on

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Speaker 8: some of these tariffs. We saw them announce them for

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Speaker 8: Mexico and Canada and then back off of them. So far,

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Speaker 8: the Chinese tariffs are in places probably aren't going to

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Speaker 8: go away, but you can imagine the Trump administration negotiating

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Speaker 8: a bit here. So unpredictability is really going to be

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Speaker 8: the key.

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Speaker 4: Doesn't it.

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Speaker 3: Just bloking back its Peter Elstrom, thanks so much. Coming up,

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Speaker 3: we're going to hear from the US Treasury Sectory Scott

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Speaker 3: Besson on Elon Musk's doge efforts that exclusive eminem it.

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Speaker 3: But first we're watching shares of pinterest too. Earnings abound

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Speaker 3: Pindress surging almost eighteen percent.

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Speaker 4: Revenue for the current period expected to.

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Speaker 3: Be about eight hundred and thirtyeven to eight hundred and

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Speaker 3: fifty two million dollars that exceeded estimates. They also really

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Speaker 3: managed to push across expectations in the holiday quarter for

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Speaker 3: revenue and profitability.

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Speaker 4: From New York San Francisco. This is bloom Meg Technology.

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Speaker 3: US Treasury Secretary Scott Beresen says a lot of misinformation

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Speaker 3: is floating around DOGE and that he personally vetted the

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Speaker 3: Treasury employees on Elon Musk's Government Efficiency Team with read

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Speaker 3: only access to federal payment data. He sat down with

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Speaker 3: Bloomberg Silehemosen yesterday for an exclusive interview.

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Speaker 4: Just take a listen.

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Speaker 6: These are Treasury employees. It are two Treasury employees, one

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Speaker 6: of whom I personally interviewed in his final round. Is

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Speaker 6: no tinkering with the system. They are on read only,

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Speaker 6: they are looking. They can make no changes. It is

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Speaker 6: an operational program to suggest improvement. So we make one

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Speaker 6: point three billion payments a year. And this is two

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Speaker 6: employees who are working with a group of long standing employees.

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Speaker 9: The letter that the Treasure Department sent earlier this week

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Speaker 9: talked about how the team currently does not have access

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Speaker 9: to change the system. Have they at any point this

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Speaker 9: year had the ability to make changes.

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Speaker 6: Absolutely not. This is no different than you would have

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Speaker 6: the at a private company. And by the way, the

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Speaker 6: ability to change the system sits over at the Federal Reserve,

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Speaker 6: so it doesn't even lie in this building. So they

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Speaker 6: could make suggestions on how to change the system, but

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Speaker 6: we don't even run the system.

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Speaker 9: And if they ask for if they request the ability

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Speaker 9: to change the system, would you grant that.

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Speaker 6: No, again, they have no ability to change the system.

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Speaker 6: I have no ability to grant that change. That they

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Speaker 6: can make suggestions, then it would go to the Federal

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Speaker 6: Reserve and just like any large erp system, there would

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Speaker 6: be tests. There would be this, there would be that,

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Speaker 6: and then the FED will determine whether these changes are.

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Speaker 10: Robust or not.

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Speaker 9: As the Secretary of Treasure, you also oversee the IRS.

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Speaker 9: Do you know what kind of access the team has

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Speaker 9: to IRS data or individual taxpayer data?

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Speaker 6: Well, I'm glad you asked that too, because look that

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Speaker 6: THERS the privacy issue is one of the biggest issues,

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Speaker 6: and over the past four years we've seen a lot

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Speaker 6: of leaks out of there. The IRS systems are quite poor.

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Speaker 6: When I started in college in nineteen eighty, I learned

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Speaker 6: the program in COBAL. I think there are twelve different

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Speaker 6: systems at the IRS that still run on cobD. But

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Speaker 6: as of now, there is no engagement at the RS.

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Speaker 9: And if they request that access, would you sign off

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Speaker 9: on that request?

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Speaker 6: They haven't, so we'll take that when it comes to it.

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Speaker 6: I think there is a lot to do there, but

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Speaker 6: the president was elected with a big agenda and to

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Speaker 6: the extent that getting the IRS in better shape is

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Speaker 6: part of that. Sure, because look, with the IRS, what

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Speaker 6: am I concerned about? I am concerned about collections. I'm

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Speaker 6: concerned about privacy, and I am concerned that the system

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Speaker 6: is robust.

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Speaker 2: That was US Treasury Secretary Scott Bessened along with Bloomberg

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Speaker 2: Sillia Mosen. Let's bring in Bloomberg's Mike Shepherd. Now, Mike,

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Speaker 2: before we get into Doge, I want to address a

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Speaker 2: story that just crossed the wire from Reuter's Trump plans

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Speaker 2: to issue reciprocal tariffs as early as he told Republicans

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Speaker 2: yesterday of his plans. Can you kind of break down

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Speaker 2: what we know so far?

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Speaker 11: Well, we're still trying to confirm this report, Jackie, but

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Speaker 11: it is significant in the sense that one of the

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Speaker 11: biggest concerns that investors have had and companies have had

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Speaker 11: about the incoming administration will be what happens on trade

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Speaker 11: and on tariff's just owing to the widespread potential economic impact.

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Speaker 11: The Reuters report does not specify which countries would be targeted.

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Speaker 11: It's unclear how detailed Trump got in the conversation with

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Speaker 11: Republican lawmakers, but we are going to hear from the

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Speaker 11: President later today. He is holding a news conference with

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Speaker 11: the visiting Prime Minister of Japan at the White House

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Speaker 11: in the one o'clock hour, and this is certain to

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Speaker 11: be one of the top questions at the agenda, and

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Speaker 11: he may even use the moment to make the announcement

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Speaker 11: himself right there.

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Speaker 3: And look, taris feed into inflation anxiety, that feeds into

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Speaker 3: the lower consumer confidence data we got today as well,

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Speaker 3: so there is a wider economic impact here. I wonder

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Speaker 3: if with Japanese leadership we hear more about AI as well.

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Speaker 3: And we know that Mark Zuckerberg, riding high on his

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Speaker 3: share price at the moment, has gone to the White

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Speaker 3: House to discuss AI leadership too well.

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Speaker 11: Caro AI has been one of the early themes of

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Speaker 11: the Trump administration, and the President, in his very first

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Speaker 11: day in office, rescinded the Biden executive order that sought

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Speaker 11: to put more guardrails in the industry, and he since

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Speaker 11: signed his own order looking to launch further development of

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Speaker 11: the industry here. And then of course we saw the

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Speaker 11: announcement with SoftBank's Masseo she Soon Open Ai, Sam Altman

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Speaker 11: and Oracles Larry Ellison in the Oval Office at the

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Speaker 11: White House to talk about potential investment here in the

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Speaker 11: US of up to five hundred billion dollars. And we'll

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Speaker 11: be looking to see if Masseo she Saan even shows

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Speaker 11: up again at the White House today. He has been

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Speaker 11: a frequent companion to Trump late leap at mar A

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Speaker 11: Lago and more recently at the White House to talk

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Speaker 11: further about this what the Japanese investment firms plans are

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Speaker 11: here in the US, but also what Japan's plans are

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Speaker 11: for developing AI there as well.

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Speaker 2: Mike, there's another companion that Trump has, and that's Elon

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Speaker 2: Musk and his group. DOGE has been storming across Washington

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Speaker 2: looking for savings. But in that video you saw Besson

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Speaker 2: trying to allay concerns that he did not have access

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Speaker 2: to non read only information. But what did he say

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Speaker 2: about having access in the first place. Does he agree

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Speaker 2: with what DOJE is doing in Washington?

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Speaker 11: Well, he endorsed it, and he indicated that he was

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Speaker 11: completely aligned with Elon Musk when he came to this

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Speaker 11: effort to find savings to reduce the size of the

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Speaker 11: federal government and to also make the systems more efficient.

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Speaker 11: And of course, during the conversation with our colleague Sileia Mosen,

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Speaker 11: we heard the Treasury Secretary point to the IRS and

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Speaker 11: its antiquated systems, you know, those networks and that hardware

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Speaker 11: is decades old, and it has been repeatedly cited by

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Speaker 11: the Government Accountability Office as something that federal agencies and

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Speaker 11: administrations need to address. That Congress needs to fund the

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Speaker 11: agency more to replace the systems, to find money to

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Speaker 11: do that. And yet decades later, here we are. And

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Speaker 11: one of the reasons it is difficult to simply march

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Speaker 11: in and do this is that these older systems can

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Speaker 11: be sensitive and that you know, you heard the Treasury

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Speaker 11: Secretary talk about tickering. Even small changes carry the risk

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Speaker 11: of perhaps a disruption of some sort, and that is

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Speaker 11: probably the last thing this administration wants to see.

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Speaker 4: Mike Sheppard breaking all down. Thank you time now for

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Speaker 4: talking tech.

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Speaker 3: First up, Apple's latest budget iPhone is set to be

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Speaker 3: unveiled as soon as next week the long awaited lower

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Speaker 3: cost iPhone SE. It's expected to feature a new design

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Speaker 3: and Apple Intelligence. The updated SE is part of Apple's

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Speaker 3: efforts to boost its iPhone business, which saw one percent

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Speaker 3: decline in sales during the holiday quarter. Plus open Ai

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Speaker 3: is close to selecting additional data center campuses in Texas.

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Speaker 3: The sites are part of Stargate, the joint venture aiming

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Speaker 3: to invest five hundred billion dollars in USAI infrastructure over

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Speaker 3: the next four years, and speaking in Berlin earlier, open

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Speaker 3: Ai CEO Sam Altman said he'd also quote love to

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Speaker 3: help build a similar project in Europe, but added the

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Speaker 3: continent's regulations would determine how quickly the technology advances. And

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Speaker 3: cryptocurrency firm Gemini is said to be considering an IPO

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Speaker 3: as soon as this year. According to the sources, the

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Speaker 3: VINKLVAS backed firm is in talks with potential advisors, but

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Speaker 3: no final decision has been made yet.

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Speaker 2: Jackie and we stay on crypto, Elise Colleen Stellmark, managing partner,

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Speaker 2: joins us now Alice. Can this Gemini IPO spread a

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Speaker 2: wider wave of IPOs across the crypto space, or is

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Speaker 2: Gemini just an outlier.

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Speaker 4: Well, I hope so.

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Speaker 12: So the companies in the field have been maturing and

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Speaker 12: hopefully at the same time as ipo market is opening.

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Speaker 3: You, of course, are someone who has been in the

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Speaker 3: bitcoin space for years.

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Speaker 4: Not to age anyone here, but at least a decade.

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Speaker 4: You've been playing in this field time and time again.

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Speaker 3: We're seeing a broader adoption here, but it will talk

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Speaker 3: from a white house perspective, is reality being struck from adoption.

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Speaker 4: And an institutional level.

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Speaker 12: We are seeing incredible adoption and in twenty twenty five

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Speaker 12: there's great tail winds to that. At the end of January,

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Speaker 12: for example, Tether announced that it would launch on Bitcoin

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Speaker 12: and on Bitcoin's payment network Lightning, which means that it's

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Speaker 12: that trillions of dollars in activity and over four hundred

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Speaker 12: million Tether users could now be hosted on Bitcoin and

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Speaker 12: Lightning network. Those users are, in turn and Tether will

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Speaker 12: get the value of Lightning's instant settlement and cheaper transaction capabilities.

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Speaker 4: So fine.

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Speaker 3: You know, with speed, with ease, maybe comes this border adoption,

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Speaker 3: but stable coin regulation is not necessary for us really

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Speaker 3: for us to see the wave of us.

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Speaker 4: Doing payments through crypto.

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Speaker 12: Finally, regulatory clarity will is certainly overdue and will be helpful.

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Speaker 12: It's helpful both in terms of the startup ecosystem, and

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Speaker 12: because the startup ecosystem is relevant to bitcoin's adoption, it's

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Speaker 12: helpful to bitcoin itself as well.

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Speaker 2: Let's stick on this topic of regulation, as boring as

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Speaker 2: it may be sometimes, but crypto at this point in

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Speaker 2: its life cycle is still somewhat vulnerable to the whims

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Speaker 2: of Washington. We've seen that really wax and wane. What

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Speaker 2: can the administration do in the short term to really

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Speaker 2: cement crypto's momentum.

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Speaker 12: Sure, so, as I said, regulatory clarity will be helpful.

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Speaker 12: That bitcoin and startups don't exist in a silo. What

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Speaker 12: happens in the economy is also incredibly important, and both

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Speaker 12: the startups and to bitcoin, and we've seen that in

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Speaker 12: bitcoin's recent volatility. Now, what we're hoping is that as

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Speaker 12: regulatory clarity is available, that startups can continue along the

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Speaker 12: path that they have pursued, but more efficiently because their

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Speaker 12: capital doesn't need to be spent in creating sort of

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Speaker 12: redundancies and alternative paths that hedge against.

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Speaker 4: Future regulation.

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Speaker 2: There's some common ground between crypto and artificial intelligence. When

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Speaker 2: it comes to data centers, this has been a huge

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Speaker 2: topic and earnings for Microsoft and Amazon trying to build

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Speaker 2: out the capacity to run their models, and not so

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Speaker 2: dissimilar from Bitcoin, it takes a lot of energy consumption

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Speaker 2: and there's concerns that the power grid might not be

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Speaker 2: able to handle this demand. Are you worried at all

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Speaker 2: that perhaps these infrastructure constraints might impact Bitcoin's future growth.

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Speaker 12: That's a great question. So there is an important convergence

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Speaker 12: between bitcoin technologies and what's happening in generative AI and

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Speaker 12: the proliferation of llms and apps built on top.

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Speaker 4: Now, from an.

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Speaker 12: Energy perspective, of course, Bitcoin has been very productive in

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Speaker 12: providing anchor tenancy and mining off of renewable energy sources.

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Speaker 12: Bitcoin can do that because it can scale up or

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Speaker 12: down its mining demands based on the price of energy

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Speaker 12: at the time, which makes it responsive to demand cycles.

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Speaker 12: The Bitcoin mining can be applied to AI's energy needs

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Speaker 12: as well in the way that I just explained. But

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Speaker 12: bitcoin technologies can do more than that because of Bitcoin

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Speaker 12: Bitcoin's payment network lightning networks ability to scale payments. As

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Speaker 12: generative AI matures, it will it will need to access

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Speaker 12: micro payments at scale on a reliable network, and Lightning,

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Speaker 12: architected as a payment channel network, can uniquely do that

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Speaker 12: in the cryptosphere.

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Speaker 4: We've only got a minute left.

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Speaker 3: Lightning Labs is a course in your portfolio. Interestingly, so

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Speaker 3: social Energy is as well, and that's about renewable energy

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Speaker 3: feeding bitcoin minus. Where else is about to sort of

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Speaker 3: take off when it comes to portfolios, how what are

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Speaker 3: the startups?

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Speaker 4: Are you looking at?

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Speaker 12: Yes, So what's really taking off in twenty twenty five

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Speaker 12: is companies that are advancing the financialization of bitcoin itself.

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Speaker 12: So those are companies like, for example, a portfolio company

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Speaker 12: Causa that provides enterprise tools so that BTC can be

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Speaker 12: added to the balance sheet. We've seen that happen in

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Speaker 12: public companies. Bitwise recently reported that over seventy public companies

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Speaker 12: hold bitcoin. We're seeing the same sort of activity in

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Speaker 12: the private market that's facilitated by enterprise tools that allow

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Speaker 12: for auditability and internal controls that are otherwise standard. We

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Speaker 12: are also seeing products develop like bitcoin denominated life insurance

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Speaker 12: that's happening with our portfolio company meanwhile, which allows for

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Speaker 12: bitcoin holders to mature their own portfolios so that they're

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Speaker 12: represented with the bitcoin ETF holding bitcoin directly and.

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Speaker 4: With products to mature and.

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Speaker 3: Lias Colleens still Mark managing partner or it's great to

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Speaker 3: have you here in New York. Welcome back to Blue

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Speaker 3: Mead Technology. I'm Caroline Hide in New York and.

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Speaker 2: I'm Jackie Devalas in San Francisco.

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Speaker 4: They've got to check in on the market.

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Speaker 3: But actually one single name is what I want to

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Speaker 3: call out right now because even with lower markets, Meta

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Speaker 3: continues to be higher on the day, and extraordinarily it

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Speaker 3: is up for the fifteenth straight day. This is all

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Speaker 3: about AI commitment. This is all about general to AI.

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Speaker 3: We giving you a return on AI already because we're

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Speaker 3: seeing that investment pay off from large language model development

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Speaker 3: to indeed the advertising model that underpins Meta's performance. We're

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Speaker 3: up fifteen percent in the last month alone, So keep

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Speaker 3: an eye on that particular stock, Jackie. But we're also

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Speaker 3: looking at what's happening with the buzz around Sunday and

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Speaker 3: the Super Bowl draftkins carting off by one on a

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Speaker 3: quarter to percent. We want to see how much money

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Speaker 3: is placed in terms of sports betting ahead of this

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Speaker 3: integral game to those that like a little bit of

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Speaker 3: a flutter.

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Speaker 4: Jackie we're talking all things super Bowl.

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Speaker 2: It's the big Super Bowl weekend and fifteen billion dollars

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Speaker 2: in sports betting is about to get even bigger. For

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Speaker 2: more on the sports betting business and how the Super

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Speaker 2: Bowl plays a role, we're joined by Jason Robbins from DraftKings. Jason,

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Speaker 2: you're the chief executive of one of the largest sports

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Speaker 2: books out there, but you're also facing some tough competition,

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Speaker 2: especially from those that are actually using contracts linked to

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Speaker 2: sports games but aren't the traditional sports books. I'm talking

442
00:23:44,600 --> 00:23:48,360
Speaker 2: crypto dot com call sheet. What kind of competition are

443
00:23:48,359 --> 00:23:49,240
Speaker 2: you seeing.

444
00:23:50,440 --> 00:23:53,360
Speaker 13: Well, I think a lot of different forms of gaming

445
00:23:53,440 --> 00:23:56,680
Speaker 13: right now, and those aren't exactly gaming. They're classified as

446
00:23:56,960 --> 00:23:59,399
Speaker 13: I think financial contracts. But a lot of different forms

447
00:23:59,400 --> 00:24:02,399
Speaker 13: of gaming are appearing. Those are in the regulated market.

448
00:24:02,440 --> 00:24:06,240
Speaker 13: There's actually a much larger illegal market. It's competitive with us,

449
00:24:06,280 --> 00:24:08,840
Speaker 13: and they're much more difficult to compete with because they

450
00:24:08,840 --> 00:24:11,840
Speaker 13: don't have to follow any rules or regulations. So definitely

451
00:24:11,880 --> 00:24:13,960
Speaker 13: a lot of competition out there right now. But we

452
00:24:14,000 --> 00:24:15,840
Speaker 13: feel like we have the best product and the best

453
00:24:15,840 --> 00:24:18,040
Speaker 13: customer experience, and in the end, we think that'll win

454
00:24:18,080 --> 00:24:18,360
Speaker 13: the day.

455
00:24:19,280 --> 00:24:23,399
Speaker 3: And regulator after regulator, you convince Jason, what are the

456
00:24:23,520 --> 00:24:24,800
Speaker 3: winnings for you this weekend?

457
00:24:24,840 --> 00:24:27,520
Speaker 4: Do you think how many bets will be placed? What

458
00:24:27,600 --> 00:24:28,440
Speaker 4: are your takeaways?

459
00:24:29,800 --> 00:24:32,040
Speaker 13: Oh, I can't really say what I think the numbers

460
00:24:32,080 --> 00:24:34,560
Speaker 13: will be. But each year the Super Bowl gets bigger

461
00:24:34,600 --> 00:24:36,560
Speaker 13: and bigger, so I expect this to be our biggest

462
00:24:36,640 --> 00:24:38,919
Speaker 13: day ever. The Sunday, I should say, to be our

463
00:24:38,920 --> 00:24:41,760
Speaker 13: biggest day ever. You know, hard to know exactly what

464
00:24:41,800 --> 00:24:44,159
Speaker 13: the numbers will be, and right now it's a pretty

465
00:24:44,200 --> 00:24:47,000
Speaker 13: balanced line, so you know, in some ways that's good

466
00:24:47,040 --> 00:24:50,240
Speaker 13: because that means it won't be as volatile. Although right now,

467
00:24:50,280 --> 00:24:52,520
Speaker 13: because we have so much money on player props, it's

468
00:24:52,640 --> 00:24:56,200
Speaker 13: much bigger deal. Whether you see Saquon Barkley, Jalen Hurts,

469
00:24:56,200 --> 00:24:58,600
Speaker 13: and Travis Kelcey get in the end zone and who

470
00:24:58,640 --> 00:24:59,360
Speaker 13: actually wins the.

471
00:24:59,320 --> 00:25:03,160
Speaker 3: Game, they'll get our producers started on paulag as well.

472
00:25:03,160 --> 00:25:05,439
Speaker 3: But I'm really interested, Jason more broadly on what this

473
00:25:05,520 --> 00:25:06,720
Speaker 3: means for your marketing efforts.

474
00:25:06,800 --> 00:25:07,960
Speaker 4: Ultimately, this must be a.

475
00:25:07,920 --> 00:25:09,920
Speaker 3: Massive role for people to then come back time and

476
00:25:09,960 --> 00:25:10,399
Speaker 3: time again.

477
00:25:11,800 --> 00:25:14,199
Speaker 13: Well, Super Bowl is not only the biggest betting day

478
00:25:14,200 --> 00:25:15,880
Speaker 13: of the year, it's our biggest day of the year

479
00:25:15,920 --> 00:25:19,119
Speaker 13: for customer acquisition activation. So it's a huge day for

480
00:25:19,200 --> 00:25:21,320
Speaker 13: us marketing wise. We have a ton of stuff going

481
00:25:21,359 --> 00:25:24,320
Speaker 13: on all week leading up to the game and obviously

482
00:25:24,359 --> 00:25:27,440
Speaker 13: throughout the game, so big time for our marketing team,

483
00:25:27,520 --> 00:25:29,680
Speaker 13: and they've done a great job each year. We've won

484
00:25:29,720 --> 00:25:32,040
Speaker 13: the customer acquisition battle the last two Super Bowl I

485
00:25:32,040 --> 00:25:34,680
Speaker 13: think the last three Super Bowls, so we're very confident

486
00:25:34,720 --> 00:25:36,160
Speaker 13: in them and feel like we're gonna have a great

487
00:25:36,160 --> 00:25:37,040
Speaker 13: showing this year too.

488
00:25:38,080 --> 00:25:41,520
Speaker 2: There's another thing that's taking more people to their televisions

489
00:25:41,560 --> 00:25:45,480
Speaker 2: to watch the NFL. That's Taylor Swift. She's driven major

490
00:25:45,680 --> 00:25:48,399
Speaker 2: viewership since she's dating one of the Chiefs players, and

491
00:25:48,440 --> 00:25:53,080
Speaker 2: I'm curious DraftKings is capitalizing on this increase viewership in

492
00:25:53,080 --> 00:25:53,480
Speaker 2: any way.

493
00:25:54,920 --> 00:25:57,679
Speaker 13: Well, more viewership always is better for us, and I

494
00:25:57,720 --> 00:26:00,359
Speaker 13: think it's sort of this you know, positive cycle where

495
00:26:00,520 --> 00:26:02,800
Speaker 13: people bet more and they tend to watch the games

496
00:26:02,880 --> 00:26:05,439
Speaker 13: more and they watch longer, and then more people watching

497
00:26:05,560 --> 00:26:08,240
Speaker 13: needs more opportunities from them place wagers with us. So

498
00:26:08,680 --> 00:26:11,040
Speaker 13: that's a really good thing for our business. Obviously for

499
00:26:11,080 --> 00:26:13,240
Speaker 13: the ratings of the NFL. And I don't know how

500
00:26:13,320 --> 00:26:15,280
Speaker 13: much Tailor is contributing to it, but if she is

501
00:26:15,320 --> 00:26:15,840
Speaker 13: and thank you.

502
00:26:17,080 --> 00:26:19,760
Speaker 2: I'm not much of a gambler, but what can you

503
00:26:19,800 --> 00:26:22,360
Speaker 2: tell us about your current user base? Have you seen

504
00:26:22,359 --> 00:26:26,520
Speaker 2: any major shifts and who is putting wagers online?

505
00:26:28,119 --> 00:26:30,760
Speaker 13: You know, it's definitely been growing in terms of female

506
00:26:30,800 --> 00:26:34,760
Speaker 13: audience obviously, you know, for us, that's an important vector

507
00:26:34,840 --> 00:26:37,600
Speaker 13: because right now our audience is largely male, so we

508
00:26:37,640 --> 00:26:39,160
Speaker 13: think there's a lot of room to grow.

509
00:26:38,960 --> 00:26:39,639
Speaker 10: On that front.

510
00:26:40,000 --> 00:26:43,120
Speaker 13: In general, though the demographics haven't changed a whole lot.

511
00:26:43,680 --> 00:26:46,600
Speaker 13: Typically tends to be you know, on average age in

512
00:26:46,640 --> 00:26:50,120
Speaker 13: the mid thirties to let thirties, lots of people we think,

513
00:26:50,240 --> 00:26:54,119
Speaker 13: you know, coming from technology and educated backgrounds, typically a

514
00:26:54,240 --> 00:26:57,000
Speaker 13: you know, higher income consumer. So those tend to be

515
00:26:57,040 --> 00:27:00,520
Speaker 13: the demographics we see and that really hasn't changed we launch,

516
00:27:00,640 --> 00:27:03,159
Speaker 13: but definitely seeing more women betters coming in, which is

517
00:27:03,160 --> 00:27:03,640
Speaker 13: a great thing.

518
00:27:04,240 --> 00:27:07,080
Speaker 3: I'm interested in sort of the fundamentals of the business

519
00:27:07,400 --> 00:27:11,160
Speaker 3: in large part and not dictated by you, But how

520
00:27:11,359 --> 00:27:14,040
Speaker 3: what the outcome of the games are. I mean, customer

521
00:27:14,080 --> 00:27:16,600
Speaker 3: friendly wins was something that hit the numbers on the

522
00:27:16,680 --> 00:27:18,560
Speaker 3: last time that you came on and discussed them. So

523
00:27:19,040 --> 00:27:21,000
Speaker 3: how do you manage to navigate that and control your

524
00:27:21,040 --> 00:27:23,040
Speaker 3: own destiny?

525
00:27:23,200 --> 00:27:25,359
Speaker 13: Well, There is always that, and you know, this is

526
00:27:25,359 --> 00:27:27,800
Speaker 13: a business where we are taking a side of the action,

527
00:27:28,040 --> 00:27:30,960
Speaker 13: so there's going to be volatility in the results over

528
00:27:31,040 --> 00:27:34,159
Speaker 13: time that normalizes. So the things that we can control

529
00:27:34,240 --> 00:27:36,200
Speaker 13: or what we focus on, which are making sure we

530
00:27:36,280 --> 00:27:39,159
Speaker 13: provide a great product for our customers and trying to

531
00:27:39,200 --> 00:27:41,280
Speaker 13: create more ways for them to bet and more ways

532
00:27:41,280 --> 00:27:43,720
Speaker 13: for them to engage, and you know, making sure we

533
00:27:43,800 --> 00:27:46,479
Speaker 13: have a really great back end operation to our trading.

534
00:27:46,560 --> 00:27:49,960
Speaker 13: Risk management is a plus, using our marketing to help

535
00:27:50,040 --> 00:27:52,320
Speaker 13: drive parlays and other forms of betting that we think

536
00:27:52,320 --> 00:27:55,600
Speaker 13: are good for margins and different customer So those are

537
00:27:55,600 --> 00:27:57,760
Speaker 13: the things we focus on and the outcomes will be

538
00:27:57,760 --> 00:27:59,880
Speaker 13: the outcomes. There's been some years so we've had good

539
00:28:00,280 --> 00:28:03,000
Speaker 13: in twenty twenty two, we had a good year last year,

540
00:28:03,119 --> 00:28:06,520
Speaker 13: you know, twenty twenty four wasn't. But it definitely can

541
00:28:06,600 --> 00:28:08,400
Speaker 13: vary year to year and that's part of the business.

542
00:28:08,440 --> 00:28:09,160
Speaker 6: But overall it.

543
00:28:09,080 --> 00:28:12,320
Speaker 13: Doesn't really change fundamentals nor the trajectory of our business.

544
00:28:13,200 --> 00:28:16,679
Speaker 2: Well, growth drivers going forward, we've heard generative AI of

545
00:28:16,800 --> 00:28:19,600
Speaker 2: course is being kind of the key driver for a

546
00:28:19,600 --> 00:28:22,600
Speaker 2: lot of companies out there. How is Draftking starting to

547
00:28:22,640 --> 00:28:25,359
Speaker 2: incorporate this across the business, any chance we could see

548
00:28:25,520 --> 00:28:28,439
Speaker 2: any tasks taken over by AI versus a human in

549
00:28:28,480 --> 00:28:30,199
Speaker 2: the short term.

550
00:28:30,520 --> 00:28:33,360
Speaker 13: We think general of AI is a huge opportunity, and

551
00:28:33,400 --> 00:28:36,560
Speaker 13: it's really more about getting better outcomes for our customers.

552
00:28:37,200 --> 00:28:40,080
Speaker 13: Efficiency internally is simply a means to an end for that.

553
00:28:40,320 --> 00:28:42,800
Speaker 13: So everything from how do we make sure we have

554
00:28:42,960 --> 00:28:46,360
Speaker 13: great customer service and using chatbot and AI do that

555
00:28:46,640 --> 00:28:49,640
Speaker 13: to making sure that our products are as interactive as

556
00:28:49,680 --> 00:28:52,880
Speaker 13: possible and easy to use as possible. Lots of areas

557
00:28:52,880 --> 00:28:55,480
Speaker 13: for us to play AI really across the entire business.

558
00:28:55,560 --> 00:28:57,400
Speaker 13: A good chunk of our code. I think I read

559
00:28:57,840 --> 00:29:01,120
Speaker 13: a memo recently about fifteen percent something like that of

560
00:29:01,120 --> 00:29:04,040
Speaker 13: our code right now is being written by generative AI.

561
00:29:04,280 --> 00:29:06,280
Speaker 13: So we really feel like we have a long way

562
00:29:06,280 --> 00:29:08,560
Speaker 13: to go, but also are seeing some great traction with

563
00:29:08,640 --> 00:29:09,480
Speaker 13: internal adoption.

564
00:29:10,760 --> 00:29:12,640
Speaker 3: Jason Robbins, it's been great having you on thirty one

565
00:29:12,640 --> 00:29:15,000
Speaker 3: buys on the stock zero cells and I'm sure you

566
00:29:15,040 --> 00:29:16,960
Speaker 3: might be having a great time this weekend. Jason Robins,

567
00:29:17,040 --> 00:29:19,480
Speaker 3: Draft King See thanks for stopping by. We want to

568
00:29:19,520 --> 00:29:22,520
Speaker 3: stick with, of course, the Super Bowl and how people

569
00:29:22,560 --> 00:29:25,360
Speaker 3: are making bets in the outcome meany megs Ara Boodoay

570
00:29:25,600 --> 00:29:28,040
Speaker 3: is with us for more and ira just how much

571
00:29:28,080 --> 00:29:29,840
Speaker 3: money is going to be paced and how are they

572
00:29:29,840 --> 00:29:30,760
Speaker 3: pacing these bets?

573
00:29:30,960 --> 00:29:34,040
Speaker 14: So the best estimates are somewhere from one point four

574
00:29:34,080 --> 00:29:37,320
Speaker 14: to one point five billion in legal wagers, So that's

575
00:29:37,360 --> 00:29:40,000
Speaker 14: in the thirty eight states in Washington, DC that now

576
00:29:40,040 --> 00:29:43,440
Speaker 14: allow it with regulated sports books. But that is a

577
00:29:43,480 --> 00:29:47,440
Speaker 14: fraction of some unknown number that's probably at least as

578
00:29:47,520 --> 00:29:50,720
Speaker 14: much or more than the legal wagers still being placed

579
00:29:50,760 --> 00:29:55,160
Speaker 14: with offshore books, illegal bookies, casual bets. So the bet

580
00:29:55,200 --> 00:29:57,320
Speaker 14: we don't know kind of the full size of that

581
00:29:57,440 --> 00:29:59,800
Speaker 14: dark pool of money, but that is kind of part

582
00:29:59,840 --> 00:30:02,320
Speaker 14: of the job of DraftKings and fandals to keep pulling

583
00:30:02,360 --> 00:30:05,960
Speaker 14: people into the regulated environment and adding to the number

584
00:30:05,960 --> 00:30:07,480
Speaker 14: of states that allow it.

585
00:30:08,840 --> 00:30:12,360
Speaker 2: There's new entrance coming into the space, and you know,

586
00:30:12,480 --> 00:30:16,600
Speaker 2: not so long ago Robin Hood was offering the opportunity

587
00:30:16,680 --> 00:30:20,160
Speaker 2: to be able to participate in Super Bowl bets. What

588
00:30:20,200 --> 00:30:22,400
Speaker 2: are you seeing in the competitive landscape?

589
00:30:22,600 --> 00:30:24,600
Speaker 14: Yeah, I mean that is the latest wrinkle in this.

590
00:30:24,720 --> 00:30:29,040
Speaker 14: We're seeing derivatives, exchanges, futures markets get into this. Crypto

591
00:30:29,080 --> 00:30:33,560
Speaker 14: dot Com and Calshi both come forward with swaps that

592
00:30:33,600 --> 00:30:37,480
Speaker 14: function a lot like sports bets, and they have used

593
00:30:37,480 --> 00:30:39,720
Speaker 14: the Super Bowl, which is the biggest betting day on

594
00:30:39,760 --> 00:30:43,360
Speaker 14: the US calendar, as a way to introduce this idea.

595
00:30:44,160 --> 00:30:47,640
Speaker 3: It's interesting almost around the election as well, you certainly

596
00:30:48,000 --> 00:30:50,560
Speaker 3: saw the predictions market and crypto come in as a

597
00:30:50,600 --> 00:30:54,720
Speaker 3: way of placing bets and bypassing regulations. Ultimately here in

598
00:30:54,760 --> 00:30:57,400
Speaker 3: the US, what is it apart from this being a

599
00:30:57,400 --> 00:31:00,960
Speaker 3: customer acquisition tool for the likes of DraftKings, fangil what

600
00:31:01,040 --> 00:31:02,640
Speaker 3: else can they use from this day?

601
00:31:02,840 --> 00:31:04,000
Speaker 4: How else can they drive?

602
00:31:04,080 --> 00:31:07,480
Speaker 3: Like the cannabis industry also has biggest competition, is basically illegal.

603
00:31:07,960 --> 00:31:10,680
Speaker 4: How do you turn attention to that? For the White

604
00:31:10,720 --> 00:31:11,640
Speaker 4: House and the administration?

605
00:31:12,320 --> 00:31:14,640
Speaker 14: I mean, I think the sportsbooks in the background are

606
00:31:14,760 --> 00:31:17,720
Speaker 14: asking regulators for clarity around this. You know, they want

607
00:31:17,760 --> 00:31:19,520
Speaker 14: to know do we need to go through state regulators

608
00:31:19,600 --> 00:31:21,560
Speaker 14: or can we go through the CFTC. You know, what

609
00:31:22,280 --> 00:31:24,640
Speaker 14: is the state of play? Because I think ultimately, if

610
00:31:24,640 --> 00:31:28,320
Speaker 14: it's possible to run a federally regulated sportsbook in some

611
00:31:28,400 --> 00:31:32,200
Speaker 14: fashion or exchange market that includes sports events, then they

612
00:31:32,280 --> 00:31:35,240
Speaker 14: might want to do that. Right So that is I

613
00:31:35,280 --> 00:31:38,640
Speaker 14: think right now it's really about sort of letting regulators

614
00:31:39,480 --> 00:31:43,640
Speaker 14: pride clarity, They hope soon about kind of what's allowed

615
00:31:43,640 --> 00:31:46,440
Speaker 14: and what's not. Because you're right, you know that this

616
00:31:46,480 --> 00:31:50,080
Speaker 14: is a huge day for bringing in new customers, and

617
00:31:50,680 --> 00:31:53,240
Speaker 14: I think they see this as potentially a competitive threat.

618
00:31:54,400 --> 00:31:56,760
Speaker 3: It's been great talking to you. We all ahead to

619
00:31:56,800 --> 00:31:58,640
Speaker 3: the Sunday big game. Blue megs are a bad way.

620
00:31:58,840 --> 00:32:00,600
Speaker 3: We thank you, Jackie.

621
00:32:01,120 --> 00:32:04,680
Speaker 2: Coming up, shares of Affirm jump after posting a second

622
00:32:04,760 --> 00:32:07,720
Speaker 2: quarter earnings beat and a strong outlook. We speak with

623
00:32:07,840 --> 00:32:41,760
Speaker 2: CEO Max Levchin next. Shares a fintech company, Affirm are

624
00:32:41,960 --> 00:32:45,520
Speaker 2: soaring in today's trade as the company posted second quarter

625
00:32:45,600 --> 00:32:49,280
Speaker 2: results that beat estimates along with a strong outlook for more.

626
00:32:49,440 --> 00:32:52,520
Speaker 2: I have Max left Chin, a firm CEO, with me

627
00:32:52,600 --> 00:32:56,200
Speaker 2: here in San Francisco. Max, what are your results telling

628
00:32:56,240 --> 00:32:59,400
Speaker 2: us about the consumer? Because as I think about it,

629
00:32:59,440 --> 00:33:02,280
Speaker 2: does it mean that they're spending more or does it

630
00:33:02,360 --> 00:33:05,040
Speaker 2: mean that their budgets are pinched and resorting to breaking

631
00:33:05,160 --> 00:33:05,920
Speaker 2: up their payments.

632
00:33:07,040 --> 00:33:11,080
Speaker 15: I think our results are telling you that consumers prefer

633
00:33:11,360 --> 00:33:16,240
Speaker 15: a firm. They chose us as their preferred shopping tool. Obviously,

634
00:33:16,280 --> 00:33:19,800
Speaker 15: we outgrew the industry. We outgrew a lot of the

635
00:33:19,920 --> 00:33:23,760
Speaker 15: retail numbers. So clearly folks are recognizing that the tool

636
00:33:23,760 --> 00:33:27,479
Speaker 15: we've built for them is safe and useful, and we

637
00:33:27,520 --> 00:33:29,800
Speaker 15: are delighted to help them with their holiday shopping.

638
00:33:30,000 --> 00:33:31,560
Speaker 4: And beyond what are they spending on.

639
00:33:31,720 --> 00:33:33,760
Speaker 2: What sorts of new merchants as well have come on

640
00:33:33,760 --> 00:33:34,760
Speaker 2: the platform.

641
00:33:35,400 --> 00:33:39,719
Speaker 15: You know, we're available at almost eighty percent last I

642
00:33:39,800 --> 00:33:43,000
Speaker 15: checked of old US e commerce, and so we're really

643
00:33:43,080 --> 00:33:45,680
Speaker 15: very widely distributed at this point, from general merchandise to

644
00:33:46,680 --> 00:33:50,960
Speaker 15: everything in between. The standoard categories over the holiday period

645
00:33:51,200 --> 00:33:53,880
Speaker 15: were travel, which continues, by the way to be really

646
00:33:53,880 --> 00:33:56,640
Speaker 15: strong even now, dissipation of super goals. People need to

647
00:33:56,680 --> 00:33:59,080
Speaker 15: get to super role and tickets are not cheap and

648
00:33:59,080 --> 00:34:03,080
Speaker 15: so we're there to help. But also electronics, general merchandise

649
00:34:03,120 --> 00:34:03,960
Speaker 15: is always really strong.

650
00:34:04,000 --> 00:34:06,080
Speaker 10: So across the board there's been just a lot of

651
00:34:06,200 --> 00:34:07,320
Speaker 10: really good results.

652
00:34:07,840 --> 00:34:11,520
Speaker 3: Interesting the Expedia also did very well given its exposure

653
00:34:11,560 --> 00:34:15,320
Speaker 3: to travel Max. I mean, the analysts love the numbers.

654
00:34:15,400 --> 00:34:18,200
Speaker 3: Mazoo Hoo just says you're crushing it. Where do you

655
00:34:18,280 --> 00:34:22,120
Speaker 3: want to even more finess? Where is your target right now?

656
00:34:24,760 --> 00:34:26,560
Speaker 10: You know, we have a lot of work to do still.

657
00:34:26,600 --> 00:34:30,120
Speaker 15: You know, I appreciate Dan dolv and the picture of

658
00:34:30,120 --> 00:34:32,560
Speaker 15: perfect comment. I think that that's just extremely kind of him,

659
00:34:33,080 --> 00:34:35,960
Speaker 15: and we're very proud of these results. Obviously, we got

660
00:34:36,000 --> 00:34:39,120
Speaker 15: another half a fiscal year to go. We got a

661
00:34:39,239 --> 00:34:42,320
Speaker 15: date with GAP operating income positive.

662
00:34:42,480 --> 00:34:44,160
Speaker 10: It's coming up. Very excited about that.

663
00:34:45,120 --> 00:34:47,120
Speaker 15: We just launched in the UK, so going to keep

664
00:34:47,160 --> 00:34:49,080
Speaker 15: growing there, keep signing new merchants.

665
00:34:49,239 --> 00:34:52,680
Speaker 10: We have exceptionally strong growth with our.

666
00:34:52,520 --> 00:34:55,319
Speaker 15: Card product that just order than doubled both on the

667
00:34:55,360 --> 00:34:58,279
Speaker 15: active cards and the volume on these cards. So just

668
00:34:58,280 --> 00:35:01,040
Speaker 15: continue investing in what's really going well for us there,

669
00:35:01,760 --> 00:35:04,160
Speaker 15: and you know, many things to do.

670
00:35:04,920 --> 00:35:08,960
Speaker 3: What's so interesting is look basically, credit rating company Fico

671
00:35:09,000 --> 00:35:12,720
Speaker 3: recently did a big study with your help showing about

672
00:35:12,760 --> 00:35:15,879
Speaker 3: the impact of by now pay later loans opening closing them,

673
00:35:15,880 --> 00:35:18,520
Speaker 3: what it does for credit scores. It actually makes them

674
00:35:18,600 --> 00:35:20,560
Speaker 3: higher or stays the same max.

675
00:35:20,600 --> 00:35:22,799
Speaker 4: How can you really breathe this into the.

676
00:35:22,680 --> 00:35:26,399
Speaker 3: Market to shake off some of the negativity around by

677
00:35:26,400 --> 00:35:28,760
Speaker 3: now pay later and show that really the data proves

678
00:35:28,800 --> 00:35:30,960
Speaker 3: out that this is strong and it doesn't impact you.

679
00:35:32,440 --> 00:35:35,520
Speaker 15: I think the most important metric I care about and

680
00:35:35,560 --> 00:35:38,200
Speaker 15: we care about as a company is consumer adoption and

681
00:35:38,600 --> 00:35:42,920
Speaker 15: last quarter strong growth and prior quarters show that folks

682
00:35:43,000 --> 00:35:46,319
Speaker 15: understand the value that we bring, the certainty, the sense

683
00:35:46,320 --> 00:35:49,879
Speaker 15: of control we uniquely perhaps in the industry, don't charge

684
00:35:49,960 --> 00:35:52,319
Speaker 15: late fees, don't compound interest, don't do deferred interest.

685
00:35:52,360 --> 00:35:55,319
Speaker 10: To the product really is a healthy financial choice.

686
00:35:55,360 --> 00:35:57,840
Speaker 15: It's a much better product than your credit card and

687
00:35:57,960 --> 00:36:00,279
Speaker 15: just let anything else out there. And so I think

688
00:36:00,320 --> 00:36:03,400
Speaker 15: the consumer has long understood the value we provide. This

689
00:36:03,560 --> 00:36:07,399
Speaker 15: study is gratifying because it shows that when consumers use

690
00:36:07,480 --> 00:36:11,000
Speaker 15: a firm, given that we already report majority of these

691
00:36:11,160 --> 00:36:14,480
Speaker 15: loan results to the credit reporting agencies, they're actually building

692
00:36:14,520 --> 00:36:16,960
Speaker 15: their credit history and improving their credit scores so long

693
00:36:17,080 --> 00:36:20,240
Speaker 15: as they are responsible barbers. And so it's just another

694
00:36:20,520 --> 00:36:23,800
Speaker 15: confirmation point that what we've built works. It helps consumers

695
00:36:24,080 --> 00:36:26,040
Speaker 15: on a daily basis and for the long term.

696
00:36:26,080 --> 00:36:28,640
Speaker 2: Okay, speaking of other consumers across the pond, you mentioned

697
00:36:28,680 --> 00:36:31,640
Speaker 2: the United Kingdom. You just expanded there, But it's also

698
00:36:31,640 --> 00:36:36,120
Speaker 2: coming at a time when regulators are starting to scrutinize

699
00:36:36,480 --> 00:36:39,560
Speaker 2: by now pay later practices. How does that affect your

700
00:36:39,560 --> 00:36:40,520
Speaker 2: expansion plans?

701
00:36:40,800 --> 00:36:44,879
Speaker 15: So in part because we are so focused on being

702
00:36:44,920 --> 00:36:48,160
Speaker 15: honest and transparent. Our mission literally states that we must

703
00:36:48,200 --> 00:36:51,879
Speaker 15: build honest financial products to improve lives. We've always taken

704
00:36:51,960 --> 00:36:54,480
Speaker 15: the position that we want to engage with the regulators,

705
00:36:54,520 --> 00:36:57,200
Speaker 15: want to make sure thoughtful regulation takes place. And so

706
00:36:57,320 --> 00:36:59,799
Speaker 15: my first meeting, literally when I landed across the pond,

707
00:36:59,880 --> 00:37:05,160
Speaker 15: was to meet with several of His Majesty's Treasury officials

708
00:37:05,200 --> 00:37:06,920
Speaker 15: to make sure they understand who we are, what we

709
00:37:06,960 --> 00:37:10,279
Speaker 15: stand for, and understand the regulatory goals. And we will

710
00:37:10,320 --> 00:37:12,839
Speaker 15: continue to engage with regulators, certainly in the UK, but

711
00:37:13,239 --> 00:37:15,760
Speaker 15: in the US as well in Canada where we also operate.

712
00:37:16,040 --> 00:37:18,960
Speaker 15: So we're very pro thoughtful regulation.

713
00:37:19,200 --> 00:37:22,040
Speaker 2: Talk to us, Talk to us about AI. Because you

714
00:37:22,120 --> 00:37:26,760
Speaker 2: have a chatbot that handle twenty thousand inquiries on Black Friday,

715
00:37:26,760 --> 00:37:30,040
Speaker 2: as you rate per day per day, I mean, at

716
00:37:30,080 --> 00:37:32,319
Speaker 2: what point will you be able to kind of use

717
00:37:32,360 --> 00:37:36,640
Speaker 2: that AI technology perhaps across your platform. Could we expect

718
00:37:36,680 --> 00:37:40,000
Speaker 2: to see them taking over any human tasks for example?

719
00:37:41,320 --> 00:37:43,240
Speaker 10: We see AI as a productivity enhancer.

720
00:37:43,440 --> 00:37:46,440
Speaker 15: We're not replacing humans with robots here and that's definitely

721
00:37:46,440 --> 00:37:50,200
Speaker 15: not our plan, but there's incredible productivity gains to be had.

722
00:37:50,360 --> 00:37:53,400
Speaker 15: So the chatbot is widely available. It handles two thirds

723
00:37:53,440 --> 00:37:57,399
Speaker 15: of consumer queries today without any human involvement. But any

724
00:37:57,440 --> 00:37:59,239
Speaker 15: time you wish to speak to a human, you can, like,

725
00:37:59,280 --> 00:38:00,719
Speaker 15: all you need to do is say, please put me

726
00:38:00,760 --> 00:38:03,040
Speaker 15: through to a person, and that's what happened, and that's

727
00:38:03,080 --> 00:38:05,640
Speaker 15: exactly what we intend to do. Not just with customer service,

728
00:38:06,000 --> 00:38:08,919
Speaker 15: we use AI to do all sorts of really really

729
00:38:08,920 --> 00:38:11,359
Speaker 15: interesting things. For example, we must, as part of our

730
00:38:11,360 --> 00:38:16,400
Speaker 15: regulatory obligation, track that merchants advertise and promote a firm

731
00:38:16,560 --> 00:38:20,160
Speaker 15: responsibly and don't promote things that we want finance.

732
00:38:19,880 --> 00:38:21,080
Speaker 10: Or misrepresented terms.

733
00:38:21,160 --> 00:38:23,800
Speaker 15: So we have an LM based system that we've built

734
00:38:23,800 --> 00:38:28,160
Speaker 15: internally to track it, called the Prohibited GPT. Funny name

735
00:38:28,200 --> 00:38:31,239
Speaker 15: but extraordinarily effective, something that humans cannot do.

736
00:38:31,320 --> 00:38:33,040
Speaker 10: There are millions and millions of.

737
00:38:33,040 --> 00:38:35,799
Speaker 15: Points across the web where our name is mentioned and

738
00:38:36,040 --> 00:38:38,800
Speaker 15: it is our responsibility to make sure this the terms

739
00:38:38,800 --> 00:38:41,439
Speaker 15: being advertised are accurate and so it's a great tool

740
00:38:41,520 --> 00:38:44,160
Speaker 15: that AI can do for us and humans will never

741
00:38:44,200 --> 00:38:44,920
Speaker 15: be able to keep up with.

742
00:38:45,000 --> 00:38:48,000
Speaker 10: So that is a blueprint of how we use AI everywhere.

743
00:38:48,320 --> 00:38:50,920
Speaker 3: Briefly, is that your main area of investment? Where else

744
00:38:51,000 --> 00:38:52,799
Speaker 3: do you have to be spending to grow?

745
00:38:54,400 --> 00:38:59,160
Speaker 15: You know, we grow primarily with the help of our merchants.

746
00:38:59,320 --> 00:39:02,640
Speaker 15: We look at our numbers, we'll see that our advertising

747
00:39:02,719 --> 00:39:06,680
Speaker 15: and marketing budgets are incredibly modest, and that is because

748
00:39:06,719 --> 00:39:13,000
Speaker 15: we partner with extraordinary companies, extraordinary scale, extraordinary consumer obsessed ethosite,

749
00:39:13,160 --> 00:39:16,880
Speaker 15: just Amazon and Walmart and Target and many many brands

750
00:39:16,960 --> 00:39:20,279
Speaker 15: that folks know and love. They promote our service to

751
00:39:20,680 --> 00:39:23,840
Speaker 15: their shoppers, and that's how consumers first find out what

752
00:39:23,920 --> 00:39:25,239
Speaker 15: we stand for, who we are, and how we.

753
00:39:25,160 --> 00:39:25,759
Speaker 10: Can help them.

754
00:39:26,120 --> 00:39:30,920
Speaker 15: So our growth is predominantly driven by our partnerships investments

755
00:39:30,920 --> 00:39:34,400
Speaker 15: in technology. That's where we invest in exciting things like

756
00:39:34,640 --> 00:39:37,480
Speaker 15: Genera AI and productivity, and we know exactly how to

757
00:39:37,480 --> 00:39:39,960
Speaker 15: budget it, so we don't ever spend in those things either.

758
00:39:40,239 --> 00:39:43,600
Speaker 3: Nx Levchin, a firm CEO, numbers out best day for

759
00:39:43,600 --> 00:39:43,920
Speaker 3: the stocks.

760
00:39:43,960 --> 00:39:46,279
Speaker 4: It's November the eleventh. Thanks so much for joining.

761
00:39:53,600 --> 00:39:53,839
Speaker 14: Boy.

762
00:39:53,920 --> 00:39:55,040
Speaker 4: It has been a week of earnings.

763
00:39:55,080 --> 00:39:56,839
Speaker 3: Let's just dwell on what's come out after the bell

764
00:39:56,920 --> 00:39:59,200
Speaker 3: yesterday and what drives the stock market today. Amazon on

765
00:39:59,200 --> 00:40:02,600
Speaker 3: the downside, biggest points contribution, dragging indices lower or off

766
00:40:02,600 --> 00:40:07,640
Speaker 3: by four percent. AWS growth not accelerating.

767
00:40:07,000 --> 00:40:08,080
Speaker 4: Because it can't meet demand.

768
00:40:08,120 --> 00:40:10,000
Speaker 3: We're going to talk about one hundred billion dollars invested

769
00:40:10,000 --> 00:40:12,920
Speaker 3: in capacity Pinterest having its best day since May of

770
00:40:13,040 --> 00:40:15,680
Speaker 3: last year, up sixteen percent as it beats expectations. All

771
00:40:15,719 --> 00:40:20,120
Speaker 3: about GENAI investment. Expedia best day says November twenty twenty three,

772
00:40:20,600 --> 00:40:23,040
Speaker 3: all about holiday bookings, beating expectations as well.

773
00:40:23,040 --> 00:40:23,880
Speaker 4: But let's get to it.

774
00:40:23,920 --> 00:40:26,719
Speaker 3: Amazon, the juggernaut manna seeing is here with us to

775
00:40:26,760 --> 00:40:29,720
Speaker 3: go through so many stocks, Let's just start with Amazon,

776
00:40:29,800 --> 00:40:33,000
Speaker 3: because most analysts seem to be upgrading Hoot price targets.

777
00:40:33,000 --> 00:40:35,640
Speaker 3: They lost their only cell rating. They are convinced that

778
00:40:35,680 --> 00:40:36,880
Speaker 3: this investment is worth it.

779
00:40:38,040 --> 00:40:38,279
Speaker 7: Weok.

780
00:40:38,320 --> 00:40:41,800
Speaker 16: I mean Amazon does have the largest cloud business almost

781
00:40:41,840 --> 00:40:44,640
Speaker 16: one hundred and fifteen billion dollars run rate growing at

782
00:40:44,719 --> 00:40:47,920
Speaker 16: nineteen percent, so it's quite impressive what they are able

783
00:40:48,000 --> 00:40:51,880
Speaker 16: to do. The one I would say kind of negative

784
00:40:52,000 --> 00:40:55,400
Speaker 16: I would cite here is that Microsoft is the only

785
00:40:55,480 --> 00:40:59,400
Speaker 16: one that has quantified their AI contribution. They said it

786
00:40:59,520 --> 00:41:03,680
Speaker 16: was thirteen billion dollar run rate this quarter. Now, in

787
00:41:03,719 --> 00:41:06,560
Speaker 16: the case of Google and now Amazon as well, we

788
00:41:06,680 --> 00:41:10,920
Speaker 16: don't know exactly what the AI workload contribution is. And

789
00:41:11,040 --> 00:41:16,200
Speaker 16: remember Amazon only competes in the infrastructure layer, whereas Microsoft

790
00:41:16,239 --> 00:41:19,719
Speaker 16: is selling you Office Copilot, GitHub Copilot, and Google is

791
00:41:19,719 --> 00:41:23,200
Speaker 16: also selling you other types of software. So that's where

792
00:41:24,080 --> 00:41:26,680
Speaker 16: I think if we had kind of known what the

793
00:41:26,760 --> 00:41:29,719
Speaker 16: AI contribution was, then it will be more clear in

794
00:41:29,800 --> 00:41:33,440
Speaker 16: terms of how that makes the shifting between traditional cloud

795
00:41:33,480 --> 00:41:34,840
Speaker 16: and AI workloads.

796
00:41:35,640 --> 00:41:38,440
Speaker 2: Wendy really quickly about thirty seconds left here, but this

797
00:41:38,560 --> 00:41:41,000
Speaker 2: across the wire not too long ago. Bill Ackman says,

798
00:41:41,200 --> 00:41:43,520
Speaker 2: Pershing Square owns about thirty million Uber shares.

799
00:41:43,520 --> 00:41:45,040
Speaker 4: What does this mean? What do you make of it?

800
00:41:45,880 --> 00:41:49,440
Speaker 16: Well, I mean when you look at Uber's valuation, Yeah,

801
00:41:50,280 --> 00:41:52,439
Speaker 16: I think clearly there was a case to be made

802
00:41:52,480 --> 00:41:55,240
Speaker 16: that you know, they trade at a cheaper valuation relative

803
00:41:55,280 --> 00:41:58,440
Speaker 16: to other marketplaces. So it looks like that valuation argument

804
00:41:58,560 --> 00:42:01,680
Speaker 16: is coming in compared to all the noise about autonomous

805
00:42:01,719 --> 00:42:02,720
Speaker 16: driving that we've been.

806
00:42:02,600 --> 00:42:05,840
Speaker 3: Hearing eight and a half percent best days since February

807
00:42:06,040 --> 00:42:08,160
Speaker 3: of this year. So in a few days ago, Man

808
00:42:08,239 --> 00:42:11,000
Speaker 3: deep Thing of Bloomberg Intelligence, thank you. That does it

809
00:42:11,000 --> 00:42:13,200
Speaker 3: for this edition of Bloomberg Technology