1 00:00:02,520 --> 00:00:13,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is alive 2 00:00:13,760 --> 00:00:17,560 Speaker 1: from coast to coast with Caroline Hide in New York 3 00:00:17,840 --> 00:00:19,840 Speaker 1: and Eva Low in San Francisco. 4 00:00:23,079 --> 00:00:24,800 Speaker 2: This is Bloomberg Tech coming up. 5 00:00:24,840 --> 00:00:28,880 Speaker 3: Anthropic and Google discussing a deal for cloud computing services 6 00:00:28,960 --> 00:00:32,720 Speaker 3: valued in the high tens of billions of dollars plus. 7 00:00:32,720 --> 00:00:36,560 Speaker 3: We breakdown earnings, Netflix and Texas Instruments in focus while 8 00:00:36,560 --> 00:00:39,959 Speaker 3: we await Tesla's results after the closing Bell and Hot 9 00:00:40,000 --> 00:00:42,199 Speaker 3: on the heels of AT and T zone earnings, we 10 00:00:42,280 --> 00:00:47,120 Speaker 3: discuss with the company's CEO, John Stanky. Let's get to 11 00:00:47,120 --> 00:00:52,280 Speaker 3: our top story overnight, Bloomberg breaking the story that Anthropic 12 00:00:52,479 --> 00:00:56,760 Speaker 3: is in talks with Alphabets, specifically Google, for cloud computing 13 00:00:56,800 --> 00:00:58,320 Speaker 3: capacity high tens. 14 00:00:58,040 --> 00:01:01,160 Speaker 2: Of billions of dollars. Tap user in the mix. 15 00:01:01,400 --> 00:01:04,640 Speaker 3: When we broke the story, alphabet Chez jumped in after 16 00:01:04,760 --> 00:01:07,880 Speaker 3: market Amazon fell. This is where we're trading right now 17 00:01:08,000 --> 00:01:08,880 Speaker 3: Wednesday's session. 18 00:01:09,280 --> 00:01:11,840 Speaker 2: I broke that story. We're blooming both. Rachel Mets Let's 19 00:01:11,880 --> 00:01:12,520 Speaker 2: get out to her. 20 00:01:12,920 --> 00:01:16,679 Speaker 3: Actually, Rachel like, the details are quite simple to understand 21 00:01:16,800 --> 00:01:19,200 Speaker 3: early talks, and they're around capacity. 22 00:01:19,280 --> 00:01:20,840 Speaker 2: But let's recap what we. 23 00:01:20,880 --> 00:01:25,080 Speaker 4: Know Yeah, so, as you said, the two companies have 24 00:01:25,160 --> 00:01:30,240 Speaker 4: been discussing a plan for Enthropic to use Google's tensor 25 00:01:30,280 --> 00:01:34,720 Speaker 4: processing units TPUs. These are chips that are are can 26 00:01:34,760 --> 00:01:36,080 Speaker 4: be used for a lot of things, but they also 27 00:01:36,160 --> 00:01:38,560 Speaker 4: can be used for EA workloads and Nanthropic, I think 28 00:01:38,560 --> 00:01:41,880 Speaker 4: it's important to remember, is already a customer of Google's 29 00:01:42,080 --> 00:01:45,880 Speaker 4: for its cloud service, and also Google is an investor 30 00:01:45,920 --> 00:01:50,240 Speaker 4: in Anthropic, and Aanthrotic is a similar deal with Amazon too, 31 00:01:50,560 --> 00:01:53,880 Speaker 4: So that's why you sort of see these these mixed reactions. 32 00:01:55,760 --> 00:01:58,480 Speaker 3: There has been a lot of reaction to our reporting. 33 00:01:58,560 --> 00:02:01,160 Speaker 3: Later in the program, we're going to speaker Intelligence about 34 00:02:01,160 --> 00:02:04,920 Speaker 3: their take on it. Anthropic have been busy of late, right. 35 00:02:05,000 --> 00:02:07,280 Speaker 3: We've reported that Dario ami Day did this kind of 36 00:02:07,280 --> 00:02:11,639 Speaker 3: tour of the Middle East seeking both money and compute capacity. 37 00:02:12,520 --> 00:02:14,920 Speaker 3: The compute capacity bit is where people are trying to 38 00:02:15,000 --> 00:02:18,399 Speaker 3: understand this, like is it that just Anthropic really needs 39 00:02:18,440 --> 00:02:20,920 Speaker 3: as much capacity as it can get, or is this 40 00:02:20,960 --> 00:02:24,160 Speaker 3: a story about how actually Google is kind of becoming 41 00:02:24,160 --> 00:02:27,280 Speaker 3: the better partner for Anthropic beyond an Amazon. 42 00:02:28,560 --> 00:02:30,240 Speaker 4: I think there's a couple of things that could be 43 00:02:30,280 --> 00:02:33,720 Speaker 4: happening here. One is that yes, building the kind of 44 00:02:34,160 --> 00:02:39,600 Speaker 4: AI models that Anthropic is building is extremely compute intensive, 45 00:02:39,680 --> 00:02:42,519 Speaker 4: and you can't just use like any cloud capacity you 46 00:02:42,520 --> 00:02:45,160 Speaker 4: could find anywhere, and you can't just use any ships. 47 00:02:45,200 --> 00:02:46,760 Speaker 4: You have to use certain ships that are going to 48 00:02:46,840 --> 00:02:49,639 Speaker 4: work well for the kinds of large language models they're 49 00:02:49,639 --> 00:02:52,560 Speaker 4: building and the kinds of models that they are serving 50 00:02:52,600 --> 00:02:56,320 Speaker 4: to people. So it seems like a vote confidence potentially 51 00:02:56,400 --> 00:02:59,080 Speaker 4: for Google and for its chips. I mean, hardly any 52 00:02:59,080 --> 00:03:03,800 Speaker 4: companies beyond Video AMD maybe one or two others have 53 00:03:04,080 --> 00:03:07,600 Speaker 4: chips that people are willing to be using for these 54 00:03:07,680 --> 00:03:11,840 Speaker 4: kinds of AI workloads. It also could make people a 55 00:03:11,880 --> 00:03:14,799 Speaker 4: little nervous about what it sets about Amazon and its 56 00:03:14,840 --> 00:03:18,200 Speaker 4: ability to provide the services that a company like Antropic needs. 57 00:03:19,080 --> 00:03:22,080 Speaker 3: Bloom both racial mets, thank you very much. Let's get 58 00:03:22,120 --> 00:03:25,000 Speaker 3: to the earning stories, starting with Texas Instruments in stockfell 59 00:03:25,080 --> 00:03:27,760 Speaker 3: the most in three months after it gave a lackluster 60 00:03:27,840 --> 00:03:31,839 Speaker 3: forecast for the current quarter. Bloomberg's chips reporter Ian King 61 00:03:31,919 --> 00:03:40,200 Speaker 3: is with us actually probably more simple story than we expected. 62 00:03:40,960 --> 00:03:44,800 Speaker 3: We got a lens into the health of analog devices. 63 00:03:45,680 --> 00:03:49,560 Speaker 3: Texas Instruments is analog chips. You covered the earnings blow 64 00:03:49,600 --> 00:03:51,040 Speaker 3: by blow. What do we need to know about this? 65 00:03:51,400 --> 00:03:54,320 Speaker 5: So the first off, the numbers not too bad. Fourteen 66 00:03:54,320 --> 00:03:57,960 Speaker 5: percent growth for most companies will be fine projecting something 67 00:03:58,480 --> 00:04:01,160 Speaker 5: in the region of eleven percent this current quarter. But 68 00:04:01,240 --> 00:04:03,520 Speaker 5: what they said was more important. What they said was 69 00:04:04,000 --> 00:04:06,680 Speaker 5: things are coming back. Everything's okay, but just not at 70 00:04:06,720 --> 00:04:09,480 Speaker 5: the pace that we had been expecting. There's still some 71 00:04:09,560 --> 00:04:13,400 Speaker 5: uncertainty out there. This is macro related. Companies aren't investing 72 00:04:13,440 --> 00:04:16,280 Speaker 5: in their factories perhaps as quickly as we had hoped. 73 00:04:16,480 --> 00:04:17,400 Speaker 2: And really they. 74 00:04:17,320 --> 00:04:19,279 Speaker 5: Were sort of painting this picture of a kind of 75 00:04:19,440 --> 00:04:23,080 Speaker 5: an anemic kind of return to growth for the whole industry. 76 00:04:23,279 --> 00:04:27,200 Speaker 3: When I was reviewing your story, the CEO said that 77 00:04:27,400 --> 00:04:33,240 Speaker 3: overall the semi conductor market recovery is continuing. That seems 78 00:04:33,240 --> 00:04:36,400 Speaker 3: a little bit in congruous with the market's reaction to 79 00:04:36,400 --> 00:04:38,800 Speaker 3: what's going on the socks down five percent, but also 80 00:04:38,920 --> 00:04:41,400 Speaker 3: kind of you know what's specific to them. 81 00:04:41,920 --> 00:04:46,200 Speaker 5: Well, what they're projecting is basically seasonal, Right, what would 82 00:04:46,200 --> 00:04:49,440 Speaker 5: happen normally if everything is equal in the fourth quarter. 83 00:04:50,440 --> 00:04:53,240 Speaker 5: The problem is with that is that if we're in 84 00:04:53,279 --> 00:04:55,800 Speaker 5: this recovery period, if we're in this bounce back from 85 00:04:55,800 --> 00:04:58,840 Speaker 5: this inventory correction that we've suffered. Things should be growing 86 00:04:58,920 --> 00:05:02,160 Speaker 5: quicker than that. People should be rushing to stock up, 87 00:05:02,200 --> 00:05:04,359 Speaker 5: people should be rushing to build new things, and they're not. 88 00:05:05,040 --> 00:05:06,920 Speaker 2: Bloomberg, se and King, thank you very much. 89 00:05:06,960 --> 00:05:09,080 Speaker 3: We actually just had some breaking news at the top 90 00:05:09,080 --> 00:05:12,560 Speaker 3: of the show, and it is moved shares of Google. 91 00:05:12,960 --> 00:05:14,120 Speaker 2: You can see there on the screen. 92 00:05:14,480 --> 00:05:18,920 Speaker 3: The company ran an algorithm on its Willow quantum computing 93 00:05:19,080 --> 00:05:23,039 Speaker 3: chip that can be repeated on similar platforms and outperform 94 00:05:23,120 --> 00:05:26,400 Speaker 3: classical supercomputers. A breakthrough, it said, clear as a path 95 00:05:26,440 --> 00:05:31,159 Speaker 3: for useful applications of quantum technology within five years. This 96 00:05:31,279 --> 00:05:35,560 Speaker 3: was detailed in a paper published Wednesday in the science 97 00:05:35,800 --> 00:05:38,279 Speaker 3: journal Nature. And you can see there on the screen 98 00:05:38,320 --> 00:05:40,839 Speaker 3: the right hand side of the chart. When those headlines hit, 99 00:05:41,279 --> 00:05:43,920 Speaker 3: Alphabet shares, who had given up the gain they'd seen 100 00:05:43,960 --> 00:05:47,679 Speaker 3: from our reporting on Anthropic, suddenly jumped in the session 101 00:05:47,720 --> 00:05:50,680 Speaker 3: to a gain of around two percent. We will continue 102 00:05:50,720 --> 00:05:53,920 Speaker 3: to track that story and alphabet shares throughout the show. Okay, 103 00:05:53,960 --> 00:05:59,080 Speaker 3: back to earnings. Another steep share drop. Netflix disappointed investors 104 00:05:59,080 --> 00:06:02,719 Speaker 3: with its results. The streaming giant blamed a tax dispute 105 00:06:02,720 --> 00:06:04,000 Speaker 3: with Brazil for. 106 00:06:04,040 --> 00:06:06,000 Speaker 2: A cut to its third quarter earnings. 107 00:06:06,080 --> 00:06:10,000 Speaker 3: Let's get more with Bloomberg's media editor Felix Gillette. This 108 00:06:10,160 --> 00:06:12,880 Speaker 3: tax issue. Like yesterday, I went on television all day 109 00:06:12,920 --> 00:06:15,880 Speaker 3: long saying, maybe there'll be a foreign currency benefit to 110 00:06:15,920 --> 00:06:19,719 Speaker 3: Netflix's earnings. We'll learn about advertising, but actually this tax 111 00:06:19,760 --> 00:06:21,000 Speaker 3: issue is the main story. 112 00:06:21,320 --> 00:06:22,000 Speaker 2: Just explain it. 113 00:06:23,400 --> 00:06:23,719 Speaker 1: Ah. 114 00:06:23,760 --> 00:06:26,080 Speaker 6: This is a long ago in dispute that Netflix has 115 00:06:26,200 --> 00:06:29,360 Speaker 6: warned about in violence before. They didn't factor it into 116 00:06:29,400 --> 00:06:31,960 Speaker 6: the forecast. They ended up having to pay several hundred 117 00:06:32,000 --> 00:06:34,240 Speaker 6: million dollars more to Brazil. They're saying it's a one 118 00:06:34,320 --> 00:06:38,000 Speaker 6: time deal, it's not going to be material impact moving forward. 119 00:06:38,240 --> 00:06:41,160 Speaker 6: They're trying to steer the attention back to the growth. 120 00:06:41,279 --> 00:06:43,919 Speaker 6: You know, seventeen point five percent growth in sales for 121 00:06:44,000 --> 00:06:47,280 Speaker 6: the quarter, and you know profit growth also up. 122 00:06:48,760 --> 00:06:51,159 Speaker 3: You know, we were talking Felix about the idea that 123 00:06:51,560 --> 00:06:54,240 Speaker 3: Netflix wants to be judged by its sort of traditional 124 00:06:54,240 --> 00:06:58,039 Speaker 3: financial metrics. Those were quite good generally speaking, right. 125 00:06:58,600 --> 00:07:01,800 Speaker 6: Yeah, yeah, I mean a fine at this point. You know, 126 00:07:01,839 --> 00:07:04,440 Speaker 6: I think investors were looking for more than fine. They 127 00:07:04,440 --> 00:07:07,200 Speaker 6: were looking for a complete blowout quarter, in part because 128 00:07:07,480 --> 00:07:10,000 Speaker 6: you know, they had such a strong slate of program 129 00:07:10,040 --> 00:07:13,680 Speaker 6: in the third quarter. You know, Wednesday new episodes, Quid Game, 130 00:07:13,760 --> 00:07:17,320 Speaker 6: new episodes, k Pop Demon Hunters. So at this point, yeah, 131 00:07:17,360 --> 00:07:20,120 Speaker 6: the programming looked good, the growth and sales look good. 132 00:07:20,200 --> 00:07:21,720 Speaker 2: But investors one and one. 133 00:07:23,040 --> 00:07:25,720 Speaker 3: Bloomberg's Felix Jellette really appreciate your time. 134 00:07:25,800 --> 00:07:27,120 Speaker 2: Thank you very much. A. 135 00:07:27,240 --> 00:07:30,679 Speaker 3: Yoko Yoshioka is a portfolio consulting director at the Wealth 136 00:07:30,760 --> 00:07:34,800 Speaker 3: Enhancement Group, which holds some of the major Magnificent seven 137 00:07:34,880 --> 00:07:37,760 Speaker 3: names Texas Instruments and I think we can also talk 138 00:07:37,800 --> 00:07:40,320 Speaker 3: a little bit about Netflix. That's where I quite like 139 00:07:40,400 --> 00:07:43,760 Speaker 3: to start earning. Season in technology can bring all kinds 140 00:07:43,760 --> 00:07:46,880 Speaker 3: of beautiful stories. Did you have a tax dispute with 141 00:07:46,920 --> 00:07:49,960 Speaker 3: Brazil on your Bingo card? For Netflix would tell us 142 00:07:50,000 --> 00:07:51,120 Speaker 3: about the world of streaming. 143 00:07:51,600 --> 00:07:55,559 Speaker 7: I did not have Brazil tax issues on my Bingo card. 144 00:07:56,200 --> 00:07:59,800 Speaker 7: But I think the Netflix earnings were actually pretty decent. 145 00:08:00,520 --> 00:08:04,080 Speaker 7: You know, we forget that Netflix has actually come a 146 00:08:04,120 --> 00:08:07,120 Speaker 7: long way from a free cash flow growth perspective. They 147 00:08:07,120 --> 00:08:09,640 Speaker 7: were only generating about one point six billion about two 148 00:08:09,680 --> 00:08:12,080 Speaker 7: and a half years ago, and now they're generating close 149 00:08:12,120 --> 00:08:15,360 Speaker 7: to eight billion dollars in free cash flow, and that's 150 00:08:15,680 --> 00:08:18,600 Speaker 7: slated to go to eleven billion dollars so we'd like 151 00:08:18,680 --> 00:08:22,520 Speaker 7: to focus on that metric versus the Brazilian tax issue. 152 00:08:23,160 --> 00:08:25,760 Speaker 3: Okay, team, let's leave the shares up, Ayoka, we're showing 153 00:08:25,800 --> 00:08:28,120 Speaker 3: shares on the screen. This stocks down almost ten percent, 154 00:08:28,480 --> 00:08:31,040 Speaker 3: on track for its biggest drop since April twenty twenty two. 155 00:08:31,840 --> 00:08:34,560 Speaker 3: What was the big picture story about the health of 156 00:08:34,640 --> 00:08:39,600 Speaker 3: streamers and streaming here and when Netflix sits in that landscape? 157 00:08:39,840 --> 00:08:42,720 Speaker 7: Sure, I think from a consumer standpoint, you know, Netflix 158 00:08:42,760 --> 00:08:47,360 Speaker 7: is one of those go to programs that consumers are 159 00:08:47,400 --> 00:08:50,160 Speaker 7: going to continue to go to. I think that, you know, 160 00:08:50,360 --> 00:08:54,280 Speaker 7: for Netflix, the content you mentioned has been very solid, 161 00:08:54,640 --> 00:08:57,800 Speaker 7: and even if the macro environment is a little shaky 162 00:08:57,840 --> 00:09:00,679 Speaker 7: out there, I think Netflix will continue to see subscriber 163 00:09:00,720 --> 00:09:03,040 Speaker 7: growth and that's what we'd like to see over time. 164 00:09:04,120 --> 00:09:06,880 Speaker 3: But Yoko, let's get back to our top story today. Overnight, 165 00:09:07,440 --> 00:09:10,520 Speaker 3: Rachel Davey and I broke the story that Google is 166 00:09:10,520 --> 00:09:15,000 Speaker 3: in early talks with Anthropic for a cloud computing deal 167 00:09:15,760 --> 00:09:18,640 Speaker 3: capacity in the high tens of billions of dollars. When 168 00:09:18,640 --> 00:09:22,319 Speaker 3: we broke that story, Alphabet shares really jumped in after market. 169 00:09:22,400 --> 00:09:25,440 Speaker 3: They've given up some of that gain in the market 170 00:09:25,559 --> 00:09:30,840 Speaker 3: open this morning, and Amazon fell wealth enhancement has some exposure, 171 00:09:30,920 --> 00:09:34,720 Speaker 3: particularly to Alphabet. What is your reaction to that reporting 172 00:09:34,760 --> 00:09:37,400 Speaker 3: and what does it signal to you for those companies involved. 173 00:09:37,720 --> 00:09:40,880 Speaker 7: Yeah, I think in general, the sort of clue to 174 00:09:40,960 --> 00:09:45,760 Speaker 7: me is just the infrastructure buildout is still in its 175 00:09:45,800 --> 00:09:49,920 Speaker 7: early phases, right. You know, we've heard so many announcements 176 00:09:50,040 --> 00:09:52,640 Speaker 7: over the last several months, and yet here we are 177 00:09:52,679 --> 00:09:55,240 Speaker 7: with another one. And just when you thought you weren't 178 00:09:55,320 --> 00:09:58,800 Speaker 7: going to get another announcement related to AI infrastructure buildouts, 179 00:09:58,920 --> 00:10:02,760 Speaker 7: you here we are Google and Anthropic. I think that 180 00:10:02,960 --> 00:10:05,520 Speaker 7: the race is clearly on and we'll have to see 181 00:10:05,640 --> 00:10:08,440 Speaker 7: who's really going to win, But the build out is 182 00:10:08,679 --> 00:10:10,320 Speaker 7: sort of still in its early phases. 183 00:10:12,480 --> 00:10:15,960 Speaker 3: The cloud computing market, as we've always understood it and 184 00:10:16,000 --> 00:10:20,439 Speaker 3: talked about it is AWS number one player, Google Cloud 185 00:10:20,679 --> 00:10:25,280 Speaker 3: number three player. In the specifics of this story, both 186 00:10:25,320 --> 00:10:29,280 Speaker 3: of those companies as it relates to AI workloads have 187 00:10:29,400 --> 00:10:32,800 Speaker 3: some questions to answer here. Right, So Amazon is also 188 00:10:32,840 --> 00:10:37,560 Speaker 3: a significant investor in Anthropic. Our reporting says that Anthropic 189 00:10:37,600 --> 00:10:41,520 Speaker 3: wants to use TPUs. What are you learning about the 190 00:10:41,559 --> 00:10:46,000 Speaker 3: competitive nature of Alphabet's cloud offering or Google's cloud offering 191 00:10:46,160 --> 00:10:48,400 Speaker 3: versus Amazon's in the AI domain. 192 00:10:49,160 --> 00:10:51,200 Speaker 7: Sure, so, I think we have to really dig into 193 00:10:51,240 --> 00:10:53,679 Speaker 7: this in terms of, you know, what are the TPUs 194 00:10:53,840 --> 00:10:58,120 Speaker 7: offering in terms of optimizing workflows that GPUs aren't, and 195 00:10:58,160 --> 00:11:01,600 Speaker 7: how is this better suited for you know, Google's sort 196 00:11:01,600 --> 00:11:05,320 Speaker 7: of overall workflow, and how they're going to be using 197 00:11:05,360 --> 00:11:09,280 Speaker 7: AI through Gmail and Google Maps and a lot of 198 00:11:09,320 --> 00:11:12,280 Speaker 7: their applications that they have in house. And then how 199 00:11:12,320 --> 00:11:15,679 Speaker 7: does that fit related to Amazon and how you know, 200 00:11:15,720 --> 00:11:19,000 Speaker 7: some of the algorithms are working for Amazon's you know, 201 00:11:19,360 --> 00:11:23,400 Speaker 7: suggestions for retail as well as advertising. I think there's 202 00:11:23,400 --> 00:11:26,280 Speaker 7: still a lot to dig into here in terms of 203 00:11:26,400 --> 00:11:27,880 Speaker 7: how this is all going to work out. 204 00:11:29,720 --> 00:11:33,680 Speaker 3: Texas Instruments is worth lingering on. I think, you know, 205 00:11:33,760 --> 00:11:36,720 Speaker 3: sometimes it's seen as almost like a crystal ball of 206 00:11:36,760 --> 00:11:39,679 Speaker 3: what all kinds of end markets around the world will 207 00:11:39,720 --> 00:11:44,720 Speaker 3: do coming up next because of how many analog chips 208 00:11:44,760 --> 00:11:45,720 Speaker 3: go into all kinds of things. 209 00:11:45,720 --> 00:11:47,120 Speaker 2: What was your read on the print there? 210 00:11:47,640 --> 00:11:47,960 Speaker 8: Sure? 211 00:11:48,040 --> 00:11:50,960 Speaker 7: So, I think in general, the you know, as Ian said, 212 00:11:52,080 --> 00:11:55,120 Speaker 7: the overall quarter and earnings were actually pretty decent fourteen 213 00:11:55,160 --> 00:11:59,160 Speaker 7: percent growth. But I think the bread through into industrial markets, 214 00:11:59,160 --> 00:12:03,000 Speaker 7: into autumn motive, into some of the consumer electronics that 215 00:12:03,040 --> 00:12:06,000 Speaker 7: are more basic really shows that we're not in a 216 00:12:06,040 --> 00:12:10,319 Speaker 7: macro environment that is growing gangbusters. So outside of all 217 00:12:10,360 --> 00:12:13,239 Speaker 7: of the AI investments that we're seeing in the economy, 218 00:12:13,480 --> 00:12:16,920 Speaker 7: we're not seeing that sort of economic growth takeoff as 219 00:12:17,000 --> 00:12:18,840 Speaker 7: much as I think people had hoped for. 220 00:12:21,000 --> 00:12:21,520 Speaker 2: We're in it. 221 00:12:21,920 --> 00:12:25,839 Speaker 3: This is it technology earning season, my super Bowl. I 222 00:12:25,880 --> 00:12:28,679 Speaker 3: don't know if it's your super Bowl. What was it 223 00:12:28,720 --> 00:12:30,960 Speaker 3: that we were expecting to hear and what do you 224 00:12:31,080 --> 00:12:33,880 Speaker 3: need to hear from the technology sector specifically the mag 225 00:12:33,920 --> 00:12:37,920 Speaker 3: seven I suppose to keep the direction of travel that 226 00:12:37,960 --> 00:12:39,840 Speaker 3: we have seen in equity markets. 227 00:12:39,880 --> 00:12:42,560 Speaker 7: Sure, so next week will be the big week for 228 00:12:42,640 --> 00:12:45,560 Speaker 7: all of this, including a FED meeting to cap it 229 00:12:45,600 --> 00:12:49,000 Speaker 7: all off too. So I think for us, we're always 230 00:12:49,040 --> 00:12:52,920 Speaker 7: going to be looking at commentary around CAPEX spend. I mean, 231 00:12:52,920 --> 00:12:55,520 Speaker 7: this is what really set it off years ago, and 232 00:12:55,600 --> 00:12:57,440 Speaker 7: we're going to continue to see whether or not that 233 00:12:57,600 --> 00:13:00,840 Speaker 7: spend continues from the hyperscalers or whether or not they 234 00:13:00,880 --> 00:13:02,920 Speaker 7: need to, you know, take a little bit of a pause. 235 00:13:03,240 --> 00:13:05,280 Speaker 7: But I think we're going to continue to see that spend. 236 00:13:05,320 --> 00:13:08,080 Speaker 7: I mean, we're seeing announcements left and right, and so 237 00:13:08,280 --> 00:13:11,040 Speaker 7: we'd like to kind of dig into that during earning season. 238 00:13:12,040 --> 00:13:15,520 Speaker 3: Do you expect that tariff specifically or any other Trump 239 00:13:15,559 --> 00:13:18,960 Speaker 3: administration policy will play out on the calls or in 240 00:13:19,000 --> 00:13:21,240 Speaker 3: the statements in. 241 00:13:21,240 --> 00:13:23,840 Speaker 7: The tech side. Maybe a little bit, but I don't 242 00:13:23,840 --> 00:13:26,280 Speaker 7: think it's going to be as prominent as some of 243 00:13:26,320 --> 00:13:30,400 Speaker 7: the consumer names have talked about with with tariffs and goods. 244 00:13:30,840 --> 00:13:32,880 Speaker 7: I think it's going to be a less of an issue, 245 00:13:33,480 --> 00:13:35,320 Speaker 7: you know. I think we've we've seen all of this 246 00:13:35,400 --> 00:13:39,200 Speaker 7: talk about exporting that has had a little bit more 247 00:13:39,240 --> 00:13:42,120 Speaker 7: of an impact, and the sort of tit for tat 248 00:13:42,160 --> 00:13:44,719 Speaker 7: with China that's probably going to be a little bit 249 00:13:44,760 --> 00:13:48,000 Speaker 7: more of an impact. But overall, I really do think 250 00:13:48,080 --> 00:13:50,840 Speaker 7: that investors are going to be focused on general CAPPAC 251 00:13:50,880 --> 00:13:55,520 Speaker 7: spend ROI around AI and you know how that's playing out. 252 00:13:56,240 --> 00:13:59,360 Speaker 3: O Yoka, Yoshioka, the Wealth Enhancement Group really appreciate you 253 00:13:59,480 --> 00:14:01,439 Speaker 3: rolling with the use of the day and a big 254 00:14:01,480 --> 00:14:04,520 Speaker 3: tech earning season coming up. At and T CEO John 255 00:14:04,559 --> 00:14:08,360 Speaker 3: Stankey joins us to talk about the company's earnings and 256 00:14:08,440 --> 00:14:11,600 Speaker 3: it was a big one. Investors still making up their minds. 257 00:14:11,640 --> 00:14:24,880 Speaker 3: That's next. This is Bloomberg Tech. Welcome to our Bloomberg 258 00:14:24,920 --> 00:14:28,000 Speaker 3: TV and radio audiences. Worldwide. We bring in AT and 259 00:14:28,040 --> 00:14:31,480 Speaker 3: T CEO John Stanky, the company reporting results this morning 260 00:14:31,720 --> 00:14:35,560 Speaker 3: that showed higher than expected subscriber growth, though some analysts 261 00:14:35,560 --> 00:14:40,240 Speaker 3: noting customer churn and average revenue per user showing signs 262 00:14:40,240 --> 00:14:40,720 Speaker 3: of strain. 263 00:14:41,400 --> 00:14:43,600 Speaker 2: John, it's great to have you back with us. You 264 00:14:43,600 --> 00:14:47,080 Speaker 2: know the story. Thanks for having You're welcome. It's like 265 00:14:47,400 --> 00:14:48,320 Speaker 2: a simple story. 266 00:14:48,600 --> 00:14:51,560 Speaker 3: You know, the data from the quarter is very clear 267 00:14:52,160 --> 00:14:56,360 Speaker 3: there was an element of promotion and marketing and deals 268 00:14:56,400 --> 00:14:57,120 Speaker 3: that drove it. 269 00:14:57,240 --> 00:14:58,640 Speaker 2: But how would you summarize it? 270 00:14:59,280 --> 00:15:01,880 Speaker 9: Look, we had really strong growth, as you indicated, and 271 00:15:01,920 --> 00:15:04,680 Speaker 9: we're really comfortable with our growth. As I think you're 272 00:15:04,720 --> 00:15:08,720 Speaker 9: probably aware, we've been focusing on customers that want to 273 00:15:08,720 --> 00:15:12,800 Speaker 9: buy both wireless and broadband from us, and when we 274 00:15:12,880 --> 00:15:16,320 Speaker 9: can do that, even if it's promotional, that's a good 275 00:15:16,360 --> 00:15:19,040 Speaker 9: customer to pick up because they have great lifetime values 276 00:15:19,080 --> 00:15:22,560 Speaker 9: and over time they'll churn less and they'll address that 277 00:15:22,760 --> 00:15:25,280 Speaker 9: very issue that you alluded to, which is the increasing 278 00:15:25,360 --> 00:15:29,280 Speaker 9: churn in the industry. And we kind of anticipate as 279 00:15:29,280 --> 00:15:31,560 Speaker 9: we acquire these customers, we're going to see a little 280 00:15:31,560 --> 00:15:35,800 Speaker 9: bit of hardpoop pressure, partly because we obviously give them 281 00:15:35,840 --> 00:15:39,800 Speaker 9: a better price for their loyalty, and over time we 282 00:15:39,840 --> 00:15:43,600 Speaker 9: move them up on the continuumus services we sell, so 283 00:15:44,280 --> 00:15:45,960 Speaker 9: excuse me, buy and largs. 284 00:15:45,960 --> 00:15:47,160 Speaker 8: We feel really good about it. 285 00:15:48,600 --> 00:15:50,200 Speaker 2: Oh, John, I don't know. 286 00:15:50,200 --> 00:15:51,680 Speaker 3: If you have some water there with you, Let me 287 00:15:51,720 --> 00:15:53,360 Speaker 3: give you a second, just to take a quick drink 288 00:15:53,400 --> 00:15:56,080 Speaker 3: if you need it. Of course in the quarter, and 289 00:15:56,120 --> 00:15:59,200 Speaker 3: we've discussed this with a number of the carriers. It 290 00:15:59,240 --> 00:16:01,960 Speaker 3: was iPhone set team. You know, I was there at 291 00:16:02,000 --> 00:16:03,840 Speaker 3: Kupatino Apple Park on the day. 292 00:16:03,680 --> 00:16:04,400 Speaker 2: Of its release. 293 00:16:05,000 --> 00:16:07,520 Speaker 3: Can you give us a real term sense, even if 294 00:16:07,520 --> 00:16:10,880 Speaker 3: it's from the promotion perspective, of how big a fact 295 00:16:10,880 --> 00:16:12,480 Speaker 3: of the iPhone seventeen was for you? 296 00:16:13,160 --> 00:16:16,320 Speaker 9: Well, I think it's not a huge factor, but clearly 297 00:16:16,520 --> 00:16:18,960 Speaker 9: there was a little bit of suppressed activity after the 298 00:16:19,080 --> 00:16:22,800 Speaker 9: last iPhone cycle a year ago. Maybe some folks anticipated 299 00:16:22,840 --> 00:16:25,000 Speaker 9: it was going to be a little bit larger customers 300 00:16:25,040 --> 00:16:27,960 Speaker 9: were seeing if it was really frame breaking and change 301 00:16:28,000 --> 00:16:32,080 Speaker 9: and concluded possibly that it wasn't and delayed waiting for 302 00:16:32,120 --> 00:16:34,280 Speaker 9: the next cycle. And I think, you know, you can 303 00:16:34,320 --> 00:16:37,800 Speaker 9: only suppress that activity for so long, and now the 304 00:16:37,800 --> 00:16:40,640 Speaker 9: new device comes out, people see what it is. So 305 00:16:40,720 --> 00:16:44,520 Speaker 9: there has been an increase over last year and maybe 306 00:16:44,520 --> 00:16:47,800 Speaker 9: some other previous years. It's not a record breaking cycle, 307 00:16:47,840 --> 00:16:51,000 Speaker 9: but it's strong and we're seeing that as a result. 308 00:16:51,120 --> 00:16:53,560 Speaker 9: But I don't think it's anything dramatically out of pattern, 309 00:16:53,680 --> 00:16:57,360 Speaker 9: given the suppression we've seen in the market, and we 310 00:16:57,360 --> 00:16:59,960 Speaker 9: were very effective at working through at four hundred thousan 311 00:17:00,160 --> 00:17:03,560 Speaker 9: in over four hundred thousand postpai vone netads. It shows 312 00:17:03,560 --> 00:17:05,560 Speaker 9: we can compete in that space and do well with it. 313 00:17:06,960 --> 00:17:09,600 Speaker 3: If you're joining us on Bloomberg Television Radio, we're speaking 314 00:17:09,600 --> 00:17:13,440 Speaker 3: to AT and Tco John Stanky final on the iPhone seventeen. 315 00:17:13,920 --> 00:17:16,280 Speaker 3: Will it be more of a factor in the three 316 00:17:16,280 --> 00:17:18,400 Speaker 3: month period that ends in December? 317 00:17:19,160 --> 00:17:22,840 Speaker 9: The holidays, well, the holiday season moving through the fourth 318 00:17:22,880 --> 00:17:25,959 Speaker 9: quarter is always a peak season for everybody in the industry. 319 00:17:26,000 --> 00:17:28,800 Speaker 9: I expect that's going to continue to be the case 320 00:17:28,880 --> 00:17:32,760 Speaker 9: this year. I don't see anything what we've had over 321 00:17:32,760 --> 00:17:35,400 Speaker 9: the first couple of weeks of the introduction to suggest 322 00:17:36,000 --> 00:17:38,440 Speaker 9: we're going to see a step function change from current 323 00:17:38,520 --> 00:17:41,560 Speaker 9: rate and pace. So all of our forward guidance that 324 00:17:41,560 --> 00:17:45,600 Speaker 9: we've given expects that it's going to be competitive, that 325 00:17:45,680 --> 00:17:47,840 Speaker 9: we're going to compete and continue to earn our fair 326 00:17:47,880 --> 00:17:51,560 Speaker 9: share of service revenues on those converged customers I talked about, 327 00:17:51,600 --> 00:17:55,000 Speaker 9: and I expect that it'll be as rambunctious in the 328 00:17:55,040 --> 00:17:57,320 Speaker 9: industry as it has been and we'll do just fine. 329 00:17:58,480 --> 00:17:58,720 Speaker 2: John. 330 00:17:58,760 --> 00:18:01,879 Speaker 3: If I turn on my division and watch a show 331 00:18:01,920 --> 00:18:04,480 Speaker 3: that has ads or a scroll on any given social 332 00:18:04,560 --> 00:18:09,359 Speaker 3: media timeline, I keep seeing AT and T talking about 333 00:18:09,359 --> 00:18:12,920 Speaker 3: itself as a home internet provider. I know that's been 334 00:18:12,920 --> 00:18:16,880 Speaker 3: a priority. Have you any evidence that that push has 335 00:18:16,920 --> 00:18:19,840 Speaker 3: been a success and that you have positioned AT and 336 00:18:19,880 --> 00:18:20,720 Speaker 3: T in that domain? 337 00:18:21,160 --> 00:18:23,639 Speaker 9: Well, I'm glad you're seeing those mean we must be 338 00:18:23,680 --> 00:18:26,240 Speaker 9: getting our right market and targets out there, and I 339 00:18:26,240 --> 00:18:29,520 Speaker 9: think this quarter was an excellent example of it. We 340 00:18:29,640 --> 00:18:34,800 Speaker 9: had our best broadband gain on our strategic products and 341 00:18:34,840 --> 00:18:39,080 Speaker 9: services fixed, wireless and fiber that we've had in eight years, 342 00:18:39,720 --> 00:18:42,520 Speaker 9: and so over five hundred and fifty thousand ADS on 343 00:18:42,600 --> 00:18:45,440 Speaker 9: those strategic products and a net gain of over two 344 00:18:45,480 --> 00:18:48,200 Speaker 9: hundred and thirty thousand of broadband total. It's the best 345 00:18:48,200 --> 00:18:50,000 Speaker 9: we've done in eight years. I think that's a good, 346 00:18:50,119 --> 00:18:55,159 Speaker 9: strong indication that it's working, especially when you consider the 347 00:18:55,240 --> 00:18:59,160 Speaker 9: industry has been rife with examples of our competitors adjusting 348 00:18:59,160 --> 00:19:01,639 Speaker 9: their offers trying to do different things to stem the 349 00:19:01,680 --> 00:19:04,520 Speaker 9: momentum we've had. So I feel really good about where 350 00:19:04,560 --> 00:19:06,520 Speaker 9: we're going on that front, and to the effect, we 351 00:19:06,520 --> 00:19:09,919 Speaker 9: can add that with wireless subscribers, which we're showing that 352 00:19:09,960 --> 00:19:12,600 Speaker 9: we can do over fifty percent of the time when 353 00:19:12,640 --> 00:19:16,800 Speaker 9: somebody buys our fixed wireless product and we're over forty 354 00:19:16,840 --> 00:19:20,320 Speaker 9: one percent penetrated on our fiber base. That's a winning 355 00:19:20,359 --> 00:19:23,560 Speaker 9: combination economically, and what kind of differentiates us from everybody 356 00:19:23,600 --> 00:19:24,480 Speaker 9: else in the industry. 357 00:19:26,000 --> 00:19:29,320 Speaker 3: Okay, shares a down a touch more than one percent, 358 00:19:29,440 --> 00:19:32,080 Speaker 3: which in the grand scheme of today is modest, is 359 00:19:32,080 --> 00:19:34,679 Speaker 3: a decline. The back and forth you had with the 360 00:19:34,720 --> 00:19:40,280 Speaker 3: analyst was, yes, churn is up and arpus are down, 361 00:19:40,680 --> 00:19:43,639 Speaker 3: but you seem not to be concerned about that. Why 362 00:19:44,200 --> 00:19:47,199 Speaker 3: Why is that not the metrics by which we should 363 00:19:47,400 --> 00:19:48,840 Speaker 3: should look to progress? 364 00:19:49,160 --> 00:19:51,360 Speaker 9: Yeah, part of it, I think ed as well, as 365 00:19:51,359 --> 00:19:53,520 Speaker 9: we've got a little bit of churn going on in 366 00:19:53,560 --> 00:19:57,560 Speaker 9: the industry from CEO changeouts and there's a little uncertainty 367 00:19:57,600 --> 00:20:00,399 Speaker 9: around what the competitive posture is going to and then 368 00:20:00,400 --> 00:20:02,399 Speaker 9: you look at the data points you just reference, and 369 00:20:02,920 --> 00:20:06,160 Speaker 9: we're the first to report, and people are asking what's 370 00:20:06,200 --> 00:20:09,160 Speaker 9: going to happen when we hear from everybody else, And 371 00:20:09,640 --> 00:20:12,920 Speaker 9: my answering your question is, we're going to talk about 372 00:20:12,920 --> 00:20:15,639 Speaker 9: the fact that we're focused on putting customers together with 373 00:20:15,720 --> 00:20:20,240 Speaker 9: wireless and broadband, and part of that dynamic is go 374 00:20:20,320 --> 00:20:23,760 Speaker 9: penetrate segments that we've not been successful at penetrating or 375 00:20:23,800 --> 00:20:24,639 Speaker 9: as successful. 376 00:20:24,720 --> 00:20:26,680 Speaker 8: So when we go to value. 377 00:20:26,400 --> 00:20:29,040 Speaker 9: Segments that were maybe a little under shared in, you're 378 00:20:29,040 --> 00:20:32,200 Speaker 9: going to naturally have a little bit less arpoo or 379 00:20:32,240 --> 00:20:35,640 Speaker 9: average revenue per user when you pick that customer up, 380 00:20:35,640 --> 00:20:39,080 Speaker 9: and when you combine wireless and broadband together, you may 381 00:20:39,080 --> 00:20:42,120 Speaker 9: be giving initially a little bit better deal to do that, 382 00:20:42,640 --> 00:20:45,240 Speaker 9: but that's designed into the plan. We want to grow 383 00:20:45,359 --> 00:20:49,240 Speaker 9: and aggregate service revenues, which we've demonstrated that we can 384 00:20:49,320 --> 00:20:52,399 Speaker 9: do that. We indicated we're going to see some strengthening 385 00:20:52,440 --> 00:20:54,640 Speaker 9: of that as we move through the year from where 386 00:20:54,640 --> 00:20:57,240 Speaker 9: we were this quarter. And I'm okay with a little 387 00:20:57,240 --> 00:21:00,879 Speaker 9: bit lower urpoo if we actually execute on the consolidated 388 00:21:00,920 --> 00:21:04,879 Speaker 9: customer strategy and are more successful and penetrating some of 389 00:21:04,880 --> 00:21:06,679 Speaker 9: these segments that we haven't been as active in. 390 00:21:08,200 --> 00:21:10,639 Speaker 3: John Stankey at and t CEO, it's great to have 391 00:21:10,720 --> 00:21:12,280 Speaker 3: you back here on Bloomberg Tech. 392 00:21:12,359 --> 00:21:15,399 Speaker 2: Thank you very much. Okay. 393 00:21:15,440 --> 00:21:18,120 Speaker 3: Coming up, ARM could be on the way to providing 394 00:21:18,240 --> 00:21:21,919 Speaker 3: full chips because customers demand faster pass to market. 395 00:21:22,400 --> 00:21:25,760 Speaker 2: We have more on that next. This is Bloomberg Tech. 396 00:21:52,359 --> 00:21:56,919 Speaker 3: ARM is exploring an expansion into producing full complete chips 397 00:21:57,000 --> 00:22:01,040 Speaker 3: as AI customers seek faster routes to marketsfo Jason Child 398 00:22:01,240 --> 00:22:04,719 Speaker 3: discuss the plans with Bloomberg Tech's Tom McKenzie in London. 399 00:22:05,359 --> 00:22:09,920 Speaker 10: We're actually exploring building full chips and the reason why 400 00:22:10,240 --> 00:22:13,080 Speaker 10: is we are actually having customers in this AI cycle 401 00:22:13,480 --> 00:22:16,040 Speaker 10: basically asking us can you help us be able to 402 00:22:16,119 --> 00:22:19,800 Speaker 10: get products to market faster, which means instead of us 403 00:22:19,880 --> 00:22:21,960 Speaker 10: just taking an ip from you, can you actually just 404 00:22:22,200 --> 00:22:23,840 Speaker 10: really help us design the chip. 405 00:22:24,080 --> 00:22:27,520 Speaker 2: So it's something we're exploring. Coming up. 406 00:22:27,880 --> 00:22:31,880 Speaker 3: Netflix drops as a tax dispute with Brazil cuts into 407 00:22:31,920 --> 00:22:34,960 Speaker 3: its earnings, which on the whole were pretty good, but 408 00:22:35,040 --> 00:22:37,560 Speaker 3: that is quite a drop on track, in fact, for 409 00:22:37,640 --> 00:22:40,360 Speaker 3: his biggest drop in a couple of years. We will 410 00:22:40,359 --> 00:22:42,359 Speaker 3: have more in that story with a key analyst and 411 00:22:42,440 --> 00:22:45,040 Speaker 3: some of the sound from the earnings call coming up next. 412 00:22:45,520 --> 00:22:47,480 Speaker 2: What a day, What a show? Stay with us. 413 00:22:47,800 --> 00:23:04,960 Speaker 3: This is Bloomberg Tech. Welcome back to Bloomberg Tech. One 414 00:23:04,960 --> 00:23:09,040 Speaker 3: of our top earning stories is Netflix stock down significantly 415 00:23:09,119 --> 00:23:12,639 Speaker 3: ten percent, putting it on track for its biggest drop 416 00:23:13,040 --> 00:23:15,320 Speaker 3: since April of twenty twenty two. 417 00:23:15,560 --> 00:23:17,919 Speaker 2: The story isn't the one we were expecting. 418 00:23:17,960 --> 00:23:23,040 Speaker 3: Necessarily, a tax dispute with Brazil hit the company in 419 00:23:23,080 --> 00:23:26,600 Speaker 3: the quarter. But Netflix the streamer has been saying for 420 00:23:26,680 --> 00:23:31,520 Speaker 3: quite a long time, judge us by traditional financial metrics, 421 00:23:31,560 --> 00:23:34,879 Speaker 3: Please Wall Street look beyond the content, look beyond the 422 00:23:34,920 --> 00:23:38,120 Speaker 3: subscribe account, which they don't disclose in the same way anymore. 423 00:23:38,280 --> 00:23:39,880 Speaker 3: There's still a lot to talk about when it comes 424 00:23:39,880 --> 00:23:42,840 Speaker 3: to Netflix. So let's get to Alisha Reese Webbush, Senior 425 00:23:42,920 --> 00:23:46,159 Speaker 3: VP of Equity Research, and let's start with what is 426 00:23:46,200 --> 00:23:51,600 Speaker 3: the headline. The Brazil tax dispute idiosyncratic to the quarter 427 00:23:52,800 --> 00:23:56,919 Speaker 3: and Netflix itself, let alone the sort of broader streaming landscape. 428 00:23:57,119 --> 00:23:57,960 Speaker 2: What did you make of that? 429 00:23:59,440 --> 00:24:04,040 Speaker 11: Well, they took the tax from twenty twenty two to present, 430 00:24:04,600 --> 00:24:08,200 Speaker 11: and so if you look at it on a holistic basis, 431 00:24:08,600 --> 00:24:11,720 Speaker 11: it was over three hundred basis points impacted to operating 432 00:24:11,760 --> 00:24:13,760 Speaker 11: margin in the quarter. So that's why there was such 433 00:24:13,800 --> 00:24:15,879 Speaker 11: a huge miss. But if you look forward. If you 434 00:24:15,880 --> 00:24:18,479 Speaker 11: extrapolate that, it's only going to be about twenty basis 435 00:24:18,480 --> 00:24:22,160 Speaker 11: points hit annually going forward. So there's a pretty big 436 00:24:22,200 --> 00:24:24,960 Speaker 11: difference having had to take that over that long period 437 00:24:24,960 --> 00:24:30,280 Speaker 11: of time. The legislation in Brazil, you know, it was 438 00:24:30,480 --> 00:24:33,520 Speaker 11: unclear and made them, you know, think and many other companies, 439 00:24:33,560 --> 00:24:35,760 Speaker 11: not just Netflix think that they didn't need to pay 440 00:24:35,800 --> 00:24:38,199 Speaker 11: that up until recently, so they had to kind of 441 00:24:38,240 --> 00:24:41,240 Speaker 11: back back pay that or at least set aside the 442 00:24:41,240 --> 00:24:45,800 Speaker 11: money for that, you know, again idiosyncratic. As you say, 443 00:24:46,359 --> 00:24:49,960 Speaker 11: there are a lot of other interesting highlights and maybe 444 00:24:50,040 --> 00:24:54,080 Speaker 11: some disappointments on the revenue line given the cap pop 445 00:24:54,119 --> 00:24:55,280 Speaker 11: demon Hunters phenomenon. 446 00:24:56,320 --> 00:24:58,800 Speaker 3: Oh okay, So so dig into some of those disappointments, 447 00:24:58,920 --> 00:25:02,119 Speaker 3: you know, is that you disappointed in this sense you 448 00:25:02,119 --> 00:25:04,320 Speaker 3: had higher expectations. 449 00:25:05,080 --> 00:25:09,280 Speaker 11: Slightly higher expectations. The thing is that Netflix is trading 450 00:25:09,320 --> 00:25:11,320 Speaker 11: at such a higher it was trading at such a 451 00:25:11,400 --> 00:25:15,320 Speaker 11: high multiple. Netflix has to continually knock it out of 452 00:25:15,359 --> 00:25:20,199 Speaker 11: the park, and revenue was in line roughly, and the 453 00:25:20,240 --> 00:25:25,240 Speaker 11: fourth quarter guidance didn't impress, you know, extravagantly as Netflix 454 00:25:25,240 --> 00:25:27,159 Speaker 11: typically does. And that's one of the big reasons I 455 00:25:27,200 --> 00:25:30,160 Speaker 11: think the stock's trading down. That being said, I think 456 00:25:30,160 --> 00:25:32,800 Speaker 11: there's still plenty that you could pick out of the 457 00:25:32,840 --> 00:25:36,919 Speaker 11: earnings call and the shareholder letter. They're very exciting for 458 00:25:36,960 --> 00:25:38,560 Speaker 11: the future, you. 459 00:25:38,520 --> 00:25:42,119 Speaker 3: Know, Like I've been super fixated on programming. I've been 460 00:25:42,119 --> 00:25:46,760 Speaker 3: watching Black Rabbit, which interesting piece of television. Despite the 461 00:25:46,880 --> 00:25:50,080 Speaker 3: kind of spend and commitment to the slate, the free 462 00:25:50,119 --> 00:25:53,119 Speaker 3: cash flow figures were really interesting. Like what do you 463 00:25:53,160 --> 00:25:56,359 Speaker 3: make of the balance between like committing to content but 464 00:25:56,480 --> 00:25:59,440 Speaker 3: also those traditional financial metrics. 465 00:26:00,200 --> 00:26:03,480 Speaker 11: Yeah, yeah, the free cash flow is so impressive. They 466 00:26:03,600 --> 00:26:05,760 Speaker 11: pulled back on the content spend just a little bit. 467 00:26:06,280 --> 00:26:08,239 Speaker 11: I think they didn't need to spend quite as much, 468 00:26:08,280 --> 00:26:09,840 Speaker 11: and they don't need to in the fourth quarter, just 469 00:26:09,880 --> 00:26:12,359 Speaker 11: given the slate that they already have and how sticky 470 00:26:12,640 --> 00:26:16,120 Speaker 11: it already is. I think the most important thing, though, 471 00:26:16,119 --> 00:26:19,920 Speaker 11: is to really dig into the advertising opportunity right now 472 00:26:19,960 --> 00:26:23,200 Speaker 11: in the third quarter. I think the thing that made 473 00:26:23,200 --> 00:26:27,560 Speaker 11: the u CAN region not quite as exciting as it 474 00:26:27,600 --> 00:26:30,440 Speaker 11: typically would be is that Netflix, while they're getting a 475 00:26:30,440 --> 00:26:32,920 Speaker 11: lot of advertisers and they're getting all the bookings and 476 00:26:32,960 --> 00:26:35,800 Speaker 11: their CPMs have probably leveled off. From all the data 477 00:26:35,840 --> 00:26:38,160 Speaker 11: we've gathered, what it looks like is that their ad 478 00:26:38,160 --> 00:26:41,480 Speaker 11: delivery rates are just so incredibly low that they're not 479 00:26:41,560 --> 00:26:43,200 Speaker 11: booking all of it. You have a lot of people 480 00:26:43,200 --> 00:26:44,840 Speaker 11: on the ad tier. You just need to give them 481 00:26:44,840 --> 00:26:48,000 Speaker 11: a little bit more ads to really get that revenue 482 00:26:48,080 --> 00:26:50,480 Speaker 11: to ramp up. In the fourth quarter, you have more 483 00:26:50,520 --> 00:26:54,719 Speaker 11: live events and they can issue ads across all tiers, 484 00:26:54,760 --> 00:26:57,280 Speaker 11: and so they'll start to pick up on that in 485 00:26:57,320 --> 00:26:59,400 Speaker 11: the fourth quarter and certainly through twenty twenty six. 486 00:27:00,520 --> 00:27:04,119 Speaker 3: You know, I'm the generation, the lost generation where you 487 00:27:04,200 --> 00:27:06,600 Speaker 3: had to have ads when you watch shows on television, 488 00:27:06,720 --> 00:27:10,080 Speaker 3: So you know, I'm trying to process that look. Bloomberg 489 00:27:10,320 --> 00:27:13,600 Speaker 3: and others reported that Netflix is one of the companies 490 00:27:13,680 --> 00:27:19,400 Speaker 3: circling for a part of Warner Brothers Discovery. Ted Surrandos 491 00:27:19,480 --> 00:27:21,720 Speaker 3: addressed this idea of M and A on the call. 492 00:27:21,840 --> 00:27:22,680 Speaker 3: Listen to what he said. 493 00:27:23,920 --> 00:27:25,639 Speaker 12: We've been very clear in the past that we have 494 00:27:25,720 --> 00:27:28,760 Speaker 12: no interest in owning legacy media networks, so there is 495 00:27:28,760 --> 00:27:31,919 Speaker 12: no change there. But in general, we believe that we 496 00:27:32,000 --> 00:27:34,879 Speaker 12: can be and we will be choosy. We have a 497 00:27:34,920 --> 00:27:38,920 Speaker 12: great business. We're predominantly focused on growing organically, investing aggressively 498 00:27:38,960 --> 00:27:42,800 Speaker 12: and responsibly into the growth, and returning access cash flow 499 00:27:42,840 --> 00:27:46,399 Speaker 12: to shareholders through our shot to share repurchase. 500 00:27:47,920 --> 00:27:50,840 Speaker 2: Your interpretation of what Ted Sarandos was saying. 501 00:27:51,960 --> 00:27:57,399 Speaker 11: Look, ten years ago, HBO was the top content that 502 00:27:57,560 --> 00:28:00,879 Speaker 11: everyone wanted, and Netflix was did not shy away retastings, 503 00:28:00,880 --> 00:28:03,640 Speaker 11: did not shy away from saying that that was what 504 00:28:03,720 --> 00:28:06,040 Speaker 11: they were shooting for. Netflix was shooting to be like 505 00:28:06,200 --> 00:28:10,080 Speaker 11: HBO Max or HBO at the time. They've since surpassed 506 00:28:10,080 --> 00:28:15,000 Speaker 11: them their leagues ahead. Now that being said, you know, 507 00:28:15,040 --> 00:28:18,760 Speaker 11: Warner Brothers still has some really excellent content, and if 508 00:28:18,880 --> 00:28:21,720 Speaker 11: Netflix has an opportunity to kick the tires and see 509 00:28:21,760 --> 00:28:23,800 Speaker 11: if they can get a piece of that and not 510 00:28:23,840 --> 00:28:26,960 Speaker 11: the legacy media piece, sure of course they're going to 511 00:28:27,000 --> 00:28:28,159 Speaker 11: look at it. And if they can get it for 512 00:28:28,200 --> 00:28:32,040 Speaker 11: a good price, of course they will. However, they're not 513 00:28:32,080 --> 00:28:33,840 Speaker 11: the only ones looking at it, and they're certainly the 514 00:28:34,000 --> 00:28:37,680 Speaker 11: only one who's looking at it just piecemeal and trying 515 00:28:37,680 --> 00:28:40,640 Speaker 11: to take the best bits and not the rest of it. 516 00:28:40,680 --> 00:28:43,000 Speaker 11: So I don't think they're going to be as competitive 517 00:28:43,560 --> 00:28:48,880 Speaker 11: as the other bidders in you know, looking at this ultimately. 518 00:28:49,600 --> 00:28:53,080 Speaker 11: You know what Ted also said that was really important 519 00:28:53,280 --> 00:28:57,040 Speaker 11: is that they don't need to use M and A 520 00:28:57,280 --> 00:29:00,720 Speaker 11: to reach their targets. They don't need to do that 521 00:29:00,880 --> 00:29:02,960 Speaker 11: to reach all of their you know, their growth group 522 00:29:02,960 --> 00:29:05,040 Speaker 11: of goals, and so you know, it would be a 523 00:29:05,120 --> 00:29:06,560 Speaker 11: nice It's a nice to have, not a must have 524 00:29:06,640 --> 00:29:07,240 Speaker 11: for Netflix. 525 00:29:08,440 --> 00:29:11,880 Speaker 3: Alicia Reese Webbush, thank you very much. Okay, let's stick 526 00:29:11,880 --> 00:29:15,080 Speaker 3: with the earning story. Tesla will report its results after 527 00:29:15,080 --> 00:29:18,360 Speaker 3: the closing bell. Let's get the preview. Bloomber's Cray Trudel 528 00:29:18,640 --> 00:29:24,000 Speaker 3: our Global Auto Zer joins us the quarter gone was 529 00:29:24,360 --> 00:29:26,960 Speaker 3: record breaking, a number that I don't think many of 530 00:29:27,040 --> 00:29:30,480 Speaker 3: us saw coming in terms of delivering evs to customers. 531 00:29:30,600 --> 00:29:33,920 Speaker 3: But as you know, it came with the asterisk that 532 00:29:34,000 --> 00:29:36,480 Speaker 3: it was against the expiring of a federal tax credit 533 00:29:36,520 --> 00:29:40,280 Speaker 3: in the United States. Is that the story tonight with 534 00:29:40,440 --> 00:29:43,160 Speaker 3: Tesla or is there something much bigger here that we're 535 00:29:43,200 --> 00:29:43,720 Speaker 3: bracing for. 536 00:29:45,280 --> 00:29:48,880 Speaker 13: Yeah, I think there may be some possibility that we 537 00:29:48,920 --> 00:29:51,160 Speaker 13: get some surprise about, you know, maybe some of the 538 00:29:51,600 --> 00:29:55,520 Speaker 13: costs that it took to achieve those results. And because 539 00:29:55,560 --> 00:29:59,120 Speaker 13: I think, you know, we heard Tesla itself executives on 540 00:29:59,440 --> 00:30:02,760 Speaker 13: the call a quarter ago kind of saying contradictory things. 541 00:30:02,840 --> 00:30:06,200 Speaker 13: Right of you know, we've we've got a fair amount 542 00:30:06,240 --> 00:30:10,160 Speaker 13: of demand, and yet we do have some incentives on 543 00:30:10,280 --> 00:30:13,640 Speaker 13: offer on top of the seventy five hundred dollars tax credit, 544 00:30:13,920 --> 00:30:15,400 Speaker 13: and you know, sort of go out and buy your 545 00:30:15,440 --> 00:30:17,400 Speaker 13: Tesla now before it's too late. 546 00:30:18,240 --> 00:30:18,520 Speaker 2: You know. 547 00:30:18,800 --> 00:30:21,200 Speaker 13: The big question though, I think, and the big point 548 00:30:21,200 --> 00:30:23,480 Speaker 13: of emphasis for everybody is going to be do we 549 00:30:23,520 --> 00:30:27,080 Speaker 13: hear elon, you know say again, you know what, Yes, 550 00:30:27,240 --> 00:30:30,200 Speaker 13: we may be in for a few rough quarters because 551 00:30:30,240 --> 00:30:32,840 Speaker 13: of these credits going away, and just how tough the 552 00:30:32,880 --> 00:30:36,160 Speaker 13: sledding is going to be, particularly in the US market. 553 00:30:36,760 --> 00:30:39,320 Speaker 13: And also I think, you know, outside of the US, 554 00:30:39,360 --> 00:30:43,720 Speaker 13: we are just seeing Chinese manufacturers really give Tesla a 555 00:30:43,800 --> 00:30:44,680 Speaker 13: run for its money. 556 00:30:44,760 --> 00:30:47,320 Speaker 2: And how how concerning is that? Really? 557 00:30:47,400 --> 00:30:51,160 Speaker 3: Quick Craig is tonight's earning score a precursor for the 558 00:30:51,240 --> 00:30:53,680 Speaker 3: compensation package vote on November sixth. 559 00:30:55,080 --> 00:30:58,080 Speaker 13: It does feel like a topic that will be difficult 560 00:30:58,080 --> 00:31:01,800 Speaker 13: to completely ignore, even if if with any other CEO 561 00:31:02,160 --> 00:31:05,640 Speaker 13: they would shy away from addressing the issue of their 562 00:31:05,680 --> 00:31:10,479 Speaker 13: own you know, payday, and yet I would expect it 563 00:31:10,520 --> 00:31:11,520 Speaker 13: absolutely to come up. 564 00:31:11,560 --> 00:31:13,920 Speaker 2: There's so much anticipation for this next month. 565 00:31:14,560 --> 00:31:16,760 Speaker 3: We're going to be running the blog on the Bloomberg termino. 566 00:31:16,800 --> 00:31:18,640 Speaker 3: I think online as well, either way, you know where 567 00:31:18,640 --> 00:31:22,440 Speaker 3: to find us. Bloomberg's Creatrudel, thank you very much. Meta 568 00:31:22,560 --> 00:31:25,520 Speaker 3: is set to see on almost thirty billion dollar financing 569 00:31:25,560 --> 00:31:29,000 Speaker 3: package for its data center site in rural Louisiana, marking 570 00:31:29,080 --> 00:31:33,400 Speaker 3: the final step for the largest private capital deal on record. 571 00:31:33,720 --> 00:31:36,720 Speaker 3: Blue Out Capital and Meta will split ownership of the 572 00:31:36,800 --> 00:31:40,280 Speaker 3: data center site, with the tech giant retaining just twenty 573 00:31:40,320 --> 00:31:42,880 Speaker 3: percent of it. That's according to sources. Blue Out co 574 00:31:43,040 --> 00:31:46,760 Speaker 3: CEO Mark Libschultz sat down with Bloomberg's Danny Berger to 575 00:31:46,840 --> 00:31:49,960 Speaker 3: discuss the challenges of getting this still done. 576 00:31:50,800 --> 00:31:55,040 Speaker 14: It was difficult to i'd say innovate together with Meta. 577 00:31:55,160 --> 00:31:59,320 Speaker 14: That is to say, it's new, it's groundbreaking. As you observe, 578 00:31:59,400 --> 00:32:02,800 Speaker 14: it's a scale no one has dealt with. But Meta 579 00:32:02,920 --> 00:32:05,640 Speaker 14: is an incredibly innovative company, right, So this is this 580 00:32:05,680 --> 00:32:09,640 Speaker 14: is a beautiful marriage of a deeply innovative company meets 581 00:32:10,600 --> 00:32:14,800 Speaker 14: this sort of need for innovative capital solutions, which certainly 582 00:32:14,880 --> 00:32:16,960 Speaker 14: we think of as our calling card in blue Owel. 583 00:32:17,480 --> 00:32:20,960 Speaker 14: And so together we're able to craft something really bespoke 584 00:32:21,160 --> 00:32:25,080 Speaker 14: at a scale that nobody has seen before. And that 585 00:32:25,200 --> 00:32:27,440 Speaker 14: is exciting, and you know they have a great team 586 00:32:27,480 --> 00:32:31,080 Speaker 14: there you know the CFO Susan Lee and the team 587 00:32:31,240 --> 00:32:35,400 Speaker 14: top Todd Hesse and Michael Hart. They're really good at 588 00:32:35,440 --> 00:32:39,280 Speaker 14: what they do, and working together, we're able to do 589 00:32:39,320 --> 00:32:42,000 Speaker 14: something that really worked for them and creates a great 590 00:32:42,080 --> 00:32:43,240 Speaker 14: investment for us. 591 00:32:43,600 --> 00:32:45,760 Speaker 15: There's a lot of the excitement around AI, and I 592 00:32:45,760 --> 00:32:47,480 Speaker 15: think a lot of players would also look at Meta 593 00:32:47,480 --> 00:32:49,760 Speaker 15: as a counterparty and also be excited by that. 594 00:32:49,880 --> 00:32:51,640 Speaker 2: How competitive was this deal? 595 00:32:52,760 --> 00:32:54,000 Speaker 14: So I do think at the end of the day, 596 00:32:54,120 --> 00:32:59,080 Speaker 14: partnerships will define this industry for the foreseeable future, and 597 00:32:59,880 --> 00:33:02,520 Speaker 14: that it's because it isn't just about capital. I mean, yes, 598 00:33:02,600 --> 00:33:06,120 Speaker 14: capital is a necessary and important component, and in quantums. 599 00:33:05,760 --> 00:33:08,560 Speaker 8: That people are not used to. But it isn't just capital. 600 00:33:08,600 --> 00:33:13,000 Speaker 14: It's capital married with knowledge, capital married with skills to 601 00:33:13,040 --> 00:33:15,920 Speaker 14: be able to craft a solution. It's not just a 602 00:33:15,960 --> 00:33:18,880 Speaker 14: generic building. You have to picture the magnitude of what 603 00:33:18,880 --> 00:33:19,840 Speaker 14: we're all talking about. 604 00:33:19,920 --> 00:33:20,200 Speaker 8: Right. 605 00:33:20,320 --> 00:33:25,200 Speaker 14: This is a two gigawatt complex, So just to frame that, 606 00:33:25,200 --> 00:33:28,240 Speaker 14: that's more than a big city in America consumes in 607 00:33:28,360 --> 00:33:32,440 Speaker 14: power in one site. This is the largest data center 608 00:33:32,520 --> 00:33:35,560 Speaker 14: complex being built as far as you know, in the 609 00:33:35,560 --> 00:33:39,479 Speaker 14: world today. But remember it's bigger than the one we 610 00:33:39,520 --> 00:33:43,200 Speaker 14: announced three weeks ago, the Borderplex project. That's twenty two 611 00:33:43,720 --> 00:33:47,240 Speaker 14: billion dollars, which is bigger than the one we had 612 00:33:47,280 --> 00:33:51,080 Speaker 14: before that, which is Abilene, Texas, which is fifteen billion 613 00:33:51,120 --> 00:33:52,080 Speaker 14: through phases. 614 00:33:51,720 --> 00:33:54,800 Speaker 8: One and two. All of those are blue all solutions. 615 00:33:55,080 --> 00:33:57,959 Speaker 14: All of them are different because in the case of 616 00:33:58,040 --> 00:34:02,280 Speaker 14: say Abilene, you have Cruse so who's a fantastic developer partner. 617 00:34:02,600 --> 00:34:05,440 Speaker 14: So there we're partnered to a developer and putting together 618 00:34:05,480 --> 00:34:09,640 Speaker 14: that massive and successful project for Oracle. In Borderplex, we're 619 00:34:09,640 --> 00:34:13,040 Speaker 14: building it internally. We have our own business called Stack 620 00:34:13,160 --> 00:34:17,480 Speaker 14: thousand people captive that does the development's very complex projects. 621 00:34:17,760 --> 00:34:21,320 Speaker 8: So Stack is developing Blue Owl as the capital partner 622 00:34:21,520 --> 00:34:22,520 Speaker 8: the Borderplex project. 623 00:34:22,520 --> 00:34:26,200 Speaker 14: Here Meta is going to build and going to operate 624 00:34:26,680 --> 00:34:29,439 Speaker 14: the data centers themselves. So it's three different flavors, all 625 00:34:29,480 --> 00:34:32,759 Speaker 14: of them require a different customized solution, all of which 626 00:34:32,840 --> 00:34:36,680 Speaker 14: require really deep knowledge on the one hand, and really 627 00:34:36,680 --> 00:34:39,520 Speaker 14: deep access to capital. And we have uniquely brought those 628 00:34:39,560 --> 00:34:41,400 Speaker 14: two together, and so I think people know if they 629 00:34:41,440 --> 00:34:44,680 Speaker 14: come to us, we can deliver all the capital, one 630 00:34:44,719 --> 00:34:47,080 Speaker 14: stop shop with the knowledge you need to do it right. 631 00:34:47,200 --> 00:34:50,440 Speaker 15: So as the deals get bigger and bigger again, this 632 00:34:50,480 --> 00:34:53,439 Speaker 15: one twenty seven billion dollars. How do you make sure, 633 00:34:53,640 --> 00:34:56,240 Speaker 15: just given the sheer size of it, that Blue Owl 634 00:34:56,239 --> 00:34:59,719 Speaker 15: as a whole is an overly dependent and exposed to 635 00:34:59,760 --> 00:35:03,360 Speaker 15: be just this individual deal or these aid deals you're making. 636 00:35:03,520 --> 00:35:06,960 Speaker 14: Yeah, well, so people that here at blue outl like 637 00:35:07,000 --> 00:35:10,160 Speaker 14: our business is built on risk management, diversification. 638 00:35:10,200 --> 00:35:12,480 Speaker 8: In fact, our old business is about downside protection. 639 00:35:12,880 --> 00:35:15,200 Speaker 14: So it actually comes natural for us to be thinking about, 640 00:35:15,400 --> 00:35:17,759 Speaker 14: you know, where are all the different pockets of risk 641 00:35:17,800 --> 00:35:19,960 Speaker 14: and how do we manage them? Now very importantly in 642 00:35:20,000 --> 00:35:23,279 Speaker 14: this space different from most others. You to remember, we're 643 00:35:23,320 --> 00:35:25,759 Speaker 14: dealing with the companies that are the biggest companies in 644 00:35:25,840 --> 00:35:29,040 Speaker 14: the world, with the best credit ratings in the world. 645 00:35:29,160 --> 00:35:32,120 Speaker 14: So there is a different question when it comes to concentration, 646 00:35:32,480 --> 00:35:34,120 Speaker 14: you know. That is to say, having a lot of 647 00:35:34,120 --> 00:35:37,799 Speaker 14: exposure to Microsoft, a lot of exposure to Meta, a 648 00:35:37,800 --> 00:35:39,279 Speaker 14: lot of exposure to Amazon. 649 00:35:40,360 --> 00:35:42,120 Speaker 8: Those are pretty darn good exposures. 650 00:35:43,760 --> 00:35:47,840 Speaker 3: Blue Out co CEO market Libschaltz, along with Gleenberg's Danny Berger, 651 00:35:48,200 --> 00:35:51,800 Speaker 3: in other Meta used the tech giant is cutting roughly 652 00:35:51,880 --> 00:35:55,080 Speaker 3: six hundred positions from its AI unit to move more 653 00:35:55,160 --> 00:35:58,760 Speaker 3: quickly in the AI race. The cuts won't affect Meta 654 00:35:58,760 --> 00:36:02,320 Speaker 3: is newly formed lab unit, though the company says it 655 00:36:02,360 --> 00:36:05,680 Speaker 3: will continue to hire for ai eforts, and some of 656 00:36:05,719 --> 00:36:09,399 Speaker 3: those hires in the hundreds of millions of dollars when 657 00:36:09,440 --> 00:36:12,799 Speaker 3: it comes to comp okay, Coming up, Apple faces a 658 00:36:12,800 --> 00:36:17,239 Speaker 3: few wrinkles and its plans for a giant foldable iPad. 659 00:36:17,800 --> 00:36:20,879 Speaker 2: We're more on the Bloomberg exclusive. Next. This is Bloomberg Tech. 660 00:36:29,880 --> 00:36:33,560 Speaker 3: Samsung and Google have launched a new mixed reality headset, 661 00:36:33,680 --> 00:36:36,839 Speaker 3: a precursor to smart glasses that the companies say are 662 00:36:37,000 --> 00:36:41,399 Speaker 3: coming pretty soon. Bloomberg's consumer tech reporter Sam Kelly joins us. Now, 663 00:36:41,760 --> 00:36:45,239 Speaker 3: tell me about this project. It's a first step, right, 664 00:36:45,400 --> 00:36:49,360 Speaker 3: But you've been able to get an insight into Samsung 665 00:36:49,360 --> 00:36:51,360 Speaker 3: and Google's mixed reality capabilities. 666 00:36:51,560 --> 00:36:52,000 Speaker 4: That's right. 667 00:36:52,080 --> 00:36:54,800 Speaker 16: Yeah, so Samsung's been working on this for quite a while, 668 00:36:54,920 --> 00:36:58,960 Speaker 16: or directly compete with Apple's Vision Pro headset. You know, 669 00:36:59,000 --> 00:37:01,200 Speaker 16: it works very similar you put it on. There are 670 00:37:01,200 --> 00:37:05,160 Speaker 16: two different main areas ways to sort of engage with 671 00:37:05,200 --> 00:37:07,920 Speaker 16: the device. One is sort of a pass through experience 672 00:37:07,960 --> 00:37:10,600 Speaker 16: where you kind of see your home screen apps in 673 00:37:10,600 --> 00:37:13,959 Speaker 16: front of you, using gestures to point and touch your 674 00:37:14,960 --> 00:37:17,480 Speaker 16: fingers together, almost like pinching to open up apps and 675 00:37:17,560 --> 00:37:21,000 Speaker 16: experience things that way. You can also have a more 676 00:37:21,040 --> 00:37:25,240 Speaker 16: immersive experience, such as you know, watching Netflix or watching 677 00:37:25,239 --> 00:37:28,000 Speaker 16: an NBA game where you feel like you're immersed. They're also, 678 00:37:28,160 --> 00:37:31,400 Speaker 16: you know, because Google is involved too, you can experience 679 00:37:31,440 --> 00:37:33,440 Speaker 16: Google Maps in a certain way where you're on street 680 00:37:33,480 --> 00:37:35,840 Speaker 16: view and kind of go into different restaurants. And of 681 00:37:35,880 --> 00:37:39,200 Speaker 16: course the big thing here is AI. AI hasn't really 682 00:37:39,280 --> 00:37:41,799 Speaker 16: had a major place on headsets before, and now you 683 00:37:41,800 --> 00:37:44,840 Speaker 16: can communicate with Gemini, ask it questions. If you're watching 684 00:37:44,880 --> 00:37:47,640 Speaker 16: a movie, you could circle an actor's face and say, 685 00:37:47,640 --> 00:37:50,000 Speaker 16: who's this actor? Where do I know him from? So 686 00:37:50,080 --> 00:37:53,160 Speaker 16: that adds a new layer to headsets in general. 687 00:37:54,600 --> 00:37:56,440 Speaker 2: Let's turn our attentions to Apple. 688 00:37:56,880 --> 00:38:01,880 Speaker 3: Bloomberg has some reporting around Apple's plan for a foldable iPad. 689 00:38:02,200 --> 00:38:04,319 Speaker 2: Quickly it's hit some snags. What do we know? 690 00:38:04,760 --> 00:38:07,080 Speaker 16: Yes, so Apple's been working on this for a while. 691 00:38:07,200 --> 00:38:10,120 Speaker 16: Was projected to come out in twenty twenty eight. Now 692 00:38:10,400 --> 00:38:12,839 Speaker 16: Bloomberg is hearing that will be pushed back to twenty 693 00:38:12,960 --> 00:38:15,920 Speaker 16: twenty nine or even beyond. So the concept is just 694 00:38:16,239 --> 00:38:19,839 Speaker 16: an iPad that will it opens up, It folds kind 695 00:38:19,840 --> 00:38:22,880 Speaker 16: of look more like a Macwok whenfolded, but some challenges 696 00:38:22,920 --> 00:38:26,719 Speaker 16: around the engineering related to the display, also related to 697 00:38:26,760 --> 00:38:27,200 Speaker 16: the weight. 698 00:38:28,080 --> 00:38:29,600 Speaker 8: You know, to keep these things. 699 00:38:29,440 --> 00:38:32,239 Speaker 16: Light is a big challenge now Apple's trying to make 700 00:38:32,280 --> 00:38:34,400 Speaker 16: it lighter. It also comes at a time when Apple's 701 00:38:34,400 --> 00:38:38,040 Speaker 16: trying to you know, drum up sales around iPad and 702 00:38:38,160 --> 00:38:40,880 Speaker 16: also just bring new innovation into its product lines. 703 00:38:40,920 --> 00:38:41,400 Speaker 8: In general. 704 00:38:41,440 --> 00:38:42,880 Speaker 2: We're seeing it experiment. 705 00:38:43,080 --> 00:38:45,600 Speaker 16: The iPhone Air just came out recently too, so new 706 00:38:45,640 --> 00:38:47,680 Speaker 16: form factors, but we might have to wait a little 707 00:38:47,680 --> 00:38:48,200 Speaker 16: bit longer. 708 00:38:48,920 --> 00:38:51,239 Speaker 3: Bloomberg, Sam Kelly, thank you very much. Let's get some 709 00:38:51,239 --> 00:38:54,480 Speaker 3: more news in talking tech. First up, China's demanding some 710 00:38:54,760 --> 00:38:58,920 Speaker 3: US chip FIRN submit sensitive data about their sales as 711 00:38:58,960 --> 00:39:02,200 Speaker 3: part of a probe of American suppliers. Companies have been 712 00:39:02,239 --> 00:39:06,240 Speaker 3: asked to provide further details, including costs, profits, customer names, 713 00:39:06,239 --> 00:39:10,719 Speaker 3: and transaction details. Plus SpaceX CEO Elon Musk took ain 714 00:39:11,000 --> 00:39:14,719 Speaker 3: at NASA's interim administrator Sean Duffy. Must took to X 715 00:39:14,719 --> 00:39:19,279 Speaker 3: to insult Duffy, criticizing his proposal of folding NASA into 716 00:39:19,320 --> 00:39:23,120 Speaker 3: the Department of Transportation and potentially staying on as the 717 00:39:23,200 --> 00:39:28,359 Speaker 3: administrator instead of fintech billionaire Jared isaacmanb An Only Fan 718 00:39:28,520 --> 00:39:31,080 Speaker 3: CEO Kylie Blair says the platform has paid out more 719 00:39:31,120 --> 00:39:35,000 Speaker 3: than twenty five billion dollars to its content creators since 720 00:39:35,040 --> 00:39:37,880 Speaker 3: it was founded. She spoke with Bloomberg's Caroline Hide at 721 00:39:37,920 --> 00:39:39,760 Speaker 3: the Bloomberg Tech conference in London. 722 00:39:40,560 --> 00:39:44,680 Speaker 17: We've paid out twenty five billion to creators since twenty sixteen. 723 00:39:44,800 --> 00:39:47,120 Speaker 17: So there's not very many tech companies that can talk 724 00:39:47,160 --> 00:39:52,160 Speaker 17: about creating wealth for others rather than just profiteering essentially. 725 00:39:52,880 --> 00:39:54,759 Speaker 17: And so for us as a company, that makes us 726 00:39:54,880 --> 00:39:56,680 Speaker 17: very proud. And we talk to our content creators and 727 00:39:56,680 --> 00:39:59,040 Speaker 17: we understand the difference that it's made to their lives, 728 00:39:59,400 --> 00:40:02,399 Speaker 17: the way that they continue to challenge themselves, or build 729 00:40:02,440 --> 00:40:05,440 Speaker 17: their fan base, or try something new, be a bit disruptive, 730 00:40:05,560 --> 00:40:08,680 Speaker 17: be a bit you know, reinvent themselves in some way. 731 00:40:09,360 --> 00:40:11,680 Speaker 17: And so for us as a business, providing a platform 732 00:40:11,719 --> 00:40:14,000 Speaker 17: and enabling creators to have the tools to do that 733 00:40:14,480 --> 00:40:16,959 Speaker 17: and to connect with their global fan base is really 734 00:40:17,000 --> 00:40:18,120 Speaker 17: the thing that makes us very proud. 735 00:40:18,880 --> 00:40:22,120 Speaker 3: Coming up more on Google and Unpropposite and thropics talks 736 00:40:22,160 --> 00:40:24,240 Speaker 3: that could be worth tens of billions. 737 00:40:24,280 --> 00:40:25,520 Speaker 2: This is Bloomberg Tech. 738 00:40:33,360 --> 00:40:36,520 Speaker 3: Open AI and build its first AI powered web browser, 739 00:40:36,560 --> 00:40:39,400 Speaker 3: trying to take on Google in that new front. The browser, 740 00:40:39,440 --> 00:40:42,200 Speaker 3: called chat gpt Atlas, is designed to be a more 741 00:40:42,239 --> 00:40:45,480 Speaker 3: personalized web experience and also feel tasked, such as booking 742 00:40:45,480 --> 00:40:49,080 Speaker 3: flights or editing documents on a user's behalf back to 743 00:40:49,120 --> 00:40:52,400 Speaker 3: our top story sources saying and Thropic and Googling discussions 744 00:40:52,400 --> 00:40:55,120 Speaker 3: for a potential deal that would have Google providing cloud 745 00:40:55,160 --> 00:40:58,400 Speaker 3: computing services to Anthropic high tens of billions of dollars. 746 00:40:58,640 --> 00:41:02,560 Speaker 3: Mandep seeing a Bloomberg Intelligent wrote Google's expanded Anthropic deal 747 00:41:02,680 --> 00:41:07,600 Speaker 3: may speed TPU commercialization and cloud growth, echoing Oracle's multi 748 00:41:07,680 --> 00:41:11,520 Speaker 3: year Open AI partnership that's driving its infrastructure revenue toward 749 00:41:11,520 --> 00:41:14,000 Speaker 3: one hundred and six billion by twenty thirty. Let's get 750 00:41:14,040 --> 00:41:17,200 Speaker 3: to bi's Anna rag Rana, who's joining us from Chicago. 751 00:41:17,600 --> 00:41:19,880 Speaker 3: What is your take here in your thesis on what 752 00:41:20,480 --> 00:41:24,360 Speaker 3: this reporting about Anthropic and Google represents. 753 00:41:25,239 --> 00:41:27,719 Speaker 18: See there are two aspects of it. Nthropic has been 754 00:41:27,719 --> 00:41:31,000 Speaker 18: working closely with Amazon Web Services. It also has an 755 00:41:31,000 --> 00:41:33,399 Speaker 18: investment from Google, so it is logical that they will 756 00:41:33,440 --> 00:41:36,560 Speaker 18: be using some cloud capacity from Google as well. But 757 00:41:36,640 --> 00:41:38,800 Speaker 18: the big question is whether this, you know, talks a 758 00:41:38,840 --> 00:41:42,239 Speaker 18: little bit about awus's infrastructure, or this is just a 759 00:41:42,280 --> 00:41:45,640 Speaker 18: matter of looking for capacity at this point because everybody 760 00:41:45,760 --> 00:41:49,360 Speaker 18: is constrained. Microsoft recently signed some new deals with a 761 00:41:49,400 --> 00:41:52,800 Speaker 18: couple of neoclouds, which gives us some insight that there 762 00:41:52,840 --> 00:41:55,120 Speaker 18: may be more of an issue of they're not being 763 00:41:55,160 --> 00:41:58,520 Speaker 18: able to build infrastructure as the demand is coming in. 764 00:41:58,840 --> 00:42:01,160 Speaker 18: And that's no different than what's happening with you know, 765 00:42:01,400 --> 00:42:04,840 Speaker 18: open AI also, so it could be just a capacity issue. 766 00:42:05,320 --> 00:42:09,160 Speaker 18: Longer term, we anticipate all large language models to work 767 00:42:09,200 --> 00:42:13,040 Speaker 18: with almost every hyperscale cloud provider that's out there because 768 00:42:13,120 --> 00:42:16,440 Speaker 18: of the size of you know, the expectations whence this 769 00:42:16,520 --> 00:42:17,759 Speaker 18: gets to the enterprise level. 770 00:42:18,600 --> 00:42:20,440 Speaker 2: So that let's linger on that last point. 771 00:42:20,480 --> 00:42:24,120 Speaker 3: We'd reported just last week that Anthropic executives are doing 772 00:42:24,120 --> 00:42:26,680 Speaker 3: this tour of the Middle East to secure money, but 773 00:42:26,760 --> 00:42:30,120 Speaker 3: also just like more capacity as a case study. Like 774 00:42:30,520 --> 00:42:33,680 Speaker 3: a lot of people react to our reporting with a 775 00:42:33,800 --> 00:42:37,960 Speaker 3: lack of understanding of how Anthropic can need that much capacity, 776 00:42:38,160 --> 00:42:39,360 Speaker 3: like is it justified? 777 00:42:40,520 --> 00:42:42,719 Speaker 18: Yeah, I mean if you look at the economic projections 778 00:42:42,800 --> 00:42:45,120 Speaker 18: or the growth projections for both these vendors, whether it's 779 00:42:45,120 --> 00:42:47,520 Speaker 18: Opening I or entropic. I mean, we are just in 780 00:42:47,600 --> 00:42:51,800 Speaker 18: a very early innings of enterprise applications being built using 781 00:42:51,800 --> 00:42:54,040 Speaker 18: some of these models, so we have this is a 782 00:42:54,080 --> 00:42:57,520 Speaker 18: multi year trend. The big question obviously is whether the 783 00:42:57,640 --> 00:43:00,560 Speaker 18: GPUs that they are getting from aw US are they 784 00:43:00,640 --> 00:43:03,120 Speaker 18: good enough or not. That will find out over time. 785 00:43:03,320 --> 00:43:05,799 Speaker 18: I can't make that prediction today whether you're going to 786 00:43:05,840 --> 00:43:08,719 Speaker 18: Google only for tech reasons, but if you look at 787 00:43:08,760 --> 00:43:11,200 Speaker 18: what even Microsoft is doing, you know they have allowed 788 00:43:11,239 --> 00:43:14,360 Speaker 18: Opening Eye to go out and sign deals with Oracle 789 00:43:14,520 --> 00:43:16,759 Speaker 18: with you know, other New York clouds, or Vive be 790 00:43:16,920 --> 00:43:19,560 Speaker 18: one of them. So you know everybody is going and 791 00:43:19,600 --> 00:43:22,279 Speaker 18: trying to find capacity right now, and that's the state 792 00:43:22,320 --> 00:43:23,240 Speaker 18: we are in at this point. 793 00:43:24,480 --> 00:43:28,319 Speaker 3: One source did tell me that the talks are about TPUs, 794 00:43:28,400 --> 00:43:30,520 Speaker 3: but we'll keep reporting and we'll get the analysis from 795 00:43:30,560 --> 00:43:34,120 Speaker 3: blooming Intelligence and ANAA Rana thank you very much. Indeed, 796 00:43:34,760 --> 00:43:37,680 Speaker 3: that does it for this edition of Bloomberg Tech. A 797 00:43:37,680 --> 00:43:39,920 Speaker 3: lot of breaking news, a lot of it originating from 798 00:43:39,920 --> 00:43:42,120 Speaker 3: Bloomberg's newsroom, but we are like right in the thick 799 00:43:42,120 --> 00:43:45,440 Speaker 3: of earning season, so recap on the podcast. You know 800 00:43:45,480 --> 00:43:47,839 Speaker 3: where to find it on the Bloomberg terminal as well 801 00:43:47,840 --> 00:43:51,960 Speaker 3: as online on Apple, Spotify, and iHeart. I appreciate all 802 00:43:51,960 --> 00:43:54,000 Speaker 3: of you that tune in live every single day, but 803 00:43:54,040 --> 00:43:56,760 Speaker 3: I know so many of you listen to this show 804 00:43:56,880 --> 00:43:59,560 Speaker 3: in the form of a podcast, whether it's here in 805 00:43:59,560 --> 00:44:01,200 Speaker 3: sid can Alley or beyond. 806 00:44:01,760 --> 00:44:03,600 Speaker 2: Have a great week. This is Bloomberg Tech