WEBVTT - Anthropic, Google Discuss Multibillion-Dollar Cloud Deal 0:00:02.520 --> 0:00:13.720 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is alive 0:00:13.760 --> 0:00:17.560 from coast to coast with Caroline Hide in New York 0:00:17.840 --> 0:00:19.840 and Eva Low in San Francisco. 0:00:23.079 --> 0:00:24.800 This is Bloomberg Tech coming up. 0:00:24.840 --> 0:00:28.880 Anthropic and Google discussing a deal for cloud computing services 0:00:28.960 --> 0:00:32.720 valued in the high tens of billions of dollars plus. 0:00:32.720 --> 0:00:36.560 We breakdown earnings, Netflix and Texas Instruments in focus while 0:00:36.560 --> 0:00:39.959 we await Tesla's results after the closing Bell and Hot 0:00:40.000 --> 0:00:42.199 on the heels of AT and T zone earnings, we 0:00:42.280 --> 0:00:47.120 discuss with the company's CEO, John Stanky. Let's get to 0:00:47.120 --> 0:00:52.280 our top story overnight, Bloomberg breaking the story that Anthropic 0:00:52.479 --> 0:00:56.760 is in talks with Alphabets, specifically Google, for cloud computing 0:00:56.800 --> 0:00:58.320 capacity high tens. 0:00:58.040 --> 0:01:01.160 Of billions of dollars. Tap user in the mix. 0:01:01.400 --> 0:01:04.640 When we broke the story, alphabet Chez jumped in after 0:01:04.760 --> 0:01:07.880 market Amazon fell. This is where we're trading right now 0:01:08.000 --> 0:01:08.880 Wednesday's session. 0:01:09.280 --> 0:01:11.840 I broke that story. We're blooming both. Rachel Mets Let's 0:01:11.880 --> 0:01:12.520 get out to her. 0:01:12.920 --> 0:01:16.679 Actually, Rachel like, the details are quite simple to understand 0:01:16.800 --> 0:01:19.200 early talks, and they're around capacity. 0:01:19.280 --> 0:01:20.840 But let's recap what we. 0:01:20.880 --> 0:01:25.080 Know Yeah, so, as you said, the two companies have 0:01:25.160 --> 0:01:30.240 been discussing a plan for Enthropic to use Google's tensor 0:01:30.280 --> 0:01:34.720 processing units TPUs. These are chips that are are can 0:01:34.760 --> 0:01:36.080 be used for a lot of things, but they also 0:01:36.160 --> 0:01:38.560 can be used for EA workloads and Nanthropic, I think 0:01:38.560 --> 0:01:41.880 it's important to remember, is already a customer of Google's 0:01:42.080 --> 0:01:45.880 for its cloud service, and also Google is an investor 0:01:45.920 --> 0:01:50.240 in Anthropic, and Aanthrotic is a similar deal with Amazon too, 0:01:50.560 --> 0:01:53.880 So that's why you sort of see these these mixed reactions. 0:01:55.760 --> 0:01:58.480 There has been a lot of reaction to our reporting. 0:01:58.560 --> 0:02:01.160 Later in the program, we're going to speaker Intelligence about 0:02:01.160 --> 0:02:04.920 their take on it. Anthropic have been busy of late, right. 0:02:05.000 --> 0:02:07.280 We've reported that Dario ami Day did this kind of 0:02:07.280 --> 0:02:11.639 tour of the Middle East seeking both money and compute capacity. 0:02:12.520 --> 0:02:14.920 The compute capacity bit is where people are trying to 0:02:15.000 --> 0:02:18.399 understand this, like is it that just Anthropic really needs 0:02:18.440 --> 0:02:20.920 as much capacity as it can get, or is this 0:02:20.960 --> 0:02:24.160 a story about how actually Google is kind of becoming 0:02:24.160 --> 0:02:27.280 the better partner for Anthropic beyond an Amazon. 0:02:28.560 --> 0:02:30.240 I think there's a couple of things that could be 0:02:30.280 --> 0:02:33.720 happening here. One is that yes, building the kind of 0:02:34.160 --> 0:02:39.600 AI models that Anthropic is building is extremely compute intensive, 0:02:39.680 --> 0:02:42.519 and you can't just use like any cloud capacity you 0:02:42.520 --> 0:02:45.160 could find anywhere, and you can't just use any ships. 0:02:45.200 --> 0:02:46.760 You have to use certain ships that are going to 0:02:46.840 --> 0:02:49.639 work well for the kinds of large language models they're 0:02:49.639 --> 0:02:52.560 building and the kinds of models that they are serving 0:02:52.600 --> 0:02:56.320 to people. So it seems like a vote confidence potentially 0:02:56.400 --> 0:02:59.080 for Google and for its chips. I mean, hardly any 0:02:59.080 --> 0:03:03.800 companies beyond Video AMD maybe one or two others have 0:03:04.080 --> 0:03:07.600 chips that people are willing to be using for these 0:03:07.680 --> 0:03:11.840 kinds of AI workloads. It also could make people a 0:03:11.880 --> 0:03:14.799 little nervous about what it sets about Amazon and its 0:03:14.840 --> 0:03:18.200 ability to provide the services that a company like Antropic needs. 0:03:19.080 --> 0:03:22.080 Bloom both racial mets, thank you very much. Let's get 0:03:22.120 --> 0:03:25.000 to the earning stories, starting with Texas Instruments in stockfell 0:03:25.080 --> 0:03:27.760 the most in three months after it gave a lackluster 0:03:27.840 --> 0:03:31.839 forecast for the current quarter. Bloomberg's chips reporter Ian King 0:03:31.919 --> 0:03:40.200 is with us actually probably more simple story than we expected. 0:03:40.960 --> 0:03:44.800 We got a lens into the health of analog devices. 0:03:45.680 --> 0:03:49.560 Texas Instruments is analog chips. You covered the earnings blow 0:03:49.600 --> 0:03:51.040 by blow. What do we need to know about this? 0:03:51.400 --> 0:03:54.320 So the first off, the numbers not too bad. Fourteen 0:03:54.320 --> 0:03:57.960 percent growth for most companies will be fine projecting something 0:03:58.480 --> 0:04:01.160 in the region of eleven percent this current quarter. But 0:04:01.240 --> 0:04:03.520 what they said was more important. What they said was 0:04:04.000 --> 0:04:06.680 things are coming back. Everything's okay, but just not at 0:04:06.720 --> 0:04:09.480 the pace that we had been expecting. There's still some 0:04:09.560 --> 0:04:13.400 uncertainty out there. This is macro related. Companies aren't investing 0:04:13.440 --> 0:04:16.280 in their factories perhaps as quickly as we had hoped. 0:04:16.480 --> 0:04:17.400 And really they. 0:04:17.320 --> 0:04:19.279 Were sort of painting this picture of a kind of 0:04:19.440 --> 0:04:23.080 an anemic kind of return to growth for the whole industry. 0:04:23.279 --> 0:04:27.200 When I was reviewing your story, the CEO said that 0:04:27.400 --> 0:04:33.240 overall the semi conductor market recovery is continuing. That seems 0:04:33.240 --> 0:04:36.400 a little bit in congruous with the market's reaction to 0:04:36.400 --> 0:04:38.800 what's going on the socks down five percent, but also 0:04:38.920 --> 0:04:41.400 kind of you know what's specific to them. 0:04:41.920 --> 0:04:46.200 Well, what they're projecting is basically seasonal, Right, what would 0:04:46.200 --> 0:04:49.440 happen normally if everything is equal in the fourth quarter. 0:04:50.440 --> 0:04:53.240 The problem is with that is that if we're in 0:04:53.279 --> 0:04:55.800 this recovery period, if we're in this bounce back from 0:04:55.800 --> 0:04:58.840 this inventory correction that we've suffered. Things should be growing 0:04:58.920 --> 0:05:02.160 quicker than that. People should be rushing to stock up, 0:05:02.200 --> 0:05:04.359 people should be rushing to build new things, and they're not. 0:05:05.040 --> 0:05:06.920 Bloomberg, se and King, thank you very much. 0:05:06.960 --> 0:05:09.080 We actually just had some breaking news at the top 0:05:09.080 --> 0:05:12.560 of the show, and it is moved shares of Google. 0:05:12.960 --> 0:05:14.120 You can see there on the screen. 0:05:14.480 --> 0:05:18.920 The company ran an algorithm on its Willow quantum computing 0:05:19.080 --> 0:05:23.039 chip that can be repeated on similar platforms and outperform 0:05:23.120 --> 0:05:26.400 classical supercomputers. A breakthrough, it said, clear as a path 0:05:26.440 --> 0:05:31.159 for useful applications of quantum technology within five years. This 0:05:31.279 --> 0:05:35.560 was detailed in a paper published Wednesday in the science 0:05:35.800 --> 0:05:38.279 journal Nature. And you can see there on the screen 0:05:38.320 --> 0:05:40.839 the right hand side of the chart. When those headlines hit, 0:05:41.279 --> 0:05:43.920 Alphabet shares, who had given up the gain they'd seen 0:05:43.960 --> 0:05:47.679 from our reporting on Anthropic, suddenly jumped in the session 0:05:47.720 --> 0:05:50.680 to a gain of around two percent. We will continue 0:05:50.720 --> 0:05:53.920 to track that story and alphabet shares throughout the show. Okay, 0:05:53.960 --> 0:05:59.080 back to earnings. Another steep share drop. Netflix disappointed investors 0:05:59.080 --> 0:06:02.719 with its results. The streaming giant blamed a tax dispute 0:06:02.720 --> 0:06:04.000 with Brazil for. 0:06:04.040 --> 0:06:06.000 A cut to its third quarter earnings. 0:06:06.080 --> 0:06:10.000 Let's get more with Bloomberg's media editor Felix Gillette. This 0:06:10.160 --> 0:06:12.880 tax issue. Like yesterday, I went on television all day 0:06:12.920 --> 0:06:15.880 long saying, maybe there'll be a foreign currency benefit to 0:06:15.920 --> 0:06:19.719 Netflix's earnings. We'll learn about advertising, but actually this tax 0:06:19.760 --> 0:06:21.000 issue is the main story. 0:06:21.320 --> 0:06:22.000 Just explain it. 0:06:23.400 --> 0:06:23.719 Ah. 0:06:23.760 --> 0:06:26.080 This is a long ago in dispute that Netflix has 0:06:26.200 --> 0:06:29.360 warned about in violence before. They didn't factor it into 0:06:29.400 --> 0:06:31.960 the forecast. They ended up having to pay several hundred 0:06:32.000 --> 0:06:34.240 million dollars more to Brazil. They're saying it's a one 0:06:34.320 --> 0:06:38.000 time deal, it's not going to be material impact moving forward. 0:06:38.240 --> 0:06:41.160 They're trying to steer the attention back to the growth. 0:06:41.279 --> 0:06:43.919 You know, seventeen point five percent growth in sales for 0:06:44.000 --> 0:06:47.280 the quarter, and you know profit growth also up. 0:06:48.760 --> 0:06:51.159 You know, we were talking Felix about the idea that 0:06:51.560 --> 0:06:54.240 Netflix wants to be judged by its sort of traditional 0:06:54.240 --> 0:06:58.039 financial metrics. Those were quite good generally speaking, right. 0:06:58.600 --> 0:07:01.800 Yeah, yeah, I mean a fine at this point. You know, 0:07:01.839 --> 0:07:04.440 I think investors were looking for more than fine. They 0:07:04.440 --> 0:07:07.200 were looking for a complete blowout quarter, in part because 0:07:07.480 --> 0:07:10.000 you know, they had such a strong slate of program 0:07:10.040 --> 0:07:13.680 in the third quarter. You know, Wednesday new episodes, Quid Game, 0:07:13.760 --> 0:07:17.320 new episodes, k Pop Demon Hunters. So at this point, yeah, 0:07:17.360 --> 0:07:20.120 the programming looked good, the growth and sales look good. 0:07:20.200 --> 0:07:21.720 But investors one and one. 0:07:23.040 --> 0:07:25.720 Bloomberg's Felix Jellette really appreciate your time. 0:07:25.800 --> 0:07:27.120 Thank you very much. A. 0:07:27.240 --> 0:07:30.679 Yoko Yoshioka is a portfolio consulting director at the Wealth 0:07:30.760 --> 0:07:34.800 Enhancement Group, which holds some of the major Magnificent seven 0:07:34.880 --> 0:07:37.760 names Texas Instruments and I think we can also talk 0:07:37.800 --> 0:07:40.320 a little bit about Netflix. That's where I quite like 0:07:40.400 --> 0:07:43.760 to start earning. Season in technology can bring all kinds 0:07:43.760 --> 0:07:46.880 of beautiful stories. Did you have a tax dispute with 0:07:46.920 --> 0:07:49.960 Brazil on your Bingo card? For Netflix would tell us 0:07:50.000 --> 0:07:51.120 about the world of streaming. 0:07:51.600 --> 0:07:55.559 I did not have Brazil tax issues on my Bingo card. 0:07:56.200 --> 0:07:59.800 But I think the Netflix earnings were actually pretty decent. 0:08:00.520 --> 0:08:04.080 You know, we forget that Netflix has actually come a 0:08:04.120 --> 0:08:07.120 long way from a free cash flow growth perspective. They 0:08:07.120 --> 0:08:09.640 were only generating about one point six billion about two 0:08:09.680 --> 0:08:12.080 and a half years ago, and now they're generating close 0:08:12.120 --> 0:08:15.360 to eight billion dollars in free cash flow, and that's 0:08:15.680 --> 0:08:18.600 slated to go to eleven billion dollars so we'd like 0:08:18.680 --> 0:08:22.520 to focus on that metric versus the Brazilian tax issue. 0:08:23.160 --> 0:08:25.760 Okay, team, let's leave the shares up, Ayoka, we're showing 0:08:25.800 --> 0:08:28.120 shares on the screen. This stocks down almost ten percent, 0:08:28.480 --> 0:08:31.040 on track for its biggest drop since April twenty twenty two. 0:08:31.840 --> 0:08:34.560 What was the big picture story about the health of 0:08:34.640 --> 0:08:39.600 streamers and streaming here and when Netflix sits in that landscape? 0:08:39.840 --> 0:08:42.720 Sure, I think from a consumer standpoint, you know, Netflix 0:08:42.760 --> 0:08:47.360 is one of those go to programs that consumers are 0:08:47.400 --> 0:08:50.160 going to continue to go to. I think that, you know, 0:08:50.360 --> 0:08:54.280 for Netflix, the content you mentioned has been very solid, 0:08:54.640 --> 0:08:57.800 and even if the macro environment is a little shaky 0:08:57.840 --> 0:09:00.679 out there, I think Netflix will continue to see subscriber 0:09:00.720 --> 0:09:03.040 growth and that's what we'd like to see over time. 0:09:04.120 --> 0:09:06.880 But Yoko, let's get back to our top story today. Overnight, 0:09:07.440 --> 0:09:10.520 Rachel Davey and I broke the story that Google is 0:09:10.520 --> 0:09:15.000 in early talks with Anthropic for a cloud computing deal 0:09:15.760 --> 0:09:18.640 capacity in the high tens of billions of dollars. When 0:09:18.640 --> 0:09:22.319 we broke that story, Alphabet shares really jumped in after market. 0:09:22.400 --> 0:09:25.440 They've given up some of that gain in the market 0:09:25.559 --> 0:09:30.840 open this morning, and Amazon fell wealth enhancement has some exposure, 0:09:30.920 --> 0:09:34.720 particularly to Alphabet. What is your reaction to that reporting 0:09:34.760 --> 0:09:37.400 and what does it signal to you for those companies involved. 0:09:37.720 --> 0:09:40.880 Yeah, I think in general, the sort of clue to 0:09:40.960 --> 0:09:45.760 me is just the infrastructure buildout is still in its 0:09:45.800 --> 0:09:49.920 early phases, right. You know, we've heard so many announcements 0:09:50.040 --> 0:09:52.640 over the last several months, and yet here we are 0:09:52.679 --> 0:09:55.240 with another one. And just when you thought you weren't 0:09:55.320 --> 0:09:58.800 going to get another announcement related to AI infrastructure buildouts, 0:09:58.920 --> 0:10:02.760 you here we are Google and Anthropic. I think that 0:10:02.960 --> 0:10:05.520 the race is clearly on and we'll have to see 0:10:05.640 --> 0:10:08.440 who's really going to win, But the build out is 0:10:08.679 --> 0:10:10.320 sort of still in its early phases. 0:10:12.480 --> 0:10:15.960 The cloud computing market, as we've always understood it and 0:10:16.000 --> 0:10:20.439 talked about it is AWS number one player, Google Cloud 0:10:20.679 --> 0:10:25.280 number three player. In the specifics of this story, both 0:10:25.320 --> 0:10:29.280 of those companies as it relates to AI workloads have 0:10:29.400 --> 0:10:32.800 some questions to answer here. Right, So Amazon is also 0:10:32.840 --> 0:10:37.560 a significant investor in Anthropic. Our reporting says that Anthropic 0:10:37.600 --> 0:10:41.520 wants to use TPUs. What are you learning about the 0:10:41.559 --> 0:10:46.000 competitive nature of Alphabet's cloud offering or Google's cloud offering 0:10:46.160 --> 0:10:48.400 versus Amazon's in the AI domain. 0:10:49.160 --> 0:10:51.200 Sure, so, I think we have to really dig into 0:10:51.240 --> 0:10:53.679 this in terms of, you know, what are the TPUs 0:10:53.840 --> 0:10:58.120 offering in terms of optimizing workflows that GPUs aren't, and 0:10:58.160 --> 0:11:01.600 how is this better suited for you know, Google's sort 0:11:01.600 --> 0:11:05.320 of overall workflow, and how they're going to be using 0:11:05.360 --> 0:11:09.280 AI through Gmail and Google Maps and a lot of 0:11:09.320 --> 0:11:12.280 their applications that they have in house. And then how 0:11:12.320 --> 0:11:15.679 does that fit related to Amazon and how you know, 0:11:15.720 --> 0:11:19.000 some of the algorithms are working for Amazon's you know, 0:11:19.360 --> 0:11:23.400 suggestions for retail as well as advertising. I think there's 0:11:23.400 --> 0:11:26.280 still a lot to dig into here in terms of 0:11:26.400 --> 0:11:27.880 how this is all going to work out. 0:11:29.720 --> 0:11:33.680 Texas Instruments is worth lingering on. I think, you know, 0:11:33.760 --> 0:11:36.720 sometimes it's seen as almost like a crystal ball of 0:11:36.760 --> 0:11:39.679 what all kinds of end markets around the world will 0:11:39.720 --> 0:11:44.720 do coming up next because of how many analog chips 0:11:44.760 --> 0:11:45.720 go into all kinds of things. 0:11:45.720 --> 0:11:47.120 What was your read on the print there? 0:11:47.640 --> 0:11:47.960 Sure? 0:11:48.040 --> 0:11:50.960 So, I think in general, the you know, as Ian said, 0:11:52.080 --> 0:11:55.120 the overall quarter and earnings were actually pretty decent fourteen 0:11:55.160 --> 0:11:59.160 percent growth. But I think the bread through into industrial markets, 0:11:59.160 --> 0:12:03.000 into autumn motive, into some of the consumer electronics that 0:12:03.040 --> 0:12:06.000 are more basic really shows that we're not in a 0:12:06.040 --> 0:12:10.319 macro environment that is growing gangbusters. So outside of all 0:12:10.360 --> 0:12:13.239 of the AI investments that we're seeing in the economy, 0:12:13.480 --> 0:12:16.920 we're not seeing that sort of economic growth takeoff as 0:12:17.000 --> 0:12:18.840 much as I think people had hoped for. 0:12:21.000 --> 0:12:21.520 We're in it. 0:12:21.920 --> 0:12:25.839 This is it technology earning season, my super Bowl. I 0:12:25.880 --> 0:12:28.679 don't know if it's your super Bowl. What was it 0:12:28.720 --> 0:12:30.960 that we were expecting to hear and what do you 0:12:31.080 --> 0:12:33.880 need to hear from the technology sector specifically the mag 0:12:33.920 --> 0:12:37.920 seven I suppose to keep the direction of travel that 0:12:37.960 --> 0:12:39.840 we have seen in equity markets. 0:12:39.880 --> 0:12:42.560 Sure, so next week will be the big week for 0:12:42.640 --> 0:12:45.560 all of this, including a FED meeting to cap it 0:12:45.600 --> 0:12:49.000 all off too. So I think for us, we're always 0:12:49.040 --> 0:12:52.920 going to be looking at commentary around CAPEX spend. I mean, 0:12:52.920 --> 0:12:55.520 this is what really set it off years ago, and 0:12:55.600 --> 0:12:57.440 we're going to continue to see whether or not that 0:12:57.600 --> 0:13:00.840 spend continues from the hyperscalers or whether or not they 0:13:00.880 --> 0:13:02.920 need to, you know, take a little bit of a pause. 0:13:03.240 --> 0:13:05.280 But I think we're going to continue to see that spend. 0:13:05.320 --> 0:13:08.080 I mean, we're seeing announcements left and right, and so 0:13:08.280 --> 0:13:11.040 we'd like to kind of dig into that during earning season. 0:13:12.040 --> 0:13:15.520 Do you expect that tariff specifically or any other Trump 0:13:15.559 --> 0:13:18.960 administration policy will play out on the calls or in 0:13:19.000 --> 0:13:21.240 the statements in. 0:13:21.240 --> 0:13:23.840 The tech side. Maybe a little bit, but I don't 0:13:23.840 --> 0:13:26.280 think it's going to be as prominent as some of 0:13:26.320 --> 0:13:30.400 the consumer names have talked about with with tariffs and goods. 0:13:30.840 --> 0:13:32.880 I think it's going to be a less of an issue, 0:13:33.480 --> 0:13:35.320 you know. I think we've we've seen all of this 0:13:35.400 --> 0:13:39.200 talk about exporting that has had a little bit more 0:13:39.240 --> 0:13:42.120 of an impact, and the sort of tit for tat 0:13:42.160 --> 0:13:44.719 with China that's probably going to be a little bit 0:13:44.760 --> 0:13:48.000 more of an impact. But overall, I really do think 0:13:48.080 --> 0:13:50.840 that investors are going to be focused on general CAPPAC 0:13:50.880 --> 0:13:55.520 spend ROI around AI and you know how that's playing out. 0:13:56.240 --> 0:13:59.360 O Yoka, Yoshioka, the Wealth Enhancement Group really appreciate you 0:13:59.480 --> 0:14:01.439 rolling with the use of the day and a big 0:14:01.480 --> 0:14:04.520 tech earning season coming up. At and T CEO John 0:14:04.559 --> 0:14:08.360 Stankey joins us to talk about the company's earnings and 0:14:08.440 --> 0:14:11.600 it was a big one. Investors still making up their minds. 0:14:11.640 --> 0:14:24.880 That's next. This is Bloomberg Tech. Welcome to our Bloomberg 0:14:24.920 --> 0:14:28.000 TV and radio audiences. Worldwide. We bring in AT and 0:14:28.040 --> 0:14:31.480 T CEO John Stanky, the company reporting results this morning 0:14:31.720 --> 0:14:35.560 that showed higher than expected subscriber growth, though some analysts 0:14:35.560 --> 0:14:40.240 noting customer churn and average revenue per user showing signs 0:14:40.240 --> 0:14:40.720 of strain. 0:14:41.400 --> 0:14:43.600 John, it's great to have you back with us. You 0:14:43.600 --> 0:14:47.080 know the story. Thanks for having You're welcome. It's like 0:14:47.400 --> 0:14:48.320 a simple story. 0:14:48.600 --> 0:14:51.560 You know, the data from the quarter is very clear 0:14:52.160 --> 0:14:56.360 there was an element of promotion and marketing and deals 0:14:56.400 --> 0:14:57.120 that drove it. 0:14:57.240 --> 0:14:58.640 But how would you summarize it? 0:14:59.280 --> 0:15:01.880 Look, we had really strong growth, as you indicated, and 0:15:01.920 --> 0:15:04.680 we're really comfortable with our growth. As I think you're 0:15:04.720 --> 0:15:08.720 probably aware, we've been focusing on customers that want to 0:15:08.720 --> 0:15:12.800 buy both wireless and broadband from us, and when we 0:15:12.880 --> 0:15:16.320 can do that, even if it's promotional, that's a good 0:15:16.360 --> 0:15:19.040 customer to pick up because they have great lifetime values 0:15:19.080 --> 0:15:22.560 and over time they'll churn less and they'll address that 0:15:22.760 --> 0:15:25.280 very issue that you alluded to, which is the increasing 0:15:25.360 --> 0:15:29.280 churn in the industry. And we kind of anticipate as 0:15:29.280 --> 0:15:31.560 we acquire these customers, we're going to see a little 0:15:31.560 --> 0:15:35.800 bit of hardpoop pressure, partly because we obviously give them 0:15:35.840 --> 0:15:39.800 a better price for their loyalty, and over time we 0:15:39.840 --> 0:15:43.600 move them up on the continuumus services we sell, so 0:15:44.280 --> 0:15:45.960 excuse me, buy and largs. 0:15:45.960 --> 0:15:47.160 We feel really good about it. 0:15:48.600 --> 0:15:50.200 Oh, John, I don't know. 0:15:50.200 --> 0:15:51.680 If you have some water there with you, Let me 0:15:51.720 --> 0:15:53.360 give you a second, just to take a quick drink 0:15:53.400 --> 0:15:56.080 if you need it. Of course in the quarter, and 0:15:56.120 --> 0:15:59.200 we've discussed this with a number of the carriers. It 0:15:59.240 --> 0:16:01.960 was iPhone set team. You know, I was there at 0:16:02.000 --> 0:16:03.840 Kupatino Apple Park on the day. 0:16:03.680 --> 0:16:04.400 Of its release. 0:16:05.000 --> 0:16:07.520 Can you give us a real term sense, even if 0:16:07.520 --> 0:16:10.880 it's from the promotion perspective, of how big a fact 0:16:10.880 --> 0:16:12.480 of the iPhone seventeen was for you? 0:16:13.160 --> 0:16:16.320 Well, I think it's not a huge factor, but clearly 0:16:16.520 --> 0:16:18.960 there was a little bit of suppressed activity after the 0:16:19.080 --> 0:16:22.800 last iPhone cycle a year ago. Maybe some folks anticipated 0:16:22.840 --> 0:16:25.000 it was going to be a little bit larger customers 0:16:25.040 --> 0:16:27.960 were seeing if it was really frame breaking and change 0:16:28.000 --> 0:16:32.080 and concluded possibly that it wasn't and delayed waiting for 0:16:32.120 --> 0:16:34.280 the next cycle. And I think, you know, you can 0:16:34.320 --> 0:16:37.800 only suppress that activity for so long, and now the 0:16:37.800 --> 0:16:40.640 new device comes out, people see what it is. So 0:16:40.720 --> 0:16:44.520 there has been an increase over last year and maybe 0:16:44.520 --> 0:16:47.800 some other previous years. It's not a record breaking cycle, 0:16:47.840 --> 0:16:51.000 but it's strong and we're seeing that as a result. 0:16:51.120 --> 0:16:53.560 But I don't think it's anything dramatically out of pattern, 0:16:53.680 --> 0:16:57.360 given the suppression we've seen in the market, and we 0:16:57.360 --> 0:16:59.960 were very effective at working through at four hundred thousan 0:17:00.160 --> 0:17:03.560 in over four hundred thousand postpai vone netads. It shows 0:17:03.560 --> 0:17:05.560 we can compete in that space and do well with it. 0:17:06.960 --> 0:17:09.600 If you're joining us on Bloomberg Television Radio, we're speaking 0:17:09.600 --> 0:17:13.440 to AT and Tco John Stanky final on the iPhone seventeen. 0:17:13.920 --> 0:17:16.280 Will it be more of a factor in the three 0:17:16.280 --> 0:17:18.400 month period that ends in December? 0:17:19.160 --> 0:17:22.840 The holidays, well, the holiday season moving through the fourth 0:17:22.880 --> 0:17:25.959 quarter is always a peak season for everybody in the industry. 0:17:26.000 --> 0:17:28.800 I expect that's going to continue to be the case 0:17:28.880 --> 0:17:32.760 this year. I don't see anything what we've had over 0:17:32.760 --> 0:17:35.400 the first couple of weeks of the introduction to suggest 0:17:36.000 --> 0:17:38.440 we're going to see a step function change from current 0:17:38.520 --> 0:17:41.560 rate and pace. So all of our forward guidance that 0:17:41.560 --> 0:17:45.600 we've given expects that it's going to be competitive, that 0:17:45.680 --> 0:17:47.840 we're going to compete and continue to earn our fair 0:17:47.880 --> 0:17:51.560 share of service revenues on those converged customers I talked about, 0:17:51.600 --> 0:17:55.000 and I expect that it'll be as rambunctious in the 0:17:55.040 --> 0:17:57.320 industry as it has been and we'll do just fine. 0:17:58.480 --> 0:17:58.720 John. 0:17:58.760 --> 0:18:01.879 If I turn on my division and watch a show 0:18:01.920 --> 0:18:04.480 that has ads or a scroll on any given social 0:18:04.560 --> 0:18:09.359 media timeline, I keep seeing AT and T talking about 0:18:09.359 --> 0:18:12.920 itself as a home internet provider. I know that's been 0:18:12.920 --> 0:18:16.880 a priority. Have you any evidence that that push has 0:18:16.920 --> 0:18:19.840 been a success and that you have positioned AT and 0:18:19.880 --> 0:18:20.720 T in that domain? 0:18:21.160 --> 0:18:23.639 Well, I'm glad you're seeing those mean we must be 0:18:23.680 --> 0:18:26.240 getting our right market and targets out there, and I 0:18:26.240 --> 0:18:29.520 think this quarter was an excellent example of it. We 0:18:29.640 --> 0:18:34.800 had our best broadband gain on our strategic products and 0:18:34.840 --> 0:18:39.080 services fixed, wireless and fiber that we've had in eight years, 0:18:39.720 --> 0:18:42.520 and so over five hundred and fifty thousand ADS on 0:18:42.600 --> 0:18:45.440 those strategic products and a net gain of over two 0:18:45.480 --> 0:18:48.200 hundred and thirty thousand of broadband total. It's the best 0:18:48.200 --> 0:18:50.000 we've done in eight years. I think that's a good, 0:18:50.119 --> 0:18:55.159 strong indication that it's working, especially when you consider the 0:18:55.240 --> 0:18:59.160 industry has been rife with examples of our competitors adjusting 0:18:59.160 --> 0:19:01.639 their offers trying to do different things to stem the 0:19:01.680 --> 0:19:04.520 momentum we've had. So I feel really good about where 0:19:04.560 --> 0:19:06.520 we're going on that front, and to the effect, we 0:19:06.520 --> 0:19:09.919 can add that with wireless subscribers, which we're showing that 0:19:09.960 --> 0:19:12.600 we can do over fifty percent of the time when 0:19:12.640 --> 0:19:16.800 somebody buys our fixed wireless product and we're over forty 0:19:16.840 --> 0:19:20.320 one percent penetrated on our fiber base. That's a winning 0:19:20.359 --> 0:19:23.560 combination economically, and what kind of differentiates us from everybody 0:19:23.600 --> 0:19:24.480 else in the industry. 0:19:26.000 --> 0:19:29.320 Okay, shares a down a touch more than one percent, 0:19:29.440 --> 0:19:32.080 which in the grand scheme of today is modest, is 0:19:32.080 --> 0:19:34.679 a decline. The back and forth you had with the 0:19:34.720 --> 0:19:40.280 analyst was, yes, churn is up and arpus are down, 0:19:40.680 --> 0:19:43.639 but you seem not to be concerned about that. Why 0:19:44.200 --> 0:19:47.199 Why is that not the metrics by which we should 0:19:47.400 --> 0:19:48.840 should look to progress? 0:19:49.160 --> 0:19:51.360 Yeah, part of it, I think ed as well, as 0:19:51.359 --> 0:19:53.520 we've got a little bit of churn going on in 0:19:53.560 --> 0:19:57.560 the industry from CEO changeouts and there's a little uncertainty 0:19:57.600 --> 0:20:00.399 around what the competitive posture is going to and then 0:20:00.400 --> 0:20:02.399 you look at the data points you just reference, and 0:20:02.920 --> 0:20:06.160 we're the first to report, and people are asking what's 0:20:06.200 --> 0:20:09.160 going to happen when we hear from everybody else, And 0:20:09.640 --> 0:20:12.920 my answering your question is, we're going to talk about 0:20:12.920 --> 0:20:15.639 the fact that we're focused on putting customers together with 0:20:15.720 --> 0:20:20.240 wireless and broadband, and part of that dynamic is go 0:20:20.320 --> 0:20:23.760 penetrate segments that we've not been successful at penetrating or 0:20:23.800 --> 0:20:24.639 as successful. 0:20:24.720 --> 0:20:26.680 So when we go to value. 0:20:26.400 --> 0:20:29.040 Segments that were maybe a little under shared in, you're 0:20:29.040 --> 0:20:32.200 going to naturally have a little bit less arpoo or 0:20:32.240 --> 0:20:35.640 average revenue per user when you pick that customer up, 0:20:35.640 --> 0:20:39.080 and when you combine wireless and broadband together, you may 0:20:39.080 --> 0:20:42.120 be giving initially a little bit better deal to do that, 0:20:42.640 --> 0:20:45.240 but that's designed into the plan. We want to grow 0:20:45.359 --> 0:20:49.240 and aggregate service revenues, which we've demonstrated that we can 0:20:49.320 --> 0:20:52.399 do that. We indicated we're going to see some strengthening 0:20:52.440 --> 0:20:54.640 of that as we move through the year from where 0:20:54.640 --> 0:20:57.240 we were this quarter. And I'm okay with a little 0:20:57.240 --> 0:21:00.879 bit lower urpoo if we actually execute on the consolidated 0:21:00.920 --> 0:21:04.879 customer strategy and are more successful and penetrating some of 0:21:04.880 --> 0:21:06.679 these segments that we haven't been as active in. 0:21:08.200 --> 0:21:10.639 John Stankey at and t CEO, it's great to have 0:21:10.720 --> 0:21:12.280 you back here on Bloomberg Tech. 0:21:12.359 --> 0:21:15.399 Thank you very much. Okay. 0:21:15.440 --> 0:21:18.120 Coming up, ARM could be on the way to providing 0:21:18.240 --> 0:21:21.919 full chips because customers demand faster pass to market. 0:21:22.400 --> 0:21:25.760 We have more on that next. This is Bloomberg Tech. 0:21:52.359 --> 0:21:56.919 ARM is exploring an expansion into producing full complete chips 0:21:57.000 --> 0:22:01.040 as AI customers seek faster routes to marketsfo Jason Child 0:22:01.240 --> 0:22:04.719 discuss the plans with Bloomberg Tech's Tom McKenzie in London. 0:22:05.359 --> 0:22:09.920 We're actually exploring building full chips and the reason why 0:22:10.240 --> 0:22:13.080 is we are actually having customers in this AI cycle 0:22:13.480 --> 0:22:16.040