WEBVTT - Micron's US Grant, Oracle Falls Most in a Year 0:00:01.560 --> 0:00:05.240 From Mahard where Innovation of Money and Power Collie in 0:00:05.320 --> 0:00:10.280 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde 0:00:10.280 --> 0:00:11.400 and Ed loved Love. 0:00:25.040 --> 0:00:25.800 Live from New York. 0:00:25.880 --> 0:00:29.040 This is Bloomberg Technology coming up a victory for Micron 0:00:29.120 --> 0:00:31.600 as the company gets it's a weighted six billion dollar 0:00:31.640 --> 0:00:32.760 grant from the US government. 0:00:33.080 --> 0:00:35.000 We discuss us, We break down the. 0:00:34.920 --> 0:00:37.600 Tech earnings with Oracle falling the most in a year 0:00:37.840 --> 0:00:41.040 after posting lukewarm quarterly revenues, and we sit down with 0:00:41.080 --> 0:00:44.320 the CEOs of Omnicon and Into Public to dissect the 0:00:44.360 --> 0:00:48.479 deal creating the world's largest advertising company. But first we 0:00:48.640 --> 0:00:52.040 check in on these markets. The key points contributor to 0:00:52.040 --> 0:00:53.920 the upside on the Nasdaq, which does hold in the 0:00:53.960 --> 0:00:55.640 green is up three point seven percent. 0:00:55.640 --> 0:00:56.600 It's all about Alphabet. 0:00:56.640 --> 0:00:58.880 Look, actually, we had that head of Quantum AI on 0:00:58.920 --> 0:01:01.600 the show yesterday discuss saying the breakthroughs they're making in 0:01:01.680 --> 0:01:04.680 quantum computing in the Willow chip and this really feeds 0:01:04.760 --> 0:01:07.959 into a well virtuous cycle as to whether it's about 0:01:08.000 --> 0:01:10.680 quantum AI and cloud All eyes on Alphabet move on 0:01:10.720 --> 0:01:12.840 as someone to look at the drags to the downside 0:01:13.000 --> 0:01:15.440 note of them in the chips name Space, but software 0:01:15.480 --> 0:01:18.280 also we're looking at cloud and software, with Oracle off 0:01:18.280 --> 0:01:20.320 by seven percent at one point, down as much as 0:01:20.360 --> 0:01:22.720 ten percent as look, an eighty percent ramp up in 0:01:22.760 --> 0:01:25.560 these shares so far this year, therefore, had a high 0:01:25.640 --> 0:01:29.280 bar for its earnings, and look, the forecast didn't beat expectations. 0:01:29.880 --> 0:01:32.200 Neither did the nine percent growth in revenue, even though 0:01:32.200 --> 0:01:34.960 they did delivering cloud Infrastructure'm looking at TSMC, also, a 0:01:35.040 --> 0:01:37.480 name that's up eighty percent so far this year. We're 0:01:37.480 --> 0:01:39.720 down one point seven percent, even though they show that 0:01:39.840 --> 0:01:42.240 November sales are ramping ever high and more than thirty percent. 0:01:42.280 --> 0:01:44.280 We dig into that in a minute. Micron as well, 0:01:44.280 --> 0:01:47.080 off by two point two percent. Although finally they get 0:01:47.080 --> 0:01:49.520 certainty around that six billion dollar grant coming from the 0:01:49.560 --> 0:01:52.000 Chipsack coming from the US government to be able to 0:01:52.080 --> 0:01:55.680 expand memory offering and manufacturing here in the United States. 0:01:56.040 --> 0:01:58.480 It's a relief. Let's talk about it with Peter Elstrom 0:01:58.840 --> 0:01:59.720 and Peter. 0:01:59.600 --> 0:02:01.480 I'm in to. This is a relief. 0:02:01.520 --> 0:02:03.440 It was an overhang on the stock because we're worried 0:02:03.480 --> 0:02:05.560 that maybe the Trump administration would deny it. 0:02:06.840 --> 0:02:08.040 Yeah, that's exactly right. 0:02:08.560 --> 0:02:12.240 This is a program where the Biden administration has tried 0:02:12.280 --> 0:02:15.239 to rebuild the semiconductor industry in the United States. The 0:02:15.320 --> 0:02:18.040 Chips Act is one of the landmark programs that the 0:02:18.080 --> 0:02:20.359 administration had, and they wanted to make sure that they 0:02:20.400 --> 0:02:24.160 locked down this money because Trump personally had criticized these 0:02:24.480 --> 0:02:27.360 agreements is so bad and the Republicans that even floated 0:02:27.400 --> 0:02:29.480 the idea that maybe they try to repeal this even 0:02:29.480 --> 0:02:32.720 though it was passed with bipartisan support. So the Commerce 0:02:32.760 --> 0:02:34.960 Department is trying to lock down these agreements now and 0:02:35.040 --> 0:02:37.880 finalize the details as much as they can before there's 0:02:37.919 --> 0:02:43.000 this transition in January. So Micron, the really big US 0:02:43.440 --> 0:02:46.000 maker of memory chips, won this award more than six 0:02:46.080 --> 0:02:49.079 billion dollars. That's going to help them build out facilities 0:02:49.120 --> 0:02:52.200 in Idaho and New York to very key states and 0:02:52.280 --> 0:02:55.920 try to build up their ability to develop more advanced 0:02:56.000 --> 0:02:58.799 memory chips, including these HBM memory chips that are used 0:02:58.800 --> 0:03:02.480 with AI from Nvidia to be able to train AI models. 0:03:02.680 --> 0:03:02.800 Well. 0:03:02.840 --> 0:03:06.080 The manufacturing king is of course TSMC, and they're just 0:03:06.160 --> 0:03:09.760 showing how still that focus on AI is a living, 0:03:09.800 --> 0:03:12.360 breathing thing. Even though we'd have perhaps been worried about 0:03:12.360 --> 0:03:16.120 the buildout of data bass and more broadly slowing down. 0:03:17.480 --> 0:03:21.200 That's right, TSMC sits in an unusual market in Taiwan. 0:03:21.320 --> 0:03:24.239 Companies have to report their monthly sales, so we get 0:03:24.360 --> 0:03:27.680 little drips and drabs of information throughout the quarter before 0:03:27.680 --> 0:03:29.680 we get the final results. So these are mostly just 0:03:29.760 --> 0:03:32.360 revenue that the company puts out there. But what we 0:03:32.440 --> 0:03:34.880 did see from TSMC is that revenue is up more 0:03:34.920 --> 0:03:37.280 than thirty percent. As you said, they are a bell 0:03:37.360 --> 0:03:40.000 weather for AI because they make the most advanced chips 0:03:40.000 --> 0:03:43.280 in the industry, including the chips that Nvidia uses to 0:03:43.280 --> 0:03:46.160 be able to sell to the likes of Microsoft and 0:03:46.240 --> 0:03:49.040 open Ai and Google. So it gives us an early 0:03:49.080 --> 0:03:51.840 indication of how that demand is holding up. One of 0:03:51.840 --> 0:03:54.440 the big questions overhanging the whole AI boom at this 0:03:54.480 --> 0:03:56.400 point is whether companies are going to be able to 0:03:56.400 --> 0:03:59.320 figure out whether there's a profitable way to deploy these models, 0:03:59.480 --> 0:04:02.400 whether they can actually makes some money after investing really 0:04:02.440 --> 0:04:04.960 tens of billions of dollars. At this point, TSMC is 0:04:04.960 --> 0:04:07.200 getting a lot of that benefit right now. The question 0:04:07.240 --> 0:04:10.600 is whether it's a long term trend that TSMC and 0:04:10.640 --> 0:04:12.400 others are going to be able to benefit from or 0:04:12.440 --> 0:04:15.240 whether there's some tapering that comes up if the profits 0:04:15.280 --> 0:04:18.159 don't materialize pretty soon, what is the killer application? 0:04:18.520 --> 0:04:21.920 Putilstrom thanks so much breaking down chip makers. Meanwhile, let's 0:04:21.920 --> 0:04:24.960 stick with Chinese president using pain saying that China has 0:04:24.960 --> 0:04:27.760 full confidence in achieving its five percent economic growth target 0:04:27.760 --> 0:04:31.279 this year. He also told international economic organizations gathered in 0:04:31.320 --> 0:04:34.279 Beijing that China is willing to maintain and promote the 0:04:34.279 --> 0:04:35.919 development of relations with the US. 0:04:35.960 --> 0:04:36.559 Just take a listen. 0:04:40.279 --> 0:04:44.880 I have repeatedly emphasized that human beings are a community. 0:04:44.480 --> 0:04:45.400 Of shared future. 0:04:46.400 --> 0:04:50.560 We should treat each other's developments as an opportunity rather 0:04:50.640 --> 0:04:54.920 than a challenge. We should see each other as partners 0:04:55.240 --> 0:05:02.640 rather than rivals. Let's so leadarity, unity, cooperation, mutual benefits 0:05:02.880 --> 0:05:07.000 and win win progress become the main theme of the times. 0:05:07.760 --> 0:05:10.279 Locally, Chain and of course Micron and and Vidio have 0:05:10.279 --> 0:05:13.600 been under pressure with rising tensions, for example, between the 0:05:13.720 --> 0:05:16.200 US and China and what that means for some US 0:05:16.400 --> 0:05:20.039 chip makers. Let's dig in to those tensions and indeed 0:05:20.120 --> 0:05:22.840 edtagomic economic growth more broadly with Janet Munit. It's just 0:05:22.880 --> 0:05:26.720 head of market analysis at RBC bruin Dolphin and interestingly. 0:05:26.200 --> 0:05:26.599 You've been. 0:05:27.320 --> 0:05:30.520 I wouldn't say full out positive, but leaning on some 0:05:30.600 --> 0:05:34.119 interest in Chinese names and Chinese economic stimulus that seems 0:05:34.120 --> 0:05:36.880 to be being promised more forcefully. 0:05:37.839 --> 0:05:41.719 Oh hi, Caroline, thanks for having me so. Primarily, our 0:05:42.080 --> 0:05:48.000 strongest conviction is US stocks, particularly because of the US exceptionalism. 0:05:48.120 --> 0:05:50.359 I think this thing is still going to trade into 0:05:50.400 --> 0:05:53.280 the new year, and the fact that US companies are 0:05:53.320 --> 0:05:57.040 just so much more profitable, so we still much creit 0:05:57.040 --> 0:05:59.479 for US stars versus the rest of the world. However, 0:05:59.680 --> 0:06:03.360 for Chinese stocks, I think, you know, sentiment has been 0:06:03.480 --> 0:06:07.400 very depressed. I think, you know, investors are still doubtful 0:06:07.880 --> 0:06:10.640 on the scale of the stimulus and whether it is 0:06:10.680 --> 0:06:13.279 going to work, so it is not that much of 0:06:13.320 --> 0:06:17.320 a consensus trade. I think this trade is having still 0:06:17.360 --> 0:06:19.840 a lot of resistance, and we feel that sentiment has 0:06:19.880 --> 0:06:23.160 been way too negative and you know, evaluations are very cheap. 0:06:23.440 --> 0:06:26.640 There is a case to make that there could be 0:06:26.720 --> 0:06:31.000 more stumulous coming and the fact that economic data is stabilizing, 0:06:31.880 --> 0:06:35.160 so I think there's a case for investors to diversify 0:06:35.200 --> 0:06:37.200 a bit into the Chinese stocks as well. 0:06:37.480 --> 0:06:40.440 Small overweight in Asia extra Pan on the back of that, 0:06:41.000 --> 0:06:45.400 what of therefore, the daily deluge we get on ramping 0:06:45.480 --> 0:06:48.480 up China US tensions. Yesterday it was about in video 0:06:48.520 --> 0:06:52.440 being investigated by Chinese regulators. There's a longgoing narrative around 0:06:52.480 --> 0:06:55.120 Micron as well. How have you been trying to price 0:06:55.200 --> 0:06:55.560 that in? 0:06:57.760 --> 0:06:59.479 Well, I have to say it is very difficult to 0:06:59.520 --> 0:07:03.880 price it. I do believe that institutional investors have somewhat 0:07:04.480 --> 0:07:07.479 been more prepared this time, and you can see that 0:07:07.640 --> 0:07:11.040 in some of the sell off in the trade exposed 0:07:11.080 --> 0:07:15.080 stock for example European x UK stocks for instance. So 0:07:15.160 --> 0:07:17.880 I think industrials I've already been making some adjustments and 0:07:17.960 --> 0:07:20.800 thoughts on the trade tariff issue is very difficult to 0:07:20.880 --> 0:07:23.080 press in, but I guess some of that is already 0:07:23.120 --> 0:07:26.680 reflected in market and overall speaking our views that the 0:07:26.720 --> 0:07:29.160 trade tariff's likely going to be. 0:07:29.080 --> 0:07:31.560 Added for TAT and negotiation tactics. 0:07:32.560 --> 0:07:35.440 Doubtful that the full extent of the threat is going 0:07:35.480 --> 0:07:38.560 to be fully implemented, although it is acknowledged. 0:07:38.080 --> 0:07:40.200 That some of that will be through. 0:07:40.280 --> 0:07:44.480 So keeping out of that, but it's not necessarily a 0:07:44.520 --> 0:07:48.119 deturn to the ongoing rally in the US equity market 0:07:48.160 --> 0:07:48.720 for example. 0:07:49.040 --> 0:07:52.480 Okay, so the likes of an Nvidia that has got 0:07:52.480 --> 0:07:56.960 an enormous valuation continue to rally throughout twenty twenty four? 0:07:57.080 --> 0:07:59.600 Does that continue into twenty twenty five? Come we vindicate 0:07:59.600 --> 0:08:01.200 these value which is the run up that we've seen 0:08:01.240 --> 0:08:03.280 in stocks like an eight percent up on Oracle, an 0:08:03.280 --> 0:08:06.520 eighty percent up on the list of depository notes of TSMC. 0:08:08.360 --> 0:08:10.840 Yeah, using gold out Nvidia there. I'm not going to 0:08:10.880 --> 0:08:13.680 make a specific comment, but this is obviously a great stock, 0:08:13.800 --> 0:08:17.760 huge profit margins, and still very strong guidance of the 0:08:17.800 --> 0:08:22.240 black Well chip architecture. And I think, I mean, this 0:08:22.280 --> 0:08:24.960 is a great company. Obviously investors have is dubbed on 0:08:25.160 --> 0:08:28.320 the high valuation. I think it can the rally can 0:08:28.360 --> 0:08:32.560 still go on given that you know, investors still like 0:08:32.760 --> 0:08:38.319 strong quality growth. So I would feel that investors will 0:08:38.360 --> 0:08:41.760 still be very much leaning on the semiconductor sector and 0:08:41.880 --> 0:08:45.120 then tech in general, life chap in general. In the US, 0:08:45.240 --> 0:08:48.079 I also feel that investors are more shifting and rotating 0:08:48.160 --> 0:08:53.040 into more software related stocks instead of just the semi's hardware. 0:08:53.320 --> 0:08:55.719 I think that makes sense because that there is likely 0:08:55.760 --> 0:09:01.320 to be more commercialization potential and realization as aiimals for it, 0:09:01.360 --> 0:09:05.080 from the infrastructure built out to the influencing and to 0:09:05.160 --> 0:09:06.720 the applications. 0:09:06.760 --> 0:09:08.839 Will have names like Palenta. Coming up in the show 0:09:08.880 --> 0:09:10.559 a little bit later, Januinally, great to. 0:09:10.480 --> 0:09:11.200 Get your expertise. 0:09:11.200 --> 0:09:13.640 Head of market analysis at LBC brun Dolphin, thank you. 0:09:13.920 --> 0:09:14.400 Coming up. 0:09:14.640 --> 0:09:17.480 C three AIS focused on General to AI. Well, the 0:09:17.480 --> 0:09:20.000 products there are helping drive revenue, but at what cost? 0:09:20.400 --> 0:09:23.719 Company CEO Tom Siebel joins us next. Meanwhile, let's just 0:09:23.760 --> 0:09:25.800 check it back in on alphabet, which we'd said had 0:09:25.800 --> 0:09:28.719 been rallying almost four percent, having its best day on 0:09:28.840 --> 0:09:32.160 one point since April twenty twenty four. Here's what Google 0:09:32.240 --> 0:09:35.640 Quantum AI founder Hartman Navin told us yesterday. 0:09:36.280 --> 0:09:38.720 FENM computing, It's definitely not that field. 0:09:38.960 --> 0:09:43.360 There's steady progress, and our new chips if you just 0:09:43.440 --> 0:09:48.120 released a willow, will form the basis to start doing 0:09:48.280 --> 0:10:03.560 useful computations that will enable or solve problems that humankind has. 0:10:05.000 --> 0:10:06.719 Let's get to another set of ownings for you. C 0:10:06.840 --> 0:10:10.160 three AI raising its full year sales forecast. General to AI, 0:10:10.280 --> 0:10:13.199 of course helping drive sales, but almost kind of cautioning 0:10:13.200 --> 0:10:15.440 of the lack of profitability in some areas. Joining us 0:10:15.480 --> 0:10:18.240 for more. C three AI CEO Tom Cebill, Look, your 0:10:18.280 --> 0:10:20.559 shares are down a little bit, but boy, they've ramped 0:10:20.640 --> 0:10:23.400 up sixty percent in less than a month. So a 0:10:23.400 --> 0:10:25.360 lot of optimism going into these numbers. 0:10:25.640 --> 0:10:27.120 What drove you to raise the forecast? 0:10:28.440 --> 0:10:31.360 Well, it was a it was a great quarter. If 0:10:31.520 --> 0:10:33.280 the year to day it has been great. I think 0:10:33.520 --> 0:10:37.000 our revenue growth year over your last quarter was twenty 0:10:37.080 --> 0:10:41.040 nine percent, which is huge. I think most importantly we informed. 0:10:41.320 --> 0:10:46.680 We formed this massive strategic alliance with Microsoft, the largest 0:10:46.720 --> 0:10:50.080 software company in the world, and all of Microsoft, as 0:10:50.080 --> 0:10:54.480 there are salespeople worldwide, will be selling C three AIS 0:10:54.640 --> 0:10:58.800 enterprise AI software solutions, you know, on their price list, 0:10:58.960 --> 0:11:03.440 getting ported credit being compensated, and so we C three 0:11:03.440 --> 0:11:07.239 AI goes from order of one hundred salespeople in September 0:11:07.600 --> 0:11:12.679 to order perhaps tens of thousands of salespeople in November. 0:11:13.240 --> 0:11:18.640 So that is a very strong tailwind that builds extraordinary 0:11:18.760 --> 0:11:20.280 well for C three AI. 0:11:21.080 --> 0:11:26.120 That is this slight worry about the profitability, saying that 0:11:26.160 --> 0:11:30.000 basically revenue, you're prioritizing growth rather than profitability. 0:11:30.040 --> 0:11:30.800 What do you say to that. 0:11:30.679 --> 0:11:33.760 Time In the short term, we're prioritizing growth. You know, 0:11:34.040 --> 0:11:37.559 I have this huge enterprise sales engine in the in 0:11:37.720 --> 0:11:40.880 the form of Microsoft that now we need to enable 0:11:41.200 --> 0:11:44.080 and for really to not invest in that channel to 0:11:44.280 --> 0:11:48.640 get thousands of people productive selling and servicing our product 0:11:48.720 --> 0:11:51.680 and not invest in that is crazy goodness, Caroline. We 0:11:51.720 --> 0:11:54.600 have three quarters of roughly three quarters of a billion 0:11:54.600 --> 0:11:57.079 dollars cash in the bank. And what am I going 0:11:57.080 --> 0:12:00.200 to do with that if not invest in growth, not 0:12:00.320 --> 0:12:03.600 invest in market share, and not invest if not invest 0:12:03.640 --> 0:12:07.480 in market leadership. And I assure you the cash flow 0:12:07.520 --> 0:12:08.920 and profitability follows. 0:12:09.640 --> 0:12:11.840 Okay, So how profitable, for example, would a deal like 0:12:12.000 --> 0:12:16.320 Microsoft the extension there be because you're obviously digging in 0:12:16.360 --> 0:12:19.080 on that partnership. They help distribute your offerings. But how 0:12:19.160 --> 0:12:20.560 much revenue do you have to give up for that? 0:12:23.440 --> 0:12:23.680 You do? 0:12:24.280 --> 0:12:27.520 Actually virtually one hundred percent of the revenue from the 0:12:27.559 --> 0:12:30.000 C three AI sales a cruise to C three AI. 0:12:30.679 --> 0:12:34.600 So it's you know, Microsoft gets the benefit of selling 0:12:34.679 --> 0:12:38.400 their infrastructure and cloud services. C three gets the benefit 0:12:38.400 --> 0:12:43.400 of selling the C three I applications. But uh, you know, 0:12:43.840 --> 0:12:45.400 a very small portion. 0:12:45.160 --> 0:12:46.760 Of the revenue is given up. 0:12:46.800 --> 0:12:50.560 And this is just a dramatic revenue accelerator. This is 0:12:50.880 --> 0:12:53.280 the largest software company in the world and they have 0:12:53.480 --> 0:12:58.319 chosen C three AI as their preferred enterprise AI solutions 0:12:58.360 --> 0:13:02.480 provider Strategic partnerships just don't get bigger than this. 0:13:03.080 --> 0:13:06.160 They don't and Sertny Piper and the analysts over there 0:13:06.200 --> 0:13:10.320 saying this potentially drives material upside. There are though, and 0:13:10.360 --> 0:13:11.720 I hate to keep going back to some of the 0:13:11.840 --> 0:13:14.720 flies in the ointment, but Key Bank just worrying about 0:13:14.720 --> 0:13:18.080 the differentiation here, Tom of your AI offering. How do 0:13:18.200 --> 0:13:22.080 you make clear your USP versus rivals out there? 0:13:22.960 --> 0:13:26.160 There is one company on the planet Earth, Carolion, that 0:13:26.240 --> 0:13:31.800 offers over one hundred turnkey enterprise AI applications for utilities, 0:13:31.840 --> 0:13:36.120 for oil and gas, for defense, for intelligence, for pharmaceutical 0:13:36.400 --> 0:13:40.280 Fortalit one company on the planet Earth, Okay that offers 0:13:40.720 --> 0:13:44.000 these kinds of solutions, and that is our differentiation. 0:13:44.080 --> 0:13:45.320 And federal strength. 0:13:45.360 --> 0:13:48.800 You enlisted a lot there within defense and with ultimately 0:13:48.840 --> 0:13:51.320 you've got a government focus in many ways that has 0:13:51.320 --> 0:13:53.800 seen a lot of selling it to federal Will that 0:13:53.800 --> 0:13:56.880 continue any issues about the administration coming on in twenty 0:13:56.960 --> 0:13:57.960 twenty five under Trump? 0:13:59.080 --> 0:14:02.360 There are our business in the defense intelligence in federal 0:14:02.400 --> 0:14:06.000 community has been very strong. I expect that to accelerate 0:14:06.679 --> 0:14:10.679 in the Trump administration with people like elon getting involved. 0:14:11.040 --> 0:14:14.240 I think their priorities if we listen to their conferences 0:14:14.520 --> 0:14:16.800 and we go to, for example, the Reagan Defense Forum 0:14:17.120 --> 0:14:19.800 that took place last week, there is one topic on 0:14:19.840 --> 0:14:25.080 the agenda, and that is AI applications, AI applications, AI applications, 0:14:25.240 --> 0:14:28.200 and then they also talk about cyber But this is 0:14:28.760 --> 0:14:32.720 clearly going to be a huge priority for making government 0:14:32.720 --> 0:14:37.880 more efficient okay making, and it is the future of 0:14:37.920 --> 0:14:42.400 our defense and intelligence community. So this votes extraordinarily well 0:14:42.480 --> 0:14:46.680 for the commercial software providers like C three AI, and 0:14:46.800 --> 0:14:50.920 perhaps votes less well for the traditional kind of beltway 0:14:51.000 --> 0:14:54.520 systems integrators. I think that the tide might be going 0:14:54.560 --> 0:14:55.440 out for those guys. 0:14:55.920 --> 0:14:59.680 Tom Siebel ultimistic on CVAI. Of course, the CEO thanks 0:14:59.680 --> 0:15:02.880 for joining yesterday. Let's stick with earnings and let's just 0:15:02.960 --> 0:15:05.560 check out what's happening with Oracle, because it has been 0:15:05.600 --> 0:15:07.640 on a tear of late, up eighty percent in terms 0:15:07.680 --> 0:15:11.360 of share price this year, and therefore its optimism didn't 0:15:11.400 --> 0:15:13.720 live up to well. The height was there, but the 0:15:13.800 --> 0:15:16.680 numbers didn't quite meet that height. We're down seven percent 0:15:16.800 --> 0:15:19.000 after we saw nine percent increase in revenue. There was 0:15:19.080 --> 0:15:22.600 strong cloud infrastructure growth though Anna rag Grana breaks it 0:15:22.640 --> 0:15:25.280 down from Blomberg Intelligence. It just wasn't enough, was it. 0:15:26.240 --> 0:15:28.760 See they did beat on constant currency, So in the 0:15:28.840 --> 0:15:31.440 reported there were slightly you know, slightly below, but that 0:15:31.600 --> 0:15:34.040 was effics oriented. But at the same time, you know, 0:15:34.120 --> 0:15:36.960 I think, as you mentioned, the expectations are really getting 0:15:37.040 --> 0:15:39.360 high for some of these names, that the beat has 0:15:39.400 --> 0:15:44.160 to be of a material enough, you know, rage we 0:15:44.160 --> 0:15:46.320 think the demand is still there. It's a question is 0:15:46.360 --> 0:15:49.000 whether the second half growth rate is going to be 0:15:49.240 --> 0:15:50.600 in the high fifties. 0:15:50.240 --> 0:15:51.120 Or the low fifties. 0:15:51.680 --> 0:15:53.680 But still that's a pretty impressive number. 0:15:54.280 --> 0:15:54.880 All said and. 0:15:54.840 --> 0:15:57.920 Done, That fifty percent is a fifty two percent increasing 0:15:57.920 --> 0:16:00.240 cloud infrastructure sales that you sort of reference. 0:16:00.240 --> 0:16:01.600 What about the rest of the business. 0:16:01.640 --> 0:16:04.560 How is just cloud continuing to perform for them? 0:16:04.600 --> 0:16:05.920 How is software sales going? 0:16:06.920 --> 0:16:09.640 Yeah, see, when you look at Oracle, before the Oracle 0:16:09.680 --> 0:16:14.080 cloud infrastructure really push happened, this company was growing in 0:16:14.120 --> 0:16:16.800 that four five six percent range. So when you look 0:16:16.800 --> 0:16:20.040 at their SaaS business, so the cloud applications business that 0:16:20.120 --> 0:16:22.720 grew about ten percent, which is generally in line with 0:16:22.800 --> 0:16:26.320 what's happening with salesforce and workday workday slightly better than 0:16:26.320 --> 0:16:29.920 that but that space has been under pressure over the 0:16:29.960 --> 0:16:34.280 last twelve months. The real area of growth is cloud 0:16:34.400 --> 0:16:38.280 infrastructure or because of AI workloads, and that's where bulk 0:16:38.320 --> 0:16:39.720 of the interest lies at this point. 0:16:40.040 --> 0:16:43.480 Any mentioned around TikTok because they're a key client. 0:16:44.520 --> 0:16:48.400 Yeah no, that wasn't really discussed, you know, on the call, 0:16:48.480 --> 0:16:52.120 But we think if there is an impact next year. 0:16:53.440 --> 0:16:55.160 First of all, that's not going to be immediate. It's 0:16:55.160 --> 0:16:57.760 going to take some time. But because of the backlock 0:16:57.840 --> 0:16:59.800 that they have, they should be able to offset that 0:16:59.840 --> 0:17:02.520 for with that, you know, maybe a quarter or two 0:17:02.520 --> 0:17:05.680 of some dent there, but you know, overall, we think 0:17:05.680 --> 0:17:07.040 the backlog is there for that. 0:17:07.760 --> 0:17:11.800 And they mentioned new clients Meta in particular and increasing 0:17:12.480 --> 0:17:15.600 focus on that particular area. Anyone else that we were 0:17:15.600 --> 0:17:17.800 impressed by that they managed to snag that they're managing 0:17:17.840 --> 0:17:19.480 to woo in with the fact that it is a 0:17:19.560 --> 0:17:23.440 key offering now in cloud, whereas we've doubted it previously. 0:17:24.359 --> 0:17:24.560 Yeah. 0:17:24.600 --> 0:17:26.360 So one of the things I would say is almost 0:17:26.400 --> 0:17:29.240 all major clients out there, you know, whether that's Meta 0:17:29.560 --> 0:17:32.800 or any other vendor, is going to go out and 0:17:32.880 --> 0:17:35.679 try to tap into all cloud providers. I mean, unless 0:17:35.680 --> 0:17:40.240 they have some adversisdial relationship just because there is there 0:17:40.280 --> 0:17:43.760 isn't that much of capacity out there. In Oracle's case, 0:17:43.920 --> 0:17:47.160 it's actually getting work from Microsoft right now because Microsoft 0:17:47.200 --> 0:17:50.240 is fulfilling the needs or the workloads that are coming 0:17:50.280 --> 0:17:53.320 from open Ai and it's subleasing to Oracle to get 0:17:53.320 --> 0:17:55.280 some of that work done. So there is you know, 0:17:55.359 --> 0:17:58.480 the entire space is going up. It's not just one 0:17:58.560 --> 0:17:59.240 or two vendors. 0:18:00.280 --> 0:18:02.720 Anna Agrana on all things Oracle. We thank you of 0:18:02.840 --> 0:18:13.520 newberga intelligence time now for talking out tech first up. 0:18:13.560 --> 0:18:16.879 A door Dash funded study in Pennsylvania found that most 0:18:16.880 --> 0:18:19.959 of its gig workers preferred to remain independent contractors. This 0:18:20.040 --> 0:18:23.200 after the company began offering extra payments instead of benefits 0:18:23.400 --> 0:18:27.960 normally reserved for salaried employees. Class TikTok Shop comes to 0:18:28.040 --> 0:18:30.960 Europe after the in app shopping feature went live for 0:18:31.080 --> 0:18:33.720 users in Spain. The roll out reflects TikTok's push to 0:18:33.760 --> 0:18:36.840 seek out alternative markets in the face of potential US 0:18:36.880 --> 0:18:40.480 shutout and the shares of food delivery firm and Talabat. 0:18:40.280 --> 0:18:43.960 It lost ground after a two billion dollar IPO in Dubai, 0:18:44.080 --> 0:18:47.280 the girl's biggest initial public offering this year. This adds 0:18:47.320 --> 0:18:51.199 to a slate of recent disappointing debuts of listings in 0:18:51.240 --> 0:18:51.879 the Middle East. 0:18:52.600 --> 0:18:55.000 Now, let's just talk geopolitics a little bit more. 0:18:54.880 --> 0:18:59.280 Now, because despite US and ally sanctions following Russia's invasion 0:18:59.280 --> 0:19:03.560 of Ukraine, Moscow has continued its ability to procure American tech, 0:19:03.760 --> 0:19:08.320 including chips from Intel analog Devices Ti Bloomberg reporting that 0:19:08.440 --> 0:19:11.160 it's discovered that the supply chain path which Russia has 0:19:11.160 --> 0:19:14.440 been able to secure those components, unknownst to the companies 0:19:14.480 --> 0:19:18.679 making it has been pretty easy for Morelos Alberta Nadelli joins. 0:19:18.440 --> 0:19:20.240 US and now it's an extraordinary deep dive. 0:19:20.520 --> 0:19:23.560 Nolberto, just how easy is it to order these sorts 0:19:23.600 --> 0:19:27.520 of pieces of equipment from Russia right now? 0:19:27.960 --> 0:19:31.160 It's relatively simple if you think about the fact that 0:19:31.240 --> 0:19:33.840 you know, it's been a few years now that the 0:19:33.920 --> 0:19:36.879 war has been ongoing in Ukraine and the effort that 0:19:37.000 --> 0:19:40.800 governments have put on to crack down on these practices. 0:19:42.080 --> 0:19:47.040 There are websites within Russia where companies that are working 0:19:47.080 --> 0:19:49.720 to produce missiles and other weapons. 0:19:50.080 --> 0:19:51.240 They can see. 0:19:50.920 --> 0:19:56.720 The catalogs of companies like Texas Instruments on their own 0:19:56.840 --> 0:20:01.159 websites or stocks available prices and details like that, and 0:20:01.200 --> 0:20:05.800 then they're able to place order requests with Russian distributors, 0:20:05.840 --> 0:20:09.600 and then the goods are ordered by intermediaries, they get 0:20:09.640 --> 0:20:13.440 sent to third countries, other countries, and from there they 0:20:13.440 --> 0:20:17.280 get to Russia. So overall, that's pretty simple, given the 0:20:17.320 --> 0:20:19.439 fact that the war has been going on for years now. 0:20:19.840 --> 0:20:22.120 Precisely, and the US government has time and time again 0:20:22.240 --> 0:20:24.640 been warning these sorts of suppliers to crack. 0:20:24.480 --> 0:20:24.879 Down on this. 0:20:25.000 --> 0:20:27.679 In fact, Shannon Thompson, the company's assistant general counsel that's 0:20:27.720 --> 0:20:30.560 or Texas Instruments, said, I want to be very clear, 0:20:30.680 --> 0:20:34.119 TI strongly opposes the use of our chips in Russian 0:20:34.119 --> 0:20:35.040 military equipment. 0:20:35.359 --> 0:20:36.520 How are they able to stop this? 0:20:38.280 --> 0:20:41.119 Well, that's a very good question from your questions for 0:20:41.280 --> 0:20:46.280 the companies more than for me. I think companies are 0:20:46.359 --> 0:20:53.120 trying to stop these practices from happening, and when issues 0:20:53.160 --> 0:20:56.960 are flagged, they do intervene. There was, however, for example, 0:20:57.000 --> 0:21:00.600 earlier this year, a Senate report that came out that 0:21:00.720 --> 0:21:02.320 suggested that companies. 0:21:01.880 --> 0:21:04.200 Aren't doing enough. So they are. 0:21:05.640 --> 0:21:10.000 Doing certain practices that would allow them to probably better 0:21:10.119 --> 0:21:13.920 detect these types of transactions before they actually happen. 0:21:14.000 --> 0:21:16.440 So lots of the actions. 0:21:15.960 --> 0:21:20.840 Happen later on in the sales process rather than early 0:21:20.920 --> 0:21:23.800 on trying to identify bad actors and things like that. 0:21:24.160 --> 0:21:26.919 I'm Berta Nadelli. Extraordinary peace, Thank you for talking us 0:21:26.960 --> 0:21:30.040 through it. Welcome back to BLUEBG Technology. I'm Karen Hyde 0:21:30.040 --> 0:21:31.760 in New York. If we want to welcome our TV 0:21:31.840 --> 0:21:35.639 and radio audiences worldwide now to bloom Meg Technology. Because 0:21:35.640 --> 0:21:38.000 Omnicom has announced that they'll be buying into Public Group 0:21:38.119 --> 0:21:40.679 in a move that will create the world's largest advertising 0:21:40.720 --> 0:21:43.760 company with an annual revenue more than twenty five billion dollars. 0:21:43.800 --> 0:21:46.880 Here to discuss in an exclusive interview, John Wren, Omnicon 0:21:47.040 --> 0:21:49.960 CEO and Philip Klekowski into Public Group CEO. 0:21:50.080 --> 0:21:54.080 Gentlemen, Welcome, Thank you, erl, Thank you John. I'm sat 0:21:54.119 --> 0:21:54.440 here on. 0:21:54.400 --> 0:21:58.359 The Technology Show thinking about the technological disruption that has 0:21:58.359 --> 0:22:01.080 happened to advertising. Is this response to that, is this 0:22:01.359 --> 0:22:03.600 to take on alphabet meta and call that more of 0:22:03.640 --> 0:22:04.760 that global revenue? 0:22:05.680 --> 0:22:08.600 Well, it is. Technology does play a role in this, 0:22:08.880 --> 0:22:12.399 and both Philip and I have focused on that in 0:22:12.440 --> 0:22:16.640 our conversations over the course of the last year. When 0:22:17.960 --> 0:22:20.480 you cut through quite a bit of what we're discussing 0:22:23.320 --> 0:22:26.239 if you look at our industry five years ago, ten 0:22:26.320 --> 0:22:31.840 years ago, the barrier to entry was very low. It 0:22:31.880 --> 0:22:34.200 was you just had to be a brilliant person right 0:22:34.320 --> 0:22:39.640 with the great with a great idea. Now, in order 0:22:39.640 --> 0:22:44.280 to properly service clients in this new era, it's key 0:22:44.400 --> 0:22:47.879 to have those very very bright, very talented people, but 0:22:48.760 --> 0:22:51.680 it's incumbent upon us to enable them with the best 0:22:52.359 --> 0:22:56.320 tech in data that we possibly can for them to 0:22:56.359 --> 0:23:00.800 garner the insights the information at scale so they can 0:23:00.840 --> 0:23:05.280 react to the environment as they need. And we've each 0:23:05.359 --> 0:23:07.320 been on that journey, I guess, as all of our 0:23:07.359 --> 0:23:11.160 competitors have as well. From an Omnium point of view, 0:23:11.760 --> 0:23:15.760 we made great strides with the creation of omni and 0:23:16.840 --> 0:23:20.200 earlier in the year when we acquired Flywheel the commerce 0:23:20.200 --> 0:23:22.680 stature that we've been able to put together, and that 0:23:22.920 --> 0:23:27.960 progresses and today we're working even beading all the generative 0:23:27.960 --> 0:23:33.199 AI possibilities to create tools for our folks. Philip on 0:23:33.240 --> 0:23:35.720 the other side, can talk to it as well, because 0:23:35.840 --> 0:23:38.560 he's had a very strong avenge. Sure. 0:23:38.600 --> 0:23:41.639 I mean, I think to John's point, technology is playing 0:23:41.800 --> 0:23:44.399 so much more important a role in our sector, and 0:23:44.440 --> 0:23:47.879 that's because for our clients, the consumers they need to 0:23:47.920 --> 0:23:51.680 reach expect a high degree of personalization and the messaging 0:23:51.720 --> 0:23:54.119 they get, and a high degree of engagement in the 0:23:54.160 --> 0:23:58.760 experiences we deliver. So to John's point, he brought Flywheel 0:23:58.840 --> 0:24:02.439 into the family. It's a company that has this quite 0:24:02.480 --> 0:24:06.520 distinctive ability to understand everything that's happening in the digital 0:24:06.600 --> 0:24:10.960 retail ecosystem down to the individual transaction level. And then 0:24:11.000 --> 0:24:15.800 for US, Axiom, as John said, is likely the largest 0:24:15.840 --> 0:24:17.280 consumer database. 0:24:16.880 --> 0:24:18.160 Outside of the walled gardens. 0:24:18.600 --> 0:24:20.560 So if you put those two together, and if we 0:24:20.600 --> 0:24:24.880 co invest in General of AI, we're very very strongly positioned, 0:24:24.920 --> 0:24:29.520 we believe to help our clients navigate this tech enabled world. 0:24:29.680 --> 0:24:31.080 How does it strip out costs? 0:24:31.119 --> 0:24:34.200 You clearly identified opportunities for seven hundred and fifty million 0:24:34.240 --> 0:24:37.280 dollars in annual cost savings, But the talent when it 0:24:37.280 --> 0:24:39.879 comes to General to AI's expenses is how do you 0:24:39.920 --> 0:24:40.959 strip out those costs? 0:24:41.440 --> 0:24:44.560 Well, I think John's been really clear and I think 0:24:44.880 --> 0:24:48.560 we are fully in agreement a year in that it's 0:24:48.640 --> 0:24:51.840 about enabling the folks who interact with the clients, so 0:24:51.920 --> 0:24:53.200 those brilliant people. 0:24:52.920 --> 0:24:56.040 Giving them more tools. There are ways in. 0:24:56.040 --> 0:25:00.040 Which We're not going to invest more than once. We 0:25:00.080 --> 0:25:03.440 are going to look at infrastructure that is perhaps legacy 0:25:03.440 --> 0:25:07.200 infrastructure in businesses like ours, So there is a meaningful 0:25:07.240 --> 0:25:10.760 opportunity there to put the money against the future. 0:25:11.160 --> 0:25:14.960 John, some of the concern maybe being priced in at 0:25:14.960 --> 0:25:18.440 the moment because as combined market capitalizations, they're now lower 0:25:18.480 --> 0:25:19.600 than they were on Friday. 0:25:19.800 --> 0:25:21.879 People trying to digest how this deal works. 0:25:22.119 --> 0:25:27.320 City Bernstein's saying the potential for revenue disynergy, rival agencies, 0:25:27.320 --> 0:25:28.440 stealing accounts, talent. 0:25:28.560 --> 0:25:30.520 How do you make sure that people stay on board 0:25:30.520 --> 0:25:30.720 with you? 0:25:31.000 --> 0:25:36.360 Sure, We've always always been the place for the best 0:25:36.359 --> 0:25:43.920 talented people to come to. Naturally, there's churn in everybody's 0:25:43.960 --> 0:25:48.320 business every year, fortunately or unfortunately. I've been through this 0:25:48.400 --> 0:25:51.080 movie once before, but did it badly and didn't complete 0:25:51.119 --> 0:25:53.600 it ten years ago. This one is a bit more 0:25:53.640 --> 0:25:54.840 thought a lot more thoughtful. 0:25:55.880 --> 0:25:58.520 You're referring to the public steal back at twenty fourteen. 0:26:00.359 --> 0:26:04.359 Clients who listen to us and see the capabilities that 0:26:04.400 --> 0:26:08.120 we've developed between us already, the power of what we're 0:26:08.160 --> 0:26:12.159 going to be able to continually bring to the marketplace, 0:26:13.240 --> 0:26:17.439 the changes and the focus and the single point of 0:26:17.600 --> 0:26:20.199 entry and investment that we're going to make to enable 0:26:20.840 --> 0:26:26.440 that talent to succeed. I'm not nearly as concerned as 0:26:26.440 --> 0:26:29.240 the nay sayers are looking for somebody to knock on 0:26:29.320 --> 0:26:32.119 the deal that we may be challenged by the odd 0:26:32.119 --> 0:26:35.439 clients or two. I suspect not, because I think the 0:26:35.440 --> 0:26:38.159 offerings that we have and the response to those clients 0:26:38.720 --> 0:26:41.040 is at the core of what we've been discussing for 0:26:41.080 --> 0:26:44.720 the last year, and that's been first and foremost. So 0:26:44.800 --> 0:26:46.399 we've been focused on what is this going to mean 0:26:46.440 --> 0:26:48.520 for our clients, What is this going to mean for 0:26:48.560 --> 0:26:50.600 our talent? What is it going to mean for us 0:26:50.640 --> 0:26:55.720 attracting talent going forward and enabling those people and most 0:26:55.840 --> 0:26:58.679 very talented people want to work with and for the 0:26:58.760 --> 0:27:02.399 very best and brightest and have available to them the 0:27:02.440 --> 0:27:04.440 most state of the art tools, and that's what we'll 0:27:04.480 --> 0:27:08.240 be provided. And progress is every day. I mean, I 0:27:08.240 --> 0:27:13.159 haven't even focused in on what the advances that are 0:27:13.400 --> 0:27:15.480 very familiar with sorrow about what was going on this 0:27:15.560 --> 0:27:20.520 morning open and that has a positive impact used as 0:27:20.560 --> 0:27:25.320 a tool made available to our knowledge workers and so 0:27:26.040 --> 0:27:29.960 others will try. Someone will succeed, but we'll wind up 0:27:29.960 --> 0:27:31.240 at the end of the day, with the very best 0:27:31.280 --> 0:27:33.520 talent in the industry. I think, as we always have. 0:27:33.760 --> 0:27:36.480 And Phillip, that talent wants to be enabled with the 0:27:36.560 --> 0:27:39.920 latest and greatest tools. John was though, talking about how 0:27:39.920 --> 0:27:42.080 the barriers for entry were very low and now they've 0:27:42.080 --> 0:27:45.040 got higher, but general to AI makes the barrier to 0:27:45.200 --> 0:27:48.800 entry for new upstarts incredibly low, do you not believe. 0:27:48.840 --> 0:27:51.720 I'm not sure that I would agree with them, because ultimately, 0:27:51.800 --> 0:27:54.880 what you have to have is connectivity to a very 0:27:55.000 --> 0:27:57.919 very broad range of capabilities. And so I think that 0:27:58.440 --> 0:28:00.880 if you're thinking about it in a very reductive sense 0:28:00.880 --> 0:28:04.199 and you're saying, well, anybody can create a piece of content, sure, 0:28:04.680 --> 0:28:07.520 but the reality is that unless that content is connected 0:28:07.520 --> 0:28:10.679 to a very sophisticated platform with a great deal of 0:28:10.720 --> 0:28:14.960 technology and a lot of data, then fundamentally it's not 0:28:15.000 --> 0:28:19.280 really very useful to the clients who need accountability, need outcomes, 0:28:19.440 --> 0:28:21.240 and are very sophisticated themselves. 0:28:22.280 --> 0:28:25.440 We are, of course, speaking with Philip Krakowski of Interpublic 0:28:25.440 --> 0:28:28.880 Group and John Wren of Omnikrom and John going back 0:28:28.920 --> 0:28:31.119 to ultimately this pie that at the moment is being 0:28:31.200 --> 0:28:34.680 redistributed among new players. It's not just meta and alphabet 0:28:35.080 --> 0:28:38.240 I mean byte dancers in their taking space Amazon as well. 0:28:38.320 --> 0:28:41.720 Do you think ultimately the agencies that four that become 0:28:41.840 --> 0:28:45.120 three will own as much as the one trillion of 0:28:45.160 --> 0:28:47.280 the market that it does it today or will that 0:28:47.320 --> 0:28:49.600 continue to erode? 0:28:49.920 --> 0:28:53.080 Well, many of these players have been competitives of ours 0:28:53.120 --> 0:28:55.840 now for quite a while. I mean, so it's not new. 0:28:57.560 --> 0:28:59.840 Some of the tools, some of the capabilities that are 0:28:59.800 --> 0:29:05.640 being created today, on one hand, would be very welcome 0:29:05.680 --> 0:29:10.800 and usable by smaller marketers, but larger marketers I refer 0:29:10.920 --> 0:29:15.040 to Felipa's talented mentioning a minute ago, are going to 0:29:15.080 --> 0:29:17.400 have to be a bit. You have to bring brand 0:29:17.440 --> 0:29:20.440 safety into considerations as you do this. You have to 0:29:20.480 --> 0:29:23.480 bring in considerations do you have the right to use 0:29:23.520 --> 0:29:27.080 your image and your voice my next commercial, even though 0:29:27.160 --> 0:29:29.560 it might be a perfect setting for what I'm trying 0:29:29.560 --> 0:29:33.000 to accomplish. So there are a lot of considerations. Europe 0:29:33.120 --> 0:29:35.080 is different than the US, Chinese is going to be 0:29:35.080 --> 0:29:39.280 different than everybody else, So that competitive set has always 0:29:39.760 --> 0:29:43.480 been out there. We with the resources that we have 0:29:43.920 --> 0:29:47.760 defending ourselves in this environment have been very successful and 0:29:47.760 --> 0:29:50.320 we will continue to be successful, will be more successful 0:29:50.360 --> 0:29:53.040 now this will be more focused and we will have 0:29:54.120 --> 0:29:57.280 more resources to respond to things that change. 0:29:57.560 --> 0:30:00.239 Things that change are like a new administration Phllip And 0:30:00.280 --> 0:30:02.600 everyone's been saying, what about the regulatory outlook? I mean, 0:30:02.640 --> 0:30:05.680 if you are it's global jurisdictions here, how confident are 0:30:05.720 --> 0:30:07.080 you that this deal actually gets through? 0:30:07.440 --> 0:30:07.600 Well? 0:30:07.640 --> 0:30:10.720 To John's point, it's been a long time in the making. 0:30:10.800 --> 0:30:14.440 We've been very deliberate, So you can assume that you know, 0:30:14.600 --> 0:30:17.200 we took advice as we were heading into this because 0:30:17.200 --> 0:30:18.760 to your point, we're going to be looking at a 0:30:18.800 --> 0:30:23.080 dozen or more jurisdictions in which this will need to 0:30:23.440 --> 0:30:26.840 clear that hurdle, and we have a high degree of 0:30:26.880 --> 0:30:29.280 confidence that that's something that we can achieve. 0:30:29.560 --> 0:30:32.120 Do you have a high degree of confidence judged in 0:30:32.160 --> 0:30:35.360 your client in the macro perspective that they currently have. 0:30:35.600 --> 0:30:37.920 How willing are people to commit to big campaigns in 0:30:37.960 --> 0:30:41.480 this macro environment as we do have so much geopolitical uncertainty. 0:30:41.560 --> 0:30:46.080 Sure, clients still wake up in the morning. They're running 0:30:46.080 --> 0:30:48.280 their businesses, and they're running their factories and have to 0:30:48.280 --> 0:30:53.840 sell their products. Maybe the nature of what they're advertising 0:30:53.960 --> 0:30:56.800 or the channel in which they're trying to reach their 0:30:56.920 --> 0:31:00.640 customer change, but that's what we're best at and the 0:31:00.720 --> 0:31:04.840 velocity of that change, and people will do different things 0:31:04.880 --> 0:31:07.880 to respond to the market approach differently. I think the 0:31:08.000 --> 0:31:11.120 change the administration is probably a positive thing. I suspect 0:31:11.160 --> 0:31:14.080 the new administration is going to be more business friendly 0:31:14.560 --> 0:31:21.440 than anyone's complained about the existing administration. So I'm not 0:31:21.840 --> 0:31:24.480 anticipating and we've been well advised, but we have to 0:31:24.520 --> 0:31:27.800 go through the process. But there are a lot of 0:31:27.800 --> 0:31:30.920 competitors out there, so that won't be an issue in 0:31:30.960 --> 0:31:35.960 the final days. Now, the whole focus is on the 0:31:36.000 --> 0:31:40.600 flexibility and the agility. Even though people who want to 0:31:40.680 --> 0:31:43.480 tend to look at size and look at the negative 0:31:43.480 --> 0:31:47.840 aspects of size, we see sizes empowering because it will 0:31:47.880 --> 0:31:52.040 give us more resource. And what's key is to keep 0:31:52.040 --> 0:31:58.040 the agility and lead creativity to the talented people that 0:31:58.240 --> 0:32:01.479 we both have in our employee and responsible for us 0:32:01.480 --> 0:32:04.680 both being here today, but enabling them with the best tools, 0:32:05.040 --> 0:32:08.400 cutting edge so they can go into the largest advertisers 0:32:08.400 --> 0:32:11.720 in the world and with great confidence tell them that 0:32:12.800 --> 0:32:17.080 it's always changing. Nothing yesterday doesn't exist anymore. It's what's tomorrow. 0:32:17.440 --> 0:32:19.560 But where the place to come. 0:32:19.440 --> 0:32:23.280 To Thanks for coming to us today, John Man of Omnicom. 0:32:23.560 --> 0:32:27.480 I thank Philip Berkowski of Into Public Group. We appreciate it. Meanwhile, 0:32:28.000 --> 0:32:30.880 of course today Blue Meg Television is having live coverage 0:32:30.880 --> 0:32:33.479 of an inaugural women Money and Power event. It's convening 0:32:33.520 --> 0:32:37.200 influential women voice says in finance to discuss. 0:32:36.920 --> 0:32:37.800 The future of business. 0:32:38.040 --> 0:32:39.640 Look, they've got to talk AI, they've got to talk 0:32:39.640 --> 0:32:41.120 fintech in global finance. 0:32:41.160 --> 0:32:43.400 Just take a listen to what the panel is happening underway. 0:32:44.440 --> 0:32:45.040 Then when you. 0:32:45.040 --> 0:32:50.640 Come to a data dwiffen selection of customers, and this 0:32:50.760 --> 0:32:53.000 is something that is no border, we love for it 0:32:53.120 --> 0:32:56.760 for all the insights that we can provide information about 0:32:56.800 --> 0:33:00.520 the market that you know buyers and sell it from 0:33:00.560 --> 0:33:03.320 different regions in the country, can be can can benefit 0:33:03.400 --> 0:33:03.640 from it. 0:33:03.640 --> 0:33:04.440 All of you have talked. 0:33:04.320 --> 0:33:06.840 About this idea of kind of assessing risks and as 0:33:06.880 --> 0:33:09.080 we were walking on stage, I heard, you know, folks 0:33:09.120 --> 0:33:11.720 from deep Miving, we worry about everything the existential crisis 0:33:11.720 --> 0:33:15.160 of AI. Whose values are encoded in these things, whether 0:33:15.200 --> 0:33:17.479 it's like misinformation at scale or whatever that might be. 0:33:18.120 --> 0:33:18.600 What are the. 0:33:18.720 --> 0:33:21.160 Risks of the scenarios that you all are describing, What 0:33:21.200 --> 0:33:23.480 are the risks of having your AI look at a 0:33:23.520 --> 0:33:25.000 contract and be like, seems good. 0:33:28.240 --> 0:33:34.280 What there are great risk but can something what And 0:33:34.320 --> 0:33:36.080 it's kind of not not that me say. They've been 0:33:36.080 --> 0:33:39.240 discussed a lot about, right I think for me think 0:33:39.560 --> 0:33:40.680 I keep thinking system. 0:33:40.680 --> 0:33:42.720 There is an effect which apparently. 0:33:42.320 --> 0:33:47.360 Now is uncontroversial, which is in fears from now twenty 0:33:47.480 --> 0:33:52.719 fifty AI will be the most intelligent being on on 0:33:52.720 --> 0:33:56.440 on the planet. It's no doubt mosk of at nights yeah, yeah, 0:33:56.600 --> 0:33:59.920 but by a factor of there's not even ten. Right, 0:34:00.280 --> 0:34:03.000 So when you think about that, this is the first 0:34:03.040 --> 0:34:05.640 time in ISS that's ever happened. All of a sudden 0:34:05.720 --> 0:34:08.480 can be very scary, right, So in the risk associdity 0:34:08.600 --> 0:34:10.920 there are a lot because all of a sudden we 0:34:10.920 --> 0:34:13.239 can lose control all of a sudden in the in 0:34:13.320 --> 0:34:16.520 the short term even we can delegate too much and 0:34:16.600 --> 0:34:19.040 know and lose a sense of reality. 0:34:19.080 --> 0:34:20.080 What's real? What's real? 0:34:20.120 --> 0:34:21.920 And the contra is the contral done well or not? 0:34:22.239 --> 0:34:24.840 But if you project in the in the long term, 0:34:25.239 --> 0:34:26.920 it could be even bigger risks in that, right, So 0:34:27.120 --> 0:34:30.319 it's about losing control. And so how do we put 0:34:30.400 --> 0:34:34.000 some boundaries, How can we still make sure, we're control, 0:34:34.040 --> 0:34:35.400 we're in charge, and I think. 0:34:36.680 --> 0:34:38.440 I don't think there's a solution yet. 0:34:39.360 --> 0:34:41.200 But there are probably two ways and needs to be 0:34:41.200 --> 0:34:44.120 explored in parallel. So one is the usual way of 0:34:44.640 --> 0:34:48.279 controls and boundaries. So now for example, which is you know, 0:34:48.360 --> 0:34:52.080 quality ssurance, limitation of the level of delegation. For example, 0:34:52.120 --> 0:34:54.920 if we now use AI for a contract, cause somebody 0:34:54.960 --> 0:34:56.279 should review it, and of course it. 0:34:56.280 --> 0:34:59.520 Should uman be a human should review A human should review. 0:34:59.320 --> 0:35:01.000 It right in the short and maybe we get to 0:35:01.000 --> 0:35:03.760 a point where we'll have another reviewing it. It's already happening, 0:35:03.800 --> 0:35:06.720 you know, on applications, but that needs to happen. 0:35:06.880 --> 0:35:08.279 And the other side is. 0:35:09.680 --> 0:35:12.960 And we'll be more and more is heataches because as 0:35:12.960 --> 0:35:15.680 sort of boy, you know, as the model gets very advanced, 0:35:15.680 --> 0:35:18.080 you need to ingrain the rules so behavior in the 0:35:18.120 --> 0:35:20.239 model itself. And that's why I think there's a lot 0:35:20.280 --> 0:35:23.439 of not all the discussion, but starting now about how 0:35:23.480 --> 0:35:24.360 can you make it happen? 0:35:24.440 --> 0:35:27.640 Right, I think that's the main risk. 0:35:27.840 --> 0:35:32.719 How do you maintain control without leveraging the power AI? 0:35:32.920 --> 0:35:35.600 And it will fascinating in the next few years to 0:35:35.680 --> 0:35:37.520 see what kind of solutions come in place. 0:35:37.640 --> 0:35:40.960 I'm putting in terms of the deployment of you know, 0:35:41.400 --> 0:35:45.560 digital solutions, in terms of people using their phones. 0:35:45.200 --> 0:35:47.640 For all these things. One of the. 0:35:47.280 --> 0:35:50.120 Realities I'm thinking about the Apple context. You know, to 0:35:50.360 --> 0:35:52.800 use AI on an iPhone, you have to have the 0:35:52.920 --> 0:35:56.400 very latest, most expensive version of what is already a 0:35:56.520 --> 0:35:59.000 very expensive smartphone. All of you kind of operating in 0:35:59.000 --> 0:36:01.480 context where not all of your customers might have the 0:36:01.560 --> 0:36:05.480 very latest, most expensive versions of things. How are you including, 0:36:05.960 --> 0:36:08.080 you know, the hundreds of millions of people who don't 0:36:08.080 --> 0:36:10.320 have access to spend twelve hundred dollars on a device 0:36:10.719 --> 0:36:12.919 to take advantage of some of the technology that we're 0:36:12.960 --> 0:36:13.600 talking about. 0:36:13.680 --> 0:36:17.520 I think it's very dependent on the community that you're 0:36:17.520 --> 0:36:20.960 operating in and what we found. I think certainly when 0:36:20.960 --> 0:36:24.799 you look at the African continent with products such as Empesa, 0:36:25.360 --> 0:36:30.239 which is a product that provides access to financial services 0:36:30.920 --> 0:36:36.359 to people on the African continent, it works on the 0:36:36.400 --> 0:36:39.960 most basic of mobile phones, and so anybody through the 0:36:40.080 --> 0:36:42.640 use of mobile telephony can be able to you know, 0:36:42.680 --> 0:36:46.600 transfer capital or whatever the case is. And in that case, 0:36:46.640 --> 0:36:50.480 actually it just shows the extent to which FINTACH at 0:36:50.480 --> 0:36:54.120 its most basic level has been able to actually you know, 0:36:54.719 --> 0:36:58.600 hit through many many levels of industry that were actually 0:36:58.640 --> 0:37:01.960 not even there because financial industry has not been very 0:37:02.080 --> 0:37:04.399 robust in many countries on the African continent, and so 0:37:04.680 --> 0:37:06.720 mobile money has ensured. 0:37:06.680 --> 0:37:08.080 That you can leapfrog that. 0:37:09.320 --> 0:37:12.480 But you know, so, so from that perspective, you can 0:37:12.600 --> 0:37:16.160 use the most basic phones for some of the most 0:37:16.160 --> 0:37:19.520 basic products that you can make available because in terms 0:37:19.560 --> 0:37:23.919 of sophistication, the level of sophistication in terms of technology 0:37:24.360 --> 0:37:28.240 is not the same everywhere, certainly where we oppor data access, 0:37:28.520 --> 0:37:33.480 data access absolutely absolutely, so, you know, so we we 0:37:33.800 --> 0:37:37.400 found it to still we're able to use it as 0:37:37.440 --> 0:37:42.160 it's applicable across the African continent. In South Africa where 0:37:42.440 --> 0:37:45.400 mobile telephony is very high and you have access to 0:37:46.239 --> 0:37:49.640 a lot of more sophisticated phones there, you're able to 0:37:49.680 --> 0:37:53.319 make access to a number of products with the use 0:37:53.360 --> 0:37:57.239 of AI to consumers that are using whether it's our 0:37:57.280 --> 0:38:01.719 e commerce platform or they're using any of our platforms, 0:38:02.000 --> 0:38:04.480 our payments platforms are classifieds platforms. 0:38:05.480 --> 0:38:07.120 Yeah, to excess our products. 0:38:07.680 --> 0:38:10.680 Michelle. When you know, you've talked a lot about focusing 0:38:10.719 --> 0:38:15.040 on solving the needs of your SMPS entrepreneurs, what has 0:38:15.120 --> 0:38:19.799 been like the weirdest problem that they have had in 0:38:19.880 --> 0:38:22.239 trying to adapt to all of these many changes that 0:38:22.280 --> 0:38:23.560 seem to be happening at light speed. 0:38:23.960 --> 0:38:24.680 Yeah, definitely. 0:38:24.719 --> 0:38:27.440 When we talk about SMBs, sometimes we're talking about company 0:38:27.520 --> 0:38:31.160 with less than ten people already entrepreneurs. 0:38:31.200 --> 0:38:32.120 They are multitask. 0:38:32.520 --> 0:38:34.680 I think one of the challenge for us is first 0:38:34.680 --> 0:38:38.799 to develop technologies and innovations and AI solutions. 0:38:38.960 --> 0:38:40.799 I mean, this is targeting for what they need. 0:38:41.520 --> 0:38:43.680 And that's why we have been working for over twenty 0:38:43.719 --> 0:38:46.400 five years and we're very happy to have been, you know, 0:38:46.440 --> 0:38:47.280 supporting these. 0:38:47.120 --> 0:38:49.000 Can catch more bluebags, women, money. 0:38:48.760 --> 0:38:52.120 And power evenom right here on Bloomberg Television and for 0:38:52.200 --> 0:38:54.440 now we check in on these markets, says the NASDAK 0:38:54.520 --> 0:38:57.640 tennds into the red. A key contributor to the downside 0:38:57.640 --> 0:38:59.440 in the SMP, for example, has been Oracle of by 0:38:59.440 --> 0:39:02.600 more than seven percent after it's forecast did not live 0:39:02.680 --> 0:39:06.160 up to expectations. And in general we're seeing nine percent 0:39:06.200 --> 0:39:09.799 growth in revenue, not enough to vindicate the eighty percent 0:39:09.880 --> 0:39:11.799 ramp up in the shares we've seen so far this year. 0:39:11.880 --> 0:39:14.920 Move on to other individual movers that we're seeing, notable 0:39:14.920 --> 0:39:18.440 ones to the downside include Mongo dB off by thirteen percent, 0:39:18.880 --> 0:39:22.719 shares declining significantly. Databased software company reporting pretty strong third 0:39:22.719 --> 0:39:24.960 call results, but they also announce the departure of their 0:39:24.960 --> 0:39:29.080 CFO and COO, Michael Gordon. Markets worrying about that despite 0:39:29.120 --> 0:39:31.400 the strong results. I'm looking at at microstrutuy off by 0:39:31.400 --> 0:39:33.400 one and a half percent, Pallenteer up by seven ten 0:39:33.520 --> 0:39:35.719 percent in a down market. This is we understand that 0:39:35.760 --> 0:39:38.040 maybe these names could be the ones next added to 0:39:38.080 --> 0:39:40.239 the Nasdaq one hundred. So we keep a keen eye 0:39:40.360 --> 0:39:42.640 on whose in and out of these benchmarks. But meanwhile, 0:39:42.680 --> 0:39:44.680 coming up, we go to the private markets. V see 0:39:44.680 --> 0:39:47.920 investing trends in cybersecurity sector and nu K Salam. 0:39:47.640 --> 0:39:48.319 Is going to be joining us. 0:39:48.320 --> 0:39:59.239 But in capital ventures this is Bloomberg technology. In the 0:39:59.239 --> 0:40:01.640 first half of this year, Palo Alto Networks forty two 0:40:01.719 --> 0:40:04.840 reported in one the four percent increase in ransomware victims 0:40:05.000 --> 0:40:07.319 compared to the first half of twenty twenty three. Higher 0:40:07.400 --> 0:40:10.719 level of activity observed last year was no fluke. This 0:40:10.880 --> 0:40:13.239 makes cybersecurity a hot sector to invest in if you're 0:40:13.239 --> 0:40:14.000 a venture capitalist. 0:40:14.040 --> 0:40:14.680 We got one of them. 0:40:14.960 --> 0:40:18.600 Enrickie Salem, partner at being Capital Ventures and former CEO Simantec, 0:40:19.120 --> 0:40:22.520 and we're all about this on VC Spotlight continued focus 0:40:22.840 --> 0:40:25.920 on cyber Does ransomware make a keen interest for you? 0:40:27.560 --> 0:40:30.480 Well, obviously it's one of the biggest attack vectors today 0:40:30.480 --> 0:40:33.320 and what we're seeing is no one's immune. You've basically 0:40:33.360 --> 0:40:38.719 got small businesses, hospitals, governments. You saw recently that at 0:40:38.760 --> 0:40:42.440 Starbucks the baristas couldn't access their schedules because of a 0:40:42.480 --> 0:40:46.160 ransomware attack, and you're seeing it pretty prevalent across all industries. 0:40:45.680 --> 0:40:48.560 Today, affecting one in ten companies each year according to 0:40:48.640 --> 0:40:49.360 JP Morgan. 0:40:49.880 --> 0:40:51.360 What are the best ways of preventing this? 0:40:51.440 --> 0:40:53.800 How is the technology changing to ensure that we're getting 0:40:54.520 --> 0:40:56.440 one of a kind founders coming to the space. 0:40:57.480 --> 0:40:59.880 Well, so we're always looking to find new solutions to 0:41:00.080 --> 0:41:02.560 how do you prevent an attack from happening? And that's 0:41:02.600 --> 0:41:04.560 the key is first try to prevent it, and what 0:41:04.600 --> 0:41:07.640 that means is try to understand what is the activity 0:41:07.680 --> 0:41:10.080 or behavior that a ransomware attack will do, which is 0:41:10.120 --> 0:41:13.480 ultimately try to encrypt the data on your computer and 0:41:13.520 --> 0:41:16.560 also exfiltrated. But the most important thing now is be 0:41:16.719 --> 0:41:19.000 prepared to recover. How do you make sure that you 0:41:19.040 --> 0:41:22.319 can decrypt it successfully and get all your data back 0:41:22.360 --> 0:41:24.879 without having to pay the ransom, which is what they're 0:41:24.920 --> 0:41:26.600 targeting to try to get you to do. 0:41:27.360 --> 0:41:30.080 Has that been some of the most fruitful areas allocating 0:41:30.160 --> 0:41:30.520 right now? 0:41:30.600 --> 0:41:32.480 There's also just cyber is just so prevalent. 0:41:32.520 --> 0:41:35.960 More generally, we're worrying about supply chain threats as well. 0:41:36.000 --> 0:41:38.359 Where else have you seen opportunities to be putting money 0:41:38.360 --> 0:41:38.720 to work? 0:41:39.640 --> 0:41:42.520 Well, you talked about supply chain security. We saw the 0:41:42.600 --> 0:41:46.560 major attack on solar winds which hit eighteen thousand companies, 0:41:46.960 --> 0:41:49.360 and what we saw then was an executive order for 0:41:49.880 --> 0:41:53.520 President Biden that said every company needs to take supply 0:41:53.640 --> 0:41:57.239 chain security very seriously, and ultimately that gave rise to 0:41:57.320 --> 0:42:00.919 a whole new set of companies, companies like Stacklock, chain Guard, 0:42:01.080 --> 0:42:04.440 and a number of others that are now actively providing 0:42:04.480 --> 0:42:06.840 solutions to businesses to protect their supply chains. 0:42:07.480 --> 0:42:09.960 We find you so interesting because of course you were 0:42:10.000 --> 0:42:13.200 a CEO yourself. You're also appointed to President Barack Obama's 0:42:13.200 --> 0:42:16.439 Management Advisory Board. You understand how politics works at hand 0:42:16.440 --> 0:42:18.839 in hand with leading businesses. How are you advising your 0:42:18.840 --> 0:42:21.200 portfolio companies now? As we start to look towards the 0:42:21.239 --> 0:42:22.879 next administration in twenty twenty five. 0:42:23.920 --> 0:42:26.000 Well, I think it's going to be an interesting opportunity 0:42:26.000 --> 0:42:27.839 for a lot of companies. The biggest trend that we've 0:42:27.880 --> 0:42:30.400 all been talking about is AI, and AI is going 0:42:30.440 --> 0:42:33.520 to completely change how many of our businesses work. The 0:42:33.560 --> 0:42:36.560 attackers we've talked about security, what we're seeing is they 0:42:36.560 --> 0:42:39.880 can be so much more aggressive now on targeted phishing 0:42:39.880 --> 0:42:43.360 attacks that are custom made to really get somebody to react. 0:42:43.400 --> 0:42:45.080 You know, we're seeing deep fakes. 0:42:45.120 --> 0:42:47.320 And so we're telling all our companies how do you 0:42:47.360 --> 0:42:50.719 take advantage of AI? And then the new administration I 0:42:50.719 --> 0:42:54.320 think will give us opportunities to drive potentially consolidation M 0:42:54.360 --> 0:42:57.360 and A. And we're hoping that the IPO market comes 0:42:57.360 --> 0:42:58.560 back in twenty twenty five. 0:42:58.960 --> 0:43:01.799 Riki Salem, have you back when an IPO market starts 0:43:01.840 --> 0:43:04.560 to creak open partner capital ventures? 0:43:04.560 --> 0:43:04.960 We thank you. 0:43:05.640 --> 0:43:08.480 Let's talk about geopolitics a little bit more. Huawei suppliers 0:43:08.520 --> 0:43:11.160 are facing more limitations this as a US lawmakers are 0:43:11.200 --> 0:43:14.520 moving to restrict the Pentagon from doing business with companies 0:43:14.600 --> 0:43:17.160 that sell chips and services to the Chinese company who 0:43:17.239 --> 0:43:19.719 mergs Mike Sheppard joins US for now, for more, this 0:43:19.880 --> 0:43:23.000 continues to be the narrative China US facilities dialing up. 0:43:23.120 --> 0:43:25.880 From a tech perspective, already, it is pretty hard if 0:43:25.920 --> 0:43:28.279 you were supplying to Huawei, but not hard enough clearly. 0:43:28.800 --> 0:43:32.200 Well, apparently not for lawmakers on Capitol Hill who want 0:43:32.239 --> 0:43:35.680 to bar defense contractors from doing any sort of business 0:43:36.000 --> 0:43:40.000 whatsoever with Huawei, which is a national champion in China, 0:43:40.040 --> 0:43:43.520 but here in Washington it's considered an outcast and pariah. 0:43:43.719 --> 0:43:46.880 It's been subject to a growing list of US sanctions 0:43:47.160 --> 0:43:51.239 and export controls that have limited American companies greatly from 0:43:51.280 --> 0:43:55.680 doing business with Huawei already, and now we're seeing more 0:43:55.800 --> 0:44:00.120 restrictions coming their way, this time through the Pentagon. This 0:44:00.200 --> 0:44:04.120 is likely to become law. The provision is attached to 0:44:04.239 --> 0:44:08.439 must pass defense policy legislation that we will see action 0:44:08.600 --> 0:44:11.759 on in coming weeks before lawmakers leave town for the holidays. 0:44:12.040 --> 0:44:14.799 So this is something coming down the piking. Companies will 0:44:14.800 --> 0:44:17.360 have to deal with it within a nine month span 0:44:17.440 --> 0:44:20.680 that is when the provision actually takes effect, and there 0:44:20.719 --> 0:44:24.399 are very rare exemptions granted under the law that would 0:44:24.400 --> 0:44:27.680 allow companies to continue to do business with Huawei and 0:44:27.760 --> 0:44:29.360 the Pentagon at the same time. 0:44:30.239 --> 0:44:32.520 Mike Shepherd breaking it all down in the latest tit 0:44:32.600 --> 0:44:34.799 for tat tech trade tensions China US. 0:44:34.880 --> 0:44:35.759 We appreciate it.