Speaker 1: From Marhart of We're Innovation, Money and Power Collie in
Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
Speaker 1: and Ed Ludlow.
Speaker 2: And Caroline Heinder Bloomberg's world headquarters in New York.
Speaker 3: And I'm d Ludlow live at CS Las Vegas. This
Speaker 3: is Bloomberg Technology.
Speaker 4: Coming up on the show.
Speaker 2: Hackers target the SEC's X account to falsely announce approval
Speaker 2: of the Bitcoin spot. ETF will break down what happened
Speaker 2: and what we can expect regarding today's deadline. Plus Hewlett
Speaker 2: Packard Enterprises while it announces plans to buy Juniper Networks
Speaker 2: of fourteen billion dollars. We are going to discuss the
Speaker 2: deal with the hpeco, Antonio Nairing and the CS coverage
Speaker 2: it continues. We sit down in the CEO's of Zeeman's
Speaker 2: Panasonics US Arms as a tech com. Difference is really
Speaker 2: the life and soul of technology coverage as.
Speaker 4: It stands right now.
Speaker 2: We go out to you Ed in Las Vegas right
Speaker 2: now and well, the wealth of discussion around autos, the
Speaker 2: wealth of discussion around AI was clear to see yesterday.
Speaker 2: What do you seem being really adopted by the press,
Speaker 2: at the moment.
Speaker 3: Do you know, I think day two this morning, certainly
Speaker 3: the new psychle is starting to play out here because
Speaker 3: you have everybody on the ground in high concentration from
Speaker 3: across these industries. You know, we've got that EV data
Speaker 3: for the last three months of twenty twenty three. There
Speaker 3: are lots of EV companies here that are worried about
Speaker 3: the demand picture. We'll have a conversation with Panasonic later
Speaker 3: in the show about that, but also Amazon and Twitch
Speaker 3: News about layoffs. That is a point of discussion for
Speaker 3: obvious reasons.
Speaker 2: Yeah, the ongoing concern about whether technology valuations are right.
Speaker 2: Just think about the RBC note coming out from Lori
Speaker 2: Calvacina today just saying, look, valuations too high. They're cutting
Speaker 2: their overall recommendation.
Speaker 4: On US tech.
Speaker 2: Is that a bit of a downdraft that's happening in cees.
Speaker 3: Yeah, Yeah, it's interesting. We kicked off this week with
Speaker 3: that Nvidio news right on their AI graphics chips for
Speaker 3: PC and that put the stock to a fresh record.
Speaker 3: I know it's continued to kind of train in a
Speaker 3: narrow range since, but there are people that think that
Speaker 3: in video is still kind of cheap and what we're
Speaker 3: seeing here in the news cycle as companies say, Okay,
Speaker 3: this is how we're actually going to use AI in
Speaker 3: our business internally, and we want you to assign some
Speaker 3: more value to our companies because the AI is going
Speaker 3: to boost our margins and increase our sales conversion. I'll
Speaker 3: dig a bit more into that later in the show,
Speaker 3: but I put a newsletter out on that point this morning,
Speaker 3: and that really genuinely is the conversation.
Speaker 2: And it's going to be a conversation we have with
Speaker 2: the HPECO because of course a lot of that is
Speaker 2: about aligning his business for the AI focus as well.
Speaker 2: But we have to get into that news regarding the
Speaker 2: SEC's Bitcoin ETF decision and well the hack. Of course,
Speaker 2: it took place at about four pm.
Speaker 4: Yesterday in New York time. Have an on X joining
Speaker 4: us now as blue motion early basecond just regarding the
Speaker 4: X debarcle.
Speaker 2: Now many sort of pointing fingers. Ultimately, it seemed to
Speaker 2: be a lack of double authentication to factor authentication, do
Speaker 2: not use your phone as your second form of authentication?
Speaker 2: Off thatous indeed, what was happening. But what did you
Speaker 2: make of the market reaction? Because everyone on too, paces
Speaker 2: gotta signed off.
Speaker 5: Yeah, it was a.
Speaker 6: Real time test of what would happen if the SEC
Speaker 6: does approve a bitcoin ETF. You saw the price spike
Speaker 6: to almost forty eight thousand dollars, but when the news
Speaker 6: was reversed, we have seen a very sluggish movement here,
Speaker 6: even though many market participants, including many of the issuers,
Speaker 6: believe that they still will get that approval today and
Speaker 6: so you have seen the price crash back down by
Speaker 6: more than two thousand dollars per bitcoin. You have seen
Speaker 6: a crash down closer to forty five thousand.
Speaker 5: At its low.
Speaker 6: It's kind of forty five five hundred giver take at
Speaker 6: the moment, does it get back to that nearly forty
Speaker 6: eight thousand dollars high? And in the coming days if
Speaker 6: we do get an approval and more trading, then what
Speaker 6: does it mean for.
Speaker 5: Price action after that?
Speaker 6: There are a lot of investors, as you know, Caroline,
Speaker 6: that believe that maybe this is priced to perfection. We've
Speaker 6: seen the best in terms of movement, in terms of
Speaker 6: what an SEC could bring, or an SEC approval for
Speaker 6: a spot bitcoin at ETF could bring to the table
Speaker 6: for bitcoin.
Speaker 2: The likes of those that are offering the ETFs, and
Speaker 2: we know that there seems to be a race to
Speaker 2: the bottom in terms of management fees. It's going to
Speaker 2: be incredibly cheap to be able to build this into
Speaker 2: your overall portfolio.
Speaker 4: But are they worried by these sorts of full starts.
Speaker 4: Are they worried that further.
Speaker 2: Dense desire to be getting into the speculative asset class.
Speaker 6: Well, it's interesting the less of the concern was around
Speaker 6: the ETF itself and the Bitcoin ETF approval, and more
Speaker 6: concern was around the SEC and its management processes here.
Speaker 6: As you said earlier, X had said that this was
Speaker 6: not a hack. It was because of a compromise individual
Speaker 6: stealing a phone number associated with the SEC account. I
Speaker 6: think it's interesting that Gary Goinsler himself use the word
Speaker 6: compromise rather than hack. Now, remember there are a lot
Speaker 6: of lawmakers here attacking the SEC as well as Gary Gainsler,
Speaker 6: Republican lawmakers in p particular, concerned about how the SEC
Speaker 6: is managing this process. I would also say that Coinbase
Speaker 6: as executives. I don't know if you guys have seen this,
Speaker 6: There are online saying that they could be a part
Speaker 6: of the solution.
Speaker 7: Here.
Speaker 6: The SEC and Coinbase have been in their own disputes
Speaker 6: for the last couple of months, and so the SEC's
Speaker 6: ability to oversee the crypto industry has certainly long been
Speaker 6: in question, and now there are more eyes on that
Speaker 6: after the SEC snafu last.
Speaker 2: Night that did seem to rub salt into a rather
Speaker 2: gaping open wound for the SEC. We thank you Shnani
Speaker 2: basec of course, just to reiterate that my husband is
Speaker 2: a director over at Coinbase. Meanwhile, we want to be
Speaker 2: talking about what's happening in the broader cryptosphere, what all
Speaker 2: of this means if we do indeed the sign off
Speaker 2: for a spot bitcoin etf as soon as today should
Speaker 2: like Jawuen Putrez with us, founder and managing partner of
Speaker 2: Future Perfect Ventures, it's an early stage VC firm focusing
Speaker 2: on blockchain technology, on crypto assets, on AI, on human
Speaker 2: computer interaction, all.
Speaker 4: Of the exciting parts of the tech sphere.
Speaker 2: Jalick, what did you alterly think of this almost test
Speaker 2: case of the price reaction to the sign off, because
Speaker 2: how much.
Speaker 4: Is baked in?
Speaker 2: How much of this exuberance is already sort of there
Speaker 2: and within the forty eight thousand price point, well, it's.
Speaker 8: Great to be with you again. And I think this
Speaker 8: has been an amazing twenty four hours, very apropos for crypto,
Speaker 8: and I do say if we look at the price action,
Speaker 8: it's been.
Speaker 5: With a pretty narrow range.
Speaker 8: And so I think there's still a lot of pent
Speaker 8: up energy deniand for the asset, what.
Speaker 2: Does it ultimately mean for crypto more broadly? There has
Speaker 2: been a lot of focus therefore on the og of
Speaker 2: the space bitcoin and it's been perhaps dragging away some
Speaker 2: of the liquidity and ultimately volumes from old coins. But
Speaker 2: you're busy thinking about business models within crypto, is there
Speaker 2: exuberance into.
Speaker 4: Building into other parts? I'm thinking of Ether Solana.
Speaker 8: Yeah, So if you look at eth, Eth has appreciated
Speaker 8: quite a bit over the last twenty four hours, specially
Speaker 8: since the hack, and I think there's an expectation or
Speaker 8: a viewpoint that the SEC will continue to approve select
Speaker 8: crypto assets at ETFs and that allows a lot more
Speaker 8: retail investors, a lot more institutions to custody feel comfortable
Speaker 8: of owning these assets.
Speaker 5: So if we take a step back.
Speaker 8: And these are new financial asset classes, but also it's
Speaker 8: all driven by technology and what's been enabled by the increase.
Speaker 9: In processing power.
Speaker 8: We've had a lot of it works in TANEM with
Speaker 8: artificial intelligence. So all of these technologies are now being
Speaker 8: enabled in real time, and it's a new financial system
Speaker 8: that will not only be built on these rails but
Speaker 8: also allow more access for people to own these these assets.
Speaker 8: I have so many people around the world that I've
Speaker 8: talked to over the last ten years since I latch
Speaker 8: Future Perfect Ventures who have asked, how do I buy bitcoin?
Speaker 8: And you know, they don't know that you don't have
Speaker 8: to buy a whole bitcoin. They don't know how to
Speaker 8: custody bitcoin. And this is on a worldwide basis. So
Speaker 8: this ETF approval, this bitcoin ETF approval, is a first
Speaker 8: step to allow a more mass ownership of the self
Speaker 8: sovereign assets. And I think this is certainly a watershed
Speaker 8: moment in terms of not only the financial elements of this,
Speaker 8: but the technology behind these assets.
Speaker 4: And see if it happens.
Speaker 2: Celec jaman Putra, we want to thank you so much,
Speaker 2: founder managing partner of Future Perfect Ventures.
Speaker 4: We thank you so much.
Speaker 2: On Tuesday, hpe it announced it has agreed to buy
Speaker 2: Juniper Networks for fourteen billion dollars in a move to
Speaker 2: will expand its presence in networking in particular. But there
Speaker 2: is also some skepticism being raised by Wall Street, as
Speaker 2: we saw with the price action hpecu an Tonio Andry
Speaker 2: us now to talk us through the reasoning. What attracted
Speaker 2: you to Juniper Networks Why focusing data centers expansion, Yes,
Speaker 2: networking cloud networking presence expansion, Yes, any worry about overlap here?
Speaker 10: Antonio, Well, good afternoon, Karen, Thanks for having me. Yes,
Speaker 10: there was an exciting day for HP our shareholders, our customers,
Speaker 10: and our employees. We are reshaping the entire networking industry
Speaker 10: by combining two amazing companies with amazing complementary assets to
Speaker 10: capture the inflection point we see today, particularly with the AI.
Speaker 10: So we believe this is going to turbocharge the strategy
Speaker 10: that I have put in place five years ago and
Speaker 10: we have been executing with discipline, and then ultimately give
Speaker 10: us the relevancy in this massive inflection point. And Jenniber
Speaker 10: brings to us the complementary capabilities we didn't have across
Speaker 10: the networking portfolio. But think about it this way, we
Speaker 10: are actually creating a new core business for Hulet packer Enterprise,
Speaker 10: which will represent more than a third of the company
Speaker 10: revenues and most importantly, almost sixty percent of the company profit.
Speaker 10: And we will address a market that's growing, which represent
Speaker 10: approximately one hundred and eighteen billion dollars. And this acquisition,
Speaker 10: this proposed acquisition, is going to be a creative post
Speaker 10: closed day one. So it is an exciting time for everyone.
Speaker 10: I think the market needs to understand it, but they
Speaker 10: will realize that we're going to challenge the twenty years
Speaker 10: incumbency with modern architectures and drive better solutions for our customers.
Speaker 4: Let's talk about those solutions. Let's talk about that modern focus.
Speaker 4: Because Cisco basically is the gorilla.
Speaker 2: In the room that we're talking about, and Juniper Networks
Speaker 2: isn't a new asset, as an older one that has
Speaker 2: failed to gain that market share from some of these
Speaker 2: competitors in the switching and the networking space.
Speaker 4: Why with you will it be different?
Speaker 5: Yeah, well, I think.
Speaker 10: We need to understand their business a little bit more
Speaker 10: in depth.
Speaker 1: Right.
Speaker 10: So, obviously, when you think about the Internet area, Jurniper
Speaker 10: today powers a lot of the Internet connectivity and so
Speaker 10: that's an enormous foundation when we think about the enterprise business.
Speaker 10: They have done a fantastic job driving what I call
Speaker 10: the AI driven disruption. Obviously have a power Floud platform
Speaker 10: with MISSED. We have an amazing platform with HP Aruba Networking.
Speaker 10: Both are complementary because we have the scale, the rich
Speaker 10: from a technology and go to market perspective, but also
Speaker 10: they have been innovating what I call the next generation
Speaker 10: of AI driven secure networking. So we're going to bring
Speaker 10: both together and deliver a better solution for customers. On
Speaker 10: the other side, you need to understand that also bring
Speaker 10: an amazing silicon easy capabilities for high performance networking. We
Speaker 10: already in HP have been focused on AI interconnect fabric.
Speaker 10: This will turbo charge our strategy because we have the
Speaker 10: market leader in supercomputing and when you talk about AI
Speaker 10: and talk about large language model, you talk about foundation.
Speaker 10: Whether it's weather or whether it is other type of applications,
Speaker 10: you need high performance silicon and the core foundation of
Speaker 10: that is the network. We're going to create that network solution.
Speaker 10: We are going to add the data layer on top
Speaker 10: of that, and we're going to deliver this secure, unified
Speaker 10: experience to our amazing platform college Big grey Lake.
Speaker 2: Sticking with the ultimate technology and the profitability of Antonio.
Speaker 2: The margin difference that we see within the networking businesses.
Speaker 4: GUS is lower than yours. How do you bring that up?
Speaker 2: Is that about ensuring that you're within the AI sphere,
Speaker 2: you're being able to charge more for what you're providing.
Speaker 10: Actually, Helly, you have to look at two levels of margin.
Speaker 10: You have to look at the gross margin level and
Speaker 10: have super high gross margin level because of the entire
Speaker 10: ownership of the stack from silicon to infrastructure to software,
Speaker 10: similar to what we do in campus and branch. But
Speaker 10: we're going to bring to them the efficiency in order
Speaker 10: to drive the operative margin leverage by reducing cost the
Speaker 10: ability to go and execute. So we believe the first
Speaker 10: step is the cost synergies. That's why the synergy costs
Speaker 10: more than payoff for the capital that we are taking
Speaker 10: to pay for this transaction. And then on top of that,
Speaker 10: you're going to have the revenue synergies, a higher gross margin.
Speaker 10: The ultimate to the scale of our reach will drive
Speaker 10: better operating margins for our shareholders and that will translate
Speaker 10: into a free cash flow because remember this transaction is
Speaker 10: a creative day one for both a non gap EPs
Speaker 10: and free cash flow.
Speaker 2: Basis we want to remind of blingbag TV and radio audiences.
Speaker 2: We are sat down with the hpeco Antonio and Arian.
Speaker 2: You're talking about that cost discipline. Where do the cost
Speaker 2: come out?
Speaker 4: Is it people? Is it jobs?
Speaker 10: The cost actually is many things. To be fair, I mean,
Speaker 10: the biggest part will be in the GNA side. You know,
Speaker 10: HPE and my team had had a tremendous track record
Speaker 10: in driving operating leverage across the company. When I became
Speaker 10: CEO of HPE, our non gap earning pressure was ninety
Speaker 10: six cents. We exit twenty twenty three to more than
Speaker 10: two dollars and twelve cents, and a lot of that
Speaker 10: was gross margin expansion to Pivotal portfolio, which this transaction
Speaker 10: turbo chargers. Right, we can talk about gross margin, higher
Speaker 10: growth areas and then reducing the cost to run the
Speaker 10: business through automation and efficiencies, so that GNA portion would
Speaker 10: be a huge booster to the Juniper operating margin. And
Speaker 10: remember also we're going to give them access to capability
Speaker 10: they couldn't deliver themselves in terms of as a service model,
Speaker 10: cloud scale and last monel list that go to market
Speaker 10: each has a crown jewel which is a go to
Speaker 10: market reach everywhere in the world, one hundred and seventy
Speaker 10: two countries, a scale they couldn't imagine themselves.
Speaker 2: Antonio, we've got a minute left. Fourteen billion dollars in
Speaker 2: cash is a lot of money. What about the buybacks?
Speaker 2: What about the dividends?
Speaker 4: What about how else.
Speaker 2: You're able to pay back when you've got a heavier
Speaker 2: debt looad.
Speaker 10: Well, first of all, this transaction is thirteen point six
Speaker 10: billion dollars and not people like to run things up,
Speaker 10: but you know, we are committed a number one, to
Speaker 10: maintain our credit rating, which is very important to us,
Speaker 10: and we believe that's absolutely doable. Number two, we are
Speaker 10: maintaining the share by back commitment we give the security
Speaker 10: Analyst meeting in October, and the dividends, which is our
Speaker 10: core component of our return capital return to shareholders. And
Speaker 10: then over the next two years close closing, we're going
Speaker 10: to return to two times leverage on not ebita and
Speaker 10: pay down the death And one component that paid down
Speaker 10: the dead is obviously the proceeds from our HTREC divestors
Speaker 10: in China, which is proceeded very well, and obviously the
Speaker 10: synergies we're going to drive through the free cash flow
Speaker 10: generation on both the Juniper side and on obviously on
Speaker 10: the HP side. So that's why when I think about
Speaker 10: the shareholders, this is a no brainer in many ways
Speaker 10: because it's the best use of cash to drive long
Speaker 10: term sustainable profit growth and expansion of owners pressure and
Speaker 10: free cush flow which will actually resolve in a better
Speaker 10: term capital pusherholder all the time.
Speaker 2: Antonio and Narry Great has some time with you, the
Speaker 2: HPE CEO.
Speaker 4: This is Bloomberg.
Speaker 3: Welcome back to cs Las Vegas, where it is AI everything.
Speaker 3: But it's not just about the software component or devices.
Speaker 3: Also a lot of the infrastructure and platform providers getting
Speaker 3: in on the actor as well. We're joined by Siemens
Speaker 3: US CEO Barbara Humpton, and your company is positioning itself
Speaker 3: at lots of different layers of what is happening in
Speaker 3: artificial intelligence. The mainstay of that relationship with both AWUS
Speaker 3: and Microsoft, the two kind of cloud leaders in the space.
Speaker 3: Just explain what you're doing.
Speaker 9: Yeah, here's what's going on these days.
Speaker 11: If the last decade or two was about the Internet
Speaker 11: of people, this decade for sure is about the Internet
Speaker 11: of things and Semens has deep domain knowledge. Now you
Speaker 11: think about all the classic tech companies who've worked in
Speaker 11: the fields of AI bringing this to bear, and others
Speaker 11: like in Nvidia, who are bringing high processing power into
Speaker 11: the field. We're partnering with companies who have those superpowers
Speaker 11: and focusing those technologies.
Speaker 9: On the domains we understand.
Speaker 3: So well, yeah, let's go seed AWS component, because what
Speaker 3: you're effectively saying is you're taking one of your technology
Speaker 3: platforms and marrying it with Bedrock, which we've covered on
Speaker 3: this program deeply for a while. Now, how does it work?
Speaker 11: Yeah, So think about the need for people to embed
Speaker 11: AI programs into their operations with AWS components, AI components
Speaker 11: now with Siemen's Low Code mendix normal people like us.
Speaker 9: We're democratizing technology.
Speaker 11: We have the ability to use point and click, very
Speaker 11: intuitive interfaces to put together our own programs.
Speaker 3: And Microsoft is a part of that as well. What
Speaker 3: is the difference in the relationships.
Speaker 9: Yeah, they've got slightly different focus areas.
Speaker 11: With Microsoft, we recently announced the Industrial Copilot. Now, imagine
Speaker 11: you want to reprogram the controls that you have in
Speaker 11: a manufacturing environment. You now have the ability with the
Speaker 11: Industrial Copilot to actually interface with natural language to write
Speaker 11: the programs so now I really think what we're going
Speaker 11: to be able to do is bring more and more
Speaker 11: people into the fields of engineering.
Speaker 9: Let me tell you about one more Sony.
Speaker 11: Sony just announced their exclusive arrangement with US, working with
Speaker 11: Siemens Software through the Accelerator platform, creating an industrial engineering
Speaker 11: VR headset. We're bringing the industrial metaverse to life. And
Speaker 11: everybody has talked about what's the true value of the metaverse?
Speaker 9: Well, here is the proof point.
Speaker 11: The ability for engineers to actually meet in a common
Speaker 11: area from wherever and to use the intuitive interfaces that
Speaker 11: they know from gaming in order to interact and create
Speaker 11: develop new things.
Speaker 3: I want to bring it back to the real world. Rolandbush,
Speaker 3: the global CEO, spoke to us last year when you
Speaker 3: announced a more than five hundred million dollar infrastructure investment
Speaker 3: in the US. The idea is that you want to
Speaker 3: be a part of the supply chain for the data
Speaker 3: center providers, the semiconductor supply chain as well. What is
Speaker 3: it that you can give them? How are you helping them?
Speaker 11: So Siemens creates the technology that combines the real and
Speaker 11: the digital world, all those things that sit right at
Speaker 11: the edge. And what does it take to bring AI
Speaker 11: into the world. We need data centers capable of handling that.
Speaker 11: How do you build data centers? It requires a ton
Speaker 11: of electricity, so the electrical switch gear that powers those
Speaker 11: data centers. Then turn it around, how do you embed
Speaker 11: what's being developed into the technology we have in the
Speaker 11: industrial space. So that five hundred million dollar investment has
Speaker 11: actually put new switch gear manufacturing in Texas and it's
Speaker 11: put new rail manufacturing in North Carolina.
Speaker 3: I know you've been meeting with a number of government
Speaker 3: officials while you've been here on that investment. Specifically, how
Speaker 3: big a factor was the IRA convincing Semens that this
Speaker 3: was a good project.
Speaker 11: What Semens has seen is that customers everywhere are choosing
Speaker 11: to come to the US and invest. You've seen the
Speaker 11: data on the Chips and Science Act. Fifty two billion
Speaker 11: dollars of government investment, that's a down payment. So far,
Speaker 11: well over two hundred and fifty billion have already been
Speaker 11: committed by the private sector.
Speaker 3: Which Semens divisions are going to benefit the most from
Speaker 3: this AI boom. And is there anything missing and I'm
Speaker 3: talking M and A that you've got to go shopping for.
Speaker 11: Oh, this is the most exciting sector in tech today.
Speaker 9: Think about it. You know, everyone has thought about.
Speaker 11: Industry and infrastructure is being relatively disconnected, relatively analog.
Speaker 9: All of that is becoming digital.
Speaker 11: We build those common tools that today apply to industry, infrastructure, transportation, healthcare.
Speaker 11: Investors all be asking what else could this do? How
Speaker 11: do we bring value into.
Speaker 9: The real world?
Speaker 3: Siemens usco Barbara Humpton here at CES All.
Speaker 2: The EV names are seeing some weakness today, and this
Speaker 2: is we see some of those sales data coming out
Speaker 2: from Cox Automotive showing that we've got a third straight
Speaker 2: well sequential decline and growth area for EV sales just
Speaker 2: one point five percent, and or there are thereabouts of
Speaker 2: growth that we saw in the last three months of
Speaker 2: last year, way off the fifteen percent we saw on
Speaker 2: Q two.
Speaker 4: Why they're slowing. Let's get over to ed with someone
Speaker 4: who'll know.
Speaker 3: Caroline here at CES Las Vegas. EV is a segment
Speaker 3: is a big topic of conversation. But that data from
Speaker 3: Cox about demand hearing the breaks in the final three
Speaker 3: months of twenty twenty three, that is what people are
Speaker 3: talking about as well. We've got a great conversation coming
Speaker 3: out Panasonic North America CEO Meghan Young onon Lee so
Speaker 3: Caroline was referencing this Cox Automotive data. You know, low
Speaker 3: single digit growth final three months. But basically there's a
Speaker 3: feeling that that early adopter EV demand has been and gone,
Speaker 3: and so the broader market is pulling back a little bit.
Speaker 3: Through the lens of Panasonic is a key battery supplier,
Speaker 3: what do you see?
Speaker 7: We don't see that way at all, And it's a
Speaker 7: long commitment. We don't want to get too surprised or
Speaker 7: intimidated by the short term data. We're still very committed
Speaker 7: and our operation in Reno that's been there for about
Speaker 7: ten years, and our new factory that we're building in Kansas,
Speaker 7: we're still going bullish and we're looking forward to the
Speaker 7: production in early next year twenty twenty five.
Speaker 3: I have many questions about Kansas City. Our audience wanted
Speaker 3: to know about that when I said on social media,
Speaker 3: you're coming. But first let me ask about Tesla specifically,
Speaker 3: because it's the market incumbent. So it hit one point
Speaker 3: eight million vehicles in twenty twenty three, it has a
Speaker 3: fifty percent annual growth rate target each year. How do
Speaker 3: you view Tesla specifically, because you probably have the best lenses.
Speaker 7: Supply, so we have a long term partnership with Tesla,
Speaker 7: and it's still strong. But Tesla is not the only
Speaker 7: partner that we're seeking, and we want to diversify and
Speaker 7: really make the EV market in general stronger and sustainable.
Speaker 3: Kansas City, it is a g enormous factory. You are
Speaker 3: hoping to get into production five early next year. Okay,
Speaker 3: how's that going, Oh, it's going great.
Speaker 7: So the still work. It's about thirty percent done. We
Speaker 7: have about one hundred plus people already working there and
Speaker 7: we have about six hundred and fifty construction workers working
Speaker 7: every day. I was there a few months ago and
Speaker 7: it's massive. It's very impressive, and we will have about
Speaker 7: four thousand employees working there once it's in production.
Speaker 5: And to be prepared for.
Speaker 7: That, we're partnering with local community colleges to make.
Speaker 3: Sure if you're training purpose training, and it's.
Speaker 7: A wonderful opportunity for the community too, that the students
Speaker 7: can be prepared and have a job waiting for them
Speaker 7: and there's a long term career, and we want to
Speaker 7: partner with the workers and the employees who we can
Speaker 7: work a long term.
Speaker 3: You said, when you go into production, what is it
Speaker 3: that Kansas City is going to be doing and how
Speaker 3: is it different from Reno.
Speaker 7: Kansas The local government and entire business development community has
Speaker 7: been really strong a partnership since the very beginning, since
Speaker 7: we started the communication.
Speaker 5: The location was perfect.
Speaker 7: Kansas provides a skilled workforce already and we're very hopeful
Speaker 7: about that and it's a wonderful partnership just all around
Speaker 7: to work with.
Speaker 3: But my question is very simple, and what will it
Speaker 3: make you know? What is the product that Panasonic will
Speaker 3: manufacture in Kansas City? Oh?
Speaker 7: Oh, it's the EV battery and any twenty okay, sorry,
Speaker 7: actually twenty one, Yeah, twenty one EV batteries, the cylinder
Speaker 7: goal leave them.
Speaker 5: I on EV batteries.
Speaker 3: I want to get to AI, but the final and
Speaker 3: EV batteries. Could I only get speech to you once
Speaker 3: a year?
Speaker 5: Right?
Speaker 3: Forty six eighty is coming out of Japan right now?
Speaker 3: How is that going? And what is the future for
Speaker 3: forty six eighty in the United States?
Speaker 7: So we're very bolish about the technology. There's a lot
Speaker 7: that for six can do compared to twenty one model,
Speaker 7: but there is a strong demand and we're not slowing down.
Speaker 5: On the deficiencies.
Speaker 7: Improving the deficiencies of twenty one either, so it's a
Speaker 7: parallel path and we strongly about both technology.
Speaker 3: The famous CS I think you might agree is AI everything.
Speaker 3: It's interesting in Panasonic that you are more focused on
Speaker 3: the use of AI internally as a technology is part
Speaker 3: of the production process and supply chain. What does that
Speaker 3: mean for you?
Speaker 5: AI is definitely big here.
Speaker 7: I was overwhelmed how everyone is talking about AI.
Speaker 5: But if we think about.
Speaker 7: It, AI has been around and what we call smart
Speaker 7: factory is a strong part of what we do for
Speaker 7: the operation in Kansas, and we know but also in
Speaker 7: other areas too, so smart factory we're leveraging generative generative
Speaker 7: AI to make sure that we can make collective decisions,
Speaker 7: real time decision and make the work more effective but
Speaker 7: at the same time safer.
Speaker 3: Your technology partners on this include Palenteer, which is an
Speaker 3: interesting data relationship, and AWS, which has a strong presence here.
Speaker 3: What are you doing with those two companies in particular?
Speaker 7: And we're making sure that the smart factory and making
Speaker 7: the operation efficient and safe is the focus and we're
Speaker 7: really excited about the partnership.
Speaker 3: You've been coming to CES a little while. What is
Speaker 3: your read speaking to customers, government officials, people, you bump
Speaker 3: into on the showroom floor about twenty twenty four. You
Speaker 3: know what is the Megan Young wrongly kind of like,
Speaker 3: here's what I think is going to happen this year,
Speaker 3: but relevant to your world, right, which includes everything from
Speaker 3: consumer electronics, t EV, battery.
Speaker 5: Right right, CTA. We're partnering with CTA this year.
Speaker 7: We're fifty first year of participation nonstock and in North
Speaker 7: America we pivoted from Summer Electronics company.
Speaker 5: We're strong still very strong.
Speaker 7: Consumer electronics space, or we vertically integrated the technology into.
Speaker 5: All the other B to B areas. We are very
Speaker 5: happy with the.
Speaker 7: Evolution and partnership that we're working with CTA so that
Speaker 7: it's not just consumer electronics products and technology, but we're
Speaker 7: in other B to B solutions the area, including EV
Speaker 7: and it's wonderful to be here that the platform is
Speaker 7: expanding and there's a lot more potential in the future.
Speaker 7: And for example, we have a device car in our
Speaker 7: book that shows all the technology that we have that
Speaker 7: we're leveraging in automotive.
Speaker 5: So I hope you come and take.
Speaker 3: A look at it. Yeah, I think I'm right in
Speaker 3: saying you just bumped into your friend Barbara Humpton Siemens
Speaker 3: on the staircase. We talked about the inflation reduction ECTRET
Speaker 3: and the supportive regulatory environment. How do you view that
Speaker 3: The availability of funding from government and to build in
Speaker 3: the US.
Speaker 5: So financial It makes a lot of sense.
Speaker 7: For us, and we're very grateful for the government for
Speaker 7: making that push. We talked about We've been in Reno
Speaker 7: for ten years, so we have been committed for that
Speaker 7: long term and it's wonderful for us to talk about
Speaker 7: the US government back up to our headquarters in Japan
Speaker 7: that we feel like we have the validation from the
Speaker 7: government about the commitment and investment and if it was
Speaker 7: great and IRA has been wonderful for us to go
Speaker 7: US faster and better.
Speaker 3: Began me young onely, Panasonic North America CEO here at
Speaker 3: ces Las Vegas. Caroline back to you.
Speaker 2: Just such deep dive conversations that we love it. Keep
Speaker 2: it coming. Meanwhile, for you, coming up, we're going to
Speaker 2: be talking the state of artificial intelligence and whether or
Speaker 2: not we're in.
Speaker 4: An AI bubble as a Chan, co founder and managing
Speaker 4: partner of.
Speaker 2: FPV Ventures joins us next to discuss this is blue
Speaker 2: meg technology.
Speaker 4: Time.
Speaker 2: Now have Vic spotlight after a banner year for AI
Speaker 2: fundraising and pretty tough year for absolutely everyone else. What
Speaker 2: can we expect from AI the bursioning technology in twenty
Speaker 2: twenty four for fundraising for valuations?
Speaker 4: Joining us now Wesley Chan, co.
Speaker 2: Founder and managing partner over at FPV Ventures, and what
Speaker 2: we like contrarians And it feels as though, Wesie, perhaps
Speaker 2: you're feeling a bit contrarian on AI valuations right now.
Speaker 5: Yeah.
Speaker 12: It's one of those things where we're just watching it
Speaker 12: grow like crazy and we're sort of keeping out just
Speaker 12: a bit to let the valuations fall back down the earth.
Speaker 12: You know, we are huge fans of AI, have been
Speaker 12: investing in AI since you know, I started my career
Speaker 12: at Google Ventures almost fifteen years ago. But you know,
Speaker 12: it's one of those things where we're seeing a lot
Speaker 12: of similarities to where the crypto the crypto hype was
Speaker 12: going on in the dot com boom. So you know,
Speaker 12: we want to be careful about this given you know,
Speaker 12: the charities and the children's hospital money that we work
Speaker 12: with and manage.
Speaker 2: So the portfolio companies that you do have that stand
Speaker 2: out with heavy value euations, your Decacorns, Unicorns, Canva, guild.
Speaker 2: Have these companies have you talked to the founders about
Speaker 2: not having to feel they must bolt on AI in
Speaker 2: some sort of lexicon fashion, or indeed.
Speaker 4: Are they already into weaving it within the business and
Speaker 4: just don't need to shout about it in quite the
Speaker 4: way that others are.
Speaker 5: Yeah.
Speaker 12: You know, Camber, for example, launched its magic features where
Speaker 12: you can type in an amazing sort of thing that
Speaker 12: comes out of your mind, I want to make a
Speaker 12: presentation about Bloomberg, for example, and then they use AI
Speaker 12: to help you auto generate a lot of it. So
Speaker 12: they're using it, but they're doing it quietly and there
Speaker 12: are features that benefit users versus you know, sort of
Speaker 12: saying we're just doing AI for the sake of doing AI,
Speaker 12: which you know, a lot of companies today that are
Speaker 12: getting these hefty evaluations are getting you know, they're not
Speaker 12: hyping it up, they're not going crazy about it, but
Speaker 12: you know they're using it just to make the make
Speaker 12: the product a lot easier to use. That's the that's
Speaker 12: really about the problems of AI. It just makes thing
Speaker 12: so much easier and so much more automated, and so
Speaker 12: much more you know, as Cheva calls it, magical. So
Speaker 12: we're seeing enterprise adopt AI a lot because of the
Speaker 12: power and the utility of the of the of the
Speaker 12: that it brings to the table. But we're not just
Speaker 12: investing in companies because they do AI for the sake
Speaker 12: of it, which is what's what we're seeing a lot in.
Speaker 12: These hefty valuations are happening in the venture market right now.
Speaker 4: So where are you investing? What is it that makes
Speaker 4: a founder stand out for you?
Speaker 12: Well, we invest in mission driven founders, folks like Larry
Speaker 12: and Sergei where I had a fifteen year career at
Speaker 12: Google and got to work you know, personally with Sergey
Speaker 12: as part of his as his chief of staff for
Speaker 12: five of those years. And you know, they have these
Speaker 12: amazing views on what the world is. We call them
Speaker 12: unique insights, and they basically say, if we do what
Speaker 12: we're getting to go do, the world is going to change.
Speaker 12: I mean, I still remember Sergi giving me a one
Speaker 12: hundred year plan, right. And if you look at Cliff
Speaker 12: and Mill at CANBA, where I've worked with them for
Speaker 12: almost ten years, you know everybody thought Cliff and Mill
Speaker 12: in Australia were crazy. They were the founders of Canva
Speaker 12: and you know, ten years later, you know almost every
Speaker 12: person in the thirty five is using Canva's products to
Speaker 12: help design and build presentations or their homework or their
Speaker 12: or their work. And so you know, they have one
Speaker 12: hundred year plans and they have a vision of the
Speaker 12: world that changes of how the world changes when they
Speaker 12: when they launched product and everything goes, you know, to
Speaker 12: where they want to build.
Speaker 2: I'm sure when you're a mission driven founder often you're
Speaker 2: one that wants to remain independent, that wants to see
Speaker 2: the full legacy of your business. So ultimately IPO. What
Speaker 2: was interesting A lazy association was made between Figma and Canva,
Speaker 2: for example, but that was an interesting deal that then
Speaker 2: didn't happen, an evaluation that was skyrocketing for a company
Speaker 2: like Sigma. How does Canvas see How do you see
Speaker 2: an exit for Canva?
Speaker 12: I think Canva is going to probably likely IPO. That's
Speaker 12: really up to Cliff and Mel. But it's one of
Speaker 12: those companies where you know, Cliff and Mel really want
Speaker 12: to go build a product that everybody wants to use
Speaker 12: in the world changes. It's not about AI, It's about
Speaker 12: how do I make my life better?
Speaker 7: Right?
Speaker 12: You know, kids are using it for their homework so
Speaker 12: they can collaborate. Adults are using it to create presentations
Speaker 12: or marketing materials for what they need to do from work,
Speaker 12: and it's just ubiquitous, right, And I think when you
Speaker 12: build something that useful, you know, the world changes. I
Speaker 12: mean it was the same way at Google. At the beginning.
Speaker 12: Everybody was like, oh, that's kind of cute. It's a
Speaker 12: search engine of a blank white page and with two
Speaker 12: buttons on it. And today Google's ubiquitous for search, right,
Speaker 12: the world has changed when you build something that's better
Speaker 12: than everyone else and that makes the user experience so
Speaker 12: much better. I think that's what many of the founders
Speaker 12: we invest in truly understand.
Speaker 2: There has been one or two kids party invitations designed
Speaker 2: Viacanva in my household.
Speaker 4: Meanwhile, though I'm interested in Wesley and.
Speaker 2: STA ultimately, what the rest of the market has to
Speaker 2: look like right now if you do see eventually an IPO,
Speaker 2: which of course has to be what the founders want
Speaker 2: as well.
Speaker 4: Are any of them going to happen in twenty twenty four.
Speaker 12: You know a lot of bankers have told me it
Speaker 12: might reopen at the end of twenty twenty four, and
Speaker 12: you know, just being on ten plus boards. We have
Speaker 12: this conversation a lot in the boardroom, and I think
Speaker 12: that it's not going to happen this year. The ipobole
Speaker 12: market for the for the most part, has shut down.
Speaker 12: There's not a lot of people that want to go
Speaker 12: test the market or test the waters unless they really
Speaker 12: have to there's some artificial reason like their employee stock options,
Speaker 12: you know, coming to fruition or something of that sort
Speaker 12: where they have to go to IPO. And you know,
Speaker 12: we've seen the last couple of some top companies like
Speaker 12: Instacart and Klavio that unfortunately didn't perform as well. So
Speaker 12: I think most of the top companies are just waiting
Speaker 12: for IPO in twenty twenty five or later. So that
Speaker 12: twenty twenty four it's gonna be a brutal year for
Speaker 12: IPO and that's a challenge. And because of that, the
Speaker 12: a lot of growth investors don't see returns or don't
Speaker 12: see exits for their companies and so they're not investing
Speaker 12: in they're not deploying capital, and so it's going to
Speaker 12: be a brutal year for both venture for book growth and.
Speaker 2: For IPOs and maybe to be able to pick some
Speaker 2: winners when everyone else is in laying down checks. Wesley,
Speaker 2: What's interesting is at the start of the conversation you
Speaker 2: sort of associated the AI hype with or some of
Speaker 2: the boom and the bus that we've seen and of.
Speaker 4: Late crypto being one of them.
Speaker 2: Well, at the moment, everyone's kind of exuberant around crypto
Speaker 2: once again as we anticipate the SEC signing off on
Speaker 2: the spot, Bitcoin ETF What do you make of the
Speaker 2: space at the moment? Are you getting any pitches? Is
Speaker 2: there ever something that you are going to be touching?
Speaker 12: You know, there's a really funny observation. I've had a
Speaker 12: lot of people that had crypto venture funds have become
Speaker 12: AI or JENNAI venture funds. At the moment, it's so
Speaker 12: sort of funny watching that transition. You know, I think
Speaker 12: we see highs and bitcoin and what was it, forty
Speaker 12: eight thousand US dollars at the beginning of the year,
Speaker 12: But you know, there are a lot of people just
Speaker 12: moving money into things that they think, you know, have
Speaker 12: a have an inflationary uh an inflationary hold. Just given
Speaker 12: some of these crazy currency transitions that we're seeing in
Speaker 12: country like Argentina or maybe even China. But a lot
Speaker 12: of it's driven by speculation still, and you know, I'm
Speaker 12: just very very careful. I don't invest in the hype
Speaker 12: or invest in the speculation because at some point that
Speaker 12: bubble pops. We sawt in dot com Boom, we saw
Speaker 12: it in grocery delivery, we saw it in scooters, we
Speaker 12: saw it at crypto you know, uh, you know, a
Speaker 12: couple a couple of years back. So we're just very
Speaker 12: very careful and picking companies that have the ability to
Speaker 12: stand the test of time and like Canada, just compound
Speaker 12: and grow and create products that people want and that
Speaker 12: people want to pay for and then grow because of that.
Speaker 12: You know, those are those are some of the companies
Speaker 12: that have done best by me. I saw it first
Speaker 12: and at Google, and then I see it first time
Speaker 12: now with Canva Leslie.
Speaker 4: It's always great catching out with you. Thank you, No
Speaker 4: what a pleasure.
Speaker 2: Thank Yousi Chan of FPV Ventures.
Speaker 13: I think it's still early days in terms of what
Speaker 13: are the applications that are going to be really kill
Speaker 13: or of the smartphones. The hardware is enabled now, so
Speaker 13: you have capability now inside the smartphone that can run
Speaker 13: these AI algorithms. But for example, two areas that people
Speaker 13: really care about are latency and privacy.
Speaker 2: I'm CEO Rene Haas there on the implementation the use
Speaker 2: of AI with their products, of course, is speaking to
Speaker 2: us from the CEES event in Las Vegas.
Speaker 5: Time now for.
Speaker 4: More talking tech.
Speaker 2: First up global chips. They rose for the first time
Speaker 2: more than a year. Data from Semiconductor Industry Association sought.
Speaker 2: Worldwide revenue grew to forty eight billion dollars in November,
Speaker 2: a five point three percent increase from the year earlier. Now,
Speaker 2: the strong sales strength is the latest indication of a
Speaker 2: possible rebound in emerging tech I. Meanwhile, data analysis firm
Speaker 2: pallenteer It says they see huge demand in their new
Speaker 2: AI products from Israel ever since the start of their
Speaker 2: war with Hummas on October seventh. Now, Israel as acknowledged
Speaker 2: they've used AI based systems in an effort to aid
Speaker 2: operations in identifying targets and airstrikes. Plenteer is set to
Speaker 2: hold a board meeting in Tel Aviv for the first time.
Speaker 4: As a gesture of solidarity with Israel.
Speaker 2: Meanwhile, Israel's Competition Authority says it reached an agreement with
Speaker 2: Meta after the company failed to report to acquisitions and
Speaker 2: the social and media John is set to pay six
Speaker 2: post six five million dollars in fines relating to the
Speaker 2: purchases of Redkick in twenty eighteen and Service Front in
Speaker 2: twenty nineteen.
Speaker 4: And Amazon they're seeing some.
Speaker 2: Layoffs once again, this time the company slashing hundreds from
Speaker 2: its Prime Video and Studios unit, continuing the trend that
Speaker 2: well began in late twenty twenty two. And it's not
Speaker 2: just their twitch in particular, seeing hundreds of jobs on
Speaker 2: the line. Matt Day now joins us for more. And
Speaker 2: I mean, are we to be surprised by this that
Speaker 2: we're curtailing the area of production in particular.
Speaker 14: No, I don't think so, especially as you look around entertainment.
Speaker 14: Just a ton of pain right now in the streaming services,
Speaker 14: and folks kind of reassessing, you know, how many bodies
Speaker 14: are going to need for the demand for just the
Speaker 14: ton of streaming content out there. Amazon's studio's boss, Mike
Speaker 14: Hopkins mentioned they've planned discontinue you some things over the
Speaker 14: course these layoffs. They didn't specify what exactly those were,
Speaker 14: but really just the latest in what looks like cuts,
Speaker 14: you know, all over the place at Amazon that they
Speaker 14: petered out, not you know, tens of thousands of people
Speaker 14: the way it was a year ago.
Speaker 12: But it seems to be.
Speaker 2: Ongoing, and to be fair, I mean it's ongoing across
Speaker 2: production elsewhere. I mean, we've seen John Cops at Disney,
Speaker 2: We've seen people couldtail on their spending. Netflix is held,
Speaker 2: They're spending steady in terms of new content production. But
Speaker 2: what's interesting is that it comes at the same time
Speaker 2: as Amazon seems to be trying to right size Twitch
Speaker 2: as well. What does that say about Twitch's future?
Speaker 14: Twitch has always been a bit of a weird one
Speaker 14: for Amazon. Just a huge audience of people who you know,
Speaker 14: largely are watching video game streaming. But that's really hard
Speaker 14: to monetize, right They're very expensively beaming video content around
Speaker 14: the world, but it's not a not a great user
Speaker 14: base for ads. They tend to balk when suddenly see
Speaker 14: a role for Coke in the middle of a video
Speaker 14: game stream. So definitely the acknowledgment that Amazon, you know,
Speaker 14: just about ten years after buying Twitch, is still struggling
Speaker 14: to make the thing profitable.
Speaker 4: Do you think we are done? Is this just the future?
Speaker 4: Like some smaller rolling job cuts.
Speaker 3: It's really hard to say.
Speaker 14: I think one thing if you talk to Amazon employees,
Speaker 14: they'll point out is the company never said all clear,
Speaker 14: so to speak, after their big job cuts of two
Speaker 14: falls ago and last spring, and then they just they
Speaker 14: just keep stacking up in a notion of the two.
Speaker 14: This week, you know, they shut down AMP the music
Speaker 14: service podcast service rather of their live audio I suppose
Speaker 14: is the correct term. And more cuts on the devices
Speaker 14: group in Alexa last year as well, So they just
Speaker 14: kind of kind of keep coming. It sure looks like
Speaker 14: a drum beat for a company that for more than
Speaker 14: a decade didn't do that at all, and that's.
Speaker 4: Tough for morale.
Speaker 2: Matt Day, thank you so much for joining us on
Speaker 2: the latest out of Amazon. Meanwhile, look that does it
Speaker 2: for this edition of Bloomberg Technology. Do not forget to
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Speaker 4: This is bloombg Technology