WEBVTT - Disney's 1Q Earnings and Google Shares Tumble 0:00:13.200 --> 0:00:16.240 I'm Caroline Hyde, mugs Welda Carders in New York, med 0:00:16.320 --> 0:00:20.200 Ludlow in San Francisco. This is Bloomberg Technology, and boy 0:00:20.320 --> 0:00:22.680 do we have a lot to digested, a particularly on 0:00:22.720 --> 0:00:25.759 the Disney front. In his front and center, as company 0:00:25.840 --> 0:00:29.840 cuts seven thousand jobs and Disney Plus subscribers actually drop. 0:00:30.040 --> 0:00:33.120 We bring you full coverage throughout the hour and Google 0:00:33.120 --> 0:00:36.400 shares tumbling by the most in October as doubts rise 0:00:36.479 --> 0:00:39.839 over the accuracy of the search giants. AI technology will 0:00:39.840 --> 0:00:45.000 bring you the details, plus Hermes wins out versus Meta Perkins. 0:00:45.280 --> 0:00:48.600 We'll discuss the first ever trademark trial examining n f 0:00:48.680 --> 0:00:51.839 t s as the case tests the line between art 0:00:51.960 --> 0:00:55.120 and consumer products. All that and so much more coming up. 0:00:55.200 --> 0:00:58.040 One name that everyone wants to hear about is Disney 0:00:58.080 --> 0:01:01.480 Shares really accelerating their game means in after hours, not 0:01:01.680 --> 0:01:04.880 necessarily on the beat on the bottom line, but on 0:01:04.959 --> 0:01:07.560 what they had to say about going forward, targeting five 0:01:07.600 --> 0:01:11.120 point five billion dollars in cost reductions, cutting around seven 0:01:11.319 --> 0:01:15.120 thousand jobs, but reiterating that profit guidance for the direct 0:01:15.200 --> 0:01:18.400 consumer or streaming business in those are kind of the 0:01:18.440 --> 0:01:21.040 main takeaways as the stock push high. Let's go deeper 0:01:21.040 --> 0:01:23.840 on Disney and get reaction with rosscov A, co founder 0:01:23.880 --> 0:01:28.200 and CEO of Gerber Kawasaki Wealth Management, which overseas two 0:01:28.200 --> 0:01:31.399 point two billion dollars and holds Disney shares. Ross, what 0:01:31.480 --> 0:01:33.400 was the most important bit for you? What is it 0:01:33.440 --> 0:01:37.320 that you think driving these shares higher and after hours? Well, 0:01:37.360 --> 0:01:39.800 I think that they showed that their business is not 0:01:39.880 --> 0:01:43.720 only stable, but has the potential for a lot of growth. Actually, 0:01:44.080 --> 0:01:46.720 so when you actually look at the sublasses, let's say 0:01:46.720 --> 0:01:49.400 at Disney Plus, it was really at hot Star and 0:01:49.880 --> 0:01:53.480 in the Indian area part of their business hot Star, 0:01:53.920 --> 0:01:56.280 and it was really a minimal amount of people and 0:01:56.360 --> 0:01:59.760 the lowest cost subscribers. So when you actually look at Disney, 0:01:59.760 --> 0:02:02.600 plat sen their ability to hopefully make money off of 0:02:02.640 --> 0:02:05.480 this in the future and then the cost cuts, but 0:02:05.520 --> 0:02:09.480 then how strong the parks and resorts business continues to be. 0:02:10.240 --> 0:02:12.760 And with Iger back at the HELM, it really gives 0:02:12.800 --> 0:02:14.680 confidence that they can get the rest of their business 0:02:14.760 --> 0:02:17.200 is all working together at some point in the next 0:02:17.240 --> 0:02:20.480 twelve months and and really get some earnings momentum back. 0:02:20.560 --> 0:02:23.359 So so I love the report what I've seen so far, 0:02:23.400 --> 0:02:27.000 and I'm very confident about Disney's future, EPs b in 0:02:27.000 --> 0:02:29.600 the in the fiscal fourth quarter and then reiterating that 0:02:29.680 --> 0:02:33.960 guidance to hit profit in the DTC business by how 0:02:34.040 --> 0:02:36.600 much of you for you? Is that Iger doing this? 0:02:36.680 --> 0:02:40.639 The sort of short term effect of him coming back in, well, 0:02:40.639 --> 0:02:43.079 I think there there's a psychological effect, and then there's 0:02:43.120 --> 0:02:46.160 a real effect because the bottom line is Chapek was 0:02:46.160 --> 0:02:48.200 was a bad manager for Disney and didn't do a 0:02:48.200 --> 0:02:51.000 good job. And with Iger back at the helm Um, 0:02:51.320 --> 0:02:54.119 Disney is really driven by content and and it's something 0:02:54.200 --> 0:02:57.079 I think a lot of people forget that making great 0:02:57.120 --> 0:03:00.520 movies is what ultimately drives everything at Disney, whether it's 0:03:00.520 --> 0:03:03.520 consumer products, or the parks or or Disney Plus. And 0:03:03.560 --> 0:03:08.040 so Iger's focus on content in its relationships in Hollywood 0:03:08.320 --> 0:03:11.440 UM to get better content and to make better content 0:03:11.760 --> 0:03:15.480 really bodes well for Disney over the short and medium term. 0:03:15.720 --> 0:03:19.480 Longer term, can they square that circle of cost, custs 0:03:19.520 --> 0:03:23.520 and great production. How as the restructuring of the business 0:03:23.520 --> 0:03:26.359 and perhaps giving more power back to the creatives going 0:03:26.400 --> 0:03:30.040 to ensure they can have that balance. Well, I think 0:03:30.080 --> 0:03:32.480 this is a lot of businesses are dealing with this. 0:03:32.560 --> 0:03:35.080 Where they grew a lot of people over the last 0:03:35.120 --> 0:03:37.520 three or four years, and now everybody's trying to right 0:03:37.520 --> 0:03:41.760 size their businesses, especially the mega cap stocks like Disney 0:03:41.800 --> 0:03:45.160 and so I think having of you're going to see 0:03:45.200 --> 0:03:48.200 this in a lot of companies. Real cost conscious focus 0:03:48.800 --> 0:03:51.800 and making sure that all of their employees are contributing 0:03:51.800 --> 0:03:55.000 the amount necessary to get the results needed from a 0:03:55.000 --> 0:03:59.560 financial perspective is really important. But it's also predicated upon 0:03:59.760 --> 0:04:02.680 not hurting your own core business, and I think Iger 0:04:03.200 --> 0:04:05.920 is the person to implement that strategy for Disney and 0:04:05.920 --> 0:04:07.960 and that's why I think the markets like it. Yeah, 0:04:08.160 --> 0:04:11.920 currently looking at new toy stories, new frozens, my children 0:04:11.960 --> 0:04:14.720 will be thrilled. I'm looking also at what buy Biger 0:04:14.840 --> 0:04:16.960 has been saying on the call. Just take a little 0:04:17.000 --> 0:04:22.760 listen to what he's saying. In terms of curation, we 0:04:22.800 --> 0:04:27.799 will aggressively curate our general entertainment content. We will reassess 0:04:28.000 --> 0:04:30.800 all markets we have launched in and also determine the 0:04:30.880 --> 0:04:35.040 right balance between global and local content. Will adjust our 0:04:35.160 --> 0:04:41.640 pricing strategy, including a full examination of our promotional strategies. Russ, 0:04:41.680 --> 0:04:45.640 you reminded us of how big Disney Plus or generally 0:04:45.720 --> 0:04:49.240 DTC is in India. Just how much of a focus 0:04:49.320 --> 0:04:51.840 does Disney need internationally at the moment, because we can 0:04:51.880 --> 0:04:55.559 get very myopic about what's happening here in the United States. Yeah, 0:04:55.600 --> 0:04:58.679 So it's it's really interesting because you know, Netflix, for example, 0:04:58.839 --> 0:05:00.560 is a global business and you look of the content 0:05:00.600 --> 0:05:03.279 today and you're getting content from like all over the place, 0:05:03.320 --> 0:05:05.840 and a lot of it's really good and they've been 0:05:05.880 --> 0:05:08.640 doing really well with subtitles, and I think Disney needs 0:05:08.680 --> 0:05:11.839 to do the same thing. And especially India is a 0:05:11.920 --> 0:05:15.000 huge market for Disney plus hot Star, and it's a 0:05:15.120 --> 0:05:20.320 very you know, deep movie focused UM consumer there. So 0:05:20.680 --> 0:05:23.600 you know, we've got to make content that really serves 0:05:23.680 --> 0:05:27.640 the different audiences UM that are are paying for Disney. 0:05:27.680 --> 0:05:29.080 But we also have to do it in a way 0:05:29.120 --> 0:05:31.839 that makes economic sense as well. And I think that 0:05:32.279 --> 0:05:36.560 is a real challenge that streamers face on an international level. UM. 0:05:36.600 --> 0:05:41.159 But for Disney's UM core UM movie and and production, 0:05:41.520 --> 0:05:45.480 most people around the world like that content, Americans and 0:05:45.520 --> 0:05:49.000 everyone else. So Disney has a great position to leverage 0:05:49.040 --> 0:05:52.760 their content in every market. Russ Well, this news plaque 0:05:52.760 --> 0:05:55.680 hates Pelts. Well, he stepped back from what he's trying 0:05:55.680 --> 0:05:59.240 to do. Well, I think Pelts is misguided, and I 0:05:59.279 --> 0:06:03.840 wish him well, but he's attacking the wrong people and 0:06:03.880 --> 0:06:07.960 he's wrong about his basic premise of what's he's He's 0:06:08.000 --> 0:06:09.800 has Disneys in crisis, and I'm like, what are you 0:06:09.800 --> 0:06:12.040 talking about? Disney is about to take off. I don't 0:06:12.080 --> 0:06:13.640 think he has the skill sets that he would add 0:06:13.680 --> 0:06:16.520 anything to the Disney board. And and I think he's 0:06:16.560 --> 0:06:19.479 going to make money anyways owning Disney, and we're long 0:06:19.480 --> 0:06:21.720 Disney and my fun g K as well as at 0:06:21.760 --> 0:06:25.560 my firm, and it's a top holding. But having I 0:06:25.760 --> 0:06:29.920 go back and the team that they have um at Disney, Uh, 0:06:30.000 --> 0:06:32.840 this is the ideal situation. And and I don't think 0:06:32.839 --> 0:06:35.560 breaking up the business like spinning off ESPN makes any sense. 0:06:35.560 --> 0:06:38.320 I love the sports business, So you know, I think 0:06:39.040 --> 0:06:41.240 Tiger is the right person to do this, and Pelts 0:06:41.320 --> 0:06:43.880 is barking up the wrong tree. We wait for that 0:06:43.920 --> 0:06:46.720 share price recovery to follow suit. Then still fully four 0:06:46.760 --> 0:06:50.160 percent off as highs, but there's an optimistic Rosco over there. 0:06:50.160 --> 0:06:52.960 We thank you co Fouan Racio gober Kawasaki Wealth and 0:06:53.120 --> 0:06:57.040 Investment Management. Meanwhile, let's talk about the competitor Netflix, because 0:06:57.120 --> 0:06:59.840 today said it's rolling out it's paid sharing feature to 0:07:00.040 --> 0:07:03.600 for new markets and the streaming services, announcing that Canada, 0:07:03.720 --> 0:07:06.799 New Zealand, Portugal and Spain can now add an extra 0:07:06.839 --> 0:07:10.000 member account for up to two people that they don't 0:07:10.040 --> 0:07:13.000 live with at a cost though, and that's of course, 0:07:13.040 --> 0:07:15.800 as it looks to stamp out password sharing outside of 0:07:15.840 --> 0:07:18.960 the household. Netflix has not yet rolled out paid sharing 0:07:19.000 --> 0:07:20.960 here in the United States, but is expected to do 0:07:21.040 --> 0:07:24.200 so by the end of the first quarter. Read Yeah, 0:07:24.560 --> 0:07:26.760 I think that's a really specific micro look. Let's get 0:07:26.760 --> 0:07:29.080 back though and talk a bit more macros. Carry said 0:07:29.080 --> 0:07:31.360 earlier in the show. When it comes to tech, you know, 0:07:31.400 --> 0:07:33.920 a down day, but we're giving back what's been a 0:07:33.920 --> 0:07:35.840 pretty long run of gains. So let's look at the 0:07:35.920 --> 0:07:39.840 historic performance and bring in Fidelity Director of Quantitative Market 0:07:39.920 --> 0:07:44.320 Strategy Denise Chisholm, who's been tracking this historical database going 0:07:44.400 --> 0:07:47.920 back to the nineties sixties. Her research informs the firm 0:07:48.000 --> 0:07:51.760 strategy across its portfolios, and of course Fidelity Asset has 0:07:51.800 --> 0:07:55.920 more than three point six trillion dollars in assets under management. 0:07:55.920 --> 0:07:59.760 It's really interesting, Denise, to to kind of sit here 0:07:59.760 --> 0:08:01.720 with Airline. Each day we go through the blow by 0:08:01.720 --> 0:08:04.240 blow of the markets, what's driving the narrative on any 0:08:04.280 --> 0:08:07.000 given day. But even if you go back to just 0:08:07.040 --> 0:08:09.360 the start of the year, we've gone from this position 0:08:09.360 --> 0:08:12.600 of kind of worse to first the technology sector. Yet 0:08:12.640 --> 0:08:16.040 some of the fundamentals don't really back that up. Yeah, well, 0:08:16.080 --> 0:08:19.120 that often happens, especially you can see it through history 0:08:19.120 --> 0:08:22.960 where stocks follow earnings a lot of the time, but 0:08:23.080 --> 0:08:25.160 not all of the time, and a lot of cyclical 0:08:25.240 --> 0:08:29.200 sectors can discount bad news in advance. And I think 0:08:29.240 --> 0:08:32.680 that this is what you're starting to see in technology now. 0:08:32.720 --> 0:08:37.160 What we saw last year, essentially downside leadership was really 0:08:37.200 --> 0:08:40.640 not just the rationale behind the fact that interest rates 0:08:40.640 --> 0:08:43.280 went up, inflation went up a hawkish, a more hawker 0:08:43.320 --> 0:08:46.640 shederal reserve. It was also your starting point on relative 0:08:46.720 --> 0:08:51.160 valuation so versus the overall market, technology was really in 0:08:51.200 --> 0:08:53.920 the top quartile of its history, since we haven't seen 0:08:53.960 --> 0:08:57.480 anything like that back till two thousand and five, and 0:08:57.720 --> 0:09:01.199 that was really one of the key, you know, down 0:09:01.320 --> 0:09:04.640 to the key catalysts for the correction that we've seen 0:09:04.720 --> 0:09:07.440 last year. A lot of that valuation on a relative 0:09:07.440 --> 0:09:09.680 basis has been worked off and left in this sort 0:09:09.679 --> 0:09:13.240 of muddy middle zone where technology is not the dominant 0:09:13.240 --> 0:09:15.840 sector that we've seen over the last decade, which were 0:09:15.960 --> 0:09:19.120 very supportive on relative free cash flow. But it's also 0:09:19.240 --> 0:09:23.600 not in that very very expensive land versus the market either. Okay, 0:09:23.720 --> 0:09:27.439 so what when it is relative where then gives up? 0:09:27.480 --> 0:09:29.720 Do we need to see the rest of the market 0:09:29.960 --> 0:09:33.439 and by that we mean basically not the growth stocks 0:09:33.480 --> 0:09:35.880 but more of your energy names. And when we tried 0:09:36.080 --> 0:09:39.240 entrusted value companies to get a high evaluation, or do 0:09:39.280 --> 0:09:42.559 we need more pain to come in technology valuations? I 0:09:42.600 --> 0:09:44.240 think that there's a lot of different ways that you 0:09:44.280 --> 0:09:47.319 can work it off. You could also have a positive catalyst, 0:09:47.480 --> 0:09:51.119 meaning that the downside in margins is less than investors 0:09:51.160 --> 0:09:54.720 actually expect. And one of the catalysts historically is something 0:09:54.720 --> 0:09:58.760 that investors might be missing out on now, which is disinflation. 0:09:59.160 --> 0:10:03.520 When inflation and decelerates, what you usually have is margins 0:10:03.600 --> 0:10:06.600 better than expectations. This is true in the overall working 0:10:06.679 --> 0:10:09.160 this is also true in technology. That's one of the 0:10:09.200 --> 0:10:13.480 reasons why you hear people say in a high inflationary environment, 0:10:13.600 --> 0:10:17.360 usually earnings recessions are less bad. It's not necessarily that 0:10:17.440 --> 0:10:20.760 inflation is good for margins, but it's because inflation is 0:10:20.840 --> 0:10:24.240 high and can decelerate that can provide a tail when 0:10:24.360 --> 0:10:28.200 for margins that isn't typical and the rest the rest 0:10:28.200 --> 0:10:31.720 of history. Let's just talk. It's interesting. We've been talking 0:10:32.600 --> 0:10:35.800 to those that manage certain stock exchanges and we understand 0:10:35.800 --> 0:10:37.840 that perhaps not many I p O is becoming thick 0:10:37.840 --> 0:10:40.000 and fast or exits in the world of technology, but 0:10:40.600 --> 0:10:43.920 maybe performances there from some of these key companies. And 0:10:43.960 --> 0:10:46.000 we spoke to a deed of Freedman Nichals and just 0:10:46.040 --> 0:10:49.920 taking listen to what she had said about her optimism. 0:10:49.960 --> 0:10:52.720 I think that the big technology companies are have huge 0:10:52.720 --> 0:10:55.000 opportunities in front of them. I think that they're leaning 0:10:55.400 --> 0:10:57.240 in as hard as they can. I think that they 0:10:57.280 --> 0:11:00.520 also are bringing the entire economy forward. So I'm a 0:11:00.559 --> 0:11:04.520 big believer in tech and big tech. So clearly, well, 0:11:04.559 --> 0:11:06.280 I'm sure it's a job which is ever seeing the 0:11:06.280 --> 0:11:09.359 ANSDAC to be a big believer in big tech. But ultimately, 0:11:09.720 --> 0:11:12.800 Denay's what about is the international big tech that you 0:11:12.800 --> 0:11:14.320 want to see out perform or do you think you 0:11:14.320 --> 0:11:16.920 can be domestically focused. I'm interested on what you think 0:11:17.000 --> 0:11:18.679 as to whether dollar is going to be a driver 0:11:18.840 --> 0:11:21.520 or not go for it. I do think that you 0:11:21.559 --> 0:11:23.920 want to be domestically focused, and it's in part because 0:11:23.920 --> 0:11:27.320 of the dollar, but it's in part because, as you know, 0:11:27.679 --> 0:11:30.559 we just heard, they're better companies. When I hear a 0:11:30.600 --> 0:11:32.920 lot of comparisons going back to the dot com era, 0:11:33.040 --> 0:11:35.640 what's really important for investors to understand is during that 0:11:35.720 --> 0:11:39.080 time before the recession even hit, net margins were negative. 0:11:39.600 --> 0:11:43.079 So not only our net margins positive even after the contraction, 0:11:43.160 --> 0:11:46.120 but there's still at the highest levels they've been since 0:11:46.160 --> 0:11:48.839 the nineteen sixties and my data set, so these are 0:11:48.960 --> 0:11:53.000 much much better companies and that secular trend is dominant 0:11:53.040 --> 0:11:56.280 in the US, so each cycle they've made more and 0:11:56.360 --> 0:11:59.240 more profit for cash flow, and I expect that that 0:11:59.360 --> 0:12:03.920 trend will greet convenience. Fidelity Director of Quantitative Market Strategy, 0:12:03.960 --> 0:12:07.240 Denise Chisum, a data cruncher chart watcher. Thank you for 0:12:07.360 --> 0:12:09.240 going with my chart. If you didn't like it, I 0:12:09.280 --> 0:12:11.920 was going to blame John Author's, our markets editor, who 0:12:11.960 --> 0:12:13.760 I borrowed it from, but I think it was a hit, 0:12:13.800 --> 0:12:15.640 so we'll have you back on. Thank you very much 0:12:16.040 --> 0:12:19.920 for your time. Now coming up, Google's AI ambitions facing 0:12:19.960 --> 0:12:23.560 hurdles as concerns rise over its accuracy. Will bring you 0:12:23.720 --> 0:12:26.560 the details next. And another stock we're watching Carriers. We 0:12:26.600 --> 0:12:30.680 had to break robin hood shares, interesting fourth quarter net sales, 0:12:31.120 --> 0:12:34.680 missing some interesting financials, and yet here we are five 0:12:34.679 --> 0:12:37.040 percent higher and after hours. The big takeaway from me 0:12:37.120 --> 0:12:38.760 has got to be how the co found as are 0:12:38.760 --> 0:12:43.400 counseling what half a billion each of their share share 0:12:43.400 --> 0:12:46.840 based compensation, so clearly feeling that they have to pull 0:12:46.920 --> 0:12:49.439 back in terms of their own winds through this stock 0:12:49.480 --> 0:12:51.600 at the moment as they are still trying to right 0:12:51.720 --> 0:12:55.160 size this business overall, still losing a little bit in 0:12:55.240 --> 0:12:57.520 terms of a net lost a hundred and sixty six million. 0:12:58.040 --> 0:12:59.839 Given eye on all of these movers for you. Ed 0:13:00.160 --> 0:13:13.319 from New York for San Francisco, visit Broomberg. It's early days, 0:13:13.360 --> 0:13:16.240 but Google's Bard has already hit a snack Shares a 0:13:16.320 --> 0:13:20.199 parent alphabet sank Wednesday after reports that a video posted 0:13:20.240 --> 0:13:25.559 two days earlier demonstrating Bard's AI powered search had an inaccuracy. 0:13:25.679 --> 0:13:28.480 In the clip posted by Google, Bard is ask what 0:13:28.720 --> 0:13:31.760 new discoveries from the James Webb Space telescope can I 0:13:31.800 --> 0:13:34.760 tell my nine year old about? In response, it says 0:13:35.040 --> 0:13:39.360 JWST took the very first pictures of a planet outside 0:13:39.360 --> 0:13:42.400 of our own solar system, but that's not true. The 0:13:42.440 --> 0:13:44.720 first pick taking of a planet outside of our solar 0:13:44.760 --> 0:13:47.640 system was taken by the very large telescope array in 0:13:47.720 --> 0:13:50.560 Chile in two thousand four. Web was deployed at the 0:13:50.600 --> 0:13:53.439 end of one It is a setback for Google's challenge 0:13:53.480 --> 0:13:56.320 to Microsoft's work with open ai using the tech behind 0:13:56.360 --> 0:13:59.960 chat GPT to improve bing. Google's told me in a state, 0:14:00.120 --> 0:14:03.400 then this highlights the importance of rigorous testing, which you 0:14:03.520 --> 0:14:07.560 will start this week. Will also take on external feedback. 0:14:08.200 --> 0:14:10.559 I mean the external feedback I was talking about is 0:14:10.559 --> 0:14:13.200 probably the market reaction right shares falling by the most 0:14:13.200 --> 0:14:15.720 since October. But there's kind of two key things, like 0:14:16.080 --> 0:14:18.400 this video came out on Monday and it took two 0:14:18.520 --> 0:14:22.120 days for journalists and the market to notice. But also, 0:14:22.520 --> 0:14:24.600 I mean, Alphabet and Google have always said this is 0:14:24.720 --> 0:14:29.720 experimental right now, but the market's impatient. They're impatient, and 0:14:29.760 --> 0:14:32.680 it's funny that they let open ai own the fact 0:14:32.720 --> 0:14:35.960 that we're likely to see a lot of problems and inaccuracies. 0:14:36.000 --> 0:14:39.280 But Google always has a victim of its own success. 0:14:39.520 --> 0:14:41.800 It's the big brand. It doesn't want a front run 0:14:41.880 --> 0:14:44.400 and and go too quickly. It's interesting when we asked 0:14:44.400 --> 0:14:46.960 our own audience said when will Generator A I be 0:14:47.120 --> 0:14:49.360 fully accurate? I thought most of actually say three to 0:14:49.440 --> 0:14:52.840 six months, because there's my own impatience, But actually most 0:14:52.880 --> 0:14:54.640 people are more sensible and they say, look, give it 0:14:54.680 --> 0:14:57.240 five to ten years. We've got to let them chew 0:14:57.240 --> 0:15:01.160 the data and get the accuracies out there. It sir, well, 0:15:01.240 --> 0:15:03.400 let's just get more details and bringing Bloomberg's Dave the 0:15:03.400 --> 0:15:05.320 album because I've been working with Davy on this all 0:15:05.400 --> 0:15:08.360 day long. Davy, we went over the basics of the story, 0:15:08.880 --> 0:15:12.840 around the answer, around the telescope. But I guess let's 0:15:12.880 --> 0:15:16.240 start with what does this mean right now? For Alphabet 0:15:16.240 --> 0:15:19.320 and Google. What's their response been to what's been a 0:15:19.320 --> 0:15:24.880 pretty nuts market day and some skepticism around bard. Yeah, 0:15:24.920 --> 0:15:28.000 I mean I think Google's response has been Look, this 0:15:28.200 --> 0:15:32.280 is still in sort of testing mode right now. It's 0:15:32.280 --> 0:15:35.800 only open to a few trusted testers UM that have 0:15:35.960 --> 0:15:40.520 access with the company, and it's still ironing out the kinks. 0:15:40.600 --> 0:15:45.160 You know. UM We've done some reporting that this is 0:15:45.200 --> 0:15:49.120 just not something that UM seems ready for prime time 0:15:49.200 --> 0:15:51.760 quite yet, which is why they're keeping it sort of 0:15:52.440 --> 0:15:56.600 under wraps um to the wider public at least for now. 0:15:56.880 --> 0:15:59.520 And sort of the irony and all of this is 0:15:59.800 --> 0:16:03.640 the reason perhaps open ai stole the oxygen in November 0:16:03.760 --> 0:16:06.360 and ran and able to sort of leave what it 0:16:06.360 --> 0:16:08.400 felt like Google for dust for a bit, was because 0:16:08.400 --> 0:16:11.440 Google realized the pr headache it might have if it 0:16:11.680 --> 0:16:13.480 puts something into the open and it got it a 0:16:13.560 --> 0:16:16.920 bit wrong. The brand impact is far bigger. But now 0:16:17.280 --> 0:16:19.400 do you think the code read that they pulled is 0:16:19.440 --> 0:16:21.280 going to have to be still pulled and they're going 0:16:21.360 --> 0:16:25.280 to have to keep iterating in public. Yeah, I think 0:16:25.320 --> 0:16:28.280 to some extent the market pressures are something that they 0:16:28.280 --> 0:16:31.880 can't ignore anymore. At this point. Um, you know, there's 0:16:31.880 --> 0:16:35.520 a huge threat from open ai, and uh, you know, 0:16:35.560 --> 0:16:38.840 in the last day we found that it's not just 0:16:38.960 --> 0:16:42.080 you know, sort of the chat GPT, but they're integrating. 0:16:42.400 --> 0:16:47.360 Microsoft is integrating a cousin of chat GPT into its 0:16:47.840 --> 0:16:51.480 search as well, so Microsoft Bing and its edge browser, 0:16:52.080 --> 0:16:56.200 and so this is already hitting at Google's core business 0:16:56.360 --> 0:17:00.480 search and they have to respond. So this is what 0:17:00.480 --> 0:17:04.320 what they're doing. The timing of this day is strange 0:17:04.960 --> 0:17:07.679 UM partly because this video was published two days ago, right, 0:17:07.680 --> 0:17:11.440 but there was also this big event in Paris today. 0:17:11.560 --> 0:17:14.479 What do we actually learn about the strategy from Google 0:17:14.560 --> 0:17:18.840 around AI? From that event? It seems like Google is 0:17:18.880 --> 0:17:23.200 being very careful about rolling this out. So the event 0:17:23.400 --> 0:17:26.320 sort of gave a little bit more by way of 0:17:26.359 --> 0:17:31.040 demonstrations and examples of BARD. Uh. You know, we we 0:17:31.119 --> 0:17:36.520 saw it UM sort of showing what constellations you can 0:17:36.520 --> 0:17:39.879 look for in the sky for instance, or just like 0:17:40.000 --> 0:17:46.920 advice UM on very low stakes situations. So right now, 0:17:47.400 --> 0:17:50.840 BARD isn't a place where it can't give something like 0:17:51.000 --> 0:17:55.960 medical or legal advice responsibly. And Google is really sort 0:17:55.960 --> 0:18:01.359 of clamping down on the examples that it is willing 0:18:01.400 --> 0:18:05.000 to show publicly. I think, you know, the key point 0:18:05.119 --> 0:18:10.000 for people to understand is that this these large language models, 0:18:10.040 --> 0:18:16.040 they're not really good for um consistently true statements. They 0:18:16.200 --> 0:18:21.919 only spit out statistically consistent statements, so phrases that appear together. 0:18:22.160 --> 0:18:25.520 And so that's kind of where we're at right now. Davy, 0:18:25.680 --> 0:18:34.280 you break it down beautifully. Thank you. Davey alba Omas 0:18:34.720 --> 0:18:37.800 has won a lawsuit it filed against the digital artists 0:18:37.800 --> 0:18:40.320 behind meta broke in n f T s. That's after 0:18:40.400 --> 0:18:43.040 convincing a Manhattan federal jury that the sale of the 0:18:43.080 --> 0:18:47.639 non functual tokens violated earners as rights to the broken trademark. 0:18:47.880 --> 0:18:50.040 Now the announcement could be a bit of a setback 0:18:50.080 --> 0:18:51.879 for the n f T industry. Is the case tested 0:18:51.920 --> 0:18:55.960 the blurry line between our or consumer products And ultimately 0:18:56.280 --> 0:18:59.879 this is all about a company trying to understand really 0:19:00.000 --> 0:19:02.520 who wins out digital artistry in the first Amendment, not 0:19:02.680 --> 0:19:14.359 so as manages to win out in this case. Welcome 0:19:14.400 --> 0:19:16.520 back to Bloomberg Technology. I'm Caroline hard in New York 0:19:16.880 --> 0:19:19.919 and i'md Lovelow in San Francisco and ad Uber shares today, 0:19:20.000 --> 0:19:23.000 who up as much as seven percent earlier after reporting 0:19:23.040 --> 0:19:28.000 revenue climbing and up meat amass estimates. How has Uber 0:19:28.040 --> 0:19:31.800 been able to define in fraation fees while the CEO Darcosa, 0:19:31.920 --> 0:19:37.120 he talked all about it with Bloomberg earlier. Well, for us, 0:19:37.160 --> 0:19:39.400 what we're seeing is while there has been a downturn 0:19:39.440 --> 0:19:42.880 in terms of companies meet being more conservative in terms 0:19:42.920 --> 0:19:48.080 of their spend, the consumer is staying strong. Consumers spend 0:19:48.960 --> 0:19:52.439 continues to be strong. And also we're benefiting from a 0:19:52.520 --> 0:19:56.000 shift of consumers spent from retail buying stuff when you're 0:19:56.040 --> 0:20:02.440 home to actually spend on services, going out to restaurants, traveling, etcetera. 0:20:02.520 --> 0:20:06.000 So Uber is absolutely benefiting from that, and that's why 0:20:06.040 --> 0:20:11.080 you've seen growth, bookings growth of on a constant currency basis, 0:20:11.160 --> 0:20:15.359 with the mobility business growing at record rates, getting to 0:20:15.480 --> 0:20:19.240 record levels, and delivery continuing to be strong as well. 0:20:19.720 --> 0:20:22.199 So as long as the consumers say strong, I think 0:20:22.359 --> 0:20:25.760 Uber will continue to add on top of that the 0:20:25.800 --> 0:20:28.600 power of our platform, are being the number one brand 0:20:28.640 --> 0:20:31.359 of the business and are having the strongest tech team 0:20:31.640 --> 0:20:34.760 out there. It adds up to pretty good progress for us, 0:20:35.119 --> 0:20:38.080 and the indications that we gave going forward are of 0:20:38.160 --> 0:20:43.040 continued strengthree is off to a really great start. That's 0:20:43.040 --> 0:20:45.119 at j Pal said. Inflation is going to take a 0:20:45.119 --> 0:20:48.520 significant time to fight, no uncertain terms. What about when 0:20:48.520 --> 0:20:52.080 prices catch up with consumers? What are you dar cause 0:20:52.160 --> 0:20:54.040 with Shaw he worried about when it comes to the 0:20:54.119 --> 0:20:58.680 bumpy parts of the road ahead. Well, we saw prices 0:20:59.480 --> 0:21:03.320 increase last year for Uber pretty significantly, but we're seeing 0:21:03.520 --> 0:21:07.160 the price increases modulate pretty significantly as we get into 0:21:08.440 --> 0:21:10.840 our surge levels are down. So in the US, for example, 0:21:10.960 --> 0:21:15.560 less than of our trips are surging. Our E t 0:21:15.760 --> 0:21:19.359 A s are much faster now, faster than five minutes 0:21:19.400 --> 0:21:22.080 on average in in the U S as well, So 0:21:22.400 --> 0:21:25.679 we have to keep working to improve our service. And 0:21:25.720 --> 0:21:28.600 when we look at inflation, about seventy of our drivers 0:21:28.600 --> 0:21:31.600 are seeing that inflation is playing a factor in terms 0:21:31.640 --> 0:21:35.440 of their coming to earn money on the Uber platform. 0:21:35.560 --> 0:21:39.080 So some ways inflation maybe a tail wind to our supply. 0:21:39.600 --> 0:21:44.000 Better supply means less surge and lower prices for US. Now, 0:21:44.200 --> 0:21:48.040 Uber hasn't had widespread layoffs like some of your counterparts. 0:21:48.040 --> 0:21:51.360 I'm thinking door Dash at this point, would you promise 0:21:51.680 --> 0:21:55.520 that doesn't happen. Well, running a company, you can make 0:21:55.520 --> 0:21:58.399 promises like that, right. We run the company based on 0:21:58.480 --> 0:22:01.040 our performance, as you in this quarter and what we 0:22:01.080 --> 0:22:05.280 indicated for quarters going forward. Our performance has been really robust, 0:22:05.400 --> 0:22:07.560 and we think you will continue to be a robust. 0:22:09.520 --> 0:22:12.640 That was Uber CEO Dara Kostra Shah. He let's continue 0:22:12.640 --> 0:22:15.560 the conversation. D A. Davidson and Co. Senior research analyst 0:22:15.760 --> 0:22:18.080 Tom White joins us with more. Tommy got a by 0:22:18.200 --> 0:22:21.080 rating sixty dude on a price target it was interesting 0:22:21.119 --> 0:22:23.159 to see the upside on the bottom line, you know, 0:22:23.200 --> 0:22:26.520 a nice ebit dar beat. But they also talked about 0:22:26.520 --> 0:22:28.920 how they're kind of doing less on the incentive side 0:22:28.960 --> 0:22:31.639 for drivers. Are they getting the mix right now or 0:22:31.720 --> 0:22:35.959 is this just about improving macro conditions. Yeah, first off, 0:22:36.000 --> 0:22:38.560 thank thanks for having me. You know, the quarter was 0:22:38.600 --> 0:22:42.040 really nice, um solid upside on both the top and 0:22:42.080 --> 0:22:46.159 bottom line, and specifically in both the mobility segment and 0:22:46.280 --> 0:22:50.120 the delivery segment. The first quarter guidance was also very 0:22:50.160 --> 0:22:55.320 strong and positive, um, you know, particularly on ebitda uh this. 0:22:55.520 --> 0:22:57.000 You know, if if they put up the number in 0:22:57.000 --> 0:22:58.960 the first quarter that we think they can, you know, 0:22:58.960 --> 0:23:01.600