Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hyde and Ed Lovelow.
Speaker 2: Live from New York. I'm Caroline Hyde.
Speaker 3: And I'm Mike Sheppard in Washington. This is Bloomberg Technology
Speaker 3: coming up.
Speaker 4: Tech CEO's flock to the inauguration of Donald Trump in Washington.
Speaker 4: Plus President Trump gives a temporary reprieve to TikTok, granting
Speaker 4: a seventy five day delay from a US ban. And
Speaker 4: live from the World Economic Forum in Davos. We'll hear
Speaker 4: from Bag of America Ceo'brian Wynihan later this hour, but
Speaker 4: first we check in on these markets.
Speaker 2: Look some anxiety.
Speaker 4: Being shaken off as we see President Trump take office,
Speaker 4: then as that pushing up, and indeed the NASAK one
Speaker 4: hundred up about a tenth of a percent as many
Speaker 4: looked perhaps the economic potential of this next administration. However,
Speaker 4: on the downside hasn't been some key names. Bitcoin is
Speaker 4: at one point three percent one hundred and three thousand
Speaker 4: absolutely took off ahead of the inauguration. We'll get into
Speaker 4: some of those mun coins in a moment, but let's
Speaker 4: move on to some of the individual points drags or
Speaker 4: indeed Apple being the key one. I want to focus
Speaker 4: in on TSMC for a moment though. We're at one
Speaker 4: point nine percent on its ADRs. This is its restored operations,
Speaker 4: that factories it evacuated after a six point four magnitude
Speaker 4: earthquake struck at the island's south look at injured four people,
Speaker 4: key chip maker.
Speaker 2: Fabricator, to Nvidia and indeed to Apple. But Apple being drag.
Speaker 4: Lower the worst day we've seen since September of last year,
Speaker 4: in fact, three point eight percent lower.
Speaker 2: Why this is yet more downgrades.
Speaker 4: Coming from Jeffrey's, coming from Luke Capital analyst worrying about
Speaker 4: sales of the iPhone and in particular Chinese weakness. Look,
Speaker 4: this is going to be top of mind for Tim Cook,
Speaker 4: who yesterday was one of the who's who are.
Speaker 5: The world's wealthiest people in hech elite surrounding President Donald
Speaker 5: Trump as he took the oath of office, all gathering
Speaker 5: and combined get this, Mike net Worth exceeding one point
Speaker 5: three trillion dollars for the occasion, all sprinkled in among
Speaker 5: Trump's own family.
Speaker 3: They were not just sprinkled in, they were seated ahead
Speaker 3: of Trump's incoming cabinet. It was striking to see how
Speaker 3: prominently Elon Musk and others were occupying that space in
Speaker 3: such a moment, and it really signals how much tech
Speaker 3: has arrived with this new administration. And really something else
Speaker 3: of note from yesterday was President Donald Trump scrapping the
Speaker 3: Biden administration sweeping executive order regulating artificial intelligence. Let's bring
Speaker 3: in Bloomberg's balance of how our co host Kelley Lines
Speaker 3: to discuss this. Kelly, thanks for joining us and for
Speaker 3: all the great reporting yesterday on the inauguration. Trump started
Speaker 3: this with some shock and awe on the regulatory front.
Speaker 3: Talk about the direction of travel that we see in
Speaker 3: undoing this AI order.
Speaker 6: Well, the direction of travel certainly is fast. Trump yesterday
Speaker 6: sent a modern day record for a number of executive
Speaker 6: orders in one day. There were twenty six plus four
Speaker 6: presidential memoranda, and of course as part of that, he
Speaker 6: rescinded seventy eight executive actions from President Biden. The executive
Speaker 6: action regulating AI. The sweeping order was one that was
Speaker 6: part of it. This, of course, during the Biden administration,
Speaker 6: was intended to create safety and transparency guidelines around companies
Speaker 6: developing this technology. It also created the AI Safety Institute
Speaker 6: under the Department of Commerce that was essentially setting voluntary
Speaker 6: guidelines for how the development of this technology should work.
Speaker 2: And now that goes away.
Speaker 6: The thing is the President, while repealing this, did not
Speaker 6: say what is going to be replacing it, leaving a
Speaker 6: bit of a question mark. Certainly, we could expect David Zachs,
Speaker 6: the venture capitalist who is now the AI cryptos are
Speaker 6: in this White House, could be playing a role in
Speaker 6: what happens next. But it also could speak to buy
Speaker 6: and large a kind of hands off regulatory approach this
Speaker 6: administration seems to take. And certainly that was a message
Speaker 6: frequently by Donald Trump yesternight and throughout the campaign.
Speaker 4: And let's just talk about someone who's key to AI's
Speaker 4: future is Elo Musk. And indeed it feels as though
Speaker 4: he's been cementing his power over the last couple of
Speaker 4: days as well well.
Speaker 6: Absolutely, in fact, it is now solidified through one of
Speaker 6: these executive orders, Caroline, that he will be leading this
Speaker 6: Department of Government efficiency, and he will be doing so
Speaker 6: by himself, as the person who was intended to be
Speaker 6: his co head of vag Ramaswami is bowing out to
Speaker 6: instead run for governor of Ohio in twenty twenty six.
Speaker 6: There's been some reporting that there was a bit of
Speaker 6: consternation between Ramaswami and mar A Lago that may have
Speaker 6: played a factor, But it does clear the road for
Speaker 6: Elon Musk to essentially have the greatest degree of control
Speaker 6: over this agency, which will actually be part of the
Speaker 6: federal government. That was not the intent originally outlined by
Speaker 6: Donald Trump back in November, but through the EO yesterday,
Speaker 6: he made this part of the Executive Office of the President.
Speaker 6: Through an executive order that will rename the US Digital Service,
Speaker 6: something that was created during the Obama administration back in
Speaker 6: twenty thirteen, to the United States Dode Service. That means
Speaker 6: Elon Musk is getting an actual White House email address
Speaker 6: space in the eisenhow Our office building. It raises some
Speaker 6: ethics concerns given Elon Musk, of course, and his companies
Speaker 6: do contract with the United States government, and already this
Speaker 6: is drawing lawsuits Caroline, including from the largest union representing
Speaker 6: federal workers, saying that the Office Budget and Management Management
Speaker 6: Budget and the White House here are violating different rules
Speaker 6: that are supposed to govern this. But certainly Elon Musk
Speaker 6: is going to have a close year of the president
Speaker 6: as this administration gets going.
Speaker 4: A controversial weekend for Edol Musk, which we'll get to
Speaker 4: a little bit later in the show.
Speaker 2: But Blue most Kaylee lines spectacular, thank you for joining us.
Speaker 4: Meanwhile, TikTok Whiplash Fight Dances US services were restored after
Speaker 4: Donald Trump acted to delay the band by seventy five days,
Speaker 4: proposing a US China joint venture, though it's unclear if
Speaker 4: the APPS Chinese parent can or even wants to secure
Speaker 4: a US backer. Not to mention if this is enough
Speaker 4: to appease Congress's national security concerns, Well, let's bring in
Speaker 4: a US representative, Jake Olkinlass from Massachusetts. Now, you served
Speaker 4: on the House China Select Committee last Congress, and we're
Speaker 4: original co lead to the TikTok divestment legislation. So I
Speaker 4: ask you this, what do you make of the extension?
Speaker 7: The extension appears to be illegal. The law allows for
Speaker 7: one ninety day extension if the President can demonstrate that
Speaker 7: a sale is underway and there needs to be more
Speaker 7: time for the negotiations. In the administration, that is not
Speaker 7: what's happened here. What's happened here is Trump has just
Speaker 7: declared seventy five days of a free pass for TikTok,
Speaker 7: and there does not seem to be any statutory support
Speaker 7: for that. This is an example of how the social
Speaker 7: media corporations have really come to plunder the American town square.
Speaker 7: There's an old saying in tech that if you're not paying,
Speaker 7: you're the product. Well, big tech has productized Americans attention
Speaker 7: spans and our social lives for the last fifteen years,
Speaker 7: and both parties have failed to rain them in. And
Speaker 7: now TikTok. Excuse me, now, Trump is not only inviting
Speaker 7: American corporate abuse of the town square, he's all allowing
Speaker 7: Chinese communist abuse of it.
Speaker 3: Congressman, the order that Trump signed yesterday called for a
Speaker 3: review of the intelligence surrounding.
Speaker 8: The risk posed by TikTok.
Speaker 3: Are you concerned at all that the incoming administration might
Speaker 3: be glossing over or prepared to gloss over those risks
Speaker 3: in its eagerness to try to strike a deal and
Speaker 3: keep the app going.
Speaker 7: Yes, And there's two core risks. One is, of course,
Speaker 7: american's personal data, geolocation data, personal contact information than a
Speaker 7: social graph of their lives. But the second, I think
Speaker 7: more concerningly actually is control over the algorithm itself. What
Speaker 7: content is suppressed, what content is amplified, That is ultimately
Speaker 7: dictated by the Chinese Communist Party, And we need to
Speaker 7: be very clear about this. There's a lot of handwaving
Speaker 7: around this. Xijingping makes those decisions, and what that means
Speaker 7: is that Chinese kids see very different content, mostly educational,
Speaker 7: than American kids do. And I don't know why the
Speaker 7: United States would want to outsource the education and ideological
Speaker 7: cohesion of an entire generation to our greatest adversary. Now
Speaker 7: you underlay this ignorance of that core risk with the
Speaker 7: fact that Trump just issued a meme coin that basically
Speaker 7: is the equivalent of him opening up a Swiss bank account,
Speaker 7: inviting foreign adversaries and foreign individuals and corporate interests to
Speaker 7: deposit money into it secretly and then show him the receipts.
Speaker 7: That opens up the way for monumental corruption in the
Speaker 7: sale of TikTok.
Speaker 4: We'll talk about Trump Coin and indeed Milania's meme coin
Speaker 4: two a little bit later. But Congressman, I go back
Speaker 4: to the fact that you said that this extension is
Speaker 4: ultimately illegal. Now you've also said that there's hand waving
Speaker 4: now bite dance in.
Speaker 2: And of itself.
Speaker 4: Would say, look, control does not lie in China or Shijiping,
Speaker 4: but up to TikTok in and of itself. But going
Speaker 4: back to if indeed we did see some sort of
Speaker 4: joint venture more US ownership of TikTok, with that in
Speaker 4: any way a piece some of your national security consents.
Speaker 7: As with many things, he says, I have no idea
Speaker 7: what Trump was talking about when he said like the
Speaker 7: US government would have a fifty percent stake or something
Speaker 7: like that. There's about seventy five unanswered questions in between
Speaker 7: that statement and the actuality of it. Here's what we want, though,
Speaker 7: Here is the goal of the bill. First of all,
Speaker 7: we don't want to ban TikTok. We don't want to
Speaker 7: ban any of the social media. They're here to stay,
Speaker 7: just like radio and TV before them. But what we
Speaker 7: do want to do is reclaim control of the digital
Speaker 7: town square from this Chinese communist and American corporate malfeasance.
Speaker 7: And to do that we need TikTok to answer to
Speaker 7: US law. And then the second step is Congress needs
Speaker 7: to pierce Section two thirty and establish a duty of
Speaker 7: care for all of these social media corporations. That means
Speaker 7: that we can allow them to host things like deep
Speaker 7: fake pornography, which ninety eight percent of online deep fake
Speaker 7: videos or pornographic content targeting women non consensually. These tech
Speaker 7: CEOs don't care. They don't have to care. They're not
Speaker 7: liable for it. Congress needs to end that.
Speaker 4: When we're thinking therefore about the next steps.
Speaker 2: You seem to be going more broadly.
Speaker 4: We've had steps being taken by the CEO of Matter
Speaker 4: as well to reduce fact checking here in the United States.
Speaker 4: How has that been a cause of anxiety for you
Speaker 4: or is that something that you feel. Ultimately, yes, we
Speaker 4: could see more community focus on preserving what is said
Speaker 4: on the internet or not.
Speaker 7: So, I'm actually sympathetic to Zuckerberg's claim that fact checking
Speaker 7: was not proving effective. Now we can debate how accurate
Speaker 7: the fact checking was, but the point is that people
Speaker 7: didn't believe the fact checking, and ultimately truth has to
Speaker 7: be communally acknowledged and so moving towards community notes, if
Speaker 7: he can demonstrate that that's more effective and building trust
Speaker 7: and building shared consensus about the facts, I'm receptive to that.
Speaker 7: But the underlying point here is that any Web two
Speaker 7: point zero approach to doing this is ultimately going to
Speaker 7: be ineffectual because these are walled gardens controlled by corporations,
Speaker 7: and ultimately, these corporations monetize the attention span of Americans
Speaker 7: and sell off that product to the highest advertising bidder.
Speaker 7: And for so long as that is the case, they're
Speaker 7: always going to amplify the seven Deadly sins, things that
Speaker 7: foment pride and greed and lust and end be because.
Speaker 8: That's what people click on.
Speaker 7: We need a Web three point zero transition where people
Speaker 7: have more custody of their personal data and where the
Speaker 7: algorithms are answerable to communities in a pluralistic fashion, the
Speaker 7: way that Taiwan has done so under the leadership of
Speaker 7: the Digital Minister.
Speaker 3: Congressman, do you see any role for government in trying
Speaker 3: to help in this area of moderation? We've seen the
Speaker 3: direction of travel in Washington move far away from that.
Speaker 8: What do you see.
Speaker 7: Government needs to revoke Section two thirty so the tech
Speaker 7: industry will claim that Section two thirty protects free expression,
Speaker 7: and it's just laughable. James Madison did not write Section
Speaker 7: two thirty. It was wrapped in the nineteen nineties, and
Speaker 7: it is an industry specific shield for the social media
Speaker 7: corporations and not be liable for toxicity, for defamation, for cyberstocking,
Speaker 7: and intimate privacy violations.
Speaker 8: Things that are already illegal.
Speaker 7: I want to be clear about this, things that are
Speaker 7: already towards under civil and criminal law. They are not
Speaker 7: susceptible for a duty of care. To prevent them, we
Speaker 7: need to make them liable for it. And then we
Speaker 7: need to bring in the blockchain industry under regulatory clarity
Speaker 7: so that we can transition to a Web three point
Speaker 7: zero approach to social media governance. Because what's working in
Speaker 7: Web two point zero has worked well for the tech CEOs,
Speaker 7: it has not worked well for American children.
Speaker 3: Those are both pretty ambitious goals. Congressmen, do you see
Speaker 3: enough of a consensus in this Congress between Democrats and
Speaker 3: Republicans to be able to get both of those things done,
Speaker 3: Especially with respect to Section two thirty, which we've been
Speaker 3: hearing about for so long.
Speaker 7: You're certainly right to the tech lobby has been effective
Speaker 7: at crushing even marginal steps towards revoking Section two thirty.
Speaker 7: I will note, though, that last Congress the chair and
Speaker 7: ranking member of the Energy and Commerce Committee on which
Speaker 7: I said, and which has jurisdiction over the tech industry,
Speaker 7: jointly wrote an outbed in The Wall Street Journal calling
Speaker 7: for the sun setting of Section two thirty. Now it
Speaker 7: didn't happen last term, but that is a significant step
Speaker 7: forward where you see bipartisan leadership towards revoking it. I
Speaker 7: think we are hitting an inflection point where Americans are
Speaker 7: tired of having toxicity pumped into the national discourse by
Speaker 7: people who get richer the more time their kids spend
Speaker 7: scrolling on their smartphones. It is time for us to
Speaker 7: move away from this phone based childhood towards a play
Speaker 7: based childhood. But to do that, we've got to reclaim
Speaker 7: ownership over how we talk to each other. Section two
Speaker 7: thirty is the first step, and I do think we're
Speaker 7: building bipartisan support for it.
Speaker 4: I hate you, but there was a lot of bipartisan
Speaker 4: support to ban TikTok, and then suddenly, as the hour
Speaker 4: drew near, we saw some real one eighties from across
Speaker 4: the aisle. Congressman and I go back to the TikTok case,
Speaker 4: in particular because the fact they keep on talking about
Speaker 4: web three point zero. You're talking about decentralization here, Well,
Speaker 4: we've heard that from a pitch of one of the
Speaker 4: wanna be owners, Frank McCourt, and indeed, working with Kevin O'Leary,
Speaker 4: they want to be seeing potentially this project liberty. What
Speaker 4: are you thinking more broadly about their particular offer, because
Speaker 4: they don't want the algorithm.
Speaker 9: Yeah.
Speaker 7: Web three point zero fundamentally is about open governance. It's
Speaker 7: about creating pluralism and creating a sense of community ownership
Speaker 7: over this. In the same way that Americans insist that
Speaker 7: our actual town squares are places where communities have an
Speaker 7: interest in upholding order and providing freedom of expression, we
Speaker 7: need the same thing for our digital town square, because
Speaker 7: that's where Americans are spending four to six hours every
Speaker 7: day taking in news, information, and entertainment.
Speaker 8: I think too many Americans just.
Speaker 7: Assume that the status quo over the last fifteen years
Speaker 7: is all that we can expect from social media. But
Speaker 7: if you look back at every other media innovation from
Speaker 7: the printing press in the fifteen hundreds all the way
Speaker 7: through TV and radio, you will see that there was
Speaker 7: a moment of disruption and then new norms, conventions, and
Speaker 7: laws where established to help bring some harmony to this
Speaker 7: new way of disseminating information. The challenge here with social
Speaker 7: media is that we've had to digest this tech innovation
Speaker 7: in a much shorter amount of time. We've had less
Speaker 7: than half a generation to do it, and so the
Speaker 7: disruption has been even greater. But I do think that
Speaker 7: we are hitting an inflection point where we're going to
Speaker 7: start to adopt new roles in governance structures.
Speaker 3: US Representative Jacocinclaus from Massachusetts, Thank you. Coming up, we'll
Speaker 3: hear from Bank of America's CEO, Brian moynihan out of Davos.
Speaker 8: Next, this is Bloomberg.
Speaker 4: Bloomberg is live at Davos, and Bloomberg's Jonathan Faraoh and
Speaker 4: Lisa Bromwitz are sat down with the Bank of America's CEO.
Speaker 10: Hey guys, great to be with you, day two of
Speaker 10: the World Economic Forum here in Davos, Switzerland, minds firmly
Speaker 10: elsewhere in Washington, d C.
Speaker 8: Isn't that right?
Speaker 10: Least twenty four hours of conversations about how great America
Speaker 10: is and how the rest of the world will struggle
Speaker 10: with the incoming President Donald Trump.
Speaker 11: Yeah, station here at Davos has been what's America going
Speaker 11: to do? How can I leverage myself to be in
Speaker 11: the best position possible? And oh yeah, what's the latest headline?
Speaker 10: Brom Monahan alongside us, the chairman of CEO of Bank
Speaker 10: for America. We're going to cover all of that through
Speaker 10: the next eight minutes or so. There's an important occasion
Speaker 10: to mark fifteen years at the top of Bank for America.
Speaker 12: Now, it's been an honor lead to company and we've
Speaker 12: had some fun and it was interesting to start. For
Speaker 12: the last ten years or so, we've been on a
Speaker 12: role just producing responsible growth and the team does a
Speaker 12: great job and we can take pride we've put the
Speaker 12: company to.
Speaker 13: Where it should be. Is one of the great companies
Speaker 13: in the world.
Speaker 8: Beyond interesting.
Speaker 10: Fifteen years ago it was the absorption of Countrywide Financial.
Speaker 8: It was Meyril.
Speaker 10: It's a very very different bank and a very very
Speaker 10: different moment. That phrase you use is one you've used
Speaker 10: so many times, responsible growth. There is a feeling that
Speaker 10: maybe we moved towards something house in the world of
Speaker 10: banking over the next few years. Some might say it's
Speaker 10: sort of reckless growth, which is going to go for it?
Speaker 10: How would you describe the future.
Speaker 12: So what you're hearing is enthusiasm for in the investment
Speaker 12: banking side, it particularly transactions. Right, for a long time,
Speaker 12: for last couple of years, it's been hard to get
Speaker 12: a transaction through. And what stops a seller from selling
Speaker 12: or buyer from buying is this thing is delayed.
Speaker 13: I'm exposed and so what they'll do is they'll push
Speaker 13: it through. So there's a lot of.
Speaker 12: Enthusiasm that they'll be better growth United States. There a
Speaker 12: lot of enthusiasm by the bankers saying these deals can
Speaker 12: get done, so I can go have this future conversation.
Speaker 12: It's just not another idea that goes through the system
Speaker 12: and everybody says, that's a great idea, But that can
Speaker 12: be a great idea, let's go do it, or a
Speaker 12: great idea, I don't.
Speaker 13: Want to do it.
Speaker 12: But it's a more of a substance space than it
Speaker 12: is more of a worry about the environment.
Speaker 3: Right.
Speaker 11: Are you basically saying that there's more enthusiasm, that there
Speaker 11: is conviction and will to actually get stuff done.
Speaker 12: Yeah, I think you saw some deals getting announced and
Speaker 12: you'll see more deals getting announced in our sector in banking,
Speaker 12: especially in the United States. The consolidation is still far
Speaker 12: away from being.
Speaker 13: Done.
Speaker 12: They'll always be big banks or always be small banks,
Speaker 12: but you'll let people make a decision what they.
Speaker 13: Want to do.
Speaker 12: And there haven't been a lot of bank deals done.
Speaker 12: Bank to bank deals we can't do them, it's not legal,
Speaker 12: but as investment banking we can help other people do them,
Speaker 12: and it haven't been a lot done because just uncertain
Speaker 12: you're getting caught in a transaction and having issues. So
Speaker 12: the belief that they should promote the banks consolidate and
Speaker 12: getting more efficient, passing that through to customers, passing that
Speaker 12: through to small businesses, et cetera is different.
Speaker 13: Will be a change.
Speaker 11: Well, there's the banking sector specifically and some of the
Speaker 11: deregulation and whether some of these mergers and consolidation will
Speaker 11: be a looted, and.
Speaker 14: Then there's a broader corporate sector.
Speaker 11: As some of the enthusiasm we've seen and we've heard
Speaker 11: from the cities, a head of banking from JP Morgan,
Speaker 11: how much do you see that being maybe a little
Speaker 11: premature based on some of the policies coming down the
Speaker 11: pike and the uncertainty around debt, deficit and rates.
Speaker 12: Well, I think you have to divorce a little bit
Speaker 12: some of the fiscal work that has to be done,
Speaker 12: and in coming Treasury or Secretary and others have to
Speaker 12: take very seriously this question of how do we manage
Speaker 12: the revenue stream, the expense stream, and the amount of
Speaker 12: debt and get it all to work out. That one
Speaker 12: of the ways that that becomes easier if you have
Speaker 12: more activity and more things going on.
Speaker 13: So I think the enthusiasm.
Speaker 12: Here from the bankers is more structurally. The belief is
Speaker 12: that even starting yesterday, you don't have you don't have
Speaker 12: the constraint that you have, so you can go. If
Speaker 12: there's more that enables more, that's good stuff, but right
Speaker 12: now it'll stop it going in the wrong direction and
Speaker 12: look hard. Medium small sized businesses their biggest complaint last summer.
Speaker 13: Last time I was here and we.
Speaker 12: Talked to the administration about it was the biggest complaint
Speaker 12: was you're in my pocket. You're slow me down. I
Speaker 12: can't get things done. I want to permit to do something,
Speaker 12: it takes forever. I want your labor rules. All this
Speaker 12: stuff was going on just over and over, and small
Speaker 12: medium sized business don't have the thousands of people that
Speaker 12: big companies have to figure it all out and they're
Speaker 12: figuring out their own The same person's running the business
Speaker 12: at nice sitting Anders say, so, what does this new
Speaker 12: taxation strategy on so security mean to me?
Speaker 13: How does it apply? How I have to change all
Speaker 13: my systems?
Speaker 12: And so they're just saying, if you just stop, you know,
Speaker 12: things will get better.
Speaker 10: So you're on the number one lene to small businesses
Speaker 10: in the United States, give us the read on things
Speaker 10: right now? Are they already making those decisions to make
Speaker 10: a move to make those investments that they were on
Speaker 10: hold over the last four years doing? Are they already
Speaker 10: making that most so.
Speaker 12: If you come over the last say, six eight months
Speaker 12: or so that it went from regulation and inflation, the
Speaker 12: inflation has kind of come down as their worry. Right now,
Speaker 12: what's actually interesting is they're going back to labor shortages
Speaker 12: and rightly now the interesting thing about that that has
Speaker 12: a question about immigration and all this stuff going on.
Speaker 13: But what they're feeling that is demand.
Speaker 12: I need people to do things, and so they're starting
Speaker 12: to feel the demand steady. They remember when the Fed
Speaker 12: was raising rates high, their cost of barring went up
Speaker 12: a lot. They went from three hundred basis points over
Speaker 12: an index that went up by five hundred basis points.
Speaker 12: That's a big number, and so that caused them to say,
Speaker 12: let me be careful and then if as the rates
Speaker 12: come download but they feel a little better and now
Speaker 12: let's say, Okay, I have the opportunity to grow, but
Speaker 12: can I get the people? And remember that was the
Speaker 12: twenty twenty one twenty two timeframe, so in there there's
Speaker 12: got to be a solution this immigration. It doesn't constrain
Speaker 12: those small medium sized business for growing or they're going
Speaker 12: to start letting.
Speaker 10: Would you say, just to jump in, would you say
Speaker 10: we are supply constrained? Do you think we are prone
Speaker 10: to have these in flight?
Speaker 13: Yes? And no, And.
Speaker 12: We don't know honestly because because the stimulus after the pandemic,
Speaker 12: there was so much more than there maybe had to
Speaker 12: be by technical economic discussion, you know, it's hard to
Speaker 12: say whether we're supply constrained and other things.
Speaker 13: And it were supply constraints because it.
Speaker 12: Cut off a supply and the stoppage of goods coming
Speaker 12: in a country and shipping and all that stuff that
Speaker 12: we went through. So you haven't gotten to a real
Speaker 12: normalized side of that yet. But that's the blame for
Speaker 12: the current thing. I think the supply shortages can mitigate.
Speaker 12: If you know, we got to be a little care
Speaker 12: about labor supply, We've got to be a little care
Speaker 12: for about the.
Speaker 13: Terriffs impacting supply and things.
Speaker 12: But I think people the second sourcing's gone on, people
Speaker 12: are finding places to get stuff.
Speaker 13: So I'm not quite sure that's going to be the issue.
Speaker 12: But a lot of what we think it was the
Speaker 12: issue is actually the pandemic, the stimulus and the impact
Speaker 12: the pandemic on supply that's worth the sort of system.
Speaker 11: So John started with the fact that you've been in
Speaker 11: Bank of America for fifteen years. We keep hearing about
Speaker 11: succession plans in different places. What's your success should plan?
Speaker 13: But you're trying to throw me out, No.
Speaker 15: Not at all.
Speaker 11: I'm just wondering because this is something that we.
Speaker 10: Lost.
Speaker 12: Questions the way, the fascination with all this is interesting,
Speaker 12: and one just means we're all getting older.
Speaker 13: So what they're out is we run.
Speaker 12: We run across in our company through the top three layers,
Speaker 12: including for the CEO succession. Every six months, we go
Speaker 12: through everything who the media successors for every one of
Speaker 12: our teammates jobs, and we have a slate, and we
Speaker 12: go from a slip because if we run a company,
Speaker 12: people leave for a whole, they retire, they get another job, whatever,
Speaker 12: and you're always filling jobs.
Speaker 13: And so with the way the board will make a
Speaker 13: choice at.
Speaker 12: Some point, I'm not going anywhere unless they throw me out.
Speaker 13: They know that.
Speaker 12: But my job, and one of the biggest jobs I have,
Speaker 12: is preparing people for the what it would be like
Speaker 12: to run this company out there and and and then
Speaker 12: and and that's important. So we do a lot with
Speaker 12: our team to get them used to experiences and get
Speaker 12: them to learn more about the trade offs you have
Speaker 12: to make at the top of the house, because if
Speaker 12: you come through a business or come through a function,
Speaker 12: you haven't made those trails. That's part of our general strategy.
Speaker 12: And so we talked to our board. But you'll never
Speaker 12: hear us discuss A is in and B is not.
Speaker 12: That to me is the worst thing you can do.
Speaker 12: I went through that process in the end of two
Speaker 12: thousand and nine. Whether it's day to day speculation, that's.
Speaker 13: Not the way to do it.
Speaker 2: Well, thank you for that very much.
Speaker 13: You'll be the first first one.
Speaker 14: Okay, thank you.
Speaker 8: I appreciate that.
Speaker 11: We only have about thirty seconds. You said something to
Speaker 11: us when we were at Bank of America that AI
Speaker 11: would basically keep the staff the same size but increase
Speaker 11: the footprint of business.
Speaker 14: Do you stand by that?
Speaker 13: Yeah, there are two facts I'll give you. One is
Speaker 13: we run the company.
Speaker 12: On the nominal amount of dollars of expenses we did
Speaker 12: ten years ago almost now, nominal or not not inflation
Speaker 12: just and we run it on thirty thousand less people.
Speaker 12: That is all digitization, and AI is an extension of automation,
Speaker 12: digitization models, et cetera, automating work, taking out work and automated.
Speaker 13: Therefore you don't need and I think AI keeps going.
Speaker 12: The idea is, if we're good, we'll keep adjusting where
Speaker 12: the teammates end up. So it might not be the
Speaker 12: same two hundred twelve thousand people two hundred and thirteen
Speaker 12: thousand people doing the same thing ten years from now. Yeah,
Speaker 12: but my guess is that our employment levels will stay
Speaker 12: relatively said if you work towards stuff that can't be
Speaker 12: replicated near turn by.
Speaker 10: Air Bran and you've been super generous with your time,
Speaker 10: and you show me up every year because you always
Speaker 10: come out here with a suit jacket on and I'm
Speaker 10: sitting here with like a winter jacket. Yeah, but yeah,
Speaker 10: I know, I know you've been influenced by Brian.
Speaker 11: No, it's actually just a lot more Thanks for.
Speaker 10: America CEO and chairman. Bye, Thank you guys Banks.
Speaker 4: See you ending in artificial intelligence. We so appreciate it
Speaker 4: out in Davos. Fantastic conversation. Welcome back to bluemog Technology.
Speaker 4: I'm Caroline Hyde in New York and.
Speaker 8: I'm Mike Sheppard in Washington.
Speaker 4: Quick check on these markets, Mike, because look, we've got
Speaker 4: a little bit of a reprieve in the markets as
Speaker 4: we try to digest a whole host of executive orders
Speaker 4: and moves made by the new administration as Trump takes office.
Speaker 4: We're currently up two ten percent on the NASAK one hundred,
Speaker 4: investors wanting to see the growth potential rather than some
Speaker 4: of the the trade hindrances for now. But Apple in
Speaker 4: the spotlight down more than four point three percent. This
Speaker 4: is the worst day since August of last year. It's
Speaker 4: currently training in the lowest September twenty twenty four. This
Speaker 4: again is China anxiety. Apple intelligence not really feeding through
Speaker 4: in demand for the iPhone as much as analyst anticipated,
Speaker 4: Loop Capital and Jeffrey's cut their overall view of Apple
Speaker 4: from a hold or indeed one indeed saying to a
Speaker 4: cell let's move on and have a look at what's
Speaker 4: happening in the.
Speaker 2: World of crypto as well, because no executive order.
Speaker 4: When it comes to bitcoin, I'm afraid we're up two
Speaker 4: point nine percent, but we're still above one hundred and
Speaker 4: five thousand dollars micro strategy.
Speaker 2: On the downside, a lot of the crypto exposed.
Speaker 4: Names are on the fact that maybe we didn't get
Speaker 4: an EO out the gate when it comes to the
Speaker 4: approval of bitcoin and cryptocurrencies more broadly by.
Speaker 2: The new administration.
Speaker 4: Microstratuy, you're by two when it's buying yet more bitcoin
Speaker 4: as we know an eleventh consecutive week. But there was
Speaker 4: good news over the weekend into the inauguration for many
Speaker 4: crypto holders. Let's go to it, Blu MiGs Isabelle Lee,
Speaker 4: is here an extraordinary announcement coming from the incoming at
Speaker 4: that point President Trump. Now is President Trump and Milania
Speaker 4: both having a mean coin? What does this mean for
Speaker 4: the space?
Speaker 16: I really thought it was a joke when I saw
Speaker 16: it online, because you see a lot of parodies, but
Speaker 16: then it was real. I mean, now we don't know
Speaker 16: yet if this is related to Trump or not. His
Speaker 16: team is behind it, but we have his son Eric
Speaker 16: Trump saying that this is quote, the greatest digital meme
Speaker 16: on earth. So what to make of this?
Speaker 2: Two things?
Speaker 16: Really, On one hand, it's a great thing. It's really
Speaker 16: signifies a new regime, the fact that you have a
Speaker 16: coin named after Trump and also Milania. When Milanna was
Speaker 16: launch launch, by the way, it sucked some of the
Speaker 16: air out of the Trump point, but still at one
Speaker 16: point it was as high as sixty billion.
Speaker 14: That's great.
Speaker 2: But on the other you have if you're long in
Speaker 2: the space, it's great, yes, yes, But.
Speaker 16: On the other you have people saying this highlights the
Speaker 16: memification of the industry. How will the traditional finance people
Speaker 16: take us seriously? Because what is a meme coin? What
Speaker 16: is a meme style? It's just really a joke. So
Speaker 16: it has no underlying asset. They're speculative, they're volatile, it's
Speaker 16: like what is doage coin? You know, but still the
Speaker 16: whole market is one hundred million in valuation, so it's
Speaker 16: an expensive joke. But well this last who knows? So
Speaker 16: it's really interesting, but lots of activity and billions of
Speaker 16: dollars changing hands at.
Speaker 3: That Isabelle, Are you sensing any bruise feelings in the
Speaker 3: industry from not seeing an executive order on day one
Speaker 3: from Trump on crypto or even a mention during his
Speaker 3: inaugural address after being sworn in.
Speaker 2: Absolutely.
Speaker 16: We have bitcoin soaring to a record high on Monday,
Speaker 16: and then it paired back some of those gains from
Speaker 16: one hundred and nine plus thousand, it became one hundred
Speaker 16: and three. And I asked some of that analysts because
Speaker 16: I was on on Monday. I was like, why is
Speaker 16: bitcoin pairing its games? And they were like, because Trump
Speaker 16: didn't mention.
Speaker 2: It in this speech.
Speaker 14: But take note of that.
Speaker 16: The fact that bitcoin faithful, their crypto enthusiasts are expecting
Speaker 16: Trump and the incoming president at that point, the president
Speaker 16: of the United States, they're expecting him to mention it
Speaker 16: in his inaugural speech is already one thing that really
Speaker 16: just means that crypto is becoming mainstream, or if it
Speaker 16: isn't mainstream, t you just yet.
Speaker 2: So it's really something.
Speaker 16: But you know, with Trump focused on tarriffs and energy
Speaker 16: and trade, but they were really hoping and banking on
Speaker 16: the fact that Trump will say something about bitcoin.
Speaker 8: Bloomberg isabell ye, thank you.
Speaker 3: Heading back to Dabos Now, where mistraw AI CEO Arthur
Speaker 3: Mench spoke with Bloomberg TV's Frendcine Lac about the company's
Speaker 3: expansion plans and about his thoughts on Europe's regulatory and
Speaker 3: competitive landscape.
Speaker 17: I like to look at it from a positive point
Speaker 17: of view. Europe has a lot of strength. In particular,
Speaker 17: the talent poolt has access to. The people that are
Speaker 17: building AI, including in the US, are actually mostly Europeans,
Speaker 17: and so the opportunity we had, and that's also the
Speaker 17: thing that we provide to our customers, is the expertise.
Speaker 17: And I think Europe can come together today and realize
Speaker 17: that we've been innovators. We're continent of innovators. We need
Speaker 17: to keep being innovators, and AI is an opportunity to
Speaker 17: continuously innovate. There's a lot of other companies that are
Speaker 17: building that. I'm thinking of ace Email and thinking of
Speaker 17: all of the AI startups that we're working with in
Speaker 17: France and in London, and so let's not look at
Speaker 17: the bad things. Effectively, we have a tendency to play
Speaker 17: a little too much referee in the trillion dollar raise.
Speaker 17: But we have the strength and we just need to
Speaker 17: have the will to create in Europe and to innovate
Speaker 17: and create value there.
Speaker 11: Do you think that there's a first mover advantage in
Speaker 11: this industry or is it really execution and innovation.
Speaker 2: That will win.
Speaker 17: I mean, as in any industry, you have first move
Speaker 17: or advantage. But the AI is going to be a revolution.
Speaker 17: It's going to be long lasting revolution. It's going to
Speaker 17: take decades to actually be rolled fully to enterprises role
Speaker 17: fully to the way we actually behave and the way
Speaker 17: we actually deal with computers, so and a lot of things.
Speaker 17: And we are realizing that enterprises are a bit struggling
Speaker 17: with realizing the value of AI. And that's where you
Speaker 17: need to partner deeply with someone that can help you
Speaker 17: get the expertise, distill the expertise of your company into
Speaker 17: AI systems that can then help you drive the productivity
Speaker 17: that you're expecting. So the we're only we're only five
Speaker 17: percent there, and so everything that is sitting on top
Speaker 17: of model, all of the orchestration part, all of the
Speaker 17: managing data, all of the customization part of things that
Speaker 17: we still need to figure out, and I think we
Speaker 17: have a very good headstart there.
Speaker 4: I was mis Rasieo Arthur Mench along with Francin Laqua. Meanwhile,
Speaker 4: another closely watched interview at Davos was the Open AI
Speaker 4: CFO Sarah Fry. She's spent with Bluemoks showing Fari about
Speaker 4: rising enterprise use of chatchipt and the company's growth.
Speaker 2: Take listen.
Speaker 18: We have had to do an extraordinary amount of fundraising.
Speaker 18: Luckily we also have a business model that supports it.
Speaker 18: I already talked about chat ChiPT for consumer over three
Speaker 18: hundred million users today and it's a workhourse when it
Speaker 18: comes to revenue, revenue growth and ultimately profitability. But we
Speaker 18: are seeing now enterprises of every size embraces technology, and
Speaker 18: we really see ourselves also as the enterprise company. There's
Speaker 18: a really good symbiosis between those two areas because often
Speaker 18: when I meet customers, and I'm meeting a lot of
Speaker 18: them here in Davas, it's actually their personal experience they
Speaker 18: start with. When I say, hey, how are you using
Speaker 18: chat GPT, They'll actually give me a personal anecdote first.
Speaker 18: And for those of you who sell into enterprises, you
Speaker 18: know that if you've won your customer heart in just
Speaker 18: their day to day, being able to go in and
Speaker 18: then sell them into their enterprise environment gets an awful
Speaker 18: lot easier. And so that enterprise model is really building
Speaker 18: across every sector of the economy, every type of company,
Speaker 18: every scale of company, And I'd be happy to talk
Speaker 18: through examples. Morgan Stanley is a great example, since we're
Speaker 18: talking financing, and they're also a good partner in that front,
Speaker 18: but they're using our technology and areas like wealth management,
Speaker 18: in areas like even their investment banking, and they've been
Speaker 18: doing it now for multiple years. So in terms of
Speaker 18: the future from a financing perspective, I suspect we will
Speaker 18: continue to have to finance at pace, but we will
Speaker 18: do that on the merits of our business as well.
Speaker 6: How about an IPO, what would that look like for
Speaker 6: open ai?
Speaker 2: You mentioned profitability? You know, how far do you think
Speaker 2: we are from that? What are you know? You're someone
Speaker 2: who's taken two companies public. What would the steps be
Speaker 2: for open ai to get there? And how far are
Speaker 2: we from profitability?
Speaker 13: Yeah?
Speaker 18: So, as I've told every company I've been associated with
Speaker 18: on an IPO, it's it's not a destination. An IPO
Speaker 18: is just a marker on a journey, and if you
Speaker 18: get wrapped around the idea that the IPO is a destination,
Speaker 18: is a very kind of dangerous world to live in
Speaker 18: because there's a feeling of finality and maniland, going public
Speaker 18: is just the beginning of another very interesting part of
Speaker 18: your journey, like what are the positives?
Speaker 2: And IPO number one.
Speaker 18: I think it's a very strong credentializing moment for any company.
Speaker 18: I love that moment of sunlight, of being able to
Speaker 18: show your financials externally, to show how your business is building.
Speaker 18: It's the best disinfectant in any room. It's a great
Speaker 18: way to fundraise because it opens the door not just
Speaker 18: to equity and selling your equity in that moment, but
Speaker 18: it also starts opening the door to many more areas
Speaker 18: of financing, starting with mezzanine debt, structured debt, and so
Speaker 18: on and again. In a world where we're buying a
Speaker 18: lot of compute, we need to get there fast because
Speaker 18: equity is an expensive way to raise capital and to
Speaker 18: deploy capital. We need to make sure we continue to
Speaker 18: bring down that weighted average cost of capital.
Speaker 3: That was open AICFO Sarah Freyer from Davos.
Speaker 19: So one of the things that we shared, as you
Speaker 19: said at the beginning, is that we are moving away
Speaker 19: from the way that we were utilizing third party independent
Speaker 19: fact checkers and moving now to much more of a
Speaker 19: community notes program. We're starting that in the US and
Speaker 19: then we'll see how that goes as we move it
Speaker 19: out over the years. So nothing changing in the rest
Speaker 19: of the world at the moment. We're still working with
Speaker 19: those fact checkers around the world, but in the US
Speaker 19: that's that's the direction of.
Speaker 4: Travel to start with Meta's head of Global Business Group,
Speaker 4: Nikola Mendelson in Davos, and as is, the company is
Speaker 4: gearing up to remove third party fact checking here in
Speaker 4: the United States.
Speaker 2: But Blue Mugs Kat Wagner is joining us now to talk.
Speaker 4: About the timing of all of this, because just last
Speaker 4: week a lawyer representing Meta quit accusing the CEO, Mark
Speaker 4: Zuckerberg of what he called a descent into toxic masculinity
Speaker 4: and neo Nazi madness. Then there's a controversy swirling around
Speaker 4: gestures made by Elon Musk this inauguration. We can this
Speaker 4: feels as though conspiracy theories are kind of running wild
Speaker 4: at the same time as fact checking is taking a
Speaker 4: stand back.
Speaker 20: Yeah, and that's just unfortunately the reality of what's going
Speaker 20: to happen. When you take away fact checking, you sort
Speaker 20: of open the door for you know, inaccurate information to
Speaker 20: spread pretty wildly on the platform, right, And so I
Speaker 20: don't think that's going to be a coincidence. I don't
Speaker 20: think this is the end of that reality for us, right,
Speaker 20: I don't. I think community notes is sort of an
Speaker 20: interesting concept. I don't think it is a fool proof
Speaker 20: concept when it comes to fact checking at scale, and
Speaker 20: so I'm sure the metal will learn that, you know,
Speaker 20: if not already then certainly over time. I think the
Speaker 20: interesting thing about this fact checking timing for them is
Speaker 20: that you know, clearly they usually test things outside of
Speaker 20: the US and then bring them to the US when
Speaker 20: they are ready for prime time, because this is the
Speaker 20: most valuable market. It's interesting that in this case they're
Speaker 20: doing the test here in the US and leaving it
Speaker 20: in the rest of the world. To me, that's a
Speaker 20: signal that this is more of a political decision for
Speaker 20: them right to appease the Trump administration than it is
Speaker 20: a reality that the fact checking was a major problem
Speaker 20: to begin with I see this more as you know,
Speaker 20: something that they're doing to appease the Trump administration more
Speaker 20: so than this was a huge ding or knock on
Speaker 20: the you know, the platform's ability to thrive.
Speaker 3: Bloomberg's Kurt Wagner, thank you. Sticking with Meta. Remember this
Speaker 3: moment from a Facebook town hall back in twenty eleven.
Speaker 20: My name is Barack Obama, and I'm the guy who got.
Speaker 13: Mark to wear a jacket and time.
Speaker 3: That was former President Barack Obama joking with Meta CEO
Speaker 3: Mark Zuckerberg. Things certainly have changed for the Facebook founder
Speaker 3: and other tech leaders, as we saw during yesterday's inauguration.
Speaker 3: For more in the industry's relationship with politicians, we are
Speaker 3: joined now by Margaret O'Mara, Professor of American History at
Speaker 3: the University of Washington. Margaret, I have to ask you,
Speaker 3: how are we going to look back at this moment
Speaker 3: yesterday where we saw such a lineup of tech leaders
Speaker 3: and billionaires at the inauguration, seated so prominently, what.
Speaker 14: Was really extraordinary?
Speaker 15: I mean, it remains to be seen how the relationship
Speaker 15: between tech and the Trump administration will evolve over time,
Speaker 15: but we have never in American history seen a lineup
Speaker 15: of business tycoons occupying a place of honor at a
Speaker 15: presidential inauguration like we did yesterday.
Speaker 14: Silicon Valley has long had ties.
Speaker 15: With Washington and different presidential administrations, but this does feel
Speaker 15: like uncharted territory.
Speaker 3: And how does this translate into the priority list that
Speaker 3: each of these CEOs may be bringing to the administration.
Speaker 3: How much does that proximity count.
Speaker 14: It counts a lot.
Speaker 15: And look, we've again we've seen Silicon Valley leaders have
Speaker 15: very close relationships with the Obama administration, the Clinton administration,
Speaker 15: with other administrations other than Trump.
Speaker 14: So this again is not entirely unknown, but there are really.
Speaker 15: High stakes, and we see both on the regulatory side
Speaker 15: and in the spending and.
Speaker 14: Tax policy side.
Speaker 15: On the regulatory side, the promise to have a light
Speaker 15: hand on AI regulation, as well as Trump's boosting of crypto,
Speaker 15: underscored by his and the First Lady's personal involvement issuance
Speaker 15: of their own coins in.
Speaker 14: The last couple of days, is something.
Speaker 15: That is a real sea change for the industry, of
Speaker 15: real difference in attitude than what the Biden administration had approached.
Speaker 14: And then also we.
Speaker 15: Have the promise of tax policy being corporate friendly generally,
Speaker 15: and also things like defense contracting, which is the Defense
Speaker 15: Department and the National Security Establishment does a lot of
Speaker 15: business with Silicon Valley companies, and that only seems poised.
Speaker 4: To increase Margaret, take us back from a historical perspective,
Speaker 4: have there been as many ethical questions when we've seen
Speaker 4: such relationships, perhaps not so flamboyantly demonstrated, but certainly close
Speaker 4: and previous administrations there haven't.
Speaker 14: Well, there have been questions, but they have been resolved.
Speaker 15: And let me point to a really interesting example from
Speaker 15: Silicon Valley's past. David Packard, the founder of Hewlett Packard
Speaker 15: now HP, kind of a legendary Silicon Valley founder. He
Speaker 15: actually joined the Nixon administry as Deputy Secretary of Defense
Speaker 15: in nineteen sixty nine, and he was a very wealthy man,
Speaker 15: and he famously put his wealth in a blind trust
Speaker 15: while he was in office to resolve any ethical questions
Speaker 15: there might be about HP profiting from defense contracts.
Speaker 14: Which it did have while he was at the Defense Department.
Speaker 2: Let's just I.
Speaker 4: Mean, thinking of what you've written, in particular, the code
Speaker 4: Silicon Valley and the remaking of America is Silicon Valley
Speaker 4: aren't the tech leaders that we see remaking America from
Speaker 4: a political perspective right now, Margaret, I say that with
Speaker 4: the words of the previous administration still bringing on O
Speaker 4: is that this is some sort of oligarchy.
Speaker 14: Yeah, I think that they are trying to.
Speaker 15: I mean, what certainly is the case and hasn't been
Speaker 15: the case in the past, is that the platforms that
Speaker 15: they control just thinks solely about the people who were
Speaker 15: on the inaugural dais yesterday in the Capitol rotunda, Mark Zuckerberg, Sunderbushai,
Speaker 15: Jeff bezo Elon Musk, that they have such an outsized
Speaker 15: influence over online communication, on online commerce, that there already
Speaker 15: is such an immense consolidation of power that again there
Speaker 15: have been you know, big power structures and successful companies
Speaker 15: in the valley before, but this.
Speaker 14: Is the next level. You know, the influence is tremendous.
Speaker 3: Margaret, last question thirty seconds. These companies have a position
Speaker 3: to shape history as we will be reading it later.
Speaker 8: Talk about that unique role they.
Speaker 15: Do, just as the history textbooks now have Andrew Carnegie
Speaker 15: and John Rockefeller and them, and people around the world
Speaker 15: know those names, you know, regardless of what happens next
Speaker 15: we a century from now, probably people are going to
Speaker 15: be reading about Mark Zuckerberg and Jeff Bezos and Elon
Speaker 15: Musk And I think with great power comes from great responsibility.
Speaker 15: This is part of the criticism that has been levied
Speaker 15: at tech over the last decade about what the you know,
Speaker 15: the ripple effects of their platforms might be.
Speaker 14: Now, again, these are businesses, these.
Speaker 15: Are people in the you know, these are for profit companies,
Speaker 15: and I think there also is a very important public
Speaker 15: sector government regulatory role that has been absent.
Speaker 14: So that's one of the reasons that they have become
Speaker 14: this large.
Speaker 15: So I think it needs to be a balance and
Speaker 15: we need to think more broadly about how this shakes out.
Speaker 4: Margaret Omara, Professor of American History at the University of Washington.
Speaker 4: So appreciate your time coming up streaming jant Netflix and
Speaker 4: set to report it results after the closing bell, and
Speaker 4: look at what we can expect next, there's a bluemog
Speaker 4: technology Netflix. Oh, it's set to report earnings after the bell.
Speaker 4: What can we expect? Let's bring in Lucas Shaw and
Speaker 4: the shares had a phenomenal twenty twenty four. How was
Speaker 4: Q four from a profit and revenue perspective.
Speaker 9: Well, we'll find out at the end of the day,
Speaker 9: but people are expecting.
Speaker 13: A very strong quarter.
Speaker 9: You know, they had the Mike Tyson Jake Paul fight
Speaker 9: in the quarter, which was the big live event they've
Speaker 9: ever done, one of the most watched things they've ever
Speaker 9: put out, and I believe due to according to some
Speaker 9: third party researchers, led to the biggest one day of
Speaker 9: spike and.
Speaker 13: New customers they've had in years.
Speaker 9: You know, they also had NFL on Christmas Day, they
Speaker 9: had season two of Squid Game, they had new seasons
Speaker 9: for a bunch of other hit shows. So most people
Speaker 9: are expecting it to be a very strong quarter, which
Speaker 9: will be, unfortunately for us, the last one in which
Speaker 9: they report their subscriber numbers.
Speaker 4: Yeah, we suddenly have to read Teelee's in a whole
Speaker 4: new way. We are expecting strength coming from the live
Speaker 4: side of the equation, and I mean the market capitalization
Speaker 4: reflects that.
Speaker 2: How much more strings.
Speaker 4: Do they have to pull to outperform going into what
Speaker 4: analysts are pretty buoyant on the company.
Speaker 9: Yeah, I mean it's pretty crazy to think that Netflix
Speaker 9: is now worth almost four hundred million dollars it's more
Speaker 9: than Disney and several other big media companies combined, and
Speaker 9: you have to figure that there should be some kind
Speaker 9: of ceiling on this. But look, the Netflix position is
Speaker 9: going to be you know, these live events were going
Speaker 9: big into that area and it's going to boost our
Speaker 9: advertising business, which is one of the reasons that they
Speaker 9: want to stop reporting subscriber numbers because they believe that
Speaker 9: their revenue growth and their profits are going to look
Speaker 9: really good going forward. It just won't be as many
Speaker 9: new subscribers quarter after quarter.
Speaker 4: And how technically robust has the live offering been.
Speaker 9: Well, Look, they had well documented problems during the Tyson
Speaker 9: Paul fag that was largely due to too much demand,
Speaker 9: which is a good thing if you're trying to attract
Speaker 9: an audience. They didn't have a lot of problems during
Speaker 9: the NFL match. I think, you know, these live events
Speaker 9: on streaming tend to have the same life cycle where
Speaker 9: there are issues early on where the company is newer
Speaker 9: to it and they have some issues usually when they
Speaker 9: put on something that people really want to watch, and
Speaker 9: then they figure it out over time.
Speaker 13: Right, you know, we stream all sorts.
Speaker 9: Of things live these days, so I think long term,
Speaker 9: it's going to be fine for them. The question is
Speaker 9: what are the events that they are going to collect
Speaker 9: that deliver or attract a big enough audience if they're
Speaker 9: not a major buyer of sports rights because they're trying
Speaker 9: to create their own events. But look, they just had
Speaker 9: the WWE debut. Everyone at Netflix is really happy with
Speaker 9: it so far. We'll see in three, six, nine months
Speaker 9: if that remains the case.
Speaker 4: Don't even get our producers started on her love for
Speaker 4: all blimogs, Lucas Shaw brilliant.
Speaker 2: Thank you very much.
Speaker 4: Indeed, meanwhile, look and unlikely win it in the TikTok
Speaker 4: band saga of late has been JEWELINGO. Here's what the
Speaker 4: CEO had to say earlier on belie their open interest.
Speaker 13: We do have a good number of people learning Manderin.
Speaker 21: It's not our most popular language, but but it's definitely
Speaker 21: a popular language. Is among the top eight languages that
Speaker 21: people are learning, and we did see a huge spikes,
Speaker 21: and it's mainly because people who are When they thought
Speaker 21: that TikTok was going to be banned, they started trying
Speaker 21: some Chinese apps like red Note, and as soon as
Speaker 21: they showed up, most of the things were in Chinese,
Speaker 21: so they came and wanted to learn Chinese undoolingo because
Speaker 21: of that jewelingo CEO.
Speaker 4: There are a reminder that many of the apps that
Speaker 4: TikTok uses flocked to during the quick US ban and
Speaker 4: turn around Mandarin based, so Luis van Hahn optimistic that
Speaker 4: actually the users will stick around even though TikTok back online.
Speaker 4: We start with TikTok, we end with TikTok. That does
Speaker 4: it for this edition of Bloomberg Technology. Don't forget to
Speaker 4: check out our podcast. You can find it on the
Speaker 4: terminal as well as online on Apple, Spotify, an iHeart.
Speaker 2: This is Bloomberg Technology.