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Speaker 1: From Marhart.

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Speaker 2: We're Innovation, Money and Power Collne in Silicon Valley, NBN.

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Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Love Love.

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Speaker 3: I'm Caroline Hyde at Bloomberg's World headquarters in New.

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Speaker 4: York, and I'm Ed Lovelow in San Francisco. This is

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Speaker 4: Bloomberg Technology.

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Speaker 3: Coming up, Amazon, Meta, Apple all out with their latest earnings.

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Speaker 3: We'll dig into the latest results from Big Tech.

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Speaker 4: Plus Vision pro hits stores. We'll take a closer look

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Speaker 4: at Apple's latest bet on the future.

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Speaker 3: And an exclusive interview with the Nvidia CEO where he

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Speaker 3: sees the biggest benefit from the AI boom. But first,

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Speaker 3: let's get straight to some of these big moves. When

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Speaker 3: it comes to tech ed and we are record highs.

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Speaker 3: When it comes to Meta, extraordinary.

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Speaker 4: Yeah, record high Meta. There's like a comparing contrast here. Apple.

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Speaker 4: I kind of think it's the story we expected. They

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Speaker 4: did grow overall in the quarter, gone just just and

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Speaker 4: they avoided five straight quarters of sales decline. But the

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Speaker 4: stock is down significantly back to where it traded in November.

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Speaker 4: Why Greater China sales and Greater China missing by like

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Speaker 4: three billion dollars. But the narrative on the call. Yeah,

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Speaker 4: we are four of the top six handsets in urban

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Speaker 4: China in congruous messaging. We'll dig deep into the gross

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Speaker 4: story for this stock, and then there is meta, right

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Speaker 4: meta to me, is the story today? Probably we're on

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Speaker 4: track for the biggest jump since February of last year.

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Speaker 4: The stock is touching fresh record highs. Is this an

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Speaker 4: AI story or is this a cyclical rebound in ads?

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Speaker 4: Either way, one year ago we lamented the spending cash

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Speaker 4: burn from Facebook reality labs on the metaverse, But one

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Speaker 4: year ago we also said, Okay, your efficiency is here.

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Speaker 4: This is good. They're back to hiring, and he's thrown

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Speaker 4: in an additional fifty billion dollar buyback and a divvy

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Speaker 4: and it's a wonder what it can do for the

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Speaker 4: stock character.

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Speaker 1: Funnily enough, investors like it.

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Speaker 3: And let's dig into the meta earnings and really what

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Speaker 3: it says about cost discipline. Jusmin Enburg is with us

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Speaker 3: some piece of say principle analyst insider intelligence, where you

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Speaker 3: lead the coverage to social media the creator economy. And

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Speaker 3: before we get into some of the juiciness for the

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Speaker 3: investor base, what do you make of the out and

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Speaker 3: out numbers? Of revenue growth at this particular moment.

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Speaker 5: Yeah, well, it's clear that Meta's year of efficiency has

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Speaker 5: really paid off. Many of the measures that it took

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Speaker 5: last year helped it reduce its cost, it reduced its headcount,

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Speaker 5: and even with this leaner team and operations, it was

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Speaker 5: really able to exceed expectations really across the board, and

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Speaker 5: importantly of course, in its core line of business, which

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Speaker 5: is advertising. And to me, this is really a testament

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Speaker 5: to Meta's execution power. If you look across the social landscape,

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Speaker 5: it isn't the coolest or the most exciting social player

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Speaker 5: out there, but it is the most sophisticated and it

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Speaker 5: knows how to drive business and advertisers really like that.

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Speaker 3: Yeah, they were investing in the underlying advertising technology to

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Speaker 3: better serve their clients. But what do you make of

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Speaker 3: also the talk generative AI. The larmer has become basically

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Speaker 3: the giveaway when you go to AI events. So much

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Speaker 3: of that is a course based on their large language model,

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Speaker 3: But what does it do in terms of future revenues? Jasmine?

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Speaker 5: Look, Meta wants to be an AI heavy hitter, and

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Speaker 5: it is working hard and investing in AI to be

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Speaker 5: able to do that.

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Speaker 1: On the earnings call. Just in the prepared remarks, you.

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Speaker 5: Heard executives mention the word AI about fifty times, which

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Speaker 5: really shows how much they're trying to emphasize their work

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Speaker 5: there as well as how much they truly.

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Speaker 1: Are working there.

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Speaker 5: And It's AI investments have already proved to have a

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Speaker 5: positive impact on its ad business.

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Speaker 1: They talked a lot about its automated.

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Speaker 5: Tools and AI driven ad formats really driving performance. And

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Speaker 5: at the end of the day, advertisers they want efficiency

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Speaker 5: and they want effectiveness, and those investments have really paid

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Speaker 5: off there and that bodes well for its broader ambitions

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Speaker 5: in AI as well.

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Speaker 4: I think what we're understanding Jasmine is the relationship between

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Speaker 4: the ad business ANAI now right, and so Bloomberg writes

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Speaker 4: in the blog, Meta is still the king of digital advertising,

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Speaker 4: but what they point out is that the boost is

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Speaker 4: coming from China based companies on spending in its association

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Speaker 4: with AI generated content. Do you understand that relationship and

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Speaker 4: how AI is basically growing interest in its ad.

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Speaker 5: Base absolutely, I mean AI of course is growing interest

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Speaker 5: in its ad base and generative AI in terms of

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Speaker 5: the creative tools that Meta is also rolling out for advertisers,

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Speaker 5: will do a lot to prove that. I mean, the

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Speaker 5: China based advertisers is a potential risk factor, though I

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Speaker 5: wouldn't say it's necessarily the biggest one, because they have

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Speaker 5: been buoying spending as well throughout twenty twenty three.

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Speaker 4: Later in the program, we're going to go very deep

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Speaker 4: on Apple's vision pro and it makes you think about

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Speaker 4: the metaquest three. You know, it is hard to keep

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Speaker 4: up with meta We were a social media company and

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Speaker 4: then we were a metaverse company, but it was expensive,

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Speaker 4: so we stopped. And now we're in an AI company.

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Speaker 4: Did you get any sense of like where the hardware

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Speaker 4: fits into all of this and if the metaverse dream

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Speaker 4: is still alive?

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Speaker 1: Well, the metaverse dream is very much still alive.

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Speaker 5: They didn't talk about it as much on the earnings

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Speaker 5: call yesterday. Again, the focus was really on AI, and

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Speaker 5: for me, the big challenge now is for Meta to

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Speaker 5: be able to prove that those two big bets, one

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Speaker 5: being AI and the other being the metaverse, really are complementary.

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Speaker 5: It started to lay some of the foundation for that

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Speaker 5: thinking about the ray Bank smart glasses, and you know,

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Speaker 5: it talked about good sales for its metaquest in the

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Speaker 5: last quarter, so there are some signs of progress there

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Speaker 5: still for me, you know, the meta versus is somewhat

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Speaker 5: of an ill defined concept, and it's something that you know,

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Speaker 5: Meta is going to have to continue to prove as

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Speaker 5: it continues to form this vision. It also has to

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Speaker 5: store that it can keep up the momentum in its

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Speaker 5: advertising business, or investors won't be as willing to overlook

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Speaker 5: those losses that continue to mount in reality labs.

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Speaker 3: Interestingly, maybe Apple's vision pro serves as some boost to

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Speaker 3: sales to Meta going forward as they help with outlining

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Speaker 3: the vision. Jasmine, I'm interested though you said that China,

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Speaker 3: for example, isn't the biggest risk for you. What is

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Speaker 3: the biggest risk? Is it regulation?

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Speaker 1: It's certainly one of them.

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Speaker 5: I mean, just this week as well, CEO Mark Zuckerberg

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Speaker 5: testified in front of Congress about protecting children online. That

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Speaker 5: was a really heated conversation and it's clearly going to be.

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Speaker 1: One of their biggest challenges this year.

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Speaker 5: Teen popularity has become, you know, somewhat of a liability,

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Speaker 5: at least in the eyes of lawmakers, but young people

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Speaker 5: also represent Facebook and Instagram's largest or one of their largest,

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Speaker 5: really opportunities for growth.

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Speaker 1: And it's going to have to walk a really fine line.

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Speaker 5: In terms of protecting their safety on these platforms and

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Speaker 5: generating revenue. There's also, of course a lot of other

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Speaker 5: regulated regulation that Meta has to think about, both here

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Speaker 5: in the US and in the EU.

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Speaker 1: And then there's the digital ad market.

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Speaker 6: You know.

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Speaker 5: I think Meta was able to allay some concerns already

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Speaker 5: in the earnings call yesterday, but it is susceptible to

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Speaker 5: fluctuations in the economy that really can impact advertiser demand.

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Speaker 4: Jasmine Mberg, principal analysts over in Insider Intelligence, with the

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Speaker 4: Meta story, thank you very much. Let's get to the

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Speaker 4: Apple story and Apple earnings with Dani's, senior analysts of

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Speaker 4: equity research at web Bush Securities, Danish real quick. The

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Speaker 4: stock is pairing its decline were now six tenths of

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Speaker 4: a percent. We had been down significantly more. What is

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Speaker 4: the story? A return to growth overall or China is

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Speaker 4: a problem.

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Speaker 7: Yeah, I mean the streets reading through this is iPhone

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Speaker 7: growths coming back next quarter is essentially massively conservative guidance.

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Speaker 7: And now you have AI coming into the Apple store,

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Speaker 7: so Jo nor One's selling Apple heading into that narrative,

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Speaker 7: and in my opinion, this is the start of the

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Speaker 7: renaissance of growth or.

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Speaker 4: Apple conservative guidance. So I mean go back, like what

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Speaker 4: we hang on are the words of Luca Maistreet. Basically

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Speaker 4: he said that that December quarter would be essentially flat.

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Speaker 4: We ended up with slight growth overall and weakness in China.

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Speaker 4: You know, we're not talking about like a big rebound here, Dan,

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Speaker 4: We're talking about them staying out of five consecutive quarters

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Speaker 4: of growth declines. If there is growth, where does it

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Speaker 4: come from.

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Speaker 7: What our view is you don't need to have hypergrowth

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Speaker 7: and iPhones row to mid single digit iPhone growth is

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Speaker 7: really what you need. Services is the key to evaluation

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Speaker 7: one point five to one point six trillion. And then

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Speaker 7: look at their active in Starblands when they just need

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Speaker 7: the update two point two billion. So you now have

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Speaker 7: that that golden and stall base and now you're selling

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Speaker 7: AI and so that that's a narrative that in my

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Speaker 7: investors are just going to continue to sit here and

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Speaker 7: buy up the depths.

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Speaker 3: So when you're looking at the overall strength of new products, Dan,

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Speaker 3: there has been so much hand ringing about the iPhone fifteen,

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Speaker 3: then today we're going to talk about it.

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Speaker 1: A lot.

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Speaker 3: In a moment the Vision Pro goes on sale. How

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Speaker 3: much is that in any way going to be a

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Speaker 3: catalyst for liking Apple's tech because it was under pressure

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Speaker 3: when we started to think about, well, the fact that

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Speaker 3: the overall watch was pulled and we questioned ultimately the

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Speaker 3: underlying technology of Apple.

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Speaker 7: Look, I think, but again again and Apple continues to

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Speaker 7: count out. I mean, you will talk more about the

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Speaker 7: Vision Pro, but originally we had three hundred thousand units

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Speaker 7: for Vision Pro. Now we think for the year it's

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Speaker 7: six hundred two thousand and two years from now, I

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Speaker 7: think this is a sub fifteen hundred dollar device that's

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Speaker 7: going to look like Sunblosh. And it just goes back

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Speaker 7: to the form factor and why you own Apple here

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Speaker 7: some of the parts. I believe a year from now,

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Speaker 7: it's a four trillion dollar market.

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Speaker 3: Okay, So give us that catalyst. Give us what is

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Speaker 3: it a slow grind, a slow belief, a commitment of investors,

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Speaker 3: or is there something that snaps down that makes us

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Speaker 3: rebuy and decide to drive the stock back to a

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Speaker 3: four trillion Well.

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Speaker 7: I think it's the AI app store, we believe starts

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Speaker 7: to get talked about it. WWBC in June and then

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Speaker 7: iPhone sixteen as well as iPhone seventeen. They're gonna have

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Speaker 7: more AI technology, generative AI driven into that. And then

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Speaker 7: you look at that install based two point gwo billion.

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Speaker 7: There was one hundred million more than we were expecting.

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Speaker 7: This is the start of a renaissance of growth. It's

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Speaker 7: my view of where Meta was eighteen months ago. Street

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Speaker 7: did not realize at the time. I think eighteen months

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Speaker 7: from now we worked back at This is a seminal moment.

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Speaker 4: Dan, I want to go back to China. I want

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Speaker 4: to understand what's happening. This is what Luka Maistreet told

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Speaker 4: us that Apple's disappointed with the decline in China, but

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Speaker 4: it's a very competitive market. Compare that with what he

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Speaker 4: said in his opening remarks on the call. He cited

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Speaker 4: that Cantar data that Apple occupies four of the top

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Speaker 4: six handset slots in Greater China in the prior quarter.

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Speaker 4: They said, this isn't an iPhone problem, this is Mac

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Speaker 4: and iPad where we had not had a refresh cycle.

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Speaker 4: Explain the contrast in those two statements.

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Speaker 7: Yeah, Well, there's definitely not Chimpan and Rosemes in Beijing.

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Speaker 7: I mean they're clearly going through a headwinds. Huawe to geopolitical.

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Speaker 7: But our view is, you have two hundred million iPhones

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Speaker 7: in China and they gained three inchre BIPs of market

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Speaker 7: share the last eighteen months. But Apple has been here before.

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Speaker 7: They've navigated challenges again and again. So I think when

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Speaker 7: you look for you've been able to do and the

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Speaker 7: installers they're basically being cautious. But I think we see

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Speaker 7: growth second after the year return and we view this

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Speaker 7: as more of them navigating headwinds rather than the start

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Speaker 7: of some structural problem that the bears have been talking

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Speaker 7: about for the last two trillion of marketcap.

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Speaker 8: Up con.

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Speaker 3: Dan, I's always great to catch up with you. Where

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Speaker 3: in the world are you? We don't know. Potentially, it

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Speaker 3: looks like an airport at the moment analysts of equity

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Speaker 3: research where Bush Securities stay well, friend, have a great weekend.

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Speaker 3: If you are coming up, we're going to be breaking

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Speaker 3: down the latest numbers from the jobs report. Sylvia and

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Speaker 3: Martin shivik Is can be joining our CEO of the

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Speaker 3: Workforce Management Platform, Deputy. Let's go back to where these

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Speaker 3: markets are training at the moment. In amongst the earnings

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Speaker 3: there is a whole load of impact coming from the

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Speaker 3: macro picture. Today NASDAK drives higher one point two percent, lead,

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Speaker 3: of course, by some mega moves in meta that we

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Speaker 3: were just discussing Amazon doing well. We're digging into that

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Speaker 3: in a moment. But the ten year yield phenomenal sell

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Speaker 3: off eighteen basis points higher on the two year. We're

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Speaker 3: seeing significant moves on the tenure as well across the curve.

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Speaker 3: Why absolutely blow out report when it comes to the

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Speaker 3: overall job surge three undred fifty three thousand in the

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Speaker 3: last month. What then, of all the tech layoffs that

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Speaker 3: we've been seeing. It seems as though this economy is

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Speaker 3: still going strong, and it means the Federal Reserve is

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Speaker 3: unlikely to be cutting anytime as soon as March, and

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Speaker 3: certainly it's vindicated and holding rates steady. Bitcoin, as I show,

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Speaker 3: actually up six cents percent despite the US dollar managing

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Speaker 3: to rally on the back of those numbers that make

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Speaker 3: macro data as well. But ed, this picture is so

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Speaker 3: surprising when you think of our area of technology and

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Speaker 3: just the ongoing narrative of job losses.

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Speaker 4: I'm just going to read the numbers again, because you're

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Speaker 4: exactly right and if you've got X look at the

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Speaker 4: number of finn what do we used to call it whatever?

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Speaker 4: People that talk about finance on formerly known as Twitter

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Speaker 4: platform finish number exactly, but it's a blowout, right, three

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Speaker 4: hundred and fifty three thousand jobs added in January, higher

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Speaker 4: than all economist estimates. The bulk of the data showing

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Speaker 4: more employment, higher pay, and payroll increases across all industries.

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Speaker 4: I guess the question where do we sit with technology?

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Speaker 4: So let's bring in Sylvia Martinshevik for her take on this.

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Speaker 4: She's the CEO of Global Software Platform Deputy, which recently

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Speaker 4: put out a report on the change is expected in

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Speaker 4: the workforce this year. We're trying to understand what's happening

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Speaker 4: in the economy and in the technology sector. There is,

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Speaker 4: forgive the pun, but an artificial thing happening with artificial intelligence,

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Speaker 4: the muddies the picture of hiring, in particular your reaction

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Speaker 4: to that number this morning.

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Speaker 6: Good morning, and thank you so much for having me. Yes,

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Speaker 6: we are seeing that for the twenty fourth consecutive month,

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Speaker 6: the unemployment rate is sub four percent. And yet you know,

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Speaker 6: we're hearing so much about AI taking jobs away and

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Speaker 6: what we at Deputy obsess about is how will AI

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Speaker 6: impact hourly workers? These are the frontline workers, whether they're

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Speaker 6: nurses or retail workers. And what we're hearing from hourly workers,

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Speaker 6: they themselves are reading the same reports, and you know,

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Speaker 6: they believe that AI is going to impact and change

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Speaker 6: their jobs and roles. But what we find is that

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Speaker 6: in most scenarios, AI is more likely to complement specific

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Speaker 6: work tasks rather than replace the workers.

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Speaker 1: And really, when you think.

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Speaker 6: About the workers that we support at Deputy, whether that

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Speaker 6: again are workers and elderly care or hospitality or services,

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Speaker 6: we all prefer the human touch in those jobs, and

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Speaker 6: those jobs are there's still a lot of lack of

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Speaker 6: employees in those jobs.

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Speaker 3: And what's interesting about your report as well, humans are

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Speaker 3: still cheaper than AI in many of these roles at

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Speaker 3: the moment, and well, we're still all testing artificial intelligence,

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Speaker 3: whether or not we really get the implication of being

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Speaker 3: able to do more with less. But Sylvia, what's really

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Speaker 3: interesting this job support was women one hundred and ninety

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Speaker 3: eight thousand increase in employment for women, so participation going up,

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Speaker 3: making up for a callback in men. And you had

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Speaker 3: some interesting thoughts about how much AI is going to

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Speaker 3: help or hinder females in the workforce.

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Speaker 6: Absolutely, we cannot talk about labor markets without talking about women.

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Speaker 6: The constitute over fifty percent of hourly workforce, So this

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Speaker 6: is an incredibly important topic.

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Speaker 1: And when you think about.

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Speaker 6: Historically what were the barriers to women entering workforce, we

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Speaker 6: know it's childcare, accessibility, and affordability, and it's also lack

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Speaker 6: of predicative But you know, at Deputy we ask what

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Speaker 6: do women want from their work and how can technology

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Speaker 6: enable that? And what we found is that women want

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Speaker 6: more predictability and they want more flexibility when it comes

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Speaker 6: to their weekly work schedules. And you know, our mothers

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Speaker 6: and grandmothers work nine to five, but women of today

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Speaker 6: Gen Z and millennials, they don't want nine to five shifts,

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Speaker 6: And so how can technology help that is Actually.

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Speaker 1: We believe that it can be a great enabler.

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Speaker 6: Micro shifts is one specific trend that we're seeing where

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Speaker 6: women work for a couple of hours in the morning,

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Speaker 6: then they take care of their kids or their aging parents,

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Speaker 6: and then they go back to work and work a

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Speaker 6: couple of hours at night. So that micro shift trend

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Speaker 6: is something that we believe technology can help. So We

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Speaker 6: really do believe that more tech in this space will

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Speaker 6: provide more opportunities for women to continue to re enter

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Speaker 6: workforce after childbearing.

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Speaker 3: Love a bit of optimism around the AI story on

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Speaker 3: what felt like a week weather wasn't much. Sylvia mantinshevik me,

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Speaker 3: thank you so much, CEO of Deputy.

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Speaker 4: It's the official release day for Apple's big bet on

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Speaker 4: virtual reality, the Vision Pro.

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Speaker 1: Bloomberg.

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Speaker 4: Stavely is live from Manhattan outside the flagship Apple's store.

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Speaker 4: The doors are open, it's on sale. What have you

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Speaker 4: been up to?

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Speaker 9: Well, I've been here since about seven o'clock when it

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Speaker 9: was slightly warm than it is now, I have to say.

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Speaker 9: And at seven there was a healthy line of people

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Speaker 9: waiting to head straight in and be some of the

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Speaker 9: first to buy this new Vision Pro, which of course

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Speaker 9: went on sale today for thirty five hundred dollars. Tim Cook,

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Speaker 9: the Apple CEO, has expected. He was here. He opened

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Speaker 9: the store, came out, greeted everyone said thanks very much,

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Speaker 9: and all the usual things we've come to expect from

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Speaker 9: these first sales days for Apple, and then downstairs to

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Speaker 9: say there's a decent amount of excitement people. It takes

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Speaker 9: about twenty minutes to get this thing fitted. So people

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Speaker 9: were doing that and you know, seeing all the features

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Speaker 9: were and then emerging shortly after. So it's not quite

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Speaker 9: an iPhone day ed. I mean, the line is definitely

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Speaker 9: gone now you can just head straight in if you'd like.

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Speaker 9: But a significant amount of excitement I think for the

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Speaker 9: vision pro on this first morning.

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Speaker 3: Dave as lucky enough to be flanking you at seven

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Speaker 3: am and heading down there and having a chat with

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Speaker 3: Tim Cook, and he seemed to be thinking that really

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Speaker 3: it's the intuitive nature of this device that's got people

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Speaker 3: really excited. The fact that you're just using your eyes,

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Speaker 3: the fact that you're just using your own hands, you

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Speaker 3: haven't got a controller. He himself also really liking the

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Speaker 3: productivity use of it. But from your perspective, what do

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Speaker 3: you like about it? You've tried and I know you're

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Speaker 3: a bit of an addict to the quest for example,

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Speaker 3: what about this particular iteration. Well, let's see what I.

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Speaker 9: Think is interesting here, Caroline, is you know, what are

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Speaker 9: we going to use these things for? And in Apple's case,

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Speaker 9: they seem to you know, they're targeting extremely premium I guess,

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Speaker 9: more immersive, higher quality experience where productivity and entertainment seem

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Speaker 9: to be the focus. Meta's approach has been something a

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Speaker 9: bit cheaper. It's only five hundred dollars compared to thirty

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Speaker 9: five hundred dollars, and you can move around with it.

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Speaker 9: You can do the exercise is something I think is

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Speaker 9: really fun on that device. They're two sort of different philosophies,

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Speaker 9: and Apple's philosophy comes with that bigger price point as well.

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Speaker 9: Where I think Apple may over time get the upper

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Speaker 9: hand is that, you know, this is the V one

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Speaker 9: of this product, and Tim Cook has been kind of

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Speaker 9: stressing that as well, but this is a new entry

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Speaker 9: for them into a new computing format. The idea that

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Speaker 9: this is going to get better and cheaper, you know,

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Speaker 9: that's clear and the same way the iPhone improves over time.

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Speaker 9: So I think that's what's going to be interesting here.

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Speaker 9: Is not V one as we've seen today, but V two,

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Speaker 9: v three. If you can come down in price, be

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Speaker 9: a bit lighter, maybe less bulky, I think that would

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Speaker 9: be when you can really tell whether this is genuinely

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Speaker 9: a new, a smash hit, new Apple product, or whether

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Speaker 9: it's something a bit more.

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Speaker 3: Niche savely doing your duty down there in rain, we

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Speaker 3: really appreciate your opinion on this particular device. We thank

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Speaker 3: you for it. Davely on Fifth Avenue, I said a

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Speaker 3: quick check on these markets, said because, but the NASDAK

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Speaker 3: manages to outperform even though we're worried about a strong

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Speaker 3: macro picture. That means perhaps a federal reserve ain't going

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Speaker 3: to be cunning as soon as Mart. But dig into

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Speaker 3: what's driving the Nasdaq one hundred, just sea of Green.

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Speaker 3: Even Apple turns up to run well less than a

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Speaker 3: point higher, but that's after their numbers showed, yes, a

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Speaker 3: return to revenue growth, aching out that two percent. The

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Speaker 3: market had anticipated a one percent. But remember after four

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Speaker 3: straight quarters of declines in revenue, that was a standout.

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Speaker 3: Despite that weakness in China where we saw revenue off

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Speaker 3: by thirteen percent, but better absolute extraordinary up twenty percent,

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Speaker 3: new record high, and we're still seeing of course, they're

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Speaker 3: managing to be tripling profit. They're really driving up revenue growth.

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Speaker 3: They're going back to the basis of what's good at

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Speaker 3: advertising as well as still investing in their AI. And

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Speaker 3: then we leave you to Amazon up more than seven percent,

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Speaker 3: best online sales growth since early in the pandemic. This

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Speaker 3: is about quickert shipping times. It's about job cuts. This

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Speaker 3: is about discipline, and we can get to it with

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Speaker 3: our next guest ed.

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Speaker 4: Yeah, I think that there's a really interesting difference with Amazon,

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Speaker 4: and that is principally, hey, look at the profit we're

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Speaker 4: going to hit in the current course, so let's stick

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Speaker 4: with Amazon. With Stephan Slewinski, global head of Software Research

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Speaker 4: at BNP powabout exam and it just goes down to fundamentals.

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Speaker 4: We love exciting stories metas about AI and competition in

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Speaker 4: ads and apples about China and vision pro. For me,

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Speaker 4: Amazon is just about we're going to make a lot

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Speaker 4: of money in the current period, and it's a lot

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Speaker 4: more than the street thought.

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Speaker 10: Hi, thanks for having me on. So you're absolutely right. Aws.

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Speaker 10: Amazon Web Services squeaked by with thirteen percent growth, but

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Speaker 10: that was good enough. They are still losing share, we think,

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Speaker 10: to Microsoft Azure, but we're seeing a recovery in cloud computing,

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Speaker 10: large deals being signed, optimization ending, and that allowed for

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Speaker 10: the market to focus on those North American margins, which

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Speaker 10: they're able to lift and beat expectations. And I think

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Speaker 10: what was important as well is with the Q one guidance,

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Speaker 10: they've actually left more room for upside. So if you

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Speaker 10: look at the Q one guide eight to twelve billion

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Speaker 10: of EBIT, if you assume Amazon Web Services margins remain

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Speaker 10: flatish at twenty nine thirty percent, you assume internationals to

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Speaker 10: loses some money, that actually implies the North American margins

438
00:23:24,280 --> 00:23:27,440
Speaker 10: would go down from six to four percent. That's unlikely.

439
00:23:27,840 --> 00:23:30,040
Speaker 10: The company gave us reasons why we should continue to

440
00:23:30,040 --> 00:23:32,800
Speaker 10: see efficiencies there, so I think people see potential for

441
00:23:32,880 --> 00:23:34,120
Speaker 10: beats coming ahead as well.

442
00:23:35,600 --> 00:23:38,560
Speaker 4: I've not ever heard of that a company guiding conservatively

443
00:23:38,800 --> 00:23:43,520
Speaker 4: and leaving room for upside. I'm just kidding the thing

444
00:23:43,520 --> 00:23:47,320
Speaker 4: that I'm interested into the advertising business because aws one

445
00:23:47,320 --> 00:23:50,280
Speaker 4: on one with Azure, we know the competition there, but

446
00:23:50,359 --> 00:23:54,400
Speaker 4: Microsoft doesn't have that right now, add business, how much

447
00:23:54,400 --> 00:23:55,920
Speaker 4: of a strength is that for Amazon?

448
00:23:57,560 --> 00:23:59,720
Speaker 10: I mean, certainly the ad business plays a good part

449
00:23:59,720 --> 00:24:03,119
Speaker 10: of their online business, and that's been growing healthily in

450
00:24:03,119 --> 00:24:05,840
Speaker 10: the mid twenties, and that's helping that margin as well. So,

451
00:24:05,880 --> 00:24:08,119
Speaker 10: as you pointed out earlier, you know, Amazon was a

452
00:24:08,160 --> 00:24:11,560
Speaker 10: company that in twenty twenty two was doing sort of

453
00:24:11,560 --> 00:24:14,479
Speaker 10: a one percent margin. The market thinks that that can

454
00:24:14,520 --> 00:24:17,320
Speaker 10: get up towards ten percent. Here in twenty twenty five,

455
00:24:17,400 --> 00:24:20,760
Speaker 10: and growing ADS is a part of that. But I

456
00:24:20,800 --> 00:24:22,280
Speaker 10: do think we need to keep an eye on what's

457
00:24:22,280 --> 00:24:26,679
Speaker 10: happening with AWS versus Azure. Amazon Web Services is fifty

458
00:24:26,720 --> 00:24:29,880
Speaker 10: percent of the cloud computing market if you look at

459
00:24:29,960 --> 00:24:33,680
Speaker 10: just Microsoft, Amazon, and Google together, But in twenty twenty three,

460
00:24:33,840 --> 00:24:36,480
Speaker 10: if you just look at the incremental revenue those three

461
00:24:36,560 --> 00:24:39,760
Speaker 10: generated in twenty twenty three, actually Amazon's share was down

462
00:24:39,760 --> 00:24:43,240
Speaker 10: to thirty five percent, with Microsoft Azure at forty five percent,

463
00:24:43,600 --> 00:24:46,399
Speaker 10: and that's thanks to obviously the open eye relationship and

464
00:24:46,440 --> 00:24:50,239
Speaker 10: what Microsoft and Google are doing on AI. I do

465
00:24:50,280 --> 00:24:53,640
Speaker 10: think that gap may close again as AWS benefits maybe

466
00:24:53,640 --> 00:24:56,040
Speaker 10: a bit more from the end of optimization, but that

467
00:24:56,160 --> 00:24:58,040
Speaker 10: is something to watch as some of those share losses

468
00:24:58,080 --> 00:25:00,560
Speaker 10: continuing on the cloud computing side.

469
00:25:01,320 --> 00:25:04,159
Speaker 3: I'm interested in your price target an ultimate sort of

470
00:25:04,400 --> 00:25:07,360
Speaker 3: neutral rating on this stop when we're thinking of one

471
00:25:07,359 --> 00:25:11,560
Speaker 3: point seven trillion dollar market capitalization, that's still enormous. You see, though,

472
00:25:11,560 --> 00:25:13,439
Speaker 3: what I think a price targeting correct me if I'm

473
00:25:13,440 --> 00:25:15,600
Speaker 3: wrong of one hundred and fifty so below where we're

474
00:25:15,640 --> 00:25:19,640
Speaker 3: currently trading. Why that conservative nature of coming from U Steffan.

475
00:25:21,520 --> 00:25:23,639
Speaker 10: We did raise that today one sixty, but we are

476
00:25:23,680 --> 00:25:26,600
Speaker 10: still neutral. But we do think that all three cloud

477
00:25:26,640 --> 00:25:31,000
Speaker 10: computing companies benefit this year from Jenai. So that's Microsoft Azure,

478
00:25:31,040 --> 00:25:34,600
Speaker 10: that's Google Cloud, that's Amazon Web Services, and we actually

479
00:25:34,640 --> 00:25:37,080
Speaker 10: think that that's a better way of playing Jenai this

480
00:25:37,200 --> 00:25:39,920
Speaker 10: year than the SaaS companies where we may see some disappointments,

481
00:25:39,920 --> 00:25:43,960
Speaker 10: and that's Microsoft Copilot, it's maybe Adobe Firefly or even

482
00:25:44,000 --> 00:25:46,760
Speaker 10: Service now with proclus where we may not see that

483
00:25:46,800 --> 00:25:51,000
Speaker 10: revenue generation this year. When we look at Amazon versus Microsoft,

484
00:25:51,040 --> 00:25:54,199
Speaker 10: we do prefer Microsoft. We are outperformed there, there is

485
00:25:54,240 --> 00:25:57,320
Speaker 10: a valuation gap. It's shrunk, but you are on sort

486
00:25:57,320 --> 00:26:00,360
Speaker 10: of twenty seven times earnings for Microsoft on twenty twenty five,

487
00:26:00,720 --> 00:26:03,840
Speaker 10: about thirty times for Amazon, and you still do have

488
00:26:04,320 --> 00:26:07,560
Speaker 10: much higher margins, of course, much better returns at Microsoft,

489
00:26:07,840 --> 00:26:10,520
Speaker 10: and probably even higher revenue growth. So we think all

490
00:26:10,560 --> 00:26:12,760
Speaker 10: three will benefit, but we have to have some preferences,

491
00:26:12,800 --> 00:26:14,480
Speaker 10: and that's why we sick with Microsoft.

492
00:26:14,920 --> 00:26:17,879
Speaker 3: Stefan great for that context into play for us. We

493
00:26:17,920 --> 00:26:20,520
Speaker 3: thank you so much. Stefan Stowinski, Global head of Software

494
00:26:20,560 --> 00:26:24,199
Speaker 3: research over at BMP parabat Exam. We thank him for it. Meanwhile,

495
00:26:24,280 --> 00:26:27,280
Speaker 3: let's get back to the other big stock on Deck

496
00:26:27,280 --> 00:26:30,640
Speaker 3: Capital's earnings. BlueBag Intelligence senior analyst an rag Rana joins

497
00:26:30,680 --> 00:26:33,120
Speaker 3: us An Anurag. Well, the share is actually turning positive

498
00:26:33,160 --> 00:26:36,440
Speaker 3: after a four percent slump. Are we managing to counteract

499
00:26:36,480 --> 00:26:38,520
Speaker 3: it with the Vision pro news or is it more

500
00:26:38,520 --> 00:26:40,879
Speaker 3: that we're getting okay in fact, that China will be

501
00:26:41,000 --> 00:26:41,919
Speaker 3: short term in nature.

502
00:26:43,040 --> 00:26:45,000
Speaker 11: Yeah, I have no idea. I'm a bit surprised at

503
00:26:45,040 --> 00:26:47,320
Speaker 11: that too. I mean, I think the print last night

504
00:26:47,359 --> 00:26:50,200
Speaker 11: basically said there's going to be very little growth this year.

505
00:26:50,280 --> 00:26:54,399
Speaker 11: So it is concerning, and I don't think Vision broken

506
00:26:54,440 --> 00:26:57,240
Speaker 11: off said that. Listen, even if you sell one million units,

507
00:26:57,320 --> 00:26:59,600
Speaker 11: which is way above anybody else in the world, as

508
00:26:59,600 --> 00:27:01,760
Speaker 11: the model as well, that's three and a half billion

509
00:27:01,800 --> 00:27:05,000
Speaker 11: in revenue Apple generates, or you know, the consensus is

510
00:27:05,000 --> 00:27:07,399
Speaker 11: around three around four hundred billion, so that would be

511
00:27:07,680 --> 00:27:10,479
Speaker 11: you know, less than one percent of total you know,

512
00:27:10,520 --> 00:27:13,600
Speaker 11: revenue addition to Apple. So this is not a needle

513
00:27:13,600 --> 00:27:16,280
Speaker 11: movement when it comes to sales. I mean, China is

514
00:27:16,280 --> 00:27:19,160
Speaker 11: a big factor and then we see nothing but disappointment there.

515
00:27:20,840 --> 00:27:24,040
Speaker 4: Karen Ana Rag's keeping it real, which if you read

516
00:27:24,040 --> 00:27:26,320
Speaker 4: some of the notes out this morning, is a bit

517
00:27:26,359 --> 00:27:28,399
Speaker 4: of a standout in that respect because a lot of

518
00:27:28,440 --> 00:27:32,919
Speaker 4: people do see growth. I still don't understand this issue

519
00:27:32,920 --> 00:27:34,720
Speaker 4: of China. You know, we've done a lot of it

520
00:27:34,760 --> 00:27:37,080
Speaker 4: on the show, but one thing that we haven't discussed

521
00:27:37,359 --> 00:27:41,920
Speaker 4: is services revenue in Europe and the installed base. You know,

522
00:27:42,000 --> 00:27:44,520
Speaker 4: the installed base continues to grow. So even if you

523
00:27:44,520 --> 00:27:48,000
Speaker 4: look at one market geographically and say weakness in China

524
00:27:48,119 --> 00:27:52,280
Speaker 4: or one product category, weakness in whatever, overall more people

525
00:27:52,320 --> 00:27:54,760
Speaker 4: are buying Apple products and they have Apple products, and

526
00:27:54,800 --> 00:27:56,240
Speaker 4: the services side is doing good.

527
00:27:57,840 --> 00:27:58,040
Speaker 8: Yeah.

528
00:27:58,119 --> 00:27:59,639
Speaker 11: See one of the things I have to talk about.

529
00:27:59,800 --> 00:28:03,280
Speaker 11: We all know Apple's a phenomenal company, amazing you know,

530
00:28:03,359 --> 00:28:07,119
Speaker 11: install based services, all sorts of things that's going. But

531
00:28:07,200 --> 00:28:08,600
Speaker 11: at the same time, you want to talk about the

532
00:28:08,600 --> 00:28:12,720
Speaker 11: revenue model. How much can this grow this year, next year.

533
00:28:13,640 --> 00:28:15,479
Speaker 11: This year it's going to be less than five percent.

534
00:28:16,000 --> 00:28:18,679
Speaker 11: Next year maybe five percent. So the question is how

535
00:28:18,760 --> 00:28:20,920
Speaker 11: much do you pay for a stock it's going to grow,

536
00:28:21,040 --> 00:28:23,040
Speaker 11: you know, four five percent. And you know, I was

537
00:28:23,040 --> 00:28:25,919
Speaker 11: listening to your colleague before. When you look at somebody

538
00:28:26,000 --> 00:28:28,440
Speaker 11: something like an aw sort of Microsoft, you're going to

539
00:28:28,440 --> 00:28:31,840
Speaker 11: get double digit growth for multiple years to come. So

540
00:28:31,960 --> 00:28:33,440
Speaker 11: you you take that into account.

541
00:28:33,480 --> 00:28:34,920
Speaker 12: And then you you know, match up.

542
00:28:35,480 --> 00:28:38,560
Speaker 11: Apple has a lot to explain here that how do

543
00:28:38,600 --> 00:28:40,680
Speaker 11: they get to that seven eight percent growth here? And

544
00:28:40,720 --> 00:28:42,560
Speaker 11: I think it's it's going to be a challenging task

545
00:28:42,680 --> 00:28:44,680
Speaker 11: at least for this year and next year because at.

546
00:28:44,600 --> 00:28:46,760
Speaker 3: The moment, the market price is for yet another revenue

547
00:28:46,800 --> 00:28:49,760
Speaker 3: decline in their fiscal second quarter. So back to what

548
00:28:49,800 --> 00:28:52,280
Speaker 3: we were seeing all of last year. I mean, any

549
00:28:52,320 --> 00:28:56,560
Speaker 3: exuberance about this new VRAR reality that we get on

550
00:28:56,600 --> 00:28:57,520
Speaker 3: sale today on our.

551
00:28:58,880 --> 00:29:01,480
Speaker 11: No, not on that, but you know he did utter

552
00:29:01,520 --> 00:29:04,760
Speaker 11: the magic word Jenny I on the call, and then

553
00:29:04,960 --> 00:29:08,160
Speaker 11: you're gonna talk about launching some new tubes and Slash

554
00:29:08,200 --> 00:29:10,840
Speaker 11: products sometime in the second half of this year. I

555
00:29:10,880 --> 00:29:13,680
Speaker 11: think that's a wild guard that could you know, basically

556
00:29:14,120 --> 00:29:17,040
Speaker 11: prove me wrong, because if they're able to come up

557
00:29:17,040 --> 00:29:20,160
Speaker 11: with certain things that are embedded in iOS eighteen that

558
00:29:20,280 --> 00:29:23,280
Speaker 11: will really make productivity higher, then you don't really need

559
00:29:23,320 --> 00:29:25,360
Speaker 11: to download an app and do a lot of that stuff.

560
00:29:25,560 --> 00:29:27,720
Speaker 11: And for that maybe you need to go to iPhone

561
00:29:27,760 --> 00:29:30,400
Speaker 11: sixteen or the next version of the iPhone that may

562
00:29:30,440 --> 00:29:34,360
Speaker 11: have some capabilities and then can drive the refresh cycle

563
00:29:34,400 --> 00:29:35,920
Speaker 11: of iPhone that we've been.

564
00:29:35,840 --> 00:29:40,800
Speaker 4: All waiting for Bloomberg Intelligence senior analysts Andamgrana keeping it real.

565
00:29:41,120 --> 00:29:41,840
Speaker 4: Thank you very much.

566
00:29:41,880 --> 00:29:42,560
Speaker 1: Happy Friday.

567
00:29:42,840 --> 00:29:47,200
Speaker 4: Coming up on the program, my exclusive conversation with invidiac

568
00:29:48,120 --> 00:29:51,840
Speaker 4: Jensen Huang. This was big picture and it was t

569
00:29:52,400 --> 00:30:04,960
Speaker 4: check it out next. This is Bloomberg Technology. Jensen Wang

570
00:30:05,120 --> 00:30:08,520
Speaker 4: says that artificial intelligence will matter to every single country

571
00:30:08,520 --> 00:30:12,120
Speaker 4: and industry on the planet, and crucially that's going to

572
00:30:12,200 --> 00:30:15,520
Speaker 4: drive up sovereign AI demand for his company's products. I

573
00:30:15,520 --> 00:30:18,360
Speaker 4: spoke to Nvidia's CEO yesterday. Listen to this.

574
00:30:21,080 --> 00:30:30,080
Speaker 12: You have seen India, Japan, and France, Canada, now Southeast Asia,

575
00:30:30,160 --> 00:30:35,120
Speaker 12: Singapore speak up about the importance of investing in sovereign

576
00:30:35,160 --> 00:30:40,000
Speaker 12: AI capabilities. It has become abundantly clear to each one

577
00:30:40,040 --> 00:30:43,760
Speaker 12: of the countries that their natural resource, which is the

578
00:30:43,920 --> 00:30:48,800
Speaker 12: data of their country, should be should be refined and

579
00:30:48,960 --> 00:30:53,240
Speaker 12: produce intelligence of their country for their country. And that

580
00:30:53,360 --> 00:30:56,760
Speaker 12: capability of refining the data of their country, of their

581
00:30:56,760 --> 00:31:00,400
Speaker 12: country and turn it into their artificial intelligence, it is

582
00:31:00,480 --> 00:31:04,320
Speaker 12: now possible in quite a quite a democratized way. Almost

583
00:31:04,320 --> 00:31:06,200
Speaker 12: every country should be able to do it for themselves.

584
00:31:06,920 --> 00:31:11,320
Speaker 12: And and what's needed, of course is the technology and

585
00:31:11,360 --> 00:31:15,000
Speaker 12: the know how of standing up AI infrastructure, and that's

586
00:31:15,040 --> 00:31:19,160
Speaker 12: where we could be quite helpful to to various regions.

587
00:31:19,480 --> 00:31:22,640
Speaker 12: And so I think that the the recognition of the

588
00:31:22,640 --> 00:31:26,640
Speaker 12: importance of sovereign AI capabilities is now quite quite global.

589
00:31:26,800 --> 00:31:30,200
Speaker 4: Jensen, does that recognition and your ability to help extend

590
00:31:30,280 --> 00:31:30,880
Speaker 4: to China.

591
00:31:31,160 --> 00:31:33,840
Speaker 12: Well, we're American company and we have to comply with

592
00:31:34,000 --> 00:31:38,040
Speaker 12: American policies, and whatever the rules and regulations are and

593
00:31:38,040 --> 00:31:41,680
Speaker 12: the laws are, will number one, comply with them, work

594
00:31:41,680 --> 00:31:46,920
Speaker 12: closely with the regulators and understand understand their intentions and

595
00:31:46,960 --> 00:31:51,480
Speaker 12: their desires, work within those boundaries, and be able to

596
00:31:51,480 --> 00:31:55,880
Speaker 12: create products for for the various countries that are involved.

597
00:31:56,280 --> 00:32:00,240
Speaker 12: Fully in compliant with the regulations that are never front

598
00:32:00,240 --> 00:32:04,120
Speaker 12: of us UH and beyond that, once we once we comply,

599
00:32:04,840 --> 00:32:07,160
Speaker 12: our goal are in the United States would love to

600
00:32:07,160 --> 00:32:10,360
Speaker 12: see us be a successful country and in one of

601
00:32:10,400 --> 00:32:14,320
Speaker 12: the pillars of national security of successful industries, and it

602
00:32:14,360 --> 00:32:20,280
Speaker 12: creates jobs and allows our country to stay ahead and technologically,

603
00:32:20,320 --> 00:32:24,880
Speaker 12: and so it is of a great interest of our

604
00:32:24,960 --> 00:32:28,600
Speaker 12: nation that our American companies are successful around the world.

605
00:32:29,080 --> 00:32:32,120
Speaker 12: And so once once we comply with the regulations, we'll

606
00:32:32,120 --> 00:32:36,240
Speaker 12: do our best to serve the local markets, and we

607
00:32:36,320 --> 00:32:42,400
Speaker 12: have full the we have excellent communications with with the administration.

608
00:32:42,600 --> 00:32:47,120
Speaker 4: How should we think about sovereign AI as a business

609
00:32:47,120 --> 00:32:49,600
Speaker 4: line for you? Is there a way that we can

610
00:32:49,720 --> 00:32:54,000
Speaker 4: understand how in videos work. Even if it's building supercomputers

611
00:32:54,040 --> 00:32:57,160
Speaker 4: like in the UK, for example, what proportion of your

612
00:32:57,200 --> 00:32:59,640
Speaker 4: overall business that will represent.

613
00:32:59,720 --> 00:33:04,640
Speaker 12: That's majority of the computing market has been the United

614
00:33:04,640 --> 00:33:08,560
Speaker 12: States and to a small to a much longer smaller

615
00:33:08,560 --> 00:33:13,040
Speaker 12: degree in China. For the very first time, every industry

616
00:33:13,120 --> 00:33:16,960
Speaker 12: would be every single country will become a computer industry,

617
00:33:17,120 --> 00:33:20,640
Speaker 12: and every industry will become a technology industry. And so

618
00:33:20,840 --> 00:33:26,120
Speaker 12: artificial intelligence or the automation uh the production at scale

619
00:33:26,160 --> 00:33:29,880
Speaker 12: of intelligence matters to every single country. It matters to

620
00:33:29,880 --> 00:33:32,440
Speaker 12: every single industry. And so for the very first time,

621
00:33:32,520 --> 00:33:36,600
Speaker 12: there's a there's a whole new computer market that is

622
00:33:36,680 --> 00:33:39,400
Speaker 12: going to be uh in in every single country, in

623
00:33:39,440 --> 00:33:43,840
Speaker 12: every single every single market. And UH it starts with

624
00:33:44,080 --> 00:33:49,520
Speaker 12: it starts with, of course, uh the native computer industry itself.

625
00:33:50,240 --> 00:33:53,520
Speaker 12: But you're seeing you're seeing a great adoption in healthcare,

626
00:33:53,600 --> 00:33:58,760
Speaker 12: great adoption and logistics uh in in transportation of course,

627
00:33:59,400 --> 00:34:02,200
Speaker 12: uh in many factoring in the large industry, so heavy

628
00:34:02,240 --> 00:34:06,560
Speaker 12: industries for the very first time. Because of generative AI,

629
00:34:07,160 --> 00:34:10,040
Speaker 12: computers are going to be computer technology is going to

630
00:34:10,080 --> 00:34:13,839
Speaker 12: impact literally every single industry in every single country.

631
00:34:15,040 --> 00:34:18,000
Speaker 4: And Nvidia CEO Jensen Van Kara is saying that data

632
00:34:18,120 --> 00:34:22,240
Speaker 4: is a country's natural resource. But for them, let's be honest,

633
00:34:22,280 --> 00:34:24,080
Speaker 4: it's a big growth market opportunity.

634
00:34:24,600 --> 00:34:28,319
Speaker 3: Absolutely phenomenal interview, just so wide ranging, so global in

635
00:34:28,360 --> 00:34:31,440
Speaker 3: its nature, kind of well, exactly what you do so well,

636
00:34:31,520 --> 00:34:34,000
Speaker 3: and we thank you for it. Great deep dive. Meanwhile,

637
00:34:34,080 --> 00:34:36,160
Speaker 3: we've got some breaking news coming to us in terms

638
00:34:36,200 --> 00:34:39,680
Speaker 3: of the podcasting area. Once again, we're starting to see

639
00:34:39,680 --> 00:34:42,960
Speaker 3: that continue to mount. We have Joe Rogan set to

640
00:34:43,000 --> 00:34:47,200
Speaker 3: renew his podcast deal with Spotify. We understand so Joe Rogan,

641
00:34:47,239 --> 00:34:49,640
Speaker 3: of course one of the number one players in terms

642
00:34:49,640 --> 00:34:52,360
Speaker 3: of the Spotify podcast offering and indeed one of the

643
00:34:52,400 --> 00:34:55,440
Speaker 3: most expensive for them. Joe Rogan is set to renew

644
00:34:55,440 --> 00:34:58,239
Speaker 3: his podcast deal with Spotify, and we will bring you

645
00:34:58,280 --> 00:35:00,239
Speaker 3: the deep dive as to how much that is all

646
00:35:00,280 --> 00:35:03,440
Speaker 3: going to be costing. Spotify TikTok Well users will no

647
00:35:03,520 --> 00:35:05,759
Speaker 3: longer hear the music of artists like Taylor Swift, like

648
00:35:05,880 --> 00:35:08,879
Speaker 3: Drake while using the app, since talks between the social

649
00:35:08,920 --> 00:35:11,960
Speaker 3: media platform and Universal Music Group. They failed here with

650
00:35:12,040 --> 00:35:15,279
Speaker 3: the details blue most Chris Palmery and Chris the date

651
00:35:15,560 --> 00:35:18,200
Speaker 3: was January the thirty first. It wasn't able to be

652
00:35:18,239 --> 00:35:20,919
Speaker 3: agreed upon. And the fight seems to be what from

653
00:35:20,960 --> 00:35:24,600
Speaker 3: UMG's perspective over AI and money and from TikTok's perspective

654
00:35:24,880 --> 00:35:26,480
Speaker 3: that we'll give you loads of free advertising.

655
00:35:26,520 --> 00:35:31,239
Speaker 8: Basically, yeah, I'm smiling because this is Grammy Week in

656
00:35:31,360 --> 00:35:35,960
Speaker 8: LA parties everywhere gearing up for Sunday's awards. It may

657
00:35:35,960 --> 00:35:39,320
Speaker 8: have been a total coincidence, but this was the perfect

658
00:35:39,320 --> 00:35:42,120
Speaker 8: time for Universal to do this. I'm going to get

659
00:35:42,120 --> 00:35:44,000
Speaker 8: a lot of sympathy from artists. It's going to be

660
00:35:44,040 --> 00:35:47,440
Speaker 8: the number one topic of conversation everywhere, and very awkward

661
00:35:47,520 --> 00:35:52,840
Speaker 8: for TikTok. They're a huge part of the marketing of

662
00:35:53,000 --> 00:35:56,720
Speaker 8: music these days. You know, billion users, over one hundred

663
00:35:56,719 --> 00:35:59,960
Speaker 8: billion in revenue, and yet only one percent of Universe

664
00:36:00,320 --> 00:36:03,839
Speaker 8: Music's revenue. And so this is going to have an

665
00:36:03,840 --> 00:36:08,239
Speaker 8: impact on TikTok, lesser impact on Universal, but everyone is

666
00:36:08,640 --> 00:36:10,080
Speaker 8: going to have something to say about this.

667
00:36:11,000 --> 00:36:13,920
Speaker 4: Chris, let's get some more in this breaking news sources

668
00:36:13,920 --> 00:36:17,759
Speaker 4: and telling Bloomberg that Joe Rogan's close to renewing a

669
00:36:17,800 --> 00:36:18,759
Speaker 4: deal with Spotify.

670
00:36:18,880 --> 00:36:24,680
Speaker 8: What are the details, Well, what we hear could be

671
00:36:24,680 --> 00:36:29,160
Speaker 8: announced you know this morning. It's going to be another

672
00:36:29,239 --> 00:36:32,560
Speaker 8: multi year extension. Is probably going to be an eye

673
00:36:32,560 --> 00:36:35,000
Speaker 8: popping number of the last deal was for two hundred

674
00:36:35,000 --> 00:36:37,440
Speaker 8: million for three years, although we may not get the

675
00:36:37,480 --> 00:36:41,640
Speaker 8: details immediately they Spotify has been taking a different tack

676
00:36:41,760 --> 00:36:46,400
Speaker 8: with their podcasts recently. The last deal with Rogan was exclusive,

677
00:36:46,480 --> 00:36:51,000
Speaker 8: although they put some highlights up online. This one may

678
00:36:51,040 --> 00:36:55,479
Speaker 8: be available on other platforms, so that would be a departure, all.

679
00:36:55,440 --> 00:36:58,200
Speaker 4: Right, Bloombos Chris Palm Mary with that breaking news and

680
00:36:58,239 --> 00:36:59,880
Speaker 4: some more details. Spotify up two percent.

681
00:37:00,040 --> 00:37:00,520
Speaker 12: Interesting.

682
00:37:00,800 --> 00:37:04,440
Speaker 4: Sticking with the music space, what if you could invest

683
00:37:04,480 --> 00:37:09,000
Speaker 4: in a hit song? Jukebox, which is currently seeking SEC approval,

684
00:37:09,800 --> 00:37:12,000
Speaker 4: is a platform that aims to provide people with the

685
00:37:12,040 --> 00:37:16,040
Speaker 4: opportunity to hold interests in music related investments. Here and

686
00:37:16,120 --> 00:37:19,000
Speaker 4: tell us more ahead of the Grammys is the company

687
00:37:19,120 --> 00:37:22,400
Speaker 4: CEO Scott Cohen. So for clarity, this is not something

688
00:37:22,440 --> 00:37:25,440
Speaker 4: you yet have approval for that is pending. But I

689
00:37:25,440 --> 00:37:28,000
Speaker 4: guess I start with the demand side. You must know

690
00:37:28,640 --> 00:37:31,640
Speaker 4: that this is something that either the everyday retail investor

691
00:37:32,239 --> 00:37:34,280
Speaker 4: or firms actually want to buy into.

692
00:37:35,760 --> 00:37:36,040
Speaker 9: Yeah.

693
00:37:36,120 --> 00:37:39,959
Speaker 2: I mean you're talking about maybe the first time they've

694
00:37:40,000 --> 00:37:44,560
Speaker 2: actually truly understood an investment they made. When we're talking

695
00:37:44,560 --> 00:37:47,520
Speaker 2: about the retail investor, they may invest in a tech sta,

696
00:37:47,760 --> 00:37:51,080
Speaker 2: but do they really know what's driving that. But when

697
00:37:51,120 --> 00:37:54,680
Speaker 2: you talk about music, there's something fundamental that people know

698
00:37:54,840 --> 00:37:58,279
Speaker 2: about music that this is a hit song and I'm

699
00:37:58,280 --> 00:38:01,000
Speaker 2: gonna listen to it at my ten year high school

700
00:38:01,000 --> 00:38:03,840
Speaker 2: reunion and my twenty year reunion, and we'll play it

701
00:38:03,880 --> 00:38:07,160
Speaker 2: at my wedding. You have a real feel for what

702
00:38:07,360 --> 00:38:09,239
Speaker 2: songs are valuable and what are not.

703
00:38:10,200 --> 00:38:14,440
Speaker 3: You've got the music rights yourself exclusively secured. I think

704
00:38:14,560 --> 00:38:16,480
Speaker 3: last time we wrote about it, is it about one

705
00:38:16,480 --> 00:38:19,839
Speaker 3: point seven billion dollars worth. Where are you sourcing that from?

706
00:38:19,840 --> 00:38:23,440
Speaker 3: There's been so many interesting deals. Beaver selling his catalog

707
00:38:23,960 --> 00:38:26,319
Speaker 3: to of course Hignosis. We seen Bob Dylan do the same,

708
00:38:26,400 --> 00:38:29,280
Speaker 3: John Legend. But where do you access the assets from?

709
00:38:30,000 --> 00:38:34,040
Speaker 2: What exactly those types of players? You know, as people

710
00:38:34,120 --> 00:38:37,840
Speaker 2: are acquiring these these catalogs, they're looking for new ways

711
00:38:37,960 --> 00:38:40,680
Speaker 2: to exploit them. And when I say exploit them, it's

712
00:38:40,920 --> 00:38:43,520
Speaker 2: bring it to the very people that made these artists

713
00:38:43,520 --> 00:38:46,520
Speaker 2: big in the first place, and allow the retail investor

714
00:38:46,560 --> 00:38:49,640
Speaker 2: to get in on these deals because we've all read

715
00:38:49,680 --> 00:38:52,359
Speaker 2: about it, you know, Bruce, and as you said, Bob

716
00:38:52,440 --> 00:38:55,840
Speaker 2: Dylan and Justin Bieber, like, these are amazing deals, but

717
00:38:56,400 --> 00:38:59,280
Speaker 2: nobody offered up any piece of it to the public.

718
00:38:59,320 --> 00:39:01,920
Speaker 2: So for the first time, now the public can join in.

719
00:39:03,040 --> 00:39:06,879
Speaker 4: So there's a question on value and valuation and appreciation.

720
00:39:07,120 --> 00:39:09,719
Speaker 4: Like we've done this on this show about sneakers. There

721
00:39:09,760 --> 00:39:13,800
Speaker 4: are platforms where you can trade sneakers and part of

722
00:39:13,840 --> 00:39:17,719
Speaker 4: the value relates to their scarcity or rarity. In the

723
00:39:18,080 --> 00:39:21,440
Speaker 4: context of a song, Isn't it just like whether everyone

724
00:39:21,640 --> 00:39:22,640
Speaker 4: likes that song or not.

725
00:39:23,600 --> 00:39:26,040
Speaker 2: No, No, I would look at it a very different way.

726
00:39:26,160 --> 00:39:30,920
Speaker 2: I mean, think about it. When music is played, somebody's

727
00:39:30,920 --> 00:39:33,120
Speaker 2: getting paid. I mean, I don't care.

728
00:39:33,239 --> 00:39:35,400
Speaker 1: You can go back however far you want, you know,

729
00:39:35,760 --> 00:39:38,600
Speaker 1: So what if it doesn't get played, what if it's

730
00:39:38,760 --> 00:39:40,200
Speaker 1: not get well.

731
00:39:40,840 --> 00:39:44,399
Speaker 2: What we're doing is listing songs that already will have

732
00:39:44,760 --> 00:39:48,200
Speaker 2: an earning's history. It's not songs that have never made it.

733
00:39:48,239 --> 00:39:51,960
Speaker 2: This isn't speculating on whether a song will be successful.

734
00:39:52,200 --> 00:39:55,640
Speaker 2: This is looking at once a song is successful, it's

735
00:39:55,680 --> 00:39:56,760
Speaker 2: always making money.

736
00:39:57,040 --> 00:40:01,319
Speaker 3: I mean making much money. Scott given for example, at

737
00:40:01,320 --> 00:40:04,080
Speaker 3: the moment UMG is at a loggerheads with TikTok because

738
00:40:04,080 --> 00:40:04,879
Speaker 3: they're not paying enough.

739
00:40:06,800 --> 00:40:10,480
Speaker 2: That's, if anything, that supports the thesis that music is

740
00:40:10,520 --> 00:40:14,640
Speaker 2: really valuable and and and and that is why they're

741
00:40:14,680 --> 00:40:17,799
Speaker 2: fighting for it. When we look at music, there's a

742
00:40:17,840 --> 00:40:20,919
Speaker 2: there's a very typical decay curve. Sure a song makes

743
00:40:20,960 --> 00:40:23,200
Speaker 2: a lot of money when it's first released and it

744
00:40:23,239 --> 00:40:26,200
Speaker 2: becomes a hit, and then it drops off pretty steadily

745
00:40:26,239 --> 00:40:29,520
Speaker 2: over the next few years. But then it hits its floor,

746
00:40:29,800 --> 00:40:33,400
Speaker 2: which is non zero, and then it earns money forever.

747
00:40:33,640 --> 00:40:35,960
Speaker 2: And if you look at the Goldman Sacks Report, I

748
00:40:36,000 --> 00:40:38,720
Speaker 2: think they're pegging it somewhere between six and eight percent

749
00:40:39,360 --> 00:40:42,320
Speaker 2: annual growth for the music industry over the next decade.

750
00:40:42,480 --> 00:40:42,719
Speaker 3: Yeah.

751
00:40:42,760 --> 00:40:45,759
Speaker 2: I mean, once a song makes money, it makes a

752
00:40:45,760 --> 00:40:48,520
Speaker 2: lot at the beginning, drops to a new level and

753
00:40:48,560 --> 00:40:51,799
Speaker 2: then slowly climbs. But then there's always this kind of

754
00:40:51,880 --> 00:40:55,200
Speaker 2: wild card. Maybe it gets into a big film or

755
00:40:55,760 --> 00:40:59,080
Speaker 2: you know TV, Like think about what happened on Stranger

756
00:40:59,160 --> 00:40:59,960
Speaker 2: Things last season.

757
00:41:00,200 --> 00:41:01,600
Speaker 1: Kate Bushy.

758
00:41:03,080 --> 00:41:06,799
Speaker 3: Jukebox CEO Scott Cohen diversification of investment. There, we thank you.

759
00:41:06,840 --> 00:41:08,799
Speaker 3: That does it for this edition of Bloomberg Technology.

760
00:41:09,920 --> 00:41:12,719
Speaker 4: Check out the pod. What a week this is Bloomberg

761
00:41:14,600 --> 00:41:14,640
Speaker 6: M