Speaker 1: From markhard where Innovation, Money and Power co line in
Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
Speaker 1: and Ed.
Speaker 2: Loved Love.
Speaker 3: Live from New York and San Francisco. This is Bloomberg
Speaker 3: Technology coming up. Chips in focus as equipment maker of
Speaker 3: prime materials. It does the points on its forecast, while
Speaker 3: Texas Instruments scores cash from the Chips act Plus.
Speaker 2: Epic Games launches a new mobile storefront. After years of
Speaker 2: legal wrangling with Apple and Google and.
Speaker 3: Seagrammare Edgar Brundman Junior as close to making a rival
Speaker 3: offer for Paramount is a bidding war brewing. First. I
Speaker 3: was checking on these markets because it is a good week.
Speaker 4: Ed.
Speaker 3: If you are along these markets, then that's that one
Speaker 3: hundred having its best week in the year since November.
Speaker 3: We're almost five percent. That is a call one point
Speaker 3: three trillion dollars being added to the overall benchmark. And
Speaker 3: it is a significant well sigh of relief post volatility
Speaker 3: of the last couple of weeks. Once again, we've got
Speaker 3: some consumer data just showing sentiment is on the up
Speaker 3: to date. It counts counteracts some of that weakness, and
Speaker 3: the housing data on the day. No, we're just done
Speaker 3: a little bit on the day, but it is a
Speaker 3: strong week. What are you looking at on the microad I'm.
Speaker 2: Going to go straight to Applied Materials and a company
Speaker 2: that makes the machines that make the chips. It's down
Speaker 2: three percent, be in the courter gone, but there were
Speaker 2: really high expectations in its forecast for the current period.
Speaker 2: Where the market wants to see that all this investment
Speaker 2: around AI in particular is translating into more equipment or
Speaker 2: chip manufacturing equipment investment. We'll get to that in just
Speaker 2: a moment. The other top story in the semiconductor space,
Speaker 2: Texas Instruments set to receive one point six billion dollars
Speaker 2: in Chip ACT grants and three billion dollars in loans
Speaker 2: the Buying Administration announced today marks the latest major award
Speaker 2: from the program that's designed to boost American semiconductor manufacturing.
Speaker 2: We're joined by Bloomozi and King here on set in
Speaker 2: San Francisco. A lot of the money's been allocated Texas
Speaker 2: Instruments makes all kinds of more basic chips. Just the
Speaker 2: terms that they've agreed with the administration here.
Speaker 5: Yeah, I mean, the way to look at this is
Speaker 5: nothing is set. A lot of money has been promised,
Speaker 5: But from a taxpayer's perspective, it's like, Okay, you have
Speaker 5: to do this, you have to go into production, actually
Speaker 5: build this, and then we'll give you the money. So
Speaker 5: that's the way to look at it from a general perspective.
Speaker 5: The flip side of it, Wall Street is like, this
Speaker 5: is how many dollars, how many cents on the EPs
Speaker 5: that they'll be gaining, how much less CAPEX will be spending.
Speaker 3: Still, they are spending a lot, and it is all
Speaker 3: about the focus on chips at the moment and the
Speaker 3: focus on AI. Just take us back to applying materials
Speaker 3: moment in because look, the numbers were good, but the
Speaker 3: forecast perhaps just not living up to the AI euphoria.
Speaker 5: Yeah, I mean there are two things going on here.
Speaker 5: Anything that's to do with high end logic, which is
Speaker 5: for data centers and by extension, AI is doing really well.
Speaker 5: There's a lot of demand for that. On the flip side,
Speaker 5: some of the types of chips that say, are for
Speaker 5: automakers or for industrial equipment, there's not a lot of
Speaker 5: strong demand growth there at the moment, So perhaps machinery
Speaker 5: orders for that particular sector are a little bit weaker.
Speaker 5: There's kind of a balance of factors going on there.
Speaker 2: That automotive parts kind of consistent with NXP that we've
Speaker 2: heard it on an ongoing basis. Just real quick, what's
Speaker 2: the difference between applied materials and ASML. You know, if
Speaker 2: you think about what those machines are actually used for.
Speaker 5: Yeah, I mean think about applied Materials as much more generalists.
Speaker 5: They make a whole range of different pieces of equipment.
Speaker 5: ASML is very specific. It's making lithography. They're essentially the
Speaker 5: lasers that are burning the holes to make the pattern
Speaker 5: on the chips. Applyed Materials is putting materials on those
Speaker 5: silicon wafers.
Speaker 2: Bloombergsy and King, thank you very much. Let's take a
Speaker 2: closer look at chips globally. Japan is applying foreign trade
Speaker 2: regulations to chip making equipment as part of its effort
Speaker 2: to secure stable supply chains, The Ministry of Finance said
Speaker 2: earlier today, foreign investors are now required to give prior
Speaker 2: notice when conducting direct investment in equipment tieds chip making.
Speaker 2: This in an effort to address the risk of key
Speaker 2: technology leaks and interesting global story carrac and so.
Speaker 3: Much going on with ships. In fact, overall they are
Speaker 3: weighing on the overall benchmarks today because of that apply
Speaker 3: materials number. Just get broad a look at the tech
Speaker 3: market right now. Janet Mumors with us RBC Brewint, head
Speaker 3: of market Analysis, and Janet, we've had an extraordinary few weeks.
Speaker 3: To put it bluntly, what are you making of AI
Speaker 3: euphoria reality and what it means for the tech benchmarks
Speaker 3: right now?
Speaker 6: Hi, good one night, Caroline, Thanks for having I think
Speaker 6: one thing is that the evaluations are some of these
Speaker 6: megacap starks and AI exposed starks have come down. I
Speaker 6: think that is good news for in sirs who are
Speaker 6: not invested yet. They can actually get in with a
Speaker 6: better valuation into companies that still have great long term prospects.
Speaker 6: And I also think that the rebounds, the very quick
Speaker 6: rebound that we've seen suggests that, you know, if the
Speaker 6: data is okay, continues to suggest that the US economy
Speaker 6: is still growing.
Speaker 7: You know, there's still a lot of demand for these
Speaker 7: high quality sauce.
Speaker 6: And I will say our position would be to keep
Speaker 6: being focused on high quality growth companies, which a lot
Speaker 6: of these AIS old starts are. And I think some
Speaker 6: of the observations from companies' guidance, from the big tech
Speaker 6: companies for example, is that they prefer to actually spend
Speaker 6: more on AI instead of being left behind. So I
Speaker 6: think that this is still very much a very important trade.
Speaker 3: Why then, was everyone suddenly so nervous around it, Janet?
Speaker 3: Why do you think that, Yeah, we're still twelve percent
Speaker 3: of of our highs on the socks and next, But
Speaker 3: why haven't we managed to rebound to the extent that
Speaker 3: has your level of conviction?
Speaker 7: Yes? I think so.
Speaker 6: Generally speaking, a lot of focus is still placed on
Speaker 6: the economic data.
Speaker 7: We got some relief I think in.
Speaker 6: The past week or so with solid economic data and
Speaker 6: slower inflation, but I think there are still uncertainty surrounding that.
Speaker 6: I think particularly for cheap companies. I think the politics
Speaker 6: of that still played a pretty important part.
Speaker 7: I remember when esmlt.
Speaker 6: UH and then there is this suggestion that Donald Trump
Speaker 6: is going to uh, you know, make a stricter for
Speaker 6: US companies to export high tech equipment and things like that,
Speaker 6: and also of course the Biden administration tightening the stands.
Speaker 7: I think these are still ongoing concerns.
Speaker 6: So I think that is the reason why the cheap
Speaker 6: makers are not bouncing bad as much as the other
Speaker 6: wider stocks.
Speaker 2: Janet Hired zed in San Francisco. I've been reading your
Speaker 2: research and you've been thinking about reads real estate investment trusts.
Speaker 2: So have I, and I've been writing about how you
Speaker 2: can look at their pipeline in the context of data
Speaker 2: center investments. I didn't realize it was such a focus
Speaker 2: of opportunity for some of the reads out there. Is
Speaker 2: that an area that you look for for data sets
Speaker 2: to kind of work out how long this investment cycle
Speaker 2: has to run.
Speaker 6: Yes, I think in terms of reads, I think data
Speaker 6: center is one of the more resilient areas actually throughout
Speaker 6: the previous sell off, and I think that that is
Speaker 6: still a very valid investment point. But what we're looking
Speaker 6: at in terms of reads is basically broadening out of
Speaker 6: the other reeds area because simply the valuation has gone
Speaker 6: much more attractive. And I think particularly right now, we're
Speaker 6: at the stage where the fan is going to cut
Speaker 6: interest rates, and you know, expectation is building that they
Speaker 6: will be you know, further cuts well into twenty twenty
Speaker 6: five and beyond, so I think, you know, being a
Speaker 6: very interest rate sensitive sector is likely to benefit from
Speaker 6: this monetary policy development, and I think the valuation is
Speaker 6: just adding to that attractive Jesus.
Speaker 2: Earlier in the show, Caroline was looking at the NASA
Speaker 2: one hundred on the weekly basis. We've had a lot
Speaker 2: of conflicting economic data. What has the data all told
Speaker 2: by Friday Afternoon told you about the state of the
Speaker 2: global economy.
Speaker 7: I think everything is still fine.
Speaker 6: I think the labor market is obviously is lowing down,
Speaker 6: but it is actually as expected, and in fact, it
Speaker 6: is a trend that the Fatter Reserve would like to see.
Speaker 6: If you look at the job opening unemployed person is
Speaker 6: going down, but it is basically what I would describe
Speaker 6: at a normalization back to where it's pre COVID.
Speaker 7: So I think this is all positive development.
Speaker 6: I think we're saying a slowdown in consumer because the
Speaker 6: savings are being depleted, but I think the key thing
Speaker 6: is that real wage book is very much positive. I
Speaker 6: think that that is a very fundamental supportive factor out there.
Speaker 6: So overall speaking, the economy is still fine, slowing but
Speaker 6: as expected, and we're not seeing the economy falling off
Speaker 6: a cliff, and soft lending is still very much in
Speaker 6: play here.
Speaker 3: Janet what is then the most important piece of data
Speaker 3: in the next few weeks. Is it fed Macro? Is
Speaker 3: it August twenty eighth in video results.
Speaker 6: Yeah, Nabidia is It's definitely a very important corporate earnings
Speaker 6: I think yeah, that would be a very important point
Speaker 6: for us to watch. Basically we know the volatility around
Speaker 6: that event and the ability to actually spill over to
Speaker 6: the rest of the megacap industry. And also investors will
Speaker 6: be seeking validation on whether that AI orders is still
Speaker 6: very strong. And of course I think any data that
Speaker 6: relates to the labor market will be a big focus.
Speaker 6: I think inflation side of things, we got more confirmation
Speaker 6: that is okay and unlikely to see a volatility around inflation,
Speaker 6: So I think labor market data for sure.
Speaker 2: Such such a good question by Caroline though August twenty
Speaker 2: eight from Video and Macro level event. Maybe Janet Mouie,
Speaker 2: RBC Brewing, head of Market Analysis. Great to have you
Speaker 2: back on the show. Thank you very much. Now, coming up,
Speaker 2: we're going to be joined by Josh Chapman, who is
Speaker 2: a managing partner at Convoy, a firm focused on the
Speaker 2: video games industry, and we're going to discuss epic Games's
Speaker 2: new mobile storefront, which is out today. By the way,
Speaker 2: heading to break, we're looking at shares of Rivian. I
Speaker 2: broke this story overnight with Kyle Porter that they've had
Speaker 2: to pause the line that makes the delivery vans for
Speaker 2: Amazon due to a part shortage. The stock declines are
Speaker 2: really accelerated in the session, almost three percent. It won't
Speaker 2: affect long term their production targets. They'll make that up.
Speaker 2: They're not changing guidance, and all the workers will We've paid,
Speaker 2: et cetera. But it's interesting that this continues to be
Speaker 2: an issue in the supply chain for Rivian, such a
Speaker 2: closely watched ev name. Keep tuned, Stay tuned. This is
Speaker 2: Blombow Technology.
Speaker 3: Epic debut for Epic Games, A Fortnite maker is launching
Speaker 3: a new mobile storefront after four years of legal wrangling
Speaker 3: with Apple and Google over their app store practices, now
Speaker 3: the Epic CEO saying it may have lost up to
Speaker 3: one billion dollars in revenue after Fortnite was removed from
Speaker 3: Apple's App store Whennipek tried to circumvent that fee with
Speaker 3: its own storefront back in twenty twenty, joining us now
Speaker 3: Josh Chapman managing partner of Convoy and look, it's returning
Speaker 3: to iPhones in Europe, to Android devices worldwide? Can people
Speaker 3: get it? Access it? What's the pickup?
Speaker 2: Right now?
Speaker 8: You can only access the Epic Games Store in the
Speaker 8: EU if you're on the iOS, and globally on Android.
Speaker 8: As you mentioned, it is an absolute pain to download
Speaker 8: on both stores. So Apple and Google are fighting this
Speaker 8: tooth and nail that I just watched some videos that
Speaker 8: came out this morning. We're going to be trying it
Speaker 8: all day today. Is this is requiring anywhere from ten
Speaker 8: to twenty steps. There's lots of flags and alerts on
Speaker 8: both phone devices saying hey are you sure? Are you
Speaker 8: sure you want to download this? So these stores are
Speaker 8: going to fight this tooth and nail.
Speaker 2: An Apple spokesperson clarified to Bloomberg that it is a
Speaker 2: five step process in Europe at least, not fifteen. I'm
Speaker 2: glad to have you on the show.
Speaker 6: Right.
Speaker 2: You're a firm that invests in video games startups that
Speaker 2: want to disrupt the industry. That's what Sam Sweeny's trying
Speaker 2: to do. The argument that if you have more stores,
Speaker 2: you have a more competitive market. One hundred and eighty
Speaker 2: billion dollar video games market, half of which is mobile.
Speaker 2: Is he right about that argument?
Speaker 8: He is right that there is It is better for
Speaker 8: the games industry if there are more stores, more options,
Speaker 8: and more competitive pricing. That said, I think what he's
Speaker 8: fighting for is fantastic and will be positive in this
Speaker 8: development today is positive for the games industry. That said,
Speaker 8: Apple is well within their right having the platform they've built,
Speaker 8: to defend it as much as they can, and so
Speaker 8: the courts of the US have decided that yes, they're
Speaker 8: not a monopoly. They but they have to allow for
Speaker 8: third party payments to be processed. Essentially, the way I
Speaker 8: read that and the way we read that as a
Speaker 8: firm here at Convoys that that's kind of a meet
Speaker 8: in the middle. Right, let's let them do off platform payments.
Speaker 8: But you're not a monopoly, and you got to let
Speaker 8: Epic Games launch a store on your app store.
Speaker 3: I mean, the reason that this is happening for iOS
Speaker 3: in Europe and not here is because the Digital Markets
Speaker 3: Act and the fact that Europe's decided that Apple is
Speaker 3: acting as a gatekeeper in some way Google too with
Speaker 3: these app stores, and they've got to change. But often
Speaker 3: what happens in Europe ends up happening here in the US.
Speaker 3: So when if you're saying they're pushing and fighting tooth
Speaker 3: and nail, will we ever see it occurring here in
Speaker 3: the US unless there's our own antitrust issues that are
Speaker 3: set to bear here.
Speaker 8: So it took about four years to get to this
Speaker 8: point just in the EU. So I think that we're
Speaker 8: looking at another just a prediction three to five years
Speaker 8: before we see this really happen in the United States
Speaker 8: unless a huge ruling comes down from the Supreme Court
Speaker 8: in the United States, if they decide to take this
Speaker 8: court and take the appeal, which they rejected I believe
Speaker 8: earlier this year last year. And so I think we're
Speaker 8: looking at a very long drawn out battle. And in
Speaker 8: the meantime, Apple is making billions and billions a week
Speaker 8: off of the app store. In about sixty to seventy
Speaker 8: percent of all revenue on Google's App Store and on
Speaker 8: Apple's App Store comes from the video gaming space alone.
Speaker 8: And so the reason why they were fighting, yeah, well.
Speaker 2: Let me just jump in and Carra, I'm sorry us
Speaker 2: we're talking about that Apple side of the story. Let's
Speaker 2: be under no illusions. Epic want to make money from
Speaker 2: this arrangement, right, they have the target of one hundred
Speaker 2: million downloads by a certain period of time. Ambitious. Will
Speaker 2: they be successful is the question.
Speaker 8: I think Epic Games is going to make a lot
Speaker 8: of money off of this move today. I think they'll
Speaker 8: make it primarily through Android globally, and then I think
Speaker 8: they'll secondarily make it on iOS. I think it'll be
Speaker 8: in that order of magnitude. But Epic Games as a
Speaker 8: private company that owns Fortnite and Rocket League and Fall guys.
Speaker 8: They have now recently launched uefn, which is basically their
Speaker 8: Roadblocks competitor. They watched Roadblocks have success, so they're launching
Speaker 8: their own sort of user generated content platform. This is
Speaker 8: a continued effort for Epic Games to increase their margin.
Speaker 8: Profile Mobile is a perfect way to do that, and
Speaker 8: whether that's an acquisition or an IPO in the future,
Speaker 8: Epic Games is playing their hand very well and this
Speaker 8: will work out in their favor for sure.
Speaker 3: I think the data showed that some thirty five million
Speaker 3: people played Fortnite for more than six hundred million hours
Speaker 3: in July on Xbox in PlayStation. Just give us the
Speaker 3: context of how popular Fortnite is compared to the rest
Speaker 3: of the gaming landscape.
Speaker 8: Before Fortnite was kicked off the app Store, we as
Speaker 8: a firm did an estimate that Fortnite was responsible alone
Speaker 8: for almost one percent of all revenue on the Apple
Speaker 8: App Store before it was kicked off. That was sort
Speaker 8: of an estimate that we kind of did internally. The
Speaker 8: significance that Fortnite is is a title on console, which
Speaker 8: you just mentioned is absolutely massive, and on mobile, which
Speaker 8: is more accessible globally around the emerging market countries especially,
Speaker 8: which is why Android's important. Fortnite is, you know, one
Speaker 8: of the top five forever titles we call them forever
Speaker 8: titles in the game and industry in the world right
Speaker 8: alongside that as things like Call of Duty and Grand
Speaker 8: Theft Auto and many others.
Speaker 2: Josh Chapman, managing partner at Convoy, a particularly great voice
Speaker 2: to have on a daylight today, Thank you very much.
Speaker 2: There's another big story in the world of entertainment. We're
Speaker 2: looking at Paramount seagramat Edgar Brontham Junior is close to
Speaker 2: making an offer four Paramount Global, setting off a potential
Speaker 2: bidding war for the film and TV company that owns
Speaker 2: CBS in MTV. That's because the Bloomberg's Hannah Miller and
Speaker 2: Hannah I will say the same thing to you I
Speaker 2: said several weeks ago, I'm confused and I have deja vu.
Speaker 2: So that there's a new bidder and then another bidding war.
Speaker 2: Good morning, yes, good morning.
Speaker 9: So yeah, we know Bronklin has been interested in Paramount
Speaker 9: for a while and things have shifted since then. You know,
Speaker 9: obviously there's this Skydance deal that has been agreed to,
Speaker 9: and that there's this forty five day go shop period.
Speaker 9: So it looks like Bronfman is going to put in
Speaker 9: a bid, But unlike his earlier interests, he's no longer
Speaker 9: working with Bain Capital on this and has been discussions
Speaker 9: with a couple of different entities, including Roku Fortress and
Speaker 9: the film producer Stephen Paul.
Speaker 3: So I'm sat here as a B class shareholder, not voting,
Speaker 3: trying to work out what ultimately is going to be
Speaker 3: better for me. How does he push away from what
Speaker 3: David Ellison is going to offer in terms of technology,
Speaker 3: in terms of studios, How is he going to make
Speaker 3: a different kind of appeal.
Speaker 9: Yeah, so you know, Brockman is coming in with years
Speaker 9: of experience in the Badia industry. He's arguing that this
Speaker 9: is a better deal for shareholders. You know, he is
Speaker 9: saying that he can take this company to the next level.
Speaker 9: And we were putting this potential bin together. But it'll
Speaker 9: be interesting to see what happens. Ultimately, it's up to
Speaker 9: Sherry Redstone, her holding company, National Amusements, think is the
Speaker 9: biggest shareholder in Paramount, and what she says, what she
Speaker 9: says goes. If she prefers guidance, that's what's going to be.
Speaker 3: Anna Milla telling it straight. We thank you so much.
Speaker 3: Let's talk politics and creators because as the election campaign
Speaker 3: picks up, the creator economy has been on the administration's mind.
Speaker 3: Two hundred content creators will be credentialed to cover the
Speaker 3: twenty twenty four DNC in Chicago next week. This follows
Speaker 3: actually the White House itself hosting the Creator Economy Conference,
Speaker 3: where it convene a group of digital creators and professionals
Speaker 3: to discuss the industry's most pressing issues. Let's talk about
Speaker 3: it with LTK co founder president Ama Ven's Box who
Speaker 3: you weren't there yourself, but a lot of the influencers
Speaker 3: that you represent that you help monetize were there. Why
Speaker 3: is it important? Why why are we seeing such political
Speaker 3: interest in the influencer economy right now?
Speaker 4: Well, our LTK team was on the ground, they were there,
Speaker 4: And you know, when I think about creators and politics,
Speaker 4: I don't know of any better marketing machine than the
Speaker 4: RNC and the DNC. And what we're seeing is that
Speaker 4: even government is realizing that in order to reach people,
Speaker 4: you need to be where they are. They're spending six
Speaker 4: and a half hours a day on their phones, they're
Speaker 4: in these aggregated content channels. The content that they're viewing
Speaker 4: is created by creators themselves. The new media has arrived,
Speaker 4: it's here, and it was hugely validating for the Creator
Speaker 4: Economy Conference to be held at the White House. This
Speaker 4: is an industry that we started thirteen years ago. The
Speaker 4: word influencer was only added to the dictionary five years ago,
Speaker 4: so we've come a long way. This was a really
Speaker 4: big moment for our entire industry.
Speaker 3: And what can I get political with you for a moment.
Speaker 3: I don't want anyone to take sides, but just from
Speaker 3: a perspective of a creator, an influencer who's doing it
Speaker 3: better at the moment, who's managing to reach the US
Speaker 3: voter base via influencers most efficiently. Is it DNC Democrats?
Speaker 3: Is that are and see Republicans?
Speaker 4: You know, both are using these tactics, and they both
Speaker 4: used them for the last several elections, and we've seen
Speaker 4: it across all of the different platforms. That said, I think,
Speaker 4: really this is important for the entire industry. Whether you
Speaker 4: are someone who as a creator that is following politics,
Speaker 4: who is reporting on politics, this is it. It's a
Speaker 4: validating moment. And for some creators they don't want to
Speaker 4: touch the elections at all, But I think what this
Speaker 4: points to in this moment is that they are looking
Speaker 4: to see that this industry is important and that they
Speaker 4: need to be thinking about the things they're thinking about.
Speaker 4: And there are definitely a handful of things the air
Speaker 4: Top of Mind that we showed up in Washington to
Speaker 4: talk about what.
Speaker 2: Are the protections here for voters that creators, as we
Speaker 2: are calling them, get it right, that it's accurate, that
Speaker 2: it's not false or fake information.
Speaker 4: Well so for our creators. Joe Biden stood up and
Speaker 4: he said, you know you are the new media. You're
Speaker 4: the new way that people are being reached. We know
Speaker 4: that people are not just listening and thinking about sentiment
Speaker 4: that they're actually acting on the things that their influencers
Speaker 4: that they follow are telling them. We're seeing that, you know,
Speaker 4: consumers are buying five billion dollars with the products from
Speaker 4: these creators every year, so they're voting with their wallet
Speaker 4: and not just with their mind.
Speaker 2: So there's a huge responsibility.
Speaker 4: That comes from being a creator and the acknowledgement that
Speaker 4: this is the new media is one of the most
Speaker 4: important things as a creator. There are really key, three
Speaker 4: key things that are our top of mind when it
Speaker 4: comes to politics. I'd love to share that you guys
Speaker 4: are interested.
Speaker 2: Just fifteen seconds, just got wonderful.
Speaker 4: Well, we're thinking about the content that's taken and monetized
Speaker 4: directly and indirectly and without a license, without permission or
Speaker 4: benefit to that creator. We're thinking about the implications of
Speaker 4: creator content being taken to train AI again without the license,
Speaker 4: permission or benefit to the creator. And then I think, finally,
Speaker 4: it's really important that this industry was built on innovation.
Speaker 4: How are we protecting the innovators who are creating it?
Speaker 4: And that's really in the court system through legislation. Thank
Speaker 4: you so much.
Speaker 2: Okay, lta HO founder and President Ambven's box. Sorry we
Speaker 2: ran out of time, but thank you for coming on
Speaker 2: the show.
Speaker 3: Welcome back to Bluemotechnology and Caroline.
Speaker 2: Hide in New York and I'm Ed Lovelow in San Francisco.
Speaker 2: I want to go back to the chart you showed
Speaker 2: at the top of the show, and that's that one hundred.
Speaker 2: But on a five day basis, we're actually on track
Speaker 2: for a second consecutive week of weekly gains. But five
Speaker 2: percent over five days is actually the biggest weekly gain
Speaker 2: on that index since November of twenty twenty three. And
Speaker 2: it's amazing how the narrative changes. It was just two
Speaker 2: weeks ago that we'd had four straight weeks of declines
Speaker 2: and we were perilously close to a fifth straight week
Speaker 2: of declines, going back the worst run since twenty twenty two.
Speaker 2: Economic data is really whipsawing us about and as you
Speaker 2: point out, August twenty eighth and Nvidia earned is this
Speaker 2: macro level event. There's a really big story out there.
Speaker 2: In a specific mover, Autodesk continue to use a controversial
Speaker 2: sales strategy after promising investors it would stop, and then
Speaker 2: ignored internal warnings about the risks of doing so. According
Speaker 2: to previously unreported internal documents. The reporter with those documents
Speaker 2: Bloomberg's Brody Ford, this is so interesting. So basically management
Speaker 2: have been said told don't use this, there are risks.
Speaker 2: They carried on using it, and you found out about it.
Speaker 2: Take us from there.
Speaker 10: Yeah, taking a step back and April, Autodesk said, Yo,
Speaker 10: we cannot file our financial disclosures. We'll come back to you,
Speaker 10: and the whole market said, oh my god, what's going
Speaker 10: on here. This is unheard of for the size of
Speaker 10: a publicly traded company. Eventually they said that yeah, we
Speaker 10: had some problems with these deals, but it was still
Speaker 10: somewhat vague. And so what we found out through these
Speaker 10: documents is that Autodesk pledged to stop doing a specific
Speaker 10: kind of deal that essentially frow loads the cash flow.
Speaker 10: I'm not going to board with the details. But they
Speaker 10: kept doing it quietly. And the reason they kept doing
Speaker 10: it is because they were reliance on these deals to
Speaker 10: meet free cash flow targets. Right. We see in these
Speaker 10: documents that employees warned executives, hey, this might hurt our
Speaker 10: long term revenue. This increases the chances of us making
Speaker 10: a serious mistake, maybe like the one we saw earlier
Speaker 10: this year. But they pledged on because you know, you
Speaker 10: gotta meet those financial targets.
Speaker 3: But this had big ramifications. The accounting probe finished in May,
Speaker 3: the board decided to remove the clifford Is CFO. I mean,
Speaker 3: what more could they do to make everyone take this seriously.
Speaker 7: Correct?
Speaker 10: Yeah, they removed the CFO. The board decided that a
Speaker 10: little bit earlier this year, and since then activists investors
Speaker 10: Starboard has entered the stocks, saying, in part the handling
Speaker 10: of this probe was not good enough that investors didn't
Speaker 10: get enough accountability. They didn't really know what happened. How
Speaker 10: wide was the pool of knowledge here? And again what
Speaker 10: these documents show is that the pool of knowledge was
Speaker 10: quite wide. I mean we see executives signing off on
Speaker 10: these deals saying that, hey, we got to meet these targets.
Speaker 10: You know, let's pursue them.
Speaker 7: In terms of.
Speaker 10: Ramifications, Starboard is requesting things like considering whether the current
Speaker 10: CEO is still the right guy for the job, as
Speaker 10: well as the kind of traditional activist stuff like let's
Speaker 10: raise margins and you know all that kind of thing.
Speaker 2: Brady, real quickly, forgive me this one. Just the basics
Speaker 2: of what Autodesk is and does and why people might
Speaker 2: or might not.
Speaker 10: Know it totally. Autodesk is like Adobe for the physical world.
Speaker 10: That bridge behind you, probably Autodesk was used in some
Speaker 10: capacity to design it, right, most buildings you see their
Speaker 10: software was designed for. They have a very interesting vertical
Speaker 10: that they really own. It's one of those kind of
Speaker 10: large software markets you almost don't think about because they
Speaker 10: are so entrenched in their market. It's a very interesting
Speaker 10: set of very.
Speaker 2: Offer Bloomberg's Brady Ford with another top piece of reporting Carrot.
Speaker 3: Yeah, absolutely on it. Meanwhile, just switch gears ed. We're
Speaker 3: going to look at fintech for a moment because Revolute
Speaker 3: said that a secondary share sale that allowed it basically
Speaker 3: to give employees some liquidity for their stakes value. The
Speaker 3: company at get this forty five billion dollars the new
Speaker 3: valuation for the UK unicorn. It's up from thirty three
Speaker 3: billion price tag that it received back in twenty twenty one.
Speaker 3: And actually that's the interesting point here, And like many
Speaker 3: of its rivals in fintech, Revelue hasn't had to raise
Speaker 3: money since then in recent years, and it's allowed it
Speaker 3: to basically avoid those sharp declines of valuation that many
Speaker 3: peers have suffered. But at the same time, let's go
Speaker 3: to another peer. Let's go to a European fintech that's
Speaker 3: saking liquidity, and it's Klana, and it is inching ever
Speaker 3: closer to its USIPO next year, with sources saying that
Speaker 3: the company is seeking a valuation of around twenty billion
Speaker 3: dollars now. The Klana CEO joined Bloomberg Daybreak Europe earlier
Speaker 3: today to discuss those plans and his outlook for the company.
Speaker 3: Just take a listen.
Speaker 11: People really appreciate mostly about is that two years ago
Speaker 11: this business was you know, very much attractive, growing fast
Speaker 11: in the US, but also loss making. And in just
Speaker 11: two years we have increased revenue by fifty percent, we
Speaker 11: have increased gross profit by one hundred percent, and we
Speaker 11: reduce costs in thirty percent, which means that now we're
Speaker 11: are you know, profitable And I think those kind of
Speaker 11: financial performances obviously do raise the eyeboras a little bit
Speaker 11: with investors also, as we have, due to AI, committed
Speaker 11: to continue shrinking the company. We've already gone from four
Speaker 11: to half thousand to three and a half thousand in
Speaker 11: the last year, and we are committed to continuing on
Speaker 11: that path, not by layoffs but simply by natural attritionids.
Speaker 12: You've been an early mover on Jenai, and you reached
Speaker 12: down to Sam Moltman of chat GBT open ai pretty
Speaker 12: pretty early on in all of this. What's been one
Speaker 12: of the most surprising things that stood out to you
Speaker 12: as you've embedded some of this genai across the business.
Speaker 2: Yeah, I think that it is to me in a way.
Speaker 11: I would actually partially say that like I was even
Speaker 11: you know, kind of pulled into the hype a year ago.
Speaker 11: We're a little bit like we you know again self
Speaker 11: driving cars. You know, we used to read about them
Speaker 11: in the press every day and then you would look
Speaker 11: out the window and like, where are they? Where are
Speaker 11: they not happening? And now it's actually happening. And I
Speaker 11: think that like to somebody, I was almost like drawn
Speaker 11: into the hype.
Speaker 10: A year ago as well.
Speaker 11: It's like, okay, in the year you know, the whole
Speaker 11: thing will already have like totally dramatically change everything, and
Speaker 11: now you almost had the opposite. You hear people say, oh,
Speaker 11: we tried it, and give us the results and so forth.
Speaker 2: But in tonally, what I'm seeing to plan is that
Speaker 2: it is working.
Speaker 11: It's just it will take a little bit for other
Speaker 11: time before it will have the full implications to us.
Speaker 11: We've already had delivered so fantastic results, but we were
Speaker 11: super excited.
Speaker 7: What's coming in the.
Speaker 12: Next twelve months before we let you go? It's about
Speaker 12: you Look, what do we win you back? You're going
Speaker 12: to list in the US. That's a suggestion, that's the expectation.
Speaker 12: What does Europe and the UK need to do? Is
Speaker 12: there anything they can do to win this listing?
Speaker 11: Well, one thing that I have said to regulators in
Speaker 11: the year, because there's been so much discussion in Brussels
Speaker 11: as well, how do we create a competitive market? And
Speaker 11: I have suggested and actually get some positive from some
Speaker 11: of the foreign ministers, was invited with all the finance
Speaker 11: binases over you, is that I think that if if
Speaker 11: Europe will never you know, will never agree on like
Speaker 11: where should listing shuld the big stock market be? Is
Speaker 11: in Prairies, is it Frankfurt, is it you know whatever,
Speaker 11: European country? So the only way to actually get this
Speaker 11: to work is if if you would mandate all the
Speaker 11: stock sciations in Europe so that any stock that is
Speaker 11: listed in one is automatically trading in another. I think
Speaker 11: that could reach the critical mass to create an investor
Speaker 11: base that is, you know, similar size that one we
Speaker 11: see in the US, because that's really one of the
Speaker 11: biggest challenges when you make US comparisons. If the company
Speaker 11: like ours is already mostly US business from revenue size,
Speaker 11: it will have to be a you know, a similar
Speaker 11: size of investment base and stock market size to make
Speaker 11: it a relevant listening point.
Speaker 2: That was clan A CEO Sebastian shimi at Kowski. Coming
Speaker 2: up on the program, We're going to be joined by
Speaker 2: Hibba Amva from the Ericsson Immigration Group to discuss the
Speaker 2: impact of the election on H one B visas and
Speaker 2: in turn the world of technology.
Speaker 3: Caro, I just want to go back to that question
Speaker 3: of dual listings and what certain nations and territories have
Speaker 3: to do to woo over other companies, because get this
Speaker 3: av point. It's a new Jersey based company software company
Speaker 3: it's considering actually second listing outside of the US and Singapore.
Speaker 3: People with knowledge of the matter have been saying it
Speaker 3: would be a deal that basically bring US infrastructure software
Speaker 3: firm a step closer to some of its big backers.
Speaker 3: Remember they had a big chunk of change from Temasek.
Speaker 3: This is blue big technology.
Speaker 13: The H one and by visa policy is really critical
Speaker 13: for the tech industry, and Trump does not have a
Speaker 13: positive track record there. So I think having a president
Speaker 13: who understands the importance of immigration in this country is
Speaker 13: really critical.
Speaker 3: Venture capitalist Shrewdi Shah one of the signatories of VC's
Speaker 3: for Kamala group supporting the campaign of Kamala Harris. And
Speaker 3: as we look ahead to the DNC that' starts next
Speaker 3: week H one B visas, I think it'll be a
Speaker 3: topic that's type of mind, certainly off of the tech industry.
Speaker 3: That's bring in our next guest to discuss him. Advert
Speaker 3: partner with the ericson Immigration group, And I ask you there, Hibbert,
Speaker 3: will we get much clarity? Do you need more clarity
Speaker 3: from the position of the immigration from the Democratic ticket?
Speaker 14: So I think that the companies that operate in the
Speaker 14: tech industry, as well as the AI industry, semiconductor, basically
Speaker 14: any industry in which the United States wants to be
Speaker 14: a global leader and continue to dominate, they're definitely looking
Speaker 14: for a lot more clarity when it comes to what
Speaker 14: the next president's policy is going to be with respect
Speaker 14: to high skilled immigration. And the reason that this is
Speaker 14: so important for companies, particularly in the tech sector, is
Speaker 14: because there is a heavy reliance on visas like the
Speaker 14: H one B visa, because when it comes to employees
Speaker 14: who have the necessary STEM skills that these companies are
Speaker 14: looking for, demands still very much outweighs supply, and so
Speaker 14: whoever the next present cident is going to be, it's
Speaker 14: really really important to point out that what we really
Speaker 14: need for the success of the tech industry and other
Speaker 14: industries is an immigration policy that actually reflects a twenty
Speaker 14: first century economy.
Speaker 2: Hebert. Former President Trump actually gave some detail on how
Speaker 2: he'd approach visas, particularly those originating from students of US universities,
Speaker 2: on the All In podcasts, and then he discussed it
Speaker 2: with Bloomberg in July as well. Have you had any
Speaker 2: detail or sense from the Harris ticket on a specific
Speaker 2: approach to technology relevant visas?
Speaker 14: So what we know about Vice President Harris is that
Speaker 14: she definitely has close ties to the tech industry. There
Speaker 14: were two hundred tech leaders who came out and endorsed
Speaker 14: her publicly. Now, as you mentioned, the DNC is right
Speaker 14: around the corner. So we're definitely going to learn a
Speaker 14: lot more here in the next few days. But what
Speaker 14: most people are expecting of Vice President Harris is that
Speaker 14: she's going to continue President Biden's approach to high skilled immigration,
Speaker 14: and President Biden's approach has been in large part walking
Speaker 14: back Trump era policy.
Speaker 2: I wonder if we could sort of take a bipartisan
Speaker 2: look at the mechanics of getting a visa in the
Speaker 2: federal administration of visas. I got my first visa in
Speaker 2: twenty eighteen under the Trump administration and had to renew
Speaker 2: it in the chaos of COVID. But how easy procedurally
Speaker 2: is it now in this day state, right this moment
Speaker 2: to get an H one B.
Speaker 14: So it's not necessarily as difficult as it was during
Speaker 14: the Trump administration. The experience that a lot of immigration
Speaker 14: practitioners had during the Trump administration was that the process
Speaker 14: was a lot longer and it felt somewhat inefficient. I
Speaker 14: think that that's why it's really important to watch what
Speaker 14: the results of this election are going to be because
Speaker 14: some of the concerns that the companies have experiences, whether
Speaker 14: or not policy pertaining to H one B visas and
Speaker 14: policies surrounding high skilled immigration are actually going to act
Speaker 14: as a deterrent and discourage high skill talent from coming
Speaker 14: to the United States and making the United States their home.
Speaker 14: And if that happens, then companies are going to run
Speaker 14: into issues in terms of whether they can remain competitive
Speaker 14: because they may not necessarily be able to hire the
Speaker 14: best and brighters from around the world.
Speaker 3: And perhaps we see what occurred back in previous administration
Speaker 3: where Canada suddenly got a lot of high skill perhaps
Speaker 3: versus the United States. What about other types of visas?
Speaker 3: We all focus in so much on an H one B,
Speaker 3: but I came in twenty eighteen on an L one.
Speaker 3: I mean, how many other routes are there to be
Speaker 3: and contribute to the US economy.
Speaker 14: I think that there are several other routes, but the
Speaker 14: eligibility standards are a little bit more controlled and restricted.
Speaker 14: And that's why the H one D visa is so important.
Speaker 14: It's the type of visa that a lot more people
Speaker 14: could potentially be eligible for, and as a result, it's
Speaker 14: the most frequently leveraged employer sponsored visa by several industries,
Speaker 14: including the tech industry. And so with respect to policy,
Speaker 14: when it comes to high skilled immigration. You know, WOLS
Speaker 14: policy surrounding H and B visas is definitely going to
Speaker 14: be top of mind. It's really important to continue to
Speaker 14: have immigration policy that actually encourages talent to come to
Speaker 14: the United States and innovate, because the next time somebody
Speaker 14: you know, founds the next Google or the next Tesla,
Speaker 14: we still want that to be an American company.
Speaker 2: Cuba and the ericson Immigration Group, thank you very much.
Speaker 2: There are other news headlines out there in the world
Speaker 2: of tech. Carry yeah, it's.
Speaker 3: Time for talking tech. First up, we're going to discuss
Speaker 3: SpaceX announcing it will launch a me faned satellite to
Speaker 3: track super bolluters. Now, Carbon Mapper is a nonprofit behind
Speaker 3: the satellite, and it will be the second methane detecting
Speaker 3: satellite launched in the past six months. This reflects basically
Speaker 3: growing scrutiny around the greenhouse gas and the satellite's low
Speaker 3: cost to atmospheric monitoring. Meanwhile, you tariffs, they're slowing the
Speaker 3: influx of Chinese made evs. In July now, according to
Speaker 3: research from Data Force, the number of new electric vehicles
Speaker 3: from Chinese manufacturers registered in the EU found forty five
Speaker 3: percent in June. Look, that's his carmakers actually rushed to
Speaker 3: get their products to dealers before the towers took effect
Speaker 3: on July fifth, and Jack Mars backing of course and Groove,
Speaker 3: and it's said to be in discussions to acquire Chinese
Speaker 3: healthcare platform howds dot com. That's acording to sources now
Speaker 3: a group is seeing and looking to integrate its tech
Speaker 3: within the website and an effort to basically beef up
Speaker 3: its AI services in healthcare.
Speaker 1: The ORB before you is made by a startup called
Speaker 1: Tools for Humanity. If it looks all too dramatic, that's
Speaker 1: sort of the point. The backers of the company, which
Speaker 1: include Sam Altman, the CEO of OpenAI, have put two
Speaker 1: hundred and fifty million this venture and want folks to
Speaker 1: take notice of their ORB. This is because they want
Speaker 1: to use it to scan the irises of as many
Speaker 1: people around the world as possible, all as part of
Speaker 1: their main project known as world Coin. If you allow
Speaker 1: world Cooin to scan your iris, two things happen. You
Speaker 1: get a small chunk of the world Coin cryptocurrency, and
Speaker 1: you're certified as a real, living human, which the company
Speaker 1: hopes will lead to a reduction in fraud on the
Speaker 1: Internet and provide better access to banking and social services. Critics, however,
Speaker 1: are wary about the ethics of biometric collection and the
Speaker 1: possible exploitation of users from developing countries.
Speaker 2: You can check out the full episode of that Bloomberg
Speaker 2: original's piece on Bloomberg dot com and joining us now
Speaker 2: is the co founder of worldcoin himself, Alex Blania Alex,
Speaker 2: Welcome to Bloomberg Technology. In Ashley Vance's Very Deep Tell
Speaker 2: BusinessWeek's story, he talks about how when you describe worldcoin
Speaker 2: to someone the project, it can sound nuts, and you
Speaker 2: were cited as saying that you think there's just a
Speaker 2: five percent probability five that you'll succeed. How do you
Speaker 2: arrive at that number?
Speaker 15: I think it's just a very ambitious project. And Ashley
Speaker 15: and I talked about massive success, like a large percentage
Speaker 15: of the kind of people in the world actually signing
Speaker 15: up and verifying with our services. I think that's just
Speaker 15: a lo perability. I think we will we will increase
Speaker 15: the probertly over time and do our best to succeed.
Speaker 15: But I think with very kind of very ambitious technology company,
Speaker 15: that's that's probably what you're looking at and just try
Speaker 15: to be realistic about that.
Speaker 3: Give us the elevator pitch of what success looks like, Alex, Well,
Speaker 3: the problem is that you will solve.
Speaker 15: So Semini started working on this company four and a
Speaker 15: half years ago and one of the one of the
Speaker 15: main ideas was, of course that AGI and kind of
Speaker 15: general AI progress will continue, and so we started a
Speaker 15: company called Tools for Humanity with the simple goal of
Speaker 15: building tools for humanity scale that we think will turn
Speaker 15: out to be very very important in a world in
Speaker 15: which AI will become increasingly powerful. And one of the
Speaker 15: problems that are very easy to understand is that on
Speaker 15: social media X for example, it will be really really
Speaker 15: hard to distinguish if you're interacting with a real human
Speaker 15: or if you're interacting with an AI. And we believe
Speaker 15: that this will turn out to be a very very
Speaker 15: critical problem for our democracy for many really things, for
Speaker 15: many things that we care about, to protect many of
Speaker 15: us services against influenced by AI, and really make sure
Speaker 15: we only interface with humans. And so basically for years back,
Speaker 15: we thought about how that would work and what technology
Speaker 15: would need to build, and so that's what we did.
Speaker 7: We built about biometric.
Speaker 15: Device that we distribute all of the world, and we
Speaker 15: allow everyone.
Speaker 3: To verify in everyone being so far six million unique humans.
Speaker 3: I think it is in growing verified by the ORB.
Speaker 3: But the issue here is how many of those humans
Speaker 3: actually understand what it is that they're giving you and
Speaker 3: why they're giving it. There is an argument that people
Speaker 3: are standing in line in Ecuador and in developing nations
Speaker 3: thinking they're just going to get reward with a little
Speaker 3: bit of money and giving over a lot of data
Speaker 3: that they don't really understand. How you counteract that.
Speaker 15: Well, they don't. In fact, they don't give us anything.
Speaker 15: We don't store any data that the network does to
Speaker 15: storing data. It's implemented in a self custodial way, and
Speaker 15: it uses what's called zero knowledge proofs to give you
Speaker 15: truly fundamental privacy guarantees. That's one, and then second, I
Speaker 15: would argue that you don't understand most of the technologies
Speaker 15: you're using. That's also not the point. I think you
Speaker 15: understand why you're doing it and what comes up for you,
Speaker 15: but I don't think you have to understand every detail
Speaker 15: about technology, And that would be my.
Speaker 2: Response, Alex, You've spent a lot of time flying around
Speaker 2: the world with Sam Autman to countries trying to convince
Speaker 2: them if they've placed a ban on the technology, to
Speaker 2: overturn it. You've had success in South career in Kenya.
Speaker 2: There are other countries where it stands. What is the
Speaker 2: concern that you hear most consistently from them?
Speaker 15: So we only actually hit one band and that is
Speaker 15: that is Hong Kong. We paused another in other countries
Speaker 15: to work with regulators, but that is what we expected.
Speaker 15: This is a very new technology and there's many questions
Speaker 15: to we ask for regulators.
Speaker 7: That is their job.
Speaker 15: So we we really work with regulators and respond to
Speaker 15: the questions and their main concerns. Our main questions is
Speaker 15: nothing that I think would really surprise you. It is
Speaker 15: what happens to the data, how does technology work? And
Speaker 15: all of that of course an increasing detail, but we're
Speaker 15: really happy to answer to these questions and regulators around
Speaker 15: the world.
Speaker 2: Alex, we've just got a minute or so left. What
Speaker 2: is the benefit to humanity that you want to provide
Speaker 2: with this technology?
Speaker 15: Well, I think I think it will turn out to
Speaker 15: be truly critical. I think services like x social media,
Speaker 15: many things that we care about, will otherwise be really
Speaker 15: hard to use or are very easy to influence, and
Speaker 15: so I think for our democracy, for things that we
Speaker 15: care about, we will need such technology and I hope
Speaker 15: we can contribute with that.
Speaker 3: Thanks Plannia, come back on as you continue to build
Speaker 3: the amount of people using it. Of course, co founder
Speaker 3: of world Coin and also humanity, we appreciate it. Meanwhile,
Speaker 3: that does it for this edition of Bloomberg Technology.
Speaker 2: Yep, another week of earnings, economic data and innovation recap
Speaker 2: it on the podcast. You know where to find it
Speaker 2: on the terminal, Apple, Spotify, and iHeart big thanks to
Speaker 2: the team in New York City with Caro and out
Speaker 2: with a crew here in San Francisco. This is Bloomberg Technology.