Speaker 1: From Mahard where Innovation, money and power Collie in Silicon
Speaker 1: Vallet NBN. This is Bloomberg Technology with Caroline Hyde and
Speaker 1: Ed Ludlow.
Speaker 2: I'm Caroline Heider Bloomberg's world headquarters in New York, and
Speaker 2: I'm Ed Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology coming up.
Speaker 2: Chip design firm ARM surgers in the most since it's
Speaker 2: IPO after a bullish outlook on sales, will sit down
Speaker 2: with the CEO Renee has to discuss.
Speaker 4: Plus the mousehouse spikes as cost cutting benefits and international
Speaker 4: theme park strength boost the company's results.
Speaker 3: Full coverage ahead.
Speaker 2: And Amma's limited release of its vision pro fetching as
Speaker 2: much as five thousand dollars in the resale market.
Speaker 4: This is the story ARM a massive surge in the stock.
Speaker 4: It's to say this is the biggest jump since they
Speaker 4: listed in September, but we are up fifty eight percent
Speaker 4: and it is the outlook for the current period going
Speaker 4: way beyond estimates.
Speaker 3: Evidence that this is.
Speaker 4: No longer a name offering the building blocks or blueprints
Speaker 4: for semiconductors, with royalties and licensing on the underlying code
Speaker 4: that allows a chip to communicate with the software that
Speaker 4: it runs.
Speaker 3: It's not a smartphone story.
Speaker 4: There's evidence that the diversification that Rene has has been
Speaker 4: pushing for is now there. We are seeing evidence there
Speaker 4: are questions around the AI story for sure. Then look
Speaker 4: at parents soft Bank SOFTWAK owns ninety percent of the company, right,
Speaker 4: but they are saying overnight in their own earnings, we
Speaker 4: are putting ARM front and center, Caroline, in of our
Speaker 4: AI strategy.
Speaker 3: What does that look like? This is a wild.
Speaker 4: Market reaction, but it's vindication for a story this company
Speaker 4: has been trying to tell.
Speaker 2: Absolutely extraordinary market reaction and on the back of that,
Speaker 2: we want to welcome our Bloomberg TV and radio audiences.
Speaker 2: ARM shares more than fifty percent higher. The bullish outlook
Speaker 2: is something we can now discuss. For the CEO, Renee
Speaker 2: has joining us, and Renee you must feel vindication.
Speaker 5: You are trying to tell this story at the IPO
Speaker 5: and boom your deliver.
Speaker 6: Well, thank you, Carolyn. Yes, we're really happy with the
Speaker 6: results that we posted. Additionally, very very good feelings about
Speaker 6: the forecast going forward. But as you said, this is
Speaker 6: really the results of strategy that were put in place
Speaker 6: a number of years ago that are now just really starting.
Speaker 7: To come to fruition.
Speaker 2: Yeah, when we think about the vindication, when we think
Speaker 2: though still about basically more of your technology going into
Speaker 2: more types of equipment. You managed to see a diversification
Speaker 2: out of phones. Paint us the strategy of ARM going forwards,
Speaker 2: because many would say, actually, you're not just well the
Speaker 2: overall designer of chips, you're basically making the chips.
Speaker 5: You're fabulous in some way.
Speaker 2: Is how do you see that relationship going forward with Qualcom,
Speaker 2: for example, Well, a lot of folks.
Speaker 6: You know, as you said, didn't really understand the company
Speaker 6: well and where we fit. And obviously we had a
Speaker 6: lot of growth attached to the smartphone market. But ARM
Speaker 6: is in a lot of devices that people may not
Speaker 6: naturally think about.
Speaker 7: We're in a Tesla vehicle, We're in a Ford f one.
Speaker 6: Fifty, We're in a Ring smart camera, We're in the
Speaker 6: Samsung TV, a Samsung smart appliance. So just about every
Speaker 6: device you can think of has ARM inside, and just
Speaker 6: about every device you can think of needs more and
Speaker 6: more compute, particularly as AI is now driving a whole
Speaker 6: new demand cycle.
Speaker 2: Talk to us about AI. Jeffrey is really singling that
Speaker 2: out the analyst. They're saying that this really shows your
Speaker 2: beneficiary from AI.
Speaker 5: But where does the AI focus come You, of course
Speaker 5: were in video before.
Speaker 2: They are all about AI accelerators and I'm interested as
Speaker 2: to whether or not that would be an area that
Speaker 2: you get into other than servers.
Speaker 6: Well, right now, in video is a great partner their
Speaker 6: Gracehopper chip, a super chip uses a lot of arm
Speaker 6: CPUs in combination with their GPU, which is a really
Speaker 6: really great solution for high end AI training in the
Speaker 6: data center as well as inference. But when you start
Speaker 6: moving to smaller devices, say smartphones or PCs, well AI
Speaker 6: is going to run there too. If you look at
Speaker 6: some of the recent announcements by by Samsung and Google
Speaker 6: relative to their smartphones, there's a lot of things such
Speaker 6: as circling and image on a browser and then having
Speaker 6: that browser go off and do search based on the circle.
Speaker 6: That's AI that's actually running in a smartphone. And what
Speaker 6: we're seeing is really a drive for more and more
Speaker 6: compute capacity to run these AI algorithms, some that people
Speaker 6: don't even know what they are yet. But what designers
Speaker 6: want to do and need to do is future proof
Speaker 6: their designs.
Speaker 7: Was more and more.
Speaker 6: Compute, and that is really driving a strong licensing cycle
Speaker 6: force in terms of more demand.
Speaker 4: Rene We've been at pains to kind of help the
Speaker 4: audience explain how your business works. You know, the royalty side,
Speaker 4: I call it the building blocks of chip design, and
Speaker 4: then the licensing side managing the interaction between the underlying
Speaker 4: design of the chip and the software it's intended to
Speaker 4: interact with. And what you said to the street is
Speaker 4: smartphone isn't everything anymore. It's a third of our business,
Speaker 4: but somehow you're also boosting the royalties that are coming
Speaker 4: in on that business. Just explain how that dynamic is working.
Speaker 4: Smaller proportion of overall, but you're basically making more money
Speaker 4: per deal.
Speaker 6: We've got two things kind of going on in the
Speaker 6: smartphone market. One is we've moved to a higher version
Speaker 6: of our process, or what we call Version nine, and
Speaker 6: the royalties associated with version nine are roughly double than
Speaker 6: that of version eight, and that's growing. Last quarter, about
Speaker 6: ten percent of our royalties came from version eight. Now
Speaker 6: it's Version nine is about fifteen percent and growing. So
Speaker 6: that's happening. But secondarily, people are putting more V nine
Speaker 6: in their smartphones.
Speaker 7: And they put V eight.
Speaker 6: What does that mean, Well, it means more processors to
Speaker 6: handle these complex tasks to as AI. So what you
Speaker 6: have is a compounding effect. Increased rates from the new version,
Speaker 6: but more and more compute because more and more computes
Speaker 6: needed to run these complex devices.
Speaker 7: So it's having a real growth effect for.
Speaker 4: US, Renee, what happened in China was a surprise. How
Speaker 4: long does that continue?
Speaker 7: For?
Speaker 6: You know, China follows the rest of the world for
Speaker 6: US said in the sense that where we're very strong
Speaker 6: in the rest of the world visa V data centers
Speaker 6: or evs, China follows that. And the reason is that
Speaker 6: the software ecosystem, which is global that is really predominantly
Speaker 6: ARM based. China partners want to leverage that and one
Speaker 6: thing that China is very unique about is speed. They
Speaker 6: want to go as fast as possible, develop products as
Speaker 6: quickly as possible. Well, the software base allows them to
Speaker 6: develop products very quickly to the market will the dot.
Speaker 6: So you know, there's been a lot written about China
Speaker 6: headwinds than the market, et cetera. But for US, China
Speaker 6: has been a great market.
Speaker 4: For a Bloomberg television and radio audience for speaking to
Speaker 4: the ARM CEO Renee has overnight rene soft Bank, which
Speaker 4: holds twenty percent of your company, said that they're going
Speaker 4: to put you at the center of their AI strategy.
Speaker 3: How much say are you going to have in that?
Speaker 4: If SoftBank is kind of dictating how they see your
Speaker 4: role in the playout of AI infrastructure, well.
Speaker 6: I can speak from kind of two hats. One is
Speaker 6: as the CEO of ARM and the other as a
Speaker 6: soft failing board member. I'll speak to the former primarily here.
Speaker 6: We believe that AI is the most profound opportunity in
Speaker 6: our lifetimes, and we are only at the beginning. When
Speaker 6: you think about artificial general intelligence and what is required
Speaker 6: to make that happen in terms of compute, power, efficiency, energy,
Speaker 6: those are all great areas for.
Speaker 7: Us to be involved in focusing in.
Speaker 6: So I think AI is not in any way, shape
Speaker 6: or form a heighth cycle.
Speaker 7: I think we're in incredibly early.
Speaker 6: Days, and I think it's going to have amazing impact
Speaker 6: on our planet.
Speaker 5: I mean extraordinary.
Speaker 2: We're still just looking at your share price now rocketing
Speaker 2: up to about sixty percent on the day, up more
Speaker 2: than seventy percent over the last five days. Are there
Speaker 2: any areas of concern for you were just talking about
Speaker 2: the macro picture, for example, being in China, that actually
Speaker 2: has played to your strengths, even though the rest of
Speaker 2: the economy we slightly worry about. China still a bright spot.
Speaker 2: What about geopolitics, what about the international role that you
Speaker 2: have as ARM.
Speaker 7: Yeah, it's a great question, you know.
Speaker 6: I think for CEOs, particularly now in the semi nutural world,
Speaker 6: the geopolitics, government relations, things of the nature. Five ten
Speaker 6: years ago, that wasn't something that we had to worry
Speaker 6: about a lot. Now it's obviously front and center in
Speaker 6: terms of how we think about the world. I think
Speaker 6: for ARM, I don't know that our issues are concerns
Speaker 6: there any different than my peer group faces we all
Speaker 6: share globally. We think the world is a better place
Speaker 6: when it's an easier global ecosystem, but we're also mindful
Speaker 6: that we are in very different times than we were
Speaker 6: five ten years ago.
Speaker 4: Rene a question from our audience on social media for you,
Speaker 4: will you start doing business directly with the software ecosystem
Speaker 4: in the context of AI edge computing.
Speaker 3: That's what they want to know.
Speaker 6: We do a lot of business with the software ecosystem
Speaker 6: in the sense of that they're incredibly strong partners to us.
Speaker 6: When you think about Android as a software ecosystem, when
Speaker 6: you think about Windows, when you think about everything going
Speaker 6: on with open source software, that is something we are
Speaker 6: incredibly involved in, particularly from a technology side, because at
Speaker 6: the end of the day, what makes arms so pervasive,
Speaker 6: it's a software ecosystem like no other. So software is
Speaker 6: front and center of what we think about in terms
Speaker 6: of all of our engineering engagements.
Speaker 4: I'm CEO Rene has stock Storing. Great to have some
Speaker 4: time with you, Thank you so.
Speaker 7: Much, Thank you so much.
Speaker 4: Coming up will break down Disney's earnings with Gerber Kawasaki
Speaker 4: co owned president Ros Gerbert. That's coming up next. This
Speaker 4: is Bloomberg Technology.
Speaker 8: The purpose of the venture is purely distribution. It's not
Speaker 8: about procurement of content. So we'll continue to compete with
Speaker 8: each other for sports rights just as we always have.
Speaker 8: It'll actually, I think, be a great benefit to the
Speaker 8: league because it's no different in terms of the way
Speaker 8: we bid for sports rights. But that reduced friction benefits
Speaker 8: all of the leagues as well, So I think the
Speaker 8: leagues will actually be pretty optimistic about this.
Speaker 4: That was Disney CFO Hugh Johnson. They're commenting on ESPN,
Speaker 4: Fox and Warner Brothers discoveries, earlier sports bundling announcement, and
Speaker 4: Disney shares pushing above a one year high today after
Speaker 4: topping earnings estimates and issuing an upbeat profit outlook for
Speaker 4: the year, citing cost cutting benefits and the strong performance
Speaker 4: of its international theme parks business. Disney Plus subscribers fell
Speaker 4: short of estimates, though, and Dizzey says it will invest
Speaker 4: one point five billion dollars in epic games. I want
Speaker 4: to bring in Bloombers, Chris Palmery out of LA to break.
Speaker 3: It all down.
Speaker 4: I think we just start with what the streets probably
Speaker 4: focused on, which is Bobbyga delivers and they like it.
Speaker 9: Yeah.
Speaker 10: I mean, if you think about it was about a
Speaker 10: year ago where I announced these big cost cuts or
Speaker 10: restoration of the dividend. It was all under the context
Speaker 10: of the pressure from activist Nelson Pelts.
Speaker 9: Pelts ended up dropping out the next.
Speaker 10: Day, and here we are a year later, we seeing
Speaker 10: results of all that cost cutting.
Speaker 9: Still a Peltz challenge.
Speaker 10: Health says he's sticking with it, but you know, you're
Speaker 10: definitely seeing either deliver on that, and I think he's
Speaker 10: probably feeling pretty happy about the stock price today.
Speaker 2: I mean, Chris, he's delivering on profitability, on cost cuts,
Speaker 2: but ultimately revenue. There are still worries about well, when
Speaker 2: they really do see growth once again and the subscribers
Speaker 2: coming back to Disney Plus, when we start to actually
Speaker 2: see a revenue driver coming from the parks here in
Speaker 2: the US, just internationally and indeed just the media side
Speaker 2: of the business, the TV legacy still really hurting. Where
Speaker 2: was there to be excited in some of these new partnerships,
Speaker 2: I think particularly Epic Games.
Speaker 9: Well, for sure, there's a lot of negative here.
Speaker 10: I mean no intendants growth in all Disney World in Florida,
Speaker 10: basically no growth in Disney Plus. In fact, they're predicting
Speaker 10: a pretty big subscriber gain in the current quarter, six million,
Speaker 10: when early.
Speaker 9: All of that are the ones they're giving away essentially to.
Speaker 10: Charter, although they are getting, you know, a wholesale fee.
Speaker 10: And also, as you mentioned, traditional TV double digit decline.
Speaker 10: Part of that is due to the strikes in Hollywood
Speaker 10: last year. Put again not a really good trend. The
Speaker 10: market did seem to really enjoy this Epic investment. It's
Speaker 10: a big number for a minority stay but you know,
Speaker 10: partnering with the Fortnite maker and getting Disney's it's sort
Speaker 10: of a situation where they can license their content and
Speaker 10: enjoy some upside.
Speaker 9: Epic Company appreciates.
Speaker 5: Always about the IP.
Speaker 2: Chris pol Murray, great to get really a breakdown on
Speaker 2: what we heard on the earnings after the bell yesterday.
Speaker 5: Let's get an investor take now.
Speaker 2: Ros Gerbran pleased to say, joins us president and CEO
Speaker 2: of Gerbert Kawasaki and.
Speaker 5: Ross, what were you most thrilled about in instead of numbers?
Speaker 5: Because there was a lot to digest.
Speaker 7: Taylor Swift.
Speaker 11: I mean, this is the Bob Iger effect, you know,
Speaker 11: where Nelson Peltz can't get his way around Hollywood to
Speaker 11: save his life. You know, Bob Iger is really the
Speaker 11: key to getting good content back on Disney, which ultimately,
Speaker 11: when you talk about all the things that need to
Speaker 11: drive Disney forward, it's all about great IP or great content,
Speaker 11: and that's the biggest challenge is making great content in Hollywood.
Speaker 11: So to get sort of like the Taylor's cut of
Speaker 11: this version of the movie for Disney Plus will definitely
Speaker 11: move the needle in a huge way. You know, she's
Speaker 11: a phenomenon that's massive, So that's a great start. And
Speaker 11: then their investment in Epic games. You know, the kids
Speaker 11: played for it, you know, consistently in having an alternative
Speaker 11: universe that's all Disney characters and all the ancillary revenue
Speaker 11: that comes with all the purchases on an ongoing basis
Speaker 11: from the way gaming is done today, is not only
Speaker 11: a business Disney needs to be in, but they're smart
Speaker 11: in that they're letting Epic do it. Disney's failed and
Speaker 11: gaming over and over again, but Epic has been a
Speaker 11: wonderful success. So these verticals, along with the way they're
Speaker 11: monetizing ESPN, is exactly what Disney needs.
Speaker 7: To be doing.
Speaker 4: That's a pretty good summary ross of about seven different
Speaker 4: stories that came out. Yes, I mean on the video
Speaker 4: game side, I think that's two thousand and two Kingdom Hearts,
Speaker 4: which was a JV Disney did with Square NX. I
Speaker 4: don't fully understand though, how the Epic relationship plays out.
Speaker 4: You know, there's an emphasis on licensing content. I get
Speaker 4: that is Disney saying, Okay, I think we better go
Speaker 4: back big into into video games. Light Netflix is done
Speaker 4: on the mobile app sense.
Speaker 11: One hundred percent, so it's more than just gaming, it's
Speaker 11: social gaming, which is really you know, Roadblocks being the
Speaker 11: best example of this.
Speaker 9: My kids don't just play games. They play games with
Speaker 9: their friends.
Speaker 11: They do not play these games by themselves, and most
Speaker 11: of the time now they're connecting through FaceTime on their
Speaker 11: iPads and then playing Fortnite or playing Minecraft, or in
Speaker 11: a lot of cases just Roadblocks. And so this is
Speaker 11: about getting into the zychis of what kids are doing,
Speaker 11: having a social element to the gaming aspect, but also
Speaker 11: a way to extend their brands in many different ways
Speaker 11: through this open world platform.
Speaker 7: If you've ever played Fortnite.
Speaker 11: One of the coolest things about it is it's constantly
Speaker 11: changing the environment, the worlds, and the different characters.
Speaker 12: And so by building.
Speaker 11: More Disney into this, it seeds the next generation of
Speaker 11: future Disney users, which has always been one of Disney's
Speaker 11: great strengths and something that they've lost with their failure
Speaker 11: to really have any animation hits over the last several years.
Speaker 4: Ross Bobby gets delivered on the bottom line with cost cutting,
Speaker 4: and he delivered growth through the park's business. So I
Speaker 4: go back to the question I always ask you, is
Speaker 4: Disney a technology company?
Speaker 11: Well, Disney is what I would consider a pure entertainment
Speaker 11: company that's adopting technology in many aspects of its business,
Speaker 11: but in its pure it's about going to the theme
Speaker 11: park and living out your sort of dreams and fantasies,
Speaker 11: whether it be Star Wars or Marvel or Avatar. It's
Speaker 11: about the physical experience, but then augmenting it with the
Speaker 11: digital experience. And that's where Disney Plus and the gaming
Speaker 11: and all the other assets that they're building that are
Speaker 11: digital are so complementary to the physical assets that Disney
Speaker 11: owns that are irreplaceable. You just really can't replace taking
Speaker 11: your kids to Disneyland in any other experience. But then
Speaker 11: when they get home being able to get onto Fortnite
Speaker 11: and play with the characters, or watch Disney Plus and
Speaker 11: watch Taylor Swift, They've got all elements of entertainment covered.
Speaker 7: So this is a.
Speaker 11: Great first step for Disney on their recovery, and I
Speaker 11: think if they follow through with some great ip over
Speaker 11: the next couple of years, you know Disney will be back.
Speaker 2: Because that maybe is where they've missed, certainly in the
Speaker 2: film studios part of it, Wish for example, really not landing.
Speaker 2: I'm interested in the legacy bits of the business ABC,
Speaker 2: the TV parts that had seemingly been up for sale
Speaker 2: and then retracted a little bit. What do you see
Speaker 2: as the strategy going forward?
Speaker 7: Ross profitability?
Speaker 11: I mean, they've managed to keep ABC, you know, profitable,
Speaker 11: so it is creating cash for them, even though it's
Speaker 11: on a declining you know, sort of revenue base. They've
Speaker 11: managed to just cut costs and maintain that business. But
Speaker 11: we all know linear TV is dead, and the cable
Speaker 11: bundle is dead, and even Spectrum, which is a cable company,
Speaker 11: doesn't actually provide cable anymore, you know, it's a streamer
Speaker 11: now too.
Speaker 3: So I think Disney's making.
Speaker 11: The right moves from trying to get their content and
Speaker 11: multiple different platforms, including on Charter as well as Spectrum
Speaker 11: as well as you know this new ESPN bundle which
Speaker 11: is wonderful for sports fans. So I think getting IP
Speaker 11: in the most places possible and having high quality IP
Speaker 11: ultimately is what the entertainment business is all about.
Speaker 4: Ross, we just have ten seconds. Do you increase your
Speaker 4: position in Disney from here?
Speaker 13: Well?
Speaker 11: Fortunately I did increase my position in Disney under one
Speaker 11: hundred in my fund GK over the last several months.
Speaker 11: I think Disney is worth over one hundred and twenty
Speaker 11: dollars a share, and at the Hiota's worth two hundred
Speaker 11: dollars almost So I think for investors, if you see
Speaker 11: this stock down at this level, I think it's one
Speaker 11: of the few values left in the stock market which
Speaker 11: is fairly richly priced today. So I think Disney is
Speaker 11: a compelling investment and one that we own and one
Speaker 11: that we recommend.
Speaker 4: Right Rosco the PRESIDENCYBA Kawasaki, good to catch up.
Speaker 3: Thank you time for talking tech.
Speaker 4: First start, South Korean prosecutors are appealing a sole court
Speaker 4: ruling that cleared Samsung executive chairman Jayly of all charges,
Speaker 4: including stock price manipulation and accounting fraud. The prosecutors in
Speaker 4: November saw a five year prison sentence along with a
Speaker 4: fine f lee but this week the court Acquittedly and
Speaker 4: other Samsung officials. The appeal means the case will be
Speaker 4: heard now by a higher court.
Speaker 3: Plus.
Speaker 4: German industrial company Zemen saw orders largely stagnate in the
Speaker 4: fiscal first quarter as factory automation purchases in China plummeted
Speaker 4: by fifty five percent. The drop offsets gains in its
Speaker 4: mobility in industrial units However, the company sees China bouncing
Speaker 4: back in the second half of the year. In AI
Speaker 4: disclosures to the SEC are jumping as the agency warms
Speaker 4: of misleading claims. Just over forty percent of S and
Speaker 4: P five hundred companies mentioned AI in their most recent
Speaker 4: annual report with the SEC, according to Bloomberg Law's review
Speaker 4: of the disclosures, That continues an upward trends in twenty eighteen,
Speaker 4: when AI was only mentioned sporadically. SEC officials have repeatedly
Speaker 4: warned companies about making misleading AI related claims, including so
Speaker 4: called AI washing, which could lead to legal action.
Speaker 2: Tucker Carlson's interview with Russian President Vladimir Putin, Well, it's
Speaker 2: going to go live six pm Eastern Time today and
Speaker 2: it's the first interview with the Russian leader by US
Speaker 2: journalist since Russia invaded Ukraine almost two years ago.
Speaker 5: It's an unedited interview.
Speaker 2: It's going to air on his own website, Tucker Carlson's,
Speaker 2: but he also of course said that it will be
Speaker 2: entering in full on X an ed we want to
Speaker 2: stick on all things.
Speaker 3: X yeah X.
Speaker 4: The company and platform formerly known as Twitter, Elon Musk's
Speaker 4: acquisition of Twitter in twenty twenty two, was initially heralded
Speaker 4: by co founder Jack Dorsey as quote the singular solution
Speaker 4: he trusted to handle Twitter as a company. A year later,
Speaker 4: Dorsey said, quote it all went south. All that and
Speaker 4: so much more is unpacked in Battle for the Bird,
Speaker 4: a book by Bloomberg's own Kurt Wagner, who joins us now.
Speaker 3: And what can I say?
Speaker 4: I had the privilege of living this alongside you, and
Speaker 4: I want our global audience to relive that story through
Speaker 4: your book, summarize the tale that you hope to tell.
Speaker 7: Yeah, you did ed.
Speaker 14: We were in the trenches together on that one. And
Speaker 14: you know, I really think of this book as kind
Speaker 14: of two parts. You know, Part one was Twitter one
Speaker 14: point zero, the Jack Dorsey years, and there was a
Speaker 14: lot of drama there too, if you'll all remember, it
Speaker 14: wasn't necessarily smooth stealing before Elon showed up. And part
Speaker 14: two is really the Elon experiment that we've seen for
Speaker 14: the last eighteen months or so. And what I tried
Speaker 14: to focus on was was really this handoff between these
Speaker 14: two people, right, I mean, it wasn't an accident that
Speaker 14: this deal got done. It was something that Jack Dorsey
Speaker 14: was pushing for behind the scenes, and you know, Elon
Speaker 14: was someone he admired, someone he thought was going to
Speaker 14: be a good steward for this company moving forward. And
Speaker 14: as you pointed out, you know, I think he kind
Speaker 14: of has acknowledged since it didn't go the way that.
Speaker 7: He had hoped it would.
Speaker 4: When you were in the reporting phase, what was the
Speaker 4: thing about Twitter's original history or the takeover by mass
Speaker 4: that surprised you the most that you thought, Wow, Yeah.
Speaker 14: I think my favorite chapter in the book is actually
Speaker 14: a chapter about Elliott Management, the activist investor shop that
Speaker 14: came in and essentially tried to kick Dorsey out of
Speaker 14: his job. This was in early twenty twenty, right when
Speaker 14: COVID was starting to happen, and you know, it was
Speaker 14: an interesting business story at the time, but there was
Speaker 14: so much happening behind the scenes that folks didn't get
Speaker 14: to see in the moment that gets covered in the book.
Speaker 14: And why I think it's so important is that was
Speaker 14: really the moment that Jack Dorsey realized I can't run
Speaker 14: this company anymore, even though he got to keep his job,
Speaker 14: even though from on the surface it looked like he
Speaker 14: had sort of won. I really think that moment, you know,
Speaker 14: sent him packing, and as a result, it opened the
Speaker 14: door for Elon to come in, right, And I think
Speaker 14: Elliott sort of created a blueprint that activist investors could
Speaker 14: take over, and Elon was sort of an activist investor
Speaker 14: in his own right, just in a different form.
Speaker 5: And Kurt, of course, Elon then tried to walk away
Speaker 5: from the deal, was unable to do.
Speaker 11: So.
Speaker 2: I want to go to almost the play out in
Speaker 2: the here and the now on the Bloomberg terminal today.
Speaker 2: We've got a great excerpt from your book, and really
Speaker 2: it details how in the very.
Speaker 5: Beginning we go back to November twenty twenty two.
Speaker 2: Ultimately Elon realizes that him being unfiltered is starting to
Speaker 2: impact advertisers. Well, certainly a sales team seemed to recognize that.
Speaker 2: And there's a great bit where you'll say one particular
Speaker 2: key sales rep that well, head of sales, really Robin
Speaker 2: Wheeler says, you don't want to go to war with advertisers, and.
Speaker 5: Elol says, oh, I will go to war and I
Speaker 5: win wars. And he's currently at war with them.
Speaker 9: Yeah.
Speaker 14: I mean, this is the reason I wanted to include that.
Speaker 14: Right at the beginning of the story, is it sort
Speaker 14: of sets the stage for everything we've seen from Elon
Speaker 14: since he's taken over, Right, I mean that mindset has
Speaker 14: not changed, Right. It just fast forward a year from
Speaker 14: that when he was on stage at deal Book and
Speaker 14: he told advertisers to go f themselves, Right. I mean,
Speaker 14: this is someone who you know, from day one essentially
Speaker 14: didn't fully understand that there's a tension and a trade
Speaker 14: off between his vision for free speech and the fact
Speaker 14: that advertisers need to kind of continue to fund this platform.
Speaker 14: And I think it's sort of telling that his mindset
Speaker 14: again that first week is still very much his mindset
Speaker 14: as far as we can tell today. And there's a
Speaker 14: reason that things haven't gotten better for their business.
Speaker 2: And he's currently well financing others to take legal action
Speaker 2: against Disney.
Speaker 5: I mean, the fact that this.
Speaker 2: Intertwines with today's news and Disney's earnings is fascinating. Kurt
Speaker 2: push us forward though in the here and the now,
Speaker 2: advertisers you speak to, we just think about the super
Speaker 2: Bowl about to arrive this weekend, the focus on sports.
Speaker 2: I mean, he was running around the New York trying
Speaker 2: to persuade the NFL to stick with him, persuade big
Speaker 2: advertising agencies w to stick with him.
Speaker 5: Where do we stand now under Linda Yacarino.
Speaker 7: Yeah, it's not very good.
Speaker 14: Unfortunately. You know, we talked earlier this week about sort
Speaker 14: of the shows that you know, Tucker Carlson bringing stuff
Speaker 14: a live exclusive stuff, it's not live, but exclusive stuff
Speaker 14: to X and others. And I've been talking to media
Speaker 14: buyers and it's just not moving the needle for them, right,
Speaker 14: And mostly it's because of Elon and the fact that
Speaker 14: he is so unpredictable. You know, he can say things
Speaker 14: to hundreds of millions of people instantly that most brands
Speaker 14: would be very reluctant to be associated with. And so
Speaker 14: for them, you know, Twitter just never provided enough value
Speaker 14: for that to be worth it. And I think unfortunately
Speaker 14: X is in the same boat. They don't necessarily drive
Speaker 14: enough sales for these companies that they're willing to put
Speaker 14: up with the unpredictability of Elon Musk And as so far,
Speaker 14: there has not been a solution to that.
Speaker 5: Jack Dawsey's learned it, the market learns it.
Speaker 2: An extraordinary piece of writing that both both of you
Speaker 2: in the trenches, as he's say, but an amazing book
Speaker 2: coming from you, Kurt Wagner.
Speaker 5: We thank you so much for bringing it to us today.
Speaker 2: Meanwhile, coming up there, let's go back to the other
Speaker 2: world of Jack Drsey. He quite likes bitcoin, hey or
Speaker 2: bitcoin tops forty five thousand. As the ETF inflows show
Speaker 2: all some steadiness at the moment, suddenly the lack of
Speaker 2: outflows coming from GBTC will break it down.
Speaker 5: Next, this is Bloomberg Technology.
Speaker 2: Disney up twelve percent after we see profitability being delivered
Speaker 2: by bob Byger and paypalvo on the downside more than
Speaker 2: eleven percent. Look, even though they're still taking eyes on
Speaker 2: costs and stripping out workers, they are overall still seeing
Speaker 2: that volumes are not living up to where the anticipation
Speaker 2: is and there's some worry around competition still. But for
Speaker 2: more on these markets, we want to go broader with
Speaker 2: Bloomberg's Isabelle Lee because there has been some fascinating cash
Speaker 2: being made by these overall tech firms.
Speaker 5: The idea that dividends are being given.
Speaker 2: Back, shared buybacks being promised, Disney of Cours being one
Speaker 2: of those.
Speaker 5: What are you seeing more borneans too is not to
Speaker 5: get in at these valuations, so that's the thing with tech.
Speaker 15: They're very expensive, way more expensive than those in the benchmark.
Speaker 15: But then money managers argue that they're quality companies. Yes,
Speaker 15: all of them are magnificent seven socks are expensive, maybe
Speaker 15: accept they're expensive, especially Tesla, but they're all quality. Maybe
Speaker 15: accept Tesla. And that's why a lot of money managers
Speaker 15: I talk to are careful not to be too underway
Speaker 15: tech because they don't want to lose on those gains.
Speaker 15: But they're also very careful because the unstoppable rally and
Speaker 15: relentless rally that they we've seen last year, it remains
Speaker 15: to be seen where it will happen again.
Speaker 5: I mean, you can only go up so much.
Speaker 15: But then money managers have been telling me that it's
Speaker 15: kind of getting harder to beat the benchmark because the
Speaker 15: benchmark is not anymore such a good measure anymore of
Speaker 15: what the index should because it's so heavy on tech.
Speaker 4: The waitings discussion is really important. I go back to
Speaker 4: the story we did a few weeks ago on where
Speaker 4: the net long positions were twelve months ago, and the
Speaker 4: you know, big funds just weren't as exposed to tech
Speaker 4: at being a of twenty twenty three as they would
Speaker 4: have liked to have been, they missed out, and so
Speaker 4: now fast forward to present day, they want to keep
Speaker 4: that going. But if we hit SMP five thousand sounds exciting,
Speaker 4: you know how much further can we go?
Speaker 3: In twenty twenty four?
Speaker 15: Five thousand is a really important psychological mark. Traders love
Speaker 15: round numbers and five thousand is a shiny new round number,
Speaker 15: and which is why we're seeing that options traders. If
Speaker 15: you look at the weekly Options Expert on Friday, it
Speaker 15: has seen a surge and open interest, and honestly it
Speaker 15: just really shows how bullish traders are and more broadly
Speaker 15: investors in Wall Street. I mean, the economy is stronger
Speaker 15: than expect, that the job market is robust. This fuels
Speaker 15: consumer spending, which intern fuels a good economy. But then
Speaker 15: how much more can the market rise?
Speaker 7: Right?
Speaker 15: Like, look at the SMP yere today that's up four
Speaker 15: and a half percent, NASTAC is up five and a
Speaker 15: half percent, but the equal with SMP it's flat. In
Speaker 15: twelve months back, we have the equal weight also up
Speaker 15: by just around four percent, whereas an ASSAC is up
Speaker 15: almost forty two percent. So the rally maybe losing seam.
Speaker 15: We're seeing overbought conditions. Traders are probably getting tired. I
Speaker 15: mean you do in the end of the day kind
Speaker 15: of take a step back. You saying to yourself, should
Speaker 15: I keep on joining the momentum or should I really
Speaker 15: look at the quality of the companies? And I think
Speaker 15: traders are being more discerning right now. I've been burned
Speaker 15: by not taking part in the momentum. It's interesting some
Speaker 15: technical levels that we've been hitting on the cues as well,
Speaker 15: the ETFs to replicate the NASDAK one hundred tell us
Speaker 15: a little bit in the broader context whether people are
Speaker 15: saying to diversify, because we can get very focused on technology,
Speaker 15: pure and simple of the show, as we should, but
Speaker 15: diversification is key all people looking to diversify. People are
Speaker 15: looking to their diversify, but the tech rally isn't really
Speaker 15: helping them. It's funny you mentioned that because yesterday the
Speaker 15: MSCI World Index just hit it's all time high, and
Speaker 15: you're like, great, that's going to be my diversifier.
Speaker 5: But if you look at the top ten stocks of.
Speaker 15: Our constituents of the MSCI World, it's Apple, Microsoft, Nvidia,
Speaker 15: metasc Alphabet. Yes, and this is a gauge that's sixty
Speaker 15: one trillion dollars with fifteen hundred stocks in twenty twenty
Speaker 15: three markets, to be exact. But they sound like the Nassback,
Speaker 15: they sound like the Magnificent seven. So how do you diversify?
Speaker 15: And I read a great note yesterday that when you
Speaker 15: underweight something, it's not your least like stock. You usually
Speaker 15: underweight the stock you like the most because you can
Speaker 15: only have one hundred percent of everything. So it's actually
Speaker 15: a really a hard market. But then stock pickers would
Speaker 15: argue that no, actually, because we can find bargains. So
Speaker 15: it's it's a tough read. But it's really getting tougher
Speaker 15: for man and managers out there.
Speaker 4: Bloomberg saysabel Lee gets easy. I for you us having
Speaker 4: you on the show, believe me, Thank you so much.
Speaker 4: We appreciate it. Meanwhile, risk asset a choice bitcoin topping
Speaker 4: forty five thousand for the first time in a month.
Speaker 4: Is etf inflows show signs of steadying joining us now,
Speaker 4: James Safer of Bloomberg Intelligence, and this is how we
Speaker 4: track it.
Speaker 16: Now.
Speaker 4: You know that any given movement in XBT is fine.
Speaker 4: But I think I'm right in saying that Through Wednesday,
Speaker 4: nine straight consecutive days of positive net inflows into the
Speaker 4: ETF products.
Speaker 3: What does that tell you?
Speaker 9: Yeah, I mean part a lot of it is just
Speaker 9: really you.
Speaker 16: Can look at to GBTC, look the other we call
Speaker 16: it a newborn nine, so it's GBDC.
Speaker 7: In the Newborn nine.
Speaker 16: GBTC came over with billions of dollars and their outflows
Speaker 16: have slowed. They only saw eighty million out We were
Speaker 16: looking at hundreds of millions every single day coming out
Speaker 16: of GBTC. It was largely expected we had a lot
Speaker 16: of these bankruptcy estates, specifically FTX and other people that
Speaker 16: were kind of trapped in GBTC that were going to
Speaker 16: pour out, and it was remained to be seen how
Speaker 16: much of that was going to find its way back
Speaker 16: into bitcoin type exposure, whether it be the bitcoin ETFs
Speaker 16: or not. But we've seen these other Newborn nine pick
Speaker 16: up the slack. They've they've taken in flows pretty much
Speaker 16: every single day. We have four of these ETFs that
Speaker 16: have taken in flows every nineteen days in a row
Speaker 16: since they listed, or actually four have done eighteen of
Speaker 16: nineteen days and two have done nineteen days of inflows.
Speaker 16: So to be doing that, they're basically taking in money
Speaker 16: while GBTC is losing, which is giving us that nine
Speaker 16: days of straight inflows to these bitcoin ETFs.
Speaker 2: There were nine new US spot bitcoin ETFs, and actually
Speaker 2: there's been some analysis done over I think it's at
Speaker 2: Goldman or JP Morgan in fact, talking about the liquidity
Speaker 2: that they're seeing within amongst all the different ones just
Speaker 2: link for their space. Who's coming out on top at
Speaker 2: the moment.
Speaker 16: James, Yeah, So, I mean GBTC came out on top
Speaker 16: because for the most part it's had the most liquidity,
Speaker 16: it's had the tightest bits spreads. It was actually trading
Speaker 16: at a discount initially, so that was a little bit
Speaker 16: of a tailwind for its performance because the discount continued
Speaker 16: collapsing for the first few days of trading. But the
Speaker 16: last couple of days, I bit from Blackrock has actually
Speaker 16: out traded GBTC and all these other issuers, those newbern
Speaker 16: nine we just spoke about, their spreads have compressed significantly.
Speaker 16: So initially it was GBDC was the only one with
Speaker 16: really tight spreads. Then we had Fidelity in Blackrock catch
Speaker 16: up a little bit, and now we're seeing everyone else
Speaker 16: catch up in their spreads tighten as well. It'll be
Speaker 16: interesting to see how this plays out in the weeks
Speaker 16: and months down the line. But I bet is now
Speaker 16: competing with GBTC as far as trading volume and liquidity.
Speaker 4: Goes James increasingly the folks speaking to Bloomberger talking about
Speaker 4: the harving and they are trying to do the math
Speaker 4: on it.
Speaker 3: How big a factor is it for you in your model?
Speaker 12: Yeah, I mean I'm paying attention to it.
Speaker 16: Obviously I look at it, but for the most part,
Speaker 16: I'm just looking at the hard data of what's being
Speaker 16: bought and sold, so what we're paying attention to it.
Speaker 16: So these inflows, if it really continues, which there's no
Speaker 16: guarantee it will. I would point out the DCG Gemini Genesis.
Speaker 16: There's a whole bunch of stuff going on with the
Speaker 16: Genesis bankruptcy. They have roughly sixty seven million shares as
Speaker 16: of September that we know they own, so that could
Speaker 16: be another huge selling point for GBTC. I mean selling
Speaker 16: catalysts for GBTC, which would be selling of the underlying bitcoin.
Speaker 16: So we need to see what's going to happen there
Speaker 16: or what has happened. We don't have insight to that,
Speaker 16: so I'm more interested in that than necessarily exactly how
Speaker 16: the having is going to impact what's going on here.
Speaker 16: The other thing I would say that I'm watching is
Speaker 16: we're talking about inflows to these spot bitcoin ETFs. In
Speaker 16: the US, we've seen outflows from bitcoin futures ETFs and
Speaker 16: bitcoin futures open interest, and we've seen outflows on a
Speaker 16: net basis in Canada and Europe in these bitcoin and
Speaker 16: crypto ETFs. So there's a little bit of there's a
Speaker 16: lot of money moving around here, and it's kind of
Speaker 16: hard to know exactly like what's what's net new inflow
Speaker 16: when you look at the entire ecosystem of bitcoin type exposure.
Speaker 3: James Safer of Bloomberg Intelligence.
Speaker 2: Apple's limited release of the Vision Pro headset is well
Speaker 2: forstering a resale market, pricing the device far beyond that
Speaker 2: three thousand, five hundred dollars starting price, and that's overseas
Speaker 2: prices ranging from four thousand dollars to even six thousand
Speaker 2: dollars for the price shifting on a daily basis.
Speaker 5: Let's bring in Bloomberg's Mark German for more.
Speaker 2: And ultimately think does Apple like this sort of occurrence,
Speaker 2: this this secondary market flavor, you know, I think.
Speaker 12: It shows excitement for the product overseas, right.
Speaker 17: It gives them sort of a set of data points
Speaker 17: for which markets are particularly interested in the product, so
Speaker 17: that maybe they could fine.
Speaker 12: Tune how they're going to allocate supply when they.
Speaker 17: Eventually go to those markets, which markets are they going
Speaker 17: to approach first.
Speaker 12: So it's certainly a helpful data point for Apple. Does
Speaker 12: Apple like it? Not necessarily? I think it creates a
Speaker 12: lot of complexity.
Speaker 17: The app Store and some of the features on the
Speaker 17: Vision Pro require a US Apple ID, so having these
Speaker 17: products operate overseas could create some customer service problems and perhaps.
Speaker 12: Create a bad experience. But at the same time, it's
Speaker 12: leading to.
Speaker 17: More sales in the US, and Apple doesn't necessarily care
Speaker 17: how they get their money for the Vision Pro as
Speaker 17: long as the units are selling. So I certainly think
Speaker 17: it's a mixed bag for Apple, but maybe a little
Speaker 17: bit more helpful than not.
Speaker 7: Mark.
Speaker 4: You've unboxed your own Vision Pro, You've had a few
Speaker 4: days of living with the Vision Pro, You've roamed the streets,
Speaker 4: You've been on the bus, I mean, you've been in
Speaker 4: Oh that thing right there, how tempted you to resell
Speaker 4: that thing for five thousand dollars.
Speaker 12: I am not tempted to resell it. I'm going to
Speaker 12: hold on to this thing.
Speaker 17: There's going to be software updates, new features, and all
Speaker 17: sorts of stuff.
Speaker 12: I'm going to keep reviewing it, so it's important for
Speaker 12: me at least to hold on to it.
Speaker 17: I've spoken to a few people already who are considering
Speaker 17: returning it, but the vast majority of people that I've
Speaker 17: talked to think it's magical. You'll see my full review
Speaker 17: on the product this weekend on Sunday and my power
Speaker 17: on But you know, so far, I think it's a
Speaker 17: great experience. There are certainly a slew of drawbacks. There's
Speaker 17: a ton of bugs. Like I said, it's one of
Speaker 17: the bugear first generation Apple products. But the fundamentals and
Speaker 17: the foundation is there, and with the right software updates,
Speaker 17: with the right upgrades, with the right harbor changes, I
Speaker 17: think they have a winner on their hands.
Speaker 12: It's just it's not winning yet. It will eventually, all right.
Speaker 4: Bloomberg's Mark German set the reminder Sunday power on full
Speaker 4: Vision Pro review coming very nice. Let's go from VR
Speaker 4: to AI with Google bringing more of its products into
Speaker 4: the Gemini ecosystem, but renaming Bard to Gemini, I want
Speaker 4: to bring in Bloombergs Judia Love, who has been explaining
Speaker 4: how all this works. I think the story here is
Speaker 4: that they want to demonstrate that the product, that the
Speaker 4: tool is higher end, it's competitive. It is one thing
Speaker 4: what's behind the move.
Speaker 13: Absolutely, I think they want to demonstrate that this is
Speaker 13: a product that's worth paying for. There's a lot of
Speaker 13: excitement about the potential of AI, but it's also a
Speaker 13: cost center for these companies.
Speaker 9: Alphabet CFO Ruth Borat.
Speaker 13: Has said that Capet will be up a lot this year,
Speaker 13: and so I think that they're really under pressure to
Speaker 13: demonstrate that there's a business model for this product. And
Speaker 13: so in addition to renaming Bard Gemini, they're also rolling
Speaker 13: out in nineteen ninety night Among the subscription plan in
Speaker 13: which you can pay for access to the latest model.
Speaker 9: And so it really feels.
Speaker 13: About to move this, you know, showing and showing where
Speaker 13: the money is for these products.
Speaker 2: And basically ripping a leaf out of the open ai
Speaker 2: book on how you make a business model out of this.
Speaker 13: Absolutely there their product is one penny cheaper than open Ai,
Speaker 13: so we'll.
Speaker 2: See competitive I do think though, ultimately, what are the
Speaker 2: reviews like for Ultra one at the moment. How have
Speaker 2: people been interacting it, how they felt that, Look, this
Speaker 2: can be the area that stops the market share being
Speaker 2: lost to a being that's now of course wrapped into
Speaker 2: it open Ai.
Speaker 13: Well, Noodle only released the product this morning, so users
Speaker 13: are still doing their hands on it and seeing how
Speaker 13: it stacks up to open Ai. What I'm hearing so
Speaker 13: far is that the product there appears to be parody
Speaker 13: between the models, but it's But Gemini is not necessarily
Speaker 13: blowing GBT for of the water. As Gordle was suggesting
Speaker 13: in some of its press briefings that this model had
Speaker 13: outstored Gemini and key Key methods.
Speaker 4: Google played it a bit safe, Let's be honest, for
Speaker 4: quite a long time. Do you think they now are
Speaker 4: showing their full hand of how they commercialize.
Speaker 3: All this R and D.
Speaker 13: I think this is an important frown in the strategy,
Speaker 13: but more and more will still be needed. I don't
Speaker 13: feel that one nineteen ninety nine a month subscription product
Speaker 13: will be enough to really demonstrate that their years of
Speaker 13: investment have paid off.
Speaker 2: I'm sure for many the fact that you can automatically
Speaker 2: use it within your Gmail and your Google Docs might
Speaker 2: well be a winner versus toggling between your chat, GPT
Speaker 2: or not. But Julia Love absolutely brilliant to have you
Speaker 2: on about the latest iteration and announcements coming from Alphabet in.
Speaker 5: The chatbot wars.
Speaker 2: Meanwhile, well look that does it for this additional BlueBag technology.
Speaker 3: What a full edition it?
Speaker 2: Or some CEO interviews to what's happening in terms of
Speaker 2: the investor base when it comes to Disney.
Speaker 5: What's some winners we had on the earnings front.
Speaker 4: Yeah, it's been a wild earning season. Recap the show
Speaker 4: on the podcast Apple, Spotify, iHeart. We're putting in podcasts
Speaker 4: on the Bloomberg platforms that will tune in on your
Speaker 4: way into work.
Speaker 3: This is Bloomberg Technology.