WEBVTT - Microsoft and AMD Earnings, and Nvidia and Meta CEOs Discuss AI 0:00:02.600 --> 0:00:12.160 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.720 --> 0:00:13.080 From the heart of where Innovation, money and power. Collie 0:00:13.320 --> 0:00:14.960 in Silicon Valley, Nbon. 0:00:15.360 --> 0:00:19.800 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:33.120 --> 0:00:34.040 Live from New York. 0:00:34.159 --> 0:00:38.200 This is Bloomberg Technology, Microsoft and AMD earnings on deck 0:00:38.440 --> 0:00:41.479 as big tech flirts with a correction, and we hear 0:00:41.520 --> 0:00:45.280 from Nvidio's CEO on Meta and Zuckerberg being their most 0:00:45.280 --> 0:00:49.479 important customers. Plus a Tesla test drive that hit a roadbump. 0:00:49.520 --> 0:00:53.640 Truest analyst William Stein joining us after narrowly avoiding a 0:00:53.680 --> 0:00:57.840 car accident while testing full self driving. 0:00:58.320 --> 0:00:59.320 This is a big day. 0:00:59.440 --> 0:01:03.160 It's the charting gun basically for megacap tech earning. So 0:01:03.240 --> 0:01:06.319 after market, you start with Microsoft and you start with AMD, 0:01:06.640 --> 0:01:08.920 talking a lot about the money machine, the money going 0:01:08.920 --> 0:01:11.920 into the machine, the investment in the infrastructure. That's where 0:01:11.920 --> 0:01:15.240 we check on AMD that soft buy almost a percentage point. 0:01:15.400 --> 0:01:17.720 The money coming out is the top line growth. Are 0:01:17.760 --> 0:01:20.720 we going to see any anything tangible from Microsoft? In 0:01:20.760 --> 0:01:25.759 particular massive investment in terms of CAPEX into the GPUs 0:01:25.800 --> 0:01:28.520 and infrastructure needed for their cloud business. How is that 0:01:28.560 --> 0:01:30.960 translating to top line growth? Let's talk about it and 0:01:31.000 --> 0:01:33.959 what to expect with the Cole Web Senior vice president 0:01:34.160 --> 0:01:37.480 and financial advisor at the Wealth Enhancement Group, a national 0:01:37.600 --> 0:01:41.280 independent wealth management firm with eighty five point seven billion 0:01:41.319 --> 0:01:43.920 dollars in client assets. I've been talking about the money 0:01:43.920 --> 0:01:47.280 machine here on Bloomberg Technology, the money in for infrastructure 0:01:47.480 --> 0:01:49.960 and not knowing how much money's coming out in terms 0:01:49.960 --> 0:01:50.880 of top line growth. 0:01:51.000 --> 0:01:52.520 Is that how you would approach earnings? 0:01:53.680 --> 0:01:56.160 Yeah, you know, I think it's it's unique and you 0:01:56.200 --> 0:01:58.440 have to look at each company differently, and the setup 0:01:58.480 --> 0:02:01.160 going into this week is one where I think there 0:02:01.200 --> 0:02:03.640 has to be a hyper focus on the unique business 0:02:03.640 --> 0:02:07.280 model of each So when we talk specifically about Microsoft, 0:02:07.440 --> 0:02:10.600 the thing that we know is that capacity is below demand. 0:02:11.040 --> 0:02:14.320 So to your point, the spending is going to be high. 0:02:14.360 --> 0:02:17.720 We expect that both in land GPUs, but on the 0:02:17.760 --> 0:02:20.880 same token, we expect that bookings are going to be 0:02:20.919 --> 0:02:24.360 relatively strong again this past quarter, and so we look 0:02:24.440 --> 0:02:28.000 to names like Microsoft or continued Efficiency where they can 0:02:28.040 --> 0:02:32.000 offset some of that cost spend through other parts of 0:02:32.040 --> 0:02:35.000 the business. The other thing that I would mention, you know, 0:02:35.040 --> 0:02:38.600 our King's point team is things that there's actually going 0:02:38.639 --> 0:02:42.360 to be this transition over where the forgotten sub sector 0:02:42.480 --> 0:02:45.280 of software is going to be more part of the 0:02:45.320 --> 0:02:48.760 conversation again going forward. So we expect that both from Microsoft, 0:02:49.160 --> 0:02:52.160 and we actually really think that about salesforce as well. 0:02:53.160 --> 0:02:56.160 Let's focus in on Microsoft. I think language is really important. 0:02:56.240 --> 0:02:59.960 Last quarter, Microsoft told us Nicole that they had over 0:03:00.120 --> 0:03:02.880 rule more than thirty percent top line growth for the 0:03:02.919 --> 0:03:06.040 cloud unit, and they said seven percent of that was 0:03:06.040 --> 0:03:09.400 a contribution from AI. Do you think that a number 0:03:09.480 --> 0:03:12.280 like that is enough for investors to say, okay, I 0:03:12.320 --> 0:03:15.240 believe the story for all the investment you've made, you 0:03:15.320 --> 0:03:17.840 are out actually making money from this AI thing. 0:03:19.000 --> 0:03:23.320 You know, this is where we are in a pivotal 0:03:23.440 --> 0:03:28.920 moment in evaluation. And so when you think about where 0:03:28.960 --> 0:03:32.240 exactly AI is going to take us five years from now, 0:03:32.880 --> 0:03:36.520 nobody knows the answer on that. What you're listening for 0:03:36.800 --> 0:03:41.360 is when can I expect any glimmer of return on 0:03:41.440 --> 0:03:44.040 the invested capital that's going to work today? 0:03:44.480 --> 0:03:46.600 And so you've seen that play out in. 0:03:46.760 --> 0:03:49.560 The last few weeks where you really did have to 0:03:49.640 --> 0:03:53.440 right size your positions as valuations looked a bit stretched 0:03:53.920 --> 0:03:56.400 if that is going to be a moving target. And 0:03:56.440 --> 0:03:59.200 so we are very much of the choppy and the 0:03:59.240 --> 0:04:02.480 short term great returns in a longer period of time 0:04:02.920 --> 0:04:05.840 as you see that navigation both of right sizing positions 0:04:05.880 --> 0:04:09.560 here to date from that really fast priced movement, and 0:04:09.600 --> 0:04:13.240 then also this expected drop down. 0:04:13.480 --> 0:04:16.400 In earnings in the next couple of quarters. 0:04:16.920 --> 0:04:19.480 There's a line in one of our Bloomberg Terminal stories 0:04:19.520 --> 0:04:21.640 today about how Microsoft is like one of the most 0:04:21.680 --> 0:04:25.440 widely held stocks in the world amongst retail investors and 0:04:25.560 --> 0:04:28.880 institutional investors. What kind of a dynamic is that when 0:04:28.880 --> 0:04:31.640 you talk to clients, it seems that Microsoft's always been 0:04:31.640 --> 0:04:33.040 there and you want to have a piece of it. 0:04:34.000 --> 0:04:38.760 Yeah, Microsoft became the utility of enterprise business, and so 0:04:39.320 --> 0:04:43.560 when you think about the structure of both business and 0:04:43.800 --> 0:04:48.240 personal life today, Microsoft is at the center of that. 0:04:48.800 --> 0:04:53.320 What Microsoft has built out for the consumer is a 0:04:53.440 --> 0:04:55.599 unique story, and so you can both look to them 0:04:55.680 --> 0:04:58.600 for having the free cash flow, the money to the 0:04:58.680 --> 0:05:02.599 money to build the the future of infrastructure, will also 0:05:03.200 --> 0:05:08.039 providing those subscription level services that are so necessary for 0:05:08.160 --> 0:05:12.280 day to day operations, and so from that perspective, it's 0:05:12.400 --> 0:05:15.680 really hard to break up with a position like Microsoft 0:05:15.800 --> 0:05:16.640 in a portfolio. 0:05:17.520 --> 0:05:19.560 Niicole I wanted to ask what this week's going to 0:05:19.560 --> 0:05:22.440 be like for you. You know, if you're a technology investor, 0:05:22.839 --> 0:05:26.400 you have just this incredible calendar of the world's biggest 0:05:26.400 --> 0:05:29.680 technology names reporting and then a FED meeting slap bang 0:05:29.720 --> 0:05:32.400 in the middle of it. How do you operate like 0:05:32.480 --> 0:05:33.520 that in that environment? 0:05:34.320 --> 0:05:35.080 Yeah, you know. 0:05:35.200 --> 0:05:37.920 I think starting on Friday, what we started to see 0:05:38.160 --> 0:05:42.440 was the narrowing in the divergence between Nasdaq and small cap, 0:05:42.480 --> 0:05:45.440 and so that gave us a better footing going into 0:05:45.480 --> 0:05:46.160 this week. 0:05:46.440 --> 0:05:49.039 When we think about the FED. 0:05:50.720 --> 0:05:54.839 We really see that as creating this backdrop where we 0:05:54.880 --> 0:05:58.880 believe there can be wider participation. So we want diversified 0:05:58.920 --> 0:06:01.880 portfolios to have their moment in the sun. 0:06:02.040 --> 0:06:03.640 Again, I think seeing. 0:06:03.360 --> 0:06:06.880 Too much return for too few names creates an investor 0:06:06.960 --> 0:06:10.600 sentiment that is systemically. 0:06:09.880 --> 0:06:11.520 Going to lead them in the wrong direction. 0:06:12.040 --> 0:06:14.520 At the same time, though you've seen some of these 0:06:14.600 --> 0:06:19.160 names like Meta, where we've chosen to deploy more cash 0:06:19.240 --> 0:06:22.960 because you see where they're trading, and from a relative 0:06:23.040 --> 0:06:26.320 valuation perspective at twenty two times, you have kind of 0:06:26.600 --> 0:06:29.559 a tiny risk there, and so you can play both 0:06:29.600 --> 0:06:31.560 sides of this leading into earnings. 0:06:32.200 --> 0:06:34.520 When you have moments of volatility like we've had. 0:06:34.760 --> 0:06:37.200 Mess is a great final thought based on the idea 0:06:37.240 --> 0:06:39.400 you separate them out from the rest of the megacaps, 0:06:39.400 --> 0:06:40.760 and it's something for us to look forward to see. 0:06:40.800 --> 0:06:43.960 Nicole Webb, Senior vice president and financial advisor at the 0:06:43.960 --> 0:06:47.040 Wealth Enhancement Group, Thank you now. Sticking with earnings so far, 0:06:47.279 --> 0:06:50.520 CEO Anthony Noto joined Bloomberg just moments ago. Here's what 0:06:50.520 --> 0:06:53.160 we had to say about the company's results. But also 0:06:53.520 --> 0:06:55.840 it's planned for diversification. 0:06:57.080 --> 0:06:58.320 Over the next five years. 0:06:58.400 --> 0:07:01.480 I would expect our growth to result in revenue that's 0:07:01.520 --> 0:07:06.800 about thirty percent financial services revenue, thirty percent tech platform revenue, 0:07:06.880 --> 0:07:08.200 and thirty percent lending. 0:07:08.720 --> 0:07:09.440 The business that's. 0:07:09.320 --> 0:07:11.920 Growing the fastest now and that's increasing as a percent 0:07:11.920 --> 0:07:15.400 of revenue the fastest is the financial services segment. We 0:07:15.480 --> 0:07:18.400 had a record revenue for the quarter at close to 0:07:18.440 --> 0:07:21.160 six hundred million dollars and twenty two percent growth, and 0:07:21.200 --> 0:07:23.680 it was really driven by that financial services segment that 0:07:23.720 --> 0:07:26.960 grew eighty percent year of year and is now starting 0:07:27.000 --> 0:07:28.920 to reach real scale at about one hundred and seventy 0:07:28.920 --> 0:07:32.560 million dollars of revenue. It's benefiting from fifty eight percent 0:07:32.600 --> 0:07:36.040 growth in AUM in our invest business. It's benefiting from 0:07:36.120 --> 0:07:39.480 deposit growth of eighty percent, and it's growing. It's benefiting 0:07:39.520 --> 0:07:42.520 from high interchange revenue growth as well, and of course 0:07:42.640 --> 0:07:46.080 forty percent product growth in that segment. So that'll be 0:07:46.160 --> 0:07:48.800 the horse that we continue to ride to drive the diversification. 0:07:49.280 --> 0:07:51.840 The second element would be, as you mentioned, the technology 0:07:51.880 --> 0:07:54.800 platform business, which we believe is a mid to high 0:07:54.880 --> 0:07:57.360 teens grower for the rest of this year, for the 0:07:57.400 --> 0:07:59.640 full year I mean, and then going to twenty percent 0:07:59.640 --> 0:08:02.760 growth shares. We have a great backlog of partners coming 0:08:02.800 --> 0:08:04.720 online hopefully in twenty twenty. 0:08:04.400 --> 0:08:07.960 Five, and theny One major question is around interest rates. 0:08:08.000 --> 0:08:10.120 If you do see the FED cut this year, then 0:08:10.160 --> 0:08:13.160 what does that four point six percent APY on your 0:08:13.200 --> 0:08:16.640 sofa money product look like moving forward? If it lowers, 0:08:16.720 --> 0:08:18.840 how competitive do you have to be to keep that 0:08:18.880 --> 0:08:19.720 money flowing in. 0:08:21.040 --> 0:08:24.160 Yeah, we think we'll still have a very competitive APY 0:08:24.240 --> 0:08:26.760 and a declining rate environment. Several of our businesses will 0:08:26.800 --> 0:08:30.360 benefit meetingful from a higher lower rate environment. The loans 0:08:30.360 --> 0:08:33.120 in our balance sheet will be worth more. Everything else equal. 0:08:33.960 --> 0:08:37.200 Home loans will actually see more financing, and that business 0:08:37.200 --> 0:08:41.640 should benefit for greater demand, greater marketing, efficiencies gre greater 0:08:41.800 --> 0:08:42.400 flow through. 0:08:43.080 --> 0:08:46.080 Also our student loan and financing business would benefit. That 0:08:46.120 --> 0:08:47.120 will all allow us. 0:08:47.040 --> 0:08:50.559 To continue to maintain a very high APY relative to competition. 0:08:51.080 --> 0:08:53.880 Many of our competitors that offer an APY that's even 0:08:53.880 --> 0:08:55.959 close stars We're at four point six percent if you 0:08:56.000 --> 0:08:59.520 do direct deposit, We're still superior to others. But those 0:08:59.559 --> 0:09:01.720 that are to us will struggle to keep the same 0:09:01.800 --> 0:09:05.439 rate in the same premium because they're not origination platforms. 0:09:05.559 --> 0:09:08.240 So we benefit from both of those businesses working well together. 0:09:10.600 --> 0:09:13.640 That was so FI CEO Anthony Noto, along with Bloomberg's 0:09:13.800 --> 0:09:17.400 Shnale bask Another top story we're looking at is PayPal, 0:09:17.600 --> 0:09:20.240 the company that suddenly got a sixty million dollar market 0:09:20.240 --> 0:09:24.960 gap shares notably higher, up almost eight percent, jumping the 0:09:25.000 --> 0:09:28.960 most in more than like twenty months adjusted EPs. You know, 0:09:29.240 --> 0:09:31.719 the guidance that will increase loads of single digits I 0:09:31.760 --> 0:09:35.239 think beats expectations. And then we discuss less on Bloomberg technology, 0:09:35.440 --> 0:09:37.360 but one that seems to be holding its own in 0:09:37.400 --> 0:09:38.280 the earnings context. 0:09:38.320 --> 0:09:39.719 We will revisit it all right. 0:09:39.720 --> 0:09:41.920 Coming up on the show, we will be joined by 0:09:41.960 --> 0:09:47.000 Truest Security Senior analyst William Stein on his experience using 0:09:47.080 --> 0:09:56.960 Tesla's full self driving technology. That's next, This is Bloomberg technology. 0:10:06.160 --> 0:10:09.240 Elon Musk has said during Tesla's last two earnings calls 0:10:09.320 --> 0:10:13.360 that investors won't understand the company unless they're using the 0:10:13.440 --> 0:10:18.520 driver assistance system marketed as full self driving. Well Truest 0:10:18.520 --> 0:10:22.199 Securities Managing director and senior analyst William Stein did just that, 0:10:22.600 --> 0:10:26.080 and he writes the version he tried is quote stunningly good, 0:10:26.440 --> 0:10:30.800 but does not solve autonomy. In fact, he even narrowly 0:10:30.920 --> 0:10:35.080 avoided a crash or accident. William Stein joins me now 0:10:35.080 --> 0:10:37.280 for more. And William, when I said on social media 0:10:37.320 --> 0:10:40.600 you were coming on the program, many many people pointed 0:10:40.640 --> 0:10:43.160 out that the version of a FSD you were using 0:10:43.280 --> 0:10:46.000 was twelve point three point six, not the latest twelve 0:10:46.000 --> 0:10:49.400 point five, which rolled out starting Friday last week and 0:10:49.559 --> 0:10:52.720 in a limited release through the weekend. So let's start here. 0:10:53.040 --> 0:10:55.520 Give me the basics of the tests you conducted, where 0:10:55.559 --> 0:10:59.000 you conducted it, whose Tesla you were using, and the 0:10:59.000 --> 0:11:00.000 parameters around it. 0:11:00.080 --> 0:11:03.960 Please, yeah, that's a very fair question. Thanks for having me. 0:11:04.040 --> 0:11:08.640 So both the test initially after the Q one earnings 0:11:08.640 --> 0:11:11.960 report and the Q two report were done you know, 0:11:12.080 --> 0:11:16.920 under very similar conditions. Sunny, dry, easy to see, easy 0:11:16.920 --> 0:11:21.960 to operate. This was a Tesla owned car. 0:11:22.120 --> 0:11:24.880 This was, you know, a I. 0:11:24.559 --> 0:11:27.400 Approached Tesla as if I were any other potential buyer. 0:11:28.160 --> 0:11:31.680 So I went to a Tesla showroom, signed up, and 0:11:32.760 --> 0:11:35.800 plugged in a relatively local address about seven miles away 0:11:36.320 --> 0:11:40.719 from from the showroom, someplace near where I live in 0:11:42.080 --> 0:11:45.720 suburban New York City. And that was the setup, and 0:11:46.920 --> 0:11:48.960 it mostly worked well in both cases. 0:11:49.200 --> 0:11:52.120 And William, just real quick, when did this test take place? 0:11:53.520 --> 0:11:53.720 Sure? 0:11:53.760 --> 0:11:56.480 So the first one that I tried was right after 0:11:56.720 --> 0:12:00.800 Q one, when Musk first issued this sort of directive 0:12:00.920 --> 0:12:05.800 to investors or potential investors that they must see this 0:12:06.000 --> 0:12:08.560 in order to determine whether they should invest in the company. 0:12:08.960 --> 0:12:11.720 So that was about a quarter ago. And the most 0:12:11.760 --> 0:12:14.760 recent one was done on Friday. Okay, And I'd like 0:12:14.800 --> 0:12:18.120 to acknowledge that we did not have version twelve dot five. 0:12:18.760 --> 0:12:22.160 I have asked the company for access to it hasn't 0:12:22.200 --> 0:12:24.439 been made available to me yet. I think they will, 0:12:24.760 --> 0:12:27.320 just it wasn't available when I went to the dealer 0:12:27.480 --> 0:12:29.680 or to the I should say, to the showroom, and 0:12:29.760 --> 0:12:32.400 I was using twelve to three dot six. 0:12:33.200 --> 0:12:36.600 That's correct, William did test the response specifically to the 0:12:36.640 --> 0:12:38.280 research report that you posted. 0:12:41.080 --> 0:12:44.800 I reached out to management in a proactive effort to 0:12:44.840 --> 0:12:48.520 not hide from them, because I think it's important when 0:12:49.040 --> 0:12:54.280 one is critical of technology or a solution or a 0:12:54.320 --> 0:12:56.719 financial aspect of a company. 0:12:56.360 --> 0:13:01.400 That did not be confused with an attack or especially 0:13:01.480 --> 0:13:02.520 something that's unfair. 0:13:03.080 --> 0:13:06.880 And there was a reply, and it wasn't really substantial 0:13:06.920 --> 0:13:11.559 other than you know, we understand your view and it's 0:13:11.600 --> 0:13:13.240 okay to have a difference of opinion. 0:13:13.440 --> 0:13:15.840 We're actually showing some style, William, just really quick. We're 0:13:15.880 --> 0:13:19.839 showing some file footage of FSD which comes from Tesla. 0:13:19.920 --> 0:13:22.040 It's not the trip that you took, and so I'm 0:13:22.080 --> 0:13:25.720 just stating that because you used a Tesla sort of 0:13:25.800 --> 0:13:28.880 showroom or dealership vehicle, you don't actually have access to 0:13:28.880 --> 0:13:30.280 the footage from your trip, do you. 0:13:31.920 --> 0:13:32.560 That's correct. 0:13:32.880 --> 0:13:35.200 I tried to take I actually had my son with 0:13:35.240 --> 0:13:39.840 me taking some videos, but unfortunately we didn't capture the 0:13:39.840 --> 0:13:45.360 most interesting and most exciting, okay parts of the trip 0:13:45.679 --> 0:13:47.400 or when I avoided in your ground. 0:13:47.480 --> 0:13:49.760 One of the things you tested was the ability to 0:13:49.880 --> 0:13:53.160 look away from the wheel right, and so I have 0:13:53.280 --> 0:13:55.400 twelve point five on my own Tesla at home, and 0:13:55.480 --> 0:13:58.520 I put on X for example my experiences with it. 0:13:58.600 --> 0:14:00.360 But it doesn't require me to have my hands on 0:14:00.400 --> 0:14:02.840 the wheel. It does require me to stay focused. The 0:14:02.880 --> 0:14:06.640 camera in the cabin judges my ability to be attentive. 0:14:07.040 --> 0:14:10.000 You tested by turning your head away for twenty to 0:14:10.080 --> 0:14:14.680 forty seconds. My question around that is whether NITSA has 0:14:14.720 --> 0:14:16.959 reached out to you, because that's one area that they've 0:14:17.000 --> 0:14:17.439 looked at. 0:14:19.840 --> 0:14:23.080 NITSA has not reached out to me. I was very 0:14:23.120 --> 0:14:27.960 surprised that the car allowed me to be not just distracted. 0:14:28.000 --> 0:14:31.120 I mean my head was completely turned away. I was looking, 0:14:31.280 --> 0:14:34.080 you know, in the back seat. And you know, luckily 0:14:34.120 --> 0:14:35.760 I was able to do this because I brought my 0:14:35.800 --> 0:14:38.040 son with me and I said, hey, you know, tell 0:14:38.080 --> 0:14:40.960 me if i'm if there's anything dangerous about to happen. 0:14:41.000 --> 0:14:46.480 We were on a relatively you know, underpopulated area and 0:14:46.560 --> 0:14:49.400 on the highway, so it was fairly predictable, and I 0:14:49.440 --> 0:14:52.920 trusted him to give me enough warning. The car allowed 0:14:52.960 --> 0:14:54.320 me to do is for something on the order of 0:14:54.400 --> 0:14:56.080 thirty seconds, which. 0:14:56.080 --> 0:14:58.320 Sixty miles an hour. It's half a mile. 0:14:58.360 --> 0:14:59.720 I mean, you could do a lot of damage in 0:14:59.760 --> 0:15:01.720 that that was sort of stunning. 0:15:01.760 --> 0:15:05.000 When I got back to the showroom. 0:15:04.400 --> 0:15:09.320 The service associate told me, oh, that's demo mode, and 0:15:09.360 --> 0:15:15.520 that's to make the experience more useful and perhaps easy 0:15:16.040 --> 0:15:19.440 for an inexperienced user of this technology. 0:15:20.280 --> 0:15:22.080 For me, it was a little frightening, right. It allowed 0:15:22.120 --> 0:15:23.960 me to distract William. 0:15:24.400 --> 0:15:26.600 There are many on social media who are sort of 0:15:26.600 --> 0:15:28.880 bemoaning that you didn't use twelve point five point one. 0:15:29.080 --> 0:15:31.920 There are many that acknowledge twelve point five also has 0:15:32.600 --> 0:15:36.200 yielded some quite worrying scenarios for those that have tested it. 0:15:36.520 --> 0:15:38.440 I want to get to the big picture, which is 0:15:38.480 --> 0:15:41.000 that Mosk said on both first quarter and second quarter, 0:15:41.000 --> 0:15:43.880 and it is cool to judge whether Tesla can in 0:15:43.880 --> 0:15:45.200 the future soul for autonomy. 0:15:45.440 --> 0:15:47.360 Go out and use FSD for yourself. 0:15:47.520 --> 0:15:50.480 The conclusion that I read in your research note is 0:15:50.560 --> 0:15:53.320 you don't see the jump right from a consumer that's 0:15:53.400 --> 0:15:56.080 using FSD and there will be more iterations of it 0:15:56.160 --> 0:15:59.320 in their car to a world where Tesla operates a 0:15:59.320 --> 0:16:00.880 fleet of robot taxes itself. 0:16:00.920 --> 0:16:01.760 Do I have that right? 0:16:03.480 --> 0:16:07.880 I think it's a very challenging thing to know with certainty. 0:16:08.000 --> 0:16:12.800 Right there are certainly improvements from version to version. As 0:16:12.840 --> 0:16:16.640 it stands in version twelve three six, this is totally 0:16:16.680 --> 0:16:20.160 inadequate to solve autonomy, if there is such a thing 0:16:20.200 --> 0:16:24.200 as solving it. Ifull autonomy is not there with twelve 0:16:24.200 --> 0:16:26.600 three six, do I anticipate it could be there with 0:16:26.680 --> 0:16:29.120 twelve five to one or some later version. 0:16:29.120 --> 0:16:30.720 I would say that's a maybe. 0:16:31.680 --> 0:16:34.720 I think for me, the big question is the near 0:16:34.840 --> 0:16:36.200 accident that I experienced. 0:16:36.360 --> 0:16:37.640 What was the failure mode? 0:16:37.680 --> 0:16:40.600 I think that's William, may I jump in here. Please 0:16:40.960 --> 0:16:43.480 let's go through the specifics of that. You were approaching 0:16:43.560 --> 0:16:47.080 intersection at speed, there was a vehicle in front of 0:16:47.120 --> 0:16:49.920 you making a right hand turn, and you write in 0:16:50.000 --> 0:16:53.040 the note it didn't complete that turn. So just explain 0:16:53.120 --> 0:16:56.359 literally what happened and how you or your son reacted. 0:16:57.560 --> 0:17:01.520 Yeah, so it's slightly different from how you'd described. It 0:17:01.560 --> 0:17:06.440 was in a very congested downtown street and a suburb. 0:17:07.119 --> 0:17:11.119 We were lined up stopped at a light light turned green. 0:17:11.160 --> 0:17:13.639 I think I was second in line. The car in 0:17:13.640 --> 0:17:17.439 front of me progressed making a right turn, but it 0:17:17.480 --> 0:17:20.120 didn't quite complete it. So I was the second car 0:17:20.480 --> 0:17:22.320 in the line, and as the car in front of 0:17:22.359 --> 0:17:26.119 me moved off to the right. The tesla just it 0:17:26.480 --> 0:17:30.480 reacted as though it was all clear and just started accelerating, 0:17:31.160 --> 0:17:34.399 and so the failure mode would have been, you know, 0:17:34.400 --> 0:17:36.840 we would have hit the back right corner of the 0:17:36.880 --> 0:17:42.280 car in front of us, and I had to you know, idea, William, we're. 0:17:42.080 --> 0:17:42.520 Out of time. 0:17:42.560 --> 0:17:45.000 William Stein a Trice Securities, I appreciate you coming on 0:17:45.040 --> 0:17:45.400 the show. 0:17:46.920 --> 0:17:47.760 He shares a. 0:17:47.760 --> 0:17:50.880 Crowd Strike down around nine percent right now after reports 0:17:50.920 --> 0:17:54.800 that Delta hired a prominent attorney following that technology outage 0:17:54.880 --> 0:17:57.520 that led to carrier to cancel thousands of flights. Those 0:17:57.560 --> 0:18:01.560 reports noting that the airline may seek compensation from both 0:18:01.600 --> 0:18:05.320 CrowdStrike and Microsoft. Another catalyst, ever Core, added the company 0:18:05.520 --> 0:18:08.640 to its tactical underperform list, the firm cutting the price 0:18:08.720 --> 0:18:11.160 target from three hundred and fifty dollars to three twenty 0:18:11.200 --> 0:18:14.080 five while maintaining its outperform rating. 0:18:14.160 --> 0:18:16.080 Let's bring in Shlomakram, a CATO. 0:18:15.840 --> 0:18:19.560 Network CEO, a leader of secure access service EDGE in 0:18:19.600 --> 0:18:22.240 the field of IT security, and my goodness, the last 0:18:22.240 --> 0:18:24.960 ten days with somebody of your experience and reputation in 0:18:25.000 --> 0:18:26.840 the industry must have been interesting. 0:18:27.240 --> 0:18:29.440 What happened well. 0:18:29.240 --> 0:18:34.040 A mistake happened, and mistakes will happen, But what's really 0:18:34.080 --> 0:18:41.480 important was that that mistake caused tremendous a disruption. And 0:18:41.640 --> 0:18:44.880 I think what's really important is what is the. 0:18:44.920 --> 0:18:46.639 Learning from that, Missie? 0:18:46.680 --> 0:18:47.320 What is the learning? 0:18:47.520 --> 0:18:50.160 And the learning is that we live in a very 0:18:50.440 --> 0:18:55.520 vulnerable world where everything is digital. And imagine if this 0:18:55.720 --> 0:18:57.920 was not a mistake but an attack. 0:18:58.520 --> 0:19:00.680 I wrote about this, I call them right. 0:19:01.000 --> 0:19:03.639 Let me ask you this real quick though, that in 0:19:03.680 --> 0:19:07.280 the crowd strike example, Microsoft and crowdstrikes, what's about how 0:19:07.320 --> 0:19:10.520 only one percent of Windows PCs were impacted, but it's 0:19:10.560 --> 0:19:13.119 those PCs that were mission critical, right, think about the 0:19:13.119 --> 0:19:16.359 cost of securing them? Is that just part of doing 0:19:16.400 --> 0:19:19.120 business in this day and age. It's something like this happening. 0:19:19.359 --> 0:19:20.720 Well, mistakes will happen. 0:19:20.840 --> 0:19:25.720 You know, aws head an outage, GESPAN an outage, everybody 0:19:25.760 --> 0:19:30.920 has an outage. But you have to take the economics 0:19:30.960 --> 0:19:34.200 of that outage and learn from it. And the learning 0:19:34.359 --> 0:19:37.560 is that everything needs to be gradual. You can't deploy 0:19:38.160 --> 0:19:42.199 anything to all the computers in the world at the 0:19:42.200 --> 0:19:44.800 same time. You need to be very gradual in doing that. 0:19:44.800 --> 0:19:49.560 That's a cloud service learning. And the second learning is 0:19:49.600 --> 0:19:54.400 that we really need to make security pervasive because the 0:19:54.440 --> 0:19:56.360 next time it's not going to be a mistake, it's 0:19:56.359 --> 0:19:57.240 going to be an attack. 0:19:58.760 --> 0:19:59.680 And correct me if I'm wrong. 0:19:59.840 --> 0:20:02.840 You built CATO because you basically looked at the big 0:20:02.840 --> 0:20:05.200 guys out there, the names you and I have talked 0:20:05.240 --> 0:20:06.760 about the fresh for, and you thought I can do 0:20:06.800 --> 0:20:10.520 this better. Indifferently, your phone must have run a few times. 0:20:11.119 --> 0:20:13.400 Well, I want to correct it. 0:20:13.960 --> 0:20:16.760 I thought I can do it in a way that 0:20:16.920 --> 0:20:23.960 simplifies security and AWS and digital transform it security and 0:20:24.080 --> 0:20:30.959 make it more affordable and accessible to all types of organization, 0:20:31.240 --> 0:20:36.160 which means that security is pervasive in cases of such 0:20:36.280 --> 0:20:37.600 mistakes and thet texts. 0:20:37.840 --> 0:20:41.879 You are very experienced, well known, and have invested a 0:20:41.880 --> 0:20:45.359 lot in this sector. How do you assess how CrowdStrike 0:20:45.440 --> 0:20:47.680 handled the fallout and responded. 0:20:48.080 --> 0:20:53.119 I think they, George and his team responded really well 0:20:54.040 --> 0:20:58.280 to this mistake, and I really commend them for. 0:20:58.240 --> 0:21:01.439 That philosophically and very quickly. To we change how we 0:21:01.480 --> 0:21:05.040 approach security now at the corporate or enterprise layer. 0:21:05.240 --> 0:21:08.840 I think we need to operationalize security. I need we 0:21:08.920 --> 0:21:13.160 need to make security available to any types of enterprise. 0:21:13.520 --> 0:21:17.359 We need to digitively transform security and make it simple. 0:21:18.560 --> 0:21:22.320 Schlimo Kramer, co founder and Ceoka Too Networks, really appreciate you. 0:21:22.400 --> 0:21:23.240 Thank you very much. 0:21:23.200 --> 0:21:25.439 Joining me here in New York City, but also drawing 0:21:25.440 --> 0:21:36.040 on your your wealth of experience in this domain. Welcome 0:21:36.040 --> 0:21:38.760 back to Bloomberg Technology, Ed Ludlow in New York City, 0:21:38.760 --> 0:21:41.240 And overnight there was some news, so to speak about 0:21:41.240 --> 0:21:45.320 two names that are a business relationship to names that 0:21:45.359 --> 0:21:48.200 are well known in this industry, in Nvidia CEO Jensen 0:21:48.280 --> 0:21:50.080 Huang and Meta CEO Mark Zuckerberg. 0:21:50.119 --> 0:21:51.840 Just real quick mes as flat as a pancake. 0:21:52.080 --> 0:21:54.639 It is in Nvidia that's been the main mover in 0:21:54.680 --> 0:21:57.560 the last thirty minutes or so. Not entirely clear what 0:21:57.600 --> 0:22:01.000 the catalyst is either way. Last night they both sat 0:22:01.040 --> 0:22:04.320