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Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of

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Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.

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

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Speaker 2: A Live from New York.

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Speaker 3: I'm Caroline Hyde and I'm Jackie Devalis in Washington. This

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Speaker 3: is Bloomberg Technology coming up.

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Speaker 4: The FTC is charging ahead with the Biden antitrust probe

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Speaker 4: of Microsoft. Will discuss what this means for Trump's new

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Speaker 4: FTC chair and his scrutiny of tech giants. Plus Intel

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Speaker 4: shares jumping following the news of a new CEO tasking

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Speaker 4: Lipbutan with restoring the company's fortunes after a slump in

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Speaker 4: earnings and market share, and a conversation with podcaster turned

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Speaker 4: investor Harry stebbings On from twenty VC on how one

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Speaker 4: hundred and twenty tech founders are joining his project to

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Speaker 4: boost European startups. But first to check in on these markets,

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Speaker 4: and we were raised yesterday's gains then as that one

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Speaker 4: hundred currently off by about a percentage point after yesterday,

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Speaker 4: we've got a bit of a reprieve and a push

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Speaker 4: higher of more than a percentage point overall, we're once

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Speaker 4: again filled with anxiety about US growth and about basically

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Speaker 4: still selling some of your key winners, largely within the

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Speaker 4: Magnificent seven. Go into some of the individual movers. Look

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Speaker 4: the earnings flow still not living up to expectations. I'm

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Speaker 4: looking at Adobe down crushed another eleven percent. This is

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Speaker 4: that their fiscal first quarter delivered ten percent growth in

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Speaker 4: revenue and lived up to expectations. But the current quarter

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Speaker 4: that we're operating in, the guidance not good enough. The

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Speaker 4: full year guidance remaining the same analysts wanted more.

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Speaker 2: Many cut their price targets.

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Speaker 4: Intel, though Sauls on the back of a new CEO,

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Speaker 4: lip Boutwan, returns he was on the board before, and

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Speaker 4: of course he did that turn around at Cadence. Will

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Speaker 4: dig into that in a moment. But Microsoft just for

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Speaker 4: about two ten percent, but is contributing to the points

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Speaker 4: decline on the nasat one hundred. But what does it

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Speaker 4: mean that the FTC is looking into that anti competition

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Speaker 4: analysis Microsoft? Bloomberg reporter Josh Cisco is with us. You

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Speaker 4: look at Microsoft from an FTC and anti competitive concern

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Speaker 4: area here, Josh, what is it that the FTC is

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Speaker 4: doing because we all thought a new Trump administration would

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Speaker 4: mean maybe less struttinly on tech giants. It doesn't seem

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Speaker 4: to be the case.

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Speaker 5: Well, I mean from the beginning, since before Trump took office,

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Speaker 5: both himself and his allies have made it pretty clear

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Speaker 5: that tech is going to be a key focus of

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Speaker 5: their enforcement and regulatory efforts. It's we're still a little

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Speaker 5: sort of uncertain about how exactly that will play out,

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Speaker 5: but this is the fact that they are picking up

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Speaker 5: this investigation and carrying it forward from the end of

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Speaker 5: the Biden administration is a major sign that they're going

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Speaker 5: to keep keep an aggressive stance against the tech sector.

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Speaker 3: Remind us what other cases this FTC commissioner is inheriting

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Speaker 3: from the Biden administration, because this could potentially offer clues

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Speaker 3: as to how those might result in as well.

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Speaker 5: Yeah, so he's got a bunch of stuff both on

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Speaker 5: the competition anti trust and sort of the consumer protection

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Speaker 5: side as well that the agency does both enforcement in

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Speaker 5: both areas.

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Speaker 6: They're going to trial.

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Speaker 5: Next month against Meta in a case that was first

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Speaker 5: filed actually in the initial Trump administration in December twenty

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Speaker 5: twenty to break up META, and that's finally going to

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Speaker 5: trial in April that was sort of filed at the

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Speaker 5: end of Trump's first term, and then FTC chair under Biden,

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Speaker 5: Lena Khan, she carried that forward. They also have a

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Speaker 5: lawsuit against Amazon. They could potentially lead to major divestitures

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Speaker 5: of Amazon's business. That's not going to trial for about

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Speaker 5: a year and a half. There's another loss of your

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Speaker 5: challenging Amazon's prime subscription business and how how the FTC

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Speaker 5: says it doesn't allow consumers to cancel easily.

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Speaker 6: Those are just a few of the big ones.

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Speaker 4: Yeah, and interesting that resources is an issue, is why

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Speaker 4: they delay the Amazon investigation, Josh, that you've been reporting on.

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Speaker 4: But the context here is one where also the DOJ

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Speaker 4: seems to still be going after that Google investigation and

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Speaker 4: some of the really pretty tough remedies that they're eyeing

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Speaker 4: to ensure that Google doesn't seem in some way a

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Speaker 4: limitation on competition. From the context of overall this administration,

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Speaker 4: it looks as though big tech is not getting off

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Speaker 4: the hook here, particularly when it comes to AI.

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Speaker 6: Yeah, I think that's true.

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Speaker 5: I mean some of the regulatory stuff around AI safety

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Speaker 5: and other guardrails that's a little bit sort of up

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Speaker 5: in the air, but I think they've made it clear

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Speaker 5: so far that they want to see more than two

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Speaker 5: or three companies sort of dominate the technology, from Nvidia

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Speaker 5: and chips to Microsoft and open Ai and sort of

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Speaker 5: more end user applications. It is, I think, at least

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Speaker 5: for now, going to be a major focus.

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Speaker 3: That's Bloomberg's Josh Cisco, thanks so much for joining us

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Speaker 3: for more on Microsoft and the broader tech market. Rischi Jaluria,

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Speaker 3: RBC Capital Market Software Equity Research Managing Director joins us. Now, RACI,

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Speaker 3: this isn't the first time that Microsoft is dealing with

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Speaker 3: a more strict FTC. Is this latest development sparking you

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Speaker 3: to kind of change the risk calculus that you were

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Speaker 3: embedding in your modeling for the coming year or are

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Speaker 3: you mostly brushing it off?

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Speaker 7: Yeah, thanks so much for having me. Look, I don't

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Speaker 7: want to say I'm brushing it off, but I do

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Speaker 7: feel like the potential impacts we've been prepared for this.

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Speaker 2: This is something that has been.

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Speaker 7: Talked about for a while. And remember I mean Microsoft

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Speaker 7: obviously historically under Bill Gates and later Steve Vahmer had

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Speaker 7: gotten themselves on a little bit of hot water when

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Speaker 7: it came into antitrust, but under Satian Adela, it's definitely

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Speaker 7: been a kinder, gentler Microsoft that has very much embraced interoperability,

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Speaker 7: embraced coopetition, and I think we see that playing out here.

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Speaker 7: You know, they have they obviously were very early to

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Speaker 7: invest in open ai, and they've really gone all in

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Speaker 7: on gen Ai become an AI first company. But you

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Speaker 7: actually notice over the past several years Micro or really

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Speaker 7: sorry pass up of quarters. Microsoft has been diversifying, right,

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Speaker 7: They've been building relationships with other vendors. At the same time,

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Speaker 7: open Ai themselves has been diversifying where they have their

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Speaker 7: own relationship with OCI and including with Stargate. They have

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Speaker 7: their own relationship with Core. We've per the reports out there,

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Speaker 7: and so really feels like Microsoft is doing the right

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Speaker 7: things to show that they're not abusing their position, you know,

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Speaker 7: in terms of the relationship with open ai, and I

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Speaker 7: think it becomes tougher to make an antitrust case against

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Speaker 7: Microsoft with the openI relationship when there is that level

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Speaker 7: of interoperability and the other competitors have these sort of

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Speaker 7: similar relationships. You think about Amazon with Anthropic, you think

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Speaker 7: about Oracle with Coher, even Google buying Deep mind a

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Speaker 7: long time ago, and that's a foundation for their AI efforts.

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Speaker 7: So I think it's going to be a tough argument

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Speaker 7: to make against Microsoft on the anti trust given all

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Speaker 7: of these moves.

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Speaker 4: Rashid, It is interesting, though, when you think back to

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Speaker 4: the inauguration of the current president, how many technology leaders, CEOs,

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Speaker 4: founders were there and many felt that we were coming

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Speaker 4: into a different type of feel for business. But will

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Speaker 4: that be the case, or any of these companies ever

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Speaker 4: going to be able to do decent M and A again,

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Speaker 4: or any of these companies going to be able to

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Speaker 4: dislodge the overall time investment that they have to make

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Speaker 4: in proving they're not anti competitive.

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Speaker 7: Yeah, Look, I think we're probably going to be in

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Speaker 7: a better environment for M and A. I think it'll

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Speaker 7: be hard to get away with these sort of acquisitions

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Speaker 7: that we saw maybe a decade ago or so of

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Speaker 7: you know, Facebook buying Instagram and then WhatsApp and you know,

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Speaker 7: Microsoft making some of these big blockbuster acquisitions.

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Speaker 2: But I still think we're.

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Speaker 7: Going to be in a more favorable environment for M

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Speaker 7: and A. And I think you know, there's going to

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Speaker 7: be scrutiny on there to prove that there's power to

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Speaker 7: prove that, you know, to maybe try to keep the

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Speaker 7: big tech companies in check and in line. But I

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Speaker 7: still think that the idea of splitting up companies divesting assets,

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Speaker 7: that's going to be more unlikely under the new administration.

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Speaker 7: To me, this is kind of just a continued show

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Speaker 7: of wanting to keep them again in line.

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Speaker 3: Appreciate how do we reconcile the fact that President Trump

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Speaker 3: has really almost anointed certain tech companies to be the

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Speaker 3: shepherds of AI competitive need here in the US. You

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Speaker 3: have Oracle Open AI as part of the Stargate deal.

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Speaker 3: Could that shield the companies that have stakes in those

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Speaker 3: particular companies a little bit more from you know, some

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Speaker 3: of the FTC scrutiny that we're seeing, or will we

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Speaker 3: see kind of this broader scrutiny across tech overall?

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Speaker 7: I think we're going to see broader scrutiny across tech,

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Speaker 7: you know, as opposed to at least over the past,

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Speaker 7: or at least relative to the.

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Speaker 2: First Trump administration.

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Speaker 7: But I think it'll be equivalent to what we saw

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Speaker 7: during the Biden administration and maybe taking that one step forward,

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Speaker 7: I do think very much there is a relationship angle

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Speaker 7: to all of this.

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Speaker 8: So I think your instinct.

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Speaker 7: And the question is accurate, right, that that companies that

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Speaker 7: have maybe ties to the administration, you know in somewhere,

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Speaker 7: or at least work constructively with them, are going to.

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Speaker 8: Be a little bit more protected.

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Speaker 7: And so I think it's in a lot of these companies'

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Speaker 7: interests at least have a good working relationship with pieces

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Speaker 7: of them. But remember the FTC is its own independent entity,

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Speaker 7: right and they you know, even if the chair is

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Speaker 7: appointed by the Trump administration, the way they act should

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Speaker 7: be fully independent.

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Speaker 1: You know.

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Speaker 7: Again, I think that the case comes down, especially for Microsoft,

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Speaker 7: to prove that there's some sort of competitive harm, to

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Speaker 7: prove that they are abusing their position, that there are

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Speaker 7: anti trust concerns. And the more work we do on that,

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Speaker 7: the more we see the moves that both Microsoft and

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Speaker 7: open ai are making independent of each other, the diversifying,

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Speaker 7: the embracing of interoperability, the harder I think it is

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Speaker 7: to make it case for anti trust here.

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Speaker 4: So Rishi, we then returned just more broadly to fundamentals

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Speaker 4: for the software companies that you cover at the moment,

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Speaker 4: Microsoft being one of them, but you'll cover a whole

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Speaker 4: host I think of Box, I think of Salesforce, I

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Speaker 4: think of Oracle. Software hasn't been as punished as hardware,

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Speaker 4: but we are reevaluating our previous winners, Rishi, And at

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Speaker 4: this moment, do you think that we're hitting a bottom

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Speaker 4: after the setoff of this week.

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Speaker 8: Yeah.

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Speaker 7: Look, I think this big sale off that we've had

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Speaker 7: over this week and really in software over the past month.

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Speaker 7: You're right, hasn't been punished as much as the hardware names,

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Speaker 7: but there's been a lot of names that I cover

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Speaker 7: that our high quality business is down thirty percent over

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Speaker 7: the past month on really no fundamental news. In our mind,

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Speaker 7: it is creating some really great buying opportunities, you know.

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Speaker 7: I think, Yeah, some of the big guys like Salesforce

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Speaker 7: and into It, I think are our interesting year. Even

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Speaker 7: going a little bit more down the cap spectrum. I

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Speaker 7: think HubSpot, which is actually a competitor to Salesforce, super

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Speaker 7: attractive name, down thirty percent.

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Speaker 2: It's one of our favorite names here.

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Speaker 7: Mango dB, which I look at as the next gen

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Speaker 7: Oracle in the database space, really compelling, you know, with

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Speaker 7: this thirty five percent draw down that we've seen over

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Speaker 7: the past month. So I do think it is creating

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Speaker 7: some buying opportunities because remember software, you know, let's see

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Speaker 7: what happens with the broader macro environment of the economy.

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Speaker 7: But software is very much a tariff proof sector, and

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Speaker 7: I think that's an important point to keep in mind

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Speaker 7: as you think about all the rhetoric around tariffs and

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Speaker 7: trade wars.

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Speaker 3: That's Rishi Juluria of RBC Capital Markets, thank you so

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Speaker 3: much for joining us. Still coming up, Open Ai shares

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Speaker 3: its suggestions for AI policy with the Trump administration. We'll

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Speaker 3: have all those details when we come back, Caroline.

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Speaker 4: Meanwhile, we've got to keep an eye on what's happening

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Speaker 4: with Intel while the rest of the market fools. Once again,

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Speaker 4: Intel outperformance by fifteen percent. Why le Boutan returns to

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Speaker 4: the company was on the board until August twenty twenty four.

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Speaker 4: Of course, he did the turnaround for Cadence, and now

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Speaker 4: his task to turn around Intel to improve its market capitalization.

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Speaker 2: This is blue meg technology.

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Speaker 4: Opening Eye has responded to a Trump administration request to

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Speaker 4: share ways to boost US competitiveness in the global artificial

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Speaker 4: intelligence race to tell us what they came out with

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Speaker 4: and begs Seth Egerman finely enough.

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Speaker 2: Less regulation seems to be the vibes.

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Speaker 9: It's shocking. It's a real wish list of a deregulatory

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Speaker 9: and heavy investment vibe here. Basically, Opening Eye is saying

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Speaker 9: we want laxer rules on copyright, we want more infrastructure investment.

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Speaker 9: And perhaps the most surprising thing is they're asking for

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Speaker 9: a little bit more protection and relief from the patchwork

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Speaker 9: of hundreds of state AI bills out there, saying the government,

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Speaker 9: you're kind of weigh in here and say, if we've

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Speaker 9: worked with you in providing access to our models to review,

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Speaker 9: then give us a little bit of leniency on the

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Speaker 9: many AI bills out there in the country.

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Speaker 3: Seth talk to us about what that patchwork currently looks like,

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Speaker 3: because a lot of these are still underway, and it's

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Speaker 3: interesting that they use the word preemption because it hasn't

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Speaker 3: exactly happened yet, but it kind of alludes to the

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Speaker 3: fact that they want that shield. How many bills out

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Speaker 3: there are they afraid of?

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Speaker 9: You know, there's hundreds of believe the number was something

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Speaker 9: like seven hundred iggy currently in discussion right now. These

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Speaker 9: range from bills around you know, deep fakes and bias

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Speaker 9: and AI systems to something like the controversial legislation that

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Speaker 9: we saw moving through California last year that open I

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Speaker 9: was vehemently opposed to. That said we might have civil

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Speaker 9: liability here if you have, you know, critical harms from

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Speaker 9: your AI models.

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Speaker 8: It's clear OPENII is not so.

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Speaker 9: Happy with that, despite having previously said they're in favorite regulation.

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Speaker 9: They just want it to be from the federal government,

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Speaker 9: which has done nothing much to do.

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Speaker 4: The minute you said copyright, it made me think of

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Speaker 4: what's happening in Europe and the UK in particular.

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Speaker 2: We've already seen jd Vance been.

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Speaker 4: Put out to Europe to try and fight the good

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Speaker 4: fight and say go away with your regulations. But ultimately

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Speaker 4: the US is one case. How much do they want

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Speaker 4: the US government to do their bidding abroad as well?

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Speaker 9: Yeah, it does sound like open is basically saying we

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Speaker 9: want you to go out there and advocate for the

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Speaker 9: fair use regime that they have been begging on for

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Speaker 9: the last couple of years, saying that we have our

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Speaker 9: right to use training data that might be copyright it

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Speaker 9: because it's fair use. We're seeing that other markets outside

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Speaker 9: the US are much more restrictive on that front, and

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Speaker 9: it faces lawsuits in numerous countries and it could be

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Speaker 9: critical to how they developed this technology.

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Speaker 2: Seth.

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Speaker 3: Another thing that Opening Eye added to their wish list

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Speaker 3: is that they want to use government held data like

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Speaker 3: healthcare data to train their models.

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Speaker 2: How do we think that's going to go over It's.

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Speaker 9: Going to go swimmingly. I'm sure no, I mean, I

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Speaker 9: think again. The point is if copyright becomes too strict

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Speaker 9: and they have a harder time getting the robust amount

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Speaker 9: of data that they need to build new models, they're

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Speaker 9: hoping the government can step in and provide a wealth

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Speaker 9: or resource of other data. I'm sure not everyone will

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Speaker 9: be comfortable having their healthcare information be used to feed these.

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Speaker 3: Models, though, Bloomberg Seth Figureman, thank you so much for

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Speaker 3: joining us. Turning to shares of Adobe that are sinking

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Speaker 3: today after the company gave a disappointing outlook for revenue growth.

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Speaker 3: For more on that, an aer Agrana of Bloomberg Intelligence

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Speaker 3: joins us now to discuss INNEROG sales in the current

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Speaker 3: quarter are expected to be between five point seven to

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Speaker 3: seven billion to five point eight two analysts.

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Speaker 2: Were projecting five point eight.

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Speaker 3: It's really not that far off, So help us understand

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Speaker 3: what investors are worried about.

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Speaker 2: Here. Is it the execution or the competition.

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Speaker 10: Yeah, I've been surprised about the reaction also because you know,

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Speaker 10: if you look at it, they reaffirmed their guidance for

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Speaker 10: the full year and frankly speaking, in the current environment,

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Speaker 10: nobody knows how the economy shapes up. That's not bad

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Speaker 10: at all, you know. From our side. They did give

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Speaker 10: out a lot more details about their AI initiative.

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Speaker 6: The thing where the Adobe is It is.

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Speaker 10: Probably the most controversial stock in software right now. The

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Speaker 10: valuation it has been a last i would say year

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Speaker 10: and a half or so. I haven't seen that. I

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Speaker 10: don't even know going back, you know, fifteen twenty years,

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Speaker 10: it was always trading at a premium to some of

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Speaker 10: the marque names.

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Speaker 6: The big issue with Adobe.

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Speaker 10: Is people are worried about their core creative business and

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Speaker 10: what would the future of that business be. Because of

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Speaker 10: free tools, you know, we can develop videos or pictures

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Speaker 10: on the fly.

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Speaker 6: Then why would you need Adobe? Now?

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Speaker 10: I think that's way simplified risk. They have a very

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Speaker 10: very strong mote around their products. But again, it's going

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Speaker 10: to take a while before people get comfortable.

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Speaker 6: With this story.

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Speaker 4: I feel that was the story even in the hardware

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Speaker 4: names that we saw of last week. Marvel got crushed

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Speaker 4: even when ultimately I lived up to expectations. But if

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Speaker 4: your forecast is in any way off down you go

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Speaker 4: in this in market environment, an K. What else does

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Speaker 4: Adobe need to be doing in terms of also fighting

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Speaker 4: off the perception that it's really hard to get rid

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Speaker 4: of subscriptions and ultimately that they're not getting backed for

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Speaker 4: the bart for the customer.

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Speaker 10: Yeah, I think you know, frankly speaking, all they need

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Speaker 10: to do is steady execution over the next twelve to

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Speaker 10: twenty four months and put this risk to rest that

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Speaker 10: they will get disrupted because of AI. I think that

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Speaker 10: is the single most important thing for them. They keep

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Speaker 10: on giving more information about how AI is enhancing their business.

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Speaker 6: That's going to be there.

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Speaker 10: But one of the things I caught from you know,

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Speaker 10: the stock reaction today is that market still seems to

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Speaker 10: be in a notion of accelerating growth for the entire

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Speaker 10: software industry, which is actually not a good thing for

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Speaker 10: the earning season that's coming up, because given where we

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Speaker 10: are in the economic uncertainty, I don't think there's going

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Speaker 10: to be that much seat growth going forward, or at

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Speaker 10: least in the near term, which means a lot more

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Speaker 10: volatility for these software names going into next quarter or

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Speaker 10: next month.

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Speaker 4: I love that you're pointing us towards the next earning

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Speaker 4: season where we're still wrapping up. This one never ends.

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Speaker 4: Anama Granta of bloem Megan Intelligences, so good to have you.

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Speaker 4: Thank You's talk about potential IPOs and what this market

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Speaker 4: volatility means for them. Just think of Core Weave. We've

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Speaker 4: been talking about a lot initial public offering, one of

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Speaker 4: the most hotly anticipated stock launches this year.

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Speaker 2: Will it go ahead?

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Speaker 4: What does it mean for the investor based mark client

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Speaker 4: CEO zero Capital joins us now twenty five million dollars.

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Speaker 2: Worth of shares of core Weave.

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Speaker 4: You are a publicly traded bench fund basically, and you

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Speaker 4: disclosed holdings that you have and ultimately your vision for

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Speaker 4: these businesses core Weave.

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Speaker 2: Will it go public?

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Speaker 4: Do you think in this market?

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Speaker 8: Yeah?

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Speaker 11: So.

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Speaker 12: Sero Capital is a publicly traded fund that invests in

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Speaker 12: in venture backed companies. We invested in core Weave about

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Speaker 12: a year ago. We found that it's a pretty unique property.

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Speaker 12: As you've been reporting and everybody's been reporting, I've never

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Speaker 12: in the forty years i've been in the business seed

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Speaker 12: and a supply demand and balance in any sort of anything,

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Speaker 12: and the idea of the need for compute and the

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Speaker 12: supply of compute was so offset in core. We've sat

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Speaker 12: right in the place to take advantage of that, so

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Speaker 12: we made an investment. It is the largest investment we've

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Speaker 12: ever made at Cero Capital in the fourteen years that

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Speaker 12: we've been investing, and we're really excited about the IPO.

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Speaker 12: We think that obviously market volatility isn't great for the

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Speaker 12: IPO market. I'm sure you've all been speaking a lot

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Speaker 12: about out that, but I do think that their business

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Speaker 12: model is so strong, their growth is so strong that

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Speaker 12: the market's going to appreciate appreciate it, and I think

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Speaker 12: that we will have the opportunity to go public in

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Speaker 12: this market.

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Speaker 4: I mean, the market was a little anxious about the

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Speaker 4: fact that they're so dependent on a couple of key clients,

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Speaker 4: Microsoft being notably one of them.

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Speaker 2: How do they prove that diversification.

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Speaker 4: There aren't that many hyperscalers out there that need this

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Speaker 4: sort of compute, but they need to show that they

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Speaker 4: can serve more than just two key right.

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Speaker 12: So I think you start with the point that Microsoft

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Speaker 12: obviously is a risk factor in the fact that they're

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Speaker 12: such a large customer and they do service some of

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Speaker 12: the other larger technology type companies, but there aren't that

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Speaker 12: many that actually needed It's sort of like looking at

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Speaker 12: the health insurance industry. There's a handful of health insurers

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Speaker 12: that supply for everybody. In this case, Core Weave supplies

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Speaker 12: compute for the folks that need it, and as compute

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Speaker 12: becomes less expensive and more the be able to diversify

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Speaker 12: their customer base, which I'm sure they'll.

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Speaker 8: Be able to do.

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Speaker 3: Mark, how are you advising your portfolio companies, particularly those

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Speaker 3: that haven't gone public yet. Are there certain sectors that

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Speaker 3: should avoid the public markets and just stay private for now?

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Speaker 12: Well, I think one of the reasons we built this

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Speaker 12: company fourteen years ago is companies wanted to stay private longer,

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Speaker 12: and that has certainly proved out. When we first started,

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Speaker 12: so there was under one hundred companies that were worth

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Speaker 12: over a billion dollars, there was under twenty companies worth

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Speaker 12: over a billion dollars. Now there's hundreds of them that

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Speaker 12: are worth over a billion dollars, and being public is

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Speaker 12: something that's not for any everybody, and I think companies

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Speaker 12: that want to go public have to understand the merits

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Speaker 12: of going public. I think the advent of the secondary market,

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Speaker 12: as well as the tender market that is available now

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Speaker 12: for these larger companies allows these larger companies to stay

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Speaker 12: private longer and allow them make a determination when it's

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Speaker 12: appropriate for them to go public if they it all

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Speaker 12: need to go public.

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Speaker 4: Look, you've invested before in the key winners of Facebook, Twitter,

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Speaker 4: Snap Spotify, Lift, but you're also in open Ai. Would

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Speaker 4: you ever envisage that open Ai would do anything but

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Speaker 4: stay private for the time being. They can access deep

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Speaker 4: troves of capital, but they must be one of the

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Speaker 4: most sought after holdings for the retail community and indep

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Speaker 4: people who can't access private funds.

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Speaker 12: Sure you know open Ai, which is widely reported, is

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Speaker 12: in the process of going from a not for profit

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Speaker 12: to for profit.

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Speaker 4: Can you support that?

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Speaker 8: I think that's appropriate.

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Speaker 12: I think if they want to continue to aggregate capital

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Speaker 12: in the way that they need to do to continue

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Speaker 12: on their mission to build out what is a phenomenal company,

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Speaker 12: they're going to need a more normalized capital structure to

443
00:21:49,960 --> 00:21:51,639
Speaker 12: do that.

444
00:21:51,640 --> 00:21:55,040
Speaker 2: That's smart. Client, CEO of Cerro Capital, Thank you so much.

445
00:21:55,040 --> 00:22:02,879
Speaker 2: For joining us.

446
00:22:03,880 --> 00:22:05,160
Speaker 4: Welcome back to Blue meg Techology.

447
00:22:05,200 --> 00:22:08,240
Speaker 2: I'm Caroine Hide in New York and I'm Jackie Devalas

448
00:22:08,240 --> 00:22:10,199
Speaker 2: in Washington. Let's check in on these markets.

449
00:22:10,240 --> 00:22:13,960
Speaker 4: Once again, the trade wars, the anxiety, this time between

450
00:22:14,000 --> 00:22:16,919
Speaker 4: Europe and US, styling back up grue. Sentiment is pushed

451
00:22:16,920 --> 00:22:19,320
Speaker 4: back lower. After yesterday, We've got a reprieve with a

452
00:22:19,359 --> 00:22:21,720
Speaker 4: lower than expected CPI reading, But once again we're under

453
00:22:21,760 --> 00:22:23,400
Speaker 4: pressure on the NASAK one hundred off by one point

454
00:22:23,400 --> 00:22:26,720
Speaker 4: thirty percent, completely erasing yesterday's games. We move under the

455
00:22:26,720 --> 00:22:28,879
Speaker 4: hood though, of who is outperforming, because most of the

456
00:22:28,920 --> 00:22:31,920
Speaker 4: Magnificent Seven are on the downside, dragging lower on a

457
00:22:31,960 --> 00:22:35,240
Speaker 4: points perspective. But look at Intel to the rescue. It's

458
00:22:35,280 --> 00:22:37,600
Speaker 4: from a points contributor, one of the best performers on

459
00:22:37,600 --> 00:22:38,040
Speaker 4: the upside.

460
00:22:38,040 --> 00:22:39,240
Speaker 2: We're up fifteen percent.

461
00:22:39,320 --> 00:22:42,520
Speaker 4: And why because lip Broutan comes back not as a

462
00:22:42,520 --> 00:22:45,879
Speaker 4: board member but actually as CEO starting next week. Bluemeg's

463
00:22:45,880 --> 00:22:49,640
Speaker 4: Ian King has been following the trails and tribulations of Intel.

464
00:22:50,000 --> 00:22:52,960
Speaker 4: Is he the right man to steer this company back

465
00:22:52,960 --> 00:22:53,919
Speaker 4: to good fortune?

466
00:22:54,760 --> 00:22:57,880
Speaker 13: I mean, the reaction tells you that people are clearly

467
00:22:57,920 --> 00:23:00,159
Speaker 13: happy about that. Whether it's a case of them being

468
00:23:00,240 --> 00:23:03,240
Speaker 13: happy that Intel have just got somebody in that crucial

469
00:23:03,280 --> 00:23:05,800
Speaker 13: seat at a crucial time for the company, or whether

470
00:23:05,880 --> 00:23:10,840
Speaker 13: it's because they're enthusiastic about his capabilities and his fit

471
00:23:10,920 --> 00:23:13,399
Speaker 13: for the role. We'll see how that plays out of

472
00:23:13,440 --> 00:23:15,520
Speaker 13: the long term, but certainly today people are very happy

473
00:23:15,520 --> 00:23:15,879
Speaker 13: about that.

474
00:23:18,080 --> 00:23:21,159
Speaker 3: Ian talk to us about what this has looked like

475
00:23:21,200 --> 00:23:23,960
Speaker 3: in the past. Because this is the fourth permanent CEO

476
00:23:24,200 --> 00:23:27,920
Speaker 3: over the last seven years, Our investors.

477
00:23:27,520 --> 00:23:29,480
Speaker 2: Going to look for something more other than just a

478
00:23:29,520 --> 00:23:30,439
Speaker 2: new person on the.

479
00:23:30,480 --> 00:23:32,639
Speaker 3: Job because the company also has some support from the

480
00:23:32,640 --> 00:23:38,080
Speaker 3: Trump administration. But what other questions are still open about

481
00:23:38,119 --> 00:23:42,040
Speaker 3: whether they can actually execute on this to stay relevant.

482
00:23:42,359 --> 00:23:45,080
Speaker 13: Yeah, I mean that is the giant question here, and

483
00:23:45,080 --> 00:23:47,840
Speaker 13: we don't have an answer in terms of what direction

484
00:23:47,960 --> 00:23:48,840
Speaker 13: he's going to choose.

485
00:23:48,840 --> 00:23:49,600
Speaker 8: It's whether.

486
00:23:50,880 --> 00:23:53,560
Speaker 13: Bhutan has come in as a CEO who's going to

487
00:23:53,600 --> 00:23:56,520
Speaker 13: try to make him tell what it once was which

488
00:23:56,600 --> 00:24:00,000
Speaker 13: was dominant in this industry, or whether he's a caretaker

489
00:24:00,160 --> 00:24:03,239
Speaker 13: who's going to preside over it being broken up. We

490
00:24:03,280 --> 00:24:05,359
Speaker 13: didn't really get the answer to that and the things

491
00:24:05,400 --> 00:24:08,399
Speaker 13: that he put out there publicly yesterday, and that's going

492
00:24:08,480 --> 00:24:10,520
Speaker 13: to be something that people will be really focused on.

493
00:24:11,000 --> 00:24:14,000
Speaker 4: And the chip sacked money in When is this eight

494
00:24:14,040 --> 00:24:16,400
Speaker 4: and a half billion dollars potentially going to come its way?

495
00:24:17,080 --> 00:24:19,320
Speaker 4: What do you make of his interactions going forward with

496
00:24:19,640 --> 00:24:22,520
Speaker 4: the current administration do you think yeah?

497
00:24:22,520 --> 00:24:25,199
Speaker 13: I mean that is a wild card for anybody in

498
00:24:25,240 --> 00:24:28,919
Speaker 13: the CEO role in the semiconductor industry, whether it's trade,

499
00:24:28,960 --> 00:24:31,119
Speaker 13: whether it's the Chips Act or anything like that. But

500
00:24:31,560 --> 00:24:33,840
Speaker 13: all along the Chips Act has been a very structured

501
00:24:34,160 --> 00:24:36,800
Speaker 13: situation where you have to build these plants, you have

502
00:24:36,880 --> 00:24:39,879
Speaker 13: to equip them, you have to start production, otherwise you

503
00:24:39,920 --> 00:24:42,000
Speaker 13: don't get the money. You know, it's very much a

504
00:24:42,080 --> 00:24:46,560
Speaker 13: mild post kind of triggered events. So they'll have to

505
00:24:46,560 --> 00:24:47,680
Speaker 13: do what they said they were going to do or

506
00:24:47,680 --> 00:24:50,480
Speaker 13: they won't get the money anyway, regardless of whether President

507
00:24:50,480 --> 00:24:51,880
Speaker 13: Trump turns against the Act.

508
00:24:51,760 --> 00:24:55,480
Speaker 2: Or not, it's Bloomberg's Ian King. Thank you so much

509
00:24:55,520 --> 00:24:56,160
Speaker 2: for joining us.

510
00:24:56,880 --> 00:25:02,560
Speaker 3: Next, Janet we from RBC Brewin Dolphin, head of market Analysis. Thanks,

511
00:25:02,760 --> 00:25:05,400
Speaker 3: thank you so much for joining us. Let's talk keep

512
00:25:05,440 --> 00:25:09,199
Speaker 3: talking about the semiconductor space here. Intel is one big player,

513
00:25:09,200 --> 00:25:11,240
Speaker 3: but I want to understand how you're thinking about the

514
00:25:11,320 --> 00:25:15,040
Speaker 3: space coming off of a really busy week that got

515
00:25:15,160 --> 00:25:18,919
Speaker 3: rattled by tariffs and other announcements the trip and Science

516
00:25:19,000 --> 00:25:22,080
Speaker 3: Act as another How are you thinking about the space

517
00:25:22,119 --> 00:25:23,399
Speaker 3: and the catalyst going forward?

518
00:25:24,840 --> 00:25:26,160
Speaker 6: Hi, thanks for having me.

519
00:25:26,400 --> 00:25:30,040
Speaker 11: I think over the longer term, AI would remain a

520
00:25:30,119 --> 00:25:32,840
Speaker 11: very relevant theme and a very key driver for the

521
00:25:32,840 --> 00:25:36,680
Speaker 11: semiconductors industry and the whole ecosystem. So on that, we're

522
00:25:36,720 --> 00:25:40,119
Speaker 11: still very confident on the psycho outlook. There's still plenty

523
00:25:40,160 --> 00:25:43,960
Speaker 11: of support for that, but unfortunately, we're in a very

524
00:25:45,240 --> 00:25:50,240
Speaker 11: complex and st microeconomic landscape at the moment, where you know,

525
00:25:50,359 --> 00:25:53,800
Speaker 11: companies with the most complex supply chains are likely to

526
00:25:53,880 --> 00:25:57,760
Speaker 11: be at risk, and that is included the semiconductor sector.

527
00:25:57,840 --> 00:26:01,439
Speaker 11: So unfortunately, given the micro back job, these stars are

528
00:26:01,480 --> 00:26:04,399
Speaker 11: not doing well at the moment. But I think that

529
00:26:04,480 --> 00:26:07,680
Speaker 11: valuations have become more attractive for the sector as a whole,

530
00:26:07,960 --> 00:26:10,400
Speaker 11: and I do believe that if you pick the leaders

531
00:26:10,960 --> 00:26:15,200
Speaker 11: across the semiconductor ecosystem, you are likely to still do

532
00:26:15,320 --> 00:26:17,000
Speaker 11: pretty well for the longer term.

533
00:26:17,440 --> 00:26:18,320
Speaker 2: Is Intel a leader?

534
00:26:18,480 --> 00:26:21,560
Speaker 4: I know whether it's an individual name perspective, but would

535
00:26:21,600 --> 00:26:25,360
Speaker 4: you put that company alongside some of the winning formulas

536
00:26:25,359 --> 00:26:27,119
Speaker 4: that we see of late with the in videos at

537
00:26:27,119 --> 00:26:28,679
Speaker 4: the top of the list.

538
00:26:29,600 --> 00:26:32,600
Speaker 11: So for now, probably not. We have to await more

539
00:26:33,160 --> 00:26:35,800
Speaker 11: strategic direction from the new CEO. I think Intel Face

540
00:26:35,920 --> 00:26:39,040
Speaker 11: is a bunch of challenges regardless of who is in charge.

541
00:26:39,200 --> 00:26:43,160
Speaker 11: Basically on the design front is you know, it's lagging

542
00:26:43,440 --> 00:26:48,399
Speaker 11: our companients like Nvidia and am D, and you know,

543
00:26:48,480 --> 00:26:51,320
Speaker 11: as a foundry business is also you know, it's direction

544
00:26:51,520 --> 00:26:53,840
Speaker 11: is not clear and they really have to revive that

545
00:26:53,960 --> 00:26:58,359
Speaker 11: boundary business in order to secure its position in the sector.

546
00:26:58,480 --> 00:27:00,639
Speaker 11: So I guess we'll just have to wait and see.

547
00:27:00,920 --> 00:27:04,159
Speaker 11: Apparently the market is very enthusiastic about the new.

548
00:27:04,080 --> 00:27:06,439
Speaker 2: CEO, Jenna.

549
00:27:06,480 --> 00:27:09,040
Speaker 3: Let's talk about software for a moment, because we had

550
00:27:09,040 --> 00:27:11,640
Speaker 3: a guest earlier this morning kind of tell us that

551
00:27:11,760 --> 00:27:15,160
Speaker 3: these software names are a little bit more insulated from

552
00:27:15,200 --> 00:27:17,280
Speaker 3: a lot of the tariff woes that we're seeing other

553
00:27:17,400 --> 00:27:18,840
Speaker 3: names really get battered by.

554
00:27:19,240 --> 00:27:20,280
Speaker 2: Would you agree with that?

555
00:27:20,480 --> 00:27:22,640
Speaker 3: How much more of that protection do some of those

556
00:27:22,720 --> 00:27:23,200
Speaker 3: names get?

557
00:27:25,560 --> 00:27:27,280
Speaker 11: Yeah, I would tend to agree with that. I think

558
00:27:27,840 --> 00:27:30,600
Speaker 11: in terms of the supply chain impact, I think obviously

559
00:27:30,640 --> 00:27:34,320
Speaker 11: the hardware the industrial sector would be more badly heat

560
00:27:34,400 --> 00:27:39,679
Speaker 11: where the software it would be fundamentally less heat. So

561
00:27:40,640 --> 00:27:43,399
Speaker 11: I would agree on that point. But obviously, given the

562
00:27:43,800 --> 00:27:46,600
Speaker 11: various macro uncertainties that we have, ultimately a lot of

563
00:27:46,600 --> 00:27:50,200
Speaker 11: these software companies, if you look at the megacap tech

564
00:27:50,240 --> 00:27:54,720
Speaker 11: companies there, they're still heavily uh exposed to domestic US

565
00:27:54,760 --> 00:27:58,920
Speaker 11: economy in terms of say advertising, cloud revenue, et cetera.

566
00:27:59,040 --> 00:28:02,560
Speaker 11: Ultimately is still dependent on the business cycle. I mean

567
00:28:02,600 --> 00:28:05,880
Speaker 11: oarguably less cyclical, less sensitive, but it's still dependent.

568
00:28:05,920 --> 00:28:08,160
Speaker 8: And obviously the valuations have.

569
00:28:08,160 --> 00:28:10,800
Speaker 11: Come off because of the sentiment ed So I guess

570
00:28:10,960 --> 00:28:15,080
Speaker 11: in the term, I think it is best to stay

571
00:28:15,119 --> 00:28:19,840
Speaker 11: cautious because we still have potentially a range of uncertainty

572
00:28:19,840 --> 00:28:22,640
Speaker 11: coming from the reciprocal towerfront that is going to heat

573
00:28:22,680 --> 00:28:23,679
Speaker 11: the sentiment channel.

574
00:28:25,000 --> 00:28:27,960
Speaker 3: The reason I'm curious is because more recession fears have

575
00:28:28,040 --> 00:28:31,120
Speaker 3: started to come to the foe, and when we think

576
00:28:31,119 --> 00:28:34,120
Speaker 3: about the tech sector, you know, we don't really remember

577
00:28:34,200 --> 00:28:37,120
Speaker 3: the fact that all of these software names, many of them,

578
00:28:37,160 --> 00:28:40,360
Speaker 3: and thinking like the social media companies are sensitive to

579
00:28:40,400 --> 00:28:44,960
Speaker 3: that digital advertising, how much of that is vulnerable to.

580
00:28:44,960 --> 00:28:46,760
Speaker 2: The swings in the economy.

581
00:28:47,120 --> 00:28:50,360
Speaker 3: Could there be more vulnerability there going forward if these

582
00:28:50,400 --> 00:28:51,920
Speaker 3: recession fears do play out.

583
00:28:54,520 --> 00:28:57,040
Speaker 11: Yes, I think there's not only some risks because what

584
00:28:57,080 --> 00:28:59,360
Speaker 11: we are saying now is basically the heat by the

585
00:28:59,440 --> 00:29:03,120
Speaker 11: sentiment channel. We haven't really actually seen too much of

586
00:29:03,240 --> 00:29:07,080
Speaker 11: the hat to actual earnings and the real economy. I mean,

587
00:29:07,080 --> 00:29:11,719
Speaker 11: there is recession anxiety, but I wouldn't still put that

588
00:29:11,760 --> 00:29:16,400
Speaker 11: at a central case. But if that eventually did play out,

589
00:29:16,440 --> 00:29:18,840
Speaker 11: I think there could be more to go in terms

590
00:29:18,840 --> 00:29:22,160
Speaker 11: of the hit to the earnings outlook. So that would

591
00:29:22,240 --> 00:29:26,800
Speaker 11: be quite bad to these companies because advertising, I think

592
00:29:26,920 --> 00:29:29,560
Speaker 11: is very cyplical. They probably the first to be cut.

593
00:29:30,080 --> 00:29:33,400
Speaker 11: If a company wants to reduce the spending and if

594
00:29:33,440 --> 00:29:37,480
Speaker 11: consumer confidence is falling, then consumers are going to tighten

595
00:29:37,480 --> 00:29:39,640
Speaker 11: the belt and spend less. That that's all going to

596
00:29:39,760 --> 00:29:43,880
Speaker 11: hit all these companies eventually. But I think, as I said,

597
00:29:43,920 --> 00:29:48,720
Speaker 11: it's currently still the sentiment that is, you know, playing out.

598
00:29:48,760 --> 00:29:51,320
Speaker 11: There is not really real hits to the earnings yet.

599
00:29:51,320 --> 00:29:53,560
Speaker 11: We just have to wait and see.

600
00:29:54,720 --> 00:29:58,440
Speaker 3: And what about overseas because some of the woes here

601
00:29:58,920 --> 00:30:01,920
Speaker 3: in the United States might be a gain for let's

602
00:30:01,920 --> 00:30:04,440
Speaker 3: say Chinese stocks. It seems like every time a new

603
00:30:04,480 --> 00:30:08,240
Speaker 3: model comes out of China, it sends US tech stocks

604
00:30:08,280 --> 00:30:12,239
Speaker 3: really freaking out, especially those with exposure to AI. How

605
00:30:12,280 --> 00:30:14,760
Speaker 3: are you thinking about positioning outside of the US.

606
00:30:16,600 --> 00:30:19,240
Speaker 11: Yeah, I think there's certainly more enthusiasm or in Chinese

607
00:30:19,440 --> 00:30:23,760
Speaker 11: tech stocks. I think mainly it's because sentiment has been

608
00:30:23,760 --> 00:30:26,800
Speaker 11: way too depressed and basically a lot of obasease investors

609
00:30:26,800 --> 00:30:29,600
Speaker 11: have written of Chinese tech for a while, and there's

610
00:30:29,640 --> 00:30:33,240
Speaker 11: suddenly a bunch of good news, including some shift in

611
00:30:33,240 --> 00:30:36,640
Speaker 11: a tone from the politician, a bit more welcoming tone,

612
00:30:37,000 --> 00:30:40,160
Speaker 11: a bit more supportive to the private sector, and of

613
00:30:40,200 --> 00:30:45,280
Speaker 11: course the innovation in AI and bordling out of using

614
00:30:45,320 --> 00:30:48,080
Speaker 11: AI in various sectors in China. So I would say,

615
00:30:48,120 --> 00:30:50,640
Speaker 11: in a new trauma, I think is reasonable to feel

616
00:30:50,680 --> 00:30:53,680
Speaker 11: more optimistic. I think there could still be more influence

617
00:30:53,720 --> 00:30:56,000
Speaker 11: going into that sector. But I think we have to

618
00:30:56,040 --> 00:30:58,960
Speaker 11: be a bit more cautious because we understand Chinese stock

619
00:30:59,000 --> 00:31:01,640
Speaker 11: market is very volatile and you know, a lot of

620
00:31:01,680 --> 00:31:04,480
Speaker 11: retail participation. I don't think this time would change. I

621
00:31:04,520 --> 00:31:08,840
Speaker 11: think that's still a lot of volatility and profit takeing

622
00:31:08,880 --> 00:31:11,320
Speaker 11: activity if the index continues to go on from here.

623
00:31:11,400 --> 00:31:12,920
Speaker 11: So I think we've got to be a bit more

624
00:31:12,960 --> 00:31:13,760
Speaker 11: careful here.

625
00:31:15,160 --> 00:31:17,600
Speaker 3: Seems like forever ago that the market was freaking out

626
00:31:17,640 --> 00:31:20,000
Speaker 3: about deep seek and all of a sudden with some

627
00:31:20,160 --> 00:31:23,480
Speaker 3: earnings that have come out, CAB backs has been reaffirmed.

628
00:31:23,520 --> 00:31:26,880
Speaker 3: Investors seem assured that maybe we're a little bit past this.

629
00:31:27,120 --> 00:31:31,520
Speaker 3: Do you still see the deep seek fear showing up anywhere,

630
00:31:31,720 --> 00:31:36,000
Speaker 3: if that's something that's going to drive the market going forward.

631
00:31:38,440 --> 00:31:38,600
Speaker 6: Yeah.

632
00:31:38,640 --> 00:31:42,200
Speaker 11: The thing is that I think fundamentally we are of

633
00:31:42,320 --> 00:31:49,200
Speaker 11: the view that deep six appearance. It shows that these

634
00:31:49,200 --> 00:31:51,160
Speaker 11: models can be run in a more efficient way and

635
00:31:51,200 --> 00:31:54,240
Speaker 11: thereby lowing the cost of running it and training, and

636
00:31:54,320 --> 00:31:57,320
Speaker 11: thereby eventually it would e stimulate the demand if the

637
00:31:57,360 --> 00:31:59,760
Speaker 11: cost goes down, so more people would be using it.

638
00:31:59,800 --> 00:32:02,440
Speaker 11: So not only that's going to be beneficial for the

639
00:32:02,440 --> 00:32:05,560
Speaker 11: whole sector, but at the same time, the thing is

640
00:32:06,320 --> 00:32:09,320
Speaker 11: we don't know yet, and if you look at the

641
00:32:09,360 --> 00:32:12,800
Speaker 11: latest earnings results from say Nvidia, you won't be able

642
00:32:12,840 --> 00:32:16,640
Speaker 11: to see that impact yet. Actually it's more more distant

643
00:32:16,640 --> 00:32:19,560
Speaker 11: in the future whether the hyperscalers are going to reduce

644
00:32:19,600 --> 00:32:22,600
Speaker 11: their capital spending because of the more efficient models. So

645
00:32:23,200 --> 00:32:26,240
Speaker 11: there's a lot of questions that are yet to be answered.

646
00:32:26,520 --> 00:32:30,160
Speaker 11: But I think from our view, if you look back

647
00:32:30,160 --> 00:32:33,760
Speaker 11: at history of the semiconductors of our cost impact demand,

648
00:32:34,080 --> 00:32:39,040
Speaker 11: usually when costs are lowered, then eventually demand actually grows exponentially.

649
00:32:39,720 --> 00:32:41,720
Speaker 11: But of course you have to also consider that the

650
00:32:41,760 --> 00:32:44,560
Speaker 11: tie is going to be shared by potentially more players,

651
00:32:45,240 --> 00:32:48,920
Speaker 11: So I think just focusing on say one or two

652
00:32:49,240 --> 00:32:53,960
Speaker 11: particular leaders is potentially more risky. That's why our strategy

653
00:32:54,000 --> 00:32:57,280
Speaker 11: is always to get exposure to a whole range of

654
00:32:57,360 --> 00:33:02,840
Speaker 11: the stocks in the semiconductor ecosal stump, we don't have.

655
00:33:02,840 --> 00:33:07,280
Speaker 3: A crystal Baldoy Janet Janet Mooly from RBC brewin Dolphin,

656
00:33:07,360 --> 00:33:08,720
Speaker 3: thank you so much for joining us.

657
00:33:09,000 --> 00:33:24,720
Speaker 2: More coming up next. This is Bloomberg time now for

658
00:33:24,760 --> 00:33:25,240
Speaker 2: talking tech.

659
00:33:25,280 --> 00:33:27,560
Speaker 4: First up, SpaceX is the layed its mission to bring

660
00:33:27,840 --> 00:33:31,200
Speaker 4: back two struck stock or astronauts from the International Space

661
00:33:31,240 --> 00:33:33,560
Speaker 4: Station due to an issue with ground equipment, and the

662
00:33:33,560 --> 00:33:35,960
Speaker 4: mission would have launched a new crew to the ISS

663
00:33:36,120 --> 00:33:39,000
Speaker 4: brought back those two astronauts the maroon since last year.

664
00:33:39,120 --> 00:33:42,680
Speaker 4: Now the launch has been rescheduled to place no earlier

665
00:33:42,680 --> 00:33:45,320
Speaker 4: than tomorrow evening. Plus, Ali Baba has launched a new

666
00:33:45,400 --> 00:33:48,880
Speaker 4: version of its quad AI agent incorporating chat what deep

667
00:33:48,920 --> 00:33:52,000
Speaker 4: Thinking and tasket secution features in one app. Now What

668
00:33:52,200 --> 00:33:55,000
Speaker 4: utilizes Ali Baba's own reasoning models and is the latest

669
00:33:55,000 --> 00:33:57,600
Speaker 4: attempt by the company to keep pace with China riveals

670
00:33:57,960 --> 00:34:00,720
Speaker 4: and shares a Delivero. They're falling today as much as

671
00:34:00,760 --> 00:34:04,000
Speaker 4: ten percent in London trading. That says most since all

672
00:34:04,000 --> 00:34:06,120
Speaker 4: the way back in twenty twenty two. The food delivery

673
00:34:06,120 --> 00:34:09,040
Speaker 4: company gave an earnings forecast that disappointed investors and comes

674
00:34:09,160 --> 00:34:12,040
Speaker 4: just days after I announced it would exit the Hong

675
00:34:12,160 --> 00:34:12,880
Speaker 4: Kong market.

676
00:34:13,080 --> 00:34:18,120
Speaker 3: Jackie, the head of Ali Baba Group's original core business,

677
00:34:18,320 --> 00:34:21,160
Speaker 3: says the use of various AI applications are having a

678
00:34:21,239 --> 00:34:25,200
Speaker 3: profound impact on the company. Earlier this week, Alibaba dot

679
00:34:25,239 --> 00:34:29,319
Speaker 3: COM's president Quo Jong told Bloomberg exclusively its vendors are

680
00:34:29,320 --> 00:34:31,200
Speaker 3: having an easier time finding.

681
00:34:30,880 --> 00:34:32,320
Speaker 2: New markets for their goods.

682
00:34:32,520 --> 00:34:37,480
Speaker 14: Take a listen, take the buyer as example. So if

683
00:34:37,520 --> 00:34:41,640
Speaker 14: we think about the search volume for the information or

684
00:34:41,640 --> 00:34:45,480
Speaker 14: for a product, as in the search volume for the

685
00:34:45,560 --> 00:34:46,960
Speaker 14: information parts.

686
00:34:46,600 --> 00:34:50,560
Speaker 8: Ten times than the products park. So think about it.

687
00:34:50,560 --> 00:34:52,640
Speaker 14: If you want to start a business, you will not

688
00:34:53,040 --> 00:34:55,960
Speaker 14: specifically go to a products or go to a kind

689
00:34:55,960 --> 00:34:58,400
Speaker 14: of suppliers. You will come up on this idea like

690
00:34:58,440 --> 00:35:02,400
Speaker 14: it was trending and with a specific kind of textile

691
00:35:02,400 --> 00:35:05,359
Speaker 14: you're going to use in your product, and then it's

692
00:35:05,440 --> 00:35:07,879
Speaker 14: kind of the big business plend Then it's come to

693
00:35:07,920 --> 00:35:11,200
Speaker 14: the products. So now using AI have this kind of

694
00:35:11,360 --> 00:35:15,200
Speaker 14: multi round the dialogue kind of search a lot of people.

695
00:35:15,320 --> 00:35:19,360
Speaker 14: Now it's more easy to do business online. And for

696
00:35:19,440 --> 00:35:23,520
Speaker 14: the sellers we see current our kind of for agent

697
00:35:23,920 --> 00:35:28,320
Speaker 14: these tools, it's already better than sixty or seventy percent

698
00:35:28,600 --> 00:35:31,000
Speaker 14: of the seller if they are new on olib dot

699
00:35:31,000 --> 00:35:35,800
Speaker 14: com in terms of the conversion rate for the customer

700
00:35:35,800 --> 00:35:37,760
Speaker 14: engagement and for the product management.

701
00:35:38,360 --> 00:35:41,200
Speaker 15: But how many businesses I think there's around two hundred

702
00:35:41,320 --> 00:35:45,000
Speaker 15: thousand smsider on the platform. How many businesses are actually

703
00:35:45,080 --> 00:35:45,960
Speaker 15: using AI today?

704
00:35:46,560 --> 00:35:50,960
Speaker 14: So currently the weekly active sellers are more than one

705
00:35:51,000 --> 00:35:53,800
Speaker 14: hundred percent, so it's more than half of the sellers

706
00:35:53,920 --> 00:35:58,040
Speaker 14: is already equipped by this agent based tools. And for

707
00:35:58,160 --> 00:36:01,959
Speaker 14: the buyer side, actually we want the AX. From last

708
00:36:02,160 --> 00:36:07,080
Speaker 14: November until now, there are accumulately more than one million users.

709
00:36:06,880 --> 00:36:10,120
Speaker 8: Is using using this AI based power search.

710
00:36:10,680 --> 00:36:14,080
Speaker 15: How much do you feel the competitive pressure on AI

711
00:36:14,640 --> 00:36:16,760
Speaker 15: given the amount of innovation that's.

712
00:36:16,640 --> 00:36:17,360
Speaker 2: Coming from China.

713
00:36:17,680 --> 00:36:20,919
Speaker 14: Okay, so first of all, we think there's a lot

714
00:36:21,200 --> 00:36:24,200
Speaker 14: we can do so far. For example, we talk about

715
00:36:24,239 --> 00:36:28,319
Speaker 14: the reasoning models, but based on language there's a lot

716
00:36:29,040 --> 00:36:34,320
Speaker 14: on the modimodel multimodel stuff that we can do and

717
00:36:34,480 --> 00:36:37,680
Speaker 14: later on, like you can based on anything.

718
00:36:37,440 --> 00:36:39,959
Speaker 8: An image, a video or a.

719
00:36:39,920 --> 00:36:43,600
Speaker 14: File that you uploaded the fail that the reasoning model

720
00:36:43,640 --> 00:36:46,640
Speaker 14: can help you to interpret and to a upon. So

721
00:36:46,920 --> 00:36:49,000
Speaker 14: all those kinds of sill we still believe there's a

722
00:36:49,080 --> 00:36:52,280
Speaker 14: huge space to grow and we can leverish the most.

723
00:36:52,960 --> 00:36:56,799
Speaker 14: I mean the models from matter, from deepsy, from art

724
00:36:56,920 --> 00:36:58,120
Speaker 14: cloud to Chailman.

725
00:36:58,520 --> 00:37:00,080
Speaker 8: So all these models actually.

726
00:36:59,840 --> 00:37:04,000
Speaker 14: Can help us to boost the capability of the applications

727
00:37:04,160 --> 00:37:07,680
Speaker 14: that we believe. Application actually is the key here and

728
00:37:07,880 --> 00:37:10,080
Speaker 14: why we think we can do it here we can

729
00:37:10,120 --> 00:37:13,040
Speaker 14: do better than others. Is not going to be a

730
00:37:13,080 --> 00:37:16,320
Speaker 14: few tools that play for the people answer the easy questions.

731
00:37:16,400 --> 00:37:20,440
Speaker 14: You need to be highly integrated into the big scenarios

732
00:37:20,680 --> 00:37:24,400
Speaker 14: like global trade is a thirty treating US dollar business.

733
00:37:24,480 --> 00:37:27,080
Speaker 14: I don't think any other business is larger than this.

734
00:37:27,680 --> 00:37:30,520
Speaker 14: So if we can apply AI in this business and

735
00:37:30,680 --> 00:37:34,839
Speaker 14: helping a lot of SMBs, so who cannot participate in

736
00:37:34,840 --> 00:37:37,239
Speaker 14: the global trade and now they can, so as think

737
00:37:37,239 --> 00:37:39,240
Speaker 14: this is a big success for us.

738
00:37:40,080 --> 00:37:43,320
Speaker 15: A lot of people are expecting industry consolidation or AI

739
00:37:43,400 --> 00:37:47,640
Speaker 15: consolidation in China this coming year. How many winners do

740
00:37:47,680 --> 00:37:49,960
Speaker 15: you see in the AI space in China?

741
00:37:50,840 --> 00:37:53,960
Speaker 14: So actually, for that part, I can only speak of

742
00:37:54,080 --> 00:37:58,920
Speaker 14: my opinion. So if you ask this question in January

743
00:37:59,360 --> 00:38:03,160
Speaker 14: plenty twenty five, as seeing that nobody can anticipate it,

744
00:38:03,200 --> 00:38:04,760
Speaker 14: there's a company called Diepsick.

745
00:38:05,560 --> 00:38:07,560
Speaker 8: I think you ask this question in March.

746
00:38:08,200 --> 00:38:10,520
Speaker 14: I don't think that anybody can antipates to what's going

747
00:38:10,560 --> 00:38:13,800
Speaker 14: to happen in April as well. This industry is moving

748
00:38:13,880 --> 00:38:16,120
Speaker 14: so fast and a lot of people doing a lot

749
00:38:16,160 --> 00:38:19,120
Speaker 14: of innovations. We just need to focus on what are

750
00:38:19,160 --> 00:38:23,560
Speaker 14: the right problems we need to tackle as people in

751
00:38:23,600 --> 00:38:27,640
Speaker 14: this technology domain. I don't think anybody can anticipate what's

752
00:38:27,680 --> 00:38:28,839
Speaker 14: going on for this year.

753
00:38:29,520 --> 00:38:34,640
Speaker 4: Alibaba dot Com president Quosine speaking exclusively with Bluemeg's Annabelt Drowners.

754
00:38:42,600 --> 00:38:46,040
Speaker 4: Let's just take a quick check on Apple shares year today.

755
00:38:46,680 --> 00:38:50,239
Speaker 4: Their erosion in market capitalization is to the tune of

756
00:38:50,239 --> 00:38:53,080
Speaker 4: about half a trillion dollars a fifteen percent wipeout is

757
00:38:53,160 --> 00:38:55,319
Speaker 4: actually far worse. And then as that one hundred which

758
00:38:55,320 --> 00:38:57,680
Speaker 4: is off about eight percent, why is it underperforming? There

759
00:38:57,719 --> 00:39:01,080
Speaker 4: is a myriad of risks which round Rosseella really writes

760
00:39:01,080 --> 00:39:04,240
Speaker 4: about to our audience today, talking about the wives of tariffs,

761
00:39:04,280 --> 00:39:07,279
Speaker 4: about the uncertainty in China, about the AI offerings really

762
00:39:07,400 --> 00:39:09,839
Speaker 4: fizzling of course of late, the SERI concerns, and then

763
00:39:09,840 --> 00:39:13,160
Speaker 4: there's that lucrative partnership with Google parent Alphabet and whether

764
00:39:13,239 --> 00:39:16,360
Speaker 4: or not those payments will still come for exclusive access

765
00:39:16,400 --> 00:39:19,279
Speaker 4: to Google Search within the iPhone. Well, let's talk all

766
00:39:19,320 --> 00:39:20,879
Speaker 4: about Apple and maybe the way in which is trying

767
00:39:20,880 --> 00:39:24,040
Speaker 4: to offset some of these headwinds, the affordable iPhone sixteen

768
00:39:24,040 --> 00:39:26,960
Speaker 4: and e howforfordable actually is it? Mark German is beginning

769
00:39:26,960 --> 00:39:29,320
Speaker 4: his hands on some of the products, and Bloomberg writes

770
00:39:29,360 --> 00:39:31,759
Speaker 4: about how it's kind of a tough sell at this

771
00:39:31,800 --> 00:39:32,360
Speaker 4: price point.

772
00:39:32,400 --> 00:39:36,440
Speaker 16: Mark, Yeah, to your point, it's not affordable enough. At

773
00:39:36,480 --> 00:39:39,359
Speaker 16: six hundred dollars. It puts it basically at the very

774
00:39:39,440 --> 00:39:43,840
Speaker 16: high end the budget range, right, But it's specifications, one camera,

775
00:39:44,640 --> 00:39:48,319
Speaker 16: it's processing, its AI capabilities really puts it sort of at.

776
00:39:48,239 --> 00:39:49,760
Speaker 8: The bottom barrel of budget phones.

777
00:39:49,760 --> 00:39:52,399
Speaker 16: You can get Android phones for a couple hundred dollars less,

778
00:39:52,719 --> 00:39:56,279
Speaker 16: particularly overseas, where you're getting three or four cameras, where

779
00:39:56,320 --> 00:39:59,160
Speaker 16: you're getting better AI features, where you're getting better displays,

780
00:39:59,440 --> 00:40:03,080
Speaker 16: you're getting higher resolution panels with improved frame rates for scrolling,

781
00:40:03,360 --> 00:40:07,080
Speaker 16: you're getting better gaming, etc. So they have a lot

782
00:40:07,120 --> 00:40:09,640
Speaker 16: of competition there, and it continues to be mind boggling

783
00:40:09,880 --> 00:40:11,319
Speaker 16: that they abandoned that three to.

784
00:40:11,280 --> 00:40:12,480
Speaker 6: Four hundred dollars price point.

785
00:40:12,640 --> 00:40:15,160
Speaker 16: I really think something like that, while out of the

786
00:40:15,160 --> 00:40:18,920
Speaker 16: typical Apple premium range, would have helped them tremendously with growth,

787
00:40:18,960 --> 00:40:24,440
Speaker 16: particularly for services in places like India, Southeast Asia, Eastern Europe.

788
00:40:24,840 --> 00:40:28,320
Speaker 4: To your point, when you first reported about this products

789
00:40:28,360 --> 00:40:31,239
Speaker 4: coming out, the idea was actually it was very like

790
00:40:31,320 --> 00:40:34,160
Speaker 4: and iphoned sixteen. There wasn't really much you were having

791
00:40:34,239 --> 00:40:36,759
Speaker 4: to leave on the table by not going down to

792
00:40:36,800 --> 00:40:39,319
Speaker 4: this particular phone. So will they ever bring anything out

793
00:40:39,400 --> 00:40:41,520
Speaker 4: in that price range that you think could tempt more

794
00:40:41,520 --> 00:40:42,760
Speaker 4: of an emerging market purchaser.

795
00:40:44,760 --> 00:40:47,239
Speaker 16: I would never say never, but my belief is that

796
00:40:47,280 --> 00:40:49,360
Speaker 16: the plan is eventually to bring the price down of

797
00:40:49,400 --> 00:40:52,520
Speaker 16: this particular model. Right today it's six hundred dollars, but

798
00:40:52,600 --> 00:40:54,720
Speaker 16: maybe in a year and a half, two years from now,

799
00:40:54,880 --> 00:40:56,640
Speaker 16: maybe I'll get it down to the five hundred dollars

800
00:40:56,640 --> 00:40:59,400
Speaker 16: price range. At that point, it's going to be even

801
00:40:59,400 --> 00:41:03,160
Speaker 16: more outdated specification wise, but from a price point perspective,

802
00:41:03,360 --> 00:41:06,680
Speaker 16: it'll actually be quite a bit more compelling. It would

803
00:41:06,680 --> 00:41:09,160
Speaker 16: put it squarely in the same price range as the

804
00:41:09,200 --> 00:41:11,719
Speaker 16: Google Pixel A series. Right they have the eight A

805
00:41:11,960 --> 00:41:14,360
Speaker 16: eight right now, they have the nine A coming. This

806
00:41:14,440 --> 00:41:16,680
Speaker 16: is an annual thing. They do a lower end pixel phone,

807
00:41:16,960 --> 00:41:20,560
Speaker 16: so better competition there. The concern is right for Googles,

808
00:41:20,560 --> 00:41:23,000
Speaker 16: no one's really buying the Pixel phones as great as

809
00:41:23,040 --> 00:41:23,319
Speaker 16: they are.

810
00:41:23,400 --> 00:41:24,279
Speaker 6: For Apple, they're at.

811
00:41:24,200 --> 00:41:27,600
Speaker 16: Least getting some momentum because this is a phone. It's

812
00:41:27,680 --> 00:41:30,160
Speaker 16: not going to get switchers, but it's a phone that's

813
00:41:30,160 --> 00:41:33,160
Speaker 16: going to be able to upgrade from older iPhones. So

814
00:41:33,200 --> 00:41:36,200
Speaker 16: from that standpoint it's compelling for some people. But they

815
00:41:36,239 --> 00:41:39,400
Speaker 16: have the opportunity to do something even bolder, even bigger,

816
00:41:39,440 --> 00:41:40,040
Speaker 16: even cheaper.

817
00:41:41,480 --> 00:41:43,759
Speaker 4: Well, for now, we still wonder what's happening in terms

818
00:41:43,800 --> 00:41:47,000
Speaker 4: of the generative AI integration, Apple Intelligence, Siri as well.

819
00:41:47,000 --> 00:41:49,319
Speaker 4: There's a lot going on for this particular company. Mark German,

820
00:41:49,360 --> 00:41:51,319
Speaker 4: as always, you can break it down for us, thank you.

821
00:41:51,680 --> 00:41:53,400
Speaker 4: Let's just return to what is a key mover on

822
00:41:53,440 --> 00:41:56,920
Speaker 4: the day, though, because at last the relief floods the

823
00:41:56,960 --> 00:42:00,319
Speaker 4: market that Intel has a single CEO for the law term.

824
00:42:00,400 --> 00:42:02,960
Speaker 4: The interim CEOs go back to their day jobs as

825
00:42:03,000 --> 00:42:05,759
Speaker 4: CFO and chief a product. We're up fourteen percent as

826
00:42:05,800 --> 00:42:08,160
Speaker 4: lip Boutang comes back to the business, can he be

827
00:42:08,320 --> 00:42:10,960
Speaker 4: a turnaround king for Intel as he was for Cadence Designs.

828
00:42:11,680 --> 00:42:14,000
Speaker 4: That does it for this edition of Bloomberg Technology. Do

829
00:42:14,160 --> 00:42:15,839
Speaker 4: not forget to check out our podcast. You can find

830
00:42:15,840 --> 00:42:18,520
Speaker 4: it online on the terminal as well as Apple, Spotify,

831
00:42:18,560 --> 00:42:19,120
Speaker 4: and iHeart.

832
00:42:19,440 --> 00:42:23,560
Speaker 2: This is Bloomberg Technology.