WEBVTT - Qualcomm and Apple's Chip Agreement, Daniel Zhang Leaves Alibaba 0:00:01.639 --> 0:00:05.960 From Marhart where Innovation, Money and power Collie in Silicon 0:00:06.040 --> 0:00:06.920 Vallet NBN. 0:00:07.280 --> 0:00:11.320 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:26.239 --> 0:00:29.160 I'm Ed Ludlow in San Francisco. Caroline hides off today. 0:00:29.240 --> 0:00:32.680 This is Bloomberg Technology coming up on the program. Qualcom 0:00:32.720 --> 0:00:36.800 and Apple extend their semiconductor agreement for three more years 0:00:36.800 --> 0:00:40.320 in a sign Apple's in house chips are taking longer 0:00:40.360 --> 0:00:43.479 than expected. Will bring you the details and Ali Baba's 0:00:43.479 --> 0:00:47.040 former chief Daniel Jang leaving the company's cloud division just 0:00:47.120 --> 0:00:50.159 months after agreeing to lead it. We'll have more on 0:00:50.200 --> 0:00:53.519 the leadership changes and uncertainty facing the company as it 0:00:53.600 --> 0:00:57.760 navigates a complicated breakup. Plus we'll talk initial public offerings 0:00:57.800 --> 0:01:00.840 as Instacart kicks off its IPO row show and the 0:01:00.880 --> 0:01:04.440 company seeks evaluation. That's a big drop from its pandemic heyday. 0:01:04.480 --> 0:01:06.959 We'll have that and so much more throughout the hour. 0:01:07.040 --> 0:01:10.039 Let's get straight to our top story, Apple and Quawcom. 0:01:10.080 --> 0:01:13.280 This is about modems that go into the iPhone, connecting 0:01:13.319 --> 0:01:15.280 them to the high speed five G networks. You can 0:01:15.319 --> 0:01:18.240 see both shares. This is boosting Qualcomm up three point 0:01:18.319 --> 0:01:21.959 five percent. Remember Bloomberg Is reported that Apple has been 0:01:22.000 --> 0:01:24.839 working on its own in house modem. Twenty four hours 0:01:24.840 --> 0:01:28.240 from now, Apple will unveil its iPhone fifteen. The expectation 0:01:28.920 --> 0:01:31.440 was that that would be the last generation to use 0:01:31.640 --> 0:01:35.720 Qualcomm's modem. Not the case, according to the agreement which 0:01:35.800 --> 0:01:38.160 was announced this morning. For more, let's bring in Bloomberg's 0:01:38.360 --> 0:01:40.920 Ian King on all Things Chips and Mark German, who 0:01:40.959 --> 0:01:44.000 covers Apple. Ian will start with you. This was a surprise. 0:01:44.080 --> 0:01:46.720 What are the terms of the agreement as we understand. 0:01:46.280 --> 0:01:48.920 It, Yeah, I mean they didn't give the precise details. 0:01:48.920 --> 0:01:51.520 What they said was, look, it's the same as the 0:01:51.560 --> 0:01:55.200 agreement that we have in place, and in terms of timing, 0:01:55.280 --> 0:02:00.840 that's out until the twenty twenty six model and basically 0:02:01.600 --> 0:02:05.000 same again, right, same deal that they signed in twenty nineteen, 0:02:05.400 --> 0:02:08.760 except it's going three years longer than it was supposed to. 0:02:10.280 --> 0:02:12.720 Let's go to the basics. What is it that Qualcom 0:02:12.720 --> 0:02:15.720 makes for smartphones and in particular Apple. 0:02:16.560 --> 0:02:19.120 Well, it's in particular Apple is the key here. This 0:02:19.200 --> 0:02:21.280 is the modem. This is the chip that takes that 0:02:21.360 --> 0:02:25.160 cellular radio signal, turns it into data, turns it into 0:02:25.200 --> 0:02:28.600 a voice, and it's a crucial, crucial component that determines 0:02:28.720 --> 0:02:30.040 just how well your phone works. 0:02:31.400 --> 0:02:35.239 Gumman, let's bring you into the conversation. You have reported 0:02:35.680 --> 0:02:39.120 that Apple was developing its own modem in house. The 0:02:39.200 --> 0:02:42.359 story here seems to be that Apple's not as far 0:02:42.400 --> 0:02:43.800 along as they'd expected. 0:02:45.600 --> 0:02:47.880 They're certainly not as far along as they expected when 0:02:47.919 --> 0:02:50.160 they set out to build a modem in twenty eighteen. 0:02:50.520 --> 0:02:53.360 They were hoping to get that chip into phones beginning 0:02:53.360 --> 0:02:56.160 around twenty twenty two. That got delayed a bit through 0:02:56.200 --> 0:02:58.400 twenty twenty three, right, And you can see that in 0:02:58.400 --> 0:03:01.519 the supply agreement they reach it qualcommon twenty nineteen is 0:03:01.560 --> 0:03:05.160 part of that royalty lawsuit settlement. But the anticipation was 0:03:05.200 --> 0:03:08.600 to begin getting that modem in flagship iPhones by the 0:03:08.760 --> 0:03:11.320 end of this year or early next year. 0:03:11.639 --> 0:03:14.160 And my anticipation is they'll still be able. 0:03:13.919 --> 0:03:17.400 To begin rolling out that modem, probably at the beginning 0:03:17.440 --> 0:03:19.400 of twenty twenty five, not the tail end at twenty 0:03:19.440 --> 0:03:21.920 twenty five, and they wanted to give themselves a little 0:03:21.919 --> 0:03:24.320 bit of leeway agreeing through twenty twenty six. 0:03:24.720 --> 0:03:25.480 Now you have to. 0:03:25.400 --> 0:03:27.799 Look at Apple and how many devices they have. They 0:03:27.840 --> 0:03:31.040 have several skews of the iPhone, they have many skews 0:03:31.080 --> 0:03:33.840 of the iPad, they have the Apple Watch as well, 0:03:33.960 --> 0:03:36.840 and they need to get their own modem to work 0:03:37.000 --> 0:03:40.120 in all of those different devices and also have them 0:03:40.160 --> 0:03:43.560 certified to work across the world on hundreds of different 0:03:43.560 --> 0:03:46.360 carriers in hundreds of different countries, and they have to 0:03:46.400 --> 0:03:49.320 deal with the biocracy of that as well, the testing 0:03:49.400 --> 0:03:51.760 the different conditions. They have to have the chipwork on 0:03:51.840 --> 0:03:54.800 three G, four G, and five G, and that's not 0:03:54.920 --> 0:03:57.080 something they can do in one full swop. So my 0:03:57.200 --> 0:03:59.640 belief is they'll begin the transition with one or two 0:03:59.680 --> 0:04:03.440 model in twenty twenty five and gradually expand that to 0:04:03.520 --> 0:04:06.960 more models across twenty twenty six and into twenty twenty seven. 0:04:08.360 --> 0:04:10.400 Mark I and bear with me. This is what Qualcom 0:04:10.480 --> 0:04:14.800 said this morning in their statement. This agreement reinforces Qualcom's 0:04:14.880 --> 0:04:20.880 track record of sustained leadership across five D technologies and products, 0:04:20.880 --> 0:04:23.599 and as Ian outlined the deal carries through in the 0:04:23.600 --> 0:04:26.560 twenty twenty six generation of iPhone, And as Mark, you 0:04:26.680 --> 0:04:29.800 just outlined you think that this will be phased with Apple. 0:04:30.279 --> 0:04:33.520 Where does the modem sit within Apple's other activities in 0:04:33.560 --> 0:04:36.239 silicon Because actually I think what we expect in twenty 0:04:36.240 --> 0:04:40.280 four hours time is more proprietary silicon from Apple going 0:04:40.320 --> 0:04:41.680 into the latest handsets. 0:04:42.880 --> 0:04:45.520 Yeah, it's just one leg of the stool, right Apple's 0:04:45.560 --> 0:04:50.320 Harvard Technologies organization, the modem is a high priority component there. 0:04:50.440 --> 0:04:55.400 They have offices in San Diego, Cooper Tino, multiple places 0:04:55.640 --> 0:04:59.200 in Europe, including in Munich, Germany, working on this modem. 0:04:59.240 --> 0:05:01.919 They have thousands people on the effort. The person in 0:05:02.080 --> 0:05:06.159 charge of the modem is actually a former Qualcom vice 0:05:06.200 --> 0:05:09.080 president who left about half a decade ago to come 0:05:09.120 --> 0:05:12.599 to Apple to work on this project. Johnny Strugi, who 0:05:12.640 --> 0:05:15.360 is Apple Senior vice president of Harvard Technology who oversees 0:05:15.360 --> 0:05:18.039 all the custom silicon. There's a special place in his 0:05:18.200 --> 0:05:22.600 heart against Qualcomm, and so certainly this is a very 0:05:22.600 --> 0:05:25.840 important effort for Apple. They want to design Qualcom out 0:05:25.880 --> 0:05:29.560 of all of their products. They've been working on this extensively. 0:05:29.600 --> 0:05:32.640 They've run into battery life issues in terms of where 0:05:32.680 --> 0:05:37.320 it sits in the overall organization. They have their Mac chips, 0:05:37.360 --> 0:05:40.839 and then tomorrow they'll announce one new chip, the A 0:05:41.000 --> 0:05:44.240 seventeen processor that's going to be the company's first three 0:05:44.279 --> 0:05:47.920 and nanimeter chip. That's a major milestone for the company. 0:05:47.920 --> 0:05:50.560 There's also going to be a new wireless component that's 0:05:50.640 --> 0:05:54.039 less significant, but certainly the A seventeen chip will be 0:05:54.080 --> 0:05:56.560 one of the core elements of the iPhone fifteen pro 0:05:56.600 --> 0:05:59.280 and Promac's announcement on Tuesday. 0:06:00.279 --> 0:06:02.080 Shares up three and a half percent, on track for 0:06:02.120 --> 0:06:04.599 the biggest jumps since July. Earlier in the session, on 0:06:04.640 --> 0:06:07.679 track for the biggest jumps since May. And it's spare 0:06:07.680 --> 0:06:10.120 a thought for Qualcomm and what it means for them. 0:06:10.360 --> 0:06:12.640 You know, I said that this was a surprise, knowing 0:06:12.680 --> 0:06:15.040 that Apple was working on its own mode. But this 0:06:15.240 --> 0:06:16.800 is good news for Qualcomm. 0:06:16.880 --> 0:06:17.080 Yeah. 0:06:17.080 --> 0:06:19.000 I mean, you look at the analyst notes this morning 0:06:19.000 --> 0:06:21.560 and they're saying this is like seven billion dollars of 0:06:21.600 --> 0:06:25.480 good news for Qualcom had an analyst day last November 0:06:25.480 --> 0:06:28.600 where they said, look, just take out the Apple numbers 0:06:28.640 --> 0:06:31.080 going forward, take them out, act like we don't have 0:06:31.160 --> 0:06:35.600 that business anymore, and they still do, so clearly that's 0:06:36.000 --> 0:06:38.360 a part on the back for their abilities. This is 0:06:38.400 --> 0:06:40.960 a very difficult thing. As Mark just explained, It's not 0:06:41.080 --> 0:06:43.880 just a case of hey, design a nice piece of silicon. 0:06:44.560 --> 0:06:46.240 You know, there's a lot of software tuning. A lot 0:06:46.240 --> 0:06:48.840 of work, a lot of insider knowledge that goes into that, 0:06:48.960 --> 0:06:51.240 and the fact that a company with the resources of 0:06:51.800 --> 0:06:55.480 Apple cannot replicate that effort in a timeline that they 0:06:55.480 --> 0:06:58.400 had set for themselves tells you that Qualcom is doing 0:06:58.440 --> 0:06:59.160 a good job, all. 0:06:59.160 --> 0:07:02.240 Right, Bloomberg, Smart German on Apple, Ian King on Qualcom. 0:07:02.240 --> 0:07:05.040 Thank you. And speaking of those analyst notes, let's bring 0:07:05.120 --> 0:07:08.280 in Jordan Klein, managing director b Zoo's Securities. In a 0:07:08.360 --> 0:07:11.000 note out today, client wrote, the news is a best 0:07:11.040 --> 0:07:14.239 case scenario for Qualcom, as some thought maybe Apple would 0:07:14.240 --> 0:07:16.600 only do a one year supply deal and then move 0:07:16.640 --> 0:07:18.880 on to their own chips. Mark German just explain that. 0:07:19.200 --> 0:07:22.679 So how do you see it, Jordan, the transition using 0:07:22.760 --> 0:07:26.240 Qualcom's modem to using Apple's own proprietary silicon based on 0:07:26.320 --> 0:07:30.120 the deal announced today. 0:07:29.640 --> 0:07:31.680 Well, thanks for having me. I mean, I agree with 0:07:31.760 --> 0:07:34.840 your host as kind of what they said that Apple's 0:07:34.880 --> 0:07:37.600 been working on this for years. It's taking them longer. 0:07:38.600 --> 0:07:38.800 You know. 0:07:38.880 --> 0:07:41.920 We think they're going to gradually migrate over to their 0:07:41.960 --> 0:07:44.400 own custom base ban it's going to take them, you 0:07:44.440 --> 0:07:47.320 know again, probably at the earliest till twenty twenty five, 0:07:47.800 --> 0:07:49.520 you know, we think it could be their lower end 0:07:49.760 --> 0:07:53.040 SC four that could start using their own baseman, and 0:07:53.080 --> 0:07:55.760 then they would gradually shift to other models in the 0:07:55.800 --> 0:07:59.200 lineup in twenty twenty six, so you know, but it's 0:07:59.240 --> 0:08:02.160 three years some time, and in the meantime, you know, 0:08:02.280 --> 0:08:06.680 Qualcomm kind of sustains its leadership position and gets the 0:08:06.720 --> 0:08:09.360 added revenue and earnings that they would have lost starting 0:08:09.560 --> 0:08:10.080 next year. 0:08:11.400 --> 0:08:14.480 Jordan, I spent all of twenty twenty one and all 0:08:14.520 --> 0:08:19.160 of twenty twenty two talking about the five G supercycle. Unbelievably, 0:08:19.480 --> 0:08:22.400 my mind's already going to six G, and I just 0:08:22.440 --> 0:08:24.320 wondered if you could talk us through how you see 0:08:24.360 --> 0:08:27.640 Qualcom as positioned, if we're all going to move on 0:08:27.680 --> 0:08:30.720 to six G and the relationship with Apple in the future. 0:08:32.920 --> 0:08:35.880 Well, it's a great question. I mean, again, like I said, 0:08:36.000 --> 0:08:40.800 Qualcomm is viewed as the best company and mobile technology, 0:08:40.840 --> 0:08:43.040 and there's a reason for that. They've been doing it 0:08:43.080 --> 0:08:46.880 longer than anyone. But if you ask the company about 0:08:46.920 --> 0:08:50.320 six G and people have on their earnings calls, I mean, 0:08:50.520 --> 0:08:52.760 they don't even really think it's going to be an 0:08:52.800 --> 0:08:54.880 impact until the end of the decade. 0:08:55.400 --> 0:08:56.400 So you know, at the. 0:08:56.360 --> 0:08:59.120 Earliest you're talking five six years away. It's going to 0:08:59.120 --> 0:09:01.920 take a long time for that to evolve. So I 0:09:01.960 --> 0:09:06.280 think right now their focus is broadening their revenue base, 0:09:07.280 --> 0:09:10.240 moving beyond mobile. I mean, there's a reason that that 0:09:10.320 --> 0:09:13.280 Investor day a year ago they told the Wall Street 0:09:13.320 --> 0:09:16.040 community to kind of take this Apple business out of 0:09:16.040 --> 0:09:19.680 their revenues. I think that they wanted to move beyond Apple. 0:09:20.120 --> 0:09:23.160 They want to go into automotive, IoT, other areas of 0:09:23.160 --> 0:09:28.080 the market, even PC computing, where they can diversify beyond mobile. 0:09:28.160 --> 0:09:30.040 So look, it's going to be really big for them 0:09:30.120 --> 0:09:32.480 when the industry is finally ready to go to six G. 0:09:33.200 --> 0:09:35.880 But to be honest, I think we've got multiple years 0:09:35.960 --> 0:09:38.079 be it between then and now before it will really 0:09:38.120 --> 0:09:39.719 matter for the Stocker investors. 0:09:39.960 --> 0:09:42.439 I've spoken to Christiano I'm on so many times about 0:09:42.480 --> 0:09:47.880 this move towards automotive. Indeed, actually the importance of on 0:09:48.080 --> 0:09:52.880 device running of LMS. You know, it's another area for Qualcom. 0:09:53.440 --> 0:09:58.280 Can they maintaintain technology leadership the smartphone modem at the 0:09:58.360 --> 0:10:01.080 same time is trying to move and throw these other 0:10:01.120 --> 0:10:02.240 areas well. 0:10:02.280 --> 0:10:03.560 I definitely think they can. 0:10:04.320 --> 0:10:06.920 I think that they make so much profit and money 0:10:07.320 --> 0:10:10.319 from the basepan and the modem business. And really, when 0:10:10.360 --> 0:10:14.240 you think about it, I mean they're licensing businesses almost 0:10:14.240 --> 0:10:17.520 one hundred percent margins. It's it's basically a license to 0:10:17.559 --> 0:10:19.880 print money, and they take a lot of that and 0:10:19.920 --> 0:10:23.760 they use that to develop new areas of silicon new technologies. 0:10:24.240 --> 0:10:26.960 And they're out there talking, you know, a big game 0:10:27.040 --> 0:10:30.240 about how generative AI is going to move from in 0:10:30.280 --> 0:10:34.920 the cloud and these large big data centers towards the 0:10:35.040 --> 0:10:38.000 end user device, and that's where they think they'll have 0:10:38.040 --> 0:10:41.400 an edge because of their advantage in mobile processing units, 0:10:42.600 --> 0:10:45.960 where they're also a leader. So I think again, the 0:10:46.000 --> 0:10:48.800 time's going to tell if users are going to, you know, 0:10:48.920 --> 0:10:53.240 upgrade their phones to a more powerful mobile processor where 0:10:53.240 --> 0:10:56.880 they think they can get advantages doing AI on their device. 0:10:57.360 --> 0:11:00.560 Jordan, of the universe of chick names that you're covering, 0:11:01.360 --> 0:11:04.480 who do you see as best position to take advantage? 0:11:04.480 --> 0:11:06.679 I suppose if the CAPEX and R and D commitments 0:11:06.760 --> 0:11:10.280 right now that are going into how technology companies of 0:11:10.320 --> 0:11:14.760 all sizes use AI within their core businesses, well. 0:11:14.640 --> 0:11:18.240 I think first and foremost that conversation or that answer 0:11:18.280 --> 0:11:20.920 has to start within Nvidia. I mean, there's a reason 0:11:20.960 --> 0:11:25.719 it's almost doubled this year because they're just dominating the 0:11:25.760 --> 0:11:32.240 shift in terms of processing from CPUs traditional server chips 0:11:32.320 --> 0:11:37.640 towards global graphics processors which are much higher power, much 0:11:37.679 --> 0:11:40.600 more energy efficient. So I think you start within VIDIA, 0:11:40.920 --> 0:11:43.000 that again has a big advantage in a lead over 0:11:43.040 --> 0:11:45.559 their competitors. But I think as we go into twenty 0:11:45.600 --> 0:11:49.760 twenty four, companies like AMD clearly are going to be 0:11:49.800 --> 0:11:54.800 in the mix. Marvel and Broadcom are also big contributors, 0:11:55.000 --> 0:11:59.079 are contributing to this AI investment thesis, and then I 0:11:59.120 --> 0:12:02.160 wouldn't count out TELL and I would also look to 0:12:02.200 --> 0:12:05.680 these memory companies like micround because you're going to need 0:12:06.040 --> 0:12:09.200 a lot of memory to run these systems. 0:12:09.400 --> 0:12:11.800 Jordan Klein and Massoua Goods catch up and have you 0:12:11.880 --> 0:12:23.320 here on Bloomberg Technology. Thank you, Okay, So this is 0:12:23.320 --> 0:12:26.120 the market story. US majors trading in the green today 0:12:26.160 --> 0:12:28.520 the S and P five hundred near it's forty five 0:12:28.600 --> 0:12:32.040 hundred level. The story has been outperformance in the session 0:12:32.080 --> 0:12:35.160 of Technology. We get the CPI print Wednesday. In the 0:12:35.240 --> 0:12:38.240 last seven days, a new story snuck in which is 0:12:38.280 --> 0:12:42.400 concerns about China US China tensions, but also what's happening 0:12:42.440 --> 0:12:45.880 with the technology sector in China, remember then, as that 0:12:45.920 --> 0:12:48.120 one hundred is up more than forty percent year today, 0:12:48.200 --> 0:12:51.880 why probably artificial intelligence. Let's tie this all together and 0:12:51.880 --> 0:12:56.240 bring in Linda Dousol federated Herme's senior ecuity strategists. That's 0:12:56.320 --> 0:12:59.560 a tough thing to ask, Linda, but right now from 0:12:59.600 --> 0:13:03.280 a technology sector perspective, what is driving these markets? 0:13:03.880 --> 0:13:06.280 Well, I think you made the important point, which is 0:13:06.280 --> 0:13:10.439 that artificial intelligency AI craze isn't really a craze. It's 0:13:10.480 --> 0:13:14.920 a revolution. And as your previous guests discussed in depth, 0:13:15.000 --> 0:13:17.880 you know whether or not we peeked out in our 0:13:17.960 --> 0:13:20.960 use of chat GPT for the moment, lots of companies 0:13:20.960 --> 0:13:23.160 out there are building for what is going to be 0:13:23.160 --> 0:13:26.400 a great productivity and handswer So it's very exciting. It's 0:13:26.480 --> 0:13:28.520 moved the market this year to date, and of course 0:13:28.559 --> 0:13:31.560 it's had a nice little correction as well into now 0:13:31.679 --> 0:13:34.880 so steadily now we look at it again and say 0:13:34.920 --> 0:13:37.160 maybe it's time to get back in, and then we 0:13:37.240 --> 0:13:38.720 trade down semiconductors. 0:13:39.400 --> 0:13:42.000 Linda is an equity strategist. Even if you're taking a 0:13:42.040 --> 0:13:46.800 macro view, how has artificial intelligence changed the data points 0:13:46.840 --> 0:13:49.040 that you look at. You know, we'll talk about the 0:13:49.040 --> 0:13:51.400 FED and CPI in a minute, but I just wondered 0:13:51.440 --> 0:13:54.280 if you've changed your approach the commentary you look at 0:13:54.360 --> 0:13:57.120 where you look for information to try and understand what 0:13:57.160 --> 0:13:57.880 AI is doing. 0:13:58.160 --> 0:14:00.520 Well, Well, you know, I appreciate that question because just 0:14:00.559 --> 0:14:03.920 as a general equity strategist, may it behooves us all 0:14:04.000 --> 0:14:07.000 to learn about AI and how quickly it might come 0:14:07.080 --> 0:14:10.720 and change our lives. So I guess the bottom line 0:14:10.720 --> 0:14:15.000 for any general anybody who's looking at stocks is is 0:14:15.040 --> 0:14:18.920 the company that you're looking at grasping this or are 0:14:18.920 --> 0:14:20.360 they turning a blind eye. 0:14:20.160 --> 0:14:21.720 To it and expecting it to go away? 0:14:22.280 --> 0:14:24.560 Those who are investing in this even you know, looking 0:14:24.600 --> 0:14:28.640 for companies that are hiring for AI talent is one 0:14:28.760 --> 0:14:31.800 very interesting way to look for stocks out there, and 0:14:31.880 --> 0:14:35.360 the productivity enhancement that should be expected over the next 0:14:35.360 --> 0:14:38.120 ten years can come a lot quicker than many people think, 0:14:38.160 --> 0:14:40.440 and that's obviously going to show its way through earnings. 0:14:41.720 --> 0:14:45.520 Linda, is there any specific sub sector or area where 0:14:45.560 --> 0:14:50.760 you see most potential upside from investments into whether it's 0:14:50.800 --> 0:14:56.359 accelerated computing or into large language models. The underlying technology 0:14:56.400 --> 0:14:58.480 behind generative AI you. 0:14:58.400 --> 0:15:00.000 Know, that's a very interesting question. 0:15:00.200 --> 0:15:03.720 Is going to probably cross through all sectors of the economy. 0:15:04.240 --> 0:15:06.600 But when you look at really there's two areas of it. 0:15:06.680 --> 0:15:10.840 The information part of it, those jobs that are highly 0:15:11.000 --> 0:15:15.400 information oriented that can be at first helped buy AI, 0:15:15.600 --> 0:15:18.960 and then maybe see jobs displaced by AI over years 0:15:19.000 --> 0:15:19.560 going forward. 0:15:19.600 --> 0:15:20.600 So that'll be some of the. 0:15:20.520 --> 0:15:25.840 More highly paid, highly compensated areas out there. I don't know, 0:15:25.920 --> 0:15:27.640 if you're a lawyer, maybe you need to watch out 0:15:27.640 --> 0:15:29.560 here that type of a thing. And then on the 0:15:29.600 --> 0:15:32.920 lower end of the spectrum, you'll see cost cutting in 0:15:33.000 --> 0:15:36.640 terms of labor in areas that are heavily labor intensive 0:15:36.640 --> 0:15:39.440 but that are repetitive, and that goes to the robotics 0:15:39.720 --> 0:15:43.000 side of things. Your retail sales clerks, you know, are 0:15:43.040 --> 0:15:45.560 in big, big trouble. I think if I was looking 0:15:45.600 --> 0:15:50.160 to give advice to a young student, I'd say, you know, 0:15:50.160 --> 0:15:51.520 you might want to go ahead and be a nurse 0:15:51.560 --> 0:15:53.600 instead of thinking about going to work at the mall. 0:15:53.640 --> 0:15:54.240 For example. 0:15:55.600 --> 0:15:57.520 I am not a lawyer. I did go to law 0:15:57.520 --> 0:16:00.320 school blenda, but I know numbers start out here in 0:16:00.320 --> 0:16:03.120 the Bay Area. They're looking to use AI for the 0:16:03.160 --> 0:16:05.840 review of legal documents. I think we better also talk 0:16:05.840 --> 0:16:08.760 about China. You know, the story about China is that 0:16:08.880 --> 0:16:12.120 is kind of the tension between the US and China's 0:16:12.120 --> 0:16:14.440 central government. But Ai is at the heart of that. 0:16:14.800 --> 0:16:17.840 And I just wondered how you see the latest headlines 0:16:17.880 --> 0:16:19.600 from China impacting this market. 0:16:21.440 --> 0:16:24.640 Well, China in general as a place to invest is 0:16:24.680 --> 0:16:28.640 something that people are ever more afraid of for numerous reasons, 0:16:28.680 --> 0:16:31.240 and this is just one extra thing to add to that. 0:16:32.040 --> 0:16:33.320 We want to be self. 0:16:33.120 --> 0:16:36.320 Sufficient here and move lots of production here to the 0:16:36.440 --> 0:16:38.400 United States, and I think other countries around the world 0:16:38.440 --> 0:16:38.840 the same. 0:16:39.120 --> 0:16:41.280 This is going to take a lot longer than many think. 0:16:42.360 --> 0:16:44.360 Not being anew at this at all, but seems very 0:16:44.400 --> 0:16:47.040 clear that we as the United States and our leadership 0:16:47.360 --> 0:16:50.600 may want to try to tamp down those concerns. And 0:16:50.720 --> 0:16:54.280 as you know, some of the best actually have the 0:16:54.360 --> 0:16:57.560 best money being spent in capital expenditures in the manufacturing 0:16:57.600 --> 0:16:59.640 side is because of things like the chip back where 0:16:59.640 --> 0:17:03.440 money's coming from our government to help get more self 0:17:03.440 --> 0:17:05.200 sufficient here in the United States. 0:17:05.480 --> 0:17:06.320 So we can try to. 0:17:06.280 --> 0:17:09.880 Wean away from China in this way, but it will 0:17:09.880 --> 0:17:12.600 be longer. It'll take longer than many think and you know, 0:17:12.640 --> 0:17:15.520 just bringing everything back short and we'll probably take longer 0:17:15.520 --> 0:17:16.120 than many think. 0:17:17.080 --> 0:17:19.760 Linda's CPI Wednesday. Where is your head out with the 0:17:19.800 --> 0:17:21.560 FED and what that means for the tech sector. 0:17:22.640 --> 0:17:25.719 Well, we had Federated Hermes believe that you will see 0:17:26.000 --> 0:17:30.080 probably one more height this year, maybe it's November. Maybe 0:17:30.080 --> 0:17:33.080 they wait one more time, and that is something that's 0:17:33.160 --> 0:17:37.240 probably reasonably expected. You know, in the tech sector, the 0:17:37.240 --> 0:17:41.480 tech sector, that's a long duration asset and you really 0:17:41.480 --> 0:17:43.600 want to see you really don't want to see real 0:17:43.680 --> 0:17:46.200 rates going up, and they've gone up fairly quickly here 0:17:46.720 --> 0:17:50.040 as versus inflation expectations. If we're right about inflation expectations, 0:17:50.080 --> 0:17:53.520 they're coming down, then FED please stop raising rates. It 0:17:53.640 --> 0:17:57.439 just makes it more dangerous or vulnerable for these for 0:17:57.480 --> 0:17:59.440 these stocks that are long duration like tech. 0:18:00.720 --> 0:18:04.320 Linda Dousol's senior equity strategists over at Federated Hermes, Good 0:18:04.320 --> 0:18:07.000 to see you coming up here on bloombo Technology, Ali 0:18:07.040 --> 0:18:10.840 Barber's former chief Daniel Jang quits more in the details. Next, 0:18:11.000 --> 0:18:29.679 this is Bloombow Technology. Time for talking tech. First up, 0:18:29.720 --> 0:18:33.280 India's ed Tech Titan by Jew's made the surprise repayment 0:18:33.320 --> 0:18:37.399 proposal to lenders almost a year of conflict over its debts. 0:18:37.440 --> 0:18:39.320 Sources say the firm is now offering to pay back 0:18:39.359 --> 0:18:42.560 its entire one point two billion term loan in less 0:18:42.600 --> 0:18:46.119 than six months. And Intel Sat, the world's biggest geostationary 0:18:46.119 --> 0:18:49.120 satellite operator, trying to get a foothold in a technology 0:18:49.280 --> 0:18:52.600 that's gained traction in recent years, low Earth orbit satellites. 0:18:52.680 --> 0:18:55.720 The company has taken stakes between five million and twenty 0:18:55.720 --> 0:18:59.280 five million dollars in four businesses focused on low Earth 0:18:59.359 --> 0:19:02.680 orbit to off for new services. Plus, Ali Baba's former chief, 0:19:02.760 --> 0:19:06.439 Daniel Jang has decided to quit just months after agreeing 0:19:06.480 --> 0:19:09.600 to lead the company's cloud division and introducing a new 0:19:09.680 --> 0:19:13.280 layer of uncertainty to China's largest e commerce company just 0:19:13.320 --> 0:19:17.119 as it's navigating a complicated breakout. Let's bring in Bloomberg's 0:19:17.280 --> 0:19:19.960 Isabel Lee out in New York for more. What does this. 0:19:20.000 --> 0:19:21.040 Mean, Haiyan? 0:19:21.240 --> 0:19:23.960 Actually, this was really a surprise to many. It comes 0:19:23.960 --> 0:19:26.359 after two months after his appointment. We have Goldman Sachs 0:19:26.359 --> 0:19:29.480 saying it's a surprise, Bloombery intelligencying that this will likely 0:19:29.520 --> 0:19:31.719 mean that the new partners will have more of an 0:19:31.760 --> 0:19:34.800 influence in the strategic cloud decisions of Ali Baba and 0:19:34.800 --> 0:19:37.480 Bloomberg just last Monday reported that Ali Baba was in 0:19:37.560 --> 0:19:41.000 talks to raise funds from China state owned entities. So 0:19:41.080 --> 0:19:44.160 the departure really caused some people to raise some eyebrows. 0:19:44.200 --> 0:19:47.680 And this comes after an eight year storied career for Zang. 0:19:47.760 --> 0:19:49.639 But not to worry, he will still be in the 0:19:49.640 --> 0:19:52.640 Ali Baba's ecosystem. He'll be running the one billion tech 0:19:52.720 --> 0:19:55.560 fund of the firm. But still the reshuffle comes as 0:19:55.600 --> 0:19:59.840 Alibaba navigates this complicated and historic breakup into meaning Baby Baba's. 0:20:00.080 --> 0:20:02.800 We've discussed a lot in your show, but now I 0:20:02.800 --> 0:20:05.280 guess the certainty is really getting to the investors. Ali 0:20:05.280 --> 0:20:07.480 baba shares fell as much as three and a half percent. 0:20:07.840 --> 0:20:10.480 That's their biggest fall in something like three weeks. 0:20:11.680 --> 0:20:14.360 You know. Josi is like more of a known quantity 0:20:14.400 --> 0:20:16.480 to us here in the United States, at least. He's 0:20:16.560 --> 0:20:20.720 one of the co founders of Ali Barba alongside Jack Maher. 0:20:21.040 --> 0:20:24.080 But tell us about the two new guys not necessarily new, 0:20:24.119 --> 0:20:26.120 but newer names to an international audience. 0:20:26.520 --> 0:20:28.679 So Zen gave up his dual roles of CEO and 0:20:28.760 --> 0:20:31.560 chairman to Eddie Wu and to Joseph Taie, so the 0:20:31.600 --> 0:20:35.040 two are close confidence of MA. Let's go with Eddie 0:20:35.040 --> 0:20:38.080 Woo first. So Eddie Wu is lesser known, but he 0:20:38.119 --> 0:20:40.080 has been with me since the beginning, and he's a 0:20:40.080 --> 0:20:44.159 computer science major. He's credited for the development of the paper. 0:20:44.359 --> 0:20:46.960 Like Ali Pai, we have Taie. He's a well known 0:20:47.000 --> 0:20:49.520 deal maker, and he's a Yale alumnus, and he's a 0:20:49.560 --> 0:20:52.639 former lacrosse player, if that's of any significance, and he's 0:20:52.680 --> 0:20:56.199 the owner of Brooklyn Nets. And like Wo, he was 0:20:56.240 --> 0:20:58.680 with MA since the very beginning. So that probably tells 0:20:58.680 --> 0:21:02.400 you that MA probably really values loyalty. But this means 0:21:02.440 --> 0:21:05.120 that the two of them will be responsible for steering 0:21:05.160 --> 0:21:08.800 a two hundred and thirty billion dollar company around after 0:21:09.000 --> 0:21:11.280 years of struggling since twenty two and one when China 0:21:11.400 --> 0:21:13.840 really cracked down at the tech sector. So this is 0:21:13.840 --> 0:21:16.880 going to be an interesting space to watch. It's very much, 0:21:18.280 --> 0:21:21.159 it's new, it's unexpected, and it's in the middle of 0:21:21.200 --> 0:21:22.800 a huge historic reshuffle. 0:21:23.520 --> 0:21:26.680 All right, bloombergs Isabelle Lee with the lowdown on Ali Baba. 0:21:35.760 --> 0:21:38.399 Welcome back to Bloomberg Technology, Ed love Loo here in 0:21:38.480 --> 0:21:40.480