WEBVTT - Apple AI Plan Hinges on Robots, Cisco CEO Talks Tariffs 0:00:02.520 --> 0:00:13.200 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a 0:00:13.280 --> 0:00:17.040 live from coast to coast with Caroline Hide in New 0:00:17.120 --> 0:00:20.759 York and Eva Low in San Francisco. 0:00:22.920 --> 0:00:25.560 This is Bloomberg Tech coming up. Can Apple be the 0:00:25.560 --> 0:00:29.200 AI comeback kid? Details on the company's push into robots 0:00:29.320 --> 0:00:30.440 and a lifelike Siri. 0:00:30.600 --> 0:00:33.840 Plus, we talked to the Cisco CEO, Chuck Robins, fresh 0:00:33.880 --> 0:00:37.400 off earnings, the company seeing AI sales pick up but 0:00:37.600 --> 0:00:39.159 remains cautious on its outlook. 0:00:39.159 --> 0:00:43.400 Perhaps and Bitcoin retreats from record highs are reminder to 0:00:43.479 --> 0:00:46.599 investors that the ditital asset remains a volatile. 0:00:46.240 --> 0:00:48.920 One and it's AI that that is story for Apple 0:00:49.320 --> 0:00:52.640 because as tech giants are really trying to plot their 0:00:52.680 --> 0:00:56.760 AI focus, it's plotting it's comeback. The efforts centers on robotics, 0:00:56.760 --> 0:01:00.720 on lifelike syriad as you said, and home security. Yesterday, 0:01:01.280 --> 0:01:04.280 some two percent as investors bet this move could really 0:01:04.280 --> 0:01:06.200 help Apple and get its mojo back. Let's go to 0:01:06.200 --> 0:01:09.120 Mark German, who breaks the story yesterday on the future 0:01:09.120 --> 0:01:12.679 of AI. Today, we're going into blood Oxygen readings as well, 0:01:12.720 --> 0:01:14.720 but start with the AI focus. 0:01:14.800 --> 0:01:15.640 What can we expect? 0:01:16.600 --> 0:01:19.000 You know, Apple is a hardware company, right, all these 0:01:19.000 --> 0:01:23.480 companies Chat, GPT, Google, Gemini, Microsoft, they have all these 0:01:23.560 --> 0:01:27.639 AI features, but from a consumer standpoint, it really hasn't 0:01:27.680 --> 0:01:31.000 been monetized. How does Apple monetize its products well by 0:01:31.319 --> 0:01:34.040 selling hardware, getting people to go to Apple stores and 0:01:34.080 --> 0:01:36.600 buy new stuff every year or two. And so they're 0:01:36.640 --> 0:01:39.720 going to replay that strategy when it comes to artificial intelligence, 0:01:40.080 --> 0:01:42.959 and the way they see AI is by integrating it 0:01:43.080 --> 0:01:47.760 and creating devices around the smart home, home cameras and robotics. 0:01:48.040 --> 0:01:50.040 So the company is working on several items that are 0:01:50.040 --> 0:01:54.120 reported yesterday. The centerpiece of the strategy is a tabletop robot. 0:01:54.440 --> 0:01:57.080 This is essentially a virtual companion that you would have 0:01:57.120 --> 0:01:59.480 in your bedroom on your nightstand, you could have in 0:01:59.520 --> 0:02:01.800 your office on your desk, can have on a kitchen counter. 0:02:02.280 --> 0:02:05.200 It uses a robotic arm to move around in space. 0:02:05.520 --> 0:02:06.200 It's like an. 0:02:06.080 --> 0:02:09.680 iPad that can move through thin air on that robotic limb. 0:02:09.760 --> 0:02:11.600 He could help you get things done through your day. 0:02:11.919 --> 0:02:14.680 You can hold conversations with it. If you're having a 0:02:14.720 --> 0:02:17.840 conversation with another human being, it can even interject and 0:02:17.960 --> 0:02:20.919 jump in as if it's a third person in the room. 0:02:21.360 --> 0:02:22.960 You can consume video on it. 0:02:22.960 --> 0:02:24.000 It has FaceTime. 0:02:24.600 --> 0:02:28.440 There's also a smart home POB basically a home pod 0:02:28.480 --> 0:02:32.000 with a screen coming out next spring. This is going 0:02:32.080 --> 0:02:35.560 to have similar functionality to that device, without the conversational 0:02:35.600 --> 0:02:39.200 abilities and without the robotic arm. And they're developing a 0:02:39.200 --> 0:02:43.440 suite of home security in home automation products designed to 0:02:43.520 --> 0:02:46.440 rival what Amazon has been doing with a ring and 0:02:46.639 --> 0:02:49.040 Blink and what Google has been doing with Nest and 0:02:49.080 --> 0:02:52.760 other companies of course in the space include ADT and Roku. 0:02:54.440 --> 0:02:56.720 There is a software component, and that is Siri. 0:02:57.200 --> 0:03:01.239 You write about a lifelike Siri, sources describe it to 0:03:01.320 --> 0:03:02.079 you park. 0:03:02.600 --> 0:03:05.880 Well, the lifelike Siri is the ability to hold conversations, 0:03:06.240 --> 0:03:10.079 help you get things done, interject into conversations with other 0:03:10.200 --> 0:03:12.320 human beings as if it's another person in the room, 0:03:12.880 --> 0:03:15.560 very similar to what you're seeing on voice mode from Chat, 0:03:15.639 --> 0:03:19.079 GPT and from Gemini and some of these other LM 0:03:19.160 --> 0:03:22.880 based assistants. There's also a revamp next year to Siri 0:03:23.280 --> 0:03:26.079 on the iPhone, the iPad and the Mac that's coming. 0:03:26.160 --> 0:03:30.600 It's an underlying infrastructural change, but there's also a redesign, 0:03:30.760 --> 0:03:33.400 like a visual redesign to Siri coming as well to 0:03:33.440 --> 0:03:37.720 the iPhone and iPad on the home devices. Specifically, they're 0:03:37.760 --> 0:03:42.240 going to be creating a visual personality for Siri. Obviously Siri, 0:03:42.280 --> 0:03:45.320 obviously you heard it and you spoke to it. Now 0:03:45.320 --> 0:03:47.400 you're going to be able to see it too. If 0:03:47.400 --> 0:03:50.640 you remember Microsoft Clippy's Clippy from the nineties and the 0:03:50.640 --> 0:03:54.480 early two thousands in Microsoft Suite of Office apps, including Word, 0:03:54.960 --> 0:03:58.160 something similar to that. It floats around your display. You 0:03:58.160 --> 0:04:01.080 can interact with it at any time. They're actually trying 0:04:01.120 --> 0:04:04.760 to create a virtual character, either based on a memoji 0:04:05.320 --> 0:04:08.400 or the finder icon that's the filesystem logo that Apple's 0:04:08.440 --> 0:04:10.280 used for years on the Mac. 0:04:11.200 --> 0:04:16.000 Very briefly mark the Blood Oxygen the workaround versus Messimo's 0:04:16.040 --> 0:04:16.920 fight on Apple. 0:04:17.440 --> 0:04:18.760 Is it going to make much of an effect in 0:04:18.760 --> 0:04:19.160 the long term? 0:04:20.160 --> 0:04:23.560 You know, it's interesting because this workaround is, like you said, 0:04:23.600 --> 0:04:26.000 a real workaround. You're not going to have the blood 0:04:26.040 --> 0:04:29.560 Oxygen app like you had before on the Apple Watch. Instead, 0:04:29.600 --> 0:04:32.640 the sensors will be used and that will allow you 0:04:32.720 --> 0:04:35.680 to read that data on the phone itself through the 0:04:35.720 --> 0:04:36.200 health app. 0:04:36.279 --> 0:04:38.040 So it took them two years. 0:04:38.320 --> 0:04:40.599 The US Customs Agency finally allowed them to do this 0:04:40.640 --> 0:04:43.320 workaround and it comes at a pretty opportune time. In 0:04:43.360 --> 0:04:45.640 a few weeks they'll be announcing the next Apple watches, 0:04:45.920 --> 0:04:47.080 and now they'll be able. 0:04:46.880 --> 0:04:50.040 To market in the US. Blood oxygen saturation tracking is 0:04:50.080 --> 0:04:50.520 part of that. 0:04:51.880 --> 0:04:55.160 Bloomberg's Mark Guerman, who leads our coverage of consumer electrolics 0:04:55.160 --> 0:04:57.839 and broke detail on what happens next on Apple for 0:04:57.920 --> 0:05:01.000 more and what Apple's doing than I's web Bush joins us. 0:05:01.200 --> 0:05:01.360 Look. 0:05:01.680 --> 0:05:04.039 Mark's reporting moves the needle right. We know that this 0:05:04.160 --> 0:05:07.760 tabletop robot will be the centerpiece on the hardware side. 0:05:08.000 --> 0:05:11.159 We know that Siri will be made more lifelike. Has 0:05:11.200 --> 0:05:14.039 this changed things for you, Dan in what you're modeling 0:05:14.040 --> 0:05:17.400 for Apple? And to kind of comeback that many think 0:05:17.400 --> 0:05:21.000 that Apple needs to have in the AI domain, Look. 0:05:21.000 --> 0:05:23.919 In their AI strategy has been a disaster, and you 0:05:23.920 --> 0:05:27.280 know it's if you look at every other big tech company, 0:05:28.000 --> 0:05:31.840 you know Apple is massively behind. And I think when 0:05:31.839 --> 0:05:34.920 you look at this as a potential opportunity, I think 0:05:35.320 --> 0:05:39.760 Street is basically shrugged the shoulders. I mean robotics, Apple's 0:05:39.800 --> 0:05:42.880 going to come out in another device. Look look it 0:05:43.000 --> 0:05:46.359 up in AI Bok, a Microsoft book and meta. I 0:05:46.360 --> 0:05:48.960 mean it speaks to our view right now, it's an 0:05:49.080 --> 0:05:54.280 F one race and Manza. It's all passing thereby an 0:05:54.320 --> 0:05:58.719 Apple and cooker watch from a park bench drinking a cappuccino. 0:06:00.600 --> 0:06:03.640 That's actually a really interesting I think maybe veiled dan 0:06:03.680 --> 0:06:08.480 reference to WWDC, which opened up with the F one sequence. 0:06:08.520 --> 0:06:11.520 If you remember, then that puts the emphasis back on Siri. 0:06:12.279 --> 0:06:14.599 What how much better does Siri need to be then? 0:06:14.880 --> 0:06:17.080 If it is to be a tool use daily by 0:06:17.120 --> 0:06:19.159 technology users around the world in the same way that 0:06:19.200 --> 0:06:20.920 chat GPT is an Apple on my iPhone? 0:06:21.839 --> 0:06:25.719 Look, what's just call it? It is like Siri. 0:06:26.160 --> 0:06:29.400 Nothing's going to happen internally, I mean internally, this has 0:06:29.440 --> 0:06:32.159 been a disaster. Right If you go back to WWDC, 0:06:32.839 --> 0:06:35.480 it felt like Michael J. Fox back to the future 0:06:35.520 --> 0:06:39.280 moment in twenty sixteen. They continue to promise what's on 0:06:39.320 --> 0:06:42.520 the come, what's next? They're going to have to do 0:06:42.560 --> 0:06:45.080 an acquisition. I mean, look, it's just it's the reality 0:06:45.120 --> 0:06:49.000 of the situation. It's not happening internally, and there's no 0:06:49.040 --> 0:06:53.240 one on the street that believes any innovation is coming 0:06:53.279 --> 0:06:56.720 out of Apple when it comes to AI organically. 0:06:57.080 --> 0:07:00.040 Dan, you still got an outperform and a two and 0:07:00.160 --> 0:07:01.920 seventy dollars price target on Apple. 0:07:02.279 --> 0:07:03.520 You're sounding way more. 0:07:03.480 --> 0:07:07.000 Cautious than your money perspective is leading us. 0:07:07.760 --> 0:07:11.080 Yeah, look to get to two seventies. No, AI, this 0:07:11.160 --> 0:07:13.040 is a stock that's going to move higher. And even 0:07:13.120 --> 0:07:16.440 saw what happened last week with the tariffs, Cook obviously 0:07:16.440 --> 0:07:19.360 playing nice in the sandbox with Trump, that was a 0:07:19.400 --> 0:07:21.160 huge relief and the stocks had to move. And I 0:07:21.200 --> 0:07:23.160 think there's a stock that could go to two seventy 0:07:23.240 --> 0:07:26.920 or potentially two eighty without AI. But for this to 0:07:27.000 --> 0:07:30.680 be a three point fifty four hundred, four hundred and 0:07:30.680 --> 0:07:35.840 fifty dollars stock, it's AI and it's not happening internally. 0:07:36.640 --> 0:07:39.920 And I think that's the problem that the street has 0:07:40.080 --> 0:07:43.720 is that things like robotics next Gen or three thousand 0:07:43.720 --> 0:07:46.560 dollars buys to four thousand dollars. It's all about software 0:07:47.040 --> 0:07:50.600 and it comes down to like they need two essentially, 0:07:50.600 --> 0:07:53.560 and we've talked about perplexity. Other acquisitions are going to 0:07:53.640 --> 0:07:58.640 have to do. It's not happening internally. That's just the reality. 0:07:59.640 --> 0:08:02.240 What's interesting, Dan is the notes you have been putting out, 0:08:02.480 --> 0:08:05.239 for example today, have been more around. As you just said, 0:08:05.280 --> 0:08:08.520 there was a relief when Tim Cook was alongside President 0:08:08.560 --> 0:08:10.760 Trump last week. Well, this week it's all been about 0:08:10.800 --> 0:08:13.240 what President Trump has meant for in video of AMD 0:08:13.440 --> 0:08:16.240 and for paying to play. What do you make of 0:08:16.280 --> 0:08:18.760 the moves that we've seen and to gain access in China. 0:08:19.640 --> 0:08:23.360 Look, it speaks to I mean, you know a godfather quote, right, 0:08:23.400 --> 0:08:25.760 I mean it's a deal you can't refuse. And I 0:08:25.800 --> 0:08:29.480 think the reality is is that big tech CEOs are 0:08:29.560 --> 0:08:31.000 learning the new rules. 0:08:30.680 --> 0:08:31.120 Of the game. 0:08:31.280 --> 0:08:34.200 Now, of course it's wed godfather of AI, Jensen and video. 0:08:34.679 --> 0:08:39.160 They need to do with fifteen percent, it's breadcrumbs relative 0:08:39.200 --> 0:08:41.520 to getting into a China market. They can't give this 0:08:41.679 --> 0:08:44.480 the fall in a silver platter, and I viewed as 0:08:44.559 --> 0:08:47.120 bullish and it's going to put more fuel in the 0:08:47.160 --> 0:08:48.520 engine of this AI round. 0:08:49.800 --> 0:08:51.040 Dan super quickly. 0:08:51.480 --> 0:08:54.360 We broke the story last week that Dojo is no 0:08:54.480 --> 0:08:56.959 more at Tesla, and Musk has come out on x 0:08:57.040 --> 0:08:59.600 ray and kind of explained it the focus on AI 0:08:59.640 --> 0:09:00.679 five and a six. 0:09:01.040 --> 0:09:02.719 But how did you react to that. I don't think 0:09:02.760 --> 0:09:03.400 I saw a note. 0:09:03.679 --> 0:09:05.960 And what do you think about the stop gap between 0:09:06.000 --> 0:09:07.760 those generations of customs silicon? 0:09:08.559 --> 0:09:11.120 Yeah, that that's a great story that you guys, Broke, 0:09:11.200 --> 0:09:13.440 I mean I view it as this is to me, 0:09:13.520 --> 0:09:16.240 it's more certainty that Xai. They're going to have a 0:09:16.320 --> 0:09:19.920 massive investment XAI. That'll come at the shareholder meeting, but 0:09:20.040 --> 0:09:22.320 it speaks to our view. It's why Tesla stocklifting. I 0:09:22.320 --> 0:09:25.000 think more and more recognizing this is going to be 0:09:25.000 --> 0:09:28.040 a holistic strategy Tesla Xai. 0:09:28.040 --> 0:09:30.040 It's all about autonomous and robotics. 0:09:30.080 --> 0:09:32.280 And I think that was a view you kind of 0:09:32.280 --> 0:09:34.880 read through the tea leaves that that was my view. 0:09:35.920 --> 0:09:38.440 That nice web Bush. Great to catch up with you. 0:09:38.559 --> 0:09:38.960 Thank you. 0:09:39.080 --> 0:09:42.960 Meanwhile, coming up, ciscosio Chuck Robbins joining us to discuss 0:09:42.960 --> 0:09:45.520 the company's earnings, the state of AI infrastructure demand. 0:09:46.280 --> 0:09:47.320 This is Bloomberg Tech. 0:10:00.080 --> 0:10:03.160 So Cisco shares it down about one point two one 0:10:03.160 --> 0:10:05.079 point three percent. They've made an effort earlier in the 0:10:05.120 --> 0:10:07.680 session to kind of bounce back. We got this full 0:10:07.760 --> 0:10:11.000 year revenue outlook for fiscal twenty six. Some analysts felt 0:10:11.040 --> 0:10:13.680 it was a little cautious, but we're seeing AI infrastructure 0:10:13.800 --> 0:10:17.000 orders pick up. Delighted to say that we're joined now 0:10:17.160 --> 0:10:20.560 by Cisco CEO Chuck Robins, and actually, Chuck, I'm going 0:10:20.640 --> 0:10:22.320 to ask you something that I felt like the analyst 0:10:22.360 --> 0:10:25.120 community didn't really get to, and that is that there 0:10:25.200 --> 0:10:30.280 is this big products refresh happening mere term overcoming years. 0:10:30.320 --> 0:10:32.640 And I feel like you've been trying to talk about 0:10:32.679 --> 0:10:35.839 Cisco as a platform offering for a while and if 0:10:35.840 --> 0:10:38.319 we look at that fiscal twenty six outlook is that 0:10:38.440 --> 0:10:41.679 baked into that where Cisco is a platform offering and 0:10:41.720 --> 0:10:44.079 you folded security into it. That's kind of what I 0:10:44.120 --> 0:10:45.080 think people want to know. 0:10:46.240 --> 0:10:48.200 Yes, well, first of all, thanks for having me, and 0:10:48.400 --> 0:10:50.600 I do I want to thank the team and all 0:10:50.920 --> 0:10:53.400 of the Cisco folks for just a great year. We 0:10:54.320 --> 0:10:56.880 obviously had good order growth in Q four we had 0:10:56.920 --> 0:11:01.679 the great performance in the AI infrastructure order. We actually 0:11:02.280 --> 0:11:05.439 reported that we had taken down a approximately a billion 0:11:05.440 --> 0:11:07.640 dollars of revenue from those orders, which was something that 0:11:07.679 --> 0:11:10.560 everybody wanted to talk about. We talked through how we 0:11:10.720 --> 0:11:14.160 filled the progress kicking in on security, and then to 0:11:14.200 --> 0:11:17.320 your point, this product refresh cycle that we are beginning 0:11:18.400 --> 0:11:24.040 will happen over years, and honestly, we just turned on orderability. 0:11:24.640 --> 0:11:27.600 Large customers take a lot of time to evaluate put 0:11:27.600 --> 0:11:28.920 these things in labs before they. 0:11:28.880 --> 0:11:30.360 Put it in their critical infrastructure. 0:11:30.679 --> 0:11:32.800 But the points you make about the platform is really 0:11:32.880 --> 0:11:38.120 important because as we get into agentic AI, with the 0:11:38.160 --> 0:11:42.559 low latency constant communication that's going to occur, we're going 0:11:42.600 --> 0:11:44.920 to have to do security in the network. 0:11:45.360 --> 0:11:46.680 There is no other alternative. 0:11:46.720 --> 0:11:49.920 You cannot introduce latency by sending it to a security appliance, 0:11:50.480 --> 0:11:53.040 and we are the only company that has both networking 0:11:53.160 --> 0:11:55.920 and security technology to fuse it together to create that 0:11:55.960 --> 0:11:57.400 platform effect that you're describing. 0:11:59.200 --> 0:12:03.760 AI is a double edged sword, Chuck, It's margin dilutive. 0:12:05.040 --> 0:12:06.160 How do you think about that? 0:12:07.600 --> 0:12:09.600 Well, I think we have always had a portfolio of 0:12:09.640 --> 0:12:12.880 products that had various margin profiles. I mean, we had 0:12:12.880 --> 0:12:15.120 a point in our history where the Tolco and the 0:12:15.160 --> 0:12:17.520 service provider world was as much as thirty five thirty 0:12:17.559 --> 0:12:19.280 six percent of our business, and that was a different 0:12:19.280 --> 0:12:23.200 margin profile than the enterprise and so we just manage 0:12:23.200 --> 0:12:25.080 it the same way we have all along. 0:12:25.200 --> 0:12:26.800 So I'm not too worried about that. 0:12:27.520 --> 0:12:31.120 Meanwhile, Chuck, that massive opportunity ahead that you articulate with 0:12:31.200 --> 0:12:34.320 AI infrastructure, that bringing in of two billion of orders, 0:12:34.360 --> 0:12:37.640 the billion dollars of revenue already. Is it the platform 0:12:37.679 --> 0:12:40.320 offering that helps you push out and fend against some 0:12:40.360 --> 0:12:42.240 of the other competitors that want in on that. 0:12:42.360 --> 0:12:44.199 Of course HPE is trying to get in. You've got 0:12:44.200 --> 0:12:46.280 broad Com. Is that how you set yourself apart? 0:12:47.440 --> 0:12:49.319 Well, I think the key to remember with this is 0:12:49.360 --> 0:12:52.240 that it's networking systems and it's optics. That's primarily what 0:12:52.360 --> 0:12:56.200 we're selling for AI infrastructure, and there's really only three 0:12:56.600 --> 0:12:59.440 companies on the planet that can deliver the networking silicon 0:12:59.559 --> 0:13:03.040 that these customers require, and we're one of them. And so, 0:13:03.800 --> 0:13:06.040 you know, they're looking for low power requirements, they're looking 0:13:06.040 --> 0:13:09.319 for meeting their dates, they're looking for speed, bandwidth deployment, 0:13:09.800 --> 0:13:12.880 you know, and we're hitting that right now with them. 0:13:12.880 --> 0:13:15.400 And we've really built great relationships. If you if you 0:13:15.440 --> 0:13:16.959 go back five or six years ago, I had to 0:13:17.040 --> 0:13:19.600 try to convince people that we were rebuilding relationships here. 0:13:19.600 --> 0:13:21.920 And even if you go back fifty twelve fourteen months 0:13:21.960 --> 0:13:24.440 ago when we gave them the target of one billion 0:13:24.440 --> 0:13:25.840 dollars in orders, I think there were a lot of 0:13:25.840 --> 0:13:28.640 skeptics and the team actually delivered really well and we 0:13:28.679 --> 0:13:30.480 have great relationships with these customers. 0:13:30.559 --> 0:13:34.400 Now we are joined by Chuck Robins, Cisco CEO, and 0:13:34.760 --> 0:13:37.920 you know, you beat your things that previously others were 0:13:37.960 --> 0:13:40.800 cynical of, but the market moves with you. Many wanted 0:13:40.960 --> 0:13:44.600 even more in terms of your full year revenue guidance. 0:13:44.960 --> 0:13:46.360 Some are even going as far as to say that 0:13:46.400 --> 0:13:48.480 maybe you're suggesting a little bit of a cautious it 0:13:48.800 --> 0:13:50.360 spend for the next fiscal year. 0:13:50.520 --> 0:13:53.559 Do you abide by that, Chuck, No, we don't see that. 0:13:53.640 --> 0:13:56.560 We see we haven't seen any sort of slowdown at all. 0:13:57.000 --> 0:13:59.880 The only place we've seen that challenge, as has been reported, 0:14:00.160 --> 0:14:03.920 in US Federal our product order growth was seven percent. 0:14:03.960 --> 0:14:06.400 If you take out US Federal, we grew ten percent. 0:14:07.400 --> 0:14:09.839 And if you think about security, same thing. If we 0:14:09.880 --> 0:14:12.800 take out a US federal we grew double digits and 0:14:12.840 --> 0:14:16.440 security on orders. And I also talked about the fact 0:14:16.440 --> 0:14:18.120 that if we look at the fiscal year that we 0:14:18.240 --> 0:14:22.000 just entered, our US Federal team is actually forecasting a 0:14:22.040 --> 0:14:23.960 return to growth, so hopefully that won't be a head 0:14:23.960 --> 0:14:26.760 win in the next year. So we haven't seen anything meaningful, 0:14:26.800 --> 0:14:29.680 but we're also cognizant that we were operating in a 0:14:29.720 --> 0:14:31.720 pretty complex and dynamic environment. 0:14:33.480 --> 0:14:33.680 Chuck. 0:14:33.720 --> 0:14:37.240 We love to talk about the big projects on Bloomberg Tech, 0:14:37.280 --> 0:14:40.600 the big data center projects. Are there any specific examples 0:14:40.640 --> 0:14:43.120 of projects you're involved in that do you think are 0:14:43.120 --> 0:14:44.560 really needle moving for Cisco? 0:14:46.040 --> 0:14:49.560 Well, all the cloud providers are needle moving, and over 0:14:49.640 --> 0:14:51.960 time the neo cloud segment as well as the sovereign 0:14:52.000 --> 0:14:54.480 clouds we think are going to will be a big 0:14:54.480 --> 0:14:58.040 part of our business. Also we're just getting started in those. 0:14:58.440 --> 0:15:01.440 If I hit on a few of those. The sovereign 0:15:01.520 --> 0:15:04.920 AI data centers that we talked about in UAE as 0:15:04.960 --> 0:15:06.760 well as in Saudi are the early ones. We're having 0:15:06.760 --> 0:15:11.240 discussions in other Asian countries, in Africa, in Europe, you 0:15:11.280 --> 0:15:15.920 have this push for on prem sovereign applications, So from 0:15:16.000 --> 0:15:19.280 geopolitical perspective and a risk perspective, they want more control 0:15:19.320 --> 0:15:21.200 over the tech stack that they have in their countries. 0:15:21.200 --> 0:15:23.440 So that's more of a sovereign play, and we're one 0:15:23.480 --> 0:15:27.000 of the unique companies who can actually deliver say Splunk 0:15:27.040 --> 0:15:31.040 on prem or they're asking for WebEx on prem, which 0:15:31.080 --> 0:15:33.320 we can do so. And then the neo clouds we 0:15:33.360 --> 0:15:35.840 could talk about as well, but that's another emerging opportunity 0:15:35.840 --> 0:15:36.200 for US. 0:15:37.680 --> 0:15:42.200 I don't think many appreciate the scale of Cisco. Sometimes 0:15:43.000 --> 0:15:44.240 you've got a lot of credit by the way, on 0:15:44.240 --> 0:15:47.240 this program at least about how you've communicated tariff's impact. 0:15:47.600 --> 0:15:50.360 But you're basically one of the biggest and leading network 0:15:50.440 --> 0:15:54.960 chip producers globally, and this is an administration that wants 0:15:55.000 --> 0:15:57.920 more US manufacturing. So you have the volume of gear, 0:15:57.960 --> 0:16:00.360 you design your own chips, TSMC makes them for you. 0:16:00.400 --> 0:16:03.240 The economics kind of works in your favor. Have you 0:16:03.360 --> 0:16:06.360 made some commitment to do what this administration is trying 0:16:06.400 --> 0:16:09.800 to do, which is take that process that you've mastered, 0:16:10.000 --> 0:16:12.600 but just bring it to the States in some form. 0:16:13.520 --> 0:16:18.400 Well, I think that much like you know, Nvidia, AMDUS others, 0:16:18.800 --> 0:16:21.400 there are a lot of companies that actually rely on 0:16:21.480 --> 0:16:25.960 TSMC the for the fabrication of the silicon, and they've 0:16:26.000 --> 0:16:29.240 obviously made commitments on their side to actually build out 0:16:29.280 --> 0:16:32.280 capacity in the United States, and so we're happy to 0:16:32.320 --> 0:16:35.920 see that happening. The thing that people don't really realize 0:16:36.000 --> 0:16:39.480 is that we've maintained a US manufacturing footprint all along, 0:16:40.040 --> 0:16:42.560 and so we have a footprint in the US today 0:16:42.600 --> 0:16:46.760 that we can look at expanding. But I think it's 0:16:46.800 --> 0:16:49.800 just important for us right now to wait and see 0:16:49.800 --> 0:16:51.880 exactly where all this stuff lands. If you go back 0:16:51.880 --> 0:16:56.240 to twenty eighteen when the China tariffs hit. Our teams 0:16:56.000 --> 0:16:59.520 have made moves and mitigated roughly eighty percent or so 0:16:59.640 --> 0:17:02.760 of those, and so we just continue to look at 0:17:02.760 --> 0:17:04.639 these things as they come out, figure out what the 0:17:04.640 --> 0:17:06.399 best plan of action is, and then we act. 0:17:07.480 --> 0:17:11.200 When you think about planning ahead a business continuity, Chuck, 0:17:11.280 --> 0:17:14.159 when you see what's happened with MD and Video and 0:17:14.240 --> 0:17:16.600 the deal they've cut to access China, when you think 0:17:16.640 --> 0:17:20.000 about exporting more broadly, you're thinking that might come your 0:17:20.040 --> 0:17:21.560 way of pay to play in the future. 0:17:23.200 --> 0:17:24.200 I have no idea. 0:17:24.400 --> 0:17:26.399 We wake up every day and we try to figure 0:17:26.440 --> 0:17:29.320 out what's transpired and what's happening in the world, and 0:17:29.320 --> 0:17:32.760 how do we react to it. I've talked about over 0:17:32.800 --> 0:17:35.920 time that the current crop of CEOs in the United 0:17:35.960 --> 0:17:40.119 States have basically been operating in times of uncertainty or 0:17:40.160 --> 0:17:45.080 crisis or certainly very dynamic environments, and so we're all 0:17:45.160 --> 0:17:48.000 used to just dealing with whatever changes are coming our way. 0:17:49.200 --> 0:17:52.160 You know, there's the old saying that you can deal 0:17:52.200 --> 0:17:53.600 with the world as it is or how you'd like 0:17:53.640 --> 0:17:55.680 it to be, and just we just wake up and 0:17:56.080 --> 0:17:59.359 we deal with what comes at us and try to 0:17:59.400 --> 0:18:03.040 plan a accordingly, try to do scenario planning, but then 0:18:03.080 --> 0:18:03.480 deal with. 0:18:03.440 --> 0:18:04.000 It as it is. 0:18:04.760 --> 0:18:06.840 And when you're controlling your own destiny. You've been doing 0:18:06.880 --> 0:18:08.040 a bit of M and A and you mentioned the 0:18:08.080 --> 0:18:10.639 Sprung coffering and how that helps you access the likes 0:18:10.680 --> 0:18:13.159 of view Up for example. Anymore M and A on 0:18:13.160 --> 0:18:14.680 the rise in particularly when it comes to AI. 0:18:16.359 --> 0:18:20.760 We're always looking Our strategy hasn't changed. Obviously, valuations are 0:18:20.800 --> 0:18:25.000 quite frothy in that space. But if there's something that 0:18:25.320 --> 0:18:29.119 helps us advance our strategy more effectively, then we're always 0:18:29.119 --> 0:18:31.200 willing to take a look at it. I would say 0:18:31.240 --> 0:18:34.159 that M and A is not the strategy. We have 0:18:34.280 --> 0:18:38.160 our product strategy and our solution strategy for our customers, 0:18:38.200 --> 0:18:40.639 and if there's an acquisition that helps us accelerate that, 0:18:41.040 --> 0:18:43.280 then that's what we're really interested in. And you think 0:18:43.280 --> 0:18:46.520 about places like AI, infrastructure or security or observability. 0:18:46.520 --> 0:18:48.520 In those kind of areas, they're always interesting to us. 0:18:49.840 --> 0:18:53.639 Chuck, how's the relationship with Nvidia evolving since it was 0:18:53.680 --> 0:18:54.320 all announced? 0:18:55.400 --> 0:18:55.879 It's great. 0:18:56.600 --> 0:18:59.160 Our team and their team's execs had dinner last night 0:18:59.280 --> 0:19:04.720 and we're working on architectures for Neocloud architectures for the enterprise. 0:19:05.640 --> 0:19:08.840 We're working on go to market, joint go to market together. 0:19:09.640 --> 0:19:11.600 So I'd say it just continues to get stronger. And 0:19:11.800 --> 0:19:13.399 we're really on the front end now of a lot 0:19:13.440 --> 0:19:16.560 of the technology integrations that we've been working on, and 0:19:16.600 --> 0:19:19.919 we're on the front end of the real enterprise wave 0:19:20.160 --> 0:19:22.639 of this AI. If you think about it, it started 0:19:22.680 --> 0:19:25.240 in the back end networks of the cloud providers. 0:19:25.720 --> 0:19:26.240 It's moving. 0:19:26.280 --> 0:19:27.880 It's obviously going to have an impact on the front 0:19:27.920 --> 0:19:29.879 end networks, it's going to have an impact on the 0:19:29.960 --> 0:19:34.399 enterprise and even the telco business that we saw this quarter. 0:19:34.520 --> 0:19:37.119 We had telco and cable. Our orders were up greater 0:19:37.200 --> 0:19:40.040 than twenty percent, and a lot of that was attributed 0:19:40.080 --> 0:19:41.679 to their preparation for AI. 0:19:42.600 --> 0:19:49.520 Chuck Robins, Cisco CEO and Fantastic speak with you today, 0:19:52.160 --> 0:19:54.200 Time Now for Talking Tech and First Up and Video 0:19:54.240 --> 0:19:57.119 partner on HI. But it's expecting sales of its servers 0:19:57.160 --> 0:19:59.720 to more than double this quarter. The company sees one 0:19:59.760 --> 0:20:02.560 hundred seventy percent rise in revenue just from its AI service, 0:20:02.720 --> 0:20:05.720 but executives are warning look that consumer electronics business could 0:20:05.760 --> 0:20:09.480 shrink this year as it faces potential US tariffs plus 0:20:09.480 --> 0:20:12.280 Oracle is coming back. Jobs in its cloud unit are 0:20:12.280 --> 0:20:14.680 coming in the latest company to take steps to control 0:20:14.760 --> 0:20:18.159 costs amid heavy spending on AI infrastructure. Now, according to sources, 0:20:18.200 --> 0:20:19.800 more than one hundred and fifty jobs work cut in 0:20:19.800 --> 0:20:23.359 the Seattle area, which traditionally the unit's hub. Oracle said 0:20:23.440 --> 0:20:26.440 last year it was moving its headquarters to Nashville, and 0:20:26.520 --> 0:20:29.159 the company currently has more jobs listed in Tennessee and 0:20:29.359 --> 0:20:32.160