WEBVTT - IBM Doubles Down on AI, Palantir Falls Short of Analysts’ Expectations 0:00:02.759 --> 0:00:10.119 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:10.200 --> 0:00:15.920 where innovation, money and power collide in Silicon Valley and beyond. 0:00:16.320 --> 0:00:40.320 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:34.960 --> 0:00:37.599 Live from New York. This is Bloomberg Technology coming up. 0:00:37.640 --> 0:00:40.400 The CEO of IBM joins the show has Big Blue 0:00:40.440 --> 0:00:45.320 promises to help simplify and scale enterprise ai plas Paneteeric 0:00:45.440 --> 0:00:48.960 tumbles despite raising its revenue forecast, My earnings fail to 0:00:49.000 --> 0:00:52.400 live up to its current valuation, and Tesla under pressure 0:00:52.400 --> 0:00:57.000 as monthly sales continue falling hard across Europe. The first 0:00:57.240 --> 0:00:59.680 we check in on these markets on tenter hooks. We 0:00:59.720 --> 0:01:02.640 have the FED coming out tomorrow lightly holding rates, but 0:01:02.720 --> 0:01:05.560 could we get a more hawkish commentary coming out of 0:01:05.560 --> 0:01:08.280 the Fed chair. That's what Bloueberg Intelligence is expecting. Then, 0:01:08.319 --> 0:01:10.440 as that one hundred sevent tens percent, as we hear 0:01:10.720 --> 0:01:14.480 Treasury Secretary Scott Besson giving evidence on the hill as well, 0:01:14.680 --> 0:01:16.800 will get to analysis that in a moment, but we're 0:01:16.840 --> 0:01:19.280 still down by seven tens percent. More broadly, as we 0:01:19.280 --> 0:01:22.280 have anxiety around trade, move on to the individual movers, 0:01:22.440 --> 0:01:24.920 one of the key stocks that tugs us lower by 0:01:24.920 --> 0:01:27.680 twelve percent palented. Look, it's still the best performer on 0:01:27.720 --> 0:01:30.039 then as that one hundred so far this year, but 0:01:30.360 --> 0:01:33.360 the forward looking guidance is not enough to substantiate a 0:01:34.480 --> 0:01:37.280 extraordinary valuation. We'll dig into that stock a little bit 0:01:37.319 --> 0:01:40.399 later in the show. IBM currently trading flat, managing to 0:01:40.400 --> 0:01:42.280 outperform the rest of the market, as it has done 0:01:42.360 --> 0:01:44.479 so far this year, will get out to think their 0:01:44.520 --> 0:01:47.480 annual event where they unveil yet more software to basically 0:01:47.480 --> 0:01:51.760 align AI to make sense of all your AI agent offerings. 0:01:51.880 --> 0:01:54.240 Will have Arvin Krishner in but a moment. But first 0:01:54.400 --> 0:01:57.200 we go to US Treasury Secretary Scott Besson testifying in 0:01:57.200 --> 0:01:59.960 front of the House Appropriations Committee, speaking on efficiency, on 0:02:00.040 --> 0:02:02.600 budget cuts and the state of the US economy. Please 0:02:02.640 --> 0:02:05.360 to welcome Tyler Kendall joining from outside the White House. 0:02:05.640 --> 0:02:08.160 And it does seem to be pushing on those what's 0:02:08.200 --> 0:02:10.280 really been touched here so far? Tyler? 0:02:11.160 --> 0:02:13.720 Yeah, Hey, Caroline, Well, this is an oversight hearing, so 0:02:13.760 --> 0:02:16.200 it was widely expected that lawmakers were going to push 0:02:16.280 --> 0:02:18.720 him on dose. The Treasury Secretary said that it's the 0:02:18.800 --> 0:02:22.440 Department of Government Efficiency, not the Department of government extinction, 0:02:22.480 --> 0:02:24.840 and that he does intend to keep the treasury up 0:02:24.840 --> 0:02:26.920 and running to the best of his ability and with 0:02:27.000 --> 0:02:29.600 the most capabilities as possible, but did note that he 0:02:29.600 --> 0:02:32.760 has already cut two billion dollars from the IRS without 0:02:32.840 --> 0:02:35.840 any disruption. Beyond that, though, he did get into some 0:02:35.880 --> 0:02:39.600 tariff policy. Grilled by these lawmakers who want more clarity 0:02:39.600 --> 0:02:42.799 when it comes to what the trade strategy looks like ahead, 0:02:42.880 --> 0:02:44.959 he did say that as of now, the US has 0:02:45.120 --> 0:02:48.799 not engaged in negotiations with China, but reiterated what we've 0:02:48.840 --> 0:02:50.760 often heard from this administration, which is that we could 0:02:50.800 --> 0:02:54.520 expect some of those preliminary framework agreements to come as 0:02:54.600 --> 0:02:57.840 soon as this week. He also sort of outlined somewhat 0:02:57.840 --> 0:03:00.519 of a timeline here. He said that ultimate we could 0:03:00.520 --> 0:03:04.680 see eighty excuse me, eighty to ninety percent of our 0:03:04.720 --> 0:03:08.239 fifteen top trading partners clinch deals by the end of 0:03:08.280 --> 0:03:11.280 this year. When asked about the impacts that these tariffs 0:03:11.320 --> 0:03:13.519 can have on the economy, considering that Scott Bessett really 0:03:13.520 --> 0:03:15.480 has been at the forefront of trying to defend this 0:03:15.520 --> 0:03:18.760 administration's economic policies, he said he's not concerned about a 0:03:18.880 --> 0:03:21.000 US recession and that he's looking forward to the Q 0:03:21.120 --> 0:03:24.160 one GDP numbers being revised, but as Bloomberg Economics cautions, 0:03:24.160 --> 0:03:26.560 that doesn't necessarily mean that they are going to be 0:03:26.680 --> 0:03:29.079 revised up. And then lastly, I will end on this 0:03:29.200 --> 0:03:31.760 because this is very important here. We were wondering if 0:03:31.760 --> 0:03:34.200 we were going to get a firmer xitate a date 0:03:34.240 --> 0:03:37.040 when the US government could default on its debt, because 0:03:37.040 --> 0:03:39.560 that is seen as sort of that hardline number that 0:03:39.680 --> 0:03:42.680 lawmakers are up against to pass the reconciliation package that 0:03:42.720 --> 0:03:45.360 this administration is really banking on to get more cash 0:03:45.360 --> 0:03:47.960 into consumers pockets quickly. When it comes to their tax 0:03:48.000 --> 0:03:50.400 cut agenda, he said it's forthcoming, but that he cannot 0:03:50.400 --> 0:03:53.280 give lawmakers that updated number as of now because they 0:03:53.280 --> 0:03:56.040 are still sorting through the tax receipts from April. 0:03:56.320 --> 0:04:00.160 A macro perspective and Tyler Kendall, thanks so much. That's 0:04:00.200 --> 0:04:02.920 what's going on on the hill. Simultaneously, We've going to 0:04:02.920 --> 0:04:05.440 go to what's happening with IBM, and please to welcome 0:04:05.440 --> 0:04:07.520 the CEO of Vin Krishno, who is coming from the 0:04:07.520 --> 0:04:11.480 company's think conference and annual event. And Arvin, I'm just 0:04:11.760 --> 0:04:14.840 excited to hear really from you. The pace of change 0:04:14.840 --> 0:04:17.600 that's happening with agentic AI. I think you put out 0:04:17.600 --> 0:04:19.880 there that in three years time there's going to be 0:04:19.960 --> 0:04:23.960 one billion apps. It is so noisy, it is cluttered. 0:04:24.240 --> 0:04:27.159 How are you may managing to streamline it for your customers? 0:04:27.640 --> 0:04:31.479 Look first, I think that number is the really interesting number. 0:04:31.920 --> 0:04:35.839 A billion new applications using AI for a third of 0:04:35.880 --> 0:04:39.120 them using agentic AI. And the way that we are 0:04:39.160 --> 0:04:41.440 approaching it is, how do we make it easy for 0:04:41.480 --> 0:04:45.320 our customers leverage their own data, insert their own data 0:04:45.360 --> 0:04:49.040 into the models, and then leverage it to make the enterprise. 0:04:48.600 --> 0:04:49.560 A lot more productive. 0:04:50.040 --> 0:04:52.480 That's what we're after building, and that's what we've just 0:04:52.520 --> 0:04:57.800 announced with our watsonex orchestrate with agentic capabilities, including one 0:04:57.880 --> 0:05:02.240 hundred and fifty new agents, some from us and some 0:05:02.320 --> 0:05:03.160 from our partners. 0:05:03.960 --> 0:05:07.680 One hundred and fifty agents sounds an extraordinary number of it. 0:05:07.720 --> 0:05:09.880 And look, you've got a big book of business already 0:05:09.880 --> 0:05:12.880 when it comes to Generative AI six billion dollars in growing. 0:05:13.279 --> 0:05:16.440 But how much are you seeing the CEOs you serve 0:05:16.960 --> 0:05:20.360 pushing back on overwhelm. How are you managing to help 0:05:20.400 --> 0:05:23.599 them navigate what feels like, in some ways a less 0:05:23.640 --> 0:05:26.359 than productive environment for the amount that they're investing in 0:05:26.400 --> 0:05:27.040 generat to AI. 0:05:28.480 --> 0:05:32.200 Look, I think that what CEOs are concerned about is 0:05:32.200 --> 0:05:35.360 that now that you have gone the era of experimentation, 0:05:35.440 --> 0:05:36.000 as I call. 0:05:35.880 --> 0:05:38.600 It, is over. Now people are looking for business value 0:05:38.760 --> 0:05:39.320 on AI. 0:05:40.200 --> 0:05:43.400 As they're doing that, they've discovered that about twenty five 0:05:43.440 --> 0:05:46.080 percent of the time these projects are paying off very 0:05:46.080 --> 0:05:48.960 well for them. So learn from that twenty five and 0:05:49.040 --> 0:05:51.480 then figure out what are they inhabitors and the other 0:05:51.600 --> 0:05:54.960 seventy five and take those out and those are invariably 0:05:55.360 --> 0:05:57.000 this fragmentation. 0:05:56.400 --> 0:05:58.680 In the environment. So how do you have a more 0:05:58.720 --> 0:05:59.840 integrated environment. 0:06:00.200 --> 0:06:02.560 You've got to make sure that there is value in 0:06:02.600 --> 0:06:03.599 the AI projects. 0:06:03.880 --> 0:06:06.480 Don't just do an experiment and leave it on the shelf. 0:06:06.960 --> 0:06:09.719 You've got to scale it and deploy it across the enterprise. 0:06:10.160 --> 0:06:12.120 So how do you integrate? How do you create the 0:06:12.240 --> 0:06:15.440 right hybrid environment. That's what we're helping them with. And 0:06:15.480 --> 0:06:17.800 then we believe that twenty five we'll go all the 0:06:17.839 --> 0:06:20.560 way up to fifty or seventy five, at which point 0:06:20.560 --> 0:06:23.000 that's a great return for the CEOs. 0:06:23.680 --> 0:06:27.359 That software that you're unveiling, those consulting offerings that you 0:06:27.440 --> 0:06:29.880 continue to provide of in at the moment. How much 0:06:29.960 --> 0:06:32.640 is that bearing fruit in this current environment? How willing 0:06:32.640 --> 0:06:36.039 are these CEOs to experiment and move on from experimentation 0:06:36.120 --> 0:06:38.719 when we've got a really uncertain economy on our hands. 0:06:40.120 --> 0:06:43.880 Look, I'm a more of an optimist on the uses 0:06:43.960 --> 0:06:48.279 of technology in the current environment than a pessimist. And 0:06:48.320 --> 0:06:50.760 why do I say that? So when you have supply 0:06:50.880 --> 0:06:55.320 chain issues, you have cost issues, you have productivity issues, 0:06:55.760 --> 0:06:59.320 technology becomes an answer to help you scale the business 0:06:59.640 --> 0:07:02.320 without having to add a lot of physical cost into 0:07:02.360 --> 0:07:05.360 the business. So I find the appetite of the CEOs 0:07:05.400 --> 0:07:08.560 is quite high to spend on technology as long as 0:07:08.600 --> 0:07:11.040 they can see a return that is our college short 0:07:11.080 --> 0:07:15.000 to medium term meaning six months, twelve months, eighteen months. 0:07:15.320 --> 0:07:17.840 I find people leaning in very heavily, and I think 0:07:17.880 --> 0:07:21.360 that's why you see enterprise tech spending has remained robust 0:07:21.680 --> 0:07:24.760 despite all of these issues that could be talked about. 0:07:25.280 --> 0:07:28.920 What about government in the moment? Scott Beson getting grilled 0:07:28.960 --> 0:07:31.480 on a hill at the moment around DOGE and that 0:07:31.600 --> 0:07:33.880 has had implications for your own business. I think it's 0:07:33.920 --> 0:07:38.200 about fifteen contracts we understand having canceled, are more to come? 0:07:38.320 --> 0:07:41.160 Are you seeing an end to that cancelation process. 0:07:42.640 --> 0:07:47.000 I actually choose not to get worried about doors. I 0:07:47.040 --> 0:07:50.120 think that the areas where we have very robust contracts, 0:07:50.360 --> 0:07:54.080 when we're helping the VA process claims, we help the 0:07:54.120 --> 0:08:00.200 GSA on expense management, we help the DoD on payroll, 0:08:00.400 --> 0:08:02.960 those remained very robust, and I don't believe that those 0:08:03.000 --> 0:08:06.840 will come under any significant attack. Areas which do come 0:08:06.920 --> 0:08:09.880 under attack are much more what I call discretionary, or 0:08:09.960 --> 0:08:14.240 are much more time and material or labor augmentation based. 0:08:14.600 --> 0:08:17.440 Those may come under attack. It actually does not worry 0:08:17.440 --> 0:08:17.560 in me. 0:08:17.960 --> 0:08:20.320 I believe that even if those come under attack, there 0:08:20.360 --> 0:08:22.360 is more than enough offset from the areas that are 0:08:22.360 --> 0:08:24.160 more critical interesting. 0:08:24.200 --> 0:08:28.800 So basically any cancelations will be outweighed by business that 0:08:28.840 --> 0:08:31.239 you potentially can win. Within the government as well. 0:08:32.480 --> 0:08:36.720 I believe that from having talked to very senior members 0:08:36.720 --> 0:08:40.080 of the administration, there is a huge appetite to use 0:08:40.160 --> 0:08:43.760 technology to modernize government and to help make government itself 0:08:43.800 --> 0:08:48.600 more efficient. You can't achieve efficiency just based on cost cutting. 0:08:48.840 --> 0:08:51.920 You actually also will have to invest in technology, and 0:08:52.120 --> 0:08:55.000 I believe, and not just my belief from having spoken 0:08:55.040 --> 0:08:56.600 to them, they have an appetite to. 0:08:56.600 --> 0:09:00.000 Do that, I'll tell you where there's appetite traffic controls 0:09:00.600 --> 0:09:04.560 and Trump himself talking about maybe raythean IBM coming in 0:09:04.600 --> 0:09:06.839 to help solve some of the real anxieties we've got 0:09:06.880 --> 0:09:09.960 just a loss of radar over happening in Newark? Is 0:09:10.000 --> 0:09:12.320 that progressing? Ovin? And you able to share on how 0:09:12.360 --> 0:09:14.200 any sort of contract might shape up. 0:09:15.440 --> 0:09:18.680 Look, I don't want to talk about any specific contract 0:09:18.720 --> 0:09:21.960 or any specific agency, but I think what he just 0:09:22.000 --> 0:09:25.160 pointed out is a great example where technology will be 0:09:25.200 --> 0:09:29.920 part of the answer. Better integration, better computing capabilities, better 0:09:29.960 --> 0:09:33.839 communication capabilities, all of those will play a role because 0:09:33.920 --> 0:09:38.360 right now we are living on not exactly but essentially. 0:09:38.559 --> 0:09:41.640 I let's call it a slightly evolved system that was 0:09:41.679 --> 0:09:42.960 built in the nineteen seventies. 0:09:44.240 --> 0:09:48.200 Ovin. What's crucial about air traffic control is accuracy, And 0:09:48.240 --> 0:09:50.960 I know that's almost where everyone's eyes are when it 0:09:50.960 --> 0:09:53.440 comes to a GENTKI when it comes to generative AI 0:09:53.640 --> 0:09:56.560 is the risk of the underlying data being inaccurate and 0:09:56.600 --> 0:09:59.640 how that compounds. How are you managing to tackle that 0:09:59.679 --> 0:10:01.880 sort of area of anxiety and reality. 0:10:03.640 --> 0:10:05.120 I always break the problem down. 0:10:05.720 --> 0:10:09.040 The core of air traffic control has to be built 0:10:09.240 --> 0:10:12.520 on very precise data from pretty accurate data. You're not 0:10:12.559 --> 0:10:15.760 going to go use agentic ai to estimate where a 0:10:15.800 --> 0:10:18.680 plane is. That's going to be based on much more 0:10:19.280 --> 0:10:25.480 physics and hard engineering. Now, could agentic ai come in 0:10:25.960 --> 0:10:29.160 trying to optimize routes in worrying about how do you 0:10:29.200 --> 0:10:32.400 increase the total flow and capacity at an airport? Perhaps, 0:10:33.120 --> 0:10:35.079 but I'm using the word perhaps because there's a lot 0:10:35.080 --> 0:10:36.520 of careful work to be done there. 0:10:37.200 --> 0:10:38.520 But could agentic. 0:10:38.160 --> 0:10:42.760 Ai be used to process claims faster at Social Security 0:10:43.320 --> 0:10:47.439 or the VA? Absolutely, and then you make citizens happier, 0:10:47.720 --> 0:10:51.480 you deliver them services faster at a lower cost. That's 0:10:51.520 --> 0:10:53.320 where I would go first with agent KI. 0:10:54.200 --> 0:10:58.200 And in the private sector, they're looking for accuracy and 0:10:58.200 --> 0:11:00.520 that's something you're offering at the moment. How much is 0:11:00.800 --> 0:11:03.880 you're just seeing the adoption and the use and productive 0:11:04.000 --> 0:11:07.400 use of Agenda KI being limited by that underlying data 0:11:07.480 --> 0:11:09.600 right now? Or is that something that with streamlining already. 0:11:10.880 --> 0:11:14.960 I always advise our clients start with the use cases 0:11:15.520 --> 0:11:18.240 where you can live with some risk, where you do 0:11:18.400 --> 0:11:21.360 not need it to be one hundred percent accurate. So 0:11:21.440 --> 0:11:24.760 if you think about customer service, you think about end 0:11:24.760 --> 0:11:26.359 client experience. 0:11:27.000 --> 0:11:30.000 I think about our internal IT help lists. 0:11:30.400 --> 0:11:33.520 Those are all areas where when you were dealing with people, 0:11:34.040 --> 0:11:36.720 you actually had a ten or fifteen percent errorrate. So 0:11:36.760 --> 0:11:39.160 now that you deal with at AAI, you can actually 0:11:39.160 --> 0:11:42.120 have a lower errate than that, but maybe not perfect, 0:11:42.280 --> 0:11:43.360 but you can still live with it. 0:11:44.640 --> 0:11:47.599 Think is all about innovation. I'm looking at this the 0:11:47.760 --> 0:11:50.400 car behind you. I'm thinking about the way in which 0:11:50.400 --> 0:11:52.720 you're also pushing the agenda, not only when it comes 0:11:52.720 --> 0:11:54.959 to hybrid, when it comes to on prem When you 0:11:55.080 --> 0:11:58.360 think about the innovations you're making on mainframes but quantum 0:11:58.440 --> 0:12:00.520 A You're getting a lot of questions on con right now. 0:12:00.559 --> 0:12:03.840 Scott Beson wants the US to lead in AI but 0:12:03.960 --> 0:12:06.400 also in quantum computing. How is that making a difference 0:12:06.400 --> 0:12:07.800 in your business right now? 0:12:08.640 --> 0:12:11.360 So we are very very pleased with the innovation we 0:12:11.440 --> 0:12:13.880 brought out here. We talked about the AGENTAAI. We just 0:12:13.960 --> 0:12:17.400 mentioned the mainframe. We can do four hundred and fifty 0:12:18.000 --> 0:12:22.199 billion AI inferences per day on the latest mainframe we 0:12:22.360 --> 0:12:26.240 just announced this quarter, the Z seventeen. Think about using 0:12:26.240 --> 0:12:29.520 that in financial systems to help reduce fraud. So that's 0:12:29.520 --> 0:12:33.520 an incredible area of innovation on quantum. Part of the 0:12:33.559 --> 0:12:38.320 reason we announced the huge investment last year and into quantum, 0:12:38.520 --> 0:12:40.600 and we just brought out the quantum system to this 0:12:40.720 --> 0:12:44.080 year is because we are very excited where that will go. 0:12:44.720 --> 0:12:46.440 That's an area in which we believe. 0:12:46.240 --> 0:12:50.200 The US must and can lead on quantum computing, both 0:12:50.240 --> 0:12:54.400 for national security, but also for competitive advantage and for 0:12:54.440 --> 0:12:55.240 growing a business. 0:12:55.600 --> 0:12:57.920 And is that a competitive advantage continue to grow here 0:12:57.920 --> 0:13:00.360 in the United States. You've just unveiled a huge amount 0:13:00.360 --> 0:13:02.359 of investment into the US. 0:13:03.720 --> 0:13:07.600 Yes, So we put one hundred and fifty billion dollars 0:13:07.640 --> 0:13:10.680 here into the US because we believe that if I 0:13:10.720 --> 0:13:13.400 look at AI, I look at hybrid cloud, and I 0:13:13.440 --> 0:13:17.840 look at quantum coming, the growth opportunities are here. So 0:13:17.920 --> 0:13:20.920 we want to invest to take advantage of these opportunities. 0:13:21.640 --> 0:13:25.040 IBM Chairman, President CEO, Arvin Chrishna and live from Think 0:13:25.440 --> 0:13:29.520 We very much appreciate your time today. Now we're also 0:13:29.600 --> 0:13:32.280 watching shares of other providers. One of the partners that 0:13:32.720 --> 0:13:36.079 are insuffering right now is service Now and look it's 0:13:36.080 --> 0:13:39.720 flagship generative AI software product dubbed now Assists. Apparently he's 0:13:39.760 --> 0:13:42.000 going to hit one billion dollars an annual contracted business 0:13:42.040 --> 0:13:44.800 by the next year shares of by six ten percent, 0:13:45.000 --> 0:13:47.319 in line with the rest of the market. More Next, 0:13:47.360 --> 0:13:57.200 this is bloom Meil Technology. Let's get back to the 0:13:57.200 --> 0:13:59.439 state of the market. It's currently under pressure. We're still 0:13:59.480 --> 0:14:02.000 trying to know what the tariff impact is. US Treasury 0:14:02.040 --> 0:14:04.559 Secretary Scott Besson testifying in front of the House Appropriations 0:14:04.600 --> 0:14:07.360 Committee on the Hills, saying there are no signs of 0:14:07.440 --> 0:14:11.120 a recession. I please to welcome Janet mui OBBC Bruin Dolphin, 0:14:11.160 --> 0:14:13.720 head of Market Analysis and look for a tech investor 0:14:13.800 --> 0:14:17.920 right now. The anxiety has been around valuations of big 0:14:18.000 --> 0:14:20.480 tech in this current environment. Do you think that we 0:14:20.520 --> 0:14:22.920 are out of woods in a recessionary environment? Is that 0:14:23.040 --> 0:14:24.000 still too early to call? 0:14:25.680 --> 0:14:27.920 Hi, Caroline, thanks for having me. I think it's too 0:14:27.960 --> 0:14:29.920 early to call. But I think the base piece is 0:14:29.920 --> 0:14:32.680 no recession. I think we saw from the latest labor 0:14:32.720 --> 0:14:36.800 market data that the job market is pretty resilient, and 0:14:36.840 --> 0:14:38.400 I think it will take a lot more pain for 0:14:38.480 --> 0:14:41.160 us to go into recession. And I understand you know, 0:14:41.240 --> 0:14:45.400 tariff is creating a lot of anxiety and obviously a 0:14:45.440 --> 0:14:48.920 lot of paralyzers on trade flows and investment decisions, but 0:14:48.960 --> 0:14:51.560 they're also ob sets that are happening, for example of 0:14:51.840 --> 0:14:56.120 significantly law or crisis and potential tax package that is 0:14:56.160 --> 0:14:58.720 going to happen, and I think it's US things are 0:14:58.880 --> 0:15:02.360 looking okay as well. So I think it's premature to 0:15:02.480 --> 0:15:05.080 conclude that there would be a US recession, but obviously 0:15:05.160 --> 0:15:06.040 the stacks are high. 0:15:06.720 --> 0:15:09.320 Much has been said about the US as a government 0:15:10.040 --> 0:15:14.480 and it's buying or indeed pulling back on expenditure around dose. 0:15:14.560 --> 0:15:16.960 We just had the IBM CEO joined the show saying, look, 0:15:17.000 --> 0:15:19.920 he's more than confident that any new business within the 0:15:20.000 --> 0:15:22.560 US government he wins were offset for any contracts cut. 0:15:22.720 --> 0:15:25.760 You've got Palenteer today once ago, once again showing real 0:15:25.880 --> 0:15:29.280 resiliency in their US government offering how much are you 0:15:29.400 --> 0:15:31.880 seeing big tech being able to weather at the moment 0:15:32.200 --> 0:15:36.200 any dial back in government spending but also private sector spending. 0:15:37.960 --> 0:15:39.960 I think what we learned from the latest early AS 0:15:40.040 --> 0:15:43.480 results regarding the big tech is that the capas on 0:15:43.680 --> 0:15:46.560 AI remains unchanged, and in fact, I think there is 0:15:46.600 --> 0:15:50.000 still some pickup in that spending. So I think despite 0:15:50.080 --> 0:15:53.720 the distractions on tariff and the near Trump cyclical outlook, 0:15:53.800 --> 0:15:58.480 I think the longer term, AIV remains undebatable, and I 0:15:58.520 --> 0:16:01.800 think that that's one area where it can really drive productivity. 0:16:01.840 --> 0:16:03.640 And I think this is an area that corporates are 0:16:03.640 --> 0:16:07.320 still very much intended and happy. 0:16:07.040 --> 0:16:07.640 To spend on. 0:16:07.880 --> 0:16:10.000 So I think that long term train is intact, and 0:16:10.040 --> 0:16:14.120 I think despite the recent polls in some investment decisions, 0:16:14.160 --> 0:16:17.120 I think there's some area to be excited still about. 0:16:17.560 --> 0:16:20.960 And it's interesting that, of course that focus on spending 0:16:21.040 --> 0:16:24.320 had really benefited the hardware offering out there of Lane, 0:16:24.360 --> 0:16:26.480 or at least the chip design side, when it was 0:16:26.480 --> 0:16:29.320 twenty twenty four twenty twenty five, the outperformers have been 0:16:29.440 --> 0:16:32.040 software offerings such as IBM, which is up about thirty 0:16:32.080 --> 0:16:34.760 percent year to day, Palenteer that is still the best 0:16:34.760 --> 0:16:38.440 performer on the main benchmarks. Janet, Is it still about 0:16:38.440 --> 0:16:40.360 a software win right now or can you go back 0:16:40.400 --> 0:16:41.120 into the hardware. 0:16:42.960 --> 0:16:45.960 I think in any term, the software side will likely 0:16:46.480 --> 0:16:51.040 still outperform and be investor's preference because from now, if 0:16:51.080 --> 0:16:53.600 you think about it, it's a trade uncertainty that is 0:16:53.680 --> 0:16:57.880 top of mind, and there is some scale back of tariffs, 0:16:57.960 --> 0:17:00.680 but a big question mark remain, and so on that 0:17:00.840 --> 0:17:05.520 side you can argue that the software side is less impacted, right, 0:17:05.560 --> 0:17:08.680 so it's just logical to make that near time conclusion. 0:17:08.920 --> 0:17:10.120 But having said that, I think on the. 0:17:10.080 --> 0:17:12.560 Hardware side, I think the valuations of some of those 0:17:12.720 --> 0:17:16.520 key infrastructure and the chip design stops have come down, 0:17:16.560 --> 0:17:19.399 and I think it's really quite fair in value, to 0:17:19.440 --> 0:17:23.080 be honest. A lot of the concerns of overvaluation has. 0:17:23.040 --> 0:17:24.080 Come back down a lot. 0:17:24.119 --> 0:17:27.320 So it also presents great opportunities for long term investors 0:17:27.320 --> 0:17:29.200 because those are really great companies. 0:17:30.040 --> 0:17:32.440 I'm going to go global with you, Janet, because you're 0:17:32.480 --> 0:17:35.199 based over the pond right now, and I'm interested in 0:17:35.240 --> 0:17:39.040 how tech in Europe is performed because, ASML pin up 0:17:39.320 --> 0:17:42.159 for the industry, it's down a lot this year. Has 0:17:42.200 --> 0:17:44.600 there been buying off Europe and other regions. 0:17:46.160 --> 0:17:50.640 Overall speaking, I think the trend is that we're shifting 0:17:50.680 --> 0:17:54.120 a bit of more vile exposure from US to Europe. 0:17:54.320 --> 0:17:56.919 I think that's fair enough given what's happening at the moment, 0:17:57.720 --> 0:18:00.359 And I think for European tech, you know, for example, 0:18:00.400 --> 0:18:03.280 ASML that you mentioned those are global leaders or in 0:18:03.320 --> 0:18:08.840 fact has a monopoly on the machine that produces all 0:18:08.840 --> 0:18:12.560 these chips. So I think you know there are some 0:18:12.680 --> 0:18:16.240 concerns near term cyclical difficulty, but over the long term 0:18:16.240 --> 0:18:19.119 we're still pretty confident on these cycle leaders. 0:18:19.640 --> 0:18:21.840 And what's so interesting, Janet, with your perspective is you 0:18:21.840 --> 0:18:23.879 can go cross asset for us. This week's been a 0:18:23.880 --> 0:18:26.520 big week for corporate debt sales from big tech. When 0:18:26.560 --> 0:18:28.600 you think about Apple coming after its earnings, we had 0:18:28.640 --> 0:18:32.080 Google yes last week with first time in years. Have 0:18:32.200 --> 0:18:35.359 you seen more more appetite across the full breadth of 0:18:35.480 --> 0:18:37.400 assets when it comes to technology. 0:18:39.480 --> 0:18:42.680 Yeah, if you talk about corporate debt right right now, 0:18:42.800 --> 0:18:46.600 we have a preference on government bond over corporates are 0:18:46.680 --> 0:18:50.399 just purely on the bonus side. Or of course it 0:18:50.440 --> 0:18:55.240 really depends on specific sectors and adiosyncratic issues. But generally speaking, 0:18:55.280 --> 0:18:59.200 we don't think the corporate express reflect the potential recessionarist 0:18:59.280 --> 0:19:02.240 It's not based is for sure, but I think we 0:19:02.640 --> 0:19:05.679 just have to be prepared for either scenario, so we 0:19:05.880 --> 0:19:08.520 if we do go into recession or more economics sold out, 0:19:08.560 --> 0:19:11.159 I think upon bonds would be the place to be 0:19:11.280 --> 0:19:12.520 instead of corporate credit. 0:19:13.480 --> 0:19:16.640 We're coming to the tail end of earnings. We still 0:19:16.640 --> 0:19:19.960 got AMD arm You've of course got the juggernaut that 0:19:20.040 --> 0:19:22.600 is in video, But what are the catalysts for here 0:19:22.680 --> 0:19:24.760 on out at the moment? Is it fundamentals or is 0:19:24.800 --> 0:19:27.800 it still the breakthrough when it comes to tariffs into trade. 0:19:29.600 --> 0:19:32.520 I think for these individual stocks, the fundamentals will be 0:19:32.520 --> 0:19:36.359 absolutely important. I think so far as I mentioned, I 0:19:36.400 --> 0:19:40.000 think the AI capax remains intact, but I think there's 0:19:40.080 --> 0:19:44.600 concerns on post margins obviously, and also there are concerns 0:19:44.600 --> 0:19:47.800 from the Chinese competitors, etc. So I think we have 0:19:47.880 --> 0:19:50.800 to watch the fundamentals. But essentially, I think what if 0:19:50.840 --> 0:19:53.680 for macro investors will still be looking a lot at 0:19:53.920 --> 0:19:56.520 what the FED plans to do, for example, and watch 0:19:56.560 --> 0:19:59.400 out for really the need firm economic data. 0:19:59.160 --> 0:20:02.240 From the US and let's just go there to the FED. 0:20:02.400 --> 0:20:04.840 I mean, know you're expecting any sort of hawkishness or 0:20:05.119 --> 0:20:06.639 a dose of dovishness. 0:20:06.160 --> 0:20:09.920 Coming out of the FED tomorrow, Well, Jabona's I think 0:20:10.080 --> 0:20:12.600 they are likely to stay on hold, and I think 0:20:12.920 --> 0:20:16.359 we shouldn't be overly excited about the potential for shifting 0:20:16.359 --> 0:20:20.240 to more dervishness because I think given the inflation and 0:20:20.240 --> 0:20:23.879 particularly I think consumer inflation expectation is really high at 0:20:23.920 --> 0:20:26.800 the moment, and I think there is a high bar 0:20:27.080 --> 0:20:29.520 for the FED to switch to more dervishness, so I 0:20:29.960 --> 0:20:30.760 wouldn't bet on that. 0:20:30.880 --> 0:20:33.720 Yet, Joanna mu I'll be see Bruin Dolphin. Great to 0:20:33.720 --> 0:20:35.920 have some time with you, thank you very much. Now 0:20:35.960 --> 0:20:39.200 coming up, one of open AI's major stakeholders is the 0:20:39.200 --> 0:20:43.160 biggest holdout because the chatchypt maker tries to restructure. We're 0:20:43.160 --> 0:20:45.960 talking Microsoft next. Meanwhile, keep an eye on what's happening 0:20:46.000 --> 0:20:50.080 with Tesla shares. We have seen yet further sales pressure 0:20:50.240 --> 0:20:54.040 over in Europe. Disastrous numbers coming out of not just 0:20:54.200 --> 0:20:58.199 Sweden and some of the Nordic's Denmark, but also in 0:20:58.240 --> 0:21:00.520 the UK as it finally turns neggad as well. In 0:21:00.560 --> 0:21:02.600 April in a big way. We're off by almost two percent. 0:21:02.600 --> 0:21:19.040 This is technology time now for talking tech and first 0:21:19.080 --> 0:21:23.440 up Palenteer. While shares are really driven lower today, that's 0:21:23.480 --> 0:21:25.720 after its financial results failed to live up to investors 0:21:25.760 --> 0:21:28.840 loftiest expectations. Though the company bumped up it's twenty twenty 0:21:28.880 --> 0:21:31.600 five revenue forecast or about four billion dollars, representing growth 0:21:31.600 --> 0:21:34.560