WEBVTT - Apple Scraps Its EV Plans and Google Tries to Fix Gemini 0:00:01.600 --> 0:00:05.280 From the Heart where Innovation, Money and power Collie in 0:00:05.360 --> 0:00:06.880 Silicon Valley, NBN. 0:00:07.200 --> 0:00:11.280 This is Bloomberg Technology with Caroline Hyde and Ed Love Love. 0:00:24.560 --> 0:00:27.680 I'm Paradine Heider Bloomberg's world headquarters in New York, ALANM. 0:00:27.800 --> 0:00:30.920 Ed Lovelow in San Francisco. This is Bloomberg Technology coming up. 0:00:30.960 --> 0:00:34.760 Apple, it scrats its EV ambitions after a decade long 0:00:34.800 --> 0:00:37.440 effort as the company focuses instead on AI. 0:00:37.920 --> 0:00:39.160 We'll have full coverage ahead. 0:00:39.840 --> 0:00:43.559 Plus Google CEO Sunderpitch Eye blasting the failures of the 0:00:43.560 --> 0:00:47.360 Gemini image generation feature as the company looks to remedy 0:00:47.400 --> 0:00:49.640 the situation. We have all of the details and. 0:00:49.560 --> 0:00:52.239 We sit down with the CEO of data automation firm Clavio. 0:00:52.440 --> 0:00:54.639 As a company reports earnings for the second times it's 0:00:54.680 --> 0:00:58.400 going public, and as they announced, guess what new AI products? 0:00:58.400 --> 0:00:59.920 All that and so much more coming up. 0:01:00.040 --> 0:01:02.320 So let's check in on these markets because there was 0:01:02.360 --> 0:01:04.640 a torrent of economic data, not much to catch the 0:01:04.640 --> 0:01:07.479 attention today. Mixed data means that we're currently off about 0:01:07.480 --> 0:01:09.560 four tens percent on the Nasdaq. As we really care 0:01:09.680 --> 0:01:13.800 about the PCEE number, the favored inflation data by the 0:01:13.800 --> 0:01:15.479 federal reserve that comes out tomorrow. 0:01:15.520 --> 0:01:16.240 All eyes on that. 0:01:16.319 --> 0:01:17.959 We see a little bit of a sell off ahead 0:01:17.959 --> 0:01:20.880 of that number Golden Dragon index over in China. Of course, 0:01:20.880 --> 0:01:23.000 this is the US traded version of some of these 0:01:23.040 --> 0:01:25.679 Chinese big names, down one and a half percent, so 0:01:25.800 --> 0:01:27.960 really some weakness coming over from what was a pretty 0:01:28.040 --> 0:01:30.160 ugly day in China trading. I'm looking at what's happening 0:01:30.160 --> 0:01:32.800 in the ten year yield, nothing burger, nothing really moving. 0:01:32.800 --> 0:01:35.560 We're off just about one basis point where there is action. 0:01:36.080 --> 0:01:38.200 And on the macro perspective of we're looking at one 0:01:38.240 --> 0:01:40.400 particular asset, claus A choice Bitcoin. 0:01:40.440 --> 0:01:41.440 Look at this one point. 0:01:41.280 --> 0:01:44.640 Seven point seven percent higher. We are encroaching on that 0:01:44.720 --> 0:01:48.480 all important sixty nine thousand dollars record level ed. We 0:01:48.600 --> 0:01:50.960 know the sixty one thousand has already been eclipsed. Why, 0:01:51.440 --> 0:01:54.600 good old supply demand dynamics. There's more demand from the ets. 0:01:54.600 --> 0:01:56.240 The supply side we know is going to be halved 0:01:56.280 --> 0:01:58.840 in terms of amount of bitcoins going to be mined 0:01:59.080 --> 0:02:01.600 come end of April. And of course, well not many 0:02:01.600 --> 0:02:03.240 holders are selling at the moment, but ed, what are 0:02:03.280 --> 0:02:03.680 you watching? 0:02:04.720 --> 0:02:10.320 One story Apple Apple is shutting down its car project 0:02:10.720 --> 0:02:14.880 after a decade of work. Full kudos to Bloomberg's Mark German. 0:02:15.200 --> 0:02:17.720 He's going to join us in just a few moments. 0:02:17.760 --> 0:02:20.200 He broke that story. But this is a two day chart. 0:02:20.560 --> 0:02:23.600 That is the moment that Mark broke the story. The 0:02:23.639 --> 0:02:26.080 stock would have been a little bit lower Tuesday, and 0:02:26.120 --> 0:02:28.240 look at the gain on it. Okay with flat now, 0:02:28.639 --> 0:02:33.000 But the reaction globally to this has been pretty profound. Actually, 0:02:33.280 --> 0:02:35.680 we know that some of the two thousand people working 0:02:35.720 --> 0:02:38.240 on the Apple car project will lose their job, some 0:02:38.280 --> 0:02:41.520 of them will be shifted into Apple's work on generative AI, 0:02:41.600 --> 0:02:45.880 according to Mark's reporting. But for me, this story was 0:02:45.919 --> 0:02:48.880 about ten years where Apple did not know what that 0:02:49.120 --> 0:02:53.400 end car product ev product, robotaxi product would eventually look like. 0:02:54.000 --> 0:02:57.040 And you've seen it all over social media overnight. In 0:02:57.040 --> 0:02:59.880 this morning, Caroline, it's the one thing everyone's talking about, 0:03:00.080 --> 0:03:01.200 a big backtrack. 0:03:02.160 --> 0:03:05.320 Well, they talked about it over that decod long process. 0:03:05.520 --> 0:03:07.680 Here's actually Tim Cook and what he had to say 0:03:07.680 --> 0:03:09.680 about the plans all the way back in twenty seventeen. 0:03:09.760 --> 0:03:10.280 Take a listen. 0:03:11.760 --> 0:03:14.200 We sort of see it as the mother of all 0:03:14.280 --> 0:03:19.880 AI projects. It's probably one of the most difficult AI projects. Actually, 0:03:20.280 --> 0:03:24.320 to work on. And so autonomy is something that's incredibly 0:03:25.200 --> 0:03:30.119 exciting for us, but we'll see where it takes. 0:03:29.960 --> 0:03:32.480 Is and Mark German joins us. 0:03:32.480 --> 0:03:35.480 Now, isn't that interesting the fact that Tim Cook talked 0:03:35.520 --> 0:03:38.720 to it as the mother of all AI projects and 0:03:38.800 --> 0:03:40.280 that's where the talent now goes. 0:03:40.600 --> 0:03:45.839 But to generative AI, it's certainly an AI project right 0:03:45.880 --> 0:03:48.440 at the very core of an autonomous self driving system 0:03:48.480 --> 0:03:54.640 as artificial intelligence using cloud, using onboard software, using onboard 0:03:54.680 --> 0:03:58.400 hardware to understand what the vehicle is, do live processing 0:03:58.840 --> 0:04:02.680 and make those decisions using an AI engine on behalf 0:04:02.800 --> 0:04:03.600 the user. 0:04:03.640 --> 0:04:06.480 Whether to stop, whether to make that turn, whether to 0:04:06.560 --> 0:04:10.120 change lanes, to understand the environment, to drive in the 0:04:10.200 --> 0:04:12.800 snow or drive into the rain. Right, those are all 0:04:12.840 --> 0:04:15.520 decisions that are made by an AI processor, And so 0:04:15.600 --> 0:04:19.520 clearly Apple does have some AI talent there that they're 0:04:19.560 --> 0:04:23.160 able to relocate to their other AI initiatives that have 0:04:23.240 --> 0:04:24.799 nothing to do with the car. 0:04:25.640 --> 0:04:28.440 Mark, let's go deep into the details that you reported. 0:04:28.680 --> 0:04:33.320 So there was a meeting held by two high level 0:04:33.320 --> 0:04:37.640 Apple executives where they informed the two thousand or so 0:04:38.360 --> 0:04:41.400 staff working on the Apple car project that it was 0:04:41.440 --> 0:04:43.040 being shut down. What else do we know. 0:04:44.480 --> 0:04:47.160 Yeah, there was a meeting Tuesday morning at ten am 0:04:47.279 --> 0:04:50.640 where Jeff Williams, Apple COO and Kevin Lynn Chappels, VP 0:04:50.760 --> 0:04:53.800 of Technology, who's been in charge of the car project 0:04:53.839 --> 0:04:57.400 known as Titan inside the company since twenty twenty one. 0:04:57.760 --> 0:05:00.400 They informed the team, like you said, the it would 0:05:00.440 --> 0:05:04.919 be winding down immediately. Really three main groups there. You 0:05:05.000 --> 0:05:07.960 have the hardware engineers. You know this is simplification, but 0:05:08.000 --> 0:05:10.440 you have the hardware side, you have the software side, 0:05:10.440 --> 0:05:12.960 and you have the AI side. So the AI side 0:05:12.960 --> 0:05:17.080 of the project will be shifting towards Apple's AI and 0:05:17.240 --> 0:05:21.120 mL division under John g and Andrea. The software side, 0:05:21.160 --> 0:05:24.719 most of those folks will be moved to Craig federigi's 0:05:24.800 --> 0:05:28.760 operating systems organization, and then the hardware team a lot 0:05:28.800 --> 0:05:31.760 of those people, unfortunately, are being laid off. It's one 0:05:31.760 --> 0:05:35.640 of the biggest layoffs, i'd say, in Apple's modern day 0:05:35.839 --> 0:05:42.400 history since certainly since Tim Cook became CEO in twenty eleven. 0:05:43.200 --> 0:05:45.359 And then some of the hardware engineers will have the 0:05:45.360 --> 0:05:49.120 opportunity to apply to other jobs within the company. Obviously 0:05:49.200 --> 0:05:52.000 Apple's a hardware company, and perhaps some of those people 0:05:52.040 --> 0:05:55.159 will find roles on other teams, whether that's for the iPhone, 0:05:55.680 --> 0:05:58.760 the Vision Pro, the Apple Watch, you name it. But 0:05:58.880 --> 0:06:03.280 this is a bombshell development for Apple. This is something 0:06:03.320 --> 0:06:06.039 that Apple just doesn't do, throwing in the towel on 0:06:06.120 --> 0:06:09.359 a major project in such a public fashion. You know, 0:06:09.400 --> 0:06:13.000 the Apple car started in twenty fourteen, ten years ago, 0:06:13.360 --> 0:06:16.120 and Apple is such a secret company, but everyone knows 0:06:16.160 --> 0:06:18.359 they've been working on this, so this has been a 0:06:18.360 --> 0:06:20.720 really public failure for them. 0:06:21.240 --> 0:06:25.880 Being Bo's Mark German, terrific reporting, impactful reporting. Thank you 0:06:25.880 --> 0:06:27.560 for joining us on the show. What does it mean 0:06:27.600 --> 0:06:29.680 for Apple? But what does it mean for the ev 0:06:29.839 --> 0:06:32.920 industry at large? Let's bring in Cities Global Head of 0:06:32.960 --> 0:06:36.960 Auto's Itai mcayley to get into what Apple winding down 0:06:37.000 --> 0:06:40.160 its electric car effort means for names like Tesla. You 0:06:40.160 --> 0:06:42.400 look at Tesla shares up two percent in the session 0:06:43.120 --> 0:06:46.839 it Your thesis seems to be that if this is 0:06:46.920 --> 0:06:50.680 good for anyone, Apple canceling its car project, it's good 0:06:50.720 --> 0:06:51.760 for Tesla. 0:06:51.800 --> 0:06:55.440 Why absolutely, Yeah, yeah, So you know we always thought 0:06:55.480 --> 0:06:58.320 that Apple would have been most likely to compete directly 0:06:58.440 --> 0:07:01.880 against Tesla, and too a lesser extent companies like GM 0:07:02.000 --> 0:07:04.520 and Ford. You know, a lot is changing with electric 0:07:04.800 --> 0:07:07.000 and software and autonomous of course, But one thing that 0:07:07.040 --> 0:07:09.280 we're learning, not just from this news but even other 0:07:09.320 --> 0:07:12.440 developments recently, is that the barriers to enter and succeed 0:07:12.480 --> 0:07:15.240 in scale in the EV and particularly also in the 0:07:15.240 --> 0:07:18.080 AV the autonomous side, are still pretty high. And so 0:07:18.080 --> 0:07:20.160 I think this is another data point kind of supporting 0:07:20.160 --> 0:07:22.680 that those barriers still do exist, and we think it 0:07:22.680 --> 0:07:25.360 does bold well competitively, maybe mostly in our coverage for 0:07:25.440 --> 0:07:27.640 Tesla and to a lesser extent, GM and Ford. 0:07:28.720 --> 0:07:32.600 It's how you lead auto's coverage at City as opposed 0:07:32.640 --> 0:07:35.280 to Apple. But what I always think about when I've 0:07:35.280 --> 0:07:37.240 covered this story of Mark over the last six years 0:07:37.320 --> 0:07:40.240 or so is like Apple is used to margins for 0:07:40.320 --> 0:07:43.320 consumer electronics, and even if you get to like Tesla 0:07:43.440 --> 0:07:47.760 level margins, it's not even close. Did you have any 0:07:47.760 --> 0:07:50.280 sense of what you think Apple was trying to get 0:07:50.280 --> 0:07:51.480 out of a car project? 0:07:52.360 --> 0:07:52.600 Sure? 0:07:52.640 --> 0:07:52.840 Yeah. 0:07:53.320 --> 0:07:56.160 Broadly for the industry, we see the biggest opportunity for 0:07:56.320 --> 0:08:00.440 higher margins is in software services and particularly around the economy. 0:08:00.720 --> 0:08:02.920 And if you look at the average automaker today in 0:08:02.960 --> 0:08:05.640 the US, we've estimated it from a lifetime revenue, a 0:08:05.680 --> 0:08:09.080 lifetime revenue of a car. Today, those automakers only generate 0:08:09.120 --> 0:08:12.080 maybe forty percent of the lifetime revenue of the car. 0:08:12.160 --> 0:08:14.760 There's no a whole other sixty percent out there that 0:08:14.800 --> 0:08:16.800 there tends to be much higher margin that you could 0:08:16.840 --> 0:08:20.840 begin to tackle with software services think about autonomous vehicle 0:08:20.840 --> 0:08:23.680 subscription models in the future, and so we do thee 0:08:23.680 --> 0:08:26.240 as part of our industry thesis that the future of 0:08:26.280 --> 0:08:29.040 this business model isn't just about selling a car, making 0:08:29.200 --> 0:08:31.160 a kind of money on the one time sale, but 0:08:31.280 --> 0:08:34.160 really thinking about the entire lifetime revenue that a vehicle 0:08:34.160 --> 0:08:37.480 can generate, plus incremental revenue from services you peer to 0:08:37.520 --> 0:08:42.960 peer sharing deliveries that really autonomous technology can unlock over time. 0:08:43.200 --> 0:08:45.480 But it is a difficult challenge. You seen a lot 0:08:45.520 --> 0:08:47.800 of companies, you know, kind of take longer to develop 0:08:47.880 --> 0:08:51.000 level three and level four technology. You could argue that, 0:08:51.080 --> 0:08:53.280 you know, Apple kind of shutting down that the program 0:08:53.679 --> 0:08:55.640 suggests that, you know, maybe more negative view on the 0:08:55.640 --> 0:08:58.160 long term potential. But then you could also argue that 0:08:58.200 --> 0:09:00.240 the companies who are kind of leading the way from 0:09:00.280 --> 0:09:04.199 level four will ultimately build much bigger competitive mode just 0:09:04.240 --> 0:09:07.200 because of how difficult it is to ultimately achieve that 0:09:07.320 --> 0:09:08.960 degree of technology and capability. 0:09:09.520 --> 0:09:12.560 What was so interesting was obviously the price point in 0:09:12.559 --> 0:09:14.480 which Apple was originally going to be targeting. I mean, 0:09:14.520 --> 0:09:16.800 there was talk of a one hundred thousand dollars car 0:09:17.120 --> 0:09:20.280 that immedia made me think of the BYD news earlier 0:09:20.280 --> 0:09:22.679 this week, that they're going to be having some supercar 0:09:23.040 --> 0:09:26.520 coming onto the market more than one hundred thousand dollars 0:09:26.720 --> 0:09:29.760 in terms of a price point. Is that where the 0:09:29.760 --> 0:09:32.560 competition now lies for a Tesla, for a FOURD, for 0:09:32.600 --> 0:09:36.160 a GM. It's not actually homegrown Apple, it's looking over 0:09:36.240 --> 0:09:37.480 what China is doing in a BYD. 0:09:39.200 --> 0:09:39.440 Broadly. 0:09:39.480 --> 0:09:40.920 Yeah, there's a lot a lot of competition, of course, 0:09:41.160 --> 0:09:43.640 broadly coming out of China. I think every automaker is 0:09:44.000 --> 0:09:48.040 keenly focused on it. There's different degrees of EP penetration 0:09:48.240 --> 0:09:51.000 around the world, the US of course being smaller, but 0:09:51.000 --> 0:09:52.840 we actually do need to think in the US more 0:09:52.880 --> 0:09:56.360 EV product particularly and more affordable price segments they have 0:09:56.480 --> 0:09:59.559 not yet been penetrated. It is going to be a 0:09:59.559 --> 0:10:03.079 competitive market going forward. Yeah, I do think that even 0:10:03.160 --> 0:10:06.440 with the slowdown today in ev adoption, of course, the 0:10:06.440 --> 0:10:08.640 competitive threats global, we are still quite there. I think 0:10:08.679 --> 0:10:11.360 automakers are certainly thinking about that, not only again when 0:10:11.400 --> 0:10:15.800 thinking about the EV platforms, but also incremental services revenue 0:10:15.840 --> 0:10:19.000 from autonomous and software of course being a big part 0:10:19.240 --> 0:10:21.960 of ultimately making the economics work, particularly at those lower 0:10:22.000 --> 0:10:22.560 price points. 0:10:23.160 --> 0:10:25.720 And this is where I suppose the starkness of the 0:10:25.800 --> 0:10:28.560 data is so raw. The fact that we're expecting an 0:10:28.600 --> 0:10:31.920 eleven percent increase in sales of evs in the US 0:10:31.960 --> 0:10:34.560 this year compared to a more than forty percent increase 0:10:34.640 --> 0:10:37.280 in the year of twenty twenty three. I mean, ultimately, 0:10:37.400 --> 0:10:40.920 is this the only way that these companies can distinguish themselves. 0:10:40.440 --> 0:10:40.920 Can survive. 0:10:40.960 --> 0:10:43.400 Perhaps to tap some of the talent that's about to 0:10:43.400 --> 0:10:45.920 be let go at Apple is by driving the services, 0:10:46.280 --> 0:10:48.679 because Apple's got car play. But obviously there's much more 0:10:48.720 --> 0:10:51.679 margin generation to be done some of the other auto sectors. 0:10:52.000 --> 0:10:55.160 Yeah, truly, all the above. Every auto company is trying 0:10:55.200 --> 0:10:59.160 to work the numbers to that creates some delays, frankly 0:10:59.240 --> 0:11:02.000 in new product introductions to make the P and L 0:11:02.040 --> 0:11:04.480 and unit economics work for EV's, but there's no question 0:11:04.559 --> 0:11:08.160 over time that software and services is key to towards 0:11:08.160 --> 0:11:11.480 making those economics even stronger and again unlocking longer term 0:11:11.520 --> 0:11:14.360 a lot of revenue opportunities I spoke about a bit before. 0:11:15.160 --> 0:11:17.280 But you know, in the US, we're not as negative 0:11:17.400 --> 0:11:20.319 on EV adoption as consensus is today. We actually think 0:11:20.320 --> 0:11:24.640 the US does need more product to drive better coverage, 0:11:24.640 --> 0:11:26.760 and we've seen a very uneven market in terms of 0:11:26.800 --> 0:11:29.520 the number of products today, and of course auto companies 0:11:29.520 --> 0:11:32.079 with evs, we've seen a very uneven market even when 0:11:32.080 --> 0:11:34.920 you look at the geographical distribution of electric vehicle sales 0:11:34.960 --> 0:11:36.880 in the US, and so you know, we think it 0:11:36.880 --> 0:11:38.720 will be slow and steady growth. There's not been a 0:11:38.800 --> 0:11:42.400 disruptive of course transition, which again is good for the 0:11:42.440 --> 0:11:45.320 so called legacy automakers. It sort of supports this notion 0:11:45.360 --> 0:11:47.160 we've been writing about about the sort of comeback of 0:11:47.200 --> 0:11:50.560 the legacy automakers in some degree. But ultimately, you know, 0:11:50.600 --> 0:11:53.240 EV's we still think are the future and we're done 0:11:53.320 --> 0:11:56.000 well and right. They're very compelling products and we think 0:11:56.000 --> 0:11:58.640 that you know, automakers are still going to be invecting 0:11:58.640 --> 0:12:00.080 pretty aggressively into them and. 0:12:00.080 --> 0:12:01.640 When the infrastructure is there to support it. 0:12:01.679 --> 0:12:05.400 To City Global Head of Auto Sector Ittai McCurley, it's 0:12:05.440 --> 0:12:06.520 so great to have you on the show. 0:12:06.559 --> 0:12:07.360 We appreciate it. 0:12:07.400 --> 0:12:09.599 Meanwhile, that there's more news coming out of Apple, in 0:12:09.640 --> 0:12:11.960 particular with the latest on allegations of the company has 0:12:12.000 --> 0:12:15.720 imposed software and hardware limitations on its iPhones and iPads 0:12:15.840 --> 0:12:19.360 that actually impede rivals from effectively competing. Now, representatives in 0:12:19.440 --> 0:12:22.080 the company met with the Justice Department last week in 0:12:22.120 --> 0:12:24.400 one is a final effort to persuade the agency not 0:12:24.640 --> 0:12:27.280 to file an antitrust suit against Apple. 0:12:27.400 --> 0:12:29.719 It's all according to sources, the suit is expected to 0:12:29.760 --> 0:12:31.520 be coming in the next few weeks, lu likely by 0:12:31.520 --> 0:12:32.160 the end of March. 0:12:32.400 --> 0:12:41.920 So the sources say, we've got to check in on 0:12:42.000 --> 0:12:45.000 bitcoin today because we are training ever so close to 0:12:45.080 --> 0:12:46.640 the record high that we saw all the way back 0:12:46.640 --> 0:12:48.959 in November twenty twenty one. We're back at a sixty 0:12:49.000 --> 0:12:51.480 one thousand hand or remember sixty nine thousand is the 0:12:51.520 --> 0:12:53.280 record high that we saw for bitcoin. 0:12:53.040 --> 0:12:55.679 R up another seven point seven percent on the day. 0:12:56.280 --> 0:12:58.679 This is notable given risk assets are actually selling off 0:12:58.679 --> 0:13:00.839 more broadly today and tech hasn't got much love, and 0:13:00.880 --> 0:13:03.720 we're more focused on a federal reserve. But Bitcoin manages 0:13:03.760 --> 0:13:06.240 to push higher despite that. Let's stick in to risk 0:13:06.240 --> 0:13:09.160 assets across the board. IPEC Oscar desh Gaya is with 0:13:09.240 --> 0:13:11.679 US senior market analysts over at Swiss Code. We're going 0:13:11.720 --> 0:13:13.680 to be getting your tech markets feel out here and 0:13:13.720 --> 0:13:15.960 more broadly, I mean, when you're looking at a risk 0:13:15.960 --> 0:13:18.559 asset of bitcoin, is the story more about mass adoption, 0:13:18.720 --> 0:13:22.280 about that being a meaningful part of a general portfolio. 0:13:22.840 --> 0:13:25.119 As to why we're seeing a run up at the moment. 0:13:25.160 --> 0:13:25.960 Well exactly. 0:13:26.040 --> 0:13:29.439 I mean bitcoin has become like an important thing for 0:13:29.600 --> 0:13:32.400 the financial industry and we think that's got a great 0:13:32.480 --> 0:13:36.520 future in terms of finance and the centralized finance, and 0:13:36.720 --> 0:13:39.120 while the next couple of years and the fact that 0:13:39.200 --> 0:13:41.800 we also saw the ETF seeing the daylight is very 0:13:41.800 --> 0:13:45.400 important in terms of adoption. And what's interesting is if 0:13:45.400 --> 0:13:48.840 bitcoin could actually break that poor relation that it has 0:13:48.920 --> 0:13:51.760 with the traditional risk assets, then it would be just 0:13:52.000 --> 0:13:56.440 a very interesting asset that someone should hold in peers 0:13:56.559 --> 0:14:00.160 or her portfolio because it's just a different thing that 0:14:00.280 --> 0:14:03.679 is moving on different fundamentals and it's really a great 0:14:03.720 --> 0:14:06.520 alternative for portfolio diversification. 0:14:07.920 --> 0:14:12.199 Let's go to earning season. It's a game of artificial 0:14:12.240 --> 0:14:18.200 intelligence or artificial sweetener, because everyone's doing buybacks and if 0:14:18.240 --> 0:14:20.040 you look at like names like eBay. I think back 0:14:20.040 --> 0:14:23.720 to like Disney, Mercedes Benz. In Europe, everyone's doing buybacks 0:14:23.720 --> 0:14:27.600 and it kind of makes earning season seem like reallyuthoric. Well, 0:14:27.640 --> 0:14:28.640 how do you feel about that? 0:14:29.640 --> 0:14:32.800 Well, the earning season for big technology companies has been 0:14:32.960 --> 0:14:37.080 good beyond the buybacks, because if we're looking at Magnificent 0:14:37.200 --> 0:14:41.640 seven Socks, well they eat out some fifty five percent earnings. 0:14:41.240 --> 0:14:42.480 Growth and that's a big deal. 0:14:42.480 --> 0:14:44.560 And it's even a bigger deal when you think that 0:14:44.680 --> 0:14:47.520 expectations have gone just through the roof. So we think 0:14:47.560 --> 0:14:50.720 that there is something fundamentally positive there in terms of 0:14:51.000 --> 0:14:55.120 well development. And AI was obviously the major takeaway of 0:14:55.200 --> 0:14:58.560 this earning season because what we see is well AI 0:14:58.720 --> 0:15:02.440 investments are really pouring in, and when we talk with 0:15:02.560 --> 0:15:05.840 industry heads, well, we also realize that the investment decisions 0:15:05.880 --> 0:15:09.200 in AI seems to be well quicker than other investment 0:15:09.200 --> 0:15:14.160 decisions because in industries and companies seem to understand. 0:15:13.840 --> 0:15:15.760 Very well how AI is going to. 0:15:15.680 --> 0:15:19.560 Increase their productivity, decrease their costs, and improve their profit 0:15:19.600 --> 0:15:22.680 and their profit margins. And they also have quite a 0:15:22.720 --> 0:15:26.680 short payoff period. So investments are actually pouring in and 0:15:26.720 --> 0:15:30.280 that's absolutely helping the big technology sucks, especially those who 0:15:30.320 --> 0:15:33.240 are related to AI or just eat out some mind 0:15:33.240 --> 0:15:34.200 blowing results. 0:15:35.160 --> 0:15:39.480 The main beneficiary of this story continues to be in Vidia, right, 0:15:40.000 --> 0:15:44.600 the hardware provider of the underlying technology. The thesis you 0:15:44.760 --> 0:15:47.600 just outlined is more about the end use, so the 0:15:47.720 --> 0:15:51.400 end case. Do you still think it's important to stay 0:15:51.400 --> 0:15:55.080 closely aligned with names like Nvidia, AMD and some of 0:15:55.120 --> 0:15:56.080 the hyperscalers. 0:15:57.160 --> 0:15:59.600 Well, I think that yes, because those are the early 0:15:59.640 --> 0:16:03.040 commerce and they are the pillars of this AI revolution. 0:16:03.200 --> 0:16:06.040 What we see in AI today is a little bit 0:16:06.160 --> 0:16:10.840 like the digital version, the digital equivalent of the industrial revolution. 0:16:11.040 --> 0:16:15.280 So the potential is absolutely huge. Now, looking at the valiations, yes, 0:16:15.680 --> 0:16:19.800 Nvidia's valuation has gone through the roof, but not the 0:16:19.920 --> 0:16:23.360 valiations as of today are not that shocking because Nvidia's 0:16:23.480 --> 0:16:26.680 valuation in terms of PE ratio is lower today than 0:16:26.720 --> 0:16:31.080 it was at last year's twenty twenty three peak. So yes, 0:16:31.160 --> 0:16:34.480 the Nvidia stock price is going higher exponentially, but the 0:16:34.520 --> 0:16:37.960 earnings follow as well, So we think that Nvidia is 0:16:38.000 --> 0:16:41.640 a very interesting stock to hold in an AI portfolio. 0:16:41.680 --> 0:16:45.640 And zooming out of Nvidia, the global technology stocks are 0:16:45.720 --> 0:16:49.720 also trading at valiations which are lower than their twenty 0:16:49.880 --> 0:16:54.760 twenty one peak levels. So by historical terms, the valuations 0:16:54.760 --> 0:16:55.880 that we have today. 0:16:55.600 --> 0:16:57.120 Are not that shocking. 0:16:57.520 --> 0:17:01.240 Yeah, if you're looking at forward p well, the ratio 0:17:01.280 --> 0:17:04.080 there is like a thirty or thereabouts for an nvideo, 0:17:04.119 --> 0:17:06.480 It's only sixteen for a Qualcom. And I bring up 0:17:06.520 --> 0:17:09.280 Qualcom because actually the CEO of that company was joining 0:17:09.320 --> 0:17:11.639 Bloomberg a little bit earlier, and well guess what he 0:17:11.680 --> 0:17:12.399 was excited about. 0:17:12.400 --> 0:17:13.040 Just take a listen. 0:17:14.160 --> 0:17:18.800 Why we cannot predict when there's the next cycle. What 0:17:19.359 --> 0:17:22.199 I can tell you right now with precision is AI 0:17:22.480 --> 0:17:25.600 is changing how we interact, in how we use our phones, 0:17:26.040 --> 0:17:28.680 and if eventually, if consumers field that they need to 0:17:28.720 --> 0:17:33.320 have an aiphone, that will create this new growth momentum 0:17:33.320 --> 0:17:34.080 for the industry. 0:17:36.400 --> 0:17:38.720 We've of course heard Christiano i'm on talk a lot 0:17:38.800 --> 0:17:41.920 about AI applications and of course the AI use within 0:17:42.160 --> 0:17:46.159 our smart devices. But should we broaden our remit of 0:17:46.200 --> 0:17:49.520 investment opportunities at this point? Should we look less at 0:17:49.720 --> 0:17:52.440 perhaps the pixel shovels. Where are the applications you're looking 0:17:52.440 --> 0:17:53.440 at other industry groups? 0:17:53.520 --> 0:17:53.680 Now? 0:17:54.720 --> 0:17:56.960 Well, absolutely, I mean you can growth in this to 0:17:57.160 --> 0:18:00.399 chip makers and especially you can also growthen your vision 0:18:00.440 --> 0:18:06.400 to geographically other diversification opportunities, and for example, Japanese chip 0:18:06.400 --> 0:18:09.280 makers or Japanese companies in the chip sector are also 0:18:09.359 --> 0:18:13.560 looking very interesting to us in terms of in terms 0:18:13.600 --> 0:18:18.400 of good diversification opportunities while having an exposure to AI. Now, 0:18:18.560 --> 0:18:22.399 obviously other technology areas are very interesting as well because 0:18:22.480 --> 0:18:28.280 technology as by nature, is very adaptable to well AI revolutions. 0:18:28.320 --> 0:18:32.520 So every company it has to do that has potential 0:18:32.600 --> 0:18:36.280 to improve their products and services with AI are interesting 0:18:36.320 --> 0:18:39.040 to you know, having a AI proatfolio. 0:18:40.240 --> 0:18:42.719 Any guest that comes on the show and says something 0:18:42.800 --> 0:18:46.960 like technology by its very nature can come on the 0:18:46.960 --> 0:18:50.440 show again anytime. E Pepvsco. Desh Gaya, senior market analysts 0:18:50.440 --> 0:18:53.359 at Swisco, just quiit a terrific conversation. Thank you. Back 0:18:53.400 --> 0:18:56.439 to bitcoin really quickly, hitting sixty thousand dollars for the 0:18:56.440 --> 0:18:58.960 first time in more than two years. This comes as 0:18:59.080 --> 0:19:01.800 demand for the TOE and is widening, being not beyond 0:19:01.880 --> 0:19:05.880 committed digital assets enthusiasts. That's been the story. Meanwhile, US 0:19:05.960 --> 0:19:10.040 Senator Elizabeth Warren sat down with Bloomberg yesterday a wide 0:19:10.119 --> 0:19:12.879 ranging interview on the looming government shut down the path 0:19:12.920 --> 0:19:15.320 ahead for rates, but also cryptoregulation. 0:19:15.359 --> 0:19:22.000 Have listen, in our financial system, pretty much everybody follows 0:19:22.040 --> 0:19:25.439 the same set of rules. I'm talking banks and credit 0:19:25.560 --> 0:19:30.560 unions and credit card companies, gold traders and stockbrokers. 0:19:31.200 --> 0:19:32.840 Private equity now. 0:19:32.800 --> 0:19:38.320 Has to follow the rules precious metal dealers, Venmo, Western Union, 0:19:39.520 --> 0:19:43.520 but not crypto. My view of the world is same 0:19:43.600 --> 0:19:47.879 kind of activity, same common risk, should have the same regulation. 0:19:57.840 --> 0:20:00.800 Google, we have a response from the Sea Sono Pitchy 0:20:00.920 --> 0:20:03.760 sending an email to staff what has been, of course, 0:20:03.800 --> 0:20:07.399 the problematic responses from Google's Gemini AI engine, describing them 0:20:07.400 --> 0:20:11.000 as quote completely unacceptable, according to a note that teams 0:20:11.040 --> 0:20:14.040 are now working around the clock to rectify the issues. 0:20:14.520 --> 0:20:17.600 More, let's bring in Blue Meg, Seth Figermann and Seth. 0:20:18.480 --> 0:20:21.879 I mean to put it lightly problematic, but is this 0:20:22.119 --> 0:20:24.520 enough of this sort of like mere cull per moment, 0:20:24.680 --> 0:20:28.399 This is not good enough enough to for ultimately the 0:20:28.480 --> 0:20:29.040 damage to the. 0:20:29.040 --> 0:20:29.840 Brand that this is done. 0:20:30.240 --> 0:20:31.800 Yeah, I mean, at some level of the question is 0:20:32.000 --> 0:20:35.000 is this even a fixable problem? And it's very unclear 0:20:35.119 --> 0:20:36.960 right now that is. They're saying they're going to work 0:20:36.960 --> 0:20:39.560 around the clock, test out different prompts and try to 0:20:39.680 --> 0:20:41.560 weak out bad cases like what we saw over the 0:20:41.640 --> 0:20:44.840 last week. But the technology itself is fundamentally flawed. The 0:20:44.880 --> 0:20:47.439 data it's trained on, it's fundamentally biased, and they are 0:20:47.440 --> 0:20:50.119 attempting band aid measures here just to get the product 0:20:50.200 --> 0:20:52.360 out there. So even if they wait two weeks, three 0:20:52.400 --> 0:20:55.040