1 00:00:02,480 --> 00:00:09,880 Speaker 1: Bloomberg Audio, Studios, Podcasts, radio news. 2 00:00:08,600 --> 00:00:13,280 Speaker 2: From Marhart where Innovation, money and power Collie in Silicon Valley. 3 00:00:13,440 --> 00:00:13,880 Speaker 3: NBN. 4 00:00:14,200 --> 00:00:17,720 Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed. 5 00:00:17,760 --> 00:00:36,080 Speaker 4: Ludlow live from San Francisco. This is Bloomberg Technology. Coming 6 00:00:36,120 --> 00:00:38,880 Speaker 4: up on the show, the latest on ARM and Qualcom 7 00:00:38,880 --> 00:00:42,360 Speaker 4: after a key tech license deal is canceled, and why 8 00:00:42,440 --> 00:00:45,640 Speaker 4: some analysts predict a tough road ahead for Tesla ahead 9 00:00:45,640 --> 00:00:48,400 Speaker 4: of its earnings report. Plus, We're live at B twenty 10 00:00:48,440 --> 00:00:51,720 Speaker 4: and South Paulo with a conversation with Google Brazil's president, 11 00:00:52,000 --> 00:00:53,040 Speaker 4: Fabio Coello. 12 00:00:53,479 --> 00:00:55,240 Speaker 5: Let's get to our top story. 13 00:00:55,360 --> 00:00:58,600 Speaker 4: Shares of chip maker Qualcom and chip design firm ARM 14 00:00:58,920 --> 00:01:02,880 Speaker 4: are both lower morning, Bloomberg reporting that ARM canceled a 15 00:01:03,000 --> 00:01:07,400 Speaker 4: license issued to its longtime partner Qualcom, potentially leaving the 16 00:01:07,480 --> 00:01:12,080 Speaker 4: leader in Android smartphone processes without key intellectual property to 17 00:01:12,160 --> 00:01:15,800 Speaker 4: design chips. The showdown could hit the finances of both 18 00:01:15,840 --> 00:01:18,559 Speaker 4: companies and comes ahead of a breach of contract trial 19 00:01:18,840 --> 00:01:23,360 Speaker 4: in December. That dispute centers around an acquisition Qualcom made 20 00:01:23,480 --> 00:01:27,039 Speaker 4: of another chip firm that was already licensing ARMED designs, 21 00:01:27,280 --> 00:01:31,280 Speaker 4: and those blueprints then passing on to Qualcomm. Bloomberg Intelligence 22 00:01:31,319 --> 00:01:35,200 Speaker 4: senior chip analyst Counjan Sabanni has published his React research 23 00:01:35,280 --> 00:01:39,839 Speaker 4: with colleagues in response to that licensed cancelation and joins 24 00:01:39,920 --> 00:01:42,640 Speaker 4: us on set in San Francisco. Let's start with your 25 00:01:42,680 --> 00:01:46,720 Speaker 4: reaction the news with significant overnight investors do not like it. 26 00:01:46,840 --> 00:01:50,120 Speaker 4: Clearly the timing is a surprise. What do you make 27 00:01:50,120 --> 00:01:50,360 Speaker 4: of it? 28 00:01:50,760 --> 00:01:53,200 Speaker 6: I mean the timing of the notice for the December 29 00:01:53,240 --> 00:01:55,920 Speaker 6: sixteen trial, which is almost two months of This doesn't 30 00:01:55,960 --> 00:01:58,480 Speaker 6: seem like a coincidence to us. This seems as a 31 00:01:58,520 --> 00:02:01,880 Speaker 6: pressure tactic for arm on Qualcom. But bring this to 32 00:02:01,920 --> 00:02:04,040 Speaker 6: a settlement before even the trial begins. 33 00:02:04,360 --> 00:02:09,440 Speaker 4: This is a technology story, and historically Quialdcom is used 34 00:02:09,600 --> 00:02:13,000 Speaker 4: armed designs for its chips until this week when it 35 00:02:13,000 --> 00:02:18,040 Speaker 4: announced its latest generation processes which relate to that acquisition. 36 00:02:18,160 --> 00:02:19,639 Speaker 5: It's a company called Nuvia. 37 00:02:19,720 --> 00:02:24,560 Speaker 4: I spoke to the Qualcom CEO, Carsiano Amon yesterday prior 38 00:02:24,600 --> 00:02:25,639 Speaker 4: to this news coming out. 39 00:02:25,680 --> 00:02:26,480 Speaker 5: You're aware of that. 40 00:02:26,720 --> 00:02:29,200 Speaker 4: Let's just very quickly listen to what he said about 41 00:02:29,440 --> 00:02:31,720 Speaker 4: the company's technology strategy. 42 00:02:32,560 --> 00:02:35,640 Speaker 2: So we went from fault took course to the BC's 43 00:02:36,120 --> 00:02:39,200 Speaker 2: and now industrial and that has been part of a 44 00:02:39,240 --> 00:02:43,240 Speaker 2: strategy we did all organically. With some of the small acquisitions, 45 00:02:43,440 --> 00:02:46,839 Speaker 2: we feel we have a very competitive roadmap and we're 46 00:02:46,840 --> 00:02:50,200 Speaker 2: thinking about the new what is the new innovation that 47 00:02:50,320 --> 00:02:52,040 Speaker 2: is coming through those markets. 48 00:02:53,919 --> 00:02:57,840 Speaker 4: The acquisition he's referencing there was Nuvia. Just explain the 49 00:02:57,880 --> 00:03:01,240 Speaker 4: basics of that deal and now why the timing of 50 00:03:01,280 --> 00:03:03,160 Speaker 4: this piece of news is so significant. 51 00:03:03,400 --> 00:03:06,240 Speaker 6: So Nuvia designs were based on ARM architecture and they 52 00:03:06,280 --> 00:03:10,919 Speaker 6: had a license with ARM. When Qualcom acquired Nuvia. ARM 53 00:03:11,639 --> 00:03:14,040 Speaker 6: issue what that the license was on a much lower 54 00:03:14,120 --> 00:03:16,799 Speaker 6: rate than what it had with Qualcomm. Now, Qualcom did 55 00:03:16,880 --> 00:03:20,440 Speaker 6: reiterate and build on top of the Nubia architecture, which 56 00:03:20,440 --> 00:03:23,000 Speaker 6: they are now calling sort of their own designs. So 57 00:03:23,040 --> 00:03:26,760 Speaker 6: the issue here is that the license agreement based on 58 00:03:26,800 --> 00:03:29,400 Speaker 6: which the Orion chips were built on, we're at a 59 00:03:29,440 --> 00:03:32,079 Speaker 6: much lower rate and ARM is demanding a higher rate 60 00:03:32,120 --> 00:03:36,040 Speaker 6: comparable to what Qualcom is paying on its ARM based designs. 61 00:03:36,600 --> 00:03:40,080 Speaker 4: This is a complicated story, and it's complicated for vanists 62 00:03:40,120 --> 00:03:42,480 Speaker 4: like you covering. This is what Calcom had to say 63 00:03:42,800 --> 00:03:46,360 Speaker 4: in response to the Bloomberg reporting and its fighting talk. 64 00:03:46,480 --> 00:03:48,880 Speaker 4: As you'd imagine, this is more of the same from 65 00:03:48,880 --> 00:03:52,839 Speaker 4: our more unfounded threats designed to strong arm a long 66 00:03:52,920 --> 00:03:57,280 Speaker 4: time partner, interfere with our performance leading CPUs and increase 67 00:03:57,400 --> 00:04:01,760 Speaker 4: royalty rates regardless of the broad right under our architectural license. 68 00:04:01,800 --> 00:04:03,080 Speaker 5: They go on to say other things. 69 00:04:03,200 --> 00:04:04,840 Speaker 4: I think the main point is we are headed to 70 00:04:04,880 --> 00:04:08,560 Speaker 4: trial in December on the royalty rates piece. 71 00:04:09,240 --> 00:04:10,760 Speaker 5: How do you see this playing out? 72 00:04:11,160 --> 00:04:14,280 Speaker 4: Armed does not want to lose money with Qualcom going 73 00:04:14,320 --> 00:04:18,840 Speaker 4: with different designs, right. Qualcomm is the most important smartphone 74 00:04:18,920 --> 00:04:21,120 Speaker 4: processor maker when it comes to Android platform. 75 00:04:21,240 --> 00:04:23,760 Speaker 5: There's quite a lot at stake here. 76 00:04:24,680 --> 00:04:27,760 Speaker 6: Definitely for ARMED Qualcom it's number one customers with about 77 00:04:27,760 --> 00:04:30,520 Speaker 6: three hundred and twenty million in revenues. 78 00:04:30,080 --> 00:04:31,880 Speaker 5: Last year, so it does. 79 00:04:31,560 --> 00:04:34,119 Speaker 6: Not definitely want the number one customer to go away. 80 00:04:34,240 --> 00:04:38,440 Speaker 6: But we don't think that a litigation where blocking Qualcom's 81 00:04:38,480 --> 00:04:41,719 Speaker 6: ability to ship chips based on the ARM arguement is 82 00:04:41,839 --> 00:04:44,640 Speaker 6: more likely because it does not just impact Qualcom, but 83 00:04:44,680 --> 00:04:47,400 Speaker 6: it impacts the entire industry. I mean imagine a scenario 84 00:04:47,480 --> 00:04:51,080 Speaker 6: where phonemakers cannot get qual Comb chips in which they 85 00:04:51,080 --> 00:04:54,080 Speaker 6: are getting ready for the next generation of AI smartphones. 86 00:04:54,279 --> 00:04:57,200 Speaker 4: I should add the ARM decline to comment on the 87 00:04:57,240 --> 00:05:00,880 Speaker 4: reporting that was Congensubani of Bloomberg Intelligence the analysis, and 88 00:05:00,960 --> 00:05:03,400 Speaker 4: later in the show we'll go deeper on that Bloomberg 89 00:05:03,440 --> 00:05:06,560 Speaker 4: reporting on the story. Let's talk a bit about markets 90 00:05:06,600 --> 00:05:08,120 Speaker 4: and then the invested attitude. 91 00:05:07,680 --> 00:05:08,640 Speaker 5: Toward the chip sector. 92 00:05:08,880 --> 00:05:12,600 Speaker 4: Hillary Frisch, senior Research analysts for Software Services and Enterprise 93 00:05:12,680 --> 00:05:15,480 Speaker 4: Tech at clear Bridge, joins us. And it's so interesting 94 00:05:15,520 --> 00:05:19,360 Speaker 4: because there's a lot of noise and single name specific noise, 95 00:05:19,600 --> 00:05:23,800 Speaker 4: but actually those headwinds are offset by massive tailwinds for 96 00:05:23,839 --> 00:05:27,719 Speaker 4: the chip sector, largely related to the enterprise investment in 97 00:05:27,800 --> 00:05:28,719 Speaker 4: AI infrastructure. 98 00:05:28,760 --> 00:05:31,520 Speaker 7: Hillary, Yes, they absolutely are. I agree with you one 99 00:05:31,600 --> 00:05:32,200 Speaker 7: hundred percent. 100 00:05:34,160 --> 00:05:36,640 Speaker 5: Where are you focusing? Go ahead, please continue. 101 00:05:37,600 --> 00:05:45,480 Speaker 7: Yeah, we're seeing growing demand indications for demand for cloud migrations, 102 00:05:45,520 --> 00:05:49,400 Speaker 7: demand for AI, more AI projects going into production. There's 103 00:05:49,400 --> 00:05:52,080 Speaker 7: a lot of debate around that, but all there's more 104 00:05:52,120 --> 00:05:55,200 Speaker 7: activity now than there was six months ago. There's more 105 00:05:55,400 --> 00:05:57,839 Speaker 7: likely to go into production in the first half of 106 00:05:57,839 --> 00:06:00,040 Speaker 7: the year than second half of this year, So so 107 00:06:00,400 --> 00:06:01,960 Speaker 7: those RULs are really starting to move. 108 00:06:03,120 --> 00:06:05,240 Speaker 4: Where I would like to talk about qual Con with you, 109 00:06:05,560 --> 00:06:10,560 Speaker 4: is this debate about how we as consumers will use AI. 110 00:06:11,279 --> 00:06:14,039 Speaker 4: To Qualcomm's mind, it is on device, of course, it 111 00:06:14,120 --> 00:06:16,719 Speaker 4: is that's their entire business, right, But they see a 112 00:06:16,760 --> 00:06:19,800 Speaker 4: world where within five years all of us having an 113 00:06:19,839 --> 00:06:23,080 Speaker 4: AI smartphone. When you look at the markets and you 114 00:06:23,120 --> 00:06:27,120 Speaker 4: look at the names across the technology sector, is that 115 00:06:27,240 --> 00:06:30,000 Speaker 4: a part of your thesis and your investment approach, that 116 00:06:30,080 --> 00:06:32,640 Speaker 4: idea that we're on device sooner rather than later. 117 00:06:33,880 --> 00:06:39,280 Speaker 7: I think the requirements for efficiency in processing, Jenny, I 118 00:06:39,360 --> 00:06:43,160 Speaker 7: will require that processing occur everywhere, including on the device. 119 00:06:43,960 --> 00:06:47,240 Speaker 7: There's clearly going to be a tremendous amount of centralized 120 00:06:47,279 --> 00:06:52,960 Speaker 7: processing out the hyperscalers themselves at ancillary clouds with larger 121 00:06:52,960 --> 00:06:56,200 Speaker 7: and smaller models, and there's going to be a diversity 122 00:06:56,279 --> 00:06:59,440 Speaker 7: within the ecosystem. But absolutely the device is part of 123 00:06:59,440 --> 00:07:00,000 Speaker 7: the thesis. 124 00:07:00,320 --> 00:07:04,080 Speaker 4: There are interesting parts of the enterprise software space as well, 125 00:07:04,560 --> 00:07:08,280 Speaker 4: where everyone is sticking the letters A and I in 126 00:07:08,360 --> 00:07:10,080 Speaker 4: front of existing products. 127 00:07:10,600 --> 00:07:12,560 Speaker 5: Are you finding it. 128 00:07:12,440 --> 00:07:18,120 Speaker 4: Possible to discern what is tangibly good, new, impressive, and 129 00:07:18,160 --> 00:07:19,320 Speaker 4: what is just marketing? 130 00:07:19,800 --> 00:07:23,160 Speaker 7: It's such a good question, ed. There is a tremendous 131 00:07:23,200 --> 00:07:28,320 Speaker 7: amount of marketing speak, fud hopes, dreams, and promises. But 132 00:07:28,360 --> 00:07:31,960 Speaker 7: at the end of the day, what is interesting about 133 00:07:31,960 --> 00:07:35,280 Speaker 7: this cycle versus prior cycles, first and foremost is just 134 00:07:35,320 --> 00:07:40,400 Speaker 7: how quickly, incumbents have moved to embrace Jenai, to incorporate 135 00:07:40,360 --> 00:07:42,880 Speaker 7: it into their product lines. Some key incumbents like Microsoft 136 00:07:42,880 --> 00:07:47,200 Speaker 7: and Salesforce, have pivoted their entire organizations around Jenai. They've 137 00:07:47,240 --> 00:07:51,160 Speaker 7: re architected their R and D efforts around it, seemingly overnight, 138 00:07:51,240 --> 00:07:54,480 Speaker 7: let's call it within a year or a little less 139 00:07:54,560 --> 00:07:57,160 Speaker 7: and even longer for Microsoft. But at the end of 140 00:07:57,160 --> 00:08:03,520 Speaker 7: the day, there's a trumanous amount of activity the incumbents. Actually, 141 00:08:03,560 --> 00:08:05,880 Speaker 7: there's a lot of debate over who will win, who 142 00:08:05,920 --> 00:08:08,760 Speaker 7: will lose. There's a lot of investor focus on the 143 00:08:08,760 --> 00:08:12,680 Speaker 7: potential disintermediation of incumbents, but they bring a lot to 144 00:08:12,760 --> 00:08:16,560 Speaker 7: bear this time around, not just the data, not just 145 00:08:16,600 --> 00:08:19,800 Speaker 7: the workflows, not just the customer trust, not just that 146 00:08:19,880 --> 00:08:22,280 Speaker 7: whole end of it. But Jenny I, at the end 147 00:08:22,280 --> 00:08:24,480 Speaker 7: of the day, isn't just about a building a bot 148 00:08:24,600 --> 00:08:27,960 Speaker 7: or a NAP or an interface. It's about the complexity 149 00:08:28,360 --> 00:08:32,000 Speaker 7: of the back end and that entire orchestration, the provisioning, 150 00:08:32,080 --> 00:08:34,199 Speaker 7: the identities and all the things that go along with it, 151 00:08:34,480 --> 00:08:37,440 Speaker 7: which is very hard to do. So that's the key 152 00:08:37,520 --> 00:08:40,080 Speaker 7: of part of what I'm looking for. Who can handle 153 00:08:40,520 --> 00:08:44,280 Speaker 7: the entirety of the complexity of what looks very simple 154 00:08:44,320 --> 00:08:47,080 Speaker 7: on the front end of say an agent and how 155 00:08:47,120 --> 00:08:50,040 Speaker 7: they will succeed in that. And we're gauging that process 156 00:08:50,080 --> 00:08:51,960 Speaker 7: as we grow as we go. But so for all, 157 00:08:52,000 --> 00:08:53,640 Speaker 7: the early indications are fairly. 158 00:08:53,400 --> 00:08:56,000 Speaker 5: Promising and how they handle it. 159 00:08:56,080 --> 00:09:00,720 Speaker 4: Let's end the conversation by asking what happens next across 160 00:09:00,720 --> 00:09:03,640 Speaker 4: the field of software enterprising the hardware names you cover, 161 00:09:04,440 --> 00:09:07,320 Speaker 4: how primed are we for more M and A and 162 00:09:07,400 --> 00:09:08,239 Speaker 4: more consolidation. 163 00:09:09,800 --> 00:09:10,640 Speaker 5: It looks as. 164 00:09:10,480 --> 00:09:13,520 Speaker 7: Though we're primed for more M and A and consolidation 165 00:09:13,640 --> 00:09:16,000 Speaker 7: going forward. That would have been the natural inclination to 166 00:09:16,040 --> 00:09:20,560 Speaker 7: start with. We've had a sluggish spending environment, most certainly 167 00:09:20,559 --> 00:09:23,440 Speaker 7: for a variety of reasons. I think the elections have been. 168 00:09:23,280 --> 00:09:23,720 Speaker 8: Part of that. 169 00:09:23,760 --> 00:09:25,440 Speaker 7: There are a lot of factors that are part of that, 170 00:09:25,480 --> 00:09:29,559 Speaker 7: as including a wholesale focus on Jenny I by corporations. 171 00:09:29,600 --> 00:09:34,199 Speaker 7: But going forward, there's better spending indications. We're going to 172 00:09:34,280 --> 00:09:41,720 Speaker 7: see both administrative potential. New candidates look likely to permit 173 00:09:41,880 --> 00:09:43,480 Speaker 7: more in the way of M and A. There's going 174 00:09:43,559 --> 00:09:45,680 Speaker 7: to be more imperative to do that. You're seeing more 175 00:09:45,720 --> 00:09:49,079 Speaker 7: private equity activity and you're seeing the low end of 176 00:09:49,200 --> 00:09:53,400 Speaker 7: valuations called the ibms, the SEPs, the oracles come up 177 00:09:53,440 --> 00:09:56,880 Speaker 7: providing a floor. So I think all of that and 178 00:09:57,160 --> 00:10:00,400 Speaker 7: hopefully declining interest rates will precipitate a more active M 179 00:10:00,400 --> 00:10:01,679 Speaker 7: and a environment going forward. 180 00:10:02,559 --> 00:10:06,160 Speaker 4: Hillary Frish, Senior Research analysts for Software Services and Enterprise 181 00:10:06,240 --> 00:10:17,960 Speaker 4: Technology at Clearbridge, Thank you very much. Apple CEO Tim 182 00:10:18,040 --> 00:10:21,280 Speaker 4: Cook makes a visit to Beijing, meeting with China's TECHSAR 183 00:10:21,679 --> 00:10:25,000 Speaker 4: with a promise to keep investing in the country. Bloomberg's 184 00:10:25,080 --> 00:10:29,360 Speaker 4: chief correspondent for Apple and Consumer Electronics, Mark German with us. Now, 185 00:10:29,400 --> 00:10:32,080 Speaker 4: and you and I have talked so much about the 186 00:10:32,080 --> 00:10:35,040 Speaker 4: supply chain in China, and China is an end market, 187 00:10:35,120 --> 00:10:37,840 Speaker 4: but it is notable that he goes in person and 188 00:10:37,880 --> 00:10:39,160 Speaker 4: has this very public meeting. 189 00:10:39,160 --> 00:10:41,640 Speaker 9: What do we know, Mark, Yeah, So around this time 190 00:10:41,679 --> 00:10:45,559 Speaker 9: every year, UP executives make a track down to Asia. 191 00:10:46,200 --> 00:10:48,960 Speaker 9: Greg Joswiak right now they're head of marketing is in 192 00:10:49,080 --> 00:10:52,760 Speaker 9: Southeast Asia. Tim Cook and Jeff Williams Cooking, the CEO 193 00:10:52,760 --> 00:10:56,560 Speaker 9: of Loans being the COO, are now in mainland China, 194 00:10:57,040 --> 00:11:00,680 Speaker 9: and Cook typically goes to China two to four per year, 195 00:11:00,760 --> 00:11:03,280 Speaker 9: other than during the pandemic years he was there quite often. 196 00:11:04,000 --> 00:11:05,920 Speaker 9: There's a lot at stakes for Apple and China, right, 197 00:11:05,960 --> 00:11:08,400 Speaker 9: they need to meet with their big providers and partners there. 198 00:11:08,480 --> 00:11:11,160 Speaker 9: China Mobile, you had a meeting with them, they pledged 199 00:11:11,240 --> 00:11:15,600 Speaker 9: continued cooperation. Cook pledge continued cooperation with the IT Minister 200 00:11:15,679 --> 00:11:17,880 Speaker 9: of China. Of course, he's not going to go there, 201 00:11:18,120 --> 00:11:20,400 Speaker 9: meet with the IT minister and say we're no longer 202 00:11:20,440 --> 00:11:23,480 Speaker 9: going to cooperate in our second or third biggest market, right, 203 00:11:23,520 --> 00:11:24,760 Speaker 9: So that's kind of obvious. 204 00:11:24,800 --> 00:11:26,960 Speaker 5: So this is just how things go. 205 00:11:27,040 --> 00:11:30,040 Speaker 9: When you are a multinational company as big as Apple, 206 00:11:30,080 --> 00:11:32,600 Speaker 9: you have to meet with your partners and government regulators 207 00:11:32,920 --> 00:11:35,000 Speaker 9: in the countries that you work with and work in, 208 00:11:35,800 --> 00:11:38,040 Speaker 9: and these meetings are a big part of that. Obviously, 209 00:11:38,080 --> 00:11:40,920 Speaker 9: Apple's unique as a US based tech company to have 210 00:11:40,960 --> 00:11:44,760 Speaker 9: such freedoms in China. They have around forty retail stores there. 211 00:11:45,400 --> 00:11:48,680 Speaker 9: For the most part, almost all of their services operate there. 212 00:11:49,280 --> 00:11:53,920 Speaker 9: There are some nuances regarding cloud storage for iCloud. Obviously 213 00:11:54,080 --> 00:11:57,280 Speaker 9: Apple Intelligence is not available there yet. So these are 214 00:11:57,320 --> 00:11:59,680 Speaker 9: things they're going to continue to work on and keeping 215 00:11:59,760 --> 00:12:02,720 Speaker 9: in and meeting with that government is important. Not to 216 00:12:02,800 --> 00:12:06,560 Speaker 9: mention the necessary meetings that Cook and Williams Obviously Williams 217 00:12:06,600 --> 00:12:08,720 Speaker 9: runs a supply chain needs to have with fox Conn 218 00:12:08,720 --> 00:12:10,200 Speaker 9: other supply chain partners locally. 219 00:12:10,440 --> 00:12:13,400 Speaker 4: Mark Apple shares down around a percentage point in the session. 220 00:12:13,480 --> 00:12:17,000 Speaker 4: There's reports out there this morning that Apple's scaling back 221 00:12:17,080 --> 00:12:18,720 Speaker 4: production of the Vision Pro. 222 00:12:19,640 --> 00:12:21,120 Speaker 5: What do we know about that and what do you 223 00:12:21,160 --> 00:12:21,680 Speaker 5: make of it? 224 00:12:21,840 --> 00:12:24,120 Speaker 9: I think it's a bit of a misnomer, right. It's 225 00:12:24,160 --> 00:12:27,199 Speaker 9: not that they're scaling back production of the Vision Pro 226 00:12:27,559 --> 00:12:30,400 Speaker 9: because they're planning on canceling it or getting rid of it. 227 00:12:31,400 --> 00:12:35,400 Speaker 9: Before Apple releases new versions of products, they need to 228 00:12:35,440 --> 00:12:38,559 Speaker 9: scale back production of the current product, and the goal 229 00:12:38,720 --> 00:12:41,680 Speaker 9: is to have enough units to fulfill demand and fill 230 00:12:41,720 --> 00:12:45,000 Speaker 9: the channels until the new one's already And there is 231 00:12:45,040 --> 00:12:47,200 Speaker 9: a new version of the Vision Pro coming out in 232 00:12:47,360 --> 00:12:50,400 Speaker 9: early twenty twenty six. I'm told that's a second generation 233 00:12:50,600 --> 00:12:53,960 Speaker 9: version with a faster processor and focus on artificial intelligence. 234 00:12:54,360 --> 00:12:56,000 Speaker 9: At the end of twenty twenty five, they're going to 235 00:12:56,040 --> 00:13:00,319 Speaker 9: unveil a cheaper model of the Vision Pro, reduce the specifics, 236 00:13:00,360 --> 00:13:02,400 Speaker 9: try to get the price pointing down by about fifteen 237 00:13:02,480 --> 00:13:05,319 Speaker 9: hundred to eighteen hundred dollars, and so you need to 238 00:13:05,360 --> 00:13:08,760 Speaker 9: scale back production ahead of time, so you don't have 239 00:13:08,960 --> 00:13:11,640 Speaker 9: over inventor and those new models come out now, the 240 00:13:11,720 --> 00:13:14,160 Speaker 9: new once And the interesting part here is that Apple 241 00:13:14,200 --> 00:13:15,880 Speaker 9: believes it's going to take a year for them to 242 00:13:15,960 --> 00:13:19,720 Speaker 9: run out of existing supply of the Vision Pro, which 243 00:13:19,800 --> 00:13:21,920 Speaker 9: makes sense given that the pace of this thing is 244 00:13:21,960 --> 00:13:24,960 Speaker 9: selling at But I've seen no indication of any abandonment 245 00:13:25,120 --> 00:13:27,400 Speaker 9: of the vision Pro line. In fact, what I'm seeing 246 00:13:27,480 --> 00:13:31,679 Speaker 9: is increased hiring for the Vision Pro. I'm seeing increased investment, 247 00:13:32,080 --> 00:13:34,600 Speaker 9: and I'm seeing increased optimism about the future of the 248 00:13:34,640 --> 00:13:37,400 Speaker 9: product now that they're sort of getting a new roadmap 249 00:13:37,440 --> 00:13:39,800 Speaker 9: together of different types of devices within that family. 250 00:13:39,920 --> 00:13:43,240 Speaker 4: Bloomberg's Mark Gunman and all things Apple, thank you very much, 251 00:13:43,280 --> 00:13:45,640 Speaker 4: and I think we're tracking. Is Tesla set to report 252 00:13:45,640 --> 00:13:47,760 Speaker 4: earnings after the closing bell today? 253 00:13:48,080 --> 00:13:48,880 Speaker 5: What do we expect. 254 00:13:48,960 --> 00:13:51,160 Speaker 4: Let's go out to Bloomberg's Creature now in London, who 255 00:13:51,240 --> 00:13:53,120 Speaker 4: leads our global autized coverage And. 256 00:13:53,760 --> 00:13:56,959 Speaker 5: This is an important print and an important call. Where 257 00:13:57,000 --> 00:13:57,800 Speaker 5: do you want to start? 258 00:13:57,880 --> 00:13:59,920 Speaker 4: There is a long list of things that invest in 259 00:14:00,160 --> 00:14:02,360 Speaker 4: Tesla fans and tests the writin is will want to 260 00:14:02,360 --> 00:14:02,800 Speaker 4: know about. 261 00:14:03,040 --> 00:14:06,839 Speaker 10: Yeah, I think deliveries wise going in we know that 262 00:14:07,080 --> 00:14:08,679 Speaker 10: they were up a little bit for the quarter. I 263 00:14:08,720 --> 00:14:10,800 Speaker 10: think the question is going to be sort of how 264 00:14:10,920 --> 00:14:13,240 Speaker 10: how they pulled that off right, and to what extent 265 00:14:13,280 --> 00:14:15,520 Speaker 10: were they able to keep pricing firm. I think the 266 00:14:15,600 --> 00:14:20,040 Speaker 10: expectation generally is that it is that earnings may actually 267 00:14:20,480 --> 00:14:23,880 Speaker 10: dip a bit in terms of, you know, because of 268 00:14:23,880 --> 00:14:27,080 Speaker 10: the fact that this is a company that is still highly, 269 00:14:27,120 --> 00:14:29,840 Speaker 10: highly reliant on the Model three and Model Why and 270 00:14:29,920 --> 00:14:33,920 Speaker 10: those products are a bit tired and in need of 271 00:14:34,840 --> 00:14:37,960 Speaker 10: some upgrades, and we didn't really see the Model Why 272 00:14:38,760 --> 00:14:41,760 Speaker 10: excuse me, the Model three refresh. 273 00:14:40,880 --> 00:14:43,200 Speaker 5: Really sort of moved the needle. You know. 274 00:14:43,760 --> 00:14:46,720 Speaker 10: I would be interested in, of course, whether Musk has 275 00:14:46,720 --> 00:14:49,760 Speaker 10: anything to say about a Model Why refresh. He sort 276 00:14:49,800 --> 00:14:52,320 Speaker 10: of ruled out that anything is coming before the end 277 00:14:52,320 --> 00:14:55,600 Speaker 10: of this year, but that I think is something everybody's 278 00:14:55,720 --> 00:14:59,440 Speaker 10: expecting being a part of these you know, more affordable 279 00:14:59,480 --> 00:15:02,520 Speaker 10: models that company has teased coming in the first half 280 00:15:02,560 --> 00:15:03,640 Speaker 10: of twenty twenty five. 281 00:15:04,400 --> 00:15:06,640 Speaker 4: The timing of the earnings reform call is so interesting 282 00:15:06,640 --> 00:15:10,320 Speaker 4: because it comes so quickly after we robot the robotaxi event, 283 00:15:10,400 --> 00:15:13,680 Speaker 4: and it feels like they left a lot out there, 284 00:15:13,880 --> 00:15:15,760 Speaker 4: or a lot that they didn't put out there right 285 00:15:15,760 --> 00:15:18,480 Speaker 4: investers wanted to know about a proprietary ride heading app. 286 00:15:18,880 --> 00:15:20,800 Speaker 4: Do you think Musk is going to talk about that 287 00:15:20,880 --> 00:15:21,880 Speaker 4: on the call, Craig. 288 00:15:22,200 --> 00:15:24,840 Speaker 10: I would be surprised, just because it feels to me like, 289 00:15:25,040 --> 00:15:28,040 Speaker 10: you know, even some of the timelines that Musk put 290 00:15:28,080 --> 00:15:30,840 Speaker 10: out there at the event were a good ways off, 291 00:15:30,880 --> 00:15:34,400 Speaker 10: and we know that, you know, as he himself acknowledges, 292 00:15:34,440 --> 00:15:37,080 Speaker 10: he tends to be overly optimistic about these timelines, and 293 00:15:37,160 --> 00:15:40,760 Speaker 10: so that still feels like a business that, you know, 294 00:15:40,800 --> 00:15:43,720 Speaker 10: we're not going to see anytime soon, and so it 295 00:15:43,720 --> 00:15:46,560 Speaker 10: would maybe be premature to get into on the call. 296 00:15:46,920 --> 00:15:50,240 Speaker 10: I think another sort of you know topic that I 297 00:15:50,240 --> 00:15:52,760 Speaker 10: would be surprised if it didn't come up with some 298 00:15:52,840 --> 00:15:57,280 Speaker 10: discussion of Musk's involvement in politics and yes, you know, 299 00:15:57,480 --> 00:16:02,080 Speaker 10: the company to its credit, you know, solicit retail investor questions. 300 00:16:02,120 --> 00:16:03,920 Speaker 10: I would be shocked if we didn't have, you know, 301 00:16:04,000 --> 00:16:06,800 Speaker 10: something come up along those lines. We've heard Musk address 302 00:16:06,880 --> 00:16:07,560 Speaker 10: this in the past. 303 00:16:08,360 --> 00:16:10,440 Speaker 4: For now, Tesla is still in the business of selling 304 00:16:10,480 --> 00:16:14,760 Speaker 4: electric vehicles to consumers. What does the environment and other 305 00:16:14,800 --> 00:16:17,640 Speaker 4: reports and earnings tell us about how that's going around 306 00:16:17,680 --> 00:16:18,080 Speaker 4: the world. 307 00:16:19,640 --> 00:16:25,680 Speaker 10: I think so many manufacturers are really pivoting to you know, hybrids, 308 00:16:25,800 --> 00:16:29,720 Speaker 10: right and plug in hybrids, range extended electric vehicles. I 309 00:16:29,720 --> 00:16:32,800 Speaker 10: think Tesla you know, sort of went out of its 310 00:16:32,840 --> 00:16:37,120 Speaker 10: way a couple quarters ago to say to highlight that 311 00:16:37,160 --> 00:16:39,280 Speaker 10: fact and say it was their belief that this is 312 00:16:39,320 --> 00:16:42,480 Speaker 10: the wrong strategy. I think you have to sort of, 313 00:16:42,560 --> 00:16:44,840 Speaker 10: you know, look at at what has happened at some 314 00:16:44,920 --> 00:16:48,800 Speaker 10: of Tesla's biggest competitors and question whether they were really 315 00:16:48,800 --> 00:16:53,359 Speaker 10: correct because we've seen much more robust demand for hybrids, 316 00:16:54,040 --> 00:16:57,040 Speaker 10: whether they plug in or not. You know, Toyota, for instance, 317 00:16:57,160 --> 00:16:58,880 Speaker 10: is just really kind of lighting the world on fire 318 00:16:58,920 --> 00:17:01,720 Speaker 10: with its hybrid business. And so you know, Tesla, I 319 00:17:01,800 --> 00:17:06,600 Speaker 10: think is struggling with some of these broader trends that 320 00:17:06,640 --> 00:17:09,560 Speaker 10: the industry is seeing have slowed down for a battery 321 00:17:09,600 --> 00:17:10,639 Speaker 10: electric vehicle demand. 322 00:17:11,760 --> 00:17:14,040 Speaker 5: Bloomber's cry true down in London, Thank you so much. 323 00:17:14,119 --> 00:17:16,800 Speaker 4: Now coming up on the show, Asana just released its 324 00:17:16,840 --> 00:17:20,879 Speaker 4: latest AI workflow tools page. Costello, Company's head of AI 325 00:17:21,240 --> 00:17:39,760 Speaker 4: joins us. Next, this is Bloomberg Technology Enterprise work Management 326 00:17:39,760 --> 00:17:43,480 Speaker 4: platform as Sana just wrapped its work Innovation Summit where 327 00:17:43,520 --> 00:17:46,760 Speaker 4: announced new AI features that will do things like project 328 00:17:46,760 --> 00:17:50,679 Speaker 4: coordination and workforce orchestration teams also be able to embed 329 00:17:50,880 --> 00:17:55,440 Speaker 4: the new features without using code. Here with Morris Page Costello. 330 00:17:55,560 --> 00:17:58,120 Speaker 4: She's the head of AI at Asana, and there's such 331 00:17:58,160 --> 00:18:00,760 Speaker 4: pressure right now to ship new products, almost like on 332 00:18:00,800 --> 00:18:03,040 Speaker 4: a weekly cadence. It was a big week for you. 333 00:18:03,560 --> 00:18:06,800 Speaker 4: They start with the without code bit. Why is that significant? 334 00:18:07,680 --> 00:18:10,960 Speaker 11: This is important because leaders and team leads know that 335 00:18:11,000 --> 00:18:14,200 Speaker 11: the most important work is across teams and they need 336 00:18:14,240 --> 00:18:17,200 Speaker 11: to be empowered to set up AI to work in 337 00:18:17,240 --> 00:18:21,000 Speaker 11: their existing workflows, across their existing work tools. No one 338 00:18:21,040 --> 00:18:23,560 Speaker 11: wants more places to work. No one wants to remember 339 00:18:23,640 --> 00:18:26,520 Speaker 11: when to engage with AI or not. And this enables 340 00:18:26,560 --> 00:18:29,760 Speaker 11: people to actually set up AI directly where they're already working. 341 00:18:30,600 --> 00:18:33,040 Speaker 4: What you just said, you know whether to engage or not, 342 00:18:33,240 --> 00:18:35,960 Speaker 4: how to engage. Do you have any sort of early 343 00:18:36,040 --> 00:18:39,159 Speaker 4: case studies or examples of how customers are actually using 344 00:18:39,200 --> 00:18:41,560 Speaker 4: it and whether or not they're benefiting in a sort 345 00:18:41,560 --> 00:18:43,440 Speaker 4: of easy to understand way. 346 00:18:44,200 --> 00:18:44,520 Speaker 5: Yeah. 347 00:18:44,600 --> 00:18:47,320 Speaker 11: One of the customers and the beta that is now 348 00:18:47,840 --> 00:18:52,240 Speaker 11: available today was a career channel Outdoor, and they're a 349 00:18:52,359 --> 00:18:58,560 Speaker 11: multinational advertiser. They use these AI workflows to effectively empower 350 00:18:58,640 --> 00:19:03,080 Speaker 11: their creative productions and so when sales would send requests 351 00:19:03,080 --> 00:19:07,840 Speaker 11: to creative teams, picture twenty five hundred requests a month, 352 00:19:08,280 --> 00:19:12,960 Speaker 11: these requests were with before and after saved sixty percent 353 00:19:13,080 --> 00:19:17,840 Speaker 11: of manual time and fifteen hours per request. And that's 354 00:19:17,880 --> 00:19:20,440 Speaker 11: just one part of these smartworkflows. 355 00:19:22,280 --> 00:19:25,200 Speaker 4: In any company, particularly in an enterprise software company, right, 356 00:19:25,280 --> 00:19:27,679 Speaker 4: there is a role that an AI agent can play. 357 00:19:27,840 --> 00:19:29,720 Speaker 4: If you work at any tech company, you often have 358 00:19:29,840 --> 00:19:33,120 Speaker 4: like in house software where there would be a very 359 00:19:33,280 --> 00:19:35,800 Speaker 4: clear and useful use case for an AI agent. But 360 00:19:35,840 --> 00:19:37,320 Speaker 4: I think loads of people that watch the show they 361 00:19:37,400 --> 00:19:39,400 Speaker 4: don't really know what an AI agent is. 362 00:19:39,800 --> 00:19:41,240 Speaker 5: Could you define it for us? 363 00:19:42,240 --> 00:19:46,000 Speaker 11: Yes, an AI agent is effectively using generative AI or 364 00:19:46,160 --> 00:19:50,919 Speaker 11: LM models to make a choice, effectively tool use and 365 00:19:50,960 --> 00:19:54,720 Speaker 11: reasoning about what the proper next steps are. Now importantly, 366 00:19:55,760 --> 00:20:01,040 Speaker 11: enterprise organizations care about accuracy, reliability, and ultimately auditability, and 367 00:20:01,080 --> 00:20:03,920 Speaker 11: that's where this solution is very unique because it sits 368 00:20:03,960 --> 00:20:07,840 Speaker 11: on top of the existing scaffolding of work structure in ASANA, 369 00:20:08,160 --> 00:20:11,000 Speaker 11: which is all about transparency around who's doing what, by 370 00:20:11,000 --> 00:20:13,280 Speaker 11: when and why, which you care about when AI is 371 00:20:13,359 --> 00:20:14,359 Speaker 11: doing work as well. 372 00:20:16,200 --> 00:20:19,159 Speaker 4: Mark Benioff, who is the CEO of Salesforce, which is 373 00:20:19,200 --> 00:20:22,600 Speaker 4: a very large enterprise or SaaS company has been talking 374 00:20:22,640 --> 00:20:25,520 Speaker 4: a lot about what an AI agent is or is not, 375 00:20:25,720 --> 00:20:30,600 Speaker 4: particularly in his critique of Microsoft's co Pilot, but there 376 00:20:30,640 --> 00:20:33,520 Speaker 4: is clearly a tension on it. Why is it important 377 00:20:33,840 --> 00:20:36,360 Speaker 4: that people start to understand and think about whether they 378 00:20:36,480 --> 00:20:40,840 Speaker 4: use or need an AI agent at all? 379 00:20:40,920 --> 00:20:43,960 Speaker 11: I think the biggest unlock is what it is able 380 00:20:44,080 --> 00:20:47,880 Speaker 11: to where it is able to have creativity. And what's 381 00:20:47,920 --> 00:20:51,000 Speaker 11: important is that organizations decide the length of leash they're 382 00:20:51,040 --> 00:20:55,800 Speaker 11: willing to give AI. What's important here is delegating slices 383 00:20:55,840 --> 00:20:58,600 Speaker 11: of work to AI and having a perspective about what 384 00:20:58,640 --> 00:21:01,840 Speaker 11: you want it to do you don't want it to do. Ultimately, 385 00:21:02,760 --> 00:21:05,960 Speaker 11: people are accountable for work, the decisions, the results, and 386 00:21:06,040 --> 00:21:08,840 Speaker 11: when you deploy an AI agent, you want to know 387 00:21:08,840 --> 00:21:11,080 Speaker 11: what it did and why, and honestly, you want the 388 00:21:11,119 --> 00:21:12,400 Speaker 11: ability to undo. 389 00:21:12,160 --> 00:21:16,080 Speaker 4: It page We just have thirty seconds. Why is a 390 00:21:16,200 --> 00:21:17,800 Speaker 4: Sauna good at AI agents? 391 00:21:18,720 --> 00:21:21,240 Speaker 11: Asana has a unique advantage with the structure of its 392 00:21:21,320 --> 00:21:24,919 Speaker 11: data and it works across apps with the tools that 393 00:21:24,960 --> 00:21:28,000 Speaker 11: teams use today. What's unique about the AI agents that 394 00:21:28,040 --> 00:21:31,680 Speaker 11: Asana deploys for our customers is one they're highly customizable 395 00:21:32,119 --> 00:21:35,359 Speaker 11: to their right in the context of apps, and three, 396 00:21:35,680 --> 00:21:39,000 Speaker 11: they are exactly tailored to your team so that no 397 00:21:39,040 --> 00:21:40,919 Speaker 11: one needs to make a choice about what to use 398 00:21:40,960 --> 00:21:44,240 Speaker 11: and when. It just engages proactively on your behalf to 399 00:21:44,320 --> 00:21:48,000 Speaker 11: reduce busy work and actually help execute some of the 400 00:21:48,040 --> 00:21:49,600 Speaker 11: work right in context. 401 00:21:50,800 --> 00:21:53,840 Speaker 4: Page Costello, head of AI at Asana, thanks for being here. 402 00:21:53,880 --> 00:22:05,600 Speaker 4: Back on Bloomberg Technology. Welcome back to Bloomberg Technology. Ed 403 00:22:05,680 --> 00:22:08,800 Speaker 4: Ludlow here in San Francisco. The technology story in financial 404 00:22:08,840 --> 00:22:12,000 Speaker 4: markets is tech dragging us down at the index level. 405 00:22:12,000 --> 00:22:14,280 Speaker 4: Look at the nas that one hundred, for example, kind 406 00:22:14,280 --> 00:22:16,600 Speaker 4: of down a percentage point or more than a percentage point. 407 00:22:16,760 --> 00:22:18,880 Speaker 4: It is some of the chip names that are most 408 00:22:18,920 --> 00:22:22,560 Speaker 4: pronouncing their declines, but others are also lower ahead of earnings, 409 00:22:22,560 --> 00:22:25,200 Speaker 4: for example Tesla that's after the bell. The socks down 410 00:22:25,240 --> 00:22:27,400 Speaker 4: eight ten to one percent. You know what our top 411 00:22:27,440 --> 00:22:30,240 Speaker 4: story is today, Let's get right to it. Qualcom, the 412 00:22:30,320 --> 00:22:33,480 Speaker 4: chip maker, and ARM, the chip design firm, are both 413 00:22:33,600 --> 00:22:38,000 Speaker 4: markedly lower. Bloomberg is reporting that ARM has canceled a 414 00:22:38,040 --> 00:22:42,280 Speaker 4: license issue to Quaalcom for key intellectual poppits property for 415 00:22:42,480 --> 00:22:46,680 Speaker 4: smartphone processor designs. It's an x escalation of an existing 416 00:22:46,760 --> 00:22:50,800 Speaker 4: dispute which is headed for a trial in December, bucking 417 00:22:50,840 --> 00:22:54,200 Speaker 4: the trend in that space load just really quickly is TSMC. 418 00:22:54,800 --> 00:22:57,840 Speaker 4: Overnight we got used that TSMC has cut loose a 419 00:22:57,920 --> 00:23:01,800 Speaker 4: client it found out was funneling chits to Huawei, which 420 00:23:01,840 --> 00:23:05,000 Speaker 4: of course is a Chinese company subject to sanctions. Let's 421 00:23:05,000 --> 00:23:07,160 Speaker 4: get back to that Qualcomm and ARM story and bring 422 00:23:07,200 --> 00:23:10,439 Speaker 4: in Bloomberg Senior executive editor Tom Giles, who's out in 423 00:23:10,440 --> 00:23:13,880 Speaker 4: London this week. Tom, this is so complex, the qualcomma 424 00:23:13,960 --> 00:23:18,159 Speaker 4: ARMS story. The timing is astonishing. Frankly, Rene Huss was 425 00:23:18,200 --> 00:23:20,720 Speaker 4: in the building with you this week. Christiano, a mom 426 00:23:20,760 --> 00:23:23,080 Speaker 4: was on the show with me less than twenty four 427 00:23:23,080 --> 00:23:26,320 Speaker 4: hours ago. As far as you can just explain the 428 00:23:26,320 --> 00:23:28,639 Speaker 4: basics of what we've reported overnight, I think that's a 429 00:23:28,680 --> 00:23:29,520 Speaker 4: good place to start. 430 00:23:30,880 --> 00:23:34,280 Speaker 12: Well, there is a dispute between these two companies. Qualcom 431 00:23:34,400 --> 00:23:37,159 Speaker 12: one of the biggest chip makers, particularly when it comes 432 00:23:37,200 --> 00:23:41,879 Speaker 12: to mobile phones. ARM is this company, this UK based 433 00:23:41,920 --> 00:23:48,600 Speaker 12: company that owns the basically the designs for these chips. 434 00:23:49,080 --> 00:23:51,480 Speaker 12: If you don't if you can't use the design, you 435 00:23:51,560 --> 00:23:55,720 Speaker 12: can't make the chips. If you don't have basically if 436 00:23:55,960 --> 00:23:58,920 Speaker 12: ARM decides to pull that design away from it the 437 00:23:59,080 --> 00:24:02,639 Speaker 12: license to use the design. Qualcomm is going to be 438 00:24:02,760 --> 00:24:06,159 Speaker 12: inhibited from making a big swath of the chips that 439 00:24:06,240 --> 00:24:09,600 Speaker 12: it needs to make those mobile phones. This is a 440 00:24:09,680 --> 00:24:13,440 Speaker 12: legal dispute between the two over an acquisition Qualcom made. 441 00:24:13,560 --> 00:24:16,520 Speaker 12: It's not getting resolved. It's going to trial, and this 442 00:24:16,760 --> 00:24:20,080 Speaker 12: ratchets up the pressure. This doesn't mean that they're going 443 00:24:20,160 --> 00:24:23,280 Speaker 12: to absolutely pull those licenses. They have sixty days to 444 00:24:23,400 --> 00:24:27,120 Speaker 12: resolve it. But on the eve of this trial, this 445 00:24:27,160 --> 00:24:30,720 Speaker 12: is an instance of ARM really ratcheting up the pressure 446 00:24:30,760 --> 00:24:33,879 Speaker 12: and saying, you know, you need to take these allegations 447 00:24:34,000 --> 00:24:38,280 Speaker 12: of intellectual property infringement seriously. 448 00:24:39,800 --> 00:24:42,760 Speaker 4: Some of the analysts use words like leverage, and we'll 449 00:24:42,800 --> 00:24:44,840 Speaker 4: speak to one of those analysts in just a moment. 450 00:24:46,400 --> 00:24:47,240 Speaker 5: You lead the team. 451 00:24:47,440 --> 00:24:50,880 Speaker 4: I mean, this broke last night after a few days 452 00:24:50,920 --> 00:24:53,720 Speaker 4: where both names are in the news. You know what 453 00:24:53,800 --> 00:24:55,840 Speaker 4: else can you kind of tell me about our reporting 454 00:24:56,160 --> 00:24:58,520 Speaker 4: and just the kind of timeline now running up to 455 00:24:58,560 --> 00:24:59,639 Speaker 4: that trial in December? 456 00:25:00,960 --> 00:25:03,480 Speaker 12: Yeah, I mean this comes at a time when there 457 00:25:03,560 --> 00:25:07,480 Speaker 12: is tremendous interest in the chip sector. As you know, 458 00:25:07,960 --> 00:25:12,959 Speaker 12: it's against a backdrop of escalating US China tension, concerns 459 00:25:13,000 --> 00:25:16,560 Speaker 12: about who is where these chips are ending up, concerns 460 00:25:16,600 --> 00:25:20,760 Speaker 12: about making sure that the US has control over the 461 00:25:20,800 --> 00:25:24,880 Speaker 12: full supply chain. At the same time, you have these 462 00:25:25,240 --> 00:25:29,000 Speaker 12: chip stocks rallying going through the roof because of the 463 00:25:29,119 --> 00:25:33,879 Speaker 12: expectations for demand for artificial intelligence. You mentioned in the 464 00:25:33,920 --> 00:25:37,119 Speaker 12: introduction that TSMC is bucking the trend. They are a 465 00:25:37,160 --> 00:25:41,920 Speaker 12: company that is really benefiting from the AI boom. All 466 00:25:41,960 --> 00:25:45,760 Speaker 12: of these things are coming at This is the backdrop 467 00:25:46,000 --> 00:25:49,119 Speaker 12: for Qualcomm in particular. Remember that they are the main 468 00:25:49,640 --> 00:25:53,600 Speaker 12: maker of mobile chips. Apple's a big customer, and there's 469 00:25:53,680 --> 00:25:58,480 Speaker 12: questions about a demand for the iPhone sixteen, how robust 470 00:25:58,600 --> 00:26:01,240 Speaker 12: is that demand and will that hurt Qualcom? There are 471 00:26:01,320 --> 00:26:04,840 Speaker 12: definite questions about whether the iPhone sixteen is a game 472 00:26:04,920 --> 00:26:07,879 Speaker 12: changer of a phone. All of these things happening in 473 00:26:07,920 --> 00:26:12,360 Speaker 12: the background, add to that tension between ARM and Qualcom, 474 00:26:12,480 --> 00:26:15,560 Speaker 12: one of its biggest customers, and it's a recipe for 475 00:26:15,840 --> 00:26:19,840 Speaker 12: a bit of turmoil in the chip market right now. 476 00:26:20,000 --> 00:26:23,800 Speaker 12: And don't forget this isn't something that's just gonna hurt Qualcom. 477 00:26:24,400 --> 00:26:26,960 Speaker 12: This could hurt ARM as well, because if you're not 478 00:26:27,000 --> 00:26:30,320 Speaker 12: going to sell the licenses to these chips. That hurts 479 00:26:30,359 --> 00:26:33,800 Speaker 12: them too. It's a risk, it's a big risk that 480 00:26:33,840 --> 00:26:37,439 Speaker 12: they're taking. And my sense is, I mean, they're not 481 00:26:37,480 --> 00:26:39,439 Speaker 12: saying it this way, but my sense is that this 482 00:26:39,600 --> 00:26:43,359 Speaker 12: is really aimed at putting extra pressure on Qualcom on 483 00:26:43,440 --> 00:26:45,560 Speaker 12: the eve of this trial, to maybe work out some 484 00:26:45,680 --> 00:26:48,159 Speaker 12: kind of a settlement, maybe work out some kind of 485 00:26:48,200 --> 00:26:52,280 Speaker 12: agreement that works to ARMS advantage. 486 00:26:51,760 --> 00:26:53,959 Speaker 4: Right, and to point out, as we just showed ARM 487 00:26:54,040 --> 00:26:57,240 Speaker 4: shares it's more significantly lower than qualcoms are. Bloomberg some 488 00:26:57,400 --> 00:26:59,600 Speaker 4: jars in London. Thank you very much. I want to 489 00:26:59,600 --> 00:27:02,680 Speaker 4: go to stay see Rascom his senior analyst at Bernstein 490 00:27:02,760 --> 00:27:06,760 Speaker 4: Research covering US semiconductors and semi conductor capital equipment. And 491 00:27:06,800 --> 00:27:09,600 Speaker 4: in your note, which was in reaction to that Bloomberg report, 492 00:27:09,960 --> 00:27:12,960 Speaker 4: I think you make the same argument that Tom just outlined. 493 00:27:13,520 --> 00:27:16,920 Speaker 4: This was an action taken by ARM to your mind, 494 00:27:17,000 --> 00:27:20,640 Speaker 4: to force some kind of pre trial settlement. Please take 495 00:27:20,640 --> 00:27:22,200 Speaker 4: that from with it, Stacy. 496 00:27:21,920 --> 00:27:25,120 Speaker 13: Yeah, it feels that way. So it's a sixty day 497 00:27:25,280 --> 00:27:31,960 Speaker 13: supposedly timeline, assuming they pulled they did this yesterday, the 498 00:27:32,040 --> 00:27:35,600 Speaker 13: sixty day limit would be December twenty first, the trial 499 00:27:35,680 --> 00:27:38,320 Speaker 13: right now, is scheduled for December sixteent through December twentieth, 500 00:27:38,359 --> 00:27:39,120 Speaker 13: so it's kind of right. 501 00:27:39,040 --> 00:27:39,680 Speaker 8: On top of that. 502 00:27:40,080 --> 00:27:44,240 Speaker 13: Yeah, to me, this feels like an attempt to drive 503 00:27:44,320 --> 00:27:47,879 Speaker 13: a settlement frum Qualcomm on the eve of the trial. 504 00:27:48,119 --> 00:27:51,280 Speaker 13: It feels like the ramping up the negotiations are pretty 505 00:27:51,320 --> 00:27:51,960 Speaker 13: hard there, So. 506 00:27:51,960 --> 00:27:53,000 Speaker 5: Yes, Stacey. 507 00:27:53,240 --> 00:27:58,439 Speaker 4: On Monday night, Qualcom unveiled Snapdragon eight Elite, which is 508 00:27:58,560 --> 00:28:00,920 Speaker 4: based on the new Via at position right, based on 509 00:28:01,000 --> 00:28:04,280 Speaker 4: Nuvia designs less than twenty four hours ago. Christiano Romon 510 00:28:04,400 --> 00:28:07,360 Speaker 4: came on the show with me to discuss it. Last night, 511 00:28:07,480 --> 00:28:11,719 Speaker 4: bloomboag broke this story about Armed canceling the license as 512 00:28:11,720 --> 00:28:16,120 Speaker 4: part of this dispute. Coincidence or what do you make 513 00:28:16,160 --> 00:28:17,000 Speaker 4: of the chronology? 514 00:28:17,080 --> 00:28:20,040 Speaker 13: Probably not right? They look like good parts, right, So, 515 00:28:20,160 --> 00:28:23,360 Speaker 13: I mean, like the general thrust of this discus as 516 00:28:23,359 --> 00:28:25,879 Speaker 13: I understand again, I will call it. I'm not a lawyer, 517 00:28:25,920 --> 00:28:28,000 Speaker 13: and like I won't be on the jury either. But 518 00:28:28,600 --> 00:28:33,000 Speaker 13: Qualcom bought this company, Nuvia. Nuvia was an armed server start, 519 00:28:33,080 --> 00:28:34,359 Speaker 13: but what it really was it was a bunch of 520 00:28:34,400 --> 00:28:36,480 Speaker 13: ex Apple guys. It was the Apple M one design 521 00:28:36,520 --> 00:28:41,640 Speaker 13: team that designed Apple's first custom chip. Qualcom bought them 522 00:28:41,680 --> 00:28:45,240 Speaker 13: to get that expertise in there going to be delivering 523 00:28:45,240 --> 00:28:49,400 Speaker 13: products across our portfolio using that expertise. Qualcom's current products 524 00:28:49,400 --> 00:28:51,800 Speaker 13: are made on something called the technology license. From that's 525 00:28:51,800 --> 00:28:55,960 Speaker 13: likely off the shelf ARM stuff. Moving to an architectural license, 526 00:28:55,960 --> 00:28:58,280 Speaker 13: where Qualcum does the custom gips, the worlds rates tend 527 00:28:58,280 --> 00:29:01,840 Speaker 13: to be lower. Rates were actually higher. So what ARM 528 00:29:02,040 --> 00:29:05,800 Speaker 13: I think really wants is for Qualcomm to apply Nuvia's 529 00:29:06,000 --> 00:29:08,320 Speaker 13: higher rates like through the portfolio, because otherwise the rates 530 00:29:08,320 --> 00:29:11,560 Speaker 13: would come down. And when qualcommb you know, and to 531 00:29:12,200 --> 00:29:15,200 Speaker 13: enable that, ARM decided not to approve the license transfer 532 00:29:15,200 --> 00:29:18,600 Speaker 13: of Nuvia to Qualcomm. Qualcum's response, and I'll be honest, 533 00:29:18,640 --> 00:29:20,280 Speaker 13: I have a certain degree of sympathy for it. 534 00:29:20,840 --> 00:29:21,440 Speaker 2: Not a lawyer. 535 00:29:21,800 --> 00:29:24,160 Speaker 13: Their response is effectively like, what are you talking about? 536 00:29:24,200 --> 00:29:26,680 Speaker 13: We have our own architectural license. It covers the exact 537 00:29:26,720 --> 00:29:30,640 Speaker 13: same ip in technology Take a hike, right, And that 538 00:29:30,760 --> 00:29:32,800 Speaker 13: seems to be where this is. I think ARM is 539 00:29:32,840 --> 00:29:35,160 Speaker 13: potentially worried that rates could go lower if Qualcomb makes 540 00:29:35,160 --> 00:29:39,840 Speaker 13: a transition from technology license to architectural license. You know, 541 00:29:40,320 --> 00:29:42,840 Speaker 13: I think if yes, Qualcom would agree to what ARM 542 00:29:42,880 --> 00:29:45,080 Speaker 13: is wanting, then the rates would go higher and hopefully 543 00:29:45,120 --> 00:29:47,080 Speaker 13: they'll settle out somewhere in the middle. Like I don't know, 544 00:29:47,080 --> 00:29:49,560 Speaker 13: I can't imagine that it's good for either of them 545 00:29:50,400 --> 00:29:52,360 Speaker 13: to actually take this in front of a jury. Jury 546 00:29:52,360 --> 00:29:54,840 Speaker 13: trivels are are a bit of a craft shoot under 547 00:29:54,840 --> 00:29:56,000 Speaker 13: the best of circumstances. 548 00:29:56,000 --> 00:30:00,520 Speaker 4: So guys, allow me to take you some just to 549 00:30:00,560 --> 00:30:03,760 Speaker 4: point out that Armed did not comment on the Bloomberg report, 550 00:30:03,840 --> 00:30:05,040 Speaker 4: but Quilcom did. 551 00:30:05,600 --> 00:30:06,320 Speaker 5: Quilcom did. 552 00:30:06,320 --> 00:30:08,400 Speaker 4: So let's just show what Qualcom had to say, or 553 00:30:08,400 --> 00:30:10,800 Speaker 4: at least some of it. And you know, it's kind 554 00:30:10,840 --> 00:30:14,800 Speaker 4: of fighting talk, right, it's them saying that. You know, 555 00:30:14,840 --> 00:30:17,120 Speaker 4: it's it's trying to strong arm a long time partner. 556 00:30:17,560 --> 00:30:18,720 Speaker 4: And this is the bit I want to talk to 557 00:30:18,800 --> 00:30:22,560 Speaker 4: you about interfere with our performance leading CPUs and then 558 00:30:22,600 --> 00:30:25,840 Speaker 4: we can get to the royalty rates bite. Quilcom is 559 00:30:25,880 --> 00:30:27,760 Speaker 4: not the same company today that it was when I 560 00:30:27,800 --> 00:30:31,320 Speaker 4: moved to California six years ago. It's tried to diversify 561 00:30:31,360 --> 00:30:34,960 Speaker 4: its business and the Nuvia acquisition and it's sort of 562 00:30:35,080 --> 00:30:37,760 Speaker 4: change of what the technology offers of the smartphones core 563 00:30:37,840 --> 00:30:40,240 Speaker 4: to that. Could you just speak about how you view 564 00:30:40,320 --> 00:30:43,800 Speaker 4: Quilcom and it's placed in this smartphone market for Android. 565 00:30:44,400 --> 00:30:44,880 Speaker 5: Yeah, I know you. 566 00:30:45,040 --> 00:30:47,000 Speaker 13: So they're pretty dominant. They own they own the whole 567 00:30:47,040 --> 00:30:52,680 Speaker 13: flagship space, particularly the flagships in smartphones where the asps 568 00:30:52,680 --> 00:30:55,080 Speaker 13: are higher. They've also been, you know, the whole space 569 00:30:55,120 --> 00:30:58,200 Speaker 13: has been making this push toward AI smartphones. And we 570 00:30:58,240 --> 00:31:01,440 Speaker 13: can argue, do people want to AI smartphones does a 571 00:31:01,520 --> 00:31:04,560 Speaker 13: driving upgrade cycle, But increasingly when people go out to 572 00:31:04,560 --> 00:31:07,120 Speaker 13: buy smartphones, they're gonna buy AI smartphones because that's what's 573 00:31:07,120 --> 00:31:09,640 Speaker 13: going to be for sale. And the content I think 574 00:31:09,680 --> 00:31:12,760 Speaker 13: is materially hiring some of those ones versus phones without 575 00:31:12,760 --> 00:31:15,720 Speaker 13: the the AI functionality and so, and that's a big 576 00:31:15,760 --> 00:31:19,560 Speaker 13: area where like some of the Nuvia architectural expertise is 577 00:31:19,560 --> 00:31:21,360 Speaker 13: coming in in terms of performance and everything else. We 578 00:31:21,360 --> 00:31:23,800 Speaker 13: saw some of the benchmarks from some of the new 579 00:31:23,840 --> 00:31:25,640 Speaker 13: stuff that they announced earlier this week, and why are 580 00:31:25,680 --> 00:31:26,880 Speaker 13: you like the parts look really good? 581 00:31:27,840 --> 00:31:28,000 Speaker 11: Right? 582 00:31:28,400 --> 00:31:31,120 Speaker 13: That's kind of what and whether they're not just isolating 583 00:31:31,160 --> 00:31:34,720 Speaker 13: Nubia though too smartphones. Clearly they've already launched PC chips 584 00:31:34,880 --> 00:31:36,880 Speaker 13: AI and they're gonna be rolling down across the rest 585 00:31:36,920 --> 00:31:40,200 Speaker 13: of their increasingly diversified portfolio auto and IoT and like 586 00:31:40,240 --> 00:31:40,800 Speaker 13: everything else. 587 00:31:40,880 --> 00:31:43,800 Speaker 4: Yeah, and I just point out, as we let you go, Stacey, 588 00:31:43,880 --> 00:31:47,040 Speaker 4: that ARM shares are actually lower than Qualcom shares in 589 00:31:47,080 --> 00:31:49,320 Speaker 4: this whole situation this morning. A great heavy back on 590 00:31:49,360 --> 00:31:53,360 Speaker 4: Bloomberg's technology. Stacey Rasco On, senior analysts at Bernstein Research, 591 00:31:53,440 --> 00:31:55,600 Speaker 4: Thank you very much. All Right, coming back up on 592 00:31:55,640 --> 00:31:59,280 Speaker 4: the show, Wave CEO and co founder Alex Kendall, We're 593 00:31:59,280 --> 00:32:02,280 Speaker 4: going to talk about a UK company making moves in 594 00:32:02,320 --> 00:32:04,880 Speaker 4: autonomous driving that's coming up next. 595 00:32:04,920 --> 00:32:05,560 Speaker 5: Stay with us. 596 00:32:05,760 --> 00:32:24,800 Speaker 4: This is Bluebow Technology, Okay, automotive AI maker Wave is 597 00:32:24,840 --> 00:32:28,520 Speaker 4: making its way to Silicon Valley, the London based startups, 598 00:32:28,560 --> 00:32:33,400 Speaker 4: expanding it's road testing and opening a new office in Sunnyvale, California. 599 00:32:33,680 --> 00:32:36,800 Speaker 4: Alex Kendall's the Wave co founder and CEO and joins 600 00:32:36,880 --> 00:32:40,000 Speaker 4: us now from the UK. And what's so interesting about 601 00:32:40,040 --> 00:32:44,000 Speaker 4: Wave is no focus on the hardware, no focus on 602 00:32:44,040 --> 00:32:47,960 Speaker 4: the cars, just the foundation model, the robotic brain that 603 00:32:48,040 --> 00:32:51,360 Speaker 4: helps a car learn how to drive itself. Let's start 604 00:32:51,360 --> 00:32:53,960 Speaker 4: by asking why you felt you needed to bring your 605 00:32:54,280 --> 00:32:57,440 Speaker 4: testing to California, to the streets of San Francisco. 606 00:32:59,080 --> 00:33:01,840 Speaker 14: Hey, Well, we're excited to bring a fresh approach to 607 00:33:01,880 --> 00:33:06,040 Speaker 14: the US market. I think in general, being able to 608 00:33:06,080 --> 00:33:08,720 Speaker 14: operate an AI and about to test it in such 609 00:33:08,720 --> 00:33:11,600 Speaker 14: a diverse market as the US is going to be 610 00:33:11,640 --> 00:33:13,600 Speaker 14: awesome for US. We really want to push the boundaries 611 00:33:13,640 --> 00:33:17,280 Speaker 14: of generalization. The neat thing about this approach is that 612 00:33:17,600 --> 00:33:21,480 Speaker 14: it can allow all ranges of automation from driver assistance 613 00:33:21,560 --> 00:33:24,560 Speaker 14: up to full autonomy, with different types of vehicles and 614 00:33:24,640 --> 00:33:28,200 Speaker 14: different driving environments, with different cultures. And you know, look, 615 00:33:28,200 --> 00:33:31,840 Speaker 14: we're now training from data from over fifteen countries. But 616 00:33:31,920 --> 00:33:34,040 Speaker 14: to be able to actually have a testing fleet on 617 00:33:34,080 --> 00:33:37,120 Speaker 14: the ground and show that AI can generalize and drive 618 00:33:37,160 --> 00:33:40,520 Speaker 14: in a new environment like the US in California, this 619 00:33:40,960 --> 00:33:42,760 Speaker 14: is a really exciting moment for our business. 620 00:33:43,280 --> 00:33:44,840 Speaker 5: I'll set out the pathway from here. 621 00:33:44,880 --> 00:33:48,200 Speaker 4: You're going to start with basically level two plas kind 622 00:33:48,240 --> 00:33:52,160 Speaker 4: of ADAS functionality, so you don't need a DMV permit. 623 00:33:52,560 --> 00:33:54,880 Speaker 4: But what are the next stages, how will you expand 624 00:33:54,960 --> 00:33:58,120 Speaker 4: the testing and what's your ultimate goal for the California market? 625 00:33:59,440 --> 00:34:02,240 Speaker 14: Yeah, fun mentally waves building an embodied AI. This is 626 00:34:02,280 --> 00:34:07,360 Speaker 14: an AI that brings brings it out of the out 627 00:34:07,360 --> 00:34:09,960 Speaker 14: of the Internet and into the physical world to be 628 00:34:10,000 --> 00:34:13,319 Speaker 14: able to drive and operate vehicles. And this is an 629 00:34:13,320 --> 00:34:16,000 Speaker 14: AI that can understand the physical world can drive with 630 00:34:16,040 --> 00:34:18,959 Speaker 14: different types of sensors. And what's really exciting for us 631 00:34:19,400 --> 00:34:22,760 Speaker 14: is that while we want to deployed in a range 632 00:34:22,760 --> 00:34:27,880 Speaker 14: of range of automotive products, the latest vehicles that have 633 00:34:27,960 --> 00:34:31,759 Speaker 14: been produced by the industry have GPUs surround cameras and 634 00:34:31,840 --> 00:34:36,879 Speaker 14: radar sensors and actually the perfect deployment environment to reap 635 00:34:36,920 --> 00:34:39,640 Speaker 14: the benefits of this AI. So the bresh model we 636 00:34:39,680 --> 00:34:41,480 Speaker 14: want to bring is a software model. We can see 637 00:34:41,480 --> 00:34:44,799 Speaker 14: this AI deployed in vehicles, deployed as driver resistance and 638 00:34:44,960 --> 00:34:47,719 Speaker 14: use that experience and exposure to improve the quality of 639 00:34:47,760 --> 00:34:51,200 Speaker 14: system over time and ultimately bring us to this autonomous 640 00:34:51,200 --> 00:34:52,120 Speaker 14: future we all dream of. 641 00:34:52,960 --> 00:34:55,200 Speaker 4: You've raised more than a billion dollars from the lights 642 00:34:55,239 --> 00:34:58,760 Speaker 4: of soft Bank and Verdia. Uber recently topped up the round. 643 00:34:59,120 --> 00:35:02,120 Speaker 4: How quickly through that and where's the money going? 644 00:35:03,480 --> 00:35:06,160 Speaker 14: Yeah, Look, we've been a fairly disciplined company for the 645 00:35:06,200 --> 00:35:09,880 Speaker 14: last seven years. Seven years ago, we had the thesis 646 00:35:09,880 --> 00:35:11,640 Speaker 14: of going all in on an end to end AI 647 00:35:11,719 --> 00:35:15,040 Speaker 14: approach for autonomous driving, and it's something that we've been 648 00:35:15,040 --> 00:35:18,439 Speaker 14: building out and pioneering some really interesting approaches that allow 649 00:35:18,520 --> 00:35:21,640 Speaker 14: us to be more data efficient, to learn from simulation 650 00:35:22,000 --> 00:35:26,000 Speaker 14: and generative AI. And so while we're seeing a lot 651 00:35:26,000 --> 00:35:28,279 Speaker 14: of expansion and growth in the amount of data we're 652 00:35:28,320 --> 00:35:31,479 Speaker 14: training on, we want to continue to make a lean 653 00:35:31,560 --> 00:35:34,960 Speaker 14: and cost effective solution possible to come to market. And 654 00:35:35,080 --> 00:35:37,000 Speaker 14: of course, the partners that we've got in the US 655 00:35:37,040 --> 00:35:39,319 Speaker 14: that also make this really interesting for us to be 656 00:35:39,320 --> 00:35:41,560 Speaker 14: able to operate in the same market closer to our 657 00:35:41,600 --> 00:35:45,120 Speaker 14: partners like Uber, Nvidia, and Microsoft that have been really 658 00:35:45,200 --> 00:35:47,600 Speaker 14: key past this journey to power our compute and the 659 00:35:47,600 --> 00:35:50,560 Speaker 14: fleet learning of these systems is going to be so critical. 660 00:35:50,719 --> 00:35:53,000 Speaker 4: Wave CEO Alex Candal, It's great to have you here 661 00:35:53,040 --> 00:36:04,800 Speaker 4: on Bloombo Technology. Keep us posted on your progress. Happening 662 00:36:04,800 --> 00:36:08,080 Speaker 4: today in Sa Paulo, Brazil, the B twenty Business Forum, 663 00:36:08,120 --> 00:36:10,000 Speaker 4: Bloomberg's Jamana Bassetchi is. 664 00:36:09,960 --> 00:36:12,920 Speaker 5: There live with a very special guest, Jamana. 665 00:36:13,000 --> 00:36:13,239 Speaker 8: Thank you. 666 00:36:13,440 --> 00:36:13,799 Speaker 5: Ed Yeah. 667 00:36:13,840 --> 00:36:17,040 Speaker 3: Joining me right now is the Google Brazil president, Pablo Coelo. 668 00:36:17,239 --> 00:36:18,000 Speaker 8: Great to have you. 669 00:36:17,960 --> 00:36:19,120 Speaker 5: With us, Thank you, Jama. 670 00:36:19,320 --> 00:36:21,760 Speaker 3: Let me just start off by talking about the Brazil 671 00:36:21,920 --> 00:36:25,040 Speaker 3: landscape as a whole. Brazil is probably the most advanced 672 00:36:25,080 --> 00:36:27,200 Speaker 3: digital economy in all of Latin America. 673 00:36:27,800 --> 00:36:29,880 Speaker 8: What circumstances have allowed for that to happen. 674 00:36:30,320 --> 00:36:30,520 Speaker 5: Well. 675 00:36:30,560 --> 00:36:32,840 Speaker 1: First, it's a large market. We have two hundred and 676 00:36:33,080 --> 00:36:37,399 Speaker 1: plus million people. Second, it's a country has suffered through 677 00:36:37,400 --> 00:36:41,840 Speaker 1: inflation until the nineties, which drove a lot of the automation, 678 00:36:42,080 --> 00:36:44,640 Speaker 1: and then the technology was employed to make sure that 679 00:36:44,680 --> 00:36:47,360 Speaker 1: people would make the most out of their money, be 680 00:36:47,480 --> 00:36:51,000 Speaker 1: that the financial sector or users. And third, because Brazilians 681 00:36:51,000 --> 00:36:54,160 Speaker 1: are extremely entrepreneurs and they like technology, and we have 682 00:36:54,200 --> 00:36:56,680 Speaker 1: a case with Google, Jamana. Google has been around for 683 00:36:56,760 --> 00:36:59,840 Speaker 1: nineteen years and our platforms have a very good relationship 684 00:36:59,840 --> 00:37:00,520 Speaker 1: with resiliences. 685 00:37:00,560 --> 00:37:03,399 Speaker 3: What role do you see specifically for Google in terms 686 00:37:03,440 --> 00:37:06,040 Speaker 3: of driving the digital transformation right now in the country. 687 00:37:06,760 --> 00:37:09,520 Speaker 1: There are so many rules. One is two empowered citizens. 688 00:37:09,600 --> 00:37:12,040 Speaker 1: We have our platforms here are top five in the 689 00:37:12,080 --> 00:37:15,200 Speaker 1: world for most of them. Brazilians have a love affair 690 00:37:15,280 --> 00:37:20,160 Speaker 1: with technology and with Google platforms YouTube for example. Success. Also, 691 00:37:20,160 --> 00:37:22,759 Speaker 1: it's important that we're able to empower business to be 692 00:37:22,800 --> 00:37:26,840 Speaker 1: able to become more efficient. Efficiency in an economy like 693 00:37:26,880 --> 00:37:29,160 Speaker 1: the Brazilian one, which is an emerging market is also 694 00:37:29,200 --> 00:37:33,279 Speaker 1: pretty important. And we have now Brazilians very eager to 695 00:37:33,360 --> 00:37:35,960 Speaker 1: adopt AI as the next wave of technology, and they're 696 00:37:36,040 --> 00:37:37,640 Speaker 1: very optimist about the use of AI. 697 00:37:37,960 --> 00:37:38,640 Speaker 8: Yeah, well, let me. 698 00:37:38,560 --> 00:37:41,480 Speaker 3: Ask you about that, because on one hand, AI can 699 00:37:42,120 --> 00:37:45,440 Speaker 3: increase efficiencies, increase productivity, but on the other hands there 700 00:37:45,440 --> 00:37:49,080 Speaker 3: are also concerns about privacy, about data protection. 701 00:37:49,360 --> 00:37:52,000 Speaker 8: So how do you see the path forward for AI? 702 00:37:52,560 --> 00:37:55,440 Speaker 1: Well, I think it starts with the right principles. We 703 00:37:55,480 --> 00:37:58,000 Speaker 1: need to be bold and at the same time responsible 704 00:37:58,040 --> 00:38:02,879 Speaker 1: about the use of AI. Google has adhere to the 705 00:38:02,880 --> 00:38:07,600 Speaker 1: ethical principles of AI utilization, which is important. And the 706 00:38:07,640 --> 00:38:11,960 Speaker 1: third very important is to have a dialogue around society 707 00:38:12,000 --> 00:38:15,520 Speaker 1: to make sure that regulations are in place, but in 708 00:38:15,520 --> 00:38:18,480 Speaker 1: a way that they are discussed with the society. We 709 00:38:18,600 --> 00:38:22,200 Speaker 1: have the brazil Marco CIV which the Internet built is 710 00:38:22,200 --> 00:38:26,239 Speaker 1: a net framework bill. It's now celebrating ten years of existence, 711 00:38:26,520 --> 00:38:29,000 Speaker 1: and that was a very good example of how to 712 00:38:29,040 --> 00:38:32,520 Speaker 1: conduct a process to create regulations. We involve the society, 713 00:38:32,800 --> 00:38:36,480 Speaker 1: we involve businesses as developers, politicians, and we get to 714 00:38:36,560 --> 00:38:38,960 Speaker 1: the best model in such emergent technology. 715 00:38:39,000 --> 00:38:41,480 Speaker 3: Well, there was a high profile case recently in Brazil 716 00:38:42,239 --> 00:38:46,080 Speaker 3: of a hit for tat that went on between elon 717 00:38:46,160 --> 00:38:49,919 Speaker 3: mus X platform and the Brazilian regulator over concerns about 718 00:38:49,960 --> 00:38:55,160 Speaker 3: dissemination of fake news and of hate speech. Specifically, what 719 00:38:55,239 --> 00:38:59,640 Speaker 3: is Google doing to combat the proliferation of all of 720 00:38:59,640 --> 00:39:02,200 Speaker 3: that hate speech, of this information, of fake news. 721 00:39:02,520 --> 00:39:03,960 Speaker 8: What guardrails do you have in place? 722 00:39:04,320 --> 00:39:06,880 Speaker 1: The most important, thank is one we have to respect 723 00:39:06,880 --> 00:39:10,000 Speaker 1: the law. So we work, we fight, and we remove 724 00:39:10,120 --> 00:39:17,200 Speaker 1: anything that is related to hate crime, racism, violence, all 725 00:39:17,239 --> 00:39:19,799 Speaker 1: types of crimes that we need to adhere to the law. 726 00:39:20,400 --> 00:39:23,080 Speaker 1: That's a basic. Then we have platform rules, and then 727 00:39:23,120 --> 00:39:26,200 Speaker 1: we invest in good content, quality content. We have partnerships 728 00:39:26,280 --> 00:39:30,319 Speaker 1: in Brazil with more than one hundred and seventy five publishers. 729 00:39:30,719 --> 00:39:33,839 Speaker 1: Because good content needs to go up to be able 730 00:39:33,880 --> 00:39:37,640 Speaker 1: to show that we educate the consumers, help consumers to 731 00:39:37,680 --> 00:39:40,920 Speaker 1: get the best out of our platforms. Bad content needs 732 00:39:40,920 --> 00:39:44,400 Speaker 1: to either be the prioritized or in cases where we 733 00:39:44,440 --> 00:39:48,319 Speaker 1: see reason and justice sees reason, remove that. 734 00:39:48,960 --> 00:39:50,920 Speaker 8: Let me just ask you at the group level. 735 00:39:50,960 --> 00:39:53,640 Speaker 3: The Department of Justice in the US has launched an 736 00:39:53,640 --> 00:39:58,200 Speaker 3: investigation into Alphabet's practices. There are concerns that one of 737 00:39:58,239 --> 00:40:01,000 Speaker 3: the ramifications could be an eventual up with the company 738 00:40:01,160 --> 00:40:03,120 Speaker 3: due to practices that are put in place. 739 00:40:03,320 --> 00:40:05,640 Speaker 8: What is your level of concern about that actually happening? 740 00:40:05,880 --> 00:40:08,320 Speaker 1: You know, Jamana, I'm not in a position to discuss 741 00:40:08,640 --> 00:40:11,399 Speaker 1: the global rules. I'm responsible for Brazil, but I think 742 00:40:11,440 --> 00:40:14,600 Speaker 1: Google has declared quite well. It has put in blog 743 00:40:14,640 --> 00:40:16,200 Speaker 1: posts all the information about this. 744 00:40:17,239 --> 00:40:20,200 Speaker 3: Let me just ask you then, in Brazil specifically, do 745 00:40:20,239 --> 00:40:22,960 Speaker 3: you think the regulator is getting the balance rights between 746 00:40:23,200 --> 00:40:25,520 Speaker 3: innovation and safeguarding consumers. 747 00:40:25,600 --> 00:40:28,879 Speaker 1: We have been very pleased with our relationship with regulators. 748 00:40:29,040 --> 00:40:30,080 Speaker 13: We have being. 749 00:40:29,960 --> 00:40:33,200 Speaker 1: Involved in dialogues every time we have the chance to discuss. 750 00:40:33,880 --> 00:40:37,040 Speaker 1: We work together with the Supreme Court, with the Electoral Court, 751 00:40:37,280 --> 00:40:40,239 Speaker 1: with the Senate, with the lower House to make sure 752 00:40:40,280 --> 00:40:44,800 Speaker 1: that we all understand and come to a common denominator. 753 00:40:45,200 --> 00:40:48,080 Speaker 1: This is important because this is new and we need 754 00:40:48,120 --> 00:40:50,279 Speaker 1: to make sure that in a way we get the 755 00:40:50,400 --> 00:40:55,520 Speaker 1: responsible approach. But we do not castrate the ecosystem of 756 00:40:55,560 --> 00:40:58,239 Speaker 1: innovation and development, which is so important in Brazil. That 757 00:40:58,280 --> 00:41:01,399 Speaker 1: we finished that by saying we have. However, Google has 758 00:41:01,480 --> 00:41:03,640 Speaker 1: helped with a campus that we have in Staballa. For 759 00:41:03,640 --> 00:41:06,480 Speaker 1: the left eighty years, we have accelerated four hundred and 760 00:41:06,480 --> 00:41:08,880 Speaker 1: fifty companies here. So it means that there is a 761 00:41:08,960 --> 00:41:11,040 Speaker 1: very entrepreneurial up in Brazil and we want to make 762 00:41:11,040 --> 00:41:12,000 Speaker 1: sure it stays that way. 763 00:41:12,160 --> 00:41:14,480 Speaker 3: Great, that's a good place to leave at Pablo the 764 00:41:14,640 --> 00:41:17,080 Speaker 3: Google president over here in Brazil. 765 00:41:17,280 --> 00:41:18,319 Speaker 8: Ed, I'll toss it back to you. 766 00:41:19,520 --> 00:41:22,600 Speaker 4: Bloomberg Jermanamber said she in salth Paolo with Fabio Coelo, 767 00:41:22,960 --> 00:41:24,280 Speaker 4: the president of Google Brazil. 768 00:41:24,320 --> 00:41:25,040 Speaker 5: Thanks to you both. 769 00:41:25,120 --> 00:41:27,120 Speaker 4: Okay, check out live go to get more from B 770 00:41:27,280 --> 00:41:31,880 Speaker 4: twenty coming up, Ambassador Catherine Tie in conversation with Bloomberg's 771 00:41:32,120 --> 00:41:34,400 Speaker 4: Stephanie Flanders. That's one that you do not want to 772 00:41:34,400 --> 00:41:37,560 Speaker 4: miss coming out of B twenty. Wow, jampacks show. That 773 00:41:37,640 --> 00:41:40,560 Speaker 4: does it for this edition of Bloomberg Technology. You know 774 00:41:40,560 --> 00:41:42,800 Speaker 4: where to recap the show on the podcast, of course, 775 00:41:43,040 --> 00:41:44,799 Speaker 4: you know where to find it on the terminal, on 776 00:41:44,800 --> 00:41:48,400 Speaker 4: the Bloomberg platforms, but also online at Apple, Spotify and 777 00:41:48,520 --> 00:41:51,520 Speaker 4: iHeart from San Francisco and thanks to the team in 778 00:41:51,520 --> 00:41:51,879 Speaker 4: New York. 779 00:41:51,920 --> 00:41:53,080 Speaker 5: This is Bloomberg Technology.