WEBVTT - Arm, Qualcomm Feud Escalates 0:00:02.480 --> 0:00:09.880 Bloomberg Audio, Studios, Podcasts, radio news. 0:00:08.600 --> 0:00:13.280 From Marhart where Innovation, money and power Collie in Silicon Valley. 0:00:13.440 --> 0:00:13.880 NBN. 0:00:14.200 --> 0:00:17.720 This is Bloomberg Technology with Caroline Hyde and Ed. 0:00:17.760 --> 0:00:36.080 Ludlow live from San Francisco. This is Bloomberg Technology. Coming 0:00:36.120 --> 0:00:38.880 up on the show, the latest on ARM and Qualcom 0:00:38.880 --> 0:00:42.360 after a key tech license deal is canceled, and why 0:00:42.440 --> 0:00:45.640 some analysts predict a tough road ahead for Tesla ahead 0:00:45.640 --> 0:00:48.400 of its earnings report. Plus, We're live at B twenty 0:00:48.440 --> 0:00:51.720 and South Paulo with a conversation with Google Brazil's president, 0:00:52.000 --> 0:00:53.040 Fabio Coello. 0:00:53.479 --> 0:00:55.240 Let's get to our top story. 0:00:55.360 --> 0:00:58.600 Shares of chip maker Qualcom and chip design firm ARM 0:00:58.920 --> 0:01:02.880 are both lower morning, Bloomberg reporting that ARM canceled a 0:01:03.000 --> 0:01:07.400 license issued to its longtime partner Qualcom, potentially leaving the 0:01:07.480 --> 0:01:12.080 leader in Android smartphone processes without key intellectual property to 0:01:12.160 --> 0:01:15.800 design chips. The showdown could hit the finances of both 0:01:15.840 --> 0:01:18.559 companies and comes ahead of a breach of contract trial 0:01:18.840 --> 0:01:23.360 in December. That dispute centers around an acquisition Qualcom made 0:01:23.480 --> 0:01:27.039 of another chip firm that was already licensing ARMED designs, 0:01:27.280 --> 0:01:31.280 and those blueprints then passing on to Qualcomm. Bloomberg Intelligence 0:01:31.319 --> 0:01:35.200 senior chip analyst Counjan Sabanni has published his React research 0:01:35.280 --> 0:01:39.839 with colleagues in response to that licensed cancelation and joins 0:01:39.920 --> 0:01:42.640 us on set in San Francisco. Let's start with your 0:01:42.680 --> 0:01:46.720 reaction the news with significant overnight investors do not like it. 0:01:46.840 --> 0:01:50.120 Clearly the timing is a surprise. What do you make 0:01:50.120 --> 0:01:50.360 of it? 0:01:50.760 --> 0:01:53.200 I mean the timing of the notice for the December 0:01:53.240 --> 0:01:55.920 sixteen trial, which is almost two months of This doesn't 0:01:55.960 --> 0:01:58.480 seem like a coincidence to us. This seems as a 0:01:58.520 --> 0:02:01.880 pressure tactic for arm on Qualcom. But bring this to 0:02:01.920 --> 0:02:04.040 a settlement before even the trial begins. 0:02:04.360 --> 0:02:09.440 This is a technology story, and historically Quialdcom is used 0:02:09.600 --> 0:02:13.000 armed designs for its chips until this week when it 0:02:13.000 --> 0:02:18.040 announced its latest generation processes which relate to that acquisition. 0:02:18.160 --> 0:02:19.639 It's a company called Nuvia. 0:02:19.720 --> 0:02:24.560 I spoke to the Qualcom CEO, Carsiano Amon yesterday prior 0:02:24.600 --> 0:02:25.639 to this news coming out. 0:02:25.680 --> 0:02:26.480 You're aware of that. 0:02:26.720 --> 0:02:29.200 Let's just very quickly listen to what he said about 0:02:29.440 --> 0:02:31.720 the company's technology strategy. 0:02:32.560 --> 0:02:35.640 So we went from fault took course to the BC's 0:02:36.120 --> 0:02:39.200 and now industrial and that has been part of a 0:02:39.240 --> 0:02:43.240 strategy we did all organically. With some of the small acquisitions, 0:02:43.440 --> 0:02:46.839 we feel we have a very competitive roadmap and we're 0:02:46.840 --> 0:02:50.200 thinking about the new what is the new innovation that 0:02:50.320 --> 0:02:52.040 is coming through those markets. 0:02:53.919 --> 0:02:57.840 The acquisition he's referencing there was Nuvia. Just explain the 0:02:57.880 --> 0:03:01.240 basics of that deal and now why the timing of 0:03:01.280 --> 0:03:03.160 this piece of news is so significant. 0:03:03.400 --> 0:03:06.240 So Nuvia designs were based on ARM architecture and they 0:03:06.280 --> 0:03:10.919 had a license with ARM. When Qualcom acquired Nuvia. ARM 0:03:11.639 --> 0:03:14.040 issue what that the license was on a much lower 0:03:14.120 --> 0:03:16.799 rate than what it had with Qualcomm. Now, Qualcom did 0:03:16.880 --> 0:03:20.440 reiterate and build on top of the Nubia architecture, which 0:03:20.440 --> 0:03:23.000 they are now calling sort of their own designs. So 0:03:23.040 --> 0:03:26.760 the issue here is that the license agreement based on 0:03:26.800 --> 0:03:29.400 which the Orion chips were built on, we're at a 0:03:29.440 --> 0:03:32.079 much lower rate and ARM is demanding a higher rate 0:03:32.120 --> 0:03:36.040 comparable to what Qualcom is paying on its ARM based designs. 0:03:36.600 --> 0:03:40.080 This is a complicated story, and it's complicated for vanists 0:03:40.120 --> 0:03:42.480 like you covering. This is what Calcom had to say 0:03:42.800 --> 0:03:46.360 in response to the Bloomberg reporting and its fighting talk. 0:03:46.480 --> 0:03:48.880 As you'd imagine, this is more of the same from 0:03:48.880 --> 0:03:52.839 our more unfounded threats designed to strong arm a long 0:03:52.920 --> 0:03:57.280 time partner, interfere with our performance leading CPUs and increase 0:03:57.400 --> 0:04:01.760 royalty rates regardless of the broad right under our architectural license. 0:04:01.800 --> 0:04:03.080 They go on to say other things. 0:04:03.200 --> 0:04:04.840 I think the main point is we are headed to 0:04:04.880 --> 0:04:08.560 trial in December on the royalty rates piece. 0:04:09.240 --> 0:04:10.760 How do you see this playing out? 0:04:11.160 --> 0:04:14.280 Armed does not want to lose money with Qualcom going 0:04:14.320 --> 0:04:18.840 with different designs, right. Qualcomm is the most important smartphone 0:04:18.920 --> 0:04:21.120 processor maker when it comes to Android platform. 0:04:21.240 --> 0:04:23.760 There's quite a lot at stake here. 0:04:24.680 --> 0:04:27.760 Definitely for ARMED Qualcom it's number one customers with about 0:04:27.760 --> 0:04:30.520 three hundred and twenty million in revenues. 0:04:30.080 --> 0:04:31.880 Last year, so it does. 0:04:31.560 --> 0:04:34.119 Not definitely want the number one customer to go away. 0:04:34.240 --> 0:04:38.440 But we don't think that a litigation where blocking Qualcom's 0:04:38.480 --> 0:04:41.719 ability to ship chips based on the ARM arguement is 0:04:41.839 --> 0:04:44.640 more likely because it does not just impact Qualcom, but 0:04:44.680 --> 0:04:47.400 it impacts the entire industry. I mean imagine a scenario 0:04:47.480 --> 0:04:51.080 where phonemakers cannot get qual Comb chips in which they 0:04:51.080 --> 0:04:54.080 are getting ready for the next generation of AI smartphones. 0:04:54.279 --> 0:04:57.200 I should add the ARM decline to comment on the 0:04:57.240 --> 0:05:00.880 reporting that was Congensubani of Bloomberg Intelligence the analysis, and 0:05:00.960 --> 0:05:03.400 later in the show we'll go deeper on that Bloomberg 0:05:03.440 --> 0:05:06.560 reporting on the story. Let's talk a bit about markets 0:05:06.600 --> 0:05:08.120 and then the invested attitude. 0:05:07.680 --> 0:05:08.640 Toward the chip sector. 0:05:08.880 --> 0:05:12.600 Hillary Frisch, senior Research analysts for Software Services and Enterprise 0:05:12.680 --> 0:05:15.480 Tech at clear Bridge, joins us. And it's so interesting 0:05:15.520 --> 0:05:19.360 because there's a lot of noise and single name specific noise, 0:05:19.600 --> 0:05:23.800 but actually those headwinds are offset by massive tailwinds for 0:05:23.839 --> 0:05:27.719 the chip sector, largely related to the enterprise investment in 0:05:27.800 --> 0:05:28.719 AI infrastructure. 0:05:28.760 --> 0:05:31.520 Hillary, Yes, they absolutely are. I agree with you one 0:05:31.600 --> 0:05:32.200 hundred percent. 0:05:34.160 --> 0:05:36.640 Where are you focusing? Go ahead, please continue. 0:05:37.600 --> 0:05:45.480 Yeah, we're seeing growing demand indications for demand for cloud migrations, 0:05:45.520 --> 0:05:49.400 demand for AI, more AI projects going into production. There's 0:05:49.400 --> 0:05:52.080 a lot of debate around that, but all there's more 0:05:52.120 --> 0:05:55.200 activity now than there was six months ago. There's more 0:05:55.400 --> 0:05:57.839 likely to go into production in the first half of 0:05:57.839 --> 0:06:00.040 the year than second half of this year, So so 0:06:00.400 --> 0:06:01.960 those RULs are really starting to move. 0:06:03.120 --> 0:06:05.240 Where I would like to talk about qual Con with you, 0:06:05.560 --> 0:06:10.560 is this debate about how we as consumers will use AI. 0:06:11.279 --> 0:06:14.039 To Qualcomm's mind, it is on device, of course, it 0:06:14.120 --> 0:06:16.719 is that's their entire business, right, But they see a 0:06:16.760 --> 0:06:19.800 world where within five years all of us having an 0:06:19.839 --> 0:06:23.080 AI smartphone. When you look at the markets and you 0:06:23.120 --> 0:06:27.120 look at the names across the technology sector, is that 0:06:27.240 --> 0:06:30.000 a part of your thesis and your investment approach, that 0:06:30.080 --> 0:06:32.640 idea that we're on device sooner rather than later. 0:06:33.880 --> 0:06:39.280 I think the requirements for efficiency in processing, Jenny, I 0:06:39.360 --> 0:06:43.160 will require that processing occur everywhere, including on the device. 0:06:43.960 --> 0:06:47.240 There's clearly going to be a tremendous amount of centralized 0:06:47.279 --> 0:06:52.960 processing out the hyperscalers themselves at ancillary clouds with larger 0:06:52.960 --> 0:06:56.200 and smaller models, and there's going to be a diversity 0:06:56.279 --> 0:06:59.440 within the ecosystem. But absolutely the device is part of 0:06:59.440 --> 0:07:00.000 the thesis. 0:07:00.320 --> 0:07:04.080 There are interesting parts of the enterprise software space as well, 0:07:04.560 --> 0:07:08.280 where everyone is sticking the letters A and I in 0:07:08.360 --> 0:07:10.080 front of existing products. 0:07:10.600 --> 0:07:12.560 Are you finding it. 0:07:12.440 --> 0:07:18.120 Possible to discern what is tangibly good, new, impressive, and 0:07:18.160 --> 0:07:19.320 what is just marketing? 0:07:19.800 --> 0:07:23.160 It's such a good question, ed. There is a tremendous 0:07:23.200 --> 0:07:28.320 amount of marketing speak, fud hopes, dreams, and promises. But 0:07:28.360 --> 0:07:31.960 at the end of the day, what is interesting about 0:07:31.960 --> 0:07:35.280 this cycle versus prior cycles, first and foremost is just 0:07:35.320 --> 0:07:40.400 how quickly, incumbents have moved to embrace Jenai, to incorporate 0:07:40.360 --> 0:07:42.880 it into their product lines. Some key incumbents like Microsoft 0:07:42.880 --> 0:07:47.200 and Salesforce, have pivoted their entire organizations around Jenai. They've 0:07:47.240 --> 0:07:51.160 re architected their R and D efforts around it, seemingly overnight, 0:07:51.240 --> 0:07:54.480 let's call it within a year or a little less 0:07:54.560 --> 0:07:57.160 and even longer for Microsoft. But at the end of 0:07:57.160 --> 0:08:03.520 the day, there's a trumanous amount of activity the incumbents. Actually, 0:08:03.560 --> 0:08:05.880 there's a lot of debate over who will win, who 0:08:05.920 --> 0:08:08.760 will lose. There's a lot of investor focus on the 0:08:08.760 --> 0:08:12.680 potential disintermediation of incumbents, but they bring a lot to 0:08:12.760 --> 0:08:16.560 bear this time around, not just the data, not just 0:08:16.600 --> 0:08:19.800 the workflows, not just the customer trust, not just that 0:08:19.880 --> 0:08:22.280 whole end of it. But Jenny I, at the end 0:08:22.280 --> 0:08:24.480 of the day, isn't just about a building a bot 0:08:24.600 --> 0:08:27.960 or a NAP or an interface. It's about the complexity 0:08:28.360 --> 0:08:32.000 of the back end and that entire orchestration, the provisioning, 0:08:32.080 --> 0:08:34.199 the identities and all the things that go along with it, 0:08:34.480 --> 0:08:37.440 which is very hard to do. So that's the key 0:08:37.520 --> 0:08:40.080 of part of what I'm looking for. Who can handle 0:08:40.520 --> 0:08:44.280 the entirety of the complexity of what looks very simple 0:08:44.320 --> 0:08:47.080 on the front end of say an agent and how 0:08:47.120 --> 0:08:50.040 they will succeed in that. And we're gauging that process 0:08:50.080 --> 0:08:51.960 as we grow as we go. But so for all, 0:08:52.000 --> 0:08:53.640 the early indications are fairly. 0:08:53.400 --> 0:08:56.000 Promising and how they handle it. 0:08:56.080 --> 0:09:00.720 Let's end the conversation by asking what happens next across 0:09:00.720 --> 0:09:03.640 the field of software enterprising the hardware names you cover, 0:09:04.440 --> 0:09:07.320 how primed are we for more M and A and 0:09:07.400 --> 0:09:08.239 more consolidation. 0:09:09.800 --> 0:09:10.640 It looks as. 0:09:10.480 --> 0:09:13.520 Though we're primed for more M and A and consolidation 0:09:13.640 --> 0:09:16.000 going forward. That would have been the natural inclination to 0:09:16.040 --> 0:09:20.560 start with. We've had a sluggish spending environment, most certainly 0:09:20.559 --> 0:09:23.440 for a variety of reasons. I think the elections have been. 0:09:23.280 --> 0:09:23.720 Part of that. 0:09:23.760 --> 0:09:25.440 There are a lot of factors that are part of that, 0:09:25.480 --> 0:09:29.559 as including a wholesale focus on Jenny I by corporations. 0:09:29.600 --> 0:09:34.199 But going forward, there's better spending indications. We're going to 0:09:34.280 --> 0:09:41.720 see both administrative potential. New candidates look likely to permit 0:09:41.880 --> 0:09:43.480 more in the way of M and A. There's going 0:09:43.559 --> 0:09:45.680 to be more imperative to do that. You're seeing more 0:09:45.720 --> 0:09:49.079 private equity activity and you're seeing the low end of 0:09:49.200 --> 0:09:53.400 valuations called the ibms, the SEPs, the oracles come up 0:09:53.440 --> 0:09:56.880 providing a floor. So I think all of that and 0:09:57.160 --> 0:10:00.400 hopefully declining interest rates will precipitate a more active M 0:10:00.400 --> 0:10:01.679 and a environment going forward. 0:10:02.559 --> 0:10:06.160 Hillary Frish, Senior Research analysts for Software Services and Enterprise 0:10:06.240 --> 0:10:17.960 Technology at Clearbridge, Thank you very much. Apple CEO Tim 0:10:18.040 --> 0:10:21.280 Cook makes a visit to Beijing, meeting with China's TECHSAR 0:10:21.679 --> 0:10:25.000 with a promise to keep investing in the country. Bloomberg's 0:10:25.080 --> 0:10:29.360 chief correspondent for Apple and Consumer Electronics, Mark German with us. Now, 0:10:29.400 --> 0:10:32.080 and you and I have talked so much about the 0:10:32.080 --> 0:10:35.040 supply chain in China, and China is an end market, 0:10:35.120 --> 0:10:37.840 but it is notable that he goes in person and 0:10:37.880 --> 0:10:39.160 has this very public meeting. 0:10:39.160 --> 0:10:41.640 What do we know, Mark, Yeah, So around this time 0:10:41.679 --> 0:10:45.559 every year, UP executives make a track down to Asia. 0:10:46.200 --> 0:10:48.960 Greg Joswiak right now they're head of marketing is in 0:10:49.080 --> 0:10:52.760 Southeast Asia. Tim Cook and Jeff Williams Cooking, the CEO 0:10:52.760 --> 0:10:56.560 of Loans being the COO, are now in mainland China, 0:10:57.040 --> 0:11:00.680 and Cook typically goes to China two to four per year, 0:11:00.760 --> 0:11:03.280 other than during the pandemic years he was there quite often. 0:11:04.000 --> 0:11:05.920 There's a lot at stakes for Apple and China, right, 0:11:05.960 --> 0:11:08.400 they need to meet with their big providers and partners there. 0:11:08.480 --> 0:11:11.160 China Mobile, you had a meeting with them, they pledged 0:11:11.240 --> 0:11:15.600 continued cooperation. Cook pledge continued cooperation with the IT Minister 0:11:15.679 --> 0:11:17.880 of China. Of course, he's not going to go there, 0:11:18.120 --> 0:11:20.400 meet with the IT minister and say we're no longer 0:11:20.440 --> 0:11:23.480 going to cooperate in our second or third biggest market, right, 0:11:23.520 --> 0:11:24.760 So that's kind of obvious. 0:11:24.800 --> 0:11:26.960 So this is just how things go. 0:11:27.040 --> 0:11:30.040 When you are a multinational company as big as Apple, 0:11:30.080 --> 0:11:32.600 you have to meet with your partners and government regulators 0:11:32.920 --> 0:11:35.000 in the countries that you work with and work in, 0:11:35.800 --> 0:11:38.040 and these meetings are a big part of that. Obviously, 0:11:38.080 --> 0:11:40.920 Apple's unique as a US based tech company to have 0:11:40.960 --> 0:11:44.760 such freedoms in China. They have around forty retail stores there. 0:11:45.400 --> 0:11:48.680 For the most part, almost all of their services operate there. 0:11:49.280 --> 0:11:53.920 There are some nuances regarding cloud storage for iCloud. Obviously 0:11:54.080 --> 0:11:57.280 Apple Intelligence is not available there yet. So these are 0:11:57.320 --> 0:11:59.680 things they're going to continue to work on and keeping 0:11:59.760 --> 0:12:02.720 in and meeting with that government is important. Not to 0:12:02.800 --> 0:12:06.560 mention the necessary meetings that Cook and Williams Obviously Williams 0:12:06.600 --> 0:12:08.720 runs a supply chain needs to have with fox Conn 0:12:08.720 --> 0:12:10.200 other supply chain partners locally. 0:12:10.440 --> 0:12:13.400 Mark Apple shares down around a percentage point in the session. 0:12:13.480 --> 0:12:17.000 There's reports out there this morning that Apple's scaling back 0:12:17.080 --> 0:12:18.720 production of the Vision Pro. 0:12:19.640 --> 0:12:21.120 What do we know about that and what do you 0:12:21.160 --> 0:12:21.680 make of it? 0:12:21.840 --> 0:12:24.120 I think it's a bit of a misnomer, right. It's 0:12:24.160 --> 0:12:27.199 not that they're scaling back production of the Vision Pro 0:12:27.559 --> 0:12:30.400 because they're planning on canceling it or getting rid of it. 0:12:31.400 --> 0:12:35.400 Before Apple releases new versions of products, they need to 0:12:35.440 --> 0:12:38.559 scale back production of the current product, and the goal 0:12:38.720 --> 0:12:41.680 is to have enough units to fulfill demand and fill 0:12:41.720 --> 0:12:45.000 the channels until the new one's already And there is 0:12:45.040 --> 0:12:47.200 a new version of the Vision Pro coming out in 0:12:47.360 --> 0:12:50.400 early twenty twenty six. I'm told that's a second generation 0:12:50.600 --> 0:12:53.960 version with a faster processor and focus on artificial intelligence. 0:12:54.360 --> 0:12:56.000 At the end of twenty twenty five, they're going to 0:12:56.040 --> 0:13:00.319 unveil a cheaper model of the Vision Pro, reduce the specifics, 0:13:00.360 --> 0:13:02.400 try to get the price pointing down by about fifteen 0:13:02.480 --> 0:13:05.319 hundred to eighteen hundred dollars, and so you need to 0:13:05.360 --> 0:13:08.760 scale back production ahead of time, so you don't have 0:13:08.960 --> 0:13:11.640 over inventor and those new models come out now, the 0:13:11.720 --> 0:13:14.160 new once And the interesting part here is that Apple 0:13:14.200 --> 0:13:15.880 believes it's going to take a year for them to 0:13:15.960 --> 0:13:19.720 run out of existing supply of the Vision Pro, which 0:13:19.800 --> 0:13:21.920 makes sense given that the pace of this thing is 0:13:21.960 --> 0:13:24.960 selling at But I've seen no indication of any abandonment 0:13:25.120 --> 0:13:27.400 of the vision Pro line. In fact, what I'm seeing 0:13:27.480 --> 0:13:31.679 is increased hiring for the Vision Pro. I'm seeing increased investment, 0:13:32.080 --> 0:13:34.600 and I'm seeing increased optimism about the future of the 0:13:34.640 --> 0:13:37.400 product now that they're sort of getting a new roadmap 0:13:37.440 --> 0:13:39.800 together of different types of devices within that family. 0:13:39.920 --> 0:13:43.240 Bloomberg's Mark Gunman and all things Apple, thank you very much, 0:13:43.280 --> 0:13:45.640 and I think we're tracking. Is Tesla set to report 0:13:45.640 --> 0:13:47.760 earnings after the closing bell today? 0:13:48.080 --> 0:13:48.880 What do we expect. 0:13:48.960 --> 0:13:51.160 Let's go out to Bloomberg's Creature now in London, who 0:13:51.240 --> 0:13:53.120 leads our global autized coverage And. 0:13:53.760 --> 0:13:56.959 This is an important print and an important call. Where 0:13:57.000 --> 0:13:57.800 do you want to start? 0:13:57.880 --> 0:13:59.920 There is a long list of things that invest in 0:14:00.160 --> 0:14:02.360 Tesla fans and tests the writin is will want to 0:14:02.360 --> 0:14:02.800 know about. 0:14:03.040 --> 0:14:06.839 Yeah, I think deliveries wise going in we know that 0:14:07.080 --> 0:14:08.679 they were up a little bit for the quarter. I 0:14:08.720 --> 0:14:10.800 think the question is going to be sort of how 0:14:10.920 --> 0:14:13.240 how they pulled that off right, and to what extent 0:14:13.280 --> 0:14:15.520 were they able to keep pricing firm. I think the 0:14:15.600 --> 0:14:20.040 expectation generally is that it is that earnings may actually 0:14:20.480 --> 0:14:23.880 dip a bit in terms of, you know, because of 0:14:23.880 --> 0:14:27.080 the fact that this is a company that is still highly, 0:14:27.120 --> 0:14:29.840 highly reliant on the Model three and Model Why and 0:14:29.920 --> 0:14:33.920 those products are a bit tired and in need of 0:14:34.840 --> 0:14:37.960 some upgrades, and we didn't really see the Model Why 0:14:38.760 --> 0:14:41.760 excuse me, the Model three refresh. 0:14:40.880 --> 0:14:43.200 Really sort of moved the needle. You know. 0:14:43.760 --> 0:14:46.720 I would be interested in, of course, whether Musk has 0:14:46.720 --> 0:14:49.760 anything to say about a Model Why refresh. He sort 0:14:49.800 --> 0:14:52.320 of ruled out that anything is coming before the end 0:14:52.320 --> 0:14:55.600 of this year, but that I think is something everybody's 0:14:55.720 --> 0:14:59.440 expecting being a part of these you know, more affordable 0:14:59.480 --> 0:15:02.520 models that company has teased coming in the first half 0:15:02.560 --> 0:15:03.640 of twenty twenty five. 0:15:04.400 --> 0:15:06.640 The timing of the earnings reform call is so interesting 0:15:06.640 --> 0:15:10.320 because it comes so quickly after we robot the robotaxi event, 0:15:10.400 --> 0:15:13.680 and it feels like they left a lot out there, 0:15:13.880 --> 0:15:15.760 or a lot that they didn't put out there right 0:15:15.760 --> 0:15:18.480 investers wanted to know about a proprietary ride heading app. 0:15:18.880 --> 0:15:20.800 Do you think Musk is going to talk about that 0:15:20.880 --> 0:15:21.880 on the call, Craig. 0:15:22.200 --> 0:15:24.840 I would be surprised, just because it feels to me like, 0:15:25.040 --> 0:15:28.040 you know, even some of the timelines that Musk put 0:15:28.080 --> 0:15:30.840 out there at the event were a good ways off, 0:15:30.880 --> 0:15:34.400 and we know that, you know, as he himself acknowledges, 0:15:34.440 --> 0:15:37.080 he tends to be overly optimistic about these timelines, and 0:15:37.160 --> 0:15:40.760 so that still feels like a business that, you know, 0:15:40.800 --> 0:15:43.720 we're not going to see anytime soon, and so it 0:15:43.720 --> 0:15:46.560 would maybe be premature to get into on the call. 0:15:46.920 --> 0:15:50.240 I think another sort of you know topic that I 0:15:50.240 --> 0:15:52.760 would be surprised if it didn't come up with some 0:15:52.840 --> 0:15:57.280 discussion of Musk's involvement in politics and yes, you know, 0:15:57.480 --> 0:16:02.080 the company to its credit, you know, solicit retail investor questions. 0:16:02.120 --> 0:16:03.920 I would be shocked if we didn't have, you know, 0:16:04.000 --> 0:16:06.800 something come up along those lines. We've heard Musk address 0:16:06.880 --> 0:16:07.560 this in the past. 0:16:08.360 --> 0:16:10.440 For now, Tesla is still in the business of selling 0:16:10.480 --> 0:16:14.760 electric vehicles to consumers. What does the environment and other 0:16:14.800 --> 0:16:17.640 reports and earnings tell us about how that's going around 0:16:17.680 --> 0:16:18.080 the world. 0:16:19.640 --> 0:16:25.680 I think so many manufacturers are really pivoting to you know, hybrids, 0:16:25.800 --> 0:16:29.720 right and plug in hybrids, range extended electric vehicles. I 0:16:29.720 --> 0:16:32.800 think Tesla you know, sort of went out of its 0:16:32.840 --> 0:16:37.120 way a couple quarters ago to say to highlight that 0:16:37.160 --> 0:16:39.280 fact and say it was their belief that this is 0:16:39.320 --> 0:16:42.480 the wrong strategy. I think you have to sort of, 0:16:42.560 --> 0:16:44.840 you know, look at at what has happened at some 0:16:44.920 --> 0:16:48.800 of Tesla's biggest competitors and question whether they were really 0:16:48.800 --> 0:16:53.359 correct because we've seen much more robust demand for hybrids, 0:16:54.040 --> 0:16:57.040 whether they plug in or not. You know, Toyota, for instance, 0:16:57.160 --> 0:16:58.880 is just really kind of lighting the world on fire 0:16:58.920 --> 0:17:01.720 with its hybrid business. And so you know, Tesla, I 0:17:01.800 --> 0:17:06.600 think is struggling with some of these broader trends that 0:17:06.640 --> 0:17:09.560 the industry is seeing have slowed down for a battery 0:17:09.600 --> 0:17:10.639 electric vehicle demand. 0:17:11.760 --> 0:17:14.040 Bloomber's cry true down in London, Thank you so much. 0:17:14.119 --> 0:17:16.800 Now coming up on the show, Asana just released its 0:17:16.840 --> 0:17:20.879 latest AI workflow tools page. Costello, Company's head of AI 0:17:21.240 --> 0:17:39.760 joins us. Next, this is Bloomberg Technology Enterprise work Management 0:17:39.760 --> 0:17:43.480 platform as Sana just wrapped its work Innovation Summit where 0:17:43.520 --> 0:17:46.760 announced new AI features that will do things like project 0:17:46.760 --> 0:17:50.679 coordination and workforce orchestration teams also be able to embed 0:17:50.880 --> 0:17:55.440 the new features without using code. Here with Morris Page Costello. 0:17:55.560 --> 0:17:58.120 She's the head of AI at Asana, and there's such 0:17:58.160 --> 0:18:00.760 pressure right now to ship new products, almost like on 0:18:00.800 --> 0:18:03.040 a weekly cadence. It was a big week for you. 0:18:03.560 --> 0:18:06.800 They start with the without code bit. Why is that significant? 0:18:07.680 --> 0:18:10.960 This is important because leaders and team leads know that 0:18:11.000 --> 0:18:14.200 the most important work is across teams and they need 0:18:14.240 --> 0:18:17.200 to be empowered to set up AI to work in 0:18:17.240 --> 0:18:21.000 their existing workflows, across their existing work tools. No one 0:18:21.040 --> 0:18:23.560 wants more places to work. No one wants to remember 0:18:23.640 --> 0:18:26.520 when to engage with AI or not. And this enables 0:18:26.560 --> 0:18:29.760 people to actually set up AI directly where they're already working. 0:18:30.600 --> 0:18:33.040 What you just said, you know whether to engage or not, 0:18:33.240 --> 0:18:35.960 how to engage. Do you have any sort of early 0:18:36.040 --> 0:18:39.159 case studies or examples of how customers are actually using 0:18:39.200 --> 0:18:41.560 it and whether or not they're benefiting in a sort 0:18:41.560 --> 0:18:43.440 of easy to understand way. 0:18:44.200 --> 0:18:44.520 Yeah. 0:18:44.600 --> 0:18:47.320 One of the customers and the beta that is now 0:18:47.840 --> 0:18:52.240 available today was a career channel Outdoor, and they're a 0:18:52.359 --> 0:18:58.560 multinational advertiser. They use these AI workflows to effectively empower 0:18:58.640 --> 0:19:03.080 their creative productions and so when sales would send requests 0:19:03.080 --> 0:19:07.840 to creative teams, picture twenty five hundred requests a month, 0:19:08.280 --> 0:19:12.960 these requests were with before and after saved sixty percent 0:19:13.080 --> 0:19:17.840 of manual time and fifteen hours per request. And that's 0:19:17.880 --> 0:19:20.440 just one part of these smartworkflows. 0:19:22.280 --> 0:19:25.200 In any company, particularly in an enterprise software company, right, 0:19:25.280 --> 0:19:27.679 there is a role that an AI agent can play. 0:19:27.840 --> 0:19:29.720 If you work at any tech company, you often have 0:19:29.840 --> 0:19:33.120 like in house software where there would be a very 0:19:33.280 --> 0:19:35.800 clear and useful use case for an AI agent. But 0:19:35.840 --> 0:19:37.320 I think loads of people that watch the show they 0:19:37.400 --> 0:19:39.400 don't really know what an AI agent is. 0:19:39.800 --> 0:19:41.240 Could you define it for us? 0:19:42.240 --> 0:19:46.000 Yes, an AI agent is effectively using generative AI or 0:19:46.160 --> 0:19:50.919 LM models to make a choice, effectively tool use and 0:19:50.960 --> 0:19:54.720 reasoning about what the proper next steps are. Now importantly, 0:19:55.760 --> 0:20:01.040 enterprise organizations care about accuracy, reliability, and ultimately auditability, and 0:20:01.080 --> 0:20:03.920 that's where this solution is very unique because it sits 0:20:03.960 --> 0:20:07.840 on top of the existing scaffolding of work structure in ASANA, 0:20:08.160 --> 0:20:11.000 which is all about transparency around who's doing what, by 0:20:11.000 --> 0:20:13.280 when and why, which you care about when AI is 0:20:13.359 --> 0:20:14.359 doing work as well. 0:20:16.200 --> 0:20:19.159 Mark Benioff, who is the CEO of Salesforce, which is 0:20:19.200 --> 0:20:22.600 a very large enterprise or SaaS company has been talking 0:20:22.640 --> 0:20:25.520 a lot about what an AI agent is or is not, 0:20:25.720 --> 0:20:30.600 particularly in his critique of Microsoft's co Pilot, but there 0:20:30.640 --> 0:20:33.520 is clearly a tension on it. Why is it important 0:20:33.840 --> 0:20:36.360 that people start to understand and think about whether they 0:20:36.480 --> 0:20:40.840 use or need an AI agent at all? 0:20:40.920 --> 0:20:43.960 I think the biggest unlock is what it is able 0:20:44.080 --> 0:20:47.880 to where it is able to have creativity. And what's 0:20:47.920 --> 0:20:51.000 important is that organizations decide the length of leash they're 0:20:51.040 --> 0:20:55.800 willing to give AI. What's important here is delegating slices 0:20:55.840 --> 0:20:58.600 of work to AI and having a perspective about what 0:20:58.640 --> 0:21:01.840 you want it to do you don't want it to do. Ultimately, 0:21:02.760 --> 0:21:05.960 people are accountable for work, the decisions, the results, and 0:21:06.040 --> 0:21:08.840 when you deploy an AI agent, you want to know 0:21:08.840 --> 0:21:11.080 what it did and why, and honestly, you want the 0:21:11.119 --> 0:21:12.400 ability to undo. 0:21:12.160 --> 0:21:16.080 It page We just have thirty seconds. Why is a 0:21:16.200 --> 0:21:17.800 Sauna good at AI agents? 0:21:18.720 --> 0:21:21.240 Asana has a unique advantage with the structure of its 0:21:21.320 --> 0:21:24.919 data and it works across apps with the tools that 0:21:24.960 --> 0:21:28.000 teams use today. What's unique about the AI agents that 0:21:28.040 --> 0:21:31.680 Asana deploys for our customers is one they're highly customizable 0:21:32.119 --> 0:21:35.359 to their right in the context of apps, and three, 0:21:35.680 --> 0:21:39.000 they are exactly tailored to your team so that no 0:21:39.040 --> 0:21:40.919 one needs to make a choice about what to use 0:21:40.960 --> 0:21:44.240 and when. It just engages proactively on your behalf to 0:21:44.320 --> 0:21:48.000 reduce busy work and actually help execute some of the 0:21:48.040 --> 0:21:49.600 work right in context. 0:21:50.800 --> 0:21:53.840