WEBVTT - Oracle Delays Some Data Center Projects for OpenAI to 2028 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 2>Big story in the tech space today Oracle with some

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<v Speaker 2>news out there talking about maybe pushing back some of

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<v Speaker 2>their rollout. It's been a little bit of a headwind

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<v Speaker 2>for just the last several trading sessions for some of

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<v Speaker 2>these AI names. Oracle stock off five point eight percent today.

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<v Speaker 2>Joining us is Anna rog Ran, a senior techanist for

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<v Speaker 2>Bloomberg Intelligence. Anrag what's the latest from our friends at Oracle.

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<v Speaker 3>Yeah, from what I just heard is that they're having

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<v Speaker 3>some delay in getting the data centers online, and as

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<v Speaker 3>we know, if the data centers don't come online, the

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<v Speaker 3>servers are not let up, you really cannot transform that

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<v Speaker 3>big back walk into sales, and I think that has

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<v Speaker 3>been a big concern for everybody. This just shows that

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<v Speaker 3>it's not going to be a linear line to go

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<v Speaker 3>from funding to get the data centers lined up and

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<v Speaker 3>then recognition. So I think that's a hiccup for them.

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<v Speaker 3>It you know, in our calculations, it does impact that

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<v Speaker 3>FI twenty eight sales, but not the ones that you

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<v Speaker 3>know in the next let's say twelve.

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<v Speaker 4>Months now, Anaag. You know, Paul and I were noting

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<v Speaker 4>earlier that the delay seems to be incited to labor

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<v Speaker 4>and material shortages, right, and so could you just break

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<v Speaker 4>it down a little bit for a listener. So what

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<v Speaker 4>actually is involved in this data center build out? Which

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<v Speaker 4>and why is it so subject to you the potential

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<v Speaker 4>for delay such as this.

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<v Speaker 3>See, it's no different than building any manufacturing, a factory

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<v Speaker 3>or anything else. I mean, you'd have labor the biggest

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<v Speaker 3>bartneck right now for everybody's power. So let's assume that

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<v Speaker 3>these big vendors have figured out they've found like somewhere

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<v Speaker 3>in Wisconsin or someone in Atlanta, they found a place

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<v Speaker 3>where they haven't have power. Then you got to go

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<v Speaker 3>out and build a data center. Cooling, equipment, labored, all

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<v Speaker 3>of that stuff that has nothing to do with technology

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<v Speaker 3>is the one that need is needed for the next

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<v Speaker 3>let's say two years to get the data centers up

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<v Speaker 3>and running. Then you got to put the chips in there,

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<v Speaker 3>and then finally realize that revenue.

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<v Speaker 2>Is there a backlog that they quote, give us a censor?

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<v Speaker 2>Is that a good numbered thing? Representative?

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<v Speaker 3>Oh, it is absolutely spectacular. That number is five hundred

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<v Speaker 3>billion dollars and out of that five billion, three hundred billion,

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<v Speaker 3>over three hundred billion is from open Ai. So if

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<v Speaker 3>you go back a few years, this backlog was to

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<v Speaker 3>be honest in material or not much. But what has

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<v Speaker 3>happened is open Ai has this absolute need to go

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<v Speaker 3>out and build capacity so that they can do both

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<v Speaker 3>inferencing for a lot of the workloads that are coming in,

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<v Speaker 3>but more importantly, they can train their models so that

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<v Speaker 3>their next generation models are better than let's say, what

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<v Speaker 3>Google has produced. So it's an important, you could say,

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<v Speaker 3>strategy for them in order to get that data center

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<v Speaker 3>up and running. And for now they have been partnering

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<v Speaker 3>more with Article than anybody else at this point.

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<v Speaker 5>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Coarclay, and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on.

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<v Speaker 5>YouTube the tech story. There's a couple of tech stories here.

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<v Speaker 2>Oracle pushing out some of their plans, Broadcom putting out

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<v Speaker 2>some numbers at the street a little bit disappointed, and

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<v Speaker 2>so it's kind of contributed to himself in some of

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<v Speaker 2>these broader tech names. Let's break it down with Ku

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<v Speaker 2>Johan Subani. He is Bloomberg Intelligence Senior Semiconductor and I

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<v Speaker 2>let's start with Broadcom. Can you break down what's going

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<v Speaker 2>on over there?

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<v Speaker 6>Souper John Cunten, Yeah, I mean, look, fundamentally, it was

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<v Speaker 6>one of the great and very strong AI semis report

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<v Speaker 6>this quarter. I could not find a lot wrong in

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<v Speaker 6>the numbers. I mean they upsided their AI revenue numbers

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<v Speaker 6>by twenty percent above the street for next quarter. They

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<v Speaker 6>even guided their backlog or provided their backlog, which as

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<v Speaker 6>of today would imply an upside from street numbers for

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<v Speaker 6>the next year, even the next eighteen months. So I

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<v Speaker 6>don't know what more better they could have done.

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<v Speaker 2>This.

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<v Speaker 6>By the way, backlog is like the baseline that they

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<v Speaker 6>could continue and building to that backlog and hence moving

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<v Speaker 6>the numbers up as of this morning on the street,

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<v Speaker 6>if we look at it, all the numbers up for

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<v Speaker 6>the next year and the next two years have gone up,

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<v Speaker 6>especially for the key area, which is their AI revenue.

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<v Speaker 6>So nothing wrong fundamentally here. It just seems it's just

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<v Speaker 6>that state in the market when it comes to AI

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<v Speaker 6>valuations and AI sentiment that so sort of no good

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<v Speaker 6>news is good enough right now?

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<v Speaker 4>Yeah, Well, Kunden, a lot of attention being paid to

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<v Speaker 4>that seventy three billion dollar backlog that you're mentioning. It

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<v Speaker 4>seems like the market isn't really rewarding Broadcome for that.

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<v Speaker 4>But what does that actually tell us about the demand

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<v Speaker 4>for these products across the semiconductor supply chain.

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<v Speaker 2>Yeah, a couple of things.

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<v Speaker 6>Look, one thing we are all aware of which every

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<v Speaker 6>AI accelerator company, whether it's in media, IMD, Broadcom or Morble,

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<v Speaker 6>is enjoying, is the rising capex from all the hyperscalers

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<v Speaker 6>in the cloud guys, which is a very well covered story.

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<v Speaker 6>But for specifically for someone like a Broadcom who does

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<v Speaker 6>the A six custom accelerators for the likes of Google Meta.

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<v Speaker 6>Amazon also has their own chip, but that's not what

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<v Speaker 6>they work with Marvel on that the demand for these

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<v Speaker 6>chips is rising much faster. So even if there were

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<v Speaker 6>some concerns that how long can the hyperscalers keep rising

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<v Speaker 6>their capex spending that does not directly impact A six,

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<v Speaker 6>which Broadcom supplies, because the hyperscalers are continuing to move

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<v Speaker 6>their workload on A six. And this is a very

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<v Speaker 6>small scale when you look at the entire like five

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<v Speaker 6>hundred six billion dollars they are going to spend here,

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<v Speaker 6>I mean seventy billion over next eighteen months. Where they're

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<v Speaker 6>going too close to spend trillion bucks is nothing, it's change.

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<v Speaker 5>John. You talk to institutional investors all over the world.

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<v Speaker 2>Has the conversation changed at all in the last two

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<v Speaker 2>to three weeks, Perhaps a little less bullish or people

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<v Speaker 2>concerned about some of these short term sell offs here

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<v Speaker 2>we've seen recently.

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<v Speaker 6>I think the aura that there has been sort of

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<v Speaker 6>a saturation, or you know, there's like how much can

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<v Speaker 6>these numbers and guidances keep going up? I don't think

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<v Speaker 6>the sentiment has changed towards bearish. I think there's much

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<v Speaker 6>more cautious optimism now coming in, so like people are

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<v Speaker 6>trying to be very careful. Also, remember it's that time

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<v Speaker 6>of the year where you've sort of captured the numbers

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<v Speaker 6>for the year mostly right, so you're not going to

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<v Speaker 6>get a significant upside in the remaining time, so people

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<v Speaker 6>are just getting ready for the next year and sort

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<v Speaker 6>of going back looking at where they can trim exposures

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<v Speaker 6>and where they can sort of book profits.

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<v Speaker 5>Yeah.

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<v Speaker 4>Well, a lot of other news out there today related

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<v Speaker 4>to Ai Kunjan. Let's talk about this Oracle news delays

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<v Speaker 4>to some data center projects for open air to twenty

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<v Speaker 4>twenty eight, and we're seeing the market roll over on this.

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<v Speaker 4>What can you kind of tell us about, you know,

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<v Speaker 4>the state of this industry On the one hand, a

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<v Speaker 4>lot of promise there in the data center space, but

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<v Speaker 4>also seems like a lot of kind of volatile sentiment

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<v Speaker 4>related to it as well.

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<v Speaker 6>Yeah, I mean, look, there has been a lot of

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<v Speaker 6>impact with the open air deals also for in media,

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<v Speaker 6>also for Broadcom a similar thing maybe investors didn't like

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<v Speaker 6>if you were trying to really find flaws Last night

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<v Speaker 6>from Broadcoms Learning was they mentioned the open air revenues

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<v Speaker 6>for them will now start in twenty seven, and some

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<v Speaker 6>folks were expecting those revenues to start coming in late

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<v Speaker 6>twenty six. So a lot was driven by initial hype,

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<v Speaker 6>which these programs take many years, so it's very difficult

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<v Speaker 6>to pinpoint two years ahead in time, like this is

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<v Speaker 6>the quarter when all the buildouts will start, and everyone

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<v Speaker 6>is starting to get my DATO revenues. As we are

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<v Speaker 6>getting closer to that time, we are getting more clarity

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<v Speaker 6>on whether will it be at twenty seven with that

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<v Speaker 6>will be twenty eight. We don't see fundamental flags in

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<v Speaker 6>this new time milestone movements is just we are getting

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<v Speaker 6>more clarity, and initially it was just a lot of

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<v Speaker 6>goodness being priced in, which is now being adjusted.

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<v Speaker 2>This is in my mind, a classic overpromise and now

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<v Speaker 2>under deliver.

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<v Speaker 5>You're supposed to do the exact opposite.

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<v Speaker 2>Yeah, maybe we'll have these things around twenty thirty. Then

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<v Speaker 2>you look like a hero if you come in at

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<v Speaker 2>twenty twenty eight, because Oracle's saying that the delays are

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<v Speaker 2>due largely to labor and material shortages, not like some

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<v Speaker 2>technological you know, headwind that they can't get around.

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<v Speaker 5>So, Kujan, is this just.

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<v Speaker 2>Maybe a little bit of the market in general, your

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<v Speaker 2>technology market investor base just kind of taking a little

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<v Speaker 2>maybe money off the table, just stepping back a little

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<v Speaker 2>bit and maybe waiting for the next catalyst.

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<v Speaker 6>There's definitely that, And like I said, is that time

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<v Speaker 6>of the year where making some money over the table

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<v Speaker 6>makes sense, right. I mean, look, if you're a portfolio

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<v Speaker 6>manager right now, there's not again, You've already covered significant

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<v Speaker 6>amount of good rewards and performance through the year. You

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<v Speaker 6>don't want to lose that, right, even if you're underlying

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<v Speaker 6>key fundamental convictions have not changed.

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<v Speaker 5>Stay with us more from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:09:26.480 --> 0:09:29.559
<v Speaker 1>weekdays at ten am Eastern on Apple, Coarclay, and Android

0:09:29.600 --> 0:09:32.880
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:09:36.840 --> 0:09:38.760
<v Speaker 2>Let's talk about the retail space. Here we heard from

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<v Speaker 2>Lulu Lemon, the stock surgeons. We had the CEO changing

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<v Speaker 2>and maybe suggesting some new strategy there Punham Goil. She

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<v Speaker 2>is a senior US e commerce and retail analysts for

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<v Speaker 2>Bloomberg Intelligence. She's based down there in Princeton. Pum What

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<v Speaker 2>do you make of Lulu Lemon? What did you learn

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<v Speaker 2>in the earnings and what do you expect to see

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<v Speaker 2>from this change in the C suite.

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<v Speaker 7>Yeah, so there's a few things. So earnings for the

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<v Speaker 7>quorder showed strength but the guidance was weaker and the

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<v Speaker 7>strength really came from outside of the US. So we're

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<v Speaker 7>not surprised that China is strong. China has been a

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<v Speaker 7>strong point for them for quite some time. The issue

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<v Speaker 7>is still the US domestic The domestic business is weak

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<v Speaker 7>and continues to be weak, and we think it's a

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<v Speaker 7>function of just lack of differentiation product innovation over the

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<v Speaker 7>last few years. And the biggest news yesterday, quite frankly,

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<v Speaker 7>was the announcement of Callan MacDonald stepping down as CEO

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<v Speaker 7>and the search for a new CEO for next year.

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<v Speaker 7>So I think investors are excited to see new strategy,

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<v Speaker 7>new vision, to see who can run this ship back

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<v Speaker 7>to sale because lu Lemon has lost ground in recent.

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<v Speaker 5>Years, you know, put up.

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<v Speaker 4>Yeah, it's interesting that you mentioned a lot of games

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<v Speaker 4>being ascribed to that leadership change at Lulu raight, But

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<v Speaker 4>given all the other challenges of the company that you've

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<v Speaker 4>just described, is this really going to be a material

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<v Speaker 4>How much does this leadership change? How much will it

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<v Speaker 4>do to write the ship?

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<v Speaker 7>As you say, It's going to matter, but it's going

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<v Speaker 7>to depend on who takes the top role here.

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<v Speaker 8>Right.

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<v Speaker 7>We would like it to be a product led executive

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<v Speaker 7>because we think product is key in retail. And the

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<v Speaker 7>reason Lululemon has lacked behind and has lacked competition, especially

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<v Speaker 7>the emerging upstart brands take some of its share, is

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<v Speaker 7>because it hasn't stayed ahead as it once was in

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<v Speaker 7>its product offerings. There's less differentiation and the price points

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<v Speaker 7>are comparable.

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<v Speaker 2>That's where I wanted to go plun them because when

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<v Speaker 2>I talk to people like in this studio about Lulu Lemon,

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<v Speaker 2>I hear the same thing, good product, but boy it's expensive.

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<v Speaker 2>Is that an issue for them in terms of product placement?

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<v Speaker 7>I don't think it's an issue for them based on

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<v Speaker 7>where they sit because if you think about the Little

0:12:02.120 --> 0:12:05.400
<v Speaker 7>Lemon product portfolio and you compare it to a vory

0:12:05.679 --> 0:12:09.440
<v Speaker 7>or an aloe, they're quite similar. Now if you compare

0:12:09.480 --> 0:12:14.120
<v Speaker 7>it to an Airy, which is a brand by American Eagle,

0:12:14.520 --> 0:12:17.680
<v Speaker 7>yes the price points are higher, but I don't think

0:12:17.679 --> 0:12:20.600
<v Speaker 7>the price point is the issue here. I think the

0:12:20.640 --> 0:12:24.760
<v Speaker 7>consumer wants to see more. Right, The aligning Lenkings have

0:12:24.840 --> 0:12:27.320
<v Speaker 7>been around for so long and I love them, I

0:12:27.440 --> 0:12:32.560
<v Speaker 7>truly do, but I also like alo and it's just like,

0:12:32.840 --> 0:12:35.520
<v Speaker 7>what are you giving me to make me like little

0:12:35.600 --> 0:12:38.600
<v Speaker 7>Lemon so much more. And are you giving me innovation

0:12:39.400 --> 0:12:42.600
<v Speaker 7>constantly to make me try the next new thing? I

0:12:42.640 --> 0:12:45.560
<v Speaker 7>think that's the big gap here. They need to put

0:12:45.600 --> 0:12:49.000
<v Speaker 7>innovation back on track and they're trying, but it's just

0:12:49.240 --> 0:12:51.480
<v Speaker 7>we won't really see much of that until next year.

0:12:51.520 --> 0:12:53.800
<v Speaker 7>And then when we do get a new CEO, it'll

0:12:53.840 --> 0:12:56.280
<v Speaker 7>be interesting to see the vision that they set forward.

0:12:57.440 --> 0:13:00.520
<v Speaker 5>Stay with us more from Bloomberg Intelligence coming up after this.

0:13:04.480 --> 0:13:08.160
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:13:08.240 --> 0:13:11.360
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:13:11.360 --> 0:13:14.679
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:13:14.720 --> 0:13:18.280
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:13:19.000 --> 0:13:21.280
<v Speaker 2>Let's switch gears and go to the media space. We

0:13:21.280 --> 0:13:23.040
<v Speaker 2>can do that with Keitha Ranganath, and she is the

0:13:23.600 --> 0:13:26.120
<v Speaker 2>senior media analyst for Bloomberg Intelligence.

0:13:26.120 --> 0:13:27.480
<v Speaker 5>We've been talking a lot to.

0:13:27.480 --> 0:13:30.880
<v Speaker 2>Githa about this Warner Brothers Discovery deal. It can be

0:13:31.000 --> 0:13:33.480
<v Speaker 2>close to a ninety billion dollar trade when it happens.

0:13:33.559 --> 0:13:36.280
<v Speaker 2>Netflix is involved, Paramount is involved, and we'll get some

0:13:36.360 --> 0:13:39.320
<v Speaker 2>talk there. But I'm going to start getha with Disney.

0:13:39.400 --> 0:13:42.400
<v Speaker 2>Yesterday they made a big and it seems like a

0:13:42.400 --> 0:13:45.360
<v Speaker 2>pretty big announcement, you know, making one billion dollar investment

0:13:45.400 --> 0:13:48.679
<v Speaker 2>in open AI. What's the strategy here for the Walt

0:13:48.720 --> 0:13:49.720
<v Speaker 2>Disney Company.

0:13:51.720 --> 0:13:53.559
<v Speaker 8>Seems to be, Paul, if you can't beat them, you

0:13:53.760 --> 0:13:58.200
<v Speaker 8>join them, Right. Disney really is realizing that AI is

0:13:58.240 --> 0:14:02.360
<v Speaker 8>here to stay. User generated content is obviously getting a

0:14:02.360 --> 0:14:04.800
<v Speaker 8>lot of traction, and so they want to be able to,

0:14:04.840 --> 0:14:09.080
<v Speaker 8>i think, create this blueprint so where you have you know,

0:14:09.120 --> 0:14:11.440
<v Speaker 8>they can license their characters in a safe way. It's

0:14:11.480 --> 0:14:15.120
<v Speaker 8>a brand safe way, It respects copyrights, and they also

0:14:15.160 --> 0:14:18.240
<v Speaker 8>get to monetize their characters. So rather than being you know,

0:14:18.360 --> 0:14:22.600
<v Speaker 8>constantly reactive and defensive and fighting in court they are

0:14:23.120 --> 0:14:26.320
<v Speaker 8>this is much more proactive a way for them to

0:14:26.360 --> 0:14:31.480
<v Speaker 8>participate in eventual you know, monetization of all those licensing

0:14:31.480 --> 0:14:33.200
<v Speaker 8>of all those characters. Yeah.

0:14:33.240 --> 0:14:35.840
<v Speaker 4>Well, geetha very interesting that you mentioned. I mean, that

0:14:35.920 --> 0:14:38.760
<v Speaker 4>seems to be the key point here, right, that Disney

0:14:38.880 --> 0:14:42.040
<v Speaker 4>is allowing sore access to its IP two hundred plus

0:14:42.160 --> 0:14:45.120
<v Speaker 4>iconic characters. That's a big step. I mean there's a

0:14:45.120 --> 0:14:47.680
<v Speaker 4>lot of kind of potential for the brand to be

0:14:47.840 --> 0:14:51.520
<v Speaker 4>maybe a little diluted because of that. But what's your

0:14:51.520 --> 0:14:53.840
<v Speaker 4>take on that? Is is it able to protect the

0:14:53.840 --> 0:14:55.440
<v Speaker 4>integrity of its franchises here.

0:14:56.280 --> 0:14:58.320
<v Speaker 8>I think it's going to try its best to do that.

0:14:58.360 --> 0:15:00.760
<v Speaker 8>I mean, what was interesting about you yesterday's deal was

0:15:00.800 --> 0:15:02.720
<v Speaker 8>obviously they ink the deal with Sora and at the

0:15:02.800 --> 0:15:05.800
<v Speaker 8>very same time sent a seasoned doses letter to Google.

0:15:06.000 --> 0:15:08.000
<v Speaker 8>So they're really kind of trying to draw the line

0:15:08.160 --> 0:15:12.640
<v Speaker 8>around you know, brand safety, around copyrights. You know, no

0:15:12.760 --> 0:15:16.920
<v Speaker 8>violation of copyrights, so that's pretty clear. But you're absolutely right.

0:15:16.960 --> 0:15:19.200
<v Speaker 8>I mean, this is kind of a little bit of

0:15:19.280 --> 0:15:21.440
<v Speaker 8>you know, letting the fox into the henhouse, if you will,

0:15:21.440 --> 0:15:24.840
<v Speaker 8>because once you kind of allow open Ai and Sora

0:15:24.960 --> 0:15:27.120
<v Speaker 8>to get access to all of your characters, who knows

0:15:27.160 --> 0:15:29.680
<v Speaker 8>how it's going to be used. Disney of course is

0:15:29.720 --> 0:15:31.400
<v Speaker 8>going to have you know a little bit of say,

0:15:31.680 --> 0:15:34.200
<v Speaker 8>they are going to get a lot of those Sora

0:15:34.720 --> 0:15:37.360
<v Speaker 8>content or those videos to come back to their Disney

0:15:37.360 --> 0:15:39.720
<v Speaker 8>Plus platform. And I think what it really helps Disney

0:15:39.760 --> 0:15:42.200
<v Speaker 8>do is of course, get in on the moment, really

0:15:42.240 --> 0:15:45.640
<v Speaker 8>kind of deepen their engagement with their younger fans, kind

0:15:45.640 --> 0:15:49.920
<v Speaker 8>of build a big pipeline of new franchises hopefully and

0:15:50.000 --> 0:15:54.120
<v Speaker 8>more importantly, really collect data in what kind of you know,

0:15:54.760 --> 0:15:58.520
<v Speaker 8>what are fans actually looking for? Do they enjoy spending

0:15:58.560 --> 0:16:02.280
<v Speaker 8>time with, you know, all of thesecharacters creating videos? So

0:16:02.320 --> 0:16:04.680
<v Speaker 8>it's really, you know, so many different things that I

0:16:04.720 --> 0:16:07.880
<v Speaker 8>think Disney is hoping to kind of learn from this

0:16:07.920 --> 0:16:08.720
<v Speaker 8>whole exercise.

0:16:09.240 --> 0:16:11.320
<v Speaker 5>All right, Keith, enough with that, Let's get back to

0:16:11.360 --> 0:16:13.000
<v Speaker 5>the issue at hand.

0:16:13.080 --> 0:16:16.720
<v Speaker 2>Here, any news coming out of either, you know, the

0:16:16.760 --> 0:16:19.520
<v Speaker 2>Warner camp, the Netflix clamp, the Paramount camp.

0:16:20.800 --> 0:16:23.760
<v Speaker 8>So it seems now, Paul, that the ball is really

0:16:23.960 --> 0:16:28.040
<v Speaker 8>in Paramount score slash in Warner Brothers Discoveries code. So Paramount,

0:16:28.560 --> 0:16:30.960
<v Speaker 8>as you know, has already sent that all cash bid.

0:16:31.560 --> 0:16:35.160
<v Speaker 8>They are waiting to hear back from the Warner Brothers

0:16:35.160 --> 0:16:38.760
<v Speaker 8>Discovery board. The deadline for that is December twenty second.

0:16:39.080 --> 0:16:42.640
<v Speaker 8>But there was some reporting yesterday that suggested that Paramount

0:16:42.920 --> 0:16:47.360
<v Speaker 8>is looking into potentially raising its bid by about ten percent.

0:16:47.440 --> 0:16:49.560
<v Speaker 8>So we know right now it's thirty dollars per share

0:16:49.600 --> 0:16:52.960
<v Speaker 8>for all of Warner Brothers Discovery, potentially looking to raise

0:16:53.000 --> 0:16:55.480
<v Speaker 8>that to as much as thirty three dollars per share.

0:16:55.520 --> 0:17:00.400
<v Speaker 8>And remember they do have to pay Warner Brothers. They

0:17:00.440 --> 0:17:03.560
<v Speaker 8>do have to compensate Warner Brothers Discovery for the three

0:17:03.640 --> 0:17:06.480
<v Speaker 8>billion dollar termination fee that they that Warner Brothers would

0:17:06.480 --> 0:17:08.240
<v Speaker 8>have to pay Netflix in case it walks away from

0:17:08.240 --> 0:17:08.520
<v Speaker 8>a deal.

0:17:08.960 --> 0:17:10.800
<v Speaker 4>Geth, what do you think is going on in the

0:17:10.840 --> 0:17:14.240
<v Speaker 4>Netflix c suite right now? Do you think they're sitting

0:17:14.280 --> 0:17:16.120
<v Speaker 4>a little bit nervously or do you think they're still

0:17:16.160 --> 0:17:18.800
<v Speaker 4>comfortable with their twenty seven dollars this year offer at

0:17:18.800 --> 0:17:20.359
<v Speaker 4>this point, I.

0:17:20.400 --> 0:17:22.679
<v Speaker 8>Think they are also looking to potentially raise it, but

0:17:22.760 --> 0:17:26.080
<v Speaker 8>they're not going to do anything before you know, we see.

0:17:26.280 --> 0:17:29.200
<v Speaker 8>The first move has to be from Paramount, and I

0:17:30.000 --> 0:17:33.280
<v Speaker 8>think Netflix is definitely comfortable in raising its offer. The

0:17:33.359 --> 0:17:35.520
<v Speaker 8>thing that they really need to contend with is that

0:17:35.560 --> 0:17:38.240
<v Speaker 8>the market is not happy with this deal. We definitely

0:17:38.240 --> 0:17:40.800
<v Speaker 8>don't want to see Netflix get into this bidding war

0:17:40.920 --> 0:17:43.639
<v Speaker 8>at all. There are just too many concerns from a

0:17:43.680 --> 0:17:47.160
<v Speaker 8>regulatory perspective, from an integration perspective, and it really kind

0:17:47.200 --> 0:17:50.600
<v Speaker 8>of I think Muddy's what was a very very nice

0:17:50.720 --> 0:17:54.400
<v Speaker 8>pure play streaming story with exposure now to legacy media,

0:17:54.520 --> 0:17:56.800
<v Speaker 8>so obviously the market doesn't like it. Netflix, of course,

0:17:56.800 --> 0:17:58.679
<v Speaker 8>things that they're playing the long game. They're kind of

0:17:58.840 --> 0:18:02.480
<v Speaker 8>you know, positioning themselves here for the future, but getting

0:18:02.520 --> 0:18:05.360
<v Speaker 8>involved in a very expensive bidding war. I don't think

0:18:05.359 --> 0:18:06.240
<v Speaker 8>anybody really wants that.

0:18:06.840 --> 0:18:11.520
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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