1 00:00:00,280 --> 00:00:11,480 Speaker 1: Bloomberg Audio, Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,560 --> 00:00:13,640 Speaker 1: with Scarletfoo and Paul Sweeney. 3 00:00:13,720 --> 00:00:15,840 Speaker 2: How do you think the FED is looking at tariffs? 4 00:00:15,960 --> 00:00:17,160 Speaker 2: The uncertainty of terriffs. 5 00:00:17,280 --> 00:00:19,680 Speaker 3: Let's take a look at the sectors and how they performed. 6 00:00:19,760 --> 00:00:22,760 Speaker 2: A lot of investors getting whipsaled every day by news events. 7 00:00:22,520 --> 00:00:26,239 Speaker 1: Breaking market headlines and corporate news from across the globe. 8 00:00:26,280 --> 00:00:28,880 Speaker 3: Could we see a market disruption of market events? 9 00:00:28,960 --> 00:00:30,960 Speaker 2: So people just too exuberant out there? 10 00:00:31,120 --> 00:00:33,640 Speaker 3: You see some so called low quality stocks driving this 11 00:00:33,760 --> 00:00:34,520 Speaker 3: short term rally. 12 00:00:34,560 --> 00:00:40,040 Speaker 1: Bloomberg Intelligence with Scarletfoo and Paul Sweeney on Bloomberg Radio, YouTube, 13 00:00:40,080 --> 00:00:41,440 Speaker 1: and Bloomberg Originals. 14 00:00:42,520 --> 00:00:44,800 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:44,840 --> 00:00:47,120 Speaker 2: business stories impacting Wall Street and the global markets. 16 00:00:47,159 --> 00:00:49,239 Speaker 3: Each and every week, we provide in depth research and 17 00:00:49,320 --> 00:00:51,199 Speaker 3: data on some of the two thousand companies and one 18 00:00:51,280 --> 00:00:54,000 Speaker 3: hundred and thirty industries that are analysts cover worldwide. 19 00:00:54,040 --> 00:00:56,440 Speaker 2: Today, we'll look at why Wall Street's Vegas Banks report 20 00:00:56,520 --> 00:01:00,240 Speaker 2: quarterly earnings that surpassed almost all analyst expectations. 21 00:00:59,600 --> 00:01:02,040 Speaker 3: Plus look at how the tech company Oracle will commit 22 00:01:02,080 --> 00:01:04,039 Speaker 3: to the widespread use of AMD chips. 23 00:01:04,160 --> 00:01:06,000 Speaker 2: But first, We begin with some big news in the 24 00:01:06,040 --> 00:01:07,200 Speaker 2: tech sector because. 25 00:01:06,920 --> 00:01:10,240 Speaker 3: This week the AI research and development company OpenAI signed 26 00:01:10,280 --> 00:01:13,480 Speaker 3: a multi year agreement with Broadcom. It is to collaborate 27 00:01:13,480 --> 00:01:15,640 Speaker 3: on custom chips and networking equipment. 28 00:01:15,880 --> 00:01:18,199 Speaker 2: The plan is to add ten gigawats worth of AI 29 00:01:18,319 --> 00:01:21,520 Speaker 2: data center capacity, with the companies beginning to deploy racks 30 00:01:21,520 --> 00:01:23,920 Speaker 2: of service containing the gear in twenty twenty six. 31 00:01:24,160 --> 00:01:27,560 Speaker 3: OpenAI will design the hardware and work with Broadcom to develop. 32 00:01:27,280 --> 00:01:29,959 Speaker 2: It for more. We were joined by mandeep Seeing Bloomberg Intelligence, 33 00:01:30,000 --> 00:01:33,040 Speaker 2: senior tech industry analyst. You first asked man Deep, first 34 00:01:33,080 --> 00:01:34,320 Speaker 2: take on the latest deal. 35 00:01:34,600 --> 00:01:39,720 Speaker 4: Look, OpenAI is going after heading as much compute capacity 36 00:01:39,760 --> 00:01:43,840 Speaker 4: as they can, and they did. First ten gigawatts with Nvidia, 37 00:01:44,120 --> 00:01:48,760 Speaker 4: six gigawatts with AMD, and now ten gigawats with Broadcom. 38 00:01:48,800 --> 00:01:53,120 Speaker 4: And the difference here is with Broadcom they get to 39 00:01:53,400 --> 00:01:57,280 Speaker 4: use their own chips. Nvidia and AMD are what we 40 00:01:57,360 --> 00:02:01,720 Speaker 4: call merchant silicon. I mean that's basically generalized chips where 41 00:02:01,800 --> 00:02:05,400 Speaker 4: you can deploy the workload you want, whether it's from 42 00:02:05,440 --> 00:02:08,919 Speaker 4: OpenAI or Microsoft or any other vendor. In the case 43 00:02:08,960 --> 00:02:12,679 Speaker 4: of custom silicon, which is what Broadcom does, a company 44 00:02:12,919 --> 00:02:17,840 Speaker 4: like open AI or Google. Google makes up almost you know, 45 00:02:18,000 --> 00:02:22,200 Speaker 4: fifty percent plus of Broadcom's AI revenue. So Google has 46 00:02:22,240 --> 00:02:26,760 Speaker 4: their chip called TPUs. They use it for everything run 47 00:02:27,120 --> 00:02:31,239 Speaker 4: on Google's platform, whether it's YouTube, whether it's AI, whether 48 00:02:31,320 --> 00:02:35,560 Speaker 4: it's cloud. Everything inside Google's run on their TPU. So 49 00:02:36,080 --> 00:02:40,080 Speaker 4: OpenAI's strategy here is to use an approach which is 50 00:02:40,120 --> 00:02:43,400 Speaker 4: similar to Google TPUs because it saves you a lot 51 00:02:43,400 --> 00:02:47,200 Speaker 4: of money. I mean, imagine, an Nvidia AI chip costs 52 00:02:47,200 --> 00:02:52,320 Speaker 4: you thirty grand. A custom silicon that Broadcom is making 53 00:02:52,360 --> 00:02:57,080 Speaker 4: for Google costs you six grand. That's the cost differential 54 00:02:57,120 --> 00:03:01,760 Speaker 4: we are talking about. And it's not because has to 55 00:03:01,840 --> 00:03:04,000 Speaker 4: spend thirty grand to make that chip. They have a 56 00:03:04,080 --> 00:03:06,720 Speaker 4: seventy five percent gross margin on the chip that they're 57 00:03:06,760 --> 00:03:09,880 Speaker 4: selling to the customer. So Nvidia's cost is also low, 58 00:03:10,080 --> 00:03:12,920 Speaker 4: but they mark up the price of their silicon. Same 59 00:03:12,919 --> 00:03:15,720 Speaker 4: thing with AMD. In the case of Google, they are 60 00:03:15,760 --> 00:03:18,680 Speaker 4: going directly to Broadcom to make that chip at a 61 00:03:18,720 --> 00:03:21,600 Speaker 4: far lower price, and it's for their own use, which 62 00:03:21,680 --> 00:03:23,560 Speaker 4: is why they don't have to pay the markup to 63 00:03:23,639 --> 00:03:27,400 Speaker 4: Nvideo or AMD. And that's why having your custom silicon 64 00:03:27,480 --> 00:03:31,480 Speaker 4: strategy is so good because it really saves you so 65 00:03:31,600 --> 00:03:34,960 Speaker 4: one gigaw with Nvidia silicon would cost you about forty 66 00:03:35,000 --> 00:03:38,480 Speaker 4: to fifty billion. One gigawat with a Broadcom open Ai 67 00:03:38,600 --> 00:03:42,360 Speaker 4: silicon would cost you twenty five to thirty billion. So 68 00:03:42,400 --> 00:03:44,920 Speaker 4: if you're talking about you know, thirty to forty percent 69 00:03:44,960 --> 00:03:47,720 Speaker 4: cost differential, and it's huge, I mean in the context 70 00:03:47,760 --> 00:03:49,840 Speaker 4: of what these guys are trying to do, you know, 71 00:03:49,880 --> 00:03:51,040 Speaker 4: scaled infrastructure. 72 00:03:51,520 --> 00:03:55,080 Speaker 3: In addition to that distinction, there's also no investment or 73 00:03:55,120 --> 00:03:58,520 Speaker 3: stock component to this open Ai Broadcom deal, which makes 74 00:03:58,520 --> 00:04:01,360 Speaker 3: it different from the deal that it struck with Nvidia 75 00:04:01,520 --> 00:04:04,280 Speaker 3: and AMD. So I guess my question is how would 76 00:04:04,320 --> 00:04:08,640 Speaker 3: open Ai finance the purchase or the chips in general? 77 00:04:08,920 --> 00:04:11,360 Speaker 4: That's a great question because right now they have to 78 00:04:11,400 --> 00:04:14,000 Speaker 4: do a lot of financing. It's one thing that's a 79 00:04:14,120 --> 00:04:17,960 Speaker 4: common thread in the Invidia transaction where even though Invidia 80 00:04:18,040 --> 00:04:21,920 Speaker 4: is putting ten billion dollars in open Ai, they still 81 00:04:21,960 --> 00:04:25,440 Speaker 4: have to find the remainder of the money. So if 82 00:04:25,520 --> 00:04:28,680 Speaker 4: you imagine, you know, forty to fifty billion dollars per gigawatt, 83 00:04:29,520 --> 00:04:34,440 Speaker 4: ten gigawatts costume around five hundred billion, Nvidia is only 84 00:04:34,680 --> 00:04:37,520 Speaker 4: investing up two hundred billions, so they still have to 85 00:04:37,560 --> 00:04:39,960 Speaker 4: figure out the remainder of four hundred billion in the 86 00:04:40,000 --> 00:04:43,080 Speaker 4: case of AMD, I mean, yes, they are getting some stock, 87 00:04:43,520 --> 00:04:46,120 Speaker 4: but you still have to figure out the financing for that, 88 00:04:46,360 --> 00:04:49,359 Speaker 4: you know, three hundred billion or so. Here, it's the 89 00:04:49,400 --> 00:04:53,160 Speaker 4: same thing. You need the money. And open eyes bet 90 00:04:53,240 --> 00:04:56,080 Speaker 4: is if we keep ramping up our revenue, that is 91 00:04:56,120 --> 00:04:58,800 Speaker 4: obviously a big source of the funding. We'll do a 92 00:04:58,800 --> 00:05:01,600 Speaker 4: lot of private deals because we already have the buy 93 00:05:01,680 --> 00:05:06,080 Speaker 4: in from these big player whether it's Nvidia or Microsoft 94 00:05:06,120 --> 00:05:10,960 Speaker 4: and other sovereign providers. And I think it's a lot 95 00:05:11,160 --> 00:05:14,240 Speaker 4: of scale game right now, because once we keep hitting 96 00:05:14,240 --> 00:05:17,240 Speaker 4: our milestones, we'll keep raising more money. And that's the 97 00:05:17,320 --> 00:05:18,920 Speaker 4: hope when it comes to open air. 98 00:05:19,320 --> 00:05:21,960 Speaker 2: One name I hadn't heard during all this dance between 99 00:05:22,000 --> 00:05:25,080 Speaker 2: all these tech companies is Apple. Yeah, what's going on there? 100 00:05:25,320 --> 00:05:27,560 Speaker 3: Glaring absence exactly. 101 00:05:27,600 --> 00:05:29,840 Speaker 4: I think that's the right way to frame it. And look, 102 00:05:29,880 --> 00:05:32,359 Speaker 4: at some point, I think they are going to go 103 00:05:32,520 --> 00:05:36,159 Speaker 4: the broadcom route. Out of the three partnerships that Openei 104 00:05:36,320 --> 00:05:39,960 Speaker 4: has had, a company like Apple will never go for 105 00:05:40,040 --> 00:05:42,200 Speaker 4: merchant silicon. I mean, look at what they have done 106 00:05:42,200 --> 00:05:46,039 Speaker 4: in their own devices. It's all custom silicon. And that's 107 00:05:46,120 --> 00:05:49,279 Speaker 4: where if I had to pick a strategy for Apple, 108 00:05:49,880 --> 00:05:53,560 Speaker 4: it will likely be custom Silicon using Broadcom or Marvel 109 00:05:53,760 --> 00:05:56,680 Speaker 4: or one of these asay providers. But the hard thing 110 00:05:56,760 --> 00:05:59,120 Speaker 4: for them is because they have missed out all the 111 00:05:59,240 --> 00:06:02,360 Speaker 4: action in the past last three years, it's so hard 112 00:06:02,440 --> 00:06:05,000 Speaker 4: to catch up. Even if you throw money and you 113 00:06:05,040 --> 00:06:08,960 Speaker 4: know your capex dollars, the time is off the essence, 114 00:06:09,000 --> 00:06:12,200 Speaker 4: and the longer they delay this, I feel either is 115 00:06:12,240 --> 00:06:16,039 Speaker 4: Broadcom or a partnership with Google now that antitrust is behind, 116 00:06:16,120 --> 00:06:20,279 Speaker 4: so they may very well adopt Google's LM across their 117 00:06:21,279 --> 00:06:25,000 Speaker 4: huge That will be huge, But I think you know, 118 00:06:25,200 --> 00:06:28,440 Speaker 4: with the regulatory overhand going away, that could be a 119 00:06:28,520 --> 00:06:29,599 Speaker 4: very likely strategy. 120 00:06:29,600 --> 00:06:31,960 Speaker 3: Apple has a ton of cash. It can't buy its 121 00:06:32,000 --> 00:06:32,760 Speaker 3: way to a solution. 122 00:06:32,839 --> 00:06:34,680 Speaker 2: Here, what do you buy? 123 00:06:34,800 --> 00:06:38,719 Speaker 4: I mean these are all scale players, a broad coom. 124 00:06:39,040 --> 00:06:41,720 Speaker 4: Maybe you could say Marvel is a smaller player, but 125 00:06:41,800 --> 00:06:44,719 Speaker 4: you need the best and chips. That's why everyone is 126 00:06:44,760 --> 00:06:48,599 Speaker 4: buying Nvidia because they have the highest performance per what. 127 00:06:49,240 --> 00:06:51,960 Speaker 4: So you can't really get a second or a third 128 00:06:51,960 --> 00:06:55,080 Speaker 4: player because then you compromise on the performance per what. 129 00:06:55,520 --> 00:06:58,920 Speaker 4: When the biggest constraint out there is power, so you 130 00:06:58,920 --> 00:07:00,800 Speaker 4: know you need the leading later and it comes to 131 00:07:00,880 --> 00:07:02,040 Speaker 4: the chip side of the equation. 132 00:07:02,760 --> 00:07:05,440 Speaker 3: Our thanks to Man Deep Saying, Bloomberg Intelligence senior tech 133 00:07:05,440 --> 00:07:06,320 Speaker 3: industry analysts. 134 00:07:06,360 --> 00:07:09,400 Speaker 2: We moved next to corporate earnings from the pizza chain Dominoes. 135 00:07:09,800 --> 00:07:12,640 Speaker 3: Dominoes reported better than expected third quarter earnings this week. 136 00:07:12,720 --> 00:07:15,640 Speaker 3: They were fueled by demand for promotions and the stuffed 137 00:07:15,640 --> 00:07:16,680 Speaker 3: crust pizza. 138 00:07:16,360 --> 00:07:18,680 Speaker 2: From where we were joined by Michael Haylen, Bloomberg Intelligence 139 00:07:18,720 --> 00:07:20,320 Speaker 2: Senior restaurant and food service analyst. 140 00:07:20,440 --> 00:07:23,000 Speaker 3: We began by asking Michael to break down the latest results. 141 00:07:23,320 --> 00:07:24,160 Speaker 2: It was a great quarter. 142 00:07:24,240 --> 00:07:26,960 Speaker 5: I mean five point two percent same star sales in 143 00:07:27,040 --> 00:07:30,440 Speaker 5: the US, and everyone knows quick service restaurants, you know, 144 00:07:30,760 --> 00:07:33,760 Speaker 5: have been struggling due to low income consumer weakness. 145 00:07:34,320 --> 00:07:36,320 Speaker 2: They did it with stuffed crust pizza. 146 00:07:36,360 --> 00:07:40,040 Speaker 5: They were the only major national pizza chain that did 147 00:07:40,080 --> 00:07:43,040 Speaker 5: not have stuff crust pizza. So they added that to 148 00:07:43,080 --> 00:07:48,360 Speaker 5: the repertoire and this year and that that's boosted sales value. 149 00:07:48,960 --> 00:07:53,920 Speaker 5: This quarter was the best deal ever nine ninety nine 150 00:07:53,960 --> 00:07:56,360 Speaker 5: for any pizza and no matter how many toppings you 151 00:07:56,400 --> 00:07:59,160 Speaker 5: want on it, right, So giving people a discount that 152 00:07:59,200 --> 00:08:03,200 Speaker 5: they really want on an item they really want, and 153 00:08:03,240 --> 00:08:05,800 Speaker 5: then you know DoorDash, George is the first quarter they 154 00:08:05,840 --> 00:08:09,440 Speaker 5: were fully rolled out on door Dash and that has 155 00:08:09,560 --> 00:08:12,360 Speaker 5: really helped them take a chunk of that third party 156 00:08:12,920 --> 00:08:16,360 Speaker 5: delivery aggregator business, boosting same source sales. 157 00:08:16,560 --> 00:08:20,080 Speaker 3: Okay, that all makes sense, but is that sustainable, especially 158 00:08:20,160 --> 00:08:23,680 Speaker 3: the promotions like nine ninety nine, which definitely sound appealing 159 00:08:23,720 --> 00:08:26,080 Speaker 3: in this day and age. I mean, these campaigns might 160 00:08:26,200 --> 00:08:30,400 Speaker 3: drive volume, but at some point don't they erode profitability? 161 00:08:30,480 --> 00:08:30,680 Speaker 6: Well? 162 00:08:30,920 --> 00:08:33,920 Speaker 5: I think you know what we saw was margins were flat, 163 00:08:34,000 --> 00:08:38,719 Speaker 5: you know, so to your point, you know, but what 164 00:08:38,760 --> 00:08:41,960 Speaker 5: Madgeman said and what they're right about is that you know, 165 00:08:41,800 --> 00:08:44,760 Speaker 5: you don't take margin to the bank, you take dollars 166 00:08:44,760 --> 00:08:45,319 Speaker 5: to the bank. 167 00:08:45,400 --> 00:08:45,600 Speaker 6: Right. 168 00:08:45,640 --> 00:08:47,680 Speaker 5: And so they did this nine ninety nine deal and 169 00:08:47,679 --> 00:08:50,679 Speaker 5: they actually ran it longer than expected because franchises were 170 00:08:50,679 --> 00:08:54,640 Speaker 5: making so much money off of it, right, And so yeah, 171 00:08:54,679 --> 00:08:57,760 Speaker 5: they're willing to sacrifice a little bit of margin expansion 172 00:08:57,840 --> 00:09:02,520 Speaker 5: here for that track because it's making franchisees happy and 173 00:09:02,600 --> 00:09:06,440 Speaker 5: that's the key when running, when being a franchise or so, yeah, 174 00:09:06,559 --> 00:09:08,480 Speaker 5: I think this is sustainable, right. 175 00:09:08,360 --> 00:09:08,840 Speaker 7: They are. 176 00:09:09,160 --> 00:09:12,600 Speaker 5: They have only a fraction of the third party delivery business, right, 177 00:09:12,600 --> 00:09:14,560 Speaker 5: but they have a third of the pizza market in 178 00:09:14,600 --> 00:09:19,320 Speaker 5: the US. So that's a huge slug of business that 179 00:09:19,440 --> 00:09:21,600 Speaker 5: we think is a great opportunity that's going to continue 180 00:09:21,640 --> 00:09:23,760 Speaker 5: to build over time. You know, Uber Eats, it took 181 00:09:23,800 --> 00:09:26,880 Speaker 5: them quite some time to build some momentum there. This 182 00:09:27,040 --> 00:09:30,360 Speaker 5: was just the first quarter of being fully rolled out 183 00:09:30,360 --> 00:09:32,360 Speaker 5: on door dash, So we think it's going to have 184 00:09:32,400 --> 00:09:36,200 Speaker 5: a big impact over the next three quarters. But it 185 00:09:36,280 --> 00:09:39,280 Speaker 5: sounds like it can continue to build stuff Cruss Pizza, right, 186 00:09:39,320 --> 00:09:41,520 Speaker 5: this is something that's a permanent menu item. This is 187 00:09:41,559 --> 00:09:45,000 Speaker 5: not something that is you know, just a limited time 188 00:09:45,040 --> 00:09:47,280 Speaker 5: offer that's going to be run for a few weeks, right. 189 00:09:47,480 --> 00:09:49,720 Speaker 5: And then value, they have a bunch of different value 190 00:09:49,760 --> 00:09:54,440 Speaker 5: things they do these boost weeks, and they have a 191 00:09:54,480 --> 00:09:58,880 Speaker 5: tip promotion and so they run different value at different times. 192 00:09:58,920 --> 00:10:01,880 Speaker 5: But what they've done has been able to like, you know, 193 00:10:02,400 --> 00:10:05,800 Speaker 5: create a name for themselves and are owning certain type 194 00:10:05,840 --> 00:10:08,520 Speaker 5: of discounts that they run throughout the year. And so 195 00:10:08,720 --> 00:10:12,439 Speaker 5: I think that is important for national pizza players. It's 196 00:10:12,600 --> 00:10:15,520 Speaker 5: it's a business that's heavily weighted towards low income consumers, 197 00:10:15,559 --> 00:10:18,160 Speaker 5: and you know, to my point earlier, they're struggling right now. 198 00:10:18,240 --> 00:10:21,640 Speaker 2: So Mike, explain the economics or explain the strategy of 199 00:10:22,760 --> 00:10:25,520 Speaker 2: using these third party delivery of folks like Uber Eats 200 00:10:25,600 --> 00:10:28,400 Speaker 2: or door dash. What changed for Dominoes, for example? Why 201 00:10:28,440 --> 00:10:31,520 Speaker 2: would they not use them but then make the decision 202 00:10:31,559 --> 00:10:32,079 Speaker 2: to use them. 203 00:10:33,280 --> 00:10:35,800 Speaker 5: Yeah, great question. So you know, at first it was 204 00:10:35,840 --> 00:10:40,600 Speaker 5: really about the cost, right, And you know years ago 205 00:10:40,840 --> 00:10:45,640 Speaker 5: third party delivery companies were charging thirty percent plus Dominos 206 00:10:47,000 --> 00:10:50,520 Speaker 5: number one, they waited till the prices came down. Also, 207 00:10:50,720 --> 00:10:53,560 Speaker 5: their business is really just using the marketplace. They're still 208 00:10:53,679 --> 00:10:56,959 Speaker 5: using their own delivery drivers, right, and so they're able 209 00:10:57,000 --> 00:11:01,520 Speaker 5: to use door dash on for their marketplace and play 210 00:11:01,559 --> 00:11:06,120 Speaker 5: a much much lower vig to the company for the listing, right. 211 00:11:06,200 --> 00:11:09,959 Speaker 5: And so they were the last of all the major 212 00:11:10,080 --> 00:11:13,720 Speaker 5: pizza players and QSR names. They were the final holdout. 213 00:11:13,760 --> 00:11:15,240 Speaker 5: A big part of it was they were just so 214 00:11:15,400 --> 00:11:17,920 Speaker 5: big in delivery and they didn't want to cannibalize the 215 00:11:18,000 --> 00:11:21,120 Speaker 5: margin on that business. But what we're seeing is it 216 00:11:21,200 --> 00:11:25,200 Speaker 5: really dry transactions. This quarter, we saw positive same store 217 00:11:25,280 --> 00:11:28,240 Speaker 5: sales growth with carry out as well as delivery. They 218 00:11:28,280 --> 00:11:31,600 Speaker 5: saw same store sales growth with every income cohort. It 219 00:11:31,640 --> 00:11:33,400 Speaker 5: was a very strong quarter across the board. 220 00:11:34,080 --> 00:11:35,679 Speaker 3: You can count on people to not want to get 221 00:11:35,720 --> 00:11:38,880 Speaker 3: off their couch and always order in, and that's guaranteed 222 00:11:38,880 --> 00:11:39,240 Speaker 3: money made. 223 00:11:39,320 --> 00:11:41,640 Speaker 2: The only offspring that's still on my dole is my 224 00:11:41,720 --> 00:11:44,640 Speaker 2: last guy. He's in college, and he knows he has 225 00:11:44,760 --> 00:11:47,319 Speaker 2: to call me, text me. Does he to get pre 226 00:11:47,400 --> 00:11:51,040 Speaker 2: approval to use any third party deliveries because I hate 227 00:11:51,080 --> 00:11:51,600 Speaker 2: that cost? 228 00:11:51,920 --> 00:11:54,600 Speaker 3: Yeah, I mean, well as Gen xers and older, you know, 229 00:11:54,720 --> 00:11:57,480 Speaker 3: the thought of paying out extra for someone to deliver 230 00:11:57,520 --> 00:11:58,400 Speaker 3: food too is just so. 231 00:11:58,440 --> 00:11:59,880 Speaker 2: I haven't heard from him in like six months. 232 00:12:00,200 --> 00:12:05,560 Speaker 3: That's good progress. So, Michael, is Domino's attracting higher income 233 00:12:05,600 --> 00:12:08,480 Speaker 3: consumers who are perhaps trading down and looking for those 234 00:12:08,520 --> 00:12:11,120 Speaker 3: deals like the nine ninety nine pizza, and I wonder 235 00:12:11,679 --> 00:12:14,040 Speaker 3: how much more market share they can pick up that way. 236 00:12:15,280 --> 00:12:17,520 Speaker 5: Well, same store sales, to your point, did grow with 237 00:12:17,640 --> 00:12:21,160 Speaker 5: higher income consumers. They didn't talk about whether that's a 238 00:12:21,280 --> 00:12:26,040 Speaker 5: trade down naturally, though. You will see that from increasing 239 00:12:26,120 --> 00:12:29,839 Speaker 5: your third party delivery sales, right because those customers tend 240 00:12:29,920 --> 00:12:32,760 Speaker 5: to skew younger and skew more affluent. 241 00:12:32,880 --> 00:12:34,880 Speaker 2: So we do know that's kind of card. 242 00:12:35,559 --> 00:12:36,840 Speaker 5: Yeah, yeah, exactly. 243 00:12:37,440 --> 00:12:40,319 Speaker 2: Thanks to Michael Halen Bloomerg Intelligence Senior restaurant and food 244 00:12:40,320 --> 00:12:41,160 Speaker 2: service analysts. 245 00:12:41,320 --> 00:12:44,000 Speaker 3: Coming up look at how the luxury goods maker LVMH 246 00:12:44,160 --> 00:12:46,439 Speaker 3: unexpectedly returned to sales growth last quarter. 247 00:12:46,679 --> 00:12:49,319 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 248 00:12:49,360 --> 00:12:51,520 Speaker 2: depth research and data on two thousand companies and one 249 00:12:51,559 --> 00:12:52,640 Speaker 2: hundred and thirty industries. 250 00:12:52,960 --> 00:12:56,079 Speaker 3: You can access Bloomberg Intelligence via bi go on the terminal. 251 00:12:56,160 --> 00:12:57,240 Speaker 3: I'm Scarlet Foom. 252 00:12:57,040 --> 00:12:57,959 Speaker 2: And I'm Paul Sweeney. 253 00:12:58,040 --> 00:12:59,120 Speaker 8: This is Bloomberg. 254 00:13:03,800 --> 00:13:08,319 Speaker 1: This is Bloomberg Intelligence with Scarlett Foo and Paul Sweeney 255 00:13:08,640 --> 00:13:09,960 Speaker 1: on Bloomberg Radio. 256 00:13:10,800 --> 00:13:12,520 Speaker 2: Return next to US bank earnings. 257 00:13:12,679 --> 00:13:15,319 Speaker 3: This week, Wall Street's biggest banks reported third quarter earnings 258 00:13:15,320 --> 00:13:17,520 Speaker 3: that surpassed almost all analyst estimates. 259 00:13:17,720 --> 00:13:20,360 Speaker 2: They included Goldman Sachs, Bank of America, Morgan Stanley, JP, 260 00:13:20,440 --> 00:13:24,000 Speaker 2: Morgan Chase, and Wills Fargo. The results were driven by deals, investment, banking, 261 00:13:24,040 --> 00:13:25,040 Speaker 2: and market volatility. 262 00:13:25,120 --> 00:13:27,440 Speaker 3: For a closer look at Bank of America and Morgan Stanley, 263 00:13:27,480 --> 00:13:30,680 Speaker 3: we were joined by Alison Williams, Bloomberg Intelligence, senior analysts 264 00:13:30,679 --> 00:13:32,200 Speaker 3: for global banks and asset managers. 265 00:13:32,320 --> 00:13:35,559 Speaker 2: First asked Alison what she made of Morgan Stanley's quarterly results. 266 00:13:36,120 --> 00:13:39,120 Speaker 8: Obviously, it's a strong environment for equities, especially the third 267 00:13:39,160 --> 00:13:43,200 Speaker 8: quarter was a very strong environment. We hit records multiple times, 268 00:13:43,240 --> 00:13:46,040 Speaker 8: including in the end of September. We had new records 269 00:13:46,080 --> 00:13:50,360 Speaker 8: earlier this quarter. But you know, as we know, when 270 00:13:50,440 --> 00:13:52,880 Speaker 8: you manage a team, when you have that strong environment, 271 00:13:52,920 --> 00:13:54,800 Speaker 8: you want people that are going to take advantage of it. 272 00:13:54,880 --> 00:14:00,120 Speaker 8: And I mean equities trading really jumping. We saw we 273 00:14:00,120 --> 00:14:03,840 Speaker 8: saw strong growth actually at JP Morgan and Morgan Stanley. 274 00:14:03,920 --> 00:14:07,600 Speaker 8: Goldman trailing a bit so, raising maybe some questions about 275 00:14:07,600 --> 00:14:10,760 Speaker 8: what happened there, but also equity fees Morgan Stanley doing well. 276 00:14:10,800 --> 00:14:11,760 Speaker 2: And then the wealth. 277 00:14:11,520 --> 00:14:15,040 Speaker 8: Business, I mean that's really the focus for investors. Those 278 00:14:15,080 --> 00:14:16,520 Speaker 8: flows really strong. 279 00:14:17,240 --> 00:14:19,560 Speaker 3: Yeah, wealth management net revenue of eight point two to 280 00:14:19,600 --> 00:14:22,560 Speaker 3: three billion, it was estimated to increase seven percent to 281 00:14:22,600 --> 00:14:24,600 Speaker 3: seven point seven to eight billion, So that was a big, 282 00:14:24,640 --> 00:14:26,440 Speaker 3: big beat. And this is the part of the business 283 00:14:26,440 --> 00:14:30,280 Speaker 3: that Morgan Stanley has really been focused on to kind 284 00:14:30,280 --> 00:14:32,600 Speaker 3: of separate it from Goldman Sex because this is the 285 00:14:32,640 --> 00:14:36,520 Speaker 3: steady eddy business where it's fee generated, it's recurring, you're 286 00:14:36,560 --> 00:14:41,000 Speaker 3: not dictated by the whims of the market and volatility 287 00:14:41,080 --> 00:14:42,960 Speaker 3: and anything that could happen in any quarter. 288 00:14:43,040 --> 00:14:43,240 Speaker 6: Right. 289 00:14:43,520 --> 00:14:46,880 Speaker 8: So, yeah, So to your point, that wealth and asset 290 00:14:46,880 --> 00:14:49,840 Speaker 8: management tends to be more favored by investors because it 291 00:14:49,840 --> 00:14:52,280 Speaker 8: does tend to be more of a recurring revenue model. 292 00:14:52,400 --> 00:14:55,240 Speaker 8: You know, obviously if the market goes down twenty percent 293 00:14:55,360 --> 00:14:58,160 Speaker 8: or up twenty percent, that has an impact on fees, 294 00:14:58,560 --> 00:15:02,960 Speaker 8: but it's not parable to something like the underwriting or 295 00:15:03,000 --> 00:15:06,800 Speaker 8: the pure transactional business. Recall the pandemic when things completely 296 00:15:06,840 --> 00:15:10,880 Speaker 8: shut down. I mean, granted they recovered, but the fact 297 00:15:10,920 --> 00:15:15,320 Speaker 8: of the matter is like it's less volatility, more recurring revenue. 298 00:15:15,920 --> 00:15:20,480 Speaker 8: Investors like that fee income and they like sort of 299 00:15:20,480 --> 00:15:23,720 Speaker 8: the relative stability of that business. 300 00:15:24,080 --> 00:15:26,480 Speaker 3: So one thing that really jumped out at me, Allison, 301 00:15:26,520 --> 00:15:28,360 Speaker 3: when I was looking at the earnings is the fact 302 00:15:28,360 --> 00:15:32,520 Speaker 3: that all the bank's provision for credit losses Japan, Morgan 303 00:15:32,600 --> 00:15:35,160 Speaker 3: set aside more than what analysts thought it would set aside. 304 00:15:35,200 --> 00:15:38,840 Speaker 3: Golden Sacks set aside less. Morgan Stanley was estimated to 305 00:15:38,920 --> 00:15:41,200 Speaker 3: have set aside ninety seven million. It ended up setting 306 00:15:41,240 --> 00:15:44,840 Speaker 3: aside zero zero for bad losses bad loan losses. What 307 00:15:44,880 --> 00:15:46,320 Speaker 3: does that say they did? 308 00:15:46,360 --> 00:15:48,800 Speaker 8: And I mean for Morgan Stanley, lending is such a 309 00:15:48,800 --> 00:15:51,920 Speaker 8: small part of their business. It's the least out of 310 00:15:51,960 --> 00:15:53,440 Speaker 8: all the banks, So if you're going to see zero, 311 00:15:53,520 --> 00:15:56,640 Speaker 8: you would see it there. But the one question we 312 00:15:56,720 --> 00:15:58,640 Speaker 8: do have, which I think will become clear as we 313 00:15:58,680 --> 00:16:01,680 Speaker 8: see many of the other bank report is you know, 314 00:16:01,800 --> 00:16:04,280 Speaker 8: we're seeing a very strong consumer at these big banks, 315 00:16:04,680 --> 00:16:07,920 Speaker 8: but is there differentiation in terms of the high end 316 00:16:07,960 --> 00:16:11,440 Speaker 8: consumer or lower income consumer? A lot of these banks, 317 00:16:11,440 --> 00:16:14,280 Speaker 8: you know, the focus really is on the higher end consumer. 318 00:16:14,840 --> 00:16:18,360 Speaker 8: JP Morgan. They're despite a lot of the headline figure 319 00:16:18,560 --> 00:16:21,720 Speaker 8: or headlines that came out from Jamie's comments. We look 320 00:16:21,760 --> 00:16:24,560 Speaker 8: at the credit card business and the credit trends in 321 00:16:24,600 --> 00:16:28,080 Speaker 8: that business super strong. Their charge off rate, they actually 322 00:16:28,160 --> 00:16:32,440 Speaker 8: guided it down because they had to because the delinquencies 323 00:16:32,440 --> 00:16:35,000 Speaker 8: are coming in, you know, so much lower. We know 324 00:16:35,040 --> 00:16:37,920 Speaker 8: that JP Morgan really focuses on that Sapphire card, that 325 00:16:38,000 --> 00:16:41,600 Speaker 8: high end card. So they are seeing a strong consumer. 326 00:16:42,120 --> 00:16:45,120 Speaker 8: But will we see something different when we see some 327 00:16:45,160 --> 00:16:47,160 Speaker 8: of the other card companies report. 328 00:16:47,360 --> 00:16:48,840 Speaker 2: You know, when you think about it, the drivers of 329 00:16:48,880 --> 00:16:52,800 Speaker 2: the investment banking business are pretty darn simple. Listen to 330 00:16:52,960 --> 00:16:56,240 Speaker 2: chief executive chief financial Officer Alistair Borthwick. Here's what he 331 00:16:56,240 --> 00:16:59,120 Speaker 2: told analyst on Wednesday. Quote, we've seen more certainty now 332 00:16:59,160 --> 00:17:02,120 Speaker 2: around trade and tear and around taxes as well. It's 333 00:17:02,160 --> 00:17:05,680 Speaker 2: a louder client base to make longer term decisions. That's 334 00:17:05,720 --> 00:17:08,960 Speaker 2: reflected in our investment banking activity. Yeah, it's as simple 335 00:17:09,000 --> 00:17:12,000 Speaker 2: as that, but again it's hard to predict kind of 336 00:17:12,000 --> 00:17:14,120 Speaker 2: what those macro trends are going to be. Switching gears 337 00:17:14,200 --> 00:17:17,600 Speaker 2: to the Bank of America, their bankers did really well, 338 00:17:18,240 --> 00:17:20,080 Speaker 2: not that that's a surprise, but they put us a 339 00:17:20,119 --> 00:17:20,879 Speaker 2: big growth. 340 00:17:20,640 --> 00:17:23,120 Speaker 8: Rate, they did, and you know, to your point, Paul, 341 00:17:23,200 --> 00:17:26,280 Speaker 8: I mean, you've been in this business, right, so the 342 00:17:26,720 --> 00:17:30,560 Speaker 8: having clarity is generally helpful for the investment banking business. 343 00:17:30,880 --> 00:17:33,800 Speaker 8: That's why we did see sort of a fall off midyear. 344 00:17:34,200 --> 00:17:37,480 Speaker 8: But what we've heard from the banks and their bankers 345 00:17:37,640 --> 00:17:41,000 Speaker 8: is that, look, clients are beginning to accept that there 346 00:17:41,080 --> 00:17:43,119 Speaker 8: is some level of uncertainty they'll have to deal with. 347 00:17:43,200 --> 00:17:46,560 Speaker 8: It's not going away necessarily anytime soon. So if you 348 00:17:46,760 --> 00:17:49,880 Speaker 8: need to come to market now, it's probably a good time. 349 00:17:49,920 --> 00:17:53,520 Speaker 8: And by the way, record equity prices fed cutting rates, 350 00:17:54,040 --> 00:17:56,399 Speaker 8: you know, those are also helpful and bringing some of 351 00:17:56,400 --> 00:17:58,600 Speaker 8: those deals to market. Bank of America, by the way, 352 00:18:00,040 --> 00:18:03,480 Speaker 8: talking about their backlog up very strongly for the fourth quarter. 353 00:18:03,600 --> 00:18:08,200 Speaker 8: So this momentum into this next quarter is likely to 354 00:18:08,240 --> 00:18:10,800 Speaker 8: show up again in the in the fourth quarter results. 355 00:18:11,000 --> 00:18:13,560 Speaker 3: So for Bank of America, it feels like investors were 356 00:18:13,680 --> 00:18:17,879 Speaker 3: singularly focused on the net interest income number because it 357 00:18:17,960 --> 00:18:20,360 Speaker 3: had not done so well just a year ago, and 358 00:18:20,520 --> 00:18:23,160 Speaker 3: Bank of America was really focused on improving that. This 359 00:18:23,280 --> 00:18:25,959 Speaker 3: was a big beat on the NII number here and 360 00:18:26,000 --> 00:18:28,920 Speaker 3: they actually guided higher for the fourth quarter. The bank 361 00:18:29,000 --> 00:18:31,280 Speaker 3: is going to hold its first investor day I think 362 00:18:31,320 --> 00:18:34,479 Speaker 3: since twenty eleven next month. How does this set up 363 00:18:34,480 --> 00:18:36,160 Speaker 3: Bank of America for this investor day? 364 00:18:36,520 --> 00:18:38,439 Speaker 8: So I think they are set up well for the 365 00:18:38,480 --> 00:18:40,879 Speaker 8: investor day. And keep in mind investor Day will be 366 00:18:40,920 --> 00:18:43,400 Speaker 8: focused I think on the long term trends. We have 367 00:18:43,840 --> 00:18:48,400 Speaker 8: gotten some management changes, some announcements related to succession planning, 368 00:18:48,440 --> 00:18:51,000 Speaker 8: and I think, you know, Brian moynihan has done a 369 00:18:51,040 --> 00:18:53,720 Speaker 8: great job with the bank. I think the investor day 370 00:18:53,760 --> 00:18:55,640 Speaker 8: is really going to be focused on, you know, what 371 00:18:55,760 --> 00:19:00,280 Speaker 8: is the look forward? And AI is something that we've 372 00:19:00,280 --> 00:19:02,440 Speaker 8: heard a little bit about Bank of America talking about 373 00:19:02,480 --> 00:19:05,800 Speaker 8: that this quarter, Goldman Sachs bringing out their three point 374 00:19:05,840 --> 00:19:08,879 Speaker 8: zero program. Morgan Stanley actually had been talking about that 375 00:19:08,920 --> 00:19:12,320 Speaker 8: with their cuts last year. How is AI going to 376 00:19:12,359 --> 00:19:17,199 Speaker 8: contribute to the structural profitability of Bank of America? You know, 377 00:19:17,320 --> 00:19:22,640 Speaker 8: so cyclical, some very strong trends' quarter structural they've done 378 00:19:22,640 --> 00:19:25,320 Speaker 8: a good job, but what is next for the bank? 379 00:19:25,600 --> 00:19:27,919 Speaker 2: I mean, I just forgot how big Bank of America is, 380 00:19:27,920 --> 00:19:30,679 Speaker 2: and they meet They grew through so many acquisitions, two 381 00:19:30,800 --> 00:19:33,840 Speaker 2: hundred and thirteen thousand employees. It's got a market cap 382 00:19:33,880 --> 00:19:38,040 Speaker 2: of almost four hundred billion dollars. They seem like they've 383 00:19:38,040 --> 00:19:39,640 Speaker 2: got the right mix of assets at this point. 384 00:19:40,480 --> 00:19:44,280 Speaker 8: Yeah, So to your point, they did grow a lot 385 00:19:44,359 --> 00:19:47,639 Speaker 8: through acquisitions under prior managements. And I think you know 386 00:19:47,800 --> 00:19:50,760 Speaker 8: what Brian oinnihan has come in and said was they're 387 00:19:50,760 --> 00:19:54,159 Speaker 8: really going to focus on organic growth. They focused on 388 00:19:54,160 --> 00:19:58,320 Speaker 8: this strategy responsible lending. There's some noise around that when 389 00:19:58,320 --> 00:20:00,439 Speaker 8: times are good, right because everyone said, well, are you 390 00:20:00,480 --> 00:20:03,920 Speaker 8: being too conservative? But then when times are bad, that 391 00:20:04,080 --> 00:20:06,560 Speaker 8: is really helpful to managing the downside. And that's one 392 00:20:06,600 --> 00:20:09,640 Speaker 8: of the things that I think can give investors come 393 00:20:09,680 --> 00:20:13,680 Speaker 8: for as we worry about recession risks in the coming quarters. 394 00:20:14,240 --> 00:20:17,399 Speaker 3: Our thanks to Alison Williams, Bloomberg Intelligence, Senior Analyst for 395 00:20:17,480 --> 00:20:19,080 Speaker 3: Global Banks and Asset managers. 396 00:20:19,119 --> 00:20:22,240 Speaker 2: We move next to earnings from the luxury goods maker LBMH. 397 00:20:22,400 --> 00:20:25,399 Speaker 3: This week, LVMH reported third quarter earnings that beat analyst 398 00:20:25,480 --> 00:20:29,160 Speaker 3: estimates in all five business units after two quarters of declines. 399 00:20:29,400 --> 00:20:32,000 Speaker 3: The rise of revenue and China sales also suggest that 400 00:20:32,000 --> 00:20:34,240 Speaker 3: the slump and luxury demand might be easy. 401 00:20:34,520 --> 00:20:36,120 Speaker 2: For more on this, we were joined by Deb Aik 402 00:20:36,200 --> 00:20:38,360 Speaker 2: and Bloomberg Intelligence luxury goods analyst. 403 00:20:38,640 --> 00:20:41,320 Speaker 3: We began by asking Deb for her take on LVMH's 404 00:20:41,359 --> 00:20:44,400 Speaker 3: results and whether it signals that luxury is back. 405 00:20:44,720 --> 00:20:49,560 Speaker 9: Really a very big sentiment indicator. The comments from the 406 00:20:49,720 --> 00:20:54,600 Speaker 9: company were more positive than the market anticipated. When we 407 00:20:54,640 --> 00:20:57,680 Speaker 9: look at the numbers in terms of the organic sales growth, 408 00:20:57,680 --> 00:21:01,480 Speaker 9: the market expected around minus one minute plus one. But 409 00:21:01,600 --> 00:21:05,119 Speaker 9: it's about the sequential improvement from Q two to Q 410 00:21:05,240 --> 00:21:08,720 Speaker 9: three and the fact that all five of the business 411 00:21:08,800 --> 00:21:12,760 Speaker 9: units are improved versus Q two, and more than that, 412 00:21:13,040 --> 00:21:16,320 Speaker 9: China is mid to high single digit growth versus a 413 00:21:16,400 --> 00:21:20,399 Speaker 9: year ago. The US is robust, Europe is doing the 414 00:21:20,480 --> 00:21:23,760 Speaker 9: same as it did across the board, doing okay but 415 00:21:23,880 --> 00:21:27,200 Speaker 9: missing out on tourism and Asia. Extra Pan is positive. 416 00:21:27,760 --> 00:21:31,240 Speaker 9: We know four q US will face a bit more 417 00:21:31,240 --> 00:21:33,760 Speaker 9: of a difficult comp after the spent in last year 418 00:21:34,640 --> 00:21:38,240 Speaker 9: beyond the election and the Trump win. But into the 419 00:21:38,280 --> 00:21:40,920 Speaker 9: first half of twenty twenty six, the market is looking 420 00:21:40,920 --> 00:21:43,840 Speaker 9: more positive and it's certainly rallied the whole of the sector. 421 00:21:43,920 --> 00:21:46,120 Speaker 9: This morning and this afternoon. 422 00:21:46,040 --> 00:21:49,800 Speaker 2: Hey, dev, what's the correlation between luxury spending and just 423 00:21:49,880 --> 00:21:53,040 Speaker 2: kind of the broader stock market around the world, Because 424 00:21:53,200 --> 00:21:56,200 Speaker 2: markets are really performing well, how does that correlate to 425 00:21:56,240 --> 00:21:57,320 Speaker 2: just luxury spending. 426 00:21:57,920 --> 00:22:01,159 Speaker 9: The big thing on luxury spend has been that the 427 00:22:01,320 --> 00:22:06,680 Speaker 9: very high end has done well, so Airmyre's Brunellokucinelli, where 428 00:22:06,720 --> 00:22:11,520 Speaker 9: they work with a restricted volume operating model, They've done 429 00:22:11,520 --> 00:22:14,520 Speaker 9: well in terms of their top line growth. But when 430 00:22:14,560 --> 00:22:18,240 Speaker 9: I think about an LVMH, you know they're given how 431 00:22:18,240 --> 00:22:21,000 Speaker 9: big they are, they need a big volume there, even 432 00:22:21,000 --> 00:22:24,480 Speaker 9: with some price in to manage growth in this category. 433 00:22:24,600 --> 00:22:28,080 Speaker 9: And instead, what we saw last year and the beginning 434 00:22:28,080 --> 00:22:30,720 Speaker 9: of this year was maybe a little bit of trading down. 435 00:22:30,800 --> 00:22:35,720 Speaker 9: So brands like Tapestry's Coach Ralph Lauren they became really 436 00:22:35,760 --> 00:22:38,200 Speaker 9: so popular, not only in the US, but more on 437 00:22:38,240 --> 00:22:41,960 Speaker 9: a globalized basis too. And so the view has been 438 00:22:42,040 --> 00:22:45,960 Speaker 9: that the sentiment around the share prices has very much 439 00:22:46,000 --> 00:22:50,040 Speaker 9: been opposed and opposite to what's been happening on the 440 00:22:50,080 --> 00:22:53,399 Speaker 9: stock market, but with the exception of the mid range, 441 00:22:54,119 --> 00:22:56,280 Speaker 9: and the mid range have done better because the view 442 00:22:56,400 --> 00:23:02,640 Speaker 9: in the investor mindset has been the luxury buyer will 443 00:23:02,640 --> 00:23:05,359 Speaker 9: trade down. They've done that in some brands, but not 444 00:23:05,480 --> 00:23:08,680 Speaker 9: all brands, in some categories, not all categories, and generally 445 00:23:08,720 --> 00:23:11,679 Speaker 9: we expect the biggest and the best to come back first. 446 00:23:12,240 --> 00:23:15,760 Speaker 3: What about LVMH's wines and spirits division. We've been hearing 447 00:23:15,800 --> 00:23:19,840 Speaker 3: from Constellation brands and other spirits companies that you know, 448 00:23:19,880 --> 00:23:23,960 Speaker 3: there's been this massive shift in consumer tastes away from alcohol, 449 00:23:24,040 --> 00:23:27,000 Speaker 3: certainly the younger generation. Does that affect a company like LVMH. 450 00:23:27,680 --> 00:23:31,120 Speaker 9: So a different kind of thing with LVMH. I think 451 00:23:31,160 --> 00:23:34,160 Speaker 9: at the very high end we had some US weakness, 452 00:23:34,240 --> 00:23:40,680 Speaker 9: so they operate in wines, fine wines, high end champagnes, cognacs, 453 00:23:40,720 --> 00:23:44,600 Speaker 9: and others. Champagne is doing well and is back to 454 00:23:44,640 --> 00:23:49,119 Speaker 9: growth in the US. Rose Wine is doing very very well, 455 00:23:49,640 --> 00:23:53,480 Speaker 9: but some of the spirit side is still struggling a 456 00:23:53,520 --> 00:23:56,960 Speaker 9: little bit, and I think that's because we've seen some 457 00:23:57,119 --> 00:24:01,800 Speaker 9: trading down. So we had China very heavily and the 458 00:24:01,960 --> 00:24:04,560 Speaker 9: US not so solid through the first half the year, 459 00:24:04,600 --> 00:24:06,879 Speaker 9: but there are signs of that coming back. If I 460 00:24:06,920 --> 00:24:09,119 Speaker 9: look at the numbers on the Q three for wines 461 00:24:09,160 --> 00:24:11,880 Speaker 9: and spirits, they're at plus one and they were at 462 00:24:11,920 --> 00:24:14,720 Speaker 9: minus four for Q two and minus nine for Q one, 463 00:24:15,280 --> 00:24:18,560 Speaker 9: So it seems as though inventory is leveled out and 464 00:24:18,600 --> 00:24:20,560 Speaker 9: we're starting to see some selling. 465 00:24:21,320 --> 00:24:24,400 Speaker 2: Deba I learned from you long ago, and looking at luxury, 466 00:24:24,400 --> 00:24:26,119 Speaker 2: you have to also pay attention to what's happening in 467 00:24:26,200 --> 00:24:29,680 Speaker 2: China and the Chinese consumer. Are the Chinese spending either 468 00:24:30,440 --> 00:24:33,480 Speaker 2: in China or are they traveling to the London Parish, 469 00:24:33,560 --> 00:24:35,680 Speaker 2: New York Milan type thing? What are you seeing? 470 00:24:37,240 --> 00:24:40,200 Speaker 9: Yeah, we're still seeing a lot of the spend. We're 471 00:24:40,240 --> 00:24:42,960 Speaker 9: getting mid high single digit growth in that Q three 472 00:24:43,000 --> 00:24:48,119 Speaker 9: from alviw Majia onny is on localized spending. We are 473 00:24:48,160 --> 00:24:52,200 Speaker 9: seeing pockets of growth on the tourism side. So there 474 00:24:52,240 --> 00:24:55,720 Speaker 9: is a more positive view and mixed linked into the 475 00:24:55,920 --> 00:25:00,000 Speaker 9: commentary from these results, but overall we are still absolutely 476 00:25:00,119 --> 00:25:06,159 Speaker 9: the missing Asian tourist, Chinese tourists from Europe, and also 477 00:25:06,359 --> 00:25:09,359 Speaker 9: in Europe, we're missing the strength of the dollar having 478 00:25:09,440 --> 00:25:13,720 Speaker 9: swung over last year with US purchases here and you're 479 00:25:13,880 --> 00:25:16,359 Speaker 9: you are seeing in some but not as many in 480 00:25:16,480 --> 00:25:19,760 Speaker 9: terms of full recovery versus twenty nineteen. There's growth year 481 00:25:19,840 --> 00:25:23,359 Speaker 9: on year, but not versus twenty nineteen into the USI. 482 00:25:23,359 --> 00:25:26,280 Speaker 9: But when it comes to the Chinese tourist, we used 483 00:25:26,280 --> 00:25:30,280 Speaker 9: to say a third of luxury goods just over we're 484 00:25:30,320 --> 00:25:33,560 Speaker 9: on the we're from the Chinese cohort, and that would 485 00:25:33,600 --> 00:25:37,160 Speaker 9: include on land and traveling right, and we still think 486 00:25:37,200 --> 00:25:40,440 Speaker 9: there's a way for that to go, but certainly on 487 00:25:40,680 --> 00:25:43,000 Speaker 9: land and locally they're doing better than they were. 488 00:25:43,440 --> 00:25:46,960 Speaker 2: Oh thanks to deb Aik and Bloomberg Intelligence, Luxury Goods analyst. 489 00:25:46,800 --> 00:25:49,680 Speaker 3: Coming up, look at why the global snacking company Kelenova 490 00:25:49,760 --> 00:25:52,040 Speaker 3: is adding a jolt of protein to its big as snack. 491 00:25:52,359 --> 00:25:55,080 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 492 00:25:55,320 --> 00:25:57,680 Speaker 2: research and data on two thousand companies and one hundred 493 00:25:57,680 --> 00:25:58,400 Speaker 2: and thirty industries. 494 00:25:58,480 --> 00:26:01,920 Speaker 3: You can access Bloomberg Intelligence Big on the terminal. I'm 495 00:26:01,960 --> 00:26:02,880 Speaker 3: Scarlet Foo. 496 00:26:02,680 --> 00:26:04,879 Speaker 2: And I'm Paul Sweeney. This is Bloomberg. 497 00:26:11,000 --> 00:26:15,520 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 498 00:26:15,840 --> 00:26:17,160 Speaker 1: on Bloomberg Radio. 499 00:26:17,800 --> 00:26:20,520 Speaker 2: We move now to news from the consumer good sector, because. 500 00:26:20,240 --> 00:26:23,400 Speaker 3: This week the global snacking company Kelenova announced it'll offer 501 00:26:23,440 --> 00:26:26,320 Speaker 3: a version of pop tarts with higher protein content. This 502 00:26:26,359 --> 00:26:27,360 Speaker 3: will begin in November. 503 00:26:27,480 --> 00:26:29,560 Speaker 2: The news comes this company start to add protein to 504 00:26:29,600 --> 00:26:31,959 Speaker 2: food with hopes of louring shoppers who've moved away from 505 00:26:32,040 --> 00:26:33,400 Speaker 2: highly processed products. 506 00:26:33,480 --> 00:26:36,480 Speaker 3: In other news, the retail giant Walmart announced a partnership 507 00:26:36,480 --> 00:26:39,200 Speaker 3: with AI research company open Ai. This deal would allow 508 00:26:39,200 --> 00:26:41,639 Speaker 3: shoppers to browse and purchase his products on the AI 509 00:26:41,720 --> 00:26:44,200 Speaker 3: chotbot chat GPT. For more on all of. 510 00:26:44,119 --> 00:26:46,760 Speaker 2: This, we were joined by Jen bartashis Bloomberg Intelligence Senior 511 00:26:46,760 --> 00:26:47,560 Speaker 2: retail analyst. 512 00:26:47,800 --> 00:26:50,320 Speaker 3: We began by asking Jen for her take on Kelenova's 513 00:26:50,320 --> 00:26:51,080 Speaker 3: protein boost. 514 00:26:51,560 --> 00:26:53,919 Speaker 7: Really, what we're seeing is a lot of these package 515 00:26:53,920 --> 00:26:57,480 Speaker 7: fry companies are tapping into this protein trend. It's something 516 00:26:57,480 --> 00:27:00,199 Speaker 7: that consumers are really looking for. And at the end 517 00:27:00,240 --> 00:27:01,960 Speaker 7: of the day, when it comes to PepsiCo or it 518 00:27:01,960 --> 00:27:05,320 Speaker 7: comes to Kelenova, this is really about making people feel 519 00:27:05,359 --> 00:27:08,800 Speaker 7: marginally better about eating food that is bad for them. Right, 520 00:27:08,880 --> 00:27:12,359 Speaker 7: Let's let's just be honest about it, right, So you know, 521 00:27:12,440 --> 00:27:14,919 Speaker 7: when you put protein on the package, people feel like 522 00:27:15,000 --> 00:27:17,200 Speaker 7: even if they're making a bad choice. It's not as 523 00:27:17,280 --> 00:27:19,640 Speaker 7: bad as it could have been. And that's really what's 524 00:27:19,720 --> 00:27:20,080 Speaker 7: behind this. 525 00:27:20,400 --> 00:27:23,880 Speaker 3: It's like the equivalent of vanity sizing at retailers. Right, 526 00:27:23,960 --> 00:27:25,679 Speaker 3: you know, you're actually a size six, but we're going 527 00:27:25,760 --> 00:27:27,760 Speaker 3: to tell you you're a size two so you feel better 528 00:27:27,800 --> 00:27:31,240 Speaker 3: and buy more clothes. Is this as simple jen as 529 00:27:31,320 --> 00:27:35,040 Speaker 3: just adding protein powder on top of the Kellogg's pop 530 00:27:35,119 --> 00:27:36,920 Speaker 3: tarts excuse me, Kelenova pop darts. 531 00:27:37,560 --> 00:27:40,360 Speaker 7: Yes, So what they've done is they've they've added protein 532 00:27:40,400 --> 00:27:43,760 Speaker 7: into the pastry part of the pop tart and that 533 00:27:43,880 --> 00:27:46,040 Speaker 7: changes the texture and the taste just a little bit. 534 00:27:46,760 --> 00:27:49,320 Speaker 7: But what's really interesting is the consumer trend behind it. 535 00:27:49,400 --> 00:27:52,399 Speaker 7: You know, we ran a proprietary protein study back in 536 00:27:52,440 --> 00:27:54,879 Speaker 7: the middle of the summer, and what we saw was 537 00:27:54,920 --> 00:27:58,840 Speaker 7: that almost forty percent of consumers eat something with protein 538 00:27:58,960 --> 00:28:01,399 Speaker 7: enhanced whether it's a snack or a beverage, on a 539 00:28:01,440 --> 00:28:05,080 Speaker 7: weekly basis, and you know, at at least thirty eight 540 00:28:05,119 --> 00:28:09,280 Speaker 7: percent so that they're eating more protein enhanced products in 541 00:28:09,320 --> 00:28:12,480 Speaker 7: the last three months. So clearly there's a consumer uptake, 542 00:28:12,520 --> 00:28:14,800 Speaker 7: there's interest in this, and that's what these companies are 543 00:28:14,840 --> 00:28:15,680 Speaker 7: really tapping into. 544 00:28:15,920 --> 00:28:18,199 Speaker 2: Do I want more protein do I need more protein? 545 00:28:18,320 --> 00:28:20,880 Speaker 3: I'm eating more egg whites, but that's because it's available 546 00:28:20,920 --> 00:28:21,280 Speaker 3: at work. 547 00:28:21,440 --> 00:28:23,959 Speaker 2: What are you doing, I don't know, use the same thing. 548 00:28:24,720 --> 00:28:26,679 Speaker 3: Your goldfish do not have extra protein on them. 549 00:28:27,720 --> 00:28:30,240 Speaker 2: Have extra protein. 550 00:28:30,440 --> 00:28:32,560 Speaker 7: Neither of you are on GLP one drugs, right, But 551 00:28:32,600 --> 00:28:35,320 Speaker 7: protein is a big solution for people who are on 552 00:28:35,359 --> 00:28:38,400 Speaker 7: those drugs because you tend to lose muscle mass as 553 00:28:38,440 --> 00:28:41,200 Speaker 7: a side effect of those drugs, and so as the 554 00:28:41,280 --> 00:28:44,160 Speaker 7: uptake of GLP one goes up, there's more and more 555 00:28:44,200 --> 00:28:46,040 Speaker 7: demand for these protein and Harry products. 556 00:28:46,120 --> 00:28:48,600 Speaker 2: That's what I needed. Okay, Now I'm at a cocktail 557 00:28:48,600 --> 00:28:51,080 Speaker 2: party and I need to sound smart on proteins. Now 558 00:28:51,080 --> 00:28:51,480 Speaker 2: I got mine. 559 00:28:51,560 --> 00:28:54,720 Speaker 3: But apparently fiber is the new protein and jen Is 560 00:28:54,760 --> 00:28:56,880 Speaker 3: didn't the PepsiCo CEO say something about. 561 00:28:56,680 --> 00:29:00,760 Speaker 7: This, yeah, you know, whether it's yeah, anything that helps 562 00:29:00,840 --> 00:29:04,040 Speaker 7: kind of enhance the product. So when you talk about 563 00:29:04,040 --> 00:29:08,400 Speaker 7: Dorito's that they have additional milk protein being added, you know, 564 00:29:08,480 --> 00:29:11,640 Speaker 7: higher fiber products. All of these things are things that people, 565 00:29:12,000 --> 00:29:15,160 Speaker 7: the average consumer perceives as having a health or wellness benefit, 566 00:29:15,760 --> 00:29:18,240 Speaker 7: and people are trying, in small steps to be a 567 00:29:18,280 --> 00:29:19,520 Speaker 7: little bit better about their health. 568 00:29:20,000 --> 00:29:21,720 Speaker 2: All right, let's get to another story I thought was 569 00:29:21,840 --> 00:29:26,080 Speaker 2: really interesting Walmart partners with open Ai to offer shopping 570 00:29:26,480 --> 00:29:31,560 Speaker 2: on chat GPT. This sounds like a natural what's going 571 00:29:31,600 --> 00:29:31,840 Speaker 2: on here? 572 00:29:31,880 --> 00:29:32,080 Speaker 6: Jen? 573 00:29:33,000 --> 00:29:35,280 Speaker 7: Yeah, this is an interesting move, but I think it 574 00:29:35,400 --> 00:29:38,240 Speaker 7: really illustrates sort of that trend of what's happening across 575 00:29:38,280 --> 00:29:42,520 Speaker 7: retail in general. Walmart's really been very good about doing 576 00:29:42,560 --> 00:29:46,120 Speaker 7: experimentation and kind of checking out what the opportunities are 577 00:29:46,160 --> 00:29:51,160 Speaker 7: when it comes to social media and social commerce particularly, 578 00:29:51,480 --> 00:29:55,160 Speaker 7: and this lead us to partnership with with Open Eye. 579 00:29:55,240 --> 00:29:58,960 Speaker 7: This really does tap into that as well. Now, social 580 00:29:59,280 --> 00:30:01,640 Speaker 7: spending is still very small in terms of the overall 581 00:30:01,640 --> 00:30:04,960 Speaker 7: percentage of what retailers are achieving, but it's important to 582 00:30:04,960 --> 00:30:08,160 Speaker 7: be present and I think that's what's most notable about 583 00:30:08,160 --> 00:30:08,840 Speaker 7: this announcement. 584 00:30:09,280 --> 00:30:12,680 Speaker 3: What is social spending and how do the numbers differ 585 00:30:12,800 --> 00:30:18,120 Speaker 3: from from normal shopping through Walmart's website or going into 586 00:30:18,120 --> 00:30:19,360 Speaker 3: Walmart's actual stores. 587 00:30:20,240 --> 00:30:22,800 Speaker 7: Yeah. So social commerce is when you're on a platform, 588 00:30:22,840 --> 00:30:25,880 Speaker 7: whether it's on chat, gptin now or whether it's on TikTok, 589 00:30:26,000 --> 00:30:29,560 Speaker 7: or whether it's on Facebook or any of the social 590 00:30:29,640 --> 00:30:31,760 Speaker 7: media platforms, and you have the ability to add to 591 00:30:31,840 --> 00:30:35,560 Speaker 7: cart and buy now. That's that's social commerce, but it's 592 00:30:35,560 --> 00:30:39,400 Speaker 7: still a tiny, tiny fraction of the overall e commerce 593 00:30:39,400 --> 00:30:40,640 Speaker 7: that happens for these companies. 594 00:30:41,000 --> 00:30:42,120 Speaker 4: So while it's. 595 00:30:41,960 --> 00:30:45,400 Speaker 7: Important in terms of their showing that they're present and 596 00:30:45,400 --> 00:30:47,600 Speaker 7: that they're aware of new technologies, it's not going to 597 00:30:47,640 --> 00:30:50,640 Speaker 7: move the needle with regards to their overall e commerce 598 00:30:50,680 --> 00:30:52,280 Speaker 7: sales or their overall business mix. 599 00:30:52,320 --> 00:30:55,960 Speaker 2: At this point, Jen, we've got a little bit more data, 600 00:30:56,000 --> 00:30:59,240 Speaker 2: a little bit more time and has it relates to tariffs? 601 00:30:59,240 --> 00:31:03,000 Speaker 2: What's your best guest says to what your package food companies, 602 00:31:03,040 --> 00:31:07,200 Speaker 2: your retailers, how are they kind of segmenting the terrors 603 00:31:07,560 --> 00:31:09,760 Speaker 2: before maybe passing along something to the consumer. 604 00:31:10,760 --> 00:31:14,800 Speaker 7: Yeah, it's a complicated situation, Paul, And really what's happening 605 00:31:14,880 --> 00:31:18,120 Speaker 7: is where they can find alternative sourcing. A lot of 606 00:31:18,120 --> 00:31:20,600 Speaker 7: companies have been trying to do that. There are some 607 00:31:20,720 --> 00:31:23,280 Speaker 7: companies in package food where that's not as easy. So 608 00:31:23,360 --> 00:31:25,960 Speaker 7: I would take McCormick as an example, where a lot 609 00:31:25,960 --> 00:31:29,760 Speaker 7: of spices you can't produce domestically or you can't source domestically, 610 00:31:30,560 --> 00:31:32,680 Speaker 7: and then it becomes a question of how do you 611 00:31:33,080 --> 00:31:37,280 Speaker 7: negotiate with partners, do you find alternative countries of origin 612 00:31:37,360 --> 00:31:40,760 Speaker 7: that maybe have slightly lower tariff levels, and it's also 613 00:31:41,080 --> 00:31:43,440 Speaker 7: a lot of effort right now is going into finding 614 00:31:43,800 --> 00:31:46,320 Speaker 7: efficiencies that can help offset those costs so that they 615 00:31:46,320 --> 00:31:48,280 Speaker 7: can absorb some of that cost and not have to 616 00:31:48,280 --> 00:31:51,560 Speaker 7: pass it on to consumers. Ultimately, most of the companies 617 00:31:51,600 --> 00:31:54,560 Speaker 7: we're talking to are saying that where needed, they will 618 00:31:54,680 --> 00:31:58,400 Speaker 7: very strategically pass price through, but they're trying to avoid 619 00:31:58,400 --> 00:32:02,080 Speaker 7: a uniform, unilateral price increase just due to tariffs. 620 00:32:02,240 --> 00:32:04,000 Speaker 3: How much of this work has been done what you 621 00:32:04,200 --> 00:32:07,440 Speaker 3: just described, and I guess I wonder how much of 622 00:32:07,480 --> 00:32:10,640 Speaker 3: it will be covered in the earnings calls this quarter. 623 00:32:11,560 --> 00:32:13,360 Speaker 7: I think it will be definitely a topic of the 624 00:32:13,360 --> 00:32:16,960 Speaker 7: earnings calls this quarter. But when we had tariffs back 625 00:32:17,000 --> 00:32:20,040 Speaker 7: in twenty eighteen, a lot of companies started the process 626 00:32:20,160 --> 00:32:25,000 Speaker 7: of identifying other options for sourcing. So there's probably been 627 00:32:25,040 --> 00:32:28,600 Speaker 7: more progress made than people would recognize because it didn't 628 00:32:28,640 --> 00:32:32,080 Speaker 7: just start this year, and so it's been sort of 629 00:32:32,120 --> 00:32:35,520 Speaker 7: a gradual shift. And once they have those plans in place, 630 00:32:35,560 --> 00:32:39,000 Speaker 7: they can sort of accelerate that and then the focus 631 00:32:39,040 --> 00:32:41,920 Speaker 7: really is on efficiencies, and that's where the technology comes 632 00:32:41,960 --> 00:32:44,560 Speaker 7: back into play, where it helps them be better with 633 00:32:44,680 --> 00:32:49,120 Speaker 7: regards to their sourcing, their negotiations, and really in terms 634 00:32:49,160 --> 00:32:53,200 Speaker 7: of understanding what products they actually need to carry and 635 00:32:53,240 --> 00:32:57,000 Speaker 7: which products they could perhaps suspend or discontinue. 636 00:32:56,440 --> 00:32:59,880 Speaker 2: Our thanks to Jen Bartashi's Bloomberg Intelligence Senior retail analyst. 637 00:33:00,000 --> 00:33:01,760 Speaker 3: We move next to news in the tech sector. 638 00:33:02,040 --> 00:33:04,680 Speaker 2: This week, we heard that the chip maker Advanced micro 639 00:33:04,800 --> 00:33:07,320 Speaker 2: Devices received a major order from Oracle for its new 640 00:33:07,360 --> 00:33:09,920 Speaker 2: AI chips. This announcement is part of a frenzy of 641 00:33:09,920 --> 00:33:12,200 Speaker 2: deals by big tech and AI companies. 642 00:33:11,800 --> 00:33:14,719 Speaker 3: And in other news, the cloud based software companies Salesforce 643 00:33:14,800 --> 00:33:17,920 Speaker 3: expanded its partnership with open Ai. This will allow companies 644 00:33:17,960 --> 00:33:21,680 Speaker 3: to access Salesforce's agent Force app and chat GPT, enabling 645 00:33:21,760 --> 00:33:23,680 Speaker 3: instant checkout in its commerce platform. 646 00:33:23,840 --> 00:33:26,440 Speaker 2: For more, we would joined by anaag Rana, Bloomberg Intelligence 647 00:33:26,480 --> 00:33:29,320 Speaker 2: technology analyst. We first asked Anarak if the recent deal 648 00:33:29,320 --> 00:33:31,360 Speaker 2: between AMD and Oracle is unusual. 649 00:33:31,640 --> 00:33:33,960 Speaker 6: The slight and usual part is that the AMD chip 650 00:33:34,040 --> 00:33:36,680 Speaker 6: seems to be doing at parity at what Nvidio chips 651 00:33:36,720 --> 00:33:39,560 Speaker 6: are for this particular case. Now, I do not know 652 00:33:39,600 --> 00:33:42,200 Speaker 6: what kind of workloads Oracle will put on it, so 653 00:33:42,240 --> 00:33:44,840 Speaker 6: you really can't do an apples to apples comparison. But 654 00:33:45,720 --> 00:33:48,560 Speaker 6: The story at this point is Oracle has a massive 655 00:33:48,640 --> 00:33:52,320 Speaker 6: backlock of orders and it needs to invest money to 656 00:33:52,400 --> 00:33:55,000 Speaker 6: get them converted into revenue. They need to open more 657 00:33:55,080 --> 00:33:58,160 Speaker 6: data centers or rent out more data centers. They need 658 00:33:58,160 --> 00:34:01,280 Speaker 6: to buy more chips, buy more hardware, and combine all 659 00:34:01,320 --> 00:34:03,520 Speaker 6: that together and eventually then they're going to get paid 660 00:34:03,520 --> 00:34:05,680 Speaker 6: for all that stuff. So they're going anywhere they can 661 00:34:05,680 --> 00:34:07,680 Speaker 6: find chips right now, and you know, it seems that 662 00:34:07,720 --> 00:34:09,160 Speaker 6: AMD is their next stop. 663 00:34:09,840 --> 00:34:11,640 Speaker 3: So there are a couple of threads to pull on there. 664 00:34:11,680 --> 00:34:15,120 Speaker 3: It feels like AMD is increasingly the number one alternative 665 00:34:15,160 --> 00:34:17,920 Speaker 3: to invidios chips. We can talk about that a little bit. 666 00:34:17,960 --> 00:34:21,280 Speaker 3: But what struck me is that there's no dollar amount 667 00:34:21,320 --> 00:34:26,520 Speaker 3: disclosed in this deal or partnership or promise. The previous 668 00:34:26,800 --> 00:34:30,120 Speaker 3: deal that AMD struck with open Ai just said tens 669 00:34:30,120 --> 00:34:32,800 Speaker 3: of billions of dollars in new revenue. Why are firms 670 00:34:32,880 --> 00:34:34,319 Speaker 3: keeping it so vague. 671 00:34:35,280 --> 00:34:37,520 Speaker 6: Well, because they do not know how many chips they 672 00:34:37,520 --> 00:34:40,000 Speaker 6: would need at what point, at what capacity. This is 673 00:34:40,040 --> 00:34:43,040 Speaker 6: a you know, it's not you know, it's more so 674 00:34:43,120 --> 00:34:46,760 Speaker 6: signaling that we are not just truly dependent on in video, 675 00:34:47,080 --> 00:34:49,440 Speaker 6: we have other options as well. It helps them with 676 00:34:49,880 --> 00:34:52,880 Speaker 6: navigating in terms of pricing from in video. Also, you know, 677 00:34:52,880 --> 00:34:55,160 Speaker 6: we know in video chips are getting expensive over the 678 00:34:55,239 --> 00:34:58,640 Speaker 6: last few years, so there could be one reason. The 679 00:34:58,680 --> 00:35:01,040 Speaker 6: other thing we don't know is what the workloads there are. 680 00:35:01,120 --> 00:35:04,320 Speaker 6: Because we know, for the absolute best of the best, 681 00:35:04,880 --> 00:35:06,839 Speaker 6: you you have to use in video chips. That's what 682 00:35:06,880 --> 00:35:08,880 Speaker 6: we know. Whether all of that changes in twelve to 683 00:35:08,920 --> 00:35:12,120 Speaker 6: eighteen months, we don't know. But there are other workloads 684 00:35:12,120 --> 00:35:14,719 Speaker 6: that may not require that amount of you know, firepower 685 00:35:14,800 --> 00:35:17,319 Speaker 6: or horse power you could say. For that you may 686 00:35:17,480 --> 00:35:20,320 Speaker 6: use you know, AMD chips or something even more inferior. 687 00:35:21,239 --> 00:35:24,719 Speaker 2: And even yet another announcement in your space an rock Salesforce, 688 00:35:24,760 --> 00:35:26,439 Speaker 2: a company you've been talking to us about for many, 689 00:35:26,440 --> 00:35:31,400 Speaker 2: many years, Salesforce and open Ai announced an expanded strategic partnership. 690 00:35:33,000 --> 00:35:33,839 Speaker 2: What's going on there? 691 00:35:35,040 --> 00:35:37,880 Speaker 6: Yeah, So for me, this is actually a far bigger 692 00:35:38,000 --> 00:35:41,879 Speaker 6: news and has more ramifications in the long run. If 693 00:35:41,920 --> 00:35:44,560 Speaker 6: you see what's been happening in the software landscape over 694 00:35:44,600 --> 00:35:48,080 Speaker 6: the past two years, the threat is that Opening I 695 00:35:48,200 --> 00:35:51,160 Speaker 6: will come and it will take away you know, basically 696 00:35:51,239 --> 00:35:54,120 Speaker 6: the businesses of all the application software vendors. You know, 697 00:35:54,160 --> 00:35:58,600 Speaker 6: whether that's Adobe, Workday Salesforce, HubSpot, you name it. Because 698 00:35:58,960 --> 00:36:03,719 Speaker 6: open ai has shown capabilities that their model can help 699 00:36:03,760 --> 00:36:08,480 Speaker 6: out in functions such as finance, human resources, sales automations, 700 00:36:08,480 --> 00:36:13,719 Speaker 6: et cetera. This integration between the world's biggest CRM software vendor, 701 00:36:13,760 --> 00:36:16,560 Speaker 6: which is Salesforce, and open Ai shows that both of 702 00:36:16,560 --> 00:36:19,160 Speaker 6: them will be working together and you know, it'll be 703 00:36:19,200 --> 00:36:23,120 Speaker 6: easier for enterprises to go inside open ai chart GPT 704 00:36:23,719 --> 00:36:26,279 Speaker 6: ask for what they want that gets connected to the 705 00:36:26,840 --> 00:36:30,319 Speaker 6: data that resuldes in Salesforce. Makes it very easy for 706 00:36:30,719 --> 00:36:33,680 Speaker 6: the enterprise customers to do their work as well, rather 707 00:36:33,760 --> 00:36:36,399 Speaker 6: than just going into you know, Salesforce. So I think 708 00:36:36,400 --> 00:36:38,640 Speaker 6: this is a bigger news in the long run. But 709 00:36:39,080 --> 00:36:41,319 Speaker 6: you know we are all talking about Oracle as well. 710 00:36:41,680 --> 00:36:45,520 Speaker 3: Yeah, open Ai announces a new deal with someone every day, Paul. 711 00:36:45,560 --> 00:36:48,279 Speaker 3: This is kind of what you're getting back to. And 712 00:36:48,360 --> 00:36:51,640 Speaker 3: this really both of these announcements are the latest in 713 00:36:51,680 --> 00:36:54,160 Speaker 3: the string of big tech building more computing infrastructure and 714 00:36:54,200 --> 00:36:57,239 Speaker 3: meeting this demand, this and satual demand. I've really lost 715 00:36:57,239 --> 00:37:01,720 Speaker 3: track of the permutations, an what were you about? These 716 00:37:01,920 --> 00:37:05,279 Speaker 3: back and forth announcements and partnerships, and you know, the 717 00:37:05,400 --> 00:37:07,520 Speaker 3: billions of dollars that may or may not change hands. 718 00:37:08,760 --> 00:37:10,600 Speaker 3: Do do we think that these are just announcements that 719 00:37:10,760 --> 00:37:14,080 Speaker 3: may not come to fruition if circumstances change, for instance, 720 00:37:14,120 --> 00:37:15,160 Speaker 3: in the next six months. 721 00:37:16,320 --> 00:37:18,320 Speaker 6: See from a salesforce point of view, and which is 722 00:37:18,320 --> 00:37:20,440 Speaker 6: which I was? You know, you would say most of 723 00:37:20,480 --> 00:37:23,239 Speaker 6: us are worried about as the legacy software names. It's 724 00:37:23,239 --> 00:37:25,840 Speaker 6: a good thing because opening I is a new channel 725 00:37:25,880 --> 00:37:28,760 Speaker 6: of communication with you know, the rest of the world. 726 00:37:28,920 --> 00:37:32,239 Speaker 6: If you can integrate your product with them, it kind 727 00:37:32,239 --> 00:37:35,279 Speaker 6: of saves you from getting disrupted. The question is and 728 00:37:35,360 --> 00:37:37,400 Speaker 6: the long run, and then we'll find out what happens 729 00:37:37,480 --> 00:37:40,440 Speaker 6: is will Opening I have that much level of funding 730 00:37:40,719 --> 00:37:43,319 Speaker 6: to keep up with all the promises that they have. 731 00:37:43,719 --> 00:37:46,719 Speaker 6: They have given very high revenue estimates for the next 732 00:37:46,719 --> 00:37:48,920 Speaker 6: few years. But at the same time, I mean, the 733 00:37:48,960 --> 00:37:51,120 Speaker 6: rest of the bigger you know, tech vendors are not 734 00:37:52,160 --> 00:37:54,560 Speaker 6: you know, just sleeping. At that point, I would say, 735 00:37:54,840 --> 00:37:57,359 Speaker 6: we'll find out whether open I will be able to 736 00:37:57,400 --> 00:38:00,520 Speaker 6: gain market share from the likes of you know, Microsoft, Topple, 737 00:38:00,960 --> 00:38:05,719 Speaker 6: Google and Meta or Amazon, or this is going to 738 00:38:05,719 --> 00:38:07,920 Speaker 6: be just an expansion of the overall market. 739 00:38:08,000 --> 00:38:11,080 Speaker 3: Our thanks to Honor Agrana Bloomberg Intelligence Technology analyst. 740 00:38:11,280 --> 00:38:13,959 Speaker 2: It's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 741 00:38:14,160 --> 00:38:16,720 Speaker 2: providing in depth research and data on two thousand companies 742 00:38:16,719 --> 00:38:18,040 Speaker 2: and one hundred and thirty industries. 743 00:38:18,160 --> 00:38:20,680 Speaker 3: And remember you can access Bloomberg Intelligence via b I 744 00:38:20,760 --> 00:38:23,840 Speaker 3: go on the terminal. I'm Scarlett Foo and I'm Paul Sweeney. 745 00:38:23,920 --> 00:38:26,520 Speaker 2: Stay with us. Today's top stories and global business headlines 746 00:38:26,520 --> 00:38:28,960 Speaker 2: are coming up right now