1 00:00:00,080 --> 00:00:13,360 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 2 00:00:13,400 --> 00:00:17,240 Speaker 1: from coast to coast with Caroline Hide in New York 3 00:00:17,520 --> 00:00:19,520 Speaker 1: and Eva Low in San Francisco. 4 00:00:22,840 --> 00:00:25,720 Speaker 2: This is Bloomberg Tech coming up. Amazon says it's cloud 5 00:00:25,760 --> 00:00:30,800 Speaker 2: service is recovering after widespread outages affected customers like Zoom, Snapchat, 6 00:00:30,880 --> 00:00:31,680 Speaker 2: and Coinbase. 7 00:00:32,640 --> 00:00:36,400 Speaker 3: Plus US China trade talks resuming this week as President 8 00:00:36,440 --> 00:00:39,720 Speaker 3: Trump lists Rare Earth among its top priorities. 9 00:00:39,440 --> 00:00:42,680 Speaker 2: And IBM and Grock partner up to provide greater access 10 00:00:42,760 --> 00:00:45,559 Speaker 2: to the full potential of enterprise AI. We'll discuss with 11 00:00:45,560 --> 00:00:46,400 Speaker 2: them later this hour. 12 00:00:47,360 --> 00:00:48,760 Speaker 4: My first I's check in on these markets. 13 00:00:48,920 --> 00:00:50,879 Speaker 3: D I'm sat in London this week, but I can 14 00:00:50,920 --> 00:00:53,120 Speaker 3: see from across the pond one point thirty percent on 15 00:00:53,159 --> 00:00:55,560 Speaker 3: the nasat one hundred and a new record high. There's 16 00:00:55,560 --> 00:00:58,440 Speaker 3: a risk on tone throughout the markets. We're looking towards 17 00:00:58,440 --> 00:01:01,320 Speaker 3: those China US trade talks, but there are some notable 18 00:01:01,360 --> 00:01:03,960 Speaker 3: gainers underneath the head YEP. 19 00:01:04,040 --> 00:01:06,240 Speaker 2: Apple is a big points driver to the upside. At 20 00:01:06,280 --> 00:01:09,240 Speaker 2: the index level, Apple has touched its first record high 21 00:01:09,240 --> 00:01:12,120 Speaker 2: of twenty twenty five. That's the first record high since 22 00:01:12,200 --> 00:01:15,000 Speaker 2: December of twenty twenty four. We have an upgrade at 23 00:01:15,040 --> 00:01:19,160 Speaker 2: Loop to buy, like many recently siting trends in the 24 00:01:19,200 --> 00:01:21,440 Speaker 2: iPhone upgrade cycle. We're gonna have a lot more on 25 00:01:21,480 --> 00:01:24,080 Speaker 2: this story throughout the hour, but clearly this is a 26 00:01:24,080 --> 00:01:26,959 Speaker 2: big jump for the company and it's really impacting markets 27 00:01:26,959 --> 00:01:29,600 Speaker 2: to the macro level. We're also looking at Amazon, the 28 00:01:29,680 --> 00:01:32,800 Speaker 2: parent of cloud computing AWS. The sock's actually up a 29 00:01:32,840 --> 00:01:38,160 Speaker 2: percentage point. A massive outage overnight, principally around one US 30 00:01:38,240 --> 00:01:41,160 Speaker 2: data center in North Virginia, the US East One site, 31 00:01:41,240 --> 00:01:43,920 Speaker 2: but it has had repercussions for the public sector, the 32 00:01:43,920 --> 00:01:47,920 Speaker 2: private sector, and technology companies of all types. Let's get 33 00:01:47,920 --> 00:01:50,960 Speaker 2: out to Bloomberg'syajo's son, who's been reporting on this throughout 34 00:01:51,000 --> 00:01:55,200 Speaker 2: the incident, very simply a Joe, what happened and what 35 00:01:55,320 --> 00:01:59,640 Speaker 2: of the ramifications beenah ed? 36 00:02:00,040 --> 00:02:05,280 Speaker 5: So this morning Amazon reported that they're experiencing operational failure 37 00:02:05,320 --> 00:02:09,639 Speaker 5: across multiple services and its data center hub in northern Virginia. 38 00:02:10,200 --> 00:02:13,600 Speaker 5: Even though the issue occurred in eastern the northeast of 39 00:02:13,600 --> 00:02:16,800 Speaker 5: the United States, the impact was really fell far and wide. 40 00:02:17,240 --> 00:02:22,200 Speaker 5: Some of the victims of this outage include trading platform 41 00:02:22,320 --> 00:02:28,040 Speaker 5: Robin Hood Lloyd's the British Bank HMRC, the British Tax Authority, 42 00:02:28,400 --> 00:02:33,680 Speaker 5: as well as Perplexity the AI platform. So the company 43 00:02:33,680 --> 00:02:36,480 Speaker 5: said that the issue has been largely fixed, but there 44 00:02:36,520 --> 00:02:41,600 Speaker 5: are residual effects. And this definitely gives me flashback of 45 00:02:41,639 --> 00:02:44,760 Speaker 5: the CrowdStrike outage last year, which you might remember, a 46 00:02:44,800 --> 00:02:49,920 Speaker 5: buggy update from CrowdStrike really paralyzed nearly half the world's 47 00:02:49,919 --> 00:02:53,840 Speaker 5: computers and left people scrambling at airports and sent bankers 48 00:02:53,840 --> 00:02:56,800 Speaker 5: home early because they simply couldn't turn out the computers. 49 00:02:58,200 --> 00:03:00,680 Speaker 3: Yeah, Joe, it does remind us of the important of 50 00:03:00,760 --> 00:03:03,160 Speaker 3: a very few, very powerful players when it comes to 51 00:03:03,240 --> 00:03:07,240 Speaker 3: our tech infrastructure. It hasn't been that significant an incident 52 00:03:07,320 --> 00:03:09,880 Speaker 3: for Amazon in and of itself for many years. 53 00:03:09,919 --> 00:03:11,200 Speaker 4: Now is it twenty twenty one? 54 00:03:11,240 --> 00:03:13,519 Speaker 3: But tell us about the learnings that Amazon's going to 55 00:03:13,560 --> 00:03:15,560 Speaker 3: push forward for AWS. 56 00:03:16,520 --> 00:03:19,640 Speaker 5: Yeah, I think this really speaks to the fragility of 57 00:03:19,800 --> 00:03:25,320 Speaker 5: overdependence on the very few, you know, hyperscaler cloud operators 58 00:03:25,320 --> 00:03:29,399 Speaker 5: that we have. AWS is the world's largest cloud provider. 59 00:03:30,360 --> 00:03:35,760 Speaker 5: Its business surpasses Google and Microsoft's and I believe AWS 60 00:03:36,120 --> 00:03:39,480 Speaker 5: analysts predict that this unit is going to brain about 61 00:03:39,680 --> 00:03:42,040 Speaker 5: one hundred and twenty six billion dollars to the company. 62 00:03:42,760 --> 00:03:45,480 Speaker 5: Amazon itself has said that the company is going to 63 00:03:45,520 --> 00:03:50,000 Speaker 5: invest around one hundred billion or so into building data 64 00:03:50,000 --> 00:03:55,040 Speaker 5: centers and model training. Given that you know, so much 65 00:03:55,040 --> 00:03:58,120 Speaker 5: of our AI training inference is run on these data 66 00:03:58,120 --> 00:04:02,440 Speaker 5: centers cloud computing services these days, I think Amazon will 67 00:04:02,480 --> 00:04:07,360 Speaker 5: really have to think about business continuity so that this 68 00:04:07,400 --> 00:04:08,360 Speaker 5: does not happen again. 69 00:04:09,200 --> 00:04:11,640 Speaker 2: Yeah, Joe, Lots of our audience here on Bloomberg Tech 70 00:04:11,680 --> 00:04:13,960 Speaker 2: are highly technical. It might be their job to deal 71 00:04:14,000 --> 00:04:16,560 Speaker 2: with their cloud computing provider. Loads of people will be 72 00:04:16,600 --> 00:04:18,880 Speaker 2: watching and be like, I don't understand any of this. 73 00:04:19,040 --> 00:04:21,520 Speaker 2: I don't understand what happened. I spent a lot of 74 00:04:21,520 --> 00:04:26,119 Speaker 2: time reading about DNS and reading about DINAMODB, the data 75 00:04:26,160 --> 00:04:29,800 Speaker 2: center database that the AWS relies on. Have they actually 76 00:04:29,839 --> 00:04:32,720 Speaker 2: answered the why of what happened? How could they let 77 00:04:32,760 --> 00:04:33,200 Speaker 2: this happen? 78 00:04:35,160 --> 00:04:36,559 Speaker 6: They have not answered why. 79 00:04:36,960 --> 00:04:40,800 Speaker 5: So DNS is a system that translates web addresses to 80 00:04:40,839 --> 00:04:44,479 Speaker 5: IP addresses so your apps and your websites can load. 81 00:04:45,320 --> 00:04:48,320 Speaker 5: I think we will throughout the US day at the 82 00:04:48,360 --> 00:04:51,640 Speaker 5: company will say exactly what happened, will probably let us know. 83 00:04:52,480 --> 00:04:56,159 Speaker 5: But I think it's very I think it's it's very 84 00:04:56,200 --> 00:05:00,000 Speaker 5: telling that a very small part of the digital infrastructure 85 00:05:00,600 --> 00:05:04,080 Speaker 5: can create such a ripple effect throughout the global economy. 86 00:05:04,240 --> 00:05:07,440 Speaker 5: And I think we will see if the company will 87 00:05:07,480 --> 00:05:10,120 Speaker 5: say anything about how you know, if there will be 88 00:05:12,120 --> 00:05:15,400 Speaker 5: what they will do to satisfy their customers going forward. 89 00:05:16,800 --> 00:05:18,320 Speaker 3: And I'm sure you'll be the first one to help 90 00:05:18,400 --> 00:05:20,440 Speaker 3: us report it out. Ya just and we so appreciate 91 00:05:20,480 --> 00:05:21,800 Speaker 3: you jumping on today. 92 00:05:21,839 --> 00:05:25,039 Speaker 4: Thank you. Let's get to the wider impact look. 93 00:05:24,880 --> 00:05:26,880 Speaker 3: On the tech sector written large today we're in riscon 94 00:05:27,000 --> 00:05:30,240 Speaker 3: mode and Rathmun's with us Grenadilla advisory founder and CEO 95 00:05:30,400 --> 00:05:34,200 Speaker 3: and Anna, Look, we see these technical glitches and the 96 00:05:34,839 --> 00:05:39,640 Speaker 3: realization and well maybe just re memorizing the idea that 97 00:05:39,640 --> 00:05:42,080 Speaker 3: we do depend on a few very big players not 98 00:05:42,120 --> 00:05:44,320 Speaker 3: just for our infrastructure, but for the market to go 99 00:05:44,440 --> 00:05:44,920 Speaker 3: higher too. 100 00:05:44,960 --> 00:05:46,200 Speaker 4: What do you make at the rally today? 101 00:05:47,440 --> 00:05:50,160 Speaker 7: Yeah, the rally, I mean, especially for Amazon, it seems 102 00:05:50,200 --> 00:05:53,120 Speaker 7: like there was no glitch today because Amazon is also 103 00:05:53,279 --> 00:05:57,200 Speaker 7: up with the rest of the markets. As regards to Amazon, 104 00:05:57,360 --> 00:05:59,760 Speaker 7: I do think that there is a concentration problem. Everyone 105 00:06:00,200 --> 00:06:02,719 Speaker 7: about the stock market concentration, I mean, this is sort 106 00:06:02,760 --> 00:06:05,559 Speaker 7: of the same thing. I think we have to start 107 00:06:05,560 --> 00:06:09,480 Speaker 7: looking at digital infrastructure almost as utilities. 108 00:06:09,480 --> 00:06:10,760 Speaker 6: You really can't. 109 00:06:10,520 --> 00:06:14,120 Speaker 7: Live without it, and so from that standpoint, I think 110 00:06:15,000 --> 00:06:17,960 Speaker 7: barriers it to entry are high, but we need to 111 00:06:17,960 --> 00:06:21,160 Speaker 7: start thinking about sort of diversifying our exposure. 112 00:06:21,240 --> 00:06:23,080 Speaker 6: With regards to the rest of the market. 113 00:06:23,720 --> 00:06:26,960 Speaker 7: I think there is a lot of excitement, certainly not 114 00:06:27,040 --> 00:06:29,640 Speaker 7: only in tech, but in other areas of the markets 115 00:06:29,680 --> 00:06:32,480 Speaker 7: as well. I mean, last week we learned about Walmart 116 00:06:32,520 --> 00:06:36,640 Speaker 7: and open Ai. Today we learned about Cleveland Cliffs and 117 00:06:36,839 --> 00:06:40,000 Speaker 7: Rare Earth's exploration. I feel like what's happening now is 118 00:06:40,000 --> 00:06:42,839 Speaker 7: something that investors have been waiting for for a long time, 119 00:06:43,120 --> 00:06:46,039 Speaker 7: which is to see the expansion of the tentacles of 120 00:06:46,120 --> 00:06:49,680 Speaker 7: AI reaching the different parts of the economy and different 121 00:06:49,680 --> 00:06:53,080 Speaker 7: parts of the markets. And this makes us feel a 122 00:06:53,120 --> 00:06:56,920 Speaker 7: lot better about the AI play and AI development because 123 00:06:57,240 --> 00:06:58,520 Speaker 7: it's becoming stickier. 124 00:06:59,279 --> 00:07:01,320 Speaker 6: We can't feel this off as easily. 125 00:07:01,360 --> 00:07:03,320 Speaker 7: We can't just say, okay, those are the data centers 126 00:07:03,360 --> 00:07:04,680 Speaker 7: that are going to go dark and we may not 127 00:07:04,800 --> 00:07:06,919 Speaker 7: use it for ten years. This is becoming more of 128 00:07:06,920 --> 00:07:09,840 Speaker 7: a real thing in our daily lives. 129 00:07:09,840 --> 00:07:12,480 Speaker 3: So interesting you're talking about the broadening out effector in 130 00:07:12,560 --> 00:07:14,360 Speaker 3: the markets. But let's just go back to the first 131 00:07:14,360 --> 00:07:19,320 Speaker 3: point about the over focus. There are basically an oligopoli 132 00:07:19,400 --> 00:07:21,520 Speaker 3: when it comes to cloud provision. I'm here in Europe 133 00:07:21,520 --> 00:07:23,720 Speaker 3: because we've got our Tech summon in London, and one 134 00:07:23,760 --> 00:07:26,320 Speaker 3: of the key debates is to be had is Europe's 135 00:07:26,480 --> 00:07:30,160 Speaker 3: over dependence on other global players, the fact that they 136 00:07:30,160 --> 00:07:32,320 Speaker 3: don't make their own chips, but they also don't have 137 00:07:32,360 --> 00:07:34,720 Speaker 3: their own cloud providers. What do you make out her 138 00:07:34,760 --> 00:07:37,320 Speaker 3: of whether that might indeed change as we all think 139 00:07:37,320 --> 00:07:40,440 Speaker 3: about sovereign AI and sovereign cloud. 140 00:07:41,600 --> 00:07:45,239 Speaker 7: Yeah, so I think the concentration risk we talked about earlier, 141 00:07:45,400 --> 00:07:49,400 Speaker 7: it applies to everybody. This was a global event, right, 142 00:07:49,480 --> 00:07:53,720 Speaker 7: and so you do need to think about diversifying your exposure. 143 00:07:54,280 --> 00:07:56,000 Speaker 6: But we've had stuff. 144 00:07:55,680 --> 00:07:57,920 Speaker 7: Like this in the past, maybe not as large as Amazon, 145 00:07:57,960 --> 00:08:01,960 Speaker 7: but I think the previous speaker talked about christ Strike, CrowdStrike. 146 00:08:02,680 --> 00:08:06,200 Speaker 7: It really it requires a massive amount of investment and 147 00:08:06,240 --> 00:08:09,320 Speaker 7: a massive amount of effort to get that done, and 148 00:08:09,440 --> 00:08:12,520 Speaker 7: so far the effort has been coming from a select 149 00:08:12,600 --> 00:08:17,400 Speaker 7: few regions and countries. Certainly Europe probably needs to think 150 00:08:17,440 --> 00:08:21,000 Speaker 7: about having their own infrastructure as well, but it's not 151 00:08:21,440 --> 00:08:24,320 Speaker 7: as easy to do as it is to say. 152 00:08:25,760 --> 00:08:28,880 Speaker 2: And Apple's just touched four percent in the session again, 153 00:08:29,080 --> 00:08:31,040 Speaker 2: hitting a record high for the first time this year. 154 00:08:31,720 --> 00:08:34,920 Speaker 2: It's a big factor at the index level. What do 155 00:08:34,960 --> 00:08:38,840 Speaker 2: you make of all of these upgrades on optimism around iPhone? 156 00:08:40,280 --> 00:08:45,200 Speaker 7: Yeah, so, especially with regards to the negotiations with China, 157 00:08:45,520 --> 00:08:47,640 Speaker 7: it is really nice to see sales up in the 158 00:08:47,760 --> 00:08:51,040 Speaker 7: United States because then it makes Apple look like less 159 00:08:51,080 --> 00:08:54,360 Speaker 7: dependent on some of this rhetoric between China and the US. 160 00:08:54,600 --> 00:08:57,000 Speaker 7: But I would also say that there is a little 161 00:08:57,000 --> 00:09:01,000 Speaker 7: bit of a spending of pulling forward of thing. When 162 00:09:01,040 --> 00:09:04,440 Speaker 7: you think that iPhones or anything's going to cost four 163 00:09:04,480 --> 00:09:06,920 Speaker 7: or five percent more in a year, are you really 164 00:09:06,960 --> 00:09:09,679 Speaker 7: going to wait for iPhone eighteen? No, You're going to 165 00:09:09,720 --> 00:09:12,440 Speaker 7: buy it today, especially if you have an iPhone X 166 00:09:12,559 --> 00:09:15,680 Speaker 7: or iPhone nine. I can't even remember the numbers anymore, 167 00:09:16,160 --> 00:09:18,360 Speaker 7: but a lot of people have been keeping them, and 168 00:09:18,400 --> 00:09:20,000 Speaker 7: if they're going to renew it, they're going to renew 169 00:09:20,040 --> 00:09:22,640 Speaker 7: it now rather than waiting until next year. So I 170 00:09:22,640 --> 00:09:25,400 Speaker 7: think we're seeing some of that pulling forward effect as well. 171 00:09:26,600 --> 00:09:29,960 Speaker 2: The optimism in technology markets today seems to be around 172 00:09:30,000 --> 00:09:32,800 Speaker 2: earnings in particular and what's to come this week, but 173 00:09:33,000 --> 00:09:36,560 Speaker 2: trade negotiations are also to come this week. Balance those 174 00:09:36,600 --> 00:09:38,240 Speaker 2: two risk factors for. 175 00:09:38,240 --> 00:09:42,880 Speaker 7: US, well, earnings is fundamental and in my mind is 176 00:09:43,000 --> 00:09:45,480 Speaker 7: much much more important. And I do think that the 177 00:09:45,520 --> 00:09:50,720 Speaker 7: stock prices will react to earnings. With regards to trade talks, 178 00:09:51,080 --> 00:09:53,840 Speaker 7: I mean, I feel like the Marcus rising. Ever since 179 00:09:53,880 --> 00:09:56,439 Speaker 7: the first day when President Trump said that he may 180 00:09:56,480 --> 00:09:57,880 Speaker 7: not meet with President she. 181 00:09:59,480 --> 00:10:00,400 Speaker 6: It's been going it up. 182 00:10:00,520 --> 00:10:03,120 Speaker 7: And I think that's the market basically calling bluff in 183 00:10:03,200 --> 00:10:07,120 Speaker 7: both countries. China is an export dependent country. It needs 184 00:10:07,120 --> 00:10:09,440 Speaker 7: to export rare earth minerals as much as we need 185 00:10:09,480 --> 00:10:13,440 Speaker 7: to buy them. Us is a consumer based economy. We 186 00:10:13,480 --> 00:10:15,880 Speaker 7: need to be able to import cheaper goods from China 187 00:10:15,960 --> 00:10:18,760 Speaker 7: as much as you know China needs to export them. 188 00:10:18,920 --> 00:10:19,800 Speaker 6: We need each other. 189 00:10:20,160 --> 00:10:22,880 Speaker 7: So I think the markets are saying, Okay, the deal 190 00:10:22,960 --> 00:10:24,240 Speaker 7: is probably going to get done. 191 00:10:24,640 --> 00:10:25,839 Speaker 6: It's just a matter of time. 192 00:10:27,440 --> 00:10:30,440 Speaker 2: Anna Rabin of grena Dela Advisory, Thank you very much. 193 00:10:30,480 --> 00:10:34,679 Speaker 2: So coming up Meta, TikTok, Snap and many more Under Pressure, 194 00:10:34,880 --> 00:10:37,040 Speaker 2: We're going to discuss why social media giants are about 195 00:10:37,080 --> 00:10:40,839 Speaker 2: to face a mountain of litigation. That's next. 196 00:10:41,040 --> 00:10:41,959 Speaker 4: This is bloobag Tech. 197 00:10:56,520 --> 00:10:59,400 Speaker 3: Social media giants are about to face a wave of 198 00:10:59,440 --> 00:11:02,640 Speaker 3: litigation matter, Snap Bite Downs Alphabet are set to a 199 00:11:02,720 --> 00:11:05,760 Speaker 3: pair in court over two consolidated lawsuits accusing them of 200 00:11:05,840 --> 00:11:10,800 Speaker 3: knowingly designing their platforms to addict users, resulting in depression, anxiety, insomnia, 201 00:11:10,840 --> 00:11:13,920 Speaker 3: and self harm from all Bloomberg's Olivia Carvill it's been 202 00:11:13,960 --> 00:11:16,360 Speaker 3: following these lawsuits, joins us now, and in one of 203 00:11:16,360 --> 00:11:19,120 Speaker 3: the key lines in your story about this, Olivia, you 204 00:11:19,160 --> 00:11:21,800 Speaker 3: talk about how one lawyer who's going to be representing 205 00:11:21,840 --> 00:11:24,480 Speaker 3: the federal cases says, all told, this is a massive 206 00:11:24,600 --> 00:11:28,400 Speaker 3: legal siege on the social media industry. Why is it 207 00:11:28,440 --> 00:11:29,520 Speaker 3: all coming in this wave? 208 00:11:30,600 --> 00:11:33,560 Speaker 8: I mean, we have been seeing these lawsuits filed in 209 00:11:33,640 --> 00:11:36,640 Speaker 8: state and federal court over a number of years now. 210 00:11:36,760 --> 00:11:40,199 Speaker 8: This all started back in twenty twenty two after Francis 211 00:11:40,240 --> 00:11:44,760 Speaker 8: Hagen kind of blew the whistle on Facebook, releasing a 212 00:11:44,800 --> 00:11:48,240 Speaker 8: trove of documents about how the social media giant was 213 00:11:48,320 --> 00:11:51,880 Speaker 8: kind of impacting youth mental health. Following that, we saw 214 00:11:51,920 --> 00:11:55,600 Speaker 8: plaintiff's attorneys really focus in on that and start to 215 00:11:55,640 --> 00:11:59,640 Speaker 8: file lawsuits against these companies accusing them of harming children. 216 00:12:00,080 --> 00:12:03,400 Speaker 8: And over the course of three years, all of those lawsuits, 217 00:12:03,600 --> 00:12:06,880 Speaker 8: all the majority of them now have been consolidated into 218 00:12:07,160 --> 00:12:11,319 Speaker 8: two different litigation tracks, and state court and in federal court. 219 00:12:11,520 --> 00:12:14,439 Speaker 8: We're going to see these cases come to the courtrooms 220 00:12:14,720 --> 00:12:16,959 Speaker 8: next year, and it's going to be, you know, as 221 00:12:17,000 --> 00:12:19,400 Speaker 8: he mentioned in the story, a massive legal siege on 222 00:12:19,440 --> 00:12:23,560 Speaker 8: the social media industry. We're expecting to see a number 223 00:12:23,600 --> 00:12:27,840 Speaker 8: of trials next year and possibly thousands of plaintiffs waiting 224 00:12:27,840 --> 00:12:29,920 Speaker 8: in the wings once those trials close. 225 00:12:31,120 --> 00:12:33,640 Speaker 2: Olivia. A part of the reason that this litigation has 226 00:12:33,679 --> 00:12:36,720 Speaker 2: been pending for quite a long time is that the 227 00:12:36,760 --> 00:12:41,160 Speaker 2: social media companies have had this liability shield right that 228 00:12:41,240 --> 00:12:44,439 Speaker 2: has protected them in some sense from user harm litigation. 229 00:12:45,040 --> 00:12:49,160 Speaker 2: Explain that shield and why it's now not preventing these 230 00:12:49,200 --> 00:12:50,880 Speaker 2: pieces of litigation moving forward. 231 00:12:51,200 --> 00:12:54,240 Speaker 8: Yeah, that's right. I mean the Communications Decency Act. This 232 00:12:54,320 --> 00:12:57,960 Speaker 8: is a federal law that has long protected social media 233 00:12:58,000 --> 00:13:01,800 Speaker 8: platforms and really any internet place platform from facing user 234 00:13:01,840 --> 00:13:02,800 Speaker 8: harm lawsuits. 235 00:13:03,280 --> 00:13:04,800 Speaker 4: What that lawd does is it. 236 00:13:04,720 --> 00:13:08,360 Speaker 8: Provides an immunity shield or a blanket that says you 237 00:13:08,440 --> 00:13:12,360 Speaker 8: cannot file a lawsuit against these companies for the content 238 00:13:12,640 --> 00:13:16,320 Speaker 8: that exists on their sites. What these cases are trying 239 00:13:16,400 --> 00:13:20,160 Speaker 8: to do is sidestep that immunity blanket by saying this 240 00:13:20,200 --> 00:13:23,680 Speaker 8: is not about the content that uses a posting to Facebook, 241 00:13:23,679 --> 00:13:27,440 Speaker 8: to Instagram, Snapchat or TikTok. This is about the design 242 00:13:27,559 --> 00:13:32,839 Speaker 8: of the platforms that these companies intentionally designed their platforms 243 00:13:33,200 --> 00:13:37,480 Speaker 8: to try and addict young users and resulting in many 244 00:13:37,559 --> 00:13:42,679 Speaker 8: harms to kids, from mental health harms like depression, anxiety 245 00:13:42,840 --> 00:13:46,640 Speaker 8: all the way through to self harm and suicidal issues. 246 00:13:48,240 --> 00:13:49,080 Speaker 4: Olivia. 247 00:13:49,400 --> 00:13:53,520 Speaker 3: Often the markets ignore potential legal threats for big tech companies. 248 00:13:54,320 --> 00:13:56,360 Speaker 3: It has been notable that actually a lot of companies 249 00:13:56,400 --> 00:13:59,080 Speaker 3: have been trying to update the protections for children in particular. 250 00:13:59,160 --> 00:14:02,320 Speaker 3: I think of Insta just last week. How have they 251 00:14:02,400 --> 00:14:04,800 Speaker 3: set themselves up to really tackle this in a forward 252 00:14:04,840 --> 00:14:05,640 Speaker 3: going way. 253 00:14:06,200 --> 00:14:09,480 Speaker 8: Yeah, as these cases have been piling up in the courtrooms, 254 00:14:09,520 --> 00:14:13,520 Speaker 8: we've seen almost every one of the defendants start to 255 00:14:13,640 --> 00:14:18,079 Speaker 8: update their policies to really try and get better, stronger 256 00:14:18,160 --> 00:14:21,520 Speaker 8: safeguards for kids. And you saw that recently with what 257 00:14:21,720 --> 00:14:26,080 Speaker 8: Meta announced on Instagram. And that's certainly true. But at 258 00:14:26,120 --> 00:14:29,360 Speaker 8: the same time, this litigation is not going away. These 259 00:14:29,400 --> 00:14:33,400 Speaker 8: allegations stand in court, and I think what's remarkable about 260 00:14:33,440 --> 00:14:36,360 Speaker 8: the kind of position that we're in right now is 261 00:14:36,360 --> 00:14:39,280 Speaker 8: that as of next year, we're going to see the 262 00:14:39,320 --> 00:14:42,520 Speaker 8: alleged victims of social media into the courtroom for the 263 00:14:42,520 --> 00:14:45,680 Speaker 8: first time in the US. So these cases are going 264 00:14:45,720 --> 00:14:49,600 Speaker 8: to be tried. Juries are going to hear testimony from teenagers, 265 00:14:49,640 --> 00:14:53,920 Speaker 8: from experts, from company insiders as well about whether or 266 00:14:54,040 --> 00:14:57,960 Speaker 8: not social media has actually harmed the mental health of youth. 267 00:14:58,320 --> 00:15:00,800 Speaker 8: A lot of people have been asking that question, but 268 00:15:00,880 --> 00:15:03,040 Speaker 8: a jury will have to face their question for the 269 00:15:03,080 --> 00:15:04,120 Speaker 8: first time next year. 270 00:15:05,280 --> 00:15:07,600 Speaker 3: Blom Ogs Olivia Carvill, We thank you very much for 271 00:15:07,600 --> 00:15:10,880 Speaker 3: bringing us the latest. Now we turn our attention to 272 00:15:11,360 --> 00:15:12,000 Speaker 3: talking tech. 273 00:15:12,320 --> 00:15:12,840 Speaker 4: First up. 274 00:15:13,200 --> 00:15:15,960 Speaker 3: Sales of Apple's iPhone seventeen are off to a strong 275 00:15:16,000 --> 00:15:18,360 Speaker 3: start in the US and in China, but the latest 276 00:15:18,400 --> 00:15:21,840 Speaker 3: iPhone model has outsold its predecessor in their respective first 277 00:15:21,880 --> 00:15:23,200 Speaker 3: ten days by fourteen percent. 278 00:15:23,240 --> 00:15:25,040 Speaker 4: It's all according to Counterpoint Research. 279 00:15:25,360 --> 00:15:27,560 Speaker 3: The research firm atribute to the boost to an improved 280 00:15:27,560 --> 00:15:31,280 Speaker 3: display more storage than they upgraded a nineteen chen plus. 281 00:15:31,400 --> 00:15:34,120 Speaker 3: London based fintech Revolute has been cleared to launch banking 282 00:15:34,160 --> 00:15:36,800 Speaker 3: operations in Mexico. It's the second regulatory green light in 283 00:15:36,840 --> 00:15:39,840 Speaker 3: Latin America this month, after Columbia approved it to create 284 00:15:39,880 --> 00:15:42,800 Speaker 3: a bank, so the region is central to Revolute's growth plans. 285 00:15:43,000 --> 00:15:45,480 Speaker 3: And the company says it expects quote millions of people 286 00:15:45,920 --> 00:15:50,080 Speaker 3: in Mexico, and China says it has irrefutable evidence of 287 00:15:50,120 --> 00:15:53,880 Speaker 3: a US cyber attack on its National Timekeeping Agency dating 288 00:15:53,880 --> 00:15:57,640 Speaker 3: back to twenty twenty two. Beijing accuses Washington of exploiting vulnerabilities, 289 00:15:57,640 --> 00:16:00,160 Speaker 3: and the mobile phones used by the agency's employee is 290 00:16:00,440 --> 00:16:05,000 Speaker 3: distilled sensitive data. The US National Security Agency didn't immediately 291 00:16:05,040 --> 00:16:06,600 Speaker 3: respond to request for comment. 292 00:16:09,320 --> 00:16:11,120 Speaker 9: One of the things I want is China's going to 293 00:16:11,160 --> 00:16:13,960 Speaker 9: buy so I means I want China to stop with evento, 294 00:16:14,040 --> 00:16:17,680 Speaker 9: nonald very, you know, normal things. I don't want them 295 00:16:17,680 --> 00:16:19,520 Speaker 9: to play the rare Earth game with US. 296 00:16:21,200 --> 00:16:24,400 Speaker 3: President Trump there aboard Air Force one, outlining his expectations 297 00:16:24,440 --> 00:16:27,120 Speaker 3: for upcoming trade talks of China, discussions that could have 298 00:16:27,240 --> 00:16:30,720 Speaker 3: major implications for the global tech supply chain and semiconductor industry. 299 00:16:30,920 --> 00:16:33,520 Speaker 3: Grim Vagsinia Tech editor Mike Shepperd joins US now in 300 00:16:33,560 --> 00:16:37,720 Speaker 3: the latest important conversations to strike up again in Malaysia 301 00:16:37,760 --> 00:16:38,240 Speaker 3: this week. 302 00:16:39,080 --> 00:16:41,360 Speaker 10: They certainly are Cara, and we're going to be watching 303 00:16:41,560 --> 00:16:44,040 Speaker 10: exactly as you said, for what the US might be 304 00:16:44,160 --> 00:16:47,800 Speaker 10: willing to give up in return for those three key 305 00:16:47,880 --> 00:16:52,440 Speaker 10: areas that President Donald Trump outlined on Air Force One yesterday. 306 00:16:52,800 --> 00:16:55,280 Speaker 10: One of them, of course, is rare earths. That matters 307 00:16:55,280 --> 00:16:58,400 Speaker 10: a lot for the tech industry, all those critical minerals 308 00:16:58,480 --> 00:17:01,800 Speaker 10: going into so many different products, but not just in tech, 309 00:17:02,040 --> 00:17:04,920 Speaker 10: they go into autos, They even go into defense equipment. 310 00:17:05,160 --> 00:17:07,440 Speaker 10: So this is something that is crucial for the US 311 00:17:07,520 --> 00:17:11,399 Speaker 10: to reach an agreement on. After China moved to start 312 00:17:11,440 --> 00:17:15,800 Speaker 10: to impose export controls on sales of those critical materials 313 00:17:16,040 --> 00:17:18,600 Speaker 10: to buyers here in the US, that really hit a 314 00:17:18,640 --> 00:17:22,359 Speaker 10: nerve with US negotiators. But another sore point, Carol, and 315 00:17:22,520 --> 00:17:25,840 Speaker 10: while it's not exactly tech, it is important, perhaps in 316 00:17:26,800 --> 00:17:30,440 Speaker 10: a connected way, and that is soybeans. The President has 317 00:17:30,480 --> 00:17:33,399 Speaker 10: been disgruntled, along with his advisors, that China is not 318 00:17:33,520 --> 00:17:37,359 Speaker 10: buying any soybeans from US producers this year, and that 319 00:17:37,440 --> 00:17:40,720 Speaker 10: is taking aim at a key source of political support 320 00:17:40,840 --> 00:17:43,880 Speaker 10: for the president here in the US, and he wants 321 00:17:43,960 --> 00:17:47,399 Speaker 10: China to start buying those soybeans again. That was twelve 322 00:17:47,440 --> 00:17:51,120 Speaker 10: billion dollars in purchases in twenty twenty four. It has 323 00:17:51,240 --> 00:17:54,080 Speaker 10: zeroed out this year. So again it's on the table. 324 00:17:54,280 --> 00:17:56,360 Speaker 10: But Carol, the question is what will the US give 325 00:17:56,520 --> 00:17:59,439 Speaker 10: up in return? And does that mean a relaxation of 326 00:17:59,480 --> 00:18:03,920 Speaker 10: some of those export controls on critical technology that Beijing 327 00:18:04,160 --> 00:18:07,760 Speaker 10: has chafed against for the past several years. Will it 328 00:18:07,880 --> 00:18:11,320 Speaker 10: meet a relaxation of limits on exports of AI chips 329 00:18:11,720 --> 00:18:15,760 Speaker 10: or perhaps semiconductor manufacturing equipment like what we see made 330 00:18:15,760 --> 00:18:19,280 Speaker 10: by ASML and Tokyo Electron. This will be all on 331 00:18:19,320 --> 00:18:22,320 Speaker 10: the table later this week when Scott Besse meets with 332 00:18:22,359 --> 00:18:25,080 Speaker 10: his Chinese counterpart in Malaysia later this week. 333 00:18:26,119 --> 00:18:29,480 Speaker 2: Mike Covid Night, a lot of headlines on Nespiria. Can 334 00:18:29,480 --> 00:18:33,000 Speaker 2: you just help us understand what's happening in that case 335 00:18:33,000 --> 00:18:37,040 Speaker 2: study scenario, what the US government is aggrieved about relative 336 00:18:37,359 --> 00:18:37,879 Speaker 2: the Dutch. 337 00:18:39,320 --> 00:18:43,960 Speaker 10: Well, this is a fascinating sideshow really to the broader 338 00:18:44,000 --> 00:18:48,920 Speaker 10: conflict between the US and its allies and China over technology. 339 00:18:49,119 --> 00:18:51,040 Speaker 10: But in this case it all boils down to one 340 00:18:51,119 --> 00:18:55,280 Speaker 10: company based in the Netherlands Nextperia, the US is concerned 341 00:18:55,280 --> 00:18:59,400 Speaker 10: that its parent company, Wingtech, has a plan to siphon 342 00:18:59,520 --> 00:19:04,240 Speaker 10: critical chip making technology out of European hands and into 343 00:19:04,320 --> 00:19:07,840 Speaker 10: China to bolster the domestic industry, and it put pressure 344 00:19:07,880 --> 00:19:11,880 Speaker 10: on Dutch authorities to seize control and replace the CEO, 345 00:19:12,080 --> 00:19:15,560 Speaker 10: which happened at the end of last month. We learned 346 00:19:15,600 --> 00:19:19,080 Speaker 10: about this all last week through court filings in the Netherlands, 347 00:19:19,240 --> 00:19:23,280 Speaker 10: and China is responding forcefully. It has imposed restrictions on 348 00:19:23,520 --> 00:19:27,639 Speaker 10: exports of Nexperia products that were made in China, and 349 00:19:27,640 --> 00:19:31,240 Speaker 10: we've also seen messages in we chat to Nexperia employees 350 00:19:31,359 --> 00:19:34,080 Speaker 10: in China saying that they do not have to listen 351 00:19:34,160 --> 00:19:39,160 Speaker 10: to the new management running Nextperia based in the Netherlands. 352 00:19:39,280 --> 00:19:41,280 Speaker 10: So this is something we will want to watch closely 353 00:19:41,280 --> 00:19:43,840 Speaker 10: as we see the Dutch taking on the world's second 354 00:19:43,880 --> 00:19:47,480 Speaker 10: largest economy over the fate of this companies, which also 355 00:19:47,560 --> 00:19:51,000 Speaker 10: I will say it provides a lot of semiconductors legacy chips, 356 00:19:51,040 --> 00:19:53,800 Speaker 10: mind you, but still to the auto industry and consumer 357 00:19:54,320 --> 00:19:55,600 Speaker 10: electronics producers. 358 00:19:56,800 --> 00:20:00,600 Speaker 2: But Bess, Mike Shepard, thank you very much. Another story, advisor, 359 00:20:00,640 --> 00:20:04,399 Speaker 2: Glass Lewis is urging Tesla shareholders to vote against Elon 360 00:20:04,520 --> 00:20:08,840 Speaker 2: musk potentially trillion dollar pay package, the second major proxy 361 00:20:08,880 --> 00:20:12,000 Speaker 2: firm to do so ahead of Tesla's November sixth and 362 00:20:12,080 --> 00:20:14,399 Speaker 2: your meeting. Let's get out to Bloomberg's Global Autos are 363 00:20:14,480 --> 00:20:18,240 Speaker 2: Craig Trudel. I'm reading the Glass Lewis note, and they're 364 00:20:18,280 --> 00:20:23,840 Speaker 2: worried about, I think shareholder dilution. But just summarize why 365 00:20:23,880 --> 00:20:27,400 Speaker 2: they're proposing and recommending voting against this compackage. 366 00:20:28,720 --> 00:20:31,520 Speaker 11: Yeah, I think you put the nail on the head 367 00:20:31,520 --> 00:20:33,720 Speaker 11: there in terms of dilution being an issue, I think, 368 00:20:33,880 --> 00:20:36,760 Speaker 11: and this goes back to, you know, sort of criticism 369 00:20:36,840 --> 00:20:41,080 Speaker 11: that you know, the judge in Delaware sort of level 370 00:20:41,119 --> 00:20:45,680 Speaker 11: that at the initial paid package that Tesla's border range 371 00:20:45,680 --> 00:20:49,680 Speaker 11: from USK back in twenty eighteen. This is a case 372 00:20:49,720 --> 00:20:53,359 Speaker 11: of a CEO who's already quite aligned with the future 373 00:20:53,400 --> 00:20:57,040 Speaker 11: of his company by virtue of the substantial stake that 374 00:20:57,080 --> 00:20:59,800 Speaker 11: he has in the company. And there is a q 375 00:21:00,359 --> 00:21:02,959 Speaker 11: on the part of of you know, the these proxy 376 00:21:02,960 --> 00:21:06,200 Speaker 11: advisors of just you know, to what degree is it 377 00:21:06,240 --> 00:21:10,680 Speaker 11: is it necessary or appropriate to hand over more control 378 00:21:10,880 --> 00:21:13,920 Speaker 11: of this company and issue so many shares that would 379 00:21:13,960 --> 00:21:17,280 Speaker 11: dilute the current shareholder base of Tesla. 380 00:21:18,640 --> 00:21:22,000 Speaker 3: Now, Tesla Craig has said that the Glass Lewis recommendation 381 00:21:22,200 --> 00:21:24,920 Speaker 3: is quote misguided in an ex post and they're talking 382 00:21:24,920 --> 00:21:28,199 Speaker 3: about the recommendations attempting to override the mandate of our 383 00:21:28,240 --> 00:21:32,240 Speaker 3: shareholders delivered to Elon and ignore the staggering financial results 384 00:21:32,280 --> 00:21:35,320 Speaker 3: that were delivered under Elon's leadership. Just what is the 385 00:21:35,480 --> 00:21:37,320 Speaker 3: argument coming from the business right now? 386 00:21:38,880 --> 00:21:39,120 Speaker 6: Yeah. 387 00:21:39,400 --> 00:21:42,800 Speaker 11: I think it's interesting because you know, you you sort 388 00:21:42,800 --> 00:21:46,600 Speaker 11: of at some points hear Tesla, you know, talk about 389 00:21:46,600 --> 00:21:48,760 Speaker 11: the idea that they're more than just a car company. 390 00:21:49,080 --> 00:21:53,200 Speaker 11: And yet it's interesting that they sort of compare their 391 00:21:53,240 --> 00:21:57,639 Speaker 11: performance versus other car companies, and they're by virtue of 392 00:21:57,680 --> 00:22:01,280 Speaker 11: doing that comparison, you know, make them look, you know, 393 00:22:01,359 --> 00:22:04,040 Speaker 11: awfully different from from these companies that for a long 394 00:22:04,080 --> 00:22:07,119 Speaker 11: time they've said, you know, we shouldn't be compared with 395 00:22:07,160 --> 00:22:11,600 Speaker 11: those with those companies. So of course there is you know, 396 00:22:11,680 --> 00:22:16,680 Speaker 11: some some some reason to sort of celebrate the returns 397 00:22:16,760 --> 00:22:19,680 Speaker 11: that this company has managed under Musk. We should acknowledge 398 00:22:19,680 --> 00:22:20,200 Speaker 11: that as well. 399 00:22:21,280 --> 00:22:23,480 Speaker 3: We'll see if that's celebrating Amazon Wednesday with their ownings. 400 00:22:23,480 --> 00:22:25,160 Speaker 3: Come Blie most Crowdridel, We thank. 401 00:22:25,000 --> 00:22:34,280 Speaker 2: You, Welcome back to Bloomberg Tech. The vibe in tech 402 00:22:34,359 --> 00:22:37,959 Speaker 2: markets right now is a lot of anticipation around earning season. 403 00:22:38,000 --> 00:22:40,280 Speaker 2: Eighty five percent of the S and P five hundred 404 00:22:40,280 --> 00:22:43,520 Speaker 2: has already beaten profit expectations, and as that one hundred 405 00:22:43,560 --> 00:22:46,600 Speaker 2: is up one point four percent. A big factor is 406 00:22:46,680 --> 00:22:49,920 Speaker 2: good vibes around Apple and also other names pushing higher 407 00:22:50,000 --> 00:22:52,480 Speaker 2: despite negative news headlines. Let's get out so some of 408 00:22:52,480 --> 00:22:55,040 Speaker 2: the top stories of the day with Bloomberg Equities reporter 409 00:22:55,359 --> 00:22:58,480 Speaker 2: Nora Melinda. Let's start or with Amazon and AWS. 410 00:22:59,040 --> 00:23:01,120 Speaker 12: Yes, lots to keep an on right now ed and 411 00:23:01,160 --> 00:23:04,280 Speaker 12: pertaining to Amazon here. Of course, we know this has 412 00:23:04,320 --> 00:23:07,560 Speaker 12: been a discussion all day long about the widespread outage 413 00:23:07,560 --> 00:23:10,920 Speaker 12: that was seen here, this disruption from AWS that affected 414 00:23:10,920 --> 00:23:14,720 Speaker 12: a lot of different companies including Roadblocks, Fortnite, Snapchat, a 415 00:23:14,720 --> 00:23:17,720 Speaker 12: few others here. So we are seeing shares currently rebounding, 416 00:23:17,720 --> 00:23:19,959 Speaker 12: but we were seeing some weakness earlier in the trading 417 00:23:20,000 --> 00:23:22,920 Speaker 12: session as it was really falling behind, lagging a lot 418 00:23:22,920 --> 00:23:25,359 Speaker 12: of its mag seven peers. But if you look about 419 00:23:25,359 --> 00:23:27,240 Speaker 12: a year to date basis here looking at shares of 420 00:23:27,280 --> 00:23:31,119 Speaker 12: Amazon down about two percent here, So definitely something to 421 00:23:31,160 --> 00:23:32,600 Speaker 12: keep an eye on as we just think about the 422 00:23:32,640 --> 00:23:34,120 Speaker 12: broader landscape of this company. 423 00:23:35,920 --> 00:23:38,240 Speaker 3: And it's also notable that it's one of the key 424 00:23:38,280 --> 00:23:40,360 Speaker 3: points additions. 425 00:23:39,760 --> 00:23:41,359 Speaker 4: But not the one but Apple. 426 00:23:41,440 --> 00:23:43,120 Speaker 3: Let's switch Gibbs to a company that's in a new 427 00:23:43,160 --> 00:23:47,480 Speaker 3: record high helping the index from an undona bocus today, 428 00:23:47,560 --> 00:23:47,880 Speaker 3: no one. 429 00:23:47,840 --> 00:23:49,200 Speaker 4: Took us through Apple and why it is routing. 430 00:23:49,440 --> 00:23:52,320 Speaker 12: Yes, Apple shares down just shy of five percent year 431 00:23:52,359 --> 00:23:54,560 Speaker 12: to date, but really seeing some green on this green today. 432 00:23:54,840 --> 00:23:56,640 Speaker 12: Of course, this comes after the fact that we did 433 00:23:56,680 --> 00:23:59,199 Speaker 12: see over the first ten days of the sale of 434 00:23:59,240 --> 00:24:01,879 Speaker 12: the iPhone seven teen series, we are seeing that it 435 00:24:01,960 --> 00:24:05,720 Speaker 12: outsold the iPhone sixteen by about fourteen percent. So you 436 00:24:05,800 --> 00:24:08,520 Speaker 12: did see Luke Capital upgrading the stock to buy from hold, 437 00:24:08,800 --> 00:24:12,600 Speaker 12: of course, underscoring the positive iPhone demand trends. But we 438 00:24:12,680 --> 00:24:15,920 Speaker 12: are seeing shares of Apple, as you mentioned Caroline rallying 439 00:24:15,960 --> 00:24:17,000 Speaker 12: for a record. 440 00:24:16,760 --> 00:24:21,119 Speaker 4: High today, really strong today as well. 441 00:24:21,520 --> 00:24:24,280 Speaker 3: Absolutely starting to see that four percent add to now 442 00:24:24,400 --> 00:24:27,080 Speaker 3: a four percent rally on the here finally breaking into 443 00:24:27,119 --> 00:24:30,160 Speaker 3: positive territory bluevegs Normalinda, We thank you so much. Let's 444 00:24:30,160 --> 00:24:32,200 Speaker 3: shift gears to other areas that are rallying. In particular 445 00:24:32,280 --> 00:24:34,840 Speaker 3: crypto and crypto stocks are actually doing better this Monday 446 00:24:35,200 --> 00:24:39,320 Speaker 3: than underlying bitcoin is. We're looking at bitcoin miners in particular, 447 00:24:39,359 --> 00:24:42,400 Speaker 3: they're outperforming in general the original cryptocurrency as they expand 448 00:24:42,480 --> 00:24:46,359 Speaker 3: further into AI data centers. I can tolches with us 449 00:24:46,359 --> 00:24:49,520 Speaker 3: August co CEO and co founder to discuss all things crypto, 450 00:24:49,600 --> 00:24:51,399 Speaker 3: but I just want to dwell on that for a moment. 451 00:24:51,800 --> 00:24:56,240 Speaker 3: This desire for compute has seen companies pivot core Weave 452 00:24:56,320 --> 00:24:58,280 Speaker 3: once upon a time was a crypto minor, and now 453 00:24:58,280 --> 00:25:00,960 Speaker 3: it's a key neo cloud. What are you making of 454 00:25:01,040 --> 00:25:03,760 Speaker 3: others trying to ride that wave and hiring key executives 455 00:25:03,840 --> 00:25:04,159 Speaker 3: to do so. 456 00:25:05,840 --> 00:25:07,119 Speaker 13: Look, at the end of the day, you're going to 457 00:25:07,160 --> 00:25:10,440 Speaker 13: go where you know, whoever pays you the most and 458 00:25:10,480 --> 00:25:13,280 Speaker 13: where you can sell the highest price. And to your point, 459 00:25:13,320 --> 00:25:16,600 Speaker 13: the bitcoin miners have a secured grid power. It gives 460 00:25:16,600 --> 00:25:19,440 Speaker 13: them that strategic advantage if you think about data center space, 461 00:25:19,480 --> 00:25:22,000 Speaker 13: and so I think right now they're definitely coming out 462 00:25:22,000 --> 00:25:24,720 Speaker 13: as a favorite, and you're seeing that demand across the board. 463 00:25:24,760 --> 00:25:26,399 Speaker 13: So it's going to be very interesting. You know, today 464 00:25:26,800 --> 00:25:31,440 Speaker 13: bitcoin isn't used Bitcoin blockchain isn't used for processing transactions, 465 00:25:31,600 --> 00:25:33,680 Speaker 13: but it'll be interesting to see if that has any 466 00:25:33,680 --> 00:25:34,520 Speaker 13: effect online. 467 00:25:36,160 --> 00:25:39,560 Speaker 2: In recent weeks, it's been very interesting to track how 468 00:25:39,600 --> 00:25:43,160 Speaker 2: bitcoin's behaved in the moment. Sometimes it can seem severe 469 00:25:43,720 --> 00:25:48,280 Speaker 2: in the context of risk headlines about trade, the president's 470 00:25:48,320 --> 00:25:51,040 Speaker 2: relationship with China, but I think you could give us 471 00:25:51,040 --> 00:25:54,160 Speaker 2: some historical context that things are actually more calm through 472 00:25:54,200 --> 00:25:57,440 Speaker 2: the bitcoin lens than at least the headlines might suggest. 473 00:25:59,240 --> 00:25:59,760 Speaker 6: Absolutely. 474 00:26:00,119 --> 00:26:03,560 Speaker 13: On October tenth, we had our newest bitcoin block Friday, 475 00:26:03,840 --> 00:26:08,000 Speaker 13: which saw nineteen billion and roughly liquidations across a number 476 00:26:08,000 --> 00:26:11,040 Speaker 13: of exchanges. You know, it was a very large move, 477 00:26:11,119 --> 00:26:13,879 Speaker 13: but relative to your point ed, you know, bitcoin only 478 00:26:13,920 --> 00:26:16,000 Speaker 13: moved the price moved twelve percent, and if we had 479 00:26:16,040 --> 00:26:18,399 Speaker 13: looked at you know, call it twenty twenty or twenty eighteen, 480 00:26:18,440 --> 00:26:20,679 Speaker 13: we probably would have seen that move over forty percent. 481 00:26:21,000 --> 00:26:23,280 Speaker 13: And so, you know, the maturation of the space is 482 00:26:23,280 --> 00:26:27,120 Speaker 13: definitely here. The liquidations were clearly isolated to a number 483 00:26:27,160 --> 00:26:30,399 Speaker 13: of exchanges, but it did show that while there was 484 00:26:30,520 --> 00:26:33,800 Speaker 13: price maturation in terms of the technology that actually exists 485 00:26:33,840 --> 00:26:35,840 Speaker 13: in the space, there's a lot of work that needs 486 00:26:35,840 --> 00:26:38,119 Speaker 13: to happen for it to reach the level of a 487 00:26:38,119 --> 00:26:40,680 Speaker 13: New York Stock Exchange or CEME. And so we're really 488 00:26:40,720 --> 00:26:44,200 Speaker 13: looking forward to that level of progress in the industry. 489 00:26:44,320 --> 00:26:45,359 Speaker 4: Okay, what has to happen. 490 00:26:47,240 --> 00:26:49,240 Speaker 13: Yeah, it's a number of things, I would say, you know, 491 00:26:49,400 --> 00:26:51,840 Speaker 13: first off, it's a level of coordination, and so if 492 00:26:51,880 --> 00:26:55,639 Speaker 13: you think about you know, what happens in circuit breakers, 493 00:26:55,640 --> 00:26:57,520 Speaker 13: for example, when something happens in the market you don't 494 00:26:57,560 --> 00:27:01,080 Speaker 13: necessarily have, you know, an uncore native circuit breaker. You 495 00:27:01,160 --> 00:27:03,679 Speaker 13: have a number of different exchanges that are speaking to 496 00:27:03,720 --> 00:27:06,520 Speaker 13: one another. The second is also if you think about inventory, 497 00:27:06,760 --> 00:27:08,880 Speaker 13: and so there's never really an instance, for example, where 498 00:27:08,880 --> 00:27:12,000 Speaker 13: you can't move from one exchange to another, which you 499 00:27:12,080 --> 00:27:16,560 Speaker 13: see very often happen in crypto. When an exchange goes down, 500 00:27:17,080 --> 00:27:19,800 Speaker 13: then someone can't necessarily send funds into the exchange to 501 00:27:19,800 --> 00:27:21,600 Speaker 13: top up on margin calls, and so you see this 502 00:27:21,720 --> 00:27:24,800 Speaker 13: level of cascading liquidations, which is exactly what we saw. 503 00:27:25,040 --> 00:27:27,399 Speaker 13: Another thing that happens is, you know, even if you 504 00:27:27,440 --> 00:27:31,880 Speaker 13: think about margin calls or the standardized risk metrics typically 505 00:27:31,880 --> 00:27:35,240 Speaker 13: in traditional finance, that's completely standardized across all of these exchanges. 506 00:27:35,840 --> 00:27:39,800 Speaker 13: And today we think about institutional overseas exchanges as almost 507 00:27:39,840 --> 00:27:43,520 Speaker 13: isolated islands of risk. Each one has their own methodology, 508 00:27:43,560 --> 00:27:45,960 Speaker 13: and so when some of this happens in the market, 509 00:27:45,960 --> 00:27:48,080 Speaker 13: when you get this level of volatility, it's very very 510 00:27:48,080 --> 00:27:50,800 Speaker 13: hard to track, you know, across all of the different 511 00:27:50,880 --> 00:27:52,880 Speaker 13: venues that you're trading, and so you get this level 512 00:27:52,920 --> 00:27:55,199 Speaker 13: of liquidations. I mean, nineteen billion is a number we 513 00:27:55,240 --> 00:27:59,480 Speaker 13: haven't seen historically before. But again bigcoin performed quite well 514 00:27:59,520 --> 00:28:01,679 Speaker 13: relative to that, as did you know some of the 515 00:28:01,760 --> 00:28:06,840 Speaker 13: other ETFs you know x orpth Encelona. 516 00:28:07,160 --> 00:28:09,200 Speaker 3: Let's talk about those ETFs because you are definitely the 517 00:28:09,280 --> 00:28:12,240 Speaker 3: voice we want to hear about settlement about management of software. 518 00:28:12,280 --> 00:28:14,680 Speaker 3: You're thinking about the ways in which the underlying infrastructure 519 00:28:14,720 --> 00:28:16,840 Speaker 3: is going to support the growth here aire. But when 520 00:28:16,880 --> 00:28:19,399 Speaker 3: we think about regulation that could see the SEC. I 521 00:28:19,400 --> 00:28:21,720 Speaker 3: think it's got one hundred and thirty ETF applications on 522 00:28:21,760 --> 00:28:23,920 Speaker 3: its desk. If the government ever opens back up again, 523 00:28:24,160 --> 00:28:26,480 Speaker 3: they'll be able to start allowing them to go through. 524 00:28:27,119 --> 00:28:31,120 Speaker 3: There is a lot of particularly leveraged versions or very 525 00:28:31,600 --> 00:28:33,720 Speaker 3: indiosyncratic old coins. 526 00:28:34,080 --> 00:28:35,960 Speaker 4: Is that the way you want to see the industry progressed? 527 00:28:37,680 --> 00:28:39,440 Speaker 13: Look at the end of the day, I think access 528 00:28:39,520 --> 00:28:41,560 Speaker 13: is the most important, but I agree with you there's 529 00:28:41,680 --> 00:28:44,520 Speaker 13: there's definitely a point where there's just a tension deficiency, 530 00:28:44,560 --> 00:28:47,000 Speaker 13: and so you can't look at and underrate one hundred 531 00:28:47,040 --> 00:28:50,240 Speaker 13: of these different structures. And so the biggest thing when 532 00:28:50,280 --> 00:28:53,360 Speaker 13: I think about some of these structures and teams is 533 00:28:53,400 --> 00:28:56,320 Speaker 13: really who is in the management behind some of these 534 00:28:56,400 --> 00:28:58,960 Speaker 13: and what's the underlying risk in terms of the strategies. 535 00:28:59,000 --> 00:29:01,760 Speaker 13: You know you're seeing some of the digital asset treasuries 536 00:29:01,840 --> 00:29:04,040 Speaker 13: or ETFs. They might just be buying the underline, they 537 00:29:04,040 --> 00:29:06,120 Speaker 13: may just be staking. But to your point, care line, 538 00:29:06,120 --> 00:29:07,800 Speaker 13: you're seeing some of these others that are taking on 539 00:29:08,200 --> 00:29:11,840 Speaker 13: leveraged looping and other levels of risk, and you know, 540 00:29:11,880 --> 00:29:13,920 Speaker 13: you just want to make sure that you have some 541 00:29:14,160 --> 00:29:17,600 Speaker 13: level of understanding of the underlying structure. And so I 542 00:29:17,600 --> 00:29:19,760 Speaker 13: would say for some of these it is a little 543 00:29:19,760 --> 00:29:22,239 Speaker 13: bit gray. You know, we are pretty excited of this 544 00:29:22,360 --> 00:29:26,000 Speaker 13: level of access going into you know, whether it's Avalanche Athena, 545 00:29:26,080 --> 00:29:28,880 Speaker 13: you know, there's the access really opens it up to 546 00:29:29,040 --> 00:29:31,080 Speaker 13: a net new market where people are willing to pay 547 00:29:31,080 --> 00:29:33,440 Speaker 13: for that premium in order to get access. But you 548 00:29:33,480 --> 00:29:35,280 Speaker 13: are right, the underlying risk is not the same for 549 00:29:35,320 --> 00:29:35,680 Speaker 13: all of them. 550 00:29:36,840 --> 00:29:39,000 Speaker 2: All Right, it's been a while since we've had you 551 00:29:39,040 --> 00:29:40,920 Speaker 2: on the show and we've spoken. I just wanted to 552 00:29:40,920 --> 00:29:47,040 Speaker 2: get your reflection on this administration's legislative efforts across crypto 553 00:29:47,520 --> 00:29:49,800 Speaker 2: and the work that David Sachs has been doing and 554 00:29:49,840 --> 00:29:52,400 Speaker 2: how you feel it has or hasn't worked. 555 00:29:54,440 --> 00:29:57,240 Speaker 13: Without a doubt, it has been night and day relative 556 00:29:57,320 --> 00:30:00,280 Speaker 13: to you know, previous conversations that we've had we have 557 00:30:00,360 --> 00:30:03,240 Speaker 13: been able to hire in the United States across the 558 00:30:03,280 --> 00:30:06,040 Speaker 13: board and tell people that we work in crypto and 559 00:30:06,200 --> 00:30:08,400 Speaker 13: you know, historically, if you think about a year ago, 560 00:30:08,480 --> 00:30:11,160 Speaker 13: that was just not possible and we were thinking about, 561 00:30:11,360 --> 00:30:14,760 Speaker 13: you know, moving the company offshore, hiring overseas, and so 562 00:30:14,840 --> 00:30:17,560 Speaker 13: if you know, relative to conversations that we've had with 563 00:30:17,680 --> 00:30:20,920 Speaker 13: folks even in Asia, we're seeing a lot of focus 564 00:30:21,240 --> 00:30:23,880 Speaker 13: transition back to the United States. And that is just 565 00:30:24,000 --> 00:30:26,920 Speaker 13: incredibly compelling as someone who's building here in the US, 566 00:30:27,120 --> 00:30:29,760 Speaker 13: and we're really really excited about the communication and support 567 00:30:29,760 --> 00:30:31,120 Speaker 13: that we're getting from this administration. 568 00:30:32,040 --> 00:30:32,840 Speaker 4: Just very quick. 569 00:30:32,960 --> 00:30:36,880 Speaker 2: Do you support the dollarization thesis that David and others 570 00:30:36,880 --> 00:30:38,040 Speaker 2: are trying to put in place? 571 00:30:39,800 --> 00:30:42,200 Speaker 13: Yes, absolutely, And you're seeing a lot of that, you know, 572 00:30:42,360 --> 00:30:45,560 Speaker 13: happening with some of these stable coin legislation, where it 573 00:30:45,640 --> 00:30:48,080 Speaker 13: is going to strengthen the dollar by having a lot 574 00:30:48,080 --> 00:30:51,000 Speaker 13: of these global stable coins be back by the US 575 00:30:51,040 --> 00:30:53,880 Speaker 13: dollars the underlying and so you know, I do think it, 576 00:30:54,360 --> 00:30:56,960 Speaker 13: you know, leads to a stronger US dollar, but it 577 00:30:57,240 --> 00:30:59,880 Speaker 13: you know, it will see what the administration can do 578 00:31:00,120 --> 00:31:02,280 Speaker 13: within now in the next three years and whether they're 579 00:31:02,280 --> 00:31:03,920 Speaker 13: able to get everything over the finish. 580 00:31:03,760 --> 00:31:07,160 Speaker 2: Line, Hya Cantorovich of August. Great to have you back 581 00:31:07,160 --> 00:31:15,440 Speaker 2: on the show, Thank you very much. IBM and GROC 582 00:31:15,480 --> 00:31:19,400 Speaker 2: are announcing a strategic partnership to give clients ultra high speed, 583 00:31:19,560 --> 00:31:24,719 Speaker 2: low latency AI capabilities via Grock's inference technology. For more 584 00:31:24,760 --> 00:31:26,960 Speaker 2: and how this partnership is going to provide greater access 585 00:31:27,040 --> 00:31:30,000 Speaker 2: to the full potential of enterprise AI. We're joined by 586 00:31:30,080 --> 00:31:33,080 Speaker 2: Rob Thomas, Senior Vice president of Software and Chief Commercial 587 00:31:33,160 --> 00:31:37,000 Speaker 2: Officer at IBM, and Jonathan Ross, CEO and founder of GROC. 588 00:31:37,120 --> 00:31:38,920 Speaker 2: And Jonathan, I want to start with you. You know, the 589 00:31:38,960 --> 00:31:41,560 Speaker 2: way that I look at this is it's a very 590 00:31:41,640 --> 00:31:45,000 Speaker 2: interesting go to market channel for you, a sales channel. 591 00:31:45,080 --> 00:31:47,880 Speaker 2: Think about all of the clients that IBM has and 592 00:31:47,920 --> 00:31:50,960 Speaker 2: how you've tried to grow the company. Explain how people 593 00:31:51,000 --> 00:31:54,160 Speaker 2: will access LPUS through this or through the cloud matrix. 594 00:31:55,200 --> 00:31:58,640 Speaker 14: Absolutely, it's an extraordinary opportunity for both of us. IBM 595 00:31:58,760 --> 00:32:01,520 Speaker 14: is going to have their sellers sell a Rock Skew 596 00:32:02,000 --> 00:32:04,960 Speaker 14: and so now you'll be able to directly access our 597 00:32:05,080 --> 00:32:09,080 Speaker 14: speed the advantages that we offer. You could think of 598 00:32:09,080 --> 00:32:12,360 Speaker 14: it a little bit like offering broadband in the era 599 00:32:12,480 --> 00:32:14,840 Speaker 14: where dial up wasn't fully rolled out and people were 600 00:32:14,840 --> 00:32:17,360 Speaker 14: still trying to connect to the internet. Our lpus are 601 00:32:17,400 --> 00:32:20,840 Speaker 14: just significantly faster, but we also keep the cost down. 602 00:32:21,000 --> 00:32:24,400 Speaker 14: Just imagine if you were to offer broadband and you 603 00:32:24,520 --> 00:32:28,880 Speaker 14: charged more per bit of data that was sent over 604 00:32:28,880 --> 00:32:32,200 Speaker 14: the line, it would be on economical Broadband increases a demand. 605 00:32:32,880 --> 00:32:36,680 Speaker 14: With agentic use cases, it's particularly important to reduce the speed. 606 00:32:36,880 --> 00:32:38,920 Speaker 14: You don't want to ask a question, wait ten minutes 607 00:32:39,000 --> 00:32:41,640 Speaker 14: later and come back. You'd rather get the answer under 608 00:32:41,640 --> 00:32:43,320 Speaker 14: a minute. 609 00:32:43,760 --> 00:32:48,360 Speaker 2: Rob Under this arrangement with Jonathan, does IBM make any 610 00:32:48,360 --> 00:32:52,840 Speaker 2: sort of financial investment into GROC or is there some 611 00:32:52,920 --> 00:32:56,280 Speaker 2: kind of sales or revenue split? Explain the economics of 612 00:32:56,320 --> 00:32:57,600 Speaker 2: this deal for you guys. 613 00:32:57,920 --> 00:32:58,600 Speaker 4: Big pictures. 614 00:32:58,600 --> 00:33:01,880 Speaker 15: We have a lot of momentum in AI with Watson X, 615 00:33:02,040 --> 00:33:05,240 Speaker 15: as we said on our earnings last quarter seven and 616 00:33:05,240 --> 00:33:08,120 Speaker 15: a half billion dollars as a book of business, and 617 00:33:08,320 --> 00:33:11,520 Speaker 15: we're trying to solve the client problem of how do 618 00:33:11,720 --> 00:33:15,880 Speaker 15: they deploy AI faster. So this partnership is all about 619 00:33:15,880 --> 00:33:19,960 Speaker 15: what Jonathan said, which is five x performance at twenty 620 00:33:19,960 --> 00:33:22,720 Speaker 15: percent of the cost. We've seen it with Watson X 621 00:33:22,920 --> 00:33:26,520 Speaker 15: running on GROC and so we will be distributing GROC 622 00:33:26,600 --> 00:33:28,760 Speaker 15: as part of our go to market, and there's a 623 00:33:28,800 --> 00:33:32,400 Speaker 15: revenue share as part of that. We are really excited 624 00:33:32,440 --> 00:33:35,920 Speaker 15: because we've seen clients already getting an impact to how 625 00:33:35,920 --> 00:33:39,320 Speaker 15: they're deploying AI because of the integration of our technology together. 626 00:33:40,760 --> 00:33:42,280 Speaker 4: Let's talk about that, Rob a little bit more. 627 00:33:42,320 --> 00:33:44,520 Speaker 3: Because you're the man who's in charge of the software business, 628 00:33:44,520 --> 00:33:47,640 Speaker 3: you're also really responsible for the world revenue and profitability 629 00:33:47,720 --> 00:33:50,480 Speaker 3: of your company. So help us understand why grow was 630 00:33:50,480 --> 00:33:53,360 Speaker 3: the obvious choice. How is it helping your clients get 631 00:33:53,400 --> 00:33:54,120 Speaker 3: outs as faster? 632 00:33:54,240 --> 00:33:55,640 Speaker 4: On the inference side of things. 633 00:33:55,680 --> 00:34:00,280 Speaker 15: We looked at every possibility in the market, and the 634 00:34:00,360 --> 00:34:04,280 Speaker 15: clients are looking for significant performance, so some of that 635 00:34:04,400 --> 00:34:07,400 Speaker 15: changes how your call center operates or how your supply 636 00:34:07,560 --> 00:34:11,560 Speaker 15: chain runs. And then you combine that with a fraction 637 00:34:11,640 --> 00:34:15,120 Speaker 15: of the cost. Suddenly the economics make sense. AI does 638 00:34:15,160 --> 00:34:18,040 Speaker 15: have a cost problem, and we think this breaks through that. 639 00:34:18,480 --> 00:34:20,520 Speaker 15: And IBM we've said we're going to drive four and 640 00:34:20,560 --> 00:34:23,680 Speaker 15: a half billion of productivity by the end of this year. 641 00:34:24,000 --> 00:34:27,440 Speaker 15: That's another example of AI truly having an impact. And 642 00:34:27,480 --> 00:34:29,480 Speaker 15: the number one question I get from clients now is 643 00:34:29,680 --> 00:34:32,200 Speaker 15: how are you doing that? At IBM and can you 644 00:34:32,320 --> 00:34:34,960 Speaker 15: help us do that? And we think the combination of 645 00:34:35,040 --> 00:34:38,480 Speaker 15: IBM and GROC can make this a reality for any company. 646 00:34:39,920 --> 00:34:43,120 Speaker 3: Well, let's dig into that a little bit now with you, Jonathan. 647 00:34:43,160 --> 00:34:46,040 Speaker 3: Because the integration with what's the next orchestraate? What does 648 00:34:46,040 --> 00:34:48,520 Speaker 3: that look like on your side? How does that happen 649 00:34:48,560 --> 00:34:49,440 Speaker 3: and happen seamlessly? 650 00:34:50,719 --> 00:34:55,879 Speaker 14: So the wantsonex API is available for anyone to use today. 651 00:34:55,920 --> 00:34:59,400 Speaker 14: It'll be invisible to most users. It'll simply work. We 652 00:34:59,440 --> 00:35:02,080 Speaker 14: have a compatible by API and this is something we've 653 00:35:02,120 --> 00:35:05,400 Speaker 14: been working on. We will also work on some lower 654 00:35:05,480 --> 00:35:10,160 Speaker 14: level integrations with VLM, which is a technology that IBM 655 00:35:10,239 --> 00:35:13,719 Speaker 14: is very deeply involved in. But it should just be transparent. 656 00:35:13,760 --> 00:35:15,880 Speaker 14: You should just get more speed. Just imagine one day 657 00:35:15,920 --> 00:35:18,640 Speaker 14: you come home, you had dialog and now you have 658 00:35:18,680 --> 00:35:20,200 Speaker 14: broadband in a cost less. 659 00:35:22,200 --> 00:35:25,760 Speaker 2: Rob where's the demand coming from on your side, like IBM, 660 00:35:25,840 --> 00:35:29,239 Speaker 2: Granite or some other agentic workload that they want to 661 00:35:29,320 --> 00:35:32,720 Speaker 2: run using the GROC lpus. Are these public sector names? 662 00:35:32,760 --> 00:35:36,560 Speaker 2: Are they private sector SMEs? I'm trying to understand who 663 00:35:36,600 --> 00:35:37,520 Speaker 2: you're serving with it. 664 00:35:38,000 --> 00:35:41,120 Speaker 15: As often happens, I would say financial services have been 665 00:35:41,400 --> 00:35:44,279 Speaker 15: early adopters. But the thing that has changed in the 666 00:35:44,280 --> 00:35:47,360 Speaker 15: market in the last six months is everything is moving 667 00:35:47,480 --> 00:35:51,319 Speaker 15: to multimodel. We have IBM models that we open source, 668 00:35:51,360 --> 00:35:54,719 Speaker 15: which are the Granite models. We announced the partnership with Anthropic, 669 00:35:55,160 --> 00:35:57,920 Speaker 15: We have a partnership with Mistraw and Lama, just. 670 00:35:57,840 --> 00:35:58,720 Speaker 4: To name a few. 671 00:35:59,080 --> 00:36:01,920 Speaker 15: What is incredible about what Jonathan and team have built 672 00:36:02,360 --> 00:36:07,120 Speaker 15: is any model can run and get instant improvement running on. 673 00:36:07,080 --> 00:36:08,319 Speaker 4: The lpused from ROCK. 674 00:36:08,440 --> 00:36:10,879 Speaker 15: So I think this is a combination of a multimodel 675 00:36:10,920 --> 00:36:15,520 Speaker 15: world accelerating inference with ROCK. I think this is a 676 00:36:15,520 --> 00:36:16,280 Speaker 15: great combination. 677 00:36:18,080 --> 00:36:22,959 Speaker 2: Jonathan, does this capacitority exist or are you supply constraints still? 678 00:36:22,960 --> 00:36:24,840 Speaker 2: You've got to go out and build it either in 679 00:36:24,920 --> 00:36:27,080 Speaker 2: Saudi Finland here in the States. 680 00:36:28,280 --> 00:36:31,000 Speaker 14: So the entire world is supply constrained, and I would 681 00:36:31,040 --> 00:36:33,439 Speaker 14: actually expect that to continue for at least the next 682 00:36:33,480 --> 00:36:36,400 Speaker 14: five to ten years when it comes to AI. Our 683 00:36:36,480 --> 00:36:38,760 Speaker 14: advantage is that we have a supply chain that actually 684 00:36:38,880 --> 00:36:42,399 Speaker 14: ramps much faster, so customers will be able to come 685 00:36:42,440 --> 00:36:45,600 Speaker 14: to IBM put in an order and we will be 686 00:36:45,600 --> 00:36:48,520 Speaker 14: able to fulfill that faster than you would be able 687 00:36:48,520 --> 00:36:52,439 Speaker 14: to with other technologies. But the supply constraints that are real, 688 00:36:52,680 --> 00:36:55,320 Speaker 14: and this is another reason to start working with IBM. Sooner, 689 00:36:55,600 --> 00:36:58,080 Speaker 14: the sooner you get access to that capacity, the sooner 690 00:36:58,080 --> 00:36:59,600 Speaker 14: you're going to have it. I can't tell you how 691 00:36:59,600 --> 00:37:02,799 Speaker 14: many stars come to us and other companies come to 692 00:37:02,880 --> 00:37:06,080 Speaker 14: us and they are looking for capacity because some of 693 00:37:06,120 --> 00:37:08,800 Speaker 14: them are actually growing ten, twenty, or even thirty percent 694 00:37:08,920 --> 00:37:12,879 Speaker 14: per week or per month, which is an astronomical growth rate. 695 00:37:13,440 --> 00:37:17,360 Speaker 14: But by approaching us early, we can build to your needs. 696 00:37:19,120 --> 00:37:21,920 Speaker 3: You were just mentioning Rob about all the partnerships you 697 00:37:21,960 --> 00:37:25,120 Speaker 3: have when it comes to llms and the offerings that 698 00:37:25,160 --> 00:37:28,920 Speaker 3: you're intertwining within yours. Will you go to others to 699 00:37:29,120 --> 00:37:31,719 Speaker 3: ensure that inference is as fast as possible or is 700 00:37:31,760 --> 00:37:33,040 Speaker 3: it this exclusive with GROC. 701 00:37:33,719 --> 00:37:37,279 Speaker 15: We are open to working with anybody in the ecosystem 702 00:37:37,280 --> 00:37:40,719 Speaker 15: of AI around what we're doing specifically on the acceleration 703 00:37:40,840 --> 00:37:43,680 Speaker 15: with GROC. We want to lean into this partnership. That's 704 00:37:43,719 --> 00:37:46,840 Speaker 15: why this is the one that we've announced today, because 705 00:37:47,080 --> 00:37:51,400 Speaker 15: we have confidence working together with GROC. As Jonathan mentioned, 706 00:37:51,440 --> 00:37:54,000 Speaker 15: we're also enabling some of the lower level technologies and 707 00:37:54,040 --> 00:37:57,560 Speaker 15: open source like VLM, so this is the right place 708 00:37:57,600 --> 00:37:59,600 Speaker 15: to be when it comes to inference. But when you 709 00:37:59,600 --> 00:38:02,480 Speaker 15: think oddly about what's happened in AI, we have many 710 00:38:02,480 --> 00:38:06,040 Speaker 15: companies working with us on agents. Last week we announced 711 00:38:06,080 --> 00:38:09,760 Speaker 15: SMP Global is now running on watsnext Orchestrate as an example. 712 00:38:10,000 --> 00:38:11,640 Speaker 15: So we're always open to new partnerships. 713 00:38:13,080 --> 00:38:17,400 Speaker 3: And let's just talk about Jonathan the go to market strategy. 714 00:38:16,960 --> 00:38:19,560 Speaker 4: Here of teaming with the age. 715 00:38:19,239 --> 00:38:22,360 Speaker 3: Old Juggernau, that is IBM, that has so many deep 716 00:38:22,920 --> 00:38:27,480 Speaker 3: relationships across global enterprises. But is that how you're going 717 00:38:27,560 --> 00:38:29,520 Speaker 3: to work this going forward? It is teaming up with 718 00:38:29,600 --> 00:38:32,479 Speaker 3: companies that have those legacy relationships, or do you still 719 00:38:32,520 --> 00:38:34,080 Speaker 3: go out there and win the business yourself. 720 00:38:35,200 --> 00:38:36,719 Speaker 14: So I would say this is a peanut butter and 721 00:38:36,800 --> 00:38:40,399 Speaker 14: jelly sort of relationship in the sense that oftentimes when 722 00:38:40,440 --> 00:38:44,400 Speaker 14: we meet with sea level executives, those sea level executives 723 00:38:44,480 --> 00:38:48,160 Speaker 14: turn to their tech teams and ask them to evaluate GROC. 724 00:38:48,520 --> 00:38:51,719 Speaker 14: And I've been in meetings where the CTO did that 725 00:38:52,280 --> 00:38:55,040 Speaker 14: and the response from the person is I already use GROC. 726 00:38:56,040 --> 00:38:58,600 Speaker 14: It's my default for everything. So we already have the 727 00:38:58,600 --> 00:39:01,520 Speaker 14: bottoms up. We have two point three million developers already 728 00:39:01,520 --> 00:39:04,280 Speaker 14: building on us. For comparison, Opening Eye has four million 729 00:39:04,920 --> 00:39:08,799 Speaker 14: now going to those deep relationships from IBM and the 730 00:39:08,840 --> 00:39:11,600 Speaker 14: fact that IBM is a trusted partner who's been delivering 731 00:39:11,600 --> 00:39:14,799 Speaker 14: for decades. You put those two together and that's an 732 00:39:14,840 --> 00:39:16,239 Speaker 14: amazing go to market motion. 733 00:39:18,400 --> 00:39:20,880 Speaker 3: Well, it's been great having you both on to talk 734 00:39:20,920 --> 00:39:23,040 Speaker 3: about the go to market strategy. Jonathan Ross, CEO Grock, 735 00:39:23,080 --> 00:39:25,920 Speaker 3: of course, Rob Thomas of Senior Vice president of Software 736 00:39:26,000 --> 00:39:28,680 Speaker 3: over at IBM. We thank you both very much. Indeed, 737 00:39:29,160 --> 00:39:31,520 Speaker 3: now coming up, we're going to be diving into Amazon's 738 00:39:31,520 --> 00:39:36,040 Speaker 3: souring relationship with its contract delivery firms. And also we've 739 00:39:36,040 --> 00:39:38,680 Speaker 3: got to remind you what's happening in the moment. President 740 00:39:38,719 --> 00:39:42,440 Speaker 3: Trump planning critical minerals agreements with the Prime Minister of Australia. 741 00:39:42,719 --> 00:39:45,920 Speaker 4: Can catch more on Live Go. This is BLUEBGG Tech. 742 00:40:03,719 --> 00:40:07,000 Speaker 2: President Trump, speaking in a bylap with Australian leaders, says 743 00:40:07,000 --> 00:40:09,319 Speaker 2: that China may pay a one hundred and fifty five 744 00:40:09,320 --> 00:40:13,080 Speaker 2: percent tariff if there is no deal made by November one. 745 00:40:13,200 --> 00:40:15,960 Speaker 2: He's also saying that he is expecting to meet with 746 00:40:16,120 --> 00:40:18,239 Speaker 2: G in a couple of weeks. He will meet with 747 00:40:18,320 --> 00:40:22,120 Speaker 2: G in South Korea in a couple of weeks. The 748 00:40:22,160 --> 00:40:24,000 Speaker 2: headline's not doing much to move markets in the. 749 00:40:23,960 --> 00:40:27,640 Speaker 3: Moment, Cara, Oh, we're not, but we'll keep everyone abreast 750 00:40:27,680 --> 00:40:28,920 Speaker 3: of it, and they can tune in on a live 751 00:40:29,000 --> 00:40:31,200 Speaker 3: go as well if you want to see it throughout. 752 00:40:31,320 --> 00:40:34,040 Speaker 3: But right now, we're about to talk about how we're 753 00:40:34,080 --> 00:40:37,960 Speaker 3: taking a look inside Amazon's deteriorating relationship with its contract 754 00:40:38,080 --> 00:40:42,320 Speaker 3: delivery firms, which have tangled with Amazon for years, often 755 00:40:42,440 --> 00:40:46,520 Speaker 3: over what they consider unreasonable delivery target set and one 756 00:40:46,560 --> 00:40:49,080 Speaker 3: into twenty four to seven by AI now. Tensions flared 757 00:40:49,120 --> 00:40:51,879 Speaker 3: earlier this year when the company passed along some big 758 00:40:51,880 --> 00:40:55,240 Speaker 3: bills to repair aging delivery vans worgs. Amazon reporter Spencer 759 00:40:55,280 --> 00:40:58,040 Speaker 3: Soper took this deep dive for us, and you really 760 00:40:58,080 --> 00:41:02,680 Speaker 3: hone in on certain individuals who decided to become entrepreneurial 761 00:41:02,719 --> 00:41:05,880 Speaker 3: in spirit teaming with Amazon, and then the profits just 762 00:41:06,000 --> 00:41:06,520 Speaker 3: fell away. 763 00:41:06,640 --> 00:41:07,279 Speaker 4: Talk us through it. 764 00:41:09,040 --> 00:41:12,120 Speaker 16: Yes, So Amazon has what they call delivery service partners. 765 00:41:12,120 --> 00:41:14,279 Speaker 16: They've got forty five hundred of them globally. These are 766 00:41:14,320 --> 00:41:18,080 Speaker 16: basically small businesses that lease vans, hire drivers and get 767 00:41:18,080 --> 00:41:22,040 Speaker 16: those packages to your doorstep. And so it's almost like 768 00:41:22,080 --> 00:41:25,200 Speaker 16: a franchise, but it's technically not a franchise. And so 769 00:41:25,440 --> 00:41:27,200 Speaker 16: a lot of them are saying Hey, listen, the cost 770 00:41:27,239 --> 00:41:29,480 Speaker 16: of art of doing business are going up faster than 771 00:41:29,520 --> 00:41:33,640 Speaker 16: Amazon is paying us for these packages. They're in these 772 00:41:33,719 --> 00:41:37,760 Speaker 16: lapsided agreements, they don't have any negotiating power. They basically 773 00:41:37,800 --> 00:41:41,480 Speaker 16: have to take what Amazon offers them. And then so 774 00:41:41,680 --> 00:41:44,160 Speaker 16: some of them are taking the ultimate step of quitting. 775 00:41:44,560 --> 00:41:46,239 Speaker 16: And when they do that, they realize, hey, I've been 776 00:41:46,280 --> 00:41:47,680 Speaker 16: doing the seven years that I don't really. 777 00:41:47,600 --> 00:41:49,560 Speaker 6: Have anything, Spencer. 778 00:41:49,760 --> 00:41:54,239 Speaker 2: Amazon did recently hike the proportion that these guys get 779 00:41:54,320 --> 00:41:57,600 Speaker 2: on a per package basis. But on your reporting, what's 780 00:41:57,640 --> 00:41:59,520 Speaker 2: the direction of travel here? Where are we headed? 781 00:42:01,440 --> 00:42:01,600 Speaker 6: Well? 782 00:42:01,640 --> 00:42:04,879 Speaker 16: The direction of travel is that logistics is a high 783 00:42:04,960 --> 00:42:07,520 Speaker 16: risk business. If you have a bunch of car collisions 784 00:42:07,640 --> 00:42:09,560 Speaker 16: or dog bites or anything that's going to push up 785 00:42:09,600 --> 00:42:13,680 Speaker 16: your vehicle insurance rates or your workers' compensation rates, you're 786 00:42:13,719 --> 00:42:16,360 Speaker 16: going to have a difficult time. And if you don't, 787 00:42:16,520 --> 00:42:19,160 Speaker 16: you will, you will make money. And so some of 788 00:42:19,200 --> 00:42:21,520 Speaker 16: that is going to be your operational practices, and some 789 00:42:21,560 --> 00:42:22,440 Speaker 16: of that's going to be. 790 00:42:22,480 --> 00:42:27,759 Speaker 2: Luck Bloomberg, Spenser Sopa, thank you very much. Just real 791 00:42:27,880 --> 00:42:30,879 Speaker 2: quick caring update on AWS. They're saying that the root 792 00:42:30,960 --> 00:42:34,960 Speaker 2: cause overnight was an internal subsystem, but they're not saying 793 00:42:34,960 --> 00:42:38,520 Speaker 2: any more than that, other than there are issues still remaining. 794 00:42:39,040 --> 00:42:41,680 Speaker 2: That does it for this edition of Bloomberg Tech and 795 00:42:41,719 --> 00:42:42,680 Speaker 2: what an addition it was. 796 00:42:43,960 --> 00:42:45,399 Speaker 4: And so much more to come. 797 00:42:45,520 --> 00:42:47,840 Speaker 3: And I'm sat here in London because it's the Bloomberg 798 00:42:47,840 --> 00:42:50,360 Speaker 3: Tech Summit. It's kicking off tonight. In fact, I'm hosting 799 00:42:50,360 --> 00:42:53,600 Speaker 3: a debate on Europe's future in the Chip Wars. But 800 00:42:53,640 --> 00:42:55,960 Speaker 3: then tomorrow we're going to be tuning into the summit 801 00:42:56,000 --> 00:42:59,720 Speaker 3: as it goes live over in Moregate, conversations with leaders 802 00:42:59,760 --> 00:43:02,440 Speaker 3: in te kN Ai in VC. You don't want to 803 00:43:02,440 --> 00:43:04,680 Speaker 3: forget to check out all of that. Also on the podcast. 804 00:43:04,760 --> 00:43:06,160 Speaker 3: You can find it on the terminal as well as 805 00:43:06,160 --> 00:43:10,600 Speaker 3: online on Apple, Spotify and iHeart from San Francisco from London. 806 00:43:10,960 --> 00:43:13,239 Speaker 3: From the next day or two, this is Bloomberg Tech