WEBVTT - TSMC Reports Earnings and Google Fires 28 Employees 0:00:02.920 --> 0:00:12.200 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.920 --> 0:00:15.200 From Marhard where Innovation, money and power Collie in Silicon Valley, NBN. 0:00:15.560 --> 0:00:19.599 This is Bloomberg Technology with Caroline Hyde and Ed Love Love. 0:00:33.280 --> 0:00:35.680 I'm Caroline Heind of blomgg's world headquarters in New York. 0:00:36.080 --> 0:00:39.400 Now I'm Ed Lodlow in San Francisco. This is Bloomberg Technology. 0:00:39.479 --> 0:00:42.600 Coming up, we'll break down to t SMC's first quarter 0:00:42.640 --> 0:00:45.199 earning support. This is the company scales up profit, but 0:00:45.240 --> 0:00:47.920 scales back. It's outlook for a chip market expansion. 0:00:48.520 --> 0:00:51.800 Plus, Google fires twenty eight employees after they were involved 0:00:51.800 --> 0:00:55.760 in protests against Project Nimbus to provide Israel's government and 0:00:55.800 --> 0:00:59.280 military with AI and cloud services. Will bring you the details. 0:00:59.080 --> 0:01:02.360 And Cisco's plan for keeping AI systems safe from attack 0:01:02.880 --> 0:01:06.560 artificial intelligence itself. Of course, we'll discuss the company's new 0:01:06.600 --> 0:01:09.319 safeguarding approach and so much more throughout this app. At first, 0:01:09.800 --> 0:01:12.000 and we check in on these markets and actually a 0:01:12.040 --> 0:01:14.440 little bit of optic in the NASZAC in some of 0:01:14.440 --> 0:01:17.360 those technology stocks to say we're up about five tens 0:01:17.400 --> 0:01:17.880 per percent. 0:01:18.160 --> 0:01:20.200 Now elsewhere, we've sort of been trending water. 0:01:20.280 --> 0:01:22.720 We'd been digesting what has been quite a harsh sell 0:01:22.720 --> 0:01:25.000 off throughout the week in stocks and indeed in bonds 0:01:25.040 --> 0:01:27.679 as we really start to digest just two cuts for 0:01:27.720 --> 0:01:29.360 the rest of the year, if that coming from the 0:01:29.400 --> 0:01:32.279 Federal Reserve tenure yields still up again four basis points 0:01:32.319 --> 0:01:34.679 four point six three is kort of where we currently 0:01:34.760 --> 0:01:37.200 are standing. We lost some of our technology. We'll get 0:01:37.200 --> 0:01:39.200 it back in a minute. We're currently seeing the vics 0:01:39.280 --> 0:01:41.720 on the downside, though, so some of that volatility that 0:01:41.760 --> 0:01:44.240 we've seen in the fear index in that gauge just 0:01:44.319 --> 0:01:47.440 dampening down. We're down just about seventeen level. Remember we 0:01:47.480 --> 0:01:50.040 spike to nineteen on the back of geopolitical risks at 0:01:50.040 --> 0:01:50.840 the beginning of this week. 0:01:50.960 --> 0:01:52.400 Move on, have a little look at what's happening in 0:01:52.440 --> 0:01:52.760 the world of. 0:01:52.720 --> 0:01:55.240 Crypto, because we had been, in fact seeing a bit 0:01:55.280 --> 0:01:57.280 of a rebound. We're up almost five percent on the day, 0:01:57.280 --> 0:01:59.120 but look we're still languishing out about a sixty three 0:01:59.200 --> 0:02:01.560 sixty four thousand dollar level. We dig into crypto a 0:02:01.600 --> 0:02:03.240 little bit more in a moment, and what are you 0:02:03.240 --> 0:02:04.160 watching on the micro. 0:02:04.840 --> 0:02:07.360 Well, we are going to look at alphabet pairent of Google. 0:02:07.440 --> 0:02:09.800 The shares a higher half percent they have been down 0:02:09.840 --> 0:02:12.919 earlier in the session. Very shortly in the program, we're 0:02:12.919 --> 0:02:14.880 going to go to our reporter davely Album and find 0:02:14.880 --> 0:02:18.040 out about these jobs that were cut or the firing 0:02:18.080 --> 0:02:20.799 as a result from the protests. Very well read Bloomberg, 0:02:20.919 --> 0:02:23.600 Terminal and online. A lot of interest in that story. 0:02:24.080 --> 0:02:27.840 The chip sector is the main focus of readers again 0:02:28.280 --> 0:02:32.240 this Thursday. Let's start with TSMC. It's now down on 0:02:32.280 --> 0:02:34.800 the ADR's three point eight percent have been much lower, 0:02:35.360 --> 0:02:38.560 giving us a maintenance of that capex guidance. Very strong 0:02:38.600 --> 0:02:42.079 in AI, weakness in smartphones. Remember this is the world's 0:02:42.080 --> 0:02:46.600 biggest contract manufacturer of semiconductors. And then a Bloomberg exclusive, 0:02:46.680 --> 0:02:49.920 Micron is softer half a percent. Bloomberg reporting that it's 0:02:49.960 --> 0:02:52.120 going to get about six point one billion dollars in 0:02:52.280 --> 0:02:56.720 grants from the US government as part of the Chips Act. 0:02:56.880 --> 0:02:59.280 Grants only, but there's a loan component as well, and 0:02:59.320 --> 0:03:01.600 it could come as soon next week. There's a lot 0:03:01.639 --> 0:03:04.600 to discuss, and for that we go to Bloomberg's Ian King, 0:03:04.639 --> 0:03:08.120 who leads our semiconductor coverage. Let's start with TSMC. The 0:03:08.160 --> 0:03:11.960 world pays attention at the moment when TSMC gives US numbers. 0:03:12.360 --> 0:03:16.080 We learned that AI is strong, high performance computer is strong, 0:03:16.480 --> 0:03:19.600 potentially smartphone is weak. What was your takeaway? 0:03:20.240 --> 0:03:23.280 Yeah, I know, that's absolutely right. They've confirmed basically the 0:03:23.680 --> 0:03:27.840 fears and hopes of everybody who's watching semiconductors right now. 0:03:28.240 --> 0:03:31.280 Smartphones were down steeply, and people will be concerned that 0:03:31.360 --> 0:03:34.920 that to read on Apple and what's happening to the iPhone, 0:03:34.960 --> 0:03:38.520 particularly in China. On the flip side of that, HPC 0:03:38.720 --> 0:03:42.400 high performance computing, which is obviously in video, AMD and 0:03:42.440 --> 0:03:46.400 all of the very large, very expensive chips were strongly. 0:03:46.880 --> 0:03:49.280 Pair that then with the news that we had with 0:03:49.400 --> 0:03:52.760 ASML yesterday and the fact that chip equipment perhaps isn't 0:03:52.800 --> 0:03:53.480 so in demand. 0:03:53.680 --> 0:03:56.000 What ISSMC really trying to signal here? 0:03:57.120 --> 0:03:59.320 What they're trying to signal really is you know that, 0:04:00.040 --> 0:04:02.160 as usual, they have the best read on what's going on, 0:04:02.240 --> 0:04:05.680 and they're really confirming what's going on in terms of 0:04:05.920 --> 0:04:08.920 these end market forces. We've been waiting for the smartphone 0:04:08.920 --> 0:04:10.920 market to come back for a long time. It is 0:04:10.960 --> 0:04:14.480 coming back in China, but unfortunately it's coming back for 0:04:14.600 --> 0:04:18.480 chips that are probably being made outside the Western ecosystem. 0:04:18.560 --> 0:04:22.000 So that's a concern there for the geopolitics, ASML is 0:04:22.000 --> 0:04:24.080 a longer term read on the confidence of a small 0:04:24.120 --> 0:04:27.160 group of companies, doesn't have as much of an indication 0:04:27.200 --> 0:04:29.200 on what's happening in the short term. 0:04:30.080 --> 0:04:33.440 Let's talk about Micron and Bloomberg's reporting that it will 0:04:33.440 --> 0:04:37.520 get six point one billion grant allocation from the Chips 0:04:37.560 --> 0:04:41.719 Act to build capacity in the United States. There's a 0:04:41.720 --> 0:04:44.560 loans component as well. The sources are telling us this 0:04:44.640 --> 0:04:46.880 we get announced next week. What do we know about 0:04:46.920 --> 0:04:48.560 the package Micron's been awarded. 0:04:49.360 --> 0:04:52.840 Yeah, I mean, as ever, the companies want more, They 0:04:52.839 --> 0:04:55.200 want as much as they can probably get. This is 0:04:55.240 --> 0:04:59.880 being seen as roughly what commensurate with sort of microns 0:05:00.240 --> 0:05:03.080 role in the value chain here. Remember they make memory chips. 0:05:03.440 --> 0:05:07.039 That production, as with advanced logic, has been moving to 0:05:07.160 --> 0:05:11.400 East Asia for the last few decades. This is the 0:05:11.400 --> 0:05:14.520 Biden administration saying, hey, we haven't forgotten about memory. That's 0:05:14.560 --> 0:05:16.680 important to You need that in your phone, you need 0:05:16.720 --> 0:05:19.560 that in your data center. So they're enabling Micron to 0:05:19.640 --> 0:05:22.680 at least bring some production back to this country. 0:05:23.440 --> 0:05:25.640 And we've heard time and time again from the CEO 0:05:25.960 --> 0:05:28.560 Motor really talking about you need to make it worth 0:05:28.600 --> 0:05:33.039 my while though I could be building manufacturing abroad for 0:05:33.120 --> 0:05:35.200 much cheaper, where in the US is he going to 0:05:35.200 --> 0:05:37.479 be putting it? And really does it make economic sense? 0:05:38.560 --> 0:05:41.720 It makes economic sense if you get the government subsidies. 0:05:42.440 --> 0:05:45.080 What Sanjay has said all along, as you pointed out, 0:05:45.160 --> 0:05:47.080 and a lot of his colleagues have said the same thing. 0:05:47.480 --> 0:05:49.880 The government here needs to do the bare minimum, which 0:05:49.920 --> 0:05:53.120 is to close that gap in terms of what it 0:05:53.200 --> 0:05:57.160 costs between the US and places like Singapore, South Korea, 0:05:57.279 --> 0:06:00.440 Taiwan where those facilities are currently being made with a 0:06:00.440 --> 0:06:03.200 lot of government support, with tax regimes, with all of 0:06:03.240 --> 0:06:07.000 these things which helped large capital projects like that. He's 0:06:07.040 --> 0:06:08.960 looking at upstate New York, and he's looking at the 0:06:08.960 --> 0:06:11.760 home base of Micron, which is in Boise, Idaho. 0:06:12.800 --> 0:06:16.880 Bloomberg Ian king always on for us. We so appreciate 0:06:16.880 --> 0:06:19.080 the analysis when it comes thick and fast across the 0:06:19.080 --> 0:06:19.680 trip sector. 0:06:19.920 --> 0:06:20.320 Meanway. 0:06:20.480 --> 0:06:22.000 Meanwhile, let's get to Huawei. 0:06:22.040 --> 0:06:25.720 Let's release its latest series of smartphones today, sustaining its 0:06:25.800 --> 0:06:28.960 momentum after that breakthrough Mate sixty, Remember that device that 0:06:29.000 --> 0:06:31.240 helped erode Apple's dominance over in China. 0:06:31.400 --> 0:06:32.599 In that high end segment. 0:06:32.880 --> 0:06:36.919 Now the poorer seventy smartphone series starts at seven hundred 0:06:36.960 --> 0:06:39.920 and sixty dollars, then goes up from them, matching in fact, 0:06:39.960 --> 0:06:41.840 the price point of an iPhone fifteen n. 0:06:43.520 --> 0:06:46.520 All right. Coming up on the program, Google fires employees 0:06:46.640 --> 0:06:50.640 staging protests from California to New York over a contract 0:06:51.040 --> 0:06:53.760 with Israel. We can have that report next. A quick 0:06:53.839 --> 0:06:57.320 check on Trump Media and Technology shares hire fourteen percent 0:06:57.360 --> 0:07:00.000 in the session, adding to the gains of yesterday. Class 0:07:00.120 --> 0:07:03.080 expect trading. There's a lock up until September. A lot 0:07:03.080 --> 0:07:06.160 of activity in warrants market. This is the Spack one 0:07:06.160 --> 0:07:08.520 oh one. We're seeing a big deer, now a big rebound. 0:07:08.600 --> 0:07:26.400 This is Bloomberg technology. Time for Talking tech. And in 0:07:26.440 --> 0:07:31.720 the news, Elon Musk is apologizing for incorrectly low severance packages. 0:07:31.760 --> 0:07:35.400 The Testa CEO made the rare apology via email and 0:07:35.440 --> 0:07:38.840 said it has come to his attention that some severance 0:07:39.080 --> 0:07:43.080 packages were incorrectly low and it will be corrected immediately. 0:07:43.120 --> 0:07:46.120 The news comes after Tesla slashed global headcomt by more 0:07:46.160 --> 0:07:49.280 than ten percent as the ev baker struggles with slowing 0:07:49.360 --> 0:07:53.160 demand for electric vehicles. Plus, Apple CEO Tim Cook is 0:07:53.200 --> 0:07:56.360 meeting Singapore's incoming Prime Minister at the tail end of 0:07:56.400 --> 0:07:59.840 his most extensive Southeast Asia tour in years. There's the 0:08:00.000 --> 0:08:04.120 company searches for new growth markets and manufacturing locations to 0:08:04.200 --> 0:08:07.440 offset headwinds in China. The trip could pave the way 0:08:07.520 --> 0:08:11.280 for a more aggressive sales campaign in a densely populated 0:08:11.320 --> 0:08:14.880 region where Android phones from Samsung, Chaomi and the Oppo 0:08:15.320 --> 0:08:19.200 dominate the market. And Delivery said orders return to growth 0:08:19.240 --> 0:08:22.040 with a two percent increase in the first quarter, driven 0:08:22.080 --> 0:08:26.480 by strong progress in the food delivery company's international segment. 0:08:26.760 --> 0:08:29.240 Users place seventy three point five million orders in the 0:08:29.280 --> 0:08:32.200 first quarter. The London based company kept its guidance for 0:08:32.240 --> 0:08:33.800 the year unchanged. 0:08:33.920 --> 0:08:34.079 Carro. 0:08:34.920 --> 0:08:37.440 Now, there's another story that we're currently following ed and 0:08:37.480 --> 0:08:41.080 Google has fired twenty eight employees after they were involved 0:08:41.120 --> 0:08:43.920 in protests against a one point two billion dollar joint 0:08:43.960 --> 0:08:47.240 contract with Amazon to provide the Israeli government and military 0:08:47.720 --> 0:08:49.199 AI and cloud services. 0:08:49.520 --> 0:08:49.720 Now. 0:08:49.720 --> 0:08:52.959 The protests took place across Google offices in New York 0:08:52.960 --> 0:08:55.640 and Seattle and California, and were led by the No 0:08:55.880 --> 0:09:01.319 Tech for Apartheid organization. Google said physically in other employees 0:09:01.400 --> 0:09:04.720 work and preventing them from accessing our facilities is a 0:09:04.760 --> 0:09:09.280 clear violation of our policies and completely unacceptable behavior. Joining 0:09:09.320 --> 0:09:11.960 us nay now A please to welcome Davey Albert, who 0:09:11.960 --> 0:09:15.600 has helped report on this very sensitive story ultimately daily. 0:09:16.000 --> 0:09:18.559 And the protests came a day before an all important 0:09:18.600 --> 0:09:21.600 Israeli government approval right for a five year strategic plan 0:09:21.720 --> 0:09:24.800 to transition to cloud. It's called Project Nimbus, and this 0:09:24.920 --> 0:09:26.760 was sensitive for certain employees. 0:09:27.880 --> 0:09:32.439 Yeah, absolutely, I mean especially in the in the midst 0:09:32.600 --> 0:09:35.719 of the war between. 0:09:35.440 --> 0:09:36.720 Israel and Gaza. 0:09:37.880 --> 0:09:41.760 Employees have really been activated about this issue and have 0:09:41.920 --> 0:09:46.079 been organizing to try to protest the way that their 0:09:46.120 --> 0:09:50.280 work contributes to tools that would then serve the Israeli government, 0:09:51.200 --> 0:09:55.280 which again is engaged in war. And so they say 0:09:55.360 --> 0:09:59.760 that they have a right to you know, ban to 0:09:59.800 --> 0:10:03.959 get and object to this use of their work, and 0:10:04.679 --> 0:10:10.760 that US labor law actually protects them from sort of 0:10:11.559 --> 0:10:14.920 consequences from the company, discipline from the company, because they 0:10:15.000 --> 0:10:18.440 believe they are within the rights to come together over 0:10:18.520 --> 0:10:20.000 this issue. 0:10:20.720 --> 0:10:25.000 Davey, in your story, you present a very clear chronology 0:10:25.240 --> 0:10:28.560 of what happened and the perspective of both sides of 0:10:28.679 --> 0:10:31.760 the situation. When I put on social media you were 0:10:31.760 --> 0:10:33.760 coming on the show. One of the questions I got 0:10:33.760 --> 0:10:36.320 most commonly was could you tell us a bit more 0:10:36.360 --> 0:10:39.520 about the roles of those that were fired, what we 0:10:39.600 --> 0:10:42.400 know about those specifically, because it was quite a broad 0:10:42.480 --> 0:10:45.760 protest and we're saying less than fewer than thirty people 0:10:45.840 --> 0:10:46.920 actually lost their jobs. 0:10:48.200 --> 0:10:48.560 Yeah. 0:10:48.640 --> 0:10:52.360 So from the workers we spoke to, several of them 0:10:52.400 --> 0:10:56.440 were software engineers, some of them worked on cloud, and 0:10:56.679 --> 0:11:00.920 there were even some employees who were involved in speaking 0:11:00.920 --> 0:11:04.720 out against Project Nimbus who work for DeepMind, which is 0:11:04.760 --> 0:11:10.280 Google's AI lab. You know, these these workers tend to 0:11:10.400 --> 0:11:16.640 not have specific visibility into exactly what Israel is doing 0:11:16.640 --> 0:11:20.320 with their technology because these contracts are so siloed and 0:11:20.360 --> 0:11:25.079 workers don't you know, directly work on on the tools 0:11:25.120 --> 0:11:28.160 that the Israeli government might use, but they build the 0:11:28.200 --> 0:11:32.560 tools that the Israeli government can then use for any purpose. 0:11:33.600 --> 0:11:37.400 There's been prior reporting that, you know, the cloud services 0:11:37.440 --> 0:11:41.800 that the Israeli government uses is on their own instance, 0:11:41.960 --> 0:11:46.679 private instance of Google Cloud, and so from that perspective, 0:11:47.160 --> 0:11:51.920 you know, employees can't see inside of that cloud that's 0:11:52.320 --> 0:11:57.240 on Israeli soil and being used by Israeli government. But 0:11:57.840 --> 0:12:04.200 these employees have in obviously following the news and believe 0:12:04.240 --> 0:12:09.040 that their work may be not so in a straight 0:12:09.160 --> 0:12:15.880 direct line, but still does contribute significantly to the way 0:12:16.240 --> 0:12:20.240 that the technology that Israel is now using and deploying 0:12:20.400 --> 0:12:22.199 in the war with Gaza. 0:12:22.920 --> 0:12:25.360 When you say Gaza actually not quite right, the war 0:12:25.400 --> 0:12:29.880 between Israel and Hamas. Of course, Hamas deemed of course 0:12:29.960 --> 0:12:33.079 a an issue a terrorist organization by the EU and 0:12:33.160 --> 0:12:37.560 the United States. Davey, I'm really interested in perhaps is 0:12:37.600 --> 0:12:40.080 this a tone shift in any way coming from the 0:12:40.160 --> 0:12:43.839 very leadership of Alphabet and indeed Google. I mean, so Nopitchai, 0:12:44.120 --> 0:12:45.920 how much has he had to weigh in here and 0:12:45.960 --> 0:12:47.240 decide what the outcome is. 0:12:48.760 --> 0:12:53.920 Yeah, it absolutely is a shift in tone. For so long, really, 0:12:53.960 --> 0:12:57.320 the founding culture of Google has been, you know, to 0:12:57.440 --> 0:13:04.359 foster this sense of open debate and employees are encouraged 0:13:04.400 --> 0:13:07.280 to speak out about anything really having to do with 0:13:07.360 --> 0:13:11.000 their work. Those were in the early days, but then 0:13:11.080 --> 0:13:15.319 over the years employees have really started to ban together 0:13:15.640 --> 0:13:21.120 over important social issues. You know, in twenty eighteen or so, 0:13:21.600 --> 0:13:28.800 there was organizing around sexual harassment allegations from leadership at 0:13:28.800 --> 0:13:33.280 the company and sort of the way that they wanted 0:13:34.200 --> 0:13:37.040 women to be able to speak out about their experiences, 0:13:37.120 --> 0:13:42.880 so there was a walkout from employees around that issue, 0:13:43.320 --> 0:13:47.080 and other issues have also galvanized these employees, you know, 0:13:47.120 --> 0:13:51.840 in twenty twenty, with the killing of George Floyd and 0:13:52.080 --> 0:13:55.720 organizing around the Black Lives Matter protests, that was another issue. 0:13:55.720 --> 0:14:00.559 But this really has emerged as a particularly sensitive point 0:14:00.760 --> 0:14:05.600 for Google, this particular issue with Israel, and the company 0:14:05.640 --> 0:14:09.200 appears to be sending a message that they aren't going 0:14:09.240 --> 0:14:13.880 to tolerate this kind of workplace activism anymore. 0:14:15.240 --> 0:14:18.520 Davey, you talked about how that the workforce has been galvanized. 0:14:18.559 --> 0:14:21.200 You note in the final paragraph of your report that 0:14:21.280 --> 0:14:25.040 despite the response from Google, many employees feel that they're 0:14:25.080 --> 0:14:31.520 getting support. Is that happening contemporary eraneously and is there 0:14:31.560 --> 0:14:34.800 any sense that these strikes or sit ins will continue 0:14:35.160 --> 0:14:38.160 or if this is the end of it now? It's 0:14:38.160 --> 0:14:38.800 hard to say. 0:14:39.280 --> 0:14:43.280 Google sent a very strongly worded message to all employees, 0:14:44.000 --> 0:14:48.000 essentially saying this is not this is not something they 0:14:48.000 --> 0:14:52.680 will tolerate, that it is against company policy. At the 0:14:52.680 --> 0:14:55.640 same time, you know, we've heard from employees who have 0:14:55.720 --> 0:14:59.880 been keeping an eye on the internal messaging that's been 0:15:00.040 --> 0:15:03.840 happening at the company, and several people are actually quite 0:15:03.960 --> 0:15:09.080 upset by this move from the company, and maybe it'll 0:15:09.080 --> 0:15:11.960 take a while for them to do another action, but 0:15:12.120 --> 0:15:14.640 it's not out of the realm of possibility. 0:15:15.200 --> 0:15:18.080 This could continue on for many more months. 0:15:18.960 --> 0:15:21.840 We showed Google's full response and communication at the top 0:15:21.840 --> 0:15:23.520 of the segment, and you can go and read Davey 0:15:23.560 --> 0:15:26.040 and Julia's story and see it in Writing for Yourself 0:15:26.080 --> 0:15:37.160 on bloomberg dot com. Bloomberg's Davy outur thank you harnessing 0:15:37.200 --> 0:15:41.440 the power of AI to keep AI software safe from attack. 0:15:42.000 --> 0:15:45.360 That's the promise of Cisco's latest product, Hypershield. I want 0:15:45.360 --> 0:15:48.400 to go straight to Cisco's exiti Vice president and general 0:15:48.440 --> 0:15:52.520 manager of Security and Collaboration G two Patel. This is 0:15:52.560 --> 0:15:55.640 classic Cisco, right. You want to do more on services 0:15:55.640 --> 0:15:59.920 and software, but just explain the technology you're going to use. 0:16:00.120 --> 0:16:05.360 AI is the defense tool against an attack on AI infrastructure. 0:16:06.720 --> 0:16:10.000 Well, security is actually one of the most pressing issues 0:16:10.040 --> 0:16:13.000 of our time, and AI is actually being weaponized quite 0:16:13.000 --> 0:16:15.920 a bit by malicious actors, so it only makes sense 0:16:15.960 --> 0:16:19.280 for us to also use AI effectively to provide machine 0:16:19.280 --> 0:16:21.720 scale defenses to organizations. 0:16:21.720 --> 0:16:23.240 So we launched what I. 0:16:23.240 --> 0:16:27.960 Would call probably one of the most consequential innovations in 0:16:28.000 --> 0:16:30.880 the history of Cisco in the area of cybersecurity in 0:16:30.920 --> 0:16:34.840 the past forty years, and it's called Cisco Hypershield. And 0:16:35.760 --> 0:16:39.080 our goal over there is to fundamentally re imagine security 0:16:39.520 --> 0:16:44.240 for this AI world web at AI scale, because it's 0:16:44.320 --> 0:16:46.160 very hard to go out and handle these threats at 0:16:46.200 --> 0:16:47.520 human scale GJU. 0:16:47.560 --> 0:16:49.800 It's been interesting because time and time again people have 0:16:49.840 --> 0:16:53.560 come on saying, look, with AI as the aggressor, we 0:16:53.600 --> 0:16:56.440 can also use AI as the protector. You really talk 0:16:56.440 --> 0:16:59.200 about this being a radically new approach. How is it radical? 0:16:59.240 --> 0:17:00.960 How is it that new from what's already. 0:17:00.680 --> 0:17:01.280 On the market. 0:17:02.320 --> 0:17:04.720 Yeah, I think it's important because you need to make 0:17:04.720 --> 0:17:06.800 sure that there's a certain set of building blocks that 0:17:06.840 --> 0:17:09.840 are built on top of which you can build these solutions. 0:17:09.840 --> 0:17:14.600 And we now have some very advanced technologies around hardware acceleration, 0:17:14.760 --> 0:17:17.200 around AI that can allow us to build these very 0:17:17.200 --> 0:17:18.800 sophisticated capabilities. 0:17:18.840 --> 0:17:19.680 There's many examples. 0:17:19.720 --> 0:17:22.400 I'll give you one particular one the amount of time 0:17:22.440 --> 0:17:25.520 that it takes from when a vulnerability is announced in 0:17:25.520 --> 0:17:29.480 the market, two when an exploit happens by malicious actors 0:17:29.520 --> 0:17:31.640 is now down to single digit days, and I think 0:17:31.680 --> 0:17:34.800 I wouldn't be surprised if it goes down to hours 0:17:34.920 --> 0:17:38.560 or minutes in the next few in the near future. 0:17:38.960 --> 0:17:42.159 And so what we've done is we've actually seen that 0:17:42.200 --> 0:17:45.120 the amount of time it takes to patch that infrastructure 0:17:45.840 --> 0:17:48.119 is actually still twenty two to forty five days. 0:17:48.480 --> 0:17:50.040 So you've got this massive. 0:17:49.680 --> 0:17:52.919 Gap from when an exploit happens and how long it 0:17:52.920 --> 0:17:54.159 takes to patch the infrastructure. 0:17:54.160 --> 0:17:55.920 We've solved that problem because what. 0:17:55.920 --> 0:17:58.639 We can do now is within minutes, have a shield 0:17:58.680 --> 0:18:01.480 that can put in front of infrastructructure that has not 0:18:01.640 --> 0:18:04.399 been updated, that has not been patched, so that you 0:18:04.440 --> 0:18:07.800 can protect the organization from critical infrastructure attacks that might 0:18:07.840 --> 0:18:11.480 happen to hospitals or financial services organizations and so on. 0:18:13.280 --> 0:18:15.480 You talk u about the building blocks, what we're talking 0:18:15.520 --> 0:18:20.160 about is data centers, rows and rows of service stacks. 0:18:20.480 --> 0:18:23.400 And we know that that infrastructure build out is happening. 0:18:23.720 --> 0:18:27.040 It's happened, and the spend is committed for more of it, 0:18:27.080 --> 0:18:30.520 is the spend committed to hypershield? Is anyone actually buying 0:18:30.560 --> 0:18:34.120 this service from you in parallel with that infrastructure build out? 0:18:35.359 --> 0:18:37.439 Well, This was the first day that we announced it 0:18:37.440 --> 0:18:40.720 to our customers. We had about we had many of 0:18:40.720 --> 0:18:44.320 the leading chief information security officers over here in the 0:18:44.400 --> 0:18:48.080 UK where we announced this product, and the most common 0:18:48.240 --> 0:18:51.080 phrase that I heard was this is completely game changing. 0:18:51.440 --> 0:18:53.400 And in fact, one of the customers told me I'd 0:18:53.400 --> 0:18:56.280 like to have two and so I think if you 0:18:56.440 --> 0:18:59.840 care about cybersecurity and if you care about your critical 0:18:59.880 --> 0:19:04.000 infrastructure being protected, it's going to be very obvious for 0:19:04.040 --> 0:19:06.120 you to make sure that you can allocate some focus 0:19:06.160 --> 0:19:09.000 on something like Cisco hypershield. And the reality is is 0:19:09.040 --> 0:19:10.760 this is the only one in the market. There's no 0:19:10.760 --> 0:19:13.199 one else who quite handles the problem the way that 0:19:13.240 --> 0:19:13.960 we are over here. 0:19:14.680 --> 0:19:17.440 Of course, all of this is surrounding the partnership and 0:19:17.600 --> 0:19:20.040 increasing partnership that you've been talking through with in Video. 0:19:20.320 --> 0:19:22.960 How integral is in Video's practice beIN within this. 0:19:24.240 --> 0:19:26.000 And the way that we think about this is you 0:19:26.080 --> 0:19:28.440 have to work with the ecosystem at large rather than 0:19:28.480 --> 0:19:31.440 being completely kind of a wall garden. So and Video 0:19:31.560 --> 0:19:34.480 is a very important player in AI, and we want 0:19:34.520 --> 0:19:36.080 to make sure that we partner with them so that 0:19:36.119 --> 0:19:39.080 we can build security specific models. We actually take our 0:19:39.119 --> 0:19:42.560 technology and optimize it for their GPUs and so we 0:19:42.640 --> 0:19:45.760 will continue to work with Nvideo and others in video. 0:19:45.800 --> 0:19:48.000 We've enjoyed a great partnership with them already and this 0:19:48.600 --> 0:19:49.960 one just extends that further. 0:19:50.640 --> 0:19:54.920 GD what in video offers is expensive, and everyone's been 0:19:54.960 --> 0:19:58.840 talking about the rush to harness chips, to harness energy, 0:19:58.880 --> 0:20:01.080 the expense that's coming in this new world of general 0:20:01.119 --> 0:20:01.520 to aire. 0:20:01.520 --> 0:20:02.360 How expensive? 0:20:02.359 --> 0:20:07.359 What can you price point your new AI cybersecurity prevention. 0:20:07.080 --> 0:20:09.560 App So the way that we are going to go 0:20:09.600 --> 0:20:12.240 out and price this is by workload. We haven't announced 0:20:12.280 --> 0:20:14.240 the exact pricing yet. This is going to be general 0:20:14.280 --> 0:20:17.760 availability around the August timeframe, and so between now and 0:20:17.840 --> 0:20:19.880 August we will make sure that we actually have more 0:20:19.960 --> 0:20:23.159 information on pricing. But our philosophy is the price for 0:20:23.320 --> 0:20:25.080 mass market, right. We want to make sure that we 0:20:25.160 --> 0:20:28.120 have high unit volume so we can get to many, 0:20:28.160 --> 0:20:30.280 many customers within a very quick amount of time. 0:20:31.640 --> 0:20:33.959 So you see, there is a human safety net element 0:20:34.000 --> 0:20:37.200 of this. You're not handing over complete control to the 0:20:37.240 --> 0:20:39.920 defense of critical infrastructure. Just explain the safety net. 0:20:41.119 --> 0:20:43.240 The way I think about this is humans are always 0:20:43.280 --> 0:20:47.280 apprehensive of something automated taking over and so remember the 0:20:47.359 --> 0:20:49.920 day's ed when you actually had to update your iPhone 0:20:50.160 --> 0:20:52.160 and you would actually back it up three times before 0:20:52.160 --> 0:20:54.520 you started updating it. Now you don't worry about it 0:20:54.560 --> 0:20:57.240 because there's that trust that gets built over time. And 0:20:57.280 --> 0:20:59.600 so what we've done is we've actually made sure that 0:21:00.040 --> 0:21:02.560 customers have the option of having a human in the loop, 0:21:02.880 --> 0:21:05.080 so if you do want to auto update your systems, 0:21:05.600 --> 0:21:08.040 that you actually have the ability to make sure that 0:21:08.040 --> 0:21:10.880 that can be approved by you and it doesn't happen automatically, 0:21:11.520 --> 0:21:14.159 but when you feel comfortable, you have the option of 0:21:14.240 --> 0:21:16.439 having that be completely transparent to you so that you 0:21:16.480 --> 0:21:18.919 can then start focusing on higher order bid items. 0:21:19.760 --> 0:21:21.840 Tit. You've used the word customers a lot. We just 0:21:21.880 --> 0:21:24.920 have thirty seconds, but just explain who the market is here. 0:21:25.200 --> 0:21:26.359 The users you're selling to. 0:21:27.280 --> 0:21:28.040 Our market is. 0:21:28.080 --> 0:21:32.160 Every large organization, mid sized organization and small organization that's 0:21:32.280 --> 0:21:34.720 interested in making sure that they can protect the data 0:21:34.760 --> 0:21:40.680 centers from attacks from a cybersecurity standpoint at aiscale. 0:21:41.680 --> 0:21:42.120 G two. 0:21:42.480 --> 0:21:44.280 So great to spend some time with you live from 0:21:44.320 --> 0:21:44.920 your garage. 0:21:45.040 --> 0:21:47.000 We joke you're actually at the McLaren Center over in 0:21:47.040 --> 0:21:49.040 the UK. We've got some nice parts in the background. 0:21:49.359 --> 0:21:51.840 So is Goo Executive vice president and general manager of 0:21:51.840 --> 0:21:53.760 Security and Collaboration Cheta Fintel. 0:21:53.960 --> 0:21:55.640 Thanks for joining us on the day of the announcement. 0:22:03.760 --> 0:22:06.280 Welcome back to Bloomberg Technology. Ed Ludlow here in San 0:22:06.280 --> 0:22:07.040 Francisco and. 0:22:07.040 --> 0:22:07.840 Karen Hyder in New York. 0:22:07.880 --> 0:22:09.840 Let's get you a quick check on these markets because actually, 0:22:10.200 --> 0:22:12.760