Speaker 1: Bloomberg Tech is alive from coast to coast, with Caroline
Speaker 1: Hide in New York and Ed Lavelow into then Rince's goal.
Speaker 2: This is Bloomberg Tech coming up. Tech earnings are in focus,
Speaker 2: with Texas Instruments and AT and T already out and
Speaker 2: looking to Alphabet and Tesla after the bell today, Plus
Speaker 2: the Microsoft.
Speaker 1: SharePoint hack hits the US Nuclear Weapons Agency as the
Speaker 1: tally grows of organizations breached, and the.
Speaker 2: White House unveils its AI action plan, including the promotion
Speaker 2: of a rapid buildout of data centers for AI.
Speaker 1: Meanwhile, let's check in on these markets because maybe then,
Speaker 1: as that one hundred is lagging some of the other
Speaker 1: key benchmarks today, the enthusiasm for the SMP, for the
Speaker 1: Dow post, that Japan trade deal not quite filtering through,
Speaker 1: We've got more anxiety around individual earnings that you're digging into.
Speaker 1: Currently flat on the Naskak one hundred key tech benchmark.
Speaker 3: What are you looking at?
Speaker 2: Yeah, we're kind of trying water to tonight, right, But
Speaker 2: the two earnings that are our AT and T, which
Speaker 2: is also completely flat the story. They just didn't hype
Speaker 2: themselves up as much as some of their peers had
Speaker 2: taken advantage of policy. We'll get into that in just
Speaker 2: a minute, but look at Texas Instruments down twelve point
Speaker 2: three percent.
Speaker 4: Do the math on tariffs.
Speaker 2: Maybe part of this, Carrow is that for a company
Speaker 2: that makes chips that go into basically everything, they can't
Speaker 2: do the math on tariffs.
Speaker 4: And I think that's where we go.
Speaker 1: We do because one hundred thousand customers, they couldn't tell
Speaker 1: us who is dragging inventory forward or not.
Speaker 3: In King joins us for more.
Speaker 1: And look, this is the worst fall in the stock
Speaker 1: since two thousand and eighty in.
Speaker 5: Yeah, they're having a very bad day. And it's not
Speaker 5: because the numbers are terrible, they're absolutely not. It's more
Speaker 5: of a directional thing. And it's more because, as you
Speaker 5: guys just alluded to, they're kind of pressing the wrong buttons,
Speaker 5: the fear buttons for the market right now, which is
Speaker 5: tariffs are going to have an impact. Maybe they're having
Speaker 5: an impact already. Frankly, we don't know. And that was
Speaker 5: really then of the call yesterday, and obviously analysts and
Speaker 5: investors this morning did not like that.
Speaker 4: Ian.
Speaker 2: In your interview with CFO Raphael Lazardi, he basically said
Speaker 2: this idea, right, we have all these customers in all
Speaker 2: these different domains. It's hard of us for us to
Speaker 2: keep track. But executives on the call also talked about
Speaker 2: the idea that in the current period, the order data
Speaker 2: is quite strong.
Speaker 5: Yeah, I mean the way that they described it was
Speaker 5: that it was kind of long, nonlinear, that when there
Speaker 5: was a lot of uncertainty about what was going to
Speaker 5: happen with tariffs, at the beginning of the quarter, we
Speaker 5: had a kind of a spike very strong orders, and
Speaker 5: then after that things kind of evened out a little
Speaker 5: bit more and followed normal patterns. But that is the
Speaker 5: kind of thing that analysts and investors have kind of
Speaker 5: been looking for as like a sign that this demand
Speaker 5: that we're seeing isn't real demand, that it's this inventory
Speaker 5: build up that Caroline just sort of alluded to that
Speaker 5: this kind of pulled forward.
Speaker 6: So again, the numbers were good, right.
Speaker 5: Sixteen percent then forecasting eleven percent growth.
Speaker 4: There's nothing wrong with that.
Speaker 5: The problem is that people are concerned about how much
Speaker 5: of that is real and how much of that can continue.
Speaker 1: What's the reader cross Because NXP sort of signaled this,
Speaker 1: but Texas Instruments is the Bellweather.
Speaker 5: Yeah, Texas Instruments is a more diverse company than an XP.
Speaker 5: What they have in common was auto and what Texas
Speaker 5: Instruments said about automotive, which is, as you know, one
Speaker 5: of the great hopes for the chip industry. Things haven't
Speaker 5: got better yet. We perhaps or a bit of pull
Speaker 5: forward in China. And again this is a you know,
Speaker 5: this should be turning into a positive story. This should
Speaker 5: be sort of heading upwards and making everybody smile again.
Speaker 5: And it's not right. So that as we look at
Speaker 5: other companies throughout this earnings period, companies that are trying
Speaker 5: to do well in auto, perhaps the company is like Qualcomm,
Speaker 5: which is part of the IDA versification story. People are
Speaker 5: now concerned about this area. People are now concerned more
Speaker 5: in general.
Speaker 4: Blue Magsie King, thank you very much.
Speaker 2: Another company that's out of earnings is AT and T
Speaker 2: shares have been slipping. They're now flat after the company
Speaker 2: reiterated a profit forecast that fell short of analyst estimate. Still,
Speaker 2: the company saw rapid wireless phone subscriber growth, adding four
Speaker 2: hundred and one thousand customers with the help of increased
Speaker 2: perks and incentives in the second quarter. For more Bloombers.
Speaker 2: Kelsey Griffiths is here in Washington, DC. So basically investors
Speaker 2: are saying, well, hold on a minute. One of your
Speaker 2: big rivals, Verizon big themselves up what they've been able
Speaker 2: to do because of President Trump's policies, particularly around tax i.
Speaker 2: Guess the reader cross is that they're disappointed AT and
Speaker 2: T's not doing the same thing exactly.
Speaker 7: So what we saw this Maureene is that AT and
Speaker 7: T became a bit of a victim of inflated Wall
Speaker 7: Street expectations. After a Verizon ended up posting these really
Speaker 7: good numbers, they ended up updating their full year forecast,
Speaker 7: and I think the market was kind of hoping that
Speaker 7: AT and T would do the same. Now, AT and
Speaker 7: T did adjust their numbers a bit, but it wasn't
Speaker 7: anything as dramatic as we saw a Verizon.
Speaker 1: Meanwhile, what was dramatically better than Verizon was the amount
Speaker 1: of net ads they're making in terms of phone use.
Speaker 3: Kelsey just push us forward.
Speaker 1: Therefore, on AT and T, perhaps what was baked in
Speaker 1: because these stocks have run up this year.
Speaker 3: That's right.
Speaker 7: AT and T is on a really good growth trajectory
Speaker 7: and they're seen as this pretty steady you.
Speaker 6: Know growing business.
Speaker 7: They've been investing a lot of cash into their Fiver
Speaker 7: subscriber ads, and although they were a little short of
Speaker 7: expectations this quarter, that is still an area where they're
Speaker 7: predicting massive growth.
Speaker 2: They were bullish about their commitment to investing in this country.
Speaker 2: This is a theme Caroline and I've discussed with AT
Speaker 2: and T in the past. What did the CFO say
Speaker 2: they're going to prioritize and what's the kind of level
Speaker 2: of investment that they're talking about here.
Speaker 7: That's right, So in the wake of the big beautiful bill,
Speaker 7: all companies, including Verizon and AT and T are looking
Speaker 7: to really invest in their networks. They're looking at these
Speaker 7: tax savings and kind of thinking about how they're going
Speaker 7: to spend that. For AT and T, we've heard that
Speaker 7: they're going to invest an extra billion or so in
Speaker 7: the fiber network, I believe per year. And then we're
Speaker 7: also going to see some pretty big contributions to the
Speaker 7: employee pension plan.
Speaker 3: We'll keep an eye on it.
Speaker 1: Kelsey Griffiths, we thanks so much on the wrap up
Speaker 1: on AT and T, But now let's get some other
Speaker 1: earnings context and what we expect to come after.
Speaker 3: The closing bell today. Of course it's Alphabet.
Speaker 1: Brad Ericsson, internet analyst that obviously Capital Markets joins us
Speaker 1: now and you've got I think it's about a two
Speaker 1: hundred dollars price.
Speaker 3: Tag outperform on Alphabet.
Speaker 1: How can they live up to the prior to this
Speaker 1: day ten day run up, a longest winning streak for
Speaker 1: Alphabet that we've seen since twenty ten.
Speaker 4: Rat.
Speaker 8: Yeah, there's a couple of kind of cross current things
Speaker 8: going on. I think first on the fundamental side, we're
Speaker 8: going to see really good numbers our checks through the quarter.
Speaker 8: We're fairly strong, and I do expect them to print
Speaker 8: upside tonight. So I think that's kind of why you've
Speaker 8: seen the market price that in a little bit and
Speaker 8: run the stock up here in front of the print
Speaker 8: off setting that maybe not quite as good from a
Speaker 8: from a forward set of perspective, is that once they
Speaker 8: print numbers tonight, say what they say, then we've got
Speaker 8: to sit around and wait two three four weeks for
Speaker 8: this regulatory decision out of the judge that the obviously
Speaker 8: will we'll scare some people, so and let's.
Speaker 1: Just think about that regulatory overhang. And we love reading
Speaker 1: your notes and really we're talking about how this is
Speaker 1: a strong fundamentally company but challenged thematically in a waiting
Speaker 1: regulatory wild card. We await what Judge Meta says in August.
Speaker 1: But when you think about the challenge thematically, any numbers
Speaker 1: that you're going to be looking at that would tell
Speaker 1: you that there is competition in terms of search that
Speaker 1: CHATCHBT is eating in to their breadwinner.
Speaker 8: Yeah, I mean they'll they'll obviously again, they'll print the
Speaker 8: numbers tonight. I do expect them to be good and
Speaker 8: so just objectively on that piece of it, I think
Speaker 8: they'll have a really strong case and story to tell
Speaker 8: on the conference.
Speaker 6: Call around why AI is good for their business.
Speaker 8: They're not going to directly address sort of the competitive threats,
Speaker 8: but they will definitely be I think in a good
Speaker 8: position tonight to position AIS as sort of nothing but
Speaker 8: a good thing for the business.
Speaker 6: But yeah, I think the point of our note was
Speaker 6: the numbers will be good.
Speaker 8: They can say what they want, but the reality is,
Speaker 8: so long as you know chat GPT, Perplexity, anthropic, there's
Speaker 8: a number of companies that are really making a lot
Speaker 8: of headway on the AI front. Everyone's well aware of
Speaker 8: that bare case that AI narrative against Google's core business
Speaker 8: is not going anywhere for the foreseeable future.
Speaker 9: Right.
Speaker 2: The technology story I see is quite simple. How does
Speaker 2: the Gemini model become more embedded across all of Google's business?
Speaker 2: But I guess i'd love to know where you want
Speaker 2: to see it show up in the financial results to
Speaker 2: give you faith that the payoff is there.
Speaker 8: Yeah, you know, I think the most important piece and
Speaker 8: it's not.
Speaker 6: I don't think it gets enough focus. Is Gemini the model?
Speaker 9: Right?
Speaker 8: Partially, it's just because of the brand. People have learned
Speaker 8: the name. It's obviously driving the Gemini app, and that
Speaker 8: is important. Where we're actually really focused is certainly on
Speaker 8: AI overviews.
Speaker 6: But bringing Gemini to AI mode, I call it the
Speaker 6: my mom test. Right when my mom.
Speaker 8: Is suddenly using some of these tools, we know they're
Speaker 8: really hitting sort of broad based. In fairness, my mom
Speaker 8: doesn't do a lot with technology, So there it is.
Speaker 8: But the point is that if you're spoon feeding AI
Speaker 8: mode to people that would ultimately just be coming to
Speaker 8: Google for normal purposes, and you've got the power of
Speaker 8: a really solid set of Gemini models, that's where I
Speaker 8: think it becomes to a bigger and bigger tailwind.
Speaker 6: For these guys.
Speaker 4: Brad.
Speaker 2: We got the White House's AI action plan this morning,
Speaker 2: twenty three pages. I printed it out for you, so
Speaker 2: for some light reading. Later in the program, we'll get
Speaker 2: into the detail and the politics of it. But the
Speaker 2: simple question is whether or not Alphabet is going to
Speaker 2: be a beneficiary of what this administration wants America to
Speaker 2: do in AI.
Speaker 4: Do you think it will be.
Speaker 8: Generally yes, But I do think there's going to be
Speaker 8: more and more attention paid to how sort of equitable
Speaker 8: the value distribution is of AI. I think that's something
Speaker 8: we spend a lot of time thinking about these days,
Speaker 8: which is, I think if you look at the parts
Speaker 8: and pieces of what we know of AI today, it
Speaker 8: would suggest that a lot of the value could accrue
Speaker 8: to only a very few number of companies. And I
Speaker 8: don't think that's going to work bigger picture from a
Speaker 8: regulatory perspective.
Speaker 6: And the reason we like Google in that perspective is.
Speaker 8: Google is the distributor of traffic right the biggest one
Speaker 8: on the Internet, and I don't see that changing, and
Speaker 8: so I actually think that plays quite well into the
Speaker 8: regulatory framework going forward.
Speaker 1: Let's go to regulatory overhang just the last case though, Brad,
Speaker 1: because that is the cloud you signal coming in August.
Speaker 3: What do you brace for.
Speaker 1: Do you think Judge Meta would break up the company?
Speaker 6: Shorty answer is we don't. We don't think so.
Speaker 8: I think that we have we ascribe kind of a
Speaker 8: lower probability to that. But there's sort of two or
Speaker 8: three things we think about. Number one is you're not
Speaker 8: going to be able to pay for placement nd fall search.
Speaker 6: We're pretty certain that's that's that is going away.
Speaker 8: Two, there could be some some sort of opening up
Speaker 8: the kimono on data that Google has to competitors. We
Speaker 8: actually don't think that matters that much, but that could
Speaker 8: certainly play out. And then the third one is the
Speaker 8: divest at your potential of Chrome, and there are stances.
Speaker 8: You know, Chrome's not a business, it's a product. I
Speaker 8: think the maybe the dj comments sort of ignored that
Speaker 8: piece in their aspirations to have that piece of it removed,
Speaker 8: and so ultimately you can they could force them to
Speaker 8: do that. It's certainly possible, but then you're introducing a
Speaker 8: whole other set of issues, as we've seen Perplexity, open AI,
Speaker 8: all these companies talking about opening browsers right, it's clearly
Speaker 8: going to be very important for distribution.
Speaker 6: Seems incredibly arbitrary to sort of.
Speaker 8: Hand away Google's browser in the hands of another when
Speaker 8: they're saying that is going to be critical to the
Speaker 8: technology innovation here for the future.
Speaker 6: It would just be handing value away. So we see
Speaker 6: low likelihood of that happening.
Speaker 2: Brad ericson RBC Capital Markets into the analysts, pushing ahead
Speaker 2: to alphabet after the bell, thank you.
Speaker 4: The other name after the bell is Tesla.
Speaker 2: This is a stock that's down seventeen percent year to date,
Speaker 2: it's up half a percent in the moment, and the
Speaker 2: data carro is like probably biggest dropping revenue for a
Speaker 2: decade year on year, but the street probably looking past
Speaker 2: that because it's not about selling cars anymore.
Speaker 1: It's not it's about one man really and his vision.
Speaker 1: And let's just stick with Elon and Elon's enpart because actually, look,
Speaker 1: you took a look at the language the fine print
Speaker 1: included in the tender off of this going on for SpaceX, right,
Speaker 1: and you notice that there's a new little warning just
Speaker 1: tucked in there about his potential to get more involved
Speaker 1: in politics.
Speaker 2: Yeah, so what we saw was the risk factors section
Speaker 2: in the tender documents that valued SpaceX at four hundred
Speaker 2: billion dollars. Right, and this is what it literally says.
Speaker 2: It acknowledges that Musk was previously a senior advisor to
Speaker 2: President Trump.
Speaker 4: As part of DOGE.
Speaker 2: But also this is the key bit, may in the
Speaker 2: future serve in similar roles in devote significant time and
Speaker 2: energy to such roles. The reason that's important right now
Speaker 2: and analogous to Tesla, is that Tesla investors are also
Speaker 2: saying all we need to hear is that Musk is
Speaker 2: committed to the company and other companies, not necessarily what
Speaker 2: his political beliefs. So I think that's kind of what
Speaker 2: we're watching for.
Speaker 1: And look, he's been trying to signal that on X
Speaker 1: right he's sleeping, eating, repeating work.
Speaker 3: Amid a little bit of like childcare.
Speaker 2: Yeah, seven days a week back at the company. But
Speaker 2: there's this big overhang about the America Party, and people
Speaker 2: on X are saying, will he even address the America
Speaker 2: Party thing during Tesla's earnings calls.
Speaker 4: That's the state of play right now.
Speaker 1: Yeah, Well, we keep our eyes on it. More coming
Speaker 1: up up right now on the Microsoft SharePoint TCAD. It's widening.
Speaker 9: Now.
Speaker 1: The number of companies and organizations that have been breached
Speaker 1: by the hack on Microsoft's SharePoint has going to about
Speaker 1: four hundred entities now, but it's according to Bloomberg reporting
Speaker 1: that this includes the US National Nuclear.
Speaker 3: Security Administration, which of course oversees the design of nuclear weapons.
Speaker 3: For more, Bloomberg's Jake Bleiberg joins us and just how
Speaker 3: extreme are these hacks?
Speaker 1: What sort of information do we understand that they've managed
Speaker 1: to gather?
Speaker 10: So we're still learning about what they're gathering, and it's
Speaker 10: a hard question to answer.
Speaker 4: In a lot of cases.
Speaker 10: The thing we know they've taken in at least some
Speaker 10: instances are signing credentials, user names, passwords, other information that's
Speaker 10: used to secure systems. And that's particularly concerning because it
Speaker 10: means the hackers can potentially branch out from what the
Speaker 10: one system they got into here, Jake.
Speaker 2: When Bloomberg break the storyline last night about this particular
Speaker 2: agency being hacked that is responsible for the development and
Speaker 2: disposal of nuclear weapons, understandably, loads of Americans on social
Speaker 2: media were like.
Speaker 4: What on earth are we in trouble?
Speaker 2: Do we know the limits of what the hackers were
Speaker 2: able to gather what is the agency's response. I think
Speaker 2: it's a time where we just like, here's the reality
Speaker 2: of the situation.
Speaker 10: So what are reporting shows so far is that there
Speaker 10: wasn't sensitive or classified information taken from this nuclear agency,
Speaker 10: and that the classified information within it and most other
Speaker 10: government agencies is sort of sectioned off from the type
Speaker 10: of system that was easily breached in this attack. However,
Speaker 10: as I just mentioned, one of the concerns here is
Speaker 10: that once the hackers get in, they may be able
Speaker 10: to branch out and burrow in elsewhere.
Speaker 1: Now, what's interesting is the number of agencies in companies
Speaker 1: and entities has been identified by Dutch cyber company at
Speaker 1: the moment, this one being I Security. They're saying it's
Speaker 1: largely US based, but actually very international. What has Microsoft
Speaker 1: been identifying? They've of course told us who pers actually
Speaker 1: the hackers are, but how are they keeping us abreast
Speaker 1: of this?
Speaker 10: So Microsoft has told us that at least two Chinese
Speaker 10: state backed hacking groups are behind some of these attacks,
Speaker 10: and that there's another group based in China that is
Speaker 10: carrying out attacks to what we know is that the
Speaker 10: servers that were made vulnerable by this attack, for the
Speaker 10: common micro or soft software SharePoint are spread out all
Speaker 10: over the globe, and that the number that we're potentially
Speaker 10: vulnerable is in the thousand, it's not the hundreds.
Speaker 4: So the scope of this is.
Speaker 10: Really something that's still coming into view. And you know,
Speaker 10: Microsoft up to now has not told us how many
Speaker 10: of their customers have experienced breaches, Jake.
Speaker 2: Many Microsoft customers watch this program, many Microsoft employees watch
Speaker 2: this program. What has Microsoft told us in terms of
Speaker 2: their response and how they're handling it.
Speaker 10: So Microsoft moved quite quickly to roll out patches to
Speaker 10: this vulnerability once they became.
Speaker 6: Aware of it.
Speaker 10: They rolled out a patch over the weekend and more
Speaker 10: during the week to sort of try to close this
Speaker 10: door and keep it shut.
Speaker 6: But what we've heard from other.
Speaker 10: Security researchers is that once the hackers are in, you're
Speaker 10: still potentially vulnerable. Closing the door once they're in the
Speaker 10: house doesn't solve your problems, and that really requires sort
Speaker 10: of continuing to search and understand did we.
Speaker 4: Get hit.
Speaker 2: Bloombergs Jake Bleiberg with ongoing reporting.
Speaker 4: Thank you very much.
Speaker 1: It's time now for talking tech and first up, Uber
Speaker 1: is testing a ride option in the un The match
Speaker 1: is female riders and drivers now. The safety feature is
Speaker 1: already available in some international markets. The pilot will launch
Speaker 1: in Los Angeles, San Fransle, us Go, and Detroit in
Speaker 1: the next few weeks.
Speaker 3: Has long been offered by Lyft Plus.
Speaker 1: Sonos has named interim leader Tom Conrad as chief executive officer.
Speaker 1: The appointment is a vote of confidence in his effort
Speaker 1: to get the struggling audio company back on track after
Speaker 1: a disastrous software launch that hurts sales and force the
Speaker 1: company to layoff workers.
Speaker 3: And the UK's antitrust watchdog.
Speaker 1: Is proposing giving Apple and Google's Android so called strategic
Speaker 1: market status now. The move would pave the way for
Speaker 1: regulation of their mobile operating systems, app stores and mobile
Speaker 1: web browsers.
Speaker 2: Ed a stick with Apple, it's launching a new version
Speaker 2: of its device insurance plan Apple Care. The new twenty
Speaker 2: dollars a month plan can cover up to three devices.
Speaker 2: Bloomberg Sam Kelly has the details. So often have I
Speaker 2: tapped into Apple Care having dropped this thing on the floor?
Speaker 2: What's new about it? Why are they updating it?
Speaker 10: HI?
Speaker 3: Good morning?
Speaker 4: Yeah.
Speaker 11: So, basically, this new twenty dollars a month subscription allows
Speaker 11: you to have three different devices of any different base.
Speaker 3: And also you could have.
Speaker 11: A newer iPhone or a Vision Pro or an Apple
Speaker 11: Watch and for twenty dollars, it will protect against spills, accidents,
Speaker 11: crack screens, you can talk to somebody twenty four seven
Speaker 11: if you have it, help battery replacements before Previously, the
Speaker 11: company has long offered a subscription plan where you can
Speaker 11: opt into the same type of thing for the iPhone,
Speaker 11: but you would have to pay for it almost a
Speaker 11: la carte. So if you had an Apple Watch, you'd
Speaker 11: have to do just that, you'd have to do the iPhone.
Speaker 11: This bundles packages everything very nicely together for twenty dollars
Speaker 11: a month, and in theory there could be some savings
Speaker 11: here for some consumers as well, and obviously a subscription
Speaker 11: play for Apple as well.
Speaker 1: Let's go there because I can see what the appetizing
Speaker 1: for consumer, particularly if there's loss and theft coverage.
Speaker 3: What is in this for Apple?
Speaker 11: Yeah, so this is a major play for Apple. Again,
Speaker 11: you know, devices and insurance isn't exactly it doesn't sound
Speaker 11: sexy on the service, but there is a major play here.
Speaker 3: So basically the services to.
Speaker 11: In general is Apple's second biggest money maker behind the iPhone.
Speaker 3: Not only is it the.
Speaker 11: App Store, there's Apple TV Plus, there's Apple Fitness, there's iCloud.
Speaker 11: So here with Apple Care you're able to keep you
Speaker 11: have two billion devices out there. This is people who
Speaker 11: maybe have one device ensured.
Speaker 3: If that this is.
Speaker 11: Money that they would be able to make, and it
Speaker 11: would in theory, help upset some of the different challenges
Speaker 11: that they're seeing right now around the Apple Store or
Speaker 11: lagging behind AI in certain areas, against competitors trying to
Speaker 11: drum up subscription sales in general. And this is money
Speaker 11: that potentially people might not be paying, but they might say,
Speaker 11: you know what, for twenty dollars a month, if my
Speaker 11: phone breaks, if I lose it, maybe this is enticing
Speaker 11: enough for me to do it.
Speaker 1: Where all the limitations though, for me, I think the
Speaker 1: off putting thing is, Yes, I can see you want.
Speaker 3: Into opt in if you're buying a new device, but
Speaker 3: then to get.
Speaker 1: The oldest stuff that you already have, and should you
Speaker 1: kind of go to get it diagnostically tested, Yes.
Speaker 5: You do.
Speaker 11: So you have to go through a short sort of
Speaker 11: a several minutes testing to make sure that the screen
Speaker 11: is okay, you know, the battery they want to make
Speaker 11: sure everything is okay before your insurance, almost like health insurance,
Speaker 11: they want to make sure things are okay.
Speaker 3: But it does go back four years.
Speaker 11: So you might say, you know, I have a brand
Speaker 11: new iPhone, but I haven't bought an Apple Watch in
Speaker 11: quite a while, and so this might be a way
Speaker 11: for you to say, oh, you know, maybe I can
Speaker 11: opt into something a little bit more.
Speaker 1: Bloomberg'smartha Kelly, great analysis.
Speaker 3: We appreciate it. Welcome back to Bluemberg Tech. Let's check
Speaker 3: in on these markets.
Speaker 1: Because actually tech it's kind of under performing some of
Speaker 1: the other major benchmarks today. There is uplifted euphoria around
Speaker 1: Japan US trade deal.
Speaker 3: Is there more to come?
Speaker 1: But on the big tech benchmark were flat on the
Speaker 1: NASA one hundred, we had some key earnings that drag us.
Speaker 3: Lower from a point's perspective. Let's dig into them.
Speaker 1: Texas Instruments and we talked about it at the top
Speaker 1: of the show.
Speaker 3: It is having its worst day since two thousand and eight.
Speaker 1: Clear global tariffs impact to the business, but the executives
Speaker 1: can't all articulate.
Speaker 3: How much is there is a pull forward.
Speaker 1: On the previous quarter and it just didn't live up
Speaker 1: to the expectations of investors. Meanwhile, we're also down on
Speaker 1: SAP and trading in Europe. We've just closed the market,
Speaker 1: were off by five.
Speaker 3: Percent again, Tariff headwinds, the dollar.
Speaker 1: Weakness impacting this particular software business.
Speaker 4: At okay AI.
Speaker 2: Leaders are gathering here in Washington as President Trump is
Speaker 2: set to give an address on his AI roadmap for
Speaker 2: the United States. Details that it includes the rapid buildout
Speaker 2: of data centers and the removal of quote onerous AI regulations.
Speaker 2: Bloomberg's Michael Sheppard joins us with more. We've both printed
Speaker 2: it out, all twenty three pages. We haven't read the
Speaker 2: entirety of it, skimmed it, but we've been talking for
Speaker 2: a while about how the focus of the document, it's
Speaker 2: infrastructure related, the American technology stack and the energy to
Speaker 2: support it is their substance to it, and.
Speaker 12: Well, the substance will really bear out over time mat
Speaker 12: as we see a lot of administrations and all those
Speaker 12: up administration, but all of its predecessors have flooded Washington
Speaker 12: with these sorts of policy directives in the past, and
Speaker 12: the catch here will be to see whether they can
Speaker 12: actually gain some traction with this document, not only with industry,
Speaker 12: but also with Congress, with the federal bureaucracy, with the
Speaker 12: agencies that they currently oversee, and then at the state
Speaker 12: and local level too. They have to make sure that
Speaker 12: a lot of this can be done. And it's an
Speaker 12: onerous process. They talk about removing onerous regulations, but they
Speaker 12: will have a lot of digging to do on it.
Speaker 12: That is, to cut some of the red tape that
Speaker 12: they talk about right in the beginning of the report.
Speaker 12: To also try to pave the way not only for
Speaker 12: the data centers, but for the energy needed to power them.
Speaker 4: That's a big deal.
Speaker 6: It's a big pillar of this.
Speaker 12: And then also you talked about this, and we've talked
Speaker 12: about this on the program before too, and it was
Speaker 12: in your conversation with David Sachs just last week. Building
Speaker 12: AI globally on the American tech stack. That's another pillar
Speaker 12: of this document and it's something we'll have to watch
Speaker 12: to see how they implement, yeah.
Speaker 1: Sort of helping promote exports to an extent. Mike dig
Speaker 1: into what they're looking at abroad right now, because yes,
Speaker 1: there's been anxiety about states going it alone, but meanwhile
Speaker 1: Europe's on top of AI regulation.
Speaker 3: How do they counteract that.
Speaker 12: Well, what they're trying to do first is set the
Speaker 12: tone here in use when it comes to regulation of
Speaker 12: AI by pursuing what they consider to be a lighter
Speaker 12: touch CARO. More importantly, though, they are focusing on deployment
Speaker 12: of technology and the infrastructure that is needed to power
Speaker 12: it abroad, and that is why in part you saw
Speaker 12: the relaxation of the export curbs on Age twenty eight
Speaker 12: chips from Nvidia to China. And this is a step
Speaker 12: that the administration sees and certainly one that Jensen Wang endorses.
Speaker 12: That's needed to be able to have American companies, especially
Speaker 12: in Vidia, competing in China so that it doesn't make
Speaker 12: it so easy for China to be able to export
Speaker 12: its own technology, perfected at home, to other markets as well.
Speaker 4: And that's a really critical step for them.
Speaker 12: They've articulated here, and President Donald Trump will be signing
Speaker 12: orders later today to implement parts of this plan. Among them,
Speaker 12: we expect to see orders instructing US export agencies to
Speaker 12: take steps that would enhance deployment of American technology and
Speaker 12: export of not only just the chips themselves, but everything
Speaker 12: that goes with it, for the software and everything else too, Caro,
Speaker 12: Max Mike.
Speaker 3: Shephard with the latest on the report.
Speaker 1: We appreciate it that for more in the future of
Speaker 1: AI and President Trump's Action Plan, Naarena singers with us
Speaker 1: Cudo AI CEO. You really look at the way in
Speaker 1: which we can implement AI from a governance perspective, from
Speaker 1: a rose tolerance perspective, from a cultural perspective within businesses Navarna,
Speaker 1: when you're looking at this report, when you're thinking about
Speaker 1: AI being more hands off, more pro growth, is that
Speaker 1: the right way?
Speaker 9: Well, good to see you, Caroline, and today we really
Speaker 9: commend the White House on launching the AI Action Plan.
Speaker 3: I think if you dive a little bit deeper into
Speaker 3: the AI Action Plan, there's a key, key.
Speaker 9: Statement and sentiment which is the bottleneck to harnessing AI's
Speaker 9: full potential is not necessarily the availability of models or
Speaker 9: tooled an application. It is slow adoption and central to
Speaker 9: that is lack of trust. And I think, as you
Speaker 9: know that Tredo AI has been on this journey to
Speaker 9: embed that trust in the full AI life cycle, and
Speaker 9: I think the AI Action Plan is really diving deep
Speaker 9: into it with how do you standardize evaluations, how do
Speaker 9: you actually bring more transparency to AI so that you
Speaker 9: can fuel.
Speaker 3: Growth, but all that growth has.
Speaker 9: To be grounded in trust, and that's what the Action
Speaker 9: Plan is focused on.
Speaker 4: Navarena Impillar.
Speaker 2: One of the document, which is titled Accelerate AI Innovation.
Speaker 2: Something very high up is the commitment to encourage open
Speaker 2: source and open weight AI, and I thought that was
Speaker 2: really interesting the prominence of it within the document. Why
Speaker 2: is it important that this administration focuses on open source
Speaker 2: and open way AI.
Speaker 3: Yeah, ed, great question.
Speaker 9: I think we've seen historically that open source really contributes
Speaker 9: to more innovation and in artificial intelligence, especially with the
Speaker 9: United States leading, we are finding a lot of great
Speaker 9: innovation is coming from our open source ecosystem. So the
Speaker 9: focus in the AI Action Plan on open source further
Speaker 9: strengthens the capability for everyone else to build on top
Speaker 9: of AI innovation at large scale.
Speaker 2: There is a really heavy emphasis on deregulation, cutting red
Speaker 2: tape to facilitate the infrastructure side of this. Does that
Speaker 2: concern you that that's the plan as opposed to I
Speaker 2: guess a codified or framework piece of rulemaking around AI.
Speaker 9: So, as you know, creed OI serves some of the
Speaker 9: largest global two thousand companies in the world, and what
Speaker 9: we are finding is governance and oversight and control of
Speaker 9: AI systems is not just tied to regulation.
Speaker 4: It is really about.
Speaker 9: Understanding these AI systems and making sure that you have
Speaker 9: the right you know, not only standards, but also some
Speaker 9: guardrails which are in place. So what we are going
Speaker 9: to see I think coming out of this AI Action
Speaker 9: Plan as stated, is a focus on more contextual evaluations,
Speaker 9: which are paramount for making these systems happen. I would
Speaker 9: like to see Obviously the CI action plans stretch a
Speaker 9: little bit further into standardizing what does good look like
Speaker 9: for AI and more to come on that soon.
Speaker 1: Navarna, let's just tick into the global perspective you have
Speaker 1: and the fact that the context is this is a
Speaker 1: race and this is a win. It takes sol us
Speaker 1: versus China. Is that what you're saying.
Speaker 3: Absolutely?
Speaker 9: You know what has been really important is this isn't
Speaker 9: just a policy moment. I really believe this is a
Speaker 9: moonshot moment for US and to continue lead leading and
Speaker 9: artificial intelligence, US will need to lead with trust and
Speaker 9: that's how we are going to unlock the power of
Speaker 9: this technology.
Speaker 3: So this is our arms race.
Speaker 9: United States is leading, and it's going to be critical.
Speaker 6: How we bring.
Speaker 9: Our allies and partners together on this journey by grounding
Speaker 9: them in trust, oversight, and right responsibility is going to
Speaker 9: be key.
Speaker 1: So when we go back to the open source question,
Speaker 1: that feels in reaction to what happened with deep Seek
Speaker 1: and China, and ultimately is that do you think where
Speaker 1: this sentiment is coming from and what does that mean
Speaker 1: for the players here in the United States is all
Speaker 1: in our meta's viewpoint.
Speaker 9: You know, Caroline, that's a great question. You know, United
Speaker 9: States has been leading in artificial intelligence and we will
Speaker 9: continue to maintain that leadership. The open source focus is
Speaker 9: a really pivotal one because if we want to lead,
Speaker 9: especially with heart sciences, in using artificial intelligence, building on
Speaker 9: each other's work has always been foundational to how open
Speaker 9: source works. So I don't think this is in reaction,
Speaker 9: but this is a continued leadership from the United States
Speaker 9: perspective in terms of how we are going to lead
Speaker 9: an artificial intelligence.
Speaker 2: Verna saying of credo AI, great to have you back
Speaker 2: on the show.
Speaker 4: Thank you very much.
Speaker 1: This is bloombg Tech and you are looking in a
Speaker 1: live shot at the principal room.
Speaker 3: Check out the bloombg Tech podcast.
Speaker 1: Find it on the terminal as well as online on Apple, Spotify,
Speaker 1: and iHeart. This is Bloomberg compliance startup vanter Well. It's
Speaker 1: raised one hundred and fifty million dollars in its Series
Speaker 1: D round, bringing its valuation to over four billion dollars now.
Speaker 1: The eight year old company helps businesses stay in line
Speaker 1: with rules and regulations around managing and storing customer data.
Speaker 1: Banta's CEO and co founder, Christina Kacciopo joins us. Now,
Speaker 1: So the one hundred and fifty million what does that
Speaker 1: help you do?
Speaker 13: It helps us continue to help our customers build and
Speaker 13: demonstrate trust across the internet.
Speaker 1: Okay, demonstrates trust across the internet. I mean it immediately
Speaker 1: makes me think of today's news flow. We're worrying about
Speaker 1: Microsoft and the hack there. I mean, is this something
Speaker 1: that you're worrying about more broadly, that security isn't strong enough,
Speaker 1: particularly when it comes to access to third parties.
Speaker 13: Yeah, I think what we've seen is security online. It's
Speaker 13: an increasing concern. This has been true for years, It
Speaker 13: been true for decades, it will continue to be true.
Speaker 13: And it's not because smart people aren't working on it.
Speaker 13: Lots of smart people are. It is just an increasingly
Speaker 13: hard cat and mouse game as adversaries get stronger and
Speaker 13: stronger now with AI as well, and so it is
Speaker 13: increasingly hard for businesses to build out trustworthy platforms, secure
Speaker 13: customer data, and we hope vantas a part in helping
Speaker 13: them do that.
Speaker 3: Twelve thousand of them already customers that you're helping.
Speaker 1: What has been the demand like for your own AI
Speaker 1: applications AI agents in particular.
Speaker 13: Yeah, we launched our AI agents earlier this year. We've
Speaker 13: seen great reception from customers. I think we've had the
Speaker 13: agent's kind of automated a lot of manual worker customers.
Speaker 13: We're doing customer It's like Duo Lingo and Ramp and
Speaker 13: Snowflake are all using the AI agents to automate kind
Speaker 13: of what we're manual security and compliance workflows.
Speaker 1: What's interesting is the way in which you want to
Speaker 1: expand now is by looking not just at companies, but
Speaker 1: at governments and government agencies.
Speaker 3: We can show your customers.
Speaker 1: We can also show the vcs that are continuing to
Speaker 1: back you, one of whom, of course is well the
Speaker 1: business of Craft Ventures and that we associate with David Sachs.
Speaker 1: Is he going to be able to open doors for you?
Speaker 13: You know, what we've heard from David and Craft is
Speaker 13: David is very focused on Washington, DC. He left an
Speaker 13: incredibly strong team at Craft, but there's kind of strong
Speaker 13: guardrails and in place between those two teams. So we
Speaker 13: really enjoy working on you know, with the folks at Craft,
Speaker 13: and you know, separately we're pursuing engagements in DC. But
Speaker 13: from what I hear, David's really engaged with us work
Speaker 13: with the government.
Speaker 1: And do you think just in the current administration and
Speaker 1: environment that they are more willing to work up with
Speaker 1: startups such as yourself that government now is a more
Speaker 1: accessible area for your company.
Speaker 13: I think so we've seen this government be very receptive
Speaker 13: to software providers. They want to get more software into
Speaker 13: the government, save time, save money for taxpayers. And there's
Speaker 13: programs like fed Ramp twenty x, this pilot that is
Speaker 13: going through to help software providers prepare better and faster
Speaker 13: to serve the government. Because US government is just a
Speaker 13: different sort of customer than almost any other in the world.
Speaker 1: It is, and what I'm interested there for is how
Speaker 1: you beef yourself up to meet that demand. You said
Speaker 1: that you want to continue to expanding, continuing to help
Speaker 1: your own clients that you already have. Where are the
Speaker 1: bottlenecks for you? Is it about hiring more talent? Is
Speaker 1: it more about a marketing play just getting into.
Speaker 3: The orbit of other businesses.
Speaker 13: Talent is a huge part of it, and we are
Speaker 13: only as good as the people who.
Speaker 6: Work at Vanta.
Speaker 13: At Vanta and there are all sorts of different pieces
Speaker 13: of that. So AI talent is definitely a part of
Speaker 13: it for a very hot area of the market. I'm
Speaker 13: sure you're covering the government pieces another one again that
Speaker 13: is just a specialized skill set. And so we are
Speaker 13: hiring across the board, lots of roles, lots of opportunity.
Speaker 3: And where are you hiring.
Speaker 1: I know you've been beefing up offices in London, You've
Speaker 1: been put data centers in Australia.
Speaker 3: How global does this get? Quite global?
Speaker 13: So we've got five global officers around the world follow
Speaker 13: the Sun coverage for our customers. We also in the
Speaker 13: US have folks spread out across the country, which we've
Speaker 13: found to be a very successful hiring strategy over the
Speaker 13: last five years.
Speaker 3: Christina and Kechiopo.
Speaker 1: We will let you get back to that hiring strategy
Speaker 1: and running the business. The CEO and co founder of
Speaker 1: Vanter congratulations on the rays.
Speaker 3: Tesla.
Speaker 1: It is set to report earnings after the bell. The
Speaker 1: quarter was a busy one, but the re engagement of
Speaker 1: CEO Elon Musk the launch of the company's robot taxi
Speaker 1: service in Austin the most Creatrudell is here to tell.
Speaker 3: Us well, whether investors are going to care about the.
Speaker 1: F fundamental business picture, which is an ugly one. We're
Speaker 1: expecting revenues to fool the most severely in more than
Speaker 1: a decade.
Speaker 14: Yeah, and I think, you know, we only have to
Speaker 14: go back a quarter for you know how Musk is
Speaker 14: likely to approach you know tonight's call where you know,
Speaker 14: he said something to the effect of kind of look,
Speaker 14: don't don't look at what's going on now, cast your
Speaker 14: gaze on you know, this bright shiny object on a hill.
Speaker 13: Uh.
Speaker 14: You know that that is likely what we're going to
Speaker 14: have a sort of repeat of here, because this is
Speaker 14: a company that it's it's fundamentals are in really rough shape.
Speaker 9: Uh.
Speaker 14: You know the car business. Uh, not only is it
Speaker 14: is it not growing anymore, but it's actually shrinking pretty substantially.
Speaker 14: And you know, they did indicate earlier this year that
Speaker 14: the energy business, which has been a source of growth,
Speaker 14: is going to get hit hardest by by tariff. So
Speaker 14: you know, the the leaning into the robotaxi messaging, the
Speaker 14: AI story is absolutely what we can expect to hear
Speaker 14: from Musk tonight.
Speaker 1: It's also not just tarifs that they're exposed to, but
Speaker 1: are pulling away of support for ev measures. Does that
Speaker 1: ultimately matter when you're thinking of a company that is
Speaker 1: valued at one hundred and forty two times projective profit?
Speaker 1: Do they care about what happens from a support perspective
Speaker 1: for buying.
Speaker 14: I think that's that's got to come up at some
Speaker 14: point on tonight's call, right, is where are regulatory credit
Speaker 14: revenues headed? Because there's a lot of concern particularly about
Speaker 14: you know, the state of affairs in the US where
Speaker 14: you have you know, as part of the Big Beautiful Bill,
Speaker 14: you had the zeroing out of penalties for not meeting
Speaker 14: fuel economy standards. So that sort of source of revenue
Speaker 14: where other manufacturers who are having trouble meeting those numbers
Speaker 14: they no longer need to go to Tesla for help.
Speaker 14: You know, there's also the Trump administration going after the
Speaker 14: California ZEV mandate, and you know also on the EPA
Speaker 14: front tailpipe emission standards. So really sort of across the board,
Speaker 14: there's less and less reason for Tesla's rivals to have
Speaker 14: to turn to Musk and say, hey, we need some
Speaker 14: help from a regulatory perspective.
Speaker 4: And that's been a huge source.
Speaker 14: Of revenue for this company over the years.
Speaker 1: And how much does that matter for plowing money into
Speaker 1: the future bets As Nick Kolos over at Data Trecks
Speaker 1: puts it in our story, I think ninety five percent
Speaker 1: of the valuation of Tesla is basically based on its futures,
Speaker 1: which are optimists, which are ROBOTAXI. But is that at
Speaker 1: risk if we don't have the cash cap.
Speaker 14: Yeah, I mean we're talking when we talk about just
Speaker 14: how much revenue you know, over the years, going back
Speaker 14: to you know, since this has been a public company,
Speaker 14: we're talking about over twelve billion dollars. That's a substantial
Speaker 14: amount of money, and a lot of that has is
Speaker 14: weighted towards just the last few years, where we've seen
Speaker 14: you know, steadily Tesla report more and more of this revenue.
Speaker 4: And so when you if then when you.
Speaker 14: See that reverse and also this company is no longer
Speaker 14: to generate cash from its its car business because that
Speaker 14: is no longer growing, and yet it has all of
Speaker 14: these you know, operations to tend to, you know, with
Speaker 14: with plans that are underutilize. This starts to become a
Speaker 14: real issue. And you do have to sort of question
Speaker 14: if these robotaxi statements sort of don't pan out, what
Speaker 14: what next? You know, what what can investors sort of
Speaker 14: count on, you know, from from Tesla to sort of
Speaker 14: steady things and get back to a state where you
Speaker 14: can feel comfortable putting that sort of multiple on the stock.
Speaker 1: Can they count on elon being focused on the business? Crowtidel,
Speaker 1: We thank you so much for looking ahead to after
Speaker 1: the bell, and look let's continue looking at because we've
Speaker 1: got IBM coming up as well.
Speaker 3: And it's flipping the script at the moment.
Speaker 1: This is once some relic of another era and big
Speaker 1: Blue is back.
Speaker 3: As our Brodie Ford says, let's just.
Speaker 1: Talk about how this company has steadily convinced investors that
Speaker 1: it can grow.
Speaker 6: You put it perfectly right.
Speaker 15: I mean, IBM has been talking about re orienting around
Speaker 15: software and services since the nineties. People didn't really believe
Speaker 15: them until a year or two ago, and you can
Speaker 15: see it in the stock price right that investors are
Speaker 15: really trying to starting to buy into this idea of
Speaker 15: an IBM based around largely infrastructure, software and consulting. The
Speaker 15: real star right now is that software picture, led by
Speaker 15: the acquisitions of red Hat and Hashi Corp. This year,
Speaker 15: And if you look at large scale software companies, most
Speaker 15: of them are struggling to really keep growing revenue steadily.
Speaker 15: IBM is doing it, making a better profit picture stick
Speaker 15: your business. Clearly Wall Street is happy about it.
Speaker 1: They are sending the shares up thirty percent so far
Speaker 1: this year, Brody. But the flying the ointment has been,
Speaker 1: of course global narrative of trade issues and worry about
Speaker 1: people really playing money into consultancy. How much do you
Speaker 1: think the Genai piece of that is going to be
Speaker 1: eroded because they've already done what six billion dollars in business,
Speaker 1: but largely through consulting.
Speaker 6: It's a really good point.
Speaker 15: Yeah, Consulting is the other half of the IBM empire,
Speaker 15: and that really has struggled because when the economy looks funky,
Speaker 15: what do you do, you can see your consulting projects,
Speaker 15: and so IBM has booked a lot of business and
Speaker 15: consulting for Jenai products. You know, these big companies saying, hey,
Speaker 15: which tools do we use?
Speaker 6: We're confused.
Speaker 15: What is kind of an issue is that this is
Speaker 15: coming at the expense of traditional consulting, and so it
Speaker 15: may not be a net increase. But what we've seen
Speaker 15: so far is that as long as software keeps getting purchased,
Speaker 15: investors are willing to overlook the choppy consulting.
Speaker 1: Well for now, analysts none of them say buy nine
Speaker 1: to hold, just for say, sell Bloomberg's Brodie Ford across
Speaker 1: IBM or waiting for your reporting after the bill when
Speaker 1: it breaks. But meanwhile, that does it for this edition
Speaker 1: of Bloomberg Tech. Don't forget to check out our podcast.
Speaker 1: You can find it on the terminal as well as
Speaker 1: online on Apple.
Speaker 3: Spotify, and iHeart.
Speaker 1: And don't forget to tune into Ed Ludlow as he's
Speaker 1: over in the White House, of course, listening in on
Speaker 1: the AI summit and what that will bring in terms
Speaker 1: of the look ahead from President Trump. We've also got
Speaker 1: S and P five hundred and at session highs records
Speaker 1: across the board that sack just lags a little bit,
Speaker 1: though today it is Blue Bag Tech