1 00:00:02,520 --> 00:00:13,480 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 2 00:00:13,520 --> 00:00:17,360 Speaker 1: from coast to coast with Caroline Hide in New York 3 00:00:17,600 --> 00:00:20,800 Speaker 1: and Eva Though in San Francisco. 4 00:00:22,120 --> 00:00:25,560 Speaker 2: This is Bloomberg Tech coming up. Another setback for Apple's 5 00:00:25,600 --> 00:00:28,960 Speaker 2: struggling AI efforts as one of its top executives leaves 6 00:00:29,040 --> 00:00:32,519 Speaker 2: for Meta Plus. Amazon Prime Day kicks off, but already 7 00:00:32,560 --> 00:00:34,600 Speaker 2: spending is down about fourteen percent. 8 00:00:34,920 --> 00:00:37,000 Speaker 3: We'll bring you the latest and we sit. 9 00:00:36,920 --> 00:00:39,720 Speaker 2: Down with the CEO of Core Weeve after the company's 10 00:00:39,760 --> 00:00:44,000 Speaker 2: big purchase of Core Scientific for nine billion dollars. But 11 00:00:44,080 --> 00:00:47,159 Speaker 2: first we take you to these publicly traded markets right here, 12 00:00:47,200 --> 00:00:50,880 Speaker 2: right now, just erasing earlier gains. We're now trading about 13 00:00:50,920 --> 00:00:54,680 Speaker 2: flat on the Nasdaq one hundred y Well. Clarity, it seems, 14 00:00:54,720 --> 00:00:57,280 Speaker 2: coming from President Trump on a truth social post saying 15 00:00:57,520 --> 00:01:00,440 Speaker 2: August the first, that is your deadline and will not 16 00:01:00,520 --> 00:01:02,680 Speaker 2: be extended for the impact to be. 17 00:01:02,640 --> 00:01:06,279 Speaker 3: Felt of reciprocal tariffs. Remember, an awful. 18 00:01:05,880 --> 00:01:08,919 Speaker 2: Lot of negotiation still to take place, it would seem 19 00:01:09,200 --> 00:01:11,320 Speaker 2: we also want to be digging into what's happening on 20 00:01:11,360 --> 00:01:13,520 Speaker 2: the individual stock level. I want to shine, like what's 21 00:01:13,520 --> 00:01:15,360 Speaker 2: happening in terms of Apple and Meta. We're up four 22 00:01:15,400 --> 00:01:18,600 Speaker 2: tens percent on Apple and down about three percent on Meta. 23 00:01:18,800 --> 00:01:22,040 Speaker 2: This all after once again, Meta juggernaut that is sucking 24 00:01:22,080 --> 00:01:24,760 Speaker 2: AI talent with promises of tens of millions of dollars, 25 00:01:25,080 --> 00:01:29,560 Speaker 2: takes a top executive, a top AI engineer from Apple. 26 00:01:29,959 --> 00:01:33,560 Speaker 2: Now we've already got some thoughts coming from lead investors 27 00:01:33,560 --> 00:01:36,000 Speaker 2: such as Kathy would just take a listen to what 28 00:01:36,080 --> 00:01:39,160 Speaker 2: she thought about the movement of talent to Meta. 29 00:01:39,400 --> 00:01:43,319 Speaker 4: What we've seen there is one turnover of management teams 30 00:01:43,440 --> 00:01:47,520 Speaker 4: after another, and it's all you know, Autonomous driving is 31 00:01:47,560 --> 00:01:50,880 Speaker 4: an AI project, just the largest AI project on Earth, 32 00:01:51,640 --> 00:01:55,480 Speaker 4: we believe, and so losing the talent that it has, 33 00:01:55,520 --> 00:01:58,920 Speaker 4: and as I understand it lasts another one today to 34 00:01:59,720 --> 00:02:04,680 Speaker 4: Mark Zuckerberg's top fifty. So they've had a lot of 35 00:02:04,680 --> 00:02:07,600 Speaker 4: trouble in this regard, and I think the burden of 36 00:02:07,640 --> 00:02:08,840 Speaker 4: proof is on them. 37 00:02:09,240 --> 00:02:11,760 Speaker 2: And she learned that from our own Mark German, who 38 00:02:11,840 --> 00:02:15,240 Speaker 2: broke the story of the Apple executive lead believing and 39 00:02:15,280 --> 00:02:18,919 Speaker 2: Mark just dig into whom mister Pang is and why 40 00:02:18,960 --> 00:02:20,240 Speaker 2: indeed he's left. 41 00:02:21,160 --> 00:02:25,520 Speaker 5: Yes, so Roman Pang. He is the distinguished engineer and 42 00:02:25,639 --> 00:02:29,560 Speaker 5: manager of the company's Apple Foundation Models team, Now we 43 00:02:29,600 --> 00:02:32,040 Speaker 5: talk about all these AI features, we talk about all 44 00:02:32,040 --> 00:02:36,560 Speaker 5: these AI companies, but how does generative AI actually work well? 45 00:02:36,840 --> 00:02:40,200 Speaker 5: Large language models? These are the models that actually power 46 00:02:40,320 --> 00:02:43,600 Speaker 5: this technology, and so all of these companies are racing 47 00:02:43,919 --> 00:02:46,079 Speaker 5: to get the best engineers in the world who can 48 00:02:46,120 --> 00:02:50,400 Speaker 5: develop these models, and Pang is known as probably the 49 00:02:50,400 --> 00:02:53,280 Speaker 5: best of the best. He was the most respected AI 50 00:02:53,360 --> 00:02:56,760 Speaker 5: engineer at Apple, the most respected AI executive at Apple, 51 00:02:57,120 --> 00:03:00,320 Speaker 5: and one of the most respected model engineers in the 52 00:03:00,480 --> 00:03:04,560 Speaker 5: entire artificial intelligence research community. So this is a massive 53 00:03:04,600 --> 00:03:08,679 Speaker 5: swing for Meta, a major higher by Meta, and as 54 00:03:08,720 --> 00:03:11,519 Speaker 5: big as a hired is for Meta, it's probably even 55 00:03:11,560 --> 00:03:14,440 Speaker 5: a bigger loss for Apple. Yeah, in many ways, this 56 00:03:14,560 --> 00:03:17,400 Speaker 5: was one of the guys holding everything together there. We've 57 00:03:17,440 --> 00:03:20,560 Speaker 5: known their AI features have been struggling, we know their 58 00:03:20,600 --> 00:03:23,400 Speaker 5: models have been struggling. There's a lot of background, you 59 00:03:23,400 --> 00:03:25,760 Speaker 5: can read all my articles about this as to why 60 00:03:25,760 --> 00:03:28,000 Speaker 5: they've been struggling. But this is a pretty big loss 61 00:03:28,040 --> 00:03:30,919 Speaker 5: for Apple. And I'm told in order to get paying 62 00:03:30,960 --> 00:03:34,320 Speaker 5: into Meta, they had to offer him a multi year 63 00:03:34,400 --> 00:03:37,760 Speaker 5: package worth somewhere north of two hundred million dollars. 64 00:03:38,480 --> 00:03:41,680 Speaker 2: That's an extraordinary amount mark and it paints a picture 65 00:03:41,680 --> 00:03:44,480 Speaker 2: of the commitment coming from Mark Zuckerberg, but painting the 66 00:03:44,520 --> 00:03:48,240 Speaker 2: picture of morale left over at Apple because more people 67 00:03:48,360 --> 00:03:50,840 Speaker 2: like you to leave the Foundations Model team. 68 00:03:51,560 --> 00:03:53,800 Speaker 5: I'm told there are more people likely to leave the 69 00:03:53,840 --> 00:03:57,520 Speaker 5: Apple Foundation Models team. Obviously, Paying is the most significant 70 00:03:57,560 --> 00:04:00,920 Speaker 5: AI departure from Apple since the generator of AI boom 71 00:04:01,000 --> 00:04:05,200 Speaker 5: started a few years ago. His top engineer, Tom Gunter, 72 00:04:05,680 --> 00:04:08,800 Speaker 5: he last a couple of weeks ago from the Foundation 73 00:04:08,880 --> 00:04:11,960 Speaker 5: Models team, and now Pang is leaving as well. I'm 74 00:04:12,000 --> 00:04:15,840 Speaker 5: told he'll start at Meta in the coming days, and 75 00:04:15,880 --> 00:04:21,720 Speaker 5: informed Apple yesterday that he would be leaving to Zuckerberg's company. 76 00:04:21,760 --> 00:04:24,840 Speaker 5: This certainly is the beginning I think of more departures 77 00:04:24,960 --> 00:04:28,680 Speaker 5: to your points. Apple just does not compensate in the 78 00:04:28,760 --> 00:04:33,000 Speaker 5: same way as Open AI or Meta. And what this 79 00:04:33,040 --> 00:04:36,760 Speaker 5: has done is it's raised the idea within Apple that 80 00:04:36,800 --> 00:04:39,240 Speaker 5: their points to need to start paying more to retain 81 00:04:39,279 --> 00:04:41,960 Speaker 5: these people, and so far they've shown our reluctance to 82 00:04:42,000 --> 00:04:45,000 Speaker 5: doing so. I'm told they didn't really make the counter 83 00:04:45,120 --> 00:04:48,480 Speaker 5: offer to keep paying. They didn't do much to keep them. 84 00:04:48,520 --> 00:04:52,040 Speaker 5: And when your employees being offered north of two hundred 85 00:04:52,080 --> 00:04:55,400 Speaker 5: million dollars, there's really not much you can do. These 86 00:04:55,520 --> 00:05:00,520 Speaker 5: pay packages from Meta are nearing what CEO of the 87 00:05:00,560 --> 00:05:03,720 Speaker 5: biggest public companies we're getting, So you can't really do 88 00:05:03,800 --> 00:05:06,360 Speaker 5: that for a singular manager or engineer. 89 00:05:06,839 --> 00:05:08,640 Speaker 3: Money talks, so does a vision to win. 90 00:05:08,960 --> 00:05:12,000 Speaker 2: Mark Gurman, thanks so much extraordinary reporting as always. 91 00:05:12,040 --> 00:05:13,920 Speaker 3: Meanwhile, let's get the investor. Take here. 92 00:05:13,960 --> 00:05:17,600 Speaker 2: Jed Ellebrook's with us as portfolio manager at Argent Capital Management, and. 93 00:05:17,520 --> 00:05:19,080 Speaker 3: I just want to go broader here. 94 00:05:19,400 --> 00:05:22,559 Speaker 2: The commitment that we're seeing from certain companies, take Meta, 95 00:05:22,720 --> 00:05:25,760 Speaker 2: but also Microsoft and Google. The so called hyperscaler is 96 00:05:26,000 --> 00:05:29,560 Speaker 2: to invest with such certainty in winning the so called 97 00:05:29,600 --> 00:05:32,000 Speaker 2: superintelligence race. Is this the right thing you want to 98 00:05:32,040 --> 00:05:32,880 Speaker 2: be hearing and seeing? 99 00:05:34,760 --> 00:05:35,000 Speaker 4: Yeah? 100 00:05:35,000 --> 00:05:35,560 Speaker 6: I think it is. 101 00:05:36,520 --> 00:05:40,359 Speaker 7: This is an exceptionally big money competition. It takes really 102 00:05:40,400 --> 00:05:44,479 Speaker 7: deep pockets to attract the engineering talent to get the 103 00:05:44,480 --> 00:05:48,880 Speaker 7: compute power. So the big companies are flexing their muscles 104 00:05:48,920 --> 00:05:52,280 Speaker 7: and showing great commitment, and they're seeing the demand signs 105 00:05:53,080 --> 00:05:56,080 Speaker 7: thus far that that effort is worthwhile. And I think 106 00:05:56,120 --> 00:05:58,520 Speaker 7: it's going to continue, and I think we're going to 107 00:05:58,520 --> 00:06:00,680 Speaker 7: get a really good indication of that here in a 108 00:06:00,680 --> 00:06:04,080 Speaker 7: few weeks when Microsoft reports their fiscal fourth quarter earnings, 109 00:06:04,120 --> 00:06:08,120 Speaker 7: they will announce CAPEX intentions for their next fiscal year, 110 00:06:08,160 --> 00:06:10,120 Speaker 7: and I think we're going to see another big increase, 111 00:06:10,440 --> 00:06:12,240 Speaker 7: probably not as big as last year, but still a 112 00:06:12,279 --> 00:06:14,680 Speaker 7: double digit percentage increase to a number that's north of 113 00:06:14,680 --> 00:06:15,720 Speaker 7: one hundred million dollars. 114 00:06:16,080 --> 00:06:18,040 Speaker 2: So, before I dig more into the hyperscale in the 115 00:06:18,080 --> 00:06:21,120 Speaker 2: AI trade, jed with your more than two decades of 116 00:06:21,160 --> 00:06:24,800 Speaker 2: experience managing money here in large caps, is Apple just 117 00:06:24,800 --> 00:06:27,040 Speaker 2: one that you have to view in a different manner 118 00:06:27,080 --> 00:06:30,000 Speaker 2: now the way in which the company sees future growth. 119 00:06:32,200 --> 00:06:36,400 Speaker 7: Yeah, Apple is a defensive tech business for investors. It 120 00:06:36,520 --> 00:06:39,400 Speaker 7: is not a dynamic growth business, hasn't been for some 121 00:06:39,520 --> 00:06:42,600 Speaker 7: time and won't be in the future. They're behind in 122 00:06:42,760 --> 00:06:47,000 Speaker 7: AI capabilities and talent and resources, and that is a 123 00:06:47,040 --> 00:06:50,720 Speaker 7: concern for investors. But I do think it was kind 124 00:06:50,720 --> 00:06:54,160 Speaker 7: of interesting that a week or two ago, when word 125 00:06:54,720 --> 00:06:59,359 Speaker 7: was got out that Apple was considering using anthropic and 126 00:06:59,480 --> 00:07:04,279 Speaker 7: a open AI models more for their customer interactions on 127 00:07:04,279 --> 00:07:06,200 Speaker 7: the phone, that the stock went up three or four 128 00:07:06,240 --> 00:07:10,400 Speaker 7: percent on that news. The market liked Apple de emphasizing 129 00:07:10,440 --> 00:07:12,120 Speaker 7: its own internal AI research. 130 00:07:11,760 --> 00:07:14,080 Speaker 3: Effort, and that was Mark Guman's reporting as well. 131 00:07:14,160 --> 00:07:17,200 Speaker 2: So Pivot therefore, to the companies that are committed that 132 00:07:17,320 --> 00:07:19,480 Speaker 2: are building the large language models. I know, in particular, 133 00:07:19,680 --> 00:07:21,120 Speaker 2: you think Amazon's a winner here. 134 00:07:21,200 --> 00:07:23,120 Speaker 8: Why I do. 135 00:07:23,520 --> 00:07:26,800 Speaker 7: I think that their AWS cloud computing business is very 136 00:07:26,840 --> 00:07:31,040 Speaker 7: well positioned to ride the wave of AI spending. Enterprises 137 00:07:31,280 --> 00:07:37,080 Speaker 7: are deploying AI tools on their cloud platforms, and I 138 00:07:37,120 --> 00:07:41,480 Speaker 7: think that AWS, Azure, and GCP all have really outstanding 139 00:07:41,520 --> 00:07:43,600 Speaker 7: growth prospects. And I guess we should throw Oracle in 140 00:07:43,640 --> 00:07:44,200 Speaker 7: there as well. 141 00:07:44,680 --> 00:07:49,000 Speaker 2: Interesting that Oracle is also navigating a future of more 142 00:07:49,080 --> 00:07:51,880 Speaker 2: hurdles when it comes to accessing chips by the country. 143 00:07:51,880 --> 00:07:53,800 Speaker 2: You think of Oracle, which has been investing a lot 144 00:07:53,840 --> 00:07:57,120 Speaker 2: in Malaysia, for example, And we understand from reporting here 145 00:07:57,120 --> 00:07:59,480 Speaker 2: at Bloomberg that maybe the administration is going to make 146 00:07:59,520 --> 00:08:01,800 Speaker 2: it harder and get your own video chips into countries 147 00:08:01,840 --> 00:08:04,480 Speaker 2: such as this without licenses. But I'm also interested more 148 00:08:04,480 --> 00:08:07,040 Speaker 2: broadly about how any of these tech giants are navigating 149 00:08:07,040 --> 00:08:10,520 Speaker 2: the current trade environment. We've just had the latest headline 150 00:08:10,520 --> 00:08:12,400 Speaker 2: out of President Trump that August the first is where 151 00:08:12,440 --> 00:08:12,960 Speaker 2: he's sticking. 152 00:08:14,880 --> 00:08:17,080 Speaker 7: Yeah, I think he said. I think he said the 153 00:08:17,080 --> 00:08:19,160 Speaker 7: opposite more or less yesterday. So it's hard to put 154 00:08:19,200 --> 00:08:21,720 Speaker 7: too much stock in one day's worth of comments from him. 155 00:08:21,960 --> 00:08:27,000 Speaker 7: But yeah, the big tech companies have incredible advantages. Their 156 00:08:27,040 --> 00:08:30,080 Speaker 7: balance sheets are incredibly strong, They're producing prodigious cash flow, 157 00:08:31,120 --> 00:08:33,600 Speaker 7: and they have you know, all the AI capabilities that 158 00:08:33,600 --> 00:08:36,760 Speaker 7: we listed earlier, So they're ready to flex those muscles. 159 00:08:36,760 --> 00:08:40,680 Speaker 7: They are ready to pivot and adjust, and I think 160 00:08:40,679 --> 00:08:43,760 Speaker 7: that they're all really well positioned to succeed. AI is 161 00:08:43,760 --> 00:08:45,559 Speaker 7: a big money game, and is. 162 00:08:45,480 --> 00:08:48,079 Speaker 2: It one you want to commit more money to at 163 00:08:48,080 --> 00:08:50,439 Speaker 2: this moment? Jed, we're basically near record highes. 164 00:08:52,160 --> 00:08:52,400 Speaker 5: Yeah. 165 00:08:52,480 --> 00:08:54,440 Speaker 7: I think for some of them the answer is yes. 166 00:08:54,480 --> 00:08:58,000 Speaker 7: You know, meta valuation is higher than normal. I think 167 00:08:58,040 --> 00:08:59,880 Speaker 7: maybe that's one where you don't need to rush into 168 00:08:59,920 --> 00:09:02,160 Speaker 7: it right now. But I think others are you know, 169 00:09:02,240 --> 00:09:07,400 Speaker 7: fairly compelling. Amazon, like I said, is our personal favorite Microsoft. 170 00:09:07,440 --> 00:09:09,040 Speaker 7: Is that a huge run up here in the last 171 00:09:09,040 --> 00:09:10,800 Speaker 7: month and a half. Maybe no need to rush on 172 00:09:10,840 --> 00:09:14,280 Speaker 7: that one. In Nvidia, I think is pretty compelling, you know, 173 00:09:14,440 --> 00:09:16,840 Speaker 7: exceptionally strong competitive. 174 00:09:16,280 --> 00:09:18,160 Speaker 6: Position with the GPU chips. 175 00:09:18,200 --> 00:09:22,120 Speaker 7: They they just sent out Blackwell Ultra, the first one 176 00:09:22,160 --> 00:09:23,520 Speaker 7: into the wild last week. 177 00:09:24,080 --> 00:09:24,640 Speaker 6: That's going to be. 178 00:09:24,679 --> 00:09:28,240 Speaker 7: An incredibly compelling product for enterprises and hyper scalers to 179 00:09:28,280 --> 00:09:30,800 Speaker 7: put in their data center. So yeah, there are places, 180 00:09:30,800 --> 00:09:32,880 Speaker 7: I think where you can put money to work confidently 181 00:09:32,960 --> 00:09:35,160 Speaker 7: today in businesses that are AI beneficiaries. 182 00:09:35,280 --> 00:09:37,079 Speaker 2: They said out into the world to call weave. And 183 00:09:37,120 --> 00:09:38,720 Speaker 2: we've got the core vav CEO coming on a little 184 00:09:38,720 --> 00:09:41,160 Speaker 2: bit later in the show. But Jen, last question for you. 185 00:09:41,320 --> 00:09:43,319 Speaker 2: Is it all about American exceptionalism here? 186 00:09:43,320 --> 00:09:43,600 Speaker 3: Still? 187 00:09:45,720 --> 00:09:48,920 Speaker 7: Yeah, it's such an interesting investing environment today. We have, 188 00:09:49,360 --> 00:09:53,760 Speaker 7: you know, I think a fairly moderate growth US economy, 189 00:09:54,000 --> 00:09:56,800 Speaker 7: but with an AI revolution over here on the side 190 00:09:57,040 --> 00:10:00,200 Speaker 7: that is very compelling is going to continue I think 191 00:10:00,240 --> 00:10:03,720 Speaker 7: for quite some time, both the investment and then you know, 192 00:10:03,760 --> 00:10:08,839 Speaker 7: the inference demand, the software deployment of these tools. So yeah, 193 00:10:08,920 --> 00:10:12,559 Speaker 7: I think I think that the outlook for US stock markets, 194 00:10:12,920 --> 00:10:15,480 Speaker 7: for tech stocks in particular, is pretty bright. 195 00:10:16,280 --> 00:10:19,520 Speaker 2: Urgent Capital Management, Jed Eliver, it's been great having your perspective. 196 00:10:19,520 --> 00:10:20,120 Speaker 3: Thank you. 197 00:10:20,160 --> 00:10:21,760 Speaker 2: No, let's shift gears and look at what the shares 198 00:10:21,760 --> 00:10:24,880 Speaker 2: of Samsung currently doing trading in London as we speak ADRs, 199 00:10:25,320 --> 00:10:28,400 Speaker 2: and look they are down by eight ten percent. Profit 200 00:10:28,480 --> 00:10:31,040 Speaker 2: fell for the first time since twenty twenty three. In fact, 201 00:10:31,120 --> 00:10:33,880 Speaker 2: it plummeted fifty six percent. This is once again about 202 00:10:33,880 --> 00:10:36,720 Speaker 2: the chip maker not managing to win when it comes 203 00:10:36,760 --> 00:10:38,720 Speaker 2: to high bandwidth memory yet. 204 00:10:39,040 --> 00:10:39,960 Speaker 3: But is this the bottom? 205 00:10:40,000 --> 00:10:42,920 Speaker 2: Some analysts feeling that way, investors feeling that way, particularly 206 00:10:42,920 --> 00:10:45,920 Speaker 2: over at CLSA, and notably, we keep an eye on 207 00:10:45,960 --> 00:10:47,880 Speaker 2: how these companies perform out of their earnings. 208 00:10:48,200 --> 00:10:49,200 Speaker 3: Meanwhile, coming up. 209 00:10:49,160 --> 00:10:53,040 Speaker 2: President Trump unveils a wave of letters again threatening key 210 00:10:53,080 --> 00:10:56,280 Speaker 2: trading partners with high tariff rate impact on big tech 211 00:10:56,320 --> 00:10:57,079 Speaker 2: is coming up next for you. 212 00:10:57,440 --> 00:10:58,800 Speaker 3: This is Greenberg Tech. 213 00:11:12,640 --> 00:11:16,800 Speaker 2: Wednesday was the original tariff deadline, but less than a 214 00:11:16,840 --> 00:11:19,880 Speaker 2: handful of agreements are ready to announce, and President Trump 215 00:11:19,920 --> 00:11:23,199 Speaker 2: instead is now saying his new August first tariff deadline 216 00:11:23,440 --> 00:11:26,080 Speaker 2: will not be extended. Let's get to the latest bluegg's 217 00:11:26,160 --> 00:11:28,839 Speaker 2: Balance of Power host Kaylee Lines is with us taking 218 00:11:28,880 --> 00:11:31,400 Speaker 2: to truth social to well try and tell us this 219 00:11:31,480 --> 00:11:32,400 Speaker 2: commitment to this one. 220 00:11:33,800 --> 00:11:34,040 Speaker 4: Yeah. 221 00:11:34,040 --> 00:11:36,400 Speaker 9: This is after he was asked at the White House 222 00:11:36,480 --> 00:11:39,280 Speaker 9: yesterday Caroline if this was a firm deadline, and he 223 00:11:39,320 --> 00:11:42,480 Speaker 9: said yes, August versus firm, though not one hundred percent firm, 224 00:11:42,520 --> 00:11:45,520 Speaker 9: indicating some degree of flexibility. And it seems that's what 225 00:11:45,559 --> 00:11:48,080 Speaker 9: he's trying to course correct for with this true social 226 00:11:48,120 --> 00:11:51,400 Speaker 9: post today, saying that on August first, tariffs will start 227 00:11:51,440 --> 00:11:53,400 Speaker 9: being paid. He says, there has been no change to 228 00:11:53,440 --> 00:11:56,040 Speaker 9: that date, and there will be no change to that date. 229 00:11:56,080 --> 00:11:57,960 Speaker 9: I would just keep in mind that initially he had 230 00:11:58,000 --> 00:12:00,320 Speaker 9: suggested there wouldn't be a change to the July ninth 231 00:12:00,400 --> 00:12:03,199 Speaker 9: date either, and that is the action he signed yesterday 232 00:12:03,240 --> 00:12:05,920 Speaker 9: to extend the deadline from July ninth to August first 233 00:12:05,960 --> 00:12:08,360 Speaker 9: for various trading partners that we don't have trade deals 234 00:12:08,400 --> 00:12:11,600 Speaker 9: with yet. He of course, yesterday wrote fourteen letters and 235 00:12:11,679 --> 00:12:14,560 Speaker 9: sent them to the heads of fourteen different countries outlining 236 00:12:14,559 --> 00:12:16,760 Speaker 9: the tariff rate that they will start paying next month 237 00:12:16,760 --> 00:12:19,200 Speaker 9: in the absence of a deal, ranging from twenty five 238 00:12:19,240 --> 00:12:22,000 Speaker 9: percent for countries like Japan and South Korea up to 239 00:12:22,080 --> 00:12:25,880 Speaker 9: forty percent for countries like Mianmark and Laos. So he 240 00:12:25,960 --> 00:12:28,320 Speaker 9: did say in the letter that if countries would like 241 00:12:28,360 --> 00:12:31,720 Speaker 9: to open their financial markets eliminate tariff and non tariff barriers, 242 00:12:31,760 --> 00:12:34,559 Speaker 9: the tariff set out in the letter could be revisited, 243 00:12:34,559 --> 00:12:37,800 Speaker 9: so still leaving some wiggle room for negotiations here. The President, 244 00:12:37,840 --> 00:12:40,640 Speaker 9: also in on Tru's Social today, is saying additional letters 245 00:12:40,840 --> 00:12:43,800 Speaker 9: will be sent today, tomorrow and for the next short 246 00:12:43,840 --> 00:12:46,040 Speaker 9: period of time. So we do expect to get news 247 00:12:46,040 --> 00:12:48,800 Speaker 9: on new tariff rates that are set on various countries, 248 00:12:48,840 --> 00:12:51,240 Speaker 9: and we also could still see news on deals. Our 249 00:12:51,320 --> 00:12:54,280 Speaker 9: understanding is that deals are getting closer for countries like India, 250 00:12:54,800 --> 00:12:57,840 Speaker 9: for Taiwan, for the European Union as well. Signals that 251 00:12:57,880 --> 00:12:59,880 Speaker 9: there has been progress there. It's just not clear when 252 00:13:00,040 --> 00:13:02,920 Speaker 9: may be announced, in how robust they will be, or 253 00:13:02,920 --> 00:13:05,280 Speaker 9: whether or not. It's really just trade frameworks we're talking 254 00:13:05,360 --> 00:13:09,000 Speaker 9: about here, knowing that the team that the administration has 255 00:13:09,000 --> 00:13:11,520 Speaker 9: put together to work on these has struggled to make 256 00:13:11,559 --> 00:13:13,960 Speaker 9: progress in a lot of arenas, not only because it's 257 00:13:14,200 --> 00:13:16,440 Speaker 9: about the teri free countries could pay overall, but there's 258 00:13:16,440 --> 00:13:20,240 Speaker 9: also sectoral tariffs to contend with existing ones like tariffs 259 00:13:20,280 --> 00:13:24,200 Speaker 9: on autos and steel and aluminum, for example, but also 260 00:13:24,240 --> 00:13:26,400 Speaker 9: ones that have been threatened that have opened Section two 261 00:13:26,440 --> 00:13:30,400 Speaker 9: thirty two investigations into them, like semiconductors and pharmaceuticals, and 262 00:13:30,440 --> 00:13:32,480 Speaker 9: that could be a sticking point in all of these talks. 263 00:13:32,480 --> 00:13:35,640 Speaker 2: Caroline, and of course semiconductor's key to this audience putting bags, 264 00:13:35,679 --> 00:13:38,040 Speaker 2: Kaylee lines, thank you so much. Now let's bring in 265 00:13:38,080 --> 00:13:40,400 Speaker 2: Michelle Guider now from more perspectives, she is the CEO 266 00:13:40,520 --> 00:13:43,680 Speaker 2: of the Kruck Institute for Tech Diplomacy over at Purdue. 267 00:13:43,960 --> 00:13:46,440 Speaker 2: You served as an Assistant Secretary of State for Global 268 00:13:46,480 --> 00:13:49,240 Speaker 2: Public Affairs under the first Trump administration that was twenty 269 00:13:49,280 --> 00:13:52,840 Speaker 2: eighteen to twenty twenty. And Michelle, what the big picture 270 00:13:52,840 --> 00:13:55,240 Speaker 2: we need to remind ourselves is what the ultimate goal 271 00:13:55,360 --> 00:13:57,880 Speaker 2: is here. Yes, they might have to push back deadlines, 272 00:13:57,880 --> 00:13:59,800 Speaker 2: but the aim is to have fairer trade. 273 00:14:00,000 --> 00:14:01,960 Speaker 3: Oh, we actually be getting to that point. 274 00:14:03,320 --> 00:14:06,560 Speaker 6: You're so right, Caroline. The big picture is really important here. 275 00:14:06,600 --> 00:14:09,800 Speaker 6: So let's remember that tariffs are a tool that are 276 00:14:09,960 --> 00:14:12,760 Speaker 6: a means to an end of a very big objective here, 277 00:14:12,760 --> 00:14:16,400 Speaker 6: and that is for America to both design and physically 278 00:14:16,440 --> 00:14:19,400 Speaker 6: build the technology infrastructure that is going to be the 279 00:14:19,440 --> 00:14:22,800 Speaker 6: backbone of the free world in the next century. And 280 00:14:22,840 --> 00:14:25,160 Speaker 6: so in order to do that, we have to build 281 00:14:25,200 --> 00:14:28,160 Speaker 6: and in some cases rebuild a lot of critical industries 282 00:14:28,200 --> 00:14:31,360 Speaker 6: here at home, and we have to rebalance the trade 283 00:14:31,400 --> 00:14:33,720 Speaker 6: ecosystem in order to do that, because the current system 284 00:14:33,800 --> 00:14:39,000 Speaker 6: right now disincentivises our leadership and critical industry. It rewards offshoring, 285 00:14:39,120 --> 00:14:43,080 Speaker 6: it punishes production here at home, and ultimately exports leadership 286 00:14:43,120 --> 00:14:46,320 Speaker 6: in a lot of really important industries to countries overseas, 287 00:14:47,000 --> 00:14:48,600 Speaker 6: and that can't be the case if we're going to 288 00:14:48,720 --> 00:14:51,160 Speaker 6: lead in the new technology era. And I'll give you 289 00:14:51,160 --> 00:14:54,360 Speaker 6: a really good example. For the AI revolution to happen, 290 00:14:54,400 --> 00:14:56,120 Speaker 6: we have to build a lot of data centers, and 291 00:14:56,120 --> 00:14:58,120 Speaker 6: in the pipeline at the end of twenty twenty four, 292 00:14:58,480 --> 00:15:01,960 Speaker 6: we had fifty two million square feet of data centers 293 00:15:01,960 --> 00:15:04,040 Speaker 6: that we have to build in the United States. Do 294 00:15:04,080 --> 00:15:07,120 Speaker 6: you know how much steel that that requires. It's billions 295 00:15:07,160 --> 00:15:09,960 Speaker 6: and billions of dollars of steel. How great for that 296 00:15:10,160 --> 00:15:14,440 Speaker 6: to be built by American companies with American workers, rather 297 00:15:14,560 --> 00:15:19,200 Speaker 6: than from artificially cheap steel from international partners overseas. So 298 00:15:19,240 --> 00:15:22,520 Speaker 6: that's what's at sake. It's American leadership in many critical 299 00:15:22,600 --> 00:15:24,600 Speaker 6: industries are going to be good for us, and it's 300 00:15:24,600 --> 00:15:25,720 Speaker 6: going to be good for our allies. 301 00:15:26,240 --> 00:15:29,480 Speaker 2: Many would say, though, taking out of chips, looking at 302 00:15:29,520 --> 00:15:34,320 Speaker 2: defense for example, or indeed looking at magnets and electric 303 00:15:34,440 --> 00:15:37,200 Speaker 2: vehicles and the electrification of our economy here in the 304 00:15:37,280 --> 00:15:41,960 Speaker 2: United States, we yet need more clarity on ultimate demand 305 00:15:42,320 --> 00:15:45,400 Speaker 2: hearing time and time again than the defense tech startups 306 00:15:45,400 --> 00:15:48,040 Speaker 2: that they need the DoD to actually buy the stuff 307 00:15:48,080 --> 00:15:50,640 Speaker 2: commit to we're hearing time and time again that we 308 00:15:50,760 --> 00:15:53,600 Speaker 2: can't start extracting rare earth that we don't have access 309 00:15:53,640 --> 00:15:55,880 Speaker 2: to in the United States yet because there's not clarity 310 00:15:55,920 --> 00:15:58,840 Speaker 2: on whether the energy field will already transition the way 311 00:15:58,840 --> 00:16:01,080 Speaker 2: that they thought, particularly as you see the big beautiful 312 00:16:01,080 --> 00:16:03,760 Speaker 2: bill as so cooled, seeming to drown out some of 313 00:16:03,800 --> 00:16:06,960 Speaker 2: that movement to electrifications. So, Michelle, how did they garner 314 00:16:07,320 --> 00:16:09,040 Speaker 2: clarity and security here? 315 00:16:10,240 --> 00:16:13,000 Speaker 6: Well, when it comes to clarity and it comes to certainty, 316 00:16:13,120 --> 00:16:15,840 Speaker 6: I don't think there was anything more certain than the 317 00:16:15,880 --> 00:16:18,360 Speaker 6: fact that tariffs were coming. When Donald Trump was re 318 00:16:18,440 --> 00:16:21,400 Speaker 6: elected president. It was a core pillar of his first administration. 319 00:16:21,480 --> 00:16:25,040 Speaker 6: When I served as Assistant secretary, Fair and reciprocal trade 320 00:16:25,160 --> 00:16:27,720 Speaker 6: was a core message that we were communicating to every 321 00:16:27,760 --> 00:16:30,240 Speaker 6: international partner in one hundred and eighty five missions across 322 00:16:30,240 --> 00:16:32,840 Speaker 6: the world. And you can even go back to nineteen 323 00:16:32,920 --> 00:16:35,800 Speaker 6: eighty eight. There's a interview that Donald Trump did with 324 00:16:35,840 --> 00:16:40,440 Speaker 6: Oprah Winfrey talking about how he would revamp US foreign policy, 325 00:16:40,480 --> 00:16:43,560 Speaker 6: and in that he talks about asking our allies to 326 00:16:43,640 --> 00:16:46,200 Speaker 6: pay their fair share, and he focuses on allies, he says, 327 00:16:46,200 --> 00:16:48,680 Speaker 6: because they're much easier to talk to than our enemies, 328 00:16:49,240 --> 00:16:53,080 Speaker 6: and he highlights what country. He highlights Japan, and he 329 00:16:53,120 --> 00:16:56,520 Speaker 6: talks about how they're dumping cars and dumping VCRs into 330 00:16:56,560 --> 00:16:58,760 Speaker 6: the American market. At the same time they're making it 331 00:16:58,760 --> 00:17:00,600 Speaker 6: really hard for Americans to do BIS. So this has 332 00:17:00,640 --> 00:17:04,359 Speaker 6: been a long time coming, but we're trying to rebalance 333 00:17:04,400 --> 00:17:07,439 Speaker 6: a trade system that's existed for fifty sixty, seventy, in 334 00:17:07,480 --> 00:17:11,119 Speaker 6: some cases eighty years across ninety countries. It's going to 335 00:17:11,160 --> 00:17:13,440 Speaker 6: take some time, and some deadlines are going to be pushed, 336 00:17:13,440 --> 00:17:15,560 Speaker 6: and it's going to be a little bit messy. But 337 00:17:15,880 --> 00:17:18,680 Speaker 6: at the end of this, if American America can come 338 00:17:18,720 --> 00:17:23,280 Speaker 6: out leading in critical industries, that'll give really good certainty 339 00:17:23,320 --> 00:17:24,920 Speaker 6: to our businesses in the long term. 340 00:17:25,160 --> 00:17:27,600 Speaker 2: Should if we've got the talent to be able to 341 00:17:27,640 --> 00:17:31,000 Speaker 2: do the manufacturing here, particularly as we look at making 342 00:17:31,119 --> 00:17:34,560 Speaker 2: H one BVS is tougher, for example, I'd. 343 00:17:34,400 --> 00:17:38,640 Speaker 6: Say yes, and we would benefit from all the brilliant 344 00:17:38,680 --> 00:17:41,920 Speaker 6: talent from across the world. The Crock Institute is based 345 00:17:41,960 --> 00:17:45,480 Speaker 6: at Purdue University. It is the largest engineering school in 346 00:17:45,520 --> 00:17:48,520 Speaker 6: the country, graduates more engineers than any other top university 347 00:17:48,520 --> 00:17:52,119 Speaker 6: in the countries. It's engineering excellence at scale that type 348 00:17:52,119 --> 00:17:56,280 Speaker 6: of talent is ready for national security jobs in commercial 349 00:17:56,280 --> 00:17:58,600 Speaker 6: industries and in defense industries that are going to matter 350 00:17:58,640 --> 00:18:01,359 Speaker 6: to our leadership in the twenty for a century, and 351 00:18:01,400 --> 00:18:03,719 Speaker 6: the same is true in many other places across the country. 352 00:18:03,720 --> 00:18:05,399 Speaker 6: So we have the talent. What we need to do 353 00:18:05,480 --> 00:18:09,840 Speaker 6: is incentivize the economic landscape and the trade landscape in 354 00:18:09,920 --> 00:18:11,080 Speaker 6: order to let them flourish. 355 00:18:11,359 --> 00:18:13,440 Speaker 2: Michelle Geider, great to catch up with you at the 356 00:18:13,480 --> 00:18:17,600 Speaker 2: Crack Institute for Tech Dipromacy over at Purdue. Now coming up, 357 00:18:17,840 --> 00:18:21,240 Speaker 2: Amazon's Prime Day is kicked off, but shoppers they might 358 00:18:21,320 --> 00:18:24,159 Speaker 2: not see the heavy discounts like years prior. We're on 359 00:18:24,200 --> 00:18:26,520 Speaker 2: that next. This is Bloomberg Tech. 360 00:18:42,000 --> 00:18:42,240 Speaker 3: Time. 361 00:18:42,320 --> 00:18:45,439 Speaker 2: Now for talking tech and first up, your sensitive data 362 00:18:45,920 --> 00:18:49,080 Speaker 2: or should from today be safer? After a Justice Department 363 00:18:49,160 --> 00:18:51,719 Speaker 2: rule takes effect today after an end of a ninety 364 00:18:51,800 --> 00:18:55,359 Speaker 2: day grace period. Now companies across sectors must now comply 365 00:18:55,480 --> 00:18:58,520 Speaker 2: to the safeguard of bulk transfers and sensitive data from 366 00:18:58,600 --> 00:19:02,159 Speaker 2: countries the post of National Security risk, including China and Iran, 367 00:19:02,720 --> 00:19:05,600 Speaker 2: plus Epic Games. While it is settled an anti trust 368 00:19:05,640 --> 00:19:08,639 Speaker 2: case against Samsung alleging that the company was conspiring with 369 00:19:08,680 --> 00:19:11,040 Speaker 2: Google in blocking rival at marketplaces. 370 00:19:11,240 --> 00:19:13,480 Speaker 3: By default, Epic dismissed all. 371 00:19:13,320 --> 00:19:16,600 Speaker 2: Anti trust claims against Samsung and Google, but Google remains 372 00:19:16,720 --> 00:19:20,880 Speaker 2: defendant on several non anti trust claims. And some brands 373 00:19:20,880 --> 00:19:24,400 Speaker 2: and consumers are sitting out on this year's Amazon Prime Day. 374 00:19:24,480 --> 00:19:27,760 Speaker 2: Is President Trump's trade wark really rattles shopping sentiment? Some 375 00:19:27,920 --> 00:19:31,480 Speaker 2: mergents are actually unable to offer discounts due to increased 376 00:19:31,480 --> 00:19:35,080 Speaker 2: costs from tariffs. Some shoppers, well, they're planning to skip 377 00:19:35,119 --> 00:19:36,000 Speaker 2: Prime Day altogether. 378 00:19:36,240 --> 00:19:38,240 Speaker 3: Prime Day spending has already fallen. 379 00:19:38,480 --> 00:19:41,800 Speaker 2: It currently seems fourteen percent in early hours compared to 380 00:19:41,840 --> 00:19:44,639 Speaker 2: twenty twenty four. So let's get to it, Bloomberg, Spenser's 381 00:19:44,640 --> 00:19:46,160 Speaker 2: Soapa and give us the inside track. 382 00:19:46,320 --> 00:19:47,960 Speaker 3: Is it all about tariff's here, Spencer? 383 00:19:49,640 --> 00:19:52,119 Speaker 10: Yeah, tariffs are definitely a key factor. This is like 384 00:19:52,119 --> 00:19:55,840 Speaker 10: our first Prime Day, you know, since Trump's President Trump's 385 00:19:55,880 --> 00:19:59,520 Speaker 10: Liberation Day tariffs, and that really just created Even though 386 00:20:00,040 --> 00:20:01,479 Speaker 10: a lot of the tariffs are still on again, off 387 00:20:01,480 --> 00:20:04,360 Speaker 10: again and being negotiated, it's just this cloud of uncertainty 388 00:20:04,720 --> 00:20:07,760 Speaker 10: that has forced a lot of businesses to just be cautious. 389 00:20:07,920 --> 00:20:11,160 Speaker 10: You know, how much inventory do we have in the country. 390 00:20:11,160 --> 00:20:12,959 Speaker 10: Do we really want to discount it? That deeply if 391 00:20:12,960 --> 00:20:15,560 Speaker 10: we're trying to protect our margins from tires down the road. 392 00:20:15,640 --> 00:20:17,680 Speaker 10: So all of that stuff is kind of weighing down 393 00:20:18,119 --> 00:20:19,560 Speaker 10: on Prime Day this year. 394 00:20:19,760 --> 00:20:22,520 Speaker 2: So why they're making it so long, such an extended period, 395 00:20:22,600 --> 00:20:25,320 Speaker 2: and what ultimately do you think they'll end up offering here. 396 00:20:26,480 --> 00:20:29,600 Speaker 10: That's a really great question. So Prime Day started as 397 00:20:29,640 --> 00:20:32,119 Speaker 10: one day, you know, when they started in twenty fifteen, 398 00:20:32,160 --> 00:20:34,680 Speaker 10: and it gradually got longer. It was two days last year, 399 00:20:34,760 --> 00:20:37,320 Speaker 10: now it's four days this year. The best thing to 400 00:20:37,320 --> 00:20:39,439 Speaker 10: see is that like a lot of their competitors, like 401 00:20:39,480 --> 00:20:41,760 Speaker 10: Walmart has like a six day sale, and I think 402 00:20:42,040 --> 00:20:45,800 Speaker 10: Target has a week long sale that they might. Amazon's 403 00:20:45,880 --> 00:20:48,520 Speaker 10: likely looking at those and saying, okay, let's just extend 404 00:20:48,520 --> 00:20:51,440 Speaker 10: the number of days and prevent us from losing sale 405 00:20:51,560 --> 00:20:55,480 Speaker 10: to a lot of these competitors, and especially competitors like 406 00:20:55,520 --> 00:21:01,719 Speaker 10: Walmart and Target. The appetite is really strong for everyday 407 00:21:01,800 --> 00:21:05,880 Speaker 10: essentials things like snack packs for lunchboxes. So Amazon needs 408 00:21:05,960 --> 00:21:08,400 Speaker 10: to to fight them on the you know, the grocery 409 00:21:08,440 --> 00:21:10,680 Speaker 10: aisle as much as for electronics. 410 00:21:11,119 --> 00:21:13,720 Speaker 2: Yeah, and when you think of electronics, you will immediately 411 00:21:13,800 --> 00:21:17,240 Speaker 2: think of China. Just more broadly, how have the companies 412 00:21:17,280 --> 00:21:20,840 Speaker 2: you speak to the SELVI Amazon been navigating me on again, 413 00:21:20,920 --> 00:21:22,720 Speaker 2: off again, feeling around tariffs. 414 00:21:23,840 --> 00:21:26,399 Speaker 10: Well right now in terms of Prime Day, we're seeing 415 00:21:26,440 --> 00:21:30,400 Speaker 10: Apple is going very hard on discounts, you know, very 416 00:21:30,520 --> 00:21:34,120 Speaker 10: very deep discounts. I spoke with the Crazy Coupon Lady earlier. 417 00:21:34,160 --> 00:21:36,399 Speaker 10: They kind of track all of these deals, you know, 418 00:21:36,480 --> 00:21:38,760 Speaker 10: and they use They used Black Friday last year as 419 00:21:38,760 --> 00:21:41,119 Speaker 10: at benchmark, and they're seeing Apple kind of, you know, 420 00:21:41,400 --> 00:21:44,359 Speaker 10: going even less than some of their Black Friday deals 421 00:21:44,400 --> 00:21:46,640 Speaker 10: a year ago. They call that. One thing in particular, 422 00:21:46,680 --> 00:21:51,120 Speaker 10: like app the AirPods for you know, earbudds were discounted 423 00:21:51,200 --> 00:21:55,399 Speaker 10: very steeply, but then you contrast that with Amazon's own devices, 424 00:21:55,640 --> 00:21:57,960 Speaker 10: and the discounts on things like their echo speakers and 425 00:21:57,960 --> 00:22:02,040 Speaker 10: stuff were pretty soft. So well, we're seeing these these 426 00:22:02,040 --> 00:22:07,360 Speaker 10: companies react react differently, you know, to the tariff situation. 427 00:22:07,359 --> 00:22:09,600 Speaker 2: And question is how the shopper reacts. We'll get the 428 00:22:09,680 --> 00:22:12,439 Speaker 2: data throughout the day. Spencer SOFA brilliant to have you. 429 00:22:12,480 --> 00:22:12,800 Speaker 3: Thank you. 430 00:22:13,320 --> 00:22:15,239 Speaker 2: Coming up, we're going to be speaking with the care 431 00:22:15,320 --> 00:22:18,920 Speaker 2: We've CEO Michael and Trader under the company's nine million 432 00:22:18,920 --> 00:22:22,960 Speaker 2: dollar purchase for Core Scientific. That's next, this is Blue 433 00:22:23,000 --> 00:22:38,880 Speaker 2: meg Tech. Welcome back to Blue meg Tech. Quick check 434 00:22:38,880 --> 00:22:41,600 Speaker 2: on these markets because we're being knocked around about by 435 00:22:41,640 --> 00:22:44,440 Speaker 2: the tariff headlines. The latest coming out of President Trump 436 00:22:44,520 --> 00:22:47,200 Speaker 2: is that August the first is hard and fast. You 437 00:22:47,280 --> 00:22:50,359 Speaker 2: will see those reciprocal tariffs put into force on that date. 438 00:22:50,600 --> 00:22:52,960 Speaker 2: We're currently just off by about a ten percent. On 439 00:22:53,000 --> 00:22:54,760 Speaker 2: the upside is the likes of Tesla and in video 440 00:22:54,800 --> 00:22:57,679 Speaker 2: from a point's perspective. On the downside, Amazon drags as 441 00:22:57,680 --> 00:22:59,800 Speaker 2: we see Prime Day off to a slow start. So 442 00:23:00,160 --> 00:23:02,080 Speaker 2: is Google and Microsoft on the red. But let's look 443 00:23:02,080 --> 00:23:03,720 Speaker 2: at Data Dog for a moment, because this is a 444 00:23:03,760 --> 00:23:05,440 Speaker 2: company that's about to enter the S and P five 445 00:23:05,520 --> 00:23:07,879 Speaker 2: hundred this week. We're off by three point eight percent. 446 00:23:08,480 --> 00:23:11,240 Speaker 2: This is as we get a key downgrade from Googenheim. 447 00:23:11,520 --> 00:23:15,520 Speaker 2: Why open ai optimization risks, So they say they cut 448 00:23:15,600 --> 00:23:18,320 Speaker 2: to a cell from neutral, worrying about the longevity of 449 00:23:18,320 --> 00:23:20,879 Speaker 2: that particular client. So it says Howard Marr, So keep 450 00:23:20,880 --> 00:23:22,880 Speaker 2: an eye on that company. But remember it's rallied hard 451 00:23:22,880 --> 00:23:25,160 Speaker 2: after the news that it will be entering the big 452 00:23:25,200 --> 00:23:28,480 Speaker 2: dogs for Data Dogs. Now, let's also take a look 453 00:23:28,520 --> 00:23:31,240 Speaker 2: at the shares a core weave and core Scientific that. 454 00:23:31,400 --> 00:23:33,160 Speaker 3: Huge deal announced yesterday that. 455 00:23:33,119 --> 00:23:36,280 Speaker 2: Core Weave is indeed acquiring core Scientific in a nine 456 00:23:36,520 --> 00:23:39,399 Speaker 2: billion dollar all stock deal. Now we're currently off by 457 00:23:39,400 --> 00:23:41,040 Speaker 2: two point four percent as you'll see on core Weave 458 00:23:41,160 --> 00:23:43,280 Speaker 2: just a bit. But all of this is about boosting 459 00:23:43,359 --> 00:23:47,160 Speaker 2: Corey's infrastructure to meet the insatiable AI demand. We get 460 00:23:47,240 --> 00:23:49,160 Speaker 2: the inside track with Michael and Tracho's the core We've 461 00:23:49,280 --> 00:23:52,440 Speaker 2: CEO now on hot off the heels on this particular deal. 462 00:23:53,160 --> 00:23:55,560 Speaker 2: Why Michael go vertically integrated? 463 00:23:55,680 --> 00:23:56,760 Speaker 3: Explain it for us. 464 00:23:56,920 --> 00:24:03,160 Speaker 11: Sure, thank you for having me and uh, the the 465 00:24:03,200 --> 00:24:07,080 Speaker 11: cloud marketing at large is going through this incredible inflection 466 00:24:07,200 --> 00:24:11,679 Speaker 11: point where the the scale of what needs to be built, 467 00:24:12,000 --> 00:24:16,239 Speaker 11: the type of infrastructure that needs to be built, the 468 00:24:16,280 --> 00:24:19,199 Speaker 11: software that's required to be able to build it, all 469 00:24:19,240 --> 00:24:24,880 Speaker 11: of those things are changing in a generational way. And 470 00:24:25,320 --> 00:24:29,919 Speaker 11: when we have talked about our company, when you know, 471 00:24:29,960 --> 00:24:32,000 Speaker 11: and I have now been shy about this, I believe 472 00:24:32,040 --> 00:24:38,680 Speaker 11: that there is an opportunity to U integrate so that vertically, 473 00:24:39,000 --> 00:24:43,880 Speaker 11: so that you can deliver the best solutions to your 474 00:24:43,880 --> 00:24:50,720 Speaker 11: clients that are the largest, most sophisticated consumers of this infrastructure. 475 00:24:51,119 --> 00:24:54,240 Speaker 11: And so we we you know earlier this year, you 476 00:24:54,280 --> 00:24:57,439 Speaker 11: saw us move up the stack with the acquisition of 477 00:24:57,520 --> 00:25:03,000 Speaker 11: weights and biases, where we an extension on the software 478 00:25:03,040 --> 00:25:06,200 Speaker 11: that we have right, so our software is like really 479 00:25:06,240 --> 00:25:14,800 Speaker 11: focused on orchestration and monitoring of the GBUS. As you 480 00:25:14,800 --> 00:25:17,600 Speaker 11: move up the stack into weights and bias, it connects 481 00:25:17,600 --> 00:25:19,800 Speaker 11: closer to the clients, and if you move down the stack, 482 00:25:20,560 --> 00:25:24,119 Speaker 11: you're down into the physical data centers, the power requirements, 483 00:25:24,119 --> 00:25:24,480 Speaker 11: all of those. 484 00:25:24,600 --> 00:25:27,920 Speaker 2: I think people the investibate saw weights and biases as 485 00:25:28,160 --> 00:25:31,919 Speaker 2: margin a creative, as more able to really bring the 486 00:25:31,920 --> 00:25:35,560 Speaker 2: profitability to bear. But many worry and I cite for example, 487 00:25:35,600 --> 00:25:38,520 Speaker 2: Stifel downgrading the stocks. They seem positive on the long 488 00:25:38,600 --> 00:25:42,520 Speaker 2: term idea of this purchase of core scientific but a 489 00:25:42,640 --> 00:25:47,160 Speaker 2: vertical data center provider changes the valuation structure from their perspective. 490 00:25:47,400 --> 00:25:50,040 Speaker 2: Why go down the stack when perhaps it doesn't mean 491 00:25:50,080 --> 00:25:50,720 Speaker 2: you as profitable. 492 00:25:51,080 --> 00:25:53,879 Speaker 11: Yeah, so I would I would take an issue with 493 00:25:53,880 --> 00:25:59,760 Speaker 11: that assessment. I think that there's enormous opportunities for us 494 00:25:59,840 --> 00:26:06,120 Speaker 11: to capture margin by insourcing the infrastructure component of it. 495 00:26:06,240 --> 00:26:08,920 Speaker 11: One number two is I think that in a market 496 00:26:08,960 --> 00:26:12,240 Speaker 11: that is as dynamic as this market, is the ability 497 00:26:12,280 --> 00:26:16,280 Speaker 11: to have more physical control over your ability to build 498 00:26:16,600 --> 00:26:21,720 Speaker 11: more control over your ability to deliver infrastructure is enormously 499 00:26:21,840 --> 00:26:24,520 Speaker 11: valuable to a company like ours. And what we're doing 500 00:26:24,720 --> 00:26:29,080 Speaker 11: by integrating with Core Scientific a company that we know 501 00:26:29,320 --> 00:26:32,679 Speaker 11: very very well. We have very long standing relationships with them. 502 00:26:33,440 --> 00:26:36,120 Speaker 11: Our first contract was in twenty eighteen. 503 00:26:36,520 --> 00:26:38,320 Speaker 3: And you tried to buy them for about a billion 504 00:26:38,359 --> 00:26:38,760 Speaker 3: last year. 505 00:26:38,840 --> 00:26:41,200 Speaker 11: R We did try to buy them for last year, 506 00:26:41,960 --> 00:26:45,520 Speaker 11: and during that period we've extended our relationship with them. 507 00:26:45,560 --> 00:26:51,399 Speaker 11: We've expanded our relationship with them, and we continue to think, 508 00:26:52,080 --> 00:26:55,080 Speaker 11: as they continue to think, that the integration of the 509 00:26:55,080 --> 00:27:00,080 Speaker 11: two companies is net positive for both investor groups. And 510 00:27:00,960 --> 00:27:03,439 Speaker 11: you know, over time, we believe that that will become 511 00:27:04,119 --> 00:27:07,040 Speaker 11: incredibly clear to the investing public at large. 512 00:27:07,080 --> 00:27:09,200 Speaker 2: And let's talk about that over time perspective, because I 513 00:27:09,240 --> 00:27:11,880 Speaker 2: think Rubin roy over at Stiefel is saying, look, longer term, 514 00:27:11,920 --> 00:27:14,280 Speaker 2: he does get it, but we need to see material 515 00:27:14,680 --> 00:27:16,560 Speaker 2: margin accretion and growth benefits. 516 00:27:16,600 --> 00:27:18,639 Speaker 3: What sort of time frame are you seeing that? 517 00:27:19,160 --> 00:27:22,000 Speaker 11: Yeah, So, look, when when you insource a data center 518 00:27:22,000 --> 00:27:25,800 Speaker 11: that you have a hosting contract with where where you're 519 00:27:26,280 --> 00:27:29,960 Speaker 11: building your infrastructures, immediate right, because as soon as you 520 00:27:30,280 --> 00:27:36,160 Speaker 11: acquire them, you've moved the contract with which you're paying 521 00:27:36,160 --> 00:27:39,399 Speaker 11: them on a monthly basis into internalizing it, and so 522 00:27:39,440 --> 00:27:43,320 Speaker 11: you will see a margin and creative impact associated with 523 00:27:43,480 --> 00:27:48,000 Speaker 11: us purchasing them as soon as this deal closes. And 524 00:27:48,080 --> 00:27:52,080 Speaker 11: so once again I take issue with with with the 525 00:27:52,440 --> 00:27:55,080 Speaker 11: assessment that this is not going to be margin a cretive. 526 00:27:55,119 --> 00:27:57,000 Speaker 11: I actually think it's going to be enormously marginal and 527 00:27:57,040 --> 00:28:00,480 Speaker 11: creative for the combined companies. But I also think it's 528 00:28:00,520 --> 00:28:04,040 Speaker 11: going to be incredibly constructive for our ability to meet 529 00:28:04,040 --> 00:28:06,879 Speaker 11: the demands of the clients. And what gets lost in 530 00:28:06,920 --> 00:28:10,919 Speaker 11: this discussion sometimes is that you have a group of 531 00:28:10,960 --> 00:28:17,520 Speaker 11: clients that are moving so incredibly fast to build infrastructure 532 00:28:17,560 --> 00:28:20,840 Speaker 11: at enormous scale that they require to be able to 533 00:28:20,880 --> 00:28:24,920 Speaker 11: deliver artificial intelligence to the world, our ability to control 534 00:28:25,840 --> 00:28:29,720 Speaker 11: our destiny in terms of how we build, where we build, 535 00:28:29,720 --> 00:28:33,160 Speaker 11: when we build. By integrating the two companies, where we're 536 00:28:33,160 --> 00:28:35,480 Speaker 11: making huge strides in that direction. 537 00:28:35,200 --> 00:28:37,800 Speaker 2: And you get one point three gigawats thereabouts of the 538 00:28:37,840 --> 00:28:39,960 Speaker 2: power that's going to be in the data centers. Just 539 00:28:39,960 --> 00:28:42,240 Speaker 2: talk to us a bit about say the Oracle open 540 00:28:42,280 --> 00:28:45,000 Speaker 2: AI reported deal four and a half gigawatts is what 541 00:28:45,040 --> 00:28:47,800 Speaker 2: they seeing promised to open AI in the longer term 542 00:28:48,040 --> 00:28:51,840 Speaker 2: is not achievable. That sort of measure of scale, of power, 543 00:28:51,880 --> 00:28:53,720 Speaker 2: of necessity to go into the data. 544 00:28:53,480 --> 00:28:57,560 Speaker 11: Centers it is. It's going to take a lot of work. 545 00:28:58,240 --> 00:29:02,600 Speaker 11: It's going to take a lot of of investment. It's 546 00:29:02,640 --> 00:29:04,600 Speaker 11: going to take a lot of thought around how you 547 00:29:04,680 --> 00:29:07,320 Speaker 11: do that. And that once again leans back into the 548 00:29:07,320 --> 00:29:09,960 Speaker 11: idea that you want to vertically integrate so that you 549 00:29:10,000 --> 00:29:12,720 Speaker 11: can do it in the most efficient, most effective way. 550 00:29:12,800 --> 00:29:13,800 Speaker 3: What's the hardest work. 551 00:29:14,480 --> 00:29:17,680 Speaker 11: Oh, there's a lot of hard work here right, Like 552 00:29:18,000 --> 00:29:22,000 Speaker 11: you know, the the integration of two companies is always challenging. 553 00:29:22,160 --> 00:29:28,000 Speaker 11: The ability to continue to extend our capacity to deliver 554 00:29:28,160 --> 00:29:31,480 Speaker 11: infrastructure is always enormously challenging. 555 00:29:31,520 --> 00:29:32,800 Speaker 3: Is energy that bottlening? 556 00:29:32,880 --> 00:29:37,000 Speaker 11: That energy is a bottleneck. The you know, the pipeline 557 00:29:37,000 --> 00:29:43,920 Speaker 11: of projects within the core scientific portfolio positions us to 558 00:29:44,120 --> 00:29:48,160 Speaker 11: jointly be able to deliver infrastructure on the largest scale 559 00:29:48,160 --> 00:29:49,920 Speaker 11: in the world. And so when you when you look 560 00:29:49,960 --> 00:29:52,440 Speaker 11: back over the last several months, you know, we did 561 00:29:52,480 --> 00:29:56,320 Speaker 11: a twelve billion dollar contract, right or just under twelve 562 00:29:57,320 --> 00:30:01,800 Speaker 11: you saw the thirty billion dollar contract. The demand is voracious. 563 00:30:01,320 --> 00:30:03,240 Speaker 2: And is it just coming from Microsoft? Is it coming 564 00:30:03,280 --> 00:30:04,000 Speaker 2: from more players. 565 00:30:04,000 --> 00:30:06,840 Speaker 11: Now for you, it's coming from more players. I mean 566 00:30:06,960 --> 00:30:09,920 Speaker 11: during during our earnings, you know, you heard me talk 567 00:30:09,960 --> 00:30:13,520 Speaker 11: about the fact that we actually had a second hyperscaler 568 00:30:13,640 --> 00:30:16,080 Speaker 11: begin to come on board and use us as a 569 00:30:16,080 --> 00:30:21,040 Speaker 11: solution for building the highest quality infrastructure and delivering compute 570 00:30:21,040 --> 00:30:23,560 Speaker 11: to them. And so you're you're really starting to see 571 00:30:23,920 --> 00:30:26,360 Speaker 11: us broadening our client base, which is going to be 572 00:30:26,400 --> 00:30:28,640 Speaker 11: a work in progress for for for a long time 573 00:30:28,680 --> 00:30:32,920 Speaker 11: because there is concentration with these really large contracts. But 574 00:30:32,960 --> 00:30:39,240 Speaker 11: it's it's been a you know, incredibly important for the 575 00:30:39,280 --> 00:30:42,320 Speaker 11: whole company and for the investors in the company to 576 00:30:42,360 --> 00:30:45,480 Speaker 11: see the progress that we're making bringing on more and 577 00:30:45,520 --> 00:30:48,520 Speaker 11: more names, you know, across the enterprise space, more names 578 00:30:48,520 --> 00:30:55,560 Speaker 11: across the IDAI labs and the AI native, increasingly building 579 00:30:55,560 --> 00:30:59,080 Speaker 11: our footprint among the clouds. It's it's really been a 580 00:31:00,680 --> 00:31:03,880 Speaker 11: great indication of the demand for the product that we deliver, 581 00:31:04,160 --> 00:31:06,640 Speaker 11: and we're positioning ourselves to be able to deliver it 582 00:31:06,840 --> 00:31:07,959 Speaker 11: faster and larger. 583 00:31:08,120 --> 00:31:10,040 Speaker 2: And the share price has rocketed off the back of 584 00:31:10,080 --> 00:31:13,280 Speaker 2: it since your IPO earlier this year. But I try 585 00:31:13,320 --> 00:31:15,800 Speaker 2: and understand a little bit about the acquisition play that 586 00:31:15,840 --> 00:31:17,920 Speaker 2: you're making the fact that looks as though you're im 587 00:31:17,920 --> 00:31:18,920 Speaker 2: boltant to do more. 588 00:31:19,440 --> 00:31:21,600 Speaker 3: Where is it most important to do it? Is it 589 00:31:22,200 --> 00:31:25,160 Speaker 3: the downstack, is it hire and stack? Is it more 590 00:31:25,200 --> 00:31:26,360 Speaker 3: about the software and services? 591 00:31:26,680 --> 00:31:29,200 Speaker 11: So we really do look at it from a long 592 00:31:29,320 --> 00:31:32,160 Speaker 11: term perspective, and it's what's allowed us to build a 593 00:31:32,200 --> 00:31:36,360 Speaker 11: company that is breaking the mold to an extent in 594 00:31:36,440 --> 00:31:39,520 Speaker 11: terms of launching the AI cloud, a new cloud, a 595 00:31:39,560 --> 00:31:42,960 Speaker 11: cloud that doesn't fit into the history of the Big 596 00:31:43,000 --> 00:31:45,959 Speaker 11: three right, and that's been based on the idea that 597 00:31:46,280 --> 00:31:49,240 Speaker 11: you're making decisions about what it takes to deliver the 598 00:31:49,320 --> 00:31:53,560 Speaker 11: highest quality infrastructure and products to your clients. You will 599 00:31:53,560 --> 00:31:57,840 Speaker 11: see us continue to build up the stack. This acquisition, 600 00:31:58,200 --> 00:32:00,640 Speaker 11: of course, Scientific is an example of us going down 601 00:32:00,640 --> 00:32:02,720 Speaker 11: the stack. We have other data centers that we are 602 00:32:02,720 --> 00:32:05,880 Speaker 11: building internal to the company. You know, it's part of 603 00:32:05,920 --> 00:32:09,480 Speaker 11: this strategy of how you get to scale, because only 604 00:32:09,520 --> 00:32:13,520 Speaker 11: by getting to scale are you relevant in this revolution 605 00:32:13,680 --> 00:32:17,040 Speaker 11: that's occurring within the cloud space. And this is an 606 00:32:17,240 --> 00:32:20,400 Speaker 11: important building block, an important step for us to be 607 00:32:20,440 --> 00:32:24,080 Speaker 11: able to ensure that we are able to continue to 608 00:32:24,200 --> 00:32:27,080 Speaker 11: participate in the scale building of this infrastructure. 609 00:32:27,480 --> 00:32:29,880 Speaker 2: We loved hearing the Vision Mia Colent traitor, thanks for 610 00:32:29,920 --> 00:32:32,080 Speaker 2: coming on to join with us, is the CEO of 611 00:32:32,120 --> 00:32:34,440 Speaker 2: cour We've hot on the heels of that big deal. Meanwhile, 612 00:32:34,440 --> 00:32:37,640 Speaker 2: coming up start up Nothing is betting big on a 613 00:32:37,680 --> 00:32:40,880 Speaker 2: phone they designed to be used less then nothing, CEO, 614 00:32:41,080 --> 00:32:41,520 Speaker 2: He'll pay you. 615 00:32:41,560 --> 00:33:01,680 Speaker 3: That's next, the say is blue Bag Tech. Let's take 616 00:33:01,720 --> 00:33:02,320 Speaker 3: a quick. 617 00:33:02,160 --> 00:33:05,120 Speaker 2: Check in on Tesla shares now, because we're trying to 618 00:33:05,160 --> 00:33:07,560 Speaker 2: make up some lost ground today at least, but we 619 00:33:07,640 --> 00:33:09,880 Speaker 2: are still lower of the course of the last three 620 00:33:09,920 --> 00:33:12,560 Speaker 2: training days by more than four percent. After Elon Musk 621 00:33:12,600 --> 00:33:15,320 Speaker 2: announced he's forming a new political. 622 00:33:14,800 --> 00:33:15,880 Speaker 3: Party over the weekend. 623 00:33:15,880 --> 00:33:18,640 Speaker 2: Of course, now Ark in their CEO Kathy Wood joined 624 00:33:18,640 --> 00:33:22,160 Speaker 2: Bluemberg Surveillance earlier to weigh in on this, as some 625 00:33:22,240 --> 00:33:24,520 Speaker 2: analysts call for the company's board to get involved to 626 00:33:24,560 --> 00:33:28,160 Speaker 2: address masks politicking and whether it has hurt Tesla's standing 627 00:33:28,200 --> 00:33:29,120 Speaker 2: with car buyers. 628 00:33:30,160 --> 00:33:34,520 Speaker 4: We've been dealing with controversy around Elon Musk in one 629 00:33:34,560 --> 00:33:37,600 Speaker 4: form or another since we first bought the stock when 630 00:33:37,640 --> 00:33:40,760 Speaker 4: the company was founded in twenty fourteen, and we owned 631 00:33:40,760 --> 00:33:44,200 Speaker 4: Tesla in it's one of the top holdings in three 632 00:33:44,240 --> 00:33:49,520 Speaker 4: of our ETF so arkk W and Q so we 633 00:33:49,560 --> 00:33:51,840 Speaker 4: are watching this like a haark, no question about it. 634 00:33:51,920 --> 00:33:56,200 Speaker 4: But with the experience over the last eleven years, we 635 00:33:56,320 --> 00:34:01,120 Speaker 4: turn around today and see Tesla really not an EV 636 00:34:01,200 --> 00:34:05,840 Speaker 4: manufacturer anymore. Moving into the robotaxi age, we believe successfully 637 00:34:05,960 --> 00:34:09,120 Speaker 4: and we believe it will scale much better than most 638 00:34:09,120 --> 00:34:14,880 Speaker 4: of its competitors. We see SpaceX really only ninety percent 639 00:34:14,920 --> 00:34:20,560 Speaker 4: of all of the satellites out there, neurally transforming lives 640 00:34:20,560 --> 00:34:24,640 Speaker 4: of paralyzed people, people with als, and probably most surprising 641 00:34:24,680 --> 00:34:28,200 Speaker 4: of all, XAI. Now we own all of those again 642 00:34:28,640 --> 00:34:33,640 Speaker 4: in our venture fund, following them very carefully. XAI is 643 00:34:34,160 --> 00:34:38,680 Speaker 4: on some benchmarks. It hit a point that three pro 644 00:34:39,360 --> 00:34:42,920 Speaker 4: hit in June, it hit it in February. So you know, 645 00:34:43,400 --> 00:34:47,760 Speaker 4: we are very focused on barriers to entry technology moats 646 00:34:48,640 --> 00:34:52,440 Speaker 4: and we believe that the moats that Elon has built, 647 00:34:52,440 --> 00:34:55,799 Speaker 4: and obviously this is not just Elon. He's attracting the 648 00:34:55,840 --> 00:34:59,440 Speaker 4: best and the brightest to help solve some of the 649 00:34:59,480 --> 00:35:05,240 Speaker 4: world's biggest problems. So again we do trust the board 650 00:35:05,719 --> 00:35:10,920 Speaker 4: and the board's instincts here and we stay out of politics. 651 00:35:11,000 --> 00:35:13,279 Speaker 8: Well, we'd love your opinion on the current situation, just 652 00:35:13,320 --> 00:35:16,680 Speaker 8: on TESTA specifically, you mentioned some phenomenal companies doing some 653 00:35:17,040 --> 00:35:20,080 Speaker 8: incredible things for Tesla, though, do you believe that Elon 654 00:35:20,480 --> 00:35:23,600 Speaker 8: can pursue his political ambitions at the same time pursuing 655 00:35:23,920 --> 00:35:25,799 Speaker 8: the best interest of Tesla shareholders. 656 00:35:27,360 --> 00:35:30,879 Speaker 4: One of the announcements Elon made recently is that he 657 00:35:31,160 --> 00:35:35,440 Speaker 4: is going to oversee sales in the US and in Europe. 658 00:35:35,640 --> 00:35:40,080 Speaker 4: And when he puts his mind on something, he usually gets. 659 00:35:39,880 --> 00:35:40,640 Speaker 3: The job done. 660 00:35:42,040 --> 00:35:45,759 Speaker 2: I confess CEO and CIO Kathy with them and let's 661 00:35:45,800 --> 00:35:49,520 Speaker 2: talk about nothing. It's the hardware startup taking aim at 662 00:35:49,520 --> 00:35:52,160 Speaker 2: the big smartphone makers like Apple, like Samsung is the 663 00:35:52,200 --> 00:35:54,640 Speaker 2: latest phone three is launching. 664 00:35:54,200 --> 00:35:56,680 Speaker 3: With a design actually aimed to be used less. 665 00:35:57,040 --> 00:35:59,840 Speaker 2: Joining us now is Carl Pai Nothing co founder CEO 666 00:36:00,040 --> 00:36:01,400 Speaker 2: are in New York over from London. 667 00:36:02,160 --> 00:36:04,520 Speaker 3: Why do we need a smartphone that we use less? 668 00:36:06,640 --> 00:36:09,360 Speaker 12: Smartphones used to be these tools that were supposed to 669 00:36:09,360 --> 00:36:12,120 Speaker 12: make us more creative and more productive, just like the 670 00:36:12,160 --> 00:36:14,279 Speaker 12: personal computer. Right, it was a bicycle for the mind. 671 00:36:14,920 --> 00:36:18,400 Speaker 12: But today on smartphones we just keep doing scrolling. And 672 00:36:18,440 --> 00:36:21,160 Speaker 12: we wanted to create a product that help people be 673 00:36:21,239 --> 00:36:23,200 Speaker 12: more in focus. Right, So if you put the phone down, 674 00:36:23,239 --> 00:36:25,439 Speaker 12: you can still be notified about the most important things. 675 00:36:25,440 --> 00:36:28,640 Speaker 12: That are happening without always checking your screen. I don't 676 00:36:28,640 --> 00:36:30,799 Speaker 12: know about you, but for me sometimes when I have 677 00:36:30,840 --> 00:36:33,680 Speaker 12: to respond to an important message, I just happened to 678 00:36:33,680 --> 00:36:36,160 Speaker 12: go into my social media and scroll a bit afterwards. 679 00:36:36,239 --> 00:36:38,680 Speaker 3: Yeah, so it's keeping you engaged in the process. 680 00:36:38,960 --> 00:36:42,839 Speaker 2: What's interesting is, well, it looks like nothing else really 681 00:36:42,880 --> 00:36:44,920 Speaker 2: on the market. People have loved that. The geeks in 682 00:36:44,960 --> 00:36:47,040 Speaker 2: particular have loved that. But what sort of scale you're 683 00:36:47,040 --> 00:36:48,319 Speaker 2: getting to now? Who is buying this? 684 00:36:49,120 --> 00:36:51,960 Speaker 12: Yeah, so we're targeting a very different customer base. As 685 00:36:51,960 --> 00:36:54,120 Speaker 12: a startup, we're really focused on our users, the young 686 00:36:54,200 --> 00:36:59,239 Speaker 12: creatives today we are this year, we're doing about a 687 00:36:59,239 --> 00:37:03,200 Speaker 12: billion in revenue. Last year we did north of five 688 00:37:03,239 --> 00:37:07,359 Speaker 12: hundred millions. We're doubling this year and it's a good start, 689 00:37:07,480 --> 00:37:08,239 Speaker 12: but a long way to go. 690 00:37:08,360 --> 00:37:10,280 Speaker 2: What are they trading in for because this is Android 691 00:37:10,320 --> 00:37:14,200 Speaker 2: operating system. Are people ditching their Samsungs? They ditching their apples? 692 00:37:14,239 --> 00:37:14,839 Speaker 3: What are they doing? 693 00:37:14,920 --> 00:37:15,120 Speaker 5: Yeah? 694 00:37:15,600 --> 00:37:17,719 Speaker 12: Our users come from all over the industry. Actually, we 695 00:37:17,760 --> 00:37:20,480 Speaker 12: have two types of products. We have earbuds and smartphones. 696 00:37:21,120 --> 00:37:23,640 Speaker 12: For our earbuds, more than half of the users come 697 00:37:23,680 --> 00:37:27,920 Speaker 12: from iPhone, which is really surprising to us and our 698 00:37:27,960 --> 00:37:31,120 Speaker 12: phones come from all over the market, but we do 699 00:37:31,239 --> 00:37:33,359 Speaker 12: see a lot of iPhone users switching to US. 700 00:37:33,800 --> 00:37:35,040 Speaker 3: Where are these being made? 701 00:37:35,600 --> 00:37:38,120 Speaker 12: We manufacture most of our phones in India, but we 702 00:37:38,160 --> 00:37:40,279 Speaker 12: also have a site in China, and we have a 703 00:37:40,320 --> 00:37:41,680 Speaker 12: new site coming up soon as well. 704 00:37:41,760 --> 00:37:45,040 Speaker 3: Where would that be to be announced? Okay? 705 00:37:45,120 --> 00:37:48,399 Speaker 2: Interesting, because what do you you're a man who's you've 706 00:37:48,400 --> 00:37:51,960 Speaker 2: built companies before. Boy, have you built well over in China? 707 00:37:52,040 --> 00:37:55,120 Speaker 2: You sort of stuck in really in the Chinese smart 708 00:37:55,320 --> 00:38:00,360 Speaker 2: phone industry yourself, and now we're seeing this pushback in America, 709 00:38:00,360 --> 00:38:02,720 Speaker 2: in particular manufacturing in the United States. 710 00:38:02,880 --> 00:38:03,759 Speaker 3: What do you make of. 711 00:38:03,680 --> 00:38:06,160 Speaker 2: That ability, that capability to get the scale the talent 712 00:38:06,239 --> 00:38:06,920 Speaker 2: here in the US. 713 00:38:07,320 --> 00:38:09,520 Speaker 12: It's not something that we thought about a lot because 714 00:38:10,239 --> 00:38:13,680 Speaker 12: we've been really focused on markets like Europe and India, 715 00:38:13,719 --> 00:38:17,280 Speaker 12: and we're manufacturing in India. Recently, we just started exploring 716 00:38:17,320 --> 00:38:19,200 Speaker 12: how to export from India to the rest of the 717 00:38:19,200 --> 00:38:21,959 Speaker 12: world with a phone three. Actually we're exporting from India 718 00:38:22,000 --> 00:38:22,479 Speaker 12: to the US. 719 00:38:22,520 --> 00:38:23,919 Speaker 3: How hard is that with tariff's? 720 00:38:24,239 --> 00:38:28,600 Speaker 12: Uh, it's it's okay. I mean, I don't think the 721 00:38:28,640 --> 00:38:29,840 Speaker 12: tarifts are that bad from India. 722 00:38:30,440 --> 00:38:32,200 Speaker 2: Okay, So you don't think that a little bit of 723 00:38:32,200 --> 00:38:34,880 Speaker 2: a hit to what is a more expensive version of 724 00:38:34,880 --> 00:38:36,480 Speaker 2: the phones that you're now having? What is it sem 725 00:38:36,600 --> 00:38:39,840 Speaker 2: nine to nine as the price point for this particular phone. 726 00:38:40,360 --> 00:38:41,719 Speaker 2: Why go to that upscale level? 727 00:38:41,760 --> 00:38:43,440 Speaker 3: You've been more of a mid range kind of. 728 00:38:45,239 --> 00:38:47,640 Speaker 12: We always wanted to compete on the flagship level, but 729 00:38:47,920 --> 00:38:49,959 Speaker 12: we had to build a lot of our capabilities because 730 00:38:50,040 --> 00:38:52,720 Speaker 12: when we sell a product at eight hundred dollars, people 731 00:38:52,760 --> 00:38:56,640 Speaker 12: expect the best the best camera, the best screen, the 732 00:38:55,760 --> 00:39:00,520 Speaker 12: best of everything. And building a smartphone company is hard, 733 00:39:00,560 --> 00:39:02,560 Speaker 12: like all types of hardware is hard, but smartphones are 734 00:39:02,600 --> 00:39:05,920 Speaker 12: particularly hard. I think we finally got to a space 735 00:39:05,960 --> 00:39:09,520 Speaker 12: where our engineering capability is at the level where we 736 00:39:09,520 --> 00:39:10,800 Speaker 12: can take a shot at the flagship. 737 00:39:11,640 --> 00:39:15,480 Speaker 2: You have that experience having helped build OnePlus now with nothing, 738 00:39:16,120 --> 00:39:18,160 Speaker 2: how much is there now? Focus on the AI integration 739 00:39:18,200 --> 00:39:19,840 Speaker 2: because that's where Apple seems to be stumbling. 740 00:39:19,960 --> 00:39:23,120 Speaker 12: Yeah, we're super excited about AI. We're not really focused 741 00:39:23,120 --> 00:39:25,440 Speaker 12: on the large language models, but we're focused on how 742 00:39:25,440 --> 00:39:28,640 Speaker 12: to apply AI. And I believe that to win in 743 00:39:28,719 --> 00:39:31,600 Speaker 12: consumer AI, you need to own your own hardware. And 744 00:39:31,680 --> 00:39:33,880 Speaker 12: for me, the smartphone is the most exciting piece of 745 00:39:33,880 --> 00:39:37,760 Speaker 12: hardware because of two reasons. It's got the most scale, 746 00:39:37,920 --> 00:39:41,000 Speaker 12: right because more than one point two billions smartphones are 747 00:39:41,040 --> 00:39:43,840 Speaker 12: sold every year, and it's also got the most depth 748 00:39:44,239 --> 00:39:45,960 Speaker 12: in terms of what we do on our phones. We 749 00:39:46,000 --> 00:39:49,080 Speaker 12: do everything. So I think consumer AI needs both scale 750 00:39:49,080 --> 00:39:50,839 Speaker 12: and depth because we want to be able to really 751 00:39:50,920 --> 00:39:54,600 Speaker 12: understand the users, to then automate the smartphone use as 752 00:39:54,680 --> 00:39:55,720 Speaker 12: much as possible. 753 00:39:55,320 --> 00:39:57,680 Speaker 2: For them to do all of that, and to get 754 00:39:57,680 --> 00:39:58,960 Speaker 2: more manufacturing footprint. 755 00:39:59,200 --> 00:40:01,320 Speaker 3: You need money. Are you raising money? What sort of 756 00:40:01,400 --> 00:40:02,200 Speaker 3: scale do you need? 757 00:40:02,640 --> 00:40:04,839 Speaker 12: We raised about two hundred and fifty million dollars so far. 758 00:40:04,960 --> 00:40:08,160 Speaker 12: We've been relatively capital efficient. We've done more than a 759 00:40:08,160 --> 00:40:10,919 Speaker 12: billion dollars in lifetime sales. We're doing a billion dollars 760 00:40:11,400 --> 00:40:14,879 Speaker 12: in sales this year. Of course, we're always entertaining conversations, 761 00:40:14,920 --> 00:40:16,560 Speaker 12: but we have nothing to announce right now. 762 00:40:17,120 --> 00:40:20,120 Speaker 2: Please come back when you do call pay of nothing 763 00:40:20,239 --> 00:40:21,319 Speaker 2: great to have some time with him