WEBVTT - Apple Loses Another AI Executive, Amazon's Prime Day Weakness

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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<v Speaker 1>from coast to coast with Caroline Hide in New York

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<v Speaker 1>and Eva Though in San Francisco.

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<v Speaker 2>This is Bloomberg Tech coming up. Another setback for Apple's

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<v Speaker 2>struggling AI efforts as one of its top executives leaves

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<v Speaker 2>for Meta Plus. Amazon Prime Day kicks off, but already

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<v Speaker 2>spending is down about fourteen percent.

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<v Speaker 3>We'll bring you the latest and we sit.

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<v Speaker 2>Down with the CEO of Core Weeve after the company's

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<v Speaker 2>big purchase of Core Scientific for nine billion dollars. But

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<v Speaker 2>first we take you to these publicly traded markets right here,

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<v Speaker 2>right now, just erasing earlier gains. We're now trading about

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<v Speaker 2>flat on the Nasdaq one hundred y Well. Clarity, it seems,

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<v Speaker 2>coming from President Trump on a truth social post saying

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<v Speaker 2>August the first, that is your deadline and will not

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<v Speaker 2>be extended for the impact to be.

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<v Speaker 3>Felt of reciprocal tariffs. Remember, an awful.

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<v Speaker 2>Lot of negotiation still to take place, it would seem

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<v Speaker 2>we also want to be digging into what's happening on

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<v Speaker 2>the individual stock level. I want to shine, like what's

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<v Speaker 2>happening in terms of Apple and Meta. We're up four

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<v Speaker 2>tens percent on Apple and down about three percent on Meta.

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<v Speaker 2>This all after once again, Meta juggernaut that is sucking

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<v Speaker 2>AI talent with promises of tens of millions of dollars,

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<v Speaker 2>takes a top executive, a top AI engineer from Apple.

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<v Speaker 2>Now we've already got some thoughts coming from lead investors

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<v Speaker 2>such as Kathy would just take a listen to what

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<v Speaker 2>she thought about the movement of talent to Meta.

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<v Speaker 4>What we've seen there is one turnover of management teams

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<v Speaker 4>after another, and it's all you know, Autonomous driving is

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<v Speaker 4>an AI project, just the largest AI project on Earth,

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<v Speaker 4>we believe, and so losing the talent that it has,

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<v Speaker 4>and as I understand it lasts another one today to

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<v Speaker 4>Mark Zuckerberg's top fifty. So they've had a lot of

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<v Speaker 4>trouble in this regard, and I think the burden of

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<v Speaker 4>proof is on them.

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<v Speaker 2>And she learned that from our own Mark German, who

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<v Speaker 2>broke the story of the Apple executive lead believing and

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<v Speaker 2>Mark just dig into whom mister Pang is and why

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<v Speaker 2>indeed he's left.

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<v Speaker 5>Yes, so Roman Pang. He is the distinguished engineer and

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<v Speaker 5>manager of the company's Apple Foundation Models team, Now we

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<v Speaker 5>talk about all these AI features, we talk about all

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<v Speaker 5>these AI companies, but how does generative AI actually work well?

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<v Speaker 5>Large language models? These are the models that actually power

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<v Speaker 5>this technology, and so all of these companies are racing

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<v Speaker 5>to get the best engineers in the world who can

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<v Speaker 5>develop these models, and Pang is known as probably the

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<v Speaker 5>best of the best. He was the most respected AI

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<v Speaker 5>engineer at Apple, the most respected AI executive at Apple,

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<v Speaker 5>and one of the most respected model engineers in the

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<v Speaker 5>entire artificial intelligence research community. So this is a massive

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<v Speaker 5>swing for Meta, a major higher by Meta, and as

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<v Speaker 5>big as a hired is for Meta, it's probably even

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<v Speaker 5>a bigger loss for Apple. Yeah, in many ways, this

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<v Speaker 5>was one of the guys holding everything together there. We've

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<v Speaker 5>known their AI features have been struggling, we know their

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<v Speaker 5>models have been struggling. There's a lot of background, you

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<v Speaker 5>can read all my articles about this as to why

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<v Speaker 5>they've been struggling. But this is a pretty big loss

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<v Speaker 5>for Apple. And I'm told in order to get paying

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<v Speaker 5>into Meta, they had to offer him a multi year

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<v Speaker 5>package worth somewhere north of two hundred million dollars.

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<v Speaker 2>That's an extraordinary amount mark and it paints a picture

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<v Speaker 2>of the commitment coming from Mark Zuckerberg, but painting the

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<v Speaker 2>picture of morale left over at Apple because more people

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<v Speaker 2>like you to leave the Foundations Model team.

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<v Speaker 5>I'm told there are more people likely to leave the

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<v Speaker 5>Apple Foundation Models team. Obviously, Paying is the most significant

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<v Speaker 5>AI departure from Apple since the generator of AI boom

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<v Speaker 5>started a few years ago. His top engineer, Tom Gunter,

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<v Speaker 5>he last a couple of weeks ago from the Foundation

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<v Speaker 5>Models team, and now Pang is leaving as well. I'm

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<v Speaker 5>told he'll start at Meta in the coming days, and

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<v Speaker 5>informed Apple yesterday that he would be leaving to Zuckerberg's company.

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<v Speaker 5>This certainly is the beginning I think of more departures

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<v Speaker 5>to your points. Apple just does not compensate in the

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<v Speaker 5>same way as Open AI or Meta. And what this

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<v Speaker 5>has done is it's raised the idea within Apple that

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<v Speaker 5>their points to need to start paying more to retain

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<v Speaker 5>these people, and so far they've shown our reluctance to

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<v Speaker 5>doing so. I'm told they didn't really make the counter

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<v Speaker 5>offer to keep paying. They didn't do much to keep them.

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<v Speaker 5>And when your employees being offered north of two hundred

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<v Speaker 5>million dollars, there's really not much you can do. These

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<v Speaker 5>pay packages from Meta are nearing what CEO of the

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<v Speaker 5>biggest public companies we're getting, So you can't really do

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<v Speaker 5>that for a singular manager or engineer.

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<v Speaker 3>Money talks, so does a vision to win.

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<v Speaker 2>Mark Gurman, thanks so much extraordinary reporting as always.

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<v Speaker 3>Meanwhile, let's get the investor. Take here.

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<v Speaker 2>Jed Ellebrook's with us as portfolio manager at Argent Capital Management, and.

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<v Speaker 3>I just want to go broader here.

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<v Speaker 2>The commitment that we're seeing from certain companies, take Meta,

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<v Speaker 2>but also Microsoft and Google. The so called hyperscaler is

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<v Speaker 2>to invest with such certainty in winning the so called

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<v Speaker 2>superintelligence race. Is this the right thing you want to

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<v Speaker 2>be hearing and seeing?

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<v Speaker 4>Yeah?

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<v Speaker 6>I think it is.

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<v Speaker 7>This is an exceptionally big money competition. It takes really

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<v Speaker 7>deep pockets to attract the engineering talent to get the

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<v Speaker 7>compute power. So the big companies are flexing their muscles

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<v Speaker 7>and showing great commitment, and they're seeing the demand signs

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<v Speaker 7>thus far that that effort is worthwhile. And I think

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<v Speaker 7>it's going to continue, and I think we're going to

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<v Speaker 7>get a really good indication of that here in a

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<v Speaker 7>few weeks when Microsoft reports their fiscal fourth quarter earnings,

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<v Speaker 7>they will announce CAPEX intentions for their next fiscal year,

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<v Speaker 7>and I think we're going to see another big increase,

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<v Speaker 7>probably not as big as last year, but still a

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<v Speaker 7>double digit percentage increase to a number that's north of

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<v Speaker 7>one hundred million dollars.

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<v Speaker 2>So, before I dig more into the hyperscale in the

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<v Speaker 2>AI trade, jed with your more than two decades of

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<v Speaker 2>experience managing money here in large caps, is Apple just

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<v Speaker 2>one that you have to view in a different manner

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<v Speaker 2>now the way in which the company sees future growth.

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<v Speaker 7>Yeah, Apple is a defensive tech business for investors. It

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<v Speaker 7>is not a dynamic growth business, hasn't been for some

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<v Speaker 7>time and won't be in the future. They're behind in

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<v Speaker 7>AI capabilities and talent and resources, and that is a

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<v Speaker 7>concern for investors. But I do think it was kind

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<v Speaker 7>of interesting that a week or two ago, when word

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<v Speaker 7>was got out that Apple was considering using anthropic and

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<v Speaker 7>a open AI models more for their customer interactions on

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<v Speaker 7>the phone, that the stock went up three or four

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<v Speaker 7>percent on that news. The market liked Apple de emphasizing

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<v Speaker 7>its own internal AI research.

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<v Speaker 3>Effort, and that was Mark Guman's reporting as well.

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<v Speaker 2>So Pivot therefore, to the companies that are committed that

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<v Speaker 2>are building the large language models. I know, in particular,

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<v Speaker 2>you think Amazon's a winner here.

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<v Speaker 8>Why I do.

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<v Speaker 7>I think that their AWS cloud computing business is very

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<v Speaker 7>well positioned to ride the wave of AI spending. Enterprises

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<v Speaker 7>are deploying AI tools on their cloud platforms, and I

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<v Speaker 7>think that AWS, Azure, and GCP all have really outstanding

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<v Speaker 7>growth prospects. And I guess we should throw Oracle in

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<v Speaker 7>there as well.

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<v Speaker 2>Interesting that Oracle is also navigating a future of more

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<v Speaker 2>hurdles when it comes to accessing chips by the country.

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<v Speaker 2>You think of Oracle, which has been investing a lot

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<v Speaker 2>in Malaysia, for example, And we understand from reporting here

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<v Speaker 2>at Bloomberg that maybe the administration is going to make

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<v Speaker 2>it harder and get your own video chips into countries

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<v Speaker 2>such as this without licenses. But I'm also interested more

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<v Speaker 2>broadly about how any of these tech giants are navigating

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<v Speaker 2>the current trade environment. We've just had the latest headline

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<v Speaker 2>out of President Trump that August the first is where

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<v Speaker 2>he's sticking.

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<v Speaker 7>Yeah, I think he said. I think he said the

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<v Speaker 7>opposite more or less yesterday. So it's hard to put

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<v Speaker 7>too much stock in one day's worth of comments from him.

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<v Speaker 7>But yeah, the big tech companies have incredible advantages. Their

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<v Speaker 7>balance sheets are incredibly strong, They're producing prodigious cash flow,

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<v Speaker 7>and they have you know, all the AI capabilities that

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<v Speaker 7>we listed earlier, So they're ready to flex those muscles.

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<v Speaker 7>They are ready to pivot and adjust, and I think

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<v Speaker 7>that they're all really well positioned to succeed. AI is

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<v Speaker 7>a big money game, and is.

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<v Speaker 2>It one you want to commit more money to at

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<v Speaker 2>this moment? Jed, we're basically near record highes.

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<v Speaker 5>Yeah.

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<v Speaker 7>I think for some of them the answer is yes.

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<v Speaker 7>You know, meta valuation is higher than normal. I think

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<v Speaker 7>maybe that's one where you don't need to rush into

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<v Speaker 7>it right now. But I think others are you know,

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<v Speaker 7>fairly compelling. Amazon, like I said, is our personal favorite Microsoft.

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<v Speaker 7>Is that a huge run up here in the last

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<v Speaker 7>month and a half. Maybe no need to rush on

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<v Speaker 7>that one. In Nvidia, I think is pretty compelling, you know,

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<v Speaker 7>exceptionally strong competitive.

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<v Speaker 6>Position with the GPU chips.

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<v Speaker 7>They they just sent out Blackwell Ultra, the first one

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<v Speaker 7>into the wild last week.

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<v Speaker 6>That's going to be.

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<v Speaker 7>An incredibly compelling product for enterprises and hyper scalers to

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<v Speaker 7>put in their data center. So yeah, there are places,

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<v Speaker 7>I think where you can put money to work confidently

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<v Speaker 7>today in businesses that are AI beneficiaries.

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<v Speaker 2>They said out into the world to call weave. And

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<v Speaker 2>we've got the core vav CEO coming on a little

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<v Speaker 2>bit later in the show. But Jen, last question for you.

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<v Speaker 2>Is it all about American exceptionalism here?

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<v Speaker 3>Still?

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<v Speaker 7>Yeah, it's such an interesting investing environment today. We have,

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<v Speaker 7>you know, I think a fairly moderate growth US economy,

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<v Speaker 7>but with an AI revolution over here on the side

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<v Speaker 7>that is very compelling is going to continue I think

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<v Speaker 7>for quite some time, both the investment and then you know,

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<v Speaker 7>the inference demand, the software deployment of these tools. So yeah,

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<v Speaker 7>I think I think that the outlook for US stock markets,

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<v Speaker 7>for tech stocks in particular, is pretty bright.

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<v Speaker 2>Urgent Capital Management, Jed Eliver, it's been great having your perspective.

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<v Speaker 3>Thank you.

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<v Speaker 2>No, let's shift gears and look at what the shares

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<v Speaker 2>of Samsung currently doing trading in London as we speak ADRs,

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<v Speaker 2>and look they are down by eight ten percent. Profit

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<v Speaker 2>fell for the first time since twenty twenty three. In fact,

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<v Speaker 2>it plummeted fifty six percent. This is once again about

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<v Speaker 2>the chip maker not managing to win when it comes

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<v Speaker 2>to high bandwidth memory yet.

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<v Speaker 3>But is this the bottom?

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<v Speaker 2>Some analysts feeling that way, investors feeling that way, particularly

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<v Speaker 2>over at CLSA, and notably, we keep an eye on

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<v Speaker 2>how these companies perform out of their earnings.

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<v Speaker 3>Meanwhile, coming up.

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<v Speaker 2>President Trump unveils a wave of letters again threatening key

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<v Speaker 2>trading partners with high tariff rate impact on big tech

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<v Speaker 2>is coming up next for you.

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<v Speaker 3>This is Greenberg Tech.

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<v Speaker 2>Wednesday was the original tariff deadline, but less than a

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<v Speaker 2>handful of agreements are ready to announce, and President Trump

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<v Speaker 2>instead is now saying his new August first tariff deadline

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<v Speaker 2>will not be extended. Let's get to the latest bluegg's

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<v Speaker 2>Balance of Power host Kaylee Lines is with us taking

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<v Speaker 2>to truth social to well try and tell us this

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<v Speaker 2>commitment to this one.

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<v Speaker 4>Yeah.

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<v Speaker 9>This is after he was asked at the White House

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<v Speaker 9>yesterday Caroline if this was a firm deadline, and he

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<v Speaker 9>said yes, August versus firm, though not one hundred percent firm,

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<v Speaker 9>indicating some degree of flexibility. And it seems that's what

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<v Speaker 9>he's trying to course correct for with this true social

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<v Speaker 9>post today, saying that on August first, tariffs will start

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<v Speaker 9>being paid. He says, there has been no change to

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<v Speaker 9>that date, and there will be no change to that date.

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<v Speaker 9>I would just keep in mind that initially he had

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<v Speaker 9>suggested there wouldn't be a change to the July ninth

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<v Speaker 9>date either, and that is the action he signed yesterday

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<v Speaker 9>to extend the deadline from July ninth to August first

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<v Speaker 9>for various trading partners that we don't have trade deals

0:12:08.400 --> 0:12:11.600
<v Speaker 9>with yet. He of course, yesterday wrote fourteen letters and

0:12:11.679 --> 0:12:14.560
<v Speaker 9>sent them to the heads of fourteen different countries outlining

0:12:14.559 --> 0:12:16.760
<v Speaker 9>the tariff rate that they will start paying next month

0:12:16.760 --> 0:12:19.200
<v Speaker 9>in the absence of a deal, ranging from twenty five

0:12:19.240 --> 0:12:22.000
<v Speaker 9>percent for countries like Japan and South Korea up to

0:12:22.080 --> 0:12:25.880
<v Speaker 9>forty percent for countries like Mianmark and Laos. So he

0:12:25.960 --> 0:12:28.320
<v Speaker 9>did say in the letter that if countries would like

0:12:28.360 --> 0:12:31.720
<v Speaker 9>to open their financial markets eliminate tariff and non tariff barriers,

0:12:31.760 --> 0:12:34.559
<v Speaker 9>the tariff set out in the letter could be revisited,

0:12:34.559 --> 0:12:37.800
<v Speaker 9>so still leaving some wiggle room for negotiations here. The President,

0:12:37.840 --> 0:12:40.640
<v Speaker 9>also in on Tru's Social today, is saying additional letters

0:12:40.840 --> 0:12:43.800
<v Speaker 9>will be sent today, tomorrow and for the next short

0:12:43.840 --> 0:12:46.040
<v Speaker 9>period of time. So we do expect to get news

0:12:46.040 --> 0:12:48.800
<v Speaker 9>on new tariff rates that are set on various countries,

0:12:48.840 --> 0:12:51.240
<v Speaker 9>and we also could still see news on deals. Our

0:12:51.320 --> 0:12:54.280
<v Speaker 9>understanding is that deals are getting closer for countries like India,

0:12:54.800 --> 0:12:57.840
<v Speaker 9>for Taiwan, for the European Union as well. Signals that

0:12:57.880 --> 0:12:59.880
<v Speaker 9>there has been progress there. It's just not clear when

0:13:00.040 --> 0:13:02.920
<v Speaker 9>may be announced, in how robust they will be, or

0:13:02.920 --> 0:13:05.280
<v Speaker 9>whether or not. It's really just trade frameworks we're talking

0:13:05.360 --> 0:13:09.000
<v Speaker 9>about here, knowing that the team that the administration has

0:13:09.000 --> 0:13:11.520
<v Speaker 9>put together to work on these has struggled to make

0:13:11.559 --> 0:13:13.960
<v Speaker 9>progress in a lot of arenas, not only because it's

0:13:14.200 --> 0:13:16.440
<v Speaker 9>about the teri free countries could pay overall, but there's

0:13:16.440 --> 0:13:20.240
<v Speaker 9>also sectoral tariffs to contend with existing ones like tariffs

0:13:20.280 --> 0:13:24.200
<v Speaker 9>on autos and steel and aluminum, for example, but also

0:13:24.240 --> 0:13:26.400
<v Speaker 9>ones that have been threatened that have opened Section two

0:13:26.440 --> 0:13:30.400
<v Speaker 9>thirty two investigations into them, like semiconductors and pharmaceuticals, and

0:13:30.440 --> 0:13:32.480
<v Speaker 9>that could be a sticking point in all of these talks.

0:13:32.480 --> 0:13:35.640
<v Speaker 2>Caroline, and of course semiconductor's key to this audience putting bags,

0:13:35.679 --> 0:13:38.040
<v Speaker 2>Kaylee lines, thank you so much. Now let's bring in

0:13:38.080 --> 0:13:40.400
<v Speaker 2>Michelle Guider now from more perspectives, she is the CEO

0:13:40.520 --> 0:13:43.680
<v Speaker 2>of the Kruck Institute for Tech Diplomacy over at Purdue.

0:13:43.960 --> 0:13:46.440
<v Speaker 2>You served as an Assistant Secretary of State for Global

0:13:46.480 --> 0:13:49.240
<v Speaker 2>Public Affairs under the first Trump administration that was twenty

0:13:49.280 --> 0:13:52.840
<v Speaker 2>eighteen to twenty twenty. And Michelle, what the big picture

0:13:52.840 --> 0:13:55.240
<v Speaker 2>we need to remind ourselves is what the ultimate goal

0:13:55.360 --> 0:13:57.880
<v Speaker 2>is here. Yes, they might have to push back deadlines,

0:13:57.880 --> 0:13:59.800
<v Speaker 2>but the aim is to have fairer trade.

0:14:00.000 --> 0:14:01.960
<v Speaker 3>Oh, we actually be getting to that point.

0:14:03.320 --> 0:14:06.560
<v Speaker 6>You're so right, Caroline. The big picture is really important here.

0:14:06.600 --> 0:14:09.800
<v Speaker 6>So let's remember that tariffs are a tool that are

0:14:09.960 --> 0:14:12.760
<v Speaker 6>a means to an end of a very big objective here,

0:14:12.760 --> 0:14:16.400
<v Speaker 6>and that is for America to both design and physically

0:14:16.440 --> 0:14:19.400
<v Speaker 6>build the technology infrastructure that is going to be the

0:14:19.440 --> 0:14:22.800
<v Speaker 6>backbone of the free world in the next century. And

0:14:22.840 --> 0:14:25.160
<v Speaker 6>so in order to do that, we have to build

0:14:25.200 --> 0:14:28.160
<v Speaker 6>and in some cases rebuild a lot of critical industries

0:14:28.200 --> 0:14:31.360
<v Speaker 6>here at home, and we have to rebalance the trade

0:14:31.400 --> 0:14:33.720
<v Speaker 6>ecosystem in order to do that, because the current system

0:14:33.800 --> 0:14:39.000
<v Speaker 6>right now disincentivises our leadership and critical industry. It rewards offshoring,

0:14:39.120 --> 0:14:43.080
<v Speaker 6>it punishes production here at home, and ultimately exports leadership

0:14:43.120 --> 0:14:46.320
<v Speaker 6>in a lot of really important industries to countries overseas,

0:14:47.000 --> 0:14:48.600
<v Speaker 6>and that can't be the case if we're going to

0:14:48.720 --> 0:14:51.160
<v Speaker 6>lead in the new technology era. And I'll give you

0:14:51.160 --> 0:14:54.360
<v Speaker 6>a really good example. For the AI revolution to happen,

0:14:54.400 --> 0:14:56.120
<v Speaker 6>we have to build a lot of data centers, and

0:14:56.120 --> 0:14:58.120
<v Speaker 6>in the pipeline at the end of twenty twenty four,

0:14:58.480 --> 0:15:01.960
<v Speaker 6>we had fifty two million square feet of data centers

0:15:01.960 --> 0:15:04.040
<v Speaker 6>that we have to build in the United States. Do

0:15:04.080 --> 0:15:07.120
<v Speaker 6>you know how much steel that that requires. It's billions

0:15:07.160 --> 0:15:09.960
<v Speaker 6>and billions of dollars of steel. How great for that

0:15:10.160 --> 0:15:14.440
<v Speaker 6>to be built by American companies with American workers, rather

0:15:14.560 --> 0:15:19.200
<v Speaker 6>than from artificially cheap steel from international partners overseas. So

0:15:19.240 --> 0:15:22.520
<v Speaker 6>that's what's at sake. It's American leadership in many critical

0:15:22.600 --> 0:15:24.600
<v Speaker 6>industries are going to be good for us, and it's

0:15:24.600 --> 0:15:25.720
<v Speaker 6>going to be good for our allies.

0:15:26.240 --> 0:15:29.480
<v Speaker 2>Many would say, though, taking out of chips, looking at

0:15:29.520 --> 0:15:34.320
<v Speaker 2>defense for example, or indeed looking at magnets and electric

0:15:34.440 --> 0:15:37.200
<v Speaker 2>vehicles and the electrification of our economy here in the

0:15:37.280 --> 0:15:41.960
<v Speaker 2>United States, we yet need more clarity on ultimate demand

0:15:42.320 --> 0:15:45.400
<v Speaker 2>hearing time and time again than the defense tech startups

0:15:45.400 --> 0:15:48.040
<v Speaker 2>that they need the DoD to actually buy the stuff

0:15:48.080 --> 0:15:50.640
<v Speaker 2>commit to we're hearing time and time again that we

0:15:50.760 --> 0:15:53.600
<v Speaker 2>can't start extracting rare earth that we don't have access

0:15:53.640 --> 0:15:55.880
<v Speaker 2>to in the United States yet because there's not clarity

0:15:55.920 --> 0:15:58.840
<v Speaker 2>on whether the energy field will already transition the way

0:15:58.840 --> 0:16:01.080
<v Speaker 2>that they thought, particularly as you see the big beautiful

0:16:01.080 --> 0:16:03.760
<v Speaker 2>bill as so cooled, seeming to drown out some of

0:16:03.800 --> 0:16:06.960
<v Speaker 2>that movement to electrifications. So, Michelle, how did they garner

0:16:07.320 --> 0:16:09.040
<v Speaker 2>clarity and security here?

0:16:10.240 --> 0:16:13.000
<v Speaker 6>Well, when it comes to clarity and it comes to certainty,

0:16:13.120 --> 0:16:15.840
<v Speaker 6>I don't think there was anything more certain than the

0:16:15.880 --> 0:16:18.360
<v Speaker 6>fact that tariffs were coming. When Donald Trump was re

0:16:18.440 --> 0:16:21.400
<v Speaker 6>elected president. It was a core pillar of his first administration.

0:16:21.480 --> 0:16:25.040
<v Speaker 6>When I served as Assistant secretary, Fair and reciprocal trade

0:16:25.160 --> 0:16:27.720
<v Speaker 6>was a core message that we were communicating to every

0:16:27.760 --> 0:16:30.240
<v Speaker 6>international partner in one hundred and eighty five missions across

0:16:30.240 --> 0:16:32.840
<v Speaker 6>the world. And you can even go back to nineteen

0:16:32.920 --> 0:16:35.800
<v Speaker 6>eighty eight. There's a interview that Donald Trump did with

0:16:35.840 --> 0:16:40.440
<v Speaker 6>Oprah Winfrey talking about how he would revamp US foreign policy,

0:16:40.480 --> 0:16:43.560
<v Speaker 6>and in that he talks about asking our allies to

0:16:43.640 --> 0:16:46.200
<v Speaker 6>pay their fair share, and he focuses on allies, he says,

0:16:46.200 --> 0:16:48.680
<v Speaker 6>because they're much easier to talk to than our enemies,

0:16:49.240 --> 0:16:53.080
<v Speaker 6>and he highlights what country. He highlights Japan, and he

0:16:53.120 --> 0:16:56.520
<v Speaker 6>talks about how they're dumping cars and dumping VCRs into

0:16:56.560 --> 0:16:58.760
<v Speaker 6>the American market. At the same time they're making it

0:16:58.760 --> 0:17:00.600
<v Speaker 6>really hard for Americans to do BIS. So this has

0:17:00.640 --> 0:17:04.359
<v Speaker 6>been a long time coming, but we're trying to rebalance

0:17:04.400 --> 0:17:07.439
<v Speaker 6>a trade system that's existed for fifty sixty, seventy, in

0:17:07.480 --> 0:17:11.119
<v Speaker 6>some cases eighty years across ninety countries. It's going to

0:17:11.160 --> 0:17:13.440
<v Speaker 6>take some time, and some deadlines are going to be pushed,

0:17:13.440 --> 0:17:15.560
<v Speaker 6>and it's going to be a little bit messy. But

0:17:15.880 --> 0:17:18.680
<v Speaker 6>at the end of this, if American America can come

0:17:18.720 --> 0:17:23.280
<v Speaker 6>out leading in critical industries, that'll give really good certainty

0:17:23.320 --> 0:17:24.920
<v Speaker 6>to our businesses in the long term.

0:17:25.160 --> 0:17:27.600
<v Speaker 2>Should if we've got the talent to be able to

0:17:27.640 --> 0:17:31.000
<v Speaker 2>do the manufacturing here, particularly as we look at making

0:17:31.119 --> 0:17:34.560
<v Speaker 2>H one BVS is tougher, for example, I'd.

0:17:34.400 --> 0:17:38.640
<v Speaker 6>Say yes, and we would benefit from all the brilliant

0:17:38.680 --> 0:17:41.920
<v Speaker 6>talent from across the world. The Crock Institute is based

0:17:41.960 --> 0:17:45.480
<v Speaker 6>at Purdue University. It is the largest engineering school in

0:17:45.520 --> 0:17:48.520
<v Speaker 6>the country, graduates more engineers than any other top university

0:17:48.520 --> 0:17:52.119
<v Speaker 6>in the countries. It's engineering excellence at scale that type

0:17:52.119 --> 0:17:56.280
<v Speaker 6>of talent is ready for national security jobs in commercial

0:17:56.280 --> 0:17:58.600
<v Speaker 6>industries and in defense industries that are going to matter

0:17:58.640 --> 0:18:01.359
<v Speaker 6>to our leadership in the twenty for a century, and

0:18:01.400 --> 0:18:03.719
<v Speaker 6>the same is true in many other places across the country.

0:18:03.720 --> 0:18:05.399
<v Speaker 6>So we have the talent. What we need to do

0:18:05.480 --> 0:18:09.840
<v Speaker 6>is incentivize the economic landscape and the trade landscape in

0:18:09.920 --> 0:18:11.080
<v Speaker 6>order to let them flourish.

0:18:11.359 --> 0:18:13.440
<v Speaker 2>Michelle Geider, great to catch up with you at the

0:18:13.480 --> 0:18:17.600
<v Speaker 2>Crack Institute for Tech Dipromacy over at Purdue. Now coming up,

0:18:17.840 --> 0:18:21.240
<v Speaker 2>Amazon's Prime Day is kicked off, but shoppers they might

0:18:21.320 --> 0:18:24.159
<v Speaker 2>not see the heavy discounts like years prior. We're on

0:18:24.200 --> 0:18:26.520
<v Speaker 2>that next. This is Bloomberg Tech.

0:18:42.000 --> 0:18:42.240
<v Speaker 3>Time.

0:18:42.320 --> 0:18:45.439
<v Speaker 2>Now for talking tech and first up, your sensitive data

0:18:45.920 --> 0:18:49.080
<v Speaker 2>or should from today be safer? After a Justice Department

0:18:49.160 --> 0:18:51.719
<v Speaker 2>rule takes effect today after an end of a ninety

0:18:51.800 --> 0:18:55.359
<v Speaker 2>day grace period. Now companies across sectors must now comply

0:18:55.480 --> 0:18:58.520
<v Speaker 2>to the safeguard of bulk transfers and sensitive data from

0:18:58.600 --> 0:19:02.159
<v Speaker 2>countries the post of National Security risk, including China and Iran,

0:19:02.720 --> 0:19:05.600
<v Speaker 2>plus Epic Games. While it is settled an anti trust

0:19:05.640 --> 0:19:08.639
<v Speaker 2>case against Samsung alleging that the company was conspiring with

0:19:08.680 --> 0:19:11.040
<v Speaker 2>Google in blocking rival at marketplaces.

0:19:11.240 --> 0:19:13.480
<v Speaker 3>By default, Epic dismissed all.

0:19:13.320 --> 0:19:16.600
<v Speaker 2>Anti trust claims against Samsung and Google, but Google remains

0:19:16.720 --> 0:19:20.880
<v Speaker 2>defendant on several non anti trust claims. And some brands

0:19:20.880 --> 0:19:24.400
<v Speaker 2>and consumers are sitting out on this year's Amazon Prime Day.

0:19:24.480 --> 0:19:27.760
<v Speaker 2>Is President Trump's trade wark really rattles shopping sentiment? Some

0:19:27.920 --> 0:19:31.480
<v Speaker 2>mergents are actually unable to offer discounts due to increased

0:19:31.480 --> 0:19:35.080
<v Speaker 2>costs from tariffs. Some shoppers, well, they're planning to skip

0:19:35.119 --> 0:19:36.000
<v Speaker 2>Prime Day altogether.

0:19:36.240 --> 0:19:38.240
<v Speaker 3>Prime Day spending has already fallen.

0:19:38.480 --> 0:19:41.800
<v Speaker 2>It currently seems fourteen percent in early hours compared to

0:19:41.840 --> 0:19:44.639
<v Speaker 2>twenty twenty four. So let's get to it, Bloomberg, Spenser's

0:19:44.640 --> 0:19:46.160
<v Speaker 2>Soapa and give us the inside track.

0:19:46.320 --> 0:19:47.960
<v Speaker 3>Is it all about tariff's here, Spencer?

0:19:49.640 --> 0:19:52.119
<v Speaker 10>Yeah, tariffs are definitely a key factor. This is like

0:19:52.119 --> 0:19:55.840
<v Speaker 10>our first Prime Day, you know, since Trump's President Trump's

0:19:55.880 --> 0:19:59.520
<v Speaker 10>Liberation Day tariffs, and that really just created Even though

0:20:00.040 --> 0:20:01.479
<v Speaker 10>a lot of the tariffs are still on again, off

0:20:01.480 --> 0:20:04.360
<v Speaker 10>again and being negotiated, it's just this cloud of uncertainty

0:20:04.720 --> 0:20:07.760
<v Speaker 10>that has forced a lot of businesses to just be cautious.

0:20:07.920 --> 0:20:11.160
<v Speaker 10>You know, how much inventory do we have in the country.

0:20:11.160 --> 0:20:12.959
<v Speaker 10>Do we really want to discount it? That deeply if

0:20:12.960 --> 0:20:15.560
<v Speaker 10>we're trying to protect our margins from tires down the road.

0:20:15.640 --> 0:20:17.680
<v Speaker 10>So all of that stuff is kind of weighing down

0:20:18.119 --> 0:20:19.560
<v Speaker 10>on Prime Day this year.

0:20:19.760 --> 0:20:22.520
<v Speaker 2>So why they're making it so long, such an extended period,

0:20:22.600 --> 0:20:25.320
<v Speaker 2>and what ultimately do you think they'll end up offering here.

0:20:26.480 --> 0:20:29.600
<v Speaker 10>That's a really great question. So Prime Day started as

0:20:29.640 --> 0:20:32.119
<v Speaker 10>one day, you know, when they started in twenty fifteen,

0:20:32.160 --> 0:20:34.680
<v Speaker 10>and it gradually got longer. It was two days last year,

0:20:34.760 --> 0:20:37.320
<v Speaker 10>now it's four days this year. The best thing to

0:20:37.320 --> 0:20:39.439
<v Speaker 10>see is that like a lot of their competitors, like

0:20:39.480 --> 0:20:41.760
<v Speaker 10>Walmart has like a six day sale, and I think

0:20:42.040 --> 0:20:45.800
<v Speaker 10>Target has a week long sale that they might. Amazon's

0:20:45.880 --> 0:20:48.520
<v Speaker 10>likely looking at those and saying, okay, let's just extend

0:20:48.520 --> 0:20:51.440
<v Speaker 10>the number of days and prevent us from losing sale

0:20:51.560 --> 0:20:55.480
<v Speaker 10>to a lot of these competitors, and especially competitors like

0:20:55.520 --> 0:21:01.719
<v Speaker 10>Walmart and Target. The appetite is really strong for everyday

0:21:01.800 --> 0:21:05.880
<v Speaker 10>essentials things like snack packs for lunchboxes. So Amazon needs

0:21:05.960 --> 0:21:08.400
<v Speaker 10>to to fight them on the you know, the grocery

0:21:08.440 --> 0:21:10.680
<v Speaker 10>aisle as much as for electronics.

0:21:11.119 --> 0:21:13.720
<v Speaker 2>Yeah, and when you think of electronics, you will immediately

0:21:13.800 --> 0:21:17.240
<v Speaker 2>think of China. Just more broadly, how have the companies

0:21:17.280 --> 0:21:20.840
<v Speaker 2>you speak to the SELVI Amazon been navigating me on again,

0:21:20.920 --> 0:21:22.720
<v Speaker 2>off again, feeling around tariffs.

0:21:23.840 --> 0:21:26.399
<v Speaker 10>Well right now in terms of Prime Day, we're seeing

0:21:26.440 --> 0:21:30.400
<v Speaker 10>Apple is going very hard on discounts, you know, very

0:21:30.520 --> 0:21:34.120
<v Speaker 10>very deep discounts. I spoke with the Crazy Coupon Lady earlier.

0:21:34.160 --> 0:21:36.399
<v Speaker 10>They kind of track all of these deals, you know,

0:21:36.480 --> 0:21:38.760
<v Speaker 10>and they use They used Black Friday last year as

0:21:38.760 --> 0:21:41.119
<v Speaker 10>at benchmark, and they're seeing Apple kind of, you know,

0:21:41.400 --> 0:21:44.359
<v Speaker 10>going even less than some of their Black Friday deals

0:21:44.400 --> 0:21:46.640
<v Speaker 10>a year ago. They call that. One thing in particular,

0:21:46.680 --> 0:21:51.120
<v Speaker 10>like app the AirPods for you know, earbudds were discounted

0:21:51.200 --> 0:21:55.399
<v Speaker 10>very steeply, but then you contrast that with Amazon's own devices,

0:21:55.640 --> 0:21:57.960
<v Speaker 10>and the discounts on things like their echo speakers and

0:21:57.960 --> 0:22:02.040
<v Speaker 10>stuff were pretty soft. So well, we're seeing these these

0:22:02.040 --> 0:22:07.360
<v Speaker 10>companies react react differently, you know, to the tariff situation.

0:22:07.359 --> 0:22:09.600
<v Speaker 2>And question is how the shopper reacts. We'll get the

0:22:09.680 --> 0:22:12.439
<v Speaker 2>data throughout the day. Spencer SOFA brilliant to have you.

0:22:12.480 --> 0:22:12.800
<v Speaker 3>Thank you.

0:22:13.320 --> 0:22:15.239
<v Speaker 2>Coming up, we're going to be speaking with the care

0:22:15.320 --> 0:22:18.920
<v Speaker 2>We've CEO Michael and Trader under the company's nine million

0:22:18.920 --> 0:22:22.960
<v Speaker 2>dollar purchase for Core Scientific. That's next, this is Blue

0:22:23.000 --> 0:22:38.880
<v Speaker 2>meg Tech. Welcome back to Blue meg Tech. Quick check

0:22:38.880 --> 0:22:41.600
<v Speaker 2>on these markets because we're being knocked around about by

0:22:41.640 --> 0:22:44.440
<v Speaker 2>the tariff headlines. The latest coming out of President Trump

0:22:44.520 --> 0:22:47.200
<v Speaker 2>is that August the first is hard and fast. You

0:22:47.280 --> 0:22:50.359
<v Speaker 2>will see those reciprocal tariffs put into force on that date.

0:22:50.600 --> 0:22:52.960
<v Speaker 2>We're currently just off by about a ten percent. On

0:22:53.000 --> 0:22:54.760
<v Speaker 2>the upside is the likes of Tesla and in video

0:22:54.800 --> 0:22:57.679
<v Speaker 2>from a point's perspective. On the downside, Amazon drags as

0:22:57.680 --> 0:22:59.800
<v Speaker 2>we see Prime Day off to a slow start. So

0:23:00.160 --> 0:23:02.080
<v Speaker 2>is Google and Microsoft on the red. But let's look

0:23:02.080 --> 0:23:03.720
<v Speaker 2>at Data Dog for a moment, because this is a

0:23:03.760 --> 0:23:05.440
<v Speaker 2>company that's about to enter the S and P five

0:23:05.520 --> 0:23:07.879
<v Speaker 2>hundred this week. We're off by three point eight percent.

0:23:08.480 --> 0:23:11.240
<v Speaker 2>This is as we get a key downgrade from Googenheim.

0:23:11.520 --> 0:23:15.520
<v Speaker 2>Why open ai optimization risks, So they say they cut

0:23:15.600 --> 0:23:18.320
<v Speaker 2>to a cell from neutral, worrying about the longevity of

0:23:18.320 --> 0:23:20.879
<v Speaker 2>that particular client. So it says Howard Marr, So keep

0:23:20.880 --> 0:23:22.880
<v Speaker 2>an eye on that company. But remember it's rallied hard

0:23:22.880 --> 0:23:25.160
<v Speaker 2>after the news that it will be entering the big

0:23:25.200 --> 0:23:28.480
<v Speaker 2>dogs for Data Dogs. Now, let's also take a look

0:23:28.520 --> 0:23:31.240
<v Speaker 2>at the shares a core weave and core Scientific that.

0:23:31.400 --> 0:23:33.160
<v Speaker 3>Huge deal announced yesterday that.

0:23:33.119 --> 0:23:36.280
<v Speaker 2>Core Weave is indeed acquiring core Scientific in a nine

0:23:36.520 --> 0:23:39.399
<v Speaker 2>billion dollar all stock deal. Now we're currently off by

0:23:39.400 --> 0:23:41.040
<v Speaker 2>two point four percent as you'll see on core Weave

0:23:41.160 --> 0:23:43.280
<v Speaker 2>just a bit. But all of this is about boosting

0:23:43.359 --> 0:23:47.160
<v Speaker 2>Corey's infrastructure to meet the insatiable AI demand. We get

0:23:47.240 --> 0:23:49.160
<v Speaker 2>the inside track with Michael and Tracho's the core We've

0:23:49.280 --> 0:23:52.440
<v Speaker 2>CEO now on hot off the heels on this particular deal.

0:23:53.160 --> 0:23:55.560
<v Speaker 2>Why Michael go vertically integrated?

0:23:55.680 --> 0:23:56.760
<v Speaker 3>Explain it for us.

0:23:56.920 --> 0:24:03.160
<v Speaker 11>Sure, thank you for having me and uh, the the

0:24:03.200 --> 0:24:07.080
<v Speaker 11>cloud marketing at large is going through this incredible inflection

0:24:07.200 --> 0:24:11.679
<v Speaker 11>point where the the scale of what needs to be built,

0:24:12.000 --> 0:24:16.239
<v Speaker 11>the type of infrastructure that needs to be built, the

0:24:16.280 --> 0:24:19.199
<v Speaker 11>software that's required to be able to build it, all

0:24:19.240 --> 0:24:24.880
<v Speaker 11>of those things are changing in a generational way. And

0:24:25.320 --> 0:24:29.919
<v Speaker 11>when we have talked about our company, when you know,

0:24:29.960 --> 0:24:32.000
<v Speaker 11>and I have now been shy about this, I believe

0:24:32.040 --> 0:24:38.680
<v Speaker 11>that there is an opportunity to U integrate so that vertically,

0:24:39.000 --> 0:24:43.880
<v Speaker 11>so that you can deliver the best solutions to your

0:24:43.880 --> 0:24:50.720
<v Speaker 11>clients that are the largest, most sophisticated consumers of this infrastructure.

0:24:51.119 --> 0:24:54.240
<v Speaker 11>And so we we you know earlier this year, you

0:24:54.280 --> 0:24:57.439
<v Speaker 11>saw us move up the stack with the acquisition of

0:24:57.520 --> 0:25:03.000
<v Speaker 11>weights and biases, where we an extension on the software

0:25:03.040 --> 0:25:06.200
<v Speaker 11>that we have right, so our software is like really

0:25:06.240 --> 0:25:14.800
<v Speaker 11>focused on orchestration and monitoring of the GBUS. As you

0:25:14.800 --> 0:25:17.600
<v Speaker 11>move up the stack into weights and bias, it connects

0:25:17.600 --> 0:25:19.800
<v Speaker 11>closer to the clients, and if you move down the stack,

0:25:20.560 --> 0:25:24.119
<v Speaker 11>you're down into the physical data centers, the power requirements,

0:25:24.119 --> 0:25:24.480
<v Speaker 11>all of those.

0:25:24.600 --> 0:25:27.920
<v Speaker 2>I think people the investibate saw weights and biases as

0:25:28.160 --> 0:25:31.919
<v Speaker 2>margin a creative, as more able to really bring the

0:25:31.920 --> 0:25:35.560
<v Speaker 2>profitability to bear. But many worry and I cite for example,

0:25:35.600 --> 0:25:38.520
<v Speaker 2>Stifel downgrading the stocks. They seem positive on the long

0:25:38.600 --> 0:25:42.520
<v Speaker 2>term idea of this purchase of core scientific but a

0:25:42.640 --> 0:25:47.160
<v Speaker 2>vertical data center provider changes the valuation structure from their perspective.

0:25:47.400 --> 0:25:50.040
<v Speaker 2>Why go down the stack when perhaps it doesn't mean

0:25:50.080 --> 0:25:50.720
<v Speaker 2>you as profitable.

0:25:51.080 --> 0:25:53.879
<v Speaker 11>Yeah, so I would I would take an issue with

0:25:53.880 --> 0:25:59.760
<v Speaker 11>that assessment. I think that there's enormous opportunities for us

0:25:59.840 --> 0:26:06.120
<v Speaker 11>to capture margin by insourcing the infrastructure component of it.

0:26:06.240 --> 0:26:08.920
<v Speaker 11>One number two is I think that in a market

0:26:08.960 --> 0:26:12.240
<v Speaker 11>that is as dynamic as this market, is the ability

0:26:12.280 --> 0:26:16.280
<v Speaker 11>to have more physical control over your ability to build

0:26:16.600 --> 0:26:21.720
<v Speaker 11>more control over your ability to deliver infrastructure is enormously

0:26:21.840 --> 0:26:24.520
<v Speaker 11>valuable to a company like ours. And what we're doing

0:26:24.720 --> 0:26:29.080
<v Speaker 11>by integrating with Core Scientific a company that we know

0:26:29.320 --> 0:26:32.679
<v Speaker 11>very very well. We have very long standing relationships with them.

0:26:33.440 --> 0:26:36.120
<v Speaker 11>Our first contract was in twenty eighteen.

0:26:36.520 --> 0:26:38.320
<v Speaker 3>And you tried to buy them for about a billion

0:26:38.359 --> 0:26:38.760
<v Speaker 3>last year.

0:26:38.840 --> 0:26:41.200
<v Speaker 11>R We did try to buy them for last year,

0:26:41.960 --> 0:26:45.520
<v Speaker 11>and during that period we've extended our relationship with them.

0:26:45.560 --> 0:26:51.399
<v Speaker 11>We've expanded our relationship with them, and we continue to think,

0:26:52.080 --> 0:26:55.080
<v Speaker 11>as they continue to think, that the integration of the

0:26:55.080 --> 0:27:00.080
<v Speaker 11>two companies is net positive for both investor groups. And

0:27:00.960 --> 0:27:03.439
<v Speaker 11>you know, over time, we believe that that will become

0:27:04.119 --> 0:27:07.040
<v Speaker 11>incredibly clear to the investing public at large.

0:27:07.080 --> 0:27:09.200
<v Speaker 2>And let's talk about that over time perspective, because I

0:27:09.240 --> 0:27:11.880
<v Speaker 2>think Rubin roy over at Stiefel is saying, look, longer term,

0:27:11.920 --> 0:27:14.280
<v Speaker 2>he does get it, but we need to see material

0:27:14.680 --> 0:27:16.560
<v Speaker 2>margin accretion and growth benefits.

0:27:16.600 --> 0:27:18.639
<v Speaker 3>What sort of time frame are you seeing that?

0:27:19.160 --> 0:27:22.000
<v Speaker 11>Yeah, So, look, when when you insource a data center

0:27:22.000 --> 0:27:25.800
<v Speaker 11>that you have a hosting contract with where where you're

0:27:26.280 --> 0:27:29.960
<v Speaker 11>building your infrastructures, immediate right, because as soon as you

0:27:30.280 --> 0:27:36.160
<v Speaker 11>acquire them, you've moved the contract with which you're paying

0:27:36.160 --> 0:27:39.399
<v Speaker 11>them on a monthly basis into internalizing it, and so

0:27:39.440 --> 0:27:43.320
<v Speaker 11>you will see a margin and creative impact associated with

0:27:43.480 --> 0:27:48.000
<v Speaker 11>us purchasing them as soon as this deal closes. And

0:27:48.080 --> 0:27:52.080
<v Speaker 11>so once again I take issue with with with the

0:27:52.440 --> 0:27:55.080
<v Speaker 11>assessment that this is not going to be margin a cretive.

0:27:55.119 --> 0:27:57.000
<v Speaker 11>I actually think it's going to be enormously marginal and

0:27:57.040 --> 0:28:00.480
<v Speaker 11>creative for the combined companies. But I also think it's

0:28:00.520 --> 0:28:04.040
<v Speaker 11>going to be incredibly constructive for our ability to meet

0:28:04.040 --> 0:28:06.879
<v Speaker 11>the demands of the clients. And what gets lost in

0:28:06.920 --> 0:28:10.919
<v Speaker 11>this discussion sometimes is that you have a group of

0:28:10.960 --> 0:28:17.520
<v Speaker 11>clients that are moving so incredibly fast to build infrastructure

0:28:17.560 --> 0:28:20.840
<v Speaker 11>at enormous scale that they require to be able to

0:28:20.880 --> 0:28:24.920
<v Speaker 11>deliver artificial intelligence to the world, our ability to control

0:28:25.840 --> 0:28:29.720
<v Speaker 11>our destiny in terms of how we build, where we build,

0:28:29.720 --> 0:28:33.160
<v Speaker 11>when we build. By integrating the two companies, where we're

0:28:33.160 --> 0:28:35.480
<v Speaker 11>making huge strides in that direction.

0:28:35.200 --> 0:28:37.800
<v Speaker 2>And you get one point three gigawats thereabouts of the

0:28:37.840 --> 0:28:39.960
<v Speaker 2>power that's going to be in the data centers. Just

0:28:39.960 --> 0:28:42.240
<v Speaker 2>talk to us a bit about say the Oracle open

0:28:42.280 --> 0:28:45.000
<v Speaker 2>AI reported deal four and a half gigawatts is what

0:28:45.040 --> 0:28:47.800
<v Speaker 2>they seeing promised to open AI in the longer term

0:28:48.040 --> 0:28:51.840
<v Speaker 2>is not achievable. That sort of measure of scale, of power,

0:28:51.880 --> 0:28:53.720
<v Speaker 2>of necessity to go into the data.

0:28:53.480 --> 0:28:57.560
<v Speaker 11>Centers it is. It's going to take a lot of work.

0:28:58.240 --> 0:29:02.600
<v Speaker 11>It's going to take a lot of of investment. It's

0:29:02.640 --> 0:29:04.600
<v Speaker 11>going to take a lot of thought around how you

0:29:04.680 --> 0:29:07.320
<v Speaker 11>do that. And that once again leans back into the

0:29:07.320 --> 0:29:09.960
<v Speaker 11>idea that you want to vertically integrate so that you

0:29:10.000 --> 0:29:12.720
<v Speaker 11>can do it in the most efficient, most effective way.

0:29:12.800 --> 0:29:13.800
<v Speaker 3>What's the hardest work.

0:29:14.480 --> 0:29:17.680
<v Speaker 11>Oh, there's a lot of hard work here right, Like

0:29:18.000 --> 0:29:22.000
<v Speaker 11>you know, the the integration of two companies is always challenging.

0:29:22.160 --> 0:29:28.000
<v Speaker 11>The ability to continue to extend our capacity to deliver

0:29:28.160 --> 0:29:31.480
<v Speaker 11>infrastructure is always enormously challenging.

0:29:31.520 --> 0:29:32.800
<v Speaker 3>Is energy that bottlening?

0:29:32.880 --> 0:29:37.000
<v Speaker 11>That energy is a bottleneck. The you know, the pipeline

0:29:37.000 --> 0:29:43.920
<v Speaker 11>of projects within the core scientific portfolio positions us to

0:29:44.120 --> 0:29:48.160
<v Speaker 11>jointly be able to deliver infrastructure on the largest scale

0:29:48.160 --> 0:29:49.920
<v Speaker 11>in the world. And so when you when you look

0:29:49.960 --> 0:29:52.440
<v Speaker 11>back over the last several months, you know, we did

0:29:52.480 --> 0:29:56.320
<v Speaker 11>a twelve billion dollar contract, right or just under twelve

0:29:57.320 --> 0:30:01.800
<v Speaker 11>you saw the thirty billion dollar contract. The demand is voracious.

0:30:01.320 --> 0:30:03.240
<v Speaker 2>And is it just coming from Microsoft? Is it coming

0:30:03.280 --> 0:30:04.000
<v Speaker 2>from more players.

0:30:04.000 --> 0:30:06.840
<v Speaker 11>Now for you, it's coming from more players. I mean

0:30:06.960 --> 0:30:09.920
<v Speaker 11>during during our earnings, you know, you heard me talk

0:30:09.960 --> 0:30:13.520
<v Speaker 11>about the fact that we actually had a second hyperscaler

0:30:13.640 --> 0:30:16.080
<v Speaker 11>begin to come on board and use us as a

0:30:16.080 --> 0:30:21.040
<v Speaker 11>solution for building the highest quality infrastructure and delivering compute

0:30:21.040 --> 0:30:23.560
<v Speaker 11>to them. And so you're you're really starting to see

0:30:23.920 --> 0:30:26.360
<v Speaker 11>us broadening our client base, which is going to be

0:30:26.400 --> 0:30:28.640
<v Speaker 11>a work in progress for for for a long time

0:30:28.680 --> 0:30:32.920
<v Speaker 11>because there is concentration with these really large contracts. But

0:30:32.960 --> 0:30:39.240
<v Speaker 11>it's it's been a you know, incredibly important for the

0:30:39.280 --> 0:30:42.320
<v Speaker 11>whole company and for the investors in the company to

0:30:42.360 --> 0:30:45.480
<v Speaker 11>see the progress that we're making bringing on more and

0:30:45.520 --> 0:30:48.520
<v Speaker 11>more names, you know, across the enterprise space, more names

0:30:48.520 --> 0:30:55.560
<v Speaker 11>across the IDAI labs and the AI native, increasingly building

0:30:55.560 --> 0:30:59.080
<v Speaker 11>our footprint among the clouds. It's it's really been a

0:31:00.680 --> 0:31:03.880
<v Speaker 11>great indication of the demand for the product that we deliver,

0:31:04.160 --> 0:31:06.640
<v Speaker 11>and we're positioning ourselves to be able to deliver it

0:31:06.840 --> 0:31:07.959
<v Speaker 11>faster and larger.

0:31:08.120 --> 0:31:10.040
<v Speaker 2>And the share price has rocketed off the back of

0:31:10.080 --> 0:31:13.280
<v Speaker 2>it since your IPO earlier this year. But I try

0:31:13.320 --> 0:31:15.800
<v Speaker 2>and understand a little bit about the acquisition play that

0:31:15.840 --> 0:31:17.920
<v Speaker 2>you're making the fact that looks as though you're im

0:31:17.920 --> 0:31:18.920
<v Speaker 2>boltant to do more.

0:31:19.440 --> 0:31:21.600
<v Speaker 3>Where is it most important to do it? Is it

0:31:22.200 --> 0:31:25.160
<v Speaker 3>the downstack, is it hire and stack? Is it more

0:31:25.200 --> 0:31:26.360
<v Speaker 3>about the software and services?

0:31:26.680 --> 0:31:29.200
<v Speaker 11>So we really do look at it from a long

0:31:29.320 --> 0:31:32.160
<v Speaker 11>term perspective, and it's what's allowed us to build a

0:31:32.200 --> 0:31:36.360
<v Speaker 11>company that is breaking the mold to an extent in

0:31:36.440 --> 0:31:39.520
<v Speaker 11>terms of launching the AI cloud, a new cloud, a

0:31:39.560 --> 0:31:42.960
<v Speaker 11>cloud that doesn't fit into the history of the Big

0:31:43.000 --> 0:31:45.959
<v Speaker 11>three right, and that's been based on the idea that

0:31:46.280 --> 0:31:49.240
<v Speaker 11>you're making decisions about what it takes to deliver the

0:31:49.320 --> 0:31:53.560
<v Speaker 11>highest quality infrastructure and products to your clients. You will

0:31:53.560 --> 0:31:57.840
<v Speaker 11>see us continue to build up the stack. This acquisition,

0:31:58.200 --> 0:32:00.640
<v Speaker 11>of course, Scientific is an example of us going down

0:32:00.640 --> 0:32:02.720
<v Speaker 11>the stack. We have other data centers that we are

0:32:02.720 --> 0:32:05.880
<v Speaker 11>building internal to the company. You know, it's part of

0:32:05.920 --> 0:32:09.480
<v Speaker 11>this strategy of how you get to scale, because only

0:32:09.520 --> 0:32:13.520
<v Speaker 11>by getting to scale are you relevant in this revolution

0:32:13.680 --> 0:32:17.040
<v Speaker 11>that's occurring within the cloud space. And this is an

0:32:17.240 --> 0:32:20.400
<v Speaker 11>important building block, an important step for us to be

0:32:20.440 --> 0:32:24.080
<v Speaker 11>able to ensure that we are able to continue to

0:32:24.200 --> 0:32:27.080
<v Speaker 11>participate in the scale building of this infrastructure.

0:32:27.480 --> 0:32:29.880
<v Speaker 2>We loved hearing the Vision Mia Colent traitor, thanks for

0:32:29.920 --> 0:32:32.080
<v Speaker 2>coming on to join with us, is the CEO of

0:32:32.120 --> 0:32:34.440
<v Speaker 2>cour We've hot on the heels of that big deal. Meanwhile,

0:32:34.440 --> 0:32:37.640
<v Speaker 2>coming up start up Nothing is betting big on a

0:32:37.680 --> 0:32:40.880
<v Speaker 2>phone they designed to be used less then nothing, CEO,

0:32:41.080 --> 0:32:41.520
<v Speaker 2>He'll pay you.

0:32:41.560 --> 0:33:01.680
<v Speaker 3>That's next, the say is blue Bag Tech. Let's take

0:33:01.720 --> 0:33:02.320
<v Speaker 3>a quick.

0:33:02.160 --> 0:33:05.120
<v Speaker 2>Check in on Tesla shares now, because we're trying to

0:33:05.160 --> 0:33:07.560
<v Speaker 2>make up some lost ground today at least, but we

0:33:07.640 --> 0:33:09.880
<v Speaker 2>are still lower of the course of the last three

0:33:09.920 --> 0:33:12.560
<v Speaker 2>training days by more than four percent. After Elon Musk

0:33:12.600 --> 0:33:15.320
<v Speaker 2>announced he's forming a new political.

0:33:14.800 --> 0:33:15.880
<v Speaker 3>Party over the weekend.

0:33:15.880 --> 0:33:18.640
<v Speaker 2>Of course, now Ark in their CEO Kathy Wood joined

0:33:18.640 --> 0:33:22.160
<v Speaker 2>Bluemberg Surveillance earlier to weigh in on this, as some

0:33:22.240 --> 0:33:24.520
<v Speaker 2>analysts call for the company's board to get involved to

0:33:24.560 --> 0:33:28.160
<v Speaker 2>address masks politicking and whether it has hurt Tesla's standing

0:33:28.200 --> 0:33:29.120
<v Speaker 2>with car buyers.

0:33:30.160 --> 0:33:34.520
<v Speaker 4>We've been dealing with controversy around Elon Musk in one

0:33:34.560 --> 0:33:37.600
<v Speaker 4>form or another since we first bought the stock when

0:33:37.640 --> 0:33:40.760
<v Speaker 4>the company was founded in twenty fourteen, and we owned

0:33:40.760 --> 0:33:44.200
<v Speaker 4>Tesla in it's one of the top holdings in three

0:33:44.240 --> 0:33:49.520
<v Speaker 4>of our ETF so arkk W and Q so we

0:33:49.560 --> 0:33:51.840
<v Speaker 4>are watching this like a haark, no question about it.

0:33:51.920 --> 0:33:56.200
<v Speaker 4>But with the experience over the last eleven years, we

0:33:56.320 --> 0:34:01.120
<v Speaker 4>turn around today and see Tesla really not an EV

0:34:01.200 --> 0:34:05.840
<v Speaker 4>manufacturer anymore. Moving into the robotaxi age, we believe successfully

0:34:05.960 --> 0:34:09.120
<v Speaker 4>and we believe it will scale much better than most

0:34:09.120 --> 0:34:14.880
<v Speaker 4>of its competitors. We see SpaceX really only ninety percent

0:34:14.920 --> 0:34:20.560
<v Speaker 4>of all of the satellites out there, neurally transforming lives

0:34:20.560 --> 0:34:24.640
<v Speaker 4>of paralyzed people, people with als, and probably most surprising

0:34:24.680 --> 0:34:28.200
<v Speaker 4>of all, XAI. Now we own all of those again

0:34:28.640 --> 0:34:33.640
<v Speaker 4>in our venture fund, following them very carefully. XAI is

0:34:34.160 --> 0:34:38.680
<v Speaker 4>on some benchmarks. It hit a point that three pro

0:34:39.360 --> 0:34:42.920
<v Speaker 4>hit in June, it hit it in February. So you know,

0:34:43.400 --> 0:34:47.760
<v Speaker 4>we are very focused on barriers to entry technology moats

0:34:48.640 --> 0:34:52.440
<v Speaker 4>and we believe that the moats that Elon has built,

0:34:52.440 --> 0:34:55.799
<v Speaker 4>and obviously this is not just Elon. He's attracting the

0:34:55.840 --> 0:34:59.440
<v Speaker 4>best and the brightest to help solve some of the

0:34:59.480 --> 0:35:05.240
<v Speaker 4>world's biggest problems. So again we do trust the board

0:35:05.719 --> 0:35:10.920
<v Speaker 4>and the board's instincts here and we stay out of politics.

0:35:11.000 --> 0:35:13.279
<v Speaker 8>Well, we'd love your opinion on the current situation, just

0:35:13.320 --> 0:35:16.680
<v Speaker 8>on TESTA specifically, you mentioned some phenomenal companies doing some

0:35:17.040 --> 0:35:20.080
<v Speaker 8>incredible things for Tesla, though, do you believe that Elon

0:35:20.480 --> 0:35:23.600
<v Speaker 8>can pursue his political ambitions at the same time pursuing

0:35:23.920 --> 0:35:25.799
<v Speaker 8>the best interest of Tesla shareholders.

0:35:27.360 --> 0:35:30.879
<v Speaker 4>One of the announcements Elon made recently is that he

0:35:31.160 --> 0:35:35.440
<v Speaker 4>is going to oversee sales in the US and in Europe.

0:35:35.640 --> 0:35:40.080
<v Speaker 4>And when he puts his mind on something, he usually gets.

0:35:39.880 --> 0:35:40.640
<v Speaker 3>The job done.

0:35:42.040 --> 0:35:45.759
<v Speaker 2>I confess CEO and CIO Kathy with them and let's

0:35:45.800 --> 0:35:49.520
<v Speaker 2>talk about nothing. It's the hardware startup taking aim at

0:35:49.520 --> 0:35:52.160
<v Speaker 2>the big smartphone makers like Apple, like Samsung is the

0:35:52.200 --> 0:35:54.640
<v Speaker 2>latest phone three is launching.

0:35:54.200 --> 0:35:56.680
<v Speaker 3>With a design actually aimed to be used less.

0:35:57.040 --> 0:35:59.840
<v Speaker 2>Joining us now is Carl Pai Nothing co founder CEO

0:36:00.040 --> 0:36:01.400
<v Speaker 2>are in New York over from London.

0:36:02.160 --> 0:36:04.520
<v Speaker 3>Why do we need a smartphone that we use less?

0:36:06.640 --> 0:36:09.360
<v Speaker 12>Smartphones used to be these tools that were supposed to

0:36:09.360 --> 0:36:12.120
<v Speaker 12>make us more creative and more productive, just like the

0:36:12.160 --> 0:36:14.279
<v Speaker 12>personal computer. Right, it was a bicycle for the mind.

0:36:14.920 --> 0:36:18.400
<v Speaker 12>But today on smartphones we just keep doing scrolling. And

0:36:18.440 --> 0:36:21.160
<v Speaker 12>we wanted to create a product that help people be

0:36:21.239 --> 0:36:23.200
<v Speaker 12>more in focus. Right, So if you put the phone down,

0:36:23.239 --> 0:36:25.439
<v Speaker 12>you can still be notified about the most important things.

0:36:25.440 --> 0:36:28.640
<v Speaker 12>That are happening without always checking your screen. I don't

0:36:28.640 --> 0:36:30.799
<v Speaker 12>know about you, but for me sometimes when I have

0:36:30.840 --> 0:36:33.680
<v Speaker 12>to respond to an important message, I just happened to

0:36:33.680 --> 0:36:36.160
<v Speaker 12>go into my social media and scroll a bit afterwards.

0:36:36.239 --> 0:36:38.680
<v Speaker 3>Yeah, so it's keeping you engaged in the process.

0:36:38.960 --> 0:36:42.839
<v Speaker 2>What's interesting is, well, it looks like nothing else really

0:36:42.880 --> 0:36:44.920
<v Speaker 2>on the market. People have loved that. The geeks in

0:36:44.960 --> 0:36:47.040
<v Speaker 2>particular have loved that. But what sort of scale you're

0:36:47.040 --> 0:36:48.319
<v Speaker 2>getting to now? Who is buying this?

0:36:49.120 --> 0:36:51.960
<v Speaker 12>Yeah, so we're targeting a very different customer base. As

0:36:51.960 --> 0:36:54.120
<v Speaker 12>a startup, we're really focused on our users, the young

0:36:54.200 --> 0:36:59.239
<v Speaker 12>creatives today we are this year, we're doing about a

0:36:59.239 --> 0:37:03.200
<v Speaker 12>billion in revenue. Last year we did north of five

0:37:03.239 --> 0:37:07.359
<v Speaker 12>hundred millions. We're doubling this year and it's a good start,

0:37:07.480 --> 0:37:08.239
<v Speaker 12>but a long way to go.

0:37:08.360 --> 0:37:10.280
<v Speaker 2>What are they trading in for because this is Android

0:37:10.320 --> 0:37:14.200
<v Speaker 2>operating system. Are people ditching their Samsungs? They ditching their apples?

0:37:14.239 --> 0:37:14.839
<v Speaker 3>What are they doing?

0:37:14.920 --> 0:37:15.120
<v Speaker 5>Yeah?

0:37:15.600 --> 0:37:17.719
<v Speaker 12>Our users come from all over the industry. Actually, we

0:37:17.760 --> 0:37:20.480
<v Speaker 12>have two types of products. We have earbuds and smartphones.

0:37:21.120 --> 0:37:23.640
<v Speaker 12>For our earbuds, more than half of the users come

0:37:23.680 --> 0:37:27.920
<v Speaker 12>from iPhone, which is really surprising to us and our

0:37:27.960 --> 0:37:31.120
<v Speaker 12>phones come from all over the market, but we do

0:37:31.239 --> 0:37:33.359
<v Speaker 12>see a lot of iPhone users switching to US.

0:37:33.800 --> 0:37:35.040
<v Speaker 3>Where are these being made?

0:37:35.600 --> 0:37:38.120
<v Speaker 12>We manufacture most of our phones in India, but we

0:37:38.160 --> 0:37:40.279
<v Speaker 12>also have a site in China, and we have a

0:37:40.320 --> 0:37:41.680
<v Speaker 12>new site coming up soon as well.

0:37:41.760 --> 0:37:45.040
<v Speaker 3>Where would that be to be announced? Okay?

0:37:45.120 --> 0:37:48.399
<v Speaker 2>Interesting, because what do you you're a man who's you've

0:37:48.400 --> 0:37:51.960
<v Speaker 2>built companies before. Boy, have you built well over in China?

0:37:52.040 --> 0:37:55.120
<v Speaker 2>You sort of stuck in really in the Chinese smart

0:37:55.320 --> 0:38:00.360
<v Speaker 2>phone industry yourself, and now we're seeing this pushback in America,

0:38:00.360 --> 0:38:02.720
<v Speaker 2>in particular manufacturing in the United States.

0:38:02.880 --> 0:38:03.759
<v Speaker 3>What do you make of.

0:38:03.680 --> 0:38:06.160
<v Speaker 2>That ability, that capability to get the scale the talent

0:38:06.239 --> 0:38:06.920
<v Speaker 2>here in the US.

0:38:07.320 --> 0:38:09.520
<v Speaker 12>It's not something that we thought about a lot because

0:38:10.239 --> 0:38:13.680
<v Speaker 12>we've been really focused on markets like Europe and India,

0:38:13.719 --> 0:38:17.280
<v Speaker 12>and we're manufacturing in India. Recently, we just started exploring

0:38:17.320 --> 0:38:19.200
<v Speaker 12>how to export from India to the rest of the

0:38:19.200 --> 0:38:21.959
<v Speaker 12>world with a phone three. Actually we're exporting from India

0:38:22.000 --> 0:38:22.479
<v Speaker 12>to the US.

0:38:22.520 --> 0:38:23.919
<v Speaker 3>How hard is that with tariff's?

0:38:24.239 --> 0:38:28.600
<v Speaker 12>Uh, it's it's okay. I mean, I don't think the

0:38:28.640 --> 0:38:29.840
<v Speaker 12>tarifts are that bad from India.

0:38:30.440 --> 0:38:32.200
<v Speaker 2>Okay, So you don't think that a little bit of

0:38:32.200 --> 0:38:34.880
<v Speaker 2>a hit to what is a more expensive version of

0:38:34.880 --> 0:38:36.480
<v Speaker 2>the phones that you're now having? What is it sem

0:38:36.600 --> 0:38:39.840
<v Speaker 2>nine to nine as the price point for this particular phone.

0:38:40.360 --> 0:38:41.719
<v Speaker 2>Why go to that upscale level?

0:38:41.760 --> 0:38:43.440
<v Speaker 3>You've been more of a mid range kind of.

0:38:45.239 --> 0:38:47.640
<v Speaker 12>We always wanted to compete on the flagship level, but

0:38:47.920 --> 0:38:49.959
<v Speaker 12>we had to build a lot of our capabilities because

0:38:50.040 --> 0:38:52.720
<v Speaker 12>when we sell a product at eight hundred dollars, people

0:38:52.760 --> 0:38:56.640
<v Speaker 12>expect the best the best camera, the best screen, the

0:38:55.760 --> 0:39:00.520
<v Speaker 12>best of everything. And building a smartphone company is hard,

0:39:00.560 --> 0:39:02.560
<v Speaker 12>like all types of hardware is hard, but smartphones are

0:39:02.600 --> 0:39:05.920
<v Speaker 12>particularly hard. I think we finally got to a space

0:39:05.960 --> 0:39:09.520
<v Speaker 12>where our engineering capability is at the level where we

0:39:09.520 --> 0:39:10.800
<v Speaker 12>can take a shot at the flagship.

0:39:11.640 --> 0:39:15.480
<v Speaker 2>You have that experience having helped build OnePlus now with nothing,

0:39:16.120 --> 0:39:18.160
<v Speaker 2>how much is there now? Focus on the AI integration

0:39:18.200 --> 0:39:19.840
<v Speaker 2>because that's where Apple seems to be stumbling.

0:39:19.960 --> 0:39:23.120
<v Speaker 12>Yeah, we're super excited about AI. We're not really focused

0:39:23.120 --> 0:39:25.440
<v Speaker 12>on the large language models, but we're focused on how

0:39:25.440 --> 0:39:28.640
<v Speaker 12>to apply AI. And I believe that to win in

0:39:28.719 --> 0:39:31.600
<v Speaker 12>consumer AI, you need to own your own hardware. And

0:39:31.680 --> 0:39:33.880
<v Speaker 12>for me, the smartphone is the most exciting piece of

0:39:33.880 --> 0:39:37.760
<v Speaker 12>hardware because of two reasons. It's got the most scale,

0:39:37.920 --> 0:39:41.000
<v Speaker 12>right because more than one point two billions smartphones are

0:39:41.040 --> 0:39:43.840
<v Speaker 12>sold every year, and it's also got the most depth

0:39:44.239 --> 0:39:45.960
<v Speaker 12>in terms of what we do on our phones. We

0:39:46.000 --> 0:39:49.080
<v Speaker 12>do everything. So I think consumer AI needs both scale

0:39:49.080 --> 0:39:50.839
<v Speaker 12>and depth because we want to be able to really

0:39:50.920 --> 0:39:54.600
<v Speaker 12>understand the users, to then automate the smartphone use as

0:39:54.680 --> 0:39:55.720
<v Speaker 12>much as possible.

0:39:55.320 --> 0:39:57.680
<v Speaker 2>For them to do all of that, and to get

0:39:57.680 --> 0:39:58.960
<v Speaker 2>more manufacturing footprint.

0:39:59.200 --> 0:40:01.320
<v Speaker 3>You need money. Are you raising money? What sort of

0:40:01.400 --> 0:40:02.200
<v Speaker 3>scale do you need?

0:40:02.640 --> 0:40:04.839
<v Speaker 12>We raised about two hundred and fifty million dollars so far.

0:40:04.960 --> 0:40:08.160
<v Speaker 12>We've been relatively capital efficient. We've done more than a

0:40:08.160 --> 0:40:10.919
<v Speaker 12>billion dollars in lifetime sales. We're doing a billion dollars

0:40:11.400 --> 0:40:14.879
<v Speaker 12>in sales this year. Of course, we're always entertaining conversations,

0:40:14.920 --> 0:40:16.560
<v Speaker 12>but we have nothing to announce right now.

0:40:17.120 --> 0:40:20.120
<v Speaker 2>Please come back when you do call pay of nothing

0:40:20.239 --> 0:40:21.319
<v Speaker 2>great to have some time with him