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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: From Mahart where Innovation, money and power Collie in Silicon Valley, Nbon.

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Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.

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Speaker 3: I'm Caroline Heidel Bloomberg's World headquarters in New York.

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Speaker 4: Ed Ludlow is off.

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Speaker 3: This is Bloomberg Technology coming up exclusive reporting that chip

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Speaker 3: giants TSMC and ASML well they can remotely shut down

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Speaker 3: the key equipment in event of an invasion to Taiwan.

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Speaker 4: Details to come.

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Speaker 3: Plus, we hear from Microsoft CEO Saty Innadella as its

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Speaker 3: Bill Developers conference kicks off, and actress Scarlett Johansson pushes

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Speaker 3: back against open Ai and that eerily similar Sky Voice.

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Speaker 3: All that and so much more ahead. But first, that's

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Speaker 3: checking on these markets. We want to go higher. We

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Speaker 3: want to keep those record highs going. It seems on

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Speaker 3: the SMP. Certainly the NASDAK turns flat. I'm pushing forward

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Speaker 3: also to what's happening in crypto. We'll get back to

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Speaker 3: what the MAINNGJA benchmarks are doing at the moment, but

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Speaker 3: crypto has been a key story.

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Speaker 4: Of course.

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Speaker 3: This all eyes shifting from what we saw was a

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Speaker 3: spot bitcoin ETF now to potentially a spot ETF. But

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Speaker 3: there is the NASDAK currently just trading into positive territory.

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Speaker 3: We are on a new record high. We're a new

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Speaker 3: record high in the SMP. Not so on the stock

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Speaker 3: six hundred and over in Europe actually off by about

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Speaker 3: a quarter of a percent. But all eyes focused on

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Speaker 3: FED talk today. Raphile Bostic of course, still trying to

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Speaker 3: analyze the data many of FED talk coming to us.

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Speaker 3: But also we're seeing what's happening with the ten year

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Speaker 3: yield currently off by some three basis points. So maybe

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Speaker 3: a bit of buying into the bomb market right now,

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Speaker 3: as we also push forward to what's happening in earnings.

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Speaker 3: Let's have a look at some of the individual movers

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Speaker 3: that we've been seeing, and Palo Alto Networks, one of

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Speaker 3: the key forwards, is actually coming off of its lows.

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Speaker 4: We're down only now four percent.

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Speaker 3: Why cybersecurity company just posting revenue that's eleven percent, well,

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Speaker 3: thirty fifteen percent growth on.

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Speaker 4: A year on year basis.

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Speaker 3: That's not the twenty to thirty percent revenue growth what

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Speaker 3: we used to do with a cybersecurity company.

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Speaker 4: We go speaking to the CEO a little bit later,

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Speaker 4: in the show in.

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Speaker 3: Vidia trading flat ahead of its all in important earnings tomorrow.

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Speaker 3: But what's key is this relationship, of course with what

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Speaker 3: they've been talking about in ai and Taiwan, how dependent

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Speaker 3: they are on TSMC to deliver the sort of super

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Speaker 3: chips that the market is so dependent on. And a

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Speaker 3: really interesting piece of reporting therefore on ASML and TSMC

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Speaker 3: today coming from Bloomberg SML is off.

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Speaker 4: By one and a half percent.

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Speaker 3: That's as we see that exclusive reporting coming from our

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Speaker 3: colleague showing that in an event that China invades Taiwan,

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Speaker 3: both TSMC and of course the chip equipment making company

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Speaker 3: ASML could basically have a kill switch. They can remotely

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Speaker 3: disable their chip making machines. We heard about the importance

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Speaker 3: in fact of Taiwan from Nvidia's CEO Jensen one and

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Speaker 3: the Dell World conference just yesterday.

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Speaker 5: Listen, Taiwan is at the epicenter of the world's technology

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Speaker 5: supply flight chain. Without Taiwan, it would be very difficult

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Speaker 5: for Michael and I to do our jobs, it would

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Speaker 5: be very difficult for us to serve Bill and his company,

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Speaker 5: And so the technology industry depends very heavily on Taiwan.

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Speaker 5: Who continues to for some time.

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Speaker 3: The ai juggernaut has spoken and he's saying that Taiwan

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Speaker 3: is really important as if we forgot, we'll pleased to

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Speaker 3: go join in Washington bluebags. Mike Shephard, this is an

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Speaker 3: extraordinary piece of reporting. Ultimately companies having to ease US

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Speaker 3: government concerns here, Well, that's right.

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Speaker 6: And this is actually answering with this reporting one of

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Speaker 6: the fundamental questions surrounding Taiwan, one of the big what ifs.

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Speaker 6: For years, the US government has warned that, you know,

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Speaker 6: China has its eyes on Taiwan and may try to

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Speaker 6: reunite with the island using military force. Now Beijing has

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Speaker 6: that they have no interest in doing so. They would

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Speaker 6: prefer peaceful reunification, but they have not ruled out military

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Speaker 6: intervention at the same time, so one of the key

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Speaker 6: questions is what happens if this takes place. One of

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Speaker 6: the big questions is what happens to the semiconductor industry.

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Speaker 6: Taiwan is responsible for ninety percent of the world supply

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Speaker 6: the most advanced chips, the kind that supply and video.

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Speaker 6: We just heard from Jensen, why are you talking about that?

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Speaker 6: And it is so essential for the US we saw

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Speaker 6: during the pandemic and more recently with the earthquake in Taiwan,

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Speaker 6: the concerns about any sort of supply chain disruption.

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Speaker 3: Really, what's phenomenal here is that ASML is the lynchpin. Really,

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Speaker 3: it's shipped more than two hundred of these very sophisticated

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Speaker 3: EUV machines to clients outside of China. But they also

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Speaker 3: do still ship to China, but far less technically sophisticated

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Speaker 3: kinds of machines. Nevertheless, it looks as China has really

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Speaker 3: been making strides in self sufficiency here.

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Speaker 6: Michael, Well, you're right, it has, and we saw a

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Speaker 6: sample of that last year during US Commerce Secretary Gina

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Speaker 6: Raymondo's visit to mainland China, they Huawei Technologies unveiled a

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Speaker 6: brand new smartphone and May sixty that featured a much

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Speaker 6: faster semiconductor a processing chip than anybody thought they were

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Speaker 6: capable of generating and using in a consumer device like that.

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Speaker 6: It was a seven animeter chip, very very small, and

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Speaker 6: the US was taken aback by it, and it was

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Speaker 6: made in part with older generation ASML machines, but with

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Speaker 6: technology that came from other sources as well. It was

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Speaker 6: a sign that the concern is that China will be

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Speaker 6: able to catch up in terms of technological advances in

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Speaker 6: producing these semiconductors, and it requires sensitive equipment like the

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Speaker 6: kind that ASML makes. ISML is the only producer of

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Speaker 6: these machines called extreme ultraviolet machines, and they harness light

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Speaker 6: waves to create these tiny, tiny transistors that you need

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Speaker 6: a microscope to look at, and yet they do all

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Speaker 6: these powerful computations of the likes that artificial intelligence and

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Speaker 6: even military applications require. So the sensitivity of this is.

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Speaker 4: Very clear.

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Speaker 6: What we're talking about though, also is a maintenance function

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Speaker 6: because these EUV machines, as they're known, they require a

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Speaker 6: lot of upkeep and the company ASML needs to be

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Speaker 6: able to turn them off remotely just for maintenance purposes. However,

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Speaker 6: they now have a geopolitical significance too.

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Speaker 3: Michael Shepard weaving it all together for us so beautifully,

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Speaker 3: we thank you so much, and look at has real

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Speaker 3: effects on companies' earnings.

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Speaker 7: Here.

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Speaker 3: SML has said with the latest export controls on their

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Speaker 3: ability to shift to China, they could see a revenue

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Speaker 3: impact of some fifteen.

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Speaker 4: Percent this year.

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Speaker 3: We look ahead to what's happening within video earnings yet

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Speaker 3: to come, and we know they've got exposure to China too,

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Speaker 3: as we've all together with Christina Hooper, Investco's chief global

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Speaker 3: market strategists, and I'm just going to kick off with ultimately,

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Speaker 3: China is a headwind at the moment where record highs across.

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Speaker 4: All major benchmarks in the US. Is China much of

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Speaker 4: a headwind from your perspective, I don't think so. Clearly.

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Speaker 1: There are always going to be geopolitical tensions, issues concerns,

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Speaker 1: but markets have a funny way of putting blinders on

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Speaker 1: and focusing on what's the most important fundamentals as well

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Speaker 1: as monetary policy in these challenging.

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Speaker 4: Times and these unique times.

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Speaker 1: And so I think there's a calculus that has gone

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Speaker 1: on that has said, yes, you know, there are a

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Speaker 1: number of risks out there, but we're going to keep

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Speaker 1: investing and we're going to continue to enjoy the earnings

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Speaker 1: growth that we've seen.

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Speaker 3: And talking of earnings growth, everyone waiting with baited breath

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Speaker 3: and what sort of growth in vidio does indeed post

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Speaker 3: after the bell tomorrow in excess of two hundred percent

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Speaker 3: increase in revenue is extraordinary. There is a market from

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Speaker 3: the back of reporting coming from other titles today, that

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Speaker 3: maybe there'll be some sort of pocket air pocket in

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Speaker 3: between some of the more sophisticated chips that was being

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Speaker 3: made from a Grace Hopper perspective. Buy in Nvidia moving

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Speaker 3: onto the Grace Blackwell and Amazon, for example, pausing the

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Speaker 3: ones on the less sophisticated Grace Hopper. Does that ultimately

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Speaker 3: matter more the Nvidia intricacies that who's buying who's not

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Speaker 3: than say FED policy right now.

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Speaker 1: Well, for the tech sector, perhaps it's in Vidia, But

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Speaker 1: I think when we take a step back and look

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Speaker 1: at what is likely to help markets move forward, it's

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Speaker 1: rate cuts. The reality is that it impacts the tech

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Speaker 1: sector in particular because typically when we see higher yields,

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Speaker 1: when the ten years higher, that exerts downward pressure on

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Speaker 1: technology stocks and vice versa. The higher valuation names are

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Speaker 1: more sensitive. So I think that that right now is important.

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Speaker 1: Certainly in Video's important for Nvidia, for for semiconductors, for

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Speaker 1: the tech sector, but right now there is a weight

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Speaker 1: on for central banks to start cutting.

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Speaker 4: We've gotten a.

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Speaker 1: Few little cuts so far Swiss National Bank, Risk Bank,

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Speaker 1: but now we're ready for more.

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Speaker 4: And I look at it this way.

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Speaker 1: We you know, as a parent of teenagers, a son

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Speaker 1: who went through the college process a couple of years ago.

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Speaker 1: He got into school off the waitlist, some kids got

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Speaker 1: in early decision. They all wound up graduating at the

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Speaker 1: same time with the same degree. And so we're going

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Speaker 1: to see probably the first mover is going to be

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Speaker 1: the ECB, maybe the Bank of Canada given the inflation print,

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Speaker 1: but the FED will be along this year as well,

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Speaker 1: and we'll get a few rate cuts. We'll all end

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Speaker 1: up pretty much in the same place, but we're going

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Speaker 1: to see We're probably going to see others start the

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Speaker 1: ball rolling, other majors start the ball rolling before.

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Speaker 4: We see the FED. So in a way, be patient.

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Speaker 3: Christina, should you buy into tech for all viewers now?

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Speaker 4: On the biasis of macro policy?

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Speaker 1: Well, I'm not a believer in market timing because it

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Speaker 1: is so hard to do, but I do think starting

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Speaker 1: to increase exposure now as we wait for rate cuts

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Speaker 1: to begin is arguably a very sensible strategy. Many investors,

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Speaker 1: retail and institutional, are overweight to cash, and so certainly

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Speaker 1: they should be taking some money off the sidelines and

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Speaker 1: moving it into fixed income, locking in rates on the

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Speaker 1: long end, but also they should be moving into equities,

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Speaker 1: and it's not just tech. I think tech's very attractive,

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Speaker 1: but for valuation reasons, European equities, UK equities, Emerging markets equities,

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Speaker 1: there are a lot of opportunities out there for different reasons.

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Speaker 4: On industry groups.

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Speaker 3: Utility is doing very well, but also because everyone thinks

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Speaker 3: that's an AI play.

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Speaker 1: Absolutely, who would have ever thunk it. That was not

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Speaker 1: on my Bingo card for this year, but utilities absolutely

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Speaker 1: are ANAI play.

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Speaker 4: So do you.

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Speaker 3: Think that ultimately we should start spreading our wings from

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Speaker 3: an industry perspective as well as a geographical perspective.

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Speaker 1: Yes, absolutely, But we have to recognize a lot of

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Speaker 1: the very significant earnings growth is coming from.

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Speaker 4: The tech sector especially.

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Speaker 1: You know, when we look at at the industries within tech,

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Speaker 1: three of them are delivering double digit earnings growth. So

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Speaker 1: that is a compelling place. We just have to recognize

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Speaker 1: that valuations are higher.

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Speaker 3: This only our all eyes still on tomorrow's set of

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Speaker 3: earnings or great macro perspective. Coming from Invesco Chief Global

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Speaker 3: Strategist Christina Hooper, we love having her hair. Let's talk

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Speaker 3: zoom video for a moment reporting as first quarter results

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Speaker 3: and they beat expectations on the prior quarter.

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Speaker 4: It's the sales forecast perhaps.

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Speaker 3: That had some people trying to understand where there's conservative

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Speaker 3: elements are lying and where the opportunities are too. Let's

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Speaker 3: talk through it all as the shares push higher with

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Speaker 3: Kelly Steckelberg Zoom CFO to have you here in New

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Speaker 3: York with us, Kelly, and there is some concern about

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Speaker 3: perhaps a more cautious forecast. Can you talk us through

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Speaker 3: how you've seen small medium sized enterprise demand for your

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Speaker 3: products at the moment.

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Speaker 8: Sure. So, first of all, we were very pleased with

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Speaker 8: our Q one results. We beat analyst expectations across revenue, profitability,

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Speaker 8: and free cash flow, and we reported you know, Q

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Speaker 8: one revenue of one point one four one billion dollars

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Speaker 8: up three percent year every year. We did see growth

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Speaker 8: in our enterprise which was up five percent year every year.

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Speaker 8: And then turn in terms of SMB, which we've gotten

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Speaker 8: a lot of questions about. We support that segment of

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Speaker 8: our business, mostly through our online segment, and that actually

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Speaker 8: did better than we expected this quarter. So very pleased

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Speaker 8: with the results across all of our segments.

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Speaker 4: You are a numbers person.

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Speaker 3: We saw the number of enterprise customs declined slightly, but

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Speaker 3: there was a reshuffling of who.

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Speaker 4: Actually fills into those gaps.

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Speaker 3: They accounting for the difference of of how you count customers.

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Speaker 4: But why are they declining? How do we digest that

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Speaker 4: to climb Yeah.

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Speaker 8: What I really want to point out, as you just said,

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Speaker 8: we did transition some customers from the direct segment online

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Speaker 8: just to promote better self service. These are typically, you know,

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Speaker 8: much smaller customers. Where we continue to see growth is

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Speaker 8: in the upmarket. So when you look at customers that

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Speaker 8: contribute more than one hundred thousand dollars of trailing twelvemonth revenue,

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Speaker 8: that was actually up eight percent year every year. So

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Speaker 8: that's the segment of the business that is really helping

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Speaker 8: us drive growth and where we're really focused, you know,

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Speaker 8: on the smaller end those customers, we give them a

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Speaker 8: lot of flexibility. They come and go as they please.

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Speaker 8: They sometimes you know, turn the service off while they

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Speaker 8: take a break with their kids, and then they come

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Speaker 8: back when it serves them.

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Speaker 3: Well, let's talk about some of the areas that you

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Speaker 3: have been pushing into to diversify. In particular, I'm thinking

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Speaker 3: of contact central workforce engagement, management of AI now city

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Speaker 3: group analysts and I know you love having analysts notes

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Speaker 3: reported back to you, but they say it find it

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Speaker 3: a bit hard to see a durable offway to reaccelerating growth.

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Speaker 4: Paint that picture therefore, Yeah, accelerating cround.

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Speaker 8: So we talked about this a lot on the call yesterday.

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Speaker 8: We've said that we expect growth in the second half

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Speaker 8: of the year to start to reaccelerate. You mentioned contact center.

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Speaker 8: We announced yesterday we have over ninety customers now in

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Speaker 8: our contact center that are contributing more than one hundred

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Speaker 8: thousand dollars of trailing twelvemonth revenue, which highlights these are

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Speaker 8: sophisticated buyers and our products are now competing with the

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Speaker 8: top four in the Gartner Magic quadrant that you probably.

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Speaker 4: Know all the names of.

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Speaker 8: And that combined with the strength we continue to see

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Speaker 8: with Zoom Phone work Vivo, which we were just there

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Speaker 8: was news about this last week where Meta is discontinuing

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Speaker 8: its workplace and we have been named the preferred partner

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Speaker 8: for that transition, which opens up a whole new opportunity

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Speaker 8: for us. So those are all the components that are

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Speaker 8: going to lead to reacceleration in the back half of

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Speaker 8: the year and then into FY twenty six.

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Speaker 3: And let's talk about competitors though, because Microsoft Teams is

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Speaker 3: a strong one and we understand that perhaps there's been

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Speaker 3: some regulatory conversations coming from Zoom about unfair competition.

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Speaker 4: How's that going.

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Speaker 8: Well, you know, there's a lot that's going on in

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Speaker 8: the EU around bundling.

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Speaker 4: They unbundle it there.

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Speaker 8: However, until they really get to a competitive pricing for

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Speaker 8: their products, it's not really a level playing field. And

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Speaker 8: that's what would serve everyone in this industry, we believe

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Speaker 8: the best, including customers, because having a really level playing

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Speaker 8: field for the two strongest competitors, which is of course

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Speaker 8: Zoom and Microsoft, we think is the best approach. Regulators listening, Yeah,

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Speaker 8: I guess we'll wait and see how it continues to evolve.

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Speaker 3: Well, Europe's always quite busy and quite quick on their

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Speaker 3: regulatory decision making. But I'm interesting in what therefore you

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Speaker 3: are doing for an investor base who is still waiting

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Speaker 3: for this regalvanization, this reacceleration of growth. They're seeing some

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Speaker 3: of the areas that you're pushing into in products. Jeffrey's saying, look,

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Speaker 3: we want to see perhaps a little bit buyback sometimes

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Speaker 3: of shares. We're thinking about potentially strategic M and A.

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Speaker 3: Have we've got any news for the investor base there.

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Speaker 8: Yeah, So you know, reaccelerating and top line growth is

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Speaker 8: at absolutely our number one priority. In the meantime, while

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Speaker 8: we are focused on investing there, we are also focused

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Speaker 8: on giving returns back to our shareholders. So last quarter

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Speaker 8: we announced a one point five billion dollars share buyback program.

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Speaker 8: During Q one we did buy back two point four

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Speaker 8: million shares, and we will continue to execute that over

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Speaker 8: the next seven quarters, and in the meantime also looking

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Speaker 8: for opportunities to deploy our cash if we see strategic

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Speaker 8: M and A opportunities that would accelerate top line growth

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Speaker 8: or accelerate tech development as well. Those are the two

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Speaker 8: areas that we really keep front and center.

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Speaker 4: The kind of aqua highest potentially.

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Speaker 3: Yeah, absolutely, Kenny, It's great to have you here, coming

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Speaker 3: in from Texas to be here with us in New York.

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Speaker 4: Zoom CFO Candy Stackerberg. We really appreciate it.

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Speaker 3: Meanwhile, coming up, I've just got to talk about crypto

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Speaker 3: for a moment, ether surging on science of momentum for

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Speaker 3: that ETF approval, will it come to spot eth US next.

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Speaker 4: I Meanwhile, we've.

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Speaker 3: Just got to keep an eye on what's happening with

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Speaker 3: ten Cent because there has been pressure.

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Speaker 4: There has been, of.

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Speaker 3: Course, well a big new game, a blockbuster game that

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Speaker 3: everyone has been waiting for, but within an hour they

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Speaker 3: had to basically put that game on ice because the

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Speaker 3: servers were overloaded. Dungeon and Fighter Mobile has really got

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Speaker 3: everyone very excited, but clearly some server fluctuations hurt on

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Speaker 3: the interim. We're down by two point nine percent, and

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Speaker 3: say this isn't going to be a long term impact.

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Speaker 9: This is Bluebeg technology.

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Speaker 3: Let's just talk about this rally rally in cryptocurrencies. It

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Speaker 3: is underway amid signs of pretty much a momentum for

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Speaker 3: approval of another spot ETF, but this time linked to

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Speaker 3: ETH joining us. Now, James Sift from Bloemberg Intelligence, we're

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Speaker 3: up twenty three percent in the last couple of days.

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Speaker 4: We used to volatility. But what are the tea leaves

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Speaker 4: that you're reading here? James?

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Speaker 10: Yeah, So, I mean we've had these filings just pot

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Speaker 10: of theory metfs for months since the fall even and

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Speaker 10: nothing over the last couple months signified to us that

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Speaker 10: there was any sort of approval if you talk to

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Speaker 10: these issuers, exchanges, you name it.

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Speaker 11: No one thought it was going to happen.

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Speaker 10: And then we started hearing from different people yesterday that

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Speaker 10: the SEC reached out with comments and requesting immediate basically

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Speaker 10: responses and updates to filings.

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Speaker 11: The deadline for this was Thursday.

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Speaker 10: It's May twenty third, and the SEC was basically silent,

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Speaker 10: not interacting with anyone on these topics until yesterday, which

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Speaker 10: tells us this was a huge.

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Speaker 11: Change as far as I'm concerned.

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Speaker 10: So basically the SEC decided as of Monday when they

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Speaker 10: reach up to issues. We don't know exactly when it started,

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Speaker 10: made late morning, early afternoon, who knows, but the SEC

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Speaker 10: basically started saying, all right, we're gonna, we're gonna, we're

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Speaker 10: likely going to approve these things and basically took the

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Speaker 10: approval odds out of the ABYSS as far as we

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Speaker 10: were concerned.

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Speaker 3: And therefore you've moved your spot ether ETF likelihood probbability

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Speaker 3: to seventy five percent from just twenty five percent.

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Speaker 4: Is this usual?

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Speaker 3: Is this typical to have a sudden resurgence in the drama,

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Speaker 3: shall we call it?

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Speaker 10: No, Honestly, we were thinking about lowering our odds last week,

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Speaker 10: but we were basically, we only went to ninety percent

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Speaker 10: for the spot bitcoin ETFs, even though everything was pointing

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Speaker 10: that it was going to get approved, and but the

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Speaker 10: what we left that ten percent because we heard rumblings

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Speaker 10: that the Biden White House was considering stepping in to

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Speaker 10: stop the approval of spot bitcoin ETFs, which just signs

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Speaker 10: a little bit crazy on its face. But honestly, it

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Speaker 10: seems like the exact opposite might have happened here. It

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Speaker 10: seems like the SEC was likely planning to approve. There

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Speaker 10: might even be denial letters drafted up, and it might

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Speaker 10: be the Biden admin for political reasons, that came in

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Speaker 10: and basically said you need to approve these things. We

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Speaker 10: don't want to be too anti crypto.

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Speaker 4: Interesting perspective coming from you, James.

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Speaker 3: I'm interested therefore what it actually means in terms of

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Speaker 3: institutional demand. What we saw was with the Bitcoin ETF,

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Speaker 3: a whole host of new ETFs were launched and suddenly

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Speaker 3: a whole wave of money came in.

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Speaker 4: Is the same thing going to happen for smart contract focus?

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Speaker 11: Yeah?

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Speaker 10: So I do think that there is going to be

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Speaker 10: a wave of ethereym ETFs that launch. We don't know

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Speaker 10: exact timing because this hasn't been planned out. The Bitcoin

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Speaker 10: ETF was planned out for months in advance. There's a

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Speaker 10: whole bunch of other filings besides this nineteen before approval

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Speaker 10: that we're now expecting this week. There needs to be

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Speaker 10: approval on the s onees or perspectuses as well. So

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Speaker 10: we do think there's going to be significant demand for

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Speaker 10: these things, but it will be probably some.

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Speaker 11: Fraction of the Bitcoin ETF demand.

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Speaker 10: So if you look at the market cap at bitcoin,

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Speaker 10: etherium is about a third of that market cap. Also,

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Speaker 10: these ETFs they're not going to be allowed to stake,

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Speaker 10: which is like there's native yield in using ethereum. So

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Speaker 10: if these ETFs cannot stake, that should probably likely diminish

404
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Speaker 10: some of the demand. So if you take the demand

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Speaker 10: in the native crypto market and say it's about thirty

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Speaker 10: percent of bitcoin and then discount.

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Speaker 11: That a little bit, I think there will be demand.

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Speaker 10: So twenty maybe twenty five percent of the demand for

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Speaker 10: Bitcoin ETFs over the long term or at least the

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Speaker 10: near term after launch.

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Speaker 11: If you're comparing them to bitcoin, but that's still billions

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Speaker 11: of dollars.

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Speaker 10: I mean thirteen We have twelve thirteen billion dollars of

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Speaker 10: influenced the spotpack coin ETFs in just four months. So

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Speaker 10: even if we get twenty five percent of that, there's

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Speaker 10: still a pretty significant chunk of change coming into new

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Speaker 10: ETFs that are potentially going to launch in the coming

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Speaker 10: weeks and months.

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Speaker 3: All lies on that May twenty third spot Ether ETF application,

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Speaker 3: James Seffert raising those probabilities.

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Speaker 4: We love having you on.

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Speaker 3: Thank you very much from Blue Megan Intelligence. Welcome back

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Speaker 3: to Blue meg Technology. I'm Caroen Had in New York.

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Speaker 3: Let's get your quick check on these markets. Halfway through

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Speaker 3: this trading day, and we're seeing Look, just sensitivity, shall

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Speaker 3: we say to the markets right now, as we still

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Speaker 3: near those record highs across most benchmarks in the United States,

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Speaker 3: we're just down by five points on the Nasdaq one

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Speaker 3: hundred as we digest and FED speak today, how quickly

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Speaker 3: might we see rate cuts? Raphael Postik saying, look, maybe

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Speaker 3: we're going to reanalyze really where the neutral rate lies.

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Speaker 4: Stock six hundred currently off by two tens percent.

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Speaker 3: Europe under pressure as we wait with beta breath for

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Speaker 3: some key earnings that we'll get to win. And I'm

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Speaker 3: also having a look at what's happening in the crypto space.

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Speaker 3: We're just talking about it on the up and up

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Speaker 3: in particular, a shine a light on what's happening with

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Speaker 3: eth We're currently up more than eight percent as we

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Speaker 3: potentially start to get ourselves ready for a spot ETF

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Speaker 3: here in the United States. Move on, let's have a

441
00:22:16,240 --> 00:22:18,200
Speaker 3: look at what's happening on in individual stocks on the move.

442
00:22:18,480 --> 00:22:21,520
Speaker 3: Amazon down by more than a percentage point. Really interesting

443
00:22:21,560 --> 00:22:24,439
Speaker 3: story coming here being reported by the Financial Times that

444
00:22:24,600 --> 00:22:28,240
Speaker 3: maybe Amazon is putting pause on its well demand or

445
00:22:28,280 --> 00:22:32,720
Speaker 3: at least its orders for the most high rate and

446
00:22:32,800 --> 00:22:37,720
Speaker 3: most sophisticated tech chip architecture coming from in Vidia, and

447
00:22:37,840 --> 00:22:40,560
Speaker 3: instead of getting that Grace Hopper, they're waiting and they're

448
00:22:40,560 --> 00:22:42,840
Speaker 3: going for the Grace Blackwell, while in Video is still

449
00:22:42,880 --> 00:22:44,360
Speaker 3: up a tenth of a percent in spite of that,

450
00:22:44,400 --> 00:22:46,520
Speaker 3: perhaps just air pocket, as the City Group has been

451
00:22:46,560 --> 00:22:49,320
Speaker 3: talking about, we get the earnings after the bell. On Wednesday,

452
00:22:49,359 --> 00:22:51,960
Speaker 3: Microsoft up by a more than of almost a percentage point.

453
00:22:52,320 --> 00:22:55,800
Speaker 3: They are enhancing co Pilot in particular, then racing Google.

454
00:22:55,840 --> 00:22:56,840
Speaker 4: Remember yesterday we're.

455
00:22:56,680 --> 00:22:59,800
Speaker 3: Hearing how they're taking on Apple with a new AIPC.

456
00:23:00,640 --> 00:23:02,280
Speaker 3: But we've got so much to hear from the leader

457
00:23:02,280 --> 00:23:04,560
Speaker 3: of Microsoft right now because they are launching the team

458
00:23:04,680 --> 00:23:06,880
Speaker 3: co Pilot and they've got a new AI feature that's

459
00:23:06,880 --> 00:23:10,080
Speaker 3: going to be helping you with your project management, fostering competition,

460
00:23:10,160 --> 00:23:13,040
Speaker 3: he says. And the chairman of CEO, Stia Nadella, sat

461
00:23:13,040 --> 00:23:15,400
Speaker 3: down with bringing Back Original's host Emily Chang, and.

462
00:23:15,320 --> 00:23:17,720
Speaker 4: They talked about just how it can help with maybe

463
00:23:17,720 --> 00:23:19,119
Speaker 4: a little bit of drudgery and meetings.

464
00:23:19,160 --> 00:23:22,439
Speaker 7: Take a listen and everybody complains about meetings, but what

465
00:23:22,480 --> 00:23:25,960
Speaker 7: one should really complain about is not being prepared for meetings,

466
00:23:26,520 --> 00:23:30,080
Speaker 7: not paying attention in meetings, not remembering what happened in meetings.

467
00:23:30,359 --> 00:23:35,399
Speaker 7: The Meetings co Pilot helps keep the knowledge always front

468
00:23:35,440 --> 00:23:38,639
Speaker 7: and center for an organization. So the feature we are

469
00:23:39,040 --> 00:23:41,080
Speaker 7: launching is really this thing called.

470
00:23:40,840 --> 00:23:41,760
Speaker 11: Team core Pilot.

471
00:23:41,840 --> 00:23:43,800
Speaker 7: This Team core Pilot is going to be in the

472
00:23:43,840 --> 00:23:46,480
Speaker 7: meeting and everywhere your team is working on. For example,

473
00:23:46,520 --> 00:23:49,440
Speaker 7: if you're doing a project and you want project management assistant,

474
00:23:49,440 --> 00:23:51,840
Speaker 7: this team Copilot will help you and all your teammates.

475
00:23:51,880 --> 00:23:54,560
Speaker 7: It's kind of like having an AI teammate that helps

476
00:23:54,600 --> 00:23:55,280
Speaker 7: you well.

477
00:23:55,320 --> 00:23:57,280
Speaker 12: On that note, you know, for all of this to

478
00:23:57,320 --> 00:23:59,800
Speaker 12: really work, you've really got to trust your PC with

479
00:24:00,280 --> 00:24:03,280
Speaker 12: everything about you. Will it know you better than a

480
00:24:03,320 --> 00:24:05,480
Speaker 12: real assistant or a friend or a colleague.

481
00:24:05,680 --> 00:24:07,680
Speaker 4: And are we in relationship territory?

482
00:24:07,800 --> 00:24:10,199
Speaker 7: Yeah, it's a super important one, right, which is to me,

483
00:24:12,200 --> 00:24:14,719
Speaker 7: there are two things. One is how should one think

484
00:24:14,720 --> 00:24:17,880
Speaker 7: about privacy? How should one think about safety? And then

485
00:24:17,920 --> 00:24:20,399
Speaker 7: the third is how should we relate to AI?

486
00:24:20,760 --> 00:24:20,920
Speaker 6: Right?

487
00:24:21,000 --> 00:24:22,320
Speaker 4: All of these are important.

488
00:24:22,000 --> 00:24:23,919
Speaker 7: So let's take them even unpack them. Right on the

489
00:24:23,960 --> 00:24:26,439
Speaker 7: privacy side, that's why I think there are going to

490
00:24:26,440 --> 00:24:31,320
Speaker 7: be needs for real private information and whether it's in

491
00:24:31,359 --> 00:24:33,960
Speaker 7: the enterprise side where people say, don't train on my data.

492
00:24:34,000 --> 00:24:36,600
Speaker 7: That's the assurance we have for anybody in the cloud,

493
00:24:36,640 --> 00:24:39,800
Speaker 7: even or the new PCs we just launched yesterday, right,

494
00:24:39,840 --> 00:24:42,240
Speaker 7: which are all about keeping everything that you're doing on

495
00:24:42,280 --> 00:24:45,800
Speaker 7: the PC local. So that's on the privacy side. Safety

496
00:24:45,840 --> 00:24:47,640
Speaker 7: is another one, right, which is how do I make

497
00:24:47,720 --> 00:24:52,600
Speaker 7: sure that whatever I am doing is safe? You know,

498
00:24:52,680 --> 00:24:56,280
Speaker 7: I'm safe from adversarial attacks? And then the third is

499
00:24:56,560 --> 00:25:00,480
Speaker 7: the relationship side is I don't I believe of I

500
00:25:00,520 --> 00:25:04,320
Speaker 7: don't like anthropomorphizing AI. I sort of believe it's a tool.

501
00:25:05,600 --> 00:25:08,479
Speaker 7: It has got intelligence if you want to give it that,

502
00:25:08,520 --> 00:25:12,240
Speaker 7: as you know, Moniker, But it's not the same intelligence

503
00:25:12,240 --> 00:25:13,720
Speaker 7: that I have, right, I think one of the most

504
00:25:13,800 --> 00:25:16,600
Speaker 7: unfortunate names is artificial intelligence.

505
00:25:17,000 --> 00:25:18,960
Speaker 4: It's a different I wish we would call it a.

506
00:25:18,880 --> 00:25:23,280
Speaker 7: Different intelligence, even because I have my intelligence. I don't

507
00:25:23,320 --> 00:25:26,760
Speaker 7: need any artificial intelligence. I just want my intelligence to

508
00:25:26,800 --> 00:25:30,040
Speaker 7: compose with this different intelligence so that I have more agency.

509
00:25:30,119 --> 00:25:35,000
Speaker 3: Quite frankly, Microsoft Chairman CEO tier Nadella, there a blue

510
00:25:35,040 --> 00:25:38,200
Speaker 3: max Emily Chang. Now let's turn our attention to another

511
00:25:38,280 --> 00:25:40,880
Speaker 3: key company on the move and shares. Palo Alto Networks

512
00:25:40,960 --> 00:25:44,040
Speaker 3: have been under pressure. That is, the company telling us

513
00:25:44,080 --> 00:25:46,720
Speaker 3: where it's forecast is going. Fourth quarter revenue coming in

514
00:25:47,119 --> 00:25:50,160
Speaker 3: two point one five to two point one seven billion dollars.

515
00:25:50,640 --> 00:25:53,040
Speaker 3: Now we get a chance to talk through those forecasts

516
00:25:53,080 --> 00:25:55,840
Speaker 3: and where the direction of strategy is. When Nikeshiro is

517
00:25:55,880 --> 00:25:58,600
Speaker 3: Paralo Alto Networks CEO and Nikesha's great to have some

518
00:25:58,640 --> 00:26:01,640
Speaker 3: time with you, and I thinkultimately the forecasts we used

519
00:26:01,640 --> 00:26:03,919
Speaker 3: to get the growth we have been used to of

520
00:26:04,000 --> 00:26:07,280
Speaker 3: revenue from palowel To Networks is what twenty thirty percent

521
00:26:07,359 --> 00:26:09,199
Speaker 3: year on year growth. We're now having to get more

522
00:26:09,240 --> 00:26:13,000
Speaker 3: used to potentially an eleven percent growth perspective, Is this

523
00:26:13,400 --> 00:26:17,000
Speaker 3: buyer fatigue for cyber not really?

524
00:26:17,240 --> 00:26:19,600
Speaker 2: First of all, Karen, thank you for having me here. Remember,

525
00:26:20,200 --> 00:26:23,520
Speaker 2: we are planning to deliver close to two billion dollars

526
00:26:23,520 --> 00:26:25,800
Speaker 2: of revenue in Q four. That makes us close to

527
00:26:25,800 --> 00:26:27,840
Speaker 2: an eight billion dollar company for the year and our

528
00:26:27,840 --> 00:26:30,440
Speaker 2: growth rates our forecast beteen ten and fifteen percent, So

529
00:26:30,880 --> 00:26:33,600
Speaker 2: there is no buyer fittigue in cybersecurity. We are the

530
00:26:33,680 --> 00:26:35,960
Speaker 2: first company to break the barrier and get to that

531
00:26:36,080 --> 00:26:39,520
Speaker 2: scale in cybersecurity, making us not to one hundred billion dollars.

532
00:26:39,320 --> 00:26:39,880
Speaker 11: In market cap.

533
00:26:39,960 --> 00:26:42,800
Speaker 2: So no, I think cybersecurity is a very robust market

534
00:26:42,800 --> 00:26:45,960
Speaker 2: from a demand perspective, and our teams are executing amazingly

535
00:26:46,000 --> 00:26:46,639
Speaker 2: around the world.

536
00:26:47,320 --> 00:26:50,320
Speaker 3: Let's talk about where therefore the robust among comes from

537
00:26:50,400 --> 00:26:53,560
Speaker 3: and what for You've talked a lot about ultimately sort

538
00:26:53,600 --> 00:26:57,440
Speaker 3: of being in everything, offering a platformization is what's necessarily

539
00:26:57,480 --> 00:26:59,960
Speaker 3: that's heard of the strategy, if I'm correct, the idea

540
00:27:00,080 --> 00:27:02,400
Speaker 3: that yes, you want to be able to ensure that

541
00:27:02,440 --> 00:27:06,600
Speaker 3: all parts are sophisticatedly protected, but how does that win

542
00:27:06,680 --> 00:27:09,159
Speaker 3: out versus what people have called sort of a best

543
00:27:09,160 --> 00:27:11,680
Speaker 3: in breed offering where you're focusing on one particular element

544
00:27:11,760 --> 00:27:12,480
Speaker 3: of cyber.

545
00:27:13,200 --> 00:27:15,080
Speaker 2: I think the important way to think about it, Caroline,

546
00:27:15,080 --> 00:27:16,960
Speaker 2: is if you will take back fifteen twenty years ago,

547
00:27:17,000 --> 00:27:19,560
Speaker 2: we used to have a multitude of applications across an

548
00:27:19,680 --> 00:27:23,560
Speaker 2: enterprise which did customer management things. Today you don't think

549
00:27:23,560 --> 00:27:26,800
Speaker 2: about having fifteen different applications to manage your customers. You

550
00:27:26,840 --> 00:27:30,280
Speaker 2: either use Salesforce or Oracle or Microsoft Dynamics. You don't

551
00:27:30,440 --> 00:27:34,120
Speaker 2: use fourteen bestor breed applications to solve your customer problems.

552
00:27:34,240 --> 00:27:35,479
Speaker 11: Take the problem in HR.

553
00:27:35,520 --> 00:27:38,919
Speaker 2: You use people systems, whether it's workday or others. So

554
00:27:39,440 --> 00:27:43,560
Speaker 2: you are getting to place where these concepts require integration

555
00:27:43,640 --> 00:27:46,760
Speaker 2: across these best bid capabilities. Otherwise, the owners of integration

556
00:27:46,880 --> 00:27:49,240
Speaker 2: goes on the customer, which means every customer has to

557
00:27:49,240 --> 00:27:51,280
Speaker 2: be able to take these best to breed, stitch them

558
00:27:51,280 --> 00:27:54,639
Speaker 2: together and create amazing security outcomes. On the other side,

559
00:27:54,720 --> 00:27:57,520
Speaker 2: you got bad actors who've changed their tactics. They can

560
00:27:57,600 --> 00:27:59,479
Speaker 2: get in and out of your business in under an

561
00:27:59,480 --> 00:28:01,520
Speaker 2: hour and axtiltrat large amounts of data.

562
00:28:01,560 --> 00:28:03,320
Speaker 4: So I think it's a.

563
00:28:03,200 --> 00:28:05,920
Speaker 2: Problem that's stacked up against companies if they plan to

564
00:28:05,960 --> 00:28:08,520
Speaker 2: stitch this stuff together for years to come. That's why

565
00:28:08,520 --> 00:28:11,520
Speaker 2: we need to move towards and more integrated things that

566
00:28:11,640 --> 00:28:14,240
Speaker 2: work together and a more real time out from the

567
00:28:14,280 --> 00:28:16,640
Speaker 2: security strategy as opposed to the best to breed strategy

568
00:28:16,680 --> 00:28:17,840
Speaker 2: which has worked historically.

569
00:28:18,000 --> 00:28:18,920
Speaker 4: But with your shares.

570
00:28:18,760 --> 00:28:22,080
Speaker 3: Under pressure, is the market understanding that is the market saying, okay,

571
00:28:22,240 --> 00:28:24,200
Speaker 3: I buy the platformization.

572
00:28:24,800 --> 00:28:26,760
Speaker 2: Well our shared We're done very well over the last

573
00:28:26,760 --> 00:28:30,000
Speaker 2: one year. I think these short term bumps are part

574
00:28:30,000 --> 00:28:32,720
Speaker 2: of the absorption by the market where the market needs

575
00:28:32,760 --> 00:28:34,480
Speaker 2: to go. We've done really well in the last five years.

576
00:28:34,520 --> 00:28:36,520
Speaker 2: We're done really well in the last one year. I

577
00:28:36,520 --> 00:28:38,400
Speaker 2: think the important part is to understand it is a very

578
00:28:38,400 --> 00:28:42,080
Speaker 2: strong demand market. We're executing amazingly. We are the largest

579
00:28:42,120 --> 00:28:44,400
Speaker 2: player in the market, and the number of conversation, a

580
00:28:44,480 --> 00:28:47,320
Speaker 2: number of platform deals we did this quarter far exceeded

581
00:28:47,360 --> 00:28:50,040
Speaker 2: any that we've done in history, which sets us in

582
00:28:50,040 --> 00:28:52,840
Speaker 2: the right direction to try and achieve a fifteen billion

583
00:28:52,920 --> 00:28:55,640
Speaker 2: dollar AR number, which we've targeted in the next few years.

584
00:28:55,680 --> 00:28:58,760
Speaker 2: So we think things are on track and we're executing.

585
00:28:59,120 --> 00:29:00,440
Speaker 4: You're likely AAR number.

586
00:29:00,480 --> 00:29:02,720
Speaker 3: There is a number in your metrics that you don't

587
00:29:02,760 --> 00:29:05,320
Speaker 3: like people really focusing on, and that's a billing forecast.

588
00:29:05,400 --> 00:29:08,320
Speaker 3: You say, look, it's volatile, and ultimately it's it's sort

589
00:29:08,320 --> 00:29:10,360
Speaker 3: of an artificial metric. But can you talk us through

590
00:29:10,360 --> 00:29:13,080
Speaker 3: that a little bit, because why is it artificial? You say,

591
00:29:13,120 --> 00:29:16,560
Speaker 3: it's due to payment terms changing. But it's a bit

592
00:29:16,600 --> 00:29:19,160
Speaker 3: worried about this billing forecast being the slowest since your IPO.

593
00:29:20,480 --> 00:29:22,400
Speaker 2: Well, I think what happened is when we lived in

594
00:29:22,440 --> 00:29:25,640
Speaker 2: a zero interest rate and environment, people were willing to

595
00:29:25,640 --> 00:29:29,560
Speaker 2: pay you upfront for years of upcoming service. Today, CFOs

596
00:29:29,560 --> 00:29:31,400
Speaker 2: get involved a saying listen, I'll pay you when you

597
00:29:31,480 --> 00:29:34,000
Speaker 2: deliver service. You look at the companies your name, companies, Jurned,

598
00:29:34,240 --> 00:29:37,280
Speaker 2: Arr business which are on an analyzed payment plan. There

599
00:29:37,360 --> 00:29:40,240
Speaker 2: they give you ar and annual values, and that seems

600
00:29:40,240 --> 00:29:42,680
Speaker 2: to work for us. People look at are you collecting

601
00:29:42,680 --> 00:29:45,280
Speaker 2: all the money upfront? So that's what billings is in

602
00:29:45,760 --> 00:29:49,160
Speaker 2: our view. The right number is RPO or remaining performance obligations.

603
00:29:49,160 --> 00:29:50,960
Speaker 2: Our URPO grew at twenty three percent. We have a

604
00:29:51,040 --> 00:29:54,000
Speaker 2: leven point five billion dollars or the services we intend

605
00:29:54,000 --> 00:29:56,160
Speaker 2: to deliver to our customer over the next three years.

606
00:29:56,240 --> 00:29:58,760
Speaker 2: So that's an important metric. The growth is important because

607
00:29:58,800 --> 00:30:00,720
Speaker 2: that tells you how big your book of businesses that

608
00:30:00,840 --> 00:30:04,280
Speaker 2: is committed by your customers. That gives your truth understanding

609
00:30:04,280 --> 00:30:06,120
Speaker 2: of the strength of the business. I think buildings can

610
00:30:06,160 --> 00:30:08,120
Speaker 2: be a managed depending on when customers use to pay you,

611
00:30:08,120 --> 00:30:11,480
Speaker 2: So I think that becomes a less reliable metric, particularly

612
00:30:11,720 --> 00:30:13,880
Speaker 2: in a higher interest rate and environment where customers are

613
00:30:13,920 --> 00:30:15,280
Speaker 2: conscious about when they want to pay you.

614
00:30:16,000 --> 00:30:18,240
Speaker 3: Is there need to be pressure on contract length going

615
00:30:18,280 --> 00:30:20,840
Speaker 3: forward though, and what does that say about enterprise's desire

616
00:30:20,920 --> 00:30:22,880
Speaker 3: to commit to cybersecurity protection.

617
00:30:23,920 --> 00:30:27,239
Speaker 2: Actually things are in the opposite direction, Caroline, because if

618
00:30:27,280 --> 00:30:29,400
Speaker 2: you take along the contract you get price protection, and

619
00:30:29,440 --> 00:30:31,960
Speaker 2: in a higher interestate environment, you have the risk of

620
00:30:32,040 --> 00:30:34,560
Speaker 2: higher prices in the future. So actually you're seeing customers say,

621
00:30:34,880 --> 00:30:37,280
Speaker 2: guarantee me the price for longer because I don't want

622
00:30:37,280 --> 00:30:39,640
Speaker 2: to deal with inflationary impacts or price increases.

623
00:30:40,400 --> 00:30:42,640
Speaker 3: When you look at ultimately, what all the analysts are

624
00:30:42,640 --> 00:30:47,560
Speaker 3: saying rem versus your particular earnings, they really are saying

625
00:30:47,560 --> 00:30:49,800
Speaker 3: that this is a kneeja reaction. You got vital knowledge,

626
00:30:49,840 --> 00:30:51,960
Speaker 3: really saying the core fundamentals remain very healthy.

627
00:30:52,000 --> 00:30:52,400
Speaker 4: A lot of the.

628
00:30:52,400 --> 00:30:55,000
Speaker 3: Analysts out there saying they believe in the leadership. Right now, Nakesh,

629
00:30:55,400 --> 00:30:57,160
Speaker 3: talk to us there for about what you believe in,

630
00:30:57,280 --> 00:31:00,000
Speaker 3: how artificial intelligence is changing your role as a leader

631
00:31:00,040 --> 00:31:02,480
Speaker 3: and changing the way in which we protect against cybersecurity.

632
00:31:02,480 --> 00:31:04,840
Speaker 3: We will talk about how much harder it's made life.

633
00:31:05,120 --> 00:31:06,960
Speaker 3: But has it really in terms of attacks?

634
00:31:07,840 --> 00:31:10,400
Speaker 2: Well, Caroly, let me break that question in two parts. First,

635
00:31:10,480 --> 00:31:13,240
Speaker 2: in the last five years, our company has gone off

636
00:31:13,280 --> 00:31:15,240
Speaker 2: five times in value, so I think we've done really

637
00:31:15,240 --> 00:31:17,720
Speaker 2: well to our for our shareholders were willing to run

638
00:31:17,760 --> 00:31:20,640
Speaker 2: really well. From an execution perspective, we're you know, we're

639
00:31:20,640 --> 00:31:22,960
Speaker 2: one of the largest companies now, we have an evergreen portfolio,

640
00:31:22,960 --> 00:31:25,400
Speaker 2: like you mentioned, and we've brought the notion that large

641
00:31:25,400 --> 00:31:28,400
Speaker 2: cybersecurity companies can continue to innovate so our customers don't

642
00:31:28,400 --> 00:31:30,560
Speaker 2: have to. In that context, if we look at AI,

643
00:31:31,000 --> 00:31:34,400
Speaker 2: most recently we announced is ceries of AI security products

644
00:31:34,440 --> 00:31:37,440
Speaker 2: because the enthusiasm for AI, both on unfortunately the bad

645
00:31:37,480 --> 00:31:40,640
Speaker 2: actor side and the company's side is high. People want

646
00:31:40,680 --> 00:31:43,280
Speaker 2: to trial AI. You had a segment earlier. You know,

647
00:31:43,320 --> 00:31:46,680
Speaker 2: we're seeing copilots being introduced, so everybody wants an AI buddy,

648
00:31:46,680 --> 00:31:49,280
Speaker 2: an AI assystem to make their lives more productive in

649
00:31:49,320 --> 00:31:52,000
Speaker 2: that environment, every company is raring to go out and

650
00:31:52,000 --> 00:31:55,040
Speaker 2: deploy that technology. You've got to be careful when you deployed.

651
00:31:54,960 --> 00:31:57,120
Speaker 2: It has to be secured by design. You have to

652
00:31:57,160 --> 00:31:59,680
Speaker 2: make sure these lms don't hallstenate. You have to make

653
00:31:59,720 --> 00:32:03,280
Speaker 2: sure nobody get inside, gets inside your LM, poisons it

654
00:32:03,320 --> 00:32:04,680
Speaker 2: with lots of data, and we're going to see a

655
00:32:04,680 --> 00:32:06,960
Speaker 2: lot of those attempts because bad actors have also learned

656
00:32:06,960 --> 00:32:09,959
Speaker 2: the technology. So it's very important to deliver AI in

657
00:32:10,000 --> 00:32:12,880
Speaker 2: such a way that it is secure for our customers

658
00:32:13,000 --> 00:32:16,320
Speaker 2: and their end customers. And we've already pioneered at our

659
00:32:16,400 --> 00:32:19,640
Speaker 2: essay most recently it comprehensive suite of products which we

660
00:32:19,720 --> 00:32:21,640
Speaker 2: intend to make available to all of our customers in

661
00:32:21,640 --> 00:32:23,760
Speaker 2: the next four weeks, which allows them to go down

662
00:32:23,800 --> 00:32:26,480
Speaker 2: this journey and be secured from the get go.

663
00:32:27,400 --> 00:32:30,320
Speaker 3: Hello el to Network CEO Pikshu Or thanks to spending

664
00:32:30,320 --> 00:32:32,760
Speaker 3: some time with us on your latest results and indeed

665
00:32:32,800 --> 00:32:34,880
Speaker 3: the latest threats that you're trying to combat. I Meanwhile,

666
00:32:34,880 --> 00:32:36,840
Speaker 3: coming up, we're going to be hearing from the CEOs

667
00:32:36,880 --> 00:32:39,720
Speaker 3: of Dell and Nvidio, both of course, at the Dell

668
00:32:39,840 --> 00:32:42,760
Speaker 3: World Conference in Las Vegas, and they sat down with

669
00:32:42,800 --> 00:32:43,280
Speaker 3: their own.

670
00:32:43,160 --> 00:32:46,520
Speaker 4: And Ludloan and let's just check in on what Sodos

671
00:32:46,600 --> 00:32:46,960
Speaker 4: is doing.

672
00:32:47,280 --> 00:32:49,000
Speaker 3: Yeah, you know them for speakers, Well, now they want

673
00:32:49,000 --> 00:32:50,440
Speaker 3: to get in your headphone space too.

674
00:32:50,480 --> 00:32:52,440
Speaker 4: The market they see.

675
00:32:52,320 --> 00:32:54,960
Speaker 3: For a four hundred and forty nine dollars device, it's

676
00:32:54,960 --> 00:32:56,640
Speaker 3: all part of their effort to basically go from home

677
00:32:56,680 --> 00:32:59,600
Speaker 3: speaker company to a broader maker, a consumer.

678
00:32:59,200 --> 00:33:09,360
Speaker 4: Tech nine tens five percent. This is to make technology.

679
00:33:16,720 --> 00:33:16,880
Speaker 2: Now.

680
00:33:16,920 --> 00:33:19,720
Speaker 3: The Dell World conference is still in full swing today

681
00:33:19,760 --> 00:33:22,480
Speaker 3: in Las Vegas and Ludlow He sat down yesterday with

682
00:33:22,560 --> 00:33:25,760
Speaker 3: some of the key note speakers, which included Dell chairman

683
00:33:25,840 --> 00:33:29,040
Speaker 3: and CEO Michael Dell an Nvidia CEO Jensen Juan take

684
00:33:29,080 --> 00:33:29,440
Speaker 3: a listen.

685
00:33:30,360 --> 00:33:31,760
Speaker 11: At Dell Technologies World.

686
00:33:31,800 --> 00:33:35,320
Speaker 13: We love to bring our customers and partners together and

687
00:33:35,920 --> 00:33:39,360
Speaker 13: talk about what's new and what's exciting. And you know,

688
00:33:39,480 --> 00:33:45,080
Speaker 13: this AI opportunity is really tremendous and we can never

689
00:33:45,200 --> 00:33:48,400
Speaker 13: do anything by ourselves, but this is a great example

690
00:33:48,440 --> 00:33:52,200
Speaker 13: of how you have an ecosystem of companies coming together

691
00:33:52,920 --> 00:33:57,880
Speaker 13: along with all these incredible innovations in GPUs and compute

692
00:33:58,040 --> 00:34:02,960
Speaker 13: storage and networking and the AI models and software companies

693
00:34:03,000 --> 00:34:08,120
Speaker 13: that are utilizing all this power and it's causing a

694
00:34:08,160 --> 00:34:09,680
Speaker 13: new industrial revolution.

695
00:34:10,239 --> 00:34:12,400
Speaker 14: There are five things that I would like to talk about,

696
00:34:12,440 --> 00:34:14,719
Speaker 14: the first being the relationship between the three of you

697
00:34:14,760 --> 00:34:17,640
Speaker 14: and your companies, how you work together. The second being

698
00:34:18,080 --> 00:34:23,640
Speaker 14: AI infrastructure, how durable. What's happening is AIPC. You know,

699
00:34:23,719 --> 00:34:26,719
Speaker 14: you've been talking about AIPC on social media for some time,

700
00:34:27,520 --> 00:34:30,960
Speaker 14: and officially of course as well US leadership. You know,

701
00:34:30,960 --> 00:34:33,799
Speaker 14: I reflect that I have three American CEOs that around me,

702
00:34:34,200 --> 00:34:37,120
Speaker 14: all pulling towards the same sort of goal. And finally,

703
00:34:37,120 --> 00:34:39,799
Speaker 14: increasingly people ask me to ask you about power and

704
00:34:39,920 --> 00:34:43,479
Speaker 14: energy consumption and whether we should start talking about that.

705
00:34:43,920 --> 00:34:46,160
Speaker 14: But really, gentsen, the origin of this, and one of

706
00:34:46,200 --> 00:34:48,279
Speaker 14: the reasons I wanted to have the conversation was GtC.

707
00:34:48,840 --> 00:34:51,680
Speaker 14: I'm paraphrasing, but you said, basically, there is no one

708
00:34:51,800 --> 00:34:55,960
Speaker 14: better end to end systems at scale than Dell. You

709
00:34:56,040 --> 00:34:58,960
Speaker 14: basically said, if you want a server, you phone Michael Dell.

710
00:34:59,400 --> 00:35:02,920
Speaker 14: But why specifically, how is it that Nvidia interacts with

711
00:35:02,960 --> 00:35:04,360
Speaker 14: that part of Michael's business.

712
00:35:04,719 --> 00:35:05,359
Speaker 4: Well, this is a.

713
00:35:05,280 --> 00:35:10,480
Speaker 5: Really important time where we've re engineered and reinvented every

714
00:35:10,560 --> 00:35:14,440
Speaker 5: layer of computing from the chip, to the operating system,

715
00:35:14,520 --> 00:35:17,040
Speaker 5: to the system servers, to the way that these data

716
00:35:17,080 --> 00:35:20,080
Speaker 5: centers are put together. There's only one company in the

717
00:35:20,120 --> 00:35:25,080
Speaker 5: world that can have the ability to build the computing system,

718
00:35:25,200 --> 00:35:29,120
Speaker 5: the storage system, the networking system, all of the software

719
00:35:29,160 --> 00:35:32,640
Speaker 5: that goes along with it, and the path to the

720
00:35:32,680 --> 00:35:36,600
Speaker 5: world's enterprise. We want to bring this generative AI capability

721
00:35:36,640 --> 00:35:39,279
Speaker 5: to every company in the world, and some of them

722
00:35:39,280 --> 00:35:41,040
Speaker 5: can use it in the cloud, but many of the

723
00:35:41,080 --> 00:35:44,319
Speaker 5: applications still has to be done on prem and so

724
00:35:44,360 --> 00:35:47,120
Speaker 5: in order for us to bring them into the generative

725
00:35:47,160 --> 00:35:50,120
Speaker 5: AI revolution, we're going to have to go through a

726
00:35:50,160 --> 00:35:54,480
Speaker 5: partner that can help us take this completely new reinvention

727
00:35:54,560 --> 00:35:58,200
Speaker 5: of a computer, the data center, these AI factories and

728
00:35:58,320 --> 00:36:01,120
Speaker 5: help every customer have a you know.

729
00:36:01,280 --> 00:36:05,080
Speaker 14: Just remport Tensen. Yeah, on prem is back, just really quick,

730
00:36:05,160 --> 00:36:05,640
Speaker 14: yes or no?

731
00:36:06,400 --> 00:36:07,240
Speaker 4: On prem never.

732
00:36:07,200 --> 00:36:10,799
Speaker 5: Left, but on prem never left, but on prem is

733
00:36:11,000 --> 00:36:14,160
Speaker 5: on prem is you know, on Prem is cool.

734
00:36:13,960 --> 00:36:19,399
Speaker 4: Again, as if it ever wasn't cool. We you thank him,

735
00:36:19,400 --> 00:36:19,719
Speaker 4: of course.

736
00:36:19,719 --> 00:36:21,840
Speaker 3: In video CEO Joseph Wang, it was Dell chairman and

737
00:36:21,880 --> 00:36:24,719
Speaker 3: CEO Michael Dell speaking, of course, along with their own

738
00:36:25,080 --> 00:36:28,360
Speaker 3: ed Ludlow and alongside the Service Now CEO Bill McDermott.

739
00:36:28,400 --> 00:36:30,640
Speaker 3: You probably caught a lot of it yesterday, but it

740
00:36:30,680 --> 00:36:32,759
Speaker 3: was a great interview. Meanwhile, let's just talk about AI

741
00:36:32,880 --> 00:36:36,879
Speaker 3: and the startups scene their scale. AI it's helping, of course,

742
00:36:36,920 --> 00:36:39,719
Speaker 3: top tech companies improve the data used to build a

743
00:36:39,760 --> 00:36:42,480
Speaker 3: eye products, basically to ensure that it's tagged in.

744
00:36:42,480 --> 00:36:42,960
Speaker 4: The right way.

745
00:36:42,960 --> 00:36:46,200
Speaker 3: It's roughly doubled its valuation to get this thirteen point

746
00:36:46,239 --> 00:36:49,680
Speaker 3: eight billion dollars and it's raising one billion in one

747
00:36:49,719 --> 00:36:52,080
Speaker 3: of the largest financing deals of the year. The round

748
00:36:52,160 --> 00:36:55,760
Speaker 3: was led by Axcel, participation from mix of new corporate backers.

749
00:36:56,080 --> 00:36:58,759
Speaker 3: They're all the rage too now Amazon Meta Venture arms

750
00:36:58,760 --> 00:37:02,120
Speaker 3: from AMD Service Now and indeed Intel.

751
00:37:02,520 --> 00:37:03,640
Speaker 4: Meanwhile, coming up.

752
00:37:03,880 --> 00:37:07,719
Speaker 3: We'd just been noting that Disney's saving some money. They're

753
00:37:07,719 --> 00:37:11,000
Speaker 3: continuing to do that with Pixar announcing layoffs to the

754
00:37:11,000 --> 00:37:12,640
Speaker 3: tune of some fourteen percent of the business.

755
00:37:12,920 --> 00:37:13,880
Speaker 4: Have all the details.

756
00:37:14,000 --> 00:37:26,000
Speaker 3: Next, it's been going viral. Actress Scarlett Johansson said that

757
00:37:26,040 --> 00:37:29,720
Speaker 3: she was quote forced to hire legal counsel to demand

758
00:37:29,800 --> 00:37:33,680
Speaker 3: the removal of an artificial intelligence voice for open AI's chatpot.

759
00:37:33,239 --> 00:37:36,200
Speaker 4: That sounded only like herself.

760
00:37:36,000 --> 00:37:39,000
Speaker 3: When most Rachel Metz joins us for more and basically

761
00:37:39,040 --> 00:37:42,560
Speaker 3: this is Sky and we already heard that maybe open

762
00:37:42,600 --> 00:37:44,560
Speaker 3: ai was pressing pause on the use of Sky.

763
00:37:45,800 --> 00:37:49,880
Speaker 15: Yeah. Absolutely so just the other day open Ai stopped

764
00:37:50,080 --> 00:37:53,280
Speaker 15: using the voice at least for now, and users would

765
00:37:53,320 --> 00:37:55,200
Speaker 15: if they tried to use it within like the chat

766
00:37:55,200 --> 00:37:57,839
Speaker 15: GBT app, for instance, they would hear a different voice

767
00:37:57,880 --> 00:37:58,680
Speaker 15: called Juniper.

768
00:37:59,239 --> 00:38:01,160
Speaker 4: I do think it's And to remember.

769
00:38:00,840 --> 00:38:04,400
Speaker 15: These voices, and the Sky voice in particular, didn't just launch.

770
00:38:04,960 --> 00:38:10,080
Speaker 15: They actually launched last year in September, which Scarlett said

771
00:38:10,239 --> 00:38:12,720
Speaker 15: is around when or is the same month when Sam

772
00:38:12,719 --> 00:38:14,839
Speaker 15: Martman reached out to her and asked her if she'd

773
00:38:14,840 --> 00:38:19,399
Speaker 15: be interested in presenting one of these voices with her voice.

774
00:38:18,760 --> 00:38:22,759
Speaker 3: And she decided, after a lot of thought, apparently not

775
00:38:23,080 --> 00:38:24,600
Speaker 3: to provide her own voice.

776
00:38:24,640 --> 00:38:24,759
Speaker 6: Now.

777
00:38:24,800 --> 00:38:26,439
Speaker 3: All of this, of course, goes back to the fact

778
00:38:26,440 --> 00:38:29,160
Speaker 3: that there was a movie years old now called Her,

779
00:38:29,440 --> 00:38:32,680
Speaker 3: where Joaquin Phoenix plays a part that falls in love

780
00:38:32,800 --> 00:38:37,120
Speaker 3: with an artificial intelligence well chatbot basically, who happens to

781
00:38:37,120 --> 00:38:38,600
Speaker 3: be voiced by Scarlett Johansson.

782
00:38:39,160 --> 00:38:42,480
Speaker 4: Interestingly, we saw Sam Altman just while the announcements of

783
00:38:42,600 --> 00:38:45,240
Speaker 4: Chat GBT four oh were launched.

784
00:38:45,280 --> 00:38:50,000
Speaker 3: He put in a post just literally her, but he says, yeah,

785
00:38:50,200 --> 00:38:51,760
Speaker 3: it wasn't based on Scarlett ju Hanson.

786
00:38:53,560 --> 00:38:56,120
Speaker 15: Yeah, I mean that's kind of tricky, right, I mean,

787
00:38:56,280 --> 00:39:00,640
Speaker 15: you're tweeting her and everybody knows what you mean by that,

788
00:39:00,760 --> 00:39:02,440
Speaker 15: and I guess you could say, oh, well, it is

789
00:39:02,560 --> 00:39:05,799
Speaker 15: an homage, but it sounds like she didn't want any

790
00:39:05,840 --> 00:39:07,480
Speaker 15: part of it. So I think it's going to be

791
00:39:07,480 --> 00:39:10,319
Speaker 15: really interesting to sort of see what the next move is,

792
00:39:10,360 --> 00:39:15,239
Speaker 15: either from Open Ai or from Scarlet Johansson's camp. As

793
00:39:15,280 --> 00:39:17,839
Speaker 15: far as what happens next, I mean, will this voice

794
00:39:17,880 --> 00:39:22,160
Speaker 15: come back? I don't know. It's another actress, but it

795
00:39:22,160 --> 00:39:23,920
Speaker 15: does sound quite a bit like her. I think a

796
00:39:23,920 --> 00:39:24,960
Speaker 15: lot of people would agree.

797
00:39:25,040 --> 00:39:28,360
Speaker 3: And to be sure, Open Ai've tried to make clear

798
00:39:28,400 --> 00:39:30,960
Speaker 3: how they found this voice, and it was found a

799
00:39:31,000 --> 00:39:34,680
Speaker 3: year ago through four hundred applications and they managed to

800
00:39:34,719 --> 00:39:37,440
Speaker 3: find these five voices they eventually went with. But there

801
00:39:37,560 --> 00:39:39,759
Speaker 3: is another actress who just so happens to sound a

802
00:39:39,760 --> 00:39:42,080
Speaker 3: bit like Scotlettohnson, who now might not get paid for

803
00:39:42,120 --> 00:39:42,920
Speaker 3: the use of it within.

804
00:39:42,800 --> 00:39:46,040
Speaker 15: The app Yeah, I mean, I think we also need

805
00:39:46,080 --> 00:39:48,400
Speaker 15: to keep in mind that this is a real person's

806
00:39:48,480 --> 00:39:51,200
Speaker 15: voice that is being used to train a voice model,

807
00:39:51,880 --> 00:39:55,239
Speaker 15: So I have no way of knowing how much modification

808
00:39:55,320 --> 00:39:57,239
Speaker 15: has been done to the voice. You know, they would

809
00:39:57,280 --> 00:40:00,480
Speaker 15: have recorded probably quite a number of samples of this

810
00:40:00,520 --> 00:40:04,719
Speaker 15: person speaking, and then I'm not really sure what kind

811
00:40:04,719 --> 00:40:07,480
Speaker 15: of speaking they would have done to present the final

812
00:40:07,560 --> 00:40:10,680
Speaker 15: actual voice. So it's possible that there was some works

813
00:40:10,680 --> 00:40:13,040
Speaker 15: done there. Maybe they just need to change the voice

814
00:40:13,040 --> 00:40:15,600
Speaker 15: a little bit, Maybe they need to retire the voice.

815
00:40:15,640 --> 00:40:17,480
Speaker 15: Maybe they're going to say, you know what, this is

816
00:40:17,520 --> 00:40:20,600
Speaker 15: not her voice, so we're going to keep using it.

817
00:40:20,200 --> 00:40:22,320
Speaker 15: It'll be interesting to see what happens.

818
00:40:23,040 --> 00:40:26,200
Speaker 3: Well, certainly it's highlighted that there are more voices on

819
00:40:27,000 --> 00:40:30,560
Speaker 3: chut ChiPT four, at least for many. Rachel Metz, we

820
00:40:30,600 --> 00:40:32,360
Speaker 3: thank you so much for running us through what is

821
00:40:32,440 --> 00:40:34,560
Speaker 3: almost a bit of a celebrity story, but sticking with

822
00:40:34,640 --> 00:40:37,480
Speaker 3: content for a moment. Pixar, the pioneering animator that made

823
00:40:37,480 --> 00:40:40,560
Speaker 3: of course, toy story finding Nemo's cutting fourteen percent of

824
00:40:40,560 --> 00:40:42,960
Speaker 3: a staff as part of an ongoing cost cutting effort

825
00:40:43,080 --> 00:40:46,200
Speaker 3: with parent company Disney, finished Jollette here briefly for more

826
00:40:46,239 --> 00:40:49,399
Speaker 3: and well, we'd anticipated that we would see cuts here.

827
00:40:50,120 --> 00:40:53,840
Speaker 16: Yeah, I mean, this is part of Bob Iger's broader

828
00:40:54,000 --> 00:40:58,200
Speaker 16: term to bring down costs at Disney Pixar, you know,

829
00:40:58,280 --> 00:41:00,839
Speaker 16: for years couldn't do anything wrong, just had hit after

830
00:41:00,920 --> 00:41:03,879
Speaker 16: hit after hit. During the pandemic, they released a couple

831
00:41:03,920 --> 00:41:07,120
Speaker 16: of movies right to the streaming service. You know, their

832
00:41:07,200 --> 00:41:09,239
Speaker 16: last couple Elemental was not a big hit.

833
00:41:09,840 --> 00:41:11,000
Speaker 4: Light Year was not a big hit.

834
00:41:11,120 --> 00:41:13,040
Speaker 16: So this has kind of been an expector for a while.

835
00:41:13,080 --> 00:41:16,760
Speaker 16: They also at some point switched to you know, envisioning

836
00:41:16,840 --> 00:41:20,680
Speaker 16: doing more TV production for the streaming service, and now

837
00:41:20,680 --> 00:41:22,640
Speaker 16: they've basically decided we're going to go back to just

838
00:41:22,680 --> 00:41:23,360
Speaker 16: making movies.

839
00:41:23,480 --> 00:41:24,560
Speaker 4: So it's related to that.

840
00:41:24,640 --> 00:41:28,000
Speaker 3: Also, is there anyway and briefly we could say that

841
00:41:28,040 --> 00:41:29,080
Speaker 3: AI is going to be doing it.

842
00:41:30,280 --> 00:41:32,200
Speaker 16: I mean, I'm sure that AI will be part of

843
00:41:32,239 --> 00:41:36,000
Speaker 16: the mix. That's not what they're crediting these cuts to.

844
00:41:36,080 --> 00:41:39,319
Speaker 16: At this point, they are pointing to the shift back

845
00:41:39,360 --> 00:41:42,640
Speaker 16: to movie production. And again there's been you know, Bob

846
00:41:42,680 --> 00:41:45,440
Speaker 16: Ayer's been looking for you know, something like eight billion

847
00:41:45,480 --> 00:41:48,600
Speaker 16: dollars worth of cuts all across Disney. So this has

848
00:41:48,640 --> 00:41:51,600
Speaker 16: been just the latest of multiple waves of people losing

849
00:41:51,640 --> 00:41:52,120
Speaker 16: their jobs.

850
00:41:53,040 --> 00:41:55,960
Speaker 3: Felix Shudette, thank you for running us through it with Disney. Meanwhile,

851
00:41:56,160 --> 00:41:58,279
Speaker 3: that does it for this edition of Blue meg Technology.

852
00:41:58,480 --> 00:42:00,520
Speaker 3: Don't forget to check out the podcast. You can find

853
00:42:00,520 --> 00:42:03,560
Speaker 3: it on the terminal as well as online on Apple, Spotify, iHeart,

854
00:42:04,000 --> 00:42:05,240
Speaker 3: wherever you get your information.

855
00:42:05,360 --> 00:42:06,120
Speaker 4: This is Bloomberg