WEBVTT - TSMC and ASML's China Invasion Plan; Microsoft's New Team Co-Pilot 0:00:02.440 --> 0:00:10.120 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.640 --> 0:00:13.840 From Mahart where Innovation, money and power Collie in Silicon Valley, Nbon. 0:00:14.240 --> 0:00:18.280 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:32.120 --> 0:00:34.479 I'm Caroline Heidel Bloomberg's World headquarters in New York. 0:00:34.560 --> 0:00:35.360 Ed Ludlow is off. 0:00:35.600 --> 0:00:39.040 This is Bloomberg Technology coming up exclusive reporting that chip 0:00:39.120 --> 0:00:43.080 giants TSMC and ASML well they can remotely shut down 0:00:43.159 --> 0:00:46.640 the key equipment in event of an invasion to Taiwan. 0:00:47.000 --> 0:00:47.880 Details to come. 0:00:48.479 --> 0:00:51.440 Plus, we hear from Microsoft CEO Saty Innadella as its 0:00:51.520 --> 0:00:56.720 Bill Developers conference kicks off, and actress Scarlett Johansson pushes 0:00:56.760 --> 0:01:00.840 back against open Ai and that eerily similar Sky Voice. 0:01:01.280 --> 0:01:03.480 All that and so much more ahead. But first, that's 0:01:03.520 --> 0:01:05.160 checking on these markets. We want to go higher. We 0:01:05.200 --> 0:01:06.840 want to keep those record highs going. It seems on 0:01:06.880 --> 0:01:11.399 the SMP. Certainly the NASDAK turns flat. I'm pushing forward 0:01:11.440 --> 0:01:14.080 also to what's happening in crypto. We'll get back to 0:01:14.120 --> 0:01:16.480 what the MAINNGJA benchmarks are doing at the moment, but 0:01:16.520 --> 0:01:17.839 crypto has been a key story. 0:01:17.880 --> 0:01:18.280 Of course. 0:01:18.440 --> 0:01:21.000 This all eyes shifting from what we saw was a 0:01:21.040 --> 0:01:26.480 spot bitcoin ETF now to potentially a spot ETF. But 0:01:26.560 --> 0:01:30.120 there is the NASDAK currently just trading into positive territory. 0:01:30.240 --> 0:01:32.120 We are on a new record high. We're a new 0:01:32.120 --> 0:01:33.920 record high in the SMP. Not so on the stock 0:01:33.959 --> 0:01:36.040 six hundred and over in Europe actually off by about 0:01:36.080 --> 0:01:38.280 a quarter of a percent. But all eyes focused on 0:01:38.520 --> 0:01:41.160 FED talk today. Raphile Bostic of course, still trying to 0:01:41.200 --> 0:01:43.760 analyze the data many of FED talk coming to us. 0:01:43.800 --> 0:01:46.080 But also we're seeing what's happening with the ten year 0:01:46.120 --> 0:01:48.360 yield currently off by some three basis points. So maybe 0:01:48.400 --> 0:01:50.360 a bit of buying into the bomb market right now, 0:01:50.520 --> 0:01:53.520 as we also push forward to what's happening in earnings. 0:01:53.680 --> 0:01:55.360 Let's have a look at some of the individual movers 0:01:55.400 --> 0:01:58.240 that we've been seeing, and Palo Alto Networks, one of 0:01:58.240 --> 0:02:00.000 the key forwards, is actually coming off of its lows. 0:02:00.000 --> 0:02:01.480 We're down only now four percent. 0:02:01.640 --> 0:02:06.360 Why cybersecurity company just posting revenue that's eleven percent, well, 0:02:06.920 --> 0:02:08.840 thirty fifteen percent growth on. 0:02:08.800 --> 0:02:09.919 A year on year basis. 0:02:10.560 --> 0:02:12.880 That's not the twenty to thirty percent revenue growth what 0:02:13.000 --> 0:02:14.520 we used to do with a cybersecurity company. 0:02:14.520 --> 0:02:16.280 We go speaking to the CEO a little bit later, 0:02:16.280 --> 0:02:17.000 in the show in. 0:02:17.040 --> 0:02:20.440 Vidia trading flat ahead of its all in important earnings tomorrow. 0:02:20.919 --> 0:02:24.120 But what's key is this relationship, of course with what 0:02:24.120 --> 0:02:27.280 they've been talking about in ai and Taiwan, how dependent 0:02:27.320 --> 0:02:29.720 they are on TSMC to deliver the sort of super 0:02:29.760 --> 0:02:31.680 chips that the market is so dependent on. And a 0:02:31.720 --> 0:02:35.200 really interesting piece of reporting therefore on ASML and TSMC 0:02:35.280 --> 0:02:37.400 today coming from Bloomberg SML is off. 0:02:37.320 --> 0:02:38.360 By one and a half percent. 0:02:38.720 --> 0:02:41.280 That's as we see that exclusive reporting coming from our 0:02:41.280 --> 0:02:44.160 colleague showing that in an event that China invades Taiwan, 0:02:44.639 --> 0:02:48.400 both TSMC and of course the chip equipment making company 0:02:48.480 --> 0:02:51.680 ASML could basically have a kill switch. They can remotely 0:02:51.720 --> 0:02:55.080 disable their chip making machines. We heard about the importance 0:02:55.160 --> 0:02:58.400 in fact of Taiwan from Nvidia's CEO Jensen one and 0:02:58.440 --> 0:02:59.960 the Dell World conference just yesterday. 0:03:00.240 --> 0:03:04.880 Listen, Taiwan is at the epicenter of the world's technology 0:03:05.040 --> 0:03:10.000 supply flight chain. Without Taiwan, it would be very difficult 0:03:10.000 --> 0:03:12.800 for Michael and I to do our jobs, it would 0:03:12.800 --> 0:03:16.080 be very difficult for us to serve Bill and his company, 0:03:16.480 --> 0:03:19.840 And so the technology industry depends very heavily on Taiwan. 0:03:19.840 --> 0:03:21.239 Who continues to for some time. 0:03:22.639 --> 0:03:25.880 The ai juggernaut has spoken and he's saying that Taiwan 0:03:25.960 --> 0:03:28.960 is really important as if we forgot, we'll pleased to 0:03:29.120 --> 0:03:32.040 go join in Washington bluebags. Mike Shephard, this is an 0:03:32.040 --> 0:03:36.720 extraordinary piece of reporting. Ultimately companies having to ease US 0:03:36.840 --> 0:03:40.480 government concerns here, Well, that's right. 0:03:40.480 --> 0:03:43.640 And this is actually answering with this reporting one of 0:03:43.640 --> 0:03:48.760 the fundamental questions surrounding Taiwan, one of the big what ifs. 0:03:49.400 --> 0:03:52.120 For years, the US government has warned that, you know, 0:03:52.240 --> 0:03:55.480 China has its eyes on Taiwan and may try to 0:03:55.520 --> 0:03:59.840 reunite with the island using military force. Now Beijing has 0:04:00.240 --> 0:04:02.720 that they have no interest in doing so. They would 0:04:02.760 --> 0:04:07.240 prefer peaceful reunification, but they have not ruled out military 0:04:07.320 --> 0:04:10.839 intervention at the same time, so one of the key 0:04:10.920 --> 0:04:15.920 questions is what happens if this takes place. One of 0:04:15.920 --> 0:04:19.960 the big questions is what happens to the semiconductor industry. 0:04:20.000 --> 0:04:23.480 Taiwan is responsible for ninety percent of the world supply 0:04:23.600 --> 0:04:26.839 the most advanced chips, the kind that supply and video. 0:04:26.880 --> 0:04:29.400 We just heard from Jensen, why are you talking about that? 0:04:29.760 --> 0:04:32.080 And it is so essential for the US we saw 0:04:32.200 --> 0:04:35.920 during the pandemic and more recently with the earthquake in Taiwan, 0:04:36.200 --> 0:04:39.320 the concerns about any sort of supply chain disruption. 0:04:40.400 --> 0:04:45.239 Really, what's phenomenal here is that ASML is the lynchpin. Really, 0:04:45.320 --> 0:04:48.880 it's shipped more than two hundred of these very sophisticated 0:04:48.960 --> 0:04:52.599 EUV machines to clients outside of China. But they also 0:04:52.680 --> 0:04:57.680 do still ship to China, but far less technically sophisticated 0:04:57.760 --> 0:05:01.360 kinds of machines. Nevertheless, it looks as China has really 0:05:01.400 --> 0:05:03.400 been making strides in self sufficiency here. 0:05:03.400 --> 0:05:06.599 Michael, Well, you're right, it has, and we saw a 0:05:06.640 --> 0:05:11.280 sample of that last year during US Commerce Secretary Gina 0:05:11.360 --> 0:05:17.200 Raymondo's visit to mainland China, they Huawei Technologies unveiled a 0:05:17.240 --> 0:05:21.080 brand new smartphone and May sixty that featured a much 0:05:21.120 --> 0:05:26.640 faster semiconductor a processing chip than anybody thought they were 0:05:26.720 --> 0:05:31.200 capable of generating and using in a consumer device like that. 0:05:31.240 --> 0:05:34.720 It was a seven animeter chip, very very small, and 0:05:34.920 --> 0:05:37.200 the US was taken aback by it, and it was 0:05:37.200 --> 0:05:41.560 made in part with older generation ASML machines, but with 0:05:41.640 --> 0:05:45.120 technology that came from other sources as well. It was 0:05:45.160 --> 0:05:48.880 a sign that the concern is that China will be 0:05:48.960 --> 0:05:52.279 able to catch up in terms of technological advances in 0:05:52.400 --> 0:05:57.200 producing these semiconductors, and it requires sensitive equipment like the 0:05:58.000 --> 0:06:01.440 kind that ASML makes. ISML is the only producer of 0:06:01.480 --> 0:06:05.280 these machines called extreme ultraviolet machines, and they harness light 0:06:05.320 --> 0:06:09.440 waves to create these tiny, tiny transistors that you need 0:06:09.480 --> 0:06:12.640 a microscope to look at, and yet they do all 0:06:12.680 --> 0:06:17.520 these powerful computations of the likes that artificial intelligence and 0:06:17.560 --> 0:06:22.159 even military applications require. So the sensitivity of this is. 0:06:24.040 --> 0:06:24.599 Very clear. 0:06:25.640 --> 0:06:28.200 What we're talking about though, also is a maintenance function 0:06:28.320 --> 0:06:32.080 because these EUV machines, as they're known, they require a 0:06:32.200 --> 0:06:36.120 lot of upkeep and the company ASML needs to be 0:06:36.160 --> 0:06:39.920 able to turn them off remotely just for maintenance purposes. However, 0:06:40.279 --> 0:06:42.799 they now have a geopolitical significance too. 0:06:43.320 --> 0:06:46.440 Michael Shepard weaving it all together for us so beautifully, 0:06:46.680 --> 0:06:48.880 we thank you so much, and look at has real 0:06:48.920 --> 0:06:50.640 effects on companies' earnings. 0:06:50.680 --> 0:06:50.840 Here. 0:06:51.040 --> 0:06:53.760 SML has said with the latest export controls on their 0:06:53.800 --> 0:06:56.200 ability to shift to China, they could see a revenue 0:06:56.200 --> 0:06:57.600 impact of some fifteen. 0:06:57.279 --> 0:06:58.120 Percent this year. 0:06:58.320 --> 0:07:00.719 We look ahead to what's happening within video earnings yet 0:07:00.720 --> 0:07:03.160 to come, and we know they've got exposure to China too, 0:07:03.520 --> 0:07:06.239 as we've all together with Christina Hooper, Investco's chief global 0:07:06.279 --> 0:07:08.960 market strategists, and I'm just going to kick off with ultimately, 0:07:09.160 --> 0:07:11.760 China is a headwind at the moment where record highs across. 0:07:11.560 --> 0:07:14.280 All major benchmarks in the US. Is China much of 0:07:14.280 --> 0:07:17.800 a headwind from your perspective, I don't think so. Clearly. 0:07:18.040 --> 0:07:22.840 There are always going to be geopolitical tensions, issues concerns, 0:07:23.520 --> 0:07:26.880 but markets have a funny way of putting blinders on 0:07:27.200 --> 0:07:30.720 and focusing on what's the most important fundamentals as well 0:07:30.760 --> 0:07:33.800 as monetary policy in these challenging. 0:07:33.360 --> 0:07:35.000 Times and these unique times. 0:07:35.200 --> 0:07:37.800 And so I think there's a calculus that has gone 0:07:37.840 --> 0:07:39.720 on that has said, yes, you know, there are a 0:07:39.840 --> 0:07:43.480 number of risks out there, but we're going to keep 0:07:43.520 --> 0:07:47.880 investing and we're going to continue to enjoy the earnings 0:07:47.880 --> 0:07:48.680 growth that we've seen. 0:07:49.200 --> 0:07:52.200 And talking of earnings growth, everyone waiting with baited breath 0:07:52.360 --> 0:07:54.720 and what sort of growth in vidio does indeed post 0:07:54.800 --> 0:07:57.240 after the bell tomorrow in excess of two hundred percent 0:07:57.280 --> 0:08:00.280 increase in revenue is extraordinary. There is a market from 0:08:00.280 --> 0:08:03.200 the back of reporting coming from other titles today, that 0:08:03.640 --> 0:08:07.240 maybe there'll be some sort of pocket air pocket in 0:08:07.280 --> 0:08:10.560 between some of the more sophisticated chips that was being 0:08:10.600 --> 0:08:13.320 made from a Grace Hopper perspective. Buy in Nvidia moving 0:08:13.400 --> 0:08:17.040 onto the Grace Blackwell and Amazon, for example, pausing the 0:08:17.040 --> 0:08:22.080 ones on the less sophisticated Grace Hopper. Does that ultimately 0:08:22.120 --> 0:08:25.440 matter more the Nvidia intricacies that who's buying who's not 0:08:25.920 --> 0:08:27.440 than say FED policy right now. 0:08:28.480 --> 0:08:33.120 Well, for the tech sector, perhaps it's in Vidia, But 0:08:33.200 --> 0:08:35.959 I think when we take a step back and look 0:08:36.040 --> 0:08:39.760 at what is likely to help markets move forward, it's 0:08:39.880 --> 0:08:43.560 rate cuts. The reality is that it impacts the tech 0:08:43.640 --> 0:08:47.160 sector in particular because typically when we see higher yields, 0:08:47.200 --> 0:08:50.080 when the ten years higher, that exerts downward pressure on 0:08:50.240 --> 0:08:54.160 technology stocks and vice versa. The higher valuation names are 0:08:54.240 --> 0:08:59.120 more sensitive. So I think that that right now is important. 0:08:59.200 --> 0:09:03.760 Certainly in Video's important for Nvidia, for for semiconductors, for 0:09:03.960 --> 0:09:08.840 the tech sector, but right now there is a weight 0:09:09.000 --> 0:09:12.080 on for central banks to start cutting. 0:09:12.120 --> 0:09:12.800 We've gotten a. 0:09:12.760 --> 0:09:18.080 Few little cuts so far Swiss National Bank, Risk Bank, 0:09:18.200 --> 0:09:19.960 but now we're ready for more. 0:09:20.400 --> 0:09:22.320 And I look at it this way. 0:09:22.679 --> 0:09:26.200 We you know, as a parent of teenagers, a son 0:09:26.240 --> 0:09:28.440 who went through the college process a couple of years ago. 0:09:29.200 --> 0:09:31.719 He got into school off the waitlist, some kids got 0:09:31.760 --> 0:09:34.240 in early decision. They all wound up graduating at the 0:09:34.280 --> 0:09:36.880 same time with the same degree. And so we're going 0:09:36.920 --> 0:09:39.360 to see probably the first mover is going to be 0:09:39.360 --> 0:09:42.120 the ECB, maybe the Bank of Canada given the inflation print, 0:09:42.360 --> 0:09:44.559 but the FED will be along this year as well, 0:09:44.600 --> 0:09:46.439 and we'll get a few rate cuts. We'll all end 0:09:46.520 --> 0:09:49.360 up pretty much in the same place, but we're going 0:09:49.400 --> 0:09:52.160 to see We're probably going to see others start the 0:09:52.200 --> 0:09:56.079 ball rolling, other majors start the ball rolling before. 0:09:55.800 --> 0:09:58.800 We see the FED. So in a way, be patient. 0:09:58.880 --> 0:10:02.560 Christina, should you buy into tech for all viewers now? 0:10:03.040 --> 0:10:05.040 On the biasis of macro policy? 0:10:06.240 --> 0:10:09.080 Well, I'm not a believer in market timing because it 0:10:09.160 --> 0:10:12.520 is so hard to do, but I do think starting 0:10:12.520 --> 0:10:16.360 to increase exposure now as we wait for rate cuts 0:10:16.400 --> 0:10:22.559 to begin is arguably a very sensible strategy. Many investors, 0:10:22.679 --> 0:10:27.559 retail and institutional, are overweight to cash, and so certainly 0:10:27.600 --> 0:10:29.800 they should be taking some money off the sidelines and 0:10:29.840 --> 0:10:33.520 moving it into fixed income, locking in rates on the 0:10:33.559 --> 0:10:36.720 long end, but also they should be moving into equities, 0:10:37.040 --> 0:10:39.800 and it's not just tech. I think tech's very attractive, 0:10:40.080 --> 0:10:45.680 but for valuation reasons, European equities, UK equities, Emerging markets equities, 0:10:45.800 --> 0:10:48.319 there are a lot of opportunities out there for different reasons. 0:10:48.400 --> 0:10:49.400 On industry groups. 0:10:49.520 --> 0:10:52.360 Utility is doing very well, but also because everyone thinks 0:10:52.360 --> 0:10:53.240 that's an AI play. 0:10:53.679 --> 0:10:56.120 Absolutely, who would have ever thunk it. That was not 0:10:56.160 --> 0:10:59.319 on my Bingo card for this year, but utilities absolutely 0:10:59.320 --> 0:11:00.199 are ANAI play. 0:11:00.600 --> 0:11:01.120 So do you. 0:11:01.080 --> 0:11:03.959 Think that ultimately we should start spreading our wings from 0:11:03.960 --> 0:11:06.640 an industry perspective as well as a geographical perspective. 0:11:07.200 --> 0:11:10.320 Yes, absolutely, But we have to recognize a lot of 0:11:10.360 --> 0:11:13.160 the very significant earnings growth is coming from. 0:11:12.960 --> 0:11:15.000 The tech sector especially. 0:11:15.160 --> 0:11:17.600 You know, when we look at at the industries within tech, 0:11:17.920 --> 0:11:20.880 three of them are delivering double digit earnings growth. So 0:11:20.920 --> 0:11:23.040 that is a compelling place. We just have to recognize 0:11:23.080 --> 0:11:24.400 that valuations are higher. 0:11:24.960 --> 0:11:27.520 This only our all eyes still on tomorrow's set of 0:11:27.559 --> 0:11:31.120 earnings or great macro perspective. Coming from Invesco Chief Global 0:11:31.720 --> 0:11:41.880 Strategist Christina Hooper, we love having her hair. Let's talk 0:11:41.960 --> 0:11:45.280 zoom video for a moment reporting as first quarter results 0:11:45.320 --> 0:11:47.720 and they beat expectations on the prior quarter. 0:11:48.120 --> 0:11:50.320 It's the sales forecast perhaps. 0:11:49.920 --> 0:11:53.280 That had some people trying to understand where there's conservative 0:11:53.280 --> 0:11:55.920 elements are lying and where the opportunities are too. Let's 0:11:55.920 --> 0:11:57.880 talk through it all as the shares push higher with 0:11:57.960 --> 0:12:00.920 Kelly Steckelberg Zoom CFO to have you here in New 0:12:00.960 --> 0:12:03.959 York with us, Kelly, and there is some concern about 0:12:03.960 --> 0:12:06.880 perhaps a more cautious forecast. Can you talk us through 0:12:07.080 --> 0:12:10.719 how you've seen small medium sized enterprise demand for your 0:12:10.720 --> 0:12:11.560 products at the moment. 0:12:11.600 --> 0:12:14.200 Sure. So, first of all, we were very pleased with 0:12:14.280 --> 0:12:19.640 our Q one results. We beat analyst expectations across revenue, profitability, 0:12:19.840 --> 0:12:24.160 and free cash flow, and we reported you know, Q 0:12:24.240 --> 0:12:26.880 one revenue of one point one four one billion dollars 0:12:26.920 --> 0:12:30.960 up three percent year every year. We did see growth 0:12:31.160 --> 0:12:33.880 in our enterprise which was up five percent year every year. 0:12:34.200 --> 0:12:36.720 And then turn in terms of SMB, which we've gotten 0:12:36.720 --> 0:12:40.800 a lot of questions about. We support that segment of 0:12:40.800 --> 0:12:45.040 our business, mostly through our online segment, and that actually 0:12:45.160 --> 0:12:48.640 did better than we expected this quarter. So very pleased 0:12:48.640 --> 0:12:50.520 with the results across all of our segments. 0:12:50.640 --> 0:12:51.760 You are a numbers person. 0:12:52.320 --> 0:12:55.800 We saw the number of enterprise customs declined slightly, but 0:12:55.840 --> 0:12:57.439 there was a reshuffling of who. 0:12:57.280 --> 0:12:58.640 Actually fills into those gaps. 0:12:58.640 --> 0:13:01.640 They accounting for the difference of of how you count customers. 0:13:01.840 --> 0:13:04.840 But why are they declining? How do we digest that 0:13:04.920 --> 0:13:06.119 to climb Yeah. 0:13:06.000 --> 0:13:08.120 What I really want to point out, as you just said, 0:13:08.160 --> 0:13:11.960 we did transition some customers from the direct segment online 0:13:12.040 --> 0:13:15.200 just to promote better self service. These are typically, you know, 0:13:15.280 --> 0:13:18.920 much smaller customers. Where we continue to see growth is 0:13:19.080 --> 0:13:22.520 in the upmarket. So when you look at customers that 0:13:22.600 --> 0:13:25.880 contribute more than one hundred thousand dollars of trailing twelvemonth revenue, 0:13:26.120 --> 0:13:29.280 that was actually up eight percent year every year. So 0:13:29.800 --> 0:13:32.640 that's the segment of the business that is really helping 0:13:32.720 --> 0:13:35.320 us drive growth and where we're really focused, you know, 0:13:35.480 --> 0:13:38.240 on the smaller end those customers, we give them a 0:13:38.240 --> 0:13:41.000 lot of flexibility. They come and go as they please. 0:13:41.120 --> 0:13:43.640 They sometimes you know, turn the service off while they 0:13:43.640 --> 0:13:45.280 take a break with their kids, and then they come 0:13:45.280 --> 0:13:46.319 back when it serves them. 0:13:46.320 --> 0:13:48.280 Well, let's talk about some of the areas that you 0:13:48.320 --> 0:13:50.880 have been pushing into to diversify. In particular, I'm thinking 0:13:50.920 --> 0:13:54.760 of contact central workforce engagement, management of AI now city 0:13:54.760 --> 0:13:57.040 group analysts and I know you love having analysts notes 0:13:57.040 --> 0:13:58.440 reported back to you, but they say it find it 0:13:58.440 --> 0:14:02.080 a bit hard to see a durable offway to reaccelerating growth. 0:14:02.559 --> 0:14:04.640 Paint that picture therefore, Yeah, accelerating cround. 0:14:04.760 --> 0:14:07.560 So we talked about this a lot on the call yesterday. 0:14:07.600 --> 0:14:09.680 We've said that we expect growth in the second half 0:14:09.720 --> 0:14:12.800 of the year to start to reaccelerate. You mentioned contact center. 0:14:12.920 --> 0:14:16.199 We announced yesterday we have over ninety customers now in 0:14:16.240 --> 0:14:18.640 our contact center that are contributing more than one hundred 0:14:18.679 --> 0:14:22.520 thousand dollars of trailing twelvemonth revenue, which highlights these are 0:14:22.600 --> 0:14:27.160 sophisticated buyers and our products are now competing with the 0:14:27.440 --> 0:14:30.320 top four in the Gartner Magic quadrant that you probably. 0:14:30.000 --> 0:14:31.040 Know all the names of. 0:14:31.200 --> 0:14:34.400 And that combined with the strength we continue to see 0:14:34.440 --> 0:14:38.560 with Zoom Phone work Vivo, which we were just there 0:14:38.560 --> 0:14:42.480 was news about this last week where Meta is discontinuing 0:14:42.560 --> 0:14:45.440 its workplace and we have been named the preferred partner 0:14:45.440 --> 0:14:48.920 for that transition, which opens up a whole new opportunity 0:14:48.960 --> 0:14:51.360 for us. So those are all the components that are 0:14:51.360 --> 0:14:53.120 going to lead to reacceleration in the back half of 0:14:53.160 --> 0:14:54.920 the year and then into FY twenty six. 0:14:55.160 --> 0:14:57.640 And let's talk about competitors though, because Microsoft Teams is 0:14:57.640 --> 0:15:01.240 a strong one and we understand that perhaps there's been 0:15:01.280 --> 0:15:05.960 some regulatory conversations coming from Zoom about unfair competition. 0:15:06.240 --> 0:15:07.000 How's that going. 0:15:07.400 --> 0:15:10.800 Well, you know, there's a lot that's going on in 0:15:10.800 --> 0:15:12.400 the EU around bundling. 0:15:13.120 --> 0:15:15.120 They unbundle it there. 0:15:15.320 --> 0:15:20.360 However, until they really get to a competitive pricing for 0:15:20.600 --> 0:15:24.360 their products, it's not really a level playing field. And 0:15:25.280 --> 0:15:28.080 that's what would serve everyone in this industry, we believe 0:15:28.120 --> 0:15:32.560 the best, including customers, because having a really level playing 0:15:32.560 --> 0:15:35.240 field for the two strongest competitors, which is of course 0:15:35.320 --> 0:15:40.680 Zoom and Microsoft, we think is the best approach. Regulators listening, Yeah, 0:15:40.720 --> 0:15:42.960 I guess we'll wait and see how it continues to evolve. 0:15:43.520 --> 0:15:45.640 Well, Europe's always quite busy and quite quick on their 0:15:45.680 --> 0:15:49.360 regulatory decision making. But I'm interesting in what therefore you 0:15:49.400 --> 0:15:51.600 are doing for an investor base who is still waiting 0:15:51.640 --> 0:15:55.200 for this regalvanization, this reacceleration of growth. They're seeing some 0:15:55.280 --> 0:15:58.520 of the areas that you're pushing into in products. Jeffrey's saying, look, 0:15:58.520 --> 0:16:01.160 we want to see perhaps a little bit buyback sometimes 0:16:01.200 --> 0:16:03.760 of shares. We're thinking about potentially strategic M and A. 0:16:03.800 --> 0:16:05.640 Have we've got any news for the investor base there. 0:16:05.760 --> 0:16:09.520 Yeah, So you know, reaccelerating and top line growth is 0:16:09.640 --> 0:16:13.320 at absolutely our number one priority. In the meantime, while 0:16:13.320 --> 0:16:15.720 we are focused on investing there, we are also focused 0:16:15.720 --> 0:16:18.840 on giving returns back to our shareholders. So last quarter 0:16:18.920 --> 0:16:22.320 we announced a one point five billion dollars share buyback program. 0:16:22.680 --> 0:16:25.120 During Q one we did buy back two point four 0:16:25.200 --> 0:16:28.120 million shares, and we will continue to execute that over 0:16:28.160 --> 0:16:31.920 the next seven quarters, and in the meantime also looking 0:16:31.960 --> 0:16:35.400 for opportunities to deploy our cash if we see strategic 0:16:35.480 --> 0:16:37.680 M and A opportunities that would accelerate top line growth 0:16:38.000 --> 0:16:40.800 or accelerate tech development as well. Those are the two 0:16:40.840 --> 0:16:42.640 areas that we really keep front and center. 0:16:42.440 --> 0:16:43.840 The kind of aqua highest potentially. 0:16:43.880 --> 0:16:46.840 Yeah, absolutely, Kenny, It's great to have you here, coming 0:16:46.840 --> 0:16:48.680 in from Texas to be here with us in New York. 0:16:48.760 --> 0:16:51.360 Zoom CFO Candy Stackerberg. We really appreciate it. 0:16:51.480 --> 0:16:53.720 Meanwhile, coming up, I've just got to talk about crypto 0:16:53.720 --> 0:16:56.840 for a moment, ether surging on science of momentum for 0:16:56.880 --> 0:17:00.640 that ETF approval, will it come to spot eth US next. 0:17:00.880 --> 0:17:01.680 I Meanwhile, we've. 0:17:01.520 --> 0:17:02.800 Just got to keep an eye on what's happening with 0:17:02.840 --> 0:17:04.720 ten Cent because there has been pressure. 0:17:04.920 --> 0:17:05.560 There has been, of. 0:17:05.520 --> 0:17:09.399 Course, well a big new game, a blockbuster game that 0:17:09.480 --> 0:17:11.639 everyone has been waiting for, but within an hour they 0:17:11.680 --> 0:17:13.919 had to basically put that game on ice because the 0:17:13.960 --> 0:17:18.400 servers were overloaded. Dungeon and Fighter Mobile has really got 0:17:18.440 --> 0:17:22.520 everyone very excited, but clearly some server fluctuations hurt on 0:17:22.600 --> 0:17:24.760 the interim. We're down by two point nine percent, and 0:17:24.920 --> 0:17:26.800 say this isn't going to be a long term impact. 0:17:27.080 --> 0:17:40.960 This is Bluebeg technology. 0:17:42.600 --> 0:17:45.959 Let's just talk about this rally rally in cryptocurrencies. It 0:17:46.000 --> 0:17:48.600 is underway amid signs of pretty much a momentum for 0:17:48.680 --> 0:17:52.800 approval of another spot ETF, but this time linked to 0:17:52.880 --> 0:17:56.720 ETH joining us. Now, James Sift from Bloemberg Intelligence, we're 0:17:56.760 --> 0:17:59.440 up twenty three percent in the last couple of days. 0:17:59.520 --> 0:18:01.880 We used to volatility. But what are the tea leaves 0:18:01.880 --> 0:18:03.040 that you're reading here? James? 0:18:04.119 --> 0:18:07.600 Yeah, So, I mean we've had these filings just pot 0:18:07.600 --> 0:18:10.239 of theory metfs for months since the fall even and 0:18:10.840 --> 0:18:13.399 nothing over the last couple months signified to us that 0:18:13.440 --> 0:18:14.879 there was any sort of approval if you talk to 0:18:14.920 --> 0:18:16.679 these issuers, exchanges, you name it. 0:18:16.960 --> 0:18:18.240 No one thought it was going to happen. 0:18:18.560 --> 0:18:21.159 And then we started hearing from different people yesterday that 0:18:21.240 --> 0:18:24.919 the SEC reached out with comments and requesting immediate basically 0:18:24.960 --> 0:18:26.639 responses and updates to filings. 0:18:27.320 --> 0:18:29.320 The deadline for this was Thursday. 0:18:29.560 --> 0:18:33.000 It's May twenty third, and the SEC was basically silent, 0:18:33.119 --> 0:18:35.880 not interacting with anyone on these topics until yesterday, which 0:18:35.880 --> 0:18:37.120 tells us this was a huge. 0:18:37.000 --> 0:18:39.159 Change as far as I'm concerned. 0:18:39.160 --> 0:18:42.439 So basically the SEC decided as of Monday when they 0:18:42.440 --> 0:18:44.479 reach up to issues. We don't know exactly when it started, 0:18:44.560 --> 0:18:47.800 made late morning, early afternoon, who knows, but the SEC 0:18:47.840 --> 0:18:50.320 basically started saying, all right, we're gonna, we're gonna, we're 0:18:50.400 --> 0:18:53.200 likely going to approve these things and basically took the 0:18:53.240 --> 0:18:54.919 approval odds out of the ABYSS as far as we 0:18:54.920 --> 0:18:55.480 were concerned. 0:18:55.840 --> 0:19:00.640 And therefore you've moved your spot ether ETF likelihood probbability 0:19:00.680 --> 0:19:03.360 to seventy five percent from just twenty five percent. 0:19:04.320 --> 0:19:04.920 Is this usual? 0:19:05.000 --> 0:19:09.080 Is this typical to have a sudden resurgence in the drama, 0:19:09.119 --> 0:19:09.800 shall we call it? 0:19:10.840 --> 0:19:13.879 No, Honestly, we were thinking about lowering our odds last week, 0:19:14.480 --> 0:19:17.159 but we were basically, we only went to ninety percent 0:19:17.200 --> 0:19:20.280 for the spot bitcoin ETFs, even though everything was pointing 0:19:20.280 --> 0:19:22.399 that it was going to get approved, and but the 0:19:22.480 --> 0:19:24.680 what we left that ten percent because we heard rumblings 0:19:24.680 --> 0:19:26.760 that the Biden White House was considering stepping in to 0:19:26.800 --> 0:19:29.400 stop the approval of spot bitcoin ETFs, which just signs 0:19:29.600 --> 0:19:31.960 a little bit crazy on its face. But honestly, it 0:19:32.000 --> 0:19:34.439 seems like the exact opposite might have happened here. It 0:19:34.480 --> 0:19:36.959 seems like the SEC was likely planning to approve. There 0:19:37.000 --> 0:19:40.200 might even be denial letters drafted up, and it might 0:19:40.240 --> 0:19:42.399 be the Biden admin for political reasons, that came in 0:19:42.440 --> 0:19:44.359 and basically said you need to approve these things. We 0:19:44.359 --> 0:19:45.919 don't want to be too anti crypto. 0:19:46.760 --> 0:19:48.560 Interesting perspective coming from you, James. 0:19:48.600 --> 0:19:51.119 I'm interested therefore what it actually means in terms of 0:19:51.240 --> 0:19:55.320 institutional demand. What we saw was with the Bitcoin ETF, 0:19:55.359 --> 0:19:59.480 a whole host of new ETFs were launched and suddenly 0:19:59.600 --> 0:20:01.000 a whole wave of money came in. 0:20:01.080 --> 0:20:03.680 Is the same thing going to happen for smart contract focus? 0:20:04.640 --> 0:20:04.920 Yeah? 0:20:04.960 --> 0:20:06.920 So I do think that there is going to be 0:20:06.960 --> 0:20:09.320 a wave of ethereym ETFs that launch. We don't know 0:20:09.400 --> 0:20:11.960 exact timing because this hasn't been planned out. The Bitcoin 0:20:12.000 --> 0:20:13.920 ETF was planned out for months in advance. There's a 0:20:13.920 --> 0:20:16.760 whole bunch of other filings besides this nineteen before approval 0:20:16.760 --> 0:20:18.840 that we're now expecting this week. There needs to be 0:20:18.880 --> 0:20:22.159 approval on the s onees or perspectuses as well. So 0:20:22.320 --> 0:20:24.480 we do think there's going to be significant demand for 0:20:24.520 --> 0:20:26.280 these things, but it will be probably some. 0:20:26.400 --> 0:20:28.439 Fraction of the Bitcoin ETF demand. 0:20:28.880 --> 0:20:30.399 So if you look at the market cap at bitcoin, 0:20:30.600 --> 0:20:33.640 etherium is about a third of that market cap. Also, 0:20:33.720 --> 0:20:35.520