Speaker 1: We're from Mahard. We're Innovations, Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline Heid at Bloomberg's world headquarters in New York.
Speaker 4: And I'm Ed Ludlow in San Francisco. This is Bloomberg Technology.
Speaker 3: Back together again, coming up at full earnings coverage. Of course,
Speaker 3: Netflix its sours after posting its biggest subscriber growth since
Speaker 3: the pandemic.
Speaker 4: Details ahead plus sticking with earnings will break down the
Speaker 4: results from Europe's most valuable tech company. And here from
Speaker 4: the ASML CEO himself.
Speaker 3: And we push your head to the results out after
Speaker 3: the bell and partake a bit of a game of bingo,
Speaker 3: but this time you'll have to listen into the Tesla
Speaker 3: earnings call to win all that and.
Speaker 5: So much more ahead.
Speaker 3: Meanwhile, let's check in on these earnings in these markets,
Speaker 3: because look, we are seeing reprieve money pouring into the
Speaker 3: US stock market on the back of technology managing to
Speaker 3: outperform in terms of earnings.
Speaker 5: Yes, we'll dig into Netflix in a moment.
Speaker 3: NASA up more than one point one percent on the
Speaker 3: back of it now interesting, we're all thinking about China
Speaker 3: about whether or not stimulus is indeed to come. They
Speaker 3: signal that they will reduce those rates that are.
Speaker 5: Held by the banks.
Speaker 3: Reserve requirements are going to come down in the next
Speaker 3: couple of weeks. We see the stock market reaction. I'm
Speaker 3: highlighting what's happening on the Nasdak Golden Dragon. At the moment,
Speaker 3: we're up two point six percent for the Chinese stocks.
Speaker 3: Now we're seeing bond market pretty lackluster on the day
Speaker 3: as we see some pretty strong data here in the
Speaker 3: United States. We want to see what's happening in the
Speaker 3: world a bitcoin there, because what a tory ride we've
Speaker 3: had of late. Yes, we seem to have traveled and
Speaker 3: arrived and now sell off. But today we're actually up
Speaker 3: up again two percent.
Speaker 5: We're at fully thousand, holding out that sort of level
Speaker 5: at the moment.
Speaker 6: Ed.
Speaker 5: But let's dig into the micro what's happening on your.
Speaker 4: End, Yeah, a lot going on in single names, specifically
Speaker 4: in the earnings context. Texas Instruments is the biggest maker
Speaker 4: of analog chips. He gave the sales outlook that Frank
Speaker 4: makes us worried that the slump in industrial Semis is continuing.
Speaker 4: These are the most basic chips that do vital functions
Speaker 4: and that stock down two point four percent ASML Europe's
Speaker 4: most valuable tech company. These are the European listed shares.
Speaker 4: Its orders tripled in the cord have just gone the
Speaker 4: shehare reaction obviously positive up nine percent. We will hear
Speaker 4: from the CEO in due course. Tesla after the bell
Speaker 4: up one point four percent, but it's been the biggest
Speaker 4: points drag on the S and P five hundred so
Speaker 4: far in twenty twenty four. The focus how many evs
Speaker 4: are going to build this year and rounding it off
Speaker 4: Microsoft by the way up one percent. I just put
Speaker 4: it there because as it stands, it's just a crossed
Speaker 4: once again the three trillion market cap mark. That's more
Speaker 4: of a public service announcement on that one. Meta has
Speaker 4: hit a key milestone though, and it's a stock that's
Speaker 4: really interesting ahead of earnings. Its gain has taken its
Speaker 4: market cap to one trillion dollars for the first time
Speaker 4: in around two years. We've passed the year of efficiency.
Speaker 4: That's in the rear view mirror. Earning coming up. We
Speaker 4: have a mixed narrative right now about the ad space.
Speaker 4: But finally, this is a stock starting to get some
Speaker 4: credit I think for its AI story. We'll come back
Speaker 4: to that later in the program and later in the
Speaker 4: week as well.
Speaker 3: Meanwhile, we've got to get straight to it and on
Speaker 3: what is dictating trades, certainly in terms of the direction
Speaker 3: of travel from the Netflix move and into the NASDAG
Speaker 3: more broadly, shares popping after those companies' numbers, we really
Speaker 3: did see the biggest jump in new subscribers since the pandemic.
Speaker 5: We've got to dig into the details.
Speaker 3: Geta Raganathan's with us from Lummeg Intelligence, and we were
Speaker 3: blown away by subscriber growth and indeed by seemingly the
Speaker 3: advertising jugnaut really starting to pay off.
Speaker 5: Now is that what's working?
Speaker 7: I mean, everything seems to be working, Caroline. So obviously, yes,
Speaker 7: we did see those huge subscriber numbers, and I think
Speaker 7: what really is kind of giving the street and the
Speaker 7: market so much of confidence in this whole story is
Speaker 7: that you have all of these growth drivers in place. Yes,
Speaker 7: you know they're advertising to your has kind of kicked off.
Speaker 7: It got off to a little bit of a slow start,
Speaker 7: but remember they only have it in about twelve markets,
Speaker 7: so it really has to kind of gain much greater traction,
Speaker 7: and they're going to do exactly that they've invested now
Speaker 7: in this whole raw programming deal. So we should start
Speaker 7: the start to see the advertising tier kind of become
Speaker 7: much more material in revenue starting at least in twenty
Speaker 7: twenty five. But as of right now, it's the Paige sharing,
Speaker 7: it's the password sharing crackdown that is kind of really
Speaker 7: really working and working very well. And it wasn't just
Speaker 7: the four y U results, it's the guidance for twenty
Speaker 7: twenty four that kind of I think blew everybody away.
Speaker 4: All right, Geeterrang and Nathan Bloomberg Intelligence technology analysts, thank
Speaker 4: you so much. Just keep the conversation going with Rich
Speaker 4: Greenfield Partner and media and technology analysts at light Shed
Speaker 4: Partners and Rich. When I went through the numbers more deeply,
Speaker 4: there's the thirteen point one million new subs, but five
Speaker 4: million of those came from the emir region. So it's interesting,
Speaker 4: what do you think are those drivers, those growth drivers
Speaker 4: that Geeta was talking about.
Speaker 8: I mean, you have a few sort of what I
Speaker 8: would call the perfect storm if you think about what's
Speaker 8: happening right now. Ed one Obviously, all of the companies,
Speaker 8: the legacy media companies, whether we're talking Disney or Warner Brothers,
Speaker 8: Discovery or Paramount or comcass like, they're all pulling back
Speaker 8: on their streaming efforts.
Speaker 1: You know, they've all.
Speaker 8: Sort of shifted into let's cut costs, let's raise the price,
Speaker 8: let's cut back on marketing. And so the competitive landscape
Speaker 8: for Netflix is far less intense.
Speaker 1: Than it was.
Speaker 8: You know, I think we had this brief period of
Speaker 8: time during the pandemic where everyone in legacy media, cable
Speaker 8: network media world thought like getting into streaming was easy.
Speaker 8: Now they're realizing it is really hard. The markets are
Speaker 8: no longer paying for subs. They want to see profitability,
Speaker 8: so they're all pulling back. So number one, competition is
Speaker 8: lessening for Netflix. Number two, you know, I think the
Speaker 8: reality is that Netflix investing in lower costs here, you know,
Speaker 8: getting and advertising having a lower cost service is making
Speaker 8: a very big difference. And then I think three, one
Speaker 8: of the amazing things that you're in right now is
Speaker 8: as the legacy media companies pull back on their own
Speaker 8: streaming efforts, they're seeing their legacy businesses cable television really
Speaker 8: under pressure.
Speaker 1: They're licensing more content.
Speaker 8: You know, just last night you saw Warner Brothers Discoveries
Speaker 8: ABO licensing Sex and the City to Netflix, like everything
Speaker 8: is for sale, and so the amount of content flowing
Speaker 8: onto Netflix is exploding. We've really come full circle. It's
Speaker 8: like back to the future day Flix. Remember a five
Speaker 8: years ago everything was on Netflix from third party companies
Speaker 8: and then there was nothing, And now we're really right
Speaker 8: back to it.
Speaker 1: We're back to that.
Speaker 8: You know, the heroin needle is back in the arm,
Speaker 8: like they can't get off of the drug of licensing
Speaker 8: content to Netflix they needed for survival right now. And
Speaker 8: so Netflix is in this position where they've got more
Speaker 8: content than ever before, and the competitive dynamic is less
Speaker 8: than in years, and they've got a cheaper service with
Speaker 8: advertising to offer to consumers. That perfect state is why
Speaker 8: Netflix had their second best net ad quarter in the
Speaker 8: company's history.
Speaker 3: Okay, so rich, what therefore is priced in? Before we
Speaker 3: get into basically what seems to be a bit of
Speaker 3: a blood bath and the rest of the competitive landscape,
Speaker 3: What about the leaderhip position that Deutsche Bank at the
Speaker 3: moment is saying is fully priced into the stock at
Speaker 3: these levels?
Speaker 9: Is it?
Speaker 5: How much further can we run.
Speaker 1: The Internet is generally winner take most.
Speaker 8: I was just listening to one of your colleagues talk about,
Speaker 8: you know, Meta getting back to a trillion dollar market cap.
Speaker 1: You know, we there is I think tremendous room to run.
Speaker 8: You know, Netflix is still you know, you're still looking
Speaker 8: at a company that there's no reason why they can't
Speaker 8: add hundreds of millions of subscribers. I mean the fact
Speaker 8: that they added thirteen million subscribers in a quarter. I
Speaker 8: mean there now it's sept million subscribers in the US.
Speaker 8: You know, I think people not too long ago thought
Speaker 8: the US was tapped out. Now they're growing the US
Speaker 8: nicely again, and I think all signs point to them
Speaker 8: getting to eighty to ninety million subs over time.
Speaker 1: Europe. You mentioned there's huge growth opportunities in Europe.
Speaker 8: So I think the reality is now that they have
Speaker 8: a lower cost product, and you know, they have an
Speaker 8: advertising tier in markets that represent eighty percent of AD
Speaker 8: dollars worldwide, So there's tremendous potential to accelerate growth. I
Speaker 8: don't think the growth story is over at all, and
Speaker 8: I think the most important thing to think about is
Speaker 8: that competitive dynamic eases. That's going to fuel Netflix, and
Speaker 8: the real question should be what happens to all these
Speaker 8: other companies, whether it's Disney or Warner Brothers or Paramount
Speaker 8: well Rich.
Speaker 4: We discussed that twenty four hours ago in the context
Speaker 4: of the WWE deal, right. It answers all of the
Speaker 4: points you've just made in that it's raw in the US,
Speaker 4: but exclusivity and all the other properties outside the US.
Speaker 6: Where's Disney and ESPN?
Speaker 4: I don't see them doing deals like the one which
Speaker 4: surprised us between Netflix and TKO.
Speaker 8: The reality is these companies can't compete, you know, they
Speaker 8: just don't.
Speaker 1: They're trying to balance their.
Speaker 8: Legacy media assets, whether that's cable networks or linear broadcast
Speaker 8: TV networks and TV stations.
Speaker 1: They're all trying to balance and so the result.
Speaker 8: Is is those businesses which are very profitable decline. They
Speaker 8: don't have the same dollars to invest in streaming, and
Speaker 8: so they're all scaling back. And so the real question
Speaker 8: that I think we should be asking, you know, we've
Speaker 8: got all of the major media companies reporting over the
Speaker 8: next couple of weeks, and I'm sure you're going to
Speaker 8: be discussing it, you know, Ed and Caroline the question is,
Speaker 8: why are you still doing streaming?
Speaker 1: Like should you just give up?
Speaker 8: Like is there a path to building a scaled global
Speaker 8: streaming platform that really makes meaningful dollars? Or are you
Speaker 8: kidding yourself? And you're sort of just in that denial phase.
Speaker 8: And I think that's the real sort of you know,
Speaker 8: if you think about what's going on in boardrooms right now.
Speaker 8: You woke up this morning and you're like, holy cow,
Speaker 8: they added thirteen million subs. They're already at this massive scale,
Speaker 8: and they're growing at multiples of how fast we're growing.
Speaker 8: They're investing more, we're cutting back, Like, why are we
Speaker 8: doing this? Should we be in the peacock business? Should
Speaker 8: paramount plus exist?
Speaker 1: We believe?
Speaker 10: Know?
Speaker 8: How soon do these executives figure out what we believe they.
Speaker 3: Should do if we don't hear at this earnings and
Speaker 3: we do still see the fight on when it comes
Speaker 3: to more broadly, the world of streaming is now Netflix
Speaker 3: basically a global TV hasn't already got that rich.
Speaker 1: It feels Carolyn, like you've hit escape velocity. I mean,
Speaker 1: it really feels that way now.
Speaker 8: I will say there's probably a time by pre pandemic,
Speaker 8: I think there was a point in time where people
Speaker 8: felt the same, including myself, about Netflix, and then everyone
Speaker 8: called into question because they saw what was happening during
Speaker 8: the pandemic where everyone you know, Disney Plus exploded and
Speaker 8: Max HBO Maxit when it was called that at the
Speaker 8: time was exploding. I think everyone got very excited that
Speaker 8: this was easy to replicate. I think now you're they're
Speaker 8: all realizing that they are not capable. They don't have
Speaker 8: the resources, technical knowledge, commitment to the business, and so
Speaker 8: I do feel like Netflix is at that escape velocity,
Speaker 8: and I think the only question is how much money
Speaker 8: are these big media companies going to torch on streaming
Speaker 8: before they realize this is just not what they do well.
Speaker 8: They actually just make great content and they should focus
Speaker 8: on harvesting as much cash out of that business and
Speaker 8: not try to be a platform. That's probably where we
Speaker 8: end up by the end of twenty four with several
Speaker 8: of these companies, they're just going to.
Speaker 1: Have to give up.
Speaker 3: Rich Greenfield always great to have some time with you,
Speaker 3: Lightshed partners, me thank you.
Speaker 11: This is not your typical victory speech, but let's not
Speaker 11: have somebody take a victory when she had a very
Speaker 11: bad night.
Speaker 10: This race is far from over. There are dozens of states.
Speaker 5: Left to go.
Speaker 3: Former President Trump and fellow contender Nikki Haley there after
Speaker 3: the result came out, of course from mex Kayley lines
Speaker 3: was all across them in the real time. You now
Speaker 3: coming to us from Manchester, New Hampshire the morning after
Speaker 3: the primary to give us basically the details on the
Speaker 3: vote and also how the internet technology is intertwined into
Speaker 3: all of this.
Speaker 12: Well, Caroline, the details of this vote were Trump won
Speaker 12: by a double digit margin, maybe not the margin we
Speaker 12: expected going into primary day, but by eleven points, so
Speaker 12: not necessarily the strong second place, showing that Nikki Haley
Speaker 12: and her supporters were looking for. Nonetheless, she says she
Speaker 12: is going to stay in this race, go to the
Speaker 12: next real contest that she wants to compete in her
Speaker 12: home state of South Carolina, where she served as governor.
Speaker 12: That primary is on February twenty fourth. The issue is
Speaker 12: she's pulling more than thirty points below Trump in her
Speaker 12: home state, and over the course of the next four
Speaker 12: weeks attacks against her in South Carolina and elsewhere could
Speaker 12: only intensify, as will likely calls from the Republican establishment
Speaker 12: to fall in line behind Trump. As he is at
Speaker 12: this point the presumptive Republican nominee. Of course, this tease
Speaker 12: us up. Given Haley's very difficult rode ahead, very hard
Speaker 12: to see how she is a passed to the nomination
Speaker 12: for a rematch of the twenty twenty election, Donald Trump
Speaker 12: versus incumbent President Joe Biden. Now, the Biden campaign seems
Speaker 12: like it's welcoming this development. They have always wanted to
Speaker 12: have a general election against former President Trump because Biden
Speaker 12: has beaten him once before, obviously in twenty twenty. But
Speaker 12: of course Biden was in some ways not officially on
Speaker 12: the ballot here in New Hampshire as well. The Democratic Party,
Speaker 12: together with the President, have decided that the first primary
Speaker 12: should be in South Carolina, not here in New Hampshire,
Speaker 12: so he was not on the ballot. Instead, there was
Speaker 12: a write in campaign for him here, while other candidates
Speaker 12: like the Democratic Congressman from Minnesota, Dean Phillips, were actually
Speaker 12: on the ballot. Biden won, though in a decisive victory
Speaker 12: really historic for a write in campaign, more than seventy
Speaker 12: percent of the vote, while Dean Phillips got around twenty percent.
Speaker 12: What was interesting, though, guys, and this relates to your
Speaker 12: program here on Bloomberg Technology is right before the primary,
Speaker 12: a wobo call AI generated with the voice of Joe
Speaker 12: Biden was making phone calls to voters here saying to
Speaker 12: hold their vote until November, essentially in coouraging them not
Speaker 12: to go out and write in the name of the president.
Speaker 12: We asked the Congressman Dean Phillips about that a few
Speaker 12: days ago when that news broke. He didn't know anything
Speaker 12: about who was behind the robot call, but he did
Speaker 12: say we need to be thinking really critically about deep
Speaker 12: fakes in this election cycle, and he does not think
Speaker 12: President Biden has done enough at this point to address it, guys.
Speaker 4: And therein lies a key technology story for this election cycle.
Speaker 4: Bloomber's k lines on the ground terrific reporting. Thank you,
Speaker 4: Let's stick with politics and that AI story this election cycle.
Speaker 4: CrowdStrike president Michael Santonus joins us Now to discuss how
Speaker 4: generative AI could affect the upcoming election and how his
Speaker 4: company views election security off the heels of yesterday's New
Speaker 4: Hampshire primary. The deep fake is one example of malicious
Speaker 4: let's call it malicious content that circulates on social media
Speaker 4: in the early forays of this election cycle. What is
Speaker 4: the volume of activity you are seeing in that use
Speaker 4: case than others.
Speaker 13: Yeah, thanks for having me. Look, I think it's going
Speaker 13: to be an interesting year. There's over forty countries that
Speaker 13: are voting this year. The problems that you're talking about
Speaker 13: this morning a growing issue, and I think in a
Speaker 13: lot of ways it's what we're going to see. There's
Speaker 13: been so much talk over the years about voting systems
Speaker 13: and probably too much being put into that area because
Speaker 13: we do have to think about deep fakes, we have
Speaker 13: to think about disinformation campaigns, and ultimately what it's going
Speaker 13: to come down to is the average voter it's going
Speaker 13: to really struggle to understand what's real what's not, and
Speaker 13: they're going to have to do a lot of work
Speaker 13: to make sure that they're not making decisions on who
Speaker 13: to vote for that maybe is based on incorrect information.
Speaker 3: Audio deep feats actually something we saw in Slovakia's parliamentary
Speaker 3: election already. So something that's coming and unfolding. How much
Speaker 3: are well government's most front and center social media companies
Speaker 3: managing to breecee this because it can't all just be
Speaker 3: left in the hands of consumer to try and work
Speaker 3: out real.
Speaker 13: From not well, it can't be left to the consumer.
Speaker 13: But the problem is that it's very easy for a
Speaker 13: consumer to create this content. What was once a very
Speaker 13: technical thing to do is now a few thousand dollars
Speaker 13: and you can go and get a very good capable
Speaker 13: graphics card and the system. You can get some instructions
Speaker 13: and you can build your own deep fate, you can
Speaker 13: build the voiceover, you can build a video. So the
Speaker 13: challenge is we're going to see a lot of this
Speaker 13: content in volumes that we've never seen before created by
Speaker 13: the average person. So it's going to be something that
Speaker 13: everyone's going to have to step up to address. Whether
Speaker 13: it's governments, whether it's a social media sites. It's something
Speaker 13: that should be a concern to everybody because it's going
Speaker 13: to really sway decisions that people are making because it's
Speaker 13: just so easy to create this content today.
Speaker 5: Absolutely fascinating.
Speaker 3: And of course this isn't just the only election that's
Speaker 3: on the books here worldwide, plenty to be cracking down
Speaker 3: on CrowdStrike. President Michael Santonas, we want to thank you
Speaker 3: so much for joining us today. I'm sure we may
Speaker 3: well be returning for your expertise.
Speaker 5: In the future.
Speaker 3: Meanwhile, look, a group of senators from both sides of
Speaker 3: the aisle is ramping up calls for creation of a
Speaker 3: federal agency to regulate the technology industry, as is concern
Speaker 3: surrounding the risks of AI. As we discuss they continue
Speaker 3: to grow now. The group wrote a letter urging Majority
Speaker 3: Leader Chuck Schumer to establish an agency dedicated to regulating
Speaker 3: the nation's largest tech Company's.
Speaker 4: Head right, it's coming up on the program, ASML says,
Speaker 4: it's seeing some pretty positive signs in sales growth. Is
Speaker 4: the chip making equipment industry bottoms out. Bloomberg TV caught
Speaker 4: up with its CEO and we will bring you that
Speaker 4: conversation next. This is Bloomberg Technology. It's time for talking
Speaker 4: tech and first start. Washington State legislators are at the
Speaker 4: center of a growing debate regarding artificial intelligence regulation. House
Speaker 4: filled nineteen fifty one hopes to place restrictions on how
Speaker 4: businesses and government agencies can replace human decision making with AI. However,
Speaker 4: big tech lobbyists argue that the bill is flawed, and
Speaker 4: Apple is hitting the brakes on its plans to bring
Speaker 4: a self driving car to market. Bloomberg's reporting that the
Speaker 4: company is now shifting its focus toward building an electric
Speaker 4: car with more limited features. With the latest changes, the
Speaker 4: company is looking to introduce the car in twenty twenty
Speaker 4: eight at the earliest, down from twenty twenty six plus.
Speaker 4: ASML CEO Peter Wennick tells Bloomberg TV that the generative
Speaker 4: AI boom needs his company's technology to compute and store data.
Speaker 4: The Dutch chip maker benefited from strong demand from China
Speaker 4: last year, shares today at an all time high.
Speaker 3: Carol extraordinary, Sherry Action, extraordinary center numbers. And then you're
Speaker 3: just talking about the SML performance. Where he actually spoke
Speaker 3: with the CEO, Peter Wannick a little bit earlier, he
Speaker 3: sat down with Bloomerg's Tom McKenzie really laid into the
Speaker 3: clarity of China and artificial intelligence.
Speaker 5: Take a listen.
Speaker 2: Ninety of our business in China has to do with
Speaker 2: mature technology, and that's the technology that we need for
Speaker 2: all the major transitions. You know, if you think about
Speaker 2: energy transition, the electrical vehicle transition, digitization, rollout of the
Speaker 2: smart grid, you know, life sciences, it's all mature technology.
Speaker 2: That's where the masses are.
Speaker 14: So what is your message to those in Washington, lawmakers
Speaker 14: in Washington, lawmakers in the Hague even who are pushing
Speaker 14: to expand those restrictions beyond the most cutting edge lithography machines,
Speaker 14: to expand those restrictions on the sale of lithography to China.
Speaker 2: Well, you know, a full respect for national security concerns,
Speaker 2: that's not the point. But I think we need to
Speaker 2: take into consideration that this chip industry has created an
Speaker 2: almost seamless ecosystem across the globe that has given us
Speaker 2: massive advantages in terms of innovation and cost reduction. So
Speaker 2: that's from an economic point of view, we need to
Speaker 2: make sure that economic system that we have created, which
Speaker 2: has given us so much benefit, that we keep that intact.
Speaker 2: It's not about national security, it's about making sure that
Speaker 2: innovation can keep going.
Speaker 14: You're stepping down in April. Does your success or at
Speaker 14: least have to wargame the possibility the scenario where ASML
Speaker 14: has to operate in a global market X China.
Speaker 10: Well, you know, I.
Speaker 2: Don't know whether he's war gaming. I don't think he's
Speaker 2: a gamer, to be very honest, you know, we'll just
Speaker 2: have to deal with the reality. But also, you know,
Speaker 2: I'm an optimist.
Speaker 1: That worries a lot, and I do believe that we have.
Speaker 2: Created, you know, macroeconomic systems that are so dependent on
Speaker 2: each other that I think that is a scenario you
Speaker 2: can always put into a game, but I don't think
Speaker 2: that's a very realistic one.
Speaker 14: You do not have generative AI without ASML. It's as
Speaker 14: simple as that, without your extreme ultra violet lithography machines.
Speaker 14: How much demand are your clients saying they are seeing
Speaker 14: for chip making equipment to generate those kind of AI chips.
Speaker 2: Althot me first of all say that I think the
Speaker 2: full extent of what AI could bring is not totally
Speaker 2: clear because it's all about the applications and that still
Speaker 2: needs to develop.
Speaker 3: It.
Speaker 2: One thing is absolutely sure, it's going to need massive
Speaker 2: amounts of compute power and storage data storage. So I
Speaker 2: think without ASML, without our technology, that's not going to happen.
Speaker 2: So it's very clear it's going to be a big
Speaker 2: driver going forward for our business in the business of
Speaker 2: our customers.
Speaker 4: That was ASML CEO Peter winning the chip equipment maker
Speaker 4: euro It's most valuable tech company.
Speaker 3: Let's get a quick check on these markets. Said, Now
Speaker 3: let's just dwell on some of the record highs that
Speaker 3: we're hitting today because in amongst some of the strong
Speaker 3: economic data, we're still deciding that tech names are going
Speaker 3: to outperform, particularly from the Magnificent seven that have.
Speaker 5: Already rode so high already.
Speaker 3: Look at Matter I see above one trillion dollar market capitalization.
Speaker 5: We're riding high on Meta Alphabet also in a new
Speaker 5: record high.
Speaker 3: As well, Microsoft above three trillion dollars. We also, though,
Speaker 3: want to shine a light what's happening with Tesla? Will
Speaker 3: those earnings manage to well INCENTIVI some of the investors
Speaker 3: come back to that name, because remember it is one
Speaker 3: of the most expensive out there on the Magnificent seven
Speaker 3: and the worst performer of late.
Speaker 4: Lad Yeah, I think in the earnings context, eps's forecast
Speaker 4: has dropped thirty eight per cent year on year, a
Speaker 4: very different story with the other six. So Tesla is
Speaker 4: reporting earnings after the closing bell today, We're going to
Speaker 4: spice things up a bit in terms of how you
Speaker 4: react to those results with a game of bingo from
Speaker 4: the elon Inc Podcast team joining us to explain the
Speaker 4: methodology the science behind this masterpiece. Co host of the
Speaker 4: Elon Inc Podcast Bloombost Max Chafkin. I'm going to go
Speaker 4: straight to something that you've shortchanged the global audience on,
Speaker 4: which is you put prototypes are easy, production is hard.
Speaker 4: In two separate squares, You and I both know that
Speaker 4: that comes in one sentence.
Speaker 11: Listen, as Wilmer's chief Bingo signed, I can tell you that,
Speaker 11: you know, a Bingo card needs to have some gimmes
Speaker 11: and some that are much less likely to hit. You're right,
Speaker 11: it will be very surprising if Elon Musk did not
Speaker 11: say prototypes are easy, Production is hard, of course, in
Speaker 11: reference to the difficulty manufacturing the cyber truck.
Speaker 6: Tesla's a new pickup truck.
Speaker 3: A lot of these are fun, a lot of these
Speaker 3: are you know, at one point you're segment he's going
Speaker 3: to audibly take a toke.
Speaker 5: But what is crucial for an investor base here?
Speaker 3: What are the words that you think will come out
Speaker 3: of his mouth that might inject some enthusiasm or create
Speaker 3: further out.
Speaker 11: So you know, as Ed said, we're trying to have
Speaker 11: a little fun with this and also participating in what
Speaker 11: is really like a time honor tradition for both Tesla
Speaker 11: bulls as well as critics. You know, lots of investors
Speaker 11: lots of commentators have made their own Bigo cards. You
Speaker 11: can find them on Reddit, so we wanted to kind
Speaker 11: of join in the fun. I think in terms for
Speaker 11: investors it sounds strange to say, but Elon Musk's.
Speaker 10: Mood is very important.
Speaker 11: You know, he is one of the most accessible CEO,
Speaker 11: is probably the most accessible CEO in the world. He
Speaker 11: talks all the time continuously. He doesn't hold back, as
Speaker 11: we often discuss, and so how he describes these numbers
Speaker 11: is probably just important as the numbers that he describes.
Speaker 11: Do we get a sad Elon, a dower Elon, a
Speaker 11: pessimistic Elon, or do we get an optimistic Elon? And
Speaker 11: I think that will ultimately decide how investors react to
Speaker 11: what happens.
Speaker 3: Later Today, investments want to hear what demand is like,
Speaker 3: but also the dojo, the supercomputer, the AI, the robotics question. Now,
Speaker 3: this is something we're starting to hear from me in
Speaker 3: On Musk, that he's might well just take that kind
Speaker 3: of technology elsewhere if he is not recompensed in the
Speaker 3: way he wants to be by Tesla, are he gonna here?
Speaker 5: And he pushed back on his own board.
Speaker 11: Again, well that should be very interesting and the idea
Speaker 11: that you know, Elon Musk course is very unconventional. But
Speaker 11: the idea that he's asking for what amounts to a
Speaker 11: massive pay raise at the same time, you know, essentially
Speaker 11: making a threat or at least a veiled threat, as
Speaker 11: he said, to take his AI expertise elsewhere. It's kind
Speaker 11: of staggering, especially given that for for a couple of
Speaker 11: years now he's been emphasizing that AI is sort of core.
Speaker 6: To Tesla and the Rose multipas exactly.
Speaker 11: The whole bet here, especially for Tesla bulls, is that
Speaker 11: this company is going to operate a robotaxi fleet, will
Speaker 11: eventually build a supercomputer dojo as you say, which I
Speaker 11: believe is and one on your Bingo card if you're
Speaker 11: playing at home, and and so that so it does
Speaker 11: it is a bit of a head scratcher.
Speaker 10: You know.
Speaker 11: On the other hand, he does have some leverage here
Speaker 11: because of course he has these other companies that are
Speaker 11: also doing AI stuff x most notably, and so there
Speaker 11: is in some sense a credible threat to Tesla investors.
Speaker 10: And you know, as we've seen, the Tesla.
Speaker 11: Board has generally gone along with whatever Elon Muskas for.
Speaker 11: So so you know, he'll he'll probably feel emboldened.
Speaker 4: The beauty of this bingo board and card is that
Speaker 4: it means different things to different people. So the basics
Speaker 4: for Wall Street are, will test the reiterate it's fifty
Speaker 4: percent compound annual average growth for twenty two twenty four,
Speaker 4: In other words, will they say they're on track to
Speaker 4: build two point five million evs? But for that, like
Speaker 4: Tesla owner, fan, retail audience, look at the top right square,
Speaker 4: full self driving And what's so interesting in the last
Speaker 4: twenty four hours or.
Speaker 6: So is they brought up version.
Speaker 4: Twelve of FSD beta and there's so much chat about it.
Speaker 4: You know, how do you think that will be distinguished?
Speaker 4: Max between the Tesla fan, that Elon Musk supporter, the
Speaker 4: retail investor, and legacy Wall Street There sometimes just focuses
Speaker 4: on the fundamentals should we call it?
Speaker 10: So, you know, I.
Speaker 11: Would argue that the full self driving promise is very
Speaker 11: important to everybody. Of course, there are, as you say,
Speaker 11: some analysts who are much more focused on these kind
Speaker 11: of the question of margins, And I think, you know, basically,
Speaker 11: how many people want to buy Tesla's and what are
Speaker 11: the margins? Those are the two most pressing questions, but
Speaker 11: how Elon Musk himself is CES self driving? Is is
Speaker 11: it something that's going to happen next year? As you
Speaker 11: always you know, it basically seems like every year he
Speaker 11: says coming next year hasn't come yet. It's been a
Speaker 11: source of continual disappointment and criticism.
Speaker 10: But watching to see if he ever pulls back from
Speaker 10: that promise.
Speaker 6: I think that would have huge effects on not just.
Speaker 11: On demand, not just on like car buyers, but also
Speaker 11: on how investors think about this stock, because again, so
Speaker 11: much of the value is about the future and the
Speaker 11: promise that Elon Musk has been reiterating a year after
Speaker 11: year after year that this is going to be more
Speaker 11: than a car company.
Speaker 3: Wow. Max Chafkin is a beautiful Bingo card, and we
Speaker 3: thank you for being our chief scientist of Bingo cards
Speaker 3: in residents.
Speaker 5: Ed, what have you got coming up on the world
Speaker 5: of Elon?
Speaker 4: Well, look, while I was at CES in Las Vegas
Speaker 4: earlier this month, I had to take the opportunity to
Speaker 4: take a ride in one of the Tesla vehicles that's
Speaker 4: operating in Elon Musk and Boring's Vegas Loop.
Speaker 6: Here's how it went.
Speaker 15: This is the Vegas Loop, a one point seven mile
Speaker 15: series of tunnels under the Las Vegas Convention Center made
Speaker 15: by Elon Musk's Boring Code. During CEES twenty twenty four,
Speaker 15: we took a ride in one of the loops, Tesla
Speaker 15: Model Wise. I jumped in at the Central station, riding
Speaker 15: to West Station and then onto Revera A Station and
Speaker 15: Resorts World before circling back without getting out. It took
Speaker 15: me about fifteen minutes to do that loop. Top speed
Speaker 15: in the straight parts of the tunnel was forty miles
Speaker 15: per hour, with an average of thirty when things got congested,
Speaker 15: fifteen miles an hour. There were no crazy wait times
Speaker 15: with the full fleet of Tesla's deployed. It got busier
Speaker 15: around lunchtime, but lines were minimal. The ride can be
Speaker 15: bumpy at times in certain sections, but if you're going
Speaker 15: to walk from West Hall to North or Central Hall
Speaker 15: that could take you twenty five minutes, it takes just
Speaker 15: two minutes in the loop, and within the LVCC it's free.
Speaker 15: The systems designed to carry more than forty four hundred
Speaker 15: convention goers an hour in the Tesla's. In the future,
Speaker 15: there's a plan for special vehicles that carry twelve people.
Speaker 15: Borings also planning an expansion of sixty eight miles of
Speaker 15: tunnels with ninety three stations across the Vegas Convention Center
Speaker 15: and of course the Las Vegas Strip. By the way,
Speaker 15: if you're claustrophobic, this is not the future travel technology
Speaker 15: for you, Caroline, It's.
Speaker 5: A limitations still ed.
Speaker 3: Meanwhile, coming up, look how creative more creative startups?
Speaker 5: How can they avoid a lower valuation. We'll discuss all
Speaker 5: that next.
Speaker 3: Meanwhile, look, there are more earnings coming thick and fast,
Speaker 3: not just tes.
Speaker 5: The service now IBM after the bell.
Speaker 3: IBM currently trading down to tens percent, but the market
Speaker 3: is looking pretty buoyant, looking in anticipation of cash flow
Speaker 3: coming back on and also any mention of AI service
Speaker 3: now up two point two percent, current remaining performance obligations
Speaker 3: and projected to rise twenty almost twenty one percent. We'll
Speaker 3: see how they managed to perform after bell. This is
Speaker 3: Bloom their technology. Let's just talk about the environment for startups.
Speaker 3: It's been a tough one typically though of course they
Speaker 3: depend on serial infusions of funding from backers to get
Speaker 3: through their early years. So we're so called down round.
Speaker 5: They see raising money at a lower applied valuation there
Speaker 5: before it's a big black eye.
Speaker 3: So lately companies are good and kind of creative to
Speaker 3: try and avoid being considered less valuable. I want to
Speaker 3: bring in Bloomberg's Aema Palmer, who's just written a key
Speaker 3: story on all of this and how inventive and ultimately
Speaker 3: how ignoring of their own investors becoming.
Speaker 9: Yes, so it's become, as you mentioned, a very challenging environment.
Speaker 9: So companies have been a lot more medicine to let
Speaker 9: their own shareholders know what's happening inside their company. And
Speaker 9: so what's that means is those shareholders struggle to value
Speaker 9: and mark these companies in their books, and that has
Speaker 9: a whole trickle up effect to their investors and the
Speaker 9: ones even above them.
Speaker 4: There's an interesting element of your story, which is the
Speaker 4: secondaries market. And it's interesting partly because Caroline and I
Speaker 4: have been really focused on it in recent weeks. But
Speaker 4: think about mechanics of how it works in terms of
Speaker 4: employee liquidity and what you do or don't have to
Speaker 4: share in terms of financials, while also not having to
Speaker 4: offer new equity precisely.
Speaker 9: So the secondary market has gotten very interesting as a
Speaker 9: lot of invest don't have a way to typically get
Speaker 9: out those few IPOs, there's fewer M and A, so
Speaker 9: you're seeing the second day market be the place people
Speaker 9: turn to to get liquidity, and especially employees who are
Speaker 9: common shareholders and maybe looking for some cash on hand.
Speaker 9: But that's becoming more and more challenging because if people
Speaker 9: don't know what's happening at the company, if they don't
Speaker 9: have access to financials, they don't know how to price
Speaker 9: these things. So if a buyer is interested, they don't
Speaker 9: know how they should value this company, how what bid
Speaker 9: they should offer, if it should it be a twenty
Speaker 9: percent discount on eighty percent discount, and they may not
Speaker 9: be able to get through their due diligence. And so
Speaker 9: sellers as well too may not have that insights, especially
Speaker 9: if they're lower in the cap table.
Speaker 4: All right, Bloomberg's Hemma Palmer, thank you now, Speaking of
Speaker 4: startup valuations, his one that just doubled built rewards is
Speaker 4: the app that rewards consumers on their rent. Just raise
Speaker 4: the two hundred million dollars round led by general catalysts
Speaker 4: and push the company's valuation to three point one billion dollars.
Speaker 6: That's a big valuation.
Speaker 4: The new York based startup plans to use some of
Speaker 4: that money to expand its rewards network to include small restaurants,
Speaker 4: grocery stores, dry cleaners, and other local merchants. And by
Speaker 4: the way, is someone that rents and is trying to
Speaker 4: find a house to buy in the Bay area?
Speaker 6: Good luck?
Speaker 4: This is an interesting concept. Let's bring in CEO anchor
Speaker 4: Jane for more. Anchor, welcome to the program. Let's start
Speaker 4: with the round and get that done. You know, big
Speaker 4: chunk of change, big valuation. But why did you do it?
Speaker 4: Why did you need that cash?
Speaker 10: Oh?
Speaker 16: The nice thing about the way we've been raising capital
Speaker 16: and built is we've never actually raised cash in a
Speaker 16: moment where we needed money, right, and so the company
Speaker 16: today is profitable and that's allowed us to be more
Speaker 16: strategic and instead of just going out in a fundraise,
Speaker 16: this was really more about partnerships. So well, we've been
Speaker 16: so lucky to have happened today. Is we brought in
Speaker 16: Ken who was the CEO of American Express for years.
Speaker 16: He built membership rewards and this merchant ecosystem join us.
Speaker 16: And as I think you probably know, after he left
Speaker 16: American Express, he joined General Catalyst, where you know he
Speaker 16: is also their lead investor, and so part.
Speaker 10: Of this round is really about aligning.
Speaker 16: Interest, bringing in Ken as a partner in the business,
Speaker 16: and then a lot of this can be used for
Speaker 16: you know, things like share buybacks. You're talking about secondaries.
Speaker 16: One of the benefits of being a profitable company is
Speaker 16: you can focus on long term while still giving investors
Speaker 16: early liquidity opportunities.
Speaker 3: Is it going to change you having a co branded
Speaker 3: master card If you've now got an Amexa.
Speaker 10: So Built, well, this is the thing, right, so Built business.
Speaker 16: We are the payments and rewards platform for rental apartments
Speaker 16: across the country, so people get rewarded with rent payments
Speaker 16: no matter how they pay check, cash, acch payments, MX,
Speaker 16: Visa MasterCard. I think what's so exciting now though, is
Speaker 16: you're not just getting points on rent, you're also earning
Speaker 16: in your neighborhood. And I think this is one of
Speaker 16: the most excessing there has never been.
Speaker 5: So you're not going to change your own co brander
Speaker 5: most so we have.
Speaker 10: A co brand card.
Speaker 16: I think that's we're really excited about that. But I
Speaker 16: think the platform going from home and rewarding you on
Speaker 16: your biggest expense rent to now building that neighborhood loyalty
Speaker 16: and allowing these local restaurants, grocery stores, coffee shops to say,
Speaker 16: here's how you reach people in your local apartment buildings,
Speaker 16: Here's how you reward them for coming in regularly.
Speaker 10: That can be a game.
Speaker 3: Changer and talking at games. You've also got Roger Goodell
Speaker 3: joining I mean NFL. It's all about building loyalty. Remind
Speaker 3: us how you're getting paid because people are coming onto.
Speaker 5: Your board and giving you money.
Speaker 3: Because you've got a really strong revenue stream here, you
Speaker 3: are taking a cut of each of these purchases.
Speaker 10: So this is yes. The short answer is yes.
Speaker 16: And I think what's so exciting is we didn't have
Speaker 16: to reinvent the business model.
Speaker 10: We had to build the ecosystem.
Speaker 2: Right.
Speaker 16: Loyalty programs exist in airlines and hotels. They make money
Speaker 16: from their merchant partners, when they drive spend, they make
Speaker 16: money from their co brand cards.
Speaker 10: What we've also done in.
Speaker 16: Addition to that is build the biggest payment processor for
Speaker 16: rent payments on top of that, and so you allow
Speaker 16: yourself to be profitable and generate revenue from how people
Speaker 16: spend on rent. When you help drive spend to local merchants.
Speaker 16: When people use your co brand card and that ecosystem
Speaker 16: together is really what makes this unique and differentiated anchor.
Speaker 4: I've got to go back to the rent issue. I mean,
Speaker 4: for so many people, paying rent is painful. Right, you
Speaker 4: kind of get viewed as a futile exercise where there's
Speaker 4: no equity reward. You don't get any of the tax
Speaker 4: benefit of owning a home and paying or deducting the
Speaker 4: mortgage interest.
Speaker 6: It's crazy. But what it's crazy? But what is the
Speaker 6: market for it? Right?
Speaker 4: Is there a clear demographic in the customers that came
Speaker 4: to you and said, yeah, I like this. Is there
Speaker 4: a geographic concentration? You know, the market here in SF
Speaker 4: and New York is well known.
Speaker 10: It's a great question. Renters are all over the country.
Speaker 16: I think what's important to understand is most built members
Speaker 16: are in that twenty one to thirty five old demographic.
Speaker 16: You're at this point in your life where buying a
Speaker 16: home it's not just about affording a home. You're at
Speaker 16: a point in your career where you're moving around. You
Speaker 16: want the flexibility.
Speaker 10: You're living in.
Speaker 16: San Francisco, then you moved to Chicago or Atlanta or
Speaker 16: Dallas or Denver.
Speaker 10: Right.
Speaker 16: The problem, like you said, is that historically you haven't
Speaker 16: gotten anything back for baying rent every month, and so
Speaker 16: with Built you earn those points which you can convert
Speaker 16: into airline miles and hotel points. But as you might
Speaker 16: remember when we came on here a few years ago,
Speaker 16: one of the things we spent eighteen months working with
Speaker 16: Fanny Freddy and fh On is to allow people to
Speaker 16: use points towards a down payment on a home and
Speaker 16: use your rental payment history to build your credit and
Speaker 16: help you qualify for a mortgage. So what's exciting about
Speaker 16: that is you pay your rent at any apartment with
Speaker 16: Build using any credit card, debit card, or bank right.
Speaker 16: And then as you build your points balance, you're also
Speaker 16: building your credit history. So if you decide to then
Speaker 16: buy a home when you're ready, you have a head start.
Speaker 3: I'm interested very briefly on ultimately how you continue to
Speaker 3: expand and is it about talent right now? The money
Speaker 3: you said you raised didn't need to fortunately, but where
Speaker 3: do you put it to work right here right now?
Speaker 16: So I think there's two different parts of this expansion
Speaker 16: that's really exciting. Today we have over fifty percent of
Speaker 16: the top fifty residential owners and operators already in the
Speaker 16: Built Alliance.
Speaker 10: I think now we.
Speaker 16: Have an opportunity to really scale across the long tail
Speaker 16: of the multi family. But we've also now expanded into
Speaker 16: providing rewards on single family homes condos. We just rolled
Speaker 16: out our first set of condos here in New York
Speaker 16: with Douglas Ellman and Mortgage Servicing, so even homeowners can
Speaker 16: start to participate in this rewards platform for paying their
Speaker 16: mortgage and being in their neighborhood.
Speaker 10: So that's one part, and then the.
Speaker 16: Second part, which I think is again it takes time
Speaker 16: and it's you know. This is what American Express and
Speaker 16: Visa and MasterCard have done is bring in all these
Speaker 16: local merchants and say, look can be a plug and
Speaker 16: play neighborhood loyalty platform for you. Here's a way to
Speaker 16: reach people when they move in. I mean, people don't
Speaker 16: realize fifty percent of renters move out every single year.
Speaker 16: So all those new people moving into the neighborhood, we
Speaker 16: make it really easy for you to reach those customers.
Speaker 16: Introduce your local restaurant and give them rewards and benefits.
Speaker 10: As a local.
Speaker 16: The person who's most likely to come in on a
Speaker 16: Monday evening, the person who's likely to come in two
Speaker 16: three times a week. I think that is a powerful
Speaker 16: ecosystem and community we can build.
Speaker 5: Boil Rewards CEO. Than good Jane. Great to have you
Speaker 5: on the show.
Speaker 1: Thank you, thanks for calling.
Speaker 10: Jersey Mike. How can I help you? What time do
Speaker 10: you close today?
Speaker 11: We close today at ten pm?
Speaker 10: Can I help you with anything else?
Speaker 4: Sandwich change Jersey Mike's jumpinions the world of artificial intelligence
Speaker 4: today to company announcing a partnership with SoundHound AI to
Speaker 4: add state of the art voice AI ordering Ceoka Bamajaja
Speaker 4: SoundHound CEO joining us Now this is a big deal.
Speaker 6: How many stores? When?
Speaker 1: How thanks for having me.
Speaker 17: Yeah, we are very excited about the announcements they have
Speaker 17: about Jersey mankels about at over twenty five hundred locations.
Speaker 17: Usually brands like this start with one or two before
Speaker 17: they expand, where we're starting with fifty, which is great,
Speaker 17: and we are starting the year with over ten thousand
Speaker 17: live locations across small puble brands and over one hundred
Speaker 17: thousand locations in our pipeline.
Speaker 3: Kaevon, what is competition like for you now? Given the
Speaker 3: world has suddenly embraced general to AI, so.
Speaker 17: Somehow has three pillars of business. In the first pillar,
Speaker 17: we provide a branded AI assistant to products like cars
Speaker 17: and TVs IoT devices. In the second pillar, we have
Speaker 17: AI customer service for businesses like restaurants and beyond. And
Speaker 17: in the third pillar that's coming in the future, we
Speaker 17: bring them together so while you're driving, you can order
Speaker 17: food by talking to.
Speaker 1: Your car instead of talking to the restaurant.
Speaker 17: Which brings are pill are two customers to our pillar one,
Speaker 17: the users up pillar one customers. So something changed last year.
Speaker 17: General AI and large language models really changed the landscape.
Speaker 17: Sand Hunt is eighteen years old. We've been developing the
Speaker 17: core technology in conversational AI for almost two decades. But
Speaker 17: when large language models change the landscape, it's really accelerated
Speaker 17: our path to adoption and competitors, the big tech players
Speaker 17: have to build their own large language model, so it's right,
Speaker 17: takes them a couple of years, and then the smaller cabon.
Speaker 6: Yeah, we just had ten seconds left.
Speaker 4: This an exclusive deal or your phone in Jack in
Speaker 4: the Box and Wendy's next.
Speaker 17: It's not exclusive. We are in twenty five over twenty
Speaker 17: five brands already and like Wendy's I'm sorry not Wendy's
Speaker 17: White Castle, and that's the one we've announced. And we
Speaker 17: can also power smaller brands like it can be a
Speaker 17: single location sandwich shop and we can.
Speaker 3: Use our ai kavan great having some time with you,
Speaker 3: come back soundhoudaiice o.
Speaker 5: K van Mahoja.
Speaker 3: That does it for this citizen of Bloomleg Technology