WEBVTT - Netflix's Subscriber Growth and Tesla Earnings 0:00:01.280 --> 0:00:05.120 We're from Mahard. We're Innovations, Money and Power Collie in 0:00:05.240 --> 0:00:06.720 Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:25.200 --> 0:00:28.000 I'm Caroline Heid at Bloomberg's world headquarters in New York. 0:00:28.160 --> 0:00:31.920 And I'm Ed Ludlow in San Francisco. This is Bloomberg Technology. 0:00:31.480 --> 0:00:35.520 Back together again, coming up at full earnings coverage. Of course, 0:00:35.640 --> 0:00:39.360 Netflix its sours after posting its biggest subscriber growth since 0:00:39.479 --> 0:00:40.200 the pandemic. 0:00:40.240 --> 0:00:43.280 Details ahead plus sticking with earnings will break down the 0:00:43.320 --> 0:00:46.400 results from Europe's most valuable tech company. And here from 0:00:46.479 --> 0:00:49.160 the ASML CEO himself. 0:00:48.720 --> 0:00:50.640 And we push your head to the results out after 0:00:50.680 --> 0:00:53.199 the bell and partake a bit of a game of bingo, 0:00:53.640 --> 0:00:56.040 but this time you'll have to listen into the Tesla 0:00:56.160 --> 0:00:58.480 earnings call to win all that and. 0:00:58.520 --> 0:00:59.400 So much more ahead. 0:00:59.440 --> 0:01:01.840 Meanwhile, let's check in on these earnings in these markets, 0:01:01.880 --> 0:01:06.160 because look, we are seeing reprieve money pouring into the 0:01:06.240 --> 0:01:08.720 US stock market on the back of technology managing to 0:01:08.880 --> 0:01:10.280 outperform in terms of earnings. 0:01:10.480 --> 0:01:11.959 Yes, we'll dig into Netflix in a moment. 0:01:12.000 --> 0:01:14.040 NASA up more than one point one percent on the 0:01:14.080 --> 0:01:16.760 back of it now interesting, we're all thinking about China 0:01:16.760 --> 0:01:18.800 about whether or not stimulus is indeed to come. They 0:01:18.800 --> 0:01:22.000 signal that they will reduce those rates that are. 0:01:21.880 --> 0:01:22.720 Held by the banks. 0:01:22.920 --> 0:01:25.160 Reserve requirements are going to come down in the next 0:01:25.160 --> 0:01:27.520 couple of weeks. We see the stock market reaction. I'm 0:01:27.600 --> 0:01:30.200 highlighting what's happening on the Nasdak Golden Dragon. At the moment, 0:01:30.200 --> 0:01:32.319 we're up two point six percent for the Chinese stocks. 0:01:32.560 --> 0:01:35.080 Now we're seeing bond market pretty lackluster on the day 0:01:35.240 --> 0:01:36.920 as we see some pretty strong data here in the 0:01:37.000 --> 0:01:38.960 United States. We want to see what's happening in the 0:01:39.000 --> 0:01:41.280 world a bitcoin there, because what a tory ride we've 0:01:41.280 --> 0:01:43.120 had of late. Yes, we seem to have traveled and 0:01:43.200 --> 0:01:45.000 arrived and now sell off. But today we're actually up 0:01:45.040 --> 0:01:46.000 up again two percent. 0:01:46.040 --> 0:01:48.080 We're at fully thousand, holding out that sort of level 0:01:48.080 --> 0:01:48.480 at the moment. 0:01:48.600 --> 0:01:48.640 Ed. 0:01:48.720 --> 0:01:51.080 But let's dig into the micro what's happening on your. 0:01:51.080 --> 0:01:53.920 End, Yeah, a lot going on in single names, specifically 0:01:53.960 --> 0:01:57.040 in the earnings context. Texas Instruments is the biggest maker 0:01:57.040 --> 0:02:00.120 of analog chips. He gave the sales outlook that Frank 0:02:00.280 --> 0:02:04.280 makes us worried that the slump in industrial Semis is continuing. 0:02:04.320 --> 0:02:07.240 These are the most basic chips that do vital functions 0:02:07.240 --> 0:02:10.200 and that stock down two point four percent ASML Europe's 0:02:10.280 --> 0:02:13.760 most valuable tech company. These are the European listed shares. 0:02:14.200 --> 0:02:17.200 Its orders tripled in the cord have just gone the 0:02:17.240 --> 0:02:20.359 shehare reaction obviously positive up nine percent. We will hear 0:02:20.400 --> 0:02:23.200 from the CEO in due course. Tesla after the bell 0:02:23.560 --> 0:02:25.440 up one point four percent, but it's been the biggest 0:02:25.440 --> 0:02:27.680 points drag on the S and P five hundred so 0:02:27.760 --> 0:02:31.200 far in twenty twenty four. The focus how many evs 0:02:31.240 --> 0:02:33.480 are going to build this year and rounding it off 0:02:33.480 --> 0:02:35.320 Microsoft by the way up one percent. I just put 0:02:35.320 --> 0:02:38.720 it there because as it stands, it's just a crossed 0:02:38.800 --> 0:02:42.200 once again the three trillion market cap mark. That's more 0:02:42.240 --> 0:02:45.480 of a public service announcement on that one. Meta has 0:02:45.560 --> 0:02:48.040 hit a key milestone though, and it's a stock that's 0:02:48.080 --> 0:02:51.440 really interesting ahead of earnings. Its gain has taken its 0:02:51.480 --> 0:02:54.799 market cap to one trillion dollars for the first time 0:02:54.800 --> 0:02:58.000 in around two years. We've passed the year of efficiency. 0:02:58.040 --> 0:03:00.520 That's in the rear view mirror. Earning coming up. We 0:03:00.560 --> 0:03:02.760 have a mixed narrative right now about the ad space. 0:03:02.960 --> 0:03:05.040 But finally, this is a stock starting to get some 0:03:05.200 --> 0:03:08.440 credit I think for its AI story. We'll come back 0:03:08.440 --> 0:03:10.200 to that later in the program and later in the 0:03:10.200 --> 0:03:10.800 week as well. 0:03:11.040 --> 0:03:12.960 Meanwhile, we've got to get straight to it and on 0:03:13.000 --> 0:03:15.760 what is dictating trades, certainly in terms of the direction 0:03:15.800 --> 0:03:18.919 of travel from the Netflix move and into the NASDAG 0:03:19.000 --> 0:03:23.280 more broadly, shares popping after those companies' numbers, we really 0:03:23.320 --> 0:03:26.239 did see the biggest jump in new subscribers since the pandemic. 0:03:26.720 --> 0:03:27.960 We've got to dig into the details. 0:03:28.040 --> 0:03:30.919 Geta Raganathan's with us from Lummeg Intelligence, and we were 0:03:30.919 --> 0:03:34.240 blown away by subscriber growth and indeed by seemingly the 0:03:34.360 --> 0:03:36.680 advertising jugnaut really starting to pay off. 0:03:36.720 --> 0:03:37.720 Now is that what's working? 0:03:39.280 --> 0:03:41.920 I mean, everything seems to be working, Caroline. So obviously, yes, 0:03:41.960 --> 0:03:44.440 we did see those huge subscriber numbers, and I think 0:03:44.480 --> 0:03:46.360 what really is kind of giving the street and the 0:03:46.360 --> 0:03:48.920 market so much of confidence in this whole story is 0:03:48.960 --> 0:03:52.320 that you have all of these growth drivers in place. Yes, 0:03:52.520 --> 0:03:55.400 you know they're advertising to your has kind of kicked off. 0:03:55.400 --> 0:03:57.160 It got off to a little bit of a slow start, 0:03:57.360 --> 0:03:59.480 but remember they only have it in about twelve markets, 0:03:59.480 --> 0:04:02.520 so it really has to kind of gain much greater traction, 0:04:02.560 --> 0:04:05.080 and they're going to do exactly that they've invested now 0:04:05.160 --> 0:04:08.680 in this whole raw programming deal. So we should start 0:04:08.960 --> 0:04:11.760 the start to see the advertising tier kind of become 0:04:11.840 --> 0:04:15.480 much more material in revenue starting at least in twenty 0:04:15.560 --> 0:04:18.559 twenty five. But as of right now, it's the Paige sharing, 0:04:18.600 --> 0:04:21.119 it's the password sharing crackdown that is kind of really 0:04:21.160 --> 0:04:23.840 really working and working very well. And it wasn't just 0:04:23.880 --> 0:04:26.000 the four y U results, it's the guidance for twenty 0:04:26.040 --> 0:04:31.239 twenty four that kind of I think blew everybody away. 0:04:29.640 --> 0:04:32.800 All right, Geeterrang and Nathan Bloomberg Intelligence technology analysts, thank 0:04:32.800 --> 0:04:35.280 you so much. Just keep the conversation going with Rich 0:04:35.360 --> 0:04:39.160 Greenfield Partner and media and technology analysts at light Shed 0:04:39.240 --> 0:04:42.400 Partners and Rich. When I went through the numbers more deeply, 0:04:43.000 --> 0:04:46.160 there's the thirteen point one million new subs, but five 0:04:46.200 --> 0:04:49.520 million of those came from the emir region. So it's interesting, 0:04:49.839 --> 0:04:52.880 what do you think are those drivers, those growth drivers 0:04:52.880 --> 0:04:54.159 that Geeta was talking about. 0:04:55.920 --> 0:04:58.040 I mean, you have a few sort of what I 0:04:58.040 --> 0:05:01.000 would call the perfect storm if you think about what's 0:05:01.040 --> 0:05:06.120 happening right now. Ed one Obviously, all of the companies, 0:05:06.160 --> 0:05:09.799 the legacy media companies, whether we're talking Disney or Warner Brothers, 0:05:09.920 --> 0:05:13.760 Discovery or Paramount or comcass like, they're all pulling back 0:05:13.800 --> 0:05:14.800 on their streaming efforts. 0:05:14.839 --> 0:05:15.679 You know, they've all. 0:05:15.520 --> 0:05:19.120 Sort of shifted into let's cut costs, let's raise the price, 0:05:19.200 --> 0:05:22.560 let's cut back on marketing. And so the competitive landscape 0:05:22.560 --> 0:05:25.320 for Netflix is far less intense. 0:05:25.320 --> 0:05:25.920 Than it was. 0:05:25.960 --> 0:05:27.520 You know, I think we had this brief period of 0:05:27.520 --> 0:05:31.080 time during the pandemic where everyone in legacy media, cable 0:05:31.120 --> 0:05:33.960 network media world thought like getting into streaming was easy. 0:05:34.040 --> 0:05:37.120 Now they're realizing it is really hard. The markets are 0:05:37.200 --> 0:05:39.760 no longer paying for subs. They want to see profitability, 0:05:39.800 --> 0:05:43.040 so they're all pulling back. So number one, competition is 0:05:43.120 --> 0:05:46.159 lessening for Netflix. Number two, you know, I think the 0:05:46.240 --> 0:05:51.560 reality is that Netflix investing in lower costs here, you know, 0:05:51.600 --> 0:05:54.960 getting and advertising having a lower cost service is making 0:05:55.000 --> 0:05:58.480 a very big difference. And then I think three, one 0:05:58.560 --> 0:06:00.840 of the amazing things that you're in right now is 0:06:01.320 --> 0:06:03.680 as the legacy media companies pull back on their own 0:06:03.680 --> 0:06:08.400 streaming efforts, they're seeing their legacy businesses cable television really 0:06:08.520 --> 0:06:09.159 under pressure. 0:06:09.279 --> 0:06:10.680 They're licensing more content. 0:06:10.720 --> 0:06:13.560 You know, just last night you saw Warner Brothers Discoveries 0:06:13.640 --> 0:06:16.839 ABO licensing Sex and the City to Netflix, like everything 0:06:16.920 --> 0:06:19.279 is for sale, and so the amount of content flowing 0:06:19.320 --> 0:06:22.800 onto Netflix is exploding. We've really come full circle. It's 0:06:22.839 --> 0:06:25.960 like back to the future day Flix. Remember a five 0:06:26.040 --> 0:06:28.800 years ago everything was on Netflix from third party companies 0:06:29.000 --> 0:06:31.840 and then there was nothing, And now we're really right 0:06:31.880 --> 0:06:32.560 back to it. 0:06:32.960 --> 0:06:33.720 We're back to that. 0:06:33.760 --> 0:06:36.400 You know, the heroin needle is back in the arm, 0:06:36.480 --> 0:06:38.960 like they can't get off of the drug of licensing 0:06:39.000 --> 0:06:42.640 content to Netflix they needed for survival right now. And 0:06:42.720 --> 0:06:45.719 so Netflix is in this position where they've got more 0:06:45.760 --> 0:06:49.760 content than ever before, and the competitive dynamic is less 0:06:49.839 --> 0:06:52.919 than in years, and they've got a cheaper service with 0:06:53.000 --> 0:06:57.320 advertising to offer to consumers. That perfect state is why 0:06:57.360 --> 0:06:59.760 Netflix had their second best net ad quarter in the 0:07:00.000 --> 0:07:00.839 company's history. 0:07:01.000 --> 0:07:04.120 Okay, so rich, what therefore is priced in? Before we 0:07:04.120 --> 0:07:06.520 get into basically what seems to be a bit of 0:07:06.560 --> 0:07:09.000 a blood bath and the rest of the competitive landscape, 0:07:09.240 --> 0:07:11.960 What about the leaderhip position that Deutsche Bank at the 0:07:11.960 --> 0:07:14.880 moment is saying is fully priced into the stock at 0:07:14.920 --> 0:07:15.560 these levels? 0:07:15.680 --> 0:07:15.880 Is it? 0:07:15.920 --> 0:07:17.160 How much further can we run. 0:07:19.160 --> 0:07:20.960 The Internet is generally winner take most. 0:07:21.000 --> 0:07:24.400 I was just listening to one of your colleagues talk about, 0:07:24.560 --> 0:07:27.280 you know, Meta getting back to a trillion dollar market cap. 0:07:27.320 --> 0:07:31.040 You know, we there is I think tremendous room to run. 0:07:31.160 --> 0:07:33.480 You know, Netflix is still you know, you're still looking 0:07:33.480 --> 0:07:35.920 at a company that there's no reason why they can't 0:07:35.920 --> 0:07:38.320 add hundreds of millions of subscribers. I mean the fact 0:07:38.320 --> 0:07:41.000 that they added thirteen million subscribers in a quarter. I 0:07:41.040 --> 0:07:44.680 mean there now it's sept million subscribers in the US. 0:07:45.800 --> 0:07:47.720 You know, I think people not too long ago thought 0:07:47.760 --> 0:07:50.720 the US was tapped out. Now they're growing the US 0:07:50.840 --> 0:07:53.360 nicely again, and I think all signs point to them 0:07:53.360 --> 0:07:55.880 getting to eighty to ninety million subs over time. 0:07:56.440 --> 0:07:59.640 Europe. You mentioned there's huge growth opportunities in Europe. 0:07:59.760 --> 0:08:02.160 So I think the reality is now that they have 0:08:02.240 --> 0:08:04.440 a lower cost product, and you know, they have an 0:08:04.440 --> 0:08:08.080 advertising tier in markets that represent eighty percent of AD 0:08:08.120 --> 0:08:13.120 dollars worldwide, So there's tremendous potential to accelerate growth. I 0:08:13.120 --> 0:08:15.240 don't think the growth story is over at all, and 0:08:15.280 --> 0:08:17.920 I think the most important thing to think about is 0:08:18.120 --> 0:08:22.000 that competitive dynamic eases. That's going to fuel Netflix, and 0:08:22.040 --> 0:08:23.920 the real question should be what happens to all these 0:08:23.960 --> 0:08:26.800 other companies, whether it's Disney or Warner Brothers or Paramount 0:08:27.400 --> 0:08:27.800 well Rich. 0:08:27.840 --> 0:08:29.840 We discussed that twenty four hours ago in the context 0:08:29.880 --> 0:08:32.440 of the WWE deal, right. It answers all of the 0:08:32.480 --> 0:08:35.800 points you've just made in that it's raw in the US, 0:08:35.840 --> 0:08:38.959 but exclusivity and all the other properties outside the US. 0:08:39.400 --> 0:08:40.800 Where's Disney and ESPN? 0:08:40.880 --> 0:08:43.640 I don't see them doing deals like the one which 0:08:43.679 --> 0:08:46.800 surprised us between Netflix and TKO. 0:08:49.320 --> 0:08:53.679 The reality is these companies can't compete, you know, they 0:08:53.800 --> 0:08:54.240 just don't. 0:08:55.440 --> 0:08:58.599 They're trying to balance their. 0:08:58.440 --> 0:09:02.679 Legacy media assets, whether that's cable networks or linear broadcast 0:09:02.679 --> 0:09:04.520 TV networks and TV stations. 0:09:04.920 --> 0:09:07.960 They're all trying to balance and so the result. 0:09:07.640 --> 0:09:11.199 Is is those businesses which are very profitable decline. They 0:09:11.200 --> 0:09:14.880 don't have the same dollars to invest in streaming, and 0:09:14.920 --> 0:09:18.000 so they're all scaling back. And so the real question 0:09:18.040 --> 0:09:19.640 that I think we should be asking, you know, we've 0:09:19.679 --> 0:09:22.160 got all of the major media companies reporting over the 0:09:22.160 --> 0:09:23.599 next couple of weeks, and I'm sure you're going to 0:09:23.679 --> 0:09:26.520 be discussing it, you know, Ed and Caroline the question is, 0:09:27.280 --> 0:09:28.840 why are you still doing streaming? 0:09:28.880 --> 0:09:30.600 Like should you just give up? 0:09:30.679 --> 0:09:35.079 Like is there a path to building a scaled global 0:09:35.120 --> 0:09:39.480 streaming platform that really makes meaningful dollars? Or are you 0:09:39.559 --> 0:09:42.160 kidding yourself? And you're sort of just in that denial phase. 0:09:42.200 --> 0:09:45.319 And I think that's the real sort of you know, 0:09:45.320 --> 0:09:47.400 if you think about what's going on in boardrooms right now. 0:09:47.559 --> 0:09:49.880 You woke up this morning and you're like, holy cow, 0:09:49.960 --> 0:09:54.120 they added thirteen million subs. They're already at this massive scale, 0:09:54.160 --> 0:09:57.880 and they're growing at multiples of how fast we're growing. 0:09:58.400 --> 0:10:01.240 They're investing more, we're cutting back, Like, why are we 0:10:01.440 --> 0:10:04.800 doing this? Should we be in the peacock business? Should 0:10:04.920 --> 0:10:06.160 paramount plus exist? 0:10:06.600 --> 0:10:07.120 We believe? 0:10:07.280 --> 0:10:07.360 Know? 0:10:08.000 --> 0:10:11.720 How soon do these executives figure out what we believe they. 0:10:11.640 --> 0:10:15.320 Should do if we don't hear at this earnings and 0:10:15.360 --> 0:10:17.280 we do still see the fight on when it comes 0:10:17.320 --> 0:10:22.679 to more broadly, the world of streaming is now Netflix 0:10:22.760 --> 0:10:25.880 basically a global TV hasn't already got that rich. 0:10:27.679 --> 0:10:31.559 It feels Carolyn, like you've hit escape velocity. I mean, 0:10:31.559 --> 0:10:34.360 it really feels that way now. 0:10:34.480 --> 0:10:38.199 I will say there's probably a time by pre pandemic, 0:10:38.760 --> 0:10:40.400 I think there was a point in time where people 0:10:40.440 --> 0:10:44.040 felt the same, including myself, about Netflix, and then everyone 0:10:44.120 --> 0:10:46.800 called into question because they saw what was happening during 0:10:46.880 --> 0:10:50.520 the pandemic where everyone you know, Disney Plus exploded and 0:10:51.280 --> 0:10:53.360 Max HBO Maxit when it was called that at the 0:10:53.400 --> 0:10:56.520 time was exploding. I think everyone got very excited that 0:10:56.600 --> 0:11:00.400 this was easy to replicate. I think now you're they're 0:11:00.400 --> 0:11:04.840 all realizing that they are not capable. They don't have 0:11:04.960 --> 0:11:11.480 the resources, technical knowledge, commitment to the business, and so 0:11:11.600 --> 0:11:14.920 I do feel like Netflix is at that escape velocity, 0:11:14.960 --> 0:11:17.880 and I think the only question is how much money 0:11:18.160 --> 0:11:20.960 are these big media companies going to torch on streaming 0:11:21.200 --> 0:11:24.439 before they realize this is just not what they do well. 0:11:24.760 --> 0:11:27.520 They actually just make great content and they should focus 0:11:27.559 --> 0:11:30.280 on harvesting as much cash out of that business and 0:11:30.360 --> 0:11:32.960 not try to be a platform. That's probably where we 0:11:33.160 --> 0:11:35.880 end up by the end of twenty four with several 0:11:35.920 --> 0:11:37.440 of these companies, they're just going to. 0:11:37.480 --> 0:11:38.160 Have to give up. 0:11:38.480 --> 0:11:40.560 Rich Greenfield always great to have some time with you, 0:11:40.679 --> 0:11:42.160 Lightshed partners, me thank you. 0:11:42.679 --> 0:11:45.480 This is not your typical victory speech, but let's not 0:11:45.679 --> 0:11:49.040 have somebody take a victory when she had a very 0:11:49.040 --> 0:11:49.600 bad night. 0:11:49.840 --> 0:11:54.920 This race is far from over. There are dozens of states. 0:11:54.440 --> 0:11:55.160 Left to go. 0:11:56.400 --> 0:11:59.560 Former President Trump and fellow contender Nikki Haley there after 0:11:59.600 --> 0:12:01.960 the result came out, of course from mex Kayley lines 0:12:02.080 --> 0:12:04.800 was all across them in the real time. You now 0:12:04.880 --> 0:12:07.679 coming to us from Manchester, New Hampshire the morning after 0:12:07.800 --> 0:12:10.079 the primary to give us basically the details on the 0:12:10.120 --> 0:12:13.120 vote and also how the internet technology is intertwined into 0:12:13.120 --> 0:12:13.480 all of this. 0:12:15.800 --> 0:12:18.240 Well, Caroline, the details of this vote were Trump won 0:12:18.360 --> 0:12:20.800 by a double digit margin, maybe not the margin we 0:12:20.840 --> 0:12:23.760 expected going into primary day, but by eleven points, so 0:12:23.800 --> 0:12:26.840 not necessarily the strong second place, showing that Nikki Haley 0:12:27.040 --> 0:12:29.520 and her supporters were looking for. Nonetheless, she says she 0:12:29.600 --> 0:12:31.760 is going to stay in this race, go to the 0:12:31.800 --> 0:12:34.280 next real contest that she wants to compete in her 0:12:34.280 --> 0:12:37.199 home state of South Carolina, where she served as governor. 0:12:37.200 --> 0:12:40.080 That primary is on February twenty fourth. The issue is 0:12:40.320 --> 0:12:43.560 she's pulling more than thirty points below Trump in her 0:12:43.559 --> 0:12:45.360 home state, and over the course of the next four 0:12:45.400 --> 0:12:48.200 weeks attacks against her in South Carolina and elsewhere could 0:12:48.200 --> 0:12:52.239 only intensify, as will likely calls from the Republican establishment 0:12:52.280 --> 0:12:54.360 to fall in line behind Trump. As he is at 0:12:54.360 --> 0:12:57.360 this point the presumptive Republican nominee. Of course, this tease 0:12:57.440 --> 0:13:00.520 us up. Given Haley's very difficult rode ahead, very hard 0:13:00.520 --> 0:13:02.240 to see how she is a passed to the nomination 0:13:02.360 --> 0:13:05.160 for a rematch of the twenty twenty election, Donald Trump 0:13:05.400 --> 0:13:08.480 versus incumbent President Joe Biden. Now, the Biden campaign seems 0:13:08.480 --> 0:13:11.560 like it's welcoming this development. They have always wanted to 0:13:11.640 --> 0:13:14.920 have a general election against former President Trump because Biden 0:13:14.960 --> 0:13:17.960 has beaten him once before, obviously in twenty twenty. But 0:13:18.000 --> 0:13:20.600 of course Biden was in some ways not officially on 0:13:20.640 --> 0:13:23.720 the ballot here in New Hampshire as well. The Democratic Party, 0:13:23.760 --> 0:13:26.240 together with the President, have decided that the first primary 0:13:26.320 --> 0:13:29.280 should be in South Carolina, not here in New Hampshire, 0:13:29.320 --> 0:13:30.920 so he was not on the ballot. Instead, there was 0:13:30.960 --> 0:13:33.960 a write in campaign for him here, while other candidates 0:13:34.040 --> 0:13:37.600 like the Democratic Congressman from Minnesota, Dean Phillips, were actually 0:13:37.640 --> 0:13:40.360 on the ballot. Biden won, though in a decisive victory 0:13:40.360 --> 0:13:42.720 really historic for a write in campaign, more than seventy 0:13:42.760 --> 0:13:45.800 percent of the vote, while Dean Phillips got around twenty percent. 0:13:45.840 --> 0:13:48.079 What was interesting, though, guys, and this relates to your 0:13:48.120 --> 0:13:50.840 program here on Bloomberg Technology is right before the primary, 0:13:50.880 --> 0:13:53.959 a wobo call AI generated with the voice of Joe 0:13:54.000 --> 0:13:57.440 Biden was making phone calls to voters here saying to 0:13:57.480 --> 0:14:00.720 hold their vote until November, essentially in coouraging them not 0:14:00.760 --> 0:14:03.360 to go out and write in the name of the president. 0:14:03.400 --> 0:14:05.920 We asked the Congressman Dean Phillips about that a few 0:14:06.000 --> 0:14:08.520 days ago when that news broke. He didn't know anything 0:14:08.559 --> 0:14:10.800 about who was behind the robot call, but he did 0:14:10.840 --> 0:14:13.640 say we need to be thinking really critically about deep 0:14:13.679 --> 0:14:16.040 fakes in this election cycle, and he does not think 0:14:16.080 --> 0:14:19.440 President Biden has done enough at this point to address it, guys. 0:14:19.920 --> 0:14:23.560 And therein lies a key technology story for this election cycle. 0:14:23.600 --> 0:14:26.680 Bloomber's k lines on the ground terrific reporting. Thank you, 0:14:26.760 --> 0:14:30.720 Let's stick with politics and that AI story this election cycle. 0:14:30.760 --> 0:14:34.480 CrowdStrike president Michael Santonus joins us Now to discuss how 0:14:34.840 --> 0:14:37.960 generative AI could affect the upcoming election and how his 0:14:38.040 --> 0:14:41.480 company views election security off the heels of yesterday's New 0:14:41.480 --> 0:14:46.640 Hampshire primary. The deep fake is one example of malicious 0:14:46.720 --> 0:14:50.440 let's call it malicious content that circulates on social media 0:14:51.160 --> 0:14:55.120 in the early forays of this election cycle. What is 0:14:55.160 --> 0:14:58.520 the volume of activity you are seeing in that use 0:14:58.560 --> 0:14:59.280 case than others. 0:15:00.880 --> 0:15:02.520 Yeah, thanks for having me. Look, I think it's going 0:15:02.560 --> 0:15:05.480 to be an interesting year. There's over forty countries that 0:15:05.560 --> 0:15:08.800 are voting this year. The problems that you're talking about 0:15:09.160 --> 0:15:12.200 this morning a growing issue, and I think in a 0:15:12.200 --> 0:15:13.920 lot of ways it's what we're going to see. There's 0:15:13.960 --> 0:15:17.440 been so much talk over the years about voting systems 0:15:17.560 --> 0:15:21.880 and probably too much being put into that area because 0:15:21.880 --> 0:15:24.440 we do have to think about deep fakes, we have 0:15:24.520 --> 0:15:28.200 to think about disinformation campaigns, and ultimately what it's going 0:15:28.240 --> 0:15:30.440 to come down to is the average voter it's going 0:15:30.480 --> 0:15:33.160 to really struggle to understand what's real what's not, and 0:15:33.160 --> 0:15:34.400 they're going to have to do a lot of work 0:15:34.440 --> 0:15:37.000 to make sure that they're not making decisions on who 0:15:37.000 --> 0:15:39.800 to vote for that maybe is based on incorrect information. 0:15:40.640 --> 0:15:43.760 Audio deep feats actually something we saw in Slovakia's parliamentary 0:15:43.760 --> 0:15:47.680 election already. So something that's coming and unfolding. How much 0:15:47.920 --> 0:15:53.200 are well government's most front and center social media companies 0:15:53.400 --> 0:15:55.800 managing to breecee this because it can't all just be 0:15:55.880 --> 0:15:57.880 left in the hands of consumer to try and work 0:15:57.920 --> 0:15:58.640 out real. 0:15:58.440 --> 0:16:01.560 From not well, it can't be left to the consumer. 0:16:01.640 --> 0:16:04.080 But the problem is that it's very easy for a 0:16:04.240 --> 0:16:08.400 consumer to create this content. What was once a very 0:16:08.560 --> 0:16:13.040 technical thing to do is now a few thousand dollars 0:16:13.080 --> 0:16:15.640 and you can go and get a very good capable 0:16:15.680 --> 0:16:18.680 graphics card and the system. You can get some instructions 0:16:18.720 --> 0:16:20.520 and you can build your own deep fate, you can 0:16:20.600 --> 0:16:24.600 build the voiceover, you can build a video. So the 0:16:24.720 --> 0:16:26.680 challenge is we're going to see a lot of this 0:16:26.880 --> 0:16:30.360 content in volumes that we've never seen before created by 0:16:30.400 --> 0:16:33.680 the average person. So it's going to be something that 0:16:33.800 --> 0:16:35.720 everyone's going to have to step up to address. Whether 0:16:35.760 --> 0:16:39.520 it's governments, whether it's a social media sites. It's something 0:16:39.640 --> 0:16:42.400 that should be a concern to everybody because it's going 0:16:42.440 --> 0:16:46.040 to really sway decisions that people are making because it's 0:16:46.160 --> 0:16:48.120 just so easy to create this content today. 0:16:48.960 --> 0:16:50.040 Absolutely fascinating. 0:16:50.080 --> 0:16:52.680 And of course this isn't just the only election that's 0:16:52.720 --> 0:16:55.680 on the books here worldwide, plenty to be cracking down 0:16:55.720 --> 0:16:58.640 on CrowdStrike. President Michael Santonas, we want to thank you 0:16:58.720 --> 0:17:01.160 so much for joining us today. I'm sure we may 0:17:01.160 --> 0:17:03.040 well be returning for your expertise. 0:17:02.640 --> 0:17:03.040 In the future. 0:17:03.080 --> 0:17:05.760 Meanwhile, look, a group of senators from both sides of 0:17:05.800 --> 0:17:08.119 the aisle is ramping up calls for creation of a 0:17:08.160 --> 0:17:11.600 federal agency to regulate the technology industry, as is concern 0:17:11.680 --> 0:17:14.400 surrounding the risks of AI. As we discuss they continue 0:17:14.400 --> 0:17:16.800 to grow now. The group wrote a letter urging Majority 0:17:16.880 --> 0:17:20.600 Leader Chuck Schumer to establish an agency dedicated to regulating 0:17:20.600 --> 0:17:23.160 the nation's largest tech Company's. 0:17:22.720 --> 0:17:26.680 Head right, it's coming up on the program, ASML says, 0:17:26.720 --> 0:17:29.639 it's seeing some pretty positive signs in sales growth. Is 0:17:29.680 --> 0:17:33.720 the chip making equipment industry bottoms out. Bloomberg TV caught 0:17:33.800 --> 0:17:35.439 up with its CEO and we will bring you that 0:17:35.480 --> 0:17:50.600 conversation next. This is Bloomberg Technology. It's time for talking 0:17:50.680 --> 0:17:54.080 tech and first start. Washington State legislators are at the 0:17:54.119 --> 0:17:58.320 center of a growing debate regarding artificial intelligence regulation. House 0:17:58.400 --> 0:18:02.040 filled nineteen fifty one hopes to place restrictions on how 0:18:02.160 --> 0:18:07.679 businesses and government agencies can replace human decision making with AI. However, 0:18:07.720 --> 0:18:11.520 big tech lobbyists argue that the bill is flawed, and 0:18:11.680 --> 0:18:14.960 Apple is hitting the brakes on its plans to bring 0:18:15.040 --> 0:18:18.480 a self driving car to market. Bloomberg's reporting that the 0:18:18.480 --> 0:18:22.119 company is now shifting its focus toward building an electric 0:18:22.280 --> 0:18:25.879 car with more limited features. With the latest changes, the 0:18:25.920 --> 0:18:28.760 company is looking to introduce the car in twenty twenty 0:18:28.800 --> 0:18:32.080 eight at the earliest, down from twenty twenty six plus. 0:18:32.200 --> 0:18:36.360 ASML CEO Peter Wennick tells Bloomberg TV that the generative 0:18:36.400 --> 0:18:40.879 AI boom needs his company's technology to compute and store data. 0:18:40.920 --> 0:18:44.320 The Dutch chip maker benefited from strong demand from China 0:18:44.440 --> 0:18:47.840 last year, shares today at an all time high. 0:18:47.880 --> 0:18:51.560 Carol extraordinary, Sherry Action, extraordinary center numbers. And then you're 0:18:51.600 --> 0:18:54.879 just talking about the SML performance. Where he actually spoke 0:18:54.920 --> 0:18:57.359 with the CEO, Peter Wannick a little bit earlier, he 0:18:57.359 --> 0:19:00.600 sat down with Bloomerg's Tom McKenzie really laid into the 0:19:00.760 --> 0:19:03.240 clarity of China and artificial intelligence. 0:19:03.240 --> 0:19:03.720 Take a listen. 0:19:04.720 --> 0:19:07.119 Ninety of our business in China has to do with 0:19:07.200 --> 0:19:09.960 mature technology, and that's the technology that we need for 0:19:10.000 --> 0:19:11.720 all the major transitions. You know, if you think about 0:19:11.800 --> 0:19:17.919 energy transition, the electrical vehicle transition, digitization, rollout of the 0:19:18.040 --> 0:19:23.480 smart grid, you know, life sciences, it's all mature technology. 0:19:23.520 --> 0:19:24.960 That's where the masses are. 0:19:25.480 --> 0:19:28.160 So what is your message to those in Washington, lawmakers 0:19:28.200 --> 0:19:31.600 in Washington, lawmakers in the Hague even who are pushing 0:19:31.920 --> 0:19:37.480 to expand those restrictions beyond the most cutting edge lithography machines, 0:19:37.520 --> 0:19:41.439 to expand those restrictions on the sale of lithography to China. 0:19:41.880 --> 0:19:45.359 Well, you know, a full respect for national security concerns, 0:19:45.560 --> 0:19:47.600 that's not the point. But I think we need to 0:19:47.840 --> 0:19:51.359