WEBVTT - The AI Race Heats Up and Dell Cuts Jobs 0:00:13.480 --> 0:00:16.439 I met Lovelow in San Francisco. Caroline Hyde is off today. 0:00:16.440 --> 0:00:21.240 This is Bloomberg Technology coming up, Google's response to chat GPT. 0:00:21.440 --> 0:00:25.160 What we know about the conversational AI search engine named Bard, 0:00:25.640 --> 0:00:28.800 plus Dell the latest tech giants to announced layoffs, which 0:00:28.800 --> 0:00:32.400 have now topped sixty seven thousand industry wide already in 0:00:33.720 --> 0:00:36.560 and we dive into the China spy balloon story, which 0:00:36.560 --> 0:00:40.479 puts the spotlight on Beijing's global surveillance. Personal gets all 0:00:40.520 --> 0:00:43.240 of that this hour, but first alphabet pairing of Google 0:00:43.400 --> 0:00:47.159 jars briefly pairing some of their gainer spike after headlines 0:00:47.440 --> 0:00:50.800 that the company is releasing its rival to chat GPT, 0:00:51.320 --> 0:00:54.600 called Bard. That's too early testers. Bloomberg's junior Love joins 0:00:54.680 --> 0:00:57.480 us now with those details, Julia, what do we actually 0:00:57.520 --> 0:01:01.200 know about Bard? Yes? So it is um. We've all 0:01:01.240 --> 0:01:04.000 heard a lot of buzz about chat GPT, the chat 0:01:04.080 --> 0:01:07.000 bob that has taken the Internet by storm, and Bard 0:01:07.120 --> 0:01:09.800 is Google's answer to that product. It's It's It's a 0:01:09.840 --> 0:01:13.600 conversational AI service that users will also be able to 0:01:13.840 --> 0:01:17.479 turn to for simple queries such as planning a birthday party, 0:01:17.480 --> 0:01:20.120 you're buying your gift for a friend Julie is you know. 0:01:20.160 --> 0:01:21.920 I was on the phone last week with Ruth Poor 0:01:21.959 --> 0:01:24.839 at the CFO of Alphabet and I asked her about AI, 0:01:24.880 --> 0:01:27.479 and she was a little bit defensive, saying, actually, we've 0:01:27.520 --> 0:01:30.160 been working on AI for years and years and years. 0:01:30.560 --> 0:01:33.360 My question, why are we only sort of hearing about 0:01:33.360 --> 0:01:35.440 a roll out of it into the real world now? 0:01:35.440 --> 0:01:38.840 Why has it been so slow to react? Yeah, it's 0:01:38.840 --> 0:01:41.640 a fascinating question. You know, Google has been a leader 0:01:41.640 --> 0:01:44.399 in this field. It created many of the tools that 0:01:44.560 --> 0:01:48.600 underpin this technology, but the company has held itself to 0:01:48.720 --> 0:01:52.000 a higher bar in terms of rolling out these products. Um, 0:01:52.640 --> 0:01:57.640 the chat bots sometimes hallucinate, they sometimes deliver information that's incorrect, 0:01:58.040 --> 0:02:01.120 and Doodle has been very fearful about what might happen 0:02:01.240 --> 0:02:05.120 if that happened under the Google brand, And so that's 0:02:05.120 --> 0:02:07.840 why they're taking their time. Yeah, I guess it's it's 0:02:07.880 --> 0:02:10.080 an issue of competitive threat, right. You look at what 0:02:10.160 --> 0:02:14.040 Microsoft's doing with chat, GPT and the underlying tech. You know, 0:02:14.040 --> 0:02:16.360 there's already talk about how it's going to improve being 0:02:16.800 --> 0:02:19.760 the search engine. How much of a threat does Google 0:02:19.880 --> 0:02:25.320 see the other players to its core business? Well, Google 0:02:25.480 --> 0:02:30.400 still lives and dies by advertising, and so if users 0:02:30.480 --> 0:02:35.320 begin to turn to chat, GPT and other services for 0:02:35.360 --> 0:02:38.519 some of their everyday queries instead of with Google Search, 0:02:38.960 --> 0:02:41.959 that could over time to start to eat into Google's 0:02:41.960 --> 0:02:46.520 advertising business. All right, Bloomberg's Julia Love thank you terrific 0:02:46.560 --> 0:02:50.359 reporting this Monday. Now, as we mentioned earlier in the program, 0:02:50.440 --> 0:02:53.680 Dell has become the latest tech company to announce pretty 0:02:53.720 --> 0:02:56.600 significant job cards, to eliminate a little more than sixty 0:02:56.600 --> 0:03:00.520 six d jobs, about five of its global workforce. Splinberg's 0:03:00.520 --> 0:03:03.240 Brady Forward was the first to report that news and 0:03:03.320 --> 0:03:05.280 joins me from the New York studio give us the 0:03:05.320 --> 0:03:10.280 details of these cuts. Yeah, absolutely so. Anybody who's watched 0:03:10.280 --> 0:03:12.280 this show or any other show in the world the 0:03:12.360 --> 0:03:14.760 last couple of months knows that almost every large tech 0:03:14.800 --> 0:03:17.960 company has made cuts, right, so Dell is the most 0:03:17.960 --> 0:03:21.680 recent one. It's kind of about people. That's about five 0:03:21.680 --> 0:03:25.400 percent of the global workforce, significant number. Um And the 0:03:25.440 --> 0:03:29.280 big story here, in addition to investors calling for greater profit, 0:03:29.520 --> 0:03:33.519 is that PC demand has really just fallen. I was 0:03:33.560 --> 0:03:35.400 looking at the I d C data right from the 0:03:35.480 --> 0:03:38.120 last three months of two and there's a pretty sharp 0:03:38.240 --> 0:03:40.680 drop in PC shipments. But I think I'm right in 0:03:40.720 --> 0:03:44.640 saying that third party data was pretty ugly for Dell specifically, 0:03:44.960 --> 0:03:47.040 and and the first party data is pretty ugly too. 0:03:47.040 --> 0:03:49.720 I mean, they've been reporting for a while that, you know, 0:03:49.920 --> 0:03:52.480 PC shipments have gone down. In the pandemic, everybody needed 0:03:52.480 --> 0:03:54.960 a laptop, so everybody went out and bought, and then 0:03:55.000 --> 0:03:58.360 there was a semiconductor shortage, and so companies really bulked 0:03:58.440 --> 0:04:00.720 up their production of computers. And now they're sitting on 0:04:00.760 --> 0:04:04.000 all this inventory they can't sell and demand is really sinking. 0:04:04.040 --> 0:04:07.760 I mean, um, in the letter, you know, co CEOO 0:04:07.960 --> 0:04:10.800 Jeff Clark of Dell had some pretty harsh words about 0:04:10.800 --> 0:04:14.920 the eroding market conditions, about uncertainty and so, um, this 0:04:15.000 --> 0:04:17.040 is more than just a macro story. This is also 0:04:17.040 --> 0:04:21.360 about computers demand really going down. You mentioned that Dell's 0:04:21.440 --> 0:04:25.080 just one name among many who else has done layoffs? 0:04:25.080 --> 0:04:27.200 Where if we started this year in terms of the 0:04:27.240 --> 0:04:30.080 industry cutting bank and what was I guess probably some 0:04:30.120 --> 0:04:32.880 bloat from the pandemic era, right, Yeah, So obviously we 0:04:32.920 --> 0:04:35.160 had the huge ones, right, we had Amazon and Salesforce 0:04:35.240 --> 0:04:38.200 kickoff the year. But we're observing an interesting trend that 0:04:38.400 --> 0:04:41.080 last week a lot of these larger employers aren't as 0:04:41.160 --> 0:04:44.800 much household names. I'm talking about work Days, Splunk, Octa. 0:04:45.279 --> 0:04:47.599 We see them making cuts too. We see almost every 0:04:47.680 --> 0:04:50.359 large cap tech company taking this moment to cut some 0:04:50.400 --> 0:04:52.279 people off. I mean work Day even said hey, we 0:04:52.279 --> 0:04:54.560 don't need to do this. We're still growing headcount, but 0:04:54.600 --> 0:04:56.679 we're kind of going to take this moment to realign 0:04:56.720 --> 0:04:59.600 our priorities. And so you know, I'm really watching. I 0:04:59.839 --> 0:05:02.360 think gold of companies that maybe haven't announced yet are 0:05:02.400 --> 0:05:04.960 going to even if the scale is not what we're 0:05:04.960 --> 0:05:08.960 seeing from you know, Google, Meta companies like that. All right, 0:05:09.000 --> 0:05:11.280 Bloomberg's bready forward. Good job, and thank you very much 0:05:11.279 --> 0:05:13.320 for your reporting. I want to get to a story 0:05:13.320 --> 0:05:16.640 in the debt markets. Chip maker Micron is selling one 0:05:16.640 --> 0:05:20.000 point to five billion dollars in high grade US bonds, 0:05:20.000 --> 0:05:22.480 and notes will be sold in two parts, split across 0:05:22.480 --> 0:05:26.479 an existing tranche of notes due and new bonds the 0:05:26.560 --> 0:05:29.240 mature in ten years. That according to a Bloomberg source, 0:05:29.279 --> 0:05:32.000 the longer portion of the deal expected to yield around 0:05:32.000 --> 0:05:36.240 two five basis points above treasuries. According to that source, 0:05:36.279 --> 0:05:39.640 the sales were increased by fifty million and relaunched Monday, 0:05:39.640 --> 0:05:51.000 which is a pretty strong indicator of demand. It's clear 0:05:51.040 --> 0:05:54.359 that China doesn't want to act with restraint, and the 0:05:54.400 --> 0:05:58.520 Biden administration doesn't have much incentive to try to seek 0:05:58.680 --> 0:06:01.880 China's assurances that they will because there's no trust on 0:06:01.920 --> 0:06:04.600 the two sides. So so it could be used as 0:06:04.640 --> 0:06:07.640 a as a teachable moment, but I think the Biden 0:06:07.640 --> 0:06:11.280 administration really just wants to prevent the relationship from deteriorating 0:06:11.320 --> 0:06:18.560 into outright confrontation or even conflict. That was National University 0:06:18.560 --> 0:06:21.919 of Singapore research fellow Drew Thompson. They're giving his thoughts 0:06:22.320 --> 0:06:25.960 on the alleged or known Chinese surveillance balloon that had 0:06:26.040 --> 0:06:29.719 been flying over the mainland US. This of course now 0:06:29.760 --> 0:06:32.800 amid tensions that are rising between the US and China. 0:06:32.880 --> 0:06:36.000 Let's bring in Bloomberg's Ian Marlowe for d C on 0:06:36.080 --> 0:06:39.640 the latest in that the balloon is no longer with 0:06:39.720 --> 0:06:44.000 us UM But the decision was taken over the weekend 0:06:44.160 --> 0:06:48.640 to take it down. Why when and how did that happen? Yeah? 0:06:48.800 --> 0:06:52.359 US officials have been tracking this balloon for for the 0:06:52.400 --> 0:06:55.520 greater part of a week, and you know, Biden has 0:06:55.560 --> 0:06:58.320 said publicly he wanted to shoot it down as soon 0:06:58.360 --> 0:07:02.679 as he heard about it. His officials, his top general said, look, 0:07:03.200 --> 0:07:06.600 the payload hanging from that balloon is is bigger than 0:07:06.640 --> 0:07:10.720 two buses. It's it's thousands of pounds. If you shoot 0:07:10.760 --> 0:07:13.320 that down over land, you're going to have this massive 0:07:13.400 --> 0:07:17.560 debris field that stretches for miles and a NASA had 0:07:17.600 --> 0:07:19.960 actually done an analysis based on the size of the 0:07:19.960 --> 0:07:23.640 object how big the debris field would be on the ground. 0:07:23.960 --> 0:07:27.600 So even as this diplomatic tussle was was sort of 0:07:27.640 --> 0:07:30.920 going on, because this balloon was was kind of spotted 0:07:30.960 --> 0:07:33.040 on the on the eve of the Secretary of State's 0:07:33.080 --> 0:07:35.200 visit to China, they decided to wait until it was 0:07:35.240 --> 0:07:38.480 about six miles off the coast of South Carolina before 0:07:38.480 --> 0:07:41.160 they finally shot it down with an F twenty two. 0:07:41.800 --> 0:07:44.360 And we update our audience, of course, that the Secretary 0:07:44.360 --> 0:07:47.920 B Lincoln put that trip on pause. Uh, you know, 0:07:48.040 --> 0:07:51.600 after deliberations about the balloon. I guess the question is 0:07:51.600 --> 0:07:54.640 is what what are we going to learn from the payload. 0:07:54.760 --> 0:07:56.640 I think I'm right in saying the US has sent 0:07:56.760 --> 0:08:01.200 divers to recover what that the balloon was carrying. What 0:08:01.240 --> 0:08:04.640 are they expecting to learn? Yes, so they're there, I think, 0:08:04.800 --> 0:08:08.840 um really hoping to get a look, an up close 0:08:08.920 --> 0:08:12.680 look at the sort of sensors, the intelligence gathering equipment 0:08:12.720 --> 0:08:14.960 that is on this balloon. There's obviously been a lot 0:08:15.000 --> 0:08:18.640 of sort of debate out there about, you know, why 0:08:18.680 --> 0:08:20.920 are they using a balloon when they have low orbit 0:08:21.080 --> 0:08:23.520 low orbit satellites that are capable of taking you know, 0:08:23.920 --> 0:08:26.480 high definition imagery and all these other kind of things. 0:08:26.920 --> 0:08:29.960 There's a general sense that the balloons are able to 0:08:30.040 --> 0:08:34.800 sort of linger over sensitive military sites, potentially take higher 0:08:34.840 --> 0:08:40.360 definition shots or video from different angles sort of as 0:08:40.360 --> 0:08:43.480 they float in rome. Uh, you know, over these things 0:08:43.480 --> 0:08:46.960 obviously a much lower you know threshold than in space. 0:08:47.240 --> 0:08:49.280 So I think there's a lot of stuff. They've already 0:08:49.320 --> 0:08:52.080 been tracking the balloon for days, so they've been they've 0:08:52.120 --> 0:08:55.000 been looking to see how it kind of communicates back 0:08:55.240 --> 0:08:57.960 with wherever it's you know, the details are thin, but 0:08:58.000 --> 0:09:00.559 they've they've already gleaned a bunch of in eligence just 0:09:00.679 --> 0:09:02.920 from watching it over the last few days. And now 0:09:02.920 --> 0:09:05.720 they're actually going to get their hands on, you know, 0:09:06.160 --> 0:09:11.160 equipment used to spy on them by their main geopolitical competitors. 0:09:11.160 --> 0:09:13.240 So I think this is uh, you know, well, we'll 0:09:13.240 --> 0:09:15.760 see how much they get. But at the moment, it's 0:09:15.800 --> 0:09:19.120 it's it's looking. I mean, people are hopeful. Ian. You 0:09:19.160 --> 0:09:21.720 have a piece with Jen Jacobs on the Bloomberg which 0:09:21.760 --> 0:09:26.480 looks at what China and Chinese officials knew about this balloon. 0:09:26.880 --> 0:09:29.560 But my question is what has the response from China 0:09:29.640 --> 0:09:33.679 been officially to the balloon's origin and how it ended 0:09:33.840 --> 0:09:37.600 ended up over US space. Yeah, I mean, I think 0:09:37.640 --> 0:09:39.800 this is one of the most interesting parts of the story, 0:09:39.840 --> 0:09:41.960 and I think it's it's just coming out now just 0:09:42.080 --> 0:09:46.160 how confused and chaotic it was on the Chinese side, 0:09:46.200 --> 0:09:51.280 because the Chinese wanted this visit from from Secretary Anthony B. Linkeln. 0:09:51.800 --> 0:09:55.840 They wanted images of she shaking hands with him, everyone 0:09:55.920 --> 0:09:58.520 looking very statesman like the US China relationship on an 0:09:58.520 --> 0:10:01.679 even you know, even keel, everything going well, and then 0:10:01.679 --> 0:10:03.320 all of a sudden, this balloon popped out. So it 0:10:03.320 --> 0:10:07.000 looks like there's sort of you know, interagency communication errors 0:10:07.040 --> 0:10:09.640 here on the Chinese side. It looks like Chinese diplomats 0:10:10.240 --> 0:10:15.800 here in the US were surprised when the communication first started. 0:10:16.760 --> 0:10:20.400 The the Chinese side expressed regrets, you know, which is 0:10:20.440 --> 0:10:23.520 actually quite rare, I think especially when it comes to 0:10:23.640 --> 0:10:26.960 US China kerfuffles. But then as soon as the U 0:10:27.040 --> 0:10:29.760 S shot it down, I think, you know, both both 0:10:29.800 --> 0:10:33.480 the Biden administration and and Chi Jimping and China both 0:10:33.520 --> 0:10:36.760 have their own domestic constituencies. You know, they need to 0:10:37.520 --> 0:10:40.160 look like they're taking a firm stand, and so as 0:10:40.200 --> 0:10:42.000 soon as the U S shot it down, the Chinese 0:10:42.040 --> 0:10:44.280 sort of changed the tune a little bit, said that 0:10:44.320 --> 0:10:47.079 they you know, reserved the right to respond. And that 0:10:47.200 --> 0:10:49.760 was a total overreaction on the U S side. So 0:10:50.280 --> 0:10:52.959 it's going to be interesting because both sides were trying 0:10:53.000 --> 0:10:56.760 to set you know, bilateral ties back into a more 0:10:56.840 --> 0:11:00.360 normalized state, and then this balloon floated then to the 0:11:00.360 --> 0:11:03.360 middle of everything and kind of messed everything up. So 0:11:03.400 --> 0:11:06.120 it's it's kind of gone against the narrative that both 0:11:06.160 --> 0:11:08.400 sides have been talking about for ages. So it's it's 0:11:08.480 --> 0:11:12.160 kind of really embarrassing. It's inflated the news cycle, that's 0:11:12.200 --> 0:11:14.400 for sure. Bloomberg Z and Marla great report, sing, thank 0:11:14.400 --> 0:11:16.280 you very much. I actually want to stick with this conversation, 0:11:16.320 --> 0:11:18.920 particularly what it means now for the U S. China 0:11:18.960 --> 0:11:24.040 relationship with Strategy Risks founder and CEO Isaac Stonefish. Isaac, 0:11:24.120 --> 0:11:27.200 you you spend your whole life looking at China, the 0:11:27.240 --> 0:11:30.960 relationship between China and the United States, doing business in China. 0:11:31.360 --> 0:11:35.000 If you're a US technology executive waking up on Monday morning, 0:11:35.400 --> 0:11:38.440 how do you feel about the China opportunity? Given the 0:11:38.440 --> 0:11:41.680 weekend's events, you feel like you just want to go 0:11:41.760 --> 0:11:44.360 right back to bed. This must be very frustrating for 0:11:44.480 --> 0:11:50.160 folks who have for months, years waited for positive economic 0:11:50.240 --> 0:11:53.600 numbers coming out of China, waited for the opportunity to 0:11:53.840 --> 0:11:57.679 deploy large swaths of capital, and then see the news, 0:11:58.120 --> 0:12:02.320 see the tensions, and understand, both from a Beijing and 0:12:02.400 --> 0:12:06.160 a DC regulatory perspective, this is a bad time to play. 0:12:07.280 --> 0:12:09.880 You know, the context of the week, as we just discussed, 0:12:10.120 --> 0:12:13.560 is Secretary blink in and what would have been an 0:12:13.559 --> 0:12:17.760 opportunity for I don't want to say did ton't, but 0:12:17.800 --> 0:12:20.400 at least an in person meeting of significance that was 0:12:20.440 --> 0:12:23.800 then put on hold. What's more significant to you the 0:12:23.920 --> 0:12:26.040 idea that the balloon was shot down or that that 0:12:26.160 --> 0:12:30.400 meeting is for the time being not taking place. I 0:12:30.440 --> 0:12:33.320 would guess that the U side didn't want to have 0:12:33.360 --> 0:12:35.559 the meeting because they weren't getting what they wanted from 0:12:35.600 --> 0:12:37.480 the Chinese side, which is one of the reasons that 0:12:37.559 --> 0:12:40.160 this came out. I would say the most significant piece 0:12:40.160 --> 0:12:44.160 of this entire story is the spotlight it shines on 0:12:44.720 --> 0:12:48.559 Chinese espionage in the United States as well as globally 0:12:49.120 --> 0:12:52.680 and how okay, we're focusing on this giant balloon, but 0:12:52.720 --> 0:12:56.640 it's raising a lot of questions about Chinese brands like TikTok, 0:12:56.920 --> 0:13:01.800 like Lenovo, like Motorole handsets, and their potentials for espionage gathering. 0:13:02.559 --> 0:13:06.440 Let's talk about TikTok. Then, on Monday, President Biden was 0:13:06.520 --> 0:13:10.960 asked by the press pool about TikTok and whether the 0:13:11.080 --> 0:13:15.280 US will ban TikTok outright. President Biden said that he 0:13:15.800 --> 0:13:18.280 wasn't sure yet, they hadn't made a decision. He also 0:13:18.320 --> 0:13:21.000 added that he of course does not have TikTok on 0:13:21.160 --> 0:13:25.560 his own personal or federally issued cell phone. Where do 0:13:25.640 --> 0:13:29.200 we sit in this process, do you think that that 0:13:29.480 --> 0:13:35.559 the President Biden is basically not getting his cards away? 0:13:35.559 --> 0:13:38.840 And how the US government will handle TikTok in this country. 0:13:39.600 --> 0:13:43.000 There's a legal process and there's a political process. Politically, 0:13:43.160 --> 0:13:47.000 both sides have a very short window to ban TikTok 0:13:47.160 --> 0:13:52.200 before they alienate pens of millions of young American voters. 0:13:52.840 --> 0:13:57.680 We're not at election right now, but we're real, real close, 0:13:58.120 --> 0:14:01.559 and so I think both sides are trying to balance 0:14:01.720 --> 0:14:05.640 their worries about the national security implications of TikTok and 0:14:05.720 --> 0:14:09.280 the worries between losing a lot of people who could 0:14:09.360 --> 0:14:13.040 vote Republican or Democrat. We thank you. Strategy Risks founder 0:14:13.040 --> 0:14:17.400 and CEO Isaac stone Fish. Now coming up, why Apple 0:14:17.520 --> 0:14:20.960 is selling its latest iPhones at discounts of more than 0:14:21.000 --> 0:14:24.840 a hundred dollars in China. That's all next, and as 0:14:24.880 --> 0:14:26.280 we had to break, I want to take a quick 0:14:26.280 --> 0:14:28.760 look at Pinterest and some of the after hours reaction 0:14:28.840 --> 0:14:32.160 in shares down now five pairing some of the decline 0:14:32.400 --> 0:14:35.440 after fourth quarter sales, mised expectations. You can see some 0:14:35.520 --> 0:14:38.680 contagion or read through to Snap who shares also lower 0:14:38.760 --> 0:14:41.520 by one percent in after hours. We continue to track 0:14:41.600 --> 0:14:57.240 those as the calls get underway. This is Bloomberg deals 0:14:57.280 --> 0:15:00.080 and discounts over in China, more than a hundred the 0:15:00.160 --> 0:15:04.200 price carts on Apple's latest iPhones. But why, let's ask 0:15:04.240 --> 0:15:08.480 Bloomberg intelligence. Is Anna Agrana anag you cover this stock 0:15:09.000 --> 0:15:11.760 so closely. I think the point made in the reporting 0:15:12.320 --> 0:15:15.680 is they're offering a discount so soon after launching the 0:15:15.760 --> 0:15:18.080 latest generation of handset. What's your read on it? So 0:15:18.200 --> 0:15:20.520 I think, you know, they do offer this in China 0:15:20.640 --> 0:15:22.960 every once in a while. They I think they really 0:15:22.960 --> 0:15:26.600 want to get jumped start the Chinese market, which has 0:15:26.640 --> 0:15:28.560 so far had been plagued by a number of things 0:15:28.560 --> 0:15:31.760 over the last few months, with you CORVID restrictions and 0:15:31.800 --> 0:15:34.440 then you know opening some of that up and China 0:15:34.520 --> 0:15:38.480 is an important part for it appens, revenues comes from China. 0:15:38.600 --> 0:15:40.600 So I think if they're trying to jump start from 0:15:40.840 --> 0:15:44.840 demanding bad area um last week there on earnings, you know, 0:15:44.880 --> 0:15:47.280 they said that they were looking at improved for traffic 0:15:47.320 --> 0:15:49.960 back in December, so well, you know, maybe it's just 0:15:50.000 --> 0:15:52.840 trying to keep the moment and up at this point. Well, 0:15:52.920 --> 0:15:54.440 I want to jump on that. So Tim Cook on 0:15:54.480 --> 0:15:57.520 the call said two things. One they would have seen 0:15:57.560 --> 0:16:00.720 growth in the first quarter for handsets had it not 0:16:00.800 --> 0:16:03.240 been been for supply chain constraints. And two, as you 0:16:03.320 --> 0:16:06.640 point out that they did see improved demand once China's 0:16:06.680 --> 0:16:09.600 reopening really got underway. Do you take Tim Cook at 0:16:09.640 --> 0:16:11.960 face value on that well, I think so. I mean, 0:16:12.840 --> 0:16:16.080 so you have to remember last year the smartphone shipments 0:16:16.240 --> 0:16:19.320 really wrote bad in China, but Apple didn't do as 0:16:19.320 --> 0:16:21.840 bad as the rest of the vendors. Remember, Apple is 0:16:21.880 --> 0:16:24.160 a very high price strodict. I think it is a 0:16:24.160 --> 0:16:28.920 lot less susceptible to big consumer ships, but nevertheless it 0:16:29.080 --> 0:16:32.960 is susceptible. Now as far as Chinese concerned, we think 0:16:33.000 --> 0:16:36.960 whenever the reopening happens in a big broader way, the 0:16:37.080 --> 0:16:40.040 Chinese were the Chinese you know, consumer will go out 0:16:40.040 --> 0:16:42.600 and buy Apple products at that time. So we think 0:16:42.680 --> 0:16:44.680 if it's not in the first half, we think they 0:16:44.680 --> 0:16:46.360 can happen. Is going to be very strong for Apple. 0:16:47.560 --> 0:16:51.560 Your company outlook on the Bloomberg terminal talks about the 0:16:51.600 --> 0:16:55.520 broader Apple ecosystem as being a good platform for growth. 0:16:55.840 --> 0:16:58.000 What is your outlook for twenty three and beyond and 0:16:58.040 --> 0:17:01.480 what what drives it? Yeah, so as part of the 0:17:01.520 --> 0:17:03.880 product growth is concerned, you know, we are coming to 0:17:03.920 --> 0:17:05.679 a point when Apple is not going to grow in 0:17:05.720 --> 0:17:08.480 double digits. In our view, it has grown twelve percent 0:17:08.560 --> 0:17:10.960 revenue in the last five years. We think that the 0:17:11.080 --> 0:17:13.240 view in our view is over the next three years. 0:17:13.480 --> 0:17:15.640 You know, think about a six to eight percent revenue 0:17:15.640 --> 0:17:18.600 growth rate coupled with that a little bit of margin expansion, 0:17:18.640 --> 0:17:21.240 and then buy backs. I think that's the Apple's financial 0:17:21.240 --> 0:17:23.320 model for the next two years. And I'm not so 0:17:23.400 --> 0:17:26.560 sure how many you know investors out there are ready 0:17:26.600 --> 0:17:29.119 to you know, admit that's the going to be the 0:17:29.160 --> 0:17:32.159 case for Apple. In our last segment and I Rag, 0:17:32.240 --> 0:17:34.840 we were talking about the U. S. China relationship in 0:17:34.880 --> 0:17:39.320 geo politics. You also notes g O place call issues 0:17:39.440 --> 0:17:42.720 is a headwind potentially to Apple going forward. What is 0:17:42.760 --> 0:17:46.720 your concern there? I think the biggest concerning that almost 0:17:46.760 --> 0:17:49.800 you know, most of their products are assembled in China, 0:17:50.240 --> 0:17:53.480 and we have seen some diversification over the last couple 0:17:53.520 --> 0:17:55.280 of years, but I think it's going to take at 0:17:55.359 --> 0:17:59.640 least a decade for us to see any meaningful diversification now. 0:17:59.760 --> 0:18:02.240 Like be for Apple, they have done well to you know, 0:18:02.280 --> 0:18:04.879 skirt this issue all the way back from the tariff 0:18:04.920 --> 0:18:07.760 wars a few years ago with China to the most 0:18:07.800 --> 0:18:11.600 recent you know again you know, the big issues about semiconductor. 0:18:12.200 --> 0:18:14.120 But having said that, I think they are not immune 0:18:14.119 --> 0:18:17.880 to any of these events directly. Hey, anaag really quit, 0:18:18.400 --> 0:18:22.919 are you excited? About Apple's a r VR headset, So 0:18:22.960 --> 0:18:24.680 I think that you know, from our side, I think 0:18:24.720 --> 0:18:26.880 I want to see an application that can be used 0:18:26.920 --> 0:18:29.320 on the phone the headset itself. It's going to be 0:18:29.440 --> 0:18:31.760 very good in terms of publicity and how it can 0:18:31.800 --> 0:18:35.320 showcase the cool stuff Apple can do, but financially it's 0:18:35.359 --> 0:18:37.359 not going to have that big of an impact because 0:18:37.400 --> 0:18:40.359 these things don't move the needle. Given how dependent Apple 0:18:40.480 --> 0:18:42.560 is on the iPhone, I do want to see what 0:18:42.680 --> 0:18:45.040 kind of apps, you know, come for the iPhone for 0:18:45.240 --> 0:18:47.960 more of the augmented reality stuff, because that's where the 0:18:48.000 --> 0:18:51.600 ecosystem is very large. Bin Bag Intelligence is Ana rag 0:18:51.640 --> 0:18:54.280 Bran always get to catch out. Thank you very much, 0:19:03.000 --> 0:19:06.199 Welcome back to Bloomberg Technology. I'm med Lodlow in San Francisco. Now, 0:19:06.200 --> 0:19:07.919 there was a corner of the market where there was 0:19:08.000 --> 0:19:10.920 some green on the screen this Monday, and that's probably 0:19:11.160 --> 0:19:15.520 putting it mildly. AI related stocks continue to see momentum. 0:19:15.640 --> 0:19:17.960 Big Bear has taken all of the headlines up another 0:19:18.000 --> 0:19:21.960 eighteen percent this Monday, rising for a fourth consecutive day. 0:19:22.160 --> 0:19:25.280 BuzzFeed and C three AI buzz Feed more sort of 0:19:25.280 --> 0:19:28.480 tangentially linked, but it's continuing to catch a beard. C 0:19:28.600 --> 0:19:32.119 three AI another AI player that's up in a just 0:19:32.280 --> 0:19:34.720 crazy way year today. In fact, let's change up the 0:19:34.720 --> 0:19:37.240 board and show some of the year to day performance 0:19:37.280 --> 0:19:41.360 of these stocks, because well it's just astonishing. Big Bear 0:19:41.440 --> 0:19:44.840 up more than eight hundred percent so far in three 0:19:45.480 --> 0:19:49.159 C three I AI a more modest one percent plus. 0:19:49.160 --> 0:19:52.879 But investors are trying to find and weed out the 0:19:52.880 --> 0:19:56.840 most promising names that could be a potential rival to 0:19:57.000 --> 0:20:00.880 open ai and chat GPT. Public markets real lee starting 0:20:00.880 --> 0:20:04.919 to put some money into this area, whether speculatively or not. 0:20:05.040 --> 0:20:09.640 Google is getting its own chat GPT competitor ready as well, 0:20:09.680 --> 0:20:12.800 a new conversational AI service called bard. It will be 0:20:12.840 --> 0:20:16.119 opening up to trusted testers and readying the service for 0:20:16.160 --> 0:20:18.600 the public in the coming weeks. And ever since its 0:20:18.640 --> 0:20:23.959 own maturit rise Chat GPTs competition, well, it's coming in fast, 0:20:23.960 --> 0:20:26.760 with companies big and small getting in on the race. 0:20:26.800 --> 0:20:28.639 I want to bring in Bloomberg's Dina Bass, who has 0:20:28.640 --> 0:20:32.600 written about this this Monday. Those competitors big and small. 0:20:32.640 --> 0:20:36.439 It's quite the list you put together, Dinah. Yeah, we 0:20:36.480 --> 0:20:38.359 wanted to take a look at who was competing with 0:20:38.440 --> 0:20:41.440 open Ai, not just with chat GPT, but with open aiyes, 0:20:42.240 --> 0:20:46.160 larger language model systems. And you know the thing about 0:20:46.160 --> 0:20:49.040 open ai because we're talking a lot about generative AI lately, 0:20:49.280 --> 0:20:50.840 but a lot of the startups in this space are 0:20:50.880 --> 0:20:54.760 making applications that are built on other people's foundational models. 0:20:55.040 --> 0:20:57.400 Open ai and some of the competitors we talked about 0:20:57.440 --> 0:21:01.879 today make these, you know, things called foundational models. They're broad, 0:21:01.960 --> 0:21:04.840 general purpose models that can be used in a lot 0:21:04.840 --> 0:21:09.679 of different ways rather than focusing on discrete, specific, narrower uses. 0:21:10.200 --> 0:21:12.720 And open ai itself has made some products you mentioned 0:21:12.800 --> 0:21:15.600 chat GPT that work off of these general models. Dolly 0:21:15.760 --> 0:21:18.760 also works off of its general language model. But there 0:21:18.760 --> 0:21:21.120 are other companies in this space as well. I heard 0:21:21.119 --> 0:21:23.399 you talking about Google. Google was one of the pioneers 0:21:23.400 --> 0:21:26.160 of this, uh this space. There's a number of startups 0:21:26.160 --> 0:21:28.800 and they're attracting more and more attention in terms of 0:21:28.800 --> 0:21:33.240 funding from venture capitalists as well as other techn companies, 0:21:33.440 --> 0:21:35.639 also including Google, and so we looked at some of them. 0:21:35.680 --> 0:21:40.919 They include Anthropic cohere, um Ai, twenty one, Stability AI. 0:21:41.000 --> 0:21:43.440 And if these names sound familiar to your listeners, because 0:21:43.440 --> 0:21:45.359 a number of them have been linked with large funding 0:21:45.359 --> 0:21:48.919 grounds in the last couple of weeks, you broke the 0:21:48.960 --> 0:21:52.040 story what seems like months ago now, but it was 0:21:52.160 --> 0:21:56.920 weeks on this ten billion dollar investment from Microsoft into 0:21:56.920 --> 0:21:59.760 open Ai, and then you know, the companies confirm and 0:22:00.040 --> 0:22:04.520 multibillion dollar investment. But what followed was what seemed like 0:22:04.560 --> 0:22:07.360 a series of quick steps for Microsoft to kind of 0:22:07.960 --> 0:22:11.719 ingest the underlying technology into its own offerings. What are 0:22:11.760 --> 0:22:14.480 some of the highlights of what Microsoft's actually done with 0:22:14.600 --> 0:22:19.080 its investment into open ai so far. So, they already 0:22:19.080 --> 0:22:23.359 have a programming tool called Copilot, which uses an open 0:22:23.400 --> 0:22:27.160 Ai again another subset of GPT, which is meant for programmers. 0:22:27.960 --> 0:22:31.359 Last week, they announced a product that's meant to write 0:22:31.359 --> 0:22:36.800 emails for salespeople using the language generation capabilities of open Ai. 0:22:37.040 --> 0:22:39.120 And they also announced that the top tier of their 0:22:39.240 --> 0:22:42.679 team's chat product, which is the one that competes with Slack, 0:22:43.000 --> 0:22:45.960 that that's also going to start using open Ai technology 0:22:46.000 --> 0:22:49.119 in order to provide meeting notes after the meeting. Now 0:22:49.600 --> 0:22:52.560