Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: We are live from New York. This is Bloomberg Technology
Speaker 2: and Markets. They stumble off. The worst contraction in US
Speaker 2: GDP since twenty twenty two suggests the economy is at
Speaker 2: risk of buckling under the way of President Trump's tariff.
Speaker 2: This haulting a week long recovery inequities. We're down on
Speaker 2: the S and P five hundred, We're down on NASBA
Speaker 2: one point six percent ed. And you're looking at some
Speaker 2: of the individual names that drag us low US.
Speaker 3: Yeah, let's start with super Micro. This is a severe decline.
Speaker 3: Prelim third quarter results show softness. What super Micro is
Speaker 3: saying is that customers are delaying orders. We're showing you
Speaker 3: in video on the screen because the question the market's
Speaker 3: asking itself is how much is super Micro a proxy
Speaker 3: for in Vidia demand?
Speaker 4: Why?
Speaker 3: Super Micro takes in Video's technology and packages it into
Speaker 3: a server, And there's evidence that customers may be holding
Speaker 3: off of obsolete chips waiting for the new stuff or
Speaker 3: we've got a bigger picture demand problem. And video is
Speaker 3: also in the headlines, of course, because it's CEO is
Speaker 3: on Capitol Hill. Bloomberg's Amory Horden just spoke to Invidia
Speaker 3: CEO jensenmong earlier this morning.
Speaker 5: Listen to this.
Speaker 6: In order to produce five hundred billion dollars worth of
Speaker 6: AI infrastructure requires enormous amounts of investment from a lot
Speaker 6: of different partners, and so we've brought on shore many
Speaker 6: partners to help us do that, and we're going to
Speaker 6: have to build our own factories.
Speaker 4: In order to do that.
Speaker 7: What's your message and conversation can be like today with
Speaker 7: the President when.
Speaker 8: It comes to tariffs.
Speaker 6: Or our football I'm going to count on the fact
Speaker 6: that the administration that has a good plan and from
Speaker 6: our perspective, we would like to have policies that support
Speaker 6: and help accelerate the development of artificial intelligence in this
Speaker 6: new industry.
Speaker 7: Do you think they're going to have an edit of
Speaker 7: the diffusion rule that was under the bienn administration, basically
Speaker 7: placing all these different countries in different buckets.
Speaker 6: Well, I'm not sure what the new diffusion rule is
Speaker 6: going to be, but whatever happens to be it becomes
Speaker 6: it really has to recognize that the world has changed
Speaker 6: fundamentally since the previous diffusion rule was released. We need
Speaker 6: to accelerate the diffusion of American AI technology around the world,
Speaker 6: and so the policies and the encouragement from the administration
Speaker 6: really needs to be behind that.
Speaker 2: In Vidia CEO Chasin Hwang, they're along with our own
Speaker 2: ann Marie Horden. Look, let's stick with the AI sector.
Speaker 2: Go back to super micro sinking. As we heard from
Speaker 2: ED after pre announcing results that fell well short of
Speaker 2: balanced estimates, and as a server maker said, some customers
Speaker 2: are delaying their purchasing. Intelligence analyst Wu Jinhoe joins us
Speaker 2: now and.
Speaker 8: Look amsts to interview.
Speaker 2: This is pretty specific to the new and Video Blackwell
Speaker 2: chip transition, right.
Speaker 9: Yeah, hey Caroline, so it seems to be specific to
Speaker 9: the Nvidio black Well. I will tell you that customers
Speaker 9: are waiting for the leaders generationships. We saw this not
Speaker 9: only a super Micro, but we also saw with HPE
Speaker 9: when they missed their expectations last quarter. So you know,
Speaker 9: customers are essentially delaying these these these deals and just
Speaker 9: moving on to the black loss.
Speaker 3: I think we're Jim, what we heard from the interview
Speaker 3: of Jensen Hangji. Just then, is long term goals right
Speaker 3: for the manufacturing of accelerated computing in this country in
Speaker 3: the short term, help our audience understand in video's commitment
Speaker 3: to a new generation of chip every year and annual cadence,
Speaker 3: and how difficult that is for the server assemblers like
Speaker 3: super Micro, who have to be the go to market
Speaker 3: channel for that company.
Speaker 9: Yeah, and then that's that's a good question, and it
Speaker 9: is actually somewhat problematic to some of the server manufacturers.
Speaker 9: I will tell you a couple of things. The server
Speaker 9: manufacturers do have a couple of years of lead time
Speaker 9: in terms of the product roadmaps, so there is some
Speaker 9: preparation in terms of preparing for those chips. Now, now
Speaker 9: the issue is the customers may not have that level
Speaker 9: of visibility in terms of assembling all of these together,
Speaker 9: because every generation of chips add on to a new
Speaker 9: level of complexity. If we think about the H one
Speaker 9: hundred series, the Hoppa series, you didn't have to have
Speaker 9: as much cooling unecessary. Now as we move into Blackwell,
Speaker 9: you're going to have to have a cooling to support
Speaker 9: one hundred and forty killer watts per RAQ and if
Speaker 9: once we get into the next generation of chips, we're
Speaker 9: talking about six hundred kilowats paract. So it's more of
Speaker 9: an infrastructure problem, but also not only an infrastructre problem,
Speaker 9: but also an architecture problem that the customers need to
Speaker 9: deal with.
Speaker 3: The last time I spake to Jensen last month, he said,
Speaker 3: I'm the only CEO on the planet that will tell
Speaker 3: you what I'm doing for the next five years, and
Speaker 3: all my suppliers upstream downstream can follow suit. I think
Speaker 3: that's your point. Bloomberg Intelligence analyst Wu Jinho. Great to
Speaker 3: have you on the program. Turning to more earnings, Microsoft
Speaker 3: reports results after the bell, and investors are expected to
Speaker 3: pay close attention to the company's data center spending.
Speaker 5: For more.
Speaker 3: We're joined by Rebecca wednerman CEO and principle of Valuaye.
Speaker 3: That's the link right that Jensen Vwang Vinvidia says, here's
Speaker 3: my technology for the next five years. In the short term,
Speaker 3: we look at the capital expenditures of the hyperscalers and
Speaker 3: see if they're willing to plan to spend on that
Speaker 3: technology in advance.
Speaker 10: Rebecca absolutely ed great to be here, Thanks for having me.
Speaker 10: We have to look at what they're willing to spend,
Speaker 10: but also look at what customers are willing to spend
Speaker 10: to drive that AI demand so they can actually generate
Speaker 10: revenues from it.
Speaker 2: And when they're thinking about spending, we had a commitment
Speaker 2: from Alphabet sticking to its seventy five billion. Microsoft has
Speaker 2: been there saying we're spending more than eighty billion, but
Speaker 2: there have been so many courts Rebecca that they might
Speaker 2: be ending leases. We've had TD Cowen and others. What
Speaker 2: if you listened to what's noise what's reality?
Speaker 10: Well, I think Carol, and we have to look at
Speaker 10: the profit and margin picture.
Speaker 6: Right.
Speaker 10: If customers aren't willing to spend on consumption for AI
Speaker 10: demand is not maybe what Microsoft expected it would be,
Speaker 10: they're building out capacity in a way that's not supported
Speaker 10: by revenues. And at the same time, if we look
Speaker 10: at terrorf uncertainty, you know, there's a lot of things
Speaker 10: that go into building out data centers that are expensive
Speaker 10: beyond just in video chips and those kind of things
Speaker 10: have got to be considerations as well as we think
Speaker 10: about the overall data center class structure.
Speaker 2: I'm really interested in that. So we're expecting what eleven
Speaker 2: percent growth in revenue for Microsoft for this fiscal quart
Speaker 2: to Rebecca, but where are you seeing the weakness and
Speaker 2: ultimate demand for their AI products? Where are we likely
Speaker 2: to see that they're spending a lot but people aren't
Speaker 2: buying a lot when it comes to the Copilot offering,
Speaker 2: and that's being offered to the enterprise.
Speaker 8: Yeah, I know.
Speaker 10: I think if you loot copilot. There have been a
Speaker 10: lot of challenges with adoption and really a lot of
Speaker 10: challenges with Microsoft being able to prove the value of
Speaker 10: what they deliver with Copilot. You know, I think they
Speaker 10: did themselves a disservice putting copilots out there in the
Speaker 10: beginning that weren't necessarily ready for prime time. Customers tried
Speaker 10: them once, didn't get the results they expected, and they're
Speaker 10: hesitant to go back. So now, without that broader picture
Speaker 10: of enterprise data grounding Copilot, Microsoft's struggling with their own
Speaker 10: AI to get it out there and get customers paying
Speaker 10: for it.
Speaker 3: I find this fascinating. Like Caroline, I think we share
Speaker 3: this in common.
Speaker 5: Right.
Speaker 3: I grew up using Microsoft software. It's what was available
Speaker 3: on my Dell desktop at home, and as I've got older,
Speaker 3: I have options I'm now a Mac user and I
Speaker 3: use OS. And the thing that I'm always reminded of
Speaker 3: is that Microsoft has spent many years selling software you
Speaker 3: can otherwise get for free somewhere else. So we're focused
Speaker 3: on their capital expenditures, but I still don't see the
Speaker 3: other side of it. The idea that you can look
Speaker 3: at Copilot and say, I'm going to pay at the
Speaker 3: enterprise level was just me personally for that and get
Speaker 3: good value? Is that kind of what you're saying here, Rebecca, Yeah, I.
Speaker 10: Think we're seeing customers say, when I can go out
Speaker 10: to chat GPT on my own, right, why am I
Speaker 10: paying Microsoft for that capability? If it's not grounded in
Speaker 10: enterprise data? And if you in contrast at some of
Speaker 10: Microsoft's competitors in the enterprise software space, you've got your Oracles,
Speaker 10: your Service, and now your salesforces where they're saying it's
Speaker 10: not just what's on your desktop that's important for Copilot
Speaker 10: or for any sort of AI agent, but what's in
Speaker 10: those enterprise data sources you're helping to create more context,
Speaker 10: to give better answers, to give better recommendations, to really
Speaker 10: have more intelligent AI.
Speaker 3: What we're forgetting about is that Azure is the number
Speaker 3: two player in cloud. And so if everyone is out
Speaker 3: there spending on AI through the application layer like Salesforce,
Speaker 3: all those names, doesn't Microsoft just win anyway?
Speaker 10: Well? Absolutely, I mean Microsoft wins when it's competitor's AI win. Right.
Speaker 10: If you look at the folks that are running on
Speaker 10: Azure today, whether it's Service Now or Genesis day Force,
Speaker 10: tons of folks are those spending that their customers are
Speaker 10: spending on their AI or driving up Azure credits.
Speaker 2: Where is therefore the weakness that we might see in
Speaker 2: this particular quarter and the guidance going forward, the small
Speaker 2: exposure to hardware.
Speaker 11: We think about the gaming side, but.
Speaker 2: Ultimately tariffs, is it going to be an economic a
Speaker 2: macroeconomic impact that we want to hear from Satya that
Speaker 2: we want to hear from Amy as well. When we
Speaker 2: think about the CFO perspective, I think.
Speaker 10: The macropipiece is going to be really big Caroline, because
Speaker 10: as we think about overall slowing of enterprise purchases that's
Speaker 10: already happening right, The question is how long is it
Speaker 10: going to last? And how much can the innovation that
Speaker 10: Microsoft is driving in AI in areas help it to
Speaker 10: catch up in terms of sort of capturing the imagination
Speaker 10: of customers. And when we're all risk averse and hesitant
Speaker 10: about making decisions, it's tough to spark that imagination.
Speaker 3: Spin that forward with Amazon, right you know, it's it's
Speaker 3: fast and furious. For forty eight hours, AWS is the
Speaker 3: number one player in cloud computing. All of the logic
Speaker 3: you've just outlined. What do you expect to be your
Speaker 3: conclusion by Friday morning.
Speaker 5: Of this week? Sorry, you know my cool question, but
Speaker 5: have a go.
Speaker 10: Well, you know, if I had the perfect answer, I
Speaker 10: wouldn't be on the show, and I'd be somewhere else
Speaker 10: on a boat, But you'd always be on this show.
Speaker 2: You'd always be coming back on giving us your expertise,
Speaker 2: no matter how many billions you have on that boat.
Speaker 10: That's right, you know, I think we're going to see
Speaker 10: in general, slowly growth. Amazon has some different pieces towards
Speaker 10: growthfolio that are very compelling for customers that are looking
Speaker 10: at cost cutting measures, that are looking at streamlining and rationalization.
Speaker 10: Right now, Amazon has a lot to offer in that area.
Speaker 10: You know, we see Microsoft Azure. I think we'll still
Speaker 10: see pretty strong growth there, but it's going to slow
Speaker 10: over the next couple of quarters. And I think what
Speaker 10: we'll see this week is sort of the beginning of
Speaker 10: that sign of if you don't have a compelling cost
Speaker 10: cunning rationalization proposition, like we saw, for example, from Service
Speaker 10: Now last week, you're going to struggle. It's as one
Speaker 10: of the big players.
Speaker 2: Rebecca's great to have you on, even if you're not
Speaker 2: on a boat. Rebecca Wetterman, see principal at Valoir. We
Speaker 2: appreciate it. Now coming up Snap, it wants the headwinds
Speaker 2: impacting its AD business more on the details next. We're
Speaker 2: down by fifteen percent. This is Bloomberg Technology.
Speaker 11: Look Snap's numbers.
Speaker 2: They actually narrowly beat expectations from analysts for the first
Speaker 2: quarter in terms of revenue, but they declined to issue
Speaker 2: a sales forecast for the current period and they say
Speaker 2: they're navigating macroeconomic headwinds.
Speaker 11: It's all about the ad business.
Speaker 2: We're seeing the worst drop since August twenty twenty four
Speaker 2: on the stock Emarketers. Senior analyst Minne Smiley is with
Speaker 2: us for more. And it looks like Chinese retailers, for example,
Speaker 2: are already holding back spending on Snap haats.
Speaker 12: Yes, exactly, there are already holding back spend, and I
Speaker 12: think in their earnings call they did say that that's
Speaker 12: partly why they're you know, delaying issuing any guidance.
Speaker 8: They are worried about that.
Speaker 12: And I think just overall, the issue with Snap is
Speaker 12: it it's one of those businesses where when we start
Speaker 12: to see these advertiser pullbacks, you know, pullbacks and spend
Speaker 12: pauses and spend, platforms like Snap end up taking a
Speaker 12: hit first.
Speaker 8: You know, advertisers want to put their.
Speaker 12: Money into Meta, into TikTok, into Google, into platforms that
Speaker 12: are just more you know, bigger, more proven, and so
Speaker 12: I think we're already seeing Snap feel the impact.
Speaker 8: But you know, pretty early on.
Speaker 3: It's why it's in our calendar, right because apart from Google,
Speaker 3: we always talk about how well Snap goes first and
Speaker 3: then we extrapolate out to Meta in its platforms. I
Speaker 3: haven't used Snap since high school, frankly, but Caro's intro
Speaker 3: summed it up perfectly, like, you don't give guidance, that's
Speaker 3: a market thing. The platform is growing, Yes, what can
Speaker 3: you tell us about your reaction to that and where
Speaker 3: you see it doing well against those other platforms?
Speaker 8: Yeah, for sure.
Speaker 12: I mean, all in all Snap had a good quarter.
Speaker 12: I mean all of its major metrics. You know, it
Speaker 12: saw user growth, it saw ad revenue and growth. It's
Speaker 12: our revenue growth, which really speaks to the fact that
Speaker 12: it has done a good job of investing in its
Speaker 12: ad platform over the past few years. Its subscription business
Speaker 12: remains small, but it's becoming a meaningful portion of revenue
Speaker 12: for the company. So yes, they are seeing growth, but
Speaker 12: I think we're now seeing that growth maybe kind of
Speaker 12: have within a silo in Q one. I think for
Speaker 12: the remainder of the year, things might get shaky for
Speaker 12: them as they kind of balance, you know, all the
Speaker 12: economic uncertainly we're facing. But you know, the actual core
Speaker 12: business does show some some pretty healthy signs.
Speaker 3: We've been asking our investor in markets guests for about
Speaker 3: a week what happens if a technology company doesn't issue guidance,
Speaker 3: your stock goes down fifteen percent. You know what I'd
Speaker 3: love to help our audience understand is tariffs, trade, uncertainty,
Speaker 3: advertising market.
Speaker 5: Why did the advertisers care?
Speaker 8: Yeah?
Speaker 12: I mean, I think for for a lot of people,
Speaker 12: when they see advertisers spend becoming, you know, starting to
Speaker 12: pull back, it's a sign of bigger bigger concerns, bigger
Speaker 12: issues to come because a lot of marketers, you know,
Speaker 12: for a lot of these companies, one of the first
Speaker 12: things they're going to pull back is marketing when they
Speaker 12: start to see signs of a shaky economy, periods of instability,
Speaker 12: and especially you know when we talk about tariffs, companies
Speaker 12: that might be hit harder by tariffs, you know, maybe
Speaker 12: they have manufacturing in China or whatnot. You know, those companies, retailers,
Speaker 12: you know that maybe rely heavily on other countries.
Speaker 8: They're they're going to have an impact.
Speaker 12: And AD spend always does to kind of take one
Speaker 12: of the first hits when you look across the whole company.
Speaker 8: And so so yeah, these platforms.
Speaker 12: AD revenues are bread and butter, and we talk about
Speaker 12: Snap specifically. They're lucky in that they're you know, because
Speaker 12: they have their subscription subscription business, they are able to
Speaker 12: diversify a little bit. But again, I think it all
Speaker 12: the represents about ten percent of their business right now,
Speaker 12: so of course they're very concerned about AD revenue.
Speaker 2: What blows my mind is that Snap has almost a
Speaker 2: billion users, right but they have a first quarter net
Speaker 2: loss of one hundred.
Speaker 11: And forty million dollars. Just where is the money going?
Speaker 2: What leavers do they have to pull to be a
Speaker 2: long term competitor that actually is profitable.
Speaker 12: Yes, I mean they definitely are running into some issues
Speaker 12: when specifically when you talk about user growth, they are
Speaker 12: seeing user growth here every year, but when you look
Speaker 12: at their key markets, when you look at North America,
Speaker 12: they actually posted declines. I think it went from one
Speaker 12: hundred million two to ninety nine. So they are seeing
Speaker 12: some concerns there around you know this, you know the
Speaker 12: market of the North America, that is their most profitable market,
Speaker 12: but it's saturated.
Speaker 8: They're really struggling to grow there.
Speaker 12: And these and these markets where they are seeing user growth,
Speaker 12: those are the markets where they're not monetizing as well.
Speaker 8: So they definitely have, Like I said.
Speaker 12: They had a good quarter, but they have some big
Speaker 12: long term challenges ahead of them.
Speaker 3: Let's say that there's still a question mark about TikTok
Speaker 3: in the United States, does Snaps stand to benefit from
Speaker 3: that whatever happens with that platform they have that they.
Speaker 8: Do stand the benefit and they have benefited already.
Speaker 12: I mean, I think the uncertainty around TikTok, of course,
Speaker 12: it's its future.
Speaker 8: Is still in flux. But I think just this general.
Speaker 12: Uncertainty that's been happening over the past few years has
Speaker 12: benefited all these other platforms. That being said, I don't
Speaker 12: think Snap will be one of the main beneficiaries we're
Speaker 12: going to see. So that money go to YouTube, you know,
Speaker 12: go to YouTube shorts, go to Instagram, Instagram reels, even Facebook.
Speaker 12: I think Snap, yes, they will benefit, but not so
Speaker 12: much that it'll really kind of, you know, save their
Speaker 12: entire business by any means.
Speaker 5: Okay, what are you watching for with Meta? What do
Speaker 5: we need to know? Oh?
Speaker 8: Wow?
Speaker 12: I mean in some ways, Meta is actually a similar
Speaker 12: story to Snap in some ways in that you know,
Speaker 12: I think we're expecting a good quarter. They're going to
Speaker 12: post advertising growth. You know, they're going to kind of
Speaker 12: buy all their major metrics. We're going to see growth.
Speaker 12: But between the anti trust try all their facing here
Speaker 12: in the US, between tear ups, and especially for Meta,
Speaker 12: I mean, they will be impacted by Chinese retailers like
Speaker 12: She and Timu pulling back on D spend.
Speaker 8: That's going to hit them pretty hard, we expect.
Speaker 12: And so yeah, they they're probably going to post a
Speaker 12: good quarter, But I think there's going to be some
Speaker 12: some issues people will be paying attention to for sure
Speaker 12: in the quarters to come.
Speaker 3: EMOCS the senior analyst mind the Smiley Greats having on
Speaker 3: the show, Thank you righte Hailing and food delivery company
Speaker 3: GRAB Holdings raised it's all year earnings forecast, boosting sentiment
Speaker 3: that the sector could be more resilient amid global trade
Speaker 3: wars for more delighted to say, we're joined by Peter
Speaker 3: Owey Grab CFO.
Speaker 5: I'm here in the United States.
Speaker 3: Grab is Southeast Asia and everyone that I talked to
Speaker 3: talks about your scale across those different nations and your
Speaker 3: use of AI, particularly to manage operating costs. That's the
Speaker 3: boring stuff, Peter. What is it you're able to do
Speaker 3: in those markets and those Southeast Asian companies at scale
Speaker 3: that's helping you perform like this?
Speaker 13: Yeah, we had a very strong Q one results, record revenues,
Speaker 13: a record number of transacting users on our platform, and
Speaker 13: also a growing profitability in our business today. And what's
Speaker 13: unique about our business is that the scale that we
Speaker 13: built is around adoptability of our products and it's a
Speaker 13: super app. So what does that mean? We have multiple
Speaker 13: products that's on one single app it cell, whether it's
Speaker 13: all forms of deliveries, whether it's food delivery, whether it's
Speaker 13: grocery delivery. You've got transport two wheels, three wheels, four wheels,
Speaker 13: and that's our taxi services also on our platform.
Speaker 4: And we also have fintech also.
Speaker 13: Where there is low appurance payments business also, and it's
Speaker 13: unique in Southeast Asia where all these products are interrelated
Speaker 13: and they're all working through one ecosystem. We're seeing more
Speaker 13: traction before on our platform than ever before. Part of
Speaker 13: product is around affordability, and we continue to push that
Speaker 13: affordability as we expand the user base.
Speaker 11: Okay, so let's talk about affordability.
Speaker 2: Is that coming through the new products, because actually you're
Speaker 2: trying to increase spending from your users. You're doing well,
Speaker 2: whether you're doing family accounts, whether you're offering.
Speaker 11: People to pull some of their deliveries for example. Peter,
Speaker 11: that's right.
Speaker 13: Yes, we're actually adding more products, but those products are
Speaker 13: also catering for segments of users on our platform there
Speaker 13: might be a little bit more pro sensitive. That's why
Speaker 13: we have about a third of our transactions today are
Speaker 13: coming from these more affordable suite of products. In transport
Speaker 13: or own deliveries, or we also have the more the
Speaker 13: premium side also, which are really important for those who
Speaker 13: are less price sensitive, who are less more they wanted
Speaker 13: a food much quicker, for an example, and that's also
Speaker 13: so it's a combination of this product mix that's really
Speaker 13: important and we need to give customers choice and that's
Speaker 13: what we've been doing more and more over the last
Speaker 13: two years in our business.
Speaker 3: It's even so we have a trade war, what are
Speaker 3: the indirect economic impacts of tariffs on those Southeast Asian markets?
Speaker 3: And on the financing side loans, what are you doing
Speaker 3: to insulate yourself.
Speaker 13: Yeah, we've built a business where we feel and we
Speaker 13: believe that it's counter sickly goal. What does that mean
Speaker 13: If you look at the type of service that we
Speaker 13: do today, people still need to eat, and we have
Speaker 13: also an ability where we can bring cook food home
Speaker 13: or we can also get grocery into their homes. So
Speaker 13: at the same time at an affordable price, people still
Speaker 13: need to go to work, they still need to commute
Speaker 13: from point at a point B, and we're making services
Speaker 13: more affordable also at the same time. So we feel
Speaker 13: that whether it's an economic downturn or whether the economy
Speaker 13: is doing well. The services that we have today are
Speaker 13: relevant for these consumers and also with fintech. Also, payments
Speaker 13: also is still very prevalent, whether it is in any
Speaker 13: economic cycles. People need still need to pay for things,
Speaker 13: whether to pay their bills. So it's an important part
Speaker 13: of this ecosystem that we continue to harness.
Speaker 2: Peter and mentioned that potential protection of yourself via taking
Speaker 2: out loans. Now you were taking out alone, we understand
Speaker 2: to the tune of about two billion to help finance potential
Speaker 2: deal go to How is that M and A going
Speaker 2: in this current environment.
Speaker 13: Well, can't command caroline on the speculation of those M
Speaker 13: and A. What we are focusing where especially Indonesia where
Speaker 13: it's a very important market for US. It's about three
Speaker 13: hundred million people and it's a very critical market. What
Speaker 13: we are seeing in Indonesia is a continuing growth. Actually,
Speaker 13: if we look at the number of users quorter on quarter,
Speaker 13: we continue to expand that business margin also is expanding,
Speaker 13: so we can do it on Indonesia. Then we are
Speaker 13: making selective m and as in the first quarter we
Speaker 13: made a number of small M and a's which are
Speaker 13: more around ecosystem and that's really important also as again
Speaker 13: as we bring more products and services, more capabilities to
Speaker 13: our user base.
Speaker 2: Its briefly the cost control you've got, how much is
Speaker 2: that because of AI?
Speaker 13: I would say it's very hard to measure with its
Speaker 13: pinpoint is specifically to AI. What we are measuring is
Speaker 13: more the productivity output that we can harness from using
Speaker 13: AI internally. Here a grab for an example, behalf of
Speaker 13: our engineers today are using some sort of AI assists
Speaker 13: for them to be able to do their work more efficiently.
Speaker 13: I would say that one measurement also is the number
Speaker 13: of headcount that we are increasing also in our organization,
Speaker 13: which actually have slowed down because of some of these
Speaker 13: automation and some of these AI agents that would be
Speaker 13: labeled to deploy email organizations. So measured this productivity p.
Speaker 2: Dewey, I've grabbed. Great to have some time with you
Speaker 2: a long day. Appreciate you coming on. Welcome back to
Speaker 2: Blueberg Technology. I'm Caroline Hider, New York and I met.
Speaker 5: Love Loow right alongside her.
Speaker 3: The market story for the technology sector is anxiety about economics. Really,
Speaker 3: data out of China on the manufacturing side not great
Speaker 3: on US levies and you see the US listed shares
Speaker 3: of Chinese tech companies lower. Another name that I've got
Speaker 3: to point out, Tesla. Morgan Stanley is out with a
Speaker 3: note that the tie up between Waimo, the autonomous driving
Speaker 3: arm of Google, and Toyota is quote legit competition for Tesla,
Speaker 3: the stock under a little pressure there, and we go
Speaker 3: back to Nvidia Caro because Jensen one's on Capitol Hill.
Speaker 3: But also the read through and downward pressure that came
Speaker 3: from super Micro, one of its key manufacturing partners in
Speaker 3: the server design space.
Speaker 2: It is, and let's just stick with all things in video,
Speaker 2: but also all things President Trump. Because marking one hundred
Speaker 2: days ed in office as a rally in Michigan was
Speaker 2: taken out yesterday, he doubled down on his tough stance
Speaker 2: on immigration and the impact of Tara's on China's quote
Speaker 2: unfair trade now moves that sent ripples through the tech industry,
Speaker 2: of course, from supply chains to AI development. Now in
Speaker 2: Vidio CEO Jensen Wang, as you mentioned, ed just joined
Speaker 2: from Washington. He's sounded confident on the administration's tarast stance,
Speaker 2: but sounding the alarm when it comes to China's AI strength.
Speaker 6: China is not behind anybody who's in you. China's right
Speaker 6: behind us. I mean they're more very very close. But
Speaker 6: remember this is a long term. This is an infinite race.
Speaker 6: There is no you know, in the in the world
Speaker 6: of life, there is no those you know, there's no
Speaker 6: two minute here, end.
Speaker 4: Of the quarter.
Speaker 6: There's there's no such thing. And so we're going to
Speaker 6: compete for a long time.
Speaker 11: Murgs.
Speaker 2: Mike Shepherd joins us now a warning for the administration
Speaker 2: that China is close behind.
Speaker 14: Well, that's right, and it's one that he'll be able
Speaker 14: to deliver to the President in person this afternoon in video,
Speaker 14: of course, is one of the featured companies at an
Speaker 14: Investing in America meeting with the President later this afternoon.
Speaker 14: It's a part of the one hundred days in office
Speaker 14: celebration that is really extending over a few days, as
Speaker 14: Trump tries to look back at some of the successes he,
Speaker 14: in his view, has already had since taking office in January,
Speaker 14: and looks ahead to some more of the policy areas
Speaker 14: where they would like to gain ground. AI certainly is
Speaker 14: one of them. We're waiting this AI blueprint from David
Speaker 14: Sachs and others and We're also looking to see how
Speaker 14: the administration will act in a key area of concern
Speaker 14: for Jensen Wong, and that is those export controls on
Speaker 14: AI chips, especially the ones that his company makes.
Speaker 3: Caro probably is Mike Shepperd keeping us on us out
Speaker 3: of Washington, d C.
Speaker 5: Thank you very much.
Speaker 3: Let's get back to what is a top story and
Speaker 3: news overnight of China's President Gee's visit to a tech incubator,
Speaker 3: which sent some robotics stocks soaring. Then there was a
Speaker 3: slump in Chinese manufacturing data in the face of US
Speaker 3: tarrist that's also putting more focus on supply chains four
Speaker 3: key domains like robotics. Here in North America, competition in
Speaker 3: robotics is heating up, and some of that's coming from
Speaker 3: long standing robotics names like Boston Dynamics. Like's say, the
Speaker 3: company's CEO, Robert Plater, joins us. Now, Robert, welcome to
Speaker 3: Bloomberg Technology. Let's actually just start with basic data and facts.
Speaker 3: Where is Boston Dynamics today in its production of robots?
Speaker 5: Where does it take place? And what does the supply
Speaker 5: chain look like?
Speaker 15: Thanks for having me ed so, Boston Dynamics is building
Speaker 15: three products right now and two of them are in
Speaker 15: the market. Spot was our initial product, and we have
Speaker 15: about two thousand of those robots out with customers. We've
Speaker 15: launched a second product stretch, which is a warehousing robot,
Speaker 15: and that's having success with big players like DHL, and
Speaker 15: our third product will be humanoids. We are manufacturing all
Speaker 15: of these in the United States and to deploy them
Speaker 15: internationally as well as in the United States.
Speaker 3: Robert I always like to go to our audience on
Speaker 3: social media and say, the following CEO is coming on
Speaker 3: the show, what would you ask them? And based on
Speaker 3: what you just said, the first customer was if you
Speaker 3: are approaching a new customer, how would you go about
Speaker 3: a new task, What does the teaching process for the
Speaker 3: specific form facts of robot look like? And how long
Speaker 3: does it take to go from sort of inception to
Speaker 3: deployment in that industrial use case.
Speaker 4: That's a great question.
Speaker 5: Thank you. I didn't think of it any with someone
Speaker 5: else's go ahead.
Speaker 15: AI has definitely changed the game here and it's accelerated
Speaker 15: the rate at which you can teach.
Speaker 4: Robots new tasks.
Speaker 15: But much of the AI that you need to make
Speaker 15: humanoids successful is still to be built. What we found
Speaker 15: practically is that when you introduce a new robot like Spot,
Speaker 15: which we introduced in twenty twenty, it took us until
Speaker 15: about twenty twenty three before you really were starting to
Speaker 15: nail the applications that customers wanted and they generated value
Speaker 15: for them. So it's not an overnight activity. It's really
Speaker 15: learning about the customer problem and building a solution, not
Speaker 15: just a prototype robot.
Speaker 2: Let's talk about whether the solution of Optimus over at Tesla.
Speaker 11: Is that a competitive threat for you right now?
Speaker 2: Robert, how realistic do you think the timeframes are on
Speaker 2: that from Elon?
Speaker 15: Well, you know, Elon I think exaggerates often. He's got
Speaker 15: history of doing that, but he's also proven the ability
Speaker 15: to invent the future. So we take Tesla and Optimists
Speaker 15: very seriously. They also share an advantage that Boston Dynamics has,
Speaker 15: which is we're attached to a major automotive manufacturer and
Speaker 15: that creates a unique opportunity for us, but also for
Speaker 15: Tesla to not only build a scale, but deploy at
Speaker 15: scale and basically have consume your own robots.
Speaker 2: I mean, you've got a collaboration with Hyundai for example.
Speaker 2: You've also got partnerships long standing within Video and others.
Speaker 2: Just how resilient to those partnerships and do those end
Speaker 2: customers seem at this economic moment.
Speaker 15: Robert, Well, I think the partnership with Hyundai is going
Speaker 15: to be really amazing because they can be both our
Speaker 15: manufacturer and largest consumer. We can if we need to
Speaker 15: adjust manufacturing of automotives to make robots more successful, there
Speaker 15: we can do so, and that will really be key
Speaker 15: to achieving success. So I think the whole world is
Speaker 15: seeing the opportunity for this new generation of robots to
Speaker 15: expand significantly, and so I think there's just a lot
Speaker 15: of promise in this industry right now.
Speaker 5: Robert.
Speaker 3: The critical line of questioning I get for you, and
Speaker 3: maybe the criticism is that Boston has been at this
Speaker 3: a long time, and the skepticism is that you haven't
Speaker 3: moved beyond prototype phase. You've just said in the opening
Speaker 3: of this interview that actually you have. Would you go
Speaker 3: as actually bear with Robert, I'm afraid to say, We've
Speaker 3: got to leave it here for a second. The President
Speaker 3: is hosting a cabinet meeting in Washington, DC, and the
Speaker 3: right people.
Speaker 16: Working at Congratulations by the way, into tom for two
Speaker 16: months in a row. We have set the all time
Speaker 16: records for the lowest number of illegal border crossings ever recorded.
Speaker 16: The number of illegal boat crosses released into the United States.
Speaker 4: Is down ninety nine point nine percent. That is usually
Speaker 4: one hundred percent.
Speaker 16: So I think it's an amazing tribute, and Christy, congratulations.
Speaker 4: And Tom and everybody else.
Speaker 16: It's an amazing job actually, and it was done very quickly.
Speaker 16: We officially designated trend de Iragua MS thirteen and the
Speaker 16: Mexican drug cartels is foreign terrorist organizations and we're expelling
Speaker 16: these monsters from our country rapidly and working with the
Speaker 16: Department of Justice.
Speaker 4: Pam, You're doing fantastic. Your people are amazing.
Speaker 16: We're having some judge problems and everybody's reading some judges
Speaker 16: that don't like, you know, killers, murderers being thrown out
Speaker 16: of the country. So I don't know what their problem is,
Speaker 16: but we have a little difficulty. We won on the
Speaker 16: basis of a great border and of getting criminals out
Speaker 16: of our country. That was why we won every swing state.
Speaker 16: We won by millions of votes. We won everything, every metric,
Speaker 16: We won by a lot. It was a massive victory
Speaker 16: and we won I think largely because of this issue.
Speaker 4: I put this issue, it's number one issue, and they
Speaker 4: don't want us to do what we're supposed to do.
Speaker 16: And I don't think that can be I hope the
Speaker 16: Supreme Court is going to fully understand what's going on.
Speaker 16: We have to get the criminals out of our country,
Speaker 16: and that's the basis under which we won the election.
Speaker 16: Core gdpked and this is you know, you brobably saw
Speaker 16: some numbers today and I have to start off, I
Speaker 16: say that's Biden, that's not Trump, because we came in
Speaker 16: on January just a quarterly numbers, and we came in
Speaker 16: and I was very against everything that Biden was doing
Speaker 16: in terms of the economy, destroying our country in so
Speaker 16: many ways, not.
Speaker 4: Only at the border.
Speaker 16: The border was more obvious, but we took over his
Speaker 16: mess in so many different ways.
Speaker 4: Core GDP removing.
Speaker 16: Distortions from imports, inventories, and government spending was up close
Speaker 16: three percent when you edit, we had numbers that despite
Speaker 16: what we were handed, we turned them around, and we
Speaker 16: were getting them really turned around. Gross domestic investment was
Speaker 16: a whopping twenty two percent. Now that is a number
Speaker 16: that people are coming in at numbers. For instance, I
Speaker 16: just walked in IRN sam sub Is now because of
Speaker 16: the tariffs, they're going to build massive facilities in the
Speaker 16: United States.
Speaker 4: If we didn't do the tariffs, they wouldn't be doing that.
Speaker 16: So it takes a little while to get those facilities built.
Speaker 16: But they're coming in with big, big numbers. They're all
Speaker 16: coming in with big numbers. We have more moneys being
Speaker 16: spent than any at any time in the history of
Speaker 16: our country. We're up to close to eight trillion dollars,
Speaker 16: I think I can say, and really it's going to
Speaker 16: be a lot higher than that. Those are just the
Speaker 16: ones that we know about. Eight trillion.
Speaker 4: I'm not going to say, but I don't think.
Speaker 16: I'm not sure if Biden did a trillion for four years,
Speaker 16: one trillions, but we're eight trillion for two months, because
Speaker 16: let's give us a pass. On the first month, we
Speaker 16: were sort of getting a little bit used to things.
Speaker 16: But after two months we have eight trillion dollars. There
Speaker 16: has never been a number like that, and that includes
Speaker 16: chip companies, car companies, every form of manufacturing, high tech companies.
Speaker 4: Nobody's ever seen anything like it.
Speaker 16: So eight trillion dollars, I can talk about gross domestic product,
Speaker 16: gross domestic investment. I can talk about a lot of things,
Speaker 16: but to me, the biggest numbers the kind of numbers
Speaker 16: that are and these people are coming in. Our Secretary
Speaker 16: of Commerce spent the weekend he went down to Arizona
Speaker 16: to see what was happening with the chip the biggest
Speaker 16: chip company in the world, and he said, Howard, he said, you've.
Speaker 4: Never seen anything like it. You want to just describe
Speaker 4: what you saw.
Speaker 17: So they're investing one hundred and sixty five billion dollars
Speaker 17: in eleven hundred acres in Arizona and they're building the
Speaker 17: highest tech chip manufacturing semi conductors and four thousand employees.
Speaker 17: You know American trade craft, right, technicians doing every kind
Speaker 17: of work. The classic foundation of America is building it.
Speaker 4: They have fourteen thousand people. They're expecting forty thousand people to.
Speaker 17: Build the rest of their plants and to employ twenty
Speaker 17: thousand people for the rest of time.
Speaker 4: And it is old driven. You never saw a site
Speaker 4: type and this is.
Speaker 17: Old driven by your tower policies, no chance to be
Speaker 17: happening with having.
Speaker 16: It's going to be about forty percent of the chip
Speaker 16: market from that one section. And this is the biggest
Speaker 16: chip maker they have ninety nine percent of the market.
Speaker 4: They come from Taiwan.
Speaker 16: And unlike the Chip Act, which was done by Biden,
Speaker 16: where they hand everybody billions of dollars, the thing they
Speaker 16: don't need is money. They got plenty of money. What
Speaker 16: they need is an incentive to come in and the tariffs.
Speaker 16: They're building because of the tariffs. If without the tariffs,
Speaker 16: and I'd like to say they're building because of November fifth,
Speaker 16: the election and the tariffs.
Speaker 4: But I'm going to building more blunder.
Speaker 16: They're building because of the tariffs, and November fifth gave
Speaker 16: them the tariffs. So it's amazing when you look and
Speaker 16: these are not companies that go out and say, well,
Speaker 16: we're going to build, we have to go get our financing.
Speaker 16: Let's go like we would in New York. Everybody would look.
Speaker 16: You know, you'd get a building site and then you'd
Speaker 16: look around for money, you look around for financing for
Speaker 16: six months, you'd get your financing, you'd build your building.
Speaker 16: The market would be good, you'd make money. The market
Speaker 16: would be bad, it wouldn't be so pretty. You'd have
Speaker 16: to negotiate.
Speaker 4: Bab bab bob.
Speaker 16: This is different. These people have so much money they
Speaker 16: don't know what to do. They are asked, howard did
Speaker 16: they finance it? No, they do it through cash, and
Speaker 16: they stay that site. And they just started, you know,
Speaker 16: they just announced it like a month ago and they've
Speaker 16: already started.
Speaker 4: He said, I've never seen a sight like it's so big.
Speaker 16: So you know, you're talking about a fifty essentially a
Speaker 16: fifty billion dollar building.
Speaker 4: Now, if you built a.
Speaker 16: Warehouse for fifty million dollars, that's a big warehouse gotten,
Speaker 16: but a fifty billion dollar building, that's a lot.
Speaker 4: They're building.
Speaker 16: The electric they're building, They've become a utility, and I'm
Speaker 16: giving him the right to become. They're going to build
Speaker 16: their own electric They're going to build their own electricity,
Speaker 16: which they need tremendous amounts of electricity.
Speaker 4: They're gonna build it themselves.
Speaker 16: Anything they have looked, you know, left over, they'll hook
Speaker 16: that into the grid. But the grid is old and
Speaker 16: they're unreliable, and bad things can happen to grids. I said,
Speaker 16: if you want, you can hook into the grid, but
Speaker 16: that's a little bit risky, or you can build your
Speaker 16: own electricity.
Speaker 4: Have become your.
Speaker 16: Own utility, and they, I think in all cases, are
Speaker 16: deciding to do that.
Speaker 4: So it's very exciting and we have a lot of
Speaker 4: things going.
Speaker 16: We took over on January twenty of these are quarterly reports.
Speaker 16: We took over on January twentieth. The tariffs haven't kicked
Speaker 16: in yet. I know that, and I don't want this
Speaker 16: to happen, but I know that China is doing very
Speaker 16: poorly right now. I just saw some reports coming out,
Speaker 16: and I don't want that to happen to China.
Speaker 4: I like the.
Speaker 16: President a lot. President she, I don't want it to happen.
Speaker 16: I was actually sanden to hear it. But they are
Speaker 16: getting absolutely hammered in China. And you know, they're sending boats,
Speaker 16: the biggest boats in the world, carrying cargo like nobody's
Speaker 16: ever seen before. These are the biggest boats in the world,
Speaker 16: biggest cargo ships in the world, and they're coming and
Speaker 16: they're turning around in the Pacific Ocean. They're doing a
Speaker 16: big u turney going back because they don't want to
Speaker 16: do this because one hundred and forty five percent tariff.
Speaker 16: But at a certain point, I hope we're going to
Speaker 16: make a deal with China. We're talking to China, but
Speaker 16: their factories are closing all over China because we're not.
Speaker 4: Taking their product. We don't want their product.
Speaker 16: Unless they're going to be fair with us, and that
Speaker 16: includes intellectual property and other things. There are a lot
Speaker 16: of things far beyond just by sell. So we'll see
Speaker 16: what happens. But you know I was not because somebody said, well,
Speaker 16: were you happy? I said, I am not happy. I
Speaker 16: want you on it to do well. I want every
Speaker 16: country to do well, but they have to treat us
Speaker 16: fairly also.
Speaker 18: So with that, I think we're going to maybe go
Speaker 18: around and we have some letters where the secretaris and
Speaker 18: people around the table are making statements about how they're
Speaker 18: doing and what's happening. And I could start with Pete
Speaker 18: on the left, because he's my least controversial person.
Speaker 4: At the world. I don't know how good he is.
Speaker 4: So we'll go around the table and you can hear it.
Speaker 16: And these are cabinet meetings where they're very open and transparent,
Speaker 16: and I can guarantee you Biden didn't do this.
Speaker 4: He didn't do this. Go ahead, be well, mister president.
Speaker 4: I think we're controversial because we're over the target.
Speaker 19: And like so many things, mister President, you inherited a
Speaker 19: demoralized military.
Speaker 4: It couldn't recruit.
Speaker 19: It was perceived as weak after what happened in Afghanistan
Speaker 19: and elsewhere because of Joe Biden, and what we have
Speaker 19: seen since your election and the inauguration has been nothing
Speaker 19: short of a recruiting renaissance.
Speaker 4: Decades.
Speaker 20: It has been been decades since we've seen this kind
Speaker 20: of recruiting in the.
Speaker 4: Army, the Navy, the Marine Corps, the Air Force.
Speaker 20: The men and women of America want to join the
Speaker 20: United States military led by President Donald Trump, and the police,
Speaker 20: by the ways, and fire.
Speaker 4: I always mentioned the fire, but the police and fire.
Speaker 16: But the police and fire likewise are I mean they
Speaker 16: have waiting lists now and six months ago as a
Speaker 16: disaster of.
Speaker 20: Truly historic we can barely absorb the volume and retention
Speaker 20: as well, men and women in the military who don't
Speaker 20: want to get out now that they have a real commander,
Speaker 20: a chief. We're reinforcing standards. We're going to be fit,
Speaker 20: not fat in our formations. Welcome back all the COVID
Speaker 20: The folks that were forced out because of the COVID mandate,
Speaker 20: ripped woiteness.
Speaker 4: Out of the military, Star DEI trans.
Speaker 20: And it's Fort Benning and were bragg again at the
Speaker 20: DoD We're rebuilding the military SERP.
Speaker 4: The Golden Dome is well under way. F forty seven.
Speaker 4: Reassuring allies and deterring enemies.
Speaker 2: We found nearly President Trump in a cabinet meeting. We
Speaker 2: leave it on Peter hag Seth, of course, talking about defense,
Speaker 2: but so much said when it comes to the GDP figure,
Speaker 2: for example, and Trump blaming perhaps the decline that we've
Speaker 2: seen the worse since twenty twenty two, on what he
Speaker 2: inherited from the Biden administration, talking about core GDP actually
Speaker 2: being up, taking a while to get domestic facilities built.
Speaker 11: He went to Howard Luckneck.
Speaker 2: Of course, the comments secretary talking about the TSMC investment
Speaker 2: in Arizona, Key and Tech. Also is the fact that
Speaker 2: tarifs haven't yet kicked in, he says, And they know
Speaker 2: that China is currently doing very poorly, but he wants
Speaker 2: China to do well. Let's get the analysis me leg
Speaker 2: Kayly Lions is joining us. And what's so interesting about
Speaker 2: that core GDP number that he says, I'm assuming he's
Speaker 2: trying to reflect the final sales of domestic purchases or
Speaker 2: GDP based excluding inventory or international trade. But this is
Speaker 2: all about international trade implications acts.
Speaker 21: That's exactly right, Caroline, and he referred to that surge
Speaker 21: we saw in imports, which of course detracted from GDP
Speaker 21: as just being a distortion, kind of echoing what we
Speaker 21: heard from his trade advisor Peter Navarro that said, this
Speaker 21: is the best negative GDP print he's ever seen because
Speaker 21: it shows that countries want to sell to the US.
Speaker 21: Although another way of reading the data, of course, is
Speaker 21: that US companies are d really trying to get everything
Speaker 21: they can from other countries in before the tariffs fully
Speaker 21: take effects. So clearly the White House trying to spin
Speaker 21: this as still being the Biden economy, or, as President
Speaker 21: Trump said earlier, the Biden stock market, although he has
Speaker 21: now passed a hundred days in office. As he makes
Speaker 21: his way though calling on different sec secretaries in the
Speaker 21: Cabinet around the table, it'll be interesting to hear from
Speaker 21: the Treasury Secretary, Scott Besson, in particular around what we
Speaker 21: just heard from the President on China, a suggestion that
Speaker 21: he does want to make a deal and that talks
Speaker 21: are happening. The White House has repeatedly said this, even
Speaker 21: though China maintains that no negotiations have actually begun, so
Speaker 21: we'll see if we get a status update from beston
Speaker 21: on that or on other deals. Keeping in mind of
Speaker 21: course that uh, the ninety day window is rapidly shrinking,
Speaker 21: and they are trying to bring on short investment to
Speaker 21: the United States in that time, or at least get
Speaker 21: commitments from companies. He was referring to that as domestic
Speaker 21: facilities taking a while to be built. But the TSMC
Speaker 21: call out in particular interesting to hear from the Commerce
Speaker 21: Secretary and the President because those are actually investment pledges
Speaker 21: that were initially made during the Biden administration. TSMC received
Speaker 21: money from the Chips Act in order to build those
Speaker 21: facilities in Arizona. And yes, a new facility has just
Speaker 21: broken ground, so an expansion of what we saw during
Speaker 21: the Biden years, but it is still worth noting where
Speaker 21: that investment initially came from, so we may hear more
Speaker 21: about that. Keeping in mind as well that President Trump
Speaker 21: is expected to speak from the White House again later
Speaker 21: today four pm Eastern Time for a speech that's being
Speaker 21: built about investment in America.
Speaker 2: Katie lines, we appreciate it wrapping up for us. Meanwhile,
Speaker 2: we've got plenty more happening in Washington, and A Marie
Speaker 2: Hoddan has just been chatting with Palanis CTO Shom Sanka
Speaker 2: early today as part of the Helen Valley Form. Now
Speaker 2: it's a summit focused on how tech com bolston national
Speaker 2: security in the US manufacturing. He discussed his perspective on
Speaker 2: the military industrial complex under Trump administration.
Speaker 11: Just take listen.
Speaker 22: I think this is an opportunity to really fix a
Speaker 22: lot of the problems that have built up over the
Speaker 22: last thirty or so years since the end.
Speaker 5: Of the Cold War.
Speaker 22: If you go back to what it was like, what
Speaker 22: did the industrial base look.
Speaker 8: Like when we were winning World War Two?
Speaker 22: In the early Cold War, it was actually a very
Speaker 22: different economic structure. Chrysler built cars and missiles. We had
Speaker 22: a Deputy Secretary of Defense that was the co founder
Speaker 22: of HP. Bill Perry was the co founder of a
Speaker 22: Silicon Valley startup before he became Secretary of Defense. So
Speaker 22: it's a return to the functioning cross pollination of innovation
Speaker 22: that's always existed and been in the bedrock of how
Speaker 22: the American economy worked.
Speaker 7: Fifty percent of pallanteers revenue comes from government contracts. Do
Speaker 7: you expect that level to stay the same? Will accelerate
Speaker 7: under the Trump administration.
Speaker 22: I think it's been that way for a pretty long time. Obviously,
Speaker 22: we started entirely government. The commercial sector is bigger. It's
Speaker 22: growing very, very rapidly. But I think there's something quite
Speaker 22: healthy about having this diversified R and D base where
Speaker 22: everything we're learning and inventing in the very dynamic American
Speaker 22: private sectors actually benefiting our national security and broader functioning
Speaker 22: of government. You know, we were able to develop and
Speaker 22: deploy the operation Warp speed supply chain in two weeks
Speaker 22: because actually two years prior, we had solved a very
Speaker 22: structurally similar problem for VP and oil and gas. And
Speaker 22: you really cannot connect those dots prospectively. You can only
Speaker 22: see that retrospectively. And that's exactly what happened with SpaceX.
Speaker 22: You know, when I was a kid growing up in
Speaker 22: the shadow of the Space Coast, it used to cost
Speaker 22: fifty thousand dollars a kilogram to get to orbit on
Speaker 22: the Shuttle with Starship heavy reuse. It's now ten to
Speaker 22: twenty bucks. I'm not missing any zeros there, you know.
Speaker 22: It's just wild innovation that comes from that cross palmination.
Speaker 22: This happened with Intel and in the late sixties, ninety
Speaker 22: six percent of Intel's revenue actually came from the Apollo program.
Speaker 22: It was effectively a government contractor. But actually Bob Noys,
Speaker 22: the inventor of the transistor, the CEO of Intel, he
Speaker 22: always had a vision that integrated circuits were going to
Speaker 22: be in every consumer device, and he invested in that
Speaker 22: capability and in the seventies and eighties that enabled us
Speaker 22: to build a salt breaker, which meant that we didn't
Speaker 22: have to match the Soviets weapon for weapon. We could
Speaker 22: actually build smarter weapons and have many fewer of them
Speaker 22: that we could afford and still have deterrence.
Speaker 7: So even if your government revenue comes down, it's because
Speaker 7: you're making money elsewhere in the private sector.
Speaker 22: Yeah, And to be clear, I don't think the revenue
Speaker 22: is going to come down, It's just that they're going
Speaker 22: to be differential growths here.
Speaker 5: Yeah.
Speaker 3: That was Palenteer CTO Scham Sanka along with Bloomberg's A
Speaker 3: Marie Horden Cary.
Speaker 2: I'm coming up investors, I Big Tech Earning said, we
Speaker 2: got Meta, we got Microsoft. They're reporting after the bell
Speaker 2: plenty more on those ahead. That's Bloomberg Technology.
Speaker 3: Turning back to earnings investors eagerly awaiting big tech names
Speaker 3: Meta and Microsoft after the bell and carry like it's
Speaker 3: really a simple equation for Microsoft AI costs capex. It's
Speaker 3: a good story to follow because that's how anyone cares
Speaker 3: about really and.
Speaker 2: Are they sinking to about eight billion? What happens in
Speaker 2: the next year, And what's so interesting is the geopolitical implications.
Speaker 2: You just spotted a Microsoft blog today saying we're still
Speaker 2: expanding our data center footprint in Europe.
Speaker 3: Right They're going to add data centers across sixteen countries,
Speaker 3: they said in this blog post. With the timing of
Speaker 3: it's like very curious. I said to the guests earlier,
Speaker 3: We've all used Microsoft software, m paid for it for
Speaker 3: a long time. And now investors maybe a little bit
Speaker 3: of going like okay, investment. Yeah, but showed me a
Speaker 3: bit of like the end result of all of this.
Speaker 2: And where have analysts and investors reorientated their numbers going
Speaker 2: into this.
Speaker 11: Of course this quarter is not the real tell. It's
Speaker 11: going to be next quarter.
Speaker 2: But Microsoft has sixty five buys on it zero cell.
Speaker 3: Yeah, it's still like the darling of whatever it is
Speaker 3: that's happening in AI. Like Meta also interesting, maybe even
Speaker 3: more straightforward as a story like Google. Yeah, we track
Speaker 3: the capital expenditures. It's a big operator of data centers itself.
Speaker 3: But is its core AD business able to sustain the spending?
Speaker 2: And what about the implications that snapped the read across
Speaker 2: Already sheen already Temu bringing back their spending on ads
Speaker 2: in real time, Will Mark Zuckerberg will seasonally signal that
Speaker 2: for the current quarter we're already in, not just the
Speaker 2: backward looking quarter that they've achieved.
Speaker 3: And very quickly then you remember that in twenty four
Speaker 3: as I was time to go again with Apple and
Speaker 3: Amazon relentless.
Speaker 2: Ye brace yourself. And I'm so pleased that he sat
Speaker 2: right next to me here in New York. Meanwhile, that
Speaker 2: does it for this edition of Blue Meg Technology. Don't
Speaker 2: forget to check out our podcast. Find it on the
Speaker 2: terminal as well as online on Apple, Spotify, and iHeart
Speaker 2: from New York for the next couple of days.
Speaker 11: This is Blue Meg Technology.