Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hyde in New York
Speaker 1: and Eva Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Figma CEO joins us live from the NYC Shares a
Speaker 3: due to start trading in one of the year's biggest IPOs.
Speaker 3: Plus Microsoft and Meta sore on the back of earnings
Speaker 3: and their big bets on AI. We'll also dive deep
Speaker 3: into the latest chip earnings. We speak with the CEOs
Speaker 3: of ARM and Qualcomm. We have a massive show for you.
Speaker 3: This is what the technology earning story looks like right
Speaker 3: now and last night, Microsoft are Meta dominating.
Speaker 4: Actually some of.
Speaker 3: The games have called off a little bit but very
Speaker 3: simple equation. We see AI fueled growth. The capex commitment
Speaker 3: is there, but on the top line, you're really starting
Speaker 3: to see AI maker contribution. Apple and Amazon are after
Speaker 3: the bell and that is a big focus because some
Speaker 3: of the themes are similar to Matter and Microsoft.
Speaker 4: Some are not.
Speaker 3: Tariffs a big equation, but Amazon under pressure to show
Speaker 3: it's keeping pace with the games. We saw in cloud
Speaker 3: from Microsoft last night, but remember Alphabet last week. Then
Speaker 3: there's the chip makers. Right shares of ARM under pressure
Speaker 3: as the chip maker posted second quarter results with we
Speaker 3: can then expected outlook for profit. Some were surprised by that.
Speaker 3: In an investor base, this is the company says they're
Speaker 3: going to increase spending to better capitalize on the AI
Speaker 3: boom for more delighted to say that. Were joined by
Speaker 3: Armed CEO Renee has Renee, good morning to you, welcome
Speaker 3: back to Bloomberg Technology. That there's actually like a lot
Speaker 3: of granular questions about what you're spending on, whether it's
Speaker 3: a kind of shift to offer more in the AI
Speaker 3: domain beyond the core CPU. Could you just explain a
Speaker 3: little bit of where that's based.
Speaker 5: Yeah, happy to and good morning Ain. Thanks for thanks
Speaker 5: for having me this morning. So a few things going
Speaker 5: on with our business. We just came off our first quarter.
Speaker 5: We're in our first fiscal year. We've never actually in
Speaker 5: the first quarter ever had a billion dollars in revenue.
Speaker 5: That that's a record. Our royalties are our way up
Speaker 5: twenty five percent year on year. But also what's fueling
Speaker 5: growth for us are these compute subsystems that we've talked about.
Speaker 5: We now have five customers shipping we had three customers
Speaker 5: in the last quarter that have taken on that product,
Speaker 5: two in the data center, one in PCs, and we
Speaker 5: also announced our automotive compute subsystems. All of that is
Speaker 5: fueling demand for more and more ARM technology across the board.
Speaker 5: We expect to be at the end of the year
Speaker 5: over fifty percent market share ARM CPUs in the data center.
Speaker 5: So as a result of all that, we are really
Speaker 5: doubling down on investing in this space. We see a
Speaker 5: huge opportunity for growth. We see huge opportunity for ARM
Speaker 5: based compute. We're the only AI compute platform that can
Speaker 5: run from very very small devices such as earbuds, milliwatts
Speaker 5: up in the data center, in the megawatts and gigawatts.
Speaker 5: So yes, we are investing more aggressively than we had anticipated,
Speaker 5: but I am very convenienced the right thing to do.
Speaker 3: You talked about Project Stargate as an opportunity, and that
Speaker 3: project uses ARM for the core CPU, right, But I
Speaker 3: think I'm right in saying you talked about there's a
Speaker 3: unique opportunity to provide solutions. Is that an expansion of
Speaker 3: the CPUIP or building on top of it, or are
Speaker 3: we talking about ARM moving into not just AI accelerators,
Speaker 3: but high performance compute systems more generally, that would represent
Speaker 3: quite a shift in the business model for you.
Speaker 4: Rene.
Speaker 5: Yeah, so Stargate is an amazing opportunity slash endeavor. I think,
Speaker 5: as you know, I'm not only the CEO of ARM,
Speaker 5: but I sit on the board of SoftBank, so I'm
Speaker 5: fairly close to what's going on with Stargate, which is
Speaker 5: a joint venture between soft Bank and open Ai about
Speaker 5: really bringing a huge amount of investment for data centers.
Speaker 5: We announced a five hundred billion dollar investment in January.
Speaker 5: I think when Mossa and Sam we're talking a couple
Speaker 5: of weeks ago, Sam had talked about expanding this out
Speaker 5: the ten gigawatts or the x number of years. That's
Speaker 5: a lot of compute and in a ten gigawatt investment
Speaker 5: or five hundred billion dollars, there's a lot of opportunity
Speaker 5: for innovation. Right now while we're talking about is the
Speaker 5: fact that we are the CPU of choice. Grace Blackwell
Speaker 5: is the device that's being used. I think, as you know,
Speaker 5: Grace is based on ARM. So right now, that's all
Speaker 5: we're saying publicly, but you can imagine with that type
Speaker 5: of investment. With those type of demands for compute and power,
Speaker 5: there's a lot of opportunity for ARM to do even
Speaker 5: more than we're doing today.
Speaker 3: But I think that's what the market is trying to understand.
Speaker 3: If more means more than enhancing the CPU IP and
Speaker 3: moving into more of the sack, basically is would that
Speaker 3: be a fair assessment.
Speaker 6: Yeah.
Speaker 5: What we said on the call yesterday is that we
Speaker 5: are now exploring those opportunity and they can come in
Speaker 5: latch and WAT shapes or forms. Doesn't necessarily need to
Speaker 5: be an end solution. There are things such as chiplets.
Speaker 5: These are essentially computer subsystems that use RP but deliver
Speaker 5: in the physical form. One of the things that we
Speaker 5: see with these data centers is that customization allows for
Speaker 5: a lot of opportunity to increase performance and power efficiency.
Speaker 5: So we have a lot of optionality in terms of
Speaker 5: what we do there, and we're looking at everything right now.
Speaker 3: The shares are down more than eleven percent and at
Speaker 3: one point in the session on track for their biggest
Speaker 3: drop since last August. What you said about new licensing activity,
Speaker 3: which I think appears to have taken a bit of
Speaker 3: a pause, is that that is a normal fluctuation that
Speaker 3: you see, But why should investors not be so concerned
Speaker 3: about that? And I'm just going off off of the
Speaker 3: share reaction as we have it to last night's print.
Speaker 5: Yeah, yeah, you know, as far as the share reaction,
Speaker 5: you know, really can't comment on that. But one of
Speaker 5: the things about our licensing activity is that it is
Speaker 5: it's pretty robust and pretty sticky. What do I mean
Speaker 5: by that? So these compute subsystems that we're licensing, we're
Speaker 5: actually now on the second generation of licensing those That
Speaker 5: means customers who have licensed the previous generation are now
Speaker 5: licensing the next generation. The reason that we have such
Speaker 5: good continuity in our licensing activity is that the software
Speaker 5: that runs on ARM is so ubiquitous that the change
Speaker 5: to a different architecture alternative, it's a pretty large lift
Speaker 5: that consumers really would not see much benefit from. So
Speaker 5: what we think we see in licensing is from quarter
Speaker 5: to quarter it may be a little bit lumpy, meaning
Speaker 5: that a deal that could have signed in June may
Speaker 5: sign in July, and that may affect the financials, But
Speaker 5: in terms of the overall health of the trajectory of
Speaker 5: the license activity, it's very very strong. We've seen record
Speaker 5: licensing revenue over the last number of years, and people
Speaker 5: have just thought, could your licensing revenue really grow given
Speaker 5: the market share is so high, But we see growth rene.
Speaker 3: Some of the math that everyone's trying to do on
Speaker 3: tariffs is how much of a pull in or pull
Speaker 3: forward there was in one age? So what were you
Speaker 3: seeing in terms of orders coming in for the first
Speaker 3: half that may not materialize in the second half if
Speaker 3: people were trying to front run the impact of tariffs
Speaker 3: in the end markets you work.
Speaker 5: With, Yeah, we're not feeling that very much. And part
Speaker 5: of the reason for that is again when we went
Speaker 5: to our new compute subsystems, that the royalty rates are
Speaker 5: much higher than what we traditionally had seen. We grow
Speaker 5: much faster than the market. You know, what does that mean?
Speaker 5: We were up twenty five percent year on year in
Speaker 5: terms of royalties. Some of the end markets that we
Speaker 5: would participate in we're up single digits in some cases
Speaker 5: one to two percent. So we're really not seeing, as
Speaker 5: far as I can tell, any effect of people pulling
Speaker 5: ahead orders because the tariffs et cetera, et cetera. I
Speaker 5: think what we're seeing is our royalty growth really being
Speaker 5: fueled by investments we made a number of years ago
Speaker 5: around these computer subsystems.
Speaker 3: A renee just there with me, please if you will.
Speaker 3: Have got some breaking news. The President has posted on
Speaker 3: true social that he has extended a tariff deal with
Speaker 3: Mexico for ninety days. He had a phone call with
Speaker 3: Shinebomb and is extending the tariff deal with Mexico for
Speaker 3: ninety days. Will bring more to our audience on that
Speaker 3: as we get it and more analysis Mexico to pay
Speaker 3: a fifty percent tariff on aluminum and copper. If tariffs
Speaker 3: is not that that signal for you, Rena in the
Speaker 3: second half of this year, What are the headwinds that
Speaker 3: you baked into your projections?
Speaker 5: You know, the geopolitics and tariffs and things of that
Speaker 5: nature are still something we're all learning about as an industry.
Speaker 5: So as a result, we didn't give full your guidance.
Speaker 5: We haven't didn't do that in the last quarter. So
Speaker 5: we're trying to get a handle in terms of what
Speaker 5: the next six months look like. But I would say
Speaker 5: the fundamentals are very very strong. Again when you look
Speaker 5: at the share that we're gaining in the data center,
Speaker 5: almost fifty percent by the end of the year, all
Speaker 5: the growth of AI, stargate being a huge opportunity for US,
Speaker 5: and ARM being the only compute platform that can address
Speaker 5: AI from the smallest of devices to the very largest.
Speaker 5: We're very, very bullish in terms of long term demand.
Speaker 5: The quarter to the quarter tear of things. We'll just
Speaker 5: have to say how those all settle out over the
Speaker 5: next number of months and days.
Speaker 4: Rene really really quick.
Speaker 3: You've made some gains into automotive, which I find absolutely fascinating.
Speaker 3: Just explain the outlook for that business and where the
Speaker 3: traction is.
Speaker 5: Yeah, thank you for asking. It's actually a very similar
Speaker 5: story to some of the other markets that we serve in.
Speaker 5: And by that, what do I mean? And first off,
Speaker 5: power efficiency really matters, particularly in these evs where the
Speaker 5: compute requirements for autonomous driving is very very high. There's
Speaker 5: a lot of software that's now been ported and written
Speaker 5: to ARM. If you look at the players in this area,
Speaker 5: whether it's Tesla doing their own ships or in Video
Speaker 5: or Qualcom, all those compute chips are based on ARM.
Speaker 5: ARM is the compute platform for autonomous and as more
Speaker 5: and more computer requirements go up, power efficiency being a
Speaker 5: very very big key, that's a very very good trajectory
Speaker 5: for us in the long run, and again it follows
Speaker 5: a very similar formula we see in other markets.
Speaker 3: Renee very quickly, Christiano Amon is on later in the hour.
Speaker 3: Investors want you to and are asking when you'll bury
Speaker 3: the hatchet and go back to being the important long
Speaker 3: term partners that you were.
Speaker 5: Qualcom's a great partner. They do a lot of business
Speaker 5: with ARM. As you know, we are in the litigation
Speaker 5: with them that is still ongoing, so I can't comment
Speaker 5: on that. But Qualcom is a long term partner of
Speaker 5: ARM and they have a lot of products based on us.
Speaker 3: As you know, renee Haus of ARM. Really appreciate your
Speaker 3: time on Bloomberg Tech. Thank you very much. More on
Speaker 3: the chip sector. As I said, Christiano, I'm on the
Speaker 3: Qualcom CEO will be on later in the hour with
Speaker 3: the latest on their earnings and up next, FIGMA CEO
Speaker 3: Dylan Field joins us. This is company goes public. We'll
Speaker 3: head down to the New York Stock Exchange for that
Speaker 3: conversation that's next.
Speaker 4: This is Bloomberg Tech.
Speaker 7: To our world TV and radio audiences. Hi, welcome you
Speaker 7: back to Bloomberg Tech outside the New York Stock Exchange
Speaker 7: sat with the latest listing. The CEO of Figma, Dylan Field,
Speaker 7: joins me now and to your thirteen million users, to
Speaker 7: the thousands of global employees worldwide, how's it feel tomorrow?
Speaker 8: It feels surreal And just thank you for having me
Speaker 8: and for being here with us today. It's just amazing
Speaker 8: to see the community turn out and also just to
Speaker 8: view with the team the contributions of fig Maine's past present,
Speaker 8: and also just all the things we've learned and contin
Speaker 8: to learn from our community. They all just kind of
Speaker 8: show up today in physical manifestation and I can be
Speaker 8: more grateful.
Speaker 7: I mean, the vibes, there's a like DJ there's so
Speaker 7: many of your employee base, as you say, your figmates,
Speaker 7: those who have batch you early. Why this Why does
Speaker 7: what does it show about your community?
Speaker 8: Well, I mean what we really wanted to do is
Speaker 8: involve the design community in this experience today that we're having,
Speaker 8: because I think it's not just that Figma's going public today.
Speaker 8: Design is going public today. Yeah, And if you think
Speaker 8: back several decades, you know, back, you know, twenty years ago,
Speaker 8: the sort of mindset was that design was lipstick on
Speaker 8: a pig. This is how you make it pretty, and
Speaker 8: maybe a decade ago it was design is how it works.
Speaker 6: And then today you know, twenty twenty.
Speaker 8: Five, in a world where software accomplish is increasing so much,
Speaker 8: it's easier than ever to create software. Yes, I think
Speaker 8: we're now in a world where design is the differentiator.
Speaker 8: That's been our thesis for ten years. We've seen it
Speaker 8: play out, but it's even more clear now the design
Speaker 8: craft point of view. That's what sets companies apart, and
Speaker 8: so we're just trying to be this engine for product
Speaker 8: sign and development. And to be able to celebrate design
Speaker 8: today with all of our friends and community is such
Speaker 8: a privilege.
Speaker 7: What sets you apart to be able to enable design
Speaker 7: versus the whole plethora of generative AI startups that is
Speaker 7: suddenly hearing on these seat and making things very cheap
Speaker 7: to build.
Speaker 9: To say, as you say, design, yeah, I think that
Speaker 9: there's such an opportunity for us with Pigma Make to
Speaker 9: be able to help people go from prompt all the
Speaker 9: way to app and we're very focused on that and
Speaker 9: improving that surface area.
Speaker 8: We have so much more to come there, but already
Speaker 8: you can not only do things through prompting, but.
Speaker 6: You can also copy and paste.
Speaker 8: Things in from your Pigma design your canvas into FIGA make.
Speaker 8: There are times you want to edit via prompt. There
Speaker 8: are also times you want to edit in a more
Speaker 8: direct manipulation way where you go into the canvas and
Speaker 8: you're able to see many different options in the option space.
Speaker 6: We think both are important and both.
Speaker 8: Have to work really well together, and so that's something
Speaker 8: we're excited to uniquely enable. And I just think in general,
Speaker 8: we're kind of in this ms dos era of AI
Speaker 8: and if we're able to get to the point where
Speaker 8: we really well it was true. And if we're able
Speaker 8: to get to the point I mean I used to
Speaker 8: say tellnet era and people are like, let's tell net
Speaker 8: so you know, stop for that and went down as das.
Speaker 8: But if we're able to get to this point where
Speaker 8: people can really explore the latent space of these models
Speaker 8: and what we generated and see the entire option space
Speaker 8: of what they can do, then humans designers can add
Speaker 8: that craft yeah, and really figure out how to differentiate
Speaker 8: and also the system in their head, not just the
Speaker 8: design and the technology system, but also the business constraints.
Speaker 8: And that's why it's important to over the floor is ceiling,
Speaker 8: bring more people into the design process.
Speaker 7: So that one point two billion dollars that you raised
Speaker 7: through this process, where.
Speaker 6: Does that go?
Speaker 7: Where does that get allocated to ensure that you're building well.
Speaker 8: So one thing that was unique for the transaction was
Speaker 8: because of the cash balance we have at Pigma.
Speaker 6: You know, due to.
Speaker 8: Rounds we've raised but never really used cash that we've generated,
Speaker 8: and also the break up fee, we had quite a
Speaker 8: cash balance. And so it's a transaction that is a
Speaker 8: lot of secondary and then there's some primary, but mostly
Speaker 8: for the release of RSUs and so it's more synthetic
Speaker 8: primary and the U. So I mean we already have
Speaker 8: quite the cash balance, it's more less what we're exiting
Speaker 8: the transaction with.
Speaker 6: And when we think.
Speaker 8: About the future of how to deploy that. First of all,
Speaker 8: we want to be good scom Stewart's of capital always.
Speaker 8: But I did put my founder letter in the S one. Yeah,
Speaker 8: expect us to make old moves. And I want people
Speaker 8: to know that in the US, in the community because
Speaker 8: as we're going to invest in AI, we're going into
Speaker 8: an investment cycle here and it's important people are aware
Speaker 8: of that.
Speaker 7: You are going to invest, you're not going to be
Speaker 7: focusing on profitability, you'll be focusing on growth.
Speaker 8: We are focusing on growth, and we're focusing on all
Speaker 8: the great things that we can do right now and
Speaker 8: enable for our users, the value we can create for
Speaker 8: our customers.
Speaker 7: Using the public markets are going to give you that mandwidth.
Speaker 8: Well, that's their choice. That's why I want to make
Speaker 8: sure I call it out upfront. Yeah, And another thing
Speaker 8: that I think is important to note is in terms
Speaker 8: of big swings, I can't say when or if, but
Speaker 8: my intention is to do big swings when it comes
Speaker 8: to scaled M and.
Speaker 6: A and well a lot of companies. Well, when I think.
Speaker 8: About how we approach the process, we're always surveying, we're
Speaker 8: always trying to learn, and there's so much that can
Speaker 8: be applicable of FIGMA when you think of the breadth
Speaker 8: of product design and development and that entire process which
Speaker 8: we're really trying to cover. And not all the gaps
Speaker 8: we have will be filled with us building, our buying.
Speaker 6: A lot of them will be partnerships. But I wanted
Speaker 6: to call.
Speaker 8: It out because for skilled MNA, as you do that,
Speaker 8: it is often misinterpreted by markets.
Speaker 6: It creates volatility.
Speaker 8: People get, you know, sometimes they don't understand the really
Speaker 8: good stuff and obviously will be prudent. You know, it
Speaker 8: has to be an amazing team, an amazing asset has
Speaker 8: to be something that we think that the team is
Speaker 8: culturally consistent the least, but preferably culture ad Yeah, and
Speaker 8: they're going to create new dimensionality to our culture that
Speaker 8: we didn't have before, and we're going to learn from them.
Speaker 8: But third and most importantly, it has to be a
Speaker 8: main priority going forward. That's the minimum, and we will
Speaker 8: hold a high bar for what we if and when
Speaker 8: we do that to our TV.
Speaker 6: And radio audiences.
Speaker 7: We're with Dylan Field, the CEO of Figma, which has
Speaker 7: just gone public, And if we cast our minds back,
Speaker 7: the valuation that you're currently at looks at about twenty
Speaker 7: million dollars and that was the amount that Adobe wanted
Speaker 7: to pay to buy you that didn't work out. Just
Speaker 7: talking about M and A, was this the right.
Speaker 6: Path to be independent?
Speaker 7: How does that make you feel?
Speaker 8: I mean, you've been so focused on this path for
Speaker 8: years now, and I'm just really excited to be here today.
Speaker 8: The Adobe stuff kind of feels like so long ago now. Yeah,
Speaker 8: and yeah, just as we look forward, I mean, there's
Speaker 8: so much to build in such breadth of opportunity.
Speaker 6: We have, like I said the founder letter, more ideas
Speaker 6: than ever.
Speaker 8: Yeah, and it's all about prioritization and it's all about
Speaker 8: clarity for the team. And that's what we're trying to do,
Speaker 8: is to create that clarity.
Speaker 7: I mean talking about demand. You are forty times over
Speaker 7: subscribed to those retail investors that want to get in
Speaker 7: on this, what do you say for the short term
Speaker 7: if the shares pop?
Speaker 8: The only message I can give you if you're on
Speaker 8: the retail side is understand what we do. We have
Speaker 8: our s one out there. We've done our best to
Speaker 8: present it in a really readable way of read the
Speaker 8: document and look at our numbers. Understand where we're headed
Speaker 8: and what we offer. Play with a product, you know,
Speaker 8: become a designer. I think you know that's true for
Speaker 8: a lot of people and a lot of companies. If
Speaker 8: designs how you win or lose. You speak part of
Speaker 8: the process too. But the more you can dive in
Speaker 8: and the better you can understand it, the better you
Speaker 8: can make a decision on things. And that's the main
Speaker 8: advice they give anyone, whether they're joining Figma, trying to
Speaker 8: invest in Figma. Those are both investments. Yeah, of time
Speaker 8: of money, and that's important. Is so deeply understanding.
Speaker 7: Dylan Fields, CEO of Figma, on the day of their
Speaker 7: IPO from the New York Souck Exchange head back.
Speaker 3: To you, Caroline down the NYSC with still a waiting
Speaker 3: trading for Figma and it is one of the most
Speaker 3: anticipated IPOs of the year. Now some breaking news, President
Speaker 3: Trump announcing moments ago on truth Social that the current
Speaker 3: tariff rates for Mexico have been extended for another ninety days.
Speaker 4: Let's get out to Washington, d C.
Speaker 3: Blombos Tyler Kendall, And a part of this is the
Speaker 3: President explained it Tyler to allow more time for negotiation
Speaker 3: between Mexico and the United States.
Speaker 4: Right exactly.
Speaker 10: Ed. He says that there will be an additional ninety
Speaker 10: days and they'll hope to in some sort of trade
Speaker 10: agreement in that time. But he did write in that
Speaker 10: post on truth Social that it could be even extended
Speaker 10: beyond that. Now, our understanding, according to the President is
Speaker 10: that Mexico will continue to pay the twenty five percent
Speaker 10: tariff that has been in place, and those sector specific
Speaker 10: tariffs aren't changing. Twenty five percent for autos, and then
Speaker 10: fifty percent for steel and aluminum. Keep in mind that
Speaker 10: Mexico had been faced with a thirty percent tariff threat
Speaker 10: if they weren't able to make a deal by tomorrow,
Speaker 10: August first. And it's really important context here that the
Speaker 10: negotiations with Mexico have always been on a totally separate track.
Speaker 10: While Mexico was yes of faced with tariffs on the
Speaker 10: same sort of legal basis IIPA, the International Emergency Economic
Speaker 10: Powers Act, they were tariff months before so called Liberation Day,
Speaker 10: with the legal basis being from the administration. That this
Speaker 10: is over concerns about the border in FETNAH flow is
Speaker 10: something that the President also mentioned in his post on
Speaker 10: truth Social There's a few different threads here that we're
Speaker 10: going to be watching moving forward. But importantly we should
Speaker 10: highlight that the aspect of USMCA compliance and that those
Speaker 10: goods are of course shielded here from the tiers. The
Speaker 10: latest data I pulled it about eighty three percent of
Speaker 10: goods that came from Mexico last year ed wore USMCA compliant,
Speaker 10: but that still leads about eighty billion dollars worth of
Speaker 10: imports that are exposed to a higher.
Speaker 3: Tear Bloomberg s Tylo Kendo in DC. Thank you very much.
Speaker 3: Let's get to another earning story. Shares of Roadblocks absolutely
Speaker 3: storing today after the gaming platform reported a fifty one
Speaker 3: percent increase in bookings last quarter and a daily active
Speaker 3: use account the top one hundred and eleven million. Bloomberg
Speaker 3: Cecilia Deanastasia joins us to explain what gardening has to
Speaker 3: do of all of this. We can get that to
Speaker 3: that in a minute, but go through the numbers. What
Speaker 3: is Roadblocks doing well right now?
Speaker 11: Roadblocks is attracting a lot of users and connect them
Speaker 11: to any of the millions of games in the platform.
Speaker 11: Roadblocks filtered a lot of users who would be excited
Speaker 11: about its hit game, grow Garden to that game. That's
Speaker 11: twenty two million concurrent players at one moment in July,
Speaker 11: and the wealth is not just concentrated at Grogarden. Roadblocks's
Speaker 11: chief executive officer, Dave Bazuki was bragging today that more
Speaker 11: than seventy five percent of the people who were playing
Speaker 11: Grow Garden every day also played another game on the platform.
Speaker 11: So it's bringing people in and then just channeling them
Speaker 11: to other games that the company knows they'll love.
Speaker 3: So grow Garden is kind of key. I know that,
Speaker 3: like in terms of their servers, it's a big use
Speaker 3: of capacity right now. But in the month of July,
Speaker 3: which was still currently in the platform has like several
Speaker 3: titles that have ten million daily active users.
Speaker 4: Kind of explain that landscape to us. Cecilia.
Speaker 11: Of course, when you log onto Roadblocks, you have a
Speaker 11: sort of a big cat of games at the platform,
Speaker 11: things that you might like, and Roadblocks has done a
Speaker 11: really good job figuring out what a specific user might
Speaker 11: be interested in, whether it's like a driving game or
Speaker 11: a role playing game or a fighting game, and creators
Speaker 11: have been making games at the same time that based
Speaker 11: on data that they have, they know that will be
Speaker 11: popular on the platform. And over the last year, four
Speaker 11: games have been published to the platform that have attracted
Speaker 11: a concurrent ten million users, which is.
Speaker 4: A top Cecilia.
Speaker 3: Roadblocks has come in for a lot of criticism on safety,
Speaker 3: particularly around child safety, but looking at the narrative from leaders,
Speaker 3: they want to have a leadership position in safety in
Speaker 3: this domain.
Speaker 6: Right yes.
Speaker 11: Roadblocks's chief executive officer, Dave Zuki says that he wants
Speaker 11: the company to be a leader on safety and the
Speaker 11: companies implemented dozens of safety changes over the last year
Speaker 11: intended to ensure children are not put in contact with
Speaker 11: people or materials who might cast them harm.
Speaker 3: Bloomberg Cecilia the Anastasi, thank you very much and join
Speaker 3: us tomorrow for a conversation with Roeblock CEO Dave Bazooki.
Speaker 4: The stock up more than twelve percent all time highs.
Speaker 3: We want to welcome our Bloomberg TV and radio audiences worldwide.
Speaker 4: Shares a quod Com under a bit of pressure.
Speaker 3: The company posted third quarter results showing a bit of
Speaker 3: lackluster growth in the smartphone market. But this story longer
Speaker 3: term has been a move into other areas. Delighted to
Speaker 3: say that quid coom CEO Christiano Amon joins us now
Speaker 3: and you and I've discussed this so many times, the
Speaker 3: move into IoT and in particular automotive. So I thought
Speaker 3: that a good starting point would be to ask when
Speaker 3: smartphone and handset is no longer the majority of revenue
Speaker 3: and when that kind of tipping point or how close
Speaker 3: toward that tipping point is where your diversification efforts have
Speaker 3: shifted the business model.
Speaker 12: Very good, ed, great talking to you. Look, I've i
Speaker 12: don't really understand what not to like about it. We
Speaker 12: have been consistently delivering what we said we're going to do.
Speaker 12: I think the company has changed. The company created a
Speaker 12: lot of growth opportunities. And to answer your question, we outline,
Speaker 12: I think in last year on our investor day a
Speaker 12: plan that we're going to have twenty two billion dollars
Speaker 12: of non handset business by fiscal twenty nine, and at
Speaker 12: that point we expect the company to be diversified at
Speaker 12: a fifty percent non handset revenue, and we continue to
Speaker 12: execute on that plan. We're happy with it. We provided
Speaker 12: a new metric, the new metric that we provided as
Speaker 12: we as we provide guide for fiscal twenty five, we
Speaker 12: now expect that we will have this second consecutive year
Speaker 12: of QCT or chip business non apple growth of fifteen percent.
Speaker 12: So we have second year double district growth non apple revenue.
Speaker 12: So I think the company continued to diversify, continue to
Speaker 12: generate growth. We executed what we said we're going to
Speaker 12: do and we're happy with it. And we're creating optionality
Speaker 12: for the company in other areas for example, data center,
Speaker 12: in robotics, all of those which are going to be
Speaker 12: upside to the plan. So we're just going to continue
Speaker 12: to execute on our strategy.
Speaker 3: The data point is new right qct x Apple revenues,
Speaker 3: and I was interested to read and understand it. You've
Speaker 3: also like communicated quite a lot about this this shift
Speaker 3: as Apple moves away from your modems for iPhone. May
Speaker 3: I ask, like what you think investors need to understand
Speaker 3: and remodel for or even what is it that miss
Speaker 3: investors are misunderstanding about that that process.
Speaker 12: Christiana, Look, I believe that investors are probably still over
Speaker 12: indexing on this short term and I and they've been
Speaker 12: focuning about Qualcom as a handset company. I think the
Speaker 12: handset market has been a market that has not been growing.
Speaker 12: And then you have this conversation about the fact that
Speaker 12: Apple's transition to their own modem. You have to step back,
Speaker 12: and you have to step back, and you have to
Speaker 12: understand the Qualcom has very very unique and competitive IP
Speaker 12: across many areas. We're no longer just a communications company.
Speaker 12: We have very compelling computing IP both on the CPU,
Speaker 12: on the GPU, on the AI accelerator of our NPU,
Speaker 12: and this IP is creating leadership position in other industries.
Speaker 12: Actually execute on our growth and diversification. Out of nowhere,
Speaker 12: we create an automotive business. We're now going into the
Speaker 12: era of AI at the edge with industrial our IoT
Speaker 12: had a great quarter and exceeded expectations because of a
Speaker 12: new personal AI devices like the Meta glasses growing on Android.
Speaker 12: We had outline where we're going to be doing five percent.
Speaker 12: The market will grow on Android five percent per year.
Speaker 12: At our investor day, we're doing in around ten percent.
Speaker 12: So the company is showing its growth and earnings power
Speaker 12: fifteen percent.
Speaker 4: Yes, sir, I'm sorry to interrupt you.
Speaker 3: There's so much I want to get through because I
Speaker 3: understand the calculus on the long term. The thing that
Speaker 3: many were trying to understand is the pull forward effective tariffs.
Speaker 3: Did you see in the data or anything that would
Speaker 3: suggest orders went in in one h or the race
Speaker 3: recent quarter and then won't show up in the second
Speaker 3: half of this year.
Speaker 12: Now, and that's reflected in our in our guide, we
Speaker 12: had a strong guide in the handsets for the next quarter.
Speaker 12: I think we'll remind folks that we don't have flagship
Speaker 12: lines in this quarter and we have seen no pullings.
Speaker 3: If you're listening live on bloom Bag TV and radio.
Speaker 3: We're speaking to the Qualcom CEO, Christiano. I'm on Christiano.
Speaker 3: I don't know if you remember, but you know two
Speaker 3: years ago, almost of the day you and I sat
Speaker 3: on stage and did a demo of an on device
Speaker 3: running of an LM in aeroplane mode. Two years on,
Speaker 3: I'd like to ask if that shows up yet in
Speaker 3: revenues and how that's playing out in the real world.
Speaker 12: Yes, you have to. You have to look on on
Speaker 12: how people are using those devices. And we provide an
Speaker 12: interesting data point with the Samsung galax S twenty five,
Speaker 12: that is to what they're selling right now compared to
Speaker 12: the prior phone. The Galaxy has twenty four. The use
Speaker 12: of Google Gemini is three x triple. So what you're
Speaker 12: starting to see more and more you have people using AI.
Speaker 12: It's a mistake to be talking about is this cloud connected?
Speaker 12: Is this on device connected? Is both? The smartphone is
Speaker 12: the most cloud connected device in the world, and we
Speaker 12: have a lot of processing power in our devices and
Speaker 12: we see that playing out. And in this quarter we
Speaker 12: said something very unique aad We said, first time ever
Speaker 12: we show one billion parameter model running on a glass,
Speaker 12: on the smart glass. So think about, for example, the
Speaker 12: use case of everything you say to the glass, you
Speaker 12: can have an immediate response with the model running local rdes.
Speaker 12: And this is how this is going to evolve.
Speaker 3: As you know, I'm probably one of the few journalists
Speaker 3: on the planet that likes to rip apart things including
Speaker 3: cars and servers. And I've been thinking a lot about
Speaker 3: your automotive business. You've made gains, sales are up, but
Speaker 3: I wanted you to talk through the equation of content
Speaker 3: per vehicle and whether that's the key metric that's going
Speaker 3: to drive growth.
Speaker 12: The most of our growth right now is exactly converting
Speaker 12: our pipeline into revenues. Remember we outline a very large
Speaker 12: pipeline of design wins. As those cars are being launching,
Speaker 12: they're launching, they're getting to sop those started to show
Speaker 12: their revenue. That's what's driving our growth. We're actually not
Speaker 12: our growth has not been driven by the side of
Speaker 12: the market. Is by converting. It's above shared converting the pipeline.
Speaker 12: Having said that, we see content in automotive accelerating.
Speaker 6: More and more.
Speaker 12: Computing is going to the car in the digital cockpit
Speaker 12: for GENAI use cases, a lot of OEMs, adding use
Speaker 12: cases on the dashboard, of the car on the entertainment
Speaker 12: because we're going to be working from the car, get
Speaker 12: entertained from the car, We're going to talk to the car.
Speaker 12: The second thing that we see is content for ADS
Speaker 12: and autonomy, and that is adding a lot of processing content.
Speaker 12: And we have a runway ahead as a lot of
Speaker 12: these software defined vehicles change micro controllers into a central
Speaker 12: computing so we have a roadmap to continue to increase content.
Speaker 3: Christiano I asked this same question earlier in the hour
Speaker 3: to arm CEO Rene has So I'm going to ask
Speaker 3: you the same question out of share objectivity and fairness
Speaker 3: long time partners, when will you bury the hatchet? My
Speaker 3: understanding is investors want to see movement towards that look.
Speaker 12: The most important thing we had a trial. We are
Speaker 12: incredibly happy with the trial outcome. It determined that Qualcom
Speaker 12: is fully licensed for Orion CPUs and will continue to
Speaker 12: be able to build armed compatible CPUs. So, from our perspective,
Speaker 12: as our ability to continue to build incredible products and
Speaker 12: ship to our customers win great shape. And I think
Speaker 12: you should be looking at Qualcom as a company that
Speaker 12: has the ability to provide one of the best armed
Speaker 12: compatible CPUs and We're going to bring that across every
Speaker 12: one of our markets.
Speaker 3: Cristiano, i'mon Qualcom CEO. Thank you for your time here
Speaker 3: on Bloomberg Tech.
Speaker 7: We are outside the New York Stock Exchange and the
Speaker 7: very early back is ol Figmo, which today goes public.
Speaker 7: A Moonhamin of Klima Perkins joins us now and Klima
Speaker 7: Perkins history with Dylan Field, the CEO goes way back,
Speaker 7: and I'm just interested as to your perspective of what
Speaker 7: you saw in him in that series be Rab.
Speaker 6: Yeah.
Speaker 13: So we've been fortunate partners with Dylan Field for the
Speaker 13: last eight years or so, and Dylan always embodied the
Speaker 13: spirit of what we embody at Clina Perkins. We want
Speaker 13: to back founders who'll make history, and Dylan is certainly
Speaker 13: one of those. If we actually look back at our
Speaker 13: investment memo from twenty seventeen, we wrote something like Dylan
Speaker 13: and Evan are special founders and they reference as such,
Speaker 13: and they've built a team around themselves that will help
Speaker 13: them scale.
Speaker 6: And that absolutely still holds today.
Speaker 13: Just as we look at the team that was up
Speaker 13: there ringing the bell with us, and it's quite a
Speaker 13: few of those folks with us back in twenty seventeen immemberon.
Speaker 7: Like, we're looking at a photo as you speak of
Speaker 7: you with Dylan, And what's so interesting is it was
Speaker 7: your first ever check that you wrote a kind of Perkins.
Speaker 7: I mean, I don't know if you could say what
Speaker 7: the valuation was back then, but it was definitely sub
Speaker 7: two hundred million, and now it's worth potentially twenty billion.
Speaker 7: I'm looking at indications, so this stock is going to
Speaker 7: double as it opens. How does that make you feel
Speaker 7: that it's a forty.
Speaker 6: Billion dollar company?
Speaker 13: Yeah, well, I guess nothing surprises me with this company.
Speaker 6: Yeah.
Speaker 13: And just going back to when we first invested, it
Speaker 13: was a bit of this unmistakable love for the product
Speaker 13: that we see here on here at the ny I
Speaker 13: see today if you look around, you see just like
Speaker 13: the Coachella for design that is happening around us or here.
Speaker 13: And that was actually the love that people had for
Speaker 13: the product.
Speaker 6: In twenty seventeen.
Speaker 13: The user base may have been small, the product may
Speaker 13: have been early, but you would walk around cafes around
Speaker 13: San Fantisco with people using Figma to design things and
Speaker 13: digital products even at that time.
Speaker 6: And that really just kind of continues on and I
Speaker 6: had some of this.
Speaker 13: Perspective from early investments in box Entigma, where I saw
Speaker 13: great products built that had this amazing bottomed up enterprise adoption,
Speaker 13: and Figma sort of followed that path as well. And
Speaker 13: what was really just stood out for Figma though, was
Speaker 13: the depth of engagement that Figma had in those days,
Speaker 13: which really spoke to designers were using Pigma daily to
Speaker 13: get their job done, and that sort of like that
Speaker 13: Dow Morow.
Speaker 2: That depth of engagement was incredible.
Speaker 13: Even then, and now it's you know, just expanded multifold
Speaker 13: the depth.
Speaker 7: Of engagement in the stock. I'm just think old that
Speaker 7: there's a seventy five to eighty dollars per share innication
Speaker 7: on the.
Speaker 6: Stock right now. That is even as in the S one.
Speaker 7: Dinner Field is very clear that he's focused on building
Speaker 7: this company. He's not looking at profit, he's looking at
Speaker 7: being thoughtful. But he's investing in M and A and
Speaker 7: he's investing in innovation. Yeah, how important is that investment?
Speaker 7: Self investment growth over profitability? See when he's got gender
Speaker 7: to AI startups coming at him.
Speaker 13: Yeah, AI is probably the biggest thing that's happened to us.
Speaker 13: Maybe in all time, it will have a tremendous societal
Speaker 13: and economic impact on all of us, and we're excited
Speaker 13: about it. And we're excited about it, not just at
Speaker 13: Pigma overall as a kind of persons, we're excited about it.
Speaker 13: But as we think about AI and what the capabilities
Speaker 13: of AI, which is to create more software faster, there's
Speaker 13: an important role that design plays. It is melding both
Speaker 13: the machine intelligence in artificial intelligence with human creativity, and
Speaker 13: that is precisely where Pigma plays, is that we are
Speaker 13: the platform that where products get built and where AI
Speaker 13: products get built. And that's the position that we have.
Speaker 7: Going back to where the stock is indicated, there was
Speaker 7: a very very thorough process as the company went out
Speaker 7: and roadshowed and really a test of demand. But at
Speaker 7: the share price doubles on day one and you have
Speaker 7: an influx of retail investors. You've got the head of
Speaker 7: products at X saying this is going to be the
Speaker 7: mean stock of all mean stocks. Do you want that
Speaker 7: as someone who's going to be I'm assuming holding this
Speaker 7: stock for the longer term?
Speaker 6: Yeah, I think we want people to go and learn
Speaker 6: about Figma.
Speaker 13: If you haven't used it, tried it, go play with
Speaker 13: it and have more people use the products, and we
Speaker 13: have not just one product that are design product. We
Speaker 13: have now eight products, and I think there's something for everyone.
Speaker 13: Even my young children who are just outside here use
Speaker 13: Figma products to design websites, to build products. Yeah, and
Speaker 13: so I think there is a market for a lot
Speaker 13: more people than are tens of millions of users today
Speaker 13: out there. And so if it gives an opportunity for
Speaker 13: folks to get to know Figma products, that's a great
Speaker 13: thing and a global.
Speaker 7: Products because I think what stands out for me reading
Speaker 7: the s one is that eighty percent of users and
Speaker 7: there's thirteen million of them on a monthly active basis,
Speaker 7: are actually outside the United States. What does the global
Speaker 7: nature of this business mean to you?
Speaker 13: Yeah, to your point, eighty percent is international. And it's
Speaker 13: actually also eighty percent of users of Figma are non designers.
Speaker 6: And if you think about it, there are billions.
Speaker 13: Of people consuming digital products today that are designed inside
Speaker 13: of Pigma. If you look at Google Maps, if you're
Speaker 13: pailing a ride throuber or streaming a show on Netflix,
Speaker 13: those are all products that are today being designed inside
Speaker 13: of Pigma. So the global impact and scale is tremendous.
Speaker 13: And ninety five percent of the Fortune five hundred are customers.
Speaker 7: Of Pigma, but you need that to go public in
Speaker 7: this moment. Does the other portfolio companies need to be
Speaker 7: that international to have this level of demand or is
Speaker 7: it just having a growth story.
Speaker 13: I think generally speaking, more software companies go international faster
Speaker 13: as the world gets louder. And that's just been our
Speaker 13: experience alway, My.
Speaker 7: Moone has been great having time with you. Here are
Speaker 7: any stuff exchange my having be thanking so much for
Speaker 7: kinda Perkins fact in the studio.
Speaker 4: Great job of the NSC.
Speaker 3: Carolina coming up on the program with Yoko Yoshioka from
Speaker 3: the Wealth Enhancement Group joins us, and we're going to
Speaker 3: get to Meta and Microsoft earnings because those stocks are
Speaker 3: making big move also discussing the road ahead. We've got
Speaker 3: Apple and Amazon posting earnings after the bell today. It's
Speaker 3: just an astonishing twenty four hours.
Speaker 2: This is Bloomberg Tech, big day for US Tech.
Speaker 3: Let's get back to earnings after Microsoft and Meta showcase
Speaker 3: some records spending on AI sending both of those stocks
Speaker 3: soaring postmarket and now in this session as well. Yoko
Speaker 3: Yoshioka joins US portfolio consulting director at the Wealth Enhancement Group.
Speaker 4: I'm going to start with Meta.
Speaker 3: It wasn't just the ad pricing in the court of
Speaker 3: Gone or talking up all of the AI prowess or
Speaker 3: narrowing the capex range. The thing that surprised many was
Speaker 3: them saying next year twenty twenty six, we will grow capex.
Speaker 4: What did you make of that?
Speaker 14: Or now it tells you that the spending on AI
Speaker 14: really does continue. I mean, I think everybody's been concerned
Speaker 14: that the spending is going to drop off a little bit,
Speaker 14: but from a dollar perspective, MENA talked about how twenty
Speaker 14: twenty six we'll see you substantial increase in capex similar
Speaker 14: to what we saw in twenty twenty five, so very
Speaker 14: strong for the overall infrastructure of AI.
Speaker 3: I think what Meta was trying to explain is how
Speaker 3: AI is improving existing product. So there was strong ad pricing.
Speaker 3: I mentioned that because some of the Chinese advertisers pulled
Speaker 3: back in the period, but they still did well. What
Speaker 3: people still struggle with is the future. How Meta presents
Speaker 3: its AI to the world.
Speaker 4: Did you have that question answered?
Speaker 14: Think with the way Meta is approaching AI, you know,
Speaker 14: I think they're trying to figure out how much they
Speaker 14: want to keep sort of closed and how much they
Speaker 14: want to open it up to the rest of the world.
Speaker 14: And I think that's still up for grabs a little
Speaker 14: bit here, and I think they're going to just keep
Speaker 14: trying to test what's best for them. But for Meta,
Speaker 14: they're really seeing that ROI come through, and I think
Speaker 14: that's what investors like to see.
Speaker 3: Just very quickly, on Microsoft and asule, we've got a
Speaker 3: revenue number for fiscal twenty five, and we've got growth numbers.
Speaker 4: What did you learn?
Speaker 14: Sure, So for Microsoft, you know we continue to see
Speaker 14: again strong numbers, and you know the cloud continues to grow,
Speaker 14: helped by AI. So I think we want to stay
Speaker 14: the course with Microsoft. I don't think you want to
Speaker 14: drop off that train. But we know that concentration continues
Speaker 14: to be an issue within the index, and these names
Speaker 14: just keep getting bigger.
Speaker 4: Off to the bell.
Speaker 3: We have Apple and we have Amazon, which you most
Speaker 3: excited about. I mean Amazon, they'll be read across from Microsoft. Apple,
Speaker 3: my goodness, there are many headwinds in front of that company.
Speaker 14: Sure, I think Apple is the one that I'm probably
Speaker 14: interested in and a little concerned about simply because they've
Speaker 14: been a little bit slower when it comes to AI deployment,
Speaker 14: and you know, just the iPhone hardware upgrade cycle is
Speaker 14: what everybody's been waiting for, and we have yet to
Speaker 14: really see an acceleration there.
Speaker 3: We just showed that the estimate is for Apple to
Speaker 3: swing back to growth in Greater China, so away from
Speaker 3: tariffs the end market there.
Speaker 4: How close do you watch that?
Speaker 2: Sure?
Speaker 14: I think in the short term we're continuing to watch
Speaker 14: that because it's been such a you know, high topic
Speaker 14: of conversation. But I think for us, you know, we
Speaker 14: try to look at the long term and how Apple
Speaker 14: will continue to be, you know, it's a little bit
Speaker 14: more like a consumer staple at this point. With the
Speaker 14: raiser raise of Blade model.
Speaker 3: Okay, I want to bring some news that's broken. In
Speaker 3: the last few minutes. In Vidia has said in an
Speaker 3: emailed statement that it won't allow back door access to
Speaker 3: its systems and that there are no back doors in
Speaker 3: its chips. That was response to a story overnight where
Speaker 3: China's Internet regulator had summoned in video representatives. They were
Speaker 3: concerned based on comments that lawmakers in the US had
Speaker 3: made that they would require in video to have some
Speaker 3: kind of backdoor access. Clearly this China issue with the
Speaker 3: H twenty is not as smoothed out as we thought.
Speaker 4: Just your reaction to that basic story.
Speaker 14: I think in general we are more positive than negative
Speaker 14: on this story, just given that, again we all thought
Speaker 14: that the China market was completely closed for in Vidia
Speaker 14: going forward, and there are still details that need to
Speaker 14: get worked out. But eventually we think it'll get worked
Speaker 14: out and it will be a positive in that in
Speaker 14: Video will be allowed to sell to China.
Speaker 3: Is there a part very quickly, Iko, for China to
Speaker 3: go back to being proportionately the level of revenues for
Speaker 3: in video that it once was.
Speaker 14: I think there is probably a path, it's just the
Speaker 14: details need to get worked out. There still seems like,
Speaker 14: you know, as we build out AI security tends to
Speaker 14: be a big issue and so we're going to have
Speaker 14: to figure that out.
Speaker 3: Yoko Yoshirka from the Wealth Enhancement Group. Great to have
Speaker 3: you back on the program. Thank you very much. Astonishing
Speaker 3: day for US technology. That does it for this edition
Speaker 3: of Bloomberg Tech. But there's a lot to recap, just
Speaker 3: critically important conversations with CEOs, including Figma CEO on their
Speaker 3: IPO day.
Speaker 4: Find that recap on the podcast and you know where
Speaker 4: to find it on the.
Speaker 3: Bloomberg terminal and online on Apple, Spotify and iHeart from
Speaker 3: San Francisco and today from the New York Stock Exchange.
Speaker 4: This is Bloomberg Tech.