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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a

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Speaker 1: lie from coast to coast with Caroline Hide in New

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Speaker 1: York and Ed Lovelow in San Francisco.

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Speaker 2: This is Bloomberg Tech. I'm Tim Seneveek in New York.

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Speaker 3: Coming up.

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Speaker 2: Tech stocks on a roller coaster this morning, but pushing

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Speaker 2: higher now as Iron's deputy Foreign Minister announced the country

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Speaker 2: is drafting a protocol with neighboring Armand to oversee traffic

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Speaker 2: through the Strait of Poor moves. Plus, Tesla posts one

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Speaker 2: of its worst quarters for sales in years, disappointing Wall Street.

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Speaker 2: We're gonna have the details. And NASA's Artemis two successfully launched.

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Speaker 2: We'll discuss what's next for the crew of four astronauts

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Speaker 2: in Earth orbit. Right now, let's take a quick look

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Speaker 2: at markets US tech stocks. They are just whip signing

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Speaker 2: this morning as well. Oil prices are climbing, Bitcoin and

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Speaker 2: really cryptocurrencies across the board taking a hit.

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Speaker 3: Socks moved off their lows this after.

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Speaker 2: He RAN's deputy four and minister announced the country is

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Speaker 2: drafting a protocol with neighboring Oman to really oversee traffic

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Speaker 2: through the Strait of hormuse.

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Speaker 3: This all comes.

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Speaker 2: After a speech from President Trump last night did little

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Speaker 2: to assure investors that the war in the Middle East

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Speaker 2: was coming to a swift resolution.

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Speaker 3: Take a listen.

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Speaker 4: We're going to hit them extremely hard over the next

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Speaker 4: two to three weeks.

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Speaker 3: We're going to bring them back to the Stone Ages

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Speaker 3: where they belong.

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Speaker 2: Let's first go now to Washington, where we find Bloomberg's

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Speaker 2: Washington correspondent, Tyler Kendall. She joins us now, Tyler, it

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Speaker 2: seems like at least the most recent market reaction, notwithstanding,

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Speaker 2: the market really wanted more from President Trump about a

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Speaker 2: swift end to this conflict.

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Speaker 3: Did we get anything new last night?

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Speaker 5: Well, tim President Trump really touted tactical successes so far

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Speaker 5: in the military operation, but he didn't provide new information

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Speaker 5: about a timeline or how the US is going to

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Speaker 5: address some of these strategic setbacks, mainly the Strait of

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Speaker 5: Her moves. Instead, we heard President Trump reiterate what we've

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Speaker 5: heard before, including that pressure on allies to lead the

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Speaker 5: way and reopening the critical waterway as the United Kingdom

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Speaker 5: today convened the foreign ministers of thirty five countries to

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Speaker 5: discuss the issue. But we heard from the French President Macron,

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Speaker 5: for example, saying that he thinks that it is quote unrealistic

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Speaker 5: that military assets would be committed in order to reopen

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Speaker 5: the strait. The prevailing sense seems to be that these

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Speaker 5: assets aren't going to go to help reopen the strait

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Speaker 5: of her moves until there is a cease in the hostilities. Now,

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Speaker 5: President Trump did maintain that the US is getting close

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Speaker 5: to achieving its objectives in this war, but he also

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Speaker 5: previewed that we could soon see an escalation, as he

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Speaker 5: reiterated threats that we could have the US attack Iranian

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Speaker 5: energy infrastrate. Sure that tracks with reporting from Bloomberg News

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Speaker 5: yesterday that the Vice President Jade Vance did convey through

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Speaker 5: intermediaries that there is going to be this increase in

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Speaker 5: threats on Iranian strategic assets until a deal is reached

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Speaker 5: tim At this point, the White House maintains that it

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Speaker 5: is still negotiating with Iran, that these negotiations are ongoing,

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Speaker 5: though at least publicly, Iran has denied that it's engaged

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Speaker 5: in formal talks with the US.

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Speaker 2: Bloomberg's Tyler Kendall at the White House. Thanks so much, Tyler. Well,

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Speaker 2: let's take a look at the market reaction now. Bloomberg

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Speaker 2: Tech equity reporter Ryan Ostelica joins us with more. Ryan,

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Speaker 2: the Nasdaq one hundred was down more than two percent

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Speaker 2: earlier in the session, down only about three four tenths

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Speaker 2: of one percent right now. There was a swift turnaround

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Speaker 2: just in the last half hour. So what can you

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Speaker 2: tell us about this whipsode market?

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Speaker 3: Well, what I.

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Speaker 6: Would say is that this really shows how much stocks,

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Speaker 6: especially tech stocks, had been so highly correlated to any

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Speaker 6: of the latest headlines that come out surrounding geopolitical tensions

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Speaker 6: with Iran. There's still a lot of uncertainty right now,

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Speaker 6: and just having this geopolitical issue does augment some of

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Speaker 6: the other concerns people have right now about tech valuations,

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Speaker 6: about the state of AI, about the outlook for AI spending,

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Speaker 6: AI disruption. All those things is what investors were focused

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Speaker 6: on prior to the war, and now you have this

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Speaker 6: new element that's coming in that is really overshadowing everything else.

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Speaker 2: Yeah, I think the question a lot of investors have

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Speaker 2: is like how long does this overshadow those fundamental questions

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Speaker 2: that you mentioned, Ryan, Because there is a connection when

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Speaker 2: it comes to higher energy prices and then well, perhaps

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Speaker 2: higher inflation for a longer period of time and then

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Speaker 2: valuations for these tech firms.

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Speaker 7: Yeah.

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Speaker 6: Absolutely, And the longer we have the sort of uncertainty,

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Speaker 6: the longer the strait is closed, the more questions we

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Speaker 6: have about that. The harder it is to sort of

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Speaker 6: suss out what valuation should be, what fundamentals really look

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Speaker 6: like right now, especially if you're looking at sort of

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Speaker 6: the hardware space and chip makers which count helium as

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Speaker 6: a major component that is built into their products, if

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Speaker 6: you have uncertainty about supply for that, all these other

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Speaker 6: kinds of questions just right now, just like I said,

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Speaker 6: add to the growing level of uncertainty about what the

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Speaker 6: outlook is overall.

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Speaker 2: Love that we're talking helium right now. Bloomberg's Ryan Thestelica

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Speaker 2: always great with an update.

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Speaker 3: Thanks, Ryan, appreciate it well. Coming out.

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Speaker 2: Tesla deliveries they disappoint and Tesla shares are lower. More

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Speaker 2: on the evn maker next. It's Tesla down three point

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Speaker 2: seven percent right now. This is Bloomberg Tech. Shares of

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Speaker 2: Tesla under pressure this morning, down about three point seven percent.

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Speaker 2: The ev maker posting one of its worst sales quarters

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Speaker 2: in years, delivering three hundred and fifty eight thousand vehicles.

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Speaker 2: Wall Street had anticipated three hundred and seventy two thousand.

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Speaker 2: For more, we go back to Bloomberg's Global Business editor,

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Speaker 2: Craig Trudell with the details. Craig, you did a great

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Speaker 2: job setting us up for this print yesterday when we

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Speaker 2: spoke to you and we talked about how the idea

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Speaker 2: that even though a lot of analysts value this company

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Speaker 2: not necessarily as a company that sells cars, cars are

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Speaker 2: still really important. So a disappointing quarter when it comes

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Speaker 2: to or disappointing month when it comes to sales, that

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Speaker 2: still has an effect on Tesla's business, even if it

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Speaker 2: has big ambitions beyond autos.

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Speaker 8: Yeah, I mean, this is still what pays the bills.

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Speaker 3: Right.

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Speaker 8: Everyone is excited about robotaxis, they're excited about humanoid robots,

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Speaker 8: but those are still really concepts, and we don't have

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Speaker 8: a robot actually that Tesla is selling, and it doesn't

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Speaker 8: sound like they're particularly close. If you're following musks, you know,

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Speaker 8: sort of daily missives on X, you know, the expectations

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Speaker 8: here weren't all that high and they were trending lower

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Speaker 8: and so to see them miss by a fairly substantial

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Speaker 8: margin is a big disappointment. And when you compare what

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Speaker 8: some of the peak quarters have been for Tesla, where

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Speaker 8: they've come close a couple of times to half a

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Speaker 8: million vehicles in a quarter, this is a a really

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Speaker 8: big letdown relative to those sort of loftier levels.

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Speaker 2: The company facing a lot of headwinds here in the

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Speaker 2: US regarding EV tax credits and policy changes and not

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Speaker 2: excitement from this White House when it comes to EVS,

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Speaker 2: but also challenges outside the US where Elon Musk is

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Speaker 2: not viewed necessarily favorably, and with growing competition from China.

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Speaker 2: How does Tesla turn itself around before it gets to

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Speaker 2: that point where it doesn't rely on autos to generate cash.

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Speaker 8: Yeah, it's a really good question. I mean, I think

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Speaker 8: there is some hope that this cyber cab that is

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Speaker 8: supposed to start production this quarter will be helpful and

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Speaker 8: that it at least is a new product. I think

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Speaker 8: this is a company that has a bit of a

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Speaker 8: tired lineup. They've changed over the Model three and Model Y,

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Speaker 8: but you know, they're not all that different from the

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Speaker 8: way they look to when they first came out, and

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Speaker 8: so you know, this two door, smaller car could be

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Speaker 8: interesting to people, but is it actually ready to be

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Speaker 8: put on roads without a steering wheel or pedals. I

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Speaker 8: think a lot of regulators are going to have some

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Speaker 8: doubts given the challenges that the company has had with

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Speaker 8: what it markets is full self driving, and so you

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Speaker 8: know there there are again all of these hopes as

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Speaker 8: well that the humanoid robot business has a lot of promise.

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Speaker 8: But this is still very much a case of, you know,

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Speaker 8: approve it in terms of whether or not that's actually

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Speaker 8: going to be a business that analysts can sort of

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Speaker 8: wrap their heads around anytime soon.

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Speaker 2: Bloomberg's Craig Drudel from London. Craig, thanks so much. We

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Speaker 2: let's say on Tesla. Ben Callo is a Bird senior

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Speaker 2: research analyst. He joins us now for more. Ben, you've

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Speaker 2: got an outperformed rating on the stock. A new price

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Speaker 2: target though five and thirty eight dollars per share. That's

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Speaker 2: down from five hundred and forty eight dollars per share.

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Speaker 2: That's a far cry from where Tesla is right now

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Speaker 2: at three sixty seven. How does it get there in

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Speaker 2: the next twelve months?

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Speaker 4: Well, thanks for having me on. It was a great

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Speaker 4: commentary that you guys just had about you know, the

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Speaker 4: vehicle miss and numbers did come in. I think more

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Speaker 4: importantly on the miss was on the energy side of

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Speaker 4: the business. And as Craig said, you know what pays

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Speaker 4: the bills is auto sales and in battery sales for energy,

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Speaker 4: and so that was disappointing, more disappointed than the automiss.

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Speaker 4: And with cap X and their capital expenditures, with all

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Speaker 4: the investment they're doing for Robotaxi, for Optimists and for

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Speaker 4: the cyber cab as well as doing data center and

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Speaker 4: the semi truck, they're gonna spend twenty billion dollars this

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Speaker 4: year and so they're gonna have to pay for it.

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Speaker 4: And the auto business and the energy business is where

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Speaker 4: the cast comes from. You know, they have forty billion

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Speaker 4: plusant casts are probably gonna be a two billion dollar

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Speaker 4: casts draw down this quarter. And you know, as showed

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Speaker 4: me story, you know, I agree with that. There's also

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Speaker 4: so much going on right now with SpaceX, with x

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Speaker 4: AIH and you know the possibility that they're going to

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Speaker 4: come together at some point, and so there's a lot

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Speaker 4: a lot we can talk about.

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Speaker 2: Yeah, let's still let's talk about that that possibility that

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Speaker 2: these two companies do come together. Let's say space X

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Speaker 2: goes public in June, so we're gonna have to sort of,

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Speaker 2: you know, play this out a little bit. We don't

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Speaker 2: know exactly what's going to happen. If that does happen,

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Speaker 2: then do you think that Tesla will become part of

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Speaker 2: that Elon Musk company.

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Speaker 4: I think that it's better if they're both public companies

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Speaker 4: to merge them together, just from an accounting standpoint, from

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Speaker 4: both being public and having valuations. But they've already started

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Speaker 4: going way back when you know, there are some shared

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Speaker 4: employees between SpaceX and Tesla, but now you know you're

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Speaker 4: so to do like the Tarra fab You're you're doing this,

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Speaker 4: you know, macro hard project, and so you know, they're

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Speaker 4: linking more and more together. And I think, you know,

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Speaker 4: one big thing with Elon wanting to have ownership over

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Speaker 4: twenty five percent or you know, some kind of control

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Speaker 4: that he said in the past with Tesla, that that

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Speaker 4: would also help him because he has a bigger share

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Speaker 4: of space X and x AI, that that would also

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Speaker 4: get him to that point as well. And it just

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Speaker 4: makes sense from a scale perspective too, because this is

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Speaker 4: a big arms race that we're in for AI and

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Speaker 4: you know, speed to market capital very important right now,

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Speaker 4: and so he knows that and he's you know, they're

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Speaker 4: doing everything they can as fast as they can to

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Speaker 4: you know, to do that race.

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Speaker 2: Ben Craig also mentioned do you have a cyber cabin

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Speaker 2: that could bring some excitement to people. But I'm also

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Speaker 2: wondering about other parts of the portfolio and what's in

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Speaker 2: in the pipeline, namely maybe a new SUV that has

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Speaker 2: been banded about a little bit. Is that something that

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Speaker 2: moves the needle and what can you tell us about

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Speaker 2: timeline there and what that would do to the top

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Speaker 2: line and the bottom line for the company.

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Speaker 4: Sure, well, you know one thing that that Crek said,

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Speaker 4: and Krek said a lot of great things about just

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Speaker 4: kind of like a tired brand brand of models and

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Speaker 4: the you know them all why refresh you know, if

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Speaker 4: you write in it, it's it's a lot better than

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Speaker 4: the original mall y and so they're not big changes.

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Speaker 4: And the fact that they you know, they have just

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Speaker 4: you know them all y in them all three really

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Speaker 4: the main sellers U versus other auto OEMs. They're more

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Speaker 4: profitable on that and they sell uh, you know, They

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Speaker 4: sell a lot of them because people like them. They're

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Speaker 4: they're very good cars, and so it's good to expand

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Speaker 4: if they have sug you know, like, look I have

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Speaker 4: I have six year old twins. I would like to

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Speaker 4: have a sud as well. You know, I think that,

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Speaker 4: you know, the real growth is the winning this Robotaxi war.

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Speaker 4: And I don't know if it's a winner or take hall.

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Speaker 4: I don't think so. I think that. But you know,

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Speaker 4: Tesla has uh you know, yeah, the data, they have

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Speaker 4: a scale, they have the service centers and uh and

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Speaker 4: the strategy. It's going to be hard for others compete

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Speaker 4: at scale.

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Speaker 2: Ben Callo Abart. Ben, always good to check in with you.

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Speaker 2: Appreciate you taking the time and joining us this morning

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Speaker 2: on Bloomberg Tech. Well coming up, NASA's Artemis two successfully launched.

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Speaker 2: Now the cruise attention turns to firing off towards the Moon.

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Speaker 2: Details on that with Ed Ludlow. Next, This is Bloomberg Tech.

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Speaker 2: NASA's Arguments. Two astronauts are in Earth or a bit

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Speaker 2: and they're prepping for the next crucial step in their

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Speaker 2: historic journey to the Moon. They're going to fire the

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Speaker 2: engines tonight to send them toward lunar orbit with us

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Speaker 2: now as Bloomberg Tech's own ed Ludlow and just give

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Speaker 2: us the latest when it comes to the mission status

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Speaker 2: and what happens before tonight's big move.

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Speaker 9: Yeah, so the crew inside the Orion spacecraft are essentially

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Speaker 9: in safe orbit. They conducted a burn this morning that

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Speaker 9: took them from lower orbit to higher Earth orbit and

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Speaker 9: in a sort of elliptical fashion are going around the

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Speaker 9: Earth into about seven or eight pm E some time.

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Speaker 9: That's when the mission directors and flight directors have to

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Speaker 9: decide if they are a go for the trans lunar injection,

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Speaker 9: the burn that you described, which propels Oryan the two

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Speaker 9: hundred and fifty thousand miles or so to the far

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Speaker 9: side or dark side.

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Speaker 3: Of the Moon.

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Speaker 9: And that's why we're all here. That's the big part,

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Speaker 9: and so there is risk, but they are testing systems

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Speaker 9: at some point that the crew has to sleep. But

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Speaker 9: that's what we're tracking toward.

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Speaker 2: The dark side of the Moon, the far side of

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Speaker 2: the Moon.

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Speaker 9: What's back there, Yeah, I mean the point of the

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Speaker 9: mission in part is observation of what's on the surface

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Speaker 9: of the far side of the Moon. Right, This is

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Speaker 9: a resources story a water minerals oxygen. The value of

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Speaker 9: the Moon is in part strategic from that resources standpoint.

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Speaker 9: There's also an important moment where the Orion capsule and

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Speaker 9: spacecraft is going to lose contact with Houston and Control.

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Speaker 9: And you're all thinking watching Bloombotech, what the crew they're

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Speaker 9: going to lose contact on the fast Yeah, obviously the

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Speaker 9: Moon's in the way, but that is also important, and

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Speaker 9: they planned for that and prepared for that, and you

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Speaker 9: know it's going to be a really significant moment when,

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Speaker 9: through what's called a free return trajectory, the Moon's gravitational

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Speaker 9: field and Earth's gravitational pool swings the Irion spacecraft back

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Speaker 9: around in a figure eight and send it back to Earth.

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Speaker 9: So there's risk here, but it is record breaking in

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Speaker 9: terms of what they're trying to achieve.

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Speaker 2: Well, we're talking about space ed. We've got to ask

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Speaker 2: you a different question about orbit, and that has to

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Speaker 2: do with shares of Global Star. They're rallying today of

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Speaker 2: about nine percent. This after we learned that Amazon is

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Speaker 2: in talks through a buyout. Now, Apple loans about twenty

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Speaker 2: percent of this company.

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Speaker 3: What would this do for Amazon?

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Speaker 2: And it's you know, quote unquote competition for providing satellite service,

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Speaker 2: web based satellite service or satellite web based service for yeah,

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Speaker 2: you know, when really competing with SpaceX.

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Speaker 9: It's interesting because the financial terms and what they're kind

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Speaker 9: of agreeing to buy isn't disclosed. But what global Star

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Speaker 9: has is very valuable license spectrum. You know that having

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Speaker 9: consolation in orbit is not really about the hardware that's

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Speaker 9: up there, but the spectrum that it occupies. That's part one.

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Speaker 9: The other part is that it's a kind of go

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Speaker 9: to market story right where global Star is authorized and

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Speaker 9: regulated in markets around the world. It has ground infrastructure

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Speaker 9: corresponding to the consolation based infrastructure that would help Amazon

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Speaker 9: with its own space based internet ambitions get into those markets,

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Speaker 9: even if the satellites that are up there are about

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Speaker 9: sell connectivity in places where a terrestrial cell signal doesn't reach.

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Speaker 9: That's all a big part of it. And you're right,

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Speaker 9: the history of globustaris of right now, that's how you

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Speaker 9: get emergency messages on your iPhone or make emergency calls.

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Speaker 9: But the bigger picture is just access to the space

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Speaker 9: that's up there.

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Speaker 2: Bloomberg's Ed Ludlow live at Kennedy Space Center in Florida.

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Speaker 3: Thanks Ed well.

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Speaker 2: If intech company Chime is launching new checking accounts that

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Speaker 2: offer cash back and other benefits as it steps up

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Speaker 2: its challenge to traditional banks. Let's talk through it with

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Speaker 2: Chime CEO Chris and Britt Chris.

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Speaker 3: So called Chime Prime.

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Speaker 2: It seems like a departure from the core Chime product

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Speaker 2: that appeals to people who don't necessarily care about Priority

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Speaker 2: Pass or luxury hotels.

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Speaker 3: Explain the strategic shift, Well, we.

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Speaker 10: Think it's a natural evolution for our company. And by

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Speaker 10: the way, thanks for having me today. Tim, It's great

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Speaker 10: to see you. We've already been come of age as

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Speaker 10: America's choice for banking, and you've seen that in the

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Speaker 10: in the data, JD Power for multiple quarters in a

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Speaker 10: row now have reported that Chimes opened up more checking

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Speaker 10: accounts than any brand in America, including some of these

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Speaker 10: the biggest incumbent banks in the world. So we think

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Speaker 10: that the addition of Chime Prime is a natural addition

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Speaker 10: for us. We've always done a really good job of

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Speaker 10: cultivating primary direct deposit relationships with our members, people that

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Speaker 10: are getting direct deposit and using Chime for their everyday transactions.

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Speaker 10: What we realized is that we weren't doing enough to

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Speaker 10: reward members who either had the capacity to or were

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Speaker 10: already awarding us with large amounts of deposits. So with

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Speaker 10: Chime Prime, if you give Chime a three thousand dollars

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Speaker 10: total direct deposit over the course of a month, we

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Speaker 10: unlock five percent cash back on the Chime Card, which

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Speaker 10: is a secured credit card, and you can choose the

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Speaker 10: category that you get the five percent cash back in,

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Speaker 10: so it could be groceries, restaurants, your monthly bills, you

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Speaker 10: name it.

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Speaker 6: But it's pretty powerful.

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Speaker 10: I mean, if you think about a consumer who spends

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Speaker 10: say fifteen hundred dollars a month on groceries, we're talking

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Speaker 10: about seventy five dollars of cash back in the month

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Speaker 10: with this new product. So we're pretty excited about it

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Speaker 10: and we think it actually is a natural extension of

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Speaker 10: our products.

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Speaker 2: Suite Well, Chris, one of the reasons we like talking

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Speaker 2: to you is because you have this great real time

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Speaker 2: view of what the consumer is doing and how the

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Speaker 2: consumer is feeling. And I'm wondering, with higher energy prices

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Speaker 2: and with savings not really there for a lot of

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Speaker 2: Americans right now, how do they weather the last month?

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Speaker 10: Well, as we've reported the past few quarters, there's been

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Speaker 10: certainly a lot of understandably uncertainty and some would say

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Speaker 10: some doom and gloom as it relates to the state

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Speaker 10: of the consumer. But as we've reported the past few quarters,

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Speaker 10: we're seeing a steady, resilient consumer that continues to increase

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Speaker 10: their spend across the categories of both discretionary and non

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Speaker 10: discretionary spend. We see saving account balances you to stay

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Speaker 10: at a high rate, and we haven't seen any uptick

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Speaker 10: in unemployment, so I think across all of those areas

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Speaker 10: we see a healthy consumer. I would note that from

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Speaker 10: February to March, we did see not surprisingly, a pretty

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Speaker 10: significant uptick in the amount that consumers are spending on

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Speaker 10: their fuel purchases, so up over twenty five percent actually

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Speaker 10: month over months, So so yeah, that is typically that's

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Speaker 10: definitely something that consumers are feeling a real pinsion, real quick.

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Speaker 2: What were they spending less on as a result of

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Speaker 2: spending more on fuel.

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Speaker 10: Well, we have not seen any sort of downdraft in

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Speaker 10: spend at all, so we're continuing to see an uplift

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Speaker 10: across you know, all the all the regular sort of

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Speaker 10: every day category I've about seventy percent of our spend

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Speaker 10: is on nondiscretionary So that's one of the you know,

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Speaker 10: sort of really positive things about our business models that

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Speaker 10: whether the economy is sort of up or down, people

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Speaker 10: are still buying groceries and paying their monthly bills and

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Speaker 10: paying their mobile bill and.

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Speaker 11: All those sorts of things.

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Speaker 10: So nothing's changed on that front.

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Speaker 2: I think it's fair to say that a lot of

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Speaker 2: ceo see this environment as as a much friendlier regulatory

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Speaker 2: environment in different industries. Why would you a non bank

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Speaker 2: still believe that not pursuing a bank charter is the

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Speaker 2: best move in this environment.

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Speaker 10: Well, you know, there's no question that the regulatory environment

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Speaker 10: has loosened up a bit, and you can see it

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Speaker 10: in all the quite a few number of applications to

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Speaker 10: become a bank a charter. We've certainly, you know, that's

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Speaker 10: something that we evaluate every year and it's certainly something

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Speaker 10: that an option that's on the table for us. But

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Speaker 10: you know, historically, when we've looked at how we've constructed

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Speaker 10: this business, we think it's really been a win win

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Speaker 10: for Chime and our community bank partners that hold the

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Speaker 10: deposits of our members in these FDIC insured accounts. It

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Speaker 10: gives us the benefits of being a fintech that can

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Speaker 10: move fast and innovate and really focus on our member

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Speaker 10: needs and have our bank uh, you know, provide our

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Speaker 10: members with all the security and protections of having your

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Speaker 10: money safe in.

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Speaker 3: A bank account.

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Speaker 4: You know.

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Speaker 10: Certainly, as the market changes, we will we will reevaluate that,

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Speaker 10: but we don't have any plans to announce in the

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Speaker 10: short term on that front.

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Speaker 2: Chris, always good to see you. I'm CEO Chris Britt,

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Speaker 2: Thanks so much well. Coming up next to the conversation with

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Speaker 2: Stephanie Valdez Streati of Cox Automotive as Tesla posts one

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Speaker 2: of its worst sales quarters in years. That's next on

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Speaker 2: Bloomberg Tech. Welcome back to Bloomberg Tech. I'm Tim Steneveek

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Speaker 2: in New York. Let's take a look at markets with

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Speaker 2: Bloomberg Stocks reporter Natalia Cuney Javich. Here in New York, Natalia,

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Speaker 2: the Nasdaq one hundred is down more than two percent

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Speaker 2: earlier in the session. It's kind of flat right now.

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Speaker 2: There was about an hour ago some news about potentially

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Speaker 2: some discussions with Oman and Iran about the strait of

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Speaker 2: hom moves. Is that with driving markets right now?

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Speaker 12: It looks like yes. So we do see that major

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Speaker 12: indexes are basically flat right now, but it's still a

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Speaker 12: pretty defensive move. We look at the sectors right now,

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Speaker 12: real estate, utility, is consumer stables, so these are sectors

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Speaker 12: that are moving higher today. So we got some headlines,

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Speaker 12: yes from Iran that is working on a draft of

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Speaker 12: a protocol with amount to oversee the strait of Hormos. However,

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Speaker 12: when we look at the stock market, of course, we

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Speaker 12: do see that the playbook is still really familiar. We

440
00:23:33,240 --> 00:23:35,760
Speaker 12: see that stock since the beginning of the war in Iran,

441
00:23:36,119 --> 00:23:39,040
Speaker 12: stocks are flat or up from Monday to Wednesday, and

442
00:23:39,080 --> 00:23:42,560
Speaker 12: they are down on average from Thursday to Friday by

443
00:23:42,600 --> 00:23:46,960
Speaker 12: about nine percent. It tells us that investors don't want

444
00:23:47,000 --> 00:23:49,560
Speaker 12: to hold positions going into a weekend because a lot

445
00:23:49,560 --> 00:23:52,320
Speaker 12: can happen. And when I spoke with many traders or

446
00:23:52,359 --> 00:23:55,880
Speaker 12: analysts like what exactly you guys are doing, they said, yes,

447
00:23:56,160 --> 00:23:59,679
Speaker 12: get rid of positions, go along and on energy or

448
00:24:00,080 --> 00:24:04,480
Speaker 12: you know oil gas or energy related commodities related stocks,

449
00:24:04,520 --> 00:24:07,600
Speaker 12: and of course sell economically sensitive.

450
00:24:07,200 --> 00:24:09,919
Speaker 2: Stocks, especially out of a three day weekend where the

451
00:24:09,960 --> 00:24:12,160
Speaker 2: equity market isn't even open tomorrow on a day where

452
00:24:12,160 --> 00:24:14,680
Speaker 2: we are getting some job numbers for the.

453
00:24:14,640 --> 00:24:16,320
Speaker 3: Month of March. You mentioned commodities.

454
00:24:16,359 --> 00:24:18,399
Speaker 2: Let's talk oil real quick, because it does seem like

455
00:24:18,400 --> 00:24:22,320
Speaker 2: the equity market is buying this, but it doesn't seem

456
00:24:22,320 --> 00:24:25,480
Speaker 2: like the oil market is buying this. With brands still

457
00:24:25,560 --> 00:24:30,280
Speaker 2: up six percent, and look at that WTI up ten percent, yes.

458
00:24:30,080 --> 00:24:32,800
Speaker 12: Ten percent, So in terms of headlines, yes, Iran is

459
00:24:32,880 --> 00:24:37,080
Speaker 12: working with Oman in terms of a producol to oversee

460
00:24:37,080 --> 00:24:41,919
Speaker 12: the strait of Formoso. Deputy Foreign Ministers said that vessel

461
00:24:42,000 --> 00:24:45,200
Speaker 12: traffic through the state should take place under Iran and

462
00:24:45,240 --> 00:24:48,800
Speaker 12: Oman supervision and coordination. But of course we also look

463
00:24:48,840 --> 00:24:51,879
Speaker 12: at all global supplies in terms of oil and commodities.

464
00:24:51,920 --> 00:24:55,000
Speaker 12: So for example, when we checked inventories in Egypt, which

465
00:24:55,040 --> 00:24:58,800
Speaker 12: is also super important in terms of deliveries of Saudi Arabia,

466
00:24:58,960 --> 00:25:03,080
Speaker 12: CRUIT two Europe, and now we see that those inventories

467
00:25:03,119 --> 00:25:05,720
Speaker 12: are down by about one million barrels per day in

468
00:25:05,760 --> 00:25:08,920
Speaker 12: the past two weeks. Just to compare. This is their

469
00:25:09,320 --> 00:25:12,960
Speaker 12: equivalent of the growth in global world demand that we

470
00:25:13,119 --> 00:25:15,160
Speaker 12: projected before the war in Iran began.

471
00:25:15,520 --> 00:25:19,439
Speaker 2: Okay, Natalia kuney Javich of Bloomberg News with a markets

472
00:25:19,480 --> 00:25:22,719
Speaker 2: and oil update. Let's get to another big mover today,

473
00:25:22,920 --> 00:25:26,600
Speaker 2: Tesla shares under pressure, down more than four percent, this

474
00:25:26,680 --> 00:25:28,760
Speaker 2: after the even maker posted one of its worst sales

475
00:25:28,840 --> 00:25:32,879
Speaker 2: quarters in years, missing Wall Street expectations. Stephanie Valdez Streti

476
00:25:32,920 --> 00:25:35,800
Speaker 2: as director of industry Insights for Cox Automotive, and she

477
00:25:35,880 --> 00:25:36,280
Speaker 2: joins us.

478
00:25:36,280 --> 00:25:37,560
Speaker 3: Now, Stephanie, I want to.

479
00:25:37,520 --> 00:25:40,360
Speaker 2: Start off where we left off with Natalia, and that's

480
00:25:40,400 --> 00:25:45,679
Speaker 2: with higher energy prices. Do you see this increase in

481
00:25:45,800 --> 00:25:49,800
Speaker 2: energy prices, the substantial increase, the more that Americans are

482
00:25:49,800 --> 00:25:51,919
Speaker 2: spending and the more that people around the world are

483
00:25:51,920 --> 00:25:54,720
Speaker 2: spending on oil, as something that can actually push people

484
00:25:54,760 --> 00:25:55,760
Speaker 2: to buy more Teslas?

485
00:25:57,320 --> 00:26:00,399
Speaker 11: Yeah, I think definitely, like it's causing the conversation to

486
00:26:00,440 --> 00:26:03,760
Speaker 11: come up, But I don't think that consumers will immediately

487
00:26:03,800 --> 00:26:06,000
Speaker 11: go out and buy an EV. I think what it

488
00:26:06,040 --> 00:26:08,879
Speaker 11: does do is have them start, if they earn the

489
00:26:08,920 --> 00:26:11,680
Speaker 11: market for a vehicle, start to consider more fuel full

490
00:26:11,680 --> 00:26:15,320
Speaker 11: efficient vehicles, which an EV is part of that conversation.

491
00:26:15,440 --> 00:26:18,159
Speaker 11: But I think these high gas prices would have to

492
00:26:18,200 --> 00:26:22,320
Speaker 11: stay prolonged for consumer behavior to really change, but definitely

493
00:26:22,480 --> 00:26:23,600
Speaker 11: impacting consideration.

494
00:26:23,800 --> 00:26:26,080
Speaker 3: How long and how high.

495
00:26:26,160 --> 00:26:28,160
Speaker 11: I think, like you know, six months, two a year.

496
00:26:28,320 --> 00:26:30,800
Speaker 11: I think I think consumers are just kind of waiting now.

497
00:26:31,320 --> 00:26:33,280
Speaker 11: But I want to like take a step back and

498
00:26:33,359 --> 00:26:36,879
Speaker 11: just look at the broader economy. I think consumer you know,

499
00:26:36,920 --> 00:26:40,959
Speaker 11: as gas prices go up, consumer sentiment goes down, and

500
00:26:41,040 --> 00:26:44,000
Speaker 11: that leads to consumer spending going down, especially for a

501
00:26:44,119 --> 00:26:47,359
Speaker 11: high ticket vehicle like a car. So I think consumers

502
00:26:47,359 --> 00:26:49,640
Speaker 11: are just going to wait in general to buy a vehicle,

503
00:26:50,280 --> 00:26:52,560
Speaker 11: whether it's an EV or an ICE, just because of

504
00:26:52,600 --> 00:26:54,080
Speaker 11: the current economic situation.

505
00:26:54,240 --> 00:26:57,280
Speaker 2: Yeah, I mean, especially such a big purchase like an auto,

506
00:26:57,320 --> 00:26:59,920
Speaker 2: whether it's an electric car or an internal combustion one.

507
00:27:00,280 --> 00:27:02,120
Speaker 2: I want to go back to Tesla in this this

508
00:27:02,160 --> 00:27:06,240
Speaker 2: miss when it comes to delivery, analysts, you got it wrong,

509
00:27:06,280 --> 00:27:09,919
Speaker 2: but they weren't expecting a great quarter. Where's the bigger,

510
00:27:10,040 --> 00:27:13,560
Speaker 2: biggest opportunity for Tesla right now? Is it in the

511
00:27:13,680 --> 00:27:16,440
Speaker 2: US or is it outside of the US, where I

512
00:27:16,440 --> 00:27:19,720
Speaker 2: think many analysts would argue it faces even more competition,

513
00:27:20,280 --> 00:27:21,320
Speaker 2: particularly from China.

514
00:27:22,240 --> 00:27:28,840
Speaker 13: Yeah, I think in the US to basically the model Y,

515
00:27:28,960 --> 00:27:32,320
Speaker 13: Model three right, that's the mature vehicles, no fresh product.

516
00:27:32,359 --> 00:27:34,879
Speaker 11: They have a lot more competition in the US and

517
00:27:34,920 --> 00:27:37,760
Speaker 11: then in addition, right the regulatory changes, the i RA

518
00:27:37,960 --> 00:27:42,440
Speaker 11: is gone, and so that's really impeding sales across the

519
00:27:42,520 --> 00:27:46,359
Speaker 11: landscape for evs. And then you mentioned globally right China.

520
00:27:46,440 --> 00:27:49,480
Speaker 11: I think that's a challenger to everyone, not only Tesla.

521
00:27:49,920 --> 00:27:52,399
Speaker 11: So I think for Tesla it's really I think for

522
00:27:52,440 --> 00:27:57,200
Speaker 11: their product, it's like repositioning it really focusing on affordability,

523
00:27:58,000 --> 00:28:01,880
Speaker 11: product freshness, and I think what they're infrastructure and battery tech.

524
00:28:01,960 --> 00:28:04,879
Speaker 11: I think highlighting some of that and really having targeting,

525
00:28:05,040 --> 00:28:08,120
Speaker 11: targeted marketing for that I think might help a little bit.

526
00:28:08,600 --> 00:28:09,760
Speaker 2: You know, if you think about it just from the

527
00:28:09,760 --> 00:28:11,639
Speaker 2: perspective of outside the US and in some of the

528
00:28:11,680 --> 00:28:14,120
Speaker 2: European countries and in some of the Asian countries of course,

529
00:28:14,160 --> 00:28:17,280
Speaker 2: where it does face competition from what many analysts would

530
00:28:17,280 --> 00:28:20,560
Speaker 2: say are better and even less expensive cars, from the

531
00:28:20,640 --> 00:28:24,000
Speaker 2: likes of Bid and show me. How does Tesla position

532
00:28:24,040 --> 00:28:25,840
Speaker 2: itself against those competitors.

533
00:28:26,920 --> 00:28:33,000
Speaker 11: I think it needs to continue to have vertical integration.

534
00:28:33,520 --> 00:28:35,240
Speaker 11: I think they need to continue to do that. But

535
00:28:35,280 --> 00:28:36,640
Speaker 11: I think at the end of the day, if they

536
00:28:36,720 --> 00:28:40,720
Speaker 11: want to continue to get maintained a fendo market share

537
00:28:40,720 --> 00:28:44,800
Speaker 11: within the auto sector, they need new products and customers

538
00:28:44,880 --> 00:28:46,640
Speaker 11: like Muna's right, and they haven't had any of that.

539
00:28:47,040 --> 00:28:49,840
Speaker 11: The cyberchucte is really niche, and so I think for

540
00:28:49,920 --> 00:28:52,640
Speaker 11: them to compete globally, having new product is key.

541
00:28:53,360 --> 00:28:56,560
Speaker 2: What kind of new product, I mean, Craig Trudell covers

542
00:28:56,600 --> 00:29:00,600
Speaker 2: autos globally for Bloomberg, talked about the cybercab, but what else.

543
00:29:01,720 --> 00:29:04,520
Speaker 11: I think more affordable, right, Affordability is the key thing,

544
00:29:04,600 --> 00:29:07,720
Speaker 11: whether it's US globally and so having an affordable EV

545
00:29:07,840 --> 00:29:10,400
Speaker 11: that they had talked about a couple of years ago

546
00:29:10,440 --> 00:29:12,920
Speaker 11: but never came to fruition. So I think having an

547
00:29:12,920 --> 00:29:16,440
Speaker 11: affordable option for consumers. I mean that's the biggest barrier

548
00:29:16,520 --> 00:29:19,440
Speaker 11: right now for EV adoption is the price points there.

549
00:29:19,600 --> 00:29:22,800
Speaker 11: I think sixty five percent of product in the US

550
00:29:22,840 --> 00:29:25,760
Speaker 11: are above sixty five thousand dollars. That really pushes out

551
00:29:25,840 --> 00:29:28,280
Speaker 11: many households. So I think for Tesla, if they can

552
00:29:28,360 --> 00:29:31,080
Speaker 11: have an affordable EV launch, that could really help.

553
00:29:31,320 --> 00:29:33,160
Speaker 2: But the challenge with that is, at least here in

554
00:29:33,200 --> 00:29:35,360
Speaker 2: the US, you don't necessarily have the credits that that

555
00:29:35,440 --> 00:29:37,680
Speaker 2: Tesla was used to and Tesla investors were used to

556
00:29:37,720 --> 00:29:40,040
Speaker 2: for years. Because of the lack of support from this

557
00:29:40,120 --> 00:29:43,800
Speaker 2: current administration for evs, can Testla get prices down without

558
00:29:43,800 --> 00:29:44,640
Speaker 2: government intervention.

559
00:29:45,960 --> 00:29:48,240
Speaker 11: I mean, you know, usually it's the battery, right, The

560
00:29:48,280 --> 00:29:51,160
Speaker 11: batteries lep to forty percent the cost of the vehicle.

561
00:29:51,280 --> 00:29:55,680
Speaker 11: So it's continuing to innovate on battery production, chemistry, and

562
00:29:55,760 --> 00:29:59,320
Speaker 11: even within the manufacturing process itself, trying to come up

563
00:29:59,320 --> 00:30:02,920
Speaker 11: with more efficiency storing us at overall cost. And I

564
00:30:02,920 --> 00:30:06,120
Speaker 11: think going back to the you know, whether it's tariffs

565
00:30:06,280 --> 00:30:09,200
Speaker 11: or gas prices, logistics, it all adds up to it

566
00:30:09,280 --> 00:30:12,520
Speaker 11: has that multiplier effect which could impact the overall cost

567
00:30:12,560 --> 00:30:15,960
Speaker 11: of operations and manufacturing. So there's a lot of headwinds.

568
00:30:16,000 --> 00:30:17,600
Speaker 3: Yeah, shares come in their way.

569
00:30:17,760 --> 00:30:21,360
Speaker 2: Yeah, well, the investors facing some headwinds in the long term,

570
00:30:21,400 --> 00:30:23,760
Speaker 2: and even today with Tesla shares down about four percent.

571
00:30:24,000 --> 00:30:27,760
Speaker 2: Sephanie Valdez Striti of Cock's Automotive, Thanks, Stephanie, appreciate it.

572
00:30:28,480 --> 00:30:30,480
Speaker 2: We let's take a look at shares of Blue Oul Capital,

573
00:30:30,680 --> 00:30:33,719
Speaker 2: which will limit redemptions from two of its private credit

574
00:30:33,720 --> 00:30:37,600
Speaker 2: funds after facing an unprecedented surge in withdrawal requests. Shares

575
00:30:37,640 --> 00:30:40,200
Speaker 2: under pressure right now, though off their worst levels of

576
00:30:40,200 --> 00:30:42,480
Speaker 2: the day, down about one point two percent.

577
00:30:42,800 --> 00:30:43,800
Speaker 3: Investors have grown.

578
00:30:43,600 --> 00:30:47,160
Speaker 2: Skittish about private credit after some high profile collapses and

579
00:30:47,200 --> 00:30:51,920
Speaker 2: concerns over AI disrupting software. Companies that relied heavily on

580
00:30:52,160 --> 00:30:57,000
Speaker 2: direct lenders come to up Next, Kindril CEO Martin Schroeder

581
00:30:57,080 --> 00:30:59,640
Speaker 2: joins us to discuss how he plans on helping companies

582
00:30:59,640 --> 00:31:02,160
Speaker 2: scale up in the age of a gantic AI. That's

583
00:31:02,200 --> 00:31:18,680
Speaker 2: next on Bloomberg Tech, the release of the source code

584
00:31:18,720 --> 00:31:23,479
Speaker 2: for Anthropics hit programming tool clog code was quote absolutely.

585
00:31:22,960 --> 00:31:23,640
Speaker 3: Not a breach.

586
00:31:23,680 --> 00:31:26,800
Speaker 2: That's according to the company's chief commercial officer, Paul Smith.

587
00:31:27,160 --> 00:31:30,840
Speaker 2: Smith blamed the incident, which exposed some unreleased features, on

588
00:31:30,920 --> 00:31:34,600
Speaker 2: quote process errors. Let's get to the latest with Bloomberg's

589
00:31:34,600 --> 00:31:38,160
Speaker 2: AI reporter Sharen Gafari. Sharen, you and the team have

590
00:31:38,280 --> 00:31:41,120
Speaker 2: been covering this really closely. What did you learn from

591
00:31:41,280 --> 00:31:42,400
Speaker 2: this Anthropic.

592
00:31:42,000 --> 00:31:47,720
Speaker 14: Executive sounds like it was, as you said, not a

593
00:31:47,760 --> 00:31:51,440
Speaker 14: hack but a human error. That the company is moving

594
00:31:51,560 --> 00:31:55,920
Speaker 14: very quickly to release new features, which has been their strength,

595
00:31:55,960 --> 00:31:58,600
Speaker 14: and that they've been able to get ahead and close

596
00:31:58,600 --> 00:32:02,600
Speaker 14: in on competition by having this succession of features rolling out.

597
00:32:02,720 --> 00:32:05,720
Speaker 14: But when things move that fast, it also los room

598
00:32:05,720 --> 00:32:08,360
Speaker 14: for air, as we saw with the release of thousands

599
00:32:08,400 --> 00:32:11,040
Speaker 14: of lines of code that the company is now trying

600
00:32:11,120 --> 00:32:11,600
Speaker 14: to contain.

601
00:32:11,840 --> 00:32:15,120
Speaker 2: What did it expose exactly, and what are the risks

602
00:32:15,720 --> 00:32:18,760
Speaker 2: of that exposure, Like, why is the company what specifically

603
00:32:18,840 --> 00:32:20,720
Speaker 2: is the company trying to contain as a result of this?

604
00:32:22,440 --> 00:32:24,720
Speaker 14: So what was released with source code which is just

605
00:32:24,800 --> 00:32:28,960
Speaker 14: the underlying code for their very hit product, clawed code,

606
00:32:29,000 --> 00:32:32,640
Speaker 14: which is a coding agent. Now, that's not the only

607
00:32:32,760 --> 00:32:35,600
Speaker 14: part that goes into a model's secret recipe. There are

608
00:32:35,600 --> 00:32:39,480
Speaker 14: other layers on top of that that are not out there. However,

609
00:32:39,680 --> 00:32:42,520
Speaker 14: that source code is still valuable, is something that now

610
00:32:43,560 --> 00:32:45,440
Speaker 14: is in the ether and hard to sort of put

611
00:32:45,480 --> 00:32:46,120
Speaker 14: back in the bag.

612
00:32:47,520 --> 00:32:51,120
Speaker 2: Can competitors actually do something with this?

613
00:32:53,360 --> 00:32:58,680
Speaker 14: Well, Anthropic has an issue takedown request on to people

614
00:32:58,760 --> 00:33:03,840
Speaker 14: who are distributed this code, and so there are potential

615
00:33:03,840 --> 00:33:07,600
Speaker 14: ways that they could try to stop that legally. However, again,

616
00:33:07,680 --> 00:33:10,520
Speaker 14: when something's out there, especially if you take code and

617
00:33:10,560 --> 00:33:13,440
Speaker 14: then let's say change that code or tweak it, it

618
00:33:13,440 --> 00:33:15,480
Speaker 14: becomes a little harder to contain, all right.

619
00:33:15,480 --> 00:33:18,320
Speaker 2: Bloomberg strem Gafari follow her for the latest of the

620
00:33:18,360 --> 00:33:20,160
Speaker 2: Bloomberg terminal, and of course also.

621
00:33:20,240 --> 00:33:21,640
Speaker 3: At at Bloomberg dot com.

622
00:33:22,120 --> 00:33:24,800
Speaker 2: Well, ali Baba has unveiled its third closed source AI

623
00:33:24,880 --> 00:33:27,720
Speaker 2: model in as many days. Chinese tech firms have typically

624
00:33:27,800 --> 00:33:31,320
Speaker 2: taken an open sources approach, but the proprietary models will

625
00:33:31,320 --> 00:33:34,160
Speaker 2: allow the company to charge more directly for its tools.

626
00:33:34,480 --> 00:33:37,080
Speaker 2: The Chinese tech giant is keen to monetize its growing

627
00:33:37,120 --> 00:33:41,120
Speaker 2: AI portfolio in part to counterweakness in its e commerce business,

628
00:33:42,680 --> 00:33:44,840
Speaker 2: and Most businesses in the US run on a tech

629
00:33:44,880 --> 00:33:49,240
Speaker 2: infrastructure built for another era, but not for AI agents.

630
00:33:49,760 --> 00:33:52,800
Speaker 2: Kindrels trying to change that. Today, the enterprise tech services

631
00:33:52,800 --> 00:33:56,360
Speaker 2: provider announced the launch of its agentic service management to

632
00:33:56,360 --> 00:33:59,880
Speaker 2: help companies scale and get actual return on AI investment.

633
00:34:00,240 --> 00:34:03,320
Speaker 2: Kendril CEO Martin Schroeder joins us Now in New York

634
00:34:03,360 --> 00:34:07,400
Speaker 2: to explain more. Martin, good to have you on the program.

635
00:34:07,800 --> 00:34:10,640
Speaker 2: How do you know that this is the right way

636
00:34:11,239 --> 00:34:13,600
Speaker 2: to invest? Like, how do you know that AI agents

637
00:34:14,040 --> 00:34:15,480
Speaker 2: are what we should be betting on and what you

638
00:34:15,520 --> 00:34:16,680
Speaker 2: should be betting on right now?

639
00:34:16,719 --> 00:34:19,520
Speaker 7: Well, we're using it in real time already. We use

640
00:34:19,600 --> 00:34:24,759
Speaker 7: agents across our infrastructure to help our customers achieve their

641
00:34:24,800 --> 00:34:29,160
Speaker 7: business objectives. We are the world's largest IT infrastructure services providers,

642
00:34:29,239 --> 00:34:31,799
Speaker 7: so tens of millions of people, hundreds of millions people

643
00:34:31,800 --> 00:34:33,839
Speaker 7: every day are relying on the banks that we help.

644
00:34:33,880 --> 00:34:36,440
Speaker 7: We help over half the world's largest banks run their systems.

645
00:34:36,480 --> 00:34:39,200
Speaker 7: We help eight of the ten largest airlines. We help

646
00:34:40,040 --> 00:34:43,760
Speaker 7: the industrial base that makes most of the world's cars,

647
00:34:43,800 --> 00:34:47,200
Speaker 7: so healthcare companies. So what we already see today is

648
00:34:47,280 --> 00:34:50,480
Speaker 7: the technology is very robust, but it also needs to

649
00:34:50,520 --> 00:34:53,960
Speaker 7: be controlled and managed properly. And that's really what Agentic

650
00:34:54,080 --> 00:34:57,200
Speaker 7: Service Managements and our announcement today is all about. How

651
00:34:57,800 --> 00:35:00,960
Speaker 7: do we help our customers deploy agentic to get the

652
00:35:01,000 --> 00:35:04,120
Speaker 7: benefits from it at scale while still being able to

653
00:35:04,239 --> 00:35:06,960
Speaker 7: control it and make sure it's secure and performing the

654
00:35:07,000 --> 00:35:09,160
Speaker 7: things that you're expecting it to perform.

655
00:35:09,320 --> 00:35:11,120
Speaker 2: Everyone's trying to figure out what the benefits of this

656
00:35:11,200 --> 00:35:14,000
Speaker 2: technology is actually going to be. You see it, you know,

657
00:35:14,080 --> 00:35:15,960
Speaker 2: day in and day out when you're talking to customers.

658
00:35:16,000 --> 00:35:17,880
Speaker 2: How are they using it right now? And what's the

659
00:35:17,880 --> 00:35:19,440
Speaker 2: return on the investment that they're getting.

660
00:35:19,520 --> 00:35:23,279
Speaker 7: So the return on investment, which I'm sure i'm sure

661
00:35:23,280 --> 00:35:26,040
Speaker 7: you've seen as well as sort of it's sort of

662
00:35:26,200 --> 00:35:29,399
Speaker 7: very disparate. So many of our customers are seeing great

663
00:35:29,440 --> 00:35:34,520
Speaker 7: returns on using productivity from AI and within their employee bases.

664
00:35:34,560 --> 00:35:35,520
Speaker 3: We see that as well.

665
00:35:35,880 --> 00:35:38,560
Speaker 7: Our own employee base now as we sit here today,

666
00:35:38,600 --> 00:35:41,200
Speaker 7: has already created nearly twenty five thousand agents that they

667
00:35:41,320 --> 00:35:44,600
Speaker 7: use to be more productive in their jobs. So our

668
00:35:44,640 --> 00:35:47,560
Speaker 7: customers are seeing some of that. At the other end

669
00:35:47,640 --> 00:35:50,239
Speaker 7: of the scale, many many customers are struggling to get

670
00:35:50,280 --> 00:35:53,520
Speaker 7: AI to scale properly. As you said well in your intro,

671
00:35:54,239 --> 00:35:57,040
Speaker 7: the world's infrastructure was built for a different time and

672
00:35:57,239 --> 00:36:01,560
Speaker 7: probably not really ready yet. For Agentica, it's like building

673
00:36:01,600 --> 00:36:05,160
Speaker 7: a brand new bullet train that can go two hundred

674
00:36:05,160 --> 00:36:07,279
Speaker 7: miles an hour, but still running on tracks that were

675
00:36:07,280 --> 00:36:09,960
Speaker 7: built for thirty miles an hour. And that's where Agentic

676
00:36:10,080 --> 00:36:13,080
Speaker 7: Service Management comes in to give you that control plane

677
00:36:13,080 --> 00:36:15,800
Speaker 7: to allow you to start to modernize your systems.

678
00:36:16,200 --> 00:36:18,480
Speaker 2: You know, you have a great view on what these

679
00:36:18,520 --> 00:36:20,879
Speaker 2: firms are spending when it comes to enterprise tech, when

680
00:36:20,880 --> 00:36:24,560
Speaker 2: it comes to this technology. Just the climate out there

681
00:36:24,640 --> 00:36:26,960
Speaker 2: right now, with the volatility that we've seen this year,

682
00:36:27,040 --> 00:36:30,800
Speaker 2: particularly in the last month with the US and Israeli

683
00:36:30,840 --> 00:36:35,640
Speaker 2: war on Iran, are you seeing any change in spending

684
00:36:35,960 --> 00:36:38,320
Speaker 2: is that market? Is that customer base pretty resilient?

685
00:36:38,719 --> 00:36:41,080
Speaker 7: Well, the customer base particularly for the work we do,

686
00:36:41,200 --> 00:36:43,719
Speaker 7: which is mission critical right the hearts and lungs of

687
00:36:43,760 --> 00:36:47,879
Speaker 7: these firms, it is pretty it is pretty stable. I'd

688
00:36:47,920 --> 00:36:52,120
Speaker 7: also say that, look, the situation in the Middle East

689
00:36:52,160 --> 00:36:55,600
Speaker 7: is creating slight shifts making sure that you have resiliency

690
00:36:55,640 --> 00:36:58,440
Speaker 7: in those operations. But we also see some other what

691
00:36:58,480 --> 00:37:02,200
Speaker 7: i'll call longer term arcs that are Data sovereignty is

692
00:37:02,280 --> 00:37:04,720
Speaker 7: top of mind for everybody today, and we have obviously

693
00:37:04,800 --> 00:37:06,759
Speaker 7: a point of view and that we're helping customers think

694
00:37:06,800 --> 00:37:10,440
Speaker 7: about data sovereignty. So in the mission critical world, the

695
00:37:10,480 --> 00:37:14,359
Speaker 7: issues of security and resilience, the issues of modernization, they're

696
00:37:14,360 --> 00:37:17,720
Speaker 7: pretty stable. It's a growing market and I don't expect

697
00:37:17,760 --> 00:37:20,640
Speaker 7: to see massive shifts based on whatever's in the news.

698
00:37:20,719 --> 00:37:24,560
Speaker 2: But on budgets, there's sort of a more fundamental question,

699
00:37:24,600 --> 00:37:27,560
Speaker 2: and that's about the spend when it comes to what

700
00:37:27,680 --> 00:37:31,040
Speaker 2: these companies are actually buying and purchasing right now, and

701
00:37:31,080 --> 00:37:33,160
Speaker 2: a lot of that in really recent months and even

702
00:37:33,160 --> 00:37:34,800
Speaker 2: in the recent last year.

703
00:37:34,640 --> 00:37:36,200
Speaker 3: Has really shifted toward AI.

704
00:37:36,880 --> 00:37:39,479
Speaker 2: How do you convince them to spend on infrastructure maybe

705
00:37:39,520 --> 00:37:42,640
Speaker 2: tie that infrastructure spend to the AI story that's happening

706
00:37:42,719 --> 00:37:43,080
Speaker 2: right now.

707
00:37:43,120 --> 00:37:48,160
Speaker 7: So we're in the business of creating productivity for our customers, right,

708
00:37:48,200 --> 00:37:51,280
Speaker 7: And the way we get to growth is by creating

709
00:37:51,320 --> 00:37:54,799
Speaker 7: productivity in order to create pools of money that they

710
00:37:55,120 --> 00:37:58,040
Speaker 7: can go invest in. Whatever is sort of top of mind,

711
00:37:58,040 --> 00:38:01,240
Speaker 7: and you said it, well, AI is been top of mind.

712
00:38:01,280 --> 00:38:04,840
Speaker 7: But again, when you have disruption in the world and

713
00:38:04,920 --> 00:38:08,880
Speaker 7: geopolitic geopolitics playing a role, it may be resiliency, it

714
00:38:08,920 --> 00:38:11,560
Speaker 7: may be it may be data sovereignty, it may be

715
00:38:11,760 --> 00:38:14,920
Speaker 7: trying to rebalance your work to a private cloud versus

716
00:38:14,920 --> 00:38:19,120
Speaker 7: a public cloud. So the nature of what we do

717
00:38:19,200 --> 00:38:22,920
Speaker 7: has always been about drive productivity for our customers, do

718
00:38:23,040 --> 00:38:26,120
Speaker 7: what they're doing more efficiently, create a pool of money,

719
00:38:26,120 --> 00:38:28,560
Speaker 7: and then help them help them invest where they want

720
00:38:28,640 --> 00:38:28,880
Speaker 7: to be.

721
00:38:29,440 --> 00:38:32,000
Speaker 2: You know, on a gentic AI we hear from people

722
00:38:32,000 --> 00:38:33,319
Speaker 2: all the time who say we're all going to have

723
00:38:33,320 --> 00:38:36,439
Speaker 2: our own AI agents and in a really short time

724
00:38:36,480 --> 00:38:39,080
Speaker 2: and BAI agent's already out there acting on behalf of

725
00:38:39,400 --> 00:38:41,160
Speaker 2: some people who are sort of early adopters.

726
00:38:41,239 --> 00:38:42,440
Speaker 3: Is that a view that you agree with?

727
00:38:43,000 --> 00:38:44,560
Speaker 7: I think that each of us. I mean, I have

728
00:38:44,640 --> 00:38:46,600
Speaker 7: agents that do automated work for me, right, But it's

729
00:38:46,719 --> 00:38:48,960
Speaker 7: very much a productivity tool. I will tell you you're here

730
00:38:49,000 --> 00:38:51,600
Speaker 7: with me in person, I will tell you that. I

731
00:38:51,600 --> 00:38:54,080
Speaker 7: will tell you that in the infrastructure we run for

732
00:38:54,120 --> 00:38:58,279
Speaker 7: our customers, in the production workloads we have, as we

733
00:38:58,320 --> 00:39:00,279
Speaker 7: say to here right now nine hundred and twenty any

734
00:39:00,560 --> 00:39:05,359
Speaker 7: trusted proprietary agents doing the work that helps run helps

735
00:39:05,400 --> 00:39:09,160
Speaker 7: us run the infrastructure. Compare that to again, our employee

736
00:39:09,160 --> 00:39:12,879
Speaker 7: pool is created just under twenty five thousand agents. So yes,

737
00:39:13,000 --> 00:39:16,160
Speaker 7: there is a proliferation of agents in the productivity space

738
00:39:16,200 --> 00:39:20,280
Speaker 7: that is going to continue. But agents doing real running

739
00:39:20,320 --> 00:39:23,919
Speaker 7: production systems for companies, for the kinds of companies we work,

740
00:39:24,160 --> 00:39:28,239
Speaker 7: that's at about a twentieth of what the others are. Now,

741
00:39:28,280 --> 00:39:30,040
Speaker 7: that's going to grow fast. It's going to grow fast

742
00:39:30,040 --> 00:39:33,000
Speaker 7: because they're very effective. They allow us to deliver higher quality.

743
00:39:33,280 --> 00:39:35,640
Speaker 7: They do save money, but it is going to take

744
00:39:35,640 --> 00:39:37,480
Speaker 7: a while to get into the production environments.

745
00:39:37,560 --> 00:39:39,160
Speaker 2: Marin, Before we go, I'd be remiss if I didn't

746
00:39:39,160 --> 00:39:41,120
Speaker 2: ask about the ball of the year that Kendrel has

747
00:39:41,160 --> 00:39:44,720
Speaker 2: had and the leadership changes the CFO leaving some accounting

748
00:39:44,719 --> 00:39:48,880
Speaker 2: disclosure issues that certainly spooked the market. Given those hiccups,

749
00:39:48,880 --> 00:39:51,239
Speaker 2: what can you say to investors right now that mid

750
00:39:51,320 --> 00:39:54,360
Speaker 2: term revenue profit and cash flow goals remain within rage.

751
00:39:54,600 --> 00:39:59,359
Speaker 7: Yeah, so we did have a material weakness that we disclosed.

752
00:39:59,560 --> 00:40:03,279
Speaker 7: We we also are cooperating with the SEC to try

753
00:40:03,280 --> 00:40:05,719
Speaker 7: to get through the issues and the questions they have

754
00:40:05,760 --> 00:40:09,640
Speaker 7: around disclosure. Keep in mind there was no financial restatement, right,

755
00:40:09,680 --> 00:40:11,800
Speaker 7: So the financial position of the firm is the financial

756
00:40:11,800 --> 00:40:14,920
Speaker 7: position of the firm, and we will this year continue

757
00:40:14,920 --> 00:40:17,560
Speaker 7: to make progress toward twenty eight. And we still see

758
00:40:17,600 --> 00:40:20,840
Speaker 7: twenty eight as a year where relative to what we

759
00:40:20,880 --> 00:40:23,480
Speaker 7: talked about almost two years ago, now we'll be able

760
00:40:23,760 --> 00:40:26,439
Speaker 7: to triple cash flow and double profits on our way

761
00:40:26,480 --> 00:40:28,360
Speaker 7: to sustainable revenue growth.

762
00:40:28,600 --> 00:40:31,640
Speaker 2: Kendral CEO Martin Schroeder, thanks so much for joining us

763
00:40:31,680 --> 00:40:35,759
Speaker 2: on Bloomberg. Well, the tech sector's job purge is continuing

764
00:40:35,800 --> 00:40:38,399
Speaker 2: to rise. New data firm Challenger Grand Chris miss shows

765
00:40:38,440 --> 00:40:41,520
Speaker 2: that layoffs and tech companies topped eighteen thousand i'm more

766
00:40:41,520 --> 00:40:43,879
Speaker 2: than twenty four percent from March of twenty twenty five.

767
00:40:44,320 --> 00:40:47,399
Speaker 2: AI accounted for a quarter of the sixty thousand, six

768
00:40:47,480 --> 00:40:50,560
Speaker 2: hundred and twenty total job cuts last month, as companies

769
00:40:50,600 --> 00:40:54,440
Speaker 2: such as Meta and Oracle shift budgets toward AI investment.

770
00:40:55,760 --> 00:40:58,440
Speaker 2: Coming up next, Microsoft's CFO Amy Hood has one of

771
00:40:58,480 --> 00:41:01,840
Speaker 2: the toughest jobs in Big ten. We're going to explain why. Next,

772
00:41:02,040 --> 00:41:18,120
Speaker 2: this is Bloomberg. Microsoft CFO Amy Hood has the toughest

773
00:41:18,160 --> 00:41:22,239
Speaker 2: job when it comes to navigating internal tensions and financial discipline. Well,

774
00:41:22,280 --> 00:41:25,280
Speaker 2: competitors such as Meta, Google and Amazon are spending tens

775
00:41:25,280 --> 00:41:29,440
Speaker 2: of billions of dollars without hesitation. Hood has maintained a reputation.

776
00:41:29,040 --> 00:41:30,400
Speaker 3: For extreme accountability.

777
00:41:30,680 --> 00:41:33,640
Speaker 2: Let's bring in Bloomberg's Brody Ford in San Francisco, who

778
00:41:33,680 --> 00:41:37,480
Speaker 2: has more the author of today's big take about the

779
00:41:37,480 --> 00:41:42,840
Speaker 2: Microsoft CFO, Brody why is her job particularly more difficult

780
00:41:42,880 --> 00:41:46,040
Speaker 2: than some CFOs at other publicly held tech companies.

781
00:41:47,120 --> 00:41:49,319
Speaker 15: Well, we talk about on the show every day, like

782
00:41:49,360 --> 00:41:52,000
Speaker 15: the big question in the economy right now is are

783
00:41:52,040 --> 00:41:55,200
Speaker 15: these huge data centers going to pay off? And so

784
00:41:55,440 --> 00:41:58,400
Speaker 15: Amyhood at Microsoft is sitting on kind of a nation

785
00:41:58,640 --> 00:42:02,240
Speaker 15: state size level of investment and she has to figure

786
00:42:02,280 --> 00:42:04,759
Speaker 15: out how much do you give to data centers, how

787
00:42:04,840 --> 00:42:08,320
Speaker 15: much do you allocate to internal teams or open AI

788
00:42:08,480 --> 00:42:12,680
Speaker 15: or other customers, and so essentially she is having a

789
00:42:12,800 --> 00:42:15,439
Speaker 15: very big job beyond the scope of what you would

790
00:42:15,440 --> 00:42:19,280
Speaker 15: think of as a CFO. And you know, every six

791
00:42:19,360 --> 00:42:22,000
Speaker 15: months to a year. The market has a different feeling

792
00:42:22,040 --> 00:42:24,479
Speaker 15: on whether these data centers will pay off, and she's

793
00:42:24,520 --> 00:42:27,359
Speaker 15: the one on the day to day within Microsoft determining

794
00:42:27,840 --> 00:42:30,160
Speaker 15: what's the right amount of money to spend ed.

795
00:42:30,120 --> 00:42:32,160
Speaker 2: To this a great deep dive on her history. She's

796
00:42:32,200 --> 00:42:34,480
Speaker 2: been at the company since or she's been at CFO

797
00:42:34,560 --> 00:42:37,520
Speaker 2: since twenty thirteen. She was at Goldman Sachs earlier in

798
00:42:37,920 --> 00:42:40,840
Speaker 2: her career. Give us an example of a time where

799
00:42:40,880 --> 00:42:45,040
Speaker 2: she was right about financial discipline when others really thought

800
00:42:45,280 --> 00:42:47,400
Speaker 2: they should be spending more money on certain products.

801
00:42:48,840 --> 00:42:51,840
Speaker 15: Well, the big thing right now is that she is

802
00:42:51,960 --> 00:42:56,520
Speaker 15: skeptical of straight up renting out the servers to AI customers.

803
00:42:56,600 --> 00:43:00,000
Speaker 15: Right you think about the big Oracle deal that vault

804
00:43:00,120 --> 00:43:02,560
Speaker 15: to their stock late last year with open AI, that

805
00:43:02,680 --> 00:43:06,760
Speaker 15: three hundred billion dollar booking. That contract was on Amy's

806
00:43:06,760 --> 00:43:09,480
Speaker 15: Hood's desk. They had the option to take it and

807
00:43:09,560 --> 00:43:12,719
Speaker 15: she said no. And when Oracle first signed that deal,

808
00:43:12,800 --> 00:43:14,880
Speaker 15: it seemed like a coup. It seemed like man, you know,

809
00:43:15,000 --> 00:43:18,120
Speaker 15: Larry Ellison was having his comeback. And within a couple

810
00:43:18,200 --> 00:43:20,600
Speaker 15: of months it started seeming much more like a bird.

811
00:43:20,680 --> 00:43:23,680
Speaker 15: And then maybe Amy Hood had dodged a bullet. The

812
00:43:23,800 --> 00:43:25,880
Speaker 15: jury is still out on a lot of this stuff

813
00:43:25,920 --> 00:43:29,399
Speaker 15: and how the air will look, but at this point

814
00:43:29,480 --> 00:43:31,400
Speaker 15: it seems like she has made a shrewd choice.

815
00:43:31,960 --> 00:43:33,000
Speaker 3: Bloomberg's Brody for it.

816
00:43:33,120 --> 00:43:35,839
Speaker 2: Check out his big take, written along with Matt Day

817
00:43:35,920 --> 00:43:39,040
Speaker 2: of Bloomberg News on the Bloomberg Terminal and at Bloomberg

818
00:43:39,080 --> 00:43:40,400
Speaker 2: dot Com. That is going to do it for this

819
00:43:40,560 --> 00:43:42,880
Speaker 2: edestionon of a Bloomberg tech Do you not forget to

820
00:43:42,920 --> 00:43:44,520
Speaker 2: check out our podcast. You can find it on the

821
00:43:44,640 --> 00:43:47,720
Speaker 2: terminal as well as online at Apple, Spotify, and iHeart

822
00:43:48,040 --> 00:43:49,200
Speaker 2: This is Bloomberg.