Speaker 1: From Marhart.
Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Hyde and Bloomberg's world headquarters.
Speaker 4: In New York, and I'm Ed Ludlow live at CS
Speaker 4: Las Vegas. This is Bloomberg Technology.
Speaker 5: Coming up on the show.
Speaker 3: Full coverage from CS in Las Vegas. With Then we
Speaker 3: sit down with the CEO's of Qualcom, of mobili and
Speaker 3: we're here from a cito of Mercedes on Generator AI
Speaker 3: in Auto's Plus the CS underway. Amazon reveals it's new
Speaker 3: streaming feature to rival Apple's Airplay. Details on that ahead,
Speaker 3: and Bitcoin it hovers just below that forty seven thousand
Speaker 3: dollars mark, all ahead of the all important SEC decision
Speaker 3: on the spot Bitcoin ETF that we anticipate all that
Speaker 3: and so much more coming up first.
Speaker 5: Ed, you are live on the ground.
Speaker 3: And it must all feel like it's about artificial intelligence.
Speaker 4: Yeah, it's AI everything, but you know the name Consumer
Speaker 4: Electronics Show. The range of companies here that are bringing
Speaker 4: substantive news about AI is really interesting, from beauty to
Speaker 4: big box right. Walmart CEO Doug McMillan, one of the
Speaker 4: keynote speakers. I'll be speaking to the Nasdaq CEO Adina
Speaker 4: Freeman about the impact of AI on financial markets over
Speaker 4: the next twenty four to forty eight hours. Look at
Speaker 4: some of the stocks of these companies, because we're already
Speaker 4: seeing moves, for example in video based on the CS
Speaker 4: announcements they're making.
Speaker 3: Yeah, maybe even Amazon Driving Train because of its announcement
Speaker 3: as well. But the cars still front and center. It
Speaker 3: always has felt like cars have encroached on the tech
Speaker 3: space of late.
Speaker 4: Yeah, there is a heavy presence of the automotive sector here,
Speaker 4: particular focus on technology that ranges from AI and perhaps
Speaker 4: advanced driver's system. It's an autonomy right through to the
Speaker 4: next generation of battery electric vehicles. That's going to be
Speaker 4: the discussion here throughout this hour. Really heavy automotive scene
Speaker 4: underpinning it AI.
Speaker 3: I mean, we've got to get to what's happening on
Speaker 3: the ground in CS and you've got a key special
Speaker 3: guest for us.
Speaker 4: Yeah, let's get right to our first interview Mercedes CTO
Speaker 4: Marcus Schaeffer, and as we discuss Mercedes starting their announcements
Speaker 4: focused on AI and Marcus I don't know what to
Speaker 4: make of this. You're calling it a virtual assistant. It
Speaker 4: is part generative AI tool, it's part cockpit. Explain the
Speaker 4: virtual assistant to us and what you've announced this morning.
Speaker 6: Well, I would call AI a real game changer, and
Speaker 6: at this moment in time, from most they dispense. So
Speaker 6: AI is used in several instance, it's grading a car
Speaker 6: much faster, riding cold, but AI these days is helping
Speaker 6: us really to put the car in a different light.
Speaker 6: So the car is no longer a vehicle just takes
Speaker 6: you from A to B. It's somebody who can talk
Speaker 6: to And that's.
Speaker 4: Exactly basic that how does it work? How do I interact?
Speaker 6: So it's about the human machine interface actually, and it
Speaker 6: used to be knobs and buttons in the past, and
Speaker 6: it was voice signals phrases that you were using. Now
Speaker 6: at the present time, we're using actually even jet GPT
Speaker 6: in some instances in US cars, but that's more a
Speaker 6: one way dialogue. But now with the virtual system AI
Speaker 6: and the in house software, we're enabling a dialogue. So
Speaker 6: this enables a fully intelligent car and intelligent conversation. So
Speaker 6: the car appears in a completely different context and that's
Speaker 6: what the user is already experiencing participating in our chet
Speaker 6: GIPT beta program. So the use of voice control and
Speaker 6: voice interaction with a car is just rising traumatically by
Speaker 6: a more intelligent conversation with a car. And that's exactually
Speaker 6: what this virtual system that we are creating with the
Speaker 6: help of AI and in house software is enabling. So
Speaker 6: this changes the relation between you, the customer and the
Speaker 6: car dramatically.
Speaker 4: Marcus, who built the underlying technology Mercedes, or you worked
Speaker 4: with an AI developer like open Ai.
Speaker 6: Well, the key is that's our understanding. We developing our
Speaker 6: own in house software. We call it Mercedes Spence Operating
Speaker 6: System MBOs. It's called MBOs. So this is the foundation,
Speaker 6: this is a basis. This is a chip to cloud architecture.
Speaker 6: So we're defining the chip level, we're defining the base
Speaker 6: like middleware. We're defining our clouds. So we own the cloud,
Speaker 6: the Mercedespence Intelligent Cloud. So it's a complete three hundred
Speaker 6: and sixty decreased system. And within this system, we're having partners,
Speaker 6: so we're using partners for AI modules, data access, and
Speaker 6: so we're partnering here partially. When it comes to the
Speaker 6: virtual Assistant, but partially the software is written in house
Speaker 6: in order to be in control of the result towards
Speaker 6: the customer and the data privacy.
Speaker 4: Just very quickly, if I'm a Mercedes customer, do I
Speaker 4: purchase Virtual Assistant or does it come as part of
Speaker 4: a broader software suite.
Speaker 6: Well, the idea is that we provide a complete entertainment package.
Speaker 6: So it's not only the virtual system model lines or
Speaker 6: across all model lines. So it's ultimately about the customer experience,
Speaker 6: and the Virtual Assystem is just an enabler and intelligent
Speaker 6: enabler that opened up the world of entertainment for Benz customer.
Speaker 6: So you purchase a whole package of entertainment. It's video,
Speaker 6: it's audio. We just announced yesterday partnership with Audible Podcast.
Speaker 6: So there are many many ways that entertainment in the
Speaker 6: mercedspense is taken to the next level through the Virtual Assistant.
Speaker 4: Marcus, you are entering a key battleground with drive pilots
Speaker 4: level three California and Nevada at first, and customers will
Speaker 4: be able to start taking delivery download of this early
Speaker 4: twenty twenty four. What has demand been like? Can you
Speaker 4: tell me how many Mercedes customers will be able to
Speaker 4: use drive pilot on roads in those states. Twenty twenty four, Well.
Speaker 6: We started offering a level three drive pilot in Germany
Speaker 6: last year, so we have quite some experience in Germany
Speaker 6: and the interest in purchasing the drive Pilot with the
Speaker 6: S class and the EQS is really really high in Germany.
Speaker 6: So now we're starting in the market here in Nevada
Speaker 6: and in California. Customers will receive the first cars and
Speaker 6: the interest is absolutely high. But this is a game changer.
Speaker 7: This is an absolute new.
Speaker 4: Game knowlogier for revenue as well as technology. Will you
Speaker 4: make it work vanguards from it?
Speaker 6: Technologically, it's a game changer because responsibility moving from level
Speaker 6: two cars to level three cars changes from the driver
Speaker 6: to the vehicle and that's a fundamental paradigm shift that's
Speaker 6: happening here supported by technology. So there's lighter technology in
Speaker 6: the car, cameras, radars, a software stack, an intelligence software stack,
Speaker 6: and intensive for work with the authorities here in the
Speaker 6: US to get it certified. So it's a huge technology
Speaker 6: stack and package that we're offering the customers here with
Speaker 6: a benefit that you are unable to perform side activities
Speaker 6: while you're driving, so off the road and hands off
Speaker 6: the steering wheel for the first time. Right, this is
Speaker 6: the only vehicle in the market so far.
Speaker 4: You raise a good point on certification. A big news
Speaker 4: story of the last week has been the recall in
Speaker 4: name only of all Tesla vehicles on autopilot in China,
Speaker 4: and the regulator said, you need to do more to
Speaker 4: get the driver focused on the road, more alerts. Do
Speaker 4: you think you'll avoid a soft recall like that? Are
Speaker 4: you confident that once drive pilot is rolled out here
Speaker 4: in the United States and later China, that it will
Speaker 4: just be able to exist in the marketplace.
Speaker 6: I believe you can never rule out that you were
Speaker 6: running into a recall. But on the other hand, we're
Speaker 6: doing everything in the forefield to avoid this and making
Speaker 6: sure this is a reliable system. So the intensive work,
Speaker 6: extensive work with the authorities over a couple of years
Speaker 6: with DMVNITZA and many authorities in the country to explain
Speaker 6: the system to them and the boundaries of the system.
Speaker 7: What the system can.
Speaker 6: Do and what the system cannot do is so essential,
Speaker 6: and to explain it in detail also to the customer.
Speaker 6: So it's an education process that has happened over the
Speaker 6: last two years three years in the country here making
Speaker 6: sure customers and the legislator understand the boundaries of the
Speaker 6: system here, and I think it's very important to distinguish
Speaker 6: being a level two system, a driver a system system
Speaker 6: and an automated drive. Pilots the lowest and it's so
Speaker 6: essential for the customers that they understand what the system
Speaker 6: is able to do and what they can do what
Speaker 6: they cannot do in order to avoid what we call
Speaker 6: mode confusion. So you should never confuse your customer what
Speaker 6: the system is able to do. That's why we clear
Speaker 6: distinguished this is a level two car driver systems takes
Speaker 6: a lot of load from you, but you always have
Speaker 6: to have your hand in the steering wheel and you
Speaker 6: are in charge. But in level three you give the
Speaker 6: responsibility to the machine and that's a fundamental change. With
Speaker 6: the benefit you can perform side activities, watching movies and
Speaker 6: doing other things in the car legally.
Speaker 4: Marcus Schaefer, Mercedes Chief Technology Officer CTO, good to catch
Speaker 4: up here at CES. Caroline Ba's you in New York.
Speaker 3: Love the nuances when it comes to tech within the autosphere. Meanwhile,
Speaker 3: coming up, we're going to be continuing that coverage from
Speaker 3: cs next up the Mobile I co You do not
Speaker 3: want to miss our conversation coming up next. Meanwhile, just
Speaker 3: keep an eye on what's happening with the shares of
Speaker 3: your brown left. Today we go from autodiscussion to the
Speaker 3: discussion around flexible working and indeed gig working. The pushback
Speaker 3: is on, of course once again the federal government really
Speaker 3: trying to look at how we are protecting employees whether
Speaker 3: contractors are indeed full time employees or not. You can expect,
Speaker 3: of course, the Chamber of Commerce and I need some
Speaker 3: of these companies to push back against the.
Speaker 5: Latest labor law that has just dropped. Today, we're still.
Speaker 3: Up on the high side, lift up more than percentage point,
Speaker 3: uber more than two percent, so no great investor concerns
Speaker 3: at the moment.
Speaker 8: This is Bloomberg Technology.
Speaker 4: Welcome back to cs LAS Vegas. Our next interview Mobilized
Speaker 4: CEO am Noon Shashua, the technology company announcing a range
Speaker 4: of news items to do with advanced driver assistance and
Speaker 4: actually amnon you literally right now are announcing a new
Speaker 4: one DXP, an operating system for aid AS. What is it?
Speaker 4: Explain how it works?
Speaker 9: Well, it's good to be here, ed always good to
Speaker 9: see you, the expered to driving experience to the platform.
Speaker 9: There is a natural tension between the need of his
Speaker 9: supplier to skill I'll create to one system that fits
Speaker 9: all right, and the need of the customer the car
Speaker 9: maker to differentiate, try to make something that is unique
Speaker 9: to its own driving experience. And the way that this
Speaker 9: has been handled so far is let's provide the car
Speaker 9: maker with libraries with API calls and let the car
Speaker 9: maker build their own system. And this doesn't look that,
Speaker 9: it seems to.
Speaker 4: Work, okay, so you're basically going to yours basically in
Speaker 4: saying here is an operating system.
Speaker 9: So that there are kind of two extremes. What we
Speaker 9: separated is what is universal and what is unique universal, say,
Speaker 9: for example, perception.
Speaker 7: Perception is universal.
Speaker 9: Why because there isn't any differentiation to do with understanding
Speaker 9: the environment, right, A BMW vehicle or UNDI vehicle or
Speaker 9: an AUDI vehicle to understand the environment the same way.
Speaker 9: So there's no differentiation there. HMI and control. Clearly that's
Speaker 9: in the territory of the car maker to differentiate.
Speaker 4: Especially if you have a highest speck car response.
Speaker 9: Yeah exactly. But then comes the big thing in the middle,
Speaker 9: the big elephant, which is called driving policy. This is
Speaker 9: all the decision making the car makes and the car
Speaker 9: needs to do in order to merge into traffic. When
Speaker 9: you're doing a hands free experience, now decide to change lane,
Speaker 9: when to change line, how to negotiate with other with
Speaker 9: other road users, the breaking profile, the comfort versus the
Speaker 9: safety type of balancing. There's lots and lots of you know,
Speaker 9: heavy AI. There lots of validation, you know, huge amount
Speaker 9: of data for training, and this is something that so
Speaker 9: far has been difficult to separate into something that you
Speaker 9: can just give a library to the car maker. So
Speaker 9: what we created we create an operating system that separates
Speaker 9: driving policy into the universal part, which Mobili does as
Speaker 9: kind of the substrate, all the all the difficult AI,
Speaker 9: all the difficult AIE parts, and then the unique parts.
Speaker 9: That is a set of code that we provide of
Speaker 9: course reference code to the carmakers that controls every aspect
Speaker 9: of the driving experience.
Speaker 4: Right, they customize this the OS relative to the model
Speaker 4: that they're trying SEA.
Speaker 9: It's just like writing an app on an iPhone.
Speaker 4: Just like writing app on an iPhone, you're going to
Speaker 4: make any money from this.
Speaker 9: Well, it allows us to scale. How so so because
Speaker 9: you know, we're talking about very complex systems. You are
Speaker 9: not just the front facing camera, you know, basic aidas.
Speaker 9: These are systems with eleven cameras and radars, heavy compute
Speaker 9: and scaling this from carmaker to carmaker is a challenge
Speaker 9: because these are complex systems. This DXP allows us to
Speaker 9: scale easily. From our point of view, we're creating one
Speaker 9: system that kind of fits all, but from the point
Speaker 9: of view of the car maker, the full control of
Speaker 9: changing the driving experience to whatever they desire.
Speaker 4: Let's talk about this, and we have to in the
Speaker 4: context of last week. You gave a sales outlook for
Speaker 4: this year overall below Wall Street estimates, but you basically
Speaker 4: said first quarter sales will be down fifty percent year
Speaker 4: on year. Why because customers built up inventores they've paused
Speaker 4: ordering to work through the back rone. A question that
Speaker 4: the street had is why didn't you see that coming
Speaker 4: a bit sooner.
Speaker 9: Look, this is the dark side of having long term commitments.
Speaker 9: You know, during the COVID the years we're talking about
Speaker 9: three years, we sold ninety nine million chips. Or during
Speaker 9: these three years we had to give long term commitments
Speaker 9: to our material suppliers, and we had to ask for
Speaker 9: long term commitments from our customers.
Speaker 7: The Tier one supplies.
Speaker 9: Long term commitments is a year and a half going forward,
Speaker 9: and it's difficult to kind of forecast a year and
Speaker 9: the half to do accurate forecasting. So we felt very
Speaker 9: secure that we have, you know, foreign purchase orders a
Speaker 9: year and a half ahead. Well, what it turns out
Speaker 9: that you know, customers, the Tier ones, they gradually built up.
Speaker 4: Inventory severe inventory.
Speaker 9: Well you know, it's about seven percent of what we
Speaker 9: shipped in three years, so it's not that severe, but
Speaker 9: two three percent a year. But you know, it was
Speaker 9: kind of under the rug. We didn't see it. We
Speaker 9: didn't see it coming. And now the first quarter of
Speaker 9: twenty twenty four, all this inventory is going to be
Speaker 9: used and then the remaining years as growth the second
Speaker 9: quarter or third quarter, fourth quarter is the natural growth
Speaker 9: of alas.
Speaker 4: Returning to grave. And you're seeing very quickly evidence that
Speaker 4: the inventories are now being worked through in first So.
Speaker 9: The first quarter, the invanty is going to be depleted
Speaker 9: and then we're going back to normal.
Speaker 4: Okay. The other piece of news is Mahindra you are
Speaker 4: going to provide a desk tech for their next gen cars.
Speaker 4: Give me some numbers. What does that look like over
Speaker 4: the coming years.
Speaker 9: Well, we have ADAS tech in India with Mahindra and
Speaker 9: Prime models in Prime models suv models and it turned
Speaker 9: out to be very successful. You know that the demand
Speaker 9: is about three times four times what they forecasted in India,
Speaker 9: so there is kind of a strong sense of desire
Speaker 9: for safety in India. What's interesting with this particular pr
Speaker 9: is not that it's regular aid US. It's our latest model,
Speaker 9: the Supervision eleven cameras around the car, hands free driving.
Speaker 9: And you wouldn't expect India to be one of those,
Speaker 9: you know, territories that will go and adopt such a system.
Speaker 9: And it shows that in India, you know, our new
Speaker 9: roads are being built, new highway roads are built being built,
Speaker 9: and the kind of safety that these systems provide there
Speaker 9: is a strong need for them. And India is a
Speaker 9: huge growth territory. So it's not only China.
Speaker 4: You also announced a deal with it unnamed automaker. I
Speaker 4: know you won't name them. The question our audience has
Speaker 4: for you is who is the lied our supplier on
Speaker 4: these deals when I posted you coming on. They all said,
Speaker 4: ask amnon, who's the lied oar supplier.
Speaker 9: Well, if I tell you, it may kind of indicate
Speaker 9: who is this Western Oh yem right. But you know
Speaker 9: we won seventeen models both Supervision and Chauffeur. This is
Speaker 9: a great win for our it's all coming out in
Speaker 9: twenty twenty six. It's actually also drive the Robotaxi.
Speaker 1: It's a huge it's a huge deal for us.
Speaker 9: I think overall, when you look at Supervision platform, we
Speaker 9: have now thirty car models three zero when we started
Speaker 9: only with two car models a year ago.
Speaker 4: I'm not sha share nobile. I CEEO. So good to
Speaker 4: catch Thank you, thank you at C.
Speaker 5: Yes time now for talking tech.
Speaker 3: First up, India's Z Entertainment Beaus reportedly missed the deadline
Speaker 3: to pay Walt Disney's India unit for the rights to
Speaker 3: televise cricket matches now Blue. Both sources say Z didn't
Speaker 3: pay a two hundred million dollar installment fee to Disney
Speaker 3: Star it it was due to a shortage of cash.
Speaker 3: Z and Disney Star entered that agreement at one point
Speaker 3: four billion dollar packed in August to broadcast the cricket
Speaker 3: games until twenty twenty seven. Meanwhile, JD dot COM's Dada
Speaker 3: Nexus says it's investigating suspicious practices that led to a
Speaker 3: discrepancy in its revenue outlook.
Speaker 5: A routine audit found.
Speaker 3: That Dudda may have overstated both sales and support costs
Speaker 3: i AM rough one hundred and forty million dollars, triggering
Speaker 3: a forty six percent job in its share price. Independent
Speaker 3: advisors will assist in the review of the situation. Plus
Speaker 3: Judipa Networks rising the most nearly twenty years. That's after
Speaker 3: the Wall Street Journals said that the company was in
Speaker 3: merger talks with the Hewlett Packard Enterprise. Now reports say
Speaker 3: that HPA would would acquire Juniper for about thirteen billion
Speaker 3: dollars representatives when both companies did not comment on the matter.
Speaker 5: Now, let's just briefly return.
Speaker 3: To what's going on at CS the conference there and
Speaker 3: there are going to be some big announcements from tech's
Speaker 3: biggest players.
Speaker 5: One of them is Amazon.
Speaker 3: It's already been unveiling its new video streaming features similar
Speaker 3: to that of Apple Airplay. Joining us to break down
Speaker 3: why this is important, Spencer, SOAPA, so already you can
Speaker 3: do Google or Android cast you can do Apple Airplay,
Speaker 3: Why does Amazon want to offer this optionality to Spencer.
Speaker 10: Yeah, so Amazon's playing a little bit of catch up here,
Speaker 10: and the key thing is that Amazon doesn't have a smartphone,
Speaker 10: so that's why it comes at in kind of a
Speaker 10: weak position. But It's realized people are using Prime Video
Speaker 10: and they want to stream Prime Video on another device,
Speaker 10: They're going to have to do that through either an
Speaker 10: Android phone or an iOS device, and so Amazon's recognizing
Speaker 10: you has to have its apps and functions operate that
Speaker 10: way on devices that it doesn't make. So right now
Speaker 10: you'll be able to date us today is you'll be
Speaker 10: able to stream Prime Video from an iOS or Android
Speaker 10: device onto like an EGO show, and that in months
Speaker 10: you'll be able to do it on a player TV
Speaker 10: and that sort of thing. But they're realizing is that
Speaker 10: people's devices need to be able to talk to.
Speaker 4: One another, and.
Speaker 10: That you need to be able to stream for one
Speaker 10: device your phone where you get the signal, onto another
Speaker 10: device where you want to watch it.
Speaker 5: It's called matter casting.
Speaker 3: Now already we know that some of these big tech
Speaker 3: companies have been trying to agree on the ways and
Speaker 3: where you can do this sort of technology but what's
Speaker 3: what's so hard about it? How hard did Amazon have
Speaker 3: to work? Briefly, Spencer, Well, we know.
Speaker 10: That they had to negotiate with Apple and Google and
Speaker 10: those things can be kind of tense, you know, hard
Speaker 10: to find a win win, and a lot of times
Speaker 10: these companies want to be in like kind of a
Speaker 10: walled garden where they control everything.
Speaker 3: Yeah, Spencer Soper, I know you're a busy guy. You're
Speaker 3: about to make that flight out to Las Vegas yourself.
Speaker 3: We really appreciate you bringing us that particular story.
Speaker 8: This is Blueberg Technology.
Speaker 3: Welcome back to blue Meg Technology. I'm Caroline Hyed in
Speaker 3: New York Ed. He's over there in Las Vegas. We'll
Speaker 3: be about to see us in a moment. But let's
Speaker 3: have a look at what's happening in the markets right now,
Speaker 3: because we are actually seeing a little bit of a recovery.
Speaker 3: We had seen some concerns around tech, particularly when it
Speaker 3: came to the chip stocks from she delve into in
Speaker 3: a moment, But now it's like one hundred currently recovering.
Speaker 3: We're only about twenty three points. That's less than to
Speaker 3: tents of a percent. Nevertheless, there is int cautious holding
Speaker 3: into the Nasdaq tenure.
Speaker 5: Yield currently seeing a bit of a bid.
Speaker 3: We're off by one two basis points across the curve
Speaker 3: in facts and buying into that three year auction that
Speaker 3: we're anticipating. But the direction of travel for bond markets
Speaker 3: really does stick tech. Perhaps what happens with overall equity
Speaker 3: markets as well. We're all wondering where the Federal Reserve goes.
Speaker 3: Bitcoin just down about seven ten percent and the moment
Speaker 3: we're gonna be delving into bitcoin in a moment, but
Speaker 3: just caution and maybe treading water ahead of what's the
Speaker 3: all important spot, Bitcoin ETF that we hope, well the
Speaker 3: market anticipates might be signed off as soon as tomorrow
Speaker 3: forty seven hundred and ninety one. Move into some of
Speaker 3: the individual movers that we're looking at individual stocks that
Speaker 3: are on the move, and we really have been seeing
Speaker 3: in particular, I think this is the wrong one here,
Speaker 3: but I was looking at what was happening in the
Speaker 3: chip stocks in particular, and we are seeing the socks
Speaker 3: had been showing some under pressure, but overall seeingle recovery
Speaker 3: in chip stocks, even after Samsung told us, of course,
Speaker 3: of their revenue fall for offerittability fall and ultimately a
Speaker 3: worry about the slump continuing in chips and memory and
Speaker 3: what that means to be overall tech recovery, Unity software
Speaker 3: interesting one Pokemon Go. You might have play it and
Speaker 3: my son's pretty addicted, but look overall they're having to
Speaker 3: share jobs. We saw that after the bell being announced.
Speaker 3: We actually saw some recovery in the stock yesterday.
Speaker 5: But now it turns south.
Speaker 3: Eighteen hundred jobs or so on the block when it
Speaker 3: comes from this particular company, MicroStrategy, and look at some.
Speaker 5: Of the individual movers.
Speaker 3: When it comes to crypto and we are under a
Speaker 3: little bit of selling pressure, we receive perhaps just a
Speaker 3: pause in the run up of bitcoin prices. Remember they
Speaker 3: were eclipsing forty seven thousand yesterday. Today we just pull
Speaker 3: back to that forty six thousand dollar handlef for bitcoin.
Speaker 3: We're of by two and a half percent for micro Strategy,
Speaker 3: which of course holds an awful lot of e OG
Speaker 3: of the crypto space. Then let's talk about bitcoin. Let's
Speaker 3: talk about the spot bitcoin ETF and what it means
Speaker 3: to the rest of the market. Ayakontorovich is a busy
Speaker 3: person right now. Fractal Co CEO and co founder and
Speaker 3: You've been in this space for a long time and
Speaker 3: I'm interested. So what this ultimately means if we get
Speaker 3: the sign off January.
Speaker 11: Tenth, Absolutely, it's a pretty big move. It's going to
Speaker 11: be fifteen years after the initial genesis block of bitcoin,
Speaker 11: and what we expected is actually a rotation from GBTC
Speaker 11: Spot Bitcoin as well as the future into the ETF
Speaker 11: because not only is it cheaper, but also from a
Speaker 11: custody and security perspective, it's going to be a lot
Speaker 11: safer in terms of risks.
Speaker 12: You have bn Y Mellon who's the admin for over.
Speaker 11: Half of the ETF today, and what you'll see also
Speaker 11: is instead of paying ten plus percent for the future's
Speaker 11: carry rate, you're going to pay an applied cost of
Speaker 11: roughly twenty bits in fees, which again is a lot
Speaker 11: like cheaper. So you'll likely see the CME basis collapse,
Speaker 11: which we expect to be trading under darbid.
Speaker 3: So ultimately people get out of the futures because it's expensive,
Speaker 3: they go to the Spot Bitcoin ETF and we're.
Speaker 5: Looking at sort of a whole raft of inflows.
Speaker 3: What it ultimately means, will it be five to ten
Speaker 3: billion in the first week of trading. What sort of
Speaker 3: scale and of adoption do you anticipate, ia, I think.
Speaker 11: You know the market is priced anywhere between one to
Speaker 11: two billion. You saw standard charter that said they expect
Speaker 11: anywhere between fifty to one hundred.
Speaker 12: Billion within you know, twenty twenty four a loan. It
Speaker 12: really depends.
Speaker 11: But I say, you know today you still have open interests.
Speaker 11: That's the highest it's ever been on the CME. Though
Speaker 11: institutions are very much long Bitcoin, and because it is
Speaker 11: so expensive but also very difficult to trade on the
Speaker 11: CME directly today, whether it's through an FCM or it's
Speaker 11: through your broker, we do expect to see that migrate
Speaker 11: over to the spot etf which will just inherently be
Speaker 11: easier to trade con fractal.
Speaker 3: Of course, your business that you're building is all about
Speaker 3: trying to make trading liquidity, the whole use case of
Speaker 3: this new asset class easier. I'm interested as to what
Speaker 3: sort of scale of adoption you see for retail, Like
Speaker 3: a lot of this is about institutional buying, a lot
Speaker 3: of it so about whether or not I can get
Speaker 3: out on my pension.
Speaker 12: Exactly.
Speaker 11: And so you know, the conversations we've been having even
Speaker 11: we always talk about the stander run up or the
Speaker 11: conversations that people have in Thanksgiving when they're home with
Speaker 11: their families, and really the realistic thing is, up until
Speaker 11: now people couldn't purchase this easily in their four to
Speaker 11: one K in their I raise, and now this unlocks
Speaker 11: this entire market, which is over six trillion just in
Speaker 11: the ETF market alone in the United States. The RIA
Speaker 11: market is also massive specific in the US, and the
Speaker 11: fees for this is also relatively low. We're seeing a
Speaker 11: competition of fees as well. And aside from just your dad,
Speaker 11: your grandparents being able to purchase US, we've also seen
Speaker 11: a lot of narratives Bitcoin narratives on chain around surrounding
Speaker 11: companies that are BTC specific also have a run up
Speaker 11: into this news.
Speaker 3: It's interesting, isn't it The way in which the SEC
Speaker 3: has been trying to play this. There's been lots of
Speaker 3: anticipation and perhaps reporting that they.
Speaker 5: Didn't want to make a king maker.
Speaker 3: It sort of happened with the Future's Bitcoin ETF where
Speaker 3: prochees just got ahead of the rest of the pack.
Speaker 3: How do we decide which particular offering you go for?
Speaker 3: Is this going to be like a rush of marketing
Speaker 3: to decide which particular well, whether you go to Fidelity,
Speaker 3: whether you use are all the different vuying of spot
Speaker 3: bitcoin atf sire.
Speaker 11: I think at the end of the day, it always
Speaker 11: comes down to the comfort of the individual user and you.
Speaker 12: Know, the access that they have. If the overhead is.
Speaker 11: Going to be really high in terms of changing opening
Speaker 11: new accounts, they're probably not going to be I want
Speaker 11: to use it. And so we're seeing one in terms
Speaker 11: of access. You know, is it already sitting in someone's
Speaker 11: four one k it's the ra already exposed to that
Speaker 11: specific broker. The second is the competition around the flease.
Speaker 11: So you saw Blackrock adjusts down to twenty bits, you're
Speaker 11: seeing bit wise at twenty four arc and Venac at
Speaker 11: twenty five and then all the way up to grayscale
Speaker 11: one and a half percent, and so you know that's
Speaker 11: also a big portion of it as well. Realistically, I
Speaker 11: think when you look at the exposure Blackrock has in
Speaker 11: the specific market, it's a no brainer that they probably
Speaker 11: have the overhead in terms of just being able to
Speaker 11: access a wider market.
Speaker 3: Meanwhile, people have been in the crypto space is still
Speaker 3: looking to trade I don't know. You provide infrastructure, whether
Speaker 3: it's clear and settling sort of margin on digital assets.
Speaker 3: They're not just looking to play in bitcoin, they want
Speaker 3: old coins as well. What does the spot bitcoin ETF
Speaker 3: mean for eight for Solana, for some of the smaller
Speaker 3: old coins, the mean coins.
Speaker 11: Even Yeah, so I will be honest, you know, the
Speaker 11: the all coin market has been lagging tremendously into this move.
Speaker 11: This is the lowest level of eth BTC that we've
Speaker 11: seen over the last year, and so it's really going
Speaker 11: to be interesting now to see, you know, what's the
Speaker 11: narrative around the eth ETF once BTC is approved. And
Speaker 11: also we've seen clients trade ethe the eight future into
Speaker 11: the approval tomorrow, assuming that there might be an eth
Speaker 11: ETF coming next. On the more esoteric alts we've seen
Speaker 11: around the bitcoin narrative, you have stax st x, which
Speaker 11: is small contract on bitcoin, ordinals.
Speaker 12: And thor chain bruin.
Speaker 11: All of these are built on bitcoin and then also
Speaker 11: seen a price appreciation into the move with the CTF.
Speaker 5: I am we thank you for carving out a little
Speaker 5: bit of time. Order is a pretty hectic week. I'm
Speaker 5: sure I can.
Speaker 3: Tarovich, we thank you so much factal co CEO co founder.
Speaker 3: We always love having you in the show. Meanwhile, coming up,
Speaker 3: we're going to continue our CEES coverage. We're going to
Speaker 3: sit down with Qualcom CEO Cristiano am On. You do
Speaker 3: not want to miss that conversation. Whether it's of course
Speaker 3: the chips that have been used within auto's, whether it's
Speaker 3: in the latest VR AR. We're going to have a
Speaker 3: conversation across the bold. This is Bloomberg Technology.
Speaker 4: Welcome to our Bloomberg television and radio audiences worldwide. We
Speaker 4: are live at cs Las Vegas and we're talking to
Speaker 4: the CEO of Qualcom, Cristiano among Cristiano, good to see you,
Speaker 4: Good to see it. There is a flood of wide
Speaker 4: ranging news and announcements, but I actually want to start
Speaker 4: on your updated XR chip. This is a processor that
Speaker 4: you are going to put into headsets, mixed reality headsets
Speaker 4: that will take on the Apple Vision Pro. And I
Speaker 4: just want you to talk about how confident you are
Speaker 4: that you will take on the Apple Vision Pro and
Speaker 4: at what end of the market you're going to help support.
Speaker 2: Look, we have been a big believerance spaceship computing, and
Speaker 2: I think the arge in two It's another instance of
Speaker 2: what we have been doing generation after generation again four K,
Speaker 2: especially computer on Eachi. But most important is we've been
Speaker 2: driving how to bring scale. You see some of the
Speaker 2: partnerships we have with Meta, what were they doing with.
Speaker 7: The Quest series? We're working and announced.
Speaker 2: I think a while ago that we're working with Sansung
Speaker 2: and Google. You saw some devices being announced from Sony.
Speaker 2: I think that's a great opportunity, and the key thing
Speaker 2: is can you get that to a scale with the
Speaker 2: performance and the price point that we excite developers.
Speaker 7: I think it's a great opportunity.
Speaker 4: On the scale point, there is a feeling that Apple
Speaker 4: will come in with Division Pro or a next generation
Speaker 4: at a lower price point and just take the market
Speaker 4: based on the demand you've had for XR two plus.
Speaker 4: Is that going to be the case? So no, I
Speaker 4: think you.
Speaker 2: Have to look at this in a different way. I
Speaker 2: think Apple is doing a great job. I think what
Speaker 2: they done with Division Pro it's great. If you look
Speaker 2: at the device and to bring it to scale. All
Speaker 2: that it's going to do is to ignite the developer ecosystem.
Speaker 2: At the end of the day, those computing platforms and
Speaker 2: developers creating content the more that you have more content,
Speaker 2: and that content that they're going to help create is
Speaker 2: going to be available on.
Speaker 7: Other platforms as well, and vice versa.
Speaker 2: It's about creating the next special computing platform.
Speaker 7: It's a great opportunity.
Speaker 2: We're still in the early growth stage of this market.
Speaker 4: You have been to many cess I have been to
Speaker 4: a few. It's always hard to find the common theme.
Speaker 4: But this year there is clearly a common theme, which
Speaker 4: is AI. And you and I have talked in the
Speaker 4: past about on device AI use, particularly in the cell
Speaker 4: phone or smartphone context. This year, the PC seems to
Speaker 4: be the battleground. What is cloudcom doing AI on PC?
Speaker 2: Look, we're incredibly excited and we feel kind of what
Speaker 2: we have been saying is validated if we look at
Speaker 2: all of the other companies all announcing on device AI,
Speaker 2: something we've been talking for more than a year. If
Speaker 2: you look what we did at Snapdragon Summit, we're now Exceleite,
Speaker 2: which right now is the king of all device AI
Speaker 2: computing platform for the PC has an integrated total seventy
Speaker 2: five top stre operations per second, and we started to
Speaker 2: see what Microsoft is doing other companies doing this is exciting.
Speaker 1: Just to put in.
Speaker 2: Perspective, we have over thirty different AI models been ported
Speaker 2: to the Snapdragon platform preparing for.
Speaker 7: This on device AIPC, and it's going to change user experience,
Speaker 7: it's going to change productivity.
Speaker 2: Look at the number of CEOs talking about how they
Speaker 2: investing in this, and when you run on a device,
Speaker 2: it's more secure and you have context and you have privacy.
Speaker 4: So, as an example, has been talking about the promise
Speaker 4: of chips that power aim PC for quite a long
Speaker 4: time and it kind of hasn't materialized until now. When
Speaker 4: I posted on x and asked our audience, what are
Speaker 4: you most excited about from a technology gadget perspective twenty
Speaker 4: twenty four. To be fair, many people replied and said
Speaker 4: Snapdragon elite. So what does snap Dragon look like in
Speaker 4: the real, real world this year twenty twenty four, How
Speaker 4: many consumers can actually sit at their laptop or PC
Speaker 4: and do something of interest.
Speaker 7: Oh, you're going to be able to do a lot.
Speaker 2: So maybe just put a perspective on Excelle because there's
Speaker 2: a lot of excitement. We're very happy that a number
Speaker 2: of designs is going to launch together with the new
Speaker 2: version of Windows is going to have on device copilot,
Speaker 2: and there's so many things you'll be able to do
Speaker 2: from be able to have a computer now.
Speaker 7: That's going to predict your every moment.
Speaker 2: You're going to have copilot when you talk about the
Speaker 2: Windows ecles system across all the different applications, and there's
Speaker 2: a number of other use cases. When you think about
Speaker 2: visual models, language models, they're being developed.
Speaker 7: They're very exciting, and I think.
Speaker 2: That that's happen on PC, that's.
Speaker 7: Happening on phones, that's going to happening on cars as well.
Speaker 4: To our Bloomberg television and radio audience worldwide relive in
Speaker 4: Las Vegas at CES and we're speaking to Christiano Raman,
Speaker 4: CEO of Cloudcom. Let's set a baseline and say there
Speaker 4: is still some weakness in the global smartphone market right
Speaker 4: What functionality in this AI era is going to bring
Speaker 4: the consumer back to start the upgrade cycle to get
Speaker 4: smartphone growth like we've seen in prior cycles.
Speaker 7: So that's a great question. As far as the weakness.
Speaker 2: I think we did say in the last Learning score
Speaker 2: that the correction and the inventory correction is behind us
Speaker 2: right now. So we're excited about the market being stable,
Speaker 2: and then it leads to exactly this point that you
Speaker 2: bring up what is going to create a new upgrade
Speaker 2: cycle that people want to buy a new phone. And
Speaker 2: we're one hundred percent convinced is what's happening right now
Speaker 2: with JENAI on the phone the way you need to
Speaker 2: think about it. We have been accustomed to the experience
Speaker 2: that you have a platform or the OS platform on
Speaker 2: top of the computer, you have the apps, and you
Speaker 2: go in and you touch it. But now on of
Speaker 2: the OS you're going to have those models. They're trying
Speaker 2: to predict your every move and it's going to bring
Speaker 2: not only efficiency, but new use cases.
Speaker 7: And we've seen that.
Speaker 2: We've seen that with automatic translation, we're seeing that with
Speaker 2: web summarization.
Speaker 7: We're seeing that with ability.
Speaker 2: To create content, and they did content in real time,
Speaker 2: content that didn't exist before using visualization models and many more.
Speaker 7: And something as simple as texting is going.
Speaker 2: To have context that will allow the AI to bring
Speaker 2: information that you may want to share, you may want
Speaker 2: to schedule, all part of the experience. I'm believing the
Speaker 2: next user experience is going to be based on Jenny
Speaker 2: I on the phones, and we're optimistic that we can
Speaker 2: start to see devices as early this year with those capability.
Speaker 4: So in earliers this year. With that in mind, what
Speaker 4: is your twenty twenty four global smartphone call outlook?
Speaker 2: Difficult to make a call of the total market. I
Speaker 2: think we're just happy that the market is now stable.
Speaker 2: The correction is behind us. Let's see what our partners
Speaker 2: can launch. Stay tuned, for example, what Samsung is going
Speaker 2: to announce soon. I think there's a lot of excitement
Speaker 2: about the Snapdragon h Entry automotive.
Speaker 4: You are very bullitional automotive, and you've tried to position
Speaker 4: the company to diversify the company. The automotive is a
Speaker 4: key pillar. Ten percent of revenue is kind of the
Speaker 4: target twenty twenty six end of decade nine billion of sales.
Speaker 4: What data hits your desk that tells you you're on
Speaker 4: track for that?
Speaker 7: Oh, we're on track.
Speaker 2: I think what we had said, we're going to get
Speaker 2: to four billion fort milestone, and then we're going to
Speaker 2: get to the nine billion the end of the decade.
Speaker 2: I think we're ahead of those targets. What is really
Speaker 2: showing traction is the number of OEMs that are being
Speaker 2: working with Welcome and how we continue to add to
Speaker 2: the pipeline of design. I think what's resonating the car
Speaker 2: industry is transforming to a digital industry.
Speaker 4: Well, come plain, Sorry to interrupt with same questions with
Speaker 4: the smartphone or PC. What is the functionality If I'm
Speaker 4: a customer, end user, that's going to change my mind
Speaker 4: about buying this vehicle that has something it doesn't have
Speaker 4: today that you a contributed.
Speaker 7: Well you already seen that.
Speaker 2: See the good thing about tracking qualcom progress for us,
Speaker 2: it's less about the market size. It's more about gaining
Speaker 2: share and new models are a launching the technology. You
Speaker 2: can see some of the cars if you're going to
Speaker 2: go buy a car today, let's just say the Mercedes class,
Speaker 2: what GM is doing with their car line and many others.
Speaker 2: You have a fully immersive digital cockpit. You didn't have
Speaker 2: that before. That's enabled by Snapdragon. Right now you have
Speaker 2: those beautiful screens that are immersive and it brings you
Speaker 2: a lot of information about the car the road. On
Speaker 2: top of that, you have safety and we have a
Speaker 2: vision that assisted driving needs to be in every car.
Speaker 2: For example, the announcement we did the show and a
Speaker 2: portship with Bosh. We have now announced at the CS
Speaker 2: a central compute platform that you can have adas in
Speaker 2: a digital cockpit on the same silicon, which basically you
Speaker 2: can do that for premium cards.
Speaker 7: Now bring it to enter a level car last market.
Speaker 2: Those are going to be completely different changes in how
Speaker 2: you think about safety and how to think about your driving.
Speaker 4: Christiana, we just have thirty seconds left. But where geographically
Speaker 4: is the automotive growth coming from?
Speaker 2: Which markets for US is across the board, because you
Speaker 2: should think about us as new models, launcher or technology
Speaker 2: we gain share. We're working with all the Americans, all
Speaker 2: the Europeans, all the Koreans, all the Japanese, all the Chinese,
Speaker 2: so pretty much the entire automotive industry. I would be
Speaker 2: hard pressed to tell you a car company we're not
Speaker 2: working with car Comcia.
Speaker 4: Christiana, I'm on live from cs Las Vegas.
Speaker 11: Now.
Speaker 3: Microsoft's thirteen billion dollar investment into open Ai look at
Speaker 3: Risk is a full blown investigation by the European Union
Speaker 3: and deals watchdogs. There After a mutiny of course that
Speaker 3: the chat GPT creator laid bare, there's really deep ties
Speaker 3: between the two companies, Samaltman and of course Satia Nadella.
Speaker 3: The European Commission said on Tuesday that it's examining whether
Speaker 3: Microsoft's involvement should be vetted under the block's Mersura rules,
Speaker 3: paving the way for a formal probe and even a
Speaker 3: potential unwinding it's found to hamper fair competition. Meanwhile, let's
Speaker 3: look at another coming together. This one is the Matchmaker
Speaker 3: Match of course, company that is the parent company of
Speaker 3: many a dating app, Tinder. Hinge shares rising after a
Speaker 3: Wall Street Journal report said that Elliott Investment Management has
Speaker 3: actually built up a stake of about a billion dollars
Speaker 3: in the company. Ninbeg's Graham Star joins us now to
Speaker 3: discuss as to what they are currently concerned about. Why
Speaker 3: are they building up why do they want to be
Speaker 3: pushing for.
Speaker 13: Change a match So over the last four quarters, match
Speaker 13: which owns Tinder, the largest dating app in the world,
Speaker 13: has seen a consistent decline in paid subscribers, even though
Speaker 13: it's increased the average revenue per user. Elie other investors
Speaker 13: are likely to be concerned.
Speaker 4: About that number.
Speaker 13: There's been a lot of pressure on the company to
Speaker 13: increase that subscriber number. They've rolled out new subscription plans
Speaker 13: as well as new offerings to try and get new subscribers,
Speaker 13: new paid users. That's likely the goal for the year.
Speaker 13: Something I want to make clear is that there are
Speaker 13: no cell ratings on match Group or even a close competitor, Bumble,
Speaker 13: which has also seen a very similar decline over.
Speaker 1: The last year.
Speaker 3: Many would say this is a normalization, of course, like
Speaker 3: many a stock when absolutely gangbusters during COVID because we're
Speaker 3: all stuck at home, people dating using apps far more,
Speaker 3: and then a realization that maybe the way in which
Speaker 3: we date hasn't changed that much. But if they are
Speaker 3: trying to charge sixty dollars per user, if you're really
Speaker 3: active data, if they are trying to already change things up,
Speaker 3: and Bernard Kim taking over in terms of steering Tinder
Speaker 3: as well directly, and what can they really.
Speaker 13: Do, do you think, Well, not just sixty dollars a month.
Speaker 13: Late last year they rolled out a five hundred dollars
Speaker 13: a month plan for Tinder as well, part of the
Speaker 13: same Mac withsition that they bought the League, which is
Speaker 13: again a very expensive dating app that is geared towards
Speaker 13: career minded individuals in twenty twenty two. It is this
Speaker 13: investment in different ways in which communities can develop, or
Speaker 13: they can develop community focus dating apps. They also launch Archer,
Speaker 13: which is focused on queer and bisexual and gay men,
Speaker 13: as well as leaning into these other apps that they.
Speaker 3: Own, add campaigns, pricing plans, ultra premium tiers. Is it
Speaker 3: just more now that the investor base just thinks, oh good,
Speaker 3: an activist investor might just start to drive.
Speaker 5: Even more change or more view of the value of
Speaker 5: the parts of this business.
Speaker 13: I think there's also a goal for consistency. The company
Speaker 13: has seen churn in its CEOs. It has not had
Speaker 13: a CEO for longer than two years. Bernard Kim has
Speaker 13: been CEO for less than two years at this point.
Speaker 13: He's now been CEO of Tinder. In addition to Match Group,
Speaker 13: the company's pricing plans see consistent churn, as you can
Speaker 13: see with analysts attribute to just generally high pricing plans.
Speaker 4: Overall, I think.
Speaker 13: What investors are looking for is consistency that the company
Speaker 13: can get more consistent, paid, active users.
Speaker 3: We'll see if Elliott Management and Elliot Investment Management can
Speaker 3: help stay with that Graham style. Great to have you on,
Speaker 3: Thank you so much. Meanwhile, that does it for this
Speaker 3: edition of Bloomberg Technology. The CES coverage does not stop
Speaker 3: and continues tomorrow as well. Check it out on our
Speaker 3: podcast if you need to recap, this is Bloomberg technology.