WEBVTT - Instant Reaction: Apple Delivers Upbeat Forecast

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is a breaking

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<v Speaker 1>news update from Bloomberg. Instant reaction and analysis from our

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<v Speaker 1>three thousand journalists and analysts around the world.

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<v Speaker 2>Just want to get to Apple. Let's get to it.

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<v Speaker 2>First quarter revenue one hundred and forty three point seventy

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<v Speaker 2>six billion, Yes, a big beat. One hundred and thirty

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<v Speaker 2>eight point four billion was what the street was expecting.

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<v Speaker 2>First quarter EPs also a big beat. Two dollars eighty

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<v Speaker 2>four cents a share. The street estimate was for two

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<v Speaker 2>dollars sixty eight cents a share Greater China. They've been

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<v Speaker 2>struggling there. Revenue in Greater China twenty five point fifty

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<v Speaker 2>three billion dollars, folks, That is a beat. Twenty one

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<v Speaker 2>point eighty two billion dollars was what the street was expecting.

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<v Speaker 2>That's a new all time EPs record though overall, and

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<v Speaker 2>the install base now has more than two and a

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<v Speaker 2>half billion active devices. Well, got to say investors like

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<v Speaker 2>in this report. In the Aftermarkett still up about two

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<v Speaker 2>percent here in the postmarket trade. Hey, let's see what

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<v Speaker 2>Bloomberg News Managing editor for Global Tech Consumer Tech thinks

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<v Speaker 2>about this. He is Mark German, knows everything about this company,

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<v Speaker 2>lots of exclusives. This feels pretty good.

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<v Speaker 3>Tim Cook has to keep his job, at least for now.

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<v Speaker 3>This is a massive, massive, massive quarter. This is a

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<v Speaker 3>home run. Their greatest quarter ever by orders of magnitude.

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<v Speaker 3>It's a gigantic beat on overall revenue. China is back.

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<v Speaker 3>You have a big beat on the iPhone in particular.

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<v Speaker 3>Eighty five billion dollar quarter is just insane. The installed

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<v Speaker 3>based two and a half billion. The numbers are just

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<v Speaker 3>beyond excellent. We could ignore the fact that they missed

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<v Speaker 3>on wearables, home and accessories. We can ignore the fact

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<v Speaker 3>they missed on Mac. We could ignore the fact that

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<v Speaker 3>they barely you know, crossed expectations on services. I guess

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<v Speaker 3>none of that matters when the iPhone is selling so well.

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<v Speaker 3>But still there's the big existential question of what's next.

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<v Speaker 3>It's an important question because of AI and Apple absolutely

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<v Speaker 3>needs to figure out what's AI strategy. There needs to

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<v Speaker 3>be an AI reckoning of some sort there. But they

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<v Speaker 3>just bought themselves a very long time with this just

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<v Speaker 3>insanely great quarter.

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<v Speaker 1>So let's talk about a couple of the areas that

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<v Speaker 1>you highlighted there. One is China and Another one is

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<v Speaker 1>the sort of the concerns that people had about memory

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<v Speaker 1>chips in this quarter and the rising prices of memory chips.

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<v Speaker 1>How was Apple able to navigate this so it didn't

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<v Speaker 1>hit its margins like people thought it would.

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<v Speaker 3>They buy components and memory components quarters and months in advance,

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<v Speaker 3>sometimes years in advance. They have these deals struck, so

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<v Speaker 3>they're working off of numbers and pricing and materials here

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<v Speaker 3>that really give them extensive pricing power over competitors. So

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<v Speaker 3>we'll hear more about that on a call today, But

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<v Speaker 3>it seems like they're fine.

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<v Speaker 2>Mark, I love this. I mean, I'm looking at our

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<v Speaker 2>live blog, so you must have like kicked this out

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<v Speaker 2>before you jumped on air with us. But you did

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<v Speaker 2>mention that the significant things on the call. You you've

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<v Speaker 2>already talked about the AI strategy succession. You've kind of

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<v Speaker 2>said maybe that's off the table for now because this

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<v Speaker 2>was such a blowout quarter. You talk about the long

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<v Speaker 2>term viability of the business if it doesn't get its

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<v Speaker 2>AI act together. It's hard to even think about that

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<v Speaker 2>when you see the numbers here and just what a

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<v Speaker 2>big company this is and how significant is I feel

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<v Speaker 2>like in so many different people's lives, like I have

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<v Speaker 2>an Apple household. I think Tim has an Apple household.

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<v Speaker 2>Is that is that really the long term viability if

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<v Speaker 2>they don't get AI together.

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<v Speaker 1>Call me Tim Apple.

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<v Speaker 2>In fact they do, that's.

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<v Speaker 3>Yes, I said long term right and the talking really

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<v Speaker 3>and walking really long? Okay, uh, the little, the little,

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<v Speaker 3>the really long term here right, Like, at some point

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<v Speaker 3>there is going to be a need to fulfill these

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<v Speaker 3>AI desires and you know they're going to have to

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<v Speaker 3>figure that out well.

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<v Speaker 2>Onor ag Ranov our BI team. He talked with Tim

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<v Speaker 2>and I just moments ago, and he talked about, you

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<v Speaker 2>know how they're working with Google when it comes to AI,

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<v Speaker 2>relying on them right now for their models, and so

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<v Speaker 2>they're not doing the big AI spend. That makes sense

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<v Speaker 2>for now too. So do you agree that that's kind

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<v Speaker 2>of a smart strategy now and kind of waiting it

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<v Speaker 2>out a little bit, But at some point they've got

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<v Speaker 2>to kind of do their own thing.

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<v Speaker 3>It's not that they're waiting it out. It's that they

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<v Speaker 3>have no choice, They have nothing internal. So it's not

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<v Speaker 3>that they're waiting it out, it's that they need to

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<v Speaker 3>do it. And so they're partnering with the best partner

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<v Speaker 3>they can that's going to offer them the best pricing power,

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<v Speaker 3>which for now is Google. They initially wanted to work

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<v Speaker 3>with Anthropic, but from a pricing standpoint, that didn't work out.

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<v Speaker 3>They couldn't work with open Ai because they're, you know,

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<v Speaker 3>hardcore competitors at this point. So Google is all who

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<v Speaker 3>was left. And obviously the judge didn't break up the

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<v Speaker 3>search deal there, so it made sense and it'll aligned

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<v Speaker 3>pretty nicely for them.

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<v Speaker 1>Okay, do we know yet how Apple was able to

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<v Speaker 1>beat expectations in China once again for the first quarter

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<v Speaker 1>the most recent quarter, Greater China revenue came in at

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<v Speaker 1>twenty five point five to three billion dollars. Twenty one

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<v Speaker 1>point eight two was the estimate. You said it minutes ago.

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<v Speaker 1>It is back in China. You're holding up an iPhone

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<v Speaker 1>right now. That's what they did.

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<v Speaker 3>I'm answering your question. I'm answering your question.

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<v Speaker 1>It was the iPhone seven color orange. Oh, it's the

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<v Speaker 1>color orange. It's that easy.

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<v Speaker 3>It is the Promax. No, it's design. People buy the

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<v Speaker 3>new designs. This is the first new design in half

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<v Speaker 3>a decade. It got it done. That's why you do

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<v Speaker 3>new designs because you're trying to bring in new customers,

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<v Speaker 3>why does for upgrades? And but that's the way to

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<v Speaker 3>do it.

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<v Speaker 1>Didn't They know that?

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<v Speaker 3>Of course they know that, But it takes time to

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<v Speaker 3>do these new designs and you kind of want to

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<v Speaker 3>get it right. And then you can't do it too

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<v Speaker 3>often because if you do it too often, it doesn't

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<v Speaker 3>have the power that it has if you do it

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<v Speaker 3>only every so often.

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<v Speaker 2>Hey, I want to roll into this a story you've

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<v Speaker 2>got on the Bloomberg that you put out today, and

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<v Speaker 2>this has to do with Apple buying the Israeli AI

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<v Speaker 2>startup that interprets facial movement QAI. Is this important?

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<v Speaker 3>I think it's going to enable some features for future

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<v Speaker 3>air pods and smart glasses and mixed reality headsets and

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<v Speaker 3>all that, but it's not fundamental to the overall AI strategy,

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<v Speaker 3>which I think they're still trying to figure out. Also,

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<v Speaker 3>just one piece of the puzzle, Okay.

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<v Speaker 1>Mark. Another story that you reported on this week, Apple's

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<v Speaker 1>Tim Cook calls for a de escalation after Alex Pretti's

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<v Speaker 1>shooting in Minneapolis. There's this thread that Tim Cook is

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<v Speaker 1>trying to a needle that Tim Cook is trying to thread.

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<v Speaker 1>He was at the White House on Saturday, and to

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<v Speaker 1>do a.

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<v Speaker 3>Very good job. Why not the needle. Well, I think

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<v Speaker 3>his statement was kind of worthless in some respects. I

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<v Speaker 3>think that he's spent. I don't know if it's at

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<v Speaker 3>this statement talking about how the president, the one who's

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<v Speaker 3>overseeing the policies that led to the situation of Minneapolis,

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<v Speaker 3>has his ears wide open to listen to feedback. I mean,

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<v Speaker 3>I'm not sure that's what his employees, who are sort

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<v Speaker 3>of revolting internally about this, we're looking for. I think

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<v Speaker 3>they were looking for Tim Cook to take some sort

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<v Speaker 3>of stand here, and he really didn't. You know. From

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<v Speaker 3>his perspective is he's scared to upset Trump and get

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<v Speaker 3>tariffs and other policies slapped onto Apple's business. So you'll

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<v Speaker 3>see him continue to do what he's doing, because this

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<v Speaker 3>is not about taking a stand at this point for him,

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<v Speaker 3>this is about protecting the underlying business, and the results

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<v Speaker 3>speak from themselves. Underlying business seems pretty well protected.

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<v Speaker 2>Great stuff as always, and we'll be looking for your reporting.

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<v Speaker 2>He is Mark URMs, Thank you, Mark, Managing editor for

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<v Speaker 2>Global Consumer Tech for Bloomberg News. Out there out there

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<v Speaker 2>on the West Coast, well, let's.

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<v Speaker 1>Bringing Ed Ludlow. He's the coast of Bloomberg Tech on

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<v Speaker 1>Bloomberg TV. He joins us from our San Francisco bureau.

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<v Speaker 1>Ed the story from Mark German is out sales trouncing

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<v Speaker 1>estimates after iPhone fuels record quarter. Tim Cook called the

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<v Speaker 1>demand quote unprecedented. Is this all about the iPhone doing

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<v Speaker 1>well around the world?

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<v Speaker 4>Old? Yeah, all about the iPhone And in some ways

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<v Speaker 4>it's like an issue of chronology and timing, right. Think

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<v Speaker 4>about when Apple announces the iPhone seventeen generation and we're

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<v Speaker 4>all there and Cooper Tino for it, and then it

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<v Speaker 4>goes on sale and you have the holiday quarter, so

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<v Speaker 4>you know, actually it goes a little bit beyond that. Yeah,

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<v Speaker 4>you know, this is where the Bloomberg terminal comes in useful.

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<v Speaker 4>So that is a big beat. You can just see

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<v Speaker 4>it looking at the headline on a dollar basis. But

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<v Speaker 4>not only is it nine percent above consensus even the

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<v Speaker 4>top end of the most bullish ranges on how this

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<v Speaker 4>iPhone would do, we're only about eighty one billion dollars.

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<v Speaker 4>I think it came in above eighty five billion dollars.

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<v Speaker 4>So they've done something. Either the phone has got traction

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<v Speaker 4>or they've done something smart with the timing of it

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<v Speaker 4>and it's sold well. The bit that's missing, of course,

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<v Speaker 4>is that that commentary does not have anything specific to

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<v Speaker 4>do with Greater China. We know the numbers in Greater

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<v Speaker 4>China are really good, but how did this iPhone do there?

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<v Speaker 2>Yeah, like, is it just whoa just a good quarter

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<v Speaker 2>or do was it luck or was it really strategy?

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<v Speaker 2>Right of understanding.

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<v Speaker 4>I'm super cautious because sometimes we've relied on third party

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<v Speaker 4>data like you. I won't name it, it would be

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<v Speaker 4>a bit unfair, but there are various third party data

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<v Speaker 4>sets that say, oh, no, Apple's doing really bad.

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<v Speaker 1>You're talking about it's okay, okay, I'll.

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<v Speaker 4>Stick to my guns and you know, and then Apple

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<v Speaker 4>comes around with earnings and the opposite has been true

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<v Speaker 4>on more than one occasion. But this occasion, like the

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<v Speaker 4>third party data that this sort of incremental and anecdote

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<v Speaker 4>of people queuing up for the iPhone seventeen in all markets,

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<v Speaker 4>but like Greater China, it was kind of there. So

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<v Speaker 4>so that's interesting. Where else do you want to go?

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<v Speaker 1>I mean this, you know, this is Apple.

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<v Speaker 4>There's anything we want to go to AI? Because yes,

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<v Speaker 4>you want to ask me about the thing that they

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<v Speaker 4>have nothing to say about.

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<v Speaker 1>WHOA sure every analyst is really pointed to that. I mean,

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<v Speaker 1>we can we can talk about the relationship that Apple

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<v Speaker 1>has with with Google and for gem and we could

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<v Speaker 1>talk about all the money going to Open AI potentially

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<v Speaker 1>from Amazon and other companies, about a potential one hundred

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<v Speaker 1>billion dollar fundraising around We could talk about Apple relying

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<v Speaker 1>on third parties rather than building its own Is there

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<v Speaker 1>a risk in doing that?

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<v Speaker 4>I go back to basics, and you know, I kind

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<v Speaker 4>of rely on Bloomberg's Mark Guman, who is one of

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<v Speaker 4>the world's leading journalists when it comes to covering not

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<v Speaker 4>just Apple but consumer electronics. And in the context of

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<v Speaker 4>this earnings print, what he's written is probably true that

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<v Speaker 4>Apple has done enough to mask over or allay the

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<v Speaker 4>concerns that investors have about a lack of progress in

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<v Speaker 4>AI as a product. You know, the reporting's quite clear,

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<v Speaker 4>and it's been announced now officially, right that at least

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<v Speaker 4>on the interim, Apple's AI generation of Siri will be

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<v Speaker 4>underpin underpinned by Gemini. And Mark's reported a lot about

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<v Speaker 4>the financials around that. Right, it's a one billion perannum agreement.

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<v Speaker 4>We don't. We don't and you won't get this sort

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<v Speaker 4>of announcement like here it is, here's the date it's coming,

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<v Speaker 4>and this is what it can do until it's here.

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<v Speaker 4>You know, that's not how Apple operates.

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<v Speaker 2>Yeah, it's just you know, I mean it's pretty like

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<v Speaker 2>like where do you go? Where do you go?

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<v Speaker 3>You know?

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<v Speaker 2>Here we are looking. I mean the stock isn't up

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<v Speaker 2>as much as it was earlier. We were talking about,

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<v Speaker 2>you know, more than a two percent gain. I think

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<v Speaker 2>at its highs here in the aftermarket, it's just up

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<v Speaker 2>about three quarters of one percentage point. What is it

0:11:31.559 --> 0:11:34.880
<v Speaker 2>that they need to do? Maybe on the call? Is

0:11:34.880 --> 0:11:37.800
<v Speaker 2>it ai? Is it that this is sustainable, this is

0:11:37.840 --> 0:11:41.040
<v Speaker 2>a strategy, this is you know, we figured out China.

0:11:40.920 --> 0:11:45.360
<v Speaker 4>Like, what is it? Well? You know that I don't

0:11:45.360 --> 0:11:47.400
<v Speaker 4>forgive me because I was blogging, I didn't hear what

0:11:47.400 --> 0:11:50.520
<v Speaker 4>you guys were talking about just before. But in this

0:11:50.760 --> 0:11:54.160
<v Speaker 4>very limited earnings release and statement, you guys maybe you

0:11:54.200 --> 0:11:55.800
<v Speaker 4>went over the risk factors and forward looking.

0:11:55.920 --> 0:11:58.040
<v Speaker 1>Yeah, we talked about that. We talked about that, you know,

0:11:58.080 --> 0:12:00.360
<v Speaker 1>I talked about how you started pointing that out back

0:12:00.400 --> 0:12:01.680
<v Speaker 1>in May of last year.

0:12:02.520 --> 0:12:04.319
<v Speaker 4>In May of last year, I was sat next to

0:12:04.360 --> 0:12:06.560
<v Speaker 4>the you two at New York studio, do you remember,

0:12:06.600 --> 0:12:08.360
<v Speaker 4>and we were like, oh, that's interesting, and they've never

0:12:08.400 --> 0:12:09.000
<v Speaker 4>said that before.

0:12:09.280 --> 0:12:12.720
<v Speaker 1>But that was only your first report post Liberation Day, right.

0:12:13.080 --> 0:12:15.600
<v Speaker 4>The only observation I'll make in line with that is

0:12:15.640 --> 0:12:19.200
<v Speaker 4>that this release also says nothing about the environment for

0:12:19.280 --> 0:12:23.679
<v Speaker 4>memory chips. And you know, like memory chip prices are

0:12:23.760 --> 0:12:24.960
<v Speaker 4>very high.

0:12:24.640 --> 0:12:26.600
<v Speaker 2>But their margin was so good, right.

0:12:26.800 --> 0:12:29.559
<v Speaker 4>And their margins were pretty good, and there's a scarcity,

0:12:29.640 --> 0:12:32.440
<v Speaker 4>and that the principal difference is like this. This is

0:12:32.440 --> 0:12:34.720
<v Speaker 4>why it's so fun to cover hardware companies. And it's

0:12:34.760 --> 0:12:37.240
<v Speaker 4>a privilege to be a technology journalist when you get

0:12:37.280 --> 0:12:40.199
<v Speaker 4>access to all these companies and speak to the CEOs.

0:12:40.679 --> 0:12:43.480
<v Speaker 4>If you're a very big company, you have leverage with

0:12:43.559 --> 0:12:46.439
<v Speaker 4>your supply base. If a supplier has to choose, I've

0:12:46.480 --> 0:12:48.720
<v Speaker 4>got this number of things and I can only send

0:12:48.760 --> 0:12:50.400
<v Speaker 4>them here, or I can send them there, or I

0:12:50.400 --> 0:12:53.560
<v Speaker 4>can split. It helps to be Apple, is what I'm saying.

0:12:53.800 --> 0:12:56.720
<v Speaker 4>And there are companies that I've covered whose CEOs you know,

0:12:56.760 --> 0:12:59.640
<v Speaker 4>will privately just agonize over how difficult it is to

0:12:59.640 --> 0:13:02.200
<v Speaker 4>convince supplies to give them the things they need. So

0:13:02.400 --> 0:13:04.160
<v Speaker 4>on the call that will come up. You know, the

0:13:04.280 --> 0:13:06.000
<v Speaker 4>cell sider likely to ask about it.

0:13:06.360 --> 0:13:09.280
<v Speaker 1>But you know, there are high prices, and then there's

0:13:09.320 --> 0:13:11.800
<v Speaker 1>Apple dealing with high prices. And when I asked Mark

0:13:11.880 --> 0:13:14.840
<v Speaker 1>this question about how they were able to successfully navigate

0:13:14.840 --> 0:13:18.160
<v Speaker 1>these higher memory prices, he said, well, one they're Apple,

0:13:18.200 --> 0:13:20.800
<v Speaker 1>and two they buy so far in advance, and they

0:13:20.840 --> 0:13:23.480
<v Speaker 1>buy the components too that go in, so at a

0:13:23.480 --> 0:13:26.000
<v Speaker 1>certain point ed it'll hit them.

0:13:26.080 --> 0:13:26.360
<v Speaker 2>Right.

0:13:27.600 --> 0:13:33.960
<v Speaker 4>Well, it's not just that the memory prices are high.

0:13:34.600 --> 0:13:37.839
<v Speaker 4>The reason that memory prices are high is that historically

0:13:37.880 --> 0:13:42.920
<v Speaker 4>memory dram and and flash memory is a very cyclical

0:13:43.080 --> 0:13:45.760
<v Speaker 4>up and down business. Boom and bust. You know, that's

0:13:45.760 --> 0:13:47.679
<v Speaker 4>what I and King would say, boom and bust in

0:13:47.840 --> 0:13:52.160
<v Speaker 4>King leads are semiconductive coverages right at Apploomberg. And it

0:13:52.280 --> 0:13:55.600
<v Speaker 4>is correct that Apple supply chain teams are its secret source.

0:13:55.640 --> 0:13:57.319
<v Speaker 4>You know, that was Tim Cook's whole thing. He was

0:13:57.400 --> 0:14:00.760
<v Speaker 4>coo like, that's what he was good at. But the

0:14:00.840 --> 0:14:04.199
<v Speaker 4>reason prices are high is because of scarcity of availability,

0:14:04.840 --> 0:14:08.000
<v Speaker 4>you know, because there is such demand for equivalent chips

0:14:08.040 --> 0:14:11.040
<v Speaker 4>that are going into data centers and so like Mark's

0:14:11.080 --> 0:14:13.960
<v Speaker 4>answer is appropriate. Apple has leverage and the ability of

0:14:14.040 --> 0:14:17.480
<v Speaker 4>scale to say like, Okay, we have got ahead of this,

0:14:17.960 --> 0:14:20.280
<v Speaker 4>and one would imagine that their supply chain team is

0:14:20.360 --> 0:14:23.920
<v Speaker 4>sophisticated enough to have foreseen some of the things that

0:14:23.920 --> 0:14:26.120
<v Speaker 4>we're now experiencing in that market.

0:14:26.440 --> 0:14:30.480
<v Speaker 1>So the first thing Mark said to us, I no, no,

0:14:30.560 --> 0:14:33.440
<v Speaker 1>you were blogging ed and you were looking at the results.

0:14:34.440 --> 0:14:37.200
<v Speaker 1>Was Tim Cook just bought himself time? Tim Cook gets

0:14:37.240 --> 0:14:40.360
<v Speaker 1>to keep his job. I mean, there's been a lot

0:14:40.360 --> 0:14:42.760
<v Speaker 1>of questions about succession. Mark says, That's one of two

0:14:42.840 --> 0:14:44.560
<v Speaker 1>questions he would ask on the call. The other would

0:14:44.560 --> 0:14:49.200
<v Speaker 1>be about AI in your view, was his job not

0:14:49.640 --> 0:14:53.000
<v Speaker 1>at risk? But you know there are questions about who

0:14:53.080 --> 0:14:54.680
<v Speaker 1>leads this company after Tim Cook.

0:14:56.760 --> 0:15:03.840
<v Speaker 4>I am not Bloomberg's Mark g What right is that?

0:15:04.680 --> 0:15:08.400
<v Speaker 4>When Mark did that recent reporting and it's been it's

0:15:08.440 --> 0:15:12.280
<v Speaker 4>been over a period of time about which executives are

0:15:12.320 --> 0:15:15.840
<v Speaker 4>now more at the forefront of Apple's future, he was

0:15:15.920 --> 0:15:19.680
<v Speaker 4>crystal clear in that reporting that there is no suggestion

0:15:20.840 --> 0:15:24.920
<v Speaker 4>that Tim Cook being replaced or stepping down or retiring

0:15:25.040 --> 0:15:28.360
<v Speaker 4>is imminent. You know that that that this was a

0:15:28.400 --> 0:15:32.320
<v Speaker 4>longer term thing. What I would reflect on is the

0:15:32.320 --> 0:15:35.160
<v Speaker 4>conversations that I have with people in industry and those

0:15:35.200 --> 0:15:37.640
<v Speaker 4>that come on the show and talk about it is

0:15:38.120 --> 0:15:42.000
<v Speaker 4>you know, Tim cook is is the operator that many

0:15:42.040 --> 0:15:45.640
<v Speaker 4>people would want. In an environment like this where we

0:15:45.720 --> 0:15:50.200
<v Speaker 4>still have trade and tariff considerations, the movement of goods

0:15:50.240 --> 0:15:53.000
<v Speaker 4>between borders from point A to point B is quite difficult.

0:15:53.960 --> 0:15:57.200
<v Speaker 4>And as we just talked about, you know, like specifically

0:15:57.240 --> 0:16:00.640
<v Speaker 4>memory pricing, that's within his you know, his his range.

0:16:00.680 --> 0:16:02.680
<v Speaker 4>This is not me speaking, This is how people would

0:16:02.680 --> 0:16:05.920
<v Speaker 4>relay it to me. Mark when he goes on air

0:16:05.960 --> 0:16:07.520
<v Speaker 4>and when he writes, and again I'm not speaking on

0:16:07.560 --> 0:16:09.680
<v Speaker 4>his behalf. He would talk a lot more about the

0:16:09.720 --> 0:16:13.920
<v Speaker 4>product you know, fresh products, reiterated and renewed products, in

0:16:13.960 --> 0:16:17.520
<v Speaker 4>the product pipeline for the future. And right now, I

0:16:17.560 --> 0:16:20.160
<v Speaker 4>don't know that people are necessarily so worried about that,

0:16:20.480 --> 0:16:22.680
<v Speaker 4>at least in my world. They are worried about when

0:16:22.720 --> 0:16:24.640
<v Speaker 4>they're going to get the software bit right with AI.

0:16:25.160 --> 0:16:27.280
<v Speaker 2>You know, it's interesting, you say, AI. It's something we

0:16:27.520 --> 0:16:30.720
<v Speaker 2>talked about just briefly with Mark German. It's a story

0:16:30.760 --> 0:16:33.480
<v Speaker 2>that he put out Apple bys Israeli AI startup that

0:16:33.560 --> 0:16:38.120
<v Speaker 2>interprets facial movements. He's like, you know, interesting will help

0:16:38.160 --> 0:16:40.960
<v Speaker 2>in terms of I guess product development, but not necessarily

0:16:42.280 --> 0:16:43.360
<v Speaker 2>a big big deal.

0:16:43.880 --> 0:16:45.520
<v Speaker 1>So Ed, we have one time for one more question,

0:16:45.560 --> 0:16:47.760
<v Speaker 1>and we'd be really remiss if we didn't ask you

0:16:47.760 --> 0:16:50.280
<v Speaker 1>your view on AMAZ. This news come in just late

0:16:50.320 --> 0:16:52.880
<v Speaker 1>in the day, switching gears a little bit still on Ai,

0:16:52.920 --> 0:16:56.280
<v Speaker 1>Amazon talk and talks to invest fifty billion dollars and

0:16:56.440 --> 0:16:59.480
<v Speaker 1>open Ai expand tizzed this could be part of a

0:16:59.560 --> 0:17:05.080
<v Speaker 1>one high hundred billion dollar funding round, which would value

0:17:05.560 --> 0:17:08.800
<v Speaker 1>open Ai at more than eight hundred billion dollars. When

0:17:08.840 --> 0:17:11.479
<v Speaker 1>we're talking about a funding round of one hundred billion dollars,

0:17:11.520 --> 0:17:15.639
<v Speaker 1>I mean we're talking about just the massive, massive scale.

0:17:16.280 --> 0:17:19.320
<v Speaker 1>What does it mean that that Amazon could invest this

0:17:19.440 --> 0:17:19.960
<v Speaker 1>much money.

0:17:21.000 --> 0:17:24.520
<v Speaker 4>Well, Amazon probably can invest that much money. You know.

0:17:24.680 --> 0:17:27.520
<v Speaker 4>What we've seen is most of the hyperscalers that were

0:17:27.520 --> 0:17:31.600
<v Speaker 4>wedded to one player have diversified, and Thropic and Microsoft

0:17:31.880 --> 0:17:35.520
<v Speaker 4>deepened their interaction. And Thropic was very heavily aligned with Amazon.

0:17:36.119 --> 0:17:39.440
<v Speaker 4>Google and Anthropic have very heavily aligned and propic relies

0:17:39.480 --> 0:17:43.440
<v Speaker 4>on TPUs. Amazon from a software perspective, has tried to

0:17:43.480 --> 0:17:46.000
<v Speaker 4>accommodate all the players on its Bedrock platform, which is

0:17:46.000 --> 0:17:49.560
<v Speaker 4>basically a workplace where you can either train or build

0:17:49.600 --> 0:17:52.880
<v Speaker 4>on top of existing models. So the financials are there,

0:17:52.920 --> 0:17:55.000
<v Speaker 4>like if you have a if people are watching that

0:17:55.080 --> 0:17:57.960
<v Speaker 4>are investors in those companies, phone me explain the dilution,

0:17:58.080 --> 0:18:03.240
<v Speaker 4>to me, explain the post and pre evaluation. But open

0:18:03.280 --> 0:18:06.840
<v Speaker 4>ai needs capital. It is coming from multiple places apparently,

0:18:07.760 --> 0:18:10.639
<v Speaker 4>and one would imagine based on the reporting that's been

0:18:10.680 --> 0:18:14.159
<v Speaker 4>done by Bloomberg and others, this is a big, large

0:18:14.200 --> 0:18:17.119
<v Speaker 4>anchor round before a future I PO as well of

0:18:17.160 --> 0:18:18.879
<v Speaker 4>some part of the open ai entity.

0:18:19.040 --> 0:18:21.879
<v Speaker 1>The scale is just otherworldly, the amounts of money that

0:18:21.880 --> 0:18:22.880
<v Speaker 1>we're talking about right now,