WEBVTT - Block's Bullish Nature, Disney's Succession Plans 0:00:00.160 --> 0:00:10.520 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.760 --> 0:00:13.080 From Marhart where Innovation, money and power Collie in Silicon 0:00:13.200 --> 0:00:17.599 Valley NBN. This is Bloomberg Technology with Caroline. 0:00:17.160 --> 0:00:18.639 Hyde and Ed loved Love. 0:00:33.280 --> 0:00:35.000 Live from London and San Francisco. 0:00:35.159 --> 0:00:37.839 This is Bloomberg Technology coming up close your eyes and 0:00:37.880 --> 0:00:41.239 by Why Muddy Waters founder Carson Block is bullish on 0:00:41.320 --> 0:00:42.080 big tech. 0:00:42.720 --> 0:00:45.720 Plus the future at Disney's Kingdom. Details on the company's 0:00:45.760 --> 0:00:48.800 new leadership moves and CEO succession plans. 0:00:49.800 --> 0:00:52.479 Plus we'll hear from the Taiwanese premiere on the country's 0:00:52.640 --> 0:00:56.400 thriving chip business. But first quick check on these markets, 0:00:56.400 --> 0:01:00.560 which are perhaps taking a slight pause ahead of some weeks. 0:01:00.600 --> 0:01:02.440 I focus in on crypto ed we're down by more 0:01:02.480 --> 0:01:05.000 than two percent there. We've actually seen more than two 0:01:05.080 --> 0:01:09.880 billion flow into ETFs. Of course, at Byspot Bitcoin, for example, 0:01:10.080 --> 0:01:12.440 we were near seventy thousand dollars. We're just pulling back 0:01:12.480 --> 0:01:16.119 slightly as risk sentiment changes ahead of all important earnings week, 0:01:16.200 --> 0:01:19.520 all important election in the next coming two weeks. But 0:01:19.560 --> 0:01:21.880 we focus in on crypto just to show us what 0:01:22.040 --> 0:01:23.680 risk sentiment's released showing us today. 0:01:23.680 --> 0:01:25.880 But you looking at the micros, Yeah. 0:01:25.680 --> 0:01:28.039 There's a few tech stocks that we're following throughout the show. 0:01:28.120 --> 0:01:31.880 Disney has named former Morgan Stanley CEO James Gorman as 0:01:31.920 --> 0:01:34.520 its new chair of the board and promising to name 0:01:34.560 --> 0:01:37.000 a new CEO early twenty twenty six. 0:01:37.040 --> 0:01:38.160 Will bring you the details. 0:01:38.400 --> 0:01:41.920 Microsoft has some new AI agents it's taking on salesforce. 0:01:42.040 --> 0:01:44.119 We go to our correspondent on that and look at 0:01:44.120 --> 0:01:47.600 the US listed shares of Taiwan. Semikinducts are actually continuing 0:01:47.640 --> 0:01:50.880 to gain momentum. We have a very important interview with 0:01:50.960 --> 0:01:54.520 Taiwan's premiere where we talk about the golden jewel of 0:01:54.600 --> 0:01:57.880 their industry, but also some of their energy needs. The 0:01:57.920 --> 0:02:00.960 broader context of what's happening in Semikindum is for that nation. 0:02:01.320 --> 0:02:02.720 You don't want to miss it. Halfway through the. 0:02:02.640 --> 0:02:04.720 Program, Carrot, we don't. 0:02:04.760 --> 0:02:07.800 Meanwhile, we returned to the macro picture because earlier today 0:02:07.880 --> 0:02:11.200 Muddy Waters Capital founder Carson Block joined Bloomberg Television and 0:02:11.240 --> 0:02:14.200 he oftened this pretty bullish advice on the Magnificent seven. 0:02:15.120 --> 0:02:18.960 There's a debate as to what really drives when you 0:02:18.960 --> 0:02:21.160 talk about the US market, especially the S and P 0:02:21.320 --> 0:02:26.360 five hundred or the mag seven. I'm in the camp that, 0:02:26.560 --> 0:02:30.520 although I haven't I don't have the facility with math 0:02:30.600 --> 0:02:32.760 to really try to prove this out. But I'm in 0:02:32.800 --> 0:02:38.440 the camp that believes of what drives that index are flows. 0:02:38.960 --> 0:02:43.120 And so at the end of every month, US workers, 0:02:43.200 --> 0:02:45.240 you know a lot of them, their paychecks go into 0:02:45.240 --> 0:02:48.280 their four one case, which are retirement funds, and there's 0:02:48.320 --> 0:02:51.600 a robo bid for the stocks. And what happens is 0:02:52.160 --> 0:02:55.840 you reduce the effective supply of stock because you're taking 0:02:55.880 --> 0:02:59.480 out the active owners of stocks that will decide, Hey, 0:02:59.560 --> 0:03:01.800 at this part, I'm a seller at a lower price, 0:03:01.840 --> 0:03:05.800 I'm a buyer, and you're replacing that with a holder 0:03:05.880 --> 0:03:10.480 that will never sell unless and until it has outflows 0:03:10.520 --> 0:03:15.079 because people are drawing down the retirement accounts. So, according 0:03:15.120 --> 0:03:18.520 to that view, as long as the labor market is 0:03:18.960 --> 0:03:22.680 reasonably strong in the US, which it is, you're not 0:03:22.720 --> 0:03:25.160 going to see outflows. You're just going to continue to 0:03:25.160 --> 0:03:29.760 see inflows, especially in those you know, in the most 0:03:29.760 --> 0:03:33.440 heavily weighted names in the the S and P five hundred. 0:03:33.520 --> 0:03:36.360 So I have in the past few. 0:03:36.200 --> 0:03:38.320 Years, I have looked back on my career as an 0:03:38.360 --> 0:03:41.000 activist short seller and you know, kind of done the 0:03:41.040 --> 0:03:44.440 math and felt like well, you know, I probably could 0:03:44.440 --> 0:03:46.800 have just been levered long the S and P five hundred, 0:03:47.000 --> 0:03:51.480 deferred my taxes and gone through a lot less BS 0:03:52.160 --> 0:03:56.960 and being more or less the same possession financially. So yeah, 0:03:57.040 --> 0:04:00.000 I mean that that does make the market more fragile, 0:04:00.840 --> 0:04:02.560 But there's a FED put. 0:04:02.640 --> 0:04:04.600 There's always a FED put. You know. 0:04:05.320 --> 0:04:07.160 Does there come a point in time when the system 0:04:07.200 --> 0:04:10.360 breaks and the FED can't fix it? Theoretically yes, in 0:04:10.760 --> 0:04:13.920 our lifetimes. I don't know. So I think for now 0:04:14.120 --> 0:04:16.960 it probably just pays not the thing too much, just 0:04:17.160 --> 0:04:20.719 close your eyes and buy you know, probably MAG seven. 0:04:22.160 --> 0:04:25.040 Muddy Water's Capital founder Carson Block. There, let's bring in 0:04:25.080 --> 0:04:28.520 another take, Semashar, chief Global Strategist, that principal asset management 0:04:28.839 --> 0:04:30.640 are many that you're talking to feeling you should just 0:04:30.680 --> 0:04:32.320 close your eyes and buy back mag seven. 0:04:32.400 --> 0:04:35.240 Still here, Well, Hi, Carol, I think there is that 0:04:35.279 --> 0:04:37.479 continued demand for MAG seven, And I agree with a 0:04:37.480 --> 0:04:40.200 lot with what was just said, and that the environment 0:04:40.400 --> 0:04:43.080 is it's almost a sweet spot for US equates. You've 0:04:43.080 --> 0:04:45.800 got the fair put, you've got generally a strong economy. 0:04:46.360 --> 0:04:48.440 There's a couple of risks out there, but they're actually 0:04:48.440 --> 0:04:50.440 more near to him risk, something that we wouldn't necessarily 0:04:50.440 --> 0:04:53.480 expect them to have a sustained impat on the market. 0:04:53.920 --> 0:04:56.360 So from that perspective, yes, the US still looks really 0:04:56.400 --> 0:04:59.400 attractive and the MAG seven rather than just being a 0:04:59.440 --> 0:05:02.200 short term play, I think a lot of people, including ourselves, 0:05:02.440 --> 0:05:04.560 are looking at that MAX seven as something which is 0:05:04.560 --> 0:05:05.320 going to deliver. 0:05:05.240 --> 0:05:07.760 Not just for this year, but you know, it's more 0:05:07.760 --> 0:05:08.360 of a. 0:05:08.120 --> 0:05:10.839 Strategic as allocation play that we want to continue to 0:05:10.839 --> 0:05:11.840 have exposure to those. 0:05:12.120 --> 0:05:13.160 Having said that. 0:05:13.720 --> 0:05:16.960 In a positive environment for your sequities, with rates coming 0:05:17.000 --> 0:05:18.560 down and growth still. 0:05:18.400 --> 0:05:20.560 Fairly solid, you should see a broadening out. 0:05:20.640 --> 0:05:23.200 I think there's opportunities in other parts of the market 0:05:23.240 --> 0:05:26.120 which maybe are not as expensive. I haven't really seen 0:05:26.160 --> 0:05:27.960 even some of that catch up trade post COVID, so 0:05:28.000 --> 0:05:30.640 I think there's opportunities everywhere, But sadly MAX seven does 0:05:30.680 --> 0:05:33.839 deserve to continue to have that place in a portfolio. 0:05:34.640 --> 0:05:38.640 Seemac Carson's core idea is that the market, particularly those 0:05:38.680 --> 0:05:42.400 Max seven stocks, will be supported because retirement money is 0:05:42.520 --> 0:05:45.720 kind of on autopilot, right It just comes in and 0:05:45.760 --> 0:05:47.200 that supports the index level. 0:05:47.560 --> 0:05:49.400 How does that impact your job if you're. 0:05:49.320 --> 0:05:53.200 Really genuinely interested in the technology sector as an investor. 0:05:53.600 --> 0:05:54.800 So I think he's right in there. 0:05:54.880 --> 0:05:56.800 There is always going to be that play, you know, 0:05:56.839 --> 0:06:00.120 that continued stream into the MAX seven. Remember also so 0:06:00.160 --> 0:06:04.479 that the MAC seven because of because of that cash levels, 0:06:04.560 --> 0:06:07.120 because they're considered a bit of a safety defensive play 0:06:07.120 --> 0:06:09.920 almost on the US and kind of in the US market, 0:06:10.200 --> 0:06:13.960 that it's almost some of that like a continuous stream 0:06:14.040 --> 0:06:15.839 of where some are considered it's going to be fairly 0:06:15.839 --> 0:06:19.600 consistent throughout and to his point, until it isn't, it 0:06:19.640 --> 0:06:21.800 will continue to attract flows. So I think that that 0:06:21.839 --> 0:06:24.599 does come into the thesis, and we have seen that 0:06:24.640 --> 0:06:26.240 play out over the last couple of years when things 0:06:26.240 --> 0:06:29.159 get a little bit tough, MAC seven almost becomes our 0:06:29.240 --> 0:06:29.840 safety traits. 0:06:29.839 --> 0:06:30.880 So I think that still holds. 0:06:31.640 --> 0:06:34.000 It's just that there's probably going to be other opportunities 0:06:34.000 --> 0:06:38.120 that also retund investors should probably be considering outside of 0:06:38.160 --> 0:06:38.919 just the MAC seven. 0:06:39.360 --> 0:06:44.200 This week kind of starts earning season in earnest for technology. 0:06:44.680 --> 0:06:48.880 How important is this quarter of all quarters, especially given 0:06:48.920 --> 0:06:52.320 that we have now seen the FED move in reducing rates. 0:06:52.880 --> 0:06:54.640 So I think I'm going to every quarter is going 0:06:54.680 --> 0:06:56.880 to be more important than the last in terms of 0:06:56.880 --> 0:06:58.800 whether it's going to maintain the randy going forward. 0:06:59.279 --> 0:07:02.120 For take obviously everyone is. You know, the eyes on 0:07:02.200 --> 0:07:03.599 the tech sector are probably. 0:07:03.279 --> 0:07:08.400 Increasing with each earning season because the expectations in consideration 0:07:08.480 --> 0:07:11.640 of the fact that valuations are quite frothy, that there's 0:07:11.640 --> 0:07:13.960 always those eyes can say are they going to continue to deliver? 0:07:14.040 --> 0:07:17.920 Can they deliver on those very lofty expectations that investors have, 0:07:18.480 --> 0:07:20.720 So we do need to see that continued delivery. But 0:07:20.800 --> 0:07:22.880 actually I still think that Look, let's say we work 0:07:22.880 --> 0:07:26.080 together at disappointing quarter where you see a slight pullback 0:07:26.240 --> 0:07:30.960 in their performance relative to expectations. It doesn't necessarily sound 0:07:30.960 --> 0:07:34.800 the death now, it's just probably a bit of a 0:07:34.800 --> 0:07:37.880 a recalibration of expectations back to something which is a 0:07:37.880 --> 0:07:40.200 little bit more realistic. But then as we look at 0:07:40.240 --> 0:07:42.120 over a couple of quarters in years, I think investors 0:07:42.120 --> 0:07:45.960 will still believe that mag seven, particularly with the AI narrative, have. 0:07:46.000 --> 0:07:47.160 Still got something to deliver. 0:07:48.240 --> 0:07:50.360 I want to go exactly there, Seema, and we turn 0:07:50.440 --> 0:07:52.679 to our great control room to bring up what's happening 0:07:52.720 --> 0:07:55.440 within video with the like of Palo Alto Networks as well, 0:07:55.480 --> 0:07:58.080 but more broadly in video of course, the AI trade 0:07:58.160 --> 0:08:00.480 up to a new record high. It's see though other 0:08:00.640 --> 0:08:03.280 key cybersecurity names like Palo Alto Networks also on the 0:08:03.320 --> 0:08:05.120 higher side today and a new record high too. 0:08:05.560 --> 0:08:08.000 How important is the. 0:08:08.040 --> 0:08:11.280 Nvidia, the chip sector, the AI trade to keep on 0:08:11.400 --> 0:08:12.960 leading these sorts of gains. 0:08:13.080 --> 0:08:16.280 They are important. I do think they're reducing in importance though. 0:08:16.160 --> 0:08:20.800 Because of you know, this fairly strong constructive econmic backdrop 0:08:20.840 --> 0:08:23.840 that we have, But we do feel some continued enthusiasm 0:08:24.040 --> 0:08:27.960 about obviously about invidiot about AI generally and other sectors 0:08:27.960 --> 0:08:30.320 are the companies that can continue to benefit from AI? 0:08:30.360 --> 0:08:32.440 And you just have to look at chips and just say, 0:08:32.440 --> 0:08:34.960 look at the ones which are related to AI and 0:08:35.000 --> 0:08:37.160 the ones which are not AI related. And you can 0:08:37.200 --> 0:08:39.440 see the quantum verification coming through in the market. So 0:08:39.440 --> 0:08:42.560 there's a clear favorite with regards to that narrative, and 0:08:42.640 --> 0:08:45.920 investors are focusing on where can AI play a really 0:08:45.920 --> 0:08:48.920 strong part. There's the first I guess the first generation 0:08:49.080 --> 0:08:51.280 like Nvidia, But what are the other next companies that 0:08:51.320 --> 0:08:54.599 could stand to benefit from this this new theme that 0:08:54.920 --> 0:08:55.920 is playing out in the market. 0:08:56.440 --> 0:08:57.840 See when we love talking to you because you can 0:08:57.880 --> 0:09:00.760 go cross asset too and David and the team of 0:09:00.800 --> 0:09:03.720 at Goldman Sachs go cross asset again today for US 0:09:03.760 --> 0:09:05.800 as well, because on the flip side of what Carson 0:09:05.840 --> 0:09:07.719 Block is saying, they're saying, actually, look, the S and 0:09:07.720 --> 0:09:09.880 P five hundred cannot keep up the rate of returns 0:09:09.880 --> 0:09:11.599 that were used to. In fact, we're only going to 0:09:11.840 --> 0:09:14.800 an annuallyze three percent return in the future, for example, 0:09:15.120 --> 0:09:17.120 because they're gonna go to bonds, We're going to go 0:09:17.160 --> 0:09:20.200 to other assets. Are you seeing investors wanting to go 0:09:20.240 --> 0:09:21.400 there out of equities? 0:09:21.840 --> 0:09:24.480 So cerdly from an aster allocation perspective, we do think 0:09:24.520 --> 0:09:26.480 that this is also the time to have exposure to 0:09:26.480 --> 0:09:29.439 fixed income. You know, if you want to go safety, 0:09:29.440 --> 0:09:31.200 then you should be long duration. But to get that 0:09:31.280 --> 0:09:35.400 pick up in terms of yield income kind of play 0:09:35.440 --> 0:09:37.760 over the US the strength of the US economy, then 0:09:38.080 --> 0:09:39.000 credit is your place to be. 0:09:39.120 --> 0:09:41.439 So, but I think there's a lot of opportunities out there. 0:09:41.559 --> 0:09:45.800 Specifically with regards to the three percent return going forward. 0:09:45.960 --> 0:09:48.120 I think that it is true that you're not likely 0:09:48.200 --> 0:09:50.040 to see the same kind of returns that we've enjoyed for. 0:09:50.040 --> 0:09:51.640 The last ten to fifteen years. 0:09:51.840 --> 0:09:53.640 A lot of that narrative was driven by the fact 0:09:53.679 --> 0:09:55.520 that the Third had and other central banks around the 0:09:55.559 --> 0:09:57.840 world had kept rates really, really low, which we're not 0:09:57.880 --> 0:09:59.040 anticipating going forward. 0:09:59.040 --> 0:10:00.439 We see where it cut's. 0:10:00.320 --> 0:10:04.840 Returning to that incredibly easy Montreal policy of zero bunjeet expansion. 0:10:05.160 --> 0:10:06.920 So it does mean that the mass is a little 0:10:06.960 --> 0:10:11.480 bit more onerous for equities, but it's still a compelling proposition. 0:10:11.920 --> 0:10:14.080 It's just that in this environment, there are. 0:10:14.040 --> 0:10:17.320 Opportunities across I think across all of risk assets, and 0:10:17.360 --> 0:10:19.880 it makes sense for investors to have their diversification because 0:10:19.880 --> 0:10:20.880 it actually continues to. 0:10:20.880 --> 0:10:21.800 Deliver at this point. 0:10:22.200 --> 0:10:25.720 Semashar, chief Global Strategist at Principal Asset Management, thank you 0:10:25.880 --> 0:10:26.560 very much. 0:10:34.640 --> 0:10:36.640 The new chairman of Disney's board. 0:10:36.720 --> 0:10:39.120 Today, the company announced James Gorman will take on the 0:10:39.200 --> 0:10:42.080 role of chairman in twenty twenty five, while also announcing 0:10:42.320 --> 0:10:45.520 that a new CEO will be revealed in early twenty 0:10:45.559 --> 0:10:49.520 twenty six. Bloomberg's Felix Jellette joins us and look. James Gorman, 0:10:49.600 --> 0:10:53.320 former Morgan Stanley CEO, has been leading this succession chase 0:10:53.679 --> 0:10:56.720 since August. But why is he now taking on the 0:10:56.760 --> 0:11:01.360 additional responsibility of being chairman if Disney's Bullard overrule. 0:11:02.040 --> 0:11:04.520 Well, I think Disney's been telegraphing this for a while, 0:11:04.520 --> 0:11:05.680 and Gorman's. 0:11:05.280 --> 0:11:06.480 The new face of the board. 0:11:07.000 --> 0:11:09.720 He's got a strong track record in terms of succession. 0:11:09.840 --> 0:11:13.160 Succession is the number one issue in Disney's future. 0:11:13.840 --> 0:11:15.240 Who's going to replace Bob Iger. 0:11:15.720 --> 0:11:19.559 He doesn't have the same baggage that his predecessor did 0:11:19.600 --> 0:11:23.080 in terms of you know, what went wrong in you know, 0:11:23.160 --> 0:11:25.160 the previous Disney succession plans. 0:11:25.600 --> 0:11:27.640 So I think this makes a lot of sense. 0:11:28.000 --> 0:11:31.800 In terms of just elevating him and giving him formal role. 0:11:31.880 --> 0:11:34.280 In terms of making this next choice. 0:11:35.000 --> 0:11:37.800 Mark Parker retires James Gorman to the helm from a 0:11:37.840 --> 0:11:41.240 board level, take us back to the CEO, and who 0:11:41.240 --> 0:11:43.480 are the names in the running here internally and maybe 0:11:43.480 --> 0:11:44.280 even externally. 0:11:44.760 --> 0:11:46.960 Yeah, I mean, I think at this point it's you know, 0:11:47.040 --> 0:11:50.840 the four direct reports to Iiger, the head of Parks, 0:11:51.200 --> 0:11:54.240 the head of TV, the head of movies, and the 0:11:54.240 --> 0:11:58.960 head of ESPN, and you know everyone the kremlinologists at Disney. 0:11:59.000 --> 0:12:02.360 Everyone's very eager watching all of this, speculating about you know, 0:12:02.480 --> 0:12:04.640 who's up who's down. I think the company's done a 0:12:04.640 --> 0:12:06.959 pretty good job at this point of keeping its cards 0:12:06.960 --> 0:12:08.360 close to its vest if there is. 0:12:08.320 --> 0:12:09.280 A leading candidate. 0:12:09.320 --> 0:12:12.559 At this point, it really hasn't gotten out and so 0:12:12.720 --> 0:12:15.240 I don't think this move changes that at all. 0:12:16.360 --> 0:12:18.120 We're gonna have to wait a few weeks until Disney 0:12:18.160 --> 0:12:21.720 has earnings. But based on post Netflix, how is Disney 0:12:21.760 --> 0:12:22.480 doing right now? 0:12:23.320 --> 0:12:25.200 I mean, Disney's had a good last year. 0:12:25.240 --> 0:12:28.280 When you think about the recent Emmy's probably the strongest 0:12:28.280 --> 0:12:31.480 Emmy performance in the company's history. On the TV front, 0:12:31.880 --> 0:12:34.920 you know, winning with Showgun The Bear Inside Out Too 0:12:35.160 --> 0:12:38.040 delivered hugely for the company. After a bunch of stumbles 0:12:38.080 --> 0:12:40.280 on the film side, you know, the parks have been 0:12:40.320 --> 0:12:43.240 a little bit more mixed. And in terms of ESPN's future, 0:12:43.400 --> 0:12:46.040 still dealing with the transition to direct to consumer. 0:12:46.559 --> 0:12:48.319 There's a lot of open questions. 0:12:47.920 --> 0:12:50.520 Still about the company's future, but you have to say 0:12:50.720 --> 0:12:53.439 it's been a little bit better, especially on the entertainment side. 0:12:54.200 --> 0:12:56.320 Bloombergs Felix to let out in New York City. Thank 0:12:56.320 --> 0:12:57.040 you so much, Carol. 0:12:57.080 --> 0:12:59.520 What you're looking at, I'm looking at Microsoft. 0:12:59.559 --> 0:13:01.880 It's actually down today, but it's ramping up its AI 0:13:01.960 --> 0:13:05.200 rollout ed launching a new set of guess What AI 0:13:05.320 --> 0:13:08.040 tools designed to send emails, managed records, are the business 0:13:08.080 --> 0:13:09.480 related tasks for more. 0:13:09.520 --> 0:13:11.079 We've been in Bloomberg's Brody. 0:13:10.880 --> 0:13:13.719 Ford who must be getting a little bit sick of 0:13:13.840 --> 0:13:17.160 AI agent's autonomous agents Agent force. 0:13:17.520 --> 0:13:18.520 It is competitive. 0:13:19.520 --> 0:13:22.240 Everybody wants to have an agent now, you know. It 0:13:22.320 --> 0:13:24.760 seemed like for a year and a half everybody was 0:13:24.760 --> 0:13:27.400 building a co pilot, even if they didn't call it that, right, 0:13:27.480 --> 0:13:29.920 every software company had a little box on the side 0:13:29.920 --> 0:13:32.559 that I could, you know, ask hey, could you draft 0:13:32.600 --> 0:13:36.720 me this email? Or you know, what's the six biggest 0:13:36.760 --> 0:13:39.200 cities in Germany? But I think what a lot of 0:13:39.200 --> 0:13:43.280 software companies have found is that, you know, users, sometimes 0:13:43.280 --> 0:13:46.280 it's not natural to go ahead and think about, oh 0:13:46.320 --> 0:13:49.920 what should I ask this agent, ask this copilot? And 0:13:49.960 --> 0:13:51.760 so now a lot of companies are leading into this 0:13:51.840 --> 0:13:54.679 agent's idea, which is we're going to have you know, 0:13:54.880 --> 0:14:00.240 ten tasks that are pretty easily replaceable by AI, and 0:14:00.280 --> 0:14:03.280 we're going to have it run largely by itself and 0:14:03.320 --> 0:14:04.400 do that in the background. 0:14:05.320 --> 0:14:09.160 This puts Microsoft in competition with Salesforce, and if you're 0:14:09.200 --> 0:14:11.880 on X you will have seen Salesforce CEO Mark Benioff 0:14:11.880 --> 0:14:16.200 talk a lot recently about Microsoft's AI tools. Just explain 0:14:16.280 --> 0:14:17.280 how they're in competition. 0:14:17.360 --> 0:14:21.240 Brady, Yeah, so this is the segment of Microsoft which 0:14:21.280 --> 0:14:24.440 competes with Salesforce and some other SaaS companies. You know, 0:14:24.480 --> 0:14:28.920 it's all about CRMs, supply chain management, things like that. 0:14:29.280 --> 0:14:32.000 And they both want to have the hat of we 0:14:32.120 --> 0:14:36.800 are leading AI in the SaaS field, right, because most 0:14:36.840 --> 0:14:39.520 SaaS companies have somewhat struggled to really have a good 0:14:39.560 --> 0:14:43.600 coherent AI strategy that is currently making money, and so 0:14:43.680 --> 0:14:45.800 each of them want to kind of lead it forward. 0:14:45.880 --> 0:14:48.640 Benioff has always, you know, done a good job getting 0:14:48.680 --> 0:14:51.720 pressed by, you know, throwing shots at competitors, and this 0:14:51.800 --> 0:14:52.960 is certainly in that tradition. 0:14:54.440 --> 0:14:58.320 Bndke's Brady Ford on all things Microsoft AI Agent, Thank 0:14:58.360 --> 0:15:01.920 you very much. Up here on Bloomberg Technology. 0:15:01.440 --> 0:15:05.800 Details on Russia's major hack on the nation of Georgia 0:15:05.840 --> 0:15:08.479 ahead of that country's upcoming elections. 0:15:09.480 --> 0:15:12.240 Important reporting coming up next. This is Bloomberg Technology. 0:15:29.400 --> 0:15:31.920 Okay, it's time for talking tech and first up, Process 0:15:31.960 --> 0:15:35.440 says it's e commerce divisions expected to surge more than 0:15:35.560 --> 0:15:39.600 nine hundred and fifty percent this fiscal year. Adjusted earnings 0:15:39.640 --> 0:15:43.000 before interesting taxes will be four hundred million dollars in 0:15:43.040 --> 0:15:45.960 the twelve months ending in March. The company's new CEO 0:15:46.080 --> 0:15:49.280 for Britzy Obilisi may the announcement earlier today and will 0:15:49.360 --> 0:15:54.120 join Bloomberg's London Tech summit tomorrow. Plus, Looman Technologies and 0:15:54.240 --> 0:15:58.760 Meta have announced a partnership in support of Meta's AI ambitions. 0:15:58.800 --> 0:16:03.480 The agreement will provide dedicated interconnection for Meta's infrastructure that 0:16:03.520 --> 0:16:07.400 the company says will be crucial for future AI development. 0:16:07.760 --> 0:16:11.760 And Russia has been operating a multi year hacking campaign 0:16:12.120 --> 0:16:15.840 targeting the nation of Georgia. That's according to documents and 0:16:15.880 --> 0:16:19.920 technical reports seen by Bloomberg News. The comprehensive espionage attack 0:16:20.240 --> 0:16:24.640 focused on Georgia's Foreign Ministry, finance ministry, Central Bank, and 0:16:24.720 --> 0:16:27.720 key energy and telecommunications providers and carry. 0:16:27.800 --> 0:16:30.720 Let's get a lot more on that story, such. 0:16:30.520 --> 0:16:33.320 A significant report. We go to Bloomberg's Alberto. 0:16:33.120 --> 0:16:37.360 Nadali, who really was leading the charge here along with colleagues. Alberto, 0:16:38.120 --> 0:16:42.680 just how how is Russia managing to hack on such 0:16:42.680 --> 0:16:44.920 a significant degree. 0:16:45.360 --> 0:16:49.400 Well, I think the thing to understand about Russia in 0:16:49.480 --> 0:16:52.480 terms of countries like Georgia was that it targets them 0:16:52.600 --> 0:16:58.080 with disinformation and then it puts great efforts into these 0:16:58.160 --> 0:17:03.600 hacks and looking for vulnerabilities within critical infrastructure, looking for 0:17:03.680 --> 0:17:07.399 vulnerabilities within government ministries, and spent a lot of time 0:17:08.119 --> 0:17:09.800 doing that, and that allows. 0:17:09.400 --> 0:17:10.280 Them eventually to. 0:17:11.720 --> 0:17:16.320 Enter these systems undetected and for years to gather information 0:17:16.960 --> 0:17:20.359 and very seriously and worryingly here put them in a 0:17:20.400 --> 0:17:23.400 position also to commit potential acts of sabotage. 0:17:23.680 --> 0:17:27.080 The headline is severe, right, Russia targeting a nation state 0:17:27.119 --> 0:17:30.800 with these hacks. But how serious were they Alberta and 0:17:30.880 --> 0:17:31.840 what was their impact? 0:17:32.240 --> 0:17:35.879 I think the key point is the severity of these hacks, 0:17:35.880 --> 0:17:40.520 because we're not talking about things like denials of service 0:17:40.560 --> 0:17:43.639 that take a website down for a couple of hours. 0:17:44.040 --> 0:17:47.560 There were two main aspects to this operation. The first 0:17:47.680 --> 0:17:50.800 was gathering intelligence, so they were able to gather information 0:17:51.440 --> 0:17:56.159 such as the emails of government officials, the emails of 0:17:56.320 --> 0:18:01.159 employees working in key companies, So they were able to 0:18:01.200 --> 0:18:05.600 put themselves in a position that, had they wanted to 0:18:06.000 --> 0:18:09.240 and had the need arisen, let's say, they would have 0:18:09.280 --> 0:18:13.120 been able to sabotage key bits of the country's critical infrastructure, 0:18:13.240 --> 0:18:18.440 such as arts of the energy grid, telecommunications or railways, 0:18:18.640 --> 0:18:20.840 oil terminals and things like that. 0:18:23.560 --> 0:18:27.000 Severe in your reporting, did you get a sense of 0:18:27.040 --> 0:18:30.360 what Russia's goal was here, what its motivation in doing 0:18:30.440 --> 0:18:30.879 this was. 0:18:32.080 --> 0:18:35.160 So on the one hand, it's gathering information. So for example, 0:18:35.160 --> 0:18:37.840 if you look specifically at the hack of the Foreign Ministry, 0:18:38.280 --> 0:18:43.240 they were targeting and gathering information about key Georgian embassies 0:18:43.359 --> 0:18:48.840 in places like the European Union, countries in the Baltics, 0:18:48.960 --> 0:18:54.160 so countries that and areas that Russia has an interest 0:18:54.160 --> 0:18:58.600 in and is looking at. And the second strategic objective, 0:18:58.640 --> 0:19:02.800 let's call it, is to put itself in a position 0:19:03.119 --> 0:19:06.919 that if politics in the country, if Georgia goes in 0:19:06.960 --> 0:19:10.080 a direction that Russia does not like, it, then has 0:19:10.119 --> 0:19:14.439 the ability to take things are set further and commit 0:19:14.520 --> 0:19:20.000 these acts of sabotage, such as targeting electricity grids or 0:19:20.080 --> 0:19:24.359 telecommunications systems. And it's a pattern. For example, we've seen 0:19:24.359 --> 0:19:28.040 elsewhere they've done similar in the past in Ukraine. 0:19:28.520 --> 0:19:33.080 But this was deep reporting, right, this was investigation through documents. 0:19:33.480 --> 0:19:35.280 But did Russia, through. 0:19:35.119 --> 0:19:39.080 Any official channels, have anything to say any comment about 0:19:39.119 --> 0:19:39.760 the reports. 0:19:41.320 --> 0:19:43.239 Usually what happened is we ask for comment and they 0:19:43.280 --> 0:19:47.800 never reply. And then after a while you will see 0:19:48.280 --> 0:19:51.679 in a press conference or in a statement of Ministia 0:19:51.760 --> 0:19:55.199 Foreign affairs or some other government department will refer to 0:19:55.320 --> 0:20:00.000 stories in Western media, and so that's where we might 0:20:00.000 --> 0:20:02.200 I'd expect there to be a reaction in the coming days. 0:20:02.640 --> 0:20:06.920 And equally, this is contemporaneous, right. The elections in Georgia 0:20:07.400 --> 0:20:10.080 are this week, I believe. So, you know, we talked 0:20:10.080 --> 0:20:13.200 about the severity and the impact. But will this nation 0:20:13.359 --> 0:20:17.240 be able to proceed, you know, with its democratic process 0:20:17.760 --> 0:20:20.840 kind of free of any interference in that sense. 0:20:22.119 --> 0:20:27.720 I think the elections obviously will take place. What tends 0:20:27.720 --> 0:20:29.399 to happen if if you look, for example, of the 0:20:29.440 --> 0:20:33.800 elections that took place this week and nearby and in Moldova, 0:20:34.160 --> 0:20:39.080 there were reports of Russia paying people to vote in 0:20:39.119 --> 0:20:44.240 a certain way, intense campaigns of disinformation, and so you 0:20:44.280 --> 0:20:49.359 will have a similar environment in which these elections take place, 0:20:49.440 --> 0:20:53.040 and then depending on the results of the votes, you'll 0:20:53.040 --> 0:20:54.320 see what happens next. 0:20:55.240 --> 0:20:58.240 This was a reporting you did with our colleague Ryan Gallagha. 0:20:58.359 --> 0:21:01.120 You know, without giving it away, what happens next? Where 0:21:01.160 --> 0:21:02.320 does your reporting take you? 0:21:03.960 --> 0:21:06.800 We report a lot. We keep reporting on what Russia 0:21:06.840 --> 0:21:11.120 does in the world in terms of these so called 0:21:11.200 --> 0:21:15.560 hybrid campaigns or the use of this information and hacking, 0:21:15.640 --> 0:21:21.720 and you know, non military methods to try and achieve 0:21:21.800 --> 0:21:24.719