Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From Marhart where Innovation, money and power Collie in Silicon
Speaker 2: Valley NBN. This is Bloomberg Technology with Caroline.
Speaker 3: Hyde and Ed loved Love.
Speaker 4: Live from London and San Francisco.
Speaker 5: This is Bloomberg Technology coming up close your eyes and
Speaker 5: by Why Muddy Waters founder Carson Block is bullish on
Speaker 5: big tech.
Speaker 6: Plus the future at Disney's Kingdom. Details on the company's
Speaker 6: new leadership moves and CEO succession plans.
Speaker 5: Plus we'll hear from the Taiwanese premiere on the country's
Speaker 5: thriving chip business. But first quick check on these markets,
Speaker 5: which are perhaps taking a slight pause ahead of some weeks.
Speaker 5: I focus in on crypto ed we're down by more
Speaker 5: than two percent there. We've actually seen more than two
Speaker 5: billion flow into ETFs. Of course, at Byspot Bitcoin, for example,
Speaker 5: we were near seventy thousand dollars. We're just pulling back
Speaker 5: slightly as risk sentiment changes ahead of all important earnings week,
Speaker 5: all important election in the next coming two weeks. But
Speaker 5: we focus in on crypto just to show us what
Speaker 5: risk sentiment's released showing us today.
Speaker 7: But you looking at the micros, Yeah.
Speaker 6: There's a few tech stocks that we're following throughout the show.
Speaker 6: Disney has named former Morgan Stanley CEO James Gorman as
Speaker 6: its new chair of the board and promising to name
Speaker 6: a new CEO early twenty twenty six.
Speaker 7: Will bring you the details.
Speaker 6: Microsoft has some new AI agents it's taking on salesforce.
Speaker 6: We go to our correspondent on that and look at
Speaker 6: the US listed shares of Taiwan. Semikinducts are actually continuing
Speaker 6: to gain momentum. We have a very important interview with
Speaker 6: Taiwan's premiere where we talk about the golden jewel of
Speaker 6: their industry, but also some of their energy needs. The
Speaker 6: broader context of what's happening in Semikindum is for that nation.
Speaker 7: You don't want to miss it. Halfway through the.
Speaker 4: Program, Carrot, we don't.
Speaker 5: Meanwhile, we returned to the macro picture because earlier today
Speaker 5: Muddy Waters Capital founder Carson Block joined Bloomberg Television and
Speaker 5: he oftened this pretty bullish advice on the Magnificent seven.
Speaker 8: There's a debate as to what really drives when you
Speaker 8: talk about the US market, especially the S and P
Speaker 8: five hundred or the mag seven. I'm in the camp that,
Speaker 8: although I haven't I don't have the facility with math
Speaker 8: to really try to prove this out. But I'm in
Speaker 8: the camp that believes of what drives that index are flows.
Speaker 8: And so at the end of every month, US workers,
Speaker 8: you know a lot of them, their paychecks go into
Speaker 8: their four one case, which are retirement funds, and there's
Speaker 8: a robo bid for the stocks. And what happens is
Speaker 8: you reduce the effective supply of stock because you're taking
Speaker 8: out the active owners of stocks that will decide, Hey,
Speaker 8: at this part, I'm a seller at a lower price,
Speaker 8: I'm a buyer, and you're replacing that with a holder
Speaker 8: that will never sell unless and until it has outflows
Speaker 8: because people are drawing down the retirement accounts. So, according
Speaker 8: to that view, as long as the labor market is
Speaker 8: reasonably strong in the US, which it is, you're not
Speaker 8: going to see outflows. You're just going to continue to
Speaker 8: see inflows, especially in those you know, in the most
Speaker 8: heavily weighted names in the the S and P five hundred.
Speaker 9: So I have in the past few.
Speaker 8: Years, I have looked back on my career as an
Speaker 8: activist short seller and you know, kind of done the
Speaker 8: math and felt like well, you know, I probably could
Speaker 8: have just been levered long the S and P five hundred,
Speaker 8: deferred my taxes and gone through a lot less BS
Speaker 8: and being more or less the same possession financially. So yeah,
Speaker 8: I mean that that does make the market more fragile,
Speaker 8: But there's a FED put.
Speaker 9: There's always a FED put. You know.
Speaker 8: Does there come a point in time when the system
Speaker 8: breaks and the FED can't fix it? Theoretically yes, in
Speaker 8: our lifetimes. I don't know. So I think for now
Speaker 8: it probably just pays not the thing too much, just
Speaker 8: close your eyes and buy you know, probably MAG seven.
Speaker 5: Muddy Water's Capital founder Carson Block. There, let's bring in
Speaker 5: another take, Semashar, chief Global Strategist, that principal asset management
Speaker 5: are many that you're talking to feeling you should just
Speaker 5: close your eyes and buy back mag seven.
Speaker 10: Still here, Well, Hi, Carol, I think there is that
Speaker 10: continued demand for MAG seven, And I agree with a
Speaker 10: lot with what was just said, and that the environment
Speaker 10: is it's almost a sweet spot for US equates. You've
Speaker 10: got the fair put, you've got generally a strong economy.
Speaker 10: There's a couple of risks out there, but they're actually
Speaker 10: more near to him risk, something that we wouldn't necessarily
Speaker 10: expect them to have a sustained impat on the market.
Speaker 10: So from that perspective, yes, the US still looks really
Speaker 10: attractive and the MAG seven rather than just being a
Speaker 10: short term play, I think a lot of people, including ourselves,
Speaker 10: are looking at that MAX seven as something which is
Speaker 10: going to deliver.
Speaker 3: Not just for this year, but you know, it's more
Speaker 3: of a.
Speaker 10: Strategic as allocation play that we want to continue to
Speaker 10: have exposure to those.
Speaker 3: Having said that.
Speaker 10: In a positive environment for your sequities, with rates coming
Speaker 10: down and growth still.
Speaker 3: Fairly solid, you should see a broadening out.
Speaker 10: I think there's opportunities in other parts of the market
Speaker 10: which maybe are not as expensive. I haven't really seen
Speaker 10: even some of that catch up trade post COVID, so
Speaker 10: I think there's opportunities everywhere, But sadly MAX seven does
Speaker 10: deserve to continue to have that place in a portfolio.
Speaker 6: Seemac Carson's core idea is that the market, particularly those
Speaker 6: Max seven stocks, will be supported because retirement money is
Speaker 6: kind of on autopilot, right It just comes in and
Speaker 6: that supports the index level.
Speaker 7: How does that impact your job if you're.
Speaker 6: Really genuinely interested in the technology sector as an investor.
Speaker 3: So I think he's right in there.
Speaker 10: There is always going to be that play, you know,
Speaker 10: that continued stream into the MAX seven. Remember also so
Speaker 10: that the MAC seven because of because of that cash levels,
Speaker 10: because they're considered a bit of a safety defensive play
Speaker 10: almost on the US and kind of in the US market,
Speaker 10: that it's almost some of that like a continuous stream
Speaker 10: of where some are considered it's going to be fairly
Speaker 10: consistent throughout and to his point, until it isn't, it
Speaker 10: will continue to attract flows. So I think that that
Speaker 10: does come into the thesis, and we have seen that
Speaker 10: play out over the last couple of years when things
Speaker 10: get a little bit tough, MAC seven almost becomes our
Speaker 10: safety traits.
Speaker 3: So I think that still holds.
Speaker 10: It's just that there's probably going to be other opportunities
Speaker 10: that also retund investors should probably be considering outside of
Speaker 10: just the MAC seven.
Speaker 6: This week kind of starts earning season in earnest for technology.
Speaker 6: How important is this quarter of all quarters, especially given
Speaker 6: that we have now seen the FED move in reducing rates.
Speaker 10: So I think I'm going to every quarter is going
Speaker 10: to be more important than the last in terms of
Speaker 10: whether it's going to maintain the randy going forward.
Speaker 3: For take obviously everyone is. You know, the eyes on
Speaker 3: the tech sector are probably.
Speaker 10: Increasing with each earning season because the expectations in consideration
Speaker 10: of the fact that valuations are quite frothy, that there's
Speaker 10: always those eyes can say are they going to continue to deliver?
Speaker 10: Can they deliver on those very lofty expectations that investors have,
Speaker 10: So we do need to see that continued delivery. But
Speaker 10: actually I still think that Look, let's say we work
Speaker 10: together at disappointing quarter where you see a slight pullback
Speaker 10: in their performance relative to expectations. It doesn't necessarily sound
Speaker 10: the death now, it's just probably a bit of a
Speaker 10: a recalibration of expectations back to something which is a
Speaker 10: little bit more realistic. But then as we look at
Speaker 10: over a couple of quarters in years, I think investors
Speaker 10: will still believe that mag seven, particularly with the AI narrative, have.
Speaker 3: Still got something to deliver.
Speaker 5: I want to go exactly there, Seema, and we turn
Speaker 5: to our great control room to bring up what's happening
Speaker 5: within video with the like of Palo Alto Networks as well,
Speaker 5: but more broadly in video of course, the AI trade
Speaker 5: up to a new record high. It's see though other
Speaker 5: key cybersecurity names like Palo Alto Networks also on the
Speaker 5: higher side today and a new record high too.
Speaker 4: How important is the.
Speaker 5: Nvidia, the chip sector, the AI trade to keep on
Speaker 5: leading these sorts of gains.
Speaker 3: They are important. I do think they're reducing in importance though.
Speaker 10: Because of you know, this fairly strong constructive econmic backdrop
Speaker 10: that we have, But we do feel some continued enthusiasm
Speaker 10: about obviously about invidiot about AI generally and other sectors
Speaker 10: are the companies that can continue to benefit from AI?
Speaker 10: And you just have to look at chips and just say,
Speaker 10: look at the ones which are related to AI and
Speaker 10: the ones which are not AI related. And you can
Speaker 10: see the quantum verification coming through in the market. So
Speaker 10: there's a clear favorite with regards to that narrative, and
Speaker 10: investors are focusing on where can AI play a really
Speaker 10: strong part. There's the first I guess the first generation
Speaker 10: like Nvidia, But what are the other next companies that
Speaker 10: could stand to benefit from this this new theme that
Speaker 10: is playing out in the market.
Speaker 5: See when we love talking to you because you can
Speaker 5: go cross asset too and David and the team of
Speaker 5: at Goldman Sachs go cross asset again today for US
Speaker 5: as well, because on the flip side of what Carson
Speaker 5: Block is saying, they're saying, actually, look, the S and
Speaker 5: P five hundred cannot keep up the rate of returns
Speaker 5: that were used to. In fact, we're only going to
Speaker 5: an annuallyze three percent return in the future, for example,
Speaker 5: because they're gonna go to bonds, We're going to go
Speaker 5: to other assets. Are you seeing investors wanting to go
Speaker 5: there out of equities?
Speaker 10: So cerdly from an aster allocation perspective, we do think
Speaker 10: that this is also the time to have exposure to
Speaker 10: fixed income. You know, if you want to go safety,
Speaker 10: then you should be long duration. But to get that
Speaker 10: pick up in terms of yield income kind of play
Speaker 10: over the US the strength of the US economy, then
Speaker 10: credit is your place to be.
Speaker 3: So, but I think there's a lot of opportunities out there.
Speaker 10: Specifically with regards to the three percent return going forward.
Speaker 10: I think that it is true that you're not likely
Speaker 10: to see the same kind of returns that we've enjoyed for.
Speaker 3: The last ten to fifteen years.
Speaker 10: A lot of that narrative was driven by the fact
Speaker 10: that the Third had and other central banks around the
Speaker 10: world had kept rates really, really low, which we're not
Speaker 10: anticipating going forward.
Speaker 3: We see where it cut's.
Speaker 10: Returning to that incredibly easy Montreal policy of zero bunjeet expansion.
Speaker 10: So it does mean that the mass is a little
Speaker 10: bit more onerous for equities, but it's still a compelling proposition.
Speaker 3: It's just that in this environment, there are.
Speaker 10: Opportunities across I think across all of risk assets, and
Speaker 10: it makes sense for investors to have their diversification because
Speaker 10: it actually continues to.
Speaker 3: Deliver at this point.
Speaker 6: Semashar, chief Global Strategist at Principal Asset Management, thank you
Speaker 6: very much.
Speaker 7: The new chairman of Disney's board.
Speaker 6: Today, the company announced James Gorman will take on the
Speaker 6: role of chairman in twenty twenty five, while also announcing
Speaker 6: that a new CEO will be revealed in early twenty
Speaker 6: twenty six. Bloomberg's Felix Jellette joins us and look. James Gorman,
Speaker 6: former Morgan Stanley CEO, has been leading this succession chase
Speaker 6: since August. But why is he now taking on the
Speaker 6: additional responsibility of being chairman if Disney's Bullard overrule.
Speaker 11: Well, I think Disney's been telegraphing this for a while,
Speaker 11: and Gorman's.
Speaker 12: The new face of the board.
Speaker 11: He's got a strong track record in terms of succession.
Speaker 11: Succession is the number one issue in Disney's future.
Speaker 12: Who's going to replace Bob Iger.
Speaker 11: He doesn't have the same baggage that his predecessor did
Speaker 11: in terms of you know, what went wrong in you know,
Speaker 11: the previous Disney succession plans.
Speaker 12: So I think this makes a lot of sense.
Speaker 11: In terms of just elevating him and giving him formal role.
Speaker 11: In terms of making this next choice.
Speaker 5: Mark Parker retires James Gorman to the helm from a
Speaker 5: board level, take us back to the CEO, and who
Speaker 5: are the names in the running here internally and maybe
Speaker 5: even externally.
Speaker 11: Yeah, I mean, I think at this point it's you know,
Speaker 11: the four direct reports to Iiger, the head of Parks,
Speaker 11: the head of TV, the head of movies, and the
Speaker 11: head of ESPN, and you know everyone the kremlinologists at Disney.
Speaker 11: Everyone's very eager watching all of this, speculating about you know,
Speaker 11: who's up who's down. I think the company's done a
Speaker 11: pretty good job at this point of keeping its cards
Speaker 11: close to its vest if there is.
Speaker 12: A leading candidate.
Speaker 11: At this point, it really hasn't gotten out and so
Speaker 11: I don't think this move changes that at all.
Speaker 6: We're gonna have to wait a few weeks until Disney
Speaker 6: has earnings. But based on post Netflix, how is Disney
Speaker 6: doing right now?
Speaker 12: I mean, Disney's had a good last year.
Speaker 11: When you think about the recent Emmy's probably the strongest
Speaker 11: Emmy performance in the company's history. On the TV front,
Speaker 11: you know, winning with Showgun The Bear Inside Out Too
Speaker 11: delivered hugely for the company. After a bunch of stumbles
Speaker 11: on the film side, you know, the parks have been
Speaker 11: a little bit more mixed. And in terms of ESPN's future,
Speaker 11: still dealing with the transition to direct to consumer.
Speaker 12: There's a lot of open questions.
Speaker 11: Still about the company's future, but you have to say
Speaker 11: it's been a little bit better, especially on the entertainment side.
Speaker 7: Bloombergs Felix to let out in New York City. Thank
Speaker 7: you so much, Carol.
Speaker 4: What you're looking at, I'm looking at Microsoft.
Speaker 5: It's actually down today, but it's ramping up its AI
Speaker 5: rollout ed launching a new set of guess What AI
Speaker 5: tools designed to send emails, managed records, are the business
Speaker 5: related tasks for more.
Speaker 4: We've been in Bloomberg's Brody.
Speaker 5: Ford who must be getting a little bit sick of
Speaker 5: AI agent's autonomous agents Agent force.
Speaker 4: It is competitive.
Speaker 13: Everybody wants to have an agent now, you know. It
Speaker 13: seemed like for a year and a half everybody was
Speaker 13: building a co pilot, even if they didn't call it that, right,
Speaker 13: every software company had a little box on the side
Speaker 13: that I could, you know, ask hey, could you draft
Speaker 13: me this email? Or you know, what's the six biggest
Speaker 13: cities in Germany? But I think what a lot of
Speaker 13: software companies have found is that, you know, users, sometimes
Speaker 13: it's not natural to go ahead and think about, oh
Speaker 13: what should I ask this agent, ask this copilot? And
Speaker 13: so now a lot of companies are leading into this
Speaker 13: agent's idea, which is we're going to have you know,
Speaker 13: ten tasks that are pretty easily replaceable by AI, and
Speaker 13: we're going to have it run largely by itself and
Speaker 13: do that in the background.
Speaker 6: This puts Microsoft in competition with Salesforce, and if you're
Speaker 6: on X you will have seen Salesforce CEO Mark Benioff
Speaker 6: talk a lot recently about Microsoft's AI tools. Just explain
Speaker 6: how they're in competition.
Speaker 13: Brady, Yeah, so this is the segment of Microsoft which
Speaker 13: competes with Salesforce and some other SaaS companies. You know,
Speaker 13: it's all about CRMs, supply chain management, things like that.
Speaker 13: And they both want to have the hat of we
Speaker 13: are leading AI in the SaaS field, right, because most
Speaker 13: SaaS companies have somewhat struggled to really have a good
Speaker 13: coherent AI strategy that is currently making money, and so
Speaker 13: each of them want to kind of lead it forward.
Speaker 13: Benioff has always, you know, done a good job getting
Speaker 13: pressed by, you know, throwing shots at competitors, and this
Speaker 13: is certainly in that tradition.
Speaker 7: Bndke's Brady Ford on all things Microsoft AI Agent, Thank
Speaker 7: you very much. Up here on Bloomberg Technology.
Speaker 6: Details on Russia's major hack on the nation of Georgia
Speaker 6: ahead of that country's upcoming elections.
Speaker 7: Important reporting coming up next. This is Bloomberg Technology.
Speaker 6: Okay, it's time for talking tech and first up, Process
Speaker 6: says it's e commerce divisions expected to surge more than
Speaker 6: nine hundred and fifty percent this fiscal year. Adjusted earnings
Speaker 6: before interesting taxes will be four hundred million dollars in
Speaker 6: the twelve months ending in March. The company's new CEO
Speaker 6: for Britzy Obilisi may the announcement earlier today and will
Speaker 6: join Bloomberg's London Tech summit tomorrow. Plus, Looman Technologies and
Speaker 6: Meta have announced a partnership in support of Meta's AI ambitions.
Speaker 6: The agreement will provide dedicated interconnection for Meta's infrastructure that
Speaker 6: the company says will be crucial for future AI development.
Speaker 6: And Russia has been operating a multi year hacking campaign
Speaker 6: targeting the nation of Georgia. That's according to documents and
Speaker 6: technical reports seen by Bloomberg News. The comprehensive espionage attack
Speaker 6: focused on Georgia's Foreign Ministry, finance ministry, Central Bank, and
Speaker 6: key energy and telecommunications providers and carry.
Speaker 7: Let's get a lot more on that story, such.
Speaker 4: A significant report. We go to Bloomberg's Alberto.
Speaker 5: Nadali, who really was leading the charge here along with colleagues. Alberto,
Speaker 5: just how how is Russia managing to hack on such
Speaker 5: a significant degree.
Speaker 14: Well, I think the thing to understand about Russia in
Speaker 14: terms of countries like Georgia was that it targets them
Speaker 14: with disinformation and then it puts great efforts into these
Speaker 14: hacks and looking for vulnerabilities within critical infrastructure, looking for
Speaker 14: vulnerabilities within government ministries, and spent a lot of time
Speaker 14: doing that, and that allows.
Speaker 9: Them eventually to.
Speaker 14: Enter these systems undetected and for years to gather information
Speaker 14: and very seriously and worryingly here put them in a
Speaker 14: position also to commit potential acts of sabotage.
Speaker 6: The headline is severe, right, Russia targeting a nation state
Speaker 6: with these hacks. But how serious were they Alberta and
Speaker 6: what was their impact?
Speaker 14: I think the key point is the severity of these hacks,
Speaker 14: because we're not talking about things like denials of service
Speaker 14: that take a website down for a couple of hours.
Speaker 14: There were two main aspects to this operation. The first
Speaker 14: was gathering intelligence, so they were able to gather information
Speaker 14: such as the emails of government officials, the emails of
Speaker 14: employees working in key companies, So they were able to
Speaker 14: put themselves in a position that, had they wanted to
Speaker 14: and had the need arisen, let's say, they would have
Speaker 14: been able to sabotage key bits of the country's critical infrastructure,
Speaker 14: such as arts of the energy grid, telecommunications or railways,
Speaker 14: oil terminals and things like that.
Speaker 6: Severe in your reporting, did you get a sense of
Speaker 6: what Russia's goal was here, what its motivation in doing
Speaker 6: this was.
Speaker 14: So on the one hand, it's gathering information. So for example,
Speaker 14: if you look specifically at the hack of the Foreign Ministry,
Speaker 14: they were targeting and gathering information about key Georgian embassies
Speaker 14: in places like the European Union, countries in the Baltics,
Speaker 14: so countries that and areas that Russia has an interest
Speaker 14: in and is looking at. And the second strategic objective,
Speaker 14: let's call it, is to put itself in a position
Speaker 14: that if politics in the country, if Georgia goes in
Speaker 14: a direction that Russia does not like, it, then has
Speaker 14: the ability to take things are set further and commit
Speaker 14: these acts of sabotage, such as targeting electricity grids or
Speaker 14: telecommunications systems. And it's a pattern. For example, we've seen
Speaker 14: elsewhere they've done similar in the past in Ukraine.
Speaker 6: But this was deep reporting, right, this was investigation through documents.
Speaker 7: But did Russia, through.
Speaker 6: Any official channels, have anything to say any comment about
Speaker 6: the reports.
Speaker 14: Usually what happened is we ask for comment and they
Speaker 14: never reply. And then after a while you will see
Speaker 14: in a press conference or in a statement of Ministia
Speaker 14: Foreign affairs or some other government department will refer to
Speaker 14: stories in Western media, and so that's where we might
Speaker 14: I'd expect there to be a reaction in the coming days.
Speaker 6: And equally, this is contemporaneous, right. The elections in Georgia
Speaker 6: are this week, I believe. So, you know, we talked
Speaker 6: about the severity and the impact. But will this nation
Speaker 6: be able to proceed, you know, with its democratic process
Speaker 6: kind of free of any interference in that sense.
Speaker 14: I think the elections obviously will take place. What tends
Speaker 14: to happen if if you look, for example, of the
Speaker 14: elections that took place this week and nearby and in Moldova,
Speaker 14: there were reports of Russia paying people to vote in
Speaker 14: a certain way, intense campaigns of disinformation, and so you
Speaker 14: will have a similar environment in which these elections take place,
Speaker 14: and then depending on the results of the votes, you'll
Speaker 14: see what happens next.
Speaker 6: This was a reporting you did with our colleague Ryan Gallagha.
Speaker 6: You know, without giving it away, what happens next? Where
Speaker 6: does your reporting take you?
Speaker 14: We report a lot. We keep reporting on what Russia
Speaker 14: does in the world in terms of these so called
Speaker 14: hybrid campaigns or the use of this information and hacking,
Speaker 14: and you know, non military methods to try and achieve
Speaker 14: its goals, and then you know, in the case of Ukraine,
Speaker 14: obviously military methods. And so we're saying on this beat
Speaker 14: because obviously Georgia is not the only country that Russia
Speaker 14: is targeting.
Speaker 5: Alberta Nadelli, we thank you extraordinary reporting.
Speaker 4: Go read it.
Speaker 5: Welcome back to Luemat Technology. I'm Caroline Hyde in London
Speaker 5: and ed.
Speaker 7: Ardlo in San Francisco. Bring us some markets.
Speaker 5: Character, yeah, because they're under pressure from a macro perspective,
Speaker 5: But there are some single names you want to shine
Speaker 5: a light on that are doing rather well. But we're
Speaker 5: off by some six tenser percent on the Nasdaq one
Speaker 5: hundred actually coming to session lows at the moment. We
Speaker 5: are worried about big earnings on deck. We've got Tesla
Speaker 5: for example, later this week. We're also anticipating a very
Speaker 5: close election in the United States. What does that mean
Speaker 5: for the future of big tech, anti trusting crypto Move
Speaker 5: on and have a look at some of the individual
Speaker 5: names as the market kind of waits and watches. Disney
Speaker 5: under pressure even as they announce look new chairman of
Speaker 5: the board not completely unsurprisingly James Gorman comes to the
Speaker 5: Helm starting in twenty twenty five and promises a new
Speaker 5: CEO will be delivered by the start of at least
Speaker 5: early on in twenty twenty six, palallel to networks and
Speaker 5: a new record high only just look, we're clinging on
Speaker 5: to gains, but it is at a record in video
Speaker 5: two one point seven percent higher. Interesting that the week
Speaker 5: after this we get most of its customers giving us earnings.
Speaker 5: Think Alphabet, Think Microsoft, think Meta. What will that say
Speaker 5: for the ongoing demand for its chip set?
Speaker 7: Okay.
Speaker 6: Sticking with semiconductors, Taiwan's economy has seen massive growth, thanks
Speaker 6: in part to chip manufacturing. Still, premier Sho Jong Thai
Speaker 6: says the country can't just solely rely on its high
Speaker 6: tech industries. He sat down with Bloomberg editor in chief
Speaker 6: emeritus Matt Winkler check this out.
Speaker 15: Say, Taiwan's economic resiliency comes from the partnership we have
Speaker 15: with friendly countries. Domestically, we have a strong, vertically integrated
Speaker 15: supply chain. This is why we believe Taiwan can play
Speaker 15: a crucial role in the democratic supply chain. We are
Speaker 15: heavily reliant on high tech industries, especially in the rapidly
Speaker 15: developing semiconductor sector. However, for Taiwan's economy to achieve comprehensive growth,
Speaker 15: we cannot rely solely on high tech industries. That's why
Speaker 15: we proposed a dual axis transformation for small and medium
Speaker 15: sized enterprises. We aim to help our traditional industries and
Speaker 15: small to medium sized enterprises enter the AI era. We
Speaker 15: will use government resources to assist them in adopting AI
Speaker 15: applications and integrating with this industry, allowing Taiwan's economy to
Speaker 15: grow comprehensively.
Speaker 2: So, mister premire, the US is going to have an
Speaker 2: election at presidential election, It's just weeks away or were
Speaker 2: President Trump previously said that Taiwan took chip business from
Speaker 2: the US and asked Taiwan to pay protection fees. And
Speaker 2: do you think Taiwan should continue to allow semiconductor manufacturers
Speaker 2: to like TSMC, to build factories overseas.
Speaker 15: Taiwan also needs to rely on advanced countries for new
Speaker 15: technologies in materials and equipment. I often say that the
Speaker 15: government has a responsibility to Taiwan's industries and Taiwan has
Speaker 15: a responsibility to the world.
Speaker 2: Mister Trump also said Taiwan should increase military spending to
Speaker 2: ten percent of gross domestic product, and I wonder if
Speaker 2: that's possible.
Speaker 15: In your view Taiwan in Taiwan has a very large
Speaker 15: neighbor with significant ambitions toward it, so Taiwan must take
Speaker 15: responsibility for safeguarding our sovereignty and national security. In next
Speaker 15: year's Central government budget, we have allocated more than six
Speaker 15: hundred and forty billion Taiwan dollars for defense. This will
Speaker 15: bring our defense spending to approximately two point four to
Speaker 15: two point six percent of GDP. While we cannot allocate
Speaker 15: ten percent of GDP to defense in one go, we
Speaker 15: have increased the budget compared to the past. We also
Speaker 15: hope that through Taiwan's efforts, the world will recognize Taiwan's
Speaker 15: determination and provide greater support. What we're maintaining is not
Speaker 15: only Taiwan's security, but also the peace and stability of
Speaker 15: the entire Indo Pacific region.
Speaker 2: You mentioned artificial intelligence earlier in this discussion, and given
Speaker 2: the importance of AI and how fast it is expanding,
Speaker 2: there is a debate about electricity supply and I'm just
Speaker 2: wondering do you think sort of new nuclear power technology
Speaker 2: is something an option, say for Taiwan that you could consider.
Speaker 15: We know that many other countries are actively developing various
Speaker 15: forms of nuclear energy. Currently, we expect that Taiwan will
Speaker 15: have no issues with power supply for industries before twenty thirty.
Speaker 15: Our nuclear power plants are being decommissioned and operations are stopping.
Speaker 15: This is because we need to prepare for future nuclear
Speaker 15: technology developments and to respond to any potential legal changes
Speaker 15: in Taiwan. When we take the next step forward and
Speaker 15: reconsider the existing nuclear power plants, we will need sufficient manpower.
Speaker 15: So even though our plants are being decommissioned, the personnel
Speaker 15: must not be dispersed. They must remain to address new
Speaker 15: technologies or solve current issues.
Speaker 7: That was Taiwan Premier Cho Jung Thai.
Speaker 5: Meanwhile, in Pennsylvania, Ed Governor Josh Shapiro expressed concern over
Speaker 5: Elon Musk's and to give money to voters suggesting law
Speaker 5: enforcement reviews. This follows Musk's announcement to donate one million
Speaker 5: dollars daily to a random registered voter supporting his super
Speaker 5: Pax petition on free speech and gun rights. Just take
Speaker 5: a listen to this from NBC's Meet the Press.
Speaker 13: I think it's something that law enforcement could take a
Speaker 13: look at.
Speaker 12: I'm not the attorney general anymore. At Pennsylvania, I'm the governor.
Speaker 12: But it does raise some serious questions.
Speaker 5: Bloomberg's Kurt Wagner joins us now, who covers all things
Speaker 5: Elon but covers all things X as well, and just
Speaker 5: how does this dovetail into what you're seeing on his
Speaker 5: social media platform right now?
Speaker 16: Yeah, I mean he's using X as a very pro
Speaker 16: Trump megaphone right now. Actually opened the aptis yesterday and
Speaker 16: on my four U feed right which is the feed
Speaker 16: that's supposed to be tailored recommendations for you, eleven of
Speaker 16: the first fifteen posts that I saw were from Elon himself,
Speaker 16: and all of them were, you know, supporting Trump, pushing
Speaker 16: Trump's Republican or conservative agenda. I mean, he's very much
Speaker 16: taken this this social network and feels to me like
Speaker 16: he's using it to really hammer home his own personal
Speaker 16: politics in this fight to help.
Speaker 9: Trump win the election in a couple of weeks.
Speaker 7: The activity is notable.
Speaker 6: I also point out Vice President Harris has two accounts
Speaker 6: on X right, her official vice presidential account and then
Speaker 6: her I guess we would call it personal campaign account.
Speaker 6: And she also posts daily and regularly, and that appears
Speaker 6: in my timeline, maybe not as much as Musk's posts appear,
Speaker 6: But I guess the point that we would point make
Speaker 6: is that it's the content and the commentary. It's very
Speaker 6: similar to what one might find on truth Social Cut.
Speaker 9: Yeah.
Speaker 16: I kind of jokingly called ex truth Social two point
Speaker 16: zero a few weeks ago in a newsletter that I wrote,
Speaker 16: because it feels very much like you are seeing President
Speaker 16: Trump's message hammered home repeatedly, you know, either through Elon,
Speaker 16: through Trump himself, through other supporters.
Speaker 9: You're right ed.
Speaker 16: I also have seen a lot of posts from Kamala
Speaker 16: Harris and others. It feels like my feed is almost
Speaker 16: one hundred percent US politics focused right now. It's interesting
Speaker 16: because back in you know, Twitter one point no days,
Speaker 16: they used to say, well, this is obviously an important
Speaker 16: news cycle. It's important thing for the service, but it's
Speaker 16: not the only thing. Right You would still see a basketball, baseball, sports,
Speaker 16: you would see culture, music, things like that. It feels
Speaker 16: to me like they've dial up the algorithm to really
Speaker 16: make the election front and center for every user, and
Speaker 16: I'm certainly noticing it every time I open the app
Speaker 16: these days?
Speaker 4: Does that matter long term?
Speaker 5: For Grock for example, it's AI chatbot and indeed, more broadly,
Speaker 5: what we end up wanting our social media platforms.
Speaker 16: For Yeah, it's been interesting to see X's approach here
Speaker 16: to the election compared to say Meta and what they're
Speaker 16: doing with Instagram and Facebook. Right, So, on the Meta side,
Speaker 16: they're basically saying, hey, we're trying to we're leaning away
Speaker 16: from the election. If you're talking about the election, we're
Speaker 16: not going to recommend that post to people outside of
Speaker 16: your network, whereas X is doing the exact opposite, And
Speaker 16: it's just going to be interesting to see long term,
Speaker 16: you know, does this burn people out?
Speaker 12: Or is this what people want?
Speaker 16: Do they want to go and see election twenty four
Speaker 16: to seven information, in which case maybe X is making.
Speaker 9: The right choice, or is Meta right?
Speaker 16: Is Mark Zuckerberg right right that people don't want this
Speaker 16: stuff thrown in their face twenty four to seven through
Speaker 16: sixty five, So we'll kind of see. I think, you know,
Speaker 16: for me personally, it feels a little overkill. It feels
Speaker 16: a little bit like burnout to me over on X.
Speaker 16: But you know, that's the decision Elon has made, and
Speaker 16: again interesting comparison this election cycle to have a meta
Speaker 16: and Mark Zuckerberg going in a very different direction in
Speaker 16: terms of how much they want to prioritize election content.
Speaker 5: Particularly after the election too. Co Agner, thank you so
Speaker 5: much on that key story. Meanwhile, coming up talking VC
Speaker 5: Ziko who Zapati joins us next in our VC spotlight
Speaker 5: as the AI focused business raises money.
Speaker 17: This is Bloomberg Technology.
Speaker 7: Okay.
Speaker 6: AI powered procurement software startup ZIP is changing the way
Speaker 6: companies obtain the supplies they need to operate and recently
Speaker 6: announced it's laid this round one hundred and ninety million
Speaker 6: dollars Series D in funding.
Speaker 7: Here with more.
Speaker 6: Zip co founder and CEO, Jewel Zipade, Welcome to the program. Actually,
Speaker 6: the backstory is really interesting and it's worth getting right
Speaker 6: to it.
Speaker 7: Used to work at Airbnb and you.
Speaker 6: Had a specific job and you were basically like, this
Speaker 6: isn't working. So you went with some friends and colleagues
Speaker 6: and designed something better and were like, you know what,
Speaker 6: let's just.
Speaker 7: Start a company that does this. That's pretty fair, right.
Speaker 12: No, that's absolutely fair.
Speaker 18: So my co founder Lu and I were both engineering
Speaker 18: and product leaders at Airbnb, and we had to go
Speaker 18: through this confusing procurement process of if we need to
Speaker 18: buy something in the business, what are all the approvals
Speaker 18: that are required right between budget and legal and IT
Speaker 18: and security and all the different teams.
Speaker 12: And that's what we solved.
Speaker 18: We started ZIP to solve for it by providing one
Speaker 18: front door for any employee.
Speaker 12: In the business to request a purchase.
Speaker 5: I'm really interested that your AI powered what form is
Speaker 5: this generative AI?
Speaker 4: More broad AI?
Speaker 5: Because you're serving open AI for example, so you built
Speaker 5: upon their.
Speaker 4: Large language model. How does that all go?
Speaker 5: What you building that they can't internally for their own
Speaker 5: process procurement.
Speaker 18: Yeah, that's a great that's a great question. It's absolutely
Speaker 18: generative AI. And if you think about the procurement process
Speaker 18: as a whole, right, we have access to so much
Speaker 18: relatively unstructured data right when employees at organization are are
Speaker 18: buying things. There are millions of contracts invoices, order form,
Speaker 18: so much data that's available, and we can take AI
Speaker 18: and actually apply it in a really, really practical way,
Speaker 18: which is what we do for our enterprise customers today
Speaker 18: to do everything from helping pars invoices to reading msas
Speaker 18: and contracts for risks and the like.
Speaker 5: You're with the money hiring engineering talent, R and D talent,
Speaker 5: you're setting up an AI lab. And I go back
Speaker 5: to really what is underlying all of this? Are you
Speaker 5: building your own large aguage models to be able to
Speaker 5: do this? Are you're looking to develop that more with
Speaker 5: these tools that you want to build an AI lab?
Speaker 12: That's a great question.
Speaker 18: So we absolutely are using these funds to invest and
Speaker 18: create an AI lab and really double click on if
Speaker 18: you know, like I sort of said, like the data
Speaker 18: that we have access to as part of procurement and
Speaker 18: really think about how do we best apply it in
Speaker 18: a practical way. And so there's there's more that we'll
Speaker 18: have to share there in the coming.
Speaker 7: Months, and so which LM me using.
Speaker 18: So we today largely use the open EI models.
Speaker 6: I broke my own rule, which is I always start
Speaker 6: on what's newest and fresh. But I wanted the backstory
Speaker 6: because it was probably two years ago that you and
Speaker 6: I first met. So in that time you've raised a
Speaker 6: lot of money, you have a decent valuation more than
Speaker 6: two billion, But have you built a business in that time?
Speaker 6: Have you managed to take this product and technology and
Speaker 6: actually sell it to other businesses and enterprises who in
Speaker 6: turn are using it themselves.
Speaker 18: Yeah, of course, we've been really privileged to work with
Speaker 18: some of the largest enterprises in the world, companies like
Speaker 18: Discover Financial, Snowflake, Prudential, Coinbase, and many others. And even
Speaker 18: as an example, Discover Financial has saved over three thousand
Speaker 18: different business approvals that they've realized they don't need anymore,
Speaker 18: or Snowflake has over three hundred and five million dollars
Speaker 18: of ZIP supported savings logged. What we find is that
Speaker 18: procurement is actually the second largest area of spend for
Speaker 18: any business in.
Speaker 7: The world after payroll.
Speaker 18: Right, it's trillions of dollars in the world that you know,
Speaker 18: employees of companies are buying, you know, for office supply,
Speaker 18: software and the like, and so there's so much opportunity.
Speaker 6: And for you yourselves building on top of open Ai,
Speaker 6: what's that been like? You know, in the news cycle,
Speaker 6: it's pretty chaotic when it comes to open ai.
Speaker 7: But as a customer or partner, what was it like
Speaker 7: for you?
Speaker 18: I'd have to say it's been it's been great and
Speaker 18: the feedback that we've we've received from customers has been
Speaker 18: really positive. As an example, Coinbase has saved thousands and
Speaker 18: thousands of hours with ZIP processing, you know, hundreds of
Speaker 18: thousands of invoices in a much more automated way.
Speaker 5: ZIP co founder and CEO Jules Zabade, thanks for coming
Speaker 5: on here.
Speaker 6: Perplexity the AI company trying to build a search product
Speaker 6: that rivals Googles in early talks to raise funding from
Speaker 6: investors at evaluation of roughly nine billion dollars. That's according
Speaker 6: to a Bloomberg source. Bloomberg Sharen Gafari broke the news
Speaker 6: and joins us with the latest. So what do we
Speaker 6: know about the round? This is a name that's coming
Speaker 6: up a lot at the moment.
Speaker 7: Sharene That's right.
Speaker 1: I think it is a reflection of how much there
Speaker 1: is interest in continuing to invest in.
Speaker 19: This AI wave, this AI bubble.
Speaker 2: Right.
Speaker 1: We've seen open Ai recently close a mega round, and
Speaker 1: now I think there seems to be continued interest in
Speaker 1: getting in on that. Perplexity is very popular with people
Speaker 1: who are looking to use AI for search.
Speaker 7: Let's just talk.
Speaker 5: About the moat that it's built, or if there is
Speaker 5: indeed a mote, because many have felt that this is
Speaker 5: clear competitive threat to Google, but Google can equally perhaps
Speaker 5: take it on itself, that's right.
Speaker 1: I mean Perplexity really had the head start in using
Speaker 1: the most cutting edge AI to kind of make a
Speaker 1: standalone app where you.
Speaker 19: Can instead of googling something, you can search.
Speaker 1: For it and at all your research and all your
Speaker 1: answers right there and kind of one neat product.
Speaker 19: So I think they had a head start with that.
Speaker 1: I think, of course, Google is also increasingly integrating AI
Speaker 1: into their answers, but I've talked to a lot of
Speaker 1: folks who are starting to even stop using Google and
Speaker 1: use Perplexity.
Speaker 19: So I will say it's very popular with.
Speaker 1: Certain kind of early adopters I would say in AI,
Speaker 1: and I think that's reflected in this investor interest.
Speaker 6: So perplex you want to raise five hundred million dollars
Speaker 6: according to our reporting, but the valuation is a pretty
Speaker 6: big jump from where it last raised money.
Speaker 7: Do we know who wants to get in on this?
Speaker 6: You know, I have in the back of my mind
Speaker 6: that open AI doesn't want its investors looking elsewhere.
Speaker 19: Right, I think we're still reporting that out.
Speaker 1: But one thing I will say is that Perplexity has
Speaker 1: been increasingly trying to get into sort of enterprise search
Speaker 1: things like financial search.
Speaker 19: You know, searching through customer data.
Speaker 1: So I think that's going to be an increasing focus
Speaker 1: and potentially something that investors are looking at.
Speaker 7: Bloomberg sureing Gafari another great piece of reporting. Thanks so much, Caro,
Speaker 7: what you got.
Speaker 5: I've got to turn on attention to Apple now because
Speaker 5: it's new iPad that's designed specifically with AI and mind
Speaker 5: is being broken down by Mark German, who has more.
Speaker 5: It was power on this weekend, very well read throughout.
Speaker 5: Just tell us what's new when it comes to the iPad.
Speaker 20: So earlier last week, Apple announced the new iPad Mini.
Speaker 20: It's the first update to that product in about three years.
Speaker 9: And this epipemy doesn't have a lot of new functionality.
Speaker 20: Food they did is they upped the memory and they
Speaker 20: up the processor to match last year's iPhone.
Speaker 9: And why is that important?
Speaker 20: Because that allows it to support Apple Intelligence. Now, as
Speaker 20: we talked about a few times now, Apple Intelligence, at
Speaker 20: least the first few iterations not that impressive, right, You're
Speaker 20: missing some of the more whizbane features like generative AI
Speaker 20: created emojis, but you do get things like notification summaries.
Speaker 20: Now this is launching next week. I don't find the
Speaker 20: AI features that impressive. But Apple does have a secret
Speaker 20: advantage once the AI starts working, once they either build
Speaker 20: or acquire or pay their way into successful AI features,
Speaker 20: This new iPad mine shows the company's ability to rapidly
Speaker 20: add support for new features across this ecosystem in a
Speaker 20: way that really isn't matched by Google, Samsung, or any
Speaker 20: other provider. So while it's a small update, it's indicative
Speaker 20: of the larger overall ability that the company has to
Speaker 20: bring features downline very quickly.
Speaker 6: And it makes the iPad minis price point interesting because
Speaker 6: you know, from a process as standpoint, it's the same
Speaker 6: as this right iPhone fifteen Pro. They both have a
Speaker 6: seventeen and they're kind of double dipping a little bit.
Speaker 6: I mean you just talked about that secret strategy or
Speaker 6: secret advantage.
Speaker 7: Go a little bit further on that mark.
Speaker 20: Yeah, Well, this processor is the same processor as last year.
Speaker 20: It's a chip they no longer make other than for
Speaker 20: this product, right, and so they had a lot of
Speaker 20: leftover components from production of the iPhone fifteen Pro.
Speaker 9: There's a process called binning, which essentially means.
Speaker 20: Processors that we some of their components during the production process. Right,
Speaker 20: So the fifteen pro version of the A seventeen chip
Speaker 20: has six.
Speaker 9: CPU cores are the minion processing cores in the chip.
Speaker 9: The ones in this new ipaid many.
Speaker 20: Have five processing cores, which essentially means these.
Speaker 9: Have been bin or they've lost the core during production.
Speaker 20: So I'm not saying that these are the bad ones
Speaker 20: that they threw away. But what I am saying it's
Speaker 20: about a little bit of a stripped down version of
Speaker 20: last year's processor, something that's been recycled here and from
Speaker 20: an operational standpoint, it's a big win for Apple, especially
Speaker 20: for margins.
Speaker 5: So on a new iPad mini, am I going to
Speaker 5: be able to design my latest Nikes? Briefly, Mark, you've
Speaker 5: been writing about Tim Cook's other key role right now,
Speaker 5: Well to.
Speaker 20: Do the new iPad many does support the new Apple
Speaker 20: pencil pro I should add that, right, but the previous
Speaker 20: ones and support older Apple pencils, and you certainly could
Speaker 20: draw your Nikes there. I thought this story was interesting
Speaker 20: because I think a lot of people don't realize that
Speaker 20: Tim Cook has a bit of a side gig, and
Speaker 20: that's being the lead independent director of Nike. Nike has
Speaker 20: been going through its tumultuous period and obviously as a
Speaker 20: board member, Tim Cook.
Speaker 9: Has been helping out. He helped bring on their new CEO,
Speaker 9: Elliott Hill. That hire has all the hallmarks of.
Speaker 20: A Tim Cook higher and so we'll see what happens
Speaker 20: tonight you over the next six months with the new leadership.
Speaker 4: Mark German, you're busy as always. We appreciate it. Now,
Speaker 4: that does it for this edition of Bloomberg Technology.
Speaker 6: Ed absolutely jam packed recap on the pod. You know
Speaker 6: where to find the pod online on Apple, Spotify, iHeart
Speaker 6: and of course on the Bloomberg platforms from London and
Speaker 6: San Francisco.
Speaker 7: This is Bloomberg Technology