WEBVTT - Amazon Gets in on AI and Ether Rises After Update 0:00:01.400 --> 0:00:04.760 From the hard of We're Innovation, Money and Power Collie 0:00:04.960 --> 0:00:09.680 in Silicon Vallet, NBM. This is Bloomberg Technology with Caroline 0:00:09.760 --> 0:00:25.800 Hide and Ted loved Love. I'm Caroline Hide at work 0:00:25.840 --> 0:00:28.600 Bloomberg's World headquarters in New York and I made Love 0:00:28.680 --> 0:00:31.760 law out here in San Francisco. This is Bloomberg Technology 0:00:31.880 --> 0:00:35.040 coming up. Amazon the latest to show love for AI. 0:00:35.479 --> 0:00:38.400 In Andy Jesse's annual shareholder letter, the CEO pledges to 0:00:38.520 --> 0:00:42.760 keep investing in such growth areas despite cost cutting initiatives. 0:00:43.400 --> 0:00:45.360 We're going to dive deep into the world of crypto 0:00:45.440 --> 0:00:47.839 as Ether tops two thousand U S dollars after its 0:00:47.840 --> 0:00:50.960 software update went off without a hitch. John wuerav Labs 0:00:51.040 --> 0:00:53.800 joints to discuss plus, how does a four day work 0:00:53.800 --> 0:00:58.320 week sound. We'll speak with Nobel Prize winning economist Christopher Sarides, 0:00:58.680 --> 0:01:02.240 who says AI it may increase productivities so much will 0:01:02.280 --> 0:01:05.720 shave a day off your weekly work calendar. At first, 0:01:05.760 --> 0:01:07.919 a big name and a big outperformer in the market 0:01:07.959 --> 0:01:09.600 is Amazon as well. You look at the gains the 0:01:09.600 --> 0:01:11.119 stock has made. It took it a while to get 0:01:11.200 --> 0:01:14.720 going after they introduced two new large language models. We're 0:01:14.720 --> 0:01:16.240 going to talk a lot about this throughout the day 0:01:16.280 --> 0:01:20.640 on Bloomberg Television, but it's focused pretty firmly on cloud customers, 0:01:20.800 --> 0:01:24.440 a tool for generating text, but also a sort of 0:01:24.520 --> 0:01:27.720 platform to foster an ecosystem of AI. That stock up 0:01:27.760 --> 0:01:29.679 eight tens of percent on a two day basis, but 0:01:29.720 --> 0:01:33.920 really jumping higher caroline in this early trading of Thursday's session. Yeah, 0:01:33.920 --> 0:01:37.200 and the Titan announcement all came within a focus from 0:01:37.240 --> 0:01:39.840 Amazon CEO Andy Jase on or where they're going to 0:01:39.840 --> 0:01:43.000 be investing. It's his second annual letter to shareholders, and 0:01:43.040 --> 0:01:45.399 he read a pledge to keep putting money into big, 0:01:45.440 --> 0:01:48.920 long term mets despite those cost cuts and an uncertain economy. 0:01:49.200 --> 0:01:52.120 He's moving ahead with a global expansion, looking at efforts 0:01:52.120 --> 0:01:54.480 to become a bigger player on groceries and healthcare and 0:01:54.600 --> 0:01:57.520 of course as a generative AI part. Let's talk all 0:01:57.560 --> 0:02:00.160 of that with Bloomberg's Spencer Soap, and let's go to 0:02:00.200 --> 0:02:03.560 the old school Amazon and they might say that AI 0:02:03.720 --> 0:02:05.360 is an old school for them too, but let's talk 0:02:05.360 --> 0:02:08.000 about groceries. Let's talk about e commerce. I mean, where 0:02:08.040 --> 0:02:11.560 are they looking to expand there on groceries in e commerce? 0:02:11.600 --> 0:02:14.040 Just because there's such huge consumer spending categories, and it's 0:02:14.080 --> 0:02:16.600 not really new. You know, Amazon has been trying that 0:02:16.639 --> 0:02:19.680 for a while now, you know, groceries more than a decade, 0:02:19.760 --> 0:02:22.200 and then they had that the big Whole Foods acquisition 0:02:22.840 --> 0:02:25.320 several years ago, which has kind of fallen flat. They've 0:02:25.320 --> 0:02:28.120 got this new iteration of a supermarket. They've tried, they 0:02:28.200 --> 0:02:30.560 tried Amazon Go. They've had a lot of false starts 0:02:30.560 --> 0:02:33.200 on it, but it's still just such a huge spending category. 0:02:33.440 --> 0:02:36.520 And then it doves tails nicely with healthcare, particularly pharmacy, 0:02:36.720 --> 0:02:38.480 and Amazon is trying a lot of the same old 0:02:38.480 --> 0:02:41.880 tricks that other big retailers try, like you know, cheap, 0:02:42.280 --> 0:02:45.280 cheap prescription drugs. You know, everybody and his brother does that, 0:02:45.919 --> 0:02:48.880 so it's it's not really differentiating, but they remain they 0:02:48.880 --> 0:02:51.000 remain important targets for Amazon just as a way to 0:02:51.200 --> 0:02:53.440 grow revenue because there's so much money spent in those 0:02:53.480 --> 0:02:56.720 in those areas spend. So the commentary around AWS is 0:02:56.760 --> 0:02:58.920 really interesting. You know, this has been the cash cow 0:02:59.400 --> 0:03:02.919 for Amazon, and let yeah, Jasse points out the short 0:03:03.040 --> 0:03:06.600 term headwinds the challenges facing AWS, and then gave us 0:03:06.600 --> 0:03:09.280 this kind of long time horizon of how well it 0:03:09.320 --> 0:03:12.760 can do even the next decade. Yeah, and he was 0:03:12.840 --> 0:03:15.360 he was definitely trying to you know, fleck back to 0:03:15.480 --> 0:03:19.760 history where Amazon faced difficult economic conditions and prevailed, you know, 0:03:19.840 --> 0:03:22.400 did made the hard decisions, made tough choices, but still 0:03:22.440 --> 0:03:24.000 came out at the end of the at the end 0:03:24.000 --> 0:03:26.560 of the tunnel. Anythink, trying to emphasize that Amazon is 0:03:26.560 --> 0:03:30.280 still a strong company, that that can emerge through this uh, 0:03:30.320 --> 0:03:33.000 through it through a downturn, and come out stronger on 0:03:33.160 --> 0:03:35.320 the other end. And it's really the one area where 0:03:35.320 --> 0:03:39.080 he can kind of gin up some some excitement and enthusiasm. 0:03:39.120 --> 0:03:40.360 You know, that's really what he had to do with 0:03:40.400 --> 0:03:43.560 this letter. The stocks down you know, about half nearly 0:03:43.600 --> 0:03:46.160 nearly half from its pandemic highs. You know that that 0:03:46.240 --> 0:03:49.480 rips you know, not just investors, but also employees who 0:03:49.480 --> 0:03:51.360 get a lot of their compensation by the by the 0:03:51.400 --> 0:03:54.560 stock value. Then also all of the cuts of deteriorated morale. 0:03:54.800 --> 0:03:56.720 So he's got to you know, it's a heavy lift 0:03:56.760 --> 0:03:58.080 for him, but he's got to do something to try 0:03:58.080 --> 0:04:00.360 to try to energize this company right now. And at 0:04:00.400 --> 0:04:02.200 the end of the letter he tries to do just that. 0:04:02.280 --> 0:04:05.400 With the focus on artificial intelligence, trying to remind us 0:04:05.480 --> 0:04:07.920 that for decades they've been looking at machine learning, they're 0:04:07.920 --> 0:04:10.200 looking at chip investment there, but just talk to us 0:04:10.240 --> 0:04:12.760 about the large language models that are being offered and 0:04:13.080 --> 0:04:16.960 what makes it different because it's not a chatbot. Yeah, 0:04:16.960 --> 0:04:18.760 and I think what Amazon is really trying to say 0:04:18.839 --> 0:04:22.000 is listen. You know, if you look at the history 0:04:22.000 --> 0:04:23.920 in the marketplace model, they just kind of want to 0:04:23.920 --> 0:04:26.280 be in the middle of it. Amazon wants to position 0:04:26.320 --> 0:04:28.919 itself as a as a as a marketplace where you 0:04:28.960 --> 0:04:31.080 go to access these tools, and as long as it's 0:04:31.120 --> 0:04:32.880 got people coming for those tools, it's going to get 0:04:32.920 --> 0:04:36.320 the best tools that people want exposure to. So I 0:04:36.320 --> 0:04:39.760 think it's really looking looking to make itself, uh, you know, 0:04:40.080 --> 0:04:42.800 a marketplace for ideas and a can do it for 0:04:42.839 --> 0:04:47.040 these ideas to be utilized. Right Bloomberg Spencer, Soapa or 0:04:47.040 --> 0:04:50.239 Addie Seattle, thank you and stay with us on Bloomberg Television. 0:04:50.279 --> 0:04:53.719 We have a conversation later today with AWS CEO Adams 0:04:53.800 --> 0:04:56.200 Alpski that you don't want to miss at two pm 0:04:56.200 --> 0:04:58.680 East and eleven am Pacific. I've been speaking carow to 0:04:58.880 --> 0:05:01.880 some AWS custom this morning. We certainly have some interesting 0:05:02.200 --> 0:05:04.680 AI related questions to put to him. And another key 0:05:04.720 --> 0:05:07.719 story that we're following SoftBank moving to sell more of 0:05:07.760 --> 0:05:10.400 its stake in Chinese Internet. John Ali Baba, I'm winding 0:05:10.440 --> 0:05:14.119 with that initial bed that spurred Massochi's son to really 0:05:14.279 --> 0:05:17.359 take ambitions to invest billions of dollars into other startups, 0:05:17.520 --> 0:05:19.880 trying out some pieces safe more is isabel Lee and 0:05:20.720 --> 0:05:23.200 why sell out and in what way are they setting out? 0:05:23.360 --> 0:05:26.000 So this is really interesting. So SoftBank is looking to 0:05:26.000 --> 0:05:28.320 sell a majority of its steake to China to really 0:05:28.320 --> 0:05:31.400 trim to Availibaba, to trim it stake in China and 0:05:31.440 --> 0:05:33.760 to raise fund. So this is quite a move because 0:05:33.880 --> 0:05:37.440 from holding a majority stake at one point around thirty 0:05:37.440 --> 0:05:40.760 four percent, they're whittling it down to four percent three 0:05:40.800 --> 0:05:43.440 point ninety eight to be exact. So this year they're 0:05:43.480 --> 0:05:46.640 looking to sell seven billion worth of shares. That's following 0:05:46.720 --> 0:05:49.520 last year where they sold around twenty nine billion. And 0:05:49.560 --> 0:05:51.600 the important thing to note here is that these are 0:05:51.640 --> 0:05:54.320 prepaid forward contracts, which means that they could still buy 0:05:54.400 --> 0:05:57.279 back the shares, but from the previous deals they just 0:05:57.360 --> 0:05:59.720 didn't hold on to those and just sold them. And 0:06:00.360 --> 0:06:03.880 this all comes at a time that the Vision Fund 0:06:03.880 --> 0:06:07.160 bet the bets are startups to SoftBank, I just haven't 0:06:07.200 --> 0:06:11.000 fed that overall business. Well, it's why the market's interpretation 0:06:11.000 --> 0:06:13.080 of this is so interesting. You know, it says something 0:06:13.120 --> 0:06:16.840 about China and investors exposure to China, but it also 0:06:16.839 --> 0:06:19.400 says quite a lot about soft Bank, right about what 0:06:19.440 --> 0:06:22.240 do we take away from this, about how soft Banks 0:06:22.240 --> 0:06:25.160 having to maneuver given the losses that it suffered from 0:06:25.160 --> 0:06:28.880 its startup bets. So this is really quite a pivotal 0:06:28.880 --> 0:06:31.560 moment because you're right, there's so many things at play here. First, 0:06:31.600 --> 0:06:33.719 for SoftBank, they lost a lot of money when they 0:06:33.760 --> 0:06:36.240 were investing a lot of money in Vision Fund, and 0:06:36.240 --> 0:06:37.839 as we know, a lot of those startups are now 0:06:37.880 --> 0:06:40.960 fledgend companies. And SoftBank said that they want to exercise 0:06:41.240 --> 0:06:44.360 regular they want excess financial prudence, they want to just 0:06:44.440 --> 0:06:46.479 cut back on risks, and they also want to raise 0:06:46.760 --> 0:06:49.520 money for the chip making design firm they're looking to 0:06:49.560 --> 0:06:51.800 take a public called arm But at the same time, 0:06:51.839 --> 0:06:54.560 this comes at a time when Ali Baba two hundred 0:06:54.600 --> 0:06:58.039 billion giant has broken down into six units, six baby 0:06:58.080 --> 0:07:00.320 babas as some people have called it. But we don't 0:07:00.320 --> 0:07:02.200 know how that's going to play out, because clearly there 0:07:02.200 --> 0:07:04.400 will be favorites. For instance, how bout that's a pow 0:07:04.520 --> 0:07:07.039 joel of Ali Baba, Likely that will do well, but 0:07:07.120 --> 0:07:09.520 what about the others. So there's so many factors that 0:07:09.680 --> 0:07:13.480 play here. China is now looking to really be more 0:07:13.520 --> 0:07:16.600 friendly to entrepreneurs, but then who still knows. I mean, 0:07:17.080 --> 0:07:20.800 this comes after several years of intense crackdown on Chinese 0:07:20.840 --> 0:07:23.760 tech giants. Ali Baba included all Right bloombergs Isabel Lee 0:07:24.160 --> 0:07:35.320 on the China Tech Beat. Thank you. Let's talk crypto. 0:07:35.440 --> 0:07:38.040 Let's talk ef right now at top two thousand dollars 0:07:38.040 --> 0:07:41.200 for the first time since August, after a widely anticipated 0:07:41.240 --> 0:07:44.640 software upgrade to what is the most commercially important blockchain 0:07:45.040 --> 0:07:48.320 went pretty according to plan and worries those initial rapid outflows, 0:07:48.320 --> 0:07:50.280 it seemed to be proved unfounded to see yup more 0:07:50.320 --> 0:07:53.000 than five percent as we speak. John Woo, president of 0:07:53.120 --> 0:07:57.240 Ava Labs building smart contracts platform Avalanche, is with us. 0:07:57.520 --> 0:07:59.240 Always great to have you in the house. It's nice 0:07:59.280 --> 0:08:03.320 to see you, Carol. Let's talk about what this upgrade means. 0:08:03.560 --> 0:08:06.560 I know that there's interoperability with Ethan, your platform that 0:08:06.560 --> 0:08:09.680 you're building. Is this going to help yet further just 0:08:10.320 --> 0:08:12.080 build back a little bit of confidence in the space 0:08:12.440 --> 0:08:14.680 a little yes. I mean it's a fantastic thing in 0:08:14.720 --> 0:08:17.520 the sense that going from proof for work to proof 0:08:17.560 --> 0:08:23.080 for stake basically decreases the energy requirement to run ethereum. 0:08:23.120 --> 0:08:25.720 The short term relief is basically it went without a 0:08:25.720 --> 0:08:29.080 technical glitch and there was not as much selling of 0:08:29.280 --> 0:08:32.200 eth out of this. So that's why ethereum is breaking 0:08:32.200 --> 0:08:35.079 through two thousand and the whole space is actually frankly 0:08:35.160 --> 0:08:39.000 doing decent, but it's important to understand why it's sing 0:08:39.080 --> 0:08:42.120 so well and who's buying it and that kind of thing. Yeah, 0:08:42.160 --> 0:08:45.439 because there is This is where we get the distinction 0:08:45.480 --> 0:08:49.000 between Bitcoin, which generally is just an asset and meant 0:08:49.000 --> 0:08:51.120 to be a store of value, then got e which 0:08:51.120 --> 0:08:53.880 the hope is around smart contracts, That hope is around adoption. 0:08:54.000 --> 0:08:57.520 But is that going to become an obvious use case 0:08:57.640 --> 0:08:59.160 right here, right now because we don't wait for the 0:08:59.240 --> 0:09:01.280 killer DAP And it does, and that is a use 0:09:01.320 --> 0:09:04.680 case for people in the crypto ecosystem in order to 0:09:04.720 --> 0:09:07.839 get yield. Now they can stake their ethereum, So that's 0:09:08.000 --> 0:09:13.280 very positive for in etherium, in crypto asset people. In fact, 0:09:13.320 --> 0:09:15.400 a lot of this rally we've seen in the last 0:09:15.520 --> 0:09:17.440 year to data to speak, it's been a better asset 0:09:17.480 --> 0:09:20.240 class than any other asset class, even tech stocks. Is 0:09:20.280 --> 0:09:24.120 because it's been driven by on chain people, crypto natives, 0:09:24.240 --> 0:09:27.160 and also international people. It's not so much that new 0:09:27.200 --> 0:09:30.720 money or the institutional adoption interesting and naturally it's all 0:09:30.720 --> 0:09:36.600 about well teasing out potentially future international and institutional adoption 0:09:36.640 --> 0:09:39.880 at the moment end where well, there's an NFT week 0:09:39.960 --> 0:09:41.880 going on here in New York and of a plenty 0:09:41.920 --> 0:09:44.320 of people focusing on the upgrade. But were you doing 0:09:44.360 --> 0:09:47.000 some sort of watch party out there at SF No, 0:09:47.000 --> 0:09:49.800 no watch party for me. For context, John twenty four 0:09:49.800 --> 0:09:52.800 hours ago, Kate Lawrence of bloc Celerat was on, We're 0:09:52.800 --> 0:09:55.440 talking about how for the industry, right amid all of 0:09:55.480 --> 0:09:59.480 the volatility in the pricing of certain tokens, people still 0:09:59.480 --> 0:10:03.080 watch the technological for the technology grow updates. My question 0:10:03.200 --> 0:10:05.760 is why why is it such a key moment for 0:10:05.840 --> 0:10:10.080 an industry to track the underlying technology that powers those platforms. 0:10:10.160 --> 0:10:13.400 So earlier I just said that the rally has been 0:10:13.440 --> 0:10:17.440 drawn by native crypto people and in my opinion for 0:10:17.559 --> 0:10:20.320 this asset class that continue to grow in price, at least, 0:10:20.640 --> 0:10:24.480 you really really need institutional buyers to come into the space. 0:10:24.720 --> 0:10:27.120 And for real institutional buyers to come into the space, 0:10:27.400 --> 0:10:31.400 you need real utility, real world use cases, and you're 0:10:31.440 --> 0:10:33.280 seeing that. You know, one of the big things for 0:10:33.960 --> 0:10:37.839 NFT NYC this time around versus last year is that 0:10:37.920 --> 0:10:41.960 although there are fewer people here, there's quality brands. A 0:10:42.040 --> 0:10:44.959 lot of brands are coming to see how the NFT 0:10:45.160 --> 0:10:48.800 construct can help them with their loyalty plans and loyalty 0:10:48.920 --> 0:10:53.000 programs and also increase engagement. So you're seeing some real 0:10:53.120 --> 0:10:56.880 use cases and discussion of building real things for big brands. 0:10:57.880 --> 0:11:00.000 You know, John, when last you were on with us 0:11:00.120 --> 0:11:03.400 is the afternoon the SVB collapsed, and you were going 0:11:03.440 --> 0:11:05.200 to come on and talk about what we're talking about 0:11:05.320 --> 0:11:09.040 right now, and we got sidetracked. In of all the 0:11:09.160 --> 0:11:13.200 volatility in recent weeks in markets, the industry's access to funding, 0:11:13.960 --> 0:11:16.080 what are you seeing in New York City among that 0:11:16.160 --> 0:11:19.120 NFT conversation is that a marketplace that's back on track 0:11:19.400 --> 0:11:21.880 and that people are kind of optimistic about investing in. 0:11:22.480 --> 0:11:25.319 So you're not seeing the OTC markets or the on 0:11:25.600 --> 0:11:29.400 ramps like FIAT like through coin Base into the crypto 0:11:29.480 --> 0:11:33.360 ecosystem really picking up. Yet they are still hesitant, but 0:11:33.880 --> 0:11:38.720 the excitement inside the ecosystem of crypto has been reinvigorated. 0:11:39.280 --> 0:11:41.920 Most of this price rally, people who don't realize happened 0:11:42.000 --> 0:11:45.400 right after SVB. It was a reminder to the crypto 0:11:45.480 --> 0:11:48.199 native people as to why they got into this space originally, 0:11:48.440 --> 0:11:51.520 the mistrust they have for large institutions. You know, that's 0:11:51.520 --> 0:11:54.520 why bigcoin became very popular after two thousand and eight. 0:11:54.679 --> 0:11:57.960 And because of that reminder, I think it reinvigorated the 0:11:58.040 --> 0:12:02.599 crypto native community. We saw a lot of uptick in 0:12:02.640 --> 0:12:05.200 Bitcoin and if maybe not so much the old coins job, 0:12:05.280 --> 0:12:08.880 but talk to us about your own initiatives right now, 0:12:08.920 --> 0:12:13.200 because you say there's utility, there's purpose. Big brands, well, 0:12:13.200 --> 0:12:15.719 you've got some key financial players coming on to try 0:12:15.760 --> 0:12:19.560 and understand how they can use blockchain technology, right name 0:12:19.640 --> 0:12:21.600 some of the people and what you're really building. So 0:12:21.679 --> 0:12:24.440 from what I'm seeing, especially in the US asset managers, 0:12:24.840 --> 0:12:27.400 they want to be involved in the space, but they're hesitant. 0:12:27.440 --> 0:12:29.840 They're not sure of the regulatory framework, and they need 0:12:29.840 --> 0:12:32.560 to learn the technology better. So this is why we 0:12:32.679 --> 0:12:36.480 announced yesterday a project called Spruce, which is a public 0:12:36.880 --> 0:12:41.160 blockchain permission only by the ky c k y b 0:12:41.360 --> 0:12:46.160 AML functionality. We're doing this in part with Wellington, trow 0:12:46.240 --> 0:12:49.160 Price and whis Entry. What they're going to experience is 0:12:49.200 --> 0:12:53.000 what the ability to see the power of execution and 0:12:53.559 --> 0:12:56.800 settlement in real time, the cost savings of putting this 0:12:56.920 --> 0:13:01.000 in this system together, and it's a safe place because 0:13:01.000 --> 0:13:05.320 it's a token valueless transfer. So it's a test net, 0:13:05.640 --> 0:13:10.439 but they will be able to experience an institutional defy component. 0:13:10.720 --> 0:13:13.520 No one's been able to do this so far, and 0:13:13.559 --> 0:13:15.240 this is gonna be the first time they can really 0:13:15.280 --> 0:13:19.840 explore defy. John, I get what the Spruce test net 0:13:19.880 --> 0:13:22.079 offers to both the buy and sell side in terms 0:13:22.120 --> 0:13:25.880 of access. You're a businessman, I'm actually quite curious about 0:13:25.920 --> 0:13:28.000 how you make money off this model. What is the 0:13:28.040 --> 0:13:30.840 business that you've created here? Well, first we have to 0:13:30.880 --> 0:13:35.160 create adoption, and this is the first step towards adopting this. 0:13:35.800 --> 0:13:39.200 So All the Labs is a software technology company. At 0:13:39.240 --> 0:13:43.400 some point we will provide services no different from AWS 0:13:43.480 --> 0:13:48.760 for things in the cloud. Instead of storage and compute power. 0:13:48.840 --> 0:13:52.720 Services will be providing different features and tools for developers 0:13:52.800 --> 0:13:56.600 and for places like Wellington or Tiro or Wisdom Tree 0:13:56.679 --> 0:13:59.360 to create their own applications, for them to create their 0:13:59.400 --> 0:14:02.240 own them or their marketplace, for them to create their 0:14:02.240 --> 0:14:05.800 own lending barring DAP. And right now we've gotten partners 0:14:05.960 --> 0:14:10.200 in the applications and we've gotten the traditional institution to 0:14:10.360 --> 0:14:14.360 try things out and see what DeFi is all about. John, 0:14:14.400 --> 0:14:16.560 we have a lab's good to catch up. Thank you 0:14:16.600 --> 0:14:19.200 for coming back on the show. Now coming up. In 0:14:19.280 --> 0:14:22.560 an effort to reduce its reliance on China, Apple is 0:14:22.560 --> 0:14:26.160 putting India in the spotlight and tripling production in what's 0:14:26.200 --> 0:14:30.280 now considered the world's fastest growing smartphone market. Caroline sick 0:14:30.280 --> 0:14:33.520 with India because we're also watching shows of emphasis. Sales 0:14:33.720 --> 0:14:36.600 outlook look pretty disappointing. End that really under schools just 0:14:36.640 --> 0:14:39.520 how clients are tightening it budgets. They're trying to weather 0:14:39.520 --> 0:14:41.840 this economic slowdown. Is a sea off by ten percent 0:14:41.920 --> 0:14:44.760 in the last couple of days. From New York and 0:14:44.880 --> 0:15:07.800 from San Francisco, this is ret It's time now for 0:15:07.960 --> 0:15:11.360 talking tech trucking startup Trailler. Well, it's winding down its 0:15:11.360 --> 0:15:14.040 business in Pakistan and stopped taking new orders last month. 0:15:14.080 --> 0:15:17.000 It's according to sources, now says the Egypt based platform 0:15:17.200 --> 0:15:19.840 that connects hippers to carriers. I was looking to exit 0:15:19.880 --> 0:15:23.320 an economy that's going through one of its biggest crises. Meanwhile, 0:15:23.480 --> 0:15:26.960 US purchases from machine of machines from Taiwan to make 0:15:27.000 --> 0:15:29.560 computer chips they rose to a record hive seventy one 0:15:29.600 --> 0:15:32.280 million in March. That says the Biden ministration here is 0:15:32.320 --> 0:15:36.080 working to reinvigorate the domestic chip industry. Taiwan saw its 0:15:36.160 --> 0:15:38.320 USX sports wherese one the forty two percent in the 0:15:38.400 --> 0:15:40.640 month in March from a year earlier. It's all according 0:15:40.680 --> 0:15:44.320 to data from the Ministry of Finance. An Apple assembled 0:15:44.360 --> 0:15:47.920 more than seven billion dollars worth of iPhones in India 0:15:48.080 --> 0:15:51.440 last fischool year, tripling the production there after accelerating a 0:15:51.640 --> 0:15:55.240 move beyond China. Now the iphonemaker now makes almost seven 0:15:55.280 --> 0:15:57.800 percent of its phones in India, according to sources and 0:15:57.880 --> 0:16:00.200 ed we're going to stick on that theme. Yeah, it's 0:16:00.200 --> 0:16:03.760 a really key piece of reporting in an ongoing situation 0:16:03.800 --> 0:16:06.680 for Apple. That's bringing Anna Agran, a senior tech analyst 0:16:07.040 --> 0:16:11.840 at Bloomberg Intelligence, so in shore. Apple is building more 0:16:11.880 --> 0:16:15.760 iPhones in India and exporting more iPhones in India. In 0:16:15.840 --> 0:16:21.320 your fundamental analysis, what's the net result for Apple financially. Yeah, so, 0:16:21.480 --> 0:16:23.320 you know, when you look at it, I think it's 0:16:23.120 --> 0:16:25.760 just more of a supply chain issue than financial because, 0:16:25.800 --> 0:16:28.880 frankly speaking, the best supply chain is in China. It's 0:16:28.920 --> 0:16:31.640 taken about twenty years to build that. So they build 0:16:31.680 --> 0:16:34.200 it anywhere outside it's going to be slightly more expensive 0:16:34.320 --> 0:16:37.920 in the first few years. But frankly speaking, when we 0:16:37.960 --> 0:16:41.440 saw back in November when because of COVID the iPhone 0:16:41.440 --> 0:16:44.160 pro factory shut down, it did have an impact on 0:16:44.200 --> 0:16:48.760 them financially. That too, plus the ongoing geopolitical tensions between 0:16:48.840 --> 0:16:51.120 the US and China. You know, it is in the 0:16:51.160 --> 0:16:55.160 best interest of Apple and Apple shareholders that they diversify 0:16:55.280 --> 0:16:58.280 the supply chain outside of China to other regions, whether 0:16:58.320 --> 0:17:01.520 it's Vietnam, India, Mexico, or almost everywhere. I would say, 0:17:02.000 --> 0:17:05.120 and what about the end user in India as well. 0:17:05.280 --> 0:17:08.400 It's not only about supply from there, it's the demand 0:17:08.400 --> 0:17:11.040 there that they want to satiate. You Yeah, I think 0:17:11.080 --> 0:17:12.680 this is one of one of the most fun things. 0:17:12.680 --> 0:17:15.880 You look at it. You know, if Apple's installed base 0:17:16.119 --> 0:17:19.880 in India is so small compared to the population, which 0:17:19.920 --> 0:17:21.720 means it is going to be a very big growth 0:17:21.760 --> 0:17:24.240 market for them over the next decade. They're opening a 0:17:24.280 --> 0:17:27.679 store next you know, next week in India, and you know, 0:17:27.720 --> 0:17:29.560 we have looked at some numbers. So if they are 0:17:29.600 --> 0:17:32.879 about let's say, six hundred million smartphones in India, you know, 0:17:32.920 --> 0:17:35.320 Apple only plays in that ten percent of the market. 0:17:35.320 --> 0:17:37.399 I mean, they have a very small market share, not 0:17:37.440 --> 0:17:40.320 even ten percent there. The market share is miniscal. Less 0:17:40.320 --> 0:17:44.000 than five percent of Apple's iPhone revenue comes from India 0:17:44.000 --> 0:17:47.119 based on artwork, and I think this is this is 0:17:47.160 --> 0:17:49.800 a big growth opportunity for them in the coming years, 0:17:49.840 --> 0:17:53.240 and largely because as the middle class in India you know, 0:17:53.280 --> 0:17:56.359 becomes richer and and and it's more affluent, they're able 0:17:56.400 --> 0:17:59.400 to afford a luxury product like Apple. You know, currently 0:17:59.440 --> 0:18:03.359 that market is dominated by Android. We also reported that 0:18:03.520 --> 0:18:08.520 like local regulations require you know, components sourced and supply 0:18:08.600 --> 0:18:11.960 chain source within that nation. Apple seems to be kind 0:18:12.000 --> 0:18:15.840 of rethinking it's global strategy right now when it comes 0:18:15.880 --> 0:18:19.960 to India. How quick does that ramp in market opportunity come. 0:18:20.000 --> 0:18:22.880 It seems like this is a long term project, right Yeah, yeah, Yeah, 0:18:22.920 --> 0:18:24.760 it is going to be a long term project because 0:18:24.800 --> 0:18:26.640 you know, but I mean, as you can think about it. 0:18:27.480 --> 0:18:30.520 If ninety percent of the iPhones are under let's say, 0:18:30.800 --> 0:18:34.320 you know, three hundred four hundred dollars, I shouldn't say iPhone, 0:18:34.359 --> 0:18:38.160 but of the smartphones are under three hundred dollars, Apple 0:18:38.200 --> 0:18:40.560 doesn't play in that market, so it's can't even tap 0:18:40.600 --> 0:18:43.280 into it. But it's as that middle class becomes more 0:18:43.320 --> 0:18:46.719 raflu when they are richer, the per capita income goes up, 0:18:46.920 --> 0:18:48.640 and I think that's more of a five to ten 0:18:48.720 --> 0:18:51.240 year trend rather than something that will happen over the 0:18:51.280 --> 0:18:54.520 next couple of years and giving us the global perspective. 0:18:54.560 --> 0:18:57.920 We love it. Granna, thank you of Blomberg Intelligence. Let's 0:18:57.960 --> 0:19:00.920 talk about now we Work a bench just started by 0:19:00.960 --> 0:19:04.880 we Work and a private equity firm, Roan Group. Oh, accordingly, 0:19:05.040 --> 0:19:08.320 it's defaulted on a loan for a San Francisco office tower. Now, 0:19:08.320 --> 0:19:10.199 the two hundred and forty million dollars loan was for 0:19:10.320 --> 0:19:13.600 a building in San Francisco's Financial District, which is owned 0:19:13.640 --> 0:19:16.080 by funds managed by the venture formed by we Work 0:19:16.119 --> 0:19:19.160 and Roan back in twenty nineteen. That was to buy 0:19:19.240 --> 0:19:29.840 an oversea with estate led. Welcome back to Bloomberg Technology. 0:19:29.840 --> 0:19:32.560 I'm Caroline Hide in New York and Imed Ludlow here 0:19:32.600 --> 0:19:35.080 in San Francisco. It's going to check on those markets. Caroline. 0:19:35.119 --> 0:19:37.760 This is what your technology sector looks like in the 0:19:37.800 --> 0:19:40.760 equity space, and that's that one hundred continuing to push higher, 0:19:41.080 --> 0:19:42.919 up one point six percent. You've got the kind of 0:19:42.920 --> 0:19:45.560 softening of data both on the jobs and inflation front, 0:19:45.800 --> 0:19:48.120 which is kind of fueling the idea that actually, when 0:19:48.160 --> 0:19:50.760 you come to the FED in this rate hiking cycle, 0:19:50.880 --> 0:19:52.760 we might be nearing the end. You can see out 0:19:52.760 --> 0:19:55.720 performance as well in the US listed shares of Chinese 0:19:55.800 --> 0:19:59.480 technology companies and bitcoin off session high as we were 0:19:59.480 --> 0:20:02.520 at a fifty week high on that bitcoin, but kind 0:20:02.520 --> 0:20:05.840 of pulled back a little bit near thirty thirty thousand, 0:20:05.960 --> 0:20:09.119 five hundred dollars per token. A lot of movement in 0:20:09.400 --> 0:20:12.680 the single names in the stock market around AI, Amazon 0:20:13.000 --> 0:20:16.880 pushing higher, both based on the annual shareholder letter from 0:20:16.960 --> 0:20:20.399 CEO Andy Jats up three point five percent, but also 0:20:20.480 --> 0:20:22.320 the news around their large language models, which I know 0:20:22.359 --> 0:20:25.040 you're going to get into. Other names gaining C three 0:20:25.080 --> 0:20:28.720 AI and some giving games back big Bear down seven percent, 0:20:28.800 --> 0:20:30.840 all of them kind of looking at how to use 0:20:31.320 --> 0:20:34.640 generative AI tools, but in their enterprise or cloudspace, which 0:20:34.680 --> 0:20:36.960 is where Amazon is really focused. Carrect Yeah, Big Bear 0:20:37.040 --> 0:20:39.560 looking to potentially sell more stock in the future, supply 0:20:39.680 --> 0:20:41.560 wearing a lower But let's go back to where you're 0:20:41.560 --> 0:20:44.560 just hinting out the Amazon News because it's joining Microsoft, 0:20:44.560 --> 0:20:47.400 it's joining Google, it's joining everyone basically in the generative 0:20:47.440 --> 0:20:50.920 AI race. End announcing technology aimed at its cloud customers 0:20:50.920 --> 0:20:55.000 in particular, as well as marketplace for AI tools from 0:20:55.080 --> 0:20:58.840 other companies. Now, the Amazon Web Services unit announced not one, 0:20:58.880 --> 0:21:01.879 but two of its own large language models, one designed 0:21:01.880 --> 0:21:04.560 to generate text and another that could help power web 0:21:04.640 --> 0:21:08.840 search personalization. But and it's big, but plans to release 0:21:08.920 --> 0:21:11.960 a chatbot as yet. But let's dig into this whole 0:21:11.960 --> 0:21:15.159 world of generative AI and in particular chat GPT. The 0:21:15.200 --> 0:21:18.719 revolution that basically seems to have opened, could it actually 0:21:18.760 --> 0:21:21.080 open for productivity to mean that you and I have 0:21:21.560 --> 0:21:24.440 just a four day workweek. Let's ask Nobel Prize winning 0:21:24.480 --> 0:21:28.160 labor economists. Sir Christopher Pisorealis is with US recently said 0:21:28.200 --> 0:21:31.879 that the labor market could adapt quickly enough your work 0:21:31.920 --> 0:21:34.960 has been so thoughtful about automation, the impact of technology 0:21:35.000 --> 0:21:37.639