WEBVTT - Nvidia Down After Missing Investors' Lofty Expectations and CA AI Bill Advances 0:00:01.400 --> 0:00:05.720 From Marhart where Innovation, Money and power Collie in Silicon 0:00:05.800 --> 0:00:06.680 Vallet NBN. 0:00:07.040 --> 0:00:10.480 This is Bloomberg Technology with Caroline Hyde. 0:00:10.160 --> 0:00:11.280 And Ed Loved Love. 0:00:25.239 --> 0:00:27.800 Live from New York and San Francisco. This is Bloomberg 0:00:27.840 --> 0:00:31.560 Technology coming up in videop is the Price of lofty expectations. 0:00:31.840 --> 0:00:36.400 CEO Jensen One tries to boost confidence in a Bloomberg exclusive. 0:00:36.680 --> 0:00:40.040 Past the Telegram. CEO is charged and out on bail 0:00:40.200 --> 0:00:42.839 in France. So the crimes committed on the app. We 0:00:42.840 --> 0:00:44.320 go live to Paris. 0:00:43.960 --> 0:00:45.159 And California advances. 0:00:45.200 --> 0:00:49.000 It's controversial AI safety bill that has divided tech leaders. 0:00:49.120 --> 0:00:51.519 We'll discuss the law as it heads to the state Senate. 0:00:51.880 --> 0:00:54.400 That is so much more coming up, but first which 0:00:54.440 --> 0:00:56.800 I can on the key name that we are all 0:00:56.800 --> 0:00:59.880 watching today in video of by two point eight percent, 0:01:00.200 --> 0:01:02.680 the three trillion dollar company not living up to the 0:01:02.760 --> 0:01:05.240 hype in terms of its forecasts and particularly Blackwell, which 0:01:05.280 --> 0:01:07.560 will dig into ed but it's not dragging down the 0:01:07.560 --> 0:01:08.520 rest of the indices. 0:01:10.000 --> 0:01:12.679 Mark it up in vidio down. I caught up with 0:01:12.760 --> 0:01:16.959 Nvidia CEO Jensen Wang after the results. He addressed concerns 0:01:17.200 --> 0:01:20.960 about the company's latest generation Blackwell chips. 0:01:20.840 --> 0:01:23.080 We're expecting Q three to have more supply than Q two, 0:01:23.319 --> 0:01:25.640 We're expecting Q four to have more supplier than Q three, 0:01:25.720 --> 0:01:27.440 and we're expecting Q one to have more supply than 0:01:27.480 --> 0:01:30.240 Q four, And so I think our supply, our supply 0:01:30.360 --> 0:01:32.800 condition going into next year will be in will be 0:01:33.280 --> 0:01:35.280 a large improvement over this last year. 0:01:37.920 --> 0:01:42.160 Congensabani of Bloomberg Intelligence joins us now in San Francisco. 0:01:42.840 --> 0:01:46.600 You said it in Vidio's strong expectations stronger. 0:01:46.959 --> 0:01:48.640 What's your thesis this morning. 0:01:48.680 --> 0:01:51.000 When they've fallen victim to their own strength and on 0:01:51.080 --> 0:01:54.280 realistic expectations. When we look about the top concerns going 0:01:54.280 --> 0:01:57.560 into the prink blackwell, the several billion in Q four 0:01:57.560 --> 0:01:59.920 put a lid on uncertainties in twenty twenty five. 0:02:00.200 --> 0:02:04.320 Demand sustainability, just real quick, because several billion doesn't mean anything. 0:02:04.720 --> 0:02:07.440 Well, it still is solid in terms of what we 0:02:07.520 --> 0:02:10.000 expected or given the last four weeks of what we've 0:02:10.000 --> 0:02:12.600 been hearing the issues. So that's still impressive that they 0:02:12.600 --> 0:02:15.959 are able to pull it off so soon. Second, demand sustainability, 0:02:16.000 --> 0:02:19.600 we saw demand broadening and in fact getting stronger beyond. 0:02:19.320 --> 0:02:20.480 Just the large cloud guys. 0:02:20.600 --> 0:02:23.200 And finally, when we put it all together our estimates, 0:02:23.240 --> 0:02:25.440 and I believe most of the street estimates are actually 0:02:25.440 --> 0:02:27.519 going up after this earnings than they were before. 0:02:28.400 --> 0:02:31.399 Quin John, Yes, perhaps it's a victim of its own 0:02:31.400 --> 0:02:35.440 success and analyst investors' exuberance around the name. But is 0:02:35.440 --> 0:02:39.280 it also a victim of its own ambitions setting itself 0:02:40.000 --> 0:02:44.399 terms of time that just aren't able to be hit 0:02:44.560 --> 0:02:47.240 When we see that people aren't disappointed by a Q 0:02:47.360 --> 0:02:49.800 four and later ramp up for Q one Q two 0:02:49.880 --> 0:02:50.440 of next year. 0:02:50.560 --> 0:02:54.640 Fiscally, I mean definitely, it's part of two things. The 0:02:54.800 --> 0:02:58.959 execution they have performed over the last two years have 0:02:59.040 --> 0:03:02.280 been nothing but phenomenal. It's very hard to continue with 0:03:02.400 --> 0:03:06.400 this annual cadence reiterating the new chip designs at time, 0:03:06.639 --> 0:03:08.920 bringing in the supply not just at scale but at 0:03:09.000 --> 0:03:11.680 new technology module. So it's definitely a high bar. 0:03:11.800 --> 0:03:13.959 They have said, I actually want to talk about new 0:03:14.000 --> 0:03:16.959 technology model. There was a question on the Analyst score 0:03:17.240 --> 0:03:19.560 which I also try to get into a Jensen Wang 0:03:20.000 --> 0:03:24.840 about generational upgrades. Right now, H two hundred is ramping 0:03:24.880 --> 0:03:27.000 being deployed in the real world, and before we know it, 0:03:27.080 --> 0:03:30.000 Blackwell's here. So if you're a data center operator, you 0:03:30.120 --> 0:03:32.920 have the option of both potentially at the same time. 0:03:33.160 --> 0:03:34.240 How do you model for that? 0:03:34.800 --> 0:03:37.000 I mean, each data center operator is at a different 0:03:37.040 --> 0:03:39.960 technology stack and a different phase in this journey, right, 0:03:40.000 --> 0:03:42.040 so there has been a pent up demand. So I 0:03:42.080 --> 0:03:44.760 think right now this sort of tier two and low 0:03:44.960 --> 0:03:47.600 enterprises and the new up and comers who are installing 0:03:47.600 --> 0:03:49.640 this base would choose to go for the H two 0:03:49.680 --> 0:03:52.160 hundred and Blackwell is not really for everyone. 0:03:52.320 --> 0:03:54.560 You really need a. 0:03:53.840 --> 0:03:58.160 Significant ROI, significant investment to implement Blackwell. 0:03:58.400 --> 0:04:02.520 What about geographic reach here? Were you worried in any 0:04:02.560 --> 0:04:03.800 way about the China pullback? 0:04:06.200 --> 0:04:07.280 No, I mean there was. 0:04:07.480 --> 0:04:10.640 This is the first time we saw the US decline sequentially. 0:04:11.480 --> 0:04:13.600 We don't think there's a lot to read into it, 0:04:13.640 --> 0:04:16.840 but it definitely outlines that the demand is broadening outside 0:04:16.839 --> 0:04:18.760 of the US. When we look at rest of the 0:04:18.800 --> 0:04:21.440 world other than US over the last few years, the 0:04:21.520 --> 0:04:24.560 growth there has been significantly faster, and that leads to 0:04:24.600 --> 0:04:28.320 that sort of low double digit so and billion dollars 0:04:28.360 --> 0:04:29.560 that Jensen outlined. 0:04:30.520 --> 0:04:33.599 Congen Shavani and has been a busy twenty four hours 0:04:33.600 --> 0:04:33.760 for you. 0:04:33.800 --> 0:04:35.600 We appreciate you pre meg intelligence. 0:04:35.640 --> 0:04:38.840 Meanwhile, let's get a broader market reaction Anthony Singramany is 0:04:38.880 --> 0:04:41.120 with US chief Market stretches that Ameral Price Financial. 0:04:41.279 --> 0:04:44.000 Who would have thought it with all of the handwringing. 0:04:43.640 --> 0:04:45.240 In video is so important to the S and P, 0:04:45.400 --> 0:04:49.040 to the NASDAC of eight percent. Waiting benchmarks are higher 0:04:49.120 --> 0:04:50.120 even though the name is down. 0:04:51.400 --> 0:04:53.000 Yeah, you know, at the beginning of the week we 0:04:53.279 --> 0:04:56.320 kind of said move over power. Here comes Jensen Wong, 0:04:57.200 --> 0:04:59.720 and you're really kind of seeing the markets just kind 0:04:59.720 --> 0:05:03.680 of not really react in videos earnings last night. And 0:05:03.720 --> 0:05:07.840 I think it's because earnings were positive. As Kanja mentioned, 0:05:07.960 --> 0:05:10.159 you know, the wow factor is starting to come down 0:05:10.200 --> 0:05:11.920 because the hurdle rates are getting higher. 0:05:12.040 --> 0:05:13.600 It's getting harder to achieve that. 0:05:14.080 --> 0:05:18.840 But overall, the delivery of profits and outlooks last night 0:05:18.880 --> 0:05:21.640 from in video, we're solid, and so I think the 0:05:21.680 --> 0:05:24.880 market is starting to kind of look forward and say, hey, 0:05:24.920 --> 0:05:28.320 everything's okay with big tech. We're going to move over 0:05:28.440 --> 0:05:31.320 the next couple of quarters. Macro is obviously going to 0:05:31.360 --> 0:05:34.159 be a concern coming here over the next few weeks 0:05:34.200 --> 0:05:36.480 and as we get rate cuts from the FED later 0:05:36.560 --> 0:05:39.840 next month. But I think the story in big tech 0:05:40.360 --> 0:05:44.360 is less homogeneous trading a little bit more focus on 0:05:44.800 --> 0:05:48.120 you know where's the payoff or AI what's the supply 0:05:48.240 --> 0:05:51.320 and demand build for companies like in video moving forward? 0:05:51.680 --> 0:05:54.800 And I think it will likely provide opportunities when when 0:05:54.839 --> 0:05:58.400 we get some of these pullbacks for investors to reassess 0:05:58.440 --> 0:06:01.480 and maybe look at stocks that got away from them 0:06:01.520 --> 0:06:02.400 earlier this year. 0:06:02.920 --> 0:06:04.920 Would you say that in video? I don't want to 0:06:04.920 --> 0:06:06.120 go into individual names. 0:06:05.920 --> 0:06:10.760 But would you say these sorts of valuations when today Apple, Microsoft, Amazon, Meta, Google, 0:06:10.839 --> 0:06:13.800 Tesla are all the top performers in terms of points 0:06:13.800 --> 0:06:16.159 in the S and P five hundred, should you be 0:06:16.320 --> 0:06:17.840 wrapping up more in technology? 0:06:17.880 --> 0:06:20.560 With valuations at these levels, you. 0:06:21.040 --> 0:06:23.960 At the top, as you said, like equal weights in 0:06:24.000 --> 0:06:27.600 these companies, and in technology just holding an equal weight 0:06:27.800 --> 0:06:30.560 is thirty forty percent of the S and P five hundred. 0:06:30.640 --> 0:06:32.400 So I don't think you need to get over your 0:06:32.440 --> 0:06:37.720 skis around you extending psitioning in these areas. But when 0:06:37.800 --> 0:06:42.800 we do see pullbacks in these big tech leaders, this 0:06:42.880 --> 0:06:45.119 is the time to start looking at them, at least 0:06:45.520 --> 0:06:48.760 if you've underweighted the area. Our view is that there 0:06:48.839 --> 0:06:52.080 is a broader group of stocks that are more attractive. 0:06:52.600 --> 0:06:56.600 They're particularly more attractive as earnings growth expectations are moving 0:06:56.680 --> 0:07:00.000 higher for outside for areas outside of the big tech. 0:07:00.200 --> 0:07:03.120 The economy seems to be on firm footing. The GDP 0:07:03.200 --> 0:07:06.400 grew by three percent in the second quarter, and the 0:07:06.440 --> 0:07:10.200 Fed is likely to start their you know, their moves 0:07:10.240 --> 0:07:12.360 to lower rates over the next few months and a 0:07:12.400 --> 0:07:15.760 few quarters. So the outlook for the rest of the 0:07:15.800 --> 0:07:19.000 four hundred and ninety three stocks that aren't the Magnificent 0:07:19.120 --> 0:07:22.040 seven are starting to look more attractive. And that's what 0:07:22.040 --> 0:07:25.960 we're seeing this month. Consumer staples, healthcare utilities. They're all 0:07:26.000 --> 0:07:28.800 at the top of the charts for August, and that 0:07:28.920 --> 0:07:31.800 might be because September is a pretty poor month for 0:07:31.840 --> 0:07:32.320 the market. 0:07:33.560 --> 0:07:36.360 And see that's a pretty sweet Bloomberg terminal chot over 0:07:36.360 --> 0:07:40.000 your left shoulder. What is that that's in video quarterly revenues. 0:07:40.840 --> 0:07:42.000 That's right, that's right. 0:07:42.040 --> 0:07:44.040 And as the chart if you can see it in 0:07:44.080 --> 0:07:47.679 the back, it shows the actuals and the estimates starting 0:07:47.720 --> 0:07:48.400 to get closer. 0:07:48.480 --> 0:07:50.320 And I think that's why you're seeing A. 0:07:51.840 --> 0:07:55.160 Get more trouble start moving higher, even though they had 0:07:55.160 --> 0:07:56.360 great results last night. 0:07:56.760 --> 0:07:59.040 So bear with me. I have a chot of my own. 0:07:59.160 --> 0:08:01.680 Let's bring it up. This is the beat in the 0:08:01.760 --> 0:08:05.920 quarter relative to expectations, and I think the point is 0:08:06.600 --> 0:08:08.680 that it was a It was a four percent beat 0:08:08.720 --> 0:08:11.400 against consensus, right, four percent upside surprise. 0:08:13.120 --> 0:08:14.840 Have you ever experienced a quarter like. 0:08:14.800 --> 0:08:18.440 This where everyone has just lost their absolute minds over 0:08:18.480 --> 0:08:21.320 a single name in a week where we had Central 0:08:21.360 --> 0:08:24.440 Bank speakers left, right and center and more economic data 0:08:24.440 --> 0:08:27.360 that we can fit into a one hour program. 0:08:27.960 --> 0:08:30.320 Yeah, no, I mean I think the last and you 0:08:30.320 --> 0:08:32.720 started at volatility spike in early August. 0:08:32.760 --> 0:08:35.800 Some of that was the japan Yen Carrie trade. 0:08:35.960 --> 0:08:40.200 But I do think expectations are really high in these 0:08:40.320 --> 0:08:43.840 big tech, magnificent names, and so not only do they 0:08:43.880 --> 0:08:47.360 have to surpass and kind of meet the perfection standards 0:08:47.360 --> 0:08:49.800 that investors put on it, but they actually need to 0:08:49.800 --> 0:08:53.200 surpass them by even more. That's getting harder and so 0:08:53.400 --> 0:08:55.800 as as my earlier comments said, I think you're going 0:08:55.880 --> 0:08:59.439 to see more less homogeneous trading between some of these 0:08:59.480 --> 0:09:02.240 big tech leaders, and it's really going to come down 0:09:02.240 --> 0:09:06.600 to fundamentals and capital spending and what's the revenue outlook, how. 0:09:06.559 --> 0:09:07.600 Much are you beating? 0:09:07.960 --> 0:09:11.080 Those things will play a much more dominant role in 0:09:11.120 --> 0:09:14.160 moving share prices around. But at the same at the 0:09:14.240 --> 0:09:16.920 same you know, the same brath. You have a lot 0:09:16.960 --> 0:09:19.560 of stocks that have not kept pace with these big 0:09:19.600 --> 0:09:23.960 tech companies that remain attractive in an environment where we're growing. 0:09:24.040 --> 0:09:26.760 And so if the FED is cutting interest rates and 0:09:26.800 --> 0:09:30.200 they can kind of engineer that soft landing, there's a 0:09:30.240 --> 0:09:33.600 lot of sectors of the economy that are more attractive today. 0:09:34.400 --> 0:09:38.160 So let's finish here in aggregate Nvidia and everything else. 0:09:37.960 --> 0:09:38.880 That you've outlined. 0:09:39.600 --> 0:09:44.120 Do you believe that this cycle, the investment cycle around 0:09:44.160 --> 0:09:46.720 AI is intact and it continues. 0:09:47.920 --> 0:09:50.920 Yeah, I think you know, and from your interview with 0:09:51.000 --> 0:09:54.760 Jensen Wong, I think it's very clear the AI infrastructure 0:09:54.800 --> 0:09:57.320 build and the architecture around that is in the very 0:09:57.360 --> 0:10:02.800 early innings. Some of these companies like Microsoft, Amazon, Meta Alphabet, 0:10:03.080 --> 0:10:05.959 they spent almost sixty billion dollars in the prior quarter 0:10:06.120 --> 0:10:09.280 on AI investment. They said they were going to continue 0:10:09.280 --> 0:10:12.560 that over the next several quarters. And so as these 0:10:12.679 --> 0:10:17.120 companies and as sovereign AI that Nvidia mentioned last night, 0:10:17.160 --> 0:10:21.000 as these countries start to build that infrastructure, there is 0:10:21.080 --> 0:10:24.679 a lot of opportunities still left in AI. However, like 0:10:24.840 --> 0:10:27.760 the like the tech boom in their early late nineties 0:10:27.760 --> 0:10:31.360 early two thousand we go through periods where expectations get 0:10:31.400 --> 0:10:34.560 really high, they need to reset, and then maybe stocks 0:10:34.600 --> 0:10:36.720 can move higher from there. And I think we're starting 0:10:36.760 --> 0:10:39.800 to see that now with big tech and the AI theme. 0:10:40.920 --> 0:10:44.599 Ansney sagem Bene, chief market strategist in Americaprise Financially you 0:10:44.640 --> 0:10:48.560 believe thank you now, coming out of a conversation with 0:10:48.679 --> 0:10:52.760 Max Levchin, CEO of a firm following yesterday's pretty strong 0:10:52.760 --> 0:10:54.839 earnings report, car you're looking at another name. 0:10:55.280 --> 0:10:58.880 I AM firms up, CrowdStrike up as well, more than 0:10:58.920 --> 0:11:02.199 five percent. This isn't reporting second quarter sales that basically 0:11:02.240 --> 0:11:04.400 top tenas estimates. Remember we were all worrying about the 0:11:04.440 --> 0:11:07.800 global IT outage back in July, but it doesn't seem 0:11:07.880 --> 0:11:11.960 to have had an immediate, as bad a result impact. 0:11:12.400 --> 0:11:13.120 We're currently higher. 0:11:13.200 --> 0:11:28.320 Sublombo Technology, a firm delivering better than expected earning, sending 0:11:28.360 --> 0:11:31.920 shares upwards. The company's fourth quarter revenue and first quarter 0:11:32.280 --> 0:11:36.560 revenue forecast both coming in ahead of estimate, CEO Max 0:11:36.640 --> 0:11:41.160 Levchin saying the company had quote a killer quarter. 0:11:42.120 --> 0:11:43.720 Max joins us now here in San Francisco. 0:11:43.800 --> 0:11:46.680 I spent enough time with you to know that when 0:11:46.720 --> 0:11:50.280 you say something like that, you mean it. I wouldn't 0:11:50.280 --> 0:11:53.800 say that you're prone to superlatives like that. Why why 0:11:53.840 --> 0:11:54.600 a killer quarter? 0:11:56.200 --> 0:11:57.360 Numbers speak for themselves. 0:11:58.320 --> 0:11:59.319 I'll go beyond that. 0:11:59.360 --> 0:12:01.640 Come on, tell me the story of what's happening behind 0:12:01.640 --> 0:12:03.280 your platform and your user base. 0:12:04.320 --> 0:12:05.800 I think there's a real momentum. 0:12:05.920 --> 0:12:09.840 You can tell by looking at our metrics and the 0:12:10.040 --> 0:12:13.040 qualitative measures that we take, and just the fact that 0:12:13.200 --> 0:12:16.160 we've outperformed the credit card industry, which is our direct 0:12:16.160 --> 0:12:19.360 competitor in terms of managing credit, and just the sheer 0:12:19.440 --> 0:12:22.320 number of launchers and merchant signings. Every metric that I 0:12:22.320 --> 0:12:25.040 could cast my eye on, say, wow, that is a 0:12:25.080 --> 0:12:25.840 really good quarter. 0:12:26.040 --> 0:12:27.600 So you know, sometimes we got to take a bath. 0:12:29.320 --> 0:12:32.440 Let's say the buy now pay Lata space is let's 0:12:32.440 --> 0:12:35.400 say more competitive since last year on the program. Maybe 0:12:35.400 --> 0:12:37.640 in that time. Caroline and I spoke with the Klan, 0:12:37.679 --> 0:12:41.560 the CEO, for example. They seem very optimistic, particularly about 0:12:41.600 --> 0:12:45.880 the United States. Yet you continue to grow. I don't 0:12:45.920 --> 0:12:48.560 have the data for market share, but could you just 0:12:48.640 --> 0:12:51.280 contextualize your performance in that sense? 0:12:51.840 --> 0:12:54.640 Well, I think we are outpacing them reasonably well in 0:12:54.720 --> 0:12:56.600 terms of our growth relative to there is at least 0:12:56.600 --> 0:13:00.600 according to the stated numbers, not that I am competitive, 0:13:01.040 --> 0:13:06.079 but I'm very competitive, let's be honest. But the reality 0:13:06.120 --> 0:13:08.160 is it's a giant market and all of us together 0:13:08.200 --> 0:13:10.080 at up to less than ten percent of e commerce, 0:13:10.280 --> 0:13:12.520 and all of us are now looking at offline and 0:13:12.600 --> 0:13:17.000 so just the real share taking that's taking place is 0:13:17.000 --> 0:13:20.600 happening against cash, against credit cards, against debit cards, all 0:13:20.640 --> 0:13:23.280 the other payment types, and so there's just an incredible 0:13:23.320 --> 0:13:25.520 amount of road available to all of us. 0:13:25.520 --> 0:13:27.480 And a firm in particular, what. 0:13:27.440 --> 0:13:31.200 Does that mean in terms of the macro context? Then, Max, 0:13:31.400 --> 0:13:34.640 how confident are you of the US consumer the global 0:13:34.679 --> 0:13:35.600 consumer right now? 0:13:37.120 --> 0:13:39.240 Well, we're about to launch in the UK, so we'll 0:13:39.240 --> 0:13:41.920 find out exactly how confident I should be about the 0:13:41.960 --> 0:13:45.360 UK consumer. But the US consumer again, look at our 0:13:45.559 --> 0:13:49.920 investor supplement. Credit card companies have built and built and 0:13:49.960 --> 0:13:53.440 built up their delinquencies, and ours remained very firmly in control. 0:13:53.880 --> 0:13:57.520 Our consumer is borrowing and shopping and paying back, which 0:13:57.600 --> 0:13:59.120 is really important for our credit business. 0:13:59.640 --> 0:14:02.880 But so far, so good. We do not see a 0:14:02.920 --> 0:14:03.720 major slowdown. 0:14:03.760 --> 0:14:06.760 We do not see a significant pullback and demand there's 0:14:06.760 --> 0:14:09.839 always new industries. A quarter or two ago, I was 0:14:09.960 --> 0:14:12.680 lamenting the loss of interest and electronics. It came back 0:14:12.800 --> 0:14:16.840 roaring through the last quarter, travels a little bit softer. 0:14:16.960 --> 0:14:19.400 I think people got their COVID post COVID fix. 0:14:19.800 --> 0:14:25.880 But all in all, consumer is effectively shopping and buying 0:14:25.920 --> 0:14:28.280 and paying back and I don't see problems. 0:14:28.720 --> 0:14:31.240 Meanwhile, you're taking a bow and the market in particular 0:14:31.840 --> 0:14:35.840 likes the focus on profitability. Now I hate to bring 0:14:35.840 --> 0:14:38.520 them up again, but Karner actually did post a profit, 0:14:38.800 --> 0:14:40.600 even though they're still a private company that eying a 0:14:40.600 --> 0:14:44.280 twenty billion dollar valuation and they're cunning costs by leaning 0:14:44.360 --> 0:14:46.280 into AI. Is that something that you look at, Max, 0:14:46.360 --> 0:14:47.920 something that you feel you have to compete into. 0:14:50.040 --> 0:14:53.000 Well, good news is that we've been in the AI 0:14:54.000 --> 0:14:58.160 business since inception. So one percent of our loans are 0:14:58.280 --> 0:15:02.160 underwritten individually. Every single time I'm entirely buying machines, and 0:15:02.200 --> 0:15:04.920 so we've been on the machine learning and AI training 0:15:05.040 --> 0:15:05.880 since base Eero. 0:15:06.040 --> 0:15:07.200 And we don't think of. 0:15:07.200 --> 0:15:09.920 It as a way to replace humans or to get 0:15:10.000 --> 0:15:11.840 rid of humans. We think of it as a great 0:15:11.880 --> 0:15:16.000 tool for increasing productivity, to give us an edge in 0:15:16.160 --> 0:15:19.160 underwriting customer service, et cetera. 0:15:19.280 --> 0:15:21.120 And so yes, we're very, very active in AI. 0:15:21.160 --> 0:15:23.760 We have lots of really fun things happening, both visible 0:15:23.840 --> 0:15:27.280 and not to the investor eye. But it's a huge 0:15:27.280 --> 0:15:30.720 part of what we do in terms of profitability. You know, 0:15:31.200 --> 0:15:32.600 I said it last night on the Earning Skull, and 0:15:32.600 --> 0:15:34.640 I just want to make sure I repeated this was 0:15:34.720 --> 0:15:38.120 not a contortionist thing we just did when we said, hey, 0:15:38.480 --> 0:15:40.360 profitability is on the horizon. 0:15:40.720 --> 0:15:42.560 It is very much part of the plan. It's always 0:15:42.560 --> 0:15:43.280 been part of the plan. 0:15:43.760 --> 0:15:46.040 It's just now close enough where I can say, here's 0:15:46.040 --> 0:15:48.120 a date with history. We're going to get Gap profitable 0:15:48.160 --> 0:15:49.640 and move right past it and do more. 0:15:50.640 --> 0:15:53.400 Max and Carol also bear with me that I am 0:15:53.560 --> 0:15:55.840 a firm customer in the sense that you know, I 0:15:55.960 --> 0:15:58.960 used the firm to finance a specific thing for what 0:15:59.000 --> 0:16:01.440 it's worth. It was the Peloton tread. But the reason 0:16:01.480 --> 0:16:03.640 I did it is actually emphsis some point of sale. 0:16:03.880 --> 0:16:05.840 So when you go through the audience issubmitted, if you 0:16:05.840 --> 0:16:08.640 go and try buy something from Peloton, it's kind of 0:16:08.680 --> 0:16:10.880 a weird transaction, but you're presented with the firm as 0:16:10.920 --> 0:16:15.240 an option almost straight away. Do you negotiate that aggressively 0:16:15.840 --> 0:16:20.640 for those kind of bigger ticket items, I'm. 0:16:20.520 --> 0:16:24.840 Not sure individual deals are worth commenting on. But every 0:16:24.960 --> 0:16:27.000 deal where we are presented at the point of sale, 0:16:27.520 --> 0:16:30.320 and every deal where you see it up funnel as 0:16:30.440 --> 0:16:32.760 what might call it before you even get into the checkouts, 0:16:33.320 --> 0:16:36.840 are absolutely directly integrated. So we go to the merchant, 0:16:37.000 --> 0:16:38.920 we spend a lot of time with them making sure 0:16:38.960 --> 0:16:42.359 that we are as helpful as possible to their ability 0:16:42.520 --> 0:16:46.280 to sell, be it a Pelton tread or a mattress or. 0:16:46.200 --> 0:16:48.960 Anything in between. And that is what gives us a 0:16:49.040 --> 0:16:49.640 huge advantage. 0:16:49.680 --> 0:16:52.480 The consumer has the confidence and the clarity of what 0:16:52.520 --> 0:16:54.480 it might cost them to borrow money to buy something. 0:16:54.760 --> 0:16:55.000 Max. 0:16:55.360 --> 0:16:57.080 While you're here, could I please ask you, as a 0:16:57.120 --> 0:17:00.240 story out from Blomberg Law about a firm face sing 0:17:00.240 --> 0:17:04.840 a class action suit after the Evolved bank breach situation, 0:17:06.480 --> 0:17:07.439 comment on that please. 0:17:07.920 --> 0:17:11.480 Probably a very bad idea to comment and ongoing or 0:17:11.560 --> 0:17:13.880 potential future litigation, so I'm not sure I have anything 0:17:13.920 --> 0:17:16.480 to say on that. You know, I said it the 0:17:16.600 --> 0:17:20.960 day of Evolved news, which is certainly unfortunate that the 0:17:20.960 --> 0:17:23.320 firm card numbers were all safe. We did not need 0:17:23.359 --> 0:17:26.560 to rotate them and give people new cards. That is 0:17:26.600 --> 0:17:29.520 now confirmed no card numbers have been leaked and our 0:17:29.560 --> 0:17:31.639 consumers are safe. If you have your firm card, please 0:17:31.640 --> 0:17:32.520 continue using it. 0:17:32.520 --> 0:17:33.240 It works just fine. 0:17:33.359 --> 0:17:33.679 Thank you. 0:17:34.320 --> 0:17:36.119 Thanks Love Chin, It's always great to have you on 0:17:36.160 --> 0:17:38.879 the show. We appreciate it. It's taking about the CEO 0:17:39.000 --> 0:17:39.800 of a firm today. 0:17:48.320 --> 0:17:52.640 Telegram ceo Pavel durov was charged in France for complicity 0:17:53.040 --> 0:17:56.360 in the spread of sexual images of children and other crimes. 0:17:56.400 --> 0:17:58.040 It's a rare example of. 0:17:57.960 --> 0:18:00.879 A tech leader being held liable for the way their 0:18:01.040 --> 0:18:03.359 platform is used. I want to get right to the 0:18:03.400 --> 0:18:06.679 details with Bloomberg's Allan Katz or Paris bureau chief, and 0:18:06.720 --> 0:18:09.760 I think fill in the details. My understanding is Duroff 0:18:09.880 --> 0:18:12.280 is out on a significant bail and there is a 0:18:12.320 --> 0:18:13.280 process to come. 0:18:16.080 --> 0:18:19.440 So he is out of the sort of a holding 0:18:19.440 --> 0:18:21.600 cells the way they do it in France. From that 0:18:21.640 --> 0:18:24.800 four day interrogation that he had before being presented to 0:18:24.840 --> 0:18:27.760 the judge, he had to post a five million euro 0:18:28.000 --> 0:18:30.480 bond for that, so that's about five and a half 0:18:30.520 --> 0:18:32.960 million dollars, so it's a lot of money. That said, 0:18:33.640 --> 0:18:37.760 he's according to Bloomberg's you know, wealth ranking, he's quite 0:18:37.760 --> 0:18:39.680 a wealthy fellow, and so he could certainly afford it. 0:18:40.560 --> 0:18:43.800 And from here on out, at least according to the 0:18:43.800 --> 0:18:46.600 initial ruling from what's called a jugually liberte, he has 0:18:46.640 --> 0:18:49.800 to check in twice a week with authorities to make 0:18:49.840 --> 0:18:51.480 sure that he's still in France and he's not allowed 0:18:51.480 --> 0:18:52.440 to leave the country. 0:18:53.000 --> 0:18:53.720 So that's sort of. 0:18:53.640 --> 0:18:56.160 The process in the immediate future. And now it goes 0:18:56.200 --> 0:18:58.879 to an investigation where the investigating magistrate will continue to 0:18:58.880 --> 0:19:02.440 look into the case, and that could take months, could 0:19:02.480 --> 0:19:06.320 take a year longer, Like, it's really unclear how long 0:19:06.600 --> 0:19:08.399 the rest of this process might take beyond that. 0:19:09.000 --> 0:19:13.159 And really the case here is that dura off Telegram, 0:19:13.200 --> 0:19:17.600 which is CEO of basically in no way helps when 0:19:17.640 --> 0:19:20.600 it comes to investigations. They refuse, it said, to run 0:19:20.680 --> 0:19:24.240 legal wire taps on suspects, particularly when it comes to 0:19:24.680 --> 0:19:29.440 organized criminals and particularly sexual exploitation of children. Is that 0:19:29.480 --> 0:19:31.719 really wants at heart here, the fact that he doesn't 0:19:31.760 --> 0:19:33.920 want to take any movement, any action as a leader 0:19:33.960 --> 0:19:36.960 of a social media platform. 0:19:37.359 --> 0:19:41.800 Well, yes, The action though that you're talking about is 0:19:41.880 --> 0:19:46.600 he doesn't he deliberately, according to French officials, he deliberately 0:19:46.640 --> 0:19:50.160 did not respond to or applied to what they call 0:19:50.320 --> 0:19:54.960 legitimate requests for informational for help in other investigations that 0:19:55.040 --> 0:19:57.560 were running in criminal activities that they saw on the 0:19:57.640 --> 0:20:01.320 Telegram network. And that's different than the way that most 0:20:01.440 --> 0:20:06.320 other messaging services operate, and that's really why they issued 0:20:06.320 --> 0:20:07.879 the arrest warrant for him in the first place. And 0:20:07.920 --> 0:20:10.760 the prosecutor made a point of that in the statement 0:20:10.840 --> 0:20:14.159 last night, saying that was really what was particular about 0:20:14.240 --> 0:20:18.199 Telegram as a platform, and not just in France, but 0:20:18.560 --> 0:20:21.360 she specifically mentioned Belgium as well as having the same 0:20:21.440 --> 0:20:23.960 issues with Telegram. 0:20:23.280 --> 0:20:27.080 A near complete lack of response, as pass prosecutor put it, 0:20:27.119 --> 0:20:36.800 we appreciate it. Alan Katz, thank you, Welcome back to 0:20:36.800 --> 0:20:39.400 Blue meg Technology. And Caroline Hide in New York and. 0:20:39.359 --> 0:20:41.560