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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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Speaker 1: from coast to coast with Caroline Hide in New York

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Speaker 1: and Eva low in Sent Francisco.

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Speaker 2: This is Bloomberg Tech coming up.

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Speaker 3: The White House says Apple will commit to spend another

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Speaker 3: one hundred billion dollars on domestic manufacturing.

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Speaker 4: Plus, we speak with AMD CEO Lisa Sue on the

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Speaker 4: back of the company's earnings.

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Speaker 3: And Bloomberg reports Open aiyes in talks for a potential

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Speaker 3: insider share sale that would value the company at five

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Speaker 3: hundred billion dollars extraordinary valuations.

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Speaker 4: I turn my attention to the companies that are already

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Speaker 4: public and already reporting earnings ed and actually I'm on

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Speaker 4: the downside. They're all in the red at the moment.

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Speaker 4: Quickly wit through what AMD is up to down the worst.

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Speaker 4: It's October twenty twenty four. This is the China concerns,

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Speaker 4: the idea of when we're going to seem I three

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Speaker 4: or eight actually getting into the hands of Chinese customers,

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Speaker 4: non enough charity. We dig into that with Lisasu a little.

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Speaker 2: Bit in the show.

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Speaker 4: Because remember the earnings did beat on expectations thirty two

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Speaker 4: percent growth and revenue. I'm looking at Disney also beating,

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Speaker 4: but again there is a concern perhaps around age old

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Speaker 4: entertainment movies about TV that didn't manage to live up

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Speaker 4: to expectations, held back some of those profitability growth targets.

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Speaker 4: We're looking at Disney off by three percent, uber also

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Speaker 4: by two point four percent.

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Speaker 2: It too be It too actually.

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Speaker 4: Said they're going to be doing twenty billion dollar buy back,

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Speaker 4: but they're going to have to invest in autonomous and

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Speaker 4: maybe that's the insecurity here, Ed, But what do you got?

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Speaker 2: Okay, let's get to that Apple news.

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Speaker 3: The stocks actually just come off session highs, but it's

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Speaker 3: on track for its biggest jump since early May. One

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Speaker 3: hundred billion dollars in additional investment in US manufacturing and

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Speaker 3: supply chain. But here's the thing, that's all coming from

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Speaker 3: the White House. So let's get out to Washington, DC

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Speaker 3: and bloombergs Tyler Kendall, who joins us from the White

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Speaker 3: House as we wait for I guess the Apple side

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Speaker 3: of what's happen happening?

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Speaker 2: But Tyler, what do we need to know?

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Speaker 5: Yeah?

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Speaker 6: Hey, Ed, Well, the White House says that this one

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Speaker 6: hundred billion dollar investment pledge is expected to go towards

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Speaker 6: a new manufacturing program that would in theory bring more

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Speaker 6: of Apple supply chains to the US, and the official

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Speaker 6: says that this brings the cumulative investment from Apple to

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Speaker 6: six hundred billion dollars. Because, as you well know and mentioned,

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Speaker 6: this bill A builds on a previous five hundred billion

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Speaker 6: dollar pledge from the company over four years. But with

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Speaker 6: that pledge we saw some really specific investment angles, including

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Speaker 6: that some of it would go towards building a factory

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Speaker 6: in Texas that holds AI servers. Part of it would

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Speaker 6: go towards twenty thousand jobs in the US really focused

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Speaker 6: on training as well as research and development. Now, our

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Speaker 6: reporting indicates that while this investment is substantial, it likely

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Speaker 6: falls short for the full production shift that this White

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Speaker 6: House really wants to see, though it is worth pointing

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Speaker 6: out twenty four percent of Apple suppliers are based in

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Speaker 6: the US already, the most of any country. Still, well,

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Speaker 6: we'll have to see if it's enough for President Trump

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Speaker 6: to perhaps give some sort of a reprieve when it

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Speaker 6: does come to the company. We know that the CEO team,

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Speaker 6: Tim Cook, has been lobbying for some sort of carve

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Speaker 6: out here, considering that earlier this year, President Trump had

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Speaker 6: threatened a twenty five percent tariff ed if Apple did

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Speaker 6: not move production to the United States.

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Speaker 4: Amid all of this, of course, is that threat on

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Speaker 4: Apple exclusively, but also there's threats on high tariff for India,

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Speaker 4: where they've been shifting some of their supply chain to Tyler.

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Speaker 4: As we know, it is incredibly difficult, if not nigh

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Speaker 4: on impossible for them to really bring production of the

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Speaker 4: iPhone to the United States. Do you think that that's

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Speaker 4: starting to curry favor or at least appreciation in the administration.

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Speaker 6: Right Well, today we saw really an escalation when it

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Speaker 6: did come to India rate. President Trump now posing an

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Speaker 6: additional twenty five percent tariff over India's imports of Russian

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Speaker 6: energy supply, which would bring the tear freight on that

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Speaker 6: country up to fifty percent. They're expected to be stacked

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Speaker 6: on top of each other. That additional rate to go

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Speaker 6: into effect in the next twenty one day, So we'll

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Speaker 6: have to see if there's some sort of negotiation that

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Speaker 6: happens here. It is clear though that the administration is

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Speaker 6: going to like this investment. The White House is already

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Speaker 6: out touting it because they really want to start to

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Speaker 6: see these funds coming in. And if you look at

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Speaker 6: all the unique deals perhaps that we've gotten from our

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Speaker 6: training partners so far, a lot of them do ultimately

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Speaker 6: have to do with investment funds. And the second thing

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Speaker 6: that I'll also put on your radar is that we

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Speaker 6: are expecting those sector specific tariffs to come down soon.

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Speaker 6: This administration has said we can see them as soon

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Speaker 6: as next week when it comes to chips. But really

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Speaker 6: important to keep in mind that the Section two thirty

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Speaker 6: two investigations, yes, are into semiconductors, but they're into the

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Speaker 6: entire supply chain, which means that we could really see

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Speaker 6: some wide ranging impacts.

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Speaker 2: That's far.

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Speaker 4: One hundred billion dollar extra commitment adds one hundred and

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Speaker 4: twenty billion dollars in terms of market cap to Apple

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Speaker 4: on the day, Tyler Kendall, thank you. Let's check in

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Speaker 4: on other companies now. Earnings Disney lower after the media

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Speaker 4: company reported third quarter revenue actually coming in slightly below

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Speaker 4: expectations but highlighting strength and streaming and the sparks business bugs.

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Speaker 4: Felix Jullett joins us for more look, they were ever

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Speaker 4: so slightly amiss in terms of general revenue growth of

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Speaker 4: just two percent, But it really seems to be the

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Speaker 4: old school part of the business they let them down.

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Speaker 7: Yeah, the traditional part of the business in terms of

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Speaker 7: you know, the movie studio, the cable and broadcast channels

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Speaker 7: are all you know, continuing to show decline and that

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Speaker 7: you know has been offside someone by the growth in

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Speaker 7: streaming and parks, which have been very strong.

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Speaker 2: Felix.

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Speaker 8: Uh.

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Speaker 3: Streaming is many parts. But listening to Bob Iiger on

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Speaker 3: the Cool Sports, I just want to recap his position

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Speaker 3: on ESPN because I think it's worth discussion.

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Speaker 2: Listen to this.

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Speaker 5: We're building ESPN into the pre eminent digital sports platform

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Speaker 5: with our highly anticipated Director consumer sports offering launching on

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Speaker 5: August twenty first, and there are just announced plans with

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Speaker 5: the NFL that will expand ESPN's programming and content offerings

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Speaker 5: for fans.

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Speaker 2: August twenty first, not far away.

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Speaker 3: Like how big a piece of the strategy is sports

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Speaker 3: and streaming and combination?

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Speaker 7: Oh, a huge part of the strategy. I mean, they

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Speaker 7: want to grow their advertising revenue and streaming. To do that,

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Speaker 7: you need live events. There's nothing bigger in live events

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Speaker 7: than the NFL. This deal with the NFL that they

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Speaker 7: announced today, NFL gets a stake in ESPN and ESPN

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Speaker 7: gets control of some of the NFL's media properties, including

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Speaker 7: the Red Zone NFL Network, and also crucially, we'll get

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Speaker 7: more NFL games as part of this package. That's huge.

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Speaker 7: It's going to help them in terms of growing their

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Speaker 7: advertising business. And at the same time they announced the

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Speaker 7: deal today with TKOSWWE, the Wrestling Network, they're going to

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Speaker 7: get a bunch of big live events, including in WrestleMania. Again,

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Speaker 7: that too is going to bolster this new ESPN product

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Speaker 7: and get more people watching it at particular times, which

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Speaker 7: will help them with advertisers.

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Speaker 4: Is there going to be any regulatory concern around this

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Speaker 4: about just the big getting to a bigger in the

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Speaker 4: world of sports.

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Speaker 7: I mean, yeah, I think that this is going to

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Speaker 7: have to get regulatory approval. As we've seen with Paramount,

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Speaker 7: that can cause a lot of problems in this current

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Speaker 7: environment with the Trump administration, So that is a concern,

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Speaker 7: But I think you know, what they're trying to do

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Speaker 7: is again just build up. You know, they've been talking

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Speaker 7: about this direct to consumer ESPN product for years now.

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Speaker 7: This is a huge launch. It's been a long time

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Speaker 7: in the making and to come out with news that

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Speaker 7: you're going to have more NFL games, more WWE. I

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Speaker 7: think that's what they're trying to drive the excitement around

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Speaker 7: at the moment.

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Speaker 3: Felix, you learn when you cover technology earnings in particular,

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Speaker 3: sometimes it's what they don't say that drives stories. And

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Speaker 3: I'm sorry to even ask this, but what's the latest

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Speaker 3: on Bob Eiger?

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Speaker 2: Like is he going to be there.

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Speaker 3: Forever and ever infinity or do they have some plans

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Speaker 3: in place for what happens next?

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Speaker 7: Yeah, I mean, the succession issue with Disney never quite

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Speaker 7: goes away. You know, it's been the focus of investors

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Speaker 7: long time. They bodged it the last time Bob came back.

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Speaker 7: They have to get it right this time. You know,

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Speaker 7: there's been endless speculation about who that's going to be.

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Speaker 7: Looks like the internal candidates are really getting narrowed down.

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Speaker 7: But you know, again, TBD, that's all the next chapter

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Speaker 7: of Disney and they have to really stick the landing

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Speaker 7: this time.

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Speaker 3: Welcome to our global audience across Bloomberg television and radio.

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Speaker 3: We're joined by AMD CEO Lisa Sue. And it was

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Speaker 3: such an interesting quarter to look back at Data Center

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Speaker 3: in particular CPU strength, not just accelerators, strong AI outlook

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Speaker 3: on accelerators, gaming PC, and then some concern about the

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Speaker 3: future of the China business. But Caroline and I Lisa

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Speaker 3: have talks for quite a while now about AMD as

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Speaker 3: the best performing chip stock so far this year. I

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Speaker 3: wondered if we start by just asking what in the

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Speaker 3: quarter changed for a MD what the kind of biggest

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Speaker 3: move forward was, do you think.

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Speaker 8: Yeah, absolutely so. First of all, Ed and Caroline, great

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Speaker 8: to be here with you. We always, you know, look

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Speaker 8: at these things and say, when we have a business

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Speaker 8: where all of our businesses are actually performing extremely well,

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Speaker 8: it's a good it's a good place to be.

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Speaker 9: So we had a very.

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Speaker 8: Strong first half of the year, you know, second quarter

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Speaker 8: up thirty two.

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Speaker 9: Percent year over year.

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Speaker 8: We're guiding to a third quarter you know, up twenty

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Speaker 8: eight percent.

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Speaker 9: And underneath that what you see is.

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Speaker 8: You know, first of all, data center business is doing

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Speaker 8: extremely well. Our server CPUs are continuing to gain share

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Speaker 8: in cloud and in enterprise. One of the things that

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Speaker 8: we're seeing with AI is the AI investments from the

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Speaker 8: largest hyperscalers are actually pulling you know, both GPU and

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Speaker 8: CPU revenue, you.

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Speaker 9: Know, which is good for us overall.

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Speaker 8: You know, augentic AI actually requires lots and lots of

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Speaker 8: compute going forward. We're also seeing strength in you know,

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Speaker 8: PCs as well as gaming. Our products are extremely well positioned,

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Speaker 8: whether you're talking about you know, consumer or commercial. And

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Speaker 8: then we're also seeing you know, some improvement in the

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Speaker 8: embedded side of our business as you know, that is

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Speaker 8: also you know, going to I would say, return to

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Speaker 8: growth in the second half of the year. So we've

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Speaker 8: seen a lot of positive signals over the last ninety

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Speaker 8: days in terms of, you know, what the market needs

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Speaker 8: from computing and sort of the investment and things. You know,

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Speaker 8: there are some questions about China, of course, which you

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Speaker 8: know we can certainly talk about.

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Speaker 3: Well, let's talk first about the AI accelerator outlook, because

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Speaker 3: actually from analysts to investors, to develop a community, when

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Speaker 3: we say that you're coming on the show, we get

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Speaker 3: questions from all quarters. You had said that the AI

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Speaker 3: accelerator business will grow to the tens of billions, and

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Speaker 3: what I'm kind of seeing is people just want granularity

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Speaker 3: from Lysia a little bit like when does that happen

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Speaker 3: and when does it happen? And you talked about the hyperscalers.

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Speaker 3: But what's the growth pathway to tens of billions in

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Speaker 3: accelerator revenue?

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Speaker 8: Yeah, absolutely, ed, So let me give you a few

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Speaker 8: important markers. So what we said is the second half

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Speaker 8: of the year, our growth would be primarily driven in

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Speaker 8: the data center by accelerators. We launched a new product

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Speaker 8: just in June I three fifty five product. It's extremely competitive.

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Speaker 8: We really like how we stack up in terms of

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Speaker 8: total cost of ownership for inferencing and training workloads. Customers

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Speaker 8: really like that product. That's driving some of our second

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Speaker 8: half growth, and certainly when we talk about our sequential

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Speaker 8: growth into Q three, that's being primarily driven by that

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Speaker 8: accelerator capability.

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Speaker 9: And now when you.

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Speaker 8: Extend forward, you know I've said that the AI TAM

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Speaker 8: for accelerators and data center will be over five hundred

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Speaker 8: billion over the next couple of years. You know, we

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Speaker 8: expect to get a large portion of that new accelerator

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Speaker 8: TAM and that's how we get to tens.

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Speaker 9: Of billions of dollars.

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Speaker 8: Very key is also, you know, we've accelerated our roadmap

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Speaker 8: and so we are on an annual cadence and next

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Speaker 8: year we'll have yet a new capability with our four

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Speaker 8: hundred series, which will bring full rack level solutions, which

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Speaker 8: will be another giant step forward in terms of capability

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Speaker 8: for you know, AI solutions. So I think that's the

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Speaker 8: roadmap and path for the next couple of years. We're

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Speaker 8: really excited about the traction. We're getting lots of customer

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Speaker 8: validation saying hey, you're on absolutely the right path, and

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Speaker 8: you know we're making strong progress towards those goals.

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Speaker 4: Lisa, the granularity there was demanded time and time again

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Speaker 4: on that earning score with analysts was around China though,

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Speaker 4: and I know it's so hard to give because in

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Speaker 4: many ways, as m I threeh eight, it's depending on

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Speaker 4: the licenses from the US government.

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Speaker 9: How are those discussions going with.

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Speaker 4: The US government. How quickly do you think they can

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Speaker 4: get through the backlog?

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Speaker 9: Yeah, Caroline, definitely.

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Speaker 8: Look, you know, I know people always want precision, and

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Speaker 8: what I will give you is exactly how things are

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Speaker 8: playing out from our standpoint. I think we've seen an

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Speaker 8: improvement over the last ninety days. You know, ninety days ago,

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Speaker 8: you know, we did not expect to believe to shift

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Speaker 8: to be able to ship to China because of some

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Speaker 8: of the regulations I think this administration, the Department of Commerce,

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Speaker 8: the government has actually been very open to trying to

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Speaker 8: find the right balance between national security and ensuring that

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Speaker 8: we have AI USAI technologies proliferated across the world. So

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Speaker 8: we think that's a great balance. We now know that

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Speaker 8: we have a number of licenses that are under review.

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Speaker 8: We've been given good indications that those are moving through

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Speaker 8: the review process, and we will certainly inform everyone when

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Speaker 8: the licenses are granted. But given that it's hard to

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Speaker 8: predict exact timing, just given all of the things that

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Speaker 8: are in front of the government at the moment, we

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Speaker 8: thought the right thing to do right now is just say, hey,

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Speaker 8: let's not include that in the third quarter revenue. But

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Speaker 8: even with that, we're growing twenty eight percent year over year,

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Speaker 8: which is fantastic growth rate. And if you asked me,

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Speaker 8: you know what we've learned in the last ninety days,

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Speaker 8: We've learned that the demand is even stronger in the

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Speaker 8: second half of the year. And we necessarily, you know,

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Speaker 8: thought maybe just a few months ago.

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Speaker 4: And analysts really cooperated and thought it was right that

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Speaker 4: we should see such caution perhaps and not show up

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Speaker 4: in the numbers. But Lisa, I'm interested in the inventory

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Speaker 4: that you had been very clear about the eight hundred

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Speaker 4: million dollar knock on the fact that you couldn't access

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Speaker 4: China for a while. I know that most of those

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Speaker 4: manufacturing hadn't been complete, but do you think you can

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Speaker 4: unwind that eight hundred million how much you think can

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Speaker 4: you bring that back to bear?

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Speaker 8: Well, we certainly expect that once licenses are approved, that

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Speaker 8: we will restart our supply chain and get those in place.

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Speaker 8: We do have, you know, a bit of time that

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Speaker 8: it takes to complete those, but we would expect to

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Speaker 8: be able, you know, to ship some of those products

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Speaker 8: as licenses are approved. And you know, again the exact

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Speaker 8: timing will depend on when licenses are approved. But I

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Speaker 8: again would hope that we don't get caught up in

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Speaker 8: something that I would say is moving actually in the

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Speaker 8: right direction and really see like the overall business is

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Speaker 8: doing extremely well. Right when I look at data center growth,

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Speaker 8: when I look at client and gaming growth, and really

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Speaker 8: the return to growth in the embedded those are the

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Speaker 8: key aspects to really understand about where the business is today.

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Speaker 2: Lisa.

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Speaker 3: The final question that we have on China, if I may,

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Speaker 3: is something that we've also discussed quite often with Video

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Speaker 3: and Jensen. One which is the idea that in the

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Speaker 3: interim period you just outlined, China's domestic chip makers have

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Speaker 3: made some progress on their own accelerators. Does a m

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Speaker 3: D make an assessment of that of how performance a

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Speaker 3: comparable Huawei or other Chinese accelerator is relative to them?

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Speaker 2: I three hundred family.

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Speaker 8: And of course, I mean, look, it's a very competitive

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Speaker 8: market out there. At the end of the day, everybody

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Speaker 8: wants AI computing, Like AI computing is the foundation for

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Speaker 8: you know, all the great things that we know that

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Speaker 8: AI can add to, you know, businesses and you know,

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Speaker 8: sort of.

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Speaker 9: The overall capability.

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Speaker 8: So yes, we're always looking at the competitive environment. That

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Speaker 8: being the case, you know, I think we are well positioned.

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Speaker 9: Overall.

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Speaker 8: Our roadmap for the rest of the world is very strong,

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Speaker 8: and we think is just getting stronger as we go forward,

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Speaker 8: and as it relates to China, it's something that we

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Speaker 8: have to work through with the administration, but as I said,

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Speaker 8: we've had very close conversations and we're making good progress there.

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Speaker 8: So from that standpoint, you know, I think the overall

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Speaker 8: competitiveness of our AI roadmap has never been stronger. And

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Speaker 8: we're excited about what we can deliver across you know,

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Speaker 8: AI GPUs as well as you know, our our CPU

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Speaker 8: franchise and all of the rest of our portfolio.

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Speaker 3: This is Bloomberg Tech Live on Bloomberg Television and Bloomberg Radio,

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Speaker 3: and we're speaking with AMD CEO Lisa Sue Strong in

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Speaker 3: PC Strong in server particularly CPU. Is that an a

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Speaker 3: m D capturing market share story or is that just

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Speaker 3: a rebound in demand generally story?

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Speaker 2: Lisa Well, I.

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Speaker 9: Think it's both.

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Speaker 10: Ed.

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Speaker 8: I think the demand is is good. I think the

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Speaker 8: demand patterns are better. But clearly we're very, you know,

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Speaker 8: very competitive with our products. I think we have leadership

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Speaker 8: CPUs in both.

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Speaker 9: Server and client.

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Speaker 8: We've shown significant traction in cloud as well as enterprise,

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Speaker 8: and I think going forward you're going to see, you know,

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Speaker 8: enterprise customers want the best solution out there, and that is.

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Speaker 9: You know, a m D for computing and gaming.

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Speaker 4: Nisa so Strong. I'm interested into the nuance of pull

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Speaker 4: forward because you said on the call that you didn't

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Speaker 4: see a whole lot of pull forward. Are people trying

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Speaker 4: to get ahead of tarifs and price increases, but did

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Speaker 4: you see any.

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Speaker 9: You know, very little Caroline.

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Speaker 8: I think what we look at mostly is not just

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Speaker 8: what we're selling in to customers, but we actually look

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Speaker 8: at what's being sold out at end customers, and what

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Speaker 8: we're seeing being you know, really transferred to end customers

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Speaker 8: is good demand. I mean, people are refreshing their data centers,

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Speaker 8: which is very positive. Right We're in a place where

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Speaker 8: computing is important, and so we're seeing strong refresh cycles

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Speaker 8: on the data center side. We're seeing strong pull through

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Speaker 8: of our of our solutions in the enterprise in PC,

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Speaker 8: and then from a gaming standpoint, again, we have a

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Speaker 8: very strong product cycle. So you know, there's it's always

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Speaker 8: hard to tell exactly what the impact of the current

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Speaker 8: tariffs are, but I would say that that's the smaller

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Speaker 8: part of the impact on our business. The larger part

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Speaker 8: is just strong products, you know, very good traction from customers.

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Speaker 9: And looking at a stronger second half.

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Speaker 4: Of the year, a stronger second half of the year

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Speaker 4: where you take some market share from Nvidia, Lisa, how

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Speaker 4: are you seeing that grow out and the ability to

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Speaker 4: compete with the next ranger chips.

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Speaker 8: Well, we are very bullish on our overall roadmap capability.

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Speaker 8: I think the second half of the year as a

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Speaker 8: number of customers. You're really you're broadly adopting AMD.

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Speaker 3: Lisa, I have a question from our audience, if that's okay,

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Speaker 3: a viewer of Bloomberg Tech and as you know, like

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Speaker 3: loads of AMD employees, your peers, technology industry.

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Speaker 2: People want to hear what you have say. I'm just

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Speaker 2: going to read it to you.

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Speaker 3: Can Lisa, please explain AMD's winning and gaming consoles. But

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Speaker 3: AI is where the margins are. Now, what's the plan

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Speaker 3: to make a MD indispensable to the next open AI

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Speaker 3: and not just cost effective alternative? I think to invideor

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Speaker 3: is what they're saying well ed?

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Speaker 8: The best way to say that is for you know,

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Speaker 8: those of you who know us as a company, you

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Speaker 8: know we execute extremely well.

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Speaker 9: You know, our roadmaps are strong.

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Speaker 8: We're very excited about all of the progress that we've made.

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Speaker 8: You know, I three hundred was an excellent product. M

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Speaker 8: I three point fifty is you know, a big increase

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Speaker 8: above that, and then our next generation is also and

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Speaker 8: the key for us, if you look at our history,

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Speaker 8: our history is doing what we say we're going to do,

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Speaker 8: delivering to customers, delivering total cost of ownership and with that,

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Speaker 8: you know, being a great partner, and so from that standpoint,

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Speaker 8: I think you can be very confident that we have

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Speaker 8: a strong roadmap and we're going to.

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Speaker 9: Execute on it well.

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Speaker 8: And you know, our largest customers want to have a

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Speaker 8: dependable and good partner.

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Speaker 4: It's been wonderful spending time with you, Lisa sou Amd CEO.

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Speaker 4: We thank you very much time now for talking tech.

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Speaker 4: First up, soft Bank shares they're actually higher on the

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Speaker 4: news that open Ai is set to sell shares at

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Speaker 4: a five hundred billion dollar valuation insider shares. As a company,

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Speaker 4: of course it has a big investment in but the

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Speaker 4: news reversed an earlier fall in the Japanese company stock

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Speaker 4: after it brought to net income that missed analyst expectations. Meanwhile,

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Speaker 4: the US has charged two Chinese nationals. We're sending it

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Speaker 4: tens of millions of dollars worth of advanced AI chips

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Speaker 4: to China, violating export restrictions. Now the defendants allegedly sent

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Speaker 4: sensitive technology from Nvidia, including h one hundred AI accelerators.

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Speaker 4: Lawyers for the pair couldn't be immediately located for comment.

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Speaker 4: And this mountain traversing robot dog is causing shares of

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Speaker 4: Chinese robotics companies to climb, but the mechanical dog is

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Speaker 4: from startup Unitary. China has been showing off its robotics

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Speaker 4: prowess in a lot this year, including with running and

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Speaker 4: kickboxing humanoids and a favorite of yours.

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Speaker 3: Yeah, coming up, Matt Romberg, CEO of gaming creation platform Unity,

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Speaker 3: going to talk about that company's earnings. We're going to

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Speaker 3: talk more about the mobile gaming space, in particular what

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Speaker 3: the dev community has been really focused on. This is

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Speaker 3: Bloomberg Tech. Welcome back to Bloomberg Tech. I'm taking a

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Speaker 3: look at AMD largely to just recap the conversation we

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Speaker 3: just had with cly to Sue. The stock came off

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Speaker 3: session lows during the course of that conversation talking about

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Speaker 3: clear demand, particularly from hyperscalers in the AI accelerator market.

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Speaker 3: They do think that they can shift some of that

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Speaker 3: China specific AI accelerated inventory Carrow that they had written down.

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Speaker 3: That's one of the responsors she gave to you. PC

444
00:22:18,960 --> 00:22:21,680
Speaker 3: demand is very strong and they're taking market share. Was

445
00:22:21,680 --> 00:22:23,919
Speaker 3: a very clear signal. We'll continue to track it. It's

446
00:22:23,960 --> 00:22:27,040
Speaker 3: bouncing around a lot going on. Apple continues to push

447
00:22:27,119 --> 00:22:30,920
Speaker 3: higher one hundred billion dollars additional investment in US according

448
00:22:30,920 --> 00:22:34,240
Speaker 3: to the White House later today, we expect to hear more.

449
00:22:34,400 --> 00:22:36,560
Speaker 3: The stock's now up five and a half percent. That's

450
00:22:36,560 --> 00:22:39,639
Speaker 3: a big jump. Shopify is up nineteen and a half percent.

451
00:22:39,840 --> 00:22:42,919
Speaker 3: It's now become Canada's biggest company by market cap. It

452
00:22:43,000 --> 00:22:46,400
Speaker 3: is taking e commerce market share and absolutely barm storming

453
00:22:46,440 --> 00:22:49,160
Speaker 3: print from that company. And then super Micro is down

454
00:22:49,160 --> 00:22:51,959
Speaker 3: twenty one percent. Simple Story told us that in fiscal

455
00:22:52,000 --> 00:22:56,040
Speaker 3: twenty six they would get thirty three billion dollars sorry,

456
00:22:56,080 --> 00:22:59,720
Speaker 3: in sales. They previously told us forty billion. Everyone's going, well,

457
00:23:00,000 --> 00:23:02,000
Speaker 3: what's going on? You know, it's just not as strong

458
00:23:02,040 --> 00:23:03,320
Speaker 3: as they had previously told us.

459
00:23:03,560 --> 00:23:04,479
Speaker 2: We have more ends.

460
00:23:04,840 --> 00:23:07,680
Speaker 4: Yeah, and we've got more big slumps. Actually this time,

461
00:23:07,760 --> 00:23:11,400
Speaker 4: let's check out snapshares plunging after reporting second quarter sales

462
00:23:11,440 --> 00:23:13,520
Speaker 4: that fell short of Wall Street. The expectation said, Look,

463
00:23:13,640 --> 00:23:16,640
Speaker 4: the company blamed a technical issue with its ad buying

464
00:23:16,680 --> 00:23:19,640
Speaker 4: tools that basically set price points too low. The glitch

465
00:23:19,800 --> 00:23:22,119
Speaker 4: has now been fixed. But let's break down the numbers

466
00:23:22,119 --> 00:23:23,960
Speaker 4: of the outlook with jasmin Enberg where poased to welcome

467
00:23:23,960 --> 00:23:26,560
Speaker 4: a back VP and principle analyst and eMarketer. This is

468
00:23:26,560 --> 00:23:29,600
Speaker 4: such a self inflicted wound and the market doesn't seem

469
00:23:29,640 --> 00:23:31,639
Speaker 4: to be well forgiving them for it.

470
00:23:32,760 --> 00:23:35,520
Speaker 11: Yeah, absolutely, I mean it really was a dismal quarter

471
00:23:35,640 --> 00:23:38,480
Speaker 11: for a SNAP, and even before it reported its earnings,

472
00:23:38,520 --> 00:23:41,320
Speaker 11: I was saying that it wasn't looking great for the company,

473
00:23:41,359 --> 00:23:44,200
Speaker 11: and that had less to do with the economic uncertainty

474
00:23:44,280 --> 00:23:46,359
Speaker 11: and tariffs, which of course it had warned about at

475
00:23:46,400 --> 00:23:48,720
Speaker 11: the end of Q one, and more to do with

476
00:23:49,000 --> 00:23:53,880
Speaker 11: foundational structural issues within its AD platform and its ability

477
00:23:53,920 --> 00:23:57,240
Speaker 11: to monetize. Now, I obviously could not have predicted that

478
00:23:57,280 --> 00:23:59,600
Speaker 11: it would have an ad glitch in Q two that

479
00:23:59,640 --> 00:24:02,560
Speaker 11: would result in the deceleration and growth, but I think

480
00:24:02,600 --> 00:24:06,800
Speaker 11: that really does point to these longer term, more deeper

481
00:24:06,920 --> 00:24:10,760
Speaker 11: challenges that it has within its business model. I do

482
00:24:10,800 --> 00:24:13,439
Speaker 11: think in a different context, investors might have been just

483
00:24:13,520 --> 00:24:17,360
Speaker 11: a little bit more forgiving, though probably not much more

484
00:24:17,400 --> 00:24:20,919
Speaker 11: forgiving because they tend to be with Snap. But you know,

485
00:24:20,960 --> 00:24:23,879
Speaker 11: STAP hasn't working very hard for quite some time on

486
00:24:23,960 --> 00:24:27,439
Speaker 11: revamping its AD platform focus really on direct response, and

487
00:24:27,480 --> 00:24:31,240
Speaker 11: I think they're getting frustrated. They're getting impatient because the results,

488
00:24:31,280 --> 00:24:35,679
Speaker 11: while sometimes there's progress, it's mostly been inconsistent. And then

489
00:24:35,720 --> 00:24:39,119
Speaker 11: if you take the larger context of meta and reddits

490
00:24:39,280 --> 00:24:40,760
Speaker 11: blowout earnings.

491
00:24:40,280 --> 00:24:42,720
Speaker 9: For Q two. It makes it really hard.

492
00:24:42,520 --> 00:24:48,400
Speaker 11: For Snap to shift responsibility to macro conditions or headwinds

493
00:24:48,400 --> 00:24:50,720
Speaker 11: and leaves very little room for mistakes.

494
00:24:50,920 --> 00:24:54,399
Speaker 4: I mean, well said, why they consistently deliver is daily

495
00:24:54,440 --> 00:24:57,480
Speaker 4: active users, unless we forget there's almost half a billion

496
00:24:57,520 --> 00:25:00,520
Speaker 4: of them. But what's interesting is they're trying to move

497
00:25:00,520 --> 00:25:03,199
Speaker 4: away perhaps some more volatile ad side of it to

498
00:25:03,280 --> 00:25:06,440
Speaker 4: subscription is that working well.

499
00:25:06,480 --> 00:25:10,399
Speaker 11: Snapchat Plus has been and continues to be a bright

500
00:25:10,480 --> 00:25:12,679
Speaker 11: spot for Snap. And one of the things that that

501
00:25:12,800 --> 00:25:15,359
Speaker 11: says to me is that while Snap still struggles to

502
00:25:16,240 --> 00:25:20,040
Speaker 11: roll out features for advertisers that they like and need,

503
00:25:20,119 --> 00:25:24,880
Speaker 11: they certainly know how to bring features to consumers that

504
00:25:24,920 --> 00:25:27,560
Speaker 11: they like and that they're willing to pay for. I

505
00:25:27,600 --> 00:25:31,040
Speaker 11: do think going forward, diversification of its revenue streams in

506
00:25:31,040 --> 00:25:33,560
Speaker 11: general is just going to be so much more important

507
00:25:33,600 --> 00:25:36,600
Speaker 11: for Snap, and Snapchat Plus continues to drive a lot

508
00:25:36,640 --> 00:25:41,000
Speaker 11: of its revenue growth, especially considering the fact that while

509
00:25:41,000 --> 00:25:44,280
Speaker 11: its monthly active user base showed really strong signs of

510
00:25:44,320 --> 00:25:47,159
Speaker 11: progress in terms of going getting toward that one billion

511
00:25:47,280 --> 00:25:50,919
Speaker 11: dollar or one billion user goal that it has, we

512
00:25:51,000 --> 00:25:54,080
Speaker 11: saw a lot of weakness in North America, which is

513
00:25:54,119 --> 00:25:58,800
Speaker 11: Snap's core market and where it makes most of its money.

514
00:25:58,840 --> 00:26:00,840
Speaker 11: And that also means then that Snap is going to

515
00:26:00,880 --> 00:26:05,000
Speaker 11: be more reliant on international markets going forward to monetize

516
00:26:05,080 --> 00:26:09,200
Speaker 11: via ads, and that's extremely challenging or more challenging because

517
00:26:09,720 --> 00:26:13,080
Speaker 11: it's harder to make money there. And again, the weakness

518
00:26:13,119 --> 00:26:15,919
Speaker 11: in North America points to structural problems.

519
00:26:16,800 --> 00:26:19,280
Speaker 3: Just real quick, I appreciate what you said about the

520
00:26:19,359 --> 00:26:23,000
Speaker 3: response investors have to Snap sometimes, like I just always remember,

521
00:26:23,040 --> 00:26:24,520
Speaker 3: are they going up a lot or down a lot?

522
00:26:25,440 --> 00:26:28,480
Speaker 3: But that speaks to lack of consistency. Like Meta showed

523
00:26:28,560 --> 00:26:31,639
Speaker 3: us that all the stuff they've done around AI shaws

524
00:26:31,720 --> 00:26:33,200
Speaker 3: up the core breading but of business.

525
00:26:33,560 --> 00:26:35,720
Speaker 2: Is Snap not experiencing something similar?

526
00:26:36,720 --> 00:26:38,720
Speaker 11: Yeah, I mean I think Meta showed us that you

527
00:26:38,720 --> 00:26:41,160
Speaker 11: can send a lot of money on AI if your

528
00:26:41,200 --> 00:26:44,280
Speaker 11: core business is doing well, and it truly is. I mean,

529
00:26:44,320 --> 00:26:49,080
Speaker 11: Meta is a powerhouse. It continues to deliver on efficiency

530
00:26:49,640 --> 00:26:53,119
Speaker 11: and effectiveness for advertisers. You know, Snap has been playing

531
00:26:53,160 --> 00:26:56,520
Speaker 11: catch up to Meta in many ways, including in AI.

532
00:26:56,880 --> 00:26:59,600
Speaker 11: You know, it doesn't have the same scale and resources

533
00:26:59,600 --> 00:27:05,040
Speaker 11: that Meta has to build this powerhouse AI driven ad business,

534
00:27:05,600 --> 00:27:08,720
Speaker 11: but it certainly needs to do more work there. One

535
00:27:08,720 --> 00:27:10,879
Speaker 11: thing I will say for Snap though, is you know,

536
00:27:11,119 --> 00:27:15,560
Speaker 11: we saw an increase in SMB advertising small and medium

537
00:27:15,560 --> 00:27:18,560
Speaker 11: sized businesses, and I do think that that is, you know,

538
00:27:18,680 --> 00:27:22,240
Speaker 11: a direct result of its investments in AI in its

539
00:27:22,240 --> 00:27:25,760
Speaker 11: ad platform, because these advertisers are generally drawn to places

540
00:27:25,800 --> 00:27:29,880
Speaker 11: where it's easy to advertise, and that's you know, one

541
00:27:29,880 --> 00:27:34,159
Speaker 11: of the impacts that AI has on advertising and these platforms.

542
00:27:34,640 --> 00:27:36,840
Speaker 3: Jasmine Enberg from me Marketer, thank you so much for

543
00:27:36,920 --> 00:27:39,159
Speaker 3: joining us on the program. Let's stick with earnings and

544
00:27:39,200 --> 00:27:42,560
Speaker 3: get out to gaming. Shares of Unity software actually now

545
00:27:42,640 --> 00:27:46,200
Speaker 3: lower by almost nine percent. Blinking and miss it kind

546
00:27:46,200 --> 00:27:49,320
Speaker 3: of situation. This morning, Caro, the stock had spiked after

547
00:27:49,320 --> 00:27:52,160
Speaker 3: the company reported better than expected second quarter earnings.

548
00:27:52,400 --> 00:27:53,160
Speaker 2: Something's changed.

549
00:27:53,200 --> 00:27:56,200
Speaker 3: Let's talk it through with Unity CEO Matt Brumberg.

550
00:27:56,960 --> 00:27:58,080
Speaker 2: Well, help me.

551
00:27:58,840 --> 00:28:03,280
Speaker 3: There was a good response. You beat expectations. There's particular

552
00:28:03,280 --> 00:28:05,720
Speaker 3: focus for you guys in the mobile gaming market. The

553
00:28:05,760 --> 00:28:08,280
Speaker 3: stock is sort of reverse direction, is down eight percent.

554
00:28:08,359 --> 00:28:08,600
Speaker 5: Matt.

555
00:28:09,160 --> 00:28:10,359
Speaker 2: You'll read on that. Please.

556
00:28:11,080 --> 00:28:14,080
Speaker 12: Yeah, you know we're not stock investors or business builders,

557
00:28:14,080 --> 00:28:15,680
Speaker 12: so you know, my answer to that is a little

558
00:28:15,720 --> 00:28:18,439
Speaker 12: bit of who knows what we're really focused on is

559
00:28:18,720 --> 00:28:21,280
Speaker 12: building or growing and during business. And I think that

560
00:28:21,600 --> 00:28:24,840
Speaker 12: when we look back on the second quarter twenty twenty five,

561
00:28:24,920 --> 00:28:26,439
Speaker 12: the history is going to show that it was an

562
00:28:26,440 --> 00:28:30,200
Speaker 12: inflection point for our turnaround, sort of the time when

563
00:28:30,600 --> 00:28:34,639
Speaker 12: accelerated product development and delivering more for customers started to

564
00:28:34,720 --> 00:28:37,280
Speaker 12: show up in a really meaningful way in our business.

565
00:28:37,760 --> 00:28:39,400
Speaker 13: And I think that's basically where we are.

566
00:28:40,520 --> 00:28:42,480
Speaker 3: I really appreciate having you on the show. I take

567
00:28:42,520 --> 00:28:45,520
Speaker 3: a lot of interest in Unity because we recently have roadblocks.

568
00:28:45,560 --> 00:28:48,200
Speaker 3: CEO David Zooki on the show of their own Earnings

569
00:28:48,320 --> 00:28:51,280
Speaker 3: is probably more analogous in the gaming space to put

570
00:28:51,280 --> 00:28:54,760
Speaker 3: you nearer to a roadblock. Maybe you disagree, but mobile

571
00:28:54,800 --> 00:28:57,640
Speaker 3: gaming right now is a huge focus. How is that

572
00:28:57,680 --> 00:29:02,640
Speaker 3: a driver for your business and a prioritype It's.

573
00:29:02,440 --> 00:29:03,840
Speaker 13: The biggest priority there is.

574
00:29:03,880 --> 00:29:07,840
Speaker 12: We're effectively the operating system for the mobile gaming business. Globally,

575
00:29:08,960 --> 00:29:11,200
Speaker 12: seventy percent of the mobile games in the world are

576
00:29:11,200 --> 00:29:13,400
Speaker 12: built on Unity, and eighty five of the top one

577
00:29:13,440 --> 00:29:17,680
Speaker 12: hundred advertisers mobile game advertisers advertise with us. So what

578
00:29:17,680 --> 00:29:20,520
Speaker 12: we've really seen in the last year or so of

579
00:29:20,560 --> 00:29:23,920
Speaker 12: this turnaround is that when we make fundamental investments in

580
00:29:24,000 --> 00:29:27,360
Speaker 12: delivering better product for that set of customers for the

581
00:29:27,400 --> 00:29:31,320
Speaker 12: mobile gaming business. That our business is lifting, and we've

582
00:29:31,320 --> 00:29:35,200
Speaker 12: really seen that over the year, and we're actually really

583
00:29:35,280 --> 00:29:38,160
Speaker 12: excited about investor reaction over the course of the year

584
00:29:38,200 --> 00:29:38,600
Speaker 12: as well.

585
00:29:39,160 --> 00:29:41,200
Speaker 4: I'm going to go back to perhaps the stock reaction

586
00:29:41,320 --> 00:29:43,760
Speaker 4: and what our own bloombag intelligence analysts have been saying

587
00:29:43,800 --> 00:29:48,880
Speaker 4: that and forgive me, it's not always bathed in positivity

588
00:29:48,920 --> 00:29:51,360
Speaker 4: because they say, look, this is a cuerential decline of

589
00:29:51,400 --> 00:29:54,360
Speaker 4: your Create segment in the next quarter that suggests muted

590
00:29:54,400 --> 00:29:59,040
Speaker 4: adoption of your Unity six offering. Just describe that. Is

591
00:29:59,080 --> 00:30:00,800
Speaker 4: that something you're seeing seeing, Jenna.

592
00:30:00,720 --> 00:30:03,400
Speaker 13: I started, I think that's just incorrect.

593
00:30:04,640 --> 00:30:08,160
Speaker 12: UNI six is the fast most the fastest adoption of

594
00:30:08,200 --> 00:30:09,800
Speaker 12: any version of you we've ever seen.

595
00:30:10,080 --> 00:30:13,040
Speaker 13: It's the most stable, it's the most performant. So we've

596
00:30:13,080 --> 00:30:14,480
Speaker 13: been really really pleased by that.

597
00:30:15,600 --> 00:30:19,640
Speaker 12: Again, you're drawing into wondering about the stock I would

598
00:30:19,680 --> 00:30:21,320
Speaker 12: just tell you it's much more likely to be the

599
00:30:21,320 --> 00:30:23,600
Speaker 12: one hundred plus percent run up over the past year

600
00:30:23,840 --> 00:30:28,000
Speaker 12: in anticipation what are sharply better results, and again it's

601
00:30:28,480 --> 00:30:30,400
Speaker 12: a kind of inflection point in our business.

602
00:30:31,360 --> 00:30:33,080
Speaker 13: I would guess that has some more to do with those.

603
00:30:32,960 --> 00:30:36,040
Speaker 4: Dynams love that context, Matt, give us the context of

604
00:30:36,120 --> 00:30:39,240
Speaker 4: the ad space, and you're encroaching a bit more on

605
00:30:39,280 --> 00:30:41,960
Speaker 4: app love in space for example, how do you compete?

606
00:30:42,000 --> 00:30:44,480
Speaker 4: How you seeing your self take market share or indeed

607
00:30:44,480 --> 00:30:46,560
Speaker 4: app love and still being a really strong competitor.

608
00:30:47,160 --> 00:30:49,640
Speaker 12: Yeah, we don't really think about market share in this business.

609
00:30:49,880 --> 00:30:53,840
Speaker 12: The way this business works is performance based. Mobile advertisers

610
00:30:54,160 --> 00:30:57,560
Speaker 12: buy performance and they buy against their rows, their return

611
00:30:57,600 --> 00:31:00,600
Speaker 12: on investment targets, and they will buy infinitely across that

612
00:31:00,760 --> 00:31:01,720
Speaker 12: efficient frontier.

613
00:31:01,880 --> 00:31:03,440
Speaker 13: So as we deliver.

614
00:31:03,200 --> 00:31:06,520
Speaker 12: More value, customers will spend more money with us, and

615
00:31:06,560 --> 00:31:07,560
Speaker 12: our business will grow.

616
00:31:07,760 --> 00:31:11,200
Speaker 13: And that's what's happening. This is a big.

617
00:31:11,160 --> 00:31:14,400
Speaker 12: Competitive space with some of the largest, most competitive players

618
00:31:14,880 --> 00:31:17,520
Speaker 12: in the world operating in it, and we're really excited

619
00:31:17,560 --> 00:31:20,760
Speaker 12: about our ability to compete and not just now but

620
00:31:20,800 --> 00:31:21,400
Speaker 12: in the future.

621
00:31:22,480 --> 00:31:24,440
Speaker 3: I'd love to end by talking just very quickly about

622
00:31:24,480 --> 00:31:26,960
Speaker 3: developers and the creator community. Like one of the big

623
00:31:27,000 --> 00:31:30,280
Speaker 3: issues in the end market the app store, Apple or

624
00:31:30,360 --> 00:31:33,560
Speaker 3: Google is revenue split and just what you're doing to

625
00:31:33,640 --> 00:31:37,080
Speaker 3: incentivize the creators, but also like bring everyone with you

626
00:31:37,120 --> 00:31:38,320
Speaker 3: if you're growing at that click.

627
00:31:39,640 --> 00:31:39,840
Speaker 2: Yeah.

628
00:31:39,880 --> 00:31:43,440
Speaker 12: I mean, we are the tools that those folks use

629
00:31:43,560 --> 00:31:47,200
Speaker 12: to build their experiences and then operate those business for

630
00:31:47,360 --> 00:31:51,240
Speaker 12: years and years in life service. So when we deliver better,

631
00:31:51,320 --> 00:31:53,840
Speaker 12: more effective tools, for example, to your point, to help

632
00:31:53,880 --> 00:31:57,080
Speaker 12: them monetize commerce in a native way, for example, and

633
00:31:57,200 --> 00:32:01,000
Speaker 12: help them acquire users more efficiently, and that business grows.

634
00:32:01,080 --> 00:32:03,160
Speaker 13: So we're a partner in that growth.

635
00:32:02,920 --> 00:32:06,920
Speaker 4: With them at Bromberg, CEO of Unity, it's great to

636
00:32:06,960 --> 00:32:07,760
Speaker 4: have some time with you.

637
00:32:14,800 --> 00:32:17,560
Speaker 3: Bloomberg's reporting that open ai is in talks for a

638
00:32:17,600 --> 00:32:21,560
Speaker 3: potential share sale for current and former employees that would

639
00:32:21,560 --> 00:32:25,520
Speaker 3: put the company at a five hundred billion dollar valuation.

640
00:32:26,440 --> 00:32:27,600
Speaker 2: That's the chart right there.

641
00:32:28,520 --> 00:32:32,200
Speaker 3: The move would boost open AI's price tag, according to sources,

642
00:32:32,240 --> 00:32:33,720
Speaker 3: which is previously at three.

643
00:32:33,600 --> 00:32:34,440
Speaker 2: Hundred billion dollars.

644
00:32:34,480 --> 00:32:38,720
Speaker 3: Bloomberg's Shringafari broke the story and it's with us now.

645
00:32:38,920 --> 00:32:41,720
Speaker 3: The mechanism actually doesn't even really matter. It's an insider

646
00:32:41,720 --> 00:32:45,080
Speaker 3: share sale that sets this valuation of five hundred billion dollars.

647
00:32:45,320 --> 00:32:47,240
Speaker 3: But it feels like just yesterday that we broke the

648
00:32:47,280 --> 00:32:51,160
Speaker 3: story on the last three hundred billion dollar valuation. Tell

649
00:32:51,240 --> 00:32:53,200
Speaker 3: us about the jump, tell us about what we're hearing

650
00:32:53,200 --> 00:32:54,440
Speaker 3: from sources is going on.

651
00:32:56,400 --> 00:32:59,320
Speaker 14: Yeah, I mean it's a significant jump in valuation, more

652
00:32:59,360 --> 00:33:02,760
Speaker 14: than two thirds of the last price tag, you know,

653
00:33:02,800 --> 00:33:06,000
Speaker 14: the last round that we reported on finalized in March,

654
00:33:06,080 --> 00:33:10,520
Speaker 14: led by soft Bank. Since then, we've seen strong user

655
00:33:10,560 --> 00:33:14,040
Speaker 14: and revenue growth as we've reported, but again, this price

656
00:33:14,120 --> 00:33:16,440
Speaker 14: tag would put open a eye in a new league

657
00:33:16,480 --> 00:33:20,480
Speaker 14: as one of the most highly valued private companies out there.

658
00:33:21,240 --> 00:33:22,320
Speaker 9: If this sale were to go.

659
00:33:22,320 --> 00:33:27,080
Speaker 4: Through, extraordinary. How it eclipses even the owner of TikTok

660
00:33:27,280 --> 00:33:30,040
Speaker 4: over in China and well ahead of close second is

661
00:33:30,040 --> 00:33:32,440
Speaker 4: sort of SpaceX here in the US. What's interesting is

662
00:33:32,440 --> 00:33:34,960
Speaker 4: we're getting so many updates to the product itself for

663
00:33:35,080 --> 00:33:37,320
Speaker 4: the world as well, Shoen. We're seeing how they're getting

664
00:33:37,320 --> 00:33:41,640
Speaker 4: in offering chatchipt to federal offerings with just one dollar.

665
00:33:41,680 --> 00:33:43,480
Speaker 4: They're trying to open source a little bit more. Does

666
00:33:43,520 --> 00:33:45,680
Speaker 4: this just build up the idea that this is going

667
00:33:45,760 --> 00:33:47,040
Speaker 4: to be the winner?

668
00:33:48,680 --> 00:33:50,480
Speaker 14: I think it's still too early to say in the

669
00:33:50,480 --> 00:33:53,880
Speaker 14: AGI race, who, if anyone, will be the definitive winner,

670
00:33:53,880 --> 00:33:56,360
Speaker 14: but I will say this is an This has always

671
00:33:56,400 --> 00:34:00,560
Speaker 14: been a rapidly moving field, and I think the past

672
00:34:00,600 --> 00:34:05,000
Speaker 14: few months have been especially fast. We are seeing new

673
00:34:05,080 --> 00:34:08,480
Speaker 14: releases from open Ai this week. We have the open

674
00:34:08,520 --> 00:34:11,960
Speaker 14: Source model that just dropped, and it's widely expected that

675
00:34:12,000 --> 00:34:15,879
Speaker 14: their more major model update, GPT five is coming soon.

676
00:34:16,680 --> 00:34:18,120
Speaker 14: On top of that, you know, if you look to

677
00:34:18,640 --> 00:34:21,080
Speaker 14: the left and right, we have Anthropic also released an

678
00:34:21,120 --> 00:34:24,960
Speaker 14: update to its model, also in talks to have a

679
00:34:25,000 --> 00:34:28,280
Speaker 14: new round of funding that would more than double their

680
00:34:28,360 --> 00:34:30,640
Speaker 14: past valuation from just earlier this year.

681
00:34:31,040 --> 00:34:32,080
Speaker 9: So I think this is.

682
00:34:32,360 --> 00:34:36,400
Speaker 14: Really a sign that the ai market continues to grow,

683
00:34:36,520 --> 00:34:39,920
Speaker 14: and it does raise questions about are these valuations justified?

684
00:34:39,960 --> 00:34:42,080
Speaker 14: And I think that depends on how bullish you are

685
00:34:42,760 --> 00:34:44,360
Speaker 14: on the genai market as a whole.

686
00:34:45,200 --> 00:34:47,880
Speaker 3: Sharen, reading your report, there's a lot of detail here.

687
00:34:48,239 --> 00:34:51,280
Speaker 3: I mean, for one important point is we understand why

688
00:34:51,880 --> 00:34:54,520
Speaker 3: open ai is doing this right with the secondary The

689
00:34:54,600 --> 00:34:57,640
Speaker 3: timing is because the talent wars and Sam Altman has

690
00:34:57,680 --> 00:34:59,800
Speaker 3: this workforce that he has to keep happy.

691
00:35:01,480 --> 00:35:04,520
Speaker 14: Right, So, as we reported, one of the reasons why

692
00:35:05,080 --> 00:35:08,440
Speaker 14: Opening Eye wants to do this secondary share cal wight

693
00:35:08,560 --> 00:35:11,520
Speaker 14: makes sense is that it gives employees an opportunity to

694
00:35:12,560 --> 00:35:16,680
Speaker 14: essentially cash out. If you're working at Meta, which is

695
00:35:16,800 --> 00:35:19,799
Speaker 14: aggressively By the way, there's this fierce talent war going

696
00:35:19,840 --> 00:35:23,440
Speaker 14: on right now right and Meta has poached several prominent

697
00:35:23,480 --> 00:35:27,839
Speaker 14: open ai employees if they want to retain these employees.

698
00:35:28,360 --> 00:35:31,440
Speaker 14: You know, people want to be able to liquidate their

699
00:35:32,000 --> 00:35:35,440
Speaker 14: shares and this provides current informer employees a potential way

700
00:35:35,480 --> 00:35:35,759
Speaker 14: to do that.

701
00:35:36,480 --> 00:35:39,560
Speaker 4: Sharan KAfari, thanks so much for the update on open Ai.

702
00:35:39,760 --> 00:35:42,120
Speaker 4: Now let's get back to the public markets where Uber

703
00:35:42,239 --> 00:35:44,279
Speaker 4: is already out with its earnings, but after the bell

704
00:35:44,320 --> 00:35:46,880
Speaker 4: we get plenty more Lyft, Door, Dash, Airbnb. There is

705
00:35:46,960 --> 00:35:50,719
Speaker 4: one woman who covers them all, Natalie Lung. You've got

706
00:35:50,719 --> 00:35:52,719
Speaker 4: a busy day. Let's talk about Uber because it's actually

707
00:35:52,760 --> 00:35:55,120
Speaker 4: trading lower. Is that more about how father shares had

708
00:35:55,200 --> 00:35:57,400
Speaker 4: run into this or the worry about sort of the

709
00:35:57,480 --> 00:35:59,960
Speaker 4: spending or capex on autonomous here.

710
00:36:00,080 --> 00:36:02,960
Speaker 10: It's a little bit of both. Definitely, there's a lot

711
00:36:03,000 --> 00:36:07,040
Speaker 10: of excitement going into the earnings today, which was mostly

712
00:36:07,120 --> 00:36:09,680
Speaker 10: a beat, But there was a small miss in the

713
00:36:09,719 --> 00:36:13,000
Speaker 10: core ride share business by Uber, and that was really

714
00:36:13,080 --> 00:36:15,520
Speaker 10: offset by the strong performance of the delivery units.

715
00:36:15,560 --> 00:36:17,960
Speaker 9: So there's a lot for us to look at.

716
00:36:17,960 --> 00:36:21,640
Speaker 10: In terms of what it means for consumer spending and investors.

717
00:36:21,719 --> 00:36:24,600
Speaker 10: Was also excited to hear more about the autonomous strategy

718
00:36:25,080 --> 00:36:25,640
Speaker 10: in the company.

719
00:36:25,640 --> 00:36:28,000
Speaker 3: It's a twenty four hour period that's like the super

720
00:36:28,040 --> 00:36:30,960
Speaker 3: Bowl for Natalie Lung. In the gig economy and at

721
00:36:31,080 --> 00:36:34,680
Speaker 3: based tech company space, you're super busy, as Karen said,

722
00:36:34,920 --> 00:36:37,080
Speaker 3: But what always happens You get Uber and then you

723
00:36:37,120 --> 00:36:39,839
Speaker 3: get Lyft. And there's obviously some read across. What are

724
00:36:39,880 --> 00:36:42,439
Speaker 3: the expectations for the smaller of the two.

725
00:36:43,800 --> 00:36:47,040
Speaker 10: For Lift, they're still expected to post double digit growth

726
00:36:47,080 --> 00:36:49,640
Speaker 10: in the key metric of gross bookings and for this

727
00:36:49,800 --> 00:36:52,200
Speaker 10: quarter in particular, we want to look at the third

728
00:36:52,280 --> 00:36:55,160
Speaker 10: quarter outlook because it's the first time they're including the

729
00:36:55,200 --> 00:36:59,680
Speaker 10: free Now business, which they completed the acquisition last week,

730
00:36:59,719 --> 00:37:05,120
Speaker 10: and that will add business from new European markets such

731
00:37:05,120 --> 00:37:08,560
Speaker 10: as UK and Germany. So that is something of interest

732
00:37:08,680 --> 00:37:09,040
Speaker 10: for me.

733
00:37:09,000 --> 00:37:12,840
Speaker 4: Today doing in Europe and Germany and more broadly expansion

734
00:37:12,920 --> 00:37:14,680
Speaker 4: their DoorDash has been making a bit of m and

735
00:37:14,760 --> 00:37:17,080
Speaker 4: a over in the UK. It shares been on a

736
00:37:17,120 --> 00:37:19,840
Speaker 4: tear this year, up fifty three percent. Where do we

737
00:37:19,880 --> 00:37:21,480
Speaker 4: expect numbers for that company to go?

738
00:37:21,719 --> 00:37:25,760
Speaker 10: Yeah. Similarly, on the back of Uber's very strong delivery results,

739
00:37:25,800 --> 00:37:29,800
Speaker 10: DoorDash is also expected to post nearly twenty percent growth

740
00:37:29,840 --> 00:37:33,279
Speaker 10: on that top line as well. Their delivery deal has

741
00:37:33,280 --> 00:37:36,720
Speaker 10: not closed yet, so might not be seeing those results

742
00:37:36,719 --> 00:37:40,319
Speaker 10: there yet, but pretty strong spending on the US side

743
00:37:40,480 --> 00:37:41,120
Speaker 10: is expected.

744
00:37:42,040 --> 00:37:45,840
Speaker 3: Let's complete the grand slam, the complete sweep and do Airbnb.

745
00:37:46,600 --> 00:37:47,960
Speaker 2: What are you looking for in that name?

746
00:37:48,520 --> 00:37:52,000
Speaker 10: Yeah, it's again. It's a first quarter where we'll see

747
00:37:52,120 --> 00:37:58,400
Speaker 10: results from their newly relaunched Experiences and a Lacarte services business,

748
00:37:58,640 --> 00:38:02,719
Speaker 10: which Branchaskey has said would add one billion in analyzed

749
00:38:02,760 --> 00:38:05,520
Speaker 10: revenue for the company. So we will see the first

750
00:38:05,600 --> 00:38:08,920
Speaker 10: results from there, as well as a broader sentiment on

751
00:38:09,440 --> 00:38:10,120
Speaker 10: US travel.

752
00:38:11,640 --> 00:38:13,560
Speaker 3: One question I'd have is how does Natalie Lung do

753
00:38:13,680 --> 00:38:16,880
Speaker 3: all of those earnings at the same time. Bloomberg's Natalie

754
00:38:16,920 --> 00:38:19,240
Speaker 3: Lung busy evening for you ahead, Thank you very much.

755
00:38:26,120 --> 00:38:26,359
Speaker 2: Okay.

756
00:38:26,400 --> 00:38:28,719
Speaker 3: Apple shares are on the screen, and we're pushing towards

757
00:38:28,920 --> 00:38:32,920
Speaker 3: session highs, up almost six percent now following the announcement

758
00:38:32,960 --> 00:38:35,920
Speaker 3: that the White House says the iPhone maker will invest

759
00:38:35,960 --> 00:38:39,480
Speaker 3: an additional one hundred billion dollars in the United States,

760
00:38:39,480 --> 00:38:42,160
Speaker 3: Bloomberg's senior executive editor for Tech, Tom.

761
00:38:42,080 --> 00:38:42,800
Speaker 2: Jarles, is here.

762
00:38:43,120 --> 00:38:46,399
Speaker 3: It's a big number in isolation, sort of but it's

763
00:38:46,400 --> 00:38:47,880
Speaker 3: also got to be taken in aggregate.

764
00:38:48,520 --> 00:38:49,160
Speaker 9: Absolutely.

765
00:38:49,560 --> 00:38:53,560
Speaker 15: Look, Apple spends a lot on these types of initiatives

766
00:38:53,719 --> 00:38:56,680
Speaker 15: all the time. They have already been planning to spend

767
00:38:57,040 --> 00:39:01,200
Speaker 15: hundreds of billions of dollars in the coming years. The

768
00:39:01,200 --> 00:39:06,840
Speaker 15: Trump administration likes big, round, big honkin numbers, right, and

769
00:39:07,000 --> 00:39:11,120
Speaker 15: this is a way for them to say, we've scored

770
00:39:11,120 --> 00:39:14,800
Speaker 15: a victory. We are bringing manufacturing back to the United States.

771
00:39:15,200 --> 00:39:19,439
Speaker 15: On Apple's part, making these pledges, throwing these numbers out there,

772
00:39:19,480 --> 00:39:22,239
Speaker 15: and again, these are plans that this is money that

773
00:39:22,280 --> 00:39:24,600
Speaker 15: they do plan to spend. This is a good way

774
00:39:24,640 --> 00:39:28,160
Speaker 15: for them to as as BI analysts have said so eloquently,

775
00:39:28,640 --> 00:39:32,360
Speaker 15: softened dampen Trump's ire because they still do have a

776
00:39:32,400 --> 00:39:35,280
Speaker 15: lot of their supply chain outside of the United States.

777
00:39:35,360 --> 00:39:38,440
Speaker 15: Trump administration wants to say big US corporations are bringing

778
00:39:38,440 --> 00:39:41,160
Speaker 15: manufacturing back to the United States. This is the question

779
00:39:41,200 --> 00:39:43,520
Speaker 15: that we need to ask, and we will be asking

780
00:39:43,640 --> 00:39:47,279
Speaker 15: in the coming months and weeks, and that is how

781
00:39:47,360 --> 00:39:50,600
Speaker 15: much of real production of the iPhone, how much of

782
00:39:51,000 --> 00:39:56,600
Speaker 15: Apple's high end products is actually going to come to

783
00:39:56,719 --> 00:40:00,840
Speaker 15: the United States versus China, versus India. That's the real question,

784
00:40:01,320 --> 00:40:03,920
Speaker 15: Or is it stuff around the edges, And that's a

785
00:40:04,000 --> 00:40:05,920
Speaker 15: question that we're going to be asking Apple to and

786
00:40:06,200 --> 00:40:07,520
Speaker 15: a lot of other people are going to be asking

787
00:40:07,560 --> 00:40:09,040
Speaker 15: Apple in the coming weeks.

788
00:40:09,120 --> 00:40:11,960
Speaker 4: Yeah, because Tom, the five hundred billion thus far that

789
00:40:12,000 --> 00:40:15,440
Speaker 4: had already been announced, well, that was more about servers,

790
00:40:15,480 --> 00:40:18,200
Speaker 4: that was actually about training, and that was in some

791
00:40:18,280 --> 00:40:20,080
Speaker 4: ways we saw a little bit of the chunk of change.

792
00:40:20,080 --> 00:40:22,400
Speaker 4: I think it was about five million being allocated to

793
00:40:22,400 --> 00:40:25,080
Speaker 4: actually some rare earths as well. What are we actually

794
00:40:25,120 --> 00:40:27,400
Speaker 4: anticipating as to how much, if any, can really be

795
00:40:27,480 --> 00:40:28,359
Speaker 4: for the iPhone?

796
00:40:28,840 --> 00:40:29,040
Speaker 6: Right?

797
00:40:29,080 --> 00:40:31,920
Speaker 15: And some of this is also them committing to purchasing

798
00:40:31,960 --> 00:40:34,839
Speaker 15: more from US suppliers. Again, this is part of their

799
00:40:34,840 --> 00:40:37,840
Speaker 15: supply chain. They need these parts, they will be spending this,

800
00:40:38,200 --> 00:40:41,480
Speaker 15: But will this be creating lots of jobs? Will people

801
00:40:41,520 --> 00:40:48,600
Speaker 15: be manufacturing assembling these products in the US? Time will tell. Again,

802
00:40:48,719 --> 00:40:52,800
Speaker 15: these companies like to they've already been planning to spend

803
00:40:52,840 --> 00:40:55,200
Speaker 15: a lot of money and they're putting lots of big

804
00:40:55,280 --> 00:40:58,600
Speaker 15: round numbers around them. And again it's an opportunity for

805
00:40:58,640 --> 00:41:02,320
Speaker 15: the Trump administration to claim victory. But if you're talking

806
00:41:02,360 --> 00:41:07,920
Speaker 15: about server farms, if you're talking about buying from US manufacturers.

807
00:41:08,160 --> 00:41:11,440
Speaker 15: If you're talking about training facilities, there's a big delta

808
00:41:11,560 --> 00:41:16,279
Speaker 15: between that and actually putting together, piecing together these high

809
00:41:16,360 --> 00:41:21,480
Speaker 15: end devices and moving that supply chain out of India

810
00:41:21,520 --> 00:41:24,759
Speaker 15: and out of China. Look, it's in Apple's interest to

811
00:41:24,920 --> 00:41:27,759
Speaker 15: diversify their supply chain. No one is doubting that. So

812
00:41:27,920 --> 00:41:30,040
Speaker 15: much of it is relying on China and that really

813
00:41:30,040 --> 00:41:33,120
Speaker 15: bit them and a lot of other people, you know

814
00:41:33,160 --> 00:41:36,560
Speaker 15: where during the pandemic and they really need to kind

815
00:41:36,600 --> 00:41:37,839
Speaker 15: of diversify away from that.

816
00:41:38,920 --> 00:41:42,840
Speaker 4: President Trump doesn't particularly what I'm only diversifying into India.

817
00:41:42,960 --> 00:41:45,719
Speaker 4: Bloomberg's Tom Jiles, great to have you. Thank you for

818
00:41:45,760 --> 00:41:47,760
Speaker 4: the analysis that does it even this edition of Blomberg

819
00:41:47,880 --> 00:41:48,959
Speaker 4: Tech and what a show.

820
00:41:49,719 --> 00:41:52,720
Speaker 3: Yeah, and jokes aside, like it's a really heavy earnings period.

821
00:41:52,760 --> 00:41:54,719
Speaker 3: Still we move from the megacaps, but there's a lot

822
00:41:54,760 --> 00:41:56,920
Speaker 3: of names giving numbers. We're learning a lot about the

823
00:41:56,920 --> 00:41:59,440
Speaker 3: world of technology. Recap it on the podcast. You know

824
00:41:59,440 --> 00:42:01,839
Speaker 3: where to find it on the Bloomberg terminal, as well

825
00:42:01,840 --> 00:42:06,200
Speaker 3: as online on Apple, Spotify and iHeart from San Francisco and.

826
00:42:06,280 --> 00:42:08,879
Speaker 2: New York City. This is Bloomberg Tech.