Speaker 1: Bloomberg Tech is alive from coast to coast, with Caroline
Speaker 1: Hide in New York and ever though in San Francisco, this.
Speaker 2: Is Bloomberg Tech coming up.
Speaker 3: Tesla's global sales drop in the second quarter, but shares
Speaker 3: pop his investors look to a robotaxi future.
Speaker 4: Plus, fox Conn asks hundreds of Chinese engineers to return
Speaker 4: home from its iPhone factories in India, a blow to
Speaker 4: Apple's manufacturing push in the country.
Speaker 3: A Microsoft to slash another nine thousand staff to streamline
Speaker 3: its teams. It's the second major wave of layoffs this year.
Speaker 4: But first we check in on these markets, which the
Speaker 4: equity benchmark in tech.
Speaker 5: Then as that one hundred shun it really does manage to.
Speaker 4: Shrug off the cell off we see in the bond
Speaker 4: market right here, right now, up five ten percent the
Speaker 4: data coming in on US jobs week, But does that
Speaker 4: mean that we could see yet further fed stimulus baked
Speaker 4: back in this market? We're up sixteen percent as technique
Speaker 4: to the charge today ed, let's get.
Speaker 3: Right to Tesla shares up almost four percent off session
Speaker 3: highs three hundred and eighty four thousand, one hundred and
Speaker 3: twenty two vehicles delivered by Tesla in the second quarter. Now,
Speaker 3: technically that came in below consensus, Caroline, However, we did
Speaker 3: see expectations get reset in recent days.
Speaker 2: Maybe this came in above.
Speaker 3: The lowest level of expectations. It does leave Tesla with
Speaker 3: some work to do in calendar twenty five if it
Speaker 3: wants to catch up and have some growth in the year.
Speaker 2: Let's get to it.
Speaker 4: Yeah, let's do that with being most Craigshell Craig, just
Speaker 4: how big a hole does Tesla have to climb itself
Speaker 4: out of to post any sort of growth for twenty
Speaker 4: twenty five.
Speaker 6: It's a big number of about one hundred and ten thousand vehicles,
Speaker 6: which for a company of Tesla's size is pretty substantial. This,
Speaker 6: this is a pret remarkable move for the shares, just
Speaker 6: considering you know, how how low the consensus you know,
Speaker 6: estimate for this company is. It's come down really substantially
Speaker 6: over over those even just in the last few weeks.
Speaker 6: Uh and and just you know, sort of how this
Speaker 6: company has been viewed right as one where you know,
Speaker 6: it was counted on for so long as as a
Speaker 6: growth company, and we've sort of, you know, slowly but
Speaker 6: surely very much reset And yet the investor, you know,
Speaker 6: bases is willing to stick with this valuation that is
Speaker 6: is pretty rich relative not only to other car companies,
Speaker 6: but even you know, big tech tech peers.
Speaker 3: So this is global deliveries data. It doesn't distinguish by geography.
Speaker 3: It does break out by model line, and of course
Speaker 3: Model Y and Model three make up the bulk of
Speaker 3: those deliveries. That said Craig, we did get data out
Speaker 3: of China for the month of June overnight from the
Speaker 3: Chinese consumer a passenger car association. Is there any read
Speaker 3: across that you can tell us about that market?
Speaker 6: I think it's maybe consistent with this hope if you're
Speaker 6: an investor, that maybe we've hit bottom right where we
Speaker 6: saw you know, every month leading up to June, you know,
Speaker 6: shipments out of Tesla's factory in Shanghai were down and
Speaker 6: to have you know, just the slightest bit of an
Speaker 6: increase in June, less than one percent, but still you know,
Speaker 6: in the green instead of in the red. You know,
Speaker 6: you count that as a win and maybe hope that
Speaker 6: this is a matter of a turning point. And we've also,
Speaker 6: of course, you know, seen just in the last few
Speaker 6: days ed you've reported along with some of our colleagues
Speaker 6: that there's been a change in management, right, and so
Speaker 6: perhaps there's a sort of you know, bet that the
Speaker 6: sort of bottom has been set here. Musk Is is
Speaker 6: going to take control of sales in US and Europe,
Speaker 6: and maybe that marks a sort of change in the trend.
Speaker 3: Okay, Bloombeck's create who leads our global coverage of the
Speaker 3: auto industry out of London. Thank you so much. Let's
Speaker 3: get the investor take on Testa sales data and bringing
Speaker 3: Gene Monster, managing partner and co founder a deep water
Speaker 3: asset management. So we're in this situation, Jane, and you've
Speaker 3: written about this a lot right where we almost just
Speaker 3: look past the quarterly delivery data if you hold the
Speaker 3: bullish fesis that long term, it's a world where Tesla
Speaker 3: operates a proprietary robotaxi ride hailing service. Take that and
Speaker 3: interpret the data of this morning, please.
Speaker 7: So I think Craig really summed it up about this
Speaker 7: shift in investor's psychology and it impacts how we think
Speaker 7: about the delivery numbers today. So if we rewind four
Speaker 7: years ago, the expectation was about twenty thirty Tesla would
Speaker 7: be producing about ten million vehicles per year. They're going
Speaker 7: to do about one point seven million this year, and
Speaker 7: those expectations now are that they're probably going to do
Speaker 7: somewhere between two or three million. And I think that
Speaker 7: the consensus numbers today at the core of what's important
Speaker 7: is that if they can just stick around like two
Speaker 7: million deliveries a year, that would be about ten x
Speaker 7: more deliveries than what weimo is going to be putting
Speaker 7: on the road for their autonomy. And so this is
Speaker 7: not all those of course, two million will go into
Speaker 7: a robotaxi fleet, but all of those whill have opportunities
Speaker 7: for Tesla to sell this very high margin full self
Speaker 7: driving software, whether it's through a one hundred dollars description
Speaker 7: a month or through eight thousand dollars up front. And
Speaker 7: so ed I think that the context around delivery, of course,
Speaker 7: is in relation to what's going on in autonomy. I
Speaker 7: do that is the bigger story. You've done a great
Speaker 7: job of framing that in today. Do you just want
Speaker 7: to make a couple points that are important because investors
Speaker 7: do still care about deliveries. A couple important points. First,
Speaker 7: as Craig talked about, we're at the bottom here down
Speaker 7: fourteen percent deliveries, it's going to be down ten probably
Speaker 7: flatish in the December quarter. Something else is that the
Speaker 7: sunsetting of these tax it's going to boost the deliveries.
Speaker 7: I think that they could could surprise to the upside.
Speaker 7: Based on my sensitivity, they probably can be up three
Speaker 7: percent in December. The street kind of a flatish, But
Speaker 7: any of that good news of this pull forward because
Speaker 7: of the sunsetting, the US tax credit will probably be
Speaker 7: dismissed by investors. And when you put all this together,
Speaker 7: there's just a lot of noise around the delivery number.
Speaker 7: And what's most important is what happens in the weeks
Speaker 7: ahead in terms of Austin and going to another city
Speaker 7: like that is really what this The investment case around
Speaker 7: Tesla has boiled down to.
Speaker 4: But Gene the cash cow, the money that's funded all
Speaker 4: of the focus on AI and what progresses robotaxi and
Speaker 4: autonomous has been the ability to sell cars is two million.
Speaker 4: Therefore enough from your perspective going forward to finance this
Speaker 4: and could it not be eroded yet further if there's
Speaker 4: more withering of brand elon.
Speaker 7: So right now they have thirty seven billion in cash
Speaker 7: and equivalents and if they do one point six to
Speaker 7: one point seven million cars, they're probably going to burn
Speaker 7: and continue to invest in autonomy, invest in new production
Speaker 7: of a lower, more affordable vehicle. They're probably going to
Speaker 7: end the year somewhere between thirty three and thirty five billion,
Speaker 7: this kind of ending. When I say ending the year,
Speaker 7: I mean ending the next four quarters. Over the next
Speaker 7: four quarters, so you're going to see this decline. So, Caroline,
Speaker 7: answer your question is that they've got a ton of
Speaker 7: cash and they can weather essentially these lower unit numbers,
Speaker 7: and so I think at the core this is a
Speaker 7: very different story. Elin and the last call talked about
Speaker 7: the number of near death experiences the company has and
Speaker 7: that twenty twenty five is going to be a most
Speaker 7: difficult year and we're seeing that in these down fourteen
Speaker 7: percent numbers today. But he also mentioned that we're not
Speaker 7: we don't have this near death experience, and I think
Speaker 7: that that just simply puts back to the cash and
Speaker 7: another perspective around that cash and the tight spot, if
Speaker 7: you will, that Tesla is in right now, is that
Speaker 7: if you take a step back and say that the
Speaker 7: world is going to be autonomous, whether it's robotics, and
Speaker 7: factories or moving people around in vehicles. If you do
Speaker 7: take that approach, then these other competitors need to be
Speaker 7: making investments. And I think that that is one of
Speaker 7: the reasons why Tesla continues to have the support of
Speaker 7: investors is these investors look around to what else is
Speaker 7: out there, and really no one is doing anything besides
Speaker 7: Weimo and some of the things that are going on
Speaker 7: with BYD in China. And so the setup, even with
Speaker 7: a cash burn over the next four quarters, is still
Speaker 7: very favorable in terms of how this story ultimately plays
Speaker 7: out for Tesla.
Speaker 2: Gee.
Speaker 3: You know, I was spending a lot of time pouring
Speaker 3: over the China data overnight, the Chinese Passenger Car Association data.
Speaker 3: They don't distinguish between domestic sales and export, but there
Speaker 3: was a return to growth there while the market broadly
Speaker 3: across anyv grew.
Speaker 2: What did you get from that?
Speaker 7: Kind of a similar takeaway that Craig had is that
Speaker 7: any news is good news. And kind of keep in
Speaker 7: mind too, is that China is fiercely competitive. Bu Idea
Speaker 7: has made huge leaps forwards, and way we kind of
Speaker 7: play that forward is that a comparable Tesla in China
Speaker 7: costs about twenty to thirty percent more than a comparable
Speaker 7: BYD and that's a similar kind of a split as
Speaker 7: buid starts to roll more into Europe. And so when
Speaker 7: we look at these numbers, my sense is that, you know,
Speaker 7: anything around flatish, it feels like I'm cutting the company
Speaker 7: too much slack here. But the reality is is that
Speaker 7: if they can maintain kind of this flatish, I think
Speaker 7: that's a positive.
Speaker 4: Is it an overwhelming negative?
Speaker 8: Though?
Speaker 4: The arguments going on the feud that re erupted between
Speaker 4: Trump and Mask, how much is that an issue?
Speaker 5: Fugiene?
Speaker 7: Well, at the end of the day, what was missing
Speaker 7: from Trump's comments was, of course he came to after
Speaker 7: the tax credits, he came after what was going on
Speaker 7: with government spending and SpaceX. But what was notably missing
Speaker 7: was any commentary that he was going to slow down
Speaker 7: the adoption of autonomy. And I mean that, of course,
Speaker 7: this is what we're talking about. This is the most
Speaker 7: important piece. That's the one lever, that's the critical lever
Speaker 7: for a Tesla investor, very different for SpaceX, but for
Speaker 7: a Tesla investor that they have to look at is
Speaker 7: how is this pace of autonomy going to move? And
Speaker 7: I think One of the reasons why the White House
Speaker 7: did not why President Trump didn't mention that is that
Speaker 7: the concept of physical AI, specifically around robotaxis autonomous vehicles,
Speaker 7: is going to be a signature example of AI in
Speaker 7: the real world that as governments start to be more
Speaker 7: competitive around A I just imagine a world where we
Speaker 7: have robotaxis going wild from Bid and Baydu in China.
Speaker 7: They're also in Europe, and they're not available in the US.
Speaker 7: I think that would be a bad look for the
Speaker 7: White House. And so when I think about this feud,
Speaker 7: I'm entertained by it. I think cooler heads will prevail.
Speaker 7: But most importantly, I think that what is going on
Speaker 7: around AI and physical AI and autonomy is so much
Speaker 7: bigger than any sort of high school feud between Eon
Speaker 7: and Trump.
Speaker 3: In a win for chip makers, President Trump's Big Beautiful
Speaker 3: Bill passed by the Senate would increase the investment tax
Speaker 3: credit for semiconducting manufacturers, rising to thirty five percent if
Speaker 3: they break new ground in plants before twenty twenty six.
Speaker 3: From more, we go out to DC and bloomberz kdie
Speaker 3: Lines Kelly, what do we.
Speaker 9: Know, Well, this is really just expanding an incentive that
Speaker 9: already exists thanks to the twenty twenty two Chips Act,
Speaker 9: which set this tax credit at twenty five percent. This legislation, though,
Speaker 9: assuming it passes, would lift that tax credit to thirty
Speaker 9: five percent. There is a time limit as to how
Speaker 9: long chip makers manufacturers will have to take advantage of this.
Speaker 9: You have to break ground on new plants in the
Speaker 9: United States by twenty twenty six, so it is a
Speaker 9: limited window here. But what is not limited is actually
Speaker 9: the incentive itself. There is no cap on it, so
Speaker 9: this very well account for the greatest share of incentives
Speaker 9: that any of these individual companies will benefit from. This
Speaker 9: is one area in which you are seeing a win
Speaker 9: for some technology companies, while other tech companies, of course,
Speaker 9: are not getting necessarily what they wanted out of this legislation,
Speaker 9: specifically those that operate in the AI space. After the
Speaker 9: provision that would have put a moratorium on state regulation
Speaker 9: of AI was shot down in the Senate through an
Speaker 9: amendment that passed ninety nine to one. All of that said,
Speaker 9: this incentive or any other elements of this legislation are
Speaker 9: not law yet. Even though it did pass the Senate,
Speaker 9: it still has to pass the House. We're going to
Speaker 9: get the first test of whether or not that can
Speaker 9: really happen later on today when a procedural vote the
Speaker 9: so called rule will be brought to the floor. Unclear
Speaker 9: at this time whether or not the rule can pass,
Speaker 9: paving the way to final passage of the legislation. House
Speaker 9: Freedom CACUS members right now are signaling they are not supportive,
Speaker 9: but their meeting with President Trump today after meeting with
Speaker 9: the Speaker Mike Johnson earlier this morning, so they'll be
Speaker 9: trying to convince those holdouts to vote, and that's something
Speaker 9: will be one throughout the.
Speaker 4: Day, and Trump's focus is to get this done before
Speaker 4: Independence Day July fourth, Kylee, Is there any contention over
Speaker 4: the tech elements of it from lawmakers.
Speaker 5: In the House?
Speaker 9: Well, there was plenty of contention over the AI measure specifically,
Speaker 9: though that was passed in the House legislation. It was
Speaker 9: more of a problem in the Senate where it was
Speaker 9: stripped out. It's not clear whether or not that's going
Speaker 9: to be a deal breaker for any House lawmaker that
Speaker 9: wanted to have that state moratorium in there, but by
Speaker 9: and large, the prevailing issues that the holdouts have with
Speaker 9: this legislation at this point is simply just the cost
Speaker 9: that there's fiscal conservatives who are concerned that the Senate
Speaker 9: pass version of this bill adds even more to the
Speaker 9: deficit and is not fiscally responsible and doesn't cut enough spending.
Speaker 9: And it's on those grounds that they're saying, at least
Speaker 9: for right now, they're not in favor of this.
Speaker 5: Piece of legislation.
Speaker 4: Echoing one nail Musket feels like Bloomby's Kaylee lines, Thanks
Speaker 4: so much. Turning to Apple now, the company was dealt
Speaker 4: a blow from supply of fox Cone after it asked
Speaker 4: hundreds of its Chinese staff to return home from its
Speaker 4: iPhone trees in India. This is according to people familiar Now.
Speaker 4: No reason for the decision was given, but the move
Speaker 4: comes in growing tensions between Beijing and India's efforts to
Speaker 4: any curb tech exports.
Speaker 5: Right now for more opening buds woman joins us.
Speaker 4: So, basically, China has seen the fact that manufacturing has
Speaker 4: been moving outside of China into perhaps Vietnamal indeed India,
Speaker 4: and they seem to be trying to curtail it.
Speaker 10: Yes, absolutely so, this move would bring back specialized workers,
Speaker 10: which is really one of fox CON's advantages and China's
Speaker 10: advantages in being able to produce certain devices that are
Speaker 10: key to global markets, including of course, Apple's iPhones. Tim
Speaker 10: Cook has said that the reasons for producing iPhones in
Speaker 10: China come down not just to reductions and costs, but
Speaker 10: also the company specialized labor and specialized equipment that resides
Speaker 10: in the country.
Speaker 3: So our sourcing and our reporting told us about the
Speaker 3: impact of the assembly lines in India and the iPhones
Speaker 3: that are actually made in that market.
Speaker 2: Great question.
Speaker 10: So our reporting, to be clear, doesn't say that production
Speaker 10: of iPhones in India will be impossible going forward. We
Speaker 10: are reporting also says that the quality of the output
Speaker 10: is not necessarily going to be affected, but the efficiency
Speaker 10: of the assembly line absolutely is likely to be infected,
Speaker 10: and that would have an impact on production costs and
Speaker 10: we would assume prices of the final product possibly, which
Speaker 10: is something that Bloomberg is reported on extensively already in
Speaker 10: the months of this trade war has been going on.
Speaker 3: Right, and those Chinese nationals there were also involved in
Speaker 3: the training of other staff.
Speaker 2: Bloombers Dane a Woolman.
Speaker 5: Perplexity.
Speaker 4: Could it be at the center of Apple's latest we've
Speaker 4: vamp at the tech Giant looks to use an outside
Speaker 4: AI model to revamp Siri. Bluemag has reported that Apple
Speaker 4: was eyeing a potential bid for Perplexity, acquiring AI talent
Speaker 4: tech potentially here to discuss Dmitri Shivlenko's Perplexity AI chief
Speaker 4: business officer, we go in straight to the chase. Dmitri
Speaker 4: has Apple been in touch about using your own general
Speaker 4: to AI products interweave within.
Speaker 2: SyRI So Perplexity.
Speaker 8: We're focused on building AI that is trustworthy and accurate,
Speaker 8: and it's no surprise that leading OEMs around the world
Speaker 8: want to make their products better, want to take advantage
Speaker 8: of all these new superpowers we have and have the
Speaker 8: most trustworthy accurate AI as part of their solution.
Speaker 2: And you know, I wouldn't be good at.
Speaker 8: My job if I went around talking about confidential partner conversations,
Speaker 8: but really excited to work closely with all kinds of OEMs,
Speaker 8: because trustworthy, accurate AI is going to be a critical
Speaker 8: substrate for how we get value out of our devices.
Speaker 4: So what's really interesting is what benchmarks you hold yourself
Speaker 4: to if it's all about trust and accuracy, or if
Speaker 4: it's about metrics.
Speaker 5: Such as numbers.
Speaker 4: We had of enjoying the Blueberg Tech Summit, but a
Speaker 4: month or so ago talking about how the user base
Speaker 4: in size has been increasing seven or eighteen million search
Speaker 4: queries in just the month of May.
Speaker 5: How are you getting onto hitting a billion.
Speaker 8: We're building a company that we aspire to make generational,
Speaker 8: and I think it's important to have the right structural
Speaker 8: incentives to earn users trust. Ultimately, the underlying foundation models
Speaker 8: are going to get smarter and more powerful. The scarce resource,
Speaker 8: the scarce asset, when you project out in the future,
Speaker 8: is going to be that trust. And so there's things
Speaker 8: we could actually do today to grow faster, monetize quicker
Speaker 8: that would actually potentially.
Speaker 2: Erode that trust.
Speaker 8: And so it's striking this right balance of playing the
Speaker 8: long game, earning that that that you know, ability to
Speaker 8: be trusted over many decades, while you know, really having
Speaker 8: our growth be driven by users.
Speaker 2: A lot of the product.
Speaker 8: Most people that use perplexity use it because somebody had
Speaker 8: told them they use perplexity, right and Dimitri.
Speaker 3: That's what I reflect on when I think about my interactions.
Speaker 2: With perplexity, if you call it a query or not,
Speaker 2: I kind.
Speaker 3: Of think about time spent in the context that like
Speaker 3: different to Google, I might make a query and stay
Speaker 3: with it over a number of days. Is that kind
Speaker 3: of data that you can share with us about how
Speaker 3: you see users behaving differently on perplexity?
Speaker 8: Yeah, I mean it's an interesting you know, we both
Speaker 8: save people a lot of time, right the time safe
Speaker 8: to get knowledge.
Speaker 11: But then once.
Speaker 8: You realize you can acquire knowledge so efficiently and so quickly,
Speaker 8: you want to learn more, right, And so our goal
Speaker 8: is not to like, you know, have you use perplexity
Speaker 8: more hours of the day. We want to empower users
Speaker 8: to tap into their curiosity and learn everything they possibly
Speaker 8: could want to learn. And so it is there's both
Speaker 8: an efficiency metric and then there's kind of expanding that curiosity.
Speaker 2: Dmitri.
Speaker 3: There are reports in May that you're raising more money
Speaker 3: at a higher evaluation that Excel the venture firm will
Speaker 3: be leading.
Speaker 2: What's the status of that? Please?
Speaker 8: Yeah, we're you know, I won't go get into any
Speaker 8: investment specifics, but it is something that makes my job
Speaker 8: easier is that vcs and investors tend to be some
Speaker 8: of the busiest people in the world, and many of
Speaker 8: them love using perplexity, and so oftentimes, you know, when
Speaker 8: we speak to investors. They know our product very well.
Speaker 8: We have a lot of passionate users, broadly in finance,
Speaker 8: because those are sectors where trustworthy, accurate AI. When you're
Speaker 8: making million dollars, ten million dollars, hundred million dollars, billion
Speaker 8: dollar decisions, that's where you really notice the difference of
Speaker 8: a more accurate answer engine, and so that that has
Speaker 8: made our ability to grow through capital, you know, more straightforward.
Speaker 4: It feels like vcs are desperate to give you money,
Speaker 4: but it also seems as though plenty of other.
Speaker 5: Big tech want to buy into you.
Speaker 4: There's been reports that Meta was trying to buy you,
Speaker 4: and indeed Apple you resolute or remaining.
Speaker 5: Independent or would you be bought at the right price. We,
Speaker 5: as I.
Speaker 8: Said, are building a generational company, so we think of
Speaker 8: the world through the lens of trillions, not billions. We
Speaker 8: also think there's incredible value in remaining independent because that's
Speaker 8: a key way to preserve that trust with our users,
Speaker 8: and so we have no plans to sell the company
Speaker 8: and are incredibly excited about, you know, remaining independent for decades.
Speaker 3: To Dmitriy ser Lenko, perplexed, it's great to have you
Speaker 3: here on Bloomberg Tech.
Speaker 4: Welcome back to Bloomberg Tech. Let's take a look at
Speaker 4: these markets as we see a rally and then as
Speaker 4: that one hundred we have close to record his once
Speaker 4: again five ten percent on the upside, even though we
Speaker 4: see a worldwide bond market sell off. We see that
Speaker 4: data coming in from the United States in terms of jobs,
Speaker 4: maybe signaling tomorrow non varm payrolls will show us like
Speaker 4: weakening in the jobs data and could that mean the
Speaker 4: Fed doesn't decut.
Speaker 5: We move on to see what's happening underneath the hood.
Speaker 4: What leads inn Azzac higher is big names such as Nvidio,
Speaker 4: but also Apple at one point seven percent, shaking on
Speaker 4: anxiety that maybe Fox on its suppliers having to shift
Speaker 4: to engineers back to China from India. What does that
Speaker 4: mean for a supply chain? Tesla up four percent? Have
Speaker 4: we seen the worst in terms of sales declin's ed
Speaker 4: We saw those Q two numbers deliveries down thirteen percent,
Speaker 4: but the market that braced itself for worse.
Speaker 3: Okay, let's get back to our top story in Tesla,
Speaker 3: the EV maker is facing multiple headwinds, and its numbers
Speaker 3: tell us that story.
Speaker 2: Stephanie Valdez.
Speaker 3: Street is Director of Industry Insights at Cox Automotive. So
Speaker 3: three hundred and eighty four one hundred and twenty two
Speaker 3: vehicles in the second quarter. The thing about the data
Speaker 3: is it doesn't distinguish by geography, right, there is some
Speaker 3: monthly data from different jurisdictions around the world, but like,
Speaker 3: go under the hood of the data. What did you
Speaker 3: learn from the Prince Stephanie.
Speaker 12: Yeah, you know, I was thinking about we had our
Speaker 12: forecast call last last week, and we were forecasting that
Speaker 12: Tesla would have a.
Speaker 11: Twenty one percent year over year decline.
Speaker 12: So I think if you look at when the numbers
Speaker 12: start coming in, we'll probably see the numbers the next
Speaker 12: few days. I think the US we're probably going to
Speaker 12: see a larger decline year over year. And once again,
Speaker 12: you know, with Tesla, it's all about having the product, right,
Speaker 12: They've had no product other than the cybertruck, so they
Speaker 12: need a new product. And then just globally, just the
Speaker 12: competition from China, whether it's uid Ezeker shall Meet.
Speaker 11: There's lots of competition.
Speaker 12: And then as we all know, with the recent those participation,
Speaker 12: Elon has had some polarization both in Europe and the
Speaker 12: US markets.
Speaker 11: So I think.
Speaker 12: It's going to be critical for Tesla to rebrand themselves
Speaker 12: and really bring some new product. If they can get
Speaker 12: that affordable product launch, that could be a game changer
Speaker 12: for them.
Speaker 4: Can they rebrand themselves with Elon taking over control of
Speaker 4: even more so the US and European sales focus too?
Speaker 5: Is that the right sort of rebranding.
Speaker 12: Yes, I think it's gonna take a lot of work,
Speaker 12: right especially in the US, especially in certain parts of
Speaker 12: the country. In the US, I think it could be done,
Speaker 12: but it's gonna have to be very targeted, very strategic,
Speaker 12: and it has to be ongoing. It can't be a
Speaker 12: one time thing. But also I think it's all about product,
Speaker 12: right with you think about consumers. If you look at
Speaker 12: the US market, GM has been rolling out evs the
Speaker 12: last couple of years and they're right behind Tesla.
Speaker 11: Eating up market share.
Speaker 12: So I think it goes back to having kind of
Speaker 12: that whole strategy as a car company, right their car
Speaker 12: company trying to transition into an AI But.
Speaker 11: That car business is all about product and the right
Speaker 11: price and the right consumer experience.
Speaker 4: But that consumer experience, that product is technology.
Speaker 5: Technology at it's very hot Stephanie.
Speaker 4: If we think about how China looks as though it's stabilizing,
Speaker 4: many may be thinking that it's because of FSD. Actually
Speaker 4: the wins back some of the focus in China and
Speaker 4: competes against Shaomi with the latest SU seven and competes
Speaker 4: against E BYD.
Speaker 5: How important is FSD.
Speaker 12: I think it's critical, especially you think about as Tesla
Speaker 12: is trying to become this AI and with their recent
Speaker 12: rowotax unveiling and often it was small scale, but it
Speaker 12: was very important that they actually did launch when they
Speaker 12: said they were And I think it's going to be
Speaker 12: important for them to continue to scale. And I know
Speaker 12: there's a lot of safety concerns and some regulatory but
Speaker 12: I think it's going to be important for them to
Speaker 12: continue to innovate on their chips, on their dojo to
Speaker 12: really kind of create that competitive molt around AI.
Speaker 2: Stephanie.
Speaker 3: I use full self driving supervised every single day. I
Speaker 3: do about sixty miles a day. Tesla's approach is get
Speaker 3: in the car and try it, and then you'll see
Speaker 3: the future. Where Testera operates as a ride hailing company
Speaker 3: with robotaxis, is that sales pitch resonating the jump from
Speaker 3: a driver assistant tool to them becoming an uber type player.
Speaker 12: I think it's challenging, and you think about just kind
Speaker 12: of when they're a competition. You have Weimo, right, who
Speaker 12: has lots of lots of miles, and I think recently
Speaker 12: we just hit heard Jim Farley say that he thinks
Speaker 12: the Weimo approach is better.
Speaker 11: So I think Tesla has a lot more to prove.
Speaker 12: I think their approach can be effective if they're able
Speaker 12: to roll it out and get more miles and overcome
Speaker 12: some of the safety and regulatory concerns.
Speaker 3: The idea that Tesla's going to send sell ten million
Speaker 3: vehicles here by the end of the decade seems to
Speaker 3: have change now, right, But within the data there are
Speaker 3: signs that outside of.
Speaker 2: North American Europe they.
Speaker 3: Might be getting traction in new markets. Do you have
Speaker 3: any sense of what those new markets are.
Speaker 11: Yeah, I think they're looking at India.
Speaker 12: I think that's another market and some of more of
Speaker 12: these other South American countries.
Speaker 11: So I think that's going to be an opportunity for them.
Speaker 12: But to your point, it's going to be critical for
Speaker 12: them to look at other options because, as we know,
Speaker 12: China is getting to get to that overcapacity, and so
Speaker 12: they need to find locations to.
Speaker 11: Export their evs.
Speaker 12: And also, I think with some of the tariffs in
Speaker 12: place between US China, I think it's going to be
Speaker 12: important for them. And then also to continue to increase
Speaker 12: production in Berlin.
Speaker 11: I think that's a smart move as well. I will say, the.
Speaker 12: One thing, you know, we've talked about all the headwinds
Speaker 12: Tesla does have, you know, the advantage of having the
Speaker 12: vertical integration, and that's what really gives them up in some.
Speaker 11: Of the other US many factures.
Speaker 12: So that's one thing I want to just point out
Speaker 12: that's really something important to remember about Tesla.
Speaker 4: Stephanie Valdez Streat, director of Industry Insights, that Cox Automotive
Speaker 4: wonderful to have your insights. And look, let's return to
Speaker 4: the fact that amid the disappointing sales figures, the recent
Speaker 4: drop in share price too has been painful, but Tesla's
Speaker 4: market cap still dwarfs other automakers. Bloomberg editor in Chief
Speaker 4: emeritus and Bloomberg Opinion columnist Matt Winkler has been writing
Speaker 4: about this in his latest column. Basically, how difficult is
Speaker 4: it to remember what a juggernaut, what a success story
Speaker 4: Tesla is in the face of all the headwinds and
Speaker 4: news articles about Elon Musk right now, Matt.
Speaker 13: Pleasure to be with you, and you're quite right. Omitted
Speaker 13: from the prevailing narrative, including everything we just heard, is
Speaker 13: that Tesla still is the world's largest automaker. It's the
Speaker 13: ninth largest public company. It's worth more than the gross
Speaker 13: domestic product of Saudi Arabia, and the top ten automakers
Speaker 13: are just say, seventy five percent, seventy eight percent maybe
Speaker 13: of Tesla's market value, which is more than a trillion dollars.
Speaker 13: So that's a really important point to make, which is
Speaker 13: amid all of this doom mongering. Why is it that
Speaker 13: the people with the most at stake, who are the shareholders,
Speaker 13: somehow are missing from everybody's story, including this morning when
Speaker 13: the sales were first reported, people thought that was the lead.
Speaker 13: The sales are disappointing, and yet the share price is
Speaker 13: up the most since June. So what does this share
Speaker 13: price tell us? It tells us that Tesla is a
Speaker 13: lot more than it's vehicles. It is the autonomous driving,
Speaker 13: but it's so many more things other than that. It's robotics,
Speaker 13: it's a visionary who wants to get to Mars, and
Speaker 13: he's taking every thing he's got, which is artificial intelligence,
Speaker 13: and applying it to his products. And the shareholders see
Speaker 13: that because the shareholders are constantly looking at the future,
Speaker 13: not at the past. And one thing I would say
Speaker 13: about the vehicles. Everybody thinks there's a demand problem, but
Speaker 13: the Model Why was actually refurbished if you like this year,
Speaker 13: which counted for some of the production slippage. The sales
Speaker 13: are way up in Norway, they're way up in Spain,
Speaker 13: so the prevailing narrative really doesn't cut much there. And
Speaker 13: the Model Why We Forget was the best selling vehicle
Speaker 13: in twenty twenty three in the world, the best selling
Speaker 13: vehicle in twenty twenty four in the world, looks like
Speaker 13: it's going to be the best selling ed vehicle in
Speaker 13: twenty twenty five. So those are all things that are
Speaker 13: missing from the narrative that you've been sharing so far.
Speaker 3: Matt. You point out in your opinion piece that, by
Speaker 3: Tesla's own description, it's a full stack technology company. I've
Speaker 3: written a lot about that as well. And the most
Speaker 3: bullish names on the street on the cell side, their
Speaker 3: valuations are predicated on this vision of Robotaxi and Optimus.
Speaker 3: But in the here and now the sales are driven
Speaker 3: by the sale of cars to consumers. When does the
Speaker 3: inflection point come where revenues are derived largely from software?
Speaker 2: Well, I would a party right.
Speaker 13: Attention to the share price, because you know what motivated
Speaker 13: my colleague Chinpai and I to produce this piece is
Speaker 13: all through this year, headline after headline, story after story
Speaker 13: from everywhere was as we said, bad to worse, and
Speaker 13: yet through it all, everybody is omitting the great parenthetical clause,
Speaker 13: which is Tesla is still worth more than the ten competitors,
Speaker 13: biggest competitors combined. Why is it that Toyota's valuation is
Speaker 13: a fourth of what Tesla is? Why is the general
Speaker 13: motors which you referenced earlier in this program is just
Speaker 13: fifty billion dollars and Tesla's are trillion dollars. And the
Speaker 13: answer is there's a lot more to Tesla that people
Speaker 13: are not looking at, and the best place to go
Speaker 13: is the share price, because the share price tells you
Speaker 13: what the relative value of Tesla is.
Speaker 3: Every single day Bloomberg Opinions and Bloomberg's Editor in Chief
Speaker 3: Emeritus Matt Winkler.
Speaker 2: Great to have you back on the show. Thank you
Speaker 2: so much.
Speaker 3: This is Bloomberg Tech and you're looking at a live
Speaker 3: shot of the principal room. Check out the Bloomberg Tech podcast.
Speaker 3: You can buy it on the terminal as well as
Speaker 3: online on Apple, Spotify and iHeart.
Speaker 2: This is Bloomberg.
Speaker 3: Cloud based design platform Figma has filed to go public.
Speaker 3: It could be one of the year's biggest initial public offerings.
Speaker 3: I want to go right to Bloomberg's Katie Ruth. You've
Speaker 3: been tracking this one. Let's get into all the details,
Speaker 3: like what do we know about the ticker, where it
Speaker 3: will be listed, and just like me last night, I'm
Speaker 3: sure you pulled through the entire regulatory filing.
Speaker 2: What do we know?
Speaker 5: Sure?
Speaker 14: Yeah, So their ticker is fig fig. They're going to
Speaker 14: be on the New York Stock Exchange and sources tell
Speaker 14: me they're aiming to go to debut later this month.
Speaker 5: You know, this is a long time coming.
Speaker 14: They almost got bought by Adobe in twenty twenty two,
Speaker 14: and then that didn't happen, so they went theo IPO
Speaker 14: rout instead.
Speaker 4: And there is the context that they were almost bought
Speaker 4: by Adobe, but they managed to keep eye on the prize,
Speaker 4: keep growing the business independently. Where do we stand in
Speaker 4: terms of the growth of this company?
Speaker 14: Sure, and they recently turned a profit, so they have
Speaker 14: growing revenue and now profit. You know, I think they're
Speaker 14: trying to make themselves seem.
Speaker 5: Like they're AI related.
Speaker 14: They recently launched an AI related product. But you know,
Speaker 14: they have a lot of design clients and then they
Speaker 14: have a lot of non professional designers using their product,
Speaker 14: you know, a lot of them outside of the US,
Speaker 14: all around the world, and they're hoping, you know, that
Speaker 14: this will the IPO will continue to raise their profile
Speaker 14: with consumers.
Speaker 4: Most Katie roof all Things IPO for this summer, we
Speaker 4: appreciate it. Now from public markets to increasing investment on
Speaker 4: the private side.
Speaker 5: Menture firm AXL.
Speaker 4: Has led an unusually large Series A funding round for
Speaker 4: the startup Campfi, now the AI native enterprise software firm,
Speaker 4: recently close to thirty five million dollar financing round. Axcel
Speaker 4: partner Christine Esman is here with us to talk it through.
Speaker 4: This is largely I mean surprisingly large for a Series A,
Speaker 4: but I feel like our numbers have gone all out
Speaker 4: to whack the minute. General to AI came into the playbook. Christine,
Speaker 4: why have you backed campfi?
Speaker 11: Yeah, well thanks for having me.
Speaker 15: I'm so excited to tell you more about campfire, meetcamfire
Speaker 15: dot com. Campfire is an AI native ERP solution that
Speaker 15: replaces companies like net suite and quick Books. It's tackling
Speaker 15: the super large ERP markets, one of the largest markets
Speaker 15: in software with over a trillion dollars of market cap,
Speaker 15: and Campfires is coming to market with a really.
Speaker 3: Fresh approach to the uninitiated ERP enterprise resource planning, which,
Speaker 3: when you say it in full, is not as exciting.
Speaker 2: Why is it exciting, It's super excited.
Speaker 15: It's super exciting. I mean, think about the incumbents.
Speaker 5: In this space.
Speaker 15: You have companies like Oracle and into It and SAP
Speaker 15: that have dominated this category for decades. At this point,
Speaker 15: all of those companies were founded decades ago in the.
Speaker 11: Pre AI world.
Speaker 15: And when you're actually a user of these solutions, they
Speaker 15: take months to implement, they require consultants, and post implementation,
Speaker 15: they don't really deliver an enjoyable solution for any users who.
Speaker 11: Are using those solutions.
Speaker 15: And Campfires is taking just a really fresh approach. Maybe
Speaker 15: get a little bit more tangible. Think of you as
Speaker 15: a finance leader and you're trying to do something routine
Speaker 15: like forecast your cash in January, and that might require
Speaker 15: multiple people, manual data entry and all that. Using Campfire,
Speaker 15: you can flip this model on its head, and camp
Speaker 15: Fire enables the user to use natural language to just
Speaker 15: do this and automatically see the insights.
Speaker 3: Christine, the company itself and the people that company are
Speaker 3: super interesting right led by John Glasgow, And I was
Speaker 3: reading earlier in the Week that it's one of these
Speaker 3: companies that from inception moved very fast. You know, within
Speaker 3: nine months or so it had all of this business,
Speaker 3: and there's evidence that business is being one from some
Speaker 3: sort of more established scale players. Can you just give
Speaker 3: us some of the data behind what gave you the
Speaker 3: conviction to back them?
Speaker 2: Definitely.
Speaker 15: I mean, in less than two years, this company has
Speaker 15: shipped a fully functioning ERP solution, which is just nothing
Speaker 15: short of remarkable. They have over a dozen companies that
Speaker 15: have moved from Sweek completely, over one hundred that have
Speaker 15: moved from QuickBooks, and that's just absolutely exceptionable, exceptional for
Speaker 15: the stage.
Speaker 11: Of company that they're at. They're also supporting some pretty
Speaker 11: large companies.
Speaker 15: I mean Rutler is what example, They just announced that
Speaker 15: they crossed one hundred million of arr publicly and they're
Speaker 15: relying on campfires as their ERP.
Speaker 5: Can I switch to large companies?
Speaker 4: And actually, Christine, of course we know you for late
Speaker 4: stage investment as well as these mighty series A round.
Speaker 5: That you've just delivered to Campfire. We just had Perplexity on.
Speaker 4: We just had Dimitri from Perplexity on and I'm hearing
Speaker 4: we've all seen the reports that accels involved in a
Speaker 4: new funding round for the business.
Speaker 5: Can you talk about it as to whether you are
Speaker 5: looking at the business.
Speaker 15: Yeah, I won't comment on some of our unannounced investments,
Speaker 15: but I think as a firm, we're incredibly bullish on AI.
Speaker 15: We were the first investors in Scale AI, and obviously
Speaker 15: Alex Wing has had a lot of news recently and
Speaker 15: we think super highly of that company, and we can
Speaker 15: and you to think super highly of the future successive
Speaker 15: of Scale. We feel super fortunate to have invested in
Speaker 15: Perplexity in companies like Superbase and Graphite and Cursor and
Speaker 15: other AI companies that.
Speaker 11: Are really defining the next wave of technology.
Speaker 4: Talk to us though about these rather interesting aquahiers shall
Speaker 4: we call them, because we're seeing it time and time
Speaker 4: again in the Generator AI space. Is that a win
Speaker 4: for you when you see Scale AI lose its key founder,
Speaker 4: continuous different business, stripped of certain perhaps future business lines.
Speaker 4: Or is that given the scale of the investment that
Speaker 4: a Meta makes or that others have made in certain
Speaker 4: aquahis is that nothing but a good thing from your perspective?
Speaker 15: Yeah, Well, Meta made an investment in Scale and the
Speaker 15: company will remain independent and will continue to go on.
Speaker 15: They have incredible privacy regulations in place and a number
Speaker 15: of really phenomenal customers that will continue using Scale, and
Speaker 15: I'm just excited to see what the future has in
Speaker 15: store for Scale.
Speaker 3: Christine Estamon, Excel partner. It's great to have you here
Speaker 3: on Bloomberg Tech.
Speaker 2: Thank you very much.
Speaker 4: Warner Music it is launching a three hundred million dollar
Speaker 4: cost savings drive in order to free up funds for
Speaker 4: growth initiatives, and the plan will rezelt though in an
Speaker 4: unspecified number of job cuts, according to a regulatory filing. Now,
Speaker 4: the company says almost two thirds of the savings will
Speaker 4: be achieved through job cuts, with the rest coming from
Speaker 4: organizational changes and overhead savings.
Speaker 15: Ed.
Speaker 3: Microsoft has initiated its second major wave of job cuts
Speaker 3: this year, laying off about nine thousand workers.
Speaker 2: This is the company looks to raining costs.
Speaker 3: According to a spokesperson, less than four percent of the
Speaker 3: total workforce will be impacted. Bloomberg's Brody Ford joins us
Speaker 3: with the details. So second wave and the rational is
Speaker 3: also pretty clear. Get rid of middle layers of management,
Speaker 3: streamlined teams. Give us the size and scope.
Speaker 16: Size and scope is that you know, you here four
Speaker 16: three percent a couple months ago. It doesn't sound like
Speaker 16: that much, but with Microsoft, I mean these are huge
Speaker 16: numbers of employees. We have fifteen thousand people impacted across
Speaker 16: two waves, and there's been other little cuts in addition
Speaker 16: to that. And you know, folks might say Microsoft the
Speaker 16: world's most valuable company. A lot of days, ninety six
Speaker 16: billion in profit, Why are they doing all this? A
Speaker 16: lot of it's that AI spending. Right one day, you're
Speaker 16: spending eighty billion on AI data centers, and you want
Speaker 16: to keep your margins flat. In this case, that's led
Speaker 16: to some cut heads.
Speaker 4: And Brody the view has been, actually, the AI is
Speaker 4: getting so good that it means that they can start
Speaker 4: getting one of engineers AI is doing the job of them,
Speaker 4: But is that really where the cuts come from this
Speaker 4: time round.
Speaker 16: I haven't seen a ton of evidence that there's that
Speaker 16: kind of direct employee replacement, but I think companies certainly
Speaker 16: want to do it, right. I mean, a vendor like Microsoft,
Speaker 16: it is selling it software, telling people, hey, you can
Speaker 16: do more with less. I think we'd be naive to
Speaker 16: think they aren't also a to do that. Internally. We
Speaker 16: saw at the layoffs a couple of months ago disproportionately
Speaker 16: hit software engineers right, and.
Speaker 3: The Microsoft spokesperson told us that in this round it
Speaker 3: will be across teams and geographies, but we know from
Speaker 3: our reporting largely witch divisions.
Speaker 2: I'm thinking like Xbox sales and marketing.
Speaker 16: Correct sales and marketing are the really big ones right now,
Speaker 16: and that's because it's the end of the fiscal year
Speaker 16: and you generally don't want to fire salespeople the fourth
Speaker 16: quarter because you're not going to get the results you want.
Speaker 16: And so yeah, we're seeing cuts today that I have
Speaker 16: reason to believe our focus on those sales employees, but
Speaker 16: really cuts across the company, and I think it underscores
Speaker 16: the kind of new reality of the tech market that
Speaker 16: even if you are in one of the most successful companies,
Speaker 16: jobs aren't safe the way they used to be.
Speaker 4: Ready for telling it straight, We appreciate it.
Speaker 5: Thank you.
Speaker 4: Let's turn now to some of our other key top
Speaker 4: stories today, ed and we've been all over the moves
Speaker 4: when it comes to Apple potentially seeing those Chinese engineers
Speaker 4: that Fox gone and senter in having to go back home.
Speaker 4: What does that mean for the supply chain? But Tesla
Speaker 4: front and center. You're the man who helps break scoop
Speaker 4: after scoop, we're up four percent because well, the deliveries
Speaker 4: were bad, but not as bad as.
Speaker 3: We're expected, right, deliveries technically misconsensus estimates, but actually the
Speaker 3: sort of lowest range of the estimates that exceeded, you know,
Speaker 3: expectations really reset. But I think, as Gene Monster told
Speaker 3: us and Bloomberg Opinions Matt Winkler, look past the deliveries
Speaker 3: and think about Tesla as a technology company.
Speaker 4: I mean, while that's what we do right here, the technology,
Speaker 4: and that does it for this edition of Bloomberg Tech, so.
Speaker 2: Much to recap. Don't forget the podcast. You know where
Speaker 2: to find it. It's on the Bloomberg terminal.
Speaker 3: It's online, on apples, Spotify, and on iHeart from San
Speaker 3: Francisco and Caroline's out in London.
Speaker 2: This is Bloomberg tech.