WEBVTT - Tesla’s Sales Fall but Investor Support Stays Strong 0:00:04.120 --> 0:00:08.480 Bloomberg Tech is alive from coast to coast, with Caroline 0:00:08.560 --> 0:00:15.560 Hide in New York and ever though in San Francisco, this. 0:00:15.600 --> 0:00:16.920 Is Bloomberg Tech coming up. 0:00:16.960 --> 0:00:19.920 Tesla's global sales drop in the second quarter, but shares 0:00:19.960 --> 0:00:22.799 pop his investors look to a robotaxi future. 0:00:23.960 --> 0:00:27.360 Plus, fox Conn asks hundreds of Chinese engineers to return 0:00:27.400 --> 0:00:30.480 home from its iPhone factories in India, a blow to 0:00:30.480 --> 0:00:32.200 Apple's manufacturing push in the country. 0:00:33.120 --> 0:00:36.880 A Microsoft to slash another nine thousand staff to streamline 0:00:36.920 --> 0:00:40.080 its teams. It's the second major wave of layoffs this year. 0:00:41.720 --> 0:00:44.040 But first we check in on these markets, which the 0:00:44.159 --> 0:00:46.000 equity benchmark in tech. 0:00:46.040 --> 0:00:48.680 Then as that one hundred shun it really does manage to. 0:00:48.680 --> 0:00:50.400 Shrug off the cell off we see in the bond 0:00:50.440 --> 0:00:53.440 market right here, right now, up five ten percent the 0:00:53.560 --> 0:00:56.640 data coming in on US jobs week, But does that 0:00:56.760 --> 0:00:59.560 mean that we could see yet further fed stimulus baked 0:00:59.600 --> 0:01:02.640 back in this market? We're up sixteen percent as technique 0:01:02.640 --> 0:01:05.520 to the charge today ed, let's get. 0:01:05.440 --> 0:01:08.000 Right to Tesla shares up almost four percent off session 0:01:08.080 --> 0:01:11.200 highs three hundred and eighty four thousand, one hundred and 0:01:11.200 --> 0:01:15.679 twenty two vehicles delivered by Tesla in the second quarter. Now, 0:01:15.720 --> 0:01:20.240 technically that came in below consensus, Caroline, However, we did 0:01:20.280 --> 0:01:22.920 see expectations get reset in recent days. 0:01:22.959 --> 0:01:24.880 Maybe this came in above. 0:01:24.760 --> 0:01:28.480 The lowest level of expectations. It does leave Tesla with 0:01:28.520 --> 0:01:31.840 some work to do in calendar twenty five if it 0:01:31.880 --> 0:01:35.400 wants to catch up and have some growth in the year. 0:01:35.520 --> 0:01:36.200 Let's get to it. 0:01:37.480 --> 0:01:40.800 Yeah, let's do that with being most Craigshell Craig, just 0:01:40.920 --> 0:01:43.480 how big a hole does Tesla have to climb itself 0:01:43.520 --> 0:01:47.039 out of to post any sort of growth for twenty 0:01:47.120 --> 0:01:47.720 twenty five. 0:01:49.320 --> 0:01:52.160 It's a big number of about one hundred and ten thousand vehicles, 0:01:52.240 --> 0:01:57.520 which for a company of Tesla's size is pretty substantial. This, 0:01:57.880 --> 0:02:01.680 this is a pret remarkable move for the shares, just 0:02:01.800 --> 0:02:06.160 considering you know, how how low the consensus you know, 0:02:06.320 --> 0:02:10.440 estimate for this company is. It's come down really substantially 0:02:10.520 --> 0:02:12.840 over over those even just in the last few weeks. 0:02:13.360 --> 0:02:15.639 Uh and and just you know, sort of how this 0:02:15.680 --> 0:02:19.160 company has been viewed right as one where you know, 0:02:19.560 --> 0:02:22.200 it was counted on for so long as as a 0:02:22.240 --> 0:02:25.680 growth company, and we've sort of, you know, slowly but 0:02:25.760 --> 0:02:30.520 surely very much reset And yet the investor, you know, 0:02:30.680 --> 0:02:35.400 bases is willing to stick with this valuation that is 0:02:35.400 --> 0:02:38.919 is pretty rich relative not only to other car companies, 0:02:38.960 --> 0:02:41.160 but even you know, big tech tech peers. 0:02:42.080 --> 0:02:46.480 So this is global deliveries data. It doesn't distinguish by geography. 0:02:46.720 --> 0:02:49.520 It does break out by model line, and of course 0:02:49.800 --> 0:02:53.080 Model Y and Model three make up the bulk of 0:02:53.120 --> 0:02:56.520 those deliveries. That said Craig, we did get data out 0:02:56.520 --> 0:02:58.760 of China for the month of June overnight from the 0:02:58.880 --> 0:03:02.959 Chinese consumer a passenger car association. Is there any read 0:03:02.960 --> 0:03:04.919 across that you can tell us about that market? 0:03:06.600 --> 0:03:10.040 I think it's maybe consistent with this hope if you're 0:03:10.040 --> 0:03:12.720 an investor, that maybe we've hit bottom right where we 0:03:12.800 --> 0:03:16.440 saw you know, every month leading up to June, you know, 0:03:16.560 --> 0:03:20.919 shipments out of Tesla's factory in Shanghai were down and 0:03:21.160 --> 0:03:24.000 to have you know, just the slightest bit of an 0:03:24.000 --> 0:03:27.480 increase in June, less than one percent, but still you know, 0:03:27.639 --> 0:03:29.600 in the green instead of in the red. You know, 0:03:29.680 --> 0:03:32.040 you count that as a win and maybe hope that 0:03:32.120 --> 0:03:35.400 this is a matter of a turning point. And we've also, 0:03:35.480 --> 0:03:37.960 of course, you know, seen just in the last few 0:03:38.000 --> 0:03:41.160 days ed you've reported along with some of our colleagues 0:03:41.200 --> 0:03:43.440 that there's been a change in management, right, and so 0:03:43.560 --> 0:03:47.760 perhaps there's a sort of you know, bet that the 0:03:48.240 --> 0:03:51.040 sort of bottom has been set here. Musk Is is 0:03:51.080 --> 0:03:54.600 going to take control of sales in US and Europe, 0:03:54.880 --> 0:03:58.000 and maybe that marks a sort of change in the trend. 0:03:58.800 --> 0:04:01.640 Okay, Bloombeck's create who leads our global coverage of the 0:04:01.640 --> 0:04:03.920 auto industry out of London. Thank you so much. Let's 0:04:03.920 --> 0:04:06.640 get the investor take on Testa sales data and bringing 0:04:06.720 --> 0:04:09.680 Gene Monster, managing partner and co founder a deep water 0:04:09.760 --> 0:04:12.560 asset management. So we're in this situation, Jane, and you've 0:04:12.560 --> 0:04:14.960 written about this a lot right where we almost just 0:04:15.000 --> 0:04:19.479 look past the quarterly delivery data if you hold the 0:04:19.480 --> 0:04:23.680 bullish fesis that long term, it's a world where Tesla 0:04:23.720 --> 0:04:28.440 operates a proprietary robotaxi ride hailing service. Take that and 0:04:28.520 --> 0:04:30.400 interpret the data of this morning, please. 0:04:32.240 --> 0:04:34.719 So I think Craig really summed it up about this 0:04:34.880 --> 0:04:37.720 shift in investor's psychology and it impacts how we think 0:04:37.760 --> 0:04:41.440 about the delivery numbers today. So if we rewind four 0:04:41.560 --> 0:04:45.160 years ago, the expectation was about twenty thirty Tesla would 0:04:45.160 --> 0:04:48.840 be producing about ten million vehicles per year. They're going 0:04:48.880 --> 0:04:51.880 to do about one point seven million this year, and 0:04:52.080 --> 0:04:54.919 those expectations now are that they're probably going to do 0:04:55.160 --> 0:04:58.560 somewhere between two or three million. And I think that 0:04:58.600 --> 0:05:03.000 the consensus numbers today at the core of what's important 0:05:03.279 --> 0:05:06.360 is that if they can just stick around like two 0:05:06.400 --> 0:05:09.960 million deliveries a year, that would be about ten x 0:05:10.040 --> 0:05:12.920 more deliveries than what weimo is going to be putting 0:05:13.000 --> 0:05:16.200 on the road for their autonomy. And so this is 0:05:16.640 --> 0:05:18.760 not all those of course, two million will go into 0:05:18.800 --> 0:05:22.400 a robotaxi fleet, but all of those whill have opportunities 0:05:22.440 --> 0:05:25.440 for Tesla to sell this very high margin full self 0:05:25.520 --> 0:05:28.279 driving software, whether it's through a one hundred dollars description 0:05:28.360 --> 0:05:31.320 a month or through eight thousand dollars up front. And 0:05:31.400 --> 0:05:34.760 so ed I think that the context around delivery, of course, 0:05:34.880 --> 0:05:38.279 is in relation to what's going on in autonomy. I 0:05:38.360 --> 0:05:40.440 do that is the bigger story. You've done a great 0:05:40.520 --> 0:05:42.200 job of framing that in today. Do you just want 0:05:42.240 --> 0:05:45.120 to make a couple points that are important because investors 0:05:45.160 --> 0:05:48.520 do still care about deliveries. A couple important points. First, 0:05:48.800 --> 0:05:51.360 as Craig talked about, we're at the bottom here down 0:05:51.400 --> 0:05:54.840 fourteen percent deliveries, it's going to be down ten probably 0:05:54.920 --> 0:05:58.440 flatish in the December quarter. Something else is that the 0:05:58.520 --> 0:06:02.080 sunsetting of these tax it's going to boost the deliveries. 0:06:02.120 --> 0:06:05.000 I think that they could could surprise to the upside. 0:06:05.440 --> 0:06:08.440 Based on my sensitivity, they probably can be up three 0:06:08.600 --> 0:06:12.760 percent in December. The street kind of a flatish, But 0:06:13.000 --> 0:06:16.039 any of that good news of this pull forward because 0:06:16.080 --> 0:06:19.240 of the sunsetting, the US tax credit will probably be 0:06:19.279 --> 0:06:22.760 dismissed by investors. And when you put all this together, 0:06:23.040 --> 0:06:25.440 there's just a lot of noise around the delivery number. 0:06:25.520 --> 0:06:28.960 And what's most important is what happens in the weeks 0:06:29.000 --> 0:06:31.680 ahead in terms of Austin and going to another city 0:06:31.839 --> 0:06:35.000 like that is really what this The investment case around 0:06:35.040 --> 0:06:36.240 Tesla has boiled down to. 0:06:37.240 --> 0:06:40.320 But Gene the cash cow, the money that's funded all 0:06:40.360 --> 0:06:43.520 of the focus on AI and what progresses robotaxi and 0:06:43.560 --> 0:06:47.400 autonomous has been the ability to sell cars is two million. 0:06:47.440 --> 0:06:51.200 Therefore enough from your perspective going forward to finance this 0:06:51.480 --> 0:06:54.440 and could it not be eroded yet further if there's 0:06:54.520 --> 0:06:56.360 more withering of brand elon. 0:06:57.680 --> 0:07:00.840 So right now they have thirty seven billion in cash 0:07:01.240 --> 0:07:05.000 and equivalents and if they do one point six to 0:07:05.080 --> 0:07:08.839 one point seven million cars, they're probably going to burn 0:07:08.920 --> 0:07:12.800 and continue to invest in autonomy, invest in new production 0:07:12.880 --> 0:07:15.800 of a lower, more affordable vehicle. They're probably going to 0:07:15.880 --> 0:07:19.400 end the year somewhere between thirty three and thirty five billion, 0:07:19.440 --> 0:07:21.760 this kind of ending. When I say ending the year, 0:07:21.920 --> 0:07:24.080 I mean ending the next four quarters. Over the next 0:07:24.120 --> 0:07:27.120 four quarters, so you're going to see this decline. So, Caroline, 0:07:27.120 --> 0:07:29.360 answer your question is that they've got a ton of 0:07:29.400 --> 0:07:35.800 cash and they can weather essentially these lower unit numbers, 0:07:36.240 --> 0:07:39.200 and so I think at the core this is a 0:07:39.400 --> 0:07:42.240 very different story. Elin and the last call talked about 0:07:42.440 --> 0:07:45.080 the number of near death experiences the company has and 0:07:45.160 --> 0:07:46.920 that twenty twenty five is going to be a most 0:07:46.920 --> 0:07:49.520 difficult year and we're seeing that in these down fourteen 0:07:49.560 --> 0:07:52.800 percent numbers today. But he also mentioned that we're not 0:07:53.040 --> 0:07:55.000 we don't have this near death experience, and I think 0:07:55.000 --> 0:07:58.000 that that just simply puts back to the cash and 0:07:58.320 --> 0:08:03.000 another perspective around that cash and the tight spot, if 0:08:03.040 --> 0:08:05.360 you will, that Tesla is in right now, is that 0:08:05.400 --> 0:08:07.920 if you take a step back and say that the 0:08:07.960 --> 0:08:11.280 world is going to be autonomous, whether it's robotics, and 0:08:11.360 --> 0:08:14.400 factories or moving people around in vehicles. If you do 0:08:14.520 --> 0:08:17.880 take that approach, then these other competitors need to be 0:08:17.960 --> 0:08:20.480 making investments. And I think that that is one of 0:08:20.560 --> 0:08:23.480 the reasons why Tesla continues to have the support of 0:08:23.520 --> 0:08:26.680 investors is these investors look around to what else is 0:08:26.720 --> 0:08:30.080 out there, and really no one is doing anything besides 0:08:30.120 --> 0:08:32.040 Weimo and some of the things that are going on 0:08:32.120 --> 0:08:35.040 with BYD in China. And so the setup, even with 0:08:35.120 --> 0:08:39.000 a cash burn over the next four quarters, is still 0:08:39.120 --> 0:08:41.800 very favorable in terms of how this story ultimately plays 0:08:41.800 --> 0:08:42.480 out for Tesla. 0:08:43.720 --> 0:08:43.920 Gee. 0:08:43.920 --> 0:08:45.680 You know, I was spending a lot of time pouring 0:08:45.720 --> 0:08:49.880 over the China data overnight, the Chinese Passenger Car Association data. 0:08:50.320 --> 0:08:54.959 They don't distinguish between domestic sales and export, but there 0:08:55.000 --> 0:08:57.560 was a return to growth there while the market broadly 0:08:57.559 --> 0:08:58.640 across anyv grew. 0:08:59.040 --> 0:08:59.959 What did you get from that? 0:09:01.960 --> 0:09:04.000 Kind of a similar takeaway that Craig had is that 0:09:04.040 --> 0:09:06.800 any news is good news. And kind of keep in 0:09:06.840 --> 0:09:11.040 mind too, is that China is fiercely competitive. Bu Idea 0:09:11.040 --> 0:09:13.719 has made huge leaps forwards, and way we kind of 0:09:13.720 --> 0:09:17.240 play that forward is that a comparable Tesla in China 0:09:17.760 --> 0:09:20.560 costs about twenty to thirty percent more than a comparable 0:09:20.600 --> 0:09:23.240 BYD and that's a similar kind of a split as 0:09:23.320 --> 0:09:26.400 buid starts to roll more into Europe. And so when 0:09:26.480 --> 0:09:29.920 we look at these numbers, my sense is that, you know, 0:09:30.000 --> 0:09:33.520 anything around flatish, it feels like I'm cutting the company 0:09:33.559 --> 0:09:35.839 too much slack here. But the reality is is that 0:09:36.160 --> 0:09:38.439 if they can maintain kind of this flatish, I think 0:09:38.440 --> 0:09:39.120 that's a positive. 0:09:41.000 --> 0:09:43.760 Is it an overwhelming negative? 0:09:43.800 --> 0:09:44.079 Though? 0:09:44.480 --> 0:09:48.280 The arguments going on the feud that re erupted between 0:09:48.559 --> 0:09:51.319 Trump and Mask, how much is that an issue? 0:09:51.360 --> 0:09:51.920 Fugiene? 0:09:53.520 --> 0:09:55.760 Well, at the end of the day, what was missing 0:09:55.800 --> 0:09:58.600 from Trump's comments was, of course he came to after 0:09:58.640 --> 0:10:00.640 the tax credits, he came after what was going on 0:10:00.720 --> 0:10:05.080 with government spending and SpaceX. But what was notably missing 0:10:05.200 --> 0:10:07.600 was any commentary that he was going to slow down 0:10:07.679 --> 0:10:11.040 the adoption of autonomy. And I mean that, of course, 0:10:11.040 --> 0:10:12.679 this is what we're talking about. This is the most 0:10:12.720 --> 0:10:15.480 important piece. That's the one lever, that's the critical lever 0:10:15.840 --> 0:10:18.920 for a Tesla investor, very different for SpaceX, but for 0:10:18.920 --> 0:10:20.720 a Tesla investor that they have to look at is 0:10:20.760 --> 0:10:23.360 how is this pace of autonomy going to move? And 0:10:23.640 --> 0:10:25.960 I think One of the reasons why the White House 0:10:26.000 --> 0:10:29.120 did not why President Trump didn't mention that is that 0:10:29.240 --> 0:10:35.240 the concept of physical AI, specifically around robotaxis autonomous vehicles, 0:10:35.559 --> 0:10:38.320 is going to be a signature example of AI in 0:10:38.360 --> 0:10:41.079 the real world that as governments start to be more 0:10:41.120 --> 0:10:43.840 competitive around A I just imagine a world where we 0:10:43.960 --> 0:10:48.440 have robotaxis going wild from Bid and Baydu in China. 0:10:48.679 --> 0:10:51.400 They're also in Europe, and they're not available in the US. 0:10:51.400 --> 0:10:52.760 I think that would be a bad look for the 0:10:52.800 --> 0:10:55.800 White House. And so when I think about this feud, 0:10:56.520 --> 0:10:59.600 I'm entertained by it. I think cooler heads will prevail. 0:11:00.080 --> 0:11:02.720 But most importantly, I think that what is going on 0:11:02.920 --> 0:11:06.520 around AI and physical AI and autonomy is so much 0:11:06.559 --> 0:11:09.559 bigger than any sort of high school feud between Eon 0:11:09.640 --> 0:11:10.160 and Trump. 0:11:17.040 --> 0:11:19.920 In a win for chip makers, President Trump's Big Beautiful 0:11:19.920 --> 0:11:22.920 Bill passed by the Senate would increase the investment tax 0:11:23.000 --> 0:11:26.880 credit for semiconducting manufacturers, rising to thirty five percent if 0:11:26.880 --> 0:11:29.800 they break new ground in plants before twenty twenty six. 0:11:30.000 --> 0:11:32.040 From more, we go out to DC and bloomberz kdie 0:11:32.040 --> 0:11:33.240 Lines Kelly, what do we. 0:11:33.200 --> 0:11:37.560 Know, Well, this is really just expanding an incentive that 0:11:37.600 --> 0:11:40.280 already exists thanks to the twenty twenty two Chips Act, 0:11:40.280 --> 0:11:44.040 which set this tax credit at twenty five percent. This legislation, though, 0:11:44.240 --> 0:11:47.320 assuming it passes, would lift that tax credit to thirty 0:11:47.360 --> 0:11:50.000 five percent. There is a time limit as to how 0:11:50.040 --> 0:11:53.240 long chip makers manufacturers will have to take advantage of this. 0:11:53.320 --> 0:11:55.040 You have to break ground on new plants in the 0:11:55.120 --> 0:11:57.560 United States by twenty twenty six, so it is a 0:11:57.559 --> 0:12:00.560 limited window here. But what is not limited is actually 0:12:00.559 --> 0:12:02.800 the incentive itself. There is no cap on it, so 0:12:02.840 --> 0:12:06.880 this very well account for the greatest share of incentives 0:12:06.880 --> 0:12:10.000 that any of these individual companies will benefit from. This 0:12:10.040 --> 0:12:11.760 is one area in which you are seeing a win 0:12:11.880 --> 0:12:14.600 for some technology companies, while other tech companies, of course, 0:12:14.600 --> 0:12:17.600 are not getting necessarily what they wanted out of this legislation, 0:12:17.679 --> 0:12:20.920 specifically those that operate in the AI space. After the 0:12:20.920 --> 0:12:23.840 provision that would have put a moratorium on state regulation 0:12:23.960 --> 0:12:25.800 of AI was shot down in the Senate through an 0:12:25.800 --> 0:12:29.400 amendment that passed ninety nine to one. All of that said, 0:12:29.480 --> 0:12:32.600 this incentive or any other elements of this legislation are 0:12:32.640 --> 0:12:34.640 not law yet. Even though it did pass the Senate, 0:12:34.679 --> 0:12:36.560 it still has to pass the House. We're going to 0:12:36.559 --> 0:12:38.520 get the first test of whether or not that can 0:12:38.559 --> 0:12:41.160 really happen later on today when a procedural vote the 0:12:41.160 --> 0:12:44.199 so called rule will be brought to the floor. Unclear 0:12:44.320 --> 0:12:46.200 at this time whether or not the rule can pass, 0:12:46.240 --> 0:12:48.960 paving the way to final passage of the legislation. House 0:12:49.000 --> 0:12:52.160 Freedom CACUS members right now are signaling they are not supportive, 0:12:52.280 --> 0:12:54.400 but their meeting with President Trump today after meeting with 0:12:54.440 --> 0:12:57.599 the Speaker Mike Johnson earlier this morning, so they'll be 0:12:57.640 --> 0:12:59.640 trying to convince those holdouts to vote, and that's something 0:12:59.640 --> 0:13:00.880 will be one throughout the. 0:13:00.920 --> 0:13:04.240 Day, and Trump's focus is to get this done before 0:13:04.280 --> 0:13:08.959 Independence Day July fourth, Kylee, Is there any contention over 0:13:09.000 --> 0:13:11.520 the tech elements of it from lawmakers. 0:13:11.040 --> 0:13:11.480 In the House? 0:13:12.640 --> 0:13:15.680 Well, there was plenty of contention over the AI measure specifically, 0:13:15.679 --> 0:13:18.200 though that was passed in the House legislation. It was 0:13:18.240 --> 0:13:19.719 more of a problem in the Senate where it was 0:13:19.760 --> 0:13:21.679 stripped out. It's not clear whether or not that's going 0:13:21.720 --> 0:13:24.000 to be a deal breaker for any House lawmaker that 0:13:24.120 --> 0:13:26.839 wanted to have that state moratorium in there, but by 0:13:26.920 --> 0:13:29.080 and large, the prevailing issues that the holdouts have with 0:13:29.120 --> 0:13:32.080 this legislation at this point is simply just the cost 0:13:32.120 --> 0:13:34.520 that there's fiscal conservatives who are concerned that the Senate 0:13:34.520 --> 0:13:37.040 pass version of this bill adds even more to the 0:13:37.040 --> 0:13:40.360 deficit and is not fiscally responsible and doesn't cut enough spending. 0:13:40.400 --> 0:13:42.280 And it's on those grounds that they're saying, at least 0:13:42.280 --> 0:13:44.839 for right now, they're not in favor of this. 0:13:44.840 --> 0:13:45.680 Piece of legislation. 0:13:47.280 --> 0:13:50.640 Echoing one nail Musket feels like Bloomby's Kaylee lines, Thanks 0:13:50.679 --> 0:13:54.079 so much. Turning to Apple now, the company was dealt 0:13:54.120 --> 0:13:56.559 a blow from supply of fox Cone after it asked 0:13:56.679 --> 0:13:59.520 hundreds of its Chinese staff to return home from its 0:13:59.559 --> 0:14:02.600 iPhone trees in India. This is according to people familiar Now. 0:14:02.679 --> 0:14:05.240 No reason for the decision was given, but the move 0:14:05.320 --> 0:14:09.120 comes in growing tensions between Beijing and India's efforts to 0:14:09.200 --> 0:14:11.040 any curb tech exports. 0:14:11.120 --> 0:14:13.600 Right now for more opening buds woman joins us. 0:14:13.760 --> 0:14:17.520 So, basically, China has seen the fact that manufacturing has 0:14:17.559 --> 0:14:22.840 been moving outside of China into perhaps Vietnamal indeed India, 0:14:23.160 --> 0:14:24.640 and they seem to be trying to curtail it. 0:14:25.520 --> 0:14:32.040 Yes, absolutely so, this move would bring back specialized workers, 0:14:32.680 --> 0:14:37.440 which is really one of fox CON's advantages and China's 0:14:37.480 --> 0:14:41.640 advantages in being able to produce certain devices that are 0:14:41.800 --> 0:14:46.280 key to global markets, including of course, Apple's iPhones. Tim 0:14:46.280 --> 0:14:50.240 Cook has said that the reasons for producing iPhones in 0:14:50.360 --> 0:14:53.440 China come down not just to reductions and costs, but 0:14:53.520 --> 0:14:57.360 also the company specialized labor and specialized equipment that resides 0:14:57.360 --> 0:14:59.040 in the country. 0:15:00.000 --> 0:15:02.920 So our sourcing and our reporting told us about the 0:15:02.920 --> 0:15:05.600 impact of the assembly lines in India and the iPhones 0:15:05.600 --> 0:15:07.120 that are actually made in that market. 0:15:08.200 --> 0:15:08.800 Great question. 0:15:08.920 --> 0:15:13.480 So our reporting, to be clear, doesn't say that production 0:15:13.520 --> 0:15:16.680 of iPhones in India will be impossible going forward. We 0:15:16.760 --> 0:15:20.760 are reporting also says that the quality of the output 0:15:20.840 --> 0:15:24.320 is not necessarily going to be affected, but the efficiency 0:15:24.360 --> 0:15:27.720 of the assembly line absolutely is likely to be infected, 0:15:27.800 --> 0:15:31.920 and that would have an impact on production costs and 0:15:32.040 --> 0:15:36.480 we would assume prices of the final product possibly, which 0:15:36.560 --> 0:15:40.040 is something that Bloomberg is reported on extensively already in 0:15:40.080 --> 0:15:42.240 the months of this trade war has been going on. 0:15:43.080 --> 0:15:46.280 Right, and those Chinese nationals there were also involved in 0:15:46.320 --> 0:15:47.440 the training of other staff. 0:15:47.440 --> 0:15:48.880 Bloombers Dane a Woolman. 0:15:55.760 --> 0:15:56.520 Perplexity. 0:15:57.240 --> 0:15:59.960 Could it be at the center of Apple's latest we've 0:16:00.080 --> 0:16:02.800 vamp at the tech Giant looks to use an outside 0:16:02.840 --> 0:16:05.480 AI model to revamp Siri. Bluemag has reported that Apple 0:16:05.600 --> 0:16:09.160 was eyeing a potential bid for Perplexity, acquiring AI talent 0:16:09.440 --> 0:16:14.000 tech potentially here to discuss Dmitri Shivlenko's Perplexity AI chief 0:16:14.040 --> 0:16:17.440 business officer, we go in straight to the chase. Dmitri 0:16:18.240 --> 0:16:22.240 has Apple been in touch about using your own general 0:16:22.280 --> 0:16:24.160 to AI products interweave within. 0:16:23.960 --> 0:16:27.760 SyRI So Perplexity. 0:16:27.800 --> 0:16:31.880 We're focused on building AI that is trustworthy and accurate, 0:16:32.400 --> 0:16:36.080 and it's no surprise that leading OEMs around the world 0:16:36.600 --> 0:16:39.160 want to make their products better, want to take advantage 0:16:39.160 --> 0:16:42.480 of all these new superpowers we have and have the 0:16:42.480 --> 0:16:45.800 most trustworthy accurate AI as part of their solution. 0:16:46.000 --> 0:16:47.680 And you know, I wouldn't be good at. 0:16:47.560 --> 0:16:52.240 My job if I went around talking about confidential partner conversations, 0:16:53.200 --> 0:16:56.880 but really excited to work closely with all kinds of OEMs, 0:16:57.840 --> 0:17:00.880 because trustworthy, accurate AI is going to be a critical 0:17:00.880 --> 0:17:03.800 substrate for how we get value out of our devices. 0:17:04.840 --> 0:17:07.560 So what's really interesting is what benchmarks you hold yourself 0:17:07.600 --> 0:17:10.840 to if it's all about trust and accuracy, or if 0:17:10.880 --> 0:17:12.159 it's about metrics. 0:17:11.760 --> 0:17:12.600 Such as numbers. 0:17:12.960 --> 0:17:15.639 We had of enjoying the Blueberg Tech Summit, but a 0:17:15.680 --> 0:17:18.000 month or so ago talking about how the user base 0:17:18.080 --> 0:17:20.639 in size has been increasing seven or eighteen million search 0:17:20.760 --> 0:17:22.720 queries in just the month of May. 0:17:23.080 --> 0:17:24.480 How are you getting onto hitting a billion. 0:17:27.960 --> 0:17:31.760 We're building a company that we aspire to make generational, 0:17:32.960 --> 0:17:35.800 and I think it's important to have the right structural 0:17:35.840 --> 0:17:43.360 incentives to earn users trust. Ultimately, the underlying foundation models 0:17:44.080 --> 0:17:48.080 are going to get smarter and more powerful. The scarce resource, 0:17:48.119 --> 0:17:50.440 the scarce asset, when you project out in the future, 0:17:50.600 --> 0:17:52.760 is going to be that trust. And so there's things 0:17:52.840 --> 0:17:57.440 we could actually do today to grow faster, monetize quicker 0:17:57.720 --> 0:17:59.280 that would actually potentially. 0:17:58.840 --> 0:17:59.720 Erode that trust. 0:18:00.040 --> 0:18:02.800 And so it's striking this right balance of playing the 0:18:02.840 --> 0:18:06.760 long game, earning that that that you know, ability to 0:18:06.840 --> 0:18:11.040 be trusted over many decades, while you know, really having 0:18:11.080 --> 0:18:13.240 our growth be driven by users. 0:18:13.280 --> 0:18:14.120 A lot of the product. 0:18:14.920 --> 0:18:17.800 Most people that use perplexity use it because somebody had 0:18:17.840 --> 0:18:21.320 told them they use perplexity, right and Dimitri. 0:18:21.080 --> 0:18:23.879 That's what I reflect on when I think about my interactions. 0:18:23.359 --> 0:18:25.480 With perplexity, if you call it a query or not, 0:18:26.200 --> 0:18:26.960 I kind. 0:18:26.800 --> 0:18:29.679 Of think about time spent in the context that like 0:18:30.000 --> 0:18:32.520 different to Google, I might make a query and stay 0:18:32.560 --> 0:18:35.000 with it over a number of days. Is that kind 0:18:35.040 --> 0:18:36.959 of data that you can share with us about how 0:18:37.000 --> 0:18:41.879 you see users behaving differently on perplexity? 0:18:42.000 --> 0:18:45.880 Yeah, I mean it's an interesting you know, we both 0:18:45.960 --> 0:18:49.080 save people a lot of time, right the time safe 0:18:49.119 --> 0:18:50.160 to get knowledge. 0:18:50.440 --> 0:18:51.440 But then once. 0:18:52.080 --> 0:18:57.399 You realize you can acquire knowledge so efficiently and so quickly, 0:18:57.560 --> 0:19:00.280 you want to learn more, right, And so our goal 0:19:00.320 --> 0:19:03.879 is not to like, you know, have you use perplexity 0:19:03.920 --> 0:19:07.000 more hours of the day. We want to empower users 0:19:07.040 --> 0:19:12.040 to tap into their curiosity and learn everything they possibly 0:19:12.200 --> 0:19:15.800 could want to learn. And so it is there's both 0:19:15.800 --> 0:19:19.720 an efficiency metric and then there's kind of expanding that curiosity. 0:19:20.600 --> 0:19:20.959 Dmitri. 0:19:21.040 --> 0:19:23.280 There are reports in May that you're raising more money 0:19:23.359 --> 0:19:26.160 at a higher evaluation that Excel the venture firm will 0:19:26.160 --> 0:19:26.520 be leading. 0:19:26.520 --> 0:19:27.840 What's the status of that? Please? 0:19:29.359 --> 0:19:31.640 Yeah, we're you know, I won't go get into any 0:19:31.760 --> 0:19:37.160 investment specifics, but it is something that makes my job 0:19:37.240 --> 0:19:41.119 easier is that vcs and investors tend to be some 0:19:41.160 --> 0:19:43.919 of the busiest people in the world, and many of 0:19:43.920 --> 0:19:47.320 them love using perplexity, and so oftentimes, you know, when 0:19:47.320 --> 0:19:50.920 we speak to investors. They know our product very well. 0:19:51.680 --> 0:19:54.920 We have a lot of passionate users, broadly in finance, 0:19:55.359 --> 0:19:59.600 because those are sectors where trustworthy, accurate AI. When you're 0:19:59.640 --> 0:20:03.200 making million dollars, ten million dollars, hundred million dollars, billion 0:20:03.240 --> 0:20:06.879 dollar decisions, that's where you really notice the difference of 0:20:06.920 --> 0:20:10.800 a more accurate answer engine, and so that that has 0:20:10.960 --> 0:20:17.119 made our ability to grow through capital, you know, more straightforward. 0:20:18.200 --> 0:20:21.560 It feels like vcs are desperate to give you money, 0:20:21.880 --> 0:20:23.840 but it also seems as though plenty of other. 0:20:23.640 --> 0:20:24.720 Big tech want to buy into you. 0:20:24.720 --> 0:20:27.119 There's been reports that Meta was trying to buy you, 0:20:27.200 --> 0:20:30.399 and indeed Apple you resolute or remaining. 0:20:30.040 --> 0:20:34.800 Independent or would you be bought at the right price. We, 0:20:35.000 --> 0:20:35.280 as I. 0:20:35.280 --> 0:20:38.520 Said, are building a generational company, so we think of 0:20:38.760 --> 0:20:43.040 the world through the lens of trillions, not billions. We 0:20:43.080 --> 0:20:47.120 also think there's incredible value in remaining independent because that's 0:20:47.640 --> 0:20:52.000 a key way to preserve that trust with our users, 0:20:52.440 --> 0:20:56.080 and so we have no plans to sell the company 0:20:56.080 --> 0:20:59.840 and are incredibly excited about, you know, remaining independent for decades. 0:20:59.840 --> 0:21:04.480 To Dmitriy ser Lenko, perplexed, it's great to have you 0:21:04.480 --> 0:21:05.440 here on Bloomberg Tech. 0:21:13.520 --> 0:21:16.520 Welcome back to Bloomberg Tech. Let's take a look at 0:21:16.560 --> 0:21:18.840 these markets as we see a rally and then as 0:21:18.880 --> 0:21:20.720