Speaker 1: From Marhard where Innovation of Money and Power colle in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed.
Speaker 3: Ludlow live from New York and San Francisco. This is
Speaker 3: Bloomberg Technology coming up ASML shares sync further as its
Speaker 3: CEO addresses the chip equipment maker's shock booking slowdown.
Speaker 4: We speak to Donald Trump about the future of Google.
Speaker 4: Despite criticism, the former president says it's important to keep
Speaker 4: the company intact.
Speaker 3: Plus next generation nuclear More on Google and Amazon's.
Speaker 5: Latest investments in the carbon.
Speaker 3: Free tech crucial to their AI energy needs. But first
Speaker 3: we've got to go to the chip sector.
Speaker 6: Ed.
Speaker 4: Yeah, look downward pressure on semiconductor stocks and chip equipment makers.
Speaker 4: Glow blee has been a story for the past twenty
Speaker 4: four hours in Asia into the European session, and it
Speaker 4: now has continued in the United States. The Philadelphia semi
Speaker 4: Conductor Index is actually higher four tens to one percent,
Speaker 4: and actually it's those two names ASML. It's US traded shares,
Speaker 4: but also note that it's European trading shares are still
Speaker 4: under pressure, down five percent, continuing from the savage sell
Speaker 4: off of Monday of Tuesday. Sorry, Intel is interesting, right.
Speaker 4: Think about the story here ASML is a chip equipment
Speaker 4: maker who buys chip making equipment. Well, Intel has that
Speaker 4: foundry business, So on the socks, it makes a lot
Speaker 4: of sense that in the context of what we're worrying about,
Speaker 4: Intel might be lower. We need to understand what's happening here,
Speaker 4: So let's get more with Bloomberg's Chancock. Who's out for
Speaker 4: us in Amsterdam. Let's start with something and clear something up.
Speaker 4: They put their earnings out early. That confused everyone. The
Speaker 4: CEO had to address it on the investicle. What did
Speaker 4: he say?
Speaker 6: Yeah, so the results were scheduled for today, but the
Speaker 6: company published them early yes yesterday evening by mistake. They
Speaker 6: didn't say much, but they kind of blamed it on
Speaker 6: a technical error in a statement yesterday and today, the CEO,
Speaker 6: Christophe Fouquet, apologized in an analyst call about the results.
Speaker 6: He said, this was very unfortunate. They booked less than
Speaker 6: half of the orders that analysts estimated in the third quarter,
Speaker 6: and they also cut guidance for next year. So the
Speaker 6: results were an unpleasant surprise for analysts, and the market
Speaker 6: reaction was amplified by the company releasing the results a
Speaker 6: day earlier than scheduled.
Speaker 5: Look, they're still thinking.
Speaker 3: Even though the CEO has now spoken out, how did
Speaker 3: he explain the cut to guidance? The bookings dramatically under
Speaker 3: where analysts thought they would be.
Speaker 6: So yeah, any weakness in SML orders, as had mentioned earlier,
Speaker 6: often kind of signals struggles for the wider chip sector.
Speaker 6: They're the market leader for lithography machines in the world,
Speaker 6: so we can call it a bit of a chip
Speaker 6: bell weather. So SML is citing a few delays in
Speaker 6: chip plant constructions around the world as an explanation of
Speaker 6: why the results were so bad.
Speaker 7: Uh.
Speaker 6: They also see weakening growth in China for their older
Speaker 6: machines due to a combination of softening demand and the
Speaker 6: possibility of future export controls from Washington. So also keep
Speaker 6: in mind that Intel is you know, their biggest customer
Speaker 6: in the US, and it's cutting the expenses in a restructuring,
Speaker 6: uh restructuring push. So that's not helping the sentiment either.
Speaker 6: And then you have you know, delayed factories of Intel
Speaker 6: in Germany and Poland. While membership makers such as Samsung
Speaker 6: and s K Heinis are also being careful with their spending.
Speaker 6: Uh So, all of these spending cuts are affecting demand
Speaker 6: for soml's chip making machines.
Speaker 4: Okay, if you're just joining us here on Bloomberg Technology,
Speaker 4: the world's most important maker of the machines that make
Speaker 4: chips had really ugly earnings and an ugly guidance. And
Speaker 4: what Child was just explaining is kind of the backstory
Speaker 4: of earnings that came out early and were a surprise.
Speaker 4: You're looking at the two day chart. Sixteen percent decline
Speaker 4: in Amsterdam yesterday, five percent decline today, and that anxiety
Speaker 4: Caroline was around the world. Asian session, European session, and
Speaker 4: we've chilled out a bit in the US session. What
Speaker 4: we're worried about chan is the investment cycle. What did
Speaker 4: Airsmel tell us about their own investment plans?
Speaker 6: So, yeah, the big miss is obviously a signal that
Speaker 6: the chip industry's weakness is set to continue. They said
Speaker 6: well into twenty twenty five, and they did say that
Speaker 6: ASML will slow its short term investment plans to match
Speaker 6: the market in today's call. Yeah, so basically we can
Speaker 6: we can also say that really it's important to mention
Speaker 6: that the chip industry is experiencing some uneven times, right,
Speaker 6: like in areas such as artificial intelligence accelerators, companies like
Speaker 6: Nvidia can't keep up with the demand. But in other sectors,
Speaker 6: including automotive and industrial, it's a prolonged slump with customers
Speaker 6: cutting back orders because they have too much inventory. So
Speaker 6: sm I'll also mention the weakness in these industries.
Speaker 5: Name the CEO.
Speaker 3: I think the quote of the entire call was today,
Speaker 3: without AI, the market would be very sad. Chant touch,
Speaker 3: We thank you so much. Let's stay with semiconductors. Qualcom
Speaker 3: said to wait until after the US elections to decide
Speaker 3: whether it will put in an offer for Intel.
Speaker 5: That's according to sources. For more.
Speaker 3: Most Michelle Davis joins us for more what your source
Speaker 3: is saying.
Speaker 7: So, what we're hearing from sources is that this is
Speaker 7: going to be a very complicated deal. If it does happen,
Speaker 7: the bar is very high to get something over the line,
Speaker 7: and there are huge implication on the political front. You know,
Speaker 7: this is not just your average MNA deal where you're
Speaker 7: just thinking about anti trust implications. There are also geopolitical ones,
Speaker 7: and so part of why Intel or Qualcom would want
Speaker 7: to wait before bringing its formal offers to have more
Speaker 7: clarity about what the anti landscape will look like, but
Speaker 7: also what the geopolitical one will look like. US China
Speaker 7: relations in particular are very important in the semiconductor industry
Speaker 7: and to a deal like this.
Speaker 4: Michelle, the other part of the reporting is that sources
Speaker 4: told us clowd Com sounded out regulators in China. What
Speaker 4: did you learn?
Speaker 7: So what we're hearing is that this is something that
Speaker 7: would have been done very informally at this point. You know,
Speaker 7: China has not weighed in on what it thinks of
Speaker 7: a deal, but if Qualcom does come forward with it
Speaker 7: its formal offer, it will all hinge on those US
Speaker 7: China relations. The US has made a vested, you know,
Speaker 7: effort to make sure that it is a national player
Speaker 7: in chip making and it is not as reliant on China,
Speaker 7: and China will have say over a deal like this,
Speaker 7: and so if those relations are problematic, then then they
Speaker 7: could try to get in the way of it.
Speaker 5: So it's a a big consideration.
Speaker 4: Both Qualcom and Intel declined to comment on our reporting.
Speaker 4: Bloomberg's Michelle Davis in New York, thank you very much.
Speaker 4: Investor focus on chips will continue after the Bell because
Speaker 4: TSMC is going to report its earnings. Joanne Feenie, advises
Speaker 4: Capital management partner and portfolio manager, back on Bloomberg Technology TSMC. Wow.
Speaker 4: The timing, the accidental timing perhaps of ASML, but it
Speaker 4: is important to think about how quickly TSMC comes because
Speaker 4: it's the continuation of the story, right the investment cycle
Speaker 4: into AI frankly, and whether we continue to see investment
Speaker 4: in chip equipment, making equipment and the chips themselves.
Speaker 8: Joanne, Yeah, And you know clearly TSMC has already released
Speaker 8: monthly numbers, so we have a good indication that their
Speaker 8: results are going to be solid and led by AI.
Speaker 8: And you know, the ASML news is more about I
Speaker 8: think China, particularly the pull forward in China for some
Speaker 8: of that equipment ahead of increasingly severe regulations against ASML
Speaker 8: shipping there. So forty seven percent of ASML's business comes
Speaker 8: out of China and that's going to have a big factor.
Speaker 8: You know, the fact that ASML did acknowledge that AI
Speaker 8: continues to be strong but elsewhere things are weaker. You know,
Speaker 8: it could reflect a number of things, starting with Intel
Speaker 8: and its plans to delay some of its and cancel
Speaker 8: some of its overseas projects.
Speaker 4: For example, let's just.
Speaker 3: Dig into how sad, as the CEO of ASML called it,
Speaker 3: the rest of the market is without AI.
Speaker 8: Yeah, I mean, we've heard from plenty of the analogship
Speaker 8: makers like Texas Instruments, for example, that autos is weakening
Speaker 8: and they don't know. They said, look, we don't know
Speaker 8: how soft this is going to become. Hasn't gotten severe yet,
Speaker 8: at least the last time we heard from them. But
Speaker 8: on the other hand, we also have heard that inventories
Speaker 8: have cleared in other end markets for semiconductors like industrials,
Speaker 8: and that we're starting to see a pickup there. So
Speaker 8: it's really hard to read ASML's comments about orders into
Speaker 8: the broader sort of away from the leading edge chip
Speaker 8: businesses like analog or micro controllers, and that really is
Speaker 8: assigned those companies. Analog and micro controls really tell us
Speaker 8: more about the broader economy.
Speaker 2: And we know the US economy is doing well.
Speaker 8: We know we're seeing recovery and industrial so it's sort
Speaker 8: of hard to tell what ASML means. You know, how
Speaker 8: much of it is China, how much of it is
Speaker 8: Intel pushing out its plans, So it's actually not as
Speaker 8: straightforward to read.
Speaker 2: I think, as some people think.
Speaker 3: It is, let's give the nuance therefore, because you're so
Speaker 3: good at doing that, Joanne, Because this comes in the
Speaker 3: context of the breaking news that came on Monday that
Speaker 3: maybe we will see yet more and more well limitations
Speaker 3: on X sports from the US and around the world
Speaker 3: to China in video chips for example, why was in
Speaker 3: Vidio so sold off yesterday if it's not around AI.
Speaker 3: How much of an importance is China US to some
Speaker 3: of these valuations.
Speaker 8: Yeah, you know, in Vidia shouldn't really have sold off
Speaker 8: on the ASML news yesterday, particularly because ASML said, this
Speaker 8: is nothing to do with Ali, right.
Speaker 4: So I think what you're seeing is.
Speaker 8: You know, in Vidia is a big component of many ETFs,
Speaker 8: and so you know, when you sell out of those ETFs,
Speaker 8: the money flows out, everything in them gets sold. So
Speaker 8: I think that was a big driver for Invidia. And
Speaker 8: then also, you know, you could see some folks saying,
Speaker 8: you know, let me get a little bit less exposure
Speaker 8: to the semiconductor space overall, given how much it's rallied.
Speaker 8: You know, that could just have been a decision made
Speaker 8: on diversification lines. But I think it's probably the ETFs
Speaker 8: that drove most of that.
Speaker 4: Juanne remind us which of these names you like and
Speaker 4: hold which you don't and why. Yeah.
Speaker 8: So we're not involved in a SML, nor do we
Speaker 8: like Intel here because of its significant challenges.
Speaker 2: We do like Nvidia.
Speaker 8: We continue to like a number of players in the
Speaker 8: AI space, including Broadcom. So you know, overall, I think
Speaker 8: that the economically exposed companies like Texas Instruments, we own
Speaker 8: that for clients.
Speaker 2: I own it myself.
Speaker 8: I think is a good place to be given how
Speaker 8: strong the US economy is and how much of a
Speaker 8: recovery are seeing in industrials. Intel, you know, just faces
Speaker 8: huge challenges to catch up in manufacturing and it just
Speaker 8: doesn't have the expertise to do foundry work. It's a
Speaker 8: big challenge for them to build a library that it
Speaker 8: can then build other types of chips for. So, you know,
Speaker 8: the Qualcomm deal, if it goes through, we suspect will
Speaker 8: be more oriented towards Qualcom trying to acquire the design side,
Speaker 8: and that could give Intel a massive cash infusion with
Speaker 8: which to save the manufacturing side and really make the
Speaker 8: investments that are necessary. But we think that's such a
Speaker 8: long way off and so uncertain that we don't think
Speaker 8: Intel is a place to be right now.
Speaker 3: Joanne Feeney, so good to have you on Advisors Capital Management.
Speaker 5: We thank you.
Speaker 3: And coming up, what former President Trump had to say
Speaker 3: about tech regulation in a conversation with the Bloomberg's editor
Speaker 3: in chief, John mcklethwaite ed, you're watching a stock related
Speaker 3: to this.
Speaker 4: Yes, I am watching Trump Media and Technology DJT up
Speaker 4: almost ten percent. There's a lot of writing about this
Speaker 4: on the termin or this morning, Caro. Some people say
Speaker 4: the Trump trade is the dollar and rates right tied
Speaker 4: to inflation. Others just say it's DJT. I would point
Speaker 4: out it was down significantly yesterday, it's up significantly today.
Speaker 4: There's volatility, but the timing's curious. Based on the fascinating
Speaker 4: interview you're about to hear, Please don't go anywhere. It
Speaker 4: is worth listening to. This is Bloomberg Technology.
Speaker 3: Former President Donald Trump sat down with Bloomberg editor in
Speaker 3: chief John mclelthwaite on Tuesday for a wide ranging interview
Speaker 3: focused on the acon included his support of tariffs, his
Speaker 3: views on the Federal Reserve, and the future of tech regulation.
Speaker 3: Here's what he had to say about the potential breakup
Speaker 3: of Google.
Speaker 9: Google's got a lot of power. They're very bad to me,
Speaker 9: very very bad to me. I mean I can speak
Speaker 9: from that standpoint. They only have bad stories. In other words,
Speaker 9: if I have twenty good stories and twenty bad stories
Speaker 9: and everyone's entitled to that, you'll only see the twenty
Speaker 9: bad stories. And I called the head of Google the
Speaker 9: other day and I said, I'm getting a lot of
Speaker 9: good stories lately, but you don't find them in Google.
Speaker 2: I think it's a whole rig deal.
Speaker 9: I think Google's rigged, just like our government is rigged
Speaker 9: all over.
Speaker 2: You would break them up.
Speaker 1: In other words, I.
Speaker 9: Do something you have to have. Look, I give them
Speaker 9: a lot of credit. They've become such a power, such
Speaker 9: a power, and you've got to give them credit for that.
Speaker 9: How they became a power is, you know, really the discussion.
Speaker 9: At the same time, it's a very dangerous thing because
Speaker 9: we want to have great companies. Don't want China to
Speaker 9: have these companies. Right now, China is a friend of
Speaker 9: Google right now. You know, China is a very powerful,
Speaker 9: very smart group of people.
Speaker 2: I will tell you that from.
Speaker 10: Very personal example of a Chinese tech company at the
Speaker 10: moment TikTok. You initially wanted to ban TikTok. Now you
Speaker 10: like it. Apparently for some reason to do with Facebook.
Speaker 10: There was a decision coming up. If you became president,
Speaker 10: it's Chinese parent would have to sell it. I think
Speaker 10: it's by January the nineteenth.
Speaker 4: Would you force them to do that?
Speaker 9: So I originally had it all done, and then I
Speaker 9: said to Congress, your decision.
Speaker 2: I said, I'm not.
Speaker 9: Going to pull any strings nothing. Your decision. You make it.
Speaker 9: But I had it all done and I said, you
Speaker 9: make it, and they decided not to make it. I
Speaker 9: didn't care if they made it or not, because to me,
Speaker 9: it was a flip of acquiring. You know, you have
Speaker 9: some real First Amendment problems. You have a lot of problems.
Speaker 10: You just talked about Chinese technology, the need to defend
Speaker 10: against it. Yeah, TikTok and the threat people see too
Speaker 10: many kind of American children and things like that. Why
Speaker 10: do you no longer see security threats?
Speaker 9: I think it is a threat. Frankly, I think everything's
Speaker 9: a threat. There's nothing that's not a threat. But sometimes
Speaker 9: you have to fight through these threats. You know, you
Speaker 9: can't just like Google. I'm not a fan of Google.
Speaker 9: They treat me badly. But if you are you going
Speaker 9: to destroy the company by doing that? If you do that,
Speaker 9: are you going to destroy the company. What you can
Speaker 9: do without breaking it up is make sure that it's
Speaker 9: more fair.
Speaker 4: That was former President Donald Trump with Bloomberg editor in
Speaker 4: chief John Mickelfwaite. Let's review the interview with Bloomberg's Mike Shephard,
Speaker 4: who leads our coverage of the intersection between tech and politics,
Speaker 4: and he stopped short of suggesting a breakup of Google.
Speaker 4: He was firmer on TikTok. What else did you learn
Speaker 4: about his potential policy platform going forward in tech?
Speaker 11: I think one of the biggest takeaways from that, as
Speaker 11: he is trying to maintain some flexibility, he tried to
Speaker 11: leave doors open on both coming down on Google, but
Speaker 11: also maybe finding some way to play both ends against
Speaker 11: the middle so that he doesn't have to go to
Speaker 11: really unraveling what he was hailing during the conversation with
Speaker 11: John as a great power. He really pointed to Google's
Speaker 11: market cloud as something in a way to also be
Speaker 11: envied and admired and something that gives us a geopolitical
Speaker 11: advantage with China. We do have one signal from his
Speaker 11: camp that there could be a continuation of this vigorous
Speaker 11: anti trust enforcement, and that is his running mate jd.
Speaker 4: Vance.
Speaker 11: He has previously expressed a favorable view of how Lena
Speaker 11: con in particular at the FTC has pursued anti competitive behavior,
Speaker 11: especially by big tech companies, So that could give us
Speaker 11: some sort of a clearer signal there.
Speaker 3: Many are wondering about the signal around M and A
Speaker 3: as well. It feels as though with an anti competitive
Speaker 3: perspective that might be tough.
Speaker 11: I think you're right there. And also on TikTok. One
Speaker 11: of those stipulations, of course under the new law is
Speaker 11: that the app be sold, and so the question is
Speaker 11: would this really valuable asset enter the market someplace. And
Speaker 11: again here in the interview, Trump is really playing both
Speaker 11: ends against the middle. He did not say for sure
Speaker 11: that he would enforce the new law that President Joe
Speaker 11: Biden signed at the end of at the end of
Speaker 11: April as part of a larger foreign a bill. And likewise,
Speaker 11: in your conversation with our colleague Michelle Davis, we saw
Speaker 11: signs in other companies Qualcomm in particular that they have
Speaker 11: reservations about making any kind of a move before they
Speaker 11: know how this election is shaping up, because the environment
Speaker 11: could actually become very different when it can't comes to regulation.
Speaker 5: Mike Sheppard, we appreciate it. Thank you.
Speaker 4: Day two of Bloomberg City Lab Summit in Mexico City,
Speaker 4: over five hundred mayors and policymakers, including those from Kiev, Ukraine.
Speaker 4: Four million is being provided by Bloomberg Philanthropies for digital
Speaker 4: projects in Ukraine. Bloomberg Philanthropies is the philanthropic organization of
Speaker 4: Michael Bloomberg. Kiev is a city using AI for everything
Speaker 4: from urban planning, predictive AI for transport, to infrastructure maintenance
Speaker 4: and even security. City of Kiev, Ukraine, Advisor to the
Speaker 4: Mayor and head of Digitalization, Oleg Polovinku joins us now,
Speaker 4: good morning to you. What is it you hope to
Speaker 4: achieve your city? With all of your peers there in attendance.
Speaker 12: Hello everyone, thank you for hosting me. Definitely Ukraine now
Speaker 12: and the city of the Key of in the most
Speaker 12: challengeable time, and we're doing our best and using digitalization
Speaker 12: to help our residents achieve services from the city and
Speaker 12: use it inconvenient and comfortable way.
Speaker 3: Just how difficult is it to implement technological innovation at
Speaker 3: this moment in a moment of war.
Speaker 12: First of all, we are having our super app which
Speaker 12: downloaded more than three point nine million users in case
Speaker 12: that we have three point six residents. Of course, it's
Speaker 12: not all residents downloaded this super app, but the refugees
Speaker 12: from other regions who came in the key already downloaded.
Speaker 12: The main goal of this application is provide critical notification
Speaker 12: to our users to help them find bomb shelters, hitting point,
Speaker 12: any help and services what they need in the city
Speaker 12: when they arrive there, when they live there. Because we're
Speaker 12: facing the out electricity outrange and in this moment, citizens
Speaker 12: have to know how to survive in the city, so
Speaker 12: they use our application for that.
Speaker 3: I can imagine the mental health support that you're able
Speaker 3: to give, the information that you're able to give.
Speaker 5: What about future investment? Where are you allocating? Is it
Speaker 5: all about the help of generative AI.
Speaker 3: Within these super apps to be some help within mental
Speaker 3: health discussions? Is it about more logistical information?
Speaker 5: What are you talking about.
Speaker 4: Now?
Speaker 12: That functionality what we already providing. It's about transportation, it's
Speaker 12: about safety, civil defense function But you understand that the
Speaker 12: residents of the city having ptserve because twice per day
Speaker 12: the missile attack alarms and they are really tired about
Speaker 12: all of that. That's why somes to Bloom the philanthropists.
Speaker 12: We are now developing the project in mental health area,
Speaker 12: which helps test yourself in the application and after that
Speaker 12: provide additional recommendations and services which helps you improve your
Speaker 12: mental health. And additional AI technology helps us to make
Speaker 12: services and provide services for residents more efficiency. This is
Speaker 12: like call center providing additional services, making recommendations.
Speaker 4: Or like very quickly, which area of your city do
Speaker 4: you need to modernize the most? Excuse me, which area
Speaker 4: of your city do you need to modernize? First?
Speaker 12: Oh, this is the areas that we are covering. This
Speaker 12: is a civil defense, this is a transportation, this is
Speaker 12: self testing and self improvement of the residents.
Speaker 6: Right.
Speaker 5: Oh, leg, it's so good to have some of your time.
Speaker 3: The key of advisor to the Mayor and head of
Speaker 3: Digitalization Olegrinco. We'llcome back to Bluemore Technology. I'm Caroline Hyde
Speaker 3: in New York.
Speaker 4: That I made Ludlow in San Francisco.
Speaker 3: Check on these market said, because while we're still trying
Speaker 3: to digest the shock enhouncement earnings from ASML, chip equipment maker,
Speaker 3: which really managed to pummel some of the chip sector yesterday.
Speaker 3: Today we see a little bit of aprief. We're only
Speaker 3: off by bad a tenth of a percent. We're seeming
Speaker 3: to be flip flopping between gains and losses on the
Speaker 3: Nasdaq one hundred more broadly, off by a tenth of
Speaker 3: a percent. But drill into some of the individual movers,
Speaker 3: because despite the CEO.
Speaker 5: Now speaking out, coming out to.
Speaker 3: Investors to explain the numbers, ASML still under pressure. Let's
Speaker 3: just move on to see what it's doing in terms
Speaker 3: of its ADRs where are traded in the United States.
Speaker 3: We've seen ASML under some pressure. We're currently off by
Speaker 3: more than five percent. Interestingly, though the chip set to
Speaker 3: more broadly is bouncing back. Video in the green. Because look,
Speaker 3: this isn't an AI growth story. Many at pains to
Speaker 3: explain that actually AI really remains the bright spot. The
Speaker 3: sad spot is perhaps the consumer tech area, particularly PC
Speaker 3: volume smartphone. That is why perhaps we see Apple under
Speaker 3: pressure by one point four percent.
Speaker 4: End. Okay, some news from the aerospace sector air buses
Speaker 4: joining Boeing in cost cutting measures. The European plane maker
Speaker 4: will cut up to twenty five hundred jobs in its
Speaker 4: defense and space division. That's equivalent to about seven percent
Speaker 4: of its entire workforce. The companies decided that it needs
Speaker 4: to step up in order to adapt to what it
Speaker 4: called an increasingly difficult space market.
Speaker 3: Carrot, let's just stick with space because AST space Mobile
Speaker 3: is building the first and only cellular broadband network from space.
Speaker 3: It's working with the giants like AT and T, Google,
Speaker 3: Verizon and more, and that makes it the biggest competitor
Speaker 3: to SpaceX in the director sell business. Let's discuss all
Speaker 3: of this as President Scottsnewski, who joins us in the
Speaker 3: studio and Scott many are trying to work out how
Speaker 3: realistic You've got satellites into space. Did that on September
Speaker 3: the twelfth, but there are more to be built, plenty more.
Speaker 5: How are you on this journey?
Speaker 1: Well, we've been at this, and thank you for having us,
Speaker 1: but we've been at this for about seven years now.
Speaker 1: Our network is purpose built just for the space based
Speaker 1: cellular broadband opportunity, and it's purpose built for the operators.
Speaker 1: So we've been working with many of these operators for
Speaker 1: over five years now, and you mentioned a few. We
Speaker 1: have many more abroad as well, and so for us,
Speaker 1: the first step was to launch these first five commercial satellites.
Speaker 1: We'll have more to come starting in Q one, twenty
Speaker 1: twenty five, and our goal is to get about forty
Speaker 1: five to sixty in the US in order to provide
Speaker 1: twenty four to seven commercial service to your phone with
Speaker 1: no modification to your phone.
Speaker 4: Scott, thanks for coming on Bloomberg Technology. Your ability to
Speaker 4: serve the world directly correlates to this constellation in orbit right,
Speaker 4: So from that perspective, just explain to us the timeline
Speaker 4: for expansion, but your ability to serve those markets on Earth.
Speaker 1: Right, Well, we importantly are low Earth orbit network, which
Speaker 1: like you said, means we're global, and that's a problem
Speaker 1: and that you need many satellites. But once you're operational,
Speaker 1: you can service many markets. And that's why we've put
Speaker 1: together this network of forty five plus partnerships globally with
Speaker 1: the mobile network operators who cover collectively over two point
Speaker 1: eight billion subscribers. So that network is something that we
Speaker 1: want to build quickly. Our partners want to build quickly.
Speaker 1: It's a service we want to bring to market and
Speaker 1: we're going to start doing beta service with these first
Speaker 1: five satellites thirty plus minutes a day as soon as
Speaker 1: we continue commission the satellites here in orbit. So from
Speaker 1: there we're vertically integrated, which we think is very important
Speaker 1: for what we're doing. We're based in Texas, we have
Speaker 1: our key hubs here in the United States, in addition
Speaker 1: being publicly traded and based here, and so for us
Speaker 1: getting that factory at full speed, we believe our capacity
Speaker 1: is up to six satellites a month, and these are
Speaker 1: big satellites, very specialized for this application. We're going to
Speaker 1: be building those very rapidly. We've announced that we're in
Speaker 1: interestroduction for the next seventeen and we need to get
Speaker 1: to that forty five to sixty number as soon as
Speaker 1: we can.
Speaker 4: So that is interesting. Caroline and I were at rocket
Speaker 4: Lab Friday for a special show, and what I found
Speaker 4: so fascinating about that is that their limiting factor is
Speaker 4: not their ability to build rockets and launch, it's the
Speaker 4: customers sending things up. So what is your limiting factor?
Speaker 4: It sounds like you can build, is it your launch provider?
Speaker 4: What's kind of the limit on growth?
Speaker 1: Yeah? For us, again, going back and being vertically integrated.
Speaker 1: We control most of the inputs to the supply chain
Speaker 1: and in manufacturing, So for us, we've had a lot
Speaker 1: of success so far this year raising capital. We control
Speaker 1: the manufacturing and supply chain, and we have great partners,
Speaker 1: some of which you just put up on the screen.
Speaker 1: So we believe that the ball is largely in our court.
Speaker 1: Still a lot to work through, but we control most
Speaker 1: of the inputs, action and the ability to deliver the service,
Speaker 1: and we're in a race to get it up to
Speaker 1: orbit as soon as possible.
Speaker 3: Talking of capital that you managed to raise, I mean
Speaker 3: you're potentially going to sell more.
Speaker 4: Stop.
Speaker 3: We're up three hundred percent here to date, you have
Speaker 3: been the best performing Russell two thousand name record highs
Speaker 3: thirteen hundred percent up from its previous slow but thirty
Speaker 3: percent of the outstanding shares are shorted. What do you
Speaker 3: say to those shorts who are worried about the ability
Speaker 3: to make this discussion and reality right?
Speaker 1: What we think what we have is very highly differentiated
Speaker 1: technology and excellent partners that we've.
Speaker 5: Been able like SpaceX that you're competing against.
Speaker 1: Yes, exactly, so what we're doing is very different. Cellular
Speaker 1: broadband from space is very different from SOS or texts,
Speaker 1: so we think that we're very useful to the operators
Speaker 1: who've partnered with us. We're very we're going to provide
Speaker 1: a service that's very, very important to the consumer. You know,
Speaker 1: when our phone doesn't work, it weighs very heavy in
Speaker 1: our pocket. So we think that the demand for our
Speaker 1: service is very significant and we're pushing as fast as
Speaker 1: we can. Our stock has performed well on the back
Speaker 1: of I think our success this year. But for us,
Speaker 1: we have to produce for our shareholders and for our customers,
Speaker 1: and we're very eager to do that. As we discussed
Speaker 1: on the capital side, we've announced success with the US
Speaker 1: government as a customer and prepayments with many of our
Speaker 1: top providers customers who will get initial access to our network.
Speaker 1: So for us, the stock has performed well, but we've
Speaker 1: offerings in twenty twenty five and twenty twenty four and
Speaker 1: we've plan to stick with that.
Speaker 4: Scott, I'm sorry I'm pushing my luck with time, but
Speaker 4: the team know that I'm excited about this area. Explain
Speaker 4: how it works from a revenue split perspective. So if
Speaker 4: I use my phone in my pocket, you're partnering with
Speaker 4: the carrier AT and T. It's your constellation and your technology,
Speaker 4: but you need to kind of split who's making money
Speaker 4: in the transaction. Explain that very quickly, please well.
Speaker 1: Our organizing principle from the beginning has been a revenue share,
Speaker 1: so a service that's unique, it's supplemental to the coverage
Speaker 1: that our partners provide, and it's a service that will
Speaker 1: be provided through that partner. So for us, our organizing
Speaker 1: principle has been a revenue share with all of our customers.
Speaker 1: There's many ways to go to market that are very interesting,
Speaker 1: and we'll be flexible by market, but at its core,
Speaker 1: we want to drive new revenue, new growth, help our
Speaker 1: customers reduce churn by making their service more valuable, and
Speaker 1: in that process we show the revenue.
Speaker 3: Come on when you hit those targets. AST Space Mobile
Speaker 3: President Scott asnews Key. We thank you for your time
Speaker 3: and what have we got coming up?
Speaker 4: Yes, more news in talkie tech First start check out
Speaker 4: this terminal CHARTSML has officially lost its place as your
Speaker 4: most Valuable Tech company to software firm SAP. That's, of course,
Speaker 4: after a guidance cut sent the Dutch chip makers shares plunging.
Speaker 4: As mentioned earlier, SML lost about sixty five billion dollars
Speaker 4: in market cap in that session, also booked only about
Speaker 4: half the orders that analysts were expecting. In Q three plus,
Speaker 4: Airbnb's launched a new feature that allows homeowners to hire
Speaker 4: fellow hosts to manage their rentals. The idea for hosts
Speaker 4: to have a new resource to furnish their home, managed
Speaker 4: bookings and coordinate guest logistics. Airbnb hopes the new feature
Speaker 4: will help boost listings and paramounts. Three co CEOs will
Speaker 4: get paid even if they're not the boss. According to
Speaker 4: a regulatory filing, they will receive their improved annual cash
Speaker 4: bonuses even if they're replaced. Paramounts in the process of
Speaker 4: merging with Skydance Media and the new CEO's expected has
Speaker 4: been named when the deal closes in the first half
Speaker 4: of next year.
Speaker 3: Karro coming up, we're going to be talking another of
Speaker 3: your favorite zed Jason Chairman, Convoy, co founder, managing partner
Speaker 3: on the state of the gaming industry and investments.
Speaker 5: As a bluebog technology.
Speaker 4: Convoy estimates the gaming market size to reach one hundred
Speaker 4: eighty eight billion dollars this year with VC funding in
Speaker 4: games reaching five hundred and seventeen million so far more
Speaker 4: in that landscape, including the impact of AI Convoy co
Speaker 4: founder and managing partner Jason Chapman joins us, Now, I
Speaker 4: find that so interesting. We can get into the health
Speaker 4: of this industry a little bit, but the sheer size
Speaker 4: of the overall industry, the size one hundred and eighty eight,
Speaker 4: why is that important?
Speaker 13: I mean, baby one, thank you ed, thank you Carolin
Speaker 13: for having me. Yes, gaming is the most significant portion
Speaker 13: of the entertainment market today. Right. We're larger than linear TV,
Speaker 13: We're larger than OTT, we're larger than movies, music in
Speaker 13: many cases some of those industries combined. Gaming has continued
Speaker 13: to grow. It's proven, that's recession resilient. It's been tested
Speaker 13: and tried in just about every way, shape and form.
Speaker 2: And yes, we're.
Speaker 13: Really pleased to see that funding has normalized. You know,
Speaker 13: the last six quarters were seen roughly around five hundred
Speaker 13: and six hundred million dollars with usted on a quarterly
Speaker 13: based this into games and we see no reason that
Speaker 13: that will stop. And that, paired with interest rates driving down,
Speaker 13: open up the IPO markets pretty polish. On a twenty
Speaker 13: twenty five.
Speaker 4: For games, Jason.
Speaker 3: Given the size, the sheer scale of the overall industry,
Speaker 3: how much of a chunk of change does it get
Speaker 3: in the VC area? Is it synonymous to the extent
Speaker 3: of its size and entertainment broadly.
Speaker 13: Yes, So if you look at you know, larger venture,
Speaker 13: there's about fifty to sixty billion dollars invested a quarter.
Speaker 13: We're seeing about five hundred and six hundred million of
Speaker 13: that in games, so it is a significant portion. It's
Speaker 13: also a lot more stable. I think you see a
Speaker 13: lot less flash in the pans as you're seen right now.
Speaker 13: You know, a couple of years ago in Web three
Speaker 13: or this year you're seeing in AI. Gaming is kind
Speaker 13: of steady state, and so we're very pleased to see that.
Speaker 13: We're expecting to see you know, continued interest this you know,
Speaker 13: rounting out this year, and also we a to twenty
Speaker 13: twenty five.
Speaker 3: I want to just try out if we can get
Speaker 3: all three of us on screen for a moment, because
Speaker 3: we had such a fun conversation last week. We're in
Speaker 3: LA We're discussing sort of the industry more broadly when
Speaker 3: it comes to gaming, and we had a legend from
Speaker 3: Blizzard join the show has got a news studio, but
Speaker 3: there is still a lot to sort of focus on
Speaker 3: when it comes to the development of games and how
Speaker 3: hard it is.
Speaker 4: Right, you're talking about Mike Morheim, and last night I
Speaker 4: was at an event with Jason Schreier with loads of
Speaker 4: developers in the room, And the reason I'm so fixated
Speaker 4: on Jason's one hundred and eighty eight billion number is
Speaker 4: it's getting bigger. But all the people in that room Jason,
Speaker 4: who were developers would tell you that they're suffering layoffs
Speaker 4: at video game publishers, and developers are increasing the crunch.
Speaker 4: The crunch, you know exactly what that is, is more
Speaker 4: real than ever. So why is the industry getting bigger?
Speaker 13: I mean, I think it's getting bigger because people continue
Speaker 13: to want to spend time in interactive environments. You know,
Speaker 13: if you look at younger generations, they're spending less and
Speaker 13: less time watching TV, which is passive. They want to
Speaker 13: be in an environment that they could interact impact and
Speaker 13: so that's absolutely true. Why is there the crunching games
Speaker 13: people talk about this a lot, is because look, users
Speaker 13: are very demanding. We expect a lot from our games.
Speaker 13: We've been spoiled over the years. We have great creatives
Speaker 13: producing high quality content that we get to enjoy on
Speaker 13: a daily and weekly basis, and that's never going to stop.
Speaker 4: I think you're talking about the layoffs.
Speaker 13: Yes, we've seen about thirteen thousand jobs lost in the
Speaker 13: games industry that we've tracked from the public companies. It's
Speaker 13: likely a lot higher if you include private companies. We
Speaker 13: expect it we'll see more, and I think that's a
Speaker 13: healthy thing in industry. I know that's really hard to
Speaker 13: say and hard to hear, but we over hired during
Speaker 13: the boom era. We're going through right sizing now and
Speaker 13: it's really encouraging to see that even in that right sizing,
Speaker 13: our industry continues to thrive and to grow. And that
Speaker 13: is an encouraging reality, I think for those in the games,
Speaker 13: and one that we should all remember.
Speaker 3: What's not healthy at the moment is child safety and
Speaker 3: lo I've got a seven year old at home who
Speaker 3: is desperate to be on roadblocks and on Minecraft instead.
Speaker 3: I had in books about it because I've got to
Speaker 3: get my safety precautions and get understand how I make
Speaker 3: him safe online before I let him do it. How
Speaker 3: are you thinking about what's happening versus TikTok, the Child's Safety.
Speaker 5: Bill, and also how that in broils things like roadblogs.
Speaker 13: As kids spend more and more time online. And I
Speaker 13: have a lot of empathy for this as a parent myself.
Speaker 13: You have to take that very seriously in every way,
Speaker 13: shape and form. Right, So, wherever this is and wherever
Speaker 13: it is, that's where you need to.
Speaker 4: Protect the kids.
Speaker 13: And so when we're looking at this, you know, we
Speaker 13: think about this in a lot of different ways, and
Speaker 13: you know, every single gaming firm has to reconcile that
Speaker 13: if you command a kid's time, you're taking responsibility and
Speaker 13: sort of digital daycare. We've invested pretty heavily in the space.
Speaker 13: One of our investments is kid, which is actually tacking
Speaker 13: this issue straight on, which is trying to promote and
Speaker 13: ensure that the companies are compliant with different regulations across
Speaker 13: the globe. This is one of the huge challenges for
Speaker 13: games companies. Again, I have a lot of empathy for them.
Speaker 13: When you release a game, you release a game in
Speaker 13: you know, over one hundred countries. Trying to stay compliant
Speaker 13: and ensure that every kid is safe according to the law,
Speaker 13: it's very difficult, and that's why we made this investment
Speaker 13: early on, and they've continued to thrive. I think what
Speaker 13: you're highlighting to Caroline with Roadblocks. Obviously, the Hindenberger report
Speaker 13: that came out was pretty intense with their allegations. I'd
Speaker 13: say towards a kind of two sides of the house.
Speaker 13: One is child safety, the other one is kind of
Speaker 13: their financial metrics. A'll hone it on the child safety
Speaker 13: metrics for a second.
Speaker 12: Free.
Speaker 13: Yeah, they have to take this very seriously. It's something
Speaker 13: they have to look into, but until proven otherwise, you know,
Speaker 13: I think that Roadblocks has proven to be a best
Speaker 13: in class digital property. I would like to think that
Speaker 13: they can handle these issues head on.
Speaker 5: Jason Chapman and Convoy thank you.
Speaker 3: Amazon says it's teaming with financier Ken Griffin to make
Speaker 3: a five hundred million dollar investment in small nuclear reactors.
Speaker 3: Is what a ws CEO Matt Garmon said earlier today.
Speaker 14: As the world continues to modernize, continues to digital, as
Speaker 14: we think about the power of generative AI, all of
Speaker 14: these capabilities are leading to the demands of more power.
Speaker 14: So nuclear is an incredibly important part of reaching that
Speaker 14: carbon zero goal for us.
Speaker 4: We'll hear more from Matt Garman tomorrow, where he joins
Speaker 4: us right here on Bloomberg Technology. Okay, Amazon's not the
Speaker 4: only one. Google, Let's got a nuclear The company says
Speaker 4: it's investing in the development of several small nuclear power
Speaker 4: reactors across the United States. It hopes the deal your
Speaker 4: Cairos power will help it meet the growing need for
Speaker 4: electricity to fuel ai Here now, Michael Terrell, Senior director
Speaker 4: of Energy and Climate at Google, and I guess that
Speaker 4: the best starting point because it's well documented the terms
Speaker 4: of the deal SMRs and what they are, is whether
Speaker 4: it meaningfully changes the trajectory of meeting your power needs
Speaker 4: but also your targets for climate as well well.
Speaker 15: The world needs more carbon free energy and this agreement
Speaker 15: that we've signed with Cairos is an important mouse and
Speaker 15: what's been a fifteen year journey at Google to make
Speaker 15: the transition to clean energy. It's our first nuclear energy deal,
Speaker 15: and we feel that nuclear is a very important technology
Speaker 15: for going carbon free for offices, data centers, communities where
Speaker 15: we operate, because it's an always on carbon free energy resource.
Speaker 4: I'm very interested in the technology, you know, I am,
Speaker 4: but I'm also interested in the economics and the math.
Speaker 4: Are you able to say, even if it's an estimate
Speaker 4: kind of way, you see the dollar pamegual hour being
Speaker 4: by twenty thirty, twenty thirty five when these come online.
Speaker 15: Well, I can't talk about the specifics of this deal,
Speaker 15: but what's interesting about it is we didn't do a
Speaker 15: deal for just one reactor. It's actually for a series
Speaker 15: of reactors, what we call an order book, and that
Speaker 15: repeatability helps to drive down costs, It helps to take
Speaker 15: the technology to scale faster.
Speaker 3: Your focus is eliminating carbon emissions by twenty thirty.
Speaker 5: Does this get you there?
Speaker 2: Michael, that's right, Caroline.
Speaker 15: We have a goal as a company to be twenty
Speaker 15: four to seven carbon free and everywhere we operate in
Speaker 15: every location, every hour.
Speaker 2: Of the day, and it's a huge challenge.
Speaker 15: We've actually been in this space for fifteen years in
Speaker 15: terms of doing wind and solar large deals. We're one
Speaker 15: of the largest corporate purchasers of wind and solar on
Speaker 15: the planet. We signed over one hundred deals. But we
Speaker 15: know that to get to carbon free twenty four hours
Speaker 15: a day, we're going to need more technologies than just
Speaker 15: wind and solar. The wind doesn't blow all the time,
Speaker 15: the sun doesn't shine all the time. And what's great
Speaker 15: about technologies like advanced nuclear is that they provide a
Speaker 15: more always on resource. So it's a very big part
Speaker 15: of our path to twenty four to seven carbon free energy, but.
Speaker 3: It takes time and right now AI generator AI, the
Speaker 3: training of it is in the here and now. Do
Speaker 3: you have the energy infrastructure necessary to satisfy that demand?
Speaker 15: Yes, we do, and it's why we're making big bets
Speaker 15: like we are on nuclear, but we're also still betting
Speaker 15: big on wind and solar and storage. We signed over
Speaker 15: or four gigawatts of deals just last year, the most
Speaker 15: we've ever signed in a single year, and now we're
Speaker 15: inking new agreements with utilities to develop a portfolio of
Speaker 15: technologies that can meet our twenty four to seven carbon
Speaker 15: free needs. So we're both betting short term and long term.
Speaker 4: I know you won't give me a dollar pamegal hour figure,
Speaker 4: but you do expect the SMRs to be competitive and
Speaker 4: of value versus solar and wind and the other technologies
Speaker 4: you outlined.
Speaker 15: Absolutely, we wouldn't do this if it didn't make sense
Speaker 15: for our business.
Speaker 2: And you know, one of the things that I think.
Speaker 15: We ought to really think about in how we value
Speaker 15: these approaches is they're always on nature exactive technology, and
Speaker 15: it delivers a lot of value and you can put
Speaker 15: it anywhere, and so that again is very good.
Speaker 2: For the business.
Speaker 4: So we can't just jump in really quick and ask
Speaker 4: you your job is really interesting because you are responsible
Speaker 4: for the energy needs. If you're not calculating the cost
Speaker 4: per megal hour, do you have a clear figure in
Speaker 4: your head about the energy need over a five year
Speaker 4: or ten year time horizon.
Speaker 15: Yeah, what we've been doing for like I said, fifteen years.
Speaker 15: We have a good sense of how our demand is
Speaker 15: going to grow. We have a good sense of the
Speaker 15: portfolio of resources that we need, and we're making decisions
Speaker 15: that make sense for the business.
Speaker 2: It makes sense for our growth as a company. So
Speaker 2: we feel we're on a good path.
Speaker 4: Loop.
Speaker 3: It's busy out there at Nuclear Never have we talked
Speaker 3: about it more.
Speaker 5: And the Amazon deal for example, these are companies that
Speaker 5: we've not really heard of, Cairo's Power, the Private x Energy.
Speaker 5: Are there enough startups.
Speaker 3: Enough companies building what you need right now to partner with?
Speaker 15: You know?
Speaker 2: It reminds me of the early days of wind and solar.
Speaker 15: We were one of the pioneers and signing corporate ppa
Speaker 15: agreements to buy these technologies, and there were not a
Speaker 15: lot of players in the.
Speaker 2: Early days of those as well.
Speaker 15: But now with this new set of technologies that we're
Speaker 15: going to need to get to twenty four to seven
Speaker 15: carbon free energy, it's not just nuclear, it's enhanced you
Speaker 15: a thermal, it's long duration storage, and so it's great
Speaker 15: to see others getting in the game.
Speaker 2: The more the merrier.
Speaker 15: I'd like to see one hundred more companies doing nuclear deals.
Speaker 2: From what we've seen this week.
Speaker 4: We're running out of time, so you will look at
Speaker 4: GA Thermal and can you give us a proportion of
Speaker 4: what you see the contribution of nuclear, geofermal and solar.
Speaker 2: Yeah.
Speaker 15: Actually, Geothermore was one of the first advanced energy deals
Speaker 15: that we did. We signed a deal in twenty twenty
Speaker 15: one to do a project in Nevada. It's now skilled
Speaker 15: to a deal that's twenty five times bigger than that
Speaker 15: original project. So we've got experience in dealing with these
Speaker 15: new technologies and we're super excited about the potential for nuclear.
Speaker 4: Michael Terrell, Senior director of Energy and Climate at Google,
Speaker 4: really appreciate you joining us here. On Bloomberg Technology.
Speaker 3: Carroc, what a wide rating ranging condition on Bloomberg Technology.
Speaker 3: We've done it all, from space to power to ASML.
Speaker 4: Still need to track that, yeah, and keep your eye
Speaker 4: on the chip sector throughout the day because twenty four
Speaker 4: hours it's been a bit of a wild ride. Recap
Speaker 4: on the podcast. You know where to find it on
Speaker 4: all the Bloomberg platforms as well as online on Apple, Spotify,
Speaker 4: and iHeart. Thank you New York team and everyone here
Speaker 4: in SF. This is Bloomberg Technology.