Speaker 1: From the heart.
Speaker 2: We're Innovation, Money and Power co lie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: Live from New York and San Francisco. This is Bloomberg Technology.
Speaker 3: I mean up tech winners and losers. The latest earnings
Speaker 3: that investor moves as saw Us and Drug and Miller.
Speaker 3: Will they sell out before the sell off?
Speaker 4: And the Tesla analysts who almost crashed using FSD is
Speaker 4: back with another review of the tech. We speak to
Speaker 4: truists William Stein.
Speaker 3: Defense Tech is in focus a massive fundraise for Andreil.
Speaker 5: We speak with its executive.
Speaker 3: Chair and VC back at about the whopping fourteen billion
Speaker 3: dollar valuation of US. We've got George Soros, You've got
Speaker 3: standing Druck and Miller both are investment firms actually wanted
Speaker 3: to trim their holdings in the Magnificent seven stocks before
Speaker 3: the major downturn in such tech names. Back in mid
Speaker 3: July by Prescient for more on the story and other
Speaker 3: investor moses bring in Bloemberg's Hemma Palmer's joining us on
Speaker 3: the daily at the moment, Hemma, Look, it does feel
Speaker 3: like they managed to cool this a little bit.
Speaker 5: Tell us about the names that they trimmed.
Speaker 6: Yes, so we care about these titans of the industry,
Speaker 6: billionaire investors.
Speaker 5: They sold some of their steak.
Speaker 6: George Sore sold some of his steak in Alphabet and Amazon,
Speaker 6: so some prescient moves there. Stanley drugg and Miller sold
Speaker 6: some of his exposure to Nvidia.
Speaker 5: Also quite interesting.
Speaker 6: David Tepper and other Family office investor, former Hedgepooter manager
Speaker 6: cut some of his steak in Amazon and Microsoft and Meta.
Speaker 6: So we do see some trimming of those tech positions
Speaker 6: ahead of what was a pretty significant cell off.
Speaker 4: We kind of discussed this twenty four hours ago, Hemmer.
Speaker 4: But you know, they come thick and fast than thirteen
Speaker 4: F filings. You see individual fund names that the stock
Speaker 4: pickers in particular, they go one way or the other.
Speaker 4: But in aggregate, was it a good second quarter for
Speaker 4: technology or a bad second quarter for technology in terms
Speaker 4: of going in and out?
Speaker 6: Yeah, so I would say in aggregate, we did see
Speaker 6: some selling of some tech bets, which for the investors
Speaker 6: was a pretty good move ahead of the volatility that
Speaker 6: we saw. So we did see some selling of Microsoft.
Speaker 6: One hundred and forty hedge funds sold at that steak,
Speaker 6: some trimming of Meta, some trimming of Nvidia. Apple though
Speaker 6: a popular stock buy, the most buying we've seen in
Speaker 6: about three months.
Speaker 3: And like well the Oracle of Omaha, I'm interested in
Speaker 3: the Tiger cubs that we talk about so much. What
Speaker 3: moves have they been making? Have they been making back
Speaker 3: any of the losses basically we've been so accustomed to
Speaker 3: of late.
Speaker 6: Yes, So the performance we did see a little bit
Speaker 6: of a downturn in during the volatility. Not terrible, but
Speaker 6: not great. Every month does matter when it comes to
Speaker 6: these funds that are trying to dig themselves out.
Speaker 4: Of a hole.
Speaker 6: But in terms of their thirty and positioning, some interesting moves.
Speaker 6: United Health seems to be a popular buy for these funds.
Speaker 6: Tiger Global started a brand new position in that company,
Speaker 6: it's seventh largest holding. CO two started a small steak
Speaker 6: a loan Pine Bot some as well too, So you
Speaker 6: netted Health does seem to be a little bit popular.
Speaker 6: D one started a brand new position in XPO, that's
Speaker 6: a logistics company, and that's now D one's fifth largest holding.
Speaker 6: So we do see some kind of interesting moves on
Speaker 6: the margins and companies that are not necessarily traditional.
Speaker 4: Tech, Bloomberg, Semma Palmer, thank you very much. Ali Barber
Speaker 4: reported earning's posting a disappointed four percent rise in revenue,
Speaker 4: even after aggressive promotions to try and drive spending. Joining
Speaker 4: us for more on the China tech earning stories bloombergs
Speaker 4: Isabel Lee. The ADRs are higher though now it's kind
Speaker 4: of interesting when you go from the Asian session into
Speaker 4: the US session. But overall it's sales growth weakness that
Speaker 4: we're worried about.
Speaker 5: It's likely hire.
Speaker 7: I think investors have digested the news overnight, but they're
Speaker 7: still not that thrilled. The four percent rise in revenue.
Speaker 7: You're correct, it was a rise, but it was a
Speaker 7: kneemic and we have profit plunging around twenty seven percent.
Speaker 7: Ali Baba really has just struggled to drive its growth.
Speaker 7: We have Edie Wood, the CEO, who was installed last year,
Speaker 7: making this priority to focus on the twin business of
Speaker 7: cloud computing and commerce. He has also been making bets
Speaker 7: on AI in the long run. But investors have been
Speaker 7: worried that Ali Baba's intense drive to beat its competitors
Speaker 7: pdd in, JD dot Com will compress margins and the
Speaker 7: three way arrivalry among those have been really intensifying for
Speaker 7: a while. And a little quick note, Ali Baba's biggest rival, Tencent,
Speaker 7: reported better than expected earnings, but we did have the
Speaker 7: company warning of weakening consumption and JD dot Com also
Speaker 7: reported better than expected earnings. So it's really Ali Baba
Speaker 7: it's kind of in the backseat for now, but it's
Speaker 7: just one quarter in zooming out. The economy in China
Speaker 7: is still not looking that fantastic it, I mean.
Speaker 3: It's interesting just going back to the thirteen next. So
Speaker 3: we were discussing we understand that Michael Barry, for example,
Speaker 3: has actually been beefing up He's Ali Baba st people
Speaker 3: do believe in a turnaround for this business. Is it
Speaker 3: all to do with ultimately a weak revenue stream a
Speaker 3: weak consumer because they did seem to really put it
Speaker 3: away when it was GMV focused on indeed margin focus.
Speaker 7: Yes, Michael Berry did increase this Ali Baba steak by
Speaker 7: around seven percent, and we also have they have a
Speaker 7: tepper slashing his Ali Baba steak for a little bit,
Speaker 7: but it's still the biggest holding in his company. And
Speaker 7: I think that's really the main question. Would you invest
Speaker 7: in China? Because now it's cheap. We have the other
Speaker 7: end though, saying that they will not invest because it's
Speaker 7: cheap for a reason. If you zoom out, we have
Speaker 7: the latest data from China still showing an economy weakening.
Speaker 7: We have domestic demand faltering, we have property crisis that
Speaker 7: is still prolonged in slumping. So it's really not proving
Speaker 7: to be better. But then if you ask others, they're
Speaker 7: still seeing a bright spot. I mean, no economy goes
Speaker 7: up in a straight line. They see this as a
Speaker 7: blip in China's economy, but still believes that this second
Speaker 7: largest economy in the world will be a bright horizon someday.
Speaker 3: I mean, as we say, David Temper trimming my seven percent,
Speaker 3: Michael Berry, are paying some different views on individual names,
Speaker 3: but I'm interested as so. You know, we were talking
Speaker 3: of Ali Baba more of the rejuvenation, the rerientation, the
Speaker 3: dissecting of this business.
Speaker 5: What does the future look like, how are.
Speaker 3: They managing to stabilize, how are they thinking about ips
Speaker 3: and like any hints thet with.
Speaker 7: The IPOs, it's still unclear, but you can see Ali
Speaker 7: Baba really making a big push into the AI space.
Speaker 5: So that's a good news.
Speaker 7: But the bad news is it's rivals are also doing
Speaker 7: the same and you see the same thing playout here
Speaker 7: in the US, the AI halo, so to speak. But
Speaker 7: now it's kind of fres a little bit. We have
Speaker 7: investors already questioning when they will see the payout of
Speaker 7: their millions of investments into AI.
Speaker 5: But in China the same is playing out.
Speaker 7: Ali Baba has made huge stakes into the AI industry,
Speaker 7: and so has pddnj DO dot Com. And that's why
Speaker 7: I think it will just always be a three way
Speaker 7: rival for those Bloomberg.
Speaker 4: Says a La on the China Tech Beat. Thank you
Speaker 4: very much. Let's discuss whether Ali Baba's should he adjustments
Speaker 4: could position it to recapture market share from the likes
Speaker 4: of PDD and other competitors now with Jacob Cook, CEO
Speaker 4: of WPIC Marketing and Technologies, is a firm which drives
Speaker 4: market expansion for global brands in China but also Japan,
Speaker 4: South Korea and more. And it was interesting I wanted
Speaker 4: to kind of start talking about the e commerce landscape,
Speaker 4: but as Isabelle outlined quite clearly, those same e commerce
Speaker 4: names are increasingly thinking about cloud basically in AI. Good morning,
Speaker 4: the e commerce market in China.
Speaker 1: H good morning.
Speaker 8: It's really signed gone from a two horse race over
Speaker 8: the years between j D and Alibama into a four
Speaker 8: horse race now with China's TikTok, Douian and PDD. What
Speaker 8: we really like to think about the reports that came
Speaker 8: out as we've kind of digested through them, is they're
Speaker 8: actually maybe a little bit disappointing on the overall revenue,
Speaker 8: but should good growth in terms of GMB and up
Speaker 8: until now, a lot of the growth from the competitors
Speaker 8: has actually eaten into a lot of that, so it's
Speaker 8: stabilized there and stabilized with JD. That was a great
Speaker 8: result too as well. So in terms of that landscape,
Speaker 8: JD had a much shorter cycle in terms of changing
Speaker 8: what they wanted to do from the subsidies that they
Speaker 8: were giving away to consumers many years ago to really
Speaker 8: operational efficiencies and getting closer and tighter supply chains.
Speaker 1: So that changed. I think we saw ninety two percent
Speaker 1: increase and profit with them, so that was great. Ali
Speaker 1: Baba's not through that transition yet.
Speaker 8: Eddie, who has been very clear about that that he's
Speaker 8: not really focused on bottom line profits yet until he
Speaker 8: gets a lot of this divergence and restructuring and stuff done,
Speaker 8: and we've seen their GMP hold as well, and I
Speaker 8: think was even up a couple of points, so that's
Speaker 8: been really good. I think that tells us that they're
Speaker 8: probably pretty happy with where they are in their transition.
Speaker 3: Jacob, how destabilizing for the global brands that you represent
Speaker 3: is it when a company such as Eli Webber is
Speaker 3: doing a re orientation or restructuring. How willing are they
Speaker 3: to stay with to try and grow in China at
Speaker 3: the moment.
Speaker 8: I think extremely well. I think Ali Baba has always
Speaker 8: been a very good partner. The people and that you
Speaker 8: know that you end up engaging with as a brand
Speaker 8: under their Hunjo campus are actually very professional and usually
Speaker 8: a lot of the invest in the business in the
Speaker 8: individual categories too. But what was also announced is we're
Speaker 8: going to get a whole bunch more merchant programs too
Speaker 8: as well, and we ways to advertise, So we're excited
Speaker 8: about that level of innovation overall. You know, customer acquisition
Speaker 8: costs that they're fairly stable on team all, and they've
Speaker 8: been relatively attractive for brands to do that. It's been
Speaker 8: actually more destabilizing to have to really rush into these
Speaker 8: other trends at PDD and DOHI in which have completely
Speaker 8: different approaches to e commerce.
Speaker 4: In the moment, JD is the outlier shares rep significantly, right,
Speaker 4: is it the outlier? Is there a point of difference
Speaker 4: in its place in that market and its strategy.
Speaker 1: Yeah, it's a simpler business.
Speaker 8: It doesn't have all of the massive business units that
Speaker 8: Ali Baba does in terms.
Speaker 1: Of especially cloud competing being much larger.
Speaker 8: And they announced really what they were going to do
Speaker 8: with restructuring and off with these subsidies and race for
Speaker 8: customers is really focused on operational efficiencies.
Speaker 1: They did go through a round of management layoffs a
Speaker 1: couple of years.
Speaker 8: Ago, and to us, what we look at is that
Speaker 8: sort of being very successful. And again I think the
Speaker 8: difference is here between the two of them is what's
Speaker 8: going on with Ali Baba and how they're going to
Speaker 8: compete against in the new e commerce landscape is a
Speaker 8: longer transition process, and I see them being about halfway.
Speaker 1: Through that right now.
Speaker 3: What's your main piece of advice for a company that's
Speaker 3: wanting to access e commerce growth in China?
Speaker 5: Right now?
Speaker 8: I think my advice is to actually go for it
Speaker 8: if you've I know, there's a lot of headwinds in
Speaker 8: the economy, especially due to real estate. But if you
Speaker 8: take away you know, luxury goods, which really isn't aligning
Speaker 8: with that new younger consumer that's more into Lulu eleven,
Speaker 8: and you take away durables, which are related to new
Speaker 8: home sales.
Speaker 1: E commerce growth in China is still lower double digits.
Speaker 8: And we saw you know, a Grade six eighteen a
Speaker 8: couple of months ago, and we're all really optimistic about
Speaker 8: eleven eleven in a lot of categories, you know, excluding
Speaker 8: the ones.
Speaker 1: That I just mentioned.
Speaker 3: Jacob Cook, CEO of WPIC Marketing and Technologies, we really
Speaker 3: appreciate the expertise.
Speaker 5: Thank you.
Speaker 3: Coming up, look a closer look at how Google Search
Speaker 3: might be providing the giant with the AI advantage.
Speaker 5: That's next, bomog Technology.
Speaker 4: Taking a look at Google. Following the federal court ruling
Speaker 4: last week that Google is an illegal monopoly, We're taking
Speaker 4: a closer look at the search giant's influence with AI.
Speaker 4: Publishers face a choice between offering up their content for
Speaker 4: use by AI models that can make their sites obsolete
Speaker 4: and disappear from Google Search, which is a top source
Speaker 4: of traffic. Let's break it all down with Bloomberg's Julia Love,
Speaker 4: who joins me here on set. What we're really talking
Speaker 4: about here is web crawler, in other words, a mechanism
Speaker 4: to go through a website's data and persis in search,
Speaker 4: and that gives Google an advantage because some of that
Speaker 4: data ends up in the training of large language models.
Speaker 4: Essentially good Morning in Morning.
Speaker 2: Yes, so Google has been at this for decades now.
Speaker 2: It crawls the web millions of different sites to be
Speaker 2: able to show a detailed index to users, but that
Speaker 2: now gives it an edge over search startups that are
Speaker 2: trying to get into the game because they want to
Speaker 2: crawl too. But many websites block pretty much everyone from
Speaker 2: crawling except for Goodle and Microsoft's bing, and so startups.
Speaker 5: Are at a real disadvantage to choose whether or not
Speaker 5: to crawl.
Speaker 3: Ultimately, Julia, there's also the macro perspective that regulators are
Speaker 3: really worried about this advantage that Google seems to have
Speaker 3: in the world of AI. They already think it's a
Speaker 3: monopoly in search. This might just double down on it.
Speaker 2: Yes, absolutely, I think there's underscores that this is just
Speaker 2: one of many advantages that Goodle continues to have in
Speaker 2: the AI race. Publishers face a difficult choice, and they're
Speaker 2: very worried about the AI overviews that doodle displays at
Speaker 2: the top of search and what that could mean for
Speaker 2: their traffic. But they worry that if they blocked the
Speaker 2: doodle back from crawling, then that will affect their visibility
Speaker 2: of Goodle search, which would just be a death blow.
Speaker 2: And that's said consideration that they don't face with search
Speaker 2: startups like Perplexity, where it's easier to just block the crawler.
Speaker 3: Meanwhile, I think overviews is going live in new countries today.
Speaker 5: Julia Love brilliant to have you. Thank you.
Speaker 3: Now, let's take a look at all of this in
Speaker 3: the context of the reports that Bloomberg has been bringing
Speaker 3: you about the Department of Justice considering breaking up Google.
Speaker 3: It would be a rare antitrust move. It's bringing Sarah Lamb,
Speaker 3: senior fellow at the Technology Policy Institute, and Sarah, we're
Speaker 3: just hearing about, ultimately the fears that AI, the dominance
Speaker 3: that Google has in AI just once again doubles down
Speaker 3: on its monopolistic traits that have already been seen. Do
Speaker 3: you agree with that. Do you think that antitrust breaking
Speaker 3: it up could help?
Speaker 4: Well?
Speaker 9: Right now, we're ten days out after Judge of Meta
Speaker 9: released a ruling on August fifth, after a ten week
Speaker 9: bench trail on US versus Google, and so the talk
Speaker 9: about remedies of possibly breaking up Google, that's all going
Speaker 9: to start September fourth with the remedies hearing. We can
Speaker 9: talk about what those remedies are being floated as, but
Speaker 9: we won't know what the Justice Department recommends until then.
Speaker 4: We won't know. But one of the ideas that we
Speaker 4: reported is on the table, citing sources, right, is the
Speaker 4: divestment of data. If you read the story the original
Speaker 4: port from bluebos near Nyland, that's what is being discussed.
Speaker 4: Maybe you divest it is its own entity. Do you
Speaker 4: see a way that would work in practice?
Speaker 9: Sarah, Well, what's interesting is Android was discussed at the
Speaker 9: Google Pixel event being part of implementing Gemini in with search.
Speaker 9: The Android question is is very interesting because it's a
Speaker 9: global market for Android and the US market is only
Speaker 9: a fraction of who uses Android. It's not clear at
Speaker 9: all that Android is you know, core to the general
Speaker 9: search question in the monopoly trial. So you know, we
Speaker 9: can discuss whether that could help with remedies, but really
Speaker 9: what I think is more likely is that limits on
Speaker 9: exclusive contracts and defaults would would survive or would be
Speaker 9: more reasonable within scope. But definitely people are talking about
Speaker 9: the operating system market, the browser market, how AI fits
Speaker 9: into everything. But one thing to note though is that,
Speaker 9: you know, like Microsoft, the Microsoft case, like AT and
Speaker 9: T case, it's going to take several years for us
Speaker 9: to go through appeal and remedy and settlements. So what
Speaker 9: is AI powered search going to look like in three years,
Speaker 9: four years? I think that's an important question.
Speaker 4: Sarah Olan, Senior Fellow at the Technology Policy Institute, Thank you.
Speaker 3: Is X a failing social network? Well, that's the hypothesis
Speaker 3: come from Bloomberg Opinions Dave Lye saying in his latest
Speaker 3: piece that with a platform losing advertisers even getting under
Speaker 3: increasing e scrutiny from the regulators, social platform quote weeks
Speaker 3: of failing social network syndrome, Bloomberg Opinions Daily is here
Speaker 3: with more and you coin you use reoriented a phrase,
Speaker 3: borrow a pretty famous restaurant critic and repurpose it.
Speaker 5: Look, why does it reek of a failing social platform?
Speaker 3: For many with the Trump discussion, it's one of the
Speaker 3: most active it's been for a while.
Speaker 10: Well, this is a phrase that Antsy Bordain, as you said,
Speaker 10: use to describe restaurants that were going under. And the
Speaker 10: way he described it is it wasn't they'd go under
Speaker 10: overnight or even for a few months or a while.
Speaker 10: But there's something in the air when there's a place
Speaker 10: that isn't quite right. And I said that applies two
Speaker 10: X formerly known as Twitter, of course.
Speaker 4: And it's for many reasons.
Speaker 10: I think what's happened on that network since Elon Musk
Speaker 10: took it over, quite clearly, is it has become almost
Speaker 10: a single issue network for Elon Musk's politics, this issue
Speaker 10: of the culture wars, as we describe it, and what
Speaker 10: is happening less on X is some of the communities
Speaker 10: that made many normal people want to use it in
Speaker 10: the first place. So talking about football, talking about music,
Speaker 10: talking about books, whatever, those communities are finding it harder
Speaker 10: to interact with each other, and certainly no new people
Speaker 10: seem to be joining to joining those discussions in a
Speaker 10: way they might have done previously.
Speaker 3: And look, if you go to your own X page
Speaker 3: have been posting since twenty twenty three. But you're almost
Speaker 3: forced to re engage with the platform for the story,
Speaker 3: and Emil Musk re engage with you.
Speaker 4: Yes, quite so.
Speaker 10: I haven't posted yet for almost a year, and that
Speaker 10: was based on my feelings towards what my feed was
Speaker 10: showing me in terms of the types of content I
Speaker 10: was getting without following certain users, and I didn't feel like.
Speaker 4: It was a yes.
Speaker 10: So, well, this is something that Emil must sink to
Speaker 10: me today or mentioned me about today. I checked my
Speaker 10: screen time. It's actually average of nineteen minutes a day
Speaker 10: this week, and that was only because I downloaded the
Speaker 10: app to listen to his conversation his interview with Donald
Speaker 10: Trump earlier in the week. So without that, which went
Speaker 10: on for almost a couple of hours, I think my
Speaker 10: time on x would be very very minute. I check
Speaker 10: in on it to see what's happening. I'm a journalist,
Speaker 10: of course I need to do that. But in terms
Speaker 10: of engaging with the network, I think it's usefulness has
Speaker 10: gone now, but I think it will. I think it
Speaker 10: will continue in some form for a while. But in
Speaker 10: terms of this useful utility for people, I think that
Speaker 10: that eras behind us.
Speaker 4: Davis, you know, I use x a lot, I spend
Speaker 4: a lot of time on the platform. I share a
Speaker 4: lot of my reporting. I don't see a lot of
Speaker 4: data supportive that video does very well when I show
Speaker 4: video to the content, and it's interesting. One of the
Speaker 4: communities that does well there is Tesla, of course, But
Speaker 4: your issue in the opinion piece is about advertising, advertiser
Speaker 4: flight and money. Does Musk even care about the advertisers?
Speaker 4: Is it even a priority for him to have revenue
Speaker 4: growth as a basic question?
Speaker 10: I mean, look, we've seen what Elon Musk has said
Speaker 10: directly to advertisers in words that we can't repeat on air,
Speaker 10: only to then a couple months later now sort of
Speaker 10: be suing some advertising groups in order to punish them
Speaker 10: for boycotting the platform. I mean, look, I think Elon
Speaker 10: Musk is quite sincere when he says he doesn't care
Speaker 10: if advertisers don't want some advertise on his platform, given
Speaker 10: he thinks it's now this sort of this arena for
Speaker 10: free speech. But the problem is he will need to care, right.
Speaker 10: I mean, this is a website that needs money to survive.
Speaker 10: As as rich as your Musk is, it still needs
Speaker 10: to be a functioning business. And I think that's going
Speaker 10: to be Twitter's problem as we go past the election,
Speaker 10: because right now I think a lot of the attention
Speaker 10: on it is to do with the presidential election. Once
Speaker 10: the votes accounted, people may move.
Speaker 4: Yes, I have a lot of questions about monetizing groc
Speaker 4: or monetizing X through Grock and XAI. Bluebag's Opinion Daily.
Speaker 3: Thank you very much, Welcome back to Bluemore Technology. I'm
Speaker 3: Caroline Hid in New.
Speaker 4: York and I ed Lovelow in San Francisco. A quick
Speaker 4: check in on the markets and as that one hundred
Speaker 4: is up for a sixth straight session, there was a
Speaker 4: seven day run of games that ended July tenth, and
Speaker 4: we talked a lot about how over many weeks actually Then,
Speaker 4: as that one hundred is under pressure, we're kind of
Speaker 4: bracing still from video earnings on the twenty eighth of
Speaker 4: this month. But now the thirteen f look back, some
Speaker 4: of the economic data is a factor. Those single names
Speaker 4: are quite interesting. Again, it's kind of backward looking, but
Speaker 4: if you think about the megacaps, there were notable funds
Speaker 4: so Struck and Miller who cut exposure to certain megacat
Speaker 4: names in the second quarter. Many increase their positions in video,
Speaker 4: which is notably higher today having gone past the high
Speaker 4: which was I think July eighteenth. Tesla is also interesting,
Speaker 4: up six percent, some funds increased, some funds decreased. No
Speaker 4: real news catalyst out there, but we're going to get
Speaker 4: to a really interesting conversation on Tesla and full self
Speaker 4: driving in a few minutes time.
Speaker 11: KARRC.
Speaker 4: Yeah.
Speaker 3: First, let's just quickly check in on a big mover today,
Speaker 3: Cisco rising, after giving a pretty bullish revenue forecast for
Speaker 3: the current period. It's all about a rebound and orders,
Speaker 3: even though it of course announced plans to cut thousands
Speaker 3: of jobs as part of a strategy shift. As kept
Speaker 3: to Boom Mega Intelligence analyst u Jinho and rejin Look,
Speaker 3: it's that inventory digestion that is now in the rear
Speaker 3: view mirror, that job cuts looking forward.
Speaker 12: Yeah, thanks Caroline, So I think part partial in terms
Speaker 12: of the job cuts. I thought the first round of
Speaker 12: job cuts that they announced a couple of quarters back
Speaker 12: wasn't enough, and essentially they're trimming the fat on their
Speaker 12: legacy business to really drive up the cash cloud of
Speaker 12: the networking business.
Speaker 2: Now.
Speaker 12: One of the things that they said on the call
Speaker 12: was that they're rediverting some of those cost savings to
Speaker 12: the growthier parts of the business, which is essentially this
Speaker 12: Splunk observability plus the security side of the business, which
Speaker 12: I think is the right move.
Speaker 4: It was in Good Morning, It's dead in SF. What's
Speaker 4: the Cisco story? You know, when Ian King was on
Speaker 4: the show yesterday reporting it was about a company and transition.
Speaker 4: I thought that many quarters ago it was already a
Speaker 4: company and transition more focused on software and ed.
Speaker 12: You know, that's ian as one hundred percent right the
Speaker 12: way I view from a revenue standpoint, Physical twenty twenty
Speaker 12: five was going to be a transition year, just primarily
Speaker 12: because of the backlog head when there's some residual backockhead
Speaker 12: when Francisco is going through. But one of the things
Speaker 12: that they are trying to monetize is the data that
Speaker 12: goes within inside the network, and that's one of the
Speaker 12: reasons why, or the main reason why they made this
Speaker 12: Plunk acquisition. Now, it's going to take, like any large
Speaker 12: acquisition does, it takes several quarters to really integrate into
Speaker 12: the system, and then with the hopes of possibly monetizing
Speaker 12: the data for faster growth and better margins.
Speaker 4: Is there an AI story for Cisco. You know, if
Speaker 4: you think about some of the trading action, particularly June
Speaker 4: July through August, maybe it was the idea that there
Speaker 4: isn't as much of one as we thought.
Speaker 12: Yeah, so a couple of things that from a core
Speaker 12: networking standpoint, there was a small AI story. What they
Speaker 12: said on the call was that there was an additional
Speaker 12: billion dollars of orders. So that brings it to about
Speaker 12: two billion dollars of total quiul of orders that they
Speaker 12: see to date. But from a revenue standpoint, it's not
Speaker 12: that small on a fifty five to fifty six billion
Speaker 12: dollar base. But the longer term is if we think
Speaker 12: that data is going to be a goal to fill
Speaker 12: to fuel these large language models, you know, Cisco is
Speaker 12: potentially in the nexus of that, right because data has
Speaker 12: to run through the network.
Speaker 3: U jinho all, thank Cisco, We thank you. Now let's
Speaker 3: just get back to Tesla. Ed you were appointing us
Speaker 3: there a moment ago, because last month we spoke with
Speaker 3: truest analyst William Stein, who said he nearly crashed while
Speaker 3: using an older version of full selfe driving in a
Speaker 3: Tesla democar.
Speaker 5: He published a research.
Speaker 3: Note on the experience, claiming FSD just wasn't ready for
Speaker 3: the prime time. There was a lot of questions for
Speaker 3: Will from around the world and why he didn't try
Speaker 3: the latest update of FSD, So why didn't he film
Speaker 3: that experience too?
Speaker 5: He went back to the Tesla store.
Speaker 3: He took the test again, this time using version twelve
Speaker 3: point five and an updated iteration of FSD. His conclusion, look,
Speaker 3: Tesla's FSD version twelve point five was a fast fail. Well, Stein,
Speaker 3: he's here with us, so why was it a fast fail?
Speaker 13: Very early into my test drive, FSD took this car
Speaker 13: through a red light making a left turn from the
Speaker 13: second to left and not turn lane.
Speaker 4: Illegal move.
Speaker 13: Didn't feel terribly unsafe, but clearly illegal. If I were
Speaker 13: driving the car and there were an officer there, I'm
Speaker 13: pretty confident I would have been stopped. So from my perspective,
Speaker 13: even though didn't get in a crash and it wasn't
Speaker 13: even safe for me to really intervene, it was safer
Speaker 13: for me to let the car make this turn. This
Speaker 13: was a clearly illegal move. So from my perspective, this
Speaker 13: was a fast fail.
Speaker 4: Let's do this again. Will the basics of the test.
Speaker 4: Where were you whose test the vehicle were you using,
Speaker 4: what was the duration of the test, and why did
Speaker 4: you not film it in full?
Speaker 13: Yeah, let me address the last question first. I'm not
Speaker 13: a video a vlogger or whatever. I'm not a social
Speaker 13: media personality, right. I'm an equity research analyst at Truce Securities,
Speaker 13: writing research for our institutional investor clients. Film or video
Speaker 13: is not a typical media that I operate in. Regarding
Speaker 13: the test, it was similar to the two prior ones
Speaker 13: that I did, and that included using a test vehicle
Speaker 13: from Tesla with the latest software that they had available
Speaker 13: at the time. It's in suburban New York and it
Speaker 13: was about a ten mile drive that I asked the
Speaker 13: car to take me on to a local spot close
Speaker 13: to where I.
Speaker 4: Live and back and that was the test.
Speaker 13: And in each case there were different characterizations of how
Speaker 13: the car felt and the level of safety, but in
Speaker 13: each case there were failures, making it really not, let's
Speaker 13: say appropriate to think about full self driving in the
Speaker 13: way that a robotaxi would.
Speaker 4: Well, a lot of people ask me, why are you
Speaker 4: getting this guy on the show, and you kind of
Speaker 4: answered that you are a research analyst who provis research
Speaker 4: the institutional investors looking at Tesla. But what interested me
Speaker 4: is you are a semiconductor an AI analyst, and Elon
Speaker 4: Musk says on the earning schools with some regularity, to
Speaker 4: understand our future as an AI or autonomous driving company,
Speaker 4: go and use it for yourself. So you did my
Speaker 4: question your thesis on the jump from your test to
Speaker 4: a robotaxi future a Tesla. Why do you not see it?
Speaker 13: Well, it's just not obvious today. Right now the company
Speaker 13: is already generating revenue from FSD. It's one of the
Speaker 13: three major AI projects that we know about going on
Speaker 13: at Tesla. We believe there's significant value already embedded in
Speaker 13: these AA projects in the stock, so we think it's
Speaker 13: important to understand whether this works or not. My assertion
Speaker 13: is that it doesn't work today. That doesn't mean that
Speaker 13: Tesla can't generate revenue from it, and it also doesn't
Speaker 13: mean that they can't get there eventually, just not ready today.
Speaker 5: And there is the crux of the issue. How important
Speaker 5: is it that we see robotaxi in October?
Speaker 13: Well, I think the idea that FSD needs to work
Speaker 13: is critical to the stock. In my opinion, only about
Speaker 13: a third of the stock's value is wrapped up in
Speaker 13: the automotive production and energy capture and storage businesses. About
Speaker 13: two thirds of the value of the stock are wrapped
Speaker 13: up in these AI projects. So he's got to show
Speaker 13: something at this Robotaxi day. He's already pushed out that
Speaker 13: date from August to October. But if we have the
Speaker 13: supposition that Robotaxi will depend on FSD, that is not ready.
Speaker 13: So let's see.
Speaker 4: Well, I'm an FSD user. I got version twelve point
Speaker 4: five the day it was released. I'm on twelve point
Speaker 4: five point one point three. At the moment, it's not perfect.
Speaker 4: Today I can be completed the dog leg at Lombard
Speaker 4: and van Ness for the first time. Will you keep
Speaker 4: testing with this regularity.
Speaker 13: I'll test when there's you know, let's say, a reason
Speaker 13: a major upgrade, or if there's a request by the company.
Speaker 13: Elon Musk told me to is the way I like
Speaker 13: to say it. Right after Q one he challenged investors
Speaker 13: to go try it.
Speaker 4: I did. We wrote about it after Q two, same thing.
Speaker 13: The criticisms I got were around, hey, twelve dot five
Speaker 13: is such a massive upgrade.
Speaker 1: You're missing the mark.
Speaker 13: You have to go try this newer one and see
Speaker 13: the improvements. And I did that, and I would say,
Speaker 13: you know, improved in some ways, but still a critical
Speaker 13: failure in my opinion.
Speaker 4: William Stein Truest, Managing Director of Tech Equity Research, thank
Speaker 4: you very much. Next, Singapore and state owned investor Temisex
Speaker 4: spent billions of dollars in the second quarter buying shares
Speaker 4: in US tech giants just before the sector dropped. In July,
Speaker 4: Temasek increased the value of its holdings in eleven big
Speaker 4: tech firms by three point three billion dollars in the
Speaker 4: three months through the end of June. The majority of
Speaker 4: the increases went into six of those names, Microsoft, Apple, Nvidia, Alphabet, Meta,
Speaker 4: and Amazon b At the end of July, however, most
Speaker 4: of those companies saw their stock slide amid concern about
Speaker 4: the extent of AI related gains and also fears of
Speaker 4: a recession. Okay, coming up on the show, we're going
Speaker 4: to be joined by Trey Stevens, executive chairman, co founder
Speaker 4: of Anderil and a big investor partner of Founders Fund.
Speaker 4: That's next, the Sploombog technology Time for Talking tech, and
Speaker 4: first up, Apple pushes ahead with a tabletop robot the
Speaker 4: company's moving forward with the development of a tabletop home
Speaker 4: device that's said to combine an iPad like device with
Speaker 4: a robotic limb. The check Giant has several hundred people
Speaker 4: working on the new hardware as it searches for new
Speaker 4: sources of revenue. Plus a video is said to have
Speaker 4: scrapped millions or scrapes, sorry, millions of YouTube videos without
Speaker 4: consent from creators to train and develop its AI models.
Speaker 4: That's according to a new federal lawsuit FILD in California.
Speaker 4: The AI Dialing allegedly instructed employees to use tools to
Speaker 4: download videos and evade detection in an effort to train
Speaker 4: its Cosmos AI video projects. And fintech firm Klan is
Speaker 4: said to be close in choosing Goldman Sachs to lead
Speaker 4: its USIPO next year. That's according to sources who also
Speaker 4: say the company is seeking evaluation of about twenty billion dollars.
Speaker 4: Deliberations are ongoing. Details of the IPO could change Carrot.
Speaker 3: Well, talking of companies that are currently private and making
Speaker 3: some bigger rounds. Defense technology start up Andreil has raised
Speaker 3: one and a half billion dollars in a new funding
Speaker 3: round and plans to spend one hundreds of millions on
Speaker 3: a new facility to manufacture its rockers, it's underwater vehicles
Speaker 3: and other autonomous weapon systems here in the US.
Speaker 5: Tell us more about the deal. Tray Stevens, his executive.
Speaker 3: Chair, is co founder of andrel Of course, you're own
Speaker 3: Founder's Fund as well, which puts a big chunk of
Speaker 3: change into ANDREIL from fourteen billion dollar market capitalization, the
Speaker 3: raising of funds that's from manufacturing.
Speaker 5: Where will that be? Why make it in the US?
Speaker 14: Yeah, the investment by Founder's Fund officially makes it the
Speaker 14: largest position that Founder's Fund has had in our twenty
Speaker 14: year history. So, as the founder of the co founder
Speaker 14: of the company, that's kind of exciting to be on
Speaker 14: both sides of the table there. The Arsenal one project
Speaker 14: is a significant undertaking for the company. It's kind of
Speaker 14: predicated by this recognition that our weapons inventory in the
Speaker 14: United States literally is missing as zero on the end
Speaker 14: of it. And we may be okay on day zero,
Speaker 14: stretched on day thirty, but there's no way that we
Speaker 14: have the amount of equipment that we need if we
Speaker 14: were to go into an active conflict on day three hundred.
Speaker 14: What Arsenal is all about is putting our own skin
Speaker 14: in the game, rather than asking the taxpayer to polling
Speaker 14: up all of the risk and giving a head start
Speaker 14: a leap into production of these systems at quantity. So
Speaker 14: we're not asking the taxpayer to do that by themselves.
Speaker 3: The taxpayer does do it for legacy rivals. Why shouldn't
Speaker 3: they do it for you? Why do it on your
Speaker 3: own right?
Speaker 4: That is the historical model.
Speaker 14: The problem is is that is exactly what slows innovation
Speaker 14: because the business model of the legacy defense industry is
Speaker 14: cost plus. It's let's wait until the government pays us
Speaker 14: to do something and then we'll get some small amount
Speaker 14: of margin on top of that. This isn't the way
Speaker 14: technology innovation works. As you know, the requirement is to
Speaker 14: step up, put your own capital into internal research and development,
Speaker 14: and then you have to kind of take the position
Speaker 14: of betting on yourself that the thing that you're building
Speaker 14: and developing is the thing that the customer is going
Speaker 14: to buy at the end of the day.
Speaker 4: And that's exactly what we're doing at rol Trey. Good morning.
Speaker 4: I saw post me on social media about the location
Speaker 4: of the facility. I think you might have being facetious,
Speaker 4: but where will it be not San Francisco, but will
Speaker 4: it be in Socoo Right, I was.
Speaker 14: Frankly amazed at the amount of people that thought I
Speaker 14: was being serious when I said that we were deliberating
Speaker 14: putting it in San Francisco. Were obviously not putting Arsenal
Speaker 14: one in San Francisco. You know, I think there are
Speaker 14: a lot of states that are very much in play.
Speaker 14: Interesting will come down to availability side availability Greenfield versus Brownfield,
Speaker 14: and the incentives that we're able to get from the
Speaker 14: states to accelerate as quickly as possible into the program.
Speaker 14: So not sure yet, can't really come in any further
Speaker 14: than that, but hopefully we'll have more information in the
Speaker 14: coming months.
Speaker 4: There are just so many people that credit and AIL
Speaker 4: as being so the lead leading defense tech startup. Right
Speaker 4: you talk to Kara really interesting about don't put the
Speaker 4: burden on the taxpayer to fund the growth of operations.
Speaker 4: But I'm trying to sort of build a timeline of
Speaker 4: when all of the big money from government does go
Speaker 4: to ANDERIL and that there's an openness to just engage
Speaker 4: with Silicon Valley.
Speaker 14: The culture is certainly shifting. We've seen tremendous moves since Honestly,
Speaker 14: SpaceX and Palenteer were founded earlier on in the twenty
Speaker 14: first century. Andreil is stepping into that wave. We have
Speaker 14: the benefit of being able to stay and on the
Speaker 14: shoulders of giants that have done an incredible job creating
Speaker 14: that market space. You know, I think the defense tech
Speaker 14: industry as a whole has seen a major boom that
Speaker 14: you guys have talked about quite a bit here on
Speaker 14: air at Bloomberg. The question is really about, like how
Speaker 14: much the government is going to be able to lean
Speaker 14: into picking winners, not in an unfair sense, but really
Speaker 14: in the sense of identifying the companies that are going
Speaker 14: to be able to scale to the size of the problem.
Speaker 14: And that's the focus that we've had since the beginning,
Speaker 14: is not on research and development projects, but on scaling
Speaker 14: into production requirements that the warfighter has. And that's a
Speaker 14: culture that's shifting over time as we move away from
Speaker 14: very high cost, low volume, legacy exquisite systems into some
Speaker 14: of these higher volume charitable assets in the autonomy space
Speaker 14: that we're focused on as a company.
Speaker 3: How does the cultural change depend on who's in the
Speaker 3: White House. It's a sensitive question, but when you look
Speaker 3: at who's first put money into andre Ill. Well JD.
Speaker 3: Vounce was one of them. He could be in the
Speaker 3: White House. Would that make a big change?
Speaker 5: Do you think?
Speaker 14: You know, it's obviously like a weird conversation in Silicon
Speaker 14: Valley because there's this kind of belief that defenses this
Speaker 14: weirdly republican thing. And the reality is for anyone that
Speaker 14: works in DC, is you know that this is just
Speaker 14: completely false. Defense is a bipartisan area, you know, as
Speaker 14: all the other bills are kind of drudging their way
Speaker 14: through Congress, the National Defense Authorization Act passes within your
Speaker 14: super majority every single year. I don't think we're affected
Speaker 14: at all by politics, whether it's you know, a Harris
Speaker 14: administration or a potential second Trump administration. We're in a
Speaker 14: good place in either case. It's more about leaning into
Speaker 14: the things that the Pentagon needs and not really worrying
Speaker 14: about how politics affects that.
Speaker 4: There is some state level politics. Elon pulling SpaceX from
Speaker 4: Hawthorne in California, But Andreil is so cool to socow story.
Speaker 4: I'm sorry to go back to it, Trey, but what
Speaker 4: do you make of that?
Speaker 14: You know, for us, the location of our research and
Speaker 14: development facilities is largely predicated on access to talent. It's
Speaker 14: really important that we have the ability to recruit and
Speaker 14: retain the best software engineers, the best hardware engineers that
Speaker 14: are going to be able to there will be critical
Speaker 14: to us building the products that we're working on. So
Speaker 14: do I think that it would be just as easy
Speaker 14: to do that in places that don't have a critical
Speaker 14: mass of engineering talent. Not necessarily. We have no plan
Speaker 14: to leave Southern California as our headquarters at any point
Speaker 14: in the future right now.
Speaker 4: Tray Stevens, executive chairman and co founder of Anderrell and
Speaker 4: partner at Founders Fund. Of course, thank you. Almost half
Speaker 4: of companies need more than six days to recover data
Speaker 4: and restore usual business. That's one of the takeaways from
Speaker 4: Khesity's latest report on cyber resilience. San Jaypoon and CEO
Speaker 4: and president of kah City joins me. Now and the
Speaker 4: reason d DOSSL denial service is definitely on the rise.
Speaker 4: Bad actors are more active. Other conclusions from your research, Yeah,
Speaker 4: thank you having me.
Speaker 11: Yes, we did a survey of three thousand IT and
Speaker 11: security people in US and the G seven countries. There
Speaker 11: were three things that stirre at one which I expected,
Speaker 11: which is two thirds of the people's surveyed said they've
Speaker 11: been ransomware attacked and they expected to increase.
Speaker 4: But two things start.
Speaker 11: One was two percent of them believed they could be
Speaker 11: resilient in a day, and approximately fifty percent said they
Speaker 11: would take them a week to result.
Speaker 4: That's not acceptable.
Speaker 11: And the second aspect of it was almost ninety percent
Speaker 11: of them said they believed the organization would pay the ransom,
Speaker 11: and seventy five percent of them believe the ransom will
Speaker 11: be over a million. That's also not acceptable. So you know,
Speaker 11: there's a treasure trove of data and what we surveying,
Speaker 11: and I'm a data junkie who I found those three
Speaker 11: results to be somewhat alarming.
Speaker 3: And therefore they do what Sanjay I imagine they used cohesivey.
Speaker 3: But at what point, how do you get someone to
Speaker 3: be able to tackle this within a matter of days
Speaker 3: rather than a matter of weeks.
Speaker 11: Well, listen, I think the most important thing we learned
Speaker 11: from the CrowdStrike Microsoft fallout, whether you know the formerly
Speaker 11: Artists formally known as Twitter x was DDoS and the
Speaker 11: Microsoft dad US attack is we have as an industry
Speaker 11: have to focus on resilience. It's a little bit like
Speaker 11: the healthcare industry, Caroline, when we all faced COVID, it
Speaker 11: didn't matter whether you're.
Speaker 4: Going to get COVID or not.
Speaker 11: The question was how quickly could you recover from it?
Speaker 11: And you almost have to plan for the fact that
Speaker 11: it's not just if, but when you get attacked, and
Speaker 11: you're going to probably hit get ransomware attack, how quickly
Speaker 11: can you recover? Resilience is the most operative world. It
Speaker 11: should not take us days to recover from that CrowdStrike,
Speaker 11: Microsoft fallout.
Speaker 4: It should be ours nine environment. It must be good
Speaker 4: for your business, though, how's cahesity doing? You know, if
Speaker 4: the activity and the defense is on the up.
Speaker 1: Well, we just finished our fiscal year.
Speaker 11: Since you asked me, I'll break it out here on
Speaker 11: your program.
Speaker 4: We had a record year.
Speaker 11: We closed our year at five to forty nine million
Speaker 11: in revenue, growing twenty six percent, which is the fastest
Speaker 11: among all all our peers for the fiscal twenty four
Speaker 11: and we turn free casual positve, which is the first
Speaker 11: time any of our companies.
Speaker 4: So profitable growth.
Speaker 11: As you know, we announced our intent to acquire Bear
Speaker 11: to us, which puts us when we close that transaction
Speaker 11: pending regulatory approvals as the biggest in our space. So
Speaker 11: business is good and we're really really focused on serving
Speaker 11: our customers.
Speaker 5: Twenty seconds. You're going to go public anytime soon.
Speaker 11: We have to close this transaction.
Speaker 4: That's step number one.
Speaker 11: But the anticipation is once we close the transaction digested
Speaker 11: with the next stage is hopefully a public offering at
Speaker 11: the right time.
Speaker 3: Sanjay, great to have you on, Sanjay Poon and CEO
Speaker 3: and president of cahesitys and fascinating data is business and
Speaker 3: about the world of cybersecurity.
Speaker 4: But that does it for this edition of bluemin Technology.
Speaker 4: Yet I don't forget check out the podcast. You know
Speaker 4: where to find it on the terminal, Apple Spotify, and
Speaker 4: iHeart the team in New York, the team here in
Speaker 4: San Francisco that does it. This is Bloomberg Technology