WEBVTT - Memory Prices Hit Cisco, Apple Faces Siri Snags 0:00:02.560 --> 0:00:13.600 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 0:00:13.680 --> 0:00:17.439 from coast to coast with Caroline Hyde in New York 0:00:17.760 --> 0:00:22.079 and Vla Low in San Francisco. 0:00:22.960 --> 0:00:26.520 This is Bloomberg Tech coming up. Memory chip prices strike again, 0:00:26.880 --> 0:00:29.720 this time taking a toll on Cisco, even as AI 0:00:29.800 --> 0:00:31.240 demand surges will break it down. 0:00:31.320 --> 0:00:34.839 Plus, Apple's revamp of its Siri voice assistant hits new 0:00:34.960 --> 0:00:37.639 snags that could delay the release of some features. 0:00:38.840 --> 0:00:42.519 An Altruist launched AI tax planning tool, and within ours 0:00:42.840 --> 0:00:46.480 wealth management stocks tumbled. The CEO of Outist joins us 0:00:46.600 --> 0:00:47.239 to discuss. 0:00:47.640 --> 0:00:49.800 First we check in on these markets that in many 0:00:49.800 --> 0:00:53.199 ways are still digesting AI disruption. We focus in on 0:00:53.240 --> 0:00:54.800 Cisco that I know you'll go to. We're off by 0:00:55.080 --> 0:00:58.600 one percent on the Nastak one hundred. That anxiety of costs, 0:00:58.640 --> 0:01:01.840 of memory costs really building into the benchmark. But more broadly, 0:01:01.840 --> 0:01:05.240 we're all eyes on costs for consumers. CPI print coming 0:01:05.319 --> 0:01:07.560 later in the market. Just a little bit nervous ahead 0:01:07.560 --> 0:01:11.000 of that. Bitcoin down another day of five percentage point 0:01:11.000 --> 0:01:13.640 sixty seven thousand is where we trade for this particular 0:01:13.880 --> 0:01:15.440 risk asset ed What. 0:01:15.400 --> 0:01:17.800 Are you looking at there's a lot of pieces of 0:01:17.880 --> 0:01:20.640 consecutive red on the screens we've been putting up. Cisco 0:01:20.720 --> 0:01:23.520 no exception, down eleven percent, on track for its biggest 0:01:23.560 --> 0:01:27.480 drop since May twenty twenty two, and prior to today's session 0:01:27.480 --> 0:01:31.000 it was up eleven percent and had momentum. Outlook is 0:01:31.080 --> 0:01:34.400 strong on sales for the current period. AI demands there, 0:01:34.720 --> 0:01:38.640 but there's margin compression memory chip prices. Let's get more 0:01:38.680 --> 0:01:42.160 with Bloomberg Intelligence senior hardware and network analysts Wou jin Ho. 0:01:42.680 --> 0:01:44.680 It's actually probably a good time to remind us what 0:01:44.760 --> 0:01:50.040 Cisco is and what Cisco does. But the memory issue 0:01:50.080 --> 0:01:53.920 is factoring in to servers, and right now you are 0:01:54.600 --> 0:01:57.240 leading with your REACT piece on the Bloomberg terminal with 0:01:57.360 --> 0:01:59.080 the memory chip issue. What do we need to know. 0:02:01.160 --> 0:02:05.040 So really quickly with Cisco, is is the leading global 0:02:05.080 --> 0:02:08.919 provider of a networking equipment for corporate as well as 0:02:08.919 --> 0:02:11.800 for data centers, and they've actually had a foray into 0:02:12.080 --> 0:02:17.560 cloud data centers to help power some of the AI workloads. Now, 0:02:17.720 --> 0:02:21.960 what happened last quarter? They got the AI orders, you know, 0:02:22.360 --> 0:02:25.920 momentum and drove a lot of the upside on sales, 0:02:26.600 --> 0:02:30.040 but the gross margin issue especially given from the dram, 0:02:30.080 --> 0:02:31.800 pricing is a lot bigger than we had thought. 0:02:32.360 --> 0:02:34.760 Chuck Robins, though, was trying to say that, like, if 0:02:34.760 --> 0:02:37.360 anyone's going to navigate this, they're going to navigate it. 0:02:37.400 --> 0:02:39.679 They're already going to their suppliers. They're already thinking about 0:02:39.720 --> 0:02:41.600 increasing prices. How well can they handle it? 0:02:42.480 --> 0:02:45.240 Yeah, So we did the math for the third quarter, 0:02:45.280 --> 0:02:48.639 there's about two hundred basis point product derosion on gross margin. 0:02:48.680 --> 0:02:52.680 But when we look at the fourth quarter, you know 0:02:52.760 --> 0:02:55.440 they're able to stabilize that. Now, if we think about 0:02:55.440 --> 0:02:59.080 twenty twenty seven, they actually have a fairly sizable software business, 0:02:59.120 --> 0:03:02.160 and if software really starts wrapping up, we could start 0:03:02.200 --> 0:03:04.520 seeing some gross mogstability in twenty twenty seven. 0:03:04.960 --> 0:03:08.359 W Jino Blomberg Intelligence. There we have your p Cisco's 0:03:08.360 --> 0:03:11.800 results outlook pinched by memory price spike. Look, all of 0:03:11.800 --> 0:03:15.480 this is as Cisco's numbers. They highlight the heavy infrastructure 0:03:15.480 --> 0:03:18.280 build out, but have investors really questioning what happens next 0:03:18.480 --> 0:03:21.240 for the implications to software too, joining us now to 0:03:21.240 --> 0:03:24.239 go across the whole gamut. As Tony one portfolio manager 0:03:24.400 --> 0:03:27.000 tro Price Science and Technology Fund in his latest thoughts, 0:03:27.040 --> 0:03:28.920 he says that the recent software sell off is more 0:03:29.000 --> 0:03:32.520 of a valuation reset and that companies that successfully embed 0:03:32.560 --> 0:03:36.400 AI into workflows could drive stronger productivity and margins over time. 0:03:36.760 --> 0:03:38.960 And Tony, what's so great about having your voice on this? 0:03:39.040 --> 0:03:40.880 Shows you time and time again have been like the 0:03:40.880 --> 0:03:44.040 proof point the ROI is going to be productivity gains. 0:03:44.360 --> 0:03:47.120 Suddenly we've got the productivity gains. Saw a shining a 0:03:47.200 --> 0:03:51.240 light that we're actually worried it's going to really hit valuations. 0:03:51.560 --> 0:03:53.600 How do you weigh where we are in terms of 0:03:53.640 --> 0:03:55.120 the selloff and if it's overdone? 0:03:56.680 --> 0:03:58.960 Yeah, well, I think it's the key question the market 0:03:59.080 --> 0:04:01.360 is wrestling with bright now. And so when I think 0:04:01.400 --> 0:04:04.800 about it, it's it's really just what is on the 0:04:04.840 --> 0:04:07.240 right side of change, I think, and what is the 0:04:07.280 --> 0:04:10.720 inevitability here? And I think what you're seeing with plod 0:04:10.800 --> 0:04:14.960 cowork is that these agents are becoming more autonomous and 0:04:15.000 --> 0:04:18.360 they can actually execute things on their own, do more 0:04:18.400 --> 0:04:20.680 than just like you have to prompt something like chat 0:04:20.720 --> 0:04:23.800 to be team, you know, for for your your own 0:04:23.800 --> 0:04:26.440 personal chat bete. But so what it's it's exciting is 0:04:26.480 --> 0:04:29.320 that these enterprise agents, I think, are going to be 0:04:30.480 --> 0:04:32.800 more more of a force here and as we're starting 0:04:32.800 --> 0:04:34.360 to see that really pay off. And when we think 0:04:34.400 --> 0:04:36.520 about it, like I think the why the markets reacting 0:04:37.040 --> 0:04:39.479 to the way it is because if you think about 0:04:39.480 --> 0:04:42.160 it in the in the future, like, there are wide 0:04:42.160 --> 0:04:46.400 sweeping implications for what modes mean, like in terms of 0:04:46.440 --> 0:04:51.359 software as well as information services. So it's definitely a 0:04:51.440 --> 0:04:53.920 disruptive potential force here. 0:04:54.200 --> 0:04:57.320 Disruptive to some of those in your portfolio. I'm looking 0:04:57.920 --> 0:05:01.440 you are exposed to salesforce, you are exposed to accenture, 0:05:01.480 --> 0:05:03.360 which people have been worrying about the consultants side of 0:05:03.400 --> 0:05:06.719 the equation. Even Shopify and delimit strong numbers got beaten 0:05:06.800 --> 0:05:09.599 up yesterday. How are you being discerning at this moment 0:05:09.680 --> 0:05:11.880 of where you actually buy into on a dip because 0:05:11.920 --> 0:05:14.680 you do think that they'll manage to ride the software disruption. 0:05:16.200 --> 0:05:19.440 Yeah, so I think that you know there it's more 0:05:19.440 --> 0:05:22.120 important that you are the platform and not just a feature. 0:05:22.240 --> 0:05:26.480 Because you're a feature than AI agents can encode software 0:05:26.520 --> 0:05:31.799 so easily and coustiously that you essentially can be embedded 0:05:31.800 --> 0:05:34.920 in a bigger platform. And so I think that increasingly 0:05:35.120 --> 0:05:37.400 you want to make sure that you're the layer that 0:05:37.440 --> 0:05:40.760 all these agents need to coalesce around, and I think 0:05:40.800 --> 0:05:42.240 that there's going to be a lot of change here 0:05:42.279 --> 0:05:45.400 in terms of and we honestly don't know. And so 0:05:45.440 --> 0:05:47.400 I think the market is in a sell first and 0:05:47.440 --> 0:05:51.080 ask questions later mode, and so it's important to kind 0:05:51.120 --> 0:05:53.640 of stay on the right side and manage these these 0:05:53.720 --> 0:05:54.720 changes in the market. 0:05:56.320 --> 0:06:00.000 Tiny Nvidia CEO agents one has this line that software 0:06:00.040 --> 0:06:03.400 where is now worth paying for? The example he would 0:06:03.440 --> 0:06:07.359 give is Cursor. But I guess what we're trying to 0:06:07.360 --> 0:06:10.800 do with you is define what software is that is 0:06:10.839 --> 0:06:13.680 worth paying for. You just brought up Salesforce, right, so 0:06:13.720 --> 0:06:15.960 in the most recent quarter they had like more than 0:06:15.960 --> 0:06:19.560 a billion dollars of arr directly from AI and they 0:06:19.720 --> 0:06:23.720 talk about all the almost nineteen thousand agent force deals 0:06:23.720 --> 0:06:26.400 that they have, yet they're still subject to this same 0:06:26.800 --> 0:06:29.839 AI is going to eat software's lunch chat that's going 0:06:29.880 --> 0:06:32.640 on right now. Why do people not believe the traction 0:06:32.720 --> 0:06:35.440 that they have as an example that it's worth paying for. 0:06:36.720 --> 0:06:37.440 Yeah, So I think. 0:06:37.279 --> 0:06:38.880 There's two things that I think about. 0:06:39.080 --> 0:06:42.599 One is that there's just so much competition when you 0:06:42.640 --> 0:06:46.040 think about all these AI neted startups and they're pricing 0:06:46.120 --> 0:06:49.719 in a way that is really compelling and to drive 0:06:49.760 --> 0:06:53.920 ad option essentially, So you think about like image generation, right, 0:06:54.040 --> 0:06:56.039 like you pay twenty dollars at chat to bet you 0:06:56.040 --> 0:06:59.359 can generate unloaded images, whereas on Adobe or Firefly you 0:06:59.360 --> 0:07:02.320 have to pay per image generation. But you know, you 0:07:02.320 --> 0:07:05.200 can think about you know, cloud cowords in a similar 0:07:05.240 --> 0:07:08.719 way in terms of what they're pricing versus the value 0:07:08.839 --> 0:07:11.880 that they're delivering is really compelling. And so I think, 0:07:11.920 --> 0:07:14.400 what you just have a lot of price inflation, and 0:07:14.440 --> 0:07:16.800 that's why I think a lot of these you know, 0:07:16.880 --> 0:07:19.920 software companies are looking to drive adoption. You know, the 0:07:20.080 --> 0:07:22.360 economics aren't as good as the seat based model, and 0:07:22.400 --> 0:07:25.360 we're going from like a sea based model to outcomes 0:07:25.360 --> 0:07:28.280 and agents, which is a very different, different version. 0:07:29.760 --> 0:07:31.880 Just for reference to audience. And as that one hundred 0:07:31.960 --> 0:07:34.480 near session low is now down one and a quarter percent. 0:07:34.760 --> 0:07:37.160 This story started in Europe in August. I was there 0:07:37.200 --> 0:07:39.440 in London. I remember the day all the European software 0:07:39.520 --> 0:07:41.760 that was sold off. Earlier today we spoke to the 0:07:41.800 --> 0:07:43.920 ceman CEO. Let's get his take. 0:07:44.600 --> 0:07:48.520 We know that AI has the potential to disrupt some 0:07:48.560 --> 0:07:51.800 of the software businesses. I mean, if you talk about software, 0:07:51.840 --> 0:07:54.280 it runs on call centers and the like. I mean, 0:07:54.320 --> 0:07:56.800 that's fully on the block. But if you go on 0:07:56.840 --> 0:08:02.160 the other end on industrial software, simulation software, physics, space software, 0:08:02.960 --> 0:08:05.880 let's we don't see that at all. We rather see 0:08:05.960 --> 0:08:09.440 an enrichment of the software which allows more and more 0:08:09.920 --> 0:08:10.960 customers to use it. 0:08:12.720 --> 0:08:18.160 Another software CEO whose fate is very closely tied to 0:08:18.200 --> 0:08:20.200 a relationship with Nvideo, and I think it's important to 0:08:20.240 --> 0:08:24.440 point that out. But his argument is that actually specialized 0:08:24.480 --> 0:08:28.080 software is getting better because of AI. You buy that. 0:08:30.680 --> 0:08:34.760 I think so, And I think that most I think 0:08:34.960 --> 0:08:36.760 a lot of the economics that we've made and the 0:08:36.800 --> 0:08:40.679 specialization of the niches, so you know, domain specific knowledge 0:08:40.679 --> 0:08:43.679 will always be very important, and so you know, I 0:08:43.760 --> 0:08:45.920 think just general knowledge is probably going to be not 0:08:46.040 --> 0:08:48.640 take the economics, and so what really matters is like 0:08:48.760 --> 0:08:52.160 being able to put this into ROI now. At the 0:08:52.200 --> 0:08:54.679 same time, it doesn't mean that if you have a 0:08:54.720 --> 0:08:57.920 stronger model, that doesn't mean it doesn't create more competition 0:08:58.600 --> 0:09:01.280 for existing comments. So I don't think the battle is 0:09:01.440 --> 0:09:03.319 one or loss for these companies, and I think it's 0:09:03.360 --> 0:09:05.640 just important that they stay you know, front footed and 0:09:05.720 --> 0:09:08.720 incorporating the latest technology trends into their. 0:09:08.920 --> 0:09:12.000 Platform and your science Technology fund has all the trends. 0:09:12.040 --> 0:09:14.199 You're in hardware, you're in software, you're number one holding 0:09:14.200 --> 0:09:16.280 is alphabet at the moment, then in video. But going 0:09:16.320 --> 0:09:19.880 back full circle to Cisco who exposure there? What do 0:09:19.880 --> 0:09:22.880 you think about the memory price implications and how you 0:09:22.920 --> 0:09:25.560 can weather who are the winners and loses in that situation? 0:09:25.600 --> 0:09:26.079 How long for? 0:09:27.880 --> 0:09:31.600 Yeah, So I think that you know, memory is fascinating 0:09:31.640 --> 0:09:35.840 industry because one is secular trends and AI is now 0:09:36.000 --> 0:09:39.400 this new tam and then we've also gone through multiple 0:09:39.440 --> 0:09:41.760 years of under investment because memory has been a downturn. 0:09:42.520 --> 0:09:43.480 So I think one it. 0:09:43.480 --> 0:09:45.960 Is that they're secular, but there's also cyclcal elements a bit. 0:09:46.640 --> 0:09:49.320 So you know, in terms of our portfolio, we definitely 0:09:49.400 --> 0:09:52.360 own a lot of the bottlenecks where the economic value 0:09:52.360 --> 0:09:55.800 capture is in such as memory. At the same time, 0:09:55.880 --> 0:09:58.679 I think that you know, Cisco networking and this is 0:09:59.160 --> 0:10:02.520 also going to be part of in AI. I think 0:10:02.520 --> 0:10:06.320 that the implications of the memory a shortage is actually 0:10:06.320 --> 0:10:09.680 becoming more widespread and having implications that a. 0:10:09.720 --> 0:10:11.120 Lot of times the market didn't think about. 0:10:11.200 --> 0:10:13.920 So you know, it is fascinating, But I do think 0:10:13.960 --> 0:10:16.760 Cisco continue to be a really impeign company that's driving 0:10:16.840 --> 0:10:20.079 a lot on this AI adoption tourny one. 0:10:20.200 --> 0:10:23.559 Duro price great heavy back on Bloomberg Tech. Really appreciate it. 0:10:23.800 --> 0:10:27.720 Now coming up, Apple's new Sery runs into more snags 0:10:27.800 --> 0:10:31.760 during testing. What's delaying the AI up grade? We have 0:10:31.760 --> 0:10:46.920 the Bloomberg recording next, This is Bloomberg Tech. Apple's revamp 0:10:46.960 --> 0:10:50.120 of its Siri voice assistant has hit new challenges that 0:10:50.200 --> 0:10:53.840 could delay the release of some features, according to sources, 0:10:54.120 --> 0:10:58.120 Bloombo's Mark German, as always, has the details. Let's get 0:10:58.120 --> 0:10:59.880 into the details. What do we need to know? What 0:11:00.280 --> 0:11:03.319 you what are you hearing from inside the company about 0:11:03.360 --> 0:11:06.760 the latest snag with artificial intelligence powered Sery. 0:11:08.160 --> 0:11:10.320 So Apple has been planning to launch the new Seri. 0:11:10.880 --> 0:11:13.840 This is an AI revamp that initially introduced in June 0:11:13.880 --> 0:11:16.720 twenty twenty four at its Developers conference, and I'm going 0:11:16.800 --> 0:11:19.600 to tap into features like your personal data to fulfill 0:11:19.679 --> 0:11:24.040 queries onstream content and precise control of apps. It was 0:11:24.080 --> 0:11:26.520 supposed to launch next month in March. Is part of 0:11:26.520 --> 0:11:29.560 an update called iOS twenty six point four. This had 0:11:29.559 --> 0:11:32.160 been the plan for several months. It's actually been the 0:11:32.160 --> 0:11:35.240 plan for well over a year at this point. Now 0:11:35.360 --> 0:11:39.400 that is being delayed and staggered potentially right now. The 0:11:39.480 --> 0:11:43.040 delay is moving many of the serie capabilities to iOS 0:11:43.080 --> 0:11:46.800 twenty six dot five that's scheduled for some time in 0:11:46.840 --> 0:11:49.920 May June, so about a couple month delay. But some 0:11:49.960 --> 0:11:53.439 of the features, including the personal context features, those are 0:11:53.559 --> 0:11:57.360 likely not to launch until September as part of iOS 0:11:57.400 --> 0:12:01.120 twenty seven, so a bit of a delay there, you know. Altogether, 0:12:01.200 --> 0:12:03.160 it's possible that these new features are not going to 0:12:03.240 --> 0:12:06.880 launch until two years after they were initially introduced. The 0:12:06.880 --> 0:12:09.920 setback for Apple here is not necessarily in bone sales. 0:12:09.960 --> 0:12:12.560 People are still buying iPhones. You saw the eighty five 0:12:12.600 --> 0:12:14.800 billion dollars worth of sales, which could have even been 0:12:14.840 --> 0:12:19.640 more if not for some manufacturing challenges. But the challenge 0:12:19.720 --> 0:12:23.320 is where is OpenAI whereas anthropic? Where are Google going 0:12:23.360 --> 0:12:24.960 to be at the end of this year? Right, They're 0:12:25.080 --> 0:12:27.520 likely to be well ahead where they are today. So 0:12:27.840 --> 0:12:29.600 that's really what we have to pay attention to. 0:12:30.840 --> 0:12:34.760 Mett's talk Mark about how therefore the Google introgation is going, 0:12:34.880 --> 0:12:37.559 because in many ways it just fits into the overall 0:12:37.600 --> 0:12:40.320 Apple intelligence stop start and how they're going to be 0:12:40.320 --> 0:12:41.319 building out from within. 0:12:43.559 --> 0:12:45.880 My belief is the only reason they're going to be 0:12:45.960 --> 0:12:48.680 able to get this done this year, which I still 0:12:48.679 --> 0:12:51.560 believe they're going to do despite these latest snags during testing, 0:12:52.000 --> 0:12:54.839 is because their models are being improved by the Google 0:12:54.880 --> 0:12:58.439 Gemini team as part of that collaboration between the research 0:12:58.640 --> 0:13:01.680 labs at both Apple and Google. So that is going 0:13:01.720 --> 0:13:04.560 to be a major boon for them. I do expect 0:13:04.640 --> 0:13:08.040 this big serie chatbot revamp in iOS twenty seven coming 0:13:08.040 --> 0:13:10.920 out with the iPhones in the fall to be pretty 0:13:10.960 --> 0:13:13.120 nifty and pretty cool, a new way to control your 0:13:13.120 --> 0:13:16.000 phone with AI. They just need to pull it off, 0:13:16.080 --> 0:13:18.920 and I think they will. But the big question is 0:13:18.960 --> 0:13:22.200 how impressive is it going to be in September compared 0:13:22.200 --> 0:13:25.160 to whatever Open AI in Gemini has for their own 0:13:25.200 --> 0:13:28.600 customers and bropias with Quad in six months from now. 0:13:30.280 --> 0:13:34.040 Bloomberg's Mark German, we appreciate you on all things latest 0:13:34.040 --> 0:13:36.840 with Apple. Meanwhile, let's turn our attention to social media now, 0:13:36.920 --> 0:13:39.920 because Instagram boss Adam Massari testified in a landmark case 0:13:40.080 --> 0:13:43.200 they're like in social media to digital casinos. Masari told 0:13:43.240 --> 0:13:46.120 the jury he doesn't consider problematic use of platforms like 0:13:46.200 --> 0:13:49.880 meta to be the same as quote critical addiction. Blom 0:13:49.920 --> 0:13:52.600 Meg's legal reporter Madlyn Mackelberg is with us. You were 0:13:52.640 --> 0:13:56.600 there in the hearing, NLA, and so the push on 0:13:56.679 --> 0:13:59.719 Adam Massari anything different. We've heard on other occasions that 0:13:59.800 --> 0:14:00.520 he's testified. 0:14:02.360 --> 0:14:04.680 So he covered a lot of similar ground to things 0:14:04.679 --> 0:14:08.160 that we've heard before in congressional testimony and other public 0:14:08.240 --> 0:14:12.800 remarks about this issue of social media addiction. Obviously, what's 0:14:12.880 --> 0:14:15.840 unique here is the context in which he was giving 0:14:15.880 --> 0:14:19.760 this testimony, which is this landmark case that's testing whether 0:14:19.880 --> 0:14:23.520 juries will respond to claims that these companies knowingly designed 0:14:23.560 --> 0:14:26.560 their platforms to addict young users. But we heard him 0:14:26.560 --> 0:14:29.080 cover a lot of different ground. As you noted, he 0:14:29.200 --> 0:14:33.160 talked about this issue of clinical addiction versus problematic use, 0:14:33.200 --> 0:14:35.800 which is something that we hear a lot from social 0:14:35.840 --> 0:14:39.200 media companies, referring to people who use the platforms more 0:14:39.240 --> 0:14:42.200 than maybe they feel good about. We also heard him 0:14:42.240 --> 0:14:45.360 talk about some internal emails in the company when he 0:14:45.440 --> 0:14:48.200 was asked about them by the lawyer about decisions they 0:14:48.200 --> 0:14:51.800 were weighing about certain features on the platform related to 0:14:51.880 --> 0:14:53.600 photo filters on Instagram. 0:14:54.720 --> 0:14:58.640 Mad this is a process, right, both sides present arguments 0:14:58.760 --> 0:15:01.280 of plaintiffs, what do we need to know about what 0:15:01.320 --> 0:15:06.320 happens next, who else might testify, and what is under 0:15:06.320 --> 0:15:11.480 consideration at the cort of the trial. That's right. 0:15:11.560 --> 0:15:14.840 So we're in week one of what's expected to be 0:15:14.960 --> 0:15:18.600 an eight week trial. Adam Asseri was the first executive 0:15:18.640 --> 0:15:20.640 to be called to the stand, but he will certainly 0:15:20.640 --> 0:15:22.800 not be the last. As you said, this is the 0:15:22.800 --> 0:15:25.160 plaintiff's case. They kind of get the first chunk of 0:15:25.160 --> 0:15:28.040 time at the trial, and then the defendants in this case, 0:15:28.200 --> 0:15:30.600 Meta in Google, they're going to get a chance to respond. 0:15:31.080 --> 0:15:34.800 We're also expecting to hear from Mark Zuckerberg of Meta, 0:15:34.960 --> 0:15:38.240 We're expecting to hear from YouTube CEO Neil Mohan at 0:15:38.240 --> 0:15:41.080 some point, and we're also we kind of got a 0:15:41.080 --> 0:15:42.640 little bit of a preview that we're going to be 0:15:42.680 --> 0:15:45.240 hearing from executives a little bit further down the food 0:15:45.320 --> 0:15:48.080 chain who maybe we're weighing in on some of these decisions. 0:15:48.560 --> 0:15:51.360 But the heart of this case is about this question 0:15:51.520 --> 0:15:55.280 of addiction and whether or not these platforms knowingly designed 0:15:55.320 --> 0:15:59.560 these tools to hook young users resulting in mental health struggles. 0:16:00.000 --> 0:16:03.080 This case, of course, centers on one individual, a young 0:16:03.120 --> 0:16:07.320 woman from California and her specific allegations, but it represents 0:16:07.360 --> 0:16:09.720 thousands of other cases that have been filed. So there's 0:16:09.720 --> 0:16:12.280 a lot of attention on the outcome here because it's 0:16:12.280 --> 0:16:14.920 going to dictate how the rest of these cases are decided. 0:16:16.000 --> 0:16:19.200 Bloomberg's Madeline Meckeberg, thank you very much. Now coming up, 0:16:19.360 --> 0:16:23.720 Altruist introduces a new AI way to plan your taxes. 0:16:23.800 --> 0:16:27.360 We speak with Jason wenk Voucheris's CEO. Next, this is 0:16:27.360 --> 0:16:28.360 Bloomberg Tech. 0:16:40.200 --> 0:16:40.640 AI. 0:16:41.120 --> 0:16:43.880 It's added again and it's been a wonkey, worrying few 0:16:43.920 --> 0:16:46.560 days for wealth managers and those who had shares in 0:16:46.600 --> 0:16:50.200 it considering the technology's impact. It's all started Tuesday, a 0:16:50.240 --> 0:16:53.680 startup called Altruist added a tax planning tool to its 0:16:53.680 --> 0:16:57.560 AI model Hazel. Within hours, wealth management stocks had tumbled. 0:16:57.640 --> 0:17:01.720 Charles schwab lpl Woymond James, as you see significantly, and 0:17:01.800 --> 0:17:03.080 that's as investors really. 0:17:02.880 --> 0:17:03.960 Feared AI disruption. 0:17:04.080 --> 0:17:07.600 The CEO of the company that kicked all of this off, Altruists, 0:17:07.680 --> 0:17:09.920 Jason Wank Jason, did this citate you? 0:17:10.000 --> 0:17:10.479 I surprise? 0:17:11.119 --> 0:17:14.040 Yeah. I think, to be incredibly honest, I don't think 0:17:14.040 --> 0:17:17.440 anybody could have possibly thought that you know, somewhere between 0:17:17.800 --> 0:17:20.000 you know, tens of billions and maybe one hundred billion 0:17:20.040 --> 0:17:21.680 of market cap would be wiped out in a week. 0:17:22.000 --> 0:17:26.520 AI is very powerful and certainly the market you know 0:17:26.600 --> 0:17:30.240 reaction tells me that there's a lot of people voting 0:17:30.240 --> 0:17:32.280 with their dollars in the potential disruption. 0:17:32.920 --> 0:17:37.520 Jason, all of this is about enabling well wealth managers 0:17:37.520 --> 0:17:40.199 individual wealth managers. From your part, just remind us what 0:17:40.280 --> 0:17:43.160 altruist does and what this new development in terms of 0:17:43.320 --> 0:17:47.159 building in a tax tool does to help them. 0:17:47.240 --> 0:17:48.119 Yeah, absolutely so. 0:17:48.160 --> 0:17:49.760 I think the nail on the head, like the most 0:17:49.800 --> 0:17:53.120 important thing is that we're not trying to displace financial 0:17:53.119 --> 0:17:54.600 advisors or wealth managers. 0:17:54.880 --> 0:17:56.760 It's not AI taking those jobs away. 0:17:56.800 --> 0:17:59.840 It's AI to help empower them to do better work 0:17:59.840 --> 0:18:03.480 for their clients. And in many ways, when people think 0:18:03.520 --> 0:18:08.200 about wealth management, you know, there's there's deservedly a lot 0:18:08.240 --> 0:18:11.159 of critique. It could be things like why is it 0:18:11.240 --> 0:18:14.360 so hard to get access? Like the minimums are really high, 0:18:14.400 --> 0:18:17.480 Why are the costs very high? Why are the results 0:18:17.480 --> 0:18:21.080 sometimes inconsistent? And a lot of that is, you know, 0:18:21.119 --> 0:18:24.480 because of how much manual process and human labors involved. 0:18:24.480 --> 0:18:26.160 You just have a lot of limiting factors. 0:18:26.800 --> 0:18:31.639 AI very much is an incredible equalizer, you know, effectively 0:18:31.800 --> 0:18:34.879 with a tool like Hazel what used to take you know, 0:18:35.040 --> 0:18:38.359 teams that were you know, ten or more people working 0:18:38.480 --> 0:18:41.720 hundreds of hours and costing many tens of thousands of dollars, 0:18:42.320 --> 0:18:44.399 It can be done in like two to three minutes. 0:18:45.200 --> 0:18:47.960 And you know, users, the advisor users in our case 0:18:47.960 --> 0:18:49.879 are paying one hundred is dollars per month, right, so 0:18:50.320 --> 0:18:51.920 much more affordable, much more accessible. 0:18:52.080 --> 0:18:53.680 And tax is just the start. 0:18:53.720 --> 0:18:55.760 We launched tax first for what it's worth, because it's 0:18:55.800 --> 0:18:57.840 tax season in the US. We wanted that to be 0:18:57.880 --> 0:18:59.399 our first agent, you know, to kind of get out 0:18:59.440 --> 0:19:02.479 there in the hands wealth managers and advisors. But this 0:19:02.520 --> 0:19:04.720 is a pretty good harbinger of the things that will come. 0:19:04.760 --> 0:19:07.840 There'll be more agents doing more work that will continue 0:19:07.840 --> 0:19:10.600 to make advice better, more affordable, and more accessible. 0:19:11.960 --> 0:19:14.399 Jason, you will have noticed that some of the CEOs 0:19:14.440 --> 0:19:17.000 of those wealth managers appeared on television in the days 0:19:17.000 --> 0:19:19.840 that followed the selloff. His child swab listened to what 0:19:19.840 --> 0:19:20.520 they had to say. 0:19:21.080 --> 0:19:23.440 AI is a real accelerant. So it was puzzling to 0:19:23.480 --> 0:19:26.680 see our stock sell off related AI because we're benefiting 0:19:26.680 --> 0:19:28.879 it from it in multiple ways and bringing it to 0:19:28.920 --> 0:19:29.600 our clients. 0:19:29.680 --> 0:19:31.719 It's allowing us to reach new clients. 0:19:31.720 --> 0:19:34.280 And I think that's why you won't see the population 0:19:34.680 --> 0:19:37.879 of advisor's shrink, is that AI will be useful in 0:19:38.000 --> 0:19:39.800 reaching new clients that we couldn't before. 0:19:41.200 --> 0:19:44.560 Has mister West or any other leader in that field 0:19:44.640 --> 0:19:47.720 phoned you since Tuesday and would you be open to 0:19:47.840 --> 0:19:53.480 working with these companies literally jointly. Yes. 0:19:53.760 --> 0:19:57.359 So no, I haven't heard directly from mister Worcester, but 0:19:58.160 --> 0:20:01.520 we already actually work with any dependent financial advisor. One 0:20:01.520 --> 0:20:04.119 of the reasons why we stood up Hazel as a 0:20:04.160 --> 0:20:08.000 separate entity altruist of course as a direct competitor to Schwab, Fidelity, 0:20:08.160 --> 0:20:11.600 LPL and others. But we wanted Hazel to be something 0:20:11.640 --> 0:20:14.159 that any advisor could use to help any client, and 0:20:14.200 --> 0:20:16.760 we didn't want them to be forced into using a 0:20:16.800 --> 0:20:21.600 single custodian. So there are already thousands of advisors who 0:20:21.840 --> 0:20:24.960 use Schwab, for example, as a custodian that are leveraging 0:20:25.000 --> 0:20:28.400 Hazel and doing so to drive better outcomes for their 0:20:28.400 --> 0:20:32.560 clients and a lot more operational efficiency for themselves. And 0:20:33.160 --> 0:20:35.680 we have i'd say, in the last forty eight hours. 0:20:36.320 --> 0:20:39.919 It's in the hundreds of very large, significant, you know, 0:20:40.000 --> 0:20:44.160 wealth management companies around the world reaching out to see 0:20:44.160 --> 0:20:45.879 if there's a way that we can partner. So definitely 0:20:45.880 --> 0:20:48.600 looking forward to, you know, putting this tool in as 0:20:48.680 --> 0:20:51.440 many hands of as many capable advisors in the US 0:20:51.480 --> 0:20:52.040 as possible. 0:20:53.680 --> 0:20:55.679 Let's talk about the tool and the technology. You know, 0:20:56.040 --> 0:20:58.480 what are the data sets that the underlying model was 0:20:58.480 --> 0:21:02.720 trained on. What is your coal competence that if there 0:21:02.800 --> 0:21:06.600 is concern from the legacy industry of wealth management, what 0:21:06.680 --> 0:21:09.000 is it they should be concerned about, And what is 0:21:09.000 --> 0:21:10.640 it that makes this model powerful? 0:21:12.160 --> 0:21:14.480 Well, so kind there's two parts that I'll try to 0:21:14.480 --> 0:21:16.840 be succinct. But the first is I think what causes 0:21:16.920 --> 0:21:19.480 concern is not so much just the AI. It's the 0:21:19.520 --> 0:21:22.879 fact that we also have built a very modern infrastructure 0:21:23.040 --> 0:21:25.679