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Speaker 1: From Mahard.

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Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN.

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Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 3: I'm Caroline heid On Bloomberg's weldad quarters in New York,

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Speaker 3: and I'm also in New York Ed Louvelow here in

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Speaker 3: This is Bloomberg Technology.

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Speaker 4: Coming up.

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Speaker 3: Look, we'll take a look at what we can expect

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Speaker 3: from Tesla's deliveries report does as an analysis slashing estimates

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Speaker 3: as the quarter comes to a close.

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Speaker 4: Details ahead plus.

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Speaker 5: More momentum in the IPO market is Microsoft Banks, Rubric

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Speaker 5: says it's ready to file for its initial public offering,

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Speaker 5: walking you the latest, and.

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Speaker 3: We will sit down with the production company Shy Kids

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Speaker 3: as they produce an entire short film using open ayes

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Speaker 3: Sora have that so much more coming up throughout the hour.

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Speaker 4: First, let's check in on these markets.

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Speaker 3: And while after a stellar first quarter ahead, we're just

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Speaker 3: pairing back a little bit across the benchmarks and that'sacks

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Speaker 3: still clinging onto the gains. But look only by one

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Speaker 3: point at the moment. What is driving some of them

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Speaker 3: perhaps sell off in the equities on the day at

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Speaker 3: least has been the movement in the bond market tenure

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Speaker 3: yields spikinging at eleven basis points in the tenure. But

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Speaker 3: we're up across the curve four point three one is

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Speaker 3: where we're currently trading. Why factory orders coming in a

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Speaker 3: surprise gain and really showing that this is a strong

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Speaker 3: US economy and therefore the Fed really doesn't have to

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Speaker 3: be cunning rates anytime soon. Bitcoin current under pressure off

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Speaker 3: by two point eight percent, still relatively higher at sixty

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Speaker 3: eighty eight hundred and twenty seven, but put.

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Speaker 4: It into concext stead.

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Speaker 3: Look at where we have come for this year alone

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Speaker 3: on the S and P five hundred, despite those moves

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Speaker 3: in bonn yields throughout the year.

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Speaker 5: Yeah, it's been a fast start to twenty twenty four.

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Speaker 5: The first quarter, the first back to back quarterly gained

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Speaker 5: since mid of last year Dune quarter of last year.

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Speaker 5: But I'm trying to find what are the commonalities between

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Speaker 5: all of these gains at the inducey's level, and I

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Speaker 5: think the answers in Vidia basically along with some other

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Speaker 5: AI names that we're caught up in a kind of

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Speaker 5: infrastructure play, and now the attention's focusing well, if rates

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Speaker 5: are going to come down. Which rate sensitive sectors do

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Speaker 5: you want to be in and does that mean moving

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Speaker 5: away from tech? Which is sad for us, it might

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Speaker 5: be savvy for others.

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Speaker 3: And to be honest, savvy on the date and on

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Speaker 3: the year to date, we're still seeing chips sector absolutely

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Speaker 3: flying one and a quarter percent higher on the day.

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Speaker 3: We've got analysts out there upgrading the stocks of the

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Speaker 3: likes of Micron. Isn't just, of course a star performer

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Speaker 3: that has always been in video, but this has started

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Speaker 3: to spread and where else has been really the beneficiaries.

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Speaker 5: And later in the program we also have to talk

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Speaker 5: about our risk assert of choice, which is bitcoin, because

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Speaker 5: there is something that is due to happen on the calendar,

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Speaker 5: the harving. I think it's important to understand that. But

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Speaker 5: broadly speaking, every week I have a sense of deja

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Speaker 5: vu because we always say, oh, will the Fed cut

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Speaker 5: rates or when will they cut rates? And in which

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Speaker 5: increment and then we go from there and see how

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Speaker 5: it impacts the technology sector. We used to say higher

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Speaker 5: rates discount the present value of future cash flows. By

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Speaker 5: I'm reading this note from City Strategies saying, actually we're

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Speaker 5: thinking about where we need to move outside of technology,

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Speaker 5: what role bitcoin play and that as well have no idea.

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Speaker 4: Yes, spread the love.

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Speaker 3: Meanwhile, Jupiter of fund Over in Asia is still saying, look,

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Speaker 3: get in on the AI play, go in on those

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Speaker 3: sorts of names that you still have seen so outperformed.

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Speaker 3: So it feels as though the artificial intelligence run up

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Speaker 3: still has some space to run. But there is one

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Speaker 3: stock ed that has really fallen of fout this year

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Speaker 3: so far. It was a magnificent seven player and it's

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Speaker 3: anything but magnificent at the moment.

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Speaker 5: And just before we came on air, the declines in

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Speaker 5: the moment really accelerated. Tesla's down two point five percent.

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Speaker 5: We are bracing for first quarter deliveries where the expectation

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Speaker 5: is that they will deliver around four hundred and fifty

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Speaker 5: seven thousand sequentially quarter and quarter. That would been a

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Speaker 5: six percent decline. The big one to watch is like,

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Speaker 5: look at how wide the estimates are at the lower end.

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Speaker 5: This could be the first time in years that Tesla's

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Speaker 5: seen a drop year on year in deliveries growth. And

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Speaker 5: we know all about the factors higher rates, the consumer's

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Speaker 5: not interested any more. Domestic competition in China, there is

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Speaker 5: a lot for us to discuss and discuss it. Corey

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Speaker 5: Cantal and list A Bloomberg NIF covering vehicle electrification joins

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Speaker 5: us here in New York. I mean, this is an

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Speaker 5: important quarter, but the first quarter of twenty twenty four

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Speaker 5: kind of summed up the EV story. Are you in

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Speaker 5: the concerned about Tesla camp?

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Speaker 6: I think I'm in the way and see how Tesla does.

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Speaker 6: And if you look at the market globally, it's getting

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Speaker 6: more competitive. The number of the really watches that four

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Speaker 6: hundred and twenty three thousand units. I could see Tesla

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Speaker 6: being pretty flat. We've seen in the US, for example, month.

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Speaker 5: That's what they did in the first quarter of twenty

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Speaker 5: twenty three. Three.

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Speaker 6: Right, you're on year being flat even you've seen some

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Speaker 6: estimates of a decline of about three percentage points as

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Speaker 6: a possibility down to about four hundred and ten thousand.

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Speaker 6: Deutsche Bank had Tesla four hundred and fourteen thousand deliveries,

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Speaker 6: I would bet more on probably the I'd say Barish

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Speaker 6: delivery side, just because of the number of issues they've had.

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Speaker 6: You look at not only China and competition there, but

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Speaker 6: in Europe. Tesla's a giga factory in Berlin, so I'll

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Speaker 6: slowed down due to some outside issues that I must

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Speaker 6: flew over there to help deal with afterwards. So you

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Speaker 6: look at China, a lot of competition here in the

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Speaker 6: US MILEL three refrac Europe issues, so nowhere is going

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Speaker 6: particularly well. Not being said, Tesla is still likely to

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Speaker 6: outpace BID in terms of its fully electric vehicle sales

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Speaker 6: this quarter. Given you know, even if Tesla had about

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Speaker 6: fur hundred thousand minutes.

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Speaker 3: Let's go into the context here. If we do see

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Speaker 3: an actual year on year decline, how unheard of is

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Speaker 3: that for Tesla.

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Speaker 6: The last time that happened to Tesla was in twenty

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Speaker 6: twenty during the pandemic, and then I went back in

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Speaker 6: the data and before that you have to go back

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Speaker 6: to twenty fourteen to see a slight decline year on year.

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Speaker 6: In general, it's been flat or Tesla has seen a

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Speaker 6: lot of growth on the year on year basis. Elon

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Speaker 6: Musk has said, we're in between two waves, and so

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Speaker 6: the question is, you know what happens this quarter, and

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Speaker 6: then what does Tesla do They're corrected moving forward, because

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Speaker 6: again they haven't given a kind of guidance of delivery

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Speaker 6: for the full year, which you typically see auto makers do,

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Speaker 6: and you want to see that reassurance if you're looking

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Speaker 6: for the EV sector to grow. Tesla was about forty

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Speaker 6: six percent of US EV sales, which was actually the

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Speaker 6: lowest in twenty twenty three on basis, so they're becoming

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Speaker 6: less important to the health of the overall US EV market,

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Speaker 6: but still important to the global leaving market.

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Speaker 5: Okay, last Thursday, in the Bay Area, in an undisclosed location,

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Speaker 5: I went and picked up a Model Y. I did

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Speaker 5: it at least one. At least one because I needed

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Speaker 5: a new car, but also it was astonishing the federal

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Speaker 5: tax credit in the least context, but also Tesla's own incentives.

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Speaker 5: They always do this at the end of a quarter,

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Speaker 5: and they warned us that April first prices would go

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Speaker 5: back up. They did. I woke up this morning and

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Speaker 5: checked the website. But you talked about between two waves.

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Speaker 5: I debated, as you know, because we discussed it for

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Speaker 5: a really long time. Do I need what model? Why

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Speaker 5: does the Model Y work for me? I think on

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Speaker 5: balance it did for many consumers out there. This is

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Speaker 5: really complicated. They look at the vehicle's test or offers

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Speaker 5: and say, I don't know that I want a Model

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Speaker 5: three or Model Y. I can't afford an SNX and cybertruck.

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Speaker 5: Don't even get me started.

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Speaker 6: Well, there's only so many cyber trugs being in buildgip. Yeah,

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Speaker 6: you're got to go down the pre order list. I

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Speaker 6: think the other issue is you look at the Model

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Speaker 6: Y and the Model three. They're really close in price now,

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Speaker 6: they are, so if you are looking at a three,

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Speaker 6: why just spend a little bit more for the Why

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Speaker 6: for more like room and more space. With the next

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Speaker 6: generation Tesla vehicle announced for production sometime next year, you

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Speaker 6: want to make sure you're not cannibalizing the three, because

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Speaker 6: right now, Why is the best value out there, not

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Speaker 6: just in the US, one of the best selling vehicles

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Speaker 6: in the world.

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Speaker 3: But then let's get that broader context of competition you

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Speaker 3: mentioned BYD and how they're managing to ramp up in

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Speaker 3: end of market share. But over in Europe, you know

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Speaker 3: you've got BMW coming out with some really extraordinary electric vehicles. Overall,

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Speaker 3: is competition now something really Tesla has to be sitting

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Speaker 3: up in a world.

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Speaker 6: Yes, I think China it's the most intense China. You've

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Speaker 6: got a bunch of different other makers competing in a

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Speaker 6: real way and consumers there. I think the ideas even

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Speaker 6: said that EV sales should be about fifty percent of

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Speaker 6: all car sales in China in the next coming few months.

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Speaker 6: Everywhere else, Tesla has a bit more of an advantage

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Speaker 6: in terms of time, but everywhere it's wrapping up. I'm

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Speaker 6: looking forward to those bmwevs next year. That should be

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Speaker 6: the new class making waves. And they're big here in

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Speaker 6: the US too. I mean, they were about twenty percent

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Speaker 6: of all BMW sales last year in the US were electric,

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Speaker 6: So it's not just the Europe not just the China thing.

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Speaker 6: Tesla has competition everywhere, and that's a big difference from

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Speaker 6: a couple years ago.

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Speaker 3: Current cantor giving individual advice to Edel shouldn't been driving.

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Speaker 3: But also you can check him out on Bloomberg ne ef.

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Speaker 3: He has some great analysis across evs. Meanwhile, coming up,

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Speaker 3: chief experience officer at ledger Ian Rodgers joining us tell

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Speaker 3: us what we can expect a little bitcoin harming.

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Speaker 5: I'm also sticking with the EV sets for a minute. Nikola,

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Speaker 5: the maker of battery electric, electric and hydrogen fuel cell trucks,

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Speaker 5: is down a percentage point, but it had been up

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Speaker 5: as much as sixteen percent in pre market ten percent

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Speaker 5: at the open. The current management team is suing disgraced

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Speaker 5: founder and CEO former CEO Trevor Milton, who himself was

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Speaker 5: trying to get new board members who are his friends

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Speaker 5: on the board and has been sentenced to four years

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Speaker 5: in prison. I don't know if he's litigating this from prison,

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Speaker 5: but this is a wild stock that you want to

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Speaker 5: be following, and we're trying to get more details. We'll

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Speaker 5: keep an eye on it. This is Bloomberg technology.

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Speaker 3: Let's talk crypto bitcoin to be specific, because every is

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Speaker 3: so often the formula that governs the rate at which

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Speaker 3: new bitcoin tokens are created, but it changes. These events

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Speaker 3: they're called halvings, are a planned reduction in the rewards

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Speaker 3: that miners receive and happen once every four years or so. Now,

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Speaker 3: after the last three halvings, the coin hit records. So

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Speaker 3: both skeptics and supporters they're watching this particular move closely

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Speaker 3: to see what will come of the event and the

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Speaker 3: price point.

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Speaker 4: More specifically, let's get to chief.

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Speaker 3: Experience officer at Ledger as Ian Rodgers joining us really

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Speaker 3: on your take, I mean, your business is all about

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Speaker 3: ultimately the consumer side and the buying and securing of crypto.

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Speaker 3: When you're thinking of the harving, are you expecting everyone

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Speaker 3: is going to be a flurry of anticipation to have more,

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Speaker 3: to own more as a supply becomes more limited and

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Speaker 3: it does drive up the price.

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Speaker 2: Well, I think that the having is a great opportunity

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Speaker 2: for people to learn learn more about what bitcoin is

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Speaker 2: and how it works. You know, Bitcoin it's designed to

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Speaker 2: mimic precious metals in that the more you mine it,

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Speaker 2: the more difficult it becomes to mind. And going into

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Speaker 2: this having is, we have an unprecedented setup because we

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Speaker 2: have hit an all time high on a weekly, monthly

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Speaker 2: and quarterly basis. You know, prior to the having, which

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Speaker 2: is something that hasn't happened before in the times that's

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Speaker 2: happened previously. After you have you know this this weekly, monthly,

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Speaker 2: quarterly all time high, you've had an appreciation of three

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Speaker 2: hundred percent. So you know, the setup, the setup of

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Speaker 2: the having is is interesting because you know, it's it's

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Speaker 2: a financial endeavor for the miners and you can learn

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Speaker 2: a lot from watching what the miners are doing going

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Speaker 2: into the having, and they've been investing so they've obviously

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Speaker 2: been betting on betting their businesses on the price of

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Speaker 2: bitcoin going up, and it looks like they're about to

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Speaker 2: win their bed.

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Speaker 5: I like the comparison with literal mining of metals or commodities.

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Speaker 5: Called it what you will, and I find those data

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Speaker 5: points interesting. When you say machines, I think you mean

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Speaker 5: the compute right to run this. And you're also focused

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Speaker 5: on the hash rate, which has been accelerating. Why are

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Speaker 5: those data points that you're following.

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Speaker 2: Well, because you're what you're doing, and if you're looking

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Speaker 2: to the minors to see what they think is going

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Speaker 2: to happen after the having, than what you're doing is

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Speaker 2: you're saying, okay, well, what's the break even point for them?

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Speaker 2: So at the current you know, at the at the

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Speaker 2: current rate of bitcoins being created, which is about nine

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Speaker 2: hundred per day, the break even point for them is

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Speaker 2: a thirty two thousand dollars bitcoin. So they've been investing

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Speaker 2: all year long, even knowing that after the having, the

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Speaker 2: break even point for them will be sixty four thousand

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Speaker 2: dollars bitcoins. So even you know, back in January when

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Speaker 2: the price of bitcoin was between forty and fifty thousand dollars.

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Speaker 2: They were still investing betting that the price of bitcoin

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Speaker 2: would surpass that sixty four thousand dollars mark. So now

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Speaker 2: bitcoin's you know, hovering around seventy seventy thousand dollars. And

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Speaker 2: then what you have is again as I said, you

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Speaker 2: had you about nine hundred bitcoins being created on a

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Speaker 2: daily basis. After the having that will go down to

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Speaker 2: four hundred and fifty bitcoins being created on a daily basis.

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Speaker 2: But you have this this new event which is the

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Speaker 2: Bitcoin ETFs, which are driving a demand of around twenty

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Speaker 2: five hundred bitcoins every day. So you know, there will

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Speaker 2: only ever be twenty one million bitcoin nineteen and a

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Speaker 2: half million of those are already in existence. All of

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Speaker 2: those have come into existence via this mining process. And

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Speaker 2: if you just look at the at the supply side,

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Speaker 2: we've had we've had you know, kind of a you know,

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Speaker 2: we've had this this demand that's been created by the ETFs,

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Speaker 2: and then now you're about to have the supply shock

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Speaker 2: of the having. So I think, you know, it's it's

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Speaker 2: it's very you know, very simple supply and demand. And

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Speaker 2: you know, and also now you know, bitcoin's been around

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Speaker 2: for fifteen years, so A. It's been hardened, and we've

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Speaker 2: had a long time to look at it, and we've

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Speaker 2: looked at these cycles many times. So you know, there's

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Speaker 2: no no guarantee that the past will predict the future.

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Speaker 2: As I said, we've never had this all time high

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Speaker 2: in advance of the e t A. I mean, I'm sorry,

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Speaker 2: in advance of the having the the ETF is a

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Speaker 2: new way to buy bitcoin. So there's a lot here

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Speaker 2: that I'm precedented, you know. But but we're definitely looking

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Speaker 2: at past cycles to try to predict the.

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Speaker 3: Future, and we are asking a lot of your own

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Speaker 3: expertise in this domain. And I wonder just how decentralized

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Speaker 3: is the mining community at this moment, how much are

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Speaker 3: they able to be redeploying yet further and further capital

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Speaker 3: into compute into well ultimately, and the economics.

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Speaker 2: That you just walked us through, well, it's it's I mean,

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Speaker 2: it's it's global. It chases cheap energy, you know, because

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Speaker 2: the you know, the cheaper that you can they can

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Speaker 2: run the mining operation, you know, the more profitable you

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Speaker 2: can become. Also, you know, the compute that that drives mining,

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Speaker 2: you know, has has improved tremendously between the last cycle

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Speaker 2: and this cycle. So you know, it is a it

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Speaker 2: is a it's a it's a global business. But again,

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Speaker 2: these are these are these are businesses, right, so you know,

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Speaker 2: the question is what will they do after they're having

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Speaker 2: you know, how much of the bitcoin that they mind

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Speaker 2: will they need to sell and then put into the market.

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Speaker 2: Will they be able to keep their machines online because

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Speaker 2: it's profitable to do so, or will they need to

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Speaker 2: unplug some of their machines because the profitability has gone down. So,

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Speaker 2: you know, that's why it's super interesting to continue to

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Speaker 2: keep an eye on the mining business and to see

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Speaker 2: what investments they're making and what bests they're making.

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Speaker 5: We're talking about harving because it's due in April. Look,

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Speaker 5: we've had a pretty robust debate in the last week

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Speaker 5: in with Jack Mallers, who was on the program. The

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Speaker 5: Strike CEO Mike Novagratz came on the show last week

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Speaker 5: and made the same argument. They basically in the camp

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Speaker 5: of there's only twenty one million bitcoin ever and therefore

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Speaker 5: price only go up. Bitcoin go up for that very

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Speaker 5: simple reason. But one of the interesting data points that

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Speaker 5: I track at least is liquidity in the market. You know,

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Speaker 5: I get it on the supply side, but there's a

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Speaker 5: lot of trading that goes on. Basically, are you in

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Speaker 5: the camp of only twenty one million bitcoin? Ever, so

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Speaker 5: it only go up.

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Speaker 2: Well, I'm in the camp of we lead digital lives,

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Speaker 2: and we will have digital ownership in our digital lives.

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Speaker 2: And there is a new invention here. I mean, that's thinking.

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Speaker 2: That's what people often kind of overlook. They look at

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Speaker 2: only the speculative side. But you know, I've been working

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Speaker 2: on the Internet since the early nineties, and I did

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Speaker 2: digital music for twenty years and I was a big

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Speaker 2: part of the fact that you no longer own your

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Speaker 2: music collection, you rent it. So bitcoin has been the

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Speaker 2: tip of this sphere of digital ownership. And I think

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Speaker 2: that you know that you know we will have digital

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Speaker 2: ownership in our digital lives. And yes, because you have

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Speaker 2: this this truly scarce digital ownership asset, which is like

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Speaker 2: a behaves like a precious metal. I think, look, if

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Speaker 2: you own pesos, you want to own dollars, and if

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Speaker 2: you own dollars, you want.

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Speaker 1: To own bitcoin.

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Speaker 5: Legend chief experience officer in Roger's Grades, catch up with you.

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Speaker 5: It is time for talking tech and first off, in

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Speaker 5: the news. Huawei can he hinued its rung of strong,

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Speaker 5: coarsely profit growth, building on the resurgence of its consumer

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Speaker 5: business against Apple's iPhone and the rise of its cloud

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Speaker 5: division against Sally Barba. The Chinese networking and electronics company

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Speaker 5: reported net profit of about two billion US dollars in

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Speaker 5: the December quarter. According to Bloombog's calculations, that's up more

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Speaker 5: than sixty five percent from a year earlier. Plus open

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Speaker 5: Ai plans to open an office in Tokyo in April,

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Speaker 5: as the AI pioneer begins to build out its international operations.

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Speaker 5: The office will be its first in Asia and the

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Speaker 5: third international location after the company opened offices in London

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Speaker 5: and Dublin last year. All of that, according to Bloomberg sources,

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Speaker 5: and AT and T said personal data from about seventy

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Speaker 5: three million current and former customers was leaked onto the

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Speaker 5: dark web, which prompted the company to reset seven point

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Speaker 5: six million account pass codes. The data, which also included

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Speaker 5: sixty five point four million former customers, hit the dark

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Speaker 5: web about two weeks ago. But the Elite data also

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Speaker 5: includes personal information like social security numbers. It appears to

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Speaker 5: be from twenty nineteen that time period or earlier. The

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Speaker 5: source of the data is still being investigated, and it's

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Speaker 5: not known whether the data came from the company or

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Speaker 5: it came from a third party vendor Carra.

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Speaker 3: Yeah, we want to dig into this story a lot

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Speaker 3: more now. Bloomberg Intelligence analyst John Butler joins us and

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Speaker 3: at and T itself rushing to practically be talking to

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Speaker 3: customers affected.

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Speaker 4: But more broadly, how heard or unheard of?

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Speaker 3: Is this sort of amount of a leak of things

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Speaker 3: such as your Social Security numbers?

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Speaker 7: So that's actually a great question, and the answer is

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Speaker 7: security breaches for the carriers are actually more.

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Speaker 1: Common than you would think.

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Speaker 7: T Mobile sort of leads the pack with several dating

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Speaker 7: back to August of twenty twenty one and even earlier,

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Speaker 7: but they had one of similar size back in August

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Speaker 7: of twenty twenty one. And what's interesting is it really

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Speaker 7: didn't impact confidence in the brand at the time.

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Speaker 1: So we looked at subscriber churn.

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Speaker 7: How many subscribers left the brand after T mobiles breach.

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Speaker 7: Did it affect net additions new people coming to the

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Speaker 7: brand in the wake of the breach, And the answer

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Speaker 7: is it really didn't. It wasn't that impactful. To them,

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Speaker 7: and so our call on AT and T is something similar.

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Speaker 7: We don't think this is really going to dent the

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Speaker 7: brand in a major way in the wake of this incident.

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Speaker 5: That's the thesis that you outlined in your Bloomberg Inteligens React.

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Speaker 5: There's going to be a lot of AT and T

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Speaker 5: customers John the watching this show thinking what is John

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Speaker 5: Butler talking about? They got access to my information? How

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Speaker 5: quickly was the response from AT and T to get

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Speaker 5: this resolved and under wraps.

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Speaker 7: So I think once it was out it was they

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Speaker 7: made all the right moves right. They were offering subscribers

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Speaker 7: reimbursement for any security like LifeLock that they might want

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Speaker 7: to add onto their accounts, and there were also they

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Speaker 7: reached out to everyone and changed their passcode. So again

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Speaker 7: from the basic blocking and tackling standpoint, I think they're

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Speaker 7: doing all the right things. Inklings of this leak, so

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Speaker 7: to speak, go all the way back to twenty nineteen.

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Speaker 1: There was sort of a rumor.

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Speaker 7: Out that a bad guy had gotten the AT and

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Speaker 7: T data, but it had not been dumped onto the

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Speaker 7: dark web at that point, so AT and T really

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Speaker 7: didn't have any data to work with to verify whether

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Speaker 7: it had or had not been leaked, and I think

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Speaker 7: i'd add that there's still question as to whether it

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Speaker 7: was leaked or stolen from AT and T or stolen

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Speaker 7: from one of its vendors.

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Speaker 3: Yeah, ATNT denied that it was a victim of a

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Speaker 3: day to reach back in twenty nineteen, it was sky

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Speaker 3: Shiny Hunters that claim to a stolen the personal data

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Speaker 3: and they indeed said that the stole information didn't come

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Speaker 3: from its own systems. But John, this isn't a great

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Speaker 3: look after what happened just last month right, well, actually

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Speaker 3: back in I think it was yeah, now March when

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Speaker 3: they had a huge outage as well. I mean there's

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Speaker 3: going to be a few slightly frustrated customers right now.

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Speaker 1: Yeah, the timing is tough.

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Speaker 7: I think in the immediate wake of this, there could

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Speaker 7: be a little bit of blowback for AT and T

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Speaker 7: in terms of you knows, its brand reputation. It's never lasting,

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Speaker 7: That's the interesting thing. I'd point out. The best test

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Speaker 7: case is Rogers, which is Canada's largest internet provider i'm sorry,

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Speaker 7: wireless provider, and they had a huge internet outage a

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Speaker 7: couple of years ago and it was really substantial. It

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Speaker 7: took down I think over a third of the country

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Speaker 7: for several days, and they actually had no impact in

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Speaker 7: terms of net editions or were impact to the brand.

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Speaker 7: So people forget this pretty quickly, and I expect no

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Speaker 7: different for AT and T.

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Speaker 5: Bloomberg intelligence analyst John Butler. Great to have you back

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Speaker 5: on the program. John, it's been a one Welcome back

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Speaker 5: to Bloomberg Technology. Ed Ludlow here alongside Carrow in New

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Speaker 5: York City.

438
00:21:28,960 --> 00:21:30,240
Speaker 4: Yeah, so nice to have you here.

439
00:21:30,240 --> 00:21:32,440
Speaker 3: I meanwhile, we are getting you up to spee that's

440
00:21:32,440 --> 00:21:35,399
Speaker 3: happening in the markets right here, right now, and more broadly,

441
00:21:35,440 --> 00:21:37,479
Speaker 3: we're coming off of those highs, ed after what has

442
00:21:37,520 --> 00:21:39,760
Speaker 3: been a phenomenal start to the year and in fact,

443
00:21:39,920 --> 00:21:43,040
Speaker 3: phenomenal six months. I mean, let's call it. The December

444
00:21:43,119 --> 00:21:45,840
Speaker 3: quarter was up fourteen percent for the NAZET one hundred,

445
00:21:45,880 --> 00:21:47,359
Speaker 3: and we see the NASA one hundred and pulling out

446
00:21:47,359 --> 00:21:49,920
Speaker 3: another eight and a half percent rally in the first quarter.

447
00:21:49,720 --> 00:21:51,359
Speaker 4: Of the year. Today we take a breathe.

448
00:21:51,400 --> 00:21:52,960
Speaker 3: We're up just five points, but the rest of the

449
00:21:52,960 --> 00:21:54,240
Speaker 3: benchmarks are on the downside.

450
00:21:54,240 --> 00:21:56,000
Speaker 4: Why well, we blame the tenure yield.

451
00:21:55,760 --> 00:21:57,840
Speaker 3: Largely and some strong economic data.

452
00:21:57,880 --> 00:21:58,440
Speaker 4: Once again, the.

453
00:21:58,440 --> 00:22:01,120
Speaker 3: US is just managing to outperform factory orders, this time

454
00:22:01,440 --> 00:22:04,160
Speaker 3: pushing up rates because why we think that the Federal

455
00:22:04,160 --> 00:22:06,040
Speaker 3: Reserve isn't going to have to cut rates if we've

456
00:22:06,080 --> 00:22:08,840
Speaker 3: got such a strong economic picture here eleven pases twelve

457
00:22:08,840 --> 00:22:10,320
Speaker 3: basis points, that's called it higher on.

458
00:22:10,280 --> 00:22:11,000
Speaker 4: The ten year yeale.

459
00:22:11,000 --> 00:22:13,640
Speaker 3: Bitcoin as along with other risk assets, is just giving

460
00:22:13,640 --> 00:22:16,040
Speaker 3: off a little bit today we're down almost three percent,

461
00:22:16,280 --> 00:22:18,480
Speaker 3: so accelerating some of those losses. Sixty eight thousand seven

462
00:22:18,560 --> 00:22:21,320
Speaker 3: und sixty though can't be sniffed out after a phenomenal

463
00:22:21,400 --> 00:22:23,800
Speaker 3: quarter for that particular asset move over. Look over all,

464
00:22:23,840 --> 00:22:26,199
Speaker 3: what's happening in some of the individual names, and actually

465
00:22:26,200 --> 00:22:28,280
Speaker 3: when you've got a day like this where potentially volumes

466
00:22:28,280 --> 00:22:30,359
Speaker 3: are relatively thin because that the rest of the world

467
00:22:30,400 --> 00:22:33,280
Speaker 3: is taking a day off due to Eastern mondays, it's

468
00:22:33,280 --> 00:22:35,800
Speaker 3: known over in Europe volumes are down about eleven percent.

469
00:22:35,800 --> 00:22:37,240
Speaker 3: If you're looking at the S and P five hundred,

470
00:22:37,240 --> 00:22:39,320
Speaker 3: and we're seeing the Micron though the outperformer up six

471
00:22:39,359 --> 00:22:41,480
Speaker 3: and a half percent. Why because an analyst likes it

472
00:22:41,480 --> 00:22:44,000
Speaker 3: and they're saying, look, this is integral play for your

473
00:22:44,000 --> 00:22:47,320
Speaker 3: AI future. So they're liking Micron and shares moving on

474
00:22:47,320 --> 00:22:49,800
Speaker 3: the back of analyst reports Alphabet get this hitting a.

475
00:22:49,760 --> 00:22:52,240
Speaker 4: New record high for Google. We're up almost three percent.

476
00:22:52,440 --> 00:22:55,879
Speaker 3: Tesla on the downside, though, and continu continue to anticipate

477
00:22:55,920 --> 00:22:58,600
Speaker 3: the deliveries for Tesla and whether or not they could

478
00:22:58,640 --> 00:23:01,199
Speaker 3: actually be a year on y de Kina, Let's go.

479
00:23:01,240 --> 00:23:02,560
Speaker 1: To the IPO market.

480
00:23:02,640 --> 00:23:06,080
Speaker 5: Rubric, a cloud and data security startup backed by Microsoft,

481
00:23:06,359 --> 00:23:08,280
Speaker 5: is planning to file as soon as next week. That

482
00:23:08,320 --> 00:23:11,880
Speaker 5: according to sources. Here's what Rubric CEO told us back

483
00:23:11,880 --> 00:23:13,400
Speaker 5: in December when he was last on the show.

484
00:23:13,560 --> 00:23:14,520
Speaker 1: We asked him about it.

485
00:23:15,680 --> 00:23:20,119
Speaker 8: The foecust again on building a long term business.

486
00:23:20,280 --> 00:23:23,600
Speaker 1: I leave the IPE to the experts. I can't comment

487
00:23:23,680 --> 00:23:23,920
Speaker 1: on it.

488
00:23:25,680 --> 00:23:27,840
Speaker 5: Karen and I have been asking people signor about an

489
00:23:27,840 --> 00:23:29,959
Speaker 5: IPO for a very long time. Now, let's get more

490
00:23:30,000 --> 00:23:33,040
Speaker 5: with Bloomberg's Deals Reporter Ryan Gord, what do we know

491
00:23:33,560 --> 00:23:36,679
Speaker 5: about Rubric the moves they're making to get listed.

492
00:23:37,560 --> 00:23:38,360
Speaker 1: Yes, that's right.

493
00:23:38,440 --> 00:23:40,560
Speaker 9: I realized that was just before Christmas when he said

494
00:23:40,600 --> 00:23:44,000
Speaker 9: that December twenty second. It's interesting we reported last year

495
00:23:44,040 --> 00:23:46,600
Speaker 9: in September that the company was planning to raise around

496
00:23:46,920 --> 00:23:49,280
Speaker 9: up to seven hundred million with all at the time. Again,

497
00:23:49,359 --> 00:23:51,880
Speaker 9: I think market conditions have really sort of blown out

498
00:23:51,960 --> 00:23:53,560
Speaker 9: since then. If you look at what a stare and

499
00:23:53,600 --> 00:23:57,280
Speaker 9: read it did a couple of weeks ago, as you say,

500
00:23:57,400 --> 00:24:00,600
Speaker 9: expected to file this week. As soon as this week

501
00:24:00,720 --> 00:24:03,680
Speaker 9: for a IPO, they could flip that s one public

502
00:24:04,119 --> 00:24:08,240
Speaker 9: and I think this would be yet another test for IPOs.

503
00:24:08,359 --> 00:24:09,159
Speaker 1: It's security.

504
00:24:09,960 --> 00:24:12,400
Speaker 9: It's a very different profile to the sort of thing

505
00:24:12,440 --> 00:24:17,000
Speaker 9: that we saw with Redded. It's not chips, so it'll

506
00:24:17,000 --> 00:24:20,280
Speaker 9: be interesting to see how this one plays out.

507
00:24:20,200 --> 00:24:21,440
Speaker 4: Cloud data security.

508
00:24:21,560 --> 00:24:24,080
Speaker 3: It is though, that my Microsoft, which of course has

509
00:24:24,119 --> 00:24:27,120
Speaker 3: been very much the darling of choice in the public markets.

510
00:24:27,240 --> 00:24:30,520
Speaker 4: Ryan, do we get a sense of valuation here already.

511
00:24:30,160 --> 00:24:32,320
Speaker 3: Or sort of the size and scope of appetite for

512
00:24:32,320 --> 00:24:33,040
Speaker 3: companies like this.

513
00:24:33,560 --> 00:24:35,760
Speaker 9: Carol, I think valuation is a little bit up in

514
00:24:35,800 --> 00:24:38,040
Speaker 9: the air right now. But I mean if you think

515
00:24:38,080 --> 00:24:40,639
Speaker 9: to the round that Microsoft invested in, I think, just

516
00:24:40,640 --> 00:24:42,480
Speaker 9: to double check my notes twenty twenty one, that was

517
00:24:42,720 --> 00:24:45,080
Speaker 9: four billion dollars. I mean, this is a sector that

518
00:24:45,119 --> 00:24:47,560
Speaker 9: has proven the very resilient. I think if you look

519
00:24:47,600 --> 00:24:50,560
Speaker 9: across at the financial sponsor activity in this space, you

520
00:24:50,600 --> 00:24:53,680
Speaker 9: know you're seeing multiples that are significantly twenty times sort

521
00:24:53,680 --> 00:24:55,880
Speaker 9: of forwardy bit off for some of these kinds of assets.

522
00:24:56,720 --> 00:24:59,119
Speaker 9: So I think when this sort of comes around, should

523
00:24:59,119 --> 00:25:01,119
Speaker 9: they flip and you know have the fifteen day cooling

524
00:25:01,119 --> 00:25:04,400
Speaker 9: off period. It'll be interesting to see the investor reception

525
00:25:04,560 --> 00:25:07,600
Speaker 9: to the results. You know, they're going to disclose their

526
00:25:07,640 --> 00:25:10,919
Speaker 9: loss making. I think that's still the sense, but exactly

527
00:25:11,000 --> 00:25:13,679
Speaker 9: by how much. These are the kinds of questions that

528
00:25:13,720 --> 00:25:16,600
Speaker 9: investors will be pouring over in the coming weeks.

529
00:25:16,920 --> 00:25:19,480
Speaker 3: And of course this is a liquidity event for employees.

530
00:25:19,520 --> 00:25:21,600
Speaker 3: It's also for those that are backed it not only Microsoft,

531
00:25:21,680 --> 00:25:23,800
Speaker 3: but being Capital Ventures, Coast or Adventures. Some of the

532
00:25:23,840 --> 00:25:26,720
Speaker 3: names that are put in early checks run who else?

533
00:25:26,760 --> 00:25:29,480
Speaker 3: Therefore one other is in the VC community will be

534
00:25:29,480 --> 00:25:31,600
Speaker 3: waiting with bated breath for the next set of names

535
00:25:31,600 --> 00:25:32,760
Speaker 3: that will likely to see after this.

536
00:25:33,240 --> 00:25:35,280
Speaker 9: There are a bunch. I mean, if you think just

537
00:25:35,359 --> 00:25:38,080
Speaker 9: after Reddit, now we're thinking about the likes of Ibota.

538
00:25:38,280 --> 00:25:41,000
Speaker 9: It does coupons, they're the types of it's the type

539
00:25:41,040 --> 00:25:43,840
Speaker 9: of firm where you'll get deals at Walmart, all of

540
00:25:43,880 --> 00:25:47,879
Speaker 9: these big big box retailers. You've got Turo that is

541
00:25:47,920 --> 00:25:51,280
Speaker 9: still on the books. There's waste Stars, it's owned by

542
00:25:51,280 --> 00:25:54,120
Speaker 9: AQUT and I think still has some some other investors

543
00:25:54,280 --> 00:25:57,199
Speaker 9: of note there. All that said, I think there is

544
00:25:57,240 --> 00:25:59,760
Speaker 9: a significant backlog. I was talking to a couple of

545
00:25:59,760 --> 00:26:02,199
Speaker 9: st on the phone this morning who say that, you know,

546
00:26:02,320 --> 00:26:04,560
Speaker 9: really the blow up performance of a ster and read it.

547
00:26:04,560 --> 00:26:06,640
Speaker 9: If you look at a stero at some ninety four percent,

548
00:26:06,840 --> 00:26:09,120
Speaker 9: read it, even despite the declines last week, is still

549
00:26:09,160 --> 00:26:12,520
Speaker 9: up thirty seven percent in since issue. These are giving

550
00:26:12,640 --> 00:26:15,639
Speaker 9: every owner of a private company confidence to actually really

551
00:26:15,720 --> 00:26:19,240
Speaker 9: test i apos as an exit route. And therefore, you

552
00:26:19,280 --> 00:26:23,359
Speaker 9: know what does that mean versus a strategic sell And.

553
00:26:23,280 --> 00:26:26,080
Speaker 3: They've got a political calendar to negotiate with and get

554
00:26:26,080 --> 00:26:27,399
Speaker 3: out in front of rang Gold.

555
00:26:27,600 --> 00:26:29,239
Speaker 4: Great to have you on, Thank you so much. And

556
00:26:29,280 --> 00:26:30,280
Speaker 4: what else are we watching today?

557
00:26:30,359 --> 00:26:33,479
Speaker 5: We should talk about Disney. This Wednesday might bring the

558
00:26:33,640 --> 00:26:37,120
Speaker 5: end at least in this chapter of Disney's proxy fight,

559
00:26:37,160 --> 00:26:40,560
Speaker 5: with the company hosting is annual shareholder meeting and investors

560
00:26:40,680 --> 00:26:44,040
Speaker 5: voting on efforts by activists to reshuffle the board. So

561
00:26:44,080 --> 00:26:46,639
Speaker 5: I wrote today in the Tech Daily that this is

562
00:26:46,680 --> 00:26:49,960
Speaker 5: about the streaming business and Nelson Peltz wants a place

563
00:26:50,000 --> 00:26:52,720
Speaker 5: on the board. The thing that I don't understand is

564
00:26:52,800 --> 00:26:54,760
Speaker 5: what him getting on the board is going to do

565
00:26:54,960 --> 00:26:58,960
Speaker 5: to fix streaming at Disney. Fortunately, Bloomberg's Felix Julette is

566
00:26:59,000 --> 00:27:01,879
Speaker 5: here to the question for him. No, I'm kidding, but

567
00:27:02,119 --> 00:27:04,000
Speaker 5: that's what we're talking about here, and this is what

568
00:27:04,040 --> 00:27:07,200
Speaker 5: we're bracing for Wednesday. It's basically a vote on strategy.

569
00:27:07,359 --> 00:27:07,840
Speaker 1: Yeah.

570
00:27:07,920 --> 00:27:10,320
Speaker 10: I mean, I think you look back since twenty nineteen

571
00:27:10,320 --> 00:27:13,479
Speaker 10: when Disney Plus launched, they've lost more than ten billion

572
00:27:13,520 --> 00:27:16,960
Speaker 10: dollars on streaming, right, and those losses have been narrowing

573
00:27:17,960 --> 00:27:20,040
Speaker 10: and you've seen some progress, but they still lost what

574
00:27:20,080 --> 00:27:21,840
Speaker 10: two hundred million dollars last quarter?

575
00:27:22,760 --> 00:27:22,959
Speaker 1: You know.

576
00:27:23,000 --> 00:27:24,760
Speaker 10: I think a lot of this vote is, yeah, do

577
00:27:24,800 --> 00:27:27,720
Speaker 10: you trust Eiger to do this on his own or

578
00:27:27,760 --> 00:27:30,000
Speaker 10: do you like having pelts there holding his feet to

579
00:27:30,040 --> 00:27:32,679
Speaker 10: the fire. And I think with Disney, yeah, you have

580
00:27:32,720 --> 00:27:34,280
Speaker 10: to look at where's the growth going to come to?

581
00:27:34,600 --> 00:27:36,439
Speaker 10: Where are these profits going to come from in the

582
00:27:36,480 --> 00:27:40,119
Speaker 10: streaming side. Can they bundle these services together in a

583
00:27:40,160 --> 00:27:43,280
Speaker 10: compelling way. I mean they're now integrating Hulu into the

584
00:27:43,320 --> 00:27:45,760
Speaker 10: Disney Plus app. You have the question of you know,

585
00:27:45,880 --> 00:27:47,919
Speaker 10: right now you get ESPN Plus as part of that

586
00:27:48,040 --> 00:27:51,000
Speaker 10: bundle down the road, at some point you'll get the

587
00:27:51,040 --> 00:27:56,280
Speaker 10: full ESPN flagship presumably, but that's a huge transition for

588
00:27:56,720 --> 00:28:00,640
Speaker 10: ESPN to pull off. And at this point, yeah, that's

589
00:28:00,640 --> 00:28:03,200
Speaker 10: one of the giant questions facing Aigri and Disney.

590
00:28:03,760 --> 00:28:05,720
Speaker 4: How close to the wire is this getting?

591
00:28:05,760 --> 00:28:10,400
Speaker 3: Because I have been just bombarded by ads in every podcast.

592
00:28:10,480 --> 00:28:13,120
Speaker 3: I listened to the ad in the every break and sorry,

593
00:28:13,160 --> 00:28:14,679
Speaker 3: it's because I still get ads delivered to me on

594
00:28:14,680 --> 00:28:17,320
Speaker 3: my podcast. Is that you know I should be out

595
00:28:17,400 --> 00:28:22,400
Speaker 3: there trying to vote for Bob Iger and against Pelts. Yeah,

596
00:28:22,440 --> 00:28:25,280
Speaker 3: they're coming to me as a consumer, and I'm interested

597
00:28:25,320 --> 00:28:27,240
Speaker 3: as to how many consumers have gone out there and

598
00:28:27,240 --> 00:28:28,400
Speaker 3: actually made their voices heard.

599
00:28:28,800 --> 00:28:31,240
Speaker 10: I think it's the suspense has been building. I mean,

600
00:28:31,240 --> 00:28:33,040
Speaker 10: it really looked like I was going to run away

601
00:28:33,040 --> 00:28:36,399
Speaker 10: with us early on. He got these big endorsements George Lucas.

602
00:28:36,960 --> 00:28:38,360
Speaker 1: Strong, I guess exactly.

603
00:28:38,480 --> 00:28:40,320
Speaker 10: Yeah, and then all of a sudden, you know, suddenly

604
00:28:40,320 --> 00:28:42,960
Speaker 10: Pelts is making this comeback at the last minute. There's

605
00:28:43,000 --> 00:28:46,400
Speaker 10: all these retail investors. Yeah, Disney has been blanketing these

606
00:28:46,440 --> 00:28:49,920
Speaker 10: advertisements everywhere to try and get people on board with

607
00:28:50,000 --> 00:28:50,840
Speaker 10: their slate.

608
00:28:51,720 --> 00:28:52,640
Speaker 1: It could go either way.

609
00:28:52,680 --> 00:28:55,080
Speaker 10: I really think at this point the soccer is up,

610
00:28:55,200 --> 00:28:58,080
Speaker 10: you know, thirty five percent this year. It's been having

611
00:28:58,080 --> 00:29:01,520
Speaker 10: a great year, which you know, Eiger's made all these

612
00:29:01,520 --> 00:29:04,920
Speaker 10: shareholder friendly changes, but at the same time he's been

613
00:29:04,960 --> 00:29:08,480
Speaker 10: doing that with Peltz looking over his shoulder. Do you

614
00:29:08,520 --> 00:29:10,800
Speaker 10: want to keep that arrangement going or do you think

615
00:29:10,840 --> 00:29:11,840
Speaker 10: it's he's done enough.

616
00:29:12,280 --> 00:29:14,240
Speaker 5: I go back to the thesis I outline in the

617
00:29:14,240 --> 00:29:17,520
Speaker 5: column today, which is, like, what does Pelts do next

618
00:29:17,560 --> 00:29:18,240
Speaker 5: if he gets put.

619
00:29:18,200 --> 00:29:18,640
Speaker 1: On the board?

620
00:29:18,680 --> 00:29:22,000
Speaker 5: Because has done quite a lot in recent times that

621
00:29:22,080 --> 00:29:25,480
Speaker 5: the tension in Florida seems to be going away. They're

622
00:29:25,520 --> 00:29:28,600
Speaker 5: teaming up with Warner Brothers and Fox on the sports

623
00:29:28,600 --> 00:29:31,920
Speaker 5: side of things. How has that gone down with Disney's

624
00:29:31,960 --> 00:29:32,600
Speaker 5: investor base.

625
00:29:32,920 --> 00:29:34,040
Speaker 1: I think it's gone down well.

626
00:29:34,080 --> 00:29:36,480
Speaker 10: I mean, all these changes, there's not a lot of

627
00:29:36,520 --> 00:29:39,400
Speaker 10: difference between what Eiger's strategy is and what Pelts has

628
00:29:39,400 --> 00:29:42,360
Speaker 10: said his strategy is. They've really diverged over the past year.

629
00:29:42,720 --> 00:29:44,600
Speaker 10: So at this point, I mean, the one thing I

630
00:29:44,600 --> 00:29:48,720
Speaker 10: think you know is still open is the issue of succession, right, Like,

631
00:29:49,080 --> 00:29:51,640
Speaker 10: what's going to happen post Iiger? Do you trust the

632
00:29:51,720 --> 00:29:54,520
Speaker 10: current board to get it right this time? I think

633
00:29:54,560 --> 00:29:57,600
Speaker 10: everybody agrees the last time around the board didn't really

634
00:29:57,640 --> 00:30:01,040
Speaker 10: do much due diligence to try and keep you know,

635
00:30:01,560 --> 00:30:05,160
Speaker 10: iigre's succession players aren't track and do you trust Pelts

636
00:30:05,200 --> 00:30:06,880
Speaker 10: to be there and put more pressure on them this

637
00:30:06,920 --> 00:30:07,440
Speaker 10: summer around.

638
00:30:07,600 --> 00:30:09,640
Speaker 5: Kara Roscover was on the show last week and he said,

639
00:30:09,760 --> 00:30:12,400
Speaker 5: if President Biden can run again for reelection, why can't

640
00:30:12,440 --> 00:30:14,680
Speaker 5: I go do another ten years at Disney? That was

641
00:30:14,720 --> 00:30:18,280
Speaker 5: one investor's thesis about what should happen next. Bloomberg's Felix Jullette.

642
00:30:18,280 --> 00:30:20,000
Speaker 5: Great to have you here in the studio, and now

643
00:30:20,000 --> 00:30:21,600
Speaker 5: coming up on the show, we're going to be joined

644
00:30:21,600 --> 00:30:25,160
Speaker 5: by David Jones, founder and CEO of digital marketing group

645
00:30:25,240 --> 00:30:28,920
Speaker 5: Brand Tech, about their new rais real quick look at

646
00:30:28,960 --> 00:30:31,440
Speaker 5: shares of Trump Media and Technology Group. We got some

647
00:30:31,520 --> 00:30:35,080
Speaker 5: financials four million dollars of revenue last year, but a

648
00:30:35,080 --> 00:30:39,880
Speaker 5: loss of around fifty seven million US dollars. This tock

649
00:30:40,160 --> 00:30:45,440
Speaker 5: down accordingly fifteen percent. Remember this is the despack listing

650
00:30:46,080 --> 00:30:47,320
Speaker 5: relevant to truth Social.

651
00:30:47,440 --> 00:30:48,080
Speaker 1: We'll keep tracking it.

652
00:30:48,160 --> 00:30:49,720
Speaker 5: This is Bloombog Technology.

653
00:31:00,000 --> 00:31:01,080
Speaker 4: Today's VC Spotlight.

654
00:31:01,160 --> 00:31:03,600
Speaker 3: Guess what we're talking general to AI, but we're talking

655
00:31:03,680 --> 00:31:06,280
Speaker 3: in the marketing context here. Firm Brand Tech is with

656
00:31:06,360 --> 00:31:09,320
Speaker 3: us just recently announced a Series C fundraise one hundred

657
00:31:09,320 --> 00:31:11,880
Speaker 3: and fifteen million dollars here to discuss well where the

658
00:31:11,880 --> 00:31:14,520
Speaker 3: funds are going and where generative AI is going. Grand

659
00:31:14,560 --> 00:31:16,480
Speaker 3: Tech CEO and founder David Jones, it is great to

660
00:31:16,480 --> 00:31:18,560
Speaker 3: have you here in the studio with us. David, another

661
00:31:18,600 --> 00:31:23,520
Speaker 3: brit which is slowly but surely take What are you

662
00:31:23,600 --> 00:31:25,240
Speaker 3: using these funds for? How are you going to be

663
00:31:25,280 --> 00:31:27,440
Speaker 3: scaling and making the most of this generative AI moment.

664
00:31:27,920 --> 00:31:30,080
Speaker 8: So we launched a company in twenty fifteen with a

665
00:31:30,160 --> 00:31:33,000
Speaker 8: fundamental belief you could do all marketing better, faster and

666
00:31:33,080 --> 00:31:36,880
Speaker 8: cheaper using technology and AI machine generating content. And we've

667
00:31:36,920 --> 00:31:39,280
Speaker 8: sort of been on a seven eight year journey doing

668
00:31:39,360 --> 00:31:41,160
Speaker 8: that and it's just to continue that. So, you know,

669
00:31:41,240 --> 00:31:44,080
Speaker 8: back in twenty sixteen, we invest in AI chatbots, in

670
00:31:44,120 --> 00:31:48,360
Speaker 8: twenty seventeen, AI media planning, in twenty eighteen, AI mind twins,

671
00:31:48,800 --> 00:31:52,400
Speaker 8: and then the last major acquisition was Pencil, which is

672
00:31:52,480 --> 00:31:55,360
Speaker 8: the according to Fast Company, the one of the most

673
00:31:55,400 --> 00:31:57,920
Speaker 8: innovative companies in the world and one of the leading

674
00:31:58,040 --> 00:31:59,560
Speaker 8: JENI platforms in the world.

675
00:32:00,000 --> 00:32:03,840
Speaker 5: What we're talking about in present day is content right,

676
00:32:03,880 --> 00:32:07,240
Speaker 5: which is generative AI created in other words, text to

677
00:32:07,360 --> 00:32:11,240
Speaker 5: video in most cases, or text image where you're at

678
00:32:11,240 --> 00:32:13,719
Speaker 5: your computer and you say, dream me up at an

679
00:32:13,760 --> 00:32:17,040
Speaker 5: advertisement or another piece of marketing material based on these parameters,

680
00:32:17,080 --> 00:32:20,719
Speaker 5: and if well, up, it's there, how quickly do you

681
00:32:20,760 --> 00:32:22,480
Speaker 5: bring that to the marketplace.

682
00:32:22,960 --> 00:32:26,480
Speaker 8: So Pennsylvari simply aggregates all of the latest and greatest

683
00:32:26,560 --> 00:32:30,600
Speaker 8: GENAI tools and you can do everything from creating insights

684
00:32:30,600 --> 00:32:35,520
Speaker 8: to packshots, to TikTok posts, to YouTube videos to Instagram posts.

685
00:32:35,640 --> 00:32:36,280
Speaker 1: End to end.

686
00:32:36,680 --> 00:32:39,480
Speaker 8: It's predictive, so it will give you based on I

687
00:32:39,520 --> 00:32:41,440
Speaker 8: think the one thing that's really unique about it is

688
00:32:41,480 --> 00:32:45,320
Speaker 8: we have a billion dollars of media spend across five

689
00:32:45,400 --> 00:32:50,000
Speaker 8: thousand brands since twenty eighteen, and we've made a million

690
00:32:50,080 --> 00:32:53,440
Speaker 8: generative aiads. So that allows us to predict whether we

691
00:32:53,440 --> 00:32:56,880
Speaker 8: think the content that's been created using the GENI platform

692
00:32:56,920 --> 00:32:59,680
Speaker 8: is going to perform better, worse, or whether we don't

693
00:32:59,680 --> 00:33:02,760
Speaker 8: have data around that. And it's interesting people like to

694
00:33:02,840 --> 00:33:05,440
Speaker 8: play with things that they don't have data on because

695
00:33:05,440 --> 00:33:08,080
Speaker 8: it's I think a marketer is by definition are optimistic.

696
00:33:08,720 --> 00:33:10,680
Speaker 8: So literally it's an end to end platform to allow

697
00:33:10,760 --> 00:33:14,520
Speaker 8: you to create ads, and it typically does that with

698
00:33:14,680 --> 00:33:18,640
Speaker 8: twice the performance, ten times faster, and somewhere between thirty

699
00:33:18,680 --> 00:33:19,880
Speaker 8: and fifty percent cheaper.

700
00:33:20,320 --> 00:33:22,360
Speaker 3: As you say, you've been doing this since twenty fifteen.

701
00:33:23,120 --> 00:33:26,600
Speaker 3: Now some of the bigger juggernauts, and you come from

702
00:33:26,600 --> 00:33:29,000
Speaker 3: having been the I think the youngest CEO ever in

703
00:33:29,680 --> 00:33:33,800
Speaker 3: the advert in the advertising space for havas well. Now

704
00:33:33,840 --> 00:33:35,800
Speaker 3: it's wpp in on the act and now we're seeing

705
00:33:35,840 --> 00:33:38,120
Speaker 3: some of the others coming in and spending millions to

706
00:33:38,160 --> 00:33:38,760
Speaker 3: try and catch up.

707
00:33:38,760 --> 00:33:41,320
Speaker 4: In generally, what makes you beat them?

708
00:33:41,800 --> 00:33:44,880
Speaker 8: Look, I think if you look in history, it's never

709
00:33:44,960 --> 00:33:48,840
Speaker 8: the big legacy business that succeeds post the revolution, you know,

710
00:33:48,880 --> 00:33:52,440
Speaker 8: I think it's it's incredibly complicated to take a business

711
00:33:52,440 --> 00:33:55,600
Speaker 8: of one hundred and twenty thousand people and totally change

712
00:33:55,640 --> 00:33:57,520
Speaker 8: what it does. I mean, I created the company in

713
00:33:57,520 --> 00:34:01,400
Speaker 8: twenty fifteen with technology at the core, machine generated and

714
00:34:01,480 --> 00:34:05,720
Speaker 8: AI content at the core, and I think it's really hard.

715
00:34:06,240 --> 00:34:08,320
Speaker 1: So it's not totally impossible.

716
00:34:08,400 --> 00:34:11,759
Speaker 8: But you know, Kodak didn't win in digital photography, IBM

717
00:34:11,960 --> 00:34:16,480
Speaker 8: didn't win in mobile to Nephie AOL isn't talked about

718
00:34:16,520 --> 00:34:18,560
Speaker 8: too much in the Internet space, right.

719
00:34:19,200 --> 00:34:23,719
Speaker 5: How engaged are the advertisers forget the agencies and the platforms.

720
00:34:23,800 --> 00:34:27,000
Speaker 5: Caroline and I've talked a lot about the proximity of

721
00:34:27,040 --> 00:34:30,640
Speaker 5: a brand to It can be malicious content, it can

722
00:34:30,680 --> 00:34:34,480
Speaker 5: be mislabeled content. But that's what we're talking about here.

723
00:34:34,560 --> 00:34:37,920
Speaker 5: Great opportunity but also heightened risky.

724
00:34:38,680 --> 00:34:40,279
Speaker 8: So look, I think at a big picture level, like

725
00:34:40,280 --> 00:34:42,120
Speaker 8: one hundred percent of the headlines today are on jen

726
00:34:42,160 --> 00:34:44,400
Speaker 8: Ai in less than one percent of the content is

727
00:34:44,480 --> 00:34:46,480
Speaker 8: created using it, So I think we shouldn't lose sight

728
00:34:46,520 --> 00:34:49,279
Speaker 8: of that. That said, I've never seen anything in my

729
00:34:49,400 --> 00:34:51,880
Speaker 8: career like this in terms of the level of brand interest.

730
00:34:51,960 --> 00:34:54,360
Speaker 8: I mean, it's literally and you know, many of the

731
00:34:54,360 --> 00:34:56,560
Speaker 8: big surveys have said that, you know, over sixty percent

732
00:34:56,560 --> 00:34:58,520
Speaker 8: of the global CEOs are saying it's going to impact

733
00:34:58,560 --> 00:35:01,240
Speaker 8: our top and bottom line this year, not in the future.

734
00:35:01,600 --> 00:35:02,880
Speaker 1: But obviously it comes with issues.

735
00:35:02,920 --> 00:35:05,239
Speaker 8: So I think you've got this incredible interest and then

736
00:35:05,280 --> 00:35:08,920
Speaker 8: it's okay, you know, what do we do about our copyright?

737
00:35:08,960 --> 00:35:11,960
Speaker 8: How about data and privacy? How about bias? You know,

738
00:35:12,200 --> 00:35:14,680
Speaker 8: there's a number of big issues, and in fact, when

739
00:35:14,719 --> 00:35:17,800
Speaker 8: we built the pro product of Pencil, it was designed

740
00:35:17,840 --> 00:35:20,680
Speaker 8: to circumnavigate all of those. But you know, it's there's

741
00:35:20,680 --> 00:35:23,440
Speaker 8: a real learning curve going on for everyone, and I

742
00:35:23,440 --> 00:35:26,520
Speaker 8: think you often see brands go from sort of initially

743
00:35:26,560 --> 00:35:29,960
Speaker 8: being concerned and as they understand more. I mean almost

744
00:35:29,960 --> 00:35:33,319
Speaker 8: our general counsel is our kind of secret weapon in Jenai.

745
00:35:34,320 --> 00:35:37,359
Speaker 8: But so, yeah, enormous interest, but also some complexities.

746
00:35:37,480 --> 00:35:38,239
Speaker 4: Talk about a GC.

747
00:35:38,760 --> 00:35:42,799
Speaker 3: You've got a new CFO, you're reportedly valued at about

748
00:35:42,800 --> 00:35:44,480
Speaker 3: four billion, you're looking going public.

749
00:35:45,480 --> 00:35:48,480
Speaker 8: Look, I'm very happy being a private company at the moment.

750
00:35:48,920 --> 00:35:49,120
Speaker 1: You know.

751
00:35:49,200 --> 00:35:50,920
Speaker 8: My kind of quote on this is I look at

752
00:35:50,920 --> 00:35:53,760
Speaker 8: going to many places on holiday. But it's not because

753
00:35:53,800 --> 00:35:56,480
Speaker 8: I look that I always, you know, go there. Obviously

754
00:35:56,520 --> 00:35:59,600
Speaker 8: it's an option in the future, but so is staying private.

755
00:35:59,600 --> 00:36:04,400
Speaker 8: You know, we're profitable, high growth, we're well funded, so

756
00:36:04,600 --> 00:36:07,600
Speaker 8: we'll see. You know, I think it's not something that

757
00:36:07,760 --> 00:36:10,200
Speaker 8: is off the cards, but neither is it a plan.

758
00:36:10,239 --> 00:36:12,080
Speaker 5: When you file the S one we have that clip

759
00:36:12,160 --> 00:36:15,320
Speaker 5: to play. Yeah, exactly, sire. We appreciate your time. That

760
00:36:15,440 --> 00:36:30,920
Speaker 5: brand text. See having founder David Jones.

761
00:36:25,239 --> 00:36:28,439
Speaker 7: They see everyone has something unique about something that sets

762
00:36:28,440 --> 00:36:28,880
Speaker 7: them apart.

763
00:36:29,800 --> 00:36:32,200
Speaker 1: It's just in my case, you know, it's quite obvious

764
00:36:32,239 --> 00:36:38,000
Speaker 1: what that thing is. I am literally filled with pard Are. Yeah,

765
00:36:38,120 --> 00:36:41,920
Speaker 1: living like this has its challenges. Windy days, for one,

766
00:36:41,960 --> 00:36:43,200
Speaker 1: are particularly troublesome.

767
00:36:45,000 --> 00:36:47,839
Speaker 5: That was a clip from Airhead, a short film from

768
00:36:47,920 --> 00:36:51,680
Speaker 5: Toronto based multimedia production company Shy Kids. It's one of

769
00:36:51,719 --> 00:36:57,000
Speaker 5: the first short films made using open AIS Sora as

770
00:36:57,040 --> 00:36:59,760
Speaker 5: sort of The director of that short film, Walter Woodman

771
00:37:00,280 --> 00:37:05,040
Speaker 5: us now with more. We've covered Sora. We've talked about

772
00:37:05,080 --> 00:37:07,640
Speaker 5: this in the context of the reaction to it, but water,

773
00:37:07,719 --> 00:37:11,400
Speaker 5: let's start with the process. What it was like creating

774
00:37:11,440 --> 00:37:14,360
Speaker 5: this short film using open AIS technology.

775
00:37:15,880 --> 00:37:20,960
Speaker 11: Yeah, it's very interesting. It's very similar to many of

776
00:37:21,000 --> 00:37:25,000
Speaker 11: the processes we already use. We're animators by trade, so

777
00:37:25,600 --> 00:37:27,680
Speaker 11: we still had to go through the regular steps of

778
00:37:27,719 --> 00:37:31,719
Speaker 11: you know, making a script and then we would edit

779
00:37:31,840 --> 00:37:35,279
Speaker 11: and animate and add sound and sound effects and things

780
00:37:35,280 --> 00:37:38,759
Speaker 11: like that. The thing that really changed was most of

781
00:37:38,800 --> 00:37:42,360
Speaker 11: what you see the images were generated using SORA.

782
00:37:43,600 --> 00:37:47,800
Speaker 3: So Walter talk to us about ultimately the heavy lift

783
00:37:48,000 --> 00:37:51,200
Speaker 3: or lack thereof of people. The hand ringing that goes

784
00:37:51,239 --> 00:37:55,239
Speaker 3: on around generative AI, particularly around creative is that it

785
00:37:55,320 --> 00:37:56,920
Speaker 3: means few of you are needed.

786
00:37:57,400 --> 00:37:59,719
Speaker 4: But is that true? What was the working process like?

787
00:38:01,400 --> 00:38:05,719
Speaker 11: Yeah, I've read those Twitter comments as well, and what

788
00:38:05,760 --> 00:38:09,960
Speaker 11: I would say is that without fifteen years of making

789
00:38:10,000 --> 00:38:13,279
Speaker 11: films and tons of experience, I don't think that this

790
00:38:13,320 --> 00:38:16,440
Speaker 11: would have happened. I think that our team is very

791
00:38:16,480 --> 00:38:21,520
Speaker 11: adept at making films, and while generating the images was

792
00:38:21,520 --> 00:38:24,800
Speaker 11: slightly different than normally having to go out and shoot

793
00:38:24,840 --> 00:38:29,640
Speaker 11: and grab things like that, it's still a time intensive

794
00:38:29,719 --> 00:38:35,120
Speaker 11: and human intensive process that requires several hands and several creatives.

795
00:38:35,160 --> 00:38:38,320
Speaker 11: For this particular project, it was more on the side

796
00:38:38,320 --> 00:38:42,160
Speaker 11: of editing and animating, and I would more liken it

797
00:38:42,200 --> 00:38:46,200
Speaker 11: to an animated process. However, we're currently working on a

798
00:38:46,239 --> 00:38:49,440
Speaker 11: sequel and that's going to be more of a combination

799
00:38:49,680 --> 00:38:55,080
Speaker 11: of live action with the actual animation, so that's more

800
00:38:55,120 --> 00:38:56,880
Speaker 11: of a traditional workflow.

801
00:38:57,200 --> 00:38:59,160
Speaker 3: Well, so why did you want to do this? Why

802
00:38:59,200 --> 00:39:01,280
Speaker 3: did you want to get in using SAU so quickly?

803
00:39:02,719 --> 00:39:07,560
Speaker 11: I think as filmmakers, every time you see something new,

804
00:39:07,880 --> 00:39:12,279
Speaker 11: it's an opportunity to expand your creativity and expand the

805
00:39:12,320 --> 00:39:16,040
Speaker 11: things that you'd like to tell the world. And for us,

806
00:39:16,480 --> 00:39:20,640
Speaker 11: we see this as an opportunity to with a very cute,

807
00:39:21,160 --> 00:39:24,319
Speaker 11: fun short film showing people that it's not all doom

808
00:39:24,400 --> 00:39:28,719
Speaker 11: and gloom, that there's actually hope for some positivity and

809
00:39:29,360 --> 00:39:31,600
Speaker 11: that this technology is not something to be scared of,

810
00:39:31,680 --> 00:39:32,919
Speaker 11: but something to work with.

811
00:39:33,640 --> 00:39:35,840
Speaker 5: It is a short film about a young person with

812
00:39:35,880 --> 00:39:38,520
Speaker 5: a balloon for a head, a metaphor for the fragility

813
00:39:38,560 --> 00:39:43,319
Speaker 5: of human life, is my interpretation, critic ed Ludlow. But

814
00:39:43,400 --> 00:39:46,200
Speaker 5: it's only one minute and twenty one seconds long, and

815
00:39:46,239 --> 00:39:49,480
Speaker 5: I think is that the limitation here that you are

816
00:39:49,520 --> 00:39:52,440
Speaker 5: confined to very short clips at this stage?

817
00:39:52,520 --> 00:39:57,760
Speaker 11: Walter, Well, we could put clips up to one minute.

818
00:39:57,800 --> 00:39:59,600
Speaker 11: I think the thing is, though, is that you have

819
00:39:59,640 --> 00:40:02,480
Speaker 11: to sort of curate what's the best, you know, ten

820
00:40:02,600 --> 00:40:05,200
Speaker 11: seconds or five seconds, and the same way where you

821
00:40:05,239 --> 00:40:10,040
Speaker 11: shoot everything. It took tons and tons of generations and

822
00:40:10,120 --> 00:40:13,440
Speaker 11: clips to get to one minute. So in terms of

823
00:40:13,480 --> 00:40:16,239
Speaker 11: making something longer, I'm not the person who's going to

824
00:40:16,320 --> 00:40:18,879
Speaker 11: say this is it. It can only be one minute long.

825
00:40:18,920 --> 00:40:22,200
Speaker 11: And in fact the sequel already we're clocking in at

826
00:40:22,200 --> 00:40:24,920
Speaker 11: about three or four minutes, and I think that it's

827
00:40:25,200 --> 00:40:28,960
Speaker 11: a fool's errand to try to say how long these

828
00:40:28,960 --> 00:40:30,880
Speaker 11: things can go for. But what I will say is

829
00:40:30,920 --> 00:40:34,000
Speaker 11: that in order to get something that was cohesive for

830
00:40:34,040 --> 00:40:37,239
Speaker 11: a minute, it required really, you know, sifting through the

831
00:40:37,280 --> 00:40:39,760
Speaker 11: same way when you're making a documentary, you know ninety

832
00:40:39,800 --> 00:40:42,240
Speaker 11: percent of what you shoot gets thrown on the floor.

833
00:40:42,239 --> 00:40:44,640
Speaker 11: I would say it was a similar sort of burn

834
00:40:44,719 --> 00:40:45,239
Speaker 11: rate for this.

835
00:40:45,960 --> 00:40:49,200
Speaker 3: Well to women as director over at Shy Kids, it's

836
00:40:49,200 --> 00:40:51,200
Speaker 3: a great watch. Go and have a look at it.

837
00:40:51,360 --> 00:40:54,400
Speaker 3: We thank you so much, looking forward to the sequel. Meanwhile,

838
00:40:55,000 --> 00:40:58,279
Speaker 3: what a fascinating conversation ultimately about we had it from

839
00:40:58,320 --> 00:41:00,680
Speaker 3: the advertising space. Not much doom and gloom on that

840
00:41:00,760 --> 00:41:03,280
Speaker 3: jobs aren't going to be suddenly eradicated when you generatorve

841
00:41:03,280 --> 00:41:05,400
Speaker 3: AI within advertising, but you're suddenly going to see your

842
00:41:05,440 --> 00:41:08,799
Speaker 3: job description change and used in different ways. And it

843
00:41:08,800 --> 00:41:11,400
Speaker 3: feels as though this was pretty labor intensive even.

844
00:41:11,200 --> 00:41:13,680
Speaker 5: If you are does it allows you to be created?

845
00:41:13,719 --> 00:41:16,680
Speaker 5: That b tech producer Margerie Gallery and makes the point

846
00:41:16,680 --> 00:41:18,520
Speaker 5: when we played it out you have to remember those

847
00:41:18,520 --> 00:41:22,919
Speaker 5: are generative AI generated images. But it's very convincing. It's

848
00:41:22,960 --> 00:41:26,040
Speaker 5: real and that's the takeaway for me. But a lot

849
00:41:26,080 --> 00:41:27,920
Speaker 5: of work for less than ninety seconds.

850
00:41:27,920 --> 00:41:29,960
Speaker 3: Exactly and thus far, Yes, I'm sure it gives you

851
00:41:30,080 --> 00:41:32,480
Speaker 3: in a whole load of creative opportunity, whether or not

852
00:41:32,719 --> 00:41:36,160
Speaker 3: there's that much efficiency as yet in making of it.

853
00:41:36,239 --> 00:41:37,800
Speaker 5: A scoop that the sequels coming and it will be

854
00:41:37,840 --> 00:41:39,640
Speaker 5: four minutes long, so we're all getting back for that.

855
00:41:40,000 --> 00:41:41,960
Speaker 4: I want to know what the name is now. Meanwhile,

856
00:41:42,040 --> 00:41:43,920
Speaker 4: that does it for this edition of Bloombo Technology.

857
00:41:43,960 --> 00:41:45,239
Speaker 5: Is so great to have you in the hab yeah

858
00:41:45,320 --> 00:41:47,840
Speaker 5: for one week only, recap the show on the podcast.

859
00:41:47,920 --> 00:41:50,280
Speaker 5: So many of you are tuning in, maybe you're commuting

860
00:41:50,320 --> 00:41:52,440
Speaker 5: into Manhattan, or you're in the Bay Area listening, or

861
00:41:52,480 --> 00:41:55,080
Speaker 5: you're in London or Tokyo. Thank you for listening to

862
00:41:55,120 --> 00:41:58,920
Speaker 5: the podcast on Apple, Spotify, iHeart and all the Bloomberg platforms.

863
00:41:58,960 --> 00:42:01,200
Speaker 5: As we said from New York's You this week, this

864
00:42:01,360 --> 00:42:02,560
Speaker 5: is Bloomberg Technology

865
00:42:06,840 --> 00:42:07,200
Speaker 7: M HM.