Speaker 1: From Mahard.
Speaker 2: We're Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline heid On Bloomberg's weldad quarters in New York,
Speaker 3: and I'm also in New York Ed Louvelow here in
Speaker 3: This is Bloomberg Technology.
Speaker 4: Coming up.
Speaker 3: Look, we'll take a look at what we can expect
Speaker 3: from Tesla's deliveries report does as an analysis slashing estimates
Speaker 3: as the quarter comes to a close.
Speaker 4: Details ahead plus.
Speaker 5: More momentum in the IPO market is Microsoft Banks, Rubric
Speaker 5: says it's ready to file for its initial public offering,
Speaker 5: walking you the latest, and.
Speaker 3: We will sit down with the production company Shy Kids
Speaker 3: as they produce an entire short film using open ayes
Speaker 3: Sora have that so much more coming up throughout the hour.
Speaker 4: First, let's check in on these markets.
Speaker 3: And while after a stellar first quarter ahead, we're just
Speaker 3: pairing back a little bit across the benchmarks and that'sacks
Speaker 3: still clinging onto the gains. But look only by one
Speaker 3: point at the moment. What is driving some of them
Speaker 3: perhaps sell off in the equities on the day at
Speaker 3: least has been the movement in the bond market tenure
Speaker 3: yields spikinging at eleven basis points in the tenure. But
Speaker 3: we're up across the curve four point three one is
Speaker 3: where we're currently trading. Why factory orders coming in a
Speaker 3: surprise gain and really showing that this is a strong
Speaker 3: US economy and therefore the Fed really doesn't have to
Speaker 3: be cunning rates anytime soon. Bitcoin current under pressure off
Speaker 3: by two point eight percent, still relatively higher at sixty
Speaker 3: eighty eight hundred and twenty seven, but put.
Speaker 4: It into concext stead.
Speaker 3: Look at where we have come for this year alone
Speaker 3: on the S and P five hundred, despite those moves
Speaker 3: in bonn yields throughout the year.
Speaker 5: Yeah, it's been a fast start to twenty twenty four.
Speaker 5: The first quarter, the first back to back quarterly gained
Speaker 5: since mid of last year Dune quarter of last year.
Speaker 5: But I'm trying to find what are the commonalities between
Speaker 5: all of these gains at the inducey's level, and I
Speaker 5: think the answers in Vidia basically along with some other
Speaker 5: AI names that we're caught up in a kind of
Speaker 5: infrastructure play, and now the attention's focusing well, if rates
Speaker 5: are going to come down. Which rate sensitive sectors do
Speaker 5: you want to be in and does that mean moving
Speaker 5: away from tech? Which is sad for us, it might
Speaker 5: be savvy for others.
Speaker 3: And to be honest, savvy on the date and on
Speaker 3: the year to date, we're still seeing chips sector absolutely
Speaker 3: flying one and a quarter percent higher on the day.
Speaker 3: We've got analysts out there upgrading the stocks of the
Speaker 3: likes of Micron. Isn't just, of course a star performer
Speaker 3: that has always been in video, but this has started
Speaker 3: to spread and where else has been really the beneficiaries.
Speaker 5: And later in the program we also have to talk
Speaker 5: about our risk assert of choice, which is bitcoin, because
Speaker 5: there is something that is due to happen on the calendar,
Speaker 5: the harving. I think it's important to understand that. But
Speaker 5: broadly speaking, every week I have a sense of deja
Speaker 5: vu because we always say, oh, will the Fed cut
Speaker 5: rates or when will they cut rates? And in which
Speaker 5: increment and then we go from there and see how
Speaker 5: it impacts the technology sector. We used to say higher
Speaker 5: rates discount the present value of future cash flows. By
Speaker 5: I'm reading this note from City Strategies saying, actually we're
Speaker 5: thinking about where we need to move outside of technology,
Speaker 5: what role bitcoin play and that as well have no idea.
Speaker 4: Yes, spread the love.
Speaker 3: Meanwhile, Jupiter of fund Over in Asia is still saying, look,
Speaker 3: get in on the AI play, go in on those
Speaker 3: sorts of names that you still have seen so outperformed.
Speaker 3: So it feels as though the artificial intelligence run up
Speaker 3: still has some space to run. But there is one
Speaker 3: stock ed that has really fallen of fout this year
Speaker 3: so far. It was a magnificent seven player and it's
Speaker 3: anything but magnificent at the moment.
Speaker 5: And just before we came on air, the declines in
Speaker 5: the moment really accelerated. Tesla's down two point five percent.
Speaker 5: We are bracing for first quarter deliveries where the expectation
Speaker 5: is that they will deliver around four hundred and fifty
Speaker 5: seven thousand sequentially quarter and quarter. That would been a
Speaker 5: six percent decline. The big one to watch is like,
Speaker 5: look at how wide the estimates are at the lower end.
Speaker 5: This could be the first time in years that Tesla's
Speaker 5: seen a drop year on year in deliveries growth. And
Speaker 5: we know all about the factors higher rates, the consumer's
Speaker 5: not interested any more. Domestic competition in China, there is
Speaker 5: a lot for us to discuss and discuss it. Corey
Speaker 5: Cantal and list A Bloomberg NIF covering vehicle electrification joins
Speaker 5: us here in New York. I mean, this is an
Speaker 5: important quarter, but the first quarter of twenty twenty four
Speaker 5: kind of summed up the EV story. Are you in
Speaker 5: the concerned about Tesla camp?
Speaker 6: I think I'm in the way and see how Tesla does.
Speaker 6: And if you look at the market globally, it's getting
Speaker 6: more competitive. The number of the really watches that four
Speaker 6: hundred and twenty three thousand units. I could see Tesla
Speaker 6: being pretty flat. We've seen in the US, for example, month.
Speaker 5: That's what they did in the first quarter of twenty
Speaker 5: twenty three. Three.
Speaker 6: Right, you're on year being flat even you've seen some
Speaker 6: estimates of a decline of about three percentage points as
Speaker 6: a possibility down to about four hundred and ten thousand.
Speaker 6: Deutsche Bank had Tesla four hundred and fourteen thousand deliveries,
Speaker 6: I would bet more on probably the I'd say Barish
Speaker 6: delivery side, just because of the number of issues they've had.
Speaker 6: You look at not only China and competition there, but
Speaker 6: in Europe. Tesla's a giga factory in Berlin, so I'll
Speaker 6: slowed down due to some outside issues that I must
Speaker 6: flew over there to help deal with afterwards. So you
Speaker 6: look at China, a lot of competition here in the
Speaker 6: US MILEL three refrac Europe issues, so nowhere is going
Speaker 6: particularly well. Not being said, Tesla is still likely to
Speaker 6: outpace BID in terms of its fully electric vehicle sales
Speaker 6: this quarter. Given you know, even if Tesla had about
Speaker 6: fur hundred thousand minutes.
Speaker 3: Let's go into the context here. If we do see
Speaker 3: an actual year on year decline, how unheard of is
Speaker 3: that for Tesla.
Speaker 6: The last time that happened to Tesla was in twenty
Speaker 6: twenty during the pandemic, and then I went back in
Speaker 6: the data and before that you have to go back
Speaker 6: to twenty fourteen to see a slight decline year on year.
Speaker 6: In general, it's been flat or Tesla has seen a
Speaker 6: lot of growth on the year on year basis. Elon
Speaker 6: Musk has said, we're in between two waves, and so
Speaker 6: the question is, you know what happens this quarter, and
Speaker 6: then what does Tesla do They're corrected moving forward, because
Speaker 6: again they haven't given a kind of guidance of delivery
Speaker 6: for the full year, which you typically see auto makers do,
Speaker 6: and you want to see that reassurance if you're looking
Speaker 6: for the EV sector to grow. Tesla was about forty
Speaker 6: six percent of US EV sales, which was actually the
Speaker 6: lowest in twenty twenty three on basis, so they're becoming
Speaker 6: less important to the health of the overall US EV market,
Speaker 6: but still important to the global leaving market.
Speaker 5: Okay, last Thursday, in the Bay Area, in an undisclosed location,
Speaker 5: I went and picked up a Model Y. I did
Speaker 5: it at least one. At least one because I needed
Speaker 5: a new car, but also it was astonishing the federal
Speaker 5: tax credit in the least context, but also Tesla's own incentives.
Speaker 5: They always do this at the end of a quarter,
Speaker 5: and they warned us that April first prices would go
Speaker 5: back up. They did. I woke up this morning and
Speaker 5: checked the website. But you talked about between two waves.
Speaker 5: I debated, as you know, because we discussed it for
Speaker 5: a really long time. Do I need what model? Why
Speaker 5: does the Model Y work for me? I think on
Speaker 5: balance it did for many consumers out there. This is
Speaker 5: really complicated. They look at the vehicle's test or offers
Speaker 5: and say, I don't know that I want a Model
Speaker 5: three or Model Y. I can't afford an SNX and cybertruck.
Speaker 5: Don't even get me started.
Speaker 6: Well, there's only so many cyber trugs being in buildgip. Yeah,
Speaker 6: you're got to go down the pre order list. I
Speaker 6: think the other issue is you look at the Model
Speaker 6: Y and the Model three. They're really close in price now,
Speaker 6: they are, so if you are looking at a three,
Speaker 6: why just spend a little bit more for the Why
Speaker 6: for more like room and more space. With the next
Speaker 6: generation Tesla vehicle announced for production sometime next year, you
Speaker 6: want to make sure you're not cannibalizing the three, because
Speaker 6: right now, Why is the best value out there, not
Speaker 6: just in the US, one of the best selling vehicles
Speaker 6: in the world.
Speaker 3: But then let's get that broader context of competition you
Speaker 3: mentioned BYD and how they're managing to ramp up in
Speaker 3: end of market share. But over in Europe, you know
Speaker 3: you've got BMW coming out with some really extraordinary electric vehicles. Overall,
Speaker 3: is competition now something really Tesla has to be sitting
Speaker 3: up in a world.
Speaker 6: Yes, I think China it's the most intense China. You've
Speaker 6: got a bunch of different other makers competing in a
Speaker 6: real way and consumers there. I think the ideas even
Speaker 6: said that EV sales should be about fifty percent of
Speaker 6: all car sales in China in the next coming few months.
Speaker 6: Everywhere else, Tesla has a bit more of an advantage
Speaker 6: in terms of time, but everywhere it's wrapping up. I'm
Speaker 6: looking forward to those bmwevs next year. That should be
Speaker 6: the new class making waves. And they're big here in
Speaker 6: the US too. I mean, they were about twenty percent
Speaker 6: of all BMW sales last year in the US were electric,
Speaker 6: So it's not just the Europe not just the China thing.
Speaker 6: Tesla has competition everywhere, and that's a big difference from
Speaker 6: a couple years ago.
Speaker 3: Current cantor giving individual advice to Edel shouldn't been driving.
Speaker 3: But also you can check him out on Bloomberg ne ef.
Speaker 3: He has some great analysis across evs. Meanwhile, coming up,
Speaker 3: chief experience officer at ledger Ian Rodgers joining us tell
Speaker 3: us what we can expect a little bitcoin harming.
Speaker 5: I'm also sticking with the EV sets for a minute. Nikola,
Speaker 5: the maker of battery electric, electric and hydrogen fuel cell trucks,
Speaker 5: is down a percentage point, but it had been up
Speaker 5: as much as sixteen percent in pre market ten percent
Speaker 5: at the open. The current management team is suing disgraced
Speaker 5: founder and CEO former CEO Trevor Milton, who himself was
Speaker 5: trying to get new board members who are his friends
Speaker 5: on the board and has been sentenced to four years
Speaker 5: in prison. I don't know if he's litigating this from prison,
Speaker 5: but this is a wild stock that you want to
Speaker 5: be following, and we're trying to get more details. We'll
Speaker 5: keep an eye on it. This is Bloomberg technology.
Speaker 3: Let's talk crypto bitcoin to be specific, because every is
Speaker 3: so often the formula that governs the rate at which
Speaker 3: new bitcoin tokens are created, but it changes. These events
Speaker 3: they're called halvings, are a planned reduction in the rewards
Speaker 3: that miners receive and happen once every four years or so. Now,
Speaker 3: after the last three halvings, the coin hit records. So
Speaker 3: both skeptics and supporters they're watching this particular move closely
Speaker 3: to see what will come of the event and the
Speaker 3: price point.
Speaker 4: More specifically, let's get to chief.
Speaker 3: Experience officer at Ledger as Ian Rodgers joining us really
Speaker 3: on your take, I mean, your business is all about
Speaker 3: ultimately the consumer side and the buying and securing of crypto.
Speaker 3: When you're thinking of the harving, are you expecting everyone
Speaker 3: is going to be a flurry of anticipation to have more,
Speaker 3: to own more as a supply becomes more limited and
Speaker 3: it does drive up the price.
Speaker 2: Well, I think that the having is a great opportunity
Speaker 2: for people to learn learn more about what bitcoin is
Speaker 2: and how it works. You know, Bitcoin it's designed to
Speaker 2: mimic precious metals in that the more you mine it,
Speaker 2: the more difficult it becomes to mind. And going into
Speaker 2: this having is, we have an unprecedented setup because we
Speaker 2: have hit an all time high on a weekly, monthly
Speaker 2: and quarterly basis. You know, prior to the having, which
Speaker 2: is something that hasn't happened before in the times that's
Speaker 2: happened previously. After you have you know this this weekly, monthly,
Speaker 2: quarterly all time high, you've had an appreciation of three
Speaker 2: hundred percent. So you know, the setup, the setup of
Speaker 2: the having is is interesting because you know, it's it's
Speaker 2: a financial endeavor for the miners and you can learn
Speaker 2: a lot from watching what the miners are doing going
Speaker 2: into the having, and they've been investing so they've obviously
Speaker 2: been betting on betting their businesses on the price of
Speaker 2: bitcoin going up, and it looks like they're about to
Speaker 2: win their bed.
Speaker 5: I like the comparison with literal mining of metals or commodities.
Speaker 5: Called it what you will, and I find those data
Speaker 5: points interesting. When you say machines, I think you mean
Speaker 5: the compute right to run this. And you're also focused
Speaker 5: on the hash rate, which has been accelerating. Why are
Speaker 5: those data points that you're following.
Speaker 2: Well, because you're what you're doing, and if you're looking
Speaker 2: to the minors to see what they think is going
Speaker 2: to happen after the having, than what you're doing is
Speaker 2: you're saying, okay, well, what's the break even point for them?
Speaker 2: So at the current you know, at the at the
Speaker 2: current rate of bitcoins being created, which is about nine
Speaker 2: hundred per day, the break even point for them is
Speaker 2: a thirty two thousand dollars bitcoin. So they've been investing
Speaker 2: all year long, even knowing that after the having, the
Speaker 2: break even point for them will be sixty four thousand
Speaker 2: dollars bitcoins. So even you know, back in January when
Speaker 2: the price of bitcoin was between forty and fifty thousand dollars.
Speaker 2: They were still investing betting that the price of bitcoin
Speaker 2: would surpass that sixty four thousand dollars mark. So now
Speaker 2: bitcoin's you know, hovering around seventy seventy thousand dollars. And
Speaker 2: then what you have is again as I said, you
Speaker 2: had you about nine hundred bitcoins being created on a
Speaker 2: daily basis. After the having that will go down to
Speaker 2: four hundred and fifty bitcoins being created on a daily basis.
Speaker 2: But you have this this new event which is the
Speaker 2: Bitcoin ETFs, which are driving a demand of around twenty
Speaker 2: five hundred bitcoins every day. So you know, there will
Speaker 2: only ever be twenty one million bitcoin nineteen and a
Speaker 2: half million of those are already in existence. All of
Speaker 2: those have come into existence via this mining process. And
Speaker 2: if you just look at the at the supply side,
Speaker 2: we've had we've had you know, kind of a you know,
Speaker 2: we've had this this demand that's been created by the ETFs,
Speaker 2: and then now you're about to have the supply shock
Speaker 2: of the having. So I think, you know, it's it's
Speaker 2: it's very you know, very simple supply and demand. And
Speaker 2: you know, and also now you know, bitcoin's been around
Speaker 2: for fifteen years, so A. It's been hardened, and we've
Speaker 2: had a long time to look at it, and we've
Speaker 2: looked at these cycles many times. So you know, there's
Speaker 2: no no guarantee that the past will predict the future.
Speaker 2: As I said, we've never had this all time high
Speaker 2: in advance of the e t A. I mean, I'm sorry,
Speaker 2: in advance of the having the the ETF is a
Speaker 2: new way to buy bitcoin. So there's a lot here
Speaker 2: that I'm precedented, you know. But but we're definitely looking
Speaker 2: at past cycles to try to predict the.
Speaker 3: Future, and we are asking a lot of your own
Speaker 3: expertise in this domain. And I wonder just how decentralized
Speaker 3: is the mining community at this moment, how much are
Speaker 3: they able to be redeploying yet further and further capital
Speaker 3: into compute into well ultimately, and the economics.
Speaker 2: That you just walked us through, well, it's it's I mean,
Speaker 2: it's it's global. It chases cheap energy, you know, because
Speaker 2: the you know, the cheaper that you can they can
Speaker 2: run the mining operation, you know, the more profitable you
Speaker 2: can become. Also, you know, the compute that that drives mining,
Speaker 2: you know, has has improved tremendously between the last cycle
Speaker 2: and this cycle. So you know, it is a it
Speaker 2: is a it's a it's a global business. But again,
Speaker 2: these are these are these are businesses, right, so you know,
Speaker 2: the question is what will they do after they're having
Speaker 2: you know, how much of the bitcoin that they mind
Speaker 2: will they need to sell and then put into the market.
Speaker 2: Will they be able to keep their machines online because
Speaker 2: it's profitable to do so, or will they need to
Speaker 2: unplug some of their machines because the profitability has gone down. So,
Speaker 2: you know, that's why it's super interesting to continue to
Speaker 2: keep an eye on the mining business and to see
Speaker 2: what investments they're making and what bests they're making.
Speaker 5: We're talking about harving because it's due in April. Look,
Speaker 5: we've had a pretty robust debate in the last week
Speaker 5: in with Jack Mallers, who was on the program. The
Speaker 5: Strike CEO Mike Novagratz came on the show last week
Speaker 5: and made the same argument. They basically in the camp
Speaker 5: of there's only twenty one million bitcoin ever and therefore
Speaker 5: price only go up. Bitcoin go up for that very
Speaker 5: simple reason. But one of the interesting data points that
Speaker 5: I track at least is liquidity in the market. You know,
Speaker 5: I get it on the supply side, but there's a
Speaker 5: lot of trading that goes on. Basically, are you in
Speaker 5: the camp of only twenty one million bitcoin? Ever, so
Speaker 5: it only go up.
Speaker 2: Well, I'm in the camp of we lead digital lives,
Speaker 2: and we will have digital ownership in our digital lives.
Speaker 2: And there is a new invention here. I mean, that's thinking.
Speaker 2: That's what people often kind of overlook. They look at
Speaker 2: only the speculative side. But you know, I've been working
Speaker 2: on the Internet since the early nineties, and I did
Speaker 2: digital music for twenty years and I was a big
Speaker 2: part of the fact that you no longer own your
Speaker 2: music collection, you rent it. So bitcoin has been the
Speaker 2: tip of this sphere of digital ownership. And I think
Speaker 2: that you know that you know we will have digital
Speaker 2: ownership in our digital lives. And yes, because you have
Speaker 2: this this truly scarce digital ownership asset, which is like
Speaker 2: a behaves like a precious metal. I think, look, if
Speaker 2: you own pesos, you want to own dollars, and if
Speaker 2: you own dollars, you want.
Speaker 1: To own bitcoin.
Speaker 5: Legend chief experience officer in Roger's Grades, catch up with you.
Speaker 5: It is time for talking tech and first off, in
Speaker 5: the news. Huawei can he hinued its rung of strong,
Speaker 5: coarsely profit growth, building on the resurgence of its consumer
Speaker 5: business against Apple's iPhone and the rise of its cloud
Speaker 5: division against Sally Barba. The Chinese networking and electronics company
Speaker 5: reported net profit of about two billion US dollars in
Speaker 5: the December quarter. According to Bloombog's calculations, that's up more
Speaker 5: than sixty five percent from a year earlier. Plus open
Speaker 5: Ai plans to open an office in Tokyo in April,
Speaker 5: as the AI pioneer begins to build out its international operations.
Speaker 5: The office will be its first in Asia and the
Speaker 5: third international location after the company opened offices in London
Speaker 5: and Dublin last year. All of that, according to Bloomberg sources,
Speaker 5: and AT and T said personal data from about seventy
Speaker 5: three million current and former customers was leaked onto the
Speaker 5: dark web, which prompted the company to reset seven point
Speaker 5: six million account pass codes. The data, which also included
Speaker 5: sixty five point four million former customers, hit the dark
Speaker 5: web about two weeks ago. But the Elite data also
Speaker 5: includes personal information like social security numbers. It appears to
Speaker 5: be from twenty nineteen that time period or earlier. The
Speaker 5: source of the data is still being investigated, and it's
Speaker 5: not known whether the data came from the company or
Speaker 5: it came from a third party vendor Carra.
Speaker 3: Yeah, we want to dig into this story a lot
Speaker 3: more now. Bloomberg Intelligence analyst John Butler joins us and
Speaker 3: at and T itself rushing to practically be talking to
Speaker 3: customers affected.
Speaker 4: But more broadly, how heard or unheard of?
Speaker 3: Is this sort of amount of a leak of things
Speaker 3: such as your Social Security numbers?
Speaker 7: So that's actually a great question, and the answer is
Speaker 7: security breaches for the carriers are actually more.
Speaker 1: Common than you would think.
Speaker 7: T Mobile sort of leads the pack with several dating
Speaker 7: back to August of twenty twenty one and even earlier,
Speaker 7: but they had one of similar size back in August
Speaker 7: of twenty twenty one. And what's interesting is it really
Speaker 7: didn't impact confidence in the brand at the time.
Speaker 1: So we looked at subscriber churn.
Speaker 7: How many subscribers left the brand after T mobiles breach.
Speaker 7: Did it affect net additions new people coming to the
Speaker 7: brand in the wake of the breach, And the answer
Speaker 7: is it really didn't. It wasn't that impactful. To them,
Speaker 7: and so our call on AT and T is something similar.
Speaker 7: We don't think this is really going to dent the
Speaker 7: brand in a major way in the wake of this incident.
Speaker 5: That's the thesis that you outlined in your Bloomberg Inteligens React.
Speaker 5: There's going to be a lot of AT and T
Speaker 5: customers John the watching this show thinking what is John
Speaker 5: Butler talking about? They got access to my information? How
Speaker 5: quickly was the response from AT and T to get
Speaker 5: this resolved and under wraps.
Speaker 7: So I think once it was out it was they
Speaker 7: made all the right moves right. They were offering subscribers
Speaker 7: reimbursement for any security like LifeLock that they might want
Speaker 7: to add onto their accounts, and there were also they
Speaker 7: reached out to everyone and changed their passcode. So again
Speaker 7: from the basic blocking and tackling standpoint, I think they're
Speaker 7: doing all the right things. Inklings of this leak, so
Speaker 7: to speak, go all the way back to twenty nineteen.
Speaker 1: There was sort of a rumor.
Speaker 7: Out that a bad guy had gotten the AT and
Speaker 7: T data, but it had not been dumped onto the
Speaker 7: dark web at that point, so AT and T really
Speaker 7: didn't have any data to work with to verify whether
Speaker 7: it had or had not been leaked, and I think
Speaker 7: i'd add that there's still question as to whether it
Speaker 7: was leaked or stolen from AT and T or stolen
Speaker 7: from one of its vendors.
Speaker 3: Yeah, ATNT denied that it was a victim of a
Speaker 3: day to reach back in twenty nineteen, it was sky
Speaker 3: Shiny Hunters that claim to a stolen the personal data
Speaker 3: and they indeed said that the stole information didn't come
Speaker 3: from its own systems. But John, this isn't a great
Speaker 3: look after what happened just last month right, well, actually
Speaker 3: back in I think it was yeah, now March when
Speaker 3: they had a huge outage as well. I mean there's
Speaker 3: going to be a few slightly frustrated customers right now.
Speaker 1: Yeah, the timing is tough.
Speaker 7: I think in the immediate wake of this, there could
Speaker 7: be a little bit of blowback for AT and T
Speaker 7: in terms of you knows, its brand reputation. It's never lasting,
Speaker 7: That's the interesting thing. I'd point out. The best test
Speaker 7: case is Rogers, which is Canada's largest internet provider i'm sorry,
Speaker 7: wireless provider, and they had a huge internet outage a
Speaker 7: couple of years ago and it was really substantial. It
Speaker 7: took down I think over a third of the country
Speaker 7: for several days, and they actually had no impact in
Speaker 7: terms of net editions or were impact to the brand.
Speaker 7: So people forget this pretty quickly, and I expect no
Speaker 7: different for AT and T.
Speaker 5: Bloomberg intelligence analyst John Butler. Great to have you back
Speaker 5: on the program. John, it's been a one Welcome back
Speaker 5: to Bloomberg Technology. Ed Ludlow here alongside Carrow in New
Speaker 5: York City.
Speaker 4: Yeah, so nice to have you here.
Speaker 3: I meanwhile, we are getting you up to spee that's
Speaker 3: happening in the markets right here, right now, and more broadly,
Speaker 3: we're coming off of those highs, ed after what has
Speaker 3: been a phenomenal start to the year and in fact,
Speaker 3: phenomenal six months. I mean, let's call it. The December
Speaker 3: quarter was up fourteen percent for the NAZET one hundred,
Speaker 3: and we see the NASA one hundred and pulling out
Speaker 3: another eight and a half percent rally in the first quarter.
Speaker 4: Of the year. Today we take a breathe.
Speaker 3: We're up just five points, but the rest of the
Speaker 3: benchmarks are on the downside.
Speaker 4: Why well, we blame the tenure yield.
Speaker 3: Largely and some strong economic data.
Speaker 4: Once again, the.
Speaker 3: US is just managing to outperform factory orders, this time
Speaker 3: pushing up rates because why we think that the Federal
Speaker 3: Reserve isn't going to have to cut rates if we've
Speaker 3: got such a strong economic picture here eleven pases twelve
Speaker 3: basis points, that's called it higher on.
Speaker 4: The ten year yeale.
Speaker 3: Bitcoin as along with other risk assets, is just giving
Speaker 3: off a little bit today we're down almost three percent,
Speaker 3: so accelerating some of those losses. Sixty eight thousand seven
Speaker 3: und sixty though can't be sniffed out after a phenomenal
Speaker 3: quarter for that particular asset move over. Look over all,
Speaker 3: what's happening in some of the individual names, and actually
Speaker 3: when you've got a day like this where potentially volumes
Speaker 3: are relatively thin because that the rest of the world
Speaker 3: is taking a day off due to Eastern mondays, it's
Speaker 3: known over in Europe volumes are down about eleven percent.
Speaker 3: If you're looking at the S and P five hundred,
Speaker 3: and we're seeing the Micron though the outperformer up six
Speaker 3: and a half percent. Why because an analyst likes it
Speaker 3: and they're saying, look, this is integral play for your
Speaker 3: AI future. So they're liking Micron and shares moving on
Speaker 3: the back of analyst reports Alphabet get this hitting a.
Speaker 4: New record high for Google. We're up almost three percent.
Speaker 3: Tesla on the downside, though, and continu continue to anticipate
Speaker 3: the deliveries for Tesla and whether or not they could
Speaker 3: actually be a year on y de Kina, Let's go.
Speaker 1: To the IPO market.
Speaker 5: Rubric, a cloud and data security startup backed by Microsoft,
Speaker 5: is planning to file as soon as next week. That
Speaker 5: according to sources. Here's what Rubric CEO told us back
Speaker 5: in December when he was last on the show.
Speaker 1: We asked him about it.
Speaker 8: The foecust again on building a long term business.
Speaker 1: I leave the IPE to the experts. I can't comment
Speaker 1: on it.
Speaker 5: Karen and I have been asking people signor about an
Speaker 5: IPO for a very long time. Now, let's get more
Speaker 5: with Bloomberg's Deals Reporter Ryan Gord, what do we know
Speaker 5: about Rubric the moves they're making to get listed.
Speaker 1: Yes, that's right.
Speaker 9: I realized that was just before Christmas when he said
Speaker 9: that December twenty second. It's interesting we reported last year
Speaker 9: in September that the company was planning to raise around
Speaker 9: up to seven hundred million with all at the time. Again,
Speaker 9: I think market conditions have really sort of blown out
Speaker 9: since then. If you look at what a stare and
Speaker 9: read it did a couple of weeks ago, as you say,
Speaker 9: expected to file this week. As soon as this week
Speaker 9: for a IPO, they could flip that s one public
Speaker 9: and I think this would be yet another test for IPOs.
Speaker 1: It's security.
Speaker 9: It's a very different profile to the sort of thing
Speaker 9: that we saw with Redded. It's not chips, so it'll
Speaker 9: be interesting to see how this one plays out.
Speaker 4: Cloud data security.
Speaker 3: It is though, that my Microsoft, which of course has
Speaker 3: been very much the darling of choice in the public markets.
Speaker 4: Ryan, do we get a sense of valuation here already.
Speaker 3: Or sort of the size and scope of appetite for
Speaker 3: companies like this.
Speaker 9: Carol, I think valuation is a little bit up in
Speaker 9: the air right now. But I mean if you think
Speaker 9: to the round that Microsoft invested in, I think, just
Speaker 9: to double check my notes twenty twenty one, that was
Speaker 9: four billion dollars. I mean, this is a sector that
Speaker 9: has proven the very resilient. I think if you look
Speaker 9: across at the financial sponsor activity in this space, you
Speaker 9: know you're seeing multiples that are significantly twenty times sort
Speaker 9: of forwardy bit off for some of these kinds of assets.
Speaker 9: So I think when this sort of comes around, should
Speaker 9: they flip and you know have the fifteen day cooling
Speaker 9: off period. It'll be interesting to see the investor reception
Speaker 9: to the results. You know, they're going to disclose their
Speaker 9: loss making. I think that's still the sense, but exactly
Speaker 9: by how much. These are the kinds of questions that
Speaker 9: investors will be pouring over in the coming weeks.
Speaker 3: And of course this is a liquidity event for employees.
Speaker 3: It's also for those that are backed it not only Microsoft,
Speaker 3: but being Capital Ventures, Coast or Adventures. Some of the
Speaker 3: names that are put in early checks run who else?
Speaker 3: Therefore one other is in the VC community will be
Speaker 3: waiting with bated breath for the next set of names
Speaker 3: that will likely to see after this.
Speaker 9: There are a bunch. I mean, if you think just
Speaker 9: after Reddit, now we're thinking about the likes of Ibota.
Speaker 9: It does coupons, they're the types of it's the type
Speaker 9: of firm where you'll get deals at Walmart, all of
Speaker 9: these big big box retailers. You've got Turo that is
Speaker 9: still on the books. There's waste Stars, it's owned by
Speaker 9: AQUT and I think still has some some other investors
Speaker 9: of note there. All that said, I think there is
Speaker 9: a significant backlog. I was talking to a couple of
Speaker 9: st on the phone this morning who say that, you know,
Speaker 9: really the blow up performance of a ster and read it.
Speaker 9: If you look at a stero at some ninety four percent,
Speaker 9: read it, even despite the declines last week, is still
Speaker 9: up thirty seven percent in since issue. These are giving
Speaker 9: every owner of a private company confidence to actually really
Speaker 9: test i apos as an exit route. And therefore, you
Speaker 9: know what does that mean versus a strategic sell And.
Speaker 3: They've got a political calendar to negotiate with and get
Speaker 3: out in front of rang Gold.
Speaker 4: Great to have you on, Thank you so much. And
Speaker 4: what else are we watching today?
Speaker 5: We should talk about Disney. This Wednesday might bring the
Speaker 5: end at least in this chapter of Disney's proxy fight,
Speaker 5: with the company hosting is annual shareholder meeting and investors
Speaker 5: voting on efforts by activists to reshuffle the board. So
Speaker 5: I wrote today in the Tech Daily that this is
Speaker 5: about the streaming business and Nelson Peltz wants a place
Speaker 5: on the board. The thing that I don't understand is
Speaker 5: what him getting on the board is going to do
Speaker 5: to fix streaming at Disney. Fortunately, Bloomberg's Felix Julette is
Speaker 5: here to the question for him. No, I'm kidding, but
Speaker 5: that's what we're talking about here, and this is what
Speaker 5: we're bracing for Wednesday. It's basically a vote on strategy.
Speaker 1: Yeah.
Speaker 10: I mean, I think you look back since twenty nineteen
Speaker 10: when Disney Plus launched, they've lost more than ten billion
Speaker 10: dollars on streaming, right, and those losses have been narrowing
Speaker 10: and you've seen some progress, but they still lost what
Speaker 10: two hundred million dollars last quarter?
Speaker 1: You know.
Speaker 10: I think a lot of this vote is, yeah, do
Speaker 10: you trust Eiger to do this on his own or
Speaker 10: do you like having pelts there holding his feet to
Speaker 10: the fire. And I think with Disney, yeah, you have
Speaker 10: to look at where's the growth going to come to?
Speaker 10: Where are these profits going to come from in the
Speaker 10: streaming side. Can they bundle these services together in a
Speaker 10: compelling way. I mean they're now integrating Hulu into the
Speaker 10: Disney Plus app. You have the question of you know,
Speaker 10: right now you get ESPN Plus as part of that
Speaker 10: bundle down the road, at some point you'll get the
Speaker 10: full ESPN flagship presumably, but that's a huge transition for
Speaker 10: ESPN to pull off. And at this point, yeah, that's
Speaker 10: one of the giant questions facing Aigri and Disney.
Speaker 4: How close to the wire is this getting?
Speaker 3: Because I have been just bombarded by ads in every podcast.
Speaker 3: I listened to the ad in the every break and sorry,
Speaker 3: it's because I still get ads delivered to me on
Speaker 3: my podcast. Is that you know I should be out
Speaker 3: there trying to vote for Bob Iger and against Pelts. Yeah,
Speaker 3: they're coming to me as a consumer, and I'm interested
Speaker 3: as to how many consumers have gone out there and
Speaker 3: actually made their voices heard.
Speaker 10: I think it's the suspense has been building. I mean,
Speaker 10: it really looked like I was going to run away
Speaker 10: with us early on. He got these big endorsements George Lucas.
Speaker 1: Strong, I guess exactly.
Speaker 10: Yeah, and then all of a sudden, you know, suddenly
Speaker 10: Pelts is making this comeback at the last minute. There's
Speaker 10: all these retail investors. Yeah, Disney has been blanketing these
Speaker 10: advertisements everywhere to try and get people on board with
Speaker 10: their slate.
Speaker 1: It could go either way.
Speaker 10: I really think at this point the soccer is up,
Speaker 10: you know, thirty five percent this year. It's been having
Speaker 10: a great year, which you know, Eiger's made all these
Speaker 10: shareholder friendly changes, but at the same time he's been
Speaker 10: doing that with Peltz looking over his shoulder. Do you
Speaker 10: want to keep that arrangement going or do you think
Speaker 10: it's he's done enough.
Speaker 5: I go back to the thesis I outline in the
Speaker 5: column today, which is, like, what does Pelts do next
Speaker 5: if he gets put.
Speaker 1: On the board?
Speaker 5: Because has done quite a lot in recent times that
Speaker 5: the tension in Florida seems to be going away. They're
Speaker 5: teaming up with Warner Brothers and Fox on the sports
Speaker 5: side of things. How has that gone down with Disney's
Speaker 5: investor base.
Speaker 1: I think it's gone down well.
Speaker 10: I mean, all these changes, there's not a lot of
Speaker 10: difference between what Eiger's strategy is and what Pelts has
Speaker 10: said his strategy is. They've really diverged over the past year.
Speaker 10: So at this point, I mean, the one thing I
Speaker 10: think you know is still open is the issue of succession, right, Like,
Speaker 10: what's going to happen post Iiger? Do you trust the
Speaker 10: current board to get it right this time? I think
Speaker 10: everybody agrees the last time around the board didn't really
Speaker 10: do much due diligence to try and keep you know,
Speaker 10: iigre's succession players aren't track and do you trust Pelts
Speaker 10: to be there and put more pressure on them this
Speaker 10: summer around.
Speaker 5: Kara Roscover was on the show last week and he said,
Speaker 5: if President Biden can run again for reelection, why can't
Speaker 5: I go do another ten years at Disney? That was
Speaker 5: one investor's thesis about what should happen next. Bloomberg's Felix Jullette.
Speaker 5: Great to have you here in the studio, and now
Speaker 5: coming up on the show, we're going to be joined
Speaker 5: by David Jones, founder and CEO of digital marketing group
Speaker 5: Brand Tech, about their new rais real quick look at
Speaker 5: shares of Trump Media and Technology Group. We got some
Speaker 5: financials four million dollars of revenue last year, but a
Speaker 5: loss of around fifty seven million US dollars. This tock
Speaker 5: down accordingly fifteen percent. Remember this is the despack listing
Speaker 5: relevant to truth Social.
Speaker 1: We'll keep tracking it.
Speaker 5: This is Bloombog Technology.
Speaker 4: Today's VC Spotlight.
Speaker 3: Guess what we're talking general to AI, but we're talking
Speaker 3: in the marketing context here. Firm Brand Tech is with
Speaker 3: us just recently announced a Series C fundraise one hundred
Speaker 3: and fifteen million dollars here to discuss well where the
Speaker 3: funds are going and where generative AI is going. Grand
Speaker 3: Tech CEO and founder David Jones, it is great to
Speaker 3: have you here in the studio with us. David, another
Speaker 3: brit which is slowly but surely take What are you
Speaker 3: using these funds for? How are you going to be
Speaker 3: scaling and making the most of this generative AI moment.
Speaker 8: So we launched a company in twenty fifteen with a
Speaker 8: fundamental belief you could do all marketing better, faster and
Speaker 8: cheaper using technology and AI machine generating content. And we've
Speaker 8: sort of been on a seven eight year journey doing
Speaker 8: that and it's just to continue that. So, you know,
Speaker 8: back in twenty sixteen, we invest in AI chatbots, in
Speaker 8: twenty seventeen, AI media planning, in twenty eighteen, AI mind twins,
Speaker 8: and then the last major acquisition was Pencil, which is
Speaker 8: the according to Fast Company, the one of the most
Speaker 8: innovative companies in the world and one of the leading
Speaker 8: JENI platforms in the world.
Speaker 5: What we're talking about in present day is content right,
Speaker 5: which is generative AI created in other words, text to
Speaker 5: video in most cases, or text image where you're at
Speaker 5: your computer and you say, dream me up at an
Speaker 5: advertisement or another piece of marketing material based on these parameters,
Speaker 5: and if well, up, it's there, how quickly do you
Speaker 5: bring that to the marketplace.
Speaker 8: So Pennsylvari simply aggregates all of the latest and greatest
Speaker 8: GENAI tools and you can do everything from creating insights
Speaker 8: to packshots, to TikTok posts, to YouTube videos to Instagram posts.
Speaker 1: End to end.
Speaker 8: It's predictive, so it will give you based on I
Speaker 8: think the one thing that's really unique about it is
Speaker 8: we have a billion dollars of media spend across five
Speaker 8: thousand brands since twenty eighteen, and we've made a million
Speaker 8: generative aiads. So that allows us to predict whether we
Speaker 8: think the content that's been created using the GENI platform
Speaker 8: is going to perform better, worse, or whether we don't
Speaker 8: have data around that. And it's interesting people like to
Speaker 8: play with things that they don't have data on because
Speaker 8: it's I think a marketer is by definition are optimistic.
Speaker 8: So literally it's an end to end platform to allow
Speaker 8: you to create ads, and it typically does that with
Speaker 8: twice the performance, ten times faster, and somewhere between thirty
Speaker 8: and fifty percent cheaper.
Speaker 3: As you say, you've been doing this since twenty fifteen.
Speaker 3: Now some of the bigger juggernauts, and you come from
Speaker 3: having been the I think the youngest CEO ever in
Speaker 3: the advert in the advertising space for havas well. Now
Speaker 3: it's wpp in on the act and now we're seeing
Speaker 3: some of the others coming in and spending millions to
Speaker 3: try and catch up.
Speaker 4: In generally, what makes you beat them?
Speaker 8: Look, I think if you look in history, it's never
Speaker 8: the big legacy business that succeeds post the revolution, you know,
Speaker 8: I think it's it's incredibly complicated to take a business
Speaker 8: of one hundred and twenty thousand people and totally change
Speaker 8: what it does. I mean, I created the company in
Speaker 8: twenty fifteen with technology at the core, machine generated and
Speaker 8: AI content at the core, and I think it's really hard.
Speaker 1: So it's not totally impossible.
Speaker 8: But you know, Kodak didn't win in digital photography, IBM
Speaker 8: didn't win in mobile to Nephie AOL isn't talked about
Speaker 8: too much in the Internet space, right.
Speaker 5: How engaged are the advertisers forget the agencies and the platforms.
Speaker 5: Caroline and I've talked a lot about the proximity of
Speaker 5: a brand to It can be malicious content, it can
Speaker 5: be mislabeled content. But that's what we're talking about here.
Speaker 5: Great opportunity but also heightened risky.
Speaker 8: So look, I think at a big picture level, like
Speaker 8: one hundred percent of the headlines today are on jen
Speaker 8: Ai in less than one percent of the content is
Speaker 8: created using it, So I think we shouldn't lose sight
Speaker 8: of that. That said, I've never seen anything in my
Speaker 8: career like this in terms of the level of brand interest.
Speaker 8: I mean, it's literally and you know, many of the
Speaker 8: big surveys have said that, you know, over sixty percent
Speaker 8: of the global CEOs are saying it's going to impact
Speaker 8: our top and bottom line this year, not in the future.
Speaker 1: But obviously it comes with issues.
Speaker 8: So I think you've got this incredible interest and then
Speaker 8: it's okay, you know, what do we do about our copyright?
Speaker 8: How about data and privacy? How about bias? You know,
Speaker 8: there's a number of big issues, and in fact, when
Speaker 8: we built the pro product of Pencil, it was designed
Speaker 8: to circumnavigate all of those. But you know, it's there's
Speaker 8: a real learning curve going on for everyone, and I
Speaker 8: think you often see brands go from sort of initially
Speaker 8: being concerned and as they understand more. I mean almost
Speaker 8: our general counsel is our kind of secret weapon in Jenai.
Speaker 8: But so, yeah, enormous interest, but also some complexities.
Speaker 4: Talk about a GC.
Speaker 3: You've got a new CFO, you're reportedly valued at about
Speaker 3: four billion, you're looking going public.
Speaker 8: Look, I'm very happy being a private company at the moment.
Speaker 1: You know.
Speaker 8: My kind of quote on this is I look at
Speaker 8: going to many places on holiday. But it's not because
Speaker 8: I look that I always, you know, go there. Obviously
Speaker 8: it's an option in the future, but so is staying private.
Speaker 8: You know, we're profitable, high growth, we're well funded, so
Speaker 8: we'll see. You know, I think it's not something that
Speaker 8: is off the cards, but neither is it a plan.
Speaker 5: When you file the S one we have that clip
Speaker 5: to play. Yeah, exactly, sire. We appreciate your time. That
Speaker 5: brand text. See having founder David Jones.
Speaker 7: They see everyone has something unique about something that sets
Speaker 7: them apart.
Speaker 1: It's just in my case, you know, it's quite obvious
Speaker 1: what that thing is. I am literally filled with pard Are. Yeah,
Speaker 1: living like this has its challenges. Windy days, for one,
Speaker 1: are particularly troublesome.
Speaker 5: That was a clip from Airhead, a short film from
Speaker 5: Toronto based multimedia production company Shy Kids. It's one of
Speaker 5: the first short films made using open AIS Sora as
Speaker 5: sort of The director of that short film, Walter Woodman
Speaker 5: us now with more. We've covered Sora. We've talked about
Speaker 5: this in the context of the reaction to it, but water,
Speaker 5: let's start with the process. What it was like creating
Speaker 5: this short film using open AIS technology.
Speaker 11: Yeah, it's very interesting. It's very similar to many of
Speaker 11: the processes we already use. We're animators by trade, so
Speaker 11: we still had to go through the regular steps of
Speaker 11: you know, making a script and then we would edit
Speaker 11: and animate and add sound and sound effects and things
Speaker 11: like that. The thing that really changed was most of
Speaker 11: what you see the images were generated using SORA.
Speaker 3: So Walter talk to us about ultimately the heavy lift
Speaker 3: or lack thereof of people. The hand ringing that goes
Speaker 3: on around generative AI, particularly around creative is that it
Speaker 3: means few of you are needed.
Speaker 4: But is that true? What was the working process like?
Speaker 11: Yeah, I've read those Twitter comments as well, and what
Speaker 11: I would say is that without fifteen years of making
Speaker 11: films and tons of experience, I don't think that this
Speaker 11: would have happened. I think that our team is very
Speaker 11: adept at making films, and while generating the images was
Speaker 11: slightly different than normally having to go out and shoot
Speaker 11: and grab things like that, it's still a time intensive
Speaker 11: and human intensive process that requires several hands and several creatives.
Speaker 11: For this particular project, it was more on the side
Speaker 11: of editing and animating, and I would more liken it
Speaker 11: to an animated process. However, we're currently working on a
Speaker 11: sequel and that's going to be more of a combination
Speaker 11: of live action with the actual animation, so that's more
Speaker 11: of a traditional workflow.
Speaker 3: Well, so why did you want to do this? Why
Speaker 3: did you want to get in using SAU so quickly?
Speaker 11: I think as filmmakers, every time you see something new,
Speaker 11: it's an opportunity to expand your creativity and expand the
Speaker 11: things that you'd like to tell the world. And for us,
Speaker 11: we see this as an opportunity to with a very cute,
Speaker 11: fun short film showing people that it's not all doom
Speaker 11: and gloom, that there's actually hope for some positivity and
Speaker 11: that this technology is not something to be scared of,
Speaker 11: but something to work with.
Speaker 5: It is a short film about a young person with
Speaker 5: a balloon for a head, a metaphor for the fragility
Speaker 5: of human life, is my interpretation, critic ed Ludlow. But
Speaker 5: it's only one minute and twenty one seconds long, and
Speaker 5: I think is that the limitation here that you are
Speaker 5: confined to very short clips at this stage?
Speaker 11: Walter, Well, we could put clips up to one minute.
Speaker 11: I think the thing is, though, is that you have
Speaker 11: to sort of curate what's the best, you know, ten
Speaker 11: seconds or five seconds, and the same way where you
Speaker 11: shoot everything. It took tons and tons of generations and
Speaker 11: clips to get to one minute. So in terms of
Speaker 11: making something longer, I'm not the person who's going to
Speaker 11: say this is it. It can only be one minute long.
Speaker 11: And in fact the sequel already we're clocking in at
Speaker 11: about three or four minutes, and I think that it's
Speaker 11: a fool's errand to try to say how long these
Speaker 11: things can go for. But what I will say is
Speaker 11: that in order to get something that was cohesive for
Speaker 11: a minute, it required really, you know, sifting through the
Speaker 11: same way when you're making a documentary, you know ninety
Speaker 11: percent of what you shoot gets thrown on the floor.
Speaker 11: I would say it was a similar sort of burn
Speaker 11: rate for this.
Speaker 3: Well to women as director over at Shy Kids, it's
Speaker 3: a great watch. Go and have a look at it.
Speaker 3: We thank you so much, looking forward to the sequel. Meanwhile,
Speaker 3: what a fascinating conversation ultimately about we had it from
Speaker 3: the advertising space. Not much doom and gloom on that
Speaker 3: jobs aren't going to be suddenly eradicated when you generatorve
Speaker 3: AI within advertising, but you're suddenly going to see your
Speaker 3: job description change and used in different ways. And it
Speaker 3: feels as though this was pretty labor intensive even.
Speaker 5: If you are does it allows you to be created?
Speaker 5: That b tech producer Margerie Gallery and makes the point
Speaker 5: when we played it out you have to remember those
Speaker 5: are generative AI generated images. But it's very convincing. It's
Speaker 5: real and that's the takeaway for me. But a lot
Speaker 5: of work for less than ninety seconds.
Speaker 3: Exactly and thus far, Yes, I'm sure it gives you
Speaker 3: in a whole load of creative opportunity, whether or not
Speaker 3: there's that much efficiency as yet in making of it.
Speaker 5: A scoop that the sequels coming and it will be
Speaker 5: four minutes long, so we're all getting back for that.
Speaker 4: I want to know what the name is now. Meanwhile,
Speaker 4: that does it for this edition of Bloombo Technology.
Speaker 5: Is so great to have you in the hab yeah
Speaker 5: for one week only, recap the show on the podcast.
Speaker 5: So many of you are tuning in, maybe you're commuting
Speaker 5: into Manhattan, or you're in the Bay Area listening, or
Speaker 5: you're in London or Tokyo. Thank you for listening to
Speaker 5: the podcast on Apple, Spotify, iHeart and all the Bloomberg platforms.
Speaker 5: As we said from New York's You this week, this
Speaker 5: is Bloomberg Technology
Speaker 7: M HM.