WEBVTT - Intel Slides on Outlook, Google and Microsoft See AI Demand, Lime Expands E-Fleet 0:00:02.600 --> 0:00:07.320 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.800 --> 0:00:09.520 From Mahard. 0:00:09.640 --> 0:00:14.080 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:14.440 --> 0:00:18.440 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:32.280 --> 0:00:34.839 I'm Caroline Heid at Bloomberg's World headquarters in New York. 0:00:34.960 --> 0:00:37.880 And I Amed Ludlow in San Francisco. This is Bloomberg. 0:00:37.440 --> 0:00:38.680 Technology coming up. 0:00:38.760 --> 0:00:42.600 Intel, it slides amid some tepid forecasts. We're going to 0:00:42.680 --> 0:00:45.080 discuss all of that with the CEO, Pat Girl Singer. 0:00:45.720 --> 0:00:49.200 Plus Microsoft and Google posts strong results on AI demand 0:00:49.280 --> 0:00:50.960 for cloud full coverage ahead. 0:00:50.760 --> 0:00:54.000 And Jeff Bezos and Andy Jesse deleting chats in an 0:00:53.960 --> 0:00:57.200 anti trust probe. Now that's according to the FTC. We 0:00:57.240 --> 0:00:59.720 bring you their response and the details right now. 0:00:59.760 --> 0:01:01.440 Caro, we start with semiconductors. 0:01:01.480 --> 0:01:01.760 We do. 0:01:01.840 --> 0:01:05.040 Let's dig in on ill things Intel. Blumberg's in king 0:01:05.200 --> 0:01:08.960 was on, of course, across the earnings last night, discussing 0:01:09.040 --> 0:01:11.240 with the business and look, this seems to be a 0:01:11.240 --> 0:01:12.440 worry about forecasts. 0:01:12.520 --> 0:01:15.080 Q one actually pretty resilient. The forecast Teppid. 0:01:16.319 --> 0:01:19.479 Yeah, no, you're absolutely right. All of the divisions performed 0:01:19.600 --> 0:01:21.600 roughly where Wall Street was expecting. 0:01:21.640 --> 0:01:22.840 If not a little bit better. 0:01:23.360 --> 0:01:26.600 The issue that investors had was with the forecast that 0:01:26.720 --> 0:01:30.480 Partner's team put out there, and I was considerably lighter 0:01:30.520 --> 0:01:35.200 than the consensus, and that was explained by Partner's management 0:01:35.200 --> 0:01:38.039 team as that being related to a structural issue that 0:01:38.440 --> 0:01:40.600 some of the excess demand that out there can't be 0:01:40.680 --> 0:01:43.760 met because of an issue with a shortages of a 0:01:43.800 --> 0:01:45.200 certain type of manufacturing. 0:01:46.760 --> 0:01:49.000 It's important about the server market. What did we learn 0:01:49.040 --> 0:01:51.080 about Intel's place in the server market? 0:01:51.360 --> 0:01:54.760 Yeah? I mean, as I forwarded along to you and 0:01:54.880 --> 0:01:57.600 analyst to put it this way, look at the server market. 0:01:58.200 --> 0:02:00.639 The fund you know, the basic server market that Intel 0:02:00.680 --> 0:02:03.920 has owned for many years just isn't growing at a 0:02:04.040 --> 0:02:07.680 rate that it has in the past because spending is 0:02:07.680 --> 0:02:11.320 going elsewhere. It's going into AI accelerators and that isn't 0:02:11.320 --> 0:02:12.720 a big market for Intel yet. 0:02:12.880 --> 0:02:16.000 And finally, we should talk about foundry. Intel is unique 0:02:16.000 --> 0:02:18.560 in that sense that it is pursuing two business models. 0:02:18.560 --> 0:02:19.399 What did you learn there? 0:02:19.840 --> 0:02:22.040 Yeah, I mean that's the big story, isn't it. That 0:02:22.639 --> 0:02:26.400 you know, Pap is pursuing some long term fundamental changes 0:02:26.440 --> 0:02:30.120 to the chip industry and if it plays out how 0:02:30.160 --> 0:02:33.080 he projects, we're going to see a whole different Intel 0:02:33.080 --> 0:02:34.600 and a whole different industry. 0:02:34.960 --> 0:02:36.079 But in the meantime, he's. 0:02:35.960 --> 0:02:38.960 Got a report quarterly earnings based upon what's happening right now. 0:02:39.160 --> 0:02:41.840 Bloomberg's in king who leads our semiconduct to coverage here 0:02:41.840 --> 0:02:44.080 at Bloomberg. Thank you very much, And Caro, you know 0:02:44.280 --> 0:02:47.240 it's the earnings context, right. They are numbers relative to 0:02:47.280 --> 0:02:51.000 street expectations, But like every earnings, it's about. 0:02:50.720 --> 0:02:52.560 An outlook and the long term. 0:02:52.680 --> 0:02:55.359 The story with Intel that I think the market's seizing 0:02:55.400 --> 0:02:56.000 on right now. 0:02:56.120 --> 0:02:58.040 The long term we want to dig into with a CEO. 0:02:58.120 --> 0:03:00.400 In the short term, though, we have to ignore the 0:03:00.400 --> 0:03:02.560 market reaction and one point the worst sell off that 0:03:02.600 --> 0:03:05.880 we've seen since twenty twenty July of twenty twenty. We're 0:03:05.880 --> 0:03:07.600 now coming off of those lows ed but we're now 0:03:07.600 --> 0:03:10.200 at the worst since January twenty twenty four. But just 0:03:10.200 --> 0:03:11.680 to add to the fact that this is a company 0:03:11.680 --> 0:03:15.040 that's lost a third of its market capitalization in this year. 0:03:14.919 --> 0:03:19.679 Alone, we know that AI is a complicated story. Yes, 0:03:19.840 --> 0:03:23.760 AI accelerators, but the server market needs CPUs. It also 0:03:23.800 --> 0:03:27.200 needs memory, which we discussed with Micron just the other day. 0:03:27.600 --> 0:03:30.040 A lot of this is happening in parallel, and as 0:03:30.080 --> 0:03:32.760 we learned with Microsoft and Google, some of the cloud 0:03:32.800 --> 0:03:37.320 growth is not necessarily AI related. Data center infrastructure is 0:03:37.360 --> 0:03:41.000 needed for non AI reasons as well. So let's try 0:03:41.000 --> 0:03:44.480 and unpick what's happening in a name that, as you say, 0:03:44.800 --> 0:03:48.920 is down. We welcome now our Bloomberg TV and radio 0:03:48.960 --> 0:03:53.640 audiences worldwide, and joining us is the Intel CEO Pat Gelsinger. 0:03:53.680 --> 0:03:55.880 A Pat, good morning to you and thank you for 0:03:55.920 --> 0:03:58.040 your time. You know, the stock is down more than 0:03:58.080 --> 0:04:00.800 ten percent, and we're kind of here again right where 0:04:01.360 --> 0:04:03.960 there's the short term and the long term where you're 0:04:03.960 --> 0:04:07.920 trying to convince investors of a return to technology leadership 0:04:08.680 --> 0:04:13.800 and also grow a foundry business. Have you an updated 0:04:13.880 --> 0:04:16.440 timeline and when you think you will achieve that target? 0:04:17.320 --> 0:04:17.560 Yeah? 0:04:17.600 --> 0:04:20.840 Thanks Ed, And obviously, hey, we delivered a solid Q one, right, 0:04:20.880 --> 0:04:24.520 We met on revenue, We beat on earnings a bit 0:04:24.640 --> 0:04:26.520 tep it in the first half, as we said, but 0:04:26.560 --> 0:04:29.320 we see a lot of improvement as we go through 0:04:29.360 --> 0:04:33.120 the year. And with that, obviously the foundry business, as 0:04:33.160 --> 0:04:35.080 I would say, we're going to see progress in the 0:04:35.080 --> 0:04:37.919 foundry business every quarter from now to the end of 0:04:37.920 --> 0:04:40.560 the decade. It just gets better and better as we 0:04:40.600 --> 0:04:43.360 move into our new technologies, you know, as we've said, 0:04:43.400 --> 0:04:47.560 getting back to process leadership, which have better asps and 0:04:47.600 --> 0:04:50.360 we can build better products with them. We win more 0:04:50.400 --> 0:04:54.080 external foundry customers as our scale growth, and we also 0:04:54.160 --> 0:04:56.440 get past this period where we had to invest to 0:04:56.560 --> 0:04:59.640 catch up right and create the capacity for a decade 0:04:59.680 --> 0:05:03.120 plus of under investment. So everything there becomes a tailwind 0:05:03.160 --> 0:05:06.279 going forward. And we hit key milestones and one of 0:05:06.279 --> 0:05:08.400 those I was very proud of just this week we 0:05:08.480 --> 0:05:11.919 went to production with our first server part on Intel three. 0:05:12.360 --> 0:05:17.520 The US is back to leadership process technology being manufactured 0:05:17.520 --> 0:05:19.080 on our shores for the first. 0:05:18.920 --> 0:05:19.919 Time in a decade. 0:05:20.080 --> 0:05:22.680 So some key milestones, and I'll just say everything is 0:05:22.680 --> 0:05:25.839 coming together as we would say, and we're very optimistic 0:05:25.880 --> 0:05:29.599 that yes, in fact, we will deliver the foundry business 0:05:29.640 --> 0:05:33.080 and the manufacturing capabilities as we've laid out for the company, 0:05:33.240 --> 0:05:36.040 the industry, and the world Stiphil. 0:05:36.160 --> 0:05:37.599 Interestingly, anais over there. 0:05:38.120 --> 0:05:41.240 Twenty twenty four should mark the bottom in many aspects. 0:05:41.279 --> 0:05:42.320 Pat but they. 0:05:42.200 --> 0:05:45.159 Really want to understand the pace of the climb that 0:05:45.279 --> 0:05:49.520 is necessary. How can you tell us about how quickly 0:05:49.560 --> 0:05:52.520 you'll be able to scale that market share that. 0:05:52.480 --> 0:05:53.359 You're so far lost. 0:05:54.120 --> 0:05:56.360 Yeah, And you know, we look at Intel now in 0:05:56.440 --> 0:06:01.479 these two different perspectives Intel products, and we expose through 0:06:01.520 --> 0:06:05.320 our recast financials that we have a very solid, fabulous 0:06:05.400 --> 0:06:08.560 business with healthy financials and we expect those to improve 0:06:08.600 --> 0:06:11.400 over time. But the big story has been about exposing 0:06:11.440 --> 0:06:15.120 the foundry financials and the losses associated with those. And 0:06:15.160 --> 0:06:17.599 what we see is over the decade, you know that 0:06:17.640 --> 0:06:21.000 we'll cross through profitability in the middle of the period 0:06:21.560 --> 0:06:24.520 for that business as we get back to process leadership 0:06:24.839 --> 0:06:29.440 and start to moderate the level of investment required to 0:06:29.480 --> 0:06:33.440 go rebuild that decade of under investment. And as we 0:06:33.480 --> 0:06:36.320 do that, if we would have that today, we'd be 0:06:36.400 --> 0:06:39.120 more than double the earnings this year that we're forecasting. 0:06:39.200 --> 0:06:42.039 So it becomes a huge positive lever for us. And 0:06:42.080 --> 0:06:44.200 as I like to say, all of that's in our control, 0:06:45.080 --> 0:06:48.800 the wafers, getting back to leadership, the product implications of it, 0:06:48.920 --> 0:06:50.960 all of these things are our control, and it gets 0:06:51.040 --> 0:06:54.159 better as we win additional external foundry customers. 0:06:55.560 --> 0:06:58.360 The link I think pat is that is about growing 0:06:58.400 --> 0:07:02.880 market share a server to support the costs necessary for 0:07:02.920 --> 0:07:06.680 the foundry business. You're asked an interesting question on the 0:07:06.760 --> 0:07:11.080 call in the context of servers built on x eighty 0:07:11.120 --> 0:07:15.200 six versus on based alternatives, And you gave a pretty 0:07:15.200 --> 0:07:18.080 thorough explanation about the place of all of those particular 0:07:18.200 --> 0:07:21.600 data center CPUs. But what I didn't hear was what's 0:07:21.680 --> 0:07:24.400 happening out there in the real world. Where are data 0:07:24.440 --> 0:07:26.600 centers being built and what are they being built on 0:07:26.760 --> 0:07:27.239 right now? 0:07:28.360 --> 0:07:30.440 Yeah, and this is important because we've been at the 0:07:30.520 --> 0:07:33.840 period now for a number of quarters where data centers 0:07:33.920 --> 0:07:38.280 CPUs have been fairly tepid, and we do see that improving. 0:07:38.360 --> 0:07:41.240 We had good improvement in the first quarter of the year, 0:07:41.280 --> 0:07:43.920 and we expect that to continue through the year, and 0:07:44.000 --> 0:07:46.480 you know, there's time for refrash in those data centers. 0:07:46.640 --> 0:07:47.920 But we're also seeing that the. 0:07:47.920 --> 0:07:51.840 CPUs now has head nodes for AI use cases. We've 0:07:51.880 --> 0:07:54.920 posted some pretty incredible results that we can now run 0:07:55.080 --> 0:07:58.840 seventy billion parameter models natively. 0:07:58.360 --> 0:07:59.080 On the CPU. 0:07:59.240 --> 0:08:02.600 I don't need accelerator. I can do everything on the 0:08:02.640 --> 0:08:06.280 software stack that I already use inside of data centers. 0:08:06.680 --> 0:08:09.960 And we're seeing that these power efficient products that we're 0:08:09.960 --> 0:08:13.200 bringing to the marketplace, such as our Xeon six that 0:08:13.240 --> 0:08:16.600 we just announced, are going to enable us to stabilize 0:08:16.640 --> 0:08:19.840 and regain market share with much higher core counts. The 0:08:19.920 --> 0:08:23.360 asps are going up very nicely on that through the year, 0:08:23.480 --> 0:08:25.880 So we saw growth in Q one. We expect that 0:08:25.960 --> 0:08:28.640 to continue through the year, and as we get to 0:08:28.680 --> 0:08:31.480 the back half of the year, our Accelerator product line 0:08:31.520 --> 0:08:35.760 with Goudy Xeon plus Goudy, we become, we believe, becomes 0:08:35.800 --> 0:08:39.319 a very compelling solution for enterprise customers, and we have 0:08:39.440 --> 0:08:42.920 quite a number of announcements of those this quarter. Customers 0:08:42.920 --> 0:08:49.560 such as Bosh and Dell and super Micro all bringing 0:08:49.600 --> 0:08:54.160 those into the marketplace, Roach and IBM, and eCloud partners 0:08:54.240 --> 0:08:58.080 like Nahvor, the fastest growing cloud provider in Asia, all 0:08:58.120 --> 0:09:00.440 of those coming alongside the Intel strategy. 0:09:00.520 --> 0:09:02.160 So we see that momentum. 0:09:01.679 --> 0:09:04.920 Building it momentum, and we want to just remind us 0:09:04.960 --> 0:09:08.760 that we are with TV radio audiences. The CEO of Intel, 0:09:08.800 --> 0:09:12.319 Pat Gelsinger, Pat on the momentum. Everyone wants to talk 0:09:12.320 --> 0:09:13.480 about AI in all. 0:09:13.280 --> 0:09:14.600 Of its ways and means. 0:09:14.640 --> 0:09:17.200 You've been focusing in on an AIPC and I'm just 0:09:17.240 --> 0:09:20.360 really interested in Ultimately you're going to be watch shipping 0:09:20.360 --> 0:09:24.920 in excess. Originally forty million AIPC CPUs that's target for 0:09:24.960 --> 0:09:27.839 twenty twenty four, But what's the demand like at the moment, 0:09:27.880 --> 0:09:29.080 pat and what's the cost like. 0:09:30.120 --> 0:09:32.720 Yeah, And when we announced the category at the end 0:09:32.760 --> 0:09:35.800 of last year, Carolyn, it was sort of like everybody says, Wow, 0:09:35.840 --> 0:09:38.840 what's going on the AIPC And you're seeing a flurry 0:09:39.080 --> 0:09:41.920 of interest of other people coming into that market. But 0:09:42.080 --> 0:09:45.800 Intel unquestionably the leader. You're first to declare the market, 0:09:45.840 --> 0:09:48.680 first to describe the use cases. And our first product, 0:09:49.000 --> 0:09:53.480 Core Ultra, is having a very robust ramp into the marketplace, 0:09:53.800 --> 0:09:56.840 and to some degree, I'm racing the catch up to 0:09:56.880 --> 0:09:59.520 the demand. We're meeting all of our supply commitments, but 0:09:59.559 --> 0:10:02.480 not all of the upside requests yet that we're getting 0:10:02.480 --> 0:10:03.320 from customers. 0:10:03.320 --> 0:10:04.680 So this is very robust. 0:10:05.040 --> 0:10:08.640 We expect that we'll exceed the forty million units this year. 0:10:08.920 --> 0:10:12.600 We'll be introducing our next generation product in the middle 0:10:12.600 --> 0:10:14.920 of this year, so all of these pieces, we are 0:10:15.040 --> 0:10:19.720 very optimistic. And you're seeing use cases and communications where 0:10:20.000 --> 0:10:23.840 all of a sudden, I get summarization, contextualization, translation in 0:10:23.920 --> 0:10:28.880 real time, all running on my PC. Developers, gamers, all 0:10:28.920 --> 0:10:31.920 of these use cases are now becoming AI Enabled and 0:10:32.040 --> 0:10:35.680 Intel leading the AIPC parade. It's a very exciting time 0:10:35.960 --> 0:10:39.160 for I believe will be the biggest cycle of PC 0:10:39.480 --> 0:10:42.600 refrash and expansion that we've seen in likely decades. 0:10:43.160 --> 0:10:46.320 Pat this is a conversation about your technology and about 0:10:46.440 --> 0:10:48.960 ultimately your fundamentals of a business. I'm just going to 0:10:48.960 --> 0:10:51.760 take a turn for a moment, and it's a sensitive question, 0:10:51.880 --> 0:10:52.880 so I give you a moment to. 0:10:52.880 --> 0:10:53.480 Think about it. 0:10:53.520 --> 0:10:55.800 But giving your relationship with Israel and the fact that 0:10:55.800 --> 0:10:58.439 you are one of the largest employers over there, how 0:10:58.480 --> 0:11:01.560 are you currently feeling about Well, students in the United 0:11:01.559 --> 0:11:05.959 States protesting against endowments being invested in companies that are 0:11:06.000 --> 0:11:07.400 associated with Israel. 0:11:07.120 --> 0:11:07.679 At this moment. 0:11:09.040 --> 0:11:13.119 Well, we have been in Israel for forty years now 0:11:13.320 --> 0:11:18.720 and it's been an incredible country for us, incredible innovators, 0:11:19.080 --> 0:11:24.800 and extraordinary resilience by the Israeli people, and they continue, 0:11:25.120 --> 0:11:29.400 despite the challenges of the war that's going on there, 0:11:29.559 --> 0:11:33.080 to deliver against their objectives. So we're very committed to 0:11:33.120 --> 0:11:37.000 support our teams wherever they are in the world that said, hey, 0:11:37.160 --> 0:11:42.240 we seek peace, and we've been clearly emphasizing that we 0:11:42.600 --> 0:11:47.640 need to find routes of sustainable peace in the region. 0:11:47.720 --> 0:11:52.040 I've been supporting perspectives that reinforce that across the region, 0:11:52.480 --> 0:11:54.880 and as we look across the world, we say, boy, 0:11:54.960 --> 0:11:57.439 you know, there continues to be the turbulence. And fundamentally, 0:11:57.440 --> 0:12:01.760 our strategy is around building globally rec zillient supply chains 0:12:01.760 --> 0:12:04.840 that are balanced across the world. So our core strategy 0:12:04.920 --> 0:12:07.600 is so emphasizing that there will be these challenges across 0:12:07.640 --> 0:12:11.119 the world, you know, whether that's in Israel, Ukraine or Asia, 0:12:11.160 --> 0:12:13.240 and we are committed to making sure that we can 0:12:13.320 --> 0:12:17.680 support the global markets that we serve right with a 0:12:17.720 --> 0:12:20.559 strategy that really was built for a turbulent world. 0:12:21.920 --> 0:12:25.360 Pat let's end on AI accelerators. Goudi is on track 0:12:25.360 --> 0:12:28.719 for five hundred million this year, AMD's MI I three 0:12:28.800 --> 0:12:31.080 hundred X will probably do three and a half billion, 0:12:31.440 --> 0:12:35.480 and Nvidia with its generations will do forty billion. You've 0:12:35.559 --> 0:12:39.800 said that choice is important and also the CPU is important, 0:12:39.840 --> 0:12:42.320 and I accept that many share it, but do you 0:12:42.440 --> 0:12:45.280 see a clear path where the numbers I just outlined 0:12:45.360 --> 0:12:49.480 rebalance in your favor in the AI accelerator market going forward. 0:12:50.880 --> 0:12:54.080 Given the strength that we saw at our vision event 0:12:54.160 --> 0:12:56.959 that we had, we had twenty plus customers coming out 0:12:57.040 --> 0:13:00.800 publicly in support of our accelerator and our Z plus 0:13:00.840 --> 0:13:04.280 accelerator strategy. We're really starting to see that pipeline of 0:13:04.520 --> 0:13:10.000 activity convert and ultimately much of the activity that you've 0:13:10.040 --> 0:13:13.840 seen so far on generative AI has been in cloud 0:13:14.160 --> 0:13:18.320 training and now and I think the ultimate monetization of 0:13:18.480 --> 0:13:22.199 AI happens as business deployments start to occur, and those 0:13:22.200 --> 0:13:24.360 are the areas that we see strength. We launch the 0:13:24.720 --> 0:13:29.000 open platform for Enterprise AI. How do we enable these 0:13:29.120 --> 0:13:32.439 use cases inside of the enterprise, but in an open 0:13:32.559 --> 0:13:35.720 architecture that many get to participate in. We announced the 0:13:35.840 --> 0:13:39.760 open AI Networking, you know, from closed proprietary networking to 0:13:39.920 --> 0:13:43.640 standard ethernet based scale up and scale out networking. We 0:13:43.679 --> 0:13:46.520 announced that this quarter, and obviously the momentum that we're 0:13:46.520 --> 0:13:49.360 seeing with Goudy, know, all of that half a billion, 0:13:49.360 --> 0:13:51.200 almost all of it's in the second half of the year, 0:13:51.240 --> 0:13:54.400 so you can see a very accelerated cycle, a lot 0:13:54.440 --> 0:13:58.520 of enthusiasm for Goudy, you know, the unquestioned leader in 0:13:58.880 --> 0:14:02.720 TCO total call the ownership for enterprises, building on the 0:14:02.800 --> 0:14:05.600 Xeon franchise and the position that we have in the 0:14:05.760 --> 0:14:10.400 enterprise and literally ISVs and cloud providers, but most importantly 0:14:10.720 --> 0:14:14.400 enterprise customers seeing that value proposition. Yeah, we feel like 0:14:14.440 --> 0:14:17.400 we're gaining a lot of momentum now in this category 0:14:17.440 --> 0:14:21.359 and feel good about the potential for our AI everywhere AIPC, 0:14:21.600 --> 0:14:24.360 AI Edge, AI Enterprise and AI cloud. 0:14:24.840 --> 0:14:27.160 Ending on an optimistic mote, we thank you so much, 0:14:27.160 --> 0:14:30.600 Intel CEO Pat Gelsinger there on all things AI, all 0:14:30.640 --> 0:14:40.360 things Intel numbers. Got to get back to those earnings, 0:14:40.440 --> 0:14:42.760 got to get back to the new two trillion dollar 0:14:43.080 --> 0:14:47.240 entrant Google Microsoft two shares absolutely popping higher after the 0:14:47.320 --> 0:14:47.840 surge and. 0:14:47.840 --> 0:14:49.680 Cloud revenue those businesses. 0:14:49.440 --> 0:14:52.000 And fueled in part, I guess what booming use of 0:14:52.080 --> 0:14:55.960 artificial intelligence services is helping deliver strong earnings results and 0:14:55.960 --> 0:14:57.920 we want to get to it with Clearbridge Investments Senior 0:14:57.920 --> 0:15:01.560 research analyst Hillary Frish, who just comment on the one 0:15:01.560 --> 0:15:03.960 that's moving the most today and alphabet. 0:15:03.680 --> 0:15:04.520 Parent at Google. 0:15:05.040 --> 0:15:08.000 Interestingly, cloud always been seen as the laggard there, but 0:15:08.360 --> 0:15:12.040 infusing artificient intelligence is helping bring about market share, particularly 0:15:12.080 --> 0:15:12.680 with startups. 0:15:12.920 --> 0:15:15.560 Indeed, it is thanks for having me cure line. 0:15:15.800 --> 0:15:16.000 Yeah. 0:15:16.080 --> 0:15:19.560 Google is well known for having a strong presence among 0:15:19.960 --> 0:15:24.880 startups tech companies and they have among the best AI 0:15:25.000 --> 0:15:28.640 assets around historically, and so they're going to benefit from 0:15:28.640 --> 0:15:30.640 this along with everybody else. And we've seen two quarters 0:15:30.640 --> 0:15:32.720 of improvement at Google Cloud now, and. 0:15:32.640 --> 0:15:35.200 I think many were waiting for Okay, you've got these offerings, 0:15:35.240 --> 0:15:37.800 how are people using them, adopting them and actually boosting 0:15:37.800 --> 0:15:40.480 their own productivity? Microsoft shone a light on the fact 0:15:40.520 --> 0:15:43.040 that what is It's like sixty five percent of the 0:15:43.080 --> 0:15:46.640 Fortune one hundred are using their Azure Cloud at the moment. 0:15:46.840 --> 0:15:49.000 I mean, they must be just ripping away market share 0:15:49.040 --> 0:15:52.120 from everyone else. Even though cloud is still good for Google, 0:15:52.480 --> 0:15:54.280 Microsoft still firing on all the senators for you. 0:15:55.360 --> 0:15:57.760 Indeed, it is, in fact, those cylinders are just really 0:15:57.800 --> 0:16:02.160 starting to get going. It's interesting because Microsoft is absolutely 0:16:02.240 --> 0:16:05.560 benefiting from a share perspective due to their leading position 0:16:05.640 --> 0:16:09.000 in AI across all their businesses. Certainly cross cloud and 0:16:09.160 --> 0:16:12.600 I view AI as ultimately, you know, an ultimate contributor, 0:16:12.640 --> 0:16:14.880 but it's definitely an accelerant to cloud migrations. 0:16:16.080 --> 0:16:18.040 Hillary, good morning, It's ed in San Francisco. 0:16:18.360 --> 0:16:21.840 The share reactions of each are interesting, you know, alphabet 0:16:21.880 --> 0:16:24.360 more pronounced when I talked to Ruth poor Out on 0:16:24.400 --> 0:16:26.440 the phone last night, about cloud. 0:16:26.960 --> 0:16:28.280 She basically said AI. 0:16:28.080 --> 0:16:31.640 Solutions did make a meaningful contribution to that that twenty 0:16:31.680 --> 0:16:34.080 eight percent cloud growth year on year, but she didn't 0:16:34.080 --> 0:16:36.920 put a number on it. Now, Microsoft and amy Hood 0:16:36.920 --> 0:16:39.080 did put a number on it. They said thirty one 0:16:39.080 --> 0:16:42.480 percent asure growth, seven percent of which came from AI. 0:16:43.160 --> 0:16:45.560 So really interesting share reaction. 0:16:45.760 --> 0:16:49.120 I put it to you that Alphabet probably isn't jumping 0:16:49.160 --> 0:16:52.520 as much on that cloud narrative as it is the 0:16:52.560 --> 0:16:54.280 sweetener of a dividend. 0:16:55.640 --> 0:16:56.960 I think you're right about that, Ed. 0:16:57.360 --> 0:17:00.720 I think investors were pleased to see the results across 0:17:00.720 --> 0:17:01.120 the board. 0:17:01.160 --> 0:17:02.200 I think they breathe a. 0:17:02.160 --> 0:17:06.040 Sigh of relief that cloud accelerated, that all businesses accelerated 0:17:06.160 --> 0:17:10.080 quarter over quarter. But the big piece of new information 0:17:10.240 --> 0:17:14.520 here was was operating margin improvement and commitment to that 0:17:14.640 --> 0:17:16.679 through the year, as well as the dividend. And that 0:17:16.680 --> 0:17:18.840 can draw a whole new class of users. But importantly, 0:17:18.880 --> 0:17:23.000 it signals a shareholder friendlier stance than we've seen from 0:17:23.040 --> 0:17:24.080 Google historically. 0:17:25.920 --> 0:17:29.640 Hillary, do you believe now through the lens of Alphabet 0:17:29.680 --> 0:17:33.639 and Microsoft earnings, that corporate America is actually spending on 0:17:33.720 --> 0:17:35.720 and using generative AI. 0:17:37.080 --> 0:17:37.960 I believe they are. 0:17:38.160 --> 0:17:42.800 I believe most of corporate America is experimenting with AI 0:17:42.880 --> 0:17:46.800 and testing generative AI, and in Microsoft's are cloud and elsewhere, 0:17:46.800 --> 0:17:50.240 certainly in Amazon and Google as well, there are some 0:17:50.480 --> 0:17:52.960 early adopters who are starting to get to some level 0:17:53.000 --> 0:17:57.760 of scale. Microsoft seven points of AI contribution were good. 0:17:57.960 --> 0:17:59.760 I would say they were generally in line, though, but 0:17:59.840 --> 0:18:02.119 Mycrosoft did signal on their call that they were actually 0:18:02.160 --> 0:18:05.160 a capacity constrained, alluding to the idea that that number 0:18:05.200 --> 0:18:07.920 would have actually been higher were it not for those constraints. 0:18:08.880 --> 0:18:11.600 I still believe it's going to be starting in the 0:18:11.640 --> 0:18:14.879 second half where we see that Microsoft inferencing base of 0:18:15.040 --> 0:18:18.640 users doing inferencing on their Azure Cloud really broaden out 0:18:18.720 --> 0:18:20.399 and start to drive that number. 0:18:20.840 --> 0:18:23.679 I want to dig into basically the broadening idea. 0:18:23.720 --> 0:18:25.480 Here we're talking about two names. 0:18:25.240 --> 0:18:28.000 That have already done phenomenally well on the hype around AI. 0:18:28.440 --> 0:18:31.160 We're waiting for the spin over effects. Now you shine 0:18:31.160 --> 0:18:32.800 a light on certain companies that I keep an eye 0:18:32.800 --> 0:18:34.560 on because they're New York based Mongo dB. 0:18:34.920 --> 0:18:36.879 We also think about what data dog is up to. 0:18:37.280 --> 0:18:39.520 How are these companies going to benefit from the adoption 0:18:39.560 --> 0:18:40.399 of jener to AI. 0:18:40.800 --> 0:18:44.160 So these companies will benefit the whole consumption complex, Cloud 0:18:44.200 --> 0:18:47.520 Consumption Complex, Mango, dB Snowflake, Data Dog, the. 0:18:49.320 --> 0:18:50.520 First and third being in New York. 0:18:50.640 --> 0:18:54.639 They'll benefit with a lag what they will. So I 0:18:54.680 --> 0:18:56.879 agree with your Caroline that we're not seeing it on 0:18:56.920 --> 0:19:00.119 a broad based basis yet there are select few who 0:19:00.160 --> 0:19:02.120 are actually going to benefit. But what they will benefit 0:19:02.200 --> 0:19:05.800 from is the absence of the extreme cost optimization we 0:19:05.840 --> 0:19:08.960 saw last year, companies going on a buyer strike in 0:19:09.040 --> 0:19:11.359 terms of new projects. They're going to see the flow 0:19:11.440 --> 0:19:15.560 through of what's effectively a cyclical upturn in cloud consumption. 0:19:15.600 --> 0:19:18.119 And we actually heard that from Microsoft last night that 0:19:18.200 --> 0:19:21.680 companies are commencing new projects, that they're starting to do things, 0:19:21.680 --> 0:19:25.439 they're taking out mothballed projects and bringing those back. So 0:19:25.520 --> 0:19:27.200 I think that's a positive for this whole group. 0:19:28.560 --> 0:19:32.080 Hillary, we're down week one of megacap Tech and I'm 0:19:32.080 --> 0:19:35.439 bracing for week two. What do you think is the 0:19:35.480 --> 0:19:39.240 kind of blanket takeaway of this seven day period so far? 0:19:40.520 --> 0:19:46.439 I'd say overall cautiously optimistic. Again, I stick to the 0:19:46.520 --> 0:19:53.400 names where expectations are low, valuations are reasonable, and companies 0:19:53.440 --> 0:19:57.719 have idiosyncratic drivers. Microsoft with AI and share gains the 0:19:57.720 --> 0:20:02.080 cloud consumption complex with the A and some negatives. Amazon 0:20:02.119 --> 0:20:05.360 should show some pretty good results based on the fact 0:20:05.400 --> 0:20:07.720 that they have a lot of tech companies and startups 0:20:07.760 --> 0:20:10.040 on their platform too who are experimenting with AI. But 0:20:10.320 --> 0:20:14.320 it's really company by company and enterprise budgets overall remain 0:20:14.680 --> 0:20:17.920 somewhat constrained in first half. I'd experience more of that 0:20:18.000 --> 0:20:19.120 opening up in second half. 0:20:19.680 --> 0:20:20.679 Lud Fresh all is. 0:20:20.680 --> 0:20:22.960 So good to get your expertise on the time that 0:20:23.000 --> 0:20:25.720 we have earnings and all the time actually clearbridge investments. 0:20:25.800 --> 0:20:27.480 We thank you for being here and what have you got. 0:20:28.240 --> 0:20:30.399 Let's get some news in talking tech and first up 0:20:30.400 --> 0:20:33.920 food delivery service Metwan is planning to launch its international 0:20:33.920 --> 0:20:38.000 platform in Reard, its first location outside of China, according 0:20:38.040 --> 0:20:41.560 to sources involved in discussions. The companies looked into expanding 0:20:41.840 --> 0:20:44.280 in the Middle East for months and could launch as 0:20:44.320 --> 0:20:46.800 early as a few months from now. The move comes 0:20:46.920 --> 0:20:51.840 as Chinese companies seek growth abroad to combat a domestic slowdown. Plus, 0:20:52.080 --> 0:20:55.400 US Secretary of State Anthony Blincoln and Chinese President Jijingping 0:20:55.840 --> 0:20:59.480 met in Beijing. She's China. She issued a warning to 0:20:59.480 --> 0:21:03.400 blink in against quote vicious competition between the two countries, 0:21:03.440 --> 0:21:06.240 saying quote, China and the United States should. 0:21:05.960 --> 0:21:07.800 Be partners rather than rivals. 0:21:07.800 --> 0:21:11.920