WEBVTT - Apple WWDC 2024, MoviePass Documentary 0:00:01.480 --> 0:00:05.120 From Markhard We're Innovation of Money and Power Collie in 0:00:05.240 --> 0:00:06.760 Silicon Valley, NBN. 0:00:07.080 --> 0:00:11.120 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:25.079 --> 0:00:28.000 I'm karenin Hide, Bloomberg's world headquarters in New York. Ed Ludlow, 0:00:28.080 --> 0:00:31.040 He's off. This is Bloomberg Technology. Coming up. We go 0:00:31.120 --> 0:00:34.880 live to Kubutuina, California, as Apple's Annual Developers Conference kicks off. 0:00:35.200 --> 0:00:38.760 Full coverage ahead. Thus we sit down with DreamWorks founder 0:00:38.800 --> 0:00:42.160 Jeffre Katzenberg. That's this. This venture firm raises nearly half 0:00:42.200 --> 0:00:44.720 a billion dollars for a new fund, and we sit 0:00:44.800 --> 0:00:47.479 down with Movie Past co founder Come It What to 0:00:47.520 --> 0:00:51.120 discuss the new documentary on the company's dramatic rise. And 0:00:51.200 --> 0:00:54.160 it's full first. That's checking on these markets. And look, 0:00:54.200 --> 0:00:56.320 we have a lot to digest when it comes to 0:00:56.360 --> 0:00:58.840 political risk over in Europe, when it comes to anticipating 0:00:58.840 --> 0:01:01.320 what the Fed does, and indeed where CPI pushes us 0:01:01.320 --> 0:01:03.720 from the US macro perspective. And we have some new 0:01:03.840 --> 0:01:05.280 entrance to the S and P five hundred and some 0:01:05.280 --> 0:01:06.640 of them are tech names and they're helping them in 0:01:06.640 --> 0:01:09.360 the Nasdaq sustain a little bit of risk on attitude. 0:01:09.360 --> 0:01:11.360 We're up just a tenth of fve percent on the 0:01:11.480 --> 0:01:14.320 key tech benchmark. We're looking though at bond selling off 0:01:14.319 --> 0:01:17.479 across the board, most notably in Europe, but US yields 0:01:17.480 --> 0:01:19.560 also pushing up as we do or have some trepidation 0:01:19.640 --> 0:01:22.160 about which direction the Federal Reserve points has come Wednesday 0:01:22.160 --> 0:01:25.680 and Thursday throughout the week. Indeed, we euro under pressure 0:01:25.959 --> 0:01:28.280 look down six tens percent. This is about France. This 0:01:28.319 --> 0:01:30.920 is about political risk. This is about the right basically 0:01:31.040 --> 0:01:34.040 gaining yet more power when it comes to European Parliament 0:01:34.160 --> 0:01:36.280 and what the French President Macron is trying to do 0:01:36.520 --> 0:01:40.080 to perhaps gain back the narrative, calling of course a 0:01:40.160 --> 0:01:42.560 key legislative vote. Let's move on and have a look 0:01:42.560 --> 0:01:44.520 at what's happening in terms of individual names on the 0:01:44.520 --> 0:01:46.800 tech area though, because Microsoft up six tens one percent, 0:01:46.880 --> 0:01:48.800 we've got a BI rating coming back on this company. 0:01:48.840 --> 0:01:51.880 They're seeing. Further uptick on the share prices is all 0:01:51.920 --> 0:01:53.600 around AI, of course, and it's leading us from a 0:01:53.640 --> 0:01:56.480 points perspective. In Vidia actually turning to the upside rop 0:01:56.520 --> 0:01:58.840 sevent tens percent, which have been down when trading first 0:01:58.840 --> 0:02:01.520 started in what is now a much smaller price point 0:02:02.040 --> 0:02:04.680 tenth of the price point that we'd seen currently on Friday. 0:02:04.680 --> 0:02:06.440 Of course, because we've got that stock split. One hundred 0:02:06.440 --> 0:02:08.440 and twenty one is where we currently trade. Maybe retail 0:02:08.560 --> 0:02:10.440 liking this new price point. I'm looking at Apple though 0:02:10.480 --> 0:02:12.720 one hundred ninety five were off by three quarters of percent. 0:02:13.200 --> 0:02:17.120 We are all eyes on WWDC what we'll get in 0:02:17.320 --> 0:02:21.080 Apple in terms of its AI focus, what Apple Intelligence 0:02:21.080 --> 0:02:23.400 is there. Jackie Devlos is with us live from Couviutino 0:02:23.880 --> 0:02:26.240 to discuss really what we're going to expect, a whole 0:02:26.360 --> 0:02:29.160 raft of how AI is going to be injected into 0:02:29.200 --> 0:02:30.760 the software and into the hardware. 0:02:30.840 --> 0:02:37.520 Jackie, expectations are really high, Caroline. In just under two hours, 0:02:37.520 --> 0:02:40.000 Tim Cook is going to deliver a keynote address which 0:02:40.000 --> 0:02:43.760 will lay out this artificial intelligence vision. Now, thanks to 0:02:43.800 --> 0:02:47.040 Mark German's reporting, we have a little bit of a preview. 0:02:46.760 --> 0:02:47.880 For us what to expect. 0:02:48.160 --> 0:02:52.799 The first being its AI system called Apple Intelligence. This 0:02:52.880 --> 0:02:56.520 is where we will see some generative artificial intelligence features 0:02:56.560 --> 0:03:01.840 being embedded across the iPhone, iPad and MAX with that 0:03:01.960 --> 0:03:05.520 new operating system upgrade. There will also be a major 0:03:05.560 --> 0:03:09.520 announcement with OpenAI. This is the technology, of course that 0:03:09.720 --> 0:03:13.160 powers Chat GPT, which will bring a version of a 0:03:13.240 --> 0:03:16.720 chatbot to Apple and perhaps even provide a makeover for 0:03:16.800 --> 0:03:21.320 its current AI assistant SII. There's a lot hanging here, Carolina, 0:03:21.400 --> 0:03:24.040 especially because Apple has been viewed as somewhat of a 0:03:24.120 --> 0:03:27.480 laggard in comparison to tech peers like Microsoft and Google, 0:03:27.639 --> 0:03:30.640 which it is also in conversations with for its large 0:03:30.680 --> 0:03:32.400 language model technology Gemini. 0:03:32.680 --> 0:03:35.600 I like that context, Jackie, because there has been a 0:03:35.640 --> 0:03:39.560 lot in anticipation, most markedly in the share price managing 0:03:39.560 --> 0:03:42.720 to push higher market capitalization back on top for Apple, 0:03:42.760 --> 0:03:45.480 and I'm interested as to whether really we're going to 0:03:45.520 --> 0:03:48.520 be able to steal the narrative back. Is having partnerships 0:03:48.560 --> 0:03:49.520 good in the short. 0:03:49.360 --> 0:03:54.680 Term, that's certainly the hope. But Apple really isn't fooling 0:03:54.720 --> 0:03:58.480 anyone here. It is somewhat behind the curve, and this 0:03:58.720 --> 0:04:03.120 keynote address will really show just exactly how it intends 0:04:03.400 --> 0:04:06.800 to bring some of that momentum back. Think about exactly 0:04:06.880 --> 0:04:10.680 what Apple excels at devices and really coupling that with 0:04:11.200 --> 0:04:15.920 cutting edge software, but AI and specifically generative AI is 0:04:15.960 --> 0:04:19.080 a whole new ball game. So just exactly how it 0:04:19.200 --> 0:04:23.719 plans to integrate AI features across products like air pods 0:04:23.760 --> 0:04:27.360 for example, or even bring it into augmented reality devices 0:04:27.680 --> 0:04:31.440 or home robotics. That will really provide the longer term 0:04:31.480 --> 0:04:35.040 picture for how AI will change Apple's future. 0:04:35.480 --> 0:04:38.599 Jackie Devilos on the ground love the reporting for a 0:04:38.640 --> 0:04:41.919 couple of hours. Still to wait, Let's keep this conversation going. 0:04:42.120 --> 0:04:44.360 That's going to really feel for whether or not this 0:04:44.400 --> 0:04:47.359 is going to help them shift more phones. Marabella Lopez 0:04:47.440 --> 0:04:50.120 is with US Bounder and Principle Analysts that Lopez Research, 0:04:50.200 --> 0:04:52.839 and Marabel is great to have your voice, because that's 0:04:52.839 --> 0:04:55.880 what everyone's wandering is the AI announcement's going to be 0:04:55.960 --> 0:04:58.040 enough to make us upgrade our phones right now. 0:05:00.080 --> 0:05:02.080 We're seeing with the smartphone market right now, and it 0:05:02.080 --> 0:05:05.200 has been driven primarily by AI features. We've seen the 0:05:05.240 --> 0:05:08.680 camera features come into it, but I actually don't think 0:05:08.680 --> 0:05:11.279 it's just the smartphones we're looking at. As mentioned earlier, 0:05:11.360 --> 0:05:14.760 we're seeing the opportunity for Apple to infuse artificial intelligence 0:05:14.960 --> 0:05:18.520 across this entire stack, including the Vision pro which when 0:05:18.560 --> 0:05:22.240 you look at the augmented reality virtual reality market, we 0:05:22.320 --> 0:05:24.440 still have a long way to go in terms of 0:05:24.480 --> 0:05:28.320 customers adopting this in droves. So there's great opportunity across 0:05:28.360 --> 0:05:30.599 the entire stack. I don't think anybody's really talked about 0:05:30.640 --> 0:05:34.680 the opportunity to improve the services landscape with artificial intelligence. 0:05:34.680 --> 0:05:35.839 So we're actually going. 0:05:35.720 --> 0:05:38.000 To see a lot of activity I think with AI 0:05:38.040 --> 0:05:42.120 across the entire Apple portfolio and including the developer landscape, 0:05:42.120 --> 0:05:45.719 where we expect them to have easier to access software 0:05:45.760 --> 0:05:48.120 coding tools using generative AI. 0:05:48.440 --> 0:05:50.000 And this is what is meant to be about. Yes, 0:05:50.040 --> 0:05:52.159 investors get excited, but we're meant to be seeing the 0:05:52.200 --> 0:05:55.160 developers get excited. Here, Marma, I'm interested in what you're 0:05:55.160 --> 0:05:57.240 saying about services. How will that shift? 0:05:58.800 --> 0:06:01.320 So what we're saying right now services have looked pretty 0:06:01.360 --> 0:06:04.680 much the same since the dawn of cable. We go in, 0:06:04.839 --> 0:06:08.680 we select a program, there's a lot of pull, not 0:06:08.760 --> 0:06:12.400 necessarily enough push or recommendations or guidance. So there's a 0:06:12.400 --> 0:06:15.400 tremendous opportunity there in terms of how do we make 0:06:15.440 --> 0:06:17.320 things more discoverable moving forward. 0:06:17.400 --> 0:06:19.560 So that's one aspect of it. We haven't talked a 0:06:19.600 --> 0:06:20.880 lot about healthcare yet. 0:06:21.080 --> 0:06:24.520 There's a real opportunity with AI to fundamentally change what 0:06:24.560 --> 0:06:27.120 could happen in some of the smart watch on health 0:06:27.120 --> 0:06:30.880 apps going forward. So really, I know that everybody said 0:06:30.920 --> 0:06:34.440 Apple is behind an AI, but I'd like to pose 0:06:34.560 --> 0:06:37.200 the question of how much revenue they really lost by 0:06:37.279 --> 0:06:40.280 quote unquote being behind. If you look at the only 0:06:40.320 --> 0:06:42.600 person that's really making a ton of money on AI 0:06:42.680 --> 0:06:45.520 right now, it's in Nvidia. If you're selling picks and shovels, 0:06:45.560 --> 0:06:47.719 you make a lot of money in AI. Everybody else 0:06:47.800 --> 0:06:49.760 is just still coming up with a strategy that they're 0:06:49.800 --> 0:06:52.880 trying to propose to consumers to get them excited about 0:06:52.880 --> 0:06:53.800 the new technology. 0:06:54.240 --> 0:06:57.240 You might argue, maybe Microsoft's make some revenue, and certainly 0:06:57.279 --> 0:06:59.000 they've been able to do so by teaming up with 0:06:59.080 --> 0:07:04.520 open Ai. How Marvell should that ongoing partnership look like 0:07:04.640 --> 0:07:08.560 if we do see the open Ai Apple convergence here. 0:07:09.560 --> 0:07:12.040 Yeah, this is really interesting because I think we've seen 0:07:12.480 --> 0:07:15.600 all the cloud competing providers tie up with foundation model 0:07:15.600 --> 0:07:17.600 companies and it's been very good for them because the 0:07:17.640 --> 0:07:19.800 money they have to invest to build the foundation models 0:07:19.800 --> 0:07:22.320 themselves doesn't make any sense. I think this is the 0:07:22.360 --> 0:07:25.480 same for Apple. They can tie up, they can use 0:07:25.520 --> 0:07:28.840 the foundation models. We're seeing a wide range of innovation 0:07:28.920 --> 0:07:31.680 that's happened over the past year so Caroline, so we 0:07:31.680 --> 0:07:34.720 have many models. I expect Apple in the longer term 0:07:34.800 --> 0:07:37.320 to be what we call AI engine agnostic. You know, 0:07:37.400 --> 0:07:41.000 put in any foundation model. That's not where the differentiation comes. 0:07:41.120 --> 0:07:44.720 The differentiation comes from not just them using the language 0:07:44.760 --> 0:07:47.320 from generative AI, but from them actually building their own 0:07:47.360 --> 0:07:50.120 AA models to layer on top of that. And you 0:07:50.120 --> 0:07:52.640 would better bet that Apple is building its own AI 0:07:52.720 --> 0:07:55.320 models as well to layer on top of this. So 0:07:55.400 --> 0:07:57.840 the combination of these two means of things that are 0:07:58.120 --> 0:08:03.160 say more pedestrian and generic in nature for AI, they 0:08:03.160 --> 0:08:06.240 can outsource to a foundation model company, but the things 0:08:06.240 --> 0:08:08.440 that would be more specific to Apple products, those are 0:08:08.440 --> 0:08:10.480 the things that they're going to invest their AI talent in. 0:08:10.920 --> 0:08:12.960 And maybe we've seen this time and time again that 0:08:13.400 --> 0:08:17.440 Apple isn't first, but it's best, and we're waiting for 0:08:17.520 --> 0:08:20.280 ultimately then to articulate what is going to be better then, 0:08:20.320 --> 0:08:25.720 for example, how already Samsung's infused Google AI within its hardware. 0:08:25.920 --> 0:08:27.680 Will it just beat out the competition. 0:08:29.080 --> 0:08:31.240 I think what we're looking at right now is how 0:08:31.320 --> 0:08:36.200 will Apple propose the use of multimodal models. So everyone 0:08:36.200 --> 0:08:38.160 says that Apple's behind, but that was on the basic 0:08:38.240 --> 0:08:41.520 generative AI chatbot style model. What we saw in Google 0:08:41.559 --> 0:08:44.240 Io was really a new way to think about how 0:08:44.240 --> 0:08:47.959 to use AI in terms of adding vision and imagery 0:08:48.240 --> 0:08:51.240 and generating a wide range of things, or using it 0:08:51.320 --> 0:08:54.280 to say change a process, look at an image and 0:08:54.320 --> 0:08:57.000 suggest how to make it better if it were even. 0:08:56.840 --> 0:08:58.240 A process or a workflow. 0:08:58.559 --> 0:09:00.880 So I think there's a tremendous app oportunity for Apple 0:09:00.920 --> 0:09:03.720 to show that across as stack, and this is what 0:09:03.800 --> 0:09:06.360 I think is better. It's not enough to just layer 0:09:06.400 --> 0:09:08.600 a chatbot on top of your software and say I've 0:09:08.600 --> 0:09:10.839 made it better. You actually want to create a fundamentally 0:09:10.880 --> 0:09:13.439 new experience, and this is I think where Apple excels 0:09:13.480 --> 0:09:17.120 as creating that easier experience. So they're not first to 0:09:17.160 --> 0:09:19.280 market with a lot of things, but they're the first 0:09:19.320 --> 0:09:21.679 to try to make it the best to market. 0:09:22.000 --> 0:09:25.880 We are seeing hope some exuberance factor back into the 0:09:25.880 --> 0:09:28.120 overall market capitalization of Apple. We're back at a three 0:09:28.200 --> 0:09:31.560 trillion dollar handle. We're looking at nearly eclipsing the record 0:09:31.600 --> 0:09:34.400 high that we saw back in twenty twenty three. Marama, 0:09:34.920 --> 0:09:37.920 do you think it will be revenue generating in the 0:09:38.000 --> 0:09:40.120 near term from an AI perspective for Apple? 0:09:41.080 --> 0:09:43.560 I absolutely think that AI will be revenue generating, because 0:09:43.559 --> 0:09:45.440 if you don't have a good AI stack in your product, 0:09:45.480 --> 0:09:47.240 you're actually not going to be able to sell a 0:09:47.280 --> 0:09:49.040 product in twenty twenty four and beyond. 0:09:49.320 --> 0:09:51.000 So therefore it will be revenue generating. 0:09:51.040 --> 0:09:53.320 The question has always been how much and can it 0:09:53.440 --> 0:09:57.320 outsize the competition, So this is still to be determined, 0:09:57.440 --> 0:10:00.040 but we're all very optimistic that Apple spent a a 0:10:00.040 --> 0:10:01.160 lot of time thinking about this. 0:10:01.280 --> 0:10:03.200 They didn't race into the market, so. 0:10:03.120 --> 0:10:06.720 They could come with a very solid showing at WWDC 0:10:07.200 --> 0:10:09.360 in what I would consider the things that matter. I 0:10:09.400 --> 0:10:12.680 do think that from a technical standpoint, we always expect 0:10:12.679 --> 0:10:14.520 Apple to blow the doors off of it, but I 0:10:14.640 --> 0:10:17.040 really think we have to look at would somebody really 0:10:17.080 --> 0:10:19.480 be pleased with this as opposed to is it going 0:10:19.520 --> 0:10:20.960 to revolutionize the world. 0:10:21.040 --> 0:10:23.000 And I think if they can nail that, they can 0:10:23.080 --> 0:10:25.559 nail people really wanting to use AI because. 0:10:25.280 --> 0:10:28.120 It does something meaningful for them, then they will sell 0:10:28.200 --> 0:10:32.360 a ton of iPhones, smart watches, they may even sell 0:10:32.520 --> 0:10:35.880 a fair amount of vision pros, particularly in the enterprise market. 0:10:36.000 --> 0:10:38.520 So we're really optimistic and excited to see what they 0:10:38.640 --> 0:10:39.400 show us next. 0:10:39.640 --> 0:10:42.120 A little lesson two hours ago Marvell Dave has thank 0:10:42.160 --> 0:10:44.559 you so much for putting us towards that excitement. Found 0:10:44.559 --> 0:10:47.679 a principle, analyst ever at Lopez Research. Meanwhile, coming up 0:10:48.440 --> 0:10:51.319 some shareholders over at Tesla Key Highes this week too 0:10:51.360 --> 0:10:53.640 the vote on the fifty six billion dollar pay package 0:10:53.920 --> 0:10:56.240 for CEO Ino Mask. We'll get the latest on what 0:10:56.280 --> 0:10:59.480 we can expect from the vote next. Well, let's just 0:10:59.559 --> 0:11:02.160 shine up on the mean stock. There was all the 0:11:02.240 --> 0:11:05.000 rator on Friday as Roaring Kitty came back to YouTube. 0:11:05.040 --> 0:11:07.880 GameStop now under pressure still by more than three point 0:11:07.880 --> 0:11:10.280 eight percent. That's as we know that they're selling more shares, 0:11:10.280 --> 0:11:11.880 trying to make the most some of the hype within 0:11:11.920 --> 0:11:14.080 the share price twenty seven dollars is where we trade 0:11:14.440 --> 0:11:18.400 Beard analyst Colin Sebastian saying, look the results we got 0:11:18.440 --> 0:11:22.199 on Friday. The disappointing results underscore ongoing challenges to the 0:11:22.240 --> 0:11:25.160 company's retail business model. This is bruly med technology. 0:11:35.040 --> 0:11:35.160 Now. 0:11:35.200 --> 0:11:37.800 The Supreme Court has agreed to Meta's request to consider 0:11:37.920 --> 0:11:41.439 killing a multi billion dollar shareholder lawsuit that accuses the 0:11:41.480 --> 0:11:44.360 social media john of misleading investors about the data harvesting 0:11:44.440 --> 0:11:48.839 scandal evolving political consulting firm Cambridge Analytica. Remember that one 0:11:49.120 --> 0:11:51.560 joining us now to really go into why this is meaningful, 0:11:51.720 --> 0:11:54.280 rugs Mike Shephard over in Washington, and actually is not 0:11:54.320 --> 0:11:56.600 just Meta that perhaps once it's killed off, but certainly 0:11:56.800 --> 0:11:58.720 the Chamber of Commerce wants to have this heard by 0:11:58.720 --> 0:12:01.359 the Supreme Court because they're worried that there's a misreading 0:12:01.400 --> 0:12:03.240 of what's happening with the sec And there's a lot 0:12:03.240 --> 0:12:06.520 of well lawsuits, a wave of meritless securities fraud suits 0:12:06.559 --> 0:12:10.040 they call. 0:12:08.520 --> 0:12:09.040 Well, Carolyn. 0:12:09.120 --> 0:12:12.280 When you look at the stakes for Meta, it is financial. 0:12:12.400 --> 0:12:15.240 It's a two billion dollars potential settlement. 0:12:15.440 --> 0:12:17.480 When you talk to our Bloomberg. 0:12:17.040 --> 0:12:22.360 Intelligence analysts, our colleague Schttenhelm has analyzed this and found 0:12:22.440 --> 0:12:24.600 that it could be that kind of a payout for 0:12:24.679 --> 0:12:27.840 the company to those aggrieved shareholders. But the stakes are 0:12:27.880 --> 0:12:31.319 far wider as alluded to, because look, since two thousand 0:12:31.360 --> 0:12:35.040 and five, the Securities and Exchange Commission has required companies 0:12:35.320 --> 0:12:39.280 to disclose the risks that could have a material impact 0:12:39.640 --> 0:12:41.680 on a share price. It could be information, it could 0:12:41.679 --> 0:12:44.280 be an event, and the shareholders in this case were 0:12:44.280 --> 0:12:48.760 alleging that Facebook was too slow in disclosing those risks 0:12:48.760 --> 0:12:52.840 from the Cambridge Analytica episode. Now the Chamber of Commerce 0:12:52.840 --> 0:12:55.280 and others that are saying that those same rules have 0:12:55.400 --> 0:12:59.360 been too widely applied and are generating a whole bunch 0:12:59.360 --> 0:13:03.160 of rivolous and their view lawsuits that have no merit, 0:13:03.240 --> 0:13:05.920 and they have sided with Meta in this case. 0:13:06.800 --> 0:13:09.080 It is interesting just to go back to July twenty eighteen. 0:13:09.160 --> 0:13:12.880 That was when we saw the biggest eroad and of 0:13:13.000 --> 0:13:16.120 value with that stock plunge, as we started to perhaps 0:13:16.200 --> 0:13:19.520 front run what ultimately the damage from Cambridge Analytica and 0:13:19.559 --> 0:13:22.960 the reporting on it could mean for Meta A. Meta's 0:13:23.040 --> 0:13:26.360 argument here is that we could never have anticipated how 0:13:26.400 --> 0:13:28.880 babb this would get for a shareholder perspective. 0:13:29.800 --> 0:13:34.239 And also they're seeing, Caroline that all of the information 0:13:34.360 --> 0:13:37.360 and risks were out there already. They had been reported 0:13:37.400 --> 0:13:40.880 publicly by The Guardian and then by the New York Times, 0:13:41.080 --> 0:13:45.400 so that the element of surprise for shareholders was really 0:13:45.480 --> 0:13:48.479 gone at least as far as this episode was concerned. 0:13:48.880 --> 0:13:53.160 And the concern from the company is that they are 0:13:53.200 --> 0:13:56.439 being punished for something that is so far back and 0:13:56.480 --> 0:14:00.240 that maybe since then has been wiped out if you 0:14:00.240 --> 0:14:02.760 look at how the company's shares have gained since then 0:14:02.840 --> 0:14:05.480 thanks to acquisition and expansion other changes. 0:14:06.000 --> 0:14:09.239 Meanwhile, of course, as shareholders say the company had inadequate disclosures, 0:14:09.400 --> 0:14:12.120 we'll see how this goes. Mike Shepard, brilliant, Thank you 0:14:12.200 --> 0:14:15.160 so much. Indeed, meanwhile, let's just talk about some other shareholders. Now, 0:14:15.200 --> 0:14:17.440 Tesla's because they're voting this week on a fifty six 0:14:17.520 --> 0:14:21.160 billion dollar pay package to CEO Elo Musk. Let's get 0:14:21.160 --> 0:14:23.040 into the details. But me megs Max traffickin his hair. 0:14:23.040 --> 0:14:26.480 And what's interesting is, well, this, even if it goes through, 0:14:26.520 --> 0:14:28.520 it might not help Elon Musk get his fifty six 0:14:28.600 --> 0:14:29.640 billion dollar pay package. 0:14:29.720 --> 0:14:29.880 Yeah. 0:14:29.880 --> 0:14:32.800 Absolutely, this is going to be settled in Delaware court, 0:14:32.880 --> 0:14:35.520 and I suppose possibly in Texas court or maybe in 0:14:35.560 --> 0:14:38.120 a federal court at some point, depending on how Elon 0:14:38.240 --> 0:14:42.000 Musk responds. But what Tesla is trying to do is create, 0:14:42.040 --> 0:14:45.120 as our colleagues Dana Hall and Jeff feely Road, is 0:14:45.160 --> 0:14:48.200 to create a kind of way to explain this to 0:14:48.240 --> 0:14:50.400 the court. They're going to say, look, our shareholders approved 0:14:50.440 --> 0:14:53.480 it in twenty eighteen. Now they're approving it again, hopefully 0:14:53.680 --> 0:14:55.480 as far as Elon Musk is concerned. 0:14:55.680 --> 0:14:57.280 In twenty twenty four, So it's. 0:14:57.160 --> 0:15:00.240 More about forming the appeal rather than some kind of 0:15:00.800 --> 0:15:02.640 definitive resolution to this case. 0:15:02.760 --> 0:15:06.160 It's like narrative basically one hundred percent. But the narrative 0:15:06.240 --> 0:15:10.440 with some of the well proxy investigots and those advising 0:15:10.480 --> 0:15:13.080 shareholders hasn't been great. I've been saying, don't go with this. 0:15:13.280 --> 0:15:17.960 So these proxy advisors generally don't back these gigantic pay packages. 0:15:18.000 --> 0:15:20.400 They did not back the twenty eighteen one. But what 0:15:20.480 --> 0:15:23.800 is interesting here is that you have some major shareholders 0:15:24.000 --> 0:15:26.760 coming out and saying we are against this. Over the weekend, 0:15:26.800 --> 0:15:30.000 the Norwegian Sovereign Wealth Fund said that they're going to 0:15:30.040 --> 0:15:32.560 vote against this pay package, or that as as far 0:15:32.560 --> 0:15:34.560 as they're concerned right now, they're going to Maybe there'll 0:15:34.560 --> 0:15:38.040 be some further negotiation between now and Thursday, but in 0:15:38.080 --> 0:15:42.280 any case, that fund is a major shareholder, top ten shareholder. 0:15:42.400 --> 0:15:45.400 Norway's also a huge market for Tesla, so that seems 0:15:45.400 --> 0:15:49.040 like a significant kind of caution light for elon Musk 0:15:49.120 --> 0:15:49.440 right now. 0:15:49.840 --> 0:15:52.080 Thirteen can keep an eye MaTx Chafkin with all the 0:15:52.120 --> 0:16:02.000 details on Tesla. There's a new documentary out there from 0:16:02.080 --> 0:16:04.760 Max and it's highlighting the rise and then the fall 0:16:05.040 --> 0:16:08.080 of Movie Past, the subscription app that allowed users to 0:16:08.120 --> 0:16:10.720 go to as many movie showings as they want from 0:16:10.720 --> 0:16:14.600 a monthly fee with highlighting also how the founders they 0:16:14.640 --> 0:16:18.160 lost control of the company and it's narrative they're regaining it. 0:16:18.440 --> 0:16:20.840 How may what was one of those founders? And indeed 0:16:20.960 --> 0:16:23.320 you're now Upfront Ventures as a board partner. You've got 0:16:23.360 --> 0:16:25.560 share ventures as well, where you're trying to reclaim the 0:16:25.640 --> 0:16:32.000 narrative of allocating money and capital to minority founders in particularly. 0:16:32.000 --> 0:16:35.560 How many out there might go, sorry, you're the founder, 0:16:35.640 --> 0:16:38.080 you're a co founder. I thought it was Ted Farnsworth. 0:16:38.120 --> 0:16:40.160 I thought it was Mitch low educate us. 0:16:40.560 --> 0:16:42.960 Yeah, yeah, well it was a process. 0:16:43.080 --> 0:16:44.880 My co founder and I, who were in love with 0:16:44.920 --> 0:16:47.840 the movie going process, wanted to innovate on the model 0:16:48.040 --> 0:16:52.200 and started a company twenty eleven. We raised a couple 0:16:52.160 --> 0:16:53.960 of rounds of capital, but got to a place like 0:16:54.000 --> 0:16:56.880 many other entrepreneurs, where we struggled, and so we had 0:16:56.920 --> 0:16:59.480 to raise some capital from some folks that we probably 0:16:59.520 --> 0:17:01.000 didn't know as well as we should have known. 0:17:02.240 --> 0:17:05.359 And ultimately they were able to invest quite a bit of. 0:17:05.359 --> 0:17:08.280 Money into the company and take over the company, and 0:17:08.359 --> 0:17:10.040 it was just quite an experience. 0:17:10.040 --> 0:17:11.960 You have to watch the movie get all the details. 0:17:12.400 --> 0:17:15.160 And actually the documentary does a good bait and switch 0:17:15.200 --> 0:17:17.320 in a way of allowing you to go with what 0:17:17.359 --> 0:17:20.720 your own biases that there's these two white co founders, 0:17:20.720 --> 0:17:23.040 and in fact, there were two black co founders who 0:17:23.080 --> 0:17:25.720 were ousted. And I'm interested now as to what you 0:17:25.760 --> 0:17:28.479 think the learning of the overall documentary is. Because you 0:17:28.520 --> 0:17:32.119 say you struggle to make and get funding like many, 0:17:32.400 --> 0:17:34.400 but do you think you were less likely to get 0:17:34.440 --> 0:17:36.560 funding because the fact that you were black? 0:17:37.800 --> 0:17:40.080 A little bit? But I was very mindful in this documentary. 0:17:40.080 --> 0:17:42.160 I didn't want it to be a black versus white thing. 0:17:42.520 --> 0:17:45.879 You know, all entrepreneurs struggle at some level raising capital, 0:17:45.880 --> 0:17:48.240 and we were very fortunate in our early investors were 0:17:48.280 --> 0:17:53.880 all white, so it really wasn't exactly that, but it's natural. 0:17:54.359 --> 0:17:56.600 One of the things we talk about is just the 0:17:56.680 --> 0:17:58.960 idea that sometimes we walk into the room raising capital. 0:17:59.000 --> 0:18:01.399 We're probably the first time that at that time, at 0:18:01.480 --> 0:18:04.440 least the two black co founders were walking in trying 0:18:04.440 --> 0:18:05.160 to innovate on. 0:18:05.119 --> 0:18:07.240 In an industry and trying to reimagine the industry. So 0:18:07.280 --> 0:18:08.360 that's hard by itself. 0:18:08.800 --> 0:18:11.480 It's also hard when you have the extra unfamiliarity of 0:18:11.600 --> 0:18:15.119 not having invested, perhaps in folks that looked like us. 0:18:15.400 --> 0:18:17.720 What's interesting, your other co founder, Stacy Spikes, has gone 0:18:17.760 --> 0:18:22.320 back and bought the business afterwards raised its value, and 0:18:22.359 --> 0:18:25.640 he's brought it back and he's still innovating. But almost 0:18:25.680 --> 0:18:29.119 your premise was right. You just needed the movie theaters 0:18:29.240 --> 0:18:31.919 not to build their own subscriptions, which they went and did, 0:18:32.440 --> 0:18:35.040 But really the issue was about the price point here. 0:18:35.119 --> 0:18:37.240 What do you think about the price points of moviegoing, 0:18:37.320 --> 0:18:39.320 of content consuming, of the way in which we see 0:18:39.320 --> 0:18:40.320 the landscape evolving. 0:18:41.400 --> 0:18:43.840 Yeah, it felt like such an inevitable change to happen 0:18:43.880 --> 0:18:45.720 in the movie going space. It's kind of why I 0:18:45.800 --> 0:18:47.560 went out. I came to LA to begin with twenty 0:18:47.640 --> 0:18:49.960 years ago because I felt like some of this industry 0:18:50.040 --> 0:18:52.840 was slower to innovate. So we did feel like it 0:18:52.880 --> 0:18:55.960 was inevitable. We felt like, really the opportunity to be 0:18:56.000 --> 0:18:59.640 a Switzerland in the space was the sweet spot. Of course, 0:18:59.640 --> 0:19:02.120 they're opportunities for silos and for folks to be able 0:19:02.160 --> 0:19:04.560 to do it on their own, but we thought that 0:19:04.640 --> 0:19:07.160 the idea that there could be a community that tied 0:19:07.200 --> 0:19:09.399 it all together could be special, and then we were 0:19:09.440 --> 0:19:11.440 also going to innovate. We did innovate quite a bit 0:19:11.480 --> 0:19:13.600 more than a lot of the folks were individually. 0:19:14.359 --> 0:19:15.359 It's been a great lesson. 0:19:15.440 --> 0:19:17.399 I think it was a long time ago that we 0:19:17.440 --> 0:19:20.000 started that company, and where movies was probably. 0:19:19.920 --> 0:19:21.200 More centric to our world. 0:19:21.240 --> 0:19:23.480 I've now moved on to focus on health and longevity 0:19:23.480 --> 0:19:24.320 and things that I'm. 0:19:24.400 --> 0:19:25.560 Much more passionate about. 0:19:25.600 --> 0:19:28.320 But Stacey's making a go at it, and he's doing 0:19:28.320 --> 0:19:30.080 a great job. I think he's turned the company to 0:19:30.119 --> 0:19:32.679 be profitable, and he's figured out the pricing model that 0:19:32.720 --> 0:19:34.760 will work long term. 0:19:35.000 --> 0:19:37.720 How much do you think there's still an issue of 0:19:38.040 --> 0:19:41.800 founders versus the money they raise? Who has the power 0:19:41.880 --> 0:19:44.879 when ultimately some of these contracts are written. 0:19:47.680 --> 0:19:51.000 Yeah, I think you know it ebbs and flows. 0:19:51.040 --> 0:19:52.840 I mean, there are times where the founders and the 0:19:52.960 --> 0:19:56.120 entrepreneurs have significantly more leverage because there's way more capital 0:19:56.160 --> 0:20:00.479