WEBVTT - Amazon CEO Talks AI Plans, Nvidia Results Underwhelm

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<v Speaker 1>From the heart of where innovation, money and power collide

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<v Speaker 1>in Silicon Valley and beyond. This is Bloomberg Technology with

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<v Speaker 1>Caroline Hyde and Ed Ludlow.

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<v Speaker 2>Live from New York.

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<v Speaker 3>I'm Caroline Hyde and I'm Jackie Devalas in San Francisco.

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<v Speaker 2>This is Bloomberg Technology coming up in video. Shares slipping

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<v Speaker 2>despite an upbeat view on the Blackwell lineup, has US

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<v Speaker 2>investors see a mixed outlook after two years of blowout results.

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<v Speaker 2>Plus investors unsure of Salesforce's new AI product if it

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<v Speaker 2>can spur faster sales growth or break down the company's earnings.

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<v Speaker 2>And we sit down with the CEO of Amazon after

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<v Speaker 2>the company unveiled the long awaited AI version of its

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<v Speaker 2>Elexor assistant and just announced its new quantum computing chip.

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<v Speaker 2>At first quick check on these markets, as we can currently,

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<v Speaker 2>we are under pressure once again. This is a macro

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<v Speaker 2>picture that weighs heavily on the market. Perhaps some inflatory

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<v Speaker 2>pressures worries about Taris and Nvidiant numbers did not do

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<v Speaker 2>enough to ease those concerns. Were down some three point

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<v Speaker 2>seven percent. Looks still a three trillion dollar company, But

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<v Speaker 2>here in lies the issue. Of whether or not Blackwell

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<v Speaker 2>is ramping as fast enough to offset some of the

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<v Speaker 2>concerns around China and tariffs and limitations on exports. Jonson

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<v Speaker 2>Wang does a lot to talk about the new cycle

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<v Speaker 2>of scaling laws that come, of course from reasoning models.

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<v Speaker 2>We move on to some other individual names that we're

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<v Speaker 2>going to be diving into across the board. Salesforce under

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<v Speaker 2>pressure off by two percent. Will discuss the earnings a

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<v Speaker 2>little bit later. Agent Force not bringing in the revenue

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<v Speaker 2>as quickly has had been anticipated, And let's just finish

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<v Speaker 2>on the all important Amazon currently trading as we see

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<v Speaker 2>macro pressure on tech more broadly, we're currently flat a

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<v Speaker 2>new quantum chip and most notably, of course, the generative

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<v Speaker 2>AI infusion into Alexa Plus, which we can delve into

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<v Speaker 2>in the CEO in a moment, because we now want

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<v Speaker 2>to welcome to our TV and radio audiences worldwide. Amazon's

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<v Speaker 2>president and CEO, Andy Jesse. Great to have you on

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<v Speaker 2>New York.

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<v Speaker 4>Thanks for having me. It's great to be here.

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<v Speaker 2>Back home where you grew up and you were unveiling

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<v Speaker 2>generative AI infused Alexa Plus. How is this going to

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<v Speaker 2>really well excite your customer base? What are you most

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<v Speaker 2>excited for it.

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<v Speaker 5>Well, you know, we've had Alex has been around for

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<v Speaker 5>ten years. We have six hundred million devices in customers'

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<v Speaker 5>homes and offices. And Alexa Plus is our next generation

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<v Speaker 5>Alexa Personal Assistant, and she's meaningfully smarter and more capable

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<v Speaker 5>and useful than her prior self. You can do all

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<v Speaker 5>the things that you used to do, but every single

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<v Speaker 5>one of those functions is better.

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<v Speaker 4>And I can give you just an example. There are

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<v Speaker 4>so many examples.

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<v Speaker 5>But you know, if you have smart home controls with

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<v Speaker 5>Alexa now, you can say, Alexa, I have guests coming

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<v Speaker 5>over at seven pm?

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<v Speaker 4>Could you raise the drapes, could you raise.

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<v Speaker 5>The temperature by five degrees, turn on the porch lights

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<v Speaker 5>and the driveway lights, and put on Melo dinner music in.

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<v Speaker 4>The dining room.

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<v Speaker 2>And music you're not a guy. May I choose shop.

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<v Speaker 5>Fighters, but most people will choose Melo dining music. But

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<v Speaker 5>you can do that all verbally and simply using conversational

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<v Speaker 5>language like that.

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<v Speaker 4>You don't need a nap. It just happens.

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<v Speaker 5>And so Alexi Plus, with what we've just announced and

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<v Speaker 5>what we're launching, it really is. There have been a

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<v Speaker 5>lot of chatbots around that are good at answering questions,

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<v Speaker 5>but they don't take actions. Alexi plus is really Alexa

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<v Speaker 5>is going to be the first one that not only

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<v Speaker 5>is highly intelligent to answer various questions, but she can

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<v Speaker 5>do so many things for you. She can play music

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<v Speaker 5>and play video, and control your smart home and make

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<v Speaker 5>reservations for you and hire people to fix your oven.

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<v Speaker 4>I mean, it really is the first.

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<v Speaker 5>Big, large scale practical use of gender of AI. The

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<v Speaker 5>consumers are going to be able to see and use naturally.

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<v Speaker 2>I can see how you're going to obsess over it,

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<v Speaker 2>whether it's ordering the latest buffalo in New York and

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<v Speaker 2>seeing where the best space is to do that. But

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<v Speaker 2>how are your stakeholders of shareholder based going to obsess

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<v Speaker 2>about this about gender to AI in Alexa plus. How

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<v Speaker 2>is that adding value for them?

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<v Speaker 4>Well?

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<v Speaker 5>You know, I think if you think about what Alexa

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<v Speaker 5>allows customers to do, it makes shopping more easy because

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<v Speaker 5>it's so much more intuitive now to buy products. It

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<v Speaker 5>makes enjoying music easier, It makes enjoying video and streaming

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<v Speaker 5>media better. It allows you to control your smart home

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<v Speaker 5>in a different way. So every single one of our

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<v Speaker 5>consumer customer experiences gets better with Alexa Plus. And then

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<v Speaker 5>you know, of course Alexa has its own business model.

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<v Speaker 5>We have a brand new lineup of devices that are

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<v Speaker 5>coming in the fall. I think that are beautiful. I

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<v Speaker 5>think people are going to really like we have opportunities

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<v Speaker 5>to service new products and advertising in various interfaces like

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<v Speaker 5>our mobile and our desktop interface that's coming in Alexa.

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<v Speaker 5>And then we have subscriptions, and you know, so I

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<v Speaker 5>think there's a sustainable business model there as well.

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<v Speaker 2>Talk to me about the subscriptions because you're getting it free.

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<v Speaker 2>If you've got Prime, I get a lot with Prime.

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<v Speaker 2>Now are you able to increase the prices there?

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<v Speaker 4>Do you think of Prime?

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<v Speaker 5>Well, Prime is an incredible value if you think about

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<v Speaker 5>getting free shipping on three hundred million plus items. You know,

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<v Speaker 5>when we launch Prime, it is free shipping on about

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<v Speaker 5>a million items, to say, it's three hundred million items,

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<v Speaker 5>and most of the time you're getting your products now

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<v Speaker 5>inside of a day. And so you know, between that

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<v Speaker 5>and what you get with Prime Video and Prime Music

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<v Speaker 5>and the grocery subscription, and you know our unique selling

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<v Speaker 5>events Primes and incredible values you could increase to add

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<v Speaker 5>on top of it Alexa Plus.

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<v Speaker 4>You know, it's just great value. So what do they

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<v Speaker 4>plan right now?

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<v Speaker 5>But it's I do think prime is unusual value and

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<v Speaker 5>it's why people use it so expansively.

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<v Speaker 2>And to increase that use has been this invention, this

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<v Speaker 2>innovation of generative AI, and that costs money. And you've

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<v Speaker 2>actually just took to the stage yesterday to say, out

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<v Speaker 2>of all companies, you are spending the most on AI.

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<v Speaker 2>How much are you spending on AI?

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<v Speaker 5>Well, you know, I think we don't disclose the exact amount,

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<v Speaker 5>but you know we you know, we're spending a pretty

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<v Speaker 5>significant amount of cappax, and the allion's share of it

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<v Speaker 5>is on generative AI. We've said in our AWS business,

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<v Speaker 5>even though general AI for US is a many billion

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<v Speaker 5>dollar a year business and growing triple digit percentages year

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<v Speaker 5>over year, that if we hadn't even more capacity, we

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<v Speaker 5>could use.

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<v Speaker 4>It to monetize it.

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<v Speaker 5>And we have this really interesting and very fortunate flywheel

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<v Speaker 5>and AI inside of Amazon, which is if your mission

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<v Speaker 5>is to make customers' lives easier and better every day,

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<v Speaker 5>which it is for.

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<v Speaker 4>Us, and if you believe that.

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<v Speaker 5>All the customer experiences we know of today are going

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<v Speaker 5>to be reinvented through generative AI, which we also believe

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<v Speaker 5>you believe those two things, you're going to be building

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<v Speaker 5>a lot of genera AVEAI apps. If you build a

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<v Speaker 5>lot of general of AI app By the way, other

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<v Speaker 5>companies are too on top of AWS, which is the

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<v Speaker 5>leading technology infrastructure platform.

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<v Speaker 4>So if there are a lot of AI apps being.

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<v Speaker 5>Built on top of you, you can't help but get

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<v Speaker 5>a lot of feedback from people on how they want

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<v Speaker 5>those building blocks that create gender AI to be better.

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<v Speaker 5>And if you're willing to invest in those building blocks,

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<v Speaker 5>which we are, as you know, with our own chips

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<v Speaker 5>with Trainium and with our own frontier.

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<v Speaker 4>Model with Amazon Nova and Model.

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<v Speaker 5>Building Services and Sage Maker AI and better Rock, if

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<v Speaker 5>you're willing to invest in those building blocks and you're

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<v Speaker 5>getting a lot of feedback, they get better much more quickly,

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<v Speaker 5>which can't help them make it easier and quicker for

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<v Speaker 5>people to build gender AI applications, which means you get

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<v Speaker 5>more running on the platform. So that flywheel is very

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<v Speaker 5>unique for Amazon.

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<v Speaker 2>The line share though you did say basically one hundred

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<v Speaker 2>billion dollar run rate for CAPEX expenditure, can you give

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<v Speaker 2>us even like a percentage ratedown of how much that

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<v Speaker 2>goes to distribution logistics and how much goes to AI?

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<v Speaker 5>Well, line shares, you know, you tell you boast of it,

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<v Speaker 5>you know most of it. You know the lions share

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<v Speaker 5>is more than fifty percent?

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<v Speaker 2>Yes, is it more than eighty percent?

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<v Speaker 4>We're playing the warmer and colder game.

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<v Speaker 2>Yes, exactly. I love a game. But taught us about

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<v Speaker 2>that capacity that you talked about. Yeah, AWS could grow

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<v Speaker 2>even faster if you had all the chips that you needed,

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<v Speaker 2>all the power you needed, the motherboards you needed. How

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<v Speaker 2>much faster could AWS go?

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<v Speaker 4>I could.

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<v Speaker 5>It's hard to put an exact percentage, but I do

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<v Speaker 5>think it could be growing faster. I'm confident could be

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<v Speaker 5>growing faster. And you know there is you know, for

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<v Speaker 5>a long time, there still aren't as many chips as

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<v Speaker 5>we all want.

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<v Speaker 4>We have.

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<v Speaker 5>We're fortunate in that we're very big partners with Nvideo,

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<v Speaker 5>But then we also have our own custom AI silicon

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<v Speaker 5>in Tradium.

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<v Speaker 4>Too, which we just released to Reinvent.

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<v Speaker 5>Which is thirty to forty percent more price performance than

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<v Speaker 5>the GPU powered instances, which is a big deal at

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<v Speaker 5>scale if you're doing gender of AI on the inference side.

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<v Speaker 5>So we have maybe more chips than some others might

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<v Speaker 5>have access to, but we still don't have enough, and

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<v Speaker 5>then there just is not enough power in the world

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<v Speaker 5>right now, and we're all working really hard on that.

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<v Speaker 5>I expect that to relieve some the second half of

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<v Speaker 5>this year, but right now, you know, the world can change,

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<v Speaker 5>but right now we have just insatiable demand.

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<v Speaker 2>We had amazing demand coming from Jensen Wong who had

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<v Speaker 2>his numbers out yesterday and Nvidio. Was there a limitation

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<v Speaker 2>on the in video chips in particular that pull back

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<v Speaker 2>capacity And at what point do you think can depend

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<v Speaker 2>even more on your own in house built chips offset

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<v Speaker 2>any of that.

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<v Speaker 5>Well, you know, I would say, I mean there's a

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<v Speaker 5>lot of demand for gener Ai right now.

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<v Speaker 4>People are very excited about it.

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<v Speaker 5>I think that all the different providers of chips have

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<v Speaker 5>been constrained to some extent.

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<v Speaker 4>I think some of.

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<v Speaker 5>The some of the new generations maybe have gone through

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<v Speaker 5>different evolutions and when they're going to be released maybe

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<v Speaker 5>a little later than people thought. There are some components

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<v Speaker 5>like motherboards and things like that that we all use,

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<v Speaker 5>that particular ones that are in shorter supply than others.

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<v Speaker 5>So you know, I do think there's some there are

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<v Speaker 5>some supply chain issues which I expect to get better.

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<v Speaker 5>I do you know, people are very excited about training

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<v Speaker 5>them too. To your question and whether we could see

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<v Speaker 5>more demand there, and we have gone back at least

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<v Speaker 5>a couple occasions to make more trainium too than we'd

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<v Speaker 5>intended because we have so much demand. So I expect

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<v Speaker 5>the will of customers for as long as I can

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<v Speaker 5>foresee wanting to run compute on instances that have in

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<v Speaker 5>vidio chips. But I think a lot of the demand

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<v Speaker 5>will also be served by.

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<v Speaker 2>Training the customers that you couldn't serve because of the

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<v Speaker 2>limited capacity. Is it that you just had to put

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<v Speaker 2>it back from everyone a little bit more generally or

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<v Speaker 2>who lost out here?

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<v Speaker 4>Do you think it's it's always a combination.

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<v Speaker 5>I mean, there's for people that just have a very

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<v Speaker 5>small amount of accelerators that they need, they don't usually

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<v Speaker 5>have a problem.

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<v Speaker 4>We have something called capacity blocks with.

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<v Speaker 5>It's kind of like an on demand way to use

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<v Speaker 5>accelerators and and generate e chips, and that continues to go.

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<v Speaker 4>It's really the folks who.

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<v Speaker 5>Have built, you know, have an idea for a new application,

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<v Speaker 5>but they need a lot of of chips, where if

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<v Speaker 5>we don't have the capacity, we have to you know,

0:11:04.679 --> 0:11:06.120
<v Speaker 5>we have to give them what we can give them

0:11:06.120 --> 0:11:07.640
<v Speaker 5>and give it to them as fast as we can

0:11:07.760 --> 0:11:10.240
<v Speaker 5>and push our partners to get it in sooner. And

0:11:10.480 --> 0:11:12.760
<v Speaker 5>they can't get their initiatives done as quickly as they

0:11:12.800 --> 0:11:14.360
<v Speaker 5>want to if the capacity isn't there.

0:11:14.679 --> 0:11:16.679
<v Speaker 2>Anthropics had all the capacity it needs. You've got on

0:11:16.679 --> 0:11:17.520
<v Speaker 2>a close relationship.

0:11:17.559 --> 0:11:20.760
<v Speaker 5>Yeah, we have a very close partnership with Anthropic. We

0:11:20.800 --> 0:11:23.320
<v Speaker 5>have this project called Project right near with them. They're

0:11:23.320 --> 0:11:26.640
<v Speaker 5>building their next model, their next version of their frontier

0:11:26.679 --> 0:11:29.880
<v Speaker 5>model on top of trainingum to and our custom AI silicon.

0:11:30.240 --> 0:11:32.839
<v Speaker 5>They're going to use over four hundred thousand trainum two

0:11:32.920 --> 0:11:39.040
<v Speaker 5>chips and so yes, they have capacity. They're they're ramping

0:11:39.120 --> 0:11:41.400
<v Speaker 5>up and we're excited about that partnership and what they're building.

0:11:41.720 --> 0:11:44.840
<v Speaker 2>You mentioned the power side. How much is that something

0:11:44.880 --> 0:11:46.839
<v Speaker 2>you're talking to the administration about? How much is the

0:11:46.840 --> 0:11:49.559
<v Speaker 2>administration supportive of the buildout that you need to do.

0:11:50.400 --> 0:11:54.440
<v Speaker 5>We have been talking to administration, you know, multiple administrations

0:11:54.480 --> 0:11:56.600
<v Speaker 5>in this country over the years, as well as in

0:11:56.640 --> 0:11:59.440
<v Speaker 5>other countries as well. And I think the power shore

0:11:59.520 --> 0:12:02.560
<v Speaker 5>is really knuck up on people, you know, really right

0:12:02.600 --> 0:12:06.080
<v Speaker 5>after the pandemic. And I would say that the current

0:12:06.080 --> 0:12:09.520
<v Speaker 5>administration is very receptive to it. They understand the constraints

0:12:09.559 --> 0:12:12.079
<v Speaker 5>it's having on the economy right now and are convicted

0:12:12.120 --> 0:12:12.800
<v Speaker 5>about solving it.

0:12:13.480 --> 0:12:18.000
<v Speaker 2>What about the restrictions around chips? And what's interesting is

0:12:18.040 --> 0:12:21.400
<v Speaker 2>Microsoft just called on the administration today to say, this

0:12:21.559 --> 0:12:26.439
<v Speaker 2>limitation on chip access for some of our close allies

0:12:26.720 --> 0:12:29.080
<v Speaker 2>around the world is going to limit our global business.

0:12:29.120 --> 0:12:31.480
<v Speaker 2>You are a global business. Is that something you're worried about?

0:12:31.920 --> 0:12:32.840
<v Speaker 4>Hey, we are? You know?

0:12:33.040 --> 0:12:37.760
<v Speaker 5>I think I think that you're really talking about that

0:12:37.840 --> 0:12:41.679
<v Speaker 5>AI Diffusion Act. I think, and I'm going to be

0:12:41.720 --> 0:12:43.959
<v Speaker 5>curious to see where that goes. I mean, it was

0:12:44.880 --> 0:12:48.400
<v Speaker 5>enacted pretty quickly at the very end of the last administration.

0:12:49.080 --> 0:12:51.679
<v Speaker 5>I don't know how this administration feels about it, but

0:12:51.840 --> 0:12:54.680
<v Speaker 5>I would say that we share the concern that it

0:12:54.720 --> 0:12:58.520
<v Speaker 5>has limitations on certain countries who are natural allies of

0:12:58.559 --> 0:13:01.800
<v Speaker 5>the US who just to be able to do their business,

0:13:02.040 --> 0:13:04.040
<v Speaker 5>and those companies to be able to get done what

0:13:04.040 --> 0:13:05.920
<v Speaker 5>they want to get done on top of these technology

0:13:05.920 --> 0:13:09.480
<v Speaker 5>infrastructure platforms like AWS, they're going to need more chips,

0:13:09.559 --> 0:13:12.040
<v Speaker 5>and so I think if we don't do it, we're

0:13:12.040 --> 0:13:16.200
<v Speaker 5>going to basically give up that business and those relationships.

0:13:16.240 --> 0:13:19.720
<v Speaker 5>To other countries who can provide those chips, and I

0:13:19.720 --> 0:13:21.520
<v Speaker 5>think we're better off being partners with them.

0:13:21.600 --> 0:13:23.640
<v Speaker 2>Is it a risk to AWS, It's not.

0:13:23.679 --> 0:13:24.520
<v Speaker 4>So much risk.

0:13:24.760 --> 0:13:29.200
<v Speaker 5>I mean, I mean it had it, you know, in

0:13:29.280 --> 0:13:31.959
<v Speaker 5>the scheme of things. It's not a big swinger. But

0:13:32.360 --> 0:13:35.560
<v Speaker 5>I also think that there are so many countries who

0:13:35.600 --> 0:13:38.840
<v Speaker 5>are in the early stages of their economic development who

0:13:39.240 --> 0:13:43.160
<v Speaker 5>both really need access to the most cutting edge sophisticated

0:13:43.160 --> 0:13:46.439
<v Speaker 5>technology to build the right customer experiences. And that could

0:13:46.440 --> 0:13:50.520
<v Speaker 5>be big geographic markets for companies like ours and lots

0:13:50.559 --> 0:13:52.400
<v Speaker 5>of other technology companies where I think it would be

0:13:52.400 --> 0:13:54.600
<v Speaker 5>a shame to limit them and to limit the companies.

0:13:55.400 --> 0:13:58.000
<v Speaker 2>Did the AI diffusion rules that was born in very

0:13:58.000 --> 0:14:00.319
<v Speaker 2>swiftly by the Biden administration. All of this is in

0:14:00.320 --> 0:14:03.680
<v Speaker 2>the context of US versus China and not wanting to

0:14:03.679 --> 0:14:07.520
<v Speaker 2>get the most sophisticated equipment and chip and technology into China.

0:14:08.600 --> 0:14:12.320
<v Speaker 2>What rate for us for a moment the administration and

0:14:12.360 --> 0:14:15.440
<v Speaker 2>whether it's been positive or negative for your business when

0:14:15.480 --> 0:14:18.360
<v Speaker 2>it comes to China Dominimus, for example, the fact that

0:14:19.160 --> 0:14:21.600
<v Speaker 2>Chinese competitors, if we call them nat Sheian and the like,

0:14:21.640 --> 0:14:23.480
<v Speaker 2>it can have to pay more to get goods into

0:14:23.520 --> 0:14:25.240
<v Speaker 2>the country. Does that help or hinder you?

0:14:26.240 --> 0:14:31.320
<v Speaker 5>Well, you know, I would say, you know, on Deminimus specifically,

0:14:31.680 --> 0:14:34.760
<v Speaker 5>you know, we have a certain number of items that

0:14:34.800 --> 0:14:37.240
<v Speaker 5>are shipped in that way as well, for things like Hall,

0:14:38.040 --> 0:14:41.160
<v Speaker 5>which is our new low price offering. We maybe have

0:14:41.280 --> 0:14:43.240
<v Speaker 5>less of it than some other companies, like the ones

0:14:43.280 --> 0:14:47.480
<v Speaker 5>that you mentioned, but I think it's early in this administration.

0:14:47.560 --> 0:14:51.000
<v Speaker 5>But what I would say is that it is encouraging

0:14:51.080 --> 0:14:53.800
<v Speaker 5>to us that we have an administration that wants to

0:14:53.840 --> 0:14:56.520
<v Speaker 5>hear from business. I would say that, you know, we've

0:14:56.960 --> 0:15:00.120
<v Speaker 5>been a business through six administrations. Every single A lot

0:15:00.160 --> 0:15:02.960
<v Speaker 5>of them are primary for focuses to take care of customers.

0:15:02.960 --> 0:15:05.080
<v Speaker 5>But we try to build a productive relationship with the

0:15:05.080 --> 0:15:07.480
<v Speaker 5>administration because we want to help the country. And I

0:15:07.480 --> 0:15:10.240
<v Speaker 5>would say that some administrations are more receptive to it

0:15:10.280 --> 0:15:15.160
<v Speaker 5>than others. But this administration cares about what business thinks.

0:15:15.240 --> 0:15:21.000
<v Speaker 5>And I've always been surprised that it isn't obvious that

0:15:21.120 --> 0:15:24.160
<v Speaker 5>the best economic results for a country are going to

0:15:24.160 --> 0:15:26.920
<v Speaker 5>be when the public and the private sector collaborate. And

0:15:27.040 --> 0:15:30.960
<v Speaker 5>you know, I don't expect the government to kout out

0:15:30.960 --> 0:15:33.760
<v Speaker 5>to what companies want, but they should get their feedback

0:15:33.760 --> 0:15:36.720
<v Speaker 5>and their input because they're going to make policies better

0:15:36.760 --> 0:15:39.800
<v Speaker 5>together if they collaborate. And I'm encouraged early on that

0:15:39.880 --> 0:15:41.840
<v Speaker 5>this administration wants to talk to businesses.

0:15:41.960 --> 0:15:43.440
<v Speaker 2>Are you taking calls passingly?

0:15:43.800 --> 0:15:48.320
<v Speaker 5>You know, I take calls. We talked to you know,

0:15:48.400 --> 0:15:50.560
<v Speaker 5>the same thing with all the administrations. We talk to

0:15:50.600 --> 0:15:53.080
<v Speaker 5>people in the administration. We share what's working for us,

0:15:53.120 --> 0:15:56.120
<v Speaker 5>what's not working for us, concerns that we have. As

0:15:56.160 --> 0:15:59.040
<v Speaker 5>I said, some administrations care more about our feedback than.

0:15:58.960 --> 0:16:00.520
<v Speaker 2>Others about yours.

0:16:00.560 --> 0:16:02.760
<v Speaker 4>Have you spoken to I've spoken to the president.

0:16:03.280 --> 0:16:06.040
<v Speaker 5>Look, as I said, this administration has been pretty busy

0:16:06.160 --> 0:16:09.840
<v Speaker 5>the first month, and when I am encouraged that they

0:16:09.920 --> 0:16:13.880
<v Speaker 5>are having conversations with businesses and they do care about

0:16:14.800 --> 0:16:17.800
<v Speaker 5>our feedback. And we'll see what happens. But I you know,

0:16:17.880 --> 0:16:19.720
<v Speaker 5>it starts with a dialogue. You have to have a

0:16:19.760 --> 0:16:21.520
<v Speaker 5>dialogue to have any kind of relationship.

0:16:21.920 --> 0:16:25.000
<v Speaker 2>And they care about AI infrastructure. Just take stargate. Are

0:16:25.000 --> 0:16:27.800
<v Speaker 2>we going to hear more from you on how much

0:16:27.840 --> 0:16:29.800
<v Speaker 2>you're investing here in the United States on the AI

0:16:29.880 --> 0:16:31.160
<v Speaker 2>infrastructure build out as well?

0:16:31.400 --> 0:16:31.640
<v Speaker 4>Well?

0:16:31.760 --> 0:16:34.600
<v Speaker 5>You know, as we talked about earlier, we said it

0:16:34.640 --> 0:16:38.800
<v Speaker 5>was you know, directionally right in terms of the run

0:16:38.840 --> 0:16:42.120
<v Speaker 5>rate on our capex. But you know, we're spending a

0:16:42.200 --> 0:16:45.320
<v Speaker 5>lot on AI infrastructure, and the lion's share of it

0:16:45.360 --> 0:16:47.680
<v Speaker 5>is not just on AI, but also in this country

0:16:48.000 --> 0:16:50.240
<v Speaker 5>in the US. We spend elsewhere because we have a

0:16:50.240 --> 0:16:52.920
<v Speaker 5>global business. We have customers everywhere. We have customers and

0:16:53.000 --> 0:16:56.640
<v Speaker 5>you know, a couple hundred countries, but we have a

0:16:56.680 --> 0:17:01.680
<v Speaker 5>pretty substantial investment that I don't expect to to attenuate soon.

0:17:01.960 --> 0:17:06.240
<v Speaker 2>Only we could get a number. I'm interested in something

0:17:06.240 --> 0:17:08.800
<v Speaker 2>that perhaps is going to feel a more sensitive topic,

0:17:09.440 --> 0:17:12.800
<v Speaker 2>and it comes around perhaps some words that were missing

0:17:12.880 --> 0:17:16.000
<v Speaker 2>in your annual report this year, which were diversity and inclusion.

0:17:16.040 --> 0:17:18.120
<v Speaker 2>I put this in the context of the administration as

0:17:18.119 --> 0:17:21.080
<v Speaker 2>it stands, because I know that Amazon strives to be

0:17:21.119 --> 0:17:24.959
<v Speaker 2>the Earth's best employer, and I'm just wondering how your

0:17:24.960 --> 0:17:29.360
<v Speaker 2>employees react to perhaps the lack of certain words now involved,

0:17:29.760 --> 0:17:32.359
<v Speaker 2>and whether or not programs might be forced to change

0:17:32.480 --> 0:17:32.679
<v Speaker 2>or not.

0:17:33.080 --> 0:17:33.320
<v Speaker 4>Yeah.

0:17:33.760 --> 0:17:35.960
<v Speaker 5>Well, what I would tell you, just at a high level,

0:17:36.520 --> 0:17:39.240
<v Speaker 5>if you serve as many customers as we do, in

0:17:39.280 --> 0:17:43.760
<v Speaker 5>as many diverse groups as we do, and we intend

0:17:43.800 --> 0:17:46.879
<v Speaker 5>to moving forward, you have to have a diverse team

0:17:47.000 --> 0:17:50.520
<v Speaker 5>to be able to build products that work for everybody,

0:17:50.600 --> 0:17:52.680
<v Speaker 5>and that has always been our intention.

0:17:52.760 --> 0:17:54.240
<v Speaker 4>It continues to be our intention.

0:17:54.920 --> 0:18:00.159
<v Speaker 5>I think that you know, there were so many programs

0:18:00.160 --> 0:18:04.200
<v Speaker 5>that we launched and other companies launched in the pandemic,

0:18:04.680 --> 0:18:07.600
<v Speaker 5>and as you probably have seen over the last three years,

0:18:07.640 --> 0:18:11.080
<v Speaker 5>we've gone through very thoroughly every single one of our

0:18:11.119 --> 0:18:15.560
<v Speaker 5>business areas, and the programs that we had conviction about.

0:18:15.280 --> 0:18:17.760
<v Speaker 4>We doubled down on, and the programs that we don't have.

0:18:17.720 --> 0:18:20.560
<v Speaker 5>Conviction about, we streamline and we stopped doing. And so

0:18:20.640 --> 0:18:22.439
<v Speaker 5>we did the same thing and looking at all of

0:18:22.480 --> 0:18:26.439
<v Speaker 5>our programs on diversity, and you know, we have some

0:18:26.480 --> 0:18:28.720
<v Speaker 5>programs that we have doubled down on. A good example

0:18:28.840 --> 0:18:32.840
<v Speaker 5>is our Career Choice inside our Fulfillment Network our Fulfillment Center,

0:18:33.400 --> 0:18:36.000
<v Speaker 5>teammates are able to get an advanced education for free

0:18:36.040 --> 0:18:39.600
<v Speaker 5>on us to advance their career and their own development.

0:18:40.000 --> 0:18:42.840
<v Speaker 5>And that has been very, very successful and very meaningful,

0:18:42.880 --> 0:18:44.640
<v Speaker 5>and so we doubled down our program like that.

0:18:44.960 --> 0:18:46.440
<v Speaker 4>There are other programs.

0:18:45.920 --> 0:18:48.840
<v Speaker 5>That really just haven't been that successful and haven't moved

0:18:48.840 --> 0:18:50.880
<v Speaker 5>the needle much, and those we just moved away from.

0:18:50.880 --> 0:18:54.480
<v Speaker 5>But we have a diverse group we're trying to continue

0:18:54.480 --> 0:18:56.480
<v Speaker 5>to build out a diverse group and that won't change.

0:18:56.640 --> 0:19:00.159
<v Speaker 2>And you can't can still use that word ultimately not

0:19:00.200 --> 0:19:01.040
<v Speaker 2>having to reframe it.

0:19:01.720 --> 0:19:02.159
<v Speaker 4>That is.

0:19:02.240 --> 0:19:04.959
<v Speaker 5>I mean, look, you can call lots of people, call

0:19:05.119 --> 0:19:08.560
<v Speaker 5>lots of different things, but we have a giant customer

0:19:08.640 --> 0:19:11.560
<v Speaker 5>base of every imaginable group of people where we want

0:19:11.560 --> 0:19:13.360
<v Speaker 5>builders who can build for them.

0:19:13.640 --> 0:19:17.520
<v Speaker 2>Culture is key. Yeah, and you just talked about how

0:19:17.560 --> 0:19:20.520
<v Speaker 2>you're doing mores less. It's always a focus on frugality.

0:19:20.600 --> 0:19:23.160
<v Speaker 2>That's in your very principles. That's something you've been doing

0:19:23.160 --> 0:19:25.600
<v Speaker 2>at the employee base as well. You wrote out made

0:19:25.640 --> 0:19:28.120
<v Speaker 2>it very clear that they were going to be reducing layers.

0:19:28.480 --> 0:19:29.359
<v Speaker 2>How is that going?

0:19:30.119 --> 0:19:30.960
<v Speaker 4>Yeah, it's gone well.

0:19:31.000 --> 0:19:34.359
<v Speaker 5>You know, I look, if you have a company where

0:19:34.400 --> 0:19:37.400
<v Speaker 5>the culture is an important ingredient in your success, which

0:19:37.440 --> 0:19:42.120
<v Speaker 5>has absolutely been true for Amazon, it's not your birth

0:19:42.200 --> 0:19:44.439
<v Speaker 5>rate to keep having a strong culture, you know, especially

0:19:44.520 --> 0:19:46.080
<v Speaker 5>as you grow the number of people, the number of

0:19:46.119 --> 0:19:49.199
<v Speaker 5>businesses you're in, the geographies that you're in, and so

0:19:49.320 --> 0:19:51.080
<v Speaker 5>you have to work at it all the time. And

0:19:51.160 --> 0:19:53.879
<v Speaker 5>for us, you know, there were two areas when we

0:19:53.960 --> 0:19:55.760
<v Speaker 5>looked at it as a leadership team last year that

0:19:55.800 --> 0:20:00.399
<v Speaker 5>we wanted to strengthen. One was we have always fired

0:20:00.640 --> 0:20:05.600
<v Speaker 5>really strong owners, smart ambitious, strong owners who get to

0:20:05.680 --> 0:20:10.199
<v Speaker 5>own the allion's share of In this case, you know,

0:20:10.320 --> 0:20:14.560
<v Speaker 5>I would say, you know ninety plus percent of the decisions,

0:20:14.119 --> 0:20:15.640
<v Speaker 5>and they.

0:20:17.040 --> 0:20:18.280
<v Speaker 4>You know, as you add a.

0:20:18.200 --> 0:20:21.280
<v Speaker 5>Lot of people, you end up with a lot of

0:20:21.320 --> 0:20:24.440
<v Speaker 5>middle managers. And those middle managers, all well intended, want

0:20:24.480 --> 0:20:26.719
<v Speaker 5>to put their fingerprint on everything, So you end up

0:20:26.720 --> 0:20:29.119
<v Speaker 5>with these people being in the pre meeting for the

0:20:29.119 --> 0:20:31.119
<v Speaker 5>pre meeting, for the pre meeting for the decision meeting,

0:20:31.440 --> 0:20:34.120
<v Speaker 5>and not always making recommendations and owning things.

0:20:33.920 --> 0:20:35.920
<v Speaker 4>The way we want that type of ownership.

0:20:36.000 --> 0:20:39.720
<v Speaker 5>So we took a goal collectively to increase the ratio

0:20:39.840 --> 0:20:43.040
<v Speaker 5>of individual contributors to managers by over fifteen percent as

0:20:43.080 --> 0:20:45.320
<v Speaker 5>a company by the end of this quarter. We've made

0:20:45.400 --> 0:20:47.760
<v Speaker 5>very good progress in that we've beat that already and

0:20:47.800 --> 0:20:49.800
<v Speaker 5>it's going to allow us for the people that are

0:20:49.800 --> 0:20:52.160
<v Speaker 5>doing the work, they're going to have more ownership and they're.

0:20:51.960 --> 0:20:53.159
<v Speaker 4>Going to be able to move more quickly.

0:20:53.680 --> 0:20:55.800
<v Speaker 5>And then I think the other thing we saw was

0:20:55.840 --> 0:20:58.679
<v Speaker 5>that if you're a culture that invents a lot and

0:20:58.760 --> 0:21:02.199
<v Speaker 5>collaborates a lot like we do, if you don't have

0:21:02.359 --> 0:21:05.280
<v Speaker 5>people in the office together doing that invention, it's just

0:21:05.359 --> 0:21:08.359
<v Speaker 5>meaningfully worse. And you know, you don't invent the same way,

0:21:08.400 --> 0:21:10.520
<v Speaker 5>you don't collaborate the same way, you don't connect with

0:21:10.560 --> 0:21:11.439
<v Speaker 5>each other the same way, you.

0:21:11.400 --> 0:21:13.000
<v Speaker 4>Don't learn the culture the same way.

0:21:13.600 --> 0:21:17.119
<v Speaker 5>And so having people back in the office together more frequently,

0:21:17.160 --> 0:21:18.040
<v Speaker 5>we felt very strong.

0:21:18.080 --> 0:21:19.600
<v Speaker 4>We bet it's going to be better for customers in

0:21:19.600 --> 0:21:20.040
<v Speaker 4>the business.

0:21:20.400 --> 0:21:23.880
<v Speaker 2>Let's talk about that invention and that collaboration. We've got

0:21:23.880 --> 0:21:27.119
<v Speaker 2>a new quantum chip us alot love the name. What

0:21:27.200 --> 0:21:29.360
<v Speaker 2>does that mean for you to have this more efficient

0:21:29.440 --> 0:21:32.280
<v Speaker 2>chip at this exact moment. Will we start seeing it

0:21:32.280 --> 0:21:33.680
<v Speaker 2>be practically useful soon?

0:21:34.160 --> 0:21:38.439
<v Speaker 5>Welltum quantum computing is very high potential. It has the

0:21:38.600 --> 0:21:43.719
<v Speaker 5>chance to solve some very computationally intense problems, and I

0:21:43.760 --> 0:21:48.000
<v Speaker 5>still think it's realistically a few years away from having

0:21:48.000 --> 0:21:49.919
<v Speaker 5>a real shot at solving those problems. But you have

0:21:49.960 --> 0:21:53.480
<v Speaker 5>to solve a bunch of these challenges that relate to

0:21:53.520 --> 0:21:56.440
<v Speaker 5>quantum computing along the way, and one of them really

0:21:56.520 --> 0:21:59.280
<v Speaker 5>is around error correction on the cubits and that's what

0:21:59.359 --> 0:22:02.399
<v Speaker 5>Osilla does. It's a very unique inventive way to do

0:22:02.520 --> 0:22:05.560
<v Speaker 5>error correction with CUBIS that makes a meaningful difference, and

0:22:05.840 --> 0:22:08.600
<v Speaker 5>we're excited about that milestone. You can't get to something

0:22:08.600 --> 0:22:11.280
<v Speaker 5>that has real impact unless you get those milestones done

0:22:11.320 --> 0:22:13.040
<v Speaker 5>along the way, and you invent along the way.

0:22:13.040 --> 0:22:14.600
<v Speaker 4>And it's just another example of invention.

0:22:15.040 --> 0:22:19.000
<v Speaker 2>I feel the learning of how generative AI suddenly became

0:22:19.640 --> 0:22:23.760
<v Speaker 2>not just in the business parlay, but suddenly everyone was

0:22:23.800 --> 0:22:27.000
<v Speaker 2>discussing it. I think people are aware quantum could do

0:22:27.119 --> 0:22:29.560
<v Speaker 2>the same thing. So when you hear people debating between

0:22:29.600 --> 0:22:31.600
<v Speaker 2>two decades or five years, where do you sit on

0:22:31.640 --> 0:22:32.639
<v Speaker 2>the grounder scope of that?

0:22:33.960 --> 0:22:36.560
<v Speaker 4>Gosh, you know, I don't know for sure.

0:22:37.240 --> 0:22:40.200
<v Speaker 5>You know, I would say I'm hopeful that it's more

0:22:40.240 --> 0:22:42.720
<v Speaker 5>in the five ish year range than it is the

0:22:42.800 --> 0:22:45.399
<v Speaker 5>twenty year range. You know, all these things that are

0:22:45.440 --> 0:22:50.240
<v Speaker 5>successful are seven, ten, twenty year overnight successes. You know,

0:22:50.240 --> 0:22:52.280
<v Speaker 5>it wasn't like you know, if you look at gener

0:22:52.320 --> 0:22:55.400
<v Speaker 5>of AI, it's just kind of another evolution of AI.

0:22:55.520 --> 0:22:58.840
<v Speaker 5>But we've been working on AI for fifty some odd years.

0:22:58.880 --> 0:23:01.880
<v Speaker 5>I mean, like just boom, it happened, and it really

0:23:01.880 --> 0:23:04.720
<v Speaker 5>shocked us when it actually was more accessible and worked.

0:23:05.320 --> 0:23:06.880
<v Speaker 4>And I think the same thing.

0:23:06.720 --> 0:23:09.000
<v Speaker 5>Could happen with quantum computing, which is you know, takes

0:23:09.040 --> 0:23:11.080
<v Speaker 5>a long time, takes a long time, takes a long

0:23:11.119 --> 0:23:13.600
<v Speaker 5>and then all of a sudden, it's functional and solves

0:23:13.640 --> 0:23:17.320
<v Speaker 5>problems that you couldn't solve easily or cost effectively before.

0:23:17.359 --> 0:23:19.800
<v Speaker 5>And it just feels like it happened overnight. But quantum

0:23:19.840 --> 0:23:22.520
<v Speaker 5>computing we've been working on now for ten post years.

0:23:22.840 --> 0:23:25.840
<v Speaker 2>And then the euphoria comes, and then people try to

0:23:25.920 --> 0:23:29.160
<v Speaker 2>make head or tail of how long that eu floria lasts.

0:23:30.119 --> 0:23:32.440
<v Speaker 2>Going back to the investment that you make, and particularly

0:23:32.480 --> 0:23:34.520
<v Speaker 2>in generous AI, do you think it's going to be

0:23:34.560 --> 0:23:37.760
<v Speaker 2>peak year for generative AI in terms of that investment

0:23:37.760 --> 0:23:40.119
<v Speaker 2>that Amazon makes, I don't know.

0:23:40.160 --> 0:23:40.879
<v Speaker 4>You know, it's funny.

0:23:41.119 --> 0:23:45.240
<v Speaker 5>I have this feeling that you're going to end up

0:23:45.280 --> 0:23:48.919
<v Speaker 5>with some people that feel disillusioned about gender AI because

0:23:49.040 --> 0:23:50.000
<v Speaker 5>the investment or.

0:23:50.000 --> 0:23:52.720
<v Speaker 4>You getting the commensurate return. It's still very early.

0:23:52.760 --> 0:23:55.080
<v Speaker 5>You have so many companies that are really doing pilots

0:23:55.160 --> 0:23:58.440
<v Speaker 5>right now their gender of AI applications, and you already.

0:23:58.200 --> 0:23:59.199
<v Speaker 4>See a little bit of it.

0:24:00.280 --> 0:24:03.840
<v Speaker 5>But I think that the smart companies are going to

0:24:03.840 --> 0:24:07.159
<v Speaker 5>figure out which are the initiatives that can really change

0:24:07.200 --> 0:24:09.840
<v Speaker 5>their customer experience and their businesses and keep investing in

0:24:09.880 --> 0:24:15.080
<v Speaker 5>general AI and the slower companies are going to wait

0:24:15.119 --> 0:24:17.440
<v Speaker 5>to see if it's safe to go outside, and they'll

0:24:17.480 --> 0:24:20.440
<v Speaker 5>be behind by two or three years, maybe more because

0:24:20.480 --> 0:24:24.200
<v Speaker 5>the reality is even more soll than software development, general

0:24:24.200 --> 0:24:27.600
<v Speaker 5>of AI is very iterative. It's not on software development.

0:24:27.680 --> 0:24:29.399
<v Speaker 5>You can get on a whiteboard with a team of

0:24:29.520 --> 0:24:32.360
<v Speaker 5>architects and design something and maybe it doesn't work exactly

0:24:32.400 --> 0:24:35.119
<v Speaker 5>as you design it, but largely you know, whereas in

0:24:35.200 --> 0:24:38.760
<v Speaker 5>general of AI, the models they get better at kind

0:24:38.800 --> 0:24:41.960
<v Speaker 5>of disproportionate rates, sometimes scaling low.

0:24:42.040 --> 0:24:43.359
<v Speaker 2>Have We've got a new scaling law Stu.

0:24:43.520 --> 0:24:45.800
<v Speaker 5>I mean, I think that a lot of times when

0:24:45.800 --> 0:24:47.920
<v Speaker 5>you're building models and the model gets so much better

0:24:47.960 --> 0:24:49.960
<v Speaker 5>and you talk to the scientists and the team, they

0:24:50.000 --> 0:24:51.800
<v Speaker 5>just can't believe how much better it got because the

0:24:51.800 --> 0:24:55.160
<v Speaker 5>model is learning itself. And so I think that if

0:24:55.160 --> 0:24:57.800
<v Speaker 5>you actually aren't investing in general AI, you're going to

0:24:57.840 --> 0:25:00.480
<v Speaker 5>be behind by even the amount of time that you weighted,

0:25:00.880 --> 0:25:03.600
<v Speaker 5>because there are so many lessons you get from iterating

0:25:03.640 --> 0:25:05.320
<v Speaker 5>and building applications.

0:25:04.680 --> 0:25:07.800
<v Speaker 2>Today, and you want to be the supermarket of AI

0:25:08.119 --> 0:25:10.919
<v Speaker 2>feels like agnostic to the models, as it is with

0:25:11.040 --> 0:25:12.160
<v Speaker 2>Amazon alexiplus.

0:25:12.520 --> 0:25:15.840
<v Speaker 5>Well, you know, look, the truth is what we care

0:25:15.920 --> 0:25:18.840
<v Speaker 5>most about in all our businesses, but as it relates

0:25:18.840 --> 0:25:21.879
<v Speaker 5>to a WS and AI, we want our customers to

0:25:21.920 --> 0:25:24.680
<v Speaker 5>be able to change their customer experiences and improve their

0:25:24.720 --> 0:25:28.040
<v Speaker 5>businesses so they can last over a long period time successfully.

0:25:28.080 --> 0:25:30.680
<v Speaker 5>And if we do right by our customers and take

0:25:30.680 --> 0:25:32.200
<v Speaker 5>the long term approach we do.

0:25:32.600 --> 0:25:34.520
<v Speaker 4>And they're able to run their.

0:25:34.400 --> 0:25:38.840
<v Speaker 5>Applications successfully on top of our technology infrastructure services, then

0:25:38.920 --> 0:25:41.480
<v Speaker 5>they're successful and we ride along with them. And so

0:25:41.880 --> 0:25:44.520
<v Speaker 5>you know, we in all these areas, we have services

0:25:44.560 --> 0:25:47.040
<v Speaker 5>we build ourselves. In the models area, we have Amazon Nova,

0:25:47.080 --> 0:25:50.320
<v Speaker 5>which people are really excited about because it's got comparable

0:25:50.480 --> 0:25:52.560
<v Speaker 5>intelligence to the leading models in the world, but it's

0:25:52.960 --> 0:25:55.000
<v Speaker 5>meaningfully less expensive and lower latency.

0:25:55.440 --> 0:25:57.440
<v Speaker 4>But if customers prefer to run.

0:25:57.320 --> 0:26:00.520
<v Speaker 5>Other models, we have huge partnership with Anthropic and Lama

0:26:00.640 --> 0:26:04.399
<v Speaker 5>and Deep Mistraw Deep Seeg. I mean, we have the

0:26:04.560 --> 0:26:07.800
<v Speaker 5>largest collection of leading foundation models in the world and

0:26:07.880 --> 0:26:11.359
<v Speaker 5>if customers are having success with those, then we're happy.

0:26:11.400 --> 0:26:13.080
<v Speaker 5>And the truth is, if you build a lot of

0:26:13.119 --> 0:26:16.680
<v Speaker 5>general of AI applications, people don't realize this. You use

0:26:16.960 --> 0:26:20.840
<v Speaker 5>multiple model types often in the same application. Even Alexa Plus,

0:26:20.840 --> 0:26:24.199
<v Speaker 5>as we talked about using multiple foundation models, and so

0:26:24.720 --> 0:26:28.320
<v Speaker 5>we want people to use the right model for their applications,

0:26:28.400 --> 0:26:30.320
<v Speaker 5>and then we make it easy for them to switch

0:26:30.359 --> 0:26:33.760
<v Speaker 5>between them and run it easily and successfully in AWS.

0:26:33.800 --> 0:26:37.160
<v Speaker 2>Andy Jesse, perfect place to leave it. Start with alexaplus

0:26:37.240 --> 0:26:40.360
<v Speaker 2>and non Alexa plus and all the generation and generative

0:26:40.400 --> 0:26:42.160
<v Speaker 2>AI that comes with it. We thank you so much,

0:26:42.240 --> 0:26:45.480
<v Speaker 2>thanks for having me, Andy Jesse, President and CEO of Amazon.

0:26:46.359 --> 0:26:49.440
<v Speaker 2>We're going to be right back talking more around what's

0:26:49.440 --> 0:26:51.399
<v Speaker 2>happening with then. As that one hundred under pressure is

0:26:51.440 --> 0:26:54.879
<v Speaker 2>in video sells us post its numbers, what Solace did

0:26:54.920 --> 0:26:57.000
<v Speaker 2>in video give to its in besta base when it

0:26:57.040 --> 0:27:07.520
<v Speaker 2>comes to generative AI adoption. Welcome back to mine mag techn.

0:27:07.359 --> 0:27:09.720
<v Speaker 3>On a jam Cautline hid to New York and I'm

0:27:09.760 --> 0:27:11.240
<v Speaker 3>Jackie Devllas in San Francisco.

0:27:11.359 --> 0:27:12.600
<v Speaker 2>Let's get a check on the markets.

0:27:13.000 --> 0:27:15.679
<v Speaker 3>The Nasdaq one hundred is down on the day about

0:27:15.680 --> 0:27:18.680
<v Speaker 3>five tenths of one percent, reflecting this tepid sentiment coming

0:27:18.720 --> 0:27:21.320
<v Speaker 3>out of earnings, and that's after results in some cloud

0:27:21.520 --> 0:27:24.920
<v Speaker 3>and chip players are leaving more questions than answers about

0:27:24.920 --> 0:27:28.800
<v Speaker 3>the longevity of the AI rally. We're also looking at Microsoft,

0:27:28.920 --> 0:27:31.600
<v Speaker 3>also down on the day about four tenths of one percent.

0:27:31.880 --> 0:27:35.960
<v Speaker 3>The company today urged the Trump administration to rethink regulations

0:27:35.960 --> 0:27:38.679
<v Speaker 3>that would cap the export of AI chips to what

0:27:38.720 --> 0:27:42.359
<v Speaker 3>it believes are vital markets. Microsoft argued those chip curbs

0:27:42.359 --> 0:27:45.879
<v Speaker 3>could for countries to turn to China for advanced chips. Broadly,

0:27:46.040 --> 0:27:48.880
<v Speaker 3>Microsoft is following a similar change as other tech stocks

0:27:48.960 --> 0:27:51.439
<v Speaker 3>that are showing the nees about whether AIS boom is

0:27:51.560 --> 0:27:55.520
<v Speaker 3>actually losing steam. Perhaps the most important barometer of that

0:27:55.680 --> 0:27:58.800
<v Speaker 3>is in video. Shares are also down today, reflecting these

0:27:58.840 --> 0:28:02.680
<v Speaker 3>concerns about profit margins that eclipsed a sales beat and

0:28:02.920 --> 0:28:06.800
<v Speaker 3>upbeat revenue forecast. Bloomberg's Ian King joins US now to

0:28:06.840 --> 0:28:08.919
<v Speaker 3>break down some of these results. I really want to

0:28:08.960 --> 0:28:11.960
<v Speaker 3>home in on what was really going on that probably

0:28:12.040 --> 0:28:15.399
<v Speaker 3>left investors feeling weary. It's newer line of chips Blackwell,

0:28:15.640 --> 0:28:18.200
<v Speaker 3>they're rolling out, but at what cost?

0:28:18.480 --> 0:28:20.439
<v Speaker 6>Yeah, I mean this is a continuation of what we

0:28:20.480 --> 0:28:23.520
<v Speaker 6>saw three months ago, where they're saying, look, everybody wants

0:28:23.520 --> 0:28:25.680
<v Speaker 6>these chips. We want to get them out as fast

0:28:25.680 --> 0:28:28.119
<v Speaker 6>as you possibly can. Guess what, It's more complicated. The

0:28:28.119 --> 0:28:30.760
<v Speaker 6>computers that are based on are way more complicated.

0:28:30.840 --> 0:28:31.840
<v Speaker 4>It's going to cost us.

0:28:31.760 --> 0:28:34.159
<v Speaker 6>More, but don't worry about it. Once we get to

0:28:34.240 --> 0:28:36.840
<v Speaker 6>full production everything, we'll come back on our margins or

0:28:37.000 --> 0:28:39.080
<v Speaker 6>go back cope. But at the same time, the margins

0:28:39.120 --> 0:28:40.560
<v Speaker 6>are still above seventy percent.

0:28:41.240 --> 0:28:44.240
<v Speaker 2>I mean, people would weep to have more than seventy

0:28:44.280 --> 0:28:47.800
<v Speaker 2>percent margins. And then we hear, of course from trying

0:28:47.800 --> 0:28:49.920
<v Speaker 2>to signal that they'll get back to mid seventy percent

0:28:50.200 --> 0:28:52.320
<v Speaker 2>by the end of the year. But when we've got

0:28:52.400 --> 0:28:55.520
<v Speaker 2>the market still skating on thin ice here in was

0:28:55.680 --> 0:29:00.400
<v Speaker 2>enough said about China? Was enough said about potential hits

0:29:00.480 --> 0:29:03.520
<v Speaker 2>to their future demand from competitors such as Amazon for example.

0:29:04.480 --> 0:29:07.400
<v Speaker 6>Yeah, I mean the world as as you're indicating the words,

0:29:07.400 --> 0:29:10.560
<v Speaker 6>several areas of concern coming into this, and the company

0:29:10.600 --> 0:29:14.240
<v Speaker 6>had clearly done their homework. They pretty much answered everything

0:29:14.560 --> 0:29:17.520
<v Speaker 6>in order and went at it pretty hard with statistics

0:29:17.520 --> 0:29:20.920
<v Speaker 6>and assertions. But at the same I mean underlying this, though,

0:29:21.000 --> 0:29:22.680
<v Speaker 6>is that this is a company that investors have got

0:29:22.760 --> 0:29:25.600
<v Speaker 6>used to actually having every innings be a blowout, and

0:29:25.640 --> 0:29:31.640
<v Speaker 6>this wasn't a blowout. This was just regular common garden brilliant. Right.

0:29:31.880 --> 0:29:35.480
<v Speaker 2>You said almost growth in revenue, Yeah, I mean.

0:29:35.400 --> 0:29:38.040
<v Speaker 6>We you know, one hundred and twenty our billion dollar company.

0:29:38.320 --> 0:29:40.160
<v Speaker 6>Two years ago, we were in the twenties.

0:29:40.240 --> 0:29:41.400
<v Speaker 4>Right in terms of revenue.

0:29:42.240 --> 0:29:46.400
<v Speaker 6>Margins are up you know, ten fifteen basis points from

0:29:46.480 --> 0:29:48.320
<v Speaker 6>where they were a couple of years ago.

0:29:48.400 --> 0:29:50.280
<v Speaker 4>So we're not suffering here.

0:29:50.320 --> 0:29:53.360
<v Speaker 6>But but we're just not surprising people on the upside

0:29:53.400 --> 0:29:53.840
<v Speaker 6>in the way that.

0:29:53.840 --> 0:29:54.280
<v Speaker 4>We used to.

0:29:54.680 --> 0:29:57.120
<v Speaker 3>And let's talk about what took in videos wind out

0:29:57.120 --> 0:29:59.920
<v Speaker 3>of its sales earlier this month. Last month when Deep

0:30:00.080 --> 0:30:02.960
<v Speaker 3>secretly came onto the scene, sparked a lot of concerns

0:30:02.960 --> 0:30:04.520
<v Speaker 3>that we might not need as many chips as we

0:30:04.560 --> 0:30:05.080
<v Speaker 3>thought we might.

0:30:05.280 --> 0:30:06.680
<v Speaker 2>What did the company have to say about that?

0:30:06.760 --> 0:30:07.480
<v Speaker 4>Yeah, I mean a.

0:30:07.440 --> 0:30:10.840
<v Speaker 6>Lot of what they had to say was clearly designed

0:30:10.880 --> 0:30:15.120
<v Speaker 6>to deal with that concern. And Jensen Wang, the CEO,

0:30:15.240 --> 0:30:17.040
<v Speaker 6>what he was saying is like, look, this is a

0:30:17.080 --> 0:30:19.000
<v Speaker 6>new way of doing things, but don't worry. Our chips

0:30:19.040 --> 0:30:20.880
<v Speaker 6>are really good at that as well. And guess what,

0:30:21.040 --> 0:30:22.880
<v Speaker 6>in the end, this is going to speed everything up.

0:30:22.960 --> 0:30:25.400
<v Speaker 6>Everybody's going to be flowing into this way of doing things.

0:30:25.400 --> 0:30:27.600
<v Speaker 6>This is good for everybody. And he gave a lot

0:30:27.600 --> 0:30:30.479
<v Speaker 6>of technical explanations that were obviously self serving but at

0:30:30.520 --> 0:30:33.320
<v Speaker 6>the same time logical and reason that that appeared to

0:30:33.360 --> 0:30:36.320
<v Speaker 6>sort of slay that dragon. But again, you know, the

0:30:36.400 --> 0:30:38.640
<v Speaker 6>numbers are what people really focus on.

0:30:39.320 --> 0:30:42.600
<v Speaker 2>What's so interesting is at this time we're wondering about

0:30:42.600 --> 0:30:45.880
<v Speaker 2>what the administration means for Nvideo, for its access to

0:30:46.320 --> 0:30:49.760
<v Speaker 2>selling chips to China but also to allies. And we've

0:30:49.800 --> 0:30:53.160
<v Speaker 2>got this push from Microsoft today Brad Smith calling on

0:30:53.200 --> 0:30:58.280
<v Speaker 2>the administration to basically avoid this focus on AI diffusion

0:30:58.840 --> 0:31:01.960
<v Speaker 2>rule as was in Poe. What do you think Jensen's

0:31:02.000 --> 0:31:03.600
<v Speaker 2>reaction would be to Microsoft letter.

0:31:05.320 --> 0:31:08.240
<v Speaker 6>I mean you could argue that, you know, in Video

0:31:08.560 --> 0:31:10.760
<v Speaker 6>kind of the precursor to this sentiment, and you got

0:31:10.800 --> 0:31:13.360
<v Speaker 6>a little bit of that from Aws as well. I mean,

0:31:13.360 --> 0:31:16.520
<v Speaker 6>the fundamental argument here is like if you hobble, if

0:31:16.520 --> 0:31:19.920
<v Speaker 6>your efforts to hobble China are totally successful, guess what

0:31:20.200 --> 0:31:23.600
<v Speaker 6>it might backfire. It might hobble us, it might hurt

0:31:23.640 --> 0:31:27.120
<v Speaker 6>our research and development budgets, it might hurt our end

0:31:27.160 --> 0:31:30.480
<v Speaker 6>market access, and eventually China is going to be so

0:31:30.640 --> 0:31:33.120
<v Speaker 6>motivated that they're going to get there themselves and we'll

0:31:33.160 --> 0:31:36.400
<v Speaker 6>have no play there and we'll have created a monster

0:31:36.440 --> 0:31:39.520
<v Speaker 6>that we can't control. That's the fundamental argument that's been

0:31:39.560 --> 0:31:42.520
<v Speaker 6>given in different ways and Invidia has been definitely one

0:31:42.560 --> 0:31:45.440
<v Speaker 6>of the ones that's been voicing that m Magsie and

0:31:45.520 --> 0:31:46.400
<v Speaker 6>King brilliant.

0:31:46.400 --> 0:31:48.440
<v Speaker 2>To wrap it up with you, thank you. Let's bring

0:31:48.440 --> 0:31:50.800
<v Speaker 2>in the invested tate now. Ioka, Yoshioka is with US

0:31:50.800 --> 0:31:53.760
<v Speaker 2>portfolio manager at Wealth Enhancement Group. Let's just go back

0:31:53.800 --> 0:31:56.960
<v Speaker 2>to the fundamentals of Nvidia's business right now. What did

0:31:57.000 --> 0:31:59.000
<v Speaker 2>you make of the numbers? Was they're not enough there

0:31:59.040 --> 0:32:01.160
<v Speaker 2>to excite you at this three trillion evaluation?

0:32:02.480 --> 0:32:05.760
<v Speaker 7>Hi, Caroline, you know, we think we thought the results

0:32:05.760 --> 0:32:07.800
<v Speaker 7>were actually pretty much in line with what we were

0:32:07.840 --> 0:32:11.200
<v Speaker 7>expecting and maybe slightly better. You know, it's just that

0:32:11.680 --> 0:32:16.000
<v Speaker 7>in this environment where there's so much uncertainty in the markets,

0:32:16.240 --> 0:32:19.120
<v Speaker 7>you know, people are just a little skittish about just

0:32:19.560 --> 0:32:22.160
<v Speaker 7>waiting and being a little bit more patient to see

0:32:22.640 --> 0:32:24.640
<v Speaker 7>some of these numbers come through. I mean, they did

0:32:24.680 --> 0:32:28.440
<v Speaker 7>talk about how margins will expand in the second half

0:32:29.080 --> 0:32:32.800
<v Speaker 7>once Blackwell becomes a greater portion of the mix, but

0:32:33.000 --> 0:32:35.720
<v Speaker 7>you know, people are a little bit impatient in this environment.

0:32:36.800 --> 0:32:38.120
<v Speaker 2>Ayaka, what do you make.

0:32:37.960 --> 0:32:41.560
<v Speaker 3>Of the company already starting to talk about its next

0:32:42.160 --> 0:32:45.000
<v Speaker 3>model of AI chips, the rubenschip. I mean, it just

0:32:45.040 --> 0:32:47.320
<v Speaker 3>seems like a lot of these newer models are just

0:32:47.360 --> 0:32:50.400
<v Speaker 3>coming out really fast. Do you think that's going to

0:32:50.400 --> 0:32:53.800
<v Speaker 3>be a longer term drag on margins or even risk

0:32:53.920 --> 0:32:55.080
<v Speaker 3>exhausting customers.

0:32:56.480 --> 0:32:58.560
<v Speaker 7>I think so, And I think we see this just

0:32:58.680 --> 0:33:01.600
<v Speaker 7>in the sort of end use case and how quickly

0:33:01.640 --> 0:33:05.479
<v Speaker 7>we can adopt AI into all of our everyday lives.

0:33:05.680 --> 0:33:08.320
<v Speaker 7>I mean, Amazon's a perfect example of how they're trying

0:33:08.360 --> 0:33:13.320
<v Speaker 7>to incorporate more agentic AI into our lives through Alexa Plus.

0:33:13.880 --> 0:33:16.600
<v Speaker 7>But know, we have to see this in more areas,

0:33:16.760 --> 0:33:20.600
<v Speaker 7>and consumer behavior is really slow to change when it

0:33:20.640 --> 0:33:23.280
<v Speaker 7>comes to adopting new technology, and so we've got to

0:33:23.520 --> 0:33:29.040
<v Speaker 7>really see the pace of consumer demand and enterprise demand

0:33:29.200 --> 0:33:34.000
<v Speaker 7>really match the build out of AI. But the structure,

0:33:34.080 --> 0:33:36.760
<v Speaker 7>the underlying infrastructure of AI is going to take a

0:33:36.800 --> 0:33:41.680
<v Speaker 7>lot more compute power, as jensen As has mentioned, and

0:33:41.720 --> 0:33:43.640
<v Speaker 7>so that's going to continue, I think. In order to

0:33:43.640 --> 0:33:46.280
<v Speaker 7>just set the stage, what did you make of.

0:33:46.240 --> 0:33:49.520
<v Speaker 3>The company's comments around inferencing and its ability to really

0:33:49.560 --> 0:33:52.640
<v Speaker 3>take advantage of this next frontier where a lot of

0:33:52.680 --> 0:33:55.040
<v Speaker 3>these new reasoning models are going to depend on this

0:33:55.160 --> 0:33:58.640
<v Speaker 3>type of training. Are you confident that the company is

0:33:58.680 --> 0:34:01.960
<v Speaker 3>poised to really benefit from that, you.

0:34:01.920 --> 0:34:05.480
<v Speaker 7>Know, I think I won't doubt Jensen and you know,

0:34:05.560 --> 0:34:10.600
<v Speaker 7>the technological advances that he's been able to create at Nvidia,

0:34:10.960 --> 0:34:13.640
<v Speaker 7>and I do believe that just the overall you know,

0:34:14.000 --> 0:34:18.760
<v Speaker 7>inferencing market and just all the reasoning, just the amount

0:34:18.800 --> 0:34:21.400
<v Speaker 7>of compute that they talked about, you know, one hundred

0:34:21.440 --> 0:34:24.839
<v Speaker 7>times more compute power needed in order to do all

0:34:24.880 --> 0:34:27.360
<v Speaker 7>the reasoning behind the scenes. I do believe that that

0:34:27.600 --> 0:34:30.759
<v Speaker 7>is probably the right direction. I know there was a

0:34:30.760 --> 0:34:33.680
<v Speaker 7>lot of concern when deep seat came out, but you know,

0:34:33.719 --> 0:34:36.000
<v Speaker 7>I think this is just a new level and another

0:34:36.160 --> 0:34:39.960
<v Speaker 7>area that AI is going to continue to proliferate, you know,

0:34:40.000 --> 0:34:42.080
<v Speaker 7>in more use cases for AI.

0:34:43.280 --> 0:34:46.520
<v Speaker 2>There are these limitations though, I think and agreed Jensen

0:34:46.520 --> 0:34:48.960
<v Speaker 2>Wang did a lot to talk around these new scaling

0:34:49.040 --> 0:34:53.400
<v Speaker 2>laws that come with the latest and greatest models and reasoning.

0:34:53.719 --> 0:34:56.760
<v Speaker 2>He didn't really talk to those some of the geopolitical

0:34:56.760 --> 0:34:59.600
<v Speaker 2>limitations right now, and when you've got Microsoft coming out

0:34:59.600 --> 0:35:02.239
<v Speaker 2>brad with asking the government to basically do away with

0:35:02.280 --> 0:35:06.719
<v Speaker 2>Biden's AI diffusion rule to allow companies to sell globally

0:35:06.920 --> 0:35:11.640
<v Speaker 2>with ease, is that something that you're thinking about absolutely?

0:35:11.760 --> 0:35:13.680
<v Speaker 7>I think even you know, when you go back to

0:35:13.840 --> 0:35:17.319
<v Speaker 7>when deep seeks you know news came out and really

0:35:17.360 --> 0:35:21.360
<v Speaker 7>impacted the whole sector. It really goes to show the

0:35:21.840 --> 0:35:25.879
<v Speaker 7>arms race or the AI race that's in hand at

0:35:25.880 --> 0:35:28.919
<v Speaker 7>the moment. And you know, it is critical and really

0:35:28.960 --> 0:35:31.759
<v Speaker 7>important for the US to be you know, in that

0:35:31.840 --> 0:35:34.640
<v Speaker 7>pole position. And I think that's what's going on here,

0:35:34.680 --> 0:35:37.480
<v Speaker 7>and we'd like to get as many you know, friendly

0:35:37.800 --> 0:35:42.239
<v Speaker 7>faces on board with how we the United States and

0:35:42.360 --> 0:35:46.120
<v Speaker 7>Nvidia and other chip companies are deploying.

0:35:45.760 --> 0:35:50.080
<v Speaker 2>AI okay pole positions. Then which companies are in the

0:35:50.080 --> 0:35:52.560
<v Speaker 2>pole positions for you right now? Which ones do you

0:35:52.560 --> 0:35:54.040
<v Speaker 2>want to be adding to at this moment?

0:35:55.280 --> 0:35:55.560
<v Speaker 4>Sure?

0:35:55.640 --> 0:35:58.440
<v Speaker 7>So, I mean I think you know, from a tech standpoint,

0:35:59.200 --> 0:36:01.600
<v Speaker 7>you still want to have some of the big tech names.

0:36:01.640 --> 0:36:04.319
<v Speaker 7>You know, in Vidia, we're not selling any Nvidia at

0:36:04.320 --> 0:36:06.880
<v Speaker 7>the moment. We know it's been range bound for a while.

0:36:07.000 --> 0:36:09.680
<v Speaker 7>We do believe in the long term it will continue

0:36:09.719 --> 0:36:13.640
<v Speaker 7>to grow. Broad prom is another name in Microsoft as well.

0:36:13.680 --> 0:36:16.200
<v Speaker 7>I mean, Microsoft is you know, at the forefront here

0:36:16.360 --> 0:36:21.840
<v Speaker 7>pushing for you know, additional globalization of their technology and

0:36:22.200 --> 0:36:25.799
<v Speaker 7>allowing for their technology to be more ubiquitous so that

0:36:25.880 --> 0:36:28.840
<v Speaker 7>they can again you know, everybody wants to be in

0:36:28.840 --> 0:36:30.640
<v Speaker 7>that cole position, and I think we want to put

0:36:30.680 --> 0:36:31.480
<v Speaker 7>America first.

0:36:32.440 --> 0:36:35.399
<v Speaker 3>That's a Yako Yoshioka from the Wealth Enhancement Group things

0:36:35.400 --> 0:36:36.080
<v Speaker 3>for joining.

0:36:35.920 --> 0:36:46.520
<v Speaker 2>US shares a salesforce under pressure. The company telling investors

0:36:46.520 --> 0:36:49.160
<v Speaker 2>on its earning school yesterday that it expects its AI

0:36:49.280 --> 0:36:52.480
<v Speaker 2>product Agent Fools to give just a modest contribution to

0:36:52.520 --> 0:36:55.920
<v Speaker 2>twenty twenty six revenue. That's unpacket all with Alex Okin

0:36:56.239 --> 0:36:59.880
<v Speaker 2>of Wolf Research, Alex, look, the full cost was what

0:37:00.040 --> 0:37:02.560
<v Speaker 2>red people here? Forty point five to forty point nine

0:37:02.600 --> 0:37:06.760
<v Speaker 2>billion dollars? Is Agent Force just not bring enough force

0:37:06.880 --> 0:37:07.600
<v Speaker 2>quickly enough?

0:37:08.320 --> 0:37:11.640
<v Speaker 8>Look, I think with new innovations like Agent Force, particularly

0:37:11.680 --> 0:37:14.480
<v Speaker 8>when you're dealing with very large, complicated customers, a lot

0:37:14.520 --> 0:37:17.240
<v Speaker 8>of times in regulated industries, you want to be slow.

0:37:17.400 --> 0:37:19.560
<v Speaker 8>You want to be methodical, you want to really be

0:37:19.680 --> 0:37:22.120
<v Speaker 8>in there and delivering value, but you want to be conservative.

0:37:22.360 --> 0:37:24.719
<v Speaker 8>And I think that's that's a feature, that's not a bug.

0:37:24.719 --> 0:37:27.960
<v Speaker 8>And I think investors generally speaking, they've seen this movie

0:37:27.960 --> 0:37:32.040
<v Speaker 8>before with the Arrival of the Cloud, where it does

0:37:32.120 --> 0:37:34.640
<v Speaker 8>take time, and I think with Agent Force, we would

0:37:34.680 --> 0:37:36.920
<v Speaker 8>expect it to be less than a point of contribution.

0:37:37.680 --> 0:37:41.600
<v Speaker 8>A lot of times you're seeing companies start small, experiment

0:37:41.760 --> 0:37:44.160
<v Speaker 8>and then have the ability to get a lot bigger.

0:37:44.800 --> 0:37:46.680
<v Speaker 8>I think it's also important to remember there's a labor,

0:37:49.120 --> 0:37:51.880
<v Speaker 8>there's a there's a labor, not cost, but there's a

0:37:51.920 --> 0:37:54.160
<v Speaker 8>problem here where you want to be very careful and

0:37:54.239 --> 0:37:57.000
<v Speaker 8>nuanced in how you treat this innovation because it can

0:37:57.040 --> 0:38:00.319
<v Speaker 8>be disruptive to culture, and so you want to really

0:38:00.440 --> 0:38:03.880
<v Speaker 8>have a great sense of what's durable, what's reliable, and

0:38:03.880 --> 0:38:06.960
<v Speaker 8>then what's transferable. And I think Salesforce is kind of

0:38:06.960 --> 0:38:09.600
<v Speaker 8>in the mix and in the middle of really driving

0:38:09.640 --> 0:38:12.560
<v Speaker 8>that massive innovation for these customers.

0:38:12.800 --> 0:38:16.160
<v Speaker 2>Let's talk about Salesforce's own labor quandary, because not only

0:38:16.200 --> 0:38:17.960
<v Speaker 2>they're having to get rid of some to put in

0:38:18.040 --> 0:38:21.600
<v Speaker 2>more AI talent, they're also having a real change of

0:38:21.640 --> 0:38:24.040
<v Speaker 2>ship in terms of the executive level. What do you

0:38:24.080 --> 0:38:25.120
<v Speaker 2>make of all the changes.

0:38:25.800 --> 0:38:29.000
<v Speaker 8>I think as companies get bigger and they evolve, it

0:38:29.080 --> 0:38:34.400
<v Speaker 8>creates the opportunity to attract new talent with different levels

0:38:34.400 --> 0:38:37.399
<v Speaker 8>of experience. I think Salesforce has done this probably better

0:38:37.440 --> 0:38:39.440
<v Speaker 8>than many other companies in the past. You've seen it

0:38:40.600 --> 0:38:44.319
<v Speaker 8>as they went through multiple very senior co CEOs like

0:38:44.400 --> 0:38:48.200
<v Speaker 8>Keith Block, like Brett Taylor injecting just the right amount

0:38:48.280 --> 0:38:51.319
<v Speaker 8>of stuff that the company needed at that time. I

0:38:51.320 --> 0:38:55.640
<v Speaker 8>think with the current change, I think Robin brings a

0:38:55.640 --> 0:38:58.640
<v Speaker 8>lot to the table. She really brings a lot of experience.

0:38:58.680 --> 0:39:02.120
<v Speaker 8>The new COFO as they call it, where she inhabits

0:39:02.280 --> 0:39:05.879
<v Speaker 8>both the COO and the CFO title. I think there's

0:39:05.880 --> 0:39:07.680
<v Speaker 8>a lot of opportunity with that change. I think it's

0:39:07.800 --> 0:39:10.960
<v Speaker 8>right for investors to understand that it's a little bit

0:39:11.000 --> 0:39:13.439
<v Speaker 8>riskier from an execution perspective, but they've got the right

0:39:13.560 --> 0:39:16.839
<v Speaker 8>set of hands on the controls to I think, get

0:39:16.840 --> 0:39:17.560
<v Speaker 8>you smooth sailing.

0:39:18.800 --> 0:39:23.719
<v Speaker 3>Alex Salesforce has been an evangelist for agents, and you know,

0:39:23.920 --> 0:39:27.520
<v Speaker 3>this is seen widely as like the next big application

0:39:27.719 --> 0:39:30.799
<v Speaker 3>that will actually justify just how much investment has gone

0:39:30.800 --> 0:39:32.960
<v Speaker 3>into the space, because it seemed to be useful like

0:39:33.000 --> 0:39:35.000
<v Speaker 3>things in customer service, you know, will be able to

0:39:35.000 --> 0:39:37.719
<v Speaker 3>be taken over by agents in the future. Are you

0:39:37.960 --> 0:39:41.520
<v Speaker 3>worried that what Salesforce said about it's demand for agent

0:39:41.600 --> 0:39:45.440
<v Speaker 3>force pretends something deeper about adoption going forward.

0:39:46.640 --> 0:39:49.160
<v Speaker 8>It's a great question, and I think that Salesforce is

0:39:49.200 --> 0:39:53.600
<v Speaker 8>not the first company to create a moniker around generator.

0:39:53.640 --> 0:39:56.200
<v Speaker 8>The utilization in the enterprise. I would say that goes

0:39:56.239 --> 0:39:59.120
<v Speaker 8>to Microsoft with Copilot, and I think Salesforce has a

0:39:59.160 --> 0:40:02.200
<v Speaker 8>real opportunity and they want to be very careful. They

0:40:02.200 --> 0:40:06.320
<v Speaker 8>want to go slow, they want to really double down.

0:40:06.120 --> 0:40:07.439
<v Speaker 2>On the successes that they're seeing.

0:40:07.480 --> 0:40:12.520
<v Speaker 8>And they talked about some pretty marquee large customers Singapore Airlines,

0:40:13.120 --> 0:40:17.200
<v Speaker 8>They talked about accenture. There were even examples with Open

0:40:17.239 --> 0:40:21.640
<v Speaker 8>Table and Sharkeningja where those companies actually discussed agent Force

0:40:21.719 --> 0:40:25.200
<v Speaker 8>on their own earnings calls. So I would view the

0:40:25.239 --> 0:40:28.359
<v Speaker 8>demand is off the charts, the fact that they went

0:40:28.440 --> 0:40:32.520
<v Speaker 8>from three hundred deals to three thousand deals in one quarter.

0:40:32.880 --> 0:40:34.399
<v Speaker 8>But I think you have to look at this over

0:40:34.440 --> 0:40:37.439
<v Speaker 8>a period of time where the amount of value that

0:40:37.520 --> 0:40:40.120
<v Speaker 8>these customers will be able to realize in their own

0:40:40.239 --> 0:40:42.640
<v Speaker 8>organizations and the amount that they will be willing to

0:40:42.680 --> 0:40:45.880
<v Speaker 8>pay to Salesforce versus the amount they currently pay, it

0:40:45.880 --> 0:40:47.960
<v Speaker 8>could be a meaningful multiple of that amount, but I

0:40:47.960 --> 0:40:49.080
<v Speaker 8>think it's going to take time.

0:40:49.760 --> 0:40:53.040
<v Speaker 3>Speaking of customers, Mark Benioff said that the Department of

0:40:53.080 --> 0:40:56.399
<v Speaker 3>Government Efficiency DOGE has actually been using slack for some.

0:40:56.360 --> 0:40:58.080
<v Speaker 2>Of its work. What did you make of that?

0:40:59.600 --> 0:41:02.839
<v Speaker 8>Sounds like they have a really good collaboration platform that

0:41:03.239 --> 0:41:06.920
<v Speaker 8>they acquired, and I think it part of the vision

0:41:07.160 --> 0:41:10.160
<v Speaker 8>for Salesforce. Part of the vision for Agent Force is

0:41:10.200 --> 0:41:13.800
<v Speaker 8>to have an ubiquitous communication platform because it has a

0:41:13.840 --> 0:41:16.480
<v Speaker 8>lot of data that's very relevant in a lot of workflows,

0:41:16.760 --> 0:41:21.600
<v Speaker 8>and the data model that Salesforce can effectively enrich by

0:41:21.640 --> 0:41:25.520
<v Speaker 8>having those conversations available directly in the application is going

0:41:25.560 --> 0:41:27.919
<v Speaker 8>to be important. So look, I look at this as

0:41:28.680 --> 0:41:33.120
<v Speaker 8>these people need to have relationships with everybody, and I

0:41:33.160 --> 0:41:36.200
<v Speaker 8>think that Mark talked a lot about how many administrations

0:41:36.400 --> 0:41:39.600
<v Speaker 8>he's worked with the company has worked with, so I

0:41:39.600 --> 0:41:41.480
<v Speaker 8>would view this as a positive for Salesforce.

0:41:45.560 --> 0:41:48.880
<v Speaker 3>Thanks Alex Zukan from Wolf Research. Appreciate you coming in

0:41:48.920 --> 0:41:51.640
<v Speaker 3>to unpack that for us. Turning to the entertainment sector,

0:41:51.719 --> 0:41:55.120
<v Speaker 3>Warner Brothers, Discovery and Paramount both at with their earnings.

0:41:55.560 --> 0:41:59.320
<v Speaker 3>Here to unpack them for us is Bloomberg's Hannah Miller. Hannah,

0:42:00.000 --> 0:42:01.680
<v Speaker 3>I think was a bright spot, which is something that

0:42:01.719 --> 0:42:03.960
<v Speaker 3>we haven't really heard that often when you look at

0:42:04.000 --> 0:42:06.200
<v Speaker 3>some of the streaming players out there in recent months.

0:42:06.200 --> 0:42:09.760
<v Speaker 3>What was driving the demand here and profits as well.

0:42:10.360 --> 0:42:13.520
<v Speaker 9>Yeah, So both Warner Brothers and Paramount focused on the

0:42:13.640 --> 0:42:16.440
<v Speaker 9>huge streaming gains that they had in the fourth quarter,

0:42:16.800 --> 0:42:18.160
<v Speaker 9>and they were kind of, you know, trying to draw

0:42:18.200 --> 0:42:20.800
<v Speaker 9>attention away from the fact that they missed on revenue

0:42:20.920 --> 0:42:24.200
<v Speaker 9>estimates and you know, are still struggling with their take

0:42:24.239 --> 0:42:28.279
<v Speaker 9>cable TV businesses. If you're looking at Warner Brothers with subscribers,

0:42:28.320 --> 0:42:31.839
<v Speaker 9>they did a huge international push early in twenty twenty four,

0:42:32.239 --> 0:42:35.040
<v Speaker 9>especially in Europe and Latin America, so that helped drive

0:42:35.080 --> 0:42:36.239
<v Speaker 9>subscriber gains for them.

0:42:36.719 --> 0:42:39.880
<v Speaker 2>It really was an international focus and subscribe as coming

0:42:39.920 --> 0:42:43.200
<v Speaker 2>up to one hundred and seventy million with the advertising

0:42:43.200 --> 0:42:46.279
<v Speaker 2>revenue really big void what then a Paramount because the

0:42:46.320 --> 0:42:49.239
<v Speaker 2>Paramount plus ads were good and better than expected, but

0:42:49.320 --> 0:42:50.440
<v Speaker 2>elsewhere fell Shure.

0:42:51.080 --> 0:42:54.319
<v Speaker 9>Yeah, I mean, Paramount really emphasized the fact that, you know,

0:42:54.360 --> 0:42:56.719
<v Speaker 9>their streaming business is growing, they are aiming to be

0:42:56.800 --> 0:42:59.439
<v Speaker 9>profitable by the end of this year, and they really

0:42:59.480 --> 0:43:01.920
<v Speaker 9>leaned on the that they have this wide range of content,

0:43:02.520 --> 0:43:06.200
<v Speaker 9>especially shows created by Taylor Sheridan, who is of Yellowstone

0:43:06.200 --> 0:43:09.080
<v Speaker 9>fame and has that hit success. So that's what they

0:43:09.120 --> 0:43:11.799
<v Speaker 9>really tried to push forward in their earnings, you know,

0:43:11.880 --> 0:43:14.879
<v Speaker 9>again drawing attention away from the fact that their TV

0:43:14.960 --> 0:43:18.600
<v Speaker 9>businesses are not doing as well as as they would hope.

0:43:19.040 --> 0:43:21.320
<v Speaker 3>And what did the company say about how it plans

0:43:21.360 --> 0:43:24.879
<v Speaker 3>to sustain some of that content generation because it's really

0:43:24.960 --> 0:43:27.920
<v Speaker 3>expensive to invest in and it takes time as well.

0:43:28.520 --> 0:43:31.040
<v Speaker 9>Yeah, I mean, Warner Brothers really emphasize this morning that

0:43:31.080 --> 0:43:33.279
<v Speaker 9>they have a diverse range of content. You know, they're

0:43:33.320 --> 0:43:37.239
<v Speaker 9>pulling from sports, They're doing scripted HBO shows. The White

0:43:37.239 --> 0:43:40.000
<v Speaker 9>Lotus came up. That's a big one. The Pit, a

0:43:40.040 --> 0:43:42.800
<v Speaker 9>new medical show, is also something that they're really pushing forward.

0:43:43.040 --> 0:43:45.000
<v Speaker 9>So they're really emphasizing the fact that they're willing to

0:43:45.040 --> 0:43:47.200
<v Speaker 9>invest in creative ideas and that this is how they're

0:43:47.200 --> 0:43:48.000
<v Speaker 9>gaining customers.

0:43:48.480 --> 0:43:52.399
<v Speaker 2>Annamella reappreciate it, thank you. Talking of creatives YouTube style,

0:43:52.480 --> 0:43:54.120
<v Speaker 2>mister Beast is seeking to raise a couple of one

0:43:54.200 --> 0:43:57.000
<v Speaker 2>hundred million dollars to expound his business in a funding

0:43:57.080 --> 0:43:59.400
<v Speaker 2>round that will value the company at about five billion dollars.

0:43:59.400 --> 0:44:02.440
<v Speaker 2>It's all according sources. Talk still in the early stages,

0:44:02.920 --> 0:44:06.319
<v Speaker 2>not yet clear who will invest. Coming up more on

0:44:06.360 --> 0:44:09.640
<v Speaker 2>Amazon's Alexa plus, It's Quantum computing chip announcement and more.

0:44:09.880 --> 0:44:22.239
<v Speaker 2>This is bluem Meg technology. So we kicked off this

0:44:22.320 --> 0:44:25.960
<v Speaker 2>show with Amazon CEO Andy Jasse joining on artificial intelligence.

0:44:26.200 --> 0:44:28.080
<v Speaker 2>And this is the company, of course, also just announced

0:44:28.080 --> 0:44:31.480
<v Speaker 2>its first quantum computing chip, will significant move, joining the

0:44:31.560 --> 0:44:33.880
<v Speaker 2>likes of Google and Microsoft, who also recently came out

0:44:33.920 --> 0:44:36.080
<v Speaker 2>with their own quantum hardware. Let's break it all down

0:44:36.080 --> 0:44:38.279
<v Speaker 2>on Bloomberg's mat day and first on the quantum chip.

0:44:38.440 --> 0:44:40.880
<v Speaker 2>They really are going for like efficiency once again, it's

0:44:40.960 --> 0:44:41.840
<v Speaker 2>kind of Amazon zmmo.

0:44:42.040 --> 0:44:43.920
<v Speaker 10>Oh, it's totally their playbook. They were talking about how

0:44:44.000 --> 0:44:46.120
<v Speaker 10>much they could reduce the overhead of building a quantum chip.

0:44:46.160 --> 0:44:48.000
<v Speaker 10>They were reminding us, hey, listen, if you actually build

0:44:48.040 --> 0:44:49.360
<v Speaker 10>one of these things in practice, might cost you a

0:44:49.360 --> 0:44:51.840
<v Speaker 10>billion dollars. So very wus playbook to say, listen, we

0:44:51.840 --> 0:44:53.520
<v Speaker 10>think we can build a cheaper mouse trap that might

0:44:53.520 --> 0:44:56.440
<v Speaker 10>get more more update, Matt, how much of.

0:44:56.400 --> 0:44:59.040
<v Speaker 3>This is just companies trying to plant a flag to

0:44:59.080 --> 0:45:01.640
<v Speaker 3>show that they're in the to computing game. Are we

0:45:01.680 --> 0:45:04.200
<v Speaker 3>actually expecting to see anything come out of this in

0:45:04.200 --> 0:45:05.160
<v Speaker 3>the short term?

0:45:05.280 --> 0:45:07.359
<v Speaker 10>Short term? I'm not so sure, but I think it's

0:45:07.440 --> 0:45:11.120
<v Speaker 10>notable talking about a ws's announcement this week that they said,

0:45:11.320 --> 0:45:14.040
<v Speaker 10>you know, a decade is maybe pretty aggressive, right, which

0:45:14.080 --> 0:45:16.560
<v Speaker 10>is a lot more sober than you had Microsoft a

0:45:16.560 --> 0:45:19.279
<v Speaker 10>few weeks back, saying years not decades. So there's there's

0:45:19.320 --> 0:45:21.239
<v Speaker 10>definitely a lot of positioning going on right now, but

0:45:21.480 --> 0:45:24.160
<v Speaker 10>you know, put abs down on more conservative sides, saying, listen,

0:45:24.160 --> 0:45:25.520
<v Speaker 10>there's still a whole lot of work to do. I

0:45:25.520 --> 0:45:27.680
<v Speaker 10>think the change that has happened is, you know, folks

0:45:27.719 --> 0:45:29.640
<v Speaker 10>are saying it's a win, not an if, and you're

0:45:29.680 --> 0:45:31.080
<v Speaker 10>hearing that really from around big tech.

0:45:31.800 --> 0:45:34.399
<v Speaker 2>They're not conservative when it comes to spending. And try

0:45:34.440 --> 0:45:37.000
<v Speaker 2>as I might, I tried to get Addie to spell

0:45:37.000 --> 0:45:39.800
<v Speaker 2>out what Lion's share of one hundred billion dollar capex

0:45:39.840 --> 0:45:42.160
<v Speaker 2>is on AI. Just take a listen to what he said.

0:45:43.120 --> 0:45:45.879
<v Speaker 2>You did say, basically, one hundred billion dollar run rate

0:45:46.520 --> 0:45:48.759
<v Speaker 2>for CAPEX expenditure. Can you give us even like a

0:45:48.760 --> 0:45:51.640
<v Speaker 2>percentage ratedown of how much that goes to distribution logistics

0:45:51.640 --> 0:45:53.760
<v Speaker 2>and how much goes to AI my shares?

0:45:54.000 --> 0:45:56.160
<v Speaker 5>You know most so you've boast of it, you know

0:45:56.280 --> 0:45:57.920
<v Speaker 5>most of it. You know the Lion's share is more

0:45:57.920 --> 0:45:58.680
<v Speaker 5>than fifty percent?

0:45:58.800 --> 0:45:59.040
<v Speaker 4>Yes?

0:45:59.160 --> 0:45:59.879
<v Speaker 2>Is it more than eighty?

0:46:01.960 --> 0:46:03.560
<v Speaker 4>We're playing the warmer and colder.

0:46:03.239 --> 0:46:07.520
<v Speaker 2>Goo, yes, exactly. Do we need more specifics?

0:46:07.840 --> 0:46:09.359
<v Speaker 4>I think we will, But he did make some news.

0:46:09.400 --> 0:46:12.000
<v Speaker 10>I think Amazon's been real careful about their general They franchise.

0:46:12.040 --> 0:46:14.359
<v Speaker 10>They've had multiple billions of dollars in revenue. I think

0:46:14.440 --> 0:46:18.560
<v Speaker 10>Andy told you many billions. So we're parsing adjectives here,

0:46:18.600 --> 0:46:20.680
<v Speaker 10>but I think they're getting a little bit moreptific and

0:46:20.680 --> 0:46:22.359
<v Speaker 10>they're gonna have to as this business grows for them.

0:46:23.640 --> 0:46:26.319
<v Speaker 3>Matt, what do you make of some of the competition.

0:46:26.640 --> 0:46:29.360
<v Speaker 3>Of course, you know you've been looking at quantum very closely.

0:46:29.680 --> 0:46:33.120
<v Speaker 3>Alexa is now really competing in that hardware space all

0:46:33.160 --> 0:46:35.760
<v Speaker 3>over again. But kind of shifting back to the quantum

0:46:35.800 --> 0:46:37.279
<v Speaker 3>piece for a little bit, I kind of want you

0:46:37.320 --> 0:46:40.560
<v Speaker 3>to break down if there are any differences in what

0:46:40.680 --> 0:46:43.799
<v Speaker 3>Jase said about how they're approaching it versus what Microsoft

0:46:43.800 --> 0:46:46.760
<v Speaker 3>and some other players have said.

0:46:46.560 --> 0:46:49.160
<v Speaker 10>Not particularly everybody says, you know, quantum is a really

0:46:49.200 --> 0:46:51.560
<v Speaker 10>hard problem to solve. Everybody says there are so many

0:46:51.760 --> 0:46:56.080
<v Speaker 10>errors inherent in quantum computing. I think again, the AWUS

0:46:56.120 --> 0:46:58.440
<v Speaker 10>approach here seems to be sort of simplicity and trying

0:46:58.480 --> 0:47:00.480
<v Speaker 10>to take out as much of that cost as they can. Right,

0:47:00.680 --> 0:47:03.279
<v Speaker 10>Microsoft's a little bit different boat technologically. You know, they're

0:47:03.320 --> 0:47:05.479
<v Speaker 10>they're talking about limitting states of matter. That's those aren't

0:47:05.480 --> 0:47:08.120
<v Speaker 10>claims you're gonna hear from from Google or Amazon for sure.

0:47:08.920 --> 0:47:11.960
<v Speaker 2>Very briefly, it seems that they're still committed to stripping

0:47:11.960 --> 0:47:13.960
<v Speaker 2>out the layers within the company though, and that's going well.

0:47:14.719 --> 0:47:17.040
<v Speaker 10>You know, it's not a crisis right like we've heard,

0:47:17.080 --> 0:47:18.680
<v Speaker 10>you know, retention issues like a lot of folks. He

0:47:18.880 --> 0:47:21.759
<v Speaker 10>people a little upset about urto but you know, for now,

0:47:21.840 --> 0:47:23.560
<v Speaker 10>no big layoffs in twenty twenty five.

0:47:23.560 --> 0:47:26.279
<v Speaker 2>Wilson that day, it's been a joy having you here

0:47:26.280 --> 0:47:28.800
<v Speaker 2>in New York as well. He's going to bid farewell

0:47:28.800 --> 0:47:30.759
<v Speaker 2>and jump on a plane to Seattle. But that does

0:47:30.800 --> 0:47:33.040
<v Speaker 2>it for this addition of Bloomberg Technology. Do not forget

0:47:33.080 --> 0:47:35.160
<v Speaker 2>to check out our podcasts. Find it on the terminal

0:47:35.160 --> 0:47:37.680
<v Speaker 2>as well as online on Apple, Spotify, and iHeart This

0:47:37.760 --> 0:47:43.840
<v Speaker 2>is Bloomberg Technology.