Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York.
Speaker 3: I'm Caroline Hyde and I'm Jackie Devalas in San Francisco.
Speaker 2: This is Bloomberg Technology coming up in video. Shares slipping
Speaker 2: despite an upbeat view on the Blackwell lineup, has US
Speaker 2: investors see a mixed outlook after two years of blowout results.
Speaker 2: Plus investors unsure of Salesforce's new AI product if it
Speaker 2: can spur faster sales growth or break down the company's earnings.
Speaker 2: And we sit down with the CEO of Amazon after
Speaker 2: the company unveiled the long awaited AI version of its
Speaker 2: Elexor assistant and just announced its new quantum computing chip.
Speaker 2: At first quick check on these markets, as we can currently,
Speaker 2: we are under pressure once again. This is a macro
Speaker 2: picture that weighs heavily on the market. Perhaps some inflatory
Speaker 2: pressures worries about Taris and Nvidiant numbers did not do
Speaker 2: enough to ease those concerns. Were down some three point
Speaker 2: seven percent. Looks still a three trillion dollar company, But
Speaker 2: here in lies the issue. Of whether or not Blackwell
Speaker 2: is ramping as fast enough to offset some of the
Speaker 2: concerns around China and tariffs and limitations on exports. Jonson
Speaker 2: Wang does a lot to talk about the new cycle
Speaker 2: of scaling laws that come, of course from reasoning models.
Speaker 2: We move on to some other individual names that we're
Speaker 2: going to be diving into across the board. Salesforce under
Speaker 2: pressure off by two percent. Will discuss the earnings a
Speaker 2: little bit later. Agent Force not bringing in the revenue
Speaker 2: as quickly has had been anticipated, And let's just finish
Speaker 2: on the all important Amazon currently trading as we see
Speaker 2: macro pressure on tech more broadly, we're currently flat a
Speaker 2: new quantum chip and most notably, of course, the generative
Speaker 2: AI infusion into Alexa Plus, which we can delve into
Speaker 2: in the CEO in a moment, because we now want
Speaker 2: to welcome to our TV and radio audiences worldwide. Amazon's
Speaker 2: president and CEO, Andy Jesse. Great to have you on
Speaker 2: New York.
Speaker 4: Thanks for having me. It's great to be here.
Speaker 2: Back home where you grew up and you were unveiling
Speaker 2: generative AI infused Alexa Plus. How is this going to
Speaker 2: really well excite your customer base? What are you most
Speaker 2: excited for it.
Speaker 5: Well, you know, we've had Alex has been around for
Speaker 5: ten years. We have six hundred million devices in customers'
Speaker 5: homes and offices. And Alexa Plus is our next generation
Speaker 5: Alexa Personal Assistant, and she's meaningfully smarter and more capable
Speaker 5: and useful than her prior self. You can do all
Speaker 5: the things that you used to do, but every single
Speaker 5: one of those functions is better.
Speaker 4: And I can give you just an example. There are
Speaker 4: so many examples.
Speaker 5: But you know, if you have smart home controls with
Speaker 5: Alexa now, you can say, Alexa, I have guests coming
Speaker 5: over at seven pm?
Speaker 4: Could you raise the drapes, could you raise.
Speaker 5: The temperature by five degrees, turn on the porch lights
Speaker 5: and the driveway lights, and put on Melo dinner music in.
Speaker 4: The dining room.
Speaker 2: And music you're not a guy. May I choose shop.
Speaker 5: Fighters, but most people will choose Melo dining music. But
Speaker 5: you can do that all verbally and simply using conversational
Speaker 5: language like that.
Speaker 4: You don't need a nap. It just happens.
Speaker 5: And so Alexi Plus, with what we've just announced and
Speaker 5: what we're launching, it really is. There have been a
Speaker 5: lot of chatbots around that are good at answering questions,
Speaker 5: but they don't take actions. Alexi plus is really Alexa
Speaker 5: is going to be the first one that not only
Speaker 5: is highly intelligent to answer various questions, but she can
Speaker 5: do so many things for you. She can play music
Speaker 5: and play video, and control your smart home and make
Speaker 5: reservations for you and hire people to fix your oven.
Speaker 4: I mean, it really is the first.
Speaker 5: Big, large scale practical use of gender of AI. The
Speaker 5: consumers are going to be able to see and use naturally.
Speaker 2: I can see how you're going to obsess over it,
Speaker 2: whether it's ordering the latest buffalo in New York and
Speaker 2: seeing where the best space is to do that. But
Speaker 2: how are your stakeholders of shareholder based going to obsess
Speaker 2: about this about gender to AI in Alexa plus. How
Speaker 2: is that adding value for them?
Speaker 4: Well?
Speaker 5: You know, I think if you think about what Alexa
Speaker 5: allows customers to do, it makes shopping more easy because
Speaker 5: it's so much more intuitive now to buy products. It
Speaker 5: makes enjoying music easier, It makes enjoying video and streaming
Speaker 5: media better. It allows you to control your smart home
Speaker 5: in a different way. So every single one of our
Speaker 5: consumer customer experiences gets better with Alexa Plus. And then
Speaker 5: you know, of course Alexa has its own business model.
Speaker 5: We have a brand new lineup of devices that are
Speaker 5: coming in the fall. I think that are beautiful. I
Speaker 5: think people are going to really like we have opportunities
Speaker 5: to service new products and advertising in various interfaces like
Speaker 5: our mobile and our desktop interface that's coming in Alexa.
Speaker 5: And then we have subscriptions, and you know, so I
Speaker 5: think there's a sustainable business model there as well.
Speaker 2: Talk to me about the subscriptions because you're getting it free.
Speaker 2: If you've got Prime, I get a lot with Prime.
Speaker 2: Now are you able to increase the prices there?
Speaker 4: Do you think of Prime?
Speaker 5: Well, Prime is an incredible value if you think about
Speaker 5: getting free shipping on three hundred million plus items. You know,
Speaker 5: when we launch Prime, it is free shipping on about
Speaker 5: a million items, to say, it's three hundred million items,
Speaker 5: and most of the time you're getting your products now
Speaker 5: inside of a day. And so you know, between that
Speaker 5: and what you get with Prime Video and Prime Music
Speaker 5: and the grocery subscription, and you know our unique selling
Speaker 5: events Primes and incredible values you could increase to add
Speaker 5: on top of it Alexa Plus.
Speaker 4: You know, it's just great value. So what do they
Speaker 4: plan right now?
Speaker 5: But it's I do think prime is unusual value and
Speaker 5: it's why people use it so expansively.
Speaker 2: And to increase that use has been this invention, this
Speaker 2: innovation of generative AI, and that costs money. And you've
Speaker 2: actually just took to the stage yesterday to say, out
Speaker 2: of all companies, you are spending the most on AI.
Speaker 2: How much are you spending on AI?
Speaker 5: Well, you know, I think we don't disclose the exact amount,
Speaker 5: but you know we you know, we're spending a pretty
Speaker 5: significant amount of cappax, and the allion's share of it
Speaker 5: is on generative AI. We've said in our AWS business,
Speaker 5: even though general AI for US is a many billion
Speaker 5: dollar a year business and growing triple digit percentages year
Speaker 5: over year, that if we hadn't even more capacity, we
Speaker 5: could use.
Speaker 4: It to monetize it.
Speaker 5: And we have this really interesting and very fortunate flywheel
Speaker 5: and AI inside of Amazon, which is if your mission
Speaker 5: is to make customers' lives easier and better every day,
Speaker 5: which it is for.
Speaker 4: Us, and if you believe that.
Speaker 5: All the customer experiences we know of today are going
Speaker 5: to be reinvented through generative AI, which we also believe
Speaker 5: you believe those two things, you're going to be building
Speaker 5: a lot of genera AVEAI apps. If you build a
Speaker 5: lot of general of AI app By the way, other
Speaker 5: companies are too on top of AWS, which is the
Speaker 5: leading technology infrastructure platform.
Speaker 4: So if there are a lot of AI apps being.
Speaker 5: Built on top of you, you can't help but get
Speaker 5: a lot of feedback from people on how they want
Speaker 5: those building blocks that create gender AI to be better.
Speaker 5: And if you're willing to invest in those building blocks,
Speaker 5: which we are, as you know, with our own chips
Speaker 5: with Trainium and with our own frontier.
Speaker 4: Model with Amazon Nova and Model.
Speaker 5: Building Services and Sage Maker AI and better Rock, if
Speaker 5: you're willing to invest in those building blocks and you're
Speaker 5: getting a lot of feedback, they get better much more quickly,
Speaker 5: which can't help them make it easier and quicker for
Speaker 5: people to build gender AI applications, which means you get
Speaker 5: more running on the platform. So that flywheel is very
Speaker 5: unique for Amazon.
Speaker 2: The line share though you did say basically one hundred
Speaker 2: billion dollar run rate for CAPEX expenditure, can you give
Speaker 2: us even like a percentage ratedown of how much that
Speaker 2: goes to distribution logistics and how much goes to AI?
Speaker 5: Well, line shares, you know, you tell you boast of it,
Speaker 5: you know most of it. You know the lions share
Speaker 5: is more than fifty percent?
Speaker 2: Yes, is it more than eighty percent?
Speaker 4: We're playing the warmer and colder game.
Speaker 2: Yes, exactly. I love a game. But taught us about
Speaker 2: that capacity that you talked about. Yeah, AWS could grow
Speaker 2: even faster if you had all the chips that you needed,
Speaker 2: all the power you needed, the motherboards you needed. How
Speaker 2: much faster could AWS go?
Speaker 4: I could.
Speaker 5: It's hard to put an exact percentage, but I do
Speaker 5: think it could be growing faster. I'm confident could be
Speaker 5: growing faster. And you know there is you know, for
Speaker 5: a long time, there still aren't as many chips as
Speaker 5: we all want.
Speaker 4: We have.
Speaker 5: We're fortunate in that we're very big partners with Nvideo,
Speaker 5: But then we also have our own custom AI silicon
Speaker 5: in Tradium.
Speaker 4: Too, which we just released to Reinvent.
Speaker 5: Which is thirty to forty percent more price performance than
Speaker 5: the GPU powered instances, which is a big deal at
Speaker 5: scale if you're doing gender of AI on the inference side.
Speaker 5: So we have maybe more chips than some others might
Speaker 5: have access to, but we still don't have enough, and
Speaker 5: then there just is not enough power in the world
Speaker 5: right now, and we're all working really hard on that.
Speaker 5: I expect that to relieve some the second half of
Speaker 5: this year, but right now, you know, the world can change,
Speaker 5: but right now we have just insatiable demand.
Speaker 2: We had amazing demand coming from Jensen Wong who had
Speaker 2: his numbers out yesterday and Nvidio. Was there a limitation
Speaker 2: on the in video chips in particular that pull back
Speaker 2: capacity And at what point do you think can depend
Speaker 2: even more on your own in house built chips offset
Speaker 2: any of that.
Speaker 5: Well, you know, I would say, I mean there's a
Speaker 5: lot of demand for gener Ai right now.
Speaker 4: People are very excited about it.
Speaker 5: I think that all the different providers of chips have
Speaker 5: been constrained to some extent.
Speaker 4: I think some of.
Speaker 5: The some of the new generations maybe have gone through
Speaker 5: different evolutions and when they're going to be released maybe
Speaker 5: a little later than people thought. There are some components
Speaker 5: like motherboards and things like that that we all use,
Speaker 5: that particular ones that are in shorter supply than others.
Speaker 5: So you know, I do think there's some there are
Speaker 5: some supply chain issues which I expect to get better.
Speaker 5: I do you know, people are very excited about training
Speaker 5: them too. To your question and whether we could see
Speaker 5: more demand there, and we have gone back at least
Speaker 5: a couple occasions to make more trainium too than we'd
Speaker 5: intended because we have so much demand. So I expect
Speaker 5: the will of customers for as long as I can
Speaker 5: foresee wanting to run compute on instances that have in
Speaker 5: vidio chips. But I think a lot of the demand
Speaker 5: will also be served by.
Speaker 2: Training the customers that you couldn't serve because of the
Speaker 2: limited capacity. Is it that you just had to put
Speaker 2: it back from everyone a little bit more generally or
Speaker 2: who lost out here?
Speaker 4: Do you think it's it's always a combination.
Speaker 5: I mean, there's for people that just have a very
Speaker 5: small amount of accelerators that they need, they don't usually
Speaker 5: have a problem.
Speaker 4: We have something called capacity blocks with.
Speaker 5: It's kind of like an on demand way to use
Speaker 5: accelerators and and generate e chips, and that continues to go.
Speaker 4: It's really the folks who.
Speaker 5: Have built, you know, have an idea for a new application,
Speaker 5: but they need a lot of of chips, where if
Speaker 5: we don't have the capacity, we have to you know,
Speaker 5: we have to give them what we can give them
Speaker 5: and give it to them as fast as we can
Speaker 5: and push our partners to get it in sooner. And
Speaker 5: they can't get their initiatives done as quickly as they
Speaker 5: want to if the capacity isn't there.
Speaker 2: Anthropics had all the capacity it needs. You've got on
Speaker 2: a close relationship.
Speaker 5: Yeah, we have a very close partnership with Anthropic. We
Speaker 5: have this project called Project right near with them. They're
Speaker 5: building their next model, their next version of their frontier
Speaker 5: model on top of trainingum to and our custom AI silicon.
Speaker 5: They're going to use over four hundred thousand trainum two
Speaker 5: chips and so yes, they have capacity. They're they're ramping
Speaker 5: up and we're excited about that partnership and what they're building.
Speaker 2: You mentioned the power side. How much is that something
Speaker 2: you're talking to the administration about? How much is the
Speaker 2: administration supportive of the buildout that you need to do.
Speaker 5: We have been talking to administration, you know, multiple administrations
Speaker 5: in this country over the years, as well as in
Speaker 5: other countries as well. And I think the power shore
Speaker 5: is really knuck up on people, you know, really right
Speaker 5: after the pandemic. And I would say that the current
Speaker 5: administration is very receptive to it. They understand the constraints
Speaker 5: it's having on the economy right now and are convicted
Speaker 5: about solving it.
Speaker 2: What about the restrictions around chips? And what's interesting is
Speaker 2: Microsoft just called on the administration today to say, this
Speaker 2: limitation on chip access for some of our close allies
Speaker 2: around the world is going to limit our global business.
Speaker 2: You are a global business. Is that something you're worried about?
Speaker 4: Hey, we are? You know?
Speaker 5: I think I think that you're really talking about that
Speaker 5: AI Diffusion Act. I think, and I'm going to be
Speaker 5: curious to see where that goes. I mean, it was
Speaker 5: enacted pretty quickly at the very end of the last administration.
Speaker 5: I don't know how this administration feels about it, but
Speaker 5: I would say that we share the concern that it
Speaker 5: has limitations on certain countries who are natural allies of
Speaker 5: the US who just to be able to do their business,
Speaker 5: and those companies to be able to get done what
Speaker 5: they want to get done on top of these technology
Speaker 5: infrastructure platforms like AWS, they're going to need more chips,
Speaker 5: and so I think if we don't do it, we're
Speaker 5: going to basically give up that business and those relationships.
Speaker 5: To other countries who can provide those chips, and I
Speaker 5: think we're better off being partners with them.
Speaker 2: Is it a risk to AWS, It's not.
Speaker 4: So much risk.
Speaker 5: I mean, I mean it had it, you know, in
Speaker 5: the scheme of things. It's not a big swinger. But
Speaker 5: I also think that there are so many countries who
Speaker 5: are in the early stages of their economic development who
Speaker 5: both really need access to the most cutting edge sophisticated
Speaker 5: technology to build the right customer experiences. And that could
Speaker 5: be big geographic markets for companies like ours and lots
Speaker 5: of other technology companies where I think it would be
Speaker 5: a shame to limit them and to limit the companies.
Speaker 2: Did the AI diffusion rules that was born in very
Speaker 2: swiftly by the Biden administration. All of this is in
Speaker 2: the context of US versus China and not wanting to
Speaker 2: get the most sophisticated equipment and chip and technology into China.
Speaker 2: What rate for us for a moment the administration and
Speaker 2: whether it's been positive or negative for your business when
Speaker 2: it comes to China Dominimus, for example, the fact that
Speaker 2: Chinese competitors, if we call them nat Sheian and the like,
Speaker 2: it can have to pay more to get goods into
Speaker 2: the country. Does that help or hinder you?
Speaker 5: Well, you know, I would say, you know, on Deminimus specifically,
Speaker 5: you know, we have a certain number of items that
Speaker 5: are shipped in that way as well, for things like Hall,
Speaker 5: which is our new low price offering. We maybe have
Speaker 5: less of it than some other companies, like the ones
Speaker 5: that you mentioned, but I think it's early in this administration.
Speaker 5: But what I would say is that it is encouraging
Speaker 5: to us that we have an administration that wants to
Speaker 5: hear from business. I would say that, you know, we've
Speaker 5: been a business through six administrations. Every single A lot
Speaker 5: of them are primary for focuses to take care of customers.
Speaker 5: But we try to build a productive relationship with the
Speaker 5: administration because we want to help the country. And I
Speaker 5: would say that some administrations are more receptive to it
Speaker 5: than others. But this administration cares about what business thinks.
Speaker 5: And I've always been surprised that it isn't obvious that
Speaker 5: the best economic results for a country are going to
Speaker 5: be when the public and the private sector collaborate. And
Speaker 5: you know, I don't expect the government to kout out
Speaker 5: to what companies want, but they should get their feedback
Speaker 5: and their input because they're going to make policies better
Speaker 5: together if they collaborate. And I'm encouraged early on that
Speaker 5: this administration wants to talk to businesses.
Speaker 2: Are you taking calls passingly?
Speaker 5: You know, I take calls. We talked to you know,
Speaker 5: the same thing with all the administrations. We talk to
Speaker 5: people in the administration. We share what's working for us,
Speaker 5: what's not working for us, concerns that we have. As
Speaker 5: I said, some administrations care more about our feedback than.
Speaker 2: Others about yours.
Speaker 4: Have you spoken to I've spoken to the president.
Speaker 5: Look, as I said, this administration has been pretty busy
Speaker 5: the first month, and when I am encouraged that they
Speaker 5: are having conversations with businesses and they do care about
Speaker 5: our feedback. And we'll see what happens. But I you know,
Speaker 5: it starts with a dialogue. You have to have a
Speaker 5: dialogue to have any kind of relationship.
Speaker 2: And they care about AI infrastructure. Just take stargate. Are
Speaker 2: we going to hear more from you on how much
Speaker 2: you're investing here in the United States on the AI
Speaker 2: infrastructure build out as well?
Speaker 4: Well?
Speaker 5: You know, as we talked about earlier, we said it
Speaker 5: was you know, directionally right in terms of the run
Speaker 5: rate on our capex. But you know, we're spending a
Speaker 5: lot on AI infrastructure, and the lion's share of it
Speaker 5: is not just on AI, but also in this country
Speaker 5: in the US. We spend elsewhere because we have a
Speaker 5: global business. We have customers everywhere. We have customers and
Speaker 5: you know, a couple hundred countries, but we have a
Speaker 5: pretty substantial investment that I don't expect to to attenuate soon.
Speaker 2: Only we could get a number. I'm interested in something
Speaker 2: that perhaps is going to feel a more sensitive topic,
Speaker 2: and it comes around perhaps some words that were missing
Speaker 2: in your annual report this year, which were diversity and inclusion.
Speaker 2: I put this in the context of the administration as
Speaker 2: it stands, because I know that Amazon strives to be
Speaker 2: the Earth's best employer, and I'm just wondering how your
Speaker 2: employees react to perhaps the lack of certain words now involved,
Speaker 2: and whether or not programs might be forced to change
Speaker 2: or not.
Speaker 4: Yeah.
Speaker 5: Well, what I would tell you, just at a high level,
Speaker 5: if you serve as many customers as we do, in
Speaker 5: as many diverse groups as we do, and we intend
Speaker 5: to moving forward, you have to have a diverse team
Speaker 5: to be able to build products that work for everybody,
Speaker 5: and that has always been our intention.
Speaker 4: It continues to be our intention.
Speaker 5: I think that you know, there were so many programs
Speaker 5: that we launched and other companies launched in the pandemic,
Speaker 5: and as you probably have seen over the last three years,
Speaker 5: we've gone through very thoroughly every single one of our
Speaker 5: business areas, and the programs that we had conviction about.
Speaker 4: We doubled down on, and the programs that we don't have.
Speaker 5: Conviction about, we streamline and we stopped doing. And so
Speaker 5: we did the same thing and looking at all of
Speaker 5: our programs on diversity, and you know, we have some
Speaker 5: programs that we have doubled down on. A good example
Speaker 5: is our Career Choice inside our Fulfillment Network our Fulfillment Center,
Speaker 5: teammates are able to get an advanced education for free
Speaker 5: on us to advance their career and their own development.
Speaker 5: And that has been very, very successful and very meaningful,
Speaker 5: and so we doubled down our program like that.
Speaker 4: There are other programs.
Speaker 5: That really just haven't been that successful and haven't moved
Speaker 5: the needle much, and those we just moved away from.
Speaker 5: But we have a diverse group we're trying to continue
Speaker 5: to build out a diverse group and that won't change.
Speaker 2: And you can't can still use that word ultimately not
Speaker 2: having to reframe it.
Speaker 4: That is.
Speaker 5: I mean, look, you can call lots of people, call
Speaker 5: lots of different things, but we have a giant customer
Speaker 5: base of every imaginable group of people where we want
Speaker 5: builders who can build for them.
Speaker 2: Culture is key. Yeah, and you just talked about how
Speaker 2: you're doing mores less. It's always a focus on frugality.
Speaker 2: That's in your very principles. That's something you've been doing
Speaker 2: at the employee base as well. You wrote out made
Speaker 2: it very clear that they were going to be reducing layers.
Speaker 2: How is that going?
Speaker 4: Yeah, it's gone well.
Speaker 5: You know, I look, if you have a company where
Speaker 5: the culture is an important ingredient in your success, which
Speaker 5: has absolutely been true for Amazon, it's not your birth
Speaker 5: rate to keep having a strong culture, you know, especially
Speaker 5: as you grow the number of people, the number of
Speaker 5: businesses you're in, the geographies that you're in, and so
Speaker 5: you have to work at it all the time. And
Speaker 5: for us, you know, there were two areas when we
Speaker 5: looked at it as a leadership team last year that
Speaker 5: we wanted to strengthen. One was we have always fired
Speaker 5: really strong owners, smart ambitious, strong owners who get to
Speaker 5: own the allion's share of In this case, you know,
Speaker 5: I would say, you know ninety plus percent of the decisions,
Speaker 5: and they.
Speaker 4: You know, as you add a.
Speaker 5: Lot of people, you end up with a lot of
Speaker 5: middle managers. And those middle managers, all well intended, want
Speaker 5: to put their fingerprint on everything, So you end up
Speaker 5: with these people being in the pre meeting for the
Speaker 5: pre meeting, for the pre meeting for the decision meeting,
Speaker 5: and not always making recommendations and owning things.
Speaker 4: The way we want that type of ownership.
Speaker 5: So we took a goal collectively to increase the ratio
Speaker 5: of individual contributors to managers by over fifteen percent as
Speaker 5: a company by the end of this quarter. We've made
Speaker 5: very good progress in that we've beat that already and
Speaker 5: it's going to allow us for the people that are
Speaker 5: doing the work, they're going to have more ownership and they're.
Speaker 4: Going to be able to move more quickly.
Speaker 5: And then I think the other thing we saw was
Speaker 5: that if you're a culture that invents a lot and
Speaker 5: collaborates a lot like we do, if you don't have
Speaker 5: people in the office together doing that invention, it's just
Speaker 5: meaningfully worse. And you know, you don't invent the same way,
Speaker 5: you don't collaborate the same way, you don't connect with
Speaker 5: each other the same way, you.
Speaker 4: Don't learn the culture the same way.
Speaker 5: And so having people back in the office together more frequently,
Speaker 5: we felt very strong.
Speaker 4: We bet it's going to be better for customers in
Speaker 4: the business.
Speaker 2: Let's talk about that invention and that collaboration. We've got
Speaker 2: a new quantum chip us alot love the name. What
Speaker 2: does that mean for you to have this more efficient
Speaker 2: chip at this exact moment. Will we start seeing it
Speaker 2: be practically useful soon?
Speaker 5: Welltum quantum computing is very high potential. It has the
Speaker 5: chance to solve some very computationally intense problems, and I
Speaker 5: still think it's realistically a few years away from having
Speaker 5: a real shot at solving those problems. But you have
Speaker 5: to solve a bunch of these challenges that relate to
Speaker 5: quantum computing along the way, and one of them really
Speaker 5: is around error correction on the cubits and that's what
Speaker 5: Osilla does. It's a very unique inventive way to do
Speaker 5: error correction with CUBIS that makes a meaningful difference, and
Speaker 5: we're excited about that milestone. You can't get to something
Speaker 5: that has real impact unless you get those milestones done
Speaker 5: along the way, and you invent along the way.
Speaker 4: And it's just another example of invention.
Speaker 2: I feel the learning of how generative AI suddenly became
Speaker 2: not just in the business parlay, but suddenly everyone was
Speaker 2: discussing it. I think people are aware quantum could do
Speaker 2: the same thing. So when you hear people debating between
Speaker 2: two decades or five years, where do you sit on
Speaker 2: the grounder scope of that?
Speaker 4: Gosh, you know, I don't know for sure.
Speaker 5: You know, I would say I'm hopeful that it's more
Speaker 5: in the five ish year range than it is the
Speaker 5: twenty year range. You know, all these things that are
Speaker 5: successful are seven, ten, twenty year overnight successes. You know,
Speaker 5: it wasn't like you know, if you look at gener
Speaker 5: of AI, it's just kind of another evolution of AI.
Speaker 5: But we've been working on AI for fifty some odd years.
Speaker 5: I mean, like just boom, it happened, and it really
Speaker 5: shocked us when it actually was more accessible and worked.
Speaker 4: And I think the same thing.
Speaker 5: Could happen with quantum computing, which is you know, takes
Speaker 5: a long time, takes a long time, takes a long
Speaker 5: and then all of a sudden, it's functional and solves
Speaker 5: problems that you couldn't solve easily or cost effectively before.
Speaker 5: And it just feels like it happened overnight. But quantum
Speaker 5: computing we've been working on now for ten post years.
Speaker 2: And then the euphoria comes, and then people try to
Speaker 2: make head or tail of how long that eu floria lasts.
Speaker 2: Going back to the investment that you make, and particularly
Speaker 2: in generous AI, do you think it's going to be
Speaker 2: peak year for generative AI in terms of that investment
Speaker 2: that Amazon makes, I don't know.
Speaker 4: You know, it's funny.
Speaker 5: I have this feeling that you're going to end up
Speaker 5: with some people that feel disillusioned about gender AI because
Speaker 5: the investment or.
Speaker 4: You getting the commensurate return. It's still very early.
Speaker 5: You have so many companies that are really doing pilots
Speaker 5: right now their gender of AI applications, and you already.
Speaker 4: See a little bit of it.
Speaker 5: But I think that the smart companies are going to
Speaker 5: figure out which are the initiatives that can really change
Speaker 5: their customer experience and their businesses and keep investing in
Speaker 5: general AI and the slower companies are going to wait
Speaker 5: to see if it's safe to go outside, and they'll
Speaker 5: be behind by two or three years, maybe more because
Speaker 5: the reality is even more soll than software development, general
Speaker 5: of AI is very iterative. It's not on software development.
Speaker 5: You can get on a whiteboard with a team of
Speaker 5: architects and design something and maybe it doesn't work exactly
Speaker 5: as you design it, but largely you know, whereas in
Speaker 5: general of AI, the models they get better at kind
Speaker 5: of disproportionate rates, sometimes scaling low.
Speaker 2: Have We've got a new scaling law Stu.
Speaker 5: I mean, I think that a lot of times when
Speaker 5: you're building models and the model gets so much better
Speaker 5: and you talk to the scientists and the team, they
Speaker 5: just can't believe how much better it got because the
Speaker 5: model is learning itself. And so I think that if
Speaker 5: you actually aren't investing in general AI, you're going to
Speaker 5: be behind by even the amount of time that you weighted,
Speaker 5: because there are so many lessons you get from iterating
Speaker 5: and building applications.
Speaker 2: Today, and you want to be the supermarket of AI
Speaker 2: feels like agnostic to the models, as it is with
Speaker 2: Amazon alexiplus.
Speaker 5: Well, you know, look, the truth is what we care
Speaker 5: most about in all our businesses, but as it relates
Speaker 5: to a WS and AI, we want our customers to
Speaker 5: be able to change their customer experiences and improve their
Speaker 5: businesses so they can last over a long period time successfully.
Speaker 5: And if we do right by our customers and take
Speaker 5: the long term approach we do.
Speaker 4: And they're able to run their.
Speaker 5: Applications successfully on top of our technology infrastructure services, then
Speaker 5: they're successful and we ride along with them. And so
Speaker 5: you know, we in all these areas, we have services
Speaker 5: we build ourselves. In the models area, we have Amazon Nova,
Speaker 5: which people are really excited about because it's got comparable
Speaker 5: intelligence to the leading models in the world, but it's
Speaker 5: meaningfully less expensive and lower latency.
Speaker 4: But if customers prefer to run.
Speaker 5: Other models, we have huge partnership with Anthropic and Lama
Speaker 5: and Deep Mistraw Deep Seeg. I mean, we have the
Speaker 5: largest collection of leading foundation models in the world and
Speaker 5: if customers are having success with those, then we're happy.
Speaker 5: And the truth is, if you build a lot of
Speaker 5: general of AI applications, people don't realize this. You use
Speaker 5: multiple model types often in the same application. Even Alexa Plus,
Speaker 5: as we talked about using multiple foundation models, and so
Speaker 5: we want people to use the right model for their applications,
Speaker 5: and then we make it easy for them to switch
Speaker 5: between them and run it easily and successfully in AWS.
Speaker 2: Andy Jesse, perfect place to leave it. Start with alexaplus
Speaker 2: and non Alexa plus and all the generation and generative
Speaker 2: AI that comes with it. We thank you so much,
Speaker 2: thanks for having me, Andy Jesse, President and CEO of Amazon.
Speaker 2: We're going to be right back talking more around what's
Speaker 2: happening with then. As that one hundred under pressure is
Speaker 2: in video sells us post its numbers, what Solace did
Speaker 2: in video give to its in besta base when it
Speaker 2: comes to generative AI adoption. Welcome back to mine mag techn.
Speaker 3: On a jam Cautline hid to New York and I'm
Speaker 3: Jackie Devllas in San Francisco.
Speaker 2: Let's get a check on the markets.
Speaker 3: The Nasdaq one hundred is down on the day about
Speaker 3: five tenths of one percent, reflecting this tepid sentiment coming
Speaker 3: out of earnings, and that's after results in some cloud
Speaker 3: and chip players are leaving more questions than answers about
Speaker 3: the longevity of the AI rally. We're also looking at Microsoft,
Speaker 3: also down on the day about four tenths of one percent.
Speaker 3: The company today urged the Trump administration to rethink regulations
Speaker 3: that would cap the export of AI chips to what
Speaker 3: it believes are vital markets. Microsoft argued those chip curbs
Speaker 3: could for countries to turn to China for advanced chips. Broadly,
Speaker 3: Microsoft is following a similar change as other tech stocks
Speaker 3: that are showing the nees about whether AIS boom is
Speaker 3: actually losing steam. Perhaps the most important barometer of that
Speaker 3: is in video. Shares are also down today, reflecting these
Speaker 3: concerns about profit margins that eclipsed a sales beat and
Speaker 3: upbeat revenue forecast. Bloomberg's Ian King joins US now to
Speaker 3: break down some of these results. I really want to
Speaker 3: home in on what was really going on that probably
Speaker 3: left investors feeling weary. It's newer line of chips Blackwell,
Speaker 3: they're rolling out, but at what cost?
Speaker 6: Yeah, I mean this is a continuation of what we
Speaker 6: saw three months ago, where they're saying, look, everybody wants
Speaker 6: these chips. We want to get them out as fast
Speaker 6: as you possibly can. Guess what, It's more complicated. The
Speaker 6: computers that are based on are way more complicated.
Speaker 4: It's going to cost us.
Speaker 6: More, but don't worry about it. Once we get to
Speaker 6: full production everything, we'll come back on our margins or
Speaker 6: go back cope. But at the same time, the margins
Speaker 6: are still above seventy percent.
Speaker 2: I mean, people would weep to have more than seventy
Speaker 2: percent margins. And then we hear, of course from trying
Speaker 2: to signal that they'll get back to mid seventy percent
Speaker 2: by the end of the year. But when we've got
Speaker 2: the market still skating on thin ice here in was
Speaker 2: enough said about China? Was enough said about potential hits
Speaker 2: to their future demand from competitors such as Amazon for example.
Speaker 6: Yeah, I mean the world as as you're indicating the words,
Speaker 6: several areas of concern coming into this, and the company
Speaker 6: had clearly done their homework. They pretty much answered everything
Speaker 6: in order and went at it pretty hard with statistics
Speaker 6: and assertions. But at the same I mean underlying this, though,
Speaker 6: is that this is a company that investors have got
Speaker 6: used to actually having every innings be a blowout, and
Speaker 6: this wasn't a blowout. This was just regular common garden brilliant. Right.
Speaker 2: You said almost growth in revenue, Yeah, I mean.
Speaker 6: We you know, one hundred and twenty our billion dollar company.
Speaker 6: Two years ago, we were in the twenties.
Speaker 4: Right in terms of revenue.
Speaker 6: Margins are up you know, ten fifteen basis points from
Speaker 6: where they were a couple of years ago.
Speaker 4: So we're not suffering here.
Speaker 6: But but we're just not surprising people on the upside
Speaker 6: in the way that.
Speaker 4: We used to.
Speaker 3: And let's talk about what took in videos wind out
Speaker 3: of its sales earlier this month. Last month when Deep
Speaker 3: secretly came onto the scene, sparked a lot of concerns
Speaker 3: that we might not need as many chips as we
Speaker 3: thought we might.
Speaker 2: What did the company have to say about that?
Speaker 4: Yeah, I mean a.
Speaker 6: Lot of what they had to say was clearly designed
Speaker 6: to deal with that concern. And Jensen Wang, the CEO,
Speaker 6: what he was saying is like, look, this is a
Speaker 6: new way of doing things, but don't worry. Our chips
Speaker 6: are really good at that as well. And guess what,
Speaker 6: in the end, this is going to speed everything up.
Speaker 6: Everybody's going to be flowing into this way of doing things.
Speaker 6: This is good for everybody. And he gave a lot
Speaker 6: of technical explanations that were obviously self serving but at
Speaker 6: the same time logical and reason that that appeared to
Speaker 6: sort of slay that dragon. But again, you know, the
Speaker 6: numbers are what people really focus on.
Speaker 2: What's so interesting is at this time we're wondering about
Speaker 2: what the administration means for Nvideo, for its access to
Speaker 2: selling chips to China but also to allies. And we've
Speaker 2: got this push from Microsoft today Brad Smith calling on
Speaker 2: the administration to basically avoid this focus on AI diffusion
Speaker 2: rule as was in Poe. What do you think Jensen's
Speaker 2: reaction would be to Microsoft letter.
Speaker 6: I mean you could argue that, you know, in Video
Speaker 6: kind of the precursor to this sentiment, and you got
Speaker 6: a little bit of that from Aws as well. I mean,
Speaker 6: the fundamental argument here is like if you hobble, if
Speaker 6: your efforts to hobble China are totally successful, guess what
Speaker 6: it might backfire. It might hobble us, it might hurt
Speaker 6: our research and development budgets, it might hurt our end
Speaker 6: market access, and eventually China is going to be so
Speaker 6: motivated that they're going to get there themselves and we'll
Speaker 6: have no play there and we'll have created a monster
Speaker 6: that we can't control. That's the fundamental argument that's been
Speaker 6: given in different ways and Invidia has been definitely one
Speaker 6: of the ones that's been voicing that m Magsie and
Speaker 6: King brilliant.
Speaker 2: To wrap it up with you, thank you. Let's bring
Speaker 2: in the invested tate now. Ioka, Yoshioka is with US
Speaker 2: portfolio manager at Wealth Enhancement Group. Let's just go back
Speaker 2: to the fundamentals of Nvidia's business right now. What did
Speaker 2: you make of the numbers? Was they're not enough there
Speaker 2: to excite you at this three trillion evaluation?
Speaker 7: Hi, Caroline, you know, we think we thought the results
Speaker 7: were actually pretty much in line with what we were
Speaker 7: expecting and maybe slightly better. You know, it's just that
Speaker 7: in this environment where there's so much uncertainty in the markets,
Speaker 7: you know, people are just a little skittish about just
Speaker 7: waiting and being a little bit more patient to see
Speaker 7: some of these numbers come through. I mean, they did
Speaker 7: talk about how margins will expand in the second half
Speaker 7: once Blackwell becomes a greater portion of the mix, but
Speaker 7: you know, people are a little bit impatient in this environment.
Speaker 2: Ayaka, what do you make.
Speaker 3: Of the company already starting to talk about its next
Speaker 3: model of AI chips, the rubenschip. I mean, it just
Speaker 3: seems like a lot of these newer models are just
Speaker 3: coming out really fast. Do you think that's going to
Speaker 3: be a longer term drag on margins or even risk
Speaker 3: exhausting customers.
Speaker 7: I think so, And I think we see this just
Speaker 7: in the sort of end use case and how quickly
Speaker 7: we can adopt AI into all of our everyday lives.
Speaker 7: I mean, Amazon's a perfect example of how they're trying
Speaker 7: to incorporate more agentic AI into our lives through Alexa Plus.
Speaker 7: But know, we have to see this in more areas,
Speaker 7: and consumer behavior is really slow to change when it
Speaker 7: comes to adopting new technology, and so we've got to
Speaker 7: really see the pace of consumer demand and enterprise demand
Speaker 7: really match the build out of AI. But the structure,
Speaker 7: the underlying infrastructure of AI is going to take a
Speaker 7: lot more compute power, as jensen As has mentioned, and
Speaker 7: so that's going to continue, I think. In order to
Speaker 7: just set the stage, what did you make of.
Speaker 3: The company's comments around inferencing and its ability to really
Speaker 3: take advantage of this next frontier where a lot of
Speaker 3: these new reasoning models are going to depend on this
Speaker 3: type of training. Are you confident that the company is
Speaker 3: poised to really benefit from that, you.
Speaker 7: Know, I think I won't doubt Jensen and you know,
Speaker 7: the technological advances that he's been able to create at Nvidia,
Speaker 7: and I do believe that just the overall you know,
Speaker 7: inferencing market and just all the reasoning, just the amount
Speaker 7: of compute that they talked about, you know, one hundred
Speaker 7: times more compute power needed in order to do all
Speaker 7: the reasoning behind the scenes. I do believe that that
Speaker 7: is probably the right direction. I know there was a
Speaker 7: lot of concern when deep seat came out, but you know,
Speaker 7: I think this is just a new level and another
Speaker 7: area that AI is going to continue to proliferate, you know,
Speaker 7: in more use cases for AI.
Speaker 2: There are these limitations though, I think and agreed Jensen
Speaker 2: Wang did a lot to talk around these new scaling
Speaker 2: laws that come with the latest and greatest models and reasoning.
Speaker 2: He didn't really talk to those some of the geopolitical
Speaker 2: limitations right now, and when you've got Microsoft coming out
Speaker 2: brad with asking the government to basically do away with
Speaker 2: Biden's AI diffusion rule to allow companies to sell globally
Speaker 2: with ease, is that something that you're thinking about absolutely?
Speaker 7: I think even you know, when you go back to
Speaker 7: when deep seeks you know news came out and really
Speaker 7: impacted the whole sector. It really goes to show the
Speaker 7: arms race or the AI race that's in hand at
Speaker 7: the moment. And you know, it is critical and really
Speaker 7: important for the US to be you know, in that
Speaker 7: pole position. And I think that's what's going on here,
Speaker 7: and we'd like to get as many you know, friendly
Speaker 7: faces on board with how we the United States and
Speaker 7: Nvidia and other chip companies are deploying.
Speaker 2: AI okay pole positions. Then which companies are in the
Speaker 2: pole positions for you right now? Which ones do you
Speaker 2: want to be adding to at this moment?
Speaker 4: Sure?
Speaker 7: So, I mean I think you know, from a tech standpoint,
Speaker 7: you still want to have some of the big tech names.
Speaker 7: You know, in Vidia, we're not selling any Nvidia at
Speaker 7: the moment. We know it's been range bound for a while.
Speaker 7: We do believe in the long term it will continue
Speaker 7: to grow. Broad prom is another name in Microsoft as well.
Speaker 7: I mean, Microsoft is you know, at the forefront here
Speaker 7: pushing for you know, additional globalization of their technology and
Speaker 7: allowing for their technology to be more ubiquitous so that
Speaker 7: they can again you know, everybody wants to be in
Speaker 7: that cole position, and I think we want to put
Speaker 7: America first.
Speaker 3: That's a Yako Yoshioka from the Wealth Enhancement Group things
Speaker 3: for joining.
Speaker 2: US shares a salesforce under pressure. The company telling investors
Speaker 2: on its earning school yesterday that it expects its AI
Speaker 2: product Agent Fools to give just a modest contribution to
Speaker 2: twenty twenty six revenue. That's unpacket all with Alex Okin
Speaker 2: of Wolf Research, Alex, look, the full cost was what
Speaker 2: red people here? Forty point five to forty point nine
Speaker 2: billion dollars? Is Agent Force just not bring enough force
Speaker 2: quickly enough?
Speaker 8: Look, I think with new innovations like Agent Force, particularly
Speaker 8: when you're dealing with very large, complicated customers, a lot
Speaker 8: of times in regulated industries, you want to be slow.
Speaker 8: You want to be methodical, you want to really be
Speaker 8: in there and delivering value, but you want to be conservative.
Speaker 8: And I think that's that's a feature, that's not a bug.
Speaker 8: And I think investors generally speaking, they've seen this movie
Speaker 8: before with the Arrival of the Cloud, where it does
Speaker 8: take time, and I think with Agent Force, we would
Speaker 8: expect it to be less than a point of contribution.
Speaker 8: A lot of times you're seeing companies start small, experiment
Speaker 8: and then have the ability to get a lot bigger.
Speaker 8: I think it's also important to remember there's a labor,
Speaker 8: there's a there's a labor, not cost, but there's a
Speaker 8: problem here where you want to be very careful and
Speaker 8: nuanced in how you treat this innovation because it can
Speaker 8: be disruptive to culture, and so you want to really
Speaker 8: have a great sense of what's durable, what's reliable, and
Speaker 8: then what's transferable. And I think Salesforce is kind of
Speaker 8: in the mix and in the middle of really driving
Speaker 8: that massive innovation for these customers.
Speaker 2: Let's talk about Salesforce's own labor quandary, because not only
Speaker 2: they're having to get rid of some to put in
Speaker 2: more AI talent, they're also having a real change of
Speaker 2: ship in terms of the executive level. What do you
Speaker 2: make of all the changes.
Speaker 8: I think as companies get bigger and they evolve, it
Speaker 8: creates the opportunity to attract new talent with different levels
Speaker 8: of experience. I think Salesforce has done this probably better
Speaker 8: than many other companies in the past. You've seen it
Speaker 8: as they went through multiple very senior co CEOs like
Speaker 8: Keith Block, like Brett Taylor injecting just the right amount
Speaker 8: of stuff that the company needed at that time. I
Speaker 8: think with the current change, I think Robin brings a
Speaker 8: lot to the table. She really brings a lot of experience.
Speaker 8: The new COFO as they call it, where she inhabits
Speaker 8: both the COO and the CFO title. I think there's
Speaker 8: a lot of opportunity with that change. I think it's
Speaker 8: right for investors to understand that it's a little bit
Speaker 8: riskier from an execution perspective, but they've got the right
Speaker 8: set of hands on the controls to I think, get
Speaker 8: you smooth sailing.
Speaker 3: Alex Salesforce has been an evangelist for agents, and you know,
Speaker 3: this is seen widely as like the next big application
Speaker 3: that will actually justify just how much investment has gone
Speaker 3: into the space, because it seemed to be useful like
Speaker 3: things in customer service, you know, will be able to
Speaker 3: be taken over by agents in the future. Are you
Speaker 3: worried that what Salesforce said about it's demand for agent
Speaker 3: force pretends something deeper about adoption going forward.
Speaker 8: It's a great question, and I think that Salesforce is
Speaker 8: not the first company to create a moniker around generator.
Speaker 8: The utilization in the enterprise. I would say that goes
Speaker 8: to Microsoft with Copilot, and I think Salesforce has a
Speaker 8: real opportunity and they want to be very careful. They
Speaker 8: want to go slow, they want to really double down.
Speaker 2: On the successes that they're seeing.
Speaker 8: And they talked about some pretty marquee large customers Singapore Airlines,
Speaker 8: They talked about accenture. There were even examples with Open
Speaker 8: Table and Sharkeningja where those companies actually discussed agent Force
Speaker 8: on their own earnings calls. So I would view the
Speaker 8: demand is off the charts, the fact that they went
Speaker 8: from three hundred deals to three thousand deals in one quarter.
Speaker 8: But I think you have to look at this over
Speaker 8: a period of time where the amount of value that
Speaker 8: these customers will be able to realize in their own
Speaker 8: organizations and the amount that they will be willing to
Speaker 8: pay to Salesforce versus the amount they currently pay, it
Speaker 8: could be a meaningful multiple of that amount, but I
Speaker 8: think it's going to take time.
Speaker 3: Speaking of customers, Mark Benioff said that the Department of
Speaker 3: Government Efficiency DOGE has actually been using slack for some.
Speaker 2: Of its work. What did you make of that?
Speaker 8: Sounds like they have a really good collaboration platform that
Speaker 8: they acquired, and I think it part of the vision
Speaker 8: for Salesforce. Part of the vision for Agent Force is
Speaker 8: to have an ubiquitous communication platform because it has a
Speaker 8: lot of data that's very relevant in a lot of workflows,
Speaker 8: and the data model that Salesforce can effectively enrich by
Speaker 8: having those conversations available directly in the application is going
Speaker 8: to be important. So look, I look at this as
Speaker 8: these people need to have relationships with everybody, and I
Speaker 8: think that Mark talked a lot about how many administrations
Speaker 8: he's worked with the company has worked with, so I
Speaker 8: would view this as a positive for Salesforce.
Speaker 3: Thanks Alex Zukan from Wolf Research. Appreciate you coming in
Speaker 3: to unpack that for us. Turning to the entertainment sector,
Speaker 3: Warner Brothers, Discovery and Paramount both at with their earnings.
Speaker 3: Here to unpack them for us is Bloomberg's Hannah Miller. Hannah,
Speaker 3: I think was a bright spot, which is something that
Speaker 3: we haven't really heard that often when you look at
Speaker 3: some of the streaming players out there in recent months.
Speaker 3: What was driving the demand here and profits as well.
Speaker 9: Yeah, So both Warner Brothers and Paramount focused on the
Speaker 9: huge streaming gains that they had in the fourth quarter,
Speaker 9: and they were kind of, you know, trying to draw
Speaker 9: attention away from the fact that they missed on revenue
Speaker 9: estimates and you know, are still struggling with their take
Speaker 9: cable TV businesses. If you're looking at Warner Brothers with subscribers,
Speaker 9: they did a huge international push early in twenty twenty four,
Speaker 9: especially in Europe and Latin America, so that helped drive
Speaker 9: subscriber gains for them.
Speaker 2: It really was an international focus and subscribe as coming
Speaker 2: up to one hundred and seventy million with the advertising
Speaker 2: revenue really big void what then a Paramount because the
Speaker 2: Paramount plus ads were good and better than expected, but
Speaker 2: elsewhere fell Shure.
Speaker 9: Yeah, I mean, Paramount really emphasized the fact that, you know,
Speaker 9: their streaming business is growing, they are aiming to be
Speaker 9: profitable by the end of this year, and they really
Speaker 9: leaned on the that they have this wide range of content,
Speaker 9: especially shows created by Taylor Sheridan, who is of Yellowstone
Speaker 9: fame and has that hit success. So that's what they
Speaker 9: really tried to push forward in their earnings, you know,
Speaker 9: again drawing attention away from the fact that their TV
Speaker 9: businesses are not doing as well as as they would hope.
Speaker 3: And what did the company say about how it plans
Speaker 3: to sustain some of that content generation because it's really
Speaker 3: expensive to invest in and it takes time as well.
Speaker 9: Yeah, I mean, Warner Brothers really emphasize this morning that
Speaker 9: they have a diverse range of content. You know, they're
Speaker 9: pulling from sports, They're doing scripted HBO shows. The White
Speaker 9: Lotus came up. That's a big one. The Pit, a
Speaker 9: new medical show, is also something that they're really pushing forward.
Speaker 9: So they're really emphasizing the fact that they're willing to
Speaker 9: invest in creative ideas and that this is how they're
Speaker 9: gaining customers.
Speaker 2: Annamella reappreciate it, thank you. Talking of creatives YouTube style,
Speaker 2: mister Beast is seeking to raise a couple of one
Speaker 2: hundred million dollars to expound his business in a funding
Speaker 2: round that will value the company at about five billion dollars.
Speaker 2: It's all according sources. Talk still in the early stages,
Speaker 2: not yet clear who will invest. Coming up more on
Speaker 2: Amazon's Alexa plus, It's Quantum computing chip announcement and more.
Speaker 2: This is bluem Meg technology. So we kicked off this
Speaker 2: show with Amazon CEO Andy Jasse joining on artificial intelligence.
Speaker 2: And this is the company, of course, also just announced
Speaker 2: its first quantum computing chip, will significant move, joining the
Speaker 2: likes of Google and Microsoft, who also recently came out
Speaker 2: with their own quantum hardware. Let's break it all down
Speaker 2: on Bloomberg's mat day and first on the quantum chip.
Speaker 2: They really are going for like efficiency once again, it's
Speaker 2: kind of Amazon zmmo.
Speaker 10: Oh, it's totally their playbook. They were talking about how
Speaker 10: much they could reduce the overhead of building a quantum chip.
Speaker 10: They were reminding us, hey, listen, if you actually build
Speaker 10: one of these things in practice, might cost you a
Speaker 10: billion dollars. So very wus playbook to say, listen, we
Speaker 10: think we can build a cheaper mouse trap that might
Speaker 10: get more more update, Matt, how much of.
Speaker 3: This is just companies trying to plant a flag to
Speaker 3: show that they're in the to computing game. Are we
Speaker 3: actually expecting to see anything come out of this in
Speaker 3: the short term?
Speaker 10: Short term? I'm not so sure, but I think it's
Speaker 10: notable talking about a ws's announcement this week that they said,
Speaker 10: you know, a decade is maybe pretty aggressive, right, which
Speaker 10: is a lot more sober than you had Microsoft a
Speaker 10: few weeks back, saying years not decades. So there's there's
Speaker 10: definitely a lot of positioning going on right now, but
Speaker 10: you know, put abs down on more conservative sides, saying, listen,
Speaker 10: there's still a whole lot of work to do. I
Speaker 10: think the change that has happened is, you know, folks
Speaker 10: are saying it's a win, not an if, and you're
Speaker 10: hearing that really from around big tech.
Speaker 2: They're not conservative when it comes to spending. And try
Speaker 2: as I might, I tried to get Addie to spell
Speaker 2: out what Lion's share of one hundred billion dollar capex
Speaker 2: is on AI. Just take a listen to what he said.
Speaker 2: You did say, basically, one hundred billion dollar run rate
Speaker 2: for CAPEX expenditure. Can you give us even like a
Speaker 2: percentage ratedown of how much that goes to distribution logistics
Speaker 2: and how much goes to AI my shares?
Speaker 5: You know most so you've boast of it, you know
Speaker 5: most of it. You know the Lion's share is more
Speaker 5: than fifty percent?
Speaker 4: Yes?
Speaker 2: Is it more than eighty?
Speaker 4: We're playing the warmer and colder.
Speaker 2: Goo, yes, exactly. Do we need more specifics?
Speaker 4: I think we will, But he did make some news.
Speaker 10: I think Amazon's been real careful about their general They franchise.
Speaker 10: They've had multiple billions of dollars in revenue. I think
Speaker 10: Andy told you many billions. So we're parsing adjectives here,
Speaker 10: but I think they're getting a little bit moreptific and
Speaker 10: they're gonna have to as this business grows for them.
Speaker 3: Matt, what do you make of some of the competition.
Speaker 3: Of course, you know you've been looking at quantum very closely.
Speaker 3: Alexa is now really competing in that hardware space all
Speaker 3: over again. But kind of shifting back to the quantum
Speaker 3: piece for a little bit, I kind of want you
Speaker 3: to break down if there are any differences in what
Speaker 3: Jase said about how they're approaching it versus what Microsoft
Speaker 3: and some other players have said.
Speaker 10: Not particularly everybody says, you know, quantum is a really
Speaker 10: hard problem to solve. Everybody says there are so many
Speaker 10: errors inherent in quantum computing. I think again, the AWUS
Speaker 10: approach here seems to be sort of simplicity and trying
Speaker 10: to take out as much of that cost as they can. Right,
Speaker 10: Microsoft's a little bit different boat technologically. You know, they're
Speaker 10: they're talking about limitting states of matter. That's those aren't
Speaker 10: claims you're gonna hear from from Google or Amazon for sure.
Speaker 2: Very briefly, it seems that they're still committed to stripping
Speaker 2: out the layers within the company though, and that's going well.
Speaker 10: You know, it's not a crisis right like we've heard,
Speaker 10: you know, retention issues like a lot of folks. He
Speaker 10: people a little upset about urto but you know, for now,
Speaker 10: no big layoffs in twenty twenty five.
Speaker 2: Wilson that day, it's been a joy having you here
Speaker 2: in New York as well. He's going to bid farewell
Speaker 2: and jump on a plane to Seattle. But that does
Speaker 2: it for this addition of Bloomberg Technology. Do not forget
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Speaker 2: is Bloomberg Technology.