Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Lovelow.
Speaker 2: Live from New York. I'm Caroline Hyde.
Speaker 3: And I'm Mike Sheppard in San Francisco. This is Bloomberg Technology.
Speaker 4: Coming up asml fights back Deep Seak concerns and surges
Speaker 4: the most since twenty twenty as stronger chip equipment orders,
Speaker 4: Impress plus, did Deep Seek improperly use open ai data?
Speaker 4: Microsoft and open Ai investigate? We have the latest and
Speaker 4: we sit down with T Mobile CEO on the heels
Speaker 4: of the company's standout fourth quarter.
Speaker 2: But first we check in on these markets.
Speaker 4: Remember, folks, it is fed day where we get a
Speaker 4: pause that comes later today.
Speaker 2: But we're off by four tens percent.
Speaker 4: Now's that on the downside, we're being dragged down by
Speaker 4: the like some video Microsoft in the red. Let's move
Speaker 4: on and see what earnings we have coming off after
Speaker 4: the bell because it is thick and fast. Not only
Speaker 4: are we reading from deep Seek, but we've got to.
Speaker 2: Digest the real numbers.
Speaker 4: Microsoft, Meta, Tesla, Apple a little bit later, but tonight,
Speaker 4: we keep an eye on these front three and then
Speaker 4: we think about what we've already had out of the
Speaker 4: bell in Europe and is ASML the chip equipment maker
Speaker 4: managing to fight back some of those anxieties around deep
Speaker 4: seek cheap AA models? Ultimately does it matter for chips?
Speaker 4: For chip equipment ASML surging currently we see up five
Speaker 4: percent in US trading. It was up the most that's
Speaker 4: twenty twenty earlier, Mike, and this was on the back
Speaker 4: of very strong orders.
Speaker 3: And we're staying on ASML and their big earnings. Be
Speaker 3: joining us to discuss this is Bloomberg's Chan coach in Amsterdam.
Speaker 5: Chan.
Speaker 3: There were a surgeon orders in the last quarter for ASML,
Speaker 3: far more than expected. But all of that was before
Speaker 3: the deep Seek revelations. How did the CEO of ASML
Speaker 3: message this to investors today?
Speaker 6: All right?
Speaker 7: CHRISTOSML CEO doubled down on AI. Basically, he thinks Deep
Speaker 7: Seek will be good news for ASML, and his thinking
Speaker 7: is that anyone that lowers cost lowers barriers to entry,
Speaker 7: so lower cost means AI can be used in more applications.
Speaker 7: More applications mean more chips, and more chips would mean
Speaker 7: ASML can sell more machines to chip makers, and they
Speaker 7: think deep sea can lead to democratization of AI, which
Speaker 7: will then create more customers for them charm.
Speaker 3: When we talk about chips, we can't get away from geopolitics.
Speaker 3: How did some of the US restrictions on sales of
Speaker 3: sensitive equipment to China play in the results that we
Speaker 3: saw today?
Speaker 7: Will China accounted for twenty seven percent of ASML sales
Speaker 7: in the fourth quarter, which was down from nearly half
Speaker 7: of its sales in the third quarter. The company expects
Speaker 7: China sales to follow up one fifth of its total
Speaker 7: revenue this year, and they think that their sales in
Speaker 7: China are taking a hit from the prospect of more
Speaker 7: US restrictions under Donald Trump's administration, as well as a
Speaker 7: broader weakness in the chip sector.
Speaker 5: Bloomberg's John Coach, thank you so much, Caro.
Speaker 4: We booke a plenty more earnings and other socks we're
Speaker 4: watching this morning.
Speaker 2: Apple t Mobile.
Speaker 4: In particular, two companies that have been working secretly together.
Speaker 4: We understand ad support for SpaceX is Starling network in
Speaker 4: a surprise release. The tech is now being supported with
Speaker 4: an installation of the iPhone's latest software update on Monday,
Speaker 4: but more on T Mobile because.
Speaker 2: The company, of course is out with this fourth quarter.
Speaker 4: Results beating analyst expectations. The telecom providers saw continued growth
Speaker 4: in wireless subscribers and home internet customers. Get this, adding
Speaker 4: nine hundred and three thousand monthly phone customers and guiding
Speaker 4: from continued strong growth. Joining us now might see that
Speaker 4: his Tmobile CEO. And what's interesting is descend. But you said,
Speaker 4: be cautious about our fourth quarter.
Speaker 2: What changed?
Speaker 8: Well, the only thing I was pointing out back then,
Speaker 8: which maybe was misunderstood, is that it's a seasonal quarter,
Speaker 8: and you know, the last couple of weeks are important.
Speaker 8: But you know, we just are firing on all cylinders.
Speaker 8: We just finished our strongest growth year ever, and we
Speaker 8: finished it strong with a monster Q four that exceeded
Speaker 8: a lot of people's expectations.
Speaker 4: And you're guiding for postpaid net customers to be adding
Speaker 4: up to six million in twenty twenty five. That's a
Speaker 4: big ramp. Where are those customers coming to?
Speaker 8: You know, this is the strongest beginning of year guide
Speaker 8: on new subscribers we've ever given, and.
Speaker 9: It's really simple.
Speaker 8: Our consumer business is firing on all cylinders in the
Speaker 8: top one hundred markets, also smaller markets in rural areas.
Speaker 8: But now our business sector is starting to rise as well.
Speaker 8: And so you look across all the segments. People are
Speaker 8: flocking to.
Speaker 4: T Mobile, governments to New York one of them that
Speaker 4: you've added. But I'm interested that the other competitors out there,
Speaker 4: at and T Verizon they added to where are these
Speaker 4: customers coming from?
Speaker 9: Look this is I like to think about this.
Speaker 8: You know, we're the best house in a great neighborhood.
Speaker 8: I don't need for our competitors to fail in order
Speaker 8: for us to succeed. We are taking share. But also
Speaker 8: the market is vibrant and growing, and people are, you know,
Speaker 8: getting more value out of rate plans. They're buying up
Speaker 8: our rate card. You know, our average revenues per customer
Speaker 8: per month are rising, not because of rising prices, but
Speaker 8: because they're self selecting up our rate card, and that
Speaker 8: allows revenues to rise where nobody else is the loser.
Speaker 4: People need more data. They're going to need more data
Speaker 4: for Generator of AI. Is that become a choke point for.
Speaker 2: You in some way?
Speaker 8: It's going to be a way for us to showcase
Speaker 8: our differentiation you know, both Oukla and Open Signal have
Speaker 8: once again said we ran the gamut in terms of
Speaker 8: network awards and we have the.
Speaker 9: Most capacity by far.
Speaker 8: And so as the demand for our network on AI
Speaker 8: based applications starts to grow, it'll only showcase t mobiles differentiation.
Speaker 8: I think consumers will really be able to see the difference.
Speaker 4: Will consumers care about when they're out without any signal
Speaker 4: and now they're able potentially to tap in to Starlin
Speaker 4: easing team Mobile.
Speaker 8: When we first announced this partnership in twenty twenty two,
Speaker 8: it was the single most covered thing we've ever talked about.
Speaker 8: And that's saying something because our uncarrier moves are big deals.
Speaker 8: This is the biggest one because it speaks to a
Speaker 8: universal pain point in this industry. This is a big
Speaker 8: country and there are five hundred thousand square miles that
Speaker 8: none of the carriers cover. And so now there's our
Speaker 8: vision is so simple. If you can see the sky,
Speaker 8: you're connected and you don't.
Speaker 4: Have to point your phone at it anymore, which is
Speaker 4: what you had to do with an Apple previously. Why
Speaker 4: did you sort of roll it out so secretly? Why
Speaker 4: did it feel like suddenly we woke up and quietly
Speaker 4: you could get onto your T mobile iPhone device when
Speaker 4: we wouldn't have thought it already.
Speaker 8: Honestly, we've been a little self conscious than that. We
Speaker 8: announced this a long time ago, and so it's been
Speaker 8: a couple of years and we didn't want to keep
Speaker 8: crowing about something until it was ready.
Speaker 9: So we made a big.
Speaker 8: Deal out of it when we struck the partnership and
Speaker 8: we said, look, let's just stay quiet until it's time
Speaker 8: to hand people this service. About two weeks ago we
Speaker 8: quietly started letting people into our beta program. We now
Speaker 8: have thousands of users and we're about to throw the
Speaker 8: doors wide open on our beta. It's going to be
Speaker 8: a big moment and then commercial service this year.
Speaker 2: So it's performing well in beta.
Speaker 8: Absolutely, and right now the launches are happening really rapidly.
Speaker 8: So there's well over four hundred satellites. They're low Earth
Speaker 8: orbit satellites, so they're very performant. You mentioned some of
Speaker 8: the differences versus higher level satellites, and people are getting
Speaker 8: a great experience.
Speaker 6: You know.
Speaker 9: Our goal is to.
Speaker 8: Start with text messaging so that you can get your
Speaker 8: texts out regardless of where you are, but it'll very
Speaker 8: quickly move to picture messaging, MMS, data and voice.
Speaker 4: I hate to try and find any clouds when you're
Speaker 4: pointing to silver linings throughout, But when you signal that
Speaker 4: caution in December, Yes, about sort of the cyclicality, but
Speaker 4: ultimately you've had stellar growth after sellar growth. How much
Speaker 4: can you keep on ramping, keep on bringing on more consumers?
Speaker 4: How strong is the consumer sentiment out there?
Speaker 8: It's steady and consistent. I think that's what you want
Speaker 8: from us. You know, one of the things that differentiates
Speaker 8: us is we set out a set of outlooks and
Speaker 8: then we consistently meet or beat them. And what we
Speaker 8: put out today was a strong guide, but it wasn't
Speaker 8: expecting much from our business that we haven't done in
Speaker 8: the past. And so you can rely on the things
Speaker 8: that we say because we look at the trends underneath it.
Speaker 8: And you know, the bottom line is we offer a
Speaker 8: stronger network value proposition, and we offer it at a
Speaker 8: lower price, and at the end of the day, that's
Speaker 8: going to cause people across segments to continue choosing T Mobile.
Speaker 4: What is it that investors in particular a needing at
Speaker 4: this moment to hear from you? I mean you've got
Speaker 4: twenty two buys, only nine holds and only two cells.
Speaker 4: But where are you hearing the questions of caution coming
Speaker 4: from an investor base right?
Speaker 8: Well, they want to know what our next act is,
Speaker 8: you know, And so that's a big piece of what
Speaker 8: we focused on in our Capital Markets day last fall.
Speaker 8: So talk about what comes be on the next couple
Speaker 8: of years, and you know, AI is a big piece
Speaker 8: of it. We're transforming our business operations to be able
Speaker 8: to think about how do we serve customers in the
Speaker 8: era of AI in new ways? And this industry has
Speaker 8: always treated everybody exactly the same, and it's so analogue.
Speaker 8: You go in and spend a Saturday of your life
Speaker 8: in one of our retail stores trying to upgrade your
Speaker 8: family to new phones.
Speaker 9: We know we can do.
Speaker 8: Better, and our Tea Life app that's now in the
Speaker 8: hands of fifty million people can give you an experience
Speaker 8: of T Mobile that's different than somebody else in terms
Speaker 8: of the offers. You may see, the prioritization, the upgrades,
Speaker 8: et cetera. And so it's an exciting moment for us
Speaker 8: to rethink how we serve customers and give each customer
Speaker 8: a fantastic journey with T Mobile.
Speaker 4: What could the phone make has been doing better at
Speaker 4: the moment because ultimately we see Apple getting another downgrade.
Speaker 4: Many worries about China, but we aren't upgrading our phones
Speaker 4: as much as we used to do. You have to
Speaker 4: capitalize on giving the add ons in this moment because
Speaker 4: Samsung and Apple just they're not presenting as new a
Speaker 4: use cases as they used to.
Speaker 9: Well, it works for our business model. I mean, I
Speaker 9: can't speak for them.
Speaker 8: One thing that's happening is upgrade rates have slowed down,
Speaker 8: but they're pretty steady. Prices have risen, so the OEMs
Speaker 8: have made up for it. That way, customers are keeping
Speaker 8: their phones longer. But what you saw with T Mobile
Speaker 8: this time is our upgrade rates did tick up a
Speaker 8: little bit. With the lowest upgrade rates in the industry.
Speaker 8: That's good for our financials. But they started to normalize,
Speaker 8: so they ticked up. I signaled earlier in the quarter
Speaker 8: that our iPhone sales were very strong, and they were,
Speaker 8: and you saw it in our numbers.
Speaker 2: Mike, so great to have you.
Speaker 4: Great to see you again in the back of your earnings.
Speaker 4: Come back soon. Mike's even is a T Mobile CEO,
Speaker 4: Microsoft and open Ai are investigating where the deep seek
Speaker 4: used data output from open AI's technology if it was
Speaker 4: obtained in an unauthorized manner by a group linked to
Speaker 4: the Chinese AI startups, all according to sources. Now, Deep
Speaker 4: Seek and the High Flyer Hedge fund where deep Seak
Speaker 4: was started, have not commented on there's so far, so
Speaker 4: let's discuss it and the data privacy concerns around deep
Speaker 4: seat with Alex Staemosi's chief mentioned security officer at Centinel
Speaker 4: One and former chief security officer at Facebook. Look Alex
Speaker 4: is open ai and indeed other AI labs at the moment.
Speaker 4: Are they right to be concerned about their ip here?
Speaker 9: I think they are.
Speaker 10: There's a lot of people who doubt the claim that
Speaker 10: deepsek was able to build such a incredibly capable model
Speaker 10: with such a little compute and such as little cost
Speaker 10: as they claim. Now there are some great breakthroughs here.
Speaker 10: Deep Seek published at paper that demonstrated great breakthroughs in
Speaker 10: both training cost and inference costs. So inference is what
Speaker 10: you do when you're actually running the model for people
Speaker 10: to use later, and they have some legitimate breakthroughs. So those
Speaker 10: are breakthroughs that to their credit, they have documentary that
Speaker 10: other people are going to be able to use now.
Speaker 10: But there's a lot of people who believe that they
Speaker 10: utilized both open AI's model probably running up in Microsoft's
Speaker 10: Azure service, as well as metas open source models to
Speaker 10: build upon to build Deepseek, And that's what's being investigated.
Speaker 3: Right now, Alex Is there anything that Microsoft and other
Speaker 3: open and open ai and other providers can do to
Speaker 3: perhaps prevent this from happening again? If not deep Seek,
Speaker 3: then perhaps another competitor from China.
Speaker 10: Well, this is the challenge that they're going to have
Speaker 10: that Microsoft's business model is that you can go to
Speaker 10: Microsoft Azure and you can throw down a credit card,
Speaker 10: you can open up an account, and you can ask
Speaker 10: them to create a private copy of open AI's models
Speaker 10: for you that you can use for your own purposes.
Speaker 10: This is how Microsoft plans on monetizing their multi billion
Speaker 10: dollar investment in open Ai. That is a great thing
Speaker 10: for them, that's a great thing in theory for both
Speaker 10: open Ai and the customers that you can have a
Speaker 10: version of open Ai that in theory does not expose
Speaker 10: their model weights to the customer and does not expose
Speaker 10: the customer's private enterprise data to open AI.
Speaker 9: But what has happened is that people have figured.
Speaker 10: Out ways that you can ask a model many many
Speaker 10: millions or billions of questions to suck all of the
Speaker 10: data out of it. So imagine you have an ancient
Speaker 10: wise professor, and you're able to ask that wise professor many, many,
Speaker 10: many questions and then effectively become a.
Speaker 9: Copy of that professor.
Speaker 10: That's exactly what can happen here, except at machine speed.
Speaker 10: You can do that over days, weeks, or months, and
Speaker 10: that is the business model that Microsoft is operating here.
Speaker 10: So detecting that kind of behavior might be theoretically possible,
Speaker 10: but that's also exactly what they're selling. And so I think, yes,
Speaker 10: they're going to look into what Deepseat did here, but
Speaker 10: it will only be a cat and mouse game to
Speaker 10: try to determine whether somebody is actually utilizing the models
Speaker 10: in the way Microsoft wants them to and wants to
Speaker 10: get paid for, and whether or not they're trying to
Speaker 10: actually copy those models.
Speaker 4: Is we want to ask you a little bit more
Speaker 4: about the detail of concerns anxieties privacy. Teresa Peyton joined US.
Speaker 4: She's former CEO for the White House. Here's what she
Speaker 4: had to say about worries on using deep Seat.
Speaker 11: This is an untested app. I would caution people not
Speaker 11: to put too much proprietary company information into it, and
Speaker 11: until there's been an opportunity to actually do something called
Speaker 11: ethical hacking or red teaming pen testing of the actual
Speaker 11: app and learning more about how is your data treated,
Speaker 11: where is it stored, how do the algorithms work. It
Speaker 11: is open source, but things do still need to be
Speaker 11: put through their paces.
Speaker 4: Of course, deep Seat was the number one app downloaded
Speaker 4: on Apple. We've also now got Ali Baba announcing its
Speaker 4: latest powerful AI model. Should similar reticence be used by
Speaker 4: US companies?
Speaker 2: By US people? Adds?
Speaker 10: Okay, So this is where it gets complicated and we
Speaker 10: got to be really careful here to separate out two
Speaker 10: different things. There is the deep Seak app that people
Speaker 10: are downloading on their phones. That app, that data goes
Speaker 10: straight to China. Right, So if you're downloading deep Seek
Speaker 10: on your phone, or if you're going to deep Seak's
Speaker 10: website and you're typing in query that app, that data
Speaker 10: goes straight to China. That's available to that Chinese company,
Speaker 10: that is probably available to the Chinese government without any problem.
Speaker 10: So yes, absolutely, companies should not be allowing their employees
Speaker 10: to download the deep Seap app onto their phones. If
Speaker 10: you're a company and you download the open source model weights,
Speaker 10: that data does not go back to China. Now there
Speaker 10: are some potential risks right now.
Speaker 9: Those risks are pretty much theoretical. The deep seek model
Speaker 9: weights do have an ideological.
Speaker 10: Twist towards the CCP, so if you asked you about
Speaker 10: Tineman square, it won't answer. It will not create, for example,
Speaker 10: a Winnie the Pooh story about Shishan Pin.
Speaker 9: So it corresponds to the.
Speaker 10: Rules the Chinese government has created about the ideological consistency
Speaker 10: of AI, but that is not a security risk. That
Speaker 10: being said, there are some interesting theoretical ideas people have
Speaker 10: come up with about backdooring AI when it's used for
Speaker 10: security sensitive uses, but right now that is not as
Speaker 10: big of a deal. I think a more interesting question
Speaker 10: for enterprises that are looking to use the deep Seak
Speaker 10: model WAKES is the legal issues. If it turns out
Speaker 10: that deep seek was trained off of metas and open
Speaker 10: AIS models, what does that mean for the legality of
Speaker 10: using deep seeks models. Deep Seak has open source theirs,
Speaker 10: but they do not have the ability to get rid
Speaker 10: of any legal issues that are caused by open AI.
Speaker 10: Of course, open ai is being sued for their use
Speaker 10: of training data that's open that. This is one of
Speaker 10: the issues with AI. The intellectual property issues have not
Speaker 10: been solved. We're dealing with eighteen, nineteenth and early twentieth
Speaker 10: century copyright ideas and we're trying to apply it to
Speaker 10: these twenty first century problems. And it's a real legal
Speaker 10: mess that the legal system is years behind what the
Speaker 10: cutting edges in technology.
Speaker 3: Alex Stamos, Sentinel One Chief Information Security Officer, Thank you.
Speaker 3: Coming up, we'll cover deep Seek's impact on the chip
Speaker 3: world with Andrew Feldman from Sarah Bras.
Speaker 5: This is Bloomberg.
Speaker 3: Not all hardware providers are worried about deep seek advantas.
Speaker 3: The partner of Nvidia that sells chip testing equipment just
Speaker 3: lifted its full year forecast almost forty percent in anticipation
Speaker 3: of elevated spending around AI, and it downplayed the impact
Speaker 3: of deep Seek's big debut. Now let's bring in someone
Speaker 3: else in the field. Andrew Feldman, CEO Sarah Brus, a
Speaker 3: company building computer systems for complex AI deep learning applications. Andrew,
Speaker 3: your company is trying to go toe to toe with
Speaker 3: a big competitor and that is Nvidia. What do you
Speaker 3: draw in terms of an underdog story from what we
Speaker 3: saw the other day with deep Seek?
Speaker 12: Okay, I think this is an enormously exciting moment for
Speaker 12: the community. I think it sends multiple powerful messages. Clearly,
Speaker 12: they used less compute, they used fewer people and produced
Speaker 12: something quite impressive. Now, I think that's a reminder that
Speaker 12: those of us who are underdogs and are competing against
Speaker 12: the eight hundred pound gorillas in the industry, small teams
Speaker 12: of hardworking people with big ideas can produce industry changing results.
Speaker 12: And that's what we do at Cerebras.
Speaker 4: Yeah, Andrew, they used you, they used Cerebras inference offering.
Speaker 2: What did you see?
Speaker 4: What have you taken on in terms of the amount
Speaker 4: of share necessity they need in this moment?
Speaker 12: Sure, So we are now in beta with our deep
Speaker 12: Seak offering. And as your last guest said, there are
Speaker 12: two ways to use deep Seek. You can use it
Speaker 12: through their app, and I think he's absolutely correct that
Speaker 12: that that data you can assume goes right to China.
Speaker 12: Or you can use it through a company like us
Speaker 12: or Perplexity or collection of others that are offering the model,
Speaker 12: and we of course have all sorts of protections for
Speaker 12: your data such that you can be assured it will
Speaker 12: go nowhere. There is tremendous demand for this type of model.
Speaker 12: One of the things that separated this model from previous
Speaker 12: models was that its ability to reason and to do logic,
Speaker 12: and those type of models in particular outperform the other
Speaker 12: forms of models, and they do that by using more
Speaker 12: compute during inference. And this is something that the whole
Speaker 12: industry has been grappling with and we are today the
Speaker 12: fastest of this and what that means for you, the
Speaker 12: user is a better user experience, quicker answers, less waiting,
Speaker 12: and that's what's really moving the customers right now.
Speaker 3: Andrew Cerebras had been planning an IPO, do you have
Speaker 3: an update on that? And we also understand and that
Speaker 3: an interagency panel in Washington known as SIPIUS has been
Speaker 3: reviewing all of this.
Speaker 5: Do you have an update there? I don't, But I.
Speaker 12: Think the deep Seek model was put out right around
Speaker 12: Trump's inauguration.
Speaker 6: I don't think that was an accident.
Speaker 12: I think this was an effort to communicate at the
Speaker 12: geopolitical level to the US that the previous administration's regulations
Speaker 12: hadn't worked, that the Chinese engineer was capable of doing
Speaker 12: extraordinary things even in the face of the regulations imposed
Speaker 12: by the previous administration's commerce team.
Speaker 4: What's so interesting about this You talk about the geopolitics
Speaker 4: and perhaps all that sort of timing use with Huawei
Speaker 4: and its innovations, But briefly, many and perhaps worried Siphius
Speaker 4: maybe have anxiety around your relationship with G forty two
Speaker 4: and it's ultimate relationship with Chines, your overseas locations. How
Speaker 4: do you tackle that in this environment?
Speaker 12: Look, I think we have a strategic partnership with G
Speaker 12: forty two. They are the national champion AI company for
Speaker 12: United Arab Emirates, and they are one of the US's
Speaker 12: staunchest allies in the Middle East and have a long
Speaker 12: track record of supporting US interests and being good allies.
Speaker 12: I think one of the things that Deep Seek has
Speaker 12: taught us is that.
Speaker 9: We will need the community and we will need our allies.
Speaker 12: That we thought perhaps that the US could run this alone,
Speaker 12: that we had the computer companies like Cerebras, like Nvidia
Speaker 12: and a m D and we had the open eyes
Speaker 12: of the world. But I think what we're learning here
Speaker 12: is that we will need the entire US ecosystem in
Speaker 12: this AI battle.
Speaker 2: Andrew Feldman, thanks so much for joining us.
Speaker 4: CEO Cerebras.
Speaker 2: Come back when you do. You have a bit more
Speaker 2: news on the IPO potentially coming up.
Speaker 4: Activist investor Kristin Hull joins us to discuss what she'll
Speaker 4: be looking for when Tesla releases its results later today.
Speaker 4: I remember an activist investor what she makes of Elon
Speaker 4: Musk's involvement in government, in the German government. This is
Speaker 4: bloue Meg Technology. Welcome back to Blue Meg Technology. I'm
Speaker 4: Caroline Hide in New York.
Speaker 5: And I'm Mike Shepard in San Francisco.
Speaker 4: Check on these markets, Mike, because we've got some anxiety
Speaker 4: ahead of the FED, of course, and indeed ahead of earnings.
Speaker 4: We've got Microsoft Meta Tesla after well, nasdak off by
Speaker 4: four ten percent. The bitcoin though, is getting a bit
Speaker 4: of a risk on trade where at one and a
Speaker 4: half percent, maybe because of what Trump Media has just
Speaker 4: announced a pairing into financial services. They're launching a fintech
Speaker 4: brand name Truthfi. In collaborations with Charles Schwab up eight
Speaker 4: and a half percent Sally Bakewell here to discuss what
Speaker 4: are we expecting this sort of a move from an
Speaker 4: entity related to the president.
Speaker 2: I think we could have expected it.
Speaker 13: I mean, Trump has just launched his trump coin, he
Speaker 13: has already declared himself a huge supporter of cryptocurrencies.
Speaker 2: He's the crypto president.
Speaker 13: So I don't think it's a huge surprise that Trump
Speaker 13: Media is delving into the financial services world with this investment.
Speaker 9: Now.
Speaker 13: It's notable, though, that Donald Trump he actually transferred his
Speaker 13: shares in Trump Media last month to a trust which
Speaker 13: is controlled by his eldest son, so he no longer
Speaker 13: directly owns any of Trump Media, but he is the
Speaker 13: sole beneficiary of that trust. So I think this is
Speaker 13: just an example of how the Trump Empire is deepening
Speaker 13: its push into crypto and fintech. And it's interestingly timed
Speaker 13: because just last week Trump made comments about, you know,
Speaker 13: traditional banks and how he said that they were effectively
Speaker 13: debanking the Conservatives. He's sort of made a barber Bank
Speaker 13: of America CEO Brian moynihan, as well as JP Morgan
Speaker 13: chief Jamie Diamond, so he's a big fan of the
Speaker 13: crypto the fintech world.
Speaker 2: I think it is fair to.
Speaker 3: Say Sally in effector is the Trump Media group trying
Speaker 3: to create something that Elon Musk has dreamed about for
Speaker 3: all these years, that is a one stop social platform
Speaker 3: with everything, messaging, finance, you name it.
Speaker 2: Well, so far, what do we know?
Speaker 13: We know that Trump Media is investing two hundred and
Speaker 13: fifty million in this effort, and that money actually is
Speaker 13: going to be custodied by Charles Schwab, which is also
Speaker 13: going to advise it on its investments and its strategy.
Speaker 13: It's going to offer separately managed accounts ETFs, and other bitcoin,
Speaker 13: crypto and bitcoin related products. Now, getting into the financial
Speaker 13: services space is something that a lot of companies have done.
Speaker 13: Just yesterday, social media platform x announced that it was
Speaker 13: partnering with Visa on its digital wallet in order to
Speaker 13: be this everything app that Musk has lo talked about.
Speaker 2: And we've seen the.
Speaker 13: Likes of Amazon creeps only into financial services, as has
Speaker 13: Apple with the wallet. So it's a difficult world to
Speaker 13: enter in many ways. There are a lot of incumbents
Speaker 13: such as zell and Venmo, which holds substantial portions of
Speaker 13: the market. But equally, a lot of these companies also
Speaker 13: want to diversify their revenue, and this is one place
Speaker 13: that they can do that.
Speaker 3: Bloomberg Sally big, Well, thank you so much. Tesla releases
Speaker 3: its fourth quarter earnings later today, and investors are going
Speaker 3: to be closely watching for information on new products and
Speaker 3: sales volume, and they also want to know how CEO
Speaker 3: Elon Musk's new role in the Trump administration is impacting
Speaker 3: the electric vehicle maker.
Speaker 5: Let's bring in Kristen Hall.
Speaker 3: She's the founder and chief investment officer at NIA Impact
Speaker 3: Capital and somebody who follows Tesla very closely, Nia, this
Speaker 3: is a real moment for you.
Speaker 5: If somebody watches this company very closely.
Speaker 3: Tough sales numbers earlier this month from the company, we
Speaker 3: see the new president pulling away the EV subsidies and
Speaker 3: the CEO of Tesla himself quite distracted by politics. These
Speaker 3: are choppy waters for any company. How is Tesla going
Speaker 3: to navigate them?
Speaker 2: Hey, Mike, thanks for having me today.
Speaker 14: This is a tricky company and all investors are going
Speaker 14: to be watching for these earnings today. We want to
Speaker 14: see that there's a commitment to growth and that there's
Speaker 14: an ability for execution, and of course we have questions
Speaker 14: can the CEO execute on these and do we have
Speaker 14: a board that's going to support all of the growth
Speaker 14: that we need to see from this company.
Speaker 5: What are you looking.
Speaker 3: For in particular when it comes to the business including
Speaker 3: self driving and perhaps some of the other businesses that
Speaker 3: have emerged for Tesla, including AI and robotics.
Speaker 14: Yeah, so that's a good question, right because as investors,
Speaker 14: we want to see growth, and we want to see
Speaker 14: a plan, and we want to see guidance. And what
Speaker 14: we know from these earnings reports from the past is
Speaker 14: consistently there will be surprises. We can expect that we
Speaker 14: want to see that there are sales growth in their
Speaker 14: main revenue source, which is automobiles, right, and yet Europe
Speaker 14: dropping in popularity. Actually worldwide, Tesla has been dropping popularity,
Speaker 14: and so we have competition coming up in the market,
Speaker 14: both with regular automobile makers as well as some of
Speaker 14: the Chinese that are coming in and so it's a
Speaker 14: complicated terrain for Tesla right now to navigate, and so
Speaker 14: we're going to want to see that there's a CEO
Speaker 14: in control with a plan.
Speaker 4: You are so important in terms of a voice because
Speaker 4: you're an activist investor, and ultimately you're questioning often the
Speaker 4: role of elo Musk, the way of policies he.
Speaker 2: Invokes, the way he acts.
Speaker 4: But notably at the moment, Tesla doesn't seem to be
Speaker 4: particularly related to fundamentals. We point out that their shares
Speaker 4: are nearly doubled since the last time we got earnings,
Speaker 4: and the numbers haven't been that great since then if
Speaker 4: you think about the deliveries numbers instead, this is a
Speaker 4: proxy on Elon's closeness to politics. How do you distinguish
Speaker 4: that for yourself as an investor?
Speaker 14: So, Caroline, thanks for the question. This is a complicated company,
Speaker 14: particularly when the CEO is as involved with the federal
Speaker 14: government as is. Oftentimes you would see if there's a
Speaker 14: role granted from the federal government that you would drop
Speaker 14: your current day job, and yet we're not seeing that happening.
Speaker 2: So we do.
Speaker 14: Believe that every company deserves a full time CEO, and
Speaker 14: so we have lots of questions there. We also have
Speaker 14: questions about human capital management and how is Tesla going
Speaker 14: to be able to attract, retain, promote top talent, because,
Speaker 14: as we know, this is an innovation company, and innovation
Speaker 14: does derive itself from really loyal client base, both on
Speaker 14: the client side and then also on the employee base,
Speaker 14: and so we're looking to see how is the company
Speaker 14: going to manage this.
Speaker 4: For years, though, since you first bought into Tesla, you've
Speaker 4: been trying to communicate with the company and pushing against
Speaker 4: some of the activities that we've seen, whether it be
Speaker 4: consents around on to DEI, whether it be certain perceived
Speaker 4: anti Semitic compents coming from Elo Musk in the past
Speaker 4: that I know you've written about.
Speaker 2: There's also, though, of course, the latest.
Speaker 4: When we come to the concerns around gestures recently made
Speaker 4: around the inauguration of Trump made by Elo Musk and
Speaker 4: indeed his support of IFD, which is deemed a right
Speaker 4: wing group in Germany. Nothing seems the matter when you're
Speaker 4: putting this to ultimately a share price that goes up
Speaker 4: into the right.
Speaker 14: So you bring up some really interesting points. This company
Speaker 14: does seem to stand alone as far as its meanness,
Speaker 14: and that it's continued to grow. Other companies would not
Speaker 14: get the same reactions with that type of CEO and
Speaker 14: those types of behaviors. We as investors are really looking
Speaker 14: for the long term possibilities here, and when you have
Speaker 14: such a controversial CEO, we are seeing, as you point out,
Speaker 14: sales are dropping, popularity is dropping, the brand has been damaged,
Speaker 14: and so how is the board and the rest of
Speaker 14: Tesla going to step in and see how are we
Speaker 14: going to see sales growing when we are having a
Speaker 14: lot of controversial issues. As I pointed out earlier, we're
Speaker 14: also seeing not only two clients at where I live
Speaker 14: in California, many many are switching to Rivian and other
Speaker 14: EV brands specifically based on the brand and some of
Speaker 14: the issues that they see that they don't want to
Speaker 14: be associated with. And we're also seeing that for employees,
Speaker 14: who's going to want to work for Tesla in such
Speaker 14: a volatile environment. These are questions that investors have.
Speaker 3: Kristin, It's been a year since Tesla dropped diversity and
Speaker 3: inclusion language from its ten K, and we've seen since
Speaker 3: then other companies and even the federal government following suit
Speaker 3: in some fashion or another. Do you see this tide
Speaker 3: changing at all? And what sort of pressure will you
Speaker 3: be able to apply to Tesla at upcoming meetings?
Speaker 14: So for all of our companies, we really want to
Speaker 14: see strong human capital management. And so whether you call
Speaker 14: it DEI or whether you call it supporting your employee base,
Speaker 14: we really want to see Tesla and other companies hold
Speaker 14: their employees on the asset side of the balance sheet
Speaker 14: as opposed to on the expense side. We want to
Speaker 14: see that Tesla is showing that they will invest in
Speaker 14: their employee base because we know that again, to execute
Speaker 14: on all of the innovation that they promised, they're going
Speaker 14: to need to have strong, loyal employees and that's going
Speaker 14: to mean strong programs and so again, whether it's called diversity,
Speaker 14: equity inclusion, whether it's merit based hiring, we want to
Speaker 14: see that investment and we need to see the transparency
Speaker 14: around that. So with Tesla, we and NIA have been
Speaker 14: asking them to remove forced arbitration from employee contracts because
Speaker 14: that does conceal a lot of what's going on, both
Speaker 14: for managers and for investors as well as for other employees.
Speaker 4: Kristin how, chief investment Officer for NIA Impact Capital, thanks
Speaker 4: so much for joining us today and do not forget
Speaker 4: to check out the elon Ink Podcasts FINGO card for
Speaker 4: this round of Tesla's earnings.
Speaker 2: You can find it on the.
Speaker 4: Terminal Online Work out what words are used, how many times,
Speaker 4: and if they're in line with that card coming up.
Speaker 4: TikTok still needs a US buyer to avoid a bad
Speaker 4: in the States.
Speaker 2: Seventy five day extension.
Speaker 4: Signed by President Trump run out in April. We'll talk
Speaker 4: to Jesse Tinsley about the old cash bid he's put
Speaker 4: together with none of them, the mister Beast. This is
Speaker 4: bringing back technology.
Speaker 3: Could a widely popular influencer become an owner in a
Speaker 3: hugely popular social media platform.
Speaker 5: Mister Beast is reported.
Speaker 3: To be speaking with multiple groups of investors about buying TikTok.
Speaker 5: One of those groups is led.
Speaker 3: By Jesse Tinsley, the CEO of Employer dot Com. Jesse
Speaker 3: Tinsley joins us now. Jesse, thank you for being here.
Speaker 3: Let's get right to it. How involved is mister Beast
Speaker 3: with your group's bid? Has he fully committed to joining
Speaker 3: your team here?
Speaker 15: I think mister Beast, as we said last week, I
Speaker 15: think we hope that he joins as many bus as
Speaker 15: as possible.
Speaker 6: He's positive influence.
Speaker 15: For young people and people ever read globally, and so
Speaker 15: we're excited to have him in his group backing our
Speaker 15: bid among others as well.
Speaker 4: So he's not formally signed on to your bid. He's
Speaker 4: just seeing whoever wins contacts.
Speaker 15: So I think there's some some articles that came out
Speaker 15: last week and mister Beast and his group are definitely
Speaker 15: signed on with our group and it's but it's non exclusive,
Speaker 15: so we hope he can work with as many groups
Speaker 15: as possible.
Speaker 2: And what about your bid?
Speaker 4: Who else is involved other than yourself and potentially mister Beaste.
Speaker 6: Yeah, yeah, it's a great question.
Speaker 15: I think we were We were not obviously a very
Speaker 15: large bid by by any means.
Speaker 9: Right.
Speaker 15: We're a bunch of technologists and founders and there's folks
Speaker 15: like David Bazouki from the CEO and co founder of
Speaker 15: rope Blocks, as well as Nathan Coley, co founder and
Speaker 15: CEO of Anchorage, among a bunch of other technologists and
Speaker 15: folks that I think can stabilize, you know, TikTok can
Speaker 15: put in a really good place for users and data
Speaker 15: integrity across you know, across the US based population.
Speaker 6: We're We're excited with the group we have.
Speaker 15: We have as almost a great effort as opposed to
Speaker 15: some of these larger bids.
Speaker 6: And I think we have folks that can come in
Speaker 6: and make a huge impact. We're really excited with the
Speaker 6: group that we.
Speaker 3: A Jesse, what have you heard back from BYT Dance
Speaker 3: and who at the company are you dealing with specifically.
Speaker 6: Yeah, that's a good question. We have heard back from
Speaker 6: BI Dance directly.
Speaker 15: It's been a bit of radio silence on their side,
Speaker 15: but we're looking forward to chatting with them the next
Speaker 15: couple of weeks. It sounds like there's some movement with
Speaker 15: different conversations we've been having across a bunch of different parties,
Speaker 15: and I think it's right now. We're scared with the
Speaker 15: way things are trending. And yeah, so no direct contact
Speaker 15: with by Dance.
Speaker 6: Thom's farm.
Speaker 4: Really fascinating about who's alongside you Roadblocks. I totally get
Speaker 4: the idea that you want to therefore be aligned with
Speaker 4: social media and with discussion and groups and interaction of
Speaker 4: young people. But Jesse, you have made your name in
Speaker 4: human capital. Why are you interested in this asset?
Speaker 2: What change do you want to make?
Speaker 6: Yeah, the fantastic question. I think. Obviously data's background.
Speaker 15: Roadblocks directly seeks the lines a lot with the same
Speaker 15: values that I shared. It's one of the reasons that
Speaker 15: we added him directly is I have two young daughters
Speaker 15: who will soon be on on social media and hopefully
Speaker 15: my goal and whoever whoever wins roadblocks, whether it's myself
Speaker 15: or another group, I hope that you know that it's
Speaker 15: safe enough for the where I feel comfortable with my
Speaker 15: young daughters going on.
Speaker 6: TikTok for the next six ft full months.
Speaker 15: And I think right now, the way the algorithm is set,
Speaker 15: where the data is, how the data is being used,
Speaker 15: I would not feel that comfortable doing that thus far.
Speaker 15: So I think that that's kind of my goal and
Speaker 15: the values that I see an ndidate for for US.
Speaker 6: Stone after this stood correctly.
Speaker 3: Jesse, President Donald Trump has made selling TikTok to US
Speaker 3: buyers or reaching a deal a priority.
Speaker 5: What kind of contact have you had with the White
Speaker 5: House and what.
Speaker 3: Sort of support are you getting from Trump administration officials
Speaker 3: on your bid.
Speaker 15: Yeah, we've done ongoing dialogue with the Trump illustration, and
Speaker 15: we feel very comfortable with our bid in terms of
Speaker 15: how we've actually set it up. We have a bunch
Speaker 15: of we've already preset a lot of the team in
Speaker 15: terms of board of directors and board sub committees with
Speaker 15: around finance, technology and everything else.
Speaker 6: So we feel really really good.
Speaker 15: We have an all us back vaccine with all of
Speaker 15: the data and servers and technology moving here.
Speaker 6: So definitely gonna be a challenge to move TikTok.
Speaker 15: But over from byte Dance and there's so many servers
Speaker 15: and move it here.
Speaker 6: But we feel really comfortable with our bid correctly.
Speaker 4: Ultimately, it sounds like you're making one just for the
Speaker 4: good of humanity, for the good of your kids.
Speaker 2: I mean you.
Speaker 4: Said, I think accidentally said you were making whoever wins
Speaker 4: out on roadblocks, and you might say whoever wins out
Speaker 4: on TikTok.
Speaker 2: But help us take this really seriously.
Speaker 4: You've already named some really significant people who are in
Speaker 4: this with yourself are a significant entrepreneur and founder. But
Speaker 4: help us understand how serious the nature it is of
Speaker 4: this bid and how much money you've got behind it.
Speaker 15: Jesse, Yeah, so definitely definitely a very large bit, I
Speaker 15: think Bell I'll measures we basically have I think the
Speaker 15: other public number fit that's been floated as a twenty
Speaker 15: big billion by another group essentially ours and significantly higher
Speaker 15: that offer ends today got.
Speaker 4: The money behind at Jesse Tinsley, He tells our CEO
Speaker 4: of employer dot com thanks so much for joining us.
Speaker 3: Microsoft and Meta reporting after market closed today. All this
Speaker 3: admits concerns around artificial intelligence spending. Let's bring in Bloomberg's
Speaker 3: Ryan Blestelica.
Speaker 5: Ryan. Meta and Microsoft are two very different stories.
Speaker 3: When it comes to capex, Meta seems to be getting
Speaker 3: a little bit more of a pass.
Speaker 16: Why is that, Hey, thanks for having me on. Yeah,
Speaker 16: it's a great question. So last week they came out
Speaker 16: gave a new cappex target that was significantly above what
Speaker 16: people were expecting.
Speaker 9: And while a lot.
Speaker 16: Of AI spending has come under scrutiny lately, the stock
Speaker 16: actually rallied. It seems like the overall takeaway was people
Speaker 16: view them as investing from a place's strength. And then
Speaker 16: earlier this week, amid all the sell off and volatility
Speaker 16: related to Deep Seek out of China, Meta also rose again.
Speaker 16: That was sort of seen as a validation of its
Speaker 16: own AI model Lama, which is open source, getting a
Speaker 16: little bit of a bid from deep Seek, which is
Speaker 16: another open source model, So it's sort of a validation
Speaker 16: of their strategy there.
Speaker 4: Meanwhile, Microsoft expecting eleven percent increase in revenue, but they've
Speaker 4: got to vindicate their spending and indeed where the open
Speaker 4: AI is is valuable without Since the deep Seek news.
Speaker 9: Yeah, absolutely so that's this company.
Speaker 16: They've disappointed the past couple of quarters, just based on
Speaker 16: their share price reaction. Some concerns about the strength of
Speaker 16: their cloud business. Is it growing fast enough for people
Speaker 16: to justify paying the high multiple that Microsoft has, especially
Speaker 16: relative to Meta.
Speaker 9: That's going to be a real focus here.
Speaker 16: And obviously that was the name that a I saw
Speaker 16: a lot of weakness earlier this week on the deep
Speaker 16: seek news.
Speaker 9: A lot of implications.
Speaker 16: For you know, how much money is being cloud into AI,
Speaker 16: at least based on the traditional sort of architecture. Now,
Speaker 16: if deep seek is able to do this in a
Speaker 16: more efficient and cost effective manner, that really kind of
Speaker 16: changes the economics behind some of the spinning that they've
Speaker 16: been doing.
Speaker 4: I'm les Delca. Got to be busy, thank you. Moving
Speaker 4: on to two other companies also reporting after the Bell Service.
Speaker 4: Now in IBM, let's get to it.
Speaker 2: Boombergs Brodie Ford and.
Speaker 4: Software is having its moment because of deep Seek. What
Speaker 4: do we expect from IBM?
Speaker 17: Absolutely so with IBM, their method of AI monetization thus
Speaker 17: far as argument in their consulting business. Everyone's watching their
Speaker 17: bookings around AI as it relates to consulting because that's
Speaker 17: kind of a good place to be in with the
Speaker 17: picks and shovels question because you know, no matter what happens,
Speaker 17: even if the customers don't actually end up buying it,
Speaker 17: ib able to help you set it up right. So
Speaker 17: that's a good setup for Jeni at this moment. See
Speaker 17: how folks are watching for that as well as their
Speaker 17: own software business largely.
Speaker 3: And Brodie on Service now Generative AI is also a
Speaker 3: big part of their story. Tell us what you're looking
Speaker 3: for this afternoon when they drop the application.
Speaker 17: Software vendors were struggling a little while as it relates
Speaker 17: to AI, but right now with the agent moment, there's
Speaker 17: a lot more optimism, especially with deep seek. People say, hey,
Speaker 17: are models getting cheaper. Maybe that's scary if you're in Nvidia,
Speaker 17: but if you're a company that's going to buy those
Speaker 17: models and then deliver them to your customers, that's actually
Speaker 17: very good.
Speaker 2: We see that the.
Speaker 17: Service now is at about an all time high right now,
Speaker 17: and you know, folks are whole. It's down a little
Speaker 17: bit today, but yesterday they close that an all time high,
Speaker 17: so investors are excited about the potential for the application
Speaker 17: layer to really kind of start having its moment With Jennai.
Speaker 4: Both of these stocks had their moment in twenty twenty
Speaker 4: four though. Yes, IBM up thirty percent more than bestince
Speaker 4: two thousand and I service now and its best year
Speaker 4: up fifty percent. So is it all about just talking
Speaker 4: up the AI narrative as much.
Speaker 2: As they can.
Speaker 17: That's a huge part of it. IBM had such a
Speaker 17: great year last year because they were one of the
Speaker 17: rare reacceleration stories with software. I mean, you could poke
Speaker 17: at their growth right and say, oh man, it's only
Speaker 17: two percent this and that, but their software business is accelerating.
Speaker 17: I mean, the idea that IBM would become a serious
Speaker 17: software contender, you know, five six years ago wasn't the
Speaker 17: most popular take, but today we've seen that it really
Speaker 17: has played out.
Speaker 3: Bertie, Is there any weak spot in either of these
Speaker 3: companies as they're heading into this afternoon that investors are
Speaker 3: going to be concerned about?
Speaker 5: In particular?
Speaker 17: One X factor is that they are both pretty big
Speaker 17: government you know, vendors, and obviously what doge right, I mean,
Speaker 17: if the whole promise is that we're going to cut off,
Speaker 17: you know, spending on unnecessary things.
Speaker 12: Right.
Speaker 17: Elon famously doesn't love to pay software bills at his
Speaker 17: own companies, right, And so some investors have said, man,
Speaker 17: is this going to be a concern when it comes
Speaker 17: time to you know, a company like service now Is
Speaker 17: sells so much into the federal government.
Speaker 4: I correct myself, seve Now up fifty in twenty twenty four,
Speaker 4: is actually up eighty one percent in age twenty three.
Speaker 4: We'll see what it delivers tonight, Brady Ford. Great to
Speaker 4: have him across both of the earnings. And that does
Speaker 4: it for this edition of Bloomberg Technology. Don't forget to
Speaker 4: check in on all of the earnings after the bell,
Speaker 4: but also check out our podcast. You can find it
Speaker 4: on the terminal as well as online on Apples, Spotify,
Speaker 4: and iHeart from New York from San Francisco. This is
Speaker 4: Bloomberg Technology.