1 00:00:01,080 --> 00:00:04,760 Speaker 1: From the heart where Innovations, money and power Collie in 2 00:00:04,880 --> 00:00:06,400 Speaker 1: Silicon Valley, NBN. 3 00:00:06,720 --> 00:00:10,760 Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 4 00:00:24,520 --> 00:00:26,680 Speaker 3: I'm Caroline Heinder Bloomberg's weltead quarters. 5 00:00:26,400 --> 00:00:29,240 Speaker 4: In New York, and I met Ludlow in San Francisco. 6 00:00:29,400 --> 00:00:31,200 Speaker 4: This is Bloomberg Technology. 7 00:00:30,760 --> 00:00:31,720 Speaker 3: Coming up Amazon. 8 00:00:31,760 --> 00:00:35,480 Speaker 5: It posts a biggest cloud sales growth in a year. 9 00:00:35,640 --> 00:00:37,360 Speaker 3: That's all on AI demand details. 10 00:00:37,400 --> 00:00:39,159 Speaker 6: The't com plus full. 11 00:00:39,040 --> 00:00:42,120 Speaker 4: Chip coverage ahead is AMD falls after its AI chip 12 00:00:42,159 --> 00:00:44,320 Speaker 4: forecast disappoints. 13 00:00:43,720 --> 00:00:46,320 Speaker 5: And we sit down with the CEO of Pinterest for 14 00:00:46,400 --> 00:00:49,920 Speaker 5: an exclusive interview as that revenue surge is the first 15 00:00:50,040 --> 00:00:51,879 Speaker 5: let's check in on the rest of these markets and 16 00:00:52,240 --> 00:00:54,920 Speaker 5: actually a little bit of nervousness, shall we say, ahead 17 00:00:54,960 --> 00:00:57,560 Speaker 5: of the FAED all important two PM two thirty is when, 18 00:00:57,560 --> 00:01:00,000 Speaker 5: of course j Powell comes forward with his press conference. 19 00:01:00,120 --> 00:01:01,880 Speaker 5: So we're down about a ten percent, but bouncing off 20 00:01:01,920 --> 00:01:04,800 Speaker 5: of our lows. But of course, more broadly, the technology 21 00:01:04,880 --> 00:01:06,560 Speaker 5: drag lower by some of those earnings in the chip 22 00:01:06,640 --> 00:01:08,440 Speaker 5: names and the read across we're down by two point 23 00:01:08,560 --> 00:01:09,040 Speaker 5: five percent. 24 00:01:09,120 --> 00:01:10,360 Speaker 3: Let's call it on the socks. 25 00:01:10,400 --> 00:01:12,240 Speaker 5: I know edge you'll be digging into really what are 26 00:01:12,240 --> 00:01:15,640 Speaker 5: the ultimate names that are pulling down the key chip index. 27 00:01:15,800 --> 00:01:17,759 Speaker 3: But I also look at ten year yields actually catching 28 00:01:17,800 --> 00:01:19,600 Speaker 3: a bid now. Earlier we saw bond sell off. 29 00:01:19,600 --> 00:01:21,600 Speaker 5: Now they're catching a bid because we see the US 30 00:01:21,640 --> 00:01:23,959 Speaker 5: Treasury actually isn't going to be upping its supply in 31 00:01:24,000 --> 00:01:27,000 Speaker 5: the coming quarter in terms of bond auctions. That notably, 32 00:01:27,040 --> 00:01:28,760 Speaker 5: we have seen some worrying signs when it comes to 33 00:01:28,840 --> 00:01:32,720 Speaker 5: economic data today, Manufacturing in particular seeing a slowdown, but 34 00:01:32,760 --> 00:01:34,440 Speaker 5: the price is paid still. 35 00:01:34,240 --> 00:01:36,319 Speaker 3: On the upside. So we've got that issue of inflation. 36 00:01:36,400 --> 00:01:38,280 Speaker 5: How much we are actually seeing a cooling or a 37 00:01:38,319 --> 00:01:40,959 Speaker 5: steadying of the US economy. Remember we actually saw some 38 00:01:41,000 --> 00:01:43,240 Speaker 5: weaker jobs data today as well. Moving on, have a 39 00:01:43,280 --> 00:01:45,320 Speaker 5: look at what's happening in terms of you got individual 40 00:01:45,360 --> 00:01:49,200 Speaker 5: movers and from a crypto perspective, and I'm looking at 41 00:01:49,200 --> 00:01:52,080 Speaker 5: what's happening on the bitcoin down four point three percent 42 00:01:52,120 --> 00:01:54,520 Speaker 5: on the day, We're now sub sixt fifty seven thousand 43 00:01:54,560 --> 00:01:57,240 Speaker 5: dollars is where we currently trade. Maybe that's a macro picture, 44 00:01:57,280 --> 00:01:58,360 Speaker 5: Maybe that's a risk off feel. 45 00:01:58,480 --> 00:01:59,200 Speaker 3: What are you seeing on the. 46 00:01:59,160 --> 00:02:02,920 Speaker 4: Micro Let's start with AMD. Actually, this is a big 47 00:02:02,960 --> 00:02:06,720 Speaker 4: move lower in AMD despite actually upgrading their forecast for 48 00:02:06,840 --> 00:02:10,400 Speaker 4: sales of AI accelerators from three point five billion to 49 00:02:10,520 --> 00:02:13,440 Speaker 4: four billion. The problem was high hope, some in the 50 00:02:13,440 --> 00:02:16,920 Speaker 4: street seeing or hoping for guides of eight billion dollars. 51 00:02:16,960 --> 00:02:20,040 Speaker 4: We're talking about them three hundred x, which AMD is 52 00:02:20,080 --> 00:02:22,600 Speaker 4: going to put out into the market to compete against 53 00:02:22,680 --> 00:02:26,000 Speaker 4: Nvidia principally h two hundred. But they also sing a 54 00:02:26,040 --> 00:02:29,760 Speaker 4: slowdown in gaming. Old is new, right, AMD's the name 55 00:02:29,800 --> 00:02:32,240 Speaker 4: we used to talk about because you built your custom 56 00:02:32,360 --> 00:02:35,200 Speaker 4: rig with AMD GPU if you want to play high 57 00:02:35,240 --> 00:02:37,240 Speaker 4: performance games. We'll come back to that in just a 58 00:02:37,240 --> 00:02:40,679 Speaker 4: moment with our analyst, con Jensabani, and then Amazon Amazon. 59 00:02:41,000 --> 00:02:42,639 Speaker 6: Actually it's a kind of muted response. 60 00:02:42,639 --> 00:02:45,799 Speaker 4: We're up two point three percent strong first quarter, tep 61 00:02:45,880 --> 00:02:48,160 Speaker 4: it outlook for sales in the second quarter. But the 62 00:02:48,240 --> 00:02:52,240 Speaker 4: story is AWS annual revenue run rate of one hundred 63 00:02:52,320 --> 00:02:53,040 Speaker 4: billion dollars. 64 00:02:53,280 --> 00:02:55,080 Speaker 6: But the devil's in the detail. 65 00:02:55,120 --> 00:02:58,040 Speaker 4: And it was just one sentence from Brian Zawski, the CFO, 66 00:02:58,680 --> 00:03:02,600 Speaker 4: that generative AI revenue run rate in the multiple billions 67 00:03:02,600 --> 00:03:04,720 Speaker 4: of dollars, and that seems to be enough to show 68 00:03:04,720 --> 00:03:07,160 Speaker 4: that AI is actually starting to show up in the financials. 69 00:03:07,240 --> 00:03:08,600 Speaker 6: Let's dig into Amazon's results. 70 00:03:08,800 --> 00:03:11,640 Speaker 4: After the company's cloudion, it posted it's strongest sales growth 71 00:03:11,639 --> 00:03:12,000 Speaker 4: in the year. 72 00:03:12,160 --> 00:03:13,480 Speaker 6: We're bloomed by Spencer Sopa. 73 00:03:13,560 --> 00:03:16,560 Speaker 4: Spencer, you were on that media call with Brian Ozowski, 74 00:03:16,600 --> 00:03:18,320 Speaker 4: and I think that's the focus. 75 00:03:17,960 --> 00:03:18,800 Speaker 6: Here, isn't it. 76 00:03:18,800 --> 00:03:21,160 Speaker 4: It's the AI is a real thing that makes real 77 00:03:21,200 --> 00:03:22,040 Speaker 4: money sort of. 78 00:03:23,080 --> 00:03:27,720 Speaker 7: Yeah, the profitability for AWS and the quarter was huge. 79 00:03:28,440 --> 00:03:31,320 Speaker 7: You know, it accounts for less than twenty percent of 80 00:03:31,360 --> 00:03:35,280 Speaker 7: all Amazon revenue, but it's like two thirds of its profit. 81 00:03:35,440 --> 00:03:36,760 Speaker 1: So that was big. 82 00:03:36,800 --> 00:03:39,240 Speaker 7: And then the question for the investors is, you know, 83 00:03:39,280 --> 00:03:41,200 Speaker 7: what's the pace of investment going to look like and 84 00:03:41,680 --> 00:03:44,240 Speaker 7: how are these margins going to look as Amazon continues 85 00:03:44,280 --> 00:03:47,160 Speaker 7: to invest in new data centers to fuel this boom, 86 00:03:47,360 --> 00:03:50,040 Speaker 7: and there is a little bit of just some breadcrumbs dropped. 87 00:03:50,080 --> 00:03:52,680 Speaker 7: Amazon said it dropped about fourteen billion in the first 88 00:03:52,760 --> 00:03:54,400 Speaker 7: quarter on data centers, and it said that'll be the 89 00:03:54,440 --> 00:03:56,640 Speaker 7: low point for the rest of the year, so they're 90 00:03:56,640 --> 00:03:59,200 Speaker 7: probably looking at about, you know, north of fifty billion 91 00:03:59,520 --> 00:04:02,920 Speaker 7: in data center investment at least this year. 92 00:04:03,640 --> 00:04:06,600 Speaker 5: Nenevertheless, managed to support that operating margin what was it, 93 00:04:06,640 --> 00:04:09,720 Speaker 5: thirty seven point six percent whyer since they started disclosing 94 00:04:09,760 --> 00:04:12,600 Speaker 5: what it was and breaking out AWS. But the bread 95 00:04:12,600 --> 00:04:14,520 Speaker 5: and buffer that we all know Amazon for in many 96 00:04:14,520 --> 00:04:15,840 Speaker 5: ways is the e commerce play. 97 00:04:15,960 --> 00:04:17,840 Speaker 3: And how's the consumer looking for them right now? 98 00:04:18,080 --> 00:04:19,520 Speaker 6: Yeah, that's where things were a little soft. 99 00:04:19,520 --> 00:04:21,919 Speaker 7: The overall revenue guidance was a little light for the 100 00:04:21,960 --> 00:04:25,279 Speaker 7: current quarter, and they said that consumers are definitely pinching 101 00:04:25,320 --> 00:04:29,240 Speaker 7: their pennies there. The average order size is smaller, and 102 00:04:29,360 --> 00:04:32,440 Speaker 7: so that hurts the margins of the e commerce business 103 00:04:32,440 --> 00:04:35,680 Speaker 7: because if you're shipping less expensive things, it still costs 104 00:04:35,680 --> 00:04:37,800 Speaker 7: the same amount to process and ship those items. So 105 00:04:38,880 --> 00:04:42,360 Speaker 7: the e commerce outlook is good, just not nearly as 106 00:04:42,360 --> 00:04:44,920 Speaker 7: good as AWS was, and they're definitely seeing some signs 107 00:04:44,920 --> 00:04:46,080 Speaker 7: of consumer strength. 108 00:04:46,240 --> 00:04:48,599 Speaker 3: We've got the Pinterest CEO coming on a little bit later. 109 00:04:48,640 --> 00:04:51,160 Speaker 5: We're being asking a lot about advertising, and of course 110 00:04:51,200 --> 00:04:54,640 Speaker 5: they've got a partnership with Amazon. How is prime ads looking, 111 00:04:54,680 --> 00:04:57,240 Speaker 5: How is that particular part of this newer part of 112 00:04:57,240 --> 00:04:57,839 Speaker 5: the business doing. 113 00:04:58,400 --> 00:05:00,919 Speaker 7: So Their ad business is still strong, still predominantly the 114 00:05:00,960 --> 00:05:03,479 Speaker 7: sponsored ads things that you see on the actual website. 115 00:05:03,600 --> 00:05:06,840 Speaker 7: There wasn't a lot of clarity about the contribution from 116 00:05:06,920 --> 00:05:10,040 Speaker 7: the video ads that they've added. Analyser estimating somewhere in 117 00:05:10,080 --> 00:05:12,960 Speaker 7: the realm of I think five billion was the last 118 00:05:12,960 --> 00:05:16,400 Speaker 7: I saw for the year from that business. But it's 119 00:05:16,440 --> 00:05:19,760 Speaker 7: a yeah, there wasn't a lot of clarity on exactly 120 00:05:19,760 --> 00:05:23,760 Speaker 7: what it's adding. An Amazon emphasized, look where we're going 121 00:05:23,839 --> 00:05:26,280 Speaker 7: to be lighter on the advertising, the most other programming 122 00:05:26,279 --> 00:05:28,240 Speaker 7: and television and that sort of thing. If you watch 123 00:05:28,279 --> 00:05:31,719 Speaker 7: Prime Video, you'll see fewer advertisements. So they're definitely, you know, 124 00:05:31,839 --> 00:05:34,760 Speaker 7: moving delicately on that new revenue source. 125 00:05:34,839 --> 00:05:37,320 Speaker 5: Yeah, don't want to put us off of our watching Spencer. 126 00:05:37,360 --> 00:05:38,800 Speaker 5: It's so nice to have him here in New York. 127 00:05:39,000 --> 00:05:41,680 Speaker 5: Spencer sofa on all things Amazon. Meanwhile, we are sticking 128 00:05:41,680 --> 00:05:44,159 Speaker 5: on this earnings. Let's break down AMD. Look, it was 129 00:05:44,160 --> 00:05:47,320 Speaker 5: giving a disappointing forecast. In particular, there was sluggishness when 130 00:05:47,320 --> 00:05:48,800 Speaker 5: it came to gaming demand. We want to bring in 131 00:05:48,839 --> 00:05:53,040 Speaker 5: Bloemberg Intelligence Senior analyst Kunjan Sabani, And it really seems 132 00:05:53,040 --> 00:05:55,680 Speaker 5: to be Q two. Everyone slightly focusing in on because 133 00:05:55,720 --> 00:05:56,360 Speaker 5: Q you are not good. 134 00:05:58,000 --> 00:06:01,520 Speaker 8: Yeah, exactly, I mean fundamentally the already remains intact. It's 135 00:06:01,600 --> 00:06:07,240 Speaker 8: that Sentimentally, it didn't beat enough the high lofty investor expectations, 136 00:06:07,360 --> 00:06:10,159 Speaker 8: especially for the GPU numbers coming into the earnings. A 137 00:06:10,240 --> 00:06:13,240 Speaker 8: second point is the rest of the non AI business 138 00:06:13,360 --> 00:06:16,400 Speaker 8: is growing through a persistence slump, which is being heavily 139 00:06:16,600 --> 00:06:18,800 Speaker 8: on all the AI goodness, so over all at the 140 00:06:18,800 --> 00:06:21,599 Speaker 8: company level, actually, the EPs numbers for twenty four and 141 00:06:21,640 --> 00:06:24,120 Speaker 8: twenty four came down at had bit. That's not what 142 00:06:24,200 --> 00:06:27,039 Speaker 8: you want to see from a flying AI flying high name. 143 00:06:27,240 --> 00:06:30,400 Speaker 4: I was trying to unpick what Lisa Sue is saying. 144 00:06:31,240 --> 00:06:34,039 Speaker 4: It seemed in the first instance she was saying AMD 145 00:06:34,200 --> 00:06:37,760 Speaker 4: is supply constrained. In other words, there's great demand for 146 00:06:37,800 --> 00:06:41,000 Speaker 4: the AI accelerator product, they just can't get enough of them. 147 00:06:41,360 --> 00:06:43,479 Speaker 4: She data said in the call. Actually that's not the case. 148 00:06:44,040 --> 00:06:46,640 Speaker 4: The full year guy doesn't factor in any supply constraint. 149 00:06:47,240 --> 00:06:50,800 Speaker 4: What is the story here with demand versus supply? The 150 00:06:50,880 --> 00:06:53,200 Speaker 4: mi I three hundred X clarify from. 151 00:06:53,120 --> 00:06:55,839 Speaker 8: Our perspective, the demand continues to run higher. Is just 152 00:06:55,880 --> 00:06:59,080 Speaker 8: supply is not binary the way people think, so they 153 00:06:59,120 --> 00:07:02,120 Speaker 8: do the second quarter supply is constrained. There will be 154 00:07:02,160 --> 00:07:04,080 Speaker 8: more supply coming in in three Q and four Q, 155 00:07:04,360 --> 00:07:06,440 Speaker 8: and there's only so much they can ship on the 156 00:07:06,480 --> 00:07:08,440 Speaker 8: second half of the year, and The second point to 157 00:07:08,520 --> 00:07:12,840 Speaker 8: remember is there's all these high, crazy high expectation numbers 158 00:07:12,880 --> 00:07:15,520 Speaker 8: coming from the byside, where people are going in and 159 00:07:15,680 --> 00:07:18,800 Speaker 8: evaluating how much supply is coming in and multiplying that 160 00:07:18,880 --> 00:07:20,200 Speaker 8: number of by based on how. 161 00:07:20,080 --> 00:07:21,560 Speaker 6: Many units the MD can ship. 162 00:07:21,760 --> 00:07:22,920 Speaker 1: But that's not how it works. 163 00:07:23,000 --> 00:07:24,960 Speaker 8: The supply when it comes in doesn't run one hundred 164 00:07:24,960 --> 00:07:27,640 Speaker 8: person utilization and yield and et cetera. So it's not 165 00:07:27,720 --> 00:07:29,880 Speaker 8: a linear equation that you can extrapolate. 166 00:07:30,000 --> 00:07:35,240 Speaker 4: You hear that buyside, you've got crazy high expectations. Even so, 167 00:07:35,280 --> 00:07:38,480 Speaker 4: do we think that AMD gave enough evidence they will 168 00:07:38,480 --> 00:07:41,920 Speaker 4: take market share from Nvidia, which is so far ahead 169 00:07:42,120 --> 00:07:43,600 Speaker 4: in the AI accelerator race. 170 00:07:44,200 --> 00:07:48,000 Speaker 8: We believe so, like they've showcased enough engagements both at 171 00:07:48,040 --> 00:07:50,760 Speaker 8: the cloud and the enterprise customer. And the second part 172 00:07:50,800 --> 00:07:54,520 Speaker 8: is more important because the next wave of increasing capex 173 00:07:54,640 --> 00:07:57,560 Speaker 8: is going to come from the enterprise customers, especially in 174 00:07:57,600 --> 00:07:59,880 Speaker 8: the inference where the MI three hundred sort of have 175 00:08:00,440 --> 00:08:02,080 Speaker 8: a more competitive positioning. 176 00:08:02,600 --> 00:08:05,800 Speaker 4: Bloomberg Intelligence Senior analyst Kunjen Sabani check out his research 177 00:08:06,000 --> 00:08:08,520 Speaker 4: on the Bloomberg terminal. Let's keep a conversation going with 178 00:08:08,600 --> 00:08:12,640 Speaker 4: Daniel o'reagan, Managing Director, of Global Equities at Missuo Americas. 179 00:08:12,720 --> 00:08:14,160 Speaker 6: Let's start with AMD. 180 00:08:15,040 --> 00:08:18,520 Speaker 4: Let's set a baseline that expectations were high, and we 181 00:08:18,640 --> 00:08:20,680 Speaker 4: got a raised forecast, and it doesn't. 182 00:08:20,440 --> 00:08:21,520 Speaker 6: Seem to have been good enough. 183 00:08:21,760 --> 00:08:22,520 Speaker 1: Yeah, precisely. 184 00:08:22,560 --> 00:08:25,000 Speaker 9: I think your previous guests did an incredible job of 185 00:08:25,000 --> 00:08:28,080 Speaker 9: outlining exactly what went down. Listen results were great, they 186 00:08:28,080 --> 00:08:29,840 Speaker 9: were tremendous. I think in any other tape this name 187 00:08:29,840 --> 00:08:32,120 Speaker 9: would be trading a little bit higher. I just think 188 00:08:32,200 --> 00:08:34,760 Speaker 9: expectations got a little ahead of themselves. So she was 189 00:08:34,840 --> 00:08:37,319 Speaker 9: very prudent last night, raising GPU guides from three and 190 00:08:37,320 --> 00:08:40,240 Speaker 9: a half billion to four. Again, we heard that the 191 00:08:40,280 --> 00:08:42,720 Speaker 9: bus I was looking for closer to six, maybe even seven. 192 00:08:43,280 --> 00:08:45,040 Speaker 9: Long story short, as we're sticking with it, we like 193 00:08:45,080 --> 00:08:48,160 Speaker 9: it down here. There are other levers to pull also too. 194 00:08:48,400 --> 00:08:51,199 Speaker 9: If you're a massive hyperscaler looking to secure as many 195 00:08:51,280 --> 00:08:54,640 Speaker 9: chips as possible, you definitely want to diversify your offerings 196 00:08:54,640 --> 00:08:56,600 Speaker 9: instead of just having all your chips in one basket 197 00:08:56,640 --> 00:09:00,240 Speaker 9: with Nvidia. You think there should be other people that 198 00:09:00,280 --> 00:09:02,920 Speaker 9: supply your chips, and I think AMT probably fits that bill. 199 00:09:03,160 --> 00:09:05,000 Speaker 5: Can you go into the other levers that you just 200 00:09:05,040 --> 00:09:07,200 Speaker 5: said that they have to pull What in particular do 201 00:09:07,200 --> 00:09:08,679 Speaker 5: you want to see pulled, Daniel. 202 00:09:08,600 --> 00:09:09,440 Speaker 1: That's a great question. 203 00:09:09,520 --> 00:09:13,680 Speaker 9: So the gaming side was actually one lackluster area for 204 00:09:13,720 --> 00:09:16,200 Speaker 9: next quarter, But I think more importantly going forward, there's 205 00:09:16,240 --> 00:09:19,600 Speaker 9: potential for an enterprise refresh, especially on the back of COVID. 206 00:09:19,880 --> 00:09:22,160 Speaker 9: A lot of Fortune one hundred, Fortune five hundred companies 207 00:09:22,200 --> 00:09:24,760 Speaker 9: have old legacy systems that they. 208 00:09:24,600 --> 00:09:25,559 Speaker 1: Have to rip and replace. 209 00:09:25,840 --> 00:09:27,560 Speaker 9: That could bode well for them in the second half 210 00:09:27,559 --> 00:09:29,800 Speaker 9: of twenty twenty five or even earlier twenty twenty five. 211 00:09:30,360 --> 00:09:33,440 Speaker 5: Okay, interesting, I want to pivot away therefore, not just 212 00:09:34,200 --> 00:09:36,280 Speaker 5: well a boy from AMD, but more broadly looking at 213 00:09:36,320 --> 00:09:38,120 Speaker 5: the cloud and some of those hyper scaleres that you 214 00:09:38,160 --> 00:09:40,000 Speaker 5: say are going to be the end demand for an AMD. 215 00:09:40,360 --> 00:09:42,800 Speaker 3: Amazon today coming out looking really. 216 00:09:42,559 --> 00:09:44,439 Speaker 5: Strong when it comes to it's aws, when it comes 217 00:09:44,440 --> 00:09:47,640 Speaker 5: to its AI focus is more broadly that the level 218 00:09:47,640 --> 00:09:49,360 Speaker 5: that you want to see continuing to be pulled. 219 00:09:49,120 --> 00:09:49,760 Speaker 3: By any Jesse. 220 00:09:50,440 --> 00:09:52,800 Speaker 9: Yeah, So that conference call last night was one of 221 00:09:52,840 --> 00:09:56,000 Speaker 9: the most polish I've listened to realllly in years, maybe 222 00:09:56,040 --> 00:09:58,480 Speaker 9: on the back of the Metal one from two quarters ago. 223 00:10:00,120 --> 00:10:03,439 Speaker 9: She basically said that this opportunity with AI is almost 224 00:10:03,440 --> 00:10:05,120 Speaker 9: as tremendous as anything he's ever seen. 225 00:10:05,160 --> 00:10:07,400 Speaker 1: And they're willing to spend tens of billions of. 226 00:10:07,360 --> 00:10:10,560 Speaker 9: Dollars to reap the rewards later on, and they're not 227 00:10:10,600 --> 00:10:13,240 Speaker 9: afraid to spend. And I wouldn't bet against these guys. 228 00:10:13,320 --> 00:10:16,120 Speaker 9: We've literally seen it for eighteen years. They identify a 229 00:10:16,160 --> 00:10:18,480 Speaker 9: massive technology, they invest aggressively. 230 00:10:18,960 --> 00:10:20,959 Speaker 1: Profits and margins get hit a little bit, but. 231 00:10:20,920 --> 00:10:24,280 Speaker 9: Then later on profitability hockey sticks as everybody comes to 232 00:10:24,320 --> 00:10:26,439 Speaker 9: realize these guys are ahead of the curve. I think 233 00:10:26,440 --> 00:10:28,040 Speaker 9: the same thing's going to happen with Amazon. And I 234 00:10:28,080 --> 00:10:30,720 Speaker 9: also think the spending votes very very well for the 235 00:10:30,760 --> 00:10:33,520 Speaker 9: supply chain names for example, like the NVIDIAs and the 236 00:10:33,520 --> 00:10:35,880 Speaker 9: AMDs of the world, because they are the arms. 237 00:10:35,640 --> 00:10:37,160 Speaker 1: Providers for this AI race. 238 00:10:37,320 --> 00:10:39,320 Speaker 9: So I think the journal was positive for the entire 239 00:10:39,320 --> 00:10:40,800 Speaker 9: AI ecosystem. 240 00:10:41,040 --> 00:10:43,400 Speaker 4: Daniel, I'm interested in that thesis. You said it was 241 00:10:43,480 --> 00:10:46,479 Speaker 4: the most bullish call from Andy Jesse and Brian Azowski 242 00:10:46,520 --> 00:10:50,280 Speaker 4: you've heard in some time. Was it light on details though? 243 00:10:50,600 --> 00:10:52,840 Speaker 4: I mean, think about what you just said. The one 244 00:10:52,880 --> 00:10:55,400 Speaker 4: thing we didn't hear is any sort of tangible number 245 00:10:55,440 --> 00:10:59,160 Speaker 4: for CAPEX other than Brian saying will be meaningfully higher 246 00:10:59,440 --> 00:11:02,640 Speaker 4: in twenty two money full, right. 247 00:11:02,760 --> 00:11:04,959 Speaker 9: I think that's a great question, and I don't think 248 00:11:04,960 --> 00:11:08,560 Speaker 9: they wanted to pigeon and pole themselves with just specifically 249 00:11:08,640 --> 00:11:13,040 Speaker 9: quantifying it. The fact that they used overwhelming or significant 250 00:11:13,520 --> 00:11:15,280 Speaker 9: I think that gave them room to kind of fall 251 00:11:15,280 --> 00:11:17,160 Speaker 9: down later on. At the end of the day, they 252 00:11:17,160 --> 00:11:19,920 Speaker 9: know that there's a massive opportunity, They're okay to spend 253 00:11:19,960 --> 00:11:22,720 Speaker 9: aggressively to take advantage of that. One thing that I 254 00:11:22,760 --> 00:11:25,880 Speaker 9: think that could be different this time is back in 255 00:11:26,000 --> 00:11:29,679 Speaker 9: previous investment cycles, they didn't have as much profitability as 256 00:11:29,720 --> 00:11:34,079 Speaker 9: they do now. Amazon has multiple mature businesses, right, It's 257 00:11:34,080 --> 00:11:37,200 Speaker 9: not just retail. They have retail, they have AWS now, 258 00:11:37,200 --> 00:11:40,160 Speaker 9: they have advertising, they have logistics, they have all these 259 00:11:40,200 --> 00:11:43,360 Speaker 9: other profitable businesses that I hope or think that could 260 00:11:43,400 --> 00:11:46,480 Speaker 9: blunt the impact of profitability. 261 00:11:45,920 --> 00:11:46,640 Speaker 1: And also too. 262 00:11:46,760 --> 00:11:49,080 Speaker 9: On the call, they reiterated over and over again that 263 00:11:49,120 --> 00:11:51,720 Speaker 9: they think they can do both. They think they can 264 00:11:51,760 --> 00:11:54,960 Speaker 9: be efficient and they think they can drive growth at 265 00:11:55,000 --> 00:11:57,120 Speaker 9: the same time. Let's see if they can thread the needle. 266 00:11:57,120 --> 00:11:59,319 Speaker 9: But like I said earlier, I wouldn't bet against these guys. 267 00:12:00,280 --> 00:12:03,640 Speaker 4: If AWS is the cash cow and the bright spot 268 00:12:03,679 --> 00:12:07,560 Speaker 4: for everyone, what's the next best thing in the multifaceted business. 269 00:12:07,679 --> 00:12:11,480 Speaker 1: Daniel, that's a great question. I really don't know. 270 00:12:11,520 --> 00:12:15,000 Speaker 9: I think it's AWS for now. One area that was 271 00:12:15,040 --> 00:12:17,520 Speaker 9: weaker last night in terms of guidance, I don't even 272 00:12:17,520 --> 00:12:21,040 Speaker 9: think really matters. They said that the European consumer was lackluster, 273 00:12:21,120 --> 00:12:22,280 Speaker 9: which her top line. 274 00:12:22,520 --> 00:12:23,640 Speaker 1: I don't really talk. 275 00:12:23,480 --> 00:12:26,320 Speaker 9: To any investors that are concerned much about their European 276 00:12:26,360 --> 00:12:29,880 Speaker 9: consumer business. So again, I think the focus is on AWS, 277 00:12:30,200 --> 00:12:32,760 Speaker 9: but going a little deeper, the operating profit for their 278 00:12:32,800 --> 00:12:35,920 Speaker 9: retail business was tremendous, Like this was their bread and 279 00:12:35,960 --> 00:12:39,199 Speaker 9: butter ten years ago, and it's like they're growing past 280 00:12:39,240 --> 00:12:41,920 Speaker 9: that now. And to AWS, I think it's just to 281 00:12:41,960 --> 00:12:44,760 Speaker 9: your dispenser's point earlier, it's just going to continue to 282 00:12:44,880 --> 00:12:47,760 Speaker 9: drive the bottom line and the entire ecosystem is just 283 00:12:47,840 --> 00:12:48,480 Speaker 9: going to get better. 284 00:12:48,880 --> 00:12:53,079 Speaker 5: And meanwhile, they're not particularly articulating CAPEX when it comes 285 00:12:53,080 --> 00:12:53,880 Speaker 5: to the amount of spending. 286 00:12:53,880 --> 00:12:56,040 Speaker 3: But what we can glean from Microsoft. 287 00:12:55,720 --> 00:12:58,800 Speaker 5: From Amazon, from IBM, from anyone that's providing some sort 288 00:12:58,840 --> 00:13:01,240 Speaker 5: of cloud offering is that they spending in this spending big. 289 00:13:01,880 --> 00:13:04,560 Speaker 5: What do we therefore worry about or be optimistic about 290 00:13:04,559 --> 00:13:06,360 Speaker 5: when it comes to video that's coming or the other 291 00:13:06,400 --> 00:13:09,599 Speaker 5: big chip names that need this sort of exuberance to 292 00:13:09,640 --> 00:13:13,040 Speaker 5: suspend the market cap that we've continued to see. 293 00:13:14,800 --> 00:13:15,920 Speaker 1: You know, that's a great question. 294 00:13:16,240 --> 00:13:18,280 Speaker 9: We kind of say that it's the trillion dollar question, 295 00:13:18,400 --> 00:13:22,000 Speaker 9: right is how many more quarters are these AI spenders 296 00:13:22,040 --> 00:13:24,440 Speaker 9: going to get the hall pass from investors and tell hey, 297 00:13:24,679 --> 00:13:26,520 Speaker 9: show me the money, show me the ROI. You spend 298 00:13:26,520 --> 00:13:29,400 Speaker 9: tens of billions of dollars on this AI buildout, When 299 00:13:29,400 --> 00:13:30,440 Speaker 9: are we going to get paid back? 300 00:13:30,720 --> 00:13:31,959 Speaker 1: The jury is still out right, we. 301 00:13:31,880 --> 00:13:34,120 Speaker 9: Don't know exactly what's going to happen Jess yet. How 302 00:13:34,640 --> 00:13:36,720 Speaker 9: last night Andy Jesse did say a few times that 303 00:13:36,760 --> 00:13:41,280 Speaker 9: they're already seeing billions of dollars of AI related revenue 304 00:13:41,280 --> 00:13:44,240 Speaker 9: on AWS, so I don't even want to say it's 305 00:13:44,280 --> 00:13:47,480 Speaker 9: brings shoots, but already making a good. 306 00:13:46,760 --> 00:13:47,960 Speaker 1: Headway in that segment. 307 00:13:48,200 --> 00:13:50,480 Speaker 9: And if you remember last week we had amazing az 308 00:13:50,520 --> 00:13:53,720 Speaker 9: your numbers, is Microsoft ajurre actually accelerated year over year 309 00:13:54,240 --> 00:13:55,080 Speaker 9: on a big number. 310 00:13:55,280 --> 00:13:57,480 Speaker 1: Google Cloud obviously continues to do well. 311 00:13:57,640 --> 00:14:00,000 Speaker 9: So we've now heard from three of the major cloud 312 00:14:00,080 --> 00:14:03,160 Speaker 9: providers through the world's biggest hyperscalers come back with really 313 00:14:03,200 --> 00:14:05,880 Speaker 9: tremendous results. It's just it gets me pretty biled up 314 00:14:05,880 --> 00:14:06,280 Speaker 9: on space. 315 00:14:07,120 --> 00:14:09,400 Speaker 5: Daniel Reagan, thank you for being built up with us, 316 00:14:09,559 --> 00:14:12,640 Speaker 5: Managing director and Global Equities over at Azooho America's great 317 00:14:12,679 --> 00:14:13,440 Speaker 5: to have some time with you. 318 00:14:22,280 --> 00:14:23,800 Speaker 6: Here's some news time for talking. 319 00:14:23,880 --> 00:14:27,280 Speaker 4: Tech Binance founder Changpeng Jow was ordered to spend four 320 00:14:27,320 --> 00:14:30,800 Speaker 4: months in prison for failures that allowed cyber criminals and 321 00:14:30,880 --> 00:14:35,240 Speaker 4: terrorist groups to freely trade on the world's largest cryptocurrency exchange. 322 00:14:35,480 --> 00:14:37,200 Speaker 6: The sentence was far below. 323 00:14:36,960 --> 00:14:39,960 Speaker 4: The three years requested by prosecutors who had sought to 324 00:14:40,000 --> 00:14:43,440 Speaker 4: make an example out of Joo to a heavily scrutinized 325 00:14:43,480 --> 00:14:46,920 Speaker 4: industry which is rebounding frankly from a slew of high 326 00:14:46,960 --> 00:14:51,360 Speaker 4: profile scandals. Plus, Paramount Global agreed to extend contract renewal 327 00:14:51,440 --> 00:14:55,160 Speaker 4: talks with Charter Communications, the owner of CBS and MTV, 328 00:14:55,280 --> 00:14:58,040 Speaker 4: is said to have extended talks with Charter, one of 329 00:14:58,080 --> 00:15:01,040 Speaker 4: the largest cable TV providers, the head of last night's 330 00:15:01,040 --> 00:15:05,080 Speaker 4: deadline preventing its channels from going dark on the cable service, 331 00:15:05,600 --> 00:15:09,000 Speaker 4: and Tesla's pivotal partnership with Buydo in China may amount 332 00:15:09,120 --> 00:15:11,800 Speaker 4: to a u turn of sorts for Elon Musk, the 333 00:15:11,840 --> 00:15:15,480 Speaker 4: Tesla CEO has long claimed his company can offer self 334 00:15:15,560 --> 00:15:19,080 Speaker 4: driving without HD maps, but in order to go to 335 00:15:19,160 --> 00:15:22,160 Speaker 4: market with FSD in China, he had no choice but 336 00:15:22,280 --> 00:15:24,880 Speaker 4: to join with a local partner for a mapping license, 337 00:15:25,040 --> 00:15:25,640 Speaker 4: which was by. 338 00:15:25,600 --> 00:15:26,920 Speaker 6: Do carroc Oh. 339 00:15:26,960 --> 00:15:29,680 Speaker 5: Boy, let's stick with Tesla because there is so much 340 00:15:29,800 --> 00:15:32,360 Speaker 5: news which ed you and team have been breaking. The 341 00:15:32,440 --> 00:15:37,000 Speaker 5: company actually eliminating almost its entire supercharger organization, which is built, 342 00:15:37,200 --> 00:15:39,920 Speaker 5: you know, a vast network of public charging stations that 343 00:15:39,960 --> 00:15:42,720 Speaker 5: basically every major automaker is in the process of trying 344 00:15:42,720 --> 00:15:45,080 Speaker 5: to tap into in the United States. We've then had 345 00:15:45,120 --> 00:15:47,200 Speaker 5: breaking news that well, the head of HR is now 346 00:15:47,200 --> 00:15:50,440 Speaker 5: stepping down me most Crowdrudell is with us and Craig. 347 00:15:50,520 --> 00:15:53,200 Speaker 5: Let's just start on the supercharger element of this, because 348 00:15:53,240 --> 00:15:57,280 Speaker 5: this has got a lot of well the auto industry worried. 349 00:15:57,520 --> 00:15:59,880 Speaker 3: I'm not sure of course whether internally at Tesla they're 350 00:16:00,200 --> 00:16:00,640 Speaker 3: warned too. 351 00:16:01,080 --> 00:16:05,200 Speaker 10: I think it's incredible in part because to Tesla's credit, 352 00:16:05,320 --> 00:16:08,240 Speaker 10: this was a fantastic business that they built over more 353 00:16:08,240 --> 00:16:10,640 Speaker 10: than a decade. I think, you know, you can sort 354 00:16:10,640 --> 00:16:13,440 Speaker 10: of quibble with, you know, some of the promises made 355 00:16:13,480 --> 00:16:17,080 Speaker 10: and promises not necessarily kept that Musk has offered over 356 00:16:17,120 --> 00:16:20,000 Speaker 10: the years. But what this company has done is built 357 00:16:20,240 --> 00:16:25,400 Speaker 10: a really solid and extensive, fast, reliable charging network. And 358 00:16:25,440 --> 00:16:28,440 Speaker 10: you hear that, you know, from Tesla customers all over 359 00:16:28,440 --> 00:16:31,320 Speaker 10: the place, you know, when they talk about why they 360 00:16:31,320 --> 00:16:33,320 Speaker 10: love their car so much. This is one of the 361 00:16:33,440 --> 00:16:36,800 Speaker 10: sort of main you know, positives that that is often 362 00:16:36,840 --> 00:16:39,000 Speaker 10: pointed to is that you know, when you're in need 363 00:16:39,040 --> 00:16:42,120 Speaker 10: of a top up, Tesla has, you know, the charging 364 00:16:42,120 --> 00:16:45,240 Speaker 10: network to support you. And so for them to you know, 365 00:16:45,320 --> 00:16:49,200 Speaker 10: make this sudden decision to get rid of, as you know, 366 00:16:49,760 --> 00:16:52,800 Speaker 10: roughly five hundred people, including the head of this business, 367 00:16:52,800 --> 00:16:55,400 Speaker 10: who they just put forward in front of investors a 368 00:16:55,440 --> 00:16:58,360 Speaker 10: little over a year ago, as you know, an example 369 00:16:58,400 --> 00:17:00,880 Speaker 10: of the deep bench they have behind me as really 370 00:17:00,960 --> 00:17:03,000 Speaker 10: is leading to a lot of people scratching their heads. 371 00:17:04,320 --> 00:17:06,720 Speaker 4: Craig, I want to bring you some breaking news that's 372 00:17:06,720 --> 00:17:09,680 Speaker 4: happened since you've set in the chair. What I'm hearing 373 00:17:09,920 --> 00:17:13,119 Speaker 4: and what I've reported just now with Donna Hole Bloomberg's 374 00:17:13,160 --> 00:17:17,879 Speaker 4: DNA Howe, is that Tesla's most senior HR executive, the 375 00:17:17,960 --> 00:17:23,760 Speaker 4: senior director, Ali Araballo, has actually left the company. My 376 00:17:23,880 --> 00:17:29,080 Speaker 4: suspicion issue was fired, but this is another example of 377 00:17:29,400 --> 00:17:32,960 Speaker 4: a high profile exec departure alongside a really big wave 378 00:17:33,400 --> 00:17:34,000 Speaker 4: of layoffs. 379 00:17:34,000 --> 00:17:35,960 Speaker 6: So I know that you're aware of this story, just 380 00:17:36,000 --> 00:17:36,840 Speaker 6: give us your reaction. 381 00:17:38,640 --> 00:17:41,119 Speaker 10: I think it's it is very interesting that this makes it, 382 00:17:41,160 --> 00:17:44,439 Speaker 10: you know, two and two days of major you know, 383 00:17:44,640 --> 00:17:48,679 Speaker 10: departures of senior women within this organization. I think it's 384 00:17:48,720 --> 00:17:51,320 Speaker 10: a company that you know, for the most part, when 385 00:17:51,400 --> 00:17:55,159 Speaker 10: you do tune into these events that Tesla puts on, 386 00:17:55,640 --> 00:17:58,880 Speaker 10: it is very much male dominated. And I mentioned that 387 00:17:58,920 --> 00:18:02,080 Speaker 10: Investor Day in March of last year, there were sixteen 388 00:18:02,119 --> 00:18:05,480 Speaker 10: executives who were trotted out along with Elon Musk. Only 389 00:18:05,520 --> 00:18:09,240 Speaker 10: two of those executives were women. I also just think that, 390 00:18:09,320 --> 00:18:13,520 Speaker 10: you know, this latest sort of drumbeat of news just 391 00:18:13,720 --> 00:18:16,119 Speaker 10: really sort of speaks to this idea of you know, 392 00:18:16,400 --> 00:18:21,480 Speaker 10: as you reported ed just last week, of chaos, right, 393 00:18:21,520 --> 00:18:24,640 Speaker 10: it really seems like a chaotic moment for this company 394 00:18:25,520 --> 00:18:29,360 Speaker 10: where you know, they're trying to sort of fix problems 395 00:18:29,359 --> 00:18:32,240 Speaker 10: that they don't have and not addressing problems that they 396 00:18:32,240 --> 00:18:32,600 Speaker 10: do have. 397 00:18:33,680 --> 00:18:35,920 Speaker 4: And there are many out there that would know Elon Musk, 398 00:18:36,160 --> 00:18:38,360 Speaker 4: to their mind, knows what he's doing and that the 399 00:18:38,400 --> 00:18:40,439 Speaker 4: testa will come through the other side. All we can 400 00:18:40,480 --> 00:18:43,600 Speaker 4: do is report what's happening inside Bloomberg's created ol. Thank 401 00:18:43,640 --> 00:18:46,720 Speaker 4: you very much. Now coming out, Microsoft reveals it invested 402 00:18:46,760 --> 00:18:49,560 Speaker 4: in open Ai and it fears of falling behind Google 403 00:18:49,760 --> 00:18:52,160 Speaker 4: in the race for AI dominance. We're bringing that Bloomberg 404 00:18:52,200 --> 00:18:52,800 Speaker 4: reporting next. 405 00:18:52,840 --> 00:18:54,680 Speaker 6: Stick with us. This is Bloomberg Technology. 406 00:19:11,200 --> 00:19:15,480 Speaker 4: Microsoft's motivation for investing heavily and partnering with open Ai 407 00:19:16,080 --> 00:19:19,440 Speaker 4: came from a sense of falling badly behind Google. That's 408 00:19:19,440 --> 00:19:22,399 Speaker 4: according to an internal email released them in the Justice 409 00:19:22,400 --> 00:19:25,280 Speaker 4: Department's antitrust case against the search giant. 410 00:19:25,359 --> 00:19:26,359 Speaker 6: Joining us as Bloombergs. 411 00:19:26,359 --> 00:19:29,440 Speaker 4: Mike Shephard out of DC leads the coverage of politics 412 00:19:29,440 --> 00:19:32,639 Speaker 4: and tech. I love these investigations because I love the 413 00:19:32,640 --> 00:19:34,879 Speaker 4: paper trail, and this was a pretty juicy one to 414 00:19:34,920 --> 00:19:35,800 Speaker 4: get some details on. 415 00:19:37,440 --> 00:19:40,879 Speaker 11: Yes, this really was, and it provides yet another window, 416 00:19:41,000 --> 00:19:45,800 Speaker 11: actually specifically into the battle between the biggest tech companies 417 00:19:45,960 --> 00:19:49,960 Speaker 11: over artificial intelligence. This is such an important and emerging 418 00:19:50,040 --> 00:19:53,320 Speaker 11: area for them, and such a potentially lucrative one too. 419 00:19:53,840 --> 00:19:56,240 Speaker 11: We saw it show up in the earnings reports that 420 00:19:56,359 --> 00:20:00,960 Speaker 11: tumbled in last week. Cloud revenue was up for Microsoft 421 00:20:01,000 --> 00:20:03,920 Speaker 11: and Google in part on AI services and that helped 422 00:20:03,960 --> 00:20:06,480 Speaker 11: their shares, So this is an area where they want 423 00:20:06,520 --> 00:20:10,280 Speaker 11: to maintain and edge an advantage. However, it's also an 424 00:20:10,280 --> 00:20:14,200 Speaker 11: area of focus for regulators and prosecutors here. It did 425 00:20:14,280 --> 00:20:17,720 Speaker 11: happen to be mentioned in this antitrust case against Google, 426 00:20:17,960 --> 00:20:21,840 Speaker 11: and this is where the Microsoft internal email emerged. 427 00:20:22,000 --> 00:20:25,200 Speaker 5: And interestingly that it was news organizations that really pushed 428 00:20:25,240 --> 00:20:28,440 Speaker 5: for this document in its reductive form to be published. Mike, 429 00:20:28,960 --> 00:20:31,879 Speaker 5: we now have Thursday Friday upon us. They're going to 430 00:20:31,880 --> 00:20:35,879 Speaker 5: be the closing remarks right of this overall DOJ case 431 00:20:35,920 --> 00:20:39,080 Speaker 5: against alphabet Yes. 432 00:20:38,920 --> 00:20:39,840 Speaker 1: That's right, Carolina. 433 00:20:40,320 --> 00:20:43,840 Speaker 11: My colleague Leah Nylam will be covering that very closely 434 00:20:44,000 --> 00:20:45,800 Speaker 11: to see how this is going to end up. We 435 00:20:45,840 --> 00:20:49,160 Speaker 11: won't have a ruling right away in the case, probably 436 00:20:49,280 --> 00:20:52,879 Speaker 11: not until the summertime here, but this is one that 437 00:20:52,920 --> 00:20:55,639 Speaker 11: we're watching very closely because it is part of a 438 00:20:55,760 --> 00:21:01,000 Speaker 11: series of moves by the FTC and the Justice Department, 439 00:21:01,000 --> 00:21:04,200 Speaker 11: which is handling this case against the largest tech companies, 440 00:21:04,320 --> 00:21:08,800 Speaker 11: questioning whether they are engaging in anti competitive practices, and 441 00:21:08,840 --> 00:21:10,960 Speaker 11: they're looking at them on a series of fronts. When 442 00:21:10,960 --> 00:21:14,440 Speaker 11: it comes to artificial intelligence specifically, they're concerned that they're 443 00:21:14,840 --> 00:21:18,560 Speaker 11: trying to hoover up or get involved with, or lock 444 00:21:18,640 --> 00:21:22,320 Speaker 11: in relationships with these startups like open Ai, like deep 445 00:21:22,359 --> 00:21:26,040 Speaker 11: Mind in a way that preserves their market dominance. And 446 00:21:26,040 --> 00:21:30,080 Speaker 11: they're also worried about these interlocking directorships too among these 447 00:21:30,119 --> 00:21:31,520 Speaker 11: AI startups as well. 448 00:21:31,920 --> 00:21:34,760 Speaker 5: UK CMA Key and I to Mike Shepard just so 449 00:21:34,880 --> 00:21:36,640 Speaker 5: on the nose when it comes to Washington, we thank 450 00:21:36,680 --> 00:21:37,240 Speaker 5: you so much. 451 00:21:45,680 --> 00:21:49,040 Speaker 4: Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco, 452 00:21:49,160 --> 00:21:49,880 Speaker 4: Alan Hid. 453 00:21:49,720 --> 00:21:51,560 Speaker 3: In New York. And let's just quick check on these 454 00:21:51,600 --> 00:21:52,480 Speaker 3: markets because it's. 455 00:21:52,320 --> 00:21:54,359 Speaker 5: A macro day, it's a FED day, and we are 456 00:21:54,359 --> 00:21:57,040 Speaker 5: therefore perhaps a little bit of cautious trading ahead of 457 00:21:57,040 --> 00:21:59,320 Speaker 5: that all important two pm then two thirty pm press 458 00:21:59,320 --> 00:22:00,600 Speaker 5: conference FED chair. 459 00:22:00,440 --> 00:22:02,720 Speaker 3: Power're looking at the NASA currently down some six. 460 00:22:02,560 --> 00:22:04,680 Speaker 5: Tenths of a percent now, and in large part is 461 00:22:04,720 --> 00:22:07,639 Speaker 5: the chips that continue to fall. We'll dig into moment 462 00:22:07,720 --> 00:22:09,560 Speaker 5: why I'm looking at a ten year yield that actually 463 00:22:09,560 --> 00:22:10,160 Speaker 5: catches a bid. 464 00:22:10,160 --> 00:22:11,520 Speaker 3: That's as the US Treasury. 465 00:22:11,160 --> 00:22:13,600 Speaker 5: Says, Look, we're not going to be increasing the pace 466 00:22:13,600 --> 00:22:16,359 Speaker 5: of our auctions in the following quarters. So we're seeing 467 00:22:16,359 --> 00:22:19,280 Speaker 5: supply side playing to that. We're down some two basis points. 468 00:22:19,320 --> 00:22:21,280 Speaker 5: Even though we are still looking at the FED, I'm 469 00:22:21,280 --> 00:22:23,840 Speaker 5: looking at what's happening on bitcoin. Look, some of this anxiety, 470 00:22:23,880 --> 00:22:25,560 Speaker 5: some of this risk coming off the table, some of 471 00:22:25,600 --> 00:22:29,000 Speaker 5: the ETF slowing in terms of their inflows. It's just 472 00:22:29,000 --> 00:22:31,520 Speaker 5: pulling us down by almost five percent. We're below that 473 00:22:31,720 --> 00:22:35,200 Speaker 5: six well now below fifty seven thousand dollars mark when 474 00:22:35,240 --> 00:22:35,959 Speaker 5: it comes to bitcoin. 475 00:22:36,040 --> 00:22:37,720 Speaker 3: Move on some of the individual movers. 476 00:22:37,760 --> 00:22:39,880 Speaker 5: Now, I talked and I pushed ahead to the fact 477 00:22:39,960 --> 00:22:43,960 Speaker 5: that the chip stocks are really underwater today. Why AMD. Look, 478 00:22:43,960 --> 00:22:47,240 Speaker 5: we did see that tepid forecast. The market wanted to 479 00:22:47,280 --> 00:22:49,200 Speaker 5: see more when it comes to the MI three hundreds 480 00:22:49,240 --> 00:22:52,440 Speaker 5: in terms of their AI focus, and well, it's hitting 481 00:22:52,440 --> 00:22:54,040 Speaker 5: across some of the other big chip names. So we're 482 00:22:54,080 --> 00:22:56,160 Speaker 5: off by almost nine percent, let's call it on AMD. 483 00:22:56,240 --> 00:22:58,600 Speaker 5: I'm looking at Amazon, though, managing to post what is 484 00:22:58,640 --> 00:23:01,640 Speaker 5: strongest quarter for adlars growth that we've seen in several years, 485 00:23:01,720 --> 00:23:03,320 Speaker 5: or at least in a year. We're seeing twenty five 486 00:23:03,320 --> 00:23:05,680 Speaker 5: billion dollars being brought in. We're seeing overall still the 487 00:23:05,840 --> 00:23:08,080 Speaker 5: growth of one point seven percent, managing to be a 488 00:23:08,080 --> 00:23:11,119 Speaker 5: relief when it comes to Amazon and strong AI focus 489 00:23:11,280 --> 00:23:14,560 Speaker 5: multi billion dollar revenue run rate, and then we have Pinterest. 490 00:23:14,720 --> 00:23:17,080 Speaker 5: We're up twenty one percent on the day. Ed, this 491 00:23:17,200 --> 00:23:19,960 Speaker 5: is the best day since October twenty twenty for this 492 00:23:20,080 --> 00:23:22,359 Speaker 5: social media name, and we've finally got back to this 493 00:23:22,440 --> 00:23:25,200 Speaker 5: revenue run rate in excess of twenty percent growth. We're 494 00:23:25,200 --> 00:23:28,640 Speaker 5: seeing focus on gen Z. We're seeing a focus on shoppability. 495 00:23:28,840 --> 00:23:31,720 Speaker 5: We're seeing a management managing to build momentum, so say 496 00:23:31,720 --> 00:23:34,240 Speaker 5: the analysts, and we're going to be digging into it 497 00:23:34,280 --> 00:23:34,720 Speaker 5: in a moment. 498 00:23:34,760 --> 00:23:36,280 Speaker 6: I mean that is a big move. 499 00:23:36,359 --> 00:23:39,200 Speaker 4: I did not have Pinterest on my earnings BINGO cards. 500 00:23:39,200 --> 00:23:41,920 Speaker 4: So let's dive deeper into Pinterest and those first quarter 501 00:23:42,000 --> 00:23:45,720 Speaker 4: sales user growth with Pinterest. CEO Bill ready a bill, 502 00:23:45,880 --> 00:23:48,000 Speaker 4: terrific to have you on the program. 503 00:23:48,400 --> 00:23:49,840 Speaker 6: The story seems quite clear. 504 00:23:50,359 --> 00:23:55,000 Speaker 4: Pinterest pushing into shopping and Pinterest focusing on gen Z users. 505 00:23:55,080 --> 00:23:55,280 Speaker 6: Right. 506 00:23:55,520 --> 00:23:58,520 Speaker 4: My question to start what is the relationship in the 507 00:23:58,560 --> 00:24:02,000 Speaker 4: activity between the shopping and the gen Z uses. 508 00:24:03,440 --> 00:24:05,960 Speaker 12: Yeah, so you know we're finding our best product market 509 00:24:05,960 --> 00:24:08,560 Speaker 12: fit in years. We've hit an all time high with 510 00:24:08,680 --> 00:24:11,399 Speaker 12: users more than half a billion users and as you noted, 511 00:24:12,160 --> 00:24:14,680 Speaker 12: gen Z is our largest demographic. It's now more than 512 00:24:14,720 --> 00:24:17,320 Speaker 12: forty percent of our platform, and it's our fastest growing 513 00:24:17,359 --> 00:24:21,080 Speaker 12: demographic as well. And at the core that growth with 514 00:24:21,359 --> 00:24:25,240 Speaker 12: gen Z has been the rising actionability in the platform. 515 00:24:25,760 --> 00:24:28,360 Speaker 12: Pinterest is where gen Z goes to shop, and as 516 00:24:28,359 --> 00:24:30,760 Speaker 12: we've made Pinterest more actionable, so the people who can 517 00:24:30,800 --> 00:24:33,160 Speaker 12: get to more of the things they're finding on Pinterest. 518 00:24:33,560 --> 00:24:36,520 Speaker 12: We're seeing that work really well for users, where we've 519 00:24:36,560 --> 00:24:39,600 Speaker 12: accelerated user growth for seven straight quarters now. But it's 520 00:24:39,640 --> 00:24:43,439 Speaker 12: also cutting through for advertisers, where as you noted revenue 521 00:24:43,440 --> 00:24:47,159 Speaker 12: grow twenty three percent this quarter, nearly doubling our revenue 522 00:24:47,160 --> 00:24:49,760 Speaker 12: growth rate from last quarter. And so we're really seeing 523 00:24:49,800 --> 00:24:52,680 Speaker 12: this be quite synergistic between users finding the things that 524 00:24:52,760 --> 00:24:55,159 Speaker 12: they love on Pinterest and then advertisers finding this is 525 00:24:55,200 --> 00:24:57,399 Speaker 12: a great place for them to meet users that are 526 00:24:57,480 --> 00:24:59,000 Speaker 12: in market looking to shop and buy. 527 00:24:59,280 --> 00:25:01,680 Speaker 5: And that's just some of the synergies that you've managed 528 00:25:01,720 --> 00:25:04,000 Speaker 5: to bring to bear with Amazon, with Google, with. 529 00:25:04,000 --> 00:25:05,160 Speaker 3: Those ad partnerships. 530 00:25:05,160 --> 00:25:08,560 Speaker 5: Bill, how much of that advertising optic is thanks to 531 00:25:08,600 --> 00:25:09,600 Speaker 5: these third parties. 532 00:25:10,640 --> 00:25:13,480 Speaker 12: Well, you know, on the shop ability front, you know, 533 00:25:13,840 --> 00:25:16,400 Speaker 12: historically Pintress has solved digital window shopping. It was hard 534 00:25:16,400 --> 00:25:18,040 Speaker 12: to get to the things that you found on Pinterest. 535 00:25:18,640 --> 00:25:22,160 Speaker 12: We have opened the stores, and in doing that, we're 536 00:25:22,200 --> 00:25:25,880 Speaker 12: seeing that retailers broadly are finding great performance on Pinterest. 537 00:25:25,960 --> 00:25:28,720 Speaker 12: At the core of our revenue acceleration has been our 538 00:25:28,760 --> 00:25:34,280 Speaker 12: strength in low funnel actionability users that are clicking and buying. 539 00:25:34,440 --> 00:25:36,440 Speaker 12: We more than double the number of clicks we sent 540 00:25:36,480 --> 00:25:39,000 Speaker 12: to advertisers in Q four, and we did it again 541 00:25:39,119 --> 00:25:42,000 Speaker 12: in Q one. That is broad based, but we are 542 00:25:42,040 --> 00:25:46,359 Speaker 12: seeing our best strength with the largest, most sophisticated retailers 543 00:25:46,359 --> 00:25:47,320 Speaker 12: that provide really. 544 00:25:47,200 --> 00:25:48,480 Speaker 1: Great buying experiences. 545 00:25:48,760 --> 00:25:51,240 Speaker 12: We're quite pleased with that, and we also see that 546 00:25:51,280 --> 00:25:53,560 Speaker 12: the third party demand that we've brought onto the platform 547 00:25:53,880 --> 00:25:56,120 Speaker 12: is doing exactly what it was intended to do, which 548 00:25:56,160 --> 00:26:00,440 Speaker 12: is rounding out gaps in our auction and bringing more great, shoppable, 549 00:26:00,480 --> 00:26:04,080 Speaker 12: biable content onto Pinterest so that when users find what 550 00:26:04,119 --> 00:26:06,159 Speaker 12: they're looking for on Pinterest, they can easily click and 551 00:26:06,200 --> 00:26:06,440 Speaker 12: buy it. 552 00:26:08,440 --> 00:26:11,200 Speaker 4: This was a milestone quarter in the sense that global 553 00:26:11,200 --> 00:26:15,040 Speaker 4: monthly uses past half a billion for the first time. 554 00:26:15,760 --> 00:26:18,359 Speaker 4: You've put a lot of emphasis on gen z So 555 00:26:18,480 --> 00:26:21,320 Speaker 4: look forward, what is the arc of user growth and 556 00:26:21,320 --> 00:26:25,000 Speaker 4: what drives it, what brings in you users to your platform? 557 00:26:25,040 --> 00:26:27,879 Speaker 12: Bill Yeah, so you know, as I mentioned, this is 558 00:26:27,920 --> 00:26:31,800 Speaker 12: our seventh consecutive core of accelerating user growth. We've accelerated 559 00:26:31,880 --> 00:26:36,120 Speaker 12: in every geography and with every generation that we track. 560 00:26:36,200 --> 00:26:38,760 Speaker 12: Gen zs are fastest growing in our largest but you 561 00:26:38,800 --> 00:26:41,760 Speaker 12: have millennials right behind that. So our improvement in the 562 00:26:41,760 --> 00:26:44,280 Speaker 12: product has been broad based, and it is that actionability 563 00:26:44,320 --> 00:26:46,040 Speaker 12: at the core. But I would say we are just 564 00:26:46,080 --> 00:26:49,160 Speaker 12: getting going with that. We see much more building momentum 565 00:26:49,200 --> 00:26:52,720 Speaker 12: in that as we look forward, and it's both the 566 00:26:52,800 --> 00:26:55,520 Speaker 12: actionability as well as the positivity that. 567 00:26:55,480 --> 00:26:56,199 Speaker 1: We're bringing into it. 568 00:26:56,280 --> 00:27:01,080 Speaker 12: We've made tremendous strides with AI, and AI is bringing 569 00:27:01,119 --> 00:27:03,920 Speaker 12: more relevant recommendations for users so they can take action 570 00:27:04,040 --> 00:27:06,240 Speaker 12: on more of what they find. But it's also the 571 00:27:06,280 --> 00:27:09,960 Speaker 12: case that we're tuning AI for positivity. We're tuning it 572 00:27:10,040 --> 00:27:13,159 Speaker 12: to help users feel better not just in finding what 573 00:27:13,200 --> 00:27:15,320 Speaker 12: they're looking to shop and buy, but in making sure 574 00:27:15,359 --> 00:27:18,159 Speaker 12: that we're bringing inspirational content to them. So we've done 575 00:27:18,320 --> 00:27:22,320 Speaker 12: things like inclusive AI, where we have skin tone filters 576 00:27:22,320 --> 00:27:26,080 Speaker 12: so people can filter for things that will reflect them 577 00:27:26,160 --> 00:27:29,639 Speaker 12: and including diversity by default in our feeds. We introduce 578 00:27:29,720 --> 00:27:32,919 Speaker 12: body type AI where people can select body types so 579 00:27:32,960 --> 00:27:36,880 Speaker 12: that they can find more things that fit well for them, 580 00:27:37,240 --> 00:27:38,879 Speaker 12: and so we want to make it so that every 581 00:27:38,960 --> 00:27:42,439 Speaker 12: person on Pinterest can see themselves on Pinterest. And so 582 00:27:42,920 --> 00:27:45,640 Speaker 12: that's really leading to great strides. 583 00:27:45,119 --> 00:27:46,000 Speaker 1: In both the. 584 00:27:48,000 --> 00:27:52,600 Speaker 12: Relevance, the representation, and just people feeling positive when they 585 00:27:52,600 --> 00:27:53,560 Speaker 12: spend time on Pinterest. 586 00:27:54,440 --> 00:27:57,719 Speaker 4: So last night on the Amazon Media called, Brian Osowski 587 00:27:57,840 --> 00:28:01,040 Speaker 4: was asked about Tmu and she in the context of 588 00:28:01,080 --> 00:28:04,439 Speaker 4: competition with you guys at pinterest a little bit different, 589 00:28:04,840 --> 00:28:08,920 Speaker 4: would you talk about Timu and Shean as potential partners? 590 00:28:08,960 --> 00:28:13,520 Speaker 4: Are you seeing any uplift from Chinese advertisers? 591 00:28:13,240 --> 00:28:17,160 Speaker 12: So apac cross border has been a contributor to our growth, 592 00:28:17,160 --> 00:28:20,440 Speaker 12: but it's a nice contributor. You know, it's not overwhelming, 593 00:28:20,600 --> 00:28:23,679 Speaker 12: but it's a nice contributor. But as I mentioned before, 594 00:28:23,680 --> 00:28:26,960 Speaker 12: our strength and retail has been broad based. Retailers of 595 00:28:27,000 --> 00:28:31,000 Speaker 12: all sizes are finding strength on Pinterest, and it's because 596 00:28:31,040 --> 00:28:33,720 Speaker 12: they're seeing that doubling of clicks that we sent to 597 00:28:33,720 --> 00:28:35,680 Speaker 12: advertisers a year on year in Q four and again 598 00:28:35,720 --> 00:28:39,080 Speaker 12: in Q one. And it's also because they're able to 599 00:28:39,120 --> 00:28:42,520 Speaker 12: meet hard to find shoppers like gen Z on Pinterest, 600 00:28:42,880 --> 00:28:45,360 Speaker 12: and they're meeting those shoppers in a really unique moment 601 00:28:45,440 --> 00:28:48,400 Speaker 12: because users come to Pinterest when they have clear intent. 602 00:28:48,480 --> 00:28:50,000 Speaker 12: More than half the users on the platform, we're here 603 00:28:50,000 --> 00:28:53,120 Speaker 12: to shop, but they haven't yet decided what to buy, 604 00:28:53,400 --> 00:28:56,080 Speaker 12: so they're not necessarily searching for a specific brand or 605 00:28:56,120 --> 00:28:58,760 Speaker 12: a specific item where maybe the decisions already made. They're 606 00:28:58,800 --> 00:29:01,680 Speaker 12: coming here with much more general thoughts like cool outfits 607 00:29:01,680 --> 00:29:04,760 Speaker 12: for spring, what to wear to Coachella, and those are 608 00:29:04,880 --> 00:29:09,080 Speaker 12: great moments for advertisers to meet users because the user 609 00:29:09,120 --> 00:29:12,000 Speaker 12: has clear intent but hasn't decided yet what to buy. 610 00:29:12,160 --> 00:29:14,960 Speaker 12: And again we're seeing that broad based across retailers. China 611 00:29:14,960 --> 00:29:17,960 Speaker 12: cross border is a contributor, but it's broad based strength 612 00:29:17,960 --> 00:29:19,080 Speaker 12: for retailers. 613 00:29:18,760 --> 00:29:21,080 Speaker 5: Focusing a little bit more on China for a moment, Bill, 614 00:29:21,320 --> 00:29:23,720 Speaker 5: I mean, this is a unique time in social media 615 00:29:23,720 --> 00:29:25,520 Speaker 5: more broadly, because it looks as though one of a 616 00:29:25,760 --> 00:29:28,280 Speaker 5: key social media player might be falling away. 617 00:29:29,040 --> 00:29:30,720 Speaker 3: Do you think more gen Z will come to. 618 00:29:30,720 --> 00:29:34,160 Speaker 5: You because of TikTok potentially being banned completely no longer 619 00:29:34,200 --> 00:29:35,160 Speaker 5: existing in the US. 620 00:29:36,400 --> 00:29:38,840 Speaker 12: Well, when you look at why we are doing so 621 00:29:39,000 --> 00:29:42,240 Speaker 12: well with gen Z, it is because we are doing 622 00:29:42,240 --> 00:29:44,160 Speaker 12: something very different than the rest of social media. For 623 00:29:44,200 --> 00:29:46,920 Speaker 12: gen Z, most of social media has the user in 624 00:29:46,960 --> 00:29:49,800 Speaker 12: a lean back entertainment mode. We have the user in 625 00:29:49,840 --> 00:29:54,000 Speaker 12: a lean forward mode with intent and purpose. And I 626 00:29:54,120 --> 00:29:57,600 Speaker 12: mentioned tuning for positivity. You know, gen Z sees Pinterest 627 00:29:57,680 --> 00:30:00,680 Speaker 12: as an oasis away from the toxicity they experience on 628 00:30:00,800 --> 00:30:03,240 Speaker 12: much of the rest of social media. They know that 629 00:30:03,280 --> 00:30:07,200 Speaker 12: social media has largely become comparative and performative. And if 630 00:30:07,240 --> 00:30:08,840 Speaker 12: you go talk to gen Z about why they spend 631 00:30:08,840 --> 00:30:11,600 Speaker 12: time on Pinterest, they'll say they go to other places 632 00:30:11,600 --> 00:30:14,560 Speaker 12: on social media and see what others want them to be, 633 00:30:14,640 --> 00:30:16,440 Speaker 12: what others expect them to be, and then go to 634 00:30:16,480 --> 00:30:19,560 Speaker 12: Pinterest to discover what they want to be and invest 635 00:30:19,600 --> 00:30:22,120 Speaker 12: in themselves with a small circle of friends. So that's 636 00:30:22,160 --> 00:30:25,320 Speaker 12: already winning with gen Z. And we're not sitting around 637 00:30:25,320 --> 00:30:28,480 Speaker 12: hoping for the demise of other platforms. We're just busy 638 00:30:28,520 --> 00:30:31,600 Speaker 12: building something that makes people feel more positive, is going 639 00:30:31,600 --> 00:30:34,320 Speaker 12: to give them a great experience, and that's winning, particularly 640 00:30:34,320 --> 00:30:34,760 Speaker 12: of gen Z. 641 00:30:35,720 --> 00:30:39,440 Speaker 5: Okay, so no clear ambition to capitalize in the uncertainty, 642 00:30:39,520 --> 00:30:42,640 Speaker 5: but clearly seeing the flow of gen Z. What really 643 00:30:42,680 --> 00:30:45,520 Speaker 5: always interests me, Bill is when you break down your 644 00:30:45,600 --> 00:30:48,120 Speaker 5: numbers in terms of average users and where they are 645 00:30:48,400 --> 00:30:50,719 Speaker 5: you're so dominant in the rest of the world, do 646 00:30:50,760 --> 00:30:52,720 Speaker 5: you see US as the area of growth do you 647 00:30:52,720 --> 00:30:54,720 Speaker 5: see internationally more the area of growth. 648 00:30:54,920 --> 00:30:56,360 Speaker 3: Where do you see the expansion? 649 00:30:57,560 --> 00:31:00,600 Speaker 12: So that's a great question. As you noted, we have 650 00:31:00,640 --> 00:31:02,760 Speaker 12: approximately eighty percent of our eighty percent or more of 651 00:31:02,800 --> 00:31:05,920 Speaker 12: our use outside the US, but only approximately twenty percent 652 00:31:05,920 --> 00:31:09,880 Speaker 12: of our revenue outside the US. So the improvements we've 653 00:31:09,920 --> 00:31:13,120 Speaker 12: made from the user perspective have been broad based. As 654 00:31:13,120 --> 00:31:16,920 Speaker 12: I mentioned, we've accelerated users across every geography. On the 655 00:31:16,920 --> 00:31:20,160 Speaker 12: modernization side, we are much further along in the US, 656 00:31:20,200 --> 00:31:22,600 Speaker 12: and we are now starting to deploy those things internationally, 657 00:31:22,640 --> 00:31:25,080 Speaker 12: and so we see international as a huge growth vector 658 00:31:25,760 --> 00:31:27,760 Speaker 12: for us, both in terms of what we will bring 659 00:31:27,800 --> 00:31:31,440 Speaker 12: to advertisers directly where we do first party selling, as 660 00:31:31,440 --> 00:31:33,440 Speaker 12: well as where we're bringing in new sources of demand, 661 00:31:33,560 --> 00:31:37,320 Speaker 12: either through third party demand like what we're doing with 662 00:31:37,320 --> 00:31:40,760 Speaker 12: our Google partnership in international markets or what we're now 663 00:31:40,800 --> 00:31:43,320 Speaker 12: doing with resellers in international markets where they can bring 664 00:31:43,360 --> 00:31:45,600 Speaker 12: more local demand, which is going to be great for 665 00:31:45,640 --> 00:31:48,400 Speaker 12: those advertisers, but also great for users that will find 666 00:31:48,440 --> 00:31:51,440 Speaker 12: more shoppable content as more of those advertisers those international 667 00:31:51,480 --> 00:31:53,760 Speaker 12: markets come onto our platform. 668 00:31:54,040 --> 00:31:56,560 Speaker 5: Bill, great to catch up with you thanks to spending 669 00:31:56,560 --> 00:31:59,840 Speaker 5: some time with USKS. Very money Pindras CEO Bill ready there. 670 00:32:00,640 --> 00:32:02,520 Speaker 5: Meanwhile coming up that we're going to be joined by 671 00:32:02,600 --> 00:32:05,800 Speaker 5: Renegade Partners co founder Rosanne Winsec about the. 672 00:32:05,760 --> 00:32:09,080 Speaker 3: Firm's new fun They raise a lot where they're spending it. 673 00:32:09,160 --> 00:32:29,520 Speaker 5: There's a rumot technology, so Pallenteer CEO Alex cart Sequoia's 674 00:32:29,560 --> 00:32:33,400 Speaker 5: leader that of Boda venture capitalist Vinod Kozla, that among 675 00:32:33,520 --> 00:32:36,880 Speaker 5: the Silicon Valley heavyweights, you're traveling to Washington this week 676 00:32:37,240 --> 00:32:39,600 Speaker 5: for a summit on the role of AI and escalating 677 00:32:39,600 --> 00:32:40,520 Speaker 5: competition between. 678 00:32:40,280 --> 00:32:41,040 Speaker 3: The US and China. 679 00:32:41,120 --> 00:32:43,120 Speaker 5: Now the Hill and the Valley Forum, as it's called, 680 00:32:43,560 --> 00:32:46,320 Speaker 5: is sponsored by a group of vcs including Peter tielback 681 00:32:46,360 --> 00:32:48,320 Speaker 5: to Founders Fund that seems to be the second iteration 682 00:32:48,400 --> 00:32:49,840 Speaker 5: head and still gets. 683 00:32:50,560 --> 00:32:53,000 Speaker 4: I've got some deja vu. I'm pretty sure we've done 684 00:32:53,000 --> 00:32:55,320 Speaker 4: that one before. Let's stick in the world of private 685 00:32:55,360 --> 00:32:59,440 Speaker 4: markets and vents capital. Renegade Partners, an early stage venture firm, 686 00:32:59,520 --> 00:33:01,719 Speaker 4: just announced the close of it's fun Too with one 687 00:33:01,800 --> 00:33:04,680 Speaker 4: hundred and twenty eight million dollars, bringing the total assets 688 00:33:04,760 --> 00:33:07,240 Speaker 4: under management to two hundred and twenty eight million dollars. 689 00:33:07,320 --> 00:33:09,400 Speaker 4: It's like to say, we're joined by Renegade Partners co 690 00:33:09,480 --> 00:33:11,960 Speaker 4: founder and managing director Razan win Sec. 691 00:33:12,360 --> 00:33:14,400 Speaker 6: Welcome. You are going to. 692 00:33:14,360 --> 00:33:18,080 Speaker 4: Invest in what you're calling durable technology companies. What is 693 00:33:18,080 --> 00:33:19,640 Speaker 4: a durable technology company? 694 00:33:20,120 --> 00:33:20,440 Speaker 6: Hied? 695 00:33:20,520 --> 00:33:22,440 Speaker 13: Thank you so much for having me. So when we 696 00:33:22,480 --> 00:33:25,400 Speaker 13: think about what is a durable company, we're actually looking at, 697 00:33:25,560 --> 00:33:27,520 Speaker 13: you know, what are markets that actually really matter here? 698 00:33:28,160 --> 00:33:31,840 Speaker 13: What are markets that are large and still relatively untouched 699 00:33:31,840 --> 00:33:35,080 Speaker 13: by technology that can support really large outcomes? You know, 700 00:33:35,200 --> 00:33:37,680 Speaker 13: I think over the past few years, we've seen a 701 00:33:37,720 --> 00:33:40,400 Speaker 13: lot of you know, software selling to software software selling 702 00:33:40,400 --> 00:33:43,320 Speaker 13: to startups, and those companies have frankly like evaporated in 703 00:33:43,360 --> 00:33:45,360 Speaker 13: this market turn And so one thing that we thought 704 00:33:45,400 --> 00:33:47,360 Speaker 13: about a lot in our fund one, and we're thinking 705 00:33:47,360 --> 00:33:48,920 Speaker 13: even more about in Fund two. Or what are those 706 00:33:48,960 --> 00:33:52,360 Speaker 13: markets that actually really drive like meaningful parts of GDP 707 00:33:52,920 --> 00:33:56,000 Speaker 13: and can actually move beyond you know, trends in venture 708 00:33:56,040 --> 00:33:57,640 Speaker 13: capital and become lasting companies. 709 00:33:57,920 --> 00:33:59,520 Speaker 6: So what is the secret source? 710 00:33:59,720 --> 00:34:01,960 Speaker 4: So speak like, how is it that your position to 711 00:34:02,040 --> 00:34:04,959 Speaker 4: identify a company that fits that profile? And you can 712 00:34:05,000 --> 00:34:07,360 Speaker 4: go to your LPs and say, we're pretty confident that 713 00:34:07,640 --> 00:34:08,800 Speaker 4: this fits the thesis. 714 00:34:09,160 --> 00:34:12,080 Speaker 13: Yeah, you know, so we're generalists. We're very like sector agnostic, 715 00:34:12,120 --> 00:34:14,319 Speaker 13: stage specific, but we like to kind of look at 716 00:34:14,320 --> 00:34:17,040 Speaker 13: the market very broadly. So for instance, in our find one, 717 00:34:17,080 --> 00:34:22,160 Speaker 13: we have companies like Aerospace Intelligence that sells into aerospace 718 00:34:22,200 --> 00:34:26,520 Speaker 13: and defense, COPA Automation selling into PLC right into factories. 719 00:34:26,560 --> 00:34:30,520 Speaker 13: So thinking about you know, on shoring and digital transformation. 720 00:34:30,600 --> 00:34:34,240 Speaker 13: There companies like Auxiliar selling into biotech FP and A 721 00:34:34,160 --> 00:34:36,960 Speaker 13: a great way to get beta access to the beta 722 00:34:37,000 --> 00:34:40,239 Speaker 13: of that market without actually investing in a molecular a therapeutic. 723 00:34:41,200 --> 00:34:42,279 Speaker 3: So we really try to. 724 00:34:42,200 --> 00:34:45,279 Speaker 13: Think kind of big tops down and look for great 725 00:34:45,280 --> 00:34:47,640 Speaker 13: companies that are going after big problems in those faces. 726 00:34:48,560 --> 00:34:53,319 Speaker 5: Relatively competitive still in the earliest stages of VC. What 727 00:34:53,440 --> 00:34:55,799 Speaker 5: do you do that makes you stand out? Rozan, how 728 00:34:55,840 --> 00:34:58,680 Speaker 5: do you manage to be supporting some of these founders 729 00:34:58,680 --> 00:35:02,200 Speaker 5: which increasingly to to us about bun out about worries 730 00:35:02,280 --> 00:35:03,560 Speaker 5: about mental health issues. 731 00:35:04,960 --> 00:35:07,560 Speaker 13: I know it is, Caroline, You're completely right, Like it 732 00:35:07,640 --> 00:35:10,279 Speaker 13: is still very competitive there, even though the market feels 733 00:35:10,320 --> 00:35:12,560 Speaker 13: softer than it did a couple of years ago. I mean, 734 00:35:12,640 --> 00:35:14,880 Speaker 13: as we think about Renegade and like what we can offer, 735 00:35:15,400 --> 00:35:17,279 Speaker 13: I always think about like, you know, you can't beat 736 00:35:17,280 --> 00:35:18,600 Speaker 13: somebody else at their own games, So how do you 737 00:35:18,600 --> 00:35:20,759 Speaker 13: play a game that they can't play? Right Like, we 738 00:35:20,840 --> 00:35:23,040 Speaker 13: like to focus ourselves on being like a very bespoke 739 00:35:23,080 --> 00:35:25,319 Speaker 13: boutique firm where founders get to work directly with the 740 00:35:25,320 --> 00:35:28,399 Speaker 13: founders themselves. Right Like, if you are a founder led 741 00:35:28,440 --> 00:35:30,040 Speaker 13: business and you're sitting on your board, you don't want 742 00:35:30,040 --> 00:35:32,240 Speaker 13: an employee sitting next to you, you want another founder sitting 743 00:35:32,239 --> 00:35:32,719 Speaker 13: next to you. 744 00:35:33,120 --> 00:35:33,239 Speaker 1: Uh. 745 00:35:33,280 --> 00:35:35,440 Speaker 13: We have really great alignment that way, right Like, we 746 00:35:35,440 --> 00:35:37,840 Speaker 13: don't have a story about job security or you know 747 00:35:37,960 --> 00:35:41,520 Speaker 13: around partnership dynamics because we all in the firm as well. 748 00:35:42,080 --> 00:35:44,600 Speaker 13: We only make twenty investments per fund. That means, you know, 749 00:35:44,680 --> 00:35:47,160 Speaker 13: only six or seven deals per year, and so we're 750 00:35:47,160 --> 00:35:48,919 Speaker 13: really spending a lot of time with each and every 751 00:35:48,960 --> 00:35:51,080 Speaker 13: company and you know, helping them where they need help 752 00:35:51,120 --> 00:35:52,759 Speaker 13: and getting out of the way where they don't. We 753 00:35:52,800 --> 00:35:55,040 Speaker 13: also have a great operating practice where we focus on 754 00:35:55,360 --> 00:35:57,480 Speaker 13: you know, people and team. It's led by our incredible 755 00:35:57,520 --> 00:36:00,640 Speaker 13: operating partner, a woman named Susan Albyn and and she 756 00:36:00,680 --> 00:36:05,919 Speaker 13: really helps our companies think about team organs, team organ design, structure, compensation, 757 00:36:06,280 --> 00:36:08,719 Speaker 13: building the hiring and firing machine. And often those are 758 00:36:08,760 --> 00:36:10,839 Speaker 13: the things that are keeping early stage CEOs up at 759 00:36:10,920 --> 00:36:13,400 Speaker 13: night because we kind of assume that they know how 760 00:36:13,440 --> 00:36:15,800 Speaker 13: to build and run a team when often this is 761 00:36:15,840 --> 00:36:16,439 Speaker 13: their first time. 762 00:36:16,560 --> 00:36:18,279 Speaker 3: Yeah, we assume that they can be leaders and they 763 00:36:18,280 --> 00:36:18,600 Speaker 3: get go. 764 00:36:19,040 --> 00:36:22,560 Speaker 5: I'm interested those as to how you're helping those leaders 765 00:36:22,560 --> 00:36:25,280 Speaker 5: and others within those startups to be able to pivot 766 00:36:25,360 --> 00:36:28,080 Speaker 5: if they on an AI first business right now? 767 00:36:28,960 --> 00:36:31,680 Speaker 13: Yeah, I mean I think, you know, I think there's 768 00:36:31,680 --> 00:36:33,440 Speaker 13: a blessing and a curse today today you're being an 769 00:36:33,440 --> 00:36:35,400 Speaker 13: AI first business. We've seen a lot of companies that 770 00:36:35,440 --> 00:36:37,680 Speaker 13: are just frankly a thin wrapper on type of open 771 00:36:37,680 --> 00:36:40,719 Speaker 13: AI and those businesses are not defensible, you know, I 772 00:36:40,760 --> 00:36:43,440 Speaker 13: think really first and foremost, like you have to be 773 00:36:43,440 --> 00:36:46,080 Speaker 13: thinking about what is actually driving value for your customer, 774 00:36:46,120 --> 00:36:48,040 Speaker 13: what's actually driving OURI, what they're actually going to pay 775 00:36:48,040 --> 00:36:52,399 Speaker 13: for after like you know, the AI innovation budgets dry up, 776 00:36:52,719 --> 00:36:55,600 Speaker 13: and so frankly, you know, every company is going to 777 00:36:55,600 --> 00:36:57,439 Speaker 13: be an AI company. It's just like every company today 778 00:36:57,480 --> 00:36:59,480 Speaker 13: is a cloud company. We don't invest in companies because 779 00:36:59,480 --> 00:37:01,960 Speaker 13: theyre cloud companies. Every company is a cloud company. AI 780 00:37:02,080 --> 00:37:03,920 Speaker 13: is going to be the same way, right, So what 781 00:37:04,080 --> 00:37:06,799 Speaker 13: are those products and services that AI can actually supercharge, 782 00:37:06,800 --> 00:37:08,960 Speaker 13: that can do you know, different things than just a 783 00:37:09,040 --> 00:37:10,600 Speaker 13: great SaaS business that's putting. 784 00:37:10,320 --> 00:37:11,360 Speaker 3: AI into their product. 785 00:37:11,680 --> 00:37:14,319 Speaker 4: You heard the story reported at the top of the segment. Yeah, 786 00:37:14,400 --> 00:37:16,800 Speaker 4: some of your industry colleagues Pizza Teel then d Coosa 787 00:37:16,920 --> 00:37:18,920 Speaker 4: going to d C. Do you think it's the job 788 00:37:18,960 --> 00:37:20,360 Speaker 4: of vcs to do that? 789 00:37:20,760 --> 00:37:23,279 Speaker 13: You know, I think it's important that are like the 790 00:37:23,520 --> 00:37:26,920 Speaker 13: Silicon Valley is well represented on the Hill because frankly, 791 00:37:27,000 --> 00:37:30,080 Speaker 13: what happens here has a massive impact in the US 792 00:37:30,360 --> 00:37:32,719 Speaker 13: and in the world, you know, the world in total, 793 00:37:32,800 --> 00:37:34,879 Speaker 13: and you know, I do think there is a role 794 00:37:34,960 --> 00:37:38,000 Speaker 13: for it. You know, we have to remember like incentives 795 00:37:38,080 --> 00:37:40,000 Speaker 13: drive behavior, so you have to think about what is 796 00:37:40,040 --> 00:37:42,759 Speaker 13: everyone's incentive as you know, regardless of what they're doing. 797 00:37:43,120 --> 00:37:45,719 Speaker 13: But I think it's important that we're thinking about AI, 798 00:37:46,800 --> 00:37:49,239 Speaker 13: you know, at the cutting edge at the federal level. 799 00:37:49,880 --> 00:37:52,920 Speaker 4: Renegay Partners co founder managing director as Sam Winset. 800 00:37:52,960 --> 00:37:54,320 Speaker 6: Great to have you on the program. Thank you. 801 00:38:01,880 --> 00:38:04,880 Speaker 5: It's the latest episode of The Circuit and Bloomberg Originals 802 00:38:04,960 --> 00:38:07,560 Speaker 5: hosts and executive producer em Andy Chang. She sat down 803 00:38:07,600 --> 00:38:10,480 Speaker 5: with the GM CEO Mary Burrow to discuss well why 804 00:38:10,520 --> 00:38:12,040 Speaker 5: she's continuing to bet. 805 00:38:11,920 --> 00:38:14,600 Speaker 3: Big on electric vehicles and autonomous driving particulous. 806 00:38:17,120 --> 00:38:19,680 Speaker 14: We're still as an industry, we're in the early days. 807 00:38:19,800 --> 00:38:22,920 Speaker 14: I think what we're still seeing is battery, battery chemistry, 808 00:38:22,960 --> 00:38:27,120 Speaker 14: battery technology is still expensive, and because the vehicle's already 809 00:38:27,560 --> 00:38:30,760 Speaker 14: a very expensive purchase for consumers, you know, it's getting 810 00:38:31,000 --> 00:38:34,760 Speaker 14: continuing to get costs down while we continue to improve 811 00:38:34,800 --> 00:38:38,439 Speaker 14: the technology. It almost feels like hype is slowing down. 812 00:38:38,640 --> 00:38:40,760 Speaker 14: Do you feel like you're battling that like a sentiment? 813 00:38:41,200 --> 00:38:43,719 Speaker 14: You know shift as well. I think it was overhyped 814 00:38:44,120 --> 00:38:47,279 Speaker 14: and now it's probably under hyped and the truth is 815 00:38:47,360 --> 00:38:50,239 Speaker 14: somewhere in the middle. But you know, again, yes growth 816 00:38:50,280 --> 00:38:54,279 Speaker 14: has slowed, but it's still growing. You scaled back some 817 00:38:54,360 --> 00:38:58,360 Speaker 14: other EV targets, mainly because of the battery manufacturing issues, 818 00:38:58,400 --> 00:39:01,000 Speaker 14: Like why is that still such a challenge. We were 819 00:39:01,040 --> 00:39:04,160 Speaker 14: making something new and I grew up in manufacturing, so 820 00:39:04,280 --> 00:39:07,080 Speaker 14: I feel like we do have a lot of manufacturing expertise, 821 00:39:07,520 --> 00:39:09,480 Speaker 14: but I think we took for granted some of the 822 00:39:09,560 --> 00:39:11,719 Speaker 14: newer processes and we will not do that again. 823 00:39:11,800 --> 00:39:12,000 Speaker 12: Yeah. 824 00:39:12,440 --> 00:39:15,400 Speaker 14: Elon Musk has mocked traditional automakers for how long it 825 00:39:15,440 --> 00:39:18,080 Speaker 14: took come to get into Eb's Was he right about that? 826 00:39:18,880 --> 00:39:20,399 Speaker 14: You know, if I had a do over, I would 827 00:39:20,400 --> 00:39:23,040 Speaker 14: have even though we were moving, I would have accelerated 828 00:39:23,080 --> 00:39:26,239 Speaker 14: the pace. You know, Hindsight's twenty twenty Tesla stock is 829 00:39:26,320 --> 00:39:29,680 Speaker 14: up more than thirteen hundred percent in the last ten years. 830 00:39:29,920 --> 00:39:33,799 Speaker 14: GM is up like twelve thirteen percent. You have met 831 00:39:33,920 --> 00:39:36,960 Speaker 14: or beat expectations thirty five out of last thirty six quarters. 832 00:39:37,800 --> 00:39:40,040 Speaker 14: So when you look at the stock, does it ever 833 00:39:40,120 --> 00:39:40,799 Speaker 14: piss you off? 834 00:39:41,920 --> 00:39:42,120 Speaker 3: Yeah? 835 00:39:42,600 --> 00:39:45,560 Speaker 14: It does, I mean because I but but again, I 836 00:39:45,640 --> 00:39:47,560 Speaker 14: can get mad about it, and I can be upset 837 00:39:47,640 --> 00:39:50,040 Speaker 14: and up frustrated, and believe me, I have those moments. 838 00:39:50,080 --> 00:39:52,239 Speaker 14: You know, at the end, it's our responsibility. You can't 839 00:39:52,239 --> 00:39:53,359 Speaker 14: go home and have a pity party. 840 00:39:53,760 --> 00:39:56,319 Speaker 4: Watch The Circuit with Emily Chang tonight at six pm 841 00:39:56,360 --> 00:39:59,400 Speaker 4: easton in New York on Bloomberg Television, or stream at 842 00:39:59,400 --> 00:39:59,880 Speaker 4: eight pm E. 843 00:40:00,480 --> 00:40:02,840 Speaker 6: On Bloomberg Originals. Let's stick with. 844 00:40:02,920 --> 00:40:06,759 Speaker 4: GM, The company's eyeing billions in digital revenues with an 845 00:40:06,760 --> 00:40:10,400 Speaker 4: alternative to Apple's car Play, which has become the default 846 00:40:10,440 --> 00:40:13,359 Speaker 4: home screen of the center console and vehicles ranging from 847 00:40:13,400 --> 00:40:17,520 Speaker 4: Ford's to Ferrari's GM's platform called Altifi was rolled out, 848 00:40:18,080 --> 00:40:20,320 Speaker 4: but not without a few hiccups. Joining us now is 849 00:40:20,400 --> 00:40:23,279 Speaker 4: the author of that terrific deep dive Bloomberg's Dave as well, 850 00:40:23,280 --> 00:40:25,480 Speaker 4: which out of Detroit. You paint the picture of Michael 851 00:40:25,520 --> 00:40:29,240 Speaker 4: Wardrum who's picked up this beautiful sixty two thousand dollars 852 00:40:30,040 --> 00:40:32,360 Speaker 4: Chevy Blazer EV. He's so proud of it, and he 853 00:40:32,440 --> 00:40:36,280 Speaker 4: sits in the cockpit, in the driver's seat, no Apple 854 00:40:36,360 --> 00:40:39,279 Speaker 4: car play, And therein lies the strategy from GM. 855 00:40:41,200 --> 00:40:44,520 Speaker 2: That's right. They want to pull people into their cars. 856 00:40:44,680 --> 00:40:47,480 Speaker 2: And actually, I've driven the Blazer Rev. It is quite 857 00:40:47,480 --> 00:40:50,919 Speaker 2: a good vehicle. Waldron's assessment is right. But they're making 858 00:40:51,000 --> 00:40:53,200 Speaker 2: this gamble that people will like the cars get in, 859 00:40:53,840 --> 00:40:57,160 Speaker 2: and that they can overcome this consumer inertia and just 860 00:40:57,239 --> 00:41:00,480 Speaker 2: pull people away from CarPlay, and they're better Bely, this 861 00:41:00,719 --> 00:41:04,960 Speaker 2: CarPlay will project what your phone does, which is music, messaging, podcasts, 862 00:41:05,000 --> 00:41:06,759 Speaker 2: that sort of thing. But they can do so much 863 00:41:06,800 --> 00:41:10,080 Speaker 2: more with their own internal system. I like how the 864 00:41:10,160 --> 00:41:12,560 Speaker 2: head software guy in an interview with me put it 865 00:41:12,960 --> 00:41:16,640 Speaker 2: from Rivian said, we don't want our infotainment system in 866 00:41:16,719 --> 00:41:18,480 Speaker 2: a arriva and to be the same thing that's in 867 00:41:18,560 --> 00:41:21,600 Speaker 2: every rental car, and GM is taking the same approach 868 00:41:21,680 --> 00:41:23,840 Speaker 2: with this, but that still means you have to execute 869 00:41:23,840 --> 00:41:26,960 Speaker 2: a better system than Apple has, and so far GM's 870 00:41:27,000 --> 00:41:28,879 Speaker 2: had a tough time with that. The new system since 871 00:41:28,920 --> 00:41:32,000 Speaker 2: they brought it back, has had no issues since they 872 00:41:32,040 --> 00:41:33,719 Speaker 2: started selling it again in March, but it was a 873 00:41:33,800 --> 00:41:36,640 Speaker 2: very rough start for them. And even after that, if 874 00:41:36,640 --> 00:41:39,719 Speaker 2: they can build it well, if they can keep the 875 00:41:39,800 --> 00:41:42,040 Speaker 2: software from being buggy, they're still going to have to 876 00:41:42,200 --> 00:41:45,360 Speaker 2: get consumers to decide that they don't need CarPlay, and 877 00:41:45,440 --> 00:41:47,000 Speaker 2: that can be a tough marketing challenge. 878 00:41:47,680 --> 00:41:50,920 Speaker 5: Tough marketing challenge, but a lot to be rewarded for 879 00:41:51,080 --> 00:41:54,320 Speaker 5: when it comes to digital revenue in the future. We 880 00:41:54,360 --> 00:41:56,280 Speaker 5: can see why they're trying to tussele it out with Apple. 881 00:41:56,480 --> 00:41:58,920 Speaker 5: David Welch, it's a great deep dive. Please go read it. 882 00:41:59,520 --> 00:42:02,960 Speaker 5: GMI billions in digital revenue with CarPlay alternative. 883 00:42:03,040 --> 00:42:06,160 Speaker 3: Meanwhile, look, that does it for this edition of Bloomberg Technology. 884 00:42:06,280 --> 00:42:09,200 Speaker 5: We've had CEO conversations, we've deep dived into the earnings, 885 00:42:09,200 --> 00:42:09,600 Speaker 5: and there's. 886 00:42:09,480 --> 00:42:12,360 Speaker 4: More to come in Yeah, and you forget that we 887 00:42:12,480 --> 00:42:14,840 Speaker 4: have more CEOs coming up twenty four hours time in 888 00:42:14,920 --> 00:42:18,680 Speaker 4: the show cloudcom reports tonight, then you've got Apple Thursday. 889 00:42:19,239 --> 00:42:21,320 Speaker 4: There is so much more still to come recap. 890 00:42:21,120 --> 00:42:22,040 Speaker 6: This show, though, is a good one. 891 00:42:22,280 --> 00:42:24,919 Speaker 4: On the podcast, Apple, Spotify, and iHeart and of course 892 00:42:25,239 --> 00:42:27,719 Speaker 4: the pod goes onto all the Bloomberg platforms as well. 893 00:42:27,800 --> 00:42:30,279 Speaker 4: Thanks everyone for tuning in from San Francisco and New 894 00:42:30,360 --> 00:42:30,839 Speaker 4: York City. 895 00:42:31,160 --> 00:42:32,600 Speaker 6: This is Bloomberg Technology.