Speaker 1: From Mahart where Innovations, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: And Caroline Hide at Lumberg's world headquarters in New York
Speaker 3: and im Ed Lodlow in San Francisco.
Speaker 4: This is Gloobag Technology.
Speaker 3: Coming up, we'll get the outlook for investing in the
Speaker 3: tech sector. That's as Gorman saxas that those stocks are
Speaker 3: poised for an earnings legged.
Speaker 4: Rebound, and we'll have the latest updates from Google's antitrust trial.
Speaker 4: As Microsoft CEO Satya Nadella takes the stand past.
Speaker 3: We'll get a read on the state of the EV industry.
Speaker 3: Some mixed numbers coming out to Tesla and Ribban. We'll
Speaker 3: dig into those.
Speaker 5: In a moment.
Speaker 4: We're kind of starting this week, Caroline, much as we
Speaker 4: ended last week, which is thinking about anti trust and
Speaker 4: thinking about some of the megacap tech names of the
Speaker 4: marketly higher and Monday session. The news that we'll get
Speaker 4: into shortly is that Microsoft CEO Seti and Nadella is
Speaker 4: understand in the Google antitrust trial that the government has
Speaker 4: put on focus on search. The kind of top line
Speaker 4: is that According to Nadella, it is bogus quote the
Speaker 4: idea that there is choice in the search market, and
Speaker 4: we will bring you those details later in the program.
Speaker 3: Yeah, we've got to dig in on the edge trust
Speaker 3: feeling of things and indeed what it means from market.
Speaker 3: There's been so under pressure just thinking a month is
Speaker 3: scone of October and as that goes off by what
Speaker 3: five point eight percent, having its worst month since December
Speaker 3: twenty twenty two.
Speaker 5: So what does October bring? Danny Fisher's with us.
Speaker 3: He manages four point three billion dollars in Janis Henderson's
Speaker 3: Global Technology and Innovation Fund, And really we do have
Speaker 3: these headwinds, ed pointing out the regulatory headwind, But is
Speaker 3: there going to be a buying opportunity into technology as
Speaker 3: it stands for October?
Speaker 1: Denny, Well, it's always hard to tell, you know, on
Speaker 1: a month to month basis, but clearly September was a
Speaker 1: difficult month and it was a confluence of events as
Speaker 1: we know, and as Edge just talked about in the
Speaker 1: lead in the tenure continues to rise. That is generally
Speaker 1: a headwind for growth oriented stocks just the way you
Speaker 1: discount them. But then secondly, is the tenure isn't going
Speaker 1: up because economic growth is robust. It's going up because
Speaker 1: inflation pressures continue to persist, and you know, the FEDS
Speaker 1: indicated that it's going to be you know, higher for longer,
Speaker 1: and so I think investors needed to digest that. And
Speaker 1: so where we go from here is, you know, earnings.
Speaker 1: As you talked about in October brings earning season, it's
Speaker 1: going to be a tug of war, I would call it,
Speaker 1: depending on you know, it's going to be a lot
Speaker 1: of idiosyncratic stories. And if we just look at the
Speaker 1: most recent reports, for example, from companies like Adobe and
Speaker 1: Accenture that had August quarter ins Accentures was much more muted,
Speaker 1: definitely some more macroeconomic headwinds associated with their results. But
Speaker 1: then Adobe that has some you know, unique drivers and
Speaker 1: it's business and is on their front foot with AI,
Speaker 1: actually put up very very nice numbers and you know,
Speaker 1: expectations to be strong going forward. So I think, you know,
Speaker 1: it's just it's going to be a case by case basis.
Speaker 4: At any one session, a market does not make I
Speaker 4: get that. But let's show the megacaps again. You know,
Speaker 4: Alphabet at one point eight percent, we talked about AI.
Speaker 4: We know about the macro picture right now, the kind
Speaker 4: of acceptance that rates will be higher for longer. But
Speaker 4: did the share prices on your screen have any basis
Speaker 4: or priced in reflecting antitrust? What's happening in the courtroom
Speaker 4: right now? Is there any investor concern at all?
Speaker 1: Yeah, well, there absolutely has to be. And what's interesting,
Speaker 1: the one name that isn't on that screen is Apple.
Speaker 1: So if we look at them, you know, Google, Microsoft, Apple,
Speaker 1: they're all intertwined in this as it relates to the
Speaker 1: fault search and it's really really important because Google effect
Speaker 1: actively pays Apple.
Speaker 6: An exorbitant amount of money.
Speaker 1: There are many different estimates out there at what it
Speaker 1: is to actually be the default search provider on iOS,
Speaker 1: and that you know is, you know, those are the
Speaker 1: most important consumers in the world effectively, and so it's
Speaker 1: a very very virtuous relationship. Microsoft would love to be
Speaker 1: able to compete for that business, given their investments into
Speaker 1: being and particularly what they're doing, which at GPT now
Speaker 1: as well.
Speaker 6: But the reality is, you.
Speaker 1: Know, Google's been able to you know, quote unquote corner
Speaker 1: the market, and that is the government's case is that
Speaker 1: Google is exercising market power or Alphabet is exercising market
Speaker 1: power in this default relationship. The hard part though, is
Speaker 1: you know, I mean, Apple's the one that is actually
Speaker 1: kind of the toll taker here in terms of actually
Speaker 1: dictating the terms. But also it's a result of the
Speaker 1: idea that Alphabet has the best consumer experience for search.
Speaker 1: So it's not as though consumers are being harmed by
Speaker 1: any means. That's where the antitrust laws and these cases
Speaker 1: are evolving because are very different than what we've seen historically.
Speaker 4: But this is interesting for you in particular, Denny, because
Speaker 4: you look at your portfolio, right, you have some exposure
Speaker 4: to Microsoft and to Apple. Which one are you're most
Speaker 4: concerned about? There are a number of possible outcomes, of course,
Speaker 4: but which one carries the most risk based on what
Speaker 4: you just outlined.
Speaker 1: Yeah, that would be Apple because Apples generating these what
Speaker 1: are called traffic acquisition costs from Alphabet today. Yes, they're
Speaker 1: one hundred percent gross margin, they fall straight to the
Speaker 1: bottom line, and that's money that Apple can reinvest into
Speaker 1: its business and would be a material earning set if
Speaker 1: they actually weren't able to capture that today Microsoft gets nothing,
Speaker 1: So Microsoft could pay twice the amount that Alphabet pays
Speaker 1: to be the default search provider, and it would actually
Speaker 1: be incremental to the business. The challenges being doesn't have
Speaker 1: the critical mass and so they don't get the same
Speaker 1: advertising density in the same return earns on advertising spend
Speaker 1: that Alphabet gets.
Speaker 6: So there are a lot of.
Speaker 1: Things to think about. But it's all upside for Microsoft.
Speaker 1: It's you know, could be downside for Apple and clearly
Speaker 1: would be downside for Alphabet if the most onerous outcome
Speaker 1: actually came to Fruition.
Speaker 3: And what's been so interesting, Denny about the timing of
Speaker 3: all of this is that, well, Alphabet Search is having
Speaker 3: a run for its money from a competition perspective from
Speaker 3: generative AI, and many had wondered whether BING would suddenly
Speaker 3: come to the fore with a power of open AI.
Speaker 3: All the names that you're putting your attention on. When
Speaker 3: you have such a large exposure to Microsoft things number one,
Speaker 3: but you've also got nvideo in there, You've also got
Speaker 3: a course ASML. All these companies have an AI uplift.
Speaker 3: Here is it priced in yet?
Speaker 5: Do you think?
Speaker 1: Well, actually, with the market, you know, it's interesting coming
Speaker 1: into this year, nothing was priced into these stocks as
Speaker 1: it related to AI, and then we got a lot
Speaker 1: that was actually priced in. And now you know, if
Speaker 1: we actually look at the estimates and the valuations of
Speaker 1: these companies, they're actually all still fairly reasonable. I mean,
Speaker 1: if you go back to September of twenty twenty two,
Speaker 1: the market expected in Vidia to earn somewhere around five
Speaker 1: dollars in twenty twenty four. The market now is expecting
Speaker 1: in Vidia to earn sixteen or seventeen dollars in twenty
Speaker 1: twenty four, meaning the estimates have gone up three x
Speaker 1: and the stock actually hasn't gone up that much. So
Speaker 1: you could argue in Video is cheaper today than it
Speaker 1: was in September of twoenty twenty two. Despite the move,
Speaker 1: Microsoft now is back to one. It's one of its,
Speaker 1: you know, most reasonable valuations that we've seen in some time.
Speaker 1: Google or Alphabet still trades sub twenty times arnies. I mean,
Speaker 1: so there you look at these they're not egregious by
Speaker 1: any means, and the fundamentals actually continue to be just
Speaker 1: fine for all of these companies, if not robust in
Speaker 1: some of the cases like in Vidia for example, and
Speaker 1: to Inder, say.
Speaker 3: Fields as though you are aligning with Goldman a little
Speaker 3: bit here in terms of yes, valuations might ostensibly look
Speaker 3: quite high, but actually, when you're looking at the fundamentals
Speaker 3: of this business, actually there's still relatively opportunities, is certainly
Speaker 3: what Goldman sees when we're looking towards earnings. Where is
Speaker 3: the risk factor when you're looking sort of at the
Speaker 3: companies that are being eroded by the opportunity of AI,
Speaker 3: where isn't deploying it fast enough, thick enough at the
Speaker 3: moment from your perspective.
Speaker 1: Yeah, absolutely, you know there are companies that are we
Speaker 1: sort of go through this exercise of draw line down
Speaker 1: the middle of the whiteboard and who's on the right
Speaker 1: side of time and who's on the you know, the
Speaker 1: wrong side of time of AI?
Speaker 6: And you know, we we.
Speaker 1: You know, I mentioned Adobe earlier as a company that
Speaker 1: you know, it was actually, you know, if we go
Speaker 1: back nine months ago, was viewed as being clearly on
Speaker 1: the wrong side of time. And as they've been able
Speaker 1: to actually communicate with the street more clearly as to
Speaker 1: their product roadmap and actually deliver on products and put
Speaker 1: up results, the company is now firmly on the other
Speaker 1: the right side of AI. And so one of the
Speaker 1: things that I think is really interesting in this market.
Speaker 1: You know, we have the obvious winners, and I think
Speaker 1: we have some obvious losers, and then we have some
Speaker 1: companies that maybe are perceived as losers that they can
Speaker 1: move into that winner's bucket, and we're really focused on
Speaker 1: trying to find some of those as well.
Speaker 4: Benny Fish, Janis Henderson, we love the winners and losers
Speaker 4: conversation here on Bloomberg Technology, particularly around AI. Thank you
Speaker 4: now coming up here on the show. The trial of
Speaker 4: Sam Bankman Freed is coming up this week, and we're
Speaker 4: going to be joined by Duke University's Campbell Harvey about
Speaker 4: the significance of this trial for the industry. Somebody that
Speaker 4: the defense called upon and said no to testifying this
Speaker 4: is Bloomberg. Sam Bankman Freed is getting ready to go
Speaker 4: to trial for what prosecutors alleged was one of the
Speaker 4: biggest financial frauds in US history. For more, I want
Speaker 4: to bring in Campbell Harvey, professor of finance at Duke University,
Speaker 4: who was asked to be an expert for the defense
Speaker 4: in this case. And Professor Harvey, you declined to give
Speaker 4: expert testimony. Why why did you decline?
Speaker 7: I have to admit I was very tempted because it's
Speaker 7: such a fascinating trial and to be teaching my classes
Speaker 7: from the courtroom on zoom could be pretty entertaining for
Speaker 7: my students. But in the bottom line, there were a
Speaker 7: few reasons that I declined, and probably the biggest reason
Speaker 7: is that if I do this type of testimony, the
Speaker 7: deal is that I tell the jury what I believe,
Speaker 7: and that usually wants me out.
Speaker 4: So why would that be a problem. You know you've
Speaker 4: been The idea would be that you have been called
Speaker 4: in as an expert witness, right to assess a bigger
Speaker 4: picture rather than of the individual action. Why would that
Speaker 4: be a problem.
Speaker 7: So it's often the case that experts are engaged to
Speaker 7: support the point of view of whoever's hiring them. And
Speaker 7: given my reputation, which I consider very important, I'm just
Speaker 7: going to tell what I believed, and this was going
Speaker 7: to be a big time commitment, and it's not my
Speaker 7: main job. My main job is to do research and
Speaker 7: to teach at Duke University.
Speaker 5: Okay, so let's dig in to what you believe.
Speaker 3: Of course, if you were being potentially called on by
Speaker 3: the defense, it would be well to defend what has
Speaker 3: occurred in the world of decentralization. But ultimately what your
Speaker 3: argument is is that, well, this wasn't really a decentralized
Speaker 3: finance problem going on.
Speaker 5: This was a more old school problem going on.
Speaker 7: That's correct. So people believe this is a crypto problem,
Speaker 7: and there are some connections here, but this is like
Speaker 7: a traditional finance problem. This is a problem where you've
Speaker 7: got people running an exchange that have no idea as
Speaker 7: to how to run an exchange, no experience, no experience
Speaker 7: in risk management, and most importantly the co mingling of funds,
Speaker 7: which is the main thing in the case where client
Speaker 7: money is used to bail out edge fund. So these
Speaker 7: are problems that could happen in traditional finance, but given
Speaker 7: the crypto is essentially unregulated or a lot of uncertainty
Speaker 7: of our regulations, many of these exchanges exist offshore. So
Speaker 7: FTX Finance are examples of exchanges that are offshore to
Speaker 7: avoid the regulatory oversight, and that creates problems as we've
Speaker 7: seen with FTX, But it's not the only exchange that
Speaker 7: suffered due to failures in risk management and other things.
Speaker 3: Professor, from the experts and founders and builders that we
Speaker 3: speak to in this space. At the moment, it doesn't
Speaker 3: feel as though the regulatory environment is exactly tempting people
Speaker 3: to continue to build within the United States. In fact,
Speaker 3: it seems as though more are being driven offshore. Is
Speaker 3: that a risk at the moment? Is there some way
Speaker 3: in which the United States could be more attractive to
Speaker 3: ensure that while people can interweave themselves within crypto, they
Speaker 3: can safely use in exchange and indeed whether they use
Speaker 3: it as an asset class or a way in which
Speaker 3: to develop technology.
Speaker 7: So we're in a bad situation right now because there
Speaker 7: are very few regulations and whatever regulations, it's kind of
Speaker 7: like regulation by enforcement, and given the uncertainty as to
Speaker 7: what the regulations will be, many companies are deciding it's
Speaker 7: not worth locating in the US. And no country wants
Speaker 7: to lose their best ideas to some other country. So
Speaker 7: I do think that there's a risk here that innovation
Speaker 7: does move offshore.
Speaker 8: And the next.
Speaker 7: Big thing in this space is not trading like with
Speaker 7: FTX and exchange, where you're treading bitcoin or ether or
Speaker 7: things like that. The next big thing is how this
Speaker 7: technology is deployed in regular companies. So the top companies
Speaker 7: today and this is the idea of Web three where
Speaker 7: this technology can enable many things, so we're not possible before.
Speaker 7: And one example I like to give out is think
Speaker 7: of your computer. How much of the CPU and GPU
Speaker 7: do you use a day? Probably less than an hour,
Speaker 7: So why not rent out the other unused capacity and
Speaker 7: get paid for it? And that's what web three is
Speaker 7: able to do. So I'm actually quite concerned given the
Speaker 7: harsh sort of regulatory enforcement yes right now, the lack
Speaker 7: of regulations, that we cannot participate in this innovation. We
Speaker 7: have two disruptions going on right now, AI and this
Speaker 7: decentralized technology disruption.
Speaker 4: Professor Haffey, you'll offer a book DeFi in the Future
Speaker 4: of Finance that was published summer twenty twenty one. Had
Speaker 4: you been able to carry on your writing through present day, quickly,
Speaker 4: what impact has SBF had on the future of DeFi
Speaker 4: as a standing point in history.
Speaker 7: So what's really important to understand is that SPF and
Speaker 7: FTX is not defied, so it is centralized finance. In
Speaker 7: decentralized finance, you don't give custody of your asset to anybody.
Speaker 7: You're the person that holds custody. You do not delegate
Speaker 7: and with FTX, customers delegated their custody and then allegedly
Speaker 7: those funds were taken and used for a hedge fund,
Speaker 7: the so called co mingling. So decentralized finance is sharply different.
Speaker 7: And I think that this whole scandal within FTX and
Speaker 7: the other bankruptcies, We've had many crypto bankruptcies and almost
Speaker 7: all of them are centralized. These are an exchange FTX
Speaker 7: or lenders that were not experiencing in lending or risk management.
Speaker 7: So I think that this actually shifts the focus away
Speaker 7: from kind of centralized finance to decentralized finance.
Speaker 3: Camill Harvey great some time with the professor of finance
Speaker 3: at you University.
Speaker 5: We await as well starting tomorrow.
Speaker 6: Time.
Speaker 3: Now for Talking Tech, first up, Google will make its
Speaker 3: Chrome Book laptops in India through a partnership force with HP.
Speaker 5: Now. The deal is viewed as a win for all parties.
Speaker 3: Google can further compete with other PC makers production in India,
Speaker 3: can have HP avoid potential curves on imports, and India
Speaker 3: of course gains more production value from big tech companies. Meanwhile,
Speaker 3: go to the UK now talk Talk is selling its
Speaker 3: business to business unit to a subsidiary run by its
Speaker 3: main shareholders, valued at roughly one hundred and sixteen million dollars.
Speaker 3: The deal comes as part of the British telecoms reorganization
Speaker 3: plan announced last month.
Speaker 5: Talk Talk is working against looming debt.
Speaker 3: Maturities which need to be refinanced in coming months.
Speaker 5: Plus, in an effort to test its.
Speaker 3: Capacities in a musk, live streamed himself playing four on
Speaker 3: X formerly known as Twitter of course now. The feed
Speaker 3: lasted fifty two minutes, of which the first few minutes
Speaker 3: were spent setting things up for the helpers and staff.
Speaker 3: A concurrent audience of thirteen hundred viewers they tuned in
Speaker 3: with twenty.
Speaker 5: Thousand total by the end.
Speaker 3: Ed so want to be watching in terms of capacities,
Speaker 3: And there's been plenty of other sort of announcements coming
Speaker 3: from X today.
Speaker 6: Yeah, it's interesting.
Speaker 4: I think there's also a partnership with Paris Hilton and
Speaker 4: eleven eleven Media for fashion related video content, signing to
Speaker 4: get a sense of the developments on that platform.
Speaker 6: Now, Sati A.
Speaker 4: Nadella, the CEO of Microsoft, is calling out Google for
Speaker 4: its stake in the search market. Nadella took to the
Speaker 4: stand earlier this morning in the Google antitrust trial, leaving
Speaker 4: no doubt about his perception of Google's dominance. He also
Speaker 4: warned the judge in this case about how artificial intelligence
Speaker 4: could give Google an even larger lead in the search market.
Speaker 4: He basically said Carroe that they're being choice in the
Speaker 4: search market was a bogus quote idea.
Speaker 8: Yeah.
Speaker 3: I think he's also been, of course, one of the
Speaker 3: key people behind the drive to make being something substantive
Speaker 3: in the world of search when it was first launched
Speaker 3: with them Microsoft, and but they couldn't get that.
Speaker 5: They didn't get there. Now there might be.
Speaker 3: Lots of reasoning and blaming as to why that wasn't
Speaker 3: the case.
Speaker 5: Per Suddenly he's going to be trying to.
Speaker 3: Give context to the idea that maybe they couldn't muscle
Speaker 3: in and even offer even more.
Speaker 5: Money than Google to Google than Apple.
Speaker 3: Was currently being potentially an offer to be that sort
Speaker 3: of a competitor on the space.
Speaker 4: Yeah, let's get more context from anam Agarana Blueberg. It's
Speaker 4: had a senior tech analyst and anaag what do you
Speaker 4: make of this? There is choice, it's just a consumers
Speaker 4: just using one browser.
Speaker 9: Right, Yeah, Well, to be Honest, when I read the news,
Speaker 9: I was laughing because only a few months ago, Certia
Speaker 9: went on, you know, with a massive offense with the
Speaker 9: with the browser wars with his you know, open AI
Speaker 9: and then the AI for being and.
Speaker 8: Google's market cup.
Speaker 9: You know, took quite a bit of loss in those
Speaker 9: weeks to follow, and now he's saying that these guys
Speaker 9: have an advantage even in AI. So it's pretty pretty
Speaker 9: amusing to me.
Speaker 3: I mean, he went on to say that Google could
Speaker 3: extend their search dominance into n AI, ANOROG and that
Speaker 3: hasn't been the feeling on the day to day discussion.
Speaker 5: I mean, as we've said time and time.
Speaker 3: Again, this timing of this trial is interesting given the
Speaker 3: run for its money Google seuch as getting from general
Speaker 3: to AI.
Speaker 9: Yeah, you know, And one of the things I talked
Speaker 9: to a lot of investors about is, you know, when
Speaker 9: you look at something like an Apple, Apple has Apple
Speaker 9: Maps and it's pretty crappy and I've never used it.
Speaker 9: I still go out and open up an app that
Speaker 9: has Google Maps in it to do any navigation. Now,
Speaker 9: if for whatever reason, if I don't have Google default
Speaker 9: search on my browser on my phone, I may be
Speaker 9: forced to download an app and that I can use
Speaker 9: search that way.
Speaker 8: At the end of the day, Google Search.
Speaker 9: Is far better than anything else that's out there, and
Speaker 9: I think that's what Google is trying to make a
Speaker 9: case here.
Speaker 5: Crappy a technical term, and rag Ranald, we love it.
Speaker 5: Thank you very much.
Speaker 3: In the from Bloomberg Intelligence, Welcome back to Bloomberg Technology.
Speaker 5: I'm Callen had in New York.
Speaker 6: And I a love like in San Francisco.
Speaker 4: Vian is now down to tens of one Percent's been
Speaker 4: kind of trading way over the place it actually be
Speaker 4: in terms of production and deliveries in the third quarter
Speaker 4: by some distance. But it maintained guidance fifty two thousand
Speaker 4: units this year. And I know a lot of investors
Speaker 4: that we speak to on this program carry they go,
Speaker 4: come on, Rivian, you can do more than fifty two thousand.
Speaker 4: You got on paper the ability to do much better
Speaker 4: than that.
Speaker 6: The market kind of.
Speaker 4: Shrugging its shoulders at this print at least.
Speaker 3: Yeah, it's been a mixed bag, to say the very
Speaker 3: least to digest this morning. And let's get into that
Speaker 3: bag a little bit more to dissect the quarterly delivery
Speaker 3: and production data used to welcome Dana Hall, of course, who.
Speaker 5: Covers these companies and start with Tesla.
Speaker 3: Dan, I was to the reason that we saw this
Speaker 3: drop off in deliveries in production and what it signals
Speaker 3: going forward.
Speaker 10: Yeah, so the drop off was forecast by CEO Elon
Speaker 10: Musk on the July earnings call when they basically said
Speaker 10: that they were going to have factory downtime as they
Speaker 10: prepare for the cyber truck in Austin and really as
Speaker 10: they rolled out the refreshed Model three at Shanghai. So
Speaker 10: we knew that this was going to be a soft quarter.
Speaker 10: I think Wall Street knew it was definitely a miss
Speaker 10: compared to what our consensus was. But the market reaction
Speaker 10: today has been pretty flat. I mean it was sort
Speaker 10: of down pre market and now it's actually trading slightly above.
Speaker 10: I think the big news is that the company reaffirmed
Speaker 10: their guidance for the year of one point eight million units,
Speaker 10: and that is you know, people are excited about that
Speaker 10: the company is going to have to pick up the pace.
Speaker 10: Though in terms of having a record fourth quarter.
Speaker 4: There's a load of debate about the true story down
Speaker 4: time for the assembly line so they can tool up
Speaker 4: for next gen Model three cyber truck.
Speaker 10: Or is it or is it a demand problem?
Speaker 4: Or is it a demand problem? That's exactly where I
Speaker 4: was going to go.
Speaker 6: Is it a demand problem?
Speaker 10: I mean, I definitely think that with high interest rates
Speaker 10: and inflation, you know, buying a car is a huge purchase.
Speaker 10: And I say this as someone who is like driving
Speaker 10: a Beat or Subaru that I've had for seventeen years.
Speaker 10: You know, it is it is a big, big financial
Speaker 10: decision for many families and many people. So you know,
Speaker 10: some people are concerned that the factory downtime is obfuscating
Speaker 10: a demand issue. But you know, we saw Rivian beat, right,
Speaker 10: and I mean the arc of the future is electric
Speaker 10: is electrification. It's just the macro is definitely a factor.
Speaker 4: You know, interesting to compare and contrast. You more than
Speaker 4: anyone on the planet, almost covered the sort of early
Speaker 4: days of Model three ramp, Tesla's first mass production model.
Speaker 4: Rivian's doing comparatively quite well in its first sort of
Speaker 4: eighteen months production. It's just that they spent billions of
Speaker 4: dollars to do it, and Tesla did it with no
Speaker 4: money at.
Speaker 10: All, right, and a lot of people who work at
Speaker 10: Rivian were instrumental to that Model three ramp, So they've
Speaker 10: learned their lessons in terms of how to make.
Speaker 6: A ramp go.
Speaker 10: Well, yeah, I mean I think it'll be a really
Speaker 10: interesting fourth quarter to see what happens.
Speaker 8: You know.
Speaker 10: The challenge the Tesla faces is that everyone in the
Speaker 10: United States is like, where's my refreshed Model three? So
Speaker 10: they need to kind of clear out that inventory. And
Speaker 10: our opinion column is Liam Liam Denning has an excellent
Speaker 10: column today on this as well.
Speaker 3: Looking at some of the analysis in response to some
Speaker 3: of these numbers. You know, Rivian is seemingly sort of
Speaker 3: a positive news story. Ever, core Issi coming out with
Speaker 3: an upgrading to overall where they think this business is
Speaker 3: going to go, they go from to an outperform from Inline. Ultimately,
Speaker 3: how are they setting themselves apart from a brand appeal
Speaker 3: perspective here from the bazaars to make these big sort
Speaker 3: of scale purchases with a Rivian rather than with a Tesla.
Speaker 10: Well, I think that their their strategy is really interesting.
Speaker 10: I mean, they are clearly squarely focused on the pickup
Speaker 10: truck market, which is where Tesla has lagged. A lot
Speaker 10: of people are wondering where is the cyber truck We've
Speaker 10: seen photographs of the truck kind of around the San
Speaker 10: Francisco Bay area and in Texas, but they actually haven't
Speaker 10: like handed any over the customers yet. So the truck up,
Speaker 10: the pickup truck market is clearly where Revian is focusing.
Speaker 10: But then Revin Rivian also has this incredible deal with
Speaker 10: Amazon for the delivery vans, and that's not a segment
Speaker 10: that Tesla has played in at all yet.
Speaker 4: All right, Bloomberg's down a whole everything, ev, but real
Speaker 4: focus on those Tesla numbers, thank you, all right. JP
Speaker 4: Morgan over in London is hosting its Tech Stars Leadership Forum,
Speaker 4: which basically brings together companies and investors to hear from
Speaker 4: the industry's top players. Earlier today, we had an exclusive
Speaker 4: conversation with JP Morgan CEO Jamie Diamond.
Speaker 6: Have a listen.
Speaker 8: It's a living, breathing thing. It's going to change.
Speaker 11: They're going to be all different types of models and
Speaker 11: different types of tools and technology.
Speaker 8: But the way to think about for us.
Speaker 11: Is every single process, so errors, trading, hedging, research, every
Speaker 11: app every database.
Speaker 8: You're going to be applying AI.
Speaker 11: So it might be as a copilot, it might be
Speaker 11: to replace humans. You know AI is doing all the
Speaker 11: equity hedging for us. For the most part, it's idea generation,
Speaker 11: it's large language models, it's no taking while you're talking
Speaker 11: to someone and whiles taking notes and may actually say
Speaker 11: to you that here's the thing of interest to climb
Speaker 11: by Peterson, all error, all customer service, it's a little
Speaker 11: bit of.
Speaker 5: Everything that it is going to replace some jobs.
Speaker 11: Of course, yeah, but I look, folks, people have to
Speaker 11: take a deep breath. Okay, technologies always replace jobs. Your
Speaker 11: children will live to one hundred and not have cancer
Speaker 11: because of technology, and literally they'll probably be working three
Speaker 11: and a half days a week. Technology has done unbelievable
Speaker 11: things from mankind. But you know, planes crash, pharmacies get misused.
Speaker 8: There are negatives.
Speaker 11: This is one of the biggest negative of my view,
Speaker 11: is AI being used by bad people to do bad things.
Speaker 11: Think of cyber You know, Henry Kistenero talks about warfare,
Speaker 11: but you know the fact and I do think you know,
Speaker 11: eventually have legal guardrails around.
Speaker 8: It's kind of hard to do because it's.
Speaker 11: New, but it will add a huge value. And you know,
Speaker 11: for JP Morgan, if it replaces jobs, and we hope
Speaker 11: to redeploy people like at First Republic. You know, we've
Speaker 11: offered jobs to like ninety percent of the people they accepted.
Speaker 11: But we also you know, we've told them as we
Speaker 11: some of those jobs are transitory, but we hire thirty
Speaker 11: thousand people a year, so we expect to be able
Speaker 11: to get them a job somewhere local and a different
Speaker 11: branch or a different.
Speaker 8: Function if we can do that.
Speaker 11: So and we'll be doing that with any dislocation that
Speaker 11: takes place as a result.
Speaker 10: AI the biggest tech companies prop up a huge chunk
Speaker 10: of the SMP.
Speaker 2: Is big tech too big to fail?
Speaker 11: I think as a too a question, you know, I
Speaker 11: think in any industry, Uh well, you say too big
Speaker 11: to fail, which I've lost touch with it. That really
Speaker 11: means anymore because remember car comes are bailed out and
Speaker 11: these things are bailed out, and you know, I don't
Speaker 11: understand they should ask what they want. If the regulars
Speaker 11: don't want a bank to ever fail again, then we
Speaker 11: should do ABC, D and E. If that's the well,
Speaker 11: I didn't think that was the goal. I think Dodd
Speaker 11: Frank actually accomplished most of the goals, which is dramatically
Speaker 11: reduced to risk, create liquidity, capital stuff like that.
Speaker 8: So and big tech you got to be very specific.
Speaker 11: You know, sometimes companies misuse their position and sometimes they don't.
Speaker 11: Sometimes regularly is captured and sometimes they don't, you know,
Speaker 11: but they're they're powerful, you know, and we have to
Speaker 11: deal with I've been writing about you know, big tech
Speaker 11: going to our business. We got fintech, but we also
Speaker 11: have big tech, and they will embed payment systems in
Speaker 11: there to some we're going to white label banks kind
Speaker 11: of what Apple did you know they have the right
Speaker 11: to do that.
Speaker 8: I'm not against that.
Speaker 11: I would be against unfair use of their position to
Speaker 11: dominates in a business.
Speaker 5: Well, Apple is going to we're into financial services. Do
Speaker 5: you worry about the bank of Apple?
Speaker 11: I wrote about it. I wrote about like five years ago.
Speaker 11: You know how you like, what is a bank? Well,
Speaker 11: I will get to compete, so they have they have
Speaker 11: a tough competitor. But you know they hold money, move money.
Speaker 11: Uh that you could put money in a basically you
Speaker 11: know markets, but it's a white labeled checking account, credit card.
Speaker 8: Uh, you know all these things. Yeah, they're a form
Speaker 8: of a competitor.
Speaker 11: You know, we also partner with them, but I'm very
Speaker 11: used to partnering and competing with lots of people.
Speaker 5: Existential threat.
Speaker 11: I don't think it's an existential threat, but I think
Speaker 11: if we were complacent about it.
Speaker 3: Yes, the World of Frenemies with JP Morgan, Ce and
Speaker 3: Jamie Dimmond them. Meanwhile, coming up, we'll have more from
Speaker 3: that Tech Styles Leadership Forum in London with that girl
Speaker 3: JP Morgan.
Speaker 5: That's coming up.
Speaker 2: This is Bruebag Technology.
Speaker 4: It's time for the VC roundup and first Up. Dozens
Speaker 4: of Japanese startups, ranging from software outsourcing companies to translation
Speaker 4: gadget makers, are preparing to list on the Nasdaq in
Speaker 4: the next few years, seven of them in just the
Speaker 4: next few months. The trend follows a number of entrepreneurs
Speaker 4: turning away from an aging risk averse home market over
Speaker 4: in Japan and Canoe entered into a purchase agreement with
Speaker 4: a foreign strategic institutional investor for an investment of forty
Speaker 4: five million dollars with potential for upsizing to one hundred
Speaker 4: and fifty million dollars. The closing and sale are expected
Speaker 4: to occur as soon as possible. Plus Sequoia managing director
Speaker 4: roll Off Bota applauds the changes at X formerly known
Speaker 4: as Twitter. He spoke exclusively with Bloomberg's Emily Chang in London.
Speaker 6: Have a listen.
Speaker 12: My first job opportunity in America was given to be
Speaker 12: by Elon and it was to work for X dot
Speaker 12: com twenty three years ago. So it's an interesting full
Speaker 12: circle that it comes back. We ver enthusiastic about X.
Speaker 12: I think the things that have happened at the company
Speaker 12: in terms of changing the structure, streamline decision making to
Speaker 12: get much more rapid product evolution, record usage levels on
Speaker 12: the service, a reinvention of the business model, full transparency
Speaker 12: on content, moderation and veracity, and so we're very enthusiastic
Speaker 12: about the future.
Speaker 3: And it's early days and enthusiasm being shared from Techtles
Speaker 3: Leadership Forum. It's happening in London at the moment, and
Speaker 3: we want to have not just a conversation about what's
Speaker 3: happening in some private companies, what's happening in public world
Speaker 3: as well. From the event is Matt gel his head
Speaker 3: of EMEA Technology Investment Banking for JP Morgan and just
Speaker 3: we have some excitement of this transition from private to
Speaker 3: public once again.
Speaker 5: We've just had what one.
Speaker 3: Two, three whole IPOs of size here in the United States.
Speaker 3: How is it looking at amea level at the moment, Matt.
Speaker 13: Oh I think it's a similar level of optimism. It's
Speaker 13: been a long wait for the IPO market to reopen.
Speaker 13: We actually did have two tech IPOs in Europe happened
Speaker 13: earlier this year, but it's really the Europe looks to
Speaker 13: the US capital market to gain excitement. It's the deepest
Speaker 13: capital market in the world, and typically it opens up
Speaker 13: six months or so ahead of Europe for the tech indency,
Speaker 13: and so having those IPOs get out, get away, and
Speaker 13: get done has certainly raised enthusiasm here. And we can
Speaker 13: just see on the floor of this conference we have
Speaker 13: about fifty percent more people here than we had last year.
Speaker 13: There's definitely a much more positive outlook from everyone you
Speaker 13: talk to. So we're not out of woods yet for
Speaker 13: a tech recovery, but you can definitely feel we felt
Speaker 13: that we've hit the bottom and we're going upwards from here.
Speaker 4: Matt arms us listing was kind of like a starter
Speaker 4: gun moment here in the United States. Caroline just went
Speaker 4: so deep on that IPO day in New York City.
Speaker 4: But for you guys in Europe, was there a psychological
Speaker 4: blow to arm choosing to list in the United States
Speaker 4: rather than in London or in Europe.
Speaker 6: No, I don't think so.
Speaker 13: I mean, if you think about ARM, the heritage of
Speaker 13: the company is a British founded but global business who
Speaker 13: then took some time off the capital markets to be
Speaker 13: owned by a Japanese company. What's great for the European
Speaker 13: ecosystem As ARM was able to list, it was able
Speaker 13: to list with huge demand from institutional investors, and it
Speaker 13: set itself up for great success in the capital markets.
Speaker 13: So when we think about European companies, we think about
Speaker 13: growing them and having them.
Speaker 6: Hit the capital markets.
Speaker 13: Where they choose to go is something each company needs
Speaker 13: to make a decision for itself. So long as they've
Speaker 13: got access to the capital markets, that's a great thing
Speaker 13: for the European ecosystem. So there might have been some
Speaker 13: handwringing here or there among some politicians, but for bankers,
Speaker 13: for lawyers, for consultants in the ecosystem, we're all super
Speaker 13: excited that got done and it really should portend well
Speaker 13: for the tech ecosystem in Europe going forward.
Speaker 3: What sort of areas of growth can we expect then
Speaker 3: companies going public? You mentioned there have been a couple
Speaker 3: I'm thinking not to Mattacre is probably one that you're discussing.
Speaker 5: And I on us.
Speaker 3: These are companies that perhaps didn't get quite the exuberant
Speaker 3: of pricing at the top end of the range and
Speaker 3: then bouncing on the first day. How do we get
Speaker 3: excited about what's to come out of.
Speaker 13: Europe map Well, I think, you know, some of it
Speaker 13: has to do with you know, just as that capital
Speaker 13: markets start bounding. If you think about the IPOs that
Speaker 13: have happened in Europe, and you mentioned ionos that happened
Speaker 13: very early this year in a very different market, we're
Speaker 13: now in a position where the major industries are up
Speaker 13: mid mid to high teens, in some cases more than that,
Speaker 13: so there's a much more receptive investor environment. The next
Speaker 13: thing we're looking for is for investors to be making
Speaker 13: money on the tech IPOs, because when that happens, that
Speaker 13: means you're going to see more IPOs.
Speaker 8: And then as you.
Speaker 13: Start to see the US tech IPO's work, we're going
Speaker 13: to see more happen for the European names. I think
Speaker 13: what we'll see for European technology companies is the companies
Speaker 13: with global revenues are increasingly looking to the US, and
Speaker 13: that's so primarily the software businesses, some of the fintech
Speaker 13: businesses that are based here but have a global footprint.
Speaker 13: The more internet digital media businesses that have a European
Speaker 13: focus still really see the European capital markets as being attractive,
Speaker 13: but more so with a look toward twenty four versus
Speaker 13: twenty three.
Speaker 4: Yes, Matt, it's been an astonishing year for your industry.
Speaker 4: You forget that we started with the collapse of Silicon
Speaker 4: Valley Bank and in the UK and you're at particular,
Speaker 4: HSBC moved in really quick to take advantage of some
Speaker 4: of the vacuum. Did JP Morgan benefit from the SVB
Speaker 4: collaps Were you able to come in and find new
Speaker 4: areas of business in the tech sector.
Speaker 13: Yeah, I mean, pre dating the Silicon Value Bank collapse,
Speaker 13: we'd actually already started to really ramp up our offerings
Speaker 13: for early stage technology companies. We'd already been doing that
Speaker 13: for companies Series C and Series D. At the latter
Speaker 13: part to last year, we started ramping and offering for
Speaker 13: companies from Series A onwards. So we were very focused
Speaker 13: on supporting the tech ecosystem from early days, not just
Speaker 13: waiting for the IPO to come in so certainly Silicon
Speaker 13: Valley bank struggles. Maybe you woke up some people at
Speaker 13: vcs and some technology companies that they needed to diversify
Speaker 13: their banking relationships and being able to go to JP
Speaker 13: Morgan here in Europe and get access to our offerings
Speaker 13: on a global basis. I wouldn't say that hurt us
Speaker 13: by any stretch. It probably just raised the profile and
Speaker 13: maybe accelerated our ramp by a couple of months.
Speaker 4: L JP Morgan, great catch up. Get the perspective from
Speaker 4: over in London in Europe. Thank you very much.
Speaker 5: It's going viral. You'll have seen the pictures of.
Speaker 3: Sphere Entertainment's latest venue in Las Vegas, and it just
Speaker 3: opened on Friday with a show by the rock band
Speaker 3: You two other high profile events our schedule for the
Speaker 3: rest of the year.
Speaker 5: People are going wild for this event.
Speaker 3: Alice Attending, calling it a revolutionary leap in Live experiential
Speaker 3: company says it expects final construction costs of the arena
Speaker 3: arena to be pretty mammoth to two point three billion dollars.
Speaker 3: Shares though rallying hard today at sixteen percent in US
Speaker 3: trading ends.
Speaker 4: Let's stick with Live entertainment, the world of but here
Speaker 4: in Silicon Valley. It's the tenth season the iconic lee
Speaker 4: By Stadium in Santa Clara, next to its noisy neighbors
Speaker 4: Apple alphabet pairing of Google, and it's been a big decade.
Speaker 4: There's a big decade to come. Alguido San Francisco forty
Speaker 4: nine as president, joins us on set. You know, we
Speaker 4: always talk about the impact that big tech companies have
Speaker 4: in Silicon Valley. You guys are right in the heart
Speaker 4: of it, and you've put out some data on the
Speaker 4: dollars flying out of the stadium. Just run us through
Speaker 4: what you've announced.
Speaker 14: Yeah, I'm super excited to announce this morning that Levi
Speaker 14: Stadium and it's ten seasons has generated two billion dollars
Speaker 14: of economic impact in our region, you know, employing nearly
Speaker 14: twelve thousand people over those course of the ten years.
Speaker 14: And I think, really what's amazing in that is two
Speaker 14: years of that was really impacted by a global pandemic
Speaker 14: where we didn't have live events. So I think about
Speaker 14: it as only eight years and now looking.
Speaker 6: Forward to Super Bowl and World Cup, we're really excited.
Speaker 4: The big story of the year for Caroline and I
Speaker 4: is this huge economic phenomenon called Taylor Swift?
Speaker 6: Have you heard it's for my daughters as well.
Speaker 14: I have three daughters fourteen, twelve, and ten. I know
Speaker 14: all about friendship bracelets.
Speaker 6: Yeah, so fantastic.
Speaker 4: You guys had a tour date in July for Taylor Swift.
Speaker 4: But now looking at what's happening on social media, did
Speaker 4: you guys feel that economic effect from Taylor Swift?
Speaker 14: We absolutely did thirty three million dollars in fact of that,
Speaker 14: which is the largest concert we've ever seen. I've never
Speaker 14: seen anything like it. She is a force to be
Speaker 14: reckoned with, as we know. And look, I think that
Speaker 14: is to me, it's a microcosm of the power of life.
Speaker 14: Sports and entertainment is back coming out of the pandemic.
Speaker 14: We all thought, is this the pandemic bounce?
Speaker 6: It's not. It's here to stay.
Speaker 14: We talk about what seat we're seeing in the streaming
Speaker 14: world with people watching it. We talk about what's happening
Speaker 14: in stagums with people going it's never been better than
Speaker 14: it is right now.
Speaker 3: I mean, we'll see when the Chiefs come to town
Speaker 3: how that happens. Like sole thing so the games, but
Speaker 3: more how are you trying to ensure that you're at
Speaker 3: the cunning edge when we just see the swhere. For example,
Speaker 3: I know when I was up there in the ordering
Speaker 3: my beers at the forty nine Ers game, I was
Speaker 3: doing it all through an app and that felt really
Speaker 3: ahead of the time in twenty sixteen.
Speaker 5: How you continuing to iterate as you look towards the
Speaker 5: next ten years.
Speaker 14: It's a great question, Caroline, and we're going to spend
Speaker 14: about two hundred and fifty million over the course of
Speaker 14: the next ten years at Levi's stating updating and enhancing
Speaker 14: it not just for the fan experience, but frankly for
Speaker 14: the events that are come. We were awarded Super Bowl sixty,
Speaker 14: which will happen in February of twenty twenty six.
Speaker 6: We were all also awarded the World Cup.
Speaker 14: In the summer of twenty twenty six that will not
Speaker 14: happen obviously in any other city outside of the Bay Area.
Speaker 14: And for that, you know, our fans, and not just
Speaker 14: our fans on forty Niners game days, but fans around
Speaker 14: the globe are wanting the best technology, They're wanting the
Speaker 14: best content, they're wanting the best experience.
Speaker 6: So we're going to continue to.
Speaker 14: Advance our invest our dollars to make sure that happens.
Speaker 3: And I think when you're thinking about the experience of
Speaker 3: artificial intelligence and all the ways that you can adopt,
Speaker 3: I mean, you're not only serving as president of San
Speaker 3: Francisco forty nine Ers, but you're also part of a
Speaker 3: consulting firm where you're at elevate. Really think about how
Speaker 3: other companies are adopting all of this. It's happening quickly enough.
Speaker 3: Do you feel that really owning that space?
Speaker 14: Yeah, I think it's a really I mean, as you
Speaker 14: know you report on every day, it's an evolving space.
Speaker 14: And I think sports in the ecosystem that we see
Speaker 14: around it right now is to get to a point
Speaker 14: where we can increase the fan experience on game day.
Speaker 6: But frankly, that's only seven.
Speaker 14: Hundred thousand people that come to San Francisco forty nine
Speaker 14: Ers games. If you think about the forty nine Ers
Speaker 14: ecosystem from a fan base perspective, we have over ten
Speaker 14: million fans across the globe. So we think about our
Speaker 14: spells as a sports and entertainment franchise that's really global
Speaker 14: in nature, and we need all these technology firms to
Speaker 14: help us reach those fans wherever they are.
Speaker 4: For example, the rights that you have in the UK
Speaker 4: international marketing rights outside of the stadium, how are you
Speaker 4: going to grow revenue in eyeballs? Is it a streaming
Speaker 4: fust strategy because you will sit bound by the NFL.
Speaker 14: So yes, we're bound by the NFL as it relates
Speaker 14: to media rights, but we're not bound by the NFL
Speaker 14: as it relates to sports and marketing rights and rights
Speaker 14: and marks in those markets.
Speaker 6: So Ed, you're absolutely correct.
Speaker 14: The San Francisco forty nine Ers have rights to Mexico
Speaker 14: and London today and what we're doing in Mexico. We
Speaker 14: played a game there in Mexico City last year where
Speaker 14: we saw tremendous fan engagement I think the highest gate
Speaker 14: in NFL history as it relates to a international game.
Speaker 6: Played on the England side. In the UK.
Speaker 14: Not only does San Francisco forty nine Ers own Leeds
Speaker 14: United which is in the championship now, but we are
Speaker 14: activating daily. I know we have a global watch party
Speaker 14: coming up for our game we're playing this Sunday night
Speaker 14: in prime time against.
Speaker 6: The Dallas Cowboys.
Speaker 14: So again it's all about reaching those fans wherever they are.
Speaker 3: Ritz they love football and all its forms and guys
Speaker 3: is al Guido.
Speaker 5: We love it.
Speaker 3: Thank you, President of San Francisco forty nine ers. Great
Speaker 3: to spend some time with you. Meanwhile, look that's it
Speaker 3: for this addition of Bloomberg Technology ED what a fault?
Speaker 4: Yeah hour, We have got fast out to the to
Speaker 4: the week exactly recap on our podcast where yougate your podcast.
Speaker 4: You can find it on all the Bloomberg platforms as
Speaker 4: well as Apple, Spotify, and iHeart. FROMSF in New York City,
Speaker 4: this is Bloomberg Technology.