Speaker 1: I'm Caroline High and Blue Mugs World headquarters in New York,
Speaker 1: and this is Blue Mug Technology. We talked layoffs, salesforce
Speaker 1: and video on the latest to announced cuts in an
Speaker 1: effort of curb spending. We break down the most vulnerable
Speaker 1: areas in tech this year. Meanwhile, Tesla rebounds after Kathy
Speaker 1: would vise the dip. We'll dig into the ball in
Speaker 1: the bear case for the ev maker and generative tech.
Speaker 1: It's already the next big thing in Silicon Valley. We
Speaker 1: discussed the risks and rewards for AI based platforms like
Speaker 1: chat GPT, but first, so far ahead of investment strategy,
Speaker 1: Lizzie Young is with us to talk all about well,
Speaker 1: really the moon music around investors at the moment. There
Speaker 1: is caution, there is worry, there is more macro headwinds
Speaker 1: to come. It feels like, yeah, there is, But none
Speaker 1: of this is really new. I think a lot of
Speaker 1: this has left or from December, and we had a
Speaker 1: really rough month in December, especially at a time when
Speaker 1: it was supposed to be this year end rally possibility.
Speaker 1: None of that actually came to fruition. So investors heard
Speaker 1: again from the FED today about their determination to keep
Speaker 1: rates higher. Again, not new news, So anybody that was
Speaker 1: caught flat footed on those minutes, I think maybe hasn't
Speaker 1: really been paying attention. So, yes, they're going to keep
Speaker 1: rates higher. But here's the good news. We may know
Speaker 1: by the end of the first quarter whether or not
Speaker 1: they're done hiking. Right now, the only thing that's baked
Speaker 1: in is twenty five basis points in February and another
Speaker 1: twenty five in March, and then that might be the
Speaker 1: end of raising rates, and then we just have to
Speaker 1: figure out how long they pause for to that end.
Speaker 1: Have we seen enough of that starting to be baked
Speaker 1: into the overall valuations, particularly in the world of technology,
Speaker 1: we have seen some of the big tech names, Apple
Speaker 1: for example, really rolling over. How have we baked in
Speaker 1: enough of the bad news when it comes to interest
Speaker 1: rate heights. I think we've baked in the idea of
Speaker 1: monetary tightening, so that happened largely in obviously the huge
Speaker 1: drawdowns that we saw, particularly in growthy areas of the market,
Speaker 1: So we've baked in basically the FEDS hawkishness. What is
Speaker 1: not yet baked in is whether or not we're going
Speaker 1: to confirm a recession. So if we do confirm a recession,
Speaker 1: and I think we would know that by labor markets
Speaker 1: actually starting to crack, then stocks likely need to go
Speaker 1: down further. Usually recessionary drawdowns are beyond and the furthest
Speaker 1: we've gotten so far. As The other thing that I
Speaker 1: don't think is quite baked in yet is when earnings
Speaker 1: revisions come down even further. Right now, they're still showing
Speaker 1: estimates for three as you're over your growth being pretty
Speaker 1: flat compared to two. I can't imagine that that's going
Speaker 1: to end up being the case In an environment where
Speaker 1: revenues are likely to come down, wage pressures are likely
Speaker 1: to stay sticky, and companies are going to see their
Speaker 1: bottom line and their margins get pressured. So I would
Speaker 1: expect earnings revisions to come in and show more of
Speaker 1: a contraction somewhere in the range of five to ten
Speaker 1: percent for the year. I don't think that's all priced
Speaker 1: in yet either. Well said and in fact sort of
Speaker 1: agreeing with you is Mike Wilson, of course, a bit
Speaker 1: of a perma bear. The right bear it was last
Speaker 1: year in terms of some of his calls is over
Speaker 1: a Morgan Stanley. He had this to say when we
Speaker 1: heard the news out of salesforce, the job cuts, and indeed,
Speaker 1: whether or not big tech is a good cost cutter,
Speaker 1: just take a listen list. I think the concerns about
Speaker 1: tech companies, John, is that they're not good cost cutters traditionally,
Speaker 1: right there, their growth companies, they tend to want to
Speaker 1: invest into these downturns. They they want to invest, you know,
Speaker 1: aggressively through all periods of time, and they're just not
Speaker 1: good at cost cutting, and so they're gonna be late
Speaker 1: on that. They're probably not going to do enough, and
Speaker 1: so it will take me longer than you think, and
Speaker 1: so the margin degradation can be more severe in those
Speaker 1: areas as you're racing for more cost cutting and and
Speaker 1: indeed perhaps not that effective cost cutting coming from big tech. Well, look,
Speaker 1: I have a lot of respect for Mike. I've been
Speaker 1: called a perma bear this year and for the last
Speaker 1: twelve months because I continue to be cautious. So I
Speaker 1: align with a lot of the things that he's saying. Now,
Speaker 1: tech companies cutting costs, He's probably right that they're not
Speaker 1: used to doing that. He is right that growth companies
Speaker 1: do tend to reinvest in the business. That's the idea
Speaker 1: of a growth company. That's why you also don't find
Speaker 1: a lot of growth companies that pay out dividends or
Speaker 1: engage in stock buybacks, because they're taking that capital that's
Speaker 1: available and reinvesting it into the growth of the business.
Speaker 1: Where I think any business is going to suffer ine
Speaker 1: is in what he said if they wait too long
Speaker 1: to cut costs, because if and when the labor market
Speaker 1: starts to show signs of weakness, the consumer likely pulls back.
Speaker 1: That can happen very quickly, and if companies are only
Speaker 1: modeling out one quarter one half of the year at
Speaker 1: a time, they might not cut costs quickly enough in
Speaker 1: order to pivot and catch sort of that revenue degradation
Speaker 1: that could happen as a result of lower consumer spending.
Speaker 1: What are some of the upside risks is the up
Speaker 1: side risks so that if we do have a recession,
Speaker 1: what we need to continue paying attention to is that
Speaker 1: it would reset the business cycle. I said that in Outlook,
Speaker 1: I'm going to keep saying that probably for the entire
Speaker 1: first half of the year, we do need to reset
Speaker 1: the business cycle. We are decidedly late cycle right now
Speaker 1: in order to get back to early cycle. A recession
Speaker 1: would reset it, and then we can start talking about
Speaker 1: where are the opportunities, What are the opportunities that we
Speaker 1: would see in a classic coming out of a recession scenario.
Speaker 1: And in that case, I would be looking at cyclicals,
Speaker 1: I'd be looking at small cap value. If the market
Speaker 1: gets down below thirty, I'd start looking at cyclical parts
Speaker 1: of tech like semiconductors. So we can start to think
Speaker 1: about that. The other thing that's positive is that bonds
Speaker 1: are again a decent option and they are trading at
Speaker 1: really good valuations. But the time is now before a
Speaker 1: recession is confirmed. You talking treasuries here, or what about
Speaker 1: Coote predict because actually some of bug intelligence are anticipating
Speaker 1: a whole load row perhaps corporate debt to be issued
Speaker 1: by some of the big tech companies. Yeah, that good.
Speaker 1: Good idea to distinguish that I am talking about treasury
Speaker 1: is the time is now in treasuries, particularly two year treasuries,
Speaker 1: before a recession is confirmed. Corporate debt. However, the way
Speaker 1: that we look at that is typically the spreads, and
Speaker 1: you can look at the spreads over the ten year
Speaker 1: treasury for example, corporate debt has not shown recessionary valuations
Speaker 1: at this point, So I would say corporate debt is
Speaker 1: kind of in that equity market camp where it's shown
Speaker 1: some valuation compression but not enough to say that, Okay,
Speaker 1: we're ready for the recession to be here, or that
Speaker 1: we're we have actually priced in a recession. So I
Speaker 1: would expect corporate debt and credit spreads, particularly in the
Speaker 1: high yield space, to blow out wider before they start
Speaker 1: to come back in again. And let's just for of you,
Speaker 1: whether they be a retail investor whether it be more
Speaker 1: of an institutional investor. Are you thinking in the next
Speaker 1: once we've got so much uncertainty, still upside risk, sanity downside,
Speaker 1: more cautious trading upon us. Is it best to be
Speaker 1: broad or is it better to be doing your fundamental
Speaker 1: analysis on individual companies. Is it well the earnings that
Speaker 1: you start to look at, or is it more the
Speaker 1: macro in the data that you're going to be focused on.
Speaker 1: Year was absolutely a year of the macro. Is a
Speaker 1: very macro driven environment, is likely to have some macro
Speaker 1: forces still hanging over our heads. Obviously in the middle
Speaker 1: of a rate hiking cycle. But the good news about
Speaker 1: that is that I think the rate hiking cycle is
Speaker 1: beginning to mature, so some of those macro forces won't
Speaker 1: be as interesting to the market anymore. Like we've already discussed,
Speaker 1: I think a lot of that monetary tightening has really
Speaker 1: been baked in, so it is important to look at
Speaker 1: the fundamentals. It's definitely important to look at the quality
Speaker 1: of a company and their ability to generate revenue, their
Speaker 1: ability to cut costs and manage not only what they're
Speaker 1: reinvesting in the business, but what they're able to return
Speaker 1: to shareholders. And that's why dividend strategies have been so popular,
Speaker 1: because it has been this returning some of that value
Speaker 1: to shareholders. Fundamentals are absolutely important. Valuations are probably the
Speaker 1: most important part of the fundamental story in smart words
Speaker 1: as we look ahead to what's going to be another
Speaker 1: turbuline here. I'm sure Lizzie Young, we always appreciate your
Speaker 1: time so far ahead of investor strategy stay well. The
Speaker 1: way to think of this is there was the Stewapoli
Speaker 1: between Google and Meta. They now control less than half
Speaker 1: of the advertising money, so that their overall control that's
Speaker 1: supplient as other areas have grown, and so what has
Speaker 1: happened is television with connected TV streaming is digital also,
Speaker 1: and it's now benefiting in the same way that digital
Speaker 1: advertising benefited Google and Meta, and so you see this
Speaker 1: growth occurring there more customers coming into the market, they're
Speaker 1: spending more. It's diversifying the customer base away from just
Speaker 1: a thousand or two thousand advertisers to many. War and
Speaker 1: so television is coming on strong as his third big
Speaker 1: scale channel that's now a true digital channel. Mountain CEO
Speaker 1: there Mark Douglas talking about the advertising industries shift away
Speaker 1: perhaps and Meta and Google to those new players in
Speaker 1: the media arena. And in fact, some of those media
Speaker 1: names that offer streaming profit offerings are really rallying and
Speaker 1: they've been running hard on the day, Paramount and more
Speaker 1: than eight percent, Warner Brothers up more than eight percent
Speaker 1: as well. Analysts even though still seem to see weak
Speaker 1: ad demand eluser streaming profitability. In fact, mcquarie was the
Speaker 1: latest to cite such concerns on the day. So what
Speaker 1: is the ball the bear case of media companies and
Speaker 1: which streaming offerings are likely to win out? Got the
Speaker 1: perfect take for you. An analyst of course, who had
Speaker 1: the charge on Netflix, upgrading it to a buy from
Speaker 1: Cell in the previous week, Ken ley On as a
Speaker 1: director of equity research over at cfr A and Ken
Speaker 1: just talk to us about the immediate short term rallies
Speaker 1: that we're seeing in some of these companies. I mentioned
Speaker 1: Warner Brothers paramounts. Does it take you by surprise? So
Speaker 1: it's really looking at the business and whether this is
Speaker 1: a market that's going to grow and there's going to
Speaker 1: be winners and losers. And we're coming off where the
Speaker 1: industry movies and entertainment stocks are down, so that serves
Speaker 1: as a bottom, if you will. Then it's a question
Speaker 1: for analysts to really figure out could there be a
Speaker 1: winner in a highly competitive, new disruptive area, which is
Speaker 1: video streaming and what that does to their business, including
Speaker 1: the legacy areas whether they be broadcast or pay TV
Speaker 1: or film. It's complex and we had to sell on
Speaker 1: Netflix most of two. We switched to a buy because
Speaker 1: doing some soul searching and maybe we were a little
Speaker 1: too severe on the valuation. Say Netflix shouldn't trade at
Speaker 1: a premium to a Water Brothers Discovery paramount or is they?
Speaker 1: But we think today they should because they are really
Speaker 1: focused on winning. Okay, talk to us about the focus
Speaker 1: on winning. Talk to us about whether enough pain, enough stress,
Speaker 1: enough cutting out of the extra fat and the margin
Speaker 1: is preserved over a Netflix, particularly as they've got this
Speaker 1: added edition of advertising revenue coming forward. The download looks
Speaker 1: very good for three and twenty four for this company
Speaker 1: because they're going to have new revenue streams importantly coming
Speaker 1: from advertising going from zero, but taking some fair share
Speaker 1: away from some of the companies you mentioned Google and Meta,
Speaker 1: but also the traditional broadcast area. There is a secular
Speaker 1: shift to streaming, and Netflix has a management that's been
Speaker 1: in place for ten years. They've organically grown a global
Speaker 1: based technology platform and library and shows that people want
Speaker 1: to watch. They also have a wide range of rain
Speaker 1: plants today with a new add pay plan of six
Speaker 1: ninety nine, but most of the affluent viewers are paying
Speaker 1: for higher features and high death Add to that, well,
Speaker 1: what are the competitors doing? Each of these has changing managements,
Speaker 1: They're dealing with complex mergers, they're not sure what they
Speaker 1: want to keep or what they want to sell, and
Speaker 1: they're also trying to figure out really in terms of
Speaker 1: how are they going to win the streaming as they
Speaker 1: hold on to either legacy businesses and broadcasts or other
Speaker 1: areas like parks. That's very difficult to do. So I
Speaker 1: think Netflix has the chance to outrun its competitors, and
Speaker 1: we're definitely going to see it in It's interesting that
Speaker 1: you said changing management. Of course, it's sort of revolving
Speaker 1: in some way, particularly when you think about the company
Speaker 1: that does indeed have parks one Disney. How wou do
Speaker 1: you think is Bill Bigo a net positive in general
Speaker 1: for that business at the moment, particularly when it comes
Speaker 1: to the focus on dreaming. So I haven't covered Disney
Speaker 1: or these companies for ten years, but you know, my
Speaker 1: observation is Bob Iger's coming back to do the job
Speaker 1: he was unfulfilled. He made an enormous acquisition back two
Speaker 1: thousand nineteen. Disney has high debt. They're trying to generate
Speaker 1: higher cash flow and earnings and return to shareholders. They
Speaker 1: don't pay a dividend, they don't buy backstock. But this
Speaker 1: is Disney h stocks cheap trading below ninety So we
Speaker 1: have a view that I could probably will do things
Speaker 1: that will be positive for shareholders. Well, we're not sure
Speaker 1: what it is. They have a put coal with Comcast
Speaker 1: for Hulu. That's a big number. They have to decide
Speaker 1: from activists like low what to do with ABC or
Speaker 1: espn uh. And it's complex and at the end of
Speaker 1: the day, the heart of this company is not video
Speaker 1: streaming Disney plus Uh. It's going to be challenging compared
Speaker 1: to Netflix, which is organically a hundred percent focus on
Speaker 1: video streaming and that's where viewers are going. Advertisers are
Speaker 1: following a little bit slower, but they're switching over to
Speaker 1: the streaming market and that's really going to benefit the
Speaker 1: stronger players. Well, there's another strong day for Netflix trading
Speaker 1: as well. On the day I'm almost five percent Kenny
Speaker 1: on It is great to catch up with you, stay well,
Speaker 1: Director Equity Research over at c f R A with
Speaker 1: that or double rays for Netflix last week to a buy. Meanwhile,
Speaker 1: another story we continue to watch and we stick on
Speaker 1: kind of the focus on advertising because Facebook's pair at
Speaker 1: Meta platforms then find four million dollars by the European
Speaker 1: Union's main privacy watchdog. The penalty has to do with
Speaker 1: the way users data is used for personalized ads on
Speaker 1: Facebook and Instagram. Meta has three months to ensure the
Speaker 1: processing of such information complies with eating rules coming up
Speaker 1: or shares a salesforce. They rose after a pretty painful announcement,
Speaker 1: and that's about cutting stuff by about ten percent. More
Speaker 1: of the company's restructuring plans. That's next, And as we
Speaker 1: had to break, let's take a little look at Apple
Speaker 1: shares losing shine after an argly month. The stock fell
Speaker 1: top percent in December, taking the company's market value below
Speaker 1: that are two trillion dollars. Now, investors are concerned that
Speaker 1: matters could get worse because of course delays in iPhone production.
Speaker 1: What's of course continue with China's COVID and weakening demand
Speaker 1: as the economy slows down from New York and look,
Speaker 1: they keep on coming layoffs and the tech industry, this
Speaker 1: time Salesforce announcing it will cut about ten percent of
Speaker 1: its workforce and indeed reduce real estate holdings. Joining us
Speaker 1: now as Bloomberg technophor to Brodie Ford who helped and
Speaker 1: analyze what was put out as a statement by the company,
Speaker 1: and do we have any hints of wear or or
Speaker 1: or you know, geographies of anything around these sorts of cups.
Speaker 1: It appears to be very broad based at this time.
Speaker 1: I've spoken that people from legal to philanthropy to sales
Speaker 1: recruiting I think when we see a big layoff like this,
Speaker 1: we assume all you cut all the recruiters, all the
Speaker 1: sales people, but there are some engineers in there too.
Speaker 1: It appears pretty broad. Um, everybody knows Salesforce is one
Speaker 1: of the biggest employers in San Francisco. If it is
Speaker 1: an equal layoff across their geographies, that would mean about
Speaker 1: a thousand people cut from San Francisco at a time
Speaker 1: when obviously their downtown is struggling. And to that end,
Speaker 1: do be therefore worry about San Francisco in the real
Speaker 1: estate therefore that they have there, if they're going to
Speaker 1: be sort of coming to an end of some of
Speaker 1: their leases. Well, what's funny about this is that they're
Speaker 1: talking about they're cutting leases, but at the same time
Speaker 1: they're saying, we're forcing some people back to the office. Right.
Speaker 1: Salesforce has said, you know, a year or two ago,
Speaker 1: Benny Office, I was saying, we're never going back, but
Speaker 1: there are some sales people being forced back to the office.
Speaker 1: Management is increasingly focused on product to the and these
Speaker 1: kinds of measures. So, you know, are they cutting some
Speaker 1: real estate? Yeah, but the tower is not going anywhere.
Speaker 1: Even if it was sinking at one point around that
Speaker 1: is this it intense of announcements, do you think? And
Speaker 1: more to the point, how does it dent the culture
Speaker 1: or actually take away some of that anxiety because there
Speaker 1: was commult were reporting with you almost on a daily
Speaker 1: basis last year about changes at the top of this business,
Speaker 1: and now it's going to be filtering down. I would
Speaker 1: say almost no one is surprised that there was a layoff.
Speaker 1: I mean, everybody I spoke to said that there was
Speaker 1: that kind of fear in the air. Um, the scale
Speaker 1: of it is higher than's unexpected. I think I was
Speaker 1: hearing the number around five thousand a little more often
Speaker 1: it was eight thousands. So it was large. And of
Speaker 1: course no one wants new rolling layoffs. I don't think
Speaker 1: management is planning to do another big layoff tomorrow. But hey,
Speaker 1: it's a worsening macro. They're doing this because they're seeing
Speaker 1: slow in growth and they need better profits. So I mean,
Speaker 1: I don't think we can confidently say that this is it.
Speaker 1: I mean, and our viewers would agree. We took to
Speaker 1: Twitter asking really whether the worst is behind us? Will
Speaker 1: take layoffs? And no, fifty three let's called. I think
Speaker 1: still there's more to come. You cover a broad range
Speaker 1: of companies, is it those most focused on selling into
Speaker 1: corporate businesses? We were just hearing about, of course Microsoft,
Speaker 1: the downgrade from ubs today, the warriors about Azure and
Speaker 1: they sort of the weak parts of the tech space
Speaker 1: right now. Well, what's funny is for a while it
Speaker 1: was if you were enterprise, you are good. It was
Speaker 1: the consumer facing market that's the one that was in danger.
Speaker 1: But as those consumer businesses have gotten more in trouble,
Speaker 1: but people whom sell those companies software are seeing it too,
Speaker 1: So it's kind of trickling up now to those places
Speaker 1: that were a little safer. Your Salesforce is your Microsoft.
Speaker 1: So as long as the picture is worsening in terms
Speaker 1: of consumer demand, I think it's still will hit the
Speaker 1: enterprise players. Brodie, thank you bringing us all in the
Speaker 1: analysis and this news, Brodie forward And of course Salesforce
Speaker 1: isn't the only company out with layoff news. Even on
Speaker 1: the day. On Wednesday, Video announced it will elevens global
Speaker 1: full time workforce, also to focus on the company's sustainable,
Speaker 1: profitable growth. Shares of the video software company rose about
Speaker 1: to see fight sent on the news. I use it
Speaker 1: every day. It makes driving safer less stressful. Uh and
Speaker 1: and I'm less tired after driving. It's a great product.
Speaker 1: And by the way, it improved yesterday while it was
Speaker 1: sitting in my driveway. The car I owned today is
Speaker 1: better than the car I owned yesterday. It's the pragmatic case.
Speaker 1: I mean, like, let's be honest, this is a world
Speaker 1: class um product that people love and that makes them
Speaker 1: safer and gets him to and from places faster and easier. Uh.
Speaker 1: And I don't expect it that that hasn't changed. Uh
Speaker 1: And so we expected to continue. Welcome back to Rebot Technology.
Speaker 1: I'm Counterline Herd in New York. And that, of course
Speaker 1: was our chief futurist Brett Winton, who Tuesday was talking
Speaker 1: about that the bull hey sequeled at the Pragmatic case.
Speaker 1: The bull case of Tesla, which has been under pressure
Speaker 1: after announcing a delivery miss. Another ball is Brett's foss
Speaker 1: Cathy Wood, who has bought the dip no doubt helping
Speaker 1: the bounce back. On Wednesday, I want to dig into
Speaker 1: Tesla a little bit more about well, really, where this
Speaker 1: price is going, where the fundamentals are going. The Morning
Speaker 1: Star equity strategist Seth Goldstein seth great to catch up
Speaker 1: with you, and look, you've got to buy on this stock.
Speaker 1: And like many others, you see the price basically doubling
Speaker 1: to about two or thirty one is where the general
Speaker 1: price target is for this year in the next twelve
Speaker 1: months for Tesla and you have about two twenty. Can
Speaker 1: you talk us through the reasoning why you think this
Speaker 1: is a by the dip moment. Yeah, so so tepla
Speaker 1: and shifting into a lower growth mode. The growth is
Speaker 1: still there in the fact of that a reason more
Speaker 1: price right now? You know a lot of the lot
Speaker 1: of the antillary businesses like fullth self driving and essentially
Speaker 1: growth of the insurance are being heavily dipcounted, as well
Speaker 1: as future card saving that management can still implement as
Speaker 1: they're ramped up at factory and had accused a battery
Speaker 1: day goals that will still drive marked than higher fie
Speaker 1: popper growth in accept the revenue growth even if revenue
Speaker 1: growth is more in the I teams over the next
Speaker 1: ten years instead of manage target. So we feel out
Speaker 1: of upside in the stock at current pre is it
Speaker 1: then a story of show me stock? What's interesting is yes,
Speaker 1: they did miss the targets their own internal targets to
Speaker 1: deliver more than growth in terms of deliveries last quarter,
Speaker 1: and they missed it. They got in is still strong?
Speaker 1: Do we need to have more clarity, more real sort
Speaker 1: of basic analysis and future guidance coming from Tesla so
Speaker 1: we can set our sites a little bit more realistically. Yeah,
Speaker 1: I think that certainly would help management. Just for saying
Speaker 1: that we effect the growth fifty percent a year and
Speaker 1: delivery over a multi year period does not really help
Speaker 1: with yearly year guidance, especially as Tesla is now big
Speaker 1: enough to start seeing a demand impact from an economic slowdown.
Speaker 1: You know, now that they've got there at one point
Speaker 1: three million vehicles annually, they're gonna start to see some
Speaker 1: consumers who may want to hold off on that big
Speaker 1: ticket item and then wait till the next year while
Speaker 1: we're gonna slowdown. So, you know, I think management guidance
Speaker 1: and the more the more sort of confidence they can
Speaker 1: give us around specific targets and numbers from a year
Speaker 1: to year basis will certainly help the stock. As I
Speaker 1: think investors right now we're searching for what is the
Speaker 1: right growth rate, and with a high growth stock like Tesla,
Speaker 1: even small changes in a growth rate assumption can materially
Speaker 1: change your valuation for the stocks. Yeah, I mean talk
Speaker 1: to us about the incentives that will be having to
Speaker 1: be dangled in front of a US buya is that
Speaker 1: a warrior? Is that shining a light on the fact
Speaker 1: that the price point is going to have to change.
Speaker 1: We do think there's gonna be some small price cuts
Speaker 1: as Tesla is gonna want to make sure that as
Speaker 1: many of its vehicles as possible physically some model threeason
Speaker 1: model why we'll ultimately fallify for the inflation reduction that
Speaker 1: tet credit and heading into an economic Florida, and I
Speaker 1: think that's given me away. Test can generate strong demand growth.
Speaker 1: So we are modeling some pipe decreases for that of
Speaker 1: Platform next in this year to help generate demand growth.
Speaker 1: And they're that's going to help Test for grow to
Speaker 1: what we're forecasting and lull over one point six million
Speaker 1: deliveries in twenty three. So with all the daily sort
Speaker 1: of tussles that you get, whether it's on social media
Speaker 1: or whether it's on on ad like this, whether it's
Speaker 1: about the worries of whether is still a pretty good
Speaker 1: growth rate, whether or not we should be looking at
Speaker 1: deliveries rather than demand from real perspective, what is the
Speaker 1: main thing that we should focus our rise on now
Speaker 1: when it comes to Tesla. Is it China, is it deliveries?
Speaker 1: Is it demand? Which side should we be looking at.
Speaker 1: I think there's two key things that we should continue
Speaker 1: to focus on. One is, as we go into three,
Speaker 1: what will the growth rate be? You know, I don't
Speaker 1: expect etan double digit growth. I'm forecasting twenty four ward,
Speaker 1: then growth next year in delivery, and then to what
Speaker 1: do the proper electrics look like? If you remember back
Speaker 1: in the first quarter of last year, Pepera achieved nearly
Speaker 1: a thirty percent growth margin in the automotive segment. That
Speaker 1: was before the opening of the Berlin and Austin factory.
Speaker 1: Our production ramps up in those factories, I do affect
Speaker 1: the growth. Poperate margins will improve stfuentially and so if
Speaker 1: tethlic and continue to show profit improvement, I think that
Speaker 1: helps get profident that that the doc can still work
Speaker 1: and still be a growth dock. Monty South South Girls team,
Speaker 1: thank you, was ever talking about the growth stock that
Speaker 1: is Tesla. Let's look at We'll look at the competitive
Speaker 1: side of it all. Because electric vehicles aren't just wholly
Speaker 1: at Tesla. There's so much competition and front and center
Speaker 1: is going to be on display at the CS convention
Speaker 1: in Las Vegas. Most Keith Norton reported on this on
Speaker 1: Tuesday and joins us now and Keith, you know, we're
Speaker 1: used to basically car companies being the main proponents and
Speaker 1: main areas of display at technology companies have been the
Speaker 1: case for the a few years. What is it going
Speaker 1: to be like at CES this year? Or we're gonna
Speaker 1: have a little bit more sort of reasonable growth stories
Speaker 1: for these as companies. Yes, CS is getting real Caroline.
Speaker 1: What we're seeing this year is displays of not fanciful things,
Speaker 1: you know, flying robotaxis. We're seeing you know, electric vehicles
Speaker 1: that are either on the road today or they're about
Speaker 1: to be on the road because everybody's trying to catch Tesla, right,
Speaker 1: And so this year at CES, it's all about pragmatism
Speaker 1: and profitability, not so much about potential and profits that
Speaker 1: may come someday or not at all. People want to know,
Speaker 1: you know, what can you show me that will deliver
Speaker 1: return on investment? Now? Oh boy, pragmatism and profitability. I
Speaker 1: think it's basically the turn of phrase for every single
Speaker 1: company for the rest of twenty twenty three, whether it's
Speaker 1: a car company or not. But talk to us about
Speaker 1: there for the big intros, what are we going to
Speaker 1: be seeing unveiled at this year? So the bit One
Speaker 1: of the big e V unveilings will be Stillantis, the
Speaker 1: company that makes Jeep and Ram pickup trucks. They're gonna
Speaker 1: show a concept of an electric Ram pickup truck. This
Speaker 1: will be the one that will take on Ford's F
Speaker 1: one fifty Lightning Electric take on their new Rivian R
Speaker 1: one t and Tesla's cyber truck when that eventually comes out.
Speaker 1: So that's one of the big intros. But we'll also
Speaker 1: see another electric pickup truck, the Endurance from Lordstown Motors.
Speaker 1: We'll see some digital concepts from from VMW and Mercedes UM.
Speaker 1: But all of these things will be things that consumers
Speaker 1: can get their hands on soon. They're not just some
Speaker 1: research project in the lab. Well, talking of research products
Speaker 1: in a lab, ones have actually been more evidently on
Speaker 1: the road has been self driving and we know the
Speaker 1: way moods of this world, and indeed tails that have
Speaker 1: been trying very hard in this space are we gonna
Speaker 1: get anything in this particular focus point. Yeah. Again, pragmatism
Speaker 1: will rule the day. So what we have now, Carolina
Speaker 1: is instead of sort of the free range robotaxis that
Speaker 1: will take us anywhere, we're gonna see a self dryving
Speaker 1: tractor from John Deere. So that is the sort of
Speaker 1: thing that autonomy is is focused on. It's these use
Speaker 1: cases that are needed today and that will generate a return. Now,
Speaker 1: it doesn't mean that Weymo isn't still out there or cruise,
Speaker 1: but the thing is is that the inflection point was Argo,
Speaker 1: the self driving unit of Ford in VW going down.
Speaker 1: That's that's made this CES far more Sober people are
Speaker 1: really looking at you know, how can I make a
Speaker 1: profit today not tomorrow. Sober, pragmatic, I'm not sure either
Speaker 1: those things are gonna be summing up the enthusiasm we'll
Speaker 1: get from Ed Ludlow on the ground in Las Vegas.
Speaker 1: But Keith, he set us up wonderfully for tomorrow. Keith Norton,
Speaker 1: we thank you and do not forget. Thursday Friday, Full
Speaker 1: of Energy is going to be Bloomberg Technology Live from
Speaker 1: the Consumer Electronics Show in Las Vegas. We're gonna be
Speaker 1: chatting with so many leaders Delta see you at Bastion.
Speaker 1: He's a key speaking that sees the director Jenn Easily,
Speaker 1: siemens Us CEO Barbara Hampton's and Calcolm CEO Cristiano Alon
Speaker 1: do not want to miss it. I mean, while coming
Speaker 1: up in here and the now, the generative AI is
Speaker 1: all of us and Silicon Valley. So what are the risks,
Speaker 1: what are the actual rewards and the best strategy to invest.
Speaker 1: We're going to have NFX general partner James Career here.
Speaker 1: This is willing Berg. So the US government has seized
Speaker 1: or is in the process of seizing, hundreds of millions
Speaker 1: of dollars worth of robin Hood shares. It is all
Speaker 1: part of the fraud case against Sam Bangmin. Freed and
Speaker 1: the ft X founder bought a seven percent stake in
Speaker 1: robin Hood last year. The shares, now worth more than
Speaker 1: four d and sixty million dollars, have been claimed by
Speaker 1: various creditors of f t X who filed court cases
Speaker 1: to try and control them. This is all part of
Speaker 1: the government's fraud case against Batman, Freed, and other top
Speaker 1: f t X officials. Meanwhile, well maybe it was crypto.
Speaker 1: There's a hot thing two now calls the whole thing
Speaker 1: is AI, and we've all been playing with it, talking
Speaker 1: about and now Microsoft is reportedly upgrading its search engine
Speaker 1: with it. The Generative AI. Of course, chat, gpt dally
Speaker 1: other AI tools have got us all pondering kind of
Speaker 1: the implications for use cases as we create text, we
Speaker 1: create images, video software, code, music, three D models. My
Speaker 1: next guest is thinking on this more than most and
Speaker 1: been investing in the space more than most. NFX General
Speaker 1: partner James Currier is here to explain well the fact
Speaker 1: that back in October, before we all started got completely
Speaker 1: engrossed in it. In various Twitter trends, you said that
Speaker 1: the biggest change the Internet is already upon us, and
Speaker 1: you said it was AI and the applications. Just talk
Speaker 1: us through your thinking. Yeah, thanks for having us on.
Speaker 1: You know, as you know, NFCTS is one of the
Speaker 1: largest seat funds in the world, and our job is
Speaker 1: to be sort of on the front edge, and I
Speaker 1: would say this is on the front edge. We started
Speaker 1: investing about two years ago. It really took off, as
Speaker 1: you said, about three months ago. So we're really early
Speaker 1: in this process where we're heavy into it because we
Speaker 1: do think that it's going to affect every industry. So
Speaker 1: there's gonna be a number of unicorns and dected corns
Speaker 1: built over the next four or five years in this area.
Speaker 1: And so we've been investing heavily in it, and we
Speaker 1: uh yeah, so we published this of it which are
Speaker 1: the most fruitful at the moment, because I mean I
Speaker 1: can see copy idities and many people being somewhat concerned
Speaker 1: about the future job descriptions. But which are the most
Speaker 1: practical use cases right now that you've seen already the
Speaker 1: millions the flu into companies that are building in that
Speaker 1: space right right. So on NFX dot com, we have
Speaker 1: published the largest generative tech and generative AI market map
Speaker 1: out There is about four and seventy seven companies today
Speaker 1: and it's growing every day. About of the billion dollars
Speaker 1: it's already been invested in those companies has gone into
Speaker 1: general AI, into general AI models that are now powering.
Speaker 1: And we think of this like we would think of
Speaker 1: fiber optics in the late nineties that laid the groundwork
Speaker 1: for the Internet, and uh, going forward, we think that
Speaker 1: there's going to be more invested in the upper layer
Speaker 1: of that stack. And so um, we think they're gonna
Speaker 1: be three big winners. The first is gonna be the
Speaker 1: companies that move very fast to build sas software to
Speaker 1: do things people would expect, like copyrighting or video editing,
Speaker 1: and we're seeing that already with companies like Jasper were
Speaker 1: just raised five million dollars to do marketing and copyrighting.
Speaker 1: The second group is going to be companies that use
Speaker 1: generative AI at the core of things like marketplaces and
Speaker 1: payment structures, but not but aren't exactly delivering the AI
Speaker 1: to the customer. They're actually building it in to create
Speaker 1: a more competitive business to compete market And then the
Speaker 1: third one is going to be the visionaries who do
Speaker 1: businesses that we haven't even thought of yet, and that's
Speaker 1: typically the way these things roll out. How do you
Speaker 1: seek out the vision rais to that end, James, I mean,
Speaker 1: I know what's interesting, NFX. If you've got the false program, Basically,
Speaker 1: you take a whole load of generative technology companies, the
Speaker 1: founders there, you get them to pitch, and within a
Speaker 1: very swift turnaround, you aside whether there are a business
Speaker 1: model that you want to be funding. Is that the
Speaker 1: way to sort of find out where is it? The
Speaker 1: cutting edge that maybe people haven't thought about the practical application.
Speaker 1: That's right. We we've interviewed over a hundred generative AI
Speaker 1: companies over the last two months, and we're getting a
Speaker 1: really good sense of where the things are moving and
Speaker 1: where things are getting a little bit stuck. Um the
Speaker 1: thinking of the founders yet hasn't moved past sort of
Speaker 1: a lot of the obvious ideas. So in the market,
Speaker 1: match got a hundred companies doing text based stuff like
Speaker 1: Jasper and copy ai. Um. They're all doing very something
Speaker 1: very similar. They've got to take that next leap, and
Speaker 1: what we're doing in these conversations is to figure out
Speaker 1: who's got the ability to take that leap to the
Speaker 1: next level for what's going to be successful next summer
Speaker 1: and the end of two thousand twenty three, because what
Speaker 1: we're seeing now is sort of copycats of things that
Speaker 1: were successful a year, a year and a half ago.
Speaker 1: James was interesting about this fast program is well, the
Speaker 1: fact that it's fast, the pace in which you are
Speaker 1: able to decide that you want to cut a check.
Speaker 1: I'm interested in as we've learned some of the repercussions
Speaker 1: of all the money in the world and perhaps not
Speaker 1: some of the safety pets in place, that the governance
Speaker 1: that we'd like to see at sending businesses. I mean,
Speaker 1: we were just talking about f t X. How are
Speaker 1: you ensuring that you're getting those sorts of rules of
Speaker 1: the road in place when you write that sort of
Speaker 1: a company money. Yeah, So the FAST program writes a million,
Speaker 1: a million and a half and two million dollar checks
Speaker 1: to early stage startups with two people to tend people.
Speaker 1: So we're not putting a ton of money into these companies,
Speaker 1: so we're not giving them so much that they can
Speaker 1: start behaving badly. The second thing is that we actually
Speaker 1: sit down with them and talk with them about how
Speaker 1: to publish and follow on their values and the things
Speaker 1: they're going to adhere to. Because look generative a I like,
Speaker 1: the Internet itself can be used for good or for ill,
Speaker 1: and whether it's you know, racist or sexist comments or
Speaker 1: whether it's going to be um, you know, using it
Speaker 1: to generate images that just are unseemly. You've got to
Speaker 1: have some rules of the road that you published, you
Speaker 1: commit to your community, and then you want to behave
Speaker 1: along those lines that we help the founders put those
Speaker 1: in place. I mean, yeah, boy, we just think of
Speaker 1: how Microsoft was slightly bidden by that AI generative function
Speaker 1: and the way in which unfortunately humanity used it to
Speaker 1: start expludging hate speech. Basically, I'm interested, James, Therefore, is
Speaker 1: there any does this need to come from a federal level?
Speaker 1: This is need to come from a international organization level,
Speaker 1: to think about how we put the rules in place
Speaker 1: that we are building purposeful AI. Then, indeed, is a
Speaker 1: net positive never in any way a negative contribution. Yeah,
Speaker 1: we think so. We think that it starts out with
Speaker 1: our community. Look, we want the generative AI community, generate
Speaker 1: tech community do a lot better job than the social
Speaker 1: networking groups did a laying out the principles and values
Speaker 1: that they need to adhere to. And that's always the
Speaker 1: first step because as we explore these technologies, we who
Speaker 1: are building the technologies understand their strengths and weaknesses the best.
Speaker 1: But long term, we do need to have federal and
Speaker 1: international guidelines that we can all adhere to. And hopefully
Speaker 1: we're going to get that in crypto pretty soon because
Speaker 1: we can see what the results of not having it is.
Speaker 1: Very briefly, j when you're looking at all these different companies,
Speaker 1: where are they being built? Uh, we're seeing a lot
Speaker 1: of them in Europe, a lot of them in Israel,
Speaker 1: but the most of them are being built here in
Speaker 1: the US, on top of the great efforts to Google
Speaker 1: and open AI and others have done over the years
Speaker 1: UH to to build up a foundation of machine learning
Speaker 1: and artificial intelligence people. We've got a lot of universities here,
Speaker 1: We're putting out a lot of PhDs and masters in
Speaker 1: this area, and those people like to stay here in
Speaker 1: the US, and so we've got a lot of great
Speaker 1: teams going after this whole area, as we have for
Speaker 1: the last five or six years. It's just the processing
Speaker 1: power and the cost has come down so much in
Speaker 1: the last twenty four months that are really exploded in
Speaker 1: the last three months. James, it's been great speaking with
Speaker 1: Thanks for taking us through what seemed to be pretty
Speaker 1: much cool ahead of the n f X General partner,
Speaker 1: James Carrier. There time now for going viral, and you've
Speaker 1: seen it trending on a well countless hashtags hashtag House
Speaker 1: of Representatives, hashtag Kevin McCarthy, hashtag c SPAN. Even Wednesday,
Speaker 1: GOP leader Kevin McCarthy failed for the sixth time to
Speaker 1: rally House Republicans behind his bid for Speaker, and the
Speaker 1: House is at a stand still basically until the election
Speaker 1: of the speaker, and which means business will not be
Speaker 1: conducted until it is settled. But current chaos aside, what
Speaker 1: can McCarthy leading the House look like for technology in general? Well,
Speaker 1: McCarthy is the man leading the GOP's battle against big tech.
Speaker 1: His agenda looks to provide greater privacy and data security protections.
Speaker 1: Is going to equip parents, he says, with more tools
Speaker 1: to keep their kids safe online, and aims to stop
Speaker 1: companies from putting politics ahead of people, so they say
Speaker 1: a nod. Of course, the Republican concerns about political censorship,
Speaker 1: which we have seen big changes, are already at least
Speaker 1: over at Twitter. Remember since they must take over, former
Speaker 1: President Donald Trump has been reinstated on the platform, and
Speaker 1: just yesterday the company announced an easing of its political
Speaker 1: ads BAM. And while McCarthy's agenda doesn't specifically talk to
Speaker 1: issues like antitrust, suppose is going to be something Silicon
Speaker 1: Valley or keep an eye on now that does it
Speaker 1: for this edition of Bluebeck Technology, Stay tuned for those
Speaker 1: votes still to come. I'm sure there's gonna be more
Speaker 1: rounds of it coming from Washington. But tomorrow all eyes
Speaker 1: turned to Las Vegas. They turned to one Ed Ludlow,
Speaker 1: who is going to be joining us again in conversation
Speaker 1: of course, with CrowdStrike CEO George Kurtz alive in the
Speaker 1: hour when three Cybersecurity Outlook. You do not want to
Speaker 1: miss it. Plus, don't forget to check out a very
Speaker 1: own podcast. You'll find it on the terminal. You can
Speaker 1: find it online on Apple, Spotify, an i Heeart, and
Speaker 1: plenty more. In terms of these markets still to come.
Speaker 1: After Wednesday's rally from New York, thisibly back