WEBVTT - China Tech Stocks Surge, US Chips Get Boost 0:00:01.440 --> 0:00:02.160 From Mahart. 0:00:02.320 --> 0:00:06.720 We're Innovation of Money and Power co line in Silicon Valley, NBN. 0:00:07.080 --> 0:00:11.320 This is Bloomberg Technology with Caroline Hyde and Ed Love Love. 0:00:25.400 --> 0:00:27.840 Live from New York and San Francisco. This is Bloomberg 0:00:27.880 --> 0:00:31.520 Technology coming up. China Tech stocks on a tear after 0:00:31.560 --> 0:00:33.479 Beijing's push to boost growth. 0:00:33.880 --> 0:00:36.200 And the CHIPSAC gets a boost too with a bill 0:00:36.200 --> 0:00:39.120 headed to Biden's desk that cuts red tape. 0:00:39.040 --> 0:00:42.680 And we discuss all things MNA, the City Group's head 0:00:42.920 --> 0:00:46.080 of Tech Deals. But first let's check in on these markets, 0:00:46.200 --> 0:00:48.839 and we start with the move of the day. Ed, 0:00:49.159 --> 0:00:51.640 it is China Stocks, it is China Tech Stocks, and 0:00:51.680 --> 0:00:54.160 we shine a light on the Golden Dragon Index. Here 0:00:54.240 --> 0:00:55.920 we are up more than six percent. What does that mean? 0:00:55.960 --> 0:00:57.400 It is the biggest move in more than a year, 0:00:57.440 --> 0:00:59.760 and we're up training at the highest level in more 0:00:59.800 --> 0:01:02.880 than three months. Stimulus to the Chinese economy. It helps 0:01:02.880 --> 0:01:04.240 some of the key names that you're watching. 0:01:05.319 --> 0:01:08.480 Yeah, and understandably those two key names at Ali BARBERANJD 0:01:08.600 --> 0:01:12.840 dot com e commerce focus names, but also multifaceted tech companies. 0:01:13.040 --> 0:01:15.560 Actually two of the names on the index in positive territory. 0:01:15.640 --> 0:01:18.160 Year to date, many of them are not. We will 0:01:18.160 --> 0:01:20.520 go to our reporter later in the hour to talk 0:01:20.560 --> 0:01:23.399 about the impact of stimulus on China tech. I'm also 0:01:23.400 --> 0:01:25.959 looking at chip stocks at the index level. The socks 0:01:26.240 --> 0:01:28.600 is up for a second day so far this week. 0:01:28.680 --> 0:01:31.920 Intel what might happen to it is dominating headlines. But 0:01:31.959 --> 0:01:35.920 there's also some newscare about progress i'd say about onshoring 0:01:35.959 --> 0:01:38.279 the industry here in the United States. Bring us that story. 0:01:38.400 --> 0:01:39.120 Yeah, let's dive in. 0:01:39.160 --> 0:01:42.640 Because the US House approved legislation that would exempt some 0:01:42.840 --> 0:01:46.800 chip manufacturing projects from federal permitting requirements. It's a bid 0:01:46.800 --> 0:01:49.440 to speed up the buildout of the US semiconductor industry 0:01:49.640 --> 0:01:52.280 from moos. Mackenzie Hawkins joins us. Now, so what they 0:01:52.320 --> 0:01:54.440 don't have to take certain environmental. 0:01:53.920 --> 0:01:58.960 Boxes, right, So, whenever our projects get money from the 0:01:58.960 --> 0:02:02.520 federal government in excess of two thousand dollars, which every 0:02:02.720 --> 0:02:05.400 chip company that's getting money from the Biden administration is 0:02:05.440 --> 0:02:08.280 getting well north of that, they have to go through 0:02:08.400 --> 0:02:12.840 the National Environmental Policy Act permitting process, which basically requires 0:02:12.880 --> 0:02:15.880 all federal agencies to review the environmental impact of their 0:02:15.880 --> 0:02:19.840 major actions and also opens up projects to significant litigation. 0:02:20.560 --> 0:02:23.280 There's been concern in the chip industry from companies like 0:02:23.360 --> 0:02:27.000 Intel and Samsung and Taiwan Sumi connecting manufacturing company, that 0:02:27.040 --> 0:02:29.720 this could produce months or even years of delays on 0:02:29.800 --> 0:02:32.839 projects that the companies and the Biden administration have said 0:02:32.880 --> 0:02:36.079 are critical to national security. So the bill that the 0:02:36.080 --> 0:02:38.680 House passed yesterday, it's passed the Senate last year, so 0:02:38.680 --> 0:02:41.400 it's going to Biden's desk, would exempt some of those 0:02:41.440 --> 0:02:44.480 projects from federal environmental review. They'd still have to go 0:02:44.480 --> 0:02:47.120 through state local permitting processes, which companies say can be 0:02:47.160 --> 0:02:50.480 a headache. Environmental groups say are bedrock climate law. But 0:02:50.600 --> 0:02:53.120 this is a significant red tape cuttake at the federal level. 0:02:54.280 --> 0:02:54.480 Mac. 0:02:54.520 --> 0:02:56.600 What you do so well for our audience around the 0:02:56.639 --> 0:02:59.200 world is that there's billions of dollars coming from the 0:02:59.240 --> 0:03:02.959 Chips Act, and lots of names on paper sound to benefit. 0:03:03.480 --> 0:03:05.960 But building a fab takes a long time and it 0:03:06.000 --> 0:03:09.000 takes all that money. Is there any evidence that actually 0:03:09.040 --> 0:03:13.440 something is started in America, that there's some infrastructure popping 0:03:13.520 --> 0:03:14.359 up around the place. 0:03:15.919 --> 0:03:19.639 So we've seen more money put into chip factory construction 0:03:19.880 --> 0:03:22.120 in the past four years, kind of leading up to 0:03:22.160 --> 0:03:22.680 the package of. 0:03:22.639 --> 0:03:23.119 The chip stack. 0:03:23.160 --> 0:03:25.880 When folks thought Hey, this subs package might be coming, 0:03:26.120 --> 0:03:28.919 and of course after its enactment and during its implementation 0:03:29.200 --> 0:03:31.200 then we saw in the two decades before that. So 0:03:31.240 --> 0:03:34.760 companies are absolutely committing real money to these construction projects, 0:03:35.120 --> 0:03:37.800 but they also need to wait and see market conditions 0:03:37.800 --> 0:03:40.280 before they decide when and how and at what level 0:03:40.320 --> 0:03:43.200 to fully build out their projects. You see, companies make 0:03:43.200 --> 0:03:45.920 commitments to one fab or two fabs, but they have 0:03:46.040 --> 0:03:48.560 sites that could accommodate eight and that of course depends 0:03:48.600 --> 0:03:52.400 on customer demand. But in terms of the construction process, 0:03:52.440 --> 0:03:55.280 that's where the permitting stuff really comes into play. And 0:03:55.360 --> 0:03:58.640 so for companies that have been waiting to secure environmental 0:03:58.640 --> 0:04:02.040 permits or have been going through that process alongside actually 0:04:02.080 --> 0:04:04.240 putting shovels in the ground, this could be a really 0:04:04.280 --> 0:04:06.920 big deal in giving them confidence of their construction timelines 0:04:06.920 --> 0:04:09.560 for projects of that in many cases are already well underway. 0:04:10.560 --> 0:04:13.320 Bloomberg's Mackenzie Hawkins with the latest and the flow of 0:04:13.360 --> 0:04:15.680 dollars from the CHIPSAC Thank you very much now, As 0:04:15.720 --> 0:04:19.520 misquite McKenzie discussed, Intel is one of the chip companies 0:04:19.520 --> 0:04:22.800 that's pledged to invest billions into US chip capacity. But 0:04:22.839 --> 0:04:26.480 the top story for this industry right now is reports 0:04:26.480 --> 0:04:31.320 that rival Qualcomm has approached Intel over a friendly takeover, 0:04:31.720 --> 0:04:35.880 and Bloomberg reporting that money manager Apollos offered billions of 0:04:35.920 --> 0:04:39.440 dollars to Intel in an equity like investment. 0:04:39.480 --> 0:04:40.280 The stage is set. 0:04:41.000 --> 0:04:41.880 What happens next? 0:04:41.960 --> 0:04:45.560 Let's discuss with Phil Dury, head of Technology and Communications 0:04:45.600 --> 0:04:48.359 Investment Banking at City Group. When I woke up on 0:04:48.440 --> 0:04:52.320 Monday morning, I was still recovering from the weekend where 0:04:52.320 --> 0:04:55.680 I was recovering from Friday. In a headline where one 0:04:55.760 --> 0:04:59.400 of the biggest chip makers, Qualcomm, it's reported we're going 0:04:59.440 --> 0:05:04.320 for Intel. Well, in this environment, does that deal happen? Well, 0:05:04.360 --> 0:05:06.359 you probably won't be surprised that. I'm not going to 0:05:06.360 --> 0:05:10.080 comment specifically on the deal. What I would say Intel 0:05:10.120 --> 0:05:14.159 has a storied history dating back to nineteen sixty eight. 0:05:14.160 --> 0:05:14.720 They've got a. 0:05:14.680 --> 0:05:19.679 Collection of phenomenal assets. The company is clearly going through 0:05:19.960 --> 0:05:23.679 a transformation. Pat and his team have been pretty clear 0:05:23.760 --> 0:05:26.960 in the plans that they have outlined, including some significant 0:05:27.000 --> 0:05:30.640 CAPEX reduction. Well I would say is I'm not surprised 0:05:30.720 --> 0:05:35.400 that there's speculation around a number of interested parties, whether 0:05:35.480 --> 0:05:39.480 that be strategic or whether that be private equity who 0:05:39.600 --> 0:05:43.279 is looking to invest quite meaningfully across a whole artificial 0:05:43.320 --> 0:05:48.159 intelligence ecosystem, which we've already seen, and we've already seen 0:05:48.200 --> 0:05:50.960 Apollo obviously work with Intel. 0:05:52.240 --> 0:05:52.599 As well. 0:05:52.640 --> 0:05:56.760 Island that neither Intel nor qualcom commented on that reporting. 0:05:57.120 --> 0:05:59.280 And the other piece of reporting was Apollo, which has 0:05:59.320 --> 0:06:02.880 an existing relationship with Intel and against Strategic in the 0:06:02.920 --> 0:06:06.599 sense that they had co invested in a specific project. 0:06:07.160 --> 0:06:09.719 Why is an Intel attractive to a name like Apollo. 0:06:10.080 --> 0:06:15.640 It is a duration bet. It's infrastructure, you know, in 0:06:15.680 --> 0:06:19.560 the world of AI, it's building something physical and waiting 0:06:19.600 --> 0:06:20.520 for the payoff later. 0:06:21.040 --> 0:06:21.240 Yeah. 0:06:21.279 --> 0:06:26.520 Look, I think this is long term generational investment. Funds 0:06:26.560 --> 0:06:31.440 like Apollo take and extremely long term view beyond the frankly, 0:06:31.520 --> 0:06:34.560 the more of a short term nature of the public market. 0:06:35.000 --> 0:06:36.359 And when we look at M and A and the 0:06:36.360 --> 0:06:38.560 trends that we've seen over the last year, and MNA 0:06:38.600 --> 0:06:41.880 activity is up quite meaningfully off two very low years 0:06:41.920 --> 0:06:46.480 in twenty twenty two and twenty twenty three, and we're 0:06:46.520 --> 0:06:49.799 seeing strategics much more active. Right City advised on AMD 0:06:49.920 --> 0:06:53.360 and ZT Systems. We advised on IBM and Hashi Corp. 0:06:53.920 --> 0:06:58.320 So not as transformational necessarily as intel as we're talking about, 0:06:58.640 --> 0:07:02.960 but we're definitely seeing strategic be more proactive as it 0:07:03.000 --> 0:07:07.279 relates to growth vertical adjacencies. Where we've seen public equity, 0:07:07.279 --> 0:07:11.520 most private equity, most activia today is on dislocated public 0:07:11.560 --> 0:07:15.680 market valuations. What we haven't seen so far is the 0:07:16.840 --> 0:07:22.080 huge number of private companies with high watermark valuations in 0:07:22.120 --> 0:07:25.960 twenty twenty one starting to come to market. But time 0:07:26.640 --> 0:07:30.360 results in valuation compounding, and that's where we do have 0:07:30.440 --> 0:07:34.800 high expectations for twenty twenty five and twenty twenty six, 0:07:34.960 --> 0:07:35.920 and it's already happening. 0:07:35.920 --> 0:07:39.200 Phil Today news of one of the biggest take privates 0:07:39.680 --> 0:07:40.960 in the software area. 0:07:41.120 --> 0:07:43.119 We've got Blackstone. 0:07:42.840 --> 0:07:47.560 Vista Equity making an eight billion dollar take private offer 0:07:47.840 --> 0:07:51.120 to a company called Smartsheet. Is that the sort of 0:07:51.520 --> 0:07:55.480 software long term revenue that they want to be digging into. 0:07:55.920 --> 0:07:58.960 Where do you see other opportunities in the take private field? 0:08:00.240 --> 0:08:04.080 I think, Caroin, that's exactly spot on. We anticipate that 0:08:04.120 --> 0:08:07.600 we'll see more of this, you know, I think that 0:08:08.800 --> 0:08:13.760 artificial intelligence embedded on two years of data points in 0:08:14.000 --> 0:08:17.720 enterprise software is going to start to become really, really interesting. 0:08:17.840 --> 0:08:20.440 When we think about the first quarter of this year, 0:08:21.000 --> 0:08:25.200 the AI investment boom, if you will, focused on hardware, 0:08:26.080 --> 0:08:32.400 focused on chips where and actually we saw weakness in software. 0:08:33.200 --> 0:08:36.840 That weakness driven by a diversion of enterprise funds towards AI. 0:08:37.320 --> 0:08:39.480 But now we're starting to look forward. We've got more 0:08:39.600 --> 0:08:42.120 data points and we're starting to see a pickup an 0:08:42.160 --> 0:08:46.120 activity for enterprise software with embedded AI and how that 0:08:46.120 --> 0:08:48.920 can really be a catalyst for enterprise. So I think 0:08:48.920 --> 0:08:50.839 you're spot on. I think we'll see a lot more 0:08:50.880 --> 0:08:53.880 of this in twenty twenty five and twenty six, and 0:08:53.920 --> 0:08:56.480 we'll start to see that private supply come to market 0:08:56.520 --> 0:08:58.960 as well, which is held off for now because companies 0:08:59.000 --> 0:09:03.520 were very well capitalized. Private equity hasn't had to do anything. 0:09:03.559 --> 0:09:06.200 But now there is some pressure around DPI, and I 0:09:06.200 --> 0:09:09.199 think we'll see a more vibrant cell side as well 0:09:09.240 --> 0:09:11.480 as an active byside that. 0:09:11.440 --> 0:09:15.840 Sort of pigeonholes the positive side of making deals and 0:09:15.880 --> 0:09:19.480 taking private there's the negative side of stressed assets. 0:09:19.520 --> 0:09:21.400 I mean almost Intel might be that story. 0:09:21.440 --> 0:09:24.680 But we're looking today at Liberty Broadband. Of course, key 0:09:24.679 --> 0:09:28.760 Billion m Malone trying to place together some of his 0:09:28.920 --> 0:09:31.680 stressed streaming and cable assets. 0:09:31.920 --> 0:09:33.760 I'm looking at Liberty Broadband. 0:09:33.280 --> 0:09:37.560 And Charter Communications seemingly getting towards some sort of merger deal. 0:09:37.600 --> 0:09:37.840 Here. 0:09:38.080 --> 0:09:39.920 I'm going to see more of that mergers because they 0:09:40.000 --> 0:09:42.160 have to to survive because of industry pressure. 0:09:43.960 --> 0:09:48.400 I think you'll see combinations for sure. I also think 0:09:48.880 --> 0:09:52.600 you'll see you'll see companies looking to carve and split 0:09:53.640 --> 0:09:56.360 and break out very valuable assets as well. 0:09:56.559 --> 0:09:57.720 There's no doubt we're in. 0:09:57.640 --> 0:10:00.960 A moment of time driven by AI, which is causing 0:10:01.000 --> 0:10:06.240 corporations to look and reflect about how they're going to 0:10:06.240 --> 0:10:09.559 crystallize and maximize the valuation for their companies. That can 0:10:09.640 --> 0:10:13.920 result in adjacent combinations, but it can also result in 0:10:14.120 --> 0:10:18.000 illumination of value through carve outs through split offs. You know, 0:10:18.040 --> 0:10:20.559 we've not talked about activism, but you know, we think 0:10:20.600 --> 0:10:22.640 this will be a theme that activists will focus on 0:10:22.679 --> 0:10:24.880 over the next couple of years as well. We're definitely 0:10:24.920 --> 0:10:27.920 going to go through change, and we're going to go 0:10:28.000 --> 0:10:30.680 through change through a greater sense of certainty. On the 0:10:30.720 --> 0:10:34.280 geopolitical this year has been a year of transition, more 0:10:34.320 --> 0:10:36.920 elections than we've ever seen in the past. Obviously, we've 0:10:36.920 --> 0:10:39.000 got a big one coming up. We will have a 0:10:39.040 --> 0:10:42.880 lot greater certainty on both the macro and the geopolitical 0:10:42.880 --> 0:10:45.520 when we get into twenty five and twenty six. So yeah, 0:10:45.679 --> 0:10:47.400 I believe we're going to see more activity for a 0:10:47.559 --> 0:10:48.360 host of reasons. 0:10:48.520 --> 0:10:50.720 You mentioned AMD and ZT. What was the other one 0:10:50.760 --> 0:10:52.200 that you mentioned that you advised on. 0:10:53.040 --> 0:10:54.080 IBM and Hashiko? 0:10:54.360 --> 0:10:57.040 What is unique to both of those as they got done? 0:10:57.800 --> 0:10:59.480 And so I know you won't comment on Intel and 0:10:59.559 --> 0:11:02.600 Quilcom the idea of but in the context of what 0:11:02.640 --> 0:11:06.480 happens in November antitrust, you know, in this environment, do 0:11:06.679 --> 0:11:10.959 deals of that scale on paper, Intel ONQUO proceed. 0:11:10.520 --> 0:11:12.240 Well, the data is going to show a mixed bag 0:11:12.280 --> 0:11:16.560 of results, right. We also advised on the Broadcom VMware 0:11:16.760 --> 0:11:20.400 deal which went through. Obviously Microsoft Activision went through, but 0:11:20.480 --> 0:11:22.800 there are examples of deals that haven't gone through. What 0:11:22.840 --> 0:11:24.760 it means is just look, there's a lot of focus, 0:11:25.559 --> 0:11:28.960 a lot of preparedness that's going on early on with 0:11:29.120 --> 0:11:34.800 advisors and corporations in terms of how certain can we 0:11:34.920 --> 0:11:40.319 be with regard to global antitrust decisions, cities role positioned there, 0:11:40.320 --> 0:11:42.160 we're operating one hundred and sixty countries. 0:11:42.200 --> 0:11:43.280 It gives us a good. 0:11:43.720 --> 0:11:48.560 Global spotlight on how regulatory bodies are going to react. 0:11:48.600 --> 0:11:49.200 But you're right. 0:11:50.280 --> 0:11:53.760 All you can do is building contingencies early on in 0:11:53.840 --> 0:11:56.320 case deals break. But it can be a distraction when 0:11:56.679 --> 0:11:59.440 you know MNA is announced and it takes twelve, eighteen, 0:11:59.520 --> 0:12:01.559 twenty four months to complete. 0:12:01.880 --> 0:12:04.680 Sometimes the lawyers for is when Phil Drury, thank you 0:12:05.040 --> 0:12:09.360 had a Technologogy Communications investment banking City Group coming up. 0:12:09.679 --> 0:12:12.280 Roku remains loyal to the hardware that put the company 0:12:12.320 --> 0:12:16.600 on the map when the company's streaming ambitions then, and. 0:12:16.559 --> 0:12:18.360 I actually want to go back to Liberty Broadband. We 0:12:18.440 --> 0:12:21.440 mentioned it in that conversation, but the specifics are that 0:12:21.480 --> 0:12:25.079 Liberty went back to Charter with a counter offer, and 0:12:25.080 --> 0:12:27.560 that's kind of what's pushing up the shares twenty seven percent. 0:12:27.679 --> 0:12:28.800 I'd also point out. 0:12:28.640 --> 0:12:31.439 Like it's a big move, but Liberty is a company 0:12:31.440 --> 0:12:33.720 the carry that you also pointed out has been under 0:12:33.720 --> 0:12:36.559 a brid of pressure, the stockdown significantly over a period 0:12:36.600 --> 0:12:40.680 of time. This deal pretty dry one actually in truth, 0:12:40.720 --> 0:12:43.640 but it's one the market's paying attention this morning. This 0:12:44.000 --> 0:12:59.320 is Bloomberg Technology. Roku says the company remains quote very 0:12:59.400 --> 0:13:02.640 committed to its set top boxes as it veils a 0:13:02.640 --> 0:13:06.320 new faster version of Roku Ultra streaming box. This even 0:13:06.520 --> 0:13:09.960 is the electronics industry shifts to smart TVs with built 0:13:10.000 --> 0:13:13.480 in streaming tech For more Bloomberg Smart German joins us. Now, 0:13:13.480 --> 0:13:15.960 I find this story so interesting for two reasons. I 0:13:16.000 --> 0:13:19.120 have a Roku TV still believe it or not, alongside 0:13:19.120 --> 0:13:23.040 the Samsung Smart TV. But that sort of set top 0:13:23.080 --> 0:13:25.560 box is such a small part of their business, like 0:13:25.600 --> 0:13:26.679 they're keeping it going. 0:13:26.840 --> 0:13:30.680 Why, Yeah, the set top box is a very interesting 0:13:30.960 --> 0:13:33.280 thing for Roku. Right, that is their namesake, that is 0:13:33.320 --> 0:13:35.199 how they made their money, that is how they developed 0:13:35.240 --> 0:13:38.320 into a brand. Now for them, it's two things. One, 0:13:38.360 --> 0:13:41.800 it's all about content, that's their platform business. Two it's 0:13:41.840 --> 0:13:45.800 all about integration of the Roku operating system into TVs 0:13:45.840 --> 0:13:48.600 you buy off the shelf at Target, at best Spy, 0:13:48.840 --> 0:13:50.480 at Amazon, you name it. 0:13:50.640 --> 0:13:52.840 But the set top box is still interesting for them, right. 0:13:52.880 --> 0:13:54.680 They don't make a ton of money off these things. 0:13:54.679 --> 0:13:56.920 They cap out at one hundred dollars per piece and 0:13:56.920 --> 0:14:00.679 their money losers, but they believe it brings content which 0:14:00.800 --> 0:14:03.880 they're making a lot of money off of, including from advertising, 0:14:04.160 --> 0:14:07.400 into more people's homes. And it's a lot cheaper for 0:14:07.480 --> 0:14:10.600 consumers to get into the Roku experience, to get into 0:14:10.640 --> 0:14:12.960 the smart TV experience if they have an older TV 0:14:13.280 --> 0:14:15.960 by buying one of these hunred dollar boxes versus going 0:14:15.960 --> 0:14:18.680 out and buying a new several hundred dollars TV. Right, 0:14:19.000 --> 0:14:21.200 there's a lot of overlap between the experience you get 0:14:21.240 --> 0:14:23.600 from a set top box and a smart TV. One 0:14:23.680 --> 0:14:25.720 just requires you to buy the whole TV, the other 0:14:25.800 --> 0:14:28.280 requires you to just plug a box into your hdmiport. 0:14:28.920 --> 0:14:31.480 We're looking at one year chart of Roku. We now 0:14:31.480 --> 0:14:33.960 moved to an interday, but it has been under pressure. 0:14:34.040 --> 0:14:36.960 The earnings haven't been pleasing investors. 0:14:37.440 --> 0:14:40.280 Is this part of drumming up support from the investor. 0:14:39.920 --> 0:14:42.320 Base they've been suffering. 0:14:42.440 --> 0:14:45.680 I don't think the investor base is entirely happy or 0:14:45.680 --> 0:14:48.520 fixated on the set top box business. I think if 0:14:48.520 --> 0:14:50.800 you're investing in Roku at this point, it's because of 0:14:50.840 --> 0:14:55.200 the content business, the advertising, the platform, the integration into 0:14:55.240 --> 0:14:58.200 smart TVs and other products. This is a bit of 0:14:58.400 --> 0:15:01.200 moving away from that focus that I think investors are 0:15:01.240 --> 0:15:03.680 wanting to see. But at the same time, this is 0:15:03.720 --> 0:15:06.800 a cheap way to bring more people into the ecosystem 0:15:07.120 --> 0:15:11.000 and gather more support for its platform and more users there. Right, 0:15:11.280 --> 0:15:13.640 the majority of sales at this point are via first 0:15:13.640 --> 0:15:16.600 party and third partiesmar our TVs. But adding more people 0:15:16.600 --> 0:15:18.800 to the user base, more people that can be exposed 0:15:18.840 --> 0:15:21.920 to Roku content, is not necessarily a bad thing. Just 0:15:21.920 --> 0:15:24.320 to hope for investors is this doesn't take away from 0:15:24.320 --> 0:15:27.160 the core competency that is the thing actually making the 0:15:27.200 --> 0:15:27.920 company money. 0:15:28.440 --> 0:15:31.840 Marc German, We thank you. That's about Google now. 0:15:32.040 --> 0:15:35.320 It says it has seen faster progress in artificial intelligence 0:15:35.360 --> 0:15:38.320 as a result of a closer collaboration between its cloud 0:15:38.360 --> 0:15:42.000 computing unit and its AI research lab. Google Cloud struct 0:15:42.000 --> 0:15:45.520 deals to weave its latest AI models into popular consumer products, 0:15:45.560 --> 0:15:48.400 sharing more than seventy five customer stories, one of which 0:15:49.000 --> 0:15:53.400 was the social app Snapchat, which we'll start using Google's 0:15:53.400 --> 0:15:56.600 generative AI model to help power Snapchat's AI chat Thot 0:15:57.080 --> 0:16:00.320 New Mags Asia accounts joins us for more to deal 0:16:00.400 --> 0:16:03.360 with open AI, but they started leaning more into Gemini. 0:16:03.400 --> 0:16:07.640 It seems like yeah, so snap originally released their chatbot 0:16:07.680 --> 0:16:10.320 just last year and it started off using models from 0:16:10.320 --> 0:16:13.560 open Ai. As you mentioned, the reason they also started 0:16:13.600 --> 0:16:16.760 testing and using Gemini is because when you go on Snapchat, 0:16:16.800 --> 0:16:19.600 a lot of the time you're communicating through videos or images, 0:16:20.160 --> 0:16:22.520 and they felt like Gemini's models were really good at 0:16:22.560 --> 0:16:25.160 doing that and being able to do images, videos and 0:16:25.240 --> 0:16:26.800 texts or at the same time. 0:16:27.040 --> 0:16:29.040 So that's why they started using Gemini as well. 0:16:30.040 --> 0:16:30.360 Heicha. 0:16:30.480 --> 0:16:32.120 I think I'm right and saying, you were at Snap 0:16:32.200 --> 0:16:34.400 the other day and you've kind of seen the latest 0:16:34.480 --> 0:16:38.280 gen of hardware from them, and this is heating up, 0:16:38.320 --> 0:16:42.800 Like meta, it was a surprise story that at least 0:16:42.800 --> 0:16:46.360 the ray bands and your interaction using a voice based 0:16:46.680 --> 0:16:49.680 AI assistant would take off. You know, I've had experience 0:16:49.720 --> 0:16:50.040 with it. 0:16:50.400 --> 0:16:51.680 How real is this for Snap? 0:16:51.760 --> 0:16:53.440 Like, do they really think this is going to be 0:16:53.480 --> 0:16:54.840 the future for them? 0:16:55.840 --> 0:16:56.720 I think they do. 0:16:56.840 --> 0:16:58.960 I mean they're spending a lot of money, right They 0:16:59.160 --> 0:17:01.800 are supposed to spend up to one point five billion 0:17:01.840 --> 0:17:03.720 dollars I believe this year, which is about half of 0:17:03.760 --> 0:17:07.040 their expenses on things like infrastructure. 0:17:06.400 --> 0:17:07.840 To support all of these new tools. 0:17:07.920 --> 0:17:11.879 If we're thinking about artificial intelligence, augmented reality through glasses, 0:17:12.040 --> 0:17:13.440 machine learning, all those sorts. 0:17:13.280 --> 0:17:15.399 Of things, they're really doubling down on this. 0:17:15.720 --> 0:17:17.800 So if you think about AI, it's not just a chatbot, 0:17:18.280 --> 0:17:20.840 but it's AI and the glasses as you mentioned, and 0:17:20.880 --> 0:17:24.480 it's AI obviously to rank and recommend content to create 0:17:24.520 --> 0:17:25.400 new experiences. 0:17:25.520 --> 0:17:26.760 So they're really betting. 0:17:26.480 --> 0:17:29.000 On this is a key part of the company and 0:17:29.000 --> 0:17:30.280 a key part of their future. 0:17:32.200 --> 0:17:34.719 Bloombergsats accounts all across the Snap story. 0:17:34.880 --> 0:17:44.480 Thank you very much, time now for talking tech. 0:17:44.600 --> 0:17:48.400 First, up writing assistant software maker Grammarly is announced it's 0:17:48.440 --> 0:17:51.880 adding a new CFO and CTO bolstering the AI startups 0:17:51.920 --> 0:17:54.800 management now. According to Grammarly, both new executives actually assisted 0:17:54.800 --> 0:17:55.680 their previous. 0:17:55.320 --> 0:17:57.000 Companies in the igo process. 0:17:57.320 --> 0:18:01.240 Family is currently valued at thirteen billion dollars plus. Boeing 0:18:01.320 --> 0:18:03.800 when it bumps up its pay proposal to striking workers 0:18:03.800 --> 0:18:06.040 to thirty percent now that's sweetened from the twenty five 0:18:06.080 --> 0:18:09.080 percent rejected earlier this month, still less than the forty 0:18:09.119 --> 0:18:11.920 percent sought by the workers' union. Boeing said the terms 0:18:11.920 --> 0:18:14.240 of the pay proposal are final and valid till the 0:18:14.280 --> 0:18:16.960 end of the day of September the twenty seventh, and 0:18:17.119 --> 0:18:20.880 TikTok will be shuttering its music service in November, ending 0:18:20.880 --> 0:18:23.480 an experiment to compete with Spotify and Apple that started 0:18:23.680 --> 0:18:27.240 back in twenty nineteen in a statement released TikTok Music 0:18:27.320 --> 0:18:29.840 will be shutting down on November the twenty eighth, and 0:18:29.880 --> 0:18:31.680 customer data will be deleted. 0:18:32.040 --> 0:18:33.240 And what have you got? 0:18:33.720 --> 0:18:37.159 Another news story, Elon Musk and his social platform X 0:18:37.320 --> 0:18:41.040 lost a legal fight over unpaid severance to a former 0:18:41.320 --> 0:18:44.359 Twitter employee who was laid off when Musk took over 0:18:44.640 --> 0:18:47.679 in twenty twenty two. Now remember back in July, X 0:18:47.720 --> 0:18:51.119 defeated a lawsuit alleging that at least five hundred million 0:18:51.160 --> 0:18:54.480 dollars in severance pay was owed to about six thousand 0:18:54.560 --> 0:18:58.040 laid off employees. Let's discuss with Bloomberg's multi Nayak In 0:18:58.920 --> 0:19:02.280 long story short about two thousand employees said that they 0:19:02.280 --> 0:19:05.119 were short changed when they were let go. We spoke 0:19:05.160 --> 0:19:07.360 to some of them, like over the last couple of years. 0:19:07.600 --> 0:19:09.560 What are the specifics of this case. 0:19:10.840 --> 0:19:14.560 So this is happening separate from the court proceeding, in 0:19:14.600 --> 0:19:18.439 that this is happening in arbitration behind closed doors. So 0:19:18.480 --> 0:19:21.680 this was a private arbitration proceeding. And as you said, 0:19:21.720 --> 0:19:25.159 there are more than two thousand employees who have brought 0:19:25.160 --> 0:19:29.000 complaints against the company, but they have proceeded in arbitration 0:19:29.280 --> 0:19:34.240 and are fighting against the company. So now we received 0:19:34.240 --> 0:19:36.719 actually last week, the first ruling in one of these 0:19:36.800 --> 0:19:40.760 arputuation proceedings and looks like it was a win for 0:19:40.840 --> 0:19:45.040 the worker. And there are you know, thousands more of 0:19:45.119 --> 0:19:49.600 these complaints that will still be arbituated. But fifteen cases 0:19:49.680 --> 0:19:52.440 we know so far have been arbituated, and we're waiting 0:19:52.440 --> 0:19:54.480 for rulings in other cases as well. 0:19:55.440 --> 0:20:00.480 How seismic is this one off ruling? Will it forceultimately 0:20:01.080 --> 0:20:04.480 for X to settle in a broader number? 0:20:05.640 --> 0:20:08.119 Of course, it definitely is a good sign for the 0:20:08.240 --> 0:20:11.800 employees because you know, one win could lead to more wins, 0:20:12.200 --> 0:20:16.000 and that potentially allows their attorneys to you know, sit 0:20:16.040 --> 0:20:19.320 across the table with Twitter and Mask and say, hey, listen, 0:20:19.400 --> 0:20:22.160 we're winning all these cases. Maybe it's just easier if 0:20:22.160 --> 0:20:25.000 we just settle this and you know, get done with 0:20:25.080 --> 0:20:28.399 this dispute once and for all. So it's definitely a 0:20:28.440 --> 0:20:31.280 good positive sign. And you know, this is the first 0:20:31.280 --> 0:20:34.400 of many cases. And now that you know we are 0:20:34.440 --> 0:20:37.479 seeing the first ruling being a positive one, it is 0:20:37.520 --> 0:20:39.760 possible that this sort of trend will continue for the 0:20:39.800 --> 0:20:42.040 other arbituation proceedings as well. 0:20:43.040 --> 0:20:45.160 Multi if it's the first of many, would you take 0:20:45.240 --> 0:20:50.159 us into the sort of mystery world of technology severance disputes. 0:20:51.320 --> 0:20:53.960 There are many people interested in this, right the lawyers 0:20:53.960 --> 0:20:57.840 are incentivized to get their clients some pay. You know, 0:20:58.119 --> 0:21:00.439 I remember the early days. It must take over in 0:21:00.520 --> 0:21:03.719 just the chaos in some of the chat forums of 0:21:03.720 --> 0:21:04.440 what was happening. 0:21:04.600 --> 0:21:07.200 What's it like covering these Well. 0:21:07.200 --> 0:21:11.199