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Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York.
Speaker 3: I'm Caroline Hyde and I'm Jackie Devalas in San Francisco.
Speaker 3: This is Bloomberg Technology coming up.
Speaker 4: Ali Baba sches saw after AI demand and e commerce rebound,
Speaker 4: they drive revenues for the Chinese giant. Plus US Treasury
Speaker 4: Secretary Scott Bessant weighs in on AI productivity and his
Speaker 4: relationship with Elon Musk and the CEO of Carlvana joins
Speaker 4: as the stock sinks on lower gross profit per vehicle
Speaker 4: and it's the Chinese names that do you want Once
Speaker 4: again today Ali Baba absolutely soaring at one point up
Speaker 4: more than thirteen percent. Were up nine percent at the
Speaker 4: moment on the ADRs, the American Depository receipts really AI
Speaker 4: demand cloud seeing growth of thirteen percent, seeing e commerce
Speaker 4: come back as they charge more fees. Overall, we want
Speaker 4: to dig into it with Yuchunsen who joins us for
Speaker 4: more and look, this seems to be Ali Baba coming
Speaker 4: out of the doldrums of the past years and the
Speaker 4: regulatory pushback.
Speaker 5: Yes, right, exactly.
Speaker 6: So today is the big earning day for Ali Baba,
Speaker 6: and I would say it delivered very strong and solid earnings.
Speaker 6: I'll come if you look like it feeds on the
Speaker 6: revenues right from the top line. Reported a revenue growth
Speaker 6: which is the fastest it was in a year, and
Speaker 6: it's we're above the world's free analyst estimates. And it
Speaker 6: also comes from the improvements from two of its most
Speaker 6: important segments. One is e commerce and the second is
Speaker 6: the cloud business. So to drill down a bit that
Speaker 6: the e commerce apparently is the bread and butter and
Speaker 6: helped by the overall recovery of the Chinese consumption trend,
Speaker 6: but also the AI.
Speaker 5: The cloud business is.
Speaker 6: Really the highlight here because apparently lots of the market
Speaker 6: sentiment or interests have been going into how Alibab are
Speaker 6: going to deliver right on its AI strategy, and the
Speaker 6: cloud is where it's see where it houses the EAI
Speaker 6: features Q one and different initiatives it has, so there
Speaker 6: you know, Ali Baba's cloud service also up was up
Speaker 6: like thirteen percent on a.
Speaker 5: Year over year basis.
Speaker 6: Again, it's really impressive ernest print, and the investors was
Speaker 6: sharing all across the board on the financial print.
Speaker 3: What do we know about how much the company expects
Speaker 3: to invest in cloud and in artificial intelligence to really
Speaker 3: keep this boost going.
Speaker 6: Yeah, that's a really good question and it's a question
Speaker 6: that all analysts was asking right on Ernie's call. So
Speaker 6: the CEO ed e Wu stated that he's going to
Speaker 6: putting more money in AI infrastructure in the next three
Speaker 6: years and will be more than it did over the
Speaker 6: past decades.
Speaker 5: So that's a really big commitment.
Speaker 6: The company keeps saying that a AGI, which is artificial
Speaker 6: general intelligence, is going to be the primary objective for
Speaker 6: the company going forward.
Speaker 5: So that's a.
Speaker 6: Strong boost, you know, to the sentiment because if we
Speaker 6: take a look back only about stock today of ten percent,
Speaker 6: but year today is of more than sixty percent, and
Speaker 6: it's mostly driven by the AI hope that the market
Speaker 6: is giving the company. Right following on the right of
Speaker 6: Deep Sea. So now this is a moment that is
Speaker 6: shown that the fundamentals is back in it. And then
Speaker 6: on the earnest outlooker social that sentiment.
Speaker 4: Chi and Chen and all things Talibaba and the Chinese
Speaker 4: stock rally let's talk about how the flip side is affected.
Speaker 4: It calls the Deep Seek impact on AI investments here
Speaker 4: in the US as well. Auca Kolf's with us, but
Speaker 4: Photio manager at Alga. And what's really interesting is you
Speaker 4: video is a key name, Microsoft is a key name.
Speaker 4: All of these refocuses and recalibrations of AI investment whether
Speaker 4: it's worthwhile, has anything changed for you?
Speaker 7: Absolutely not.
Speaker 8: If anything, the amount of investment that's going to go
Speaker 8: into the ground is going to accelerate, and in part
Speaker 8: because what deep Seek showed us is that, you know,
Speaker 8: you can start building these models and it doesn't cost
Speaker 8: that much as long as you have a foundational model
Speaker 8: to build upon, and therefore adoption rate should skyrocket. You know,
Speaker 8: you saw just yesterday, you know, or just this morning
Speaker 8: Nebuus reported that there the usage of their data centers
Speaker 8: actually he's skyrocketed post Deep Seek.
Speaker 7: So clearly there is.
Speaker 8: More demand for something that is cheaper when it's increasing productivity.
Speaker 5: Anker.
Speaker 3: We're also seeing signaling from Washington that lawmakers JD. Van's
Speaker 3: President Trump really trying to support AI infrastructure, and as
Speaker 3: it relates to tariffs, because chips are now kind of
Speaker 3: within that discussion.
Speaker 2: You know, it's.
Speaker 3: Intended to encourage domestic production, but that manufacturing is incredibly complex,
Speaker 3: and you, as a portfolio manager, I'm curious if you
Speaker 3: find that assumption risky. Could that backfire in a way
Speaker 3: that does lead to higher prices ultimately for the companies
Speaker 3: and for consumers.
Speaker 8: Yeah, So the thing is on if you look at
Speaker 8: the cost of a chip relative to the cost of
Speaker 8: the product, it's in fact a very small percentage of
Speaker 8: the product. So if you look at Nvidia's gross margins,
Speaker 8: you know, the cogs or what is going to TSMC
Speaker 8: is only you know, ten percent of the revenue. If
Speaker 8: that so, if you take a twenty five percent tariff
Speaker 8: on the chips, you're only increasing the price by you know,
Speaker 8: two and a half percent because the the fundamental like
Speaker 8: cogs are a lot lower than people think. So is
Speaker 8: it very risky to tariff chips. I don't think it
Speaker 8: is in terms of the inflationary effect. I do think that,
Speaker 8: you know, the impact is we really do need to
Speaker 8: bring more manufacturing on shore. That is non negotiable, and
Speaker 8: just for our national security, that's what we need to do.
Speaker 4: I love that you bring us that breakdown of really
Speaker 4: what it means from a price perspective with Chip Harris,
Speaker 4: but bring us there for your expertise, And what do
Speaker 4: you think TSMC is going to start manufacturing more here
Speaker 4: in the US? Like there's been ongoing reporting around whether
Speaker 4: they do a deal with Intel, many saying that's not
Speaker 4: going to happen if you've got to push back against
Speaker 4: foreign ownership of companies alone foreign relationships here in the US.
Speaker 8: So a little known fact, perhaps is that Morris Chang,
Speaker 8: who is the founder of TSMC, is in fact an
Speaker 8: American citizen. Right, So TSMC is a Taiwanese company that
Speaker 8: was born of an American citizen who moved to Taiwan
Speaker 8: after studying in the US and working here for a
Speaker 8: long time. So I would argue, in fact that it
Speaker 8: might be kind of an American slash Taiwanese company.
Speaker 7: So the little known fact I wanted to bring up.
Speaker 8: But you know, I do think that the Intel Taiwan
Speaker 8: semi tie up is a necessity, and in part because
Speaker 8: where Intel is today is not a function of this
Speaker 8: management team or the previous management team. It is a
Speaker 8: function of some strategic kind of errors that were made
Speaker 8: fifteen years ago that have carried on to the life
Speaker 8: cycle of Intel and catching up to where TSMC is is.
Speaker 8: Would I would call a low probability event, And so
Speaker 8: you know, for our national security, I do think we
Speaker 8: have a footprint of fabs in the US.
Speaker 7: Those are Intel fabs.
Speaker 8: Should they not be somehow handed to TSM that actually
Speaker 8: knows how to manufacture it.
Speaker 7: It solves a lot of problems.
Speaker 8: It solves the capital intensity that TSM has to put
Speaker 8: into the ground in the US, which is a big
Speaker 8: hurdle for them. It solves a national security problem of
Speaker 8: bringing more capacity to the US. It solves Intel's problem
Speaker 8: of not quite knowing what to do because they're struggling
Speaker 8: to catch up. So to me, it feels like a
Speaker 8: really win win situation for TSM to actually take ownership
Speaker 8: of the of the Intel fabs.
Speaker 4: I mean, these all reports, but would you be buying
Speaker 4: in on these reports or these potential win win scenarios.
Speaker 8: Look, I think there can be many flavors that it
Speaker 8: has to suit all parties.
Speaker 7: Do I think there's some version of this.
Speaker 8: I think it's logical for it to happen, and therefore, yes,
Speaker 8: it is really the only solution that we have.
Speaker 3: How do you feel about the ecosystem of chip makers.
Speaker 3: TSMC is a great example of perhaps these plans to
Speaker 3: bring more plans to the US solves one problem bringing
Speaker 3: domestic production here in the US, but at the same
Speaker 3: time it also increases that concentration in one player.
Speaker 2: How do you feel about that?
Speaker 8: So I would be focused more so on the fact
Speaker 8: that if you bring it to the US, the ecosystem
Speaker 8: in the US actually gets stronger. One of the biggest
Speaker 8: problems right now is we don't have the engineers, We
Speaker 8: don't necessarily have the supply chain. Therefore it costs too
Speaker 8: much as people bring manufacturing into the US. And the
Speaker 8: first step in this is that we can allow TSM
Speaker 8: to build a sizeable footprint. Intel is about twelve percent
Speaker 8: of the world's manufacturing capacity. Why not utilize that footprint
Speaker 8: to build the US engineering ecosystem which has slowly deteriorated
Speaker 8: over the last three decades.
Speaker 3: Speaking about talent, that's kind of one of the biggest questions.
Speaker 3: Do we have a pipeline of researchers both kind of
Speaker 3: on the manufacturing side as for the software. Are you
Speaker 3: concerned at all about where we are in that landscape
Speaker 3: compared to China?
Speaker 8: Yeah, Look, I think that China is very innovative, but
Speaker 8: so are we. And over the last I would say,
Speaker 8: you know, two decades we have seen a dearth of
Speaker 8: talent graduating in the more tech fields that are not software,
Speaker 8: and we have to we have to write that ship.
Speaker 8: You know, I graduated in material science and engineering, you know,
Speaker 8: two decades ago, and you know we need to kind
Speaker 8: of start that engine again because really we.
Speaker 7: Do need to build that in the US. So do
Speaker 7: I worry about it.
Speaker 8: I think it's an effort that needs to be pushed on.
Speaker 3: That's Anchor Crawford, portfolio manager at Alder.
Speaker 7: Thanks so much.
Speaker 9: Can you just describe what it's like to work with
Speaker 9: someone like Elon Musk, someone as successful in American business?
Speaker 9: Just what's that like day to day?
Speaker 10: Yeah, Look, Elon Musk, like Stan Druckenmoer, like I always
Speaker 10: compare the great.
Speaker 11: Businesspeople to great athletes.
Speaker 10: They keep their eye on the prize, whether that whether
Speaker 10: he's the Messy or Michael the Messy or Michael Jordan.
Speaker 10: He is focused and his energy level is unbelievable and
Speaker 10: he's gotten to where he has because everything's on the table.
Speaker 10: There's always this examination of why are we doing it?
Speaker 10: This way, why are we doing what we're doing? And
Speaker 10: most of all, if something's not working, let's fix it.
Speaker 8: You know, Sam Oltman was on Bloomberg TV just two
Speaker 8: weeks ago and called Elon Musk insecure.
Speaker 5: Do you view him as much?
Speaker 10: I'm not going to get into the technic magnet the.
Speaker 9: Kind of slap best secondly best, and I would say
Speaker 9: that's wise. He is drawing criticism, though, when you and
Speaker 9: the administration come out and pick out the various things
Speaker 9: where money is being wasted on, I think we can
Speaker 9: all agree that that's a waste of money. Well, there
Speaker 9: might be some concern is the way that some people
Speaker 9: are being laid off in Washington that lacks some dignity?
Speaker 9: Could you comment on that today?
Speaker 10: Look, I think that there are many fine public servants,
Speaker 10: but I think that you know, I've been in Washington
Speaker 10: three or four weeks now, and there's a real bias
Speaker 10: towards the status quo. And if you don't move quickly,
Speaker 10: then then the lobbyists get involved, the entrenched interest, and
Speaker 10: it's impossible to get anything done. So, you know, anyone
Speaker 10: who has experienced in financial hardship, any kind of the
Speaker 10: mental duress, you know, I'm sorry for them, but that's
Speaker 10: also what the average American experiences every day most of us.
Speaker 10: You know, you all come to work, you want good ratings,
Speaker 10: you know you get a performance readout. You really push forward.
Speaker 10: And I can tell you that in Treasury, I have
Speaker 10: been so impressed with the quality of the permanent staff
Speaker 10: and I want to get everybody back to the office
Speaker 10: and a lot of people are on board with that.
Speaker 4: US Treasury Secretary Scott Besson Bloomgs avelience earlier today. I
Speaker 4: speak it all down in Bloomgs Mike Shepard in Washington. Now,
Speaker 4: one are the key takeaways. It was a wide ranging conversation,
Speaker 4: well it.
Speaker 12: Really was, but the most segment of that conversation, in
Speaker 12: a way, was quite illuminating. We really saw once again,
Speaker 12: as in our first interview with the Treasury Secretary about
Speaker 12: two weeks ago, no day life between Scott Besson and
Speaker 12: Elon Musk. Musk, of course, has been tasked with this
Speaker 12: government efficiency push. Donald Trump asked him to lead this.
Speaker 12: It has caused some controversy for the way they have
Speaker 12: powered through agency by agency, moving to even shut down
Speaker 12: some entities like USAID altogether. And it is generating. As
Speaker 12: we saw this morning, some negative poll numbers in the
Speaker 12: Washington Post and IPSO survey a majority of Americans were
Speaker 12: uncomfortable with how this was working in terms of agencies
Speaker 12: being shut down like that. At the same time, we
Speaker 12: saw Scott Besson really lavishing praise on Elon Musk, likening
Speaker 12: him to a great athlete for the focus and energy
Speaker 12: that he brings and the urgency of this moment that
Speaker 12: if they want to make change, they have to move quickly.
Speaker 12: And Carol, it's important for us to remember that Scott
Speaker 12: Besson's own agenda of reducing the deficit depends in large
Speaker 12: measure on the success of Elon Musk with Doge in
Speaker 12: trying to find those kinds of savings and cost rod
Speaker 12: reductions across government. And he also wants Elon Musk to
Speaker 12: help in other ways too, and that includes pairing back
Speaker 12: some of the regulations that he sees as an impediment
Speaker 12: to the economy.
Speaker 3: Mike, what did Besson say about where these Doze savings
Speaker 3: will actually go.
Speaker 12: Well, you know, he and the President have talked about
Speaker 12: trying to get them somehow returned to the taxpayers, but
Speaker 12: so far the math really isn't holding up. We had
Speaker 12: great reporting from our colleague Andre Tartar yesterday showing that
Speaker 12: while Doze has claimed fifty five billion dollars in savings
Speaker 12: so far, the numbers on the group's website itself show
Speaker 12: something closer to sixteen billion. And you have to have
Speaker 12: that yet again because one of the contracts was mistakenly
Speaker 12: listed as eight billion rather than eight million. So when
Speaker 12: you break that down, it's about eleven dollars per taxpayer
Speaker 12: as opposed to the five thousand per head that Donald
Speaker 12: Trump and Elon Musk have possibly been floating.
Speaker 11: So we have to see.
Speaker 12: They're only a month in, as the Treasury Chief was
Speaker 12: keen to point out, but we have a long way
Speaker 12: to go before we're actually going to start seeing some
Speaker 12: of this money go back to the taxpayers.
Speaker 5: Both the Treasury Chief and.
Speaker 4: Must have said Mike, many have wondered when the math
Speaker 4: is going to start mathing on AAI investment and productivity gains.
Speaker 4: In fact, Scott Bessen didn't weigh in on that.
Speaker 10: Just take a listen the US productivity. I think that
Speaker 10: I've been meeting with a lot of the tech leaders lately,
Speaker 10: and I think we are very close to the cusp
Speaker 10: of this AI finally coming into the productivity numbers.
Speaker 2: Thirty seconds left.
Speaker 4: What did you make of the view on AI helping
Speaker 4: productivity in the US?
Speaker 12: Caro, He is trying to answer one of the big
Speaker 12: questions out there for investors and even companies themselves, when
Speaker 12: are we going to see this breakthrough in terms of
Speaker 12: a profit generating real game changing use case for it.
Speaker 12: He is signaling though, that there could be some productivity gains.
Speaker 12: We have seen evidence of this already at Meta, for instance,
Speaker 12: the way they've incorporated into their own business structure of
Speaker 12: finding efficiency, finding gains helping profitability there. But he did
Speaker 12: not elaborate, and it would be interesting to hear him
Speaker 12: lay out more of a case down the road.
Speaker 3: That's Bloomberg's Mike Shephard, thanks for joining us. It's not
Speaker 3: just Scott Wesson talking about Musk. The CEO of Boeing
Speaker 3: came out this morning saying Elon Musk and his Dosee
Speaker 3: team are helping the Planemaker work through bottlenecks that have
Speaker 3: caused the next fleet of Air Force one jets to
Speaker 3: fall years behind schedule. This comes as President Donald Trump
Speaker 3: has repeatedly criticized the company for failing to deliver the
Speaker 3: jets on time, Caroline coming.
Speaker 2: Up, Jackie.
Speaker 4: Apple launches and you know end smallphone. We'll dig in next.
Speaker 4: This is Britmbag Technology.
Speaker 3: Apple introduce a new low and smartphone yesterday, the iPhone
Speaker 3: sixteen E, which will go on sale next week February
Speaker 3: twenty eighth. This in an effort to revive the company's
Speaker 3: growth after a slow holiday season. Let's bring in Nabila
Speaker 3: Pope All, senior research director at the International Data Corporation
Speaker 3: also known as the IDC. Nabila, this is a great upgrade,
Speaker 3: but it's also far pricier and lower price models from
Speaker 3: the past. How well are you expecting this to sell?
Speaker 11: You know?
Speaker 13: I think that that's a really great reason why Apple
Speaker 13: rebranded it from the SE to the sixteen E, right
Speaker 13: because they don't want it. They don't want consumers to
Speaker 13: think this is a more expensive SE device because the
Speaker 13: previous sees have were at four twenty nine and prior
Speaker 13: to that at three ninety nine, and this is at
Speaker 13: you know, significantly more expensive, but they wanted to think
Speaker 13: of it consumers to think of it as a much
Speaker 13: less expensive sixteen device. So we think that given all
Speaker 13: the bells and whistles this is coming with makes us
Speaker 13: a significant upgrade from all the different you know specs.
Speaker 13: This is coming with which much much greater their latest
Speaker 13: chip set, bigger screen size and all the different you know,
Speaker 13: the uh and more. They're you know, the biggest, they're
Speaker 13: you know, the most innovative modem. Like I think that's
Speaker 13: the biggest news right now. So I think that's what
Speaker 13: they want the consumers to focus on. So we really
Speaker 13: expect you know, traditionally or rather they're in their previous
Speaker 13: se devices right of their budget phones, they have been
Speaker 13: doing about anywhere from five to eight percent in their launcher,
Speaker 13: and we expect this device to do. Actually, this is
Speaker 13: going to be the bigger news, you know than the
Speaker 13: in fact even the launch of the sixteen device. And
Speaker 13: it comes with Apple Intelligence to top it off. So
Speaker 13: for a budget device, we expected to do really well.
Speaker 4: Nebula talk about that C one chipset and the fact
Speaker 4: that they're moving away from Qualcom. How important a road
Speaker 4: test is this for the seventeens.
Speaker 13: And I think that this is you know, I think
Speaker 13: this is what the biggest news is.
Speaker 14: Right.
Speaker 13: They didn't want to, I guess test drive it with
Speaker 13: their their sixteen models, right, And I think they finally launched.
Speaker 13: It is they've been trying to get into this space
Speaker 13: with word integration and launching their own modem, and and
Speaker 13: this will also play really well into the so the
Speaker 13: investors write more profitability, but also give them more room
Speaker 13: to play with the design, play with whether it's you know,
Speaker 13: they use it as a as a test play to
Speaker 13: see how much more they can make the device more efficient,
Speaker 13: how they can play with the design and what they
Speaker 13: can do is essentially whether they you know, how they
Speaker 13: what lessons do they learn right to bring it into play,
Speaker 13: whether it's in terms of efficiency and design or really
Speaker 13: bring the motem into the seventeen. So I think that's
Speaker 13: it's a really good test ground for them. And at
Speaker 13: the same time, right, the sixteen users who are or
Speaker 13: rather the sixteen uh not e right, but the the
Speaker 13: pro and the the users are paying double the price
Speaker 13: for the rest of the family won't feel kind of
Speaker 13: cheated because they're paying double the price. But at the
Speaker 13: same time, you know, they're getting the Qualcom chip. So
Speaker 13: I think it's a really genius marketing move. At the
Speaker 13: same time, the se users will get a phenomenal upgrade
Speaker 13: and they won't feel that we're paying two hundred dollars
Speaker 13: more for you know, they're getting all of these fascinating upgrades,
Speaker 13: not just the modem but the latest chip and you know,
Speaker 13: bigger screen size and rival list of upgrades.
Speaker 2: And Apple intelligence.
Speaker 4: Nabila popole I see senior research director joining us and
Speaker 4: interestingly reports that Apples Tim Cook is actually going to
Speaker 4: be meeting with Trump and the Oval Office.
Speaker 2: Plenty of for him to discuss.
Speaker 4: When it comes to China where they probably want that
Speaker 4: sixteen E to be selling. Well, welcome back to lu
Speaker 4: Meg Technology and Caline Hide in New York.
Speaker 3: And I'm Jackie Devalas in San Francisco.
Speaker 4: Got more than five percent after that twenty day rally,
Speaker 4: that record rally that saw shares go into record territory.
Speaker 4: Come and Ranicky is with us to talk us through
Speaker 4: what that twenty day rally means. Yes, we pull back
Speaker 4: a bit, but ultimately this has driven the stock to
Speaker 4: numbers that we've never seen since it's well first listing
Speaker 4: and we're questioning whether they need to get a little cheaper.
Speaker 14: Yeah, exactly. So we've been watching Meta for a while.
Speaker 14: Obviously it's had an incredible run over the last few years,
Speaker 14: and this twenty day rally was just amazing to watch.
Speaker 14: Metas never split its stock before, so since twenty thirteen,
Speaker 14: it's just you know, been going up and so it
Speaker 14: really the level that it's hit now it's more than
Speaker 14: seven hundred dollars per share, kind of puts it in
Speaker 14: the sweet spot for a stock split, and actually the
Speaker 14: pullback that we're seeing today makes me think that it
Speaker 14: could make even more sense. Companies often enact stock splits
Speaker 14: when their price per share gets very high, lowering it.
Speaker 14: So splitting the stock doesn't change anything about the fundamentals
Speaker 14: it's purning is then exactly, but that lower price per
Speaker 14: share can be really enticing for investors, especially the retail crowd,
Speaker 14: and you know that is a major part of the
Speaker 14: market force that we've seen lift a lot of these
Speaker 14: technology stocks. So it would be very interesting to see
Speaker 14: if Meta does it. It's the only mag seven stock
Speaker 14: that hasn't split its shares, so we'll be keeping an
Speaker 14: eye on that.
Speaker 7: Carmen.
Speaker 3: On that note about retail investors, on the one hand,
Speaker 3: it's great to bring them into the fold, but does
Speaker 3: that inject more volatility into the stock as well?
Speaker 2: How's it?
Speaker 7: How has it worked out?
Speaker 3: For other tech stocks that have done similar splits in
Speaker 3: the past, you.
Speaker 14: Know, I think the biggest one that comes to mind
Speaker 14: is in Vidia, and Vidia obviously enacted as split last year,
Speaker 14: and it has had an incredibly volatile you know about
Speaker 14: you know, year years, few years. The stock at one
Speaker 14: point was you know, more volatile than bitcoin. So certainly, yes,
Speaker 14: there could be volatility that comes in to play. But
Speaker 14: I also think that you know, these stocks are very volatile.
Speaker 14: They are m big parts of the market. So when
Speaker 14: we see them swing, we can you know, see the
Speaker 14: entire SMP swing, we can see the Nasdaq one hundred swing,
Speaker 14: and I would think that most people would say, like,
Speaker 14: it's it's worth some volatility that helps you know, get better,
Speaker 14: better price action and opportunities for investors.
Speaker 4: It is all psychological, the idea that you could own
Speaker 4: a whole share, even though of course you can trade
Speaker 4: parts of shares as a retail investor. Well, they're not
Speaker 4: the only name that's eclipsed the one thousand old evolve
Speaker 4: for example, Netflix that there you must be questioning a
Speaker 4: still split there as well.
Speaker 14: Yeah, exactly, so Netflix is over one thousand dollars per share.
Speaker 14: It has split before I think it was in twenty
Speaker 14: fifteen and did a seven for one split. So that's
Speaker 14: another one where retail names could really be enticed back
Speaker 14: in and keep a rally going.
Speaker 3: That's Bloomberg's Carmen Ryanicky, thanks so much for joining us.
Speaker 3: Sticking with Meta and turning to politics. CEO Mark Zuckerberg
Speaker 3: went to the US Capitol yesterday to lobby senators on
Speaker 3: artificial intelligence. He's seeking to muster his influence and is
Speaker 3: standing with Donald Trump at his inauguration. Bloomberg's Emily Bernbaum
Speaker 3: joins us for more. Emily, is this working? Is this
Speaker 3: closer relationship to Trump actually increasing?
Speaker 5: You want?
Speaker 3: Sorry, Zuckerberg's relationships to Republicans on Capitol Hill.
Speaker 15: I think there's evidence that it is working. So we've
Speaker 15: heard four years Zuckerberg is enemy number one to Republicans.
Speaker 15: You know, he was an ally to the Democrats, That's
Speaker 15: what they said. And now it's a totally different tune
Speaker 15: on Capitol Hill after Zuckerberg has made extensive overtures to
Speaker 15: Trump and to Republicans. So Ted Cruz, the head of
Speaker 15: the seven Senate Commerce Committee, says trust.
Speaker 7: But verify about Zuckerberg.
Speaker 15: Jim Jordan is sounding a different tune over in the House.
Speaker 15: So these were once, you know, the people who attacked him.
Speaker 15: So I think there's still skepticism. There's still a desire
Speaker 15: to hit big tech from Republicans because they have seen
Speaker 15: that this is something that their base really reacts to.
Speaker 15: But in terms of Zuckerberg himself, I think that his
Speaker 15: reputation is changing really fast among conservatives in Washington.
Speaker 2: So what can he get done? What is policy priorities?
Speaker 15: Policy priority number one is AI trying to stave off
Speaker 15: any regulation that could hamper the company, trying to get
Speaker 15: any policy that could boost open source, which is a
Speaker 15: big lobbying campaign they've launched over the last year. You know,
Speaker 15: AI development is top of mind for Meta. They are
Speaker 15: going to invest sixty five billion dollars in it this year.
Speaker 15: And then there is also this ongoing fight with the
Speaker 15: EU where they've found allies in the Trump administration. EU
Speaker 15: passed a regulation that would crack down on the tech
Speaker 15: companies for hosting misinformation, for hosting certain kinds of harmful speech.
Speaker 5: This is a big threat to Meta and to.
Speaker 15: The other social media platforms, and it's one that jd
Speaker 15: Vance this past week has taken up Trump himself has
Speaker 15: taken up, you know, criticizing the EU for hurting American companies.
Speaker 5: So those are you know, top of mind.
Speaker 15: There's also antitrust issues, you know, ongoing case against Meta
Speaker 15: by the government.
Speaker 7: What will the FTC do with it?
Speaker 5: All of that is.
Speaker 15: Still pending, but there are existential issues facing Meta that
Speaker 15: the government can help with, and Zuckerberg is doing everything
Speaker 15: he can to try to protect his company.
Speaker 3: Let's talk about that overall lobbying strategy. How else is
Speaker 3: it changing during this congressional session.
Speaker 15: Yeah, So, over the last four years, during the Biden administration,
Speaker 15: Meta's policy team was led by Nick Clegg. He was
Speaker 15: seen as being slightly closer to Democrats. They cultivated relationships
Speaker 15: with Democrats. But there was a recent announcement that Joel Kaplan,
Speaker 15: the big Republican at Meta. Now they layered him on
Speaker 15: top of Nick Klegg. And so he is the head
Speaker 15: of global policy for Meta, and he has taken the
Speaker 15: reins a lot within the company. He's made decisions about
Speaker 15: ending DEI, He's made decisions about ending fact checking, you know,
Speaker 15: two really big asks for Republicans. So Joel Kaplan and
Speaker 15: his influence can definitely be felt in Meta's lobbying strategy
Speaker 15: and how they are approaching Republicans.
Speaker 4: Always great to catch up with them. Many van bound
Speaker 4: the latest in Washington. We appreciate it.
Speaker 2: Time now for talking tech.
Speaker 4: First up, KKR has secured enough shares of fuji Soft
Speaker 4: in a tender offer to take the company private, and
Speaker 4: the deal value fuji Soft at four point four billion
Speaker 4: dollars and ends a month long bidding war against Bain Capital.
Speaker 4: Now KKR aims to acquire the remaining shares of the
Speaker 4: software maker through a squeeze out process in late April,
Speaker 4: giving it a near fifty eight percent steak. Plus Lenovo
Speaker 4: revenues get an AI boost. The company posted a faster
Speaker 4: than anticipated twenty percent jumping quarterly revenue. It's all due
Speaker 4: to demand for its AI computing infrastructure. The world's largest
Speaker 4: PC maker posted sales and nearly eighteen point eight billion dollars,
Speaker 4: then also beat estimates and shares of Grab now they
Speaker 4: are falling today after the company predicted full year revenue
Speaker 4: that actually trailed estimates, citing caution in Southeast Asian ride
Speaker 4: sharing and food delivery market in particular, whom works both
Speaker 4: with Grab CFO Peter Ui, who had this to say,
Speaker 4: about their userbase.
Speaker 16: It's a big year for digital banks, and it's really
Speaker 16: very ecosystem driven play when it comes to our products.
Speaker 16: Of one of our digital banks, how of those uses on
Speaker 16: the digital bank platform today are from GRAB and we
Speaker 16: see a lot of benefits that we're seeing in making
Speaker 16: sure that the on demand pieces and the digital banks
Speaker 16: are actually cohesive, putting together because it really drives that
Speaker 16: retention and also just the LTV of a user base.
Speaker 3: Sticking with earnings, Carvana out with its report overnight and
Speaker 3: while the company had a strong fourth quarter and a
Speaker 3: rosy outlook, shares our down significantly.
Speaker 7: Today.
Speaker 3: Let's get some answers from CEO Ernie Garcia. Ernie, clearly,
Speaker 3: shares are reflecting some skepticism, and in particular, your gross
Speaker 3: profit per vehicle declined. What was behind that fall and
Speaker 3: do you expect it to rebound this year?
Speaker 11: Sure?
Speaker 17: Well, first of all, thanks for having us and to
Speaker 17: try to you briefly answer that question specifically. I think
Speaker 17: there's seasonality in retail GPU and we saw that a
Speaker 17: little bit this year, but I think there's a way
Speaker 17: bigger story going on that we're extremely proud of, and
Speaker 17: that's that we just had the most profitable year in
Speaker 17: automotive retail history, and we did it while growing at
Speaker 17: thirty three percent for the year, at fifty percent in
Speaker 17: the quarter, and we did it with just one percent
Speaker 17: market share. So I think the big story here is
Speaker 17: we've still got a huge opportunity. We still have a
Speaker 17: ton of work to do. The team's done a great job.
Speaker 17: We're extremely excited.
Speaker 11: Day to day.
Speaker 17: The market is going to do what the market does,
Speaker 17: and our job is to just keep marching.
Speaker 3: We're seeing some pullback in the retail sector and I'm
Speaker 3: curious if this bodes kind of any kind of weakness
Speaker 3: for Carvana. Where do you see used car prices going
Speaker 3: this year? Is there any vulnerability to you know, your
Speaker 3: consumers being more touchy around inflation?
Speaker 17: Yeah, I think I think the way that we try
Speaker 17: to think about things is a little bigger picture than that.
Speaker 18: You know.
Speaker 17: Again, I think the history of companies that are the
Speaker 17: most profitable in their industry and are growing the fastest
Speaker 17: is a pretty thin history, and when you look back
Speaker 17: on those companies, generally, the next you know, ten plus years,
Speaker 17: ten twenty years are our pretty great years. I think
Speaker 17: we're focused on that timeline. I think, you know, month
Speaker 17: to month, quarter to quarter, year to year. There's going
Speaker 17: to be inflation stories, there will be tariff stories, there
Speaker 17: will be ev stories, but we don't talk about those
Speaker 17: specific storylines about great companies when we look back in
Speaker 17: time and I think our goals would be a great company.
Speaker 17: And so we're going to say, focus on our customers
Speaker 17: and just keep moving down the path, and we think
Speaker 17: that's going to take us to a great spot, as
Speaker 17: it has over the last couple of years on average.
Speaker 4: I mean, I completely hear you on the market's going
Speaker 4: to do what the mark is going to do. It's
Speaker 4: off by sixteen percent though today, and that is a
Speaker 4: big fall. I know that you've run up more than
Speaker 4: three hundred percent in the previous year.
Speaker 2: So credit where credit's due.
Speaker 5: But we need to.
Speaker 4: Get into some of those issues that the investor base
Speaker 4: is seeing. And I really want to ask about perhaps
Speaker 4: some of the gains that you saw in the sales
Speaker 4: of loans. Perhaps people saying, look that padded your abit dar.
Speaker 4: Is that something that will continue to pad abit dar?
Speaker 4: Is it something that's a one off?
Speaker 17: I think it's something that's been a consistent contributor for
Speaker 17: the last couple of years. So I don't think we
Speaker 17: expect major changes there. I think since you brought up
Speaker 17: ibadad my to make sure I frame all this as
Speaker 17: positive as possible, we increase aribadad by four times a
Speaker 17: year over year, So I think that's pretty great. Another
Speaker 17: is another line that points in a very good direction. So,
Speaker 17: like I said, I think we got to focus on
Speaker 17: our customers. Give them a great experience that they love,
Speaker 17: give them a ton of selection, give them a great value.
Speaker 11: If we do that, the rest to take care of itself.
Speaker 4: I think your job is to give things not just
Speaker 4: a positive ring, but a truthful ring. And I'm sure
Speaker 4: that that's what's you're trying to do. But let's talk
Speaker 4: about it. Happened to over effect. You're a positive guy
Speaker 4: on and.
Speaker 2: We love it.
Speaker 4: But talk to us about some of the positive impacts
Speaker 4: or indeed negative impacts of taris. What does that mean
Speaker 4: for the secondhand market, What does it mean for autos
Speaker 4: more broadly, if it's gonna be tougher to get foreign cars.
Speaker 17: In So, I think that's incredibly complicated, and I think
Speaker 17: there's probably a lot of people that are better position
Speaker 17: to answer those questions than we are. So I unfortunately
Speaker 17: I'm going to give you a very unsatisfying answer that
Speaker 17: we will pay attention, we'll react to whatever happens. But again,
Speaker 17: I think what's going on inside of Carvana is you know,
Speaker 17: we grew it thirty three percent last year. That's so
Speaker 17: large compared to anything that can happen macro, and so
Speaker 17: we think it's smarter for us to say, focus on
Speaker 17: our customers and on what we do because it's just
Speaker 17: a bigger range than anything that's going to happen from
Speaker 17: a macro perspective.
Speaker 3: Ernie, you said your guidance is based on the environment
Speaker 3: remaining stable, but there's a lot of external factors that
Speaker 3: also come into play. Which ones are you paying attention to? Specifically?
Speaker 3: Given to Caroline's point, tariffs do play a role, inflation
Speaker 3: does play a role. What will you be focused on
Speaker 3: to make sure that guidance stays on track?
Speaker 11: Yeah, I think everything you just mentioned, I think that
Speaker 11: you know, we'll see.
Speaker 17: I think there's a lot of uncertainty about what happens
Speaker 17: with Harris, there's a lot of uncertainy about what happens
Speaker 17: with inflation. I think if you asked two people, you
Speaker 17: get three answers. I think there's a lot of uncertain
Speaker 17: about what's going to happen with rates. We're going to
Speaker 17: pay attention, we're going to adapt to our environment, and
Speaker 17: we're going to keep moving forward.
Speaker 11: So I think we watch all of that.
Speaker 17: Of course, investors watch that very closely as well, But
Speaker 17: we think that our job is mostly to look at
Speaker 17: our business, to put together a bunch of projects that
Speaker 17: we're very confident we'll create value for our customers over
Speaker 17: a long period of time, and to march through those
Speaker 17: projects one at a time, because, on average, the macro
Speaker 17: environment is the average, and if you spend a ton
Speaker 17: of energy chasing your tail on that, it's energy that
Speaker 17: could be put somewhere else that creates long term value.
Speaker 11: So we try to stay long term focused.
Speaker 3: Another parts of the car market, autonomous vehicles is kind.
Speaker 5: Of the next big thing.
Speaker 3: How are you thinking about how that might affect your
Speaker 3: business model? Are you looking to buy more of those
Speaker 3: types of cars wholes sale or how do you bring
Speaker 3: in that kind of business into the fold?
Speaker 11: Sure, well, so I think related concept ZVS.
Speaker 17: You know, we put out a report today that said
Speaker 17: that you have five point seven percent of our sales
Speaker 17: last year. We're evs that compares to one point three
Speaker 17: percent for the used market in total, so we're you know,
Speaker 17: four times more likely to sell and ev to our customers.
Speaker 11: We're believers in evs.
Speaker 17: We generally set up our system where it's a pull system,
Speaker 17: so we're buying the cars that our customers want. As
Speaker 17: autonomous vehicles start to become more available, we will certainly
Speaker 17: buy more of those and provide those to our customers.
Speaker 17: And in general, I think, you know, we're fans of
Speaker 17: any technology that pushes things forward. We think that as
Speaker 17: a one percent market shareholder, we will likely be beneficiaries
Speaker 17: of any change in the market, any shakeup we're very
Speaker 17: well positioned to take advantage of because our customers love
Speaker 17: our offering and it makes things a little easier for us.
Speaker 17: So we'll be rooting for evs, we'll be rooting for autonomy,
Speaker 17: and we'll be doing our best to.
Speaker 11: Get our customers a great experience along the way.
Speaker 4: It's great to have some time with you today. Thanks
Speaker 4: for coming on all the positivity to appreciate it. Hanney
Speaker 4: Garcia now coming up, the founder and CEO of together
Speaker 4: Ai joins us to discuss the startups latest funding round
Speaker 4: and the demand for open source models. There's a Lumote technology.
Speaker 5: Startup.
Speaker 3: Together Ai announced a three hundred and five million dollars
Speaker 3: Series B funding round. Together AI's platform gives developers access
Speaker 3: to multiple open source AI models and compute power, which
Speaker 3: the company says makes building AI applications faster and cheaper.
Speaker 3: It's CEO Hipple, they percash joins is now will help
Speaker 3: us understand why you think open source AI technology is
Speaker 3: the future.
Speaker 18: Thank you for having me here today. You know, we
Speaker 18: are seeing our customers are choosing open source models for
Speaker 18: a variety of reasons. In many cases, they are you know,
Speaker 18: really encoding their business logic into these models. Now they
Speaker 18: are part of their technology strategy, and companies want to
Speaker 18: control these models and controlled the intellectual property they are
Speaker 18: creating in the process. They also wanted to make it
Speaker 18: more cost efficient when they are deploying these models, you know,
Speaker 18: at scale to run serve you know, sometimes hundreds of millions.
Speaker 5: Of their customers.
Speaker 18: They really want cost efficiency. We have to create customers like
Speaker 18: Zoom and Salesforce and escape holecom that are really deploying
Speaker 18: these things that lack scale and are choosing to use
Speaker 18: open source models.
Speaker 4: We well, why are these customers that you mentioned going
Speaker 4: to you rather than Amazon, Bedrock or as your AI.
Speaker 5: Yeah.
Speaker 18: So Together does you know, we are AI systems research lab.
Speaker 18: Some of our co founders are luminaties in this field.
Speaker 18: And what we've been able to do is really, you know,
Speaker 18: do fundamental research on how to make these models work
Speaker 18: more efficiently in run time. This is really a new
Speaker 18: kind of computation. So we do a lot of work on,
Speaker 18: for example, how the linear algebraand these models executes inside
Speaker 18: GPU cores, or how to quantize models into you know,
Speaker 18: smaller models that run more efficiently at the same quality.
Speaker 18: So we do a lot of work here which really
Speaker 18: reflects in the economics and the scalability of our platform.
Speaker 18: And so it's faster and it's cheaper relatively using hyperscalers,
Speaker 18: and we are on the forefront of technology. So when
Speaker 18: new models come out in open source, they are on
Speaker 18: Together's platform on day one.
Speaker 3: Deep Seak is also available on the Together ai platform,
Speaker 3: but it's also raised some national security concerns, concerns about
Speaker 3: its overall security. How are you thinking about that and
Speaker 3: navigating having deep Seak on the platform.
Speaker 18: What we do is we own all our infrastructure, which
Speaker 18: is mostly based in North America and Europe, and all
Speaker 18: the models that we serve on our platform, they run
Speaker 18: on our you know, they run on a cloud platform,
Speaker 18: so there is no sort of data leakage to the
Speaker 18: maker of the model. And we're seeing, you know, a
Speaker 18: lot of demand for deep seek and other models for
Speaker 18: the reason of security and having sort of control that
Speaker 18: we provide through through our cloud.
Speaker 3: David Sachs, the ais ARE in Washington, is a big
Speaker 3: fan of open source models.
Speaker 2: Do you think that this could open.
Speaker 3: The door for perhaps a regulatory environment that favors open
Speaker 3: source more than closed You know.
Speaker 18: I think that would be welcome. You know, we do
Speaker 18: believe that this technology should be developed in the open transparently.
Speaker 18: You know, this is really a fundamental tool for humanity.
Speaker 18: So we we and you're seeing this that really happen
Speaker 18: all around the world. Now we have you know, Meta
Speaker 18: who is investing significantly in building open source models, their
Speaker 18: companies in China, their companies in Europe. So you know,
Speaker 18: we really think regulatory environment that promotes open source, that
Speaker 18: promotes open safety and open research is going to be
Speaker 18: great for the industry.
Speaker 2: Let's talk about the fundraise.
Speaker 4: The valuation is a lot more three point three billion
Speaker 4: dollars three hundred and five million is what you raised.
Speaker 2: Where do you put that to work?
Speaker 7: Right now?
Speaker 2: Hyopule?
Speaker 18: Yeah, you know what I would say, AI has really
Speaker 18: moved across, you know, from from the experimental phase into
Speaker 18: production phase. We have over four hundred thousand AI developers,
Speaker 18: air native companies, enterprises building applications on our platform. We
Speaker 18: will invest in as I mentioned, we are a researcher
Speaker 18: one company, so we will invest in our research programs.
Speaker 18: We also have a very wide product from you know,
Speaker 18: we serve models of all modalities language, images, videos, audio,
Speaker 18: and you know. Of course, we are also scaling up
Speaker 18: our infrastructure to meet the growing demand for the platform.
Speaker 2: Well, it's great to have time with you. Good book.
Speaker 4: Plcash, CEO of Together AI on the latest funding round.
Speaker 4: Now that does it for this edition of Bloomberg Technology.
Speaker 4: Do not forget to check out a podcast. Can find
Speaker 4: it on the terminal as well as online on Apple Spotify.
Speaker 4: An i heeart from New York from San Francisco, Miss
Speaker 4: Blomberg Technology