WEBVTT - Tesla Deliveries Increase and Apple Readies Low-End iPhone 0:00:01.440 --> 0:00:04.960 From the heart where innovation, money and power co lie 0:00:05.040 --> 0:00:09.760 in Silicon Valley, NBN. This is Bloomberg Technology with Caroline 0:00:09.800 --> 0:00:10.560 Hyde and Ed. 0:00:10.640 --> 0:00:27.760 Luvedlove live from New York and San Francisco. This is 0:00:27.760 --> 0:00:31.520 Bloomberg Technology coming up. Tesl posts its first increase in 0:00:31.600 --> 0:00:35.320 quarterly sales this year, but it disappoints investors. 0:00:35.640 --> 0:00:38.840 And Apple preparing to announce a new low end iPhone. 0:00:38.880 --> 0:00:41.279 We have the Bloomberg exclusive. 0:00:40.880 --> 0:00:42.200 US we talk to tech. Have you hitters? 0:00:42.280 --> 0:00:45.520 Later in the our CEO of Pinterest coming from its 0:00:45.600 --> 0:00:48.720 advertising event, Ed, Let's. 0:00:48.520 --> 0:00:50.080 Get strike to our top story. 0:00:50.159 --> 0:00:54.000 Tesla just posted its first increase in quarterly sales this year, 0:00:54.280 --> 0:00:57.960 but for the quarter, deliveries came in just below street estimates. 0:00:58.000 --> 0:01:01.520 Shares are down sharply to the company delivered four hundred 0:01:01.520 --> 0:01:04.440 and sixty two thousand, eight hundred and ninety ebs in 0:01:04.520 --> 0:01:07.400 the third quarter, just shy of the four hundred and 0:01:07.440 --> 0:01:10.760 sixty three thousand, eight hundred and ninety seven estimate. And 0:01:10.800 --> 0:01:13.839 this all ahead of course of next week's robotaxi event. 0:01:13.840 --> 0:01:17.880 Bloomberg's Global Auto's editor Craig Trudell joins us from London. 0:01:17.959 --> 0:01:18.960 Going into the data. 0:01:19.000 --> 0:01:24.039 It's interesting because three and y the volume products beat estimates, 0:01:24.280 --> 0:01:28.839 the other bucket which is XS and cyber truck missed estimates. 0:01:29.040 --> 0:01:29.840 What else do we know? 0:01:31.319 --> 0:01:33.240 Yeah, I think this is a case of, you know, 0:01:33.959 --> 0:01:36.680 a narrowbeat giveth and a narrowmiss take it away. This 0:01:36.760 --> 0:01:39.040 is a company that, you know, its shares are known 0:01:39.080 --> 0:01:42.240 to be quite volidle. Just a quarter ago, they just 0:01:42.400 --> 0:01:45.880 barely exceeded expectations and the stock went kind of crazy. 0:01:46.160 --> 0:01:48.880 I don't think we necessarily learn a ton from these numbers. 0:01:48.920 --> 0:01:52.640 I think, you know, we do generally see a nice 0:01:52.680 --> 0:01:56.640 upward trend, both sequentially and year over year. Having said that, 0:01:56.680 --> 0:01:58.400 if you kind of you know, pan out a little 0:01:58.400 --> 0:02:00.920 bit and look at the trend, you know, going a 0:02:00.920 --> 0:02:03.160 little further back, we really just see a sort of 0:02:03.240 --> 0:02:06.800 general kind of flattening and lack of growth from this company. 0:02:07.720 --> 0:02:09.800 You know, you know, year on a year to day basis, 0:02:09.840 --> 0:02:13.760 we may actually see a decline if if trends hold up. 0:02:13.800 --> 0:02:17.080 We've seen them drop a little over two percent for 0:02:17.120 --> 0:02:19.520 the year. So this is a company that you know, 0:02:19.600 --> 0:02:21.840 is priced as a growth stock that that is having 0:02:21.840 --> 0:02:22.839 trouble growing. 0:02:22.960 --> 0:02:24.040 And particularly in China. 0:02:24.120 --> 0:02:28.359 Craig, Yeah, and I think a lot of the expectations 0:02:28.400 --> 0:02:30.640 going into these numbers was that this company was going 0:02:30.720 --> 0:02:34.239 to get a big boost from China increasing subsidies for 0:02:34.480 --> 0:02:38.040 people to trade in older cars and get an electric vehicle. 0:02:38.120 --> 0:02:41.800 We did see Tesla's wholesale numbers tick up as a 0:02:41.800 --> 0:02:46.360 result of that boosted incentive. But you know, those numbers 0:02:46.440 --> 0:02:49.320 also are are wholesales. That means, you know, they're they're 0:02:49.400 --> 0:02:52.160 kind of closer to shipments as opposed to actual you know, 0:02:52.280 --> 0:02:55.560 vehicle deliveries, and so you know, we may actually see 0:02:55.560 --> 0:02:59.040 some of that you know, support coming into play in 0:02:59.080 --> 0:03:00.400 the fourth quarter of this yere. 0:03:01.800 --> 0:03:04.720 As always, you go straight to social media. I posted 0:03:04.760 --> 0:03:06.919 the numbers there, and there this big body of people 0:03:06.919 --> 0:03:10.320 that say the cell side doesn't know what it's talking about. 0:03:10.639 --> 0:03:14.080 This isn't about delivering evs. It's about a future where 0:03:14.120 --> 0:03:17.480 Tesla own and operates a proprietary ride hailing app Craig, 0:03:17.880 --> 0:03:21.640 they run and operate robotaxis, and I think next week 0:03:21.880 --> 0:03:23.959 we will find out whether or not that's true. 0:03:25.720 --> 0:03:28.720 Yeah, I think, you know, the counter to that argument 0:03:28.760 --> 0:03:30.640 would of course, just be that this is also a 0:03:30.680 --> 0:03:33.799 company that's talked about, you know, putting self driving cars 0:03:33.800 --> 0:03:36.920 on the road and offering a you know, a service 0:03:36.920 --> 0:03:38.840 that would be sort of uber like where you could 0:03:38.840 --> 0:03:42.440 hail one of their self driving cars. For for years now. 0:03:42.480 --> 0:03:44.720 I mean it's it's been a half decade at least 0:03:44.720 --> 0:03:48.320 since Elon Musk was openly musing about this. So you know, 0:03:48.360 --> 0:03:50.640 whether or not they're actually able to deliver that is 0:03:50.680 --> 0:03:53.119 another question. I do think that, you know, if they're 0:03:53.160 --> 0:03:56.080 able to execute and sort of do what others haven't 0:03:56.600 --> 0:03:58.480 you know, pulled off, which is real they do this 0:03:58.560 --> 0:04:02.200 at scale, of course, that would be a massive for 0:04:02.280 --> 0:04:05.760 this company, but it's already a pretty massive valuation for 0:04:06.960 --> 0:04:10.720 you know, a manufacturer that is really struggling to increase sales. 0:04:11.120 --> 0:04:14.840 All Eyes a little later this month, Creatudell. Thank you. 0:04:15.440 --> 0:04:17.560 Now let's get the investor perspective. 0:04:17.720 --> 0:04:20.680 Multi team and global Chief investment Officer Nancy Kurton joins 0:04:20.760 --> 0:04:23.599 us with your view more broadly than just one single stock. 0:04:23.920 --> 0:04:27.360 But the AI play that is so key to Tesla 0:04:27.520 --> 0:04:30.280 is so key to the market, and we still question it. 0:04:31.800 --> 0:04:33.839 Well, I think there's a couple of things to think about. 0:04:33.920 --> 0:04:37.599 We are strong believers that this is early innings and 0:04:37.680 --> 0:04:41.960 it's long term, medium term, hugely disinflationary, will bring great 0:04:42.000 --> 0:04:46.440 efficiency and productivity benefits. But near term, let's just look 0:04:46.480 --> 0:04:49.360 at some of the facts here. The hyperscalers are having 0:04:49.360 --> 0:04:53.200 to spend billions of dollars probably we'll go into the trillions. 0:04:53.279 --> 0:04:56.120 We're doing, you know, a one time shift from CPUs 0:04:56.200 --> 0:05:00.760 to GPUs for extending data center capacity. But we also 0:05:00.760 --> 0:05:04.160 have to build power power not just for GENAI, but 0:05:04.240 --> 0:05:08.200 we just touched on autonomous vehicles and power demand looks 0:05:08.200 --> 0:05:10.800 like it's going to double over the next three to 0:05:10.839 --> 0:05:14.880 five years. These are huge, huge numbers, huge CAPEX investment, 0:05:15.200 --> 0:05:19.120 So it may be near term that actually this investment 0:05:19.160 --> 0:05:20.760 in capex, which ry the way we think is an 0:05:20.880 --> 0:05:25.160 interesting investment opportunity to infrastructure. But this investment in capex 0:05:25.200 --> 0:05:29.640 and maybe shortages that it can bring near term if 0:05:29.680 --> 0:05:32.680 the monetization doesn't come as quickly, and could bring some 0:05:32.800 --> 0:05:33.719 inflation as well. 0:05:34.279 --> 0:05:37.039 So where in the stack does one invest Do you 0:05:37.120 --> 0:05:40.640 go still picks and shovels, chips, Do you go infrastructure? 0:05:40.640 --> 0:05:42.920 When it comes to energy, do you go to applications 0:05:42.920 --> 0:05:43.280 of AI? 0:05:44.920 --> 0:05:47.080 We think you go a little bit to all of them. So, 0:05:47.160 --> 0:05:50.320 first of all, we are invested in infrastructure. We think 0:05:50.320 --> 0:05:54.480 it's super interesting digital infrastructure and power, and the combination, 0:05:54.839 --> 0:05:58.960 we think we can earn equity like returns essential services, 0:05:59.080 --> 0:06:04.440 less correlation to the market, with some great counter parties here, 0:06:04.720 --> 0:06:08.360 and with revenue escalation and inflation protection over time. That's 0:06:08.400 --> 0:06:12.120 a pretty powerful story. But we also have investments at 0:06:12.160 --> 0:06:15.160 the other end of the spectrum with venture companies that 0:06:15.200 --> 0:06:18.600 are doing some things that are incredibly disruptive. We think 0:06:18.600 --> 0:06:21.040 there'll be winners and losers from Jenai, and we want 0:06:21.080 --> 0:06:23.560 to make sure we have exposure to that as well. 0:06:23.960 --> 0:06:28.040 And then finally, we have a specialist technology manager because 0:06:28.040 --> 0:06:31.520 that allows us in the public markets to look where 0:06:31.600 --> 0:06:35.520 Jenai is not yet priced in, and I would say 0:06:35.560 --> 0:06:40.360 all valuations, particularly in data heavy industries, jena is not 0:06:40.480 --> 0:06:43.839 priced in today, and there's some really interesting opportunities there. 0:06:45.279 --> 0:06:45.599 Nancy. 0:06:45.640 --> 0:06:48.080 The problem for our Bloomberg technology audience, if they're just 0:06:48.160 --> 0:06:51.240 tuning in, is that Tesla's down five percent on a 0:06:51.360 --> 0:06:53.880 data set that comes out once a quarter. Even though 0:06:53.880 --> 0:06:57.240 if there's this big body of people that believe in 0:06:57.279 --> 0:07:00.960 this long term story that's very analogous with what you've 0:07:01.040 --> 0:07:03.200 just outlined. I think I'm right in saying that ALTI 0:07:03.279 --> 0:07:07.440 has some small exposures Tesla, but use that as a 0:07:07.440 --> 0:07:11.320 case study. What wins out here, this multi year horizon 0:07:11.360 --> 0:07:14.840 belief in AI or the short term pain of having 0:07:14.880 --> 0:07:15.440 to get there. 0:07:16.960 --> 0:07:20.600 Well, we have a strong view that technology may underperform 0:07:20.640 --> 0:07:23.480 a little bit here. They're very high expectations. These stocks 0:07:23.480 --> 0:07:26.680 are trading at pretty high multiples thirty two times on 0:07:26.760 --> 0:07:30.600 average for the Magnificent seven. And meanwhile, the FED and 0:07:30.640 --> 0:07:33.560 other central banks in the world are easing interest rates, 0:07:33.560 --> 0:07:35.680 which we think will help the other four hundred and 0:07:35.800 --> 0:07:39.200 ninety three shares, which straight up more attractive valuations, and 0:07:39.320 --> 0:07:43.480 with the easing should support our earning's growth going forward. 0:07:43.840 --> 0:07:46.800 So there are things to do in the market. You 0:07:46.920 --> 0:07:50.520 don't just have to play technology at the moment to 0:07:50.680 --> 0:07:53.640 benefit from what's happening with the soft landing and the 0:07:53.640 --> 0:07:56.440 FED easing. And as I said, we think it's going 0:07:56.520 --> 0:08:00.280 to be a little time here for monetization to take call. 0:08:00.800 --> 0:08:03.320 Maybe it's twenty six, maybe it's twenty seven. You know, 0:08:03.400 --> 0:08:06.040 Baying believes, you know, by twenty seven we'll see a 0:08:06.040 --> 0:08:09.080 trillion in revenue. Let's see, but it's going to take 0:08:09.120 --> 0:08:12.240 more time. And remember in the enterprise, when you use 0:08:12.320 --> 0:08:15.000 jen Ai, it's not like the consumer, you have to 0:08:15.080 --> 0:08:18.400 embed it in business processes, you have to industrialize it. 0:08:18.800 --> 0:08:21.400 You've got to make sure that it doesn't have cyber threats, 0:08:21.440 --> 0:08:24.000 and so on and so forth. So this all takes time, 0:08:24.080 --> 0:08:26.400 so you know, a note of caution here near term 0:08:26.440 --> 0:08:28.720 on jen Ai. We can do other things in the 0:08:28.760 --> 0:08:32.320 marketplace and benefit from the digital picks and shovel build 0:08:32.880 --> 0:08:35.760 while we're waiting, but we do ultimately think it will 0:08:35.800 --> 0:08:36.800 be transformational. 0:08:37.960 --> 0:08:41.600 Nancy, is there a corner of the technology sector that's 0:08:41.720 --> 0:08:43.800 underappreciated by investors? 0:08:45.320 --> 0:08:48.960 I think beyond the Magnificent seven as you look more broadly, 0:08:49.800 --> 0:08:52.600 you know, to other companies that will participate. You know, 0:08:52.760 --> 0:08:55.960 Nvidia is not going to be alone here. Maybe it's 0:08:56.040 --> 0:08:58.600 a winner take most as opposed to a winner take all, 0:08:58.880 --> 0:09:02.640 so there will be competition. There are other companies that 0:09:02.760 --> 0:09:06.840 also benefit. You know, think about data centers. They need cooling, 0:09:07.440 --> 0:09:10.359 so you know there are industrial companies that are providing 0:09:10.440 --> 0:09:15.040 cooling services to data centers. The trade at really attract evaluations, 0:09:15.360 --> 0:09:19.360 So there are other ways of playing GENI in this infrastructure. 0:09:19.600 --> 0:09:22.280 But take a look at utilities, probably one of the 0:09:22.320 --> 0:09:25.600 best performing sectors year to date. Who would have thunk 0:09:25.640 --> 0:09:29.360 it right, So there are other ways to think about this. 0:09:29.679 --> 0:09:30.720 You just have to think. 0:09:30.559 --> 0:09:35.280 More broadly, where is JENI not priced in? Particularly in 0:09:35.320 --> 0:09:38.520 this period where we're in the CAPEX build. The monetization 0:09:38.679 --> 0:09:41.840 will take some time, and at the moment, I think 0:09:41.880 --> 0:09:44.680 investors may be getting ahead of what may be delivered 0:09:44.760 --> 0:09:45.360 next quarter. 0:09:46.080 --> 0:09:49.680 What about where it's underpriced globally, Nancy, I think of 0:09:49.960 --> 0:09:51.720 the latest news that we'll go into a little bit 0:09:51.800 --> 0:09:54.840 later about KKR looking to take private Hong Kong based 0:09:55.200 --> 0:09:56.920 or traded chip company. 0:09:57.440 --> 0:09:58.720 What about global. 0:09:58.400 --> 0:10:03.080 Exposure, Well, I think there's some really interesting things happening globally. 0:10:03.120 --> 0:10:06.320 You might have seen as well, something like Blackstone just 0:10:06.400 --> 0:10:10.480 did a sixteen billion dollar deal in Australia called air Trunk, 0:10:10.520 --> 0:10:15.880 which is the largest Asia Pacific data center. Europe is 0:10:16.080 --> 0:10:20.440 further behind the US build. Asia Pacific is further behind 0:10:20.440 --> 0:10:24.040 the US build. So we think in our national exposure 0:10:24.360 --> 0:10:28.000 to data center infrastructure, power and build out is a 0:10:28.080 --> 0:10:32.079 hugely interesting opportunity. They are much further behind the United 0:10:32.160 --> 0:10:36.720 States and prices are more reasonable on a relative basis. 0:10:36.760 --> 0:10:39.880 So yeah, there are opportunities here beyond the United States, 0:10:39.960 --> 0:10:41.280 and they are internationally. 0:10:42.440 --> 0:10:45.320 Nancy Kahr and chief investment officer at ALLTT and then 0:10:45.400 --> 0:10:48.840 global really sizeable advisory. 0:10:48.200 --> 0:10:50.120 And investment firm. Thank you very much. 0:10:50.160 --> 0:10:53.080 Now coming up, Apple prepares for a new slate of 0:10:53.120 --> 0:10:57.319 iPhones and iPads as and this raised concerns about iPhone 0:10:57.360 --> 0:10:59.960 sales growth. We have a bluemeg exclusive coming out now. 0:11:00.520 --> 0:11:07.400 This is Blue Day Technology. 0:11:13.040 --> 0:11:16.560 Apple is preparing to announce a new low end iPhone 0:11:16.640 --> 0:11:19.880 early next year alongside upgraded iPads as all. According to 0:11:19.960 --> 0:11:22.760 sources bluem Eggs Mark German broke, the news brings us 0:11:22.800 --> 0:11:26.200 the details. Is this about India and China and the 0:11:26.240 --> 0:11:26.880 consumer there? 0:11:28.679 --> 0:11:31.679 This is not about India and China specifically. 0:11:31.720 --> 0:11:33.120 This is more of a global thing. 0:11:33.200 --> 0:11:35.480 Right, if you look at how the iPhone sixteen has 0:11:35.520 --> 0:11:39.880 been performing across the world, right, it's not meeting expectations 0:11:39.880 --> 0:11:42.520 according to some analysts. But if the company comes out 0:11:42.559 --> 0:11:45.400 with the phone, obviously they'd been planning this for multiple years. 0:11:45.640 --> 0:11:48.400 That brings down the price point of features like an 0:11:48.480 --> 0:11:51.760 edge to edge stream face ID this thinner luck with 0:11:51.840 --> 0:11:55.319 the swirred off edges globally at a sub five hundred 0:11:55.320 --> 0:11:58.959 dollars price point, they're going to be bringing something quite compelling. 0:11:58.520 --> 0:11:59.240 To the market. 0:11:59.559 --> 0:12:02.120 Now, the reason this is not so much about. 0:12:01.840 --> 0:12:05.400 India is because in India the market share leaders, they're 0:12:05.400 --> 0:12:07.880 not sub five hundred dollars phones, they're sub two hundred 0:12:07.880 --> 0:12:11.480 dollars phones, right, so they're still not playing in that 0:12:11.480 --> 0:12:15.439 that particular market. That would boost market share significantly in India, 0:12:15.760 --> 0:12:18.760 but this would help them make additional straws globally. 0:12:19.559 --> 0:12:23.440 Mark project code name V fifty nine. What a source 0:12:23.520 --> 0:12:26.480 is telling you about a refreshed iPhone SE. 0:12:28.000 --> 0:12:30.000 Yeah, so that's the iPhone SE. That's the new low 0:12:30.080 --> 0:12:32.480 end iPhone and this is going to look similar to 0:12:32.520 --> 0:12:35.560 the iPhone fourteen from a few years ago. It's going 0:12:35.640 --> 0:12:39.360 to have the internal specifications to support Apple Intelligence. There's 0:12:39.400 --> 0:12:42.720 going to be upgraded cameras over the prior SSE. The 0:12:42.760 --> 0:12:45.600 current SE launched in twenty two, that's when they added 0:12:45.640 --> 0:12:48.160 five G to it, but it still has the home button, right, 0:12:48.200 --> 0:12:51.440 it's the only iPhone left with the home button. In fact, 0:12:51.520 --> 0:12:55.240 it's the only Apple product that hasn't been updated to 0:12:55.240 --> 0:12:59.439 remove the home button. They've already transitioned the low end iPad, right, 0:12:59.480 --> 0:13:01.120 they cut the price of that and made that a 0:13:01.120 --> 0:13:03.680 full screen design. So this was the laggard in the 0:13:03.679 --> 0:13:06.120 product line, and that's going to change now. And this 0:13:06.160 --> 0:13:08.080 is going to make things easier for Apple. They don't 0:13:08.080 --> 0:13:11.560 have to support older operating systems for that much longer 0:13:12.240 --> 0:13:14.560 that support a home button. They're able to move to 0:13:14.600 --> 0:13:17.040 a user interface that's consistent across all. 0:13:17.000 --> 0:13:17.800 Of its devices. 0:13:17.880 --> 0:13:20.240 So this is a big deal for the consumer and 0:13:20.320 --> 0:13:21.960 for Apple as a company. And I think this is 0:13:21.960 --> 0:13:24.080 going to be an extremely strong seller. 0:13:24.400 --> 0:13:26.760 How big a deal, How strong a seller is the 0:13:26.840 --> 0:13:29.199 new iPad egg going to be in the keyboards? 0:13:30.240 --> 0:13:32.760 Yeah, The iPad air update's going to be quite minor, right. 0:13:32.800 --> 0:13:35.480 The iPad Air was less updated alongside the iPad Pro 0:13:35.840 --> 0:13:39.400 in May. What they did last May is they introduced 0:13:39.400 --> 0:13:41.520 a new larger size with the iPad Air. So what 0:13:41.559 --> 0:13:43.720 they were doing was they were bringing iPad pro size 0:13:43.720 --> 0:13:47.800 display down market and that actually is pretty significant for 0:13:47.920 --> 0:13:50.360 schools and businesses where you're buying these things in bulk 0:13:50.440 --> 0:13:52.839 and you may want to buy something with that bigger 0:13:52.880 --> 0:13:55.360 display but not spend the typical extra four or five 0:13:55.440 --> 0:13:58.360 hundred dollars. So that was quite interesting. And then they're 0:13:58.400 --> 0:14:01.560 also manufacturing new keyboards for those new iPad airs. The 0:14:01.600 --> 0:14:04.880 current models actually used the old iPad pro keyboard. They 0:14:04.920 --> 0:14:07.199 didn't create a new iPad Air keyboard just for that 0:14:07.320 --> 0:14:10.040 device when they launched the new models earlier this year, 0:14:10.360 --> 0:14:12.360 and so by doing that, they're able to bring down 0:14:12.400 --> 0:14:14.720 market some of the new features of the iPad pro 0:14:14.840 --> 0:14:17.760 keyboard to that iPad Air family and create more of 0:14:18.120 --> 0:14:21.960 a unified accessory in product ecosystem. So I think that's 0:14:22.000 --> 0:14:24.200 going to be a strong seller potentially as well. 0:14:25.440 --> 0:14:28.400 Name based Mark Gunman with another big breaking story on Apple, 0:14:28.520 --> 0:14:29.000 Thank you. 0:14:37.000 --> 0:14:37.400 Google. 0:14:37.640 --> 0:14:39.800 Well, it's looking to take on open ai with new 0:14:39.840 --> 0:14:43.920 AI software that resembles the human ability to reason, similar 0:14:44.000 --> 0:14:46.680 of course to open AI's O one sort, according to 0:14:46.720 --> 0:14:49.440 sources who say multiple teams at Google have been making 0:14:49.520 --> 0:14:52.640 some progress in that area. Bloomberg's Rachel Metz has more, 0:14:52.720 --> 0:14:55.560 how much are they chasing open ai? How much were 0:14:55.560 --> 0:14:57.760 they already building this chain of thought? 0:14:58.920 --> 0:15:02.440 Well, Google has been a pioneer actually in building the 0:15:02.520 --> 0:15:04.480 kind of technology that is used in a lot of 0:15:04.480 --> 0:15:07.600 these systems. As you mentioned chain of thought. The idea 0:15:07.680 --> 0:15:12.160 behind that technique is that you're basically when a person 0:15:12.240 --> 0:15:15.880 gives an AI system a prompt, like a really hard 0:15:15.880 --> 0:15:18.920 math problem, let's say, with this kind of technique, the 0:15:18.960 --> 0:15:21.960 AI system takes the prompt and in the background, unseen 0:15:22.000 --> 0:15:23.840 to the user, it's kind of coming up with a 0:15:23.880 --> 0:15:28.440 bunch of different similar prompts and sorting through the problem 0:15:28.560 --> 0:15:31.120 sort of step by step, and then presenting what seems 0:15:31.200 --> 0:15:34.880 like the best answer to the user. So Google, Google 0:15:34.920 --> 0:15:37.200 has a history here. But as we know, open Ai 0:15:37.320 --> 0:15:40.200 may this flashed recently with their O one model, and 0:15:40.320 --> 0:15:42.600 Google tends to be more cautious. I mean, is it 0:15:42.680 --> 0:15:44.960 is a huge company. There's a lot of moving parts there, 0:15:45.320 --> 0:15:47.080 so we'll see what happens. 0:15:47.960 --> 0:15:49.640 It tends to be more cautious. 0:15:49.680 --> 0:15:54.160 But since chat GPT's release in November twenty twenty two, 0:15:54.360 --> 0:15:57.160 it's been a it's been a wild ride. Since there's 0:15:57.280 --> 0:16:01.320 pressure there, right, and I think the competition, they're cognizant 0:16:01.360 --> 0:16:04.200 of it. So what does that look like, the pushback 0:16:04.320 --> 0:16:07.600 to catch up I suppose against open Ai. 0:16:09.040 --> 0:16:10.840 Yeah, I mean, I think it looks like a few 0:16:10.840 --> 0:16:12.000 different things happening there. 0:16:12.080 --> 0:16:12.280 Right. 0:16:12.520 --> 0:16:16.320 Initially, when chat GPT was so popular with people, I 0:16:16.360 --> 0:16:20.440 think Google felt caught flat footed, but as and felt, 0:16:20.520 --> 0:16:22.240 you know, like, oh, we have to put something out 0:16:22.280 --> 0:16:24.840 so we can be competitive with that. But as more 0:16:24.880 --> 0:16:27.880 time has passed, I think they want to be really cautious. 0:16:27.920 --> 0:16:29.560 I mean, they have a lot of things to think about. 0:16:29.560 --> 0:16:31.680 They have so many users, and they have so many 0:16:31.720 --> 0:16:33.880 people working on different things within their company. So I 0:16:33.880 --> 0:16:35.960 think with this they're really trying to take their time 0:16:36.080 --> 0:16:39.320 and get it right. And they have some amazingly smart 0:16:39.320 --> 0:16:41.360 people that have been working on this kind of technology 0:16:41.400 --> 0:16:43.280 for a very long time, so it'll be really interesting 0:16:43.280 --> 0:16:44.360 to see what comes out of there. 0:16:44.840 --> 0:16:47.440 Haven't even discussed notebook LM yet, which is a lot 0:16:47.440 --> 0:16:47.720 of fun. 0:16:47.840 --> 0:16:49.520 Ratro Metz, thank you so much. 0:16:49.640 --> 0:16:53.840 Meanwhile, well, not everyone is bullish on aidur own a 0:16:53.920 --> 0:16:56.960 small group. Is a renowned professor at MIT, and it's 0:16:57.000 --> 0:16:59.160 not so sure that AI can deliver on the promise 0:16:59.200 --> 0:17:01.920 of an economic He wants to make clear that he 0:17:02.280 --> 0:17:06.480 does get the potential of artificial intelligence, but by his calculation, 0:17:06.840 --> 0:17:10.120 only a small percent of all jobs, a mere five percent, 0:17:10.760 --> 0:17:13.120 is right to be taken over or at least heavily 0:17:13.160 --> 0:17:16.040 aided by AI over the next decade. 0:17:16.400 --> 0:17:17.120 And what have you got. 0:17:17.760 --> 0:17:20.280 Okay, it's time for today's AI and action, and today 0:17:20.280 --> 0:17:23.320 we're taking a look at Codium, which aims to utilize 0:17:23.320 --> 0:17:27.240 AI to accelerate software development. Just last month, they raise 0:17:27.280 --> 0:17:29.480 one hundred and fifty million dollars in a series C 0:17:29.760 --> 0:17:33.639 round with evaluation of one point twenty five billion dollars. 0:17:33.680 --> 0:17:37.280 Codium CEO and co founder Varun Mohan joins us for more. 0:17:37.320 --> 0:17:39.399 Welcome to the program. A lot of people phone me 0:17:39.440 --> 0:17:41.280 and said that you've got to check out Codium, So 0:17:41.359 --> 0:17:44.320 let's start with the basics of what is Codium. 0:17:44.600 --> 0:17:46.399 Thanks for having me ed so. 0:17:46.680 --> 0:17:50.200 Codium is an AI software development toolkit that fundamentally enables 0:17:50.200 --> 0:17:54.360 developers to write software faster and review software faster. Right now, 0:17:54.400 --> 0:17:57.720 the platform has over seven hundred thousand individual developers that 0:17:57.800 --> 0:18:00.560 use the product in over one thousand enterprises, and one 0:18:00.560 --> 0:18:03.040 of the key things that we focus on is deep 0:18:03.040 --> 0:18:04.760 personalization based. 0:18:04.480 --> 0:18:05.520 On the rest of the codebase. 0:18:05.800 --> 0:18:08.960 Code is a very interdependent sort of knowledge and data source, 0:18:09.160 --> 0:18:12.159 and we try to make the responses as personalized to 0:18:12.200 --> 0:18:12.879 the private. 0:18:12.640 --> 0:18:13.600 Data inside companies. 0:18:13.920 --> 0:18:16.720 Right now, they're seeing around fifty percent of all their 0:18:16.760 --> 0:18:20.240 private code that's committed generated by Codium, as well as 0:18:20.240 --> 0:18:23.680 a twenty percent reduction in total application development time when 0:18:23.760 --> 0:18:24.400 using Codium. 0:18:24.440 --> 0:18:27.760 I'm going to make an observation and you respond to it. 0:18:28.320 --> 0:18:32.280 You have seven hundred thousand users and a thousand enterprise customers. 0:18:33.320 --> 0:18:37.679 You've raised relatively little money compared to a number of 0:18:37.680 --> 0:18:40.879 companies that raised quite a lot of money that haven't 0:18:40.920 --> 0:18:44.160 started selling anything yet or anyone using their tech. 0:18:44.440 --> 0:18:45.440 What do you make of that? 0:18:46.119 --> 0:18:46.199 So? 0:18:46.240 --> 0:18:47.760 I don't have a lot of comments on this. 0:18:48.480 --> 0:18:51.720 I previously worked in an industry autonomous vehicles, where companies 0:18:51.720 --> 0:18:55.199 were raising larger and larger amounts of money without actually 0:18:55.200 --> 0:18:58.120 developing a product, So I think this is not uncommon 0:18:58.160 --> 0:18:59.359 in a bunch of categories. 0:19:00.040 --> 0:19:01.439 What we believe in is we're in. 0:19:01.440 --> 0:19:04.280 A space that is moving incredibly fast, and the only 0:19:04.320 --> 0:19:07.520 thing that would guarantee us the ability to actually earn 0:19:07.560 --> 0:19:10.680 the right to work with large enterprises is actually shipping 0:19:10.880 --> 0:19:13.600 incredibly quickly, staying really close to the technology. 0:19:14.520 --> 0:19:20.760 Bern It's a relatively crowded space though. You've got GitHub Copilot, 0:19:20.840 --> 0:19:22.919 You've got Sam Altman telling me that his favorite thing 0:19:22.960 --> 0:19:25.399 to do on the latest version of chatchubt is to code. 0:19:25.440 --> 0:19:29.080 So how do you ensure you take market share? 0:19:30.320 --> 0:19:30.600 Yeah? 0:19:30.880 --> 0:19:33.520 I think we believe the space is going to be crowded, 0:19:33.600 --> 0:19:37.600 largely because the prize is quite large. If a tool 0:19:37.680 --> 0:19:40.640 is able to actually generate or reduce application development time 0:19:40.680 --> 0:19:42.639 by twenty percent, It would be surprising if there are 0:19:42.680 --> 0:19:46.360 only one player in the category. The way we sort 0:19:46.359 --> 0:19:47.960 of like to look at it is what can we 0:19:47.960 --> 0:19:52.119 do differentially better than other companies and compared to our 0:19:52.160 --> 0:19:55.159 biggest competitor being gethub copilot. The big thing we do 0:19:55.280 --> 0:19:57.760 is care a lot about security as well as being 0:19:57.760 --> 0:20:01.560 a platform agnostic tool. Right no, noticing a very small 0:20:01.560 --> 0:20:06.200 fraction of large enterprises standardizing on getub Enterprise Cloud, and we, 0:20:06.280 --> 0:20:09.480 on the other hand, don't really tie ourselves to any 0:20:09.520 --> 0:20:12.240 one of these platforms. In addition to that, we don't 0:20:12.280 --> 0:20:15.720 actually require a company to send their IP outside of 0:20:15.760 --> 0:20:17.840 their firewall, which is one of the things that get 0:20:17.920 --> 0:20:19.080 up copile that actually requires. 0:20:19.119 --> 0:20:21.800 Right now, Okay, so you feel you've got a unique 0:20:21.880 --> 0:20:24.840 selling point there, but you're going to keep on innovating. 0:20:25.200 --> 0:20:28.800 You told previously that you raise a load of money 0:20:29.240 --> 0:20:31.440 before and haven't actually even spent that. 0:20:31.640 --> 0:20:33.600 Why do you need this money right now? 0:20:35.040 --> 0:20:37.119 I think as we're starting to work with some of 0:20:37.160 --> 0:20:40.639 the world's largest enterprises companies like Dell, we want to 0:20:40.680 --> 0:20:43.560 make sure we're great sort of vendors to our customers, 0:20:44.000 --> 0:20:46.720 and that means continuing to invest in innovation. As you 0:20:46.720 --> 0:20:50.800 can imagine GPU costs are fairly high, but also beyond 0:20:50.800 --> 0:20:53.840 that increasing the amount of the size of our research 0:20:53.880 --> 0:20:56.560