Speaker 1: From the heart where innovation, money and power co lie
Speaker 1: in Silicon Valley, NBN. This is Bloomberg Technology with Caroline
Speaker 1: Hyde and Ed.
Speaker 2: Luvedlove live from New York and San Francisco. This is
Speaker 2: Bloomberg Technology coming up. Tesl posts its first increase in
Speaker 2: quarterly sales this year, but it disappoints investors.
Speaker 3: And Apple preparing to announce a new low end iPhone.
Speaker 4: We have the Bloomberg exclusive.
Speaker 5: US we talk to tech. Have you hitters?
Speaker 2: Later in the our CEO of Pinterest coming from its
Speaker 2: advertising event, Ed, Let's.
Speaker 4: Get strike to our top story.
Speaker 3: Tesla just posted its first increase in quarterly sales this year,
Speaker 3: but for the quarter, deliveries came in just below street estimates.
Speaker 3: Shares are down sharply to the company delivered four hundred
Speaker 3: and sixty two thousand, eight hundred and ninety ebs in
Speaker 3: the third quarter, just shy of the four hundred and
Speaker 3: sixty three thousand, eight hundred and ninety seven estimate. And
Speaker 3: this all ahead of course of next week's robotaxi event.
Speaker 3: Bloomberg's Global Auto's editor Craig Trudell joins us from London.
Speaker 4: Going into the data.
Speaker 3: It's interesting because three and y the volume products beat estimates,
Speaker 3: the other bucket which is XS and cyber truck missed estimates.
Speaker 4: What else do we know?
Speaker 6: Yeah, I think this is a case of, you know,
Speaker 6: a narrowbeat giveth and a narrowmiss take it away. This
Speaker 6: is a company that, you know, its shares are known
Speaker 6: to be quite volidle. Just a quarter ago, they just
Speaker 6: barely exceeded expectations and the stock went kind of crazy.
Speaker 6: I don't think we necessarily learn a ton from these numbers.
Speaker 6: I think, you know, we do generally see a nice
Speaker 6: upward trend, both sequentially and year over year. Having said that,
Speaker 6: if you kind of you know, pan out a little
Speaker 6: bit and look at the trend, you know, going a
Speaker 6: little further back, we really just see a sort of
Speaker 6: general kind of flattening and lack of growth from this company.
Speaker 6: You know, you know, year on a year to day basis,
Speaker 6: we may actually see a decline if if trends hold up.
Speaker 6: We've seen them drop a little over two percent for
Speaker 6: the year. So this is a company that you know,
Speaker 6: is priced as a growth stock that that is having
Speaker 6: trouble growing.
Speaker 5: And particularly in China.
Speaker 6: Craig, Yeah, and I think a lot of the expectations
Speaker 6: going into these numbers was that this company was going
Speaker 6: to get a big boost from China increasing subsidies for
Speaker 6: people to trade in older cars and get an electric vehicle.
Speaker 6: We did see Tesla's wholesale numbers tick up as a
Speaker 6: result of that boosted incentive. But you know, those numbers
Speaker 6: also are are wholesales. That means, you know, they're they're
Speaker 6: kind of closer to shipments as opposed to actual you know,
Speaker 6: vehicle deliveries, and so you know, we may actually see
Speaker 6: some of that you know, support coming into play in
Speaker 6: the fourth quarter of this yere.
Speaker 3: As always, you go straight to social media. I posted
Speaker 3: the numbers there, and there this big body of people
Speaker 3: that say the cell side doesn't know what it's talking about.
Speaker 3: This isn't about delivering evs. It's about a future where
Speaker 3: Tesla own and operates a proprietary ride hailing app Craig,
Speaker 3: they run and operate robotaxis, and I think next week
Speaker 3: we will find out whether or not that's true.
Speaker 6: Yeah, I think, you know, the counter to that argument
Speaker 6: would of course, just be that this is also a
Speaker 6: company that's talked about, you know, putting self driving cars
Speaker 6: on the road and offering a you know, a service
Speaker 6: that would be sort of uber like where you could
Speaker 6: hail one of their self driving cars. For for years now.
Speaker 6: I mean it's it's been a half decade at least
Speaker 6: since Elon Musk was openly musing about this. So you know,
Speaker 6: whether or not they're actually able to deliver that is
Speaker 6: another question. I do think that, you know, if they're
Speaker 6: able to execute and sort of do what others haven't
Speaker 6: you know, pulled off, which is real they do this
Speaker 6: at scale, of course, that would be a massive for
Speaker 6: this company, but it's already a pretty massive valuation for
Speaker 6: you know, a manufacturer that is really struggling to increase sales.
Speaker 5: All Eyes a little later this month, Creatudell. Thank you.
Speaker 5: Now let's get the investor perspective.
Speaker 2: Multi team and global Chief investment Officer Nancy Kurton joins
Speaker 2: us with your view more broadly than just one single stock.
Speaker 2: But the AI play that is so key to Tesla
Speaker 2: is so key to the market, and we still question it.
Speaker 1: Well, I think there's a couple of things to think about.
Speaker 1: We are strong believers that this is early innings and
Speaker 1: it's long term, medium term, hugely disinflationary, will bring great
Speaker 1: efficiency and productivity benefits. But near term, let's just look
Speaker 1: at some of the facts here. The hyperscalers are having
Speaker 1: to spend billions of dollars probably we'll go into the trillions.
Speaker 1: We're doing, you know, a one time shift from CPUs
Speaker 1: to GPUs for extending data center capacity. But we also
Speaker 1: have to build power power not just for GENAI, but
Speaker 1: we just touched on autonomous vehicles and power demand looks
Speaker 1: like it's going to double over the next three to
Speaker 1: five years. These are huge, huge numbers, huge CAPEX investment,
Speaker 1: So it may be near term that actually this investment
Speaker 1: in capex, which ry the way we think is an
Speaker 1: interesting investment opportunity to infrastructure. But this investment in capex
Speaker 1: and maybe shortages that it can bring near term if
Speaker 1: the monetization doesn't come as quickly, and could bring some
Speaker 1: inflation as well.
Speaker 2: So where in the stack does one invest Do you
Speaker 2: go still picks and shovels, chips, Do you go infrastructure?
Speaker 2: When it comes to energy, do you go to applications
Speaker 2: of AI?
Speaker 1: We think you go a little bit to all of them. So,
Speaker 1: first of all, we are invested in infrastructure. We think
Speaker 1: it's super interesting digital infrastructure and power, and the combination,
Speaker 1: we think we can earn equity like returns essential services,
Speaker 1: less correlation to the market, with some great counter parties here,
Speaker 1: and with revenue escalation and inflation protection over time. That's
Speaker 1: a pretty powerful story. But we also have investments at
Speaker 1: the other end of the spectrum with venture companies that
Speaker 1: are doing some things that are incredibly disruptive. We think
Speaker 1: there'll be winners and losers from Jenai, and we want
Speaker 1: to make sure we have exposure to that as well.
Speaker 1: And then finally, we have a specialist technology manager because
Speaker 1: that allows us in the public markets to look where
Speaker 1: Jenai is not yet priced in, and I would say
Speaker 1: all valuations, particularly in data heavy industries, jena is not
Speaker 1: priced in today, and there's some really interesting opportunities there.
Speaker 4: Nancy.
Speaker 3: The problem for our Bloomberg technology audience, if they're just
Speaker 3: tuning in, is that Tesla's down five percent on a
Speaker 3: data set that comes out once a quarter. Even though
Speaker 3: if there's this big body of people that believe in
Speaker 3: this long term story that's very analogous with what you've
Speaker 3: just outlined. I think I'm right in saying that ALTI
Speaker 3: has some small exposures Tesla, but use that as a
Speaker 3: case study. What wins out here, this multi year horizon
Speaker 3: belief in AI or the short term pain of having
Speaker 3: to get there.
Speaker 1: Well, we have a strong view that technology may underperform
Speaker 1: a little bit here. They're very high expectations. These stocks
Speaker 1: are trading at pretty high multiples thirty two times on
Speaker 1: average for the Magnificent seven. And meanwhile, the FED and
Speaker 1: other central banks in the world are easing interest rates,
Speaker 1: which we think will help the other four hundred and
Speaker 1: ninety three shares, which straight up more attractive valuations, and
Speaker 1: with the easing should support our earning's growth going forward.
Speaker 1: So there are things to do in the market. You
Speaker 1: don't just have to play technology at the moment to
Speaker 1: benefit from what's happening with the soft landing and the
Speaker 1: FED easing. And as I said, we think it's going
Speaker 1: to be a little time here for monetization to take call.
Speaker 1: Maybe it's twenty six, maybe it's twenty seven. You know,
Speaker 1: Baying believes, you know, by twenty seven we'll see a
Speaker 1: trillion in revenue. Let's see, but it's going to take
Speaker 1: more time. And remember in the enterprise, when you use
Speaker 1: jen Ai, it's not like the consumer, you have to
Speaker 1: embed it in business processes, you have to industrialize it.
Speaker 1: You've got to make sure that it doesn't have cyber threats,
Speaker 1: and so on and so forth. So this all takes time,
Speaker 1: so you know, a note of caution here near term
Speaker 1: on jen Ai. We can do other things in the
Speaker 1: marketplace and benefit from the digital picks and shovel build
Speaker 1: while we're waiting, but we do ultimately think it will
Speaker 1: be transformational.
Speaker 3: Nancy, is there a corner of the technology sector that's
Speaker 3: underappreciated by investors?
Speaker 1: I think beyond the Magnificent seven as you look more broadly,
Speaker 1: you know, to other companies that will participate. You know,
Speaker 1: Nvidia is not going to be alone here. Maybe it's
Speaker 1: a winner take most as opposed to a winner take all,
Speaker 1: so there will be competition. There are other companies that
Speaker 1: also benefit. You know, think about data centers. They need cooling,
Speaker 1: so you know there are industrial companies that are providing
Speaker 1: cooling services to data centers. The trade at really attract evaluations,
Speaker 1: So there are other ways of playing GENI in this infrastructure.
Speaker 1: But take a look at utilities, probably one of the
Speaker 1: best performing sectors year to date. Who would have thunk
Speaker 1: it right, So there are other ways to think about this.
Speaker 7: You just have to think.
Speaker 1: More broadly, where is JENI not priced in? Particularly in
Speaker 1: this period where we're in the CAPEX build. The monetization
Speaker 1: will take some time, and at the moment, I think
Speaker 1: investors may be getting ahead of what may be delivered
Speaker 1: next quarter.
Speaker 2: What about where it's underpriced globally, Nancy, I think of
Speaker 2: the latest news that we'll go into a little bit
Speaker 2: later about KKR looking to take private Hong Kong based
Speaker 2: or traded chip company.
Speaker 5: What about global.
Speaker 1: Exposure, Well, I think there's some really interesting things happening globally.
Speaker 1: You might have seen as well, something like Blackstone just
Speaker 1: did a sixteen billion dollar deal in Australia called air Trunk,
Speaker 1: which is the largest Asia Pacific data center. Europe is
Speaker 1: further behind the US build. Asia Pacific is further behind
Speaker 1: the US build. So we think in our national exposure
Speaker 1: to data center infrastructure, power and build out is a
Speaker 1: hugely interesting opportunity. They are much further behind the United
Speaker 1: States and prices are more reasonable on a relative basis.
Speaker 1: So yeah, there are opportunities here beyond the United States,
Speaker 1: and they are internationally.
Speaker 3: Nancy Kahr and chief investment officer at ALLTT and then
Speaker 3: global really sizeable advisory.
Speaker 4: And investment firm. Thank you very much.
Speaker 3: Now coming up, Apple prepares for a new slate of
Speaker 3: iPhones and iPads as and this raised concerns about iPhone
Speaker 3: sales growth. We have a bluemeg exclusive coming out now.
Speaker 3: This is Blue Day Technology.
Speaker 2: Apple is preparing to announce a new low end iPhone
Speaker 2: early next year alongside upgraded iPads as all. According to
Speaker 2: sources bluem Eggs Mark German broke, the news brings us
Speaker 2: the details. Is this about India and China and the
Speaker 2: consumer there?
Speaker 8: This is not about India and China specifically.
Speaker 7: This is more of a global thing.
Speaker 8: Right, if you look at how the iPhone sixteen has
Speaker 8: been performing across the world, right, it's not meeting expectations
Speaker 8: according to some analysts. But if the company comes out
Speaker 8: with the phone, obviously they'd been planning this for multiple years.
Speaker 8: That brings down the price point of features like an
Speaker 8: edge to edge stream face ID this thinner luck with
Speaker 8: the swirred off edges globally at a sub five hundred
Speaker 8: dollars price point, they're going to be bringing something quite compelling.
Speaker 5: To the market.
Speaker 1: Now, the reason this is not so much about.
Speaker 8: India is because in India the market share leaders, they're
Speaker 8: not sub five hundred dollars phones, they're sub two hundred
Speaker 8: dollars phones, right, so they're still not playing in that
Speaker 8: that particular market. That would boost market share significantly in India,
Speaker 8: but this would help them make additional straws globally.
Speaker 3: Mark project code name V fifty nine. What a source
Speaker 3: is telling you about a refreshed iPhone SE.
Speaker 8: Yeah, so that's the iPhone SE. That's the new low
Speaker 8: end iPhone and this is going to look similar to
Speaker 8: the iPhone fourteen from a few years ago. It's going
Speaker 8: to have the internal specifications to support Apple Intelligence. There's
Speaker 8: going to be upgraded cameras over the prior SSE. The
Speaker 8: current SE launched in twenty two, that's when they added
Speaker 8: five G to it, but it still has the home button, right,
Speaker 8: it's the only iPhone left with the home button. In fact,
Speaker 8: it's the only Apple product that hasn't been updated to
Speaker 8: remove the home button. They've already transitioned the low end iPad, right,
Speaker 8: they cut the price of that and made that a
Speaker 8: full screen design. So this was the laggard in the
Speaker 8: product line, and that's going to change now. And this
Speaker 8: is going to make things easier for Apple. They don't
Speaker 8: have to support older operating systems for that much longer
Speaker 8: that support a home button. They're able to move to
Speaker 8: a user interface that's consistent across all.
Speaker 4: Of its devices.
Speaker 8: So this is a big deal for the consumer and
Speaker 8: for Apple as a company. And I think this is
Speaker 8: going to be an extremely strong seller.
Speaker 2: How big a deal, How strong a seller is the
Speaker 2: new iPad egg going to be in the keyboards?
Speaker 8: Yeah, The iPad air update's going to be quite minor, right.
Speaker 8: The iPad Air was less updated alongside the iPad Pro
Speaker 8: in May. What they did last May is they introduced
Speaker 8: a new larger size with the iPad Air. So what
Speaker 8: they were doing was they were bringing iPad pro size
Speaker 8: display down market and that actually is pretty significant for
Speaker 8: schools and businesses where you're buying these things in bulk
Speaker 8: and you may want to buy something with that bigger
Speaker 8: display but not spend the typical extra four or five
Speaker 8: hundred dollars. So that was quite interesting. And then they're
Speaker 8: also manufacturing new keyboards for those new iPad airs. The
Speaker 8: current models actually used the old iPad pro keyboard. They
Speaker 8: didn't create a new iPad Air keyboard just for that
Speaker 8: device when they launched the new models earlier this year,
Speaker 8: and so by doing that, they're able to bring down
Speaker 8: market some of the new features of the iPad pro
Speaker 8: keyboard to that iPad Air family and create more of
Speaker 8: a unified accessory in product ecosystem. So I think that's
Speaker 8: going to be a strong seller potentially as well.
Speaker 3: Name based Mark Gunman with another big breaking story on Apple,
Speaker 3: Thank you.
Speaker 5: Google.
Speaker 2: Well, it's looking to take on open ai with new
Speaker 2: AI software that resembles the human ability to reason, similar
Speaker 2: of course to open AI's O one sort, according to
Speaker 2: sources who say multiple teams at Google have been making
Speaker 2: some progress in that area. Bloomberg's Rachel Metz has more,
Speaker 2: how much are they chasing open ai? How much were
Speaker 2: they already building this chain of thought?
Speaker 9: Well, Google has been a pioneer actually in building the
Speaker 9: kind of technology that is used in a lot of
Speaker 9: these systems. As you mentioned chain of thought. The idea
Speaker 9: behind that technique is that you're basically when a person
Speaker 9: gives an AI system a prompt, like a really hard
Speaker 9: math problem, let's say, with this kind of technique, the
Speaker 9: AI system takes the prompt and in the background, unseen
Speaker 9: to the user, it's kind of coming up with a
Speaker 9: bunch of different similar prompts and sorting through the problem
Speaker 9: sort of step by step, and then presenting what seems
Speaker 9: like the best answer to the user. So Google, Google
Speaker 9: has a history here. But as we know, open Ai
Speaker 9: may this flashed recently with their O one model, and
Speaker 9: Google tends to be more cautious. I mean, is it
Speaker 9: is a huge company. There's a lot of moving parts there,
Speaker 9: so we'll see what happens.
Speaker 4: It tends to be more cautious.
Speaker 3: But since chat GPT's release in November twenty twenty two,
Speaker 3: it's been a it's been a wild ride. Since there's
Speaker 3: pressure there, right, and I think the competition, they're cognizant
Speaker 3: of it. So what does that look like, the pushback
Speaker 3: to catch up I suppose against open Ai.
Speaker 9: Yeah, I mean, I think it looks like a few
Speaker 9: different things happening there.
Speaker 7: Right.
Speaker 9: Initially, when chat GPT was so popular with people, I
Speaker 9: think Google felt caught flat footed, but as and felt,
Speaker 9: you know, like, oh, we have to put something out
Speaker 9: so we can be competitive with that. But as more
Speaker 9: time has passed, I think they want to be really cautious.
Speaker 9: I mean, they have a lot of things to think about.
Speaker 9: They have so many users, and they have so many
Speaker 9: people working on different things within their company. So I
Speaker 9: think with this they're really trying to take their time
Speaker 9: and get it right. And they have some amazingly smart
Speaker 9: people that have been working on this kind of technology
Speaker 9: for a very long time, so it'll be really interesting
Speaker 9: to see what comes out of there.
Speaker 2: Haven't even discussed notebook LM yet, which is a lot
Speaker 2: of fun.
Speaker 5: Ratro Metz, thank you so much.
Speaker 2: Meanwhile, well, not everyone is bullish on aidur own a
Speaker 2: small group. Is a renowned professor at MIT, and it's
Speaker 2: not so sure that AI can deliver on the promise
Speaker 2: of an economic He wants to make clear that he
Speaker 2: does get the potential of artificial intelligence, but by his calculation,
Speaker 2: only a small percent of all jobs, a mere five percent,
Speaker 2: is right to be taken over or at least heavily
Speaker 2: aided by AI over the next decade.
Speaker 5: And what have you got.
Speaker 3: Okay, it's time for today's AI and action, and today
Speaker 3: we're taking a look at Codium, which aims to utilize
Speaker 3: AI to accelerate software development. Just last month, they raise
Speaker 3: one hundred and fifty million dollars in a series C
Speaker 3: round with evaluation of one point twenty five billion dollars.
Speaker 3: Codium CEO and co founder Varun Mohan joins us for more.
Speaker 3: Welcome to the program. A lot of people phone me
Speaker 3: and said that you've got to check out Codium, So
Speaker 3: let's start with the basics of what is Codium.
Speaker 4: Thanks for having me ed so.
Speaker 10: Codium is an AI software development toolkit that fundamentally enables
Speaker 10: developers to write software faster and review software faster. Right now,
Speaker 10: the platform has over seven hundred thousand individual developers that
Speaker 10: use the product in over one thousand enterprises, and one
Speaker 10: of the key things that we focus on is deep
Speaker 10: personalization based.
Speaker 4: On the rest of the codebase.
Speaker 10: Code is a very interdependent sort of knowledge and data source,
Speaker 10: and we try to make the responses as personalized to
Speaker 10: the private.
Speaker 4: Data inside companies.
Speaker 10: Right now, they're seeing around fifty percent of all their
Speaker 10: private code that's committed generated by Codium, as well as
Speaker 10: a twenty percent reduction in total application development time when
Speaker 10: using Codium.
Speaker 3: I'm going to make an observation and you respond to it.
Speaker 3: You have seven hundred thousand users and a thousand enterprise customers.
Speaker 3: You've raised relatively little money compared to a number of
Speaker 3: companies that raised quite a lot of money that haven't
Speaker 3: started selling anything yet or anyone using their tech.
Speaker 4: What do you make of that?
Speaker 7: So?
Speaker 4: I don't have a lot of comments on this.
Speaker 10: I previously worked in an industry autonomous vehicles, where companies
Speaker 10: were raising larger and larger amounts of money without actually
Speaker 10: developing a product, So I think this is not uncommon
Speaker 10: in a bunch of categories.
Speaker 7: What we believe in is we're in.
Speaker 10: A space that is moving incredibly fast, and the only
Speaker 10: thing that would guarantee us the ability to actually earn
Speaker 10: the right to work with large enterprises is actually shipping
Speaker 10: incredibly quickly, staying really close to the technology.
Speaker 2: Bern It's a relatively crowded space though. You've got GitHub Copilot,
Speaker 2: You've got Sam Altman telling me that his favorite thing
Speaker 2: to do on the latest version of chatchubt is to code.
Speaker 2: So how do you ensure you take market share?
Speaker 7: Yeah?
Speaker 10: I think we believe the space is going to be crowded,
Speaker 10: largely because the prize is quite large. If a tool
Speaker 10: is able to actually generate or reduce application development time
Speaker 10: by twenty percent, It would be surprising if there are
Speaker 10: only one player in the category. The way we sort
Speaker 10: of like to look at it is what can we
Speaker 10: do differentially better than other companies and compared to our
Speaker 10: biggest competitor being gethub copilot. The big thing we do
Speaker 10: is care a lot about security as well as being
Speaker 10: a platform agnostic tool. Right no, noticing a very small
Speaker 10: fraction of large enterprises standardizing on getub Enterprise Cloud, and we,
Speaker 10: on the other hand, don't really tie ourselves to any
Speaker 10: one of these platforms. In addition to that, we don't
Speaker 10: actually require a company to send their IP outside of
Speaker 10: their firewall, which is one of the things that get
Speaker 10: up copile that actually requires.
Speaker 2: Right now, Okay, so you feel you've got a unique
Speaker 2: selling point there, but you're going to keep on innovating.
Speaker 2: You told previously that you raise a load of money
Speaker 2: before and haven't actually even spent that.
Speaker 5: Why do you need this money right now?
Speaker 10: I think as we're starting to work with some of
Speaker 10: the world's largest enterprises companies like Dell, we want to
Speaker 10: make sure we're great sort of vendors to our customers,
Speaker 10: and that means continuing to invest in innovation. As you
Speaker 10: can imagine GPU costs are fairly high, but also beyond
Speaker 10: that increasing the amount of the size of our research
Speaker 10: and development organization. We just don't want to be in
Speaker 10: a position where we are working and with large companies
Speaker 10: that trust us and we actually cannot provide support to
Speaker 10: them in the best way possible.
Speaker 2: We raised sixty five million in a Series B and
Speaker 2: now just raise one hundred and fifty million a series See,
Speaker 2: you've got some money to spend on R and D.
Speaker 2: Cody and the CEO from in Mohan, thank you very
Speaker 2: much for joining us.
Speaker 5: Welcome back to Bluemotechnology.
Speaker 3: I'm Carolin Hide in New York and Imed Loveo in
Speaker 3: San Francisco.
Speaker 5: Check on these markets which have turned around here.
Speaker 2: We were trading lower at the start of this program,
Speaker 2: and now we're up some four tenths percent. You've got
Speaker 2: some of the key chip makers to thank for that.
Speaker 2: We got broad coom and video leading from our points perspective.
Speaker 2: Also digesting the latest economic data, but largely Bitcoin, also bouncing.
Speaker 5: Back from yesterday's sell off.
Speaker 2: Of course, that all about geopolitical tension to search for
Speaker 2: safety amid what was, of course the key concerns of
Speaker 2: Iran missill attacks on Israel. We now await the comeback,
Speaker 2: but we're currently improving from a market sentiment perspective.
Speaker 3: Ed some of the other single names we are watching.
Speaker 3: Ten slid down after the company posted quarterly sales coming
Speaker 3: just below estimates, but it's off its session lows. Apple's
Speaker 3: now flat. It had been down as much as one
Speaker 3: and a half percent after Bloomberg reported the company's near
Speaker 3: production of a new low end iPhone, which have come
Speaker 3: as early as next year.
Speaker 4: Let's talk about the markets.
Speaker 3: Bloomberg's jessmentton is here, I guess on a daylight today
Speaker 3: where at the index level we were treading water. Some
Speaker 3: of those megacap names, the moves are more notable DC
Speaker 3: a story when it comes to tech in markets today.
Speaker 11: There is because if you look at the MLV function,
Speaker 11: which y'all were just alluding to you, when you're looking
Speaker 11: at obviously these big tech and growth companies and their
Speaker 11: waitings in the S and P five hundred, when you
Speaker 11: do have C and Vidia as well as broadcome among
Speaker 11: the biggest point contributors to the S and P five hundred.
Speaker 11: The other side of that, though, of course, Tesla and
Speaker 11: you all have been talking about how to miss those
Speaker 11: third quarter delivery numbers there, especially some of the issues
Speaker 11: potentially with China.
Speaker 7: But that's actually the biggest point decliner.
Speaker 11: Here in the S and P five hundred, as well
Speaker 11: as some of the other names like Apple of Core,
Speaker 11: as well as Meta and Alphabet. So when you have
Speaker 11: more of the chip shares, because the socks was actually
Speaker 11: down last quarter, it snapped a streak of gains here
Speaker 11: and Evercore actually made a call for the fourth quarter
Speaker 11: going into year in that they did anticipate to see
Speaker 11: a potential rebound in those chip stocks, and you're beginning
Speaker 11: to see some of that this morning.
Speaker 5: Guys.
Speaker 2: Yeah, look at that Socks up more than two and
Speaker 2: a quarter of percent. You type in sent functions to
Speaker 2: see when that is the biggest moves in September the
Speaker 2: twenty sixth, we understand, is this just the knee jug
Speaker 2: reaction to yesterday's sell off or is this thesis changing
Speaker 2: in any way.
Speaker 11: It looks like it's basically a knee jerk reaction because
Speaker 11: that was the biggest decline in almost a month for
Speaker 11: the S and P five hundred, and then especially a
Speaker 11: lot of these chip makers, even Micron Technology ahead of
Speaker 11: its earnings report last week. Obviously it boosted a lot
Speaker 11: of other chip companies after it had reported and had
Speaker 11: that optimistic outlook. We still have a lot of time
Speaker 11: before we would hear from Video though, that's going to
Speaker 11: be well into November by that point. But when you're
Speaker 11: looking at that, a lot of those companies like Micron
Speaker 11: were trading at quite a discount there, and especially because
Speaker 11: of that, as will some of these other names in
Speaker 11: Video for instance, even once it had that stock splid
Speaker 11: back in June, I mean, it was actually underperforming Apple.
Speaker 11: So the question is moving forward, a lot of those
Speaker 11: that looked a little bit cheaper, maybe people are going
Speaker 11: back in and stepping up to buy those types of names.
Speaker 2: Now, Caroline best menton, we thank you chip companies. Thinking
Speaker 2: about something else at the moment, Global Semiconductors Make is
Speaker 2: really monitoring supplies of quartz. That's after Hurricane Helene halted
Speaker 2: production of two North Carolina mines that provide basically.
Speaker 5: Most of the world supplies for all Bloombergs. Daniel Woolman
Speaker 5: joins us to.
Speaker 2: Explain why high purity courts matters to chip makers.
Speaker 12: So I'm really glad to be here geeking out about
Speaker 12: this with you, courts is a prehistoric material. We're talking
Speaker 12: a mineral that is hundreds of millions of years old
Speaker 12: that developed at a time when there was very little
Speaker 12: water around and on the planet. And because that scarcity
Speaker 12: of water means fewer imperfections in the material, and fewer
Speaker 12: imperfections means that when it's used in this chip making process,
Speaker 12: it imparts fewer imperfections onto the eventual chip.
Speaker 3: Its role in the manufacturing process is multifaceted because you
Speaker 3: have quartz wafers, it's used in frequency control. But if
Speaker 3: there's one thing I've learned about the industry in the
Speaker 3: last few years, it's that it's quite good at stockpiling
Speaker 3: the stuff that it needs. Is that the scenario that's
Speaker 3: playing out here.
Speaker 12: Indeed, our reporters reached out to a whole bunch of
Speaker 12: major chip makers on different continents, TSMC, Samsung, sk Heinez,
Speaker 12: and all of them delivered comments to us that seemed
Speaker 12: very calm, unbothered. They all seem to for now be
Speaker 12: thriving off of these stockpiles they have. That said, to
Speaker 12: your point in the intro, these two mines in North
Speaker 12: Carolina account for about eighty percent or maybe even a
Speaker 12: little more of the global supply of courts. So really
Speaker 12: their calmness in this situation depends on the assumption that
Speaker 12: these minds will eventually and hopefully soon be able to
Speaker 12: reopen after the hurricane.
Speaker 2: It feels almost very painful that something that was focused
Speaker 2: on because of a lack of water is now prevented
Speaker 2: because of too much water and flooding in a certain area.
Speaker 2: Do we have any timeframe anything from the manufacturers in
Speaker 2: North Carolina as to when they might get back online.
Speaker 12: Our reporting doesn't really nail down a specific timeline. I
Speaker 12: think the tone right now is rosy enough. I don't
Speaker 12: want to say rosie given the circumstances, but I think
Speaker 12: the manufacturer seem confident enough at this moment that the
Speaker 12: plants will eventually reopen.
Speaker 5: Danil woman, we thank you so much.
Speaker 2: Meanwhile, it is time for talking tech and first up,
Speaker 2: KKR considering a takeover bid for chips and electronics equipment
Speaker 2: maker ASMPT It's at According to sources, KKR has made
Speaker 2: a non binding preliminary approach for the company. The move
Speaker 2: follows similar attempts in the past by other bidders. Plus Oracle,
Speaker 2: set to spend six and a half billion dollars to
Speaker 2: build out cloud service centers in Malaysia. The company hopes
Speaker 2: to establish a cloud region in the country, providing data
Speaker 2: center do corporate clients are called didn't offer timeframes or
Speaker 2: specifics of the build out, and a new law signed
Speaker 2: in the Philippines will impose a twelve percent value added
Speaker 2: tax on non resident digital service providers. Sectors set to
Speaker 2: be impacted include online search engines, advertising platforms, digital marketplaces,
Speaker 2: cloud services, and even media like Netflix, HBO and Disney.
Speaker 5: Meanwhile, coming up, we're going to be joined by the.
Speaker 2: Former president and CFO of SoftBank Group International. We want
Speaker 2: to get behind the scenes to look at how tech
Speaker 2: VC firms were behind some of the biggest deals. What
Speaker 2: does he make of ARM, What does he make of
Speaker 2: the open AI valuation? This subruebeg technology.
Speaker 3: We all know the powerhouse that is SoftBank, the tech investor,
Speaker 3: the backtor likes of ARM in video TikTok, Uber, Ali
Speaker 3: Barber and work, but we don't know as much about
Speaker 3: what goes on behind the scenes of these major deals.
Speaker 3: A new book gives us a peek into the dealings
Speaker 3: and into soft Bank's iconic founder, Masaoshi's son. It's called
Speaker 3: The Money Trap written by a Look Sama, a veteran
Speaker 3: Morgan Stanley banker and a former chief deal maker at
Speaker 3: soft Bank, and he joins us now in San Francisco.
Speaker 4: Let's start by asking, now that the book is written
Speaker 4: and out, yea, what is soft Bank?
Speaker 7: Well, first of all, thanks for having me. Great to
Speaker 7: be here. What is soft Bank?
Speaker 4: I mean, I you must know you just wrote a
Speaker 4: book about the Well, the.
Speaker 13: Name itself is a bank for software and gets back
Speaker 13: to Marsa ruts as a software distributor for Microsoft software.
Speaker 13: But soft Bank is really about Masa Yoshi Son and
Speaker 13: I consider it one of the great privileges of my
Speaker 13: life to have worked alongside him for a while, you know,
Speaker 13: kind of fancy titled aside. You know, my role really
Speaker 13: there was was chief you know, kind of deal maker
Speaker 13: in chiefs, so to speak. And U and I think
Speaker 13: the one thing I would really highlight about him, the
Speaker 13: standout characteristic is uh is he's a futurist in the
Speaker 13: true sense of the word. And and yeah that that
Speaker 13: that term visionary genius. It gets thrown around a lot,
Speaker 13: but he's pulling a time and time.
Speaker 3: It's an interesting point in sort of the mechanics of
Speaker 3: how soft Bank works. Right, it is a conglomerate. Then
Speaker 3: you have the vision fun part vision from one and
Speaker 3: two each has an investment committee. My point being that
Speaker 3: ultimately it's still in many senses, comes down to Massa
Speaker 3: making an instinctive call on whether or not to invest
Speaker 3: in something.
Speaker 4: Is that what you found?
Speaker 13: It's more than just instinctive and the answer is yes.
Speaker 13: For me at least, self Bank is all about Massa,
Speaker 13: and the standout thing about self Bank is he gets
Speaker 13: the big bits spectacularly, right, I mean, I mean stories
Speaker 13: like we work that kind of fun amusing. I talk
Speaker 13: about it too, But nobody's the movie about about for example,
Speaker 13: which is just a remarkable success story, right, and we
Speaker 13: can talk about that. And soft Bank Japan is a
Speaker 13: lesser known, low profile up. There's no reason a US audience,
Speaker 13: so US investors would be familiar with that. But it's
Speaker 13: a remarkable story. I mean, you know, people think that
Speaker 13: that Massa has come back in the in the in
Speaker 13: two thousand and six, two thousand and seven had to
Speaker 13: do with Ali Baba and Alibaba is phenomenal. But soft
Speaker 13: Bank Japan, which is a mobile phone company Voteraphone, was
Speaker 13: so desperate to get rid of it they actually lent
Speaker 13: Masa money to take it off their hands. And you know,
Speaker 13: he bought that company on the strength of a handshake
Speaker 13: from Steve Jobs to give him an exclusive for smartphones,
Speaker 13: and he kind of saw that coming.
Speaker 7: So he's made these huge bets.
Speaker 13: And by the way, these gain on that on a
Speaker 13: mark to markets basic basis on SoftBank Japan, sorry, on
Speaker 13: Votafone Japan is to the order of forty billion.
Speaker 7: On arm it's one hundred billion.
Speaker 13: So he gets these big bets spectacularly alert.
Speaker 2: You have got some spectacular misses as well, and that's
Speaker 2: the VC way you bet big. Some of them hugely payoff,
Speaker 2: others don't. But there was this moment where money being
Speaker 2: thrown at we work, money being thrown at improbable in
Speaker 2: the UK, money being thrown at wag which rent horribly wrong,
Speaker 2: a dog walking service. What makes the open Ai potential
Speaker 2: bet that we're hearing about soft Bank bringing in five
Speaker 2: hundred million, is that the right one to be throwing
Speaker 2: money at right now?
Speaker 13: Well, I'm not sure trying money is the way I
Speaker 13: described it. I think you have to keep in mind
Speaker 13: that in the Masters is he's been fascinated by AI.
Speaker 7: He was talking about.
Speaker 13: This when I first got to know him back in
Speaker 13: twenty fourteen, and I described this in that book, sitting
Speaker 13: on his porch and his home in Tokyo, and you know,
Speaker 13: he was talking about obsessively about AI, about singularity and
Speaker 13: what would mean from a technology perspective, and I honestly
Speaker 13: I didn't take him seriously at the time. So it's
Speaker 13: it's and he's been very clear now it is.
Speaker 7: I think in.
Speaker 13: June at his AGM, he announced that everything we've seen
Speaker 13: before is a warm up deck, so he's ready to
Speaker 13: make some some He's ready to make some big moves.
Speaker 7: And that's a long winded way of answer your question.
Speaker 13: I mean, you look at soft Bank and the scale
Speaker 13: on which it operates. I think it's sitting on certainly
Speaker 13: north of thirty billion, probably close it a forty billion
Speaker 13: in cash, so A I don't I don't think of
Speaker 13: a five hundred million in open AI as a big
Speaker 13: bet by soft Bank standards. I think it's it's a
Speaker 13: it's it's it's it's sort of.
Speaker 7: Being in the game, so to speak.
Speaker 13: I mean, I'm kind of waiting for Sonson to make
Speaker 13: his next big move. And it will be big. Knowing him,
Speaker 13: that's just just that's just the way he wrotes to what.
Speaker 2: End paints us the vision Therefore, because we too have
Speaker 2: heard the AI thesis, this is why the deal that
Speaker 2: you helped orchestrate was first the target.
Speaker 4: But to what end?
Speaker 5: What does he build eventually?
Speaker 2: Because sometimes he's purchasing with soft Bank, sometimes he's purchasing
Speaker 2: with the vc ARM.
Speaker 13: Well, let's be clear, the first vision fund was a
Speaker 13: true fund inasmuch as it involved third party.
Speaker 7: Money mainly from the Middle East.
Speaker 13: The other Vision funds are on balance sheet, so you know,
Speaker 13: the the subtlety of soft Bank versus the vc ARM
Speaker 13: to me, it's it's it's it's not meaningful in that context, right,
Speaker 13: I mean, so, for example, when you read about soft
Speaker 13: Bank buying Graphcore, my understanding is that's a strategic deal.
Speaker 13: In what Sonson intends to do with that in conjunction
Speaker 13: with his ownership of ARM, you know, I think, I
Speaker 13: think remains to be seen. But talking about vision again,
Speaker 13: I mean I speak is I've been out a soft
Speaker 13: Bank for five years now, so I'm obviously not an insider.
Speaker 13: But but you know, in terms of what I see,
Speaker 13: first of all this ARM ARM is and I don't
Speaker 13: follow stocks. I'm not a research analyst, so I'm not
Speaker 13: going to comment on the valuation. But ARM for me
Speaker 13: is remarkably well positioned as AI moves to the edge
Speaker 13: of the network. ARM has always been about blueprints for
Speaker 13: chip design. Energy efficiency has always been their secret source.
Speaker 13: And when you get to the edge, you know AI,
Speaker 13: you know, with Apple Intelligence and smartphones and autonomous cars,
Speaker 13: that gets to be really really important. I think that,
Speaker 13: you know, I think the graph Core acquisition is a
Speaker 13: signal at and I think the company has been pretty
Speaker 13: explicit about it that that that ARM intends to be
Speaker 13: a challenger to to in video in terms of Individia's
Speaker 13: dominances in data centers, So ARM intends to to challenge
Speaker 13: in video in that regard to So there's a lot
Speaker 13: of that going on.
Speaker 7: My own view of AI.
Speaker 13: Uh, you know, I do spend a fair bit of
Speaker 13: time with Warber Pinkers as a senior advisor, and what
Speaker 13: they're seeing They've avoided getting into the you know, l
Speaker 13: l ms, but but they've been you know, what they're
Speaker 13: seeing is AI very folk push on their portfolio and
Speaker 13: the implications for deploying AI margin Improumus. Jensen want talked
Speaker 13: about it in his last earnings release. I mean he
Speaker 13: gave the example of m ducts and a thirty percent
Speaker 13: reduction in customer service cars by deploying an AI agent,
Speaker 13: So that that stuff is very, very real.
Speaker 4: Let me ask you saying end conversation.
Speaker 3: They were in early in nvideo SoftBank, but then they
Speaker 3: got out early and threw that, Yeah, five hundred million
Speaker 3: in open AI may not be big. You said that
Speaker 3: they will make their next big bet. How do you
Speaker 3: know that he'll time it right and that in the
Speaker 3: end with AI, whatever happens, he'll be a part of whatever.
Speaker 4: The conversation we're having is.
Speaker 7: What Because the track record speaks for itself. He's done
Speaker 7: it over and over again, right.
Speaker 13: I mean, I think with smartphones he was at least
Speaker 13: two to three years ahead of it. I don't know
Speaker 13: what his next big move will be, but I do
Speaker 13: know it's going to be big, and I think he's
Speaker 13: come out and said it will be something to do
Speaker 13: with AI and it may well involve me. Look, I
Speaker 13: mean energy is another space by soft Bank Energy. Enough
Speaker 13: money people get this, but soft Bank Energy is one
Speaker 13: of the leading solo bar generators and that, as we know,
Speaker 13: is a huge bottleneck in terms of the built out
Speaker 13: of these data centers, I mean the hugely power hungry,
Speaker 13: so could be something in that space, for example.
Speaker 5: Alo Summer.
Speaker 2: We thank you so much for spending some time with
Speaker 2: our senior advisor at Wilbert Pinker's former presidency of a
Speaker 2: SoftBank Group.
Speaker 5: International.
Speaker 2: Interest has just launched Performance Plus ahead of the holiday season.
Speaker 2: It's a new suite of AI and jen Ai tools
Speaker 2: to help advertisers optimize targeting, drive results.
Speaker 5: Hit explain as pinterest CEO Bill Ready, And I'm assuming
Speaker 5: the better.
Speaker 2: Efficiency and targeting for advertisers means more repeat advertisers on
Speaker 2: your platform.
Speaker 14: Yeah, that's exactly right, Caroline.
Speaker 15: You know, we just had pinterest Presents yesterday, which is
Speaker 15: our annual marketing event for advertisers, and a record turnout
Speaker 15: for that. And really at the core of that is
Speaker 15: that over the last two years, we have transformed Pinterest
Speaker 15: from a place that was just digital window shopping to
Speaker 15: a place where people are actually clicking and buying and shopping,
Speaker 15: you know, directly with retailers, and that's given us our
Speaker 15: best product market fit ever with users. But it's also
Speaker 15: cutting through for advertisers where we have more than double
Speaker 15: the number of clicks to advertisers a year on year
Speaker 15: for three consecutive quarters. And as we're bringing them great
Speaker 15: AI driven ad tools, it's like more and more advertisers
Speaker 15: take advantage of that.
Speaker 4: You're brought on.
Speaker 2: Because your expertise and commerce and payments and a whole
Speaker 2: wealth at Google. I'm interested Bill as to where the
Speaker 2: clicks are being made, which products, which demographic you serve well.
Speaker 15: So that's a great question, Caroline, because we have really
Speaker 15: become the place that gen Z goes to shop. So
Speaker 15: we have more than forty percent of our users our
Speaker 15: gen Z and it's our largest, fastest growing demographic. And
Speaker 15: gen Z states that the number one reason they go
Speaker 15: to pinterest is for shopping, and more than sixty percent
Speaker 15: of them say that they're always shopping. So when you
Speaker 15: think about the rise of gen Z, where they're buying
Speaker 15: power is just growing tremendously. In fact, over the next
Speaker 15: five years, gen Z is predicted to bypass Baby boomers
Speaker 15: in buying power over the next five years. And Pinterest
Speaker 15: is where gen Z goes to shop, and so obviously
Speaker 15: a great place for advertisers to meet that really important
Speaker 15: growing audience.
Speaker 3: Bill, do you have a sense for this upcoming holiday
Speaker 3: season if what the biggest funnel.
Speaker 4: For you will be, or at least who you will
Speaker 4: help the most.
Speaker 3: You and I have talked a lot about the relationship
Speaker 3: with Amazon, for example, but also some of the other
Speaker 3: names from China are becoming increasingly important for you.
Speaker 15: Yeah, So we're really broadening our reach with advertisers. So
Speaker 15: as we opened up the stores on our platform, we
Speaker 15: saw the largest, most sophisticated advertisers lean in first, which
Speaker 15: is great because they're the hardest to please, the most discerning.
Speaker 15: But what we're seeing now is that that's really widening,
Speaker 15: and when with Performance Plus and those AI driven tools,
Speaker 15: it's really making it easier for a broader set of
Speaker 15: advertisers to take advantage where it gives them automated campaign creation,
Speaker 15: automated creative and so we're seeing big advertisers win. For example,
Speaker 15: Walgreens is seeing a fifty five percent improvement and click
Speaker 15: through rate by using our generated backgrounds so the products
Speaker 15: look more attractive, so you can see that shampoo or
Speaker 15: that hand soap and what your bathroom might look like.
Speaker 15: But we're also seeing as we go down to smaller
Speaker 15: up and coming advertisers like Ruggables, which is a really
Speaker 15: fantastic home goods company. We are now their largest traffic
Speaker 15: source by volume and efficiency, literally driving three times the
Speaker 15: clicks at half the costs. So these AI driven tools
Speaker 15: are really broadening out the set of advertisers on our platform.
Speaker 3: Bill we've been taking a lot about augmented reality. Check
Speaker 3: out my piece on metas o Ryan, will Pinterest make
Speaker 3: investments in hardware for AR or partner with meta snaping
Speaker 3: span what you're doing?
Speaker 15: We're not a hardware platform, but we are seeing that
Speaker 15: we have become increasingly a destination for our users. More
Speaker 15: than eighty percent of our usage is people coming to
Speaker 15: our mobile app directly, and that usage increasingly is more
Speaker 15: than half our easier here to shop, This even more
Speaker 15: so with gen z. So I think as you look
Speaker 15: at these visual exploration journeys, this is really where pinterest
Speaker 15: is winning that on visual exploration.
Speaker 14: Visual search shopping is inherently a visual journey.
Speaker 15: So these kinds of things are really where Pinterest stands out,
Speaker 15: and we see users coming to us directly for that increasingly.
Speaker 5: Are you llm agnostic?
Speaker 2: What's the underlying technology driving these innovations.
Speaker 14: Yeah, great question. So you know, AI has become a
Speaker 14: core competency for us.
Speaker 15: I've talked about previously how when we move to GPU
Speaker 15: serving in large models, you have models one hundred times
Speaker 15: larger than what they were two years ago. That gave
Speaker 15: us a ten percentage point lift in real andy of
Speaker 15: our recommendations. But the AI is only as good as
Speaker 15: a signal upon which it's acting, and what we have
Speaker 15: is really unique signal where, unlike other platforms, users come
Speaker 15: to Pinterest and curate their taste, how's that handbag going
Speaker 15: to look with that dress, with this pair of shoes,
Speaker 15: and hundreds of millions of users do that every day,
Speaker 15: and so that gives us really unique signal to say,
Speaker 15: what's a great recommendation not just for that user but
Speaker 15: for other users. So when we're training models, we're training
Speaker 15: on completely unique signal to our platform. We actually see
Speaker 15: that when we test llms off the shelf from major
Speaker 15: LM providers, we actually see that when that same LLM
Speaker 15: is tuned on our signal, we get three hundred basis
Speaker 15: points of additional engagement from our unique signal, which really
Speaker 15: makes tangible how unique our signal is relative to what
Speaker 15: these lms have elsewhere.
Speaker 5: Interesting CEO Phil Ready, We thank you for your time.
Speaker 5: Now that does it for this edition of BlueBag Technology ED.
Speaker 4: Check out the podcast you know where to find it.
Speaker 4: This has been bad technology