Speaker 1: From the heart where Innovation of Money and power.
Speaker 2: Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: Live from New York and San Francisco. This is Bloomberg
Speaker 3: Technology coming up. TSMC SAWS as the chipmaker hikes its
Speaker 3: revenue outlook, AI hardware exuberance is it back?
Speaker 4: Plus Meta's new effort to stop set stortion across Instagram,
Speaker 4: a first look at the campaign Mate to keep Team
Speaker 4: safe across its platforms.
Speaker 3: And Amazon embraces nuclear power to insurance AI energy needs
Speaker 3: and met awsco joins US Live with details on the
Speaker 3: clean energy effort. But first I've got to check out
Speaker 3: the TSMC trade.
Speaker 4: D Yeah, TSMC is off top story Taiwan Semiconducts and Manufacturing.
Speaker 4: These are the ADRs the US listed shares.
Speaker 2: They are up big.
Speaker 4: In fact, the shares are trading at their highest level
Speaker 4: since nineteen ninety seven, when they first started trading in
Speaker 4: the United States. The outlook for revenue growth for twenty
Speaker 4: twenty four is boosted about thirty percent in dollar terms.
Speaker 4: And the big picture, Carro, is that we kind of
Speaker 4: feel better about the outlook for the chip industry in general,
Speaker 4: why TSMC is the contrat manufacturers to the world. They
Speaker 4: make the most important chips that we care about, namingly
Speaker 4: those high performance GPUs in the AI context and.
Speaker 3: Post ASML, we had a lot of anxiety around hardware
Speaker 3: and chip making, but doesn't seem like it's there right
Speaker 3: now because most Peter Elstrong can join us from London
Speaker 3: for more and Peter just give us that context. What
Speaker 3: TSMC manages to prove to the market that really echoing
Speaker 3: in video the demand is insatiable.
Speaker 5: That's right, Kirolin, As you alluded to, all eyes were
Speaker 5: on TSMC for this ASML report. The Dutch equipment company
Speaker 5: came out and it said that bookings in the chip
Speaker 5: industry were only about half of what analysts had been expecting.
Speaker 5: And that really started the industry and Vidia stock was
Speaker 5: down and everybody was wondering who is the weak player
Speaker 5: in the industry, which company is, which chip company is struggling,
Speaker 5: And now we know it's not TSMC. TSMC has done
Speaker 5: very very well here. They boosted their guidance, they beat
Speaker 5: earnings estimates, and they reassured the market really that demand
Speaker 5: for AI in particular is very very strong.
Speaker 1: At this point. CC way.
Speaker 5: The CEO got a lot of questions in the call
Speaker 5: after results about that, and he said that the demand
Speaker 5: is real. He called it insane at one point. He said,
Speaker 5: it's very very strong at this point. So that's there's
Speaker 5: a reassurance play that's going on here too.
Speaker 4: Piter TSMC boosted its capital expenditures outlook for twenty twenty five.
Speaker 5: Why is that important, Well, it's partly important because ASML
Speaker 5: is the company that sells the chip making machines to
Speaker 5: all these companies. TSMC is the most advanced producer of
Speaker 5: these chips, and so there's a question about who's going
Speaker 5: to buy these machines from ASML and then others in
Speaker 5: the industry. We know that a couple of the key
Speaker 5: players are struggling right now. Intel and Samsung are both
Speaker 5: having quite a bit of trouble. TSMC appears to be
Speaker 5: doing very well, partly because of AI to Nvidia. They
Speaker 5: also supply the chips to Apple, which is trying to
Speaker 5: sell its phones in part because of their AI capabilities.
Speaker 1: So we're seeing this.
Speaker 5: Bifurcation in the market right now where you have some
Speaker 5: week players, some struggling quite a bit, and then you
Speaker 5: have some like TSMC, like in Nvidia, like s Kahnix
Speaker 5: in Korea too, that are doing very.
Speaker 3: Well, and TSMC committing to capital expenditure globally. Right they're
Speaker 3: going to be building out manufacturing, not just in Asia
Speaker 3: where you usually sit.
Speaker 1: That's a very important point.
Speaker 5: For many decades, TSMC only produced its chips within Taiwan.
Speaker 5: It felt it was easier to kind of concentrate all
Speaker 5: its production in one place. And over the past few
Speaker 5: years we've seen that business model really evolve where they've
Speaker 5: been asked by the US, by Europe, by Japan too
Speaker 5: to build these chip making plants in their domestic markets,
Speaker 5: probably because of the supply chain sharks that we saw
Speaker 5: during the COVID pandemic. While these countries want to make
Speaker 5: sure that they can get those chips, TSMC is the
Speaker 5: best chip maker out there, so they want TSMC to
Speaker 5: come to the United States, to Japan, to Europe and
Speaker 5: beyond to try to make those chips and make sure
Speaker 5: that they're being produced locally.
Speaker 1: So far, that model seems to be working pretty well.
Speaker 4: Bloomberg's Peter Elstrom, who's the executive editor leading our tech
Speaker 4: coverage from Asia, hours into Europe, now into the US,
Speaker 4: and by the way, one of the names up big
Speaker 4: on the same logic is in Nvidia caro another top
Speaker 4: story you've got.
Speaker 3: Yeah, look at Nvidia at a new record high. Let's
Speaker 3: switch to Apple now, because secretly it had worked with
Speaker 3: Chinese auto make a BYD four years. According to Bloomberg's sources,
Speaker 3: the tech giant partner with BYD to develop long range
Speaker 3: EV batteries as part of what it's now canceled car
Speaker 3: project Nimbos. Gabrielle Coupler is with us and Gabby the
Speaker 3: context here is a wonderful big take that you have
Speaker 3: going into the BYD success story. But just take us
Speaker 3: to the Apple relationship and would it helped BYD.
Speaker 6: Achieve sure, thank you.
Speaker 7: You know, I want to be clear, I think this
Speaker 7: was really a two way street, you know. I think
Speaker 7: BYD and like a lot of battery makers in China
Speaker 7: had been working with the new chemistry called LFP lithium
Speaker 7: iron phosphate and they had made a battery cell that
Speaker 7: was really impressive in terms of its safety metrics, its
Speaker 7: resistance you know to fire risks, but also could hold
Speaker 7: a lot of energy. Meanwhile, Apple was working on the
Speaker 7: Apple car and they were working on a design for
Speaker 7: a pack to have an EV they would have maximum range.
Speaker 7: That was one of their kind of key targets for
Speaker 7: that project. And these two companies came together from about
Speaker 7: twenty seventeen to twenty twenty and kind of put their
Speaker 7: best and brighters together to work on a battery that
Speaker 7: would be best in class for the Apple car. Now, ultimately,
Speaker 7: as we know, Apple pulled the plug on that project
Speaker 7: earlier this year. Meanwhile, BYD, which took that you know
Speaker 7: work that hit it, are you know its own IP.
Speaker 7: I want to be very clear, BYD did comment to
Speaker 7: us that there is no Apple IP in its own
Speaker 7: famous blade battery. But today you look at all the
Speaker 7: cars that BYD is selling, every single one of them
Speaker 7: has this blade battery in there. It was a game
Speaker 7: changer for the company. It's what helped them improve their
Speaker 7: sales really rocket from being kind of a nobody and
Speaker 7: also ran in the China market to being the number
Speaker 7: one in the world's biggest car market. And what my
Speaker 7: colleague and i am Mark German, uncovered is that there
Speaker 7: was some influence from Apple in that journey. I don't
Speaker 7: want to take away anything from BID because they themselves
Speaker 7: are a very innovative company, but we did the world
Speaker 7: did not know. We thought this was all something that
Speaker 7: went on in the labs and BID and Shanjen, and
Speaker 7: that's not the case. There was a lot of collaboration
Speaker 7: between Apple and BID.
Speaker 4: Right, really important piece of reporting about BYD's prowess in
Speaker 4: batteries and history and batteries. And then there's the electric
Speaker 4: vehicle side, specifically in the cheaper categories, and that's the
Speaker 4: whole point of the big take thought. With the basics,
Speaker 4: what is the conclusion you reach about BYD and it
Speaker 4: strides globally.
Speaker 7: I would say that my biggest takeaway from reporting this
Speaker 7: story over the last few months is that if you
Speaker 7: want to understand why BYD is the biggest car maker
Speaker 7: in China, why they can make cars that are have
Speaker 7: such impressive technology and yet such a low cost that
Speaker 7: truly terrifies auto executives all around the world, whether they're
Speaker 7: in Tokyo, Wilsburg, or Detroit, you've got to understand that
Speaker 7: the story is much more complicated than subsidies. Obviously, right
Speaker 7: now we're in the middle of a really intense period
Speaker 7: of trade war and tariffs with the US and China,
Speaker 7: with Europe, and China. And there's a lot of rhetoric
Speaker 7: going around about, you know, how subsidies or what's making
Speaker 7: these companies grow, and I don't want to deny that
Speaker 7: at all. China is not a free market economy. The
Speaker 7: level of subsidy. People always say, yeah, well the US
Speaker 7: has subsidy two or the EU s subsidies two. That's true,
Speaker 7: but the scale of subsidies in China is much greater
Speaker 7: than any other freemark market, democratic country. So having said that,
Speaker 7: if it was just subsidise, you would see twenty buids,
Speaker 7: whereas there's only one. And that is really a testament
Speaker 7: to the innovation, the engineering breakthroughs, the determination, the kind
Speaker 7: of stick it to it. This of the founder, Juan Chuanfu,
Speaker 7: And that's really what I try to tell in this story.
Speaker 4: Bloomberg's Gabrielle Coppola, thank you so much for joining us
Speaker 4: on Bloomberg Technology. Now coming up, Instagram sets launch a
Speaker 4: new campaign meant to keep team safe from sextortion scams.
Speaker 4: We have metas head of Global Safety here on the program.
Speaker 4: This is Bloomberg Technology.
Speaker 3: Now let's turn to Instagram, whose parent company Meta has
Speaker 3: today launched a new campaign meant to help protect teams
Speaker 3: on its platform. The campaign raises awareness of sextortion and
Speaker 3: includes this.
Speaker 8: Ad Let's talk about sex stortion. That's when someone threatens
Speaker 8: to a expose a sexual image or video to get
Speaker 8: you to do something like send money. Here are some
Speaker 8: red flags to look out for someone coming on too strong,
Speaker 8: asking to trade photos.
Speaker 2: Or move to another app.
Speaker 3: I had to talk more about the changes is I'm
Speaker 3: taking any Davis Physic, Global head of Safety for Meta
Speaker 3: and it's not just the ad campaign or crisis line,
Speaker 3: but there's also product features updates. Can you talk us
Speaker 3: through them?
Speaker 1: Yeah?
Speaker 6: Absolutely.
Speaker 9: I'll give you three of the most compelling features. So
Speaker 9: one is the prevention of screenshots. So if you send
Speaker 9: a view once image or video, we're going to prevent
Speaker 9: somebody from screenshotting that image or recording that video. That's
Speaker 9: important because you're sending a signal that you want to
Speaker 9: protect that image and you don't want someone sharing that
Speaker 9: with somebody. The other is blocking the follow requests of
Speaker 9: potentially scamming accounts.
Speaker 6: This is important because we already block.
Speaker 9: Suge requests even from just unconnected accounts for teens, but
Speaker 9: we want to make sure that we're closing down the
Speaker 9: avenues for these scammers to try to find teens on
Speaker 9: the platform, and then the other one is hiding the
Speaker 9: follower and following lists of teens from these potential scammers.
Speaker 9: The reason that's important is because once they have that image,
Speaker 9: they threaten to share with a friends and family that
Speaker 9: they find on those lists.
Speaker 4: And TIGGINGI why is the campaign being launched today and
Speaker 4: not previously a year ago when data showed spikes in
Speaker 4: this kind of activity that you're now trying to prevent
Speaker 4: and crack down on.
Speaker 6: Yeah, thank you very much.
Speaker 9: This is building on initial additional protections that we had
Speaker 9: already launched. So recently we launched teen accounts that put
Speaker 9: teens automatically into private accounts and have our strictest messaging restrictions.
Speaker 9: This is taking it another layer out and it reflects
Speaker 9: a change in the crime. It's moved to becoming a
Speaker 9: financial crime where people ask for more money, and with that,
Speaker 9: there's been a spike of this across the Internet.
Speaker 4: And taken how's the technology changed if there's a change
Speaker 4: in the crime. What my colleague Olivia Carville reported, for example,
Speaker 4: was in the case of Facebook in Nigeria, for example,
Speaker 4: technologies used to as accounterance to suspicious activity. So you
Speaker 4: have the video which we showed, But what's the role
Speaker 4: of technology here.
Speaker 6: Yeah, it's a very very good question.
Speaker 9: The technology tries to identify potentially scamming accounts, and they'll
Speaker 9: do things like they see a new account that.
Speaker 6: Sends a lot of follow requests to a.
Speaker 9: Team that is outside of the teens, that are outside
Speaker 9: of the area where that initial individual is messaging from
Speaker 9: or following from.
Speaker 6: Those are the kinds of signals we use.
Speaker 9: We use a large range of signals to identify these
Speaker 9: scamming accounts potentially scamming. They're not scamming if they're scaming,
Speaker 9: or we're going to remove them, but potentially scamming accounts.
Speaker 3: You'll of course helping hide from these potentially scamming accounts.
Speaker 3: Why not let a teen just hide full stop their
Speaker 3: followers and who they follow.
Speaker 6: Well, it's a good question.
Speaker 9: These are features that are important for connecting and finding
Speaker 9: the people that you're interested in, and we want to
Speaker 9: protect those valuable features for enjoying the app, but we
Speaker 9: want to find ways to make sure that they can't
Speaker 9: be exploited by these scammers.
Speaker 3: You, I'm sure face countless questions and indeed, your company
Speaker 3: and others face countless lawsuits now from families, from authorities
Speaker 3: that feel that what you offer in social media is
Speaker 3: harmful for children, whether indeed it's sextortion or indeed addiction.
Speaker 3: How are you fighting those fights? How do you feel
Speaker 3: that it's coming to you at a lawsuit perspective.
Speaker 9: Well, from my perspective, the thing that's most important is
Speaker 9: to listen to parents and understand what it is that
Speaker 9: they're worried about and make sure that they feel that
Speaker 9: we can that we have the protections that give them
Speaker 9: the peace of mind.
Speaker 6: So we know, for example, parents.
Speaker 9: Are worried about the amount of time that teens are
Speaker 9: spending on the platform. So when we launch teen accounts,
Speaker 9: we've now created it so that between ten pm and
Speaker 9: seven am, they're not getting notifications to their account and
Speaker 9: we're sending an auto apply saying hey, this is time
Speaker 9: for sleep and tikenny.
Speaker 4: I'm interested in the audience you're trying to protect and
Speaker 4: how they use the technology you have. The family of
Speaker 4: apps largely smartphone centric, but sometimes they're accessed through a
Speaker 4: web browser right on the computer. How do you adjust
Speaker 4: your technology and your policy for that, How people actually
Speaker 4: access your applications.
Speaker 9: That's a really good question. One of the things that
Speaker 9: I can give you an example of is for screenshotting,
Speaker 9: So we are now preventing screenshots. As I mentioned, for
Speaker 9: certain types of image sharing on the browser, you can't
Speaker 9: really prevent that screenshot, so we're just preventing them from
Speaker 9: actually sharing seeing the image.
Speaker 3: I go back to the point that you say you're
Speaker 3: listening to what parents and I'm ge I'm sure some
Speaker 3: teams are saying to you, what about as you see
Speaker 3: these legal efforts proceeding, do it in your heart of heartsfield,
Speaker 3: enough is being done for the parents, for the teams
Speaker 3: using it? And do you think the legal way in
Speaker 3: which they're pursuing the claims is the right way for them.
Speaker 6: To try and make change.
Speaker 9: I think one of the things that parents are struggling
Speaker 9: with is a set of standards that they can understand
Speaker 9: for assessing whether their team should use a particular app.
Speaker 9: One of the things that we've been pushing for is
Speaker 9: legislation that would require the operating system or the app
Speaker 9: store to provide apps like ours with the age of
Speaker 9: the user. That would enable us to ensure that we
Speaker 9: can provide an age appropriate experience, and they could also
Speaker 9: set it up so that parents can not approve of
Speaker 9: an app download if they want to. These are the
Speaker 9: kinds of things we need to make it much simpler
Speaker 9: for parents.
Speaker 3: I'm Tikenny Davis thanks to spending out some of the
Speaker 3: changes for those parents and teens. Today, head of Global
Speaker 3: Safety for Meta.
Speaker 4: Big Tech is going nuclear in order to secure the
Speaker 4: energy needed to fuel AI. Here's what Google's senior director
Speaker 4: of Climate and Energy told us yesterday on Bloomberg Technology.
Speaker 10: The world needs more carbon free energy and this agreement
Speaker 10: that we've signed with Cairos is an important milestone in
Speaker 10: what's been a fifteen year journey at Google to make
Speaker 10: the transition to clean energy. It's our first nuclear energy deal,
Speaker 10: and we feel that nuclear is a very important technology
Speaker 10: for going carbon free for officers, data centers, communities where
Speaker 10: we operate because it's an always on carbon free energy resource.
Speaker 4: Google's not the only one. Amazon also announcing half a
Speaker 4: billion dollar investment in nuclear clean energy. Here to discuss it,
Speaker 4: Matt Garman, CEO of AWS, and Matt, welcome back to
Speaker 4: Bloomberg Technology. It's so interesting to see that. Thank you
Speaker 4: to see the hyperscala Is so focused on this. I
Speaker 4: think we start with y SMRs, right, that's a very
Speaker 4: specific avenue to go down.
Speaker 2: Yeah.
Speaker 11: I think SMRs are a great new technology and they're
Speaker 11: an important part of the energy landscape that we're looking at.
Speaker 11: We made a five hundred million dollar investment in a
Speaker 11: company called X Energy that are really I think they're
Speaker 11: one of the leaders in this space, and they're really
Speaker 11: pushing on the technology SMRs.
Speaker 2: They have a couple of advantages. They're able to be.
Speaker 11: Constructed in a smaller footprint, which means you can put
Speaker 11: them closer to where the energy needs to be. They're
Speaker 11: also incredibly safe and easily manufactural, and so they're very
Speaker 11: promising technology and we're quite excited about our investments in
Speaker 11: this space and the partnerships that we have coming up.
Speaker 3: Small modular reactors SMRs For those getting in the acronym lingo, Matt,
Speaker 3: it's great to have you. What about other deals, I mean,
Speaker 3: is this the first of many?
Speaker 11: Yeah, and so a couple of details on the things
Speaker 11: that we announced yesterday. One, we have this investment with
Speaker 11: x Energy, who's a producer of these, but we also
Speaker 11: have have announced two partnerships with utilities and so we're
Speaker 11: actually well down the path, ongoing and actually implementing some
Speaker 11: of these deals. So we have a partnership with Dominion
Speaker 11: in Virginia to go implement an SMR as part of
Speaker 11: their energy footprint here in Virginia and with Energy Northwest
Speaker 11: in Washington and Oregon, and our goal is to deliver
Speaker 11: more than five gigawatts of nuclear energy. We think that
Speaker 11: it's a fantastic opportunity for us to keep pushing on
Speaker 11: the carbon energy footprint that's needed as we continue to
Speaker 11: scale around the country.
Speaker 4: Matt, if you're well down the path and based on
Speaker 4: what you just said, do you have a clear line
Speaker 4: of sight on what the dollar per mega what hour
Speaker 4: is going to be out of those facilities.
Speaker 2: We don't know that yet.
Speaker 11: We're still we are still early and we're still learning
Speaker 11: many of these technologies for these reactors or probably won't
Speaker 11: come online until twenty thirty, so we'll still be learning there.
Speaker 2: But we feel that as we.
Speaker 11: Scale and in the fullness of time, these energy are
Speaker 11: going to be quite competitive from a cost perspective, and
Speaker 11: it's one of the reasons that we're so excited about them.
Speaker 4: Would you bring back a full nuclear plant like three
Speaker 4: mile Island in Pennsylvania. And if so, which.
Speaker 11: One, well, I wouldn't have done that one in particular.
Speaker 11: But we actually have a partnership with Talent where we're
Speaker 11: bringing more energy online in Pennsylvania, and that's we're actually
Speaker 11: the very first company to announce a deal with Talent
Speaker 11: several months ago. And so I think that some of
Speaker 11: these large nuclear plants are also excellent source of energy
Speaker 11: and they're an important part of that. As I said,
Speaker 11: I think small modular reactors are going to be a
Speaker 11: component of what we need for a carbon free energy world,
Speaker 11: but large nuclear plants are going to be an important
Speaker 11: part of that too. And we've said that we'll take
Speaker 11: as much as almost a gigawot of power that we're
Speaker 11: bringing back online from this large plant in Pennsylvania, where
Speaker 11: we'll also be building data centers nearby. So I think
Speaker 11: it's all an important part of the portfolio as we
Speaker 11: move to decarbonized the energy.
Speaker 3: Let's talk about the decobonization, because back when you announce
Speaker 3: that deal in March with Susquehanna, you talked about how
Speaker 3: still the aim is to be by twenty twenty five
Speaker 3: one hundred percent renewable energy. Is that attainable with a
Speaker 3: sudden desire to have AI and the energy that goes
Speaker 3: with it.
Speaker 2: Yeah.
Speaker 11: In fact, we announced that this year we hit one
Speaker 11: hundred percent carbon free energy in our systems, and I
Speaker 11: think that now our goal is how do we, as
Speaker 11: we look at all of the energy demands that the
Speaker 11: business and the world frankly needs, how do we get
Speaker 11: to a continued path on growing carbon free energy. And
Speaker 11: so that's what a lot of these deals are about,
Speaker 11: is for the future. As we look at power that
Speaker 11: we're going to need in twenty five, twenty seven, thirty,
Speaker 11: twenty forty, how do we make sure that we have
Speaker 11: a ramp of power so that as the energy needs grow,
Speaker 11: whether they're from electric vehicles or from companies increasingly digitizing,
Speaker 11: or from generative AI, that we have enough carbon free
Speaker 11: energy to support them. And so it's really a long
Speaker 11: term view that we have, and part of this is
Speaker 11: is on that long term view, how we continue to
Speaker 11: have enough power well into the future.
Speaker 6: Let's talk about.
Speaker 3: Short term view if we come for a minute, Matt though,
Speaker 3: because right here, right now, do you have the power
Speaker 3: that is necessary from the places you want to be
Speaker 3: getting it from.
Speaker 2: We work really hard to make sure that we do.
Speaker 11: Our businesses continuing to grow rapidly, and we're adding new
Speaker 11: power and new data centers all of the time, and
Speaker 11: so we.
Speaker 2: Continue we look further out.
Speaker 11: We have power that we're adding in twenty four, power
Speaker 11: that we're adding in twenty twenty five, and continue out.
Speaker 11: And as you may have heard, over the last five years,
Speaker 11: Amazon has been the single biggest purchaser of renewable power
Speaker 11: contracts in the world every year for the last five years,
Speaker 11: and so we continue to do that. We continue to
Speaker 11: add power to our footprint, and we plan multiple years
Speaker 11: out because these projects that we go and launch they
Speaker 11: take many years to come online, and so we have
Speaker 11: lots of plans and we continue to grow as the
Speaker 11: needs of our customers grow.
Speaker 4: Matt, will you have any Blackwell online by the end
Speaker 4: of this year?
Speaker 5: No.
Speaker 11: Unfortunately, in Video's timelines have shifted on that, and so
Speaker 11: we have samples in the lab and we're working on
Speaker 11: them right now. But production qualities are production quantities we
Speaker 11: expect to be early next year. We work very closely
Speaker 11: with in Nvidia on GBUS and super excited about that launch.
Speaker 11: And in Video's own large research cluster is actually launching
Speaker 11: in AWS, so we'll have the first production qualities will
Speaker 11: be in AWS when they're ready.
Speaker 2: But so right now we're working with them and we have.
Speaker 11: Early samples, but as they get their yields up from
Speaker 11: the respind of the Blackwell chip, it'll probably be early
Speaker 11: next year before we really get production samples in real volume.
Speaker 3: Another partnership, then Anthropics work on the chips. How is
Speaker 3: that going?
Speaker 11: Briefly, fantastic. Anthropic continues to deliver fantastic new models. Their
Speaker 11: Sonnet three to five model is one of the most
Speaker 11: powerful ones that is out there today and customers are
Speaker 11: really enjoying using it on a variety of tasks. I
Speaker 11: think the reasoning is industry and world class and a
Speaker 11: bunch of the capability that enterprises are able to deliver
Speaker 11: and the value they get from those models is really right.
Speaker 11: It's fun to watch and we really enjoy that partnership
Speaker 11: and we continued expected to go for a long time.
Speaker 3: Matt Carmen, AWS CEO, we appreciate your time. Thank you.
Speaker 3: Welcome back to Melumow Technology. I'm carolinehid in.
Speaker 4: New York and Imed love Low in San Francisco. Let's
Speaker 4: take a quick check on the markets and actually carried
Speaker 4: the s and P five hundred is off its session high,
Speaker 4: but at one point in the session reached an all
Speaker 4: new time high on an interday basis. Technology has a
Speaker 4: part to play in that right. There are many names
Speaker 4: moving to the upside in VideA you will not be
Speaker 4: surprised to hear is one of them. And part of
Speaker 4: that is and carry through on the optimism around TSMC's
Speaker 4: guidance that updated revenue growth outlook. We talked about it earlier,
Speaker 4: so if you're just joining us, those are TSMC's US
Speaker 4: listed shares. This is the contract manufacturer of chips to
Speaker 4: the world, and what they said is, yeah, things are
Speaker 4: pretty good. The outlook for twenty twenty five is pretty good,
Speaker 4: and it was in stark contrasts from what we heard
Speaker 4: earlier in the week from ASML, which is the company
Speaker 4: that makes the machines that makes the chips. Netflix is
Speaker 4: down a percentage point and I flag it because we're
Speaker 4: going to talk about it later in the show. They
Speaker 4: have earnings after the bell. Maybe that's some positioning. What
Speaker 4: will we hear? Who knows?
Speaker 3: Caro, I'm the here and now we're going to talk
Speaker 3: about AI adoption ed in the financial sector, it's rapidly increasing.
Speaker 2: It so all.
Speaker 3: According to a new report by AI benchmarking platform evident Now,
Speaker 3: the rate of AI utilization is actually happening twice as
Speaker 3: fast though in the top performers, the top ten banks
Speaker 3: of this index, let's dig in evidence CEO, Alexander and
Speaker 3: Musaviside is with us now and Alexandra. It does seem
Speaker 3: to be that if you've put a lot of talent
Speaker 3: and focus and energy in R and D in you're
Speaker 3: winning and you're.
Speaker 6: Going to continue winning.
Speaker 12: Yes, you are calin.
Speaker 2: Yes.
Speaker 12: We release the index today and as it's covering the
Speaker 12: fifty largest banks the in US and Europe, and we
Speaker 12: cover all of those aspects as in the looking at
Speaker 12: the talent stack and the innovation levels that the banks
Speaker 12: are pulling. We're also very carefully tracking what the banks
Speaker 12: are reporting on in terms of their use cases and
Speaker 12: their ROI and also looking at the responsible AI side.
Speaker 12: And what we see is that the leaders are pulling
Speaker 12: ahead and leading more at double the pace of the
Speaker 12: rest of ten top ten ranked banks in the index
Speaker 12: are moving at double pace from the rest of the
Speaker 12: banks in the index, which should indicate and does indicate
Speaker 12: bifurcation in the ranking, so the leaders are leading more
Speaker 12: and the ones that are following or standing still are
Speaker 12: actually falling behind in this race.
Speaker 4: Now, Alexandra, I'm pretty certain that social media accounts like
Speaker 4: Overheard on Wall Street and Wall Street Memes are listening
Speaker 4: to this because there are two things here, banks and AI,
Speaker 4: and in.
Speaker 2: Our world that is everything.
Speaker 4: So here's the question, what is it that makes a
Speaker 4: bank good or not good at AI?
Speaker 12: Well, we look at the strength of the capability of
Speaker 12: the bank, so all of the aspects that goes into
Speaker 12: a very strong ecosystem that moves a use case from
Speaker 12: ideation to production. So a good bank is able to
Speaker 12: move that through the system. So identify where you have
Speaker 12: problems where AI can be a solution to those problems
Speaker 12: and move them into a testing phase and then into
Speaker 12: a production of a use case using GENAI. So good
Speaker 12: bank can do that very quickly and all of the
Speaker 12: elements that are needed to move the use case into
Speaker 12: production swiftly and well and with the intended ROI have
Speaker 12: those the strength of those component parts.
Speaker 4: Okay, So we're showing JP Morgan, Capital One and our
Speaker 4: BC and so based on your report, they are top
Speaker 4: three performers. Is it that they just hired the best
Speaker 4: computer scientists early, the best engineers early. What did they
Speaker 4: do differently to the rest of the list.
Speaker 12: Yeah, the common denominator of the leading banks is that
Speaker 12: they went out early, and they went in big, and
Speaker 12: they reorganized the bank to look like more like a
Speaker 12: tech company, So an AI first business that has a
Speaker 12: research lab, that is attracting the best talent, that is
Speaker 12: reorganizing the bank from inside, looking at the data infrastructure,
Speaker 12: looking at this question of build versus by looking at
Speaker 12: the decision making whether that lies in the center of
Speaker 12: the bank or it's federated, and striking that balance. So
Speaker 12: what these leading banks did is that they went out early.
Speaker 12: Jamie Diamond famously laid out then AI strategy for JP
Speaker 12: Morgan in twenty eighteen and established a research lab and
Speaker 12: really went to work on looking at how to reorganize
Speaker 12: a bank so it could respond to the oncoming technology
Speaker 12: swiftly and easily and get that time to production down
Speaker 12: and really infuse the bank with AI thinking, an AI
Speaker 12: mindset and a nimbleness. And that is what they're reaping
Speaker 12: the benefits of now. Not that they're standing still, they're
Speaker 12: moving at double pace of other banks continuously and to
Speaker 12: spend more on AI, hire more people and continue the
Speaker 12: research and the patents and the partnerships that are delivering
Speaker 12: the impact that they hope to get from their AI investments.
Speaker 12: Jamie Diamond said this year that the ROI from his
Speaker 12: AI investments is at two billion dollars, So that's what.
Speaker 3: Is making money. Who else is managing to see a
Speaker 3: return on investment because everyone's desperate for that.
Speaker 12: Everyone's measuring the impact internally. Only two banks and their
Speaker 12: fifty the list of fifty are actually talking explicitly about
Speaker 12: their ROI. That's JP Morgan and that's DBS out in Singapore.
Speaker 12: But this is going to ramp up. So we think
Speaker 12: that in the next twelve six to twelve maybe eighteen
Speaker 12: months really as AI use cases move into production more
Speaker 12: solidly and the pressure to show ROI off, that investment
Speaker 12: is going to ramp up, and the ROI is being
Speaker 12: measured internally in the banks, and we're seeing many of
Speaker 12: the banks looking at how is it impacting on non
Speaker 12: numerical terms and numerical terms. But we're going to see
Speaker 12: a cascade of announcements of ROI. We think probably from
Speaker 12: about six to twelve months on.
Speaker 4: Well, that's what's so interesting. On the timing of the report.
Speaker 4: We've just had banks earning season, so I guess, did
Speaker 4: you see any early evidence that gets you excited for
Speaker 4: future reports of.
Speaker 12: ROI absolutely, absolutely, I mean it was also other factors
Speaker 12: that were going on in the earnings calls were around
Speaker 12: the rates and geopolitics, of course, but there were four
Speaker 12: banks that were asked about their AI strategy and spend
Speaker 12: and use cases and the impact is having and so
Speaker 12: Jamie Diamond was asked. There was also Ted Pick from
Speaker 12: Morgan Stanley was asked. B and Y and Bank of
Speaker 12: America were asked specifically about what they were expecting to
Speaker 12: see in terms of their AI investments and where they
Speaker 12: see that having an impact. And Tedpick actually went into
Speaker 12: a lot of detail on a tool that they've rolled
Speaker 12: out across Morgan Stanley called debrief. That is something that
Speaker 12: they're trying to put in the hands of many across
Speaker 12: the bank, an AI service that helps manage meetings and
Speaker 12: responses and so on.
Speaker 3: But we must.
Speaker 12: Remember that we're in the early innings. It is a
Speaker 12: big and monumental transformation, and we're only two years in
Speaker 12: so there's a lot to come and the tools are
Speaker 12: getting better and better with much more reliability and speed.
Speaker 12: But we're looking at in the next year or two
Speaker 12: seeing what we call agentic ai come in and being
Speaker 12: tested out and being a potential tool for the banks
Speaker 12: to consider and are considering already. That's going to be
Speaker 12: a real game changer on many accounts.
Speaker 3: So agents front and center. What are they using and
Speaker 3: they're using models? Are they building all on open ai largely?
Speaker 6: And what are the.
Speaker 12: Frustrations on the agaentic ai or no, Just more broadly.
Speaker 3: What models have been deployed, are they building them from
Speaker 3: within depending on our own large language models, deploying from
Speaker 3: open ai and the competitors.
Speaker 12: Most of the banks are looking at the variety of
Speaker 12: models out there, So it could be open Ai Anthropic
Speaker 12: that you were mentioning before, Mistral hugging face. Every model
Speaker 12: has a uniqueness, and when you're looking at the variety
Speaker 12: of use cases and problems that you're trying to solve
Speaker 12: in the bank, there will be different types of models
Speaker 12: that need to be deployed and fitted, and then the
Speaker 12: building and the engineering of making it fit on your
Speaker 12: own data used for your own systems in a particular
Speaker 12: way that is unique for you depending on what type
Speaker 12: of bank you are. You're at You're looking at these
Speaker 12: variety of large language models that each have their own features,
Speaker 12: but then they get bought in and then they get
Speaker 12: implemented and fitted into the data and to the system
Speaker 12: of the bank.
Speaker 3: Alexandra are so pleased we come back to hear how
Speaker 3: this latest evident index has gone evidence CEO Alexandra, who
Speaker 3: is a visit on the latest in financial AI. Meanwhile,
Speaker 3: coming up, Unity just announced that the latest version of
Speaker 3: its gaming engineer software is out. CEO Matt Romberg joining
Speaker 3: us next. This is Blue meg Technology.
Speaker 4: Okay. Unity releases its latest developer platform today called Unity six.
Speaker 4: It's a suite of tools and it's used by the
Speaker 4: gaming industry and professionals to create, market and grow games
Speaker 4: and VR experiences across a variety of platforms. Unity CEO
Speaker 4: Matt Bromberg joins us now, and Matt, I've come to
Speaker 4: learn in the last couple of years that loads of
Speaker 4: video game developers, publishers, and video game industry people watch
Speaker 4: this show, but many won't know what the engine is,
Speaker 4: the tools are. Why is Unity six so important? And
Speaker 4: welcome to the program.
Speaker 1: Thank you so much and thank you for having me. Yeah.
Speaker 13: Union is really a global platform that enables, enables and
Speaker 13: sort of powers very large chunks of the video game industry.
Speaker 13: For example, more than seventy percent of the mobile games
Speaker 13: in the world are built on.
Speaker 1: Top of our platform.
Speaker 13: So it's a really important fundamental piece, and we're the
Speaker 13: only company in the world can help developers come from
Speaker 13: beginning to the end of the life cycle, so prototyping,
Speaker 13: building the game, operating the game and live service, and
Speaker 13: then going out to find users for that game, or
Speaker 13: monetizing advertising inventory inside the game.
Speaker 1: So it's really a full suite.
Speaker 13: And we're really very close partners with game developers all
Speaker 13: over the world, by the way, as well as non game.
Speaker 5: Uses, right, and there are plenty.
Speaker 3: We'll dig into the non game uses in a moment,
Speaker 3: but really, when you think about those developers, you're having
Speaker 3: to win back their trust. We'll try to focus really
Speaker 3: on being a good partner. Because you're relatively relatively.
Speaker 6: New to the role.
Speaker 3: The previous CEO had to leave because there was a
Speaker 3: pricing pain point. How are those relationships building, How your
Speaker 3: discussions around Unity six.
Speaker 13: Yeah, the first five months of my tenure have been
Speaker 13: really exciting because it's given me an opportunity to fly
Speaker 13: all over the world and spend time with as many
Speaker 13: of our customers as I possibly can. I've been really
Speaker 13: really excited about how willing they are to reconnect with us.
Speaker 13: The ecosystem is really best when we do well, because
Speaker 13: you're building. When you choose, you know you're building on
Speaker 13: top of us for maybe ten or twenty years in
Speaker 13: the operating game. It's really important that you trust us.
Speaker 13: It's really important that we deliver what is needed. And
Speaker 13: what customer has told us all over the world was, hey,
Speaker 13: we're happy to pay you more, we just don't like
Speaker 13: the way you've asked for it.
Speaker 1: And that was the easiest decision.
Speaker 13: In the world to reconnect with folks and find a
Speaker 13: way to charge them that work for their business and
Speaker 13: regenerated our relationships.
Speaker 3: But there is tough competition, epic games Unreal Engine being
Speaker 3: one of them, and there's open source.
Speaker 6: Game engines as well.
Speaker 4: Well.
Speaker 3: How have you managed to retain or even build on
Speaker 3: or lose market share?
Speaker 2: Yeah.
Speaker 13: Unity has been developing this platform for more than twenty years,
Speaker 13: and as I said, the vast majority of.
Speaker 1: Model developers are on the platform. We already know them.
Speaker 13: So what we have to do is do things like
Speaker 13: release Unity six right, better software, more performance software, but
Speaker 13: software that's also stable and kind of stables a rock.
Speaker 13: So if we keep.
Speaker 1: Doing that, we feel really good about our position.
Speaker 6: Matt.
Speaker 4: A question from the developers and our audience is you
Speaker 4: will raise prices right over time? Just explain the cadence
Speaker 4: by what percentage and the rationale behind it.
Speaker 1: Yeah.
Speaker 13: So we announced that we were reverting to a very
Speaker 13: typical kind of subscription model, just very very common in
Speaker 13: the SaaS business, and we talked about making the software
Speaker 13: more available for our community, so really small users that
Speaker 13: don't generate meaningful revenue with our software, and then raising
Speaker 13: some prices on our largest customers. And it's been the
Speaker 13: news has been really really well received. As I said,
Speaker 13: not even so much because of the price increase, but
Speaker 13: because of the way we did it. Part of reconnecting
Speaker 13: with our customers has been really spending time with them
Speaker 13: to listen to them, to test our ideas with them,
Speaker 13: and to not surprise them. And so the way we
Speaker 13: rolled out the pricing and the nature of it has
Speaker 13: again has been really well received. And we think, you know, well,
Speaker 13: we'll just revert to some annualized increases, which is as
Speaker 13: typical in.
Speaker 1: Our industry, and you know there's there won't be uch trauma.
Speaker 4: What's the Unity story going to be under your leadership?
Speaker 4: There was a time where Unity was like, Okay, we're
Speaker 4: going to be a metaverse company, and I get why.
Speaker 4: It seems like you're doing hard reset back to being
Speaker 4: a video games company.
Speaker 11: Yeah.
Speaker 13: I think one of the exciting things about UNI, but
Speaker 13: also one of the challenging things is we sit at
Speaker 13: the intersection of so many powerful forces, three D digital advertising,
Speaker 13: interactive entertainment, it's just.
Speaker 1: The metaverse AI.
Speaker 13: You could be forgiven for wanting to pursue lots of
Speaker 13: wonderful things, But to your point, what we've wanted to
Speaker 13: focus on is making sure that we deliver for our
Speaker 13: core customer set in video gaming. Make sure we deliver
Speaker 13: rock solid software that they can build their businesses on,
Speaker 13: that they can use to help acquire new users and
Speaker 13: sell their advertising inventory. And to make sure we nail
Speaker 13: that so that folks trust us, that we reconnect and
Speaker 13: then you know, once people trust you, then they beget
Speaker 13: you can begin to dream and make all kinds of
Speaker 13: other investments.
Speaker 6: Oh, other investments.
Speaker 3: Would they be inorganic rather than organic? You looking at
Speaker 3: developing genitive AI offerings by buying partners rather than building
Speaker 3: your own.
Speaker 13: Yeah, our focus right now is on building our own
Speaker 13: business in general. But I will say that AI is
Speaker 13: a really important piece for us. I think as a
Speaker 13: platform we're really interested.
Speaker 1: In being able to change the economics of the industry.
Speaker 13: So the best thing that could happen to a game
Speaker 13: developer is for us to create a tool that enables
Speaker 13: them to make games more quickly, more efficiently.
Speaker 1: That chaine is how many games they can make and
Speaker 1: change the real calculus for them.
Speaker 13: So as a platform developer, we use AI to obfuscate
Speaker 13: the complexity of our software and help them move more quickly.
Speaker 1: Then that's the best thing we could possibly deliver.
Speaker 3: We didn't hear that you're not going to buy anyone.
Speaker 3: You said you go focus on organic, but would you
Speaker 3: buy someone?
Speaker 13: We are really focused on what we're doing right now
Speaker 13: and being better, Matt.
Speaker 4: I want to just bring this all together. I think
Speaker 4: the question from this point is how to video games
Speaker 4: change Unity?
Speaker 2: Six?
Speaker 4: Great? AI great? We just want better games. Can you
Speaker 4: promise that that's going to be the case.
Speaker 13: I can promise I'm going to tell you, well, I
Speaker 13: worked in the video game business, making video games for
Speaker 13: more than fifteen years before I got to Unity, and
Speaker 13: I know that there's a lot of talk about where
Speaker 13: we are as an industry, and perhaps you know with
Speaker 13: growth is flattening, But I think it's really important to
Speaker 13: remember that the video game business is a very big,
Speaker 13: vibrant business. It's bigger than streaming video, streaming music, and
Speaker 13: Bible box office combined. And sometimes when you get late
Speaker 13: in the hardware cycle, you start to see some flattening
Speaker 13: as we are now. But one thing I can promise
Speaker 13: you is that the creative geniuses in our business are
Speaker 13: going to create amazing interactive entertainment.
Speaker 1: They're going to release that entertainment.
Speaker 13: There are going to be new platforms, and growth is
Speaker 13: going to return out to our market.
Speaker 4: Matt Bromberg, Unity CEO, thank you so much for joining
Speaker 4: us here on Bloombog Technology. Cable companies are not only
Speaker 4: seeing a drop in TV subscribers, they're also struggling with broadband.
Speaker 4: Look at Charters broadband subscription data for the past six quarters.
Speaker 4: According to Bloomberg Intelligence, cable providers may lose up to
Speaker 4: four hundred and eighty one thousand Internet customers in the
Speaker 4: third quarter. That would be the worst ever decline for
Speaker 4: the industry, and let's say it's due to the expiration
Speaker 4: of a government subsidy program as phone companies bundle home
Speaker 4: internet while it's offerings.
Speaker 3: Carrot Trouble for cable providers also extend to arrival Netflix,
Speaker 3: which reports to earnings today. Shares have tripled since May
Speaker 3: of twenty twenty two, hitting a record high earlier this month.
Speaker 3: But can we sustain this? Maybe revenue growth is slowing
Speaker 3: a little bit. We've seen the password crackdowns already. Has
Speaker 3: that been priced into where we're currently standing? Pretty mugs,
Speaker 3: Phelix Jillette. I'm not going to ask you as to
Speaker 3: whether we should be trading at this valuation, but this
Speaker 3: set of numbers fiscal third quarter do look like they're
Speaker 3: going to remain strong. Four and a half million subscribers added.
Speaker 3: Is that enough to keep us all joyant about Netflix?
Speaker 2: Yeah?
Speaker 14: I mean, I think for the time being, four and
Speaker 14: a half million is pretty solid growth.
Speaker 2: It's down from third.
Speaker 14: Quarter last year, which was a closer to nine million,
Speaker 14: but a huge run up in the side price that
Speaker 14: we've seen since May of twenty twenty two is really
Speaker 14: driven by two things. Yeah, it was the password crackdown,
Speaker 14: which has been very effective. It's also been driven by
Speaker 14: the introduction into this lower price add tier, right, and
Speaker 14: so I think that's really what to keep an Ion
Speaker 14: going forward is how many subscribers do they have in
Speaker 14: that advertising tier. How much is the advertising revenue growing.
Speaker 14: I think a big part of that is Netflix is
Speaker 14: also you know, they're going more heavily into live programming, right.
Speaker 14: In order to get advertisers and viewers SYNCD up, you
Speaker 14: want to have live events, and the more we've seen
Speaker 14: in the past year has been you know, all this
Speaker 14: increase in live production. You had the Joe Rogan comedy special,
Speaker 14: live comedy special over the summer, hot dog eating contest.
Speaker 14: That's all pretty small compared to I think what's going
Speaker 14: to be coming down the pipeline for Netflix in the
Speaker 14: next couple of years, which is really live sports.
Speaker 4: When you and I were hanging out in Hollywood last
Speaker 4: week rubbing shoulders with all the celebrities and movie makers,
Speaker 4: I guess what they weren't talking about so much was
Speaker 4: some kind of crisis when we were one year ago.
Speaker 4: Are they looking to the horizon for a crisis.
Speaker 14: I mean, I think like everyone's happy that the strikes
Speaker 14: are over, and you know, we're in the bell tightening
Speaker 14: phase of Hollywood. It feels like the major crisis has passed,
Speaker 14: but there's still production is still way down from what
Speaker 14: it was during the peak TV years, you know, in
Speaker 14: terms of what Netflix has come in. You know, I'm
Speaker 14: still curious about their gaming investments. They had to shake
Speaker 14: up in their gaming department over the summer. They haven't
Speaker 14: had much success there. You know, they're going to point
Speaker 14: to big things, right, you know, like Squeed Game two
Speaker 14: next quarter.
Speaker 3: Okay, yeah, plenty to get excited about in terms of
Speaker 3: the content on deck, Felix Ja let me thank you.
Speaker 3: That does it for this edition of Bloomberg Technology yet.
Speaker 4: Yeah, good show, if I say so myself. Recap on
Speaker 4: the podcast. You know where to find it. This is
Speaker 4: Bloomberg Technology.