Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: From Mahard where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 3: This is Bloomberg Technology with Caroline Hyde.
Speaker 4: And Ed Ludlow, live from Bloomberg's World headquarters in New York.
Speaker 5: This is Bloomberg Technology. Coming up this.
Speaker 4: Hour, Apple's AI delay, a Bloomberg exclusive on Apple Intelligence
Speaker 4: rolling out later. Post iOS update plus from Cryptocritic to
Speaker 4: bitcoin backer. Trump vows changes at the SEC and if
Speaker 4: re elected, to make bitcoin great again. And Deadpool's domination
Speaker 4: the Disney film shatters box office records on opening weekend.
Speaker 4: This is a really big important week for megancap earnings.
Speaker 4: Take a look at the Nasdaq one hundred. We're up
Speaker 4: meaningfully in the session, but we're coming off the back
Speaker 4: of three straight.
Speaker 5: Weeks of weekly declines.
Speaker 4: We were talking over the weekend about the NAZAK one
Speaker 4: hundred being in correction territory. You have ten trillion dollars
Speaker 4: or so of marketcap reporting across Microsoft, Apple, Meta, and
Speaker 4: of course Amazon. We will get into that. Apple is
Speaker 4: a name that we're watching really closely. It kind of
Speaker 4: opened lower and it's been chopping, trading choppy, and now
Speaker 4: it's modestly lower, basically flat. A Bloomberg exclusive, Apple's AI
Speaker 4: features have been delayed, and we'll miss the initial release
Speaker 4: of iOS eighteen in September. According to Bloomberg's reporting, the
Speaker 4: company plans to release Apple Intelligence by October, but will
Speaker 4: make it available to software developers for early testing as
Speaker 4: soon as this week, an atypical strategy for the tech giant.
Speaker 4: I want to welcome back Bloomberg's Mark German explain the
Speaker 4: reporting here because the detail is important.
Speaker 1: Mark, thank you so much for her. I mean great
Speaker 1: to be back Apple Intelligence. This is Apple's big initiative
Speaker 1: for the upcoming year. This is Apple showing the market,
Speaker 1: showing consumers that it too has generative artificial intelligence features.
Speaker 1: They announced these in June. The intention was to bring
Speaker 1: them to market with iOS eighteen and iPad os eighteen,
Speaker 1: which will launch sometime in September. But now I'm told
Speaker 1: those are being pushed back to iOS eighteen point one
Speaker 1: and iPad os eighteen point one. Now this is not
Speaker 1: a big delay, but this means that they likely won't
Speaker 1: come pre installed with the iPhone sixteen when those devices
Speaker 1: go on sale in September, and it also means the
Speaker 1: features will come via software update by October, so it's
Speaker 1: about a few week delay. It's not a huge deal,
Speaker 1: but it shows that the company is still racing to
Speaker 1: iron things out and fix bugs before this very important
Speaker 1: public launch.
Speaker 4: I'm going to get into the stock story with my
Speaker 4: next guess, but I think it's worth recounting the basics
Speaker 4: of Apple Intelligence. So I've got iPhone fifteen Pro, which
Speaker 4: I think in the end will qualify me to be
Speaker 4: able to get Apple Intelligence. But just explain the rollout
Speaker 4: broadly across what kind of device you need to have,
Speaker 4: and then like what it's going to do.
Speaker 1: Yeah, So, first of all, Apple Intelligence requires devices if
Speaker 1: you're on the Mac with Apple Silicon or if you
Speaker 1: have an iPad or iPhone devices with a gigabytes of RAM.
Speaker 1: So for the iPad, that means any iPad with an
Speaker 1: M one chip.
Speaker 3: Orneur and Apple start.
Speaker 1: Including M one chips with the iPad Pro and then
Speaker 1: later the iPad Air beginning in twenty twenty one. Now
Speaker 1: the iPhone is where things get a little bit more interesting.
Speaker 1: Today there's only two iPhone models that will support Apple Intelligence,
Speaker 1: the iPhone fifteen Pro and the iPhone fifteen Promas that's
Speaker 1: because those are the only two iPhones on sale right
Speaker 1: now that include a gigabytes of RAM. Now that gets
Speaker 1: interesting because there's going to be soon four more models
Speaker 1: that have a gigabytes of RAM. Those are all the
Speaker 1: iPhone sixteen's, the regular one, the Plus, the Pro, and
Speaker 1: the Promax launching in September, so pretty soon a bunch
Speaker 1: of more iPhones will include Apple Intelligence. That's so interesting
Speaker 1: because that is probably going to spur people to upgrade
Speaker 1: their iPhone give it. It's not going to come to
Speaker 1: older models.
Speaker 3: Now.
Speaker 1: Apple Intelligence includes a bunch of AI features. It's basically
Speaker 1: a cash all term for a lot of new AI
Speaker 1: features coming to the Apple devices. That includes being able
Speaker 1: to create images, integrate with chat, GPT, a new version
Speaker 1: of Siri, the ability to have writing tools so you
Speaker 1: can write something in an email and it will be
Speaker 1: able to summarize it for you, shorten it, make it
Speaker 1: more conversational, be able to summarize incoming text messages, transcribe
Speaker 1: a voice memo or a phone call and then create
Speaker 1: a summary for you. So just a bunch of different
Speaker 1: AI features across the board. These aren't anything extraordinarily innovative
Speaker 1: or brand new. Not a lot that we haven't seen
Speaker 1: for other platforms before. But the deep integration and the
Speaker 1: ease of use and the interface that you're going to
Speaker 1: see on the Apple devices really takes it up a
Speaker 1: notch against rivals.
Speaker 4: Apple Repoles fiscal thed quarder earnings Thursday after the market close.
Speaker 4: I heard a rumor that you and I are going
Speaker 4: to be seeming up on the top Live blog. That
Speaker 4: might be news to you. Give me the Mark Germans
Speaker 4: what to watch list for this Apple print.
Speaker 1: Yeah, this is an interesting one because you're really going
Speaker 1: to want to pay attention to the guidance that Apple
Speaker 1: CFO Luca Maistry and Tim Cook.
Speaker 3: Give on this call.
Speaker 1: They're not going to give you numbers, but they're going
Speaker 1: to imply probably how the iPhone is going to do.
Speaker 1: So that's really going to be the most important part there,
Speaker 1: because there was not a lot of new hardware launch
Speaker 1: during the quarter that we really care about other than
Speaker 1: the new iPads. So all eyes are going to be
Speaker 1: on that four looking.
Speaker 4: Commentary Bloomberg's Mark German, it is incredible to have you
Speaker 4: back here on Bloomberg Technology.
Speaker 5: Thank you.
Speaker 4: Let's stick with the Apple story and bringing Maxim Group
Speaker 4: Managing Director tom Forte hold on the stock one hundred
Speaker 4: and ninety five dollars price target. What we didn't necessarily
Speaker 4: talk about in Mark's reporting is why it's important. A
Speaker 4: lot of the run up in the stock over whatever
Speaker 4: time period you might choose, is optimism that this is
Speaker 4: come a real tangible effort on artificial intelligence. So your
Speaker 4: response to that reporting, it's a matter of weeks in
Speaker 4: the rollout of Apple Intelligence, but it seems significant.
Speaker 6: Sure, So when I think about my hold rating on Apple,
Speaker 6: the question becomes how much are investors potentially ahead of
Speaker 6: themselves when thinking about the upgrade cycle for AI. I
Speaker 6: certainly think they'll be an upgrade cycle for AI. In
Speaker 6: our numbers, we're looking for essentially half the lift they
Speaker 6: got from five G. And the reason we think it'll
Speaker 6: be half the lift not as much of a lift,
Speaker 6: is they have pressure from a regulatory standpoint in Europe,
Speaker 6: which is about twenty five percent of their sales, and
Speaker 6: in China, which is about twenty percent in their sales,
Speaker 6: and now we're seeing that they're going to have a
Speaker 6: slower rollout of Apple Intelligence. So I think clearly there'll
Speaker 6: be an upgrade cycle. I just don't think it'll be
Speaker 6: as significant as what's already reflected in the shares.
Speaker 4: One of the things we've been thinking about bobout technology
Speaker 4: is basically, for every dollar put into AI, how many
Speaker 4: dollars are comeing out for each of these companies. In
Speaker 4: the case of like the cloud players, it's a bit
Speaker 4: more easy to do the math AI infrastructure investment top
Speaker 4: line growth. But in Apple's case it seems like Apple
Speaker 4: intelligence that they hope it spurs upgrade cycles, right because
Speaker 4: you need the hardware that's compatible with it. As as
Speaker 4: Mark outlined, what's your model for how a dollar in
Speaker 4: translate to however many dollars out for Apple?
Speaker 6: This is a good example where artificial intelligence can result
Speaker 6: in sales. I think the challenge you've seen in enterprise
Speaker 6: software is heavy level of investment spend for artificial intelligence
Speaker 6: and not a near term twelve to eighteen month impact.
Speaker 6: The size of the price for Apple here is about
Speaker 6: fifty billion dollars. So if you look at the incremental
Speaker 6: revenue they generated from iPhone, which is about half their
Speaker 6: sales on five G, they added fifty billion a year
Speaker 6: in annual revenue on the five G upgrade cycle. So
Speaker 6: to the extent that AI spurs something similar. You could
Speaker 6: be looking at an incremental fifty billion of revenue for Apple.
Speaker 6: Translating that to EPs, we're looking at card mid to
Speaker 6: high single digit EPs growth from flat growth.
Speaker 4: We're talking the Tom Forte of Mattim Group, who has
Speaker 4: a hold on the stock one hundred and ninety five
Speaker 4: dollars price target earnings. Mark set out what he thinks
Speaker 4: we should be looking for. A lesson learned in recent
Speaker 4: quarters is maybe don't put too much emphasis on the
Speaker 4: third party data, particularly maybe around China, because the third
Speaker 4: party data tells us that the iPhone is slipping in
Speaker 4: China to domestic handset makers, and yet the last earnings
Speaker 4: on the call in particular, they said, no, we think
Speaker 4: we've got growth back there those slightly in congruous or
Speaker 4: competing data points. With that context in mind, what are
Speaker 4: you bracing for for Luka Maistreet to say or otherwise?
Speaker 6: Yeah, so similar, Mark said, I'm going to try to
Speaker 6: reverse engineer essentially what the outlook is for iPhone sales
Speaker 6: in the September recorder. So the expectation will be that
Speaker 6: they'll have a new iPhone sixteen that I'll come up
Speaker 6: in the September recorder. Yes, the software will lag into
Speaker 6: the December recorder. But to the extent that that is
Speaker 6: the commentary I'm looking for. And if you looked at
Speaker 6: the June quarter, the same exercise suggested that iPhone sales
Speaker 6: would be negative in the June quarter. So did we
Speaker 6: see a transition from negative to positive on the upgrade
Speaker 6: cycle for AI?
Speaker 5: Where's the biggest surprise going to be? In the Apple print?
Speaker 6: The biggest surprise is going to be I think that
Speaker 6: the incremental lift to iPhone sales from AI will not
Speaker 6: be as significant as currently reflected in the stock stocks
Speaker 6: trading it north of a thirty times pe the tech
Speaker 6: big tech peers.
Speaker 3: Are more like twenty seven and a half.
Speaker 6: And I think right now investors are just expecting too
Speaker 6: much of a boost for Apple from AI.
Speaker 4: A story we discussed less and we've actually gone away
Speaker 4: from with Amazon as well as ecosystem. You're a device user,
Speaker 4: but you now use services. Do you think Apple moves
Speaker 4: back to that story with AI?
Speaker 3: That is a great story for Apple.
Speaker 6: So to the extent that incremental iPhone sales result in
Speaker 6: incremental services revenue that could enable the company.
Speaker 3: To perhaps support a higher multiple.
Speaker 6: So ecosystem is very important to Apple and to the
Speaker 6: extent that they can leverage AI to get consumers more
Speaker 6: excited about their ecosystem. Here to advance our purchases on
Speaker 6: higher margin services that could be wonderful for the stack.
Speaker 4: Tom Forte, Maxim Group Managing Director, great to have you
Speaker 4: back on. It's a big week for big tech with
Speaker 4: four of the magnificent seven megacaps posting their quarterly earnings.
Speaker 5: What a calendar that is.
Speaker 4: You might think your attentions are over in Paris with
Speaker 4: the Olympics, but in the world of technology, you are
Speaker 4: glued to Bloomberg Technology right through the course of the week.
Speaker 4: And it's not just the megacaps, some of the chip
Speaker 4: names as well. Let's get the outlook with Brad Erickson,
Speaker 4: Capital Markets Research analysts at RBC. I think in order
Speaker 4: to look forward, I look back at last week in
Speaker 4: alphabet and the lessons learned, the questions that investors posed,
Speaker 4: and we've already talked about it in the show, but
Speaker 4: I think it's a question about for every dollar you
Speaker 4: put into AI infrastructure investment, how many dollars are you
Speaker 4: getting out in the near term for AI?
Speaker 5: Is that how you'd approach this.
Speaker 7: Week Yeah, I think that's going to be a key topic.
Speaker 7: You know, we're not going to get a ton like
Speaker 7: out of Meta or Amazon, for example, in terms of
Speaker 7: what they're spending this year. People are already generally kind
Speaker 7: of understand that. I think we're going to be looking
Speaker 7: at the marginal dollars, like you said, And I think
Speaker 7: what's interesting is I think a quarter or two ago,
Speaker 7: people were very focused on specifically what AI was driving.
Speaker 7: But I think what we're learning more and more is
Speaker 7: that AI is really sort of integrating into these models
Speaker 7: and so you can't unpack it, which is okay because
Speaker 7: then we actually can evaluate the dollar growth in these
Speaker 7: companies and what is sort of justifying those CAPEX investments.
Speaker 5: There are things that they're sort of idiosyncratic.
Speaker 4: You know Meta's case, we kind of forget into massive
Speaker 4: portfolio of social media companies. But they last quarter told
Speaker 4: us about their plans for infrastructure, which wins out the
Speaker 4: forward looking AI story or the backward looking history of
Speaker 4: that company.
Speaker 8: Oh.
Speaker 7: I think people are definitely going to be looking forward right,
Speaker 7: the story will be the same. We'll look at the
Speaker 7: revenue trends and evaluate kind of what they're saying about
Speaker 7: the ad market and their products in particular, and then
Speaker 7: the focus on the call is going to shift to
Speaker 7: Mark talking about his vision for AI and trying to
Speaker 7: give people some comfort. I think this quarter in again,
Speaker 7: why are they making such big investments where maybe we're
Speaker 7: going to see you know, maybe a little bit of
Speaker 7: sort of call it delayed gratification in terms of when
Speaker 7: we see those investments payoff. Right, he used the word
Speaker 7: last quarter, multi year investment cycle. That's a scary term
Speaker 7: for people. So we'll see what kind of performance he
Speaker 7: puts up on the call later for this week.
Speaker 4: For me, Brad, this is a week where being a
Speaker 4: CEO or a CFO you kind of got to earn
Speaker 4: that paypacket, Do you know what I mean? That it
Speaker 4: comes down to community at the end of the day.
Speaker 4: I found last quarter fascinating. How much kind of faith
Speaker 4: or credence do you put into the words spoken by
Speaker 4: the people at the top.
Speaker 7: Yeah, you know, I think they're a little bit different cases. Right,
Speaker 7: we cover Meta and Amazon, so maybe I'll stick stick
Speaker 7: with my commentary there in terms of Mark Zuckerberg and Meta.
Speaker 7: You know, I think one of the adages we've heard
Speaker 7: lately is you want to buy Mark when he's feeling
Speaker 7: maybe a little bit more confident, and sell him when
Speaker 7: he's when he's feeling or so yeah, sorry, buy him
Speaker 7: when he's feeling a little little bit less confident, sell
Speaker 7: him when he's a little bit more confident. Last quarter,
Speaker 7: I think they're delivering such high growth. They were twenty
Speaker 7: seven percent growth last quarter, twenty two percent this quarter.
Speaker 7: You know, I think that that felt a little bit tough,
Speaker 7: and obviously the stocks sold off. Historically, I think you've
Speaker 7: seen that flip to the other side, So we'll see
Speaker 7: what kind of tone we get out of him here.
Speaker 7: But if he's basically talking to maybe more moderating growth
Speaker 7: rate and feeling a little bit better about those investments,
Speaker 7: that can be a positive sigence on Amazon's it's I
Speaker 7: think much simpler. You know, we expect the Indijas to
Speaker 7: come out with a very confident tone around AI. They're
Speaker 7: not going to get into the game of sort of
Speaker 7: promoting themselves or even speaking to how much AI is
Speaker 7: exactly contributing. But I do expect their commentary to remain
Speaker 7: very polish on AI in general.
Speaker 5: So that's an interesting point.
Speaker 4: What they said last quarter is that for aws revenue
Speaker 4: run rate one hundred billion, but specifically for generative AI
Speaker 4: revenue run rate in the billions, multi billions of dollars.
Speaker 5: That seemed like enough.
Speaker 4: So if you don't expect them to kind of over
Speaker 4: exaggerate or expand on that, what do they need to
Speaker 4: say this quarter to keep investors convinced?
Speaker 7: Yeah, I think you know, previously they I think they
Speaker 7: had been a little bit behind, certainly on even on
Speaker 7: just the acquisition of GPUs necessary to train up their
Speaker 7: models and their platfor so I think maybe give them
Speaker 7: a little bit more color on progress forward progress and
Speaker 7: aggression there will be super helpful. The other thing, too,
Speaker 7: is that, you know, one of the things they emphasize
Speaker 7: is when they say things like multi billion dollar run
Speaker 7: rates for AID, they're really talking about broader AI, which
Speaker 7: they've been working on for years, very much pre dating
Speaker 7: the onset of generative AI last year. So again it's
Speaker 7: a little bit hard to unpack, but that would be
Speaker 7: the general forward commentary, I would say.
Speaker 4: Brad Eggs and Internet analyst obviously Capital Markets. Great to
Speaker 4: have you on the show. Thank you all right. Coming
Speaker 4: up on BlueBag technology, France faces an Internet disruption. More
Speaker 4: on the latest infrastructure attack as the Paris Olympics gets
Speaker 4: Underwegh also taking a quick look at shares on Semi
Speaker 4: up eleven and a half twelve percent, one of the
Speaker 4: best performers in major enc's s and P five hundred
Speaker 4: strong earnings basically second quarter adjusted earnings per share beat estimates.
Speaker 4: You know, it's a name where their chips are more
Speaker 4: related to kind of automotive industry. They have a wide
Speaker 4: arrange use case not so much AI, but it's a
Speaker 4: name that we track quarterly on this program. Good results.
Speaker 4: This is Bloomberg Technology. It's time for talking tech and
Speaker 4: first up. Shares of Ali Barber rising today, the stock
Speaker 4: hitting its highest than two months in Asia, trading investors
Speaker 4: cheering the e commerce giant and their plans to charge
Speaker 4: a higher service fee from merchants. Bloomberg reported that Ali
Speaker 4: Barber is set to raise their software service fee to
Speaker 4: zero point six percent, which will boost its core merchant
Speaker 4: revenue plus SHAWM plans for an EV expansion. The Chinese
Speaker 4: tech company has purchased a one hundred and thirty one
Speaker 4: acre plot of land in Beijing for one hundred and
Speaker 4: sixteen million dollars in an effort to expand its electric
Speaker 4: car production. Jarmi first entered the auto sector in March
Speaker 4: and has already delivered thirty thousand vehicles so far, with
Speaker 4: the company on track to reach its initial goal of
Speaker 4: one hundred thousand cars by November. And another infrastructure attack
Speaker 4: on France during the Olympics, this time a number of
Speaker 4: fiber optic cables carrying Internet services across the country were
Speaker 4: cut overnight. Orange, the Olympic telecom partner, said the connections
Speaker 4: into Paris and thus the Olympics were not affected. Just
Speaker 4: on Friday, coordinated fires on French trail lines had disrupted
Speaker 4: trains ahead of the opening ceremony. For more, let's bring
Speaker 4: in Bloomberg's benoir Bertelo out in Paris. You know, this
Speaker 4: is a story benoir where there are many questions who, what, where,
Speaker 4: when and why?
Speaker 5: But what's the latest fleas.
Speaker 9: Yeah, so clearly was a large scale attack under fiber
Speaker 9: on networks during the night between nine am, one am
Speaker 9: and three am toord middle of the night. There were
Speaker 9: nine places we are told across France where long distance
Speaker 9: fiber optic cables were cut. So really this is the
Speaker 9: highways of the Internet powering the network and thanks to
Speaker 9: redundancies there was no real impact, just a bit of
Speaker 9: latency for some customers. But clearly this is the scale
Speaker 9: of the attack that's a sort of borrowing authorities in
Speaker 9: France for the trains that the trains are back to
Speaker 9: normal as of today and it's been slowly going back
Speaker 9: to normal in the weekend, so so far, not really
Speaker 9: disruption of the Olympics. It's not been disrupting either the
Speaker 9: train or the internet outage have been disrupting the Olympics.
Speaker 9: But really it's the scale of these attacks and the
Speaker 9: fact that they are targeted across France rather than on
Speaker 9: Paris that is sort of interesting and surprising authorities.
Speaker 4: Then the out and in question I suppose is is
Speaker 4: there a link between the rail nodes that were a
Speaker 4: victim of ars and attacks last week and the cutting
Speaker 4: of fiber optic cables overnight. Is there any evidence that
Speaker 4: that is part of a wider and coordinated attack.
Speaker 9: So there is no evidence that we know of so far.
Speaker 9: There are two separate investigations that have been started by
Speaker 9: the Parious Prosecutors Office. Clearly, it's what's similar is that
Speaker 9: there are there is a good level of intelligence on
Speaker 9: where exactly to act, especially on the train attacks like
Speaker 9: these really were important nodes in the network, but there's
Speaker 9: no proof of or no indication so far of who
Speaker 9: could have done this. The Interior Minister this morning said
Speaker 9: they were advancing on this, but clearly there is no
Speaker 9: information of who could have done it and if there
Speaker 9: is a link between the two attacks.
Speaker 4: Away from the news head lines, it was a weekend
Speaker 4: where I everyone watching the preyram was glued to their television.
Speaker 4: I really enjoyed the rugby seven's Congratulations to France on
Speaker 4: incredible performance. What's it like in Paris now Benoir. What's
Speaker 4: the experience of being in the host city and host nation.
Speaker 9: It's a great atmosphere in Paris, Kelly. Lots of Parisians
Speaker 9: have feed the city, but it's a lot of people
Speaker 9: from across France that are coming to see to see
Speaker 9: the events and many tourists. Of course, the weather it
Speaker 9: is much better now, so that's that's great. Great location
Speaker 9: across the city that they've chosen to put the events
Speaker 9: location really in the middle of the city and it
Speaker 9: turns out to be great. So so far, transports in
Speaker 9: Paris are fine, there was no security incident, thanksfully so far,
Speaker 9: so I would say good for those visiting in.
Speaker 4: Paris, Bloomberg's Ben wir buttlo thank you so much. Great
Speaker 4: to have you on the ground in Paris, Welcome back
Speaker 4: to Bloomberg Technology, Ed Lovelow in New York City, and
Speaker 4: a very quick check in on the markets.
Speaker 5: I mean, we know the story this week. It's a story.
Speaker 4: About four of the biggest technology names reporting earnings and
Speaker 4: then as that one hundred is basically flat in the session,
Speaker 4: but the context is that it's coming off three straight
Speaker 4: weeks of weekly declines. There was a lot of talk
Speaker 4: about how close we are to a technical correction, so
Speaker 4: there is a lot at stake depending on how those
Speaker 4: earnings reports go in the moment. One asset class that's
Speaker 4: superin focus is crypto. Bitcoin around or just below sixty
Speaker 4: eight thousand US dollars per token and other names miners
Speaker 4: or crypto adjacent names had been kind of interestingly high.
Speaker 5: Now lower. Why will bitcoin.
Speaker 4: Touch the highest level since mid June, after Republican candidate
Speaker 4: Donald Trump expanded his pro crypto agenda at Bitcoin twenty
Speaker 4: twenty four over the weekend.
Speaker 5: Is speaking at the conference this afternoon.
Speaker 10: I'm laying out my plan to ensure that the United
Speaker 10: States will be the crypto capital of the planet and
Speaker 10: the bitcoin superpower of the world, and we'll get it done.
Speaker 4: Let's break it all down with Bloomberg intelligence analyst James Seffert,
Speaker 4: who was at the conference.
Speaker 5: You're looking fresh.
Speaker 4: After what I imagined with some late nights and wild
Speaker 4: afternoons over in Nashville.
Speaker 5: I mean, we'll get to Trump. Just what was it like?
Speaker 5: How is your weekend?
Speaker 8: Yeah, I mean it was. There was a lot of
Speaker 8: excitement in the air. I was. I've been to the
Speaker 8: conference the last few years, and I will say this
Speaker 8: feels it makes sense. Right. We have the Bitcoin ETFs
Speaker 8: now that launched in January.
Speaker 5: There's a lot.
Speaker 8: More big banks and big institutional players that if they're
Speaker 8: not fully involved in bitcoin, they're at least interested. I
Speaker 8: mean the likes of I interviewed Robbie Mitchnick from Blackrock
Speaker 8: on stage. We had Yon van Neck, the CEO of
Speaker 8: van Ck, State Street was there, Fidelity was there, you
Speaker 8: name it. There's a lot of institutional, big time players
Speaker 8: from the cheerful financial world that are now dipping their
Speaker 8: toe or not fully jumped into the water on the
Speaker 8: bitcoin side of things.
Speaker 1: So I will say it's become more.
Speaker 5: Mature, but it was still a lot of excitement.
Speaker 8: There was a lot of fun and people were amped
Speaker 8: up to have Trump and a lot of There was
Speaker 8: over ten other congressmen and women at the conference too,
Speaker 8: so it was almost a little political party in a
Speaker 8: way too.
Speaker 4: So the headline is that Trump has promised to make
Speaker 4: bitcoin great again, which is good for headlines as.
Speaker 5: Sound bites go.
Speaker 4: But also talked about SEC chair Gary Gensler and saying
Speaker 4: that he would basically replace him if he's reelected with
Speaker 4: somebody that loves crypto. How did that go down with
Speaker 4: the industry, investors, the community around bitcoin.
Speaker 8: Yeah. He gave a rare long, rambling speech as Trump
Speaker 8: often does, right, and the one thing that got the
Speaker 8: crowd the loudest by far was him saying on day one,
Speaker 8: I'm going to fire Gary Gensler. And let's be clear,
Speaker 8: I'm pretty sure he doesn't technically have the ability to
Speaker 8: do that, though it's pretty standard when a new president
Speaker 8: and comes in they kind of turn it over and
Speaker 8: get the people they want at the heads of agencies.
Speaker 1: But it doesn't matter.
Speaker 8: It's a talking point and it's something that people love.
Speaker 8: You also talked about stopping Elizabeth Warren and her quote
Speaker 8: boons a whole bunch of other things out there that
Speaker 8: the bitcoiner crowd wanted to hear. I guess actions speak
Speaker 8: one of the words we'll see, but they definitely liked it.
Speaker 8: It was certainly a little bit different from his typical
Speaker 8: trumb speech audience, but he hit the points he wanted
Speaker 8: to hit.
Speaker 1: Bitcoiners seemed to love it.
Speaker 3: Yeah.
Speaker 4: James for Bloomberg Intelligence, who was there at Bitcoin twenty
Speaker 4: twenty four, Thank you. Let's keep a conversation going as
Speaker 4: the US election looms. Bloomberg's out to day with a
Speaker 4: big take on Trump's own journey with crypto, going from
Speaker 4: skeptic to bitcoin cheerleader. I'm delighted to bring in Kristen Smith,
Speaker 4: CEO of the Blockchain Association and DC based Trade Association.
Speaker 4: You represent around one hundred of the industry's leading companies
Speaker 4: and you're quoted in that big take. But for me,
Speaker 4: that's the story. It wasn't so long ago that former
Speaker 4: President Trump was talking about that the criminality associated with
Speaker 4: crypto and blockchain, his doubts about it, to now being
Speaker 4: all out. Has that changed the tide for your industry?
Speaker 11: Well, nobody ever goes from being pro crypto to anti crypto.
Speaker 11: It's only the other way around. And I think that's
Speaker 11: what we saw with Donald Trump, and it's what we're
Speaker 11: seeing with folks on both sides of the aisle, both
Speaker 11: who are in Congress today and who are running for
Speaker 11: Congress right now.
Speaker 3: And I think the.
Speaker 11: Reason for that is that when you don't know a
Speaker 11: whole lot about crypto, you often have misconceptions about what
Speaker 11: is used for or how it works. But as you
Speaker 11: gain that knowledge and you begin to understand the power
Speaker 11: of decentralized technology, you realize what tens of millions of
Speaker 11: Americans know is that this is something that could be
Speaker 11: the foundation for a new financial services system or an
Speaker 11: alternative to the big tech ecosystem in a way that
Speaker 11: is better for users and consumers. And so there's a
Speaker 11: real reason that people like this. And what we've seen
Speaker 11: as a result of this is it's translating into the elections.
Speaker 11: The crypto voter is real and the crypto advocate is strong.
Speaker 11: And I think that this is something we're going to
Speaker 11: continue to see talked about heading into the elections.
Speaker 4: As far Kristin we mentioned it, but I want to
Speaker 4: actually play the SoundBite. This is former President Trump talking
Speaker 4: about the SEC and Gary Againstler.
Speaker 10: On day one, I will fire Gary Gainst, who will
Speaker 10: appoint a new SEC chairman who believes America should build
Speaker 10: the future, not.
Speaker 3: Block the future.
Speaker 5: Caban taking office, I will.
Speaker 10: Immediately appoint a Bitcoin and Crypto Presidential Advisory Council.
Speaker 4: What is the Blockchain Association and the groups that you
Speaker 4: represent reaction to that statement.
Speaker 11: I think people are incredibly excited by that that statement.
Speaker 11: You know, we have had both at the Blockchain Association
Speaker 11: and within our member companies a lot of outreach over
Speaker 11: the past couple of years to the SEC to try
Speaker 11: to have a reasonable conversation about how to bring regulation
Speaker 11: to this space. And as a result, Gensler has just
Speaker 11: come back with enforcement action after enforcement action, and it's
Speaker 11: costing the industry hundreds of millions, if not over a
Speaker 11: billion dollars in legal fees just to deal with challenges
Speaker 11: from the SEC. Right now, this is absolutely ridiculous. Isn't
Speaker 11: how things should be done, And people are angry, and
Speaker 11: so I think people are very excited that Trump has
Speaker 11: come out this strong. I think what's interesting is we're
Speaker 11: also hearing a lot of conversations on the democratic side
Speaker 11: of the isle we have. We had Billy Fourteen members
Speaker 11: of Congress wrote a letter to the DNC urging them
Speaker 11: to include something pro crypto in the platform. And there's
Speaker 11: a lot of outreach to the new nominee or presumptive nominee.
Speaker 11: I guess I should say on the Democratic side, Harris,
Speaker 11: to see if can come out and do something pro
Speaker 11: crypto as well. So this isn't a partisan issue, but
Speaker 11: I would say Trump had a very strong showing over
Speaker 11: the weekend, and people were incredibly encouraged by the acknowledgment
Speaker 11: of the difficult time that we've had over the past
Speaker 11: three and a half years with Gary Gensler.
Speaker 4: Christ On, the vice president. That had been reported she'd
Speaker 4: also considered appeering out or speaking at Bitcoin twenty twenty
Speaker 4: four and then did not do so. Has the Blockchain
Speaker 4: Association had any conversation or engagement with her campaign team
Speaker 4: and would you hope to do so?
Speaker 5: We absolutely hope to do so.
Speaker 11: We have outreached both to her government team and her
Speaker 11: campaign team right now, and I know she's had conversations
Speaker 11: with some of the leaders within the industry already, and
Speaker 11: so I think there's a lot of hope. I think
Speaker 11: what's really interesting is typically when Donald Trump comes out
Speaker 11: in support of a policy, the Democratic Party runs the
Speaker 11: other way. But what we're seeing here is a competition
Speaker 11: for which party can gain that value crypto voter. There's
Speaker 11: a poll from a couple months ago, but I think
Speaker 11: it's still relevant that one in five voters in swing
Speaker 11: states considers cryptocurrency an important issue heading into the election
Speaker 11: this fall. And I think that both sides are seeing
Speaker 11: those numbers and that there's a realization that there's no
Speaker 11: upside to being anti crypto, that really both parties need
Speaker 11: to be thoughtful about how to approach this so that
Speaker 11: we can get the right policy in place, so that
Speaker 11: those voters will will go to the polls, but more importantly,
Speaker 11: that we'll be able to keep the industry and the
Speaker 11: community thriving here in the United States.
Speaker 4: Christin Smith, CEO of the Blockchain Association, thank you. Another
Speaker 4: story we're tracking. The US Justice Department says TikTok collective
Speaker 4: users information on sensitive topics, making it a national security threat,
Speaker 4: which justifies a law to ban the app in the US.
Speaker 4: If byte Dance doesn't divest belan Thos, Mike Shephard is
Speaker 4: back in. Mike let's just start by asking what is
Speaker 4: new here and what is the latest.
Speaker 2: So there are three key points that emerge in this
Speaker 2: Justice Department filing, and that was the first detailed response
Speaker 2: to TikTok's effort to overturn this law that was passed
Speaker 2: in April and signed by President Joe Biden. It requires
Speaker 2: the company to be sold by its Chinese owners by
Speaker 2: January nineteenth. The government has been on the hook to
Speaker 2: demonstrate further in court why that's necessary. So there were
Speaker 2: three key points that really emerged. One, you headed right
Speaker 2: at the top is data collection. The company collects a
Speaker 2: lot of data on its one hundred and seventy million users.
Speaker 2: That includes private messages, viewing habits, even users' location, and
Speaker 2: that is information that is not adequately walled off from
Speaker 2: China and from China's government, the government contends. Two, we
Speaker 2: also see the government raising the flag of censorship. It
Speaker 2: says that China could step in to exert control over
Speaker 2: content on the platform, either censoring or promoting different kind
Speaker 2: of content that could suit its government's interests. And then three,
Speaker 2: we saw the government take on the whole question of
Speaker 2: free speech rights that TikTok has been raising as it
Speaker 2: challenges this law. We're seeing that TikTok is saying this
Speaker 2: is unfair, but the US government responded seeing that, look,
Speaker 2: free speech rights do not apply when the algorithm and
Speaker 2: data are being collected and owned by a foreign power,
Speaker 2: and that is really one of the key issues at
Speaker 2: hand here.
Speaker 4: I might will show the TikTok response, but very quickly
Speaker 4: summarize it for us.
Speaker 5: Well.
Speaker 2: In brief, they are doubling down on their response that
Speaker 2: this law violates free speech rights, and it also insists
Speaker 2: that the government has yet to show adequate evidence of
Speaker 2: this national security threat that lawmakers talked about, that the
Speaker 2: Justice Department talked about in the briefing filed on Friday.
Speaker 2: And to be fair to TikTok's point, so much of
Speaker 2: that filing from late Friday was redacted, so only the
Speaker 2: judge in the case we'll see those arguments made on
Speaker 2: national security grounds because that information remains classified.
Speaker 4: Still Boom bags, Mike Sheppard, thank you now, coming up
Speaker 4: rated opening weekend record has been smashed by Deadpool and Wolverine.
Speaker 4: Details on Disney's box office domination. Next, This is Bloomberg Technology.
Speaker 4: It's going viral. Deadpool has dominated the weekend box office,
Speaker 4: bringing in two hundred and five million dollars, making it
Speaker 4: the best ever opening for an R rated film. Bloomberg's
Speaker 4: Hannah Miller joins me on set, and what's so astonishing
Speaker 4: about that is that's just the US and Canada, you know,
Speaker 4: so global hit. But the numbers are ahead of forecast.
Speaker 4: Here just give me the size and scope against everything
Speaker 4: else I could have watched this weekend.
Speaker 12: Yeah, it's smashing records globally as well for R rated movies.
Speaker 12: People are flocking to this film. There were very high
Speaker 12: expectations from the get go. It has exceeded those expectations
Speaker 12: in terms of box office performance. This is huge for
Speaker 12: the film industry and for struggling movie theater chains.
Speaker 5: You and I, full disclosure, have not yet seen it.
Speaker 3: Not yet.
Speaker 4: BlueBag Technology senior producer Jackie Lopez says the soundtrack is fire,
Speaker 4: So that's really interesting. Deple one great, depl two. I
Speaker 4: think we agree on that, right. We are not film critics,
Speaker 4: but for Disney, parent of Marvel, this is important.
Speaker 5: I think I think so too.
Speaker 12: So we saw a huge influx of Marvel films that underperformed,
Speaker 12: they took a little break. This one came out it's
Speaker 12: putting Marvel and Disney back on top again. When it
Speaker 12: comes to box office performance.
Speaker 4: What else was it up against. That's a big question
Speaker 4: because you have something like Twister, it'd already been.
Speaker 12: Out, so with Twisters, we actually think it's going to
Speaker 12: take away audiences from Twisters, especially for IMAX showings. That's
Speaker 12: been a huge draw for Twisters. There's also going to
Speaker 12: be Imax showings from Deadpool and Wolverine, so we think
Speaker 12: this is going to continue to dominate, you know, inside
Speaker 12: Out too. We saw that drop as well. This is
Speaker 12: the film that everyone wants to see right now.
Speaker 4: Bloomberg's Hanamella and New York on that New Entertainment beat.
Speaker 5: What a great gig.
Speaker 4: Another big story, Google streaming music player has long lagged
Speaker 4: behind Spotify, Apple, and Amazon in US market share, but
Speaker 4: now things are changing for YouTube music. Bloomberg lustin Car
Speaker 4: has a few thoughts on that in today's Tech Daily.
Speaker 4: The breaking headline news of which is you spend twelve
Speaker 4: hundred dollars a year on Google subscriptions, which is wild.
Speaker 4: But again, YouTube music's not one that I use either.
Speaker 3: What have you found out?
Speaker 13: You know, it's interesting I found out that I've actually
Speaker 13: been paying for YouTube Music this whole time, included in
Speaker 13: my YouTube Premium subscription. But like you, I've just never
Speaker 13: really thought of YouTube as a music services. I subscribed
Speaker 13: to Spotify. A lot of my friends use Apple Music
Speaker 13: or Amazon service that's included in prime. And what I
Speaker 13: found is they've sort of put together this pretty unique
Speaker 13: service that's differentiated by video. You know, if you use
Speaker 13: YouTube Music, you get access to music videos, live concerts,
Speaker 13: a lot of podcasts, material that just regular people upload
Speaker 13: to the video website, and that influences your sort of
Speaker 13: music algorithm and the song recommendations you get. You know,
Speaker 13: Alphabed just last week was saying how much subscription growth
Speaker 13: they're seeing. That's one of the big drivers they're seeing
Speaker 13: is from music. They actually earlier this year surpassed one
Speaker 13: hundred million subscribers for YouTube Premium and YouTube Music, so
Speaker 13: we're seeing a huge uptick. That's one of the areas
Speaker 13: of growth in the music space where it's Apple Music
Speaker 13: and some of the other providers are sort of lagging.
Speaker 4: Right now, we're showing some pictures of what YouTube Music
Speaker 4: looks like, and I actually am a bit surprised. I
Speaker 4: knew very little about YouTube Music, it seems something very
Speaker 4: similar or akin to Spotify.
Speaker 13: Well, it is a little bit similar in the sense
Speaker 13: that they do have a lot of the streaming tracks,
Speaker 13: but again what's different is that it's connected to the
Speaker 13: data that is sort of taken from you using the
Speaker 13: YouTube video website. So if you're searching something for YouTube
Speaker 13: and you come across sort of a late night talk
Speaker 13: show with a particular artist on that Let's say Bono
Speaker 13: is talking to ConA O'Brien, that will influence your songworkommendations
Speaker 13: on YouTube music, and suddenly you might see more Bono
Speaker 13: or even more ConA O'Brien podcasts. So it's this weird amalgamation.
Speaker 13: And that is one thing that I think YouTube has
Speaker 13: always struggled with, what is its identity. It's this massive platform,
Speaker 13: but they've tried to carve out separate brands. They have
Speaker 13: YouTube TV, which is for pay television, and this is
Speaker 13: YouTube Music, which is a standalone app. But again it's
Speaker 13: trying to take advantage of some of that scale and
Speaker 13: sort of data that they've collected over the years from
Speaker 13: your viewing habits on YouTube.
Speaker 4: Proper well, so real quick viewing habits you have to
Speaker 4: kind of accept that the consumer has different habits and
Speaker 4: different markets around the world. Right, where is the growth
Speaker 4: for YouTube music coming from? Not necessarily here in North America.
Speaker 13: It's coming from a lot of emerging markets where YouTube
Speaker 13: is gigantic, just the video website is gigantic. And I
Speaker 13: think that's a key thing that that Google is really
Speaker 13: leading in. Of those one hundred million subscribers for YouTube subscriptions,
Speaker 13: they don't break down the difference between YouTube's ads free
Speaker 13: video site that's one subscription, and the music player. The
Speaker 13: way they've sort of grown both of them is by
Speaker 13: merging them into this sort of all in one package
Speaker 13: that you can get just called the YouTube Premium plan,
Speaker 13: and that includes the music subscription. The thing is, you know,
Speaker 13: for me, I've been I subscribe to YouTube TV, Google
Speaker 13: Cloud Storage, YouTube Premium, but I still have not brought
Speaker 13: myself to use the music player. I still subscribe to Spotify,
Speaker 13: but I will say, just using it this past week,
Speaker 13: it's pretty interesting. It's a lot different than what you
Speaker 13: see from Apple and Spotify and Amazon, and I think
Speaker 13: it's worth to go if you haven't tried it.
Speaker 4: Theasting car, thank you very much. Mobile video editing app
Speaker 4: cap cut is gaining popularity, putting pressure on long time
Speaker 4: creative software leaders like Adobe. Capcut is owned by byte Dance,
Speaker 4: TikTok's parent company, meaning the threat to ban TikTok would
Speaker 4: mark the end for capcut in the US as well.
Speaker 4: That's bringing Bloomberg's Brady Fort He's been writing about this.
Speaker 4: You look at a sense of hower data and starting
Speaker 4: twenty twenty pandemic it just usage of capcut is absolutely
Speaker 4: rocketed and taking it to a new level.
Speaker 3: Yep.
Speaker 14: So Adobe, maker of creative software like Photoshop, Premiere, all
Speaker 14: the others, they have long hoped to kind of get
Speaker 14: a piece of this more casual content creative market.
Speaker 3: Cap Cuts been able to just go crazy with that.
Speaker 14: And why is that because they're almost the same company
Speaker 14: as TikTok, right, And so it's here on TikTok and
Speaker 14: you see a certain video format, you could say, hey,
Speaker 14: let me recreate this. It is a format of editing
Speaker 14: that is so much simpler than what existed before it,
Speaker 14: and it's picked up like three hundred million monthly active
Speaker 14: users in a way that's pretty wild.
Speaker 4: So the risk is by association and same parent company
Speaker 4: TikTok's fate, cap cuts is very closely tied to it.
Speaker 3: Yeah, exactly right. I mean the bill.
Speaker 14: We had a senior lawmaker confirmed to us, Yes, this
Speaker 14: wood can you know include cap cut.
Speaker 3: Cap cut is on my byte Dance.
Speaker 14: They share office space with TikTok in La, So yeah,
Speaker 14: all of the same risks apply. Will it be hard
Speaker 14: to find someone to buy cap cut?
Speaker 3: Would bite Dance even be open to that? That's not clear.
Speaker 14: What is clear is we have a lot of users
Speaker 14: that would probably be not too happy if this app.
Speaker 4: Went poof interesting for Adobe day, I mean what they've
Speaker 4: struggled to why. And then also, you know, for cap cut,
Speaker 4: it would basically take their legs out from underneath them
Speaker 4: in this battle.
Speaker 14: Well, it's a funny thing for Adobe because you might think, oh, well,
Speaker 14: if cap cut goes away, it's good for them, But
Speaker 14: not really, because TikTok is also a place where, you know,
Speaker 14: content creation is good for Adobe. The more social media
Speaker 14: there is, the more you need creative content creation apps.
Speaker 14: And so it's kind of a darned if you do,
Speaker 14: darned if you don't. For Adobe.
Speaker 3: Here, as it relates to cap cuts existence.
Speaker 5: Capcut making any money? Is it hundred bible.
Speaker 14: Five million a year according to Censor Tower estimates, which
Speaker 14: is I mean, you know, that's a lot in terms
Speaker 14: of occurring revenue at this stage in the app's life.
Speaker 4: That is no joke Blimdke's Brady Ford bringing this new
Speaker 4: name to us. But go into the story and look
Speaker 4: at the chart. I mean the growth relative to the
Speaker 4: to the peers or competition is absolutely wild.
Speaker 5: What are you using right now?
Speaker 4: I mean there's there's a frustration that text to video
Speaker 4: or is in particular, is not where we kind of
Speaker 4: want it to be. It has limitations, and that's part
Speaker 4: of the Adobe story as well.
Speaker 3: Yeah.
Speaker 14: Absolutely, And I think that the whole idea that text
Speaker 14: to videos what's gonna destroy the incumbents.
Speaker 3: I think that's actually quite a bit further out.
Speaker 14: Cap Cut is this interesting thing where it's somewhere in between,
Speaker 14: where it uses a lot of AI, uses a.
Speaker 3: Lot of templates in between.
Speaker 14: I mean, I used to make documentaries before I became
Speaker 14: more of a print journalist, and a lot of my
Speaker 14: friends from that era are starting to switch.
Speaker 3: Off of apps like Adobe.
Speaker 14: They're starting to go of these simpler things, and I
Speaker 14: think it's happening across the industry that the true text
Speaker 14: to video AI. It's out there, it's coming. But what's
Speaker 14: happening today is these simpler tools.
Speaker 4: And you go back to the idea, if you're a
Speaker 4: creator on TikTok, well, why would you not use something
Speaker 4: this analogous like cap cart.
Speaker 5: Yes, they've the stout parent as well.
Speaker 4: Bloomberg's Brady Ford constantly unearthing things that I did not
Speaker 4: know about. That does it for this edition of Bloomberg Technology.
Speaker 4: Stay with us this week we will continue to break
Speaker 4: down the biggest technology earnings and my goodness, what a
Speaker 4: week it is in that context.
Speaker 5: And don't forget to check out our podcast.
Speaker 4: You can find it on the terminal as well as
Speaker 4: online at Apple, Spotify, iHeart, and all of the Bloomberg
Speaker 4: platforms from New York City.
Speaker 5: This week, this is Bloomberg Technology.