WEBVTT - Apple's AI Delay and Trump's Pro-Crypto Turn 0:00:00.120 --> 0:00:07.160 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.680 --> 0:00:13.960 From Mahard where Innovation, Money and power Collie in Silicon Valley, NBN. 0:00:14.280 --> 0:00:17.759 This is Bloomberg Technology with Caroline Hyde. 0:00:17.400 --> 0:00:34.560 And Ed Ludlow, live from Bloomberg's World headquarters in New York. 0:00:34.640 --> 0:00:36.519 This is Bloomberg Technology. Coming up this. 0:00:36.520 --> 0:00:40.560 Hour, Apple's AI delay, a Bloomberg exclusive on Apple Intelligence 0:00:40.840 --> 0:00:45.680 rolling out later. Post iOS update plus from Cryptocritic to 0:00:45.760 --> 0:00:49.519 bitcoin backer. Trump vows changes at the SEC and if 0:00:49.560 --> 0:00:54.240 re elected, to make bitcoin great again. And Deadpool's domination 0:00:54.360 --> 0:00:58.720 the Disney film shatters box office records on opening weekend. 0:00:58.840 --> 0:01:02.080 This is a really big important week for megancap earnings. 0:01:02.120 --> 0:01:04.399 Take a look at the Nasdaq one hundred. We're up 0:01:04.440 --> 0:01:07.000 meaningfully in the session, but we're coming off the back 0:01:07.040 --> 0:01:08.280 of three straight. 0:01:07.959 --> 0:01:09.680 Weeks of weekly declines. 0:01:09.920 --> 0:01:12.040 We were talking over the weekend about the NAZAK one 0:01:12.120 --> 0:01:15.440 hundred being in correction territory. You have ten trillion dollars 0:01:15.520 --> 0:01:19.640 or so of marketcap reporting across Microsoft, Apple, Meta, and 0:01:19.760 --> 0:01:22.360 of course Amazon. We will get into that. Apple is 0:01:22.360 --> 0:01:25.240 a name that we're watching really closely. It kind of 0:01:25.280 --> 0:01:28.520 opened lower and it's been chopping, trading choppy, and now 0:01:28.520 --> 0:01:32.880 it's modestly lower, basically flat. A Bloomberg exclusive, Apple's AI 0:01:33.000 --> 0:01:36.400 features have been delayed, and we'll miss the initial release 0:01:36.680 --> 0:01:40.360 of iOS eighteen in September. According to Bloomberg's reporting, the 0:01:40.400 --> 0:01:44.080 company plans to release Apple Intelligence by October, but will 0:01:44.120 --> 0:01:47.800 make it available to software developers for early testing as 0:01:47.800 --> 0:01:51.840 soon as this week, an atypical strategy for the tech giant. 0:01:52.000 --> 0:01:55.720 I want to welcome back Bloomberg's Mark German explain the 0:01:55.760 --> 0:01:57.720 reporting here because the detail is important. 0:01:57.720 --> 0:02:00.559 Mark, thank you so much for her. I mean great 0:02:00.600 --> 0:02:04.440 to be back Apple Intelligence. This is Apple's big initiative 0:02:04.440 --> 0:02:07.200 for the upcoming year. This is Apple showing the market, 0:02:07.320 --> 0:02:12.000 showing consumers that it too has generative artificial intelligence features. 0:02:12.200 --> 0:02:14.639 They announced these in June. The intention was to bring 0:02:14.680 --> 0:02:17.920 them to market with iOS eighteen and iPad os eighteen, 0:02:18.200 --> 0:02:21.280 which will launch sometime in September. But now I'm told 0:02:21.320 --> 0:02:24.160 those are being pushed back to iOS eighteen point one 0:02:24.200 --> 0:02:27.120 and iPad os eighteen point one. Now this is not 0:02:27.200 --> 0:02:29.919 a big delay, but this means that they likely won't 0:02:30.000 --> 0:02:33.239 come pre installed with the iPhone sixteen when those devices 0:02:33.280 --> 0:02:35.880 go on sale in September, and it also means the 0:02:35.880 --> 0:02:38.800 features will come via software update by October, so it's 0:02:38.840 --> 0:02:41.680 about a few week delay. It's not a huge deal, 0:02:41.960 --> 0:02:44.200 but it shows that the company is still racing to 0:02:44.520 --> 0:02:47.920 iron things out and fix bugs before this very important 0:02:47.919 --> 0:02:48.560 public launch. 0:02:48.680 --> 0:02:51.200 I'm going to get into the stock story with my 0:02:51.280 --> 0:02:54.320 next guess, but I think it's worth recounting the basics 0:02:54.320 --> 0:02:58.120 of Apple Intelligence. So I've got iPhone fifteen Pro, which 0:02:58.160 --> 0:03:00.320 I think in the end will qualify me to be 0:03:00.320 --> 0:03:04.399 able to get Apple Intelligence. But just explain the rollout 0:03:04.520 --> 0:03:06.839 broadly across what kind of device you need to have, 0:03:07.120 --> 0:03:08.520 and then like what it's going to do. 0:03:09.639 --> 0:03:13.320 Yeah, So, first of all, Apple Intelligence requires devices if 0:03:13.320 --> 0:03:16.640 you're on the Mac with Apple Silicon or if you 0:03:16.680 --> 0:03:19.560 have an iPad or iPhone devices with a gigabytes of RAM. 0:03:19.800 --> 0:03:22.600 So for the iPad, that means any iPad with an 0:03:22.720 --> 0:03:23.320 M one chip. 0:03:23.360 --> 0:03:24.960 Orneur and Apple start. 0:03:25.280 --> 0:03:27.880 Including M one chips with the iPad Pro and then 0:03:27.960 --> 0:03:31.480 later the iPad Air beginning in twenty twenty one. Now 0:03:31.480 --> 0:03:33.600 the iPhone is where things get a little bit more interesting. 0:03:33.919 --> 0:03:37.400 Today there's only two iPhone models that will support Apple Intelligence, 0:03:37.640 --> 0:03:40.839 the iPhone fifteen Pro and the iPhone fifteen Promas that's 0:03:40.880 --> 0:03:43.000 because those are the only two iPhones on sale right 0:03:43.040 --> 0:03:45.760 now that include a gigabytes of RAM. Now that gets 0:03:45.800 --> 0:03:48.960 interesting because there's going to be soon four more models 0:03:49.280 --> 0:03:51.360 that have a gigabytes of RAM. Those are all the 0:03:51.360 --> 0:03:54.600 iPhone sixteen's, the regular one, the Plus, the Pro, and 0:03:54.640 --> 0:03:58.000 the Promax launching in September, so pretty soon a bunch 0:03:58.040 --> 0:04:01.400 of more iPhones will include Apple Intelligence. That's so interesting 0:04:01.440 --> 0:04:04.360 because that is probably going to spur people to upgrade 0:04:04.360 --> 0:04:05.960 their iPhone give it. It's not going to come to 0:04:06.000 --> 0:04:06.760 older models. 0:04:07.040 --> 0:04:07.200 Now. 0:04:07.200 --> 0:04:10.440 Apple Intelligence includes a bunch of AI features. It's basically 0:04:10.520 --> 0:04:12.600 a cash all term for a lot of new AI 0:04:12.640 --> 0:04:16.480 features coming to the Apple devices. That includes being able 0:04:16.520 --> 0:04:20.719 to create images, integrate with chat, GPT, a new version 0:04:20.760 --> 0:04:24.520 of Siri, the ability to have writing tools so you 0:04:24.560 --> 0:04:26.760 can write something in an email and it will be 0:04:26.800 --> 0:04:30.039 able to summarize it for you, shorten it, make it 0:04:30.080 --> 0:04:35.480 more conversational, be able to summarize incoming text messages, transcribe 0:04:35.520 --> 0:04:38.279 a voice memo or a phone call and then create 0:04:38.279 --> 0:04:40.839 a summary for you. So just a bunch of different 0:04:40.839 --> 0:04:45.440 AI features across the board. These aren't anything extraordinarily innovative 0:04:45.560 --> 0:04:47.640 or brand new. Not a lot that we haven't seen 0:04:47.640 --> 0:04:51.039 for other platforms before. But the deep integration and the 0:04:51.080 --> 0:04:53.560 ease of use and the interface that you're going to 0:04:53.560 --> 0:04:56.560 see on the Apple devices really takes it up a 0:04:56.600 --> 0:04:58.080 notch against rivals. 0:04:58.320 --> 0:05:03.279 Apple Repoles fiscal thed quarder earnings Thursday after the market close. 0:05:03.360 --> 0:05:04.720 I heard a rumor that you and I are going 0:05:04.760 --> 0:05:06.359 to be seeming up on the top Live blog. That 0:05:06.440 --> 0:05:09.240 might be news to you. Give me the Mark Germans 0:05:09.279 --> 0:05:11.440 what to watch list for this Apple print. 0:05:12.360 --> 0:05:14.680 Yeah, this is an interesting one because you're really going 0:05:14.760 --> 0:05:18.040 to want to pay attention to the guidance that Apple 0:05:18.080 --> 0:05:20.160 CFO Luca Maistry and Tim Cook. 0:05:20.000 --> 0:05:20.720 Give on this call. 0:05:20.760 --> 0:05:22.560 They're not going to give you numbers, but they're going 0:05:22.640 --> 0:05:25.800 to imply probably how the iPhone is going to do. 0:05:25.880 --> 0:05:28.279 So that's really going to be the most important part there, 0:05:28.400 --> 0:05:30.240 because there was not a lot of new hardware launch 0:05:30.360 --> 0:05:32.760 during the quarter that we really care about other than 0:05:32.760 --> 0:05:35.359 the new iPads. So all eyes are going to be 0:05:35.560 --> 0:05:36.800 on that four looking. 0:05:36.480 --> 0:05:39.640 Commentary Bloomberg's Mark German, it is incredible to have you 0:05:39.720 --> 0:05:41.400 back here on Bloomberg Technology. 0:05:41.440 --> 0:05:41.760 Thank you. 0:05:42.040 --> 0:05:44.320 Let's stick with the Apple story and bringing Maxim Group 0:05:44.360 --> 0:05:47.560 Managing Director tom Forte hold on the stock one hundred 0:05:47.560 --> 0:05:51.000 and ninety five dollars price target. What we didn't necessarily 0:05:51.000 --> 0:05:54.080 talk about in Mark's reporting is why it's important. A 0:05:54.080 --> 0:05:56.880 lot of the run up in the stock over whatever 0:05:56.880 --> 0:05:59.640 time period you might choose, is optimism that this is 0:05:59.720 --> 0:06:03.960 come a real tangible effort on artificial intelligence. So your 0:06:03.960 --> 0:06:07.680 response to that reporting, it's a matter of weeks in 0:06:08.120 --> 0:06:11.160 the rollout of Apple Intelligence, but it seems significant. 0:06:11.360 --> 0:06:13.880 Sure, So when I think about my hold rating on Apple, 0:06:14.560 --> 0:06:18.359 the question becomes how much are investors potentially ahead of 0:06:18.400 --> 0:06:21.880 themselves when thinking about the upgrade cycle for AI. I 0:06:21.880 --> 0:06:25.200 certainly think they'll be an upgrade cycle for AI. In 0:06:25.279 --> 0:06:28.520 our numbers, we're looking for essentially half the lift they 0:06:28.520 --> 0:06:31.279 got from five G. And the reason we think it'll 0:06:31.320 --> 0:06:33.440 be half the lift not as much of a lift, 0:06:33.720 --> 0:06:38.080 is they have pressure from a regulatory standpoint in Europe, 0:06:38.080 --> 0:06:40.160 which is about twenty five percent of their sales, and 0:06:40.200 --> 0:06:42.400 in China, which is about twenty percent in their sales, 0:06:43.000 --> 0:06:44.880 and now we're seeing that they're going to have a 0:06:44.920 --> 0:06:48.880 slower rollout of Apple Intelligence. So I think clearly there'll 0:06:48.880 --> 0:06:50.719 be an upgrade cycle. I just don't think it'll be 0:06:50.800 --> 0:06:53.720 as significant as what's already reflected in the shares. 0:06:54.120 --> 0:06:56.400 One of the things we've been thinking about bobout technology 0:06:56.480 --> 0:06:59.400 is basically, for every dollar put into AI, how many 0:06:59.440 --> 0:07:01.279 dollars are comeing out for each of these companies. In 0:07:01.320 --> 0:07:04.479 the case of like the cloud players, it's a bit 0:07:04.600 --> 0:07:08.080 more easy to do the math AI infrastructure investment top 0:07:08.120 --> 0:07:11.120 line growth. But in Apple's case it seems like Apple 0:07:11.160 --> 0:07:15.800 intelligence that they hope it spurs upgrade cycles, right because 0:07:15.800 --> 0:07:18.120 you need the hardware that's compatible with it. As as 0:07:18.200 --> 0:07:21.560 Mark outlined, what's your model for how a dollar in 0:07:21.680 --> 0:07:24.240 translate to however many dollars out for Apple? 0:07:24.560 --> 0:07:28.240 This is a good example where artificial intelligence can result 0:07:28.280 --> 0:07:30.960 in sales. I think the challenge you've seen in enterprise 0:07:31.040 --> 0:07:35.680 software is heavy level of investment spend for artificial intelligence 0:07:35.960 --> 0:07:38.560 and not a near term twelve to eighteen month impact. 0:07:38.920 --> 0:07:40.720 The size of the price for Apple here is about 0:07:40.720 --> 0:07:43.280 fifty billion dollars. So if you look at the incremental 0:07:43.320 --> 0:07:45.680 revenue they generated from iPhone, which is about half their 0:07:45.720 --> 0:07:49.680 sales on five G, they added fifty billion a year 0:07:49.720 --> 0:07:53.040 in annual revenue on the five G upgrade cycle. So 0:07:53.080 --> 0:07:55.640 to the extent that AI spurs something similar. You could 0:07:55.640 --> 0:07:58.440 be looking at an incremental fifty billion of revenue for Apple. 0:07:58.720 --> 0:08:01.760 Translating that to EPs, we're looking at card mid to 0:08:01.880 --> 0:08:05.200 high single digit EPs growth from flat growth. 0:08:05.240 --> 0:08:07.480 We're talking the Tom Forte of Mattim Group, who has 0:08:07.520 --> 0:08:09.120 a hold on the stock one hundred and ninety five 0:08:09.120 --> 0:08:12.960 dollars price target earnings. Mark set out what he thinks 0:08:12.960 --> 0:08:16.120 we should be looking for. A lesson learned in recent 0:08:16.200 --> 0:08:19.520 quarters is maybe don't put too much emphasis on the 0:08:19.560 --> 0:08:23.240 third party data, particularly maybe around China, because the third 0:08:23.320 --> 0:08:26.720 party data tells us that the iPhone is slipping in 0:08:26.800 --> 0:08:30.520 China to domestic handset makers, and yet the last earnings 0:08:30.720 --> 0:08:33.160 on the call in particular, they said, no, we think 0:08:33.200 --> 0:08:36.880 we've got growth back there those slightly in congruous or 0:08:36.880 --> 0:08:42.560 competing data points. With that context in mind, what are 0:08:42.559 --> 0:08:45.160 you bracing for for Luka Maistreet to say or otherwise? 0:08:45.240 --> 0:08:47.400 Yeah, so similar, Mark said, I'm going to try to 0:08:47.440 --> 0:08:50.920 reverse engineer essentially what the outlook is for iPhone sales 0:08:51.080 --> 0:08:53.720 in the September recorder. So the expectation will be that 0:08:53.760 --> 0:08:56.080 they'll have a new iPhone sixteen that I'll come up 0:08:56.120 --> 0:08:59.120 in the September recorder. Yes, the software will lag into 0:08:59.160 --> 0:09:02.560 the December recorder. But to the extent that that is 0:09:02.600 --> 0:09:04.880 the commentary I'm looking for. And if you looked at 0:09:04.880 --> 0:09:08.240 the June quarter, the same exercise suggested that iPhone sales 0:09:08.280 --> 0:09:11.360 would be negative in the June quarter. So did we 0:09:11.360 --> 0:09:14.679 see a transition from negative to positive on the upgrade 0:09:14.679 --> 0:09:15.440 cycle for AI? 0:09:15.920 --> 0:09:18.840 Where's the biggest surprise going to be? In the Apple print? 0:09:19.120 --> 0:09:22.000 The biggest surprise is going to be I think that 0:09:22.080 --> 0:09:26.280 the incremental lift to iPhone sales from AI will not 0:09:26.360 --> 0:09:29.360 be as significant as currently reflected in the stock stocks 0:09:29.360 --> 0:09:32.240 trading it north of a thirty times pe the tech 0:09:32.320 --> 0:09:33.319 big tech peers. 0:09:33.040 --> 0:09:34.920 Are more like twenty seven and a half. 0:09:35.160 --> 0:09:37.319 And I think right now investors are just expecting too 0:09:37.360 --> 0:09:40.040 much of a boost for Apple from AI. 0:09:40.440 --> 0:09:43.040 A story we discussed less and we've actually gone away 0:09:43.080 --> 0:09:46.360 from with Amazon as well as ecosystem. You're a device user, 0:09:46.400 --> 0:09:49.080 but you now use services. Do you think Apple moves 0:09:49.080 --> 0:09:50.679 back to that story with AI? 0:09:50.920 --> 0:09:52.400 That is a great story for Apple. 0:09:52.720 --> 0:09:56.320 So to the extent that incremental iPhone sales result in 0:09:56.320 --> 0:10:00.800 incremental services revenue that could enable the company. 0:10:00.640 --> 0:10:02.600 To perhaps support a higher multiple. 0:10:02.920 --> 0:10:05.760 So ecosystem is very important to Apple and to the 0:10:05.800 --> 0:10:09.040 extent that they can leverage AI to get consumers more 0:10:09.080 --> 0:10:12.320 excited about their ecosystem. Here to advance our purchases on 0:10:12.400 --> 0:10:15.199 higher margin services that could be wonderful for the stack. 0:10:15.360 --> 0:10:18.720 Tom Forte, Maxim Group Managing Director, great to have you 0:10:18.760 --> 0:10:28.760 back on. It's a big week for big tech with 0:10:28.840 --> 0:10:32.440 four of the magnificent seven megacaps posting their quarterly earnings. 0:10:32.480 --> 0:10:33.800 What a calendar that is. 0:10:34.000 --> 0:10:36.200 You might think your attentions are over in Paris with 0:10:36.240 --> 0:10:38.640 the Olympics, but in the world of technology, you are 0:10:38.640 --> 0:10:42.640 glued to Bloomberg Technology right through the course of the week. 0:10:42.720 --> 0:10:45.000 And it's not just the megacaps, some of the chip 0:10:45.080 --> 0:10:47.319 names as well. Let's get the outlook with Brad Erickson, 0:10:47.640 --> 0:10:52.000 Capital Markets Research analysts at RBC. I think in order 0:10:52.040 --> 0:10:53.880 to look forward, I look back at last week in 0:10:53.960 --> 0:10:57.720 alphabet and the lessons learned, the questions that investors posed, 0:10:58.080 --> 0:10:59.640 and we've already talked about it in the show, but 0:10:59.800 --> 0:11:02.000 I think it's a question about for every dollar you 0:11:02.040 --> 0:11:05.560 put into AI infrastructure investment, how many dollars are you 0:11:05.600 --> 0:11:07.839 getting out in the near term for AI? 0:11:08.040 --> 0:11:09.520 Is that how you'd approach this. 0:11:09.440 --> 0:11:12.560 Week Yeah, I think that's going to be a key topic. 0:11:13.480 --> 0:11:15.360 You know, we're not going to get a ton like 0:11:15.400 --> 0:11:18.320 out of Meta or Amazon, for example, in terms of 0:11:18.360 --> 0:11:21.640 what they're spending this year. People are already generally kind 0:11:21.640 --> 0:11:23.960 of understand that. I think we're going to be looking 0:11:24.000 --> 0:11:27.480 at the marginal dollars, like you said, And I think 0:11:27.480 --> 0:11:29.920 what's interesting is I think a quarter or two ago, 0:11:30.040 --> 0:11:33.600 people were very focused on specifically what AI was driving. 0:11:33.640 --> 0:11:35.560 But I think what we're learning more and more is 0:11:35.559 --> 0:11:38.640 that AI is really sort of integrating into these models 0:11:38.640 --> 0:11:41.520 and so you can't unpack it, which is okay because 0:11:41.520 --> 0:11:45.000 then we actually can evaluate the dollar growth in these 0:11:45.000 --> 0:11:49.040 companies and what is sort of justifying those CAPEX investments. 0:11:49.840 --> 0:11:52.200 There are things that they're sort of idiosyncratic. 0:11:52.280 --> 0:11:55.760 You know Meta's case, we kind of forget into massive 0:11:56.200 --> 0:12:00.480 portfolio of social media companies. But they last quarter told 0:12:00.559 --> 0:12:03.800 us about their plans for infrastructure, which wins out the 0:12:04.440 --> 0:12:07.160 forward looking AI story or the backward looking history of 0:12:07.200 --> 0:12:07.760 that company. 0:12:08.280 --> 0:12:08.480 Oh. 0:12:08.880 --> 0:12:11.280 I think people are definitely going to be looking forward right, 0:12:11.600 --> 0:12:13.720 the story will be the same. We'll look at the 0:12:13.760 --> 0:12:16.760 revenue trends and evaluate kind of what they're saying about 0:12:16.800 --> 0:12:19.800 the ad market and their products in particular, and then 0:12:19.840 --> 0:12:21.800 the focus on the call is going to shift to 0:12:21.840 --> 0:12:25.880 Mark talking about his vision for AI and trying to 0:12:25.920 --> 0:12:29.600 give people some comfort. I think this quarter in again, 0:12:29.720 --> 0:12:33.400 why are they making such big investments where maybe we're 0:12:33.480 --> 0:12:35.360 going to see you know, maybe a little bit of 0:12:35.960 --> 0:12:38.600 sort of call it delayed gratification in terms of when 0:12:38.640 --> 0:12:41.320 we see those investments payoff. Right, he used the word 0:12:41.400 --> 0:12:45.480 last quarter, multi year investment cycle. That's a scary term 0:12:45.600 --> 0:12:47.640 for people. So we'll see what kind of performance he 0:12:47.679 --> 0:12:49.520 puts up on the call later for this week. 0:12:50.200 --> 0:12:53.400 For me, Brad, this is a week where being a 0:12:53.440 --> 0:12:56.520 CEO or a CFO you kind of got to earn 0:12:56.559 --> 0:12:59.080 that paypacket, Do you know what I mean? That it 0:12:59.160 --> 0:13:01.040 comes down to community at the end of the day. 0:13:01.080 --> 0:13:04.120 I found last quarter fascinating. How much kind of faith 0:13:04.200 --> 0:13:06.959 or credence do you put into the words spoken by 0:13:07.000 --> 0:13:07.880 the people at the top. 0:13:08.559 --> 0:13:12.880 Yeah, you know, I think they're a little bit different cases. Right, 0:13:12.920 --> 0:13:15.440 we cover Meta and Amazon, so maybe I'll stick stick 0:13:15.520 --> 0:13:19.840 with my commentary there in terms of Mark Zuckerberg and Meta. 0:13:19.880 --> 0:13:22.400 You know, I think one of the adages we've heard 0:13:22.480 --> 0:13:25.520 lately is you want to buy Mark when he's feeling 0:13:25.679 --> 0:13:28.280 maybe a little bit more confident, and sell him when 0:13:28.280 --> 0:13:32.240 he's when he's feeling or so yeah, sorry, buy him 0:13:32.280 --> 0:13:35.120 when he's feeling a little little bit less confident, sell 0:13:35.200 --> 0:13:38.480 him when he's a little bit more confident. Last quarter, 0:13:38.559 --> 0:13:41.440 I think they're delivering such high growth. They were twenty 0:13:41.440 --> 0:13:45.680 seven percent growth last quarter, twenty two percent this quarter. 0:13:46.520 --> 0:13:48.480 You know, I think that that felt a little bit tough, 0:13:48.520 --> 0:13:52.320 and obviously the stocks sold off. Historically, I think you've 0:13:52.320 --> 0:13:54.240 seen that flip to the other side, So we'll see 0:13:54.240 --> 0:13:55.880 what kind of tone we get out of him here. 0:13:56.160 --> 0:13:59.720 But if he's basically talking to maybe more moderating growth 0:13:59.800 --> 0:14:03.280 rate and feeling a little bit better about those investments, 0:14:03.320 --> 0:14:06.760 that can be a positive sigence on Amazon's it's I 0:14:06.760 --> 0:14:10.040 think much simpler. You know, we expect the Indijas to 0:14:10.040 --> 0:14:13.040 come out with a very confident tone around AI. They're 0:14:13.080 --> 0:14:14.800 not going to get into the game of sort of 0:14:15.320 --> 0:14:18.840 promoting themselves or even speaking to how much AI is 0:14:18.880 --> 0:14:22.040 exactly contributing. But I do expect their commentary to remain 0:14:22.600 --> 0:14:24.600 very polish on AI in general. 0:14:24.680 --> 0:14:25.840 So that's an interesting point. 0:14:25.840 --> 0:14:28.680 What they said last quarter is that for aws revenue 0:14:28.760 --> 0:14:32.360 run rate one hundred billion, but specifically for generative AI 0:14:33.080 --> 0:14:36.200 revenue run rate in the billions, multi billions of dollars. 0:14:36.520 --> 0:14:37.840 That seemed like enough. 0:14:38.800 --> 0:14:41.920 So if you don't expect them to kind of over 0:14:41.960 --> 0:14:44.440 exaggerate or expand on that, what do they need to 0:14:44.480 --> 0:14:47.080 say this quarter to keep investors convinced? 0:14:47.520 --> 0:14:50.440 Yeah, I think you know, previously they I think they 0:14:50.480 --> 0:14:54.760 had been a little bit behind, certainly on even on 0:14:54.960 --> 0:14:59.080 just the acquisition of GPUs necessary to train up their 0:14:59.080 --> 0:15:02.040 models and their platfor so I think maybe give them 0:15:02.080 --> 0:15:06.000 a little bit more color on progress forward progress and 0:15:06.040 --> 0:15:09.560 aggression there will be super helpful. The other thing, too, 0:15:09.680 --> 0:15:12.240 is that, you know, one of the things they emphasize 0:15:12.280 --> 0:15:16.120 is when they say things like multi billion dollar run 0:15:16.200 --> 0:15:18.800 rates for AID, they're really talking about broader AI, which 0:15:18.880 --> 0:15:23.080 they've been working on for years, very much pre dating 0:15:23.400 --> 0:15:26.680 the onset of generative AI last year. So again it's 0:15:26.720 --> 0:15:29.480 a little bit hard to unpack, but that would be 0:15:29.520 --> 0:15:31.640 the general forward commentary, I would say. 0:15:31.880 --> 0:15:34.960 Brad Eggs and Internet analyst obviously Capital Markets. Great to 0:15:34.960 --> 0:15:36.840 have you on the show. Thank you all right. Coming 0:15:36.880 --> 0:15:40.880 up on BlueBag technology, France faces an Internet disruption. More 0:15:40.920 --> 0:15:44.560 on the latest infrastructure attack as the Paris Olympics gets 0:15:44.640 --> 0:15:47.600 Underwegh also taking a quick look at shares on Semi 0:15:47.680 --> 0:15:49.640 up eleven and a half twelve percent, one of the 0:15:49.720 --> 0:15:53.040 best performers in major enc's s and P five hundred 0:15:54.000 --> 0:15:58.560 strong earnings basically second quarter adjusted earnings per share beat estimates. 0:15:59.280 --> 0:16:02.400 You know, it's a name where their chips are more 0:16:02.440 --> 0:16:04.720 related to kind of automotive industry. They have a wide 0:16:04.760 --> 0:16:07.360 arrange use case not so much AI, but it's a 0:16:07.440 --> 0:16:10.960 name that we track quarterly on this program. Good results. 0:16:11.040 --> 0:16:32.000 This is Bloomberg Technology. It's time for talking tech and 0:16:32.040 --> 0:16:34.680 first up. Shares of Ali Barber rising today, the stock 0:16:34.880 --> 0:16:38.080 hitting its highest than two months in Asia, trading investors 0:16:38.280 --> 0:16:41.160 cheering the e commerce giant and their plans to charge 0:16:41.160 --> 0:16:44.760 a higher service fee from merchants. Bloomberg reported that Ali 0:16:44.800 --> 0:16:47.520 Barber is set to raise their software service fee to 0:16:47.600 --> 0:16:51.760 zero point six percent, which will boost its core merchant 0:16:51.800 --> 0:16:55.480 revenue plus SHAWM plans for an EV expansion. The Chinese 0:16:55.480 --> 0:16:57.880 tech company has purchased a one hundred and thirty one 0:16:57.920 --> 0:17:00.480 acre plot of land in Beijing for one hundred and 0:17:00.520 --> 0:17:04.080 sixteen million dollars in an effort to expand its electric 0:17:04.119 --> 0:17:07.080 car production. Jarmi first entered the auto sector in March 0:17:07.400 --> 0:17:11.080 and has already delivered thirty thousand vehicles so far, with 0:17:11.119 --> 0:17:14.159 the company on track to reach its initial goal of 0:17:14.280 --> 0:17:19.119 one hundred thousand cars by November. And another infrastructure attack 0:17:19.240 --> 0:17:22.320 on France during the Olympics, this time a number of 0:17:22.320 --> 0:17:25.920 fiber optic cables carrying Internet services across the country were 0:17:26.000 --> 0:17:30.280 cut overnight. Orange, the Olympic telecom partner, said the connections 0:17:30.320 --> 0:17:33.760 into Paris and thus the Olympics were not affected. Just 0:17:33.840 --> 0:17:37.560 on Friday, coordinated fires on French trail lines had disrupted 0:17:37.640 --> 0:17:40.840 trains ahead of the opening ceremony. For more, let's bring 0:17:40.840 --> 0:17:44.080 in Bloomberg's benoir Bertelo out in Paris. You know, this 0:17:44.119 --> 0:17:47.400 is a story benoir where there are many questions who, what, where, 0:17:47.440 --> 0:17:48.040 when and why? 0:17:48.280 --> 0:17:49.920 But what's the latest fleas. 0:17:50.040 --> 0:17:53.600 Yeah, so clearly was a large scale attack under fiber 0:17:53.600 --> 0:17:58.000 on networks during the night between nine am, one am 0:17:58.040 --> 0:18:00.960 and three am toord middle of the night. There were 0:18:01.320 --> 0:18:06.440 nine places we are told across France where long distance 0:18:06.520 --> 0:18:10.080 fiber optic cables were cut. So really this is the 0:18:10.200 --> 0:18:15.240 highways of the Internet powering the network and thanks to 0:18:15.400 --> 0:18:18.919 redundancies there was no real impact, just a bit of 0:18:19.000 --> 0:18:23.320 latency for some customers. But clearly this is the scale 0:18:23.520 --> 0:18:28.119 of the attack that's a sort of borrowing authorities in 0:18:28.200 --> 0:18:31.119 France for the trains that the trains are back to 0:18:31.200 --> 0:18:35.680 normal as of today and it's been slowly going back 0:18:35.680 --> 0:18:38.280 to normal in the weekend, so so far, not really 0:18:38.359 --> 0:18:42.719 disruption of the Olympics. It's not been disrupting either the 0:18:42.720 --> 0:18:47.040 train or the internet outage have been disrupting the Olympics. 0:18:47.080 --> 0:18:49.159 But really it's the scale of these attacks and the 0:18:49.160 --> 0:18:52.639 fact that they are targeted across France rather than on 0:18:52.760 --> 0:18:57.920 Paris that is sort of interesting and surprising authorities. 0:18:58.000 --> 0:19:01.720 Then the out and in question I suppose is is 0:19:01.760 --> 0:19:06.399 there a link between the rail nodes that were a 0:19:06.480 --> 0:19:10.640 victim of ars and attacks last week and the cutting 0:19:10.680 --> 0:19:13.680 of fiber optic cables overnight. Is there any evidence that 0:19:13.680 --> 0:19:16.439 that is part of a wider and coordinated attack. 0:19:16.960 --> 0:19:20.440 So there is no evidence that we know of so far. 0:19:20.960 --> 0:19:25.520 There are two separate investigations that have been started by 0:19:25.560 --> 0:19:31.120 the Parious Prosecutors Office. Clearly, it's what's similar is that 0:19:31.160 --> 0:19:34.159 there are there is a good level of intelligence on 0:19:34.280 --> 0:19:37.800 where exactly to act, especially on the train attacks like 0:19:37.920 --> 0:19:43.040 these really were important nodes in the network, but there's 0:19:43.080 --> 0:19:46.280 no proof of or no indication so far of who 0:19:46.320 --> 0:19:49.720 could have done this. The Interior Minister this morning said 0:19:49.720 --> 0:19:52.720 they were advancing on this, but clearly there is no 0:19:52.760 --> 0:19:55.719 information of who could have done it and if there 0:19:55.760 --> 0:19:57.480 is a link between the two attacks. 0:19:58.400 --> 0:20:01.760 Away from the news head lines, it was a weekend 0:20:01.840 --> 0:20:05.879 where I everyone watching the preyram was glued to their television. 0:20:06.000 --> 0:20:10.159 I really enjoyed the rugby seven's Congratulations to France on 0:20:10.280 --> 0:20:14.120 incredible performance. What's it like in Paris now Benoir. What's 0:20:14.160 --> 0:20:16.840 the experience of being in the host city and host nation. 0:20:17.840 --> 0:20:22.040 It's a great atmosphere in Paris, Kelly. Lots of Parisians 0:20:22.080 --> 0:20:24.840 have feed the city, but it's a lot of people 0:20:24.880 --> 0:20:28.720 from across France that are coming to see to see 0:20:28.720 --> 0:20:32.240 the events and many tourists. Of course, the weather it 0:20:32.280 --> 0:20:35.199 is much better now, so that's that's great. Great location 0:20:35.840 --> 0:20:38.800 across the city that they've chosen to put the events 0:20:38.840 --> 0:20:41.800 location really in the middle of the city and it 0:20:41.920 --> 0:20:45.840 turns out to be great. So so far, transports in 0:20:45.880 --> 0:20:50.640 Paris are fine, there was no security incident, thanksfully so far, 0:20:51.040 --> 0:20:53.440 so I would say good for those visiting in. 0:20:53.400 --> 0:20:56.760 Paris, Bloomberg's Ben wir buttlo thank you so much. Great 0:20:56.760 --> 0:21:06.840 to have you on the ground in Paris, Welcome back 0:21:06.880 --> 0:21:09.760 to Bloomberg Technology, Ed Lovelow in New York City, and 0:21:09.800 --> 0:21:11.160 a very quick check in on the markets. 0:21:11.200 --> 0:21:14.080 I mean, we know the story this week. It's a story. 0:21:13.840 --> 0:21:17.240 About four of the biggest technology names reporting earnings and 0:21:17.280 --> 0:21:20.040 then as that one hundred is basically flat in the session, 0:21:20.080 --> 0:21:22.800 but the context is that it's coming off three straight 0:21:22.840 --> 0:21:25.320 weeks of weekly declines. There was a lot of talk 0:21:25.359 --> 0:21:28.159 about how close we are to a technical correction, so 0:21:28.240 --> 0:21:30.520 there is a lot at stake depending on how those 0:21:30.600 --> 0:21:34.720 earnings reports go in the moment. One asset class that's 0:21:34.720 --> 0:21:38.879