1 00:00:02,520 --> 00:00:12,720 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is a 2 00:00:12,760 --> 00:00:16,439 Speaker 1: live from Coast to Coast with Caroline Hide in New 3 00:00:16,560 --> 00:00:20,240 Speaker 1: York and Edla Low in San Francisco. 4 00:00:22,280 --> 00:00:24,120 Speaker 2: This is Bloomberg Tech coming up. 5 00:00:24,160 --> 00:00:27,400 Speaker 3: Open ai is working on financial models that could one 6 00:00:27,480 --> 00:00:31,200 Speaker 3: day replace the grunt works of junior bankers. Plus, President 7 00:00:31,240 --> 00:00:34,640 Speaker 3: Trump announces a rare Earth's deal with Australia to counter 8 00:00:34,840 --> 00:00:38,680 Speaker 3: China's dominance, and Warner Brothers Discovery says it has expanded 9 00:00:38,760 --> 00:00:43,480 Speaker 3: a strategic review of the business to maximize shareholder value. 10 00:00:43,479 --> 00:00:44,440 Speaker 2: And that's where we started. 11 00:00:44,440 --> 00:00:46,080 Speaker 3: It was the breaking news of the morning that move 12 00:00:46,200 --> 00:00:49,440 Speaker 3: markets Warner Brothers Discovery off session highs up nine percent. 13 00:00:49,880 --> 00:00:53,080 Speaker 3: They are looking at a range of strategic options, including 14 00:00:53,400 --> 00:00:56,120 Speaker 3: moving forward with the existing plan to split the business 15 00:00:56,360 --> 00:01:01,040 Speaker 3: into cable TV and then studios and streaming option spin offs, 16 00:01:01,320 --> 00:01:03,959 Speaker 3: selling some all of it. We will get a lot 17 00:01:04,000 --> 00:01:05,720 Speaker 3: more on this story later in the program. It is 18 00:01:05,720 --> 00:01:08,560 Speaker 3: the big move of the day. Another top story that 19 00:01:08,600 --> 00:01:12,600 Speaker 3: we are watching. Open ai is building out financial models 20 00:01:12,640 --> 00:01:15,880 Speaker 3: that could one day replace the grunt work of junior 21 00:01:15,920 --> 00:01:19,360 Speaker 3: bankers across the banking sector, with the help of a 22 00:01:19,440 --> 00:01:22,920 Speaker 3: secretive project inside the startup. Let's get to Bloomberg's chief 23 00:01:22,920 --> 00:01:26,920 Speaker 3: Wall Street correspondent Strida Nadaranjan. This is based on a 24 00:01:27,000 --> 00:01:31,720 Speaker 3: document the Bloomberg's scene on Project Mercury and conversation with sources. 25 00:01:32,240 --> 00:01:34,880 Speaker 3: What is project Mercury? What is it the open AI 26 00:01:35,000 --> 00:01:35,680 Speaker 3: is working on here? 27 00:01:36,160 --> 00:01:36,920 Speaker 2: Good question ed. 28 00:01:37,240 --> 00:01:40,679 Speaker 4: According to our reporters in Dubai spoke to sources, a 29 00:01:40,840 --> 00:01:42,800 Speaker 4: open AI got their hands on some document and the 30 00:01:42,840 --> 00:01:46,880 Speaker 4: so called Project Mercury is effectively open AI hiring ex 31 00:01:46,920 --> 00:01:50,320 Speaker 4: investment bankers as contractors, people who can help with the 32 00:01:50,440 --> 00:01:53,680 Speaker 4: modeling to us who can help the AI with training 33 00:01:53,720 --> 00:01:56,800 Speaker 4: it on how to write prompts, how to execute models, 34 00:01:56,960 --> 00:01:59,360 Speaker 4: and how to make sure that they could get into 35 00:01:59,360 --> 00:02:02,040 Speaker 4: a position where they can do some of the tasks 36 00:02:02,040 --> 00:02:04,840 Speaker 4: that are currently performed by associates and analysts on live 37 00:02:04,960 --> 00:02:09,360 Speaker 4: deals such as financial modeling. Their work on PowerPoint presentations 38 00:02:09,360 --> 00:02:12,200 Speaker 4: and Excel is something that takes up most of the 39 00:02:12,240 --> 00:02:15,079 Speaker 4: work hours for a lot of these junior bankers. It's 40 00:02:15,120 --> 00:02:17,600 Speaker 4: a lot of repetitive tasks. It's a lot of simple 41 00:02:17,680 --> 00:02:20,960 Speaker 4: task and there is very little strategic work there and 42 00:02:21,040 --> 00:02:23,480 Speaker 4: perhaps not even a whole lot of analytical work there. 43 00:02:23,520 --> 00:02:26,480 Speaker 4: So if you could use technology to replace some of that. 44 00:02:27,000 --> 00:02:29,360 Speaker 4: The hope is that you could free up some of 45 00:02:29,400 --> 00:02:33,320 Speaker 4: these junior bankers to do some of the bigger picture stuff. 46 00:02:33,440 --> 00:02:36,360 Speaker 4: So it will need an evolution of their skill set, 47 00:02:36,520 --> 00:02:40,080 Speaker 4: but also could put them into better use that would 48 00:02:40,080 --> 00:02:42,519 Speaker 4: not leave them jaded early in their career. 49 00:02:43,560 --> 00:02:43,840 Speaker 2: Srere. 50 00:02:43,880 --> 00:02:46,639 Speaker 3: I know the team over at Liquidity are probably watching 51 00:02:46,639 --> 00:02:50,040 Speaker 3: the show right now, worried about their audience as well. 52 00:02:50,480 --> 00:02:53,919 Speaker 3: This is the origin of the please fix meme, right 53 00:02:54,280 --> 00:02:57,840 Speaker 3: This is investment bankers, junior analysts who spend eighty or 54 00:02:57,840 --> 00:03:01,000 Speaker 3: one hundred hours a week working in x sell on 55 00:03:01,080 --> 00:03:03,800 Speaker 3: these types of tasks. You cover Wall Street inside and out. 56 00:03:04,000 --> 00:03:06,560 Speaker 3: You know these people just explain earlier at the top 57 00:03:06,560 --> 00:03:09,520 Speaker 3: of the show, I say grunt work. Go deep into 58 00:03:09,560 --> 00:03:12,519 Speaker 3: the grunt work that open AI wants to displace with 59 00:03:12,600 --> 00:03:13,800 Speaker 3: custom financial models. 60 00:03:14,040 --> 00:03:15,960 Speaker 4: I mean, you have to think about when you're working 61 00:03:16,040 --> 00:03:19,079 Speaker 4: in a live deal, what really are the requirements if 62 00:03:19,120 --> 00:03:21,600 Speaker 4: you are dealing with the client, you want to come 63 00:03:21,680 --> 00:03:26,679 Speaker 4: up with material with presentations, whether it is suggesting potential transactions, 64 00:03:26,720 --> 00:03:31,200 Speaker 4: coming up with valuation models. Industry comps looking at the 65 00:03:31,280 --> 00:03:35,200 Speaker 4: overall landscape out there that is effectively a lot of 66 00:03:35,320 --> 00:03:37,840 Speaker 4: open source research that needs to be done. That is 67 00:03:38,040 --> 00:03:42,160 Speaker 4: using a lot of your Excel skills and making sure 68 00:03:42,160 --> 00:03:44,840 Speaker 4: that you can do the modeling. That is inputting numbers 69 00:03:44,880 --> 00:03:48,160 Speaker 4: again and again, replacing numbers, putting in new estimates, and 70 00:03:48,240 --> 00:03:53,160 Speaker 4: coming up with figures that could outline various scenarios for 71 00:03:53,240 --> 00:03:55,920 Speaker 4: your clients. That is stuff that you could argue that 72 00:03:56,200 --> 00:03:59,680 Speaker 4: technology can do, can replace you in doing that, and 73 00:03:59,720 --> 00:04:03,320 Speaker 4: can do it better. And that's where the real promise 74 00:04:03,360 --> 00:04:05,800 Speaker 4: here comes. But also remember, and this is something where 75 00:04:05,800 --> 00:04:09,320 Speaker 4: you spoke about liquidity, but anyone who's followed this space 76 00:04:09,400 --> 00:04:12,160 Speaker 4: for long knows that when you talk about junior banker 77 00:04:12,240 --> 00:04:15,360 Speaker 4: workers about those eighty two hundred dollars work weeks, often 78 00:04:15,400 --> 00:04:19,560 Speaker 4: that figure is magnified because bankers, once they finished their work, 79 00:04:19,720 --> 00:04:22,720 Speaker 4: are waiting for hours on end, waiting for feedback from 80 00:04:22,760 --> 00:04:26,279 Speaker 4: their managers, who then come back with immediate responses and 81 00:04:26,400 --> 00:04:28,440 Speaker 4: fixes that you need to do, and there is a revision, 82 00:04:28,480 --> 00:04:32,400 Speaker 4: and you follow that cycle repeatedly till your manager is satisfied. 83 00:04:32,520 --> 00:04:34,920 Speaker 4: So perhaps what you also need is an AI solution 84 00:04:35,320 --> 00:04:38,360 Speaker 4: that can take care of that manager who will stop 85 00:04:38,920 --> 00:04:44,120 Speaker 4: focusing on those very little, small font level changes and allow. 86 00:04:43,880 --> 00:04:45,440 Speaker 2: You to focus on big picture stuff. 87 00:04:46,160 --> 00:04:49,200 Speaker 3: An Open AI spokesperson said the company employs a range 88 00:04:49,200 --> 00:04:51,800 Speaker 3: of experts to work generally or models that didn't really 89 00:04:51,839 --> 00:04:56,320 Speaker 3: address our reporting specifically. Bloomberg Street, Madarajan, thank you very much. 90 00:04:56,360 --> 00:04:59,480 Speaker 3: In other news, President Trump announced a rare earth steal 91 00:04:59,560 --> 00:05:03,120 Speaker 3: with yesterday I aimed at countering China's dominance in the 92 00:05:03,160 --> 00:05:06,080 Speaker 3: supply chain for critical metals. The move comes ahead of 93 00:05:06,120 --> 00:05:09,120 Speaker 3: expected trade talks between the US and China, with the 94 00:05:09,120 --> 00:05:12,799 Speaker 3: President expressing optimism about reaching a fair deal. 95 00:05:13,880 --> 00:05:16,360 Speaker 5: I expect we'll probably work out a very fair deal 96 00:05:16,400 --> 00:05:21,440 Speaker 5: with President Jiev China, so most of you will be 97 00:05:21,480 --> 00:05:23,240 Speaker 5: with us. It's going to be very exciting, and I 98 00:05:23,240 --> 00:05:25,599 Speaker 5: think we're going to work out something that's good for 99 00:05:25,680 --> 00:05:26,400 Speaker 5: both countries. 100 00:05:28,720 --> 00:05:31,559 Speaker 3: Bloomberg Senior Tech editor Mike Sheppard joins us from DC 101 00:05:31,760 --> 00:05:34,359 Speaker 3: A fair deal go into what a fair deal is 102 00:05:34,400 --> 00:05:36,599 Speaker 3: to the best of our knowledge and our reporting, and 103 00:05:36,640 --> 00:05:37,400 Speaker 3: what happens next. 104 00:05:38,520 --> 00:05:40,120 Speaker 6: Well, the fair deal will be in the eye of 105 00:05:40,120 --> 00:05:42,279 Speaker 6: the beholder, and the number one beholder here, of course, 106 00:05:42,400 --> 00:05:45,039 Speaker 6: is President Donald Trump. And it's important to note that 107 00:05:45,120 --> 00:05:49,440 Speaker 6: during that same conversation yesterday with reporters, he reiterated his 108 00:05:49,600 --> 00:05:53,400 Speaker 6: threat of triple digit tariffs against Chinese goods if Beijing 109 00:05:53,520 --> 00:05:56,720 Speaker 6: did not come with a satisfactory offer in his eyes. 110 00:05:56,880 --> 00:05:59,200 Speaker 6: And we have seen the President and his advisors in 111 00:05:59,279 --> 00:06:02,440 Speaker 6: recent days lay out some of their key points and 112 00:06:02,560 --> 00:06:06,320 Speaker 6: key sticking points in the negotiations. Of course, first and 113 00:06:06,360 --> 00:06:09,839 Speaker 6: foremost is rare earth. It is something that has dominated 114 00:06:09,880 --> 00:06:13,440 Speaker 6: the conversation for the past two weeks since China imposed 115 00:06:13,720 --> 00:06:17,240 Speaker 6: export controls on these minerals that are so crucial to 116 00:06:17,360 --> 00:06:21,240 Speaker 6: various points in the supply chains for autos, for consumer technology, 117 00:06:21,440 --> 00:06:25,800 Speaker 6: and even defense materiel. Now ed what we're watching also, though, 118 00:06:25,880 --> 00:06:29,160 Speaker 6: is pressure in other areas. Yesterday we saw Jamison Greer, 119 00:06:29,480 --> 00:06:32,560 Speaker 6: the US Trade representative, take aim at another area where 120 00:06:32,680 --> 00:06:35,760 Speaker 6: China has tried to exert its influence over the supply chain, 121 00:06:36,040 --> 00:06:38,880 Speaker 6: an area where it has an advantage, and that is shipping. 122 00:06:39,040 --> 00:06:42,919 Speaker 6: And he warned that sanctions against US units of a 123 00:06:43,080 --> 00:06:47,400 Speaker 6: South Korean company were are counter to these kinds of conversations. 124 00:06:48,680 --> 00:06:51,599 Speaker 3: The deal with Australia is being interpreted in DC at 125 00:06:51,680 --> 00:06:54,120 Speaker 3: least as kind of a counter move to what China 126 00:06:54,160 --> 00:06:54,799 Speaker 3: has been doing. 127 00:06:55,000 --> 00:06:56,000 Speaker 2: What's our reporting on. 128 00:06:55,960 --> 00:07:00,159 Speaker 6: That, well, it very much is a countermove. The the 129 00:07:00,240 --> 00:07:02,919 Speaker 6: Trump administration is trying. This is the latest in a 130 00:07:03,000 --> 00:07:06,080 Speaker 6: series of steps to try to break China's grip on 131 00:07:06,160 --> 00:07:10,240 Speaker 6: the rare earth's market and reduce US dependence on China 132 00:07:10,280 --> 00:07:13,520 Speaker 6: as a source of critical minerals. Now, this is a 133 00:07:13,640 --> 00:07:17,160 Speaker 6: long term play, and the US has tried to put investments. 134 00:07:17,200 --> 00:07:20,560 Speaker 6: It has already had three government moves to invest in 135 00:07:20,640 --> 00:07:23,960 Speaker 6: companies that specialize in rare earths. We saw one just 136 00:07:24,000 --> 00:07:26,760 Speaker 6: a few weeks ago when Canadian Prime Minister Mark Carney 137 00:07:27,200 --> 00:07:29,960 Speaker 6: visited Washington and met with President Donald Trump the US, 138 00:07:29,960 --> 00:07:33,080 Speaker 6: and that's a ten percent stake in a Canadian miner 139 00:07:33,160 --> 00:07:35,920 Speaker 6: called Trilogy, and also the opening of a road. But 140 00:07:36,200 --> 00:07:37,600 Speaker 6: this is a longer term play. 141 00:07:37,640 --> 00:07:38,560 Speaker 2: It will take a while. 142 00:07:38,680 --> 00:07:42,600 Speaker 6: Australia, though, is promising what it says is a faster 143 00:07:42,800 --> 00:07:46,160 Speaker 6: pipeline to these rare earth elements. It says that it 144 00:07:46,200 --> 00:07:49,600 Speaker 6: can provide thirty to forty out of the fifty critical 145 00:07:49,640 --> 00:07:52,520 Speaker 6: minerals that the US has identified as being needed most. 146 00:07:52,880 --> 00:07:55,920 Speaker 6: And it likes to refer to itself as the world's 147 00:07:55,960 --> 00:07:59,640 Speaker 6: periodic table and has all that expertise in mining. How 148 00:07:59,720 --> 00:08:02,760 Speaker 6: quickly can be brought to beer and whether this functions, 149 00:08:02,760 --> 00:08:05,760 Speaker 6: there's some sort of pressure in the trade negotiations between 150 00:08:05,960 --> 00:08:09,600 Speaker 6: US Treasury Secretary Scott Besson and his Chinese counterpart later 151 00:08:09,680 --> 00:08:12,160 Speaker 6: this week. Remains to be seen, but it is certainly 152 00:08:12,200 --> 00:08:14,240 Speaker 6: something that the President will try to bring to his 153 00:08:14,360 --> 00:08:18,400 Speaker 6: conversation with Shijimping, expected to take place next week. 154 00:08:19,040 --> 00:08:21,720 Speaker 3: Bloemberg's Mike Shepard, thank you very much. Let's bring in 155 00:08:21,800 --> 00:08:25,880 Speaker 3: Rob Funnels, senior portfolio manager at Tortoise Capital, who argues 156 00:08:25,960 --> 00:08:28,840 Speaker 3: the US needs to develop its rare f supply chain 157 00:08:28,920 --> 00:08:31,160 Speaker 3: in the same way that it refall. 158 00:08:31,000 --> 00:08:32,080 Speaker 2: Energy supply chains. 159 00:08:32,280 --> 00:08:35,840 Speaker 3: Tortoise Capital has approximately nine billion dollars in assets under management, 160 00:08:35,840 --> 00:08:39,560 Speaker 3: the focus energy and power infrastructure. So to start, Rob, 161 00:08:39,600 --> 00:08:42,240 Speaker 3: your reaction to the deal that the President did with 162 00:08:42,280 --> 00:08:44,320 Speaker 3: Australia on rare earths and what it signals to you 163 00:08:44,400 --> 00:08:46,840 Speaker 3: more broadly about what they'll do in supply chain. 164 00:08:47,480 --> 00:08:50,120 Speaker 7: Yeah, Well, as you highlighted, so the supply chain is 165 00:08:50,120 --> 00:08:52,280 Speaker 7: really important. You need more rare earth minerals to come 166 00:08:52,280 --> 00:08:55,200 Speaker 7: to the US for consumer electronics and really just the 167 00:08:55,240 --> 00:08:59,600 Speaker 7: evolution of everything including AI, and so the rarer supply 168 00:08:59,720 --> 00:09:02,199 Speaker 7: chain needs to really develop, kind of like the energy 169 00:09:02,520 --> 00:09:04,760 Speaker 7: supply chain is evolved. And if you think about the 170 00:09:04,840 --> 00:09:06,640 Speaker 7: energy supply chain in the US. The US is the 171 00:09:06,679 --> 00:09:09,439 Speaker 7: largest energy producer in the world. AI is going to 172 00:09:09,480 --> 00:09:11,360 Speaker 7: need a lot of electricity. The US has a lot 173 00:09:11,400 --> 00:09:13,679 Speaker 7: of natural gas, and so that's a benefit, and that 174 00:09:13,720 --> 00:09:17,520 Speaker 7: allows the US to maintain its AI dominates because of 175 00:09:17,559 --> 00:09:19,720 Speaker 7: the natural gas and the ability to produce low cost 176 00:09:19,800 --> 00:09:22,280 Speaker 7: electricity in the US. And that's just because of the 177 00:09:22,559 --> 00:09:25,240 Speaker 7: supply chain for in the energy sector is very well developed. 178 00:09:25,280 --> 00:09:27,840 Speaker 7: So where Earth needs to follow a similar fashion. 179 00:09:29,280 --> 00:09:32,320 Speaker 3: A big story on the Bloomberg Terminal today written by 180 00:09:32,360 --> 00:09:38,480 Speaker 3: McCall calligue Common Rhinikey is titled AI Boom transforms utilities 181 00:09:38,920 --> 00:09:41,600 Speaker 3: from haven to storing growth stocks, and we're looking at 182 00:09:41,640 --> 00:09:45,480 Speaker 3: the idea that the utility sectors up more than forty percent, 183 00:09:45,640 --> 00:09:47,160 Speaker 3: third best performing group in the s and P. 184 00:09:47,240 --> 00:09:47,880 Speaker 2: Five hundred. 185 00:09:48,320 --> 00:09:51,680 Speaker 3: This is, to an extent, your wheelhouse. You are trying 186 00:09:51,720 --> 00:09:55,520 Speaker 3: to participate in what's happening in AI broadly through energy, 187 00:09:55,600 --> 00:09:59,160 Speaker 3: infrastructure and production. When you make of that reporting, Rob. 188 00:09:59,480 --> 00:10:01,040 Speaker 7: I think it's very I think there's a lot of 189 00:10:01,120 --> 00:10:03,280 Speaker 7: room to run if you just think about all these 190 00:10:03,280 --> 00:10:05,599 Speaker 7: cool things that AI does and the fascinating things that 191 00:10:05,679 --> 00:10:08,400 Speaker 7: AI does. Really the foundation of all of that are 192 00:10:08,400 --> 00:10:11,679 Speaker 7: two things. It's data and it's electricity basically, and those 193 00:10:11,679 --> 00:10:13,880 Speaker 7: are the foundational elements. And so it has taught us 194 00:10:13,920 --> 00:10:16,720 Speaker 7: what we're doing is we're investing in the critical enablers 195 00:10:17,000 --> 00:10:20,679 Speaker 7: basically and the infrastructure that enables all of these great 196 00:10:20,720 --> 00:10:23,480 Speaker 7: AI opportunities going forward. So there's a lot of investment 197 00:10:23,520 --> 00:10:27,160 Speaker 7: opportunities and electricity, as you highlighted, we need a lot 198 00:10:27,200 --> 00:10:28,079 Speaker 7: more electricity. 199 00:10:28,520 --> 00:10:28,880 Speaker 2: Basically. 200 00:10:28,960 --> 00:10:31,160 Speaker 7: The next decade is going to be the age of electricity. 201 00:10:31,520 --> 00:10:33,600 Speaker 7: We think that electricity is going to become the new oil. 202 00:10:33,880 --> 00:10:36,560 Speaker 7: The US is going to maintain and it's global AI 203 00:10:36,640 --> 00:10:40,120 Speaker 7: dominance because of its ability to produce low cost electricity. 204 00:10:40,400 --> 00:10:45,600 Speaker 7: So companies like in my backyard Eenergy, it's actually a 205 00:10:45,640 --> 00:10:48,000 Speaker 7: classic example of what you're talking about. It's going to 206 00:10:48,000 --> 00:10:53,040 Speaker 7: actually increase its growth rate by almost fifty percent because 207 00:10:53,040 --> 00:10:56,760 Speaker 7: there's new AI data centers coming to Kansas City, Missouri, 208 00:10:56,760 --> 00:10:58,760 Speaker 7: where I happen to live. But this is happening all 209 00:10:58,800 --> 00:11:01,600 Speaker 7: over the place. We even have bitcoin miners basically, and 210 00:11:01,640 --> 00:11:03,480 Speaker 7: this is really the interesting part if you think about it, 211 00:11:03,520 --> 00:11:07,319 Speaker 7: bitcoin miners are actually converting, transforming from being bitcoin miners 212 00:11:07,520 --> 00:11:10,680 Speaker 7: to data center operators. Why well, because they have the 213 00:11:10,720 --> 00:11:15,600 Speaker 7: electricity and the ability to simply transform their business and 214 00:11:15,679 --> 00:11:18,760 Speaker 7: become really an entirely new business model, and then their 215 00:11:18,840 --> 00:11:22,080 Speaker 7: valuations are being uplifted as well. Companies like Riot Platforms, 216 00:11:22,360 --> 00:11:26,719 Speaker 7: Wolf are Tero, Wolf are a couple of examples who 217 00:11:26,840 --> 00:11:27,920 Speaker 7: of companies that have been doing this. 218 00:11:29,160 --> 00:11:32,920 Speaker 3: What you are trying to participate in tangibly, rob is 219 00:11:32,960 --> 00:11:35,960 Speaker 3: the building of data centers or what will power them. 220 00:11:36,360 --> 00:11:39,640 Speaker 3: But when I look at the portfolios that you manage 221 00:11:39,960 --> 00:11:42,600 Speaker 3: and some of the ETF products, you've kind of broadened 222 00:11:42,640 --> 00:11:45,440 Speaker 3: out to some of the names that we would more 223 00:11:45,440 --> 00:11:47,360 Speaker 3: classically associate with servers. 224 00:11:47,640 --> 00:11:48,959 Speaker 2: Dell is an example. 225 00:11:49,720 --> 00:11:52,280 Speaker 3: What prompted you to make that move go beyond the 226 00:11:52,400 --> 00:11:53,280 Speaker 3: energy thesis? 227 00:11:53,920 --> 00:11:56,040 Speaker 7: Well, we just think if you think about AI, AI 228 00:11:56,080 --> 00:11:58,280 Speaker 7: is the future, right, AI is the future economy, so 229 00:11:58,320 --> 00:11:59,439 Speaker 7: if electricity is. 230 00:11:59,360 --> 00:11:59,880 Speaker 2: The new oil. 231 00:12:00,080 --> 00:12:02,320 Speaker 7: But if you think about really what we're looking at 232 00:12:02,480 --> 00:12:05,640 Speaker 7: is we don't think we think what's underrepresented investor portfolios 233 00:12:05,679 --> 00:12:09,120 Speaker 7: is simply this the enablers, the infrastructure, the companies that 234 00:12:09,160 --> 00:12:11,719 Speaker 7: are enabling all of this AI development. So what does 235 00:12:11,760 --> 00:12:15,680 Speaker 7: that mean, Well, that means data storage devices, network switches. 236 00:12:15,720 --> 00:12:19,000 Speaker 7: Those are just a couple of examples electricity. Electricity generation 237 00:12:19,120 --> 00:12:23,920 Speaker 7: are another couple of examples, cabling as well as servers, 238 00:12:23,960 --> 00:12:27,760 Speaker 7: and so all of this underlying infrastructure is really really important. 239 00:12:27,800 --> 00:12:31,160 Speaker 7: It's the foundation really for the future of AI, and 240 00:12:31,200 --> 00:12:34,720 Speaker 7: it's these enablers that we think aren't represented in investor portfolios. 241 00:12:34,720 --> 00:12:38,400 Speaker 7: So we created a product called the Tortoise AI Infrastructure 242 00:12:38,880 --> 00:12:42,200 Speaker 7: Active ETF that really offers investors a way to invest 243 00:12:42,320 --> 00:12:43,320 Speaker 7: in the active enablers. 244 00:12:45,080 --> 00:12:48,480 Speaker 3: Rob Bummel, Senior portfolio manager at Tours's Capital, thank you 245 00:12:48,520 --> 00:12:51,400 Speaker 3: so much for joining us here on Bloomberg Tech. Now 246 00:12:51,400 --> 00:12:53,520 Speaker 3: coming up, let's get back to that story. Warner Brothers 247 00:12:53,600 --> 00:12:58,920 Speaker 3: Discovery says it's reassessing its strategic options as multiple parties 248 00:12:59,280 --> 00:13:01,439 Speaker 3: are said to be so birkling the media giant. We 249 00:13:01,520 --> 00:13:10,920 Speaker 3: have more on that next. This is Boomberg Tech. I 250 00:13:10,960 --> 00:13:12,679 Speaker 3: told you at the top of the show. Shares of 251 00:13:12,720 --> 00:13:16,640 Speaker 3: Warner Brothers Discovery are up significantly after the company revealed 252 00:13:16,640 --> 00:13:20,120 Speaker 3: it's expanding a strategic review of the business. The owner 253 00:13:20,160 --> 00:13:24,120 Speaker 3: of CNN, HBO and the Warner Bros. Movie Studio had 254 00:13:24,160 --> 00:13:27,120 Speaker 3: been planning to split into two companies anyway, but it's 255 00:13:27,160 --> 00:13:31,440 Speaker 3: now considering a wider arrail of deal. Scenarios including sale 256 00:13:31,520 --> 00:13:35,720 Speaker 3: and spin off options in light of quote unsolicited interests. 257 00:13:35,760 --> 00:13:39,560 Speaker 3: Let's get to our media editor Felix Gillette. Some of 258 00:13:39,600 --> 00:13:42,560 Speaker 3: this we knew about, some of it not. So the 259 00:13:42,640 --> 00:13:46,440 Speaker 3: point is is that Warner Brothers, Discovery It's board and 260 00:13:46,559 --> 00:13:50,120 Speaker 3: leadership are recognizing that the market's putting some value in 261 00:13:50,200 --> 00:13:53,559 Speaker 3: its different properties. Just go through each of the options 262 00:13:53,559 --> 00:13:55,760 Speaker 3: that the board says that it's considering. 263 00:13:56,400 --> 00:13:58,600 Speaker 8: Yeah, I mean, I think now it's officially for sale. 264 00:13:58,600 --> 00:14:00,960 Speaker 8: We knew that it was basically the was happening, but 265 00:14:01,120 --> 00:14:04,280 Speaker 8: now the options they're looking at is. You know, earlier 266 00:14:04,320 --> 00:14:06,839 Speaker 8: this year they announced this reorganization. They were going to 267 00:14:07,320 --> 00:14:09,040 Speaker 8: set it up the company so that there was going 268 00:14:09,080 --> 00:14:11,320 Speaker 8: to be the studios and the streaming business on the 269 00:14:11,320 --> 00:14:17,120 Speaker 8: one hand, separated from the legacy cable TV channels. Then 270 00:14:17,160 --> 00:14:20,920 Speaker 8: you have you know, David Ellison from Paramount from Paramount 271 00:14:20,920 --> 00:14:23,920 Speaker 8: Skydance jumping in and saying, oh, I'd like the whole 272 00:14:23,960 --> 00:14:27,520 Speaker 8: thing before the split. And now they're saying, Okay, we 273 00:14:27,560 --> 00:14:31,120 Speaker 8: have interest from other parties for potentially the whole thing, 274 00:14:31,160 --> 00:14:34,080 Speaker 8: potentially parts of it. In the meantime, we're going to 275 00:14:34,160 --> 00:14:37,200 Speaker 8: go ahead with this reorganization as we soared through the 276 00:14:37,240 --> 00:14:41,360 Speaker 8: different options, but you know, presumably there'll be a lot 277 00:14:41,360 --> 00:14:44,920 Speaker 8: of interest in the studio streaming side, less so from 278 00:14:44,960 --> 00:14:46,880 Speaker 8: the legacy cable TV channels. 279 00:14:47,600 --> 00:14:50,200 Speaker 3: Right, this jump of ten percent puts the stock on 280 00:14:50,280 --> 00:14:53,680 Speaker 3: track for its best stays since early September, the stock 281 00:14:53,720 --> 00:14:56,360 Speaker 3: of the entity known as Warner Brothers Discovery. That's a 282 00:14:56,480 --> 00:14:59,280 Speaker 3: nice timeline. It shows us like the evolution of what 283 00:14:59,480 --> 00:15:03,480 Speaker 3: is now Warner Brothers Discovery. There are media reports out 284 00:15:03,520 --> 00:15:06,920 Speaker 3: there this morning Felix about the names that could be 285 00:15:07,040 --> 00:15:12,760 Speaker 3: circling Weird reported Paramount Skuydeounce, but it's probably broadened that, right. 286 00:15:13,160 --> 00:15:14,640 Speaker 8: Yeah, I mean, I think the other names that are 287 00:15:14,680 --> 00:15:19,720 Speaker 8: being tossed out there that analysts have mentioned Netflix, you know, 288 00:15:19,880 --> 00:15:24,280 Speaker 8: Comcast potentially you know in Amazon and Apple. Anyone that 289 00:15:24,320 --> 00:15:26,360 Speaker 8: has a streaming service has to take a look at 290 00:15:26,360 --> 00:15:29,440 Speaker 8: this because you know, Warner Brothers Discovery has one of 291 00:15:29,480 --> 00:15:33,280 Speaker 8: the biggest, richest libraries of IP and the planet. They've 292 00:15:33,280 --> 00:15:36,800 Speaker 8: got Harry Potter, they've got the DC universe with Batman 293 00:15:36,920 --> 00:15:40,440 Speaker 8: and the Superman. They've got you know, the Hobbit universe 294 00:15:40,520 --> 00:15:43,440 Speaker 8: with all the Lord of the Rings stuff. So that's 295 00:15:43,520 --> 00:15:46,080 Speaker 8: just you know, some of the franchises. Everyone needs to 296 00:15:46,120 --> 00:15:49,000 Speaker 8: take a look at this, and so there is to 297 00:15:49,040 --> 00:15:51,120 Speaker 8: be interesting real. 298 00:15:51,000 --> 00:15:53,200 Speaker 3: Quick Netflix after the bell. What's the one thing we 299 00:15:53,240 --> 00:15:54,040 Speaker 3: need to look out for. 300 00:15:55,200 --> 00:15:57,800 Speaker 8: I think look at the advertising numbers. You know, they've 301 00:15:57,880 --> 00:16:00,440 Speaker 8: invested a lot in live events. They've had a very 302 00:16:00,440 --> 00:16:03,480 Speaker 8: strong quarter in terms of engagement. Our franchises are really 303 00:16:03,560 --> 00:16:06,240 Speaker 8: kicking in the high gear. They had Squid Game, they 304 00:16:06,240 --> 00:16:09,200 Speaker 8: had you know, the most popular movie in their history 305 00:16:09,240 --> 00:16:12,120 Speaker 8: with K Pop Demon Hunters. So look for that engagement. 306 00:16:12,160 --> 00:16:14,680 Speaker 8: They won't be talking subscriber numbers. But I'd be very 307 00:16:14,680 --> 00:16:17,120 Speaker 8: curious to see if the same thing about advertising growth. 308 00:16:18,000 --> 00:16:20,280 Speaker 3: All they've been saying to Wall Street is judge us 309 00:16:20,280 --> 00:16:21,640 Speaker 3: by financial metrics. 310 00:16:21,840 --> 00:16:23,600 Speaker 2: Move on from subscribing numbers. 311 00:16:23,800 --> 00:16:25,960 Speaker 3: I don't know that we can Bloomberg's Felix to that, 312 00:16:26,080 --> 00:16:35,280 Speaker 3: Thank you very much. Call Weave has no plans to 313 00:16:35,360 --> 00:16:38,120 Speaker 3: bump up it's nine billion dollar bid to data Center 314 00:16:38,200 --> 00:16:42,359 Speaker 3: provide a core scientific despite concerns and opposition from shareholders 315 00:16:42,560 --> 00:16:45,120 Speaker 3: that the offer was too low. CEO Michael and Trader 316 00:16:45,160 --> 00:16:48,200 Speaker 3: told Bloomberg's Tom Giles earlier in London, the price is fair. 317 00:16:49,160 --> 00:16:53,120 Speaker 9: We're very comfortable that the way that we have priced 318 00:16:53,120 --> 00:16:55,920 Speaker 9: it is appropriate for us. If there's someone else that 319 00:16:55,920 --> 00:16:58,840 Speaker 9: would like to step in, they can step in. But 320 00:16:59,160 --> 00:17:01,280 Speaker 9: you know, we're excited, we think it makes sense. We 321 00:17:01,360 --> 00:17:05,639 Speaker 9: continue to think it makes sense, and you know it 322 00:17:05,720 --> 00:17:07,919 Speaker 9: will go to a vote, but you won't see us 323 00:17:08,000 --> 00:17:09,720 Speaker 9: bump our price or increase our price. 324 00:17:10,680 --> 00:17:11,600 Speaker 2: Let's get the analysis. 325 00:17:11,640 --> 00:17:16,240 Speaker 3: Bloomberg Intelligence Senior techanalyst Aanar rag Rana. In July, when 326 00:17:16,240 --> 00:17:18,320 Speaker 3: this bid came in, you wrote that it was prudent 327 00:17:18,800 --> 00:17:21,399 Speaker 3: because of the share price performance of core Weave. 328 00:17:21,800 --> 00:17:22,720 Speaker 2: In August, you. 329 00:17:22,720 --> 00:17:25,359 Speaker 3: Wrote that actually they might have to think about upping 330 00:17:25,440 --> 00:17:28,400 Speaker 3: the bid a bit because a pushback. On October thirtieth, 331 00:17:28,400 --> 00:17:30,240 Speaker 3: shareholders are going to vote on it either way. 332 00:17:30,440 --> 00:17:31,880 Speaker 2: What's the current thesis, Sanaag. 333 00:17:32,960 --> 00:17:34,840 Speaker 10: Yeah, and I think you've given what the CEO is 334 00:17:34,920 --> 00:17:37,440 Speaker 10: publicly saying. It doesn't look like they're going to up 335 00:17:37,480 --> 00:17:40,119 Speaker 10: the offer, and so you know, I think this is 336 00:17:40,359 --> 00:17:43,480 Speaker 10: probably going to end in probably a stalemate, unless the 337 00:17:43,560 --> 00:17:47,120 Speaker 10: shareholders feel that gold Beab is the right place for them. 338 00:17:47,240 --> 00:17:47,439 Speaker 2: You know. 339 00:17:47,480 --> 00:17:50,040 Speaker 10: Having said that, if you look at the data center space, 340 00:17:50,359 --> 00:17:52,320 Speaker 10: there is a lot of demand. So I don't think 341 00:17:52,359 --> 00:17:55,520 Speaker 10: both parties will regret. You know, which other direction it 342 00:17:55,520 --> 00:17:56,480 Speaker 10: goes frankly. 343 00:17:56,840 --> 00:17:59,360 Speaker 3: So Anraik help educate our audience. You said, the right 344 00:17:59,400 --> 00:18:02,480 Speaker 3: place for them. What is it that core Scientific does 345 00:18:02,640 --> 00:18:05,800 Speaker 3: differently from core Weave, which we call on this program 346 00:18:05,960 --> 00:18:06,760 Speaker 3: neo cloud. 347 00:18:07,800 --> 00:18:10,920 Speaker 10: Yeah, so for colviv it's in the mean the simplest 348 00:18:10,920 --> 00:18:12,960 Speaker 10: way is they're going to rent out GPUs for you 349 00:18:13,040 --> 00:18:15,840 Speaker 10: to help with your computing needs. In the case of 350 00:18:15,920 --> 00:18:20,879 Speaker 10: core Scientific, they're helping create those data centers. Then the 351 00:18:20,920 --> 00:18:23,040 Speaker 10: core weav is going to put their GPUs inside. So 352 00:18:23,320 --> 00:18:27,000 Speaker 10: it's a slightly different business, but at the end of 353 00:18:27,080 --> 00:18:29,840 Speaker 10: the day, it's part of the same value chain. It's 354 00:18:29,920 --> 00:18:32,800 Speaker 10: all getting funded by a lot of AI workloads that 355 00:18:32,840 --> 00:18:35,680 Speaker 10: are out there. So both both companies have their own 356 00:18:35,720 --> 00:18:38,520 Speaker 10: space in the ecosystem. They do slightly different things. 357 00:18:39,480 --> 00:18:42,560 Speaker 3: Real quick, Anna Rag core Weave on the demand side 358 00:18:42,560 --> 00:18:44,600 Speaker 3: and the supply side is doing a lot of deals. 359 00:18:44,760 --> 00:18:46,000 Speaker 2: Can they cope with all of this? 360 00:18:47,880 --> 00:18:50,920 Speaker 10: I think the biggest question is at what pace can 361 00:18:51,000 --> 00:18:53,960 Speaker 10: people go out and create these data centers and install 362 00:18:54,000 --> 00:18:56,600 Speaker 10: the GPUs and get their revenue out of it. We 363 00:18:56,720 --> 00:19:00,240 Speaker 10: actually have so much now in terms of evidence of 364 00:19:00,640 --> 00:19:03,879 Speaker 10: rbos or bookings coming in from multiple vendors. You know 365 00:19:03,920 --> 00:19:08,480 Speaker 10: whether that's Microsoft Meta or open Aye. The problem is 366 00:19:08,520 --> 00:19:11,320 Speaker 10: how do you go out and then delivered on it? 367 00:19:12,160 --> 00:19:15,520 Speaker 3: His researches must read on the Bloomberg terminal. Anaagrana of 368 00:19:15,600 --> 00:19:18,920 Speaker 3: Bloomberg Intelligence, thank you very much. Meanwhile, Amazon says its 369 00:19:18,960 --> 00:19:22,840 Speaker 3: cloud services have now been fully restored after a fifteen 370 00:19:22,920 --> 00:19:26,320 Speaker 3: hour outage that impacted a variety of websites and apps, 371 00:19:26,400 --> 00:19:30,400 Speaker 3: but its reputation has taken a hit. Bloomos Matt Day, 372 00:19:30,400 --> 00:19:33,080 Speaker 3: who covers Amazon and AWS, joins us and that was, 373 00:19:33,240 --> 00:19:35,439 Speaker 3: you know, the headline of your day to story today. 374 00:19:35,920 --> 00:19:39,119 Speaker 3: We've looked at how analysts have reacted to this. How 375 00:19:39,160 --> 00:19:44,200 Speaker 3: severe was this outage compared to AWS historic outages for. 376 00:19:44,240 --> 00:19:46,320 Speaker 11: Example, So it looks like it's at least they're most 377 00:19:46,320 --> 00:19:48,119 Speaker 11: significant in several years. We've got to go back to 378 00:19:48,119 --> 00:19:49,679 Speaker 11: about twenty twenty one for one. That's even in the 379 00:19:49,680 --> 00:19:53,560 Speaker 11: same ballpark. Fifteen hours is a lot like the TYPICALWS hiccup. 380 00:19:53,600 --> 00:19:56,600 Speaker 11: You know, they'll announce something is on the fritz, you know, 381 00:19:56,680 --> 00:19:58,400 Speaker 11: the a couple of stats updates later, maybe a couple 382 00:19:58,440 --> 00:19:59,480 Speaker 11: hours later, things are back. 383 00:19:59,760 --> 00:20:00,720 Speaker 2: This this was a big one. 384 00:20:00,760 --> 00:20:02,760 Speaker 11: This took out their biggest data center region and took 385 00:20:02,760 --> 00:20:05,400 Speaker 11: it out for most of the day throughout the US 386 00:20:05,440 --> 00:20:07,800 Speaker 11: East Coast workday. This is a really big deal for 387 00:20:07,840 --> 00:20:10,240 Speaker 11: company that prides itself on on uptime and reliability. 388 00:20:10,600 --> 00:20:13,040 Speaker 3: What was difficult in covering this in real time during 389 00:20:13,080 --> 00:20:16,080 Speaker 3: the show yesterday was Amazon shares were higher, so you're like, okay, 390 00:20:16,160 --> 00:20:19,560 Speaker 3: that's an interesting reaction of the market. But what helped 391 00:20:19,640 --> 00:20:23,520 Speaker 3: us understand it was the scale of which AWS or 392 00:20:23,560 --> 00:20:26,600 Speaker 3: the Internet relies on. AWS just explain their position in 393 00:20:26,640 --> 00:20:29,880 Speaker 3: cloud computing and maybe by extension, why it was so 394 00:20:29,960 --> 00:20:30,919 Speaker 3: severe and widespread. 395 00:20:30,960 --> 00:20:33,919 Speaker 11: Therefore, so Amazon basically invented the business of selling rented 396 00:20:33,920 --> 00:20:36,680 Speaker 11: computing power. They are the largest actor in that space, 397 00:20:36,720 --> 00:20:39,800 Speaker 11: something like a third of the market, and really just 398 00:20:39,840 --> 00:20:43,160 Speaker 11: the Internet goes through their data centers, especially in Northern Virginia, 399 00:20:43,320 --> 00:20:46,720 Speaker 11: right you know Apple streaming your phone bill. Sometimes I 400 00:20:46,760 --> 00:20:50,040 Speaker 11: try to pay mine yesterday it was not down. So 401 00:20:50,040 --> 00:20:54,159 Speaker 11: they're just a key hub for so much of capitalism, frankly, 402 00:20:54,200 --> 00:20:55,720 Speaker 11: and if it's not them, it's one of their rivals 403 00:20:55,760 --> 00:20:56,720 Speaker 11: like Microsoft or Google. 404 00:20:56,840 --> 00:20:58,880 Speaker 3: And over a two day basis, this tocks up four 405 00:20:58,920 --> 00:21:01,480 Speaker 3: percent and a rag honor of Bloomberg Intelligence. Just on 406 00:21:01,520 --> 00:21:04,639 Speaker 3: the show and in your story, you cite his research, 407 00:21:04,680 --> 00:21:07,919 Speaker 3: which is that what could the potential reaction of customers 408 00:21:07,960 --> 00:21:12,280 Speaker 3: be here to AWS. Maybe they'll look at spreading their 409 00:21:12,320 --> 00:21:14,520 Speaker 3: workloads across different cloud providers. 410 00:21:14,760 --> 00:21:16,400 Speaker 11: You can see some hedging bets, which is the trend 411 00:21:16,400 --> 00:21:18,240 Speaker 11: we've seen in recent years anyway, to be bor rather 412 00:21:18,280 --> 00:21:20,760 Speaker 11: within companies, rather than relying on a single cloud provider. 413 00:21:20,840 --> 00:21:23,280 Speaker 11: They might take a step back and move their business 414 00:21:23,000 --> 00:21:25,480 Speaker 11: among the big guys. And that's definitely the risk for 415 00:21:25,640 --> 00:21:27,640 Speaker 11: Amazon coming out of an event like we owed yesterday. 416 00:21:27,840 --> 00:21:30,840 Speaker 3: Bloomberg's Matt Day, who's visiting us in San Francisco from 417 00:21:30,880 --> 00:21:33,800 Speaker 3: Seattle and has been all across the AWS outage. Thank 418 00:21:33,840 --> 00:21:42,760 Speaker 3: you very much. Welcome back to Bloomberg Tech. Let's go 419 00:21:42,840 --> 00:21:45,280 Speaker 3: to check in on defense tech stocks now. With both 420 00:21:45,320 --> 00:21:48,800 Speaker 3: Northrop and Lockheed Martin out with their earnings results, Bloomberg 421 00:21:48,840 --> 00:21:52,119 Speaker 3: TV's markets correspondent Norah Melinda joins us to break them down, 422 00:21:52,160 --> 00:21:53,200 Speaker 3: and let's start with Northrop. 423 00:21:53,840 --> 00:21:55,520 Speaker 12: Well, and it seems as there are a lot of 424 00:21:55,640 --> 00:21:58,480 Speaker 12: high expectations heading into this report. Now, the company did 425 00:21:58,560 --> 00:22:01,480 Speaker 12: raise it's earning's forecast for the year, but what Wall 426 00:22:01,480 --> 00:22:03,320 Speaker 12: Street is really parsing right now is the fact that 427 00:22:03,320 --> 00:22:05,880 Speaker 12: it cut its full year sales guide to a range 428 00:22:05,880 --> 00:22:08,920 Speaker 12: that was below the average analyst estimate, and so work 429 00:22:08,960 --> 00:22:11,560 Speaker 12: is still continuing to accelerate at the company, specifically on 430 00:22:11,600 --> 00:22:15,000 Speaker 12: its sentinel missile program. But you are seeing people being 431 00:22:15,080 --> 00:22:18,160 Speaker 12: quite critical right now, particularly about that cut to its 432 00:22:18,160 --> 00:22:19,040 Speaker 12: full year guide. 433 00:22:20,720 --> 00:22:23,480 Speaker 3: Lockheed is maybe the bigger fish, and there are headlines 434 00:22:23,480 --> 00:22:24,200 Speaker 3: coming out from the call. 435 00:22:24,240 --> 00:22:24,919 Speaker 2: What do we need to know? 436 00:22:25,240 --> 00:22:28,040 Speaker 12: Yes, lots of headlines flying here for Lockheed Martin. They 437 00:22:28,040 --> 00:22:30,919 Speaker 12: did have better than expected earnings that they reported, but 438 00:22:31,000 --> 00:22:34,120 Speaker 12: they did trim their free cash flow guide down a bit, 439 00:22:34,160 --> 00:22:35,639 Speaker 12: and so that's what you are seeing a lot of 440 00:22:35,640 --> 00:22:38,720 Speaker 12: people hinging on right now. The CEO did say that 441 00:22:38,760 --> 00:22:42,480 Speaker 12: he sees the Golden Dome US missile defense project as 442 00:22:42,520 --> 00:22:45,240 Speaker 12: a driver of future growth here, and he did say 443 00:22:45,240 --> 00:22:47,440 Speaker 12: that the company has a record one hundred and seventy 444 00:22:47,520 --> 00:22:50,800 Speaker 12: nine billion dollars in backlog. Lots of parts here. 445 00:22:52,080 --> 00:22:54,680 Speaker 3: All important things we've been tracking all year long. Bloombogs, 446 00:22:54,680 --> 00:22:57,160 Speaker 3: Norm Melinda, thank you very much. Speaking of defense tech, 447 00:22:57,600 --> 00:23:00,600 Speaker 3: German defense tech company Helsing was featured at the Bloomberg 448 00:23:00,640 --> 00:23:03,600 Speaker 3: Tech Summit in London earlier today. The company's co CEO, 449 00:23:03,680 --> 00:23:07,199 Speaker 3: Torsen Ray sat down with Bloomberg text Tom McKenzie and 450 00:23:07,240 --> 00:23:10,360 Speaker 3: discussed remaining issues with the supply chain as well as 451 00:23:10,359 --> 00:23:12,880 Speaker 3: a potential defense tech bubble. 452 00:23:13,280 --> 00:23:13,800 Speaker 2: Listen to this. 453 00:23:14,880 --> 00:23:16,680 Speaker 13: I think there's definitely a bubble right now, and the 454 00:23:16,720 --> 00:23:20,160 Speaker 13: reason for it is what I said earlier in twenty 455 00:23:20,240 --> 00:23:23,679 Speaker 13: twenty one, not a single EUROPEANBC in particular wanted to 456 00:23:23,680 --> 00:23:27,119 Speaker 13: touch defense. Now everyone has moved into defense, and you know, 457 00:23:27,200 --> 00:23:30,680 Speaker 13: including the crypto caravan that's moved from crypto now into 458 00:23:30,720 --> 00:23:32,760 Speaker 13: defense and is trying to spend its money there. 459 00:23:34,320 --> 00:23:37,359 Speaker 3: Let's get to semiconductors. Texas Instruments is set to report 460 00:23:37,400 --> 00:23:40,280 Speaker 3: third quarter results after the closing bell to day is 461 00:23:40,320 --> 00:23:43,439 Speaker 3: and this way where the tariff uncertainty could cloud the 462 00:23:43,440 --> 00:23:46,360 Speaker 3: company's outlook. Here with more Bloomberg Z and King, who 463 00:23:46,440 --> 00:23:49,280 Speaker 3: leads coverage of the chip industry for US. It's a 464 00:23:49,359 --> 00:23:54,119 Speaker 3: China story with Texas Instruments, a business where more analogue 465 00:23:54,119 --> 00:23:56,480 Speaker 3: types of chips are in demand or they're not. 466 00:23:57,000 --> 00:23:59,320 Speaker 14: Yeah, I mean fundamentally, the numbers for this company are 467 00:23:59,320 --> 00:24:02,520 Speaker 14: great on the way back, ten percent a quarter in 468 00:24:02,600 --> 00:24:06,400 Speaker 14: terms of revenue growth sounds pretty good. The concern, as 469 00:24:06,400 --> 00:24:08,880 Speaker 14: you say, is what's going on whether some of that 470 00:24:09,560 --> 00:24:13,000 Speaker 14: kind of rebound in orders is related to China and 471 00:24:13,040 --> 00:24:16,000 Speaker 14: people getting ahead of what they see as increasing trade 472 00:24:16,080 --> 00:24:19,359 Speaker 14: barriers and TI not being able to serve China, or 473 00:24:19,720 --> 00:24:22,320 Speaker 14: you know the various you know things that are at 474 00:24:22,320 --> 00:24:24,920 Speaker 14: play in terms of the variables, and so that's what's 475 00:24:25,000 --> 00:24:27,000 Speaker 14: driving the sentiment around the stock. 476 00:24:27,160 --> 00:24:29,800 Speaker 3: Help the Bloomberg Tech audience understand the supply chain. We've 477 00:24:29,840 --> 00:24:31,920 Speaker 3: talked a lot about how in the context of high 478 00:24:31,920 --> 00:24:35,680 Speaker 3: performance compute GPUs that go in stage centers and on 479 00:24:35,880 --> 00:24:39,080 Speaker 3: shoring effort, what's going on with Taiwan, But with those 480 00:24:39,119 --> 00:24:42,240 Speaker 3: more analog type chips, is it the same story that 481 00:24:42,320 --> 00:24:45,120 Speaker 3: it's a supply chain dependent on China or in an 482 00:24:45,200 --> 00:24:46,760 Speaker 3: end market dependent on China. 483 00:24:47,280 --> 00:24:51,880 Speaker 14: At the moment, the supply chain is dependent upon Texas Instruments, right. 484 00:24:51,880 --> 00:24:53,600 Speaker 14: This is a company that's in everything. If you've got 485 00:24:53,640 --> 00:24:55,560 Speaker 14: an on and off switch on a device, there's going 486 00:24:55,600 --> 00:24:57,960 Speaker 14: to be some form of Texas Instruments chip in there. 487 00:24:58,280 --> 00:25:01,320 Speaker 14: The issue has come as as China has been restricted 488 00:25:01,320 --> 00:25:05,080 Speaker 14: from going high end shift in terms of the digital 489 00:25:05,080 --> 00:25:08,040 Speaker 14: products you just mentioned, has shifted its emphasis to try 490 00:25:08,080 --> 00:25:11,119 Speaker 14: to make more kind of analog and embedded processing stuff, 491 00:25:11,119 --> 00:25:14,680 Speaker 14: which is a competitor. TI throw in trade tensions, and 492 00:25:14,760 --> 00:25:17,680 Speaker 14: the concern is that China will try more and more 493 00:25:17,720 --> 00:25:20,760 Speaker 14: to domesticate its own supply and that won't eventually be 494 00:25:20,840 --> 00:25:24,120 Speaker 14: good for TI, says, don't worry about it. We understand 495 00:25:24,119 --> 00:25:26,000 Speaker 14: how competitive this is. We'll just get better. 496 00:25:26,520 --> 00:25:29,040 Speaker 3: We've heard a lot from the President about AI chips, 497 00:25:29,160 --> 00:25:31,840 Speaker 3: and a lot of those AI chip company CEOs have 498 00:25:31,960 --> 00:25:35,520 Speaker 3: some influence in DC. Do this leaders at companies like 499 00:25:35,560 --> 00:25:39,520 Speaker 3: Texas Instruments have the same influence and does the President 500 00:25:39,560 --> 00:25:40,760 Speaker 3: think about them as much? 501 00:25:40,920 --> 00:25:43,000 Speaker 14: Well, all we can do is talk about what TI 502 00:25:43,119 --> 00:25:46,880 Speaker 14: is doing. They are, in many senses, the perfect picture 503 00:25:47,160 --> 00:25:50,000 Speaker 14: that Trump wants to have of the world, and that 504 00:25:50,080 --> 00:25:54,760 Speaker 14: they're building factories in this country. They're building in Sherman, Texas, 505 00:25:55,119 --> 00:25:58,640 Speaker 14: not too far from their headquarters. They've bought a plant 506 00:25:58,760 --> 00:26:01,879 Speaker 14: in lehi and U which they're refitting, and they're saying, look, 507 00:26:02,160 --> 00:26:05,520 Speaker 14: you know, we're investing in the US. So in that sense, 508 00:26:05,640 --> 00:26:09,840 Speaker 14: they're doing the right thing for this administration. Obviously, the 509 00:26:09,880 --> 00:26:11,960 Speaker 14: economics of that will have to be seen and how 510 00:26:11,960 --> 00:26:14,560 Speaker 14: they play out, but for now they're there. 511 00:26:15,000 --> 00:26:18,080 Speaker 3: Bimbos and King, thank you very much for a wider 512 00:26:18,119 --> 00:26:20,840 Speaker 3: look at the tech sector. Beth kindig Iofund lead tech 513 00:26:20,880 --> 00:26:23,600 Speaker 3: analyst joins us sin. Beth, you have come on this 514 00:26:23,640 --> 00:26:28,560 Speaker 3: program many times and we have talked about Nvidia principally 515 00:26:29,240 --> 00:26:33,399 Speaker 3: lead edge AI accelerators and GPUs. But as you listen 516 00:26:33,440 --> 00:26:37,760 Speaker 3: there to Ian's preview of Texas instruments, how focused are 517 00:26:37,840 --> 00:26:41,240 Speaker 3: you on that portion of the chip market more analogue 518 00:26:41,560 --> 00:26:44,480 Speaker 3: semis that go into all manner of things we rely 519 00:26:44,560 --> 00:26:45,200 Speaker 3: on each day. 520 00:26:47,320 --> 00:26:49,600 Speaker 15: It's great to see you again, Ed, you have it 521 00:26:49,640 --> 00:26:53,760 Speaker 15: exactly right. I'm very, very hyper focused on the AI market. Therefore, 522 00:26:53,960 --> 00:26:56,560 Speaker 15: the companies I track are a little bit different than 523 00:26:56,600 --> 00:27:01,320 Speaker 15: the broader semiconductor industry. For example, we have Vertive Recording 524 00:27:01,400 --> 00:27:05,119 Speaker 15: this week, we Anthhonol. Now those are both key suppliers 525 00:27:05,160 --> 00:27:09,159 Speaker 15: into AI systems. Whether or not those suppliers will be confirmed, 526 00:27:09,480 --> 00:27:12,440 Speaker 15: you know, for more and more orders, that's always a question, 527 00:27:12,560 --> 00:27:17,159 Speaker 15: but ultimately they are key components within the AI systems 528 00:27:17,440 --> 00:27:21,560 Speaker 15: that in video shipping. I'm very excited to see initial 529 00:27:22,440 --> 00:27:26,119 Speaker 15: reports around the health of the AI market, especially like 530 00:27:26,200 --> 00:27:29,480 Speaker 15: you just spoke about, because some people believe it's an 531 00:27:29,480 --> 00:27:30,080 Speaker 15: AI bubble. 532 00:27:32,520 --> 00:27:37,320 Speaker 3: The onshoring of the supply chain story focused on those 533 00:27:37,320 --> 00:27:39,639 Speaker 3: bigger names at first, right, you know, in Video is 534 00:27:39,760 --> 00:27:42,600 Speaker 3: very aggressive to point out all of its capital commitments 535 00:27:42,640 --> 00:27:48,080 Speaker 3: to this nation and taking the first Arizona produced chips 536 00:27:48,119 --> 00:27:49,199 Speaker 3: from TSMC. 537 00:27:49,720 --> 00:27:51,080 Speaker 2: That's been in the headlines. 538 00:27:51,960 --> 00:27:54,280 Speaker 3: But do you see evidence that there is opportunity for 539 00:27:54,320 --> 00:27:58,680 Speaker 3: investors to invest into something being built out in America 540 00:27:58,840 --> 00:28:00,280 Speaker 3: that goes beyond and Invidia. 541 00:28:03,119 --> 00:28:06,680 Speaker 15: Yes, I would say in general, you know, the onshoing 542 00:28:06,720 --> 00:28:12,480 Speaker 15: process will take years. In terms of truly domesticating our 543 00:28:12,800 --> 00:28:16,200 Speaker 15: domesticating our supply chains, that will take years. And that's 544 00:28:16,280 --> 00:28:20,119 Speaker 15: not actually my central focus. My central focus could be 545 00:28:20,119 --> 00:28:24,639 Speaker 15: best encapsulated by the fact that in Vidia they're having 546 00:28:24,680 --> 00:28:27,000 Speaker 15: one of their biggest product moments ever, which is a 547 00:28:27,040 --> 00:28:29,159 Speaker 15: huge statement. As you know, I've covered this stock very 548 00:28:29,200 --> 00:28:32,560 Speaker 15: closely for many years. They have Blackwell, Black Whele alter shipping, 549 00:28:32,600 --> 00:28:35,720 Speaker 15: but they're moving from eight GPUs to seventy two GPUs 550 00:28:35,720 --> 00:28:39,440 Speaker 15: and that's that piece that I'm explaining is a big 551 00:28:39,480 --> 00:28:42,360 Speaker 15: moment for Nvidia. What that means is that the supply 552 00:28:42,560 --> 00:28:46,840 Speaker 15: chain should erupt in the upcoming quarter and the next 553 00:28:46,960 --> 00:28:49,200 Speaker 15: quarter because that complexity has just. 554 00:28:49,160 --> 00:28:50,080 Speaker 16: Gone up nine x. 555 00:28:50,520 --> 00:28:54,320 Speaker 15: So I'm very very focused there less on timing of 556 00:28:54,320 --> 00:28:56,280 Speaker 15: onshoing this manufacturing right. 557 00:28:56,720 --> 00:28:59,120 Speaker 3: I'm going to be in Washington, DC next week for 558 00:28:59,320 --> 00:29:04,080 Speaker 3: GtC DC, the second edition of the Year of GtC. 559 00:29:05,120 --> 00:29:07,880 Speaker 3: When those kinds of events happen, how high is the 560 00:29:07,920 --> 00:29:10,080 Speaker 3: bar for Nvidia to come out and say something on 561 00:29:10,120 --> 00:29:13,880 Speaker 3: the product or technology side that moves the needle for investors. 562 00:29:15,960 --> 00:29:17,840 Speaker 15: Yeah, I guess I'll be a contrarian again and I 563 00:29:17,840 --> 00:29:22,479 Speaker 15: will say, yeah, if Nvidia can give us more on Reuben, 564 00:29:23,080 --> 00:29:26,280 Speaker 15: knowing that Blackwell but black Well Aulter shipping, they're shipping 565 00:29:26,320 --> 00:29:28,760 Speaker 15: in volume, I'm very positioned for that. 566 00:29:29,800 --> 00:29:31,520 Speaker 16: Anything forward looking for in video. 567 00:29:31,560 --> 00:29:34,080 Speaker 15: At this point, let's just say we have this conversation 568 00:29:34,240 --> 00:29:36,040 Speaker 15: this time next year. I would want to hear more 569 00:29:36,080 --> 00:29:38,960 Speaker 15: about Reuben, which may actually come more in March. 570 00:29:41,160 --> 00:29:44,000 Speaker 3: The big news story, I suppose the last twenty four hours, 571 00:29:44,000 --> 00:29:46,320 Speaker 3: beyond the ADWS outage, which I don't know how that 572 00:29:46,400 --> 00:29:51,440 Speaker 3: impacted you, has been rares you know, the specific headline 573 00:29:51,640 --> 00:29:54,600 Speaker 3: an American deal with Australia, which is kind of being 574 00:29:54,640 --> 00:29:58,120 Speaker 3: interpreted as this countenance to what China is using as 575 00:29:58,200 --> 00:30:02,200 Speaker 3: levers in the negotiation. How do you look at the 576 00:30:02,240 --> 00:30:04,720 Speaker 3: markets in the moment and how they're reacting to rare 577 00:30:04,760 --> 00:30:07,440 Speaker 3: earths and the news flow of the day. 578 00:30:08,880 --> 00:30:11,000 Speaker 15: I certainly would have loved to have owned some of 579 00:30:11,000 --> 00:30:12,480 Speaker 15: those rare earth stocks. 580 00:30:12,480 --> 00:30:15,000 Speaker 16: Some are up, you know, almost four hundred percent this year. 581 00:30:15,800 --> 00:30:18,440 Speaker 15: Look, you know, China's using it as a bargaining chip 582 00:30:18,840 --> 00:30:23,320 Speaker 15: in response to US restricting our excellent design companies. You know, 583 00:30:23,360 --> 00:30:26,840 Speaker 15: these two economies have battled it out for decades. And 584 00:30:28,000 --> 00:30:30,760 Speaker 15: so even though these these things are important to track, 585 00:30:31,720 --> 00:30:35,200 Speaker 15: we are so interdependent at this time with China and 586 00:30:35,280 --> 00:30:39,400 Speaker 15: other regions that you know, I don't think it's something 587 00:30:39,400 --> 00:30:43,000 Speaker 15: that you would exit AI stocks for. If anything, you know, 588 00:30:43,040 --> 00:30:45,800 Speaker 15: I would just look at this as many global powers 589 00:30:45,840 --> 00:30:48,160 Speaker 15: are concerned about how are we going to keep up 590 00:30:48,160 --> 00:30:52,280 Speaker 15: the manufacturing because demand is so so high, demand is 591 00:30:52,360 --> 00:30:55,760 Speaker 15: outstripping supply. That piece is much more important to me 592 00:30:55,920 --> 00:30:58,560 Speaker 15: as an investor than all the little nuances as to 593 00:30:58,600 --> 00:31:00,480 Speaker 15: how we get there and supply. 594 00:31:01,600 --> 00:31:05,560 Speaker 3: You use the phrase bargaining chip a pardon the pun 595 00:31:05,640 --> 00:31:09,080 Speaker 3: on your behalf, But the calculus for people like David 596 00:31:09,160 --> 00:31:13,600 Speaker 3: Sachs is that that is the negotiation rare effs on 597 00:31:13,680 --> 00:31:19,120 Speaker 3: the China side in exchange for access to deprecated chips 598 00:31:19,160 --> 00:31:22,160 Speaker 3: on the US side, and principally in Vidio deprecated chips. Right, 599 00:31:22,560 --> 00:31:24,680 Speaker 3: do you have a better sense, bef of where that 600 00:31:24,760 --> 00:31:25,920 Speaker 3: negotiation is heading. 601 00:31:27,720 --> 00:31:31,200 Speaker 15: I could see it being resolved favorably for both sides. 602 00:31:31,760 --> 00:31:36,440 Speaker 15: You know, we've heard from in Nvidia's CEO that he 603 00:31:36,480 --> 00:31:37,200 Speaker 15: would really. 604 00:31:37,000 --> 00:31:38,480 Speaker 16: Like to restore those relations. 605 00:31:39,240 --> 00:31:41,680 Speaker 15: So even if you take some of our industry leaders, 606 00:31:42,320 --> 00:31:45,120 Speaker 15: they all want to see, you know, as much working 607 00:31:45,120 --> 00:31:46,200 Speaker 15: together as possible. 608 00:31:46,280 --> 00:31:47,720 Speaker 16: Of course, is that reasonable. 609 00:31:48,840 --> 00:31:52,960 Speaker 15: I do think that geopolitically, AI will continue to be 610 00:31:53,000 --> 00:31:56,320 Speaker 15: a point of tension. Is just so powerful in terms 611 00:31:56,360 --> 00:31:58,720 Speaker 15: of what it can do for GDP, And I think 612 00:31:58,760 --> 00:32:02,200 Speaker 15: it just goes back to that, which is because it's 613 00:32:02,320 --> 00:32:07,040 Speaker 15: so powerful as to how it can grow GDP, it's 614 00:32:07,080 --> 00:32:11,080 Speaker 15: a really the best investable opportunity of our lifetime. And 615 00:32:11,120 --> 00:32:12,720 Speaker 15: that's the piece I would really focus on. 616 00:32:14,120 --> 00:32:18,160 Speaker 3: Bethkindg of Io fund, I always appreciate the deep analysis, 617 00:32:18,480 --> 00:32:26,400 Speaker 3: Thank you very much. With no end to the US 618 00:32:26,480 --> 00:32:29,000 Speaker 3: government shut down insights, some companies that are looking to 619 00:32:29,040 --> 00:32:33,120 Speaker 3: go public are seizing an unusual opportunity. Guidance from the 620 00:32:33,160 --> 00:32:37,520 Speaker 3: SEC lets them file less detailed paperwork and have those 621 00:32:37,560 --> 00:32:41,960 Speaker 3: filings automatically declared effective after twenty days. I want to 622 00:32:41,960 --> 00:32:45,840 Speaker 3: get out to Bloomberg's IPO. Reporter Bailey Lipshaltz, this is 623 00:32:45,880 --> 00:32:49,240 Speaker 3: the subject of the hashtag ECM watch column, which I 624 00:32:49,280 --> 00:32:51,640 Speaker 3: am a religious reader of and if you're watching this, 625 00:32:51,840 --> 00:32:55,840 Speaker 3: you also should subscribe. But it's really interesting. Like for me, 626 00:32:56,360 --> 00:33:00,240 Speaker 3: I'm like, that sounds very spacky. Explain the mechanism here. 627 00:33:00,480 --> 00:33:03,640 Speaker 3: You can file more limited paperwork and then it just 628 00:33:03,720 --> 00:33:04,600 Speaker 3: kind of poop. 629 00:33:05,880 --> 00:33:06,960 Speaker 2: It just lingers ed. 630 00:33:07,040 --> 00:33:09,600 Speaker 17: And this is a route or strategy that we've seen 631 00:33:09,640 --> 00:33:12,880 Speaker 17: a few companies that are on file publicly, something that 632 00:33:12,960 --> 00:33:16,560 Speaker 17: you wouldn't do without kind of the path to going 633 00:33:16,600 --> 00:33:19,800 Speaker 17: public well plotted out. So we saw these companies flip 634 00:33:19,840 --> 00:33:23,640 Speaker 17: public thinking about in avon or beta technologies and basically 635 00:33:23,680 --> 00:33:26,000 Speaker 17: you're stuck kind of in a limbo. And so the 636 00:33:26,200 --> 00:33:28,840 Speaker 17: way to work around that with this new sec guidance 637 00:33:28,920 --> 00:33:31,480 Speaker 17: is you come up with the share price range that 638 00:33:31,520 --> 00:33:34,200 Speaker 17: you're willing to accept and then market and you come 639 00:33:34,280 --> 00:33:35,880 Speaker 17: up with a number of shares you want to sell, 640 00:33:36,320 --> 00:33:40,440 Speaker 17: You file that publicly with Edgar through US regulators, and 641 00:33:40,480 --> 00:33:42,520 Speaker 17: then twenty days from now it's effective and that would 642 00:33:42,560 --> 00:33:46,000 Speaker 17: enable you to price your IPO and sell those shares, 643 00:33:46,040 --> 00:33:49,200 Speaker 17: which is different than a so called delaying amendment, which 644 00:33:49,240 --> 00:33:52,120 Speaker 17: really allows companies to kind of have a complete hold 645 00:33:52,160 --> 00:33:55,160 Speaker 17: on that process, which normally you would file, wait fifteen 646 00:33:55,240 --> 00:33:57,720 Speaker 17: days for a seasoning period, then come out with a 647 00:33:57,800 --> 00:34:00,640 Speaker 17: price range, meet with investors, and then sell it week later. 648 00:34:00,840 --> 00:34:04,560 Speaker 17: This is a bit more difficult, but obviously a working 649 00:34:04,560 --> 00:34:06,400 Speaker 17: strategy that we're seeing some companies use. 650 00:34:07,400 --> 00:34:09,600 Speaker 3: One of the cool points in the reporting is that 651 00:34:09,760 --> 00:34:12,239 Speaker 3: wool Street has been surprised by this, like we're saying 652 00:34:12,239 --> 00:34:15,560 Speaker 3: an unusually high number are able to go through in 653 00:34:15,640 --> 00:34:19,120 Speaker 3: this shutdown. By the way, there you go hashtag ECM watch, 654 00:34:19,400 --> 00:34:20,040 Speaker 3: don't miss it. 655 00:34:20,680 --> 00:34:22,520 Speaker 2: Just explain why this is a surprise. 656 00:34:23,000 --> 00:34:26,440 Speaker 17: It's a surprise because a lot of bankers and lawyers 657 00:34:26,480 --> 00:34:29,960 Speaker 17: would want to run a tightly choreographed process. When you 658 00:34:30,200 --> 00:34:34,040 Speaker 17: use this workaround, you're exposed to the market with the 659 00:34:34,080 --> 00:34:37,560 Speaker 17: expected valuation and the expected IPO size. 660 00:34:37,280 --> 00:34:38,120 Speaker 2: For twenty days. 661 00:34:38,440 --> 00:34:41,520 Speaker 17: So that's not normal if bankers and lawyers don't really 662 00:34:41,600 --> 00:34:44,040 Speaker 17: like having that over a seven day period. 663 00:34:44,200 --> 00:34:45,480 Speaker 2: So when you have a market that. 664 00:34:45,520 --> 00:34:48,120 Speaker 17: Is living truth social posts, a true social post, or 665 00:34:48,160 --> 00:34:50,320 Speaker 17: press conference to press conference, or in the thick of 666 00:34:50,400 --> 00:34:53,280 Speaker 17: earning season, if you're a company that's using this workaround. 667 00:34:53,320 --> 00:34:56,920 Speaker 17: To go public, you're exposed to broader market risks, geopolitics 668 00:34:56,960 --> 00:35:00,000 Speaker 17: and otherwise, and you're also exposed to earnings from your peers. 669 00:35:00,080 --> 00:35:02,240 Speaker 17: So if you're looking to go public at a sixteen 670 00:35:02,360 --> 00:35:06,080 Speaker 17: multiple and your peer group underperforms and drops a twenty percent, 671 00:35:06,239 --> 00:35:07,919 Speaker 17: all of a sudden, your price looks a lot more 672 00:35:07,920 --> 00:35:10,280 Speaker 17: wonky than you would have expected. And it's also difficult 673 00:35:10,320 --> 00:35:11,440 Speaker 17: to get investor attention in. 674 00:35:12,320 --> 00:35:14,440 Speaker 2: This is Bloomberg Tech. I think you mentioned Navon. 675 00:35:14,760 --> 00:35:17,839 Speaker 3: There are other tech names out there that are kind 676 00:35:17,840 --> 00:35:20,560 Speaker 3: of call in the situation, just very quick case studies. 677 00:35:21,040 --> 00:35:24,000 Speaker 17: Yeah, Navon using a tight price range. They're expected a 678 00:35:24,000 --> 00:35:27,279 Speaker 17: price later next week, towards the Halloween date. That'll be 679 00:35:27,320 --> 00:35:30,840 Speaker 17: interesting type book. And then Beta Technology is a el 680 00:35:31,000 --> 00:35:33,920 Speaker 17: evotal company using a broad range with Cornerstone, it's going 681 00:35:33,960 --> 00:35:35,839 Speaker 17: to be a different one that a price a couple 682 00:35:35,880 --> 00:35:36,520 Speaker 17: of days after that. 683 00:35:37,400 --> 00:35:39,040 Speaker 2: You've got to get it done by Halloween. 684 00:35:39,160 --> 00:35:41,480 Speaker 3: It's basically the biggest holiday of this part of the 685 00:35:41,560 --> 00:35:45,040 Speaker 3: year for many people. Bloomberg's Bailey Lipschaltz, great job, Thank 686 00:35:45,080 --> 00:35:48,880 Speaker 3: you very much. VM Software, owned by private equity firm 687 00:35:48,920 --> 00:35:52,120 Speaker 3: Insight Partners, agreed to buy Security AI for about one 688 00:35:52,160 --> 00:35:55,680 Speaker 3: point seventy three billion dollars in cash and stock, adding 689 00:35:55,719 --> 00:36:00,000 Speaker 3: software that helps secure corporate data used in AI applications, 690 00:36:00,080 --> 00:36:03,560 Speaker 3: make software for backing up and recovering data after ransomware 691 00:36:03,560 --> 00:36:06,400 Speaker 3: attacks and other breaches, and it's looking to protect clients 692 00:36:06,400 --> 00:36:09,319 Speaker 3: from new threats posed by AI. The deals expected to 693 00:36:09,320 --> 00:36:13,000 Speaker 3: close the first week of December. Okay, coming up, Touro 694 00:36:13,120 --> 00:36:16,160 Speaker 3: CEO Andre Hadad joins us talk about the company's plan 695 00:36:16,520 --> 00:36:21,080 Speaker 3: to attract drivers with a low commitment alternative to owning 696 00:36:21,080 --> 00:36:46,279 Speaker 3: a car. That's next, This is Windberg tech car sharing marketplace. 697 00:36:46,400 --> 00:36:49,960 Speaker 3: Touro is launching what it calls a low commitment alternative 698 00:36:50,000 --> 00:36:53,080 Speaker 3: to car ownership carsoers. We be able to rent cars 699 00:36:53,400 --> 00:36:56,080 Speaker 3: for months of the time. But the program comes as 700 00:36:56,200 --> 00:37:00,520 Speaker 3: US car sales remains strong despite tarris and economic uncertainty. 701 00:37:00,920 --> 00:37:03,960 Speaker 3: There is a lot to discuss with Touro's CEO, Andre Hadad, 702 00:37:03,960 --> 00:37:06,640 Speaker 3: who's here with us in San Francisco. Okay, let's just 703 00:37:06,680 --> 00:37:08,680 Speaker 3: start by explaining the mechanism. How does this work? 704 00:37:09,320 --> 00:37:10,600 Speaker 2: So it's pretty simple. 705 00:37:10,800 --> 00:37:13,279 Speaker 18: You know you're if you've known Turo, you know that 706 00:37:13,320 --> 00:37:16,879 Speaker 18: we offer car rentals now for many years. Typically our 707 00:37:16,960 --> 00:37:19,799 Speaker 18: car rental trips were a few days at a time 708 00:37:19,920 --> 00:37:23,080 Speaker 18: typically for travel. Now you can actually book a car 709 00:37:23,280 --> 00:37:25,400 Speaker 18: for multiple months at a time, and you pay on 710 00:37:25,440 --> 00:37:28,960 Speaker 18: a monthly basis, as if you're paying a monthly lease 711 00:37:29,120 --> 00:37:33,080 Speaker 18: or a monthly financing repayment on a monthly basis. But 712 00:37:33,239 --> 00:37:36,799 Speaker 18: there's no upfront commitment, so there's no money down, So 713 00:37:36,920 --> 00:37:39,919 Speaker 18: money down, Yeah, there's no deposit, there's no commitment for 714 00:37:40,040 --> 00:37:43,120 Speaker 18: an extended period of time. You can sign up for 715 00:37:43,600 --> 00:37:46,080 Speaker 18: one month and extend for another few months, or you 716 00:37:46,120 --> 00:37:48,600 Speaker 18: can sign up for three months and extend or reduce. 717 00:37:48,800 --> 00:37:51,960 Speaker 3: But here's the disconnect Andre that it's I know it 718 00:37:52,080 --> 00:37:54,360 Speaker 3: is a peer platform. In other words, the cars on 719 00:37:54,480 --> 00:37:57,640 Speaker 3: Touro are owned either by individuals or as you and 720 00:37:57,680 --> 00:38:00,680 Speaker 3: I have discussed, people that have made a business as 721 00:38:00,680 --> 00:38:04,600 Speaker 3: having a small fleet of vehicles. How does that tension 722 00:38:04,680 --> 00:38:07,560 Speaker 3: work of somebody saying, Okay, here's my car, I'm going 723 00:38:07,560 --> 00:38:08,880 Speaker 3: to rent it out for a few months. 724 00:38:09,480 --> 00:38:11,720 Speaker 18: Well, there's a lot of people on tour as you mentioned, 725 00:38:11,960 --> 00:38:16,200 Speaker 18: that are now professional hosts who are running a business 726 00:38:16,200 --> 00:38:18,799 Speaker 18: on top of our platform, and they're really interested in 727 00:38:18,920 --> 00:38:22,720 Speaker 18: getting maximum utilization for their vehicles, and they're also able 728 00:38:22,760 --> 00:38:26,719 Speaker 18: to acquire vehicles from their neighbors and from their friends 729 00:38:26,760 --> 00:38:29,840 Speaker 18: and from their family members. We call them co hosts, 730 00:38:30,239 --> 00:38:34,680 Speaker 18: so it's not just their own cars. Typically, these power hosts, 731 00:38:35,000 --> 00:38:38,000 Speaker 18: as we call them, they have a few cars of 732 00:38:38,040 --> 00:38:41,040 Speaker 18: their own, but they're actually fleet sizes much larger because 733 00:38:41,040 --> 00:38:44,440 Speaker 18: they are co hosts for many other car owners who've 734 00:38:44,480 --> 00:38:46,600 Speaker 18: given them their cars so that they can monetize them 735 00:38:46,640 --> 00:38:49,840 Speaker 18: on their behalf. And so these hosts are looking for 736 00:38:49,920 --> 00:38:53,200 Speaker 18: ways to maximize their utilization. So they're very excited about 737 00:38:53,200 --> 00:38:56,040 Speaker 18: the launch of monthly because it enables, you know, multi 738 00:38:56,160 --> 00:38:58,919 Speaker 18: months of utilization and one trip instead of having lots 739 00:38:58,920 --> 00:39:01,240 Speaker 18: of different trips on a month basically sets the price. 740 00:39:01,960 --> 00:39:05,680 Speaker 18: Our hosts set the price, so we actually guide them 741 00:39:05,719 --> 00:39:08,279 Speaker 18: to provide the most effective price. So we give them 742 00:39:08,320 --> 00:39:11,120 Speaker 18: recommendations on pricing, and we find that many of our 743 00:39:11,160 --> 00:39:15,719 Speaker 18: hosts are following our recommendations. For this launch, we have 744 00:39:15,800 --> 00:39:18,960 Speaker 18: dramatically lowered our monetization, so now our trip fees are 745 00:39:19,000 --> 00:39:22,040 Speaker 18: down to zero on monthly trips, so. 746 00:39:21,960 --> 00:39:22,759 Speaker 2: We're submit for you. 747 00:39:22,800 --> 00:39:25,920 Speaker 18: Then in the long run, well, we're actually monetizing our 748 00:39:25,960 --> 00:39:28,880 Speaker 18: trips only on the host side and with the sale 749 00:39:28,880 --> 00:39:32,040 Speaker 18: of protection, so there are three ways we monetize our trips. 750 00:39:32,080 --> 00:39:34,600 Speaker 18: We've got our trip fee, our protection fee, and then 751 00:39:34,640 --> 00:39:37,319 Speaker 18: our host fees. We've kept the host fee, we've kept 752 00:39:37,360 --> 00:39:40,000 Speaker 18: the protection fee, but we've zeroed out our trip fee 753 00:39:40,080 --> 00:39:42,320 Speaker 18: because we want to make sure that these monthly rentals 754 00:39:42,360 --> 00:39:43,800 Speaker 18: are as affordable as possible. 755 00:39:43,840 --> 00:39:45,799 Speaker 3: In the time that I've known you, you've always been 756 00:39:46,680 --> 00:39:49,720 Speaker 3: directed by data and evidence. What do you see about 757 00:39:49,719 --> 00:39:52,520 Speaker 3: the future of car ownership? The threat that I see 758 00:39:52,560 --> 00:39:55,359 Speaker 3: to Toro has been what Tesla proposes to do right, 759 00:39:55,480 --> 00:39:58,879 Speaker 3: operate a robotaxi fleet where Tesla owners can submit their 760 00:39:58,920 --> 00:40:02,840 Speaker 3: car to anticipate in a row. It's actually fleet X. Essentially, 761 00:40:02,960 --> 00:40:05,240 Speaker 3: there's a lot of car ownership questions. 762 00:40:05,120 --> 00:40:07,000 Speaker 18: A lot of car ownership questions. As you mentioned in 763 00:40:07,000 --> 00:40:10,400 Speaker 18: the beginning of the show. While car sales are resilient, 764 00:40:10,520 --> 00:40:13,040 Speaker 18: they're still down from their peak, and we've never recovered 765 00:40:13,080 --> 00:40:15,200 Speaker 18: from the peak of twenty seventeen when we hit seventeen 766 00:40:15,239 --> 00:40:18,040 Speaker 18: and a half million vehicles sold in the country. And 767 00:40:18,120 --> 00:40:20,880 Speaker 18: I believe that we've really reached peak car. You know, 768 00:40:20,960 --> 00:40:23,640 Speaker 18: we're never going to go back to seventeen and a 769 00:40:23,680 --> 00:40:27,400 Speaker 18: half or eighteen or larger numbers because people are looking 770 00:40:27,440 --> 00:40:30,840 Speaker 18: at different ways to access cars, and we believe that 771 00:40:30,920 --> 00:40:33,040 Speaker 18: Turo has a big role to play now that we've 772 00:40:33,080 --> 00:40:37,320 Speaker 18: expanded our product offering to attack you know, much larger TAM. 773 00:40:37,400 --> 00:40:40,080 Speaker 18: You know, the car ownership TAM is a trillion dollars, 774 00:40:40,120 --> 00:40:42,080 Speaker 18: whereas the car rental TAM is only one hundred billion. 775 00:40:42,120 --> 00:40:44,400 Speaker 2: So we're pretty excited about this launch. Andre, you and 776 00:40:44,440 --> 00:40:45,240 Speaker 2: I have a tradition. 777 00:40:45,400 --> 00:40:48,680 Speaker 3: It's where I ask you about IPO and given that 778 00:40:48,760 --> 00:40:52,680 Speaker 3: circumstances have changed on over the last year, Yes, what's 779 00:40:52,680 --> 00:40:53,560 Speaker 3: the latest thinking. 780 00:40:53,880 --> 00:40:56,440 Speaker 18: The latest thinking is, we still don't think it's the 781 00:40:56,520 --> 00:40:59,439 Speaker 18: right time for us. You know, we're taking a lot 782 00:40:59,440 --> 00:41:03,280 Speaker 18: of big decisions internally to retool some parts of the business. 783 00:41:03,560 --> 00:41:05,920 Speaker 18: We're excited about this slanch, as I mentioned, we think 784 00:41:05,920 --> 00:41:09,080 Speaker 18: it expands our opportunity much larger and much larger market. 785 00:41:09,680 --> 00:41:12,400 Speaker 18: We think that's going to help accelerate our growth and profitability. 786 00:41:12,520 --> 00:41:14,319 Speaker 18: So we look forward to be back and talking about 787 00:41:14,320 --> 00:41:15,520 Speaker 18: the API at some point in time. 788 00:41:15,719 --> 00:41:17,360 Speaker 2: Well, I'll hold you to that commitment. 789 00:41:17,680 --> 00:41:21,080 Speaker 3: Andre Hadad turo Ceo, thank you very much for joining us. 790 00:41:21,480 --> 00:41:24,440 Speaker 3: That does it for this edition of Bloomberg Tech. The 791 00:41:24,440 --> 00:41:28,160 Speaker 3: big story in the markets has been Warner Brothers Discovery 792 00:41:28,200 --> 00:41:30,520 Speaker 3: the board coming out, saying they're looking at a range 793 00:41:30,760 --> 00:41:34,120 Speaker 3: of strategic options, including sticking with an existing plan to 794 00:41:34,160 --> 00:41:38,759 Speaker 3: split the business, maybe spinning something off, maybe considering a sale. 795 00:41:38,920 --> 00:41:44,040 Speaker 3: Bloomberg then reported that those circling include Netflix and Comcast, 796 00:41:44,160 --> 00:41:48,880 Speaker 3: adding to the prior reporting that Paramounts Guidance was also 797 00:41:49,040 --> 00:41:51,759 Speaker 3: thinking of a bid. When we broke that news in 798 00:41:51,800 --> 00:41:56,600 Speaker 3: the last hour, it was Comcast shares that reacted more strongly. Netflix, 799 00:41:56,640 --> 00:42:00,799 Speaker 3: of course, team reports earnings after the bell, so is 800 00:42:00,880 --> 00:42:04,000 Speaker 3: treading water. For that reason, Warner Brothers Discovery on track 801 00:42:04,000 --> 00:42:07,839 Speaker 3: for his biggest jump since early September. Don't forget check 802 00:42:07,880 --> 00:42:09,799 Speaker 3: out the podcast. Loads of you have been coming up 803 00:42:09,840 --> 00:42:11,959 Speaker 3: to me all over the country saying that you listen 804 00:42:12,040 --> 00:42:13,719 Speaker 3: to the show in the form of the pod, and 805 00:42:13,760 --> 00:42:16,200 Speaker 3: you know where to find it online. iHeart Spotify and 806 00:42:16,280 --> 00:42:19,440 Speaker 3: on Apple and of course on all the Bloomberg platforms. 807 00:42:19,960 --> 00:42:22,600 Speaker 3: Much more to come this week. Stay with us. This 808 00:42:22,760 --> 00:42:23,600 Speaker 3: is Bloomberg Tech.