WEBVTT - Nvidia's Slide and Apple's EU Fines 0:00:01.480 --> 0:00:02.200 From Marhard. 0:00:02.360 --> 0:00:06.760 We're Innovation, Money and Power Collie in Silicon Vallet NBN. 0:00:07.120 --> 0:00:10.560 This is Bloomberg Technology with Caroline hide. 0:00:10.240 --> 0:00:11.360 And ed Love Love. 0:00:25.840 --> 0:00:28.960 I met Ludlow in San Francisco. Caroline hides off. This 0:00:29.000 --> 0:00:31.920 is Bloomberg Technology coming up in video slides. For a 0:00:31.960 --> 0:00:35.400 third consecutive day, almost four hundred billion dollars wiped off 0:00:35.400 --> 0:00:39.839 its market cap. Full coverage ahead, plus Apple facing billions 0:00:39.880 --> 0:00:42.840 of euros in fines over its app store rules under 0:00:42.840 --> 0:00:44.880 the EU's Digital Markets Act. 0:00:45.200 --> 0:00:47.760 Details succumb and car seller's. 0:00:47.400 --> 0:00:51.800 Worn of a possible material hit from the CDK cyber attack. 0:00:51.840 --> 0:00:53.680 We have all the latest from one of our big 0:00:53.720 --> 0:00:57.040 tech editors. This is what financial markets look like to 0:00:57.120 --> 0:00:59.360 start this week. Happy Monday to all of you watching 0:00:59.520 --> 0:01:00.000 around the world. 0:01:00.000 --> 0:01:00.280 World. 0:01:00.320 --> 0:01:02.720 The SMB five hundred actually modestly higher. We're going to 0:01:02.720 --> 0:01:05.760 get into this very shortly, but in video, which is 0:01:05.800 --> 0:01:07.840 the most expensive stock on the s and P five 0:01:07.920 --> 0:01:11.000 hundred is a real drag then as that one hundred 0:01:11.040 --> 0:01:14.160 down three ten percent yields pushing a little higher four 0:01:14.160 --> 0:01:17.080 point two six percent on the US tenure. And Bitcoin's 0:01:17.400 --> 0:01:20.280 been a real story. Going to dive deep into bitcoin. 0:01:20.360 --> 0:01:22.720 Halfway through the show with our own in house and 0:01:22.720 --> 0:01:25.240 list of Bloomberg Intelligence. But we're coming off one of 0:01:25.240 --> 0:01:27.560 the worst seven day stretches of the year so far 0:01:27.880 --> 0:01:31.200 for many digital assets, but mostly bitcoin. Let's take a 0:01:31.240 --> 0:01:33.800 look at Nvidia. Actually, in the last twenty minutes or so, 0:01:34.160 --> 0:01:36.720 the declines that we open with in Monday session have 0:01:36.760 --> 0:01:39.360 really accelerated. We're down more than five percent in the 0:01:39.440 --> 0:01:43.160 session over three days. The three straight days of declines, 0:01:43.160 --> 0:01:46.280 which hasn't happened since early May. We've wiped up more 0:01:46.360 --> 0:01:48.440 than three hundred and eighty billion dollars in market cap. 0:01:48.440 --> 0:01:51.880 As a consequence, Nvidia has gone from being the world's 0:01:51.920 --> 0:01:56.720 most valuable company briefly dropping below both Apple and Microsoft. 0:01:57.080 --> 0:01:59.720 But there's a lot of conversation around valuation. One of 0:01:59.760 --> 0:02:02.640 the tricks we're looking at is it's priced to sales ratio. 0:02:03.080 --> 0:02:07.640 It's trading at more than twenty times that the expected 0:02:07.680 --> 0:02:09.440 sales are the next twelve months. I want to get 0:02:09.440 --> 0:02:13.520 out to London and Bloomberg Opinions columnist Pame Olsen. In 0:02:13.560 --> 0:02:16.600 her column last week, Parmei argued that in Vidia is 0:02:16.639 --> 0:02:20.360 a classic case of the bigger they are, the harder 0:02:20.919 --> 0:02:24.360 they fall, and that other tech company leaders should be 0:02:24.400 --> 0:02:27.800 looking at what's happening with Nvidia and wincing over how 0:02:27.919 --> 0:02:33.080 rapidly it's taken the AI world. Pame good timing to 0:02:33.160 --> 0:02:38.359 have you on the program. Explain your thesis to me, Well. 0:02:38.240 --> 0:02:40.079 I think a lot of people look at videos as 0:02:40.160 --> 0:02:43.640 kind of bellweather for AI's success, but it's also a 0:02:43.680 --> 0:02:44.480 reflection a. 0:02:44.880 --> 0:02:46.519 Lot of the hype in AI. 0:02:47.760 --> 0:02:51.280 You know, it's kind of profiting from the short term 0:02:51.440 --> 0:02:54.919 success of businesses who are buying its chips for their servers, 0:02:54.919 --> 0:02:58.399 cloud companies like Microsoft and Amazon. But if you look 0:02:58.440 --> 0:03:02.400 further downstream at the the actual businesses who are buying 0:03:02.440 --> 0:03:05.280 the generative AI tools from the likes of open Ai 0:03:05.840 --> 0:03:11.200 or Microsoft Azure, we're seeing signs of discontent. There are 0:03:11.240 --> 0:03:14.360 businesses who are saying, and I've seen multiple surveys coming 0:03:14.400 --> 0:03:17.120 out just in the last few months, saying that they 0:03:17.160 --> 0:03:20.320 are not really getting the productivity they were hoping for. 0:03:20.680 --> 0:03:22.760 They're not quite sure how to use it. There's been 0:03:22.760 --> 0:03:26.040 a decline in plans to spend on AI. 0:03:26.200 --> 0:03:26.799 I think there's been. 0:03:26.760 --> 0:03:30.240 A decline from ninety three percent last year to sixty 0:03:30.320 --> 0:03:33.520 three percent this year. In spite of the fact that 0:03:33.560 --> 0:03:35.440 these tools are getting better. 0:03:36.040 --> 0:03:38.360 So I think a big reason. 0:03:38.040 --> 0:03:41.560 For this is that these generative AI tools from the 0:03:41.640 --> 0:03:45.000 likes of Microsoft, Open Ai, and Google have been marketed 0:03:45.080 --> 0:03:49.320 as general purpose tools, like a Swiss army knife. 0:03:48.880 --> 0:03:50.520 Of technology that's going to make. 0:03:50.360 --> 0:03:55.120 Your workforce more productive. But of course these tools aren't 0:03:55.120 --> 0:03:59.240 necessarily general purposes. They're certainly capable in some areas, but 0:03:59.280 --> 0:04:02.920 they make mistake, they make hallucinations, there are issues with 0:04:03.040 --> 0:04:09.200 data security. Strangely, our whole perception of computers in AI, 0:04:10.040 --> 0:04:12.600 in how it was kind of marketed to us by 0:04:12.640 --> 0:04:14.440 science fiction as being these kind of. 0:04:14.440 --> 0:04:18.440 Robotic, fact based machines, isn't really how it is. In reality. 0:04:18.480 --> 0:04:23.320 They're actually very good at artistic endeavors and generating images 0:04:23.320 --> 0:04:27.360 and poetry and stories. Actually really not so good at 0:04:27.400 --> 0:04:29.880 generating facts that you can rely on. And this is 0:04:29.920 --> 0:04:35.160 something that businesses are realizing, sometimes to their detriment. And 0:04:35.240 --> 0:04:37.240 so I think this has been with kind of raining 0:04:37.279 --> 0:04:39.920 and of spending, and I think we're starting to see 0:04:39.920 --> 0:04:43.240 that reflective potentially in the decline and shares and in video. 0:04:44.080 --> 0:04:45.919 A lot of investors, even if they can't do the 0:04:46.040 --> 0:04:52.040 math on valuation or correctly forecasting or predicting sales they'll say, oh, 0:04:52.040 --> 0:04:55.560 when videos supply constrained, right demand right now, for AI 0:04:55.600 --> 0:05:00.360 accelerators greatly exceeds their ability to supply. It's one other 0:05:00.360 --> 0:05:02.360 piece of your column that I found so interesting. We 0:05:02.480 --> 0:05:05.760 both covered technology for quite a long time, and you 0:05:05.839 --> 0:05:10.480 make the point that historically, in phases of technological progress, 0:05:10.920 --> 0:05:13.880 all companies have a very clear north star something to 0:05:13.960 --> 0:05:17.120 work towards. But you also make the point that with AI, 0:05:17.920 --> 0:05:20.600 it's kind of become such a grand vision led by 0:05:20.720 --> 0:05:24.440 specific individuals that it's lost or meaning what do you 0:05:24.560 --> 0:05:25.080 mean by that? 0:05:26.400 --> 0:05:30.200 Well, this whole race, this arms race for AI, was 0:05:30.279 --> 0:05:34.560 sparked by two men, Sam Altman of Open Ai and 0:05:34.600 --> 0:05:39.080 Demis Hasabus, the founder of DeepMind Google DeepMind now, and 0:05:39.240 --> 0:05:43.200 both guys we're trying to create artificial general intelligence, which 0:05:43.240 --> 0:05:46.359 is this hugely ambitious goal to create a machine that 0:05:46.400 --> 0:05:47.760 can essentially do everything. 0:05:47.839 --> 0:05:51.040 It is more knowledgeable than humans. 0:05:51.120 --> 0:05:53.560 It can surpass our own cognitive abilities, and it has 0:05:54.040 --> 0:05:57.120 general knowledge, meaning it can do creative things, but it 0:05:57.120 --> 0:06:01.120 can also do mathematical calculations very well and better than humans. 0:06:01.400 --> 0:06:05.400 And their objectives were nothing less than curing cancer and 0:06:05.440 --> 0:06:07.719 solving climate change. There was a sense that if you 0:06:07.880 --> 0:06:12.440 had this machine, this almost godlike machine that could solve 0:06:12.480 --> 0:06:16.040 everything in a general capacity, that it could fix all problems. 0:06:16.400 --> 0:06:18.160 And I think when you have a vision like that, 0:06:18.160 --> 0:06:20.520 that's just so grand, and then it trickles. 0:06:20.200 --> 0:06:24.520 Down into the marketing and sales channels of your tech company, 0:06:24.920 --> 0:06:26.560 and then they're going out and trying to sell this 0:06:26.720 --> 0:06:31.320 to businesses. Then your end customers have this kind of 0:06:31.400 --> 0:06:34.800 sense that they're getting this tool that has this general 0:06:34.839 --> 0:06:38.360 purpose ability. They're almost left with a sense of paralysis. 0:06:38.400 --> 0:06:41.880 I mean, what do you do with technology that can 0:06:41.920 --> 0:06:44.760 do everything? Where do you even start? So I think 0:06:44.800 --> 0:06:48.160 the mistake that some tech companies have made in marketing 0:06:48.240 --> 0:06:52.800 AI has been not necessarily in saying that the capabilities 0:06:52.800 --> 0:06:55.760 are too high, because the they're very capable, but it's 0:06:55.760 --> 0:06:58.760 been in marketing them as being general purpose because they 0:06:58.760 --> 0:07:02.520 can't do everything everywhere all at once. They can only 0:07:02.560 --> 0:07:05.640 do a few things very well. And that's why I 0:07:05.680 --> 0:07:10.120 think businesses need time when they buy these tools to 0:07:10.200 --> 0:07:11.400 experiment with them. 0:07:11.680 --> 0:07:14.120 You know, it's a little bit like with the mobile revolution. 0:07:14.840 --> 0:07:19.120 People individuals who worked for companies brought in their smartphones 0:07:19.520 --> 0:07:22.120 and they told the IT people, can you just set 0:07:22.200 --> 0:07:23.240 up my corporate. 0:07:22.880 --> 0:07:25.840 Email to my BlackBerry, to my iPhone, and they were 0:07:25.840 --> 0:07:26.600 sort of forced. 0:07:26.880 --> 0:07:29.680 Companies were forced to do that because people were doing 0:07:29.680 --> 0:07:32.440 their own personal experiments with them and using them as 0:07:32.440 --> 0:07:35.880 productivity tools for themselves. And I think right now, this 0:07:36.080 --> 0:07:39.760 kind of top down approach to let's force the entire 0:07:39.880 --> 0:07:43.440 staff to use these tools, it's just a recipe for failure, 0:07:43.720 --> 0:07:46.360 because when technology is so new and cutting edge, it 0:07:46.400 --> 0:07:49.320 really needs time to percolate and for individuals to just 0:07:49.400 --> 0:07:52.640 sort of find the way and how these tools were 0:07:52.640 --> 0:07:53.760 work for everybody else. 0:07:54.680 --> 0:07:57.960 Patmy Elsen, one of our Bloomberg Opinion columnists, just really 0:07:57.960 --> 0:07:59.600 fantastic to have you on the show, and I really 0:07:59.640 --> 0:08:02.960 strongly advised the audience read Palme's column from last week. 0:08:03.040 --> 0:08:06.240 Let's keep the conversation going with the Aka Yoshioka, portfolio 0:08:06.280 --> 0:08:08.240 manager at Wealth Enhancement Group. 0:08:08.280 --> 0:08:09.000 This is wonderful. 0:08:09.040 --> 0:08:12.120 There is the fundamental analysis that you can make whether 0:08:12.120 --> 0:08:14.520 you're on the cell side or by side. There is 0:08:14.640 --> 0:08:18.720 the technologist or techno optimist view, and then there's the 0:08:18.760 --> 0:08:22.000 sort of romantic view of what AI can do for mankind. 0:08:22.520 --> 0:08:26.040 Very difficult for you, aoco, everything that we've just discussed, 0:08:26.280 --> 0:08:28.600 Where do you start with the fundamentals or what your 0:08:28.640 --> 0:08:29.280 heart tells you. 0:08:30.640 --> 0:08:33.360 Absolutely, we always go back to the fundamentals. I think 0:08:33.400 --> 0:08:36.920 when we're looking at a security and I think we 0:08:36.920 --> 0:08:39.880 look back at history too. I think there's a part 0:08:39.920 --> 0:08:42.240 of us. There are some of us that have witnessed 0:08:42.240 --> 0:08:44.760 some of this back in the nineties, in early two 0:08:44.760 --> 0:08:47.200 thousand when the tech bubble bursts, and so we're well 0:08:47.240 --> 0:08:51.880 aware of some of the risks that surround names that 0:08:51.960 --> 0:08:55.679 get hyped up from both the sentiment standpoint, even though 0:08:55.679 --> 0:08:59.440 the fundamentals may be there in order to support some 0:08:59.559 --> 0:09:03.880 of the overall enthusiasm around the start. 0:09:04.400 --> 0:09:08.440 The point that the Bloomberg story at the weekend made 0:09:08.640 --> 0:09:13.440 was that it's really hard to forecast or predict top 0:09:13.480 --> 0:09:15.760 line growth from video right now. If you go back 0:09:15.800 --> 0:09:18.719 to the August quarter of twenty twenty three, which is 0:09:18.720 --> 0:09:23.000 when this kind of parabolic growth took off, revenue each 0:09:23.080 --> 0:09:26.640 quarter has come in on average thirteen percent above what 0:09:26.800 --> 0:09:30.680 management guided. Now, as you know better than anyone, management 0:09:30.720 --> 0:09:33.680 teams can be a little conservative even at the midpoint 0:09:33.679 --> 0:09:37.280 of the ranges when they guide, but it's still the 0:09:37.320 --> 0:09:39.040 math that you have to do. They point in this 0:09:39.120 --> 0:09:42.720 piece to the price to sales ratio being above twenty 0:09:42.720 --> 0:09:47.640 three something like that. In any normal circumstance, I think 0:09:47.720 --> 0:09:49.520 people would be much more cautious. 0:09:49.120 --> 0:09:50.600 Than they are within video. 0:09:51.320 --> 0:09:53.720 Why are they not being so cautious at least until 0:09:53.720 --> 0:09:54.600 this morning session. 0:09:56.000 --> 0:09:59.880 Absolutely, I think it's really difficult to really ask for 0:10:00.640 --> 0:10:04.920 what the you know, total addressable market really is for 0:10:05.160 --> 0:10:08.680 artificial intelligence. You could say that it continues to be, 0:10:09.000 --> 0:10:11.920 you know, to be growing, and so really trying to 0:10:11.960 --> 0:10:14.920 ascertain what that number is going to be in the 0:10:15.000 --> 0:10:18.680 long term is what is so difficult about, you know, 0:10:18.880 --> 0:10:22.199 valuing in video right now. It used to be sort 0:10:22.200 --> 0:10:24.160 of a rule of thumb when I was growing up 0:10:24.160 --> 0:10:27.160 in this business that you know, anything over ten times 0:10:27.200 --> 0:10:30.520 price to sales was just too expensive. And at twenty 0:10:30.520 --> 0:10:34.280 three times, it's well above that, and so it does 0:10:34.400 --> 0:10:37.360 become very difficult and so and it becomes more of 0:10:37.400 --> 0:10:40.840 a short term guessing game in terms of supply and demand. 0:10:41.280 --> 0:10:46.480 Right now, demand outstrips supply. But you know, as Parmi mentioned, 0:10:46.679 --> 0:10:50.240 if demand starts to weigane a little bit and that 0:10:50.400 --> 0:10:54.400 equilibriate equilibrium comes to fruition, I think, you know, it 0:10:54.440 --> 0:10:59.640 could be problematic for Nvidia. 0:10:57.760 --> 0:11:02.320 To investors get distracted for other potential opportunities because of 0:11:02.360 --> 0:11:05.280 all this sort of myopic focus on one name. 0:11:07.480 --> 0:11:09.160 I think, you know, part of the reason why some 0:11:09.240 --> 0:11:12.120 of the utility companies have done so well recently is 0:11:12.320 --> 0:11:16.559 just all of the electricity demand that's being forecast for 0:11:16.920 --> 0:11:21.080 the data centers to really utilize the power that AI 0:11:21.360 --> 0:11:25.640 brings to all these servers and data centers. And you know, 0:11:25.720 --> 0:11:30.640 you've seen sort of that secondary and tertiary derivative plays 0:11:30.679 --> 0:11:35.760 of artificial intelligence and Nvidia kind of come to the market. 0:11:35.920 --> 0:11:38.520 So we'll have to see where the true sort of 0:11:38.559 --> 0:11:42.520 opportunities are going forward now that so many sort of 0:11:42.600 --> 0:11:45.120 secondary and tertiary effects have really. 0:11:45.080 --> 0:11:46.240 Been played out a little bit. 0:11:47.000 --> 0:11:49.880 And you know, we look back at history again with 0:11:50.040 --> 0:11:52.600 Nvidia and there have been plenty of times in which 0:11:52.640 --> 0:11:56.320 the stock has come down over fifty percent. It's part 0:11:56.320 --> 0:12:01.000 of the volatility for the stock over the long term. 0:12:01.480 --> 0:12:04.320 Ka Yoshioka, portfolio manager a Welk Enhancement Group. 0:12:04.320 --> 0:12:05.120 Great to catch up. 0:12:05.160 --> 0:12:07.200 Great to have you here on Bloomberg Technology. 0:12:07.200 --> 0:12:07.520 Thank you. 0:12:07.880 --> 0:12:10.760 We have some breaking news crossing the Bloomberg terminal, and 0:12:10.800 --> 0:12:14.079 we have a red headline crossing the Bloomberg terminal. Black 0:12:14.160 --> 0:12:19.000 suit cybercrime gang is blamed in major CDK ransomware attack. 0:12:19.320 --> 0:12:22.760 This is a hacking group called black Suit, and according 0:12:22.800 --> 0:12:26.000 to Alan Lisker, who is a threat analyst at the 0:12:26.000 --> 0:12:30.840 cybersecurity firm Recorded Future, they are behind the cyber attack 0:12:31.120 --> 0:12:34.760 on CDK Global. That is the hack that has basically 0:12:34.920 --> 0:12:39.560 crippled a number of auto and car retailers because those 0:12:39.640 --> 0:12:41.720 names on your screen, some of which are really moving 0:12:41.760 --> 0:12:45.240 through upside but recovering from many days of declines, rely 0:12:45.400 --> 0:12:50.640 on cdk's platform for a POS front office, back office 0:12:50.679 --> 0:12:53.400 inventory management. So that's the breaking news that we're getting. 0:12:53.400 --> 0:12:55.559 We have a name that it is a group called 0:12:55.600 --> 0:12:59.480 Black Suit, and that the cybercrime group has demanded an 0:12:59.559 --> 0:13:01.960 extor aortion fee which is believed to be in the 0:13:02.000 --> 0:13:06.440 tens of millions of dollars from CDK, and Bloomberg News 0:13:06.440 --> 0:13:09.440 reported if you remember Friday, that CDK would be prepared 0:13:09.480 --> 0:13:10.559 to make a random payment. 0:13:10.600 --> 0:13:11.040 Later in the. 0:13:11.040 --> 0:13:13.360 Program, we're going to go out to Dana Wolman, who's 0:13:13.400 --> 0:13:16.160 one of our tech editors who's been leading coverage of this, 0:13:16.200 --> 0:13:18.480 and we will get a much bigger picture and detailed 0:13:18.480 --> 0:13:19.560 picture of what's going on. 0:13:19.800 --> 0:13:20.880 After we've got that break news. 0:13:20.920 --> 0:13:23.559 Okay, coming up on the show, Apple is risking new 0:13:23.640 --> 0:13:24.600 fines over its. 0:13:24.520 --> 0:13:26.560 App store rules in the European Union. 0:13:26.559 --> 0:13:28.240 We're going to go out to Bloomberg's Mark Guman. There 0:13:28.320 --> 0:13:30.480 is a lot of Apple news to discuss. 0:13:30.760 --> 0:13:32.840 Stay with us, This is Bloomberg Technology. 0:13:43.120 --> 0:13:46.160 There's a lot of Apple news to break down today. First, 0:13:46.200 --> 0:13:49.679 the company risks billions of euros of new fines in 0:13:49.720 --> 0:13:54.040 the EU after antitrust regulators escalated a conflict over the 0:13:54.040 --> 0:13:58.360 company's app store rules. And Apple has added China's two 0:13:58.400 --> 0:14:02.440 biggest online retailers, Ali Barber and JD to a growing 0:14:02.440 --> 0:14:06.000 list of apps that will support its mixed reality Vision 0:14:06.040 --> 0:14:09.960 pro headset when it goes on sale in that jurisdiction. Friday, 0:14:10.960 --> 0:14:14.040 Who else do we go to? Bloomberg's chief correspondent, Mark German. 0:14:14.280 --> 0:14:17.280 Let's start with the EU. You know, it's an ongoing 0:14:17.400 --> 0:14:21.640 and developing issue for Apple operating in the EU market 0:14:21.680 --> 0:14:23.920 in the context of the Digital Markets Act. What is 0:14:23.960 --> 0:14:25.880 the latest and how does it change things? 0:14:27.320 --> 0:14:29.840 Yeah, the U situation had a lot of news over 0:14:29.880 --> 0:14:32.480 the past few days. Let me take you back to Friday. 0:14:32.920 --> 0:14:36.240 So a couple of weeks ago WWDC Apple introduced Apple 0:14:36.400 --> 0:14:39.800 Intelligence that's its new AI system for the iPhone, iPad 0:14:39.920 --> 0:14:42.840 Mac that also introduced a couple sort of heart new 0:14:42.880 --> 0:14:45.800 features for the iPhone and iPad. One is called iPhone 0:14:45.840 --> 0:14:48.640 Mirring that allows you to use your iPhone via your 0:14:48.680 --> 0:14:51.240 Mac via the new Sequoya update coming in the fall. 0:14:51.800 --> 0:14:54.160 The other one is called SharePlay screen sharing, where you 0:14:54.200 --> 0:14:57.640 can essentially screenshare from one iPad to another and control 0:14:57.680 --> 0:14:59.440 the other iPad. Let's say you want to help your 0:14:59.480 --> 0:15:03.560 parents with technical support. Those three features, according to Apple, 0:15:03.880 --> 0:15:07.360 won't be coming to customers in the twenty seven countries 0:15:07.360 --> 0:15:10.080 that make up the EU later this year because of 0:15:10.120 --> 0:15:14.640 the Digital Markets Act and the interoperability requirements, which means 0:15:14.680 --> 0:15:18.040 that Apple may have to lower the privacy of those 0:15:18.120 --> 0:15:22.120 features in order to make them interoperable for third party 0:15:22.240 --> 0:15:26.320 developers and meet some of the EU guidelines. This morning, 0:15:26.440 --> 0:15:31.400 the European Union announced charges against Apple related to its 0:15:31.400 --> 0:15:34.640 compliance or according to them, lack of compliance with the 0:15:34.680 --> 0:15:39.840 Digital Markets Act relating to steering users to be able 0:15:39.880 --> 0:15:43.520 to complete app payments outside of the Apple payment system. 0:15:43.880 --> 0:15:47.000 Long story short, the EU wants Apple to lower the 0:15:47.000 --> 0:15:50.520 commission significantly, which it did. It broke up the commissions 0:15:50.560 --> 0:15:55.880 between a technology fee and a revenue share fee, and 0:15:55.960 --> 0:15:58.960 then at the same time, Apple is still trying to 0:15:58.960 --> 0:16:02.880 collect that revenue from apps that are sideloaded and not 0:16:03.000 --> 0:16:04.800 bought through the app store, and so the your Opean 0:16:04.880 --> 0:16:05.760 union doesn't love that. 0:16:07.360 --> 0:16:09.640 Let's quickly get to the Vision pro use in China, 0:16:09.720 --> 0:16:13.080 so Ali, Barber and JD you know, big name compatible apps. 0:16:13.400 --> 0:16:16.040 But it's an important launch market as well. What's the latest. 0:16:17.280 --> 0:16:19.880 It's an important launch. The Vision Pro goes on sale 0:16:20.440 --> 0:16:23.960 in China, Hong Kong, Singapore at the end of this week. 0:16:24.560 --> 0:16:27.480 I don't really think it matters if Ali Baba or 0:16:27.560 --> 0:16:31.480 other applications locally are on there and not certainly it helps, 0:16:32.320 --> 0:16:34.200 but the real story with the Vision Pro is that 0:16:34.280 --> 0:16:36.840 sales are not going to take off until the company 0:16:36.880 --> 0:16:40.040 is able to make a version that's about half the price. 0:16:40.360 --> 0:16:43.400 I reported over the weekend that Apple is still planning 0:16:43.440 --> 0:16:45.880 to release a cheaper model as early as the end 0:16:45.920 --> 0:16:48.440 of next year, but they're struggling on how to cost 0:16:48.440 --> 0:16:51.200 reduce it given how expensive the components are in the 0:16:51.240 --> 0:16:55.200 Vision Pro, and if they really start reducing functionality, you're 0:16:55.240 --> 0:16:58.680 down to something that's on par with a competitor that's 0:16:58.680 --> 0:17:01.840 still a third of the price in Meta. So Apple 0:17:01.960 --> 0:17:03.280 is a long way to go on the vision pro 0:17:03.400 --> 0:17:04.800 to make it a success. 0:17:05.840 --> 0:17:08.720 Check out Mark's latest power on from over the weekend, Bluebos, 0:17:08.720 --> 0:17:11.440 Mark Gumman, thank you. There is more with Apple which 0:17:11.440 --> 0:17:14.560 will be withholding a raft in new technologies from hundreds 0:17:14.560 --> 0:17:17.920 of millions of consumers in the EU, citing concerns posed 0:17:17.920 --> 0:17:18.760 by the blocks. 0:17:18.480 --> 0:17:20.960 Regulatory tepts to rain in big tech. 0:17:21.160 --> 0:17:23.800 At the same time, reports over the weekend that Apple 0:17:24.359 --> 0:17:26.639 is open minded about its partners here. 0:17:26.520 --> 0:17:27.800 In the US on AI. 0:17:28.080 --> 0:17:31.120 Bloomberg Intelligence senior analyst and Irana joins me on set 0:17:31.160 --> 0:17:31.879 in San Francisco. 0:17:31.920 --> 0:17:33.119 It's great to have you in town. 0:17:33.640 --> 0:17:35.720 I want to get to this AI reports from the 0:17:35.720 --> 0:17:40.240 Wall Street Journal. And in short, it's that Apple would 0:17:40.600 --> 0:17:44.040 look at metas underlying technology and Google's underlying technology. 0:17:44.080 --> 0:17:46.520 We already know about open AI. What do you make 0:17:46.560 --> 0:17:46.760 of that? 0:17:47.119 --> 0:17:47.199 Now? 0:17:47.280 --> 0:17:49.119 I really like it because one of the things is 0:17:49.160 --> 0:17:52.240 they have been criticized for choosing a particular vendor and 0:17:52.280 --> 0:17:55.200 not you know, you could say, give users a choice, 0:17:55.200 --> 0:17:57.520 and that's getting them in some regulatory trouble. 0:17:57.760 --> 0:17:59.240 Now, you know, if you were to give me a 0:17:59.320 --> 0:18:01.639 choice for Becauzar in search there's. 0:18:01.480 --> 0:18:03.520 A high likelihood I'm going to go with Google, and 0:18:03.560 --> 0:18:05.280 you know you're going to have the same If you 0:18:05.359 --> 0:18:08.680 give users the choice whether it's Open Ai, Meta or Google, 0:18:09.200 --> 0:18:12.000 the users will define, you know, where they want to go. 0:18:12.280 --> 0:18:14.320 And I think that that kind of protects Apple in 0:18:14.359 --> 0:18:16.920 my view, from a regulatory point of view, and not 0:18:16.960 --> 0:18:19.280 only that, in the case of Google, for example, it's 0:18:19.320 --> 0:18:21.240 been criticized for a lot of money that's coming from 0:18:21.280 --> 0:18:24.200 Google do to Apple. I think, you know, there's ways 0:18:24.240 --> 0:18:25.960 you can redo that deal. 0:18:26.480 --> 0:18:30.199 The regulatory compliance observation is really interesting. You know, they 0:18:30.200 --> 0:18:32.359 probably don't want to make any more trouble for themselves, 0:18:32.680 --> 0:18:34.840 but we've just outlined some of the difficulty they're having, 0:18:34.880 --> 0:18:37.720 particularly in Europe. You know, whether it's app store related 0:18:37.800 --> 0:18:40.880 or it's policy related. And I ask you this probably 0:18:40.920 --> 0:18:42.560 every three months, and I have done for a few 0:18:42.640 --> 0:18:46.879 years now. I still don't know whether that anxiety regulatory 0:18:46.960 --> 0:18:49.840 risk is reflected in the stock or whether investors really 0:18:50.200 --> 0:18:51.280 have concerns about that. 0:18:51.600 --> 0:18:54.920 See, we have a concern about it because frankly, from 0:18:54.920 --> 0:18:56.560 a free cast flow point of view, that's a big 0:18:56.560 --> 0:18:59.040 payment that goes from Google to Apple and has a 0:18:59.119 --> 0:19:02.440 very high margin to but you know, Apple's always been 0:19:02.440 --> 0:19:05.560 a closed ecosystem ever since we have known the operating system, 0:19:05.880 --> 0:19:08.719 which is why they argue that it's a better operating system, 0:19:08.760 --> 0:19:11.359 it has less attacks, et cetera. Now, if they're going 0:19:11.400 --> 0:19:13.479 to open it up, the question is whether you're going 0:19:13.520 --> 0:19:15.199 to get the same level of safety or not. And 0:19:15.240 --> 0:19:18.080 that's the argument they're making. But the regulators are saying 0:19:18.119 --> 0:19:20.159 you're making too much money on the app store fee. 0:19:20.359 --> 0:19:23.480 I think there is truth of both sides. The question 0:19:23.640 --> 0:19:26.159 is how how low the feest can get. In one 0:19:26.160 --> 0:19:28.800 of the conference calls, the CFO said that EU accounts 0:19:28.800 --> 0:19:31.520 for only seven percent of the app store sales. That 0:19:31.600 --> 0:19:35.240 was the first time we got that information. So frankly speaking, financially, 0:19:35.280 --> 0:19:37.639 it's not going to ding them, but only if that 0:19:37.720 --> 0:19:39.800 kind of ruling comes to the US and China, it's 0:19:39.800 --> 0:19:40.199 going to be a. 0:19:40.160 --> 0:19:42.960 Bigger Rasuo BLOEMBG intelligence and listener. Right, Rona, thank you 0:19:43.040 --> 0:19:53.840 so much time for talking tech. And first off, a 0:19:53.880 --> 0:19:57.280 blockbuster hit for ten cents, It's Dungeon and Fight, a 0:19:57.400 --> 0:20:00.440 mobile game brought in two hundred and seventy million in 0:20:00.600 --> 0:20:04.640 just thirty days, taking the top spot in downloads and revenue. 0:20:05.000 --> 0:20:05.639 In China. 0:20:06.000 --> 0:20:09.600 The performance of the game exceeded analyst expectations and mark 0:20:09.680 --> 0:20:12.800 the biggest debut of the year for ten Cent to date. Plus, 0:20:12.880 --> 0:20:15.760 Amazon and f One will debut a new AI feature 0:20:16.119 --> 0:20:18.840 to keep viewers watching, set to be rolled out during 0:20:18.880 --> 0:20:22.280 the Spanish Grand Prix. The new feature, dubbed the stat Bot, 0:20:22.640 --> 0:20:26.639 aims to provide context and trivia during broadcasts by passing 0:20:26.720 --> 0:20:29.800 through race archives and real time racing data. The new 0:20:29.840 --> 0:20:32.760 tech will be rolled out live during this Sunday's race 0:20:33.080 --> 0:20:36.400 in Barcelona, and Mitsubishi Heavy Industry says they're nearly done 0:20:36.480 --> 0:20:39.960 designing a next gen nuclear reactor as Japan ready to 0:20:40.040 --> 0:20:43.720 shift to develop more atomic power. Bloomberg spoke with Mitsubishi's 0:20:43.760 --> 0:20:46.119 president Friday. Here's what he had to say about a 0:20:46.200 --> 0:20:47.000 nuclear future. 0:20:49.320 --> 0:20:52.800 I believe that gas turbines will grow going forward, and 0:20:52.920 --> 0:20:56.920 it will be combined with carbon capture, hydrogen combustion and 0:20:57.080 --> 0:21:01.760 so on. Nuclear power is also valuable power source in 0:21:01.840 --> 0:21:05.040 the context of carbon neutrality, so I think it'll be 0:21:05.160 --> 0:21:07.440 necessary to a certain extent as well. 0:21:18.320 --> 0:21:21.800 Welcome back to Bloomberg Technology, Ed Lovelow in San Francisco. 0:21:21.840 --> 0:21:23.199 I want to check in on the markets, but I'm 0:21:23.240 --> 0:21:26.719 kind of micro focused on what's happening with bitcoin. Actually, 0:21:27.119 --> 0:21:29.600 remember that this is an asset that trades twenty four 0:21:29.640 --> 0:21:32.600