WEBVTT - Artificial Intelligence Valuations and Previewing Black Friday 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.360 --> 0:00:30.800 This is Daniel Ives of Webb Bush. First of all, 0:00:31.120 --> 0:00:33.879 rocket It out of Las Vegas with Aston Martin. For 0:00:33.920 --> 0:00:36.720 those of you in radio, he's got the real jacket on, 0:00:36.880 --> 0:00:39.559 like the kind net Lance Alonzo. We're in all that. 0:00:39.720 --> 0:00:43.000 What in Formula one with all the excitement Apple taking 0:00:43.080 --> 0:00:46.920 over the broadcast, Cadillac coming in next year. When you're 0:00:47.000 --> 0:00:50.720 in the pit like you were, What's what's the thing 0:00:50.840 --> 0:00:52.880 that you don't know when you watch on TV? 0:00:53.400 --> 0:00:55.240 I think, I mean my experience at that point. 0:00:55.280 --> 0:00:57.680 I think the thing that people realizes not just how 0:00:57.720 --> 0:01:00.440 loud it is, but especially when you're in and you 0:01:00.520 --> 0:01:03.600 actually have like the headphones on and you hear them 0:01:03.640 --> 0:01:07.119 talking to the drivers. Just a complexity. I mean, that's 0:01:07.120 --> 0:01:09.080 the thing. It's like, it's it's really amazing. 0:01:09.280 --> 0:01:10.319 Did you change a tire? 0:01:11.120 --> 0:01:14.160 I did, but I will tell you at at indy 0:01:14.280 --> 0:01:18.120 five hundred I came close to almost change the entire. 0:01:18.120 --> 0:01:23.119 Okay, to secure liberty media, you can own Formula one 0:01:23.319 --> 0:01:26.320 fw O. NK is the ticker for Liberty Media. You 0:01:26.360 --> 0:01:27.400 can own it as a publican. 0:01:27.600 --> 0:01:30.319 Why is Apple doing that? Explaining just go to Jesse 0:01:30.440 --> 0:01:33.200 Paul's dying to get to Nvidia and you know the 0:01:33.400 --> 0:01:37.800 Google thing and all that. Why is Apple doing Apple TV? 0:01:37.959 --> 0:01:40.319 It's called dad TV because no one watches it. They 0:01:40.400 --> 0:01:43.920 got some product out, they've had some successes, but why 0:01:43.959 --> 0:01:45.160 waste their time on that? 0:01:45.440 --> 0:01:45.600 Yeah? 0:01:45.600 --> 0:01:48.920 I mean to me, it's really it's all about where 0:01:49.240 --> 0:01:51.880 they're ultimately going to take this. I mean in the future. 0:01:52.520 --> 0:01:55.200 And we'll see as Apple ultimately goes down the past 0:01:55.240 --> 0:01:58.160 with Gemini, and in terms of the AI future, they 0:01:58.200 --> 0:02:01.360 need to have as wide of a con ten lenses possible. 0:02:01.520 --> 0:02:04.120 And I think when you look at Apple TV, it's 0:02:04.160 --> 0:02:08.320 all part of Look, the quality speaks for itself. Quantity 0:02:08.360 --> 0:02:10.520 has been the issue, but for them, it's just they're 0:02:10.520 --> 0:02:11.400 going to continue to. 0:02:11.280 --> 0:02:13.160 Have irons in the fire. That's what they're going to do. 0:02:13.320 --> 0:02:16.360 The TV show Pluribus, it's a sci fi thing. She's 0:02:16.400 --> 0:02:18.680 home all alone. Everybody around her is like a droid. 0:02:19.160 --> 0:02:21.880 She's watching surveillance. It was great, why don't you get 0:02:21.880 --> 0:02:22.920 to a video right example? 0:02:23.360 --> 0:02:25.400 So Dan, the AI story here took a little bit 0:02:25.400 --> 0:02:27.359 of return over the last a couple of days. Here 0:02:27.639 --> 0:02:32.240 Meta placing a big chip order with Google, further calling 0:02:32.320 --> 0:02:35.919 to question the position or the dominance position of Nvidiot. 0:02:35.960 --> 0:02:37.840 Give us your thoughts about that on I mean, look. 0:02:38.080 --> 0:02:42.280 Google TPU if especially with with Broadcomm and TSMC is 0:02:42.320 --> 0:02:45.919 the is the builder that's been around for over a decade, right, 0:02:45.960 --> 0:02:48.960 So it's not that it's new per se. I think 0:02:49.040 --> 0:02:51.960 the issue comes down to demand the spy from video 0:02:52.040 --> 0:02:53.040 chips to twelve to one. 0:02:53.560 --> 0:02:56.480 So the reality is the supply of Nvidio chips twelve 0:02:56.520 --> 0:02:57.000 to one watch. 0:02:57.040 --> 0:02:59.440 So look, when you look at Meta like they're not 0:02:59.520 --> 0:03:02.640 going to be able to get everything they need from 0:03:02.639 --> 0:03:05.760 in video, so they got to look outside. When you 0:03:05.760 --> 0:03:09.360 look with googleized, I'd say it's really it's probut three 0:03:09.400 --> 0:03:12.880 to four years behind where Nvidio is. But again on 0:03:13.240 --> 0:03:17.079 some certain instances it could be good enough. And look 0:03:17.240 --> 0:03:19.440 that's where we're going. I mean, the reality is when 0:03:19.480 --> 0:03:21.720 it comes to AMD, when it comes to big tech, 0:03:22.000 --> 0:03:24.079 eventually you need to see Apple, you know, to see Meta, 0:03:24.440 --> 0:03:26.440 you can to see Microsoft. They'll build their own chips 0:03:26.480 --> 0:03:28.440 as well, but there's one chip in the world fuel 0:03:28.440 --> 0:03:30.120 in the AI revolution that's in video. 0:03:30.720 --> 0:03:32.359 So that's kind of how I thought about yesday. I 0:03:32.360 --> 0:03:34.040 was kind of surprised to see the cell off in 0:03:34.160 --> 0:03:36.880 video because my thought was all I hear from guys 0:03:36.960 --> 0:03:39.320 like you and technology folks coming in here is that 0:03:39.360 --> 0:03:42.640 the demand for AI is just I'm not saying satial, 0:03:42.720 --> 0:03:45.600 but boy, it's outstripping supply for sure, and you got 0:03:45.600 --> 0:03:47.480 to get what you can get when you can get it. 0:03:47.520 --> 0:03:51.440 Look, just spending three weeks in Asia, I mean, we've 0:03:51.480 --> 0:03:55.440 seen demand accelerate thirty percent in the last six months 0:03:55.440 --> 0:03:58.080 for AI. So it comes down to like it's easy 0:03:58.160 --> 0:04:02.240 to call say AIS bubble in the spreadsheet and twenty 0:04:02.200 --> 0:04:04.280 fifty four of New York City office building, but when 0:04:04.320 --> 0:04:07.960 you actually see what's happening there. Look, only three percent 0:04:07.960 --> 0:04:10.360 of enterprise in the US have gone down the AI path, 0:04:10.800 --> 0:04:14.960 none in Europe, ajax, China, and now you've seen sovereigns 0:04:14.960 --> 0:04:16.880 in Middle East, and for the first time in thirty years, 0:04:16.880 --> 0:04:17.920 the US has headed China. 0:04:17.960 --> 0:04:18.960 When it comes tack. 0:04:19.080 --> 0:04:22.080 Your piniata on Wall Street, people love to go after 0:04:22.080 --> 0:04:24.680 you on Twitter. It's the close. It's the act and 0:04:24.760 --> 0:04:27.640 all that underneath it. We know, folks, not only Dan Eyes, 0:04:27.680 --> 0:04:31.640 but webbush, there's some prodigious tech chips, like going to Asia, 0:04:31.800 --> 0:04:35.160 like actually walking in a factory, find out what's going on. 0:04:35.520 --> 0:04:40.960 Here's the reality for our listeners, our viewers worldwide. April three, 0:04:41.720 --> 0:04:46.080 a leading newspaper just reporting the news. Apple Shell's shares 0:04:46.120 --> 0:04:49.279 fell more than nine percent in response to the President's 0:04:49.320 --> 0:04:53.880 plan for steep tariffs on products made a broad let 0:04:53.960 --> 0:04:56.920 as sharp set off in tech stocks, which is loaded 0:04:56.960 --> 0:05:02.000 with technology. OMG April thirds sink near six percent. Apple 0:05:02.200 --> 0:05:07.120 is up sixty five percent, printing two to eighty yesterday. 0:05:07.640 --> 0:05:12.479 How do our listeners in viewers digest the news and 0:05:12.520 --> 0:05:15.960 the day to day panic and yet stay on board 0:05:16.200 --> 0:05:18.120 this historic American path. 0:05:18.279 --> 0:05:20.640 Look, and we've talked about so much on the show. 0:05:20.440 --> 0:05:22.960 Over the years, right, I mean, the reality is is 0:05:23.000 --> 0:05:26.560 that there's no bigger consumer install based in the world 0:05:26.600 --> 0:05:29.760 than Apple two point four billion iOS devices, one point 0:05:29.800 --> 0:05:32.440 five billion iPhones. And it comes down besides just the 0:05:32.520 --> 0:05:36.440 cash generating machine, everything we see in services. When you 0:05:36.440 --> 0:05:39.360 look at the AI revolution, Okay, they've looked, they've watched 0:05:39.400 --> 0:05:42.440 it from the stands so far, but now they're about 0:05:42.480 --> 0:05:45.000 to get into the field and actually do it and 0:05:45.080 --> 0:05:49.040 monetize the install based the consumer AI revolution comes to Apple, 0:05:49.720 --> 0:05:51.360 and I think that's something that we're going to see 0:05:51.400 --> 0:05:54.239 with Google partnership and others and Tom I just continue 0:05:54.320 --> 0:05:57.479 view it as like seventy five to one hundred hours 0:05:57.520 --> 0:06:00.320 per share incremental will be. 0:06:00.320 --> 0:06:02.719 Added to Apple for AI And. 0:06:02.560 --> 0:06:04.839 That's my view, Dave David and also look at this 0:06:04.880 --> 0:06:07.560 iPhone seventeen. It's been a surprise upgrade cycle that no 0:06:07.640 --> 0:06:10.600 one expected with Gemini. 0:06:11.279 --> 0:06:14.919 Is Apple under less pressure to do something this whole 0:06:15.200 --> 0:06:16.479 do something, do something? 0:06:16.720 --> 0:06:20.080 I'd say more pressure, but they couldn't do it till 0:06:20.200 --> 0:06:24.839 Google ultimately won the dojsuit. Once they won the dojsuit, 0:06:24.920 --> 0:06:27.240 that's where the candle ideenter between sun Dar and the 0:06:27.360 --> 0:06:31.640 cook start. And I think that's that ultimately is now 0:06:31.720 --> 0:06:35.880 where that's tracking to what can be a deal that 0:06:36.000 --> 0:06:38.880 couldn't have been until they won that deal. And I 0:06:38.880 --> 0:06:41.800 think that's where they're going to go. They're not buying purplexity, 0:06:42.120 --> 0:06:44.479 They're going with Google. They're going to go down bet 0:06:44.560 --> 0:06:45.240 heavily on them. 0:06:45.400 --> 0:06:47.520 Then I was with Wedbush with us here on Wednesday 0:06:47.560 --> 0:06:50.680 before Thanksgiving, is you get ready to travel, the Horde 0:06:50.760 --> 0:06:53.480 comes over to the house. We say good morning all 0:06:53.520 --> 0:06:55.720 the different ways you listen to us. Thank you for 0:06:55.839 --> 0:07:00.640 discovering Bloomberg's surveillance in two thousand and twenty. Will be 0:07:00.640 --> 0:07:04.760 your Friday, Paul Sweeney, your people. It was a big arguments. 0:07:04.960 --> 0:07:07.479 People went back and forth. Yes, yeah, it will be 0:07:07.520 --> 0:07:10.360 your Friday after Thanksgiving, Paul, and talk. 0:07:10.200 --> 0:07:11.800 To us about Meta a little bit. I think that's 0:07:11.840 --> 0:07:14.000 one of the ones the market is unsure of as 0:07:14.000 --> 0:07:17.200 it relates to the AI play there. Stocks down about 0:07:17.200 --> 0:07:20.120 twenty percent from its recent high, so some concerns there. 0:07:20.160 --> 0:07:21.160 How do you position that? 0:07:21.400 --> 0:07:25.720 I think, I mean it's a table pounder by because 0:07:25.760 --> 0:07:28.360 the reason that stocks off is because Zuk right now 0:07:28.400 --> 0:07:33.000 wartime CEO, focus on increasing cap backs over the next 0:07:33.080 --> 0:07:36.160 year in his arms race, and you're and you're seeing 0:07:36.240 --> 0:07:39.400 obviously pressure in terms of earnings and cashle but that's 0:07:39.800 --> 0:07:41.840 that's what you want to see them do. You were 0:07:41.880 --> 0:07:45.280 talking about monetizing the AI revolution over the coming years, 0:07:45.320 --> 0:07:48.720 the three billion users that they basically have when it 0:07:48.760 --> 0:07:51.480 comes to their consumer ecosism, and that's the smart move 0:07:51.920 --> 0:07:55.440 I think right now, investors, it's very easy knee jerk 0:07:55.680 --> 0:07:58.560 with the bury, the AI bubble, all the worries. 0:07:58.880 --> 0:07:59.840 The reality is. 0:07:59.760 --> 0:08:02.080 That there's two more years and weise left in this 0:08:02.200 --> 0:08:04.720 tech ball market. You're in year three of an eight 0:08:04.760 --> 0:08:06.480 to ten year build and it is truly a fourth 0:08:06.520 --> 0:08:08.840 in dustrial revolution. I think Meta is going to be 0:08:08.880 --> 0:08:12.280 proven that this is the right move what they're doing in. 0:08:12.200 --> 0:08:16.480 The ZEITGEISTI this weekend is the partition that yes, we 0:08:16.560 --> 0:08:21.120 appear to be using AI for search stuff In Paul 0:08:21.200 --> 0:08:23.040 Sweeney the other day goes, should I go with the 0:08:23.080 --> 0:08:26.520 ocean space cranberry or something homemade, you know that kind 0:08:26.520 --> 0:08:30.800 of stuff, or like task driven AI? When do you 0:08:30.920 --> 0:08:36.040 perceive America makes the shift to a more sophisticated use 0:08:36.240 --> 0:08:36.720 of AI. 0:08:36.840 --> 0:08:39.240 Yeah, it's a great qub. But today it's enterprise. 0:08:39.400 --> 0:08:42.680 I mean, the reality is the consumer AI revolution hasn't started. 0:08:43.040 --> 0:08:46.320 Chat GPTAM, we see that, but it's all enterprise. I mean, 0:08:46.640 --> 0:08:50.040 this spending we're talking about called next two to three trillion, 0:08:50.040 --> 0:08:53.120 it's just the enterprise. When it talks about consumer, it's 0:08:53.120 --> 0:08:56.200 our autonomous humanoid robotics. 0:08:56.559 --> 0:08:58.800 It's the future, the consum. 0:08:59.280 --> 0:09:03.120 Goddamn robot to make my cranberry Sauce Switten, you're what's 0:09:03.160 --> 0:09:06.720 happening again? And I continue to meet the call. Keen 0:09:06.880 --> 0:09:11.920 will be in a rubotaxi in your the other day 0:09:11.720 --> 0:09:15.680 that I thought Ludlow and again you never know, it 0:09:15.720 --> 0:09:16.480 could be Ludlow. 0:09:16.840 --> 0:09:18.840 So all right, let's go to that robotics and all 0:09:18.840 --> 0:09:20.480 that kind of stuff, because that's kind of the story 0:09:20.520 --> 0:09:24.200 behind teslaly these days it's not about bending steel and 0:09:24.200 --> 0:09:27.240 making cars and things like that. So the stocks up 0:09:27.280 --> 0:09:29.920 four percent year today, so it's really lagging the market. 0:09:30.480 --> 0:09:34.160 It's come back from I guess the biggest concerns where 0:09:34.160 --> 0:09:36.719 we were several months ago. But when you talk to 0:09:36.720 --> 0:09:38.560 your institutions, our clients, what are they telling you. 0:09:38.760 --> 0:09:42.400 I mean, it's it's all about the future. I believe 0:09:42.440 --> 0:09:46.480 autonomous and ultimately optimists about will be the most important 0:09:46.559 --> 0:09:49.960 chapter ever in Tesla's growth story. And I think now 0:09:50.400 --> 0:09:53.960 must being wartime CEO have in the compackage, you know, 0:09:54.000 --> 0:09:59.120 potentially trillion dollar men. This will now define Tesla. And 0:09:59.160 --> 0:10:01.600 I also think you're gonn see a regulatory road map 0:10:01.640 --> 0:10:05.640 that's going to ease when it comes to autonomous, specifically 0:10:05.679 --> 0:10:08.200 on the robotaxi build out. You're gonna have thirty thirty 0:10:08.200 --> 0:10:11.000 five cities, and I think WIMA is basically going to 0:10:11.040 --> 0:10:13.440 be around the are a relative to where I see Tesla. 0:10:13.840 --> 0:10:16.280 Let's go to our three radio stations. Good Morning ninety 0:10:16.320 --> 0:10:19.200 two nine FM, Boston ninety nine one FM, Nathan Hager 0:10:19.559 --> 0:10:23.000 Radio in Washington, here Bloomberg eleven three zero. How is 0:10:23.040 --> 0:10:27.640 a robotaxi get across the Charles River right by MI 0:10:27.880 --> 0:10:31.000 T How does a robot get turn left there and support? 0:10:31.520 --> 0:10:35.360 How does a robotaxi get around DuPont Circle? How does 0:10:35.360 --> 0:10:40.400 a robotaxi get down Fifth Avenue right outside the Trump Tower? 0:10:40.520 --> 0:10:41.280 I don't get it. 0:10:41.640 --> 0:10:44.320 Look, I mean, do you look at it? It's data driven. 0:10:44.360 --> 0:10:46.800 I mean the reality is is that is. 0:10:46.760 --> 0:10:52.920 Your proof of concept that they can handle normal urban traffic. 0:10:53.360 --> 0:10:56.600 What everything I've seen, and obviously we've been there in Austin, 0:10:57.080 --> 0:10:59.040 You're going to continue to see to expand you know, 0:10:59.400 --> 0:11:02.720 across you know, many cities over the next few months. 0:11:03.120 --> 0:11:05.000 I believe we're there now. 0:11:05.000 --> 0:11:07.400 I'm not saying that there's you're gonna see the GEO 0:11:07.440 --> 0:11:12.000 offense area continued expand, but it's my view next few years, 0:11:12.480 --> 0:11:15.640 twenty percent of cars on the road when you're whether 0:11:15.679 --> 0:11:18.280 it's New York City, whether it's Boston, whether scot you're 0:11:18.280 --> 0:11:20.640 gonna look around and you're gonna and you're not gonna 0:11:20.679 --> 0:11:21.360 see a driver. 0:11:21.360 --> 0:11:23.719 Enough check what's your single best buy right now? Is 0:11:23.760 --> 0:11:25.240 it matter or is something different? 0:11:25.360 --> 0:11:27.400 I mean to me single best buy writ or is 0:11:27.480 --> 0:11:29.959 Microsoft the relative to what we see in terms of 0:11:29.960 --> 0:11:30.280 the stock. 0:11:30.440 --> 0:11:33.920 I sit down because the view that. 0:11:34.320 --> 0:11:38.160 Now Google, now Amazon and others on the hyperscale are 0:11:38.160 --> 0:11:40.400 going to sort of eat their lunch. Gook, what's happening 0:11:40.480 --> 0:11:43.480 Oracle as well? It just look New York City cab 0:11:43.600 --> 0:11:47.880 driver was bearish on Alphabet Google start the year. Today 0:11:48.240 --> 0:11:50.920 they're barish on Microsoft. And I think that's why that 0:11:50.960 --> 0:11:52.160 has one hundred hour upside. 0:11:52.600 --> 0:11:59.440 Okay on Microsoft just is one example. Are they open Ai? 0:11:59.640 --> 0:12:01.199 Sam what's his name, Sam Altman? 0:12:01.320 --> 0:12:01.720 Sam Almon? 0:12:02.480 --> 0:12:05.440 Are they down because they're affiliated with Sam Altman? 0:12:05.840 --> 0:12:09.320 I think, just like just like Oracle, there's that too 0:12:09.360 --> 0:12:13.160 big to fail concept right where anyone that touches open 0:12:13.200 --> 0:12:16.959 AI that's ultimately been an overhang. But it comes down 0:12:17.080 --> 0:12:19.960 to like that would be like me being like, okay, 0:12:20.040 --> 0:12:22.920 if I could have more Peter luger Steak, would I 0:12:23.040 --> 0:12:23.480 have it? 0:12:23.720 --> 0:12:25.400 Or would I rather own white Castle. 0:12:25.520 --> 0:12:28.240 Actually at Bush you gotta be going pay. 0:12:28.200 --> 0:12:30.719 Yeah again, you gotta go Lugers. But the reality is 0:12:30.760 --> 0:12:34.199 that open AI. It's the Peter Lugers of technology. 0:12:34.280 --> 0:12:37.160 You want to be associated with it, not not associated 0:12:37.240 --> 0:12:38.160 those are you on YouTube? 0:12:38.200 --> 0:12:40.440 The interns are in her ears. We got these holiday 0:12:40.480 --> 0:12:43.280 interns and Sweeney's intern It's from Penn State. 0:12:43.320 --> 0:12:45.720 I'm shocked we are. Nobody cares we are. 0:12:45.880 --> 0:12:48.200 Paul Damn Penn State. Go Paul. 0:12:48.679 --> 0:12:49.600 Who's going to be the coach? 0:12:49.679 --> 0:12:50.480 Do you think? I mean? 0:12:50.520 --> 0:12:53.439 Look, I think we'll see it probably Monday. Oh okay, 0:12:53.920 --> 0:12:54.720 that was actual. 0:12:55.679 --> 0:12:58.280 I continue to think it's you know, it's either Chesney 0:12:58.320 --> 0:13:02.760 from JMU did that you know? Or there could be 0:13:02.800 --> 0:13:05.839 a mystery candidate that will see how that emerged over 0:13:05.880 --> 0:13:06.760 the coming days. 0:13:07.120 --> 0:13:10.199 So I think a mystery candle. 0:13:11.880 --> 0:13:17.000 Not no, not no, please, and we better days are 0:13:17.040 --> 0:13:19.040 ahead for Pensate after a dark year. 0:13:19.120 --> 0:13:22.439 Okay, all I asked, you're such a hitter and you're 0:13:22.480 --> 0:13:24.600 so f one. Next time you go to F one, 0:13:25.080 --> 0:13:29.960 take young John Farroll with you, like playing. 0:13:31.320 --> 0:13:34.600 The reason I got into F one it was Netflix 0:13:34.920 --> 0:13:36.280 and Farah. 0:13:36.000 --> 0:13:40.559 Yeah yeah, yeah, I mean he he's like head to 0:13:40.559 --> 0:13:41.320 Toad Ferrari. 0:13:41.520 --> 0:13:43.640 Sure, I mean you know, I mean, you know that's 0:13:43.679 --> 0:13:44.320 how you roll. 0:13:44.320 --> 0:13:47.240 The whole Thing's where's your next f one you're going to? 0:13:47.520 --> 0:13:50.720 I mean I have a few, but uh a few 0:13:50.800 --> 0:13:52.720 on the docket, you know, Mid Middle. 0:13:52.559 --> 0:13:54.480 East and and some other ones. 0:13:55.160 --> 0:13:57.720 Dan, I thank you to extended a conversation, a lot 0:13:57.720 --> 0:14:00.800 of good information there with his single best by the 0:14:00.880 --> 0:14:05.880 gentleman from Microsoft. Stay with us. More from Bloomberg Surveillance 0:14:05.920 --> 0:14:07.280 coming up after this. 0:14:14.520 --> 0:14:18.080 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:18.160 --> 0:14:21.360 weekday afternoons from seven to ten am Eastern. Listen on 0:14:21.400 --> 0:14:25.080 Applecarplay and Android Auto with the Bloomberg Business app, or 0:14:25.200 --> 0:14:26.680 watch us live on YouTube. 0:14:26.720 --> 0:14:29.960 We got people out there, really in the trenches about 0:14:30.040 --> 0:14:34.320 thinking of the future of retail. Tiffany joins us right 0:14:34.360 --> 0:14:39.120 now out of pen out of Northwestern their fabulous NBA program. 0:14:39.520 --> 0:14:43.200 She's a Boston consulting group and most she's like not 0:14:43.320 --> 0:14:47.000 every day, but every third day at Highland Park in Dallas. Yeah, 0:14:47.000 --> 0:14:49.520 I mean that's the way she will. Tiffany, thank you 0:14:49.560 --> 0:14:53.920 for joining Surveillance this morning. Let's start. There is Luxury fixed, 0:14:54.160 --> 0:14:57.760 I mean, there's this China. OMG, China is terrible, but 0:14:57.840 --> 0:15:01.400 America is doing great double digit growth. Where does luxury 0:15:01.480 --> 0:15:03.120 fit in for the holiday season? 0:15:04.640 --> 0:15:08.160 Sure, luxury is one of those categories where based on 0:15:08.200 --> 0:15:11.400 our recent survey, we are planning on seeing some recovery 0:15:11.520 --> 0:15:13.640 during the Black Friday season. It was one of the 0:15:13.640 --> 0:15:17.200 categories that when we surveyed across we saw increase and spend. 0:15:17.800 --> 0:15:19.800 Black Friday used to be one hour in front of 0:15:19.880 --> 0:15:24.480 Walmart exact thousand people and Tiffany says, it's a season helpul. 0:15:24.240 --> 0:15:27.720 Yeah, And here's something that surprised me, Tom. In store 0:15:27.760 --> 0:15:32.000 shopping is making a big comeback as fewer only shop online. 0:15:32.040 --> 0:15:34.720 Tiffy talk us about that if I had never gone 0:15:34.720 --> 0:15:35.920 to a store again, I'll be happy. 0:15:37.640 --> 0:15:40.400 Well, what we're actually seeing is that most shoppers are 0:15:40.440 --> 0:15:44.000 planning on shopping both in store and online this holiday season, 0:15:44.200 --> 0:15:45.840 and the reason that they want to go back and 0:15:45.960 --> 0:15:49.440 store is they want to touch and feel the products right, 0:15:49.480 --> 0:15:52.040 they want to be a part of experiential retail. They 0:15:52.080 --> 0:15:55.200 want personalized help as they shop. And it's really in 0:15:55.240 --> 0:15:57.320 line with what we've been seeing all year long with 0:15:57.440 --> 0:16:00.200 mall traffic continuing to come back and store per just 0:16:00.320 --> 0:16:04.080 is coming back as well as the hybrid shopping channel, 0:16:04.080 --> 0:16:05.920 if you will, becomes the norm. And I want to 0:16:05.920 --> 0:16:08.720 emphasize that point on hybrid because we are really seeing 0:16:08.760 --> 0:16:12.800 consumers grow across channels during their shopping journeys, including how 0:16:12.840 --> 0:16:13.680 they're using AI. 0:16:14.280 --> 0:16:16.280 All right, so talk to us about AI. Can AI 0:16:16.440 --> 0:16:18.720 like kind of make my shopping list for me and 0:16:18.880 --> 0:16:20.960 kind of go and buy the stuff for me. 0:16:22.400 --> 0:16:24.000 AI can definitely do both. 0:16:24.080 --> 0:16:27.840 Now that being said, I would say most consumers are 0:16:27.920 --> 0:16:32.720 still using AI more in their initial shopping research and inspiration, 0:16:33.440 --> 0:16:37.080 and we actually found that about fifty percent of consumers 0:16:37.160 --> 0:16:39.440 plan on using AI in this holiday season. 0:16:39.800 --> 0:16:41.640 I'm addicted to it. I did have to do a 0:16:41.640 --> 0:16:43.920 search gyst today. You ready dark chocolate? 0:16:44.080 --> 0:16:44.400 Okay? 0:16:44.520 --> 0:16:48.520 I know nothing about dark chocolate. I grew up with Bosco. Yes, okay, 0:16:48.920 --> 0:16:53.280 dark chocolate. I go to Perplexity, Tiffany, dark chocolate, Boom. 0:16:53.280 --> 0:16:56.880 There's like three types to buy, just like that, Okay, Tiffany. 0:16:56.920 --> 0:17:00.600 The basic BCG question and Paul brought this up yesterday. 0:17:00.920 --> 0:17:05.000 What inning are we in for the growth of online, 0:17:05.119 --> 0:17:08.199 for the growth of Amazon in Walmart. If it's a 0:17:08.200 --> 0:17:11.280 baseball game Della's, does Dallas have a baseball day in 0:17:11.320 --> 0:17:14.840 the Texas range. Oh they did, sure, Yeah, yeah, But Tiffany, 0:17:14.920 --> 0:17:19.480 what inning are we in with our online experience? 0:17:21.440 --> 0:17:21.840 I think it. 0:17:21.800 --> 0:17:23.800 Depends a little bit on what angle you're looking at 0:17:23.840 --> 0:17:26.440 it from. But if you think about where we are, 0:17:27.000 --> 0:17:29.080 I would say we're still in the middle of the game. 0:17:29.400 --> 0:17:32.720 Because you know, you mentioned perplexity, right, large language models 0:17:32.760 --> 0:17:36.320 like chat GBT, they are really changing what the potential 0:17:36.359 --> 0:17:39.560 shopping journey is and that you know, retailers have to 0:17:39.560 --> 0:17:42.159 think about what their strategy is within that it's not 0:17:42.200 --> 0:17:44.920 an all or nothing game, and so how they think 0:17:44.960 --> 0:17:47.680 about you know, showing up in AI search becomes more 0:17:47.680 --> 0:17:48.480 important than ever. 0:17:48.560 --> 0:17:51.760 Now, how are the how are the retailers dealing with 0:17:52.040 --> 0:17:56.359 UH tariffs here and passing along whatever cost increases they 0:17:56.440 --> 0:17:59.359 might be bearing. Are they taking it in their margin? 0:17:59.400 --> 0:18:02.160 Are they trying to pass along customers? How's that playing 0:18:02.160 --> 0:18:06.040 out here? Because we don't hear as much about teriffs 0:18:06.080 --> 0:18:07.640 as we did, you know, maybe the beginning of the year. 0:18:08.960 --> 0:18:12.000 Yeah, I think everyone's settled into sort of this new 0:18:12.080 --> 0:18:14.479 norm when it comes to tariffs, if you will, And 0:18:14.880 --> 0:18:17.560 it's a mixture both definitely, right, They've taken some in 0:18:17.600 --> 0:18:20.760 their margins, they have passed them along through and for. 0:18:20.680 --> 0:18:21.720 This holiday season. 0:18:21.840 --> 0:18:24.960 They know that consumers right still have expectations when it 0:18:25.000 --> 0:18:28.120 comes to discounting promotions, right, and so they're making sure 0:18:28.160 --> 0:18:30.000 that they can meet those expectations pretty quickly. 0:18:30.040 --> 0:18:32.640 Or one final question. Okay, so all of us are 0:18:32.680 --> 0:18:36.400 buying off this affirm kind of thing where it's set 0:18:36.400 --> 0:18:38.639 out in payments. I don't know what you call it, 0:18:38.680 --> 0:18:41.080 like a firm and you know all the others folks. 0:18:41.320 --> 0:18:43.560 If I go into a given store, they want all 0:18:43.600 --> 0:18:46.199 my money now or a charge card. But if I 0:18:46.240 --> 0:18:49.240 buy online, I can spread out the payments. How is it? 0:18:49.240 --> 0:18:52.240 Where do you see that dynamic in two years? 0:18:52.240 --> 0:18:56.520 In five years, sure, we've seen actually a stabilization in 0:18:56.520 --> 0:18:59.720 the buy now, pay later trend. So while there's still 0:18:59.720 --> 0:19:02.400 a consumer and still categories that that's going to play 0:19:02.400 --> 0:19:05.320 a meaningful role. I think we're seeing it balanced with 0:19:05.720 --> 0:19:07.480 those desires to go in the store that I was 0:19:07.520 --> 0:19:09.399 talking about and the benefits that you get when you 0:19:09.440 --> 0:19:10.040 go in store. 0:19:10.920 --> 0:19:14.880 Is Highland Park. I've never been Tiffany in Dallas. Highland 0:19:14.920 --> 0:19:17.920 Park is like that's sort of like where they invented 0:19:18.320 --> 0:19:20.159 one stop luxury. 0:19:19.680 --> 0:19:23.720 Right there, we do have a really lovely shopping center 0:19:23.720 --> 0:19:26.159 in Highland Park that has a lot of great luxury stores. 0:19:26.520 --> 0:19:29.720 Give us one experience. Come on, come on, not using 0:19:29.800 --> 0:19:34.119 the BCG MX, I mean, what's your favorite store? 0:19:35.640 --> 0:19:38.480 Well, I must admit my favorite store in Highland Park 0:19:38.560 --> 0:19:42.720 is actually a bakery. It's called Bakery, and I love 0:19:42.840 --> 0:19:44.520 the I love the bakers there. 0:19:44.520 --> 0:19:45.920 They make an excellent scone. 0:19:46.119 --> 0:19:48.240 Great you get to come back in the show, Michael 0:19:48.240 --> 0:19:51.520 Barr says, bring her back, Tiffany, thank you so much 0:19:51.520 --> 0:19:54.359 with BCG Dallas here to get a sense of where 0:19:54.359 --> 0:19:56.840 we are in this retail season. 0:19:56.920 --> 0:20:00.399 It's a journey, she said, Stay with us. More Fromloomberg 0:20:00.520 --> 0:20:09.600 Surveillance coming up after this. 0:20:09.600 --> 0:20:13.520 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:20:13.520 --> 0:20:16.840 starting at seven am Eastern on Applecarplay and Android Auto 0:20:16.960 --> 0:20:19.920 with the Bloomberg Business App. You can also listen live 0:20:20.000 --> 0:20:23.600 on Amazon Alexa from our flagship New York station, Just 0:20:23.640 --> 0:20:26.200 say Alexa play Bloomberg eleven thirty. 0:20:26.640 --> 0:20:30.840 For the arguments in the kitchen, out in the back porch, 0:20:31.720 --> 0:20:35.000