WEBVTT - Uber Earnings and New Call of Duty 0:00:02.200 --> 0:00:05.600 From the heart of where innovation, money and power collive 0:00:06.320 --> 0:00:10.880 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:28.159 Emily Jay. I'm Emily Chang in San Francisco, and this 0:00:28.200 --> 0:00:31.560 is Bloomberg Technology. Coming up the next hour. Uber rises 0:00:31.640 --> 0:00:35.800 after third quarter sales jumped seventy two. I'll ask CEO 0:00:35.880 --> 0:00:38.800 dark Kazra Shah he why he's saying the business is 0:00:38.840 --> 0:00:43.640 now quote stronger than ever. Plus, Elon Musk is now 0:00:43.720 --> 0:00:47.360 the Twitter complaint hotline operator that according to his Twitter 0:00:47.360 --> 0:00:49.800 bio and giving us an idea of what the subscription 0:00:49.880 --> 0:00:54.080 model for the platform will look like. And he founded 0:00:54.080 --> 0:00:56.600 one of Uber's biggest competitors and wrote the book on 0:00:56.640 --> 0:00:59.400 at Grubhub founder Mike Evans joins us to talk about 0:00:59.440 --> 0:01:03.600 his journey from then to now. For more on Uber's results, 0:01:03.680 --> 0:01:07.400 let's bring in the man himself. Uber CEO Dara Causashi. Dara, 0:01:07.520 --> 0:01:09.840 great to have you with us, as always, So let's 0:01:09.840 --> 0:01:13.039 start with the good stuff. Active writers back to pre 0:01:13.040 --> 0:01:15.560 pandemic levels. Tell us the trends that are driving this 0:01:15.640 --> 0:01:19.040 and how well you see it keeping up in a downturn. Well, 0:01:19.040 --> 0:01:21.479 the big meta trend that we're seeing now is that 0:01:21.560 --> 0:01:24.240 the U S consumer consumer in general and especially at 0:01:24.240 --> 0:01:27.720 the U S consumer is still spending, but you're seeing 0:01:27.760 --> 0:01:31.440 a shift of that spend from spend on retail goods 0:01:31.760 --> 0:01:34.640 UH during the pandemic, people who were at home, etcetera. 0:01:35.160 --> 0:01:40.640 Back to services, travel sectors incredibly strong, restaurant, hospitality sector 0:01:40.720 --> 0:01:44.199 is strong. People are going back to work, and all 0:01:44.240 --> 0:01:48.760 of that is benefiting the Uber business. Our mobility business 0:01:48.800 --> 0:01:52.080 is incredibly strong. Delivery is proving to be a really 0:01:52.120 --> 0:01:55.480 sticky habit. All of that translates into growth bookings of 0:01:55.480 --> 0:01:59.280 twenty nine billion dollars up thirty two percent on a 0:01:59.360 --> 0:02:02.080 year on your Bay assis and then of course adjusted 0:02:02.200 --> 0:02:07.400 EBA DAUM coming in super super strong UH in terms 0:02:07.440 --> 0:02:10.359 of you know, over five million and adjusted IBIDA on 0:02:10.400 --> 0:02:13.560 the quarter. And then what we indicated for next quarter 0:02:14.080 --> 0:02:16.800 is adjusted IBIDA range of six hundred to six hundred 0:02:16.800 --> 0:02:20.680 and thirty million, so even more strength ahead for US. Still, 0:02:20.800 --> 0:02:24.320 writers aren't taking as many rides as they used to. 0:02:24.639 --> 0:02:28.639 What else needs to happen before uberseas of full recovery 0:02:28.760 --> 0:02:31.400 or do you ever get back to those numbers? I 0:02:31.440 --> 0:02:33.560 think we will absolutely get back to those numbers and 0:02:33.600 --> 0:02:37.080 hopefully beyond and you're seeing signs of that, which is 0:02:37.760 --> 0:02:42.200 trips per monthly active. Pre pandemic, we're about five point 0:02:42.360 --> 0:02:47.320 seven trips per monthly active. Uh, they were stuck at 0:02:47.320 --> 0:02:50.600 about five trips per monthly active, and you've seen that 0:02:50.720 --> 0:02:53.840 come up to five point three now and it's absolutely 0:02:53.880 --> 0:02:57.080 headed in the right direction as the world opens up, 0:02:57.160 --> 0:02:59.919 as you know, again people go out to restaurants, etcetera. 0:03:00.360 --> 0:03:02.399 What we also have is a power of the platform. 0:03:02.560 --> 0:03:06.240 In that pre pandemic, we were essentially a rides only business. 0:03:06.760 --> 0:03:10.520 Now our rides and our eats business are of equal size, 0:03:11.000 --> 0:03:14.919 and essentially we are moving our riders up selling them eats, 0:03:14.960 --> 0:03:17.639 and we're up selling our eaters to grocery and then 0:03:17.760 --> 0:03:22.119 back to rides as well with the Uber one membership program, 0:03:22.160 --> 0:03:25.079 which now has launched an eight markets. So we're confident 0:03:25.120 --> 0:03:28.760 that we can drive higher frequency, higher engagement with our 0:03:28.800 --> 0:03:31.800 platform just because of the breadth of use cases that 0:03:31.840 --> 0:03:34.840 we have. Now, let's talk about delivery demand holding up. 0:03:34.880 --> 0:03:38.160 As you said, it's a very sticky habit. Profit looking 0:03:38.240 --> 0:03:41.120 really good, but we're not saying notable growth. Is this 0:03:41.240 --> 0:03:44.680 an area where you're seeing the impact of inflation set 0:03:44.680 --> 0:03:47.520 in where some customers might be saying, you know, maybe 0:03:47.520 --> 0:03:49.200 I'm going to order out one less time this week 0:03:49.280 --> 0:03:53.280 or this month, just to be more conservative. Well, we're 0:03:53.320 --> 0:03:56.440 definitely seeing the impact of comps. Remember, so last year 0:03:56.480 --> 0:03:59.360 we weren't fully opened up or recovered. So when you 0:03:59.360 --> 0:04:02.920 look at our a very growth x foreign exchange, because 0:04:02.960 --> 0:04:05.520 foreign exchange has hurt us, it's her, Google, it's her 0:04:05.640 --> 0:04:08.760 basically any global company out there. Our growth on the 0:04:08.800 --> 0:04:14.120 delivery side actually accelerated from twelve this last quarter. We 0:04:14.160 --> 0:04:16.919 think that Q four will be similar slightly higher in 0:04:17.040 --> 0:04:20.320 terms of your over your x f X growth. And 0:04:20.360 --> 0:04:24.000 what we're seeing there is that our audience of delivery 0:04:24.000 --> 0:04:27.800 continues to grow. Basket sizes are higher. Some of that 0:04:27.920 --> 0:04:31.120 is inflationaries where as well, and when we look at 0:04:31.160 --> 0:04:35.400 the frequency of ordering of users, that's stable. So users 0:04:35.480 --> 0:04:39.680 are continuing to use their delivery UH product as they 0:04:39.720 --> 0:04:43.600 have before. And really we're comping against pandemic comps, and 0:04:43.640 --> 0:04:47.840 we're also being hurt by foreign exchange. But the underlying 0:04:47.920 --> 0:04:50.320 growth of the business is healthy and we think it's 0:04:50.320 --> 0:04:52.280 going to keep healthy for some period of time. Now. 0:04:52.320 --> 0:04:55.400 I've been traveling a lot lately, and yes, my rides 0:04:55.440 --> 0:04:58.279 per month are going up, but prices are still elevated. 0:04:58.440 --> 0:05:01.000 When our prices going to fully come back down, will 0:05:01.040 --> 0:05:04.360 they ever really come back down to where they were? Well, 0:05:04.400 --> 0:05:07.960 I do think that inflation has affected um everybody and 0:05:08.000 --> 0:05:11.800 I think has re baseline to some extent prices. Uh 0:05:11.920 --> 0:05:14.000 So I don't think that prices are going to go 0:05:14.040 --> 0:05:18.520 down to pre pandemic levels. But we have seen pricing ease. 0:05:18.720 --> 0:05:22.839 For example, Q three pricing versus Q two pricing, surge 0:05:22.920 --> 0:05:26.000 levels came down. Our average E T A s in 0:05:26.120 --> 0:05:27.880 terms of you know, when you push a button, when 0:05:28.000 --> 0:05:31.200 is when do you get your car? That's improved as well. 0:05:31.360 --> 0:05:35.440 Service quality levels have improved. So we're hoping that pricing 0:05:35.520 --> 0:05:39.719 continues to ease, going to key form next year. But 0:05:40.040 --> 0:05:42.720 I do think that this is a new baseline, and 0:05:42.800 --> 0:05:46.159 you know, our consumers are riders or eaters. They're willing 0:05:46.200 --> 0:05:48.120 to pay. As you can see from the growth rates 0:05:48.120 --> 0:05:51.040 that we've seen as it relates to both audience up 0:05:51.080 --> 0:05:56.240 four trips up and then obviously gross bookings which are 0:05:56.279 --> 0:06:01.000 dollars in the bank, so to speak, up drivers supply 0:06:01.200 --> 0:06:04.479 is materially improving. What's what's happening with incentives? Are we 0:06:04.480 --> 0:06:06.520 going to see you pull back on incentives. Will they 0:06:06.520 --> 0:06:11.200 go away completely? Will you keep some around? Well? I 0:06:11.240 --> 0:06:14.120 think incent we are going to keep incentives around. But 0:06:14.200 --> 0:06:18.159 driver supplies improving because we've made real investments and the 0:06:18.279 --> 0:06:23.159 driver experience. We have radically improved our onboarding process so 0:06:23.200 --> 0:06:27.360 it's faster, so higher percentage of drivers who's shown interest 0:06:27.480 --> 0:06:31.039 in driving for Uber actually make that first trip. We're 0:06:31.080 --> 0:06:35.760 making that onboard flow faster, easier customer service available to 0:06:35.880 --> 0:06:40.400 help you in case you're having any issues with documents, etcetera. 0:06:40.560 --> 0:06:44.680 UM driver earnings levels are quite robust. Drivers in the US, 0:06:44.760 --> 0:06:49.599 for example, on average, make thirty six dollars per hour 0:06:49.920 --> 0:06:54.240 engaged on the platform. Those are very robust earnings level, 0:06:54.400 --> 0:06:58.440 especially with an activity as completely flexible. You can drive 0:06:58.520 --> 0:07:02.000 when you want, where you want as well. And then 0:07:02.040 --> 0:07:06.640 we're also innovating for drivers. Drivers previously they can for example, 0:07:06.720 --> 0:07:10.360 see the upfront price or the destination that they're headed at. 0:07:10.840 --> 0:07:14.400 That was one of the most requested features, and we 0:07:14.520 --> 0:07:17.960 ship that feature for our drivers UH this last quarter, 0:07:18.040 --> 0:07:20.880 so that they can see the upfront destination. They can 0:07:20.960 --> 0:07:23.560 see the upfront price, and they can pick and choose 0:07:23.960 --> 0:07:26.520 what's the trip that's right for them. UH and if 0:07:26.520 --> 0:07:29.000 a trip is not right for them, they can move 0:07:29.040 --> 0:07:31.440 on to the next trip as well. All of that 0:07:31.600 --> 0:07:34.600 is adding to more drivers coming onto the platform. But 0:07:34.680 --> 0:07:38.080 not only are they coming onto the platform, Churn rates 0:07:38.160 --> 0:07:41.240 are down almost on a year on your basis, and 0:07:41.240 --> 0:07:46.000 they're more engaged with us. The UH supply hours per 0:07:46.120 --> 0:07:49.120 driver or up sixteen percent on a year on your basis. 0:07:49.440 --> 0:07:52.280 If churn is down and engagement is up, it tells 0:07:52.280 --> 0:07:55.520 you that we're doing something right. It is earnings levels 0:07:55.520 --> 0:07:58.080 that are really good, but we're very, very much focused 0:07:58.120 --> 0:08:01.000 on improving the driver experience on Uber and to be 0:08:01.120 --> 0:08:05.000 the platform for earners to come and earn flexibly and safely. 0:08:05.200 --> 0:08:07.240 I want to ask your thoughts on Prop thirty Lift 0:08:07.280 --> 0:08:10.840 A big backer of it, Gavin Newsom, the governor, wants 0:08:10.840 --> 0:08:17.000 it to fail. The revenue from this generated taxing wealthy 0:08:17.040 --> 0:08:20.040 people would go to e V charging infrastructure subsidies to 0:08:20.120 --> 0:08:23.440 buy electric cars, which it seems that Uber has invested 0:08:23.480 --> 0:08:26.520 interest in. Why haven't you taken a strong stance on 0:08:26.560 --> 0:08:29.920 Prop thirty yet? I saw you ran into Governor Newsom 0:08:30.000 --> 0:08:33.640 on Twitter. Have you talked to him about this? Yeah? 0:08:33.679 --> 0:08:35.640 I have talked to him about this and and it's 0:08:35.640 --> 0:08:41.880 our feeling that California is making very substant substantial investments 0:08:42.280 --> 0:08:47.640 in terms of incentivizing EV ownership, in terms of charging infrastructure, 0:08:48.000 --> 0:08:50.200 and it's definitely showing up in our business. As you know, 0:08:50.320 --> 0:08:54.199 we've made very significant investments in moving more of our 0:08:54.240 --> 0:08:57.920 fleet over to e vs UH. We have a great 0:08:58.520 --> 0:09:02.600 partnership with hurt for example, to get more Tesla's onto 0:09:02.720 --> 0:09:06.679 the Uber fleet, and California is leading the pack in 0:09:06.800 --> 0:09:11.080 terms of miles for the percentage of our miles that 0:09:11.120 --> 0:09:14.960 are EV miles. It's now nine of miles driven on 0:09:15.120 --> 0:09:18.439 the Uber network in California are now e v s, 0:09:18.480 --> 0:09:21.040 which is a pretty extraordinary number. It's really second only 0:09:21.160 --> 0:09:25.679 to London. That's a fift So we feel like we're 0:09:25.720 --> 0:09:29.000 making the right investments. We are, for example, lowering our 0:09:29.000 --> 0:09:31.360 own booking fee and making sure that drivers can make 0:09:31.440 --> 0:09:34.719 more on a trip basis when they move over to 0:09:34.880 --> 0:09:39.280 e vs UH, and in partnership with both public and private, 0:09:39.640 --> 0:09:42.360 we think California is headed in the right direction, which 0:09:42.400 --> 0:09:44.600 is why you know we've stayed out of Prop thirty 0:09:44.600 --> 0:09:46.760 one way or the other. The economy, on the other hand, 0:09:46.800 --> 0:09:49.640 maybe headed in the wrong direction. Bloomberg Data showing that 0:09:49.679 --> 0:09:53.320 a recession is very likely. How concerned are you, How 0:09:53.360 --> 0:09:55.600 are you thinking about costs and spending? I mean, you 0:09:55.640 --> 0:09:59.120 do have I believe, double the free cash flow that 0:09:59.200 --> 0:10:02.360 at Meta Report did this quarter. Will you be opportunistic 0:10:02.440 --> 0:10:06.200 and look for potential M and A opportunities out there 0:10:06.240 --> 0:10:10.400 despite everything that's going on? More broadly, yeah, I think 0:10:10.400 --> 0:10:12.600 this is one of the most uncertain environments I've been 0:10:12.640 --> 0:10:15.320 a part of. You know, we it's very difficult to 0:10:15.360 --> 0:10:17.839 tell where things are going to wind up. I think 0:10:17.920 --> 0:10:21.440 Europe is certainly going to be weaker and is likely 0:10:21.480 --> 0:10:25.160 headed into a recession. We're preparing for that. In the 0:10:25.280 --> 0:10:27.480 U S it's unclear recession might happen, it might be 0:10:27.520 --> 0:10:30.439 a soft landing, etcetera. So I think from our standpoint, 0:10:30.840 --> 0:10:34.400 we want to be prepared for any eventuality. And I 0:10:34.440 --> 0:10:37.719 think as a company and as a technology company, we 0:10:37.800 --> 0:10:40.480 have been relatively forward thinking and making sure that we 0:10:40.559 --> 0:10:44.200 prepare ourselves for an uncertain world, making sure we're conservative 0:10:44.200 --> 0:10:46.440 in terms of the investments that we're making. And an 0:10:46.480 --> 0:10:49.960 investment isn't paying off, pull back, pull your money where 0:10:49.960 --> 0:10:51.960 the growth is. And I think it's showing in the 0:10:52.000 --> 0:10:54.920 results in terms of top line and free cashualow generation 0:10:55.440 --> 0:10:59.080 and one. Our outlook, even in an uncertain environment, is 0:10:59.080 --> 0:11:01.160 a super strong look and we want to keep it 0:11:01.200 --> 0:11:04.160 that way. All right to our cash CEO of uber 0:11:04.240 --> 0:11:06.080 as always are great to have you with us, Thank 0:11:06.160 --> 0:11:17.600 you for stopping by. Thank you very much. Let's get 0:11:17.640 --> 0:11:20.439 to Arista Networks now. It's just reported third quarter results 0:11:20.480 --> 0:11:24.040 beating expectations and even prompted at Bank of America to 0:11:24.160 --> 0:11:27.320 upgrade the stock. Shares were up five point seven percent 0:11:27.400 --> 0:11:29.920 or thereabouts at the close. Let's bring in president and 0:11:30.000 --> 0:11:32.120 CEO J Street u Lal now for more. J Cre 0:11:32.240 --> 0:11:33.880 is so great to have you back with us. I 0:11:33.920 --> 0:11:36.680 believe it's been a year since we last talked, and 0:11:36.720 --> 0:11:40.400 your sales growing fifty You're on path to grow for 0:11:42.360 --> 0:11:44.880 the year, which is even bigger than you projected at 0:11:44.920 --> 0:11:48.000 the start of this year. What are the leading drivers 0:11:48.000 --> 0:11:53.240 of this? Given continuing supply issues, inventory issues, macro concerns, 0:11:53.240 --> 0:11:56.160 how are you bucking the trend? Good to be back, 0:11:56.160 --> 0:11:58.600 em leave. We've got to keep this anniversary trend going. 0:11:59.040 --> 0:12:01.360 Um well, I'll tell you, first of all, it's great 0:12:01.400 --> 0:12:04.520 to have our own little micro momentum in a larger 0:12:04.640 --> 0:12:06.920 set of issues that you just described from a macro 0:12:07.520 --> 0:12:10.640 and I would attribute it to great products and technology, 0:12:11.000 --> 0:12:14.960 a great set of customers headlined by Microsoft and Meta, 0:12:15.120 --> 0:12:17.480 or as I affectionately called them M and M since 0:12:17.520 --> 0:12:20.720 I like candy, and I think the confluence so of 0:12:20.840 --> 0:12:23.600 all these diverse use cases that were now part of 0:12:23.840 --> 0:12:27.199 Arista has been been well known as a data center company, 0:12:27.360 --> 0:12:30.200 and today we're becoming more of a centers of data 0:12:30.200 --> 0:12:33.720 company where we're bringing that data to every location. Speaking 0:12:33.720 --> 0:12:37.160 of M and m's which is fitting around Halloween, Microsoft 0:12:37.559 --> 0:12:40.319 and Meta are leading customers, and I'm curious why do 0:12:40.440 --> 0:12:43.560 they rely on Arista so much when more broadly they 0:12:43.600 --> 0:12:46.839 seem to go with white box retailers for a lot 0:12:46.880 --> 0:12:49.560 of this back end stuff. Now, I think it's a 0:12:49.640 --> 0:12:51.400 very good question, but I think it's a bit of 0:12:51.440 --> 0:12:55.800 a misnomer that they only want white box or low cost. 0:12:56.280 --> 0:13:00.000 The tricker is to embrace their requirements. And Code developed 0:13:00.080 --> 0:13:03.000 a partnership that has been on more than a decade. 0:13:03.000 --> 0:13:06.840 In both cases, we actually do co engineering with them. 0:13:06.880 --> 0:13:09.520 We partner with them on the supply chain, we partner 0:13:09.520 --> 0:13:12.560 and procurement. We work with them on different designs and 0:13:12.679 --> 0:13:15.480 use cases, and in some use cases obviously they look 0:13:15.520 --> 0:13:17.840 for diversity and they build on their own or use 0:13:17.920 --> 0:13:20.880 other vendors. But the key in both cases that we 0:13:20.960 --> 0:13:24.200 are in many diverse use cases from the data center 0:13:24.240 --> 0:13:27.000 to the whend, to the regional spine, to the interconnect 0:13:27.440 --> 0:13:29.640 to a new use case that's coming up more and 0:13:29.679 --> 0:13:33.559 more for AI and m L workloads. And the partnership 0:13:33.640 --> 0:13:37.040 is indeed not a classical vendor customer one, but we 0:13:37.200 --> 0:13:41.080 truly take that partnership very strategically and not likely now 0:13:41.440 --> 0:13:45.319 the tight supply environment has really dented the growth for 0:13:45.520 --> 0:13:50.880 most tech bell weathers unlike Arista, give us an update 0:13:50.880 --> 0:13:54.200 on supply issues and inventory issues. And when you think 0:13:54.200 --> 0:13:56.640 those normalized, well, I tell you these are the times 0:13:56.679 --> 0:13:58.679 I wish I were just a software company and didn't 0:13:58.679 --> 0:14:00.720 have to worry about hardware. But as you know, Arista 0:14:00.800 --> 0:14:04.120 is really a platform company. We build a lot of hardware. 0:14:04.600 --> 0:14:08.120 We have hundreds of manufacturers and vendors we work with, 0:14:08.400 --> 0:14:12.120 and we have thousands of components on our hardware. So 0:14:12.200 --> 0:14:14.880 a couple of years ago Arista really put a plan 0:14:14.960 --> 0:14:18.160 together which we had approved by our board, to spend 0:14:18.400 --> 0:14:21.720 to the tune of four to five billion dollars in 0:14:22.400 --> 0:14:26.560 man in in getting components and inventory, which is, you know, 0:14:26.600 --> 0:14:29.480 in order of magnitude greater than our revenue. This is 0:14:29.560 --> 0:14:31.800 kind of unheard of, and we really took a multi 0:14:31.920 --> 0:14:35.840 year view on this, and as we got the approval, 0:14:35.880 --> 0:14:38.760 we started planning well ahead of our demand in twenty 0:14:39.240 --> 0:14:41.840 one and twenty two. And the good news is that 0:14:41.880 --> 0:14:44.320 has paid off some, but the bad news is we're 0:14:44.320 --> 0:14:46.880 not getting enough of it. We would still like more components, 0:14:47.360 --> 0:14:50.600 and despite our best planning efforts, are lead times are prolonged, 0:14:50.920 --> 0:14:52.840 and we're still waiting for what we often called the 0:14:52.880 --> 0:14:55.960 golden screw. The last ten or twenty components are still 0:14:55.960 --> 0:14:58.360 not available, and it's hard to build a system without 0:14:58.400 --> 0:14:59.960 all the components. It would be a little bit like 0:15:00.040 --> 0:15:02.880 a car without the tires, and so we're looking forward 0:15:02.880 --> 0:15:06.320 to overcoming that. But as we have crossed our first 0:15:06.320 --> 0:15:09.240 billion dollar quarter in Q two and marching ahead, we 0:15:09.320 --> 0:15:11.320 do need more and more of these components to get 0:15:11.400 --> 0:15:14.600 stronger this year and next year. Meta is raising its 0:15:14.640 --> 0:15:18.560 capacs for Arista along within Video and a few others 0:15:18.560 --> 0:15:20.840 were called out as beneficiaries. Tell us a little bit 0:15:20.840 --> 0:15:24.080 more about the changing nature of your partnership and how 0:15:24.120 --> 0:15:26.920 that we should expect that to evolve. And I think 0:15:26.960 --> 0:15:29.840 that's a really good question, Emily. I think we all 0:15:29.880 --> 0:15:32.480 know Meta for the strength they have brought as a 0:15:32.520 --> 0:15:36.840 social networking company and ads, etcetera. But every company has 0:15:36.880 --> 0:15:40.320 to redefine and reinvent itself and Mark is doing just that, 0:15:40.840 --> 0:15:44.480 and he's looking forward um at where to invest and 0:15:44.480 --> 0:15:46.200 where to put his money where his mouth is, if 0:15:46.200 --> 0:15:49.320 you will. And one of the important areas for companies 0:15:49.360 --> 0:15:52.440 like in Video and Arista is that this area of 0:15:52.600 --> 0:15:57.320 AI and m L applications that will tremendously test the 0:15:57.360 --> 0:16:00.920 network itself. When you put in hundreds, if not thousands, 0:16:00.960 --> 0:16:06.000 of GPUs and DPUs and storage etcetera. The pressure you 0:16:06.040 --> 0:16:11.080 put on the network in bandwidth, latency, dynamically load balancing 0:16:11.120 --> 0:16:14.120 your flows is huge. It's an order of magnitude more 0:16:14.160 --> 0:16:17.840 than anything that even we have developed and shipped so 0:16:17.920 --> 0:16:21.200 far to Meta. So the Arista seventy eight hundred spine, 0:16:21.200 --> 0:16:25.040 as an example, will give them that kind of delivery 0:16:25.080 --> 0:16:29.080 of hundreds of four hundred gig ports at very predictable latency, 0:16:29.520 --> 0:16:32.560 at a buffer and architectural level where they don't drop 0:16:32.560 --> 0:16:36.720 packets anymore, where they can handle the applications that come in. Now, 0:16:36.760 --> 0:16:38.560 this is long term planning. We are only in the 0:16:38.600 --> 0:16:40.800 first innings of that, but I think a lot of 0:16:40.840 --> 0:16:44.040 the meta investment will go into AI and m L 0:16:44.120 --> 0:16:47.000 which will have a direct impact on the Arista network 0:16:47.080 --> 0:16:51.240 infrastructure as well, and how we designed for them, develop 0:16:51.480 --> 0:16:54.360 for them, and they procure from us. You've got your 0:16:54.400 --> 0:16:56.720 analyst day coming up, talk to us about how we 0:16:56.720 --> 0:17:01.120 should be looking at growth in the next year. Will these, 0:17:01.160 --> 0:17:05.520 you know, really dreadful macro economic um concerns be a 0:17:05.600 --> 0:17:10.160 headwind for Ariska, How will it all impact cloud adoption 0:17:10.560 --> 0:17:13.280 if we're heading into a recession. Yeah, no, that's a 0:17:13.280 --> 0:17:15.320 really good question. We've just had one of our best 0:17:15.400 --> 0:17:18.840 quarters ever, as you pointed out, but the rest of 0:17:18.880 --> 0:17:22.360 the world around us is as not as beautiful um, 0:17:22.440 --> 0:17:24.040 So as we look at it, we're going to be 0:17:24.080 --> 0:17:27.920 thoughtful and vigilant of is there a macro recession and 0:17:28.119 --> 0:17:30.119 what is a riskless part in it? Because to some 0:17:30.240 --> 0:17:33.800 degree we're having micro momentum. We think some of the 0:17:33.880 --> 0:17:37.040 key trends has not affected the data center and the 0:17:37.119 --> 0:17:41.000 networking infrastructure. It remains strategic and relevant. But should a 0:17:41.080 --> 0:17:44.879 recession come, obviously we won't be immune to it. But 0:17:45.000 --> 0:17:47.520 at the moment, we're feeling really good and we have 0:17:47.600 --> 0:17:50.000 good visibility for the next six to twelve months, and 0:17:50.040 --> 0:17:52.400 we're looking forward to a great analyst day to give 0:17:52.440 --> 0:17:56.520 our three projections. Alright, well, good luck at good luck 0:17:56.560 --> 0:17:59.800 at Analyst Day later this week. J Street Lall, CEO 0:17:59.800 --> 0:18:02.560 of Risk and Networks. Great to have you back. Thank you. 0:18:03.240 --> 0:18:05.600 We're gonna be right back with more of Bloomberg technology 0:18:05.720 --> 0:18:13.520 after this quick break. This is Bloomberg. TikTok should be banned. 0:18:13.600 --> 0:18:16.920 That's according to FEC Commissioner Brendan Carr, as reported earlier 0:18:17.000 --> 0:18:20.800 by Axios, a comment that set chairs of Meta rising 0:18:20.840 --> 0:18:23.040 as much as four point one percent to session highs 0:18:23.640 --> 0:18:27.520 Snap spiking as well, Axio saying it's the strongest language 0:18:27.560 --> 0:18:29.960 Car has used so far to urge acting on TikTok. 0:18:30.040 --> 0:18:33.720 And while the SEC has no authority to regulate TikTok directly, 0:18:33.880 --> 0:18:37.640 Congress previously acted after Car voiced concerns about Chinese tech 0:18:37.680 --> 0:18:42.960 companies telecom companies like Huawei. Bloomberg has learned that Tesla 0:18:43.000 --> 0:18:45.200 is sending workers from China to help with an expansion 0:18:45.240 --> 0:18:48.280 at its factory in Fremont, California, a move that could 0:18:48.320 --> 0:18:51.359 help the US facility ramp up production. Got two hundred 0:18:51.400 --> 0:18:53.920 people from Tesla Shanghai plant will head to the Fremont 0:18:53.960 --> 0:18:57.080 facility on assignments that will last at least three months. 0:19:07.160 --> 0:19:09.720 Welcome back to Bloomberg Technology. Emily changing in San Francisco. 0:19:09.800 --> 0:19:12.639 Twitter owner Elon Musk is teasing a new subscription model 0:19:12.720 --> 0:19:17.320 for users eight dollars per month. He's also making major changes, 0:19:17.400 --> 0:19:21.520 including limiting content enforcement work just before mid terms next 0:19:21.560 --> 0:19:25.280 week by freezing employee access to internal tools used for 0:19:25.320 --> 0:19:28.760 content moderation. All while advertisers are being urged by dozens 0:19:28.800 --> 0:19:31.840 of advocacy groups to boycott the platform if it's new 0:19:31.960 --> 0:19:35.760 billionaire owner, lower safety standards for content, into it, into 0:19:35.760 --> 0:19:38.200 it all with bloomb x, Alex Brinka and add Ludlow, 0:19:38.400 --> 0:19:41.200 So ed give us the very latest here. Let's start 0:19:41.240 --> 0:19:45.120 with job cuts. We've been waiting for more. Have they happened? 0:19:45.480 --> 0:19:47.880 I mean at all levels of the company. Yes, we're 0:19:47.920 --> 0:19:51.440 hearing that a number of director and senior manager level 0:19:51.480 --> 0:19:54.359 people have departed, including j Sullivan, who is the GM 0:19:54.440 --> 0:19:57.240 for product for the revenue product and the consumer products. 0:19:57.520 --> 0:20:00.119 Nick cool Well, whose head of engineering his depart t 0:20:00.240 --> 0:20:03.600 bloom bows reported the VP of Gloefol sales as report 0:20:03.640 --> 0:20:08.440 has departed during the day on Tuesday. So this is 0:20:08.480 --> 0:20:10.520 all happening, you know. A source told me over the 0:20:10.560 --> 0:20:14.480 weekend that across the products and engineering groups they were 0:20:14.520 --> 0:20:17.720 asked to put together a list for layoff candidates that 0:20:17.760 --> 0:20:21.719 will reduced headcount by fifty We have not seen a 0:20:21.720 --> 0:20:25.040 broad wave of layoffs, but what I'm told by sources 0:20:25.320 --> 0:20:29.240 is that when determining who should be laid off, they've 0:20:29.280 --> 0:20:33.879 been assessing an individual based on the code contributions, the 0:20:33.960 --> 0:20:37.359 contributions and individuals made to the underlying source code for 0:20:37.400 --> 0:20:40.359 the Twitter platform during the duration of their time at 0:20:40.359 --> 0:20:42.960 the company. We know there's an all hands meeting called 0:20:43.240 --> 0:20:45.800 for Wednesday morning, and that's pretty much it. I know 0:20:45.840 --> 0:20:48.040 a lot of insiders at Twitter, a lot of staff 0:20:48.200 --> 0:20:51.919 are bracing for that. So let's talk about content moderation, Alex. 0:20:52.480 --> 0:20:57.399 What's happening, what can what's being moderated, what's not being moderated. Well, 0:20:57.640 --> 0:21:00.280 it seems like Elon Musk is self moderate ding if 0:21:00.280 --> 0:21:03.879 you're following the Nancy Pelosi tweets of this weekend. But 0:21:04.200 --> 0:21:07.840 it seems like there has been According to Bloomberg, sources 0:21:08.040 --> 0:21:12.160 a slowdown and what's being moderated because they basically told 0:21:12.200 --> 0:21:15.040 that team to pause what they're working on. You'll remember 0:21:15.080 --> 0:21:18.000 that Elon Musk said that they will create a content 0:21:18.080 --> 0:21:22.080 moderation system with a group of diverse perspectives, which for 0:21:22.119 --> 0:21:24.720 me and somebody who follows social media closely reminds me 0:21:24.760 --> 0:21:27.160 a lot of what they already have. So I think 0:21:27.200 --> 0:21:29.520 this will be one of the areas that Elon Musk 0:21:29.560 --> 0:21:33.640 will absolutely have to lay out what the plans will be, 0:21:33.640 --> 0:21:37.320 because it's not just users and the posters of content 0:21:37.359 --> 0:21:41.120 who really care about this. It is importantly the advertisers 0:21:41.160 --> 0:21:44.080 where Twitter makes most of their money. Those advertisers won't 0:21:44.119 --> 0:21:47.000 want to be, you know, paying to have their brand 0:21:47.080 --> 0:21:50.680 show up alongside content that they view as unsavory. So 0:21:50.960 --> 0:21:53.440 that moderation piece is a piece that is widely talked 0:21:53.480 --> 0:21:56.119 about in the few days since Elon Musk has been 0:21:56.119 --> 0:21:59.280 the de facto owner of this company, but we are 0:21:59.400 --> 0:22:02.439 yet to see kind of exactly the roadmap that he 0:22:02.560 --> 0:22:05.440 plans to take up for Twitter going forward. Then, of course, 0:22:05.440 --> 0:22:08.399 there have been these developments about Twitter Blue and the 0:22:08.440 --> 0:22:12.920 subscription service eight dollars a month, and what's the latest there. Yeah. 0:22:12.920 --> 0:22:15.520 I think Elon Musku's arguing on Twitter because remember he 0:22:15.600 --> 0:22:19.320 set this all out in tweets that a those compelled 0:22:19.359 --> 0:22:22.040 to pay for the privilege of blue check mor verification 0:22:23.000 --> 0:22:26.199 will want to do so to kind of separate themselves 0:22:26.240 --> 0:22:28.000 out from the rest of the crowd. He talked about 0:22:28.160 --> 0:22:33.120 blue carrying with it priority in terms of where responses appear, 0:22:33.200 --> 0:22:36.200 having fewer ads appear in the timeline. You know, Twitter 0:22:36.280 --> 0:22:38.879 is verified user base right now is about four hundred 0:22:38.920 --> 0:22:42.119 and fifty thousand if you go to the app verified account, 0:22:42.320 --> 0:22:45.520 so a few times that eight dollars by four fifty thousand, 0:22:45.520 --> 0:22:47.919 and new times that by twelve. It's not really this 0:22:48.040 --> 0:22:50.680 meaningful shift in business model. It's not going to sort 0:22:50.680 --> 0:22:55.040 of displace the necessity to have a revenue stream from advertising. 0:22:55.320 --> 0:22:57.320 But I think the idea is to kind of elevate 0:22:57.359 --> 0:23:00.919 premium content to have its stand out on what we 0:23:01.000 --> 0:23:03.560 know must believes is a pervasive issue, which is bots 0:23:03.600 --> 0:23:06.639 on the platform. What about this teasing of Vine coming 0:23:06.800 --> 0:23:09.320