WEBVTT - Musk's Pay Package and ASML Orders Miss 0:00:01.480 --> 0:00:04.640 From Mahard of Where Innovation, Money and Power. 0:00:04.360 --> 0:00:09.119 Collie in Silicon Vallet NBN. This is Bloomberg Technology with 0:00:09.280 --> 0:00:11.119 Caroline Hyde and Ed Love Love. 0:00:25.120 --> 0:00:27.800 I'm Caroline Hyde at Bloomberg's world headquarters in New York. 0:00:27.920 --> 0:00:30.640 And I'm Ed Lovedlow in San Francisco. This is Bloomberg 0:00:30.680 --> 0:00:31.760 Technology coming up. 0:00:31.960 --> 0:00:35.840 Tesla asked its investors to approve Musk's fifty six billion 0:00:35.880 --> 0:00:39.080 dollar pay package. Again, we discussed the vote on moving 0:00:39.120 --> 0:00:41.519 to Texas and its criticism of the Delaware court that 0:00:41.640 --> 0:00:43.400 voided Musk's twenty eighteen award. 0:00:44.280 --> 0:00:47.720 Chip making equipment orders dive at ASML as Europe's most 0:00:47.800 --> 0:00:51.280 valuable company faces a pullback from its Taiwanese and South 0:00:51.320 --> 0:00:52.160 Korean customers. 0:00:52.200 --> 0:00:54.360 Are chip stockpiles back. 0:00:55.120 --> 0:00:57.440 And meanwhile we bring you a key conversation with the 0:00:57.480 --> 0:01:01.000 CEO of debt laden Autos as the French IT company 0:01:01.040 --> 0:01:04.120 seeks to save itself. That and so much more coming 0:01:04.200 --> 0:01:06.319 up throughout this hour. But let's get your cook check 0:01:06.360 --> 0:01:08.360 on these markets. And I want to shine a light 0:01:08.360 --> 0:01:11.199 and what's happening ultimately an the equity market, which pulls 0:01:11.240 --> 0:01:13.679 back a little bit from where it had been. We're 0:01:13.680 --> 0:01:15.360 seeing a little bit of caution, of course, as we 0:01:15.400 --> 0:01:17.800 digest a more hawkish federal reserve, as we think about 0:01:17.800 --> 0:01:19.720 where JA power is really steering us in terms of 0:01:19.840 --> 0:01:21.840 number of cuts ubs, thinking it'll be two for this 0:01:21.959 --> 0:01:23.560 year starting in maybe September. 0:01:23.720 --> 0:01:24.800 Nevertheless, we're seeing. 0:01:24.640 --> 0:01:27.040 Actually bob markets continuing to outperform, and not as much 0:01:27.040 --> 0:01:29.000 as they were earlier. Red currently seeing a twenty year 0:01:29.040 --> 0:01:30.920 yield just down by about two three basis points to 0:01:30.959 --> 0:01:33.800 remember big auction coming ahead of that all important Beige 0:01:33.800 --> 0:01:36.160 Book as well, and moment we're moving on and have 0:01:36.200 --> 0:01:37.880 a look at what's happening in the world of crypto, 0:01:38.120 --> 0:01:41.280 because Bitcoin has actually been well on the downside, even 0:01:41.280 --> 0:01:44.399 as the US dollar is for once falling now after 0:01:44.520 --> 0:01:46.240 six this is the first time in six days we've 0:01:46.280 --> 0:01:48.320 actually seen the US dollar give up some of its 0:01:48.320 --> 0:01:51.160 strength as we maybe just digest what has been, of 0:01:51.200 --> 0:01:53.680 course an apparent slightly more hawkish shift, where we're looking 0:01:53.720 --> 0:01:55.480 at a bitcoin currently off by two and a half 0:01:55.480 --> 0:01:57.920 percent riskasset's still cautious out there are but what are 0:01:57.920 --> 0:01:58.240 you watching? 0:01:58.240 --> 0:02:03.080 On the micro Tesla continues to dominate headlines and market moves. 0:02:03.120 --> 0:02:06.000 We're down for a four straight session, that's the worst 0:02:06.040 --> 0:02:08.960 run of declines since the beginning of this year, and 0:02:09.000 --> 0:02:11.840 the stock is trading at its lowest level in almost 0:02:11.840 --> 0:02:14.160 a year. And I don't think this is to do 0:02:14.200 --> 0:02:16.320 with the two red headlines on the Bloomberg tumil. I 0:02:16.320 --> 0:02:19.280 think the proxy revealing that investors will vote on that 0:02:19.320 --> 0:02:22.600 original twenty eighteen pay package rejected by a court, and 0:02:22.639 --> 0:02:25.280 the idea of incorporating in Texas. I don't think that's 0:02:25.320 --> 0:02:29.280 the downward pressure. There's indigestion from the events of the 0:02:29.320 --> 0:02:34.720 last four days, executive departures, layoffs, and Elon's comment about 0:02:34.919 --> 0:02:37.320 going all in on ROBOTAXI, and I think a lot 0:02:37.320 --> 0:02:40.560 of people are trying to understand what's happening, what is 0:02:40.600 --> 0:02:42.800 the big picture and when does it happen. But the 0:02:42.800 --> 0:02:46.240 stock's under a lot of pressure, while the talk from 0:02:46.280 --> 0:02:48.760 Elon Musk on his own platform X is fighting talk. 0:02:48.840 --> 0:02:50.520 And I think we've got some pretty good guests to 0:02:50.560 --> 0:02:51.080 go through that with. 0:02:51.560 --> 0:02:53.520 Yeah, let's talk about the fighting talk, let's talk about 0:02:53.520 --> 0:02:56.880 the reaction throughout. Let's start the Bloomberg's Crow Todell, And 0:02:57.280 --> 0:03:01.640 what's so interesting is ultimately coming out fighting to Delaware, 0:03:01.760 --> 0:03:04.400 to the court, to the judge that said initially, this 0:03:04.480 --> 0:03:08.079 twenty eighteen pay package is far too much and new 0:03:08.120 --> 0:03:10.760 board are not doing enough to push back. But I'm 0:03:10.800 --> 0:03:13.160 interested ased why the argument goes that it would cost 0:03:13.240 --> 0:03:17.280 billions more to renegotiate a pay package rather than just 0:03:17.320 --> 0:03:19.800 try and vote through the current one. 0:03:20.080 --> 0:03:23.079 Yeah, I do think it's interesting that the board sort 0:03:23.120 --> 0:03:26.880 of you know, portrayed this as a nuisance, really this 0:03:27.000 --> 0:03:30.680 idea that they would have to take on additional expense 0:03:31.280 --> 0:03:36.160 that you know, the company accounted for having to set 0:03:36.240 --> 0:03:41.080 up these options and set aside this this compensation for 0:03:41.360 --> 0:03:43.800 musk and essentially would have to sort of, you know, 0:03:43.880 --> 0:03:48.120 do it over again. It does also strike me just 0:03:48.360 --> 0:03:50.200 from the language that was used in the filing that 0:03:50.240 --> 0:03:53.320 it was sort of musky in and that Robin Denholm, 0:03:53.360 --> 0:03:55.320 the chair of the company, you know, referred to this 0:03:55.440 --> 0:04:00.000 idea of essentially that the court had taken away shareholder 0:04:00.080 --> 0:04:02.160 or voice. It was kind of a freedom of speech 0:04:02.400 --> 0:04:06.480 esque defense of this pay package. But of course, you know, 0:04:06.560 --> 0:04:11.040 share you know, corporate governance critics are not going to 0:04:11.080 --> 0:04:13.880 look on this very family, this idea of you know, 0:04:13.960 --> 0:04:17.200 this this award being slapped down and the board just 0:04:17.240 --> 0:04:18.880 going back to the world with the same plan. 0:04:19.880 --> 0:04:22.760 Craig, you've been reading the proxy for the last four 0:04:22.800 --> 0:04:25.880 hours and thirty minutes. 0:04:26.560 --> 0:04:28.400 I know you have been at your desk doing that. 0:04:28.880 --> 0:04:32.640 There's some granular detail in it that Tesla explains a 0:04:32.800 --> 0:04:38.440 randy compensation program and the idea of reincorporating in Texas 0:04:38.480 --> 0:04:41.200 in parallel, and my read on it is that they 0:04:41.240 --> 0:04:44.279 basically don't want to be accused of using the Texas 0:04:44.320 --> 0:04:50.159 incorporation as leverage in this ongoing pay issue. 0:04:50.600 --> 0:04:53.720 Yeah, they want to kind of pair these two basically 0:04:54.000 --> 0:04:58.360 get the shareholders backing again. You know, I guess make 0:04:58.400 --> 0:05:03.240 the case really that shareholders, if they didn't already know 0:05:03.680 --> 0:05:07.800 what went into this award, the Delaware court just you know, 0:05:08.880 --> 0:05:11.880 brought to light a lot of these details, made clear 0:05:12.560 --> 0:05:14.680 what was going on here and really sort of put 0:05:14.680 --> 0:05:18.159 it back in the court of the shareholders and say 0:05:18.440 --> 0:05:21.720 are you okay with this or aren't you? And of 0:05:21.760 --> 0:05:25.920 course you know, we have you know, heard rumblings reported 0:05:25.960 --> 0:05:29.800 on this idea that retail shareholders were really sort of 0:05:29.839 --> 0:05:32.960 an uproar, you know, based on just at least the 0:05:33.320 --> 0:05:37.119 volume of complaints about the way this was handled. Also 0:05:37.200 --> 0:05:39.920 Tesla saying in the proxy that four of its ten 0:05:39.960 --> 0:05:44.320 biggest institutional investors wrote to the company or you know, 0:05:44.360 --> 0:05:47.400 somehow communicated that they were in support of this award. 0:05:47.520 --> 0:05:52.120 So there is some reason to think that perhaps this 0:05:52.200 --> 0:05:55.200 stands a chance of being approved, just as it was back. 0:05:55.080 --> 0:05:57.960 In twenty eighteen, it was a load of dents texts 0:05:57.960 --> 0:06:00.600 to go through testas down a percentage point. That way 0:06:00.640 --> 0:06:03.520 of sessions in moos created ow great work, Thank you 0:06:03.640 --> 0:06:06.520 very much. Just keep a conversation going with Pierre Faragu, 0:06:06.560 --> 0:06:10.000 who's head of Tech Infrastructure research at New Street Research. 0:06:10.800 --> 0:06:14.840 Just give me one sentence, what is the story of 0:06:14.920 --> 0:06:17.000 Tesla right now? Just one sentence. 0:06:19.400 --> 0:06:21.600 I'm not very good at doing one sentence, you know that. 0:06:23.320 --> 0:06:26.760 So the one sentence would be Testa is a car 0:06:26.880 --> 0:06:31.120 manufacturer first and for the seable future, they need to 0:06:31.160 --> 0:06:34.880 continue to be successful at manufacturing cars, and that's a 0:06:34.920 --> 0:06:39.279 platform for them to do additional amazing things. 0:06:40.360 --> 0:06:41.560 You have a donomous driving. 0:06:42.040 --> 0:06:45.040 They are the most advanced player in the world on 0:06:45.440 --> 0:06:49.320 supervised autonomous driving, so your car driving by itself under 0:06:49.400 --> 0:06:53.880 your supervision. They're making exceptional progress. There is a very 0:06:55.320 --> 0:06:58.960 long term, like over the horizon goal host of being 0:06:59.040 --> 0:07:03.680 able to do Robert. It's a much more still challenging 0:07:03.880 --> 0:07:10.360 thing to get to very uncertain so and there's also 0:07:10.440 --> 0:07:15.400 the opportunity to develop human and humanoid robots on the 0:07:15.480 --> 0:07:19.520 same technology platform as FIG And these things will take 0:07:19.680 --> 0:07:21.400 us whichever way you look at it. 0:07:21.480 --> 0:07:24.080 And we know Elon Musk is very impatient, wants to 0:07:24.640 --> 0:07:28.080 accelerate that momentum, but it's going to take us. 0:07:28.320 --> 0:07:31.120 And in the meantime, we also need Tesla to see 0:07:31.160 --> 0:07:33.720 that Tesla is still going to be a very successful 0:07:33.760 --> 0:07:37.840 g manufacturers being able over time to stabilize pricing, to 0:07:37.960 --> 0:07:40.280 continue to gain share with the product they have in 0:07:40.360 --> 0:07:44.080 the market today, and then in the next two three 0:07:44.120 --> 0:07:47.800 years to be able to ramp a large volume, lower 0:07:47.920 --> 0:07:52.520 price platform to continue to grow sustainably, and all that 0:07:52.800 --> 0:07:55.520 should deliver revenue growth and margin expansion. 0:07:55.760 --> 0:07:58.320 And that's really like the near term and the longer 0:07:58.480 --> 0:08:01.080 term is yes. But and robotaxes. 0:08:02.440 --> 0:08:04.720 It was a loaded question, but you did give me 0:08:04.960 --> 0:08:07.640 one sentence just without full stops of punctuation. 0:08:07.800 --> 0:08:08.320 That's okay. 0:08:08.800 --> 0:08:12.080 The reason I ask it is I'm trying to understand 0:08:12.120 --> 0:08:14.560 in the moment the downward pressure on the stock, and 0:08:14.880 --> 0:08:16.720 I don't think it's got much to do with the 0:08:16.800 --> 0:08:20.480 proxy So of all the headlines of the last four days, 0:08:21.120 --> 0:08:23.360 which was of most interest to ups. 0:08:27.640 --> 0:08:33.040 Of the last few days, the most important headlines have heard, well, 0:08:33.040 --> 0:08:34.960 you know, the most important thing of the last few 0:08:35.040 --> 0:08:38.640 days was actually to digest swear the headlines of last week. 0:08:39.080 --> 0:08:42.280 And so we've heard, like, we've read a rota's report 0:08:42.760 --> 0:08:43.200 mode to. 0:08:43.240 --> 0:08:45.800 Being canceled and things like that, and we've had like 0:08:45.960 --> 0:08:50.480 you know, ins and indications from Milan Musk and from 0:08:50.559 --> 0:08:55.560 this last chief designer that the modity is probably not cancered. 0:08:56.000 --> 0:08:59.160 And so the most important breakthrough earlier this week was 0:08:59.800 --> 0:09:04.120 the understanding that probably what's happening to that Tesla is 0:09:04.200 --> 0:09:09.839 that Tesla is going to prioritize designing developing the robot 0:09:09.880 --> 0:09:15.480 taxi in Austin for now, because anyway, the model too 0:09:15.960 --> 0:09:18.880 will need to wait for Mexico to ramp in millions 0:09:18.960 --> 0:09:23.520 of units, and Mexico is still two three years away, 0:09:24.000 --> 0:09:26.240 and so in the meantime, producing only a quarter of 0:09:26.320 --> 0:09:29.520 a million Model twos in Austin doesn't really help. 0:09:29.800 --> 0:09:32.360 It's it's like a very very little help. 0:09:32.559 --> 0:09:36.760 And so my educated guess is that Elan understood that 0:09:37.000 --> 0:09:39.559 and thought, okay, let's go all in on robot taxi. 0:09:39.679 --> 0:09:41.960 Let's get a platform out, let's have a small flet 0:09:42.520 --> 0:09:45.960 on which we can try out tests, improve the technology, 0:09:46.440 --> 0:09:48.800 and then let's get back to the model too a 0:09:48.880 --> 0:09:51.320 bit later. So hopefully next week when the company reports, 0:09:51.360 --> 0:09:54.160 we get a bit more lightly on that. So that's 0:09:54.400 --> 0:09:56.520 really the big thing of the last forty eight. 0:09:57.720 --> 0:09:59.760 I like the fact that you give us your reasoning, 0:09:59.840 --> 0:10:02.959 you interpretation, pr give us your reasoning on whether the 0:10:03.040 --> 0:10:05.679 stock should be down by a third so far this year. 0:10:08.720 --> 0:10:12.160 Yes, so if you look at the potential of the 0:10:12.240 --> 0:10:15.560 company in the long run, that's a nonsense. 0:10:15.840 --> 0:10:17.800 Tesla makes electric cards. 0:10:18.240 --> 0:10:21.640 Electric cars remain I think the future of cards and 0:10:21.800 --> 0:10:25.320 nobody on us can make electric cars as good as 0:10:25.360 --> 0:10:29.120 Tesla and as cost efficiently. And if anything, this gap 0:10:29.360 --> 0:10:33.200 is widening. I just took delivery of my new medal three, 0:10:33.280 --> 0:10:37.079 the high Lander. Like the podcast Testa is making it 0:10:37.200 --> 0:10:39.240 doing grades and very cost efficient. 0:10:39.320 --> 0:10:40.760 Cards is still mind blowing. 0:10:40.960 --> 0:10:43.360 So I think it's still a very powerful company in 0:10:43.400 --> 0:10:46.000 the stock is vastly undervalued if you look at it 0:10:46.200 --> 0:10:49.079 in the long run. In terms of short term developments, 0:10:49.200 --> 0:10:51.199 I have a lot of sympathy for where the stock 0:10:51.320 --> 0:10:53.240 is going has been going in the last three months 0:10:54.000 --> 0:10:57.120 because Tesla has been hitting a wall in terms of growth, 0:10:57.559 --> 0:11:00.880 has been forced to regius pricing lots, you know, like 0:11:01.840 --> 0:11:05.040 finding themselves in a situation where they were raising increasing 0:11:05.120 --> 0:11:09.079 productions faster than demon could could increase. So they have 0:11:09.200 --> 0:11:11.160 to reset the bar and it's not going to happen 0:11:11.200 --> 0:11:13.280 over a few weeks. We still have a lot of 0:11:13.400 --> 0:11:17.400 inventories ri seeing are still low. Demand is still not 0:11:17.600 --> 0:11:20.719 enough to comfortably absorb the production today, so we will 0:11:20.800 --> 0:11:22.959 need some time, you know, to get the start back 0:11:23.000 --> 0:11:26.120 on track, and of course the stock correcting to that 0:11:26.320 --> 0:11:28.679 is the way the market works, and yes, I have 0:11:28.800 --> 0:11:31.760 sympathy for that. TESTA is at a low point, is 0:11:31.800 --> 0:11:35.559 between two gross trajectories, continues to work on you know, 0:11:35.720 --> 0:11:41.000 long terim moonshots like Theroid and a robotaxi, and in 0:11:41.120 --> 0:11:43.080 the meantime, like the next couple of years are going 0:11:43.160 --> 0:11:44.240 to be years of recovery. 0:11:44.320 --> 0:11:47.040 So ahead of that, seeing the stock quickening makes sense 0:11:47.120 --> 0:11:48.079 to me, even. 0:11:47.960 --> 0:11:51.480 If I would disagree with that blatantly with evaluation implied, 0:11:51.840 --> 0:11:53.360 if she will get it over like a three to 0:11:53.440 --> 0:11:55.120 five year horizon, yeah. 0:11:55.360 --> 0:11:57.120 Giving us short term and the long term, we thank you, 0:11:57.360 --> 0:12:00.320 Head of Tech infrastructures, research of a new street research. 0:12:00.720 --> 0:12:02.400 Some of the longest sentences in the house, but we 0:12:02.480 --> 0:12:02.679 love it. 0:12:02.760 --> 0:12:05.600 Meanwhile, coming up tech earnings, they're upon us will dive 0:12:05.679 --> 0:12:08.160 deeper into what to expect and the current state of 0:12:08.200 --> 0:12:09.680 tech market's more broadly aired. 0:12:09.960 --> 0:12:11.640 What are you looking at ahead of that conversation? 0:12:12.240 --> 0:12:16.320 Philadelphia Semiconductor Index or SOCKS twenty seven names in the red, 0:12:16.440 --> 0:12:17.120 three in the green. 0:12:17.200 --> 0:12:18.560 Biggest drop on ASML. 0:12:19.040 --> 0:12:24.400 The story chip contract manufacturers are not ordering chip making equipment. 0:12:24.480 --> 0:12:27.640 What does that tell us? We'll explain next. This is Bloomberg. 0:12:27.240 --> 0:12:43.120 Technology ASML chip equipment maker, having its worst day since 0:12:43.200 --> 0:12:45.959 June twenty twenty two. Now put it into context, this 0:12:46.080 --> 0:12:48.079 is a company that's up about twenty five percent so 0:12:48.280 --> 0:12:50.920 far this year. Nevertheless, we see a pullback because it's 0:12:50.960 --> 0:12:53.640 earnings really disappoint on the quarter that we've just seen 0:12:53.840 --> 0:12:55.960 in terms of revenue. But also pointing to this quarter 0:12:56.000 --> 0:12:58.080 we're already in saying it's going to be low where 0:12:58.120 --> 0:13:02.400 the market had anticipated. Why, Well, we're seeing TSMC Samsung 0:13:02.520 --> 0:13:04.880 pull back on perhaps some of the orders that we 0:13:05.000 --> 0:13:07.120 thought for some of their overall chip equipment. 0:13:07.440 --> 0:13:09.760 Now, this still shows a chip sector that's. 0:13:09.640 --> 0:13:11.679 In recovery when you're thinking of our own purchases of 0:13:11.720 --> 0:13:13.959 electronic goods, and they're like, but what of the AI 0:13:14.240 --> 0:13:16.880 revolution ed? This is what's so interesting is the fact 0:13:16.880 --> 0:13:20.240 that actually their number one market, it's China. Basically half 0:13:20.360 --> 0:13:22.160 of their revenue is coming from China at the moment, 0:13:22.240 --> 0:13:24.880 even though we see those sanctions, those curbs on such 0:13:25.200 --> 0:13:29.400 very high EUV chip equipment going to China, they can't 0:13:29.400 --> 0:13:31.520 get their hands on that, but actually they're still relatively 0:13:31.640 --> 0:13:35.760 strong orders for the lower elements of where that chip 0:13:35.760 --> 0:13:36.679 equipment has been going. 0:13:36.920 --> 0:13:41.040 But notably, look their own revenues that China historically is 0:13:41.080 --> 0:13:46.400 big market. The story of the anxiety is about not China, TSMC, Taiwan, 0:13:46.600 --> 0:13:50.520 Samsung in South Korea, all this CAPEX commitment, but they're 0:13:50.559 --> 0:13:53.719 not fronting up in the short term. The drop was 0:13:53.760 --> 0:13:57.319 called on quarter sixty one percent for EUV lithography. Basically, 0:13:57.559 --> 0:14:01.600 they ain't buying machines that make chips. Why let's dig 0:14:01.720 --> 0:14:04.880 deeper into these markets tech earning seasons also around the 0:14:04.920 --> 0:14:07.840 corner epek Oscar Diskay, a senior market analyst over at 0:14:07.840 --> 0:14:11.559 Swiss quote. You know, there's the headlines governments in Europe 0:14:11.559 --> 0:14:14.240 and the United States right in big checks, saying come 0:14:14.280 --> 0:14:15.480 and build chip factories. 0:14:15.520 --> 0:14:16.400 It's going to be great. 0:14:16.720 --> 0:14:20.360 And Samsung and TSMC gave us better capex outlooks for 0:14:20.440 --> 0:14:23.000 this year, and then we've got ASML and things aren't 0:14:23.040 --> 0:14:23.720 going so rosy. 0:14:23.800 --> 0:14:24.560 What was your read on that? 0:14:25.760 --> 0:14:29.640 Well, Actually, ASML Earning is really disappointed this morning in 0:14:29.760 --> 0:14:33.320 Europe and kind of raised a couple of ibros regarding 0:14:33.880 --> 0:14:37.440 the sustainability of the demand growth from chip makers and 0:14:37.600 --> 0:14:39.400 the sustainability. 0:14:38.600 --> 0:14:39.160 Of the AI. 0:14:39.360 --> 0:14:42.320 Really now, it's important to note that ASML said that 0:14:42.480 --> 0:14:44.560 the second half of this year is going to see 0:14:44.640 --> 0:14:49.080 a rebound and they actually kept their full year outlook unchanged, 0:14:49.320 --> 0:14:52.320 but obviously because now we are used to have fantastic 0:14:52.480 --> 0:14:56.920 results from chip makers while the ASML's disappointment. Disappointment has 0:14:57.280 --> 0:15:01.680 been a sour taste in investors well mouth this morning. 0:15:01.800 --> 0:15:04.960 And I'm actually we actually think that at some point 0:15:05.120 --> 0:15:08.600 reasonably the growth and growth expectations for chip makers will 0:15:08.920 --> 0:15:11.600 be leveling out, and it's just to see if this 0:15:11.800 --> 0:15:15.600 is the quarter that we will see these expectations slow down, 0:15:16.000 --> 0:15:18.880 and there is a possibility that we do see them 0:15:18.960 --> 0:15:21.960 slow down, and that's going to be able to trigger 0:15:22.200 --> 0:15:26.280 actually a sizeable downside correction and profit taking. But more 0:15:26.400 --> 0:15:30.360 broadly regarding AI, well, ASMA also said that they expect 0:15:30.440 --> 0:15:34.080 AI to continue to contribute to their revenues, and we 0:15:34.240 --> 0:15:37.840 do also expect AI really to continue, maybe not in 0:15:37.920 --> 0:15:41.400 the same way because we expect some changes within the 0:15:41.520 --> 0:15:44.400 AI segments. So what I mean by that is we 0:15:44.640 --> 0:15:47.280 saw so far the first phase, what we call the 0:15:47.320 --> 0:15:50.240 first phase of the AI really benefit to companies, to 0:15:50.400 --> 0:15:54.520 chip makers, data centers, cloud businesses, all these companies that 0:15:54.640 --> 0:15:58.560 do provide AI tools other companies. But we are now 0:15:58.800 --> 0:16:01.840 thinking that there will be second phase in this AI 0:16:02.080 --> 0:16:05.720 really which is expected to benefit two companies that actually 0:16:05.840 --> 0:16:10.160 invest in massively in AI technologies and tools and which 0:16:10.200 --> 0:16:14.440 should shortly start well seeing the return on their AI investments. 0:16:14.520 --> 0:16:16.440 So I think that even though we see. 0:16:16.280 --> 0:16:20.600 Some disappointment in terms of chip maker earnings Squart, while 0:16:20.640 --> 0:16:22.960 the AI really is not ready to end, you. 0:16:23.080 --> 0:16:25.400 Pack brun that out to the rest of earning season 0:16:25.480 --> 0:16:28.120 for us, because well, there's a lot of optimism that 0:16:28.200 --> 0:16:30.320 AI is already going to be helping with costs for example. 0:16:31.480 --> 0:16:34.920 Well, actually, the AI has been the major talking point 0:16:35.000 --> 0:16:36.920 and the expectations are quite high. 0:16:37.080 --> 0:16:37.400 Mind you. 0:16:37.600 --> 0:16:41.440 I mean looking at the magnificent seven socks expectations around 0:16:41.560 --> 0:16:45.080 learning's growth of around forty percent for the first quarter. 0:16:45.400 --> 0:16:48.880 That's huge number. That's still down from fifty five percent 0:16:49.000 --> 0:16:52.440 printed a quarter earlier. But if we single out stocks 0:16:52.520 --> 0:16:54.840 like Tesla and Apple who have been in trouble in 0:16:55.000 --> 0:16:59.360 the first quarter, will the expectation of earnings growth goes. 0:16:59.320 --> 0:17:01.400 All the way up to eighty percent. 0:17:01.520 --> 0:17:04.760 So now we're talking about a handful of AI sucks, 0:17:04.840 --> 0:17:08.679 namely Nvidia, Microsoft, but also Google, and we're sold by 0:17:08.800 --> 0:17:11.560 Facebook and Amazon. So I think that there is a 0:17:11.840 --> 0:17:14.520 huge optimism out there. But what we will be really 0:17:14.600 --> 0:17:18.680 interested in is who within this AI segment is going 0:17:18.720 --> 0:17:22.120 to be profiting from the AI developments, whether it's going 0:17:22.200 --> 0:17:24.760 to be the provider of AI tools or are we 0:17:24.880 --> 0:17:27.919 going to shift towards well the user of the AI tools. 0:17:28.359 --> 0:17:30.480 IMPAC great to have your voice in the show. Thank you. 0:17:30.600 --> 0:17:34.280 Ipek Oscar Deshka, Senior market analyst, Swiss quote giving us 0:17:34.320 --> 0:17:39.840 the context. JP Morgan, Chase c Jamie Dinan. He makes 0:17:39.920 --> 0:17:42.200 no secret of his firm than it is all in 0:17:42.320 --> 0:17:45.040 on artificial intelligence. Now the head of the world's biggest bank, 0:17:45.160 --> 0:17:47.760 when he's laying out his vision for the future money 0:17:47.840 --> 0:17:49.080 in this AI world. 0:17:49.440 --> 0:17:51.280 He spoke with Bloomberg Original's. 0:17:50.840 --> 0:17:53.720 Host Emily Chang about that and so much more in 0:17:53.760 --> 0:17:56.520 the premiere episode of The Circuits second season, particul Listen. 0:17:58.840 --> 0:18:00.760 The best needs be prepared for any business. 0:18:01.440 --> 0:18:04.119 I think when you think about really think about things 0:18:04.160 --> 0:18:06.840 that can go terribly wrong, can you survive them? You know, 0:18:06.960 --> 0:18:09.879 it could be technology, it could be government regulations, it 0:18:09.960 --> 0:18:12.639 could be it could be the literally the weather. If 0:18:12.640 --> 0:18:14.320 you're a restaurant, you know that might close you down. 0:18:14.400 --> 0:18:16.720 If you have if you lose this week's business, you're 0:18:16.720 --> 0:18:18.760 out of business. Get enough cash. So you should think 0:18:18.800 --> 0:18:19.320 all that through. 0:18:19.800 --> 0:18:23.200 Bill Gates once said banking is necessary, banks are not 0:18:24.320 --> 0:18:27.560 to what extent could AI or fintech replace traditional banks. 0:18:28.040 --> 0:18:29.560 So I think, first of all, I remember him saying 0:18:29.600 --> 0:18:31.720 banks of dinosaurs. I spoke to about it in nineteen 0:18:31.800 --> 0:18:34.639 ninety seven, and obviously he was dead roll. We probably 0:18:34.640 --> 0:18:38.080 agree to that, but he's not wrong. The technology changes everything. 0:18:38.520 --> 0:18:41.320 And if anyone is complacent or arrogant or think that 0:18:41.600 --> 0:18:43.200 because you have a big position to day, you get 0:18:43.200 --> 0:18:46.520 a big position tomorrow, that's a mistake. But the end 0:18:46.520 --> 0:18:48.480 of this fine what is banking. Someone's going to have 0:18:48.560 --> 0:18:50.720 to hold the money. Someone's got to move the money, 0:18:50.960 --> 0:18:53.080 someone's got to raise the money, someone's got. 0:18:53.000 --> 0:18:55.400 To do research, you know, around money. 0:18:55.760 --> 0:18:58.840 Those services will still be around, and you know, hopefully 0:18:58.880 --> 0:19:00.320 we're doing it and using a lot have to do 0:19:00.400 --> 0:19:02.720 a better job at it. But I've always thought it's 0:19:02.880 --> 0:19:05.920 very possible that some tech thing, you know, distant intermediates 0:19:05.960 --> 0:19:08.480 a piece of that. And I've been writing about you know, 0:19:08.600 --> 0:19:11.080 big tech going to our business. We've got fintech. We 0:19:11.160 --> 0:19:14.280 also have big tech, and they will embed payment systems 0:19:14.320 --> 0:19:16.600 in there. Some we're going to white label banks kind 0:19:16.600 --> 0:19:17.360 of what Apple did. 0:19:17.920 --> 0:19:18.040 Uh. 0:19:18.119 --> 0:19:19.480 You know, they have the right to do that. I'm 0:19:19.480 --> 0:19:20.119 not against that. 0:19:20.560 --> 0:19:23.520 I would be against unfair use of their position to 0:19:23.680 --> 0:19:24.720 dominus in a business. 0:19:25.000 --> 0:19:27.880 Well, Apple is going deeper into financial services. 0:19:27.920 --> 0:19:29.520 Do you worry about the bank of Apple. 0:19:29.640 --> 0:19:32.800 Well, we'll get to compete, so they have a tough competitor. 0:19:32.880 --> 0:19:36.360 But you know they hold money, move money. Yeah, they're 0:19:36.400 --> 0:19:38.440 a form of a competitor. You know, we also partner 0:19:38.520 --> 0:19:41.199 with them, but I'm very used to partnering and competing 0:19:41.280 --> 0:19:42.200 with lots of people. 0:19:43.160 --> 0:19:44.040 Existential threat. 0:19:45.080 --> 0:19:47.320 I don't think it's an existential threat. But I think 0:19:47.440 --> 0:19:49.520 if we were complacent about it. 0:19:49.720 --> 0:19:54.320 Yes, that was JP Morgan, Chase CEO, Jamie Diamond, and 0:19:54.480 --> 0:19:56.159 right here on set, this is being back in the 0:19:56.200 --> 0:19:59.200 regional so it's Emily Chang. Jamie Diamond is kind of 0:19:59.200 --> 0:20:02.359 one of the most upset about people like high flying 0:20:02.440 --> 0:20:06.560 executive in the person yep, the circuit series too. 0:20:06.720 --> 0:20:07.760 That's kind of what's cool. 0:20:07.600 --> 0:20:10.680 About it is you get people in a chair but 0:20:11.200 --> 0:20:14.000 being themselves. How did you do it this time around? 0:20:14.080 --> 0:20:14.480 Oh boy? 0:20:14.560 --> 0:20:16.320 And this was my first time meeting him. You know, 0:20:16.400 --> 0:20:18.960 it was all about London, right in London, and he 0:20:19.119 --> 0:20:21.159 was just there for a tech conference really quick. It 0:20:21.240 --> 0:20:23.440 was all about just making the most of every single minute, 0:20:23.600 --> 0:20:26.040 the handshake, the walk to the interview room, the chit 0:20:26.160 --> 0:20:28.720 chat that you know before we actually got quote unquote 0:20:28.760 --> 0:20:31.760 on camera for you know, the formal sit down interview, 0:20:31.880 --> 0:20:33.880 and you know, we talked about how many days he's 0:20:33.920 --> 0:20:35.520 on the road a year, one hundred and twenty days. 0:20:35.560 --> 0:20:38.720 We talked about childhood, family. I asked, you know, how 0:20:38.760 --> 0:20:40.040 do you do it? He was like, what do you mean, 0:20:40.720 --> 0:20:41.639 how do you juggle it all? 0:20:41.760 --> 0:20:43.840 And I think he kind of appreciated that question because 0:20:43.840 --> 0:20:45.480