Speaker 1: Bloomberg Audio Studios, podcasts, radio news from.
Speaker 2: The Heart where Innovation, money and power.
Speaker 3: Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 4: I'm Caroline Hyde of Bloomberg's World Headquarters in New York
Speaker 4: and Imed Lovelow in San Francisco.
Speaker 1: This is Bloomberg Technology.
Speaker 4: And we are counting you down to the launch of
Speaker 4: Boeing's much anticipated Starliner in Cape Canaveral. The crew of
Speaker 4: two will be the first astronauts to travel aboard the
Speaker 4: so called space taxi. And this launch look has been
Speaker 4: plagued by problems, delayed twice already in the last month
Speaker 4: due to a number of technical glitches. The craft key
Speaker 4: to NASA's plans to take Crewe to and from the
Speaker 4: International Space Station, and a lot is riding on.
Speaker 5: This d Yeah, this has been ten years in the making.
Speaker 5: Boeing's been working on Starliner since twenty fourteen when NASA
Speaker 5: first awarded the contracts as part of the Commercial Crew Program,
Speaker 5: and it's massively behind schedule, seven years, delayed, one point
Speaker 5: five billion dollars or more over budget. Carro and we
Speaker 5: may finally be here and The important context is that
Speaker 5: in that time the contract was also awarded to SpaceX,
Speaker 5: who have flown NASA's staff to the ISS nine times
Speaker 5: and four private missions, and you can see how far
Speaker 5: behind Boeing has fallen.
Speaker 4: Let's just talk about the people. What we're seeing on
Speaker 4: board at the moment, veterans, as we say, this will
Speaker 4: be both of their third time going to the International
Speaker 4: Space Station, and what we've got Sunny Williams, Barry Butch Wilmore,
Speaker 4: can you tell us a little bit more?
Speaker 5: Yes, Suny Williams, hugely experienced astronaut, three hundred and twenty
Speaker 5: two days in space, first time in two thousand and
Speaker 5: six through seven, second time twenty twelve, a number of spacewalks.
Speaker 5: Butch Wilmore one hundred and seventy eight days in space.
Speaker 5: He will be the commander of this mission, been a
Speaker 5: pilot aboard previous missions. And it's a different system to SpaceX, right,
Speaker 5: It's a very different system. They have side boosters, a
Speaker 5: main booster, a second stage booster, and then the.
Speaker 1: Capsule star liner on top.
Speaker 5: So there is a lot here that is not as
Speaker 5: tested as thoroughly as the SpaceX system. But we're getting
Speaker 5: closer to this happening, kra and have to say, I've
Speaker 5: been skeptical that we would get here, given the multiple delays,
Speaker 5: even in the last month alone.
Speaker 1: But star Liner looks clear for launch.
Speaker 6: Ten nine, eight, seven, six, five four three two one.
Speaker 6: Ignition and liftoff of Starliner and Atlas five carrying two
Speaker 6: American heroes, drying a line to the stars.
Speaker 1: For all of us.
Speaker 7: Chick Mader butch boom where they're calling down to the
Speaker 7: Michigan Control here in Houston, that the spacecraft has begun
Speaker 7: rolling into the right attitude for its asset, and it
Speaker 7: got its navigation and control officer here in the room
Speaker 7: seeing good debt on it.
Speaker 8: The stocking massing through max Q or the uh point
Speaker 8: of maximum dynamic dynamic pressure where the forces of air
Speaker 8: friction or highest which in sunny will shortly be passing
Speaker 8: through Monck one, or the speed of sound.
Speaker 5: We've passed through max Q or the moment of maxima
Speaker 5: mero dynamic pressure or stress on the complete craft. One
Speaker 5: point six million pounds of frust generated by the main
Speaker 5: booster and on the side of that the two solid
Speaker 5: rocket boosters. And that's the next thing that's going to
Speaker 5: happen Caro. We're about ninety seconds into this, but at
Speaker 5: the two minute and twenty second mark, those solid rocket boosters,
Speaker 5: the two smaller boosters on the side, generating three hundred
Speaker 5: and forty eight thousand pounds of f us each, they
Speaker 5: will separate and drop off back to Earth and we
Speaker 5: continue on our journey relying on that main booster for
Speaker 5: about two minutes or so, and we can pick up
Speaker 5: from that continuing.
Speaker 4: We of course are going to be keeping an eye
Speaker 4: on Starliner, but just talk to us all about also
Speaker 4: about United Launch Alliances here they of course providing the
Speaker 4: thrust the rocket, and this is ultimately two working seamlessly together.
Speaker 9: Here.
Speaker 5: This is a really important milestone because the Atlas five
Speaker 5: system has flown around one hundred times, the majority of
Speaker 5: that under the ULA umbrella, and a lot of the
Speaker 5: setback is the integrated system. And I believe that what
Speaker 5: we just saw there was the separation of the solid
Speaker 5: rocket boosters, those two that dropped off of the side.
Speaker 5: But this is the first time that we've had some
Speaker 5: serious human spaceflight under the ULA umbrella with Atlas five,
Speaker 5: and it's part of a much bigger integrated system along
Speaker 5: with the star Line. A capsule for which Boeing is responsible. Interesting,
Speaker 5: the shares up three tenths of percent. I'm not sure
Speaker 5: what you'd expect. Maybe a relief rally, maybe not, because
Speaker 5: of how many years behind schedule we are and how
Speaker 5: many billions of dollar over budget we are. But yeah,
Speaker 5: it's an important milestone for that combined system. But we
Speaker 5: add the context that in the meantime since twenty fourteen
Speaker 5: when NASA first awarded the dual contracts to SpaceX and Boeing,
Speaker 5: SpaceX has made this routine and done it many more times.
Speaker 4: And let's just run through some of the differences here
Speaker 4: of what we're looking at compared to SpaceX in terms
Speaker 4: of the nuances of how the flight has approached the
Speaker 4: fact that we're not seeing a reusable rocket here, and
Speaker 4: indeed very small amount of size.
Speaker 5: Differences, really excellent questions. I mean, they're very different launch systems.
Speaker 5: Falcon nine has a fully reusable booster. There are ways
Speaker 5: that they're similar. So the total thrust at sea level
Speaker 5: with Falcon nine is about one point seven million pounds.
Speaker 5: The total combined system of CST one hundred is about
Speaker 5: one point six million pounds of frus. They will both
Speaker 5: travel at similar top speed, so on its way to
Speaker 5: its next stage is of separation, which I'll get to
Speaker 5: in a second. We're traveling maybe seventeen th seventeen thousan
Speaker 5: five hundred miles per hour, similar to Falcon nine. Falcon
Speaker 5: nine does not rely on those two additional side boosters
Speaker 5: or the two additional solid rocket boosters like the CST
Speaker 5: one hundred system does. And then there are additional stages
Speaker 5: of separation and flipping them with bits of paper all
Speaker 5: over the place here because I want to make sure
Speaker 5: we get this right. Four minutes in and the next
Speaker 5: key milestone is that the Atlas booster, that main booster,
Speaker 5: will cut off its engines, and from there the centaur,
Speaker 5: which is the secondary stage, will separate off from the
Speaker 5: main booster.
Speaker 4: So ultimately we're waiting for that four minutes thirty four
Speaker 4: mark when we do see that separation.
Speaker 10: And as we can see.
Speaker 4: Thus far, four minutes thirty two seconds in ed, this
Speaker 4: seems to be going smoothly and much to the release
Speaker 4: of here we are.
Speaker 10: We can take a look.
Speaker 4: And that was a separation, correct, That was the Atlas
Speaker 4: center of separation. From what we understand, we're what but
Speaker 4: four minutes and fifty seconds.
Speaker 5: In exactly that's what is called Centaur or basically the
Speaker 5: second stage booster pulling away from the main Atlas booster
Speaker 5: in a stage called Becho or Atlas booster engine cut off.
Speaker 5: The next big sort of milestone is in about ten
Speaker 5: minutes time, i'd say, which is where Starliner, the capsule
Speaker 5: sitting atop of Centaur, will separate on and send those
Speaker 5: two astronauts on their way. But it's just incredible the
Speaker 5: images that we've seeing. You know, space is hard, you know,
Speaker 5: and Boeing has come in for a lot of criticism.
Speaker 5: It is one point five billion dollars over budget, as
Speaker 5: we say, the stock now modestly lower.
Speaker 1: Basically flat.
Speaker 5: But everything is nominal, as they say in the space industry,
Speaker 5: it's going to plan and we finally got here.
Speaker 4: We have and space is hard, it's costly, and we
Speaker 4: want to go to someone who really understands the intricacies
Speaker 4: of trying to work with private and public integration of
Speaker 4: getting more humans to the International Space Station station as
Speaker 4: an airs with us exert of KORRO for more.
Speaker 10: Senior fellow at Harvard's Belfare Center.
Speaker 4: Former White House Assistant Director for the Space Policy former
Speaker 4: NASA executive as a I don't know who else would
Speaker 4: be more perfect on a day such as this to
Speaker 4: weigh in and thus far this is going successfully. How
Speaker 4: important is this to the US space ecosystem?
Speaker 3: It is critically important.
Speaker 1: You know.
Speaker 11: What we're seeing here is American ingenuity, and the success
Speaker 11: of this launch so far indicates that we continue to
Speaker 11: lead as a nation because we're no longer in a
Speaker 11: space race today. We've got over ninety space programs globally,
Speaker 11: and so continued leadership is important for the US to
Speaker 11: keep our edge, to continue to pioneer.
Speaker 9: And this is just a beautiful site.
Speaker 5: Frankly, as you contributed in your career to dozens of
Speaker 5: different NASA missions since twenty fourteen when NASA first awarded
Speaker 5: those contracts, and the much bigger picture of the commercial
Speaker 5: crew program, it's been super frustrating to see Boeing take
Speaker 5: ten years to get to this point. SpaceX has pulled ahead,
Speaker 5: pulled ahead massively. How will that have gone down inside
Speaker 5: of NASA? How is staff at the agency going to
Speaker 5: be viewing this moment?
Speaker 11: There's a lot of celebration and a lot of relief
Speaker 11: because what you're seeing here is the resilience of scientists
Speaker 11: and engineers over as you mentioned, a decade, and one
Speaker 11: of the critical skills an engineer has is the ability
Speaker 11: to be disappointed for three seconds and then move on
Speaker 11: to find a solution to the next problem. And we
Speaker 11: witnessed it for this launch in particular, over the last month.
Speaker 11: And that's what's happened over the last decade. And NASA
Speaker 11: is experienced at this because over sixty years of putting
Speaker 11: together missions and spacecraft, we've had our share of challenges,
Speaker 11: and so we understand and we are frankly cheering going
Speaker 11: on today.
Speaker 4: I'm very helpful with you just sort of outlined some
Speaker 4: of the ways in which NASA feels its own issues.
Speaker 4: When I just want to outline some of the concerns
Speaker 4: we had had leading up to this particular launch. There
Speaker 4: was a pressure valve that was a concern with the
Speaker 4: ULA side of the equation. The rocket had a small
Speaker 4: helium leak that seems to have been deemed not a worry,
Speaker 4: and so therefore that helium leap didn't need to be
Speaker 4: fixed for this mission to continue.
Speaker 10: Then previously we saw.
Speaker 4: Of course, the whole mission was called off but four
Speaker 4: minutes before launch, and that was all based on a
Speaker 4: launch computer being somewhat delayed. There is so much intricacy
Speaker 4: when it comes to these sorts of humongous, very costly
Speaker 4: launches as in A and I want to understand from
Speaker 4: real perspective, how important is to have more private players
Speaker 4: in the game. How many more do we need than
Speaker 4: ultimately the geopoly we have at the moment, as many.
Speaker 3: As we can have.
Speaker 11: You know, this is a very challenging business, and we
Speaker 11: continue to support lots of smaller companies, lots of rocket
Speaker 11: companies that are focused on launching cargo, smaller cargo, smaller
Speaker 11: spacecraft into space. And there is a lot of exciting opportunities,
Speaker 11: not just in the US, but in other countries. And
Speaker 11: it's important because when we have launched become more ubiquitous,
Speaker 11: then the idea of space tourism becomes even accessible and
Speaker 11: your children may one day, you know, take a field
Speaker 11: troup to space because the opportunities to fly are available
Speaker 11: and accessible.
Speaker 5: For our Bloomberg Technology audience, what we're looking at on
Speaker 5: our screen is a computer generated image giving the approximate
Speaker 5: status of the star liner caps you are attached to
Speaker 5: the stent or second stage booster in about five minutes time,
Speaker 5: those two will separate in the star Liner capsule as
Speaker 5: an A will continue on its journey to the International
Speaker 5: Space Station, about a twenty four hour process. The International
Speaker 5: Space Station makes me think a lot about the future.
Speaker 5: It's due to be decommissioned in twenty thirty, and so
Speaker 5: today is a massive success. Credit to Boeing to finally
Speaker 5: achieve this. As it stands, the stockdown four tenths of
Speaker 5: a percent, But it seems like the star Liner system
Speaker 5: has a limited shelf life. They might get what six
Speaker 5: missions before ISS is decommissioned or so do you see
Speaker 5: a future for Boeing in the passage of humans from
Speaker 5: Earth into orbit and beyond.
Speaker 10: Yes, So most.
Speaker 11: Companies don't share some of the research and development that
Speaker 11: they are currently working on while they are completing other
Speaker 11: complex missions. And as you notice, this is an effort
Speaker 11: that is combining multiple companies ula Boeing and other thousands
Speaker 11: of smaller businesses and contractors who have helped to make
Speaker 11: this happen. And so with the retirement of the International
Speaker 11: Space Station in twenty thirty, we are likely to see
Speaker 11: not just commercial US owned space stations replace the International
Speaker 11: Space Station, but also increase commercial launch activity. So the
Speaker 11: space sector continues to be described as emerging as a
Speaker 11: technological space. However, what we've seen and.
Speaker 1: What we've witnessed is that.
Speaker 11: It takes sometimes thirty years to emerge, and so some
Speaker 11: of these companies continue to work on this, including Boeing,
Speaker 11: and they might surprise us with what they have in
Speaker 11: store for future commercial space stations.
Speaker 4: Asn't your focus is often sustainability here efficiency Ultimately, how
Speaker 4: sustainable is Boeing ula visa v what we see from SpaceX?
Speaker 4: How much do you think that ultimately sustainability can be
Speaker 4: achieved and a clean process of putting a whole ton
Speaker 4: of satellites into low Earth orbit as well?
Speaker 11: Sustainability is a very tough challenge in space, and rightly so.
Speaker 11: Reusable rockets are more sustainable than a rocket with a
Speaker 11: single use. However, we have to think about the systems
Speaker 11: that are developed. If this has six flights in it,
Speaker 11: and after a development cycle that was at least ten
Speaker 11: years long, getting at least six launches out of it
Speaker 11: is a helpful start to a future where we will,
Speaker 11: with hope, had an increased amount of reusable rockets. Now
Speaker 11: with spacecraft and satellites in space. We have a whole
Speaker 11: slew of regulatory rules around when satellites can deorbit so
Speaker 11: that they don't end up a space debris or space junk.
Speaker 11: And so we have a process in place, and companies
Speaker 11: do help to mitigate and help to ensure that we
Speaker 11: have as little debris as possible in space while we
Speaker 11: try to clean up everything that's there currently.
Speaker 5: As any I'd like to spend a moment thinking about
Speaker 5: the men and women of NASA, and particularly the control
Speaker 5: staff at the agency. What's kind of interesting about CST
Speaker 5: one hundred is that it is NASA control teams that
Speaker 5: are running the mission alongside Boeing. SpaceX has its own
Speaker 5: control teams. So for your former colleagues and friends at NASA,
Speaker 5: it's also been a very long journey for this system
Speaker 5: and project, even though we focus on the Boeing component
Speaker 5: of it, just explain sort of the depth of talent
Speaker 5: and those colleagues you know that have worked on this project.
Speaker 11: You've got people who have been at the agency for
Speaker 11: at least two decades, people who have worked in mission
Speaker 11: control for three decades. You've got people skilled in physics,
Speaker 11: in chemical engineering, and aerospace engineering, in a plethora of
Speaker 11: engineering disciplines who have time and time again supported even
Speaker 11: the Shuttle program and are today supporting this Boeing Starliner.
Speaker 11: You've got colleagues who have helped to ensure that the
Speaker 11: International Space Station and the astronauts had visit it and
Speaker 11: remain in constant communication with Houston and the ground. And
Speaker 11: you've got lots of NASA leaders who have been with
Speaker 11: the agency, some for almost four decades. So there is
Speaker 11: this continuity and in engineering and leadership that we see
Speaker 11: at NASA today.
Speaker 4: As I know, we're just about to start witnessing I
Speaker 4: believe a key moment star line of separation as it
Speaker 4: ed coming up.
Speaker 5: Yeah, star line of separation coming up where the star
Speaker 5: line a capsule separate from the central second stage. That's
Speaker 5: probably happening as we speak. But as you can see
Speaker 5: in your screen, we're relying on a computer generated image.
Speaker 5: So any second there is your computer generated representation.
Speaker 1: What timing that was?
Speaker 5: We planned that one, and before that you had had
Speaker 5: the central main engine cut off happened prior to it.
Speaker 5: There's a really important technological distinction, right carry between what
Speaker 5: we're so used to with SpaceX and Falcon nine and
Speaker 5: this CST one hundred system, which is the only reusable
Speaker 5: part of CST one hundred is the star line of capsule.
Speaker 5: The secondary booster's main booster centaur are not recoverable in
Speaker 5: the same way that the Falcon nine booster is. But
Speaker 5: as we I keep saying, let's repeat it one point
Speaker 5: a time, so far everything is nominal, meaning everything is normal.
Speaker 5: This is going to plan bowing stocks down four tenths
Speaker 5: of percent modestly. But it's now a twenty four hour
Speaker 5: journey from this point to the International Space Station, it is.
Speaker 4: And asne this is such I'm sure contained exuberance and
Speaker 4: euphoria going on in Cape Canaveral at the moment, But
Speaker 4: there is much to look forward to, not only, of course,
Speaker 4: these within the next twenty four hour process, these two
Speaker 4: veteran astronauts arriving at the International Space Station.
Speaker 10: But you mentioned how maybe ed andized children.
Speaker 4: Will be visiting these outer parts of space soon enough
Speaker 4: on a consumer basis.
Speaker 10: And I think what's happening over the.
Speaker 4: Weekend, and Virgin Galactic I think is still planning for
Speaker 4: their net particular trip. All you seeing things going as
Speaker 4: well as you'd like.
Speaker 11: Yes, this is extremely challenging. We have to remember that
Speaker 11: astronauts have typically been marines, the best of the best,
Speaker 11: and they train for at least a decade at.
Speaker 3: NASA before they fly.
Speaker 11: And the fact that we could simplify that process to
Speaker 11: allow citizens and non marines and non air force pilots
Speaker 11: and non rocket scientists to fly and even conduct some
Speaker 11: experiments on some of these flights is really encouraging because
Speaker 11: as we continue, it reminds me of the first days
Speaker 11: of history and the first.
Speaker 7: Days of aviation.
Speaker 11: But as we continue to see these flights happen, then
Speaker 11: what we hope to see is against school field trips
Speaker 11: to a future private commercial space station or trip around
Speaker 11: the and that is exciting to behold. I believe we
Speaker 11: will see that in this generation.
Speaker 5: We're looking at your live shot right now, and we've
Speaker 5: been relying on sort of computer generated images. It's interesting
Speaker 5: or I observe that we don't have the sort of
Speaker 5: as a reliable camera feed with Starliner and CST one
Speaker 5: hundred is perhaps we do with Falcon nine. Even so,
Speaker 5: everything from the NASA feed tells us that we're nominal
Speaker 5: so far as we've really enjoyed having you with us
Speaker 5: on Bloomberg technology for this launch. Just your parting thoughts
Speaker 5: on this moment, but I guess also whether or not
Speaker 5: it will be a catalyst for broader progress in commercial
Speaker 5: space beyond what we've we've relied on SpaceX to bring.
Speaker 11: Now, the global significance of this is large. We have
Speaker 11: young engineers locally who and nationally who will be inspired,
Speaker 11: but we also have rocket entrepreneurs who will be inspired,
Speaker 11: and other nations to start their rocket programs and companies
Speaker 11: to join space agencies and other countries who may decide
Speaker 11: this is the time to start their own space program.
Speaker 11: And so with this inspiring and exciting successful feat, we
Speaker 11: can only hope to see more involvement globally, and what
Speaker 11: that means for the commercial space sector is more resources
Speaker 11: and a multiplication of capital, and more interest in space
Speaker 11: from investors and others who are interested in technology.
Speaker 4: We're at large over sixty ness emissions and programs. You're
Speaker 4: involved with yourself, twenty years of course of US government service.
Speaker 4: Perfect guest to live through some of these incredible images
Speaker 4: that we see now of what's occurred with the ULA
Speaker 4: and Boeing. As Ana Zokora, thank you for joining us
Speaker 4: senior fellow at harvard'st Welfa center. Let's get back to hearth.
Speaker 4: What's happening with the markets. Very briefly, we're saying, well
Speaker 4: going on the downside. On the high side, is NAS
Speaker 4: that big tech leading the charge up more than one
Speaker 4: point two percent some mixed data today Service is still
Speaker 4: showing really resilient US economy, but maybe some calling jobs
Speaker 4: market data helping feed a bond market rally that we
Speaker 4: see down three basis points on the tenure important Rake
Speaker 4: cup happening in Canada. The dollar is hied versus the looney.
Speaker 4: We're currently upper quarter of percent. But then dig into
Speaker 4: individual stocks for US.
Speaker 1: Yeah, earning is a big part of the story.
Speaker 5: CrowdStrike beating in the quarter, really bucking the trend of
Speaker 5: a pullback in cyber spending one of the beneficiaries of
Speaker 5: Microsoft missing the mark there, and then HPE surging. There's
Speaker 5: a clear tailwind from AI infrastructure build out.
Speaker 1: We've talked this about this a lot.
Speaker 5: It's not just the chips, but it is the casing
Speaker 5: and the rest of the server components, which HPE is
Speaker 5: a contributor to those names. Wow, that was fabulous. I
Speaker 5: really enjoyed doing that with you, Caroline. What a moment
Speaker 5: in commercial space flight will be right back. This is
Speaker 5: Bloomberg technology.
Speaker 4: Indian Prime Minister Lorandra Modi has won crucial backing from
Speaker 4: two key allies in his coalition, allowing him to form
Speaker 4: a government and extend his decade in power. Joining US
Speaker 4: now is Giant Krishna, a non resident senior Fellow at
Speaker 4: the chair in US India Policy Studies over at the
Speaker 4: Center for Strategic and International Studies and Giant what maybe
Speaker 4: will have to change in the next government under Modi
Speaker 4: is perhaps more of an equal distribution of economic progress,
Speaker 4: particularly when it comes to the jobs market. And I'm
Speaker 4: interested as to whether technology will be a solve for
Speaker 4: that in some way.
Speaker 3: Yeah, I would reckon.
Speaker 12: So see, this is going to be a collision verman
Speaker 12: because the BJP, which is led by the Prime Minister Movie,
Speaker 12: has not got a majority of its own. They have
Speaker 12: got two ninety three seats along with other partners which
Speaker 12: contested the elections together, and the opposition Alliance has got
Speaker 12: two hundred and thirty two seats. So it's not a
Speaker 12: clear majority. It's going to be it's a return of
Speaker 12: the country to collision politics. Many would think that you know,
Speaker 12: technology decisions, business decisions, reforms would get slow down. But
Speaker 12: that may not be the case all the time. If
Speaker 12: you look at the history of Indian politics, the collision
Speaker 12: governments have delivered better on reforms.
Speaker 3: The most transformative.
Speaker 12: Reforms if you look at which have happened since the
Speaker 12: last seventy six years when India became independent, have been
Speaker 12: in the year nineteen ninety one, when the government it
Speaker 12: was a minority government actually not even a collision government
Speaker 12: head by the Prime Minister Nasimau with doctor Manmuhan saying
Speaker 12: the former Prime minister who was the finance minister, and
Speaker 12: when the financial economic reforms happened in the country. Those
Speaker 12: have been the most transformative reforms. But I think most
Speaker 12: of the collision governments have delivered better actually on the
Speaker 12: reforms process and have met the business expectations better cont
Speaker 12: ready to the contrady to the popular belief.
Speaker 5: So we've just been carrying Boeing's mission on cs T
Speaker 5: one hundred into space. I think we're going to get
Speaker 5: to India's space ambitions. We've reflected on this program about
Speaker 5: Modi's open arms to those working in artificial intelligence, but
Speaker 5: he ran on business friend friendly policy platform right in
Speaker 5: the coalition scenario. Is he going to be able to
Speaker 5: carry through with that as he would otherwise have done
Speaker 5: where he'd have a majority himself.
Speaker 12: So I would believe so if you look at the
Speaker 12: Prime Minister Mody's party BJP's election manifesto, you know, they've
Speaker 12: talked about the many things they've talked about, artificial intelligence mission,
Speaker 12: the mission, they've talked about having a national quantum mission.
Speaker 12: And since you're talking about space, they've talked about the
Speaker 12: first human spaceflight mission that you know, government is voted
Speaker 12: to power and they have been voted to power although
Speaker 12: with the majority they're going to embark up on they've
Speaker 12: also talked about having an Indian astronaut on on on Moon,
Speaker 12: you know, and the Prime Minister has been very upbeat
Speaker 12: about you know, the space mission.
Speaker 4: Uh.
Speaker 12: You know, if you look at the American company SpaceX,
Speaker 12: you know their their their parties with the Indian government.
Speaker 12: There have been some changes in the FDI policy, the
Speaker 12: the foreign direct Investment policy to accommodate you know, the
Speaker 12: the genuine business aspirations.
Speaker 3: So I would I would.
Speaker 12: Feel that, you know, there's a huge amount of focus
Speaker 12: uh in in several areas, differ difference technologies, semiconductors, space,
Speaker 12: telecom and and and various sectors. There's a huge amount
Speaker 12: of and I don't think that's slowing down at all
Speaker 12: with the with the colligen government, which are we you know,
Speaker 12: government having a majority of its own Just.
Speaker 4: Briefly, we talk about India a lot in the context
Speaker 4: of homegrown big technology services companies, but largely big companies
Speaker 4: coming to India to invest. What about the bench capital ecosystem,
Speaker 4: what about startup culture? Is that going to be flourishing
Speaker 4: under in the new government?
Speaker 10: Do you think?
Speaker 3: See?
Speaker 12: Uh, you know, I mean one thing is very clear,
Speaker 12: whichever government comes to power in India. I mean there
Speaker 12: is a certain continuity in the in the in the economy,
Speaker 12: in the in the in the in the space reforms process,
Speaker 12: you know, in being friendly to the business community and
Speaker 12: and so on and so forth.
Speaker 3: I don't see that slowing down, you know, at all.
Speaker 12: So I think, you know, there there are several sectors,
Speaker 12: you know, if you look at difference itself. So one
Speaker 12: difference is India should not no longer be seen as
Speaker 12: a as a low cost back office destination.
Speaker 3: I think I think.
Speaker 12: Major financial powers all over the world have to look
Speaker 12: at cope co developing and co producing with India.
Speaker 3: I think that is gone of the days.
Speaker 12: When when you know uh, you know you, you give
Speaker 12: imponents to us, we assemble it leveraging our cheaper manpower
Speaker 12: and delivered. I think, I think we have to have
Speaker 12: a role in in in the development process, in the
Speaker 12: research and development space and then coal manufacture.
Speaker 3: I think that is going to be a.
Speaker 12: Genuine win win between developed countries like the US and India.
Speaker 3: That's what I would feel, you.
Speaker 5: Know, Giant Krishner of the Center for Strategic and International
Speaker 5: Studies important conversation on India.
Speaker 1: Thank you.
Speaker 10: Intel.
Speaker 4: It's just agreed to sell a forty nine percent equity
Speaker 4: interest in a plant that's building an Ireland to Apollo
Speaker 4: Global Management eleven billion dollars. Intel will have a fifty
Speaker 4: one percent controlling interest in the joint venture and will
Speaker 4: retain full ownership and operational control of it.
Speaker 10: But Rimos dandy Berger sat down with.
Speaker 4: Apollo Co President Scott Kleinman on the sidelines of the
Speaker 4: Super Return private equity event in Berlin to ask him
Speaker 4: about it.
Speaker 3: I think you're going to see more and more of
Speaker 3: this from Apollo, absolutely more from a follow but but
Speaker 3: in general, just the need for this type of capital
Speaker 3: is insatiable.
Speaker 5: Okay, that was the finance side. Let's get the chip
Speaker 5: side with Inveagh in King. Look, this is quarter pack
Speaker 5: Gelsinger's plan of smart capital. Intel's money, the government's money,
Speaker 5: and then someone else's money to achieve a transformation.
Speaker 2: Yeah.
Speaker 13: I mean the key thing and what you just said
Speaker 13: is Intel's money. And the simple factor is Intel doesn't
Speaker 13: have that much money anymore. It has more than fifty
Speaker 13: billion dollars in debt, it has negative free cash flow,
Speaker 13: and as we've seen, its earnings have been under pressure.
Speaker 13: So it needs external capital to protect that balance sheet
Speaker 13: as much as it can. Hence arrangements like this.
Speaker 4: It's interesting in that we've seen other interesting relationships being born.
Speaker 4: You've got NXP of course, chip maker over in Europe
Speaker 4: teaming up with TSMC to be building out in Singapore.
Speaker 4: Are we just going to have to see more coming
Speaker 4: together of capital and.
Speaker 10: Alliances like this because it's so expensive.
Speaker 9: Yeah, no, you nailed it.
Speaker 13: I mean these things this is not a hobby, right,
Speaker 13: I mean these things cost. A plant can cost twenty
Speaker 13: billion dollars and its useful life is not that long, right.
Speaker 13: A bit like me, right, you know, ideas and it's
Speaker 13: gone right. You need to put a lot of money
Speaker 13: into this.
Speaker 10: Need more money into Ian King.
Speaker 13: Yeah, no, I mean that, you know, the cost of
Speaker 13: capital is really important when you're in an expansion is
Speaker 13: phase like Intel is in right now. And you know,
Speaker 13: Gelsinger has a lot of pressure on him on all sides,
Speaker 13: so he's absolutely going to have to do more of
Speaker 13: this kind of thing.
Speaker 4: And the customer masie in and we heard any more
Speaker 4: in terms of orders of these future well supplies being made?
Speaker 3: Yeah, I know.
Speaker 13: And again that's that's the big question, right. We need
Speaker 13: a big customer, We need an in video, we need
Speaker 13: even an AMD to say, hey, Intel, we want to
Speaker 13: give you orders for all of these brand new factories
Speaker 13: that you're investing in, for all of this great new
Speaker 13: manufacturing that you're putting in place. So far, we haven't
Speaker 13: heard that. Intel's explanation as well, they don't want us
Speaker 13: to talk about it. But trust me, we've got plenty.
Speaker 13: We've got plenty lined up and at the moment the
Speaker 13: market is kind of in a wait and see moad
Speaker 13: on that one.
Speaker 5: You say, we need an invidio so important to be
Speaker 5: crystal clear about Intel's talking about He's talking about customers,
Speaker 5: so it can be a contract manufacturer for them. And
Speaker 5: at the same time, Gelsinger wants them to have their
Speaker 5: products be at the cutting edge, the ones that they
Speaker 5: offer for PC data center.
Speaker 1: How do you pull off both exactly?
Speaker 13: And that's attention that is at the heart of this project,
Speaker 13: right This is a company that has been brutally competitive
Speaker 13: for multiple decades, that has made every other company out
Speaker 13: there suffer in its wake, and now it's saying, hey, guys,
Speaker 13: give us your best stuff.
Speaker 2: We'll make it for you.
Speaker 5: Bloomberg z E and King, who leads our semiconductor coverage
Speaker 5: here at Bloomberg Technology, and Intel continuing to be in
Speaker 5: the news headlines on all sides of this business, the
Speaker 5: foundry of fab and then the product side as well.
Speaker 5: Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
Speaker 4: Caroline Heid to New York, which check on these markets
Speaker 4: for you, because we are up, up and away. You're
Speaker 4: looking at the NASDAK today. We're currently still up more
Speaker 4: than a percentage point one point four percent.
Speaker 10: On the Nasdaq one hundred.
Speaker 4: As well, Big Tech managing to lead a charge amids
Speaker 4: mixed economic data. It's like cooling of the jobs market,
Speaker 4: which probably helps demand for bonds.
Speaker 10: At the moment, fels coming down.
Speaker 4: Will we see the fud FED able to cut later
Speaker 4: into the year. We're off by four basis points four
Speaker 4: point two eight's where we trade on the tenure. There's
Speaker 4: still resilient services sector and business activity here in the
Speaker 4: United States. Bitcoin on the one point six percent, we're
Speaker 4: at a seventy one thousand level. If we're clips to
Speaker 4: seventy two thousand, we go to more record highs.
Speaker 10: Well, we heard, of course from some of.
Speaker 4: The key players at Galaxy Digital yesterday saying that we
Speaker 4: can be at one hundred thousand dollars by the end
Speaker 4: of the year. Move on, have a look at what's
Speaker 4: happening on the micro The individual names are on the move.
Speaker 4: I shine it like a sort of an AI theme
Speaker 4: and indeed a chip theme as well.
Speaker 10: We stick with the ASML.
Speaker 4: There's of course Dutch company trading here in the US
Speaker 4: in terms of its ADRs, but also over in Europe
Speaker 4: on the higher side more than seven percent. This is
Speaker 4: we see that yes, it will be delivering its latest
Speaker 4: equipment making facilities over to TSMC. When you Intel have
Speaker 4: already taken delivery in Oregon in December. Then we want
Speaker 4: to see the latest versions of the CHIB equipment being
Speaker 4: shipped over TSMC. Thats just us high as Cisco though
Speaker 4: just add an investor event and am as a kind
Speaker 4: of mixed on. Basically, this is a show me story,
Speaker 4: a tell me story, a still longtime investment coming from
Speaker 4: Cisco to ensure that they are the networking gear of
Speaker 4: choice when it comes to getting in the likes of focus.
Speaker 4: On AI particularly, we're down two point eight percent. Some
Speaker 4: worries about how much really AI will add to their
Speaker 4: overall profitability in the here and now, and I want
Speaker 4: to talk about AI adding to a profitability and revenue
Speaker 4: in the here and now.
Speaker 10: Because boys are helping Hpe.
Speaker 4: We're up eleven percent after its numbers came out and
Speaker 4: ED this is clearly a sign of.
Speaker 10: Revenue returning to growth for the quarter.
Speaker 4: We're also seeing, of course, the idea that AI systems
Speaker 4: is where we're really seeing almost a billion dollars in
Speaker 4: revenue being done on a quarter, the fact that they're
Speaker 4: tripling their enterprise AI customer base. But we want to
Speaker 4: see how much margin is coming out of that ED too.
Speaker 5: I think that's exactly the focus of the market this morning.
Speaker 5: Luckily joining us to discuss is Hewlett PACKARDT Enterprise CEO
Speaker 5: Antonio Erry. I look at HPE and the stock performance,
Speaker 5: and you're not getting the credit that Dell is or
Speaker 5: super Micro. I see Jensen one, pat Michael Dell on
Speaker 5: the back and say, if you need a scalable service solution,
Speaker 5: you phone Michael Dell. But your margins are better. Are
Speaker 5: you finally starting to get some credit for the role
Speaker 5: you're playing in the AI infrastructure build out?
Speaker 2: Well, good morning Ed then, Caroline, great to be here
Speaker 2: with you today.
Speaker 14: I completely agree with you that HB is not getting
Speaker 14: the do credit for the potential of what we do
Speaker 14: for AI and the results we have been delivering, including
Speaker 14: this past quarter. So when we think about our quarters,
Speaker 14: number one, we beat the revenue and we beat EPs,
Speaker 14: nong appps, and that was all driven by the I
Speaker 14: system revenue conversion to a point, Karaba made almost a
Speaker 14: billion dollar week, exceeded nine hundred million dollars, and we
Speaker 14: have a terrific pipeline which is a multiple multiples of
Speaker 14: the current backlog. And now we start seeing the uptick
Speaker 14: in enterprise which obviously HP has a significant presence, but
Speaker 14: the reality is that we have unique capabilities. When I
Speaker 14: think about the capabilities HP has in this particular inflection
Speaker 14: point AI number one, we now have to run AI
Speaker 14: a scale we have done it for decades, has been
Speaker 14: more than a supercomputer now in generative AI, and that
Speaker 14: comes on the back of our unique expertise in IP
Speaker 14: intellectual property, so we know how.
Speaker 2: To build these systems, have to cool it.
Speaker 14: And then we have a unique manufacturing footprint for water cooling.
Speaker 14: As we think about the next generation of silicon will
Speaker 14: require one hundred percent of really cooling and HP is
Speaker 14: one of those companies can do it at all.
Speaker 2: And the last panel list is the services piece.
Speaker 14: And when you talk about profitability of AI, think about.
Speaker 2: As a complete pull through.
Speaker 14: Is not just the infrastructure side, is also the services side.
Speaker 14: And we had a very solid margin performance in our
Speaker 14: AI systems, which is part of the server segment, where
Speaker 14: we deliver eighteen percent growth year over year and we
Speaker 14: deliver an eleven percent operating profit in the guidance we
Speaker 14: provide eleven to thirteen.
Speaker 4: We'll CFO talking about prudent cost discipline. Is that what
Speaker 4: helps with the margin as well, Antonio, because look, let's
Speaker 4: call out JP Morgan, the analyst over there this morning
Speaker 4: saying the results in the outlock echoed similar AI server
Speaker 4: story of revenue with limited margins. They're not hearing you
Speaker 4: on the fact that you've got stronger margins.
Speaker 14: I think it's a combination of three unique things, Caroline.
Speaker 14: Number one is prudent business discipline. We have been on
Speaker 14: that journey for our own time. We pursue deals that
Speaker 14: we can add value, that we see path to prof
Speaker 14: fit ability, and that we can drive pull through.
Speaker 2: That's number one. Number two is our complete portfolio.
Speaker 14: And so one of the key areas that I think
Speaker 14: the market doesn't understand is that we don't.
Speaker 2: Just ship servers.
Speaker 14: We actually ship the server we installed, and in many
Speaker 14: cases we run it as a part of our HP
Speaker 14: green Lake platform and that includes an enormous amount of services.
Speaker 14: That's why you see HP green Lake also growing rapidly
Speaker 14: and the fastest growing area of HP green Lake this passport,
Speaker 14: which grew thirty nine percent year over yere is actually
Speaker 14: AI and last panel list is our ongoing brutal management
Speaker 14: or cost across the company. And also we are now
Speaker 14: deploying AI in our own company.
Speaker 10: Ah, that's interesting.
Speaker 4: So you're deploying within your company, Jenners Fay, I'm sure,
Speaker 4: but who's coming to you? Who are the clients, because
Speaker 4: I'm actually surprised that where else have you been focusing
Speaker 4: if it's not enterprise?
Speaker 2: Well there is.
Speaker 14: I think about AI in three unique Segmentsnumber one, obviously,
Speaker 14: is what I call the model builders. These are the
Speaker 14: people who are building the models and need an enormous
Speaker 14: amount of acceleraty the computer to train the models from
Speaker 14: hundreds of billions of parameters to now obviously a trillion
Speaker 14: plus parameters. And in that we also mentioned yesterday that
Speaker 14: Microsoft is extending the Azure AI cloud to HP infrastructure
Speaker 14: and to serve the clients. And one of the clients
Speaker 14: just happened to be Open AI. So that's a great
Speaker 14: example of it. But there's also other service providers like Scale,
Speaker 14: Weil in France and many others we support. That's one segment,
Speaker 14: and obviously that's what a lot of the demand has been.
Speaker 14: The second segment, which is growing now, is actually sovereign cloud,
Speaker 14: and the third is enterprise.
Speaker 5: Antonio, there is an interesting tension happening in your industry
Speaker 5: and with your partners. You know, Lisa SU and AMD
Speaker 5: and Jensen and Vidia principally have the GPUs and CPUs right,
Speaker 5: but they want to be systems vendors, and so in
Speaker 5: the context of a server, there's not a lot left
Speaker 5: over after that. But they don't have the experience in
Speaker 5: the sales channels that you guys operate in. Business is
Speaker 5: big and small enterprise. How are you able to convince
Speaker 5: your investors that you can all grow together when you
Speaker 5: know that your biggest partners on the tech side want
Speaker 5: to do more stuff themselves.
Speaker 14: Yeah, and we have obviously decides of experience in doing so.
Speaker 2: I think it's a multiple things. Number one. Obviously, we
Speaker 2: work with them to make sure their IP with our
Speaker 2: IP deliver.
Speaker 14: A better experience and a better performance. And so we
Speaker 14: co engineered a lot of things and going to see
Speaker 14: here with Nvidia in particular, are the HP Discover in
Speaker 14: Las Vegas an enormous amount of innovation. We'll bring it
Speaker 14: to the market, so I hope you can join us
Speaker 14: and take a look at that. But also with AMD,
Speaker 14: obviously we have long standard relationship. In fact, some of
Speaker 14: the large supercomputers within the plant and of energy has
Speaker 14: been built together.
Speaker 2: With A and D.
Speaker 14: What we will bring is the infrastructure expertise, so it's
Speaker 14: not just the silicon building a server and even we're
Speaker 14: chatting before the calls actually about the whole infrastructure and
Speaker 14: in that now we have unique ip when it comes
Speaker 14: down to air cool mixed cooling and directly could cooling,
Speaker 14: that's very hard to do. Second piece, you need the manufacturing.
Speaker 2: Capability to do so.
Speaker 14: HP today has one of the largest water cool manufacturing
Speaker 14: food print in the world. Okay, and as you follow
Speaker 14: the roadmap that will be necessary in last panel list
Speaker 14: obviously is the services piece because this system required a
Speaker 14: lot of maintenance and a lot of kind of TLC
Speaker 14: if you will, and HP knows how to do that scale.
Speaker 5: So Antonio Jensen one will be on stage with you
Speaker 5: and he'll give you a public endorsement.
Speaker 1: Is that right?
Speaker 14: No, I think what's going to happen is Jensen and
Speaker 14: I are super excited to announce solutions together that will
Speaker 14: advance the adoption. There's amazing technology and obviously that's where
Speaker 14: the two companies come together, but also doing in a
Speaker 14: spectacular venue which will be at the Sphere, and so
Speaker 14: the way we're going to showcase all that innovation is
Speaker 14: going to be very engaging and I think you know
Speaker 14: the first of a kind.
Speaker 4: It's been spending some time in Las Vegas going again.
Speaker 4: You're back on the Enterprise CEO, Antonio and Narry. It's
Speaker 4: great to have you with us today. Thanks for joining
Speaker 4: on the earnings. I mean, while coming up, we're going
Speaker 4: to talk about the private side of investment right now.
Speaker 4: Ken elephants with us his partner at Sorrence and Capital
Speaker 4: for today's VC Spotlight. As next this is really technology.
Speaker 15: The biggest thing we're going to see in our lifetime
Speaker 15: from today will be the picks and shovels driving AI,
Speaker 15: and that's around the data center space. Go figure out
Speaker 15: how to get exposure to hyperscalers, which we think will
Speaker 15: be the biggest winner in what AI and data storage
Speaker 15: will do for the world.
Speaker 4: He manages the money of the tech billionaires. Iconic founding
Speaker 4: partner taveshmacm there speaking with David Rubinstein on this week's
Speaker 4: Bloomberg Wealth episode about some of those AI investing opportunities.
Speaker 4: Let's to dig into how AI is changing everyone's landscape
Speaker 4: for VC investing the Spotlight with Ken Elephant, partner at
Speaker 4: Sorenson Capital, Ken, I imagine even in the focus era
Speaker 4: that you have in cyber it's all about general to AI.
Speaker 9: Yeah, pleasure to be here, Thanks for having me.
Speaker 16: Yes, As you said before the break, I'm a partner
Speaker 16: here at Sorts and Capital. We're an early stage and
Speaker 16: growth stage venture capital firm with over one point five
Speaker 16: billion dollars of assets under management. We focus on investing
Speaker 16: in enterprise software and I focus on the cybersecurity part
Speaker 16: of that. So AI is a big thing, like you mentioned,
Speaker 16: and certainly in security, AI is an important aspect. There's
Speaker 16: really two areas where AI can be applied in security.
Speaker 16: The first is is that AI needs to be used
Speaker 16: inside of security products. So imagine today most enterprises have
Speaker 16: a security operations center.
Speaker 9: What happens is is you have a network.
Speaker 16: Security person, you have a host security person, you have
Speaker 16: a cloud security person, and all these people need to
Speaker 16: work very closely together to stop attacks.
Speaker 9: AI can be.
Speaker 16: Used to really leverage all of the information make it
Speaker 16: a lot quicker to respond to these alerts.
Speaker 9: So that's one way.
Speaker 3: Yeah.
Speaker 5: The thing that I've struggled on the stand for a
Speaker 5: few weeks now for bench capsists that invest in the
Speaker 5: cybersecurity space, at the early stage is what's missing out there?
Speaker 5: There's so many cybersecurity companies. We just talked about Carlstrike
Speaker 5: doing well in an environment where cyber spending is down.
Speaker 5: So what is it specifically you're looking for?
Speaker 9: Yeah? Great, great question.
Speaker 16: So there's two two theses that we have at Sorensen
Speaker 16: in terms of investing in security startups. One is is
Speaker 16: we like to invest in terms of where the puck
Speaker 16: is going, and the other is is we like to
Speaker 16: invest in companies where we think the legacy vendors are
Speaker 16: not innovating. So let's talk about where the puck is going.
Speaker 16: We have two recent exits in our portfolio. The first
Speaker 16: one is a company called Talent Security.
Speaker 9: They invented the secure.
Speaker 16: Browser that was acquired by Palato Networks for about six
Speaker 16: hundred and twenty five million dollars. The reason this was
Speaker 16: important is because work was changing inside the enterprise employees
Speaker 16: who are accessing applications and data through the browser, and
Speaker 16: the browser was unsafe. Yeah, and this is a huge
Speaker 16: problem when you're working on unmanaged devices like your tablets
Speaker 16: or your personal device at home. So that is an
Speaker 16: area that is brand new, it's an open space and
Speaker 16: it really fit well with pal alto becase Palato is
Speaker 16: really good on their secure edge solution.
Speaker 4: Ken I believe as well as z Scala acquired air
Speaker 4: Gap as well. So you've had these two M and
Speaker 4: A exits which are really interesting. Is it all about
Speaker 4: M and A in the moment in terms of exits
Speaker 4: given where the public markets are at the moment.
Speaker 16: What we try and do here at Sworns and Capital
Speaker 16: is build companies that are long term sustainable companies. And
Speaker 16: if you're solving a problem, you're going to get many
Speaker 16: acquisition offers along the way. And in this case, the
Speaker 16: acquisition offers were a really really good.
Speaker 9: Win win fit.
Speaker 16: And to your question about air Gap, what air Gap
Speaker 16: does is it was acquired by z Scaler in April
Speaker 16: and the founders saw that unfortunately, enterprises are going to
Speaker 16: get breached and we saw that today with TikTok right.
Speaker 16: When you get breached, that is a problem. But the
Speaker 16: biggest problem is when at ransomware or malware moves from
Speaker 16: system to system inside the enterprise.
Speaker 9: That's called east west traffic.
Speaker 16: Now, this was a really good fit for z scaler
Speaker 16: because z scaler is really good at north south traffic,
Speaker 16: meaning protecting traffic that's coming outside the enterprise into the enterprise.
Speaker 16: So there's always going to be the security gaps in
Speaker 16: platform companies that our startups are really well positioned to
Speaker 16: help fill, and we can fill it through partnerships or
Speaker 16: in some cases acquisitions and in some cases IPOs.
Speaker 9: And as you know better than I do, you know,
Speaker 9: to go.
Speaker 16: Public, you need to have really good reputable earnings and
Speaker 16: revenue growth.
Speaker 5: Serence and capital partner ken Ellifan on a subject that
Speaker 5: is top of mind for a lot of our audience
Speaker 5: around the world.
Speaker 1: Thank you.
Speaker 5: It is time for talking tech and first up, eBay
Speaker 5: is dropping American Express cars as a payment option. Do
Speaker 5: you to quote unacceptably high fees? The two companies have
Speaker 5: been broad in negotiations around the fees charged, with an American
Speaker 5: Express stating that the fees were comparable to its competitors.
Speaker 5: The change is set to take effect August seventeenth. This
Speaker 5: one we talked about earlier. NXP Semiconductors is teaming up
Speaker 5: with the company partly owned by TSMC to build out
Speaker 5: a seven point eight billion dollar chip plant in Singapore.
Speaker 5: The move comes as customers demand diversification amid geopolitical tensions
Speaker 5: Construction of the facility is set to begin in the
Speaker 5: second half of this year, with production starting in twenty
Speaker 5: twenty seven. And Alphabet has named ann At Ashkenazi as
Speaker 5: its new CFO. Ashconazi spent twenty three years at Eli Lilly,
Speaker 5: where she served as CFO and executive VP for the
Speaker 5: drugmaker since twenty twenty one. She replaces Ruth Parat, who
Speaker 5: announced her departure last year. Ashconazi's new role will be
Speaker 5: effective July thirty.
Speaker 4: First, Caroline, let's get more on the announcement. Davey Albert
Speaker 4: joins us helping give the context of the news. And
Speaker 4: it was a long baton handing over the Was the process.
Speaker 17: Going, Yes, yes, this process took quite a while, almost
Speaker 17: a year.
Speaker 6: So.
Speaker 17: Ruth Partt announced that she was stepping down as Alphabet's
Speaker 17: CFO in July twenty twenty three, and we've been waiting
Speaker 17: for her replacement and it's finally been announced. I think
Speaker 17: this is a great picka for Alphabet, you know, it
Speaker 17: gives them some credibility and boosts them particularly in the
Speaker 17: healthcare industry where there are many generative application generative AI
Speaker 17: applications that are possible.
Speaker 10: Let's just think about you exactly.
Speaker 4: Just coming from Eli Lily now the most valuable pharmaceuticals
Speaker 4: company out there, the applications are clear from healthcare. What
Speaker 4: else can she bring to the table from an Eli Lily.
Speaker 4: There must be sort of an R and D for
Speaker 4: an investment ideal here as well.
Speaker 1: Yeah. Absolutely.
Speaker 17: You know, Alphabet has really shifted its focused and turned
Speaker 17: to generative AI as its mission and the thing that
Speaker 17: it's pouring its investments into. But as it's done that,
Speaker 17: it has also kind of let some of its moonshot
Speaker 17: healthcare efforts languish a little bit.
Speaker 1: And I think that.
Speaker 17: Anat can bring, you know, some revitalization to to those efforts.
Speaker 1: So we'll see how it.
Speaker 5: Goes, Hey, Davey, It said, as you know, every quarter
Speaker 5: for the last year, I got to ask Ruth Porat
Speaker 5: when they would have a UCFO, and each quarter she
Speaker 5: would also point out, like she's doing other stuff, you know,
Speaker 5: while they're looking for a new CFO. She's technically been
Speaker 5: president and chief investment officer, and in that time, like
Speaker 5: Alphabet's done really well, you know, with Porat still there,
Speaker 5: what do we know about the kind of big picture
Speaker 5: plan for her and what she's going to be focused
Speaker 5: on or where she's going.
Speaker 17: Yeah, well, Ruth Porat is a pretty legendary figure in
Speaker 17: the tech industry. She oversaw Alphabet's restructuring when it kind
Speaker 17: of Google blew up its corporate structure and created these
Speaker 17: tiny companies under Alphabet, and she's also grown the company
Speaker 17: and it's cloud and YouTube businesses in particular. They're a
Speaker 17: force to be reckoned with at this point, and Alphabet
Speaker 17: says that they will have a combined annual run rate
Speaker 17: of one hundred billion by the end of this year.
Speaker 17: She's also been overseeing the other bets sector of the
Speaker 17: company and sort of pushing the company to sort of
Speaker 17: enact greater fiscal responsibility. So I think we'll see more
Speaker 17: of that from her, and she will very likely work
Speaker 17: hand in hand with a not to make the company
Speaker 17: even more successful as it turns out.
Speaker 5: I find that super interesting because you're absolutely right, like
Speaker 5: fiscal responsibility, discipline, but also give everything that Alphabet needs
Speaker 5: on the AI side, which was largely data center growth,
Speaker 5: infrastructure spend. Maybe that's an area that Annat Ashkenazi doesn't
Speaker 5: know as well, you know, the Google Cloud portion of
Speaker 5: the business she needs to get grips with.
Speaker 1: I think that makes a lot of sense.
Speaker 17: Ruth has really proven herself through her track record of
Speaker 17: being able to sort of responsibly allocate resources and generative AI,
Speaker 17: as you point out, is an incredibly expensive endeavor.
Speaker 10: So Alphabet is really in the.
Speaker 17: Top tier of companies that are competing for talent and
Speaker 17: also need to continue to invest resources into data centers
Speaker 17: and other tech infrastructure. So I think we'll see some
Speaker 17: of that from Ruth as well.
Speaker 4: I love the quote in your story coming from the
Speaker 4: Mazooho analyst saying that this gig is probably one of
Speaker 4: the best in corporate America. So don't question why she
Speaker 4: is leaving one rocket ship that is Eli Lily to
Speaker 4: go to Google. I just wanted for a moment, well
Speaker 4: hate to shine a light on it, but there are
Speaker 4: a lot of really great female CFOs in the tech sector.
Speaker 4: I just think about MESA, Microsoft, I mean, in video,
Speaker 4: so many of these juggleles have females in the finance role.
Speaker 17: Yeah, that's I mean, it's a welcome development, especially for
Speaker 17: an industry that has struggled with diversity issues and high
Speaker 17: lighting top female leaders over many years. So you know,
Speaker 17: I think this is a pretty good choice for Alphabet
Speaker 17: and We'll see how it goes.
Speaker 10: She has big shoes to fill here.
Speaker 4: She does, and the shoes remain on campus too, which
Speaker 4: is kind of interesting how that dynamic will play out.
Speaker 4: But some female shoes. Deavey Alba, thanks for breaking it
Speaker 4: all down. That does it though.
Speaker 10: For this edition of Bloomberg Technology ED. What a show.
Speaker 1: Yeah, what a show.
Speaker 5: What a moment for Boeing for American Space Exploration. Recap
Speaker 5: everything on the pod. You know exactly where to find
Speaker 5: the podcast. What annor that was? This is Bloomberg Technology