Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily changing San Francisco in This is
Speaker 1: Bloomberg Technology. Coming up in the next hour. Tesla beats
Speaker 1: the first major US car makers report first quarter results,
Speaker 1: and they don't disappoint. How the company is weathering supply issues,
Speaker 1: rising costs, and production delays, while it's CEO explores buying
Speaker 1: Twitter plus Netflix still falling down on the day, making
Speaker 1: it the s ANDPS worst performer of the year so far.
Speaker 1: Is the solution adds gaming? Just better content or maybe
Speaker 1: a big fire like Apple? Will explore all scenarios and
Speaker 1: as public markets fall all the CEO of Amazon Web
Speaker 1: Services tells me he's open to deals of all sizes.
Speaker 1: Adam Selipski joins me here in the studio on the
Speaker 1: heels of the AWS summit in San Francisco, will explore
Speaker 1: the future of the cloud, and well, what about Amazon
Speaker 1: as a buyer for Twitter? Lots to get to I
Speaker 1: want to start by digging deeper into Tesla's results. I'm
Speaker 1: joined out by Steve Wesley, founder of the Wesley Group.
Speaker 1: He was an early investor in Tesla and is a
Speaker 1: former Tesla board member. Okay, Steve, there's a lot going
Speaker 1: on here. The call is gonna start a little bit
Speaker 1: later in our show. We're gonna hear what Ellen has
Speaker 1: to say live. Let's talk about the headline numbers. First,
Speaker 1: how is it the Tesla's managing all of these very
Speaker 1: difficult challenges out there, from a chip crisis to inflation
Speaker 1: to you know, a production shutdown in Shanghai. So well, well, first,
Speaker 1: Tesla Blue Way the numbers once again, posting three d
Speaker 1: and ten thousand vehicles delivered. That's a big number. They
Speaker 1: were predicted to deliver e seventot six billion, and it
Speaker 1: looks like they're going to beat that by a good
Speaker 1: marsh And folks, this is year over year growth, annual
Speaker 1: growth off a big number and posting their eleventh profitable
Speaker 1: quarter on top of that. The real story is they've
Speaker 1: just opened two new facilities in Austin, Berlin. They're sitting
Speaker 1: on four massive production facilities and they just have capacity
Speaker 1: that others don't. Elon is saying he predicts Tesla will
Speaker 1: deliver one point four million cars this year. I think
Speaker 1: he's going to produce at least one point six million.
Speaker 1: If they do that, they could be on their way
Speaker 1: to becoming a one point trillion dollar company. We'll see.
Speaker 1: There's been concerned that Elon Musk's interest in Twitter could
Speaker 1: potentially distract him from Tesla. We've seen Tesla shares take
Speaker 1: a leg down since this whole drama has unfolded. Of course,
Speaker 1: we'll have to see where markets closed tomorrow. But what's
Speaker 1: your take on that can he do all of this
Speaker 1: at once? Well? Look, if a test to shareholder, you
Speaker 1: probably wanted to stay focused on Tesla. Only Ellen and
Speaker 1: Twitter's board know what is going to happen there. As
Speaker 1: you know, he offered his best and final offer forty
Speaker 1: three billion dollars last week. They responded with the boys
Speaker 1: and Bill. Look, Elon is not one to take no
Speaker 1: for an answer, But heading test less SpaceX and Twitter,
Speaker 1: it feels like a stretch to me. But people have
Speaker 1: lost a lot of money betting against Tesla, and I
Speaker 1: think I know for sure this one's gonna be exciting. Indeed,
Speaker 1: if you can build rockets to Mars, why not try
Speaker 1: to buy Twitter? It certainly seems much more reasonable. Indeed,
Speaker 1: all right, so let's talk about the challenges that lie
Speaker 1: ahead for Tesla, given the chip crisis ongoing, given rising inflation,
Speaker 1: given a pandemic that's not over. I mean, there's reports
Speaker 1: that workers at the Tesla pant in Shanghai are planning
Speaker 1: to sleep there to avoid further lockdowns. How well do
Speaker 1: you think the company will continue to navigate all of
Speaker 1: these things through the rest of the year. Look, there's
Speaker 1: a lot going on in the auto industry, and generally speaking,
Speaker 1: I would say if you're investor in auto companies, you
Speaker 1: need to be careful because you're seeing huge supply chain challenges.
Speaker 1: Most of these other companies don't even have their factories
Speaker 1: up and running, and we could be heading into a recession.
Speaker 1: And precisely at the same time all that's going on
Speaker 1: their twenty new EV companies coming into the market, Rivan, Lucid.
Speaker 1: You've heard all the names, but the reality is it's
Speaker 1: hard to make e vs, and you're seeing Rivan and
Speaker 1: Lucid already backtracking on numbers, pulling numbers down. Ford and
Speaker 1: General Motors dramatically lower numbers than people have expected. Ford
Speaker 1: fewer than seven thousands n e vs delivered this quarter,
Speaker 1: General Motors less than a thousand, so I think the
Speaker 1: takeaway here is touch Slate is lapping the competition when
Speaker 1: most of the other automakers are just getting buckled in.
Speaker 1: Let's see how checks out. There's also, of course, what
Speaker 1: you mentioned the R word recession inflation on the rise.
Speaker 1: Are people going to want to buy new cars right now?
Speaker 1: Maybe Tesla is the best at making e vs, but
Speaker 1: doesn't matter if people aren't buying them. So that's the
Speaker 1: big issue. You know. On the one hand, if you
Speaker 1: go down to the testa dealership, now they're gonna tell
Speaker 1: you eight, ten, twelve month wait. So there's a huge
Speaker 1: demand there. The question is will that cool off? In
Speaker 1: Q two or Q three. Looks to me like there's
Speaker 1: a lot of pent up demand. Tesla will take advantage
Speaker 1: of it because they have got four plants going now
Speaker 1: and by the way, a or in the process of
Speaker 1: doubling capacity of their plant in Shanghai. By the way,
Speaker 1: just for the viewers, we can picture this. You've all
Speaker 1: have been to a costco. The Tesla facility in China
Speaker 1: is ten million square feet. That's the size of one
Speaker 1: hundred costcos placed next to each other. These are huge facilities.
Speaker 1: There's are up and running, others aren't just also do
Speaker 1: something smart. They've put supply chain contracts with firms you've
Speaker 1: probably never heard of, like Veil, the world's largest nickel producer,
Speaker 1: so they know where the supply supply is coming from
Speaker 1: and they've got I think a leg up on supply chain. Now,
Speaker 1: how is and how big a recession is coming? That's
Speaker 1: hard to predict right now there in the capperl seat. Meantime,
Speaker 1: Steve in the long list of other things that Elon
Speaker 1: Musk has to deal with, there is this lawsuit over
Speaker 1: that tweet that he sent in funding secured. He's being
Speaker 1: sued by shareholders over this. He had asked to judge
Speaker 1: if he could continue tweeting about it, making comments about it. Uh,
Speaker 1: you know, as the suit is ongoing. A judge has
Speaker 1: now ruled that yes he can. He's not going to
Speaker 1: be muzzled. What do you make of this particular situation,
Speaker 1: the fact that this is going on now almost five
Speaker 1: years So, look, you've got a guy who's gonna get
Speaker 1: out of the park with SpaceX, out of the park
Speaker 1: with tesla Um. Would I advise him to get into
Speaker 1: a a pissing match with the SEC or the government?
Speaker 1: Probably not, But Elon is nothing if not genuine. He
Speaker 1: As I said before, people have lost a lot of
Speaker 1: money betting against him. We'll see how this shakes out.
Speaker 1: It's really only up to the SEC to decide. Personally,
Speaker 1: I'd love to see him staying focused on building great vehicles,
Speaker 1: because right now he's doing a heck of a good
Speaker 1: job of that, all right. Steve Wesley, founder of the
Speaker 1: Wesley Group, early investor in Tesla, early Tesla board member.
Speaker 1: Always great to have your perspective here on the show.
Speaker 1: Some announcements from the Amazon Web Services Summit right here
Speaker 1: in San Francisco. Amazon has taken a new step toward
Speaker 1: getting all of its power from green sources. By the
Speaker 1: world's large just online retailer, has reached deals to boost
Speaker 1: its access to renewable energy by almost a third. Most
Speaker 1: of it will come from solar farms in the United States.
Speaker 1: It will be used to supply Amazon's offices, warehouses, and
Speaker 1: data centers. Meantime, Adam Slitsky, CEO of AWS, joined meat
Speaker 1: here on the set in San Francisco. We're gonna get
Speaker 1: to that conversation momentarily, but first I want to get
Speaker 1: back to our Ed Ludlow, who's been following testa's results,
Speaker 1: and we're not just minutes away from the Tesla earnings call. Normally,
Speaker 1: how this goes, I believe Elon jumps on, muddles through
Speaker 1: some prepared remarks, and then goes off the cuff, right, Yeah,
Speaker 1: he kind of respectfully mumbles through prepared remarks before passing
Speaker 1: on to Zach kirk Con who's the CFO. Sometimes Shrew Bagnino,
Speaker 1: who's the s VP of power Train and Energy, but
Speaker 1: he often interjects. But as you know him, today is
Speaker 1: four twenty. I know nothing's happened yet and being but
Speaker 1: we were all expecting a big moment exactly. So a
Speaker 1: lot of Twitter users to Twitter and said, oh, I
Speaker 1: wonder if Elon Musk tagging him in the tweet at
Speaker 1: Elon Musque will be on the cool He replied yes,
Speaker 1: So you know there's a lot going on in Elon
Speaker 1: Must's world right now. The bid for Twitter tests are
Speaker 1: having a great quarter in the first quarter, SpaceX doing
Speaker 1: really well. There's just intense interest here. But what is
Speaker 1: it we want to know from him? Probably if he's
Speaker 1: not going to talk about Twitter, the outlook for Cybertruck,
Speaker 1: the outlook for Semi truck, these kind of new products
Speaker 1: because that's what he does. He keeps investors looking to
Speaker 1: the horizon. So could we hear something more dramatic from
Speaker 1: him on the Tesla Ernis call. Could that be the
Speaker 1: moment that he chooses to do some sort of reveal
Speaker 1: or make a move if I was a betting man. Yes,
Speaker 1: all right, we'll be listening into that call as it
Speaker 1: starts momentarily ed, thank you. Meantime, back to that conversation
Speaker 1: with Adam Selipski, the CEO of a w S AS
Speaker 1: I mentioned a slew of new announcements, including thirty seven
Speaker 1: in new renewable energy projects, thirty million dollar commitment to
Speaker 1: startups led by diverse founders. My conversation with Adam Selipsky
Speaker 1: earlier talking about the future of AWS and the cloud,
Speaker 1: and two major Amazon Web Services outages late last year,
Speaker 1: I asked what he learned from that. Take a listen.
Speaker 1: Availability is absolutely critical. Our first priority is always security,
Speaker 1: and immediately following that, operational performance including availability and overall,
Speaker 1: if you look at the sixteen year operating history of AWS,
Speaker 1: and even if you look at you know, shorter periods
Speaker 1: the last year, the last three years, we've been highly reliable.
Speaker 1: We've been highly available. We've had better availability track records
Speaker 1: than other large cloud providers. Are certainly better than really
Speaker 1: any enterprise I've talked to has been able to achieve
Speaker 1: in their own data centers. So any evidence you've lost
Speaker 1: customers as a result of those, No, We've had a
Speaker 1: lot of conversations. I mean we Uh, we had a
Speaker 1: couple of days of course in December, which you know,
Speaker 1: we're not not good operational days and we own that,
Speaker 1: by the way, you know, we don't we don't run
Speaker 1: away from that. Um. And uh, we learned from them
Speaker 1: and have been really trying to take whatever lessons we
Speaker 1: could to make ourselves even more reliable. But as we've
Speaker 1: talked to customers, uh, they've they've really all you know,
Speaker 1: understood that. Um. While we don't like what happened on
Speaker 1: a day like that at all, if because of our
Speaker 1: customers hurt, you know, we we feel to hurt too.
Speaker 1: That we really have a very strong track record and
Speaker 1: that keeps the partnership strong. People have been asking for
Speaker 1: years whether AWS should be spun off from Amazon. Do
Speaker 1: you spend any time thinking about this or thinking about
Speaker 1: the hypothetical benefits? Really only with folks like you, m
Speaker 1: As it turns out, Uh, honestly not. We We have
Speaker 1: no current plans to spend on AWS. We think that
Speaker 1: our customers are very well served by having a w
Speaker 1: s B a part of Amazon. In fact, so many
Speaker 1: an increasing number of the conversations I have with particularly
Speaker 1: big inn prizes UH they want to make use of
Speaker 1: the capabilities at Amazon has across the company. Whether it's
Speaker 1: energy companies want wanting to um sell us power, whether
Speaker 1: it's auto manufacturers who have electric vehicles that we need
Speaker 1: for our delivery fleets, whether it's UH telcos who want
Speaker 1: to deliver five G enabled services to their consumers around
Speaker 1: things like entertainment and and Amazon Prime Video. Okay, but
Speaker 1: Andy Jesse might have said he never thought about a
Speaker 1: stock split, and recent events show that even in this environment,
Speaker 1: sometimes we have to revisit those sacred cows. Has the
Speaker 1: idea of a split ever come up in a conversation
Speaker 1: with Andy or Jeff, It's it's really not a topic
Speaker 1: of conversation. We were very squarely focused on the way
Speaker 1: we're operating today. We we honestly do not have any
Speaker 1: plans in which I'm aware to uh really entertain split
Speaker 1: off of AWS. We think the way that we're organized
Speaker 1: now is actually very good for customers. That said, the
Speaker 1: market is changing, eulations are dropping. If you look at
Speaker 1: what's happening in the macro environment. How is this impacting
Speaker 1: your strategy around acquisitions? We've seen Microsoft be really opportunistic. Well,
Speaker 1: we've We've very consistently done acquisitions over the really the
Speaker 1: whole history of AWS. I'd say that overall our strategy
Speaker 1: has been to do smaller, tuck in acquisitions. Part of
Speaker 1: that it's because we're trying to build a complete infrastructure
Speaker 1: platform and we want the whole thing to operate as
Speaker 1: a single platform. Casual spectators often point out that Amazon
Speaker 1: doesn't really have a social play. Does Amazon need a
Speaker 1: social play? Could it be could a Twitter makes sense?
Speaker 1: Well that I don't know, but we certainly, I mean
Speaker 1: a big part of all of Amazon's businesses and and
Speaker 1: our strategy into different businesses revolve around partners and our ecosystem.
Speaker 1: Certainly to an AWS it's two and other parts of
Speaker 1: the business as well. So we're very close to many
Speaker 1: companies with a very strong social presence, be it as
Speaker 1: as AWS customers or in our retail business for customer
Speaker 1: acquisition and UH customer messaging, doing more and more in
Speaker 1: the retail business with the shopping experience using social channels.
Speaker 1: So we're very intertwined with social media companies, and I
Speaker 1: would imagine across all of our business what will continue
Speaker 1: to be closely intertwined. One of those is Meta, which
Speaker 1: recently picked Amazon as its long term cloud provider. I'm
Speaker 1: curious if Meta is just giving you a piece of
Speaker 1: their business or if this is a step towards them
Speaker 1: getting out of their own data center business. Well, I
Speaker 1: think you have to ask them that. But we've been
Speaker 1: working with them for quite a while. But we and
Speaker 1: they did announce recently that they were doing a significant
Speaker 1: amount of their machine learning workloads on AWS and would
Speaker 1: be doing more that going forward, and UM, we really
Speaker 1: love that as the next development and our long term
Speaker 1: partnership with them. UM. I do think there's a lot
Speaker 1: of things so we can do with with companies like
Speaker 1: that together. UM to the economics, the agility, the flexibility
Speaker 1: of parading in the cloud, or are just so strong
Speaker 1: and powerful and even for a large sophisticated UH cost
Speaker 1: effective companies, there's still a lot of benefits to operating
Speaker 1: in the cloud. How much companies like that move to
Speaker 1: the cloud, move to AWS will be a function of
Speaker 1: how well do we understand and anticipate their needs and
Speaker 1: how well can we build in a way that's really
Speaker 1: effective for them for their own customer acquisition and retention.
Speaker 1: There's a lot of new exciting technologies out there. Andy
Speaker 1: recently said that Amazon could potentially sell n f t
Speaker 1: s in the future. How do you think about n
Speaker 1: f t S, blockchain, web, three, the metaverse. Where's the
Speaker 1: opportunity there for AWS? Where do you want to play Boy?
Speaker 1: There's just a lot of buzzwords in that center, aren't there?
Speaker 1: There are We're wondering what the actual market opportunity is.
Speaker 1: What fundamentally, you know, what we want to do is
Speaker 1: to enable all of the underlying technologies that our customers
Speaker 1: at AWS. Customers need to build all of those things,
Speaker 1: to build the metaverse, to build you know, three D computing, UH,
Speaker 1: to build a blockchain and cryptocurrency applications, and we're currently
Speaker 1: doing that. So if you look at I mean, gaming
Speaker 1: companies are often where people start when they talk about
Speaker 1: quote unquote metaverse companies. And if you look at companies
Speaker 1: like Riot Games, if you look at epic. Uh, they're
Speaker 1: both you know, very deep AWS customers. If you look
Speaker 1: at Meta which is of course even had had a
Speaker 1: name change. UM, we're doing more with them over time,
Speaker 1: which is which is really gratifying. And so we also
Speaker 1: do a lot we have blockchain services. UH and if
Speaker 1: you look at things like Ethereum, of Ethereum workloads in
Speaker 1: the world run on AWS. So we're doing more and
Speaker 1: more around blockchain, around Ledger technology, around three D and
Speaker 1: spatial computing, which is going to be an important part
Speaker 1: of the metaverse. And UH at the AW strategies to
Speaker 1: really again try and be uh as far out ahead
Speaker 1: of where those emerging metaverse company demand ends and blockchain
Speaker 1: and cryptocurrency customer demands are going to be, and UH
Speaker 1: and deliver really great innovative services. M Amazon Web Services
Speaker 1: CEO Adam Selipsky. There you can catch that full interview
Speaker 1: at Bloomberg dot com. Let's get an update on the
Speaker 1: Musque Twitter saga continuing to go viral. Elon Musk now
Speaker 1: reaching out to potential financing partners across Wall Street. But
Speaker 1: the question is he having any luck. I'm gonna bring
Speaker 1: in Bloomberg's Michelle Davis for more on that, Michelle, who's
Speaker 1: actually considering this? Yeah, so, you know, as we know,
Speaker 1: the most interesting one of the most interesting parts about
Speaker 1: musk S bid for Twitter is that he didn't made
Speaker 1: it public without having the financing lined up. We know
Speaker 1: that as of now, he has started to have financing
Speaker 1: conversations with potential financing partners. At this point, he's only
Speaker 1: focused on raising debt UM. It's our understanding that he
Speaker 1: has yet to initiate conversation around you know, raising equity UM.
Speaker 1: And so it's his bank Morgan Stanley reaching out to
Speaker 1: other big banks UM reaching out to We understand Apollo
Speaker 1: has agreed to participate help you know, finance through debt
Speaker 1: this offer UM. But at this point we also know
Speaker 1: that there are a couple of firms like Blackstone, Brookfield
Speaker 1: and Vista that have at this point said, you know,
Speaker 1: we kind of want to stay away from this situation.
Speaker 1: We're not going to help provide any financing. Do any
Speaker 1: context done? How much how these conversations are actually going.
Speaker 1: Is he putting pressure on on potential investors here, like, Hey,
Speaker 1: if you work with me, you get the benefits of
Speaker 1: working with me, and I've got obviously a huge portfolio. Yeah.
Speaker 1: I mean, so that's one of the big questions that
Speaker 1: we're trying to find out is how exactly what a
Speaker 1: deal be structured. Um. Some things that have been floated
Speaker 1: are you know, maybe investors could come in and they
Speaker 1: might have some certainty baked in that they would have
Speaker 1: veto power over what Musk says. But at this point
Speaker 1: it's very you know, very little. We just know that
Speaker 1: they are reaching out to other banks, other financing sources.
Speaker 1: Morgan Stanley is a bank that's advice saying Elon Musk,
Speaker 1: and so it's our understanding that you know, they would
Speaker 1: help with provide some of the financing for him. But um, yeah,
Speaker 1: unclear exactly you know, how it will be structured. How
Speaker 1: long could it take before it becomes clear whether he
Speaker 1: has money or not. So Elon Musk has indicated that
Speaker 1: he wants to make an official tender offer at some
Speaker 1: point soon. You know, he made a cryptic tweet past
Speaker 1: night that you know, blank is the day. And so
Speaker 1: before he does that tender offer, he's going to need
Speaker 1: to have the financing gund up. Um, so soon when
Speaker 1: would they Well, it is four twenty. I was waiting
Speaker 1: for something, had to happen today, but we've still got
Speaker 1: a few more hours. Michelle Davis, thank you so much.
Speaker 1: And then it's disappointing for investors, and it is for sure.
Speaker 1: It's just a softer seasonal quarter for us. We have
Speaker 1: this addressable market that's expanding over town. Internally, we're really
Speaker 1: geared up and this is like our moment to shine.
Speaker 1: Welcome back to Bloomberg Technology Eclipse from the Netflix earnings
Speaker 1: called I Want to Stick with Netflix, bringing Ross Gerber
Speaker 1: whose investment from Gerber Kawasaki is also an investor in Netflix. Ross,
Speaker 1: this has got to hurt. Yeah, well, you know, it
Speaker 1: hurts for sure on the short term. But if you're
Speaker 1: a long term investor like we are. I bought a
Speaker 1: little bit myself today to be honest, Why why do
Speaker 1: you think, why do you see potential? Well, it's what's
Speaker 1: changed is really in my mind two things. Number one,
Speaker 1: I don't really see the competition as really being the
Speaker 1: biggest issue from other streamers. The competition is with real life,
Speaker 1: and real life is back and people are going out
Speaker 1: and people are going to Vegas and people are going
Speaker 1: to Disneyland, and the problems are just watching less Netflix,
Speaker 1: and and when you look at how many people are
Speaker 1: getting Netflix for free and what that addressable market is,
Speaker 1: which is actually a third of their total subscribers. Um,
Speaker 1: Netflix still has a lot of room they can grow.
Speaker 1: I think another thing a lot of people are talking
Speaker 1: about is this could be a byproduct of the work
Speaker 1: from home culture. You know, Netflix has really struggled with
Speaker 1: the work from home culture because making movies and and
Speaker 1: content is a collaborative process and it's been very difficult.
Speaker 1: And Netflix is called all their employees back into the
Speaker 1: office that's starting I think this month, and I think
Speaker 1: Read Hastings and the team there are the smartest people
Speaker 1: in Hollywood, and they're going to figure out new ways
Speaker 1: to monetize their brand. And I think we just have
Speaker 1: to change the metrics that we're valuing Netflix with towards
Speaker 1: earnings growth and away from subscriber growth. And when you
Speaker 1: look at that, Netflix is a very cheap store. So
Speaker 1: let's talk about the ways that they could unlock new growth.
Speaker 1: One cracking down on password sharing. How much growth is
Speaker 1: that really going to unlock? Then of course there's the
Speaker 1: idea of an ad supported model, a tiered model gaming,
Speaker 1: or maybe it's just making better content, which of all
Speaker 1: of those options seems to be the hardest. Well, better
Speaker 1: content is sort of a nonsensical thing right now. They
Speaker 1: have the most watched shows on television currently. Uh, I
Speaker 1: think it's inventing Hannah, which my wife is watching like NonStop.
Speaker 1: They have the best producers in Hollywood, and they have
Speaker 1: every great project in Hollywood. So the content isn't the issue.
Speaker 1: The issue is monetizing the content in ways that they
Speaker 1: haven't in the past. And I'm a big believer that
Speaker 1: Netflix needs to reinvent the theater experience around their shows
Speaker 1: and movies. And there's many ways they can monetize, between merchandise,
Speaker 1: events and communities they can build around their content, which
Speaker 1: they currently are not. Secondly, you've mentioned to I think
Speaker 1: very important areas, which is an AD supported Netflix Light,
Speaker 1: which they take zero dollars in on ad revenue. And
Speaker 1: you look at a model like YouTube and how much
Speaker 1: money they're printing on advertising and the engagement. Netflix has
Speaker 1: the same engagement level as YouTube, and if they ran ads,
Speaker 1: they would be very successful. And I would advertise on
Speaker 1: Netflix for sure, you know. And so that's another thing.
Speaker 1: And then of course half the people in my office
Speaker 1: don't actually pay for Netflix. So I asked them, you know, well,
Speaker 1: what would get you to pay? And it's the same
Speaker 1: thing with iTunes and music where people didn't want to
Speaker 1: pay until it became a hassle to do it. So
Speaker 1: Netflix can employ several strategies to start monetizing these users,
Speaker 1: and we suspect they could capture another million users, maybe
Speaker 1: at a lower rate of cost, but I mean of revenue.
Speaker 1: But but certainly there's a lot of growth. When you
Speaker 1: got a hundred million subs, you aren't paying all right,
Speaker 1: ross You are also a testlate shareholder. And the Tesla
Speaker 1: earnings call has begun. We've been listening to the CFO
Speaker 1: deliver some prepared remarks and Elon Musk is speaking. Now.
Speaker 1: We're gonna bring you headlines as those roll in, But
Speaker 1: curious what your thoughts are on the results looked. Tesla
Speaker 1: has had a better report than than certainly Netflix yesterday.
Speaker 1: But a lot going on in the world of Elon Musk.
Speaker 1: Does it bother you as an investor that there are
Speaker 1: all of these many distractions, Well, clearly they're not affecting
Speaker 1: Tesla's focus. Um, you know, Elon's sort of lives on
Speaker 1: another planet we call Mars, and he doesn't sleep, and
Speaker 1: he has a tremendous passion for making the world a
Speaker 1: better place and doing it profitably. How he's executed with
Speaker 1: such a difficult supply chain environment and manufacturing environment further
Speaker 1: shows the dominance and the mode that Tesla's built around
Speaker 1: their business and in the foresight that Elon hasn't being
Speaker 1: able to deliver so many vehicles profitably in this environment
Speaker 1: where no other company is doing that in their industry,
Speaker 1: whether traditional cars or e vs. So where I think
Speaker 1: the lack of focus at Netflix has caused them to
Speaker 1: drift a little bit and now creating an opportunity for
Speaker 1: long term investors. Testa obviously is a fully valued company
Speaker 1: that's executing really, really well, and I think we'll continue
Speaker 1: to for a long time. So this is really a
Speaker 1: special time for Tesla because next sir looks even better
Speaker 1: than this year and they're executing beautiful. The CFO has
Speaker 1: been digging into this idea of you know, the impact
Speaker 1: of the production shutdown in Shakai, saying they lost about
Speaker 1: a month of build volume. They're they're working back to
Speaker 1: to get full productive, full projection as quickly as possible,
Speaker 1: But how big of a concern is this ongoing, given
Speaker 1: that the Shanghai factory is such a lynch pin of
Speaker 1: Tesla's production strategy. Yeah, and I don't want to minimize
Speaker 1: the concern because I think this is the biggest risk
Speaker 1: to many companies, not just Tesla right now, which is
Speaker 1: China's failed COVID policies are creating huge problems not just
Speaker 1: at Tesla, but also a companies like Apple and others
Speaker 1: in the hardware business in technology, so we're seeing and
Speaker 1: other industries as well. So we're seeing continued disruption, even
Speaker 1: worse than we saw earlier, which sucks. So you know,
Speaker 1: I don't have a spin on that. What I do
Speaker 1: think is they are opening. They just opened to new
Speaker 1: factories and to new markets that aren't it China, and
Speaker 1: there couldn't be a better time for that to happen.
Speaker 1: But what I do suspect is that China is going
Speaker 1: to be challenging for Tesla over the next six months.
Speaker 1: I think it's a short term issue and I think
Speaker 1: it will hurt production on the short term, but I
Speaker 1: think they're going to make it up in the other
Speaker 1: factories because I think what we're gonna see is tremendous
Speaker 1: uh productivity and growth in Berlin and Austin, and so
Speaker 1: I think within sixty days they'll have figured out how
Speaker 1: to make up all the production that might be lost.
Speaker 1: But I think for sure we're going to see that
Speaker 1: in the quarter, and I don't think there's any spin
Speaker 1: on it. Elon Musk just give a shout out to
Speaker 1: the Tesla China team and the Shanghai factory. Talked about
Speaker 1: how it's been a record quarter on many levels, but
Speaker 1: this the latest headline saying Tesla Ross is working on
Speaker 1: a dedicated robo taxi with no steering wheel or pedals.
Speaker 1: Of course, you know, el On Musk, because you know,
Speaker 1: talk quite boldly about things that will come in Testa's future,
Speaker 1: and many things have taken a while to come to fruition,
Speaker 1: some haven't quite yet. But do you like the sound
Speaker 1: of that? Yeah? I do. And I think this is
Speaker 1: really more a byproduct of the convergence of the full
Speaker 1: self driving technology, which is making a lot of progress currently,
Speaker 1: along with the idea of having a cheaper vehicle that
Speaker 1: would cost less money, like let's say thirty dollar price
Speaker 1: point instead of fifties sixty price point. But instead of
Speaker 1: selling that cheaper vehicle, we've seen tremendous demand from the
Speaker 1: rental car companies for low end Testla's whether it be
Speaker 1: Hurts or others. And so I think test is like, well,
Speaker 1: why should we make rental cars, you know our robotaxis
Speaker 1: for everybody else, We should make them for ourselves, and
Speaker 1: especially this new vehicle which is using the new battery
Speaker 1: cell technology. So what I suspect is that Tesla fields
Speaker 1: they can build low cost vehicles using all their technology
Speaker 1: in battery technology as well as full self driving to
Speaker 1: create this sort of master yellow cab without a human
Speaker 1: in it. And and I think that that's a reality.
Speaker 1: It's just how long it'll take. And I think that's
Speaker 1: really been the challenge with Tesla isn't the vision, it's
Speaker 1: it's how long it takes to achieve those visions. So
Speaker 1: so I don't know how long that's gonna take. But
Speaker 1: but I wouldn't be betting against Ellen, That's for sure.
Speaker 1: I'm betting with him, and I'm betting more with him. Well,
Speaker 1: he's saying he hopes to reach volume production in and
Speaker 1: says this will be a massive driver of Tesla growth
Speaker 1: timing for us. Interesting. I recently sat down with Aisha Evans,
Speaker 1: the CEO of Zooks on the latest studio One point
Speaker 1: I was Zooks, of course, is the uh self driving
Speaker 1: robo taxi company that Amazon bought for over a billion dollars.
Speaker 1: We're gonna see a clip of that later in the show.
Speaker 1: Ross Gerber Gerber Kawasaki. Always good to have you and
Speaker 1: your colorful opinions here on the show. Thank you for
Speaker 1: stopping by. We're gonna get to our crypto report in
Speaker 1: just a moment. But Elon must speaking right now on
Speaker 1: the Tesla ernies call, saying that the first quarter was
Speaker 1: a record quarter on many levels, congratulating the Tesla's team
Speaker 1: despite facing many headwinds, also giving a special shout out
Speaker 1: to the Tesla China team at that factory in Shanghai.
Speaker 1: He also said they're working on a new vehicle, a
Speaker 1: dedicated robo taxi that won't have a steering wheel or pedals,
Speaker 1: but could be a massive driver of Tesla's growth in
Speaker 1: the future. We're continuing to monitor headlines from that column,
Speaker 1: will bring you more as they roll in to our
Speaker 1: crypto report. Now, I want to bring in Framework Ventures
Speaker 1: of venture capital firm that has just raised four million
Speaker 1: dollars for a fun focused on investing in early stage
Speaker 1: crypto startups from gaming and Web three to defy. Cofident
Speaker 1: founder Michael Anderson joins me now. Michael talked to us
Speaker 1: about the advantages of being a Web three native venture
Speaker 1: capital firm and competing in an industry where most venture capitalists, uh,
Speaker 1: you know, go about their business in more traditional ways
Speaker 1: that they've been doing for decades. Yeah, it's it's a
Speaker 1: great point and a great question. You know. One of
Speaker 1: the things that really I think separates us from traditional
Speaker 1: venture investors, especially investors in the web free space as well,
Speaker 1: is that we actually have more engineers on the team
Speaker 1: than we have venture investors. When we make an investment,
Speaker 1: we're participating by building alongside the investor, alongside the investments
Speaker 1: that we make, and partnering at a really deep level
Speaker 1: to the founding teams that we're backing. And because of this,
Speaker 1: you know, we we've been able to really help dictate
Speaker 1: success of the investments that we make and really help
Speaker 1: understand where where things are going from new opportunities before
Speaker 1: they rise and before anybody else you notice them. So
Speaker 1: what are those opportunities? You've just announced a four hundred
Speaker 1: million dollar fund to invest in new blockchain startups. You've
Speaker 1: got all kinds of money, including the traditional money chasing
Speaker 1: the startups. You know, what do you believe is out
Speaker 1: there that's unique that they're not going to see? Yeah,
Speaker 1: So when we started Framework with our first fund in ten,
Speaker 1: we were really I think one of the first firms
Speaker 1: to go bet the farm on DeFi and and DeFi
Speaker 1: has become commonplace at this point, it's really the poor
Speaker 1: area of engagement for most of the applications that are
Speaker 1: being developed on top of Web three currently. And what
Speaker 1: we see now and especially with this new fund, is
Speaker 1: that blockchain based gaming and and what we see is
Speaker 1: the potential for blockchain based gaming into the next couple
Speaker 1: of years is really the same opportunity that we saw
Speaker 1: with Defied twenty nineteen. It's really a unique opportunity to
Speaker 1: to get these these game developers that have been developing
Speaker 1: on consoles, on on PCs, on mobile for the last
Speaker 1: ten twenty years and and build on a new form
Speaker 1: factor which has advantages that just aren't aren't possible in
Speaker 1: the ecosystems that they're used to today. All Right, well,
Speaker 1: we'll be watching to see where you make your next move.
Speaker 1: Framework Ventures co founder Michael Anderson, thanks for joining us
Speaker 1: as we continue to monit our Tesla results. I spoke
Speaker 1: exclusively with Zooks CEO Aisha Evans, the autonomous driving company
Speaker 1: recently bought by Amazon for over a billion dollars this
Speaker 1: and the latest edition of Bloomberg Studio. At one point
Speaker 1: out we talked about what it takes to turn a
Speaker 1: startup into a global ride hailing giant, including competing with Tesla.
Speaker 1: M this is Silicon Valley. We are, you know, pay
Speaker 1: tribute to disruptors. Having said that, we're not exactly in
Speaker 1: the same business. We don't sell a car to people.
Speaker 1: We sell a right to people. Our customers are not drivers,
Speaker 1: they are writers, and therefore we use the same types
Speaker 1: of technologies. But they are in the car selling business.
Speaker 1: So how does Zooks fit into the future of Amazon, Well,
Speaker 1: that story is yet to be written. First of all,
Speaker 1: we are we hope to deliver on the promise of
Speaker 1: a new segment and uh sort of a big business
Speaker 1: uh and be one of those in the tradition of
Speaker 1: of Amazon. We know there's a world of possibilities, but
Speaker 1: I tell everybody we first have to earn it right
Speaker 1: before we talk about a sort of synergies and possibilities
Speaker 1: and opportunities together. Zero times anything is still zero and
Speaker 1: it will be for a long time. So we're focusing
Speaker 1: on building our business, getting to market, and then there's
Speaker 1: a myriad of possibilities of things we could do together.
Speaker 1: Zoo is going to be dropping off my boxss. Is
Speaker 1: that what I should expect potentially, if that's the right
Speaker 1: thing to do and if it makes sense to do so.
Speaker 1: But first we're going to make sure to take you
Speaker 1: everywhere you need to go without having to worry about parking,
Speaker 1: having a car, and so on. What's it like having
Speaker 1: Amazon as your boss? It's been good put an independent
Speaker 1: subsidiary of of Amazon. So yes, they are involved. We
Speaker 1: agree on what's going to happen, why it's gonna happen.
Speaker 1: How often did you talk to Jeff Bezos or do
Speaker 1: you talk to Andy Jasse or maybe it's Dave limp Um.
Speaker 1: I don't talk to them that often. I mean, we
Speaker 1: have a monthly business for you or quality business with you,
Speaker 1: but no, it's not like I'm besties with them and
Speaker 1: we're on the phone and wrapping and chatting. Now, well,
Speaker 1: you must know what their expectations are. What is Amazon
Speaker 1: expecting of zoos execute get to market scale, and do
Speaker 1: you have the funding to do that? GM? Google very
Speaker 1: well funded competitors or fellow travelers. As you say, are
Speaker 1: you getting what you need? Yes? More than what I need.
Speaker 1: I'm funding is not something I even worry about. So
Speaker 1: what's it like to operate in that environment where money
Speaker 1: is not an issue? Well, I mean you have to
Speaker 1: be careful, right, because you also don't want to be
Speaker 1: a drunken sailor and be like, oh now I have
Speaker 1: You still have to be a very disciplined You have
Speaker 1: to manage the phases of the business. We're like, okay,
Speaker 1: how do we execute? How do we make our mouth stones?
Speaker 1: How do we get to market where things organized properly?
Speaker 1: How do we hire? How do we retain and so
Speaker 1: on and so forth? How do stay mission driven? The
Speaker 1: public seems to have lost interest in waiting around for
Speaker 1: self driving cars. I wrote in Google self Driving Car
Speaker 1: in eleven and I'm still waiting to be able to
Speaker 1: buy or just ride a self driving car on demand.
Speaker 1: Why is it taking so long? I think in self driving,
Speaker 1: first of all, the opportunity is so clear, um the
Speaker 1: so the beach is so broad. We forget that big
Speaker 1: things do start small. One second, it's a hard problem
Speaker 1: to solve. We talk a lot about safety, uh and
Speaker 1: we talked talk a lot about human error when it
Speaker 1: comes to driving, but we also forget that collectively, at
Speaker 1: least in the United States of America, humans collectively drive
Speaker 1: a hundred million miles before having a fatality. That's a
Speaker 1: lot of mouths. So humans are also pretty good. And
Speaker 1: the thing humans are good at, which is hand I
Speaker 1: call it exception handling. We all know how to drive.
Speaker 1: If you are all fully autonomous, would be deployed already.
Speaker 1: But we're driving amongst human and you have to deal
Speaker 1: with so many little scenarios. There are so many things
Speaker 1: that you've been learning about driving since births and codifying
Speaker 1: that using AI sensors and computers is turning out to
Speaker 1: be a lot harder. You can catch much more of
Speaker 1: my conversation with Zooks CEO. I saw Evans tonight nine
Speaker 1: Eastern on Bloomberg Television. The question could as Zooks be
Speaker 1: delivering my Amazon packages one day? All that and more
Speaker 1: on this edition of Bloomberg Studio One point. Now, I
Speaker 1: want to get back to the latest on Tesla's earnings
Speaker 1: call Now and bring Back are at Ludlow. And it's
Speaker 1: very interesting since Ela must just just just described what
Speaker 1: sounds a lot like a Zooks saying that Tesla is
Speaker 1: working on a robotax seat with no steering wheel, no pedals,
Speaker 1: neither of which Zooks have. This is a purpose built ROBOTAXI.
Speaker 1: Testa is working on mass production by four. He's had
Speaker 1: some criticism on the cool as well, some questions of
Speaker 1: criticism about overpromising on full self driving, but this purpose
Speaker 1: built car seem the big takeaway, and he says this
Speaker 1: is going to drive massive growth by I mean, Ellen
Speaker 1: has made bold predictions about timelines before and he's got
Speaker 1: them wrong. I think you know this is happening in
Speaker 1: parallel with other stuff. So Cybertruck goes into mass PRODUCTIONE.
Speaker 1: They're continuing FSD beta and Elon musk message was, if
Speaker 1: you're a Testa owner, try FD beta, but the future
Speaker 1: is fleet based, you don't own your own vehicle. Sounds
Speaker 1: a lot like zoos. So the thing we haven't heard
Speaker 1: yet is anything about four joining or Twitter on the car. Yeah, right,
Speaker 1: the only kind of curious thing. Musk didn't start the call.
Speaker 1: Cfo zat kirkwn did and then Musk made made very deliberate,
Speaker 1: prepared remarks, which is kind of not very Musk like.
Speaker 1: So he didn't go off script. He didn't go off
Speaker 1: script yet, better run back to my desk, right, So
Speaker 1: it's kind of how long there's a car go on for?
Speaker 1: It's about an hour, right, He's going to take questions
Speaker 1: from institutional investors, detail investors, from analysts. That's where the riffing,
Speaker 1: and somebody has got to ask what's going on with
Speaker 1: your Twitter bit? Elon Musk, They've got, so I hope
Speaker 1: that will manage for Tesla investors. I mean, we've seen
Speaker 1: shares take a leg down since all of this drama
Speaker 1: started to unfold. And certainly if you're a Tesla investor,
Speaker 1: maybe maybe you don't want Elon mustard by Twitter and
Speaker 1: he's a busy guy. Is he distracted? That's another question,
Speaker 1: like how can he run all these companies and trying
Speaker 1: by Twitter? Well, multitasking is certainly nothing new to Elon Musk,
Speaker 1: so there's certainly an argument to be made there. But
Speaker 1: we will be listening in for all the headlines, So
Speaker 1: stay tuned to Bloomberg Television for much more at Ludlow.
Speaker 1: Thank you that does it for this edition of Bloomberg
Speaker 1: Technology