WEBVTT - Tesla Earnings and Amazon's Cloud Strategy 0:00:02.360 --> 0:00:05.720 From the heart of where innovation, money and power collive 0:00:06.480 --> 0:00:11.000 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.080 --> 0:00:26.880 Emily Jay I'm Emily changing San Francisco in This is 0:00:26.880 --> 0:00:30.080 Bloomberg Technology. Coming up in the next hour. Tesla beats 0:00:30.120 --> 0:00:33.479 the first major US car makers report first quarter results, 0:00:33.479 --> 0:00:37.240 and they don't disappoint. How the company is weathering supply issues, 0:00:37.360 --> 0:00:41.920 rising costs, and production delays, while it's CEO explores buying 0:00:42.080 --> 0:00:46.520 Twitter plus Netflix still falling down on the day, making 0:00:46.560 --> 0:00:49.720 it the s ANDPS worst performer of the year so far. 0:00:50.280 --> 0:00:54.160 Is the solution adds gaming? Just better content or maybe 0:00:54.160 --> 0:00:58.600 a big fire like Apple? Will explore all scenarios and 0:00:58.720 --> 0:01:01.200 as public markets fall all the CEO of Amazon Web 0:01:01.200 --> 0:01:03.680 Services tells me he's open to deals of all sizes. 0:01:03.880 --> 0:01:06.160 Adam Selipski joins me here in the studio on the 0:01:06.200 --> 0:01:09.520 heels of the AWS summit in San Francisco, will explore 0:01:09.560 --> 0:01:12.280 the future of the cloud, and well, what about Amazon 0:01:12.520 --> 0:01:14.840 as a buyer for Twitter? Lots to get to I 0:01:14.840 --> 0:01:18.040 want to start by digging deeper into Tesla's results. I'm 0:01:18.080 --> 0:01:20.399 joined out by Steve Wesley, founder of the Wesley Group. 0:01:20.440 --> 0:01:22.640 He was an early investor in Tesla and is a 0:01:22.680 --> 0:01:25.440 former Tesla board member. Okay, Steve, there's a lot going 0:01:25.480 --> 0:01:27.760 on here. The call is gonna start a little bit 0:01:27.880 --> 0:01:30.480 later in our show. We're gonna hear what Ellen has 0:01:30.560 --> 0:01:33.959 to say live. Let's talk about the headline numbers. First, 0:01:34.120 --> 0:01:36.520 how is it the Tesla's managing all of these very 0:01:36.520 --> 0:01:39.720 difficult challenges out there, from a chip crisis to inflation 0:01:39.880 --> 0:01:46.280 to you know, a production shutdown in Shanghai. So well, well, first, 0:01:46.840 --> 0:01:50.600 Tesla Blue Way the numbers once again, posting three d 0:01:50.760 --> 0:01:54.400 and ten thousand vehicles delivered. That's a big number. They 0:01:54.400 --> 0:01:58.120 were predicted to deliver e seventot six billion, and it 0:01:58.120 --> 0:01:59.680 looks like they're going to beat that by a good 0:01:59.680 --> 0:02:04.360 marsh And folks, this is year over year growth, annual 0:02:04.400 --> 0:02:08.640 growth off a big number and posting their eleventh profitable 0:02:08.680 --> 0:02:11.959 quarter on top of that. The real story is they've 0:02:12.080 --> 0:02:15.640 just opened two new facilities in Austin, Berlin. They're sitting 0:02:15.680 --> 0:02:20.880 on four massive production facilities and they just have capacity 0:02:21.000 --> 0:02:24.640 that others don't. Elon is saying he predicts Tesla will 0:02:24.680 --> 0:02:27.600 deliver one point four million cars this year. I think 0:02:27.639 --> 0:02:30.320 he's going to produce at least one point six million. 0:02:30.680 --> 0:02:33.600 If they do that, they could be on their way 0:02:33.600 --> 0:02:36.840 to becoming a one point trillion dollar company. We'll see. 0:02:37.880 --> 0:02:41.720 There's been concerned that Elon Musk's interest in Twitter could 0:02:41.760 --> 0:02:44.960 potentially distract him from Tesla. We've seen Tesla shares take 0:02:44.960 --> 0:02:49.000 a leg down since this whole drama has unfolded. Of course, 0:02:49.000 --> 0:02:52.520 we'll have to see where markets closed tomorrow. But what's 0:02:52.520 --> 0:02:54.560 your take on that can he do all of this 0:02:54.680 --> 0:03:01.280 at once? Well? Look, if a test to shareholder, you 0:03:01.280 --> 0:03:04.760 probably wanted to stay focused on Tesla. Only Ellen and 0:03:04.960 --> 0:03:07.760 Twitter's board know what is going to happen there. As 0:03:07.800 --> 0:03:09.960 you know, he offered his best and final offer forty 0:03:10.080 --> 0:03:12.680 three billion dollars last week. They responded with the boys 0:03:12.680 --> 0:03:15.760 and Bill. Look, Elon is not one to take no 0:03:16.040 --> 0:03:19.760 for an answer, But heading test less SpaceX and Twitter, 0:03:20.400 --> 0:03:23.040 it feels like a stretch to me. But people have 0:03:23.160 --> 0:03:26.280 lost a lot of money betting against Tesla, and I 0:03:26.320 --> 0:03:29.800 think I know for sure this one's gonna be exciting. Indeed, 0:03:29.840 --> 0:03:31.959 if you can build rockets to Mars, why not try 0:03:32.000 --> 0:03:37.760 to buy Twitter? It certainly seems much more reasonable. Indeed, 0:03:37.840 --> 0:03:39.840 all right, so let's talk about the challenges that lie 0:03:39.840 --> 0:03:44.920 ahead for Tesla, given the chip crisis ongoing, given rising inflation, 0:03:45.240 --> 0:03:48.080 given a pandemic that's not over. I mean, there's reports 0:03:48.120 --> 0:03:51.280 that workers at the Tesla pant in Shanghai are planning 0:03:51.280 --> 0:03:54.880 to sleep there to avoid further lockdowns. How well do 0:03:54.920 --> 0:03:57.480 you think the company will continue to navigate all of 0:03:57.520 --> 0:04:03.120 these things through the rest of the year. Look, there's 0:04:03.160 --> 0:04:05.600 a lot going on in the auto industry, and generally speaking, 0:04:05.640 --> 0:04:09.400 I would say if you're investor in auto companies, you 0:04:09.640 --> 0:04:15.120 need to be careful because you're seeing huge supply chain challenges. 0:04:15.440 --> 0:04:18.080 Most of these other companies don't even have their factories 0:04:18.279 --> 0:04:20.880 up and running, and we could be heading into a recession. 0:04:21.720 --> 0:04:24.159 And precisely at the same time all that's going on 0:04:24.279 --> 0:04:29.479 their twenty new EV companies coming into the market, Rivan, Lucid. 0:04:29.520 --> 0:04:32.120 You've heard all the names, but the reality is it's 0:04:32.200 --> 0:04:35.640 hard to make e vs, and you're seeing Rivan and 0:04:35.880 --> 0:04:40.600 Lucid already backtracking on numbers, pulling numbers down. Ford and 0:04:40.720 --> 0:04:44.400 General Motors dramatically lower numbers than people have expected. Ford 0:04:44.760 --> 0:04:48.320 fewer than seven thousands n e vs delivered this quarter, 0:04:48.720 --> 0:04:52.680 General Motors less than a thousand, so I think the 0:04:52.720 --> 0:04:56.400 takeaway here is touch Slate is lapping the competition when 0:04:56.480 --> 0:04:58.880 most of the other automakers are just getting buckled in. 0:04:59.440 --> 0:05:03.400 Let's see how checks out. There's also, of course, what 0:05:03.520 --> 0:05:07.279 you mentioned the R word recession inflation on the rise. 0:05:07.640 --> 0:05:10.000 Are people going to want to buy new cars right now? 0:05:10.040 --> 0:05:13.400 Maybe Tesla is the best at making e vs, but 0:05:14.000 --> 0:05:19.520 doesn't matter if people aren't buying them. So that's the 0:05:19.520 --> 0:05:21.479 big issue. You know. On the one hand, if you 0:05:21.560 --> 0:05:24.800 go down to the testa dealership, now they're gonna tell 0:05:24.839 --> 0:05:29.080 you eight, ten, twelve month wait. So there's a huge 0:05:29.120 --> 0:05:32.240 demand there. The question is will that cool off? In 0:05:32.320 --> 0:05:34.600 Q two or Q three. Looks to me like there's 0:05:34.640 --> 0:05:37.080 a lot of pent up demand. Tesla will take advantage 0:05:37.080 --> 0:05:39.360 of it because they have got four plants going now 0:05:39.520 --> 0:05:43.080 and by the way, a or in the process of 0:05:43.160 --> 0:05:46.600 doubling capacity of their plant in Shanghai. By the way, 0:05:46.640 --> 0:05:48.760 just for the viewers, we can picture this. You've all 0:05:48.760 --> 0:05:52.200 have been to a costco. The Tesla facility in China 0:05:52.480 --> 0:05:55.240 is ten million square feet. That's the size of one 0:05:55.320 --> 0:05:59.120 hundred costcos placed next to each other. These are huge facilities. 0:05:59.160 --> 0:06:01.480 There's are up and running, others aren't just also do 0:06:01.600 --> 0:06:05.200 something smart. They've put supply chain contracts with firms you've 0:06:05.200 --> 0:06:09.159 probably never heard of, like Veil, the world's largest nickel producer, 0:06:09.480 --> 0:06:12.599 so they know where the supply supply is coming from 0:06:12.640 --> 0:06:16.080 and they've got I think a leg up on supply chain. Now, 0:06:16.960 --> 0:06:19.760 how is and how big a recession is coming? That's 0:06:19.800 --> 0:06:24.279 hard to predict right now there in the capperl seat. Meantime, 0:06:24.520 --> 0:06:28.000 Steve in the long list of other things that Elon 0:06:28.120 --> 0:06:31.280 Musk has to deal with, there is this lawsuit over 0:06:31.320 --> 0:06:35.599 that tweet that he sent in funding secured. He's being 0:06:35.640 --> 0:06:39.120 sued by shareholders over this. He had asked to judge 0:06:39.279 --> 0:06:43.320 if he could continue tweeting about it, making comments about it. Uh, 0:06:43.360 --> 0:06:45.600 you know, as the suit is ongoing. A judge has 0:06:45.640 --> 0:06:48.640 now ruled that yes he can. He's not going to 0:06:48.720 --> 0:06:52.280 be muzzled. What do you make of this particular situation, 0:06:52.360 --> 0:06:54.839 the fact that this is going on now almost five 0:06:54.920 --> 0:07:01.440 years So, look, you've got a guy who's gonna get 0:07:01.440 --> 0:07:03.320 out of the park with SpaceX, out of the park 0:07:03.360 --> 0:07:07.320 with tesla Um. Would I advise him to get into 0:07:07.520 --> 0:07:11.320 a a pissing match with the SEC or the government? 0:07:11.600 --> 0:07:15.480 Probably not, But Elon is nothing if not genuine. He 0:07:15.680 --> 0:07:17.560 As I said before, people have lost a lot of 0:07:17.600 --> 0:07:21.760 money betting against him. We'll see how this shakes out. 0:07:22.080 --> 0:07:25.200 It's really only up to the SEC to decide. Personally, 0:07:25.560 --> 0:07:28.679 I'd love to see him staying focused on building great vehicles, 0:07:28.680 --> 0:07:30.320 because right now he's doing a heck of a good 0:07:30.400 --> 0:07:34.120 job of that, all right. Steve Wesley, founder of the 0:07:34.160 --> 0:07:37.400 Wesley Group, early investor in Tesla, early Tesla board member. 0:07:37.440 --> 0:07:39.840 Always great to have your perspective here on the show. 0:07:49.080 --> 0:07:51.960 Some announcements from the Amazon Web Services Summit right here 0:07:52.040 --> 0:07:55.640 in San Francisco. Amazon has taken a new step toward 0:07:55.720 --> 0:07:59.440 getting all of its power from green sources. By the 0:07:59.440 --> 0:08:02.320 world's large just online retailer, has reached deals to boost 0:08:02.360 --> 0:08:06.280 its access to renewable energy by almost a third. Most 0:08:06.280 --> 0:08:09.120 of it will come from solar farms in the United States. 0:08:09.160 --> 0:08:13.679 It will be used to supply Amazon's offices, warehouses, and 0:08:14.720 --> 0:08:22.400 data centers. Meantime, Adam Slitsky, CEO of AWS, joined meat 0:08:22.440 --> 0:08:25.320 here on the set in San Francisco. We're gonna get 0:08:25.320 --> 0:08:27.240 to that conversation momentarily, but first I want to get 0:08:27.280 --> 0:08:30.520 back to our Ed Ludlow, who's been following testa's results, 0:08:30.560 --> 0:08:34.640 and we're not just minutes away from the Tesla earnings call. Normally, 0:08:34.640 --> 0:08:37.720 how this goes, I believe Elon jumps on, muddles through 0:08:37.760 --> 0:08:42.559 some prepared remarks, and then goes off the cuff, right, Yeah, 0:08:42.640 --> 0:08:47.760 he kind of respectfully mumbles through prepared remarks before passing 0:08:47.800 --> 0:08:50.760 on to Zach kirk Con who's the CFO. Sometimes Shrew Bagnino, 0:08:50.840 --> 0:08:54.000 who's the s VP of power Train and Energy, but 0:08:54.040 --> 0:08:56.280 he often interjects. But as you know him, today is 0:08:56.320 --> 0:09:00.560 four twenty. I know nothing's happened yet and being but 0:09:00.679 --> 0:09:04.439 we were all expecting a big moment exactly. So a 0:09:04.480 --> 0:09:06.760 lot of Twitter users to Twitter and said, oh, I 0:09:06.760 --> 0:09:09.040 wonder if Elon Musk tagging him in the tweet at 0:09:09.040 --> 0:09:12.160 Elon Musque will be on the cool He replied yes, 0:09:12.760 --> 0:09:14.839 So you know there's a lot going on in Elon 0:09:14.920 --> 0:09:17.480 Must's world right now. The bid for Twitter tests are 0:09:17.480 --> 0:09:20.040 having a great quarter in the first quarter, SpaceX doing 0:09:20.080 --> 0:09:23.439 really well. There's just intense interest here. But what is 0:09:23.480 --> 0:09:25.640 it we want to know from him? Probably if he's 0:09:25.640 --> 0:09:28.120 not going to talk about Twitter, the outlook for Cybertruck, 0:09:28.160 --> 0:09:30.520 the outlook for Semi truck, these kind of new products 0:09:30.800 --> 0:09:32.920 because that's what he does. He keeps investors looking to 0:09:32.960 --> 0:09:37.760 the horizon. So could we hear something more dramatic from 0:09:37.800 --> 0:09:39.960 him on the Tesla Ernis call. Could that be the 0:09:40.000 --> 0:09:43.120 moment that he chooses to do some sort of reveal 0:09:43.440 --> 0:09:46.200 or make a move if I was a betting man. Yes, 0:09:47.320 --> 0:09:49.440 all right, we'll be listening into that call as it 0:09:49.480 --> 0:09:53.760 starts momentarily ed, thank you. Meantime, back to that conversation 0:09:53.840 --> 0:09:57.160 with Adam Selipski, the CEO of a w S AS 0:09:57.160 --> 0:10:00.000 I mentioned a slew of new announcements, including thirty seven 0:10:00.040 --> 0:10:04.080 in new renewable energy projects, thirty million dollar commitment to 0:10:04.280 --> 0:10:08.119 startups led by diverse founders. My conversation with Adam Selipsky 0:10:08.320 --> 0:10:11.840 earlier talking about the future of AWS and the cloud, 0:10:12.120 --> 0:10:16.600 and two major Amazon Web Services outages late last year, 0:10:16.600 --> 0:10:18.160 I asked what he learned from that. Take a listen. 0:10:19.679 --> 0:10:23.680 Availability is absolutely critical. Our first priority is always security, 0:10:24.040 --> 0:10:28.920 and immediately following that, operational performance including availability and overall, 0:10:28.960 --> 0:10:31.960 if you look at the sixteen year operating history of AWS, 0:10:32.080 --> 0:10:34.480 and even if you look at you know, shorter periods 0:10:34.679 --> 0:10:38.120 the last year, the last three years, we've been highly reliable. 0:10:38.160 --> 0:10:42.040 We've been highly available. We've had better availability track records 0:10:42.080 --> 0:10:46.400 than other large cloud providers. Are certainly better than really 0:10:46.440 --> 0:10:48.840 any enterprise I've talked to has been able to achieve 0:10:48.840 --> 0:10:51.040 in their own data centers. So any evidence you've lost 0:10:51.040 --> 0:10:53.319 customers as a result of those, No, We've had a 0:10:53.320 --> 0:10:55.720 lot of conversations. I mean we Uh, we had a 0:10:55.720 --> 0:10:58.080 couple of days of course in December, which you know, 0:10:58.120 --> 0:11:00.600 we're not not good operational days and we own that, 0:11:00.640 --> 0:11:02.400 by the way, you know, we don't we don't run 0:11:02.440 --> 0:11:06.440 away from that. Um. And uh, we learned from them 0:11:06.440 --> 0:11:09.240 and have been really trying to take whatever lessons we 0:11:09.320 --> 0:11:12.680 could to make ourselves even more reliable. But as we've 0:11:12.679 --> 0:11:16.040 talked to customers, uh, they've they've really all you know, 0:11:16.200 --> 0:11:21.319 understood that. Um. While we don't like what happened on 0:11:21.320 --> 0:11:23.480 a day like that at all, if because of our 0:11:23.480 --> 0:11:25.720 customers hurt, you know, we we feel to hurt too. 0:11:26.040 --> 0:11:29.319 That we really have a very strong track record and 0:11:29.600 --> 0:11:32.400 that keeps the partnership strong. People have been asking for 0:11:32.520 --> 0:11:36.000 years whether AWS should be spun off from Amazon. Do 0:11:36.040 --> 0:11:38.959 you spend any time thinking about this or thinking about 0:11:38.960 --> 0:11:43.079 the hypothetical benefits? Really only with folks like you, m 0:11:43.360 --> 0:11:46.240 As it turns out, Uh, honestly not. We We have 0:11:46.320 --> 0:11:49.600 no current plans to spend on AWS. We think that 0:11:50.080 --> 0:11:53.040 our customers are very well served by having a w 0:11:53.280 --> 0:11:56.079 s B a part of Amazon. In fact, so many 0:11:56.240 --> 0:11:59.560 an increasing number of the conversations I have with particularly 0:11:59.559 --> 0:12:03.080 big inn prizes UH they want to make use of 0:12:03.120 --> 0:12:06.560 the capabilities at Amazon has across the company. Whether it's 0:12:07.120 --> 0:12:11.360 energy companies want wanting to um sell us power, whether 0:12:11.440 --> 0:12:14.880 it's auto manufacturers who have electric vehicles that we need 0:12:14.920 --> 0:12:17.840 for our delivery fleets, whether it's UH telcos who want 0:12:17.880 --> 0:12:21.319 to deliver five G enabled services to their consumers around 0:12:21.400 --> 0:12:25.280 things like entertainment and and Amazon Prime Video. Okay, but 0:12:25.480 --> 0:12:27.800 Andy Jesse might have said he never thought about a 0:12:27.840 --> 0:12:31.560 stock split, and recent events show that even in this environment, 0:12:31.600 --> 0:12:34.640 sometimes we have to revisit those sacred cows. Has the 0:12:34.640 --> 0:12:37.559 idea of a split ever come up in a conversation 0:12:37.920 --> 0:12:41.920 with Andy or Jeff, It's it's really not a topic 0:12:41.960 --> 0:12:45.199 of conversation. We were very squarely focused on the way 0:12:45.200 --> 0:12:48.080 we're operating today. We we honestly do not have any 0:12:48.120 --> 0:12:52.439 plans in which I'm aware to uh really entertain split 0:12:52.480 --> 0:12:55.520 off of AWS. We think the way that we're organized 0:12:55.559 --> 0:12:58.440 now is actually very good for customers. That said, the 0:12:58.480 --> 0:13:01.760 market is changing, eulations are dropping. If you look at 0:13:01.800 --> 0:13:04.600 what's happening in the macro environment. How is this impacting 0:13:04.600 --> 0:13:11.480 your strategy around acquisitions? We've seen Microsoft be really opportunistic. Well, 0:13:11.520 --> 0:13:15.880 we've We've very consistently done acquisitions over the really the 0:13:15.880 --> 0:13:19.720 whole history of AWS. I'd say that overall our strategy 0:13:19.760 --> 0:13:23.040 has been to do smaller, tuck in acquisitions. Part of 0:13:23.040 --> 0:13:26.520 that it's because we're trying to build a complete infrastructure 0:13:26.520 --> 0:13:28.840 platform and we want the whole thing to operate as 0:13:28.920 --> 0:13:32.480 a single platform. Casual spectators often point out that Amazon 0:13:32.559 --> 0:13:35.400 doesn't really have a social play. Does Amazon need a 0:13:35.480 --> 0:13:39.520 social play? Could it be could a Twitter makes sense? 0:13:40.800 --> 0:13:43.560 Well that I don't know, but we certainly, I mean 0:13:43.559 --> 0:13:46.360 a big part of all of Amazon's businesses and and 0:13:46.440 --> 0:13:49.880 our strategy into different businesses revolve around partners and our ecosystem. 0:13:50.200 --> 0:13:52.440 Certainly to an AWS it's two and other parts of 0:13:52.480 --> 0:13:57.200 the business as well. So we're very close to many 0:13:57.240 --> 0:14:00.280 companies with a very strong social presence, be it as 0:14:00.520 --> 0:14:03.880 as AWS customers or in our retail business for customer 0:14:03.920 --> 0:14:07.960 acquisition and UH customer messaging, doing more and more in 0:14:08.000 --> 0:14:11.000 the retail business with the shopping experience using social channels. 0:14:11.040 --> 0:14:14.920 So we're very intertwined with social media companies, and I 0:14:14.920 --> 0:14:17.480 would imagine across all of our business what will continue 0:14:17.480 --> 0:14:20.320 to be closely intertwined. One of those is Meta, which 0:14:20.360 --> 0:14:22.880 recently picked Amazon as its long term cloud provider. I'm 0:14:22.880 --> 0:14:24.800 curious if Meta is just giving you a piece of 0:14:24.800 --> 0:14:27.440 their business or if this is a step towards them 0:14:27.480 --> 0:14:31.280 getting out of their own data center business. Well, I 0:14:31.280 --> 0:14:34.360 think you have to ask them that. But we've been 0:14:34.400 --> 0:14:36.680 working with them for quite a while. But we and 0:14:36.720 --> 0:14:39.640 they did announce recently that they were doing a significant 0:14:39.640 --> 0:14:44.680 amount of their machine learning workloads on AWS and would 0:14:44.680 --> 0:14:47.640 be doing more that going forward, and UM, we really 0:14:48.280 --> 0:14:50.680 love that as the next development and our long term 0:14:50.680 --> 0:14:53.800 partnership with them. UM. I do think there's a lot 0:14:53.840 --> 0:14:56.040 of things so we can do with with companies like 0:14:56.120 --> 0:14:59.680 that together. UM to the economics, the agility, the flexibility 0:14:59.720 --> 0:15:02.520 of parading in the cloud, or are just so strong 0:15:02.560 --> 0:15:06.520 and powerful and even for a large sophisticated UH cost 0:15:06.560 --> 0:15:10.000 effective companies, there's still a lot of benefits to operating 0:15:10.000 --> 0:15:13.760 in the cloud. How much companies like that move to 0:15:13.800 --> 0:15:15.960 the cloud, move to AWS will be a function of 0:15:16.240 --> 0:15:19.240 how well do we understand and anticipate their needs and 0:15:19.280 --> 0:15:22.680 how well can we build in a way that's really 0:15:22.680 --> 0:15:25.680 effective for them for their own customer acquisition and retention. 0:15:25.720 --> 0:15:28.120 There's a lot of new exciting technologies out there. Andy 0:15:28.200 --> 0:15:30.800 recently said that Amazon could potentially sell n f t 0:15:31.000 --> 0:15:33.120 s in the future. How do you think about n 0:15:33.160 --> 0:15:36.800 f t S, blockchain, web, three, the metaverse. Where's the 0:15:36.840 --> 0:15:41.000 opportunity there for AWS? Where do you want to play Boy? 0:15:41.040 --> 0:15:43.480 There's just a lot of buzzwords in that center, aren't there? 0:15:43.520 --> 0:15:47.120 There are We're wondering what the actual market opportunity is. 0:15:47.760 --> 0:15:51.160 What fundamentally, you know, what we want to do is 0:15:51.200 --> 0:15:55.040 to enable all of the underlying technologies that our customers 0:15:55.080 --> 0:15:58.200 at AWS. Customers need to build all of those things, 0:15:58.240 --> 0:16:01.440 to build the metaverse, to build you know, three D computing, UH, 0:16:01.520 --> 0:16:05.600 to build a blockchain and cryptocurrency applications, and we're currently 0:16:05.600 --> 0:16:07.760 doing that. So if you look at I mean, gaming 0:16:07.760 --> 0:16:10.280 companies are often where people start when they talk about 0:16:10.520 --> 0:16:13.400 quote unquote metaverse companies. And if you look at companies 0:16:13.440 --> 0:16:16.480 like Riot Games, if you look at epic. Uh, they're 0:16:16.520 --> 0:16:20.320 both you know, very deep AWS customers. If you look 0:16:20.320 --> 0:16:22.760 at Meta which is of course even had had a 0:16:22.840 --> 0:16:26.880 name change. UM, we're doing more with them over time, 0:16:26.880 --> 0:16:31.080 which is which is really gratifying. And so we also 0:16:31.120 --> 0:16:34.240 do a lot we have blockchain services. UH and if 0:16:34.280 --> 0:16:39.080 you look at things like Ethereum, of Ethereum workloads in 0:16:39.120 --> 0:16:42.040 the world run on AWS. So we're doing more and 0:16:42.040 --> 0:16:46.600 more around blockchain, around Ledger technology, around three D and 0:16:46.880 --> 0:16:49.080 spatial computing, which is going to be an important part 0:16:49.280 --> 0:16:52.280 of the metaverse. And UH at the AW strategies to 0:16:52.440 --> 0:16:56.240 really again try and be uh as far out ahead 0:16:56.960 --> 0:17:00.840 of where those emerging metaverse company demand ends and blockchain 0:17:00.880 --> 0:17:04.800 and cryptocurrency customer demands are going to be, and UH 0:17:04.800 --> 0:17:09.920 and deliver really great innovative services. M Amazon Web Services 0:17:09.920 --> 0:17:12.440 CEO Adam Selipsky. There you can catch that full interview 0:17:12.480 --> 0:17:23.760 at Bloomberg dot com. Let's get an update on the 0:17:23.840 --> 0:17:27.280 Musque Twitter saga continuing to go viral. Elon Musk now 0:17:27.320 --> 0:17:30.639 reaching out to potential financing partners across Wall Street. But 0:17:30.640 --> 0:17:33.040 the question is he having any luck. I'm gonna bring 0:17:33.040 --> 0:17:36.240 in Bloomberg's Michelle Davis for more on that, Michelle, who's 0:17:36.280 --> 0:17:39.760 actually considering this? Yeah, so, you know, as we know, 0:17:39.920 --> 0:17:42.160 the most interesting one of the most interesting parts about 0:17:42.200 --> 0:17:44.800 musk S bid for Twitter is that he didn't made 0:17:44.800 --> 0:17:47.359 it public without having the financing lined up. We know 0:17:47.440 --> 0:17:49.720 that as of now, he has started to have financing 0:17:49.720 --> 0:17:53.120 conversations with potential financing partners. At this point, he's only 0:17:53.160 --> 0:17:55.919 focused on raising debt UM. It's our understanding that he 0:17:55.920 --> 0:18:00.000 has yet to initiate conversation around you know, raising equity UM. 0:18:00.160 --> 0:18:02.159 And so it's his bank Morgan Stanley reaching out to 0:18:02.480 --> 0:18:05.800 other big banks UM reaching out to We understand Apollo 0:18:06.080 --> 0:18:09.800 has agreed to participate help you know, finance through debt 0:18:09.840 --> 0:18:12.679 this offer UM. But at this point we also know 0:18:12.720 --> 0:18:15.520 that there are a couple of firms like Blackstone, Brookfield 0:18:15.640 --> 0:18:18.040 and Vista that have at this point said, you know, 0:18:18.200 --> 0:18:20.680 we kind of want to stay away from this situation. 0:18:20.760 --> 0:18:24.280 We're not going to help provide any financing. Do any 0:18:24.320 --> 0:18:27.520 context done? How much how these conversations are actually going. 0:18:27.600 --> 0:18:32.000 Is he putting pressure on on potential investors here, like, Hey, 0:18:32.040 --> 0:18:33.600 if you work with me, you get the benefits of 0:18:33.840 --> 0:18:37.440 working with me, and I've got obviously a huge portfolio. Yeah. 0:18:37.520 --> 0:18:39.639 I mean, so that's one of the big questions that 0:18:39.680 --> 0:18:41.879 we're trying to find out is how exactly what a 0:18:41.880 --> 0:18:45.360 deal be structured. Um. Some things that have been floated 0:18:45.400 --> 0:18:47.600 are you know, maybe investors could come in and they 0:18:47.680 --> 0:18:50.040 might have some certainty baked in that they would have 0:18:50.119 --> 0:18:52.560 veto power over what Musk says. But at this point 0:18:52.600 --> 0:18:54.560 it's very you know, very little. We just know that 0:18:54.720 --> 0:18:58.200 they are reaching out to other banks, other financing sources. 0:18:58.400 --> 0:19:01.200 Morgan Stanley is a bank that's advice saying Elon Musk, 0:19:01.240 --> 0:19:03.359 and so it's our understanding that you know, they would 0:19:03.359 --> 0:19:08.440 help with provide some of the financing for him. But um, yeah, 0:19:08.560 --> 0:19:11.920 unclear exactly you know, how it will be structured. How 0:19:11.960 --> 0:19:13.960 long could it take before it becomes clear whether he 0:19:13.960 --> 0:19:18.040 has money or not. So Elon Musk has indicated that 0:19:18.119 --> 0:19:21.600 he wants to make an official tender offer at some 0:19:21.640 --> 0:19:25.160 point soon. You know, he made a cryptic tweet past 0:19:25.280 --> 0:19:27.160 night that you know, blank is the day. And so 0:19:27.359 --> 0:19:29.400 before he does that tender offer, he's going to need 0:19:29.440 --> 0:19:33.440 to have the financing gund up. Um, so soon when 0:19:33.480 --> 0:19:37.080 would they Well, it is four twenty. I was waiting 0:19:37.080 --> 0:19:39.360 for something, had to happen today, but we've still got 0:19:39.359 --> 0:19:42.200 a few more hours. Michelle Davis, thank you so much. 0:19:50.680 --> 0:19:53.560 And then it's disappointing for investors, and it is for sure. 0:19:53.640 --> 0:19:56.240 It's just a softer seasonal quarter for us. We have 0:19:56.359 --> 0:20:01.600 this addressable market that's expanding over town. Internally, we're really 0:20:01.640 --> 0:20:04.359 geared up and this is like our moment to shine. 0:20:05.760 --> 0:20:08.880 Welcome back to Bloomberg Technology Eclipse from the Netflix earnings 0:20:08.920 --> 0:20:11.439 called I Want to Stick with Netflix, bringing Ross Gerber 0:20:11.440 --> 0:20:16.520 whose investment from Gerber Kawasaki is also an investor in Netflix. Ross, 0:20:16.520 --> 0:20:20.280 this has got to hurt. Yeah, well, you know, it 0:20:20.359 --> 0:20:22.720 hurts for sure on the short term. But if you're 0:20:22.720 --> 0:20:26.280 a long term investor like we are. I bought a 0:20:26.280 --> 0:20:31.080 little bit myself today to be honest, Why why do 0:20:31.080 --> 0:20:36.119 you think, why do you see potential? Well, it's what's 0:20:36.200 --> 0:20:40.080 changed is really in my mind two things. Number one, 0:20:40.680 --> 0:20:42.919 I don't really see the competition as really being the 0:20:42.920 --> 0:20:46.720 biggest issue from other streamers. The competition is with real life, 0:20:47.080 --> 0:20:49.680 and real life is back and people are going out 0:20:49.880 --> 0:20:51.680 and people are going to Vegas and people are going 0:20:51.680 --> 0:20:55.240 to Disneyland, and the problems are just watching less Netflix, 0:20:55.280 --> 0:20:57.360 and and when you look at how many people are 0:20:57.520 --> 0:21:00.520 getting Netflix for free and what that addressable market is, 0:21:00.680 --> 0:21:05.159 which is actually a third of their total subscribers. Um, 0:21:05.240 --> 0:21:07.320 Netflix still has a lot of room they can grow. 0:21:07.760 --> 0:21:10.400 I think another thing a lot of people are talking 0:21:10.400 --> 0:21:13.399 about is this could be a byproduct of the work 0:21:13.440 --> 0:21:16.560 from home culture. You know, Netflix has really struggled with 0:21:16.600 --> 0:21:19.679 the work from home culture because making movies and and 0:21:19.760 --> 0:21:22.520 content is a collaborative process and it's been very difficult. 0:21:22.680 --> 0:21:25.000 And Netflix is called all their employees back into the 0:21:25.080 --> 0:21:28.399 office that's starting I think this month, and I think 0:21:28.960 --> 0:21:31.359 Read Hastings and the team there are the smartest people 0:21:31.359 --> 0:21:33.600 in Hollywood, and they're going to figure out new ways 0:21:33.640 --> 0:21:36.199 to monetize their brand. And I think we just have 0:21:36.280 --> 0:21:40.720 to change the metrics that we're valuing Netflix with towards 0:21:40.760 --> 0:21:45.119 earnings growth and away from subscriber growth. And when you 0:21:45.119 --> 0:21:48.639 look at that, Netflix is a very cheap store. So 0:21:48.720 --> 0:21:51.479 let's talk about the ways that they could unlock new growth. 0:21:51.680 --> 0:21:54.760 One cracking down on password sharing. How much growth is 0:21:54.760 --> 0:21:56.600 that really going to unlock? Then of course there's the 0:21:56.640 --> 0:21:59.919 idea of an ad supported model, a tiered model gaming, 0:22:00.359 --> 0:22:04.120 or maybe it's just making better content, which of all 0:22:04.160 --> 0:22:07.240 of those options seems to be the hardest. Well, better 0:22:07.280 --> 0:22:10.680 content is sort of a nonsensical thing right now. They 0:22:10.680 --> 0:22:13.720 have the most watched shows on television currently. Uh, I 0:22:13.760 --> 0:22:18.639 think it's inventing Hannah, which my wife is watching like NonStop. 0:22:19.040 --> 0:22:21.000 They have the best producers in Hollywood, and they have 0:22:21.000 --> 0:22:23.800 every great project in Hollywood. So the content isn't the issue. 0:22:24.240 --> 0:22:27.439 The issue is monetizing the content in ways that they 0:22:27.480 --> 0:22:29.879 haven't in the past. And I'm a big believer that 0:22:29.960 --> 0:22:34.760 Netflix needs to reinvent the theater experience around their shows 0:22:34.760 --> 0:22:38.160 and movies. And there's many ways they can monetize, between merchandise, 0:22:38.440 --> 0:22:41.400 events and communities they can build around their content, which 0:22:41.400 --> 0:22:44.880 they currently are not. Secondly, you've mentioned to I think 0:22:45.080 --> 0:22:49.240 very important areas, which is an AD supported Netflix Light, 0:22:49.720 --> 0:22:52.639 which they take zero dollars in on ad revenue. And 0:22:52.640 --> 0:22:54.760 you look at a model like YouTube and how much 0:22:54.760 --> 0:22:59.040 money they're printing on advertising and the engagement. Netflix has 0:22:59.080 --> 0:23:01.959 the same engagement level as YouTube, and if they ran ads, 0:23:02.480 --> 0:23:04.960 they would be very successful. And I would advertise on 0:23:05.040 --> 0:23:09.400 Netflix for sure, you know. And so that's another thing. 0:23:09.520 --> 0:23:12.399