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Speaker 1: From Mahard.

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Speaker 2: We're Innovation, Money and Power Collie in Silicon Vallet NBN.

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Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Louvelove.

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Speaker 4: I met Ludlower Caroline Hide in New York. Welcome to

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Speaker 4: a special edition of Bloomberg Technology Live from Kubertina, California.

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Speaker 4: It's glow time and the emphasis Apple's most important event

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Speaker 4: of the year, the tech giant. I'm veiling some major

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Speaker 4: changes to its product line up, a big focus on

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Speaker 4: artificial intelligence and new generation of iPhones and changes to

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Speaker 4: wearables coming out throughout the hour. We're joined by key

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Speaker 4: guests Carolina Milanacy of Creative Strategies, plus a conversation with

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Speaker 4: Ray Wang of Constellation Research. It's Caro, what are you

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Speaker 4: looking at?

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Speaker 5: Here's what else is coming up. Ed tech stocks are

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Speaker 5: bouncing back following their biggest weekly decline in nearly two

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Speaker 5: years last Oracle reporting earnings after the closing belt. Will

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Speaker 5: ai compute demand support the stocks out performance this year,

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Speaker 5: and we discuss AI's potential in biology with the found

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Speaker 5: out of Chai Discovery, which just received backing from Open

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Speaker 5: ai butt. First, we check in on that so called

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Speaker 5: bounce back in the markets because it's dwindling ed. We

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Speaker 5: are still up some four tenths of a percent, but

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Speaker 5: we're not up to the extent that we were in

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Speaker 5: earlier trading. We saw some dip buying most broadly. And look,

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Speaker 5: this was a painful week that we come off. You

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Speaker 5: remember that it was the worst week, worst day that

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Speaker 5: we saw for certain numbers, like in video having its

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Speaker 5: worst day since twenty twenty. Today we see just a

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Speaker 5: little bit of dip by and it's only up a

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Speaker 5: percentage point. Remember how much money, more than four hundred

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Speaker 5: billion dollars lost on this one name alone over the

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Speaker 5: course of what has been some five training days. But

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Speaker 5: today it is all about Apple, and I want to

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Speaker 5: look at how actually this is the worst performer on

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Speaker 5: the nasac inte a points drag on the overall benchmark.

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Speaker 5: We're off by one and a half percent. Looks so

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Speaker 5: much to think about. You've got Webbush, You've got JP

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Speaker 5: Morgan still reiterating that overweight, wanting to see dates, times,

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Speaker 5: price points, but also what about Huawei's event that comes

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Speaker 5: in a few hours time as well. Ed looks as

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Speaker 5: though they're managing to get some pre orders locked in

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Speaker 5: for their trifold phone. That's what's being reported. But get

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Speaker 5: to it. What are we expecting from Apple?

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Speaker 1: Right?

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Speaker 4: Yeah, Apple session lows and it's actually closed down at

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Speaker 4: twelve of the last seventeen product events. Here's what you

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Speaker 4: need to know. Let's get to Bloomberg's Mark German, who's

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Speaker 4: reported in detail what we expect, and Mark, I think

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Speaker 4: we should start with the next generation iPhone because that's

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Speaker 4: usually the point of emphasis. What have you learned our

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Speaker 4: new iPhones?

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Speaker 3: The big models this year will be the Pro versions.

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Speaker 1: Not a lot of new stuff this year.

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Speaker 3: So what we're focusing on as a design that essentially

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Speaker 3: looks the same as last year's model. You're getting some

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Speaker 3: camera upgrades. So on the Pro models right now you

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Speaker 3: have a forty eight megapixel standard camera like the y

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Speaker 3: angle camera.

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Speaker 1: The other two or twelve megapixels.

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Speaker 3: Now they're moving a second camera, the ultra wide angle

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Speaker 3: to a forty eight megapixel.

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Speaker 6: Right.

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Speaker 3: You're also going to get this new button, a camera

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Speaker 3: button that's going to come across all four models, the

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Speaker 3: Pro versions and non pro versions. It's going to be

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Speaker 3: a button on the right side and it's touch sensitive.

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Speaker 3: You can swipe on it to zoom in.

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Speaker 1: And out.

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Speaker 3: You can touch it hard to take a picture, or

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Speaker 3: you can lightly touch it to focus in on a subject.

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Speaker 3: It's sort of like a button that you've been seeing

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Speaker 3: on standard bslrs for many years now.

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Speaker 1: The other changes on.

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Speaker 3: The Pro models are slightly bigger displays and slimmer bezels

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Speaker 3: A eighteen processors across the four.

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Speaker 1: Models to help with Apple Intelligence. But overall, this is

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Speaker 1: a very minor update year over year.

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Speaker 3: The bigger changes are going to be coming to the

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Speaker 3: company's other products, including the Apple Watch and the AirPods.

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Speaker 4: We'll talk about the wearable side of the business. Apple

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Speaker 4: Intelligence is really a focus as well, right, and the

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Speaker 4: chronology of events is important because the new handsets will shit.

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Speaker 4: What at the end of this month, This month you

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Speaker 4: get iOS eighteen point one. What have you reported about

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Speaker 4: the sort of staggered a rollout of Apple Intelligence.

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Speaker 3: Yeah, so Apple Intelligence is not fully baked. I would

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Speaker 3: say it's half baked.

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Speaker 1: At this point, right.

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Speaker 3: So the initial version of Apple Intelligence will come with

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Speaker 3: things like the ability to summarize incoming notifications, the ability

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Speaker 3: to record phone calls and get transcriptions, the ability to

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Speaker 3: use AI to remove people or objects from certain photos.

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Speaker 1: But over time, there's going to.

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Speaker 3: Be more functionality coming, right, So the phones will initially

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Speaker 3: ship without any Apple Intelligence. You'll get a seftwarepdate in

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Speaker 3: October with those first few features I mentioned. You'll get

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Speaker 3: another update in December with chat GPT integration, things like

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Speaker 3: gen Moji's the ability to use AI to create Emoji's

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Speaker 3: image playground for generative AI for image creation. And then

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Speaker 3: next year, not until about March April, is when you're

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Speaker 3: going to get the bigger enhancements to the theory that

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Speaker 3: Apple talked about in June at their developer conference. Right,

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Speaker 3: So this is a very staggered rollout. Now, let's be

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Speaker 3: clear this is not by intention. This is because this

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Speaker 3: was something that was mostly rushed together to get out

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Speaker 3: for this year in response to the big AI praise

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Speaker 3: you've seen from Globle, Meta and others.

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Speaker 5: This is a global product, mark how much will this

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Speaker 5: steady nerves of a sales decline in places such as China.

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Speaker 3: Well, it is a global product, but they're banking heavily

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Speaker 3: on Apple Intelligence to sell its global products. But Apple

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Speaker 3: Intelligence is not going to be available in the nearly

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Speaker 3: thirty countries that make up the European Union and It's

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Speaker 3: also not going to be available in China, which is

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Speaker 3: obviously one of their biggest markets and a big sales driver.

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Speaker 1: Right.

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Speaker 3: I've seen some analysts reports over the last twenty four

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Speaker 3: hours indicating that you're going to see an iPhone supercycle,

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Speaker 3: particularly due to strong sales in China due to Apple Intelligence. Well,

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Speaker 3: Apple Intelligence has not coming to China at least for

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Speaker 3: the foreseeable future, and there's going to be no iPhone supercycle, right.

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Speaker 3: The things that sell iPhones in big quantities or bigger

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Speaker 3: quantities than usual are major design changes.

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Speaker 1: You're not seeing major design changes this year.

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Speaker 2: Right.

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Speaker 3: You're also not seeing as much tent of demand as

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Speaker 3: you may have seen one or two years ago. You're

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Speaker 3: seeing people hold onto their cash longer. So if you're

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Speaker 3: anticipating an iPhone supercycle, I think you should rethink your

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Speaker 3: expectations at least for this year. Where I think you

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Speaker 3: will probably see an iPhone supercycle is maybe next year

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Speaker 3: with the iPhone seventeen, which is going to have bigger

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Speaker 3: design changes, and it's going to launch by the time

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Speaker 3: that Apple Intelligence is fully rolled out and maybe even

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Speaker 3: available on you in China.

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Speaker 4: Bloomberg's Mark Gunman with the reporting of what we expect.

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Speaker 4: Thank you very much. Let's get the analysis with Carolina

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Speaker 4: Milianac creative strategies, principle and list, and let's just pick

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Speaker 4: up where Mark left off. Do we expect a supercycle

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Speaker 4: driven by the sixteen generation and Apple Intelligence?

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Speaker 7: We do not, Okay, and exactly love Mark said. There

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Speaker 7: are a couple of reasons. One is that normally you

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Speaker 7: see a supercycle where there are great design changes that

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Speaker 7: how do we're still drive sales of smartphones? The first

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Speaker 7: thing that you see soft story, something that you discover afterwards,

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Speaker 7: but what gets you into the store is the redesign.

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Speaker 7: And the second part is the fact that right now

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Speaker 7: Apple Intelligence is only available in English, and so that

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Speaker 7: limits the amount of people that can take advantage of it.

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Speaker 4: I find that a really interesting point because, for example,

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Speaker 4: I look at IDC data, an IDC Data forecast that

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Speaker 4: for four year twenty four iPhones basically flat, but next

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Speaker 4: year looks a lot better. Is that just because the

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Speaker 4: expectation is the consumer waits and sees how the rollout

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Speaker 4: of Apple Intelligence goes before getting themselves a new iPhone.

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Speaker 7: I think it's a bit of a delayed gratification as

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Speaker 7: far as the psychle right the idea of that. In

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Speaker 7: my opinion, there's going to be a long tail of

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Speaker 7: sales that Apple Intelligence actually enables, but because of a

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Speaker 7: rollout from a country perspective, the culture or part of

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Speaker 7: Apple Intelligence. It's not just about being half baked or rushed.

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Speaker 7: Is the fact that it takes a lot to actually

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Speaker 7: make Apple Intelligence relevant at a country, language, and cultural level.

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Speaker 7: Is not just a software feature. It takes up so

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Speaker 7: much more that is really linked to the individual user,

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Speaker 7: and so it's going to take longer.

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Speaker 5: What about the good old other devices, what about the

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Speaker 5: air pods? We are expecting a lot from the watches

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Speaker 5: in terms of new innovation. There will that be enough

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Speaker 5: to kick off a new buying cycle.

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Speaker 7: I do think that other devices, there are rumors around

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Speaker 7: the watch and also the AirPods will definitely contribute to

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Speaker 7: Apple really pushing higher sale and revenue. Apple watches become

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Speaker 7: so important to so many people, and not just the

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Speaker 7: basic model that we respect redesigned with Apple Watch ten,

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Speaker 7: but also with the Ultra that obviously has a much

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Speaker 7: higher price point. I do think that that is going

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Speaker 7: to get some excitement and maybe steal the show from

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Speaker 7: a hardware design perspective today.

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Speaker 4: I still want to understand the simple story. How does

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Speaker 4: the consumer and every day technology user actually use Apple Intelligence?

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Speaker 4: Do you know have the answer to that?

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Speaker 7: For me, generally, AI is about taking more out of

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Speaker 7: your device, whether it is you know, your iPhone or

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Speaker 7: your Mac or something else. So from a user perspective,

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Speaker 7: it's making your workload easier. Everything that you're doing should

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Speaker 7: be streamlined because of intelligence. And then the other part

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Speaker 7: with Apple is the fact that Apple knows me very

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Speaker 7: well as a user. You know, they have a lot

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Speaker 7: of information about me. So everything that Apple Intelligence is

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Speaker 7: going to be able to give me is very contenstualized

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Speaker 7: and personal. And I think that's how you get that

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Speaker 7: emotional connection from the user to Apple Intelligence versus you know,

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Speaker 7: we hear a lot from other vendors how you can

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Speaker 7: plan your next vacation or you plan the next party.

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Speaker 7: And I was jokingly saying I need to upgrade my

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Speaker 7: life in order to take advantage of Apple Intelligence or

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Speaker 7: any else, right, But no, it is really that is

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Speaker 7: making using a phone that has become much more complex easier.

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Speaker 5: To that point, Krolina, Apple uses are loyal. It is

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Speaker 5: what makes the company the most valuable in the world

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Speaker 5: from a public perspective. But there is Samsung that already

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Speaker 5: has AI integrated. There is Huawei that's likely to follow

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Speaker 5: in a few hours time with its trifold innovations and

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Speaker 5: already pre selling. Are we ever going to be tempted

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Speaker 5: elsewhere by AI innovations from other places other sources?

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Speaker 7: I think the more you're going to get value from

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Speaker 7: your data and your day to day experience, the harder

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Speaker 7: is going to be for you to move. And we know,

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Speaker 7: of course that Apple Intelligence is one part of the

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Speaker 7: AI that gets delivered through Apple products. GBT is going

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Speaker 7: to be another one, and going forward, I'm expecting to

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Speaker 7: see Gemini as well on Apple products. So the user

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Speaker 7: options to use avers, but then when it comes to

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Speaker 7: the most personal experiences, the trust on the brand is

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Speaker 7: what is going to keep them with.

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Speaker 4: Our bare Krolyne a Milanacy, Prince blandalists that create a strategy,

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Speaker 4: someone that looks at the market, but you're so hands

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Speaker 4: on with all of the available technology as well. Thank you.

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Speaker 5: Tech talks. Can They rebound from their worst weekly performance

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Speaker 5: in nearly two years, and the recent declines have been

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Speaker 5: led by the likes of Nvidia, shedding more than four

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Speaker 5: hundred billion dollars in market cap last week alone. Alex

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Speaker 5: Simonova is here to really talk through the pain trade

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Speaker 5: of last week and spin it forward. We are raising

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Speaker 5: our gains on the day. Why did we see such

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Speaker 5: losses last week and Friday?

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Speaker 8: Yeah, so, last week's so off really highlighted the perils

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Speaker 8: of the high tech concentration that so many people have

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Speaker 8: been worried about for much of this year. When you

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Speaker 8: have one group comprising s big share of the broader market,

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Speaker 8: the so called Magnificent seven stocks making up more than

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Speaker 8: a third of the S and P five hundred index.

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Speaker 8: When the momentum is going in the right direction, you know,

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Speaker 8: it lifts all boats.

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Speaker 5: Things are good.

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Speaker 8: But when you have any kind of growth fears emerge,

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Speaker 8: any kind of disappointing earnings, you know the growth hears

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Speaker 8: that we saw from last week's payrolls data, the momentum

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Speaker 8: goes pretty rapidly to the downside. You have the systemic

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Speaker 8: funds that have been piling into tech, They begin to

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Speaker 8: sell and that accentuates the moves to the downside. And

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Speaker 8: then you have a lot of investors this year, we're

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Speaker 8: chasing the rally, which means that they bought tech stocks

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Speaker 8: at very expensive prices, and so when it's time to

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Speaker 8: de risk, those losses become pretty extreme. Of course, we

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Speaker 8: saw the S and P five hundred post a weekly

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Speaker 8: decline of four percent, its worst week since the SEVB

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Speaker 8: collapse in March twenty twenty three, and then tech stocks

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Speaker 8: their worst week.

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Speaker 5: In two years. Bespoke saying as well, Ultimately stocks are

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Speaker 5: off to their worst September in sixty years. We'll SEEPI

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Speaker 5: will inflation data set us in a better fundamental picture

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Speaker 5: or not? Do you think?

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Speaker 1: Yeah?

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Speaker 8: You know, it seems to be the case. As you mentioned,

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Speaker 8: seasonality is playing a big factor here, going back to

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Speaker 8: nineteen fifty, September is the worst month of the year

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Speaker 8: for stocks, and we're seeing that really play out. But

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Speaker 8: the fundamental picture hasn't changed much. Yes, that Job's data

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Speaker 8: was disappointing, but we aren't seeing pronounced layoffs at this point.

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Speaker 8: If you look at the earnings picture, things are still

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Speaker 8: looking good. Companies are delivering on earnings. We're supposed to

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Speaker 8: see them expand beyond the magnificent seven stocks. We're expecting

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Speaker 8: a rate cut, so things should still farewell.

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Speaker 5: For the rest of the year. Just need Apple to

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Speaker 5: deliver today as well. The worst points drag on the

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Speaker 5: NASDAC Alex sim and Eva, we love having her. Thank

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Speaker 5: you more markets now, Semasha Prinstical Asset Management joins us.

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Speaker 5: We're hearing about the momentum trade that pulls back last week.

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Speaker 5: What about this week? Sema, Hey, thanks for having me on.

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Speaker 9: I think it's a tough environment, to be honest, it

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Speaker 9: seems that tech has become a bit of a barometer

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Speaker 9: for investor sentiment. As we know, there's a lot of

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Speaker 9: question marks a moment around the state of the economy

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Speaker 9: where the FED is going to be quick enough to

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Speaker 9: move so until maybe you get either sufficient evaluation correction

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Speaker 9: improvement fundamentals or you get some really interesting news from

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Speaker 9: one of these companies. I think tech is unfortunately going

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Speaker 9: to have as somewhat challenging couple of months.

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Speaker 4: Seema, good morning is ed here at Apple Park in Cupertino.

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Speaker 4: I think trying to tie today's event to that economic

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Speaker 4: picture you outlined the question around. For example, a super

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Speaker 4: psychle also is dependent on the economic health of the

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Speaker 4: consumer of the buyer. And one place that I'm looking

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Speaker 4: at the moment is the spending power, health of the

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Speaker 4: middle and higher income earners. What does that data set

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Speaker 4: tell you at the moment?

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Speaker 9: Yeah, and I think that's so true. I mean, when

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Speaker 9: we look at the consumer data as you took, as

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Speaker 9: you're looking at a broad perspective, it looks fairly weak. There's

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Speaker 9: a slowing process taking place. But then again, if you

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Speaker 9: look towards the actual income levels, you can see that

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Speaker 9: most of the strains are really limited to the lower

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Speaker 9: income side. The medium to high income simply fairly strong.

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Speaker 9: That they have not been as impacted by high interest rates.

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Speaker 9: So you continue to see that purchasing power. But the

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Speaker 9: problem is is that a lot of the gains, the

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Speaker 9: real wealth gains have been driven by the equity market

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Speaker 9: strengthen the acuity market. So if you get any further

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Speaker 9: concerns about that, you could see that feeding through to

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Speaker 9: middle income hire income households really on to requestion the

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Speaker 9: kind of purchases that they want to make. Apple, of course,

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Speaker 9: folds right in those crosshairs.

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Speaker 5: Sima. We talk a lot to not only institutional investors

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Speaker 5: on the show, but retail investors who have been so excited, enamored,

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Speaker 5: hyped around certain names like in nvidio, double leveraging double

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Speaker 5: two x some of these ETF exposures. Are they right

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Speaker 5: to at the moment? Should we be still focused so

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Speaker 5: much on mag seven?

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Speaker 9: But I think you're right that the retail investor base

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Speaker 9: has been driven a lot.

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Speaker 5: By FOMO for what of a better word.

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Speaker 9: I think FOMA has been a real driver for the

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Speaker 9: continued interest in those MAGA seven on the big brand names. Unfortunately,

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Speaker 9: at the moment that investor's sentiment has deteriorated so that

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Speaker 9: Pomo no longer exists at this point in time.

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Speaker 3: So I think the.

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Speaker 9: Retail investor is taking a look back, say, look, if

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Speaker 9: we're worried about the economy, there has to be some

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Speaker 9: kind of impact on these big brands, and we need

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Speaker 9: to see a point where it starts to look more interesting.

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Speaker 9: From an institutional base, I think the general thesis around

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Speaker 9: tech and THEAI and the impact of Magnificent seven still exists.

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Speaker 9: We're still looking at the companies and saying they will

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Speaker 9: deliver over a five seven year perspective, So it still

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Speaker 9: makes sense to have exposure. But your marginal buyer is

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Speaker 9: probably questioning at the moment these valuations and whether this

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Speaker 9: is the right time to have exposure.

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Speaker 5: That's exactly what we hear. People are trading these names

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Speaker 5: at the moment, and that's what we see the individual

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Speaker 5: volatility on how do you keep the diversification mindset in

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Speaker 5: this market? How are you seeing an opportunity?

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Speaker 9: So episode, when we look at the large tech space,

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Speaker 9: we have maintained our exposure, we have pulled back a

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Speaker 9: little bit, We're still quite overweight, and the reason is

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Speaker 9: that we're still looking at it as a little bit

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Speaker 9: of a defensive play. So these companies they have the quality,

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Speaker 9: they've got the large balance sheets, the cash flow, which

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Speaker 9: means that they shouldn't continue to do well even if

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Speaker 9: there isn't a macdanton and we will be looking for

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Speaker 9: opportunities to increase exposure. But at this point in time,

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Speaker 9: a lot of it is around diversifications, so not just

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Speaker 9: having exposure to tech, but other parts of the market

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Speaker 9: which are a little bit more defensive, so your typical

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Speaker 9: defensive place such as utilities, some of those consumer staples

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Speaker 9: as well.

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Speaker 1: Sam.

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Speaker 4: I've asked you on Bloomberg Technology before how you use

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Speaker 4: generative AI in your professional and daily life, and I

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Speaker 4: think the next extension of that you're seeing any evidence whatsoever,

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Speaker 4: that all the investment and capital expenditure into capacity to

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Speaker 4: build generative AI tool is translating into productivity gains in

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Speaker 4: any of the economies with which you're concerned more response.

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Speaker 9: So you are hearing news, corporate news really specifically of

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Speaker 9: companies saying that they have seen a productivity gain or

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Speaker 9: that they're envisaging that if they were to invest further

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Speaker 9: into AI, there will be some significant productivity gains. Even

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Speaker 9: if you look at the UK government, it's something that

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Speaker 9: they talk about repeatedly that if they were to invest

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Speaker 9: in those areas that they could see further government savings

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Speaker 9: over the coming years.

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Speaker 5: In terms of if it's.

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Speaker 9: Coming to fruition, I'm not necessarily seeing so much of

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Speaker 9: that news, but there is still that expectation that ALI

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Speaker 9: will deliver and it still sits at the frontier of

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Speaker 9: all productivity gains and even growth gains over thecoming future.

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Speaker 5: Seema, we were discussing but a week or so ago,

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Speaker 5: if in Video or the FED were more important, what

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Speaker 5: is it for you now?

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Speaker 9: So I think that you know they still they both

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Speaker 9: have a very significant impact on the market, if anything,

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Speaker 9: on a day by day basis of to actually argue

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Speaker 9: that in Vidia does. But as I said, I think

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Speaker 9: these companies are almost a barometer of investor sentiment, and

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Speaker 9: at the moment, investor sentiment is being driven by what

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Speaker 9: the market thinks the FED is going to do. So

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Speaker 9: if we were to see the FED coming in with

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Speaker 9: a sizeable interest rate cut next week and also downplaying

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Speaker 9: the concerns of recession, then I think investor sentiment would

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Speaker 9: improve and you could see an and them plicit bounced

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Speaker 9: back in a lot of these Max seven. So much

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Speaker 9: of it is tied together at this point.

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Speaker 4: Seema very quickly. What's the biggest headwind that we're not

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Speaker 4: talking about the technology investors might face.

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Speaker 9: I do think that the China story, we all know

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Speaker 9: that it's there. I don't think Whate's ignoring it. But

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Speaker 9: I think we have got growing concerns about the strength

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Speaker 9: of the consumer in China, where the economy is going,

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Speaker 9: and of course, given the tech cycle, how much that

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Speaker 9: feeds into tech demand I think is probably one of

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Speaker 9: the areas that we're going to be watching most closely

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Speaker 9: over the coming months.

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Speaker 5: Smasha, Principal Asset Management are joined to have you thank

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Speaker 5: you coming up, We're talking tech. The headlines you need

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Speaker 5: to know plus much more from Coopertino, counting you down

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Speaker 5: to Apple's big launch event one pm Eastern, telling M

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Speaker 5: local this a blueberg technology time now talking tech first

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Speaker 5: up in video backed Skana AI sees potential for more

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Speaker 5: strategic partnerships in Japan. This is as rising US China

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Speaker 5: tensions spur the country to boost its own AI ecosystem.

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Speaker 5: Sacana CEO David has spoke with Bloomberg saying his recent

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Speaker 5: funding round of over one hundred million dollars was more

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Speaker 5: than enough ammunition to develop its tech plus. Japanese chip

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Speaker 5: startup Rapidness is seeking to raise nearly seven hundred million

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Speaker 5: dollars from a new and existing investors. Now, the company

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Speaker 5: plans to issue new shares to finance its chip development

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Speaker 5: efforts and the construction of its foundry in Hokkaido. Rapidus

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Speaker 5: aims to challenge industry leader t SMC and initially planned

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Speaker 5: to seek a loan before opting for investments. Meanwhile, Google

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Speaker 5: heads back to court. The search engine giant is set

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Speaker 5: to face allegations from the US Justice Department. Then it

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Speaker 5: manipulates that six are seventy seven billion dollar display advertising

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Speaker 5: market violating and trust laws. This comes just one month

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Speaker 5: after it lost the landmark ruling that illegally dominated online search.

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Speaker 5: Now coming up, we're going to be tall king not

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Speaker 5: only about Apple, but Huawei too, and also Apple within China.

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Speaker 5: Ray Wang from Constellation Research to discuss the big event

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Speaker 5: in Kupatino and then the big Huaweih showdown from New York.

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Speaker 5: From Kubatino, this is Bloomberg Technology.

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Speaker 4: Welcome back to a special edition of Bloomberg Technology.

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Speaker 5: I'm Ed Ludlow.

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Speaker 4: Caroline hides out in New York. But right now we're

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Speaker 4: live from Apple Park in Cupertino, California, and it's glow time.

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Speaker 4: The emphasis on a new generation of iPhone, a refreshed

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Speaker 4: wearables offering, and the future of AI. Our live coverage

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Speaker 4: continues in just a few moments time a conversation with

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Speaker 4: Ray Wang of Consolation Research. But Caro, we got to

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Speaker 4: check in on these markets.

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Speaker 5: We do because last week was brutal and we know

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Speaker 5: that we gave up what was more than four one

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Speaker 5: hundred billion and one name alone over the course of

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Speaker 5: five trading days. We had the worst week for the

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Speaker 5: NASACK six two thousand, well twenty twenty two. Now NASDAK

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Speaker 5: now up six tens percent, not managing to hold on

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Speaker 5: to previous gains. The stock six hundred is up three

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Speaker 5: quarters percent, So actually we are seeing a risk on

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Speaker 5: sentiment worldwide, although we are fading some of those gains.

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Speaker 5: Bitcoin up one and a half percent. Fifty five thousand

440
00:22:20,840 --> 00:22:24,560
Speaker 5: eight straight days of net outflows from those Bitcoin ETFs.

441
00:22:24,840 --> 00:22:26,680
Speaker 5: Are we going to start to see people treading back

442
00:22:26,720 --> 00:22:29,600
Speaker 5: into putting money in these ets exposed to spot Bitcoin

443
00:22:29,640 --> 00:22:32,080
Speaker 5: move on? Have a look at some of the individual names. Actually,

444
00:22:32,119 --> 00:22:35,119
Speaker 5: on Friday, amid the turbulence, we saw Roadblocks give some

445
00:22:35,119 --> 00:22:37,480
Speaker 5: big announcements, the CEO saying their new goal is for

446
00:22:37,560 --> 00:22:40,600
Speaker 5: ten percent of the global video game content revenue. They

447
00:22:40,640 --> 00:22:42,680
Speaker 5: were hire earlier on training We're now falling some eight

448
00:22:42,680 --> 00:22:45,600
Speaker 5: tens percent for that particular name. Armou holds on to

449
00:22:45,680 --> 00:22:49,479
Speaker 5: its gains, up almost four percent. Why well, it's all

450
00:22:49,560 --> 00:22:53,200
Speaker 5: around those reports that its own technology, its own chip designs.

451
00:22:53,320 --> 00:22:56,520
Speaker 5: Will We're powering Apple's iPhone sixteen. The Apple will will

452
00:22:56,520 --> 00:23:00,119
Speaker 5: reveal the A eighteen ship we understand on Monday with

453
00:23:00,160 --> 00:23:04,400
Speaker 5: the company embracing Arm's newest V nine chip design. We'll

454
00:23:04,440 --> 00:23:07,000
Speaker 5: see whether that comes to fruition. Meanwhile, Apple off by

455
00:23:07,000 --> 00:23:09,080
Speaker 5: three quarters of percent, and that is the biggest points

456
00:23:09,160 --> 00:23:12,920
Speaker 5: drag across the indexes today. And we want to talk

457
00:23:12,920 --> 00:23:15,840
Speaker 5: more about Apple. Turned to today's big take. It focuses

458
00:23:15,840 --> 00:23:20,280
Speaker 5: on Apple's transition from tech rebel to tech overlord. Liume

459
00:23:20,280 --> 00:23:23,560
Speaker 5: Meg's Max Chafkin Crow wrote this piece which is getting

460
00:23:23,640 --> 00:23:26,720
Speaker 5: a lot of traction on the terminal and online. Max,

461
00:23:27,000 --> 00:23:29,840
Speaker 5: this is a company that back in the day was

462
00:23:29,880 --> 00:23:31,879
Speaker 5: the rebel and now it's the most valuable company in

463
00:23:31,880 --> 00:23:32,240
Speaker 5: the world.

464
00:23:33,040 --> 00:23:33,280
Speaker 9: Yeah.

465
00:23:33,320 --> 00:23:36,119
Speaker 2: Absolutely, and I mean just in that stark way. Of course,

466
00:23:36,160 --> 00:23:39,000
Speaker 2: it's been a reversal, but in the same way that

467
00:23:39,119 --> 00:23:41,639
Speaker 2: you know, back forty years ago, Apple was arguing that

468
00:23:41,640 --> 00:23:44,520
Speaker 2: there were these larger competitors IBM, you know, sort of

469
00:23:44,520 --> 00:23:47,919
Speaker 2: most prominently, that we're dominating unfairly. You have, you know,

470
00:23:48,000 --> 00:23:51,399
Speaker 2: sort of a swirl of critics, including regulators around the world,

471
00:23:52,280 --> 00:23:55,080
Speaker 2: the DOJ, as well as you know, some of Apple's

472
00:23:55,080 --> 00:23:59,760
Speaker 2: biggest partners starting to sort of loudly say that, you know,

473
00:24:00,080 --> 00:24:02,119
Speaker 2: something needs to be done. And when you even when

474
00:24:02,160 --> 00:24:05,080
Speaker 2: you look at the kind of like the body language,

475
00:24:05,119 --> 00:24:08,119
Speaker 2: the language around these launches, you really see just how

476
00:24:08,359 --> 00:24:11,320
Speaker 2: you know, there is a gravity around Cooper, Tino not

477
00:24:11,480 --> 00:24:13,720
Speaker 2: just today, not just on an announcement day, but in

478
00:24:13,760 --> 00:24:15,800
Speaker 2: the tech industry in general and really in the global

479
00:24:15,840 --> 00:24:17,120
Speaker 2: economy more broadly.

480
00:24:17,800 --> 00:24:23,720
Speaker 5: What about Apple's defense? They just say that better Apple's defense.

481
00:24:23,960 --> 00:24:27,280
Speaker 2: And you know this starts to parallel other sort of

482
00:24:27,359 --> 00:24:32,000
Speaker 2: conversations around other large technology companies. Is essentially that customers

483
00:24:32,080 --> 00:24:35,200
Speaker 2: love us. That like you're the Department of Justice, which

484
00:24:35,320 --> 00:24:39,760
Speaker 2: dropped a big lawsuit back in March, you know, alleging

485
00:24:40,040 --> 00:24:43,520
Speaker 2: customer harm. Apple says, this thing that you're attacking, which

486
00:24:43,560 --> 00:24:46,320
Speaker 2: is the fact that our stuff works better together than

487
00:24:46,359 --> 00:24:49,280
Speaker 2: it does with anything else, is exactly the thing that

488
00:24:49,400 --> 00:24:51,280
Speaker 2: customers care about.

489
00:24:51,320 --> 00:24:51,359
Speaker 7: It.

490
00:24:51,600 --> 00:24:54,399
Speaker 2: It's the thing that has differentiated us, and it's the

491
00:24:54,480 --> 00:24:56,680
Speaker 2: thing that will you know, make our products continue to

492
00:24:56,720 --> 00:24:58,720
Speaker 2: sell well. So that's where the debate really.

493
00:24:58,560 --> 00:25:02,760
Speaker 4: Is, Max, what a p to drop on iPhone day

494
00:25:02,800 --> 00:25:04,680
Speaker 4: of all days? I mean, the work counts what four

495
00:25:04,720 --> 00:25:07,080
Speaker 4: thousand words? But I got through it. And what you

496
00:25:07,200 --> 00:25:10,040
Speaker 4: do is you document the history of this company and

497
00:25:10,080 --> 00:25:14,280
Speaker 4: then pose the question, for all the regulatory pressure, the strategy,

498
00:25:14,320 --> 00:25:17,000
Speaker 4: the competition, will it matter. And I think in the

499
00:25:17,040 --> 00:25:18,600
Speaker 4: short term the answer is no.

500
00:25:19,760 --> 00:25:22,200
Speaker 2: Yeah, I mean the answer for sure and the short

501
00:25:22,240 --> 00:25:24,800
Speaker 2: term is no, you know, the Department of Justice is saying, hey,

502
00:25:24,840 --> 00:25:27,000
Speaker 2: it's really bad that you dominate all these markets that

503
00:25:27,040 --> 00:25:29,119
Speaker 2: you have, all the profits that like there are no

504
00:25:29,200 --> 00:25:32,400
Speaker 2: competitors here, and you know, those are exactly the sorts

505
00:25:32,440 --> 00:25:35,199
Speaker 2: of things that Wall Street investors tend to like. You know,

506
00:25:35,240 --> 00:25:38,399
Speaker 2: It's why Apple is the most valuable company in the world.

507
00:25:38,640 --> 00:25:40,600
Speaker 2: I think when you start to ask, Okay, what is

508
00:25:40,640 --> 00:25:42,720
Speaker 2: the long term what's going to be the long term

509
00:25:42,720 --> 00:25:45,440
Speaker 2: consequence here, that's where the hard questions start.

510
00:25:45,720 --> 00:25:46,360
Speaker 5: I mean, you.

511
00:25:46,480 --> 00:25:49,320
Speaker 2: Do have a sense and this is this is a

512
00:25:49,320 --> 00:25:51,600
Speaker 2: conversation that's been going on probably for a decade, but

513
00:25:52,000 --> 00:25:54,679
Speaker 2: has gotten louder that Apple, you know, for all it's

514
00:25:54,720 --> 00:25:58,119
Speaker 2: reputation for innovation and so on, has has maybe you know,

515
00:25:58,160 --> 00:26:00,480
Speaker 2: maybe lost a step, as critics would say. And then

516
00:26:00,600 --> 00:26:04,280
Speaker 2: you do have these sort of very slow moving regulatory actions.

517
00:26:04,320 --> 00:26:07,760
Speaker 2: But we're regulatory actions that of course can have consequences.

518
00:26:07,760 --> 00:26:10,560
Speaker 2: You know, we're seeing this Department of Justice, second Department

519
00:26:10,560 --> 00:26:13,679
Speaker 2: of Justice case against Google, Department of Justice seeking to

520
00:26:13,720 --> 00:26:16,840
Speaker 2: break up Apple. You know that those are the kinds

521
00:26:16,880 --> 00:26:20,520
Speaker 2: of things that Apple is going to have to contend

522
00:26:20,560 --> 00:26:23,200
Speaker 2: with and perhaps contemplate in the years.

523
00:26:22,920 --> 00:26:27,000
Speaker 4: To come Bloomberg's Max Chafkin with that big take, just

524
00:26:27,080 --> 00:26:30,760
Speaker 4: incredible and detailed writing on an important day. But there's

525
00:26:30,800 --> 00:26:34,520
Speaker 4: one area where perhaps Apple isn't as dominant, an area

526
00:26:34,600 --> 00:26:37,439
Speaker 4: where it's still proving the work that it's done, and

527
00:26:37,480 --> 00:26:41,240
Speaker 4: that is in the domain of artificial intelligence or Apple intelligence.

528
00:26:41,520 --> 00:26:44,720
Speaker 4: Let's get some analysis with Constellation Research. Is Ray Wang,

529
00:26:44,720 --> 00:26:48,560
Speaker 4: who's in his hometown right next to me. I mean,

530
00:26:48,560 --> 00:26:51,280
Speaker 4: we can get to the discussion about a super cycle

531
00:26:51,359 --> 00:26:55,240
Speaker 4: about year on year generations of iPhone, But for me,

532
00:26:55,720 --> 00:26:58,919
Speaker 4: the simple question is does the consumer or iOS user

533
00:26:59,200 --> 00:27:02,840
Speaker 4: understand how they're going to use it hospicial intelligence through

534
00:27:02,880 --> 00:27:05,199
Speaker 4: Apple Intelligence in their daily lives, you.

535
00:27:05,200 --> 00:27:06,760
Speaker 10: Know, And I think what's been happening all the time

536
00:27:06,840 --> 00:27:08,639
Speaker 10: is the fact that you know they have it in

537
00:27:08,680 --> 00:27:11,080
Speaker 10: the background. It's ambient the ability to write better, the

538
00:27:11,080 --> 00:27:13,480
Speaker 10: ability to take an image and have it actually transform

539
00:27:13,520 --> 00:27:16,679
Speaker 10: into a picture, the ability to actually suggest make suggestions

540
00:27:16,720 --> 00:27:19,200
Speaker 10: for you grammatically. That's all been happening in the background.

541
00:27:19,200 --> 00:27:22,160
Speaker 10: And Apple's view on AI is very different than everyone else's.

542
00:27:22,200 --> 00:27:25,800
Speaker 10: It's mass personalization at scale, it's privacy, and more important,

543
00:27:25,880 --> 00:27:28,480
Speaker 10: it's the ability to actually do that in the background.

544
00:27:28,520 --> 00:27:30,960
Speaker 10: As an ambient experience. That's what makes it so special,

545
00:27:31,119 --> 00:27:33,440
Speaker 10: and people trust them much more than other AIS.

546
00:27:33,680 --> 00:27:37,960
Speaker 4: I find the chronology and timeline of what's to happen interesting.

547
00:27:38,000 --> 00:27:40,440
Speaker 4: I have an iPhone fifteen pro. When we were here

548
00:27:40,440 --> 00:27:43,280
Speaker 4: one year ago, I went out and upgrade. Did will

549
00:27:43,320 --> 00:27:47,639
Speaker 4: I upgrade in the sixteen? I don't know? But Apple

550
00:27:47,680 --> 00:27:50,280
Speaker 4: Intelligence will be available to me. Nonetheless, how do you

551
00:27:50,359 --> 00:27:51,000
Speaker 4: interpret that?

552
00:27:51,240 --> 00:27:54,280
Speaker 10: Yeah, I think it's really important. A mass majority of

553
00:27:54,280 --> 00:27:57,240
Speaker 10: subscribers are basically on a subscription model, and so they're

554
00:27:57,240 --> 00:27:59,400
Speaker 10: just going to renew on that cycle. So every three years,

555
00:27:59,400 --> 00:28:01,359
Speaker 10: every four years, that's going to be the area that

556
00:28:01,400 --> 00:28:03,359
Speaker 10: you see that. So the move to FI G that

557
00:28:03,520 --> 00:28:05,440
Speaker 10: was actually one of the moves. The move to AI

558
00:28:05,560 --> 00:28:06,919
Speaker 10: is going to be the next set of moves, and

559
00:28:06,960 --> 00:28:09,720
Speaker 10: that's causing the refresh cycle. There's one point three four

560
00:28:09,840 --> 00:28:12,119
Speaker 10: billion iPhones out there, and of course it's going to

561
00:28:12,160 --> 00:28:14,480
Speaker 10: be a two hundred and forty million recycle refresh cycle,

562
00:28:14,520 --> 00:28:16,760
Speaker 10: the two hundred fifty million refresh cycle that's going to

563
00:28:16,800 --> 00:28:19,040
Speaker 10: happen every three to four years, and especially if you've

564
00:28:19,040 --> 00:28:21,560
Speaker 10: got to carry a contract where you're paying monthly fee

565
00:28:21,560 --> 00:28:22,760
Speaker 10: and subscription.

566
00:28:22,320 --> 00:28:27,359
Speaker 5: Revenue ray that cycle, you talk of those numbers that

567
00:28:27,520 --> 00:28:31,320
Speaker 5: need updating and upgrading. They're not just in America, they're

568
00:28:31,320 --> 00:28:33,560
Speaker 5: in China and they're in the EU. We've just heard

569
00:28:33,560 --> 00:28:37,080
Speaker 5: about the limitations of Apple Intelligence there and also the

570
00:28:37,119 --> 00:28:39,920
Speaker 5: market that's being hoovered up by Huawei. What do you

571
00:28:39,960 --> 00:28:40,920
Speaker 5: make of that competition.

572
00:28:41,360 --> 00:28:43,840
Speaker 10: Yeah, so Huawei's competition is going to be limited. They

573
00:28:43,840 --> 00:28:46,200
Speaker 10: won't be able to actually sell in the US. So

574
00:28:46,240 --> 00:28:48,440
Speaker 10: even if they have three million orders as they mentioned

575
00:28:48,560 --> 00:28:51,120
Speaker 10: already in v mall, that's going to change the market

576
00:28:51,200 --> 00:28:53,840
Speaker 10: just in the outside markets outside of the US. But

577
00:28:53,960 --> 00:28:56,600
Speaker 10: you also see Apple pushing hard into India and that

578
00:28:56,680 --> 00:28:59,040
Speaker 10: growing market. I mean, it's a status symbol, it's a

579
00:28:59,120 --> 00:29:02,160
Speaker 10: luxury device, it's not just a functional utility. So that's

580
00:29:02,200 --> 00:29:04,520
Speaker 10: a very very different market, and they're pricing it different.

581
00:29:04,600 --> 00:29:07,120
Speaker 10: They're coming at it from different price points and market points.

582
00:29:07,160 --> 00:29:11,520
Speaker 4: There is something fascinating happening in China, which is very simple.

583
00:29:11,840 --> 00:29:16,520
Speaker 4: Apple Intelligence will not be available there, but they're cited nonetheless,

584
00:29:16,760 --> 00:29:19,440
Speaker 4: So even if they can't access it now, they might

585
00:29:19,680 --> 00:29:22,760
Speaker 4: upgrade because of the promise that it will come eventually.

586
00:29:23,240 --> 00:29:25,640
Speaker 4: What does your research tell you about that phenomenon?

587
00:29:25,680 --> 00:29:28,040
Speaker 10: I guess no, we see that happening everywhere. People are

588
00:29:28,080 --> 00:29:30,280
Speaker 10: looking forward to some of those features. I think at

589
00:29:30,280 --> 00:29:31,640
Speaker 10: the end of the day, Apple's going to have to

590
00:29:31,640 --> 00:29:33,560
Speaker 10: comply to country regulations. They're going to have to do

591
00:29:33,560 --> 00:29:34,920
Speaker 10: it for the EU, They're going to have to do

592
00:29:34,960 --> 00:29:38,040
Speaker 10: it for China. EI regulations are going to be very regional.

593
00:29:38,160 --> 00:29:40,000
Speaker 10: You might see that emerge as well in the Middle East.

594
00:29:40,040 --> 00:29:41,680
Speaker 10: I'm headed out to the Middle East for the Global

595
00:29:41,680 --> 00:29:43,480
Speaker 10: AI Summit and we're going to be talking about and

596
00:29:43,520 --> 00:29:44,760
Speaker 10: hearing some of those things as well.

597
00:29:45,480 --> 00:29:47,840
Speaker 5: Where are you worried? It doesn't sound like you are.

598
00:29:47,880 --> 00:29:51,920
Speaker 5: It sounds like even with market no longer being the

599
00:29:51,960 --> 00:29:54,960
Speaker 5: top five player in China for Apple, and indeed some

600
00:29:55,000 --> 00:29:57,480
Speaker 5: of these limitations in the EU, it sort of doesn't matter.

601
00:29:57,560 --> 00:29:59,959
Speaker 5: You think there will be a super cycle no matter

602
00:30:00,160 --> 00:30:00,320
Speaker 5: of what.

603
00:30:00,800 --> 00:30:03,440
Speaker 10: I definitely believe in that super cycle because all the

604
00:30:03,560 --> 00:30:07,000
Speaker 10: forces of subscription, all the forces in terms of you know,

605
00:30:07,520 --> 00:30:10,000
Speaker 10: status symbol, and of course the features that are going

606
00:30:10,040 --> 00:30:12,440
Speaker 10: they might be they might be spec bumps, but the

607
00:30:12,520 --> 00:30:14,800
Speaker 10: bottom line is consumers are going to stick with what

608
00:30:14,840 --> 00:30:17,600
Speaker 10: they have given their ecosystem, given the access to Apple

609
00:30:17,680 --> 00:30:20,480
Speaker 10: services and more importantly the fact that you know that

610
00:30:21,120 --> 00:30:23,680
Speaker 10: is their only access point right now in terms of

611
00:30:23,680 --> 00:30:24,800
Speaker 10: privacy and AI.

612
00:30:24,880 --> 00:30:28,080
Speaker 4: Very real quick wearables refresh how important?

613
00:30:28,320 --> 00:30:30,280
Speaker 10: Oh I think the world are important because that's the

614
00:30:30,400 --> 00:30:32,680
Speaker 10: entry point for a lot of folks. So watch refresh.

615
00:30:32,720 --> 00:30:34,600
Speaker 10: It's going to be important and maybe we'll see something

616
00:30:34,600 --> 00:30:35,720
Speaker 10: for AirPods, ray.

617
00:30:35,680 --> 00:30:39,920
Speaker 4: Rang Constellation research always on it, always star at Caroline,

618
00:30:39,960 --> 00:30:40,240
Speaker 4: what you.

619
00:30:40,200 --> 00:30:43,719
Speaker 5: Got and bullish ed bullish coming up AI startup Chi

620
00:30:43,840 --> 00:30:47,960
Speaker 5: Discovery receiving backing from investors including open Ai. We're discussed

621
00:30:48,000 --> 00:30:50,280
Speaker 5: with the found in next. This is brttly big technology.

622
00:31:00,440 --> 00:31:03,800
Speaker 5: Eil Musk is reportedly working on a deal that would

623
00:31:03,880 --> 00:31:07,719
Speaker 5: leverage his XAI startups data in exchange for some of

624
00:31:07,760 --> 00:31:11,000
Speaker 5: Tesla's revenue. Nam most Kurt Wagner joins us some more

625
00:31:11,000 --> 00:31:14,360
Speaker 5: and what is a Wall Street journal piece again about

626
00:31:14,360 --> 00:31:17,920
Speaker 5: the intertwine of his companies. Can you tell us what

627
00:31:18,000 --> 00:31:21,080
Speaker 5: is being reported on? What would get in exchange? What

628
00:31:21,120 --> 00:31:23,280
Speaker 5: would XAI give to Tesla?

629
00:31:23,400 --> 00:31:27,760
Speaker 11: So in this you know proposed deal, Xai would help

630
00:31:27,840 --> 00:31:31,960
Speaker 11: Tesla with some of their full self driving technology, other

631
00:31:32,040 --> 00:31:35,680
Speaker 11: AI projects including you know, the humanoid robot project that

632
00:31:36,160 --> 00:31:39,240
Speaker 11: Tesla is working on, and exchange for a share of

633
00:31:39,360 --> 00:31:42,400
Speaker 11: revenue that's driven by these projects, right, and Caroline, as

634
00:31:42,400 --> 00:31:44,440
Speaker 11: you mentioned, we were just talking about this last week, Right,

635
00:31:44,480 --> 00:31:47,880
Speaker 11: this idea of all of the different companies in Elon's

636
00:31:47,920 --> 00:31:50,920
Speaker 11: universe working together and the pros and cons of those.

637
00:31:50,920 --> 00:31:52,120
Speaker 11: I think in this case, you know, if you're an

638
00:31:52,160 --> 00:31:54,000
Speaker 11: ex Ai investor, this sounds like a great deal.

639
00:31:54,080 --> 00:31:54,200
Speaker 1: Right.

640
00:31:54,240 --> 00:31:56,720
Speaker 11: Suddenly you have a huge you know, potential revenue stream,

641
00:31:56,760 --> 00:32:00,840
Speaker 11: a huge potential client in Tesla. I imagine Tesla investors

642
00:32:00,840 --> 00:32:03,040
Speaker 11: may feel slightly different, But I think this is yet

643
00:32:03,080 --> 00:32:07,160
Speaker 11: another example of the Elon world starting to collide with

644
00:32:07,200 --> 00:32:08,520
Speaker 11: all of his various businesses.

645
00:32:08,840 --> 00:32:12,040
Speaker 5: That has been pushed back from certain Tesla investors about

646
00:32:12,080 --> 00:32:15,400
Speaker 5: the sharing of chips, for example, and video chips. Now

647
00:32:15,600 --> 00:32:19,040
Speaker 5: Elon's own response to this very story has been pushed back,

648
00:32:19,080 --> 00:32:21,920
Speaker 5: and indeed he was saying previously, well, the chips sort

649
00:32:21,920 --> 00:32:24,040
Speaker 5: of laying around in a warehouse unless I put them

650
00:32:24,080 --> 00:32:28,240
Speaker 5: to work for Xai. Will we hear more investor pushback?

651
00:32:28,440 --> 00:32:31,040
Speaker 11: I think you might, because there is this feeling that

652
00:32:31,160 --> 00:32:34,640
Speaker 11: Elon right now is using Tesla sort of the crown

653
00:32:34,760 --> 00:32:38,480
Speaker 11: jewel of this empire. He has to elevate or boost

654
00:32:38,520 --> 00:32:41,520
Speaker 11: his other businesses, right, Xai being one of them. Now again,

655
00:32:41,880 --> 00:32:45,200
Speaker 11: I think those two companies probably share a lot of investors,

656
00:32:45,240 --> 00:32:47,400
Speaker 11: So maybe there are some folks who are invested in

657
00:32:47,480 --> 00:32:49,000
Speaker 11: Xai who would say, hey, this is a.

658
00:32:48,920 --> 00:32:50,200
Speaker 1: Great opportunity for us.

659
00:32:50,360 --> 00:32:52,640
Speaker 11: But if you are just invested in Tesla's you'd be

660
00:32:52,640 --> 00:32:56,040
Speaker 11: asking yourself, well, why are we giving business to Elon's

661
00:32:56,080 --> 00:32:58,000
Speaker 11: other company that I have nothing to do with? Right,

662
00:32:58,000 --> 00:33:00,440
Speaker 11: So I do imagine there will be some invests here

663
00:33:00,640 --> 00:33:02,800
Speaker 11: are who are at least scratching their heads saying, is

664
00:33:02,840 --> 00:33:05,840
Speaker 11: this really the best option or the best opportunity for us,

665
00:33:05,920 --> 00:33:08,000
Speaker 11: or is this just the best opportunity for Elon and

666
00:33:08,080 --> 00:33:09,040
Speaker 11: his other businesses.

667
00:33:09,640 --> 00:33:12,400
Speaker 4: When he responded to that Wall Street Journal report, he

668
00:33:12,480 --> 00:33:15,000
Speaker 4: said he hadn't read it, but that it wasn't accurate,

669
00:33:15,040 --> 00:33:18,760
Speaker 4: But he did concede that at a basic level, XAI

670
00:33:18,880 --> 00:33:22,240
Speaker 4: engineers speak to Tesla engineers. And I remember the week

671
00:33:22,280 --> 00:33:27,360
Speaker 4: that Elon Musk walked into what was Twitter headquarters. Now

672
00:33:27,680 --> 00:33:30,440
Speaker 4: x you and I reported. The first thing we reported

673
00:33:30,960 --> 00:33:34,400
Speaker 4: is that Elon brought in Tesla engineers to basically cod

674
00:33:34,440 --> 00:33:37,400
Speaker 4: assess the staff. And this is kind of normal right

675
00:33:37,480 --> 00:33:40,760
Speaker 4: in Elon inc That there's a sort of more casual

676
00:33:40,840 --> 00:33:43,560
Speaker 4: relationship between the companies and its stuff.

677
00:33:43,400 --> 00:33:46,600
Speaker 11: One hundred percent normal. This is exactly what Elon you know,

678
00:33:46,720 --> 00:33:49,560
Speaker 11: has done, has shown to do. He shares employees, he

679
00:33:49,640 --> 00:33:53,280
Speaker 11: shares resources among companies. You know, if you work for

680
00:33:53,360 --> 00:33:55,680
Speaker 11: Elon at one company, you kind of work for the

681
00:33:55,720 --> 00:33:57,720
Speaker 11: Elon universe of companies.

682
00:33:57,760 --> 00:33:59,280
Speaker 1: So I think we have seen this happen.

683
00:33:59,560 --> 00:34:02,080
Speaker 11: You know, as you mentioned, Edgie's pushing back on the story,

684
00:34:02,120 --> 00:34:04,800
Speaker 11: but oftentimes you push us back on things that end up.

685
00:34:04,760 --> 00:34:06,760
Speaker 1: Being true or at least mostly true.

686
00:34:06,960 --> 00:34:09,160
Speaker 11: So it's hard to take that, you know, to me

687
00:34:09,200 --> 00:34:11,360
Speaker 11: and this is not going to happen. And as you

688
00:34:11,400 --> 00:34:14,080
Speaker 11: point out, I do think that there's a relationship here.

689
00:34:14,080 --> 00:34:16,640
Speaker 11: It's just, you know, a matter depends what it's going

690
00:34:16,719 --> 00:34:17,600
Speaker 11: to ultimately look like.

691
00:34:18,239 --> 00:34:21,279
Speaker 5: Kurt Wagner, we thank you so much. Let's stick with

692
00:34:21,360 --> 00:34:25,400
Speaker 5: artificial intelligence now, but from a biology perspective. A startup

693
00:34:25,560 --> 00:34:28,680
Speaker 5: Chai Discovery, which founded just six months ago and already

694
00:34:28,719 --> 00:34:32,160
Speaker 5: it has raised thirteen million dollars from AI heavyweights Thrive Capital,

695
00:34:32,239 --> 00:34:36,239
Speaker 5: Open ai Amy to bring artificial intelligence to drug discovery.

696
00:34:36,440 --> 00:34:39,160
Speaker 5: Josh Meyer is the founder of Chi Discovery, joining us now.

697
00:34:39,200 --> 00:34:42,640
Speaker 5: Congratulations on the round. I am so interested in chai

698
00:34:42,719 --> 00:34:47,279
Speaker 5: on and this open source model compared to others. When

699
00:34:47,280 --> 00:34:49,960
Speaker 5: we're thinking of Alpha fold, when you're thinking of evolutionary

700
00:34:50,000 --> 00:34:53,600
Speaker 5: scales model, you say it's better. How on what measurements?

701
00:34:53,920 --> 00:34:56,160
Speaker 6: Well, first of all, thanks so much for having me here.

702
00:34:56,440 --> 00:34:58,440
Speaker 6: We're really excited to be putting out this model for

703
00:34:58,480 --> 00:35:01,480
Speaker 6: the community. You're asking a great question, and you know

704
00:35:01,600 --> 00:35:03,719
Speaker 6: one of the properties about this field right now. It's

705
00:35:03,719 --> 00:35:06,440
Speaker 6: actually almost challenging to evaluate these models. Now I cam

706
00:35:06,480 --> 00:35:08,520
Speaker 6: here to one another. A lot of these models are

707
00:35:08,560 --> 00:35:12,399
Speaker 6: available only under non commercial settings, which means it's hard

708
00:35:12,400 --> 00:35:14,719
Speaker 6: for a company like us to actually benchmark against them.

709
00:35:15,280 --> 00:35:17,400
Speaker 6: But we find on one of the benchmarks, for example,

710
00:35:17,440 --> 00:35:20,280
Speaker 6: a benchmark called Postbusters, we find our models about seventy

711
00:35:20,280 --> 00:35:23,240
Speaker 6: seven percent versus the seventy six percent from Alpha fold three.

712
00:35:23,400 --> 00:35:25,359
Speaker 6: The models are really neck and neck, and we're really

713
00:35:25,360 --> 00:35:27,800
Speaker 6: excited to put out a model and make it available

714
00:35:28,320 --> 00:35:30,960
Speaker 6: for everyone, including for companies that want to engage in

715
00:35:31,000 --> 00:35:31,719
Speaker 6: drug discovery.

716
00:35:32,640 --> 00:35:37,200
Speaker 5: Josh, Alpha fold has the juggernauts of Google Alphabet behind it.

717
00:35:37,480 --> 00:35:40,239
Speaker 5: Behind you sit some empty chairs, and we understand, just

718
00:35:40,280 --> 00:35:43,520
Speaker 5: a team of ten, what will about thirty million go towards?

719
00:35:43,719 --> 00:35:46,560
Speaker 5: Is it about the talent? Is it about the compute,

720
00:35:46,680 --> 00:35:47,560
Speaker 5: where do you want to build?

721
00:35:48,040 --> 00:35:51,400
Speaker 6: Well, we're going into really exciting times. Drug discovery is

722
00:35:51,440 --> 00:35:54,600
Speaker 6: an extremely hard process. The fact that drug discovery works

723
00:35:54,640 --> 00:35:56,560
Speaker 6: at all with the tools that are available today is

724
00:35:56,920 --> 00:35:59,879
Speaker 6: nothing short of miraculous. So we're really excited to kind

725
00:35:59,880 --> 00:36:02,360
Speaker 6: of participate in this market and build tools that we

726
00:36:02,400 --> 00:36:04,960
Speaker 6: hope will make a difference in the process.

727
00:36:05,760 --> 00:36:07,400
Speaker 1: I think the results speak for themselves.

728
00:36:07,719 --> 00:36:10,080
Speaker 6: This is why we were excited, even just a couple

729
00:36:10,080 --> 00:36:12,560
Speaker 6: of months of work to put that out for the community,

730
00:36:12,760 --> 00:36:16,080
Speaker 6: for folks to evaluate themselves and to hopefully find find

731
00:36:16,120 --> 00:36:18,920
Speaker 6: it useful. But there's so much work ahead of us,

732
00:36:19,160 --> 00:36:22,200
Speaker 6: and I'm really just grateful for the incredible team we

733
00:36:22,280 --> 00:36:25,799
Speaker 6: have behind us, my co founders, for example, Matt mcparltlan

734
00:36:25,880 --> 00:36:28,960
Speaker 6: and Jack denn and Jacques but Trum among others. It's

735
00:36:29,080 --> 00:36:31,200
Speaker 6: just such a great team to be working with, and

736
00:36:31,640 --> 00:36:34,120
Speaker 6: I think we're just inspired by the possibilities that are

737
00:36:34,160 --> 00:36:34,719
Speaker 6: ahead of us.

738
00:36:34,920 --> 00:36:37,560
Speaker 4: There's been a lot of hope and enthusiasm for the

739
00:36:37,560 --> 00:36:40,320
Speaker 4: impact that AI will have on drug discovery for a while.

740
00:36:40,360 --> 00:36:44,160
Speaker 4: But you are showing improvement to success rates. When does

741
00:36:44,200 --> 00:36:47,320
Speaker 4: that sort of manifest itself in the real world. Pushes

742
00:36:47,360 --> 00:36:50,239
Speaker 4: forward the field that one day a consumer or a

743
00:36:50,280 --> 00:36:52,040
Speaker 4: patient gets access to this work.

744
00:36:52,440 --> 00:36:55,320
Speaker 6: We're in the really early innings of AI and drug discovery.

745
00:36:55,480 --> 00:36:58,200
Speaker 6: We're seeing those first signs of life in CHAI one.

746
00:36:58,320 --> 00:37:01,560
Speaker 6: For example, we've shown that you can integrate starting constraints

747
00:37:01,560 --> 00:37:03,319
Speaker 6: into the model, the kinds of things that you might

748
00:37:03,360 --> 00:37:06,000
Speaker 6: derive from white lab experiments, and use those in order

749
00:37:06,040 --> 00:37:10,160
Speaker 6: to get significantly better improvements on understanding how molecules interact

750
00:37:10,160 --> 00:37:12,959
Speaker 6: with one another. Those molecules are the basis of life

751
00:37:13,000 --> 00:37:15,399
Speaker 6: as we know it, so we think with these kinds

752
00:37:15,400 --> 00:37:18,000
Speaker 6: of new capabilities, we can use them to better understand

753
00:37:18,000 --> 00:37:21,360
Speaker 6: how molecules interact and then use that understanding to reprogram

754
00:37:21,400 --> 00:37:23,960
Speaker 6: them and then hopefully come up with better medicines and

755
00:37:24,600 --> 00:37:28,640
Speaker 6: just increase make humanity better for all of us.

756
00:37:29,200 --> 00:37:32,399
Speaker 5: Keep coming back when those discoveries are occurring via your model,

757
00:37:32,440 --> 00:37:43,560
Speaker 5: we appreciate it. Try Discovery founder Josh Meyer, Oracle just

758
00:37:43,560 --> 00:37:46,200
Speaker 5: erasing its earlier gains on the day that's ahead of

759
00:37:46,200 --> 00:37:50,000
Speaker 5: the company reporting earnings today, with investors hopeful that there

760
00:37:50,040 --> 00:37:52,560
Speaker 5: is a continued momentum in this name the cloud business

761
00:37:52,600 --> 00:37:56,719
Speaker 5: fueled by AI demand. Bloomberg's Brodie Ford covers Oracle and

762
00:37:56,760 --> 00:37:59,120
Speaker 5: it's training high. We're now off. There is a lot

763
00:37:59,120 --> 00:38:01,359
Speaker 5: of hope that we can vindicate the thirty percent run

764
00:38:01,440 --> 00:38:02,960
Speaker 5: up this year in this stock totally.

765
00:38:03,000 --> 00:38:04,600
Speaker 12: This is one of those funny cases where you have

766
00:38:04,640 --> 00:38:07,920
Speaker 12: a mature company that's known for something, but now a

767
00:38:07,920 --> 00:38:10,520
Speaker 12: business line that's what ten percent of total revenue is

768
00:38:10,560 --> 00:38:14,560
Speaker 12: all folks care about oci Oracle cloud infrastructure. A lot

769
00:38:14,640 --> 00:38:16,719
Speaker 12: of folks didn't take it seriously three years ago, but

770
00:38:16,800 --> 00:38:18,839
Speaker 12: now it's had a lot of wins with companies doing

771
00:38:18,880 --> 00:38:22,799
Speaker 12: generative AI. Elon's Xai is famously a customer, and so

772
00:38:23,120 --> 00:38:26,240
Speaker 12: we're seeing a lot of immense month Oracle's cloud infrastructure

773
00:38:26,440 --> 00:38:28,760
Speaker 12: and as you see, yeah, one of the best performing

774
00:38:28,800 --> 00:38:32,040
Speaker 12: software companies of the year. Investors are hopefully it'll continue.

775
00:38:32,360 --> 00:38:35,120
Speaker 5: Some analysts are a little bit nervous. One putting it

776
00:38:35,200 --> 00:38:37,600
Speaker 5: that they wanted to know if Oracle is an AI

777
00:38:37,840 --> 00:38:40,960
Speaker 5: faker that coming from Jordan klin Over at Mazuho, why

778
00:38:40,960 --> 00:38:42,160
Speaker 5: would it be deemed a faker.

779
00:38:42,480 --> 00:38:45,400
Speaker 12: It reminds me of the debate around the AI server companies.

780
00:38:45,440 --> 00:38:49,240
Speaker 12: The question is is this just something that's needed now

781
00:38:49,320 --> 00:38:52,400
Speaker 12: because the traditional giants like Azure aws don't have the

782
00:38:52,440 --> 00:38:56,400
Speaker 12: capacity or is there really something different about Oracle's cloud

783
00:38:56,440 --> 00:38:59,400
Speaker 12: that all means it will continue lasting. I mean, there's

784
00:38:59,440 --> 00:39:03,239
Speaker 12: spending eight billion dollars a year on Capex building out

785
00:39:03,239 --> 00:39:06,120
Speaker 12: new data centers, so I'm sure they seem pretty confident

786
00:39:06,160 --> 00:39:07,959
Speaker 12: that this will continue and demand.

787
00:39:08,120 --> 00:39:13,120
Speaker 5: They being Larry Ellison and team. Absolutely, he's a busy guy.

788
00:39:13,320 --> 00:39:17,120
Speaker 5: It seems late like what he's also technically the controller

789
00:39:17,160 --> 00:39:19,000
Speaker 5: of Paramount. That must have given you a chuckle.

790
00:39:19,120 --> 00:39:21,920
Speaker 12: Yeah, I'm expecting some call the question on the earnings

791
00:39:21,920 --> 00:39:25,719
Speaker 12: call tonight about that, because I think Paramount and the

792
00:39:25,760 --> 00:39:28,160
Speaker 12: Ellison team has made some comments about like, oh, we'll

793
00:39:28,239 --> 00:39:32,960
Speaker 12: use Oracle technology to help us make movies. No one's

794
00:39:33,040 --> 00:39:36,520
Speaker 12: clear if that means they don't have filmmaking technology. But

795
00:39:36,560 --> 00:39:39,160
Speaker 12: I imagine we'll see some interesting press releases about how,

796
00:39:39,200 --> 00:39:43,760
Speaker 12: you know, Paramounts using Oracle cloud infrastructure or AI script writing.

797
00:39:43,800 --> 00:39:46,799
Speaker 12: There's gonna be some interesting coll mingling here. I imagine.

798
00:39:47,120 --> 00:39:49,680
Speaker 5: Let us know what goes on on that call. He always does,

799
00:39:49,719 --> 00:39:53,920
Speaker 5: Bradie Ford, we appreciate it. Meanwhile, Ed, we are counting

800
00:39:54,000 --> 00:39:57,200
Speaker 5: down just over one hour from glow time. What's some

801
00:39:57,320 --> 00:39:57,799
Speaker 5: on my view?

802
00:39:57,920 --> 00:40:02,399
Speaker 4: Yes, yeah, look, I think We know what the basics are, right,

803
00:40:02,480 --> 00:40:06,759
Speaker 4: iPhone sixteen generation four variants Base and then the two

804
00:40:06,800 --> 00:40:10,120
Speaker 4: PC Pro and Pro Max. But it's still the same question,

805
00:40:10,160 --> 00:40:13,440
Speaker 4: which is about Apple Intelligence. How do I use it

806
00:40:13,520 --> 00:40:15,239
Speaker 4: in the course of my daily life? How do I

807
00:40:15,360 --> 00:40:18,759
Speaker 4: use it at work? And, as Mark German has reported

808
00:40:18,760 --> 00:40:21,400
Speaker 4: in detail, this kind of staggered roll out where the

809
00:40:21,440 --> 00:40:24,680
Speaker 4: new generation hands set will ship next month, but iOS

810
00:40:24,719 --> 00:40:27,360
Speaker 4: eighteen point one will be in at the end of

811
00:40:27,360 --> 00:40:29,520
Speaker 4: this month. iOS eighteen point one will be next month.

812
00:40:29,880 --> 00:40:31,600
Speaker 4: How does that go down with consumers? And it's not

813
00:40:31,640 --> 00:40:35,240
Speaker 4: available in China in the EU? Refresh Apple Watch Refresh

814
00:40:35,400 --> 00:40:37,640
Speaker 4: on the wearable side of things as well, but it's

815
00:40:37,680 --> 00:40:40,680
Speaker 4: often in the story, right Carol on stage, help me

816
00:40:40,760 --> 00:40:43,160
Speaker 4: understand how I'll be doing this in my daily life.

817
00:40:43,280 --> 00:40:46,240
Speaker 5: We've only got a minute. But the stock is lower

818
00:40:46,360 --> 00:40:49,839
Speaker 5: it usually is on these days though, right we watch?

819
00:40:49,920 --> 00:40:50,320
Speaker 1: True?

820
00:40:50,520 --> 00:40:53,800
Speaker 4: Yeah, I mean I just love history and Apple stocks

821
00:40:53,800 --> 00:40:57,320
Speaker 4: closed down and twelve of the last seventeen iPhone events

822
00:40:57,400 --> 00:40:59,320
Speaker 4: sell the news kind of event. But there is a

823
00:40:59,320 --> 00:41:01,560
Speaker 4: feeling this time might be different because if there's not

824
00:41:01,760 --> 00:41:06,279
Speaker 4: a substantive hardware update fifteen to sixteen generation, it is

825
00:41:06,320 --> 00:41:08,400
Speaker 4: the software side that might drive us forward if we

826
00:41:08,440 --> 00:41:10,480
Speaker 4: are to have a so called super cycle.

827
00:41:10,920 --> 00:41:14,120
Speaker 5: It is still a three point three trillion dollar company,

828
00:41:14,680 --> 00:41:18,200
Speaker 5: World's most valuable. We thank you Ed Ludlow for everything

829
00:41:18,239 --> 00:41:19,920
Speaker 5: you're doing right now, everything you're going to do for

830
00:41:19,960 --> 00:41:22,160
Speaker 5: the rest of the day as glow time kicks off.

831
00:41:22,200 --> 00:41:24,200
Speaker 5: That does it for this addition of Blue mag Technology.

832
00:41:24,239 --> 00:41:26,000
Speaker 5: Do not forget to check out our podcast as well.

833
00:41:26,040 --> 00:41:27,880
Speaker 5: You can find it on the terminal as well as

834
00:41:27,960 --> 00:41:30,640
Speaker 5: on Apple, on Spotify, and iHeart so much more to

835
00:41:30,640 --> 00:41:35,080
Speaker 5: come from Ed in Kupertino. This is bloomg Technology.