Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
Speaker 1: from coast to coast with Caroline Hyde in New York
Speaker 1: and Vla Low in sentrances go.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: President Trump seeks quote immediate negotiations on acquiring Greenland for
Speaker 3: national security reasons.
Speaker 2: Will recap his speech.
Speaker 4: In Davos, US Netflix shares, they drop on spending to
Speaker 4: buy Warner Brothers, Discovery and Zipline.
Speaker 3: CEO Keller Clifton joins us to discuss the robotics startups
Speaker 3: do seven point six billion dollar valuation and expansion.
Speaker 4: At first, we return to these public markets, then actually
Speaker 4: bounced back somewhat on the walking back from the edge
Speaker 4: of President Trump, the idea that Greenland will not be
Speaker 4: something that is taken by force. European stocks rally from
Speaker 4: We see in fact the NAZA one hundred now up
Speaker 4: one point four percent as the mood music changes.
Speaker 5: But there are real.
Speaker 4: Details in which industries benefit and which are pulling back
Speaker 4: from this significant speech. Over at Davos, we're looking at
Speaker 4: the S and P five hundred now up a percentage point.
Speaker 4: But really, ed, we have to get to the details
Speaker 4: of that speech.
Speaker 3: We just heard, Yeah, and here to recapital is Bloomberg
Speaker 3: Surveillance co host Amri Horden, who is out in Davos.
Speaker 3: The central feature of the President's speech was Greenland, not
Speaker 3: just ruling out the use of force amh in acquiring Greenland,
Speaker 3: but the commitment to continuing on that path. What do
Speaker 3: we need to know?
Speaker 6: Yeah, the President made it very clear he doesn't want
Speaker 6: to use force, he won't use force, and he talked
Speaker 6: about how he is coming here to have intense negotiations
Speaker 6: for the United States to acquire Greenland once again. So
Speaker 6: coming into this, you know, the Europeans really feeling like
Speaker 6: this was an existential threat. This has really taken up
Speaker 6: all the oxygen in every single meeting room you'll attend
Speaker 6: or dinner on the sidelines of Dava, Switzerland. A lot
Speaker 6: of criticism pointed towards Washington because of the President's rhetoric
Speaker 6: regarding Greenland, but he came here with some thinking maybe
Speaker 6: was just to negotiate, and that's exactly what we did.
Speaker 7: And we've seen the President.
Speaker 6: Use this tactic before in the past. In the first term,
Speaker 6: there was so many leaks about maybe the United States
Speaker 6: would leave the NATO alliance.
Speaker 7: At the end of the day, NATO.
Speaker 6: Came to the position the President always wanted it to,
Speaker 6: which is to spend more in collective defense. Another time
Speaker 6: this happened, of course, was more recently last year during
Speaker 6: Liberation Day.
Speaker 7: This is what the.
Speaker 6: Treasury Secretary spoke about earlier in the week here at Davos.
Speaker 6: He said, the hysteria around this is like Liberation Day.
Speaker 6: Everyone needs to take a step back, take a deep breath.
Speaker 7: That was what it feels like.
Speaker 2: Now.
Speaker 6: The President anchored this debate negotiation dialogue, what you may
Speaker 6: want to call it, to the extreme and is now
Speaker 6: here for some sort of potential negotiation.
Speaker 7: Of course, we need to see how this goes.
Speaker 6: The President did say he will be having bilateral meetings
Speaker 6: with European LEO, so we'll see what comes of this.
Speaker 6: But it does seem to be like this has taken
Speaker 6: the tone of the rhetoric down a notch.
Speaker 4: And yet he chastised European leaders, particularly around energy and
Speaker 4: we think here on the Technology show about the nuclear commitment.
Speaker 4: That was something he talked told of nuclear stocks react.
Speaker 4: We also hear a lot about the Golden Zone. What
Speaker 4: took your attention, Imrie, Yeah, the.
Speaker 6: Golden Dome has been linked with this administration to Greenland.
Speaker 6: They also spoke about the fact that Canada wants to
Speaker 6: be a part of this Golden Dome. This would be
Speaker 6: able to shield ballistic or cruise missiles into the United
Speaker 6: States before launch or drawing launch, and be able to
Speaker 6: defend the United States Canada and they think Greenland is
Speaker 6: important for this, and that has been one of the
Speaker 6: issues they have been pushing the President's talking about the fact
Speaker 6: that Greenland is just important in general for national security
Speaker 6: when it comes to Russia and China. On that front,
Speaker 6: the President did say he also will be sitting down
Speaker 6: with President Zelenski. I spoke earlier with his special voice
Speaker 6: Steve Wikoff, who said he was going to Moscow tomorrow
Speaker 6: to meet with President Putin and alongside Jared Kushner, and
Speaker 6: then also he'll be having another meeting with Ukrainians this evening,
Speaker 6: So potentially we also are getting closer to some sort
Speaker 6: of peace agreement when it comes to Ukraine, and that
Speaker 6: is critically important for the Europeans. And I bring this
Speaker 6: up because the Europeans felt like Greenland has just been
Speaker 6: besides an existential threat to them, a distraction for some
Speaker 6: of those really important negotiations taking place regarding the future
Speaker 6: of Ukraine.
Speaker 4: Lu Mexamory Hodden long Day's davors, we so appreciate it.
Speaker 5: Thank you.
Speaker 4: Now, let's return to tech and the earnings release of Netflix.
Speaker 4: You'll see that shares they're sliding. They're down by the
Speaker 4: most in the month. At the moment, the company delivering
Speaker 4: and disappointing profit forecast for the current quarter, and that's
Speaker 4: a spending is mounting. Let's get more of Luemgs Entertainment
Speaker 4: editor Felix Chillette, and look, the seventy six cents a
Speaker 4: share for the fiscal quarter we're currently in that forecast
Speaker 4: is below expectations. But it's Warner Brothers, Discovery and it's
Speaker 4: programming they spend on.
Speaker 8: Yeah, I mean, I think investors have every reason to
Speaker 8: be concerned about spending at this point. I mean, it's
Speaker 8: not just that Netflix is pursuing the biggest acquisition in
Speaker 8: the company's history, but they're also said yesterday that they're
Speaker 8: going to be spending more in twenty twenty six than
Speaker 8: they did in twenty twenty five on programming, whether it's
Speaker 8: TV series or movies. They spent about eighteen billion dollars
Speaker 8: last year. They're going to be up to about twenty
Speaker 8: billion dollars this year. And yeah, they have a lot
Speaker 8: going on, whether it's you know, live sports that they're
Speaker 8: continuing to expand in. They've got this whole podcasting thing
Speaker 8: they want to do. They've been talking for a long
Speaker 8: time about trying to ramp up their video game efforts.
Speaker 8: So yeah, spending is a concern moving forward.
Speaker 2: Felix.
Speaker 3: You'd think that the Warner Brothers Discovery deal would be
Speaker 3: the b or and end all of that earning school.
Speaker 3: But what executives were talking about with these attractive investment opportunities,
Speaker 3: we seem to suggest buying properties, you know, catalog. They've
Speaker 3: looked at Sony for example, for movie rights. Did we
Speaker 3: learn any more about how great sid Netflix is going
Speaker 3: to be in acquiring more ip.
Speaker 8: I mean, what we learned is they see the competition
Speaker 8: as being incredibly fierce out there, you know, talking about YouTube,
Speaker 8: talking about competition from you know, other places like Instagram, TikTok,
Speaker 8: and I think from Netflix's perspective, they can't have enough library, franchises, content.
Speaker 8: They're really become this all service for all different people
Speaker 8: in the family and to do that you know, you
Speaker 8: kind of work on sports, you got to work on
Speaker 8: topical program and you have to have dramas, comedies, boxing,
Speaker 8: So they're really advanced in all fronts. And yeah, I
Speaker 8: think they, you know, are kicking the tires on every
Speaker 8: library as it comes up. I think what they said
Speaker 8: is that, you know, with Warner Brothers Discovery, once they
Speaker 8: looked under the hood a little bit, they really liked
Speaker 8: what they saw and that's when they decided to move
Speaker 8: forward aggressively.
Speaker 4: And it rather serves Netflix to be talking about competition
Speaker 4: in those fields. Particularly they want to get regulatory approval
Speaker 4: for the deal with.
Speaker 5: One of others.
Speaker 4: Discovery just remind us where we are on that deal, Felix,
Speaker 4: because because the twenty first of January was going to
Speaker 4: be a key date.
Speaker 8: Yeah, I mean, so Netflix came back yesterday, they had
Speaker 8: they amended their offer slightly. It's now an all cash offer.
Speaker 8: Before it was cash and stock, and so yeah, they're
Speaker 8: moving forward. They'll put it in front of Warner brother
Speaker 8: Discovery investors sometime in the spring before the annual meeting.
Speaker 8: At the same time, Paramount hasn't completely gone away. You
Speaker 8: have David Ellison still breathing down the neck with this
Speaker 8: tender offer, you know, still trying to keep them in play.
Speaker 8: I think Paramount everyone's waiting to see if they'll raise
Speaker 8: their offer. In the meantime, Paramount seems to be saying, oh, well,
Speaker 8: you know, Netflix is going to have all these regulatory issues.
Speaker 8: To your point, that's why, you know, Netflix has had
Speaker 8: this talking point about, oh, we don't just compete with
Speaker 8: other streamers, we compete with all these tech companies and
Speaker 8: social media, all these other broader competition field. So that's
Speaker 8: been one of other big talking points. And also of
Speaker 8: course that you know they believe suddenly in theatrical releases
Speaker 8: of movies and that they'll plan to continue to put
Speaker 8: Warner Brothers Discovery movies in theaters for the forty five
Speaker 8: day window as they are now.
Speaker 3: Bloomberg's Felix chouette with the Netflix breakdown, thank you very much.
Speaker 2: Let's stick with Netflix earnings.
Speaker 3: Helen and Wang, research analyst at Philip Security, says the
Speaker 3: company is quote in an ideal position and has an
Speaker 3: accumulate call on the stock. She joins us, Now, Helena,
Speaker 3: why then is Netflix in an ideal position? What are
Speaker 3: the data points that you point us to from that
Speaker 3: earnings call and earnings print.
Speaker 9: Hello, thank you for having me.
Speaker 10: I guess to sort off just diving straight into their financials.
Speaker 10: They have very strong financials, so they do have a
Speaker 10: bet on both the top and bottom line, as that
Speaker 10: is not just for the FOS quarter, it is also
Speaker 10: for the entire year. So overall numbers look very solid
Speaker 10: and that is the actual organic volume coming, so people
Speaker 10: are actually engaging in paying for the services.
Speaker 3: Helena like like, oh, and list, you're trying to model
Speaker 3: for what happens next, and you put things in the
Speaker 3: pro column and the con column. Where does this situation
Speaker 3: with Warner Brothers Discovery fit into which column?
Speaker 10: Well, I guess it really depends because for Netflix right now,
Speaker 10: they're clearly in the leader position in the streaming business.
Speaker 10: So even compared to their closest Robbery Disney, they have
Speaker 10: a much bigger membership base and they stop recording the numbers.
Speaker 10: But they did disclose in this earning that their membership
Speaker 10: is three hundred and twenty five million, so that and
Speaker 10: their money tize is business almost twice as better. And
Speaker 10: with less than ten percent of the total TV viewing,
Speaker 10: there's still a huge wrong way for gross So this
Speaker 10: wonder brother Vial, it really comes in. So the question
Speaker 10: for twenty twenty six is no longer whether they're going
Speaker 10: to be able to continue their gross profitably, which they
Speaker 10: have been doing so that's almost one hundred percent. So
Speaker 10: the question really coming in whether they're going to be
Speaker 10: able to integrate such a big company without sacrificing in
Speaker 10: their margins.
Speaker 9: So that is the question that's coming in.
Speaker 4: Yeah, and for this fiscal culture, it looks like margins
Speaker 4: can't under pressure, so do stop buybacks? But they said,
Speaker 4: look in the longer term, they're committed to margin increase. Helena,
Speaker 4: I'm looking at at the stock that's the lower since
Speaker 4: January of last year. How confident are you and the
Speaker 4: investor base that they can not get distracted during the
Speaker 4: m and A process and indeed interweave it well if
Speaker 4: they managed to clinch it well.
Speaker 10: Their operating margin guide seems to be a little bit
Speaker 10: of life for the next quarter. They've guided thirty one
Speaker 10: percent while the consensus was thirty two to thirty three percent.
Speaker 10: So there is a question of whether we will be
Speaker 10: expecting its operating expense.
Speaker 9: To expand further.
Speaker 10: But I guess what my view is they might want
Speaker 10: a guide more conservatively at the start of the year,
Speaker 10: given all the uncertainty of the water brother, do you
Speaker 10: they're leaving more scope to outperform expectation as the year
Speaker 10: of progresses.
Speaker 9: So I do believe there is a little bit of
Speaker 9: a wiggle room in terms of margin for years to come.
Speaker 4: I mean, and let's just just haven't liked the idea
Speaker 4: of them making this purchase. Really, since the minute they
Speaker 4: put their hand in the ring, shares are off by
Speaker 4: about thirty percent.
Speaker 5: Should they be buying this asset?
Speaker 4: How integral is it that they buy this storied Hollywood asset?
Speaker 10: Well, okay, I would like to point out that financially
Speaker 10: they're very strong, so they don't necessarily need a merger
Speaker 10: to survive. So it's not necessarily a lifeline for them.
Speaker 10: So from the Netflix point of view, it's more of
Speaker 10: a power move for them to aiming at total dominance.
Speaker 10: So our power moves sort of needs to come as
Speaker 10: a sacrifice. So the fact that they are making the
Speaker 10: decision to expose themselves with such risk means they are
Speaker 10: confident enough with their girls, with their financials to make
Speaker 10: such bold decisions.
Speaker 3: Helena, for the last few years, several years Caroline and
Speaker 3: I have been told constantly that in this streaming race,
Speaker 3: content is king Netflix not getting more support, particularly in
Speaker 3: the stock for just going out there and being aggressive
Speaker 3: to keep the library growing having more content.
Speaker 10: Well, I guess right now, because they already don't have
Speaker 10: a competitor in terms of the streaming business.
Speaker 9: They already have a very strong content slate.
Speaker 10: The twenty twenty five we got all the Sweet Game,
Speaker 10: Stranger things Wednesday, so all these are very very popular,
Speaker 10: and twenty twenty six lineup is also very strong. So
Speaker 10: they have this incredible ability to have the amazing content
Speaker 10: with more to come, and still have very impressive traditional
Speaker 10: financial metrics. And if you realize their bottom line Girls
Speaker 10: is much higher than the top line Girls, this is
Speaker 10: because their business itself is a very mature efficiency machine,
Speaker 10: because if you think about it, their costs for making
Speaker 10: the content available is somewhat fixed. We get two billion
Speaker 10: people p two million people watching or two hundred million
Speaker 10: people watching it, so the more engagement they get, every
Speaker 10: new dollar that comes in flow almost straight to the
Speaker 10: bottom line. So this is why they already have very
Speaker 10: outstanding profitability, so they can afford to expand more aggressively
Speaker 10: into a bigger total dominance.
Speaker 3: Herne, which piece of this Warner Brothers Discovery proposed transaction
Speaker 3: interests you more the studios or taking HBO Max and
Speaker 3: doing something with it, Well.
Speaker 10: I think it would still be the HBO Max because
Speaker 10: HBO Max right now is still considered the fourth biggest
Speaker 10: streaming company. So with HBO Max together adding up together,
Speaker 10: they will essentially have more than four hundred and fifteen
Speaker 10: billion of subscribers, so that is more than almost more
Speaker 10: than half of the streaming industry. So that would definitely
Speaker 10: give them entire monopoly in that field.
Speaker 4: But Helena, I look at mister Beast who has more
Speaker 4: than four hundred and fifty million subscribers on his YouTube
Speaker 4: platform alone, let alone the dominant force of YouTube. So
Speaker 4: how do you see the market and who their competitors are.
Speaker 10: Well, I guess that is exactly exactly why they wanted
Speaker 10: to expland more to the field because they've already reached
Speaker 10: almost a monopoly leader position in the streaming business, so
Speaker 10: they're looking to expand into something else because the entertainment
Speaker 10: industry is always forever changing, so they're always trying to
Speaker 10: make sure that they have a foot in the ring
Speaker 10: before the environment.
Speaker 4: Changes, Helen and Wang of Philip Security staying up late
Speaker 4: for us in Asia. We so appreciate you having time
Speaker 4: for us on the show.
Speaker 5: Thank you. Now, let's turn attention to Invidia's Jensen Wang.
Speaker 4: He plans to travel to China as he works to
Speaker 4: reopen a crucial market for his company's AI chips.
Speaker 5: From that next, this is Blueberg Tech.
Speaker 4: We're going to be listening now a little bit more
Speaker 4: to what's been being said across in Davos.
Speaker 5: In particular, we've.
Speaker 4: Been hearing from the CEO of Invidia, Jensen Wang, who
Speaker 4: is being interviewed by Larry Fink himself, talking about the
Speaker 4: trillion dollar opportunity that continues and indeed where we might
Speaker 4: indeed see job losses or not. Let's get out to
Speaker 4: Bluemberg's Ian King, who covers all things semiconductors right now,
Speaker 4: and Ian, let's talk a little bit about what's been
Speaker 4: happening in terms of Jensen and where he sees the
Speaker 4: opportunity and scale needed for AI. You've been saying more
Speaker 4: broadly that well, this is a no brainer, and that
Speaker 4: he's been saying this time and time again.
Speaker 11: Yeah, I mean he's traveling around the world preaching basically
Speaker 11: to whichever audience he can get in front of and
Speaker 11: trying to convey the message. I mean kind of last
Speaker 11: night for us time, as message was, look, hey, AI
Speaker 11: is going to change the economy. But listen, Europeans, you
Speaker 11: don't need to worry about regulating AI too much because
Speaker 11: it's actually going to help create certain jobs and make
Speaker 11: certain jobs stronger. And again he's delivering a very nuanced message.
Speaker 11: But everything is designed to ease the passage of AI.
Speaker 3: I think it's really important to point out despite the
Speaker 3: news headlines and Arscle's written, none of this is new,
Speaker 3: picularly the point that the investment in AI infrastructure will
Speaker 3: generate skilled labour jobs plumbing electricians for example. Also, there
Speaker 3: were no questions put to him in an extended on
Speaker 3: stage conversation about China. But Bloomberg's reporting citing sources that
Speaker 3: he will go to China. That is in and of
Speaker 3: itself quite a normal thing for him to do. But
Speaker 3: what do we need to know about that?
Speaker 11: Yeah, I mean always at this time of year, as
Speaker 11: you know, we have, you know, the Chinese New Year,
Speaker 11: and he'd likes to go to Taiwan. He likes to
Speaker 11: go to Beijing, to sort of look after his employees there.
Speaker 11: They have parties and things like that. Previously, when he's
Speaker 11: visiting China he has managed to have meetings with senior officials.
Speaker 11: We don't know whether he's going to do that this time,
Speaker 11: but obviously if he could, then it's really important to
Speaker 11: get Beijing to sign off on H two Just.
Speaker 3: One quick introduction team, which I apologize for. Remember that
Speaker 3: he only told me two weeks ago. We don't speak
Speaker 3: directly to the Chinese government. Our communication is through the companies.
Speaker 3: But sorry, carry on in.
Speaker 11: Yeah, whether he does directly or whether he does it
Speaker 11: through intermediaries. Getting sign off on those H two hundred ships,
Speaker 11: which the US government has said, hey, it's okay to
Speaker 11: an extent to send them to China. Getting China to
Speaker 11: accept them is going to be key, and that'll be
Speaker 11: something that you know, our audience will focus on heavily.
Speaker 5: And of course, all.
Speaker 4: Of this access to China is something he's been talking
Speaker 4: about as a total total addressable market of at least
Speaker 4: fifty billion in this fiscal year alone. I just want
Speaker 4: to go back to what he said at Dabos yesterday
Speaker 4: when being in discussion whether we call it an interview
Speaker 4: with Larry Fink. China wasn't on the agenda, but certainly
Speaker 4: the size of the market was.
Speaker 5: Just take a listener.
Speaker 12: This is the largest infrastructure built out in human history
Speaker 12: that's going to create a lot of jobs. And it's
Speaker 12: wonderful that the jobs are related to tradecraft. And we're
Speaker 12: going to have plumbers and electricians and construction and steel
Speaker 12: workers and network technicians and peopleeople who are installed and
Speaker 12: fit out the equipment and now all of these jobs
Speaker 12: in the United States. We're seeing quite a significant boom
Speaker 12: in this area as salaries have gone up are nearly doubled. Yeah,
Speaker 12: and so we're talking about six figure salaries for people
Speaker 12: who are building chip factories or computer factories.
Speaker 4: We've heard Paneteer CEO Alex Karp talking about the death
Speaker 4: of humanities, but the study of vocations in how long
Speaker 4: do those sorts of jobs last. You're a man who
Speaker 4: knows significantly what the data said to build out looks
Speaker 4: like many would say electricians were they going to be
Speaker 4: in the short time?
Speaker 11: Any Yeah, I mean it really depends that this is
Speaker 11: all about focus. If you're Jensen Wang, you want the
Speaker 11: focus on the economic benefits of AI. You want everybody
Speaker 11: thinking about how this is going to propel the economy
Speaker 11: forward and help everybody. You don't want people thinking about
Speaker 11: questions like the one you just gave me, and also
Speaker 11: about the amount of jobs that maybe go away because
Speaker 11: of AI. So this is a this is like a hey,
Speaker 11: look over here type of directional kind of assertion that
Speaker 11: he wants to make. And for the foreseeable future, we
Speaker 11: are going to continue to see these massive buildouts.
Speaker 5: Thanking across all things in Nvidia. As always for us,
Speaker 5: we appreciate it Meta well.
Speaker 4: It says it's looking to boost its online safety features
Speaker 4: as Europe weighs tougher rules and the possibility of restrictions
Speaker 4: on social media platforms for young adults. Remerg's Frasie Laua
Speaker 4: sat down with Nicola Mendelssohn, who leads Metas Global Business Group,
Speaker 4: to talk about new teen accounts designed to give parents
Speaker 4: more control.
Speaker 5: Take a listen.
Speaker 13: Keeping young people on safe on our platform is incredibly
Speaker 13: important to us. It's an absolute priority, and we've been
Speaker 13: investing in this area for a number of years.
Speaker 2: It's why we.
Speaker 13: Launch teen accounts back in twenty twenty four to keep
Speaker 13: young people safe, to give parents, supervisionary come trolls so
Speaker 13: that they can also work with their children. They're young
Speaker 13: people in terms of keeping them safe.
Speaker 2: So what does that mean.
Speaker 13: It means restricting the amount of time that they spend
Speaker 13: on the platform.
Speaker 5: It means that they can restrict.
Speaker 13: Who comes in and we place them all in that
Speaker 13: category automatically. So this is very important. But of course
Speaker 13: we're going to work with regulators wherever they are.
Speaker 7: Do you think the band will come through?
Speaker 13: I'm not going to speculate. I'm not going to speculate
Speaker 13: with you on that. So first off, we use AI
Speaker 13: when it comes to people on our platform to see
Speaker 13: more of the things that they want to see. So
Speaker 13: we have growth across all of our different platforms, which
Speaker 13: is fantastic to see.
Speaker 2: Then we have the advantage suite.
Speaker 13: It's very simple. I mean some of the practices that
Speaker 13: you used to talk one hundred and fifty different steps,
Speaker 13: now you can do it in one step. We also
Speaker 13: see more and more the increase in our generative AI tools,
Speaker 13: how they can use it for text, for translations, for
Speaker 13: even the creation for video. Now we have over two
Speaker 13: million advertisers doing that. So all these things are combining
Speaker 13: alongside both reels as well to really give growth for
Speaker 13: our advertising.
Speaker 7: Nigga, what do you think is still untapped in your mind?
Speaker 10: Oh?
Speaker 2: So many things.
Speaker 13: I mean, that's how I've got our whole Smager's board
Speaker 13: of things. So definitely messaging, we're seeing a continuous uptake
Speaker 13: in more personalized communication between businesses and people. There's now
Speaker 13: over a billion messages sent every day between people and businesses.
Speaker 13: We see eight percent of people around the world globally
Speaker 13: that are speaking with a business every single week. So
Speaker 13: this is an area both on the marketing side, but
Speaker 13: increasingly more on the utility and the authentication side.
Speaker 2: A good example is Air France.
Speaker 13: So Airfront's when they switched this on within a few days,
Speaker 13: it became their primary source of communicating with their customers,
Speaker 13: and they're doing it to deliver boarding passes, tell you
Speaker 13: about where your baggage is also remarketing as well. So
Speaker 13: that's a very good example of some of the changes
Speaker 13: that we're seeing.
Speaker 3: That was mesi's head of Global Business, Nicola Mendelssohn speaking
Speaker 3: with Bloomberg's Francine Lacroix. Let's get back to Bloomberg Surveillance
Speaker 3: co host Emory Horden who's standing by in Davos Emrie.
Speaker 7: Thanks so much, Ed.
Speaker 6: I'm now joined by the Dutch Prime Minister Shuff, an
Speaker 6: individual who's really at the center of what's going on
Speaker 6: with Greenland as well as someone is really important to
Speaker 6: United States when it comes to national security. Regarding China,
Speaker 6: I want to start with the President's speech. Though you
Speaker 6: were one of those countries listed potentially more tariffs, the
Speaker 6: President said he's here for earnest negotiations. What did you
Speaker 6: make of his speech? Are you feeling more relaxed.
Speaker 14: Well, I think it's good that he use the word negotiations,
Speaker 14: and I think we shared the common interest of security
Speaker 14: of the Arctic, and I think we should work it
Speaker 14: out in NATO and then make sure that's a security
Speaker 14: from the national security of the United States Canada and
Speaker 14: you will benefit from it.
Speaker 6: The President also used the words I don't want to
Speaker 6: use force.
Speaker 7: I won't use force.
Speaker 6: So when you say you're looking forward to the security
Speaker 6: of the Arctic kind of agreement do you think Washington
Speaker 6: can come to with the continental Europe.
Speaker 14: Well, that's difficult to say, but I think American presence
Speaker 14: on we already have a base, and I think we
Speaker 14: could intensify that also with European troops and then we're
Speaker 14: very close together for the security of the Arctic and
Speaker 14: try to prevent influence from Russia and China.
Speaker 11: In the Arctic.
Speaker 6: Do you think this means the trade threat is over
Speaker 6: the higher tariff levels.
Speaker 14: Well, not yet, and I think we have had a
Speaker 14: European Council tomorrow evening, and I think we should step
Speaker 14: up and make make very clear that this is it's unjustified.
Speaker 14: It makes no sense to use straight seriffs to achieve
Speaker 14: security goals, and we have to push back, but in
Speaker 14: the meantime and ready to act from it as European Union.
Speaker 14: But at the same time use the time in between
Speaker 14: for diplomatic efforts because I think we should solve this diplomatically.
Speaker 6: How has Netherlands been involved in that diplomatic outreach to
Speaker 6: the Trump administration.
Speaker 14: Well, we are involved in you and we are involved
Speaker 14: in a lot of ways. And of course the Secretary
Speaker 14: General of the Native is also a Jutchment is.
Speaker 15: On the lea.
Speaker 7: Yeah, yeah, you're aware of that.
Speaker 6: I mean, do you feel like if you text now
Speaker 6: US official that it might become you know, public knowledge?
Speaker 2: Yeah?
Speaker 14: No, I don't think anybody expected that, but anyway it happened.
Speaker 14: But I think we are evolved because we are always
Speaker 14: have a very strong tends Atlantic bond. We have a big,
Speaker 14: thraight relationship with the United States. We consider the United
Speaker 14: States as a big friend of ours. But at the
Speaker 14: same time, I mean, that's not the way we have
Speaker 14: to create a friendship with imputteriffs.
Speaker 2: That's very difficult.
Speaker 7: You are sounding optimistic that there is an off ramp.
Speaker 6: Do you think the European Union should use the anti
Speaker 6: coercion rule?
Speaker 14: Well, we should look into every measure we can take
Speaker 14: if the imput tariffs are being implemented the first of February,
Speaker 14: but at the same time we should try to prevent
Speaker 14: it from happening and find a solution for the Arctic security.
Speaker 7: Right now, you're joining me.
Speaker 6: It's the evening in Davos, but it's very early on
Speaker 6: the West coast the Bloomberg Technology Show, and one company
Speaker 6: they do track is ASM Now it's a huge chip maker,
Speaker 6: it's really a crown jewel of you. You recently met
Speaker 6: with the chief executive officer. What is your sense of
Speaker 6: what is going on in terms of chips to China
Speaker 6: and the national security framework? Because we saw the United
Speaker 6: States has had a lot of almost ups and downs
Speaker 6: in terms of what they will allow go to China
Speaker 6: and what they want.
Speaker 14: I think we should Moorderligne and I think that ASML
Speaker 14: is delifering a lot of machinery for China in the
Speaker 14: lower end chips, and I think that's a good business
Speaker 14: for ASML, and in that way they can really produce
Speaker 14: the top north technology that we need in the West,
Speaker 14: and I think that's also important for the US. So
Speaker 14: I think ASML is a crime rule with the Netlands
Speaker 14: and the all ecosystem around ASML is very important and
Speaker 14: we should cherish.
Speaker 6: What was the assessment you recently met with the CEO,
Speaker 6: I believe this week. What was his assessment on how
Speaker 6: having to really walk this tightrope between Washington and Beijing and.
Speaker 14: Then you have to walk also the titrope with the Netherlands, Right,
Speaker 14: So I'm.
Speaker 7: Guessing that one might be a little bit easier, but maybe.
Speaker 2: Not all partics.
Speaker 14: Yeah, but we have our own arrangement when it comes
Speaker 14: to national security. But I think he knows very well
Speaker 14: that it's not about top notch in technology that's going
Speaker 14: to be shifted to Beijing, not to China, So we
Speaker 14: have to discuss all kinds of issues related that we
Speaker 14: make it possible for ASML to earn money in China
Speaker 14: as well and make sure that they create a top
Speaker 14: notch technology for US, for Europe, for the United States.
Speaker 6: Last year, when you joined Bloomberg, you talked about how
Speaker 6: under the Biden administration there was concerns about national security
Speaker 6: comes to chips to China, and you expected that to
Speaker 6: happen under the Trump administration. But with all this hot
Speaker 6: rhetoric from the Trump administration regarding Greenland, do you think
Speaker 6: that has made it more difficult to align yourself with
Speaker 6: Washington on national security for a key adversary like China.
Speaker 14: Well, I think on China it's maybe more easy because
Speaker 14: we are more aligned and of course we have all
Speaker 14: our trade interests and also the US as a trade interest.
Speaker 2: Well, it's different than.
Speaker 14: From OAD issues. And I really hope that we can
Speaker 14: make arrangement around to Greenland. I really hope that US
Speaker 14: Bill Beck is up in the peace process in Ukraine.
Speaker 14: It was the still going on and at the same
Speaker 14: time we have to take care of national security issues
Speaker 14: related to economy. I mean, it's just what it is
Speaker 14: in the world of today.
Speaker 6: The Prime Minister of Canada, Mark Karney, had a pretty
Speaker 6: spicy speech yesterday, provocative for some individuals.
Speaker 7: The President made a nod to it today.
Speaker 6: He didn't mention Trump by any but many individuals took
Speaker 6: it as he was signaling to what is going on
Speaker 6: in the United States. And he said, if you are
Speaker 6: a country in the middle, if you're not at the table,
Speaker 6: you're going to get eaten.
Speaker 7: And he said the world order we live at now
Speaker 7: is dead. Do you agree with that assessment.
Speaker 14: Well, the world order certainly has changed, and I think
Speaker 14: it's an illusion to think.
Speaker 2: It will come back to the day that I grew up.
Speaker 14: So we have to adapt to the new way in
Speaker 14: which countries I mean in China we got the United
Speaker 14: States have we still got Russias and military power coming entries.
Speaker 14: So we have to a dept as Europe, and I
Speaker 14: think Europe has to get itself stronger economically but also
Speaker 14: on the defense side within NATO, but we have to
Speaker 14: work much more together and make sure that the European
Speaker 14: Union is a real economic union and that Europe is
Speaker 14: really a defense force to reckon with.
Speaker 6: In partments of your life is changing. You're leaving government.
Speaker 6: How is the formation now of the new government.
Speaker 14: Well, it's on track. I expect to be to be
Speaker 14: inaugurated at the end of February, but the negotiations are
Speaker 14: still going on.
Speaker 7: And what are your plans.
Speaker 14: Yeah, well I'm officially already retired. Yeah, yeah, yeah. In
Speaker 14: a few days there will be the ninety six the
Speaker 14: we say it correctly, yeah, of sixty nine. What is
Speaker 14: it six anyway? Yes, you're definitely as much younger sixty nine. Yes,
Speaker 14: But of course I hope to I've worked for a
Speaker 14: very long time as if a servant on all kind
Speaker 14: of key positions in security, so I hope to get
Speaker 14: my experience and my knowledge and to make it failuable.
Speaker 2: For the people.
Speaker 7: And you can come share that with us on Bloomberg TV.
Speaker 2: Oh that's great, Thank you so.
Speaker 7: Much for your time.
Speaker 2: Prime Minister.
Speaker 6: That was the Dutch Prime Minister, Dick schaff There, an
Speaker 6: individual who was really his country's at the epicenter when
Speaker 6: it comes to Greenland. They're one of those countries labeled
Speaker 6: by the Trump administration potentially more tariffs if they don't
Speaker 6: get access to Greenland. The President really tempered that rhetoric though.
Speaker 6: Today had his speech which is giving a little bit
Speaker 6: of life, breathing some life into this story for European
Speaker 6: leaders to.
Speaker 7: Have a sigh of relief.
Speaker 6: But also when it comes to export controls and chips going.
Speaker 4: To Beijing asml key for our audience. Great to have
Speaker 4: you and that interview. Thank you, Amory.
Speaker 5: Let's stick with Dabos coverage salesforce.
Speaker 16: C you.
Speaker 4: Marc Benioff is striking a more cautionately note on AI technology,
Speaker 4: saying reports of teen suicides linked to AI should be
Speaker 4: a wake up call on unregulated AI.
Speaker 5: He spoke with Bluebergsamini Chang. Just take a listen.
Speaker 16: We are dealing with a new kind of very unwieldy
Speaker 16: technology which by left by itself, these large language models,
Speaker 16: they can do all kinds of terrible things. I mean,
Speaker 16: they can do a lot of great things too. You've
Speaker 16: used them, you know. They can summarize things, and you
Speaker 16: can ask them queries and you can get information. But
Speaker 16: unfortunately we saw this year, this horrible example or this
Speaker 16: company character AI specifically started to find that their product
Speaker 16: was turning into a suicide coach for their customers. And
Speaker 16: one of the most terrific things I've ever seen in
Speaker 16: technology is these children you know died and it was
Speaker 16: completely unnecessary. And I think it needs to be a
Speaker 16: wake up call that you know, we're letting all of
Speaker 16: this AI technology out fully unregulated. And by the way,
Speaker 16: you remember that's true what we did with social media
Speaker 16: as well. And you probably remember what I said in
Speaker 16: twenty eighteen here, you know, which was social media was
Speaker 16: becoming the same kind of very dangerous technology. And look,
Speaker 16: a lot lot of governments have made changes around social
Speaker 16: media now, so you go to a lot of countries,
Speaker 16: if you're not seventeen eighteen years old, you're not going
Speaker 16: to use social media. They're our controls or our protections.
Speaker 16: We need to get there with AI now. There doesn't
Speaker 16: need to be any more deaths. You know, we need
Speaker 16: to be like taking this seriously. And AI is great,
Speaker 16: it's incredible, but these models, you know, they're inaccurate, they hallucinate,
Speaker 16: they're kind of hard to control.
Speaker 5: So what should we do?
Speaker 17: I mean, should CEOs be held personally liable? Should I
Speaker 17: was talking to Demis hassibus as CEO of Google Deep Mind,
Speaker 17: and he I asked, look, if we knew every company
Speaker 17: in every country would pause, should.
Speaker 7: We pause AI?
Speaker 17: So society and regulation can catch up and he said, yes,
Speaker 17: he would be in favor of that.
Speaker 5: Would you be in favor, Emily?
Speaker 16: Number One, Tech hates regulation.
Speaker 18: You know that.
Speaker 16: They hate it, right, they get people on, oh, it
Speaker 16: slows down innovation. They hate regulation. They hate it, they
Speaker 16: hate it. They hate it except one regulation they love
Speaker 16: Section two thirty, which basically says they're not held respond
Speaker 16: accountable for these deaths or for anything that their social
Speaker 16: media or their AI does, and that needs to change.
Speaker 3: There was Salesforce CEO Marc Benioff speaking with Bloomberg's Emily Chang.
Speaker 4: A crucial speech from the President of the United States
Speaker 4: and Davos eases some of the tensions in the market.
Speaker 4: We're now up eight ten percent on the Nasdaq one hundred,
Speaker 4: having had on the broader markets in the SMP the
Speaker 4: worst day since April yesterday. Now we bounce back a
Speaker 4: little bit. We've seen a holt and slides on bonds,
Speaker 4: on crypto as well as the President says he would
Speaker 4: not be wanting to use force when it comes to
Speaker 4: his attention on Greenland Nasdaq. If you look under the
Speaker 4: hood and video as your biggest points contributed to the
Speaker 4: upside of the downside, it's Microsoft and this name Netflix
Speaker 4: currently down by some four percentage points. We had been
Speaker 4: lower earlier in trading, and that's.
Speaker 5: After we saw well.
Speaker 4: Profit forecasts disappoint the market after we got its earnings.
Speaker 4: We look what Blue Meg Intelligence has been writing, and
Speaker 4: it's calling the MNA noise also driving investor sentiment. Pleas
Speaker 4: to say, Bluemeg Intelligence is keithan rag and Atham.
Speaker 5: Is here with us.
Speaker 4: So ether the m and A noise is also MNA
Speaker 4: spending and that seems to be where the margin is
Speaker 4: getting a knock.
Speaker 15: Yeah, that's exactly what it is, Caroline. And so we
Speaker 15: saw for the first time that you know, content cost
Speaker 15: is actually going to be higher than expected. Ten percent
Speaker 15: content cost growth is what they're forecasting for twenty twenty six.
Speaker 15: You compt that to about high single digits in prior years.
Speaker 15: And really, I mean this is just a microcosm of
Speaker 15: what we're seeing on a much bigger level with the
Speaker 15: whole eighty three billion dollar acquisition of Warner. They're basically
Speaker 15: paying for content, They're basically paying to keep that engagement
Speaker 15: level up. And I think what was a little bit
Speaker 15: disconcerting from you know, there was obviously a lot of
Speaker 15: nuance in the earnings report. But what we saw was
Speaker 15: you know, engagement growth. Yes, you know it did grow,
Speaker 15: but by a very modest amount, only about two percent
Speaker 15: the whole year. And remember this was a year where
Speaker 15: they really had blockbuster content. I mean whether it was
Speaker 15: Stranger Things or Squid Game or K Pop Demon Hunters.
Speaker 15: I mean, this was the year when we should have
Speaker 15: seen a much bigger uptic in engagement growth, which kind
Speaker 15: of really then leads us to the fact that, you know,
Speaker 15: this is why they need to buy Warner and this
Speaker 15: is why you know you have that acquisition KEITHA.
Speaker 3: In the time that we've come on air here on
Speaker 3: Bloomberg Tech, Bloomberg's reported that the EU is going to
Speaker 3: probe both the Netflix and Paramount bids for Warner Brothers
Speaker 3: Discovery in parallel, which is a somewhat unprecedented approach for
Speaker 3: two companies to go head to head in the context
Speaker 3: of a regulatory probe. What is the regulatory risk on
Speaker 3: this to you? You know, I know that you're trying
Speaker 3: to model for what happens next, and I always ask you,
Speaker 3: he hearing a Nathan, what happens next?
Speaker 15: Yeah, regulatory risk definitely is a big one there ed
Speaker 15: definitely much higher for Netflix compared to a paramount, especially
Speaker 15: as you look at the streaming concentration in some of
Speaker 15: the European markets. You just look at the basic size
Speaker 15: of Netflix subscribe base, it's about three hundred and twenty
Speaker 15: five million. Combine that with about one hundred and twenty
Speaker 15: five million with Warner Brothers. Again, you have four hundred
Speaker 15: and fifty million. And in some of those European markets,
Speaker 15: that risk is really really high. It's high even in
Speaker 15: the United States at about thirty five to forty percent,
Speaker 15: but definitely higher there. So antitrust is definitely going to
Speaker 15: be a huge part. Apart from that, you also have
Speaker 15: the financial risk. I mean, is this going to turn
Speaker 15: into a really ugly bidding war. So that's also something
Speaker 15: that we're kind of on the lookout for.
Speaker 3: Keith ranging up and from Bloomberg Intelligence. Great to have
Speaker 3: you back, Thank you so much. Let's turn to the
Speaker 3: private markets during delivery startup zip Line has closed the
Speaker 3: more than six hundred million dollar funding round, putting the
Speaker 3: company's valuation at seven point six billion dollars. Keller Clifton,
Speaker 3: sit Line CEO co founder joins us. Now it's a
Speaker 3: big jump in valuation, although I don't think you actually
Speaker 3: ever disclosed the twenty twenty four round that put you
Speaker 3: a pretty significant valuation of five billion anyway, But there's
Speaker 3: a lot of interest in this color and why do
Speaker 3: you raise the funds?
Speaker 2: What are you going to use them for?
Speaker 18: Well, I mean, you know, we spent most of last
Speaker 18: year expanding the service aggressively in Dallas. It's been an
Speaker 18: amazing place to you know, for almost a decade ZIP
Speaker 18: when operated mainly outside the US, and last year there
Speaker 18: was basically regulatory progression in the US that allowed this
Speaker 18: technology to start serving US citizens. And what we've seen
Speaker 18: is just like explosive growth and basically infinite demand on
Speaker 18: behalf of customers. I mean, it turns out when you
Speaker 18: design delivery where anybody can pull out their phone, order
Speaker 18: anything they need, have it delivered to their home in
Speaker 18: less than ten minutes, people use that service a lot
Speaker 18: like ten times as much as we've seen usage for
Speaker 18: traditional delivery services. And so yeah, this funding round is
Speaker 18: going to allow us to start announcing new metros. Today,
Speaker 18: we're announcing that we're launching Houston and Phoenix over the
Speaker 18: coming months, and then we'll launch every quarter that comes now,
Speaker 18: will add new metros to the overall network.
Speaker 3: And what's the scale of those launches at first? Right
Speaker 3: that you know, when I shared some of the data
Speaker 3: that you put out there on x there was a
Speaker 3: lot of interest on the rates of it expansion. You know,
Speaker 3: the headline is two million deliveries, but if you think
Speaker 3: about what we're talking about lost mile delivery, that's such
Speaker 3: a tiny fraction of what a delivery van will do.
Speaker 2: How real is this?
Speaker 18: I mean the data that we're seeing again just in
Speaker 18: a single metro in the US, but the data is
Speaker 18: mind blowing. I mean, we have municipalities in Dallas where
Speaker 18: just on Sunday, ten percent of homes placed an order
Speaker 18: with Zipline in the municipality. So it's like, you know,
Speaker 18: we have certain cities where more than fifty percent of
Speaker 18: homes are engaged Zipline customers. So this has definitely gone
Speaker 18: from like science fiction to completely normal and something people
Speaker 18: depend on day in and day out in just a
Speaker 18: few months. Yeah, the service has been growing about fifteen
Speaker 18: percent week over a week over the last year.
Speaker 4: Kind of also unit economics of it, how much you
Speaker 4: having to spend on each of these deliveries.
Speaker 2: The advantagement.
Speaker 18: It shouldn't be that surprising, But actually, I think people
Speaker 18: may not realize when when you're talking about instant normal
Speaker 18: instant delivery, we're using a four thousand pound gas combustion
Speaker 18: vehicle driven by a human to deliver something to your
Speaker 18: house that weighs five pounds. It's actually a super expensive solution.
Speaker 18: This is the reason that there are so many fees.
Speaker 18: And then you know, tip on top autonomous systems are
Speaker 18: going to be less expensive ten times as fast plus
Speaker 18: their zero emission. So these kinds of systems are already
Speaker 18: cost comparable today, they'll be significantly less expensive in the future.
Speaker 3: There is a lot of interest in this particular funding
Speaker 3: round because some of the names involved are the whole
Speaker 3: marks of a pre IPO round some anchor tenant investors.
Speaker 3: Is that a fair assumption to make?
Speaker 2: I mean, zip Line has been really lucky.
Speaker 18: I think that there's a lot you know, we've been
Speaker 18: building this company for twelve years, but I think it's
Speaker 18: finally kind of obvious that robotics is going to remake
Speaker 18: the planet over the last I mean, I think it's
Speaker 18: going to transform a lot of economies and logistics is
Speaker 18: one of the most obvious places where automation and robotics
Speaker 18: can have a huge impact. It can improve service, prove reliability,
Speaker 18: and it's something that people are going to depend on
Speaker 18: day in and day out. By the way, it can
Speaker 18: also create a lot of high paying jobs in the
Speaker 18: United States, both on the manufacturing front as well as
Speaker 18: like maintenance.
Speaker 2: We're building out.
Speaker 18: It's complicated new kinds of infrastructure in each of these cities.
Speaker 18: It's the reason that every city has been so excited
Speaker 18: to have Zipline comme. It's creating high paying jobs. We're
Speaker 18: investing in the in each of those cities that were launching.
Speaker 4: I'm not sure that was an answers to whether you're
Speaker 4: going to be ipoing or not, but I go really
Speaker 4: more to calor the fact that this is a global company.
Speaker 4: We're looking at your drones delivering food, but it's really
Speaker 4: about medicine and health and in particular over in Africa.
Speaker 4: Can you talk to us about how much of the
Speaker 4: scale of the business is there.
Speaker 5: Well, yeah, Zipline.
Speaker 18: You know, when we started the company, what we do
Speaker 18: what we do today was illegal in the United States,
Speaker 18: so not an ideal pitch for investors. But this was
Speaker 18: the reason that we initially partnered with the government of Rwanda.
Speaker 18: You know, today's Zipline serves five thousand hospitals and health
Speaker 18: facilities across the world outside the US, or a huge,
Speaker 18: huge healthcare logistic network. We've now done one hundred and
Speaker 18: thirty five million commercial autonomous miles with zero safety incidents,
Speaker 18: and the system is saving about seventeen thousand lives a year,
Speaker 18: predominantly moms and kids. One cool thing, just this week
Speaker 18: we announced a new national scale partnership with the government
Speaker 18: of Rwanda. We're going to be dramatically expanding the number
Speaker 18: of use cases, building a new distribution center, and for
Speaker 18: the first time ever, ZIP is bringing its next generation technology,
Speaker 18: which we call Platform two, to the continent of Africa.
Speaker 3: CAWT of those regulatory changes you were talking about were
Speaker 3: the President's EO in June and then later in the
Speaker 3: summer the line of sight rules. Right, this is all
Speaker 3: in the context of This is all in the context
Speaker 3: of the President's focus on this as a national security priority.
Speaker 3: I hope this question doesn't shock you, but how is
Speaker 3: Zipline thinking about literally weaponizing the technology its use in
Speaker 3: defense use cases? Conversations with the President?
Speaker 18: Well, the great news is actually that you know, the
Speaker 18: government is trying to accomph a lot of things. They're
Speaker 18: really focused on AI and exports and commercial diplomacy.
Speaker 5: This is the reason.
Speaker 18: Just five weeks ago, Zipline announced a five hundred and
Speaker 18: fifty million dollars total partnership with the State Department as
Speaker 18: well as all of our African country partners to basically
Speaker 18: make sure that the developing world is built on top
Speaker 18: of USAI and robotics infrastructure. That's really good because it
Speaker 18: can make sure that these countries enables these countries to
Speaker 18: save money and save lives. But it is also a
Speaker 18: key way of making sure that the US can maintain
Speaker 18: its manufacturing and technology leadership for the decade to come.
Speaker 18: So Zipline is already working really closely on those initiatives.
Speaker 18: This announcement with Rwanda would not have happened without that
Speaker 18: partnership from the US State Department.
Speaker 4: It's a big funding round, is a big valuation Siplin
Speaker 4: C Kelly Clifton, thanks for joining us.