WEBVTT - Paramount's TV Network Writedown, and Silicon Valley and the Election 0:00:01.440 --> 0:00:05.080 From Mahard where Innovation for Money and Power Collie in 0:00:05.200 --> 0:00:06.720 Silicon Valley NBN. 0:00:07.040 --> 0:00:11.559 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:26.040 --> 0:00:27.160 Live from San Francisco. 0:00:27.200 --> 0:00:30.280 This is Bloombo Technology paramount up as the Nickelodeon and 0:00:30.400 --> 0:00:33.720 MTV parent follows Warner Brothers in a big write down 0:00:33.880 --> 0:00:37.760 of its cable TV networks and cybersecurity firm. Akami jumps 0:00:37.760 --> 0:00:41.839 as the DVOS specialist post strong numbers amid scrutiny of. 0:00:41.880 --> 0:00:43.320 The cybersecurity sector. 0:00:43.400 --> 0:00:47.320 Plus tech for Kumala, we speak to the technology leaders 0:00:47.320 --> 0:00:51.639 and Silicon Valley Democrats backing the Vice president's bid for. 0:00:51.640 --> 0:00:52.200 The White House. 0:00:52.240 --> 0:00:53.960 I want to get straight to financial markets and the 0:00:54.040 --> 0:00:57.120 NASDAQ one hundred, very tech heavy index. You have the 0:00:57.160 --> 0:01:00.600 megacaps and the higher multiple software names. What you're seeing 0:01:00.680 --> 0:01:03.240 is a five day chart of the Nasdaq and it 0:01:03.280 --> 0:01:06.720 is completely flat, zero percent over the course of the week. 0:01:06.760 --> 0:01:08.240 But there is peril within that. 0:01:08.720 --> 0:01:13.600 Because if the NAZDAT one hundred closes down negative on 0:01:13.640 --> 0:01:16.240 a weekly basis, that would mark five straight weeks of 0:01:16.319 --> 0:01:19.960 declines for that index, which is the worst week run 0:01:20.000 --> 0:01:22.360 of weekly drops going back to May of twenty twenty two. 0:01:23.040 --> 0:01:27.440 If it's positive, it snaps a four week declined streak, 0:01:27.520 --> 0:01:30.080 which it had seen in April, and things look a 0:01:30.120 --> 0:01:33.360 little bit rosier. We are worried about growth, we're worried 0:01:33.400 --> 0:01:37.080 about a little bit geopolitical risk, but earnings have been 0:01:37.080 --> 0:01:40.000 a mixed picture, where in aggregate we're probably feeling better 0:01:40.319 --> 0:01:44.080 about the technology sector in part AI infrastructure. 0:01:44.080 --> 0:01:46.000 That brings us to TSMC. The chipmaker. 0:01:46.080 --> 0:01:50.800 Sales grew by forty five percent in July on strong demand. 0:01:50.920 --> 0:01:54.640 In particular, it would seem for AI accelerators. Those are 0:01:54.680 --> 0:01:58.560 the usadrs or US listed shares of Taiwan Semiconductor, up 0:01:58.640 --> 0:02:01.200 eight tenths of a percent in the US session bloombergs 0:02:01.200 --> 0:02:05.120 Ian King is here with me in San Francisco. The 0:02:05.240 --> 0:02:07.800 data is for the month, and we're trying to sort 0:02:07.800 --> 0:02:09.800 of extrapolate out and say, well, for the quarter, what 0:02:09.840 --> 0:02:13.320 does that look like? But I guess big picture it's 0:02:13.400 --> 0:02:16.800 bullish because TSMC is the chip factory for the world. 0:02:16.840 --> 0:02:20.079 Basically, no exactly all roads lead to into Yeah, and 0:02:20.160 --> 0:02:24.639 I'm forty five percent is dramatic, right, that's tremendous compared 0:02:24.639 --> 0:02:26.360 to where we were last year. But we have to 0:02:26.360 --> 0:02:28.440 put that in context. Part of that was last year 0:02:28.480 --> 0:02:32.280 things were depressed. A lot of smartphone market related chip 0:02:32.360 --> 0:02:35.120 orders weren't that great. But if you're worried about this 0:02:35.240 --> 0:02:38.720 AI infrastructure build out, if you're worried about what Invidia 0:02:38.880 --> 0:02:41.320 is buying, what AMD is buying, what even Intel is 0:02:41.320 --> 0:02:44.160 buying these days, this tells you Nope, they're still putting 0:02:44.280 --> 0:02:47.280 orders in and those factories are still working flat out. 0:02:47.440 --> 0:02:51.040 Okay, In very simple terms, TSMC is a contract manufacturers, 0:02:51.040 --> 0:02:53.560 So the biggest chip names go to TSMC and say, 0:02:53.760 --> 0:02:55.240 here are our very special chips. 0:02:55.320 --> 0:02:56.520 Make them for us please. 0:02:56.919 --> 0:02:59.919 That brings me to Nvidia, which reports August twenty eight, 0:03:00.520 --> 0:03:04.120 and they are the market right now for AI accelerators. 0:03:05.160 --> 0:03:07.120 Look ahead to August twenty eight and what we're kind 0:03:07.160 --> 0:03:10.960 of expecting, and does TSMC kind of inform what we 0:03:11.040 --> 0:03:11.560 might get? 0:03:11.680 --> 0:03:14.079 I mean to an extent, yes, I mean TSMC has 0:03:14.120 --> 0:03:16.800 a lot of customers, and Video is one of the biggest. 0:03:16.840 --> 0:03:19.680 But Apple is also a huge customer. Qualcom is also 0:03:19.680 --> 0:03:23.200 a huge customer, so it's not a direct linear relationship there. 0:03:23.440 --> 0:03:25.800 But at the same time, everything we've heard, all of 0:03:25.840 --> 0:03:28.480 the concerns we've heard about in video, can it continue 0:03:28.520 --> 0:03:32.120 this growth rue. Nobody is doubting the fundamentals of demand. 0:03:32.440 --> 0:03:35.920 We're also as you've seen lots of reports about some 0:03:35.960 --> 0:03:38.240 problems with some new tips that they've had. Yes, but 0:03:38.280 --> 0:03:42.160 they've come out themselves and said the still demand for 0:03:42.200 --> 0:03:43.600 our olds. Yes, some worry about it. 0:03:43.640 --> 0:03:47.160 That was specifically about design or engineering issues around Blackwell, 0:03:47.200 --> 0:03:52.000 which would be the latest generation accelerator. TSMC is interesting 0:03:52.040 --> 0:03:56.120 because it's literally concentrated in Taiwan a lot of the activity. 0:03:56.760 --> 0:03:59.080 But the story here in the United States has been 0:03:59.120 --> 0:04:01.800 the flow of public money from the Chips Act or 0:04:01.840 --> 0:04:06.280 government money to onshore our industry. And there's a piece 0:04:06.280 --> 0:04:09.440 on the Blueberg Terminal by Mackenzie Hawkins about how now 0:04:09.680 --> 0:04:13.000 present day much of that money has been allocated from 0:04:13.000 --> 0:04:15.040 the Chips Act. What are the numbers behind that and 0:04:15.520 --> 0:04:16.600 what's the impact been. 0:04:16.720 --> 0:04:19.400 Yeah, I mean the key point that she makes in 0:04:19.440 --> 0:04:22.080 her story is the hard work has been done, which 0:04:22.160 --> 0:04:23.320 is like, hey, we're going to give you this, We're 0:04:23.320 --> 0:04:25.680 going to give you this, but nothing has actually, no 0:04:25.839 --> 0:04:29.320 checks have been mailed, right, this is all promissory right. 0:04:29.680 --> 0:04:32.440 And as a US taxpayer, like we both are, that's 0:04:32.440 --> 0:04:35.640 actually a smart thing because you want to see these 0:04:35.680 --> 0:04:39.960 things built and in operation before you actually pay for them. 0:04:40.040 --> 0:04:40.200 Right. 0:04:40.560 --> 0:04:43.840 This is, you know, a very complex industry and it's 0:04:44.000 --> 0:04:47.200 very brutal economically, as we've seen with what's happening at Intel. 0:04:47.279 --> 0:04:49.159 So you want to make sure that these things actually 0:04:49.160 --> 0:04:51.839 get built, the equipment goes in, and then the money 0:04:51.880 --> 0:04:53.800 gets distributed. 0:04:54.040 --> 0:04:56.440 As you've educated our audience on for it for quite 0:04:56.480 --> 0:04:59.000 a while. Now takes a lot of time to build 0:04:59.040 --> 0:05:02.080 manufacturing capacity for jips as well. Bloomberg's Ian King here 0:05:02.080 --> 0:05:04.320 in San Francisco, thank you. Let's get back to that 0:05:04.400 --> 0:05:07.599 story about Paramount that we alluded to at the top. 0:05:07.800 --> 0:05:10.080 Actually an interesting or positive reaction. 0:05:09.839 --> 0:05:10.440 In the shares. 0:05:10.760 --> 0:05:13.719 It is a write down of six billion dollars on 0:05:13.800 --> 0:05:17.159 the legacy cable TV networks. Very similar to the news 0:05:17.200 --> 0:05:20.560 this week that we got from Warner Brothers Discovery. There 0:05:20.600 --> 0:05:23.000 are some points of distinction with Paramount in terms of 0:05:23.040 --> 0:05:25.240 the properties and some other news in there as well. 0:05:25.520 --> 0:05:28.680 Bloomberg's Hannah Miller is back in New York City. So 0:05:28.839 --> 0:05:32.440 Paramount the numbers on the right down the story behind 0:05:32.480 --> 0:05:34.120 the write down specific to Paramount. 0:05:34.160 --> 0:05:35.719 What's going on, Yeah, So it's. 0:05:35.640 --> 0:05:38.520 Very similar to Warner Brothers Discovery. Where they're writing down 0:05:38.520 --> 0:05:42.119 the value of their traditional TV networks. And this is after, 0:05:42.360 --> 0:05:44.480 you know, the streaming wars have broken out. You know, 0:05:44.520 --> 0:05:49.640 they've taken to reevaluating their cable television as streaming continues 0:05:49.720 --> 0:05:50.960 to grow more and more popular. 0:05:51.800 --> 0:05:53.160 What's different here is. 0:05:53.080 --> 0:05:55.880 That with Paramount, you have the backdrop of its deal 0:05:56.279 --> 0:05:59.359 with sky Dance that is expected to finalize in the 0:05:59.360 --> 0:06:01.719 first half of twenty twenty five. You know, there's still 0:06:01.720 --> 0:06:03.960 a forty five day period where you know, people can 0:06:03.960 --> 0:06:07.320 submit competing offers, but there is a lot of bullishness 0:06:07.320 --> 0:06:09.880 around Paramount because of this pending deal. 0:06:10.839 --> 0:06:13.160 I'm reading through your story on Paramount. By the way, 0:06:13.160 --> 0:06:16.000 Hannah Miller, pretty new to this beat. How busy have 0:06:16.080 --> 0:06:18.720 you been in those first few weeks of covering the 0:06:19.320 --> 0:06:23.040 media industry? But Paramount part of the story is cost 0:06:23.080 --> 0:06:27.160 reduction in cost cuts as well. Is that directly related 0:06:27.200 --> 0:06:29.400 to the write down or is that a different story. 0:06:29.839 --> 0:06:32.600 So before you know, we learned about this write down, 0:06:32.720 --> 0:06:35.479 you know, there's this whole five hundred million dollar cost 0:06:35.480 --> 0:06:39.200 cutting effort that Paramount has undertaken. And then Skydance has 0:06:39.240 --> 0:06:43.200 also identified two billion dollars worth of cost efficiencies. So 0:06:43.360 --> 0:06:45.760 all of this has played into that they're working to 0:06:45.839 --> 0:06:48.800 tighten the belt. Another big piece of news coming out 0:06:48.800 --> 0:06:51.480 of the earnings call yesterday was that there are layoffs 0:06:51.480 --> 0:06:54.680 coming that fifteen percent of the US workforce is going 0:06:54.720 --> 0:06:57.120 to be cut before the end of this year. So 0:06:57.160 --> 0:06:59.400 there's a lot going on with Paramount as it prepares 0:06:59.440 --> 0:07:01.400 to final this deal with Skuyddance. 0:07:02.760 --> 0:07:05.320 Hannah, I think I said this to you in the 0:07:05.360 --> 0:07:06.920 show twenty four hours ago, but I always tried to 0:07:06.920 --> 0:07:10.280 find the technology story within this, and what's common between 0:07:10.280 --> 0:07:13.760 those two names is the pain in the Legacy TV 0:07:13.880 --> 0:07:16.880 network side is because of the move to streaming. But 0:07:17.000 --> 0:07:20.720 actually Paramount streaming business just based on the growth numbers, 0:07:20.800 --> 0:07:22.360 it seems like they're doing okay. 0:07:23.040 --> 0:07:26.400 Yeah, So for Paramount, they actually loss subscribers for their 0:07:26.440 --> 0:07:30.480 Paramount Plus streaming service during the second quarter, and that 0:07:30.600 --> 0:07:33.000 was because of a one time event the end of 0:07:33.000 --> 0:07:34.480 this deal in South Korea. 0:07:35.200 --> 0:07:36.760 They're very optimistic about it. 0:07:36.800 --> 0:07:40.200 Otherwise, you know, they have seen revenues increase there, so 0:07:40.680 --> 0:07:45.320 you know, despite this setback, like other companies like Warner Brothers, 0:07:45.360 --> 0:07:47.480 they're very excited about their streaming service. 0:07:48.240 --> 0:07:50.960 I was referring to revenue jumping thirteen percent, But you're 0:07:51.000 --> 0:07:54.560 exactly right. Paramount Plus Service lost two point eight million 0:07:54.640 --> 0:07:58.480 subs due to that South Koreas you just outlined Bloomberg's Hanamella, 0:07:58.520 --> 0:07:59.239 Happy Friday. 0:07:59.480 --> 0:08:01.600 Thank you very much for your reporting. Now coming up 0:08:01.640 --> 0:08:01.880 on the. 0:08:01.800 --> 0:08:06.400 Show, Roger Leed, the creator of layoffs dot Fyi, a 0:08:06.440 --> 0:08:09.560 website for tracking tech layoffs, is going to join us 0:08:09.600 --> 0:08:11.560 to discuss all the job cuts in aggregate that have 0:08:11.600 --> 0:08:14.800 been announced in his data, and it's timely. Let's take 0:08:14.800 --> 0:08:18.240 a quick look at shares of Cisco. They had been 0:08:18.400 --> 0:08:22.440 positive or hire this Friday session. Cisco now softer six 0:08:22.520 --> 0:08:26.440 tenths of one percent. Reuter's is reporting that Cisco will 0:08:26.520 --> 0:08:29.920 lay off thousands of employees in a second round of 0:08:30.040 --> 0:08:33.559 job cuts this year, and that Cisco could announce those 0:08:33.600 --> 0:08:37.640 job cuts as early as Wednesday of next week. It 0:08:37.679 --> 0:08:40.160 did move the shares and Wednesday of next week, by 0:08:40.200 --> 0:08:45.200 the way, August fourteenth, Cisco reports earnings. We'll keep an 0:08:45.200 --> 0:08:47.800 eye on that story and see if Bloomberg has any 0:08:47.840 --> 0:08:48.679 advancements on it. 0:08:48.960 --> 0:08:49.560 Be right back. 0:08:49.559 --> 0:09:11.400 This is Bloomberg Technology. We should keep talking about tech 0:09:11.520 --> 0:09:14.199 jobs and layoffs. Over one hundred and twenty six thousand 0:09:14.240 --> 0:09:17.080 tech employees have been laid off so far in twenty 0:09:17.160 --> 0:09:22.200 twenty four, with companies increasingly citing AI as a reason 0:09:22.559 --> 0:09:24.360 for the job cuts. I want to bring in Roger Lee, 0:09:24.360 --> 0:09:27.840 who's start founder and the creator of layoffs dot fyi. 0:09:27.840 --> 0:09:32.080 It's a platform that's dedicated to tracking tech layoffs since 0:09:32.400 --> 0:09:36.360 the COVID nineteen pandemic in twenty twenty and you and 0:09:36.440 --> 0:09:40.320 I were just discussing this during the commercial break. I 0:09:40.360 --> 0:09:43.679 look at all of the news headlines and the cadence 0:09:43.720 --> 0:09:47.880 of headlines probably starting early June through to now. But 0:09:48.000 --> 0:09:51.880 you've got the data, so summarize the scale of what's 0:09:51.920 --> 0:09:55.400 happening in the industry right now versus prior years where 0:09:55.440 --> 0:09:56.720 we saw heavy layoffs as well. 0:09:57.880 --> 0:09:59.959 Yeah, that's right, So corn and layoffs and FI. 0:10:00.320 --> 0:10:03.120 We've tracked now one hundred and twenty six thousand tech 0:10:03.200 --> 0:10:07.080 employees laid off so far in twenty twenty four. The 0:10:07.080 --> 0:10:10.800 good news that's actually down forty two percent from the 0:10:10.880 --> 0:10:13.360 same time last year. And if you look at the 0:10:13.400 --> 0:10:17.000 quarter on quarter trends, tech layoffs have generally been leveling 0:10:17.040 --> 0:10:20.559 off since their peak in Q one of twenty twenty three. 0:10:21.520 --> 0:10:24.280 Of course, it has spiked a little bit in the 0:10:24.320 --> 0:10:27.880 past couple of weeks. The bad news, twenty twenty four 0:10:28.000 --> 0:10:31.160 is still on pace to have more layoffs than any 0:10:31.200 --> 0:10:35.280 other year this decade except for twenty twenty three. And 0:10:35.360 --> 0:10:37.920 of course it's all a small comfort if you're one 0:10:37.920 --> 0:10:40.480 of those one hundred and twenty six thousand people laid off. 0:10:41.480 --> 0:10:45.120 We just illustrated that point, Roger with a chart which 0:10:45.200 --> 0:10:47.599 was showing your data at layoffs still FYI. 0:10:47.960 --> 0:10:49.400 And then here's the point that I was making. 0:10:49.440 --> 0:10:53.160 Those are big names, right, Intel, Tesla, SAP in Germany, Cisco, 0:10:53.240 --> 0:10:58.280 We just broke that reporting on in the stock move AI. 0:10:58.800 --> 0:11:02.120 So what you're to may or may not track, is 0:11:02.120 --> 0:11:05.360 is there a reallocation of resource to new jobs if 0:11:05.360 --> 0:11:06.760 the justification is AI. 0:11:07.960 --> 0:11:10.160 That's definitely what we're seeing in a lot of the 0:11:10.200 --> 0:11:14.760 company's announcements for the layoffs that tech companies are increasingly 0:11:14.840 --> 0:11:18.320 citing AI as the reason. You know, for example, earlier 0:11:18.320 --> 0:11:21.640 this week, Dell cut thousands of employees as part of 0:11:21.720 --> 0:11:25.440 a sales team reorg that included creating a new team 0:11:25.559 --> 0:11:29.080 focused on AI sales. And then earlier this year, you Know, 0:11:29.120 --> 0:11:32.440 into It laid off one thousand, eight hundred employees and 0:11:32.600 --> 0:11:36.079 cited that they're doing so so they can invest and 0:11:36.280 --> 0:11:39.400 make more hires to help build Eye into its text 0:11:39.480 --> 0:11:44.760 crop software, and it is definitely an allocation of resources. 0:11:44.800 --> 0:11:48.520 You know, building AI is expensive, and according to salary 0:11:48.559 --> 0:11:52.480 tracker comprehensive dot Io, a senior AI engineer in the 0:11:52.480 --> 0:11:55.360 Bay Area earns two hundred and eight thousand dollars per 0:11:55.400 --> 0:11:59.280 year just in base salary, and that's sixteen percent more 0:11:59.320 --> 0:12:02.120 than a non AII engineer and doesn't even include stock. 0:12:02.200 --> 0:12:05.319 So if you include stock options equity, that pay package 0:12:05.360 --> 0:12:08.439 can total easily half a million to a million dollars, 0:12:09.120 --> 0:12:12.520 not to mention all the costs involved in infrastructure and 0:12:12.559 --> 0:12:14.199 hardware for building AI. 0:12:15.040 --> 0:12:17.680 So you know, the economic environment still tight. 0:12:18.040 --> 0:12:21.360 Companies are finding that the only way to increase investment 0:12:21.400 --> 0:12:24.920 in AI is to cut cost elsewhere, and hence all 0:12:24.960 --> 0:12:26.040 the layoffs that we've been seeing. 0:12:26.240 --> 0:12:30.000 Yeah, as Bloomberg Technology producer Margarite Galleryini just reflected on 0:12:30.040 --> 0:12:32.000 in our team chat, maybe we're in the wrong line 0:12:32.040 --> 0:12:35.120 of work because it's lucrative if you are a computer 0:12:35.160 --> 0:12:38.080 scientist or software engineer in that space. There's a point 0:12:38.120 --> 0:12:41.480 you made a minute ago about twenty twenty four. We 0:12:41.559 --> 0:12:44.640 are in early August and so let's try and extrapolate out. 0:12:44.640 --> 0:12:47.920 I look at the number of companies, for example, rather 0:12:47.960 --> 0:12:51.280 than the jobs in aggregate that are making these announcements. 0:12:51.559 --> 0:12:54.120 Have you a sense in the direction of travel for 0:12:54.160 --> 0:12:55.000 the remainder. 0:12:54.679 --> 0:12:56.240 Of the year. Yeah. 0:12:56.280 --> 0:12:59.280 Typically what we see is that Q one and Q 0:12:59.400 --> 0:13:03.280 four and to be the biggest quarters for layoffs. That's 0:13:03.320 --> 0:13:06.520 often because companies do their annual budgeting around the end 0:13:06.559 --> 0:13:09.680 of year, which leads to those layoffs, Whereas the middle 0:13:09.720 --> 0:13:12.240 of the year, you know, summer period that we are 0:13:12.320 --> 0:13:15.120 right now, actually tends to be slower. 0:13:14.679 --> 0:13:15.680 In terms of layoffs. 0:13:15.679 --> 0:13:17.760 Obviously, there's some notable exceptions that you see on the 0:13:17.760 --> 0:13:18.360 screen here. 0:13:18.880 --> 0:13:20.559 So unfortunately, I would. 0:13:20.320 --> 0:13:23.480 Expect that pech layoffs may pick up again as we 0:13:23.559 --> 0:13:25.760 head towards the end of the year and early next year, 0:13:26.120 --> 0:13:29.800 as companies take stock of their year forecast into next year, 0:13:30.080 --> 0:13:32.719 do their annual budgeting and decide whether they have the 0:13:32.800 --> 0:13:34.000 right team to move forwards. 0:13:35.080 --> 0:13:37.239 So let's do something else and do this and aggregate. 0:13:37.920 --> 0:13:40.520 You know, you started tracking this data at the early 0:13:40.600 --> 0:13:43.720 days of the pandemic. How does this four year period 0:13:43.800 --> 0:13:47.640 or so compare to history. I think about the dot 0:13:47.679 --> 0:13:50.280 com combubble, the global financial crisis. 0:13:51.520 --> 0:13:53.559 Are the ways to compare and controst. 0:13:53.200 --> 0:13:56.320 Roger, Yeah, stop to say, you know layoffs AFII. 0:13:56.480 --> 0:13:59.120 We started in twenty twenty, so don't have the numbers 0:13:59.160 --> 0:14:01.199 from those those two time periods. 0:14:01.559 --> 0:14:02.760 Although I will say. 0:14:02.640 --> 0:14:06.000 The scale of the tech industry is just so much 0:14:06.040 --> 0:14:09.440 bigger than during the dot com era or even the 0:14:09.440 --> 0:14:14.400 global financial crisis, So in aggregate numbers, I believe that 0:14:14.559 --> 0:14:17.400 this current period of layoffs is going to be the 0:14:17.440 --> 0:14:20.600 most that we've ever seen in the tech industry, just 0:14:20.600 --> 0:14:23.080 because the scale of the tech industry and the number 0:14:23.080 --> 0:14:25.680 of people working in this industry is so much higher 0:14:25.720 --> 0:14:26.880 now than in previous years. 0:14:27.920 --> 0:14:30.640 Roger Lee, creator of Layoffs, FYI, thank you for your 0:14:30.680 --> 0:14:33.320 analysis and sharing your data with us, and the chart 0:14:33.360 --> 0:14:36.720 depiction in particular really helps to illustrate what's happening in 0:14:36.720 --> 0:14:39.640 this industry. We're also going to look at shares really 0:14:39.680 --> 0:14:41.720 quickly of ak am I. We're going to be having 0:14:41.720 --> 0:14:44.320 a conversation up next with the CEO. But in the 0:14:44.360 --> 0:14:46.600 cyber space, this is a d DOOS specialist. 0:14:46.840 --> 0:14:48.440 You see the stock off session. 0:14:48.200 --> 0:14:51.280 Highs, but up almost ten percent a good quarter. But 0:14:51.320 --> 0:14:53.440 the question that the analysts in the street has is 0:14:53.640 --> 0:14:56.520 this is a company that's maybe inconsistent in the number 0:14:56.520 --> 0:14:59.280 of quarters it strings together. A conversation coming up with 0:14:59.320 --> 0:15:02.000 Tom Layton, who is the CEO of Akamai. Maybe he'll 0:15:02.040 --> 0:15:04.240 push back on that. What the streets view of his company. 0:15:04.240 --> 0:15:22.160 We'll see. This is Bloomberg Technology. It's time for talking 0:15:22.200 --> 0:15:24.280 tech and in the news. The owner of the company 0:15:24.320 --> 0:15:28.840 behind Timu, Colin Wang, has become China's richest person, amassing 0:15:28.880 --> 0:15:32.600 a fortune of forty eight point six billion US dollars. 0:15:32.600 --> 0:15:35.840 That's according to the Bloomberg Billionaires Index. Hung's rise has 0:15:35.840 --> 0:15:40.400 been fueled by China's changing shopping habits and expansion outside 0:15:40.400 --> 0:15:44.240 of the region. With its TMU brand, plus Amazon Incs 0:15:44.280 --> 0:15:48.520 an e commerce deal with TikTok and Pinterest. Users can 0:15:48.560 --> 0:15:52.520 now link their profile from the social media platforms to 0:15:52.720 --> 0:15:58.320 their Amazon accounts, allowing customers to buy products directly from ads. 0:15:58.400 --> 0:16:02.320 This is social shop becomes more popular here in the 0:16:02.440 --> 0:16:08.680 United States, and Turkey's Instagram ban hits female entrepreneurs. Orders 0:16:08.840 --> 0:16:11.960 drown up from female led businesses who relied on the 0:16:12.000 --> 0:16:16.400 popular social media platform to drive sales. Turkey abruptly blocked 0:16:16.440 --> 0:16:22.280 access to Instagram on August second, without explaining why that 0:16:22.480 --> 0:16:26.240 was a very e commerce themed and focus selection of 0:16:26.280 --> 0:16:29.160 news stories out there today. The earning story also continues, 0:16:29.280 --> 0:16:32.480 and we continue to look at cybersecurity and Akamai. The 0:16:32.480 --> 0:16:35.960 company reported earnings after the closing belt Thursday. Co founder 0:16:36.000 --> 0:16:38.800 and CEO Tom Layson joins us now for more. 0:16:39.760 --> 0:16:41.480 There are loads of words. 0:16:41.080 --> 0:16:45.160 And adjectives and praise used by the cell side Tom 0:16:45.320 --> 0:16:49.840 a clean print, strong quarter growth, But what there's less 0:16:49.840 --> 0:16:53.200 discussion of is why what were the specific factors in 0:16:53.280 --> 0:16:54.120 the quarter. 0:16:54.320 --> 0:16:57.240 That put Akamai up from Well, we. 0:16:57.280 --> 0:17:02.400 Have several market leading products, and security obviously very important 0:17:02.400 --> 0:17:07.960 today given the large number of damaging attacks, ransomware, data exfiltration, 0:17:08.640 --> 0:17:10.320 and our enterprise. 0:17:09.920 --> 0:17:11.960 Compute business doing very well. 0:17:12.680 --> 0:17:15.800 You know, we talked about just really getting started in 0:17:15.880 --> 0:17:18.119 that aspect of the business this year, and now we 0:17:18.160 --> 0:17:20.600 think we'll exit the year at a one hundred million 0:17:20.640 --> 0:17:24.080 dollar a year annual run rate and revenue with a 0:17:24.080 --> 0:17:26.800 lot of exciting potential for the future. And I think 0:17:26.840 --> 0:17:30.800 those are great proof points that investors are now seeing. 0:17:31.440 --> 0:17:33.600 On the enterprise side. I find that very interesting. 0:17:34.400 --> 0:17:38.040 Is it demonstrative of broad strength in your client base 0:17:38.400 --> 0:17:41.480 those industry sort of willingness to spend or is this 0:17:41.560 --> 0:17:46.080 something specific that Achimi is doing that allows you to 0:17:46.080 --> 0:17:48.200 sort of outperform in a difficult environment. 0:17:49.200 --> 0:17:53.719 Well, security is important for every major enterprise, even in 0:17:53.880 --> 0:17:57.320 tough economic times, which we're seeing some of now, and 0:17:57.480 --> 0:17:59.720 we have the market leading products and. 0:17:59.600 --> 0:18:03.159 The major enterprises really need them to be safe. 0:18:03.480 --> 0:18:06.320 And in compute, I think we have a very compelling 0:18:06.400 --> 0:18:09.920 value proposition. You know, we can provide better performance at 0:18:09.920 --> 0:18:12.639 a much lower price point. And when you can do 0:18:12.800 --> 0:18:16.040 that and help a major enterprise save money, well, this 0:18:16.160 --> 0:18:18.320 is a good time to be able to have that happen. 0:18:20.480 --> 0:18:24.040 Tom strength in the areas you outline compute security and 0:18:24.080 --> 0:18:28.560 then a little weakness in CDN. I would like to 0:18:28.600 --> 0:18:32.120 talk about what's happening in your industry overall. I think 0:18:32.119 --> 0:18:38.320 we start with CrowdStrike, endpoint Specialist u DDoS. But what 0:18:38.480 --> 0:18:42.399 was that weak and situation like for Akamai. Was there 0:18:42.440 --> 0:18:46.280 any tangible positive read through for you or any way 0:18:46.280 --> 0:18:48.720 that you capitalized on what happened? 0:18:49.960 --> 0:18:52.919 Well, we don't use that software ourselves, so there was 0:18:52.960 --> 0:18:57.040 no impact to Akamai, and we helped our customers you 0:18:57.080 --> 0:18:59.560 know where we could, But that was an area where 0:18:59.600 --> 0:19:03.320 we don't really do business I think there were a 0:19:03.320 --> 0:19:07.680 lot of learnings for the industry as a whole. You know, first, 0:19:07.960 --> 0:19:11.359 it really is clear you just can't be doing updates 0:19:12.000 --> 0:19:15.600 all at once everywhere in the world. You know, most 0:19:15.600 --> 0:19:18.359 of the time that's okay, but eventually you're going to 0:19:18.400 --> 0:19:21.680 have an unintended consequence, and if you update the entire 0:19:21.720 --> 0:19:24.720 world at one time, you've got a disaster. You know, 0:19:24.760 --> 0:19:27.440 that's a lesson we learned at Akamai pretty painfully about 0:19:27.480 --> 0:19:31.399 twenty years ago, and ever since then. You know, we. 0:19:31.800 --> 0:19:33.280 Phase our updates. 0:19:33.400 --> 0:19:37.000 After you've been through QA and you're confident, you still 0:19:37.080 --> 0:19:39.600 just go one stage at a time, so in case 0:19:40.160 --> 0:19:43.159 there's something that was unanticipated, you catch it before you 0:19:43.280 --> 0:19:46.840 cause a problem. I think also there's a much better 0:19:46.920 --> 0:19:51.959 understanding that reliability matters, and it takes a lot of investment, 0:19:52.440 --> 0:19:55.840 but you see what happens when when you have something 0:19:55.960 --> 0:19:58.160 like this. I think enterprises will pay a lot more 0:19:58.160 --> 0:20:00.359 attention to reliability going forward. 0:20:01.520 --> 0:20:05.200 I hear you on that I'm not a cyber expert 0:20:06.080 --> 0:20:08.040 by any means, and I know that a lot of 0:20:08.640 --> 0:20:13.800 CIOs cyber managers CSOs watched this program and for them, 0:20:13.920 --> 0:20:16.920 top of mind is a sort of academic debate agent 0:20:17.119 --> 0:20:21.480 versus agent lost delivery or security of that delivery of security? 0:20:22.920 --> 0:20:26.359 Do you see though, away from the academic debate on 0:20:26.400 --> 0:20:30.919 the best security systems action, your enterprise customers saw the 0:20:30.960 --> 0:20:33.720 news cycle and picked up the phone and said, we 0:20:33.800 --> 0:20:35.880 are changing how we do cyber. 0:20:37.400 --> 0:20:40.240 No there, you know, they were just trying to get 0:20:40.240 --> 0:20:44.639 out of the disaster. I think going forward there'll be 0:20:44.680 --> 0:20:48.560 a time of reflection into how do you prevent this 0:20:48.600 --> 0:20:52.040 from happening? How do you keep a vendor from you know, 0:20:52.160 --> 0:20:56.359 having this consequence. And it's not just a situation of 0:20:56.400 --> 0:21:00.000 having multiple vendors, because might even increase the problem because 0:21:00.080 --> 0:21:01.160 of any one of them. 0:21:01.480 --> 0:21:02.359 Has a big issue. 0:21:02.400 --> 0:21:05.720 You got a problem, but really selecting vendors who put 0:21:05.760 --> 0:21:08.960 the extra effort and investment into making sure things stay 0:21:09.000 --> 0:21:10.920 reliable as reliable as possible. 0:21:12.359 --> 0:21:16.119 Tom, I guess closer to home for you, a higher 0:21:16.160 --> 0:21:20.440 profile d doos attack on Azure in June. What did 0:21:20.480 --> 0:21:23.840 you make of that and Microsoft's handling it and how 0:21:23.840 --> 0:21:25.840 did it impact you? 0:21:25.840 --> 0:21:28.840 You know, DDoS attacks are probably the oldest kinds of 0:21:28.880 --> 0:21:30.240 cyber attacks out there. 0:21:30.680 --> 0:21:32.960 They go back more than twenty years as well. 0:21:33.640 --> 0:21:36.560 You know, that's an area where we have leading services 0:21:37.000 --> 0:21:39.800 to help defend customers. In fact, you know, just last 0:21:39.840 --> 0:21:42.920 week we saw one of the top ten DDoS attacks 0:21:43.119 --> 0:21:45.080 of all time coming out of the Middle East. 0:21:45.680 --> 0:21:48.920 You know, with the war there, we're able to. 0:21:48.800 --> 0:21:52.639 Defend a very important financial enterprise from that kind of 0:21:52.640 --> 0:21:55.800