WEBVTT - Huawei AI Chips Contain Advanced Parts from Rivals 0:00:02.520 --> 0:00:12.600 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a 0:00:12.680 --> 0:00:16.400 live from coast to coast with Caroline Hide in New 0:00:16.480 --> 0:00:19.000 York and Ev Low in San Francisco. 0:00:22.160 --> 0:00:25.880 This is Bloomberg Tech coming up. Huaweis of Sundai Processors. 0:00:25.920 --> 0:00:30.480 We're found to contain advanced components from TSMC, Samsung and 0:00:30.680 --> 0:00:33.479 sk Heinez. This is it works to boost domestic production 0:00:33.760 --> 0:00:34.560 of AI chips. 0:00:34.680 --> 0:00:38.519 Plus, Rivian is reworking the manual release of its vehicle 0:00:38.600 --> 0:00:42.640 doors after employees and customers raise concerns over potential safety issues. 0:00:42.840 --> 0:00:46.000 And Taylor Swift's twelfth studio album, The Life of a 0:00:46.080 --> 0:00:48.280 show Girl, was just released at midnight here on the 0:00:48.320 --> 0:00:50.959 East Coast. We're going to discuss the swifty effect. 0:00:50.840 --> 0:00:53.600 And we've both listened, but now we're tuning in to 0:00:53.640 --> 0:00:55.600 what's happening in the markets because there are new record 0:00:55.680 --> 0:00:57.760 high and now's that one hundred up once again. We 0:00:57.840 --> 0:01:00.600 are seeing the best week in all weeks or so 0:01:00.680 --> 0:01:03.280 at the moment, about one point six percent. Many calling 0:01:03.280 --> 0:01:06.240 it a hype bubble at the moment. That's what key 0:01:06.319 --> 0:01:09.200 investors in tech have been calling in mad bezos say, look, 0:01:09.200 --> 0:01:11.040 it's a bubble, but it's the right kind of bubble, 0:01:11.160 --> 0:01:12.920 and we're going to dig into what David Solomon talked 0:01:12.959 --> 0:01:15.039 about in terms of the tech industry more broadly, he's 0:01:15.080 --> 0:01:17.640 also seeing concerns about some of the valuations. 0:01:17.680 --> 0:01:18.319 But dig into. 0:01:18.200 --> 0:01:20.440 Also where we've seen a little bit more risk sentiment 0:01:20.520 --> 0:01:23.000 turning to the upside. And it's in crypto of nine 0:01:23.080 --> 0:01:25.200 percent over the course of the week, ed when back 0:01:25.280 --> 0:01:27.319 near one hundred in excess of one hundred and twenty 0:01:27.360 --> 0:01:30.160 thousand dollars. The moon music has changed despite the government 0:01:30.160 --> 0:01:30.800 shutdown end. 0:01:30.959 --> 0:01:33.360 Look, there's a lot moving right now in Friday's session, 0:01:33.400 --> 0:01:34.760 but I want to look at one of the big 0:01:34.760 --> 0:01:37.120 movers over the course of the week. It's Samsung, and 0:01:37.160 --> 0:01:40.560 it's Korean shares four straight weeks of gains, trading at 0:01:40.600 --> 0:01:43.600 its highest level since early twenty twenty one. There has 0:01:43.640 --> 0:01:47.480 been a lot of detail reporting about Samsung technology going 0:01:47.520 --> 0:01:50.720 into all kinds of infrastructure projects, but the big bloomberg scoop, 0:01:50.760 --> 0:01:53.680 as you know, is about what Huawei in China is 0:01:53.760 --> 0:01:57.480 doing with Samsung, particularly in the context of high bandwidth memory. 0:01:57.560 --> 0:01:59.720 So let's get to that report carect another tear down. 0:02:00.040 --> 0:02:03.120 Let's get to how really the global chip supply is 0:02:03.160 --> 0:02:05.840 working right now Blue Max Peter Elstrom joins us. So 0:02:05.880 --> 0:02:09.760 we get inside the latest greatest chips from Huawei, and 0:02:09.800 --> 0:02:13.000 there's a lot of other companies that are within them. 0:02:13.919 --> 0:02:15.000 Yeah, that's right, Caroline. 0:02:15.240 --> 0:02:18.040 We've had a number of scoops about Huawei and specifically 0:02:18.080 --> 0:02:20.840 what it's doing in AI chips, and the reason is 0:02:20.840 --> 0:02:25.200 that they're really the most viable competitor to Nvidia at 0:02:25.200 --> 0:02:27.280 this point. They have a lot of backing from the 0:02:27.360 --> 0:02:30.720 Chinese government in particular, where the Chinese government is not 0:02:30.800 --> 0:02:33.840 just encouraging them to develop these chips, but also encouraging 0:02:33.880 --> 0:02:36.440 their customers to actually buy from them and not from 0:02:36.520 --> 0:02:38.919 other companies too. So what we found is our reporters 0:02:38.960 --> 0:02:42.880 found that in this teardown, inside of the Huawei ND chips, 0:02:42.919 --> 0:02:45.320 which are their AI chips, they've been able to use 0:02:46.240 --> 0:02:50.280 components from TSMC, Samsung and s K Heinees. As you mentioned, now, 0:02:50.400 --> 0:02:52.960 these are components that they're not supposed to have access 0:02:53.040 --> 0:02:56.000 to under the sanctions that they are under the Huawei 0:02:56.040 --> 0:02:58.000 is under through the US government. They're not supposed to 0:02:58.040 --> 0:03:00.800 have access to these components, but they've been able to 0:03:00.840 --> 0:03:03.280 get them, so they've been able to use TSMC dies. 0:03:03.560 --> 0:03:06.239 They've been able to use the HBM chips from Samsung 0:03:06.320 --> 0:03:09.760 and SKA Heinix. These are somewhat older HBM components. It's 0:03:09.800 --> 0:03:13.200 the HBM Generation two E, which is not the most 0:03:13.240 --> 0:03:15.840 cutting edge at this point. Now there's a possibility. All 0:03:15.840 --> 0:03:18.600 the companies that we reached out to said that they've 0:03:18.680 --> 0:03:21.480 cut off Huawei at this point, they're not doing business 0:03:21.560 --> 0:03:24.000 with Huawei. But in the past while I was able 0:03:24.040 --> 0:03:26.320 to buy from them and was able to stockpile from them, 0:03:26.360 --> 0:03:28.840 so that maybe where they got some of these components. 0:03:28.960 --> 0:03:35.800 So China's Huawei, we found evidence of other nations technology 0:03:36.440 --> 0:03:40.400 inside of their server designs essentially, but the other part 0:03:40.480 --> 0:03:43.640 of the reporting and the story speaks to China not 0:03:43.800 --> 0:03:48.320 being able to supply these core components themselves from their 0:03:48.360 --> 0:03:49.840 own domestic supply chain. 0:03:51.000 --> 0:03:54.440 It's a very good point. Yeah, if Huawei stockpiled. 0:03:53.800 --> 0:03:57.080 These components in the past and is now using them 0:03:57.080 --> 0:03:59.200 as they sell into the market, As they sell these 0:03:59.240 --> 0:04:03.440 to send nine ten C chips into the market, there 0:04:03.480 --> 0:04:05.880 is a suggestion that they can't get those from domestic 0:04:05.920 --> 0:04:09.040 supply And if they can't get them from domestic suppliers 0:04:09.120 --> 0:04:11.120 right now, that suggests that maybe they're going to run 0:04:11.160 --> 0:04:13.120 out at some point, so that's one of the concerns 0:04:13.120 --> 0:04:16.680 about whether they'll continue to be able to sell these chips. 0:04:16.720 --> 0:04:20.120 As we wrote in another scoop a few days ago, 0:04:20.480 --> 0:04:22.800 Huawei is trying to ramp up their production right now. 0:04:22.839 --> 0:04:25.200 They would like to meet even more of the domestic demand. 0:04:25.480 --> 0:04:27.599 We anticipate that they're going to be able to actually 0:04:27.640 --> 0:04:30.359 double production of these nine ten seed chips based on 0:04:30.400 --> 0:04:31.800 the commonents that we've seen. 0:04:31.839 --> 0:04:33.520 So Huawei is making some progress. 0:04:33.680 --> 0:04:36.640 They are providing some competition, but many of the companies 0:04:36.640 --> 0:04:39.360 within China would preferred by in video chips if they 0:04:39.400 --> 0:04:41.040 were able to for political reasons. 0:04:42.160 --> 0:04:45.760 BLOBX Peter Elstrom, who's the executive editor leading our international 0:04:45.760 --> 0:04:48.720 coverage attech really appreciate the reporting. Thank you very much 0:04:48.920 --> 0:04:51.279 for more and why to tech markets. Anna Rathban, CEO 0:04:51.360 --> 0:04:55.280 and founder of wealth management firm Grenadilla Joins Advisory joins US. 0:04:55.320 --> 0:04:58.120 Now let's just start with that reporting, right And a 0:04:58.120 --> 0:05:02.560 lot of the names that were mentioned were x US 0:05:02.600 --> 0:05:05.200 you know, international names, some of them have a d r's, 0:05:05.720 --> 0:05:09.680 but these stories keep coming up about global supply chain 0:05:10.200 --> 0:05:12.400 and China's reliance on them. I just wonder what you 0:05:12.440 --> 0:05:12.920 made of it. 0:05:14.279 --> 0:05:14.840 Good morning. 0:05:15.160 --> 0:05:17.680 You know, that reminds me of what happened like a 0:05:17.760 --> 0:05:22.200 year and a half ago with Deep fake in. You know, 0:05:22.240 --> 0:05:24.359 they said they were able to produce all of this, 0:05:24.680 --> 0:05:26.479 you know, at a fraction of a cost, but it 0:05:26.560 --> 0:05:28.480 turned out that it was all in video chips. 0:05:28.680 --> 0:05:31.160 So I mean, in some ways, I'm I surprised. 0:05:31.440 --> 0:05:34.600 No, I don't think, you know, AI chips is something 0:05:34.640 --> 0:05:36.679 you can produce, you know, on a dime just because 0:05:36.680 --> 0:05:39.960 you want to, and you tell people to use Huawei chips. 0:05:39.640 --> 0:05:41.320 Only, So I am not surprised. 0:05:41.440 --> 0:05:45.839 But it also highlights the urgency of the AI race 0:05:46.720 --> 0:05:49.120 and one of the reasons why there's so much support 0:05:49.160 --> 0:05:52.360 for it, especially from the US government and also taking 0:05:52.520 --> 0:05:55.960 you know, stake in some of our companies Intel for one, 0:05:56.160 --> 0:05:59.279 you know, some rare earth minerals as well. The race 0:05:59.400 --> 0:06:02.320 is on, it's very hot, and China's going to have 0:06:02.360 --> 0:06:05.120 to figure it out if it doesn't have internal supply chains, 0:06:05.640 --> 0:06:09.360 because you know, if this gets found out, then some 0:06:09.440 --> 0:06:12.760 of their negotiating powers go away because it looks like 0:06:12.800 --> 0:06:14.560 they're bluffing Anna. 0:06:14.640 --> 0:06:17.680 It's leading not just to a hot race, but to 0:06:17.680 --> 0:06:18.680 hot valuations. 0:06:18.880 --> 0:06:19.720 Are they too hot. 0:06:19.760 --> 0:06:25.279 You know, I would say compared to what, right, we 0:06:25.360 --> 0:06:28.280 haven't had AI before, We haven't had this kind of 0:06:28.800 --> 0:06:32.000 support behind a tech movement before. And it's not just 0:06:32.040 --> 0:06:34.400 the US, it's global, right, I mean we just talked 0:06:34.400 --> 0:06:38.080 about the race between US and China. So you know, yes, 0:06:38.120 --> 0:06:42.000 it feels hot compared to historical standards. But you know, 0:06:42.120 --> 0:06:45.960 when money goes into something like this, and this isn't 0:06:46.040 --> 0:06:48.360 just a year or two, this has been for a while, 0:06:48.560 --> 0:06:50.520 and we have to ask yourself what is the wisdom 0:06:50.560 --> 0:06:53.159 of the masses and the markets telling us what is 0:06:53.240 --> 0:06:55.919 behind this? And I think there's something to pay attention to, 0:06:56.279 --> 0:06:59.760 maybe not compared to the valuation to the historical norms, 0:07:00.080 --> 0:07:02.760 but think about what the norm in this new world 0:07:02.839 --> 0:07:05.240 might be and it might actually just be a little 0:07:05.240 --> 0:07:05.760 bit higher. 0:07:05.839 --> 0:07:08.280 Yeah, but Ana, that is a lot of hope baked in. 0:07:08.440 --> 0:07:12.200 We had GQG on the show yesterday and they're saying, look, 0:07:12.280 --> 0:07:14.360 the level of revenue that an open AI has to 0:07:14.360 --> 0:07:17.840 bring in to vindicate the investment, the level of money 0:07:18.000 --> 0:07:20.840 that in video has to continue earning, and the worries 0:07:20.880 --> 0:07:23.200 that we're seeing of Nvidia writing one hundred billion dollar 0:07:23.400 --> 0:07:25.920 equity checks over to an open AI and feeding back 0:07:26.240 --> 0:07:31.160 the loop of demand. How are you strategizing and seeing 0:07:31.200 --> 0:07:32.400 that becoming a reality? 0:07:33.480 --> 0:07:36.320 No, it's it's actually very difficult if you're looking at 0:07:36.360 --> 0:07:40.720 from a company by company standpoint. They're absolutely correct, there's 0:07:40.800 --> 0:07:44.680 stuff going on that you know, doesn't really justify those 0:07:44.720 --> 0:07:45.640 high valuations. 0:07:45.800 --> 0:07:47.440 But if you look at the it from. 0:07:47.240 --> 0:07:49.960 An investor with an allocator point of view, if you 0:07:49.960 --> 0:07:52.120 look at AI as a theme, there are a lot 0:07:52.160 --> 0:07:55.239 of things going on that's outside of Nvidia and open AI. 0:07:55.360 --> 0:07:57.120 I mean, we just heard about Hitachi, we. 0:07:57.080 --> 0:08:01.040 Heard about Caterpillar yesterday, you know, fitting from some of 0:08:01.040 --> 0:08:02.160 the AI movements. 0:08:02.440 --> 0:08:05.240 This is really talking about industries that are. 0:08:05.200 --> 0:08:09.760 Not only adjacent to AI, but that adjacent cy circle 0:08:10.000 --> 0:08:12.880 is growing wider and wider, and so from an investor 0:08:12.920 --> 0:08:14.880 point of view, that is what we're really looking at 0:08:14.920 --> 0:08:17.680 from an AI movement, not just Nvidia and not just 0:08:17.760 --> 0:08:18.240 the chips. 0:08:18.680 --> 0:08:21.680 I know, the story and technology markets this week has 0:08:21.720 --> 0:08:25.800 been about AI enthusiasm, the infrastructure deals that have come daily, 0:08:26.040 --> 0:08:29.480 the open AI private market valuation of five hundred billion dollars. 0:08:29.560 --> 0:08:31.760 But I think we really need to acknowledge this government 0:08:31.800 --> 0:08:35.640 shutdown because it's also a factor in markets. How are 0:08:35.640 --> 0:08:38.120 you looking at that and what are you telling to clients? 0:08:39.480 --> 0:08:43.160 Yeah, you know, if I'm thinking about government shutdown and 0:08:43.200 --> 0:08:45.080 the fact that we did not get a labor market 0:08:45.120 --> 0:08:51.199 report today, this has implications more for all the economy sectors. 0:08:51.400 --> 0:08:53.280 When it comes to tech, it. 0:08:53.200 --> 0:08:56.400 Really doesn't even matter that the government is shut down. 0:08:56.480 --> 0:08:59.000 We saw how many deals that took place today, not 0:08:59.040 --> 0:09:02.360 today this week, right, So as far as tech is concerned, 0:09:02.440 --> 0:09:04.160 I don't think it matters, which is a. 0:09:04.200 --> 0:09:05.120 Little bit scary. 0:09:05.360 --> 0:09:07.800 But at the same time it's a little comforting because 0:09:07.800 --> 0:09:10.480 the government might be shut down for a few more days, right, 0:09:10.559 --> 0:09:11.640 maybe weeks, So. 0:09:11.640 --> 0:09:14.880 Anna, when we're just looking at techno caring, then that's 0:09:14.880 --> 0:09:16.079 that one hundred at a record high. 0:09:16.120 --> 0:09:17.640 It might be added the S and P A is too. 0:09:18.040 --> 0:09:21.280 Where do you allocate if you still believe in the 0:09:21.320 --> 0:09:24.240 AI trade? But just thinking in video or some of 0:09:24.240 --> 0:09:25.839 the other names would just be overplayed. 0:09:27.000 --> 0:09:30.079 So earlier I mentioned some of the adjacent industries, right, 0:09:30.120 --> 0:09:34.559 So this actually points to the importance of being diversified 0:09:34.600 --> 0:09:37.040 and not too concentrated on certain names, because then you 0:09:37.200 --> 0:09:41.120 are exposed to idiosyncratic risks. Now, when you're looking at 0:09:41.160 --> 0:09:44.240 the valuations, it is sky high and nosebleed sections. 0:09:45.200 --> 0:09:48.360 It's difficult to allocate cash into it. 0:09:48.480 --> 0:09:50.520 Right, So if you're an investor and you're actually you know, 0:09:50.520 --> 0:09:53.720 boots on the ground, where do you put cash becomes 0:09:53.720 --> 0:09:56.640 the problem, and that's where the diversification helps you. 0:09:56.840 --> 0:09:58.840 This idea of adjacencies helps you. 0:09:59.240 --> 0:10:02.680 If you already own tech, it's difficult to sell. 0:10:02.920 --> 0:10:05.480 I mean, it's difficult to sell because of the momentum. 0:10:05.760 --> 0:10:08.280 And in that case, sometimes it's not about selling off 0:10:08.360 --> 0:10:11.440 all positions. It's just about being prudent and taking some 0:10:11.559 --> 0:10:14.680 of the gains, rebalancing your portfolio. So you're taking the 0:10:14.720 --> 0:10:17.680 gains and reallocating it to some of the other sectors 0:10:17.679 --> 0:10:20.880 that may benefit from in the future. The idea of 0:10:20.920 --> 0:10:24.160 a diversified portfolio becomes much much more important. 0:10:24.520 --> 0:10:27.680 And Rafan, I've grenna did our advisory, wishing you a 0:10:27.800 --> 0:10:31.119 very happy weekend. Meanwhile, we're watching shares of applied materials. 0:10:31.320 --> 0:10:33.319 We broaden out the story on chips a little bit 0:10:33.360 --> 0:10:35.720 more here and indeed the geopolitical context we're off by 0:10:35.760 --> 0:10:39.720 two point four percent. Why largest US make of machinery 0:10:39.920 --> 0:10:43.280 used to manufacture selling conductions semiconductors, But basically they're warning 0:10:43.320 --> 0:10:45.360 there's going to be a six hundred million dollar revenue 0:10:45.440 --> 0:10:47.920 hit because of the rules that the government is setting. 0:10:47.920 --> 0:10:50.560 The restrictions end to exporting their products to China. 0:10:50.640 --> 0:10:52.920 Yes, six hundred million hit to net revenue. When you 0:10:53.080 --> 0:10:55.160 send a chip through a fab to the first thing 0:10:55.200 --> 0:10:57.400 the way for touches is applied materials and the last 0:10:57.400 --> 0:10:59.960 thing it touches is an applied materials machine. That's why 0:11:00.080 --> 0:11:04.280 we care. Coming up, Rivian's looking to rework its doors 0:11:04.520 --> 0:11:08.040 over potential safety concerns. We bring you to Bloomberg breaking 0:11:08.080 --> 0:11:10.120 story next. This is Bloomberg Tech. 0:11:17.280 --> 0:11:20.040 Rivian while it's reworking a key element of the doors 0:11:20.160 --> 0:11:23.719 in its next generation EV after employees and customers for 0:11:23.760 --> 0:11:27.160 its concerns over latch design in the vehicles it's already selling. 0:11:27.520 --> 0:11:28.600 That's according to sources. 0:11:28.679 --> 0:11:31.400 Now the move comes just weeks after Tesla face scrutiny 0:11:31.440 --> 0:11:32.920 over their powered handle doors. 0:11:33.440 --> 0:11:35.280 Guests who broke that story my. 0:11:35.240 --> 0:11:38.440 Co host ed Ludlow alongside Bloomberg's Emily Chang. This is 0:11:38.520 --> 0:11:41.600 a deep dive into the regulation and some of the 0:11:41.760 --> 0:11:44.560 regulatory pushback there is to some of the building of 0:11:44.600 --> 0:11:47.640 these ultimately door handles. But take us inside the car 0:11:47.679 --> 0:11:48.160 what's happening. 0:11:48.240 --> 0:11:50.880 Yeah, the specifics are really important. So the R two 0:11:51.160 --> 0:11:53.680 is the next generation ev that Rivian will start building 0:11:53.720 --> 0:11:58.760 next year. It has decided to make the emergency manual 0:11:58.800 --> 0:12:02.360 release in the event that the power electronics fail that 0:12:02.400 --> 0:12:06.120 the doors and the vehicle lose power more intuitive simply 0:12:06.160 --> 0:12:11.560 by positioning positioning it in a more obvious place, making 0:12:11.640 --> 0:12:13.920 the design in the front seats and the rear seats 0:12:13.960 --> 0:12:17.480 the same. But what sources tell us is that in 0:12:18.080 --> 0:12:20.240 June of twenty twenty four, Rivin did a refresh on 0:12:20.280 --> 0:12:22.480 the car. Had already sells the R one generation, both 0:12:22.480 --> 0:12:25.160 the sub and pickup, and as part of that, in 0:12:25.280 --> 0:12:29.280 lowering component count and to bring the cost down, they 0:12:29.360 --> 0:12:32.760 revised the rear door release latch, in particular, making it 0:12:32.880 --> 0:12:35.680 less intuitive. It's difficult to find it's under a cover 0:12:36.240 --> 0:12:39.240 and what is recognized by both employees. But also we 0:12:39.320 --> 0:12:42.280 found some anonymous complaints and then it's a database. Is 0:12:42.679 --> 0:12:44.480 it presents a potential safety risk? 0:12:44.760 --> 0:12:46.800 Talk through the safety risk and some of the incidents 0:12:46.840 --> 0:12:47.480 we've already seen. 0:12:47.600 --> 0:12:50.440 Yes, So this is on the back of Tesla and 0:12:50.440 --> 0:12:53.440 a Bloomberg broke the story that Tesla is revising the 0:12:53.480 --> 0:12:57.000 design of its doors because of actual cases where there 0:12:57.040 --> 0:12:59.920 is an accident and the passengers in that testa vehicle 0:13:00.280 --> 0:13:04.040 found it difficult to operate the MANU override and power 0:13:04.040 --> 0:13:07.120 had been lost. What we are not reporting about Rivian 0:13:07.160 --> 0:13:10.200 is there is no investigation into Rivian and Rivian not 0:13:10.240 --> 0:13:12.480 that we have found, and Rivian has never disclosed any 0:13:12.520 --> 0:13:15.400 kind of accident where this has been a factor. But 0:13:15.480 --> 0:13:18.199 it is an acknowledgment from within Rivian that it is 0:13:18.240 --> 0:13:20.880 a potential safety risk and they've decided for their next 0:13:21.320 --> 0:13:23.640 car they have to do something different with the design. 0:13:23.760 --> 0:13:26.480 We do not know if with R one they will 0:13:26.520 --> 0:13:30.000 do another redesign to account for what they admit is 0:13:30.040 --> 0:13:34.160 based on sourcing a mistake. But this is an industry 0:13:34.160 --> 0:13:34.520 wide thing. 0:13:35.160 --> 0:13:37.840 Go read the story and there is the Rivian spokesperson 0:13:38.200 --> 0:13:40.880 talking about safety being at the center of everything that 0:13:40.920 --> 0:13:41.280 we do. 0:13:41.600 --> 0:13:45.800 It's a breaking story. Meanwhile, open Ai competitor, let's call 0:13:45.840 --> 0:13:46.560 it Perplexity. 0:13:46.800 --> 0:13:50.040 It's made us AI browser Comet available for free to 0:13:50.160 --> 0:13:53.120 use as worldwide. The company launched Commet for top tier 0:13:53.160 --> 0:13:54.120 subscribers in July. 0:13:54.200 --> 0:13:55.880 Expanding access to Commet. 0:13:55.960 --> 0:13:59.240 Takes aim maybe the dominance and Google's Chrome, which Perplexity 0:13:59.280 --> 0:14:00.760 of course, made a thirty four and a half billion 0:14:00.800 --> 0:14:03.480 dollar bid for earlier in the year. Dmitriy chevel Enco's 0:14:03.480 --> 0:14:06.120 with us in Perplexity's chief business officer, and look, we 0:14:06.160 --> 0:14:09.360 start by introducing you as an open Ai competitor, but 0:14:09.440 --> 0:14:11.640 really this is a Google Chrome competitor. 0:14:13.840 --> 0:14:18.040 We're focused on building a better Internet. On Comment, you know, 0:14:18.080 --> 0:14:22.760 the browser is due for a major refresh. We want 0:14:22.800 --> 0:14:26.600 to serve and satisfy the world's curiosity and do a 0:14:26.600 --> 0:14:30.080 great job answering people's questions, and Comment is putting us 0:14:30.120 --> 0:14:32.480 on the path there and super excited to get to 0:14:32.640 --> 0:14:34.640 share with everyone this week, Demitrio. 0:14:34.640 --> 0:14:37.640 It also makes people ask different kinds of questions and 0:14:37.680 --> 0:14:40.400 far more questions. As you've said from the reaction of 0:14:40.480 --> 0:14:42.720 users already, can you give us some statistics because we 0:14:42.760 --> 0:14:44.960 knew that there were millions of people lining up to 0:14:45.120 --> 0:14:48.200 use this the ux people are really complimenting you. 0:14:48.560 --> 0:14:50.280 How many people are using it now? 0:14:51.320 --> 0:14:53.760 Yeah, so we had millions of people on our wait 0:14:53.800 --> 0:14:56.720 lists and they're all getting onboarded this week. 0:14:56.760 --> 0:14:57.760 How many minutes. 0:14:59.080 --> 0:14:59.320 You know? 0:14:59.680 --> 0:15:02.560 You is your job to ask those questions, and it's 0:15:02.640 --> 0:15:05.520 my job to compete against a three trillion dollar monopoly, 0:15:05.840 --> 0:15:08.400 so we're not going to be able to share everything today. 0:15:09.120 --> 0:15:11.640 But some of the really fascinating stats we're seeing in 0:15:11.720 --> 0:15:15.880 terms of user engagement is when a user starts being 0:15:15.920 --> 0:15:19.160 on Commet, they asked six to eighteen times more questions 0:15:19.160 --> 0:15:22.760 than they were before. And that's really you know, for us, 0:15:22.840 --> 0:15:26.360 that and retention are the key markers of success, and 0:15:26.760 --> 0:15:30.800 that's why we felt very comfortable and excited to open 0:15:30.840 --> 0:15:31.240 this up. 0:15:31.640 --> 0:15:31.800 To me. 0:15:31.920 --> 0:15:35.480 True, we're a technology show and you're in the technology industry, 0:15:35.480 --> 0:15:38.280 and I think one thing that's true of technology is 0:15:38.280 --> 0:15:41.840 that just being first to something new doesn't guarantee that 0:15:41.880 --> 0:15:45.160 you capture that market, right, you know, Apple and the 0:15:45.200 --> 0:15:49.360 smartphone versus BlackBerry. That's a good example. I'm just at 0:15:49.400 --> 0:15:52.880 the root of my question is what is stopping Google 0:15:53.000 --> 0:15:56.200 now from looking at what you've done with Commet and saying, oh, 0:15:56.240 --> 0:15:56.960 we can do that too. 0:15:58.600 --> 0:16:02.320 Yeah, well, actually, not new to We're not the first 0:16:02.320 --> 0:16:06.880 of browsers, right. Google's been doing this for over twenty years, 0:16:07.360 --> 0:16:11.280 and their approach to AI is bolted onto their existing browser. 0:16:12.200 --> 0:16:16.040 We've built a AI native browser from the ground up, 0:16:16.920 --> 0:16:19.960 and our biggest advantage, you know, when competing against trillion 0:16:19.960 --> 0:16:23.920 dollar companies is execution velocity. It's the clock speed of 0:16:24.080 --> 0:16:27.280 iterating and improving the product. You know, if you know 0:16:27.280 --> 0:16:29.360 it sounds like you guys were using it back in July, 0:16:30.200 --> 0:16:33.040 you've probably noticed how much it's gotten better. You've noticed 0:16:33.040 --> 0:16:36.200 that we've launched for our Max users background assistance and 0:16:36.240 --> 0:16:39.479 the email assistant, and so it's that rate of improvement, 0:16:40.320 --> 0:16:46.200 particularly an AI where you new foundation model capabilities advance 0:16:46.520 --> 0:16:49.400 not every six months but literally every three to four weeks, 0:16:49.800 --> 0:16:54.920 and so having the clock cycle around incorporating and finding 0:16:54.960 --> 0:16:58.040 the useful applications of those new capabilities, that's where the 0:16:58.080 --> 0:16:58.600 alpha is. 0:16:58.960 --> 0:17:04.119 Demitri, the chief business officer, what's the monetization pathway? For comment? 0:17:04.240 --> 0:17:05.920 How are you going to make money from this platform 0:17:05.960 --> 0:17:06.400 in the end. 0:17:07.920 --> 0:17:12.200 Yeah, we're fortunate to have a variety of subscription products, 0:17:12.520 --> 0:17:17.680 our Perplexity pro offering Perplexity Max and our only expense 0:17:18.440 --> 0:17:22.439 is inference, and so we're able to tailor to a 0:17:22.480 --> 0:17:23.720 given user's needs the. 0:17:23.720 --> 0:17:24.960 Rate subscription product. 0:17:25.840 --> 0:17:29.920 And so that's led to explosive air R growth for 0:17:30.040 --> 0:17:34.600 us just this year, and we're excited about subscriptions as 0:17:34.600 --> 0:17:35.200 a path forward. 0:17:35.640 --> 0:17:38.920 Looking at your media partners, this is where subscriptions comes 0:17:38.920 --> 0:17:42.240 in five dollars for direct access to basically comet plus, 0:17:42.280 --> 0:17:46.000 which you call is a groundbreaking business model for premium journalism. 0:17:46.200 --> 0:17:47.680 How does that expand. 0:17:47.280 --> 0:17:50.000 Meet because all these publishers need paying too. 0:17:51.720 --> 0:17:55.000 Yeah, well, I'm so glad you asked about comment Plus. 0:17:55.880 --> 0:17:59.040 The Internet deserves not just a better browser, but a 0:17:59.040 --> 0:18:03.520 better business model. I think we're all exhausted with the 0:18:03.720 --> 0:18:08.159 traffic and clickbait, you know, dynamics that have really, you know, 0:18:08.720 --> 0:18:10.720 led to a race to the bottom on the Internet. 0:18:11.080 --> 0:18:13.840 And what we're doing with comment Plus is actually aligning 0:18:13.960 --> 0:18:17.960 economics with you know, the AI h where publishers get 0:18:17.960 --> 0:18:23.840 compensated when users directly access their content, when their AI 0:18:24.000 --> 0:18:27.200 accesses the content, and when search index is access the content. 0:18:28.119 --> 0:18:30.359 And this is really taking you know a lot of 0:18:30.359 --> 0:18:33.000 what publishers loved about the Apple News plus. 0:18:32.720 --> 0:18:37.280 Model and expanding it to the full power of the browser. 0:18:37.680 --> 0:18:41.240 Talking of Apple the AI partnership strategy, it's going to 0:18:41.240 --> 0:18:42.200 broaden out from Open AI. 0:18:42.280 --> 0:18:43.719 Are you going to be joining? 0:18:43.880 --> 0:18:48.359 Briefly, we want to be wherever our users are, and 0:18:48.440 --> 0:18:52.800 our users certainly are on Apple devices, and we're confident 0:18:52.960 --> 0:18:58.200 that the best OEMs will want the best ais integrated 0:18:58.240 --> 0:19:01.280 deeply into their products, and you know, we're excited for 0:19:01.320 --> 0:19:02.080 the path the head there. 0:19:03.080 --> 0:19:07.000 Dmitri Schevalenko, chief business officer for Perplexity great heavy back 0:19:07.200 --> 0:19:15.280 on the program. Open ai has rolled out and you 0:19:15.440 --> 0:19:19.320 social media like app Sora, powered by the latest version 0:19:19.359 --> 0:19:22.359 of its Ai video generator. Already, the toll has raised 0:19:22.359 --> 0:19:25.440 concerns about how easily it can be used to create 0:19:25.760 --> 0:19:31.400 misleading videos. Bloomberg's AI reporter Rachel Metz has been using it, 0:19:31.840 --> 0:19:35.840 experiencing it, and then writing about it. The idea is 0:19:35.880 --> 0:19:40.640 that it presents a risk of more misinformation, more content 0:19:40.680 --> 0:19:43.760 out there that is potentially misleading, and then there's the 0:19:43.800 --> 0:19:47.480 social element. Just reflect on your experience so far with it. 0:19:48.680 --> 0:19:51.679 Sure, I mean, I think we've seen a lot of 0:19:51.680 --> 0:19:54.440 concerns over the past several years about how making it 0:19:54.520 --> 0:19:58.720 easier and easier for people to make videos that show 0:19:58.760 --> 0:20:01.440 things that didn't actually happen but appear to show those 0:20:01.440 --> 0:20:05.000 things in a realistic fashion. That can make it easier 0:20:05.000 --> 0:20:07.800 to spread things that are not true and hurt people potentially. 0:20:08.080 --> 0:20:11.120 And with this tool, open ai has made it extremely 0:20:11.160 --> 0:20:14.240 easy to do that kind of thing. I made several 0:20:14.320 --> 0:20:19.760 incriminating looking videos of my boss, and I mean stealing 0:20:19.840 --> 0:20:23.919 kittens from a pet store, keying cars, stealing a car, 0:20:24.160 --> 0:20:26.800 you know, all kind of all manner of mischief, and 0:20:27.280 --> 0:20:30.360 it was really easy. One thing that was also doable, 0:20:30.440 --> 0:20:34.120 at least until yesterday, is you could take these clips 0:20:34.520 --> 0:20:38.280 and you could in the draft form without publishing them. 0:20:38.640 --> 0:20:41.680