Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hide in New York
Speaker 1: and Eva Low in Sent Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: Tesla proposes an unprecedented one trillion dollar pay package for Elon.
Speaker 4: Musk plus Broadcom surges on earnings and a big new
Speaker 4: AI chip customer who we report is Open Ai.
Speaker 3: And we speak with Qualcom CEO Cristiano amon As. The
Speaker 3: company partners with BMW to provide its automated driving brains.
Speaker 4: But first we check out these markets, which are volatile
Speaker 4: to say the least. As we head towards this weekend,
Speaker 4: people taking money off the table. Look, we bought into
Speaker 4: the stock market throughout this training day and actually earlier
Speaker 4: in trade today. But in the Nazak one hundred now
Speaker 4: rolling up over a bit ed we pull back on
Speaker 4: some of the week's losses. We're now down eight ten
Speaker 4: percent on an Asbak one hundred over the course of
Speaker 4: five days, but remember we were shut on Monday, so
Speaker 4: that factors in the Friday sell off too. More broadly,
Speaker 4: we think of a macro picture a week labor market,
Speaker 4: and we'll dive into that, but for now, look at
Speaker 4: the individual movers, which you've got.
Speaker 3: Yep, our top story, Tesla is up two and a
Speaker 3: half percent. The board proposing a compensation package for Elon
Speaker 3: Musk one trillion dollars is the headline. It is over
Speaker 3: ten years, It is against multiple high bar milestones, both
Speaker 3: operational and financial, and there are some safeguards in there
Speaker 3: as well, additional safeguards to keep Elon Musk focused on Tesla.
Speaker 2: Let's get out of Bloomberg's Dana Hole.
Speaker 3: Who covers Tesla and leads our coverage of Elon Musk.
Speaker 2: And that's where I want to start.
Speaker 3: What are the milestones operational and financial Danna that Elon
Speaker 3: Musk and Tesla have to hit if he's going to
Speaker 3: get to the full one trillion package.
Speaker 5: Yeah, So it's twelve tranches, and to sort of unlock
Speaker 5: a tranch, there's two components. Market cap, which is basically
Speaker 5: it's in half trillion dollar increments. So to reach the
Speaker 5: first one, it's a two trillion dollar market cap, and
Speaker 5: then everyone after that is by half a trillion. But
Speaker 5: it's operational milestones that include things like number of optimist robots,
Speaker 5: number of robotaxis in deployment, cumulative car sales FSD take rate,
Speaker 5: and these are very aggressive, very hard to meet milestones.
Speaker 5: Tesla is nowhere close to them right now. But this
Speaker 5: is what the board thinks is going to motivate Elin
Speaker 5: to really dig in and really go guns blazing for
Speaker 5: this sort of AI robotics future that he recently outlined
Speaker 5: and masterplanned Part four.
Speaker 4: And perhaps what really motivates him is twenty five percent
Speaker 4: ownership of the company. What's interesting and what motivates investors
Speaker 4: is his dedication, particularly moving away from politics, which seems
Speaker 4: to be one of the key points here in what
Speaker 4: the voters, what the investors are going to have to
Speaker 4: vote on. But it's also about thinking about succession. I
Speaker 4: was interesting and the eleventh and the twelfth Trane Donna.
Speaker 5: Yeah, I mean clearly, you know, Musk has been the
Speaker 5: CEO of Tesla since two thousand and eight, and at
Speaker 5: some point they need to come up with a real
Speaker 5: succession plan. And I think that the committee worked very
Speaker 5: hard over the past seven months to kind of make
Speaker 5: it clear to investors that they are always talking about
Speaker 5: secession plans and that whenever the time comes from us
Speaker 5: to step down, they want his involvement in choosing a successor.
Speaker 5: But this package is designed to keep Elon focus for
Speaker 5: the long haul and to really motivate him and give
Speaker 5: him that kind of like dopamine hit that he likes
Speaker 5: of kind of you know, swinging for the fences and
Speaker 5: doing crazy things that no one thought were possible.
Speaker 3: Donna, very quickly, how does this package compare with the
Speaker 3: twenty eighteen package being disputed in the courts?
Speaker 5: So if twenty eighteen was a moonshot package, this one
Speaker 5: really could be thought of as a Mars shot. And
Speaker 5: if you actually, you know, command f the proxy, there's
Speaker 5: a there's a reference to a Marsh shot in one
Speaker 5: of the footnotes. Because the numbers are so high, the
Speaker 5: milestones are I mean, we're not just talking billions anymore,
Speaker 5: we're talking trillions in marketcap. But remember Elon Musk has
Speaker 5: always talked about wanting Tesla to be the most valuable
Speaker 5: company in the world. This is a pay package that
Speaker 5: incentivizes him to get there. And if he gets their shareholders,
Speaker 5: we'll also get there, which is why I think you're
Speaker 5: going to see a lot of investors support this package.
Speaker 4: Dana, How question is with the course supported once again,
Speaker 4: but really interesting take on this one trillion potential payday.
Speaker 4: Let's get more from someone who used to be on
Speaker 4: the board, and then we now push forward to the
Speaker 4: future of Tesla with Steve Wesley from the Wesley Group.
Speaker 4: You are indeed the founder managing partner. Steve, I'm really
Speaker 4: interested as to some of these milestones. Yes, it's about
Speaker 4: market capitalization is extraordinary. But to get twenty million cars
Speaker 4: on the road, to get ten million of those with FSD,
Speaker 4: to get one million robots one million robot taxis is
Speaker 4: that realistic?
Speaker 6: Well?
Speaker 7: I think that should be awesoully hard for tough that
Speaker 7: to do. And again I support incentive based pay packages
Speaker 7: for CEOs, and the pay package sounds astronomical, but so
Speaker 7: are the milestones to get it type. He's got a
Speaker 7: double market cap just even to get the first milestone.
Speaker 8: And I understand what they're doing.
Speaker 7: They want to get must one hundred percent focused on Tesla.
Speaker 7: But the big question is still, how do you get
Speaker 7: Tesla back on a growth trajectory. It's got two years
Speaker 7: of flat growth here. They've got to get permitting for
Speaker 7: full self driving in San Francisco and Austin first, Thanks first,
Speaker 7: and then they've got to start selling humanoid robots. Must
Speaker 7: have said they're going to shoot for five thousand this year.
Speaker 7: That feels a little aspirational, but whatever it takes to
Speaker 7: kick the company into a higher gear, that's what shareholders
Speaker 7: should be looking for.
Speaker 3: Steve Sectional page A fifty one of the proxy. If
Speaker 3: I bring it up and you allow me to read
Speaker 3: it to you, the board receives assurances that Mosk's involvement
Speaker 3: with the political space would wind down in a timely manner.
Speaker 3: The one of the reasons that Caroline and I wanted
Speaker 3: to get you on the show is you did sit
Speaker 3: on Tesla's board for three years. You've been a controller
Speaker 3: of a state in California. How do those provisions come about?
Speaker 3: How do you interpret it?
Speaker 8: But look, I think there's two things going on.
Speaker 7: Musk is saying, look, I want to be wildly incentivized
Speaker 7: if I do great things for shareholders, and I think
Speaker 7: shareholders I think the board is saying, okay, fair enough,
Speaker 7: we're going to have to set awfully highest standards. And
Speaker 7: that's not just going to be performance standards for selling
Speaker 7: more cars, for getting full self driving and really showing
Speaker 7: the promise of AI and Tesla and he's also going
Speaker 7: to have to really make the humanoid robot proposition real.
Speaker 7: I think if he does those things, he deserves a
Speaker 7: big pay package.
Speaker 8: If you've touched on something else.
Speaker 7: The board clearly wants to see him focused on Tesla,
Speaker 7: and that probably means less politics, less forcus on some
Speaker 7: of the other properties that are already doing extraordinarily well.
Speaker 7: So you can see why the board constructed it as
Speaker 7: they did. Let's see if shareholders support it. I have
Speaker 7: a hynch state will and the big question is it's
Speaker 7: going to be game on for Tesla. Kenny hit these right.
Speaker 3: Why gundation scores Within the operational goals, there is the
Speaker 3: target to produce one million humanoid Optimus robots. There is
Speaker 3: to build the Robotaxi fleet to one million vehicles. But
Speaker 3: there is still a goal in there, Steve to produce
Speaker 3: and sell and deliver twenty million electric vehicles to consumers.
Speaker 3: In other words, Tesla's historic bread and butter. That seems
Speaker 3: to contradict like the big picture vision for AI. You know,
Speaker 3: in a world where Tesla operates a prietary ride hailing app,
Speaker 3: he's still being asked to deliver tens of millions of
Speaker 3: vehicles directly to the consumer.
Speaker 7: And you put your finger on the lich fit here
Speaker 7: as always. What I love about this is what I
Speaker 7: suspect and I don't know about back to Elon wants
Speaker 7: is an audacious, big target, because that's what gets ISS
Speaker 7: adrenaline going great. What I think the board is pushing
Speaker 7: for is, hey, don't forget. You've got to sell a
Speaker 7: lot of electric and autonomous vehicles and competition's coming. So
Speaker 7: let's come back to the real world for a minute.
Speaker 7: Volkswagen unveiling twenty nine thousand dollars eighty two next week
Speaker 7: in Europe. That's going to be hugely competitive. BYD Europe
Speaker 7: sales up two hundred and twenty five percent. Well, Tesla
Speaker 7: Europe sales are down fifty percent, cyber truck sales down
Speaker 7: fifty percent. Now Forward's coming out with a thirty thousand
Speaker 7: dollars competing truck, and in China, competition's huge. And now
Speaker 7: not only is BYD rocketing up with more EV sales
Speaker 7: for gly Star Wish a new ten thousand dollars EV
Speaker 7: in China, biggest selling car in China. There's competition coming
Speaker 7: from all sides, and I think this is the board's
Speaker 7: way of saying, hey, don't forget, you still have to
Speaker 7: sell a lot of cars if you want anywhere you're
Speaker 7: this size of governess, it's not.
Speaker 8: Going to be easy.
Speaker 4: Yeah, Steve, So if you're on the board and as
Speaker 4: an investor, how does he turn around the bread and
Speaker 4: butter the selling of cars.
Speaker 7: Well, again, that's we've talked about that one a lot.
Speaker 7: Everybody is going to be coming out with a twenty
Speaker 7: to twenty five thousand dollars car. Tesla has been late
Speaker 7: in getting that to market. They need to do it.
Speaker 7: Here's the point that people really need to get.
Speaker 8: Their arms around.
Speaker 7: We're reaching cost parody for evs this year. Now people
Speaker 7: are going to say, hey, what's going to happen in
Speaker 7: Q three? I can tell you in Q three EV
Speaker 7: sales are going to be up in the US because
Speaker 7: everybody's rushing to still get that last government credit and
Speaker 7: then it's going to go away. A lot of people
Speaker 7: say me, o, my, is that going to crush the industry?
Speaker 7: Absolutely not. What you should understand. The average EV price
Speaker 7: dropped fourteen thousand.
Speaker 8: Dollars in twenty twenty five.
Speaker 7: EV's are soon going to be cheaper than internal combustion
Speaker 7: vehicles and that's going to continue for the rest of
Speaker 7: our lives.
Speaker 2: Steve.
Speaker 3: Later in the program, we're going to go deep on
Speaker 3: the shareholder initiated proposal for Tesla to invest in Xai.
Speaker 3: But if you look across the broad package, would you
Speaker 3: please kindly assign what chances you give that shareholders will
Speaker 3: vote in favor of all of those provisions at the
Speaker 3: November annual meeting.
Speaker 7: Well, look, it's hard to note. It's the biggest pay
Speaker 7: package in history by far. But again they've attached the
Speaker 7: goals to such high numbers where they're trying to create.
Speaker 8: A weird win.
Speaker 7: I have a hunch the shareholders are going to support this.
Speaker 7: I think what they really want to see is the
Speaker 7: two things you've pointed out, one musk dropping back from
Speaker 7: politics and focusing fully on Tesla into getting back to
Speaker 7: the reality of selling more cars, getting full regulatory approval
Speaker 7: for autonomous driving.
Speaker 8: Those are the goals ahead of him. I hope he
Speaker 8: gets them.
Speaker 3: Wesley a former Tesla board member now of Wesley Group
Speaker 3: and somebody with a command of the world of electric vehicles.
Speaker 2: Thank you very much.
Speaker 3: Now coming up shares a broadcommer surging today after news
Speaker 3: breaks that an unnamed customer deal from the call.
Speaker 2: Well, it's open AI. That's next, Cary, what are you
Speaker 2: looking at?
Speaker 4: I'm looking at the broader markets actually end look, maybe
Speaker 4: it feeds into anxiety around in video's command of the
Speaker 4: key hyperscalers and the growth that they see in terms
Speaker 4: of their own chip provision, training and inference. We're down
Speaker 4: four percent on in video. The socks are still up
Speaker 4: four ten percent thanks to Broadcom, but more broadly we're
Speaker 4: risk off. That's after the macro data. This is Bloomberg Tech.
Speaker 3: Taking a look at the shares of broad coom up
Speaker 3: eight and a half percent of times in the session,
Speaker 3: reaching an all time high after posting record revenue. Bloomberg
Speaker 3: then reported that a new customer broadcord So working with
Speaker 3: the design and produce an artificial intelligence accelerator from twenty
Speaker 3: twenty six onwards is open AI. That's something that could
Speaker 3: challenge in video. Let's bring in Bloomberg Intelligence analyst Cunjensabani.
Speaker 3: As normal Hocktan does not name, he alludes to this
Speaker 3: a six customer on the call, and when you publish
Speaker 3: your research, research and reaction, that's where you looked at
Speaker 3: A six and AI revenue.
Speaker 2: Why focus there.
Speaker 9: I mean that is the center skate story right now. Look,
Speaker 9: before this announcement, they were still the majority share owner
Speaker 9: of the A six accelerator landscape, and with this announcement
Speaker 9: now their share is actually going to increase if you
Speaker 9: can believe that. So right now they are the number
Speaker 9: two AI semi company after Nvidia. When you think of
Speaker 9: the revenue size of AI revenues, I mean, just for comparing, contrast,
Speaker 9: right their air revenue now is running or going to
Speaker 9: be done, almost bigger than an entire data center revenue
Speaker 9: of the number two GPU provider in AMD. So they're
Speaker 9: increasing their share at an unprecedented rate. Not just adding
Speaker 9: new customers and new revenue streams, were also increasing the
Speaker 9: unit volumes at the existing customers, so gaining share at
Speaker 9: existing customers and as well as adding more customers.
Speaker 4: I mean a ten billion future backlo on coming from
Speaker 4: open AI is nice conngent, But compare and contrast Nvidia
Speaker 4: and broadcme for us because many want to mainly compete,
Speaker 4: but really, are we seeing this as an alternative this
Speaker 4: custom silicon or is it an and rather than an all?
Speaker 9: At this point it is an end. Look, it's a
Speaker 9: lot more nuanced than just saying that the A six
Speaker 9: from Broadcom are going to kill in media. You know,
Speaker 9: the use case is really limited to say ten top
Speaker 9: ten global hyperscalers now, no doubt today these step top
Speaker 9: ten represent the largest spenders when it comes to accelerators.
Speaker 9: But the compute demand from these top ten today is
Speaker 9: so much more. It's not coming at the cost of
Speaker 9: Nvidia GPUs. The bare case thesis is yes, in the future,
Speaker 9: as these customers keep improving their own chips, gen after
Speaker 9: gen keep improving their software, they could become sellers of
Speaker 9: the computer based on their own chip, the case study
Speaker 9: being the AWS and Anthropic deal.
Speaker 10: However, there's still a major huge.
Speaker 9: Market of enterprises sovieign customers Neo clouds, which still makes
Speaker 9: sense to be exclusively on the GPU's likes of Nvidia.
Speaker 4: Qunjian Savani is always great to get your takes in
Speaker 4: your analyst from Blueberg Intelligence, we thank you. Look Alphabet
Speaker 4: actually a broad On customer. Let's talk about Alphabet right now, because.
Speaker 11: Breaking news from the EU.
Speaker 4: Google will be fined almost three billion euros that's three
Speaker 4: and a half billion dollars by the European Union because
Speaker 4: it's being ordered to stop favoring its own advertising technology services.
Speaker 4: Now this comes hot on the heels of the fact
Speaker 4: that Google seem to only get a slap on the
Speaker 4: wrist when it comes to its monopoly of search coming
Speaker 4: from Judge Meta. Here in the United States, the dog
Speaker 4: ed is still looking at ad tech.
Speaker 11: Will we see the EU find.
Speaker 4: Implicate on that perspective, because it seems as though there
Speaker 4: is a concern coming that it's got too much control.
Speaker 3: It's not just a fine, you know, the European Union's
Speaker 3: now saying to Google that it needs to stop favoring
Speaker 3: its own ad technology platforms. And if you remember back
Speaker 3: in twenty twenty three, under the previous Competition Commissioner Margaret
Speaker 3: the vest there they had been warned that they needed
Speaker 3: to stop doing this, and over the term of Vesta's
Speaker 3: tenure within the European Commission, she went after Google on
Speaker 3: billions of euros of fine. So they have sixty days
Speaker 3: to respond. Google's statement is this is unfair.
Speaker 4: Coming up in conversation on the jobs market, we're gonna
Speaker 4: be speaking ed with Sarah Franklin, that's is CEO, on
Speaker 4: the state of the tech labor markets. After that pretty
Speaker 4: woful number coming from non time payrolls. That's a Blomberg
Speaker 4: Tech US August payrolls out earlier today and again of
Speaker 4: just twenty two thousand jobs, another downward revision in the
Speaker 4: previous month, and unemployment rising to four point three percent.
Speaker 4: Bloomberg International Economics and Policy editor Michael McKee breaks down
Speaker 4: those numbers with a little bit of a tech slant
Speaker 4: for US.
Speaker 12: Yes, Carol, it was not a good month for Donald
Speaker 12: Trump and his economic policies because job growth slowed tremendously
Speaker 12: and it has been soling for the last few months.
Speaker 12: You mentioned unemployment up seventy five basis points from July.
Speaker 12: It's starting to go higher and higher. But in terms
Speaker 12: of tech jobs, and I can see Ed rolling his eyes, going,
Speaker 12: what does it mean for tech? Tech's not special? Tech
Speaker 12: lost a lot of jobs as well. There's not one
Speaker 12: tech category in the overall jobs report, but there's a
Speaker 12: lot of different ones in there, and I've pulled out
Speaker 12: a few to show what happened. In computer manufacturing twenty
Speaker 12: one hundred jobs lost. Semiconductor manufacturing thirty seven hundred jobs lost,
Speaker 12: computer systems designed that would be the software guys three
Speaker 12: three hundred jobs lost.
Speaker 10: So some real.
Speaker 12: Job losses for the people in tech. And the President
Speaker 12: foreshadowed it last night when he was asked about it
Speaker 12: at that dinner with tech company executives, and he said, yeah,
Speaker 12: maybe bad now, but just you wait, the Brooklyn guy
Speaker 12: or the Queen's guy, quoting the Brooklyn Dodgers, wait till
Speaker 12: next year. In a year from now, he said, when
Speaker 12: these monstrous, huge, beautiful places, the palaces of genius, when
Speaker 12: they start opening up, you'll see, I think you'll see
Speaker 12: jobs numbers that are going to be absolutely incredible.
Speaker 13: So we'll see if he is right. In a year.
Speaker 3: My old eyes en roll Bloomberg's international economics correspondent Michael
Speaker 3: McKee with a Teconomic special breakdown of the latest jobs
Speaker 3: data from all in the State of the Labor Market.
Speaker 3: Sarah Franklin Lattice CEO joins us now lattus as about
Speaker 3: with a new State of the People report, and we
Speaker 3: come to you every job because of, like you know,
Speaker 3: the rich data that you have on your own technology platform.
Speaker 3: But the most simple place to start is to say,
Speaker 3: look at Mike's reporting the breakdown of the latest jobs report,
Speaker 3: and say, is AI impacting any of the technology sector
Speaker 3: just yet?
Speaker 6: The short answer is yes, we're seeing the impacts. We're
Speaker 6: seeing the job growth slow, we're seeing unemployment tick up.
Speaker 6: But what we're seeing really is transformation in the workplace.
Speaker 6: You're seeing every job is changing and every company is
Speaker 6: going through the transformational stage eliminating some of the roadwork
Speaker 6: but also investing in ways to increase effectiveness of their people.
Speaker 4: Sarah, much of the transition has to be led by
Speaker 4: human resources.
Speaker 11: But how much do.
Speaker 4: You think the cuts come first and then the rehiring
Speaker 4: of different types of talent then comes, or are we
Speaker 4: seeing people just being asked to be more productive?
Speaker 6: So with HR, it's an opportunity to be very strategic,
Speaker 6: and layoffs are really more like a fad diet. There's
Speaker 6: something where you get an immediate hit into the P
Speaker 6: and L, but the real work, the healthy habits, are
Speaker 6: not being implemented if you're not focusing on your workforce
Speaker 6: effectiveness and the habitual training that you have with all
Speaker 6: of your employees and the structures that you put in place.
Speaker 11: We're going through change.
Speaker 6: It's important to do this in a way that sets
Speaker 6: up companies for long term success, and that's what HR
Speaker 6: departments are really focused on today. When they're driving success
Speaker 6: with AI.
Speaker 4: Talk about that success with Ai, Sarah, because that is
Speaker 4: something that's been questioned a lot in the last couple
Speaker 4: of weeks by this MIT report, people worrying the ninety
Speaker 4: five percent of pilots aren't delivering return on AI investment.
Speaker 11: What have you heard from the people that hire.
Speaker 6: Yeah, Caroline, it's so interesting because it's a headline that
Speaker 6: people have latched onto because there is fear. There's fear
Speaker 6: of what AI can do. And so when you can
Speaker 6: easily say this MIT report says that they're failing, that's
Speaker 6: easy to really embrace. But however, the reason the nuance
Speaker 6: in the report is that it's AI alone, not really
Speaker 6: when you look at AI that's set up properly, AI
Speaker 6: that's integrated well with systems, and so what it tells
Speaker 6: us is that we need to responsibly bring AI in.
Speaker 6: You can't just set up AI and expect it to work.
Speaker 6: All of us that may buy an Alexa for our home,
Speaker 6: you can't just put it in your kitchen.
Speaker 2: Expect it to dend the lights.
Speaker 6: You need to set it up, configure it and understand
Speaker 6: how to use it. The same thing is true with AI,
Speaker 6: and so where AI is succeeding. It's when we have
Speaker 6: responsible practices, we have good integrations, and we have ethical
Speaker 6: usage of it.
Speaker 3: So in your own survey and your own report, one
Speaker 3: of the things that struck me was the results around
Speaker 3: people's attitude towards maintaining work life balance. It talks to
Speaker 3: a bigger picture debate whether AI helps us and makes
Speaker 3: life easier in our daily work life so we can
Speaker 3: go and do more fun things outside of work. Is
Speaker 3: that really happening within the workplace or in any of
Speaker 3: the HR sectors that you track in.
Speaker 6: There's definitely generational differences in the embracing of AI between
Speaker 6: Z millennials and what we're seeing though, is that AI
Speaker 6: whether it's freeing up time to have better work life
Speaker 6: balance or to do more strategic work. I don't think
Speaker 6: any of us want to do robotic work. We want
Speaker 6: to be able to focus on what makes us human,
Speaker 6: our creativity, our ingenuity, and this is what's so powerful
Speaker 6: that AI is enabling us to do.
Speaker 4: One of the tropes that's going around at the moment
Speaker 4: is this nine ninety six culture. Dare I even reference
Speaker 4: the lift heavy, run far Marry Young eat eggs a steak,
Speaker 4: but Sarah more broadly, how much you see this culture
Speaker 4: being adopted by those who want to grind being shunned
Speaker 4: by those that have been in the workforce for a while.
Speaker 6: Again getting back to there's a lot of fear. There's
Speaker 6: a fear that I'm not going to be relevant. There's
Speaker 6: a fear that my job may go away. And so
Speaker 6: a lot of this fear is driving the culture. And
Speaker 6: so what's most important right now is that everybody understands
Speaker 6: the urgency in scaling up themselves on AI and bringing
Speaker 6: AI skills into their workforce, not just the workforce of tomorrow,
Speaker 6: but the workforce of today. And so it's fear that
Speaker 6: drives this lack of balance. And what we need to
Speaker 6: do as leaders is really help people understand that AI
Speaker 6: can be here to help us, It can give us superpowers,
Speaker 6: and it can really be a great way to us
Speaker 6: to transform our businesses and get back to growth.
Speaker 4: So Frank can putting the realistic nature to the new
Speaker 4: work life balance or lat lere of CEO of Lattice,
Speaker 4: We appreciate it. Meanwhile, coming up or you a mosque,
Speaker 4: it doesn't seem to rest.
Speaker 11: Will you be the first trillionaire? More on the Tesna
Speaker 11: CEO's pay package proposal. That's next.
Speaker 4: This is blue Bag Tech. Welcome back to Bloomberg Tech.
Speaker 4: Let's take a look at the border markets. We do
Speaker 4: that from the flens of tech though, and that's that
Speaker 4: one hundred volatile day. At one point we saw that
Speaker 4: markets traded higher on the bad news being good news
Speaker 4: in terms of woful jobs data means the FED is
Speaker 4: going to cut. But now the market push is lower.
Speaker 4: We're off by tenhu percent. Maybe going to break back
Speaker 4: to the green. But vodataile day ed.
Speaker 11: Some key stocks to watch great.
Speaker 3: Yeah, So our top story is that Tesla's board is
Speaker 3: proposing a one trillion dollar conversation package for Elon Musk.
Speaker 3: I know that we don't normally do this, but like
Speaker 3: the stock's up three percent, a one sigma or one
Speaker 3: standard deviation move for this stock is nearer to five percent,
Speaker 3: and it kind of feels like a little bit unremarkable
Speaker 3: despite the fact that we're talking about a one trillion
Speaker 3: dollar compensation package. And of course the reality is that
Speaker 3: it's over ten years and there's a lot in there
Speaker 3: to get through. So let's get to Bloemdog's Max chaft In,
Speaker 3: one of the team behind Bloomberg's Elon Inc.
Speaker 2: Podcast.
Speaker 3: And you know, I've spent four hours eating a three
Speaker 3: hundred page document and there's a lot in it. But
Speaker 3: there are these milestones and targets that Musk and Tesla
Speaker 3: need to hit to get to one trillion, which jumps
Speaker 3: out at you off the page when you saw them.
Speaker 14: I Mean, the thing I think is most significant is
Speaker 14: there there are provisions in here about succession planning, about
Speaker 14: the idea that Elon Musk needs to come up with
Speaker 14: a you know, with a way to who's gonna oversee
Speaker 14: this company beyond him, which I think is really important.
Speaker 2: And I think this trillion.
Speaker 14: Dollar package reflects the fact that Tesla and Elon Musks
Speaker 14: are kind of inextricably linked, you know, for better or worse,
Speaker 14: for worse being of course the political blowback that has
Speaker 14: come from Musk's association with Donald Trump and his centrality
Speaker 14: to many of the more unpopular policies pursued by the
Speaker 14: Trump administration, but also the idea and many many Tesla investors,
Speaker 14: as you know ed see it this way that Elon
Speaker 14: Musk has some kind of special ability to see the future.
Speaker 2: And that's what this is about.
Speaker 14: This is a long long term bet on that relationship,
Speaker 14: while also acknowledging that at some time that at some point,
Speaker 14: hopefully for investors deep into the future, that that relationship
Speaker 14: will come to an end.
Speaker 11: It's so interesting.
Speaker 4: Investors, of course, agreed to the previous fifty six billion
Speaker 4: dollar pay package, and the judge that has overruled that
Speaker 4: and put it on pause was like, it's unfathomably large.
Speaker 4: Was part of her concern, as well as the board's
Speaker 4: role within it.
Speaker 11: This time.
Speaker 4: They've been very careful to try and make sure that
Speaker 4: the board seems independent, but they are giving in on
Speaker 4: what he wants, which is twenty five percent of ches.
Speaker 14: Yeah, he's been out there for the last year and
Speaker 14: a half or so essentially campaigning for a bigger stake
Speaker 14: in the company. And you might ask yourself, well, that's
Speaker 14: kind of strange. How does a ceo who you know,
Speaker 14: there are many owners who are putting these stickers on
Speaker 14: their cars that say I bought this before he went crazy,
Speaker 14: A CEO who has in some ways lost a part
Speaker 14: of his customer base. How is he asking for a
Speaker 14: massive periods?
Speaker 2: And I think the.
Speaker 14: Answer is, like I said, investors think this is a
Speaker 14: bet on the future. It's not necessarily about cars about
Speaker 14: after this, it's about self driving cars. It's about Tesla
Speaker 14: as this massive robotic car though.
Speaker 3: Yes, but Tronch eleven and Tronch twelve directly relate to
Speaker 3: Musk's participation right in a succession plan. Just going back
Speaker 3: to all of that, Bloomber's Matchchafkin for weeks, we'll be
Speaker 3: going through this compensation proposal, thank you very much. There's
Speaker 3: another side to it, in another story. A lot of
Speaker 3: the momentum behind a shareholder resolution for Tesla to potentially
Speaker 3: invest in Xai came from retail investors. One of those
Speaker 3: that led the charge lobbying others in recent months is
Speaker 3: Alexandre Merz aka Tesla Bloomer Mama on x. Metz is
Speaker 3: a prominent figure in that group of retail investors who
Speaker 3: backed Tesla and Musk, a longtime Tesla investor and shareholder
Speaker 3: and joins us now. So it's included a shareholder initiated
Speaker 3: proposal for Tesla to invest in Xai.
Speaker 15: Your reaction please great, very happy. Obviously we have worked
Speaker 15: one that for a while. Well now. It all started
Speaker 15: last year when another retail shareholder, Gully asked Elon whether
Speaker 15: that is possible at that point, obviously Xa's valuation was
Speaker 15: much lower. Elon had then responded that he would ask
Speaker 15: the board. He came back a couple of quarters later saying,
Speaker 15: this needs a shareholder vote, and then shareholders asked for
Speaker 15: a proposal to be included.
Speaker 11: And you'll get to vote in November.
Speaker 4: Alexandra, why is it important that you have skin in
Speaker 4: the game with Xai?
Speaker 11: What is the future as you see it?
Speaker 4: Because according to this pay package, it is still twenty
Speaker 4: million cars on the road.
Speaker 11: It is still FSD.
Speaker 15: Oh, it is still cars. It is still fic D.
Speaker 15: That is Tesla's bread and butter. But every Tesla now
Speaker 15: and Ed knows because he drives one already has groc
Speaker 15: in the car. And Groc is the Xai product of
Speaker 15: the large language model that is used, derived from x
Speaker 15: former Twitter communication and conversations, and the strongest, in my view,
Speaker 15: a large language model there.
Speaker 3: Is, Alexandra, I did use FSD on the ways work
Speaker 3: this morning. I only used GROP during the journey. The
Speaker 3: skeptic would say, Xai is burning through cash. It is
Speaker 3: a company facing massive rivalry with open Ai and Anthropic.
Speaker 3: It can't stand on its own two feet. This would
Speaker 3: be Tesla bailing out XAI. How do you feel about that?
Speaker 2: Not at all.
Speaker 15: I mean, honestly, we had recent reports from Elon saying
Speaker 15: that XAI doesn't need any current cash. The question is
Speaker 15: obviously at what price, And the shareholder proposal the way
Speaker 15: it is proposed, does kick it back a little bit
Speaker 15: to the board to find the right valuation, because when
Speaker 15: we lobbied for this shareholder inclusion, we kept it very generic.
Speaker 15: There is a clear definition, and I think the board
Speaker 15: has clearly said they don't want to have the responsibility
Speaker 15: of the basic decision. They are not recommending it or
Speaker 15: four against it. This is shareholders deciding by themselves whether
Speaker 15: they want XII or not. In my view, I think
Speaker 15: it will be a fantastic financial investment. I also see
Speaker 15: the synergies between XII and Tesla just growing with the
Speaker 15: gods even more. But it is coming down to real
Speaker 15: shareholder democracy, shareholders deciding whether this investment has to be
Speaker 15: done or not.
Speaker 4: Last time, the courts exerted their power over what shareholders
Speaker 4: did sign off, and at that time the judge discussed
Speaker 4: that it was fathomable amount of money that was being
Speaker 4: offered to Elon Musk and that the board didn't have
Speaker 4: enough independence. What do you make of this current pay
Speaker 4: package proposal in that respect?
Speaker 15: I mean, first of all, we're in Texas, We're not
Speaker 15: in Delaware anymore. And then let me just quickly address
Speaker 15: Delaware that judgment if it stands in appeal, and we
Speaker 15: will know in a couple of months. There is in
Speaker 15: October fifteenth the hearing, and then we'll probably know by
Speaker 15: January February whether it stands or not. But if that
Speaker 15: judgment stands, Tesla has in the current proxy now also
Speaker 15: a shareholder vote on whether they want to have a
Speaker 15: plan be in place for the twenty eighteen package to
Speaker 15: be fulfilled. So if that Plan B becomes necessary, because
Speaker 15: Delawarre's courts don't understand what our shareholder interest is. But
Speaker 15: so if that happens, it will actually cost us billions
Speaker 15: and billions more, probably fifty to sixty billion more than
Speaker 15: what it initially cost us in twenty eighteen. So I
Speaker 15: don't see how that would be in any favor to
Speaker 15: US shareholders. The package will live Plan A or Plan B.
Speaker 15: But such the question is, will we get it the
Speaker 15: cheap way, the twenty eighteen way, or we will have
Speaker 15: to pay sixty billion more because a judge ruled against.
Speaker 4: Us, and eventually maybe one trillion if you hit an
Speaker 4: eight and a half trillion dollar market capitalization and then
Speaker 4: some key operational target.
Speaker 2: And will be happy to pay.
Speaker 15: I can tell you that because if he gets it,
Speaker 15: we got it.
Speaker 4: Alexander Metz wellenf Investor Services is great to have you
Speaker 4: back on the show.
Speaker 11: Coming up, we'll talk.
Speaker 4: To the guy position to be the Silicon Valley candidate
Speaker 4: for California governor. Tech founder Ethan Agowell joins us this
Speaker 4: will bring their tech. President Trump welcome top tech leaders
Speaker 4: to the White House yesterday to discuss AI and the dinner.
Speaker 4: CEOs reiterated their pleasures to invest hundreds of billions in
Speaker 4: the United States, while Trump said chip makers that didn't
Speaker 4: build in the United States would face substantial tariffs.
Speaker 16: Just take a listen chips and so many conductors. There
Speaker 16: will be putting tariffs on companies that aren't coming in.
Speaker 16: We'll be putting a tariff very shortly, probably are hearing.
Speaker 16: We'll be putting a fairly substantial teriff, or not that high,
Speaker 16: but fairly substantial tariff, with the understanding that if they
Speaker 16: come into the country, if they're coming in building planning
Speaker 16: to come in.
Speaker 13: It will not be a tiff.
Speaker 2: We continue with technology and politics.
Speaker 3: Startup founder Ethan Agoole is aiming to position himself as
Speaker 3: the Silicon Valley candidate in a run for California governor.
Speaker 3: The two times startup founder has raised money from VC
Speaker 3: firms like Andresen Horowitz in the past. Now he's looking
Speaker 3: to win votes with his tech Forward campaign pitches. Ethan
Speaker 3: Agowyle joins US Now, this is early in a cycle.
Speaker 3: It seems there will be a crowded field of many
Speaker 3: political heavyweights, likely others from the technology industry. What chances
Speaker 3: do you really have of being governor of California.
Speaker 17: There's a lot of other candidates that are running, mostly
Speaker 17: from southern California, most of whom are politicians. My view is,
Speaker 17: if you are generally happy with the way things are
Speaker 17: going in California, you have lots of other options. If
Speaker 17: you are looking for a systematic reset and a complete change.
Speaker 10: I present a different opportunity, a.
Speaker 4: Different opportunity that leans into maybe Krypto being an ability
Speaker 4: to pay your taxes. You're leaning into DMV apps, for example,
Speaker 4: But at the same time, a load of our team
Speaker 4: can't get into work today because the bar is down.
Speaker 4: So I'm interested as to what the infrastructure perspective is here.
Speaker 10: Yeah, hey, hey Caroline, good to see you.
Speaker 17: I mean, look, first and foremost, I trust Californians, which
Speaker 17: is something that has been lost. Our politicians love telling
Speaker 17: us what to do. Infrastructure is a key part of
Speaker 17: the platform. What what's happening is Californians like people come here.
Speaker 10: I mean Ed and I were just talking.
Speaker 17: People come here because they want to live a great life,
Speaker 17: They want to enjoy the weather, they want to build
Speaker 17: something for their family. And that stopped happening because jobs
Speaker 17: aren't available here. You guys saw the jobs report this morning.
Speaker 17: Companies are leaving the state. Were overregulated. You can't build
Speaker 17: a house, you can't do anything without the government trying
Speaker 17: to get a piece of it or.
Speaker 10: Try to tell you what to do. That's what politicians
Speaker 10: love to do.
Speaker 17: So what we need is someone who understands the Californians
Speaker 17: themselves can be trusted, who actually likes Californians, and who
Speaker 17: actually wants them.
Speaker 10: To realize their potential.
Speaker 17: California is a state of massive potential and we're just
Speaker 17: not realizing.
Speaker 10: It because of all this regulation.
Speaker 3: Okay, let's bring up some of the policies that are
Speaker 3: on your platform, because I think that was Caroline's question.
Speaker 3: What is the specific proposal you have to fix infrastructure
Speaker 3: like BART, to fix housing, jobs creation in Silicon Valley, etc.
Speaker 17: Yeah, it starts and ends with SEQUA. SEQUA is the
Speaker 17: California Environmental Quality Act. It was passed in the seventies
Speaker 17: when Reagan was governor, and it initially had some good ideas,
Speaker 17: but it's been leveraged and extorted to all help at
Speaker 17: this point where anybody can sue anybody to stop any
Speaker 17: construction from happening. And that's why you don't see modular
Speaker 17: construction happening in San Francisco. That's why you don't see
Speaker 17: construction happening in housing in LA. That's why there was
Speaker 17: a water treatment facility in Huntington Beach. It was going
Speaker 17: to do fifty million gallons of drinkable water. It got
Speaker 17: stopped under SEQUA. There's six hundred thousand people that live
Speaker 17: up in Mendocino that are getting a pg and e
Speaker 17: pgne's plant is getting shut down.
Speaker 10: They're not going to have access to.
Speaker 17: Reliable power because the salmon and the eel are going
Speaker 17: to have trouble. I mean, these are just ridiculous things
Speaker 17: that are happening in California. I think that California humans
Speaker 17: should actually live well.
Speaker 3: And if I'm going to jump in a you're basically
Speaker 3: saying I want to deregulate. Yes, very similar to what
Speaker 3: the Trump administration is proposing across a number of industries.
Speaker 10: Yeah.
Speaker 17: I don't think this is a democratic or Republican issue.
Speaker 10: I think this is just common sense.
Speaker 17: Like the reason California is losing half a million people
Speaker 17: is because the regulation is driving jobs out.
Speaker 10: It's that simple.
Speaker 17: Like other states like Arizona, they beg companies to come
Speaker 17: to their states to create jobs. California does everything it
Speaker 17: can to kick companies out. MASA Son announced that he's
Speaker 17: investing a trillion dollars in data centers. All of that
Speaker 17: money is going to Arizona. Why is it not coming
Speaker 17: to California. Whatever you think of Elon I mean we
Speaker 17: just talked about his pay package, whatever you think of
Speaker 17: the guy. Tesla is based in California. They moved to
Speaker 17: Texas and they're creating twenty two thousand jobs in gigafactory there.
Speaker 17: Why are those jobs not in California. Are we shocked
Speaker 17: that people are leaving? Of course, not because there's no
Speaker 17: jobs here. It's it's really that simple in terms.
Speaker 4: Of policy and how you work with an administration that
Speaker 4: perhaps the current governor is very much on TikTok, actively
Speaker 4: working against. I'm interested as to what you think the
Speaker 4: relationship of Silicon Valley and whether you think that it's
Speaker 4: a voting base. But we'll get behind you, because boy,
Speaker 4: they pro the administration, some.
Speaker 11: Of them at the moment, it feels.
Speaker 4: And you're running on a Democratic ticket.
Speaker 10: I am running as a Democrat.
Speaker 17: Thirty four percent of California voted for Trump, So the
Speaker 17: notion that California is a deep blue state is just
Speaker 17: not true. We're not ninety five five or ninety ten.
Speaker 17: We need to understand that the state has shifted. And again,
Speaker 17: I don't blame people. They're frustrated with what they're seeing.
Speaker 17: So look, my view is, if you want to vote
Speaker 17: for somebody who's going to kind of keep things the same,
Speaker 17: there's a lot of smart candidates, just Katie Porter, Antonio Vilergrosa,
Speaker 17: et cetera, who are doing a good job in SoCal
Speaker 17: But if you are actually frustrated with what's happening, and
Speaker 17: you think the state can realize it's potential better.
Speaker 10: That's where you come to me.
Speaker 17: Where you want a little less regulation, a little less
Speaker 17: of government all.
Speaker 10: Over over your back.
Speaker 4: We are of course going to be inviting you, alongside
Speaker 4: other candidates to be joining us as the race heats
Speaker 4: up for California.
Speaker 11: Governor Ethan Algois. We appreciate your time today, stay well.
Speaker 4: Meanwhile, coming up Qualcom CEO Cristiano i'mon joining us to
Speaker 4: discuss the chip designers you partnership with BMW, deepening that
Speaker 4: relationship as it aims to improve self driving capabilities.
Speaker 11: This is Bloomberg Tech.
Speaker 4: Qualcomm Well, it's steering deeper into the auto industry, teaming
Speaker 4: up with BMW to debut it's new Snapdragon Ride Pilot.
Speaker 4: It's an automated driving platform design to be safety and
Speaker 4: driver assistance. The system is just being rolled out in
Speaker 4: the all new BMWIX three. Let's bring in Qualcom CEO Christiano,
Speaker 4: I'm on for more. You call it a revolutionary driver
Speaker 4: assistance system.
Speaker 11: How is your software that different?
Speaker 13: Look?
Speaker 18: We are incredibly excited about what we did with BMW.
Speaker 18: There's been three years in development, focus on safety, and
Speaker 18: it's different for a number of reasons.
Speaker 13: I think the first one is one of the things.
Speaker 18: You saw about BMW I x three it's the incredible range.
Speaker 18: So when you talk about assistant driving in autonomy, you
Speaker 18: need to put server class computing power in Intel's cars,
Speaker 18: and with Qualcom technology there's no compromise. You have all
Speaker 18: the computing power, but you still have efficiency on power consumption.
Speaker 18: You can get incredible range. The second thing is it's scalable.
Speaker 18: It goes into every tier car, so we're super excited
Speaker 18: about it.
Speaker 3: Christiano, I've been studying the Snapdragon Ride pilot, the sec architecture,
Speaker 3: the software piece. This is highly analogous with the camera
Speaker 3: based system that Tesla has right with FSD. You just
Speaker 3: talked about it being scalable for that reason, did you
Speaker 3: benchmark against that?
Speaker 13: So two different important parts.
Speaker 18: First, the architecture is scalable, starting from basic level ADS
Speaker 18: all the way to multiple cameras and multiple sensors for
Speaker 18: you to do navigation on autopilot.
Speaker 13: And urban environment and high wain environments.
Speaker 18: That means it can scale to entry level AIDAS systems
Speaker 18: and entry level cars.
Speaker 13: All the way to the full capabilities.
Speaker 18: The other thing is has been certified now in sixty
Speaker 18: countries and going. It's launching and a lot of people
Speaker 18: will be able to see the performers. Actually, we're super
Speaker 18: excited for people to see how it performs. And one
Speaker 18: thing that is great about this we've done this with BMW,
Speaker 18: but it's available for the entire industry, every OEM we'll
Speaker 18: be able to use it and BMWN welcome. We want
Speaker 18: that and people will be able to see compare and
Speaker 18: I think that's a great opportunity.
Speaker 3: You know, my question was one of sort of an
Speaker 3: academic one because it's the argument of a camera based
Speaker 3: only system from an economic standpoint versus also including.
Speaker 2: Lidar and radar.
Speaker 3: But you're super focused on the compute, not just performance
Speaker 3: but energy usage of the compute. Could you talk a
Speaker 3: little bit about how you engineered to that level.
Speaker 18: Yes, I think the qualcom DNA ED is it's about
Speaker 18: efficient computing because we design all of our chips assuming
Speaker 18: there's a battery on the other side.
Speaker 13: It's not plugged to the wall.
Speaker 18: So I think you have the benefit of a lot
Speaker 18: of the QUALM energy efficiency compute, and you have the
Speaker 18: ability to get a lot of the computing power require
Speaker 18: in an architecture that's actually incredibly efficient from a turmo
Speaker 18: management and from a power management.
Speaker 13: The second thing to fully.
Speaker 18: Answer your par question is you do have the capabilities
Speaker 18: to do navigate on autopilot in urban and high environments
Speaker 18: even if you have complex sensors are cameras in radars.
Speaker 4: Chris, you want to push us forward because your real
Speaker 4: focus on auto has been one of diversification of qualcom
Speaker 4: more broadly. Of course, the auto sector has its trials
Speaker 4: and tribulations. How much is this going to drive growth
Speaker 4: for you for the business in the longer.
Speaker 18: Term, Caroline's a great question. Remember we talked about our
Speaker 18: pipeline of forty five billion dollars in automotive, which is
Speaker 18: kind of translating into revenue. We see quarter after quarter
Speaker 18: record revenue for Qualkon, especially because it's not about moving
Speaker 18: with the size of the market. Is moving into share
Speaker 18: as new cars or a lounge for technology. The pipeline
Speaker 18: is converting, and I look at this stack that we're
Speaker 18: launching on the SnapTag and right pilot with bmw IS.
Speaker 18: We look at that as an opportunity for expansion. In
Speaker 18: the forty five billion pipeline, one third of that is ADS,
Speaker 18: and it's included of course the BMW project, but now
Speaker 18: other OEMs can use it, and that's going to be
Speaker 18: upside on the forty five billion pipeline.
Speaker 3: Christiano last night that the President hosts a number of
Speaker 3: technology leaders at the White House. I believe you're invited
Speaker 3: but unable to attend. And his message is very simple,
Speaker 3: tariffs are coming specific to chips, but those that invest
Speaker 3: in America will be spared. How is FOLKOM thinking about that?
Speaker 3: You know, a lot of emphasis gets put on TSMC
Speaker 3: in Arizona, but is that like big enough to serve
Speaker 3: all of you.
Speaker 18: Yes, it's unfortunate that we couldn't attend. We send a representative,
Speaker 18: but we had the big party in San Diego to
Speaker 18: Stadium for the forty universary of Qualcom.
Speaker 13: And to your question, look, we're excited about that.
Speaker 18: Remember we were a fabulous company, so we need a
Speaker 18: supply chain that is resilient and in America. We like
Speaker 18: the fact that TSMC, which is one of our suppliers
Speaker 18: and invest in America. We like the fact that Sansung,
Speaker 18: another one of our suppliers, investing in the America. And
Speaker 18: for Qualcom, this is exactly great news. We want diversification
Speaker 18: of manufacturing. We want more capacity in America, and we have.
Speaker 2: Si Intel an option, Christiana, not an option today.
Speaker 18: I think we would like Intel to be an option.
Speaker 18: They have been talking about moving to the next process technology,
Speaker 18: which they call it the one that comes after eighteen A.
Speaker 18: For us, we need a technology that has efficient power consumption.
Speaker 18: I think we just had this whole conversation on car.
Speaker 18: So if in the future Intel's ready for us, we'll
Speaker 18: be an option.
Speaker 13: Right now. Our supplier's realitysm C and SASA.
Speaker 3: Welcome CEO, Christianamon. It's great to have you back on
Speaker 3: Bloomberg Tech. Thank you very much.
Speaker 11: Does it for this edition of Bloomberg Tech ed? What
Speaker 11: a week?
Speaker 3: Yeah, huge headline, one trillion compackage Felon Musk. We have
Speaker 3: months to digest it. Don't forget check out the podcast.
Speaker 3: You know where to find it on Bloomberg Terminal and
Speaker 3: online on Apple Spotify at iHeart. A short week, but
Speaker 3: a big week from New York City in San Francisco.
Speaker 2: This is Bloomberg Tech