WEBVTT - AMD Adds Data Center Technology and GM Slashes Jobs 0:00:02.600 --> 0:00:10.840 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.039 --> 0:00:14.320 From Mahart where innovation, money and power Collie in Silicon Valley, NBN. 0:00:14.680 --> 0:00:19.200 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:33.040 --> 0:00:35.880 Live from New York and San Francisco. This is Bloomberg Technology, 0:00:36.320 --> 0:00:39.240 and it's M and a Monday. AMD to buy server 0:00:39.400 --> 0:00:43.200 maker z T Systems, and it's to fight back against 0:00:43.280 --> 0:00:44.840 Nvidia in the data center space. 0:00:45.840 --> 0:00:49.000 General Motors slashes software jobs after a big push to 0:00:49.080 --> 0:00:50.919 bolster its digital prowess. 0:00:50.960 --> 0:00:53.199 We have the Bloomberg exclusive. 0:00:52.800 --> 0:00:56.400 And sports streaming platform Fubo continues to surge after rivals 0:00:56.400 --> 0:00:59.760 were blocked from launching the Venue sports service a week 0:01:00.120 --> 0:01:00.920 before rollout. 0:01:01.440 --> 0:01:03.520 Let's get right to that AMD deal. 0:01:03.560 --> 0:01:05.520 One piece of M and a four point nine billion 0:01:05.600 --> 0:01:10.240 dollar deal to acquire server maker ZT. It's the best 0:01:10.240 --> 0:01:13.880 performing stock on the Philadelphia Semiconductor Index again of almost 0:01:13.880 --> 0:01:14.440 three percent. 0:01:14.600 --> 0:01:15.760 But it was actually a pretty. 0:01:15.480 --> 0:01:18.319 Slow snart start with that news breaking this morning. 0:01:18.319 --> 0:01:19.120 What's this about? 0:01:19.360 --> 0:01:23.240 It's about AMD's move into being a systems vendor, which 0:01:23.319 --> 0:01:25.600 reminds us of another big name in that space. 0:01:25.319 --> 0:01:30.600 Carra It does in King's Person who covers MD in 0:01:30.800 --> 0:01:32.959 video of course, which is the elephant in the room 0:01:33.000 --> 0:01:34.640 that AMD is trying to tackle here. 0:01:35.800 --> 0:01:39.000 Yeah, no, that's absolutely right. In Video has basically made 0:01:39.000 --> 0:01:42.160 it easier for all of its big customers to adopt 0:01:42.240 --> 0:01:44.240 these systems. If you need a server, we'll give you 0:01:44.240 --> 0:01:47.319 a server design. If you need networking, we'll give you networking. 0:01:47.520 --> 0:01:49.600 We'll bundle everything together. We'll do a lot of the 0:01:49.640 --> 0:01:52.800 engineering for you to split this open. Now what AMD 0:01:52.920 --> 0:01:55.440 is saying, hey, we can do that too. Here are 0:01:55.480 --> 0:01:58.000 some engineering capabilities that we've taken a hold of them, 0:01:58.080 --> 0:01:59.840 and come and News argue. 0:02:00.080 --> 0:02:03.080 We've used these numbers before, but they're worth recounting. AMD 0:02:03.240 --> 0:02:06.040 will probably do four point five billion dollars of AI 0:02:06.120 --> 0:02:08.840 accelerator sales this year, while in Video will do one 0:02:08.919 --> 0:02:10.880 hundred billion dollars. And that gives you a sense of 0:02:10.880 --> 0:02:13.520 where we're at. But on AMD side, M and A 0:02:13.720 --> 0:02:15.960 is becoming a bit of a tool and a theme. 0:02:16.360 --> 0:02:18.399 This is a second deal in a number of weeks 0:02:18.440 --> 0:02:20.520 and months. What are they trying to add. 0:02:20.480 --> 0:02:24.040 Yeah, it's all of these sort of engineering capabilities that 0:02:24.120 --> 0:02:27.560 go beyond their core competence, which is to design chips. 0:02:27.560 --> 0:02:31.360 They're basically saying, we will give you whether it's the software, 0:02:31.440 --> 0:02:36.440 the models, the designs of the actual servers themselves will 0:02:36.480 --> 0:02:39.600 give you. These things will help you to adopt our chips. 0:02:39.600 --> 0:02:43.000 It's a facilitator if you like, and it's really what 0:02:43.200 --> 0:02:44.040 n Video is doing. 0:02:45.320 --> 0:02:48.680 Systems vendor, you did a good job in your first answer, 0:02:48.760 --> 0:02:53.000 But what does that mean in reality in the real 0:02:53.040 --> 0:02:55.839 world when we talk about training AI models with high 0:02:55.840 --> 0:02:58.440 performance GPUs, what does that look like? 0:02:58.880 --> 0:03:00.920 You have to think about a day center as not 0:03:01.200 --> 0:03:04.640 a room full of computers, but as a computer. It's 0:03:04.760 --> 0:03:07.840 almost like one entity in itself with all of the 0:03:07.919 --> 0:03:11.079 chips and all of the servers all connected tightly together, 0:03:11.120 --> 0:03:12.880 to all of the memory, to all of the networking. 0:03:13.160 --> 0:03:16.440 Putting all of that together is extremely difficult if you 0:03:16.520 --> 0:03:19.400 want it to work efficiently. So that's really what we're 0:03:19.400 --> 0:03:21.960 talking about here. There are only a few companies that 0:03:22.000 --> 0:03:24.640 can do that. Obviously, the Dells and the hps want 0:03:24.639 --> 0:03:27.120 to offer that expertise as well, but that is the 0:03:27.600 --> 0:03:30.720 sort of area that AMD is trying to step into. 0:03:31.639 --> 0:03:35.560 Let's just talk about z t ZT systems. However, US 0:03:35.640 --> 0:03:38.040 Brits are going to say it on the show. It's 0:03:38.080 --> 0:03:41.840 a New Jersey based company. What do they keep, what 0:03:41.920 --> 0:03:44.360 do they sell off? Who are the executives who come over? 0:03:45.480 --> 0:03:47.760 Yeah, no, that's a good question, and there's a lot 0:03:47.800 --> 0:03:50.360 of confusion on the call this morning as to what 0:03:50.400 --> 0:03:53.240 exactly is going on. Company that has about ten billion 0:03:53.280 --> 0:03:57.320 in revenue. That revenue is primarily from selling hardware. The 0:03:57.360 --> 0:04:00.880 manufacturing operations that produce that high where are going to 0:04:00.920 --> 0:04:03.960 be sold by AMD? AMD just wants about a thousand 0:04:04.040 --> 0:04:09.560 engineers and those engineering leaders who basically show their customers 0:04:09.600 --> 0:04:12.480 how to better implement AMD based systems. So there's going 0:04:12.520 --> 0:04:14.720 to be a big breakup, and you know, AMD is 0:04:14.720 --> 0:04:16.680 not going into the business of making servers. 0:04:17.480 --> 0:04:19.120 We talked about this being m and a Monday. 0:04:19.120 --> 0:04:21.719 There are some other big deals happening across different industries. 0:04:21.760 --> 0:04:24.520 But how quisitive is Lisa Sue at this point? 0:04:25.279 --> 0:04:27.599 Well, they put that in the release. They said, look, 0:04:27.600 --> 0:04:30.240 we've spent you know, a billion dollars or so in 0:04:30.240 --> 0:04:33.520 the last twelve months on acquiring capabilities that they're going 0:04:33.560 --> 0:04:35.839 to make us a better company. And I think it's 0:04:35.880 --> 0:04:39.239 reflective of the market that they're trying to push further 0:04:39.320 --> 0:04:42.280 and further into They've got more money these days. Right, 0:04:42.320 --> 0:04:45.680 They're a very solid company. That's doing well. They're solidly profitable, 0:04:45.960 --> 0:04:48.000 have been for years, and the revenues are growing. So 0:04:48.040 --> 0:04:51.760 she's trying to use that financial clout to basically make 0:04:51.800 --> 0:04:52.760 a company stronger. 0:04:53.240 --> 0:04:55.000 And in the time we've been speaking, AMD has just 0:04:55.080 --> 0:04:57.359 hit a session high up three point four percent this 0:04:57.440 --> 0:04:57.960 Monday morning. 0:04:58.000 --> 0:04:59.720 Glomosi and King, thank you very much. 0:05:00.000 --> 0:05:03.800 All comes is Investors are becoming more nervous about some 0:05:04.320 --> 0:05:09.000 Nvidia downside tech profits are slowing. Tangible results from investments 0:05:09.040 --> 0:05:13.000 in AI remain to be seen. Americprice Financial private wealth 0:05:13.000 --> 0:05:17.240 advisor Jason Betts discusses the investor's view. And we've talked 0:05:17.240 --> 0:05:19.760 about how the market in some ways is treading water. 0:05:20.600 --> 0:05:23.599 In the first instance, the Jackson Hole this Friday, but 0:05:23.680 --> 0:05:26.240 actually August twenty eighth and in video earnings is a 0:05:26.279 --> 0:05:27.240 macro level event. 0:05:27.320 --> 0:05:28.360 How do you approach that? 0:05:29.520 --> 0:05:31.000 I mean, the first thing I'll say is, you know, 0:05:31.160 --> 0:05:33.120 there's a saying that the devil's in the details, and 0:05:33.200 --> 0:05:35.200 right now the devil is in the data as far 0:05:35.240 --> 0:05:38.280 as the market is concerned, and that's actually refreshing in 0:05:38.279 --> 0:05:41.200 my opinion. We've seen a fair amount of market complacency 0:05:41.960 --> 0:05:44.440 through much of this year. Obviously, we saw the route 0:05:44.480 --> 0:05:47.520 here at two and a half three weeks ago between 0:05:47.880 --> 0:05:51.720 you know, weaker tech guidance, between the very lackluster jobs 0:05:51.760 --> 0:05:53.760 report which carried over in the Monday, with the young 0:05:53.839 --> 0:05:56.200 carry trade exacerbating all of that, the market through a 0:05:56.240 --> 0:05:58.960 temperate tantrum. We've seen the data improve here a bit, 0:06:00.160 --> 0:06:02.640 actually seen some pretty good data over the past couple 0:06:02.640 --> 0:06:04.200 of weeks, and the market he's. 0:06:04.080 --> 0:06:05.800 Clearly reacted positively to that. 0:06:06.240 --> 0:06:09.120 So moving forward, everyone's going to have their eyes as 0:06:09.120 --> 0:06:10.800 you said before on Jackson holl They're gonna have it. 0:06:10.839 --> 0:06:14.000 We're gonna have our eyes on just just the rest 0:06:14.000 --> 0:06:17.320 of the tech earnings here as well. So I'll have 0:06:17.360 --> 0:06:19.000 my eyes on that and other than that's pretty much 0:06:19.000 --> 0:06:20.080 business as usual. 0:06:20.760 --> 0:06:23.159 In the first part of the earning season. The capital 0:06:23.240 --> 0:06:27.240 expenditures data from the Hyperscalers was a clear story. The 0:06:27.279 --> 0:06:29.960 bit that's less clear is the top line growth in 0:06:30.000 --> 0:06:31.680 all of the Hyperscaler's customers. 0:06:31.720 --> 0:06:32.640 Does that worry you? 0:06:32.680 --> 0:06:35.440 Do you sort of analyze that part of the market. 0:06:37.600 --> 0:06:39.440 Yeah, I mean there's always going to be a concern 0:06:39.480 --> 0:06:41.800 about when valuations seem like they might be stretched, and 0:06:42.080 --> 0:06:45.360 we're always going to be keeping a sharp eye both 0:06:45.400 --> 0:06:49.760 on top line and and net earnings. So again, I'm 0:06:49.800 --> 0:06:51.520 gonna have our eyes on all that. I think right 0:06:51.560 --> 0:06:53.440 now that we were in a position where, you know, 0:06:53.520 --> 0:06:56.520 if I would encourage clients to take a look at 0:06:56.560 --> 0:06:58.920 their portfolio and look under the hood and look carefully 0:06:58.920 --> 0:07:02.160 for any over concentrates in both the tech space as 0:07:02.200 --> 0:07:05.800 well as the AI space. Investors have gotten away from 0:07:05.800 --> 0:07:07.559 that over the past couple of years, and they've actually 0:07:07.560 --> 0:07:10.440 been rewarded for that. And just because you've been rewarded 0:07:10.480 --> 0:07:12.080 for it over the last year or two doesn't mean 0:07:12.120 --> 0:07:14.680 that you should you should continue to not do it. 0:07:14.760 --> 0:07:17.280 So I would encourage investors right now to really look 0:07:17.320 --> 0:07:20.080 under the hood. Anything that's a high flyer, that's that's 0:07:20.120 --> 0:07:23.160 making up too much of a concentration of portfolio, consider 0:07:23.240 --> 0:07:25.320 trimming it, regardless of what we see with data unfold 0:07:25.400 --> 0:07:25.960 moving forward. 0:07:26.560 --> 0:07:30.080 Well, broadly, should you be selling down technology when we're 0:07:30.120 --> 0:07:32.640 still only about five percent off of the record highs 0:07:32.680 --> 0:07:33.560 than as that one hundred. 0:07:35.440 --> 0:07:37.800 I mean, I think that if we just look at 0:07:38.440 --> 0:07:42.240 valuations as a whole, you know, these tech stocks sold 0:07:42.240 --> 0:07:44.520 off twenty to thirty percent, and a lot of them 0:07:44.520 --> 0:07:47.320 at those levels, we're still trading at sixty times earnings. 0:07:47.600 --> 0:07:49.720 So now we're bucked back almost to the all time 0:07:49.760 --> 0:07:51.920 you know, back to the all time highs or five 0:07:52.000 --> 0:07:55.720 percent below that we need to see, in my opinion, 0:07:56.360 --> 0:08:02.640 continued strong, very strong earnings and overall data for that 0:08:02.680 --> 0:08:05.520 trajectory to continue, in my opinion. Otherwise, I think we're 0:08:05.520 --> 0:08:07.880 going to start to see some hangover effect and we're 0:08:07.880 --> 0:08:10.240 going to start to see, in my opinion, maybe a 0:08:10.280 --> 0:08:12.560 market that gets a little bit more sobered on this 0:08:12.640 --> 0:08:16.200 AI trade because for me, now we just we're treating 0:08:16.200 --> 0:08:18.080 it like it's going to be basically a money trade 0:08:18.240 --> 0:08:20.080 and we're not paying attention to any of the expenses 0:08:20.160 --> 0:08:22.560 or what are the costs, what are the taxation regulation, 0:08:23.240 --> 0:08:25.760 consolidation competition, what's that going to look like, what's that 0:08:25.800 --> 0:08:28.720 going to do to net profits? So Yeah, so that 0:08:29.480 --> 0:08:31.120 I guess that's really all I have to say about that. 0:08:31.400 --> 0:08:33.880 Okay, Jason, I'm reading between the lines that you feel 0:08:33.880 --> 0:08:36.080 there's hype here in AI. So if you want to 0:08:36.120 --> 0:08:39.200 remain committed in technology, but you don't want to remain 0:08:39.400 --> 0:08:42.280 so committed on certain AI high flyers, is there any 0:08:42.320 --> 0:08:42.959 where to put it? 0:08:44.120 --> 0:08:44.320 Yeah? 0:08:44.360 --> 0:08:46.360 And this is I mean, this is going to be ironic, 0:08:46.440 --> 0:08:49.640 but I say this because their valuations are also appear 0:08:49.720 --> 0:08:53.000 to be stretched, and our only you know, they're only 0:08:53.080 --> 0:08:55.400 probably about five percent off their highs, and that would 0:08:55.400 --> 0:08:59.200 be just cybersecurity, but the difference being, in my opinion, 0:09:00.080 --> 0:09:03.840 much clearer picture moving forward on tangible earnings. So we 0:09:03.960 --> 0:09:05.960 know there's bad guys that are going to continue to 0:09:05.960 --> 0:09:10.079 get better regardless of whether the AI trajectory moves at 0:09:10.120 --> 0:09:13.080 this kind of what I think is a perfect case 0:09:13.080 --> 0:09:15.440 scenario is what the market is pricing in right now. 0:09:15.679 --> 0:09:17.679 So if that happens, we're going to need a lot 0:09:17.720 --> 0:09:20.400 more cybersecurity. And if it doesn't happen, the bad guys 0:09:20.400 --> 0:09:22.160 are still going to be out there working hard and 0:09:22.200 --> 0:09:24.840 getting better. And so I think for a long term place, 0:09:24.880 --> 0:09:28.120 cybersecurity is probably the strongest. And also if things get 0:09:28.120 --> 0:09:30.800 a little a little shaki or weird, might be actually 0:09:30.840 --> 0:09:33.679 a bit more defensive in the technology space at this. 0:09:33.679 --> 0:09:37.520 Moment, Jason, do you include crowd strike in that? 0:09:39.840 --> 0:09:42.199 Can't talk about individual names unfortunately, but I would just 0:09:42.240 --> 0:09:47.080 say as a whole you know, would say cybersecurities. 0:09:47.160 --> 0:09:49.360 You know, in my opinion is it's a pretty big thing. 0:09:50.320 --> 0:09:52.480 It sounds like everything we've discussed so far right that 0:09:52.600 --> 0:09:54.880 it's the economic data that ties all of this together, 0:09:55.480 --> 0:09:59.680 and so your action relating to technology sector depends on 0:09:59.679 --> 0:10:02.360 that day. But why because of your view of what 0:10:02.400 --> 0:10:03.520 the FED will it won't do? 0:10:07.480 --> 0:10:09.280 So I think I think what I heard was just 0:10:09.320 --> 0:10:12.480 asking about, you know, regarded to the FED and what 0:10:12.520 --> 0:10:15.679 it will up will not do. My personal opinion is 0:10:15.720 --> 0:10:18.880 that regardless of what the FED does. First off, I 0:10:18.880 --> 0:10:20.600 think we're going to get a quarterbase right, We're gonna 0:10:20.600 --> 0:10:23.480 get twenty five basis points in September. I think it's 0:10:23.559 --> 0:10:25.480 kind of funny that that not funny in a good 0:10:25.480 --> 0:10:27.720 way necessarily, but that you know, a few weeks ago 0:10:28.240 --> 0:10:31.240 we had calls for emergency rate cuts and definitely fifty 0:10:31.280 --> 0:10:33.400 bases points, and then you know, all of a sudden, 0:10:33.440 --> 0:10:35.400 the sky was no longer falling. All of a sudden, 0:10:35.440 --> 0:10:38.160 the data wasn't as bad as it seems. And so, 0:10:38.440 --> 0:10:40.440 you know, regardless of what the FED does, I don't 0:10:40.440 --> 0:10:42.520 think the Fed. I think the FED does twenty five 0:10:42.559 --> 0:10:44.800 bases points and we may see more. I think we're 0:10:44.800 --> 0:10:46.400 gonna get a better uh, we're gonna have a better 0:10:46.400 --> 0:10:48.000 idea about that obviously after Friday. 0:10:48.720 --> 0:10:50.480 But regardless of the fed's movement. 0:10:50.880 --> 0:10:54.960 I'm not convinced that necessarily has a huge impact on 0:10:55.120 --> 0:10:57.880 stocks over the short over the short term. 0:10:58.080 --> 0:11:01.400 Amer of Price Financial Private Wealth of Jason Bett's some 0:11:01.480 --> 0:11:04.560 calls there, We thank you for it now. British tech 0:11:04.640 --> 0:11:08.719 entrepreneur Mike Lynch, of course, the CEO of software firm Autonomy, 0:11:08.760 --> 0:11:12.000 as was, is among the people missing after a super 0:11:12.080 --> 0:11:14.960 yacht sunk off the coast of Sicily and Italy. Scorne 0:11:14.960 --> 0:11:18.480 into a source, one person has died. Six others, including 0:11:18.480 --> 0:11:21.600 four UK nationals, are missing US after the fifty six 0:11:21.679 --> 0:11:25.240 meter bog called Bayesian sank this morning near Porticello. 0:11:25.320 --> 0:11:26.959 It's all according to Associated Press. 0:11:27.120 --> 0:11:30.600 Ninch's wife, Angela Bacaraz is among those rescued. 0:11:30.920 --> 0:11:32.719 The person said, ed. 0:11:35.080 --> 0:11:37.440 Okay, coming up on the show, GM is laying off 0:11:37.480 --> 0:11:39.800 more than one thousand software engineers. 0:11:39.840 --> 0:11:41.120 Will have all the details next. 0:11:41.160 --> 0:11:45.080 And Apple is working to make another key component in house. 0:11:45.120 --> 0:11:47.000 But is the investment worth it? 0:11:47.120 --> 0:12:07.320 We'll discuss this is Bloomberg Technology. General Motors is cutting 0:12:07.320 --> 0:12:10.559 more than one thousand software engineers as the automaker moves 0:12:10.600 --> 0:12:14.480 to lean up its software and services organization. That, according 0:12:14.760 --> 0:12:16.760 to a source, with more than six hundred of these 0:12:16.840 --> 0:12:18.760 layoffs to happen in Michigan. 0:12:18.800 --> 0:12:20.280 Bloomberg's Detroit Burreier chief. 0:12:20.160 --> 0:12:23.400 David Wells broke this story and joins us, Now, you've 0:12:23.440 --> 0:12:27.800 written a lot about GM's big push into software and services, 0:12:27.840 --> 0:12:30.120 and it seems, David, like they're kind of peeling that 0:12:30.240 --> 0:12:30.719 back a bit. 0:12:32.559 --> 0:12:32.760 Yeah. 0:12:32.800 --> 0:12:35.560 I think this's the bigger picture here is they're peeling 0:12:35.600 --> 0:12:37.880 back on a lot of these big technology bits, and 0:12:37.960 --> 0:12:40.160 they kind of understand the bigger context here. You have 0:12:40.200 --> 0:12:42.520 to go back a few years to their investor day 0:12:42.559 --> 0:12:44.640 presentation when they said they were going to double revenue 0:12:44.679 --> 0:12:46.559 of the company about twenty thirty and that was with 0:12:46.640 --> 0:12:50.520 electric vehicles, autonomous vehicles, and these software related services. And 0:12:50.559 --> 0:12:54.040 they never really explained what those were exactly, nor did 0:12:54.040 --> 0:12:58.160 they really give examples. But with the electric Chevy Blazer, 0:12:58.200 --> 0:13:00.840 we saw that they had things they could you charging 0:13:02.160 --> 0:13:04.800 and plan it on your route. They had their own 0:13:04.920 --> 0:13:10.400 version of car Play actually sort of a competitor or 0:13:10.440 --> 0:13:14.320 replacement for it, and this group developed stuff like that 0:13:14.400 --> 0:13:17.480 as well as a system that would control the car breaking, 0:13:17.640 --> 0:13:20.960 battery management, all of it. And you know, they didn't 0:13:20.960 --> 0:13:22.640 say this. What they said is they want to streamline 0:13:22.679 --> 0:13:26.040 the group so they can move faster. But I have 0:13:26.120 --> 0:13:28.840 to think that with them deling some of their electric 0:13:28.960 --> 0:13:32.800 vehicle production, canceling at least one EV, maybe more, and 0:13:33.440 --> 0:13:36.319 with the slowdown in autonomy, that maybe they just don't 0:13:36.320 --> 0:13:38.280 need as many of these people because they aren't going 0:13:38.360 --> 0:13:40.000 to be doing quite as much as they thought they 0:13:40.000 --> 0:13:41.040 were when they hired them all. 0:13:41.080 --> 0:13:44.920 Sometimes we were showing the statement from GM, which basically 0:13:44.960 --> 0:13:47.480 confirms the broad idea of cuts, that doesn't sort of 0:13:47.559 --> 0:13:51.880 quantify them. Does GM have a business yet? David's selling 0:13:51.920 --> 0:13:54.599 software and services, you know, it is a big focus 0:13:54.880 --> 0:13:57.440 of the pure play EV names, but also the legacy 0:13:57.440 --> 0:14:01.520 OEMs as well. How much money can you make selling updates? 0:14:01.600 --> 0:14:05.640 Essentially, they don't have much of a business. 0:14:05.640 --> 0:14:08.360 And they've had on Star for years, which does it 0:14:08.480 --> 0:14:11.959 has had some concierge services and navigation and that sort 0:14:12.000 --> 0:14:14.559 of thing over the years, and they do still make 0:14:14.600 --> 0:14:18.360 money off of on Star, and they've tried certain things 0:14:18.400 --> 0:14:22.880 with linking up their drivers to Starbucks or other vendors 0:14:22.920 --> 0:14:25.760 like that. But if they still make any money off 0:14:25.800 --> 0:14:28.160 of that, it's negligible. It's something they do want to build. 0:14:28.520 --> 0:14:31.400 Then the whole idea behind this what they used to 0:14:31.400 --> 0:14:34.960 call Ultify. Now it's just their internal software system was 0:14:35.080 --> 0:14:37.720 to control the entire car, not give control of that 0:14:37.760 --> 0:14:40.720 to Apple or Google or anybody else, mostly Apple being 0:14:40.720 --> 0:14:42.840 the one they wanted to avoid because if there was 0:14:42.920 --> 0:14:45.040 money to be made off of services, they'd be able 0:14:45.080 --> 0:14:47.400 to do it. And they still may, but it's just 0:14:47.440 --> 0:14:50.760 not something that's really generating revenue now because it's so new, 0:14:50.920 --> 0:14:52.280 and it looks like they're going to be raining and 0:14:52.320 --> 0:14:54.120 in a bit interesting that. 0:14:54.440 --> 0:14:57.000 Of course, to stop the money flowing to Apple, they 0:14:57.040 --> 0:15:01.280 took executives from Apple, was it, David Richardson and another 0:15:01.600 --> 0:15:04.760 joining to help lead the software team. Maybe they're thinking 0:15:04.800 --> 0:15:07.520 about just doing all of this more with less. 0:15:09.440 --> 0:15:12.720 Well, they are, certainly, and GM has described it basically 0:15:12.720 --> 0:15:16.480 as a streamlining. And look, there are times when companies 0:15:16.600 --> 0:15:19.440 launch into some big initiative like this and they just 0:15:19.520 --> 0:15:22.240 hire too many people and they realize once they kind 0:15:22.240 --> 0:15:23.840 of get into the meat of it, that they've just 0:15:24.880 --> 0:15:27.880 they can develop what they need without so many of them. 0:15:28.560 --> 0:15:31.560 And this is a pretty significant cut though more than 0:15:31.600 --> 0:15:35.640 a thousand people, most of them being in Michigan. It's 0:15:35.720 --> 0:15:37.080 quite a group to trim out. 0:15:37.120 --> 0:15:40.000 If it's just streamlining, well, said David Welch. 0:15:40.320 --> 0:15:43.400 Thank you, and let's turn our attention to Apple at 0:15:43.400 --> 0:15:46.600 the moment because it's Hardware Technologies group, the chip builders 0:15:46.600 --> 0:15:49.040 behind the company's in house processes, is working on a 0:15:49.080 --> 0:15:53.040 new critical component. The payoff may not be seen for years. 0:15:53.240 --> 0:15:56.720 Right now, iPhones use cellular modems built by Qualcom. It's 0:15:56.720 --> 0:15:59.080 a reliable, best in class chip for basically most of 0:15:59.080 --> 0:16:01.560 the global smartphone The strength thought in the in to Com. 0:16:01.600 --> 0:16:04.720 Apple hopes to have a better in house replacement for 0:16:04.800 --> 0:16:07.920 more writing about it is reingbods Mark German And this 0:16:07.960 --> 0:16:09.000 is a longer term bet. 0:16:09.560 --> 0:16:10.960 When will the payoff come? 0:16:11.120 --> 0:16:14.640 Why have they shifted away from Qualcom in the long term? 0:16:15.000 --> 0:16:17.640 Now, this is an interesting one. The project to develop 0:16:17.680 --> 0:16:20.840 their own cellular modem really started because they were upset 0:16:20.880 --> 0:16:23.840 with how much Qualcom was charging them. The royalty fees 0:16:23.880 --> 0:16:27.040 that Qualcom had been charging Apple for years is something 0:16:27.080 --> 0:16:30.160 that the company is simply not used to. Apple typically 0:16:30.200 --> 0:16:33.200 gets the best bang for their buck. They typically are 0:16:33.240 --> 0:16:36.960 the ones that are the more controlling in the supplier relationships. 0:16:37.000 --> 0:16:40.120 But that sort of was spun on its head with Qualcomm, 0:16:40.240 --> 0:16:42.080 and Apple really had no choice but to work with 0:16:42.120 --> 0:16:44.800 Qualcomm because if Apple wanted to move to five G, 0:16:45.240 --> 0:16:47.600 there really was no other game in town other than 0:16:47.640 --> 0:16:50.120 the chip maker from San Diego, And so that was 0:16:50.160 --> 0:16:53.680 really the start back in twenty eighteen when they started working. 0:16:53.840 --> 0:16:54.600 On this modem. 0:16:54.720 --> 0:16:58.360 Development ramped up around twenty twenty. They acquired Intel's modem 0:16:58.400 --> 0:17:01.560 group for about one billion dollars twenty nineteen to really 0:17:01.640 --> 0:17:05.480 jumpstart that development. But it's interesting because unlike the move 0:17:05.560 --> 0:17:08.320 to Apple in house processors in the Mac, unlike the 0:17:08.359 --> 0:17:12.360 move to Apple in house processors for earbuds, for smart watches, 0:17:12.440 --> 0:17:15.959 for set top boxes, the modem from Qualcom is actually 0:17:16.040 --> 0:17:18.239 best in class. At this point, You're not going to 0:17:18.280 --> 0:17:21.200 bring better performance to the table than Qualcomm, and if 0:17:21.200 --> 0:17:23.439 you do, this is not something that can be noticed 0:17:23.440 --> 0:17:24.240 by the consumer. 0:17:24.680 --> 0:17:25.680 So the bet here. 0:17:25.560 --> 0:17:27.440 Is that this is going to save costs and then 0:17:27.520 --> 0:17:30.639 maybe five years from now, over time, being able to 0:17:30.680 --> 0:17:33.240 shrink that modem down to an Apple sized chip to 0:17:33.240 --> 0:17:36.320 put it on the same motherboard and the same SoC 0:17:36.520 --> 0:17:39.080 The system on a chip is the existing Apple components. 0:17:39.480 --> 0:17:41.920 Maybe you can shrink down the internals of the phone 0:17:42.040 --> 0:17:44.640 to add other new features to create new form factors. 0:17:44.640 --> 0:17:47.320 So it's a mix of costs now and hopefully new 0:17:47.359 --> 0:17:48.040 designs later. 0:17:49.160 --> 0:17:51.000 Mak You also went back to the idea of a 0:17:51.080 --> 0:17:56.080 table top robot in this week's power On. Just explain 0:17:56.119 --> 0:17:58.359 that the basic design we don't have a visual right that. 0:17:58.760 --> 0:18:01.560 I think it's in base terms worth telling the Bloomberg 0:18:01.680 --> 0:18:04.920 Technology audience what it is they're planning to bring to us. 0:18:05.880 --> 0:18:09.359 So, Apple's next big thing is robotics, and the first 0:18:09.440 --> 0:18:12.560 robotics device you're going to see from Apple is going 0:18:12.600 --> 0:18:16.240 to be a tabletop robot. It's essentially a gigantic iPad 0:18:16.320 --> 0:18:19.720 screen connected to a robotic arm or a robotic conneck, 0:18:20.400 --> 0:18:23.360 and the display can move to follow your head movements. 0:18:23.600 --> 0:18:26.000 If I'm on a FaceTime call with someone and that 0:18:26.080 --> 0:18:28.960 other person begins speaking that's in the room with me, 0:18:29.520 --> 0:18:32.600 the display can know that it's them speaking and tilt 0:18:32.720 --> 0:18:35.679 towards them. If you are on a FaceTime call with 0:18:35.720 --> 0:18:38.000 someone else, and let's say that person on the other 0:18:38.080 --> 0:18:41.920 line is nodding their head or making various head movements, 0:18:42.680 --> 0:18:45.200 that screen will be able to follow the head movements 0:18:45.200 --> 0:18:48.000 of that other person. You'll be able to tell the 0:18:48.040 --> 0:18:50.080 device to look at you, and it will all turn 0:18:50.160 --> 0:18:54.199 towards you and so this is a robotics exercise. The 0:18:54.240 --> 0:18:56.440 company's aiming to get down to a price of around 0:18:56.440 --> 0:18:59.560 one thousand dollars. The big picture here is that Apple's 0:18:59.560 --> 0:19:01.760 trying a lot of new stuff, right, and I think 0:19:01.800 --> 0:19:03.560 one day we're going to be having more in depth 0:19:03.560 --> 0:19:07.240 discussions about mobile robots similar to the Amazon astro. I 0:19:07.240 --> 0:19:10.119 think the idea of Apple getting to humanoid robots is 0:19:10.160 --> 0:19:12.080 also a real possibility a decade from now. 0:19:13.119 --> 0:19:14.800 Blimberg's Mark Gumman terrific. 0:19:22.920 --> 0:19:25.919 It's tak crypto because Bitcoin and actually the wider crypto market, 0:19:26.080 --> 0:19:28.919 they're not saying some sharp losses this month, even as 0:19:28.960 --> 0:19:31.720 global stocks are pushed back towards record highs. Now Look, 0:19:31.760 --> 0:19:34.160 bitcoin has been falling roughly ten percent in the month 0:19:34.160 --> 0:19:37.000 of August, and with the same period though global stocks. 0:19:37.000 --> 0:19:38.640 If you look at the MSCI inex, it's up more 0:19:38.640 --> 0:19:41.480 than one percent, Gold is all time highs. Even the 0:19:41.480 --> 0:19:44.080 global bond gauge is up nearly two percent. So why 0:19:44.320 --> 0:19:47.199 the lagging lumotion? Ai Bassek is here for more. It's 0:19:47.240 --> 0:19:50.480 supplies side, right, This is a potential for government sales. 0:19:50.640 --> 0:19:51.520 There were a. 0:19:51.480 --> 0:19:53.840 Lot of overhangs into the summer. If you think about it. 0:19:53.880 --> 0:19:56.320 But the other problem here is what is the next catalyst. 0:19:56.320 --> 0:19:58.080 If you got about the beginning of the year that 0:19:58.200 --> 0:20:02.040