Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From Mahart where innovation, money and power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Live from New York and San Francisco. This is Bloomberg Technology,
Speaker 3: and it's M and a Monday. AMD to buy server
Speaker 3: maker z T Systems, and it's to fight back against
Speaker 3: Nvidia in the data center space.
Speaker 4: General Motors slashes software jobs after a big push to
Speaker 4: bolster its digital prowess.
Speaker 5: We have the Bloomberg exclusive.
Speaker 3: And sports streaming platform Fubo continues to surge after rivals
Speaker 3: were blocked from launching the Venue sports service a week
Speaker 3: before rollout.
Speaker 5: Let's get right to that AMD deal.
Speaker 4: One piece of M and a four point nine billion
Speaker 4: dollar deal to acquire server maker ZT. It's the best
Speaker 4: performing stock on the Philadelphia Semiconductor Index again of almost
Speaker 4: three percent.
Speaker 5: But it was actually a pretty.
Speaker 4: Slow snart start with that news breaking this morning.
Speaker 5: What's this about?
Speaker 4: It's about AMD's move into being a systems vendor, which
Speaker 4: reminds us of another big name in that space.
Speaker 3: Carra It does in King's Person who covers MD in
Speaker 3: video of course, which is the elephant in the room
Speaker 3: that AMD is trying to tackle here.
Speaker 6: Yeah, no, that's absolutely right. In Video has basically made
Speaker 6: it easier for all of its big customers to adopt
Speaker 6: these systems. If you need a server, we'll give you
Speaker 6: a server design. If you need networking, we'll give you networking.
Speaker 6: We'll bundle everything together. We'll do a lot of the
Speaker 6: engineering for you to split this open. Now what AMD
Speaker 6: is saying, hey, we can do that too. Here are
Speaker 6: some engineering capabilities that we've taken a hold of them,
Speaker 6: and come and News argue.
Speaker 4: We've used these numbers before, but they're worth recounting. AMD
Speaker 4: will probably do four point five billion dollars of AI
Speaker 4: accelerator sales this year, while in Video will do one
Speaker 4: hundred billion dollars. And that gives you a sense of
Speaker 4: where we're at. But on AMD side, M and A
Speaker 4: is becoming a bit of a tool and a theme.
Speaker 4: This is a second deal in a number of weeks
Speaker 4: and months. What are they trying to add.
Speaker 6: Yeah, it's all of these sort of engineering capabilities that
Speaker 6: go beyond their core competence, which is to design chips.
Speaker 6: They're basically saying, we will give you whether it's the software,
Speaker 6: the models, the designs of the actual servers themselves will
Speaker 6: give you. These things will help you to adopt our chips.
Speaker 6: It's a facilitator if you like, and it's really what
Speaker 6: n Video is doing.
Speaker 4: Systems vendor, you did a good job in your first answer,
Speaker 4: But what does that mean in reality in the real
Speaker 4: world when we talk about training AI models with high
Speaker 4: performance GPUs, what does that look like?
Speaker 6: You have to think about a day center as not
Speaker 6: a room full of computers, but as a computer. It's
Speaker 6: almost like one entity in itself with all of the
Speaker 6: chips and all of the servers all connected tightly together,
Speaker 6: to all of the memory, to all of the networking.
Speaker 6: Putting all of that together is extremely difficult if you
Speaker 6: want it to work efficiently. So that's really what we're
Speaker 6: talking about here. There are only a few companies that
Speaker 6: can do that. Obviously, the Dells and the hps want
Speaker 6: to offer that expertise as well, but that is the
Speaker 6: sort of area that AMD is trying to step into.
Speaker 3: Let's just talk about z t ZT systems. However, US
Speaker 3: Brits are going to say it on the show. It's
Speaker 3: a New Jersey based company. What do they keep, what
Speaker 3: do they sell off? Who are the executives who come over?
Speaker 6: Yeah, no, that's a good question, and there's a lot
Speaker 6: of confusion on the call this morning as to what
Speaker 6: exactly is going on. Company that has about ten billion
Speaker 6: in revenue. That revenue is primarily from selling hardware. The
Speaker 6: manufacturing operations that produce that high where are going to
Speaker 6: be sold by AMD? AMD just wants about a thousand
Speaker 6: engineers and those engineering leaders who basically show their customers
Speaker 6: how to better implement AMD based systems. So there's going
Speaker 6: to be a big breakup, and you know, AMD is
Speaker 6: not going into the business of making servers.
Speaker 7: We talked about this being m and a Monday.
Speaker 3: There are some other big deals happening across different industries.
Speaker 7: But how quisitive is Lisa Sue at this point?
Speaker 6: Well, they put that in the release. They said, look,
Speaker 6: we've spent you know, a billion dollars or so in
Speaker 6: the last twelve months on acquiring capabilities that they're going
Speaker 6: to make us a better company. And I think it's
Speaker 6: reflective of the market that they're trying to push further
Speaker 6: and further into They've got more money these days. Right,
Speaker 6: They're a very solid company. That's doing well. They're solidly profitable,
Speaker 6: have been for years, and the revenues are growing. So
Speaker 6: she's trying to use that financial clout to basically make
Speaker 6: a company stronger.
Speaker 4: And in the time we've been speaking, AMD has just
Speaker 4: hit a session high up three point four percent this
Speaker 4: Monday morning.
Speaker 5: Glomosi and King, thank you very much.
Speaker 4: All comes is Investors are becoming more nervous about some
Speaker 4: Nvidia downside tech profits are slowing. Tangible results from investments
Speaker 4: in AI remain to be seen. Americprice Financial private wealth
Speaker 4: advisor Jason Betts discusses the investor's view. And we've talked
Speaker 4: about how the market in some ways is treading water.
Speaker 4: In the first instance, the Jackson Hole this Friday, but
Speaker 4: actually August twenty eighth and in video earnings is a
Speaker 4: macro level event.
Speaker 5: How do you approach that?
Speaker 8: I mean, the first thing I'll say is, you know,
Speaker 8: there's a saying that the devil's in the details, and
Speaker 8: right now the devil is in the data as far
Speaker 8: as the market is concerned, and that's actually refreshing in
Speaker 8: my opinion. We've seen a fair amount of market complacency
Speaker 8: through much of this year. Obviously, we saw the route
Speaker 8: here at two and a half three weeks ago between
Speaker 8: you know, weaker tech guidance, between the very lackluster jobs
Speaker 8: report which carried over in the Monday, with the young
Speaker 8: carry trade exacerbating all of that, the market through a
Speaker 8: temperate tantrum. We've seen the data improve here a bit,
Speaker 8: actually seen some pretty good data over the past couple
Speaker 8: of weeks, and the market he's.
Speaker 9: Clearly reacted positively to that.
Speaker 8: So moving forward, everyone's going to have their eyes as
Speaker 8: you said before on Jackson holl They're gonna have it.
Speaker 8: We're gonna have our eyes on just just the rest
Speaker 8: of the tech earnings here as well. So I'll have
Speaker 8: my eyes on that and other than that's pretty much
Speaker 8: business as usual.
Speaker 4: In the first part of the earning season. The capital
Speaker 4: expenditures data from the Hyperscalers was a clear story. The
Speaker 4: bit that's less clear is the top line growth in
Speaker 4: all of the Hyperscaler's customers.
Speaker 5: Does that worry you?
Speaker 4: Do you sort of analyze that part of the market.
Speaker 8: Yeah, I mean there's always going to be a concern
Speaker 8: about when valuations seem like they might be stretched, and
Speaker 8: we're always going to be keeping a sharp eye both
Speaker 8: on top line and and net earnings. So again, I'm
Speaker 8: gonna have our eyes on all that. I think right
Speaker 8: now that we were in a position where, you know,
Speaker 8: if I would encourage clients to take a look at
Speaker 8: their portfolio and look under the hood and look carefully
Speaker 8: for any over concentrates in both the tech space as
Speaker 8: well as the AI space. Investors have gotten away from
Speaker 8: that over the past couple of years, and they've actually
Speaker 8: been rewarded for that. And just because you've been rewarded
Speaker 8: for it over the last year or two doesn't mean
Speaker 8: that you should you should continue to not do it.
Speaker 8: So I would encourage investors right now to really look
Speaker 8: under the hood. Anything that's a high flyer, that's that's
Speaker 8: making up too much of a concentration of portfolio, consider
Speaker 8: trimming it, regardless of what we see with data unfold
Speaker 8: moving forward.
Speaker 3: Well, broadly, should you be selling down technology when we're
Speaker 3: still only about five percent off of the record highs
Speaker 3: than as that one hundred.
Speaker 8: I mean, I think that if we just look at
Speaker 8: valuations as a whole, you know, these tech stocks sold
Speaker 8: off twenty to thirty percent, and a lot of them
Speaker 8: at those levels, we're still trading at sixty times earnings.
Speaker 8: So now we're bucked back almost to the all time
Speaker 8: you know, back to the all time highs or five
Speaker 8: percent below that we need to see, in my opinion,
Speaker 8: continued strong, very strong earnings and overall data for that
Speaker 8: trajectory to continue, in my opinion. Otherwise, I think we're
Speaker 8: going to start to see some hangover effect and we're
Speaker 8: going to start to see, in my opinion, maybe a
Speaker 8: market that gets a little bit more sobered on this
Speaker 8: AI trade because for me, now we just we're treating
Speaker 8: it like it's going to be basically a money trade
Speaker 8: and we're not paying attention to any of the expenses
Speaker 8: or what are the costs, what are the taxation regulation,
Speaker 8: consolidation competition, what's that going to look like, what's that
Speaker 8: going to do to net profits? So Yeah, so that
Speaker 8: I guess that's really all I have to say about that.
Speaker 3: Okay, Jason, I'm reading between the lines that you feel
Speaker 3: there's hype here in AI. So if you want to
Speaker 3: remain committed in technology, but you don't want to remain
Speaker 3: so committed on certain AI high flyers, is there any
Speaker 3: where to put it?
Speaker 5: Yeah?
Speaker 8: And this is I mean, this is going to be ironic,
Speaker 8: but I say this because their valuations are also appear
Speaker 8: to be stretched, and our only you know, they're only
Speaker 8: probably about five percent off their highs, and that would
Speaker 8: be just cybersecurity, but the difference being, in my opinion,
Speaker 8: much clearer picture moving forward on tangible earnings. So we
Speaker 8: know there's bad guys that are going to continue to
Speaker 8: get better regardless of whether the AI trajectory moves at
Speaker 8: this kind of what I think is a perfect case
Speaker 8: scenario is what the market is pricing in right now.
Speaker 8: So if that happens, we're going to need a lot
Speaker 8: more cybersecurity. And if it doesn't happen, the bad guys
Speaker 8: are still going to be out there working hard and
Speaker 8: getting better. And so I think for a long term place,
Speaker 8: cybersecurity is probably the strongest. And also if things get
Speaker 8: a little a little shaki or weird, might be actually
Speaker 8: a bit more defensive in the technology space at this.
Speaker 4: Moment, Jason, do you include crowd strike in that?
Speaker 8: Can't talk about individual names unfortunately, but I would just
Speaker 8: say as a whole you know, would say cybersecurities.
Speaker 9: You know, in my opinion is it's a pretty big thing.
Speaker 4: It sounds like everything we've discussed so far right that
Speaker 4: it's the economic data that ties all of this together,
Speaker 4: and so your action relating to technology sector depends on
Speaker 4: that day. But why because of your view of what
Speaker 4: the FED will it won't do?
Speaker 8: So I think I think what I heard was just
Speaker 8: asking about, you know, regarded to the FED and what
Speaker 8: it will up will not do. My personal opinion is
Speaker 8: that regardless of what the FED does. First off, I
Speaker 8: think we're going to get a quarterbase right, We're gonna
Speaker 8: get twenty five basis points in September. I think it's
Speaker 8: kind of funny that that not funny in a good
Speaker 8: way necessarily, but that you know, a few weeks ago
Speaker 8: we had calls for emergency rate cuts and definitely fifty
Speaker 8: bases points, and then you know, all of a sudden,
Speaker 8: the sky was no longer falling. All of a sudden,
Speaker 8: the data wasn't as bad as it seems. And so,
Speaker 8: you know, regardless of what the FED does, I don't
Speaker 8: think the Fed. I think the FED does twenty five
Speaker 8: bases points and we may see more. I think we're
Speaker 8: gonna get a better uh, we're gonna have a better
Speaker 8: idea about that obviously after Friday.
Speaker 9: But regardless of the fed's movement.
Speaker 8: I'm not convinced that necessarily has a huge impact on
Speaker 8: stocks over the short over the short term.
Speaker 3: Amer of Price Financial Private Wealth of Jason Bett's some
Speaker 3: calls there, We thank you for it now. British tech
Speaker 3: entrepreneur Mike Lynch, of course, the CEO of software firm Autonomy,
Speaker 3: as was, is among the people missing after a super
Speaker 3: yacht sunk off the coast of Sicily and Italy. Scorne
Speaker 3: into a source, one person has died. Six others, including
Speaker 3: four UK nationals, are missing US after the fifty six
Speaker 3: meter bog called Bayesian sank this morning near Porticello.
Speaker 7: It's all according to Associated Press.
Speaker 3: Ninch's wife, Angela Bacaraz is among those rescued.
Speaker 7: The person said, ed.
Speaker 4: Okay, coming up on the show, GM is laying off
Speaker 4: more than one thousand software engineers.
Speaker 5: Will have all the details next.
Speaker 4: And Apple is working to make another key component in house.
Speaker 5: But is the investment worth it?
Speaker 4: We'll discuss this is Bloomberg Technology. General Motors is cutting
Speaker 4: more than one thousand software engineers as the automaker moves
Speaker 4: to lean up its software and services organization. That, according
Speaker 4: to a source, with more than six hundred of these
Speaker 4: layoffs to happen in Michigan.
Speaker 5: Bloomberg's Detroit Burreier chief.
Speaker 4: David Wells broke this story and joins us, Now, you've
Speaker 4: written a lot about GM's big push into software and services,
Speaker 4: and it seems, David, like they're kind of peeling that
Speaker 4: back a bit.
Speaker 9: Yeah.
Speaker 2: I think this's the bigger picture here is they're peeling
Speaker 2: back on a lot of these big technology bits, and
Speaker 2: they kind of understand the bigger context here. You have
Speaker 2: to go back a few years to their investor day
Speaker 2: presentation when they said they were going to double revenue
Speaker 2: of the company about twenty thirty and that was with
Speaker 2: electric vehicles, autonomous vehicles, and these software related services. And
Speaker 2: they never really explained what those were exactly, nor did
Speaker 2: they really give examples. But with the electric Chevy Blazer,
Speaker 2: we saw that they had things they could you charging
Speaker 2: and plan it on your route. They had their own
Speaker 2: version of car Play actually sort of a competitor or
Speaker 2: replacement for it, and this group developed stuff like that
Speaker 2: as well as a system that would control the car breaking,
Speaker 2: battery management, all of it. And you know, they didn't
Speaker 2: say this. What they said is they want to streamline
Speaker 2: the group so they can move faster. But I have
Speaker 2: to think that with them deling some of their electric
Speaker 2: vehicle production, canceling at least one EV, maybe more, and
Speaker 2: with the slowdown in autonomy, that maybe they just don't
Speaker 2: need as many of these people because they aren't going
Speaker 2: to be doing quite as much as they thought they
Speaker 2: were when they hired them all.
Speaker 4: Sometimes we were showing the statement from GM, which basically
Speaker 4: confirms the broad idea of cuts, that doesn't sort of
Speaker 4: quantify them. Does GM have a business yet? David's selling
Speaker 4: software and services, you know, it is a big focus
Speaker 4: of the pure play EV names, but also the legacy
Speaker 4: OEMs as well. How much money can you make selling updates?
Speaker 5: Essentially, they don't have much of a business.
Speaker 2: And they've had on Star for years, which does it
Speaker 2: has had some concierge services and navigation and that sort
Speaker 2: of thing over the years, and they do still make
Speaker 2: money off of on Star, and they've tried certain things
Speaker 2: with linking up their drivers to Starbucks or other vendors
Speaker 2: like that. But if they still make any money off
Speaker 2: of that, it's negligible. It's something they do want to build.
Speaker 2: Then the whole idea behind this what they used to
Speaker 2: call Ultify. Now it's just their internal software system was
Speaker 2: to control the entire car, not give control of that
Speaker 2: to Apple or Google or anybody else, mostly Apple being
Speaker 2: the one they wanted to avoid because if there was
Speaker 2: money to be made off of services, they'd be able
Speaker 2: to do it. And they still may, but it's just
Speaker 2: not something that's really generating revenue now because it's so new,
Speaker 2: and it looks like they're going to be raining and
Speaker 2: in a bit interesting that.
Speaker 3: Of course, to stop the money flowing to Apple, they
Speaker 3: took executives from Apple, was it, David Richardson and another
Speaker 3: joining to help lead the software team. Maybe they're thinking
Speaker 3: about just doing all of this more with less.
Speaker 2: Well, they are, certainly, and GM has described it basically
Speaker 2: as a streamlining. And look, there are times when companies
Speaker 2: launch into some big initiative like this and they just
Speaker 2: hire too many people and they realize once they kind
Speaker 2: of get into the meat of it, that they've just
Speaker 2: they can develop what they need without so many of them.
Speaker 2: And this is a pretty significant cut though more than
Speaker 2: a thousand people, most of them being in Michigan. It's
Speaker 2: quite a group to trim out.
Speaker 7: If it's just streamlining, well, said David Welch.
Speaker 3: Thank you, and let's turn our attention to Apple at
Speaker 3: the moment because it's Hardware Technologies group, the chip builders
Speaker 3: behind the company's in house processes, is working on a
Speaker 3: new critical component. The payoff may not be seen for years.
Speaker 3: Right now, iPhones use cellular modems built by Qualcom. It's
Speaker 3: a reliable, best in class chip for basically most of
Speaker 3: the global smartphone The strength thought in the in to Com.
Speaker 3: Apple hopes to have a better in house replacement for
Speaker 3: more writing about it is reingbods Mark German And this
Speaker 3: is a longer term bet.
Speaker 7: When will the payoff come?
Speaker 3: Why have they shifted away from Qualcom in the long term?
Speaker 10: Now, this is an interesting one. The project to develop
Speaker 10: their own cellular modem really started because they were upset
Speaker 10: with how much Qualcom was charging them. The royalty fees
Speaker 10: that Qualcom had been charging Apple for years is something
Speaker 10: that the company is simply not used to. Apple typically
Speaker 10: gets the best bang for their buck. They typically are
Speaker 10: the ones that are the more controlling in the supplier relationships.
Speaker 10: But that sort of was spun on its head with Qualcomm,
Speaker 10: and Apple really had no choice but to work with
Speaker 10: Qualcomm because if Apple wanted to move to five G,
Speaker 10: there really was no other game in town other than
Speaker 10: the chip maker from San Diego, And so that was
Speaker 10: really the start back in twenty eighteen when they started working.
Speaker 5: On this modem.
Speaker 10: Development ramped up around twenty twenty. They acquired Intel's modem
Speaker 10: group for about one billion dollars twenty nineteen to really
Speaker 10: jumpstart that development. But it's interesting because unlike the move
Speaker 10: to Apple in house processors in the Mac, unlike the
Speaker 10: move to Apple in house processors for earbuds, for smart watches,
Speaker 10: for set top boxes, the modem from Qualcom is actually
Speaker 10: best in class. At this point, You're not going to
Speaker 10: bring better performance to the table than Qualcomm, and if
Speaker 10: you do, this is not something that can be noticed
Speaker 10: by the consumer.
Speaker 9: So the bet here.
Speaker 10: Is that this is going to save costs and then
Speaker 10: maybe five years from now, over time, being able to
Speaker 10: shrink that modem down to an Apple sized chip to
Speaker 10: put it on the same motherboard and the same SoC
Speaker 10: The system on a chip is the existing Apple components.
Speaker 10: Maybe you can shrink down the internals of the phone
Speaker 10: to add other new features to create new form factors.
Speaker 10: So it's a mix of costs now and hopefully new
Speaker 10: designs later.
Speaker 4: Mak You also went back to the idea of a
Speaker 4: table top robot in this week's power On. Just explain
Speaker 4: that the basic design we don't have a visual right that.
Speaker 4: I think it's in base terms worth telling the Bloomberg
Speaker 4: Technology audience what it is they're planning to bring to us.
Speaker 10: So, Apple's next big thing is robotics, and the first
Speaker 10: robotics device you're going to see from Apple is going
Speaker 10: to be a tabletop robot. It's essentially a gigantic iPad
Speaker 10: screen connected to a robotic arm or a robotic conneck,
Speaker 10: and the display can move to follow your head movements.
Speaker 10: If I'm on a FaceTime call with someone and that
Speaker 10: other person begins speaking that's in the room with me,
Speaker 10: the display can know that it's them speaking and tilt
Speaker 10: towards them. If you are on a FaceTime call with
Speaker 10: someone else, and let's say that person on the other
Speaker 10: line is nodding their head or making various head movements,
Speaker 10: that screen will be able to follow the head movements
Speaker 10: of that other person. You'll be able to tell the
Speaker 10: device to look at you, and it will all turn
Speaker 10: towards you and so this is a robotics exercise. The
Speaker 10: company's aiming to get down to a price of around
Speaker 10: one thousand dollars. The big picture here is that Apple's
Speaker 10: trying a lot of new stuff, right, and I think
Speaker 10: one day we're going to be having more in depth
Speaker 10: discussions about mobile robots similar to the Amazon astro. I
Speaker 10: think the idea of Apple getting to humanoid robots is
Speaker 10: also a real possibility a decade from now.
Speaker 5: Blimberg's Mark Gumman terrific.
Speaker 3: It's tak crypto because Bitcoin and actually the wider crypto market,
Speaker 3: they're not saying some sharp losses this month, even as
Speaker 3: global stocks are pushed back towards record highs. Now Look,
Speaker 3: bitcoin has been falling roughly ten percent in the month
Speaker 3: of August, and with the same period though global stocks.
Speaker 3: If you look at the MSCI inex, it's up more
Speaker 3: than one percent, Gold is all time highs. Even the
Speaker 3: global bond gauge is up nearly two percent. So why
Speaker 3: the lagging lumotion? Ai Bassek is here for more. It's
Speaker 3: supplies side, right, This is a potential for government sales.
Speaker 7: There were a.
Speaker 11: Lot of overhangs into the summer. If you think about it.
Speaker 11: But the other problem here is what is the next catalyst.
Speaker 11: If you got about the beginning of the year that
Speaker 11: drove bitcoin to new record highs included that spot bitcoin ETF,
Speaker 11: and now you do see financial advisors at least thinking
Speaker 11: of or starting to adopt comfort and investing in those
Speaker 11: spot bitcoin ETFs.
Speaker 7: Maybe they'll buy the dip.
Speaker 11: Seriously, there has not been enough dip buyers here to
Speaker 11: bring us back to those record highs. We're floating below
Speaker 11: sixty thousand. Still, there are a few things going on
Speaker 11: when you talk about the supply side here. There was
Speaker 11: a news in recent days Arkham Intelligence finding that the
Speaker 11: US government has moved about six hundred million worth of
Speaker 11: confiscated bitcoin from Silk Road over to a coin base wallet. Now,
Speaker 11: the question is are they selling those bitcoin off or not.
Speaker 11: The question becomes especially interesting when you think about Donald
Speaker 11: Trump's proposal here to create a national Bitcoin.
Speaker 7: Reserve that would therefore be backed by confiscated bitcoin. Remember,
Speaker 7: the US.
Speaker 11: Has twelve billion worth, we're only talking about six hundred
Speaker 11: million more recently, the question is whether they're actually selling it.
Speaker 11: But yet, I will go back to this issue here
Speaker 11: of what is the next catalyst at what point, do
Speaker 11: people buy not sell?
Speaker 5: What would cause them too?
Speaker 4: Real Questionale this just bitcoin or the market broadly?
Speaker 11: The market broadly, you do have bitcoin and other assets.
Speaker 11: Top one hundred Digital assets recently dropped on August fifth
Speaker 11: to the worst level since November of twenty twenty two.
Speaker 7: All of the DNC gets started.
Speaker 11: By the way, there's a lot of questions about whether
Speaker 11: the Harris administration would be tough on bitcoin. So interesting days.
Speaker 3: Ahead such a PROTIONALI Bassett because that's exactly what we're
Speaker 3: talking next.
Speaker 7: The DNC in Chicago.
Speaker 12: This blom Meg Technology. Welcome back to blouem Meg Technology.
Speaker 12: I'm Caroline heid in New York and.
Speaker 5: I met Ludlow in San Francisco.
Speaker 3: Let's talk about the DNC end because it is kicking
Speaker 3: off as Kamala Harris is kind of riding a wave
Speaker 3: of momentum. Meanwhile, Republicans they're working to leverage that advantage
Speaker 3: with voters by attacking.
Speaker 7: Her new economic agenda.
Speaker 3: I want to discuss what to expect in this week,
Speaker 3: in particular, Kitty Lines is there. I'm interested Katie as
Speaker 3: we think about well from a tech perspective, with thinking
Speaker 3: about crypto and AI, but well broadly what are generally
Speaker 3: be waiting to hear from the DNC.
Speaker 13: Well, this is certainly going to be defined by energy
Speaker 13: and enthusiasm, as the Democratic Party really has been reinvigorated
Speaker 13: by the candidacy of Kamala Harris. As it was just
Speaker 13: four weeks ago that President Biden decided to no longer
Speaker 13: seek reelection and she became the Democratic nominee that is
Speaker 13: already official thanks to a virtual roll call that happened
Speaker 13: earlier this month. So really this week is all about
Speaker 13: ceremony and the pomp and the circumstance and really trying
Speaker 13: to unite the party around her.
Speaker 7: Now President Biden himself.
Speaker 13: Will be speaking this evening in a speech that may
Speaker 13: be part about his legacy but also pitching it forward
Speaker 13: to the kind of president he believes the person he
Speaker 13: chose as Vice President Kamala Harris could be. He will
Speaker 13: then be getting out of town, but we're going to have,
Speaker 13: of course, a number of other high profile Democrats speaking
Speaker 13: throughout the week, with Tim Walls, presidential nominee, speaking Wednesday,
Speaker 13: and then culminating in Harris's address on Thursday. The question
Speaker 13: will be how much that address really is about policy.
Speaker 13: We're starting to get more on policy from her. She
Speaker 13: of course, outlined her economic agenda last Friday in North Carolina.
Speaker 13: Already it is being met by criticism by Republicans, even
Speaker 13: some economists, and Donald Trump over this weekend was trying
Speaker 13: to characterize her as Comrade Kamalist, suggesting some of the policies,
Speaker 13: including when it comes to price gouging, could be seen
Speaker 13: as communists more so than capitalists. So certainly you're going
Speaker 13: to see those kind of attacks coming from the other
Speaker 13: side of the aisle this week, while the Democratic side
Speaker 13: of the isle is going to be here in Chicago
Speaker 13: trying to reinforce their candidate that does have some momentum
Speaker 13: coming into this is. New polling, including one from The
Speaker 13: Washington Post, ABC and IPSOS this weekend, shows her leading
Speaker 13: Trump nationally by four points, forty nine percent to forty
Speaker 13: five percent.
Speaker 4: Katie, the principle difference between what's happening this week in
Speaker 4: DNC and R and C is that we have the ticket.
Speaker 5: Right Harris Waltz.
Speaker 4: But all the areas of unknown or surprise that make
Speaker 4: each of the days exciting or something specifically to tune in.
Speaker 13: For, well, there always is room for surprise that I
Speaker 13: think we've come to learn that in this election cycle
Speaker 13: in particular, as many of us have been surprised on
Speaker 13: quite a few many occasions. What could be more uncertain
Speaker 13: about this convention in particular is the degree to which
Speaker 13: protests over the war in Gaza could be disruptive. We've
Speaker 13: already started to see them here in Chicago. There were
Speaker 13: some last night that were causing quite some issues with traffic,
Speaker 13: especially for me as I tried to get to the hotel,
Speaker 13: and there are more planned throughout the duration of the week.
Speaker 13: The question is going to be to what extent that
Speaker 13: remains outside of the actual convention itself, and to what
Speaker 13: extent may bleed into the actual United Center where the
Speaker 13: proceedings are taking place, how disrupted they would meet could be,
Speaker 13: whether or not there would be there could be any violence.
Speaker 13: We haven't had reports of that yet, but certainly that
Speaker 13: is something we're keeping a close eye on, as that
Speaker 13: is one of the very tangible divisions within this Democratic Party.
Speaker 13: While it has been able to really unite around Harris
Speaker 13: to a large extent, especially when we're thinking about party
Speaker 13: leadership sitting lawmakers, there does remain that deep division within
Speaker 13: the Democratic electorate itself, as evidenced by the fact that
Speaker 13: some delegates were showing up here in Chicago as uncommitted
Speaker 13: because many voters and states, including Michigan, decided to elect
Speaker 13: a vote for uncommitted or at the equivalent, over President
Speaker 13: Biden over protest of that ongoing war between Israel and
Speaker 13: Hamas kayleie.
Speaker 7: That's a key talking point.
Speaker 3: Are there any technology elements that we should be keeping
Speaker 3: eye on for audience in particular? I mean, we're always
Speaker 3: thinking about what the crypto viewpoint might be from a
Speaker 3: Harris ticket, but any other areas.
Speaker 13: H well, certainly there is an element here of questioning
Speaker 13: what kind of crypto policy Kamala Harris could adopt. There
Speaker 13: was a Crypto for Harris virtual event that happened just
Speaker 13: last week that even the Senate Majority Leader Chuck Schumer
Speaker 13: took part.
Speaker 7: And we've spoken with.
Speaker 13: A big crypto advocate in Congress, Congressman WYLEYE. Nicol of
Speaker 13: North Carolina, who has said he is actively involved in
Speaker 13: pushing the campaign to be more o, been to the
Speaker 13: innovation in the industry can offer. That has been the
Speaker 13: case under the Biden administration, but we have seen this
Speaker 13: campaign in general really embrace technology, especially social media we've
Speaker 13: seen a lot of those kind of viral meme aspects
Speaker 13: of this campaign showing up much more for the Harris
Speaker 13: ticket than the Trump Vance one, and I would note
Speaker 13: we're seeing that in the advice as well. The Harris
Speaker 13: campaign has annowed three hundred and seventy million dollars of
Speaker 13: advice between Labor Day and the election. Election two hundred
Speaker 13: million of that is digital advertising in particular, so really
Speaker 13: venturing into that realm beyond just your traditional TV ads.
Speaker 13: As for any other technology policy, we're going to be
Speaker 13: looking to hear more of that throughout the course of
Speaker 13: the week, but we could probably expect that the speech
Speaker 13: Harris will give on Thursday night is going to be
Speaker 13: much broader strokes than getting into really specific policy recommendations
Speaker 13: or platform.
Speaker 4: Most Katie Lions, another very busy week for you on
Speaker 4: the ground, and we'll tune in each day, Thank you
Speaker 4: very much. Now, the Democratic ticket is set to address
Speaker 4: a number of key themes. Kaylee went through some of
Speaker 4: them at the DNC this week. One of them is
Speaker 4: labor unions. From Apple and Amazon to Samsung and Tesla.
Speaker 4: Recent unionization efforts have been hitting the tech sector. I'm
Speaker 4: going to break it all down with Bloomberg Industry Group
Speaker 4: reporter Ian cole Gren. And actually a recent spark point
Speaker 4: probably was the complaint or enforcement complaint by the UAW
Speaker 4: in reaction to that Musk and Trump spaces. You know,
Speaker 4: that's the scene setter here, right, Ian, that this is
Speaker 4: a focus on both sides of this election race.
Speaker 14: It's certainly one of the big ones, and it is
Speaker 14: one of the tools that the UAW and unions as
Speaker 14: a whole are using to divide themselves from Trump and
Speaker 14: who they see as Trump allies like Elon Musk. This
Speaker 14: was certainly not an expected complaint, and it had the
Speaker 14: effect of really changing the Teamsters and some other middle
Speaker 14: of the road unions from being sort of ambivalent about
Speaker 14: Trump and maybe willing to entertain his side hear him
Speaker 14: a little bit, to being fully against Trump.
Speaker 3: Now what's interesting is that, well, Tesla's certainly Elon Musk
Speaker 3: not the only technology name that has seen movement for unionization,
Speaker 3: maybe pushed against it in some way. But I'm thinking
Speaker 3: what Apple store workers in Oklahoma City. They're given the
Speaker 3: union leader's permission to call a strike if talks don't
Speaker 3: go well. What ultimately has been technology sentiment towards unions, unionization,
Speaker 3: organized labor.
Speaker 14: Well, it's been a little bit mixed. Traditionally, the technology
Speaker 14: sector has not been in favor of unions, has been
Speaker 14: rather against unions in seeing them as an impediment to
Speaker 14: the kind of startup, move fast break things, innovate quickly
Speaker 14: culture that has defined Silicon Valley and its successes. But
Speaker 14: increasingly workers, as you noted, are turning to unions to
Speaker 14: solve some of the more top down kind of quality
Speaker 14: of life problems that workers started seeing in some of
Speaker 14: these businesses, especially as you've noted in Apple stores in
Speaker 14: the retail front that a really started in the pandemic
Speaker 14: when many workers who I've talked to and have spoken
Speaker 14: publicly felt like they weren't being listened to by their bosses.
Speaker 4: We set the scene in it's that we think this
Speaker 4: issue boarding will be discussed at the DNC. But is
Speaker 4: someone covering the beat. Do you have a real sort
Speaker 4: of sense of the Harris policy? Is there something codified
Speaker 4: you can say, Okay, this is what Harris's policy platform
Speaker 4: will be in this election race.
Speaker 14: Well, certainly there are plenty of open questions right now
Speaker 14: to see if Harris really will pick up the torch
Speaker 14: from Biden and being, as he described that, the most
Speaker 14: pro union president in history. Many unions agree with that sentiment,
Speaker 14: and it's notable that they really, unions, i mean really
Speaker 14: stuck with Biden until the very bitter end. There was
Speaker 14: not one major union that came out against Biden, even privately,
Speaker 14: as far as we know, told him.
Speaker 5: To drop out of the race.
Speaker 14: That said it. They were also very quick to back Harris,
Speaker 14: rallying around her as the next best choice. They noted
Speaker 14: that she shared a labor White House Labor task Force
Speaker 14: that Biden had convened. That's true. It's a little bit
Speaker 14: debatable how much that actually did for unions and how
Speaker 14: much of it is just for show. But they're sort
Speaker 14: of taking her at her best word right now that
Speaker 14: she is going to be as pro union as Biden was.
Speaker 14: Of course, one thing we're going to be watching closely
Speaker 14: is the constant tension between some of these big Silicon
Speaker 14: Valley donors who tend to give to Democrats and then
Speaker 14: this more organic worker organizing. The Democrats say they'refore on paper,
Speaker 14: but can conflict with some of their best interests in
Speaker 14: the moment.
Speaker 3: In Culgren putting it delicately, for US remag Industry Group.
Speaker 7: We thank you.
Speaker 3: Meanwhile, it's time been talking tech. First up Lime is
Speaker 3: entering the Japanese market.
Speaker 7: Look.
Speaker 3: It's the Uber backed scooter company and it's launching its
Speaker 3: services today in Tokyo with two hundred scooters and forty
Speaker 3: charging ports to San Francisco based startup of course, and
Speaker 3: it's entering a pretty growing market, putting itself against the
Speaker 3: likes of Tokyo based Loop, which controls ninety percent of
Speaker 3: the domestic market. Meanwhile, Elol Musk's X is going to.
Speaker 7: Close operations in Brazil.
Speaker 3: The announcement marks the latest step in a showdown between
Speaker 3: Musk and Brazil Supreme Court Justice, who is spearheading efforts
Speaker 3: to combat fake news hate speech. While operations in the
Speaker 3: country will be shutting down, though the service will remain available.
Speaker 3: And Africa's empty N Group posted its first loss since
Speaker 3: twenty sixteen, and the country's largest wireless carrier by revenue,
Speaker 3: has reported a loss of four hundred and fifty.
Speaker 7: Million dollars in the six months through June.
Speaker 3: This is as the evaluation of the Nigeria and NARRA
Speaker 3: crimped income. MTN has about seventy seven million customers in
Speaker 3: Nigeria and derives about a third of its earnings from
Speaker 3: the nation. It is time to discuss investing trends, but
Speaker 3: we're going to hone in on the gaming world, of course,
Speaker 3: following that use of Epic Games launching a new mobile
Speaker 3: storefront after four years, the legal tug of war with
Speaker 3: Apple and Google over their app store practices, joining us
Speaker 3: now with a deep dive Menlo Ventures partner Amy Wu
Speaker 3: who of course leads gaming consumer blockchain investments for the firm,
Speaker 3: And it's.
Speaker 7: Always great to have you on the shoot. So much,
Speaker 7: what did you make of it?
Speaker 3: I mean, after four long years, how much is Epic
Speaker 3: had to give back, like let go in terms of
Speaker 3: market share by taking on this battle.
Speaker 7: I mean, the casts are very large.
Speaker 1: In addition to the you know, hundreds of millions of
Speaker 1: dollars of legal fees, they also gave up mark ashare
Speaker 1: because in the last four years you saw, you know,
Speaker 1: Call of Duty mobile I think has something like two
Speaker 1: hundred and fifty million downloads, several billion dollars in revenue,
Speaker 1: and so it's really exciting I think for everybody, Tim Sweeney,
Speaker 1: the developer community, also their investors to see them back
Speaker 1: in the in the mobile platform, but they've still got
Speaker 1: long ways to go.
Speaker 3: I mean, you wrote to checks for them when you
Speaker 3: were at a previous VC lightspe benchres I believe that
Speaker 3: if they had been like a focus of yours, do
Speaker 3: you still think that this is the company that you
Speaker 3: should be riding a wave on.
Speaker 7: Is Fortnite's still dominant enough?
Speaker 3: Where else do you want to be sort of allocating
Speaker 3: to in this environment?
Speaker 14: Well?
Speaker 1: Right now, I think that you see Epic Games, they're
Speaker 1: very much trying to expand their audience, right with a
Speaker 1: launch of UEFN last year at GDC, they're really trying
Speaker 1: to expand beyond their young shooter audience into something more general,
Speaker 1: competing against roadblocks, and so I think those are.
Speaker 7: Really smart moves.
Speaker 1: You know, obviously Tim has been fighting the mobile battle
Speaker 1: for a while. I think it's exciting to see them
Speaker 1: come onto that platform, especially when they have games like
Speaker 1: Guys that are really conducive.
Speaker 7: To more of a mobile audience.
Speaker 1: And so I think that also in games, you know,
Speaker 1: we're looking at mobile there's been a little bit more
Speaker 1: emine activity in the mobile game sector. We're looking at
Speaker 1: the intersection of AI and games right now, some pretty
Speaker 1: exciting things have been happening. You know, Leonardo AI got
Speaker 1: acquired by by Canva recently. That's more in the tooling space.
Speaker 1: A lot of game des we're experimenting with using them,
Speaker 1: and so we are really actively investing in that space.
Speaker 4: Amy, It's great to have you back on the program.
Speaker 4: I mean, you make a really good point, which is
Speaker 4: on the developer side of the community. In our coverage,
Speaker 4: we kind of emphasize that this is about the consumer
Speaker 4: having options to access, But what does it mean for
Speaker 4: a marketplace for developers when there are more than one
Speaker 4: or two platforms in which you can access mobile games
Speaker 4: in particular?
Speaker 7: I think it.
Speaker 1: Actually I think, you know, I think Tim Sweeney is
Speaker 1: seen as a full hero to a lot of indie developers,
Speaker 1: and choice and choice of platforms to launch games into
Speaker 1: is just better for developers, right Having multiple competitors, they
Speaker 1: can you know, negotiate better pricing, et cetera. Before it's
Speaker 1: just Apples thirty percent you know fee app store, and
Speaker 1: so I think this is a very much positive. But
Speaker 1: I think, you know, Epic had to go through a
Speaker 1: lot of hoops just to get their their storefront launched
Speaker 1: in you know, currently EU, not the US yet, I
Speaker 1: think Android globally, and so again they're sort of at
Speaker 1: the forefront fighting this fight and it's going to be
Speaker 1: benefiting developers worldwide.
Speaker 4: Amy as you outline you were previously an investor in Epic,
Speaker 4: they have this goal or Tim has this goal one
Speaker 4: one hundred million new installs in.
Speaker 5: Quite a tight time period.
Speaker 4: Just reflecting on your knowledge of the company and that
Speaker 4: leadership team, like is this a win for them?
Speaker 5: Like how are they doing now?
Speaker 1: They're certainly putting a lot of capital at work. You know,
Speaker 1: they're privately held business, and so Tim can be a
Speaker 1: lot more aggressive. And you know, when you launched UEFN
Speaker 1: and their sort of user generated content marketplace, I would
Speaker 1: say they had the most advantageous payout of any so
Speaker 1: any platform, you know, better than Roadblocks at the time.
Speaker 1: And so that is again really great for developers, but
Speaker 1: I think that they have a long way to go
Speaker 1: in terms of future parody with roadblocks. Also, the just
Speaker 1: the discovery algorithms, right, because you have to remember the
Speaker 1: Epic community primarily like shooting games.
Speaker 7: And so to really expand their.
Speaker 1: Audience to a much more general audience has to be
Speaker 1: baked into their algorithms as well. In terms of discovery,
Speaker 1: and so they're working on all of that and I
Speaker 1: think developers are patiently waiting for it, but you know,
Speaker 1: the patient is finite patients fighting.
Speaker 3: What's interesting is you would saying how you're looking at
Speaker 3: the AI scene within gaming, and much has been said
Speaker 3: as to how ultimately we'll suddenly have you generated content
Speaker 3: so much more to be able to be built in,
Speaker 3: But I mean whether or not games will be building themselves,
Speaker 3: that's much more. You led the latest run in anthropic,
Speaker 3: How are you studying cee AI and gaming really start
Speaker 3: to lead to efficiencies or not?
Speaker 7: Is it still a long term bet?
Speaker 1: Yeah, my partner Metmorphy led them. Thus it's the largest
Speaker 1: for Menlo and we're really excited about So I think,
Speaker 1: you know, code generation is a pretty exciting application of
Speaker 1: generative AI lms, and so that could potentially be applied
Speaker 1: to game making as well. And I think the challenge,
Speaker 1: and I think we saw this with the blockchain cycle,
Speaker 1: is that ultimately consumers care less about the technology. They
Speaker 1: want to play something fun, and so we have to
Speaker 1: prove an AI needs to prove that it can not
Speaker 1: only generate code, but generate it in a way that's
Speaker 1: actually quite creative in something that consumers want to play.
Speaker 7: And I think that is still you know, proof is out.
Speaker 7: We haven't seen anything quite yet.
Speaker 1: There's a lot of really interesting attempts more and I
Speaker 1: would say low fidelity two D games, but you know,
Speaker 1: I am we're very actively looking at a lot of
Speaker 1: the teams that are trying to push that technology in
Speaker 1: the absolute sort of the farthest it can it can
Speaker 1: go in or to generate games.
Speaker 4: Amy, we just have fifteen seconds, just an area in
Speaker 4: gaming or adjacent you're really excited about right now.
Speaker 1: I am excited about user generated games, whether it is
Speaker 1: more social, also, you know, easier to build. You know,
Speaker 1: most roadblocks. Developers are semi professional developers, and so I
Speaker 1: think this trend around making it even easier is a
Speaker 1: really exciting one. It gives consumer more.
Speaker 5: Choice, creator economy. But for video games.
Speaker 4: Mellow Ventures partner Amy will great to have you back
Speaker 4: here on bloombog Technology.
Speaker 3: Let's get back to Fubo because we mentioned that shares
Speaker 3: were soaring and they still are. After Fox, Warner Brothers,
Speaker 3: Discovery and Disney, we're actually blocked by a judge from
Speaker 3: launching their streaming sports service just one week before its rollout.
Speaker 3: Bloomberg's Hannah Miller joins us for more, and it took
Speaker 3: investors of Fubo by surprise. They take you surprise, the
Speaker 3: fact that this is so close to the unveiling.
Speaker 5: Yes, it was a bit of a shark. You know.
Speaker 15: Venue has had a lot of buzz around it. They've
Speaker 15: been very opti mystic about it, a lot of excitement.
Speaker 15: So the fact that this is blocked so close to
Speaker 15: the launch, I mean, that's pretty crazy.
Speaker 4: The only question I guess is how much chance is
Speaker 4: there that the injunction kills Vinu altogether, that it just
Speaker 4: doesn't launch.
Speaker 15: Well, we know that Warner and Fox and they're going
Speaker 15: to appeal on this. They're arguing that, you know, they
Speaker 15: have a strong case that Fubo doesn't actually you know,
Speaker 15: add to the TV market that much, and that they're
Speaker 15: providing a skinnier option for customers to use. So we
Speaker 15: are waiting to see what happens. I think there you
Speaker 15: can't rule then you out yet.
Speaker 7: I mean, it's interesting.
Speaker 3: Laura Martin, we speak to her often on the show
Speaker 3: from Niedm and analyst saying the injunction thinks she thinks
Speaker 3: gives it as seventy percent chance of killing Venue. But interesting,
Speaker 3: She then says, look, maybe because a Turner WWBD having
Speaker 3: lost the NBA rights, maybe sort of Disney and Fox
Speaker 3: go it alone, or ESPN and Fox too. What ultimately
Speaker 3: is the fight against this? What are the grounds with
Speaker 3: which the lawyer's given this day for the time.
Speaker 15: Yeah, so you know a lot of this comes down
Speaker 15: to antitrust, you know, and making sure that there isn't
Speaker 15: a monopoly raising prices for consumers. And you know there
Speaker 15: are gaps here with the Venue product. You know, there
Speaker 15: are missing football games with the NBA rights being lost
Speaker 15: from Warner Brothers Discovery with a twenty five between twenty
Speaker 15: six season, there will be fewer basketball.
Speaker 7: Options for this service.
Speaker 15: So you could kind of see it both ways, that
Speaker 15: you know there is there could be a place for
Speaker 15: the skinnier bundle, or that it really could end demand
Speaker 15: for services like Fubo.
Speaker 4: We'll kind of real quick. We just have thirty seconds.
Speaker 4: But how is Venue supposed to work? It's number of
Speaker 4: companies in coalition.
Speaker 15: Yeah, so this is supposed to be a skinny bundle.
Speaker 15: This is supposed to provide an offering for people who
Speaker 15: are into cord cutting that they don't want to deal
Speaker 15: with cable that they want to jump on this. It's
Speaker 15: targeting a younger demographic, and this is supposed to be
Speaker 15: something that you could see offerings from all three of
Speaker 15: these players that you could jump to what you wanted,
Speaker 15: that you could tailor it and customize it to the.
Speaker 5: Sports that you like.
Speaker 15: Fuber was saying, Hey, we already do that. We already
Speaker 15: offer a ton of sports. So it'll be interesting to
Speaker 15: see what happens with the appeal.
Speaker 4: I just have so many streaming bundles for sports already.
Speaker 4: Bloomberg Sannah Miller, thank you very much.
Speaker 3: Exasperation that does it. With this edition of Bloomberg Technology.
Speaker 5: ED what a start to the week. Check out the podcast.
Speaker 4: You can find it on the terminal, on Apple, Spotify,
Speaker 4: and iHeart Online. From the team here in San Francisco,
Speaker 4: carrying the team in New York. This is Bloomberg Technology