WEBVTT - AI Backstop Debate, Musk’s $1 Trillion Pay Package 0:00:02.520 --> 0:00:13.440 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.480 --> 0:00:17.320 from coast to coast with Caroline Hide in New York 0:00:17.560 --> 0:00:19.560 and ever Low in San Francisco. 0:00:22.760 --> 0:00:24.520 This is Bloomberg Tech coming up. 0:00:24.600 --> 0:00:27.840 Open AI execs U turn and David Sachs says no 0:00:28.400 --> 0:00:31.280 on a federal backstop to fund AI infrastructure. 0:00:31.320 --> 0:00:35.800 Markets react, Plus Mosk's one trillion dollar compensation package gets 0:00:35.800 --> 0:00:39.080 approved by TESLRA investors seventy five percent of votes cast 0:00:39.120 --> 0:00:39.560 in favor. 0:00:39.600 --> 0:00:42.559 We dig into the bold new promises and we. 0:00:42.560 --> 0:00:45.040 Break down more tech earnings with the CEOs of a 0:00:45.159 --> 0:00:46.520 firm and draftings. 0:00:46.720 --> 0:00:49.720 Later this hour, we go to these markets, though in 0:00:49.800 --> 0:00:52.400 sell off mode ed on the day and on the week. 0:00:52.479 --> 0:00:54.440 Over the past five days, we've shed more than four 0:00:54.480 --> 0:00:57.280 percent in market capitalization. It is the worst weeks in 0:00:57.400 --> 0:00:58.800 April of the NASDAT. 0:00:58.440 --> 0:01:00.600 One hundred, and anxiety is. 0:01:00.600 --> 0:01:03.520 Really building when it comes to AI infrastructure and whether 0:01:03.520 --> 0:01:05.000 people have got the money you're digging into it. 0:01:05.760 --> 0:01:08.200 Yeah, here's a story that's played out driving markets. We 0:01:08.280 --> 0:01:12.080 begin with open AI and Wall streaks, anxiety that followed 0:01:12.120 --> 0:01:15.200 fresh comments about potential government financing in. 0:01:15.160 --> 0:01:15.880 The AI race. 0:01:15.920 --> 0:01:19.240 Speaking at The Wall Street Journal's Tech conference This Wednesday, 0:01:19.520 --> 0:01:24.120 Open Ai CFO Sarah Fryer called investors' attention after hinting 0:01:24.560 --> 0:01:28.080 at a potential government backstop for AI chip investment, to 0:01:28.160 --> 0:01:32.160 remark interpreted by some as Friar signaling open Ai had 0:01:32.240 --> 0:01:36.440 federal guarantees for the costly infrastructure behind large AI models. 0:01:36.640 --> 0:01:39.399 David Sachs the White House, AI and cryptos are seem 0:01:39.440 --> 0:01:42.800 to be paying attention and posted on X Thursday there 0:01:42.840 --> 0:01:45.680 will be no federal bailout for AI. The US has 0:01:45.720 --> 0:01:49.160 at least five major frontier model companies. If one fails, 0:01:49.520 --> 0:01:52.960 others will take its place. That in turn prompted open 0:01:53.000 --> 0:01:58.360 ai CEO Sam Altman to step in and clarify on X, writing, 0:01:58.600 --> 0:02:01.800 we do not have or want government guarantees for open 0:02:01.840 --> 0:02:05.680 ai data centers, emphasizing that the company is not seeking 0:02:05.880 --> 0:02:09.720 a federal safety net. Let's get the latest. Bloomberg's AI 0:02:09.840 --> 0:02:12.639 editor Seth Figgerman joins us, Now, where do we stand? 0:02:12.880 --> 0:02:16.240 This is a multi day story, markets paid attention to it. 0:02:16.560 --> 0:02:19.200 What's the net result? At least from open AI's perspective. 0:02:19.680 --> 0:02:23.160 Funny here, Ergre, is that really the intention behind Sarah 0:02:23.160 --> 0:02:26.160 Friar's overall remarks of that event was to kind of 0:02:26.240 --> 0:02:29.440 calm people's nerves about what has felt like growing anxiety 0:02:29.520 --> 0:02:33.560 this week on the markets about AI spending, and instead 0:02:33.600 --> 0:02:36.239 the takeaway was what felt like an off the cuff 0:02:36.280 --> 0:02:39.600 and vagrant mark that just heightened those concerns. I think 0:02:39.639 --> 0:02:42.200 where things currently stand as the company has repeated up 0:02:42.240 --> 0:02:45.160 and down that there's no discussions or plans for any 0:02:45.240 --> 0:02:48.399 kind of federal backstop. Instead, they're hinting at, well, maybe 0:02:48.440 --> 0:02:51.359 there's a role for government to invest in its own 0:02:51.400 --> 0:02:54.120 AI infrastructure that might somehow reduce some of the capital 0:02:54.120 --> 0:02:57.360 burdens here or other indirect ways in which government could 0:02:57.520 --> 0:03:01.160 help the wider market. But advice to say, the message 0:03:01.160 --> 0:03:03.520 that she intended to deliver seems to have been completely lost. 0:03:03.919 --> 0:03:07.240 Sam Altman went to great lengths to try and reverse 0:03:07.400 --> 0:03:10.000 or to correct in whatever way make clear, and talked 0:03:10.000 --> 0:03:13.480 about maybe chip manufacturing, if they went into fabrication of chips, 0:03:13.639 --> 0:03:15.359 that might be an area that they lean on for 0:03:15.560 --> 0:03:18.640 government input. But what's interesting is we then look at 0:03:18.639 --> 0:03:21.080 that piece from sam Altman saying that basically they've got 0:03:21.120 --> 0:03:24.679 one point four trillion dollars of commitments. This is where 0:03:24.680 --> 0:03:27.040 the market's trying to rab its head around how can 0:03:27.080 --> 0:03:29.440 they afford that, he's saying, they feel good about their 0:03:29.440 --> 0:03:30.720 prospects for revenue growth. 0:03:31.000 --> 0:03:32.880 They've big on the defense about this a little bit 0:03:32.960 --> 0:03:35.240 in recent days, including on a recent podcast where Altman's 0:03:35.240 --> 0:03:37.760 seemed taken off guard to even be asked that question. 0:03:37.840 --> 0:03:40.520 What he's trying to stress here is that our revenue 0:03:40.560 --> 0:03:42.960 is growing much faster than anyone has expected, you know, 0:03:43.000 --> 0:03:46.120 on pace for twenty billion and annualized run ray, and 0:03:46.160 --> 0:03:48.080 that we expect that these commitments over a seven or 0:03:48.080 --> 0:03:51.040 eight year time period are more than achievable based on 0:03:51.120 --> 0:03:53.760 that revenue growth that I think the overall market is 0:03:53.800 --> 0:03:57.320 looking at AI spending generally, Mega shares had their worst 0:03:57.320 --> 0:04:00.600 four day routes since chatgybut launched three years ago. You know, 0:04:00.680 --> 0:04:04.840 chipstocks are seeing slump right now on valuation concerns. Michael 0:04:04.880 --> 0:04:07.640 Burry is getting out there the one predicted the housing 0:04:08.120 --> 0:04:11.080 bubble and and basically pointing out to our graphic on 0:04:11.200 --> 0:04:14.560 uncircular investments that's center around opening eye across the industry 0:04:14.680 --> 0:04:17.240 and the markets. There's just really heighten concerned how achievable 0:04:17.360 --> 0:04:18.719 and sustainable the spending is. 0:04:19.240 --> 0:04:22.080 Megs sethimgan breaking all down. We thank you so much 0:04:22.120 --> 0:04:25.440 happy weekend. Now we're also watching shares of Nvidia. That's 0:04:25.480 --> 0:04:28.440 after its CEO Jensen Wang said that the company isn't 0:04:28.600 --> 0:04:31.120 in active discussions to sell its Blackwell AI chips to 0:04:31.200 --> 0:04:34.520 Chinese firms, waving off that speculation that it's trying to 0:04:34.560 --> 0:04:38.480 engineer a return to the world's largest chip maker market. Indeed, 0:04:38.640 --> 0:04:41.600 Quang explained that he merely intended to point out China's 0:04:41.640 --> 0:04:45.240 prowess in AI when he said, quote China will win 0:04:45.800 --> 0:04:47.919 the US China AI race ed. 0:04:49.120 --> 0:04:52.440 Let's look at shares of Tesla down almost four percent. 0:04:53.160 --> 0:04:57.039 More than seventy five percent of votes from shareholders were 0:04:57.080 --> 0:05:01.839 in favor approving the one trillion dollar compensation package for 0:05:01.880 --> 0:05:04.760 Elon Musk that is over ten years and has a 0:05:04.880 --> 0:05:08.520 very strong set of mandatory milestones he needs to achieve 0:05:08.800 --> 0:05:11.560 to unlock the comp but also the voting power that 0:05:11.600 --> 0:05:15.040 comes with it. Let's talk about that with Alexandra Mertz. 0:05:15.040 --> 0:05:18.440 She's the CEO of LLENF Investor Services, but also a 0:05:18.520 --> 0:05:22.359 Tesla shareholder who discusses her views about Tesla on social 0:05:22.400 --> 0:05:25.520 media under the handle Tesla boomer Mamma Mertz was present 0:05:26.000 --> 0:05:28.960 at the shareholder meeting last night. Was also acknowledged by 0:05:29.040 --> 0:05:32.440 other shareholders who are reading out a proposal for Tesla 0:05:32.480 --> 0:05:34.400 to invest in Xai, which we'll get to. 0:05:36.279 --> 0:05:36.919 Alexandra. 0:05:38.080 --> 0:05:40.599 This paves a way for Elon Musk to take his 0:05:40.680 --> 0:05:44.200 stake in Tesla to twenty five percent over the course 0:05:44.200 --> 0:05:46.960 of the ten years. Could you just explain what the 0:05:47.000 --> 0:05:50.680 sentiment was like last night into this morning about how 0:05:50.720 --> 0:05:54.560 comfortable investors feel handing over that control to Elon Musk 0:05:54.920 --> 0:05:56.840 and the belief that you do or do not have 0:05:56.920 --> 0:05:59.400 that he can hit the milestones that have been set 0:05:59.400 --> 0:05:59.960 for him by the. 0:06:02.000 --> 0:06:04.880 Oh I'm very confident that he will hit the milestones. 0:06:05.240 --> 0:06:08.920 Has shown us before what is possible. Nothing's never easy, 0:06:09.520 --> 0:06:12.800 but if you set goals to Elon, he's very competitive. 0:06:12.839 --> 0:06:18.279 He's obviously, in my views, the best executor there is 0:06:18.320 --> 0:06:19.360 on this planet, and. 0:06:19.320 --> 0:06:20.440 He will execute. 0:06:20.600 --> 0:06:23.080 So that's not the question. The question is whether we 0:06:23.120 --> 0:06:28.159 would get sufficient retail and institutional shareholder support, and we 0:06:28.200 --> 0:06:32.120 should it. Seventy five percent is astoundingly high. It is 0:06:32.279 --> 0:06:36.120 higher than the previous compensation packages votes and revotes in 0:06:36.120 --> 0:06:39.719 twenty eighteen and twenty twenty four. So this was a 0:06:39.880 --> 0:06:42.880 clear victory. I am so grateful for everybody who voted. 0:06:43.520 --> 0:06:45.599 I would like to see the twenty five percent that 0:06:45.720 --> 0:06:49.200 voted against it, because how can you be against this 0:06:49.360 --> 0:06:50.520 if you are a shareholder. 0:06:50.720 --> 0:06:51.760 But that's more of the topic. 0:06:53.200 --> 0:06:56.159 For example, we had the investment director of Calper's on 0:06:56.160 --> 0:07:00.400 the show yesterday. CalPERS voted no, and the rationale was 0:07:00.520 --> 0:07:03.960 that in aggregate they saw Elon Musk and board members 0:07:03.960 --> 0:07:07.479 already having sixteen percent of the company and. 0:07:07.600 --> 0:07:09.279 The issue of key man risk. 0:07:09.600 --> 0:07:12.480 So if Musk does get there right and achieves twenty 0:07:12.480 --> 0:07:16.280 five percent stake, what if he something happens to him, 0:07:16.680 --> 0:07:21.360 or what if something distracts him XAI SpaceX for example. 0:07:21.440 --> 0:07:24.000 That was the concern they had. Why don't you share 0:07:24.000 --> 0:07:24.520 the concern? 0:07:25.800 --> 0:07:28.600 Well, first of all, that's the same concern at sixteen 0:07:28.600 --> 0:07:32.240 percent or twenty five percent, right, So that Culpers argument 0:07:32.480 --> 0:07:36.679 is just nonexistent, even though it's a nice world word salad. 0:07:36.760 --> 0:07:38.520 There is no doubt in my mind that that's what 0:07:38.600 --> 0:07:43.040 they try to do. It's not an issue about whether 0:07:43.560 --> 0:07:44.880 he as a key man. 0:07:45.160 --> 0:07:45.760 Is a risk. 0:07:46.000 --> 0:07:48.280 To test that he is the same way he is 0:07:48.320 --> 0:07:51.000 the key person, he's also the key man risk. That 0:07:51.160 --> 0:07:55.120 is just a fact and actually part of the structure 0:07:55.280 --> 0:07:58.160 of this compensation plan addresses that as the last two 0:07:58.280 --> 0:08:01.920 tranches are linked to a succession plan, to a more 0:08:02.000 --> 0:08:04.680 formal succession plan, that what is currently in place. So 0:08:04.760 --> 0:08:06.680 sixteen or twenty five percent, that's not a question. But 0:08:06.720 --> 0:08:12.200 at twenty five percent, Elon is sufficiently strong to prevent 0:08:12.440 --> 0:08:17.280 activist shareholders trying to take over, bringing board members in 0:08:17.320 --> 0:08:20.040 that are not aligned with Tesla's mission. And I think 0:08:20.120 --> 0:08:22.840 that is the key point. Retail has always stood with 0:08:23.480 --> 0:08:27.400 Elon and has always been very active. Knows what this 0:08:27.520 --> 0:08:30.240 company is about, so that is not the concern. But 0:08:30.320 --> 0:08:34.679 it is institutional institutional funds that are in Tesla, despite 0:08:34.720 --> 0:08:36.760 the fact that they don't really like the company, don't 0:08:36.840 --> 0:08:40.520 understand the company, vote against interest of the company, and 0:08:40.880 --> 0:08:44.120 that can become stronger just by the pure mechanism of 0:08:44.160 --> 0:08:47.679 index funds of political activism. And he wants to make 0:08:47.720 --> 0:08:49.920 sure that that can be prevented. And he's right, and 0:08:49.960 --> 0:08:52.360 the fact of being in Texas helps a lot. But 0:08:52.559 --> 0:08:54.800 him getting to twenty five percent obviously. 0:08:54.400 --> 0:08:55.080 Is a good shield. 0:08:55.440 --> 0:08:59.240 But that's exactly the worry is that he does get 0:08:59.360 --> 0:09:03.559 the twenty five percent control and can fend off activism 0:09:03.679 --> 0:09:07.360 that might be in some way trying to course correct 0:09:07.520 --> 0:09:11.559 as others feel outside of Tesla. Why is that You're 0:09:11.600 --> 0:09:14.400 saying it's a word salad, But for many that's exactly 0:09:14.440 --> 0:09:18.160 the fear that he has control over what he calls 0:09:18.240 --> 0:09:19.120 a robot army. 0:09:20.559 --> 0:09:23.520 I understand that, I understand that there is a fear. 0:09:23.800 --> 0:09:28.520 But ask those activists what is their idea about Tesla? 0:09:28.600 --> 0:09:31.000 What is their idea about the better world? They never 0:09:31.080 --> 0:09:33.480 talk about that. They talk about the fact that they 0:09:33.520 --> 0:09:37.040 fear Elon is too powerful. They never talk about what 0:09:37.120 --> 0:09:40.520 Tesla is all about. I never hear a culpers or 0:09:41.400 --> 0:09:45.200 god forbid, a Klaus lewis Iss or the New York 0:09:45.240 --> 0:09:48.480 Controller talk about the mission of Tesla, talk about where 0:09:48.520 --> 0:09:52.880 Tesla is going. And you know, I rather, as a shareholder, 0:09:53.080 --> 0:09:56.400 have Elons have the keys to an army of bots 0:09:56.400 --> 0:09:59.400 than anybody else, including the four companies I just mentioned. 0:10:00.840 --> 0:10:02.280 We'll put that too coveries. 0:10:02.280 --> 0:10:04.760 I feel that he in many ways was trying to 0:10:04.840 --> 0:10:07.560 articulate that they are about the long term vision, whether 0:10:07.600 --> 0:10:11.440 it's about electric vehicles, whether it's about supporting the climate, 0:10:11.480 --> 0:10:14.240 whether it's about humanoid robots. They just don't think that 0:10:14.280 --> 0:10:20.040 perhaps another CEO couldn't achieve really significant phenomenal growth. 0:10:19.720 --> 0:10:20.440 For this business. 0:10:20.480 --> 0:10:23.560 Even if it wasn't Enon Musk, Why is he alone 0:10:24.160 --> 0:10:28.280 the only person who could meet these milestones and drive 0:10:28.600 --> 0:10:29.400 optimists to. 0:10:29.360 --> 0:10:30.640 Be on the moon on Mars? 0:10:30.679 --> 0:10:32.600 I mean that seemed to be the next area of growth. 0:10:32.640 --> 0:10:34.200 Was that what you wanted to hear that we're going 0:10:34.240 --> 0:10:37.320 to have optimists doing surgery but also eventually going to Mars. 0:10:38.080 --> 0:10:40.199 Yes, we should do. We should want to hear that. 0:10:40.280 --> 0:10:45.240 We also were absolutely excited thinking about chip manufacturing. I 0:10:45.240 --> 0:10:47.720 don't think that has really gotten through yet to the press, 0:10:47.840 --> 0:10:49.600 and I Holp Bloomberg is going to talk about it. 0:10:49.679 --> 0:10:53.320 If Tesla goes into chip manufacturing, can you imagine? So 0:10:53.640 --> 0:10:56.880 I would like to ask culpers, show me one other 0:10:57.000 --> 0:11:00.000 CEO would it even have for what Elon has accomplished? 0:11:00.520 --> 0:11:02.200 If you show me one where you would have the 0:11:02.240 --> 0:11:07.079 feeling that that person could do something even comparable. I 0:11:07.160 --> 0:11:09.040 am ready to sit down and discuss it with him, 0:11:09.040 --> 0:11:10.520 but we've got to wait for a long time. 0:11:11.600 --> 0:11:13.640 Alexandro I would push back a little bit because I 0:11:13.720 --> 0:11:17.440 wrote the story about Elon's comments from the Earning School 0:11:17.679 --> 0:11:21.800 about clarifying the Samsung TSMC relationship, and I sent the 0:11:21.800 --> 0:11:25.640 headline last night about his comments on chip manufacturing. So 0:11:25.640 --> 0:11:27.280 I'm going to look into it. I need to ask 0:11:27.280 --> 0:11:30.719 you about Xai. You were in the room and were 0:11:30.720 --> 0:11:33.880 waiting on the eight K. What appeared to happen was 0:11:33.920 --> 0:11:37.040 Brendan Arhart, the corporate secretary, say, there were more four 0:11:37.120 --> 0:11:40.839 votes than against, but a very large number of abstentions, 0:11:40.920 --> 0:11:45.160 and so they're basically reserving the right to wait, look 0:11:45.160 --> 0:11:48.120 at the non binding proposal and go back to it. 0:11:48.160 --> 0:11:51.160 Is that your understanding of where things stand, and also 0:11:51.240 --> 0:11:54.080 just your reaction to it because you were involved in 0:11:54.080 --> 0:11:56.240 the process of getting that proposal on the docket. 0:11:56.720 --> 0:11:59.959 Yes, yes, well, thank you very much. Yes, very good question. 0:12:00.120 --> 0:12:01.720 And as you point out, we haven't seen the eight 0:12:01.800 --> 0:12:04.000 K yet, so I don't have the underlying numbers, but 0:12:04.080 --> 0:12:09.559 I know exactly what happened. The's recommendation was neutral. They 0:12:09.559 --> 0:12:14.160 did not give a recommendation. Lots of retail shareholders just 0:12:14.360 --> 0:12:18.000 follow blindly the board's recommendation. So by going after the 0:12:18.040 --> 0:12:22.080 board's recommendation instead of voting none, they abstained. That is 0:12:22.120 --> 0:12:24.800 the logical way, and that's actually how it is automated. 0:12:25.080 --> 0:12:27.640 We had this issue with a Norwegian bank who gave 0:12:27.679 --> 0:12:31.720 their shareholders only a certain limited number of options to vote, 0:12:31.800 --> 0:12:35.160 and then the shareholders from Norway, which are very numerous interests, 0:12:35.200 --> 0:12:37.760 I could not vote for question six. They were abstaining. 0:12:38.240 --> 0:12:42.280 So abstaining was also just a consequence of the way 0:12:42.520 --> 0:12:45.160 the proxy was laid out, and there was no better choice. 0:12:45.200 --> 0:12:47.600 It was a bad choice to not be able to 0:12:47.600 --> 0:12:49.960 give a guidance, but there was another choice. Because what 0:12:50.080 --> 0:12:52.560 the board is trying to do here, and we have 0:12:52.600 --> 0:12:56.000 to understand why that is, is to stay out of 0:12:56.040 --> 0:12:59.079 it until they get a clear mission from the shareholders. 0:13:00.040 --> 0:13:01.600 Why are they doing that well, because it is a 0:13:01.640 --> 0:13:05.080 conflicted situation. Elon is the key man in both Xai 0:13:05.120 --> 0:13:08.680 and Tesla, and as Solar City has shown us, it 0:13:08.800 --> 0:13:12.800 is always difficult to invest from one company A into 0:13:12.800 --> 0:13:14.920 a company B that are both led by the same 0:13:15.120 --> 0:13:17.320 by the same key person. So the board tries to 0:13:17.520 --> 0:13:20.240 stay out of it until there is a clear mission. 0:13:20.240 --> 0:13:22.440 Now we have to see the eight K numbers to 0:13:22.559 --> 0:13:25.800 understand whether this is now a clear call from shareholders 0:13:25.840 --> 0:13:28.320 to do it. If there were so many stains, it 0:13:28.360 --> 0:13:30.839 may not be. But you also have to know that 0:13:30.880 --> 0:13:35.199 this shareholder proposal number seven was always only advisory. It 0:13:35.240 --> 0:13:39.160 was never that this vote would have been an automatic investment. 0:13:39.679 --> 0:13:42.439 If the board now convinced that they want to invest, 0:13:42.520 --> 0:13:45.760 we will certainly have another shareholder vote on the exact 0:13:45.800 --> 0:13:48.640 proposal of investment, not just on the general idea. 0:13:49.200 --> 0:13:52.160 Pushing us forward and with great energy after what was 0:13:52.320 --> 0:13:55.640 a pretty extraordinary day the annual General Meeting yesterday. You 0:13:55.679 --> 0:13:58.480 were there, We saw all the dancing. Alexandra maz We 0:13:58.559 --> 0:14:00.840 love catching up with you. Thank you, a shareholder known 0:14:00.880 --> 0:14:01.760 non social. 0:14:01.720 --> 0:14:02.800 As Tesla Booma Mamma. 0:14:03.480 --> 0:14:07.600 Now coming up, Grand Theft Auto six, it hits another 0:14:07.679 --> 0:14:10.080 bump in the road. We'll discuss why the latest title 0:14:10.080 --> 0:14:12.880 in the popular video game franchise is being delayed again. 0:14:13.480 --> 0:14:14.520 This is a Bloomberg Tech. 0:14:21.360 --> 0:14:24.760 Srees of Take two having their worst day since February 0:14:24.800 --> 0:14:28.360 twenty twenty four, down almost eight percent. Yesterday, the video 0:14:28.360 --> 0:14:30.960 game publisher pushed back the release of Grand Theft Auto 0:14:31.080 --> 0:14:34.760 Six again until November twenty twenty six. Let's walk through 0:14:34.760 --> 0:14:37.880 this of Bluebog's games reporter Jason Schreier. Basically, it's going 0:14:37.960 --> 0:14:40.880 to be a year late. Now, Why this second pushback? 0:14:40.920 --> 0:14:42.040 What's going on with Rock Start? 0:14:43.440 --> 0:14:43.680 Yeah? 0:14:43.720 --> 0:14:46.200 I mean video games are complicated. To make this is 0:14:46.480 --> 0:14:48.280 going to be one of the biggest video games of 0:14:48.320 --> 0:14:53.440 all time, will probably be the best selling entertainment product 0:14:53.640 --> 0:14:56.280 of all time, and so the pressure is very high 0:14:56.400 --> 0:14:58.920 Rockstar and take two. They want this game to be 0:14:59.040 --> 0:15:02.800 as perfect as part. They wanted to hit ninety five 0:15:03.000 --> 0:15:07.600 plus in Metacritic, that's the review score aggregator. And yeah, 0:15:07.760 --> 0:15:08.440 in these games the. 0:15:08.600 --> 0:15:12.120 Time I get that, you know, wanting to hit ninety 0:15:12.120 --> 0:15:14.800 five plus on Metacritic. What you just said about it 0:15:14.880 --> 0:15:20.400 probably being the biggest entertainment title to sell of all time, 0:15:20.960 --> 0:15:24.760 go back to GTA five and explain the data that 0:15:24.880 --> 0:15:27.720 tells us this might be worth waiting for. From Take 0:15:27.760 --> 0:15:29.920 Two's perspective, they want to get this right. From a 0:15:29.960 --> 0:15:31.040 sales point of view. 0:15:32.160 --> 0:15:35.040 Yeah, there's a simple number here, which is that GTA five, 0:15:35.120 --> 0:15:36.880 the last game in the series, which was released in 0:15:36.920 --> 0:15:42.040 twenty thirteen, has sold two hundred and twenty million units, 0:15:42.240 --> 0:15:45.080 which I mean, that's more. This one game alone has 0:15:45.120 --> 0:15:49.920 sold more than most franchises Final Fantasy Assassin's Creed. This 0:15:50.040 --> 0:15:52.600 makes it the second best selling game of all time, 0:15:52.760 --> 0:15:56.120 only only second to Minecraft, which was released on phone. 0:15:56.200 --> 0:15:58.760 So that's kind of a different a different playing field. 0:15:58.880 --> 0:16:00.840 So yeah, I mean, the sixth are very high. And 0:16:00.920 --> 0:16:05.000 again I think that people tend to underestimate how difficult 0:16:05.120 --> 0:16:08.080 it is to make games, especially a game as big 0:16:08.120 --> 0:16:13.160 and ambitions and technologically impressive as this one. I mean, 0:16:13.200 --> 0:16:14.520 we've seen the trailers, We've seen what. 0:16:14.480 --> 0:16:15.000 It looks like. 0:16:15.080 --> 0:16:17.280 It looks more realistic than any game we've ever seen. 0:16:17.320 --> 0:16:20.200 It's going to have a huge open world. The people 0:16:20.200 --> 0:16:22.280 at Rucks are just are still working on it, still 0:16:22.320 --> 0:16:25.320 making new stuff for it, still building this world and 0:16:25.400 --> 0:16:29.440 fixing bugs and ed. You know well that games like 0:16:29.520 --> 0:16:32.560 Cyberpunk have come out in recent years and needed more 0:16:32.600 --> 0:16:34.280 time in the oven and came out too early, and 0:16:34.320 --> 0:16:37.120 that is just disastrous for the companies involved. 0:16:36.800 --> 0:16:40.680 City and they needed patch after patch. But I still 0:16:40.760 --> 0:16:42.920 went back and played it from the start after the patch. 0:16:43.120 --> 0:16:46.760 Bloombergs Jason Schreyer, thank you very much. Okay, Sticking with gaming, 0:16:46.760 --> 0:16:50.040 A quick update. In the Google versus Epic Game case, 0:16:50.040 --> 0:16:54.000 a federal judge is withholding approval of Google's anti trust 0:16:54.040 --> 0:16:56.800 settlement with Epic Games. The company says it will improve 0:16:57.080 --> 0:17:00.760 the distribution and monetization of apps on Android foes, but 0:17:00.880 --> 0:17:04.280 US District Judge James Donato says he wants to look 0:17:04.320 --> 0:17:07.080 closer at the terms of a deal first to make 0:17:07.119 --> 0:17:10.320 sure it benefits consumers and boosts competition. 0:17:10.480 --> 0:17:10.680 Caro. 0:17:11.280 --> 0:17:13.440 Meanwhile, we've got a lot still to digest. 0:17:13.600 --> 0:17:16.080 We speak with a firm holding CEO Max Levchin on 0:17:16.520 --> 0:17:17.720 the lates's earnings results. 0:17:17.840 --> 0:17:18.720 That's a bit big tech. 0:17:30.520 --> 0:17:32.959 Shares of a firm off session highs up about five 0:17:33.040 --> 0:17:35.600 percent at one point in the session up almost twelve percent. 0:17:35.640 --> 0:17:38.840 The company posting a first quarter earning speed, But really 0:17:38.880 --> 0:17:41.040 the focus is on it raising its twenty twenty six 0:17:41.160 --> 0:17:44.600 forecast for gross merchandise volume, but it sets us up 0:17:44.640 --> 0:17:48.119 for an incredible fiscal twenty six. Joining us on set 0:17:48.400 --> 0:17:52.879 is Max Levchin at firm CEO. There's a lot of emphasis, 0:17:52.920 --> 0:17:56.479 at least from Bloomberg Intelligence in house on card and 0:17:56.520 --> 0:17:59.880 that driving volumes. But what we've learned across this early 0:18:00.160 --> 0:18:03.160 period in your domain is it's worth spending a minute 0:18:03.200 --> 0:18:06.439 on the underlying behaviors of your consumers that drove this 0:18:06.520 --> 0:18:07.240 growth in the quarter. 0:18:07.440 --> 0:18:12.200 What are you seeing so despite the vibe session we're 0:18:12.200 --> 0:18:14.800 seeing in a market today in the last few days, 0:18:15.320 --> 0:18:18.359 a firm's consumer is really healthy. They're shopping, they're buying, 0:18:18.440 --> 0:18:22.560 they're paying their bills. They're energized by the upcoming holidays. 0:18:22.640 --> 0:18:26.360 I think, frankly, the rumors of the American consumer's death 0:18:26.400 --> 0:18:27.359 are greatly exaggerated. 0:18:27.560 --> 0:18:30.800 It's interesting because, like different segments of the technology sector 0:18:30.840 --> 0:18:34.120 tell different stories right now, is there a specific product 0:18:34.160 --> 0:18:38.040 category or method of spending that is is demonstrating that 0:18:38.080 --> 0:18:38.720 more than others. 0:18:39.600 --> 0:18:41.720 I think we are quite unique in the sense a 0:18:41.840 --> 0:18:45.399 firm's brand A promise really is use us when it 0:18:45.440 --> 0:18:48.840 matters to you, because you'll have total control and great 0:18:48.840 --> 0:18:52.960 degree of transparency. And as the outside pressures, you know, 0:18:53.000 --> 0:18:56.119 even the stories you read wagh people down, it's easy 0:18:56.160 --> 0:18:57.800 to say, you know what Affirm is at least one 0:18:57.840 --> 0:19:00.919 thing that's going to keep me clear and in good control. 0:19:00.960 --> 0:19:03.200 And so we think people are coming to us a 0:19:03.240 --> 0:19:06.800 little bit more. Certainly, we saw great demand for our 0:19:06.920 --> 0:19:10.880 recent zero day promotion, but you know, I think so far, 0:19:10.960 --> 0:19:13.119 so good, at least in the Affirm consumer world. 0:19:13.320 --> 0:19:16.240 The funny thing is max sometimes the market likes to 0:19:16.280 --> 0:19:19.920 see use of Affirm or maybe more standard by now 0:19:19.920 --> 0:19:22.359 pay later offerings as the VIBE session. 0:19:22.840 --> 0:19:23.639 Is that not the case? 0:19:24.920 --> 0:19:28.000 You know, we have twenty four more than sway from 0:19:28.000 --> 0:19:30.080 a million active consumers last quarter. At this point, it's 0:19:30.119 --> 0:19:32.560 really dangerous to just say, oh, the affirm consumer is 0:19:32.600 --> 0:19:34.760 doing X or Y. We have quite a number of segments. 0:19:35.160 --> 0:19:38.480 Folks that are using our zero pcent promotions are typically 0:19:38.600 --> 0:19:42.600 leaning into just frankly, saving money, getting a great deal. 0:19:42.920 --> 0:19:46.040 Folks that favor longer terms to repay care a lot 0:19:46.119 --> 0:19:49.680 less about total costs, very much care about individual calf flow, 0:19:49.760 --> 0:19:52.080 and so depending on sort of which segment you look at, 0:19:52.200 --> 0:19:54.800 you'll see a slightly different behavior. I think the unifying 0:19:54.840 --> 0:19:58.159 factor is they're all getting a really clear deal. There 0:19:58.160 --> 0:20:00.440 are no late fees, there's no gimmis, there's no gotchas, 0:20:00.440 --> 0:20:01.040 and that that's. 0:20:00.880 --> 0:20:02.760 The way they keep coming back to us and why 0:20:02.840 --> 0:20:05.600 you keep seeing growth merchandise volumes going up and to 0:20:05.680 --> 0:20:08.359 the right. What's interesting is your partnership model and it 0:20:08.400 --> 0:20:10.600 really works what Amazon, Shopify, Apple, Costco. 0:20:10.920 --> 0:20:12.680 Where else do the partnerships make sense? 0:20:12.760 --> 0:20:18.000 Max, you know, to be honest, everywhere. We just announced 0:20:18.000 --> 0:20:21.520 a really strong push into services. So for a long 0:20:21.600 --> 0:20:23.560 time you would think of buying out palliator as a 0:20:23.600 --> 0:20:25.959 thing you buy and pay over time, people buy more 0:20:26.000 --> 0:20:30.080 than things. They remodel their kitchens, they refurbish various parts 0:20:30.080 --> 0:20:32.320 of their house and which announced the great partnership with 0:20:32.359 --> 0:20:35.240 Service Titan are a variety of other platforms, so we 0:20:35.720 --> 0:20:40.120 partner very widely because this model really works for any purchase, 0:20:40.160 --> 0:20:41.840 you know, anything from a couple hundred dollars all the 0:20:41.880 --> 0:20:42.959 way out of two thousands. 0:20:43.400 --> 0:20:45.720 What about you leaning into the moment? 0:20:45.880 --> 0:20:48.280 There is a lot of competition and smaller scale, and 0:20:48.359 --> 0:20:51.040 many times you stand out because they're more dependent on 0:20:51.119 --> 0:20:52.640 late fees and other such charges. 0:20:53.240 --> 0:20:54.879 Would you do any m and A? Is this the 0:20:54.960 --> 0:20:56.199