1
00:00:02,480 --> 00:00:14,480
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live

2
00:00:14,560 --> 00:00:18,279
Speaker 1: from the heart of Silicon Valley with Ed Lavow in

3
00:00:18,480 --> 00:00:19,320
Speaker 1: San Francisco.

4
00:00:22,079 --> 00:00:23,599
Speaker 2: This is Bloomberg Tech coming up.

5
00:00:23,680 --> 00:00:27,160
Speaker 3: Open AI may hold off on an IPO until next year.

6
00:00:27,440 --> 00:00:30,480
Speaker 3: The new sending shares of SoftBank falling the most since

7
00:00:30,520 --> 00:00:34,120
Speaker 3: August twenty twenty four, plus Global tech stocks drop after

8
00:00:34,200 --> 00:00:38,080
Speaker 3: Apple's hardware price hikes from a memory crunch to dampened

9
00:00:38,200 --> 00:00:39,120
Speaker 3: consumer demand.

10
00:00:39,560 --> 00:00:41,800
Speaker 2: Is the iPhone next, and.

11
00:00:41,800 --> 00:00:44,479
Speaker 3: SpaceX's twenty five billion dollar bond sale is off to

12
00:00:44,520 --> 00:00:48,960
Speaker 3: a rocky start crack show as paper losses mount. It

13
00:00:49,040 --> 00:00:52,760
Speaker 3: has been a bruising week for the AI trade, and

14
00:00:52,920 --> 00:00:55,480
Speaker 3: memory has been at the heart of it. This Friday,

15
00:00:55,560 --> 00:00:59,400
Speaker 3: Apple is rebounding, having dropped the most in sixteen months

16
00:00:59,400 --> 00:01:04,360
Speaker 3: on Thursday because it raised prices across hardware excluding the iPhone.

17
00:01:04,400 --> 00:01:07,920
Speaker 3: In part that is because of higher memory prices. Micron

18
00:01:08,000 --> 00:01:11,640
Speaker 3: is down significantly, but it surge Thursday because it's benefiting

19
00:01:11,640 --> 00:01:15,479
Speaker 3: from such tight supply. Generally speaking, chip stocks are down,

20
00:01:15,680 --> 00:01:18,520
Speaker 3: but overnight in Asia there was basically a change of

21
00:01:18,560 --> 00:01:21,480
Speaker 3: perspective in the market. It went from euphoria from those

22
00:01:21,560 --> 00:01:24,360
Speaker 3: selling memory chips for the idea that those buying them

23
00:01:24,360 --> 00:01:27,240
Speaker 3: are under pressure and that demand might be dampened in

24
00:01:27,240 --> 00:01:29,440
Speaker 3: the end. You see that in Skhi, Nix and Samsung.

25
00:01:29,520 --> 00:01:31,520
Speaker 3: We're going to go deep on that story later in

26
00:01:31,560 --> 00:01:35,200
Speaker 3: the program. The big news story open Ai. Bloomberg reporting

27
00:01:35,480 --> 00:01:37,880
Speaker 3: open Ai is looking at holding off until next year

28
00:01:38,160 --> 00:01:41,120
Speaker 3: for an IPO according to sources. That's some shares of

29
00:01:41,160 --> 00:01:44,920
Speaker 3: SoftBank overnight in Japan and some disappointment seems reflected in

30
00:01:44,959 --> 00:01:48,200
Speaker 3: the tech sector in today's trade. It's a bit circular

31
00:01:48,400 --> 00:01:52,760
Speaker 3: because Bloomberg reports current market conditions are one factor behind

32
00:01:52,800 --> 00:01:56,000
Speaker 3: open Ai being in no rush. Bloomberg's baby Lipschaltz, who

33
00:01:56,040 --> 00:01:59,080
Speaker 3: leads our IPO coverage, is with us. Look, I think

34
00:01:59,160 --> 00:02:01,320
Speaker 3: open Ai were pretty clear on June eighth when they

35
00:02:01,600 --> 00:02:04,600
Speaker 3: disclose that confidential filing that it would be a while

36
00:02:04,680 --> 00:02:07,600
Speaker 3: anyway just bring us up to speed on what their

37
00:02:07,680 --> 00:02:10,040
Speaker 3: thinking is and what we've reported when you.

38
00:02:10,000 --> 00:02:11,120
Speaker 2: Look back at that filing.

39
00:02:11,160 --> 00:02:14,079
Speaker 4: To your point, they essentially even at some of the

40
00:02:14,200 --> 00:02:16,960
Speaker 4: verbiage coming from Sam Moultman himself, looking at the next

41
00:02:17,040 --> 00:02:20,120
Speaker 4: calendar year, which obviously includes one queue of next year

42
00:02:20,280 --> 00:02:21,760
Speaker 4: as well as two que of next year. As you

43
00:02:21,800 --> 00:02:24,480
Speaker 4: had reported, in the just a few minutes ago ed

44
00:02:24,720 --> 00:02:27,200
Speaker 4: When you look at the expectations around open Ai, it

45
00:02:27,240 --> 00:02:30,400
Speaker 4: does seem like they're willing to concede too anthroopic going

46
00:02:30,440 --> 00:02:33,360
Speaker 4: first obviously from the anthropic camp, that means setting the tone,

47
00:02:33,360 --> 00:02:37,239
Speaker 4: setting the total addressable market, and setting evaluation expectations. The

48
00:02:37,280 --> 00:02:40,280
Speaker 4: big question for open Ai, though, still centers around what

49
00:02:40,360 --> 00:02:43,200
Speaker 4: their story is. Can they have confidence in some of

50
00:02:43,240 --> 00:02:46,799
Speaker 4: these contracts and some of their obligations in the long term. Obviously,

51
00:02:46,840 --> 00:02:49,720
Speaker 4: moving from say late four q to early one queue

52
00:02:49,760 --> 00:02:52,160
Speaker 4: is not a big deal, though it is a sign

53
00:02:52,240 --> 00:02:52,680
Speaker 4: of what.

54
00:02:52,639 --> 00:02:53,560
Speaker 2: Could lie ahead.

55
00:02:53,800 --> 00:02:56,280
Speaker 4: As we look at these meg IPOs. In the wake

56
00:02:56,320 --> 00:02:59,359
Speaker 4: of SpaceX again a roaring success day one and day two,

57
00:02:59,680 --> 00:03:02,160
Speaker 4: we've seen shares come back to earth, trading around where

58
00:03:02,160 --> 00:03:05,880
Speaker 4: they opened in the company's debut, still above the IPO price,

59
00:03:06,040 --> 00:03:08,920
Speaker 4: but still leaving some retail investors who chase the stock

60
00:03:09,040 --> 00:03:11,160
Speaker 4: in the red. The big question going forward, as you

61
00:03:11,200 --> 00:03:13,920
Speaker 4: mentioned with things like sk Heinix, is what does the

62
00:03:13,919 --> 00:03:16,679
Speaker 4: market look like months from now when these companies look

63
00:03:16,720 --> 00:03:17,960
Speaker 4: to tap the market.

64
00:03:18,200 --> 00:03:19,600
Speaker 3: The way it was related to me is like, even

65
00:03:19,639 --> 00:03:22,320
Speaker 3: if anthropic goes first, like that's not necessarily a negative

66
00:03:22,400 --> 00:03:24,680
Speaker 3: open Ai. They can sit back and look how that goes.

67
00:03:25,040 --> 00:03:28,120
Speaker 3: As one perspective, we're showing shares of Goldman Sacks and

68
00:03:28,120 --> 00:03:32,400
Speaker 3: Morgan Stanley down pretty significantly, almost four percent each. Remind

69
00:03:32,480 --> 00:03:35,280
Speaker 3: us the reporting that we've done on those banks involvement

70
00:03:35,680 --> 00:03:38,360
Speaker 3: in getting open Ai and Anthropic ready for a listing.

71
00:03:38,520 --> 00:03:40,640
Speaker 4: Yeah, we've reported that both are leading the charge on

72
00:03:40,720 --> 00:03:44,200
Speaker 4: both deals, so that would likely bring a big payday. Again,

73
00:03:44,440 --> 00:03:48,600
Speaker 4: fees weren't that high for the bankers leading the space

74
00:03:48,720 --> 00:03:51,160
Speaker 4: xipl But the big question to that point ed becomes

75
00:03:51,280 --> 00:03:54,760
Speaker 4: a debate around do we see Anthropic in late three

76
00:03:54,880 --> 00:03:57,320
Speaker 4: Q early four Q. What does that mean for Goldman

77
00:03:57,400 --> 00:04:00,880
Speaker 4: Sachs and Morgan Stanley, especially when people I've been excited

78
00:04:01,080 --> 00:04:03,560
Speaker 4: about both of these deals coming to market and what

79
00:04:03,600 --> 00:04:06,200
Speaker 4: that could mean broader. These are two companies that are

80
00:04:06,200 --> 00:04:08,760
Speaker 4: going to need to raise a lot of money to

81
00:04:08,880 --> 00:04:12,880
Speaker 4: continue to chase their dream of dominating the artificial intelligence boom.

82
00:04:12,920 --> 00:04:15,840
Speaker 4: So it's not just IPO proceeds, it's not just fees

83
00:04:15,880 --> 00:04:18,760
Speaker 4: from that potentially for open Ai, a Anthropic for the

84
00:04:18,839 --> 00:04:20,920
Speaker 4: likes of a Morgan Stanley and the Goldman Sachs, it's

85
00:04:20,960 --> 00:04:23,919
Speaker 4: what levers can they pull for raising cash through equity

86
00:04:23,960 --> 00:04:26,680
Speaker 4: sales through bonds in the public market, and those are

87
00:04:26,680 --> 00:04:29,560
Speaker 4: two things that you need public equities to be trading

88
00:04:29,760 --> 00:04:30,880
Speaker 4: to actually be able to tap.

89
00:04:31,880 --> 00:04:34,839
Speaker 3: I go back very quickly to open AI's dounate statement

90
00:04:35,040 --> 00:04:37,400
Speaker 3: about why it's going to take a while for them

91
00:04:37,440 --> 00:04:40,520
Speaker 3: to go public because there's a benefit to staying private.

92
00:04:40,560 --> 00:04:43,880
Speaker 3: There's things that they want to do. But clearly and

93
00:04:43,920 --> 00:04:47,800
Speaker 3: perther reporting, they will be looking at current market conditions,

94
00:04:48,240 --> 00:04:51,839
Speaker 3: just like beat wide covering the IPO be when you

95
00:04:51,839 --> 00:04:54,599
Speaker 3: have a week like this with so much volatility, do

96
00:04:54,680 --> 00:04:58,040
Speaker 3: the bankers just be like, let's take a minute here

97
00:04:58,080 --> 00:04:59,560
Speaker 3: and see how the world shakes out.

98
00:05:00,120 --> 00:05:03,520
Speaker 4: That's the most interesting part around the likes of an

99
00:05:03,520 --> 00:05:06,640
Speaker 4: open AI. They wouldn't really be chasing to go public

100
00:05:06,640 --> 00:05:08,680
Speaker 4: for a number of months. So as much as you

101
00:05:08,720 --> 00:05:11,560
Speaker 4: can point to the volatility of this week, it doesn't

102
00:05:11,600 --> 00:05:14,320
Speaker 4: really matter in the grand scheme unless there's some kind

103
00:05:14,320 --> 00:05:17,160
Speaker 4: of dire concern of what the markets would look like

104
00:05:17,360 --> 00:05:19,640
Speaker 4: come September, October and into the end.

105
00:05:19,600 --> 00:05:20,000
Speaker 2: Of the year.

106
00:05:20,000 --> 00:05:22,039
Speaker 4: We normally when we talk to bankers they point to

107
00:05:22,040 --> 00:05:24,680
Speaker 4: market conditions as a reason to hold off on launching

108
00:05:24,680 --> 00:05:25,719
Speaker 4: and pricing IPOs.

109
00:05:25,760 --> 00:05:27,039
Speaker 2: That's more in the immediate term.

110
00:05:27,120 --> 00:05:29,680
Speaker 4: It's also a very kind of easy excuse to say,

111
00:05:30,040 --> 00:05:32,040
Speaker 4: you know, investors don't want to take on new risk.

112
00:05:32,120 --> 00:05:34,119
Speaker 4: But as you had mentioned at the top of the show,

113
00:05:34,440 --> 00:05:36,960
Speaker 4: we've been watching these markets soar and then pull back.

114
00:05:37,000 --> 00:05:39,719
Speaker 4: If you look at anything in the chip space, they're

115
00:05:39,760 --> 00:05:42,480
Speaker 4: up about ninety percent on the socks. So broadly speaking,

116
00:05:42,480 --> 00:05:44,480
Speaker 4: most people are still feeling good, but we are hitting

117
00:05:44,600 --> 00:05:45,960
Speaker 4: some of those summertime.

118
00:05:45,560 --> 00:05:50,120
Speaker 3: Jitters, box Beta, lipshelts, Thank you very much. Samsung and

119
00:05:50,200 --> 00:05:53,279
Speaker 3: s k Heinechs are set to unveil massive AI related

120
00:05:53,360 --> 00:05:56,680
Speaker 3: investments on Monday at an event hosted by the President

121
00:05:56,720 --> 00:05:59,640
Speaker 3: of South Korea. That's according to local media reports say

122
00:05:59,680 --> 00:06:02,760
Speaker 3: Sam's Sun could announce more than six hundred billion dollars

123
00:06:02,760 --> 00:06:06,480
Speaker 3: in spending over the next decade, marking the largest such

124
00:06:06,520 --> 00:06:10,719
Speaker 3: plans in the country's history. Meanwhile, sk Heinix has signaled

125
00:06:10,760 --> 00:06:14,760
Speaker 3: it will expand production to meet runaway memory demand. Shares

126
00:06:14,800 --> 00:06:18,359
Speaker 3: of both South Korean giants, though, tumbled on Friday in

127
00:06:18,400 --> 00:06:20,960
Speaker 3: the asi of session, amid a bit of whiplash this

128
00:06:21,080 --> 00:06:24,919
Speaker 3: week for Asian technology shares, which ended basically on fears

129
00:06:24,960 --> 00:06:28,320
Speaker 3: that in the end, memory demand might soften. We'll try

130
00:06:28,360 --> 00:06:30,880
Speaker 3: and explain that in a moment. It doesn't take great

131
00:06:30,920 --> 00:06:32,280
Speaker 3: memory to recall what.

132
00:06:32,400 --> 00:06:33,120
Speaker 2: Sparked all of this.

133
00:06:33,320 --> 00:06:37,600
Speaker 3: Yesterday, Apple announced price hikes across its hardware products line,

134
00:06:37,760 --> 00:06:41,680
Speaker 3: citing unprecedented price gains in memory ships. Missing from the

135
00:06:41,720 --> 00:06:46,240
Speaker 3: price hike list for now the iPhone. Let's discuss with

136
00:06:46,360 --> 00:06:50,560
Speaker 3: Nobila Popeau, senior director at IDC, who leads their research

137
00:06:50,600 --> 00:06:55,400
Speaker 3: and coverage of the smartphone handset market. In April, Apple

138
00:06:55,520 --> 00:06:59,280
Speaker 3: said that the iPhone had been less affected by what's

139
00:06:59,320 --> 00:07:04,320
Speaker 3: happening with memory. Does IDC think that the iPhone is

140
00:07:04,520 --> 00:07:07,200
Speaker 3: next for potential price hikes?

141
00:07:08,600 --> 00:07:11,840
Speaker 5: I thank you for having me. Yes, absolutely, the iPhone

142
00:07:11,880 --> 00:07:13,560
Speaker 5: isn't spared. This is just a delay.

143
00:07:13,840 --> 00:07:14,000
Speaker 6: You know.

144
00:07:14,000 --> 00:07:17,240
Speaker 5: iPhone's the largest revenue driver for Apple, and given the

145
00:07:17,320 --> 00:07:20,040
Speaker 5: hike and memory costs, if they are to maintain their

146
00:07:20,720 --> 00:07:23,440
Speaker 5: profit margins, there's no way that they're not going to

147
00:07:23,480 --> 00:07:27,000
Speaker 5: increase the prices on the iPhones. I think what's interesting

148
00:07:27,160 --> 00:07:30,880
Speaker 5: is that the level of increase, right, That's the question

149
00:07:30,960 --> 00:07:33,560
Speaker 5: is when and how much are they going to increase?

150
00:07:33,640 --> 00:07:36,720
Speaker 5: So I don't think it's a matter of if, but

151
00:07:36,880 --> 00:07:39,520
Speaker 5: really when and how much and what we're thinking is

152
00:07:39,560 --> 00:07:41,560
Speaker 5: and in fact, you know, the memory situation and the

153
00:07:41,560 --> 00:07:44,480
Speaker 5: crisis has already been in talk and since what the

154
00:07:44,800 --> 00:07:47,560
Speaker 5: late last year. So even in our last forecast, we'd

155
00:07:47,560 --> 00:07:49,440
Speaker 5: already baked in the assumption that Apple is going to

156
00:07:49,520 --> 00:07:52,480
Speaker 5: raise prices on iPhones. And our thought at the time was,

157
00:07:52,520 --> 00:07:54,880
Speaker 5: you know, one hundred dollars on pro pro Max models.

158
00:07:55,200 --> 00:07:57,280
Speaker 5: But given you know the rate of increase that we

159
00:07:57,320 --> 00:07:59,280
Speaker 5: saw the max going up to even three hundred and

160
00:07:59,320 --> 00:08:01,840
Speaker 5: five hundred on some variants, I'm beginning to think now

161
00:08:01,880 --> 00:08:04,000
Speaker 5: that it's going to go up as much as two

162
00:08:04,080 --> 00:08:05,760
Speaker 5: hundred dollars on the Pro Max models.

163
00:08:06,640 --> 00:08:09,560
Speaker 3: N'billa, I'm just going to reiterate that for the audience. So,

164
00:08:09,680 --> 00:08:13,200
Speaker 3: you had an assumption prior to the news yesterday that

165
00:08:13,280 --> 00:08:16,320
Speaker 3: Apple would raise prices on the iPhone, and in your

166
00:08:16,360 --> 00:08:20,640
Speaker 3: forecast you assumed a hike of one hundred dollars to

167
00:08:20,840 --> 00:08:25,160
Speaker 3: Pro and Promax models, a fifty dollars hike to base models. Again,

168
00:08:25,440 --> 00:08:27,200
Speaker 3: I know you're I'm ask you to repeat what you

169
00:08:27,280 --> 00:08:30,680
Speaker 3: just said, but based on today's information, you think that

170
00:08:30,760 --> 00:08:33,640
Speaker 3: actually those price hikes may be higher on smartphone or

171
00:08:33,679 --> 00:08:34,640
Speaker 3: iPhone handsets.

172
00:08:35,840 --> 00:08:38,719
Speaker 5: Yeah, and again this is my personal assessment. I think

173
00:08:38,720 --> 00:08:41,480
Speaker 5: that it could go as much as two hundred dollars

174
00:08:41,520 --> 00:08:43,640
Speaker 5: in the promax And I'll give you two reasons. This

175
00:08:43,800 --> 00:08:47,880
Speaker 5: is the turn, you know, I'm how the ice increases

176
00:08:47,960 --> 00:08:50,920
Speaker 5: going to impact grades. Right, the consumers is going to

177
00:08:51,040 --> 00:08:55,400
Speaker 5: start drop, you know, not purchasing and not upgrading this year.

178
00:08:55,440 --> 00:08:57,800
Speaker 5: And I don't think that the impact will be very

179
00:08:57,880 --> 00:09:01,520
Speaker 5: negligible in terms of the churn. One because right, the

180
00:09:01,640 --> 00:09:04,679
Speaker 5: value proposition they have on the devices is CERIAI and

181
00:09:04,720 --> 00:09:08,440
Speaker 5: Apple Intelligence. That's not going to be available to any

182
00:09:08,480 --> 00:09:12,400
Speaker 5: devices beyond prior to fifteen pro I mean, right, So

183
00:09:12,800 --> 00:09:17,480
Speaker 5: that means only four and sixty six million devices have

184
00:09:17,679 --> 00:09:21,480
Speaker 5: the capabilities to run Apple Intelligence and CERAI. So we

185
00:09:21,520 --> 00:09:23,880
Speaker 5: all know how large Apples installed bases. That means a

186
00:09:23,920 --> 00:09:27,080
Speaker 5: significant portion of Apples install bases not going to be

187
00:09:27,080 --> 00:09:30,200
Speaker 5: able to run those features. So that creates a compelling

188
00:09:30,320 --> 00:09:34,400
Speaker 5: upgrade reason, right for those users. And on top of that,

189
00:09:34,520 --> 00:09:36,160
Speaker 5: if you think about how much you know, so I

190
00:09:36,200 --> 00:09:38,240
Speaker 5: do think we do think that most of the majority

191
00:09:38,280 --> 00:09:39,880
Speaker 5: of the price increase is going to focus on the

192
00:09:39,920 --> 00:09:43,080
Speaker 5: promax models, and given those consumers are less prie sensitive,

193
00:09:43,240 --> 00:09:45,840
Speaker 5: A two hundred dollars increase really amounts to you know,

194
00:09:45,880 --> 00:09:49,679
Speaker 5: most people are buying devices through thirty six month installment plans, right,

195
00:09:49,720 --> 00:09:52,000
Speaker 5: so that only amounts to about a five dollars price

196
00:09:52,120 --> 00:09:54,320
Speaker 5: hid per month. So that's really not going to dissuade

197
00:09:54,320 --> 00:09:57,280
Speaker 5: that kind of consumer segment. So those two reasons, I

198
00:09:57,360 --> 00:09:58,520
Speaker 5: think that makes sense.

199
00:10:00,080 --> 00:10:03,880
Speaker 3: The reason that's interesting is, you know, basically the situation

200
00:10:03,960 --> 00:10:06,679
Speaker 3: is quite clear. Micron is saying memory supply will be

201
00:10:06,720 --> 00:10:11,920
Speaker 3: typed for eighteen months, prices will remain elevated. Blueboat Tech

202
00:10:11,960 --> 00:10:15,560
Speaker 3: producers Oie Thomas picked out among the dozens of stories

203
00:10:15,559 --> 00:10:19,239
Speaker 3: without this morning, the key bit, which is in the end,

204
00:10:20,000 --> 00:10:24,559
Speaker 3: the question is now whether higher prices dampen consumer demand? Right,

205
00:10:24,640 --> 00:10:29,719
Speaker 3: that's the bit that's unknown. You seem to be indicating, well,

206
00:10:29,760 --> 00:10:31,880
Speaker 3: the buyer of an iPhone's got a lot of money anyway,

207
00:10:32,559 --> 00:10:36,840
Speaker 3: they're not as sensitive to those price hikes market wide.

208
00:10:37,000 --> 00:10:40,439
Speaker 2: Is that going to be true? Different?

209
00:10:40,440 --> 00:10:42,560
Speaker 7: And that's why I don't think they're going to create

210
00:10:42,760 --> 00:10:46,040
Speaker 7: that level of price time to bottle ass That's why

211
00:10:46,080 --> 00:10:49,360
Speaker 7: they're going to be vose strategic, even if the way

212
00:10:49,360 --> 00:10:52,000
Speaker 7: they're phasing the announcements this week was.

213
00:10:52,000 --> 00:10:54,600
Speaker 5: Just a broader announcement the prices are going to increase.

214
00:10:54,880 --> 00:10:57,280
Speaker 5: This week it was announcements on the iPads and the

215
00:10:57,360 --> 00:11:00,160
Speaker 5: math right, and a few other products, And so I

216
00:11:00,160 --> 00:11:01,800
Speaker 5: think what they're really trying to do so they'll be

217
00:11:01,920 --> 00:11:04,280
Speaker 5: very strategic in terms of the timing the announcement and

218
00:11:04,320 --> 00:11:06,320
Speaker 5: also the level of price increase they're going to do.

219
00:11:06,559 --> 00:11:08,800
Speaker 5: So I think they're going to be the lesser models,

220
00:11:08,800 --> 00:11:11,520
Speaker 5: the base models. The older models might see you know

221
00:11:11,679 --> 00:11:14,720
Speaker 5: half of that, right, But I do think the days

222
00:11:14,720 --> 00:11:18,160
Speaker 5: of the fifty dollars price increases are are gone. So

223
00:11:18,360 --> 00:11:22,360
Speaker 5: it's just a matter of you know, Apple understands the

224
00:11:22,400 --> 00:11:25,400
Speaker 5: brand propositions. Apple understand even in emerging markets. We're seeing

225
00:11:25,440 --> 00:11:29,439
Speaker 5: Apple rise at rates that we haven't seen before. Right, again,

226
00:11:29,480 --> 00:11:31,760
Speaker 5: this is the furad of financing, even that's going beyond

227
00:11:31,800 --> 00:11:34,839
Speaker 5: to emerging markets. So I do think that Apple is

228
00:11:34,880 --> 00:11:36,960
Speaker 5: really aware about it, and they're being very strategic and

229
00:11:37,000 --> 00:11:39,080
Speaker 5: how they go about it. The other thing is that

230
00:11:39,640 --> 00:11:42,360
Speaker 5: my conjecture that the reason they made the announcements now

231
00:11:42,400 --> 00:11:46,280
Speaker 5: and also to other products is so the consumers get

232
00:11:46,320 --> 00:11:47,480
Speaker 5: psychologically prepared.

233
00:11:47,559 --> 00:11:47,640
Speaker 6: Right.

234
00:11:47,640 --> 00:11:49,600
Speaker 5: They don't want the story at launch to be the

235
00:11:49,640 --> 00:11:51,920
Speaker 5: price LIKEE but really the value proposition that the phone

236
00:11:51,960 --> 00:11:53,400
Speaker 5: spring and I think that's what this is going to

237
00:11:53,440 --> 00:11:56,079
Speaker 5: achieve by making all these announcements.

238
00:11:55,440 --> 00:11:59,960
Speaker 3: Now, noting that typically Apple launches the latest generation of

239
00:12:00,120 --> 00:12:01,439
Speaker 3: iPhone handset.

240
00:12:01,040 --> 00:12:02,640
Speaker 2: In the full so that's still to come.

241
00:12:02,720 --> 00:12:06,240
Speaker 3: IDC with a call that Apple will raise iPhone prices

242
00:12:06,320 --> 00:12:09,040
Speaker 3: is not if it's by how much. Nobila Popeau, Senior

243
00:12:09,080 --> 00:12:12,200
Speaker 3: Research director at IDC, thank you very much sticking with

244
00:12:12,240 --> 00:12:15,320
Speaker 3: this component shortage crisis that has driven up the cost

245
00:12:15,360 --> 00:12:19,480
Speaker 3: of consumer tech products. Microsoft also announced a third big

246
00:12:19,520 --> 00:12:23,800
Speaker 3: price hike in thirteen months for Xbox consoles, with models

247
00:12:23,800 --> 00:12:27,319
Speaker 3: having five hundred and twelve gigabytes of storage increasing by one

248
00:12:27,440 --> 00:12:31,880
Speaker 3: hundred dollars and the one terrorbyte versions increasing by one

249
00:12:31,960 --> 00:12:35,280
Speaker 3: hundred and fifty dollars. The new pricing will take effect

250
00:12:35,400 --> 00:12:41,360
Speaker 3: starting August first coming up, humanoid robots are moving closer

251
00:12:41,400 --> 00:12:43,880
Speaker 3: to the real world, but in Nvidia says the industry

252
00:12:43,880 --> 00:12:47,800
Speaker 3: still needs to work on AI brains. We speak to Deputella,

253
00:12:47,920 --> 00:12:51,040
Speaker 3: VP of Robotics and Edge at Nvidia Morticom. This is

254
00:12:51,040 --> 00:13:02,360
Speaker 3: boon Berg Tech. Disney theme parks are set to get

255
00:13:02,400 --> 00:13:05,880
Speaker 3: a major robotics upgrade. The company's research and development lab

256
00:13:06,000 --> 00:13:08,320
Speaker 3: has been working on several new projects as part of

257
00:13:08,320 --> 00:13:11,720
Speaker 3: Disney's ten year plan to invest sixty billion dollars in

258
00:13:11,760 --> 00:13:17,000
Speaker 3: its parks and resorts, including a fleet of dolphin like robots.

259
00:13:17,760 --> 00:13:19,640
Speaker 2: Disney's also exploring concepts.

260
00:13:19,320 --> 00:13:22,760
Speaker 3: Ranging from Star Wars themed food carts with hovering droid

261
00:13:22,880 --> 00:13:26,559
Speaker 3: like robots to new projection based effects for its Pirates

262
00:13:26,559 --> 00:13:28,680
Speaker 3: of the Caribbean ride. The moves are part of an

263
00:13:28,720 --> 00:13:32,600
Speaker 3: initiative driven by new CEO Josh Damorrow, the former parks

264
00:13:32,720 --> 00:13:37,160
Speaker 3: chief who succeeded Bobbeiger in March and previously oversaw the

265
00:13:37,200 --> 00:13:40,320
Speaker 3: Imagineers and robotics efforts. Many of the concepts remain in

266
00:13:40,360 --> 00:13:42,839
Speaker 3: development and may evolve before.

267
00:13:42,440 --> 00:13:44,160
Speaker 2: Reaching Disney's parks.

268
00:13:45,080 --> 00:13:48,400
Speaker 3: The video wants to make humanoid robots safer around humans.

269
00:13:48,720 --> 00:13:51,400
Speaker 3: The chip Giant reveals it has spent over a decade

270
00:13:51,559 --> 00:13:55,160
Speaker 3: solving what it calls the three computer problem to power

271
00:13:55,160 --> 00:13:58,680
Speaker 3: autonomous machines, but while the physical hardware is largely ready,

272
00:13:59,200 --> 00:14:02,680
Speaker 3: the industry still hunting for a breakthrough in AI brains.

273
00:14:02,720 --> 00:14:05,319
Speaker 3: This is what Deeply Talent, vice president of Robotics in

274
00:14:05,360 --> 00:14:07,320
Speaker 3: Aji and Vidia told us yesterday.

275
00:14:08,320 --> 00:14:10,640
Speaker 8: So we've been building a computer for you know, robotics.

276
00:14:10,640 --> 00:14:13,200
Speaker 8: Actually the three computer problem the computer talking about is

277
00:14:13,240 --> 00:14:16,720
Speaker 8: the third computer which goes inside the inside the robot,

278
00:14:17,120 --> 00:14:19,320
Speaker 8: in the brain. But we also need a computer for

279
00:14:19,400 --> 00:14:21,840
Speaker 8: training the brain and a computer for testing, which happens

280
00:14:21,880 --> 00:14:24,640
Speaker 8: to be in simulation our Omnibus platform. So now coming

281
00:14:24,680 --> 00:14:27,320
Speaker 8: to the third computer your question, what needs to happen.

282
00:14:27,440 --> 00:14:29,800
Speaker 8: We started working on this more than a decade ago.

283
00:14:30,000 --> 00:14:32,720
Speaker 8: We caall this, you know, Nvidia jets and number one,

284
00:14:32,760 --> 00:14:34,720
Speaker 8: of course, it needs to have a high amount of

285
00:14:34,800 --> 00:14:38,640
Speaker 8: compute capability because models are going to become more larger

286
00:14:38,720 --> 00:14:40,520
Speaker 8: in order to make them more intelligent to hit the

287
00:14:40,520 --> 00:14:43,000
Speaker 8: accuracy mark. Of course, it needs to be real time,

288
00:14:43,120 --> 00:14:45,120
Speaker 8: it needs to be safety, needs to be designed from

289
00:14:45,120 --> 00:14:48,520
Speaker 8: the ground up right. Energy efficiency also matters, and of

290
00:14:48,520 --> 00:14:51,280
Speaker 8: course it also needs to be general purpose programble. And

291
00:14:51,320 --> 00:14:53,720
Speaker 8: that's kind of what we see with our Nvidia jets

292
00:14:53,720 --> 00:14:56,480
Speaker 8: and computer with over two and a half million developers

293
00:14:56,520 --> 00:14:58,760
Speaker 8: that you know are active on the platform, more than

294
00:14:58,760 --> 00:15:02,080
Speaker 8: ten thousand companies that are building all sorts of robots,

295
00:15:02,080 --> 00:15:05,240
Speaker 8: some humanoids, but all sorts of other embodiments as well,

296
00:15:05,600 --> 00:15:07,520
Speaker 8: And so that's kind of what, you know, what's needed

297
00:15:07,560 --> 00:15:08,440
Speaker 8: for robotics.

298
00:15:08,480 --> 00:15:09,560
Speaker 9: General purpose robotics to.

299
00:15:09,520 --> 00:15:13,280
Speaker 3: Happen right now in the field of humanoid robotics, What

300
00:15:13,520 --> 00:15:16,880
Speaker 3: is the biggest barrier to progress software or hardware.

301
00:15:18,360 --> 00:15:21,200
Speaker 8: I think there's been tremendous amount of mechatronics miracles that

302
00:15:21,240 --> 00:15:23,240
Speaker 8: have been done, except for the hands that are being

303
00:15:23,280 --> 00:15:25,760
Speaker 8: worked on. But I think still the number one problem remains.

304
00:15:26,240 --> 00:15:29,240
Speaker 8: The brain has to be reasonably you know, general purpose

305
00:15:29,400 --> 00:15:32,200
Speaker 8: and accurate, and we haven't hit that. You know what

306
00:15:32,280 --> 00:15:35,520
Speaker 8: happened with CHIDGPT in November twenty twenty two, where you

307
00:15:35,600 --> 00:15:38,480
Speaker 8: had that moment. That moment for robotics is right around

308
00:15:38,520 --> 00:15:40,560
Speaker 8: the corner, but we haven't reached that yet.

309
00:15:42,480 --> 00:15:46,840
Speaker 3: I was Deepootala and Vidia's vice president of robotics in Edge.

310
00:15:47,520 --> 00:15:51,200
Speaker 3: One of the promises of AI was alleviating the burdens

311
00:15:51,240 --> 00:15:55,400
Speaker 3: of Silicon Valley. Instead, it's inducing anxiety in tech workers

312
00:15:55,840 --> 00:16:00,520
Speaker 3: and contributing to a culture of workerholism. Can't seem to

313
00:16:00,560 --> 00:16:03,640
Speaker 3: turn the laptops off as AI agents build around the clock,

314
00:16:03,720 --> 00:16:07,680
Speaker 3: pushed by investors desperate to beat the ever increasing competition.

315
00:16:08,080 --> 00:16:10,320
Speaker 3: This is one of the best things I've read in

316
00:16:10,360 --> 00:16:14,880
Speaker 3: twenty twenty six, reported out by Bloomberg's Antash Mascarinus. It's

317
00:16:14,920 --> 00:16:18,240
Speaker 3: just true. Call it what you will. Found a mode

318
00:16:18,280 --> 00:16:21,920
Speaker 3: on right, you know, build, let's build. You hear it

319
00:16:21,960 --> 00:16:24,320
Speaker 3: all the time, take us inside the report.

320
00:16:24,520 --> 00:16:26,400
Speaker 10: Yeah, I mean this story that I did with my

321
00:16:26,480 --> 00:16:29,600
Speaker 10: colleague Rebeca Torrens was very much inspired by this idea

322
00:16:29,680 --> 00:16:32,080
Speaker 10: that we are often covering the stories that are in

323
00:16:32,080 --> 00:16:34,440
Speaker 10: this moment up into the right. So what's this cascade

324
00:16:34,480 --> 00:16:37,680
Speaker 10: of anxiety beneath the surface? And time and time again,

325
00:16:38,120 --> 00:16:40,560
Speaker 10: you know, once the laptop shut or the interview was done,

326
00:16:40,680 --> 00:16:42,680
Speaker 10: the follow up we would hear from those same people

327
00:16:43,280 --> 00:16:46,040
Speaker 10: was it's great. But this came at a huge cost, right,

328
00:16:46,120 --> 00:16:49,040
Speaker 10: and so it's manifested in everything from you know, touch

329
00:16:49,120 --> 00:16:51,640
Speaker 10: grass parties where you're not allowed to mention AI otherwise

330
00:16:51,680 --> 00:16:53,920
Speaker 10: you have to make a donation to that.

331
00:16:53,880 --> 00:16:55,920
Speaker 2: Kind of gives you some mental breathing space.

332
00:16:55,720 --> 00:16:58,400
Speaker 10: Exactly exactly to you know, Bets in the office and

333
00:16:58,440 --> 00:17:01,560
Speaker 10: founder saying it's not just working all hours, it's if

334
00:17:01,560 --> 00:17:04,520
Speaker 10: we don't hit a multi billion dollar revenue stream, not

335
00:17:04,600 --> 00:17:08,000
Speaker 10: valuation revenue. You know, by next year, our company has

336
00:17:08,080 --> 00:17:10,600
Speaker 10: toast and so you know it's heightened stakes and there's

337
00:17:10,680 --> 00:17:13,359
Speaker 10: minimal space to give you know, breathing room to that

338
00:17:13,480 --> 00:17:14,600
Speaker 10: and so that was the goal of the story.

339
00:17:14,680 --> 00:17:17,040
Speaker 3: That's so interesting is why we tracked like the AR

340
00:17:17,320 --> 00:17:19,760
Speaker 3: targets so like to gauge how how stars are doing.

341
00:17:20,040 --> 00:17:21,720
Speaker 3: I want to just go over the AI agent bit.

342
00:17:21,800 --> 00:17:26,399
Speaker 3: Like the idea that's pitched is you say to AI agents,

343
00:17:26,440 --> 00:17:28,679
Speaker 3: swarms do this, I'm going to go to bed and

344
00:17:28,720 --> 00:17:31,720
Speaker 3: when I wake up, should be done. What you're reporting

345
00:17:31,800 --> 00:17:34,879
Speaker 3: is that actually, in practice, the engineer is still the

346
00:17:34,960 --> 00:17:36,000
Speaker 3: computer staring at.

347
00:17:35,880 --> 00:17:36,720
Speaker 2: The screen totally.

348
00:17:36,760 --> 00:17:38,800
Speaker 10: I mean, in some ways it's actually the vision that's

349
00:17:38,800 --> 00:17:41,119
Speaker 10: always been pitched, right that it's no longer the human

350
00:17:41,160 --> 00:17:43,879
Speaker 10: controlling the AI, but the AI controlling the human. And

351
00:17:43,920 --> 00:17:45,960
Speaker 10: so a lot of engineers were sort of saying, there's

352
00:17:45,960 --> 00:17:47,960
Speaker 10: been the swap between we feel like we have to

353
00:17:47,960 --> 00:17:50,879
Speaker 10: be on standby at times seeing how our agents are

354
00:17:50,880 --> 00:17:53,200
Speaker 10: doing things. And it is this you know, really electric

355
00:17:53,280 --> 00:17:56,600
Speaker 10: moment of they're listening to me, they're working around the clock,

356
00:17:57,480 --> 00:17:59,800
Speaker 10: but as you know, employees want to prove they're standing

357
00:17:59,840 --> 00:18:02,320
Speaker 10: with the company. Is it actually looks a little bit

358
00:18:02,359 --> 00:18:06,560
Speaker 10: more like hands on, just watching and waiting on. One

359
00:18:06,880 --> 00:18:09,119
Speaker 10: engineer I spoke to. One developer I spoke to is

360
00:18:09,400 --> 00:18:12,000
Speaker 10: the mother of two children who mentioned that she's often

361
00:18:12,000 --> 00:18:14,040
Speaker 10: told by a cloud code to go to sleep, and

362
00:18:14,119 --> 00:18:17,760
Speaker 10: you know headification, and so while Anthropik tells us that

363
00:18:17,760 --> 00:18:21,399
Speaker 10: that is actually not a future or a response to something,

364
00:18:22,040 --> 00:18:22,840
Speaker 10: it is the sun of the.

365
00:18:22,760 --> 00:18:23,480
Speaker 2: Times, right.

366
00:18:23,760 --> 00:18:26,359
Speaker 3: We'll track token spend, but we'll also track red bull

367
00:18:26,400 --> 00:18:29,600
Speaker 3: spend for all those all night as Bloomberg's and Tash Mascaranas,

368
00:18:29,600 --> 00:18:34,800
Speaker 3: thank you very much. Indeed, Tesla has quietly resolved a

369
00:18:34,880 --> 00:18:38,560
Speaker 3: lawsuit stemming from a fatal twenty twenty three crash that

370
00:18:38,640 --> 00:18:43,399
Speaker 3: prompted a defect investigation into the carmaker's automated driving technology.

371
00:18:43,440 --> 00:18:48,000
Speaker 3: The attorney representing the victim's daughter says the case recently settled,

372
00:18:48,359 --> 00:18:51,080
Speaker 3: though the terms of the settlement weren't disclosed. An attorney

373
00:18:51,080 --> 00:18:54,560
Speaker 3: for Tesla did not respond to requests for comment. Bloomberg

374
00:18:54,600 --> 00:18:59,280
Speaker 3: News reported last year that Sunglare may compromise Tesla's camera

375
00:18:59,280 --> 00:19:03,240
Speaker 3: based driving. Tessa says it's since upgraded cameras on older

376
00:19:03,359 --> 00:19:08,879
Speaker 3: vehicles and continues to work with US safety regulators. Following

377
00:19:08,880 --> 00:19:13,639
Speaker 3: a blockbuster ipo, SpaceX has left bond traders stunned after

378
00:19:13,680 --> 00:19:16,680
Speaker 3: its newly issued debt quickly lost value. The company's twenty

379
00:19:16,680 --> 00:19:20,120
Speaker 3: five billion dollar bond offering has resulted in paper losses

380
00:19:20,600 --> 00:19:23,439
Speaker 3: of roughly three hundred and five million dollars. Were traders

381
00:19:23,440 --> 00:19:25,919
Speaker 3: suggesting many fast money accounts.

382
00:19:26,160 --> 00:19:27,760
Speaker 2: We're looking for a quick flip.

383
00:19:28,119 --> 00:19:31,160
Speaker 3: Bloomberg Intelligence senior credit analyst Robert Schiffman is with us.

384
00:19:32,200 --> 00:19:33,679
Speaker 3: I want to be honest, there's a lot of this

385
00:19:33,800 --> 00:19:37,240
Speaker 3: story that I don't understand. So we've reported that the

386
00:19:37,280 --> 00:19:41,840
Speaker 3: approximate paper losses on what was a relatively recent bond sale, right,

387
00:19:42,119 --> 00:19:45,600
Speaker 3: twenty five billion dollars from SpaceX. What do we need

388
00:19:45,640 --> 00:19:48,720
Speaker 3: to understand about that figure or those figures?

389
00:19:48,800 --> 00:19:52,280
Speaker 11: Robert, Yeah, well, not funding tended. But this bond deal

390
00:19:52,359 --> 00:19:55,680
Speaker 11: is not blowing up. Spreads are wider. We're about fifteen

391
00:19:55,760 --> 00:19:58,720
Speaker 11: to twenty five wider out the curve, which shows that

392
00:19:58,800 --> 00:20:01,560
Speaker 11: you can't make money every single day in the markets.

393
00:20:01,920 --> 00:20:06,360
Speaker 11: It doesn't change the overall picture though, of this investment

394
00:20:06,440 --> 00:20:10,720
Speaker 11: grade stable credit that has lots of borrowing capacity going

395
00:20:10,760 --> 00:20:14,120
Speaker 11: forward as it builds its business. But I think everyone

396
00:20:14,200 --> 00:20:17,680
Speaker 11: is pointing towards the daily moves of the sky is falling,

397
00:20:17,880 --> 00:20:20,680
Speaker 11: looking for the day that AI valuations are going to

398
00:20:20,720 --> 00:20:23,800
Speaker 11: completely turn. We've been to this dance before. It happens

399
00:20:23,920 --> 00:20:26,119
Speaker 11: every couple of months, and I just think this is

400
00:20:26,160 --> 00:20:28,920
Speaker 11: a little bit overstated. Bond holders are feeling a little

401
00:20:28,920 --> 00:20:31,360
Speaker 11: bit of pain these days. I just don't think it's

402
00:20:31,400 --> 00:20:32,760
Speaker 11: going to last.

403
00:20:33,400 --> 00:20:36,960
Speaker 3: Separating Bloomberg News reporting on what's happening with these bonds.

404
00:20:37,200 --> 00:20:40,840
Speaker 3: Robert Shipman leads our research of corporate credit, and that's

405
00:20:40,840 --> 00:20:44,320
Speaker 3: really important. What you said there on ig rating investment

406
00:20:44,400 --> 00:20:48,560
Speaker 3: grade rating is really important because SpaceX basically has a

407
00:20:48,680 --> 00:20:51,879
Speaker 3: rating from the agencies that puts it on par with

408
00:20:52,000 --> 00:20:54,280
Speaker 3: some of the biggest technology companies in the world. The

409
00:20:54,400 --> 00:20:58,600
Speaker 3: difference is that those big tech companies have positive cash flows.

410
00:20:58,960 --> 00:21:01,480
Speaker 3: SpaceX doesn't explain why that matters.

411
00:21:02,200 --> 00:21:05,200
Speaker 11: Well, it's interesting these days those companies, the mount rushmore

412
00:21:05,200 --> 00:21:08,119
Speaker 11: of credits, the double ays and trip ays, Microsoft's Amazons,

413
00:21:08,560 --> 00:21:12,399
Speaker 11: Metas and Alphabets are actually free cashual negative. They're spending

414
00:21:12,440 --> 00:21:16,160
Speaker 11: more money after capex and shareholder returns and they're pulling

415
00:21:16,160 --> 00:21:18,120
Speaker 11: in and that's why they're raising so much money. It's

416
00:21:18,119 --> 00:21:20,480
Speaker 11: part of the reason why alphabet raised eighty five billion

417
00:21:20,520 --> 00:21:23,320
Speaker 11: dollars of equity just a few weeks ago. So they're

418
00:21:23,320 --> 00:21:24,440
Speaker 11: all sort of in the same boat.

419
00:21:24,560 --> 00:21:24,760
Speaker 2: You know.

420
00:21:24,800 --> 00:21:28,040
Speaker 11: The difference, though, is that this is a triple B name,

421
00:21:28,440 --> 00:21:31,720
Speaker 11: so it has less flexibility. It also is a new

422
00:21:31,720 --> 00:21:34,280
Speaker 11: issue where people don't really even know what SpaceX is.

423
00:21:34,320 --> 00:21:37,040
Speaker 11: It's in a lot of different businesses and they don't

424
00:21:37,040 --> 00:21:39,359
Speaker 11: have a track record. What I would tell you, though,

425
00:21:39,480 --> 00:21:42,320
Speaker 11: is that this name is rated higher than Oracle. It

426
00:21:42,440 --> 00:21:46,240
Speaker 11: trades still tighter than Oracle. It doesn't look like a

427
00:21:46,320 --> 00:21:49,159
Speaker 11: jump company, and it's not trading like a jump company,

428
00:21:49,320 --> 00:21:51,640
Speaker 11: and I don't think it's going to So I think

429
00:21:51,680 --> 00:21:54,399
Speaker 11: these sort of near term anomalies like you get. You know,

430
00:21:54,600 --> 00:21:57,080
Speaker 11: hedge funds are trying to make money. It was a

431
00:21:57,119 --> 00:21:59,159
Speaker 11: down couple of days both in the equity market and

432
00:21:59,200 --> 00:22:00,879
Speaker 11: a little bit in the credit market. Crowd spreads are

433
00:22:00,920 --> 00:22:03,239
Speaker 11: out about five basis points. I just don't think it's

434
00:22:03,240 --> 00:22:05,600
Speaker 11: as big of a deal as it seems like it is.

435
00:22:06,480 --> 00:22:15,399
Speaker 3: The eyes Robert Shitman, thank you very much. Welcome back

436
00:22:15,440 --> 00:22:17,399
Speaker 3: to Bloomberg Tech. It has been a brutal week for

437
00:22:17,440 --> 00:22:20,640
Speaker 3: the AI trade. But what's remarkable about it is it's

438
00:22:20,680 --> 00:22:24,400
Speaker 3: in both directions. We have seen euphoria and big drops

439
00:22:24,440 --> 00:22:28,560
Speaker 3: on equities with memory the pricing and supply memory chips

440
00:22:28,600 --> 00:22:30,000
Speaker 3: of the heart of it. So Apple's up one point

441
00:22:30,040 --> 00:22:32,760
Speaker 3: four percent right now, but remember twenty four hours ago

442
00:22:33,000 --> 00:22:34,639
Speaker 3: it was in a session where it had its biggest

443
00:22:34,680 --> 00:22:38,119
Speaker 3: drop in sixteen months. Micron is down four percent but

444
00:22:38,240 --> 00:22:42,560
Speaker 3: had had a relatively unprecedented surge after a blowout earnings

445
00:22:42,600 --> 00:22:46,080
Speaker 3: on Wednesday night. Overall, we're on track for the Nasdaq

446
00:22:46,119 --> 00:22:48,560
Speaker 3: one hundred at various points of this session to be

447
00:22:48,680 --> 00:22:52,240
Speaker 3: down the most over a five day basis since April

448
00:22:52,320 --> 00:22:54,600
Speaker 3: of twenty twenty five. So it kind of hangs in

449
00:22:54,640 --> 00:22:58,440
Speaker 3: the balance. That nervousness went into the Asia session, where

450
00:22:58,520 --> 00:23:03,200
Speaker 3: basically memory pricing and supply being tight has been good

451
00:23:03,560 --> 00:23:08,080
Speaker 3: for the memory makers Micron principally, but the perspective of.

452
00:23:08,000 --> 00:23:08,800
Speaker 2: The market's change.

453
00:23:08,840 --> 00:23:12,280
Speaker 3: So you see Samsung and sk Heinix, the two leaders

454
00:23:12,720 --> 00:23:16,640
Speaker 3: in memory, down significantly overnight because now the market's reacting

455
00:23:16,720 --> 00:23:20,640
Speaker 3: to Apple raising prices on some of its hardware because

456
00:23:20,680 --> 00:23:23,520
Speaker 3: of component costs IE memory costs being higher.

457
00:23:23,720 --> 00:23:25,080
Speaker 2: We're extrapolating out the.

458
00:23:25,040 --> 00:23:26,959
Speaker 3: Next phase of it is the question is does this

459
00:23:26,960 --> 00:23:29,600
Speaker 3: come full circle and dampen consumer demand.

460
00:23:29,920 --> 00:23:31,480
Speaker 2: That's the difficulty of it.

461
00:23:31,800 --> 00:23:34,919
Speaker 3: But it's been choppy trading again in aggregate then, as

462
00:23:34,960 --> 00:23:37,720
Speaker 3: that one hundred is now down about six ten percent,

463
00:23:37,800 --> 00:23:41,000
Speaker 3: in the moment. However, on the week, at various points

464
00:23:41,000 --> 00:23:43,320
Speaker 3: in the session, depending on where we close, it could

465
00:23:43,359 --> 00:23:46,720
Speaker 3: have its worst week since April twenty twenty five. Let's

466
00:23:46,720 --> 00:23:49,080
Speaker 3: go back to our top news story today, that is

467
00:23:49,119 --> 00:23:52,520
Speaker 3: the open AI is considering an IPO as soon as

468
00:23:52,560 --> 00:23:56,280
Speaker 3: twenty twenty seven, according to sources, a timeline that would

469
00:23:56,280 --> 00:23:59,320
Speaker 3: potentially see it go public after its AI rival and

470
00:23:59,359 --> 00:24:01,720
Speaker 3: throp it bloom. As Anthony Hughes is here on the

471
00:24:01,760 --> 00:24:06,960
Speaker 3: Banks and IPO beat, look, this is relatively consistent with

472
00:24:07,720 --> 00:24:10,600
Speaker 3: what open ai said June eighth when it disclosed it's

473
00:24:10,600 --> 00:24:13,840
Speaker 3: confidential filing. But there is some jeopardy in the sense

474
00:24:13,880 --> 00:24:17,399
Speaker 3: that the banks working on this are doing both open aiyes, IPO.

475
00:24:17,400 --> 00:24:18,280
Speaker 2: And Anthropics.

476
00:24:18,320 --> 00:24:21,040
Speaker 3: Per our reporting and what I put out earlier this

477
00:24:21,119 --> 00:24:24,480
Speaker 3: hour is open AI seems pretty calm about the idea

478
00:24:24,520 --> 00:24:29,520
Speaker 3: that they go third after SpaceX Anthropic in the IPO sequence.

479
00:24:29,560 --> 00:24:30,439
Speaker 2: What else do we need to know?

480
00:24:31,080 --> 00:24:32,879
Speaker 12: Yeah, well, I think we've really portrayed this as a

481
00:24:32,960 --> 00:24:35,360
Speaker 12: race between Anthropic and open a ho to go public.

482
00:24:35,400 --> 00:24:38,200
Speaker 12: But if that's the case, then open AI does seem

483
00:24:38,240 --> 00:24:39,639
Speaker 12: to be losing the race. And as you say, I

484
00:24:39,640 --> 00:24:42,120
Speaker 12: mean they're really been giving off sort of mixed messages

485
00:24:42,119 --> 00:24:43,960
Speaker 12: about how keen they are to really go. But you

486
00:24:44,000 --> 00:24:47,080
Speaker 12: can see by their actions that they filed confidentially right

487
00:24:47,119 --> 00:24:50,240
Speaker 12: after Anthropic did earlier this month, and I think certainly

488
00:24:50,280 --> 00:24:51,080
Speaker 12: there's been a lot of.

489
00:24:52,520 --> 00:24:53,399
Speaker 2: Mixed views around.

490
00:24:53,440 --> 00:24:56,919
Speaker 12: I think from Anthropics perspective, I think they seem to

491
00:24:56,920 --> 00:25:00,399
Speaker 12: be ahead of open AI in terms of valuation, revenue growth,

492
00:25:00,920 --> 00:25:04,639
Speaker 12: their ability to generate free cash flow over the next

493
00:25:04,680 --> 00:25:07,159
Speaker 12: few years. So in that sense, Anthropic seems to be

494
00:25:07,200 --> 00:25:10,040
Speaker 12: ahead of open AI. And you know, I think probably

495
00:25:10,080 --> 00:25:12,720
Speaker 12: there's a feeling with an open AI that they don't

496
00:25:12,760 --> 00:25:16,600
Speaker 12: want to be perceived to be behind Anthropic, But as

497
00:25:17,119 --> 00:25:20,280
Speaker 12: you look at all the you know, the facts around

498
00:25:20,280 --> 00:25:21,800
Speaker 12: the situation, it does seem like they are.

499
00:25:22,960 --> 00:25:24,919
Speaker 3: And see, let me just catch the Boomberg Tech audience

500
00:25:24,960 --> 00:25:26,040
Speaker 3: up on a couple of points.

501
00:25:26,160 --> 00:25:26,400
Speaker 9: One.

502
00:25:27,000 --> 00:25:30,080
Speaker 3: Soft Bank shares in Japan fell significantly overnight, and the

503
00:25:30,160 --> 00:25:33,600
Speaker 3: US listed shares are down again today because The New

504
00:25:33,680 --> 00:25:38,439
Speaker 3: York Times had initially published the report about open Eyes

505
00:25:38,800 --> 00:25:41,199
Speaker 3: IPO going to twenty seven. Of course soft Bank is

506
00:25:41,359 --> 00:25:45,680
Speaker 3: massively economically and financially exposed to open AI, but we're

507
00:25:45,680 --> 00:25:48,280
Speaker 3: also showing shares at Morgan Stanley and Golden Sacks down

508
00:25:48,320 --> 00:25:52,440
Speaker 3: pretty significantly in this US trading session. Our report came

509
00:25:52,480 --> 00:25:55,080
Speaker 3: out an hour ago. Why would those two banks in

510
00:25:55,119 --> 00:25:58,480
Speaker 3: particular be lower on this news without drawing too much

511
00:25:58,520 --> 00:26:00,879
Speaker 3: of a direct or call relationship.

512
00:26:01,440 --> 00:26:04,000
Speaker 12: Yeah, well, I think there's just a sentiment around the

513
00:26:04,040 --> 00:26:06,600
Speaker 12: fact that the banks are expected to do very well

514
00:26:06,600 --> 00:26:08,480
Speaker 12: out of these IPOs based on the fees that they

515
00:26:08,560 --> 00:26:11,280
Speaker 12: collected on SpaceX recently. But you know, I think that's

516
00:26:11,320 --> 00:26:13,840
Speaker 12: probably just a bit of a knee jerk reaction, and

517
00:26:13,880 --> 00:26:15,840
Speaker 12: we know that the banks are going to do very

518
00:26:15,840 --> 00:26:18,720
Speaker 12: well this year in terms of their fees from areas

519
00:26:18,800 --> 00:26:21,080
Speaker 12: like equity coupitle of markets and M and A and

520
00:26:21,119 --> 00:26:22,720
Speaker 12: the like, So you know, that might just be a

521
00:26:22,760 --> 00:26:26,400
Speaker 12: bit of a short term reaction on a tough day.

522
00:26:27,160 --> 00:26:29,679
Speaker 2: In the main, there is.

523
00:26:29,680 --> 00:26:31,320
Speaker 3: A lot going on, and we're going to keep tracking

524
00:26:31,359 --> 00:26:34,560
Speaker 3: at Bloomberg's Anthony Hughes, thank you very much. Indeed, South

525
00:26:34,640 --> 00:26:38,920
Speaker 3: Korea's stock market has surged about two year on year,

526
00:26:39,000 --> 00:26:43,440
Speaker 3: powered by an AI fuel chip rally, but extreme volatility

527
00:26:43,520 --> 00:26:47,080
Speaker 3: and heavy reliance on just two companies may mean it's

528
00:26:47,080 --> 00:26:48,399
Speaker 3: a bubble waiting to burst.

529
00:26:48,600 --> 00:26:50,399
Speaker 2: Bloomberg Originals has the story.

530
00:26:53,280 --> 00:26:57,439
Speaker 13: South Korea may have an ant problem, although it's not

531
00:26:57,680 --> 00:27:00,399
Speaker 13: these type of events, but rather these of course.

532
00:27:00,359 --> 00:27:02,199
Speaker 2: Been them Peggott peer.

533
00:27:03,320 --> 00:27:03,800
Speaker 11: Ah.

534
00:27:05,080 --> 00:27:08,400
Speaker 14: There are more than fourteen million retail investors in South

535
00:27:08,480 --> 00:27:12,320
Speaker 14: Korea who are called ants. Individually they don't have much powers,

536
00:27:12,440 --> 00:27:16,000
Speaker 14: but collectively they have a greater influence in the market.

537
00:27:17,200 --> 00:27:19,040
Speaker 13: These ants has been busy.

538
00:27:19,000 --> 00:27:20,960
Speaker 3: Not by more than one hundred percent, so faber Shire

539
00:27:21,280 --> 00:27:22,920
Speaker 3: just an unbelievable rally.

540
00:27:23,040 --> 00:27:26,480
Speaker 15: It's really quite extraordinary what's happening in Korean stocks at

541
00:27:26,480 --> 00:27:26,879
Speaker 15: the moment.

542
00:27:27,640 --> 00:27:31,520
Speaker 13: The COSTP index, which tracks Korea's public companies, climbed two

543
00:27:31,640 --> 00:27:35,159
Speaker 13: hundred percent over the last twelve months. Compare that to

544
00:27:35,240 --> 00:27:38,680
Speaker 13: other major markets like the SMP or even the Nasdaq,

545
00:27:39,119 --> 00:27:41,960
Speaker 13: and Korea's performance blows them out of the water.

546
00:27:42,400 --> 00:27:45,719
Speaker 14: That means it has more and tripled over the past

547
00:27:45,800 --> 00:27:50,159
Speaker 14: twelve months. Retail investors, they've been the main driver of

548
00:27:50,240 --> 00:27:53,520
Speaker 14: the COSTP. We can see signs of being a little

549
00:27:53,520 --> 00:27:56,480
Speaker 14: bit maniac and a lot of people borrowing money.

550
00:27:56,240 --> 00:27:58,879
Speaker 13: To invest in stuff and the mid The mania is

551
00:27:58,880 --> 00:28:01,840
Speaker 13: a mounting fear that a bubble will soon burst.

552
00:28:02,160 --> 00:28:06,080
Speaker 3: The AI bubble debate is absolutely raging right now.

553
00:28:06,359 --> 00:28:09,440
Speaker 14: South Korea is one of the biggest beneficiary of the

554
00:28:09,480 --> 00:28:12,560
Speaker 14: global AI trade because it has two of the world's

555
00:28:12,680 --> 00:28:14,200
Speaker 14: largest memory ship makers.

556
00:28:14,400 --> 00:28:19,199
Speaker 15: Korean stocks are really maximizing being beneficiaries of the AI

557
00:28:19,640 --> 00:28:22,720
Speaker 15: capex bubble. That's the amount of money that's pouring in

558
00:28:23,119 --> 00:28:25,159
Speaker 15: around the world, but particularly in the US from the

559
00:28:25,200 --> 00:28:28,880
Speaker 15: megacap stocks into building AI data centers.

560
00:28:29,240 --> 00:28:33,280
Speaker 13: So are South Korea's retail investors building towards the future

561
00:28:33,920 --> 00:28:35,080
Speaker 13: or will they get wiped out?

562
00:28:35,520 --> 00:28:39,640
Speaker 15: I don't have a strong insight of when it goes wrong,

563
00:28:39,800 --> 00:28:43,280
Speaker 15: but when the AI bobble collapses, the pain in career

564
00:28:43,400 --> 00:28:44,440
Speaker 15: is going to be extraordinary.

565
00:28:47,360 --> 00:28:49,960
Speaker 3: You can watch the full episode on Bloomberg dot com.

566
00:28:50,000 --> 00:28:53,040
Speaker 3: Let's get out to the twenty twenty six Aspen Ideas

567
00:28:53,040 --> 00:28:56,840
Speaker 3: Festival where Bloomberg Surveillance co host Lisa Bronavitz is moderating

568
00:28:56,880 --> 00:29:01,040
Speaker 3: a panel on affordability with Minneapolis Fed President Neil Kashkari,

569
00:29:01,120 --> 00:29:04,840
Speaker 3: Lift CEO David Risha, and Whole Food CEO Jason Mucou.

570
00:29:06,360 --> 00:29:09,440
Speaker 16: And there is that we also have never sold more

571
00:29:09,800 --> 00:29:11,440
Speaker 16: black and Black a Suview rides.

572
00:29:11,800 --> 00:29:13,720
Speaker 9: So this is sort of the key shaped economy that I.

573
00:29:13,840 --> 00:29:15,520
Speaker 16: You talk about, and it's kind of a you can

574
00:29:15,560 --> 00:29:16,760
Speaker 16: sort of feel it every single day.

575
00:29:16,960 --> 00:29:18,560
Speaker 17: Can you pass along price increases?

576
00:29:18,600 --> 00:29:21,480
Speaker 9: Though we try not to, Okay, so that's a great part.

577
00:29:21,480 --> 00:29:22,120
Speaker 9: So we try not to.

578
00:29:22,160 --> 00:29:24,040
Speaker 16: So when our raw material prices go up, we try

579
00:29:24,120 --> 00:29:26,720
Speaker 16: desperately not to. But here's the thing. Our biggest cost

580
00:29:26,880 --> 00:29:30,080
Speaker 16: is labor. That is drivers. We have to pay them

581
00:29:30,120 --> 00:29:32,040
Speaker 16: well in order for them to work on our platform.

582
00:29:32,240 --> 00:29:34,760
Speaker 9: So to a certain extent, we have to pass prices along.

583
00:29:34,800 --> 00:29:36,680
Speaker 17: We're going to get more into that in just a second. Jason,

584
00:29:36,680 --> 00:29:38,920
Speaker 17: what about from your perspective, how much you're seeing the

585
00:29:38,960 --> 00:29:42,400
Speaker 17: sort of concern about cost of living percolating through the business.

586
00:29:42,760 --> 00:29:46,640
Speaker 18: Yeah, Like David mentioned, I'm seeing a K shaped economy

587
00:29:46,640 --> 00:29:50,200
Speaker 18: here as well. I oversee all of our Amazon grocery

588
00:29:50,240 --> 00:29:53,240
Speaker 18: business worldwide as well as whole foods.

589
00:29:52,960 --> 00:29:55,320
Speaker 6: Market, and so we've got some consumers who are.

590
00:29:55,280 --> 00:30:01,040
Speaker 18: Really focused on quality and differentiation others around is the

591
00:30:01,080 --> 00:30:05,080
Speaker 18: lowest cost that I can get for products, and across

592
00:30:05,080 --> 00:30:08,040
Speaker 18: the grocery space, what we're seeing is customers are no

593
00:30:08,120 --> 00:30:10,959
Speaker 18: longer having a primary grocer. Over half of customers are

594
00:30:10,960 --> 00:30:13,959
Speaker 18: in a situation where they are shopping many different retailers

595
00:30:13,960 --> 00:30:16,400
Speaker 18: three to four a week, and they're doing that to

596
00:30:16,480 --> 00:30:19,640
Speaker 18: find the best deals and values, getting a selection that

597
00:30:19,680 --> 00:30:22,120
Speaker 18: they're looking for, and they're having to navigate a very

598
00:30:22,160 --> 00:30:25,400
Speaker 18: complex environment, but they're willing to do so. They're also

599
00:30:25,400 --> 00:30:28,760
Speaker 18: buying things much more real time. So instead of doing

600
00:30:29,120 --> 00:30:31,520
Speaker 18: a shop up or a stock up for one or

601
00:30:31,520 --> 00:30:35,040
Speaker 18: two weeks, they're buying shopping multiple times.

602
00:30:35,120 --> 00:30:36,680
Speaker 6: And they're doing this for two reasons.

603
00:30:36,680 --> 00:30:39,080
Speaker 18: One, they're trying to stretch the dollars that they have

604
00:30:39,200 --> 00:30:41,800
Speaker 18: based upon their immediate need that they have. And then

605
00:30:41,800 --> 00:30:43,400
Speaker 18: at the same time, when you do a two week

606
00:30:43,440 --> 00:30:45,080
Speaker 18: shop up, you're gonna have a lot more food waste,

607
00:30:45,120 --> 00:30:47,080
Speaker 18: and so you're actually wasting the dollars that you've spent

608
00:30:47,160 --> 00:30:47,320
Speaker 18: on it.

609
00:30:47,280 --> 00:30:49,640
Speaker 6: And so I think we're seeing a space here.

610
00:30:49,560 --> 00:30:51,880
Speaker 18: Where customers are being much more conscious around how they're

611
00:30:51,880 --> 00:30:54,040
Speaker 18: spending their dollars in the grocery space.

612
00:30:53,920 --> 00:30:56,640
Speaker 17: And are you able to pass along price increases because

613
00:30:56,720 --> 00:30:59,280
Speaker 17: of the bifurcation of the people who are able to

614
00:30:59,360 --> 00:31:01,200
Speaker 17: pay versus those who cannot.

615
00:31:01,520 --> 00:31:03,400
Speaker 18: Yeah, our focus here has actually been trying to find

616
00:31:03,440 --> 00:31:06,160
Speaker 18: ways with our suppliers where are not passing on and

617
00:31:06,200 --> 00:31:08,320
Speaker 18: seeing those impacts.

618
00:31:08,160 --> 00:31:09,280
Speaker 6: At the item level.

619
00:31:09,320 --> 00:31:11,840
Speaker 18: Now, in some cases we've got areas I take beef

620
00:31:11,880 --> 00:31:14,080
Speaker 18: is a great fit, great example. We've seen a lot

621
00:31:14,080 --> 00:31:16,200
Speaker 18: of inflation. Some of that cost is going to get

622
00:31:16,240 --> 00:31:19,240
Speaker 18: passed on to the customer. But our focus has been

623
00:31:19,440 --> 00:31:21,760
Speaker 18: how do we actually find ways within other parts of

624
00:31:21,800 --> 00:31:24,640
Speaker 18: the business so we can invest in price. We've doubled

625
00:31:24,680 --> 00:31:27,560
Speaker 18: the number of promotions within the Whole Food's Market banner.

626
00:31:28,080 --> 00:31:32,360
Speaker 18: We've reduced prices across thirteen thousand grocery items within Amazon,

627
00:31:32,720 --> 00:31:34,240
Speaker 18: and so at this point, we want to make sure

628
00:31:34,240 --> 00:31:36,400
Speaker 18: that we can be relevant to the situation that our

629
00:31:36,440 --> 00:31:37,600
Speaker 18: customers are experiencing.

630
00:31:38,200 --> 00:31:41,720
Speaker 17: President Kashgari, it brings us to you because right now

631
00:31:41,720 --> 00:31:44,400
Speaker 17: people are taking a look at core PC, which just

632
00:31:44,480 --> 00:31:46,680
Speaker 17: came in at the highest pace going back to twenty

633
00:31:46,760 --> 00:31:50,080
Speaker 17: twenty three that was reported just earlier this week. We

634
00:31:50,120 --> 00:31:52,960
Speaker 17: see PCE coming in at four point one percent, accelerating in.

635
00:31:52,960 --> 00:31:53,600
Speaker 6: The wrong direction.

636
00:31:54,400 --> 00:31:57,240
Speaker 17: What's the FEDS role and trying to curb some of

637
00:31:57,240 --> 00:31:59,440
Speaker 17: this inflation that seems to be moving in the wrong direction.

638
00:32:00,240 --> 00:32:02,600
Speaker 19: First of all, thanks for having me, and please call

639
00:32:02,640 --> 00:32:07,080
Speaker 19: me Neil. Our role is our job is to get

640
00:32:07,080 --> 00:32:09,040
Speaker 19: inflation back down to two percent. I mean, there's no

641
00:32:09,080 --> 00:32:12,560
Speaker 19: ambiguity about whose responsibility that is. It's our job. We

642
00:32:12,560 --> 00:32:15,080
Speaker 19: were created by Congress in nineteen thirteen. They've given us

643
00:32:15,080 --> 00:32:19,040
Speaker 19: two goals, two primary goals, maximum employment as many Americans

644
00:32:19,120 --> 00:32:22,240
Speaker 19: working as possible, and stable prices what we have defined

645
00:32:22,240 --> 00:32:24,360
Speaker 19: as two percent inflation. So it is our job to

646
00:32:24,360 --> 00:32:27,000
Speaker 19: get inflation back down to two percent. It's been made

647
00:32:27,200 --> 00:32:29,600
Speaker 19: much more challenging because they've been all of these what

648
00:32:29,720 --> 00:32:33,280
Speaker 19: we call supply shocks hitting the economy. Obviously COVID and

649
00:32:33,320 --> 00:32:39,720
Speaker 19: supply chains, Russia invading Ukraine, tariffs affecting inflation, the Iran

650
00:32:39,800 --> 00:32:44,600
Speaker 19: War infecting inflation. Immigration changes can have effects on inflation,

651
00:32:45,520 --> 00:32:47,200
Speaker 19: and now, of course the data center build out, which

652
00:32:47,200 --> 00:32:49,440
Speaker 19: I'm sure we're going to talk about, which may have

653
00:32:49,560 --> 00:32:52,720
Speaker 19: disinflationary effects for the long term, but it's certainly putting

654
00:32:52,720 --> 00:32:55,240
Speaker 19: pressure on prices in some sectors of the economy today.

655
00:32:55,400 --> 00:32:57,920
Speaker 19: So it's a complicated environment, but it is our job

656
00:32:57,960 --> 00:32:59,480
Speaker 19: to get inflation back down to two percent.

657
00:32:59,560 --> 00:33:01,320
Speaker 17: Do you think it's behind the curve the Federal Reserve.

658
00:33:02,120 --> 00:33:04,120
Speaker 19: I think inflation has been too high for five years,

659
00:33:04,240 --> 00:33:06,640
Speaker 19: so I mean, I think that's one way of saying

660
00:33:06,680 --> 00:33:08,520
Speaker 19: behind the curve. We need to get it back down,

661
00:33:09,400 --> 00:33:11,320
Speaker 19: and I know we're committed to getting it back down,

662
00:33:11,760 --> 00:33:14,440
Speaker 19: and the question is how much. The thing we wrestle

663
00:33:14,480 --> 00:33:17,440
Speaker 19: with is we could move interest rates up as high

664
00:33:17,480 --> 00:33:20,920
Speaker 19: as we need to to get inflation down quickly, that

665
00:33:21,000 --> 00:33:22,880
Speaker 19: will cause a lot of harm to the economy. That

666
00:33:22,920 --> 00:33:25,080
Speaker 19: will cause a lot of harm to labor market and

667
00:33:25,120 --> 00:33:28,200
Speaker 19: to employment. And so how do we get inflation back

668
00:33:28,240 --> 00:33:30,880
Speaker 19: down in a reasonable period of time without doing a

669
00:33:30,920 --> 00:33:33,040
Speaker 19: lot of damage to the labor market. And that's the

670
00:33:33,200 --> 00:33:34,440
Speaker 19: challenge that we're wrestling with.

671
00:33:34,960 --> 00:33:37,360
Speaker 17: Just before we move to Betsy, do you anticipate rate

672
00:33:37,440 --> 00:33:39,480
Speaker 17: hikes this year as a result of the fact that

673
00:33:39,520 --> 00:33:41,720
Speaker 17: the market's pricing it in and you're not seeing harm

674
00:33:41,760 --> 00:33:43,440
Speaker 17: being priced in through the equity market.

675
00:33:44,040 --> 00:33:45,920
Speaker 19: I penciled in. There's this thing that gets a lot

676
00:33:45,920 --> 00:33:48,600
Speaker 19: of attention called the dot plot, where the Fed pencils

677
00:33:48,600 --> 00:33:51,760
Speaker 19: in expectations for where interest rates are going. In March,

678
00:33:51,840 --> 00:33:54,080
Speaker 19: I had penciled in one rate cut by the end

679
00:33:54,120 --> 00:33:58,000
Speaker 19: of the year. In June, I've changed that to one

680
00:33:58,080 --> 00:34:00,280
Speaker 19: rate hike by the end of the year. It's a

681
00:34:00,320 --> 00:34:02,400
Speaker 19: pencil and so we're going to have to see how

682
00:34:02,400 --> 00:34:05,200
Speaker 19: the data comes in. You know, I don't trust Iran

683
00:34:05,320 --> 00:34:07,800
Speaker 19: to honor whatever agreement has been made there's some evidence

684
00:34:08,080 --> 00:34:12,000
Speaker 19: overnight that they're already renegging on it. So I certainly

685
00:34:12,040 --> 00:34:14,680
Speaker 19: am not seeing all clear coming out of the Middle East,

686
00:34:14,840 --> 00:34:17,759
Speaker 19: and that makes me cautious about feeling too good that

687
00:34:17,840 --> 00:34:19,720
Speaker 19: the worst is behind us, Betsy.

688
00:34:20,000 --> 00:34:22,920
Speaker 17: When it comes to understanding the data and the sentiment

689
00:34:23,120 --> 00:34:26,160
Speaker 17: versus on the ground, this very complicated dynamic of some

690
00:34:26,200 --> 00:34:28,719
Speaker 17: people able to buy black cars, are able to buy

691
00:34:28,800 --> 00:34:33,040
Speaker 17: Halibit premium that is fresh, versus people who are shopping

692
00:34:33,080 --> 00:34:35,279
Speaker 17: at three different places. And then you take a look

693
00:34:35,280 --> 00:34:37,640
Speaker 17: at the consumer sentiment survey, the second lowest going back

694
00:34:37,640 --> 00:34:40,279
Speaker 17: to the nineteen seventies as released this morning, when you

695
00:34:40,360 --> 00:34:44,360
Speaker 17: look at some of the lower end retailers that are

696
00:34:44,400 --> 00:34:48,680
Speaker 17: seeing this pressure, how do you reconcile the sentiment with

697
00:34:48,800 --> 00:34:51,719
Speaker 17: the data that suggests that people still are spending and

698
00:34:51,719 --> 00:34:55,600
Speaker 17: that there still is plenty of price pressures in the works.

699
00:34:56,160 --> 00:34:59,040
Speaker 20: Yeah, So, first, I don't think we're quite in the

700
00:34:59,120 --> 00:35:02,839
Speaker 20: vibe session were in in twenty two twenty twenty three,

701
00:35:03,320 --> 00:35:07,920
Speaker 20: where inflation shot up unexpectedly and then was starting to

702
00:35:07,960 --> 00:35:10,720
Speaker 20: come down, but the labor market was kind of on fire.

703
00:35:11,000 --> 00:35:14,919
Speaker 20: Like you, there were plenty of jobs, people were able

704
00:35:14,960 --> 00:35:18,240
Speaker 20: to move jobs, there were lots of wage increases because

705
00:35:18,719 --> 00:35:20,680
Speaker 20: you know you're in your job and you want to

706
00:35:20,719 --> 00:35:23,719
Speaker 20: earn more. The best way, the way most Americans really

707
00:35:23,719 --> 00:35:26,359
Speaker 20: get a raise is by changing jobs. And there were

708
00:35:26,680 --> 00:35:31,719
Speaker 20: tons of openings. People were still unhappy. Now we're in

709
00:35:31,760 --> 00:35:35,600
Speaker 20: a different situation where they're still unhappy and we don't

710
00:35:35,640 --> 00:35:38,439
Speaker 20: even have like the job security blanket. And I think

711
00:35:38,640 --> 00:35:41,160
Speaker 20: what's making the Fed's job really difficult is there is

712
00:35:41,200 --> 00:35:44,080
Speaker 20: a lot of hiring going on. There's it looks like

713
00:35:44,120 --> 00:35:47,319
Speaker 20: we're it's something like full employment. But if you're in

714
00:35:47,360 --> 00:35:51,200
Speaker 20: a job and you're like, I can't make ends meet,

715
00:35:51,320 --> 00:35:54,560
Speaker 20: I need a better job with more pay, there's not

716
00:35:54,680 --> 00:35:57,400
Speaker 20: a lot of openings. There's not as many opportunities for

717
00:35:57,440 --> 00:35:58,400
Speaker 20: that mobility.

718
00:35:58,680 --> 00:36:00,440
Speaker 6: So when we think about the K.

719
00:36:00,560 --> 00:36:02,440
Speaker 20: Shaped economy, I want to start thinking about it a

720
00:36:02,480 --> 00:36:05,360
Speaker 20: little bit more broader. It's not just like high income

721
00:36:05,440 --> 00:36:09,520
Speaker 20: people versus low income people. It's some of it's about

722
00:36:09,840 --> 00:36:13,680
Speaker 20: people who did get some opportunity and have been able

723
00:36:13,680 --> 00:36:16,279
Speaker 20: to keep up with inflation, so they're doing okay, but

724
00:36:16,400 --> 00:36:19,440
Speaker 20: some other people who have not, and they are literally

725
00:36:19,480 --> 00:36:21,759
Speaker 20: worse off today than they were a couple of years ago.

726
00:36:22,960 --> 00:36:25,920
Speaker 20: And I want us to think about it generationally, because

727
00:36:25,920 --> 00:36:27,879
Speaker 20: there's a lot of young people that are feeling very

728
00:36:27,880 --> 00:36:30,200
Speaker 20: locked out, locked out of the labor market, locked out

729
00:36:30,200 --> 00:36:34,360
Speaker 20: of the housing market, locked out of any kind of savings,

730
00:36:35,080 --> 00:36:39,280
Speaker 20: overburdened with student loans. And they're looking at an older

731
00:36:39,320 --> 00:36:45,080
Speaker 20: generation whose housing prices have you know, appreciated substantially, which

732
00:36:45,080 --> 00:36:49,080
Speaker 20: is why they can't afford housing, whether whose stock portfolios

733
00:36:49,120 --> 00:36:53,200
Speaker 20: have grown. And so we're seeing some generational tension, and

734
00:36:53,280 --> 00:36:56,160
Speaker 20: so I want to them bring that back to what

735
00:36:56,280 --> 00:36:59,319
Speaker 20: is this underlying thing that we've been seeing going on.

736
00:36:59,400 --> 00:37:02,960
Speaker 20: We're consumers are just telling us they're unhappy. It is

737
00:37:03,040 --> 00:37:05,520
Speaker 20: more than just the state of the economy right now.

738
00:37:06,080 --> 00:37:08,960
Speaker 20: We've been seeing declining trust in big business.

739
00:37:09,520 --> 00:37:10,440
Speaker 6: You know, we've seen.

740
00:37:10,239 --> 00:37:13,880
Speaker 20: Declining trust in government for like fifteen years, but actually

741
00:37:13,920 --> 00:37:18,560
Speaker 20: even during the two thousand and eight re session, we

742
00:37:18,680 --> 00:37:19,520
Speaker 20: still kind.

743
00:37:19,280 --> 00:37:23,160
Speaker 6: Of believed in business. Not so much anymore.

744
00:37:23,320 --> 00:37:28,759
Speaker 20: We're also seeing huge declining trust in capitalism overall. What's

745
00:37:28,840 --> 00:37:31,200
Speaker 20: interesting to me when I dig into the data is

746
00:37:31,560 --> 00:37:33,800
Speaker 20: people still trust free enterprise.

747
00:37:34,520 --> 00:37:36,000
Speaker 6: So what they're basically.

748
00:37:35,560 --> 00:37:38,520
Speaker 20: Saying is big business today is not the free enterprise

749
00:37:38,600 --> 00:37:42,719
Speaker 20: of the past. It's a machine that's out to screw me,

750
00:37:43,360 --> 00:37:45,680
Speaker 20: and so they are really feeling like there's a huge

751
00:37:45,719 --> 00:37:48,879
Speaker 20: hassle factor where it's like a cat and mouse game

752
00:37:48,920 --> 00:37:51,000
Speaker 20: with a business trying to get them and then trying

753
00:37:51,040 --> 00:37:53,280
Speaker 20: to figure out how they get back at the business.

754
00:37:54,280 --> 00:37:57,840
Speaker 20: That sentiment, I don't even know that it's just you know,

755
00:37:58,040 --> 00:38:00,880
Speaker 20: narrowed in on the economy, may actually explain some of

756
00:38:00,920 --> 00:38:05,319
Speaker 20: our politics too, you know, this sort of real frustration

757
00:38:05,440 --> 00:38:10,520
Speaker 20: that I got to defend myself in this you know, volatile,

758
00:38:10,760 --> 00:38:13,080
Speaker 20: angry economy where everybody's out to get me.

759
00:38:13,160 --> 00:38:14,160
Speaker 6: There's a lot to unpack there.

760
00:38:14,200 --> 00:38:16,400
Speaker 17: I want to start with the first point about employment,

761
00:38:16,480 --> 00:38:18,719
Speaker 17: because ultimately a lot of it does come down to

762
00:38:19,080 --> 00:38:21,000
Speaker 17: what job you can get and how much you're paid.

763
00:38:21,160 --> 00:38:23,160
Speaker 17: And David, from your perspective, you are hinting at this,

764
00:38:23,280 --> 00:38:26,160
Speaker 17: you need to pay people enough to attract them. How

765
00:38:26,160 --> 00:38:28,600
Speaker 17: easy is it to hire, and how much are you

766
00:38:29,160 --> 00:38:31,600
Speaker 17: having to wanting to whatever? How much are you raising

767
00:38:31,640 --> 00:38:34,120
Speaker 17: salaries for your drivers at a time of a lot

768
00:38:34,120 --> 00:38:36,759
Speaker 17: of change and a time of a lot of a

769
00:38:36,760 --> 00:38:38,240
Speaker 17: lot of questions around the labor market.

770
00:38:38,400 --> 00:38:39,720
Speaker 9: So here's what's interesting.

771
00:38:39,760 --> 00:38:41,840
Speaker 16: We have more drivers on the lift platform than we

772
00:38:41,840 --> 00:38:43,880
Speaker 16: have ever had in our history. One point five million

773
00:38:43,880 --> 00:38:46,480
Speaker 16: people drive on the lift platform every year, and I

774
00:38:46,520 --> 00:38:48,960
Speaker 16: think what that suggests, honestly, is a little bit of

775
00:38:48,960 --> 00:38:51,480
Speaker 16: what Betsy's talking about. You have a lot of people

776
00:38:51,520 --> 00:38:54,040
Speaker 16: who feel that they, even if they have a nine

777
00:38:54,080 --> 00:38:56,399
Speaker 16: to five job or some sort of regular job, need

778
00:38:56,440 --> 00:38:57,800
Speaker 16: to have a little bit more right. They want to

779
00:38:57,800 --> 00:38:59,640
Speaker 16: save up for their kids' education, they want to save

780
00:38:59,680 --> 00:39:01,440
Speaker 16: up for to Hawaii, whatever it is.

781
00:39:01,680 --> 00:39:02,319
Speaker 9: And so for a lot of.

782
00:39:02,280 --> 00:39:03,960
Speaker 16: People, about eighty five percent of people who drive on

783
00:39:03,960 --> 00:39:06,120
Speaker 16: the lift platform are doing it part time, and a

784
00:39:06,120 --> 00:39:07,759
Speaker 16: lot of them, frankly, are doing it as sort of

785
00:39:07,760 --> 00:39:10,200
Speaker 16: supplemental income to get to the point where they feel

786
00:39:10,200 --> 00:39:11,640
Speaker 16: like they can sort of make it to the.

787
00:39:11,600 --> 00:39:12,080
Speaker 9: End of the week.

788
00:39:12,239 --> 00:39:15,839
Speaker 16: You know, whole all in, gas prices are tricky for us.

789
00:39:16,160 --> 00:39:17,960
Speaker 16: You just mentioned this, Neil. By the way, Neil loven't

790
00:39:18,000 --> 00:39:19,759
Speaker 16: the hairstyle. I don't think we've got a chance to

791
00:39:19,800 --> 00:39:20,279
Speaker 16: talk about this.

792
00:39:21,239 --> 00:39:22,640
Speaker 6: I'll give you a good ten minute.

793
00:39:22,680 --> 00:39:24,160
Speaker 16: Let's just get we're super good if we could just

794
00:39:24,200 --> 00:39:27,040
Speaker 16: have a moment on this, use it anyway. I hadn't

795
00:39:27,040 --> 00:39:29,600
Speaker 16: really gotten a chance to focus on them before anyway. No,

796
00:39:29,680 --> 00:39:32,640
Speaker 16: but so as gas prices go up, obviously drivers start

797
00:39:32,680 --> 00:39:34,600
Speaker 16: to feel pinch because they're responsible for paying for their

798
00:39:34,600 --> 00:39:37,279
Speaker 16: own gas prices. So that forces us to go to

799
00:39:37,320 --> 00:39:39,239
Speaker 16: work with third parties to try to figure out how

800
00:39:39,239 --> 00:39:42,680
Speaker 16: can we create better deals so that they can save eight, ten, twelve, fifteen,

801
00:39:42,760 --> 00:39:44,759
Speaker 16: twenty cents at the pump. So I guess sort of

802
00:39:44,800 --> 00:39:48,160
Speaker 16: the general point would be, we have to raise salaries

803
00:39:48,160 --> 00:39:50,400
Speaker 16: wages over time, of course, to attract we're doing that.

804
00:39:50,400 --> 00:39:52,440
Speaker 9: That's why we have more drivers on the platform.

805
00:39:52,120 --> 00:39:53,920
Speaker 16: Than ever, and we have to figure out a way

806
00:39:53,960 --> 00:39:56,520
Speaker 16: to frankly not pass all those costs along the consumers

807
00:39:56,960 --> 00:39:59,120
Speaker 16: because otherwise they'll get very angry with this. So it's

808
00:39:59,160 --> 00:40:01,600
Speaker 16: kind of interesting bestia Utah, because it's true consumers are

809
00:40:01,640 --> 00:40:03,719
Speaker 16: very frustrated. I think business is in a sense of

810
00:40:03,800 --> 00:40:06,120
Speaker 16: frustrated as well, Like we're all trying super hard to

811
00:40:06,120 --> 00:40:09,280
Speaker 16: make this work for y'all, but it's not easy.

812
00:40:09,560 --> 00:40:10,400
Speaker 6: Jason, what about you?

813
00:40:11,040 --> 00:40:13,880
Speaker 18: Yeah, you know, I would say coming out of the pandemic,

814
00:40:14,280 --> 00:40:18,359
Speaker 18: staffing was a challenge for several years. You had some

815
00:40:18,400 --> 00:40:22,680
Speaker 18: folks who decided to pull out of the workforce all together.

816
00:40:23,480 --> 00:40:24,920
Speaker 6: There was just a lot of challenges.

817
00:40:25,120 --> 00:40:27,120
Speaker 18: As Betsu was pointing to a lot of availability where

818
00:40:27,120 --> 00:40:29,920
Speaker 18: people can jump to and it took a little bit

819
00:40:29,960 --> 00:40:31,920
Speaker 18: for us to help balance that out. We did a

820
00:40:31,920 --> 00:40:36,160
Speaker 18: lot of investment in based wages benefits, also looked at

821
00:40:36,160 --> 00:40:40,160
Speaker 18: ways to offer training and development. One of the areas

822
00:40:40,200 --> 00:40:41,640
Speaker 18: that you know, folks worry about is like, how do

823
00:40:41,719 --> 00:40:44,239
Speaker 18: I have job security going forward? So we did some

824
00:40:44,280 --> 00:40:47,759
Speaker 18: work in adding apprentice programs where team members have the

825
00:40:47,760 --> 00:40:50,640
Speaker 18: ability to be certified in a trade that can both

826
00:40:50,640 --> 00:40:53,320
Speaker 18: support their career at Whole Foods Market and an Amazon

827
00:40:53,920 --> 00:40:56,080
Speaker 18: or more broadly, and we've seen a lot of success

828
00:40:56,440 --> 00:40:57,359
Speaker 18: in that space as well.

829
00:40:57,400 --> 00:40:59,560
Speaker 6: And the last area is adding flexibility.

830
00:41:00,160 --> 00:41:02,160
Speaker 18: We know that you know, there's a lot of folks

831
00:41:02,160 --> 00:41:05,680
Speaker 18: who prefer to work multiple part time jobs because they

832
00:41:05,680 --> 00:41:08,360
Speaker 18: want to have balance in between different commitments that they

833
00:41:08,440 --> 00:41:10,480
Speaker 18: might have with school or work or what have you.

834
00:41:10,520 --> 00:41:11,960
Speaker 6: And so finding ways.

835
00:41:11,719 --> 00:41:14,680
Speaker 18: By which we could meet both what our employees and

836
00:41:14,680 --> 00:41:17,600
Speaker 18: team members are looking for from an employment offering perspective

837
00:41:17,640 --> 00:41:20,800
Speaker 18: as well as the flexibility into how they work their jobs.

838
00:41:20,800 --> 00:41:22,520
Speaker 18: And I'm proud to say we're back to the spot

839
00:41:22,520 --> 00:41:24,759
Speaker 18: where we are at staffing levels before we were at

840
00:41:24,800 --> 00:41:28,440
Speaker 18: at the pandemic, and in some sites and locations we

841
00:41:29,080 --> 00:41:32,000
Speaker 18: actually have no availability and demand for folks wanting to

842
00:41:32,000 --> 00:41:32,440
Speaker 18: come in and.

843
00:41:32,400 --> 00:41:35,400
Speaker 17: Work at a certain point. Are you able to raise wages?

844
00:41:35,440 --> 00:41:38,480
Speaker 17: Are you willing to raise wages? Are these higher paid jobs?

845
00:41:38,719 --> 00:41:41,000
Speaker 17: Are they same wage jobs or lower wage jobs? What's

846
00:41:41,000 --> 00:41:41,839
Speaker 17: the character of them?

847
00:41:42,040 --> 00:41:44,520
Speaker 6: No, I'd tell you over that timeframe I was speaking to.

848
00:41:44,640 --> 00:41:47,840
Speaker 18: Since the pandemic, we've actually had to raise you base wages.

849
00:41:47,880 --> 00:41:50,799
Speaker 18: We've enhanced the benefits that we've been offering, and a

850
00:41:50,800 --> 00:41:52,960
Speaker 18: piece of that is being competitive but also making sure

851
00:41:52,960 --> 00:41:55,239
Speaker 18: that we can offer a great experience. You know, one

852
00:41:55,280 --> 00:41:57,680
Speaker 18: of our jobs is we don't want somebody, you know,

853
00:41:57,920 --> 00:42:00,160
Speaker 18: who doesn't look at this as being a career opportunity.

854
00:42:00,239 --> 00:42:02,640
Speaker 18: We will have some folks where that is they're looking

855
00:42:02,640 --> 00:42:05,200
Speaker 18: for something right now, and that's great. But what we

856
00:42:05,239 --> 00:42:06,480
Speaker 18: want to be able to do is we've got a

857
00:42:06,520 --> 00:42:08,960
Speaker 18: lot of growth that we've got if then our grocery

858
00:42:09,000 --> 00:42:12,760
Speaker 18: business more broadly and being able to have the expertise

859
00:42:13,280 --> 00:42:15,440
Speaker 18: is a differentiation for us when we look inside of

860
00:42:15,440 --> 00:42:19,360
Speaker 18: our stores, our customers are coming because of the experience,

861
00:42:19,480 --> 00:42:22,600
Speaker 18: expertise in customer service that our team members are able

862
00:42:22,640 --> 00:42:25,279
Speaker 18: to provide, and so for us, we want to make

863
00:42:25,280 --> 00:42:27,360
Speaker 18: sure that we can have a career that can be

864
00:42:27,440 --> 00:42:28,760
Speaker 18: meaningful for them.

865
00:42:28,920 --> 00:42:30,839
Speaker 17: Neil, how a would you characterize labor market right now?

866
00:42:30,840 --> 00:42:34,160
Speaker 17: Because what I'm hearing is very difficult to characterize. On

867
00:42:34,160 --> 00:42:36,319
Speaker 17: one hand, wages are going up. On the other hand,

868
00:42:36,320 --> 00:42:38,440
Speaker 17: gigwork is also going up because people are having to

869
00:42:38,480 --> 00:42:42,000
Speaker 17: work multiple jobs. Betsy was talking about how it doesn't

870
00:42:42,040 --> 00:42:44,560
Speaker 17: look like the twenty twenty one type of market. How

871
00:42:44,560 --> 00:42:48,040
Speaker 17: do you understand labor when it comes to the inflation picture.

872
00:42:48,120 --> 00:42:50,560
Speaker 19: Yeah, well, I agree with Betsy. It definitely is not

873
00:42:50,600 --> 00:42:52,680
Speaker 19: a hot labor market like it was a few years ago,

874
00:42:52,719 --> 00:42:55,400
Speaker 19: where businesses are desperate to keep the workers that they

875
00:42:55,440 --> 00:42:58,080
Speaker 19: have let alone to hire more workers. It is definitely

876
00:42:58,080 --> 00:43:01,360
Speaker 19: cooled off. I would call it a decent labor market

877
00:43:01,600 --> 00:43:05,400
Speaker 19: that's mostly moving sideways. It's kind of treading water labor market.

878
00:43:05,440 --> 00:43:07,200
Speaker 19: So it's not in a bad place, but it's not

879
00:43:07,280 --> 00:43:09,840
Speaker 19: in a great place either. Labor is not what's driving

880
00:43:09,880 --> 00:43:13,440
Speaker 19: the inflation. Wages have not kept up recently with inflation.

881
00:43:13,800 --> 00:43:17,840
Speaker 19: The inflation is being driven by supply dynamics. So whether

882
00:43:17,880 --> 00:43:20,480
Speaker 19: it's tariffs pushing up the price of goods that we

883
00:43:20,560 --> 00:43:24,840
Speaker 19: buy from abroad, it's the fertilizer that's been disrupted because

884
00:43:24,880 --> 00:43:26,959
Speaker 19: of the strait of horror moves and energy and oil

885
00:43:27,000 --> 00:43:30,359
Speaker 19: prices from the strait of horror moves, so supply dynamics.

886
00:43:30,600 --> 00:43:34,720
Speaker 19: And then it's also being driven by massive investment hundreds

887
00:43:34,719 --> 00:43:37,120
Speaker 19: of billions of dollars a year in the data centers

888
00:43:37,160 --> 00:43:40,000
Speaker 19: and all of the associated infrastructure that goes with that,

889
00:43:40,120 --> 00:43:43,839
Speaker 19: anything that touches those sectors. The prices are skyrocketing on

890
00:43:43,880 --> 00:43:47,640
Speaker 19: those parts of the economy. It's not wages though, I mean, yeah,

891
00:43:47,719 --> 00:43:52,080
Speaker 19: wages for special the electrical technicians to work to build

892
00:43:52,160 --> 00:43:55,719
Speaker 19: data centers, yes, but not wages broadly across the economy.

893
00:43:56,320 --> 00:43:59,319
Speaker 19: And so it's a complicated environment. I mean, one of

894
00:43:59,320 --> 00:44:02,920
Speaker 19: the challenges for central banker is most of the analytical

895
00:44:03,000 --> 00:44:07,040
Speaker 19: tools that we have to try to analyze inflation start

896
00:44:07,120 --> 00:44:10,080
Speaker 19: in the labor market, and yet the labor market is

897
00:44:10,120 --> 00:44:13,000
Speaker 19: not causing the inflation, and so we're having to re

898
00:44:13,120 --> 00:44:16,440
Speaker 19: examine even how we think about what causes inflation, and

899
00:44:16,480 --> 00:44:19,799
Speaker 19: that makes it a particularly challenging analytical moment for us

900
00:44:19,840 --> 00:44:20,240
Speaker 19: as well.

901
00:44:20,960 --> 00:44:24,040
Speaker 17: Is there a historical analog where inflation can remain persistent

902
00:44:24,040 --> 00:44:25,120
Speaker 17: without wages keeping up?

903
00:44:26,160 --> 00:44:29,200
Speaker 19: Eventually wages have to catch up, I mean eventually, so

904
00:44:29,480 --> 00:44:32,720
Speaker 19: it may be that wages are not causing the inflation

905
00:44:32,880 --> 00:44:36,560
Speaker 19: right now, but workers ultimately are going to demand that

906
00:44:36,600 --> 00:44:39,319
Speaker 19: they be able to make their base against me, that

907
00:44:39,360 --> 00:44:42,160
Speaker 19: their needs be met. And so one of the challenges is,

908
00:44:42,239 --> 00:44:45,960
Speaker 19: even if these supply dynamics fade, I would expect wages

909
00:44:46,000 --> 00:44:49,560
Speaker 19: to continue then climbing to enable workers to slowly catch up.

910
00:44:50,200 --> 00:44:53,880
Speaker 19: So that may not be putting pressure on inflation going forward,

911
00:44:54,280 --> 00:44:56,680
Speaker 19: but it may cause inflation to fall a little less

912
00:44:56,760 --> 00:45:00,520
Speaker 19: quickly than it otherwise would. And so again, very implicated

913
00:45:00,840 --> 00:45:02,279
Speaker 19: set of dynamics going on right.

914
00:45:02,200 --> 00:45:04,239
Speaker 17: Now underpanning all of this, Betsy, and I'd love you

915
00:45:04,320 --> 00:45:06,640
Speaker 17: to weigh in on this as AI, and we hear

916
00:45:06,640 --> 00:45:08,360
Speaker 17: that with Data Center, as you hear that with respect

917
00:45:08,400 --> 00:45:10,600
Speaker 17: to how people are trying to make supply chains more efficient,

918
00:45:11,280 --> 00:45:14,399
Speaker 17: do you have a sense of how that's affecting sort

919
00:45:14,400 --> 00:45:16,239
Speaker 17: of this labor market dynamic right now? Do we have

920
00:45:16,280 --> 00:45:20,960
Speaker 17: a sense of whether that's lowering wages in certain places

921
00:45:21,080 --> 00:45:23,760
Speaker 17: or putting a tap on things, or making people feel

922
00:45:23,760 --> 00:45:24,280
Speaker 17: in flux.

923
00:45:25,920 --> 00:45:28,879
Speaker 20: I think for sure people feel a lot of uncertainty,

924
00:45:29,320 --> 00:45:32,920
Speaker 20: and that uncertainty is making people feel bad. And I

925
00:45:33,000 --> 00:45:36,200
Speaker 20: think it's really important that we all recognize that you

926
00:45:36,840 --> 00:45:40,040
Speaker 20: do have some young people in the audience. And I

927
00:45:40,080 --> 00:45:44,840
Speaker 20: was giving a talk on AI at a university and

928
00:45:44,880 --> 00:45:47,600
Speaker 20: a student came up to me and he said, I've

929
00:45:47,640 --> 00:45:49,839
Speaker 20: pushed all my chips across the table to be here.

930
00:45:49,880 --> 00:45:52,239
Speaker 20: I'm going to have so much student loans and I'm

931
00:45:52,280 --> 00:45:55,919
Speaker 20: worried my entire investment is going to be worthless. Can

932
00:45:55,920 --> 00:45:56,960
Speaker 20: you tell me that it won't be?

933
00:45:57,840 --> 00:46:02,080
Speaker 6: And I really struggled because is like, no, I actually

934
00:46:02,120 --> 00:46:02,760
Speaker 6: really can't.

935
00:46:03,080 --> 00:46:07,080
Speaker 20: Like so it's I just want you to sit with

936
00:46:07,120 --> 00:46:09,360
Speaker 20: that for a minute, to think about how much uncertainty

937
00:46:09,560 --> 00:46:12,839
Speaker 20: and risk and anxiety that young people are living with

938
00:46:12,920 --> 00:46:14,880
Speaker 20: right now. It's not that we actually look at the

939
00:46:14,920 --> 00:46:17,680
Speaker 20: data and we see clearly that there are tons of problems,

940
00:46:18,560 --> 00:46:20,759
Speaker 20: but I think that there's a lot of fear. What

941
00:46:20,840 --> 00:46:23,360
Speaker 20: we can see in the data is it's a terrible

942
00:46:23,400 --> 00:46:25,920
Speaker 20: time to come out with like a data science or

943
00:46:26,000 --> 00:46:33,440
Speaker 20: a you know, coding Like it's very narrow degrees that

944
00:46:34,080 --> 00:46:36,319
Speaker 20: you know, now we have AI doing a ton of it.

945
00:46:36,920 --> 00:46:39,560
Speaker 20: There's worry that there's going to be contagion to a

946
00:46:39,640 --> 00:46:42,319
Speaker 20: much broader set of white collar jobs and that it's

947
00:46:42,360 --> 00:46:46,960
Speaker 20: going to impact young people first you know, I think

948
00:46:47,000 --> 00:46:50,400
Speaker 20: to Neil's point earlier, like building up these data centers

949
00:46:51,320 --> 00:46:54,480
Speaker 20: is going to put its own kind of inflationary pressure.

950
00:46:54,600 --> 00:46:56,279
Speaker 20: And if we're going to let those data centers go,

951
00:46:56,400 --> 00:46:58,600
Speaker 20: what we're probably gonna have to do is damp down

952
00:46:58,680 --> 00:47:01,840
Speaker 20: demand and the rest of the economy to prevent inflation,

953
00:47:02,400 --> 00:47:06,120
Speaker 20: which can have spillover effects. Ultimately, AI is supposed to

954
00:47:06,120 --> 00:47:09,080
Speaker 20: bisge productivity, which means we can all earn more, right,

955
00:47:09,160 --> 00:47:13,120
Speaker 20: So there's a golden ticket at the end. The question

956
00:47:13,239 --> 00:47:16,480
Speaker 20: is going to be how do we get there, and

957
00:47:16,960 --> 00:47:19,640
Speaker 20: who survives it and how much pain do we have

958
00:47:19,760 --> 00:47:22,720
Speaker 20: to go through in that readjustment period.

959
00:47:23,360 --> 00:47:28,920
Speaker 17: David, from your perspective, your business is fundamentally affected by

960
00:47:28,960 --> 00:47:32,800
Speaker 17: AI potentially given that all of those drivers might someday

961
00:47:32,840 --> 00:47:36,040
Speaker 17: be rendered obsolete, they might just be self driving cars.

962
00:47:37,040 --> 00:47:40,719
Speaker 17: How are you seeing at this moment AI being deployed

963
00:47:41,160 --> 00:47:44,799
Speaker 17: a pathway? How do you convince your drivers that they

964
00:47:44,840 --> 00:47:47,000
Speaker 17: have some kind of longevity in the career given the

965
00:47:47,040 --> 00:47:50,600
Speaker 17: fact that potentially Waymo could come take their job.

966
00:47:51,239 --> 00:47:55,480
Speaker 16: So super good question and very relevant because it is

967
00:47:55,520 --> 00:47:58,360
Speaker 16: going to be a sort of almost physical manifestation of AI.

968
00:47:58,480 --> 00:48:01,680
Speaker 16: Right cars driving themselves. You know without drivers actually want

969
00:48:01,680 --> 00:48:03,480
Speaker 16: to back up for one second and sort of look

970
00:48:03,480 --> 00:48:05,640
Speaker 16: at it a little more broadly. So left, of course,

971
00:48:05,640 --> 00:48:08,080
Speaker 16: we have thousands of engineers, people who are exactly of

972
00:48:08,120 --> 00:48:10,719
Speaker 16: the type that Betsy's talking about, and one of the

973
00:48:10,719 --> 00:48:12,560
Speaker 16: things we're very focused on there. I think there's a

974
00:48:12,600 --> 00:48:15,680
Speaker 16: sort of i'll call it a lack of imagination around

975
00:48:15,719 --> 00:48:19,359
Speaker 16: where AI can can play. And I think the lack

976
00:48:19,360 --> 00:48:21,960
Speaker 16: of imagination mode is we're going to use it and

977
00:48:21,960 --> 00:48:23,440
Speaker 16: we're going to fire a bunch of people, right, that

978
00:48:23,760 --> 00:48:25,000
Speaker 16: sounds I need.

979
00:48:25,040 --> 00:48:29,360
Speaker 3: Bloomberg's leader Rama Bits talking affordability with tech leaders, policymakers,

980
00:48:29,480 --> 00:48:32,360
Speaker 3: ask the ideas. You continue watching the full panel on

981
00:48:32,440 --> 00:48:35,040
Speaker 3: live Go. We're getting the end of Bloomberg Tech. But

982
00:48:35,120 --> 00:48:37,480
Speaker 3: this is the market story. It has been a bruising

983
00:48:37,520 --> 00:48:39,759
Speaker 3: week for the AI trade, with Memory at the heart

984
00:48:39,840 --> 00:48:42,759
Speaker 3: of it. Apple raised hardware prices because of it, and

985
00:48:42,800 --> 00:48:45,279
Speaker 3: that trade has been global, right, It's not just here

986
00:48:45,320 --> 00:48:48,239
Speaker 3: in the US and career overnight, the leading memory names

987
00:48:48,320 --> 00:48:52,000
Speaker 3: also sold off the lot to recap as that does

988
00:48:52,040 --> 00:48:53,439
Speaker 3: it for this edition of Bloomberg Tech.

989
00:48:53,600 --> 00:48:54,759
Speaker 2: Recap that on the pod.

990
00:48:54,920 --> 00:48:57,360
Speaker 3: You know where to find it on iHeart, Apple and

991
00:48:57,400 --> 00:49:00,800
Speaker 3: Spotify online. And always on all the Bloomberg platforms. Have

992
00:49:00,880 --> 00:49:02,880
Speaker 3: a great weekend. What a week it's been. This is

993
00:49:02,920 --> 00:49:03,600
Speaker 3: bimbog Tech