Speaker 1: I'm Caroline Hinder Us and World headquarters in New York
Speaker 1: and the Mad Ludlow in San Francisco. This is Bloomberg
Speaker 1: technology coming up. Evis help fuel inflation. We break down
Speaker 1: today's CPI report and car prices record high, and we'll
Speaker 1: bring you the latest in the world of AI. C
Speaker 1: three AI shares jump again Tuesday without an obvious driver.
Speaker 1: Chairman and CEO Tom Siebel joints to discuss what the
Speaker 1: company is doing to justify the jump in its stock.
Speaker 1: Clus will speak to the CEO of semiconductor company weather
Speaker 1: Ring the chip slump as Tom Corfield. It's some global foundries,
Speaker 1: the CEO joining us with his outlook. All that and
Speaker 1: so much more coming up, but let's dig into these markets.
Speaker 1: It was a big macro picture kind of a day.
Speaker 1: The CPI print coming in Holler than anticipate to six
Speaker 1: point four year on year in terms of inflation should
Speaker 1: be the NASTAC pushes on, throw it up six tents
Speaker 1: of a percent? Isn't the comments from certain FED members
Speaker 1: like Harkoh saying maybe we're nearer the end in terms
Speaker 1: of our inflation fighting tactics to yet yield, though it
Speaker 1: listens more to the inflation override. They're worried about inflation,
Speaker 1: still remaining hot, yields, boring costs rise almost tempera say
Speaker 1: ten basis points on the front end, looking at the
Speaker 1: vix though dialing back. Maybe that's more about the geopolitics,
Speaker 1: the fact that maybe those new UFOs or indeed items
Speaker 1: are shut out of the sky by the United States,
Speaker 1: aren't Chinese. Maybe that dial backs some anxiety flicking on.
Speaker 1: Were actually seeing a bit of a bounce back in
Speaker 1: terms of the new music around crypto. Look at that
Speaker 1: sudden push higher in terms of bitcoin, some of the
Speaker 1: regulatory risks. Maybe we're getting used to the men. Yeah,
Speaker 1: I'm also looking at inflation, but with I also on earnings,
Speaker 1: and that is a theme that continues to the technology
Speaker 1: sector AIRB and ME breaching temper st gain now and
Speaker 1: after hours a strong outlook for the fiscal first quarter
Speaker 1: that came in above expectation in terms of bookings and sales.
Speaker 1: Will continue to track that stock across the hour because
Speaker 1: the earning school, of course will happen, will bring you
Speaker 1: some of the key numbers. Earning is also a key
Speaker 1: feature of the main session during Tuesday. Palanteer was one
Speaker 1: stock that we're tracking really closely, really big jump, taking
Speaker 1: it shares to the highest level since August. You can
Speaker 1: see that the one cent game and them saying they
Speaker 1: recorded their first coarsely profit on a gap basis in
Speaker 1: the final three months of last year, but forecasting profit
Speaker 1: for four year twenty three, which was kind of the
Speaker 1: key headline global Foundaries. As you said, Carrol up eight percent,
Speaker 1: big jump, bucking the trend in the chip industry, forecasting
Speaker 1: strong sales and elevated demand in some pockets of end markets.
Speaker 1: And the video interesting seen video. It's shares at April
Speaker 1: highs right now. But this is largely about artificial intelligence,
Speaker 1: right There's a lot of momentum around it. The work
Speaker 1: that the video is doing in the field of AI,
Speaker 1: a feel good or read through, I suppose from what's
Speaker 1: happening in the rest of the sector. But otherwise a
Speaker 1: lot of the move is the individual names on the
Speaker 1: Nazak one almost conversely to what you'd expect moving higher
Speaker 1: after that inflation print. And let's get back to the
Speaker 1: inflation story because in many ways said it's your favorite thing.
Speaker 1: E v s behind some of the push high US
Speaker 1: car prices in particular have had a record high the
Speaker 1: average monthly payment for a new car here in the US,
Speaker 1: it's now what a record seven dollars, nearly doubling from
Speaker 1: the late uncles. Because electric vehicles cost about more than
Speaker 1: the average car, the shift of plugins is about to
Speaker 1: make that affordability crisis even worse. Let's get to it.
Speaker 1: Blue Meg's Keith Norton and Keith it was a fascinating piece.
Speaker 1: There's a big take on the Blueberg terminal on dot
Speaker 1: com that is so well read about this rising issue
Speaker 1: of costs of cars. But it's a global issue, isn't it.
Speaker 1: It really is Caroline and what it's doing is it's
Speaker 1: putting the dream of car ownership out of reach for
Speaker 1: middle class buyers, which was always part of the you know,
Speaker 1: the contract with the middle croup class. You would you
Speaker 1: would have a new car in the driveway and on
Speaker 1: your own home. All of these things are coming out
Speaker 1: of reach. The average price of a new car is
Speaker 1: approaching fifty thousand dollars. That's up from nineteen It was
Speaker 1: driven by the pandemic and the supply shortages. But you
Speaker 1: know what, the automakers have discovered they can make more
Speaker 1: money selling fewer cars at higher prices, so they don't
Speaker 1: want to give it up. Yeah. The mantrack, Heath is
Speaker 1: lean inventory, fat price tags on those vehicles. The tech
Speaker 1: angle here is is the electric vehicle effect, right, And
Speaker 1: some of the most interesting reporting in that piece was
Speaker 1: the price premium for e vs over combustion engine Cause
Speaker 1: what did he find. Yeah, you know, at fifty dollars
Speaker 1: is a luxury car price, right, Well, the average price
Speaker 1: of electric vehicle is sixty one dollars and then actually
Speaker 1: just came down a bit because Tesla did some across
Speaker 1: the board price cuts. Before that, it was approaching seventy dollars. Well,
Speaker 1: that's really out of the reach of most people. And
Speaker 1: so you know, the e V push and we're expected
Speaker 1: to be you know, at least half e V by
Speaker 1: the beginning of the next decade is only going to
Speaker 1: make car is less affordable. Okay, But Keith, a lot
Speaker 1: of the handwringing was about supply chain issues, chip shortages.
Speaker 1: We know that that sort of swung into reverse. Now
Speaker 1: to a certain degree, is there still a price input
Speaker 1: issue here? Yeah? You know. The interesting think Caroline is, Yes,
Speaker 1: we have the semiconductor shortage that left to dealer lots
Speaker 1: empty that drove up prices. It's the old law of
Speaker 1: supply and demand. But the automakers saw that and said,
Speaker 1: g I, I can, you know, have fewer people in
Speaker 1: the factory. I can have less inventory that I have
Speaker 1: to pay for. I can have lower marketing costs because
Speaker 1: I don't have to discount the cars to move the metal.
Speaker 1: Let's keep this inventory low and these prices high. That's
Speaker 1: what they'd like to do forever more, whether there's a
Speaker 1: supply snag or not. Blue bes Keith Nort in terrific
Speaker 1: reporting for the Bloombell Big take. Thank you so much.
Speaker 1: I want to stick with the story and bringing Cox
Speaker 1: Automotive executive analyst Michelle Crabs. Michelle, you just take such
Speaker 1: a deep view of the auto industry. But I go
Speaker 1: back to that question. I asked Keith, what is the
Speaker 1: impact of electrification here in sort of boosting up the
Speaker 1: average price of a new car across this nation and beyond. Well,
Speaker 1: Keith had it right. The the price of electric vehicles
Speaker 1: at one point it was the average price in our
Speaker 1: calculations was about sixty six thousand dollars um. That's more
Speaker 1: than the household income for most Americans. So um, we
Speaker 1: are seeing that come down a bit, some of that
Speaker 1: because of Tesla's moves, but also because we are seeing
Speaker 1: automakers start to introduce less expensive ones, and we should
Speaker 1: see more of that. What is the permanency of this phenomenon?
Speaker 1: If we're moving towards electric vehicles and it's a slow transition,
Speaker 1: how long do prices stay elevated? I think for a while.
Speaker 1: I mean, we don't see them coming back down. And
Speaker 1: I would quiverle with Keith a little bit. Uh. We
Speaker 1: started seeing this trend long before the chip shortage. We
Speaker 1: saw the domestic automakers get out of the car business,
Speaker 1: the traditional cars and those lower price cars, leaving that
Speaker 1: to the Asian automakers. And the Asian automakers have not
Speaker 1: been able to produce them best enough to to appeal to,
Speaker 1: you know, people who are on budgets. So that's not
Speaker 1: going to change, and we are moving more towards electric vehicles.
Speaker 1: I don't know when the price parody gets there with
Speaker 1: ice vehicles, but I think we're in for some high
Speaker 1: prices for a while. I just want to bring up
Speaker 1: what we've been asking our own audience about, Michelle, because
Speaker 1: I like the fact that you put it into context
Speaker 1: that six six thousand, like it's more than most Americans
Speaker 1: bring in terms of their annual income. We asked, you
Speaker 1: know what is more worrying for you at the moment
Speaker 1: in terms of the inflationary pressures? Is it the price
Speaker 1: of evs? Well, actually, generally it is only thinking that
Speaker 1: it's more about the groceries. It's more about the price
Speaker 1: of eggs. And I'm afraid we asked the cheeky one,
Speaker 1: it's the price of love of course today being Valentine's say,
Speaker 1: forty six, and worried about that. And I'm sure they're
Speaker 1: meaning the services, the idea of going out getting restaurant
Speaker 1: bookings and drinks. But to that end, is there a
Speaker 1: clever way that we can finance altos going forward that
Speaker 1: it isn't quite so expensive on a monthly basis. Well,
Speaker 1: I think we are going to see some experimentation because
Speaker 1: this business model just doesn't work for many Americans. I
Speaker 1: think last week it was Hyundai announced a subscription service
Speaker 1: where you pay for your EV They're doing it on
Speaker 1: two models on a monthly basis. We may see that
Speaker 1: kind of thing. Uh, something has to give if we're
Speaker 1: going to go towards more e V s. I would
Speaker 1: I would say that in your survey if you'd ask,
Speaker 1: are you more worried about the general price of vehicles?
Speaker 1: And that is what I hear from consumers in the
Speaker 1: e V part just layers onto that I see. So
Speaker 1: it's sort of about the moment evs have deemed by
Speaker 1: many a sort of luxury item. Oh, absolutely, well, competition
Speaker 1: change that. Oh, it already has. You know, Tesla has
Speaker 1: done some discounting. They did some discounting at the end
Speaker 1: of this year. They cut prices. We are seeing lower
Speaker 1: priced models come under the market. So competition um will
Speaker 1: certainly impact pricing, But will it really bring it back
Speaker 1: down to the level that we're used to. Doubtful, Michelle.
Speaker 1: We've focused really on the consumer in this conversation. I
Speaker 1: want to focus on the automakers themselves, pure play like Tesla,
Speaker 1: or the transition names like GM and Ford. How do
Speaker 1: you summarize three when it comes to this transition to
Speaker 1: electric vehicles. What is it that you hope to see
Speaker 1: happen in the next twelve months. Well, I don't know
Speaker 1: if i'd hope to see have it, but I think
Speaker 1: what we are going to see is a much more
Speaker 1: competitive environment. UM Tesla has dominated the EV market. It
Speaker 1: still does, it still will, but we are starting to
Speaker 1: see some automakers make some inroads making their Tesla's market
Speaker 1: share go down. So I think what we're watching for
Speaker 1: is how much in roads do other automakers make with
Speaker 1: ev s. Always great to catch up with you, Thank
Speaker 1: you so much, great expertise from Michelle crabs Cock's automotive
Speaker 1: executive analyst. Meanwhile, sticking with autos and in fact just
Speaker 1: name checked them forward, they're actually gonna be cutting three thousand,
Speaker 1: eight hundred jobs in Europe as the EV shift takes
Speaker 1: hold of Ford is shifting its modern line up in
Speaker 1: Europe to battery only by and has previously said that
Speaker 1: the reduced time and effort to develop and make electric
Speaker 1: cars was going to lead to smaller product development teams sufficiency.
Speaker 1: There are yeah, a common story, and sticking with evis
Speaker 1: Tesla It's workers in New York Carrow are launching a
Speaker 1: unionization campaign. The employees who labeled data for Tessa's also
Speaker 1: pilot technology at the plant in Buffalo, New York, send
Speaker 1: an email to Musque today outlining their intents. Unionized employees
Speaker 1: say they're seeking better pay and job security, alongside a
Speaker 1: reduction in production pressures that they say has been harmful
Speaker 1: to their health. Welcome back to Bloomberg Technology. I'm Karen
Speaker 1: Hide in New York, and we cannot let this day
Speaker 1: go by without digging into artificial intelligence in some way,
Speaker 1: shape or form. Yeah, and it's a familiar name that
Speaker 1: I'm tracking right C three AI. Another jump of ten
Speaker 1: percent on the shares this Tuesday, no obvious reason, no
Speaker 1: headlines on the Bloomberg terminal. And then you go to
Speaker 1: the year to date performance, we're up more than a
Speaker 1: hundred percent and under an eight percent including Tuesday session.
Speaker 1: But let's let's sort of zoom out for a moment
Speaker 1: and give some context of what's going on here. This
Speaker 1: is a company that I poded around forty two dollars
Speaker 1: a share in December, all the way on the far
Speaker 1: right hand side of that screen. We're at twenty three
Speaker 1: dollars a share right now ish nowhere near its peak
Speaker 1: immediately following the I p O. So what's driving this
Speaker 1: company and its valuation? There's all well and good saying
Speaker 1: we're up a hundred percent year to date, but we're
Speaker 1: nowhere near that historic high. We're luckily carry as you know,
Speaker 1: we've got a conversation coming with exactly the right person
Speaker 1: and C three AI Chaman and CEO Tom cbol. So, Tom,
Speaker 1: you've had the preamble. You know, of course of your
Speaker 1: stocks performance, does what C three AI actually does as
Speaker 1: a business justify the trading we've seen so far in
Speaker 1: three Well, we are C three AI. I think it's
Speaker 1: the world's leading provider of enterprise m AI enterprise applications software.
Speaker 1: Any of you think that that artificial intelligence is going
Speaker 1: to interprise is going to influence the enterprise in a
Speaker 1: big way, then I think this represents a just a staggering,
Speaker 1: large addressible market opportunity. Tom. It's interesting to bring that
Speaker 1: up because we've been speaking to some vcs who will say, actually,
Speaker 1: enterprise search is where they see real business model fit.
Speaker 1: At the moment for the likes to chat GBT, just
Speaker 1: talk us through C three's generative AI for enterprise search.
Speaker 1: You're going to unveil it in March. I believe what
Speaker 1: will it disrupt? Well, what the C three I have
Speaker 1: planned for our represents about a billion and a half
Speaker 1: dollars of software engineering that we apply to manufacturing aerospace utilities,
Speaker 1: oil and gas. What have you? Now, with the combination
Speaker 1: of enterprise search, natural anguage processing, generative AI, reinforcement learning okay,
Speaker 1: and the C three AI platform allows us to fundamentally
Speaker 1: change the nature of the human computer interaction model for
Speaker 1: these important enterprise applications. So this is a this is
Speaker 1: a huge development, and it's brought you a lot of
Speaker 1: attention to AI Okay in the last couple of months,
Speaker 1: as we've seen a boy, hasn't it just and a
Speaker 1: lot of that attention has fallen upon initially Open AI.
Speaker 1: Then it moved to Microsoft that did the deal with them,
Speaker 1: and then it was of course it's what Google or
Speaker 1: a parent alphabet has us a bit up at sleeve.
Speaker 1: But also interesting with C three AI is you're kind
Speaker 1: of integrating all of those AI capabilities you're using. If
Speaker 1: I'm right, Open AI, Google Academia, what are those sorts
Speaker 1: of deals look like? How do you combine all of
Speaker 1: the best learnings. We have close technology and market partnerships
Speaker 1: with Google, with Microsoft, and with AWS, so as they
Speaker 1: advanced these technologies as they will Okay in the coming years,
Speaker 1: we're going to be immediately take advantage of all the
Speaker 1: innovations that they provide in our underlying core architecture and
Speaker 1: make those innovations available to our customers in our applications,
Speaker 1: make our applications much more efficacious, much easier to use.
Speaker 1: And so this is this is a is a big
Speaker 1: development and this could fundamentally change the nature of the
Speaker 1: human computer interaction model for enterprise applications. This is a
Speaker 1: this is genuinely a big deal. Toll my author audience
Speaker 1: on Twitter, on LinkedIn before we came on the show,
Speaker 1: what they would ask you, And actually, to be fair,
Speaker 1: they just wanted to know what artificial intelligence competence to
Speaker 1: see three have And to be fair, I think you've
Speaker 1: answered that. But it raises a good question right when
Speaker 1: you think about you today performance your thoughts is AI,
Speaker 1: and I just wonder what your take is on how
Speaker 1: much of the trading is just retail investors trying to
Speaker 1: buy in to find the next big thing in AI
Speaker 1: without missing the opportunity. Well, honestly, and I don't really
Speaker 1: track the market that closely. UM I think that you know,
Speaker 1: we've seen a market correction since that this huge technology
Speaker 1: bubble we had that that peaked. I think about the
Speaker 1: first quarter of UM. I think with C three A.
Speaker 1: I've had a dramatically undervalued security. I think when this
Speaker 1: whole thing recovers C three A, I will be, if
Speaker 1: not the one of the world's leaving providers of enterprise
Speaker 1: AI applications. And UM, you know, I think that presents
Speaker 1: a I think we still have an undervalued security and
Speaker 1: this is going to be a very promising opportunity. Tom.
Speaker 1: Noting that you've got more than eight hundred million dollars
Speaker 1: on your balance sheet in terms of cash, will you
Speaker 1: take advantage in the run up of the share of
Speaker 1: the share price and so anymore shows um, I think
Speaker 1: we're you know, we're so. Our focus is on growing
Speaker 1: the top line rapidly. Our focus is on uh and
Speaker 1: running a cash positive, profitable business, which we expect to
Speaker 1: be doing next year. I don't expect our cash balances
Speaker 1: at this time to go below seven million dollars in cash.
Speaker 1: So we're very well capitalized. We're in a position to
Speaker 1: grow the business, advanced the technology okay okay, and deliver
Speaker 1: a cash positive, profitable business growing at a at a
Speaker 1: very rapid rate. So I think about the time the
Speaker 1: FED takes its foot off the brake, I think this
Speaker 1: company is going to be blowing and going and we're
Speaker 1: wait now and then we're just gonna run the business.
Speaker 1: Will you look to inorganic, quoth Tom, because you're a
Speaker 1: man who knows M and A. In fact, your last business,
Speaker 1: which you've found a Chiman CEO, was bolted by Oracle
Speaker 1: back in the day. You understand, I'm name more than
Speaker 1: most when you buy all this and it's see and
Speaker 1: when we were in our CEO of CBOL Systems, I
Speaker 1: think we bought twenty or twenty three companies. I think it.
Speaker 1: We're focused. So Caroline, it's a great question. We're focused
Speaker 1: on growing the business organically. And I think you know,
Speaker 1: we invested over a billion and a half dollars in
Speaker 1: the technology foundation over a decade. Okay, We've done a
Speaker 1: lot of hard work here, and I think this is
Speaker 1: not going to be you know, one of these sales
Speaker 1: Force type stories or Oracle type stories. We're going to
Speaker 1: try to grow through acquisition were we we believe we
Speaker 1: have the technology foundation in place, We're going to grow
Speaker 1: the or the applicate of the technology of footprint organically.
Speaker 1: We have forty two turnkey enterprise applications today for utilities,
Speaker 1: oil and cast, defense, airspace, manufacturing. You're gonna expect that
Speaker 1: to grow to hundreds of enterprise applications in the years
Speaker 1: to come. But you know, I'm not saying, you know,
Speaker 1: never saying ever to an acquisition, but that that that's
Speaker 1: not that's just not in the in the in you know,
Speaker 1: that's not a focus right now. So in terms of
Speaker 1: how you make money from artificial intelligence, you've kind of
Speaker 1: shifted right from subscription to consumption and I'm curious about
Speaker 1: how that's worked out, the timing of it amid a
Speaker 1: boom of interest in artificial intelligence. I think the timing
Speaker 1: was perfect. Okay, And uh, you know, we've seen a
Speaker 1: transition from first perpetual licensing to subscription licensing. Now it's
Speaker 1: clear that the licensing standard for the cloud of a
Speaker 1: cloud computing is consumption based pricing. This is the way
Speaker 1: that Google does it, Microsoft does it, Amazon does it,
Speaker 1: Snowflake does it. Pretty much, this is the standard. This
Speaker 1: is the way the companies want to buy. They don't
Speaker 1: need to make big up brunch investments. They can pay
Speaker 1: as they go. And so it's, uh, we're finding it's
Speaker 1: being very very very well received by the marketplace, by
Speaker 1: our partners at Google and Microsoft, at Amazon bio customers
Speaker 1: and bio prospects. Come back, keep telling us about the
Speaker 1: deals and about what you're doing to grow the business.
Speaker 1: C three AI Chairman CEO Tom c Bull. Then we
Speaker 1: thank him now before we had to break C three AI.
Speaker 1: It's actually we understanding binning for a contract to revamp
Speaker 1: the I T systems of the UK's at National Health Service,
Speaker 1: challenging and offer from Peter Teal's Palenteer, according to reporting
Speaker 1: from The Telegraph. Now Palenteer shares we've got to get
Speaker 1: to it because they're jumping today after projecting its first
Speaker 1: annual profit. So quite the move that we've seen. We
Speaker 1: saw them after hours of course yesterday, Ed and you
Speaker 1: recently spoke to the CEO of that business too. Yeah,
Speaker 1: they've really shifted from this kind of reliance and governments
Speaker 1: to commercial customers and clearly the market over a basis
Speaker 1: believing in that story. So will continue to track that one.
Speaker 1: Now coming up, we're going to bring you the latest
Speaker 1: news in the world a VC back startups, with some
Speaker 1: still managing to raise new funds in spite of this
Speaker 1: global downturn. That's all next. This is Bloomberg time now
Speaker 1: for the VC roundup, starting with Indian fintech startup Insurance Deco,
Speaker 1: which is just raised a hundred and fifty million dollars
Speaker 1: from a group of investors led by Goldman Sachs Asset Management.
Speaker 1: It's the largest ever Series A for an Indian insurance
Speaker 1: tech company. Will use the new capital to scale up,
Speaker 1: expand to new markets, and grow the company's business with
Speaker 1: small and medium enterprises. Here's another fintech startup that's defying
Speaker 1: the market downturn, Singapore's Aspire, which has just raised a
Speaker 1: hundred million in a round that more than doubled its
Speaker 1: valuation in a deal led by light Speed and Sequoia
Speaker 1: Capital Southeast Asia. Inspires used by businesses for a range
Speaker 1: of financial services, including making international payments and automating invoices.
Speaker 1: And finally, Capsule, the online prescription delivery service backed by
Speaker 1: five Capital, is in talks to raise one hundred million
Speaker 1: dollars in a new funding round led by Cox Enterprises.
Speaker 1: That's according to the Information, citing sources who say the
Speaker 1: firm's looking to raise five million dollar valuation, down from
Speaker 1: its previous valuation of one point to billion dollars. Carrot, Yeah,
Speaker 1: we're going to see a few down rounds in this environment,
Speaker 1: I feel them welcome back to being big technology. I'm
Speaker 1: Caroline had in New York and I med love Low
Speaker 1: in San Francisco. Let's get to it. Let's get too
Speaker 1: chips right now, one that's actually based right here in
Speaker 1: New York, the state Global foundryes aid surging after earnings today,
Speaker 1: Now let's not at one point in fact, seeing as
Speaker 1: big as Move says all the way back to November,
Speaker 1: taking shares to their highest level, as we've seen of
Speaker 1: March two, once again earnings beating expectations. He did it
Speaker 1: in November, he delivered and actually said he's going to
Speaker 1: pose some sort of growth, looking positive for this year.
Speaker 1: And as they wrap up the year, it looks as
Speaker 1: though they're still feeling positive, still able to book in
Speaker 1: those orders. How when the rest of the industry seems
Speaker 1: to be going from boom to bust were Foundry CEO
Speaker 1: Tom cool Field is here to ask the questions. So, Tom,
Speaker 1: we ask you that question. When we're seeing a lot
Speaker 1: of the other chip makers, although with different model business
Speaker 1: models to yours, seeing the over supply, the ricochet coming
Speaker 1: back from the lack of supply, why are you able
Speaker 1: to take on these headwinds. Well, I think the first
Speaker 1: of all, let me thank our team, Tom Carfild's atility
Speaker 1: these results. Fourteen thousand people world will hide delivering these results.
Speaker 1: I think we position ourselves because we play in so
Speaker 1: many diverse end markets that where there's strength, we can
Speaker 1: flex some of our capacity to that strength. Where there's weakness,
Speaker 1: we don't play in some of those markets, like personal
Speaker 1: compute is probably the smallest market for us, or smallest
Speaker 1: portion of our revenue, and that's been disproportionately heard in
Speaker 1: this particular downturn that we're going through. Okay, so perhaps
Speaker 1: less of an exposure to a consumer. What about customers
Speaker 1: their ability to commit right now in advance to use
Speaker 1: your factories. That's kind of the interesting business model that
Speaker 1: you have, and many times you're getting them to help
Speaker 1: put money down into the investment in future fabs as well.
Speaker 1: I'm interested Thomas to how they're able to tackle these
Speaker 1: sorts of macro headwinds too. Look, when when our customers
Speaker 1: talk about adding capacity, these are these are four or
Speaker 1: five year long projections they're making, and it's not the
Speaker 1: temporal things that we're doing right now. And so when
Speaker 1: customers look through this cycle and look for what their
Speaker 1: growth potential is that their business. I don't think there's
Speaker 1: a single executive seal in the semiconduct industry that doesn't
Speaker 1: believe that in the next decade this industry is going
Speaker 1: to double. They start to look through this macro economic
Speaker 1: environment we're in to think about longer term and the
Speaker 1: kinds of contracts that we're signing with our customers in
Speaker 1: the last quarter, a much longer range than the near
Speaker 1: term the term Oh sorry, carry on. Yeah, These these
Speaker 1: I call them long term agreements that now the same
Speaker 1: long term agreements that we signed two years ago, are
Speaker 1: also creating a framework for us to work in partnership
Speaker 1: with our customers. It's single source business. How do we
Speaker 1: both make the best of the situation. How do we
Speaker 1: work together to get through the this downturn at the
Speaker 1: same time honoring the economics of these contracts. Let's talk
Speaker 1: about non cancelation type of agreements that you've wanted. You
Speaker 1: want of guaranteeing your revenue streams. How willing enable all
Speaker 1: your customers to do that at the moment. It's not
Speaker 1: a question of willing or not willing. We sit and
Speaker 1: work with them and there's a lot of different levels
Speaker 1: we can use to find a common ground, but we
Speaker 1: can We could trade in duration for these contracts, so
Speaker 1: add extra years, we could remix their business. There may
Speaker 1: be segments where there's more demand and than than the
Speaker 1: segment they first signed up to. They could pay some
Speaker 1: modest underutilization fees for the temporal moment. The key is
Speaker 1: how do we as partners position ourselves to get through
Speaker 1: this inventory correction, but more importantly positioned our relationship for
Speaker 1: growth when this industry does come back. Tom, I appreciate
Speaker 1: that response. Is it difficult right now, right now to
Speaker 1: get customers to sign new agreements, those that are coming
Speaker 1: to an end, those that you want to onboard as
Speaker 1: new customers that you haven't done business with previously. How
Speaker 1: much nervousness is there in that fresh field of business?
Speaker 1: So one we reported we've signed some in the fourth quarter,
Speaker 1: and very recently we signed when with general motives, So
Speaker 1: it shows that this thing hasn't stopped. I think the
Speaker 1: only hesitation for customers right now for longer range agreements
Speaker 1: is what the near term looks like and what what
Speaker 1: they want to get now over the next year versus
Speaker 1: longer term. And so for putting a little bit of
Speaker 1: a pause in signing up for long term believen. They
Speaker 1: have a little bit more time to really get a
Speaker 1: better sense of the growth of capacity they'd like to
Speaker 1: put on. For us, is really with the period we're
Speaker 1: going through right now. There's so much emphasis and interest
Speaker 1: on the on shoring of supply chains in this country,
Speaker 1: on what the Biden administration has done in terms of
Speaker 1: dollar figures to support your industry, But do you actually
Speaker 1: feel any of that right now? It's your top whole
Speaker 1: bottom line right now. No. But let me put this
Speaker 1: in perspective. The Chips and Science Bill solved one half
Speaker 1: of the equation, which was putting capacity on shore. The
Speaker 1: other half is making sure there's demand to use that capacity.
Speaker 1: And I think that's the story that still needs to
Speaker 1: be written now. Having said that, there is an appetite
Speaker 1: in the will and the desire to bring more of
Speaker 1: semiconductor manufacturing to gf's global footprint, including the US. Typically,
Speaker 1: with that, entails is not taking an existing design and
Speaker 1: requalifying it. It's thinking about your next generation designs, your
Speaker 1: next products, designing those into the supply chain of your future.
Speaker 1: And we're beginning to see something that come our way.
Speaker 1: So let's talk about designing into the future with some
Speaker 1: of your partners. I think, in particular the GM arrangement
Speaker 1: that I think you announced just earlier this week with
Speaker 1: new In terms of that, Tom, what fools like can
Speaker 1: you give us as to the way in which GM
Speaker 1: is thinking about its own supply chain. At the highest level,
Speaker 1: it's giving GM the capacity they need on the technology
Speaker 1: platform that's durable for them where they want it at
Speaker 1: the best economics. And essentially what this means to all
Speaker 1: audo the entire auto industry is the type of technology
Speaker 1: they use in semiconductor. As they think ahead of their
Speaker 1: semiconductor content and that growth rate in cars, they don't
Speaker 1: see enough capacity on the on the platforms of technology
Speaker 1: and semiconductor that they're going to need, and they need
Speaker 1: to today begin to engage with semi industry manufactor is
Speaker 1: to create that capacity. By working directly with the manufacturers
Speaker 1: like GF, they get to secure that supply again on
Speaker 1: the technology platforms they want and get it the best
Speaker 1: economics because they'll share in that investment to create that capacity,
Speaker 1: and then that investment doesn't get marked up through the
Speaker 1: rest of the supply chain when it comes back to
Speaker 1: them in a finished component or electronic piece of equipment.
Speaker 1: TOM respectfully Global Foundaries is a much smaller operation than
Speaker 1: say TSMC or Samsung. That's just the reality, right, But
Speaker 1: what are your advantages? What is it you can offer
Speaker 1: the chip makers and those direct customers like a GM
Speaker 1: that those giants cannot. Well. I think there's a couple
Speaker 1: of things. First, we start with our our geographic footprint
Speaker 1: where in Singapore, US and Germany and in many cases
Speaker 1: we can qualify a single product continents away to give
Speaker 1: that supply chain flexibility. The second thing is some of
Speaker 1: those competitors you mentioned, the vast majority there are d
Speaker 1: and kept and kept incapacity investments is on what I
Speaker 1: call single digit animeter, where it's truly for high speed
Speaker 1: digital compute compute intensive applications. We service a different part
Speaker 1: of the markets what we call feature rich semics conductors,
Speaker 1: where we had you know, embedded memory features for secure
Speaker 1: the security and credit cards and secure transactions. We had
Speaker 1: high voltage for display drivers, and so where we probably
Speaker 1: we play in adding features to existing platforms that create
Speaker 1: differentiation that our customers need for their products. TOM have
Speaker 1: Tesla or any of the tect giants working on their
Speaker 1: own designs engage with you about future opportunities. I don't
Speaker 1: speak about customer engagements on a one to one unless
Speaker 1: we've done something together in the press. But given how
Speaker 1: important semiconductors are to the world economy and how semi
Speaker 1: connective manufacturing in itself is so important, you can imagine
Speaker 1: that we speak to a lot of direct and you
Speaker 1: there's about our capacity expansion point I can't imagine, And
Speaker 1: I'll ask you again next time. Global Foundry CEO Tom Caulfield,
Speaker 1: thank you so much for giving Kara and I some
Speaker 1: time on the show. Very welcome, Thanks for having me.
Speaker 1: Now coming out, we look at the stocks hedge funds
Speaker 1: loved and hated last quarter as the thirteen F filings
Speaker 1: roll out. Why many are feeling the burn more than
Speaker 1: that next character. Yeah, and meanwhile, let's get to some
Speaker 1: of the stocks that are being loved after hours, Airbnb
Speaker 1: being one of them. Earnings they beat, They're seeing strength
Speaker 1: in terms of resilience of people still wanting to travel
Speaker 1: into this new quarter versus previous quarter. Last year was
Speaker 1: a record, and they obviously delivered a first full year
Speaker 1: of profit. Notable that Branchski the CEO is talking about
Speaker 1: price transparency had a neutral impact on workings, he says,
Speaker 1: and Stevenson, so I'm saying there's seeing slightly longer lead
Speaker 1: times for bookings currently up a spring bag. Shopify was
Speaker 1: among the first technology giants to slash its workforce during
Speaker 1: last year's market route. Now some investors say it's stock
Speaker 1: is poised to outperformed peers over the course of three
Speaker 1: as those layoffs translate to lower costs, narrow losses, and
Speaker 1: of course better cash flow. Investors will see the results
Speaker 1: when Shopify reports earnings tomorrow. Carot meanwhile, well, we're gonna
Speaker 1: sick with stocks being rewarded unpunished. In equal tune, We're
Speaker 1: going to turn to thirteen F filings basically funds. What
Speaker 1: they're doing with them? Are they buying or selling technology, consumer,
Speaker 1: discussitionary and communication sectors? They're actually selling all of them.
Speaker 1: Seems like anything else that happened in the fourth quarter.
Speaker 1: We've got just the person to speaked about it, just
Speaker 1: before big tech, of course had to rebound. Some people
Speaker 1: are being a bit of a pain trade Nali Ba,
Speaker 1: so I gus here to walk us through what the
Speaker 1: big hedge funds were doing what the big buys were.
Speaker 1: So they're selling out of tech and communications were they buying. Yeah,
Speaker 1: it's interesting. Remember, even though they're selling out of Tech,
Speaker 1: there are still certain traders that are actively buying into
Speaker 1: or Shorty. We'll talk about that in a second. Big
Speaker 1: tech names, and the reason they're selling so much is
Speaker 1: if you look an aggregate, they still hold more Tech
Speaker 1: than anything else. So the way they're positioned into this year,
Speaker 1: there is room to sell and they're still benefiting from
Speaker 1: that game in the NAZAC we've seen. Now listen, let's
Speaker 1: talk about the names themselves, because you see big divergences
Speaker 1: between the big hedge funds and the rest of the
Speaker 1: investment industry. Because remember with these filings, although they're on
Speaker 1: a lag, you hear from family offices and pension funds
Speaker 1: as well. Tesla is one of the biggest position changes
Speaker 1: in the positive direction. And that's even as you see
Speaker 1: some big names like Glenn Catt's Light Street get out
Speaker 1: of Tesla in the same time frame, you see the
Speaker 1: likes of black Rock, another bigger index funds, get into
Speaker 1: Tesla in that same time frame. So one of the
Speaker 1: biggest bias is Tesla. But you also see a one
Speaker 1: of the biggest bias, Caroline, it's kind of boring. You're
Speaker 1: seeing people get into tax exempt bond ETFs run by
Speaker 1: Van Guard but he developed You know, it is a
Speaker 1: lot of ets that show you how funds are trying
Speaker 1: to position. We were talking not just about the hedge funds,
Speaker 1: but the family offices. I want to point out, for example,
Speaker 1: you have Stanley drucon Miller's Duquine getting out of Amazon
Speaker 1: as quickly as it did. You have Sorrows Fund Management
Speaker 1: betting against silver Gate. Begin there because silver Gates obviously
Speaker 1: had a terrible turn of it, and the yes was
Speaker 1: that short working at that point? When did he put
Speaker 1: it on? It's hard to know exactly when. The value, Yeah,
Speaker 1: exactly Don Fitzpatrick's CEO to CEO to what you're alluding to.
Speaker 1: The market value the position is one point seven four million.
Speaker 1: The one thing that was not disclosed about that wager was,
Speaker 1: you know, what does it really do on the downside?
Speaker 1: You know how low to silver Gate really go? Is
Speaker 1: he still in the position now? A lot of the
Speaker 1: news about silver Gate, including Bloomberg's own reporting, about the
Speaker 1: inquiries it's getting from the Department of Justice came after
Speaker 1: the quarter. So the question is, you know, what did
Speaker 1: these options, these are put options really look like in
Speaker 1: terms of what Soros has been buying. And again one
Speaker 1: point seven four million that's chump change for him. But
Speaker 1: again what the payoff will be is what we're interested in.
Speaker 1: Can we talk about some of the Tiger clubs here
Speaker 1: as well? It's worth noting that the Tiger you know,
Speaker 1: the reason it matters is because it's a positioning question, right,
Speaker 1: And we look at what's happening over at Tiger Global
Speaker 1: and really what you're seeing is still a lot of
Speaker 1: um selling rather than buying. And I think that's an
Speaker 1: important dynamic to keep a hold of after some of
Speaker 1: these funds were so heavily burned after the whip sawing
Speaker 1: of last year. These are big tech heavy funds. We
Speaker 1: know their private investments have held up better for them.
Speaker 1: Do their private marks start to take bigger markdowns now?
Speaker 1: Especially as a lot of those companies don't make it
Speaker 1: into public markets. The markets haven't opened yet for I
Speaker 1: p O S. I know you like thirty Night F
Speaker 1: season I like thirty n F Season two because I
Speaker 1: see a lot of names that I cover, right. Rivan
Speaker 1: is a great example the big names reducing or exiting
Speaker 1: their positions in Rivian, which was the worst or second
Speaker 1: worst Foreman. Then that's that one last year. That's one example.
Speaker 1: What are the big tech names that we kind of
Speaker 1: waiting for that we had some clues that there might
Speaker 1: be some movement in ownership. Yeah, I think what's interesting
Speaker 1: if you take a look at it, you're seeing a
Speaker 1: big divergence on let's say fintech because you saw some
Speaker 1: buying in a master Card, but you saw on the
Speaker 1: other end of things, you saw selling of PayPal. PayPal
Speaker 1: was a big seller when it came to the hedge
Speaker 1: fund industry in particular, and of course when you look
Speaker 1: at it this year, there's a lot of changes at
Speaker 1: the top. They have an activist investor as well, and
Speaker 1: so what is it going to take to bring kind
Speaker 1: of the fast money back into a stock like that.
Speaker 1: You see master Card, I said, being bought in the
Speaker 1: same time frame, there are were some tech buys. You
Speaker 1: saw Alphabet being largely bought in the time frame that
Speaker 1: we're talking about here, You're still seeing buying of more
Speaker 1: financed names and tech than anything else. But I think
Speaker 1: if you think about tech and you're watching people get
Speaker 1: into the card companies despite some of the issues we've
Speaker 1: seen in the broader economic environment, more than they're buying
Speaker 1: for example. You know, let's just take the note from
Speaker 1: stan drugon Miller, the selling of Amazon so quickly, Bloombogctionnali, Bassic, Triffic,
Speaker 1: just dozens of headlines each hour hitting when the thirteen
Speaker 1: f hit. So keeping track is quiet skill. I appreciate it.
Speaker 1: Thank you very much. Speaking of headlines on the Bloomberg terminal,
Speaker 1: some news crossing and breaking. Ross Gerber, the Tesla shareholder,
Speaker 1: has notified Tesla in a letter to its general council
Speaker 1: that he is seeking a board seat. I'm just going
Speaker 1: to reiterate the Ross Gerber has notified Tesla formally in
Speaker 1: a letter to its general council that he's seeking a
Speaker 1: board seat. You'll remember, Caroline, of course, you remember he
Speaker 1: joined us on Twitter spaces Friday, where he made public
Speaker 1: his intention to be a friendly activist and pursue that
Speaker 1: board seat. Well, this is it. Concretely, he's taken that step. Yeah,
Speaker 1: left us rather shell shocked with at a moment silence
Speaker 1: as we took it in On his birthday, came on
Speaker 1: to announce that's the sort of step he's gonna be taking.
Speaker 1: And he's not your usual activist investing. He has them
Speaker 1: built up an enormous stake in this company, but he's
Speaker 1: got the backing of some really significant shareholders, hasn't he. Yeah, So, look,
Speaker 1: he's got four d and forty thousand shares at Gerber Kawasaki,
Speaker 1: his wealth manager. That is zero point zero point zero
Speaker 1: point zero one percent of the company. But he says
Speaker 1: that he's got the backing of the biggest individual shareholder holder,
Speaker 1: who has one percent. He also name drops some big
Speaker 1: institutionals that he's friendly with and cooperative with. So we'll
Speaker 1: see if it has any traction. As always, we've reached
Speaker 1: out to Tesla, We've reached out to elon Mask, we've
Speaker 1: reached out to the I R team. No responses yet,
Speaker 1: And notably, that's actually what he wants to stop happening.
Speaker 1: He wants them to reach out more. He wants more
Speaker 1: public relations, more media friendly discussion coming from Tesla to
Speaker 1: only talk about what they're doing. Fascinating and great that
Speaker 1: you've got those headlines in the middle of the show.
Speaker 1: So look, I ride a bike around New York City.
Speaker 1: I'm always trying to dodge the traffic. But perhaps there's
Speaker 1: a slightly more glamorous way of doing it, the meal
Speaker 1: a city bike, because you may soon have another option
Speaker 1: to reach a destination in style with a in the sky,
Speaker 1: in fact, electric air taxi. Let's bring in Bloomberg's skylar
Speaker 1: Woodhouse for more. So talk to us about what this
Speaker 1: was breaking new uncharted territory on here in New York. Yes,
Speaker 1: so Blade is already chartering flights. You can get on
Speaker 1: a helicopter, you can charter a whole plane. You cannot.
Speaker 1: They're they're also in the health organ transportation business. But
Speaker 1: today there one step closer to launching their electric aircraft.
Speaker 1: So basically we all know about the push behind e VS.
Speaker 1: So this will just soon be an electric aircraft that
Speaker 1: someone can ride in. Okay, so the Blades take off
Speaker 1: very near where I commute up and down. Why would
Speaker 1: this be different? Why is this so much better? You
Speaker 1: can see beautiful pictures of this. It looks kind of
Speaker 1: like a helicopter. What's different? Yeah? So what about this
Speaker 1: is like we hear the helicopters and they're quite noisy,
Speaker 1: just the regular ones that are flying around New York
Speaker 1: city are really anywhere, but this one in particular, it's
Speaker 1: very quiet. And today when I was at the Westchester
Speaker 1: Airport when it flew right by, you really couldn't hear much.
Speaker 1: So the way that they're designing this plane is all
Speaker 1: about also reducing the noise, so that way as these
Speaker 1: become more normalized, you know, just kind of within this space,
Speaker 1: they won't be as noisy. To try and bring those
Speaker 1: noise complaints down, Scarlet Woodhouse, your next dispatch for Bloomberg
Speaker 1: Technology is to report to us live from the air
Speaker 1: inside one of these are okay, you know, challenge accepted.
Speaker 1: For me. What's interesting here is the reality of this.
Speaker 1: You know, so many players trying to literally pum the
Speaker 1: punk get these off the ground. How real is this business?
Speaker 1: When do we see it kind of widespread above Manhattan skylines? Yeah,
Speaker 1: so it's going to take some time. And you know,
Speaker 1: when you look at Beta, like you know they're in
Speaker 1: the process right now with the f A trying to
Speaker 1: get all all of these approvals. It's not just gonna
Speaker 1: appear tomorrow. So it's going to take a couple of years.
Speaker 1: I think. Right now Beta saying they're hoping to get
Speaker 1: some sort of f A a a approval by four and
Speaker 1: Blade has been a little has been saying that their
Speaker 1: customers could perhaps start to um start writing on these
Speaker 1: types of aircrafts. And on that note, customer, how much
Speaker 1: is this going to cost me? If I'm visiting carol
Speaker 1: over in New York, I'm just looking at the screen.
Speaker 1: Am I going to be able to afford this? You know?
Speaker 1: I think you my dad, I mean it's going to
Speaker 1: be a little bit cheaper um, you know, price point
Speaker 1: you know, taking one of these private helicopters. This is
Speaker 1: not necessarily an easy expense, but given the electric factor,
Speaker 1: it will reduce costs a little bit. So we'll have
Speaker 1: to see what the price point um becomes when they
Speaker 1: roll out fascinating Blade Beta getting together. We'll see if
Speaker 1: that regulatory approval comes too great to have. You have
Speaker 1: enjoyed Westchester skylo Woodhouse there. I mean, well, I mean
Speaker 1: let's get back to something that I think was the
Speaker 1: first maybe for a Bloomberg in general, was some breaking
Speaker 1: news on one of our spaces. After the spaces that
Speaker 1: we do, and we are now getting the reality the
Speaker 1: fact that Rosco but a relatively small shareholder in Tesla,
Speaker 1: but a very discursive one and very out there talking
Speaker 1: about Tesla. Big Bull is looking for a board team. Yeah,
Speaker 1: it's it's hard to know whether this is going to
Speaker 1: work or not. Him being a friendly activist, he has
Speaker 1: a tiny position. He's sort of canvassing support of the
Speaker 1: bigger retail investors. But we had him on to talk
Speaker 1: about the activism behind Disney, right, and that the penny
Speaker 1: kind of dropped in the moment and he was like,
Speaker 1: you know what, I'm just going to tell you guys,
Speaker 1: I'm pursuing a board seat. But he's basically making some
Speaker 1: pretty practical recommendations, like what is the succession plan? Is
Speaker 1: Elon must spending enough time on Tesla or too much
Speaker 1: time at other companies. I've been speaking at other investors.
Speaker 1: They have very mixed opinions about this, Caroline. Interesting. I
Speaker 1: wonder what some of the reticence might be in terms
Speaker 1: of just his point being corporate governance. Many would say
Speaker 1: when you're at a founder led business is sometimes a
Speaker 1: little bit more lacking than most, and when we know
Speaker 1: that on the board of Tesla are an umber of
Speaker 1: family members and the like. Yeah, it ranges from those
Speaker 1: that say there's nothing wrong with Elon Marsk to those
Speaker 1: that say Ross is inconsistent in his views, We'll will
Speaker 1: track the story. I'm sure this is just the start
Speaker 1: a great bit of breaking while you're also doing the
Speaker 1: day job of presenting a television show, is also sending headlines.
Speaker 1: That does it. From this edition of Bloomberg Technology Tomorrow,
Speaker 1: how Come I see you? Tom Latin is going to
Speaker 1: be joining us or again it's about earning said yeah,
Speaker 1: and don't forget recap the whole show on the podcast
Speaker 1: I Heeart, Apple, Spotify, wherever you get your podcast. This
Speaker 1: is Bloomberg