WEBVTT - Tesla Earnings Miss Despite Record Third-Quarter Sales Surge 0:00:02.520 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business Week, 0:00:10.800 --> 0:00:14.680 Daily reporting from the magazine that helps global leaders stay 0:00:14.680 --> 0:00:18.759 ahead with insight on the people, companies, and trends shaping 0:00:18.800 --> 0:00:23.720 today's complex economy. Plus global business, finance and tech news 0:00:23.760 --> 0:00:27.760 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.920 --> 0:00:31.720 Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.080 --> 0:00:34.760 Well back to Tesla shares down two percent in the 0:00:34.920 --> 0:00:38.600 after hours. The company posted third quarter profit that fell 0:00:38.640 --> 0:00:42.440 short of Wall Street's expectations despite record ev sales. I 0:00:42.479 --> 0:00:44.520 want to bring back Ed Ludlow. He's the co host 0:00:44.520 --> 0:00:47.320 of Bloomberg Tech, and also bring in Ross Gerber. He's 0:00:47.479 --> 0:00:51.839 president and CEO of Gerber Kawasaki Wealth and Investment Management 0:00:52.040 --> 0:00:54.560 got more than three billion dollars in assets under management. 0:00:54.800 --> 0:00:59.080 He joins us from Santa Monica, California. Ross, you now 0:00:59.120 --> 0:01:02.880 have about eighty million dollars of Tesla shares, down from 0:01:02.880 --> 0:01:05.679 one hundred million earlier this year. At it, at your peak, 0:01:06.120 --> 0:01:07.680 how much Tesla stock did you own? 0:01:09.680 --> 0:01:14.759 I think we had about one and a half times 0:01:14.760 --> 0:01:16.360 more than we have today. 0:01:16.080 --> 0:01:17.240 So that's not that much more. 0:01:18.840 --> 0:01:20.679 No, we've got our. 0:01:20.600 --> 0:01:23.480 Positioned by sixty percent, So that's that's fairly large. 0:01:23.560 --> 0:01:26.320 Are you Are you buying or selling today or buying 0:01:26.360 --> 0:01:27.160 or selling right now? 0:01:27.959 --> 0:01:28.720 Neither neither. 0:01:28.920 --> 0:01:31.479 You know, you know Tesla as a hold for us. 0:01:31.720 --> 0:01:33.720 You know, the people who are holding the stock at 0:01:33.760 --> 0:01:36.640 our firm, our clients very much believe in Tesla and 0:01:36.920 --> 0:01:39.200 don't want to let go of their shares at all. 0:01:39.600 --> 0:01:41.600 And then you know, the clients that don't want to 0:01:41.600 --> 0:01:45.360 own Tesla don't own Tesla anymore. But we're not recommending 0:01:45.360 --> 0:01:49.120 to buy Tesla or per Se more likely recommending to 0:01:49.160 --> 0:01:52.040 sell Tesla for investors up at these prices because you're 0:01:52.040 --> 0:01:55.120 getting such a premium valuation. But in general, we've just 0:01:55.120 --> 0:01:58.120 been holding the stock because you know, we're kind of 0:01:58.560 --> 0:02:00.000 stuck with our position right now. 0:02:00.080 --> 0:02:02.720 What about you, because we check in with you quarterly 0:02:02.760 --> 0:02:05.800 and you've really changed your position on the company in 0:02:05.840 --> 0:02:08.359 recent years in recent quarters and your position on Elon 0:02:08.440 --> 0:02:08.960 Musk too. 0:02:09.240 --> 0:02:10.880 Are you a believer in the company right now? 0:02:12.320 --> 0:02:12.800 Yes, and no. 0:02:13.280 --> 0:02:16.639 I still own Tesla's stock as well personally, not a lot, 0:02:16.680 --> 0:02:18.520 but you know I like to have some because I 0:02:18.520 --> 0:02:20.919 bought it at a dollar a share or a dollar fifty, 0:02:20.919 --> 0:02:22.920 So it's like fun to have in my portfolio still. 0:02:22.919 --> 0:02:27.840 But that said, you know, I don't know what's going 0:02:27.919 --> 0:02:31.160 to happen with full self driving. I just don't think 0:02:31.160 --> 0:02:34.080 it works, and I think vision only systems don't work. 0:02:34.520 --> 0:02:37.359 And I'm very sure of this now. Even though I'm 0:02:37.360 --> 0:02:40.360 not an engineer, I can explain to you how humans drive. 0:02:40.600 --> 0:02:42.720 And I don't think Elon gets how humans work. I 0:02:42.720 --> 0:02:46.120 think he gets how machines work. And so I think 0:02:46.200 --> 0:02:48.959 that Tesla's in a pickle. If they can solve full 0:02:49.160 --> 0:02:51.519 full self driving, like I could get in my car 0:02:51.600 --> 0:02:53.520 right now and push a button and it drives me home, 0:02:53.760 --> 0:02:55.600 Like I can get in a Weymo right now and 0:02:55.639 --> 0:02:58.600 it'll drive me home no problem, then I think Tesla 0:02:58.680 --> 0:03:00.880 has a reason to buy the stock because now they've 0:03:00.880 --> 0:03:03.440 got their products working and they can grow from there. 0:03:03.560 --> 0:03:06.080 But as far as waiting for robots and cabs to 0:03:06.120 --> 0:03:08.640 pay off, it doesn't matter if full self driving doesn't work. 0:03:08.680 --> 0:03:11.320 And full self driving doesn't work, so nothing's going to 0:03:11.320 --> 0:03:13.760 get me excited about Tesla until it drives me home. 0:03:14.560 --> 0:03:18.840 All right, good stuff, we're talking with Ross, Gerber and Ludlow. 0:03:18.919 --> 0:03:20.480 I know you're reading over stuff. Come on into the 0:03:20.520 --> 0:03:22.680 conversation with Roth. 0:03:23.960 --> 0:03:26.240 Yeah, I mean, you know, just going through the deck. 0:03:26.680 --> 0:03:29.160 The way that Tesla explains it is that they had 0:03:29.240 --> 0:03:32.680 lower FSD revenue recognition in this quarter because of the 0:03:32.760 --> 0:03:36.480 timing of previous generation releases of FSD in the same 0:03:36.520 --> 0:03:37.520 period a year ago. 0:03:38.520 --> 0:03:39.240 You know, I'm not a. 0:03:39.200 --> 0:03:41.920 Tesla shareholder, as you guys know, but I do drive 0:03:42.400 --> 0:03:44.640 a Model Y in fact, and I use FSD every 0:03:44.680 --> 0:03:48.720 day for about sixty miles thirty miles to work, thirty 0:03:48.760 --> 0:03:51.840 miles back. I'm not on version fourteen yet. But Ross 0:03:51.920 --> 0:03:55.520 is speaking to the question, which is always there. Explain 0:03:55.640 --> 0:03:59.560 the jump or the steps to the end result, the 0:03:59.720 --> 0:04:04.360 end state. The end state is robotaxi, right if Tesla 0:04:04.400 --> 0:04:07.360 is to be believed, And right now, you know, the 0:04:07.440 --> 0:04:11.800 street seems kind of split on whether we understand how 0:04:12.040 --> 0:04:14.680 we go from a software platform that consumers pay for 0:04:14.720 --> 0:04:17.719 as a one offer a subscription package to a world 0:04:17.839 --> 0:04:21.840 where the vehicles built on a common software platform or 0:04:21.880 --> 0:04:25.560 iterations of that platform power a rope proprietary ride hailing 0:04:25.640 --> 0:04:28.880 robotaxi service. You know, it's difficult to see the jump, 0:04:28.920 --> 0:04:32.200 and Ross can speak for himself, but just in the reporting, 0:04:32.640 --> 0:04:34.520 that's what we hear all the time. 0:04:35.960 --> 0:04:38.240 Yeah, I mean you're one hundred percent right in that 0:04:38.279 --> 0:04:41.720 these are completely different businesses, right, Like selling cars that 0:04:41.800 --> 0:04:45.160 drive themselves is an Apple business model, And that's why 0:04:45.200 --> 0:04:47.880 I always love Tesla. When I first found Tesla, I 0:04:47.920 --> 0:04:49.719 was like, this is the Apple of cars, right, Like 0:04:50.000 --> 0:04:52.800 you build hardware and with great software, and then you 0:04:52.839 --> 0:04:56.719 make money on services, right And that's really where Tesla's 0:04:56.720 --> 0:04:58.839 making a ton of money right now is on services 0:04:58.839 --> 0:05:01.960 and energy storage, which are still great businesses for Tesla. 0:05:02.440 --> 0:05:05.680 But when you talk about building an Uber like platform, 0:05:05.920 --> 0:05:09.160 this is an extremely difficult thing that it took Uber 0:05:09.240 --> 0:05:12.000 almost a decade or more to make money doing, and 0:05:12.120 --> 0:05:14.880 Uber is very very good at this now and the 0:05:14.960 --> 0:05:17.120 only way they've been able to make money is by 0:05:17.200 --> 0:05:20.279 charging substantially more for the rides because Uber is not 0:05:20.440 --> 0:05:23.320 cheap anymore and they had to subsidize rides for a 0:05:23.360 --> 0:05:26.520 decade just to build that business. So when you actually 0:05:26.560 --> 0:05:30.400 think about Tesla scaling, if there was no competition, that'd 0:05:30.440 --> 0:05:34.120 be one thing. But there's already several cab services I 0:05:34.160 --> 0:05:36.880 can take right now, whether it be Uber, Lyft or 0:05:36.920 --> 0:05:39.680 waimap that are all very good at what they do. 0:05:40.040 --> 0:05:43.320 So you know, even if Tesla gets this to work, 0:05:43.920 --> 0:05:46.760 it's still a tough business. And the second thing I 0:05:46.760 --> 0:05:49.440 would just say, ed you use full self driving a lot? 0:05:49.560 --> 0:05:53.600 Obviously you probably if I asked, do you feel comfortable 0:05:53.880 --> 0:05:56.280 turning it on and going into the backseat of your 0:05:56.320 --> 0:05:59.040 car and letting you drive that full thirty miles home? 0:06:00.080 --> 0:06:03.120 I've never done that or attempted it, and I think 0:06:03.160 --> 0:06:05.520 you know, I post quite a lot on X my experiences, 0:06:05.560 --> 0:06:08.080 like I say today, this is what happened. You know, 0:06:08.360 --> 0:06:09.720 I would never get in the back of the car 0:06:09.760 --> 0:06:11.760 and turn it on. I also would not put my 0:06:12.480 --> 0:06:14.800 little baby boy in it either. But the way that 0:06:14.880 --> 0:06:19.160 I've tried to track it is generation by generation. How 0:06:19.200 --> 0:06:21.880 has it improved on the route that I take every day. 0:06:22.000 --> 0:06:23.960 The one area that is really struggled is with the 0:06:24.000 --> 0:06:26.960 toll boobs on the Golden Gate Bridge. You know that 0:06:27.040 --> 0:06:29.080 can be precarious, and you can see my posts on 0:06:29.120 --> 0:06:30.640 that on your point. 0:06:31.279 --> 0:06:34.480 In the AI graph of the shareholder deck. 0:06:34.880 --> 0:06:37.120 The way that Tester explains it is that the latest 0:06:37.200 --> 0:06:40.760 version of FSD, they say, has a substantial amount of 0:06:40.800 --> 0:06:44.120 the source code in the Robotaxi version, and by putting 0:06:44.160 --> 0:06:46.960 it out into the real world. It gives them valuable 0:06:46.960 --> 0:06:50.159 real world data to help them improve a future robo 0:06:50.200 --> 0:06:50.960 taxi service. 0:06:51.240 --> 0:06:53.200 I don't weigh in on that one way or the other. 0:06:53.279 --> 0:06:56.800 I'm just saying that's Tesla's explanation on the link between 0:06:56.839 --> 0:07:00.800 the two, the consumer facing FSD and the same codebase 0:07:00.880 --> 0:07:03.920 that will be used to power a future rover taxi service. 0:07:04.360 --> 0:07:07.839 He ed Ross made the point that he doesn't believe 0:07:07.920 --> 0:07:13.200 vision only FSD or vision only self driving works. Can 0:07:13.240 --> 0:07:15.600 you talk a little bit about that technology that that 0:07:15.720 --> 0:07:22.360 Tesla uses versus the other companies, namely Weima and Amazons, 0:07:22.680 --> 0:07:24.200 Amazon subsidiary as well. 0:07:24.920 --> 0:07:26.280 Yeah, so very simple. 0:07:26.320 --> 0:07:29.720 When we say vision based system, the inputs for the 0:07:29.800 --> 0:07:34.000 vehicle are only cameras on a Tesla. The cameras capture 0:07:34.200 --> 0:07:39.360 capture optical data from around the vehicle and use the 0:07:39.480 --> 0:07:43.800 underlying algorithm to make an onboard decision interpreting the world 0:07:43.840 --> 0:07:44.280 around them. 0:07:45.040 --> 0:07:45.160 Uh. 0:07:45.360 --> 0:07:48.680 The opposite academic view is that you need to paint 0:07:48.680 --> 0:07:52.280 a richer digital picture of the world using other forms 0:07:52.320 --> 0:07:57.480 of data gathered by lidar, radar, and in some cases 0:07:57.560 --> 0:07:59.880 even going beyond that. You know, like there are very 0:08:00.080 --> 0:08:04.360 degrees of lightar spinning or stationary or static. Sorry, The 0:08:04.600 --> 0:08:07.360 economic argument that Tesla and Elon must have always made 0:08:08.000 --> 0:08:11.320 is that having a vehicle that has multiple sensors on 0:08:11.360 --> 0:08:15.040 it is not scalable. You know, there is no end 0:08:15.120 --> 0:08:18.040 result whether the vehicle could be affordable for a consumer 0:08:18.520 --> 0:08:22.080 or profitable for an operator of that system to run. 0:08:23.000 --> 0:08:26.200 The other robotaxi companies like Weymo or zooks, who do 0:08:26.320 --> 0:08:30.360 have multiple sensors and custom versions of them, say that 0:08:30.800 --> 0:08:33.520 you have to have them for redundancy. So if one 0:08:33.520 --> 0:08:37.600 of those digital pictures fails, i e. The vision one, 0:08:37.679 --> 0:08:41.400 the cameras fail, or the ID or radar fails, you 0:08:41.440 --> 0:08:44.160 can still be safe because you have a rich enough 0:08:44.200 --> 0:08:46.880 digital picture of the world around you for the vehicle 0:08:47.360 --> 0:08:50.720 to make a decision based on the circumstances presented in 0:08:50.720 --> 0:08:51.200 front of it. 0:08:51.400 --> 0:08:52.920 So I put this question to both of you, and 0:08:53.000 --> 0:08:54.960 let me just start with you, Rass. I mean, I've 0:08:54.960 --> 0:08:57.240 gotten in a weymore I love it, and I've sat 0:08:57.240 --> 0:08:59.520 in the back seat, I've closed my eyes for like 0:08:59.559 --> 0:09:02.440 a thirty forty minute trip to an airport. I have 0:09:02.600 --> 0:09:06.160 loved it. So FSD full self driving? 0:09:06.720 --> 0:09:07.000 Is it? 0:09:07.280 --> 0:09:09.240 Are we crazy to think that that's going to be 0:09:09.320 --> 0:09:11.360 our world going forward, or do we have to change 0:09:11.360 --> 0:09:15.800 our infrastructure dramatically to make it possible going forward? Like 0:09:16.160 --> 0:09:19.320 trying to understand because if the model is so to. 0:09:19.400 --> 0:09:21.800 Ultrastructure is the hardest part would be the hardest part. 0:09:22.040 --> 0:09:24.560 I'm just thinking, if it's such a torture model, like, 0:09:25.160 --> 0:09:26.960 are we crazy to even be talking about it? 0:09:28.240 --> 0:09:33.360 You're getting into one of my favorite discussion debate issues 0:09:33.559 --> 0:09:36.240 out there right now, which is the future of what 0:09:36.320 --> 0:09:40.360 mobility actually looks like. And my basic premise is that 0:09:40.760 --> 0:09:43.560 humans love to drive and are not giving it up. 0:09:44.120 --> 0:09:48.920 And I'm now raising my children. I thought when I 0:09:49.000 --> 0:09:51.320 had children that we would have had this master that 0:09:51.400 --> 0:09:53.920 my kids would never learn to drive. But my kids 0:09:54.080 --> 0:09:56.120 learning how to drive now, you know what I'm saying. 0:09:56.600 --> 0:09:59.679 And people love to drive. Now, Younger people don't love 0:09:59.720 --> 0:10:01.640 to drive as much as older people. That's one thing 0:10:01.640 --> 0:10:05.079 in our surveys we've noticed. Okay, but I'm not giving 0:10:05.160 --> 0:10:08.000 up driving, And if I live another thirty years, I'm 0:10:08.040 --> 0:10:10.280 still gonna love driving. And I love cars, and I 0:10:10.320 --> 0:10:14.120 love driving fast, and I love like, you know, driving 0:10:14.200 --> 0:10:17.280 the one freeway, you know, whatever you want to call it. 0:10:17.360 --> 0:10:22.320 But you know, humans love the independence and the functionality 0:10:22.360 --> 0:10:23.440 of having their own vehicle. 0:10:23.480 --> 0:10:23.880 We've had. 0:10:24.160 --> 0:10:26.760 It started with the horse. We all had our own horse. 0:10:26.840 --> 0:10:29.480 You fought to the death to protect your horse. And 0:10:29.840 --> 0:10:33.040 I just don't see people giving up cars anytime soon 0:10:33.080 --> 0:10:35.880 for a lot of practical reasons, like when you're doing 0:10:36.040 --> 0:10:38.000 errands and you have to store stuff in your car 0:10:38.280 --> 0:10:40.199 or pick up your kids and then go to soccer. 0:10:40.480 --> 0:10:42.640 It's like you're not going to be taking cabs everywhere. 0:10:42.640 --> 0:10:45.240 That's just not a realistic view of the world. So 0:10:45.360 --> 0:10:49.240 unless we rejig our cities and start from scratch, where 0:10:49.400 --> 0:10:52.320 I think the biggest use case would be in very 0:10:52.320 --> 0:10:55.760 dense urban environments that are very difficult for people to drive. 0:10:56.400 --> 0:10:58.720 Just saying no more cars, it has to be cabs. 0:10:59.200 --> 0:11:02.480 That makes sense in New York City or downtown LA, 0:11:02.840 --> 0:11:05.520 let's say. But I just don't see how you implement that, 0:11:05.840 --> 0:11:10.160 because it's like millions of people already have their commuter 0:11:10.280 --> 0:11:12.440 lifestyle and I just don't see how that changes. 0:11:12.480 --> 0:11:16.280 All right, So EDLA. That brings us back then to Tesla. 0:11:16.320 --> 0:11:20.120 If they keep talking about FSD, I mean, they're an 0:11:20.120 --> 0:11:22.640 ev company and a lot more we know that, but 0:11:22.840 --> 0:11:25.920 I don't know is it enough. I don't know momentum 0:11:25.960 --> 0:11:28.559 I look at the valuation, like, what is this company 0:11:28.600 --> 0:11:29.439 going forward? 0:11:30.640 --> 0:11:34.160 Well, I repeat the same thing I've said every quarter 0:11:34.240 --> 0:11:38.319 for eight years. Elon Musk is often late on his predictions, 0:11:38.320 --> 0:11:40.800 but gets there in the end, and Tesla is clearly 0:11:40.840 --> 0:11:41.600 committed to this. 0:11:41.760 --> 0:11:42.520 That's part one. 0:11:43.000 --> 0:11:47.000 You know that largely Tesla has made economic benefit arguments 0:11:47.040 --> 0:11:49.520 and the industry has as well. There are people that 0:11:49.600 --> 0:11:53.120 disagree with Ross in that car ownership as a model 0:11:53.200 --> 0:11:55.960 is in doubt. You know, there are multiple reasons from 0:11:56.040 --> 0:11:59.320 the cost of owning and operating a vehicle through to 0:11:59.760 --> 0:12:02.920 generational attitude and appetite to go out and get a 0:12:03.000 --> 0:12:08.120 driving license that people feel will make the technology more 0:12:08.160 --> 0:12:11.680 pervasive and be adopted. Where people agree with Ross is 0:12:11.720 --> 0:12:15.320 the environment, the infrastructure, And I go back to the 0:12:15.360 --> 0:12:17.560 reporting always. I have to go back to what we've 0:12:17.559 --> 0:12:20.920 actually reported, which is there is a piece of legislation 0:12:21.080 --> 0:12:25.480 currently dormant and is not moved beyond the proposal stage 0:12:25.800 --> 0:12:29.360 that we reported. Elon Musk and other Tesla staff lobbied 0:12:29.480 --> 0:12:33.160 very hard on, which is to have some federal level 0:12:33.200 --> 0:12:37.120 framework where purpose built robotaxis that don't have steering wheels 0:12:37.160 --> 0:12:40.600 or pedals can be deployed unfettered in the real world, 0:12:41.120 --> 0:12:43.520 but it doesn't address that what happens with the rest 0:12:43.520 --> 0:12:46.720 of road users, and that's where academics believe we're heading 0:12:46.760 --> 0:12:47.720 for a real issue. 0:12:47.800 --> 0:12:49.679 All Right, and Lola, we know you've got some stuff 0:12:49.720 --> 0:12:54.000 to do off of these earnings, so appreciate your input 0:12:54.040 --> 0:12:57.040 throughout the day today and certainly off of Tesla's earnings. Right, 0:12:57.080 --> 0:13:01.439 we got to run. Always enjoy talking with you, Ross, 0:13:01.640 --> 0:13:04.240 Thank you so much. Ross Gerbert, President, chief executive officer 0:13:04.280 --> 0:13:07.240 of Gerbert Kawasaki Wealth and Investment Management. More than three 0:13:07.240 --> 0:13:09.920 billion in assets under management, and they own about eighty 0:13:09.920 --> 0:13:11.560 million dollars worth of Tesla shares. 0:13:12.960 --> 0:13:15.760 Stay with us more from Bloomberg Business Week Daily coming 0:13:15.840 --> 0:13:16.720 up after this. 0:13:20.240 --> 0:13:24.120 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:13:24.200 --> 0:13:26.840 us live weekday afternoons from two to five eas During 0:13:26.880 --> 0:13:30.320 that listen on Applecarplay and Android Auto with the Bloomberg 0:13:30.360 --> 0:13:33.800 Business app, or watch us live on YouTube. 0:13:34.240 --> 0:13:37.480 Bloomberg's Thomas Black He recently wrote an opinion piece and 0:13:37.520 --> 0:13:41.160 he talked about the hype around humanoid robots being pretty 0:13:41.200 --> 0:13:44.400 i with forecasts of nearly one billion humanoids in service 0:13:44.440 --> 0:13:47.240 by twenty fifty, but the reality is that most people 0:13:47.320 --> 0:13:50.080 overestimate what robots can do at this point in their development. 0:13:50.559 --> 0:13:53.000 Got to say, though, one company that's been using robots 0:13:53.040 --> 0:13:55.360 a lot and for a long time and has deployed 0:13:55.360 --> 0:13:58.000 its one millionth robot happens to be one of the 0:13:58.040 --> 0:14:00.800 world's largest market at companies out there. It's also a 0:14:00.840 --> 0:14:03.640 household name. So we wanted to check in once again 0:14:03.760 --> 0:14:08.280 with Ty Brady. He's chief technologist at Amazon Robotics. He 0:14:08.360 --> 0:14:11.040 joins us from Amazon's Delivering the Future twenty twenty five 0:14:11.120 --> 0:14:14.520 event from Amazon's d u R three. It's a delivery 0:14:14.520 --> 0:14:20.280 station in Millipedes, California, and so we kind of want 0:14:20.320 --> 0:14:22.480 to find out where they are in terms of the 0:14:22.480 --> 0:14:25.160 world of robotics. Ty, I got to tell you, Tim, 0:14:25.160 --> 0:14:26.840 and I love talking to you last time, so so 0:14:26.880 --> 0:14:29.080 glad to check in with you again. First of all, 0:14:29.200 --> 0:14:30.960 this event, where you are, I mean right now, I 0:14:31.000 --> 0:14:34.520 just see a curtain, but I'm assuming there's lots of 0:14:34.520 --> 0:14:37.720 stuff happening at the event. Who's there, what's going on? 0:14:37.960 --> 0:14:39.000 Tell us a little bit about it? 0:14:40.040 --> 0:14:40.240 Yep. 0:14:40.280 --> 0:14:41.880 Well, first of all, thank you so much for having me, 0:14:41.920 --> 0:14:43.880 and I really appreciate it and I enjoyed our conversation 0:14:44.200 --> 0:14:44.720 as well. 0:14:44.960 --> 0:14:46.320 It's just really great to be here. 0:14:46.640 --> 0:14:51.240 We are are fourth delivering the Future event here and 0:14:51.560 --> 0:14:53.680 there's a bunch of press that we have here, and 0:14:53.720 --> 0:14:56.560 we made a couple of big announcements in robotics today. 0:14:57.320 --> 0:14:59.600 Can you tell us about them if you have. 0:14:59.760 --> 0:15:06.720 But the first is in our manipulation robot that we 0:15:06.800 --> 0:15:09.280 call blue Jay. And what blue Jay the way that 0:15:09.360 --> 0:15:10.880 you can think of that as we can you can 0:15:10.960 --> 0:15:12.920 take three assembly lines and put it in the same 0:15:12.920 --> 0:15:16.680 footprint of one. What it does is help eliminate the menial, 0:15:16.720 --> 0:15:19.120 the mundane, and the repetitive, and it could pick more 0:15:19.160 --> 0:15:21.560 than seventy five percent of the inventory that we actually 0:15:21.560 --> 0:15:23.920 sell in our sortable network, which is a really big deal. 0:15:24.080 --> 0:15:26.160 I'm really proud of that. And I also say there's 0:15:26.240 --> 0:15:28.600 something interesting about blue Jay as well as compared to 0:15:28.680 --> 0:15:34.640 our other bird manipulation systems Cardinal, Sparrow and Robin, it 0:15:34.680 --> 0:15:37.720 took us about three years to kind of design, deploy 0:15:37.880 --> 0:15:41.200 and get out to our frontline employees. We have actually 0:15:41.880 --> 0:15:44.480 done blue Jay with the power of AI in just 0:15:44.600 --> 0:15:47.520 over a year, so it's really the pace of innovation. 0:15:48.040 --> 0:15:50.000 I think a lot of people think about Amazon and 0:15:50.080 --> 0:15:51.600 robots I just want to jump in because we don't 0:15:51.600 --> 0:15:53.080 have a ton of time, but I I want we'll 0:15:53.080 --> 0:15:54.800 get to some of the other announcements. They think about 0:15:54.840 --> 0:15:58.640 the Kiva Systems robots the big acquisition at the time, 0:15:58.760 --> 0:16:01.680 you know, twenty twelve. That was a big position for Amazon, 0:16:01.880 --> 0:16:03.920 and they've seen pictures of the way that those can 0:16:03.960 --> 0:16:07.480 move large loads of things across warehouses. But if you 0:16:07.480 --> 0:16:09.480 were to go into a state of the art Amazon 0:16:09.560 --> 0:16:12.600 warehouse today, what would you see That's in addition to 0:16:12.600 --> 0:16:13.640 those Kiva robots. 0:16:14.360 --> 0:16:17.880 Yeah, in addition to the world's first goods to person 0:16:17.960 --> 0:16:22.200 fulfillment strategy, which was a really good idea where we 0:16:22.240 --> 0:16:24.600 have more than a million robots that we manufacture action 0:16:24.680 --> 0:16:27.720 in Massachusetts doing that job every day. You're going to 0:16:27.720 --> 0:16:30.040 see more of the unstructured fields, right, So, you're going 0:16:30.080 --> 0:16:33.000 to see green robot that we call Proteus that can 0:16:33.080 --> 0:16:39.040 move big cargoes of packages to the right dock at 0:16:39.040 --> 0:16:42.720 the right time. You're going to see many more manipulation 0:16:42.840 --> 0:16:45.520 systems that we have in there, eliminating kind of the 0:16:45.560 --> 0:16:47.760 repetitive motions that they we have. No one wants to 0:16:47.840 --> 0:16:51.160 lift a fifty pound box box all day. Robin does 0:16:51.200 --> 0:16:54.640 that cardinal does that. Moving into some of these proteus 0:16:54.640 --> 0:17:00.160 bound karts that we have, you're going to see much 0:17:00.200 --> 0:17:03.560 more collaborative robotics, right. So that's where we build our 0:17:03.640 --> 0:17:07.240 robotics systems to enable people to augment what people are 0:17:07.240 --> 0:17:10.679 capable of. And we really believe in the philosophy of 0:17:10.800 --> 0:17:13.639 people and machines working together. How can we build a 0:17:13.680 --> 0:17:17.440 tool set that enables our employees to do their job 0:17:17.520 --> 0:17:21.000 not only more efficiently, but also with better safety in mind? 0:17:21.040 --> 0:17:23.080 All right, So there's this robot arm called blue Jay. 0:17:23.080 --> 0:17:24.800 You just talked about it. You know, you guys are 0:17:24.880 --> 0:17:28.600 using this AI agent called the Iluna, and then you're 0:17:28.840 --> 0:17:31.960 also working with augmented reality glasses to be worn by 0:17:32.080 --> 0:17:35.320 drivers and delivery trucks in the field. There's like so 0:17:35.440 --> 0:17:38.480 much going on. Step back for a moment, because you 0:17:38.560 --> 0:17:40.719 guys have a lot of data. You look at what 0:17:40.760 --> 0:17:44.520 you're doing. I'm just curious investors who are thinking about 0:17:44.520 --> 0:17:46.320 Amazon and what you are doing, how do they think 0:17:46.320 --> 0:17:49.360 about the long term, like ROI return on investment When 0:17:49.400 --> 0:17:52.240 it comes to the investment you guys make in robots. 0:17:52.560 --> 0:17:56.280 Is the goal about labor efficiency through put speed or 0:17:56.320 --> 0:17:59.960 is it margin expansion? Kind of tie across your full 0:18:00.040 --> 0:18:01.440 filment operations. What is it? 0:18:02.960 --> 0:18:05.080 Yeah, well, definitely efficiency. 0:18:05.119 --> 0:18:08.360 We think about efficiencies and how can we gain efficiency 0:18:08.520 --> 0:18:12.160 through all the chain of our fulfillment processes for sure, 0:18:12.280 --> 0:18:15.800 And you mentioned data and data is the fuel for 0:18:15.840 --> 0:18:20.320 AI systems. Data has allowed us to bring think of 0:18:19.640 --> 0:18:23.399 the body of being our robotics, but bring the mind 0:18:23.680 --> 0:18:27.040 to robotics, allowing it to be more adaptable, more fluid. 0:18:27.320 --> 0:18:29.639 You can almost think of this as the ability to 0:18:29.640 --> 0:18:32.800 pour our robotics systems into any size building, any scale 0:18:33.119 --> 0:18:37.280 of building, to amplify what our employees are already doing. 0:18:37.440 --> 0:18:39.159 We want to give them an amazing tool set and 0:18:39.200 --> 0:18:41.720 we see that when we do that, we're more productive. 0:18:41.760 --> 0:18:44.040 Right when you do robotics, right when you do collab 0:18:44.080 --> 0:18:46.360 of robotics where you need both people and machines doing 0:18:46.359 --> 0:18:49.240 what they do best and they do different things better, 0:18:50.200 --> 0:18:51.919 that it allows you to be more productive. And when 0:18:51.920 --> 0:18:55.479 you're more productive, that allows you to invest more in people. 0:18:55.560 --> 0:18:58.119 We've skilled more than seven hundred thousand of our employees, 0:18:58.560 --> 0:19:01.400 which is a great stat And also in our robotics 0:19:01.440 --> 0:19:04.080 we've expanded from the Kiba days. We've expanded from just 0:19:04.160 --> 0:19:07.920 a movement solution to now movement and mobility and sortation 0:19:08.119 --> 0:19:11.880 and storage and perception systems, packing systems that have really 0:19:12.000 --> 0:19:15.320 changed the game for our customers. That's a big deal 0:19:15.359 --> 0:19:15.680 to us. 0:19:15.760 --> 0:19:19.359 But Ty, you know, well you need less workers, and 0:19:19.400 --> 0:19:21.600 I got to bring it up. You know, The Times 0:19:21.600 --> 0:19:25.879 had a story out They talked about interviews and a 0:19:25.880 --> 0:19:29.560 cash of internal strategy documents that they saw that it 0:19:29.600 --> 0:19:33.040 reveals that your execs think that the company's on the 0:19:33.080 --> 0:19:35.880 cusp of its next big workplace shift. I'm reading from 0:19:35.880 --> 0:19:38.200 the Times and replacing more than half a million jobs 0:19:38.200 --> 0:19:41.200 with robots, so you know, we know things change. I'm 0:19:41.200 --> 0:19:43.440 not in a horse and buggy anymore. I don't make 0:19:43.480 --> 0:19:46.760 things piecemeal. I get it. I don't get tons of 0:19:46.800 --> 0:19:50.440 faxes and I don't get tons of pieces of physical mail. 0:19:50.640 --> 0:19:54.960 Thank God, things change. Having said that, is Amazon, do 0:19:55.040 --> 0:19:57.240 you guys believe that you're on the cusp of a 0:19:57.280 --> 0:20:00.000 workplace shift and that you won't need as many workers 0:20:00.200 --> 0:20:02.560 because the advancements in robotics. 0:20:03.640 --> 0:20:05.879 Well, there's no doubt that things change. I mean, and 0:20:05.920 --> 0:20:08.399 we're actually really proud of that. And Amazon is that 0:20:09.000 --> 0:20:12.400 we avoid stasis at all costs. We change and we 0:20:12.520 --> 0:20:16.719 adapt and the nature of tasks definitely changed, There's no 0:20:16.760 --> 0:20:20.800 doubt about that. We are laser focused on efficiencies inside 0:20:20.800 --> 0:20:24.240 of our buildings. But when it comes to that article, 0:20:24.480 --> 0:20:27.280 that article was speculating ten years out right, that's a 0:20:27.320 --> 0:20:30.960 ten year speculation, and it's hard to say what's going 0:20:31.040 --> 0:20:32.720 to happen in the next ten years. But I can 0:20:32.760 --> 0:20:35.000