WEBVTT - AI Funding Frenzy Continues with Cursor, Thinking Machines 0:00:02.520 --> 0:00:12.880 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:12.920 --> 0:00:16.720 from coast to coast with Caroline Hyde in New York 0:00:17.040 --> 0:00:18.919 and Eva low in sentrancs go. 0:00:22.239 --> 0:00:25.479 This is Bloomberg Tech, Coming up Tech socks, whip saws, 0:00:25.560 --> 0:00:28.960 Skepticism grows about the FED being able to cut interest rates. 0:00:28.960 --> 0:00:32.199 In December plus Thinking Machines, the AI startup founded by 0:00:32.280 --> 0:00:35.159 former Open Ai exec Mir Marati, is in talks to 0:00:35.240 --> 0:00:37.959 raise funding at fifty billion dollar valuation. 0:00:38.640 --> 0:00:41.680 And we sit down with the CEO of Cursor after 0:00:41.720 --> 0:00:44.440 it raised two point three billion dollars in a funding 0:00:44.920 --> 0:00:48.280 valuing the company twenty nine point three billion dollars. 0:00:48.320 --> 0:00:52.360 Carter massive private sector funding valuations. But let's get to 0:00:52.400 --> 0:00:54.280 the public sector, because we are being whip sored on 0:00:54.280 --> 0:00:54.640 the day. 0:00:54.560 --> 0:00:57.640 That we are flat if you're going your five day stretch. 0:00:57.720 --> 0:01:00.280 The NASNAC is currently flat as a pancake, as we 0:01:00.360 --> 0:01:02.280 might say over in the UK. But at the moment, 0:01:02.440 --> 0:01:05.800 we are still seeing this questioning, question of valuations, questioning 0:01:05.840 --> 0:01:09.080 of sustainability of CAPEC spend from the big AI players, 0:01:09.240 --> 0:01:11.360 question of what the Federal Reserve does next. So we 0:01:11.440 --> 0:01:14.399 dig into key assets that see volatility this week but 0:01:14.440 --> 0:01:16.280 I'm looking at Crypto has been in the eye of 0:01:16.280 --> 0:01:18.520 the form. We're off by seven percent, let's call it. 0:01:18.760 --> 0:01:19.280 On Bitcoin. 0:01:19.319 --> 0:01:21.840 More broadly, we're seeing a lot of pullback in terms 0:01:21.880 --> 0:01:24.320 of the ETF buying. We see another more than eight 0:01:24.400 --> 0:01:27.560 hundred million dollars washed out in terms of outflows from 0:01:27.600 --> 0:01:28.640 those ETF products. 0:01:28.760 --> 0:01:32.399 D The mood music of the market has changed this 0:01:32.520 --> 0:01:35.680 Friday in the context of technology best laid plans. I 0:01:35.720 --> 0:01:37.440 was going to tell you that Tesla and n Video 0:01:37.520 --> 0:01:41.000 was two of the biggest decliners. Actually both now positive territory, 0:01:41.280 --> 0:01:43.600 but over the course of the week, probably in Video 0:01:43.680 --> 0:01:47.000 more than any other, has had volatility, starting the week 0:01:47.000 --> 0:01:50.040 with a really big jump, then declining on news flow 0:01:50.080 --> 0:01:52.200 actually an aggregate over the course of the week, it's 0:01:52.240 --> 0:01:55.040 basically flat. But then there's the Super Bowl next week 0:01:55.080 --> 0:01:58.440 with its earnings. Are we really talking about the FED 0:01:58.600 --> 0:02:01.200 or are we really talking about an AI bubble and valuations? 0:02:01.240 --> 0:02:02.480 Probably both at this point. 0:02:02.520 --> 0:02:05.240 Character Yeah, and let's get to both of those key 0:02:05.840 --> 0:02:08.720 elements we want to dissect. Blueing b TV Markets correspondent 0:02:08.800 --> 0:02:11.920 Norah Melinda is here to really break down what felt 0:02:11.960 --> 0:02:14.040 like the start of the day of a risk of rally. 0:02:14.080 --> 0:02:16.280 The risk off is still there in crypto, but we're 0:02:16.320 --> 0:02:17.959 really getting whip sored in the stock market. 0:02:18.200 --> 0:02:19.920 We're seeing a lot of whip song in the market 0:02:19.960 --> 0:02:22.920 and a lot of conversation here about a potential AI bubble. 0:02:23.080 --> 0:02:25.000 But when you think about valuations from the S and 0:02:25.000 --> 0:02:27.600 P five hundred more broadly, we haven't even seen a 0:02:27.680 --> 0:02:29.720 five percent decline in the S and P five hundred 0:02:29.800 --> 0:02:32.280 since April. So we do have folks over at Truer 0:02:32.320 --> 0:02:34.960 Securities really talking about the fact that maybe this is 0:02:35.040 --> 0:02:37.480 time for a correction because this is a longer period 0:02:37.480 --> 0:02:40.280 than we've seen opposed to normal here, as we haven't 0:02:40.280 --> 0:02:42.480 seen a correction here for the broader market. 0:02:43.560 --> 0:02:45.360 Norah'm going to let you and the audience in on 0:02:45.400 --> 0:02:48.480 a secret. I was going to take a vacation next week. Okay, 0:02:49.360 --> 0:02:53.560 check my calendar. Super Bowl Wednesday. In video earnings. We've 0:02:53.600 --> 0:02:55.560 got to talk about it and one of the reasons 0:02:55.560 --> 0:02:57.560 it's great to having the program. Let's talk about it 0:02:57.600 --> 0:03:00.840 through the lens of the options market and what that's 0:03:00.919 --> 0:03:03.960 telling us about how they've looked at their calendars and 0:03:04.000 --> 0:03:05.680 how they're preparing for that print. 0:03:06.120 --> 0:03:08.799 Well, a lot of activity happening here in the options market, 0:03:08.880 --> 0:03:10.640 as you mentioned in Vidia of course being the super 0:03:10.680 --> 0:03:13.560 Bowl event for the market next Wednesday post market, but 0:03:13.639 --> 0:03:17.000 we are seeing call options here on the vis what 0:03:17.160 --> 0:03:20.280 strikes around sixty here and set to expire right before 0:03:20.720 --> 0:03:23.040 the Nvidia earnings come out. So it really is showing 0:03:23.080 --> 0:03:25.520 you a bit of a glimpse into the options market 0:03:25.639 --> 0:03:27.720 and what that means is we think about volatility more 0:03:27.760 --> 0:03:29.600 broadly and what that means for the broader market. 0:03:30.000 --> 0:03:31.960 Someone's taking a bit of a holiday at least until 0:03:31.960 --> 0:03:33.000 November the twenty fifth. 0:03:33.360 --> 0:03:34.200 That's Michael Barry. 0:03:34.320 --> 0:03:36.600 We understand a course, he's been winding down his sec 0:03:36.720 --> 0:03:40.840 at least for Sion Asset Management, but he really sparked 0:03:40.880 --> 0:03:44.880 off this whole narrative about how we assess assets and 0:03:45.320 --> 0:03:48.520 ultimately the deterioration of them when it comes to GPS and. 0:03:48.520 --> 0:03:50.960 Chips right, and he is talking about the fact that 0:03:51.000 --> 0:03:53.040 potentially a lot of these tech companies are using it 0:03:53.080 --> 0:03:56.360 to pad artificially their earnings here. So when we think 0:03:56.400 --> 0:03:58.160 about tech companies and the fact that we do see 0:03:58.160 --> 0:04:01.560 them flying high, we're seeing evaluations super intense here, We're 0:04:01.560 --> 0:04:04.200 seeing them very high. It just really begs the question 0:04:04.280 --> 0:04:06.400 more brobvious to whether or not these tech companies are 0:04:06.440 --> 0:04:09.559 running further beyond what fundamentals will actually allow. 0:04:10.800 --> 0:04:13.240 Invokes Nora Melinda with the tech market. Look, thank you 0:04:13.320 --> 0:04:15.680 so much. Let's keep the discussion going and break down 0:04:15.720 --> 0:04:18.679 the signals and the economy how they trickle into business. 0:04:18.800 --> 0:04:22.920 Natalie Gallagher is principal economist and director at Board, an 0:04:22.920 --> 0:04:27.400 AI powered enterprise planning platform providing macro analysis and strategic 0:04:27.400 --> 0:04:31.040 guidance to global companies on business, investment and economic policy. 0:04:31.680 --> 0:04:32.880 It's been a difficult week. 0:04:33.640 --> 0:04:36.760 We planned this morning show with the narrative in the 0:04:36.800 --> 0:04:39.240 market right now that this is about the FED and 0:04:39.279 --> 0:04:42.279 what they will or won't do in December, but actually, 0:04:42.520 --> 0:04:44.080 over the course of the week, it wasn't about that 0:04:44.160 --> 0:04:47.520 at all. It was about valuations in an AI bubble 0:04:47.600 --> 0:04:50.760 or not an AI bubble? What's the real driving force 0:04:50.880 --> 0:04:52.400 right now? That's top of mind for the people you 0:04:52.400 --> 0:04:52.800 speak to. 0:04:53.400 --> 0:04:56.640 Yeah, you know, the debate has absolutely intensified when we 0:04:56.680 --> 0:04:58.920 talk about are we in an AI bubble? And there's 0:04:58.960 --> 0:05:01.719 really there's two sides to the story. On one side, 0:05:01.760 --> 0:05:04.560 it doesn't appear to be as cut and dry as 0:05:04.600 --> 0:05:07.400 maybe a repeat of the dot com bubble, and that's 0:05:07.440 --> 0:05:12.400 because we have spending on real capital contracted services. We 0:05:12.440 --> 0:05:16.040 also see profitability, right, We see revenue growth when we 0:05:16.320 --> 0:05:21.560 look at enterprise planning, when we look at productivity tools, advertising, 0:05:21.800 --> 0:05:24.720 and third and foremost, we also see that the hyperscalers 0:05:24.720 --> 0:05:27.040 have some pretty resilient balance sheets to fall back on. 0:05:27.360 --> 0:05:30.040 Now, there's absolutely risk right as we as. 0:05:29.920 --> 0:05:33.120 We approach the potential for an AI bubble, but it's 0:05:33.120 --> 0:05:33.960 not as cut and dry. 0:05:34.320 --> 0:05:35.799 Let's try and link it to the Fed. 0:05:36.080 --> 0:05:39.320 You know, why does it matter if the Fed does 0:05:39.400 --> 0:05:41.600 or does not cut interest rates again in December? 0:05:42.080 --> 0:05:46.440 Yeah, it matters extensively, especially for a sector like tech 0:05:46.480 --> 0:05:49.440 because it's so rate sensitive. When we look at discounted 0:05:49.440 --> 0:05:52.039 cash flows, we look at M and A activity. You know, 0:05:52.080 --> 0:05:55.560 the Federal Reserve was already flying partially blind back in October. 0:05:56.040 --> 0:05:58.520 Very likely data is going to continue to be delayed 0:05:58.920 --> 0:06:01.760 or offset as we get into December, and. 0:06:01.680 --> 0:06:04.159 So that elevates the risk of a flower Reserve. 0:06:03.880 --> 0:06:07.080 Misstep that's going to have an outsized impact on tech. 0:06:07.920 --> 0:06:11.880 What's having an outsized impact on the economy is AI investment. 0:06:12.040 --> 0:06:15.440 In many ways, it's underlying why we see GDP growth. 0:06:15.720 --> 0:06:18.240 But I've been speaking to CEOs of late and underneath 0:06:18.320 --> 0:06:22.200 the hood, they're saying this economy is weak, and actually 0:06:22.279 --> 0:06:25.680 we're seeing companies Verizon this week, Amazon earlier, they are 0:06:25.760 --> 0:06:28.400 laying off tens of thousands of people in many ways 0:06:28.400 --> 0:06:30.640 to try and right side their cost base. Natalie, what 0:06:30.680 --> 0:06:33.080 are you actually hearing from the companies that leave right now? 0:06:34.400 --> 0:06:34.560 Oh? 0:06:34.680 --> 0:06:37.080 What I'm actually hearing is that there's really two sides 0:06:37.120 --> 0:06:39.640 to the economy right now. Right it's regularly called a 0:06:39.760 --> 0:06:41.159 K shaped economy. 0:06:41.200 --> 0:06:42.360 So you're absolutely right. 0:06:42.760 --> 0:06:46.880 We have AI valuations that are really driving business investment 0:06:46.920 --> 0:06:49.680 and overall economic growth. R and D spending. For example, 0:06:49.720 --> 0:06:52.680 it was up fifteen percent in Q two. That is 0:06:52.680 --> 0:06:55.360 the highest it's been since the dot com era. Now, 0:06:55.400 --> 0:06:58.800 when we talk about what's also sort of channeling economic growth, 0:06:58.839 --> 0:07:03.159 those AI valuations, they're allowing higher income consumers to continue 0:07:03.200 --> 0:07:04.479 to drive growth in the economy. 0:07:04.600 --> 0:07:06.120 And that's why it's so important as. 0:07:05.960 --> 0:07:07.800 We get into twenty twenty six, we really have to 0:07:07.800 --> 0:07:09.880 talk about what does the tech sector look like and 0:07:09.880 --> 0:07:12.040 what does AI look like in the next twelve months. 0:07:12.240 --> 0:07:14.320 Now, Natalie, I'm going to ask more of a complex 0:07:14.360 --> 0:07:16.400 one now, and I want your take just more broadly 0:07:16.480 --> 0:07:18.760 on women's thinking about the AI bubble. 0:07:19.000 --> 0:07:19.600 Michael Barry. 0:07:19.680 --> 0:07:22.760 Many in the media have been talking about this depreciation 0:07:22.840 --> 0:07:24.920 of certain assets. In particular, we're trying to work out 0:07:24.960 --> 0:07:27.120 just how long an NVIDIAGPU lasts. 0:07:27.160 --> 0:07:28.000 You has hit three. 0:07:27.960 --> 0:07:30.000 Years, four years, five years, and the company is sort 0:07:30.040 --> 0:07:35.560 of doing accounting wouldn't say tricks, but accounting changes to 0:07:35.680 --> 0:07:38.680 try and understand how long these assets really last. From 0:07:38.720 --> 0:07:41.720 your perspective, what is the asset that we should be analyzing, 0:07:41.760 --> 0:07:44.920 What is the underlying accounting we should be keeping an 0:07:44.960 --> 0:07:46.680 eye on, you. 0:07:46.720 --> 0:07:48.480 Know, I would say even broader picture. 0:07:48.640 --> 0:07:51.600 What we really need to track is the investment that's 0:07:51.640 --> 0:07:54.560 been taking place right There's been a significant investment way 0:07:54.800 --> 0:07:56.120 really across assets, and. 0:07:56.080 --> 0:07:57.600 This is just part of the broader story. 0:07:57.880 --> 0:07:59.720 What we're really going to need to see from an 0:07:59.720 --> 0:08:04.000 eggnomic perspective, is this translate into meaningful productivity growth. If 0:08:04.040 --> 0:08:07.200 we don't see that, then we risk a capital misallocation story. 0:08:07.600 --> 0:08:09.000 Just a couple of minutes time, we're going to go 0:08:09.160 --> 0:08:13.200 talk about applied materials the chip equipment maker, but that 0:08:13.440 --> 0:08:17.240 story illustrates that Right now, there is still an issue 0:08:17.240 --> 0:08:21.960 with tariffs and with China and with trade policy. How 0:08:22.040 --> 0:08:24.640 is that impacting the global economy right now? 0:08:25.080 --> 0:08:25.520 Right now? 0:08:25.600 --> 0:08:28.200 You know, we saw an immediate de escalation when we 0:08:28.280 --> 0:08:31.760 had the US China trade talks back in October, and 0:08:31.840 --> 0:08:35.280 so that removed an immediate headwind, but it also introduced 0:08:35.320 --> 0:08:39.199 a structural issue. Right we have an annual renegotiation. 0:08:38.559 --> 0:08:39.560 Period for example. 0:08:39.920 --> 0:08:42.679 Now, what that does in in broader sense, what tariffs 0:08:42.760 --> 0:08:46.080 do is they create a situation where companies don't have 0:08:46.200 --> 0:08:48.199 quite the forward guidance that they would like. Because we're 0:08:48.200 --> 0:08:51.559 talking about investment cycles that are seven to ten years. Realistically, 0:08:51.600 --> 0:08:54.600 we're getting about one year visibility and two overall prices. 0:08:55.160 --> 0:08:58.520 We're about to get a bit of visibility next week 0:08:58.800 --> 0:09:02.000 with our so called super when it comes to videas fundamentals. 0:09:02.440 --> 0:09:03.480 But when you're. 0:09:03.320 --> 0:09:06.440 Giving analysis, when you're thinking about strategic advice, do you 0:09:06.520 --> 0:09:10.080 think the commitment to continue spending by big aipays is 0:09:10.120 --> 0:09:12.959 there and is there globally at the moment, Natalie. 0:09:13.440 --> 0:09:17.640 I absolutely think it continues to be have a lot 0:09:17.679 --> 0:09:20.319 of weight behind it. Now, what I also see when 0:09:20.320 --> 0:09:22.160 I look at the numbers is that there's been sort 0:09:22.160 --> 0:09:26.439 of a clear shift in investment strategy towards evidence based 0:09:27.200 --> 0:09:29.440 investment rather than just spending on faith alone. 0:09:29.520 --> 0:09:29.880 You know, we. 0:09:29.840 --> 0:09:32.760 Absolutely saw this with how investors responded to share prices 0:09:32.800 --> 0:09:34.640 following the earnings release back in October. 0:09:35.520 --> 0:09:37.920 It's been great having you come back to Natalie gallagha 0:09:37.920 --> 0:09:39.440 As she's principal economist at Board. 0:09:39.480 --> 0:09:43.079 We appreciate it. Look, it just teased us Apply Materials. 0:09:43.200 --> 0:09:43.840 Let's go there. 0:09:44.000 --> 0:09:45.400 I'm just going to flip on from Tesla and a 0:09:45.480 --> 0:09:47.640 video and show you what's happening in Apply Materials Stop 0:09:47.720 --> 0:09:49.640 right now, because we're off now only. 0:09:49.440 --> 0:09:50.640 By three tenths of a percent. 0:09:50.720 --> 0:09:53.640 This company was sinking as much as six percent at 0:09:53.679 --> 0:09:55.760 the opening of trade. We will worried about the current 0:09:55.800 --> 0:09:58.880 quarter sales that are suffering largely because of a decline 0:09:58.960 --> 0:10:02.120 in Chinese business in particular that is a significant about 0:10:02.280 --> 0:10:04.440 thirty percent, let's called it. Twenty nine percent of total 0:10:04.480 --> 0:10:07.760 fourth quarter sales were from mainland China and they declined 0:10:07.800 --> 0:10:10.280 some eight percent year on year. What are we thinking 0:10:10.280 --> 0:10:12.640 about this fiscal year? Look, we've just been talking about 0:10:12.640 --> 0:10:14.679 Taras and we know the outlook isn't great. But it's 0:10:14.760 --> 0:10:17.000 interesting how much this stop wants to rebound, how much 0:10:17.040 --> 0:10:19.880 the market wants to rebound, right now Yeah. 0:10:20.760 --> 0:10:21.280 Coming up. 0:10:21.840 --> 0:10:26.480 Former opai executive Mirror Marti's startup Thinking Machines Lab could 0:10:26.559 --> 0:10:30.480 soon rank among the world's most valuable private companies. Give 0:10:30.480 --> 0:10:33.640 you the latest in the funding talks. Next Sploomberg Tech. 0:10:42.040 --> 0:10:45.200 Thinking machines Lab the AI startup founded by former open 0:10:45.240 --> 0:10:48.240 ai executive Mirror Maurati. It could become one of the 0:10:48.240 --> 0:10:51.559 most valuable private companies less than a year after I launched. 0:10:51.800 --> 0:10:53.960 According to sources, the startup is in talks to raise 0:10:54.000 --> 0:10:58.040 funding and a fifty billion dollar valuation, quadrupling its value 0:10:58.040 --> 0:11:01.480 from July. Let's get more from Rachel Metz who worked 0:11:01.480 --> 0:11:03.600 on this story. Well, their very own ed Ludlow and 0:11:03.600 --> 0:11:07.959 shrin KAfari. Look is their fundamental growth? This is vindicating 0:11:08.160 --> 0:11:10.240 this sort of fifty billion or is it on the 0:11:10.280 --> 0:11:13.320 backing that she was there in such a leadership position 0:11:13.360 --> 0:11:14.120 over at open Ai. 0:11:15.559 --> 0:11:18.200 I mean, it's a very young company and they have 0:11:18.320 --> 0:11:21.800 released a product, so it is possible that they're seeing 0:11:21.840 --> 0:11:24.400 a lot of traction that they haven't spoken about publicly yet. 0:11:24.440 --> 0:11:27.680 For their product, it's called Tinker and it helps people 0:11:27.720 --> 0:11:32.880 and companies fine tune AI systems. But it's not clear 0:11:33.200 --> 0:11:35.520 how much growth they could actually have right if they've 0:11:35.520 --> 0:11:37.280 been around for less than a year, so it's pretty 0:11:37.320 --> 0:11:39.320 tremendous so that they'd be in tox with this kind 0:11:39.360 --> 0:11:40.280 of money and valuation. 0:11:41.200 --> 0:11:44.200 When we broke the story, people on social media kind 0:11:44.240 --> 0:11:46.080 of blew up and they were saying, oh, that would 0:11:46.120 --> 0:11:49.320 be twenty five billion dollars per blog post because the 0:11:49.360 --> 0:11:50.600 company has only ever done. 0:11:50.480 --> 0:11:51.679 Two blog posts. 0:11:51.880 --> 0:11:53.600 But what we did get the sense that this is 0:11:53.679 --> 0:11:57.560 Mira Marati right, that she is out there talking to 0:11:57.600 --> 0:11:58.520 investors about this. 0:11:58.640 --> 0:11:59.080 It's her. 0:11:59.240 --> 0:12:01.920 She's the face of that explained to our audience who 0:12:01.960 --> 0:12:06.480 she is, why she's important, and I guess the intellectual 0:12:06.559 --> 0:12:09.240 capital that she gives that place. 0:12:10.360 --> 0:12:10.680 Sure. 0:12:10.800 --> 0:12:13.600 So Murti has been in the tech industry for a 0:12:13.600 --> 0:12:17.080 long time. She has been an Open AI or had 0:12:17.120 --> 0:12:19.080 been an Open AI for a number of years and 0:12:19.320 --> 0:12:22.560 was an executive there. So she was at the company 0:12:23.040 --> 0:12:27.920 through before things sort of like exploded with the brief 0:12:27.960 --> 0:12:30.360 ousting and rehiring of Sam Altman. In fact, she was 0:12:30.520 --> 0:12:35.040 very very briefly named CEO during that whole debacle. So 0:12:35.600 --> 0:12:38.440 she has a lot of experience dealing with crisis and 0:12:38.480 --> 0:12:41.360 also with a company that's grown very very quickly in 0:12:41.480 --> 0:12:45.160 AI and she has attracted a tremendous roster of talent 0:12:45.360 --> 0:12:46.400 at this company. 0:12:46.080 --> 0:12:49.480 Thinking, yeah, dig into that talent, Rachel, because she actually 0:12:49.760 --> 0:12:52.959 drew over with her an awful lot of ex Open AI, well, 0:12:52.960 --> 0:12:54.760 actual co founders going with her. 0:12:55.840 --> 0:13:00.240 Absolutely, yes, quite a number of early employees. She has 0:13:00.760 --> 0:13:03.280 co founded. One of the co founding employees over there, 0:13:03.800 --> 0:13:08.520 John Shulman, with her. And also there are people advising 0:13:08.559 --> 0:13:10.720 the company that used to work at OPENINGI. So it's 0:13:10.760 --> 0:13:13.760 a very deep bench of experience from that company, but 0:13:13.800 --> 0:13:17.400 also from other companies as well. But open Ai in particular, 0:13:17.840 --> 0:13:20.280 there was a quite an exodus of talent from that 0:13:20.400 --> 0:13:21.520 company to her company. 0:13:22.280 --> 0:13:24.440 And again, the reason this is extraordinary it was only 0:13:24.480 --> 0:13:27.640 February that they kind of came into existence publicly. July 0:13:27.920 --> 0:13:31.840 raised at a twelve billion dollar valuation. Now November talks 0:13:31.840 --> 0:13:35.320 for fifty billion dollar valuation, maybe more. Bloomberg's Rachel match, 0:13:35.400 --> 0:13:38.480 thank you very much. Turning to media paramount, Netflix and 0:13:38.520 --> 0:13:43.520 Comcast are eyeing potential bids for Warner Brothers Discovery. Meanwhile, 0:13:43.559 --> 0:13:47.960 the company has amended CEO David Zaslav's contract to secure 0:13:48.000 --> 0:13:50.440 his pay in the event of a sale. For more, 0:13:50.679 --> 0:13:53.240 let's bring in Bloomberg's Felix Gillette who joins us. Now 0:13:53.360 --> 0:13:56.839 there's a deadline to this, the bid part, and so 0:13:57.040 --> 0:14:01.079 there's some mechanics to why Warner Brothers Discovery took this step. 0:14:02.280 --> 0:14:02.600 Yeah. 0:14:02.720 --> 0:14:04.920 I mean, now we know that the deadline for the 0:14:04.920 --> 0:14:08.679 first bids is a week from yesterday, November twentieth, So 0:14:08.720 --> 0:14:11.160 that's coming up fast. And I think this is another 0:14:11.200 --> 0:14:14.920 signal that, you know, big transaction potentially could be coming 0:14:14.920 --> 0:14:17.400 down the pipeline sooner rather than later. You know, they 0:14:17.480 --> 0:14:22.840 changed Thatslov's compensation package to account for all these different possibilities, 0:14:23.640 --> 0:14:25.560 you know, whether it's a sale of the whole company, 0:14:25.600 --> 0:14:28.800 whether it's a partial sale, or potentially if there is 0:14:28.840 --> 0:14:31.840 no sale and the company goes through with its planned 0:14:32.120 --> 0:14:35.520 original plant spin off of the you know, the cable 0:14:35.560 --> 0:14:38.320 networks from the studio and streaming business next year. 0:14:38.480 --> 0:14:40.880 It's interesting. Now that's a reverse spin off. Initially it 0:14:40.960 --> 0:14:42.800 was going to be Warner Brothers. It was spun off. 0:14:42.840 --> 0:14:44.640 The actual bit of. 0:14:44.640 --> 0:14:47.880 Movies and the magic and the streaming and cables were 0:14:47.880 --> 0:14:50.200 going to be left with Discovery Global, and now it's 0:14:50.200 --> 0:14:53.520 the other way around. But whatever the case, Detasazlov's saying 0:14:53.680 --> 0:14:57.560 I'm committed until twenty thirty. Unless he's been he you know, 0:14:57.720 --> 0:14:59.480 has to leave because the company is bought. 0:14:59.600 --> 0:15:01.280 From your perspective, you're hearing more that. 0:15:01.480 --> 0:15:04.520 The insiders would like it as a whole sold, or 0:15:04.520 --> 0:15:07.720 would they like it sold for parts into different players. 0:15:08.360 --> 0:15:09.600 Depends on who the bidder is. 0:15:09.640 --> 0:15:13.920 I mean, Paramount Skydance clearly wants the whole thing. They're 0:15:13.920 --> 0:15:16.240 happy to take the cable networks that would fit in 0:15:16.280 --> 0:15:19.640 with their portfolio and give them additional scale. But if 0:15:19.680 --> 0:15:21.760 you're talking about Netflix, they have no interest in the 0:15:21.800 --> 0:15:25.560 cable networks. They just want, you know, the studio's business, 0:15:25.600 --> 0:15:29.960 the library, the HBO Max side of things. Comcast you 0:15:30.000 --> 0:15:33.280 could see maybe going either way, but really they want 0:15:33.320 --> 0:15:37.880 the studio, the library in terms of scale, getting their 0:15:37.920 --> 0:15:40.800 streaming business. Peacock, I think they're worried that if they 0:15:40.800 --> 0:15:43.320 don't do a big transaction like this, you know, it's 0:15:43.320 --> 0:15:45.360 going to be very difficult to keep up with Netflix 0:15:45.400 --> 0:15:46.680 and Amazon the years ahead. 0:15:47.720 --> 0:15:50.560 Fish, you've already answered this, but let's leave our audience 0:15:50.600 --> 0:15:53.200 with the what we know, So explain just very quickly 0:15:53.240 --> 0:15:55.960 again the deadline and where we think these bids stand. 0:15:56.800 --> 0:15:59.320 Yeah, the deadline for the first bids is a week 0:15:59.680 --> 0:16:03.280 from yesterday, Thursday, November twentieth. We think these three companies 0:16:03.280 --> 0:16:06.560 are going to submit bids, and you know, the Warner 0:16:06.600 --> 0:16:09.040 Brothers Discovery is saying that they're hoping to get this 0:16:09.240 --> 0:16:11.240 decided one way or the other by the end of 0:16:11.240 --> 0:16:13.640 the year. So we at least now have a very 0:16:13.680 --> 0:16:16.080 concrete timeline for how they're going to deal. 0:16:15.920 --> 0:16:16.400 With these bids. 0:16:16.440 --> 0:16:19.440 They've been out there meeting with the bidders, you know, 0:16:19.520 --> 0:16:23.440 presenting their financials, going through the library and plans. 0:16:24.320 --> 0:16:26.600 So this has happened quick. 0:16:26.440 --> 0:16:31.000 Now seemingly a fifty eight billion dollar offer from Paramount's 0:16:31.000 --> 0:16:34.800 guidance is not enough. Bloomberg's Felix Jellette. We appreciate you 0:16:34.840 --> 0:16:43.080 breaking it down Chinese e commerce platforms. They saw strong 0:16:43.160 --> 0:16:46.920 sales during the country's month long shoppings event Singles Day 0:16:47.240 --> 0:16:50.080 now an AI integration emerged as a major growth driver 0:16:50.160 --> 0:16:52.080 of that. Let's peak with Jacob Cook, his co founder, 0:16:52.080 --> 0:16:55.720 a CEO of wpic So Marketing and Technologies, which helps 0:16:55.760 --> 0:17:00.240 global brands expand their reach in Asia, and boy have 0:17:00.320 --> 0:17:03.720 we seen the reach of Singles Day into weeks into months. 0:17:03.960 --> 0:17:05.480 But all the numbers actually good. 0:17:05.400 --> 0:17:08.240 When you take into well the idea that it is 0:17:08.280 --> 0:17:10.040 longer than on previous times. 0:17:10.640 --> 0:17:12.560 Yeah, we did a like for light comparison. 0:17:12.640 --> 0:17:15.360 We think it's about fourteen point eight percent up over 0:17:15.440 --> 0:17:17.639 last year, which is actually much better than expected. We 0:17:17.640 --> 0:17:20.640 think this is the strongest one since twenty twenty one, 0:17:20.880 --> 0:17:23.640 and that's they ran a week earlier and a couple 0:17:23.680 --> 0:17:26.360 of days later. But even taking that into account, we're 0:17:26.400 --> 0:17:28.840 pretty optimistic at the Chinese consumer right now. 0:17:29.840 --> 0:17:32.000 Okay, where is the Chinese consumer right now? 0:17:32.840 --> 0:17:34.840 Well, middle class growth was pretty good. 0:17:35.240 --> 0:17:37.480 You know, Ali Bob is now reporting numbers, especially with 0:17:37.520 --> 0:17:41.239 their eighty eight VIP program that's also really strong and 0:17:41.240 --> 0:17:44.879 that's focused on a more upscale consumer. They're reporting thirty 0:17:44.920 --> 0:17:48.200 percent up in that particular category, so. 0:17:48.240 --> 0:17:49.000 That's pretty good. 0:17:49.200 --> 0:17:51.760 Middle class consumers are what people have been worried about 0:17:51.760 --> 0:17:53.800 over the last couple of years. He has been pressure 0:17:53.800 --> 0:17:59.719 and employment, so that really didn't play any consequences here 0:17:59.720 --> 0:18:01.679 For this eleven eleven it was great. You know, we're 0:18:01.720 --> 0:18:04.480 seeing close to fifteen percent growth year over year, which 0:18:04.480 --> 0:18:06.199 is already the largest shopping festival. 0:18:06.240 --> 0:18:08.000 So these numbers are pretty optimistic. 0:18:09.560 --> 0:18:11.440 But we're in a position where we can look at 0:18:11.480 --> 0:18:14.560 all of the Chinese technology companies that participate in this 0:18:15.040 --> 0:18:19.960 and say this specific company one they are ahead. Ali 0:18:20.000 --> 0:18:22.479 Baba is the one I'm thinking about most because in 0:18:22.520 --> 0:18:25.160 early October the shares hit I think, the highest level 0:18:25.240 --> 0:18:28.200 since twenty twenty one. But there's no sort of tangible 0:18:28.240 --> 0:18:31.359 evidence that any one company, at least from what I 0:18:31.359 --> 0:18:34.119 can see on the Bloomberg terminal, did any better or 0:18:34.160 --> 0:18:38.400 AI made any more impact than any other in this period. 0:18:39.760 --> 0:18:40.960 Yeah, it's interesting. 0:18:41.000 --> 0:18:44.399 I think for sure the destination platforms as opposed to 0:18:44.400 --> 0:18:46.440 the social commerce platforms did better here. 0:18:46.520 --> 0:18:48.159 So let's JD that's Ali. 0:18:47.880 --> 0:18:51.200 Baba there definitely we think much stronger growth than the 0:18:51.280 --> 0:18:53.200 Doyan or red node platforms. 0:18:54.000 --> 0:18:55.680 But AAR really did. 0:18:55.720 --> 0:18:58.919 I mean, the business advisor that Ali Baba released is 0:18:59.280 --> 0:19:02.880 quite effective. You know, it made things a lot more efficient. 0:19:03.119 --> 0:19:06.199 Despite that growth of fourteen point eight percent that we 0:19:06.280 --> 0:19:09.000 think they came in at, you know, ad spend growth 0:19:09.040 --> 0:19:11.320 was much lower than that, which means that acquisition costs 0:19:11.320 --> 0:19:13.439 have come down. And Ali Baba is really making it 0:19:13.480 --> 0:19:16.240 more efficient to find your customers. And I think what's 0:19:16.280 --> 0:19:18.000 going to happen as a result of that is we're 0:19:18.000 --> 0:19:19.879 going to see a lot more ad shift maybe away 0:19:19.920 --> 0:19:23.360