Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live
Speaker 1: from coast to coast with Caroline Hyde in New York
Speaker 1: and Ev Love in San Francisco.
Speaker 2: This is Bloomberg Tech coming up.
Speaker 3: President Trump calls the Intel CEO highly conflicted and urges
Speaker 3: the resignation, causing shares to slump. Plus, Apple announces it's
Speaker 3: added one hundred billion dollar US investment as it dodges
Speaker 3: Chip Harris.
Speaker 2: We discussed the likelihood of.
Speaker 3: A US produced iPhone, and a number of earnings are
Speaker 3: out our discussions with the CEOs of Lyft, DraftKings, and
Speaker 3: due Lingo throughout the hour.
Speaker 2: But first we dive deep.
Speaker 3: Into our top story, which is Intel shares currently up
Speaker 3: by two and quarter percent. They were lower by more
Speaker 3: than five percent in early trading. All of this as
Speaker 3: we see President Trump call for a resignation of lit Boutanna,
Speaker 3: only just took over in March twenty twenty five. This
Speaker 3: following Tom Cotton, the Republican senator, deep diving in his
Speaker 3: relations lip Butan's to China. Let's get the context for you.
Speaker 3: Peter Elstrom joins us for more and just we see
Speaker 3: that there's a concern about his CEO role at Cadence
Speaker 3: Design and their relationships with China, but it was well
Speaker 3: known that he's been a long term investor in China himself.
Speaker 4: Peter, Yeah, this was certainly a big surprise. I don't
Speaker 4: think anybody saw this coming, certainly not in the tech industry.
Speaker 4: Trump comes out and he calls for the resignation of
Speaker 4: Lip Bhutan, who, as you say, just arrived in March
Speaker 4: in that CEO role. He'd clearly been vetted very much
Speaker 4: by the board before he got that position. Now what
Speaker 4: they're talking about, Tom So, Trump did not explain exactly
Speaker 4: what he's talking about with these conflicts, but as you say,
Speaker 4: it comes in the context of Tom Cotton, the Republican senator,
Speaker 4: asking questions about Tan's ties to China. In particular, there's
Speaker 4: Cadence Design System, the company that Tan ran for more
Speaker 4: than a decade. They have done business with China. In fact,
Speaker 4: they pled guilty to doing some business with a university
Speaker 4: that's affiliated with the People's Liberation Army there. In addition
Speaker 4: to that, Tan worked for a long time in venture capital,
Speaker 4: making investments in companies, including companies in China. He made
Speaker 4: some investments in Smike in particular, which is sort of
Speaker 4: the most advanced chip maker within China. So Cotton was
Speaker 4: asking questions about how those investments are doing it at
Speaker 4: this point, if he still has any conflicts of interest.
Speaker 4: Trump didn't go into those details in particular, but he
Speaker 4: did flag them. Now, it's important to say what Intel
Speaker 4: has said in the past. They've said that they value
Speaker 4: national security, and Tan is certainly aligned with US interests
Speaker 4: in the region. You've got to imagine that the board
Speaker 4: of Intel is going to come back pretty forcefully in
Speaker 4: this situation because they're the ones that hired Tan in
Speaker 4: the first place.
Speaker 3: And we're already seeing the statement from Intel in response
Speaker 3: to Republican Senator Cotton's query saying, Intel and mister Tan
Speaker 3: and deeply committed to the national security of the United
Speaker 3: States and the integrity of our role in the US
Speaker 3: defense ecosystem. Because this is where the question lies as
Speaker 3: someone who potentially and we get to hear whether he
Speaker 3: really has disclosed how much of his venture investments he
Speaker 3: still holds in certain Chinese startups and indeed he had
Speaker 3: prior board experience at Smith. What are the implications for
Speaker 3: the investment which Tom Cotton makes of eight billion dollars
Speaker 3: of US chip funding into Intel to manufacture locally for
Speaker 3: potentially the US government and indeed the Department of Defense.
Speaker 4: Yeah, there are a couple of very big questions here.
Speaker 4: I mean, first of all, Intel's board housted Pat Gelsinger,
Speaker 4: the previous CEO. Last year they brought in lit Bhutan
Speaker 4: as that replacement after a long search. They looked at
Speaker 4: a bunch of different candidates, and the best and the
Speaker 4: brightest in the chip industry are not dying to take
Speaker 4: on Intel. It's a very difficult turnaround project at this point.
Speaker 4: In addition to that, Intel is supposed to be a
Speaker 4: cornerstone of this Washington led effort to rebuild the semiconductor
Speaker 4: industry in the United States. Of course it's American. They
Speaker 4: want it to be part of this whole effort to
Speaker 4: bring chip manufacturing.
Speaker 5: Back to the United States.
Speaker 4: They've also given money to other companies, including Taiwan Semiconductor,
Speaker 4: Samsung Electronics. But Intel was supposed to be really the cornerstone.
Speaker 4: They were supposed to do some work with the military
Speaker 4: in particular, as you mentioned, they were in line to
Speaker 4: get about eight billion dollars, but it's unclear exactly where
Speaker 4: that money is going to go. At this point, and
Speaker 4: one of the issues for the board is going to
Speaker 4: be if they're going to stand behind Tan and support
Speaker 4: him as CEO, is that money coming from the federal
Speaker 4: government going to be in jeopardy.
Speaker 3: And the context also being that Libhutan was on the
Speaker 3: board of Intel for a very long time, so they
Speaker 3: were well aware of all of his prior history. For
Speaker 3: what's happened more recently, Peter is the articulation from Lipbutan
Speaker 3: himself that he might not go along with fabrication of
Speaker 3: chips here in the US much longer anyway, right.
Speaker 4: Right, This context is important. Also, his predecessor, Gelsinger had
Speaker 4: pushed very hard to rebuild Intel's manufacturing expertise. They're in
Speaker 4: the process right now trying to develop up new techniques
Speaker 4: for manufacturing. They appear to be making quite a bit
Speaker 4: of progress on that front now. Tannas said he doesn't
Speaker 4: believe if you build it, they will calm. He's referring
Speaker 4: to this whole foundry business where Gelsinger wanted to compete
Speaker 4: pretty directly with TSMC and making customized chips for the
Speaker 4: likes of Apple and Nvidia. In particular, Intel's not made
Speaker 4: a whole lot of progress on that front. So Tanna's
Speaker 4: not has said he's not necessarily going to stick with
Speaker 4: that strategy that of course kind of runs counter to
Speaker 4: the Washington effort to try to rebuild the US chip industry.
Speaker 4: If he's tentative with some of his investments, that maybe
Speaker 4: counter to their priorities at this point.
Speaker 3: Peter Els from Brilliant Research, we thank you very much.
Speaker 3: Let's stick with well the Trump focus on semiconductors right
Speaker 3: now from Morblue Megs. Tyler Kendall joins us from the
Speaker 3: White House because President Trump to that end, we're just
Speaker 3: hearing how Intel fits into the broader idea of bringing
Speaker 3: manufacturing back to the United States. A big hefty tariff
Speaker 3: being promised on semiconductors unless you I'm built in the US, Tila.
Speaker 6: Right exactly, Caroline, President Trump declaring his plans for a
Speaker 6: one hundred percent tariff on chips. Unless the understanding is
Speaker 6: a company makes a similar investment commitment to what we
Speaker 6: saw yesterday when Apple's Tim Cook was in the Oval Office,
Speaker 6: a pledge to at least move part of their manufacturing
Speaker 6: reshore supply chains in the US, then those companies would
Speaker 6: be exempt from this chip tariff.
Speaker 2: But there's a few different important.
Speaker 6: Distinctions that we have to make, including as you well know,
Speaker 6: that these big tech companies have been experiencing at least
Speaker 6: a temporary reprieve from tariff since April when the administration
Speaker 6: first launched that Section two thirty two investigation into the
Speaker 6: entire chip supply chain, which extended to those consumer electronics
Speaker 6: for example. So as we wait for that formal investigation
Speaker 6: to wrap up and a formal announcement on the teriffs,
Speaker 6: one of the big questions here is whether or not
Speaker 6: that reprieve is going to extend to some of those
Speaker 6: other items that have been under investigation, like what chips
Speaker 6: go into such as smartphones or cars. So the conversation
Speaker 6: is going to start to turn to whether or not
Speaker 6: there's going to be any sort of carve out here,
Speaker 6: such as Apple with its iPhone for example, because those
Speaker 6: are expected to face a separate levee and Caroline, we
Speaker 6: know that the industry has been lobbying at this White House.
Speaker 6: Of course, Tim Cook was here yesterday, but then just
Speaker 6: hours after that visit, we had Nvidia's Jensen Wong also
Speaker 6: meeting here with President Trump at the White House, and
Speaker 6: the White House says that cumulative, the total that they've
Speaker 6: gone an investment when it comes to these big tech
Speaker 6: companies now is over one trillion dollars in pledges.
Speaker 3: And a lot of that money coming from big Asian
Speaker 3: tech builders like TSMC in Arizona, for example. We've also
Speaker 3: understand from leaders in Korea that they think Samsung and
Speaker 3: maybe sk Heinex have some sort of carve out here. Tyler,
Speaker 3: We're really gettingdrip fed information right exactly.
Speaker 6: And at that point it looks like really most of
Speaker 6: the tech sector is covered here you had mentioned. So
Speaker 6: if we just show the companies that could be facing
Speaker 6: this exemption, Apple and Nvidia, TSMC, South Korea, Samsung and
Speaker 6: sk Heinex, and really this has been a big push
Speaker 6: from this administration from the beginning. We saw a lot
Speaker 6: of these tech CEOs attend President Trump's inauguration as just
Speaker 6: one key example here. So that's why it's really interesting
Speaker 6: to also see this dynamic that's starting to merge with
Speaker 6: the Intel CEO and how President Trump really does feel
Speaker 6: heavily involved when it comes to the private sector and
Speaker 6: trying to get to this ultimate goal of reshoring manufacturing. Though,
Speaker 6: of course, as you well know and I know you're
Speaker 6: about to discuss. This does fall short of the administration's
Speaker 6: initial push here to reshore manufacturing completely into the US,
Speaker 6: and we know that's going to be pretty inheasible when
Speaker 6: it comes to the financials, but also just the timeline,
Speaker 6: which makes that Intel dynamic even more interesting, since we
Speaker 6: do know that we need their chips to make this happen.
Speaker 3: Weaving it beautifully together, Tyler Kendall, we thank you from
Speaker 3: the White House. Let's talk some more than about the
Speaker 3: impact of TARIS on big tech after Donald Trump, of
Speaker 3: course promised to exempt companies like Apple, as Tinna mentioned
Speaker 3: that move production back to the US.
Speaker 7: We're doing these things now in the United States instead
Speaker 7: of other countries, far away countries. This is a significant
Speaker 7: step toward the ultimate goal of ensuring that iPhone sold
Speaker 7: in the United States of America also are made in
Speaker 7: America with the mass infusion of capitalists. Announcing today, Apple
Speaker 7: will also build a two hundred and fifty thousand square
Speaker 7: foot server manufacturing facility in Houston and avest billions of
Speaker 7: dollars to construct data centers across the country from North
Speaker 7: Carolina to Iowa to Oregon.
Speaker 3: Currently no Melanas Prince Well Analystic Creative Strategies joins us
Speaker 3: Hot on the heels of that moment of Tim Cook
Speaker 3: in the White House, one hundred billion dollars extra being
Speaker 3: committed that six hundred billion dollars in total. What did
Speaker 3: you make of the allocation towards glass, for example, particularly
Speaker 3: in Kentucky and United States.
Speaker 8: I think Tig Cook has been very strategic about giving
Speaker 8: the administration what they want, which is investment in the US,
Speaker 8: but doing so in a way that is feasible. So
Speaker 8: it's still not about bringing production of the iPhone back,
Speaker 8: but really leaning into some of the partners like Corning
Speaker 8: and manufacture. The mastery of this is not just about
Speaker 8: the iPhone and Apple watches that are sold in the
Speaker 8: States that will source glass from cornering in Kentucky, but internationally.
Speaker 8: So is given that extra part to the administration about saying, okay,
Speaker 8: we are manufacturing here and shipping outside the US the
Speaker 8: glass that goes in every iPhone and every Apple Watch.
Speaker 3: It's interesting we are seeing Tim Cook speaking there, but
Speaker 3: he was previously holding a box, a box that contained
Speaker 3: circular Corning glass plaque engraved for the President's name, mounted
Speaker 3: onto a twenty four carrot gold stand, which we understand
Speaker 3: is also just signed by an Apple designer who's previously
Speaker 3: a US marine Carolina.
Speaker 2: This was politicking at its best from Tim Cook.
Speaker 8: Absolutely, there was a lot of political theater during the
Speaker 8: press conference. It was about really making sure that Apple
Speaker 8: doesn't get into DII of a cyclone when he comes
Speaker 8: to tariffs, and really lifting what is possible. So for
Speaker 8: instance the mention of Houston and the server factory. Again,
Speaker 8: we are not talking about bringing iPhone or Mac for
Speaker 8: that matter, or anything else back to the US. We
Speaker 8: are trying to invest where it makes sense from a
Speaker 8: business perspective for Apple, while creating some jobs, but most
Speaker 8: importantly bringing money back to the US and letting the
Speaker 8: administration then talk about it.
Speaker 3: But we actually heard President Trump talk about it with
Speaker 3: the words coming out of his mouth that was the
Speaker 3: long term goal of having US so old iPhones made
Speaker 3: in the US. It's just the glass enough and maybe
Speaker 3: the odd wafer and semiconductor.
Speaker 2: Is enough for now.
Speaker 8: The long term is really critical here because it will
Speaker 8: take time. The supply chain, most of the supply chain
Speaker 8: is still not in the US of this skill sets
Speaker 8: that we need from from just a factory perspective and
Speaker 8: workers is not in the US, and the cost, of course,
Speaker 8: so is giving enough during the four year of the administration,
Speaker 8: and you know, to placate maybe the demands and continue
Speaker 8: to invest in America.
Speaker 3: Interesting that skill set, you say, And they're actually Apple
Speaker 3: investing in Detroit in particular on sort of a manufacturing
Speaker 3: academy for training people and companies in terms of manufacturing locally.
Speaker 2: But going to the intricacy.
Speaker 3: Is of supply chain here, Carolina, you're getting glass from
Speaker 3: the US in Kentucky and maybe some wafer in the future,
Speaker 3: and then you're shipping that back to China to then
Speaker 3: have it all put together and neatly built and then ship.
Speaker 2: Back to the US because feels very expensive.
Speaker 8: It's cheaper than not having it done here, and that's
Speaker 8: the problem. We don't have the facilities yet. And I
Speaker 8: think it's interesting, as you pointed out the Detroit manufacturing
Speaker 8: learning facility that Apple is setting up, because maybe the
Speaker 8: point is to create different sets of skills that are
Speaker 8: linked to automation, and that is where maybe with AI
Speaker 8: and automation, we will see manufacturing being brought back to
Speaker 8: the US. But yeah, shipping back and forth is not ideal.
Speaker 8: But the pieces that you're shipping back and forth, and
Speaker 8: where the rest of the iPhone is is still in Asia.
Speaker 3: Briefly, I lean into your supply chain expertise here because
Speaker 3: you don't just cover Apple, a plethora of companies. What
Speaker 3: do you make of this threat for one hundred percent
Speaker 3: tariff and semiconductors and who that ultimately implicates if they
Speaker 3: don't get a carve out.
Speaker 8: Well, obviously that is you know, we've seen the impact
Speaker 8: of the towers so far on earnings and we're still
Speaker 8: in the middle of earning season. But what is important
Speaker 8: that we don't have a clarification is what that building
Speaker 8: in the US means. How much investment is a company
Speaker 8: going to have to make in the US to not
Speaker 8: fall into this tariff promise of one hundred percent? And
Speaker 8: Apple seems to have made enough. Nvidia is also investing here,
Speaker 8: and I'm sure others like DS and C have done
Speaker 8: will continue to do so.
Speaker 2: Krolyn Iven Anazy Granula.
Speaker 3: We thank you creative Strategies.
Speaker 2: Shares of Lift.
Speaker 3: Let's check in on them because the company reported earnings
Speaker 3: after the bell yesterday, including record number of rides completed.
Speaker 3: We're currently up three and a half percent. Lift CEO
Speaker 3: David Richard joins us to talk us through the results
Speaker 3: that for some there was a bit of something for everyone.
Speaker 3: The revenue number behave perhaps a little bit shy of expectations.
Speaker 3: But the sheer number of people riding with you at
Speaker 3: a record what's driving that?
Speaker 9: David, Yeah, I mean I love that fact, the number
Speaker 9: of the sheer number of people riding with us, because
Speaker 9: it shows that we're doing something right right. So I've
Speaker 9: been saying for a long time customer obsession drives profitable growth.
Speaker 5: We're now profitable. We're growing, you know, as is our
Speaker 5: ninth consecutive quarter of double digit growth.
Speaker 9: And in terms of customer adoption, you know, we've never
Speaker 9: had more riders.
Speaker 5: And drivers on the platform. So you know what's driving it.
Speaker 9: It's innovations like Lift Silver, It's partnerships like our Door
Speaker 9: Dash partnership. We just announced a new partnership with the
Speaker 9: United A lot of the sort of ecosystem work we're
Speaker 9: doing is really helping us grow faster than ever.
Speaker 3: Let's talk about partnerships when it comes to autonomous because
Speaker 3: that's where the future, where the puck is moving.
Speaker 2: How are you ensuring that you're moving with.
Speaker 3: And taking on what seems to be future competition coming
Speaker 3: from I don't know, the likes of Weimo, but also
Speaker 3: even a Tesla.
Speaker 9: Yeah, you know what, I don't think of it as
Speaker 9: future competition. I mean, of course there'll be competitive skirmishes,
Speaker 9: but big picture, as self driving cars come onto our platform,
Speaker 9: it's going to expand the marketplace. And we can see
Speaker 9: that already even in the cities where self driving cars
Speaker 9: are operating in the US right now, we're seeing something
Speaker 9: like five x the growth of cities where they're not operating.
Speaker 5: So because what.
Speaker 9: They're safe, they're interesting, they're kind of you know, they're novel,
Speaker 9: they're reliable. In terms of partnerships, we have a couple
Speaker 9: of great partnerships. We have one with main Mobility, which
Speaker 9: launches officially this summer in Atlanta, so you can take
Speaker 9: a self driving car if you live in Atlanta starting
Speaker 9: in a little over.
Speaker 5: A month, we hope.
Speaker 9: And then big picture, we just signed a big agreement
Speaker 9: with Baidu, who is one of the world's largest, probably
Speaker 9: the world's largest self driving car company, to expand into Europe,
Speaker 9: into a couple countries in Europe. So a lot of
Speaker 9: action going on in the self driving world. Obviously still
Speaker 9: very early, but we see huge opportunity for us in
Speaker 9: the future.
Speaker 3: Yeah, Plan Germany UK twenty twenty six with regulatory approvals
Speaker 3: speak to that international growth that you've really brought to
Speaker 3: bear of late. How much is that a winning formula
Speaker 3: for revenue for profitability?
Speaker 9: Yeah, for both, I think, and actually for resilience too.
Speaker 9: You know, one of the things that I've seen over
Speaker 9: the last two and a half years since I've been
Speaker 9: in this job is being so focused on North America
Speaker 9: has been great because it's allowed us to really innovate
Speaker 9: and drive the industry forward. But now that we're in
Speaker 9: a very strong position, we can afford to and frankly,
Speaker 9: you know, sort of our customers want us to be
Speaker 9: a more global company. So we just acquired a company
Speaker 9: called free Now in Europe. It's a taxi focused aggregator.
Speaker 9: You know, the taxis in Europe, of course you know
Speaker 9: this well, are sort of a higher end product than
Speaker 9: people might think in the United States, and so it
Speaker 9: will allow us to have a footprint across Europe. Then,
Speaker 9: when we tie it back to your earlier question about
Speaker 9: self driving, as self driving comes to Europe and Europe
Speaker 9: is a little bit behind the United States. The relationship
Speaker 9: that we now have with regulators and of course with
Speaker 9: millions of customers is really going to help us form
Speaker 9: a platform that we can build on to bring self
Speaker 9: driving cars to the UK and Germany and hopefully beyond.
Speaker 3: Okay, So when you're leaning into some of these expansions
Speaker 3: more broadly, will there be more.
Speaker 2: M and A to play here? You've already done it
Speaker 2: in Europe.
Speaker 3: I knew you've got to integrate, but would you look
Speaker 3: further afield too?
Speaker 5: Maybe?
Speaker 9: You know, you never say never about this sort of thing,
Speaker 9: you know. I think we're in a very strong position
Speaker 9: now to do this kind of work. But as you say,
Speaker 9: the first order business for us is that integration work.
Speaker 9: And we just closed the free Now deal last week.
Speaker 9: I was actually in Barcelona the week before with a
Speaker 9: team there. They're so excited to get started and already now,
Speaker 9: if you open the free now app in Europe, you'll
Speaker 9: get a prompt that says, you know, we're a partnership
Speaker 9: with Lyft and vice versa. If you open the lift
Speaker 9: app in Europe, maybe more importantly, you'll be directed to
Speaker 9: go over to free Now.
Speaker 5: So we're just beginning that integration.
Speaker 9: I think there's a lot more work to do there
Speaker 9: before we really think about additional acquisitions.
Speaker 3: And David, you've got such sort of a bird's eye
Speaker 3: perspective on.
Speaker 2: The consumer early at this moment.
Speaker 3: How resilient is that consumer, particularly here in the US
Speaker 3: people trying to read the team.
Speaker 9: I understand, you know, every single day people sort of
Speaker 9: look deep in the teacup and try to figure out
Speaker 9: what's going on. All I can say is, if you're
Speaker 9: looking for weakness, look elsewhere.
Speaker 5: We're not seeing it.
Speaker 9: We're seeing record rides, you know, double digit growth, even airports,
Speaker 9: which people often look at as sort of a leading indicator.
Speaker 5: Now it's true.
Speaker 9: I think TSA volumes are moderating a little bit, but
Speaker 9: we're growing faster than TSA volumes are and we've grown
Speaker 9: airports now quarter.
Speaker 5: Over quarter and year over year. So it's such an
Speaker 5: interesting thing.
Speaker 9: I know people are sort of desperate to find, you know,
Speaker 9: sort of the cloud and the silver lining, but at
Speaker 9: least from our perspective, we're not seeing it.
Speaker 3: If CEO David Risher, great to have you back on
Speaker 3: the show, stay well, thank you.
Speaker 2: It's time now for talking tech and first up.
Speaker 3: Softbag Swan or quarterly profit, posting a net income of
Speaker 3: two point nine billion dollars in the fiscal first quarter,
Speaker 3: more than double on.
Speaker 2: Analysts had predicted.
Speaker 3: Now, the surprise gains our reflection of CEO Masaoshi's sons
Speaker 3: aggressive vets on artificial intelligence, plus China's export growth expectedly
Speaker 3: accelerated in July. Is global demand helped offset a slump
Speaker 3: in US shipments. Now, total exports rows seve point two
Speaker 3: percent from a year earlier, just three hundred and twenty
Speaker 3: two billion dollars. This is China saw strong shipments to
Speaker 3: the EU, Southeast Asia.
Speaker 2: And Australia In Hong Kong, and Amazon's Zooks gets an exemption.
Speaker 3: From the Trump administration allowing its driverless vehicles to operate without.
Speaker 2: A traditional driving control like steering wheels.
Speaker 3: Now the decision is a boost for Zooks, which plans
Speaker 3: to produce ten thousand purpose built robotaxes a year.
Speaker 2: It's California facility are coming up. If you were benning,
Speaker 2: we'd be covering more earnings news. Yeah'd be right. We've
Speaker 2: got so many.
Speaker 3: CEOs coming up drafting CEO Jason Robbins is one of them.
Speaker 2: Joins us next.
Speaker 3: Meanwhile, let's just check in on the world of semiconductors.
Speaker 3: That one hundred percent tariff being threatened if you don't
Speaker 3: build an America. But who's building in America? Samsung, sk Heinex,
Speaker 3: Korean leaders saying that their cell warts in the world
Speaker 3: of technology are getting an exemption from its one hundred
Speaker 3: percent tariff threat coming from the White House. The question
Speaker 3: is who else get those exemptions? Tsmc apple more on that. Next,
Speaker 3: this is Bloomberg Tech. Welcome back to Bloomberg Tech. Let's
Speaker 3: take a look at these markets because actually the NASZAC
Speaker 3: outperforms other indices today and we're helped in part by
Speaker 3: chip makers. Look at the big rebound we're getting inn
Speaker 3: AMD after yesterday's sell off post its earnings, so we're
Speaker 3: now up more than six percent, basically shaking.
Speaker 2: Off yesterday's sell off.
Speaker 3: That's as we really focus in more on the geopolitical
Speaker 3: picture here, same for in video up more than a
Speaker 3: percentage point.
Speaker 2: What carve outs will we get for.
Speaker 3: Semiconductors that are made and shipped into the United States?
Speaker 3: Now President Trump threatening one hundred percent tariffs on chips
Speaker 3: made abroad imported into the US and less you're investing
Speaker 3: big in the United States, and what are these companies
Speaker 3: doing investing in the United States. We dig into that
Speaker 3: a little bit more later on, but move on to
Speaker 3: some of the earnings picture that we get mixed reactions
Speaker 3: that we're getting for the likes of Airbnb of by
Speaker 3: now more than seven percent, as we don't see a
Speaker 3: acceleration in growth that so Brian Chesky wants to do.
Speaker 3: And Door Dash though up more than five percent as
Speaker 3: it manages to deliver once again in terms of the
Speaker 3: food into your home and its expansion with M and A.
Speaker 3: Let's get into those numbers more broadly, Natalie Lungs, he
Speaker 3: joins us after what was a very busy post bell
Speaker 3: for you, I want to go for the optimism first
Speaker 3: Door Dash.
Speaker 2: What's it doing right?
Speaker 10: It's been increasing a lot of the use of frequency
Speaker 10: and membership from its paid program Dash Pass, and people
Speaker 10: are ordering more restaurant owners as well as the New
Speaker 10: York categories like grocery and retail.
Speaker 3: And what do they speak to in terms of the
Speaker 3: expansion plans. Because this is a company that's been inquisitive,
Speaker 3: we're not seeing it show up and the numbers yet
Speaker 3: because they've got to absorb the business, particularly over in
Speaker 3: the UK, for delivery, But what is the potential here.
Speaker 10: Yeah, so that deal hasn't closed yet today, so expecting
Speaker 10: it to close at the fourth quarter. So we'll see
Speaker 10: later this year in terms of what it adds to
Speaker 10: their outlook. But what we know is that they have
Speaker 10: completed acquisitions off restaurant tech company seven Rooms, as well
Speaker 10: as advertising these Symbiosis and that's already adding to their
Speaker 10: sort of their enterprise offerings for restaurants.
Speaker 2: Really interesting.
Speaker 3: We just had David Rishid from lyft On and his
Speaker 3: exact response to what you're seeing in terms of consumer
Speaker 3: weakness was you're not finding it here.
Speaker 2: It seems that we're not seeing it indoor dash.
Speaker 3: They say they got high levels of consumer engagement, but
Speaker 3: flip over to Airbnb.
Speaker 2: They've been trying to win us over, not just with.
Speaker 3: What's happening in terms of travel and houses, but access
Speaker 3: to experiences.
Speaker 2: Why aren't they able to reaccelerate growth at.
Speaker 10: The moment, So there are a couple of factors working
Speaker 10: against them. First, they've warned that the growth might moderate
Speaker 10: later into the year because what happened last year was
Speaker 10: that people actually made those trips that they delayed, and
Speaker 10: so results were very strong last year, and so the
Speaker 10: year comparison would be not as strong this year. And
Speaker 10: if you look at the second quarter results, the North
Speaker 10: American travel was a drag on the results. It was
Speaker 10: like a low single digit growth, and like without the
Speaker 10: North America region they would have grown double digits. So
Speaker 10: we'll have to see how the US trail those fear hah.
Speaker 3: So maybe that's a bit of a shift in terms
Speaker 3: of what consumers are feeling in the US, at least
Speaker 3: around travel and revenge spending. But what about the new
Speaker 3: offerings and new products. What's Brian Chesk going to do
Speaker 3: to try and drive that growth to get American spen it.
Speaker 10: So they are actually considering a loyalty program now. They're
Speaker 10: saying with all these new categories, they're able to offer
Speaker 10: something more compelling than just, you know, the larger category,
Speaker 10: so that it would be something we'll be very excited
Speaker 10: to keep track of.
Speaker 2: Natalie Lang, she will keep track of it. We thank
Speaker 2: you very much.
Speaker 3: Indeed, let's stick with earnings and let's dive in to
Speaker 3: one that is showing stronger user growth.
Speaker 2: Down one point six percent. I'm talking about DraftKings.
Speaker 3: We're looking at Jason Robbins, the CEO now who managed
Speaker 3: to deliver what was record second quarter performance, your revenue
Speaker 3: up thirty seven percent year on year, and you're talking
Speaker 3: about delivering revenue closer to the high end of twenty
Speaker 3: twenty five for the full year. So what's the investor
Speaker 3: digestion going on?
Speaker 2: Do you think?
Speaker 1: Well?
Speaker 11: I think right now we have a ton of momentum
Speaker 11: in the business. We also had some you know, good
Speaker 11: luck on the sport outcome side in Q two, so
Speaker 11: that was nice, and we're geared up for what is
Speaker 11: the most important time of year coming up with NFL
Speaker 11: and then obviously college sports, NBA World Series, NHL just
Speaker 11: a big, big time of year. It's when we make
Speaker 11: our most revenue and acquire most customers and make our
Speaker 11: most adjusted ebit US so really excited for that, and
Speaker 11: I think we have some great plans in place and
Speaker 11: you know, really expecting strong growth in the back part
Speaker 11: of the year.
Speaker 3: I mean, your shares are up twenty percent year to date,
Speaker 3: so it might be why we come off a little
Speaker 3: bit from our highs overall.
Speaker 2: But what about the core.
Speaker 3: Value drivers here, Like we're talking about you know, the
Speaker 3: sports book friendly outcomes. You talk about how the calendar
Speaker 3: is looking.
Speaker 2: Good for you.
Speaker 3: But where else do you focus on investing because you'll
Speaker 3: CFO in particular and talking about some growth initiatives, and
Speaker 3: everyone's wondering about these prediction markets that might or might
Speaker 3: not come to bear.
Speaker 11: Well, even if you just for the outcomes, we were
Speaker 11: still up twenty five percent revenue wise year over years,
Speaker 11: so really healthy growth. And I think we're seeing, you know,
Speaker 11: just very strong demand in our underlying customer cohorts. And
Speaker 11: I also think the advancements we've made on the product
Speaker 11: side have been huge. We've really built out our parlay offering.
Speaker 11: Now we have the best in class and leading offering
Speaker 11: when it comes to in game betting. That's become the
Speaker 11: real growth driver of the industry right now by far
Speaker 11: more growth happening and live betting than anywhere else. So
Speaker 11: I think really we positioned ourselves well from a product
Speaker 11: and customer experience perspective. Our marketing has been very effective.
Speaker 11: I also think on the internal side, we've gained a
Speaker 11: ton of efficiency through use of AI, which means we're
Speaker 11: getting more done for the customer and also saving money.
Speaker 3: Okay, like, what how you managing to interject generative AI
Speaker 3: across the board?
Speaker 11: I mean, the simple thing that we've been able to
Speaker 11: do is get everyone in the company to realize that
Speaker 11: they can drive value and it doesn't have to be
Speaker 11: the engineering team doing everything. So much of you to
Speaker 11: right now through AI can be used by non engineers
Speaker 11: and everyone throughout the company knows that there's tons of
Speaker 11: manual workflows that can be automated through AI, and we've
Speaker 11: been on a tear doing that. We've also been working
Speaker 11: on select projects that are customer facing too, things like
Speaker 11: optimizing our trading engine because human can't possibly take in
Speaker 11: all of the data and all the things happening at
Speaker 11: the same time when a live game is going on,
Speaker 11: So having AI agents support that and help make lower
Speaker 11: level decisions I think is also a huge unlock that
Speaker 11: we're pursuing. So I think the best is yet to
Speaker 11: come as far as AI, and we've got a ton
Speaker 11: of organizational momentum around it.
Speaker 3: And when you talk about the adoption by your own
Speaker 3: employees thinking about how they can drive efficiency is efficiency
Speaker 3: what's necessary at the moment when you do have a
Speaker 3: few well known headwinds coming up in terns of just costs,
Speaker 3: I mean, the tax implications that you're getting in Illinois,
Speaker 3: or what's happening over in New Jersey for example.
Speaker 2: I'm also thinking.
Speaker 3: About well, Missouri, you're like expanding, but that takes a
Speaker 3: cost upfront.
Speaker 11: Now, You're absolutely right think that being able to self
Speaker 11: fund some of these things through efficiency gains with AI
Speaker 11: has been a.
Speaker 5: Big driver of our focus.
Speaker 11: Also, I think there's other parts of the cost structure
Speaker 11: that we've found that we have value that can be
Speaker 11: achieved too. So really, you know, it's always a balance
Speaker 11: for us. We're obviously very much in growth mode now
Speaker 11: we had thirty seven percent year over year revenue growth,
Speaker 11: but we also are constantly looking at how we can
Speaker 11: be more efficient. We view the two is very linked. Oftentimes,
Speaker 11: when you do things that are more efficient, it frees
Speaker 11: up better time to be spent on, you know, better
Speaker 11: things for the customer as well.
Speaker 3: So I go back to the expansion potentially into prediction markets.
Speaker 3: I mean, I know it's about federal regulation in many ways, Jason,
Speaker 3: But what gets you there?
Speaker 2: What gets you tipping your toe into it?
Speaker 11: Oh, I don't know that we are going to We're
Speaker 11: still evaluating our options. Obviously, it's brand new, and you
Speaker 11: know we're watching it unfold right before our eyes and
Speaker 11: we're learning a lot as we get educated on the space.
Speaker 11: So right now that's been our focus, and you know,
Speaker 11: we'll see what happens from that.
Speaker 3: You have but one cell rating morning Star. What would
Speaker 3: you say to analyst over a morning style that convinces
Speaker 3: them to say, look at the moment, our price point
Speaker 3: is where its should be.
Speaker 2: Actually, I'm looking up the wrong one.
Speaker 3: Let me go to my proper DraftKings analyst recommendations. Sorry,
Speaker 3: live interaction with a terminal. Right now, I have and
Speaker 3: this recommendations zero cell ratings.
Speaker 2: But you have five buys, five holds.
Speaker 3: What gets your five holds to a by rating, Jason.
Speaker 11: I think just continuing to prove ourselves. You know, performing
Speaker 11: over time is what gives people confidence in a company.
Speaker 11: And we've been public five years now, so we have
Speaker 11: a bit of a track record, but we're still a
Speaker 11: relatively new public company and I've only been profitable for
Speaker 11: the last year or so. So I think really showing
Speaker 11: that we can now grow our bottom line while continuing
Speaker 11: to post impressive top line numbers, that's our focus and
Speaker 11: I think that'll get more people on board.
Speaker 3: Thirty two buys, five holds, zero cells, Jason Robbins DraftKings CEO.
Speaker 2: We thank you very much. Indeed, as check in on
Speaker 2: shares of Duo Lingo.
Speaker 3: Surging today, company posting second quarter earnings that beat expectations
Speaker 3: for daily active users growing forty percent year of a
Speaker 3: year now. The company is also expanding outside of its
Speaker 3: language learning business, acquiring beat Star and country Star or
Speaker 3: the makers of that service, to bolster it's dual lingo music.
Speaker 3: Here to discuss, Luis van Ar Duelingo CEO, you're making
Speaker 3: M and A is showing growth? Just tell us the
Speaker 3: vision because many would say, okay, due Lingo's about language learning,
Speaker 3: but it's actually about a broader education offering right now.
Speaker 12: Yeah, I mean, ultimately we want to teach multiple subjects.
Speaker 12: I mean, at the moment you can already learn certainly
Speaker 12: languages and the lingo, and that's what we're most well
Speaker 12: known for, but you can also learn math and music
Speaker 12: and of late chess, and ultimately the idea is I mean,
Speaker 12: you know, we're we're around one hundred and thirty million
Speaker 12: monthly active users. The idea is to have a billion
Speaker 12: people really learning useful things are on their phone as
Speaker 12: opposed to doom scrolling. That's that's really what we're trying
Speaker 12: to do.
Speaker 3: Fascinating a billion that used music literacy with the nextpeak
Speaker 3: to acquisition.
Speaker 2: As you say, growth in Chess seems to be of
Speaker 2: the chart.
Speaker 3: What's interesting, though, is we reference your daily active users
Speaker 3: that did rise forty percent, but actually that was the
Speaker 3: weakest rate of expansion since twenty twenty two.
Speaker 2: Why is that slowing? Will it reaccelerate? Louise?
Speaker 5: Yeah?
Speaker 12: I mean, look, we had forty percent year of young growth,
Speaker 12: but that's lapping a quarter from last year that had
Speaker 12: sixty percent year of ear growth, which in turn is
Speaker 12: lapping another quarter from the year before that that had
Speaker 12: sixty percent year ear growth. So our growth has been
Speaker 12: tremendous over the last several years, and you know we
Speaker 12: expected to continue being really good.
Speaker 2: Really good.
Speaker 3: What gets you there other than product innovation, what you
Speaker 3: thought would get you there in many ways has been
Speaker 3: generative AI, whether it's intweaving it within the product itself, Louise,
Speaker 3: But also you then went wholeheartedly into AI within your
Speaker 3: own HR Ultimately in that backfired. And I know you've
Speaker 3: spoken a lot about what happened on April the twenty eighth,
Speaker 3: but just tell us where you stand in terms of getting.
Speaker 2: Employees on board with the use of genitive AI.
Speaker 12: Yeah, I mean AI is really really important for us
Speaker 12: from the time we launched to a Lingo, which was
Speaker 12: thirteen years ago. The idea is to have an app
Speaker 12: teach you something, and so ultimately you need some form
Speaker 12: of artificial intelligence to teach to be able to teach you.
Speaker 12: So we've always leaned into it internally. You know, I
Speaker 12: sent an email internally this was not controversial. We've always been,
Speaker 12: you know, adopters of the latest technology. Externally, I think
Speaker 12: I failed to give context. You know, the realities for us,
Speaker 12: AI is about reaching more people and being able to
Speaker 12: teach more. We've been able through the use of AI.
Speaker 12: We've been able to create way more content than we
Speaker 12: had before, and also we are able to provide things
Speaker 12: like conversational practice that was not possible before AI. So
Speaker 12: you know, we really think that in order to teach
Speaker 12: more people and teach them better, we can use AI,
Speaker 12: and that's the main goal for it.
Speaker 3: I mean, we're just looking at some visuals of what
Speaker 3: is Lily, your sort of purple head chatbot. She's meant
Speaker 3: to be a little bit sarcastic and SASE team. Basically
Speaker 3: she previously I think helped replace yous partly on your
Speaker 3: earning school and you said, eventually you can just.
Speaker 2: Retire and she'll do more and more of a job.
Speaker 2: But that was tongue in cheap.
Speaker 3: But ultimately, how much more you're going to be able
Speaker 3: to outsource the general to AI within your workplace, within you?
Speaker 12: And the goal here is not to outsource to AI.
Speaker 12: The goal is to use AI to be a lot
Speaker 12: more efficient. I mean, we you know, we continue hiring employees,
Speaker 12: so that's that's really not the goal. It's we're just
Speaker 12: trying to teach better. In the case of teaching people,
Speaker 12: you know, with something like Lily. Up until we were
Speaker 12: able to do video call with Lily, we couldn't really
Speaker 12: teach conversation with due LINGO. The only way we had
Speaker 12: to practice, or users had to practice conversation was if
Speaker 12: they could talk to another human. But it turns out
Speaker 12: that in learning a language, most users will tell you
Speaker 12: they would like to practice with another human, but they
Speaker 12: actually don't. You know, when you when you show a
Speaker 12: person the ability to talk to another human in a
Speaker 12: language that they're not very comfortable with, they just don't
Speaker 12: want to do it. It's a small fraction of people
Speaker 12: that are extreme extroverts that are willing to do it.
Speaker 12: But if you're talking to a computer, you feel like
Speaker 12: it's not judging you. So for when when you are
Speaker 12: just not very comfortable in the language, it's much better
Speaker 12: to talk to a computer at first.
Speaker 3: That's fascinating because there is a bit of pushback about
Speaker 3: the idea that maybe generative AI will end up being
Speaker 3: or we look at in terms of ads, or we
Speaker 3: discuss too in our social media apps. But for you
Speaker 3: with language where we have some insecurity, that's the case.
Speaker 3: What about the chess and the way in which you
Speaker 3: push more broadly, will that be an integration A person
Speaker 3: on personal always personal on computer.
Speaker 12: Just is different because there's you know, when you're learning
Speaker 12: a foreign language and you're just a beginner, you're very
Speaker 12: nervous about talking. But chess ultimately is about playing the game.
Speaker 12: So yes, with chess, we do expect to have games
Speaker 12: for player versus players, so between two people. At the moment,
Speaker 12: we don't have them. At the moment, we're just teaching
Speaker 12: you the basics of chess and we're seeing great pickup
Speaker 12: for that, but we are going to have games between people.
Speaker 2: When did you get to a billion? Luis? When's the aim?
Speaker 12: Oh, I don't know, it'll take us several years, but
Speaker 12: I really do think. I mean, we're growing very fast
Speaker 12: in you know, every single country in the world, and
Speaker 12: you know, the goal is that when people are learning something,
Speaker 12: they're doing so through the phone and through dual lingo.
Speaker 12: So we really want to be, you know, the main
Speaker 12: place where people are learning languages, but also a main
Speaker 12: place where people get better at math music. We just
Speaker 12: did this acquisition of Next Speed, which I'm very excited about,
Speaker 12: or chess, and then later we'll probably do other subjects.
Speaker 12: I mean, we're not working on any other subjects at
Speaker 12: the moment, but I would be interested in also having
Speaker 12: you know, science and and stuff like that.
Speaker 3: Come back as you add as potentially there's more. N
Speaker 3: M and a Luis Fanan of Joe Lingo, thank you
Speaker 3: very much for joining us in the yearnings. Meanwhile, far
Speaker 3: Fly Aerospace we'll start training today in the New York's
Speaker 3: after raising close to nine hundred million dollars in an
Speaker 3: upside IPO, and the company CEO Jason Kim says that
Speaker 3: the funds raised for the IPO, we'll go towards ramping
Speaker 3: up the cadence of its Alpha rockets and fast tracking
Speaker 3: other product lines now.
Speaker 2: He spoke with Bluemberg earlier this morning.
Speaker 13: We got orbital flight heritage on our Alpha rocket on
Speaker 13: our second launch, and we landed on the Moon just
Speaker 13: in March of this year. It's something that's really hard.
Speaker 13: Space is hard, but landing on the Moon is even harder,
Speaker 13: and this company did it successfully. And then if you
Speaker 13: look at what we're doing, we have a production line
Speaker 13: of Alpha rockets, and we're building our Eclipse reusable sixteen
Speaker 13: ton rocket as well as lunar landers annually. And we're
Speaker 13: building Electra spacecraft to serve you know, the Golden Dome
Speaker 13: customer SpaceX four as well as commercial ticket And so
Speaker 13: if you look at what the CEO of NASDAC said,
Speaker 13: Data Friedman, you know, the markets are strong and they're growing,
Speaker 13: and we've gotten really great reception and conviction from investor
Speaker 13: investors over time, and so this is the right moment.
Speaker 13: You're going to raise almost a billion dollars looks like
Speaker 13: eight hundred and sixty eight million dollars.
Speaker 2: Jason, what are you going to do with the money, Well.
Speaker 13: You know it's kind of like what I already said,
Speaker 13: we're going to rate up. We're going to continue to
Speaker 13: increase capacity because there's so much more demand in the
Speaker 13: space markets right now because of national security, because of
Speaker 13: space exploration to the Moon. You know, the Moon is
Speaker 13: really important. It's the ultimate high ground. It's also important
Speaker 13: if we're going to put humans on the Moon again
Speaker 13: starting in a couple of years. We want to know
Speaker 13: everything about the Moon. We want to put more lunar
Speaker 13: landers up there, more infrastructure, more power systems up there too.
Speaker 13: So we want to make the Moon more frictionalists for everybody.
Speaker 13: For America.
Speaker 3: First fire Fly CEO Jason Kim there from the Nasdaq.
Speaker 3: Shares indicated to open at seventy dollars a piece. I've
Speaker 3: here priced at forty five dollars. Let's get back to
Speaker 3: a key story in tech today, President Trump's plans for
Speaker 3: one hundred percent chip tariffs, but there are carveouts springing.
Speaker 3: Bloomberg Intelligence senior analyst man Deep Sing for more shares
Speaker 3: actually going higher for many chip makers and indeed companies
Speaker 3: that make things with chips in them. Because Apple gets
Speaker 3: a carve out because it's building in the US. TSMC,
Speaker 3: we understand Samsung, how are you managing to dissect which
Speaker 3: company is going to be implicated here?
Speaker 14: Well, I mean, look, when it comes to Apple, they
Speaker 14: have benefited from, you know, outsourcing to TSMC. So to
Speaker 14: my mind, you know there it makes it very hard
Speaker 14: for Apple to do something on their own. Like think
Speaker 14: of how Intel has struggled over the years because it's
Speaker 14: an id versus an Apple and Nvidia being a fabulis
Speaker 14: chip design company and then letting TSMC manufacture. In fact,
Speaker 14: TSMC manufacturers for everyone. So if Apple was to invest
Speaker 14: one hundred and fifty billion dollars in process, node technology
Speaker 14: and packaging, would it really make them better in any
Speaker 14: way without TSMC? And so I'm just thinking, where is
Speaker 14: that Capex going to go? Glass is clearly one of
Speaker 14: the components of Apple's bill of materials, maybe less than
Speaker 14: ten percent. The other is camera. They're not going to
Speaker 14: make cameras.
Speaker 5: So what is it in.
Speaker 14: Apple's bill of materials where Apple is going to set
Speaker 14: up a factory and say, okay, this is what we
Speaker 14: are going to invest in. To my mind, data centers,
Speaker 14: hyperscale data centers is the one thing which Apple needs
Speaker 14: as well, even though they vertically integrate. They have a
Speaker 14: services business, they need data center capacity. That's where their
Speaker 14: chip design actually could help. So that's the natural thing
Speaker 14: to do. But there is still so much kind of
Speaker 14: me hype around what they could end up doing and
Speaker 14: not enough details for me to say, Okay, this is
Speaker 14: what they would end up doing in the US.
Speaker 3: Yeah, because at six hundred billion dollars and thus far
Speaker 3: we understand, of course the glass, we understand servers, We
Speaker 3: understand maybe data centerces, you say, but higher end manufacturing
Speaker 3: and indeed manufacturing academies help train people.
Speaker 2: But I go broader for a moment.
Speaker 3: Then when you are hit by a headline one hundred
Speaker 3: percent tariffs, who do you worry about? Well?
Speaker 14: I mean, look, there are companies like the Japanese companies.
Speaker 14: So if it's a Sony and you are sending your
Speaker 14: modules to the US for all types of use cases,
Speaker 14: I think they could get hit. And they're not investing
Speaker 14: big time in the US. So they haven't announced anything.
Speaker 14: Samsung and other guys Micron, they have done that, but
Speaker 14: that's where where will the real investment show up. So
Speaker 14: it's one thing to announce something, it's another thing to
Speaker 14: have a tangible idea where you know, you can create
Speaker 14: a supply chain and do things like Texas Instruments has
Speaker 14: done a great job diversifying their fabs over the years.
Speaker 14: Can't say the same about others.
Speaker 3: Right, We'll seeing where the money lands might keep seeing
Speaker 3: of Bloomberg Intelligence trying to discern the latest headlines for us.
Speaker 3: But that does it for this edition of Bloomberg Tech.
Speaker 3: Don't forget to check out our podcast find Out on
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Speaker 2: This is Bloomberg Tech.