1
00:00:02,560 --> 00:00:12,960
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live

2
00:00:13,000 --> 00:00:16,799
Speaker 1: from coast to coast with Caroline Hyde in New York

3
00:00:17,079 --> 00:00:19,080
Speaker 1: and ever though in San Francisco.

4
00:00:21,160 --> 00:00:22,799
Speaker 2: This is Bloomberg Tech coming up.

5
00:00:22,840 --> 00:00:25,720
Speaker 3: The US takes nearly ten percent stake in Intel, and

6
00:00:25,800 --> 00:00:28,960
Speaker 3: President Trump's celebrating that he got it for zero. What

7
00:00:29,080 --> 00:00:31,640
Speaker 3: this means for future deals? Plus, the President of South

8
00:00:31,720 --> 00:00:34,160
Speaker 3: Korea heads to the White House with tech leaders from

9
00:00:34,200 --> 00:00:38,080
Speaker 3: Samsung and s k Heinez details on that meeting and

10
00:00:38,159 --> 00:00:39,400
Speaker 3: gaming gets patriotic.

11
00:00:39,440 --> 00:00:41,000
Speaker 2: Why the Esports World Cup.

12
00:00:40,840 --> 00:00:44,920
Speaker 3: Foundation has announced a new bi annual tournament for nations.

13
00:00:45,280 --> 00:00:47,240
Speaker 3: But first, let's check in on these markets. Let's just

14
00:00:47,320 --> 00:00:49,360
Speaker 3: check in on Intel, because that is the stock that's

15
00:00:49,360 --> 00:00:50,720
Speaker 3: on the move. They want to keep an eye out.

16
00:00:50,800 --> 00:00:53,840
Speaker 3: General Benchmark's flat, but Intel up more than two percent.

17
00:00:53,880 --> 00:00:55,680
Speaker 2: We were in the red just for a moment.

18
00:00:56,000 --> 00:00:58,120
Speaker 3: But now we get the real devil in the details

19
00:00:58,120 --> 00:01:01,000
Speaker 3: of what that almost ten percent stake looks like from

20
00:01:01,040 --> 00:01:03,800
Speaker 3: the government and the president seeming to feel that he's

21
00:01:03,800 --> 00:01:06,480
Speaker 3: got it for zero. Let's get into the details. Because

22
00:01:06,520 --> 00:01:08,680
Speaker 3: I'm peace to say Miuch Shepherd is with us, of course,

23
00:01:08,720 --> 00:01:11,600
Speaker 3: who really helps lead our coverage of the intersection of

24
00:01:11,680 --> 00:01:14,720
Speaker 3: technology in Washington and Mike. It is interesting that, of

25
00:01:14,720 --> 00:01:17,880
Speaker 3: course the money comes from that that was already promised

26
00:01:17,920 --> 00:01:20,320
Speaker 3: to Intel. Remind us of the detail of the deal.

27
00:01:21,680 --> 00:01:24,680
Speaker 4: Well, so in the broad strokes, it's a nearly ten

28
00:01:24,720 --> 00:01:28,280
Speaker 4: percent stake totally more than four hundred million shares going

29
00:01:28,319 --> 00:01:30,960
Speaker 4: to the US government in this CARA is an exchange

30
00:01:31,000 --> 00:01:33,640
Speaker 4: for what has not yet been spent out of the

31
00:01:33,720 --> 00:01:36,520
Speaker 4: grant money that was to go to Intel through the

32
00:01:36,640 --> 00:01:39,360
Speaker 4: Chips and Science Act. Remember this is the law that

33
00:01:39,520 --> 00:01:43,600
Speaker 4: was passed under President Joe Biden designed to spur domestic

34
00:01:43,680 --> 00:01:48,280
Speaker 4: chip manufacturing, helping makers like Intel, but others including TSMC

35
00:01:48,680 --> 00:01:53,200
Speaker 4: and Samsung as well get fabs and plants up and

36
00:01:53,320 --> 00:01:56,720
Speaker 4: running here in the US. Now, Donald Trump is talking

37
00:01:56,760 --> 00:02:01,120
Speaker 4: about this as really the US government getting something for nothing,

38
00:02:01,200 --> 00:02:03,880
Speaker 4: although if you think about it, that's almost eight point

39
00:02:04,000 --> 00:02:08,760
Speaker 4: nine billion in unspent Chips Act money, and so there

40
00:02:08,919 --> 00:02:11,640
Speaker 4: is a little bit of something in there. Many are

41
00:02:11,680 --> 00:02:16,560
Speaker 4: looking upon this CARA is really an unprecedented intervention in

42
00:02:16,760 --> 00:02:19,760
Speaker 4: a company, especially when you think about how sacro san

43
00:02:20,160 --> 00:02:23,119
Speaker 4: these principles of the free market have been not only

44
00:02:23,160 --> 00:02:26,600
Speaker 4: for Republicans but for Democrats too. And how it has

45
00:02:26,680 --> 00:02:30,760
Speaker 4: been looked on with really some skepticism Simpson. Last week

46
00:02:30,800 --> 00:02:35,559
Speaker 4: we interviewed former Vice President Mike Pence and former Obama

47
00:02:36,320 --> 00:02:41,640
Speaker 4: former Biden rather economic director Lael Brainerd on successive days

48
00:02:41,639 --> 00:02:45,160
Speaker 4: and each express their own misgivings and skepticism about the

49
00:02:45,200 --> 00:02:48,840
Speaker 4: president of the US government intervening in a company without

50
00:02:48,880 --> 00:02:50,600
Speaker 4: a crisis actually unfolding.

51
00:02:51,400 --> 00:02:55,160
Speaker 3: Many though, would frame it from the administration's side that

52
00:02:55,280 --> 00:02:58,560
Speaker 3: this is a focus on national security, that this is

53
00:02:58,560 --> 00:03:01,200
Speaker 3: a crisis for Intel to be able to be and

54
00:03:01,280 --> 00:03:04,560
Speaker 3: turn it around as a national winner of manufacturing.

55
00:03:04,919 --> 00:03:06,600
Speaker 2: But will government intervention do that?

56
00:03:06,760 --> 00:03:10,520
Speaker 4: Mike, Well, that's a great question, Caro, And really that

57
00:03:10,639 --> 00:03:12,400
Speaker 4: is how they framed it. They didn't quite use the

58
00:03:12,480 --> 00:03:16,000
Speaker 4: crisis word, but they did stress the urgency on the

59
00:03:16,120 --> 00:03:20,519
Speaker 4: national security side of having a US flag company leading

60
00:03:20,560 --> 00:03:23,760
Speaker 4: the way when it comes to chip production. And curiously,

61
00:03:23,840 --> 00:03:26,480
Speaker 4: in the announcement, one thing was missing, and that was

62
00:03:26,720 --> 00:03:29,320
Speaker 4: mentioned of the new plant in Ohio that you and

63
00:03:29,360 --> 00:03:31,480
Speaker 4: I have talked about a lot, and this is the

64
00:03:31,520 --> 00:03:34,600
Speaker 4: one that has been planned by Intel as part of

65
00:03:34,600 --> 00:03:37,320
Speaker 4: its revival, the one that was started under the former

66
00:03:37,400 --> 00:03:41,240
Speaker 4: chief executive officer, Pac Gelsinger and It was really destined

67
00:03:41,280 --> 00:03:43,880
Speaker 4: to be a flagship of that effort, but it has

68
00:03:43,920 --> 00:03:47,120
Speaker 4: since been delayed and this is a massive undertaking. It

69
00:03:47,120 --> 00:03:49,760
Speaker 4: has been pushed back into the next decade, and they

70
00:03:49,840 --> 00:03:54,400
Speaker 4: really need this underway to put Intel really back into

71
00:03:54,440 --> 00:03:57,080
Speaker 4: the running when it comes to making those kinds of

72
00:03:57,120 --> 00:03:58,000
Speaker 4: advanced chips.

73
00:03:58,160 --> 00:03:59,440
Speaker 5: Their biggest challenge.

74
00:03:59,200 --> 00:04:02,080
Speaker 4: Right now, Caro is finding the customers to be able

75
00:04:02,120 --> 00:04:06,080
Speaker 4: to sustain such a massive investment in that Ohio plan,

76
00:04:06,320 --> 00:04:08,560
Speaker 4: and right now they don't quite have enough. And the

77
00:04:08,680 --> 00:04:12,440
Speaker 4: interesting wrinkle in this is that Donald Trump, by taking

78
00:04:12,960 --> 00:04:15,360
Speaker 4: leading the US government into taking the stake in a way,

79
00:04:15,480 --> 00:04:19,520
Speaker 4: positions himself as CEO of everything. And this is a

80
00:04:19,600 --> 00:04:23,640
Speaker 4: role he has liked to play. He has relished pushing

81
00:04:23,680 --> 00:04:26,680
Speaker 4: companies into expanding their investments in the US.

82
00:04:26,720 --> 00:04:28,039
Speaker 6: We've seen it on the tech front, and.

83
00:04:28,000 --> 00:04:30,840
Speaker 4: We start just a few weeks ago with Apple and

84
00:04:31,279 --> 00:04:35,039
Speaker 4: expanding their investments in the US. So will he take

85
00:04:35,120 --> 00:04:37,360
Speaker 4: some sort of a more active role in trying to

86
00:04:37,440 --> 00:04:41,599
Speaker 4: drum up customers to help Intel. And it's CEO Lip

87
00:04:41,640 --> 00:04:44,359
Speaker 4: Bhutan who Trump has met in recent weeks at the

88
00:04:44,360 --> 00:04:47,240
Speaker 4: White House and really was the one who Trump was

89
00:04:47,279 --> 00:04:50,279
Speaker 4: able to persuade to have this exchange of a stake

90
00:04:50,440 --> 00:04:52,640
Speaker 4: in exchange for chips act money.

91
00:04:52,480 --> 00:04:55,640
Speaker 3: Mike Shephard bringing us through what is an unprecedented piece

92
00:04:55,680 --> 00:04:56,040
Speaker 3: of news.

93
00:04:56,040 --> 00:04:57,320
Speaker 2: We thank you now.

94
00:04:57,520 --> 00:05:01,680
Speaker 3: In video potentially could be a future buyer of Intel's

95
00:05:01,720 --> 00:05:04,359
Speaker 3: made chips. But all eyes are on Video more importantly

96
00:05:04,400 --> 00:05:07,359
Speaker 3: for its earnings coming out Wednesday, when the investors seeing

97
00:05:07,440 --> 00:05:09,599
Speaker 3: it is a key test of boarder AI impact on

98
00:05:09,680 --> 00:05:13,120
Speaker 3: demand for more briber Gequity's reporter common Ranicky is here

99
00:05:13,120 --> 00:05:15,880
Speaker 3: with us. It is the bell weather in many ways,

100
00:05:16,200 --> 00:05:19,000
Speaker 3: but analysts in particular have got excited about what the

101
00:05:19,040 --> 00:05:21,120
Speaker 3: revenue could look like coming for this fiscal quarter.

102
00:05:21,600 --> 00:05:22,600
Speaker 6: Yeah, that's really true.

103
00:05:22,640 --> 00:05:24,880
Speaker 7: I mean it's something that we see actually kind of

104
00:05:24,960 --> 00:05:28,280
Speaker 7: cyclically around earnings that analysts boost sort of their price

105
00:05:28,360 --> 00:05:31,240
Speaker 7: targets for companies ahead of the results. We sort of

106
00:05:31,279 --> 00:05:33,120
Speaker 7: rally up to them and everything kind of resets, And

107
00:05:33,200 --> 00:05:36,000
Speaker 7: in the last week we had at least nine analysts

108
00:05:36,040 --> 00:05:39,200
Speaker 7: increase their price targets for Nvidia. So they see upside

109
00:05:39,200 --> 00:05:41,520
Speaker 7: at least over the next twelve months. They're excited going

110
00:05:41,560 --> 00:05:44,200
Speaker 7: into this report, and you're right, I mean, revenue growth

111
00:05:44,360 --> 00:05:46,880
Speaker 7: is the thing that everybody is always watching within Vidia.

112
00:05:46,920 --> 00:05:48,480
Speaker 6: They put up incredible numbers.

113
00:05:48,480 --> 00:05:53,160
Speaker 7: I think this quarter, analysts are expecting revenue to jump

114
00:05:53,240 --> 00:05:56,760
Speaker 7: forty eight percent from last year forty six billion dollars.

115
00:05:56,800 --> 00:05:59,080
Speaker 7: That is just, you know, it's not something that we

116
00:05:59,120 --> 00:06:00,600
Speaker 7: see every day.

117
00:06:00,480 --> 00:06:02,760
Speaker 3: Certainly for a four trillion dollar company exact, and you're

118
00:06:02,760 --> 00:06:05,120
Speaker 3: expecting more than fifty percent growth in earnings per share.

119
00:06:05,720 --> 00:06:09,480
Speaker 3: Many though, would question China as the area of concern. Look,

120
00:06:09,480 --> 00:06:12,840
Speaker 3: we're just talking about President Trump having unprecedented impact on businesses,

121
00:06:12,880 --> 00:06:16,640
Speaker 3: and that deal to sell eight twenties is unprecedented, and

122
00:06:16,680 --> 00:06:17,520
Speaker 3: we're warned about.

123
00:06:17,279 --> 00:06:20,080
Speaker 7: Demand totally, and I think that's something that analysts are

124
00:06:20,120 --> 00:06:22,160
Speaker 7: and investors are really going to be listening to on

125
00:06:22,240 --> 00:06:27,000
Speaker 7: the call what Jensen says about China demand, what total

126
00:06:27,040 --> 00:06:29,560
Speaker 7: market they're forecasting that they're.

127
00:06:29,360 --> 00:06:30,640
Speaker 6: Going to be able to see.

128
00:06:30,760 --> 00:06:34,400
Speaker 7: I think people hadn't they hadn't factored in China revenue

129
00:06:34,480 --> 00:06:36,800
Speaker 7: maybe in the next few quarters. Right, we know that

130
00:06:37,160 --> 00:06:38,560
Speaker 7: things are sort of up in the air there, But

131
00:06:38,880 --> 00:06:42,000
Speaker 7: going through fiscal twenty twenty seven twenty twenty eight for Nvidia,

132
00:06:42,240 --> 00:06:44,679
Speaker 7: that's something that everybody hoped was going to come back online.

133
00:06:44,720 --> 00:06:45,760
Speaker 6: And so even though it's not a.

134
00:06:45,760 --> 00:06:47,720
Speaker 7: Huge part of their overall revenue. I think it's about

135
00:06:47,760 --> 00:06:50,840
Speaker 7: fifteen percent, maybe a little bit less. It's going to matter.

136
00:06:51,040 --> 00:06:53,560
Speaker 7: You know that it's a big market, and I mean

137
00:06:53,560 --> 00:06:56,480
Speaker 7: if it goes to zero, you know, that's a considerable.

138
00:06:56,000 --> 00:06:58,280
Speaker 3: Hit, and it's going to matter as we question AI

139
00:06:58,400 --> 00:07:00,000
Speaker 3: valuations more broadly across the space.

140
00:07:00,320 --> 00:07:02,240
Speaker 2: It's great to have come and ran unicate. We thank you.

141
00:07:02,279 --> 00:07:03,600
Speaker 2: It's a very well read piece.

142
00:07:03,600 --> 00:07:06,760
Speaker 3: Today, let's get broader, investor take bringing Erin Brown, managing

143
00:07:06,760 --> 00:07:09,400
Speaker 3: director and portfolio manager at Pimco, and just bring us

144
00:07:09,440 --> 00:07:12,760
Speaker 3: the context of last week prior of course to Jackson

145
00:07:12,800 --> 00:07:15,600
Speaker 3: Hole and euphoria, or on Friday, we were worried about

146
00:07:15,720 --> 00:07:17,920
Speaker 3: overall frothy valuations in the area of AI.

147
00:07:18,040 --> 00:07:19,560
Speaker 2: Is in video going to be a key test on that?

148
00:07:20,680 --> 00:07:21,280
Speaker 2: I think it is.

149
00:07:21,320 --> 00:07:23,400
Speaker 8: I mean, I think that really is keeping the market

150
00:07:23,480 --> 00:07:25,960
Speaker 8: right now with respect to the AI trade on pause,

151
00:07:26,120 --> 00:07:29,080
Speaker 8: waiting for more news from the video to see what

152
00:07:29,160 --> 00:07:32,480
Speaker 8: earning bears and really to see if they've been able

153
00:07:32,520 --> 00:07:37,200
Speaker 8: to continue to grow into what are really lofty growth numbers.

154
00:07:37,280 --> 00:07:40,920
Speaker 8: You certainly seen AI come under pressure as the market's

155
00:07:40,960 --> 00:07:44,640
Speaker 8: been rallying to new highs but broadening out outside of AI,

156
00:07:44,840 --> 00:07:47,200
Speaker 8: and so Navidia, I think is front and center for this,

157
00:07:47,840 --> 00:07:49,920
Speaker 8: at least for the market this week with respect to

158
00:07:49,920 --> 00:07:50,880
Speaker 8: the AI trade.

159
00:07:51,600 --> 00:07:55,640
Speaker 3: Have you questioned anything fundamentally though that changed in the

160
00:07:55,720 --> 00:07:59,120
Speaker 3: last week when we suddenly were awash with concerns about

161
00:07:59,480 --> 00:08:02,880
Speaker 3: MIT writings or whether Sam Altman's soula bubble or not.

162
00:08:04,200 --> 00:08:04,400
Speaker 9: Yeah.

163
00:08:04,400 --> 00:08:08,640
Speaker 8: I think the MIT research note really lay bare the

164
00:08:08,680 --> 00:08:13,960
Speaker 8: fact that right now implementation and adoption is really critical

165
00:08:14,000 --> 00:08:18,080
Speaker 8: in terms of enterprise integration, being able to appropriately adopt

166
00:08:18,120 --> 00:08:24,400
Speaker 8: these models into the enterprise environment. And so with the

167
00:08:24,520 --> 00:08:27,239
Speaker 8: I think the MIT paper was a little bit misunderstood

168
00:08:27,320 --> 00:08:30,680
Speaker 8: in that yes, they're saying that only five percent are productive,

169
00:08:30,680 --> 00:08:34,920
Speaker 8: but where they see the real hindrance is not with

170
00:08:35,000 --> 00:08:39,000
Speaker 8: the models themselves, but rather with enterprises being able to

171
00:08:39,200 --> 00:08:45,240
Speaker 8: implement effectively those models into their software environments. And so

172
00:08:45,480 --> 00:08:47,800
Speaker 8: what I think is really key for the next leg

173
00:08:47,920 --> 00:08:51,040
Speaker 8: for AI adoption and growth is going to be the

174
00:08:51,080 --> 00:08:55,040
Speaker 8: software companies and the implementers that are able to take

175
00:08:55,080 --> 00:09:00,640
Speaker 8: these effective CHAT, GBT or other models and enter and

176
00:09:00,760 --> 00:09:05,439
Speaker 8: integrate them into the business environment. And so software companies

177
00:09:05,480 --> 00:09:07,880
Speaker 8: that can do that effectively are really going to be

178
00:09:07,920 --> 00:09:09,720
Speaker 8: the winners I think in the next leg of this

179
00:09:09,800 --> 00:09:11,120
Speaker 8: AI trade.

180
00:09:10,960 --> 00:09:13,520
Speaker 3: We got worried about into it or workday earnings. At

181
00:09:13,520 --> 00:09:15,280
Speaker 3: the end of last week, we've been worried about some

182
00:09:15,320 --> 00:09:17,599
Speaker 3: of the European players. SAP has been under pressure and

183
00:09:17,679 --> 00:09:19,560
Speaker 3: others as we worried about software.

184
00:09:19,240 --> 00:09:20,400
Speaker 2: Sort being eaten by AI.

185
00:09:20,960 --> 00:09:23,960
Speaker 3: But then on the flip side, a Palenteer, ultimately a

186
00:09:24,000 --> 00:09:27,160
Speaker 3: software company, has been the best performing company of the year.

187
00:09:27,400 --> 00:09:29,520
Speaker 2: Even with some of the recent selloff.

188
00:09:29,920 --> 00:09:32,719
Speaker 3: Do you generally think that software is getting beaten up

189
00:09:32,760 --> 00:09:34,680
Speaker 3: too much or do you think companies are able to

190
00:09:34,679 --> 00:09:35,760
Speaker 3: embrace and pivot with AI.

191
00:09:36,880 --> 00:09:39,160
Speaker 8: I think right now we're really seeing the winners and

192
00:09:39,200 --> 00:09:43,520
Speaker 8: the losers, and the bifurcation of the winners and losers

193
00:09:43,559 --> 00:09:48,240
Speaker 8: in the software environment. Companies that are like Palenteer, that

194
00:09:48,280 --> 00:09:52,319
Speaker 8: have been really effectively able to deploy AI, use it

195
00:09:52,400 --> 00:09:56,040
Speaker 8: and then deliver it effectively to their customers are the

196
00:09:56,080 --> 00:09:58,360
Speaker 8: winners right now in this environment, and I think are

197
00:09:58,400 --> 00:10:01,000
Speaker 8: going to persist to be the win I think the

198
00:10:01,040 --> 00:10:04,040
Speaker 8: companies that are being left behind and the laggards right

199
00:10:04,080 --> 00:10:07,400
Speaker 8: now are the companies where Palenteer is sort of eating

200
00:10:07,400 --> 00:10:11,760
Speaker 8: their lunch and taking you know, business from them, and

201
00:10:11,840 --> 00:10:13,960
Speaker 8: so you know there's going to be winners and losers

202
00:10:14,000 --> 00:10:18,440
Speaker 8: in any environment when you see these disruptions occur. But

203
00:10:18,600 --> 00:10:22,079
Speaker 8: right now we're really seeing sort of the fight of it.

204
00:10:22,400 --> 00:10:25,959
Speaker 8: But I think broadly speaking, as a as an industry group,

205
00:10:26,040 --> 00:10:31,040
Speaker 8: software should be the ones that are implementing AI into

206
00:10:31,480 --> 00:10:36,240
Speaker 8: enterprise environments and being able to grow into what I

207
00:10:36,240 --> 00:10:38,760
Speaker 8: think is a greater demand environment going forward.

208
00:10:39,000 --> 00:10:41,079
Speaker 6: We're moved on from just the picks and.

209
00:10:41,040 --> 00:10:44,400
Speaker 8: Shovels of AI and now really looking to the deployment

210
00:10:44,440 --> 00:10:48,400
Speaker 8: stage and the monetization stage, and that's where software should

211
00:10:48,440 --> 00:10:49,080
Speaker 8: really shine.

212
00:10:49,200 --> 00:10:51,120
Speaker 3: And video is the picks and shovels. It's the key

213
00:10:51,160 --> 00:10:54,000
Speaker 3: tests this week in terms of earnings. What are you

214
00:10:54,080 --> 00:10:57,360
Speaker 3: hearing in terms of well, the depreciation of the assets

215
00:10:57,360 --> 00:10:59,400
Speaker 3: that ultimately in video is selling to all of these

216
00:10:59,480 --> 00:11:02,440
Speaker 3: hyper scale it's whether demand goes, but how long are.

217
00:11:02,320 --> 00:11:04,000
Speaker 2: They sticking around? Have you managed to sort of model

218
00:11:04,040 --> 00:11:04,840
Speaker 2: that out?

219
00:11:05,800 --> 00:11:09,920
Speaker 8: No, I mean not explicitly in terms of modeling it out,

220
00:11:09,960 --> 00:11:12,560
Speaker 8: but I think right now we're still in very early

221
00:11:12,600 --> 00:11:15,120
Speaker 8: stages of this, and so I think there still is

222
00:11:15,280 --> 00:11:18,640
Speaker 8: quite a long runway for the video chips. But you

223
00:11:18,720 --> 00:11:21,760
Speaker 8: are seeing that, you know, with we're seeing you know,

224
00:11:21,840 --> 00:11:24,600
Speaker 8: good scale adoption. But we're also seeing a lot of

225
00:11:24,600 --> 00:11:27,400
Speaker 8: innovation and that should really just keep demand, you know,

226
00:11:27,520 --> 00:11:30,880
Speaker 8: pretty robust for the picks and shovels as we continue

227
00:11:30,920 --> 00:11:35,720
Speaker 8: to innovate, you know those, you know, the the entry

228
00:11:35,760 --> 00:11:37,720
Speaker 8: trips into the AI space.

229
00:11:38,679 --> 00:11:42,120
Speaker 3: Amon Brown, really great context, digging deep in tech. We

230
00:11:42,160 --> 00:11:44,680
Speaker 3: so appreciate it for any manager over at PIMCO.

231
00:11:44,840 --> 00:11:45,200
Speaker 2: Thank you.

232
00:11:45,840 --> 00:11:48,080
Speaker 3: Meanwhile, we've had some breaking news and it all surrounds

233
00:11:48,080 --> 00:11:50,560
Speaker 3: big players in AI and it's in fact Enal Muskus

234
00:11:50,640 --> 00:11:55,480
Speaker 3: suing Apple and open Ai over an alleged arrangement on

235
00:11:55,559 --> 00:11:58,400
Speaker 3: its iPhone. Of course, open Ai has been in some

236
00:11:58,440 --> 00:12:00,800
Speaker 3: ways integrated within Apple offerings.

237
00:12:01,040 --> 00:12:02,439
Speaker 2: Elon Musk taking issue with that.

238
00:12:02,480 --> 00:12:06,040
Speaker 3: He took his fight to X last week, concerned about

239
00:12:06,080 --> 00:12:09,480
Speaker 3: the rankings on Apple App Store of certain generator of

240
00:12:09,520 --> 00:12:12,880
Speaker 3: AI products and feeling that X doesn't get enough love there.

241
00:12:13,280 --> 00:12:14,920
Speaker 3: We'll dig deep on that story. We're still out four

242
00:12:14,960 --> 00:12:17,600
Speaker 3: tenser percent on Apple. Coming up, though, we're going to

243
00:12:17,600 --> 00:12:18,880
Speaker 3: be talking more trade, joined.

244
00:12:18,640 --> 00:12:21,200
Speaker 2: By Gano Globals Eliza Tobin and what.

245
00:12:21,120 --> 00:12:23,360
Speaker 3: To expect from a meeting between Donald Trump and President

246
00:12:23,360 --> 00:12:25,560
Speaker 3: of South Korea and it's tech giants.

247
00:12:26,000 --> 00:12:27,400
Speaker 2: This is Bloomberg Tech.

248
00:12:37,640 --> 00:12:40,760
Speaker 3: South Korean President nij Mung is said to read with

249
00:12:40,920 --> 00:12:43,640
Speaker 3: President Trump at the White House today. In focus will

250
00:12:43,679 --> 00:12:46,280
Speaker 3: be South Korea's three hundred and fifty billion dollar pledge

251
00:12:46,360 --> 00:12:48,640
Speaker 3: for projects in the United States, announced a month ago,

252
00:12:48,960 --> 00:12:52,959
Speaker 3: but pretty few details on what actually is known. Meanwhile,

253
00:12:53,000 --> 00:12:56,480
Speaker 3: several Korean firms already have existing US investment plans. Samsung

254
00:12:56,559 --> 00:12:59,120
Speaker 3: planning for a multi billion dollar semiconductive plant in Texas,

255
00:12:59,200 --> 00:13:01,240
Speaker 3: or hi nd I when it's twenty one billion dollar

256
00:13:01,240 --> 00:13:04,120
Speaker 3: pledge to expand future industries and ev charging production, or

257
00:13:04,160 --> 00:13:07,560
Speaker 3: even TSMC when this one hundred billion dollar investment in

258
00:13:07,640 --> 00:13:11,000
Speaker 3: US chip manufacturing operations present LYE will be joined by

259
00:13:11,000 --> 00:13:13,040
Speaker 3: the leaders of some of those companies in today's meeting.

260
00:13:13,320 --> 00:13:15,960
Speaker 3: That's bringing in e Lisotobin, imagined, director of Ghano Global,

261
00:13:16,000 --> 00:13:19,160
Speaker 3: who can help break down ultimately what these sorts of

262
00:13:19,160 --> 00:13:22,320
Speaker 3: negotiations look like and what perhaps if you're an equity

263
00:13:22,360 --> 00:13:26,080
Speaker 3: holder in a Samsung or in a TSMC, what future

264
00:13:26,120 --> 00:13:26,920
Speaker 3: deals could look like.

265
00:13:29,360 --> 00:13:30,959
Speaker 6: Caroline is great to be on with you.

266
00:13:32,160 --> 00:13:33,960
Speaker 3: Yeah, Li said, to talk us through as to what

267
00:13:34,000 --> 00:13:39,120
Speaker 3: we anticipate. Will there be semiconductor tariffs coming this direction

268
00:13:39,200 --> 00:13:41,200
Speaker 3: for certain of these companies, Will they get a carve

269
00:13:41,240 --> 00:13:44,040
Speaker 3: out because they're investing so much. Will we hear anything

270
00:13:44,040 --> 00:13:46,920
Speaker 3: about equity stakes being taken by leaders like the President

271
00:13:46,960 --> 00:13:49,040
Speaker 3: of the United States and the US government in sentences

272
00:13:49,080 --> 00:13:50,160
Speaker 3: semi conductor companies.

273
00:13:51,800 --> 00:13:54,280
Speaker 10: Yeah, Caroline, you've really put your finger on it. This

274
00:13:54,320 --> 00:13:56,840
Speaker 10: is what everyone is wondering. This is what we're all

275
00:13:56,880 --> 00:13:59,680
Speaker 10: waiting to see. What is going to be this shape

276
00:14:00,080 --> 00:14:04,599
Speaker 10: the semiconductor terriffs. These Section two thirty two tariff investigations

277
00:14:04,600 --> 00:14:07,600
Speaker 10: that Commerce has been doing for months, and they keep

278
00:14:07,720 --> 00:14:11,079
Speaker 10: kicking the can down the road. What's really complicating things

279
00:14:11,480 --> 00:14:14,240
Speaker 10: is that these are now being kind of merged and

280
00:14:14,400 --> 00:14:17,920
Speaker 10: mixed up with the ongoing trade negotiations that the United

281
00:14:17,960 --> 00:14:21,440
Speaker 10: States is having with South Korea, Japan, the EU and

282
00:14:21,480 --> 00:14:25,040
Speaker 10: all these other partners. And so these countries are racing

283
00:14:25,120 --> 00:14:28,360
Speaker 10: to get exemptions or some kind of guarantee.

284
00:14:28,040 --> 00:14:30,720
Speaker 6: Of a lower rate of tariffs.

285
00:14:30,800 --> 00:14:34,120
Speaker 10: But nothing really is certain until you see that deal,

286
00:14:34,520 --> 00:14:37,840
Speaker 10: that handshake in the Oval Office between Donald Trump and

287
00:14:37,920 --> 00:14:39,680
Speaker 10: his South Korean counterpart.

288
00:14:40,680 --> 00:14:42,760
Speaker 6: So really, looking forward.

289
00:14:42,520 --> 00:14:45,600
Speaker 10: What I'm waiting to see with all the dust settling

290
00:14:46,000 --> 00:14:49,200
Speaker 10: with semiconductor tariffs is how is it all going to

291
00:14:49,320 --> 00:14:52,160
Speaker 10: net out? Are we going to see a distinction between

292
00:14:52,560 --> 00:14:56,360
Speaker 10: China on the one side, and US trusted allies and

293
00:14:56,400 --> 00:15:00,640
Speaker 10: partners on the other hand, which are trusted appliers and

294
00:15:00,960 --> 00:15:04,640
Speaker 10: key parts of the semiconductor supply chain players like Samsung

295
00:15:04,680 --> 00:15:05,720
Speaker 10: and s k Heinex.

296
00:15:06,520 --> 00:15:06,880
Speaker 2: I'm just.

297
00:15:08,400 --> 00:15:10,840
Speaker 3: I like the idea that you're calling them trusted partners

298
00:15:10,840 --> 00:15:14,040
Speaker 3: and allies. And then we get the latest post from

299
00:15:14,120 --> 00:15:19,440
Speaker 3: President Trump sent to seemingly the president of South Korea

300
00:15:19,480 --> 00:15:20,200
Speaker 3: ahead of the meeting.

301
00:15:20,480 --> 00:15:22,680
Speaker 2: What is going on in South Korea? Question mark?

302
00:15:22,760 --> 00:15:25,320
Speaker 3: Seems like a purge or a revolution. We can't have

303
00:15:25,440 --> 00:15:29,720
Speaker 3: that and do business there. How, leaders of countries meant

304
00:15:29,720 --> 00:15:32,800
Speaker 3: to navigate what they thought as allyship when they're about

305
00:15:32,840 --> 00:15:35,440
Speaker 3: to go into a meeting and receive sort of slightly

306
00:15:35,840 --> 00:15:37,400
Speaker 3: confusing statements such as this.

307
00:15:38,960 --> 00:15:41,880
Speaker 10: Yeah, this is not really a great sign for the

308
00:15:41,960 --> 00:15:46,120
Speaker 10: upcoming talks that we're about to see. For a long time,

309
00:15:46,160 --> 00:15:49,360
Speaker 10: you know, even dating back to his first term, President

310
00:15:49,400 --> 00:15:52,600
Speaker 10: Trump was putting pressure on allies like the Koreans and

311
00:15:52,640 --> 00:15:55,800
Speaker 10: the Japanese in particular on at least two fronts, so

312
00:15:55,840 --> 00:15:59,120
Speaker 10: both trade and defense spending. He would always want to

313
00:15:59,160 --> 00:16:02,400
Speaker 10: know how much are these allies paying for their own defense?

314
00:16:02,880 --> 00:16:05,560
Speaker 6: As well? As what is the trade balance.

315
00:16:05,920 --> 00:16:08,720
Speaker 10: So I think this is an unfortunate signal that Korea

316
00:16:08,800 --> 00:16:12,200
Speaker 10: is going to be under pressure on both fronts. And again,

317
00:16:12,320 --> 00:16:15,120
Speaker 10: I think when we see the dust settle of both

318
00:16:15,280 --> 00:16:20,040
Speaker 10: the administration's trade negotiations as well as the semiconductor tariffs,

319
00:16:20,240 --> 00:16:23,520
Speaker 10: are we going to see a distinction between China, which

320
00:16:23,520 --> 00:16:26,080
Speaker 10: I think there's a bipart is in consensus that they're

321
00:16:26,120 --> 00:16:30,800
Speaker 10: a threat and an adversary versus these other countries that

322
00:16:30,840 --> 00:16:33,920
Speaker 10: are part of the semiconductor ecosystem that we depend on

323
00:16:34,800 --> 00:16:37,240
Speaker 10: from Europe to Asia. So is there going to be

324
00:16:37,240 --> 00:16:39,480
Speaker 10: a distinction or is there going to be a generally

325
00:16:39,680 --> 00:16:42,600
Speaker 10: lower teror freight on the allies and partners than there

326
00:16:42,680 --> 00:16:45,560
Speaker 10: is for China. I don't think anyone knows for sure,

327
00:16:45,960 --> 00:16:48,720
Speaker 10: and we won't know until the Commerce Department comes out

328
00:16:48,880 --> 00:16:50,520
Speaker 10: with the results of the investigation.

329
00:16:50,760 --> 00:16:52,400
Speaker 3: And as I put it into the context of what

330
00:16:52,520 --> 00:16:55,880
Speaker 3: did just happen officially on Friday, we've known and thought

331
00:16:55,920 --> 00:16:58,320
Speaker 3: it was coming for a while. The ten percent equity

332
00:16:58,360 --> 00:17:03,000
Speaker 3: stake can Intel by basically taking money already promise them

333
00:17:03,040 --> 00:17:06,600
Speaker 3: by the Chips and Science Ackedlaza. This ultimately is meant

334
00:17:06,640 --> 00:17:09,440
Speaker 3: to make the US less dependent on a TSMC and

335
00:17:09,600 --> 00:17:11,760
Speaker 3: on a Samsung, but still in the interim we want

336
00:17:11,800 --> 00:17:13,160
Speaker 3: them to build manufacturing here.

337
00:17:15,040 --> 00:17:19,000
Speaker 10: Yeah, the Intel deal is really interesting, So I like

338
00:17:19,080 --> 00:17:22,280
Speaker 10: to kind of zoom out and think about why does

339
00:17:22,320 --> 00:17:26,480
Speaker 10: the US government care about the fate of Intel either Anyway,

340
00:17:27,480 --> 00:17:30,960
Speaker 10: you know, this isn't just a normal business deal. We

341
00:17:31,080 --> 00:17:33,640
Speaker 10: have to remember that the government is not a business

342
00:17:33,680 --> 00:17:37,040
Speaker 10: and so we should be evaluating what's going on here

343
00:17:37,320 --> 00:17:39,640
Speaker 10: not just as a business deal, but it's really more

344
00:17:39,760 --> 00:17:43,200
Speaker 10: like an insurance policy. What the US government has been doing,

345
00:17:43,280 --> 00:17:47,400
Speaker 10: even since the Biden administration to try to rescue Intel.

346
00:17:47,920 --> 00:17:51,560
Speaker 10: So your audience will be well aware of the United

347
00:17:51,600 --> 00:17:56,119
Speaker 10: States is almost entirely dependent on Taiwan on TSMC for

348
00:17:56,320 --> 00:18:00,320
Speaker 10: the supply of advanced semiconductors, and that's a real problem.

349
00:18:00,359 --> 00:18:01,520
Speaker 6: If we ever lost.

350
00:18:01,320 --> 00:18:05,919
Speaker 10: Access to the chips, it would be economic catastrophe. So

351
00:18:06,840 --> 00:18:09,880
Speaker 10: the US government sort of stepping into intervene. I think

352
00:18:09,920 --> 00:18:12,840
Speaker 10: it is rational to see this as dealing with an

353
00:18:12,840 --> 00:18:18,199
Speaker 10: economic emergency, so extraordinary intervention by the government is in

354
00:18:18,240 --> 00:18:22,679
Speaker 10: fact required. The question I'm thinking of is, you know,

355
00:18:22,840 --> 00:18:26,240
Speaker 10: is this the right kind of government intervention? And what

356
00:18:26,480 --> 00:18:30,280
Speaker 10: you know in the history of industrial strategy. You know,

357
00:18:30,320 --> 00:18:33,760
Speaker 10: an equity deal might not be the right play. What

358
00:18:34,480 --> 00:18:37,400
Speaker 10: these firms that are kind of in strategic sectors that

359
00:18:37,640 --> 00:18:41,399
Speaker 10: we can't allow to fail often need is a long term,

360
00:18:41,520 --> 00:18:45,080
Speaker 10: reliable source of demand, and that's where the US government

361
00:18:45,200 --> 00:18:50,159
Speaker 10: can can sometimes step in more effectively. I will just

362
00:18:50,240 --> 00:18:55,520
Speaker 10: remind the audience why Intel is special. Under the CHIPSAC program,

363
00:18:55,560 --> 00:18:58,840
Speaker 10: they became the steward of something called the Secure Enclave

364
00:18:58,920 --> 00:19:01,879
Speaker 10: program that was set up to have kind of a

365
00:19:01,960 --> 00:19:05,359
Speaker 10: minimum viable number of chips being produced here in the

366
00:19:05,440 --> 00:19:09,960
Speaker 10: United States for needs like defense and national security. So

367
00:19:10,400 --> 00:19:12,440
Speaker 10: it's not realistic to think we're going to rea shure

368
00:19:12,440 --> 00:19:15,639
Speaker 10: the entire semiconductor supply chain, but having this goal of

369
00:19:15,720 --> 00:19:18,000
Speaker 10: kind of an insurance policy to make sure we can

370
00:19:18,040 --> 00:19:22,040
Speaker 10: produce at least some chips in the event of a

371
00:19:22,119 --> 00:19:23,840
Speaker 10: contingency is really important.

372
00:19:24,280 --> 00:19:28,200
Speaker 3: Great context Isotobin, Thank you so much, Managing director he

373
00:19:28,359 --> 00:19:33,480
Speaker 3: Ghano Global el muss doing Apple and open Ai over

374
00:19:33,520 --> 00:19:37,040
Speaker 3: an alleged arrangement on its iPhones, using the two companies

375
00:19:37,040 --> 00:19:39,920
Speaker 3: of unfairly favoring open Ai on its smartphones and thwarting

376
00:19:39,960 --> 00:19:45,000
Speaker 3: competition such as Musk's Clock. Blomberg Consumer Tech managing editor

377
00:19:45,119 --> 00:19:47,120
Speaker 3: is with us Mark German, who knows the thing we'll

378
00:19:47,160 --> 00:19:50,399
Speaker 3: do about Apple. I mean a threatened this earlier this

379
00:19:50,560 --> 00:19:52,840
Speaker 3: month on x and now has gone through with that threat.

380
00:19:52,920 --> 00:19:55,399
Speaker 2: Ultimately, couldn't do anything to the relationship.

381
00:19:54,880 --> 00:19:58,520
Speaker 3: That open ai does have with Apple and vice versa.

382
00:19:58,640 --> 00:20:01,080
Speaker 11: I don't see so, I mean, if they consider this

383
00:20:01,119 --> 00:20:04,760
Speaker 11: an antitrust violation, that being the cord or the government

384
00:20:04,840 --> 00:20:06,880
Speaker 11: or what have you. What Apple would have to do

385
00:20:07,320 --> 00:20:10,159
Speaker 11: is open up what they call extensions within series. So

386
00:20:10,280 --> 00:20:13,439
Speaker 11: right now, the open ai relationship is what's called an

387
00:20:13,520 --> 00:20:18,000
Speaker 11: extension in Siri. If it doesn't understand one of your commands,

388
00:20:18,080 --> 00:20:19,760
Speaker 11: or it doesn't have the knowledge to answer one of

389
00:20:19,760 --> 00:20:24,439
Speaker 11: your commands, it uses open aist GPT as a fallback option. Now,

390
00:20:24,440 --> 00:20:27,920
Speaker 11: when Apple introduced this functionality, it's said that they would

391
00:20:27,920 --> 00:20:31,920
Speaker 11: have other available AI services, right and so they said

392
00:20:31,960 --> 00:20:34,760
Speaker 11: that Gemini would be there. Gemini never actually came to

393
00:20:34,800 --> 00:20:37,320
Speaker 11: fruition there. There's a lot more behind the scenes with

394
00:20:37,400 --> 00:20:41,040
Speaker 11: the Search Engine lawsuit, working with Gemini on other facets

395
00:20:41,080 --> 00:20:43,360
Speaker 11: that have gotten the way of that. But it's possible

396
00:20:43,359 --> 00:20:46,160
Speaker 11: if they open this up to third parties. Allow XAI,

397
00:20:47,000 --> 00:20:51,000
Speaker 11: allowed Brock, allow Claud allow different AI services in there,

398
00:20:51,119 --> 00:20:54,440
Speaker 11: and that would certainly solve the issue. And Elon is right,

399
00:20:54,480 --> 00:20:57,000
Speaker 11: they do give pretty hot promotion to some of the

400
00:20:57,040 --> 00:20:59,720
Speaker 11: other AI companies in the app Store. They haven't done

401
00:20:59,720 --> 00:21:01,479
Speaker 11: a lot of that promotion for a grock and so

402
00:21:01,480 --> 00:21:03,840
Speaker 11: maybe we'll see more of that from Apple. But all

403
00:21:03,880 --> 00:21:06,399
Speaker 11: in all, I find this lawsuit to be frivolous. I

404
00:21:06,480 --> 00:21:10,160
Speaker 11: don't personally consider it an antitrust situation, but it's obviously

405
00:21:10,160 --> 00:21:12,280
Speaker 11: not up to me to decide, and it is a

406
00:21:12,320 --> 00:21:14,959
Speaker 11: little surprising that Elon Musk actually went through with this.

407
00:21:15,800 --> 00:21:18,080
Speaker 3: Go to the context, of course that you put forward

408
00:21:18,080 --> 00:21:20,840
Speaker 3: in a story on Friday, that the relationship between Gemini

409
00:21:20,960 --> 00:21:23,840
Speaker 3: AI and Apple does look like it might get closer.

410
00:21:25,160 --> 00:21:27,960
Speaker 11: So Apple's building a new version of Siri for next spring,

411
00:21:28,040 --> 00:21:31,160
Speaker 11: and it's obviously much needed for reasons that I don't

412
00:21:31,200 --> 00:21:33,040
Speaker 11: have to spend an hour listing now.

413
00:21:33,600 --> 00:21:35,520
Speaker 9: But they basically have two paths.

414
00:21:35,760 --> 00:21:38,920
Speaker 11: They can go completely in house with the new version

415
00:21:38,920 --> 00:21:41,440
Speaker 11: of Siri, and by in house I mean self developed

416
00:21:41,520 --> 00:21:44,440
Speaker 11: large language models to power it, or they could use

417
00:21:44,480 --> 00:21:46,840
Speaker 11: a third party to help out in terms of building

418
00:21:46,880 --> 00:21:48,880
Speaker 11: the new sery. So they've been talking to a bunch

419
00:21:48,920 --> 00:21:51,600
Speaker 11: of possible partners to see if they're willing to power

420
00:21:51,720 --> 00:21:54,359
Speaker 11: aspects of that new series. So they've been talking very

421
00:21:54,440 --> 00:21:57,920
Speaker 11: much to Claude from Anthropic, and I believe eventually they'll

422
00:21:57,960 --> 00:22:00,919
Speaker 11: reach some sort of agreement. But more recently they started

423
00:22:01,119 --> 00:22:04,639
Speaker 11: negotiations with Google about Google building a model based on

424
00:22:04,640 --> 00:22:07,040
Speaker 11: its Gemini technology for Apple as well. So we'll see

425
00:22:07,040 --> 00:22:08,879
Speaker 11: where they ultimately land in a few months.

426
00:22:09,160 --> 00:22:11,800
Speaker 3: And before that, we've got more hardware to Carme and

427
00:22:11,800 --> 00:22:13,879
Speaker 3: Mark Gooman. You've been writing about that throughout the weekend

428
00:22:13,920 --> 00:22:15,800
Speaker 3: on Poweron. I urge everyone to go and take a

429
00:22:15,840 --> 00:22:17,840
Speaker 3: read and then listen. We thank you so much for

430
00:22:17,920 --> 00:22:25,800
Speaker 3: joining us. Welcome back to Bloomberg Tech. Let's check in

431
00:22:25,840 --> 00:22:28,080
Speaker 3: on a couple of stocks, because more broadly the benchmarks

432
00:22:28,119 --> 00:22:28,480
Speaker 3: are flat.

433
00:22:28,520 --> 00:22:30,840
Speaker 2: But I'm looking at PDD up more than one.

434
00:22:30,640 --> 00:22:33,199
Speaker 3: Point two percent. Let's now call it. This is the

435
00:22:33,240 --> 00:22:35,800
Speaker 3: owner of tim who, of course actually reported slightly better

436
00:22:35,800 --> 00:22:39,399
Speaker 3: than anticipated numbers. Revenue pushed up seven percent. Look, it

437
00:22:39,480 --> 00:22:42,080
Speaker 3: is the slowest pace of expansion in the years for

438
00:22:42,160 --> 00:22:45,919
Speaker 3: the Chinese e commerce giant. However, it did manage to

439
00:22:45,920 --> 00:22:49,119
Speaker 3: beat some pretty low expectations of analysts. Net income that

440
00:22:49,160 --> 00:22:51,040
Speaker 3: was on the downside. But really this is coming from

441
00:22:51,080 --> 00:22:53,879
Speaker 3: galvanizing consumers. They're trying to offset this economic fallout from

442
00:22:53,960 --> 00:22:56,359
Speaker 3: US tarras and a little bit of a relief today,

443
00:22:56,400 --> 00:22:58,320
Speaker 3: Intel up one and a half percent. This is the

444
00:22:58,400 --> 00:23:01,160
Speaker 3: US government does take that ten percent. State does have

445
00:23:01,200 --> 00:23:03,760
Speaker 3: President Trump saying they got it the zero, but he

446
00:23:03,840 --> 00:23:05,800
Speaker 3: does want to show support. And this is all about

447
00:23:05,840 --> 00:23:08,000
Speaker 3: having a domestic champion here in the United States when

448
00:23:08,040 --> 00:23:10,600
Speaker 3: it comes to chip manufacturing. But that's all about the

449
00:23:10,600 --> 00:23:13,000
Speaker 3: store of AI, isn't it. And let's talk about AI startup.

450
00:23:13,040 --> 00:23:16,480
Speaker 3: Perplexity set to allow publishers the opportunity to actually share

451
00:23:16,520 --> 00:23:19,439
Speaker 3: in revenue their articles generate. The move comes as the

452
00:23:19,440 --> 00:23:22,600
Speaker 3: company faces pretty mounting criticism and legal action from media

453
00:23:22,640 --> 00:23:25,719
Speaker 3: outlets over its use of their content promote showing Gafari

454
00:23:25,760 --> 00:23:27,280
Speaker 3: and places to say, it's still here in New York

455
00:23:27,320 --> 00:23:29,840
Speaker 3: and I'm thrilled about it. What are we seeing in

456
00:23:29,880 --> 00:23:32,240
Speaker 3: terms of Perplexity trying to fend off issues. This is

457
00:23:32,280 --> 00:23:35,320
Speaker 3: all about comment. This is all about well, the actual

458
00:23:36,000 --> 00:23:38,680
Speaker 3: new product that they're offering and trying to share revenue there.

459
00:23:39,080 --> 00:23:41,920
Speaker 12: That's right, So Perplexity as well as other AI companies,

460
00:23:41,920 --> 00:23:43,760
Speaker 12: But they've really been one of the quickest is making

461
00:23:43,800 --> 00:23:46,879
Speaker 12: a big push into an AI browser, right, so having

462
00:23:46,880 --> 00:23:49,399
Speaker 12: all the AI tools actually embedded into your web search

463
00:23:49,440 --> 00:23:52,600
Speaker 12: and being able to sort of understand what you're seeing

464
00:23:52,600 --> 00:23:54,520
Speaker 12: on the web and everything you're doing on your computer.

465
00:23:54,920 --> 00:23:57,560
Speaker 12: At the same time, they want to be able to

466
00:23:57,560 --> 00:24:01,080
Speaker 12: have high quality information right for people when are searching

467
00:24:01,119 --> 00:24:05,040
Speaker 12: through different tabs. So they're integrating this new kind of

468
00:24:05,440 --> 00:24:09,600
Speaker 12: premium tier of subscription that will allow you to actually

469
00:24:09,680 --> 00:24:12,680
Speaker 12: get some more high quality news sources into your AI

470
00:24:14,160 --> 00:24:17,480
Speaker 12: browser assistant and give five percent of that revenue share

471
00:24:17,520 --> 00:24:19,080
Speaker 12: two publishers who partner with them.

472
00:24:19,440 --> 00:24:22,040
Speaker 3: Okay, so they're able to charge more and therefore allow

473
00:24:22,119 --> 00:24:23,560
Speaker 3: some money to go to them, but that must be

474
00:24:23,640 --> 00:24:26,920
Speaker 3: a fraction thus far of the actual use of publishers

475
00:24:26,960 --> 00:24:29,399
Speaker 3: and what they're working on. And many have been fighting

476
00:24:29,400 --> 00:24:31,000
Speaker 3: back at Perplexity for that.

477
00:24:31,000 --> 00:24:32,640
Speaker 12: That's right, And by the way, I misspoke, it's actually

478
00:24:32,720 --> 00:24:34,480
Speaker 12: eighty percent of revenue share, which is high, and what

479
00:24:34,520 --> 00:24:37,399
Speaker 12: I meant was it's five dollars a month for the subscription.

480
00:24:37,720 --> 00:24:39,240
Speaker 2: And yes it comes at a time. I mean, this

481
00:24:39,320 --> 00:24:40,639
Speaker 2: company has had.

482
00:24:42,240 --> 00:24:45,040
Speaker 12: Some fights with media companies in the past and continues

483
00:24:45,080 --> 00:24:48,960
Speaker 12: to write they have had accusations of plagiarism that they've denied.

484
00:24:49,359 --> 00:24:52,280
Speaker 12: They have also more recently just sort of been facing

485
00:24:52,320 --> 00:24:57,399
Speaker 12: copyright infringement lawsuits. They're not the only ones, right, Almost

486
00:24:57,480 --> 00:24:59,080
Speaker 12: every major AI company.

487
00:24:58,760 --> 00:25:00,520
Speaker 6: Is facing these kinds of leak battles.

488
00:25:00,520 --> 00:25:05,399
Speaker 12: But Perplexity in particular has sort of faced some criticism

489
00:25:05,440 --> 00:25:07,560
Speaker 12: over that, and I think now they're trying to show

490
00:25:07,600 --> 00:25:08,240
Speaker 12: that they can.

491
00:25:08,119 --> 00:25:09,120
Speaker 2: Work with publishers.

492
00:25:09,240 --> 00:25:13,000
Speaker 12: They have done some similar sharing of their revenue in

493
00:25:13,040 --> 00:25:14,919
Speaker 12: the past, but that's been on ads, and this is

494
00:25:14,920 --> 00:25:16,640
Speaker 12: one of the first to be on subscriptions.

495
00:25:16,720 --> 00:25:17,879
Speaker 2: And it's different, isn't it from me?

496
00:25:18,119 --> 00:25:20,720
Speaker 3: Just mega deals that we see Open ai or maybe

497
00:25:20,720 --> 00:25:22,879
Speaker 3: even Google, of which, of course Perplexity has thrown their

498
00:25:22,920 --> 00:25:24,480
Speaker 3: hat in the ring for a Chrome browser.

499
00:25:25,480 --> 00:25:27,120
Speaker 2: What they've just been giving.

500
00:25:26,920 --> 00:25:29,560
Speaker 3: Lump sums in some way to some of these publishing companies.

501
00:25:29,960 --> 00:25:30,400
Speaker 5: That's right.

502
00:25:30,440 --> 00:25:31,480
Speaker 2: So Perplexity says.

503
00:25:31,280 --> 00:25:33,119
Speaker 12: They don't want to do these big one off deals,

504
00:25:33,119 --> 00:25:35,439
Speaker 12: but they actually think that it's more sustainable to do

505
00:25:35,480 --> 00:25:38,360
Speaker 12: these long term partnership or you know, more structural sort

506
00:25:38,400 --> 00:25:41,320
Speaker 12: of percentage partnerships of the actual subscription revenue or the

507
00:25:41,359 --> 00:25:42,040
Speaker 12: ad revenue.

508
00:25:42,200 --> 00:25:44,160
Speaker 3: Sharan Gafari, We thank you for being in the house

509
00:25:44,160 --> 00:25:47,560
Speaker 3: in New York. Now elsewhere in AI. Palenteer down once

510
00:25:47,560 --> 00:25:51,840
Speaker 3: again as investors question returns on AI investments and valuations concerns,

511
00:25:51,840 --> 00:25:53,760
Speaker 3: which you've been hitting Palenteer for at least two weeks.

512
00:25:53,760 --> 00:25:55,399
Speaker 2: Now, that's bring in Jeffrey's.

513
00:25:55,000 --> 00:25:57,480
Speaker 3: Analyst Brentville is one of the most bearish analysts with

514
00:25:57,480 --> 00:26:00,280
Speaker 3: a sixty dollars price target and an underperformed rating. And

515
00:26:00,320 --> 00:26:03,359
Speaker 3: you just thought the valuation got totally out of whack.

516
00:26:03,720 --> 00:26:05,879
Speaker 3: Has the full rectified anything for you?

517
00:26:05,920 --> 00:26:06,120
Speaker 2: Thus?

518
00:26:06,119 --> 00:26:10,280
Speaker 13: Well, no, I mean it's still seventy times revenue. We've

519
00:26:10,320 --> 00:26:12,760
Speaker 13: ever seen a software coming trade of this multiple. So,

520
00:26:14,119 --> 00:26:16,720
Speaker 13: as we've said, you can touch multiples like this, but

521
00:26:16,880 --> 00:26:19,760
Speaker 13: you can never sustain or live. It's like living on

522
00:26:19,800 --> 00:26:21,200
Speaker 13: the top of mine ever, so you can get there,

523
00:26:21,200 --> 00:26:25,960
Speaker 13: but you can't stay there. So again, the fundamentals of

524
00:26:26,000 --> 00:26:30,119
Speaker 13: this company are blowing any anyone's expectation, including ours away.

525
00:26:30,320 --> 00:26:32,880
Speaker 13: For them to put up a rule in ninety which

526
00:26:32,960 --> 00:26:37,760
Speaker 13: is top line and bottom line margin combined equally ninety

527
00:26:37,960 --> 00:26:41,879
Speaker 13: is unheard of. So they are effectively on a different

528
00:26:41,920 --> 00:26:45,080
Speaker 13: planet as it relates to their fundamentals. But the valuation

529
00:26:45,240 --> 00:26:47,800
Speaker 13: is there as well, so I think we've tried to

530
00:26:47,800 --> 00:26:53,119
Speaker 13: separate the two and saying the company is performing extremely well.

531
00:26:54,040 --> 00:26:57,720
Speaker 9: We don't see anything like it in our coverage universe. However,

532
00:26:57,920 --> 00:27:00,280
Speaker 9: we have seen this before.

533
00:27:00,600 --> 00:27:03,359
Speaker 13: You saw a snowflake data on others that trade in

534
00:27:03,840 --> 00:27:07,359
Speaker 13: at those similar multiples. They never sustained and it was

535
00:27:07,760 --> 00:27:10,000
Speaker 13: it was a tough fall. So the minute that revenue

536
00:27:10,000 --> 00:27:13,639
Speaker 13: growth decelerates, and we've had eight quarters of accelerating revenue growth,

537
00:27:14,200 --> 00:27:18,360
Speaker 13: once you see that dcell, the multiple is a concern.

538
00:27:18,520 --> 00:27:20,920
Speaker 3: So do you have a view on when that deceleration

539
00:27:21,040 --> 00:27:23,440
Speaker 3: will actually have because you've you've said in your notes,

540
00:27:23,480 --> 00:27:26,719
Speaker 3: so you've got limited visibility, lumpiness and quarterly bookings. I mean,

541
00:27:26,760 --> 00:27:28,720
Speaker 3: and this is actually going to start showing up and

542
00:27:28,760 --> 00:27:31,159
Speaker 3: convincing the retail investor that has helped drive it up

543
00:27:31,160 --> 00:27:33,120
Speaker 3: into the right Yeah, I.

544
00:27:33,040 --> 00:27:33,800
Speaker 9: Mean, it's a good point.

545
00:27:33,880 --> 00:27:37,800
Speaker 13: So the majority, a huge part of the investor bases retail.

546
00:27:37,800 --> 00:27:38,760
Speaker 9: It's about forty percent.

547
00:27:39,359 --> 00:27:43,200
Speaker 13: And so our clients are institutions, and I don't speak

548
00:27:43,200 --> 00:27:45,680
Speaker 13: to a lot of clients and volunteer because our institutions

549
00:27:45,760 --> 00:27:50,240
Speaker 13: have basically valuation thresholds that they can't break through. And

550
00:27:50,320 --> 00:27:52,560
Speaker 13: we've they've all seen this movie before in the last

551
00:27:52,560 --> 00:27:55,680
Speaker 13: twenty years in our group. So from a retail perspective,

552
00:27:55,720 --> 00:27:59,280
Speaker 13: it can keep working. When does it break? We don't

553
00:27:59,320 --> 00:28:01,639
Speaker 13: see a break down on the fundamentals. I think the

554
00:28:01,720 --> 00:28:04,680
Speaker 13: question becomes, you know, the comps are going to start.

555
00:28:04,480 --> 00:28:08,159
Speaker 9: Getting harder and can they sustain that level of growth?

556
00:28:08,240 --> 00:28:12,000
Speaker 13: And doctor Karp, the CEO, has said this that they

557
00:28:12,080 --> 00:28:15,800
Speaker 13: expect headcount to actually shrink and they can grow revenue

558
00:28:15,840 --> 00:28:21,480
Speaker 13: ten x on a shrinking employee workforce at Volunteer, which

559
00:28:21,520 --> 00:28:24,879
Speaker 13: is to me kind of mind blowing because if you

560
00:28:24,920 --> 00:28:27,760
Speaker 13: think about it, you need a lot of talenteer people

561
00:28:27,920 --> 00:28:31,280
Speaker 13: and services people to get the software working. How does

562
00:28:31,320 --> 00:28:33,800
Speaker 13: this happen? Is AI make the software work? There's a

563
00:28:33,800 --> 00:28:36,399
Speaker 13: couple of things that just I think everyone's trying to

564
00:28:36,520 --> 00:28:39,720
Speaker 13: make sense of. That's one comment that how do you

565
00:28:39,720 --> 00:28:42,200
Speaker 13: grow ten x with that tiny of a workforce?

566
00:28:42,560 --> 00:28:45,920
Speaker 3: And Brent, you've outlined the issues of employees, but there

567
00:28:45,920 --> 00:28:48,480
Speaker 3: are upside risks that you also detail that they actually

568
00:28:48,480 --> 00:28:51,920
Speaker 3: do do faster and expected monetization, particularly of the AIP

569
00:28:52,240 --> 00:28:55,760
Speaker 3: or they do get sustained commercial momentum. How long can

570
00:28:55,800 --> 00:28:59,720
Speaker 3: the market remain irrational and others remain Solvent.

571
00:29:00,320 --> 00:29:02,960
Speaker 9: Well, the market can remain rational for a while.

572
00:29:02,960 --> 00:29:05,920
Speaker 13: Again, remember you're dealing with the retail in sol Based,

573
00:29:05,920 --> 00:29:09,480
Speaker 13: you're not dealing within the institutional base, so as a

574
00:29:09,480 --> 00:29:10,240
Speaker 13: pig in the stock.

575
00:29:10,360 --> 00:29:13,040
Speaker 9: So I'd just say that this could continue to go on.

576
00:29:13,160 --> 00:29:15,000
Speaker 13: And this is the area that we've been wrong, which

577
00:29:15,040 --> 00:29:17,960
Speaker 13: is the magnitude of in the duration of how long

578
00:29:18,000 --> 00:29:18,680
Speaker 13: it would sustain.

579
00:29:19,000 --> 00:29:19,880
Speaker 9: I mean, if you take the.

580
00:29:19,840 --> 00:29:22,840
Speaker 13: Next closest multiple in software and this is close to

581
00:29:22,880 --> 00:29:27,680
Speaker 13: seventy times, it's it's cloud Flare at twenty twenty five times,

582
00:29:27,920 --> 00:29:30,080
Speaker 13: and then it falls off a cliff from there in

583
00:29:30,160 --> 00:29:32,320
Speaker 13: terms of the multiples across our coverage.

584
00:29:32,680 --> 00:29:34,280
Speaker 9: So you're just really.

585
00:29:34,040 --> 00:29:37,600
Speaker 13: Dealing with something that is super unique. Their business is

586
00:29:37,640 --> 00:29:38,400
Speaker 13: super unique.

587
00:29:38,920 --> 00:29:40,080
Speaker 9: The execution has.

588
00:29:40,040 --> 00:29:44,440
Speaker 13: Been incredible, so there's been no real reason fundamentally to

589
00:29:45,400 --> 00:29:50,080
Speaker 13: sell a stock other than, hey, the multiple is where

590
00:29:50,120 --> 00:29:50,480
Speaker 13: it's at.

591
00:29:50,560 --> 00:29:52,920
Speaker 9: So I think it's it's hard. It's a hard one

592
00:29:52,960 --> 00:29:55,640
Speaker 9: because again you have to give them credit.

593
00:29:56,080 --> 00:29:59,040
Speaker 13: The product is working, the customers love it, and you

594
00:29:59,080 --> 00:30:01,680
Speaker 13: look at the coal money in the execution.

595
00:30:01,320 --> 00:30:04,720
Speaker 9: Has been it's been next to no one, no one's

596
00:30:04,760 --> 00:30:05,680
Speaker 9: been even close to him.

597
00:30:06,120 --> 00:30:08,200
Speaker 3: Well, they still remain the best performing stock in the

598
00:30:08,200 --> 00:30:10,240
Speaker 3: SP five hundred. Despite the recent for what we see

599
00:30:10,240 --> 00:30:12,520
Speaker 3: how much the momentum carries on brenha It's always so

600
00:30:12,560 --> 00:30:14,600
Speaker 3: great to check in with you, Jeffrey's analyst. Thanks for

601
00:30:14,640 --> 00:30:17,200
Speaker 3: your time. And another defense tech company to watch. This

602
00:30:17,240 --> 00:30:19,240
Speaker 3: one actually part of it not part of the public

603
00:30:19,240 --> 00:30:21,440
Speaker 3: markets yet. In fact it's private and it's called Seronic

604
00:30:21,640 --> 00:30:23,680
Speaker 3: and wants to speed up shipbuilding in the United States

605
00:30:23,680 --> 00:30:25,760
Speaker 3: with the goal of securing US naval dominance.

606
00:30:25,800 --> 00:30:26,720
Speaker 2: According to the CEO.

607
00:30:27,080 --> 00:30:30,600
Speaker 3: We spoke with that CEO, Dino Marucas, about the shift

608
00:30:30,800 --> 00:30:32,440
Speaker 3: that he's seeing in government interest.

609
00:30:34,120 --> 00:30:36,840
Speaker 14: I was in the seal teams for eleven years. My

610
00:30:36,960 --> 00:30:39,520
Speaker 14: last five years were spent on Seal Team six. That

611
00:30:39,600 --> 00:30:42,800
Speaker 14: was from two thousand and four to twenty fifteen. I

612
00:30:42,880 --> 00:30:45,960
Speaker 14: say that to say this, this is the fastest that

613
00:30:46,040 --> 00:30:50,440
Speaker 14: I've seen the military and the government move to adopt

614
00:30:50,680 --> 00:30:52,240
Speaker 14: anything in my life.

615
00:30:52,480 --> 00:30:52,800
Speaker 5: Now.

616
00:30:53,040 --> 00:30:56,920
Speaker 14: That is extremely encouraging from a business and an operational perspective,

617
00:30:57,240 --> 00:30:59,480
Speaker 14: but it should also be concerning when we think about

618
00:30:59,720 --> 00:31:03,080
Speaker 14: why is that happening right? The potential threat with China

619
00:31:03,120 --> 00:31:05,520
Speaker 14: and the South Pacific. We need to move and we

620
00:31:05,600 --> 00:31:08,480
Speaker 14: need to move now. And that's why we're operating so

621
00:31:08,640 --> 00:31:13,040
Speaker 14: quickly here at Teharonic. We're investing private capital to build

622
00:31:13,080 --> 00:31:16,720
Speaker 14: the technology that our warfighters need and get those solutions

623
00:31:16,760 --> 00:31:18,520
Speaker 14: in their hands as fast as possible.

624
00:31:18,560 --> 00:31:19,400
Speaker 2: What else do you need to know?

625
00:31:19,520 --> 00:31:21,920
Speaker 3: You talked about how you're building the infrastructure around the talent,

626
00:31:22,240 --> 00:31:24,240
Speaker 3: But what is it that keeps you up at night,

627
00:31:24,280 --> 00:31:25,280
Speaker 3: that stops and holds you.

628
00:31:25,280 --> 00:31:29,920
Speaker 14: Back when we think about what we need, I break

629
00:31:29,960 --> 00:31:34,880
Speaker 14: it down to talent, customer capital. If you bring those

630
00:31:35,000 --> 00:31:39,560
Speaker 14: three things together, there is a there's magic that is

631
00:31:39,560 --> 00:31:41,320
Speaker 14: happening here at Turonic. What do I mean by that

632
00:31:41,400 --> 00:31:44,280
Speaker 14: is we have a world like, truly world class team.

633
00:31:44,720 --> 00:31:48,880
Speaker 14: Our co founders come from phenomenal companies with phenomenal backgrounds.

634
00:31:49,000 --> 00:31:52,880
Speaker 14: We have over eight hundred employees now across the country

635
00:31:53,040 --> 00:31:56,280
Speaker 14: and actually across the world. We've opened locations in Australia

636
00:31:56,360 --> 00:31:59,040
Speaker 14: and the UK as well. Capital we have some of

637
00:31:59,560 --> 00:32:03,920
Speaker 14: the world largest invest investors eight VC, Andrees and Horowitz

638
00:32:04,160 --> 00:32:05,360
Speaker 14: and the list goes on.

639
00:32:05,560 --> 00:32:08,720
Speaker 3: And you call commercial customers as well, just to round

640
00:32:08,760 --> 00:32:11,960
Speaker 3: things out. How big is could that be in terms

641
00:32:11,960 --> 00:32:12,400
Speaker 3: of demand?

642
00:32:13,240 --> 00:32:16,440
Speaker 14: I mean that we look at the commercial sector as

643
00:32:16,600 --> 00:32:20,240
Speaker 14: absolutely critical. I mean one hundred billion dollars plus commercial

644
00:32:20,280 --> 00:32:24,400
Speaker 14: maritime market. And here's here's the thing that I point

645
00:32:24,440 --> 00:32:27,520
Speaker 14: out to people when you're focussing about on defense, it's

646
00:32:27,840 --> 00:32:32,479
Speaker 14: you need a strong commercial industry to have a strong

647
00:32:32,560 --> 00:32:35,840
Speaker 14: defense industry. We build all of our products for dual

648
00:32:35,920 --> 00:32:37,400
Speaker 14: use defense and commercial.

649
00:32:37,440 --> 00:32:38,600
Speaker 5: What that let us what's that?

650
00:32:38,800 --> 00:32:41,960
Speaker 14: What that lets us do is diversify our revenue base.

651
00:32:42,280 --> 00:32:45,040
Speaker 14: Invest more dollars into R and D to build better

652
00:32:45,040 --> 00:32:49,080
Speaker 14: solutions for the government, Build robust and reliable supply chains

653
00:32:49,120 --> 00:32:52,520
Speaker 14: that can scale, take advantage of economies of scale like

654
00:32:52,800 --> 00:32:55,720
Speaker 14: you have to build for commercial use cases as well.

655
00:32:55,960 --> 00:32:58,920
Speaker 14: The days of building one off, bespoke solutions for the

656
00:32:58,960 --> 00:33:02,360
Speaker 14: government are just over. We need to be building ships

657
00:33:02,400 --> 00:33:04,880
Speaker 14: by the hundreds and boats by the thousands.

658
00:33:05,080 --> 00:33:06,640
Speaker 9: And that's what we're doing at Soeronic.

659
00:33:06,880 --> 00:33:09,560
Speaker 3: And you've been able to make your supply chain work

660
00:33:09,600 --> 00:33:12,560
Speaker 3: to fit that at the moment, because with tariffs coming

661
00:33:12,600 --> 00:33:15,400
Speaker 3: in and changing the rules around metals and supplies, how

662
00:33:15,400 --> 00:33:16,880
Speaker 3: has that been for you to navigate?

663
00:33:17,440 --> 00:33:21,240
Speaker 14: We spend a lot a lot of time on supply chain.

664
00:33:21,480 --> 00:33:23,920
Speaker 14: We have two dozen people that focus on nothing but

665
00:33:24,000 --> 00:33:26,920
Speaker 14: supply chain. But here's the beauty of what we've been

666
00:33:26,920 --> 00:33:30,440
Speaker 14: able to do at Seronic, we're completely vertically integrated from

667
00:33:30,480 --> 00:33:32,960
Speaker 14: start to finish. When I say we're building our own

668
00:33:33,000 --> 00:33:35,360
Speaker 14: boats and ship, we're building our own boats and ships

669
00:33:35,560 --> 00:33:39,440
Speaker 14: right We're contracting the aluminum and the fiberglass. We're bringing

670
00:33:39,480 --> 00:33:43,400
Speaker 14: in every single component that is integrated onto our platforms.

671
00:33:43,520 --> 00:33:46,920
Speaker 14: We're doing final assembly, and we have the capital and

672
00:33:46,960 --> 00:33:50,720
Speaker 14: the team to bring things in house when we find

673
00:33:50,800 --> 00:33:54,240
Speaker 14: bottlenecks in that supply chain. That's very rare and very

674
00:33:54,320 --> 00:33:57,120
Speaker 14: unique and a very very strong differentiator when you talk

675
00:33:57,160 --> 00:33:59,920
Speaker 14: about what it takes to actually get to scale.

676
00:34:00,280 --> 00:34:00,760
Speaker 5: Sour on X.

677
00:34:00,760 --> 00:34:05,840
Speaker 3: CEO Dino Mavrucus with us earlier well later last week. Now,

678
00:34:05,840 --> 00:34:09,320
Speaker 3: the SpaceX delayed the test flight of its Starship rocket

679
00:34:09,360 --> 00:34:12,120
Speaker 3: on Sunday, just half an hour before its schedules lift off,

680
00:34:12,160 --> 00:34:13,560
Speaker 3: due to a liquid oxygen leak.

681
00:34:13,840 --> 00:34:15,359
Speaker 2: Now it marks another.

682
00:34:15,080 --> 00:34:18,560
Speaker 3: Blow to SpaceX's launch record, after two earlier flights this

683
00:34:18,680 --> 00:34:21,520
Speaker 3: year it's ended up in explosions. Now the company is

684
00:34:21,560 --> 00:34:25,520
Speaker 3: aiming for another launch later tonight. Coming up the world

685
00:34:25,520 --> 00:34:28,720
Speaker 3: of esports and looks to gain a wider fan base

686
00:34:28,880 --> 00:34:30,000
Speaker 3: and housing a new tournament.

687
00:34:30,280 --> 00:34:31,160
Speaker 2: More on that next.

688
00:34:31,760 --> 00:34:35,600
Speaker 3: While watching some outperformers in the world are gaming EA roadblocks,

689
00:34:35,640 --> 00:34:39,160
Speaker 3: both trading higher significantly outperforming, for example on roadblocks more

690
00:34:39,160 --> 00:34:41,279
Speaker 3: than after last week's sell off.

691
00:34:42,200 --> 00:34:43,280
Speaker 2: This is blue Bag Tech.

692
00:34:54,920 --> 00:34:57,839
Speaker 3: The Esports World Cup Foundation when it's announced a new

693
00:34:57,960 --> 00:35:01,640
Speaker 3: bi annual tournament called the Esport's Nations Cup, bringing together

694
00:35:01,680 --> 00:35:04,800
Speaker 3: the world's best players in an attempt to elevate esports

695
00:35:04,800 --> 00:35:08,120
Speaker 3: to a new cultural and patriotic movement. The tournament is

696
00:35:08,120 --> 00:35:11,040
Speaker 3: set to debut in twenty twenty six. In read, joining

697
00:35:11,080 --> 00:35:15,560
Speaker 3: US now Sports World Cup CEO Ralph Ria Reichert, there

698
00:35:15,600 --> 00:35:19,400
Speaker 3: we are, Ralph, give me a sense of why representing

699
00:35:19,400 --> 00:35:20,359
Speaker 3: countries matters here.

700
00:35:21,880 --> 00:35:23,920
Speaker 15: So when we look at what happened this year this

701
00:35:23,960 --> 00:35:26,319
Speaker 15: wayear was the second iteration of the Esports World Cup.

702
00:35:26,440 --> 00:35:28,879
Speaker 15: Was the first time that all the games industry comes

703
00:35:28,880 --> 00:35:32,759
Speaker 15: together and competes across twenty four different games. And this

704
00:35:32,800 --> 00:35:35,960
Speaker 15: is a unique moment because esports has been very segregated

705
00:35:35,960 --> 00:35:39,360
Speaker 15: into different disciplines and now there's one place where this

706
00:35:39,440 --> 00:35:42,080
Speaker 15: all happens together. And we've proven that it a can

707
00:35:42,120 --> 00:35:44,919
Speaker 15: happen on this scale and b be successful with seven

708
00:35:45,000 --> 00:35:48,560
Speaker 15: hundred million viewers across the world three million people visiting

709
00:35:48,640 --> 00:35:51,080
Speaker 15: Riat for it, which is, you know, as much as

710
00:35:51,600 --> 00:35:53,160
Speaker 15: that Vegas has visitors in.

711
00:35:53,120 --> 00:35:55,120
Speaker 9: Four weeks, So that was the proof point.

712
00:35:55,400 --> 00:35:57,240
Speaker 15: Now we want to bring it to the next level

713
00:35:57,320 --> 00:36:00,400
Speaker 15: because Esports has been build out of clubs, which are

714
00:36:00,440 --> 00:36:03,120
Speaker 15: super important and the origin of it, but for my

715
00:36:03,239 --> 00:36:06,000
Speaker 15: mom to care to take it for the next step

716
00:36:06,040 --> 00:36:09,320
Speaker 15: and really make it mainstream. We believe that Nations is

717
00:36:09,360 --> 00:36:13,640
Speaker 15: a very logical step. And by building this platform and

718
00:36:13,680 --> 00:36:16,120
Speaker 15: the model of the Esports Work Cup, we the foundation

719
00:36:16,200 --> 00:36:19,000
Speaker 15: now have the means and the trust of the publisher,

720
00:36:19,239 --> 00:36:23,000
Speaker 15: the community, and the fans and the players most importantly

721
00:36:23,120 --> 00:36:25,960
Speaker 15: to do this, and that's why we announced it on Saturday,

722
00:36:26,000 --> 00:36:27,400
Speaker 15: and we're incredibly excited about it.

723
00:36:27,480 --> 00:36:30,160
Speaker 3: Why in the Middle East, what has we had been

724
00:36:30,200 --> 00:36:31,200
Speaker 3: so quick to adopt this?

725
00:36:32,520 --> 00:36:33,680
Speaker 5: So I think there's a few reasons.

726
00:36:33,719 --> 00:36:37,360
Speaker 15: I mean, number one, there is out of the population

727
00:36:37,400 --> 00:36:40,879
Speaker 15: of Saudi Arabia, sixty three percent are below thirty five

728
00:36:41,640 --> 00:36:45,680
Speaker 15: and seventy percent of the population in Saudi Arabia identifies

729
00:36:45,719 --> 00:36:49,680
Speaker 15: as gamers, so it's a huge home for gaming. And

730
00:36:49,719 --> 00:36:52,319
Speaker 15: then the Crown Prince himself is the thirty eight years

731
00:36:52,360 --> 00:36:55,640
Speaker 15: and now whold right, so he's endemically has grown up

732
00:36:55,640 --> 00:36:58,360
Speaker 15: with gamings and a lot of people in the government actually,

733
00:36:58,400 --> 00:37:01,080
Speaker 15: so I think it's the first woman that's out there

734
00:37:01,160 --> 00:37:04,640
Speaker 15: where you know, it's consisting of people who really understand

735
00:37:04,680 --> 00:37:07,480
Speaker 15: gaming from the inside out rather than looking out of it.

736
00:37:07,800 --> 00:37:12,360
Speaker 15: And number three, Saudi Arabi has publicly said this multiple

737
00:37:12,360 --> 00:37:17,600
Speaker 15: times since diversifying their economy and tourism is a big one,

738
00:37:17,640 --> 00:37:21,560
Speaker 15: but gaming as well of this diversification and the largest

739
00:37:21,560 --> 00:37:24,120
Speaker 15: e sports event in the world is a no brainer.

740
00:37:23,800 --> 00:37:24,480
Speaker 9: To achieve that.

741
00:37:24,920 --> 00:37:27,920
Speaker 3: I mean, they had Ronaldo of course giving away prizes

742
00:37:27,960 --> 00:37:31,160
Speaker 3: at the recent festival, and he lives over there playing

743
00:37:31,200 --> 00:37:31,640
Speaker 3: as well.

744
00:37:31,719 --> 00:37:35,120
Speaker 2: I'm interested in Ralph just about how much money has

745
00:37:35,160 --> 00:37:36,319
Speaker 2: managed to be built through this.

746
00:37:36,400 --> 00:37:38,560
Speaker 3: What sort of sponsorship are you're seeing, because the number

747
00:37:38,600 --> 00:37:40,600
Speaker 3: is the viewership, the eyeballs are extraordinary.

748
00:37:41,440 --> 00:37:44,040
Speaker 15: Yes, So I mean, as you said right, Ronaldo is

749
00:37:44,080 --> 00:37:46,359
Speaker 15: our global ambassador. So I was on stage with him

750
00:37:46,360 --> 00:37:49,279
Speaker 15: the other day presenting the trophy to Team Falcons, who

751
00:37:49,280 --> 00:37:53,320
Speaker 15: have won a very quickly, second Team Liquid, an American

752
00:37:53,800 --> 00:37:56,719
Speaker 15: European crossover, and last but not least, Team Vitality, which

753
00:37:56,760 --> 00:37:59,400
Speaker 15: is the European club. But we have more than twenty

754
00:37:59,400 --> 00:38:03,560
Speaker 15: two sponsors with many international names like Sony, Amazon, Pepsi,

755
00:38:03,680 --> 00:38:08,600
Speaker 15: Hillton and Nasacard. So the lineup is incredible. It's well

756
00:38:08,600 --> 00:38:12,200
Speaker 15: over a nine figure sponsorship income. But to be honest,

757
00:38:12,239 --> 00:38:15,360
Speaker 15: the industry is still early. So without host city fees

758
00:38:15,400 --> 00:38:18,480
Speaker 15: and country hosting fees like we have gotten through Saudi

759
00:38:18,480 --> 00:38:21,480
Speaker 15: Arabia at this scale, this wouldn't be possible. And we've

760
00:38:21,480 --> 00:38:23,320
Speaker 15: seen this a little bit in the last few years,

761
00:38:23,320 --> 00:38:26,520
Speaker 15: that the monetization is not where it's in traditional sports.

762
00:38:26,640 --> 00:38:30,040
Speaker 15: And I think one of the things we always miss

763
00:38:30,120 --> 00:38:33,399
Speaker 15: is traditional sports is heavily subsidized by governments as well

764
00:38:33,440 --> 00:38:37,080
Speaker 15: by public money, being it in the college system or

765
00:38:37,120 --> 00:38:40,400
Speaker 15: an amateur system, or in when the biggest sports events

766
00:38:40,440 --> 00:38:42,719
Speaker 15: come to countries right where it's a big marketing and

767
00:38:42,760 --> 00:38:45,120
Speaker 15: financial support. And I think what we're seeing with the

768
00:38:45,200 --> 00:38:47,279
Speaker 15: Esports World Cup and now with the Esport's Nations Cup

769
00:38:47,360 --> 00:38:50,240
Speaker 15: is for the first time that governments really at scale,

770
00:38:50,280 --> 00:38:53,239
Speaker 15: invest into it, believe in it, and use it as

771
00:38:53,239 --> 00:38:55,680
Speaker 15: a cultural tool like they do with traditional sports.

772
00:38:56,480 --> 00:38:59,120
Speaker 3: It's been great seeing some of the numbers, seeing some

773
00:38:59,160 --> 00:39:02,160
Speaker 3: of the celebrations, talking about in the next tournament, rav

774
00:39:02,440 --> 00:39:05,680
Speaker 3: Racket of Esports World Cup. Great speaking with you, Thank you,

775
00:39:11,360 --> 00:39:14,440
Speaker 3: Federal Trade Commission, is urging tech companies to resist what

776
00:39:14,560 --> 00:39:17,879
Speaker 3: they see as pressure from foreign governments. Two weekend data

777
00:39:17,920 --> 00:39:21,439
Speaker 3: privacy and free speech protections for US consumers now, FGC

778
00:39:21,560 --> 00:39:24,640
Speaker 3: Chairman Andrew Ferguson spoke to us about the agency's concerns

779
00:39:24,880 --> 00:39:28,239
Speaker 3: what he wants to hear from US tech companies in.

780
00:39:28,360 --> 00:39:32,240
Speaker 16: The United Kingdom, in Europe and elsewhere. American tech companies

781
00:39:32,239 --> 00:39:34,160
Speaker 16: that do business, you know, in the United States and

782
00:39:34,280 --> 00:39:38,759
Speaker 16: elsewhere are coming under pressure, sometimes through direct legislation, to

783
00:39:39,920 --> 00:39:44,320
Speaker 16: potentially censor speech in Europe, maybe even in the United States.

784
00:39:44,320 --> 00:39:47,400
Speaker 5: Of course, the Brazilian Supreme Court Justice.

785
00:39:47,280 --> 00:39:49,799
Speaker 16: Is of the view that American tech companies need to

786
00:39:49,840 --> 00:39:52,560
Speaker 16: censor speech everywhere because it's the nature of the Internet.

787
00:39:52,920 --> 00:39:54,880
Speaker 16: And it was really important to me, as an American

788
00:39:54,920 --> 00:39:56,960
Speaker 16: law enforcer to make it clear to American companies, you

789
00:39:56,960 --> 00:39:59,520
Speaker 16: don't get to take a free shot at American consumers

790
00:40:00,160 --> 00:40:02,440
Speaker 16: because of something that governments in other parts of the.

791
00:40:02,360 --> 00:40:03,600
Speaker 5: World are asking you to do.

792
00:40:04,000 --> 00:40:06,840
Speaker 16: We've got laws here in the United States that protect

793
00:40:06,840 --> 00:40:10,759
Speaker 16: the relationship between American consumers and American tech firms, and

794
00:40:10,840 --> 00:40:13,920
Speaker 16: so no one should think that you just sort of

795
00:40:13,920 --> 00:40:16,200
Speaker 16: get to do to Americans whatever you want. In order

796
00:40:16,280 --> 00:40:20,279
Speaker 16: to comply with the demands of foreign governments, and that

797
00:40:20,560 --> 00:40:23,520
Speaker 16: you know, American laws, particularly the Federal Trade Commission Act

798
00:40:23,560 --> 00:40:26,919
Speaker 16: that I enforce, don't allow American tech companies to hurt

799
00:40:26,960 --> 00:40:29,960
Speaker 16: American consumers just because of foreign government is demanding it.

800
00:40:30,160 --> 00:40:32,680
Speaker 16: And I just wanted to make sure that everyone, consumers

801
00:40:32,680 --> 00:40:35,120
Speaker 16: and the tech firms understood this is how I see

802
00:40:35,120 --> 00:40:37,160
Speaker 16: the law. And I want you to come to explain

803
00:40:37,239 --> 00:40:40,880
Speaker 16: to me how you are planning to protect American consumers

804
00:40:40,920 --> 00:40:44,400
Speaker 16: notwithstanding the demands of these foreign governments, and if they aren't,

805
00:40:44,520 --> 00:40:46,759
Speaker 16: then I'm going to enforce the law against them.

806
00:40:47,000 --> 00:40:49,480
Speaker 3: Thus far, we have seen action taken in particular by

807
00:40:49,520 --> 00:40:52,560
Speaker 3: Apple pushing back in requirements by the United Kingdom for

808
00:40:52,640 --> 00:40:56,719
Speaker 3: a so called backdoor into data that they hold rypto data.

809
00:40:56,719 --> 00:40:59,200
Speaker 3: I'm interested as to how you felt that unfolded in

810
00:40:59,239 --> 00:41:01,520
Speaker 3: the UK and with a Apple played by the play

811
00:41:01,520 --> 00:41:02,279
Speaker 3: that you wanted to see.

812
00:41:04,000 --> 00:41:05,520
Speaker 16: Yeah, I mean look, and I think a lot of

813
00:41:05,520 --> 00:41:08,439
Speaker 16: credit here needs to go to the Vice President who

814
00:41:09,360 --> 00:41:13,560
Speaker 16: sort of personally managed trying to protect Americans from these

815
00:41:13,600 --> 00:41:16,080
Speaker 16: demands of a foreign government. But yeah, I mean, look,

816
00:41:16,160 --> 00:41:20,280
Speaker 16: I want American tech firms to understand you have legal

817
00:41:20,280 --> 00:41:22,799
Speaker 16: obligations in your home country and the country that made

818
00:41:22,840 --> 00:41:25,120
Speaker 16: it possible for you to become what you have become

819
00:41:25,640 --> 00:41:29,200
Speaker 16: to protect American consumers and not basically to give Americans

820
00:41:29,239 --> 00:41:31,720
Speaker 16: the short shrift because it would be easier to comply

821
00:41:31,800 --> 00:41:34,520
Speaker 16: with the demands of a foreign government. And so I'm

822
00:41:34,520 --> 00:41:37,640
Speaker 16: glad that because of pressure from the United States and

823
00:41:37,680 --> 00:41:40,480
Speaker 16: particularly from the Vice President, that we were able to

824
00:41:40,480 --> 00:41:42,760
Speaker 16: achieve this outcome or protect consumers from Apple.

825
00:41:43,000 --> 00:41:44,200
Speaker 5: But this isn't going away.

826
00:41:44,520 --> 00:41:47,719
Speaker 16: Europe has passed these laws that promote censorship, Britain has

827
00:41:47,760 --> 00:41:50,400
Speaker 16: these laws. We're seeing this sort of thing happening in Brazil,

828
00:41:50,800 --> 00:41:54,040
Speaker 16: and it's very important that American tech companies understand you

829
00:41:54,480 --> 00:41:57,400
Speaker 16: cannot just sort of take it out on Americans in

830
00:41:57,520 --> 00:41:59,360
Speaker 16: order to comply with these other foreign governments.

831
00:41:59,360 --> 00:42:00,960
Speaker 5: You have to protect Americans first.

832
00:42:01,640 --> 00:42:05,440
Speaker 3: FTC Chair Andrew Ferguson Go to online and see the

833
00:42:05,480 --> 00:42:06,240
Speaker 3: full interview.

834
00:42:06,280 --> 00:42:08,480
Speaker 2: But that does it. From this edition of Bloomberg.

835
00:42:08,040 --> 00:42:12,080
Speaker 3: Tech has check in on Intel shares, a historic time

836
00:42:12,160 --> 00:42:14,279
Speaker 3: for a company when ten percent of its secuity is

837
00:42:14,320 --> 00:42:17,399
Speaker 3: now held by the US government. They don't want governance role.

838
00:42:18,040 --> 00:42:20,759
Speaker 3: But President Trump earlier today taking to truth social and

839
00:42:20,920 --> 00:42:24,600
Speaker 3: now at a press conference discussing the upside for America.

840
00:42:24,680 --> 00:42:26,759
Speaker 2: Don't forget to check out our podcast. You can find

841
00:42:26,800 --> 00:42:28,120
Speaker 2: it on the terminal as well as online on

842
00:42:28,120 --> 00:42:31,840
Speaker 3: Apple, Spotify, and iHeart From New York, this is Bloomberg

843
00:42:31,880 --> 00:42:32,080
Speaker 3: Tech