WEBVTT - New Deal Brings Anthropic's Claude to Databricks, Amazon's Allure Among Mag 7 0:00:02.480 --> 0:00:08.880 Bloomberg Audio Studios, podcasts, radio news from the heart of 0:00:08.960 --> 0:00:14.680 where innovation, money and power collide in Silicon Valley and beyond. 0:00:15.120 --> 0:00:19.439 This is Bloomberg Technology with Caroline Hyde and Ed. 0:00:19.480 --> 0:00:35.000 Ludlow live from New York. 0:00:35.040 --> 0:00:37.200 I'm Caroline Hyde, and this is Bloomberg Technology. 0:00:37.440 --> 0:00:37.879 Coming up. 0:00:37.920 --> 0:00:40.920 The Magnificent seven is in the reader sell off in 0:00:40.960 --> 0:00:44.320 tech megacaps as Trump's trade war is still on the horizon. 0:00:44.560 --> 0:00:47.440 Plus an exclusive conversation with the CEOs of Anthropic and 0:00:47.479 --> 0:00:49.839 Data Bricks, who are out with a new partnership to 0:00:49.840 --> 0:00:53.760 bring claud models to the enterprise and advertisers return to 0:00:54.040 --> 0:00:56.280 X with the platform Projector to post a jump in 0:00:56.400 --> 0:00:57.800 advertising sales. 0:00:57.600 --> 0:00:58.840 That's according to new research. 0:00:59.040 --> 0:01:01.640 Will bring you those X exclusive numbers later this hour, 0:01:01.680 --> 0:01:03.880 but first we check in on a market that is 0:01:03.920 --> 0:01:06.080 sinking once again. Then as that one hundred off by 0:01:06.160 --> 0:01:08.800 nine tenths of a percent, but we're seeing the Magnificent 0:01:08.920 --> 0:01:10.759 seven all training lower and. 0:01:10.640 --> 0:01:12.120 By some significant numbers. 0:01:12.360 --> 0:01:14.440 Move on and have a look at what's underneath the 0:01:14.440 --> 0:01:16.520 herd as we still try to digest what happens in 0:01:16.600 --> 0:01:20.280 terms of tariffs and ultimately what valuations should be at 0:01:20.280 --> 0:01:22.600 for big tech. We're off by three point six percent 0:01:22.680 --> 0:01:24.160 again for Tesla. 0:01:24.440 --> 0:01:25.959 This is as we see the downwards of. 0:01:25.959 --> 0:01:29.759 Directory continue after the European numbers bone ill for the company. 0:01:29.920 --> 0:01:32.480 We're looking at fundamentals that continue to get under pressure, 0:01:32.480 --> 0:01:34.039 and indeed in videos. 0:01:33.720 --> 0:01:35.840 Off by four percent. We're seeing all the points. 0:01:35.640 --> 0:01:38.080 Drags from mag seven. I shine like what's happening with ARM. 0:01:38.120 --> 0:01:40.280 We'll get to that in a moment. But the legal 0:01:40.400 --> 0:01:42.479 tip for tats are going on with qual Common ARM 0:01:42.680 --> 0:01:44.959 and I'm looking at Amazon off by one point four percent. 0:01:45.280 --> 0:01:47.560 Maybe the one that's starting to look like is more 0:01:47.640 --> 0:01:50.160 juicy from a valuation perspective, Let's get to it with 0:01:50.240 --> 0:01:53.760 Ryan Valastelica, who is with us, and this is another 0:01:53.880 --> 0:01:57.240 day of stress on the valuations of the Magnificent seven. 0:01:57.760 --> 0:01:59.360 Let's just go to in video and some of the 0:01:59.480 --> 0:02:02.080 reasons we're seeing the sell off from a macro perspective, 0:02:02.320 --> 0:02:03.480 Is this about the economy? 0:02:05.000 --> 0:02:05.240 Yes? 0:02:05.360 --> 0:02:07.640 Broadly speaking, yes, I would say that is the case. 0:02:07.640 --> 0:02:10.919 There's a still a lot of uncertainty about tariff policy, 0:02:11.200 --> 0:02:14.880 about the implications for overall economic growth, the outlook for 0:02:14.919 --> 0:02:17.640 the consumer, the outlook for businesses. We are seeing signs 0:02:17.639 --> 0:02:20.560 of businesses or maybe pulling back on investments is because 0:02:20.560 --> 0:02:22.880 they are not sure what the tariff situation is going 0:02:22.919 --> 0:02:25.000 to be, what the economic outlook is going to be. 0:02:25.320 --> 0:02:28.120 All that kind of frozen activity, all that uncertainty is 0:02:28.240 --> 0:02:30.880 really just causing people to take some profits if they 0:02:30.880 --> 0:02:32.720 still have them, and just you know, kind of take 0:02:32.720 --> 0:02:33.919 a pause and step back. 0:02:34.480 --> 0:02:37.040 But when you step back, you start to look at 0:02:37.080 --> 0:02:39.240 the valuations, You look at the fundamentals, and you've done 0:02:39.280 --> 0:02:42.760 exactly that. For example, Amazon not been trading at these 0:02:42.800 --> 0:02:46.600 sorts of price to future earnings levels in years. 0:02:47.760 --> 0:02:49.359 Yeah, so some of these names, you know, at the 0:02:49.360 --> 0:02:51.200 start of the year, there were a lot of concerns 0:02:51.200 --> 0:02:54.040 about valuations. Those concerns are a lot smaller now just 0:02:54.040 --> 0:02:56.080 given how much some of these names have come down. 0:02:56.360 --> 0:02:59.040 So in the case of Amazon, they have pretty strong 0:02:59.120 --> 0:03:02.240 earnings growth. They've been really focusing on efficiency and cost 0:03:02.240 --> 0:03:05.000 cutting things that are really improving their profitability. That is 0:03:05.040 --> 0:03:08.160 really driving the multiple down. The multiples about half of 0:03:08.200 --> 0:03:10.400 what it was over the longer term. It is cheaper 0:03:10.400 --> 0:03:13.040 than Apple now, and just a few years ago Apple 0:03:13.160 --> 0:03:15.880 was several times cheaper than Amazon. So is quite the 0:03:16.080 --> 0:03:19.320 flip in narrative when it comes to tech valuations. Amazon 0:03:19.360 --> 0:03:22.359 is cheaper than other retail names like Walmart and Costco. 0:03:22.480 --> 0:03:25.040 It's a stock that, you know, given people continue to 0:03:25.080 --> 0:03:28.720 have pretty optimistic views about its long term growth potential 0:03:28.760 --> 0:03:30.880 the multiple here, it wouldn't surprise me if you start 0:03:30.919 --> 0:03:33.120 seeing people look at a name like this, say, to 0:03:33.160 --> 0:03:35.960 really come off its lows. The fundamentals look pretty intact. 0:03:36.000 --> 0:03:38.480 Still a lot of you know, earning's growth potential and 0:03:38.520 --> 0:03:41.840 revenue growth potential ahead even in a rockier economic climate. 0:03:42.200 --> 0:03:43.720 Maybe that's why they start taking a look at a 0:03:43.760 --> 0:03:44.280 stock like this. 0:03:45.080 --> 0:03:47.000 But who is taking a look at a stock like this? 0:03:47.160 --> 0:03:47.320 Ryan? 0:03:47.440 --> 0:03:49.960 You get so much inbound and response to your stories. 0:03:50.000 --> 0:03:52.120 Are people starting to want to catch what seems like 0:03:52.120 --> 0:03:52.800 a falling life? 0:03:54.560 --> 0:03:56.600 You know, that's something I've heard, the falling knife thing. 0:03:57.000 --> 0:03:58.960 I do think people still feel like these are pretty 0:03:59.000 --> 0:04:03.360 safe companies. Isn't broken even if some of the arrogance 0:04:03.440 --> 0:04:05.720 let out, even the multiples come down a little bit more. 0:04:05.760 --> 0:04:07.840 I don't think people are really concerned about the long 0:04:07.920 --> 0:04:10.920 term prospects of these companies. There can still consider to 0:04:10.960 --> 0:04:13.720 be very dominant in their field, and even if we 0:04:13.720 --> 0:04:16.280 see a weaker economic outlook, it wouldn't surprise me if 0:04:16.320 --> 0:04:19.640 we saw Amazon, for example, maybe consolidate its market share, 0:04:19.720 --> 0:04:23.839 especially in online retail or retail. Overall, cloud business remains 0:04:23.960 --> 0:04:26.360 very strong and has an AD business that's growing a lot. 0:04:26.360 --> 0:04:28.839 There's certainly a lot of positives you can point to here, 0:04:29.120 --> 0:04:30.920 even if we see a lot more volatility in the 0:04:30.960 --> 0:04:31.600 short term. 0:04:32.160 --> 0:04:35.680 Ran Rasselica, we thank you from a macro perspective across 0:04:35.720 --> 0:04:38.560 Magnificent seven. Meanwhile, just take a look at ARM and 0:04:38.640 --> 0:04:41.440 coal Comb once again. Now this is as Arms trading 0:04:41.480 --> 0:04:45.480 significantly lower today. As you can Seequalcomb, as is being reported, 0:04:45.520 --> 0:04:49.960 has begun a global antitrust campaign against the chip designer, 0:04:50.120 --> 0:04:53.839 alleging in private meetings that ARM is guilty of anti 0:04:53.839 --> 0:04:57.000 competitive behavior. So all according to sources, and we want 0:04:57.040 --> 0:04:59.880 to get the analysis of all of this in Mandy 0:05:00.080 --> 0:05:03.400 saying from Bloembag Intelligence, and for me it immediately becomes 0:05:03.400 --> 0:05:04.080 a question. 0:05:03.880 --> 0:05:05.280 Of just what a distraction this is. 0:05:05.480 --> 0:05:09.440 But ultimately this is Qualcom coming out and feeling and 0:05:09.560 --> 0:05:14.440 stating that ARM is getting competitive with them and therefore 0:05:14.640 --> 0:05:17.760 stopping access to their technology, to their designs. 0:05:18.520 --> 0:05:21.200 Yeah, and especially when it comes from one of your 0:05:21.279 --> 0:05:23.719 top two customers in the case of ARM, you know, 0:05:23.880 --> 0:05:27.640 Qualcom is a top two customer. It's never easy. So look, 0:05:27.800 --> 0:05:31.240 ARM did bring a lawsuit back in twenty twenty four, 0:05:31.320 --> 0:05:35.719 which they ended up losing against Qualcomm, and to me, 0:05:35.839 --> 0:05:40.080 it reminds me, you know what Qualcom faced against Apple. 0:05:40.560 --> 0:05:43.400 I mean, I remember twenty seven to twenty nineteen they 0:05:43.400 --> 0:05:46.160 had the back and forth where Apple was using Qualcom 0:05:46.200 --> 0:05:51.120 technology and Qualcomm didn't go you know, anywhere with sort 0:05:51.160 --> 0:05:55.240 of getting more royalties from Apple. So I think ARM 0:05:55.400 --> 0:05:58.400 is in a weak position here given you know, I mean, 0:05:58.480 --> 0:06:01.520 Qualcom is using all the IP that ARM has to 0:06:01.600 --> 0:06:04.440 offer and paying for it. And you know, granted they 0:06:04.480 --> 0:06:07.320 made that acquisition of Nuilla, but at the end of 0:06:07.360 --> 0:06:10.839 the day, they're still using ARMS instruction sets and it's 0:06:10.880 --> 0:06:14.120 hard to really prove that, you know, Qualcomm is doing 0:06:14.160 --> 0:06:17.000 anything wrong. So I'm not surprised that they are going 0:06:17.040 --> 0:06:20.719 all in with this centi trust campaign, but I think 0:06:20.800 --> 0:06:22.000 ARM is in a weaker. 0:06:21.720 --> 0:06:26.440 Position coming complaints to the European Commission. We understand the 0:06:26.480 --> 0:06:29.280 sec in the US Career Fair Trade Commission, Man Deed, 0:06:29.560 --> 0:06:31.520 I just want to get the perspective of the companies. 0:06:31.560 --> 0:06:34.800 Qualcombs declined to comment. Suppose people from this regulators also 0:06:34.839 --> 0:06:37.760 declining arms, saying it's confident it will prevail. 0:06:38.279 --> 0:06:40.800 But I go to the distruction perspective here. 0:06:40.920 --> 0:06:44.960 Because they say they remain focused on enhancing innovation. Does 0:06:45.480 --> 0:06:49.520 innovation generally dip when companies are locked in what might. 0:06:49.400 --> 0:06:53.039 Be a year long, years long legal disputes. 0:06:54.240 --> 0:06:57.880 Yeah, and especially you know with the AI market moving 0:06:57.920 --> 0:07:01.039 so fast with inferencing. I mean everyone is trying to 0:07:01.040 --> 0:07:03.479 come up with new designs in terms of how to 0:07:03.520 --> 0:07:06.760 do infencing faster. So you're right, it is a distraction. 0:07:06.839 --> 0:07:10.360 And in the case of Qualcomm, they have expressed interest 0:07:10.400 --> 0:07:12.760 and even Intel. I mean granted Intel has a new 0:07:12.800 --> 0:07:14.880 CEO now and we don't know what they will end 0:07:14.960 --> 0:07:18.560 up doing with the overall business, but clearly Qualcomm has 0:07:18.640 --> 0:07:22.200 ambitions on the CPU side, and really they want to 0:07:22.200 --> 0:07:25.520 do much more with the infance in hip beyond smartphones. 0:07:25.600 --> 0:07:28.880 So to your point about distraction, I mean all the 0:07:28.920 --> 0:07:33.400 back and courts and the lawsuits do seem like a distraction. 0:07:33.440 --> 0:07:37.000 Many people wanting to go beyond the smartphone in this environment. 0:07:36.600 --> 0:07:39.960 Man Deep saying thanks for joining us. Coming up, we're. 0:07:39.800 --> 0:07:42.080 Here from the CEOs of Anthropic and Data Bricks on 0:07:42.160 --> 0:07:46.200 their brand new partnership aipolicies under the Trump administration and 0:07:46.360 --> 0:08:00.200 so much more. This is brume meg Technology, dat to 0:08:00.200 --> 0:08:03.000 Bricks and Anthropic just announced a five year partnership to 0:08:03.000 --> 0:08:06.560 offer anthropic models and services on data bricks. Basically, it's 0:08:06.560 --> 0:08:10.440 bringing Anthropics Claude models directly to ten thousand companies. Tim 0:08:10.440 --> 0:08:13.680 Centevic sat down when the Anthropic CEO Dario Mmoda and 0:08:13.800 --> 0:08:15.160 Data Bricks CEO Ali. 0:08:15.000 --> 0:08:17.960 Gotzi to discuss what this means for their customers. 0:08:20.200 --> 0:08:22.720 What it really means is that you can use securely 0:08:22.920 --> 0:08:26.880 Anthropic inside data bricks. You can get all that intelligence, 0:08:26.960 --> 0:08:31.440 especially all the programmability these models. Claud are really good 0:08:31.480 --> 0:08:33.760 at programming, and you can use that for data science 0:08:33.880 --> 0:08:35.880 and you can use it together with all the data 0:08:35.920 --> 0:08:39.280 that we have. So enterprises have been storing their data 0:08:39.320 --> 0:08:42.480 with data bricks for the last decade. How do you 0:08:42.480 --> 0:08:45.360 build AI that can reason on that data. So we're 0:08:45.400 --> 0:08:48.880 super excited to bring those llms and that data together 0:08:48.960 --> 0:08:49.719 in the partnership. 0:08:49.920 --> 0:08:51.920 Daria, we know what all is getting out of it, 0:08:52.520 --> 0:08:53.880 what are you getting out of it? 0:08:54.400 --> 0:08:56.760 So we're really excited to bring Claude to a wide 0:08:56.880 --> 0:09:02.800 range of enterprise customers. Claud Claud models are growing very fast. 0:09:03.720 --> 0:09:07.240 Models are you know, the API revenue is growing growing 0:09:07.280 --> 0:09:09.400 at something like a twenty x annualized rate. 0:09:10.960 --> 0:09:11.840 But we want to make. 0:09:11.760 --> 0:09:14.839 Sure that our models can meet all the requirements that 0:09:15.000 --> 0:09:18.320 complex enterprise customers have. Uh and we can do this 0:09:18.400 --> 0:09:20.640 with the help of data bricks, as Olie was saying, 0:09:21.000 --> 0:09:23.480 we can take our models, which are the world best 0:09:23.559 --> 0:09:28.200 for coding and many other tasks, and use use data 0:09:28.200 --> 0:09:32.400 bricks as tools to operate on the customer data and 0:09:32.520 --> 0:09:35.840 we can work together to secure that customer data and 0:09:35.880 --> 0:09:38.440 you know, make sure that customers can be assured that 0:09:38.480 --> 0:09:42.600 they get the proper security experience. Both companies value things 0:09:42.640 --> 0:09:47.120 like safety, security, privacy, things that enterprise customers greatly value. 0:09:47.160 --> 0:09:50.040 Where's the fastest area of growth for you? You know, 0:09:50.120 --> 0:09:52.360 I think I think, by far and away, the fastest 0:09:52.840 --> 0:09:57.240 area of growth is code. Claud models are better than 0:09:57.280 --> 0:10:00.280 anything out there by wide margin in terms terms of 0:10:00.280 --> 0:10:03.520 how they code. We power a large number of players 0:10:03.520 --> 0:10:09.760 in the space, including Cursor, Codium, Cognition, GitHub, Copilot, First Sell, 0:10:10.600 --> 0:10:13.480 source Graph, many many others that I'm that I'm not 0:10:13.960 --> 0:10:16.880 even mentioning, and we're starting to build an ecosystem around 0:10:17.160 --> 0:10:19.920 this area. Now, all that said, we also have partners 0:10:19.920 --> 0:10:23.720 in many other areas. We have partners in the financial space, 0:10:23.800 --> 0:10:28.200 we have partners in the biomedical and scientific research space. 0:10:28.559 --> 0:10:29.120 We work with. 0:10:29.080 --> 0:10:32.040 Companies in the legal and productivity space. So it's it's 0:10:32.040 --> 0:10:35.280 pretty broadly spread. But among those areas, I think Code 0:10:35.320 --> 0:10:38.160 has by far been, you know, growing the fastest. 0:10:38.400 --> 0:10:42.240 I'm curious about your each of your views on the 0:10:42.280 --> 0:10:45.320 administration and what we've seen thus far out of Washington 0:10:45.320 --> 0:10:48.520 and David Sachs he's crypto and AI zre Ollie, what 0:10:48.559 --> 0:10:49.920 does he mean for your business? 0:10:50.640 --> 0:10:51.400 I think it's great that. 0:10:51.320 --> 0:10:54.280 We have people that actually understand the tech that are 0:10:54.400 --> 0:10:57.760 in the government. I think it's early days, so you know, 0:10:57.800 --> 0:11:00.680 we're working together to figure out what's the best way 0:11:00.760 --> 0:11:01.920 to bring value to our customers. 0:11:01.920 --> 0:11:04.079 How are you working together? Are you in touch with them? 0:11:04.960 --> 0:11:07.040 Yeah, I mean we've we've uh, you know, we've given 0:11:07.040 --> 0:11:09.600 our feedback on you know, AI policy and other things 0:11:09.640 --> 0:11:11.640 and their requests of that. And I think the government's 0:11:11.720 --> 0:11:14.000 requested broadly from the industry. 0:11:14.480 --> 0:11:16.800 So we're excited. Daria, What about you. Are you in 0:11:16.800 --> 0:11:17.760 touch with the administration. 0:11:17.960 --> 0:11:20.240 Yeah, we're we're you know, we're in touch with this administration. 0:11:20.400 --> 0:11:22.439 Just like we've been in touch with the last administration 0:11:22.520 --> 0:11:24.720 as well. You know, the thing I like to say is, 0:11:25.080 --> 0:11:28.760 you know, you know, AI has big impact, big implications 0:11:28.760 --> 0:11:31.440 for society. So it's very important for anthropic to be 0:11:31.480 --> 0:11:34.200 about the policy and not about the politics. So we 0:11:34.240 --> 0:11:37.600 don't care which you know, you know, regardless of which 0:11:37.640 --> 0:11:40.880 administration is in office at the present time. We have 0:11:40.920 --> 0:11:42.600 a we have a set of things that we think 0:11:42.640 --> 0:11:44.840 it's it's good to do, you know, good to do 0:11:44.920 --> 0:11:47.560 in AI policy. And you know, we've told the same 0:11:47.640 --> 0:11:49.839 thing to the Trump administration that we've told to the 0:11:49.840 --> 0:11:52.840 Biden administration. We have folks that we've we've we've talked 0:11:52.880 --> 0:11:55.600 to in this administration just like the last administration, and 0:11:55.640 --> 0:11:59.520 we've delivered exactly the same message both times. We aim 0:11:59.600 --> 0:12:02.959 to be assistant, we aim to be non partisan and 0:12:03.520 --> 0:12:07.000 offer our view of how to make the industry go best. 0:12:07.080 --> 0:12:10.520 What is the US government's role? Well, what what should 0:12:10.559 --> 0:12:12.400 the US government's role be in your view? 0:12:12.480 --> 0:12:15.160 Yeah, So we laid this out in our RFI submitted 0:12:15.200 --> 0:12:17.360 to to the OSTP that I think that was a 0:12:17.360 --> 0:12:20.600 couple a couple of weeks ago. But you know, things 0:12:20.600 --> 0:12:23.400 that we've emphasized include I won't get the complete list here, 0:12:23.400 --> 0:12:27.920 but include export controls on chips to China, testing of 0:12:28.000 --> 0:12:31.319 models for national security risks such as bio or or 0:12:31.880 --> 0:12:34.560 or cyber risks. The government should have a role in 0:12:34.600 --> 0:12:38.120 provisioning as much as much energy as possible. The government 0:12:38.120 --> 0:12:41.560 should help to secure AI labs. We're very concerned about security. 0:12:41.600 --> 0:12:44.000 We talked a lot about security, you know, as part 0:12:44.000 --> 0:12:47.080 of this partnership. But another kind of security is you know, 0:12:47.120 --> 0:12:51.480 we're worried about our our models and our technology being stolen. 0:12:51.559 --> 0:12:53.320 So those are those are a few of the areas 0:12:53.360 --> 0:12:55.160 where I think the government can have a constructive role. 0:12:55.679 --> 0:12:59.559 Anthropic CEO Dario Amada and Data back CEO Ali Gotzi 0:13:00.120 --> 0:13:02.240 with our very owned tim Sthenomic and look, let's stick 0:13:02.280 --> 0:13:04.280 with global competition around AI models. 0:13:04.360 --> 0:13:06.120 It is top of mind for US. 0:13:06.040 --> 0:13:09.040 Tech companies because ever since deep Seat launch, the Chinese 0:13:09.080 --> 0:13:13.079 tech industry has been flooding the world with more AI models. 0:13:13.440 --> 0:13:16.280 Nu Mergs Peter Elstrom joins us for more and beta. 0:13:16.480 --> 0:13:18.880 It feels like every day there is yet a new 0:13:18.960 --> 0:13:21.960 update or a new release coming from deep Seak and 0:13:22.040 --> 0:13:22.880 so many others. 0:13:22.960 --> 0:13:24.200 Is that the cadence we're getting? 0:13:25.440 --> 0:13:28.480 Yeah, I think you're pretty much exactly right. It has 0:13:28.520 --> 0:13:31.199 been almost every day that we've been seeing these new 0:13:31.640 --> 0:13:35.320 AI services and models that have been introduced from Chinese companies. 0:13:36.679 --> 0:13:38.840 We count at least ten of them over the past 0:13:38.880 --> 0:13:41.400 two weeks, and those are really just the major companies. 0:13:41.440 --> 0:13:43.840 This is Baidu and Ali, Baba and ten Cent. At 0:13:44.040 --> 0:13:47.880 Anc Group also came out with some AI breakthroughs, and 0:13:48.000 --> 0:13:49.640 really what they're doing is they're putting a lot of 0:13:49.679 --> 0:13:53.160 pressure on the profit models that we're seeing in Silicon Valley, 0:13:53.160 --> 0:13:57.120 where they're providing open source AI services that people can 0:13:57.280 --> 0:14:00.240 use and modify and incorporate into their technology to be 0:14:00.240 --> 0:14:03.040 able to use all of the know how the AI 0:14:03.120 --> 0:14:05.320 models without paying some of the prices that you would 0:14:05.360 --> 0:14:07.720 have to pay if you went to more premium models 0:14:07.800 --> 0:14:11.079 like open AI, like Google in particular. So they're putting 0:14:11.120 --> 0:14:14.679 some downward pressure on those companies. In particular, they've been 0:14:14.720 --> 0:14:17.440 mostly focused on the China market so far, but they 0:14:17.520 --> 0:14:19.840 certainly have global ambitions and we'll see how far they 0:14:19.840 --> 0:14:20.160 take that. 0:14:21.120 --> 0:14:23.520 Ultimately, it feels as though this is a rerun of 0:14:23.520 --> 0:14:25.880 what if we've seen in plenty of industries. You think 0:14:25.920 --> 0:14:29.240 of China and evs, you think China of solar. They've 0:14:29.320 --> 0:14:31.680 driven down the costs. 0:14:31.200 --> 0:14:31.840 And the prices. 0:14:31.840 --> 0:14:33.720 But what does this mean. What's the implication through a 0:14:33.800 --> 0:14:34.600 US competitor. 0:14:34.720 --> 0:14:36.560 Is it a bad thing? Got to be good for customers? 0:14:36.600 --> 0:14:39.280 Yeah, those are very interesting parallels if you look at 0:14:39.320 --> 0:14:41.720 evs or you look at solar panels. Certainly there are 0:14:41.760 --> 0:14:46.120 some negative implications for other countries around the world. It's 0:14:46.120 --> 0:14:48.120 not exactly clear how this is going to play out though. 0:14:48.160 --> 0:14:50.720 At this point they are driving down profits in certain 0:14:50.800 --> 0:14:53.760 areas of the AI industry, but they're probably shifting the 0:14:53.800 --> 0:14:57.680 competition to other areas like execution. Who can actually build 0:14:57.680 --> 0:15:00.920 the services to connect some of that AI AI know 0:15:01.040 --> 0:15:04.200 how with the corporate needs for example, or consumer needs. 0:15:04.440 --> 0:15:06.280 And you're going to see a lot of innovation, certainly 0:15:06.280 --> 0:15:09.280 out of Silicon Valley and the companies that we were 0:15:09.360 --> 0:15:11.960 just talking about, and also out of China. Overall, it's 0:15:11.960 --> 0:15:15.400 probably good for the AI market. You get rapid commercialization 0:15:15.480 --> 0:15:17.880 of these services, you get lower prices, you get some 0:15:18.200 --> 0:15:21.200 robust competition, and that will probably lead to more innovation 0:15:21.320 --> 0:15:22.160 down the line. 0:15:22.360 --> 0:15:25.120 And certainly Apple CEO Tim Cook been going to that 0:15:25.160 --> 0:15:29.080 home of innovation of late at Hanzu Blomberg's Peter Elstrom, 0:15:29.120 --> 0:15:34.360 we thank you so much all things China. 0:15:38.400 --> 0:15:39.880 It's time now for talking tech. 0:15:40.000 --> 0:15:43.440 First up, Google's Gemini gets an upgrade. The company's released 0:15:43.560 --> 0:15:46.240 version two point five of its AI model that it 0:15:46.240 --> 0:15:49.240 says is capable of reasoning before responding and resulting in 0:15:49.280 --> 0:15:52.000 better performance and accuracy, and the latest model. 0:15:51.760 --> 0:15:55.800 Is available to use Google's Ai studio and Gemini app us. 0:15:55.840 --> 0:15:58.720 Open Ai is now making is simpler to edit images 0:15:58.760 --> 0:16:02.080 in chat ChiPT livestream. On Tuesday, the company showed how 0:16:02.200 --> 0:16:05.400 users could now refine images in CHATCHYBT with a series 0:16:05.440 --> 0:16:08.160 of conversations. Now, according to open Ai, the program will 0:16:08.200 --> 0:16:10.800 now also be able to better create diagrams in for 0:16:10.880 --> 0:16:15.800 graphics and logos for professional use. Meanwhile, Elon Musk's Grog 0:16:16.040 --> 0:16:19.440 is making political ways in India. The AI chatbot that 0:16:19.520 --> 0:16:23.360 must described as maximumly truth seeking, has made some controversial 0:16:23.400 --> 0:16:27.200 responses around Indian politics, including criticizing Prime Minister and Arrando 0:16:27.240 --> 0:16:31.160 Modi and praising opposition leader Rahul Gandhi. Groc's replies is 0:16:31.240 --> 0:16:34.320 said to have sparked a political firestorm within the Indian 0:16:34.360 --> 0:16:37.600 government as they take a look at making action against 0:16:37.640 --> 0:16:41.080 users who prompt for those responses, Let's just stick with 0:16:41.160 --> 0:16:44.240 Elon Musk because for the first time since the billionaire 0:16:44.280 --> 0:16:47.520 acquired X, where Grok is the social media platform is 0:16:47.560 --> 0:16:50.600 on pace to see advertising revenue grow. That's according to 0:16:50.640 --> 0:16:53.520 research firm e Marketer. Jasmin Embergs with US vice president 0:16:53.520 --> 0:16:56.160 and principal analysts for e Marketer, and you've brought us 0:16:56.200 --> 0:16:59.720 this research exclusively, Jasmine, where did the data come from? 0:16:59.720 --> 0:17:01.240 How you tracking this increase? 0:17:02.640 --> 0:17:05.879 But the data is from our proprietary forecast here at eMarketer, 0:17:06.080 --> 0:17:09.199 and we have a multi source methodology where we have 0:17:09.240 --> 0:17:13.160 a team of forecasters that regularly goes through a variety 0:17:13.240 --> 0:17:17.240 of different sources from third party research firms to interviews 0:17:17.240 --> 0:17:21.480 with advertisers and looks at broader macroeconomic and digital advertising 0:17:21.520 --> 0:17:23.960 trends to put together these forecasts. 0:17:24.720 --> 0:17:26.880 The drivers of growth there forward. 0:17:26.960 --> 0:17:29.600 Those advertisers that are returning, are they coming back with 0:17:29.640 --> 0:17:31.600 a feeling of joy and desire to spend or is 0:17:31.600 --> 0:17:32.680 there something else going on here? 0:17:33.720 --> 0:17:35.840 Look first, I would say that this is a recovery, 0:17:36.080 --> 0:17:39.320 not a rebound. Even with the growth that we are projecting, 0:17:39.920 --> 0:17:42.520 X's ad business in twenty twenty five is still going 0:17:42.520 --> 0:17:45.280 to be smaller than Twitter's ad business was back in 0:17:45.320 --> 0:17:48.800 twenty nineteen, and to your question, some of this growth 0:17:48.880 --> 0:17:52.000 is actually being driven by fear. There are plenty of 0:17:52.040 --> 0:17:56.480 advertisers out there now who see spending on xcess kind 0:17:56.480 --> 0:17:59.640 of a cost of doing business in order to mitigate 0:17:59.680 --> 0:18:04.520 any potential legal or financial repercussions. The problem, of course, 0:18:04.680 --> 0:18:08.480 is that fear is not a sustainable motivator. Luckily, for 0:18:08.760 --> 0:18:12.000 x it's not just fear that's driving this growth. It 0:18:12.040 --> 0:18:15.720 has also been able to secure a new base of advertisers, 0:18:15.760 --> 0:18:19.400 including small and medium sized businesses, which is something that 0:18:19.520 --> 0:18:23.080 Twitter historically struggled with. The problem there is that these 0:18:23.119 --> 0:18:26.440 advertisers have less money to spend, and so while they're 0:18:26.440 --> 0:18:29.480 helping to prop up the growth, we're still not seeing 0:18:29.520 --> 0:18:32.359 spending levels reach the same heights as they were prior 0:18:32.440 --> 0:18:33.440 to musks takeover. 0:18:33.840 --> 0:18:35.240 Okay, so take us back to you. 0:18:35.359 --> 0:18:38.240 Put the two and a quarter billion dollars basically expected 0:18:38.280 --> 0:18:42.520 for twenty twenty five, what is that versus pre forty 0:18:42.840 --> 0:18:46.520 billion dollar acquisition by Elon and where does it go 0:18:46.600 --> 0:18:47.000 from there? 0:18:48.400 --> 0:18:51.520 So it's smaller than it was in twenty nineteen, And 0:18:51.760 --> 0:18:55.240 of course Twitter saw very strong growth like other social 0:18:55.240 --> 0:18:59.200 ad businesses during the pandemic, which means that pretty much 0:18:59.240 --> 0:19:01.200 all of that growth that it gained is lost. 0:19:01.480 --> 0:19:03.080 We're still expecting. 0:19:02.560 --> 0:19:05.359 The ad business to continue growing in twenty twenty six 0:19:05.400 --> 0:19:07.879 and twenty twenty seven, which is the end of our forecast, 0:19:08.119 --> 0:19:11.080 but of course we have less visibility into those years 0:19:11.119 --> 0:19:14.960 because the situation is still incredibly volatile. There's still a 0:19:15.000 --> 0:19:19.160 lot of concerns about brand safety among advertisers, and as 0:19:19.200 --> 0:19:23.320 those attitudes continue to evolve, we could see shifts in spending. 0:19:23.640 --> 0:19:28.200 Of course, there's also the economic uncertainty that's impacting advertising budgets, 0:19:28.480 --> 0:19:30.919 as well as the uncertainty at TikTok, so there's a 0:19:30.960 --> 0:19:34.200 lot of different moving parts that could change how advertisers 0:19:34.240 --> 0:19:35.360 spend their budgets. 0:19:36.040 --> 0:19:39.040 When you talk of the advertisers who are coming back, 0:19:39.119 --> 0:19:42.520 whether it's through feral or a desire to access new products, 0:19:43.400 --> 0:19:46.440 have the main ones that took on air on comeback 0:19:46.480 --> 0:19:47.960 as Disney comeback, for example. 0:19:49.080 --> 0:19:50.960 We don't have an exact list of all of the 0:19:51.040 --> 0:19:53.920 advertisers that have returned. What we do know is that 0:19:53.960 --> 0:19:56.720 many of the big tech advertisers have returned. There was 0:19:56.760 --> 0:19:59.600 also reports that Apple, for example, which was once a 0:19:59.640 --> 0:20:03.720 target of musks has returned, but there's plenty of evidence 0:20:03.760 --> 0:20:07.760 to show that many of these companies are returning to spend, 0:20:07.840 --> 0:20:10.520 though again not at the same levels as previously. 0:20:10.920 --> 0:20:12.800 I like how you brought in TikTok there as well. 0:20:12.840 --> 0:20:15.520 We're all waiting as to what April the fifth really brings. 0:20:15.520 --> 0:20:18.160 But would X benefit. 0:20:17.960 --> 0:20:20.080 From TikTok being taken off the scene. It feels like 0:20:20.080 --> 0:20:22.639