WEBVTT - Musk's Pay Package Goes Through and Adobe Shares Surge 0:00:01.600 --> 0:00:05.280 From the heart where innovation, money and power Collie in 0:00:05.400 --> 0:00:10.320 Silicon Valley, Nbon. This is Bloomberg Technology with Caroline Hyde 0:00:10.360 --> 0:00:34.400 and Ed Ludlow. 0:00:24.880 --> 0:00:27.600 And Karine Hyde at Bloomgg's Worlds headquarters in New York, Man. 0:00:27.600 --> 0:00:31.720 I'm Tim Stanevek in for Ed Ludlow. This is Bloomberg Technology. 0:00:31.280 --> 0:00:34.440 Coming up full reaction to Tesla's shareholder meeting as the 0:00:34.479 --> 0:00:37.680 majority do back Musk's fifty six billion dollar pay package. 0:00:37.800 --> 0:00:40.600 Well, it's Adobe share surging on the company's sales out look, 0:00:40.640 --> 0:00:42.320 how is AI driving demand? 0:00:42.640 --> 0:00:44.880 And we head to the G seven meeting in Italy 0:00:45.159 --> 0:00:49.000 as the Pope one's on artificial intelligence. But first let's 0:00:49.080 --> 0:00:51.400 checking on these markets. And it's a day where some 0:00:51.720 --> 0:00:53.880 lackluster economic data here in the US when it comes 0:00:53.880 --> 0:00:57.120 to consumer sentiment really dials in and wratchets up some 0:00:57.200 --> 0:00:59.760 of the risk on risk off concerns that we've got 0:01:00.040 --> 0:01:02.200 happening in Europe at the moment as we worry about 0:01:02.320 --> 0:01:05.600 the French political situation. Now as that flat we're holding 0:01:05.640 --> 0:01:08.240 up relatively well, just down by some three points. The 0:01:08.319 --> 0:01:10.080 S and P five hundred and fared a little bit worse, 0:01:10.160 --> 0:01:12.720 and we're seeing the cat forty absolutely slump at the moment. 0:01:12.760 --> 0:01:15.039 I'm a shame there can't bring you a percentage number 0:01:15.040 --> 0:01:16.640 on it. But in fact, we've wiped out about two 0:01:16.720 --> 0:01:19.720 hundred billion dollars worth of market capitalization throughout the week 0:01:19.760 --> 0:01:23.400 in France. That's basically the size of the Greek economy 0:01:23.560 --> 0:01:26.280 all gone. Why because we are worrying about the political 0:01:26.280 --> 0:01:28.639 situation about Macron, about what that might mean for France 0:01:28.640 --> 0:01:31.639 even in the EU. A lot being dissected in Europe 0:01:31.680 --> 0:01:34.360 at the moment, and indeed in the tic situation there too. 0:01:34.360 --> 0:01:36.560 I'm looking at euro just off by five tens of 0:01:36.600 --> 0:01:38.399 percent almost. Let's move on and have a look what's 0:01:38.400 --> 0:01:41.120 happening in the cryptosphere though, because look, it's not risk 0:01:41.160 --> 0:01:43.479 off everywhere, and actually we're seeing Bitcoin managing to steady 0:01:43.480 --> 0:01:46.319 at about four tens percent higher, small moves for a 0:01:46.319 --> 0:01:48.720 relatively volatile asset class, but we're still only at sixty 0:01:49.160 --> 0:01:50.840 nine hundred and thirty seven. Maybe a bit of a 0:01:50.880 --> 0:01:54.880 dial back in what has been never ending money moving 0:01:54.880 --> 0:01:57.240 into some of these ETFs. But tim what are you watching. 0:01:57.360 --> 0:01:59.320 I'm watching shares of Adobe and there is no dial 0:01:59.400 --> 0:02:01.640 back going on it there. Look at the shares having 0:02:01.680 --> 0:02:05.120 their best day going all the way back to twenty twenty. 0:02:05.400 --> 0:02:08.640 This after the company did report earnings after the belt 0:02:08.720 --> 0:02:11.360 yesterday that said that they beat on the top line, 0:02:11.480 --> 0:02:13.920 they beat on the bottom line. They raised their profit 0:02:13.960 --> 0:02:16.520 forecast for the fiscal year as well. But it's this 0:02:16.600 --> 0:02:20.400 one metric that has everybody really excited. Digital Media net 0:02:20.440 --> 0:02:22.959 new annual recurring revenue projections for that part of the 0:02:23.000 --> 0:02:25.720 business did come in above estimates for their current quarter. 0:02:25.919 --> 0:02:28.320 We're going to have much more on Adobe coming up 0:02:28.320 --> 0:02:30.560 a little later in the program, and I do also 0:02:30.600 --> 0:02:32.240 want to check in on what's going on with shares 0:02:32.240 --> 0:02:34.840 of Tesla today because it is the day after that 0:02:34.960 --> 0:02:37.760 shareholder meeting and it is official that fifty six billion 0:02:37.760 --> 0:02:40.959 dollars pay package was approved by shareholders. We also saw 0:02:41.000 --> 0:02:45.600 the company shareholders vote on approving in corporation to the 0:02:45.639 --> 0:02:48.600 state of Texas from Delaware. That move actually already happening 0:02:48.639 --> 0:02:52.320 according to paperwork filed after the meeting. Also some board 0:02:52.360 --> 0:02:55.200 news coming out of the meeting. We saw Elon Musk's 0:02:55.200 --> 0:02:57.720 little brother, Kimball Musk, get reelected to the board James 0:02:57.840 --> 0:03:00.880 Murdoch as well. Still shares of Tech lower on the 0:03:00.960 --> 0:03:03.959 day today and down about twenty eight percent so far 0:03:04.200 --> 0:03:07.280 this year. Well, earlier today we heard from Ark invest 0:03:07.400 --> 0:03:10.200 Tasha Kini on that pay package. 0:03:10.440 --> 0:03:12.399 You have to look at the Tesla results here, right, 0:03:12.760 --> 0:03:14.680 I mean, when you're talking about the pay package, that 0:03:14.800 --> 0:03:17.120 the stock has risen over one thousand percent over that 0:03:17.200 --> 0:03:20.359 time period. So he's really delivered shareholder value. 0:03:20.760 --> 0:03:22.560 And I'm again so excited. 0:03:22.160 --> 0:03:24.560 For the future because we're really on the cusp. 0:03:24.520 --> 0:03:26.000 Of autonomous driving today. 0:03:27.600 --> 0:03:29.880 For more, let's bring in at Bloomberg's mask Chaff guineas 0:03:29.960 --> 0:03:32.840 here in our studios in New York. So Max, I 0:03:32.880 --> 0:03:36.200 want to start with that pay package look largely symbolic. 0:03:36.240 --> 0:03:38.400 We've talked about this a lot over the last couple 0:03:38.480 --> 0:03:41.880 of weeks, but seventy two percent approval, I mean, it's 0:03:42.280 --> 0:03:45.240 showing that Elon Musk has the support of shareholders absolutely. 0:03:45.320 --> 0:03:47.640 We know we've talked about all the challenges, all the 0:03:47.680 --> 0:03:49.839 craziness around Elon Musk, and at the end of the day, 0:03:49.840 --> 0:03:52.600 the difference in this vote versus the one that happened 0:03:52.600 --> 0:03:55.160 in twenty eighteen just one percentage point. 0:03:55.320 --> 0:03:56.559 So it doesn't. 0:03:56.240 --> 0:03:59.880 Appear that Elon Musk has lost some huge constituency of support. 0:04:00.120 --> 0:04:02.920 I do think the conditions have changed to some extent, 0:04:03.000 --> 0:04:06.760 and there are the you know, the reasons for concern remain. 0:04:07.120 --> 0:04:09.600 But certainly this was a victory lab for Elon Musk 0:04:09.640 --> 0:04:10.520 and he acted like it. 0:04:11.200 --> 0:04:13.800 Hot down, I love you guys, is how he jumped 0:04:13.840 --> 0:04:18.120 onto stage, the krescendos of calling out his name. Over All, 0:04:18.440 --> 0:04:20.720 he was being playful throughout the entire event as well. 0:04:20.720 --> 0:04:21.800 He was very on Elon. 0:04:22.080 --> 0:04:25.080 Look, this is a company that has a huge retail 0:04:25.160 --> 0:04:29.200 shareholder base. Elon is a business celebrity, and the annual 0:04:29.200 --> 0:04:32.279 meetings are always sort of rock star affairs. But it 0:04:32.560 --> 0:04:36.400 was maybe a tiny bit looser, and you did feel 0:04:36.440 --> 0:04:39.240 like maybe that there had been some stress building up 0:04:39.279 --> 0:04:43.040 within the company and that was suddenly released yesterday afternoon. 0:04:43.360 --> 0:04:46.479 Okay, relieving of stress. But then he went back to 0:04:46.520 --> 0:04:49.920 the bread and butter that is autonomous, back to robotics. 0:04:49.960 --> 0:04:51.680 I just want to go back to what Tasha Kini 0:04:51.720 --> 0:04:53.320 was saying over at Ark Invested a little bit earlier. 0:04:53.400 --> 0:04:55.040 Let's just listen to what she had to say about FSD. 0:04:56.080 --> 0:04:57.000 I think this could have. 0:04:56.920 --> 0:05:00.440 A very attractive margins, higher margins than the the current 0:05:00.480 --> 0:05:03.480 business model today which is mainly selling vehicles. 0:05:04.480 --> 0:05:05.960 Okay, so is it reality? 0:05:06.160 --> 0:05:07.880 Well, I mean we heard and we heard Elon Musk 0:05:07.920 --> 0:05:10.359 echo this and in fact bring up Arc invest over 0:05:10.400 --> 0:05:12.440 and over again in that presentation. They just put out 0:05:12.440 --> 0:05:15.440 a huge, you know, prediction for their valuation. Elon Musk 0:05:15.520 --> 0:05:16.160 really likes it. 0:05:16.400 --> 0:05:18.440 I think, yeah, I. 0:05:18.400 --> 0:05:21.719 Think there is a question of what is reality. I suppose, 0:05:21.880 --> 0:05:23.680 you know, on one hand, Elon Musk going to say, 0:05:23.760 --> 0:05:26.480 Tesla fans bulls are going to say, we have the 0:05:26.480 --> 0:05:29.880 best driver assistance system on the market, and if you 0:05:30.000 --> 0:05:31.960 just follow the straight line, Elon Musk said this, if 0:05:32.000 --> 0:05:34.159 you just look at the trends towards autonomy, we're going 0:05:34.240 --> 0:05:36.159 to get there. On the other hand, there is no 0:05:36.279 --> 0:05:39.960 robotaxi today and there really is no way to get 0:05:39.960 --> 0:05:43.279 a robotaxi in the way that most people understand that 0:05:43.360 --> 0:05:47.680 word anytime soon. It's going to require massive regulatory overhaul 0:05:48.000 --> 0:05:51.599 and tons of technological breakthroughs that frankly are not there yet. 0:05:51.880 --> 0:05:54.279 And Elon Musk is counting on both of those things 0:05:54.320 --> 0:05:57.080 happening now. You know, who knows he has achieved a 0:05:57.080 --> 0:06:00.360 lot in his career, but this is a huge jump. 0:06:00.680 --> 0:06:01.520 He referred to. 0:06:01.880 --> 0:06:03.560 You know, we're not just writing a new chapter we're 0:06:03.560 --> 0:06:05.800 starting a new book, and look, starting a new book 0:06:05.839 --> 0:06:08.280 that is a challenge, that is not a given, and 0:06:08.640 --> 0:06:11.240 it is going to be a real trial for Tesla 0:06:11.279 --> 0:06:11.800 going forward. 0:06:11.839 --> 0:06:14.200 I'm wondering about new vehicles. In that book, there was 0:06:14.200 --> 0:06:16.920 this little tease where there were sort of silhouettes of 0:06:17.240 --> 0:06:19.960 vehicles under white sheets, and image of that appeared. I 0:06:19.960 --> 0:06:22.680 think one of those vehicles is in fact a very 0:06:22.800 --> 0:06:26.000 cheap EV that could compete globally with those ten thousand 0:06:26.040 --> 0:06:27.240 dollars Chinese evs. 0:06:27.440 --> 0:06:30.479 I mean, that is certainly what Tesla's investors, at least 0:06:30.520 --> 0:06:33.280 some investors would like to hear. And we saw kind 0:06:33.279 --> 0:06:35.400 of a panic earlier in the year when it appeared 0:06:35.400 --> 0:06:37.479 that Elon Musk was backing away from that. I don't 0:06:37.480 --> 0:06:39.520 think we should look at that slide and say that 0:06:39.560 --> 0:06:41.760 Elon Musk has a you know, twenty five thousand dollars 0:06:41.760 --> 0:06:44.520 EV in the near term. He brought this up in 0:06:44.600 --> 0:06:46.839 all sorts of ways. He talked about how hard it 0:06:46.880 --> 0:06:50.240 is to get to affordability, how difficult the car business is, 0:06:50.520 --> 0:06:52.960 and you know, of course he talked on and on 0:06:53.080 --> 0:06:55.960 and on about robotaxis. For him, I think at least 0:06:56.000 --> 0:06:58.760 right now, the affordable Tesla is the model three. He 0:06:58.800 --> 0:07:01.440 talked about how cheap it is with all their incentives 0:07:01.480 --> 0:07:03.359 with the when you consider the cost of gas and 0:07:03.400 --> 0:07:07.719 so on, and where they're really pushing towards is robotaxis 0:07:07.839 --> 0:07:10.920 and of course Optimists, which if you think a robotaxi 0:07:10.960 --> 0:07:13.840 is a fanciable product, you know optimis is you know. 0:07:14.120 --> 0:07:17.440 Sci fi or something sci fi? Well, he's pretty good 0:07:17.440 --> 0:07:20.440 at sci fi. Overall, we thank you Max Trafckin, absolutely 0:07:20.440 --> 0:07:22.240 brilliant to have you here to talk about some of 0:07:22.280 --> 0:07:26.440 the light moments within what is, of course was that AGM, 0:07:26.520 --> 0:07:28.960 but there were some serious moments and one of them 0:07:29.160 --> 0:07:32.880 was being voiced by Kristin Hull, CEO of Near Impact Capital, 0:07:33.120 --> 0:07:35.400 who was a co fighter of Proposal eight. Regarding and 0:07:35.520 --> 0:07:39.760 your reporting on anti harassment and discrimination efforts over at 0:07:39.800 --> 0:07:44.160 Tesla and Kristin, you're a renowned sort of activist investor. 0:07:44.200 --> 0:07:46.640 You go out there wanting to make impact. When you 0:07:46.720 --> 0:07:50.640 see this ultimate referendum endorsing Elon Musk and his board, 0:07:51.000 --> 0:07:52.400 do you feel you're having the impact? 0:07:54.520 --> 0:07:56.440 Hello On, thanks for having me today. You know this 0:07:56.480 --> 0:07:58.600 is a good question because we're here for the long game. 0:07:58.720 --> 0:08:01.240 We had been long term investors in Tesla, and we 0:08:01.280 --> 0:08:05.000 certainly see the promise both of the AI of the robotics, 0:08:05.040 --> 0:08:09.960 but certainly about revolutionary the entire automobile industry. And yet 0:08:10.960 --> 0:08:14.000 being at the meeting yesterday had us concerned about where 0:08:14.000 --> 0:08:15.440 investors are with this company. 0:08:16.240 --> 0:08:20.640 That proposal AD that Caroline just mentioned was voted down 0:08:20.680 --> 0:08:25.200 by shareholders yesterday. So I'm wondering where you go from here, 0:08:25.280 --> 0:08:27.480 given that you were one of the sponsors, one of 0:08:27.520 --> 0:08:30.400 the ones who brought that to the attention of shareholders. 0:08:30.640 --> 0:08:31.920 What's your next move, Kristen. 0:08:33.160 --> 0:08:35.200 We know we don't have the numbers yet, and so 0:08:35.880 --> 0:08:38.800 I'll be really curious to see how many of the 0:08:38.800 --> 0:08:42.360 investors actually did support the board doing a report looking 0:08:42.480 --> 0:08:46.640 into how much the company is spending on discrimination and 0:08:47.480 --> 0:08:52.600 harassment issues. Of course, for this company, Elan said himself 0:08:52.640 --> 0:08:55.640 several times. You know, he is a pathological optimist. And 0:08:55.720 --> 0:08:57.920 to be that optimist and to get to the dreams 0:08:57.920 --> 0:09:00.560 and the promises he made to shareholders, he's need to 0:09:00.600 --> 0:09:03.200 have some really tough talent at that company. So to 0:09:03.240 --> 0:09:06.520 be able to hire and retain that top talent, they're 0:09:06.520 --> 0:09:08.360 going to need to spend some money and some time 0:09:08.360 --> 0:09:10.600 and attention on human capital management. 0:09:11.400 --> 0:09:13.840 You say within that speech that you gave yesterday, you 0:09:13.920 --> 0:09:17.199 worry about the human capital management, the workforce management. Year 0:09:17.240 --> 0:09:19.920 over year, you're saying more harassment and discrimination allegations have 0:09:19.960 --> 0:09:23.319 emerged with few visible changes to Tesla's people management policies 0:09:23.400 --> 0:09:25.800 or practices. And in fact, Kristin, I just want to 0:09:25.840 --> 0:09:28.200 add to the fact that this comes in a context 0:09:28.240 --> 0:09:30.840 where we're not just talking about this with one company 0:09:30.840 --> 0:09:33.120 of Elon Musks. We're talking about it with others, just 0:09:33.200 --> 0:09:37.840 SpaceX and fired engineers there this week finding a lawsuit 0:09:37.880 --> 0:09:42.240 against Elon Musks for sexual harassment and for retaliation over 0:09:42.280 --> 0:09:45.480 in California. Kristin, how much is this a worry? Do 0:09:45.520 --> 0:09:45.920 you think? 0:09:46.600 --> 0:09:52.319 More broadly, this is a significant concern. There are thousands 0:09:52.400 --> 0:09:55.120 of employees that are coming forward. And this is, as 0:09:55.200 --> 0:09:58.240 you mentioned, this isn't across one company. You know, he 0:09:58.480 --> 0:10:02.679 is the leader of several companies. And he also said 0:10:02.720 --> 0:10:05.400 that they're writing a new book. Writing a new book 0:10:05.440 --> 0:10:08.480 is going to need a full time author, and when 0:10:08.520 --> 0:10:13.120 this author has so many cases of discrimination and harassment, 0:10:13.559 --> 0:10:14.800 investors can be concerned. 0:10:15.200 --> 0:10:19.599 Can I just ask you to articulate you said thousands 0:10:19.640 --> 0:10:21.960 of employees are coming forward. Where is that data for 0:10:22.040 --> 0:10:24.880 all audience? Perhaps on seeing the thousands, but a hearing 0:10:24.920 --> 0:10:26.839 of the eight engineer here and the. 0:10:26.920 --> 0:10:28.719 Likes that's right. 0:10:28.840 --> 0:10:32.559 So TESLA is still using for s arbitration, which does silence. 0:10:32.600 --> 0:10:36.920 It's a concealment mechanism where many of the employees are 0:10:37.000 --> 0:10:39.679 silenced and are not able to bring to suit. However, 0:10:40.320 --> 0:10:42.400 many have gone to the State of California and now 0:10:42.400 --> 0:10:45.400 the State of California is suing Tesla for racial discrimination 0:10:45.840 --> 0:10:48.200 based on thousands of reports coming to the state. 0:10:48.720 --> 0:10:51.520 Some folks out there do argue that the idea of 0:10:51.559 --> 0:10:55.000 talent moving between companies is a benefit for Elon Musk. 0:10:55.080 --> 0:10:56.960 Check out what Tasha Kini said a little earlier on 0:10:57.040 --> 0:10:58.000 Bloomberg Surveillance. 0:10:58.080 --> 0:11:02.200 Kristen, it's great for talent acquisition. We've seen employees move 0:11:02.320 --> 0:11:05.040 in between his companies. You know, if you're the top 0:11:05.120 --> 0:11:08.040 AAI engineer in the world, you're not going to get 0:11:08.040 --> 0:11:09.760 bored working for Elon Musk. 0:11:10.720 --> 0:11:13.960 Again, Tasha Kiney of ARC invest earlier on Bloomberg Surveillance, Kristin, 0:11:14.000 --> 0:11:15.440 what do you make of what she said? Is there 0:11:15.440 --> 0:11:19.080 any indication to you that it's not beneficial for these 0:11:19.120 --> 0:11:22.960 employees to move between companies. That the idea of employees 0:11:22.960 --> 0:11:26.679 going from Neurolink to SpaceX to Tesla has not been 0:11:26.679 --> 0:11:28.040 a boon for the companies. 0:11:29.400 --> 0:11:32.120 You know, I don't mind the cross pollination. Certainly, we 0:11:32.160 --> 0:11:35.040 want talent and we want well rounded employees. And yet 0:11:35.040 --> 0:11:38.960 what we're talking about here are sexual harassment and racial discrimination, 0:11:39.280 --> 0:11:41.960 and those employees are not moving from one company to another. 0:11:43.040 --> 0:11:45.320 Those are actually being boxed out and so their talent 0:11:45.400 --> 0:11:47.280 isn't rising to the top and they're not able to 0:11:47.280 --> 0:11:49.960 bring their full selves to the workforce. And that's where 0:11:49.960 --> 0:11:52.800 we're having issues because as we know, Tesla's been out 0:11:52.800 --> 0:11:55.600 in front for quite some time. However, much of the 0:11:55.600 --> 0:11:59.000 industry is poised to catch up and they this talent 0:11:59.080 --> 0:12:01.840 is moving to other other companies within the industry. 0:12:02.360 --> 0:12:04.120 Christ And when you were on the program back in 0:12:04.360 --> 0:12:06.160 November with that in Caroline, you said you wanted to 0:12:06.200 --> 0:12:09.680 see Elon Musk step down. Do you still at least 0:12:09.679 --> 0:12:11.720 at Tesla, do you still want to see that? 0:12:13.360 --> 0:12:15.360 So where we're going with this is that we are 0:12:15.440 --> 0:12:19.120 looking for the board to put in management that really works. 0:12:19.200 --> 0:12:22.480 And so we saw yesterday at the shareholder meeting there's 0:12:22.559 --> 0:12:25.319 a lot of shareholders that really do love the CEO 0:12:25.520 --> 0:12:28.840 despite his shortcomings, So if we could manage around that. 0:12:28.920 --> 0:12:33.040 You know, there's no perfect CEO, and yet we do 0:12:33.200 --> 0:12:35.240 know that leadership comes from the top, and so we 0:12:35.280 --> 0:12:39.760 would like to see him either really recognize where the 0:12:39.840 --> 0:12:42.280 human capital management is missing and put that in place, 0:12:42.760 --> 0:12:44.960 or possibly go on to other projects. 0:12:45.120 --> 0:12:48.959 And Christen for those that yes voice that there's been 0:12:49.000 --> 0:12:53.080 a capital market capitalization erosion in the last six months, 0:12:53.120 --> 0:12:56.720 but ultimately back elon because he has contributed so much 0:12:56.880 --> 0:12:59.720 value to this business and ultimately to the US economy. 0:13:00.120 --> 0:13:03.120 Where do you go with the articulation of talent and 0:13:03.200 --> 0:13:03.680 money here? 0:13:04.160 --> 0:13:06.760 So he's a clear leader, right and in fact, some 0:13:06.840 --> 0:13:11.120 would say, given yesterday's following, that he's a guru, and 0:13:11.400 --> 0:13:16.680 many were attesting their love for this CEO. So no 0:13:16.760 --> 0:13:20.640 one can argue that Tesla has completely disrupted the automobile 0:13:20.640 --> 0:13:23.480 industry as we know it, particularly with the battery play 0:13:23.480 --> 0:13:25.520 and then really moving things off great as far as 0:13:25.520 --> 0:13:28.760 electrifying our economy. We want to give him that credit. 0:13:28.880 --> 0:13:31.520 And there's so much potential at this company that can 0:13:31.559 --> 0:13:34.800 be realized when we know that they are hiring top 0:13:34.840 --> 0:13:37.200 talent employees and that they can keep them, so we 0:13:37.320 --> 0:13:40.800 really are mindful that we want to see them working 0:13:40.880 --> 0:13:44.120 toward a place where discrimination, harassment don't happen at Tesla. 0:13:44.800 --> 0:13:47.840 Kristin really appreciate you coming on and joining us post 0:13:47.840 --> 0:13:51.440 shareholder meeting. Kristin Hole of NIA Impact Capital, thanks so much. 0:14:00.200 --> 0:14:02.440 Was posting their biggest gain in more than four years 0:14:02.520 --> 0:14:06.040 after the company projected strong future sales for its creative products, 0:14:06.080 --> 0:14:10.040 suggesting customers are adopting the company's new AI based tools. 0:14:10.400 --> 0:14:13.960 Joining us now for more is Bloomberg's Brody Ford Brody? 0:14:14.000 --> 0:14:17.440 Is that a sigh of relief? I hear from investors saying, Okay, 0:14:17.440 --> 0:14:20.320 we're not as concerned as we thought we should be 0:14:21.000 --> 0:14:25.640 about competition from these upstarts and established organizations. Adobe is 0:14:25.680 --> 0:14:26.240 doing okay. 0:14:27.600 --> 0:14:27.800 Yeah. 0:14:27.840 --> 0:14:28.720 The question for. 0:14:28.720 --> 0:14:31.480 Our software in recent weeks has been are you an 0:14:31.520 --> 0:14:35.560 AI winner or an AI loser? And investors have whipsad 0:14:35.640 --> 0:14:37.440 on Adobe. I mean, I think they were down like 0:14:37.480 --> 0:14:40.560 twenty five percent on the year before the results, but 0:14:40.720 --> 0:14:43.960 yesterday evening they pretty much showed that, hey, people are 0:14:44.000 --> 0:14:46.840 sticking with our platform and they are beginning to pay 0:14:46.880 --> 0:14:50.400 for these AI tools. I mean, they introduce their family 0:14:50.400 --> 0:14:53.680 of models that have now been used nine billion times, right, 0:14:53.720 --> 0:14:56.480 I mean, it's not a ton of money from AI yet, 0:14:56.880 --> 0:15:00.520 but the indicators here are looking much better thanpated. 0:15:01.040 --> 0:15:03.120 Still notable, though Adobe is still off by more than 0:15:03.120 --> 0:15:05.640 twelve percent year today. As you said, they've been under 0:15:05.640 --> 0:15:08.760 pressure coming into this. I'm looking at alyst recommendations thirty 0:15:08.800 --> 0:15:11.240 five say by, and in fact the price target is 0:15:11.240 --> 0:15:13.560 still well above where we're currently training. They see going 0:15:13.560 --> 0:15:16.080 out to about six hundred and thirteen by in the 0:15:16.120 --> 0:15:19.920 next twelve months. What gets us hed, Crody? What more 0:15:20.040 --> 0:15:22.760 proof do we need that they're able to generate revenue? 0:15:24.080 --> 0:15:26.600 Well, So much investment in AI right now, as you 0:15:26.640 --> 0:15:30.680 all have reported, is in the hardware, in the infrastructure. 0:15:31.200 --> 0:15:34.080 At some point there have to be application uses for 0:15:34.120 --> 0:15:36.760 all this AI investment or it's you know, why were 0:15:36.760 --> 0:15:39.840 we doing it? The hope is that Adobe is one 0:15:39.880 --> 0:15:44.360 of those companies that has Photoshop, Illustrator, these applications used 0:15:44.400 --> 0:15:47.760 by millions of people, and that once folks are ready 0:15:47.760 --> 0:15:50.520 to start paying for AI, it's going to go to 0:15:50.560 --> 0:15:53.040 a company like a Dome. Of course, it could also 0:15:53.080 --> 0:15:55.240 go to a company like Canba, and that's where the 0:15:55.240 --> 0:15:57.280 barecase is Brody. 0:15:57.320 --> 0:16:01.359 How important are these safeguards when it comes to copyright 0:16:01.680 --> 0:16:05.040 to Adobe's business. Is this the moat that Adobe has 0:16:05.120 --> 0:16:07.640 the idea that if you use its tools to generate images, 0:16:07.920 --> 0:16:09.960 those are quote unquote commercially safe. 0:16:11.000 --> 0:16:13.440 It certainly helps so, right, I mean that's a big 0:16:13.480 --> 0:16:16.000 part of their argument that hey, if you go use 0:16:16.080 --> 0:16:19.240 mid Journey, if you go use DOLLI, you might get 0:16:19.320 --> 0:16:21.440 sued and your SISO is going to be mad at you. 0:16:22.040 --> 0:16:22.240 Right. 0:16:23.280 --> 0:16:26.400 I think that whether or not folks are going to 0:16:26.520 --> 0:16:29.920 only stick with Adobe for this copyright concept, it's yet 0:16:29.960 --> 0:16:33.080 to be seen. I think what's a more compelling argument 0:16:33.400 --> 0:16:37.240 is that Adobe already has the applications we all know 0:16:37.280 --> 0:16:38.880 how to use. I mean, am I going to go 0:16:39.040 --> 0:16:42.040 learn a whole new program based on AI or am 0:16:42.040 --> 0:16:44.360 I going to click the new button in Photoshop that's 0:16:44.400 --> 0:16:46.760 going to help me generate something and it's not really 0:16:46.760 --> 0:16:48.960 disruptive to how I already did my work. To me 0:16:49.440 --> 0:16:52.920 and to many investors, that's the really compelling argument. 0:16:52.640 --> 0:16:57.080 They have laziness love it ready for also. 0:16:56.880 --> 0:16:59.200 Precipses that I know how to use Photoshop with. 0:17:00.000 --> 0:17:03.680 A I'm sure you could dust off some of those. 0:17:05.600 --> 0:17:07.000 Brody Ford will show us we. 0:17:07.080 --> 0:17:07.359 Ban c you. 0:17:07.640 --> 0:17:10.359 Meanwhile, coming up we head out to the G seven 0:17:10.400 --> 0:17:13.520 in Italy that the Pope has been urging world leaders 0:17:13.760 --> 0:17:16.600 to be cautious on artificial intelligence over there, Tim. 0:17:16.680 --> 0:17:19.880 Yeah, and you're certainly watching shares of Vodaphone this morning, Caroline, 0:17:19.880 --> 0:17:21.400 because there's some news coming out of the UK. 0:17:21.520 --> 0:17:25.280 Yeah, keep keen eye on photophone. Telecom company look at 0:17:25.359 --> 0:17:28.800 selling off stakes in companies and stakes around the world 0:17:28.920 --> 0:17:31.800 that haven't been particularly optimal for them. This time, they're 0:17:31.800 --> 0:17:34.639 looking to sell an entire stake in an Indian tower 0:17:34.720 --> 0:17:37.240 company in block trades. We think it's going to happen 0:17:37.240 --> 0:17:38.879 as soon as next week. Could fetch up to two 0:17:38.880 --> 0:17:42.000 billion dollars Apple quarter percent for the UK Listic company 0:17:42.320 --> 0:18:00.960 is a bilybod technology time now for tech first Up, 0:18:01.000 --> 0:18:05.720 open ai has appointed retired US Army General Paul Lakasoni 0:18:05.920 --> 0:18:08.320 to hiss Bard of Directors now. Makasoni formerly led the 0:18:08.400 --> 0:18:11.600 National Security Agency and will join open AI's Safety and 0:18:11.600 --> 0:18:13.879 Security committee. That's as the company is looking to bolster 0:18:13.880 --> 0:18:18.080 at cybersecurity efforts to protect its technology. Meanwhile, recent documents 0:18:18.160 --> 0:18:21.400 reveal that London hospitals, well, they've known for years about 0:18:21.400 --> 0:18:23.840 a weakness that left them vulnerable to a recent cyber hack. 0:18:24.040 --> 0:18:27.800 Now Guy and St Thomas's NHS Foundation failed to meet 0:18:27.880 --> 0:18:31.159 UK Health Service data security standards, and it even acknowledged 0:18:31.160 --> 0:18:34.680 as recently as April that quote cybersecurity remained a high 0:18:34.800 --> 0:18:38.159 risk and Microsoft will it faced a public grilling on 0:18:38.200 --> 0:18:41.320 Capitol Hill because President Bradsmith was facing questions from the 0:18:41.320 --> 0:18:44.760 House Homeland Security Committee related to two reports that Microsoft 0:18:44.840 --> 0:18:47.680 failed to protect government emails when getting into the hands 0:18:47.720 --> 0:18:50.200 of Chinese hackers. Now, the tech giant pledged that it 0:18:50.240 --> 0:18:54.280 would overhaul its cyber defenses in response to the recent lapses. 0:18:54.280 --> 0:18:57.959 Teim Now talking of political discussions around technology, one has 0:18:57.960 --> 0:19:00.560 been underway at the G seven summit, with Proud a 0:19:00.640 --> 0:19:03.640 surprising voice to many. The Pope arrived at the conference 0:19:03.680 --> 0:19:08.000 today and expressed his concerns about AI. Bloomberg's Ari Hordern 0:19:08.200 --> 0:19:11.920 joins us with more from Italy. Right now, Henri Pope 0:19:11.920 --> 0:19:15.159 Francis becomes the first Pope to address the Group of Seven. 0:19:15.359 --> 0:19:17.600 What can you tell us about what he warned when 0:19:17.680 --> 0:19:18.679 it comes to AI? 0:19:19.280 --> 0:19:21.480 Well, a lot of fanfare around the Pope given the 0:19:21.480 --> 0:19:24.359 fact he's the first pontiff to ever address the G seven. 0:19:24.400 --> 0:19:27.360 Here in the southern Italy, in the region of Pulia, 0:19:27.440 --> 0:19:29.320 and it comes on the heels of the Pope calling 0:19:29.400 --> 0:19:33.200 for a treaty to regulate AI. He himself has been 0:19:33.320 --> 0:19:36.240 victim of AI generated imagers. So this is what he 0:19:36.320 --> 0:19:38.439 had to say to the leaders around the table. 0:19:38.600 --> 0:19:40.920 He said, AI is fascinating and terrible. 0:19:41.240 --> 0:19:43.479 He talked about the fact that his first and foremost 0:19:43.520 --> 0:19:48.120 an instrument, but the benefits or negative consequences will depend 0:19:48.480 --> 0:19:50.920 on how it is used and how it is deployed. 0:19:51.119 --> 0:19:53.080 So we really wanted to make this case to G 0:19:53.160 --> 0:19:56.879 seven world leaders and what we know given the draft 0:19:56.960 --> 0:19:59.520 communicate that only Bloomberg has seen eyes on right now 0:19:59.600 --> 0:20:02.320 and the leader we'll release it later this evening. Is 0:20:02.400 --> 0:20:04.919 this they are going to say, they recognize the impact 0:20:04.960 --> 0:20:07.399 of AI and the military domain and the need for 0:20:07.480 --> 0:20:11.159 a framework for responsible development and use. We encourage more 0:20:11.200 --> 0:20:13.399 states to do so to ensure that military use of 0:20:13.440 --> 0:20:17.760 AI is responsibly responsible, complies with applicable international law, and 0:20:17.840 --> 0:20:23.159 enhances intentional security. The only real deliverable though we are getting, 0:20:23.240 --> 0:20:25.719