Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a
Speaker 1: live from coast to coast with Caroline Hide in New
Speaker 1: York and ever Low in San Francisco.
Speaker 2: This is Bloomberg Tech coming up. Amazon and Google probe
Speaker 2: by the US FTC over their search advertising practices. Plus
Speaker 2: Open AI is getting closer to its for profit restructuring.
Speaker 2: This is It also plans to spend billions of dollars
Speaker 2: in the UK on data center investments alongside in video.
Speaker 2: And we go to Palo Alto to sit down with
Speaker 2: Robin Denholm, TESLA board chair, to discuss the ambition to
Speaker 2: be the most valuable company in history. The first we're
Speaker 2: checking on these markets which are also at the most
Speaker 2: valuable in history. For the last that one hundred, we're
Speaker 2: up four tens percent. It is another record high. We're
Speaker 2: up almost two percent on the week. There has just
Speaker 2: been relentless desire to get into the AI focus of companies,
Speaker 2: and we drive higher when it comes to tech stocks,
Speaker 2: dig into the really breaking news of the moment, though
Speaker 2: once again top of mind is regulatory concerns, but not
Speaker 2: so much on the share price impact. Looking at Amazon
Speaker 2: training flat on the day, Alphabet just down to tens
Speaker 2: of percent. But there are further steps coming from the
Speaker 2: FTC to perhaps bring to heal some of the domination
Speaker 2: of these companies, particularly in areas of the market like advertising.
Speaker 2: We bring in Broomberg Senior Tech Editor Mike Shepard on
Speaker 2: this and it's not affecting the shares, but it must
Speaker 2: be of concern to the companies.
Speaker 3: Well, it is, Caro. The key takeaway here is that
Speaker 3: there is no sign of a let up for big
Speaker 3: tech under the Trump administration. The Federal Trade Commission is
Speaker 3: opening new probes into whether Amazon and Google have misled
Speaker 3: advertisers who are placing online ads on their services, and
Speaker 3: this is an area of concern down the road. This
Speaker 3: will take a long time to unfold. The Consumer Protection
Speaker 3: Unit is explos boring this and we have to remember
Speaker 3: that these ads are not something like you used to
Speaker 3: buy in the old days. These happen in seconds through
Speaker 3: online auctions that the agency will be scrutinized. Specifically, they
Speaker 3: want to know whether the companies are properly disclosing both
Speaker 3: the terms and the pricing to advertisers who are seeking
Speaker 3: to place these ads. This investigation is expected to take
Speaker 3: a fair amount of time. That could be why we're
Speaker 3: not seeing much reaction yet in the shares. Perhaps investors
Speaker 3: are getting used to the ideas that government is going
Speaker 3: to be in these companies' grills for some time. And
Speaker 3: this really is I said Caro, is one of the
Speaker 3: latest fronts Google, who was found to have illegally monopolized
Speaker 3: the search market and some search advertising, and Amazon too
Speaker 3: is facing its own anti trust trial coming up in
Speaker 3: twenty twenty seven Caro, So this is something we'll be
Speaker 3: watching closely here in Washington, mex.
Speaker 2: Mike Sheffard, great wrap up, We thank you. Meanwhile, Opening
Speaker 2: Eye said it's closer to converting into a more traditional
Speaker 2: for profit company, knowing the resolution of negotiations with top
Speaker 2: shareholder Microsoft and outlining terms at least one hundred billion
Speaker 2: dollars in equity for its nonprofit arm now plan changes
Speaker 2: will give the existing open ai nonprofit control over a
Speaker 2: new public benefit corporation and provide the nonprofit with an
Speaker 2: equity stake that would make it quote one of the
Speaker 2: most well resourced philanthropic organizations in the world. Meanwhile, we've
Speaker 2: also got leaders of both open ai and in videar
Speaker 2: and plenty more planning to pledge support more for billions
Speaker 2: of dollars in the UK data center investments when they
Speaker 2: visit the country next week. We want to turn to
Speaker 2: BlueBag Intelligence. Senior analyst Man Needs saying, Look, there is
Speaker 2: an anxiety perhaps lifted on Microsoft shareholders here that the
Speaker 2: relationship with open ai is still there, particularly for inference compute.
Speaker 2: Just talk to us about how this memorandum of understanding
Speaker 2: is laying out.
Speaker 4: Yeah, I mean especially in the context of the three
Speaker 4: hundred billion dollar deal that Opening has signed with Oracle,
Speaker 4: which it seems like is predominantly for training and some inferencing.
Speaker 4: But the fact that Microsoft signed this agreement shows that we'll.
Speaker 2: Not sign it, but it will sign the.
Speaker 4: Memorandum of understanding. And look, I think in this case,
Speaker 4: open Ai has benefited a lot in terms of the
Speaker 4: being that early adopter of lllms and getting that enterprise
Speaker 4: data through Microsoft, so it's in both of them's interests.
Speaker 4: But I still feel Microsoft needs open Ai more right
Speaker 4: now given all the Compute kind of shakeups that are
Speaker 4: going around, and from that perspective, it doesn't surprise me
Speaker 4: that open Ai, given they have to raise you know,
Speaker 4: that three hundred billion dollars and pay to oracle. They
Speaker 4: need to be a separate entity who will finance to
Speaker 4: a nonprofit entity. So all that points towards open AI
Speaker 4: really betting big on scale. Maybe they feel with GPT
Speaker 4: five they have another product breakthrough that they feel they
Speaker 4: want to scale further. That's why they are betting big.
Speaker 4: But clearly it's coming in at a time where they
Speaker 4: are going after a scale.
Speaker 2: And they're going to get scale in the UK as
Speaker 2: well in terms of compute. Man Deep Sing of bloembgg Intelligence,
Speaker 2: we thank him coming up sit down with Robin Denholm,
Speaker 2: Tesla's share of the board, which discussed Tesla's business, Elon's leadership,
Speaker 2: and so much more. Stay tuned. This is Bloomberg Tech.
Speaker 2: Welcome back to Bloomberg Tech, and we now go to
Speaker 2: Palo Alto where Ed Ludlow, standing.
Speaker 5: By Caroline Tesla's board has made an unprecedented proposal for
Speaker 5: a compensation package for its CEO, Elon Musk. The total
Speaker 5: ward value could be up to one trillion dollars, but
Speaker 5: it is set against mandatory targets that have a high
Speaker 5: bar both operational and financial Investors' shareholders are going to
Speaker 5: vote on that package in November, but many of those
Speaker 5: shareholders have questions. To answer the questions, the chair of
Speaker 5: Tesla's board, Robin Denholm, is with us. Thank you Robin
Speaker 5: for your time. This proposed package was about Tesla's long
Speaker 5: term goals as much as it was about retaining Elon Musk.
Speaker 5: But why is it so crucial to the board's mind
Speaker 5: that it is Elon Musk that is able to get
Speaker 5: Tesla to this future?
Speaker 6: Well, thank you, Ed. I think it is a pivotal
Speaker 6: time at Tesla and also in the world in AI
Speaker 6: and autonomous and the application of AI is its transformative technologies,
Speaker 6: and we believe it Tesla in big, ambitious goals and
Speaker 6: so Elon put out the master plan for on the
Speaker 6: first of September, very auspicious day, I think in terms
Speaker 6: of putting out the vision for the company for the
Speaker 6: next decade or more, and AI and autonomous is at
Speaker 6: the front and center of that, both in the vehicles
Speaker 6: but also in our optimist lineup and what we're doing
Speaker 6: from a robotics perspective as well. And so having the
Speaker 6: boards of responsibility is to look at who the CEO
Speaker 6: is for the next period of time, and we believe
Speaker 6: that Elon is the right CEO for Tesla over this
Speaker 6: transformative period of time, and our view is he's a
Speaker 6: generational leader. There aren't any other people out there like
Speaker 6: Elon who can actually lead the company over this next
Speaker 6: decade or so, and so once you decide who the
Speaker 6: leader should be, you need to put in place a
Speaker 6: compensation package to incent and motivate him to actually deliver
Speaker 6: against the ambitions.
Speaker 5: Mosivational piece is interesting in the course of the proxy
Speaker 5: as you read it and negotiation plays out, doesn't it
Speaker 5: seven or eight months, but that there were sticking points
Speaker 5: on both sides. What were they.
Speaker 6: Well, obviously in any discussion around the future of the company,
Speaker 6: but also the future of an individual in terms of
Speaker 6: what motivates them is very important to understand that and
Speaker 6: from a board perspective, from a special Committee perspective, as
Speaker 6: we've outlined in the proxy, we had a very fullsome process.
Speaker 6: We had more than ten meetings with Elon in terms
Speaker 6: of understanding what were his motivations, what does he want
Speaker 6: to do over this period of time And having worked
Speaker 6: with him now I've been on the board for eleven
Speaker 6: years and Kathleen Wilson Thompson, our other amazing Special Committee member,
Speaker 6: has also been working with him for the past six
Speaker 6: or seven years as well, and so from our perspective
Speaker 6: seeing him in the boardroom, but also understanding what motivates him,
Speaker 6: it's things that other people can't do. It's what the
Speaker 6: company could do that no other company could do. So
Speaker 6: those types of things or what are in this plan.
Speaker 6: And so, as you said in the outset, it is
Speaker 6: a zero compensation package unless he delivers against pretty ambitious
Speaker 6: goals for the company.
Speaker 2: Ambitious goals that include twenty million vehicles, that include ten
Speaker 2: million FSD that think about a million robots and robotaxis.
Speaker 2: Robin tell us, from your experience with the twenty eighteen
Speaker 2: pay package, are on the investi base really wants to
Speaker 2: understand how structurally this is different.
Speaker 6: Yeah, So for us, the framework of the twenty eighteen
Speaker 6: plan worked very very effectively. And so this package, this
Speaker 6: framework that we've put in place for the twenty twenty
Speaker 6: five proposed compensation package has twelve tranches, twelve market cap goals,
Speaker 6: where the top goal is eight and a half trillion
Speaker 6: dollars and we're just over a trillion dollars today. The
Speaker 6: first milestone on the market cap side is a two
Speaker 6: trillion dollars so we've got almost double the size of
Speaker 6: the company before any of the market cap goals are
Speaker 6: actually achieved, and then it increases by half a trillion
Speaker 6: up into the last two charches, where there's a trillion
Speaker 6: dollar jump each time. And then on the operational side,
Speaker 6: to your point, Caroline, they're very ambitious. We're just over
Speaker 6: eight million cars that have been produced and delivered at Tesla.
Speaker 6: The milestone on the vehicle side is twenty million vehicles,
Speaker 6: ten million FSC paid subscription areas. So to me, these
Speaker 6: are ambitious goals, and not to mention what we're what
Speaker 6: we've proposed in terms of the goals around our robotics areas,
Speaker 6: our optimists and bots a million of those and robotaxis
Speaker 6: and so to me, it really brings the master plan
Speaker 6: for to life within this compensation package. Because they're the
Speaker 6: goals that Elon has, it's the goals that the company
Speaker 6: has as well.
Speaker 2: Some had worried that Elon's goals had turned more towards politics,
Speaker 2: and you draw him back from that within the proxy
Speaker 2: and he's agreed to wind down his political activity. How
Speaker 2: do you define political activity, Robin?
Speaker 6: I think you know, from my perspective, this is a
Speaker 6: package that really motivates Elon. So having him front and
Speaker 6: center at the company and delivering against really ambitious goals,
Speaker 6: to me, is great for him, It's great for the company.
Speaker 6: It's also great for shareholders. And as we've outlined, the
Speaker 6: shareholders you know, in this proposal actually win you know,
Speaker 6: very extensively with that market cap at eight and a
Speaker 6: half trillion dollars in order to achieve this this compensation package.
Speaker 6: To me, that actually is one of the things that
Speaker 6: all shareholders will benefit by. And so from a politics perspective,
Speaker 6: obviously we're in a democracy, so everybody gets to voice
Speaker 6: their points of view. I think Elon having served as
Speaker 6: a special government employee, he obviously completed that activity and
Speaker 6: he is back and front and center at the company
Speaker 6: these days.
Speaker 5: But did those reassurances go as far as to Elon
Speaker 5: Musk agreeing not to specifically participate in any one political party,
Speaker 5: take another government role, extend to whether or not he
Speaker 5: makes donations in a political cycle.
Speaker 6: Yeah, I mean what he does from a personal perspective,
Speaker 6: in terms of his political motivations, etc. Is up to him.
Speaker 6: I mean, clearly, from our perspective as a board, we're
Speaker 6: measuring him on results and measuring him on what he
Speaker 6: does as a CEO of Tesla and our viewers. He's
Speaker 6: delivered big time in the past, and you know, we
Speaker 6: look forward to him doing that in the next era.
Speaker 5: Robin, you've just been unequivocal about the future of the
Speaker 5: company and the inclusion of those operational milestones on Optimus
Speaker 5: and Robotaxi. But when the proxy hit many many shareholders
Speaker 5: went straight to the bullet point on the twenty million
Speaker 5: vehicle deliveries. How much was that informed by the board
Speaker 5: wanting Elon Musk to focus on the bread and butter
Speaker 5: business in the near time, but also did you have
Speaker 5: some data that sales specifically were being impacted by Musk's
Speaker 5: political activity.
Speaker 6: Yeah, I would say that vehicles are our mainstay of
Speaker 6: our business today, so is the energy business. A lot
Speaker 6: of people forget about this brilliant business that we have
Speaker 6: on the sustainable energy side, and so from our perspective,
Speaker 6: from a board perspective, they are the revenue drivers of
Speaker 6: the company in the near term. But obviously in the
Speaker 6: plan you can see that there are other areas of
Speaker 6: revenue activity and profitability and growth for the company in
Speaker 6: what we're doing with AI as it relates to optimists,
Speaker 6: but also FSD and beyond. And you know, we've put
Speaker 6: pretty ambitious goals out there in terms of the EBITTER
Speaker 6: and so I think, yeah, the profit in terms of
Speaker 6: having four operational goals around product, but also four pretty
Speaker 6: extensive six actually pretty extensive goals around the profitability of
Speaker 6: the company as well. And you can't do that without
Speaker 6: selling fabulous products that customers want.
Speaker 2: Fibus products that people have to want to buy and
Speaker 2: sometimes because of the brand of the person who built them.
Speaker 2: I just ask a little bit again, did you think
Speaker 2: sales were hit by his political activity?
Speaker 6: So my view is over the long term, people buy
Speaker 6: things that they really love, and Tesla vehicles things that
Speaker 6: people really love. It doesn't matter who you are. The
Speaker 6: minute you get into a death Tesla and you drive
Speaker 6: that car, you know what that experience is like. And
Speaker 6: so from our perspective, focusing on products that customers love,
Speaker 6: that our consumers are both in the vehicle space and
Speaker 6: in the energy space, really do enjoy using and appreciate
Speaker 6: in terms of not only the technology aspects, but also
Speaker 6: how the vehicle responds, the user interface, those types of things. So, again,
Speaker 6: we're a products company. We love building things that people love.
Speaker 2: And we can see the future products just behind your
Speaker 2: shoulder as well with Optimists and Robin. What's been so
Speaker 2: interesting is the push from Elon's side in the ten
Speaker 2: times you met him and the negotiations and indeed on
Speaker 2: X's platform to have more voting control and have more
Speaker 2: ownership of shares. Can you tell us a little bit
Speaker 2: about how you weigh that as a board and as
Speaker 2: the chair.
Speaker 6: Well, clearly Elon's been very public in terms of the
Speaker 6: things that he motivates him and what actually he wants
Speaker 6: over this next period of time. So as a special
Speaker 6: committee as a board, that's actually easy to work with
Speaker 6: because when you're designing a compensation package, you're looking for
Speaker 6: the things that will motivate an individual to do something
Speaker 6: above and beyond the mainstay. And so clearly voting rights
Speaker 6: are important to Elon, particularly in this era as we're
Speaker 6: developing products around artificial intelligence, autonomous those types of things
Speaker 6: where we could use products for good as opposed to
Speaker 6: any nefarious activity with the products, and so he's been
Speaker 6: very clear on that, and so for us as a
Speaker 6: special committee, taking that information and then working through what
Speaker 6: were the right goals in order for him to earn
Speaker 6: those voting rights is really important. And again I'll say
Speaker 6: again that it's a zero plan if he doesn't achieve
Speaker 6: the goals. So each charch is worth a one percent
Speaker 6: in terms of voting rights. They kick in when he
Speaker 6: actually hits the goals, both an operational goal as well
Speaker 6: as a market cap goal, and then the economic benefits
Speaker 6: are delayed beyond that period of time, which is a
Speaker 6: difference in the plan that we structured in twenty eighteen.
Speaker 6: So bifurcating the voting rights versus the economic benefit actually
Speaker 6: has a huge retentive effect, and so from our perspective,
Speaker 6: that's one of the key levers that we used in
Speaker 6: the plan.
Speaker 5: You're joining us on Bloomberg television and radio around the world.
Speaker 5: This is Bloomberg Tech Live at Tesla and Palo Alto,
Speaker 5: where we're speaking with the chair of Tesla's board, Robin Denholm,
Speaker 5: about the proposed compensation package for Elon Musk that investors
Speaker 5: will vote on in November. In the proxy, again, it's
Speaker 5: very clear if one is to go and read it
Speaker 5: that Elon Musk essentially said to the special Committee that
Speaker 5: my priority is the voting power. But you know, if
Speaker 5: my motivations aren't met. I am interested to go and
Speaker 5: pursue other interests. What was the kind of absolute for
Speaker 5: the board on your side? You know, I'm trying to
Speaker 5: understand both Caroline's question on you know, I think Musk
Speaker 5: wants the voting power so that he can focus on
Speaker 5: this AI future. But in return to hand over that
Speaker 5: voting power, what is it, Robin that you wanted to ensure?
Speaker 4: Yeah?
Speaker 6: I think you know, as I said before, Elon's a
Speaker 6: unique individual. He can apply his time, effort and energy
Speaker 6: into different endeavors. He has different endeavors out there. What
Speaker 6: the board sought to do through this plan is to
Speaker 6: actually have him focus an outsized proportion of his time,
Speaker 6: effort and energy on Tesla, because when he does that,
Speaker 6: shareholders win.
Speaker 5: Might I just add that what's kind of missing from
Speaker 5: the proxy it's not codified. But you are calm, sanguine,
Speaker 5: comfortable with him also being the CEO at another company,
Speaker 5: private company, or having another leadership position across multiple companies.
Speaker 2: That's okay, Yes, it is okay.
Speaker 6: It is how he's delivered in the past, and from
Speaker 6: our perspective, actually having his creative energies in various endeavors
Speaker 6: that are outside of Tesla actually helps Tesla. And now
Speaker 6: that sounds perverse and people don't really understand that, but
Speaker 6: having worked with him now for eleven years, it actually
Speaker 6: benefits Tesla with him doing things that are not in
Speaker 6: the mission of Tesla outside of Tesla, both from a
Speaker 6: resource perspective but also from a motivation perspective. And so
Speaker 6: I think to really understand that point is to understand
Speaker 6: Elon and how he actually works. And so that's what
Speaker 6: the board sought to do through this plan.
Speaker 5: Succession the latter tronches directly relate to Elon Musk's participation
Speaker 5: in succession planning and the successful implementation of that succession planning.
Speaker 5: You started this conversation by saying, there isn't anyone like
Speaker 5: Elon Musk, given that this is a decade long plan,
Speaker 5: So maybe succession after a decade is more timely than
Speaker 5: do you have confidence as aboard there are leaders already
Speaker 5: within Tesla that could potentially step up when he's gone,
Speaker 5: or are you already starting to speak with Elon Musk
Speaker 5: about external candidates, those that are nearest to him, you know,
Speaker 5: in that level of extraordinary ability that you see in him.
Speaker 6: Yeah, so clearly Succession planning is a very important responsibility
Speaker 6: for the board and we take that responsibility very seriously.
Speaker 6: I meet with investors all the time, and I will
Speaker 6: say it's probably my number one question that I get
Speaker 6: in terms of consistency of feedback from investors around succession planning.
Speaker 6: And so from our perspective, we obviously have a plan
Speaker 6: if something untoward to it to happen in the near term,
Speaker 6: but we also want to have and do have a
Speaker 6: longer term succession plan. Now, this plan, this compensation plan,
Speaker 6: is a ten year plan. Elon will be sixty four
Speaker 6: or close to sixty five by the time this plan completes.
Speaker 6: At some point he will want to ease back. Maybe
Speaker 6: he doesn't believe that today, but at some point he
Speaker 6: may want to do that, and so we want to
Speaker 6: make sure that we have the right leaders in place
Speaker 6: to do an orderly transition at some point in the future.
Speaker 6: And so making that part of this plan was a
Speaker 6: very del brit activity and obviously he was part of
Speaker 6: that discussion as well, and he is part of the
Speaker 6: discussion on an ongoing basis that the board has around
Speaker 6: succession planning. The talent that we have, we have extraordinary
Speaker 6: talent inside of Tesla, across many facets of the company,
Speaker 6: and so making sure that we're continuing to develop those
Speaker 6: leaders but also bringing in talent. And you know that's
Speaker 6: the other part. It's in the report as well, and
Speaker 6: that Elon is a talent magnet, particularly on the engineering side,
Speaker 6: that we have extraordinary depth in the AI space, in
Speaker 6: the engineering space, in the manufacturing space, and largely because
Speaker 6: he works with them day in and day out. And
Speaker 6: so that's one of the unique aspects to this and
Speaker 6: also one of the unique aspects to the plan is
Speaker 6: to make sure that we have that visible success plan
Speaker 6: as we near the end of this decade long compensation packet.
Speaker 2: Robin, what you just said was really interesting, the fact
Speaker 2: that there is a plan in place if something untoward
Speaker 2: would happen. Can you spell out what that would look
Speaker 2: like in the here and now?
Speaker 6: No, I won't go into details here, but from my perspective,
Speaker 6: it is a responsibility the board takes very seriously, and
Speaker 6: you know, Elon has participated in that.
Speaker 4: We have.
Speaker 6: Leaders in geographies that run large portions of the organization.
Speaker 6: We have a really extensive executive team, and as I
Speaker 6: said before, Elon works very closely he's a hands on
Speaker 6: leader both in the engineerings places but also across the
Speaker 6: board from an operational perspective as well.
Speaker 2: And I realized that was a sensitive question to ask,
Speaker 2: and forgive me, I will ask another sensitive one because
Speaker 2: it is a time of sensitivity. We've just had the
Speaker 2: death of Charlie Kirk. We've had musk and on his
Speaker 2: own PLATFORMX raising questions well about his own security and
Speaker 2: the fact that he has focused on and I know
Speaker 2: it's something that you are focused on. What is the
Speaker 2: view baors view on terms of upping his own security
Speaker 2: right now?
Speaker 6: Yeah, so very tragic circumstances this week. I think there
Speaker 6: isn't anybody in a boardroom that isn't touched by what's
Speaker 6: happened with Charlie Kirk. And also, you know, there have
Speaker 6: been other incidents, you know, in the executive world over
Speaker 6: the last twelve months that I think every board stops
Speaker 6: and thinks about security of their CEOs but also their
Speaker 6: executive team. And it's no different at TESLA. We have
Speaker 6: been focused as a board on inland security for many
Speaker 6: years now. He's been very public and very much out there,
Speaker 6: and so it is something that we takes it very seriously.
Speaker 6: He takes it very serious as well, and so again
Speaker 6: from a board perspective, it is something that we've discussed at.
Speaker 7: Length, Robin.
Speaker 5: There are a number of other proposals in the proxy.
Speaker 5: One is a shareholder initiated proposal for Tesla to invest
Speaker 5: in Xai. It is non binding. The board doesn't take
Speaker 5: a position, but how does the board think about it.
Speaker 5: For example, if investors would say no, we don't want
Speaker 5: Tesla to make that investment, with the board still look
Speaker 5: to pursue it independently.
Speaker 6: So clearly there are sixteen proposals overall in the proxy.
Speaker 6: I know we've spent quite a bit of time on
Speaker 6: one important one on compensation, but the Xai proposal is
Speaker 6: a shareholder proposal that has been put into the board.
Speaker 6: We value our shareholders input and the reason why we
Speaker 6: have not put a recommendation is we want to hear
Speaker 6: from shareholders in terms of what their views are as
Speaker 6: to whether or not we should make an meant in Xai. Well,
Speaker 6: one thing I will say at the outset is there's
Speaker 6: a lot of misunderstanding of AI in the marketplace. It
Speaker 6: is not one thing, okay, it is a range of technologies.
Speaker 6: What Tesla is doing today with AI is quite different
Speaker 6: to what XAI does. XAI is working on fundamental areas
Speaker 6: in AI, but it's also working on large language large
Speaker 6: language models. That's not what Tesla's doing. As you can
Speaker 6: see behind me. With Optimists, we're taking real world application
Speaker 6: of AI and putting it into physical products to actually
Speaker 6: empower those products to do things. So with Optimists, it's
Speaker 6: very visual. You can see what he does in terms
Speaker 6: of visualizing things and then actually doing things. And the
Speaker 6: same with the vehicle. So what we're doing with AI
Speaker 6: within f S is actually taking that visual data and
Speaker 6: using that to drive the car. And so that's quite
Speaker 6: different to what an XAI does.
Speaker 5: Robin a very quick question, and then we will end
Speaker 5: on the final proposal for the compensation package. This week,
Speaker 5: Bloomberg reported an investigation about some fatal incidents where passengers
Speaker 5: or those inside the vehicle had difficulty using the manual release. Now,
Speaker 5: as you know, I drive a test a vehicle, you
Speaker 5: drive a test a vehicle. All I want to ask
Speaker 5: is the board aware of that reporting and will it
Speaker 5: raise that issue with Elon And is Tesla looking at
Speaker 5: the design of the door manual override.
Speaker 6: So I can tell you that the board takes very
Speaker 6: seriously any safety overlated reporting or any incidence of any
Speaker 6: type globally in terms of what we look at. But
Speaker 6: in the Tesla there is a manual override already, and
Speaker 6: in fact it's been reported on that you can actually
Speaker 6: manually open the door if there is a power event
Speaker 6: or anything like that. So safety is our number one
Speaker 6: factor in terms of what we're doing.
Speaker 5: And Tesla ranks very highly on safety, very highly.
Speaker 6: It's also why we're pursuing FSD because you know, just
Speaker 6: in North America there are fifty thousand deaths on the road.
Speaker 6: That's fifty thousand too many. And so and we know
Speaker 6: with the data that we have for FSD that it's
Speaker 6: actually safer than a human driver because of those fifty
Speaker 6: ninety four percent of human error. So if you can
Speaker 6: eliminate five percent of that, that's a lot of deaths
Speaker 6: that you can avoid. And so again, safety is one
Speaker 6: of our key priorities in any aspect of the business.
Speaker 5: Let's end on this unprecedented proposal, and I'm going to
Speaker 5: ask you this, what would happen if to Tesla if
Speaker 5: Elon Musk left tomorrow. You know, in order to try
Speaker 5: and help shareholders stand the board's motive here in keeping him.
Speaker 5: But there was one specific question from our audience which
Speaker 5: I really appreciated. Why does Elon need to be CEO?
Speaker 5: Could he not take on a more technical role.
Speaker 6: Well, that is contemplated in the package. Just like in
Speaker 6: the twenty eighteen package. We want his service at the company.
Speaker 6: He can be the CEO, but he can also be
Speaker 6: in another role, whether it's Chief Product officer or that
Speaker 6: type of thing. We've contemplated that before. But to me,
Speaker 6: I think the really key thing is that shareholders get
Speaker 6: to vote on the future of the company, not just
Speaker 6: on a compensation package. The compensation package is the instantiation
Speaker 6: of the goals and ambition, the super ambitious goals that
Speaker 6: we have as a company, and so I think with
Speaker 6: this proposal, it's really up to shareholders what the future
Speaker 6: of Tesla looks like.
Speaker 5: Robin Dunholm, Chair of Tesla's board. There is a key
Speaker 5: shareholder vote in November on what is We've said it
Speaker 5: an unprecedented proposal on a compensation package for Elon Musk
Speaker 5: set against very high bar deliverables. But what a conversation
Speaker 5: Caroline to inform the understanding of some of those deliverables
Speaker 5: back to you in New York.
Speaker 2: And on ambitious plan to be the most valuable company
Speaker 2: in history. What a wonderful chance to be there with
Speaker 2: Robin Denhalm, and we leave you, thank you very much. Indeed,
Speaker 2: let's check in back on these markets, because Tesla is
Speaker 2: having a good day. It is up five point four percent.
Speaker 2: It's been up yesterday as well, some six percent when
Speaker 2: riding high. And remember a trillion dollar company with the
Speaker 2: aim of becoming a two trillion at least for the
Speaker 2: first tranch of that voting, and indeed that money going
Speaker 2: to Elil Musk. But I want to focus in on
Speaker 2: also what's happening elsewhere in the markets, because we are
Speaker 2: having a strong day for the NASDAG, we're having a
Speaker 2: strong day for Paramount and Warner Brothers. What about the
Speaker 2: Discovery now up fifteen percent. It was digest that reporting
Speaker 2: that Paramount under David Ellison and with the help of
Speaker 2: his one Larry Allison might indeed take Warner Brothers Discovery
Speaker 2: by the whole lot, not even just the areas of
Speaker 2: the studios and streaming throughout fifteen percent. Elsewhere in the market,
Speaker 2: we're looking at Apple delaying the launch of its new
Speaker 2: iPhone Air in mainland China citing regulatory approval issues. Let's
Speaker 2: just get out to the most global consumer Tech Managing
Speaker 2: the editor, Mark German, this seems to be pretty seismic,
Speaker 2: the fact that they're not going to be selling the
Speaker 2: Air in China right now.
Speaker 8: At least it's a big deal because if any market
Speaker 8: was going to be a hot market for the iPhone Air,
Speaker 8: it is China, where they have a lot of fashion
Speaker 8: forward consumers who want to whip out the latest and greatest,
Speaker 8: slimmest iPhone, the newest looking phone.
Speaker 7: That's why iPhones sell in China.
Speaker 8: Remember they came out with the gold iPhone a decade
Speaker 8: and change ago because they knew that people in China
Speaker 8: wanted to buy those types of phone. So this is
Speaker 8: disappointing in terms of a delay for the iPhone Air
Speaker 8: in China. And it is a bit of a change
Speaker 8: because just a few days ago when they introduced the
Speaker 8: iPhone Air, they said on their website the pre orders
Speaker 8: would begin on September twelfth, two day and it would
Speaker 8: go on sale on September nineteenth. So something happened in
Speaker 8: the last few days that led the company to postpone
Speaker 8: it now. eSIM technology is at the very heart of
Speaker 8: this phone. Physical sim cards cannot fit in this super
Speaker 8: slim five point six reframe the problem. eSIM is not
Speaker 8: really ubiquitous or plentiful in China like it is in
Speaker 8: the US and many other countries. So initially, when this
Speaker 8: phone was supposed to go on sale in China next week,
Speaker 8: it was only to be available on one carrier, and
Speaker 8: not even the country's biggest carrier, that's China Unicon. And
Speaker 8: even more so, anyone who bought the iPhone Air would
Speaker 8: have to go to a physical China Unicon retail store,
Speaker 8: which is a bit of a headache. So even if
Speaker 8: it did launch on time, it wouldn't be so smooth.
Speaker 8: Maybe they're waiting for them to be able to launch
Speaker 8: and have a smooth release, and maybe they feel like
Speaker 8: that's the better approach. So we'll see how long it takes,
Speaker 8: but I'm sure Apple is on the case to get
Speaker 8: this done quickly.
Speaker 2: Mark Gaman always with a breaking we so appreciate it.
Speaker 2: Now to other breaking news. On a fundraise US satellite
Speaker 2: bus companies, especially a spacecraft manufacturer. It's called Apex. It's
Speaker 2: just raised two hundred million dollars in funding brings the
Speaker 2: company's valuation to over a billion dollars. I please to
Speaker 2: welcome to the show in Cinemai, CEO and co founder
Speaker 2: of APEX. And as always we ask the money, what
Speaker 2: are you going to be using it for?
Speaker 9: Ian, We're really using it to expand the factory that
Speaker 9: you see behind me right here. So what it really
Speaker 9: comes down to is there's a massive shift in the
Speaker 9: industry away from building these very expensive exquisite systems into
Speaker 9: moving towards what we call proliferated systems. So how are
Speaker 9: we launching hundreds of satellites into orbit to really supply
Speaker 9: for constellations, for commercial applications, government applications, and more.
Speaker 7: And that requires manufacturing.
Speaker 9: Satellite platforms at scale, and for us here in what
Speaker 9: we call Factory one here in Los Angeles at APEX.
Speaker 9: Before this funding round, we were able to produce about
Speaker 9: twelve satellites per month out of this facility, and now we're.
Speaker 7: Able to up that to about eighteen.
Speaker 9: We are continuing to scale that manufacturing though, because the
Speaker 9: demand is even far higher than that.
Speaker 2: Talk to us about that demand. You're providing essential services
Speaker 2: basically to all satellites that need to survive in space.
Speaker 2: I'm interested in as to whether that demand glut at
Speaker 2: the moment is coming from the government or is it
Speaker 2: coming more from the private commercial side of things.
Speaker 7: It's a great question. It's actually coming from both.
Speaker 9: So the one that you know is very out there,
Speaker 9: and we talk about a lot is things like Golden
Speaker 9: Dome and a lot of the US defense initiatives that.
Speaker 7: Are pushing for getting more and more of these capabilities
Speaker 7: into space. Space truly is the ultimate high ground.
Speaker 9: We're in the middle of what we call a new
Speaker 9: space race right now, where it's the US against our adversaries,
Speaker 9: and we're not in a position to win unless.
Speaker 7: We increase that manufacturing.
Speaker 9: So this demand for constellations is very heavily coming from
Speaker 9: the government side, but we're also seeing it starting to
Speaker 9: emerge on the commercial side as well. Companies like SpaceX
Speaker 9: have really pioneered commercial constellations, like Starlink and others, and
Speaker 9: now we're seeing a lot of other companies follow suit.
Speaker 7: Even just today, right the new Apple.
Speaker 9: Products went for sale, where all of those iPhones are
Speaker 9: able to connect to satellites, the new Apple watches connect
Speaker 9: to satellites, and seeing more and more of those constellation requirements.
Speaker 7: For what we experience every day with consumer electronics, it
Speaker 7: just continues to grow.
Speaker 2: I mean it's interesting in that there's been a lot
Speaker 2: of pressure put on Apple CEO Tim Cook to make
Speaker 2: more in America. You on your website when you go there,
Speaker 2: you've proudly made in the USA. But how much are
Speaker 2: you relying on components coming from abroad? How much are
Speaker 2: you trying to ensure that you're sort of self sufficient here.
Speaker 9: So we did an assessment as soon as the terriffs
Speaker 9: came out, and we said are we impacted at all?
Speaker 9: And the impact was pretty much zero. And the reason
Speaker 9: for that is we really are using US components. But
Speaker 9: it goes a step further than just US components. Almost
Speaker 9: everything that we're building we actually vertically integrate and build
Speaker 9: in house here in our facility and then our expansion
Speaker 9: facility right next door. So by bringing all of that
Speaker 9: in house, we really control our own destiny, control the
Speaker 9: supply chain, and are able to ensure that it's not
Speaker 9: just about building a law lot of these satellite platforms,
Speaker 9: but it's about building a lot of them incredibly quickly.
Speaker 2: To control your own destiny, I just need the resources
Speaker 2: in terms of the production side, but you also need
Speaker 2: the talenty in how easy or hard is that? Right now?
Speaker 9: I have to say we are in Los Angeles, which
Speaker 9: I consider it to be one of the aerospace capitals
Speaker 9: of the world. Right just down the street is companies
Speaker 9: like SpaceX or rocket Lab or the Jet Propulsion Lab Laboratory.
Speaker 9: We have amazing companies around us, so we're able to
Speaker 9: source great talent. From that being said, we always need
Speaker 9: more people. We are hiring dozens and soon to be
Speaker 9: hundreds of roles. We're looking to bring on a lot
Speaker 9: more people, and frankly, there's not that many people with.
Speaker 7: The skill sets are actually required.
Speaker 9: So we are very much looking forward to seeing kind
Speaker 9: of an increase attention towards aerospace and a lot of
Speaker 9: students studying this in order for them to come eventually
Speaker 9: join us here at APEX.
Speaker 2: Join you help serve clients that include ANDRILL that include NASA.
Speaker 2: You've talked about how much everyone focuses on the defense
Speaker 2: and the government side of things, but there is this
Speaker 2: real spurring coming from private sector. But if you could
Speaker 2: ask the US government for one thing right now, in
Speaker 2: because they are focused on your area, what would it be?
Speaker 9: I would say, it is rethinking how we do acquisition.
Speaker 9: So traditionally, on the government side of things, it's been
Speaker 9: working the same way for decades, which is the government
Speaker 9: will say I need some capability, and then they go
Speaker 9: out and they pay people to go build a specific
Speaker 9: product for those capabilities.
Speaker 7: What we do here at APEX is very different.
Speaker 9: We take our investor capital, like this two hundred million
Speaker 9: dollar round led by Actual and TOM at Interlagos. We
Speaker 9: take that capital and we invest that into actually building
Speaker 9: products before the government ever says that they need it,
Speaker 9: and then once the government realizes they need it, we're
Speaker 9: able to supply it to them in a matter of
Speaker 9: days or weeks or months instead of having to wait
Speaker 9: for years. It also costs way less on the taxpayers
Speaker 9: by us getting ahead of it. The problem is not
Speaker 9: all of government procurement has caught up to that strategy,
Speaker 9: where they're still putting out quirements asking.
Speaker 7: For people to make things custom and new.
Speaker 9: So our big push is, if I would ask one
Speaker 9: thing of the US government, it's focus on commercially available
Speaker 9: off the shelf parts, actual products like we here we
Speaker 9: have here at APEX, instead of reinventing the wheel every
Speaker 9: time in Cinnamon.
Speaker 2: I mean, just months after racing your series C you're
Speaker 2: on your series D Minte Lagos, as you say, leading
Speaker 2: that roundy in Cinnamon Apex CEO live from Los Angeles,
Speaker 2: we appreciate it. Now coming up, Julie Sweet, CEO of Extension,
Speaker 2: is going to be joining us to discuss the pace
Speaker 2: of AI adoption in the enterprise. So much more than
Speaker 2: that as well. The Supreme Big Tech A stat you
Speaker 2: nearly eighty five percent of C suite leaders plan to
Speaker 2: increase AI spending this year even if a recession happens
Speaker 2: by the end of the year. That's all, according to Extenture,
Speaker 2: is latest Pulsive Change survey giving insights into how talent
Speaker 2: and technology trends we are shaping and driving change within business.
Speaker 2: Perfect person to discuss it with Judy Suite Accentia CEO.
Speaker 2: It is wonderful to have you here, Julie on the show,
Speaker 2: and it comes at the perfect time because there's been
Speaker 2: anxiety in the market MIT reports, for example, making people
Speaker 2: question the return on AI investment and deployment. What are
Speaker 2: you hearing from the C suite?
Speaker 10: Well, Caroline, thanks for having me. The number one topic
Speaker 10: I've been with five CEOs in the last five days,
Speaker 10: the number one topic is how do I scale AI?
Speaker 10: How do I make sure it's embedded in how we
Speaker 10: operate every day? And that is because there's a huge
Speaker 10: difference between how we're all using AI every day in
Speaker 10: our individual lives. That's easy, but AI in how you
Speaker 10: operate an enterprise is hard, which is of course why
Speaker 10: you know our clients call us because we're seeing that ROI.
Speaker 10: Whether we're working with an industrial player entire manufacturers that
Speaker 10: now identifies defects in minutes instead of days, or a
Speaker 10: consumer goods company where we've saved twenty million dollars in
Speaker 10: the first year using advanced AI to help access inventory.
Speaker 10: The difference between the MIT report and what we're seeing
Speaker 10: and helping our clients do is they're getting the ROI.
Speaker 2: Julie, those five CEOs you've seen him the last five days,
Speaker 2: busy person, are they seeing us from the long term perspective?
Speaker 2: They got the patients that perhaps some in the market don't.
Speaker 10: Absolutely they understand that AI is going to reinvent every
Speaker 10: aspect of the enterprise and that's a long term game.
Speaker 10: And so what they're asking me to an accenture to
Speaker 10: help with is how do you create, how do you
Speaker 10: prioritize And the answer is you prioritize starting with your
Speaker 10: business strategy, the readiness of the technology, and your organization alreadiness.
Speaker 10: Where in your organization do you have the confidence that
Speaker 10: they can embrace Because embracing AI is about changing the
Speaker 10: way you work, changing your workforce and changing the workbench.
Speaker 10: You know how you actually get work done, and so
Speaker 10: absolutely long term view and where we're helping.
Speaker 2: Is how do you actually execute on that view? I
Speaker 2: thought some of the statistics were fascinating, the seventy five
Speaker 2: percent of c Sweet Leader's survey saying the pace of
Speaker 2: AI change is moving faster than actually they can currently
Speaker 2: prepare their workforce for. I'm going to ask a sensitive
Speaker 2: one because I'm showing here the Wall Street Journal right
Speaker 2: up that happened earlier this week talking about it's pretty
Speaker 2: damning actually about consultants and saying that basically, at the moment,
Speaker 2: this is such new technology that you can't buy the
Speaker 2: experience you need, quoting consultants who often had no more
Speaker 2: expertise on AI than they did internally struggle to deploy
Speaker 2: use cases that created real business value. Can you respond
Speaker 2: to that, Julie, you must have seen that story and
Speaker 2: been wrinkled by it.
Speaker 10: Sure. Look, when you think about the new waves of
Speaker 10: technology and why Eccentric has been successful for the last
Speaker 10: decades is because we have the ability to reinvent train people.
Speaker 10: So we went from thirty people trained in Jenai in
Speaker 10: November twenty twenty two to over five hundred thousand trained today.
Speaker 10: Companies can't do that. By definition, every new wave of
Speaker 10: technology has a time for where you've got to train
Speaker 10: and retool, and Eccentric's core competency is being able to
Speaker 10: do that at scale to help all of our clients.
Speaker 10: Our clients can't possibly build all of that expertise that
Speaker 10: they need without an accenture to be able to help
Speaker 10: them scale, and so it's absolutely core. And think about
Speaker 10: the way that we've been training, right, we have gone
Speaker 10: from forty thousand to eighty thousand data and AI profectionals
Speaker 10: in the last three years. That's enormous, right, We've trained
Speaker 10: over five hundred thousand people and starting just this month,
Speaker 10: we're now training all of our over seven hundred thousand
Speaker 10: people in the basics of a gentic AI. Our clients
Speaker 10: come to us to say, we need your help to
Speaker 10: do this and help us with our talent, which is
Speaker 10: why we launched our learned vantage business.
Speaker 2: So when a Bristol Marskquib Chief Digital officer says there's
Speaker 2: no more experience within the Big four, for example, talking
Speaker 2: about arrivals than a kid in college, you say, no,
Speaker 2: not true. Look at what we're.
Speaker 10: Doing absolutely and you can see that in the again
Speaker 10: in the actual results. So starting with Accentsure right, we've
Speaker 10: deployed at scale in areas like sales, which we're rewiring.
Speaker 2: We're using AI.
Speaker 10: To get our proposals faster, We're using it to get
Speaker 10: to market faster, and then we're taking those solutions to
Speaker 10: our client who are adapting them. We're working with a
Speaker 10: global bank right now where they're now creating having conversational
Speaker 10: AI in a single global platform and they're already seeing
Speaker 10: a double in double sales on their mobile app than
Speaker 10: they had before.
Speaker 2: But what in order to do that?
Speaker 10: That wasn't something you did at the edge. The first
Speaker 10: thing we had to do was build the foundation with
Speaker 10: them to actually be able to do that. The reason
Speaker 10: enterprise AI is hard is because it's not what you
Speaker 10: experience every day. Putting in a question, summarizing your emails,
Speaker 10: creating new power points. It's about actually rewiring the way
Speaker 10: that you do work your processes and understanding where you
Speaker 10: get value. And we're doing that at two thousand different
Speaker 10: projects at a time. And that's the experience we bring
Speaker 10: to our clients.
Speaker 2: And how does it affect your people, your talent pool,
Speaker 2: your hiring processes at the moment? Are are you slowing
Speaker 2: hiring a tool at the moment, Julie, are you turning
Speaker 2: to graduates more or less?
Speaker 10: When you think about the workforce, think about it in
Speaker 10: three things that you have to do. You have to
Speaker 10: upskill the people that you have right, give them the skills.
Speaker 10: That's why everybody's being trained in Agenta Gayi in the
Speaker 10: same way everyone was trained with Jenai. You have to
Speaker 10: do a talent rotation. There are some people that won't
Speaker 10: make the journey right. You have a mismatch in skills
Speaker 10: and you're not able to train you know everyone, and
Speaker 10: then you also will have efficiencies. So if you keep
Speaker 10: that framework in upskilling, talent rotation and efficiencies, that really
Speaker 10: kind of answers the workforce strategy that not only Accentua has,
Speaker 10: but all companies need to have.
Speaker 2: And certainly your clients like Palentea and Video Aws, to
Speaker 2: name but a few. We thank you so much for
Speaker 2: taking time amid a very busy circuit of all the
Speaker 2: other CEOs that you speak to on a daily basis.
Speaker 2: Judy Sweep CEO, wonderful to have some time and expertise
Speaker 2: with you. Now coming up, Gemini is about to make
Speaker 2: its trading debut today. We'll discuss what to expect next.
Speaker 2: This is Bloomberg Tech Gemini making its public debut today.
Speaker 2: This after a hot week for tech IPOs. To say
Speaker 2: the very least, Bloomberg's Bailey Lipshals covers all things IPOs
Speaker 2: joins us. Now another crypto related one, another one that's
Speaker 2: going to pop on the open if indications are right.
Speaker 2: We're currently seeing thirty two dollars is where we're currently
Speaker 2: indicated having price at twenty eight dollars. Why do people
Speaker 2: want in on the Winklevoss twins.
Speaker 11: I think people want in on pretty much anything crypto.
Speaker 11: As you mentioned, we've seen some pretty strong rallies. To
Speaker 11: start yesterday, Figure a blockchain company, rallied pretty sharply in
Speaker 11: his trading higher again today, really betting on the future
Speaker 11: of crypto. Winklevoss twins with Gemini not the biggest player,
Speaker 11: not really one of the biggest players as it comes
Speaker 11: to exchanges, but they've broader pitches. If we are going
Speaker 11: to go to a future for crypto where it's a
Speaker 11: bigger part of the financial institutions and bringer part of finance,
Speaker 11: then investors are really putting money to work because of
Speaker 11: just that scarcity value.
Speaker 2: Scarcely value, particularly when before the test it felt like
Speaker 2: was you need to be profitable, you need to have
Speaker 2: really shown the bottom line growth, not just top line.
Speaker 2: Gemini doesn't really have that.
Speaker 11: No, not at all, And when you talk to investors
Speaker 11: like I have been doing, it's really a question of
Speaker 11: are you just kind of putting money to work in
Speaker 11: what should be or could be the next exchange again
Speaker 11: to go of the IPO to retail investors, so leaning
Speaker 11: into that retail trend. This has been something we've been
Speaker 11: tracking with the last handful of deals, but it really
Speaker 11: seems like the kind of bet is maybe further away
Speaker 11: from institutions and betting more on some of those individual
Speaker 11: investors on a Robin huro Sofi to put their money
Speaker 11: to work and buy and hold the stock and really
Speaker 11: support it in.
Speaker 2: The aftermarket, beilian very quickly. Why is it called space station?
Speaker 7: I don't know.
Speaker 11: As someone I was talking, you kind of assumed it
Speaker 11: has to do with the whole I don't know, rockets
Speaker 11: going to the moon and sending cryptotoke into the moon.
Speaker 11: I have not gotten a real answer. So if you
Speaker 11: find an answer, I would love to know.
Speaker 2: Audience, give us your real answers or your funny ones too.
Speaker 2: Bloomberg's Bailey Lipschutz is a joy having you. Thank you,
Speaker 2: Happy weekend. Meanwhile, that does it for this edition of
Speaker 2: Bloomberg Tech Recapping. We've had plenty to talk about this show,
Speaker 2: and just at the very first half we were talking
Speaker 2: about Tesla, the future of the pay package for one
Speaker 2: Elon Musk. We spoke with Robin Denholm. Of course, the
Speaker 2: chare board really honing in on the fact that we're
Speaker 2: seeing a political motivations of Elon's that are his. The
Speaker 2: Tesla chair telling us the board also takes very seriously
Speaker 2: any safety incidents within Tesla cars, in particular on the
Speaker 2: back of that reporting around the cyber truck from our
Speaker 2: own Bloomberg News colleagues, and Denholm says the pay package
Speaker 2: does contemplate different roles the musk, not just CEO. We'll
Speaker 2: sell up six percent. Don't forget to check out our podcasts,
Speaker 2: finding on the terminal, as well as online on Apple
Speaker 2: and Spotify. This says pretty bad.