1 00:00:01,639 --> 00:00:05,320 Speaker 1: From the heart where Innovation, Money and power. Collie in 2 00:00:05,440 --> 00:00:10,720 Speaker 1: Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde. 3 00:00:10,400 --> 00:00:11,320 Speaker 2: And Ed Ludlove. 4 00:00:25,200 --> 00:00:27,640 Speaker 3: I'm Caroline Heyde of Bloomberg's World headquarters in New York 5 00:00:28,160 --> 00:00:29,760 Speaker 3: and Imed Ludlow in San Francisco. 6 00:00:29,880 --> 00:00:31,320 Speaker 4: This is Bloomberg Technology. 7 00:00:31,400 --> 00:00:34,200 Speaker 3: Coming up, we break down Disney's results. As the media 8 00:00:34,240 --> 00:00:38,760 Speaker 3: giant takes a hit amid the battle for streaming dominance class. 9 00:00:38,760 --> 00:00:41,199 Speaker 5: We'll bring you my conversations from Google io and here 10 00:00:41,240 --> 00:00:44,000 Speaker 5: from the SAP CEO as the company's team up with 11 00:00:44,080 --> 00:00:47,360 Speaker 5: Google Cloud to maximize AI usage, and. 12 00:00:47,440 --> 00:00:50,760 Speaker 3: Microsoft announcing it's freezing salaries this year. As the tech 13 00:00:50,760 --> 00:00:53,960 Speaker 3: giant looks to navigate economic uncertainty, we'll bring you the 14 00:00:54,000 --> 00:00:56,960 Speaker 3: details so much more this hour. And the market too 15 00:00:57,320 --> 00:00:59,880 Speaker 3: is trying to navigate economic concertainty at the moment. War 16 00:01:00,120 --> 00:01:02,560 Speaker 3: is about the debt ceiling, worries about the ongoing concerns 17 00:01:02,600 --> 00:01:06,600 Speaker 3: around US banks, and yet tech in outperforms. We're up 18 00:01:06,600 --> 00:01:08,440 Speaker 3: only a tenth of a percent and managed to shake 19 00:01:08,480 --> 00:01:10,240 Speaker 3: off some of the nerves and the rest of the 20 00:01:10,280 --> 00:01:13,039 Speaker 3: market at the moment, we're up just some fifteen points. Now, 21 00:01:13,040 --> 00:01:15,440 Speaker 3: there was economic data that the jobless claim showed some 22 00:01:15,520 --> 00:01:18,759 Speaker 3: worry about the slowing in the jobs market, inflatory pressure 23 00:01:18,840 --> 00:01:21,000 Speaker 3: dialing back a little bit when it comes to producer prices, 24 00:01:21,000 --> 00:01:23,600 Speaker 3: the two year yield is coming down on that perhaps 25 00:01:23,600 --> 00:01:26,320 Speaker 3: fall down in the inflationary pressure. But does this mean 26 00:01:26,360 --> 00:01:29,040 Speaker 3: some sort of restrastionary environment? That is probably the watchword 27 00:01:29,080 --> 00:01:31,720 Speaker 3: for today. We're look at KBW bank index under pressure 28 00:01:31,760 --> 00:01:33,520 Speaker 3: with of course pack West the one that we look 29 00:01:33,520 --> 00:01:35,360 Speaker 3: at front and center. Let's stal it on AND's of 30 00:01:35,360 --> 00:01:37,479 Speaker 3: cour's happening in terms of the desire to get into 31 00:01:37,480 --> 00:01:39,280 Speaker 3: a haven means the dollar is going higher, it means 32 00:01:39,319 --> 00:01:41,240 Speaker 3: crypto is going lower off by two and a half percent. 33 00:01:41,480 --> 00:01:43,880 Speaker 3: So Bitcoin currently training at twenty seven thousand on the 34 00:01:43,959 --> 00:01:45,600 Speaker 3: day ed. But go into some of the micro the 35 00:01:45,640 --> 00:01:46,480 Speaker 3: earnings and the like. 36 00:01:47,160 --> 00:01:49,480 Speaker 5: Yeah, actually, outside of earnings, there's quite a lot of newsflow. 37 00:01:49,560 --> 00:01:50,600 Speaker 4: There's driving these moves. 38 00:01:50,640 --> 00:01:53,000 Speaker 5: Peloton a recall of two point two million bits. We're 39 00:01:53,000 --> 00:01:54,280 Speaker 5: going to get into that late in the show with 40 00:01:54,280 --> 00:01:56,600 Speaker 5: Bloomber's Mark Gunman. But at one point in the session 41 00:01:56,600 --> 00:01:59,200 Speaker 5: that's stock at a record low. It's having an impact. 42 00:01:59,360 --> 00:02:03,600 Speaker 5: Alphabet pair of Google up significantly five percent, biggest jump 43 00:02:03,640 --> 00:02:04,760 Speaker 5: since the first week of February. 44 00:02:04,760 --> 00:02:06,200 Speaker 4: It's trading at August high. 45 00:02:06,360 --> 00:02:09,040 Speaker 5: The market like what it heard about what they're doing 46 00:02:09,080 --> 00:02:10,680 Speaker 5: in the field of AI, and we will hear more 47 00:02:10,680 --> 00:02:12,960 Speaker 5: about that as well. Interesting that some of its peers 48 00:02:13,080 --> 00:02:15,720 Speaker 5: in the AI space, Microsoft and Video a little softer, 49 00:02:16,000 --> 00:02:18,840 Speaker 5: both of them down around to both of them down 50 00:02:18,880 --> 00:02:22,200 Speaker 5: around eight tenths of one percent. Disney is the big 51 00:02:22,240 --> 00:02:25,000 Speaker 5: mover to the downside, and that one is on earnings 52 00:02:25,040 --> 00:02:28,600 Speaker 5: and miss on subscribers and profit in the current period 53 00:02:28,600 --> 00:02:32,240 Speaker 5: a loss will be wider or widening from the past quarter. 54 00:02:32,600 --> 00:02:35,320 Speaker 5: It's interesting because they're still on track to meet that 55 00:02:35,360 --> 00:02:38,200 Speaker 5: cost reduction goal, but there are some worrying signs about 56 00:02:38,200 --> 00:02:41,120 Speaker 5: the cost of streaming. It's streaming or nothing, so let's 57 00:02:41,160 --> 00:02:44,440 Speaker 5: stick with Disney. Bringing bloombergs Chris Palmery from LA That 58 00:02:44,560 --> 00:02:47,280 Speaker 5: subscriber miss Chris was quite interesting because it seems to 59 00:02:47,320 --> 00:02:50,560 Speaker 5: be showing the impact of bringing in an AD supported 60 00:02:50,639 --> 00:02:53,639 Speaker 5: tier in the quarter gone right. 61 00:02:53,800 --> 00:02:56,600 Speaker 6: I mean, some people would argue a cheaper air supported 62 00:02:57,600 --> 00:03:00,520 Speaker 6: a tier would bring in new subscribers, but need out 63 00:03:00,520 --> 00:03:04,040 Speaker 6: for the second quarter has lost Disney plus subscribers overall. 64 00:03:04,560 --> 00:03:05,560 Speaker 4: That's partly with. 65 00:03:05,800 --> 00:03:08,280 Speaker 6: When they introduced the new tier, they really raised the 66 00:03:08,400 --> 00:03:11,400 Speaker 6: cost of the ad free version thirty eight percent, and 67 00:03:11,440 --> 00:03:13,960 Speaker 6: so I think you're definitely seeing some people canceled for 68 00:03:14,000 --> 00:03:18,320 Speaker 6: that reason, and there's concern now have we peaked in 69 00:03:18,480 --> 00:03:19,600 Speaker 6: streaming penetration. 70 00:03:19,800 --> 00:03:21,840 Speaker 4: That's that obviously is worrisome. 71 00:03:22,520 --> 00:03:25,639 Speaker 3: Christy McCarthy, the CFO, though, trying to cast this as 72 00:03:25,639 --> 00:03:28,000 Speaker 3: a blit when it comes to increased spending from a 73 00:03:28,000 --> 00:03:31,760 Speaker 3: marketing perspective, Chris, why don't investor sort of seeing it 74 00:03:31,800 --> 00:03:32,080 Speaker 3: as that. 75 00:03:33,720 --> 00:03:35,640 Speaker 6: Well, you know, that's the thing is that there's been 76 00:03:35,640 --> 00:03:37,880 Speaker 6: so much focus in the last few months and less 77 00:03:37,880 --> 00:03:40,600 Speaker 6: on subscriber growth in these companies and more on let's 78 00:03:40,640 --> 00:03:42,920 Speaker 6: ring profits from this, but now this seems to be 79 00:03:43,080 --> 00:03:46,920 Speaker 6: now a focus on both as well. It's going to 80 00:03:46,920 --> 00:03:48,400 Speaker 6: be difficult. There was a lot of things on the 81 00:03:48,400 --> 00:03:52,520 Speaker 6: call to ponder suggestions. For example, that Dieiger now lights 82 00:03:52,560 --> 00:03:55,720 Speaker 6: the WHO streaming service, wants to keep to that and 83 00:03:55,960 --> 00:03:58,640 Speaker 6: that which means they'll have to buy out the one 84 00:03:58,760 --> 00:04:01,400 Speaker 6: third of WHO that they done. There's also a big 85 00:04:01,440 --> 00:04:04,440 Speaker 6: write off on content that they're now no longer putting 86 00:04:04,440 --> 00:04:05,160 Speaker 6: on the services. 87 00:04:05,160 --> 00:04:06,560 Speaker 4: So at the same time they're talking. 88 00:04:06,400 --> 00:04:09,440 Speaker 6: About raising the cost of the Disney Plus service, they're 89 00:04:09,440 --> 00:04:12,480 Speaker 6: reducing the programming on it, so there's a lot of 90 00:04:12,600 --> 00:04:14,040 Speaker 6: uncertainty and streaming right now. 91 00:04:14,360 --> 00:04:15,880 Speaker 4: And also, I. 92 00:04:15,840 --> 00:04:18,960 Speaker 3: Mean the people who've left from the streaming unit as well, 93 00:04:19,000 --> 00:04:21,120 Speaker 3: the fact that all at the same time they are 94 00:04:21,279 --> 00:04:24,360 Speaker 3: thinking about costs, they are cutting into their labor, into 95 00:04:24,400 --> 00:04:26,920 Speaker 3: their talent pool, and a large lot of that comes 96 00:04:26,920 --> 00:04:31,040 Speaker 3: from the people who actually launched Disney Plus right right, And. 97 00:04:31,120 --> 00:04:33,120 Speaker 6: You know, overall we're in the midst of Disney's in 98 00:04:33,120 --> 00:04:36,400 Speaker 6: the midst of a seven thousand person reduction, hoping to 99 00:04:36,440 --> 00:04:37,080 Speaker 6: say five and a. 100 00:04:37,080 --> 00:04:39,280 Speaker 4: Half million billion dollars in costs. 101 00:04:39,920 --> 00:04:42,480 Speaker 6: You know, this was not the maximum quarter for that. 102 00:04:42,560 --> 00:04:44,680 Speaker 6: It'll be the current one where a lot of the 103 00:04:44,680 --> 00:04:47,560 Speaker 6: people were let go. But there wasn't a lot of discussion. 104 00:04:47,560 --> 00:04:49,839 Speaker 6: They said they're on progress to meet those targets, but 105 00:04:50,080 --> 00:04:53,159 Speaker 6: not a lot of discussion about how much they're really saving. 106 00:04:54,000 --> 00:04:57,800 Speaker 6: And we'll see this year. So that's another concern. The 107 00:04:57,880 --> 00:04:58,800 Speaker 6: discussion across. 108 00:04:58,560 --> 00:05:02,560 Speaker 5: Spinningbek Television Radio Morning is whether Disney is a technology 109 00:05:02,600 --> 00:05:05,520 Speaker 5: company or if it's a media and entertainment company. 110 00:05:05,560 --> 00:05:06,880 Speaker 4: And it's interesting the. 111 00:05:06,800 --> 00:05:11,920 Speaker 5: Bright Spot Chris the Park's business technology company that operates 112 00:05:11,920 --> 00:05:12,719 Speaker 5: a park's business. 113 00:05:14,400 --> 00:05:17,440 Speaker 6: Well, they would certainly like to think that they're technologically savvy. 114 00:05:17,480 --> 00:05:19,320 Speaker 6: You know, they have all these you know, you can 115 00:05:19,440 --> 00:05:22,800 Speaker 6: order online, everything's you know, through your app nowadays you're 116 00:05:22,960 --> 00:05:25,080 Speaker 6: you know, you pay a little extra ZiT the app 117 00:05:25,120 --> 00:05:26,520 Speaker 6: and you can cut the line on the rides. 118 00:05:26,760 --> 00:05:28,039 Speaker 4: So there's a whole lot going on there. 119 00:05:28,080 --> 00:05:31,000 Speaker 6: But yeah, but basically this is an experiential business. 120 00:05:31,520 --> 00:05:31,880 Speaker 2: Uh. 121 00:05:31,920 --> 00:05:34,360 Speaker 6: And you know it's certainly in the future we'll all 122 00:05:34,400 --> 00:05:37,680 Speaker 6: be watching things online. But you know, it depends on 123 00:05:38,000 --> 00:05:41,320 Speaker 6: you know, really human interaction to to make those great 124 00:05:41,360 --> 00:05:44,920 Speaker 6: movies and TV shows work. So you know, I would 125 00:05:44,960 --> 00:05:48,320 Speaker 6: put Disney in the media and entertainment category more than tech. 126 00:05:48,440 --> 00:05:52,120 Speaker 7: And Chris, did they mention AI, Yes, it was a 127 00:05:52,160 --> 00:05:56,120 Speaker 7: discussion of that, And you know, I don't think that 128 00:05:56,120 --> 00:05:59,400 Speaker 7: there's there's there seems to be agreement in Hollywood that 129 00:05:59,800 --> 00:06:03,200 Speaker 7: this is not going to completely replace the screenwriter and 130 00:06:04,600 --> 00:06:08,000 Speaker 7: and so we'll see how that plays out in negotiations 131 00:06:08,000 --> 00:06:10,760 Speaker 7: with the writers strike because the writers want that sort 132 00:06:10,760 --> 00:06:11,320 Speaker 7: of in writing. 133 00:06:11,880 --> 00:06:14,400 Speaker 3: Well, thanks for bringing it back to all things Hollywood 134 00:06:14,440 --> 00:06:17,159 Speaker 3: that you cover as well, Chris, how mary brilliant breakdown 135 00:06:17,160 --> 00:06:19,560 Speaker 3: on what's happening with Disney, and let's talk a little 136 00:06:19,560 --> 00:06:22,240 Speaker 3: bit more about how AI is uphending the way in 137 00:06:22,240 --> 00:06:24,880 Speaker 3: which people are thinking about investing in tech and otherwise 138 00:06:24,880 --> 00:06:27,320 Speaker 3: in the moment, please to just dive into the markets 139 00:06:27,320 --> 00:06:29,280 Speaker 3: a little bit more with Sylvia Jablonski. She's to find 140 00:06:29,320 --> 00:06:32,080 Speaker 3: CTF CEO CIO overseeing what nine hundred million dollars in 141 00:06:32,120 --> 00:06:34,880 Speaker 3: assets under management and some of your ETFs really catering 142 00:06:34,880 --> 00:06:38,279 Speaker 3: to the focus on AI at the moment, Sylvia, And 143 00:06:38,400 --> 00:06:41,680 Speaker 3: do you worry that there's hype priced in or are 144 00:06:41,680 --> 00:06:44,160 Speaker 3: we underestimating the amount of change and the amount of 145 00:06:44,600 --> 00:06:46,240 Speaker 3: well value that can be found. 146 00:06:47,360 --> 00:06:49,880 Speaker 8: Oh, good wording and great to be here with you today. Well, 147 00:06:49,960 --> 00:06:53,160 Speaker 8: I think that we're you know, I think the rise 148 00:06:53,200 --> 00:06:56,800 Speaker 8: in the stack price this year is you know, perhaps 149 00:06:56,960 --> 00:06:59,120 Speaker 8: on some of the zuber ands over AI. But don't 150 00:06:59,120 --> 00:07:01,120 Speaker 8: forget that twenty twenty too. It's very much a tech 151 00:07:01,160 --> 00:07:02,800 Speaker 8: recession here. So I think a lot of that is 152 00:07:02,880 --> 00:07:06,279 Speaker 8: catch up and then the inertia behind the AI build 153 00:07:06,279 --> 00:07:08,520 Speaker 8: out is something that you know, helped propel gains. But 154 00:07:08,920 --> 00:07:11,440 Speaker 8: I do think it's underestimated. I do think that tech 155 00:07:11,480 --> 00:07:13,800 Speaker 8: has a long way to go, and you know, with 156 00:07:13,960 --> 00:07:17,640 Speaker 8: that comes some other components of tech like semiconductor companies. 157 00:07:17,680 --> 00:07:21,679 Speaker 8: For example, AI is just beginning and it's been around 158 00:07:21,680 --> 00:07:23,240 Speaker 8: for a couple of decades, but it is now just 159 00:07:23,240 --> 00:07:26,200 Speaker 8: sort of coming to fruition and becoming monetizable. So if 160 00:07:26,240 --> 00:07:28,480 Speaker 8: you think about what AI can change, it's pretty much 161 00:07:28,520 --> 00:07:32,240 Speaker 8: every sector out there, everything from healthcare you know, robotic surgery, 162 00:07:32,320 --> 00:07:37,120 Speaker 8: research to defense, you know, precise information targeting things like that, banks, 163 00:07:37,360 --> 00:07:39,960 Speaker 8: accuratetit risk, you know, preventing. 164 00:07:39,640 --> 00:07:41,120 Speaker 9: SBB types of crisses. 165 00:07:41,440 --> 00:07:43,600 Speaker 8: So we're just at the beginning of what is going 166 00:07:43,640 --> 00:07:45,920 Speaker 8: to be a major innovation in the way that we 167 00:07:46,040 --> 00:07:48,320 Speaker 8: use technology for the next decade to come. 168 00:07:48,720 --> 00:07:51,720 Speaker 3: It was interesting and yesterday when we had Scale AI 169 00:07:51,880 --> 00:07:54,040 Speaker 3: on and he was saying there's a lot of AI 170 00:07:54,200 --> 00:07:56,920 Speaker 3: tourists is what he's calling them, not much actually being 171 00:07:56,920 --> 00:08:00,240 Speaker 3: applied in the market right here right now. But are 172 00:08:00,280 --> 00:08:02,920 Speaker 3: you thinking along the hype or the reality side of things? 173 00:08:03,600 --> 00:08:06,400 Speaker 5: Well, I think it's interesting in your case, Sylvia, because 174 00:08:06,400 --> 00:08:10,520 Speaker 5: Defiance operates the Defiance quantum etf right, real emphasis on 175 00:08:10,960 --> 00:08:14,840 Speaker 5: those companies' best position to take advantage of developments and 176 00:08:14,880 --> 00:08:16,960 Speaker 5: machine learning and quantum computing. 177 00:08:17,600 --> 00:08:19,320 Speaker 4: It's not performed as well. 178 00:08:19,360 --> 00:08:21,679 Speaker 5: Here today is an as that one hundred down thirty 179 00:08:21,720 --> 00:08:26,520 Speaker 5: percent last year. What within that basket has worked well 180 00:08:26,560 --> 00:08:28,640 Speaker 5: for you and what has let you down. 181 00:08:30,000 --> 00:08:30,280 Speaker 4: Well? 182 00:08:30,320 --> 00:08:32,240 Speaker 9: So we kind of look at it a little bit differently. 183 00:08:32,320 --> 00:08:34,640 Speaker 9: I think what we try to you know, the way we. 184 00:08:34,600 --> 00:08:37,760 Speaker 8: Try to really cater this product and build this product 185 00:08:37,800 --> 00:08:40,480 Speaker 8: is to give investors access to everything that has to 186 00:08:40,559 --> 00:08:44,679 Speaker 8: do with the future of technology, machine learning, and artificial intelligence. 187 00:08:44,720 --> 00:08:47,040 Speaker 8: So in order to do that, you have to include 188 00:08:47,200 --> 00:08:49,880 Speaker 8: the big generals that are performing well, like the Apples 189 00:08:49,880 --> 00:08:55,040 Speaker 8: and Microsoft's you know, ibms NA videos on the semiconductor side, 190 00:08:55,080 --> 00:08:56,600 Speaker 8: and then you also have to include some of the 191 00:08:56,640 --> 00:08:59,640 Speaker 8: smaller companies like Amberella for example, that will be part 192 00:08:59,640 --> 00:09:01,720 Speaker 8: of the you know, the visual aspect of it. 193 00:09:01,800 --> 00:09:03,800 Speaker 9: So there are a lot of things that have to 194 00:09:03,840 --> 00:09:05,959 Speaker 9: happen in order for AI to work right. 195 00:09:06,000 --> 00:09:08,240 Speaker 8: You need to be able to gather data, you need 196 00:09:08,280 --> 00:09:10,640 Speaker 8: to be able to process data. You need a computer 197 00:09:10,720 --> 00:09:12,600 Speaker 8: that's fast enough to do it. So that's you know, 198 00:09:12,600 --> 00:09:15,200 Speaker 8: that's why it's called quantum, right. Quantum computing and the 199 00:09:15,240 --> 00:09:18,240 Speaker 8: speed to sort of process and use all of the 200 00:09:18,320 --> 00:09:19,720 Speaker 8: data is really the key to. 201 00:09:19,640 --> 00:09:20,679 Speaker 9: All of this working right. 202 00:09:20,679 --> 00:09:22,920 Speaker 8: And we already hear the criticisms of that that you 203 00:09:22,960 --> 00:09:26,520 Speaker 8: know AI or you know the initial Bard presentations. 204 00:09:25,960 --> 00:09:27,920 Speaker 9: About bad data, right, so you need all of that. 205 00:09:28,240 --> 00:09:30,920 Speaker 8: So what performed badly well, you know, high interest rates 206 00:09:30,920 --> 00:09:33,880 Speaker 8: and small cap growth stocks perform badly. But when they 207 00:09:33,880 --> 00:09:37,400 Speaker 8: do really, really well is when this innovation truly starts 208 00:09:37,400 --> 00:09:40,319 Speaker 8: to you know, transform industries and take off interest rates 209 00:09:40,360 --> 00:09:43,080 Speaker 8: start coming down, and then you get the whole basket performance. 210 00:09:43,080 --> 00:09:44,640 Speaker 8: For you put the hedge right now or the top 211 00:09:44,720 --> 00:09:47,160 Speaker 8: leading tech companies that are guiding it forward. 212 00:09:49,080 --> 00:09:51,719 Speaker 5: Defines quantum ETF up around twelve percent year today. I 213 00:09:51,720 --> 00:09:53,319 Speaker 5: think the a's that one hundreds up and twenty two 214 00:09:53,320 --> 00:09:56,760 Speaker 5: percent of something single names. What are the companies that 215 00:09:56,880 --> 00:09:59,080 Speaker 5: excite you most of what you just outlined? 216 00:10:00,559 --> 00:10:03,960 Speaker 8: Yeah, so I mean for now, just because of the 217 00:10:04,000 --> 00:10:06,839 Speaker 8: type of market environment you know we're in, I'm sort 218 00:10:06,880 --> 00:10:09,600 Speaker 8: of sensitive to that. So I'll kind of give you 219 00:10:09,640 --> 00:10:14,400 Speaker 8: the obvious ones. I think Microsoft, I think Google, Apple, Amazon, Navidia, 220 00:10:14,559 --> 00:10:17,160 Speaker 8: A M D on semiconductor. You know, all of these 221 00:10:17,160 --> 00:10:20,760 Speaker 8: companies I name first because right now, they have balance sheets, 222 00:10:20,760 --> 00:10:22,680 Speaker 8: they have cash, they can invest in R and D, 223 00:10:23,040 --> 00:10:25,320 Speaker 8: they can do M and A acquisitions, and you know, 224 00:10:25,440 --> 00:10:27,680 Speaker 8: take over companies like in the case of you know, 225 00:10:27,720 --> 00:10:29,440 Speaker 8: Microsoft big investment in open. 226 00:10:29,240 --> 00:10:31,360 Speaker 9: Ai to get chat GBT going, right. 227 00:10:31,559 --> 00:10:33,680 Speaker 8: So I think that right now they're the companies that 228 00:10:33,720 --> 00:10:36,040 Speaker 8: are going to be sort of the performers and this 229 00:10:36,320 --> 00:10:38,240 Speaker 8: you know, kind of the safest place to sit. 230 00:10:38,760 --> 00:10:40,439 Speaker 9: But some of the smaller. 231 00:10:40,080 --> 00:10:42,480 Speaker 8: Plays out there, I think again, like an umbrella we 232 00:10:42,559 --> 00:10:44,480 Speaker 8: just haven't heard about for a really long time, or 233 00:10:44,520 --> 00:10:46,160 Speaker 8: Eve going to pound here. You know, you saw them 234 00:10:46,200 --> 00:10:48,160 Speaker 8: crush earnings. I think these companies are going to start 235 00:10:48,160 --> 00:10:49,280 Speaker 8: coming to the forefront in the. 236 00:10:49,240 --> 00:10:51,400 Speaker 9: Next couple of years as they. 237 00:10:51,320 --> 00:10:54,400 Speaker 8: You know, kind of improve and exceed expectations with their 238 00:10:54,400 --> 00:10:55,679 Speaker 8: innovations that they're working on. 239 00:10:55,880 --> 00:10:59,719 Speaker 3: And Sylvia taking a more macro perspective, can those light 240 00:10:59,840 --> 00:11:03,440 Speaker 3: now aims outperform even if we see growth continue to 241 00:11:04,000 --> 00:11:06,120 Speaker 3: even slow down if we worry that we do hit 242 00:11:06,240 --> 00:11:08,840 Speaker 3: some sort of recessionary environment because the jury seems to 243 00:11:08,840 --> 00:11:10,440 Speaker 3: be out as to whether the tech is some sort 244 00:11:10,440 --> 00:11:14,160 Speaker 3: of safety play in this environment or whether it is 245 00:11:14,200 --> 00:11:16,520 Speaker 3: beholden to macrowing economic environments. 246 00:11:17,280 --> 00:11:18,800 Speaker 9: Well, I think it's a great question. 247 00:11:18,880 --> 00:11:21,760 Speaker 8: And I think that all of the you know, major 248 00:11:21,840 --> 00:11:25,680 Speaker 8: kind of indices and sectors and the top performing stocks 249 00:11:25,679 --> 00:11:27,680 Speaker 8: in those sectors are susceptible to what happens in the 250 00:11:27,679 --> 00:11:30,560 Speaker 8: macro environment. And you know, that feels like an obvious answer, 251 00:11:30,640 --> 00:11:32,199 Speaker 8: but it's sort of not. I mean, we have a 252 00:11:32,280 --> 00:11:34,560 Speaker 8: unique situation now where we have a FED that has 253 00:11:34,640 --> 00:11:36,920 Speaker 8: you know, kept hitting the gas pedal and rising rates 254 00:11:36,920 --> 00:11:39,720 Speaker 8: and slowing down growth. So there are very few companies 255 00:11:39,760 --> 00:11:42,840 Speaker 8: that can truly, truly withstand that and come out. 256 00:11:42,720 --> 00:11:44,240 Speaker 9: With you know, double digit performance. 257 00:11:44,280 --> 00:11:47,040 Speaker 8: But we have to believe that we're getting towards the 258 00:11:47,120 --> 00:11:47,559 Speaker 8: end of that. 259 00:11:47,600 --> 00:11:49,480 Speaker 9: You know, we saw a PPI member. 260 00:11:49,640 --> 00:11:53,240 Speaker 8: It looks like inflation is coming down across all sides CPI, PPI, 261 00:11:53,640 --> 00:11:55,920 Speaker 8: we're seeing, you know, kind of grow slow. So if 262 00:11:55,960 --> 00:11:58,160 Speaker 8: the FED kind of gives us a little bit of 263 00:11:58,200 --> 00:12:00,720 Speaker 8: relief there and these companies that have stood all of 264 00:12:00,760 --> 00:12:03,640 Speaker 8: this can now actually start to spend and increase and 265 00:12:03,640 --> 00:12:04,520 Speaker 8: speed up there R and. 266 00:12:04,480 --> 00:12:05,320 Speaker 9: D and roll out. 267 00:12:05,480 --> 00:12:07,120 Speaker 8: You know, I think it will be a different story, 268 00:12:07,120 --> 00:12:09,760 Speaker 8: and I think tech will need the market. We need 269 00:12:09,800 --> 00:12:11,880 Speaker 8: tech right. We don't have enough people filling jobs. We 270 00:12:11,880 --> 00:12:14,200 Speaker 8: don't have enough factories that can you know, kind of 271 00:12:14,240 --> 00:12:18,319 Speaker 8: meet the supply and demand function out there. We had 272 00:12:18,320 --> 00:12:20,680 Speaker 8: so many inventory issues. So tech solves all of this. 273 00:12:20,760 --> 00:12:23,400 Speaker 8: So if anything, the need for tech and increase of 274 00:12:23,840 --> 00:12:25,360 Speaker 8: spending there is going to increase. 275 00:12:25,480 --> 00:12:28,240 Speaker 3: And what about you know, we talk a lot about 276 00:12:28,240 --> 00:12:30,160 Speaker 3: the FED, which is a central bag to the world. 277 00:12:30,559 --> 00:12:31,720 Speaker 4: What about world stocks? 278 00:12:31,720 --> 00:12:34,160 Speaker 3: So what about I looked at Quantum has orangine there 279 00:12:34,200 --> 00:12:36,760 Speaker 3: of course the French company Airbus. How much are you 280 00:12:36,840 --> 00:12:42,040 Speaker 3: thinking about positioning yourself globally? Are there winners in Asia 281 00:12:42,080 --> 00:12:43,360 Speaker 3: as well that you want to be owning? 282 00:12:44,559 --> 00:12:44,800 Speaker 9: Yeah? 283 00:12:44,840 --> 00:12:47,320 Speaker 8: Absolutely, And this is very much a global story, right, 284 00:12:47,360 --> 00:12:50,320 Speaker 8: I mean it's it's been, you know, very much discussed 285 00:12:50,360 --> 00:12:53,920 Speaker 8: that the US isn't a race towards artificial intelligence, for example, 286 00:12:54,040 --> 00:12:54,720 Speaker 8: versus China. 287 00:12:54,840 --> 00:12:55,959 Speaker 9: So you are going to. 288 00:12:55,880 --> 00:12:58,280 Speaker 8: Have some companies in China that are leading the charge there, 289 00:12:58,280 --> 00:12:59,880 Speaker 8: and you're going to have some companies in the US 290 00:13:00,000 --> 00:13:01,880 Speaker 8: that are, you know, kind of catching up there. But 291 00:13:01,920 --> 00:13:04,560 Speaker 8: over all, the ideas to get this global exposure to 292 00:13:04,640 --> 00:13:08,280 Speaker 8: the top companies that are investing in machine learning, AI 293 00:13:08,400 --> 00:13:09,480 Speaker 8: and quantum computing. 294 00:13:09,679 --> 00:13:13,280 Speaker 5: All right, thanks to Sylvia Jablonski's CEO and CIL the 295 00:13:13,360 --> 00:13:14,400 Speaker 5: defiant ETFs. 296 00:13:14,480 --> 00:13:20,040 Speaker 4: Good to see. 297 00:13:23,559 --> 00:13:26,000 Speaker 10: We take a number of steps to try and increase 298 00:13:26,040 --> 00:13:27,400 Speaker 10: the factuality of the information. 299 00:13:27,840 --> 00:13:30,640 Speaker 1: The first that we do is we train our models. 300 00:13:30,480 --> 00:13:33,160 Speaker 10: To actually understand what is the information on the web 301 00:13:33,160 --> 00:13:35,320 Speaker 10: that corroborates it, that backs up the information, and if 302 00:13:35,320 --> 00:13:37,880 Speaker 10: we can't corroborate it, then we will not output. 303 00:13:37,480 --> 00:13:39,520 Speaker 4: It, and you just won't show We just want to 304 00:13:39,559 --> 00:13:40,199 Speaker 4: do the US. 305 00:13:40,559 --> 00:13:42,280 Speaker 10: We won't show a piece of information. And if we 306 00:13:42,360 --> 00:13:46,080 Speaker 10: think a particular query is unsafe, it's harmful, then we 307 00:13:46,080 --> 00:13:48,080 Speaker 10: will also not provide an AI power. 308 00:13:48,080 --> 00:13:54,920 Speaker 5: At Snapshot, Liz Read Carolina, twenty year veteran of Google, 309 00:13:55,400 --> 00:13:58,280 Speaker 5: we wanted to know what search with generative AI looks like. 310 00:13:58,440 --> 00:14:00,920 Speaker 5: They went on stage and demoed it and it became 311 00:14:01,040 --> 00:14:04,360 Speaker 5: really clear what it actually looks like to the consumer. 312 00:14:04,760 --> 00:14:08,240 Speaker 3: But what's so interesting about the path that Alphabet and 313 00:14:08,240 --> 00:14:10,800 Speaker 3: Google are taking is a cautious one that almost sort 314 00:14:10,800 --> 00:14:12,800 Speaker 3: of the antiphasis to the way in which Microsoft has 315 00:14:12,800 --> 00:14:15,760 Speaker 3: folded it in with being they're really aware that this 316 00:14:15,840 --> 00:14:17,559 Speaker 3: can't go wrong. I thought it was interesting that they're 317 00:14:17,600 --> 00:14:18,400 Speaker 3: calling it a lab. 318 00:14:19,920 --> 00:14:22,720 Speaker 5: Yes, so just like with BARD, they will do a 319 00:14:22,920 --> 00:14:28,280 Speaker 5: waitlisted slow roll out for access testing initially, but we 320 00:14:28,400 --> 00:14:31,000 Speaker 5: also saw how it relates to docs and sheets and 321 00:14:31,080 --> 00:14:32,480 Speaker 5: everyday things that people use. 322 00:14:32,520 --> 00:14:35,120 Speaker 4: And you look at the market reaction. They've really cheered it. 323 00:14:35,240 --> 00:14:39,520 Speaker 5: So slow rollout, but substantive evidence of progress. Here's another 324 00:14:39,560 --> 00:14:42,440 Speaker 5: Google story for you. By the way, Caroline, SAP and 325 00:14:42,480 --> 00:14:46,640 Speaker 5: Google Cloud just announced an extensive expansion of their partnership 326 00:14:46,840 --> 00:14:49,400 Speaker 5: to make enterprise data more open and valuable and to 327 00:14:49,480 --> 00:14:53,360 Speaker 5: advance enterprise AI development. I spoke all about that with 328 00:14:53,400 --> 00:14:56,200 Speaker 5: the Google Cloud CEO Thomas Currian and the SAP CEO 329 00:14:56,560 --> 00:14:57,880 Speaker 5: Christian Client earlier this week. 330 00:14:57,920 --> 00:15:01,960 Speaker 11: Have a listen, sales teams can sell the new offering. 331 00:15:02,360 --> 00:15:04,600 Speaker 11: It will happen, you know, on one paper, with one 332 00:15:04,600 --> 00:15:09,040 Speaker 11: commercial offering, so we actually simplifying it. And actually for us, 333 00:15:09,080 --> 00:15:12,400 Speaker 11: it was actually very important that it comes with an 334 00:15:12,440 --> 00:15:14,600 Speaker 11: attractive price because this has. 335 00:15:14,480 --> 00:15:16,400 Speaker 4: To be a win win win situations. 336 00:15:16,720 --> 00:15:19,480 Speaker 11: Of course, yeah, we want to give our customers more 337 00:15:19,520 --> 00:15:22,880 Speaker 11: reasons to go to SAP and Google, but of course 338 00:15:22,920 --> 00:15:26,520 Speaker 11: we also want to offer this new solution at a 339 00:15:26,640 --> 00:15:28,520 Speaker 11: very attractive price point. 340 00:15:29,320 --> 00:15:31,440 Speaker 5: And Thomas, we come to you and ask how does 341 00:15:31,480 --> 00:15:33,920 Speaker 5: Google Cloud make money from this arrangement? 342 00:15:35,040 --> 00:15:39,000 Speaker 2: Most importantly, I would say, what's the value that customers 343 00:15:39,000 --> 00:15:42,240 Speaker 2: get out of this? Customers get the value they can 344 00:15:42,280 --> 00:15:46,640 Speaker 2: improve their understanding of customer, of their end customers or helping, 345 00:15:46,720 --> 00:15:51,320 Speaker 2: for example, Reschmall in the luxury industry, do that customers 346 00:15:51,360 --> 00:15:54,800 Speaker 2: can improve the way they manage inventory. The work that 347 00:15:54,880 --> 00:15:58,440 Speaker 2: are two organizations that done at home depot, customers can 348 00:15:58,480 --> 00:16:03,120 Speaker 2: be more recise in responding. For example, if you're e 349 00:16:03,160 --> 00:16:08,040 Speaker 2: commerce company and you're making commitments to deliver products on time, 350 00:16:08,600 --> 00:16:12,840 Speaker 2: as we've done with Marcado Libre, customers can plan better 351 00:16:13,240 --> 00:16:16,760 Speaker 2: as our two organizations have helped Motiformed. So the value 352 00:16:16,840 --> 00:16:21,640 Speaker 2: that we both bring is helping people use their business 353 00:16:21,680 --> 00:16:26,560 Speaker 2: systems SAP and Google cloud their data and to transform 354 00:16:26,640 --> 00:16:29,360 Speaker 2: the way that this of customers and manage their business. 355 00:16:29,840 --> 00:16:33,520 Speaker 2: That's what drives value and that's what brings customers to 356 00:16:33,520 --> 00:16:34,360 Speaker 2: both of us. 357 00:16:35,040 --> 00:16:39,360 Speaker 5: Christian In the competitive landscape for corporate applications, you look 358 00:16:39,360 --> 00:16:43,120 Speaker 5: at what Microsoft's done to move early to bring AI 359 00:16:43,440 --> 00:16:46,480 Speaker 5: into corporate applications. I'm thinking about of course Dynamics three 360 00:16:46,560 --> 00:16:50,880 Speaker 5: sixty five Copilot is one example. How much of this 361 00:16:51,000 --> 00:16:55,000 Speaker 5: arrangement is you being conscious of that competitive landscape right now? 362 00:16:56,160 --> 00:16:59,800 Speaker 11: And a good piece is at a lot of partners, 363 00:17:00,320 --> 00:17:05,320 Speaker 11: especially in AI, they are reaching out to SAP because 364 00:17:05,400 --> 00:17:08,879 Speaker 11: I feel a lot of companies have one challenge today 365 00:17:09,359 --> 00:17:13,439 Speaker 11: they are buying AI technology, but what about adoption? And 366 00:17:13,440 --> 00:17:16,680 Speaker 11: now thick about it, eighty percent of the world's transactions 367 00:17:16,680 --> 00:17:19,840 Speaker 11: are touched by an SEP system. So if you're going 368 00:17:19,880 --> 00:17:24,480 Speaker 11: to embed machine learning and going forward generative AI in 369 00:17:24,520 --> 00:17:28,520 Speaker 11: our products, you're immediately going to see high adoption and 370 00:17:28,560 --> 00:17:32,200 Speaker 11: you immediately unfold a lot of value for the customers 371 00:17:32,440 --> 00:17:35,640 Speaker 11: in their business processes. And this is why we are 372 00:17:35,680 --> 00:17:39,159 Speaker 11: so excited about AI and about this partnership, because you 373 00:17:39,200 --> 00:17:43,399 Speaker 11: also need high quality data to really pring AI to 374 00:17:43,480 --> 00:17:44,200 Speaker 11: the next level. 375 00:17:45,240 --> 00:17:48,760 Speaker 5: And to that point, Thomas, both parties are expressing confidence 376 00:17:48,920 --> 00:17:53,720 Speaker 5: that open data cloud is going to basically spur innovation 377 00:17:54,359 --> 00:17:55,560 Speaker 5: in the field of AI. 378 00:17:55,840 --> 00:17:56,760 Speaker 4: What does that look like. 379 00:17:58,960 --> 00:18:02,560 Speaker 2: First of all, we've fundamentally believe data has a critical 380 00:18:02,600 --> 00:18:07,240 Speaker 2: asset for a company, and it's both SAPA and Google's 381 00:18:07,359 --> 00:18:10,400 Speaker 2: joint belief that that should be open so people can 382 00:18:10,520 --> 00:18:14,680 Speaker 2: use whatever tools they want to access the data. Second, 383 00:18:15,480 --> 00:18:20,399 Speaker 2: we are unlocking data and simplifying the use of that 384 00:18:20,560 --> 00:18:24,800 Speaker 2: data in the context of business processes that large customers have. 385 00:18:24,880 --> 00:18:28,760 Speaker 2: I mean, the world's largest, most sophisticated companies in virtually 386 00:18:28,760 --> 00:18:33,119 Speaker 2: every industry round SAP, many are using Google Cloud. The 387 00:18:33,320 --> 00:18:37,960 Speaker 2: combination is unlocking how AI is applied every day. Think 388 00:18:38,000 --> 00:18:41,680 Speaker 2: about a merchandising manager in e commerce trying to figure 389 00:18:41,720 --> 00:18:44,640 Speaker 2: out how much inventory and what product do I maintain 390 00:18:44,680 --> 00:18:48,399 Speaker 2: in what location? A supply chain manager trying to figure 391 00:18:48,400 --> 00:18:51,680 Speaker 2: out where do I need to put capacity in which country. 392 00:18:52,240 --> 00:18:55,439 Speaker 2: Every one of those customers and many more will be 393 00:18:55,480 --> 00:18:59,960 Speaker 2: able to use our joint solution to open up how 394 00:19:00,160 --> 00:19:03,439 Speaker 2: AI is going to help them every day in their 395 00:19:03,520 --> 00:19:04,359 Speaker 2: day to day work. 396 00:19:04,960 --> 00:19:08,520 Speaker 5: Well, on that note, Thomas, are there any specific verticals 397 00:19:08,560 --> 00:19:11,960 Speaker 5: where you expect this relationship with SAP to help you 398 00:19:12,080 --> 00:19:14,719 Speaker 5: do better than AWS and azure? 399 00:19:16,000 --> 00:19:23,240 Speaker 2: Well, we have very strong partnerships in many verticals manufacturing, automotive, retail, healthcare, 400 00:19:23,920 --> 00:19:27,800 Speaker 2: supply chain, and logistics. These are all different industries in 401 00:19:27,800 --> 00:19:31,119 Speaker 2: which we work very closely with the SAP team. There 402 00:19:31,160 --> 00:19:34,280 Speaker 2: are a super strategic partner with us, not just in 403 00:19:34,320 --> 00:19:36,680 Speaker 2: how we bring solutions to customers, but also in the 404 00:19:36,760 --> 00:19:41,000 Speaker 2: deep engineering collaboration and every step as we evolve our 405 00:19:41,040 --> 00:19:45,240 Speaker 2: offerings together. We think it'll bring value and competitive differentiation. 406 00:19:47,160 --> 00:19:49,920 Speaker 3: Just a brilliant interview and really assessing how this is 407 00:19:50,040 --> 00:19:52,800 Speaker 3: going to impact enterprise. Google House CEO there as well 408 00:19:52,840 --> 00:19:55,320 Speaker 3: as the SAP CEO ed. 409 00:19:56,960 --> 00:19:59,440 Speaker 5: Yeah, there was an interesting one to conduct as well. 410 00:19:59,440 --> 00:20:02,880 Speaker 5: Between two big name CEOs are coming up. Microsoft buckling 411 00:20:02,920 --> 00:20:07,000 Speaker 5: down on the costs during a time of mounting economic uncertainty. 412 00:20:07,040 --> 00:20:09,920 Speaker 5: More of the changes to work as salary's coming up next. 413 00:20:09,920 --> 00:20:12,040 Speaker 4: Karen, And this is an interesting one. 414 00:20:12,119 --> 00:20:15,520 Speaker 3: Another company we're watching at Chinese company JD dot com 415 00:20:15,560 --> 00:20:19,320 Speaker 3: e commerce giant Okay just announced that it's relatively recent 416 00:20:19,480 --> 00:20:22,480 Speaker 3: CEO is actually gonna be retiring already, although a long 417 00:20:22,560 --> 00:20:25,720 Speaker 3: term person at the business, handing over the reins to 418 00:20:25,840 --> 00:20:28,680 Speaker 3: a female CFO. As this is a company that is 419 00:20:28,720 --> 00:20:31,560 Speaker 3: struggling with a focus on profitability at this moment. Shares 420 00:20:31,600 --> 00:20:34,720 Speaker 3: spiking up more than three percent corn of sales. Earnings 421 00:20:34,720 --> 00:20:37,680 Speaker 3: actually did beat and the estimates. It's a slowdown when 422 00:20:37,680 --> 00:20:41,080 Speaker 3: they managed to beat what the street had anticipated. From 423 00:20:41,080 --> 00:20:57,280 Speaker 3: New York from San Francisco, this is a bloomberg. It's 424 00:20:57,359 --> 00:21:00,360 Speaker 3: time now for talking tech. First up, Honheim reports its 425 00:21:00,400 --> 00:21:03,360 Speaker 3: third straight quarterly profit miss look. It's the company that's 426 00:21:03,400 --> 00:21:06,639 Speaker 3: the main assembler for most of Apple's signature devices. It's 427 00:21:06,680 --> 00:21:09,200 Speaker 3: a rebound in the iPhone sales last quarter just failed 428 00:21:09,200 --> 00:21:12,920 Speaker 3: to offset the weakness and the overall smartphone market. Meanwhile, 429 00:21:12,960 --> 00:21:16,040 Speaker 3: SoftBank's Vision Fund look as we're losing money again. That's 430 00:21:16,080 --> 00:21:18,200 Speaker 3: despite the rebound in tech stocks here in the United States. 431 00:21:18,359 --> 00:21:21,680 Speaker 3: The unit lost about two billion dollars in March. From 432 00:21:21,720 --> 00:21:24,960 Speaker 3: March even, and its investments in startups in particular, the 433 00:21:24,960 --> 00:21:29,000 Speaker 3: private company has fallen about ninety percent during the year. Meanwhile, 434 00:21:29,000 --> 00:21:32,399 Speaker 3: though the firms are unit that posted some record revenue 435 00:21:32,480 --> 00:21:34,560 Speaker 3: on a quarter a union basis, but some mixed results. 436 00:21:34,600 --> 00:21:36,879 Speaker 3: That's a SoftBank pairs to take that chip designer public 437 00:21:37,320 --> 00:21:41,760 Speaker 3: plus Microsoft. It's freezing pay for all full time workers 438 00:21:41,760 --> 00:21:46,280 Speaker 3: this year for what it says to help navigate macroeconomic uncertainty. However, 439 00:21:46,320 --> 00:21:48,800 Speaker 3: it will consider raising rates for hourly workers. It's the 440 00:21:48,840 --> 00:21:51,840 Speaker 3: latest US tech leader to really tighten its belt for 441 00:21:52,080 --> 00:21:53,600 Speaker 3: investments in other areas. 442 00:21:53,720 --> 00:21:55,920 Speaker 4: En Yeah, we're going to go to Disney next. 443 00:21:55,920 --> 00:21:58,560 Speaker 5: I'm looking at the shares down the most since November, 444 00:21:58,880 --> 00:22:00,840 Speaker 5: subscriber miss widening loss. 445 00:22:00,840 --> 00:22:03,680 Speaker 4: We've got to get to that conversation. This is Bloomberg. 446 00:22:13,200 --> 00:22:14,600 Speaker 9: Welcome back to Bluemare Technology. 447 00:22:14,600 --> 00:22:16,560 Speaker 3: I'm Caroline Hyde in New York and our. 448 00:22:16,520 --> 00:22:20,320 Speaker 5: Meed Lovelow and San Francisco News data earnings. We better 449 00:22:20,359 --> 00:22:21,919 Speaker 5: get a check in on these markets when it comes 450 00:22:21,960 --> 00:22:24,879 Speaker 5: to the technology sector. Actually and a's that one hundred 451 00:22:24,960 --> 00:22:28,320 Speaker 5: slightly outperforming up three tens percent relative to a slightly 452 00:22:28,440 --> 00:22:31,640 Speaker 5: down market. But there's underperformance in chip stocks. A part 453 00:22:31,680 --> 00:22:34,560 Speaker 5: of that some names giving up recent gains, some moving 454 00:22:34,600 --> 00:22:39,280 Speaker 5: to the downside. Maybe some repositioning on who the leading horses. 455 00:22:38,920 --> 00:22:39,960 Speaker 4: In the AI race. 456 00:22:40,200 --> 00:22:41,960 Speaker 5: Interesting as well as to look at the yield on 457 00:22:42,080 --> 00:22:44,800 Speaker 5: US ten years softer buy around six and a half 458 00:22:44,880 --> 00:22:47,879 Speaker 5: basis point seven basis points three point three seven percent 459 00:22:47,920 --> 00:22:50,800 Speaker 5: Bitcoin as well, we're going back towards twenty seven thousand 460 00:22:50,880 --> 00:22:53,159 Speaker 5: US dollars per token. That was a level we were 461 00:22:53,200 --> 00:22:55,560 Speaker 5: at at the end of March. We've lost some momentum 462 00:22:55,680 --> 00:22:59,359 Speaker 5: when it comes to the biggest cryptocurrency by market cap. 463 00:22:59,359 --> 00:23:01,359 Speaker 4: In the equity there is one clear move. 464 00:23:01,359 --> 00:23:04,439 Speaker 5: To the downside, and that is Disney, dropping by the 465 00:23:04,440 --> 00:23:07,680 Speaker 5: most since November. Is subscribe a miss and looking at 466 00:23:07,680 --> 00:23:11,240 Speaker 5: a widening loss, which the company describes as a blip. 467 00:23:11,680 --> 00:23:14,080 Speaker 4: It's all streaming, Carrie, The story is streaming. 468 00:23:14,240 --> 00:23:16,320 Speaker 5: No matter how much we wanted to talk about parks 469 00:23:16,480 --> 00:23:18,680 Speaker 5: and whether this is a tech company or a media 470 00:23:18,680 --> 00:23:21,480 Speaker 5: and entertainment company, we are talking about streaming, and. 471 00:23:21,520 --> 00:23:23,520 Speaker 3: Let's talk about the tech angle with none other than 472 00:23:23,600 --> 00:23:25,480 Speaker 3: Rich Greenfield. He's in the house here in New York 473 00:23:25,520 --> 00:23:28,720 Speaker 3: Lightshed Partners. Of course, I mean you said it. We 474 00:23:28,800 --> 00:23:30,399 Speaker 3: made it in to talk about this today because you 475 00:23:30,400 --> 00:23:32,480 Speaker 3: don't often see a juggernaut like this move eight percent 476 00:23:32,520 --> 00:23:33,320 Speaker 3: of the downside. 477 00:23:33,400 --> 00:23:34,920 Speaker 12: This is a pretty big move for Disney, and I 478 00:23:34,920 --> 00:23:37,440 Speaker 12: think you're seeing sort of the whole media. 479 00:23:37,200 --> 00:23:38,680 Speaker 1: Sectors under a lot of pressure. 480 00:23:38,960 --> 00:23:44,160 Speaker 12: And it's because the traditional, the core business of many 481 00:23:44,160 --> 00:23:48,520 Speaker 12: of these media companies are broadcasting cable networks, and you're 482 00:23:48,640 --> 00:23:52,880 Speaker 12: just seeing those businesses really really struggle. I mean, cord 483 00:23:52,960 --> 00:23:55,480 Speaker 12: cutting is accelerating. You're you know, you're seeing that from 484 00:23:55,560 --> 00:23:58,800 Speaker 12: all of the major players, whether that's Comcast or Charter. 485 00:23:59,240 --> 00:24:02,640 Speaker 12: You've seen it with Issue, just seeing really a real 486 00:24:02,680 --> 00:24:05,320 Speaker 12: acceleration in cord cutting, meeting high single digits. 487 00:24:05,400 --> 00:24:07,960 Speaker 1: You're seeing companies like Comcasts have double. 488 00:24:07,680 --> 00:24:11,600 Speaker 12: Digit declines in their video subscriber businesses. That's having a 489 00:24:11,640 --> 00:24:13,879 Speaker 12: real impact on companies like Disney. You saw it at 490 00:24:13,920 --> 00:24:16,680 Speaker 12: Paramount last week with a huge move to the downside, 491 00:24:16,680 --> 00:24:19,280 Speaker 12: and Paramount forced them to cut their dividend. All of 492 00:24:19,280 --> 00:24:22,680 Speaker 12: these companies are struggling with what is the future there, 493 00:24:22,680 --> 00:24:24,400 Speaker 12: because remember streaming, they're losing money. 494 00:24:24,640 --> 00:24:26,240 Speaker 1: Yeah, they're cutting the losses as you. 495 00:24:26,240 --> 00:24:29,840 Speaker 12: Just profiled, which is good, but their core businesses are 496 00:24:29,880 --> 00:24:33,720 Speaker 12: facing more and more headwinds where revenues both subscription revenue 497 00:24:33,760 --> 00:24:37,000 Speaker 12: and advertising revenue are going down and their cost structures 498 00:24:37,000 --> 00:24:40,200 Speaker 12: are going up, and their only choice is to massively 499 00:24:40,240 --> 00:24:42,440 Speaker 12: cut costs. And that's what you're seeing across the board 500 00:24:42,440 --> 00:24:43,120 Speaker 12: and media now. 501 00:24:43,280 --> 00:24:45,360 Speaker 3: Or indeed charge us more when we do get addicted 502 00:24:45,400 --> 00:24:48,680 Speaker 3: to sentence of screen mass The overall view of Disney 503 00:24:48,680 --> 00:24:51,399 Speaker 3: Plus is charge them for it or get good advertising. 504 00:24:51,840 --> 00:24:54,440 Speaker 12: I think Disney Plus is very similar to what you're 505 00:24:54,440 --> 00:24:58,240 Speaker 12: seeing out of w Warner Brothers, Discovery WBD. You're seeing 506 00:24:58,280 --> 00:25:01,879 Speaker 12: similar strategies of both company wanted to be Netflix, Like 507 00:25:01,960 --> 00:25:04,960 Speaker 12: their goal was to take on and be Netflix, meaning 508 00:25:05,240 --> 00:25:07,160 Speaker 12: a little bit of something for everyone. It was not 509 00:25:07,320 --> 00:25:10,800 Speaker 12: just HBO within HBO Max now called Max. I think 510 00:25:10,800 --> 00:25:12,280 Speaker 12: with Disney they were trying to be a little bit 511 00:25:12,320 --> 00:25:15,400 Speaker 12: of everything, really broadened out the programming, and I think 512 00:25:15,400 --> 00:25:18,439 Speaker 12: what you're seeing now is really a contraction back to 513 00:25:18,520 --> 00:25:21,840 Speaker 12: what their core is. HBO is really centering back on HBO. 514 00:25:22,400 --> 00:25:24,919 Speaker 12: Disney is sort of saying we're going to cut a 515 00:25:24,920 --> 00:25:27,119 Speaker 12: billion and a half of content out of the pipeline 516 00:25:27,119 --> 00:25:30,439 Speaker 12: as well as on the service itself. They just aren't 517 00:25:30,480 --> 00:25:35,359 Speaker 12: equipped really financially to go compete at the level of 518 00:25:35,359 --> 00:25:37,680 Speaker 12: what Netflix is trying to do globally. I think it's 519 00:25:37,680 --> 00:25:41,160 Speaker 12: actually a very very bullish sign for anyone looking at 520 00:25:41,160 --> 00:25:41,720 Speaker 12: this space. 521 00:25:42,040 --> 00:25:43,480 Speaker 1: You should be buying Netflix this morning. 522 00:25:43,520 --> 00:25:46,080 Speaker 12: I mean, that is the career takeaway is that Netflix 523 00:25:46,480 --> 00:25:50,760 Speaker 12: is increasingly quote unquote one. 524 00:25:49,960 --> 00:25:55,560 Speaker 5: Rich consolidation of platforms. The combination of Hulu and Disney Plus. 525 00:25:55,600 --> 00:25:58,080 Speaker 5: This is what Bobaga had to say. There seems to 526 00:25:58,119 --> 00:26:01,520 Speaker 5: be real value in general having general entertainment combined with 527 00:26:01,520 --> 00:26:04,959 Speaker 5: Disney Plus and if ultimately Hulu's that solution with botish 528 00:26:05,000 --> 00:26:05,480 Speaker 5: about that? 529 00:26:06,000 --> 00:26:07,159 Speaker 4: Ay boitish about that? 530 00:26:07,320 --> 00:26:11,400 Speaker 12: Well, it's really interesting, honestly, because ed just a few 531 00:26:11,400 --> 00:26:15,480 Speaker 12: months ago Iiger was talking about how general entertainment was 532 00:26:15,600 --> 00:26:19,399 Speaker 12: undifferentiated sort of you know, sort of calling into question 533 00:26:19,480 --> 00:26:21,480 Speaker 12: the future of Hulu. They had retained that in usent 534 00:26:21,520 --> 00:26:23,680 Speaker 12: Bank to look at selling Hulu. My guess is they 535 00:26:23,680 --> 00:26:26,639 Speaker 12: couldn't find a buyer for Hulu, and they realized that 536 00:26:26,680 --> 00:26:29,000 Speaker 12: they really have no choice other than to absorb it, 537 00:26:29,480 --> 00:26:31,560 Speaker 12: and so I think and they're also looking at Disney 538 00:26:31,600 --> 00:26:34,360 Speaker 12: Plus slowing, and so they're looking at broadening the content out. 539 00:26:34,359 --> 00:26:37,280 Speaker 12: But remember what they announced last night is not really 540 00:26:37,359 --> 00:26:40,720 Speaker 12: a combination of Disney Plus and Hulu. If you subscribe 541 00:26:40,720 --> 00:26:44,240 Speaker 12: to both, you'll see a Hulu tile inside of Disney Plus. 542 00:26:44,520 --> 00:26:46,520 Speaker 12: You won't even get all of the content that's on 543 00:26:46,600 --> 00:26:49,399 Speaker 12: Hulu inside of that Disney Plus tile. You'll have to 544 00:26:49,400 --> 00:26:51,520 Speaker 12: go to the Hulu app for all of the content. 545 00:26:51,880 --> 00:26:54,879 Speaker 12: But it really I think the key trigger is this 546 00:26:55,040 --> 00:26:57,639 Speaker 12: essentially is a signed to Wall Street into the broader 547 00:26:57,720 --> 00:26:58,560 Speaker 12: media industry. 548 00:26:59,040 --> 00:27:01,120 Speaker 1: Disney knows they're going to be buying Hulu. 549 00:27:01,400 --> 00:27:03,800 Speaker 12: It's probably going to cost them at a minimum nine billion, 550 00:27:03,800 --> 00:27:07,240 Speaker 12: but probably ten, eleven, twelve or thirteen billion dollars to 551 00:27:07,320 --> 00:27:10,440 Speaker 12: buy comcasts out of their Hulu stake, and I think 552 00:27:10,440 --> 00:27:12,880 Speaker 12: that's also adding to the pressure on Disney stock because 553 00:27:12,880 --> 00:27:15,840 Speaker 12: it's another financial burden that's coming over the course of 554 00:27:15,880 --> 00:27:16,640 Speaker 12: the next twelve. 555 00:27:16,480 --> 00:27:17,280 Speaker 1: Or eighteen months. 556 00:27:18,240 --> 00:27:20,920 Speaker 5: Rich are Star Wars fans out there in the audience 557 00:27:20,960 --> 00:27:23,720 Speaker 5: will notice they're going into May the fourth there were 558 00:27:23,800 --> 00:27:27,080 Speaker 5: in platform and out platform ads about all of the 559 00:27:27,119 --> 00:27:29,280 Speaker 5: content that was coming relating to that may the fourth 560 00:27:29,320 --> 00:27:33,160 Speaker 5: be with you date? Was that the shifting marketing costs 561 00:27:33,440 --> 00:27:35,399 Speaker 5: that the CFO blamed a widening loss on. 562 00:27:36,240 --> 00:27:38,400 Speaker 12: Look, I think one of the big questions for Disney 563 00:27:38,480 --> 00:27:40,800 Speaker 12: this is broader than just your question on Star Wars. 564 00:27:41,280 --> 00:27:44,280 Speaker 12: A lot of the core franchises have not been firing 565 00:27:44,600 --> 00:27:46,920 Speaker 12: on all cylinders. I mean, look, even Guardians of the Galaxy, 566 00:27:47,080 --> 00:27:50,159 Speaker 12: very well reviewed third film is clearly doing worse than 567 00:27:50,160 --> 00:27:53,240 Speaker 12: the second film. There is really questions, you know, you 568 00:27:53,240 --> 00:27:56,679 Speaker 12: saw it with Black Panther like, Disney's having trouble both 569 00:27:56,760 --> 00:28:00,200 Speaker 12: in their sort of live action film making with their 570 00:28:00,280 --> 00:28:03,440 Speaker 12: major franchises as well as animation. I mean, animation is 571 00:28:03,480 --> 00:28:05,920 Speaker 12: probably the story no one's talking enough about. I mean, 572 00:28:06,280 --> 00:28:10,400 Speaker 12: last night on the call, Bob Iger congratulated Universal, a competitor, 573 00:28:10,920 --> 00:28:14,399 Speaker 12: on their animation success with Super Mario. The lifeblood of 574 00:28:14,440 --> 00:28:17,159 Speaker 12: Disney is animation, and ed think about what was the 575 00:28:17,240 --> 00:28:19,000 Speaker 12: last Disney animated movie that. 576 00:28:19,000 --> 00:28:20,480 Speaker 1: People were really excited about. 577 00:28:20,520 --> 00:28:24,080 Speaker 12: It's been years now, and they're really getting beaten to 578 00:28:24,160 --> 00:28:26,960 Speaker 12: the punch day after day by Universal. And I think 579 00:28:26,960 --> 00:28:29,440 Speaker 12: it's a problem for Disney. And I think it's what Iiger. 580 00:28:29,640 --> 00:28:32,120 Speaker 12: I think more than anything, Iiger is slowing down production, 581 00:28:32,600 --> 00:28:35,760 Speaker 12: focusing on quality over quantity. So it's absolutely the right 582 00:28:35,840 --> 00:28:38,920 Speaker 12: decision for Iger to do. The problem is, it's not 583 00:28:38,960 --> 00:28:41,640 Speaker 12: a quick fix. Last time, when he came in originally 584 00:28:41,720 --> 00:28:43,840 Speaker 12: to Disney the very first time, what did he do. 585 00:28:43,920 --> 00:28:46,760 Speaker 12: What was his quick fix was buying Pixar. There's no 586 00:28:46,880 --> 00:28:50,840 Speaker 12: quick fix. It takes years to turn around animation and 587 00:28:50,880 --> 00:28:53,120 Speaker 12: even just content. More broadly, you don't just change your 588 00:28:53,120 --> 00:28:55,800 Speaker 12: movie schedule overnight. And so this is I think sort 589 00:28:55,840 --> 00:28:58,040 Speaker 12: of what you're seeing in terms of investors. They're becoming 590 00:28:58,080 --> 00:29:00,840 Speaker 12: aware that the fix for Disney is going to take time. 591 00:29:02,480 --> 00:29:09,440 Speaker 5: Fantasia nineteen forty. To answer your question, Caroline, what Disney 592 00:29:09,440 --> 00:29:12,440 Speaker 5: faces is problems in common with the rest of the industry, 593 00:29:12,520 --> 00:29:14,600 Speaker 5: one of them being a writer's strike in Hollywood. 594 00:29:15,080 --> 00:29:18,600 Speaker 3: Yeah, and to that end, costly labor at a time 595 00:29:18,600 --> 00:29:21,280 Speaker 3: where they need people to be writing just rich How 596 00:29:21,360 --> 00:29:25,080 Speaker 3: much is that? Obviously we're seeing overall people worrying about 597 00:29:25,080 --> 00:29:27,120 Speaker 3: writers strike, about the cost of labor, about trying to 598 00:29:27,120 --> 00:29:30,280 Speaker 3: tintrim down. Is this something that affects Disney in particular 599 00:29:30,360 --> 00:29:31,200 Speaker 3: that we spoke about it. 600 00:29:31,160 --> 00:29:33,200 Speaker 12: On the Well, I think you should think about all 601 00:29:33,240 --> 00:29:36,040 Speaker 12: of these companies are losing leave off Netflix, which is 602 00:29:36,040 --> 00:29:39,640 Speaker 12: making billions in you know, ebitdah and free cash flow. 603 00:29:39,800 --> 00:29:42,120 Speaker 12: But all of the other legacy media companies, whether it's 604 00:29:42,120 --> 00:29:47,440 Speaker 12: Disney or paramount ors, Comcast, NBCUniversal, they're losing not a billion, 605 00:29:47,480 --> 00:29:51,880 Speaker 12: they're losing billions on streaming. So anything that slows production 606 00:29:52,520 --> 00:29:54,520 Speaker 12: is actually, in the short term financially on. 607 00:29:54,480 --> 00:29:56,920 Speaker 1: A cash basis, is actually good for them. 608 00:29:57,000 --> 00:29:59,400 Speaker 12: I meaning they will lose less money this year because 609 00:29:59,440 --> 00:30:02,440 Speaker 12: of a long strike. That's sort of perverse, but that's 610 00:30:02,520 --> 00:30:05,520 Speaker 12: essentially what's actually good for these companies on a cash basis. 611 00:30:05,920 --> 00:30:07,960 Speaker 12: The problem is, and I think this is the obvious one, 612 00:30:07,960 --> 00:30:12,760 Speaker 12: a long writer strike clearly is going to impact linear television. 613 00:30:12,800 --> 00:30:13,400 Speaker 1: Come the fall. 614 00:30:13,760 --> 00:30:16,000 Speaker 12: You may not see a lot of your favorite shows 615 00:30:16,400 --> 00:30:18,960 Speaker 12: on air because you need writers for these shows on 616 00:30:19,040 --> 00:30:22,080 Speaker 12: linear TV for people that are still watching linear TV. 617 00:30:22,120 --> 00:30:24,080 Speaker 12: And yes, it's shrunk a lot, but it's still a 618 00:30:24,080 --> 00:30:27,400 Speaker 12: pretty big business for these companies financially, and so that's 619 00:30:27,440 --> 00:30:28,360 Speaker 12: going to have an impact. 620 00:30:28,400 --> 00:30:30,360 Speaker 1: Plus, if the strike goes on long. 621 00:30:30,280 --> 00:30:33,960 Speaker 12: Enough, meaning the fall September October, then you start to 622 00:30:34,040 --> 00:30:36,880 Speaker 12: actually start to impact how much content is on these 623 00:30:36,880 --> 00:30:39,920 Speaker 12: streaming services, and that could also be a problem for 624 00:30:40,000 --> 00:30:42,720 Speaker 12: these companies in terms of keeping subscribers. You saw people 625 00:30:42,760 --> 00:30:46,160 Speaker 12: were clearly frustrated with Disney losing subscribers. Not a big 626 00:30:46,240 --> 00:30:47,840 Speaker 12: number in the US, but lost a little bit of 627 00:30:47,840 --> 00:30:50,840 Speaker 12: their subscriber base last night. That's something they haven't sort 628 00:30:50,840 --> 00:30:52,440 Speaker 12: of seen from Disney in the past. 629 00:30:52,720 --> 00:30:56,760 Speaker 3: There are more immediate headline gramming lines for us to 630 00:30:56,800 --> 00:30:59,640 Speaker 3: focus on with Disney today. But AI did get its 631 00:30:59,640 --> 00:31:02,040 Speaker 3: way there a bit, and it feeds into the right 632 00:31:02,080 --> 00:31:03,840 Speaker 3: to strike and what they're worried about at the moment. 633 00:31:04,320 --> 00:31:06,920 Speaker 3: Is AI in any way you going to help hendags need? 634 00:31:06,920 --> 00:31:08,200 Speaker 3: Do you think is something to be talking about. 635 00:31:08,520 --> 00:31:10,680 Speaker 12: Look, I think AI is a category, is something that 636 00:31:10,680 --> 00:31:14,400 Speaker 12: can help production. Obviously, there's ways that it can speed production, 637 00:31:14,560 --> 00:31:16,400 Speaker 12: certainly if you think about what you can do with 638 00:31:16,440 --> 00:31:19,960 Speaker 12: it creatively. I actually think for most of the media industry, 639 00:31:20,040 --> 00:31:22,719 Speaker 12: I think AI is certainly a risk in the short term, 640 00:31:22,840 --> 00:31:25,160 Speaker 12: not because of piracy. I actually think about what the 641 00:31:25,200 --> 00:31:28,640 Speaker 12: greatest risk of AI right now is imagine the quality 642 00:31:28,680 --> 00:31:32,560 Speaker 12: of content on YouTube, on TikTok, on Instagram reels. 643 00:31:32,880 --> 00:31:34,040 Speaker 1: The better that content. 644 00:31:34,480 --> 00:31:36,320 Speaker 12: We're in a war for time, if you think about 645 00:31:36,320 --> 00:31:39,040 Speaker 12: everything is a war for time. If all of a sudden, 646 00:31:39,080 --> 00:31:42,080 Speaker 12: the content that some random person can create on their 647 00:31:42,080 --> 00:31:45,400 Speaker 12: own and put up on TikTok, or create their own newscast, 648 00:31:45,480 --> 00:31:48,880 Speaker 12: whatever it may be. Like, all of that creates competition 649 00:31:49,560 --> 00:31:52,200 Speaker 12: for eyeballs. And I think when you're talking about advertising, 650 00:31:52,240 --> 00:31:54,520 Speaker 12: you're already seeing the impact that things like Netflix are 651 00:31:54,520 --> 00:31:57,240 Speaker 12: having on taking ad dollars away from traditional media. 652 00:31:57,240 --> 00:31:58,880 Speaker 1: I mean, next week's the big TV up front. 653 00:31:59,200 --> 00:32:02,360 Speaker 12: Now imagine the quality of sort of user generated content 654 00:32:02,400 --> 00:32:04,080 Speaker 12: getting meaningfully better or rich. 655 00:32:04,200 --> 00:32:05,240 Speaker 4: That's what I do, wor Rich. 656 00:32:05,960 --> 00:32:07,760 Speaker 5: Let's go back then to our question of the day, 657 00:32:08,000 --> 00:32:11,920 Speaker 5: which is is Disney a technology company or is it 658 00:32:12,000 --> 00:32:13,880 Speaker 5: just simply a media and entertainment company. 659 00:32:13,960 --> 00:32:14,840 Speaker 4: Very quickly, I. 660 00:32:14,760 --> 00:32:17,240 Speaker 1: Would say it's neither. Disney's an IP company. 661 00:32:17,560 --> 00:32:21,120 Speaker 12: They're probably the best historically at creating IP and monetizing 662 00:32:21,120 --> 00:32:23,960 Speaker 12: it through the flywheel of all of Disney's engines. The 663 00:32:24,080 --> 00:32:27,880 Speaker 12: challenge is their IP hasn't been as good and the 664 00:32:27,920 --> 00:32:30,680 Speaker 12: reason you're seeing, look what happened with their consumer products 665 00:32:30,720 --> 00:32:34,720 Speaker 12: business last night, down dramatically year over year. I think 666 00:32:35,160 --> 00:32:38,440 Speaker 12: the creative engines of Disney not are bad. Certainly, I 667 00:32:38,480 --> 00:32:40,040 Speaker 12: think a lot of other companies would love to have 668 00:32:40,120 --> 00:32:43,040 Speaker 12: disney struggles, right, because their struggles are still better than 669 00:32:43,040 --> 00:32:45,840 Speaker 12: a lot of other companies, but relative to where Disney's 670 00:32:45,840 --> 00:32:48,200 Speaker 12: been over the last five years, Certainly, if you think 671 00:32:48,200 --> 00:32:51,200 Speaker 12: about Iiger's first run where he sort of went off 672 00:32:51,200 --> 00:32:53,840 Speaker 12: into the sunset with this incredible run in twenty nineteen, 673 00:32:55,200 --> 00:32:57,680 Speaker 12: Disney is certainly not firing. 674 00:32:57,240 --> 00:32:59,640 Speaker 1: At that level creatively that they were back. 675 00:32:59,520 --> 00:33:02,440 Speaker 12: In nineteen, and I think that's what investors are concerned 676 00:33:02,480 --> 00:33:04,840 Speaker 12: about and looking for them to turn around. 677 00:33:05,920 --> 00:33:08,720 Speaker 5: All right, rach Greenfield Likeshed Partners. Thank you very much 678 00:33:08,760 --> 00:33:09,240 Speaker 5: for your time. 679 00:33:09,240 --> 00:33:10,280 Speaker 1: Thanks for having me, Caroline. 680 00:33:10,280 --> 00:33:12,880 Speaker 3: I'm still psyched about seeing Little Mermaid. Meanwhile, coming up 681 00:33:12,960 --> 00:33:16,400 Speaker 3: the impact of China US relations on tech investing in 682 00:33:16,440 --> 00:33:18,240 Speaker 3: the US and abroad. We're going to discuss at all. 683 00:33:18,400 --> 00:33:21,600 Speaker 3: Mitchell green from lead Edge Capital is going to be next. 684 00:33:21,640 --> 00:33:24,000 Speaker 3: Also that we want to keep a close sign what's 685 00:33:24,040 --> 00:33:25,120 Speaker 3: happening in the world of banking. 686 00:33:25,200 --> 00:33:25,720 Speaker 9: Pack West. 687 00:33:25,760 --> 00:33:29,080 Speaker 3: It does indeed, lend areas in SF and deposits falling 688 00:33:29,160 --> 00:33:31,240 Speaker 3: nine point five percent last week after we reported that 689 00:33:31,280 --> 00:33:34,760 Speaker 3: the Lendo was in talks for potential investors. That the 690 00:33:34,960 --> 00:33:38,600 Speaker 3: anxiety around the US banking system is still fresh. 691 00:33:38,920 --> 00:33:40,200 Speaker 1: This is Bloomberg. 692 00:33:58,880 --> 00:34:02,840 Speaker 13: American shine of a lot of common interest climate, nuclear pliferation, 693 00:34:03,080 --> 00:34:07,360 Speaker 13: anti terrorism, global stability, you know, and we have differences. 694 00:34:07,600 --> 00:34:10,720 Speaker 13: You know, we're capitalist, they're not, you know, and it's okay, 695 00:34:11,400 --> 00:34:13,520 Speaker 13: we could short that out, but we need to keep 696 00:34:13,560 --> 00:34:17,160 Speaker 13: the Western alliances together, not just around war and Ukraine, 697 00:34:17,400 --> 00:34:21,080 Speaker 13: but around strategic economic or leaderships including trade. 698 00:34:23,000 --> 00:34:25,680 Speaker 5: That was JP Morgan Chase CEO Jamie Diamond there talking 699 00:34:25,719 --> 00:34:29,680 Speaker 5: about the global landscape and the context of rising tensions 700 00:34:29,680 --> 00:34:32,920 Speaker 5: between China and the US. This comment comes as US 701 00:34:33,000 --> 00:34:36,480 Speaker 5: National Security Advisor Jake Sullivan sat down with China's top 702 00:34:36,480 --> 00:34:40,160 Speaker 5: diplomat Wang Yi in Vienna earlier today, as the White 703 00:34:40,200 --> 00:34:43,400 Speaker 5: House is seeking to keep relations from getting worse that 704 00:34:43,480 --> 00:34:46,200 Speaker 5: according to a US official, I want to go deeper 705 00:34:46,239 --> 00:34:49,880 Speaker 5: on China in today's VC Spotlight with Mitchell Green, CEO 706 00:34:50,080 --> 00:34:54,359 Speaker 5: of lead Edge Capital five billion dollars in assets under management. 707 00:34:54,440 --> 00:34:57,720 Speaker 5: You are a VC who has been bullish on China. 708 00:34:58,080 --> 00:35:01,040 Speaker 5: When you hear Jamie Diamond and the news flow of 709 00:35:01,080 --> 00:35:05,320 Speaker 5: the day, do you remain bullish on China? 710 00:35:05,400 --> 00:35:10,280 Speaker 14: I think long term we are bullish, you know, predicting that. 711 00:35:10,400 --> 00:35:11,839 Speaker 14: Thanks so much for having me on. By the way, 712 00:35:12,560 --> 00:35:15,840 Speaker 14: I think long term. We definitely are bullish. Your term, 713 00:35:16,080 --> 00:35:18,120 Speaker 14: like I think it's going to be, will be bumpy. 714 00:35:18,160 --> 00:35:20,520 Speaker 14: It's continued to be bumpy. But I think we would 715 00:35:20,520 --> 00:35:22,880 Speaker 14: also you know, look, we are not I am not 716 00:35:22,920 --> 00:35:26,520 Speaker 14: going to come out here and pontificate about the macro 717 00:35:26,640 --> 00:35:29,879 Speaker 14: and you foreign relations with you know, countries around the world. 718 00:35:30,120 --> 00:35:32,120 Speaker 15: That's pretty much the last thing we are experts on. 719 00:35:32,920 --> 00:35:36,560 Speaker 14: But I do think an open dialogue between our countries, 720 00:35:37,360 --> 00:35:40,600 Speaker 14: and I think it is important that both countries realize 721 00:35:40,640 --> 00:35:43,400 Speaker 14: that both of us need each other, and you know, 722 00:35:43,840 --> 00:35:46,920 Speaker 14: and you know, a military council would be absolutely horrible 723 00:35:46,960 --> 00:35:47,760 Speaker 14: for both countries. 724 00:35:48,800 --> 00:35:51,719 Speaker 5: You were an investor pre IPO in Ali Baba, and 725 00:35:51,760 --> 00:35:53,840 Speaker 5: there is a debate, at least in the conversations that 726 00:35:53,880 --> 00:35:57,440 Speaker 5: I'm having out here in Silicon Valley in your industry 727 00:35:57,480 --> 00:36:00,920 Speaker 5: about not just whether you should put capital into Chinese 728 00:36:00,920 --> 00:36:04,440 Speaker 5: domicile startups, but if you should take money from Chinese 729 00:36:04,600 --> 00:36:05,840 Speaker 5: China based LPs. 730 00:36:06,239 --> 00:36:07,480 Speaker 4: Where do you sit in that debate? 731 00:36:08,960 --> 00:36:12,319 Speaker 14: We we would definitely be willing to take capital from 732 00:36:12,640 --> 00:36:14,759 Speaker 14: We do not have any actually I take it back, 733 00:36:14,800 --> 00:36:18,880 Speaker 14: we have one Asian LP, but we would take additional 734 00:36:18,880 --> 00:36:22,080 Speaker 14: capital like our companies, you know, which are primarily North 735 00:36:22,120 --> 00:36:24,520 Speaker 14: American Europe based, so that we obviously we're investors in 736 00:36:24,560 --> 00:36:27,279 Speaker 14: Alibab and we have an investment in byte Dance and 737 00:36:27,280 --> 00:36:31,200 Speaker 14: and financial like you know, just like we would we 738 00:36:31,239 --> 00:36:33,399 Speaker 14: want to have in our next fund which are raised 739 00:36:33,400 --> 00:36:34,799 Speaker 14: in a few years, we want to have more Middle 740 00:36:34,800 --> 00:36:37,799 Speaker 14: Eastern LPs. I would see nothing wrong with that. In 741 00:36:38,040 --> 00:36:41,080 Speaker 14: Chinese LPs or Korean LPs and things like that. There 742 00:36:41,080 --> 00:36:43,279 Speaker 14: are there are some challenges in some of these other 743 00:36:43,320 --> 00:36:47,280 Speaker 14: countries in Asia with getting money out of the country, 744 00:36:47,360 --> 00:36:49,600 Speaker 14: so they need to have been like you know, they 745 00:36:49,680 --> 00:36:52,120 Speaker 14: need to have the right structures in place. But like 746 00:36:52,640 --> 00:36:55,600 Speaker 14: I have nothing philosophically against it at all. Probably the opposite, 747 00:36:55,600 --> 00:36:56,239 Speaker 14: I'd love to have. 748 00:36:57,280 --> 00:37:01,160 Speaker 3: Mitchell, what about just the ecosystem which we build here 749 00:37:01,200 --> 00:37:04,680 Speaker 3: in the US or indeed in Asia or Europe, the 750 00:37:04,760 --> 00:37:09,880 Speaker 3: regulatory building blocks being built fast enough enough or with 751 00:37:10,000 --> 00:37:14,200 Speaker 3: indeed enough focus and knowledge behind them. We think about 752 00:37:14,280 --> 00:37:17,920 Speaker 3: cryptos startups being frustrated. We think about AI startups looking 753 00:37:18,000 --> 00:37:20,800 Speaker 3: for leadership when it comes to the guard rails already 754 00:37:20,840 --> 00:37:22,760 Speaker 3: in place. Do you feel that we've got that safely 755 00:37:22,760 --> 00:37:25,160 Speaker 3: in the US to thrive in the startup scene. 756 00:37:26,600 --> 00:37:31,200 Speaker 14: I think what's interesting is that regulation in China happens 757 00:37:31,280 --> 00:37:35,080 Speaker 14: like extremely fast, and it's like, you know, like decisions 758 00:37:35,080 --> 00:37:37,000 Speaker 14: are made by a very small group of people and 759 00:37:37,040 --> 00:37:40,680 Speaker 14: made very quickly. You know, the largest tech companies in 760 00:37:40,719 --> 00:37:44,160 Speaker 14: the United States, you know, sure hold a lot of 761 00:37:44,200 --> 00:37:47,280 Speaker 14: market power and can dictate which companies you know, fail 762 00:37:47,360 --> 00:37:50,080 Speaker 14: and succeed, and you know what companies pay. 763 00:37:50,120 --> 00:37:52,040 Speaker 15: And small companies they can make it. You know, they 764 00:37:52,040 --> 00:37:52,960 Speaker 15: can make distribution. 765 00:37:53,560 --> 00:37:57,080 Speaker 14: Distribution is very tight nowadays in terms of you know, 766 00:37:57,120 --> 00:37:59,120 Speaker 14: there's only a handful of big internet companies that are 767 00:37:59,160 --> 00:38:01,920 Speaker 14: all small save smaller companies need to try to get 768 00:38:01,920 --> 00:38:05,560 Speaker 14: distribution through to grow. The Chinese government just like put 769 00:38:05,560 --> 00:38:07,680 Speaker 14: a kebash on it with with with you know, ten 770 00:38:07,760 --> 00:38:10,600 Speaker 14: Cent and Ali Baba like just decided this wasn't like 771 00:38:10,640 --> 00:38:12,120 Speaker 14: a ten year debate, which is going. 772 00:38:12,040 --> 00:38:14,120 Speaker 15: To happen in the United States. There is a lot 773 00:38:14,160 --> 00:38:15,120 Speaker 15: more regulation that. 774 00:38:15,239 --> 00:38:18,319 Speaker 14: Is needed around all this cryptocurrencies. 775 00:38:19,200 --> 00:38:21,279 Speaker 15: You know, we're pretty bearish on a lot of these things. 776 00:38:21,360 --> 00:38:23,200 Speaker 14: I think they're here to stay, but I think somebod 777 00:38:23,200 --> 00:38:25,560 Speaker 14: these don't have real use cases where I think the 778 00:38:25,680 --> 00:38:27,400 Speaker 14: Chinese have done actually. 779 00:38:27,120 --> 00:38:28,560 Speaker 15: A pretty good job with a lot of the regular 780 00:38:28,680 --> 00:38:29,720 Speaker 15: regulatory things. 781 00:38:30,280 --> 00:38:32,719 Speaker 14: AI is going to AI is going to open up 782 00:38:32,719 --> 00:38:33,880 Speaker 14: a whole new can of worms. 783 00:38:34,200 --> 00:38:35,400 Speaker 15: My guess is they will. 784 00:38:35,200 --> 00:38:38,319 Speaker 14: Figure out how you know, I Joe China has run 785 00:38:38,400 --> 00:38:41,480 Speaker 14: like a corporation the US. I mean, I just invite 786 00:38:41,480 --> 00:38:45,000 Speaker 14: you to watch congressional hearings about Facebook and TikTok. 787 00:38:44,560 --> 00:38:46,600 Speaker 15: And you know it is. 788 00:38:46,680 --> 00:38:48,480 Speaker 14: It is quite amazing, and I think we have a 789 00:38:48,480 --> 00:38:50,400 Speaker 14: lot of but I think it's going to take a 790 00:38:50,440 --> 00:38:54,120 Speaker 14: while for regulatory frameworks to come into place, given the 791 00:38:54,200 --> 00:38:57,440 Speaker 14: lack of knowledge it appears and people you know in Washington. 792 00:38:57,640 --> 00:39:01,280 Speaker 3: So despite that lack of AI regulation as it stands, 793 00:39:01,320 --> 00:39:03,640 Speaker 3: are you backing founders coming to you at the moment 794 00:39:03,719 --> 00:39:06,320 Speaker 3: looking to build in the artificial intelligence space? What you 795 00:39:06,400 --> 00:39:09,080 Speaker 3: make of the rate at which companies are sort of 796 00:39:09,160 --> 00:39:10,760 Speaker 3: dubbing themselves an AI business? 797 00:39:13,000 --> 00:39:16,200 Speaker 14: So all these hype cycles like come and go, right, 798 00:39:16,239 --> 00:39:18,319 Speaker 14: Remember a few years ago everybody said we'd have self 799 00:39:18,400 --> 00:39:21,920 Speaker 14: driving cars and you know, you know, taxis, ubers and 800 00:39:21,920 --> 00:39:25,000 Speaker 14: everything would disappear. Pretty sure, I still drive to the office, 801 00:39:25,000 --> 00:39:27,799 Speaker 14: and I bet you do as well. AI is going 802 00:39:27,840 --> 00:39:30,040 Speaker 14: to change the worlds. You know, like if you call 803 00:39:30,080 --> 00:39:32,919 Speaker 14: a Delta Airlines call center, there's no reason you should 804 00:39:32,920 --> 00:39:35,000 Speaker 14: sit on hold for forty five minutes to just get 805 00:39:35,040 --> 00:39:37,480 Speaker 14: somebody who you know, probably has to get somebody else. 806 00:39:37,280 --> 00:39:39,200 Speaker 15: To help you. Ninety five percent of that can be 807 00:39:39,239 --> 00:39:40,200 Speaker 15: solved to the computers. 808 00:39:40,480 --> 00:39:44,480 Speaker 14: Coding is going to dramatically change, you know, email, all this, 809 00:39:44,719 --> 00:39:45,879 Speaker 14: All these things are going to change. 810 00:39:46,160 --> 00:39:48,320 Speaker 15: It's just going to take longer than people think. 811 00:39:49,120 --> 00:39:51,400 Speaker 14: But absolutely, Like we're in business ward, a lot of 812 00:39:51,400 --> 00:39:54,000 Speaker 14: these companies are still quite small, and we tend to 813 00:39:54,040 --> 00:39:56,960 Speaker 14: invest in companies with like, you know, ten million to 814 00:39:57,000 --> 00:39:59,880 Speaker 14: two hundred million of revenues. But absolutely in bessem are 815 00:39:59,880 --> 00:40:02,440 Speaker 14: just announced they're going to put bestmer Venture Partners just 816 00:40:02,440 --> 00:40:04,239 Speaker 14: announced they want to put a billion dollars in the 817 00:40:04,440 --> 00:40:06,120 Speaker 14: like startups in the space. 818 00:40:06,760 --> 00:40:08,719 Speaker 5: Make sure given the size of your target companies. I 819 00:40:08,760 --> 00:40:11,480 Speaker 5: want to ask you about venture debt. Bloomberg writing about 820 00:40:11,520 --> 00:40:15,360 Speaker 5: the data this morning, the venture debt has gone from 821 00:40:15,600 --> 00:40:19,080 Speaker 5: record levels last year to twenty seventeen levels in the 822 00:40:19,120 --> 00:40:22,000 Speaker 5: first quarter of this year. How closely do you track that? 823 00:40:24,680 --> 00:40:26,640 Speaker 15: You could have said the same thing for venture funding 824 00:40:26,719 --> 00:40:27,400 Speaker 15: financing too. 825 00:40:27,560 --> 00:40:31,520 Speaker 14: Look, we've lost in you know, not long ago, and 826 00:40:31,560 --> 00:40:33,880 Speaker 14: I don't know if it was late late March, early April, 827 00:40:33,920 --> 00:40:38,080 Speaker 14: like Silicon Valley Bank was a major provider of venture debt. 828 00:40:38,800 --> 00:40:42,040 Speaker 14: Obviously the shell exists, but it's been acquired, so we'll 829 00:40:42,080 --> 00:40:45,240 Speaker 14: see v As. 830 00:40:45,160 --> 00:40:48,919 Speaker 15: Venture financing is down, venture debt will also be down. 831 00:40:49,680 --> 00:40:51,279 Speaker 15: These things come in cycles. 832 00:40:51,719 --> 00:40:54,800 Speaker 14: Like I think it's frankly like if you liked investing 833 00:40:54,880 --> 00:40:59,759 Speaker 14: in software, Internet, AI, growth businesses, healthcare businesses and two 834 00:40:59,760 --> 00:41:03,719 Speaker 14: the nineteen in twenty twenty, Yeah, sure, just like if 835 00:41:03,760 --> 00:41:04,120 Speaker 14: you liked. 836 00:41:04,040 --> 00:41:06,200 Speaker 15: Him in two thousand and six, two thousand and seven. 837 00:41:06,440 --> 00:41:07,759 Speaker 14: The way you made a lot of money, he was 838 00:41:07,800 --> 00:41:09,719 Speaker 14: doing it in two thousand and nine and twenty ten. 839 00:41:09,880 --> 00:41:12,040 Speaker 14: Like we think the next couple of years of least 840 00:41:12,040 --> 00:41:14,840 Speaker 14: some of the best vintages in like you know, growth 841 00:41:14,880 --> 00:41:17,160 Speaker 14: equity and venture over the next you know, just because 842 00:41:17,239 --> 00:41:18,880 Speaker 14: the best time of invest is in a recession. 843 00:41:19,400 --> 00:41:21,560 Speaker 3: Keep it on being persistent, Mitchell Green me, thank you 844 00:41:21,640 --> 00:41:31,839 Speaker 3: so much. See lead edge capsule there, I'm now what's 845 00:41:31,840 --> 00:41:34,920 Speaker 3: going Viral shares a peloton falling the MoWest point in 846 00:41:35,000 --> 00:41:37,480 Speaker 3: almost seven months. That's after the fitness company recalled get 847 00:41:37,520 --> 00:41:40,200 Speaker 3: this two point two million bikes due to a safety 848 00:41:40,200 --> 00:41:42,920 Speaker 3: hazard with the seat. Mark German break it down for 849 00:41:43,000 --> 00:41:44,480 Speaker 3: us again, another knock. 850 00:41:45,000 --> 00:41:46,680 Speaker 16: Yeah, thank you was always for having me. This is 851 00:41:46,680 --> 00:41:50,239 Speaker 16: the fourth recall in the history of Peloton, right, this 852 00:41:50,280 --> 00:41:53,479 Speaker 16: is less significant than the treadmill Peloton recall a couple 853 00:41:53,480 --> 00:41:56,560 Speaker 16: of years ago where people actually died because of the device. 854 00:41:57,000 --> 00:41:59,279 Speaker 16: This is an issue with the seat post on the bike, 855 00:41:59,360 --> 00:42:02,000 Speaker 16: so that is the metal part that attaches the seat 856 00:42:02,160 --> 00:42:04,080 Speaker 16: sort of the saddle on the bike that you sit 857 00:42:04,120 --> 00:42:06,920 Speaker 16: on well using it to the actual core frame of 858 00:42:06,960 --> 00:42:09,880 Speaker 16: the bike and in some cases the weld joint that 859 00:42:10,000 --> 00:42:12,560 Speaker 16: area could break off and you could fall off the bike. 860 00:42:13,120 --> 00:42:15,520 Speaker 16: There have been a few dozen cases. There have been 861 00:42:15,560 --> 00:42:19,440 Speaker 16: a few injuries. Some bruises are mentioned. The most significant 862 00:42:19,440 --> 00:42:22,759 Speaker 16: injury that was mentioned is a fractured risk. Obviously, none 863 00:42:22,800 --> 00:42:26,640 Speaker 16: of that is good. Peloton and the US Commission that 864 00:42:26,680 --> 00:42:30,239 Speaker 16: handles Products Safety today announce the recall two point two 865 00:42:30,280 --> 00:42:31,759 Speaker 16: million units in the. 866 00:42:31,800 --> 00:42:32,760 Speaker 4: US and Canada. 867 00:42:33,480 --> 00:42:36,319 Speaker 16: They're offering an ad home fix, a replacement part, and 868 00:42:36,360 --> 00:42:38,399 Speaker 16: a video for you to replace it yourself. But as 869 00:42:38,440 --> 00:42:41,160 Speaker 16: of now, if you have an impacted bike, these are 870 00:42:41,160 --> 00:42:43,560 Speaker 16: the original bikes. They're recommending you stop using it until 871 00:42:43,560 --> 00:42:44,480 Speaker 16: the fix is installed. 872 00:42:45,440 --> 00:42:47,880 Speaker 5: Right, and it doesn't impact owners in the UK, Germany 873 00:42:48,000 --> 00:42:51,680 Speaker 5: or Australia. Our thanks to Bloomberg's Mark German. All right, 874 00:42:51,719 --> 00:42:54,839 Speaker 5: so that does it for this edition of Bloomberg Technology, Caroline, Yeah, you. 875 00:42:54,800 --> 00:42:56,799 Speaker 3: Do not want to forget about our podcast. They catch 876 00:42:56,840 --> 00:42:59,520 Speaker 3: up on all of it on the Terminal, online, on Apple, Spotify. 877 00:42:59,600 --> 00:43:03,000 Speaker 3: iHeart from New York. From San Francisco, this is a 878 00:43:03,000 --> 00:43:03,480 Speaker 3: Breenberg 879 00:43:06,440 --> 00:43:06,480 Speaker 10: H