WEBVTT - Chips Act Subsidy Deals, DraftKings Earnings 0:00:01.520 --> 0:00:02.240 From Mahard. 0:00:02.360 --> 0:00:06.800 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.160 --> 0:00:11.680 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.640 --> 0:00:28.000 Live from New York and San Francisco. This is Bloomberg 0:00:28.040 --> 0:00:31.720 Technology coming up. The race to reward the buy An 0:00:31.720 --> 0:00:35.040 administration is against the clock to complete chipsack deals with 0:00:35.240 --> 0:00:38.440 top companies before the Trump takes office. 0:00:39.120 --> 0:00:42.160 And come to Saudi Arabia, the country's one hundred billion 0:00:42.200 --> 0:00:45.280 dollar pitch to become an AI powerhouse hub. 0:00:45.159 --> 0:00:46.160 And draftking shares. 0:00:46.200 --> 0:00:48.360 They bounced back after earnings and a tough end of 0:00:48.400 --> 0:00:50.640 the year for the online sports spelling company. We speak 0:00:50.680 --> 0:00:54.320 with the CEO, but first let's check in on these markets. 0:00:53.880 --> 0:00:55.720 Because I'll give you a five day chart. 0:00:55.960 --> 0:00:58.560 Today we're just flat, slightly low on the Nazak one hundred, 0:00:58.600 --> 0:01:00.960 coming off of those record highs, but we power to 0:01:01.040 --> 0:01:04.480 new records on this particular benchmark. A florry of earnings 0:01:04.520 --> 0:01:06.440 is something we need to dissect. So two is a 0:01:06.480 --> 0:01:08.600 fed Rake cup that helps us push higher, but of 0:01:08.600 --> 0:01:11.279 course the election result. Also, we're up five point two percent, 0:01:11.319 --> 0:01:12.959 the best week since mid September. 0:01:12.959 --> 0:01:13.920 Then what are you watching on the. 0:01:13.880 --> 0:01:16.080 Micro So I think We're still in a stage where 0:01:16.080 --> 0:01:18.160 you look at single names and we're thinking about winners 0:01:18.160 --> 0:01:22.160 and losers. Post election day, Tesla continues to have momentum. 0:01:22.240 --> 0:01:24.840 It is trading at its highest level since early May 0:01:24.880 --> 0:01:27.760 of twenty twenty two, gone beyond a trillion dollars of 0:01:27.800 --> 0:01:29.679 market cap, whether it closes there or not. 0:01:29.959 --> 0:01:31.840 But there's the association. 0:01:31.360 --> 0:01:34.200 Trump with Musk, and then there's the analysis of whether 0:01:34.480 --> 0:01:39.839 Trump policy adjustments will impact negatively or positively that name. Elsewhere, 0:01:39.880 --> 0:01:42.520 there is a scramble in DC in across this country 0:01:42.840 --> 0:01:47.120 in the chip sector about what happens next. Intel is 0:01:47.200 --> 0:01:49.400 modestly higher in the session, but on the week over 0:01:49.480 --> 0:01:52.280 five days on track for its best week since June. 0:01:52.400 --> 0:01:54.840 Could it be a beneficiary of the Trump administration? What 0:01:54.920 --> 0:01:59.880 Bloomberg is reporting is that deals are done, negotiations settled 0:01:59.880 --> 0:02:02.800 for Chips Act funding, but in some cases is their 0:02:02.800 --> 0:02:06.360 renegotiation to try and actually get access to money through 0:02:06.400 --> 0:02:09.960 the Biden administration before Trump two point zero takes effect 0:02:10.200 --> 0:02:14.160 and President lank Trump takes office in January of next year. 0:02:14.240 --> 0:02:17.079 Care I know Pat Gelsinger spoke to you after the 0:02:17.120 --> 0:02:19.720 earnings with a frustration at how slow that money has 0:02:19.760 --> 0:02:21.720 been coming out of the door. Ed, let's discuss that 0:02:21.760 --> 0:02:24.000 all a little bit more from Bogs. Mackenzie Hawkins has 0:02:24.040 --> 0:02:27.200 a great piece out just talking us through how chip 0:02:27.360 --> 0:02:31.000 companies are basically racing, as is the Biden administration, to 0:02:31.080 --> 0:02:33.240 get access to that Chips Act funding. 0:02:33.600 --> 0:02:34.840 What is the latest. 0:02:36.400 --> 0:02:40.160 So earlier this year, the Biden administration announced a slate 0:02:40.320 --> 0:02:42.840 of multi billion dollar awards for some of the most 0:02:42.880 --> 0:02:45.600 important companies in the semi collect industry to build factories 0:02:45.639 --> 0:02:48.519 on American soil. The funding comes from the Chips Act, 0:02:48.520 --> 0:02:50.720 where she signed in twenty twenty two. It's a major 0:02:50.800 --> 0:02:55.720 bipartisan initiative to revitalize the American industry. Since those announcements, 0:02:55.760 --> 0:02:59.200 companies have been going through pretty onerous due diligence, and 0:02:59.480 --> 0:03:03.000 some of them still haven't reached final term sheets. So 0:03:03.320 --> 0:03:06.280 now the Biden administration and those couple of companies in 0:03:06.320 --> 0:03:08.959 particular Intel and Samsung and Micron are the big ones 0:03:08.960 --> 0:03:11.720 that we're watching, are trying to get those incentives locked 0:03:11.720 --> 0:03:13.799 down so they can get money out the door before 0:03:13.800 --> 0:03:16.440 there's a potential for renegotiation under a Trump admin. 0:03:17.280 --> 0:03:19.799 Intel Micron two of the names I showed a moment ago. 0:03:19.880 --> 0:03:22.880 Micron lower in the session. Sources are telling us that 0:03:22.960 --> 0:03:25.960 those names, the eyes are not dotted, the t's are 0:03:25.960 --> 0:03:30.320 not crossed. Which areas do they still have to negotiate McKenzie. 0:03:32.320 --> 0:03:35.240 It varies by company. In Intel's case, part of the 0:03:35.280 --> 0:03:38.000 hang up is over what's called a change of contract provision, 0:03:38.000 --> 0:03:40.520 which is a fancy way of saying what happens if 0:03:40.560 --> 0:03:44.160 Intel spins office manufacturing business or is acquired in part 0:03:44.280 --> 0:03:46.840 or in whole. Now, Dolsinger has said we're going to 0:03:46.960 --> 0:03:49.400 keep Intel together. Intel has said it's making good progress 0:03:49.440 --> 0:03:51.880 on the award negotiations. But you can imagine why that's 0:03:51.920 --> 0:03:54.080 a sensitive provision with a company that is going through 0:03:54.080 --> 0:03:55.440 some serious financial troubles. 0:03:56.200 --> 0:03:58.360 The key issue here is, as you said at the top, 0:03:58.520 --> 0:04:02.200 this is bipartisan in nature. So where might we see 0:04:02.280 --> 0:04:06.320 changes made. We have heard in recent days weeks key podcasts, 0:04:06.360 --> 0:04:09.600 Trump really rail against what he sees is well money 0:04:09.640 --> 0:04:11.680 out the door when he thinks Taris would just bring 0:04:11.760 --> 0:04:14.200 TSMC to build in the US, for example. 0:04:16.440 --> 0:04:20.200 The general consensus among industry lobbys and government officials in 0:04:20.240 --> 0:04:22.640 Washington is that the broad contours of this program will 0:04:22.640 --> 0:04:25.960 stay the same. It passes bipartisan support. It was Trump's 0:04:25.960 --> 0:04:29.520 first administration that recruited TSMC to Arizona in the first place. 0:04:29.760 --> 0:04:32.520 But Republicans are already taking aim at what they consider 0:04:32.560 --> 0:04:35.919 it to be social provisions of the Biden administration's implementation, 0:04:36.360 --> 0:04:40.080 things like requirements for childcare facilities, or expectations that companies 0:04:40.120 --> 0:04:42.440 will work with local labor unions or try to limit 0:04:42.520 --> 0:04:44.320 the environmental impact of their facilities. 0:04:45.160 --> 0:04:48.800 Bimberg's Mackenzie Hawkins, thank you for your reporting. Let's get 0:04:48.800 --> 0:04:53.159 the markets perspective, bringing Eric Friedman, chief investment officer a 0:04:53.320 --> 0:04:56.599 US Bank Asset Management. I think we start with semiconductors, right. 0:04:57.080 --> 0:04:59.000 I talked to the beginning of the show about still 0:04:59.040 --> 0:05:02.320 trying to discern the winners and losers in Trump two 0:05:02.360 --> 0:05:05.520 point zero through that lens. How are you viewing chips 0:05:05.600 --> 0:05:06.360 right now, Eric. 0:05:07.400 --> 0:05:10.080 Yeah, we're still favorable on the ship space. I think 0:05:10.120 --> 0:05:13.239 the distinction that we're really trying to make is number 0:05:13.240 --> 0:05:16.240 one in terms of the beneficiarias of AI. That is 0:05:16.279 --> 0:05:20.479 certainly a story that lots of people talk about, because 0:05:20.520 --> 0:05:23.719 there is still some concern in terms of hardware and 0:05:23.760 --> 0:05:27.200 peripheral sales, just you know, with a weakening labor market, 0:05:27.240 --> 0:05:30.520 some softening not just in the US, but across the globe, 0:05:30.520 --> 0:05:33.480 what does the upgrade cycle look like? What will corporate 0:05:33.520 --> 0:05:37.599 capex specific to peripherals and hardware look like. We're seeing 0:05:37.640 --> 0:05:40.719 some stabilization aad but really not necessarily an uplift, So, 0:05:41.320 --> 0:05:44.520 you know, probably more the idea of will we see 0:05:45.200 --> 0:05:48.960 diffusion of AI chips beyond the hyperscalers? Again, hyperscalers have 0:05:49.040 --> 0:05:51.360 a ton of free cash flow, and that's what we've 0:05:51.400 --> 0:05:54.719 seen consistently throughout this earning season, and so the ability 0:05:54.760 --> 0:05:58.839 to almost self fund AI chip demand we think will continue. 0:05:58.880 --> 0:06:01.480 So I think there's all almost a business to business 0:06:01.560 --> 0:06:04.040 versus business to consumer angle. We're probably were in the 0:06:04.040 --> 0:06:07.160 business to business angle for chips. But then more specifically, 0:06:07.360 --> 0:06:10.640 will we see that diffusion out beyond again hyperscalers, Will 0:06:11.120 --> 0:06:14.880 AI chip growth again meet and demand? We still think 0:06:14.880 --> 0:06:15.720 there's a backlog there. 0:06:15.720 --> 0:06:17.279 That's why we're still bullish. 0:06:17.680 --> 0:06:21.400 Eric, how's the US Bank Asset Management team modeling for 0:06:21.560 --> 0:06:22.960 Trump tariff policy? 0:06:24.520 --> 0:06:28.000 Yeah, I think it's important to really discern probably by 0:06:28.080 --> 0:06:30.680 country and by region, and I think that almost a 0:06:30.760 --> 0:06:34.720 knee jerk reaction that we saw heading into election day 0:06:34.720 --> 0:06:37.039 and then the immediacy following the election, is that look, 0:06:37.080 --> 0:06:40.400 there would be this you know, almost broad tear iff 0:06:40.440 --> 0:06:43.760 policies set across not just China, which is a very 0:06:43.760 --> 0:06:47.200 common refrain from both parties heading into the election, but 0:06:47.320 --> 0:06:50.000 also you know Western Europe in particular, and if you 0:06:50.000 --> 0:06:53.920 look at the performance in particular of EFA again developed 0:06:53.920 --> 0:06:57.760 international stocks, you look at what's happened within the currency realm, 0:06:57.920 --> 0:07:00.920 there is still this this view that, look, tariffs are coming. 0:07:01.360 --> 0:07:04.200 I do think that our modeling work suggests that differentiation 0:07:04.360 --> 0:07:07.120 is probably an underappreciated point right now in the marketplace, 0:07:07.200 --> 0:07:11.080 so as we await again not just the specifics on 0:07:11.080 --> 0:07:13.560 what tariffs looks like, but also who's going to be 0:07:13.560 --> 0:07:17.040 in the cabinet that can have a material impact on 0:07:17.760 --> 0:07:20.280 just again maybe the glide path of what tariffs look like. 0:07:20.360 --> 0:07:23.440 Last thing I'd say is this, there's the possibility of 0:07:23.520 --> 0:07:27.160 more of a glide path approach, almost a in initial 0:07:27.240 --> 0:07:31.040 set and then perhaps an expansion depending on success as 0:07:31.040 --> 0:07:33.800 well as depending on how the other side reacts. The 0:07:33.840 --> 0:07:37.520 reaction function of those impacted by tariffs is one that 0:07:37.720 --> 0:07:40.480 we again have to also model in and something we're 0:07:40.560 --> 0:07:41.200 very focused on. 0:07:42.040 --> 0:07:45.080 To that point, has any of your feelings changed on 0:07:45.680 --> 0:07:49.400 big American companies with large exposure to China do get 0:07:50.000 --> 0:07:53.640 more nervous around that or actually does things stay the same? 0:07:55.040 --> 0:07:58.040 Yeah, caroly I think it is a bit more nervous. 0:07:58.680 --> 0:08:01.240 And when I say nervous, the range of outcomes that 0:08:01.280 --> 0:08:04.440 we're modeling has to expand, and I think that if 0:08:04.440 --> 0:08:06.920 you look at, for example, what's happening in the Chinese 0:08:06.960 --> 0:08:09.440 stock market review as completely anomalist, that is more of 0:08:09.440 --> 0:08:13.320 a policy driven China really trying to regain some of 0:08:13.320 --> 0:08:16.880 the spotlight with the challenges they have structurally within their 0:08:16.880 --> 0:08:19.520 economy and most of the issues that we're. 0:08:19.320 --> 0:08:22.320 Seeing within the supply chain. 0:08:22.840 --> 0:08:25.440 That's the part that we think is key, and there 0:08:25.480 --> 0:08:27.440 was a lot of rhetoric and obviously discussion about the 0:08:27.440 --> 0:08:31.720 supply chain and what requirements were going to be really imposed, 0:08:31.760 --> 0:08:34.640 if you will, pre election. Now that we have the 0:08:34.679 --> 0:08:38.520 election results largely behind us, the extent of the supply 0:08:38.640 --> 0:08:41.120 chain is probably our next area of focus. So I 0:08:41.160 --> 0:08:43.000 do think that in terms of our modeling work and 0:08:43.000 --> 0:08:46.000 if we're looking at the range of opportunities and considerations, 0:08:46.280 --> 0:08:48.920 it's widened, but again having more of a bias towards 0:08:48.960 --> 0:08:51.760 more on shoring and the potential of more inflation we 0:08:51.800 --> 0:08:53.800 think is now our base case, probably more so than 0:08:53.840 --> 0:08:55.720 it was two or three weeks ago. 0:08:55.880 --> 0:08:58.880 Talk to that inflation because we've had a raft of 0:08:58.920 --> 0:09:01.920 consumer facing tech companies come out with their earnings and 0:09:01.960 --> 0:09:04.640 they move on the day to day. Not individual names, 0:09:04.679 --> 0:09:07.199 but more broadly tech exposed. 0:09:06.840 --> 0:09:07.360 To the consumer. 0:09:07.400 --> 0:09:08.720 Are they going to have a better time of it 0:09:08.840 --> 0:09:11.120 or a harder time in twenty twenty five if inflationary 0:09:11.160 --> 0:09:13.559 pressures are there, Yeah, I. 0:09:13.520 --> 0:09:17.200 Think that on balance, you know, we're still optimistic about 0:09:17.240 --> 0:09:22.600 the consumer, especially amongst the middle income and upper income 0:09:22.600 --> 0:09:25.680 consumer in the US. We do think there is some 0:09:25.920 --> 0:09:29.160 level of stability in continental Europe. I'm not saying it's 0:09:29.160 --> 0:09:34.480 certainly a gangbuster a consumer electronics demand cycle, but that 0:09:34.679 --> 0:09:37.280 idea of the quote unquote case shape recovery, we think 0:09:37.360 --> 0:09:39.680 is intact one of the things that we've really looked at. 0:09:40.160 --> 0:09:41.800 In addition to again our role as a bank, we 0:09:41.840 --> 0:09:43.920 have a lot of purview into delinquencies, We have a 0:09:43.920 --> 0:09:46.920 lot of understanding what's happening within credit flows, and there 0:09:47.040 --> 0:09:50.040 is a very market difference between middle and upper income 0:09:50.080 --> 0:09:53.120 consumers and lower income consumers. And what I mean by 0:09:53.120 --> 0:09:55.280 that is, if if you look at at just the 0:09:55.920 --> 0:09:59.000 bar that the lower income consumers have had to overcome 0:10:00.559 --> 0:10:05.160 expenses on rents, expenses on credit cards. Those are going up, 0:10:05.280 --> 0:10:10.160 and so that marginal consumer who's maybe lower end, you know, 0:10:10.200 --> 0:10:13.360 consumer electronics demand is probably going to be challenged for 0:10:13.440 --> 0:10:16.199 some time. We still think that middle income and upper 0:10:16.240 --> 0:10:19.120 income consumers will spend, so we think that that that 0:10:19.160 --> 0:10:20.760 refresh cycle will exist. 0:10:21.000 --> 0:10:21.560 On balance. 0:10:21.600 --> 0:10:24.720 It's it's still okay, it's really not, you know, Carolin, 0:10:24.760 --> 0:10:26.720 I'd say gangbusters at this point. 0:10:26.559 --> 0:10:29.920 Right now, I Friedman of US Bank Asset Management really 0:10:29.960 --> 0:10:33.840 appreciate you coming on today. Meanwhile, coming up Saudi Arabia 0:10:34.280 --> 0:10:38.040 betting b on Ai for their potential one hundred billion 0:10:38.080 --> 0:10:38.880 dollar investment. 0:10:38.960 --> 0:10:50.960 That's next. This is a bluebot technology. 0:10:54.480 --> 0:10:57.520 It's time for talking tech and first stop. Sony lifts 0:10:57.600 --> 0:11:00.920 its sales out look. The Japanese tech a saw strong 0:11:01.000 --> 0:11:04.480 music sales and a surprise boost from its PlayStation unit 0:11:04.559 --> 0:11:07.400 due to sales of the video game Black Myth Wu Kong. 0:11:07.720 --> 0:11:10.160 Sony says it now expects a net revenue of eighty 0:11:10.200 --> 0:11:13.640 three point two billion dollars plus. By Doo is set 0:11:13.679 --> 0:11:16.800 to unveil a new pair of AI smart glasses. The 0:11:16.920 --> 0:11:20.440 likes of which rival Metas ray bands. According to sources, 0:11:20.640 --> 0:11:23.480 the Chinese search leader plans to introduce the device, said 0:11:23.480 --> 0:11:27.079 it's Bydo World event in Shanghai next week. Sales of 0:11:27.120 --> 0:11:29.320 the glasses could start as early as twenty twenty five 0:11:29.360 --> 0:11:32.640 and would likely cost less than Metas two hundred and 0:11:32.679 --> 0:11:36.000 ninety nine dollars price point, and Nvidia has named NASA 0:11:36.080 --> 0:11:39.280 veteran elean Na Choa as a director. The move bolsters 0:11:39.280 --> 0:11:43.000 and videos board to thirty members after the AI rally 0:11:43.000 --> 0:11:46.160 turned the company into a Silicon Valley titan. The Choa 0:11:46.360 --> 0:11:50.000 previously ran NASAs Johnson Space Center in Houston and was 0:11:50.000 --> 0:11:54.560 the first Latina astronaut in Spacekroen ed, let's. 0:11:54.440 --> 0:11:55.760 Talk to Saudi Arabia right now. 0:11:55.800 --> 0:11:59.520 It is set to make a big push into artificial intelligence, 0:11:59.520 --> 0:12:02.560 investing up to one hundred billion dollars in new projects. 0:12:02.679 --> 0:12:06.040 We're talking data centers, startups, other AI focused infrastructure. 0:12:06.160 --> 0:12:08.160 It's all according to sources from More. 0:12:08.240 --> 0:12:11.320 We welcome Bloomberg's Tom Jarles on now to talk about 0:12:11.440 --> 0:12:15.480 this was initially potentially an agreement. We've heard Alphabet Google 0:12:15.920 --> 0:12:19.720 helping fund AI focus in Saudi Arabia, but this is 0:12:19.880 --> 0:12:21.480 much much bigger in scale. Now. 0:12:22.480 --> 0:12:26.440 There's a lot of ambition behind this project, Caroline. What 0:12:26.480 --> 0:12:29.000 the Saudis are trying to do is make sure that 0:12:29.080 --> 0:12:32.040 they have a seat at the table part of the 0:12:32.080 --> 0:12:33.120 AI revolution. 0:12:33.640 --> 0:12:36.120 What can they do? They have a lot of. 0:12:36.120 --> 0:12:39.120 Money, they're not and they basically there's a lot of 0:12:39.120 --> 0:12:41.920 money and they want to invest in infrastructure. Something that 0:12:41.960 --> 0:12:45.000 we've been writing about and talking talking to you about 0:12:45.000 --> 0:12:47.880 for a long time is the need for all of 0:12:47.920 --> 0:12:51.600 the data centers, all of that computing power that's necessary 0:12:51.640 --> 0:12:56.960 to drive generitive artificial intelligence. The Saudis have plenty of 0:12:57.040 --> 0:13:00.920 resources to help invest in that. They are putting a 0:13:00.960 --> 0:13:04.280 lot of money and time and energy into this effort 0:13:04.840 --> 0:13:08.800 that they hope will essentially put Saudi Arabia on the 0:13:08.840 --> 0:13:12.720 map as a major force behind generative. 0:13:12.280 --> 0:13:15.840 AI code name Project Transcendence. 0:13:15.880 --> 0:13:18.160 According to our reporting, I think what we know from 0:13:18.160 --> 0:13:20.560 our reporting, tom Right, is that it's almost a quid 0:13:20.600 --> 0:13:25.000 pro quo that Saudi's ready to invest hand over money 0:13:25.040 --> 0:13:28.040 to startups, big name players, but in return they have 0:13:28.120 --> 0:13:29.959 to have a presence in country. 0:13:31.280 --> 0:13:34.120 That's right. One of the conditions is they want to 0:13:34.160 --> 0:13:39.120 see those operations have a strong to hold right there 0:13:39.120 --> 0:13:42.360 in the Kingdom. Something else that you need to bear 0:13:42.360 --> 0:13:44.439 in mind when you look and when you think about 0:13:44.440 --> 0:13:46.679 the role that the Middle East is going to play 0:13:47.320 --> 0:13:51.200 investing in global startups and investing in this Again, I 0:13:51.280 --> 0:13:54.160 keep referring to it as a revolution because it is 0:13:54.200 --> 0:13:56.640 transforming the way we do business, the way we live 0:13:56.640 --> 0:13:57.120 our lives. 0:13:57.960 --> 0:14:00.719 Something that's really important, something that we've seen come up 0:14:00.720 --> 0:14:01.600 time and time. 0:14:01.400 --> 0:14:05.280 Again, is the West, led by the United States, wants 0:14:05.320 --> 0:14:07.760 to ensure that the companies that have a really strong 0:14:07.920 --> 0:14:12.000 stake in AI, in these startups, in these global startups 0:14:12.000 --> 0:14:15.480 and these global businesses, is that they be allied with 0:14:15.679 --> 0:14:16.160 the West. 0:14:16.200 --> 0:14:18.400 Something that we've seen before is that when. 0:14:19.920 --> 0:14:22.720 When parts of the country, parts of the world excuse me, 0:14:22.760 --> 0:14:26.760 become too closely allied with state China, that starts to 0:14:26.800 --> 0:14:28.800 make people nervous. And so one of the things that 0:14:28.840 --> 0:14:32.720 you're going to see is if the IF US companies 0:14:32.720 --> 0:14:34.800 are going to take part in this, they're going to 0:14:34.880 --> 0:14:38.560 want to see the Middle East allying itself with the 0:14:38.600 --> 0:14:41.800 West and away from China. 0:14:41.840 --> 0:14:44.280 Interesting, So that's sort of the global context. 0:14:44.360 --> 0:14:46.680 When you get into the nitty gritty, it's going to 0:14:46.680 --> 0:14:49.880 be the PIF that's their sort of sovereign wealth fund 0:14:50.240 --> 0:14:54.680 aligning themselves and co investing with big international companies. 0:14:55.000 --> 0:14:57.520 It's going to have similar feel to it, right than 0:14:57.680 --> 0:14:59.560 al At. Can you just spell out how the funding 0:14:59.640 --> 0:15:00.120 might look. 0:15:01.480 --> 0:15:04.840 Well, well, we're still getting our arms around that. We 0:15:04.920 --> 0:15:07.480 know that they want to invest in startups, they want 0:15:07.520 --> 0:15:10.760 to invest in the infrastructure. These data centers cost a 0:15:10.760 --> 0:15:13.600 lot of money. All the servers, all the chips, all 0:15:13.640 --> 0:15:17.160 this computing power that's needed to generate to for generative 0:15:17.320 --> 0:15:21.080 artificial intelligence, the chips themselves, and the equipment needed to 0:15:21.120 --> 0:15:23.920 build the chips, and you see the potential for Saudi 0:15:23.920 --> 0:15:27.840 Arabia to become this major world center of global of 0:15:27.920 --> 0:15:31.280 the global infrastructure needed around artificial intelligence. 0:15:31.400 --> 0:15:33.880 We talk a lot about the role that Taiwan plays. 0:15:34.040 --> 0:15:36.200 We talk a lot about the US and the Chips 0:15:36.200 --> 0:15:40.320 Act and its desire to bring chip making capabilities in 0:15:40.440 --> 0:15:43.720 the US. This is Saudi Arabia saying we want to 0:15:43.760 --> 0:15:46.120 have a stake in this as well. We're going to 0:15:46.160 --> 0:15:50.320 incentivize you to come to build and invest right here 0:15:50.360 --> 0:15:51.320 in our backyard. 0:15:52.360 --> 0:16:03.760 Blomberg Technology Senior Executive Editor, Tom Giles, thank you, Happy Friday, boss, 0:16:05.880 --> 0:16:08.440 right shares of draftings Honestly bouncing all over the place, 0:16:08.480 --> 0:16:12.320 but currently up almost five percent after reporting third quarter results. 0:16:13.080 --> 0:16:15.080 Look at that stot Go five percent game. 0:16:15.120 --> 0:16:17.840 The Sports bending company cut his full year revenue forecast 0:16:18.120 --> 0:16:22.000 below analyst estimates reported are wider and then expected loss 0:16:22.040 --> 0:16:25.080 per share. Let's gets Drafting CEO Jason Robbins, There's this 0:16:25.200 --> 0:16:28.440 idea that the streets fixated on that there were customer 0:16:28.520 --> 0:16:32.960 friendly outcomes, particularly in the realm of NFL. Is that 0:16:33.160 --> 0:16:35.800 true to your mind? And what's a customer friendly outcome? 0:16:37.480 --> 0:16:37.800 Well? 0:16:38.000 --> 0:16:41.560 Q three actually we said that we had neutral outcomes, 0:16:41.560 --> 0:16:44.160 so you know, we had exactly kind of as we expected, 0:16:44.200 --> 0:16:47.000 and we ended up having a beat in Q three, 0:16:47.000 --> 0:16:51.600 which is great. Q four aside from these outcomes, would 0:16:51.600 --> 0:16:53.880 have been on track for the same So you know, basically, 0:16:53.880 --> 0:16:57.000 what it means is that the favorites one a lot 0:16:57.080 --> 0:16:59.600 and the big name players scored touchdowns and had a 0:16:59.600 --> 0:17:02.600 lot of And sometimes that happens in sports. You know, 0:17:02.720 --> 0:17:05.600 the book sometimes wins, sometimes the customers win. And it's 0:17:05.600 --> 0:17:07.800 hard to know, right because we're only you know, halfway 0:17:07.840 --> 0:17:09.439 through the quarter yet, how it's all going to end. 0:17:09.480 --> 0:17:11.359 It could easily swing the other way, but at this 0:17:11.520 --> 0:17:14.040 point for the quarter, at least the five weeks that 0:17:14.040 --> 0:17:16.919 we're into it, the customers are winning, and you know, 0:17:16.960 --> 0:17:18.120 over the long term, that's great. 0:17:18.160 --> 0:17:19.400 We need our customers to win. 0:17:19.440 --> 0:17:21.879 Sometimes they want to win sometimes that's part of experiencing 0:17:21.920 --> 0:17:25.400 the product. So we're really excited though that the fundamentals 0:17:25.440 --> 0:17:27.920 are super strong. We saw three hundred BIPs year of 0:17:28.000 --> 0:17:31.560 year improvement in both promotionally and gross margin percentage. Cacs 0:17:31.560 --> 0:17:34.640 were down twenty percent in the quarter. Lots of really 0:17:34.680 --> 0:17:35.520 good things going on. 0:17:36.960 --> 0:17:39.960 It's well, there's lots of things, full stop going on. 0:17:40.760 --> 0:17:42.320 Let's get technology in a little bit. 0:17:42.359 --> 0:17:44.479 But in a week where you have a US election 0:17:44.760 --> 0:17:46.639 and it's getting towards the end of the year, the 0:17:46.680 --> 0:17:50.600 holidays are fast approaching, how does sports betting stand out? 0:17:50.680 --> 0:17:54.080 Like what is the consumer attitude towards placing a bet 0:17:54.320 --> 0:17:55.440 in a week like this one? 0:17:56.960 --> 0:17:59.800 Well, obviously a lot of distraction with the election going on, 0:18:00.040 --> 0:18:03.120 but you know, as you might imagine, people were even 0:18:03.160 --> 0:18:05.720 talking about speculating on one side or the other the 0:18:05.760 --> 0:18:08.640 election markets, and that was available in certain places too. 0:18:08.760 --> 0:18:11.080 So you know, I think it's very much part of 0:18:11.080 --> 0:18:13.479 the culture now that people want to be, you know, 0:18:13.640 --> 0:18:17.960 a participant by having an idea, a prediction, a viewpoint 0:18:18.000 --> 0:18:20.000 on what they think is going to happen. And I 0:18:20.040 --> 0:18:22.159 think betting is really just you know, part of that 0:18:22.280 --> 0:18:23.040 overall trend. 0:18:23.280 --> 0:18:25.880 Jason, I want to jump in on that polymarket call 0:18:26.320 --> 0:18:27.359 a lot of people's attention. 0:18:27.880 --> 0:18:30.240 Would you go there, would you expand in pass sports? 0:18:31.680 --> 0:18:33.480 Well, we would only do it if it were in 0:18:33.520 --> 0:18:37.879 a legal and regulated fashion. So you know, these types 0:18:37.920 --> 0:18:41.600 of markets on elections are regulated at the federal level. 0:18:41.600 --> 0:18:44.320 It's different than the way betting is regulated. You know, 0:18:44.359 --> 0:18:46.760 it's something that maybe we would you know, consider looking 0:18:46.840 --> 0:18:49.720 into before the next election. But I do think that 0:18:50.000 --> 0:18:52.120 it's only something that we would do in a legal, 0:18:52.200 --> 0:18:55.199 regulated environment, which is what differentiates us from some of 0:18:55.200 --> 0:18:56.919 those that are offering and now some are offering it 0:18:57.000 --> 0:18:59.280 legally now too, there is a legal framework for it 0:18:59.320 --> 0:19:00.879 as well, but not everybody is. 0:19:01.080 --> 0:19:04.359 Let's just talk about therefore that passage of legalization. Is 0:19:04.359 --> 0:19:07.080 that going to be easier under the next administration? I 0:19:07.080 --> 0:19:09.800 mean also just from the point of sports betting too, 0:19:09.840 --> 0:19:12.120 we see Missouri Common Line for example. 0:19:13.160 --> 0:19:16.560 Well, definitely for us, it's really you know, the states 0:19:16.600 --> 0:19:19.000 that are legalizing and so a lot of what we 0:19:19.080 --> 0:19:22.440 were watching were the various outcomes and state houses and governors' 0:19:22.520 --> 0:19:26.000 races around the nation. Obviously, you know there is some 0:19:26.160 --> 0:19:30.000 impact from you know, federal government impacts every industry in 0:19:30.040 --> 0:19:33.360 some way or another. But you know, taxes other ways, 0:19:33.400 --> 0:19:36.320 corporate taxes meaning but you know, in terms of legalization, 0:19:37.280 --> 0:19:39.440 our action is really at the state level. So as 0:19:39.440 --> 0:19:43.120 you knowed, Missouri's big win passed about initiative to legalize 0:19:43.160 --> 0:19:46.320 sports betting, and very excited about that. Missouri is the 0:19:46.359 --> 0:19:49.920 eighteenth largest state and the huge sports state. Really great 0:19:49.960 --> 0:19:52.840 sports fans in Missouri, so excited about that one. 0:19:52.880 --> 0:19:53.800 Hopefully that'll get. 0:19:53.760 --> 0:19:56.280 Up and running soon, and you know, hopefully we'll see 0:19:56.280 --> 0:19:58.720 even more action when the legislators come back in session. 0:19:58.760 --> 0:20:01.840 In Kew on Jason, we focus a lot on this 0:20:01.920 --> 0:20:06.399 program about how sport is access the technology right, a 0:20:06.480 --> 0:20:11.800 transition from linear television to OTT and I'm fascinated by 0:20:12.880 --> 0:20:16.879 how the betting markets either benefit or don't benefit from that. 0:20:16.960 --> 0:20:17.160 Right. 0:20:17.240 --> 0:20:20.960 The consumer has so many options about how to watch 0:20:20.960 --> 0:20:24.920 sport and pay for it. You know, it's astonishing. Actually 0:20:25.000 --> 0:20:27.320 what flies out of my bank account each month? Is 0:20:27.359 --> 0:20:30.800 that a tailwind or a headwind to you when you're 0:20:30.840 --> 0:20:32.800 thinking about bets being placed in parallel. 0:20:34.320 --> 0:20:37.360 Well, I think it's actually a tail in that it's 0:20:37.480 --> 0:20:40.760 part of the overall trend we're seeing, which is sports 0:20:40.800 --> 0:20:43.720 and interest in sports continues to grow, and betting is 0:20:43.720 --> 0:20:46.880 a part of that. They're very intertwined, so I think 0:20:46.920 --> 0:20:49.320 they feed off each other as more and more, you know, 0:20:49.400 --> 0:20:52.119 people can see more and more sports from around the world, 0:20:52.200 --> 0:20:54.480 not just their favorite sports or their favorite teams, but 0:20:54.520 --> 0:20:56.719