Speaker 1: From the heart of where innovation, money and power collide
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Caroline Hyde and Ed Ludlow.
Speaker 2: Live from San Francisco. This is Bloomberg Technology coming up
Speaker 2: in Nvidia under pressure as Jensen one heads to China.
Speaker 2: Plus arch aviation plots in New York City, network for
Speaker 2: flying taxis, and TSMC earnings project confidence ahead of.
Speaker 3: A critical week of tech reports.
Speaker 2: We have some breaking news crossing the Bloomberg terminal. A
Speaker 2: federal judge says Google illegally monopolized some online advertising technology market.
Speaker 2: It is a blow to a very key part of
Speaker 2: this company's business. We're showing the stock. It moved to
Speaker 2: a session low down two percent following those headlines.
Speaker 3: Bloombos.
Speaker 2: Kaylee Lines joins me from Washington. Okay, the judge is
Speaker 2: given a partial ruling, so in some areas a yes,
Speaker 2: it says that Google has monopoly in advertising tech markets,
Speaker 2: not in others.
Speaker 3: What is the language the judge used? What do we know?
Speaker 4: Yeah, that's exactly right.
Speaker 5: Ed.
Speaker 6: The judges finding that Google has violated the Sherman Anti
Speaker 6: Trust Acts, Section two of it, specifically by wilfully and
Speaker 6: this is the judge's words, acquiring and maintaining monopoly power
Speaker 6: in the open web display publisher ad server market and
Speaker 6: the open Web display ad exchange market. So servers and
Speaker 6: exchanges are what they have found to violate antitrust laws here,
Speaker 6: and the judge goes on to say that the court
Speaker 6: is going to be setting a briefing schedule at a
Speaker 6: hearing date to determine the appropriate remedies for these anti
Speaker 6: trust violations. It becomes a question, of course, of what
Speaker 6: those remedies are. Knowing that this is not the first
Speaker 6: anti trust difficulty that alphabet is facing, as Google already
Speaker 6: was found in a separate case to have also monopolize
Speaker 6: the search market, and the Justice Department is looking for
Speaker 6: a spinoff of its Chrome browser, specifically in a case
Speaker 6: related to search. So it becomes a question of whether
Speaker 6: or not there may be advertising portions of Google's business
Speaker 6: that also will be looking at spinning off if that
Speaker 6: is what the US pursues. The judge is going to
Speaker 6: consider all avenues. But the point here at is this
Speaker 6: is a second big loss for Google in the courts
Speaker 6: is they have been found to violate antitrust rules when
Speaker 6: it comes to at exchanges and servers. The judge did
Speaker 6: not find justification of a monopoly for a third market
Speaker 6: of tools that is used by advertisers to buy display ads,
Speaker 6: but still on two.
Speaker 3: Out of three.
Speaker 6: Essentially, the judge has ruled against this giant technology company.
Speaker 2: Often antitrust headlines the stock can be insulated from it.
Speaker 2: But we're down two percent. There's a clear reaction here.
Speaker 2: Bloomos K lines out of DC with an excellent summary
Speaker 2: of that breaking news. There is a lot happening in
Speaker 2: financial markets right now. This is a sort of picture
Speaker 2: of the session, and the themes of the moment are
Speaker 2: very similar to what we've discussed all week long. We're
Speaker 2: down around four tenths percent on the AZE like one hundred,
Speaker 2: but the underperformance is in the semiconductor space. That's the
Speaker 2: Philadelphia semi Conductor Index or SOCKS. It is under pressure
Speaker 2: in large part because of Nvidia, and Vidia's market cap
Speaker 2: now below two point five trillion dollars. The news continues
Speaker 2: to be that the United States requires them to hold
Speaker 2: an export license to ship h twenties the custom chip
Speaker 2: they made for the China market to that market. They
Speaker 2: did a write down. We're waiting to see what happens
Speaker 2: next gens and one is in Beijing.
Speaker 3: As we speak.
Speaker 2: TSMC is now at a session kind of low. It's
Speaker 2: up four tenths percent, but it's lost a great deal
Speaker 2: of its gains.
Speaker 3: Very simple story.
Speaker 2: This is the contract manufacturers of the world, the fabricator
Speaker 2: of the key chips in AI. They said that AI
Speaker 2: revenue will double and that they will grow twenty percent,
Speaker 2: and that the demand from what they're seeing is still intact.
Speaker 2: And that's where I want to start the analysis. Let's
Speaker 2: get to Bloomberg Mandeep saying of Bloomberg Intelligence, I mean
Speaker 2: there is a difference between a headline on tariffs and
Speaker 2: the real world impact on the supply chain for semiconductors.
Speaker 2: When you read the commentary that TSMC gave, it seems,
Speaker 2: particularly in the context of capital expenditures from the hyperscalers,
Speaker 2: things are still going well.
Speaker 7: They are.
Speaker 8: And look, they gave a long term guide when it
Speaker 8: comes to AI revenue, which they expect to expand. It
Speaker 8: a five year cake off mid forty percent, very impressive numbers.
Speaker 8: And even with this macro environment, they didn't see any
Speaker 8: demand destruction on the AI side. And I think that's
Speaker 8: key because you know, we saw Nvidia and AMD take
Speaker 8: a charge on the age twenties.
Speaker 9: I mean you could think, you know, they may.
Speaker 8: Have some capacity that goes under utilized, but certainly that's
Speaker 8: not the case. They did say smartphones was still weak.
Speaker 8: So if you talk about a pull forward scenario, I
Speaker 8: think it's definitely happening when it come to AI chips,
Speaker 8: but probably not so much at least in TSMC's numbers
Speaker 8: when it comes to smartphones.
Speaker 3: In video is worth discussion.
Speaker 2: The stocks down four percent, but I don't see any
Speaker 2: single catalyst, right. We know that Jensen Wong is in Beijing.
Speaker 2: Gensen one goes to China all the time to meet
Speaker 2: with employees. Principally, my interpretation of doing a write down
Speaker 2: is that this is not America saying age twenty doesn't
Speaker 2: conform to the rules. But the write down indicates that
Speaker 2: the license requirement in Vidio probably won't apply or has
Speaker 2: not applied.
Speaker 3: How do you read that, Mandy?
Speaker 8: I mean, look, I think the fact that they have
Speaker 8: to go through the process all over again, it's gonna
Speaker 8: take some time, and we know things move really fast
Speaker 8: when it comes to this AI chip wave.
Speaker 3: I mean they are.
Speaker 8: Already to their next architecture Blackwell and they're talking about Rubin,
Speaker 8: So from that perspective, I don't know how they'll be
Speaker 8: able to sell to that market. You know, chips that
Speaker 8: are two generations behind. I'm the current one that they
Speaker 8: are selling, and that's where you know, it's hard to
Speaker 8: sell that to someone else, even though the market is
Speaker 8: under supply. That's what we are hearing from TSMC. So
Speaker 8: clearly there is a lot of demand, but probably not
Speaker 8: for chips that are two generations behind. And I think
Speaker 8: that's how I would look at it.
Speaker 2: Man deep Seeing, who leads the team covering tech at
Speaker 2: Bloomberg Intelligence. Thank you two key names in the market.
Speaker 2: Let's take a deeper look at the chip sector. Jordan
Speaker 2: Klein by side desk analysts that Missouri, Americas, and I'm
Speaker 2: trying to understand the pressure that's in the market right now.
Speaker 2: TSMC's ADRs are just modestly higher, but that was seen
Speaker 2: as a sort of a projection of confidence in the
Speaker 2: face of tariffs. What were the phone calls like that
Speaker 2: you had this morning and the things that crossed your.
Speaker 4: Desk, Well, hey, thanks for having me.
Speaker 10: I mean it's relatively quiet, which I don't know if
Speaker 10: is a good thing or a bad thing. I think
Speaker 10: there would have been a lot more discussion and incoming
Speaker 10: calls had TSM change their outlook or not provided a
Speaker 10: very positive second quarter guide. I think people are really
Speaker 10: in that watch and weight mode obviously TSM and ASML.
Speaker 10: This week in the semiconductor space, with the two big
Speaker 10: earnings reports that people were going to you know, react to.
Speaker 10: ASML was a bit disappointing. Stock fell seven percent. TSM
Speaker 10: was very good and it was expected to be good,
Speaker 10: but it was all.
Speaker 4: You know, all signs clear.
Speaker 10: Everything looks good, both on the consumer front because they
Speaker 10: make a lot of product for Apple and PCs, as
Speaker 10: well as the AI front. So I think in Nvidia
Speaker 10: and I think it's pretty disheartening for people when they
Speaker 10: see the stock fading most of the early gains, because.
Speaker 4: This creates sort of a well, if the companies that.
Speaker 10: Are reiterating and sounding positive are not really trading up,
Speaker 10: what's that going to mean when the rest of semis
Speaker 10: or even tech reports and possibly lowers guidance.
Speaker 4: You know, what are the stocks going to do going
Speaker 4: to do?
Speaker 11: Then?
Speaker 10: So that's why I think no really rushing to buy
Speaker 10: either strength or add any to any names until they
Speaker 10: really see the stock reactions.
Speaker 2: We should point out in America it's a short trading
Speaker 2: week or shorter four day trading week, and though markets
Speaker 2: don't close earlier or anything on Thursday, I'm sure that
Speaker 2: there's some consideration of that towards the end.
Speaker 3: Of the week.
Speaker 2: But you said in your note that investors are highly engaged.
Speaker 3: What does that mean?
Speaker 2: They're going deeper on the research into supply chains or
Speaker 2: they want to know specifically about each of the fabulous
Speaker 2: chip names exposed to China or the fabs exposed as China.
Speaker 3: What do you mean by that.
Speaker 10: Jordan, Well, what I mean is is that people are
Speaker 10: definitely reaching out, asking questions, wanting to know what their
Speaker 10: peers are and the investment community are doing and thinking
Speaker 10: that's because the fundamentals really don't matter that much right now, unfortunately,
Speaker 10: So everyone's kind of feeling around trying to get a
Speaker 10: sense of these macro headlines, what would be perceived as
Speaker 10: you know, positive or negative, and what would cause people
Speaker 10: to get off their hands and deploy more capital.
Speaker 4: So that's what I mean by people are very engaged.
Speaker 4: They're not.
Speaker 10: They're not Actually, how do I say this? They're not
Speaker 10: anxious to go out and buy the dip. They're they're basically,
Speaker 10: but they do have a short list I think of
Speaker 10: names that they would prefer or names they would avoid.
Speaker 4: But they're very curious to see, like what is.
Speaker 10: It going to take to get people on the in
Speaker 10: the investment community incrementally more positive or negative?
Speaker 4: And unfortunately we just haven't seen enough yet to go
Speaker 4: off of.
Speaker 2: Next week we get earnings reports from the likes of
Speaker 2: Tesla and Intel. What do you need to see from
Speaker 2: those reports to give you some confidence.
Speaker 4: Well, they're very different, obviously.
Speaker 10: I mean for Tesla, I think it's it impacts a
Speaker 10: lot more of the retail investment community. I don't tend
Speaker 10: to speak to a lot of large mutual fund funds
Speaker 10: or institutional owners. Who are you hanging a lot on
Speaker 10: how Tesla sounds. I think the bar is relatively low
Speaker 10: for Tesla, so I think it's more about plans for
Speaker 10: new potential vehicles and timing on that front, because most
Speaker 10: of the checks and the initial monthly reports have not
Speaker 10: been great in terms of their unit sales. I think
Speaker 10: for Intel, it's not about the numbers. I think this
Speaker 10: quarter should be fine. There is some risk that maybe
Speaker 10: there's a little bit of downside next quarter. I think
Speaker 10: more so it's the new CEO taking charge and outlining
Speaker 10: some of the strategy and recall that the bigger event
Speaker 10: for Intel probably is going to come, I think on
Speaker 10: April twenty ninth, when they're hosting a investor update on
Speaker 10: their foundry business. I think that's where you'll get more
Speaker 10: details again on their strategy and the technology that they're
Speaker 10: trying to move forward.
Speaker 3: Jordan Klin in Missouri. It's great to have you back
Speaker 3: on the program. Thank you very much. Now, coming up
Speaker 3: on blue Berg Technology, the week comes to a close for.
Speaker 2: The ftc anti trust case against Meta. Will bring you
Speaker 2: the latest next, this is Bloomberg Technology. We've been covering
Speaker 2: the ftc anti trust trial against Meta all week. Yesterday,
Speaker 2: Meta's former COEO, Cheryl Samberg, was on the stand talking
Speaker 2: about the company's efforts to block competitors from advertising.
Speaker 3: On the platform.
Speaker 2: Bloomberg's Riley Griffin, who covers Meta for US, is back
Speaker 2: here in the San Francisco studio. That's interesting Cheryl Samberg
Speaker 2: kind of returning as a witness in this case. What
Speaker 2: was she asked? What was she talking about? And where
Speaker 2: did we end the week.
Speaker 12: Yeah, it's really a great question. And one of the
Speaker 12: things the FTC has argued is that the introduction of
Speaker 12: ads to the platforms have actually degraded the quality of
Speaker 12: the services. And Cheryl Sandberg, the former CEOO, actually reversed
Speaker 12: that point and said that it has been a boon
Speaker 12: to the product, it has benefited users and really countered
Speaker 12: the argument the FTC has been making in this milestone.
Speaker 13: Of a week.
Speaker 2: Over the course of this short week, Meta stock is
Speaker 2: down seven percent.
Speaker 3: It's hard to draw a causal.
Speaker 2: Relationship between what's happening in that trial and the events
Speaker 2: of the stock market. Where do we kind of leave it?
Speaker 2: And I think it's probably important for the audience to
Speaker 2: understand this is a multi week process.
Speaker 3: It's going to go on for a while.
Speaker 12: We've got several weeks ahead of us. This was the headliner,
Speaker 12: if you will. We had three days of testimony from
Speaker 12: Mark Zuckerberg ten hours and several revelations from his emails.
Speaker 12: If you take a tour through them, you'll learn that
Speaker 12: Instagram was considered to be spun was considered to be spun.
Speaker 9: Off in twenty eighteen.
Speaker 12: We also learned about a six billion dollar bid for Snapchat.
Speaker 12: So a lot came up, but more weeks to come,
Speaker 12: and I think we'll continue to see volatility throughout The's.
Speaker 3: Riley Griffin covering all things Meta. Thank you very much.
Speaker 2: Over to DC, a bipartisan House committee says Chinese AI
Speaker 2: firm Deep Seek is a quoite profound threat to US
Speaker 2: national security, citing its ties to Chinese government interests and
Speaker 2: alleged circumvention of US export controls. Bast Mike Shepherd joins
Speaker 2: us with the details. There's a lot going on right
Speaker 2: now in the political sphere, but we're paying attention to
Speaker 2: the commentary of this committee.
Speaker 3: Why and what was said, Mike.
Speaker 14: Well, this is an important episode in this long running
Speaker 14: fubue with China over advanced technology, especially artificial intelligence. Remember,
Speaker 14: deep Seek made its big breakthrough writer as Donald Trump
Speaker 14: was taking the oath of office, and in the following
Speaker 14: week we really saw equities here in the US slide
Speaker 14: on fears that maybe this AI boom was oversold and
Speaker 14: overpriced because Deep Seek was promising to do things cheaper
Speaker 14: and perhaps faster and more efficiently using whatever technology it may.
Speaker 9: Have had at its disposal.
Speaker 14: Now the committee is raising questions about deep Seek on
Speaker 14: a couple of different levels. One is just what it does,
Speaker 14: and it is echoing concerns it has flagged about TikTok,
Speaker 14: and those are namely security related.
Speaker 9: One it's concerned that the.
Speaker 14: App is collecting user data here in the US and
Speaker 14: siphoning it back to China.
Speaker 9: Two, it is.
Speaker 14: Concerned that it may have ties and it cited corporate
Speaker 14: filings to the Chinese government similar claim it's made with
Speaker 14: relation to ByteDance and its ownership of TikTok. And three
Speaker 14: there's also concern that the platform itself could be censored
Speaker 14: to reflect Chinese views.
Speaker 9: And we have seen if you just run.
Speaker 14: A test on putting what happened in Tianamen Square, you're
Speaker 14: going to get a very different answer, and one that
Speaker 14: is much more in line with the Chinese government. The
Speaker 14: other question ed though, is export controls, and the committee
Speaker 14: recommended those because there is a concern that maybe deep
Speaker 14: Seek managed to get around those to obtain the chips.
Speaker 9: That it used.
Speaker 2: There was also a sort of forensic discussion of Nvidia's
Speaker 2: role with deep Seek. The number GPUs the deep Seak
Speaker 2: had from Nvidia, and amongst everything I saw the response
Speaker 2: from Nvidia. You know, in summary, that they follow the
Speaker 2: instructions of the US government to the letter. That's consistently
Speaker 2: what Nvidia says. What else do we need to know?
Speaker 14: Well, one thing that's important to understand here is that
Speaker 14: the committee is applying separate pressure on in Nvidia to
Speaker 14: get more information about how its chips are being sold
Speaker 14: across Asia, and they want information going all the way
Speaker 14: back to twenty twenty about its customers, not only in China,
Speaker 14: but in eleven nations across the Pacific Rim.
Speaker 9: They want to know how those H twenty chips.
Speaker 14: That Deep Seek is believed to have used may have
Speaker 14: ended up en mass in the firm's possession and helped
Speaker 14: it to develop that R one model and make it
Speaker 14: such a breakthrough. The concern is that in video, maybe
Speaker 14: it knows its customers, but maybe it doesn't as well
Speaker 14: in video. Of course, Yesterday responding very quickly to say
Speaker 14: that it abides by all US export restrictions and is
Speaker 14: eager to continue working with the US government, even as
Speaker 14: it tries to protect its business in China, which we
Speaker 14: see Jensen Wang doing with a visit to Beijing just
Speaker 14: in the past twenty four hours.
Speaker 2: Bloomberg's Mike Shepard thank you very much. Coming up on
Speaker 2: Bloomberg Technology, Perplexity is nearing a deal with smartphonemakers to
Speaker 2: take on the likes of Google's Gemini Virtual Assistant. We've
Speaker 2: got some details on Bloomberg reporting ahead. This is Bloomberg Technology.
Speaker 2: Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
Speaker 2: I thought we'd look at markets over the course of
Speaker 2: five days, and that includes last Friday session, where then
Speaker 2: as that one hundred in particular ended.
Speaker 3: That week strong.
Speaker 2: It is a short trading week here in the United States.
Speaker 2: Fridays is a market's holiday. The overriding story is tariffs
Speaker 2: and tariff's anxiety. But when it comes to technology, I'm
Speaker 2: showing them as that one hundred, but it could as
Speaker 2: well just as well be semiconductor stocks. It's also about
Speaker 2: technology export controls. We've been talking about that all week
Speaker 2: on the five day track. With down about seven percent
Speaker 2: sixtens a percent on the Nasdaq one hundred in terms
Speaker 2: of single names, we're now going to shift how we focus. Right,
Speaker 2: all of the oxygen this week has been consumed by
Speaker 2: the chip names.
Speaker 3: Intel is down three percent.
Speaker 2: In part because on its earnings called TSMC said without
Speaker 2: naming Intel. It isn't working with anyone on technology or
Speaker 2: manufacturing sharing. That seems to have hit that stock. Tesla
Speaker 2: reports next week very interesting, not just on the company
Speaker 2: and supply chain, but Elon Musk and his role with
Speaker 2: DOGE and the US government. And then Netflix has buoyancy.
Speaker 2: If there's one name where things are different, it's in
Speaker 2: this name.
Speaker 3: Now. Wall Street's hoping Netflix can.
Speaker 2: Continue to provide the escapism it desperately needs. Shares of
Speaker 2: the streaming giant have risen nearly eight percent so far
Speaker 2: this year, risen eight percent, with many investors hoping it
Speaker 2: could be a safe haven away from the Tarif turmoil
Speaker 2: that has ruled much of financial markets. Nine percent, i
Speaker 2: should say, so far. In twenty twenty five, blumo's Ryan
Speaker 2: Voselica made this the subject of his musings and right
Speaker 2: this morning, first thing I read two am Pacific time.
Speaker 2: Why is Netflix able to stand out in this environment?
Speaker 7: Hey?
Speaker 9: Thanks for having me.
Speaker 15: So I'll say what one analyst said in a recent
Speaker 15: research report. Netflix has both offensive and defensive characteristics. It's
Speaker 15: still growing quite strongly. It's improving profitability in cash flow.
Speaker 15: The multiple is coming down, especially relative to its own history.
Speaker 15: But at the same time it is seen as quite
Speaker 15: recession resilient. People say that, you know, if there is
Speaker 15: a broader economic contraction or weakness, and Netflix subscription is
Speaker 15: not going to be the thing that you cut in
Speaker 15: order to save money.
Speaker 3: People think it gives you a good.
Speaker 15: Bang for your buck, and that's why people think you're gonna,
Speaker 15: you know, stay with it no matter what happens. So
Speaker 15: that's the reason why we're seeing the stock, you know,
Speaker 15: perform quite well this year.
Speaker 2: Next week for you, for I, for the Bloomberg Technology
Speaker 2: team is a big week because earning star in earnest
Speaker 2: is there a common thread between the Tesla's intels, netflixes
Speaker 2: and then this mag seven names the following week that
Speaker 2: the team is preparing for in its coverage.
Speaker 3: From the stock perspective, at least, well.
Speaker 15: I think everyone has focused so much on tariffs and
Speaker 15: outlooks and what these companies say about their expectations for
Speaker 15: the remainder of the year.
Speaker 3: There are so much uncertainty out there.
Speaker 15: We've already seen some very big companies pull their outlooks
Speaker 15: talk about how difficult it is to make forecasts in
Speaker 15: this kind of environment. If we see that continue with
Speaker 15: the big tech is given their size and influence and
Speaker 15: major indexes, it's likely that's going to have some broader ramifications.
Speaker 2: Ryan BLACEELCA have a good long holiday weekend in the States,
Speaker 2: get ready for next week, and Netflix is really what
Speaker 2: kicks it off right for more and what we can
Speaker 2: expect from Netflix in the streaming landscape more broadly, Magli
Speaker 2: grossim Science senior research analysts, joins us Now, I find
Speaker 2: that so interesting. I actually did a double take when
Speaker 2: we showed like the Netflix performance so far in the year,
Speaker 2: because all the other companies that we cover in our
Speaker 2: world are going through such pain. The streaming business broadly
Speaker 2: seems healthy.
Speaker 3: Is that what you see, Maglie, Yes, it is.
Speaker 7: I would say Netflix definitely has some different characteristics going
Speaker 7: on this quarter than some of their peers, and we
Speaker 7: definitely would see them as you know, like Ryan was saying,
Speaker 7: as safe haven through the rest of this year if
Speaker 7: we are to face increasing consumer uncertainty. I think Netflix
Speaker 7: has also really shown over the last few quarters, especially
Speaker 7: in Q four, with the blockbuster numbers they put up,
Speaker 7: that they're really separating from the pack and the others
Speaker 7: aren't able to compete in the same way that Netflix
Speaker 7: is largely due too.
Speaker 13: I think it's content slate.
Speaker 3: Well and just let's go. I was going to ask,
Speaker 3: what is it that separates them from the pack.
Speaker 2: You know, at home, we just started watching the latest season.
Speaker 3: Of Black Mirror.
Speaker 2: There are no spoilers on this show ever, no spoilers
Speaker 2: on Blueboats Analogy, but episode one was deeply upsetting. Had
Speaker 2: a very sort of big name cost. Is it just content?
Speaker 2: Is it pricing?
Speaker 7: Like?
Speaker 3: Why do they stand out?
Speaker 7: I think there's a few reasons. Content is a big one.
Speaker 2: You had.
Speaker 7: So if we go back a couple of years, a
Speaker 7: lot of the other streamers, even pre writer strike, they
Speaker 7: had started to cut content, spent in efforts to you know,
Speaker 7: try to aim toward profitability, given that's been such a
Speaker 7: challenge for these other streamers. So that was, you know,
Speaker 7: kind of gave them an additional hit on top of
Speaker 7: the writer's strike. And you really only get from these
Speaker 7: other streamers a couple Tempole releases. There's some great stuff,
Speaker 7: you know, Max Hulu, Paramount, but you don't get quite
Speaker 7: the volume. And all of these surprises that come out
Speaker 7: of Netflix continue to amaze people adolescents. I think is
Speaker 7: a big one. Not many people would have expected that
Speaker 7: to be, you know, top three of all time for
Speaker 7: Netflix series engagement, and that was again I think just
Speaker 7: a piece of evidence that they've got such an amazing
Speaker 7: global content engine.
Speaker 3: Maglie. How proactive does Netflix.
Speaker 2: Need to consider pricing when we think about the health
Speaker 2: of consumers around the world.
Speaker 7: I think they have a decent amount of pricing power
Speaker 7: left to go for sure. They obviously right now are
Speaker 7: in the midst of doing a price hike that they
Speaker 7: announced a couple months ago. We just saw that flow
Speaker 7: through to existing subscriber bills in March. So at a science,
Speaker 7: what we do is use all data in order to
Speaker 7: look at all of the subscriber trends, which we'll still
Speaker 7: be able to see even though the company is removing
Speaker 7: the reported subscriber numbers. So what we see with pricing
Speaker 7: right now, we are seeing a hit to churn, which
Speaker 7: we think is both related to price hikes as well
Speaker 7: as some cycle in cycle out activity from live events
Speaker 7: in Q four. But we ultimately think that's going to
Speaker 7: be temporary, and usually after Netflix pricykes, you get this
Speaker 7: temporary couple months of elevated churn relative to seasonal norms,
Speaker 7: and then it kind of abates thereafter, so we would
Speaker 7: expect it likely to be temporary. Even with that elevated churn,
Speaker 7: they still are far better than all of their peers
Speaker 7: in terms of retention.
Speaker 2: When I travel principally on tablet or my smartphone, I
Speaker 2: play a little bit with Netflix's mobile games. I don't
Speaker 2: really get the Netflix gaming story.
Speaker 3: I don't I get that.
Speaker 2: They're committed to it, But what do you see is
Speaker 2: the kind of long term from that business line, and
Speaker 2: what do you expect them to tell us more near
Speaker 2: term about what they're doing.
Speaker 7: Yeah, I think the near term is probably going to
Speaker 7: be a continuation of what we have heard from them
Speaker 7: on games the last few quarters, which is that it's
Speaker 7: still a small piece of the overall puzzle. They more
Speaker 7: so are viewing it as you know, a franchise benefit.
Speaker 7: So can they create a game about Emily and Paris
Speaker 7: that also drives, you know, overall engagement of the show
Speaker 7: and therefore it's part of their whole flywheel. So I
Speaker 7: think probably near term we'll see it continue to be
Speaker 7: a small piece of the overall puzzle for them, but
Speaker 7: long term could be contributing a bit more. I don't
Speaker 7: think it's ever going to be necessarily a key driver
Speaker 7: for them outside of you know, everything else that they
Speaker 7: have going on.
Speaker 2: Maglie, what's the biggest threat to Netflix and where does
Speaker 2: the competition come from?
Speaker 7: Biguess threat? I would say, I think, you know, content
Speaker 7: is something that they have to continue to stay ahead
Speaker 7: of the game on live events. I think in terms
Speaker 7: of what they have to spend on live events, that
Speaker 7: could become a trickier part. As they've gotten more involved
Speaker 7: in sports, which you know we've seen that do pretty
Speaker 7: well for them, that has caused, like I mentioned earlier,
Speaker 7: some cycle in, cycle out activity, So I think that
Speaker 7: could potentially change the retention profile, but also going to
Speaker 7: be you know, a great tool for them to get
Speaker 7: different parts of the market that they weren't previously able
Speaker 7: to get. And then the AD tier that's something that
Speaker 7: they've been you know, behind some of their peers on
Speaker 7: in terms of getting into that market. So that's something
Speaker 7: we definitely think that they should continue to ramp up.
Speaker 7: That that had a little bit slower of a start
Speaker 7: than I think a lot of people expected initially, but
Speaker 7: has done well the last few quarters. Q four they
Speaker 7: stated around fifty percent of sign ups that were choosing
Speaker 7: that AD tier and then we're seeing that continue to
Speaker 7: grow about ten percent year year in terms of the
Speaker 7: selection rate for gross ads opting into that ad.
Speaker 2: Tire Michaely Gross of M Science. Great to have you
Speaker 2: on the show. Thank you very much. Now coming up,
Speaker 2: we speak with Archer Aviation CEO Adam Goldstein.
Speaker 11: This is Bloomberg Technology.
Speaker 2: Arch Aviation hopes to reshape New York's air transportation, linking
Speaker 2: Manhattan to major airports using its midnight ev Tol aircraft.
Speaker 2: It's a vision that could take your journey from one
Speaker 2: to two hours in the car to as little as
Speaker 2: five minutes. Joining us now, Adam Goldtein, CEO and co
Speaker 2: founder of arch Aviation. Okay, let's go to the basics first,
Speaker 2: the map, the hubs and the airports that you want
Speaker 2: to connect.
Speaker 9: Well, thanks Ed.
Speaker 5: We are building the future of aviation here, and so
Speaker 5: today we announced our New York route network where we
Speaker 5: will be really trying to execute on the home to
Speaker 5: airport trips, really focusing on nine core locations, the large
Speaker 5: international airports GfK, LaGuardia, Newark, the big heliports located in
Speaker 5: Manhattan West Side, east Side, and the Downtown Skyport, and
Speaker 5: then also the big regionals, Teterborough, Westchester.
Speaker 2: Air Long Island, Adam, we need to reflect on the
Speaker 2: tragic events of last week, right of a helicopter that
Speaker 2: crashed in New York City to the Hudson. I bring
Speaker 2: that back with the context. I've spent a lot of
Speaker 2: time with arch aviation, right, and one of the pitches
Speaker 2: that you have is that the technology relies in part
Speaker 2: on pre certified components.
Speaker 3: In other words, the FAA knows.
Speaker 2: These components because they are more commonplace in other aircraft.
Speaker 2: But those watching want to know the safety confidence that
Speaker 2: you have. How does the Midnight compare to a normal
Speaker 2: helicopter and what redundancies have you put in place to
Speaker 2: make it safe.
Speaker 5: So these aircraft are powered by an electric powertrain, and
Speaker 5: that's really the key new technology that enables this new
Speaker 5: level of redundancy that we haven't seen before with vertical
Speaker 5: left aircraft. And so the Midnight aircraft has twelve electric engines,
Speaker 5: it has a big wing, and it has redundancy built
Speaker 5: into the entire system that enables a very very safe flight.
Speaker 5: And that's the type of safety that cannot be offered
Speaker 5: today with helicopters. So this is something that we're aligned
Speaker 5: with not only the FAA, but really the future of
Speaker 5: aviation to keep bringing and keep innovating in the aviation industry,
Speaker 5: to make products.
Speaker 3: Safer and safer.
Speaker 2: Adam, you have an aggressive and ambitious timeline. Not just
Speaker 2: in New York City, other parts of America, are the
Speaker 2: parts of the world where does FAA certification stand, because
Speaker 2: you cannot deploy until you get that.
Speaker 5: So actually, we've been working around the world to enable
Speaker 5: an ecosystem to allow us to launch, and in fact,
Speaker 5: one of our biggest supporters and big investors in DABI,
Speaker 5: has created a pathway to allow us to launch as
Speaker 5: early as this year, and so we've been partnered with
Speaker 5: the country and we have found a pathway to now
Speaker 5: start early operations. Now, of course it'll be very low
Speaker 5: scale to really prove out the concepts, prove out a
Speaker 5: lot of the safety case here, but then the global
Speaker 5: regulators can leverage that data to really de risk the platforms.
Speaker 5: And so we will launch there as soon as this year,
Speaker 5: with a goal to launch in the US via the
Speaker 5: FAA shortly after that.
Speaker 2: Have you met with the new administration and key members
Speaker 2: like Transport Secretary Duffy.
Speaker 5: I have the new administration has been very forward leaning
Speaker 5: and very supportive of the industry. They want to see
Speaker 5: products made in America, they want American innovation, they want
Speaker 5: America to lead in aviation. So yes, I did spend
Speaker 5: time with Secretary Duffy. I have spent time down at
Speaker 5: mar Lago, and the new administration has been very supportive
Speaker 5: and I'm confident will continue to be a good alley
Speaker 5: of the industry.
Speaker 2: Adam Goldstein of Archre Aviation, It's great to have you
Speaker 2: here on Bloomberg Technology, Thank you very much. Meanwhile, ev
Speaker 2: Maaker x Pong is looking to ramp up its global
Speaker 2: expansion despite geopolitical uncertainty. CEO he Jupeg spoke exclusively with
Speaker 2: Bloomberg Steven Engel and began by addressing the tariff uncertainty.
Speaker 11: That's all.
Speaker 16: She also, for a company, we expect stability in any case.
Speaker 16: Stability will bring political, economic and cultural certainty, and only
Speaker 16: then we can formulate a clear corporate strategy. So we
Speaker 16: deeply believe that stability is above all. In fact, Europe
Speaker 16: is the focus of Explain's globalization strategy, and we will
Speaker 16: strengthen our business in regions including Southeast Asia, the Middle East,
Speaker 16: Central America and South America. However, we still hope that
Speaker 16: one day more Chinese companies will be able to expand
Speaker 16: their businesses into other countries, including North America, understable policy conditions.
Speaker 17: We know that the Chinese and the Europeans have restarted
Speaker 17: talks about this minimum price mechanism potentially to replace the
Speaker 17: tariffs which can go as high as forty five percent
Speaker 17: into the EU. How would that affect your plans for
Speaker 17: the European market Potentially would that mean scaling back on
Speaker 17: the immediate need to have your own production bases in Europe.
Speaker 16: Well, we have noticed this news, but I believe the
Speaker 16: talks are still in their early stages. For me, the
Speaker 16: certainty lies in the terror policies that China and you're
Speaker 16: clearly implement it last year. As we expanin, we firmly
Speaker 16: believe that only through localization in areas of localized R
Speaker 16: and D service, manufacturing and sales, can we ultimately achieve
Speaker 16: comprehensive globalization. So we are working on how to better
Speaker 16: implement our localization strategy in Europe and other regions. In
Speaker 16: the future, we will announce our localization strategy in certain
Speaker 16: countries and expect to have more localization strategy in more markets.
Speaker 17: Let's talk about chips, because you need these chips across
Speaker 17: the board, whether it's your flying cars, your humanoid robots,
Speaker 17: your industrial robots, and of course self driving robotaxis and
Speaker 17: the like.
Speaker 9: How critical was it to build.
Speaker 17: These chips in house, not necessarily rely on the Nvidia
Speaker 17: for chips and create your own touring chips. Was this
Speaker 17: because it's cheaper, or because of export controls, or because
Speaker 17: you have to meet certain requirements from the Chinese government
Speaker 17: that more chips in these kind of products need to
Speaker 17: be made in China.
Speaker 16: Yeah, Actually, companies like Tesla and Apple are developing their
Speaker 16: own chips, and they're certainly collaborating with Nvidia and many
Speaker 16: other chip suppliers. According to our research, each expang vehicle
Speaker 16: contains fifty five hundred chips from global suppliers. Given the
Speaker 16: large number of chips, the reason the XPAN is working
Speaker 16: on the in house chips is that we hope we
Speaker 16: can leverage our own capabilities. For instance, if we aim
Speaker 16: to achieve autonomous driving and use global autonomous driving systems,
Speaker 16: we need chips that can help our autonomous driving perform
Speaker 16: better in conditions like nighttime and glare. We hope to
Speaker 16: maximize the performance of the chips, and at this point
Speaker 16: there is a huge value of customized chip. So in
Speaker 16: the future, we believe we will collaborate with many chip suppliers,
Speaker 16: including Nvidia, while continuing to focus on developing our own
Speaker 16: customized AI chips.
Speaker 2: That was x Pong CEO hu Jaopeng speaking with their
Speaker 2: own Steven engeln are coming up. Open ai looks to
Speaker 2: a three billion dollar acquisition that could supercharge its coding ambitions.
Speaker 3: That Bloomberg scoop.
Speaker 2: Next, let's get a quick check back on that breaking
Speaker 2: story about Google. A judge has found that Google was
Speaker 2: partially guilty of illegally monopolizing parts of the advertising technology market.
Speaker 2: And what we're seeing is alphabet shares under pressure down
Speaker 2: one point five percent. Elsewhere advertising in ad tech related
Speaker 2: socks really rallying on that news a partial finding a
Speaker 2: monopolistic practice by Google.
Speaker 3: More.
Speaker 11: Next, this is Bloomer Technology.
Speaker 2: Open ais and talks to acquire AI assisted coding tool
Speaker 2: Windsurf for about three billion dollars.
Speaker 3: That's according to sources.
Speaker 2: Bloomberg's Rachel Metz broke the story with the team and
Speaker 2: if I remember correctly, until several days ago, Windsurf was
Speaker 2: known as Odium. But this is a significant acquisition for
Speaker 2: open ai if it happens, In fact, the biggest by
Speaker 2: open ai.
Speaker 18: Yeah, but the biggest pie quite a bit if it
Speaker 18: goes through. In our reporting we found out that open
Speaker 18: ai and Windsurf are talking about open THEI buying Windsurf
Speaker 18: for about three billion dollars. And you know, things could change,
Speaker 18: but it would make a lot of sense for open
Speaker 18: ai to buy this company given that it and other
Speaker 18: companies have increasingly expanded into the market for AI coding assistance.
Speaker 2: Okay, what's the space for coding assistance like Windsluf's not
Speaker 2: the only name, and why is it something that open
Speaker 2: ai just can't do themselves.
Speaker 13: Open ai actually does some of this stuff itself.
Speaker 18: Also competitors like Anthropic, their AI models focus increasingly on coding,
Speaker 18: and in a lot of cases, these large language models
Speaker 18: have gotten better and better.
Speaker 13: They've been trained to be better and better at coding.
Speaker 18: But there's also like an increasing space here their companies
Speaker 18: such as Windsurf. There's also there's githubs codec or sorry
Speaker 18: co pilot. There's also Cursor, which comes from any sphere,
Speaker 18: and these companies are growing fast and they're getting users,
Speaker 18: and they're users that are paying, and that's a key here.
Speaker 13: You need people to pay for these AI products.
Speaker 2: Well, it wasn't long ago that I was introduced to
Speaker 2: windsurf at that time known as Codium, Like literally not
Speaker 2: long ago. It seems to have grown and commercialized very quickly.
Speaker 13: Yeah, it is.
Speaker 18: It's funny because a few months ago, people were constantly
Speaker 18: talking about Cursor.
Speaker 13: Everywhere you went, it was Cursor, Cursor, Cursor, within this
Speaker 13: everywhere you went, within this AI sphere.
Speaker 18: People are still talking about Cursor a lot, and it's
Speaker 18: still extremely popular. But then I started to hear, you
Speaker 18: know a little bit more recently windsurf, Windsurf, windsurf. So
Speaker 18: there's a there's definitely room for a few competitors here,
Speaker 18: and it seems like open Ai thought that this would
Speaker 18: be a really good one to snap up the.
Speaker 2: Most Rachel Mets with great reporting from the tech team
Speaker 2: appreciate it. But that does it for this edition of
Speaker 2: Bloomberg Technology. I want to go back to some of
Speaker 2: the names that we've been watching throughout the show. Right,
Speaker 2: this is what they look like in the moment, specifically
Speaker 2: focused on Google, A judge finding that partially they had
Speaker 2: monopolistic practices in the ad tech market that breaking news.
Speaker 3: TSMC's US shares.
Speaker 2: Have given up gains after really strong earnings report, and
Speaker 2: Netflix is just around the corner and it is standing
Speaker 2: out in the tech sector which is under pain. So
Speaker 2: much more to come next week. This is Bloomberg Technology