WEBVTT - Big Tech Takes Center Stage 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanivk. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnessing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:33.639 YouTube search Bloomberg Global News. We saw it very clearly 0:00:33.840 --> 0:00:36.400 after the company reported earnings after the close yesterday. The 0:00:36.400 --> 0:00:39.600 stock dropping we're seeing in today's trade. We're talking about Microsoft, 0:00:39.840 --> 0:00:42.199 those shares having the biggest intro trade drop since mar 0:00:43.600 --> 0:00:45.879 So this is just as the pandemic was getting underway. 0:00:46.120 --> 0:00:49.120 The company giving a lackluster forecast for sales growth and 0:00:49.120 --> 0:00:52.319 it's Azure cloud computing services businesses, which is Tim as 0:00:52.360 --> 0:00:54.880 you know going into it, we were all going to 0:00:54.880 --> 0:00:56.960 be watching that very closely because it tells you about 0:00:56.960 --> 0:00:59.319 corporate demand. Yeah, we got Dina Bass with us. She's 0:00:59.320 --> 0:01:01.520 Seattle bureau chief for Bloomberg News. She joins us on 0:01:01.560 --> 0:01:04.040 the phone from our Seattle bureau follower on Twitter at 0:01:04.120 --> 0:01:06.800 Dina Bassna. Good to have you with us. We've had 0:01:06.840 --> 0:01:10.080 what not quite twenty four hours to digest these numbers 0:01:10.120 --> 0:01:13.560 from Microsoft, But can you tell us some details when 0:01:13.560 --> 0:01:16.520 it comes to the sales forecast from Microsoft Azure the 0:01:16.520 --> 0:01:19.920 company's cloud computing division? Is that right that it's sort 0:01:19.920 --> 0:01:23.520 of a bigger story about the global economy because so 0:01:23.560 --> 0:01:28.080 many companies rely on Microsoft, It's a little hard to 0:01:28.080 --> 0:01:30.080 tell at this point, So I think just narrowing it 0:01:30.120 --> 0:01:32.840 down a little bit to Microsoft, I think this is 0:01:32.880 --> 0:01:35.479 a number that is very closely watched and is seeking 0:01:35.560 --> 0:01:38.280 on outside. Is important important in terms of what it 0:01:38.400 --> 0:01:41.320 is about Microsoft prospects. It is the only number that 0:01:41.319 --> 0:01:44.319 the company releases about it as your cloud computing business, 0:01:44.319 --> 0:01:47.520 which is something that people focus on quite a bit 0:01:47.640 --> 0:01:50.040 as the future of the company. Um since they've been 0:01:50.080 --> 0:01:53.440 transitioning to cloud services. The question you ask is whether 0:01:53.560 --> 0:01:56.560 this means that demand is slowing, that that companies are 0:01:56.600 --> 0:02:00.720 holding off on purchases. Is harder to answer because the 0:02:00.720 --> 0:02:04.160 way Microsoft position this is um that what they're seeing 0:02:04.240 --> 0:02:07.360 is companies try to sort of optimize their spend with 0:02:07.440 --> 0:02:09.680 the word they used, which means, you know, make sure 0:02:09.760 --> 0:02:11.800 that they're not spending more than they should be, that 0:02:11.840 --> 0:02:15.640 they're running their cloud applications efficiently. So what that indicates 0:02:15.639 --> 0:02:19.000 is that Microsoft is seeing companies be careful about their spending. 0:02:19.520 --> 0:02:22.840 They the company has has not said and told me 0:02:22.919 --> 0:02:25.200 it's not the case. The companies are actually large companies 0:02:25.200 --> 0:02:27.519 at least are actually holding off on spending or holding 0:02:27.560 --> 0:02:30.760 off on cloud deal, holding off on Azure deals. But 0:02:30.880 --> 0:02:34.440 that's what everyone's wondering. So so not necessarily tightening the belt, 0:02:34.560 --> 0:02:37.639 but kind of I don't know, looking for coupons. I 0:02:37.639 --> 0:02:39.600 don't know what's what's the right way to think about this. 0:02:39.600 --> 0:02:42.240 They're thinking about whether or not, Carol, we actually need 0:02:42.320 --> 0:02:44.639 something well and and you know, DNA attempt speak to 0:02:44.680 --> 0:02:46.160 a good point because I feel like whenever we talk 0:02:46.200 --> 0:02:48.760 to strategists and they talk about tech spending, I t 0:02:48.919 --> 0:02:51.000 spending there like it's so crucial for our companies in 0:02:51.080 --> 0:02:53.480 terms of their businesses. So how do we think about 0:02:53.480 --> 0:02:57.440 it in terms of how do we gauge what this says? 0:02:57.520 --> 0:03:00.200 I mean, Microsoft still selling a ton of stuff us 0:03:01.840 --> 0:03:05.400 that's correct, clearly companies are still spending a lot on 0:03:05.520 --> 0:03:11.040 Azure and also on Microsoft's Office cloud software. The note 0:03:11.040 --> 0:03:14.280 of caution here those worth watching. So that's the exact 0:03:14.320 --> 0:03:16.760 question as you put in, our companies trying to save 0:03:16.919 --> 0:03:19.520 to do more with less or are they actually cutting 0:03:19.919 --> 0:03:23.519 or holding off at some point or freezing. People will 0:03:23.560 --> 0:03:27.080 also be looking on Thursday to Amazon Web Services results 0:03:27.120 --> 0:03:29.800 to see what that means for cloud demand. The place 0:03:29.840 --> 0:03:33.560 that we we clearly have seen cuts is in the 0:03:33.600 --> 0:03:37.280 other part of Microsoft business, to the PC software. Uh 0:03:37.280 --> 0:03:40.640 and that also has impact on UM. You know, that 0:03:40.680 --> 0:03:44.000 has impact on the on the overall numbers because Microsoft 0:03:44.240 --> 0:03:47.000 PC business is so much more profitable. Those are still 0:03:47.040 --> 0:03:49.800 very high profit margin businesses to cloud businesses of lower 0:03:49.840 --> 0:03:53.200 profit margins. So the other problem that investors have to 0:03:53.200 --> 0:03:56.040 grapple with on Microsoft is the Azure growth rate forecast 0:03:56.080 --> 0:03:58.760 was below what investors might have folks, and that's the 0:03:58.840 --> 0:04:01.920 more profitable part of the business asure as are in 0:04:01.920 --> 0:04:04.320 the Office cloud sales. I love what you wrote, new story, 0:04:04.360 --> 0:04:05.760 and when you talk about Azure, you know a few 0:04:05.800 --> 0:04:08.119 years ago the division was doubling sales every quarter. Growth 0:04:08.240 --> 0:04:11.080 rates have slowed as total revenue became large enough to 0:04:11.120 --> 0:04:14.000 make gains of that magnitude were challenging. I mean, this 0:04:14.080 --> 0:04:18.760 was coming I believe was that from the was a 0:04:18.880 --> 0:04:22.120 the CFO actually talking about that. Um. But it's interesting, 0:04:22.279 --> 0:04:25.960 you know because right, it's these businesses when they first 0:04:25.960 --> 0:04:28.359 come out of the gate, right, the growth numbers and 0:04:28.360 --> 0:04:32.279 the growth rates are pretty dramatic. Um. So still a 0:04:32.320 --> 0:04:35.159 solid business, it's just not the same growth rate. Okay, 0:04:35.320 --> 0:04:37.240 there's a couple of factors. They're right. It's harder to 0:04:37.320 --> 0:04:41.120 double every quarter when your business is north of ten billion, right, 0:04:41.560 --> 0:04:44.320 the right, So that's some of it. But but yes, 0:04:44.360 --> 0:04:46.960 the CFO Amy Hoode was flagging that that Again, what 0:04:47.000 --> 0:04:50.080 they're seeing is that they're trying to offer what she said, 0:04:50.279 --> 0:04:54.360 optimized companies beds optimized with the word she's she said 0:04:54.400 --> 0:04:57.159 that Microsoft, uh, you know, customer support teams are actually 0:04:57.200 --> 0:04:59.760 proactively going out to customers to do that because they 0:04:59.800 --> 0:05:02.440 knew that in the economy that we're facing right now, 0:05:02.440 --> 0:05:05.640 customers are worried about spend. Microsoft would rather go in 0:05:05.680 --> 0:05:08.480 and say, let's help you figure out how you can 0:05:08.560 --> 0:05:11.320 meet your budgets and still do what you need, then 0:05:11.400 --> 0:05:14.039 have those customers just that frozen and not spend at 0:05:14.080 --> 0:05:16.440 all or or you know, cut as you're spending, so 0:05:16.480 --> 0:05:19.240 that the idea there is that they want to help 0:05:19.279 --> 0:05:21.120 those customers that have to save. And she made the 0:05:21.160 --> 0:05:24.320 same point to me about electrical costs, right, so, uh, 0:05:24.320 --> 0:05:28.080 you know, all these cloud computing services are very um electricity, 0:05:28.440 --> 0:05:31.200 heating and cooling intensive. So Microsoft flagged that they're going 0:05:31.240 --> 0:05:34.640 to be seeing additional costs to run these services, particularly 0:05:34.640 --> 0:05:37.960 because of power prices, particularly in Europe. And uh, you know, 0:05:38.120 --> 0:05:40.240 and could also flag to me that they are going 0:05:40.240 --> 0:05:43.320 out to customers who are worried about the electrical costs 0:05:43.320 --> 0:05:45.760 that they're facing and trying to help them figure out 0:05:45.800 --> 0:05:47.960 how they can save money. Now, what Microsoft means by 0:05:48.000 --> 0:05:50.200 that is the pitch to the customer is you move 0:05:50.240 --> 0:05:52.080 your stuff to the cloud, we will run it for 0:05:52.240 --> 0:05:54.279 you and will pay the electricity bill you don't have 0:05:54.279 --> 0:05:56.640 to run in your own data set. There. Well, incredible 0:05:56.680 --> 0:05:59.000 reporting as always, and DNA, thank you so much for 0:05:59.080 --> 0:06:01.279 checking in with us. Bloomberg New Seattle Bureau chief Daina 0:06:01.320 --> 0:06:04.240 Bass joining us on the phone from Seattle. You're listening 0:06:04.279 --> 0:06:08.080 to Bloomberg Business Week with Carol Messer and Bloomberg Quick 0:06:08.160 --> 0:06:12.120 Takes Tim Stinovic on Bloomberg Radio. As we said, it 0:06:12.200 --> 0:06:14.159 is a most read story in the Bloomberg and super 0:06:14.160 --> 0:06:17.240 fun to read on the Bloomberg terminal or online because 0:06:17.240 --> 0:06:19.479 of the visuals and how it comes to life. Great 0:06:19.560 --> 0:06:21.480 video package along with it too, And it is about 0:06:21.480 --> 0:06:23.360 New York City's secret weapon when it comes to the 0:06:23.400 --> 0:06:26.880 finance industry, and the secret weapon is actually make the 0:06:26.920 --> 0:06:29.760 office better than your home. Our secret weapon is Gordon. 0:06:29.960 --> 0:06:31.640 Our secret weapon is a Manda Gordon. She's here with 0:06:31.720 --> 0:06:33.440 us right now, and that's what she wrote about in 0:06:33.640 --> 0:06:37.040 Bloomberg News. She's Wealth Team reporter for Bloomberg News. She's 0:06:37.040 --> 0:06:39.440 with us right now in the Bloomberg Interactive broker's studio. 0:06:40.040 --> 0:06:42.200 So we're talking about Park Avenue here and a couple 0:06:42.200 --> 0:06:44.800 of new buildings, well one new building in particular, but 0:06:44.839 --> 0:06:48.360 a big revamp there to an existing building as well. Um, 0:06:48.400 --> 0:06:50.839 what are the buildings and how do the architects and 0:06:50.880 --> 0:06:54.480 the companies make them better than these people's homes. Well, 0:06:54.480 --> 0:06:57.359 the sea for this story is I've walked up and 0:06:57.400 --> 0:07:02.240 down Park Avenue most of my career, and certainly during 0:07:02.240 --> 0:07:05.840 the pandemic. Coming into the office and seeing it more 0:07:05.880 --> 0:07:10.040 desolate than ever meant that I appreciated the buildings and 0:07:10.080 --> 0:07:14.120 started looking at them closely. I watched to seventy Park 0:07:14.200 --> 0:07:18.680 Avenue be deconstructed, and now they're building a new tower 0:07:19.240 --> 0:07:22.840 by Foster and Partners. I watched all those construction workers 0:07:23.320 --> 0:07:26.840 filling up the bays with their tools, and then I 0:07:26.840 --> 0:07:31.320 saw for Park, about ten blocks north being finished and 0:07:31.440 --> 0:07:37.760 becoming this glistening, gleaming uh presence on the avenue. And 0:07:37.800 --> 0:07:40.240 I could not wait for the final things and the 0:07:40.640 --> 0:07:43.360 cranes and so on to go down. And when they 0:07:43.480 --> 0:07:47.520 did a few weeks ago, I was just so taken aback. 0:07:47.760 --> 0:07:50.640 And to me, you know, it's not just their their 0:07:50.720 --> 0:07:56.560 new buildings, but there are new buildings alongside iconic landmarked buildings. 0:07:56.640 --> 0:08:01.320 The first glass all glass skyscrapers and York that started 0:08:01.320 --> 0:08:06.280 in with lever House. And when that building went up, 0:08:07.120 --> 0:08:09.800 Louis Mumford and the New Yorker wrote it was the 0:08:09.880 --> 0:08:13.440 eighth wonder of the world. He said that people would 0:08:13.480 --> 0:08:16.840 direct their taxi cabs to go down Park so they 0:08:16.880 --> 0:08:20.120 could look at it, and that sense of spectacle and 0:08:20.200 --> 0:08:24.600 delight and sort of historic Moving forward, I felt looking 0:08:24.640 --> 0:08:28.120 at Park, and for this story I got to explore 0:08:28.440 --> 0:08:32.280 a few other buildings. So the big picture is that 0:08:32.760 --> 0:08:36.600 right near Grand Central and then close to Street you 0:08:36.640 --> 0:08:41.199 have two new buildings designed by Norman Foster's Foster and Partners, 0:08:41.679 --> 0:08:44.880 And although they were designed before the pandemic, they have 0:08:45.040 --> 0:08:50.079 all the bells and whistles that developers and ceo s 0:08:50.160 --> 0:08:53.120 think will help bring their employees back to the office, 0:08:53.559 --> 0:08:57.960 like wine fridges and basketball courts where I was like, 0:08:58.080 --> 0:09:00.960 are you guys gonna be working here? Or the library 0:09:01.120 --> 0:09:04.520 like it's studying. They're fun spaces. There are also a 0:09:04.559 --> 0:09:08.280 lot of wellness features, so literally the way that the 0:09:08.360 --> 0:09:12.040 air comes into the building and gets cleaned, and that 0:09:12.120 --> 0:09:15.840 there's so much fresh air circulating. It sounds like something 0:09:15.880 --> 0:09:20.040 designed just when COVID hit, but it was an idea 0:09:20.280 --> 0:09:25.640 that was laid down years before. And I have to say, 0:09:25.720 --> 0:09:28.120 having you know, spent a couple of hours in the 0:09:28.160 --> 0:09:32.000 building with the developer David Levinson. He said at one point, 0:09:32.520 --> 0:09:36.119 don't you feel good? And honestly I did feel good. 0:09:36.880 --> 0:09:38.839 So how much of these shift things around a man 0:09:38.880 --> 0:09:41.720 as they were going because of the pandemic, and you know, 0:09:42.200 --> 0:09:44.720 the work from home, the hybrid work, the conversations and 0:09:44.800 --> 0:09:48.640 also thinking about air quality because of you know all 0:09:48.679 --> 0:09:51.959 the concerns that were raised by the pandemic. Well, I 0:09:52.000 --> 0:09:54.360 think that you know, they are eager to have with 0:09:54.400 --> 0:09:57.840 these beautiful spaces, they're eager to see people use them. 0:09:58.559 --> 0:10:02.360 And I think that a social component is important, because 0:10:03.160 --> 0:10:04.960 the idea is that you come to work and that 0:10:05.000 --> 0:10:09.640 you're around there's a culture of your firm um, and 0:10:09.760 --> 0:10:14.439 there's a way of learning around people. And these spaces 0:10:14.480 --> 0:10:19.120 are just sort of breathtaking stages. And and you know, 0:10:19.200 --> 0:10:22.720 I've heard that although Citadel won't be moving in most 0:10:22.760 --> 0:10:25.440 of its employees until the summer, you know, they're all 0:10:25.720 --> 0:10:28.240 working out of other offices right now on Park Avenue 0:10:28.280 --> 0:10:30.480 and they're looking at that and they all can't wait 0:10:30.520 --> 0:10:32.680 to get in there. So I kind of want to 0:10:32.840 --> 0:10:36.080 go careful, I said, library, But it's actually there's this 0:10:36.120 --> 0:10:38.680 great line lounge right, it's art books. I mean, it 0:10:38.720 --> 0:10:44.160 looks like it's just stunning. So is it going to work, Well, 0:10:44.280 --> 0:10:47.720 oh yeah, there's I think that the reason why I 0:10:47.760 --> 0:10:51.920 focused on Park Avenue Um is that Park Avenue works. 0:10:52.360 --> 0:10:56.080 Park Avenue worked during the pandemic. If you look at 0:10:56.080 --> 0:11:00.760 a firm like Blackstone, they had an investment professionals back 0:11:00.760 --> 0:11:04.560 in the office as early as September. A lot of 0:11:04.559 --> 0:11:07.480 the bloom terms Jamie Diamond has been a strong proponent 0:11:07.800 --> 0:11:11.440 that was before Delta. Excuse me, those those buildings um 0:11:11.960 --> 0:11:15.719 have had workers. And if you walk today, I'm not 0:11:15.800 --> 0:11:18.679 joking about the food carts. There really are like very 0:11:18.760 --> 0:11:21.600 long lines for them. And that's one of the things 0:11:21.679 --> 0:11:24.480 I love about Park Avenue. It's not just social spaces 0:11:24.520 --> 0:11:28.839 that they're creating with these lounges. The sidewalk itself is 0:11:28.880 --> 0:11:30.840 a place where you run into people. You know. It's 0:11:30.840 --> 0:11:32.320 such a great part of New York City, and I 0:11:32.320 --> 0:11:34.880 have to say that the JP Morgan building man really 0:11:34.920 --> 0:11:36.840 homage to kind of old New York as well as 0:11:36.880 --> 0:11:39.560 looking very very new. Amanda Gordon, thank you so much. 0:11:40.040 --> 0:11:44.079 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:11:44.160 --> 0:11:48.200 Quick Takes Tim Stinovic on Bloomberg Radio. Well, a most 0:11:48.200 --> 0:11:51.240 read story. Another most read story, I should say, are 0:11:51.280 --> 0:11:54.559 among the those on the Bloomberg terminal right now. It 0:11:54.640 --> 0:11:56.520 has to do with and it's something we talked about 0:11:56.520 --> 0:11:59.320 a lot of energy. I t when we're thinking about sustainability, 0:11:59.360 --> 0:12:03.000 green energy and just how things are innovating and disrupting 0:12:03.040 --> 0:12:05.680 to create a greener climate and what role does the 0:12:05.679 --> 0:12:07.880 government or should the government take when it comes to 0:12:08.000 --> 0:12:12.080 funding this type of progress. Well, writing about that in 0:12:12.280 --> 0:12:15.800 Bloomberg business Week is Ellen Hewitt. Uh. She writes all 0:12:15.800 --> 0:12:18.240 about California's tech millionaires and how they're split on this 0:12:18.360 --> 0:12:21.199 tax plan to fund e VS. We got with us 0:12:21.200 --> 0:12:24.360 this afternoon, Mark Million, technology Managing editor for Bloomberg News. 0:12:24.400 --> 0:12:26.720 He joins us from New York City. Also with us 0:12:26.760 --> 0:12:29.480 in the Bloomberg Interactive Broker Studio is Joel Weber. He's 0:12:29.520 --> 0:12:33.360 the editor of Bloomberg business Week. Joel. Growing up in California, 0:12:33.840 --> 0:12:36.040 if there's one thing I remember when I accompanying my 0:12:36.080 --> 0:12:40.359 parents to the to the polls was yes knows on propositions. 0:12:40.600 --> 0:12:42.680 And it's like, if you if you look at the 0:12:42.679 --> 0:12:45.800 way that the state governs itself, it's like it gives 0:12:45.840 --> 0:12:48.680 so much power to voters to make legislation, take it 0:12:48.679 --> 0:12:51.719 to the people. Yeah, and we're gonna see better for worse, right, 0:12:51.920 --> 0:12:54.520 And and we're gonna see what happens with this most 0:12:54.520 --> 0:12:58.640 recent example, Prop thirty, which be on the ballot here Uh, 0:12:58.920 --> 0:13:02.760 just around the corner um in November. Uh. What it 0:13:02.760 --> 0:13:06.720 really pits is um Uh know on a yes side, 0:13:07.040 --> 0:13:10.680 as you would expect, Lift being um, perhaps the most 0:13:10.720 --> 0:13:14.760 noteworthy player here. Um they've been. They're really pushing hard 0:13:14.800 --> 0:13:18.079 for this um and it gets to the fact that 0:13:18.200 --> 0:13:22.080 California is requiring um you know, basically all of these 0:13:22.080 --> 0:13:25.240 miles traveled to be electric and so this would be 0:13:25.280 --> 0:13:27.800 really beneficial for a company like Lift because it would 0:13:27.840 --> 0:13:31.200 help build the network that that writers in in their 0:13:31.200 --> 0:13:34.760 network of vehicles would would be able to benefit from. Uh. 0:13:34.960 --> 0:13:37.040 But to pay for that, you basically have to tap 0:13:37.080 --> 0:13:40.040 into rich Californians and they're the ones that are kind 0:13:40.040 --> 0:13:43.160 of pushing back on it, uh fairly publicly. UM So, 0:13:43.160 --> 0:13:46.680 so Mark, this is again, uh it seems like the 0:13:46.880 --> 0:13:51.520 tech industry uh rideshare companies like all of these um 0:13:51.840 --> 0:13:56.320 uh and very prominent um names here that uh you 0:13:56.360 --> 0:13:59.439 know are in this. Really he did fight in California, 0:13:59.480 --> 0:14:02.080 which Sue has always been on the forefront of like 0:14:02.120 --> 0:14:05.400 auto policy, but now is also you know, wrestling with 0:14:05.400 --> 0:14:07.880 with climate change. So which way is the wind really 0:14:07.920 --> 0:14:12.440 blowing there? Yeah? Well, the thing is like, on its face, 0:14:12.720 --> 0:14:15.640 it actually sounds like kind of nice. I mean, like 0:14:15.720 --> 0:14:18.680 to to your point, Californians love to have a say 0:14:18.679 --> 0:14:22.720 in policy and they love all things green, and so 0:14:22.840 --> 0:14:28.480 like the proposals. Um, you know, electric charging infrastructure seems 0:14:28.520 --> 0:14:33.600 like something we need. Subsidizing electric cars for UH, low 0:14:33.880 --> 0:14:38.880 and middle income residents, that sounds good. Wildfire prevention all 0:14:38.960 --> 0:14:44.160 sounds good. Um. And so this is actually in polling, UM, 0:14:44.240 --> 0:14:49.200 it's been a pretty popular proposal. UM. But again to 0:14:49.280 --> 0:14:52.000 the point that Joel was making about, I mean this 0:14:52.280 --> 0:14:54.400 all those things, for the most part kind of playing 0:14:54.520 --> 0:14:58.920 lift favor, Like their drivers are typically low in middle 0:14:58.960 --> 0:15:02.440 income and in lieu of paying the more so that 0:15:02.480 --> 0:15:08.040 they could afford to buy electric vehicles. The argument against Prop. 0:15:08.120 --> 0:15:11.320 Thirty is that they're just asking for rich people to 0:15:11.400 --> 0:15:16.800 subsidize something that should be done through through paying these 0:15:16.880 --> 0:15:19.640 drivers more money to get the vehicles that they're going 0:15:19.680 --> 0:15:23.280 to be required to drive. Um. And so that's like 0:15:23.520 --> 0:15:26.960 sort of the nuance of the debate and why Governor Newsom, 0:15:27.680 --> 0:15:30.720 who often doesn't weigh in on props, this is one 0:15:30.760 --> 0:15:33.240 of only two that he's taken a public stance on. 0:15:33.280 --> 0:15:36.480 And he's not he's he's with the billionaires. He's he's no, 0:15:36.680 --> 0:15:38.880 we should not, we should not be doing this. There 0:15:38.920 --> 0:15:42.040 are better ways to do a policy like this. What's 0:15:42.040 --> 0:15:45.160 so interesting is that it's being essentially bankrolled by this 0:15:45.240 --> 0:15:49.200 single company Lift as you, as Ellen writes about it's 0:15:49.200 --> 0:15:51.880 fundy coming just from left. As I was reading the story, 0:15:51.920 --> 0:15:56.920 I was thought to myself, where's Uber in this UM. 0:15:57.120 --> 0:16:01.560 Uber likes to pick its battles UM, and I think 0:16:01.600 --> 0:16:05.680 they're happy to let Lift get the potentially bad pr 0:16:05.760 --> 0:16:08.280 involved with trying to pull the strings on another proposition. 0:16:08.320 --> 0:16:12.440 I mean they heavily drove this, UH, this other earlier 0:16:12.720 --> 0:16:15.960 proposition which was much more core of their business UM 0:16:16.000 --> 0:16:20.000 a couple of years ago, UH to enshrine their driver 0:16:20.200 --> 0:16:23.160 contractor status, which Lift and door Dash and other kid 0:16:23.200 --> 0:16:28.280 economy companies were also supporting financially. But they've they've as 0:16:28.320 --> 0:16:30.040 far as we can tell, they've stayed out of the 0:16:30.040 --> 0:16:32.520 prey on this one. And this is this is Lift 0:16:33.040 --> 0:16:35.840 carrying the charge, notably with a couple of billionaires who 0:16:35.840 --> 0:16:38.640 are on their side, but many more billionaires are lined 0:16:38.720 --> 0:16:40.600 up in the no category. Well, Mark, let's get to 0:16:40.600 --> 0:16:43.440 that billionaire Frey, because there are some well known folks 0:16:43.440 --> 0:16:47.760 in Silicon Valley UH and billionaires themselves who are on 0:16:47.880 --> 0:16:49.560 Lift side, as you said, and then there are some 0:16:49.640 --> 0:16:51.720 that are not. I mean it's turning into a battle 0:16:51.800 --> 0:16:56.120 of kind of the Silicon Valley billionaires as well. Yes, 0:16:56.480 --> 0:17:00.840 uh so Lift has alliance with John on Door, who 0:17:00.920 --> 0:17:03.840 is you know, one of the legends of venture capital, 0:17:03.960 --> 0:17:08.400 and Tom Steyer, who is very public you know, pro 0:17:08.600 --> 0:17:13.080 pro green person as his door. Um the Nose are 0:17:13.240 --> 0:17:19.040 well notably, Um, there was there was Ron Conway who flipped, 0:17:19.080 --> 0:17:22.600 who supported it at first and then changed his mind. Um. 0:17:22.680 --> 0:17:25.480 Also in the no category Mike Moritz, who is another 0:17:25.560 --> 0:17:29.120 legend of venture capital with with Conway and Door, um 0:17:30.440 --> 0:17:35.640 the Netflix CEO Rehastings into it, founder Scott Cook all 0:17:35.720 --> 0:17:39.480 in the no category. UM. And and you know this 0:17:39.560 --> 0:17:42.320 is sort of it's kind of a funny like battle 0:17:42.359 --> 0:17:44.679 of the billionaires that's taking place here, and it's like 0:17:44.720 --> 0:17:49.960 one of the flashpoints within the Silicon Valley elite UM 0:17:50.000 --> 0:17:54.439 in this election cycle. So Mark, I'm curious as to 0:17:54.560 --> 0:17:59.200 like how uh this is even trending in in polls, 0:17:59.280 --> 0:18:05.600 we have any really data on how voters feel about this. Yeah, 0:18:05.640 --> 0:18:09.480 I mean voters are are pretty supportive. I mean it's 0:18:09.720 --> 0:18:13.520 these always come down to the wire and um news 0:18:14.040 --> 0:18:18.280 Now taking a public stance could affect things. Um. But 0:18:19.000 --> 0:18:23.040 there was a. There was a September poll um that 0:18:23.200 --> 0:18:27.359 the Los Angeles Times and the Berkeley Institute ran that 0:18:27.440 --> 0:18:32.560 found of voters supported it um, which you know is 0:18:32.600 --> 0:18:35.600 not a majority, but only thirty seven percent were posed 0:18:35.640 --> 0:18:39.080 and then the rest were undecided. So there's still still 0:18:39.119 --> 0:18:42.800 time for people to swing. But um, you know, like 0:18:42.840 --> 0:18:45.400 I said at the beginning, like this sounds really good, 0:18:45.600 --> 0:18:49.920 like electric charting infrastructure, more car, more electric cars for 0:18:50.080 --> 0:18:53.080 poorer people, like wildfire preventre and all these things are 0:18:53.119 --> 0:18:57.040 important to Californians. It's just sort of the the nuance 0:18:57.320 --> 0:19:00.600 and as the no people see kind of a crosseness 0:19:00.680 --> 0:19:05.359 of corporate influence that that they're against. But we're watching 0:19:05.359 --> 0:19:07.879 California because often as California goes, so does you know 0:19:07.920 --> 0:19:14.440 the rest of the country eventually when it comes to regulations. Yes, yeah, alright, 0:19:14.480 --> 0:19:17.840 Mark great read Mark Millian, he his technology managing editor 0:19:17.920 --> 0:19:20.280 Bloomberg News. You just saw on YouTube and quick take 0:19:20.320 --> 0:19:22.359 because he was joining us via zoom in New York City. 0:19:22.359 --> 0:19:24.560 And our thanks as always to the editor of Bloomberg 0:19:24.600 --> 0:19:28.040 Business Week, Joel Weber. Here in our Interactive Broker studio, 0:19:28.520 --> 0:19:32.119 you're listening to Bloomberg Business Week with Carol Messer and 0:19:32.200 --> 0:19:37.120 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Overall trade 0:19:37.280 --> 0:19:39.119 looking a lot better than it did this morning, although 0:19:39.160 --> 0:19:41.160 we have been I gotta say, well, we're bouncing around 0:19:41.200 --> 0:19:43.239 because we're definitely off ourhighs of this session. But if 0:19:43.240 --> 0:19:45.159 you look at some of the individual names, something like 0:19:45.160 --> 0:19:49.160 a Microsoft or Alphabet, those stocks are really way down. 0:19:49.400 --> 0:19:52.040 Mega underperformance today. Yeah, they're really right weighing down the 0:19:52.320 --> 0:19:54.760 major averages. I mean, we got tech just weighing everything 0:19:54.760 --> 0:19:58.000 down on the SMP. Microsoft responsible for sixteen points in 0:19:58.040 --> 0:20:02.080 the decline, Alphabet's six points, Apple five point eight points. 0:20:02.080 --> 0:20:04.000 So we got a lot to get to right now. 0:20:04.000 --> 0:20:07.040 With Ryan last Deelica, he's equities reporter focuses on tech 0:20:07.160 --> 0:20:09.320 for Bloomberg News. He's usually in Chicago, but he's with 0:20:09.400 --> 0:20:12.400 us in the Bloomberg Interactive Broker's studio. Ryan, welcome. It's 0:20:12.400 --> 0:20:14.480 awesome to have you here. Nice to finally meet you 0:20:14.520 --> 0:20:16.560 for the first time in person too. I've read your 0:20:16.600 --> 0:20:19.000 stuff for years, so it's good to have you here. Um, 0:20:19.040 --> 0:20:21.800 you've got a story out that talks about three billion 0:20:21.840 --> 0:20:24.199 dollar megacap route. We haven't heard from Apple yet. We 0:20:24.200 --> 0:20:26.280 haven't heard from Amazon yet. We haven't heard from meta 0:20:26.280 --> 0:20:28.800 platforms yet, but they're all lower. As we see a 0:20:28.880 --> 0:20:31.800 sell off in in tech overall today. What's going on? Yeah, Well, 0:20:31.840 --> 0:20:34.080 so far the tech results have not been what you 0:20:34.080 --> 0:20:35.879 would want to see for a group of stocks that 0:20:35.880 --> 0:20:39.119 have been down pretty heavily so far this whole year. Um, 0:20:39.160 --> 0:20:42.480 there's concerns that growth is slowing. We have some valuations 0:20:42.520 --> 0:20:44.480 that remain above their long term averages. So there's still 0:20:44.520 --> 0:20:46.120 a lot of concern that, like as a fat keep 0:20:46.200 --> 0:20:49.040 raising rates as we have concerns about um, you know, 0:20:49.119 --> 0:20:51.240 higher yields and so forth. These is going to be 0:20:51.280 --> 0:20:54.240 a group that continues to uh just come under pressure. 0:20:54.280 --> 0:20:56.119 And there was a hope that their growth would be 0:20:56.119 --> 0:20:58.480 strong enough to offset some of these headwinds. So far, 0:20:58.560 --> 0:21:00.720 it doesn't really look like that's the case. Well, and 0:21:00.800 --> 0:21:02.320 this is what it gets to. I mean, this is 0:21:02.320 --> 0:21:03.960 a thing we talked about a lot, Ryan is a 0:21:04.040 --> 0:21:06.159 valuation reset, right, and this is what you want to 0:21:06.200 --> 0:21:08.240 understand the business where it is today, but really where 0:21:08.240 --> 0:21:11.159 it's going and ultimately how much should I pay for it? 0:21:11.160 --> 0:21:13.280 Certainly when you're looking at a publicly held company like 0:21:13.720 --> 0:21:17.119 an Alphabet or Microsoft, Yeah, Alphabet actually looks cheap by 0:21:17.119 --> 0:21:19.320 most valuation metrics right now. But if we are going 0:21:19.400 --> 0:21:21.600 into a period where the AD market is slower than 0:21:21.640 --> 0:21:23.600 it used to be, where you just have all these 0:21:23.680 --> 0:21:27.480 various headwindes to valuations, um and multiples, and we are 0:21:27.600 --> 0:21:29.600 potentially going into a recession. When you have all these 0:21:29.600 --> 0:21:32.480 things right now, the fact that it's cheap relative to 0:21:32.480 --> 0:21:34.720 its own history and even cheaper than the market, that 0:21:34.760 --> 0:21:36.480 may not be enough to disturb people to go in 0:21:36.520 --> 0:21:39.360 and buy, especially if you know, like we saw last night, 0:21:39.440 --> 0:21:41.800 the results is aren't strong enough. What about from Microsoft 0:21:41.800 --> 0:21:44.200 in terms of valuation? That one is still a little 0:21:44.200 --> 0:21:46.600 bit elevated relative to the broader market, So that might 0:21:46.600 --> 0:21:47.879 be one that has a little bit more froth. I 0:21:47.920 --> 0:21:50.240