1 00:00:02,560 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:10,640 --> 00:00:13,560 Speaker 2: This is the Bloomberg Day BAQ podcast, available every morning 3 00:00:13,560 --> 00:00:16,520 Speaker 2: on Apple, Spotify or wherever you listen. It's Thursday, the 4 00:00:16,560 --> 00:00:19,759 Speaker 2: thirtieth of January in London. I'm Caroline Hepca and. 5 00:00:19,680 --> 00:00:23,120 Speaker 1: I'm Stephen Carroll. Coming up today. An American Airlines regional 6 00:00:23,200 --> 00:00:27,440 Speaker 1: jet collides midair with the US Army helicopter over Washington, DC. 7 00:00:28,040 --> 00:00:31,040 Speaker 2: Joan Powell says the Federal Reserve doesn't need to be 8 00:00:31,080 --> 00:00:33,760 Speaker 2: in a hurry to lower interest rates as the Central 9 00:00:33,800 --> 00:00:36,280 Speaker 2: Bank holds steady at its latest meeting. 10 00:00:36,760 --> 00:00:40,559 Speaker 1: Plus a really big year in AI meta gains as 11 00:00:40,560 --> 00:00:44,120 Speaker 1: Mark Zuckerberg makes the case for big investment. After a 12 00:00:44,200 --> 00:00:46,159 Speaker 1: volatile week for the sector. 13 00:00:45,960 --> 00:00:48,279 Speaker 2: Let's start with a roundup of our top stories. An 14 00:00:48,320 --> 00:00:51,880 Speaker 2: American Airlines regional airplane with sixty four people on board 15 00:00:52,040 --> 00:00:55,160 Speaker 2: has crashed with a military helicopter in the skies over 16 00:00:55,280 --> 00:00:59,040 Speaker 2: Washington DC. A search and rescue operation is underway and 17 00:00:59,120 --> 00:01:02,680 Speaker 2: focused on the Potter Mac River next to Reagan National Airport, 18 00:01:02,720 --> 00:01:05,600 Speaker 2: where the plane was due to land. Here's what one 19 00:01:05,760 --> 00:01:09,560 Speaker 2: eyewitness told local television w USA nine. 20 00:01:09,680 --> 00:01:14,120 Speaker 3: We noticed the planes started having regular patterns and they 21 00:01:14,160 --> 00:01:17,560 Speaker 3: all kind of dispersed from the regular landing patterns. And 22 00:01:17,600 --> 00:01:21,039 Speaker 3: then we looked up in the sky before that and 23 00:01:21,080 --> 00:01:22,920 Speaker 3: we saw these white flare. 24 00:01:24,000 --> 00:01:25,560 Speaker 4: Like you think of We used these white flares. 25 00:01:25,959 --> 00:01:27,440 Speaker 3: We didn't think much of it. We thought they were 26 00:01:27,480 --> 00:01:30,319 Speaker 3: like shooting stars. I don't know I could really explain it, 27 00:01:30,360 --> 00:01:32,600 Speaker 3: but we didn't really think much of it until we 28 00:01:32,640 --> 00:01:36,080 Speaker 3: saw the fire trucks start going out to the tarmac 29 00:01:36,080 --> 00:01:40,760 Speaker 3: and the police cars and the police boats. It was insane. 30 00:01:41,040 --> 00:01:41,680 Speaker 3: It was really. 31 00:01:41,480 --> 00:01:47,240 Speaker 2: Insane, and eyewitnessed speaking to WUSA nine CBS is reporting 32 00:01:47,280 --> 00:01:50,480 Speaker 2: that eighteen bodies have been recovered so far. Here is 33 00:01:50,520 --> 00:01:53,320 Speaker 2: the Washington DC Mayor Murial Bowser. 34 00:01:53,600 --> 00:01:56,120 Speaker 3: Both aircraft are in the water. 35 00:01:56,560 --> 00:02:01,200 Speaker 5: The focus now is a rescuing people, and that's what 36 00:02:01,400 --> 00:02:03,720 Speaker 5: all of our personnel are focused. 37 00:02:03,320 --> 00:02:08,400 Speaker 2: On, Washington DC Mayor Muriel Bowser speaking there. In a statement, 38 00:02:08,440 --> 00:02:12,640 Speaker 2: the Federal Aviation Administration said the plane, operated by American 39 00:02:12,680 --> 00:02:18,360 Speaker 2: Airlines subsidiary PSA Airlines, collided with a Sikowski H sixty 40 00:02:18,440 --> 00:02:22,160 Speaker 2: black Hawk helicopter whilst on approach to Reagan Airport at 41 00:02:22,200 --> 00:02:24,120 Speaker 2: around nine pm local time. 42 00:02:24,639 --> 00:02:28,400 Speaker 1: American Airlines says the flight departed from Wichita, Kansas, with 43 00:02:28,520 --> 00:02:32,040 Speaker 1: sixty passengers and four crew on board. Military officials of 44 00:02:32,040 --> 00:02:35,360 Speaker 1: told Bloomberg there were three airmen on boards the military helicopter, 45 00:02:35,400 --> 00:02:38,519 Speaker 1: which was traveling from Fort Belvoir in Virginia. In a 46 00:02:38,600 --> 00:02:42,160 Speaker 1: video statement, American Airlines CEO Robert Isiam said the airline 47 00:02:42,240 --> 00:02:45,320 Speaker 1: is working with emergency responders first. 48 00:02:45,040 --> 00:02:47,959 Speaker 6: And most importantly, I'd like to express our deep sorrow 49 00:02:48,000 --> 00:02:50,480 Speaker 6: about these events. This is a difficult day for all 50 00:02:50,480 --> 00:02:53,040 Speaker 6: of us at American Airlines, and our efforts now are 51 00:02:53,080 --> 00:02:57,200 Speaker 6: focused entirely on the needs of our passengers, crew members, partners, 52 00:02:57,240 --> 00:03:00,000 Speaker 6: first responders, along with their families and loved ones. 53 00:03:01,440 --> 00:03:04,600 Speaker 1: American Airlines CEO Robert iis I'm offering his first thoughts 54 00:03:04,639 --> 00:03:08,600 Speaker 1: there on the crash. The National Transportation Safety Board says 55 00:03:08,639 --> 00:03:12,120 Speaker 1: they have sent a rapid response air accident investigation team 56 00:03:12,120 --> 00:03:14,560 Speaker 1: to the site close to Reagan Airport where the mid 57 00:03:14,600 --> 00:03:18,040 Speaker 1: air collision occurred. President Donald Trump criticized events in the 58 00:03:18,120 --> 00:03:20,280 Speaker 1: run up to the collision in a truth social post, 59 00:03:20,360 --> 00:03:23,160 Speaker 1: calling it a bad situation that looks like it should 60 00:03:23,160 --> 00:03:26,560 Speaker 1: have been prevented. Meanwhile, Defense Secretary peak Pete Hegseth that 61 00:03:26,560 --> 00:03:29,040 Speaker 1: says an investigation is already underway. 62 00:03:29,880 --> 00:03:33,000 Speaker 2: Now let's turn to other news this morning. Deutsche banks 63 00:03:33,200 --> 00:03:38,640 Speaker 2: Fixed Trading division just posted its best fourth quarter on record. 64 00:03:39,960 --> 00:03:44,160 Speaker 2: Fixed income commodity currency revenue was up twenty six percent, 65 00:03:44,200 --> 00:03:48,040 Speaker 2: beating the estimate of seventeen percent. CFO James and Malchus 66 00:03:48,080 --> 00:03:50,880 Speaker 2: says it's a pattern that runs through every part of 67 00:03:50,920 --> 00:03:51,320 Speaker 2: the bank. 68 00:03:52,080 --> 00:03:55,000 Speaker 7: All of the businesses were up rates, credit, FX and 69 00:03:55,240 --> 00:03:59,680 Speaker 7: emerging markets, so really broad based strength in a market 70 00:03:59,720 --> 00:04:04,400 Speaker 7: that where there was a lot of movement. Frankly, the 71 00:04:04,720 --> 00:04:09,320 Speaker 7: geopolitical events, sort of shifts in economic tides, rate changes, 72 00:04:09,320 --> 00:04:11,520 Speaker 7: all of those things were playing through the first few 73 00:04:11,520 --> 00:04:15,360 Speaker 7: weeks of the year. Have demonstrated a continuation of those 74 00:04:15,400 --> 00:04:18,080 Speaker 7: trends from the fourth quarter, so we're encouraged by that. 75 00:04:19,279 --> 00:04:23,320 Speaker 2: Deutsch Bank CFO James von Moltke speaking there, the bank 76 00:04:23,400 --> 00:04:27,200 Speaker 2: adds that it plans to actively reduce management layers in 77 00:04:27,279 --> 00:04:30,760 Speaker 2: areas which don't improve efficiency going forwards. 78 00:04:31,640 --> 00:04:35,159 Speaker 1: Another earnings news in Europe, Spanish under BBVA posted a 79 00:04:35,160 --> 00:04:38,320 Speaker 1: fourth quarter net income well above expectations of two point 80 00:04:38,360 --> 00:04:41,360 Speaker 1: four to three billion euros, putting fullier profit above ten 81 00:04:41,400 --> 00:04:44,279 Speaker 1: billion euros for the first time ever. Nor Dia Bank 82 00:04:44,400 --> 00:04:47,679 Speaker 1: meanwhile reporting a slightly better than expected net interest income 83 00:04:47,680 --> 00:04:50,520 Speaker 1: of one point eight five billion euros in the fourth quarter, 84 00:04:50,839 --> 00:04:54,320 Speaker 1: and the numbers from Shell showing them announcing a share 85 00:04:54,360 --> 00:04:58,279 Speaker 1: buyback program of three and a half billion dollars. Shell's 86 00:04:58,360 --> 00:05:01,920 Speaker 1: fourth quarter adjusted profit, though did miss expectations, coming in 87 00:05:01,960 --> 00:05:05,280 Speaker 1: at just shy of three point seven billion dollars. Expectations 88 00:05:05,279 --> 00:05:08,200 Speaker 1: have been for numbers of four point four billion. One 89 00:05:08,240 --> 00:05:11,280 Speaker 1: other big share buyback to bring to your attention, and 90 00:05:11,320 --> 00:05:14,599 Speaker 1: that is from Sanofi announcing a five billion euro share 91 00:05:14,680 --> 00:05:15,799 Speaker 1: buy back this year. 92 00:05:17,080 --> 00:05:20,120 Speaker 2: Now for chur Jerome Powell says the Wes Central Bank 93 00:05:20,160 --> 00:05:23,400 Speaker 2: will wait for further evidence of cooling inflation before adjusting 94 00:05:23,440 --> 00:05:27,800 Speaker 2: interest rates again. The comments come after policymakers voted unanimously 95 00:05:27,839 --> 00:05:31,440 Speaker 2: to keep the benchmark rate on hold. Powell says that 96 00:05:31,480 --> 00:05:34,880 Speaker 2: they want to see what policies the Trump administration will enact. 97 00:05:36,000 --> 00:05:40,080 Speaker 8: We don't know what will happen with tariffs, with immigration, 98 00:05:40,880 --> 00:05:45,720 Speaker 8: with fiscal policy, and with regulatory policy. We're only just 99 00:05:45,800 --> 00:05:47,960 Speaker 8: beginning to see. You actually are not really beginning to 100 00:05:48,000 --> 00:05:50,640 Speaker 8: see much, and I think we need to let those 101 00:05:50,640 --> 00:05:53,880 Speaker 8: policies be articulated before we can even begin to make 102 00:05:54,600 --> 00:05:57,560 Speaker 8: a plausible assessment of what their implications for the economy will. 103 00:05:57,480 --> 00:06:01,839 Speaker 2: Be After Palell's press come friends, President Trump posted online 104 00:06:01,839 --> 00:06:04,400 Speaker 2: that the Fed chair had quote done a terrible job 105 00:06:04,600 --> 00:06:07,920 Speaker 2: on banking regulation and inflation. The new presidence has been 106 00:06:07,960 --> 00:06:10,400 Speaker 2: a frequent critic of the Central Bank, saying that he 107 00:06:10,480 --> 00:06:13,080 Speaker 2: understands interest rates better than Powell. 108 00:06:13,839 --> 00:06:16,760 Speaker 1: Meta shares rose and after ours trading after CEO Mark 109 00:06:16,839 --> 00:06:20,360 Speaker 1: Zuckerberg predicted a really big year for AI. The Facebook 110 00:06:20,360 --> 00:06:23,240 Speaker 1: founder says he helps Meta's AI assistant will become the 111 00:06:23,240 --> 00:06:25,080 Speaker 1: most widely used in the industry. 112 00:06:26,360 --> 00:06:28,240 Speaker 4: This is going to be a really big year. Most 113 00:06:28,279 --> 00:06:30,360 Speaker 4: of our long term initiatives is going to be a 114 00:06:30,400 --> 00:06:33,080 Speaker 4: lot clearer by the end of this year. In AI, 115 00:06:33,800 --> 00:06:35,440 Speaker 4: I expect that this is going to be the year 116 00:06:35,600 --> 00:06:40,520 Speaker 4: when a highly intelligent and personalized AI assistant reaches more 117 00:06:40,560 --> 00:06:43,680 Speaker 4: than one billion people, and I expect Meta Ai to 118 00:06:43,760 --> 00:06:45,440 Speaker 4: be that leading AI assistant. 119 00:06:46,320 --> 00:06:49,159 Speaker 1: Zuckerberg's remarks sent Meta shares up as much as four 120 00:06:49,160 --> 00:06:52,240 Speaker 1: and a half percent in extended trading. The CEO told 121 00:06:52,279 --> 00:06:55,680 Speaker 1: investors he believes Meta will eventually spend hundreds of billions 122 00:06:55,680 --> 00:06:57,480 Speaker 1: of dollars on AI infrastructure. 123 00:06:58,480 --> 00:07:00,640 Speaker 2: Those are some of our top stories. Let's look at 124 00:07:00,680 --> 00:07:03,880 Speaker 2: the markets for you this morning, as we are digesting 125 00:07:03,880 --> 00:07:07,360 Speaker 2: a whole slewt of earnings from Shell, from Deutsche Bank 126 00:07:07,440 --> 00:07:10,680 Speaker 2: and others. European stock futures are positive, up by three 127 00:07:10,680 --> 00:07:12,880 Speaker 2: tenths of one percent. We had a mixed bag of 128 00:07:12,920 --> 00:07:17,360 Speaker 2: reports out of the US last night, IBM, Meta, Microsoft, Tesla. 129 00:07:17,520 --> 00:07:19,400 Speaker 2: They didn't give a firm direction, but we did see 130 00:07:19,400 --> 00:07:23,600 Speaker 2: some gains in Asia this morning, THEMSCI Asia Pacific Index 131 00:07:23,680 --> 00:07:26,080 Speaker 2: up by almost two tenths of one percent, although thin 132 00:07:26,120 --> 00:07:29,840 Speaker 2: liquidity given that the Lunar New Year holiday is ongoing there. 133 00:07:30,240 --> 00:07:33,120 Speaker 2: Just thinking about what's to come the ECB rate decision. 134 00:07:33,160 --> 00:07:35,280 Speaker 2: We're expecting, of course, at quarter point rate cut. Ten 135 00:07:35,320 --> 00:07:38,000 Speaker 2: year US yields trading a four point fifty two down 136 00:07:38,000 --> 00:07:41,560 Speaker 2: a basis point. All prices are flat, the Bloomboog dollars 137 00:07:41,560 --> 00:07:43,520 Speaker 2: Spot indexes down a tenth of one percent. Those are 138 00:07:43,520 --> 00:07:44,640 Speaker 2: the markets, and. 139 00:07:44,600 --> 00:07:44,960 Speaker 4: No I went. 140 00:07:45,000 --> 00:07:47,080 Speaker 1: We'll bring you more details on those big tech results 141 00:07:47,160 --> 00:07:50,520 Speaker 1: from met at, Microsoft and others, But first let's go 142 00:07:50,560 --> 00:07:52,800 Speaker 1: to our top story this morning, and that plane crash 143 00:07:52,840 --> 00:07:56,080 Speaker 1: in Washington, d C. And military helicopter colliding with a 144 00:07:56,120 --> 00:07:59,080 Speaker 1: passenger debt carrying sixty four people as it came into 145 00:07:59,120 --> 00:08:02,280 Speaker 1: land at Reaga, nash Airport. Our transport reporter Danny Lee 146 00:08:02,320 --> 00:08:04,520 Speaker 1: joins us now from More. Danny, what do we know 147 00:08:04,600 --> 00:08:05,480 Speaker 1: about what happened? 148 00:08:06,720 --> 00:08:09,640 Speaker 5: Well, this was a catastrophic accident that took place just 149 00:08:09,720 --> 00:08:13,000 Speaker 5: after nine pm on Wednesday, just outside Reagan National Airport. 150 00:08:13,280 --> 00:08:17,400 Speaker 5: It's one of Washington's busiest Airport's one of the busiest 151 00:08:17,400 --> 00:08:20,360 Speaker 5: sport airports Franklin in the country, given it's so close 152 00:08:20,400 --> 00:08:23,920 Speaker 5: to a lot of the federal institutions in the nation's capital, 153 00:08:23,960 --> 00:08:27,360 Speaker 5: and it's a major hub for an American airlines. And 154 00:08:27,440 --> 00:08:30,440 Speaker 5: that was a jet subsidiary of the airline that was 155 00:08:30,480 --> 00:08:34,800 Speaker 5: involved in this mid air collision with a US Army helicopter. 156 00:08:35,240 --> 00:08:37,960 Speaker 5: Now sixty four people passengers and crew were on board 157 00:08:38,800 --> 00:08:43,160 Speaker 5: this commercial jet and three airmen on board this helicopter 158 00:08:43,720 --> 00:08:46,600 Speaker 5: when this accident took place just over the Potomac River 159 00:08:46,679 --> 00:08:49,920 Speaker 5: and this plane, this commercial jet, was coming into land 160 00:08:50,040 --> 00:08:53,880 Speaker 5: at Reagan National Airport. So a very tragic accident and 161 00:08:53,920 --> 00:08:58,720 Speaker 5: tragic circumstances given that this helicopter was on a training 162 00:08:58,760 --> 00:09:02,200 Speaker 5: flight as well. So right now, what we've heard from 163 00:09:02,280 --> 00:09:05,960 Speaker 5: officials in the US is the priority is search and rescue. 164 00:09:06,000 --> 00:09:09,480 Speaker 5: A huge effort has been undertaken over three hundred person 165 00:09:09,520 --> 00:09:12,560 Speaker 5: now and obviously lots of resources, including divers to try 166 00:09:12,600 --> 00:09:17,400 Speaker 5: and search for people in this very narrow critical windows 167 00:09:17,480 --> 00:09:20,600 Speaker 5: golden hour as it were, to find any survivors, any 168 00:09:20,679 --> 00:09:24,360 Speaker 5: signs of life, anyone who potentially is trapped, and divers 169 00:09:24,360 --> 00:09:28,400 Speaker 5: in fact are working in really difficult, very cold, icy conditions. 170 00:09:29,040 --> 00:09:31,600 Speaker 5: The riovers of the Potomac is about eight feet deep, 171 00:09:31,600 --> 00:09:34,400 Speaker 5: but their muddy and it is frankly very cold. So 172 00:09:35,280 --> 00:09:37,920 Speaker 5: the time the focus for officials is to try and 173 00:09:37,960 --> 00:09:41,880 Speaker 5: find anyone at the moment who may be alive. We 174 00:09:41,920 --> 00:09:45,880 Speaker 5: don't have any word on survivors or any official number 175 00:09:45,880 --> 00:09:48,880 Speaker 5: on fatalities, but what we did here earlier reported by 176 00:09:48,920 --> 00:09:51,960 Speaker 5: CBS was that eighteen bodies at least had been pulled 177 00:09:52,000 --> 00:09:55,520 Speaker 5: from the river, but officials were reluctant to give any 178 00:09:56,280 --> 00:10:00,920 Speaker 5: kind of detail of whether these were survivors, these were survivors, 179 00:10:00,960 --> 00:10:04,000 Speaker 5: anyone who may be classified as dead as such. But 180 00:10:04,520 --> 00:10:07,760 Speaker 5: this is a catastrophic accident, given is taking place in 181 00:10:07,760 --> 00:10:09,720 Speaker 5: the nation's capital as. 182 00:10:09,520 --> 00:10:14,559 Speaker 2: Well, how will the investigation, the air accident investigation then 183 00:10:14,640 --> 00:10:18,520 Speaker 2: proceed from here? The focus is obviously on the people 184 00:10:18,559 --> 00:10:21,400 Speaker 2: involved now, but there will be an investigation which has 185 00:10:21,440 --> 00:10:22,200 Speaker 2: already begun. 186 00:10:23,679 --> 00:10:28,040 Speaker 5: Yeah, the investigation twin investigation in many ways. First, the 187 00:10:28,080 --> 00:10:30,839 Speaker 5: priorities for the National Transportation Safety Board to try and 188 00:10:31,559 --> 00:10:34,320 Speaker 5: ascertain what has gon what has happened. They have actually 189 00:10:34,320 --> 00:10:37,880 Speaker 5: sent a go team, a rapid response accident investigation team 190 00:10:38,000 --> 00:10:40,880 Speaker 5: too close to the site where this accident took place. 191 00:10:41,880 --> 00:10:45,280 Speaker 5: One of the priorities will always be to recover critical 192 00:10:45,320 --> 00:10:47,440 Speaker 5: piece of evidence, so that's the so called black box, 193 00:10:47,520 --> 00:10:50,960 Speaker 5: is the flight data recorder, the cockpit voice recorder, and 194 00:10:51,000 --> 00:10:55,160 Speaker 5: also any obviously key wreckage along the way. Would also 195 00:10:55,559 --> 00:10:58,679 Speaker 5: clearly want to find any evidence from the helicopter. And 196 00:10:59,360 --> 00:11:02,640 Speaker 5: we've got the Department of Defense and the Army as hexces. 197 00:11:02,679 --> 00:11:06,520 Speaker 5: The new Defense Secretary has said will be launching an 198 00:11:06,520 --> 00:11:10,600 Speaker 5: investigation as well. But these federal institutions will be giving 199 00:11:10,800 --> 00:11:13,720 Speaker 5: support to the NTSP to try and carry up their work. 200 00:11:13,800 --> 00:11:15,559 Speaker 5: But at the moment, we are still in a bit 201 00:11:15,600 --> 00:11:18,640 Speaker 5: of a search and rescue phase and it's going to 202 00:11:18,640 --> 00:11:21,480 Speaker 5: take a little bit of time before officials move into 203 00:11:21,559 --> 00:11:25,480 Speaker 5: this state of recovery, and that would obviously mark the 204 00:11:25,760 --> 00:11:28,319 Speaker 5: fact that they will think there will be no more 205 00:11:28,360 --> 00:11:32,120 Speaker 5: survivors at this stage, but a lot of recriminations, particularly 206 00:11:32,520 --> 00:11:35,440 Speaker 5: not just the fact that it happens so close to 207 00:11:35,520 --> 00:11:38,000 Speaker 5: the likes of you know where the White House and Congress, 208 00:11:38,040 --> 00:11:42,400 Speaker 5: this situation situated in DC, but the fact that this 209 00:11:42,520 --> 00:11:46,080 Speaker 5: exercise in the dead of night, you know, taking place, 210 00:11:46,960 --> 00:11:49,160 Speaker 5: you know, could have happened, and a collision at all. 211 00:11:49,320 --> 00:11:52,920 Speaker 5: So yeah, a very busy piece of airspace ordinarily, but 212 00:11:53,640 --> 00:11:56,360 Speaker 5: the fact that this has happened is absolutely catastrophic. 213 00:11:57,360 --> 00:11:59,440 Speaker 1: Yeah, and of course the airports have been told remaining 214 00:11:59,440 --> 00:12:04,040 Speaker 1: clothes and eleven am tomorrow. Just worth marking as well 215 00:12:04,080 --> 00:12:08,000 Speaker 1: that this is very unusual given how active. 216 00:12:07,679 --> 00:12:08,839 Speaker 5: The US era market is. 217 00:12:08,880 --> 00:12:11,720 Speaker 1: The last commercial jetliner crash was in two thousand and 218 00:12:11,880 --> 00:12:14,800 Speaker 1: nine in upstate New York. For now, Danni Lee, our 219 00:12:14,800 --> 00:12:17,480 Speaker 1: transport reporter, thank you very much for bringing us the latest. 220 00:12:17,960 --> 00:12:21,240 Speaker 2: We will continue to cover that story for you from Washington, 221 00:12:21,320 --> 00:12:24,959 Speaker 2: DC throughout the morning. It's also, though a very busy 222 00:12:25,040 --> 00:12:28,720 Speaker 2: time in terms of earnings that we've had out this week. 223 00:12:28,880 --> 00:12:31,680 Speaker 2: Let's turn our attention now to some of those. Mark 224 00:12:31,760 --> 00:12:35,600 Speaker 2: Zuckerberg has promised a really big year for Meta thanks 225 00:12:35,600 --> 00:12:38,800 Speaker 2: for artificial intelligence. The social media Johant is planning to 226 00:12:38,880 --> 00:12:42,120 Speaker 2: invest heavily in the technology that has helped to boost 227 00:12:42,200 --> 00:12:46,880 Speaker 2: shares postmarket. Meanwhile, Microsoft fell after it projected slower growth 228 00:12:46,920 --> 00:12:50,480 Speaker 2: in its cloud business. Matthew Bloxon, probably a big intelligence 229 00:12:50,559 --> 00:12:53,240 Speaker 2: joins us now for more. Good morning, Matt, Let's start 230 00:12:53,280 --> 00:12:56,520 Speaker 2: with meta. There does appear to be well, there appear 231 00:12:56,600 --> 00:13:01,000 Speaker 2: to be two rival narratives disappointing salesf for the current quarter. 232 00:13:01,040 --> 00:13:04,839 Speaker 2: But then Mark Zuckerberg talking about AI investment. That's a big, 233 00:13:05,360 --> 00:13:06,199 Speaker 2: big issue. 234 00:13:06,440 --> 00:13:09,040 Speaker 9: Yeah, it's like very much. You don't look so much 235 00:13:09,040 --> 00:13:13,320 Speaker 9: at the near term focus on the kind of the 236 00:13:13,360 --> 00:13:16,400 Speaker 9: longer term story and how big AI is going to be. 237 00:13:16,520 --> 00:13:20,520 Speaker 9: And to be fair, AI is already kind of making 238 00:13:20,600 --> 00:13:23,559 Speaker 9: a big positive contribution to their business. It's helping them 239 00:13:24,000 --> 00:13:27,880 Speaker 9: deliver much more effective adverts for their clients, so that's 240 00:13:27,920 --> 00:13:32,480 Speaker 9: helping propel their ad sales. And obviously there's kind of 241 00:13:32,480 --> 00:13:35,440 Speaker 9: the kind of big exciting thing they're talking about is 242 00:13:35,960 --> 00:13:38,920 Speaker 9: AI assistance and how that's just going to start to 243 00:13:39,000 --> 00:13:40,840 Speaker 9: kind of really grow. And they're talking about a billion 244 00:13:40,960 --> 00:13:45,040 Speaker 9: or so people using AI assistants, you know, which I 245 00:13:45,040 --> 00:13:47,360 Speaker 9: think is definitely kind of underpinned by, you know, the 246 00:13:47,440 --> 00:13:49,800 Speaker 9: adoption of AI into the latest kind of round of 247 00:13:49,880 --> 00:13:52,840 Speaker 9: smartphones and beyond. So yeah, you know, and I think 248 00:13:53,200 --> 00:13:55,240 Speaker 9: people are prepared to kind of buy into that narrative. 249 00:13:56,200 --> 00:13:59,720 Speaker 9: And you know, the obviously the deep Seek news has 250 00:13:59,760 --> 00:14:02,000 Speaker 9: kind of really spook the markets a bit, but yeah, 251 00:14:02,040 --> 00:14:05,400 Speaker 9: a Meta still seen as potentially beneficiary of that. And 252 00:14:06,080 --> 00:14:09,360 Speaker 9: Zuckerberg was talking up being complimentary about deep Seek and 253 00:14:09,400 --> 00:14:14,320 Speaker 9: saying that they've they've delivered some novel innovations which they 254 00:14:14,400 --> 00:14:17,679 Speaker 9: expect to kind of integrate into their own technology in 255 00:14:18,040 --> 00:14:21,080 Speaker 9: the coming months and years. And you met has become 256 00:14:21,240 --> 00:14:25,280 Speaker 9: quite adept at copping other people's products. Yeah, for example, 257 00:14:25,360 --> 00:14:29,640 Speaker 9: you know, Instagram and the reels and such like. So 258 00:14:29,720 --> 00:14:32,880 Speaker 9: I think, you know, people buying into the kind of 259 00:14:32,880 --> 00:14:34,600 Speaker 9: midterm store and looking through some of the kind of 260 00:14:34,640 --> 00:14:35,560 Speaker 9: short term headwinds. 261 00:14:36,840 --> 00:14:40,040 Speaker 1: And it's interesting that Mark Zuckerberg did mention or was 262 00:14:40,040 --> 00:14:42,600 Speaker 1: asked about Deep Seek in that call as well, because 263 00:14:42,640 --> 00:14:45,800 Speaker 1: that's been a theme that's raised questions about the amount 264 00:14:45,840 --> 00:14:48,680 Speaker 1: of AI investment these big companies are doing. And it's 265 00:14:48,720 --> 00:14:51,200 Speaker 1: something that came up with Microsoft as well, warning that 266 00:14:51,200 --> 00:14:54,080 Speaker 1: it's struggling to build enough data centers to keep up 267 00:14:54,120 --> 00:14:57,320 Speaker 1: with demand for AI as well. I mean, how is 268 00:14:57,360 --> 00:14:59,440 Speaker 1: that this all playing into Microsoft's earnings. 269 00:15:00,120 --> 00:15:02,200 Speaker 9: Yeah, that's right. It's kind of interesting that we saw 270 00:15:02,200 --> 00:15:04,800 Speaker 9: a slightly different reaction to the Microsoft share price because 271 00:15:04,840 --> 00:15:08,520 Speaker 9: you know, the underlying narrative is quite similar that AI 272 00:15:09,120 --> 00:15:13,320 Speaker 9: demand is, you know, really really very strong. I think 273 00:15:14,160 --> 00:15:16,520 Speaker 9: that Microsoft talked about some like three hundred billion dollars 274 00:15:16,520 --> 00:15:19,720 Speaker 9: of kind of order book essentially for committed revenues, and 275 00:15:20,120 --> 00:15:23,840 Speaker 9: the issue is that they just can't get enough supply 276 00:15:24,160 --> 00:15:26,960 Speaker 9: for the data centers to kind of book that revenue quicker. 277 00:15:27,120 --> 00:15:29,120 Speaker 9: So I think it's kind of a good problem to have, 278 00:15:29,200 --> 00:15:30,880 Speaker 9: if you can kind of describe it as a problem. 279 00:15:31,200 --> 00:15:33,000 Speaker 9: But it does show, you know that with all these 280 00:15:33,040 --> 00:15:36,600 Speaker 9: companies planning to invest tens of not hundreds of billion 281 00:15:36,600 --> 00:15:42,200 Speaker 9: dollars in data center infrastructure, there's like, you know, not 282 00:15:42,360 --> 00:15:44,680 Speaker 9: enough supply and resources to go around, and you are 283 00:15:44,720 --> 00:15:47,120 Speaker 9: seeing this kind of short term issue in it, I guess, 284 00:15:47,240 --> 00:15:50,360 Speaker 9: to some extent, squeezes up the cost of building these things. 285 00:15:50,760 --> 00:15:52,320 Speaker 9: We'd see that a lot with m Video and how 286 00:15:52,400 --> 00:15:54,720 Speaker 9: much they're able to charge for their chips. But it 287 00:15:54,760 --> 00:15:56,400 Speaker 9: goes to the same for you know, all the contractors 288 00:15:56,400 --> 00:15:58,360 Speaker 9: that actually build the physical data centers and all of 289 00:15:58,400 --> 00:16:01,120 Speaker 9: the kind of wiring and cabling and cages that go 290 00:16:01,200 --> 00:16:04,560 Speaker 9: into them, and then delivering the power into those enormous 291 00:16:04,600 --> 00:16:06,880 Speaker 9: data centers is probably one of the biggest challenges you've got, 292 00:16:06,920 --> 00:16:10,160 Speaker 9: because you can't just bring power on in the blink 293 00:16:10,200 --> 00:16:13,040 Speaker 9: of and I can often take years to deliver that 294 00:16:13,080 --> 00:16:14,360 Speaker 9: power to these data centers. 295 00:16:15,280 --> 00:16:18,000 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 296 00:16:18,040 --> 00:16:21,120 Speaker 1: stories making news from London to Wall Streets and beyond. 297 00:16:21,400 --> 00:16:25,360 Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify, 298 00:16:25,480 --> 00:16:27,400 Speaker 2: and anywhere else you get your podcasts. 299 00:16:27,440 --> 00:16:30,480 Speaker 1: You can also listen live each morning on London DAB Radio, 300 00:16:30,520 --> 00:16:33,239 Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. 301 00:16:33,240 --> 00:16:36,040 Speaker 2: Our flagship New York station is also available on your 302 00:16:36,040 --> 00:16:40,760 Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty. 303 00:16:41,000 --> 00:16:42,320 Speaker 2: I'm Caroline Hepka and. 304 00:16:42,240 --> 00:16:44,920 Speaker 1: I'm Stephen Carroll. Join us again tomorrow morning for all 305 00:16:44,920 --> 00:16:47,360 Speaker 1: the news you need to start your day right here 306 00:16:47,400 --> 00:16:52,920 Speaker 1: on Bloomberg day Break Europe.