WEBVTT - Microsoft, OpenAI and UK Regulators 0:00:01.639 --> 0:00:05.920 From Marhart where Innovation, Money and Power Collie in Silicon 0:00:06.040 --> 0:00:10.440 Vallet NBN. This is Bloomberg Technology with Caroline Hyde and 0:00:10.720 --> 0:00:11.320 Ed Love Love. 0:00:24.880 --> 0:00:27.680 I'm Caroline Heide Bloomberg's world headquarters in New York and 0:00:27.760 --> 0:00:29.360 I'm Ed Lovelow in San Francisco. 0:00:29.440 --> 0:00:31.560 This is Bloomberg Technology coming up. 0:00:31.600 --> 0:00:35.879 Open AI and Microsoft's partnership facing potential antitrust scrutiny in 0:00:35.920 --> 0:00:38.680 the UK and the US will break down the CMA 0:00:38.760 --> 0:00:41.839 and the FTC's concern on the competition and. 0:00:41.960 --> 0:00:45.720 EU negotiators continue to debate rules for AI. Will discuss 0:00:45.760 --> 0:00:49.120 the sticking points as regulators balancing the risks of artificial 0:00:49.120 --> 0:00:51.879 intelligence and its potential benefits. 0:00:52.040 --> 0:00:54.400 Plus, Harpoon Ventures raises one hundred and twenty five million 0:00:54.400 --> 0:00:57.440 dollars for its forth fund to invest in ELI stage startups. 0:00:57.440 --> 0:00:59.800 Will sit down with the founder Lars and Jensen from 0:01:00.040 --> 0:01:03.240 today's PC Spotlight A first, let's checking on these markets 0:01:03.280 --> 0:01:06.959 and completely flat on the Nasdaq. Look, we try to 0:01:06.959 --> 0:01:10.120 digest the macro picture that is resilience in the US economy, 0:01:10.120 --> 0:01:12.920 a strong jobs market, a confidence building in the consumer 0:01:13.120 --> 0:01:15.640 and we're currently just what one point to the downside 0:01:15.640 --> 0:01:17.280 on the Nasdaq after we've of course, we saw that 0:01:17.319 --> 0:01:20.680 injection of buying yesterday. We do see big moves in 0:01:20.680 --> 0:01:23.759 the bomb market. Though thirteen basis, let's call fourteen basis 0:01:23.760 --> 0:01:26.160 points to the upside on the two years. People think 0:01:26.160 --> 0:01:28.800 that perhaps we've got a little bit too exuberant about 0:01:28.800 --> 0:01:31.119 thinking we'll have some sort of rate cuts as soon 0:01:31.160 --> 0:01:34.000 as March, those probabilities dialing back in the market. We're 0:01:34.000 --> 0:01:36.520 seeing Brent crew popping up about two point three percent 0:01:36.680 --> 0:01:39.960 after indeed oil has been under pressure, but notably some 0:01:40.080 --> 0:01:41.399 views that the US is going to have to build 0:01:41.440 --> 0:01:43.360 up at stockpiles, just managing to push it up a 0:01:43.400 --> 0:01:45.160 little bit higher. Let's move on and have a look 0:01:45.160 --> 0:01:47.360 at what's happening in the world a crypto, of course, 0:01:47.400 --> 0:01:50.200 because the dollar shows resilience. Today we see although over 0:01:50.240 --> 0:01:52.960 the course of the five pass trading days, what a 0:01:53.000 --> 0:01:55.520 tear bitcoin has been on. We're up more than ten percent. 0:01:55.560 --> 0:01:58.640 Forty three eight hundred is where we currently traded. But 0:01:58.680 --> 0:02:00.480 what about those micro details today. 0:02:01.080 --> 0:02:03.080 Yeah, so a lot of newsflow heading into the end 0:02:03.080 --> 0:02:05.960 of the year. One story we reported this morning Tesla 0:02:06.400 --> 0:02:11.320 another executive has left the Dojo project, this time Bill Chang, 0:02:11.360 --> 0:02:14.120 who is the principal engineer for Ai on the project. 0:02:14.120 --> 0:02:16.560 You remember twenty four hours ago Mark German and I 0:02:16.639 --> 0:02:20.959 reported that Ginesh Vin Kateramanan, who was the lead for Dojo, 0:02:21.000 --> 0:02:21.480 had left. 0:02:21.600 --> 0:02:23.079 We're now reporting on another departure. 0:02:23.639 --> 0:02:26.080 Stock a little softer three tens to one percent, but 0:02:26.200 --> 0:02:28.480 kind of in line with the market, not really drawing 0:02:28.480 --> 0:02:31.960 a causal link. The big technology story right now is 0:02:32.120 --> 0:02:36.240 Microsoft and open Ai. In the last hour, Bloomberg of reported, 0:02:36.320 --> 0:02:40.640 citing a source, that the FTC has opened a preliminary 0:02:40.840 --> 0:02:44.920 look from an antitrust perspective in Microsoft's investment on open Ai, 0:02:45.320 --> 0:02:49.320 following the UKCMA, which has done a similar early or 0:02:49.360 --> 0:02:53.400 prelim look, an invitation for the thoughts of the public 0:02:53.480 --> 0:02:56.240 on what they feel about it, but it could lead 0:02:56.280 --> 0:02:59.160 to a full blown probe. This is important. Did we 0:02:59.240 --> 0:03:01.840 see it coming. Let's bring in Bloomberg, Thomas Seal out 0:03:01.840 --> 0:03:04.360 of London. Thomas, they's start with the UKCMA. What are 0:03:04.360 --> 0:03:05.480 the details of what we know? 0:03:07.040 --> 0:03:10.920 Yeah, as you say, Edward, it's early stages, but I 0:03:10.960 --> 0:03:12.239 think we did see it coming. 0:03:12.240 --> 0:03:13.520 We saw some early signs. 0:03:14.040 --> 0:03:16.119 It's hard to keep up with the CMA probes, even 0:03:16.120 --> 0:03:19.040 on Microsoft's front. You know, it's only less than two 0:03:19.080 --> 0:03:21.960 months since they closed the activision probe, but in recent 0:03:22.000 --> 0:03:24.840 months they've been looking at AI foundation models. They've also 0:03:24.880 --> 0:03:28.800 been looking at the cloud market, and in today's statement 0:03:28.840 --> 0:03:32.480 on open Ai, they do explicitly mention the relationship with 0:03:32.639 --> 0:03:37.160 Microsoft Azure and open Ai. So, yeah, really interesting and 0:03:37.240 --> 0:03:39.920 interesting to see other regulators making similar any moves. 0:03:40.720 --> 0:03:44.320 It's kind of fascinating ultimately, when we're looking across at 0:03:44.360 --> 0:03:47.680 what also the USFTC is examining into the nature of 0:03:47.720 --> 0:03:49.280 the investment that Microsoft. 0:03:48.920 --> 0:03:49.640 Made in open Ai. 0:03:49.720 --> 0:03:51.960 We know they put in what ultimately is about thirteen 0:03:52.000 --> 0:03:55.200 billion dollars in terms of overall valuation that they've been 0:03:55.240 --> 0:03:58.640 contributing to open Ai. But what the CMA is looking 0:03:58.720 --> 0:04:03.280 at is whether, particularly through the governance situation, the unraveling, 0:04:03.360 --> 0:04:07.000 the firing then rehiring of Sam Altman, that de facto 0:04:07.400 --> 0:04:10.840 Microsoft has more control than well, they're less than fifty 0:04:10.840 --> 0:04:14.280 percent ownership, they have inequity. What is it that the 0:04:14.320 --> 0:04:17.240 CMA is trying to prove here? Hope and how can 0:04:17.360 --> 0:04:19.840 consumers and competition competition be hurt? 0:04:21.640 --> 0:04:24.240 Yeah, the key phrase, and when you look at antitrust, 0:04:24.360 --> 0:04:27.760 there's a lot of dry or arcane phrases. The key 0:04:27.800 --> 0:04:31.000 phrase with the CMA is substantial lessening of competition or 0:04:31.040 --> 0:04:34.880 relevant merger situation. Now clearly this isn't a merger per se, 0:04:35.680 --> 0:04:38.280 but it is a substantial investment. We don't know the 0:04:38.400 --> 0:04:40.080 term sheet. I'm sure they would like to take a 0:04:40.080 --> 0:04:42.160 look at it. In fact, on stage at the Bloomberg 0:04:42.160 --> 0:04:45.440 Technology Conference last month, no back in October, I asked 0:04:45.640 --> 0:04:48.240 the senior director at the CMA that very question whether 0:04:48.240 --> 0:04:50.200 he'd like to see the term sheets, and you know, 0:04:50.200 --> 0:04:52.000 you could tell you could tell that he would, and 0:04:52.240 --> 0:04:55.400 he implied that they wanted to look at these vertical relationships, 0:04:55.440 --> 0:04:59.440 as he says, between big tech companies and foundation models, 0:04:59.480 --> 0:05:04.000 not just Microsoft OpenAI, but also substantial investments in anthropic 0:05:04.240 --> 0:05:07.479 Obviously Google's full blown takeover several years ago of deep Mind, 0:05:08.120 --> 0:05:08.560 and that. 0:05:08.600 --> 0:05:12.200 Is precisely the deal that Brad Smith, president of Microsoft, 0:05:12.279 --> 0:05:15.400 referenced in his post when responding to all of this, 0:05:15.560 --> 0:05:18.080 he said, look, this is very different from Google's outright 0:05:18.160 --> 0:05:20.680 acquisition of deep Mind in the UK, and they reference 0:05:20.720 --> 0:05:22.600 that the only thing that has changed is that Microsoft 0:05:22.680 --> 0:05:26.880 will now have non voting observer on the Open Ai board. 0:05:26.960 --> 0:05:30.039 Thomas Seal great reporting and analysis on what's happening in 0:05:30.080 --> 0:05:30.480 terms of. 0:05:30.400 --> 0:05:31.560 The regulatory focus. 0:05:31.720 --> 0:05:34.840 I mean has mentioned earlier in the USCFGC is examining 0:05:34.839 --> 0:05:37.320 the nature of Microsoft's investment in the open AI as 0:05:37.360 --> 0:05:40.680 well whether it may violate antitrust laws. It's all according 0:05:40.680 --> 0:05:43.719 to a source and the inquiries of preliminary agency hasn't 0:05:43.760 --> 0:05:47.039 opened a formal investigation, and the source says Microsoft didn't 0:05:47.040 --> 0:05:49.760 report the transaction to the agency because look, the investment 0:05:49.760 --> 0:05:53.440 in open AI doesn't amount control of the company under 0:05:53.600 --> 0:05:57.240 US law. All of this, though, just shows the frenzy 0:05:57.400 --> 0:05:59.479 with which many are regulators are trying to wrap their 0:05:59.520 --> 0:06:02.560 head around the technological advancements that we see in AI 0:06:02.760 --> 0:06:04.760 and how we see some guardrails for it. Let's just 0:06:04.800 --> 0:06:06.919 go to the EU, where negotiators are still working to 0:06:07.080 --> 0:06:10.240 hammer out rules on AI, hitting a snag when it 0:06:10.240 --> 0:06:13.640 comes to face scanning technology in particular most Julian Deutsch 0:06:13.720 --> 0:06:17.599 has had well a pretty intense week over there in Brussels, 0:06:17.640 --> 0:06:20.239 where just people have been falling asleep at their desks. 0:06:20.279 --> 0:06:22.440 It sounds like, in terms of trying to get. 0:06:22.279 --> 0:06:24.680 A deal over the line, the stumbling block for you 0:06:24.720 --> 0:06:25.680 at the moment, what do we know. 0:06:27.120 --> 0:06:30.440 Yeah, So today Mark's we're about nine hours into the 0:06:30.480 --> 0:06:32.960 second marathon round of trying to get a deal on 0:06:32.960 --> 0:06:35.680 the Artificial Intelligence Act. Now this is after an nearly 0:06:35.720 --> 0:06:39.520 twenty four hour round ended on Thursday afternoon without a deal. 0:06:40.040 --> 0:06:42.200 So they reconvene this morning. I even kind of started 0:06:42.200 --> 0:06:44.440 off with a bit of a hitch. Lawmakers were too 0:06:44.480 --> 0:06:47.880 busy debating amongst themselves to actually enter the negotiating room. 0:06:48.120 --> 0:06:49.239 Now we're seeing lots of Connor. 0:06:49.080 --> 0:06:52.840 Proposals going back and forth between lawmakers and use dowing 0:06:52.920 --> 0:06:53.680 some number of states. 0:06:53.680 --> 0:06:56.279 But everyone's bucking up for another long night ahead. 0:06:57.640 --> 0:06:59.440 And as we put on the screen right now, what's 0:06:59.480 --> 0:07:02.159 its state? It would be the world's first comprehensive AI 0:07:02.279 --> 0:07:05.000 law if we get some progress, Bloom. Most of the 0:07:05.080 --> 0:07:07.599 dust's carry said, been busy, and we'll continue to be 0:07:07.640 --> 0:07:18.640 busy tracking that one, thank you. The US labor market 0:07:18.840 --> 0:07:22.640 continues to defy slow down forecast is evident in today's 0:07:22.680 --> 0:07:26.320 payrolls report. However, this week we saw Spotify announced job 0:07:26.320 --> 0:07:29.560 cuts that will impact seventeen percent of its workforce. There 0:07:29.560 --> 0:07:32.520 are others Twilio, for example, So what's going on? Joining 0:07:32.560 --> 0:07:34.280 us now to get a read on the labor market 0:07:34.480 --> 0:07:37.920 is LinkedIn senior economist Corey Kintango, and Corey, great to 0:07:38.000 --> 0:07:39.960 have you on the program. Let's just get right to 0:07:40.000 --> 0:07:43.120 the technology sector. Do you have any sort of micro 0:07:43.360 --> 0:07:46.760 focus on what is happening there with hiring firing into 0:07:46.760 --> 0:07:49.720 context of what was a really robust jobs report. 0:07:51.080 --> 0:07:53.480 So what we're seeing now on LinkedIn and the technology 0:07:53.520 --> 0:07:57.480 sector are signs of stabilization. So hiring overall is down 0:07:57.520 --> 0:08:01.160 about three percent since July, which is also a positive 0:08:01.200 --> 0:08:04.360 sign for stabilization, but hiring in tech is actually up 0:08:04.480 --> 0:08:06.840 three percent. So it's been about a year and a 0:08:06.880 --> 0:08:09.200 half of cool down in tech and we are finally 0:08:09.240 --> 0:08:11.840 starting to see some positive signs of stabilization in the 0:08:11.880 --> 0:08:12.920 hiring market for tech. 0:08:13.440 --> 0:08:18.080 What about well, the overall inflationary pressure wage inflation, that 0:08:18.200 --> 0:08:20.320 was something that we saw in the bigger macro data 0:08:20.360 --> 0:08:22.320 we're looking at at the moment, we're seeing while I 0:08:22.400 --> 0:08:25.200 increased a zero point four percent for the average hourly 0:08:25.200 --> 0:08:28.560 earnings month for month, we're seeing prices of people in 0:08:28.640 --> 0:08:29.320 talent go up. 0:08:31.200 --> 0:08:34.040 So in this week's jobs report, we did see an 0:08:34.080 --> 0:08:38.080 acceleration in nominal wage growth, and that can kind of 0:08:38.120 --> 0:08:41.480 fuel concerns about inflation, because one of the keys that 0:08:41.480 --> 0:08:45.560 the FED thinks to controlling inflation is bringing down the 0:08:45.640 --> 0:08:48.360 job market, bringing down nominal wage growth, so that wages 0:08:48.360 --> 0:08:51.680 aren't feeding so much into price pressures. But that's this 0:08:51.760 --> 0:08:54.079 month's job support is actually just kind of a reversal 0:08:54.080 --> 0:08:57.800 of the slowdown that we saw last month. Nominal wages 0:08:57.840 --> 0:09:00.400 are still running above what the FED would like, but 0:09:00.600 --> 0:09:02.880 some of that that we're seeing is actually just coming 0:09:02.920 --> 0:09:05.760 from the composition of workers. We saw a big drop 0:09:05.800 --> 0:09:09.240 off in retail employees in this month's jobs report, so 0:09:09.320 --> 0:09:11.600 those low wages are dropping off, which is kind of 0:09:11.640 --> 0:09:13.040 inflating that number as well. 0:09:14.280 --> 0:09:16.520 The low wages are dropping off, what are the higher 0:09:16.520 --> 0:09:19.760 wages doing. One of my Caroline's favorite pastimes is to 0:09:19.800 --> 0:09:22.240 go on the internet and look at all the postings 0:09:22.240 --> 0:09:26.520 for AI related jobs and then despair at how well 0:09:26.600 --> 0:09:29.160 paid those potential postings are. 0:09:29.600 --> 0:09:30.480 But is he jealous? 0:09:31.400 --> 0:09:34.760 Not the way jealous, but is AI having a serious 0:09:34.800 --> 0:09:37.040 impact in the way that the news headlines would have 0:09:37.120 --> 0:09:37.600 you believe? 0:09:38.840 --> 0:09:40.200 Well, I'm going to have to get on and start 0:09:40.200 --> 0:09:41.800 looking at those job postings myself. 0:09:41.800 --> 0:09:42.400 That's the kiss. 0:09:43.600 --> 0:09:47.360 So right now we're only seeing nascent impact from AI. 0:09:47.360 --> 0:09:50.800 On the job market, only about four percent of employers 0:09:50.840 --> 0:09:53.640 plan to make changes to their headcount. Is a result 0:09:53.760 --> 0:09:57.000 of the innovations we've seen this year in AI. Conversations 0:09:57.000 --> 0:09:59.600 are certainly up. We're all talking about it about seventy 0:09:59.640 --> 0:10:01.760 ear a seventy percent higher this year than they were 0:10:01.840 --> 0:10:04.600 last year. We're also saying that people are looking at 0:10:04.679 --> 0:10:07.400 job postings to say AI, as you said, about seventeen 0:10:07.440 --> 0:10:10.840 percent higher. They're getting about seventeen percent higher views compared 0:10:10.840 --> 0:10:13.120 to jobs that don't see anything about AI. Now, a 0:10:13.200 --> 0:10:16.040 lot of these jobs aren't AI jobs, they're just jobs 0:10:16.040 --> 0:10:18.520 that mentioned generator of AI are mentioned AI in the 0:10:18.600 --> 0:10:21.320 job hosting, in part because we know that this is 0:10:21.360 --> 0:10:23.880 an exciting area and no one wants to be left behind. 0:10:24.920 --> 0:10:27.480 It's great getting your perspective on really the nuance that's 0:10:27.520 --> 0:10:30.520 happening within the technology sector, as well as more broadly, 0:10:30.679 --> 0:10:33.439 the ramifications for what was a pretty sturdy set of 0:10:33.520 --> 0:10:36.440 numbers from macro Data Today LinkedIn senior economist crow contango. 0:10:36.520 --> 0:10:37.360 We thank you for your time. 0:10:37.600 --> 0:10:40.720 Meanwhile, let's get the read across from economists to market implication. 0:10:41.000 --> 0:10:42.280 We're so pleased to have in the building. 0:10:42.360 --> 0:10:46.720 Leafetengla's Investment CIO as a tengler who really has such 0:10:46.840 --> 0:10:50.040 a great viewpoint on when it comes to valuations in 0:10:50.040 --> 0:10:53.480 this space, the technology space in particular. You've sort of 0:10:53.520 --> 0:10:57.680 seen this economy before, you say, key, looking at the nineties, 0:10:57.679 --> 0:11:00.000 We've been here, We've done that. Therefore, from the nineth 0:11:00.520 --> 0:11:03.640 this resilience. Do you still buy tech? Yes, I think 0:11:03.679 --> 0:11:04.000 you do. 0:11:04.160 --> 0:11:05.840 I mean, if you look Caroline and thank you so 0:11:05.920 --> 0:11:07.360 much for having me in studio. 0:11:07.440 --> 0:11:08.360 It's great to be here. 0:11:09.240 --> 0:11:10.920 I think when you look back at the nineties, you 0:11:11.360 --> 0:11:15.920 learn that we can coexist. That is, stock equity investors 0:11:16.080 --> 0:11:18.600 with higher interest rates the tenure averaged five to eight 0:11:18.640 --> 0:11:21.480 percent during the decade, higher levels of inflation we were 0:11:21.480 --> 0:11:25.280 above three percent for the entire decade, and a tight 0:11:25.360 --> 0:11:30.240 labor market with productivity growth, and a number of other 0:11:30.280 --> 0:11:32.880 things that we pay attention to, like the vix it 0:11:32.920 --> 0:11:35.679 was low during the nineties. These are things that have 0:11:36.400 --> 0:11:39.520 been before, and yet we've still been able to generate 0:11:39.559 --> 0:11:42.080 excess returns. And where were the best returns in the nineties. 0:11:42.120 --> 0:11:44.400 They they were in technology. I think we're at the 0:11:44.400 --> 0:11:47.400 beginning of a new supercycle. So I think there's a 0:11:47.440 --> 0:11:50.120 lot of reasons on weakness to buy these names. 0:11:50.760 --> 0:11:54.400 Okay, we haven't actually seen that much weakness in Magnificent 0:11:54.440 --> 0:11:56.280 seven yet. For example, maybe a bit of a dip 0:11:56.320 --> 0:11:58.599 on some of the chip makers, but ultimately all you 0:11:58.720 --> 0:12:02.040 still saying let's go for the Microsoft's then videos, Oh, 0:12:02.200 --> 0:12:02.439 do you. 0:12:02.480 --> 0:12:05.400 Broaden that viewpoint? We're broadening it. 0:12:05.559 --> 0:12:08.000 So if you look back at the valuations, I mean, 0:12:08.080 --> 0:12:10.720 let's not forget in the nineties it was the four horsemen. 0:12:11.000 --> 0:12:13.400 I mean, at least now we have seven, right, and 0:12:13.480 --> 0:12:16.560 Microsoft then was trading at fifty one times peak earnings. 0:12:16.600 --> 0:12:20.840 It's only around thirty times, not peak earnings. So yes, 0:12:21.000 --> 0:12:23.440 you want to own that name. I'm less enamored as 0:12:23.440 --> 0:12:25.480 we talked about last time. I think I shocked ed 0:12:26.080 --> 0:12:28.600 with Meta. We own a little bit of Google, but 0:12:28.679 --> 0:12:32.160 we like Adobe, we like Service Now the poor man's 0:12:32.240 --> 0:12:37.760 Nvidia broadcom which reported great returns yesterday, great results, and 0:12:37.920 --> 0:12:40.599 Race a dividend fourteen percent. So those are some of 0:12:40.640 --> 0:12:43.000 the places we broadened out to Oracle, which is a 0:12:43.000 --> 0:12:46.480 generative AI computing play, but when we were buying it, 0:12:46.480 --> 0:12:50.000 it was just kind of a cheap old economy technology 0:12:50.000 --> 0:12:50.920 stock out. 0:12:51.760 --> 0:12:56.800 Nancy ed is not that easily shocked, but one thing 0:12:56.840 --> 0:12:59.400 that did catch my eye this year. I spent a 0:12:59.480 --> 0:13:02.720 day with AA and they had this forecast that the 0:13:02.800 --> 0:13:07.679 market for AI accelerators AI accelerators only will be four 0:13:07.760 --> 0:13:11.880 hundred billion dollars in twenty twenty seven. That's up from 0:13:11.920 --> 0:13:13.679 their forecast that they only just gave in August of 0:13:13.720 --> 0:13:17.400 one hundred and fifty billion dollars. Last year, the entire 0:13:17.480 --> 0:13:20.920 semiconductor market, every chip you can think of, was five 0:13:21.000 --> 0:13:25.400 hundred billion dollars, which makes this forecast of multi multi 0:13:25.520 --> 0:13:28.960 year ongoing expansion from AI even more. 0:13:30.480 --> 0:13:31.040 Amazing. 0:13:31.160 --> 0:13:35.560 I suppose do you see the investors following that trajectory 0:13:35.720 --> 0:13:37.360 from now through twenty twenty seven. 0:13:37.920 --> 0:13:39.120 I think eventually yes. 0:13:39.200 --> 0:13:41.360 I mean what you continue to see is that the 0:13:41.440 --> 0:13:43.480 bears don't get to be in charge very often, so 0:13:43.480 --> 0:13:45.760 they're kind of loath to leave the stage. You know, 0:13:45.800 --> 0:13:48.079 we heard that the tech trade was over in October 0:13:48.679 --> 0:13:51.560 in the fall, but in particular October of twenty twenty two, 0:13:51.640 --> 0:13:54.760 we were in buying. At the end of the summer, 0:13:54.880 --> 0:13:58.600 the stock scot you know, pretty well trounced and including 0:13:58.600 --> 0:14:01.240 the Magnificent seven. We wrote a piece on October thirty 0:14:01.240 --> 0:14:02.880 first said you ought to get in here and buy 0:14:02.880 --> 0:14:04.840 some of this stuff, and we were doing that, So 0:14:05.000 --> 0:14:06.480 I think what you want to do. I mean, this 0:14:06.559 --> 0:14:09.720 won't work forever ed, I mean, that's for sure, but 0:14:10.000 --> 0:14:12.679 these super cycles can run five to ten years. And 0:14:12.720 --> 0:14:15.720 we're in early days and you have identified the total 0:14:15.760 --> 0:14:19.120 addressable market, which is critical and it it extends beyond 0:14:19.200 --> 0:14:20.800 chips into software as well. 0:14:22.080 --> 0:14:24.840 That is the conversation I'm having every day. At the moment, 0:14:25.000 --> 0:14:28.240 everyone's obsessed with the GPUs, What about all the other stuff? 0:14:28.240 --> 0:14:32.160 Producer John Hyland saying in our chat, if in Nvidia's 0:14:32.200 --> 0:14:36.040 the champagne, then broad comms the pbr bit based on 0:14:36.080 --> 0:14:41.520 your fisis, but what about the Ethernet infrastructure that's needed 0:14:41.680 --> 0:14:44.080 the memory chips. Do you think that that's kind of 0:14:44.120 --> 0:14:45.480 being discounted right now? 0:14:45.800 --> 0:14:48.280 Yeah, I think you know, in Nvidia is sucking all 0:14:48.280 --> 0:14:49.800 the air out of the room, and now you've got 0:14:49.840 --> 0:14:52.360 AMD and they're kind of adding some value, you know, 0:14:52.400 --> 0:14:56.520 adding some narrative to this. Broadcom is only partially it's 0:14:56.560 --> 0:14:58.600 going to be about twenty five percent of revenues, the 0:14:59.520 --> 0:15:03.000 enterprise cloud computing chip part of it. But they've got 0:15:03.080 --> 0:15:05.000 VMware which is going to pick up some of the slacks. 0:15:05.000 --> 0:15:07.160 So we're looking at names like Adobe, which I call 0:15:07.200 --> 0:15:10.160 the unsung hero of generative AI, and we own it 0:15:10.200 --> 0:15:13.200 and we're looking for opportunities to add to it. Service 0:15:13.240 --> 0:15:16.680 now is taking it spend away from some of the 0:15:16.680 --> 0:15:20.800 other providers directing the traffic in the clouds. So there 0:15:20.840 --> 0:15:23.240 are a lot of ways to play this, and I think, 0:15:23.400 --> 0:15:25.760 you know, I don't think you have to chase Nvidia 0:15:26.280 --> 0:15:27.000 up the ladder. 0:15:27.480 --> 0:15:30.200 Always so straight talking and coming out showing how you've 0:15:30.240 --> 0:15:31.880 been putting your money where your mouth is. We really 0:15:31.920 --> 0:15:35.000 appreciate it and as of love a Tanglar Investments. Great 0:15:35.000 --> 0:15:37.040 to have a here in New York. Meanwhile, add to you. 0:15:37.920 --> 0:15:39.720 Yeah, coming up, we're going to have a conversation about 0:15:39.760 --> 0:15:41.960 DOC you sign out with its quarterly report. We're going 0:15:42.000 --> 0:15:44.600 to recap those results and get the outlook with the 0:15:44.680 --> 0:15:49.680 CEO coming up next, Alan Tigerson on the program Quick 0:15:49.720 --> 0:15:53.600 one TSMC four tenths of a percent on the ADRs. 0:15:53.720 --> 0:15:55.080 It's so weird. What's going on. 0:15:55.120 --> 0:15:58.720 November data for sales not good. October had been good, 0:15:59.080 --> 0:16:01.240 down the eleven foot first eleven months of the year, 0:16:01.280 --> 0:16:03.720 the down four percent year and year. We have no 0:16:04.320 --> 0:16:07.360 hard gauge on what's going on with this chip industry. 0:16:07.720 --> 0:16:10.560 If we bottomed out in some areas, we're still sinking 0:16:10.600 --> 0:16:11.920 in others, but we'll keep tracking it. 0:16:11.960 --> 0:16:13.120 This is bloonbo technology. 0:16:29.240 --> 0:16:30.160 Time for talking tech. 0:16:30.200 --> 0:16:33.400 First up, Indian conglomerate Tata Group is planning to build 0:16:33.440 --> 0:16:35.880 one of the country's biggest iPhone assembly plants now. The 0:16:35.880 --> 0:16:39.240 facility will likely have about twenty assembly lines employ fifty 0:16:39.280 --> 0:16:43.160 thousand workers. According to sources, Tato's plant would bolster Apple's 0:16:43.160 --> 0:16:46.840 efforts to increase production in India. Meanwhile, ten Cent is 0:16:46.880 --> 0:16:49.520 betting on its new open world adventure game to help 0:16:49.560 --> 0:16:52.920 expand its global reach, and the official trailer for Last Sentinel, 0:16:53.200 --> 0:16:55.400 while it was unveiled during the twenty twenty three Game 0:16:55.480 --> 0:16:59.080 Awards send in a dystopian future Tokyo. Last Sentinel was 0:16:59.120 --> 0:17:01.880 developed by ten centts California based Lightspeed at La Studio. 0:17:02.240 --> 0:17:04.000 No word yet on the game's release date. 0:17:04.480 --> 0:17:06.560 Plus raad coom we're just talking about it when that's 0:17:06.640 --> 0:17:09.159 ten Lember Broadcom says it expects the rapid expansion of 0:17:09.200 --> 0:17:13.320 AI computing to how offset its worst slowdown since twenty twenty. 0:17:13.480 --> 0:17:16.080 CEO Hoc Tan referred to AI as someone a lot 0:17:16.080 --> 0:17:18.560 of bright Spot for the chip maker, which expects salesforce 0:17:18.680 --> 0:17:20.879 AI supporting chips to grow more than twenty percent in 0:17:20.880 --> 0:17:23.800 twenty twenty four. Yesterday was Comm's the first calling reports 0:17:23.800 --> 0:17:26.200 since it's acquisition of software firm VMware. 0:17:26.800 --> 0:17:29.960 Ed well for we got yeah another earnings conversation. Doc 0:17:29.960 --> 0:17:33.080 you sign out with results beating expectations on revue in 0:17:33.119 --> 0:17:36.359 the third quarter gone, but offering a margin outlook that 0:17:36.480 --> 0:17:39.879 was seen as cautious by some analysts. I like to 0:17:39.880 --> 0:17:42.800 say that joining us now is DOCU sign CEO Alan 0:17:42.920 --> 0:17:46.520 Tiger Sin Docu sign e signature document generation. 0:17:46.680 --> 0:17:49.200 We all use it. Ye had great results. 0:17:49.280 --> 0:17:53.159 The stock opened significantly lower, then rebounded, your up four percent, 0:17:53.560 --> 0:17:56.200 and the analyst is saying, come on, give us a 0:17:56.240 --> 0:17:58.240 little bit more on your margin outlook. Why were you 0:17:58.280 --> 0:17:59.120 so conservative? 0:18:00.200 --> 0:18:03.800 Well, we've I think shown that we can drive great 0:18:03.840 --> 0:18:06.120 operating efficiency inside the business. I think that was really 0:18:06.160 --> 0:18:09.240 the highlight of our Q three results, record operating profit. 0:18:09.000 --> 0:18:10.080 Record free cash flow. 0:18:11.160 --> 0:18:14.720 But we still have growth ambitions as well, So we're 0:18:14.760 --> 0:18:18.119 balancing our investment and growth and our new roadmap with 0:18:18.880 --> 0:18:21.119 continuing to find new operating efficiencies. 0:18:21.200 --> 0:18:24.760 Most of Openingberg Technology audience with no docu signed from 0:18:24.800 --> 0:18:29.320 e signature. Someone sends you something, you sign it electronically, done, dusted, simple. 0:18:29.640 --> 0:18:31.720 But what is the technology story for dock sign he 0:18:31.760 --> 0:18:33.840 talk it's about growth into what. 0:18:34.160 --> 0:18:39.000 Yes, so historically we pioneered E signature and that continues 0:18:39.040 --> 0:18:41.119 to be the majority of our business. But over the 0:18:41.200 --> 0:18:44.040 last several years we've been investing what we call agreement management, 0:18:44.240 --> 0:18:52.680 which is essentially helping companies manage agreements from development, editing, negotiating, settling, signing, 0:18:53.240 --> 0:18:55.560 and then once you have the signed agreements, what are 0:18:55.560 --> 0:18:58.359 you doing with them? How are you performing against your obligations, 0:18:58.359 --> 0:19:00.359 how are your vendors performing, and how would you like 0:19:00.400 --> 0:19:03.160 to renegotiate them when they're up for renewal. That whole 0:19:03.200 --> 0:19:06.360 suite we call agreement management. We've delivered various pieces of it, 0:19:06.560 --> 0:19:08.520 and we're really putting the whole thing together now. 0:19:09.080 --> 0:19:13.560 Morgan Stanley analyst over there, Josh bare talking about decelerating trends, 0:19:13.600 --> 0:19:15.880 of course, which you try to counteract with this growth 0:19:15.920 --> 0:19:18.480 story of focus on a broader agreement. What is the 0:19:18.600 --> 0:19:21.320 macro economy paint for you and your customers at the moment. 0:19:21.760 --> 0:19:25.160 Yeah, I would say it's still a cautious outlook. Our 0:19:25.520 --> 0:19:28.560 outlook reflects what we see right now. We don't try 0:19:28.560 --> 0:19:31.760 to be macro prognosticators. But I would say the B 0:19:31.840 --> 0:19:34.600 to B software space and enterprise spend in that area 0:19:34.800 --> 0:19:40.720 is steady. Certainly, to the extent that the macro environment 0:19:40.720 --> 0:19:43.560 and interest rates improved, then that will be very helpful. 0:19:43.600 --> 0:19:47.080 But we're not projecting that yet. But I'd say that 0:19:47.119 --> 0:19:49.200 we're in a stable environment. 0:19:49.600 --> 0:19:50.920 We're not falling anymore. 0:19:51.640 --> 0:19:55.080 Your background before, of course, Doc youre side Google. Before Google, 0:19:55.119 --> 0:19:58.760 you were asset managing. You were also investing in startups 0:19:58.800 --> 0:20:01.920 at Karlau for example, Alan, What is it that you've 0:20:01.920 --> 0:20:04.119 managed to do because many would reflect that your manager 0:20:04.160 --> 0:20:06.760 did contained costs. You already managed to show this expansion 0:20:06.800 --> 0:20:09.439 while not bringing up the overall cost of doing business. 0:20:09.840 --> 0:20:12.439 How have you brought over your playbook of seeing others 0:20:12.480 --> 0:20:14.399 do it before to your business now? 0:20:14.800 --> 0:20:17.560