Apple's AI Delay and Trump's Pro-Crypto Turn | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND JAN, THIS IS "BLOOMBERG TECHNOLOGY," WITH CAROLINE HYDE AND ED LUDLOW. ED: LIVE FROM BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK, THIS IS "BLOOMBERG TECHNOLOGY." COMING UP, APPLE'S AI DELAY. PLUS, FROM CRYPTO CRITIC TO BITCOIN BACK UP. JUMP VALVES CHANGES AT THE SEC AND, IF REELECTED, TO MAKE IT GOING GREAT AGAIN. AND DEADPOOL'S DOMINATION. THE MOVIE SHATTERS A BOX OFFICE RECORDS.
TAKE A LOOK AT THE NASDAQ 100. WE ARE UP MEANINGFULLY IN THE SESSION, BUT WE ARE COMING OFF THE BACK OF THREE STRAIGHT WEEKS OF WEEKLY DECLINES. WE WERE TALKING OVER THE WEEKEND ABOUT THE NASDAQ 100 BEING IN CORRECTION TERRITORY. WE HAVE $10 TRILLION OR SO OF MARKET CAP REPORTED ACROSS MICROSOFT, META, AND AMAZON. APPLE IS A NAME WE ARE WATCHING REALLY CLOSELY. IT KIND OF OPENED LOWER AND HAS
BEEN TRADING CHOPPY, AND NOW IT IS MODESTLY LOWER, BASICALLY FLAT. A BLOOMBERG INCLUSIVE, APPLE'S AI FEATURES HAVE BEEN DELAYED AND WILL MISS THE INITIAL RELEASE OF IOS 18 IN SEPTEMBER. THE COMPANY PLANS TO RELEASE APPLE INTELLIGENCE BY OCTOBER BUT WILL MAKE IT AVAILABLE TO SOFTWARE DEVELOPERS FOR EARLY TESTING AS SOON AS THIS WEEK, AN ATYPICAL STRATEGY FOR THE TECH GIANT. I WANT TO WELCOME BACK BLOOMBERG 'S MARK GURMAN. THE DETAIL IS IMPORTANT. MARK: THANK YOU FOR HAVING ME. GREAT TO BE BACK. APPLE INTELLIGENCE. THIS IS APPLE'S BIG INITIATIVE
FOR THE UPCOMING YEAR, SHOWING THE MARKET, CONSUMERS THAT IT, TOO, HAS GENERATIVE ARTIFICIAL INTELLIGENCE FEATURES. THEY ANNOUNCED THIS IN JUNE. THE INTENTION WAS TO BRING IT TO MARKET WITH IOS 18 AND IPAD OS 18, WHICH WILL LAUNCH SOMETIME IN SEPTEMBER, BUT NOW I AM TOLD IT WAS PUSHED BACK TO 18.1. THIS IS NOT A BIG DELAY BUT IT
MEANS IT LIKELY WILL NOT COME BE INSTALLED IN THE IPHONE 16 WHEN THOSE ARE SOLD. SO IT IS A FEW WEEK DELAY. IT IS NOT A HUGE DEAL, BUT IT SHOWS THE COMPANY IS STILL RACING TO IRON THINGS OUT AND FIX BUGS BEFORE THIS PUBLIC LAUNCH. ED: I WILL GET TO THE STOCK STORY WITH MY NEXT GUEST, BUT IT IS WORTH RECOUNTING THE BASICS. I'VE IPHONE 15 PRO, WHICH I THINK WILL QUALIFY NEED TO BE ABLE TO GET APPLE INTELLIGENCE, BUT JUST EXPLAIN THE ROLLOUT PROBABLY ACROSS WHAT TYPE OF DEVICE YOU NEED TO HAVE AND WHAT IT IS GOING TO DO. MARK: APPLE INTELLIGENCE REQUIRES DEVICES, IF YOU ARE ON THE MAC, WITH APPLE SILICON, OR ON IPHONE OR ARE -- OR IPAD WITH 8GIGS OR MORE.
THE IPHONE IS WHERE THINGS GET INTERESTING. TODAY, THERE'S ONLY TWO IPHONE MODELS THAT WILL SUPPORT APPLE INTELLIGENCE, THE IPHONE 15 PRO AND THE IPHONE 15 PROMAX. THOSE ARE THE ONLY TWO IPHONES ON SALE NOW THAT INCLUDES EIGHT GIGABYTES OF RAM. THAT IS INTERESTING BECAUSE
THERE WILL SOON BE FOUR MORE MODELS THAT HAVE EIGHT GIGE BITES -- GIGABYTES OF RAM, THE IPHONE 16. READY SOON, A BUNCH MORE IPHONES WILL INCLUDE APPLE INTELLIGENCE. THAT IS PROBABLY GOING TO SPUR PEOPLE TO UPGRADE THEIR IPHONE, GIVEN IT WILL NOT COME TO OLDER MODELS FOR THE APPLE INTELLIGENCE INCLUDE A BUNCH OF AI FEATURES. IT IS A CATCHALL TERM FOR A LOT OF AI FEATURES COMING TO APPLE DEVICES P THAT INCLUDES BEING ABLE TO CREATE IMAGES, INTEGRATE WITH CHATGPT, A NEW VERSION OF SIRI, THE ABILITY TO HAVE WRITING TOOLS, SO YOU CAN WRITE SOMETHING IN AN EMAIL, AND IT WILL BE ABLE TO SUMMARIZE IT FOR YOU, SHORTEN IT, MAKE IT MORE CONVERSATIONAL, BE ABLE TO SUMMARIZE INCOMING TEXT SEARCHES, TRANSCRIBE A VOICE MEMO OR PHONE CALL, THEN CREATE A SUMMARY FOR YOU. SO A BUNCH OF DIFFERENT AI
FEATURES ACROSS THE BOARD. THESE ARE NOT ANYTHING EXTRAORDINARILY INNOVATIVE OR BRAND-NEW. NOT A LOT WE HAVE NOT SEEN FROM OTHER PLATFORMS BEFORE. BUT THE DEEP INTEGRATION AND THE EASE-OF-USE AND THE INTERFACE YOU WILL SEE ON APPLE DEVICES REALLY TAKES IT UP A NOTCH AGAINST RIVALS. ED: APPLE REPORTS FISCAL THIRD
QUARTER EARNINGS THURSDAY AFTER THE MARKET CLOSE. I HEARD A RUMOR THAT YOU AND I WILL BE TEAMING UP ON THE TOP LIVE BLOG CARE THAT MIGHT BE NEWS FOR YOU. GIVE ME WHAT TO WATCH. MARK: THIS IS AN INTERESTING ONE, BECAUSE YOU WILL WANT TO PAY ATTENTION TO THE GUIDANCE THAT APPLE'S CFO AND TIM COOK LIVE ON THE CALL.
THEY WILL NOT GIVE NUMBERS BUT WILL IMPLY, PROBABLY, HOW THE IPHONE WILL DO. THAT WILL BE THE MOST IMPORTANT PART THERE, BECAUSE THERE IS NOT A LOT OF NEW HARDWARE LAUNCHED DURING THE QUARTER THAT WE CARED ABOUT, OTHER THAN THE NEW IPADS, SO ALL EYES WILL BE ON THAT FORWARD-LOOKING COMMENTARY. ED: BLOOMBERG'S MARK GURMAN, INCREDIBLE TO HAVE YOU BACK HERE ON "BLOOMBERG TECHNOLOGY." LET'S BRING IN MAXIM GROUP MANAGING DIRECTOR TOM FORTE. WHAT WE DID NOT NECESSARILY TALK ABOUT IN THE REPORTING WAS WHY IT WAS IMPORTANT, A LOT OF THE RUN-UP IN THE STOCK IS OPTIMISM THIS IS COMING, A REAL, TANGIBLE EFFORT ON ARTIFICIAL INTELLIGENCE. SO YOUR RESPONSE TO THAT REPORTING? IT IS A MATTER OF WEEKS IN THE ROLLOUT OF APPLE INTELLIGENCE, BUT IT SEEMS SIGNIFICANT. TOM:
WHEN I THINK ABOUT MY HOLD RATING ON APPLE, THE QUESTION BECOMES HOW MUCH ARE INVESTORS POTENTIALLY AHEAD OF THEMSELVES WHEN THINKING ABOUT THE UPGRADE CYCLE FOR AI? I CERTAINLY THINK THERE WILL BE AN UPGRADE CYCLE FOR AI. IN OUR NUMBERS, WE ARE LOOKING FOR ESSENTIALLY HALF THE LIFT THEY GOT FROM 5G. THE REASON WE ARE THINKING HALF THE LIFT IS A HAVE PRESSURE FROM A REGULATORY STANDPOINT IN EUROPE, WHICH IS ABOUT 25% OF THEIR SALES, AND CHINA, ABOUT 20% OF THEIR SALES. NOW WE ARE SEEING THEY WILL HAVE A SLOWER ROLLOUT OF APPLE INTELLIGENCE. CLEARLY, THERE WILL BE AN UPGRADE CYCLE, I JUST DO NOT PICK IT WILL BE AS SIGNIFICANT AS WHAT IS ALREADY PERFECTED IN THE SHARES. ED: ONE OF THE THINGS WE HAVE BEEN
THINKING ABOUT IS, BASICALLY, FOR EVERY DOLLAR PUT IN AI, HOW MANY DOLLARS ARE COMING UP FOR EACH OF THESE COMPANIES? FOR THE CLOUD PLAYERS, IT IS A BIT MORE EASY TO DO THE MATH. AI IF A STRUCTURE INVESTMENT, TOPLINE GROWTH. IN APPLE'S CASE, IT SEEMS LIKE APPLE INTELLIGENCE, THAT THEY HOPE IT SPURS UPGRADE CYCLES, BECAUSE YOU NEED THE HARDWARE THAT IS COMPATIBLE WITH IT, AS MARK OUTLINED CARED WHAT IS YOUR MODEL FOR HOW A DOLLAR IN TRANSLATES TO HOWEVER MANY DOLLARS OUT FOR APPLE? TOM: THIS IS A GOOD EXAMPLE WHERE ARTIFICIAL INTELLIGENCE CAN RESULT IN SALES PER THE CHALLENGE IN ENTERPRISE SOFTWARE IS HEAVY LEVEL OF INVESTMENT SPEND FOR ARTIFICIAL INTELLIGENCE AND NOT A NEAR-TERM 12 TO 18 MONTH IMPACT. THE SIZABLE -- IF YOU LOOK AT THE REVENUE THEY GENERATE FROM IPHONE, WHICH IS ABOUT HALF THEIR SALES, ON 5G, THE ADDED $50 BILLION A YEAR IN ANNUAL REVENUE ON THE 5G UP GREAT CYCLE. TO THE EXTENT AI SPUR SOMETHING SIMILAR, YOU CAN LOOK AT AN INCREMENTAL $50 BILLION REVENUE FOR APPLE. TRANSLATING IT, YOU'RE LOOKING AT MID TO HIGH SINGLE-DIGIT EPS GROWTH. ED: WE ARE TALKING WITH TOM FORTE
FROM MAXIM GROUP. MARK SET OUT WHAT WE SHOULD BE LOOKING FOR. A LESSON LEARNED IN RECENT ORDERS AS MAY BE DON'T PUT TOO MUCH EMPHASIS ON THE THIRD PARTY DATA, PARTICULARLY CHINA, BECAUSE THE THIRD-PARTY DATA TELLS US THE IPHONE IS SLIPPING IN CHINA TO DOMESTIC HANDSET MAKERS. YET, THE LAST EARNINGS, ON THE CALL IN PARTICULAR, THEY SAY WE THINK WE HAVE GROWTH BACK THERE.
THOSE SLIGHTLY IN CONGRESS, COMPETING DATA POINTS. WITH THAT CONTEXT IN MIND, WHAT ARE YOU BRACING FOR? TOM: I AM GOING TO TRY TO REVERSE ENGINEER ESSENTIALLY WHAT THE OUTLOOK IS FOR IPHONE SALES IN THE SEPTEMBER QUARTER. THE EXPECTATION IS THEY WILL HAVE A NEW IPHONE 16 THAT WILL COME OUT IN THE SEPTEMBER QUARTER.
YES, SOFTWARE WILL LAG INTO THE DECEMBER ORDER, BUT TO THE EXTENT THAT IS THE COMMENTARY I AM LOOKING FOR, AND IF YOU LOOK AT THE JUNE QUARTER, THE SAME EXERCISE SUGGESTS IPHONE SALES WOULD BE NEGATIVE IN THE JUNE QUARTER. DID WE SEE A TRANSITION FROM NEGATIVE TO POSITIVE ON THE UPGRADE CYCLE FOR AI? ED: WHERE IS THE BIGGEST SURPRISE GOING TO BE IN THE APPLE PRINT? TOM: THE BIGGEST SURPRISE IS GOING TO BE, I THINK, THAT THE INCREMENTAL LIFT TO IPHONE SALES FROM AI WILL NOT BE AS SIGNIFICANT AS CURRENTLY REFLECTED IN THE STOCK. STOCK'S TRADING AT NORTH 30 TIMES PE. THE BIG TECH PEERS ARE MORE AT 27.5. I THINK INVESTORS ARE EXCITING TOO MUCH OF A BOOST FOR APPLE FROM AI. ED: A STORE WE HAVE DONE LESS IS
ECOSYSTEM. YOU ARE A DEVICE USER BUT YOU NOW USE SERVICES. YOU THINK APPLE MOVES BACK TO THAT STORY WITH AI? TOM: THAT IS A GREAT STORY FOR AI. TO THE ACCENT THAT INCREMENTAL -- TO THE EXTENT INCREMENTAL IPHONE SALES RESULT IN INCREMENTAL SALES, THAT COULD PERHAPS GET THE COMPANY TO SUPPORT IT. SO TO THE EXTENT THEY CAN LEVERAGE AI TO GET CONSUMERS MORE CITED BY THE ECOSYSTEM AND TO ADVANCE THEIR PURCHASES ON HIGHER-MARGIN SERVICES, THAT COULD BE WONDERFUL FOR THE STOCK. ED:
TOM FORTE, MAXIM GROUP MANAGING DIRECTOR, GREAT TO HAVE YOU BACK ON THE PROGRAM. COMING UP ON "BLOOMBERG TECHNOLOGY," IT IS A BIG WEEK FOR TECH EARNINGS. WE GET THE OUTLOOK WITH RBC CAPITAL MARKETS' BRAD ERICKSON. ONE NAME WE HAVE NOT YET
MENTIONED BUT IS BIG IN THIS MARKET IS TESLA, UP 4.8%. THERE IS AN INTERESTING NOTE FROM MORGAN STANLEY AND ADAM JONAS, BASICALLY SAYING TESLA IS OUR TOP AUTOMOTIVE BUSINESS, GOOD OLD-SCHOOL MANUFACTURING AND SELLING ELECTRIC VEHICLES, BUT, OF COURSE, ELON MUSK'S VISION FOR THE COMPANY IS ABOUT ARTIFICIAL INTELLIGENCE. AT 4.8% GAIN, IT IS SUBSTANTIVE. THIS IS "BLOOMBERG TECHNOLOGY."
ED: IT IS A BIG WEEK FOR BIG TECH, WITH FOUR OF THE MAGNIFICENT SEVEN MEGA CAPS POSTING QUARTERLY EARNINGS. YOU MIGHT THINK ATTENTIONS ARE IN PARIS WITH THE OLYMPICS, BUT IN THE WORLD OF TECHNOLOGY, YOU ARE GLUED TO "BLOOMBERG TECHNOLOGY" RIGHT TO THE COURSE OF THE WEEK. IT IS NOT JUST THE MEGA CAPS, SOME OF THE CHIP NAMES AS WELL. LET'S GET THE OUTLOOK WITH BRAD
ERICKSON, CAPITAL MARKETS RESEARCH ANALYST AT RBC. IN ORDER TO LOOK FORWARD, I LOOK BACK LAST WEEK AT ALPHABET AND THE QUESTIONS INVESTORS POSED. WE ALREADY TALKED ABOUT IT, BUT FOR EVERY QUESTION -- EVERY DOLLAR YOU PUT INTO AI INFRASTRUCTURE INVESTMENT, HOW MANY DOLLARS ARE YOU GETTING OUT IN THE NEAR TERM.
IS THAT HOW YOU WOULD APPROACH THIS WEEK? BRAD: YEAH, I THINK THAT WILL BE A KEY TOPIC. WE ARE NOT GOING TO GET A TON OUT OF META-OR AMAZON IN TERMS OF WHAT THEY ARE SPENDING THIS YEAR. PEOPLE ALREADY GENERALLY UNDERSTAND THAT. WE WILL BE LOOKING AT THE
MARGINAL DOLLARS, LIKE YOU SAID. WHAT IS INTERESTING IS, A QUARTER OR TWO AGO, PEOPLE WERE VERY FOCUSED ON SPECIFICALLY WHAT AI WAS DRIVING, BUT WHAT WE ARE LEARNING MORE AND MORE IS AI IS REALLY INTEGRATING INTO THESE MODELS, SO YOU CANNOT UNPACK IT. WHICH IS OK, BECAUSE THEN WE CAN EVALUATE THE DOLLAR GROWTH IN THESE COMPANIES AND ORDERS JUSTIFYING THOSE INVESTMENTS. ED: THERE ARE THINGS ARE SORT OF IDIOSYNCRATIC. META'S CASE, WE KINDA FORGET IT IS A MASSIVE PORTFOLIO, SOCIAL MEDIA COMPANIES, BUT THEY, LAST QUARTER, TOLD US ABOUT THEIR PLANS FOR INFRASTRUCTURE. EACH WINS OUT, THE FORWARD-LOOKING AI STORY OR THE BACKWARD LOOKING HISTORY OF THAT COMPANY? BRAD: I THINK PEOPLE ARE DEFINITE GOING TO BE LOOKING FORWARD. THE STORY WILL BE THE SAME.
WE WILL LOOK AT THE REVENUE TRENDS AND EVALUATE WHAT THEY ARE SAYING ABOUT THE AD MARKET AND THEIR PRODUCT IN PARTICULAR, THEN THE FOCUS ON THE CALL IS GOING TO SHIFT TO MARK TALKING ABOUT HIS VISION FOR AI AND TRYING TO GIVE PEOPLE SOME COMFORT, I THINK THIS QUARTER, IN WHY THEY'RE MAKING SUCH BIG INVESTMENTS WHERE MAYBE WE WILL SEE A LITTLE BIT OF -- CALL IT DELAYED GRATIFICATION IN TERMS OF WHEN THOSE INVESTMENTS PAY OFF. HE USED THE WORDS WE ARE IN A MULTIYEAR INVESTMENT CYCLE. THAT IS A SCARY TERM FOR PEOPLE, SO WE WILL SEE WHAT PERFORMANCE HE PUTS UP LATER THIS WEEK. ED: THIS IS A WEEK WHERE BE A CEO OR CFO, YOU KIND OF HAVE TO EARN THAT PAY PACKET. DO YOU KNOW WHAT I MEAN?
IT COMES DOWN TO COMMUNICATION AT THE END. HOW MUCH FAITH OR CREDENCE DO YOU PUT IN THE WORDS SPOKEN BY THE PEOPLE AT THE TOP? BRAD: YEAH, YOU KNOW, I THINK THEY ARE LITTLE BIT DIFFERENT CASES. WE COVER META AND AMAZON, SO I WILL STICK WITH MY COMMENTARY THERE. IN TERMS OF MARK ZUCKERBERG AND META, ONE OF THE ADAGES WE HAVE HEARD LATELY IS YOU WANT TO BUY MARK WHEN HE IS FEELING MORE CONFIDENT AND SELL WHEN HE IS FEELING -- SORRY, BUY HIM WHEN HE IS FEELING A LITTLE LESS CONFIDENT, SELL WHEN HE IS FEELING A LITTLE MORE CONFIDENCE PAY LAST QUARTER, THEY ARE DELIVERING SUCH HIGH-GROWTH -- THEY WERE 27% GROWTH LAST QUARTER, 22% THIS QUARTER -- I THINK THAT FELT A LITTLE TOUGH, AND OBVIOUSLY, THE STOCK SOLD OFF.
HISTORICALLY, YOU HAVE SEEN THAT FLIPPED THE OTHER SIDE. WE WILL SEE WHAT KIND OF TONE WE GET OUT OF HIM HERE, BUT IF HE IS BASICALLY TALKING TO MORE MODERATING GROWTH RATES AND FEELING A LITTLE BIT BETTER ABOUT THOSE INVESTMENTS, THAT COULD BE A GOOD SIGN. AMAZON'S MUCH SIMPLER. WE EXPECT THEM TO COME OUT WITH A CONFIDENT TONE AROUND AI. THEY WILL NOT GET INTO THE GAME OF PROMOTING THEMSELVES OR EVEN SPEAKING TO HOW MUCH AI IS EXACT AND CONTRIBUTE IN, BUT I EXPECT THERE COMMENTARY TO REMAIN BULLISH ON AI IN GENERAL. ED: THAT IS AN INTERESTING POINT.
WHAT THEY SAID LAST QUARTER IS, FOR AWS, THE REVENUE RUN RATE WAS $100 BILLION K BUT SPECIFICALLY FOR AI, REVENUE RUN RATE IN THE WHAT I DOLLARS K THAT SEEMED LIKE AN OFF. IF YOU DO NOT EXPECT THEM TO OVER EXAGGERATE OR EXPAND ON THAT, WHAT DO THEY NEED TO SAY THIS QUARTER TO KEEP INVESTORS CONVINCED? BRAD: YEAH, I THINK PREVIOUSLY THEY HAD BEEN A LITTLE BIT BEHIND, CERTAINLY EVEN ON JUST THE ACQUISITION OF GPU'S NECESSARY TO TRAIN UP THEIR MODELS AND THEIR PLATFORM, SO I THINK MAYBE GIVE THEM A LITTLE MORE COLOR ON PROGRESS, FORWARD PROGRESS AND AGGRESSION THERE WILL BE SUPER HELPFUL. THE OTHER THING IS ONE OF THE THINGS THEY EMPHASIZE IS WHEN THEY SAY THINGS LIKE MULTIBILLION-DOLLAR RUN RATES FOR AI, THEY ARE REALLY TALKING ABOUT BROADER AI, WHICH THEY HAVE BEEN WORKING ON OR YEARS, VERY MUCH PREDATING -- PRE-DATING THE ONSET OF GENERATIVE AI LAST YEAR. IT IS A LITTLE HARD TO UNPACK, BUT THAT IS THE GENERAL COMMENTARY. ED: BRAD ERICKSON, GREAT TO HAVE YOU ON THE SHOW. COMING UP, FRANCE FACES AN INTERNET DISRUPTION.
MORE ON THE LATEST IF RESEARCHER ATTACKED AS OF THE PARIS OLYMPICS GETS UNDERWAY -- LATEST INFRASTRUCTURE ATTACK AS THE PARIS OLYMPIC'S GETS UNDERWAY. ALSO, STRONG EARNINGS, SECOND QUARTER ADJUSTED EARNINGS BEAT ESTIMATES. IT IS A NAME WHERE THERE CHIPS ARE MORE RELATED TO THE AUTOMOTIVE INDUSTRY, THEY HAVE A WIDER USE CASE, NOT SO MUCH AI, BUT IT IS A NAME WE TRACK ON THIS PROGRAM. GOOD RESULTS. THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: TIME FOR TALKING TECH. SHARES OF ALIBABA RISING, THE STOCK HITTING ITS HIGHEST IN TWO MONTHS IN ASIA TRADING, INVESTORS CHEERING THE E-COMMERCE GIANT AND ITS PLANS TO CHARGE A HIGHER SERVICE FEE FOR MERCHANTS. ALIBABA IS SET TO RAISE THEIR SOFTWARE SERVICE FEE TO 0.6%, WHICH WILL BOOST ITS CORE
MERCHANT REVENUE. PLUS, XIAOMI PLANS FOR AN EV EXPANSION. THEY PURCHASED A PLOT OF LAND IN BEIJING FOR 160 MILLION DOLLARS IN AN EFFORT TO EXPAND ITS ELECTRIC CAR PRODUCTION. XIAOMI FIRST ENTERED THE CAR MARKET IN MARCH AND ALREADY DELIVERED MORE THAN 40,000 VEHICLE SO FAR, WITH THE COMPANY ON TRACK TO DELIVER ITS INITIAL GOAL OF 100,000 CARS BY NOVEMBER. ANOTHER INFERENCE AFTER ATTACK ON FRANCE DURING THE -- ANOTHER INFRASTRUCTURE ATTACK ON FRANCE DURING THE OLYMPICS. THE OLYMPIC TELECOM PARTNERS AS CONNECTIONS INTO PARIS, AND THUS THE OLYMPICS, WERE NOT DISRUPTED.
FOR MORE, LET'S BRING IN BLOOMBERG'S REPORTER COME OUT IN PARIS THIS IS A STORY WHERE THERE ARE MANY QUESTIONS, BUT WHAT IS THE LATEST? BENOIT: YEAH, SO CLEARLY IT WAS A LARGE-SCALE ATTACK ON THE FIBER NETWORKS OVERNIGHT, BETWEEN 1:00 A.M. AND 3:00 A.M. THERE WERE NINE PLACES, WE ARE TOLD, CROSS FRANCE, WHERE LONG-DISTANCE FIBER-OPTIC CABLES WERE CUT. THIS IS THE HIGHWAY OF THE INTERNET, POWERING THE NETWORK, AND THANKS TO REDUNDANCIES, THERE WAS NO REAL IMPACT, JUST A BIT OF LATENCY FOR SOME CUSTOMERS. IT CLEARLY, THIS IS THE SCALE OF THE ATTACK THAT IS SORT OF WORRYING AUTHORITIES IN FRANCE. FOR THE TRAINS, THE TRAINS ARE
BACK TO NORMAL AS OF TODAY. IT HAS BEEN SLOWLY GOING BACK TO NORMAL OVER THE WEEKEND, SO SO FAR, NO REAL DISRUPTION OF THE OLYMPICS. IT HAS NOT BEEN DISRUPTING EITHER THE TRAIN OR THE INTERNET -- NEITHER THE TRAIN OR THE INTERNET OUTAGE HAVE BEEN AFFECTING THE OLYMPICS. BUT THE FACT THEY ARE TARGETED ACROSS FRANCE RATHER THAN PARIS, THAT IS SORT OF INTERESTING AND SURPRISING AUTHORITIES. ED: THE OUTSTANDING QUESTION, I
SUPPOSE, IS IS THERE A LINK BETWEEN THE RAIL NODES THAT WERE THE VICTIM OF A TAX LAST WEEK AND THE CUTTING OF FIBER-OPTIC CABLES OVERNIGHT? IS THERE ANY EVIDENCE THAT IS PART OF A WIDER AND COORDINATED ATTACK? BENOIT: SO THERE IS NO EVIDENCE THAT WE KNOW OF SO FAR. THERE ARE TWO SEPARATE INVESTIGATIONS THAT HAVE BEEN STARTED BY THE PARIS PROSECUTOR'S OFFICE. CLEARLY, WHAT IS SIMILAR IS THERE IS A GOOD LEVEL OF INTELLIGENCE ON WHERE, EXACTLY, TO ACT, ESPECIALLY ON THE TRAIN ATTACKS. THESE WERE IMPORTANT NODES IN THE NETWORK. BUT THERE IS NO PROOF OR INDICATION SO FAR OF WHO COULD HAVE DONE THIS. THE INTERIOR MINISTER THIS MORNING SAID THEY WERE ADVANCING ON THIS, BUT THERE IS NO INFORMATION ON WHO COULD HAVE DONE IT AND IF THERE IS A LINK BETWEEN THE TWO ATTACKS.
ED: AWAY FROM THE NEWS HEADLINES, IT WAS A WEEKEND WHERE EVERYONE WATCHING THE PROGRAM WAS GLUED TO THEIR TELEVISION FOR IT I REALLY ENJOYED THE RUGBY SEVENS -- CONGRATULATIONS TO FRANCE FOR AN INCREDIBLE PERFORMANCE PAY WHAT IS LIKE NOW IN FRANCE, WHAT IS IT LIKE -- THE EXPERIENCE OF BEING IN THE HOST CITY, THE HOST NATION? BENOIT: IT IS A GREAT ATMOSPHERE IN PARIS. IT IS A LOT OF PEOPLE FROM ACROSS FRANCE THAT ARE COMING TO SEE THE EVENTS, AND MANY TOURIST S, OF COURSE. THE WEATHER IS MUCH BETTER, NOW, SO THAT IS GREAT. THEY HAVE CHOSEN TO PUT THE EVENTS LOCATION IN THE MIDDLE OF THE CITY, AND IT TURNS OUT TO BE GREAT, SO SO FAR, TRANSPORT IN PARIS IS A FINE. THERE WAS NO SECURITY INCIDENT, THANKFULLY, SO FAR. ED:
"BLOOMBERG TECHNOLOGY'S BENOIT BERTHELOT, THANK YOU SO -- BLOOMBERG'S BENOIT BERTHELOT, THANK YOU SO MUCH. COMING UP, WE WILL BE JOINED BY KRISTIN SMITH OF THE BLOCKCHAIN ASSOCIATION. THAT IS ALL COMING UP NEXT. THIS IS "BLOOMBERG TECHNOLOGY." ♪
ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." ED LUDLOW IN NEW YORK CITY. A QUICK CHECK IN ON THE MARKETS. WE KNOW THE STORY THIS WEEK. IT IS A STORY ABOUT FOUR OF THE BIGGEST TECHNOLOGY NAMES REPORTING EARNINGS. THE NASDAQ 100 HAS FLATTENED THE SESSION. THE TOP -- THE CONTEXT IT IT IS COMING OF THREE WEEKS OF WEEKLY DECLINES. A LOT OF TALK ABOUT HOW CLOSE
WE ARE TO A TECHNICAL CORRECTION. THERE IS A LOT AT STAKE, DEPENDING HOW THOSE REPORTS GO. IN THE MOMENT, ONE ASSET CLASS THAT IS IN FOCUS IS CRYPTO. BITCOIN, BELOW 68,000 U.S. DOLLARS PER TOKEN. OTHER NAMES, MINORS, HAD BEEN INTERESTINGLY HI, NOW LOWER. BITCOIN TOUCHED THE HIGHEST LEVEL SINCE MID JUNE AFTER DONALD TRUMP EXPANDED HIS PRO-CRYPTO AGENDA AT BITCOIN 2024 OVER THE WEEKEND. HERE HE IS SPEAKING AT THE
CONFERENCE. MR. TRUMP: THIS AFTERNOON, I'M LAYING OUT MY PLAN TO ENSURE THE UNITED STATES BELIEVED BE THE CRYPTO CAPITAL OF THE PLANET AND THE BITCOIN SUPERPOWER OF THE WORLD, AND WE WILL GET IT DONE. ED: LET'S BREAK IT DOWN WITH BLOOMBERG INTELLIGENCE ANALYST JAMES SEAVER WHO WAS AT THE CONFERENCE. YOU ARE LOOKING FRESH AFTER WHAT I IMAGINE WAS LATE NIGHTS AND WILD AFTERNOONS IN NASHVILLE. WE WILL GET TO TRUMP. WHAT WAS IT LIKE, HOW WAS YOUR WEEKEND? JAMES: THERE WAS A LOT OF EXCITEMENT IN THE AIR. I HAVE BEEN TO THE CONFERENCE THE LAST FEW YEARS. I WILL SAY THIS FEELS -- IT
MAKES SENSE. WE HAVE THE BITCOIN ETF'S THAT LAUNCHED IN JANUARY. THERE ARE BIG BANKS AND BIG INSTITUTIONAL PLAYERS BUT IF THEY ARE NOT INVOLVED IN BUT COME THAT ARE INTERESTED.
I INTERVIEWED ROBBIE NICHE MAKE FROM BLACKROCK. STATE STREET WAS THERE, FIDELITY WAS THERE, YOU NAME IT. THERE IS A LOT OF INSTITUTIONAL BIG TIME PLAYERS THAT ARE NOW DIPPING THEIR TOE OR NOT FULLY JUMPED INTO THE WATER ON THE BITCOIN SIDE. I WILL SAY IT HAS BECOME MORE MATURE. IT WAS A LOT OF EXCITEMENT, AND A LOT OF FUN AND PEOPLE WERE AMPED UP TO HAVE TRUMP THERE WERE OVER 10 OTHER CONGRESSMEN AND WOMEN AT THE CONFERENCE. IT WAS ALMOST POLITICAL IN A WAY TOO. ED:
THE HEADLINE IS THAT TRUMP HAS PROMISED TO MAKE BITCOIN GREAT AGAIN, WHICH IS GOOD FOR HEADLINES. AS SOUNDBITES GO. BUT ALSO TALKED ABOUT SEC CHAIR GARY GENSLER SAYING HE WOULD REPLACE HIM IF HE IS REELECTED, WITH SOMEBODY THAT LOVES CRYPTO. HOW DID THAT GO DOWN WITH THE INDUSTRY, INVESTORS, THE COMMUNITY AROUND BITCOIN? JAMES: HE GAVE A REALLY LONG RAMBLING SPEECH, AS TRUMP OFTEN DOES. THE ONE THING THAT GOT THE
CROWD THE LOUDEST, BY FAR, WAS HIM SAYING ON DAY ONE, I WILL FIRE GARY GENSLER. I'M PRETTY SURE HE DOES NOT TECHNICALLY HAVE THE ABILITY TO DO THAT. THAT IS STANDARD WHEN A NEW PRESIDENT COMES IN, THEY TRY TO TURN IT OVER AND GET THE PEOPLE THEY WANT AT THE HEADS OF AGENCIES. IT IS A TALKING POINT AND SOMETHING PEOPLE WANT. HE TALKED ABOUT STOPPING ELIZABETH WARREN AND HER "GOONS." A BUNCH OF OTHER THINGS OUT THERE THEY WANTED TO HEAR.
ACTIONS SPEAK LOUDER THAN WORDS. THEY DEFINITELY LIKED IT. IT WAS CERTAINLY DIFFERENT FROM HIS TYPICAL TRUMP SPEECH AUDIENCE. BUT HE HAD THE POINTS HE WANTED TO HIT. BIG WINNERS SEEM TO LOVE IT. YEAH. ED: JAMES SEYFFART, BLOOMBERG INTELLIGENCE WHO WAS THERE AT BITCOIN 2024, THANK YOU. THE U.S.
ELECTION LOOMS, BLOOMBERG HAS A BIG TAKE ON TRUMP'S OWN JOURNEY WITH CRYPTO GOING FROM SKEPTIC TO BITCOIN CHEERLEADER. I'M DELIGHTED TO BRING IN KRISTIN SMITH, CEO OF THE BLOCKCHAIN ASSOCIATION, A DC-BASED TRADE ASSOCIATION. YOU REPRESENT AROUND 100 OF THE INDUSTRY'S LEADING COMPANIES AND YOU ARE QUOTED IN THAT BIG TAKE. FOR ME, THAT IS THE STORY. IT WAS NOT LONG AGO THAT FORMER PRESIDENT TRUMP WAS TALKING ABOUT THE CRIMINALITY ASSOCIATED WITH CRYPTO, AND BLOCKCHAIN. HIS DOUBTS ABOUT IT, TO NOW BEING ALL OUT. HAS THAT CHANGED THE TIDE FOR YOUR INDUSTRY? KRISTIN: NOBODY EVER GOES FROM BEING PRO CRYPTO TO ANTI-CRYPTO. IT IS ONLY THE OTHER WAY AROUND.
I THINK THAT IS WHAT WE SAW WITH DONALD TRUMP. IT IS WE ARE SEEING WITH FOLKS ON BOTH SIDES OF THE AISLE. WHO ARE IN CONGRESS TODAY AND WHO ARE RUNNING FOR CONGRESS RIGHT NOW. I THINK THE REASON FOR THAT IS
THAT WHEN YOU DON'T KNOW A LOT ABOUT CRYPTO, YOU OFTEN HAS -- YOU OFTEN HAVE MISCONCEPTIONS ABOUT HOW IT WORKS. BUT AS YOU GAIN THAT KNOWLEDGE AND YOU BEGIN TO UNDERSTAND THE POWER OF DECENTRALIZED TECHNOLOGY, YOU REALIZE WHAT TENS OF MILLIONS OF AMERICANS KNOW IS THAT THIS IS SOMETHING THAT COULD BE THE FOUNDATION FOR A NEW FINANCIAL SERVICES SYSTEM, OR AN ALTERNATIVE TO THE BIG TECH ECOSYSTEM, IN A WAY THAT IS BETTER FOR USERS AND CONSUMERS. THERE IS A REAL REASON PEOPLE LIKE THIS.
AND WHAT WE HAVE SEEN AS A RESULT OF THIS IS THAT IT IS TRANSLATING INTO THE ELECTIONS. THE CRYPTO VOTER IS REAL, AND THE CRYPTO ADVOCATE IS STRONG. AND I THINK THIS IS SOMETHING WE WILL CONTINUE TO SEE TALKED ABOUT HEADING INTO THE ELECTIONS. ED: WE MENTIONED IT, BUT I WANTED TO PLAY THE SOUNDBITE. THIS IS FORMER PRESIDENT TRUMP
TALKING ABOUT THE SEC AND GARY GENSLER. MR. TRUMP: ON DAY ONE, I WILL FIRE GARY GENSLER. I WILL APPOINT A NEW SEC CHAIRMAN WHO BELIEVES AMERICA SHOULD BUILD THE FUTURE, NOT BLOCK THE FUTURE. I WILL IMMEDIATELY APPOINT A BITCOIN AND CRYPTO PRESIDENTIAL ADVISORY COUNCIL. ED:
WHAT IS THE BLOCKCHAIN ASSOCIATION AND THE GROUPS YOU REPRESENT REACTION TO THAT STATEMENT? KRISTIN: I THINK PEOPLE ARE INCREDIBLY EXCITED BY THAT STATEMENT. WE HAVE HAD BOTH AT THE BLOCKCHAIN ASSOCIATION AND WHEN -- AND WITHIN OUR MEMBER COMPANIES, A LOT OF OUTRAGE OVER THE LAST COUPLE YEARS TO THE SEC, TO HAVE A REASONABLE CONVERSATION ABOUT HOW TO BRING REGULATION TO THE SPACE. AS A RESULT, GANSLER HAS COME BACK WITH ENFORCEMENT ACTION AFTER ENFORCEMENT ACTION AND IS CAUSING THE -- COSTING THE INDUSTRY LEGAL FEES TO DEAL WITH CHALLENGES FROM THE SEC RIGHT NOW. THIS IS ABSOLUTELY RIDICULOUS. THIS IS NOT HOW THINGS SHOULD BE DONE. AND PEOPLE ARE ANGRY.
I THINK PEOPLE ARE VERY EXCITED THAT TRUMP HAS COME OUT THIS STRONG. I THINK IT IS INTERESTING IS WE ARE ALSO HEARING A LOT OF CONVERSATIONS ON THE DEMOCRATIC SIDE OF THE AISLE. WE HAVE 14 MEMBERS OF CONGRESS WROTE A LETTER TO THE D&C, URGING THEM TO INCLUDE SOMETHING PRO CRYPTO IN THE PLATFORM. THERE IS A LOT OF OUTREACH TO THE NEW NOMINEE, PRESUMPTIVE NOMINEE, ON THE DEMOCRATIC SIDE, HARRIS, TO SEE IF SHE CAN COME OUT AND DO SOMETHING PRO CRYPTO AS WELL.
THIS IS NOT A PARTISAN ISSUE, BUT I WOULD SAY TRUMP HAD A VERY STRONG SHOWING OVER THE WEEKEND, AND PEOPLE WERE INCREDIBLY ENCOURAGED BY THE ACKNOWLEDGMENT OF THE DIFFICULT TIME WE HAVE HAD OVER THE PAST THREE AND A HALF YEARS WITH GARY GENSLER. ED: ON THE VICE PRESIDENT, THERE HAD BEEN REPORTS THAT SHE CONSIDERED APPEARING OUT AND SPEAKING AT BITCOIN 2024, AND THEN DID NOT DO SO. HAS THE BLOCKCHAIN ASSOCIATION HAD ANY CONVERSATION OR ENGAGEMENT WITH HER CAMPAIGN TEAM? AND WOULD YOU HOPE TO DO SO? KRISTIN: WE ABSOLUTELY HOPE TO DO SO. WE HAVE OUTREACH BOTH TO HER GOVERNMENT TEAM AND HER CAMPAIGN TEAM RIGHT NOW. I KNOW SHE HAS HAD CONVERSATIONS WITH SOME OF THE LEADERS WITHIN THE INDUSTRY ALREADY. I THINK THERE IS A LOT OF HOPE. I THINK WHAT IS INTERESTING IS
TYPICALLY, WHEN DONALD TRUMP COMES OUT IN SUPPORT OF A POLICY, THE DEMOCRATIC PARTY RUNS THE OTHER WAY. WHAT WE SEE HERE IS A COMPETITION FOR WHICH PARTY CAN GAIN THAT VALUABLE CRYPTO VOTER. THERE IS A PULL FROM A COUPLE MONTHS AGO, I THINK IT IS STILL RELEVANT, THAT ONE IN FIVE VOTERS IN SWING STATES CONSIDERS CRYPTOCURRENCY AN IMPORTANT ISSUE HEADING INTO THE ELECTION.
BOTH SIDES ARE SEEING THOSE NUMBERS, AND THAT THERE IS A REALIZATION THAT THERE IS NO UPSIDE TO BEING ANTI-CRYPTO. THAT REALLY BOTH PARTIES NEED TO BE THOUGHTFUL ABOUT HOW TO APPROACH THIS, SO WE CAN GET THE RIGHT POLICY IN PLACE, SO THAT THOSE VOTERS WILL GO TO THE POLLS BUT MORE IMPORTANTLY, THAT WE WILL BE ABLE TO KEEP THE INDUSTRY AND THE COMMUNITY THRIVING IN THE UNITED STATES. ED: KRISTIN SMITH, CEO OF THE BLOCKCHAIN ASSOCIATION, THANK YOU. THE U.S. JUSTICE DEPARTMENT SAYS TIKTOK COLLECTED USER'S INFORMATION ON SENSITIVE TOPICS, MAKING IT A NATIONAL SECURITY THREAT. JUSTIFIES A LAW TO BAN THE APP IN THE U.S., IF BYTEDANCE DOES
NOT DIVEST. LET'S START BY ASKING WHAT IS NEW HERE AND WHAT IS THE LATEST? MIKE: THERE ARE A KEY THREE POINTS THAT EMERGE IN THIS JUSTICE DEPARTMENT FILING CARE THAT WAS THE FIRST DETAILED RESPONSE TO TIKTOK'S EFFORT TO OVERTURN THIS LAW THAT WAS PASSED IN APRIL AND SIGNED BY PRESIDENT JOE BIDEN. IT REQUIRES THE COMPANY TO BE SOLD BY ITS CHINESE OWNERS BY JANUARY 19. THE GOVERNMENT HAS BEEN ON THE HOOK TO DEMONSTRATE FURTHER IN COURT WHY THAT IS NECESSARY. THERE ARE THREE KEY POINTS THAT EMERGED. ONE, YOU HAD AT THE TOP, DATA
COLLECTION. THE COMPANY COLLECTS A LOT OF DATA ON ITS 170 MILLION USERS. THAT INCLUDE PRIVATE MESSAGES, VIEWING HABITS, EVEN USERS LOCATION. THAT IS INFORMATION THAT IS NOT ADEQUATELY WALLED OFF FROM CHINA AND FROM CHINA'S GOVERNMENT. TWO, WE ALSO SEE THE GOVERNMENT RAISING THE FLAG OF CENSORSHIP. IT SAYS THAT CHINA COULD STEP INTO EXERT CONTROL OVER CONTENT ON THE PLATFORM. EITHER CENSORING OR PROMOTING
DIFFERENT KINDS OF CONTENT THAT COULD SUIT ITS GOVERNMENT'S INTERESTS. THREE, WE SAW THE GOVERNMENT TAKE ON THE WHOLE QUESTION OF FREE SPEECH RIGHTS THAT TIKTOK HAS BEEN RAISING AS IT CHALLENGES THIS LAW. WE ARE SEEING THAT TIKTOK IS SAYING THIS IS UNFAIR. THE U.S. GOVERNMENT RESPONDED SAYING LOOK, FREE SPEECH RIGHTS DO NOT APPLY WHEN THE ALGORITHM AND DATA ARE BEING COLLECTED AND OWNED BY A FOREIGN POWER. THAT IS REALLY ONE OF THE KEY ISSUES AT HAND. ED: WE WILL SHOW THE TIKTOK RESPONSE.
BUT VERY QUICKLY, SUMMARIZE IT FOR US. MIKE: IN BRIEF, THEY ARE DOUBLING DOWN ON THEIR RESPONSE THAT THIS LAW VIOLATES FREE SPEECH RIGHTS, AND IT INSISTS THE GOVERNMENT HAS YET TO SHOW ADEQUATE EVIDENCE OF THIS NATIONAL SECURITY THREAT THAT LAWMAKERS TALKED ABOUT, BUT THE JUSTICE DEPARTMENT TALKED ABOUT IN THEIR BRIEFING FILED ON FRIDAY. AND TO BE FAIR TO TIKTOK'S POINT, SO MUCH OF THAT FILING FROM LATE FRIDAY WAS REDACTED. ONLY THE JUDGE IN THE CASE WILL SEE THOSE ARGUMENTS MADE ON NATIONAL SECURITY GROUNDS, BECAUSE THAT INFORMATION REMAINS CLASSIFIED. ED: MIKE SHEPPARD, THANK YOU. COMING UP, THE R-RATED OPENING WEEKEND RECORD HAS BEEN SMASHED BY DEADPOOL AND WOLVERINE. DETAILS ON DISNEY'S BOX OFFICE DOMINATION IS NEXT. THIS IS "BLOOMBERG TECHNOLOGY."
IT IS GOING VIRAL. DOUG WILL HAS DOMINATED THE WEEKEND BOX OFFICE, BRINGING IN $205 MILLION, MAKING THE BEST EVER OPENING FOR AN R-RATED FILM. HANNAH MILLER JOINS ME ON SET. WHAT IS SO ASTONISHING IS THAT IS JUST THE U.S. AND CANADA. A GLOBAL HIT BUT THE NUMBERS
ARE AHEAD OF FORECASTS HERE. GIVE ME THE SIZE AND SCOPE AGAINST EVERYTHING ELSE I COULD HAVE WATCHED. HANNAH: IT IS SMASHING RECORDS GLOBALLY FOR R-RATED MOVIES. PEOPLE ARE FLOCKING TO THIS FILM. THERE WERE HIGH EXPECTATIONS FROM THE GET-GO.
IT HAS EXCEEDED THOSE EXPECTATIONS IN TERMS OF BOX OFFICE PERFORMANCE. THIS IS HUGE FOR THE FILM INDUSTRY AND STRUGGLING MOVIE THEATER CHAINS. ED: I HAVE NOT SEEN IT. HANNAH: NOT YET. ED: SENIOR PRODUCER JACKIE LOPEZ SAYS THE SOUNDTRACK IS FIRE. THAT'S INTERESTING. DEADPOOL WON, GREAT. DEADPOOL TWO, MET. BUT FOR BUSINESS -- BUT FOR
DISNEY, THIS IS IMPORTANT. HANNAH: I THINK SO TOO. WE SAW A HUGE INFLUX OF MARVEL FILMS THAT UNDERPERFORMED. THEY TOOK A LITTLE BREAK, THIS ONE CAME OUT. IT IS PUTTING MARVEL AND DISNEY BACK ON TOP AGAIN WHEN IT COMES TO BOX OFFICE PERFORMANCE. ED: WHAT ELSE WAS IT UP AGAINST? THAT IS THE BIG QUESTION. YOU HAVE SOMETHING LIKE
TWISTER, IT HAD ALREADY BEEN OUT. HANNAH: WITH TWISTERS, WE THINK IT WILL TAKE AWAY AUDIENCES FROM TWISTERS, ESPECIALLY FOR IMAX SHOWINGS. THAT HAS BEEN A HUGE DRAW FOR TWISTERS. THERE WILL BE IMAX SHOWINGS FOR DEADPOOL AND WOLVERINE. WE THINK THIS WILL CONTINUE TO DOMINATE.
INSIDE OUT TWO, WE SAW THAT DROP. THIS IS THE FILM EVERYBODY WANTS TO SEE RIGHT NOW. ED: HANNAH MILLER IN NEW YORK ON THAT NEW ENTERTAINMENT BEAT, WHAT A GREAT GIG. ANOTHER BIG STORY, GOOGLE STREAMING MUSIC PLAYER HAS LAGGED BEHIND SPOTIFY, APPLE AND AMAZON IN U.S. MARKET SHARE. THINGS ARE CHANGING FOR YOUTUBE MUSIC.
AUSTIN CAR HAS A FEW THOUGHTS ON THAT IN TODAY'S TECH DAILY, BREAKING HEADLINE NEWS OF WHICH IS YOU SPEND $1200 A YEAR ON GOOGLE SUBSCRIPTIONS WHICH IS WILD. BUT AGAIN, YOUTUBE MUSIC IS NOT ONE I USE EITHER. WHAT HAVE YOU FOUND OUT? AUSTIN: IT'S INTERESTING, I FOUND OUT THAT I HAVE BEEN PAYING FOR YOUTUBE MUSIC THIS WHOLE TIME, INCLUDED IN MY YOUTUBE PREMIUM SUBSCRIPTION.
LIKE YOU, I HAVE NEVER THOUGHT OF YOUTUBE AS A MUSIC SERVICE. I SUBSCRIBE TO SPOTIFY, A LOT OF MY FRIENDS USE APPLE MUSIC OR AMAZON SERVICES INCLUDED IN PRIME. WHAT I FOUND IS THEY PUT TOGETHER THIS UNIQUE SERVICE THAT IS DIFFERENTIATED BY VIDEO. YOU GET ACCESS TO MUSIC VIDEOS, LIVE CONCERTS, PODCAST MATERIAL THAT REGULAR PEOPLE UPLOAD TO THE VIDEO WEBSITE, AND THAT INFLUENCES YOUR MUSIC ALGORITHM AND SONG RECOMMENDATIONS YOU GET. ALPHABET LAST WEEK WAS SAYING HOW MUCH SUBSCRIPTION GROWTH THEY ARE SEEING. THAT IS ONE OF THE DRIVERS THEY ARE SEEING, FROM MUSIC. THIS YEAR, THEY SURPASSED
HUNDRED MILLION SUBSCRIBERS FOR YOUTUBE PREMIUM AND YOUTUBE MUSIC. WE ARE SEEING A HUGE UPTICK. ONE OF THE AREAS OF GROWTH IN THE MUSIC WHERE IT IS APPLE MUSIC, SOME OF THE OTHER PROVIDERS ARE LAGGING RIGHT NOW. ED: WE ARE SHOWING PICTURES OF WHAT YOU TWO MUSIC LOOKS LIKE PAT I KNEW LITTLE ABOUT YOUTUBE MUSIC. IT SEEMS LIKE SOMETHING SIMILAR OR AKIN TO SPOTIFY. AUSTIN: IT IS A LITTLE BIT SIMILAR IN THE SENSE THAT THEY HAVE A LOT OF THE STREAMING TRACKS. IT IS DIFFERENT IS THAT IT IS
CONNECTED TO THE DATA THAT IS TAKEN FROM USING THE YOUTUBE VIDEO WEBSITE. IF YOU ARE SEARCHING SOMETHING FOR YOUTUBE AND YOU COME ACROSS A LATE-NIGHT TALK SHOW WITH A PARTICULAR ARTIST, LET'S SAY TALKING TO CONAN O'BRIEN, THAT WILL INFLUENCE YOUR SONG RECOMMENDATIONS ON YOUTUBE MUSIC. SUDDENLY YOU MIGHT SEE MORE BONO. IT IS THIS WEIRD AMALGAMATION. THAT IS ONE THING THAT YOUTUBE HAS ALWAYS STRUGGLED WITH. WHAT IS IDENTITY? IT IS THIS MASSIVE PLATFORM BUT THEY HAVE TRIED TO CARVE OUT SEPARATE BRANDS.
THEY HAVE YOUTUBE TV WHICH IS PAID AT TELEVISION AND THIS IS YOUTUBE MUSIC, A STANDALONE APP. IT IS TRYING TO TAKE ADVANTAGE OF THAT SCALE AND DATA THAT THEY HAVE COLLECTED OVER THE YEARS, FROM VIEWING HABITS. ED: VIEWING HABITS, YOU HAVE TO ACCEPT THAT THE CONSUMER HAS DIFFERENT HABITS AND MARKETS AROUND THE WORLD. WHERE IS THE GROWTH FOR YOUTUBE MUSIC COMING FROM? NOT NECESSARILY HERE IN NORTH AMERICA. AUSTIN: IT IS COMING FROM EMERGING
MARKETS WHERE YOUTUBE IS GIGANTIC, JUST THE VIDEO WEBSITE IS GIGANTIC. I THINK THAT IS IN THE KEEPING THAT GOOGLE IS LEANING INTO. OF THE 100 MILLION SUBSCRIBERS FOR YOUTUBE SUBSCRIPTIONS, THEY DON'T BREAK DOWN THE DIFFERENCE BETWEEN YOUTUBE'S AD FREE VIDEO SITE, AND A MUSIC PLAYER. THE WAY THEY HAVE GROWN BOTH OF THEM IS BY MERGING THEM INTO THIS ALL-IN-ONE PACKAGE THAT YOU CAN GET, JUST CALLED THE YOUTUBE PREMIUM APP. THE THING IS, FOR ME, I SUBSCRIBE TO YOUTUBE TV, GOOGLE CLOUD STORAGE, YOUTUBE PREMIUM. BUT I STILL HAVE NOT BROUGHT MYSELF TO USE THE MUSIC PLAYER.
I STILL SCRIBE TO SPOTIFY. USING IT THIS PAST WEEK, IT IS THE INTERESTING. IT'S DIFFERENT FROM WHAT YOU SEE FROM APPLE AND SPOTIFY AND AMAZON. I THINK IS WORTH A GO IF YOU HAVE NOT TRIED IT. ED: AUSTIN CARRR, THANK YOU VERY MUCH.
WE TAKE A LOOK AT MOBILE VIDEO EDITING PLATFORM CAP CUT, WHICH IS SEEING GAINING POPULARITY. THIS GROWTH COULD BE THREATENED BY THE POTENTIAL TIKTOK BAND AS CAPCUT IS OWNED BY THE SAME PARENT COMPANY, BYTEDANCE. THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: MOBILE VIDEO EDITING APP CAPCUT IS GAINING POPULARITY, PUTTING PRESSURE ON LONGTIME CREATIVE SOFTWARE LEADERS LIKE ADOBE. CAPCUT IS OWNED BY BYTEDANCE, TIKTOK'S CHINESE PARENT COMPANY. MEANING THE THREAT TO BAN TIKTOK WITH MARK THE END FOR CAPCUT IN THE U.S. AS WELL.
LET'S BRING IN OUR CORRESPONDENT WHO HAS BEEN WRITING ABOUT THIS. STARTING IN 2020 PANDEMIC, THE USAGE OF CAPCUT HAS ROCKETED AND TAKEN IT TO A NEW LEVEL. >> YEP. ADOBE, MAKER OF CREATIVE SOFTWARE'S LIKE PREMIER AND
OTHERS, THEY HAVE HOPED TO GET A PIECE OF THIS CASUAL CONTENT CREATED MARKET. CAPCUT HAS BEEN ABLE TO GO CRAZY WITH THAT. THEY ARE THE SAME COMPANY AS -- THEY ARE OWNED BY THIS IN COMPANY IS TIKTOK. YOU SEE A CERTAIN VIDEO FORMAT,
YOU CAN BE LIKE, LET ME RE-CREATE THIS. IT IS A FORMAT OF EDITING THAT IS SIMILAR THEN WHAT EXISTED BEFORE IT. IT HAS PICKED UP 300 MILLION MONTHLY ACTIVE USERS IN A WAY THAT IS PRETTY WILD. ED: THE RISK IS BY ASSOCIATION AND SAME PARENT COMPANY, TIKTOK'S FATE, CAPCUT'S IS CLOSELY TIED TO IT. BRODY: THAT'S RIGHT. THE BILL, WE HAD A SENIOR LAWMAKER CONFIRMED TO US YES, THIS WOULD INCLUDE CAPCUT. CAPCUT IS OWNED BY BYTEDANCE. THEY SHARE OFFICE SPACE WITH TIKTOK IN L.A.
ALL OF THE SAME RISKS APPLY. WILL IT BE HARD TO FIND SOMEONE TO BUY CAPCUT? WOULD BYTEDANCE BE OPEN TO THAT? THAT IS NOT CLEAR. WHAT IS CLEAR IS WE HAVE A LOT OF USERS THAT WOULD PROBABLY NOT HAPPY IF THIS APP WENT POOF.
ED: INTERESTING FOR ADOBE. WHAT THEY HAVE STRUGGLED WITH, AND FOR CAPCUT, IT WOULD TAKE THE LEGS OUT FROM UNDERNEATH THEM IN THIS BATTLE. BRODY: IT IS A FUNNY THING FOR ADOBE. YOU MIGHT THINK, IF CAPCUT GOES
AWAY, IT'S GOOD FOR THEM. NOT REALLY. BECAUSE TIKTOK IS ALSO A PLACE WHERE CONTENT CREATION IS GOOD FOR ABILITY. THE MORE SOCIAL MEDIA IS, THE MORE YOU NEED CONTENT CREATION APPS. IT IS DARNED IF YOU DO, DARNED IF YOU DON'T WITH ADOBE. ED: IS CAPCUT MAKING ANY MONEY? BRODY: $5 MILLION A YEAR ACCORDING TO ESTIMATES.
THAT IS A LOT IN TERMS OF OCCURRING REVENUE AT THIS STAGE IN THE APP'S LIFE HERE THAT IS NO JOKE. ED: BRODY FORD BRINGING THIS NEW NAME TO US, BUT GOING TO THE STORY AND LOOKING AT THE CHART, THE GROWTH RELATIVE TO THE COMPETITION IS ABSOLUTELY WILD. WHAT ARE YOU USING RIGHT NOW? THERE IS A FRUSTRATION THERE, THAT TEXT TO VIDEO'S IN PARTICULAR, NOT WHERE WE WANTED TO BE. IT HAS LIMITATIONS. THAT IS PART OF THE ADOBE STORY AS WELL. BRODY: ABSOLUTELY. I THINK THE WHOLE IDEA THAT TEXT TO VIDEO IS WHAT IS GOING TO DESTROY THE INCUMBENT, I THINK THAT IS QUITE A BIT FURTHER OUT. CAPCUT IS THIS INTERESTING
THING WHERE IT IS SOMEWHERE IN BETWEEN. IT USES A LOT OF, TEMPLATES AND BETWEEN. I USE TO MAKE DOCUMENTARIES BEFORE I BECAME A PRINT JOURNALIST. A LOT OF MY FRIENDS FROM THAT ERA ARE STARTING TO SWITCH OFF OF APPS LIKE ADOBE. THEY ARE STARTING TO GO TO
THESE SIMILAR THINGS. I THINK IT IS HAPPENING ACROSS THE INDUSTRY. THE TRUE TEXT TO VIDEO AI, IT IS OUT THERE, IT IS COMING, BUT WHAT IS HAPPENING TODAY IS THE SYMBOL OR TOOLS. ED: YOU GO BACK TO THE IDEA WHERE IF YOU ARE A CREATOR ON TIKTOK, WHY WOULD YOU NOT YOU SOMETHING AND I WILL GUESS LIKE CAPCUT? BRODY FORD, CONSTANTLY UNEARTHING THINGS I DID NOT KNOW ABOUT. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." STAY WITH US THIS WEEK. WE WILL CONTINUE TO BREAK DOWN
THE BIGGEST TECHNOLOGY EARNINGS. WHAT A WEEK IT IS IN THAT CONTEXT. DON'T FORGET TO CHECK OUT OUR PODCAST. YOU CAN FIND ON THE TERMINAL AND ONLINE AT APPLE, SPOTIFY, I HARD, AND ALL OF THE BLOOMBERG PLATFORM SPARED FROM NEW YORK CITY, THIS IS "BLOOMBERG TECHNOLOGY."
2024-07-31 00:19
