Alphabet Fights Google Break Up Effort, Netflix’s Appeal | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE, THIS IS BLOOMBERG TECHNOLOGY. GOOGLE HAS BACK TO COURT TO TAKE ON THE DEPARTMENT OF JUSTICE. PLUS, NETFLIX STANDS OUT. WHY WALL STREET SEES THE STOCK AS POSSESSION PROOF.
AND WHY THERE WILL BE CHALLENGES IN CHINA FROM CHIPS. WE CHECK IN ON MARKETS, WHICH ARE UNDER PRESSURE. THE NASDAQ BEARS THE BRUNT, OFF BY MORE THAN 2.3% ON THE DAY.
WE ARE WORRIED ABOUT THE FUTURE OF JAY POWELL AND THE FED AND WE SEE THE IMPACT ON THE MAGNIFICENT SEVEN. NOT ON CRYPTO. WE SEE BITCOIN BOUNCE AS GOLD GETS THAT DESIRE TO GET INTO A HAVEN TRADE.
SO DO THE SHORTER END OF THE TREASURIES, BUT BITCOIN THE HIGHEST WE HAVE SEEN SINCE THE BEGINNING OF MARCH. TESLA ON THE DOWNSIDE. ONE OF THE KEY CONTRIBUTORS AND TURNS OF POINTS, NVIDIA IS FALLING BUT TESLA -- WE WILL DIG INTO IT AHEAD OF ALL-IMPORTANT EARNINGS TUESDAY. WE GOT EARNINGS, BUT WE ALREADY HAVE A SENTIMENT CHECK ON WHAT SEEMS TO BE RESILIENT IN THE FACE OF MACRO PRESSURE, NETFLIX UP 2.8%. BUT LET'S GET TO THE WEIGHT THE MAG SEVEN IS FEELING TODAY. IT SEEMS TO BE A MACRO ONE, BUT THERE ARE STANDOUTS WHEN IT COMES TO EARNINGS.
>> THANKS FOR HAVING ME. THERE IS A LOT OF UNCERTAINTY OUT THERE AND THE NEWS SURROUNDING -- IS POWELL POTENTIALLY AT RISK? THAT IS ADDING TO THE LEVEL OF UNCERTAINTY. THERE ARE SO MUCH POLICY UNCERTAINTY AND A BROADER SENSE THAT MAYBE THE U.S.
IS NOT THE SAFE HAVEN ECONOMY AND HAS BEEN VIEWED AS FOR DECADES, SO THAT IS A MASSIVE SHIFT OUT THERE AND CAUSING A LOT OF UNCERTAINTY. CAROLINE: NETFLIX IS FROM AN EQUITY PERSPECTIVE DEEMED A HAVEN. WE WILL HEAR FROM SO MANY CEOS THIS WEEK, WHETHER SOME THAT HAVE TO FACE THE COURT BUT ALSO HAVE TO FACE EARNINGS. WE KNOW WE ARE GOING TO HEAR FROM THE CEO OF GOOGLE IN THAT CAPACITY BUT ALSO YOU HAVE IBM AND TEXAS INSTRUMENTS. THERE IS A LOT WE CAN TAKE A
GAUGE OF >> NETFLIX IS AN ANOMALY COMPARED TO OTHER NAMES YOU MENTIONED, NOT AS SUBJECT TO TARIFF RISK AS COMPANIES THAT HAVE BEEN PROVIDING A LOT OF THE SELLING THIS YEAR. IT IS ALSO SEEN AS A SESSION RESISTANT COMPANY GIVEN THE IDEA THAT IF ARE PULLING BACK, CONSUMERS, THEY ARE NOT LIKELY TO CUT NETFLIX SUBSCRIPTIONS THE WAY THEY MIGHT PULL BACK ON OTHER DISCRETIONARY SPENDING. SO WITH OFFENSIVE AND DEFENSIVE CHARACTERISTICS, OBVIOUSLY A PRETTY POSITIVE EARNINGS REPORT AND THE STOCK HAS BEEN DOING WELL ESPECIALLY RELEVANT TO THE REST OF THE MAG SEVEN AND THE BROADER MARKET. CAROLINE: AT THE MOMENT, ONLY FIVE NAMES ON THE NASDAQ 100 ARE IN THE GREEN. THANK YOU. LET'S GET MORE ON THE TECH MARKET SELL OFF.
SCOTT LANDIS IS WITH US. AT THIS MOMENT, WITHIN THIS UNCERTAINTY FROM A MACRO PERSPECTIVE, DO YOU WANT TO BE BUYING INTO THE SWEETNESS IN TECH? >> I THINK YOU DO. YOU CAN START PUTTING SOME MONEY TO WORK. IT IS PROBABLY NOT THE TIME FOR CHIPS BECAUSE OF TARIFF UNCERTAINTY BUT SOMETHING LIKE AN EQUAL WEIGHT TECH PLAY, ON THE THEMES WITH AI -- THE STARTING PLACE BEFORE THE TARIFF STUFF -- WE WERE TALKING ABOUT AI BECAUSE IT WAS A BIG DEAL AND WILL CONTINUE TO BE. IT IS BEING OVERSHADOWED CURRENTLY, SO THIS IS A GOOD TIME TO START PUTTING MONEY TO WORK TOWARD THAT SECTOR. CAROLINE:
IF IT IS NOT CHIPS, HOW ARE YOU THINKING ABOUT AI OPPORTUNITY? SCOTT: IT IS MORE NUANCED RIGHT NOW. YOU THINK ABOUT THE AI INVESTMENTS AS A COUPLE DIFFERENT PHASES. WE HAVE BEEN IN THE INFRASTRUCTURE PHASE AND THAT HAS DOMINATED BY CHIPS AND THE HARDWARE KIND OF THING, LIKE ROUTERS AND THE INTERNET CYCLE.
WE ARE IN THE PREWITT STAGE WITH AI. PROVING TO THE MARKET THAT I AM USING THIS STUFF AND I KNOW HOW TO MAKE IT AND DRIVE PRODUCTIVITY AND PROCESSES AND GET HIGHER MARGINS, WHICH IS THE NAME OF THE GAME FOR THIS. FINDING COMPANIES THAT CAN HELP DELIVER THAT TYPE THROUGH PRODUCTIVITY GROWTH USING AI IS WHAT WE THINK IS THE NEXT TRADE, SO THAT IS GOING TO BE BETTER. CAROLINE:
WHEN WE THINK ABOUT THIS WEEK AND THE AMOUNT OF GUIDANCE WE MIGHT GET FROM EARNINGS FROM CEOS, WHETHER IT IS THE TELECOM SECTOR, WHETHER YOU HAVE CHIP NAMES, INTEL OR TEXAS INSTRUMENTS, ARE YOU EXPECTING GUIDANCE TO BE LOWER? SCOTT: WE EXPECT GUIDANCE TO BE FUZZY. WHO IS GOING TO BELIEVE GUIDANCE? YOU HAD UNITED AIRLINES SAYING HERE IS OUR GUIDANCE FOR A RECESSION AND A NON-RECESSION. THAT IS NOT GUIDANCE. THAT IS USELESS. WE ARE FOCUSING ON HOW COMPANIES ARE THINKING ABOUT OPERATING, SO IN TERMS OF GUIDANCE -- NUMBERS ARE NOT GOING TO MEET ANYTHING BUT IN TERMS OF PHILOSOPHICALLY -- HOW ARE YOU OPERATING THROUGH THIS UNCERTAINTY? WHAT CONTINGENCY PLANS DO YOU HAVE? IT IS GOING TO BE THOSE TYPES OF THINGS WE ARE LOOKING FOR. IT WILL BE A TIP OF THE CAP TOWARD GOOD MANAGEMENT AND THOUGHTFUL MANAGEMENT.
WE WILL PROBABLY GET A PREMIUM THROUGH THIS CYCLE, BUT IT IS GOING TO BE MORE QUALITATIVE THINGS RATHER THAN HARD NUMBERS THIS QUARTER. CAROLINE: LET'S GO TO CAPEX. WHAT ARE YOU EXPECTING IN TERMS OF COMMITMENT TO CONTINUE TO SPEND? WE ARE ALL QUESTIONING IT FROM HYPERSCALERS WHEN IT COMES TO NVIDIA INVESTMENT. SCOTT: I THINK IT IS GOING TO BE A TIMESCALE TYPE OF ARGUMENT.
NOBODY IS VERY CONFIDENT IN THE NEXT FEW MONTHS. NOBODY KNOWS WHAT THESE POLICIES ARE GOING TO LOOK LIKE. WE ARE FOCUSING ON WHAT FOLKS ARE THINKING ABOUT FOR THE NEXT TWO TO THREE YEARS. ARE THEY GOING TO START EXECUTING ON THOSE PLANS? IT IS AN ATTEMPT TOWARD MANAGEMENT AND TEAMS THAT ARE PROVING THEY CAN THINK THROUGH SHORT-TERM ISSUES AND FOCUS MORE ON MEDIUM-TERM STUFF THAT YOU HAVE BENEFITS THROUGH TIME. IT IS NOT GOING TO BE AN EASY CHARGE. THIS IS NOT GOING TO BE AN EASY
EARNINGS SEASON. IT IS GOING TO BE A HAND-TO-HAND BATTLE. CAROLINE: WHAT ABOUT GLOBAL EXPOSURE VERSUS DOMESTIC EXPOSURE? I THINK OF TELECOMS NAMES FOCUSED ON A CONSUMER IN THE U.S.. HOW DO YOU THINK ABOUT OPPORTUNITIES TO INVEST OR FOR COMPANIES TO HAVE EXPOSURE ABROAD? SCOTT: IF YOU ARE THINKING ABOUT INVESTING ABROAD, IT IS ABOUT TWO THINGS. ONE IS THE DOLLAR DOWNTREND WILL BE STRONG AND PERSISTENT FOR THE NEXT COUPLE YEARS.
THAT GIVES YOU A PRETTY GOOD TAILWIND IF YOU ARE AN INTERNATIONAL INVESTOR, SO THAT AS A STARTING PLACE. WE DO THINK THE DOLLAR TREND IS LOWER. THE OTHER THING IS THE FISCAL EXPANSION IS NOW THE REALM OF INTERNATIONALS.
AND THE MARKET REWARDS FISCAL EXPANSION. WE HAVE SEEN THAT OVER THE LAST 10 YEARS. SORT OF THE DUAL THING OF FISCAL EXPANSION INTERNATIONALLY VERSUS THE U.S. AND THE DOLLAR TRENDING LOWER
AGAINST MOST MAJOR TRADING PARTNERS -- WE THINK THOSE TAILWINDS ARE GOING TO BE TO THE BENEFIT OF INTERNATIONAL EQUITY INVESTING FOR THE NEXT YEAR OR SO. CAROLINE: MOST MAJOR TRADING PARTNERS, BUT WHAT ABOUT CHINA'S INVESTMENT? SCOTT: THAT IS A TRICKY ONE. CHINA WE THINK IS GOING TO GET BULLIED LIKE EUROPE INTO DOING FISCAL EXPANSION HERE IN CHINA IS GOING TO GET BULLIED INTO DOING COUNTERCYCLICAL POLICIES. THEY HAVE BEEN RESISTANT FOR THE LAST COUPLE YEARS.
ONE THING THAT IS IMPORTANT FOR CHINESE TECH IS WE HAVE NOT HEARD COMMON PROSPERITY FOR MANY MONTHS NOW. TOWARDS CHINESE EQUITIES AND TECH IN PARTICULAR, SO THAT LANGUAGE BEING DROPPED IS IMPORTANT AND THE COMBINATION OF THAT LANGUAGE BEING DROPPED AND SINGLING CHANGES IN HIS MINDSET TOWARD CAPITALISM AND CHINESE TECH COMPANIES, PLUS WE THINK WILL HAVE TO BE SOME TO -- SORT OF FISCAL RESPONSE BY THE CHINESE GOVERNMENT MAKES THOSE PROBABLY OK TO INVEST IN. IT IS A TRICKY ONE. CAROLINE: THANKS FOR JOINING US TODAY. ALPHABET HAS TO COURT AS THE GOVERNMENT CONTINUES HIS PUSH TO SPLIT UP GOOGLE.
THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: TODAY, GOOGLE AND COURT. IT FOLLOWS A RULING LAST YEAR THE GOOGLE HAS AN ILLEGAL MONOPOLY IN WEB SEARCH. MICHAEL SHEPPARD HAS THE DETAILS FROM WASHINGTON. LAST WEEK WAS ABOUT THE
LANDMARK RULING. WHAT ARE THE REMEDIES LIKELY TO BE DISCUSSED? MICHAEL: THIS IS ANOTHER FRONT IN A BROADER ANTITRUST PUSH AGAINST ALPHABET AND OTHER TECH COMPANIES, BUT WE ARE TALKING ABOUT SEARCH. THE GOVERNMENT IS SAYING GOOGLE HAS THIS ILLEGAL MONOPOLY PER A JUDGE'S RULING IN AUGUST AND THESE ARE THE REMEDIES WE WOULD LIKE TO SEE. THIS IS THE SO-CALLED PENALTY OR REMEDY PHASE BEFORE THE SAME JUDGE WHO MADE THE RULING IN AUGUST. THEY ARE CALLING FOR BIG CHANGES.
ONE IS GOOGLE SUED -- SHOULD SELL OFF ITS CHROME BROWSER AND LICENSE MORE DATA TO ITS COMPETITORS AND STOP MAKING ALL THOSE BILLIONS OF DOLLARS IN PAYMENTS TO COMPANIES LIKE APPLE AND OTHERS TO GUARANTEE A GOOD POSITION ON THOSE PLATFORMS FOR ITS SEARCH ENGINE. SOMETHING THE JUDGE FOUND SIGNALED ANTICOMPETITIVE BEHAVIOR. GOOGLE HAS COUNTERED WITH SAYING THAT MAKING CHANGES LIKE THIS WILL HINDER INNOVATION. IT WILL PUT US AT RISK, PUT THE U.S. AT RISK OF LOSING A COMPETITIVE
EDGE ON THE GLOBAL STAGE. THEY ARE SAYING THAT THE JUSTICE DEPARTMENT PROPOSED FIXES WOULD SEEK TO BREAK SOMETHING THAT DOES NOT NEED FIXING. CAROLINE: WHAT IS INTERESTING IS THE TIME THAT IT HAS BEEN, MORE THAN 40 YEARS SINCE WE GOT THE BREAK UP. IT HAS BEEN 25 YEARS SINCE MICROSOFT WAS UNDER THE MICROSCOPE.
WHAT DO WE THINK WILL BE AN OUTCOME IN ANY SORT OF TIME HORIZON HERE? MICHAEL: THEY ARE TALKING ABOUT PERHAPS AUGUST TO LEARN THE JUDGE'S DECISION, BUT THIS WILL GO ON FOR YEARS TO COME. THIS CASE IS NOT OVER NOW OR IN AUGUST MATTER WHAT HAPPENS, EITHER A RULING IN FAVOR OF THE GOVERNMENT OR AGAINST THE GOVERNMENT. IT WILL HEAD TO THE SUPREME COURT FOR AN APPEAL.
BOTH SIDES HAVE A LOT AT STAKE AND THE U.S. GOVERNMENT IS NOT SHOWING ANY SIGNS OF LETTING UP ITS ANTITRUST PUSH AGAINST MAJOR TECH COMPANIES. WE SAW THE META TRIAL BEING PUSHED WITH TESTIMONY FROM MARK ZUCKERBERG ABOUT THE COMPANY'S ALLEGED ANTICOMPETITIVE BEHAVIOR. HERE, WE WERE TALKING ABOUT THE PUSH FROM THE GOVERNMENT AGAINST ALPHABET AND OTHER COMPANIES AS WELL. APPLE AND AMAZON ARE UNDER PRESSURE OVER COMPETITIVE PRACTICES THE GOVERNMENT HAS SIGNALED OUT IS POTENTIALLY HARMFUL TO THE MARKET. CAROLINE: LET'S DISCUSS THIS FURTHER. THE FORMER NEBRASKA ATTORNEY GENERAL WITH US.
IT IS REALLY INTERESTING AS TO HOW MUCH YOU PUSHED FORWARD ON THIS PARTICULAR CASE AND OTHERS THAT SURROUND ALPHABET AT THE MOMENT AND IT WAS UNDER THE PREVIOUS TRUMP ADMINISTRATION IT FIRST KICKED OFF. WHAT IMPACT DOES THIS HAVE ON THE CONSUMER AND TECH INDUSTRY AT LARGE, THIS SORT OF FORM OF CONTROL? >> THE BIGGEST ISSUE AS ATTORNEY GENERAL -- WE HAD CONCERN THAT BIG TECH WAS ACCUMULATING SO MUCH PERSONAL DATA AND THAT DATA REALLY PRESENTED THE CONSUMER ALMOST AS THE PRODUCT. BECAUSE THE DATA WAS WHAT FED SEARCH AND AI. AND REALLY WE FELT WE NEEDED TO
STEP FORWARD BECAUSE THEIR PRIVACY AND USE OF DATA FOR PROFIT WAS A BIG CONCERN. CAROLINE: GOOGLE WOULD COUNTER THAT THIS IS GOING TO HURT THE CONSUMER IF YOU SEPARATE CHROME. SUDDENLY THE SEAMLESS APPROACH IF YOU ARE A ANDROID USER DISINTEGRATES. DOES THAT HOLD FIRM IN YOUR MIND? >> I DO NOT THINK SO. ONE OF THE BIGGEST CONCERNS WE
HAD WAS WHAT GOOGLE DID IN MAINTAINING, AND THIS IS IN THE AUGUST OPINION, IN MAINTAINING HIS MONOPOLY COME A IT BASICALLY CREATED AN ECOSYSTEM WHERE THEY ENTERED INTO EXCLUSIONARY CONTRACTS WITH IMPORTANT PLAYERS , HAD REVENUE SHARING AND AS A RESULT CREATE THIS BASICALLY FEEDBACK LOOP THAT KEEPS EVERYTHING CONTAINED WITHIN GOOGLE AND THE RESULT IS A DISINCENTIVIZE ANYONE FROM THE OUTSIDE ACTUALLY BEING ABLE TO GET CAPITAL TO CHALLENGE A CERTAIN TYPE OF SEARCH ENGINE THAT MAY BE A BETTER PRODUCT OR MAY BETTER PROTECT PRIVACY. ALL OF THAT IS LOCKED OUT BECAUSE INVESTORS WERE NOT GOING TO INVEST IN SOMEONE WHO WOULD GO UP AGAINST GOOGLE. ALL THE PLAYERS IN THAT LOOP THAT THEY HAD THROUGH THESE EXCLUSIONARY CONTRACTS WERE DISINCENTIVIZE TO LOOK AT WORKING WITH OTHER TECHNOLOGIES, SO I THINK IT IS A 10-YEAR-OLD -- HOLD ON DEVELOPING BETTER SEARCH TECHNOLOGY. CAROLINE: APPLE GETS $26 BILLION A YEAR TO OFFER THAT EXCLUSIVE NATURE OF GOOGLE AS A SEARCH OPTION, BUT THERE ARE OTHER UP -- COMPANIES AND SEARCH OPTIONS THEY GET MONEY FROM GOOGLE.
WHAT YOU THINK WE WILL HEAR IN TERMS OF EVIDENCE THIS WEEK? >> I THINK THERE ARE SEVERAL THINGS. I THINK THE COURT MADE SOME IMPORTANT FINDINGS ABOUT THE EFFECTS OF THESE REVOLUTIONARY CONTRACTS. THE COURT REALIZED THE IMPORTANCE OF SCALE BECAUSE HAVING THAT DATA AND GOOGLE BEING ABLE TO ACQUIRE SO MUCH OF THAT BUILDS A SCALE THAT MAKES IT DIFFICULT FOR ANY COMPETITION TO OCCUR, SO I THINK WE ARE GOING TO AGAIN SEE EVIDENCE ABOUT HOW COMPANIES WHO WANTED TO DEVELOP PRODUCTS IN THE AREA OF SEARCH ADVERTISING AND TECH ADVERTISING WILL SEE EVIDENCE OF HOW THEY HAVE BEEN KEPT OUT OF THE MARKET AND HOW IT IS NECESSARY, INCLUDING DIVESTITURE OF CHROME AS AN IMPORTANT ELEMENT TO BALANCE OUT COMPETITION IN THE MARKET. CAROLINE: ALPHABET SHARES ARE AT SESSION LOWS. THEY HAVE EARNINGS THIS WEEK. I'M INTERESTED IN THE COUNTERING NATURE FROM GOOGLE. THIS IS BACKWARD LOOKING.
WE SUDDENLY HAVE MORE COMPETITION IN THE SEARCH SPACE BECAUSE OPENAI IS THERE AND THESE OTHER GENERATIVE AI FORMS OF SEARCH. IS THAT AN INTERESTING ARGUMENT? IS THE TIMING RIGHT? >> I THINK THE TIMING IS IMPORTANT. THE DEPARTMENT OF JUSTICE AND THE STATE ATTORNEYS GENERAL RECOGNIZE THAT TECHNOLOGY IS MOVING SO QUICKLY AND AI IS MOVING QUICKLY, BUT WHAT IS TO FUEL ALL OF THAT IS DATA. AND SO WE THINK ACTUALLY PART OF WHAT WE ARE ASKING FOR IN THE REMEDY IS TO ASK THE COURT TO KEEP A MONETARY PROCESS GOING SO WE CAN FOLLOW THIS INTO THE AI WORLD DEVELOPMENT BECAUSE FROM A VENN DIAGRAM THERE IS A LOT OF OVERLAP SO HAVING AN ONGOING MONITORING ABILITY WILL ALLOW US TO ADDRESS SOME OF THE NEW TECHNOLOGY CHALLENGES THAT MIGHT COME FORWARD. CAROLINE: BACK IN PRIVATE PRACTICE, DOUG PETERSON. WONDERFUL TO HAVE SOME TIME
WITH YOU. COMING UP, TESLA SHARES OFF BY ALMOST 7%. ONE OF THE COMPANY'S BIGGEST BULLS SAYS ELON MUSK NEEDS TO FOCUS ON SALVAGING THE BRAND. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: TAKING A LOOK AT TESLA SHARES, OFF BY MORE THAN 7%, WORST DAY SINCE APRIL 10 FOR THE STOCK.
THE COMPANY'S BIGGEST BULLS SENT A WARNING TO INVESTORS, SAYING THIS IS CODE RED FOR TESLA AND ELON MUSK NEEDS TO PIVOT FOCUS FROM THE DEPARTMENT OF GOVERNMENT EFFICIENCY TO AVOID LASTING BRAND DAMAGE. WE HAVE HEARD THIS BEFORE, BUT EARNINGS COME TUESDAY. IT IS AN IMPORTANT MOMENT. >> THAT IS RIGHT AND I THINK INVESTORS -- HE IS AN ANALYST, BUT THEY WANT TO HEAR THAT ELON IS GOING TO COME BACK AND THERE'S FOCUS ON GETTING SALES GOING AND THAT YOU ARE GOING TO SEE A LOWER-PRICED EV COMING OUT OF THE BIG THING THAT HAS KEPT THE NARRATIVE GOING BEFORE THIS POLITICALLY RELATED ROUTES THEY HAVE HAD IS WHAT IS GOING ON WITH THE AUTONOMOUS VEHICLE, WITH THE AI AND EV BUSINESS TALKED ABOUT A WHILE BACK WITH HIM FOCUSED ON THE GOVERNMENT COSTS, INVESTORS ARE NOT SEEING A LOT OF THAT. THIS GOES BACK YEARS. WHEN INVESTORS WERE WORRIED HE WAS SPENDING TOO MUCH TIME AT SPACEX OR WITH THE BORING COMPANY AND HERE HE IS SPENDING MOST OF HIS TIME WITH THE GOVERNMENT.
THEY WANT TO SEE THAT THE GUY WHO BUILT THE COMPANY AND MADE A LOT OF PEOPLE A LOT OF MONEY IS BACK AND FOCUSED ON TESLA. CAROLINE: MANY LOOKING TOWARD OTHER EV'S SPEEDING UP WITH CHARGING AND HAVING CHARGERS THAT BRING US TO FIVE MINUTES OR LESS TO FULL CHARGE. MOVES AWAY FROM AREAS OF CARS BEING IMPACTED NOW. A BIG INVESTMENT COMING INTO HERTZ.
THEY MADE A POOR DECISION INTO TESLA INVESTMENTS IN THE PAST. >> IN THE FOURTH QUARTER, HERTZ SAID THEY WERE DOWN SELLING DOWN THIS TESLA THAT THAT BECAUSE $2.9 BILLION OF LOSSES LAST YEAR. SO THAT IS BEHIND THEM AND THE MARKET STILL IS NOT REWARDING THEM FOR THAT. IT WAS TRADING DOWN LOW. IT DOES NOT TAKE MUCH IN TERMS
OF OPERANT IMPROVEMENTS FOR HERTZ TO GET THINGS GOING IN THE RIGHT DIRECTION, ASSUMING THERE IS NO MORE OF A TALE HERE FROM THE TESLA BACK. THE OTHER THING HE IS LOOKING AT IS COULD THIS BE A TARIFF BAT? IF TARIFFS DRIVE UP PRICES OF NEW CARS, IT BRINGS UP PRICES OF USED CARS AS WELL. THEY HAVE HUNDREDS OF THOUSANDS IN THEIR FLEETS. IF THEY SELL THEM AT A BETTER
PRICE, IT IS GOOD FOR THE COMPANY AND WILL HELP PAY DOWN DEBT, SO THERE ARE POTENTIAL TAILWINDS AND OFFERING IMPROVEMENTS AND HE IS BETTING THAT THE DAMAGES BEHIND THE COMPANY AND ALL AT LEAST SOME KIND OF IMPROVEMENT GOING FORWARD. CAROLINE: THANKS SO MUCH. TIME NOW FOR TALKING TO. FIRST, THEY HAVE TO ADD 100,000 FULL-TIME RIDERS. THE COMPANY IS CHALLENGING A LOCAL RIVAL IN THE FOOD DELIVERY MARKET. JD OFFERED ZERO COMMISSION TO SOME RESTAURANTS TO LOWER BUSINESS AWAY. PLUS, A NEW TEXT AND IMAGE TO VIDEO AI MODEL AND IT CLAIMS IT READS -- BEATS OPENAI. IT AIMS TO OFFER CONTENT
CREATORS CAPABILITIES OF A FILM STUDIO WITHOUT HAVING TO PAY THE BIG BUDGET. IT WAS BILLED AS THE FIRST HALF MARATHON FOR ANDROIDS. HUMANOID ROBOTS RACED AGAINST HUMAN MARATHON RUNNERS OVER THE WEEKEND IN BEIJING. THE MAN VERSUS MACHINE COMPETITION WAS MEANT TO SHOWCASE CHINA'S AI AMBITIONS. ROBOTS FELL AT THE STARTING LINE, WITH SOME COLLAPSING INTO PIECES. JUST FOUR PARTICIPANTS COMPLETED THE RACE. IT WAS A NOTABLE FIRST. COMING UP, TSMC SHARES TRADING LOWER
CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. THE MARKETS ARE ONCE AGAIN ON A DOWNDRAFT, SEEING THE NASDAQ 100 FEELING THE BRUNT OF THE SELL OFF. ON THE NASDAQ 100, ONLY FIVE STOCKS ACTUALLY IN THE GREEN. EVERYTHING IN THE RED AND THE MICRO ANXIETY OF CHIPS STOCKS AND WARNINGS ABOUT EARNINGS BUT ALSO A MACRO PERSPECTIVE. WHAT OF JAY POWELL AND HIS FUTURE? WE ARE CURRENTLY ON THE DOWNSIDE. NVIDIA IS ON THE DOWNSIDE FROM A POINTS PERSPECTIVE, CURRENTLY OFF BY MORE THAN 5% FOR THREE STRAIGHT DAYS. IT HAS WIPED OUT ALMOST $400
BILLION OF MARKET CAP IN THOSE THREE DAYS. I'M LOOKING AT TSMC UP BY 3.3%. THEY ARE PUTTING OUT A WARNING SAYING THAT MAYBE WE WILL FIND IT HARD TO ENSURE END USERS OF CHIPS ARE NOT CHINESE. LET'S TALK ABOUT THE MORE WITH IAN KING. THIS IS TSMC SAYING WE HEAR YOU AND UNDERSTAND YOU WANT TO BE LIMITING EXPORTS TO CHINESE ENTITIES. WE DO NOT ALWAYS KNOW WHERE
THEY ARE GOING. IAN: THIS IS AN ATTEMPT BY THEM TO TRY TO SHIFT BLAME OR FOCUS. THEY ARE SAYING, WE JUST MAKE THESE THINGS. THE COMPANIES THAT DESIGNED THEM AND SELL THEM, THEY ARE THE ONES THAT SHOULD KNOW WHERE THEY ARE GOING AND THE ONES THAT ARE MORE DIRECTLY INVOLVED.
MAYBE IT IS THE COMPUTER MAKERS THAT TAKE THEM AND PUT THEM IN COMPUTERS OR CELL PHONES OR WHATEVER, SO THERE IS A HEIGHTENED ENVIRONMENT OF HOW ARE THESE CHIPS GETTING TO CHINA? WE NEED TO KNOW. THIS IS TSMC SAYING IT WAS NOT US. CAROLINE: TSMC HAS BEEN TRYING TO APPEASE THE ADMINISTRATION. IT IS ALL ABOUT INVESTMENT THEY ARE MAKING IN THAT STATE BUT IT IS COSTING THEM MORE. >> IT IS. THIS IS THE POINT BEHIND THE
CHIPS ACT, TO SAY WE NEED TO MAKE THE PRICE OF DOING BUSINESS IN THE U.S., OF BUILDING THESE FACTORIES EQUIVALENT TO WHAT IT WOULD BE TO MAKE THEM IN TAIWAN OR IN SOUTH KOREA OR CHINA AND THE DELTA HAS ALWAYS BEEN GOVERNMENT SUPPORT. THAT IS THE CHIPS ACT, BUT WHETHER THAT IS ABSOLUTELY THE CASE AND CAN STILL GET THE SAME LEVEL OF A CHALLENGE. CAROLINE: THANK YOU. MORE ON THE SEMI CONDUCTOR SECTOR NOW AMID GEOPOLITICAL UNCERTAINTY. WE WELCOME BACK TO THE SHOW MICHELLE. ALWAYS GREAT TO HAVE YOUR VOICE. LET'S TALK ABOUT WHAT YOU ARE HEARING FROM SEMI CONDUCTOR COMPANIES AT THE MOMENT. ARE WE SEEING THE
ADMINISTRATION GETTING WHAT IT WANTS? MICHELLE: WE ARE SEEING A TIGHTENING OF EXPORT CONTROLS, WHICH HAS BEEN THE TRAJECTORY FOR THE PAST FEW YEARS AND SPEAKS TO THE STRATEGIC NATURE OF SEMI CONDUCTORS BECAUSE THEY ARE POWERING CONSUMER TECHNOLOGIES AND DEFENSE TACK AT THE SAME TIME, SO IF YOU LOOK AT AMERICAN TECH COMPANIES LIKE NVIDIA OR ALLIED CHIP COMPANIES LIKE TSMC, THEY HAVE A STRATEGIC ROLE TO PLAY AT THE FRONT LINES OF GEOPOLITICAL COMPETITION, SO THEY ARE NOT PASSIVE BUT ACTIVE PLAYERS IN MAKING SURE THE U.S. AND THE FREE WORLD MAINTAINS TECHNOLOGICAL LEADERSHIP SO THE INCREASING EXPORT CONTROLS ARE A REFLECTION OF THAT. CAROLINE: WHEN TSMC PUTS OUT AN ANNUAL REPORT SAYING WE ARE GOING TO STRUGGLE WITH THIS, WHEN THEY ARE TRYING TO OWN THE FACT THEY DO NOT ALWAYS UNDERSTAND THE END USER -- THERE WERE REPORTS THAT CHIPS ENDED UP IN HUAWEI PRODUCTS. HOW DO YOU AGREE TO THAT ACKNOWLEDGMENT FROM A COMPANY? MICHELLE: TSMC PRODUCES 90% OF THE MOST ADVANCED SEMI CONDUCTORS, SO IF YOU LOOK AT THE LEVERAGE THEY HAVE, IF THEY WERE TO ISSUE GUIDANCE REQUIRING MORE DISCLOSURE AND TRANSPARENCY AND UNDERSTANDING DOWNSTREAM OF WHO USERS ARE OF CHIPS THEY ARE MAKING, THEY WOULD SEE CUSTOMERS WILL BE RESPONSIVE TO THAT BECAUSE OF THE LEADERSHIP ROLE THEY PLAY AND THAT IS AN IMPORTANT THING HERE.
COMPANIES CANNOT JUST BE BYSTANDERS WAITING FOR GOVERNMENTS TO ISSUE REGULATIONS AND COMPLY. THERE IS A LEADERSHIP OPPORTUNITY FOR COMPANIES OPERATING IN THIS ENVIRONMENT TO PLAY A KEY ROLE IN SHAPING WHAT DISCLOSURES NEED TO LOOK LIKE SO WE MAKE SURE THESE CHIPS DO NOT END UP IN THE HANDS OF OUR ADVERSARIES. CAROLINE: DISCLOSURE IS ONE THING BUT DESIGNING NEW TYPES OF CHIPS TO ABIDE BY CHANGING RULES IS ANOTHER AND NVIDIA HAS BEEN TRYING TO DO THAT. EVERY TIME RULES HAVE CHANGED, THEY HAVE DESIGNED A DIFFERENT TYPE OF CHIP THAT CHINA IS ALLOWED TO ACCESS.
HOW DO YOU THINK THEY HAVE NAVIGATED THIS FAR? MICHELLE: IT IS WORTH TAKING A STEP BACK AND LOOKING AT THE BIGGER PICTURE HERE, WHICH IS IF YOU HAVE TO MODIFY YOUR PRODUCT SO A TOTALITARIAN CUSTOMER IS NOT USING IT TO UNDERMINE YOUR COUNTRY'S NATIONAL SECURITY, SOMETHING IS WRONG. HOW DO YOU LOOK AT WHAT THE OVERALL BUSINESS STRATEGY IS AND NATIONAL SECURITY STRATEGY IS AND START TO THINK ABOUT THE LONG GAME HERE? FOR AMERICAN CHIP COMPANIES, IT IS NOT GOING TO BE A LONG GAME BECAUSE CHINA DECLARED IT WANTS TO BE SELF-SUFFICIENT IN CRITICAL TECHNOLOGIES I-20 35, SO THE CLOCK IS TICKING ON AMERICAN CHIP COMPANIES AND WHETHER IT IS THE COMPANY LEAVING THE MARKET ON HIS OWN TERMS OR THE U.S. GOVERNMENT ISSUING NEW EXPORT CONTROL REGULATIONS OR CHINA CREATING ITS OWN NATIONAL CHAMPIONS LIKE HUAWEI, THE OPPORTUNITY IS FOR BUSINESS LEADERS TO DECIDE NOW WHETHER THEY WANT TO GET OUT OR HAVE IT BE DICTATED BY CHINA. CAROLINE:
JENSEN HUANG HAS THE CRACKDOWN HAPPEN AND GOES TO BEIJING. RECONFIRMING HIS COMMITMENT TO THE COUNTRY. HOW DID YOU ASSESS THAT LEVEL OF DIPLOMACY FROM THE COMPANY? MICHELLE: HE ALSO WENT TO JAPAN AND CHINA IS A SIGNIFICANT MARKET FOR NVIDIA AND OTHER CHIP COMPANIES, SO NOT SURPRISING THAT HE WENT THERE, BUT WE HAVE TO MAKE SURE THAT AMERICAN COMPANIES IN CRITICAL TECH SECTORS ARE WORKING WITH TRUSTED PARTNERS AND ALLIES TO ADVANCE OUR COLLECTIVE NATIONAL AND INTERNATIONAL SECURITY. THE FACT HE WAS IN JAPAN EMPHASIZING THE NEED FOR INCREASED ENERGY AND RESOURCES -- JAPAN HAS BEEN A TRUSTED PARTNER IN TECHNOLOGY. THAT TYPE OF DIPLOMACY IS IMPORTANT AND YOU SEE VICE PRESIDENT VANCE IN INDIA WORKING WITH DEMOCRATIC PARTNERS TO BE EVEN BETTER NEWS FOR U.S. NATIONAL SECURITY. CAROLINE:
WHEN WE HAVE THE IDEA THAT NECESSITY IS THE MOTHER OF INVENTION OR INNOVATION, ARE WE JUST PUSHING CHINA TO BUILD IT THEMSELVES AT A FASTER RATE? >> THEY ARE GOING TO DO IT ANYWAY. THE ALTERNATIVE WOULD BE LET'S HAND THEM CRITICAL TECHNOLOGIES AND SAVE THEM TIME. THE ARGUMENT DOES NOT STAND. AMERICA HAS TO FOCUS ON INNOVATING FASTER AND SMARTER AND BEING THE LEADER IN ALL CRITICAL AREAS OF TECHNOLOGY AND ADDRESSING WHAT COMPETITORS AND ADVERSARIES LIKE CHINA ARE DOING IN THE SECTORS, BUT THE IMPERATIVE FOR THE UNITED STATES IS TO FOCUS ON INNOVATION FIRST AND MAINTAIN A GLOBAL LEADERSHIP POSITION. CHINA WILL CONTINUE DOING THAT ON ITS OWN. THE MORE WE FOCUS ON WHAT WE DO BEST, THE BETTER OFF WE WILL BE. CAROLINE: IT IS GREAT TO HAVE YOU BACK. COMING UP, NETFLIX'S RECORD
PROFIT IS GIVING INVESTORS SOMETHING TO CLING TO AMID CAROLINE: CHECK OUT THE BLOOMBERG TECHNOLOGY PODCAST. THIS IS BLOOMBERG. A QUICK CHECK IN ON NETFLIX SHARES. THEY HAVE BEEN HOLDING ONTO GAINS AND ONE OF THE ONLY STOCKS IN THE GREEN ARE UP 2.8% AFTER THE STREAMING GIANT
REPORTED A RECORD PROFIT TO START THE YEAR. ANALYSTS SEE THE COMPANY AS RESILIENT AMID A TOUGHER MACROENVIRONMENT. BLOOMBERG WILL BREAK IT DOWN FIRST. WE GOT THE NUMBERS THURSDAY EVENING AND THEN MARKETS WENT ON HOLIDAY. TODAY THEY REACT AND THEY LIKE IT. >> THEY LIKE IT A LOT. THAT HAD BEEN -- THEY HAD BEEN
A BELIEF OF INVESTORS AND ANALYSTS THAT NETFLIX WAS A COMPANY THAT WAS NOT AT RISK BECAUSE OF THE CURRENT UNCERTAINTY AND TRADE WAR AND IT IS ALSO A COMPANY THAT CONTINUES TO OPERATE ON ALL CYLINDERS. IT IS EXCELLING EVEN IF THERE ARE SOME PEOPLE WHO THINK IT HAS SLOWED DOWN IN TERMS OF SUBSCRIBERS IN THE FIRST QUARTER OF THE YEAR AT LEAST IN THE U.S. AND CANADA HERE ARE THE NUMBERS IS REPORTING LOOK GOOD.
THE THING WHERE NETFLIX HAS CONTINUED TO OVERDELIVER FOR INVESTORS HAS BEEN IS FREE CASH FLOW AND PROFIT OVER THE LAST COUPLE YEARS. IT IS KIND OF CRAZY TO THINK THERE WAS A TIME IN WHICH PEOPLE ARE WORRIED THEY MIGHT COLLAPSE UNDER DEBT OR NEVER MAKE MONEY. CAROLINE: FIRST-QUARTER EARNINGS ARE UP 25% AND THEY ARE TALKING ABOUT RESILIENCY IN THE FACE OF POTENTIALLY WEAKENED CONSUMER.
ARE THEY CONTINUING TO DOUBLE DOWN ON COMMITMENTS TO PRODUCE ABROAD AND CONTINUE TO ROLL OUT WITH NEW MOVIES AND CONTENT? LUCAS: THEY HAD A SECTION IN THEIR LETTER TO SHAREHOLDERS TALKING ABOUT THE INVESTMENT THEY ARE MAKING IN INTERNATIONAL PRODUCTION. THEY ARE NOT PRODUCING IN SOMETHING LIKE 50 COUNTRIES AND EVEN NORTH OF THAT. THEY HAVE INCREASED THEIR PROGRAMMING BUDGET AFTER IT WAS FLAT FOR A COUPLE YEARS. THEY ARE UP TO $18 BILLION A YEAR.
THEY STILL PRODUCE AND RELEASE MORE PROGRAMMING THAN ANY STREAMING SERVICE BY A MILE. IF PEOPLE GET MORE COST CONSCIENCE, EVERY SERVICE WOULD EXPERIENCE HIGHER CANCELLATION RATES, BUT NETFLIX HAS THE INDUSTRY BEST AND I THINK WOULD CONTINUE TO BECAUSE OF ALL YOU GET FOR IT, WHEREAS THEIR OTHER SERVICES THAT IF YOU ONLY WATCH ONE OR TWO SHOWS YOU MIGHT CUT FOR A MONTH. IT IS HARDER FOR THE AVERAGE PERSON TO CUT NETFLIX. CAROLINE:
THANKS SO MUCH FOR THAT LET'S STICK A LITTLE LONGER WITH NETFLIX AND BRING IN RICH GREENFIELD. YOU ARE ACQUAINTED TO THE FACT THAT THEY ARE PRODUCING CONTENT IN MANY COUNTRIES. DOES THAT HELP WITH A WEAKENING DOLLAR? >> HAVING PRODUCTION RESOURCES ALL OVER THE WORLD MORE THAN ANYTHING ELSE MAKES IT CHEAPER TO MAKE CONTENT. THE COST OF MAKING AN HOUR DRAMA IN THE U.S.
CAN RUN SOMETHING LIKE -- TAKE YELLOWSTONE OR 1883. THOSE CAN COST $25 MILLION AN EPISODE. WHEN YOU'RE PRODUCING OVERSEAS, YOU ARE TAKING ADVANTAGE OF LOWER COST PRODUCTION ENVIRONMENTS BUT ALSO CREATING CONTENT THAT CATERS TO LOCAL TASTES.
NETFLIX HAS BEEN UNIQUE ABOUT NOT JUST CREATING GREAT CONTENT IN THE U.S. BUT ALL AROUND THE WORLD, WHETHER IT IS SQUID GAME OR FIGURE OUT HOW TO PRODUCE AT SCALE AROUND THE WORLD. I THINK THAT IS BECOMING AN INCREASING ADVANTAGE VERSUS NOBODY ELSE IS PRODUCING THE WAY NETFLIX IS PRODUCING AROUND THE WORLD. IT IS BECOMING A BIGGER ADVANTAGE, ESPECIALLY AS YOU HAVE -- YOU LISTENED TO TALK ABOUT THE PRESSURE EVERYONE IS FACING FROM A WEAKENING ECONOMY. IF YOU THINK ABOUT THE WAY
THESE LEGACY MEDIA COMPANIES ARE PULLING BACK ON SPENDING AND FOCUSING ON JUST TOP PROJECTS, IT IS GIVING NETFLIX GREATER ADVANTAGE. CAROLINE: THEY ARE CATERING TO MORE THAN 700 MILLION USERS WORLDWIDE BUT ALSO BECOMES INTERNATIONAL HIT. WILL THAT BE THE RECIPE FOR THE FUTURE? LUCAS: THERE IS NO PERFECT FORMULA FOR HOW YOU GET A HIT, BUT I WILL SAY WHEN YOU LOOK AT NETFLIX CUT WHETHER IT IS SQUID GAME FROM KOREA -- LOOK AT ADOLESCENCE. IT IS A FEW HOURS OF CONTENT.
IT IS A GLOBAL SENSATION OUT OF THE U.K.. YOU CAN TAKE SHOTS AT GOAL TO HAVE SUCCESSES. THERE IS NO DOUBT THE SUCCESSES OVERALL -- HUGE PIECES OF CONTENT ARE FEWER AND FURTHER BETWEEN NOW FOR EVERYBODY. NETFLIX IS TAKING MORE SHOTS ON GOAL BY A PRETTY WIDE MARGIN THAN EVERYBODY ELSE AND I THINK THAT IS SORT OF THE KEY ADVANTAGE. NOBODY SPENDING ON THIS MUCH
CONTENT TO WAY NETFLIX IS AND YOU CAN SEE IT. EVERY QUARTER, CERTAINLY EVERY SIX MONTHS IT FEELS LIKE THERE IS ONE BIG SHOW THAT BREAKS OUT ON NETFLIX. THE OTHER SERVICES ARE STRUGGLING TO MAKE BIG HITS AND PART OF IT IS THEY DO NOT HAVE ENOUGH USERS.
THEY DO NOT HAVE ENOUGH DAILY ENGAGEMENT. NETFLIX ONCE YOU ON NETFLIX EVERYDAY SO THERE IS ALWAYS SOMETHING NEW BRINGING YOU BACK TO THE SERVICE AND THAT POINT OF MAKING IT SO YOU HAVE REASON TO PAY MORE AND NOT TO TURN. CAROLINE: HAVE THE SHOTS BEEN ON GOAL WHEN IT COMES TO LIVE CONTENT? FROM A BRAND PERSPECTIVE, EVERYONE IS LOVING IT, BUT THE TECHNOLOGY HAS NOT BEEN THERE TO SERVICE THE SCALE OF DEMAND TO WATCH AT THE SAME TIME. RICH: THERE IS NO DOUBT THAT LIVE-STREAMING OF CONTENT WITH MASS AUDIENCES IS NOT AN EXACT SCIENCE. YOU SAW THAT WITH THE TYSON FIGHT LAST YEAR. IF YOU WERE TO LOOK AT THE NFL ON CHRISTMAS DAY, IT WORKED WELL.
BUT YOU HAVE SEEN YOUTUBE TV HERE AND THOSE THINGS HAVE GONE OUT AT SPECIFIC MOMENTS. YOU HAVE SEEN THESE SERVICES HAVE PROBLEMS AT SCALE. LIVE-STREAMING IS HARD. NETFLIX HAS LEARNED A TREMENDOUS AMOUNT AND IS GETTING BETTER AT IT, BUT I DO NOT THINK ANYBODY IN THE LIVE SPORTS STREAMING WHERE THERE IS MASSIVE DEMAND -- I DO NOT THINK YOU ARE GOING TO SEE PERFECTION. IT IS THE INTERNET.
IT HAS PROBLEMS. BUT NETFLIX IS BUILDING UP STRONG MUSCLE SKILLS IN UNDERSTANDING HOW TO DO IT BUT I ALSO DO NOT THINK SPORTS IS GOING TO BE THE CORE OF NETFLIX. THEY SEE IT AS A GLOBAL ENTERTAINMENT SERVICE WHERE SPORTS HAS A PLACE, ESPECIALLY AS THEY BUILD OUT ADVERTISING, BUT I WOULD BE SURPRISED IF SPORTS BECAME CRITICAL THE WAY IT IS CRITICAL TO PEACOCK OR YES PN -- ESPN. I DO NOT THINK IT IS GOING TO BE WIN OR LOSE FOR NETFLIX. CAROLINE: WE ARE UP MORE THAN 11% OVER YEAR TO DATE. WE ARE CLOSE TO RECORD HIGHS FOR THE STOCK IN THIS MACRO ENVIRONMENT.
ARE WE GOING FURTHER? RICH: THE BIG GROWTH COMES FROM HAVING PRICING POWER IN THE U.S.. THERE IS NO DOUBT, WHETHER FROM DRIVING THE SUBSCRIPTION PRICE HIGHER OR BEING ABLE TO PUT THE RIGHT ADD TO THE RIGHT PERSON AND DRIVING ADVERTISING REVENUE FROM A LARGE BASE OF ADVERTISING SUBSCRIBERS ON THE PLATFORM -- YOU LOOK AT IT OVER THE NEXT FIVE YEARS AND ASIA IS STILL RELATIVELY SMALL. WE KNOW THE ASIA PACIFIC NUMBERS ARE STILL SMALL WHEN YOU LOOK AT SCALE. THEY COULD 10X THE SIZE OF THEIR SUBSCRIBER BASE AND STILL NOT BE FULLY PENETRATED. THE STORY OVER THE NEXT FIVE TO 10 YEARS WILL BE HOW THEY EXECUTE AND BUILD IN ASIA THE WAY THEY HAVE BEEN SUCCESSFUL IN THE U.S., LATIN AMERICA, AND
EUROPE. CAROLINE: IT IS GREAT TO CHECK IN WITH YOU. COMING UP, CHATBOT ARENA IS TURNING INTO A REAL COMPANY. DETAILS BEHIND THE AI BATTLEGROUND NEXT.
THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: CHATBOT ARENACAROLINE: IS BECOME A COMPANY, VETTING THERE IS BIG BUSINESS AND BENCHMARKING. FOR NOW, RACHEL METZ JOINS US NOW. THERE -- THIS HAS BEEN A PASSION PRODUCT -- PROJECT OF ACADEMICS.
>> THIS WAS A PROJECT BY ACADEMICS AT UC BERKELEY AND THEY HAVE BEEN WORKING ON THIS IN A SUPER POPULAR. A LOT OF COMPANIES USE IT TO TEST NEW AND UNRELEASED MODELS. PEOPLE USE IT TO TRAY -- TRY OUT THE LATEST MODELS AND THEY WANTED TO MAKE IT MORE THAN AN ACADEMIC PROJECT. THEY WANTED TO SCALE UP. TO DO THAT, YOU NEED TO GET MONEY AND OFTEN BE A COMPANY, SO IT IS GROWING UP. CAROLINE:
AND MORE PEOPLE ARE USING IT. HOW ARE PEOPLE APPROACHING IT AND MAKING THE MOST OF THE RECOMMENDATIONS IT OFFERS? RACHEL: PEOPLE WHO ARE INDIVIDUALS ARE USING IT TO TRY THINGS OUT AND GET A SENSE OF WHAT THEY LIKE AND WHAT THEY DO NOT. THIS IS SORT OF A SPACE RANKING. ONE OF THE KEY THINGS YOU CAN DO ON THE WEBSITE IS TRY DIFFERENT CHATBOTS, NOT KNOWING WHAT THEY ARE. YOU TYPE IN A PROMPT AND RATE WHICH ANSWER YOU LIKE BETTER. BASED ON THAT, THE CHATBOTS WILL GO UP OR DOWN ON THE LEADERBOARD. COMPANIES SEE THIS AS AN
IMPORTANT MARKER OF HOW WELL USERS LIKE THEIR MODELS AND THAT COULD BE VALUABLE TO THEM, THIS KIND OF DATA. TYPICALLY THIS DATA IS HARD FOR COMPANIES TO GET ON THEIR OWN, SO HAVING IT AVAILABLE PUBLICLY IS USEFUL. CAROLINE: OPENAI RELEASED IT ON THE ARENA BEFORE IT WENT OUT MORE BROADLY. RACHEL: WHAT SOME COMPANIES ARE DOING IS THEY WILL PUT MODELS ON AND HAVE CODENAMES SEE WILL NOT KNOW EXACTLY WHAT THEY ARE HERE AND YOU MIGHT BE ABLE TO GUESS PRETTY WELL. THERE HAVE BEEN SOME I HAVE SEEN THAT I AM LIKE, I KNOW WHERE YOU'RE COMING FROM.
BUT IT IS INCREASINGLY VALUABLE AND OPENAI HAS DONE THIS A NUMBER OF TIMES, PUT UP MODELS THAT ARE UNRELEASED. PEOPLE CAN TRY THEM OUT. THEY MIGHT NOT KNOW WHERE THEY ARE COMING FROM BUT THEY MIGHT BE FROM OPENAI. CAROLINE:
TELL US ABOUT THE PEOPLE FROM UC BERKELEY THAT ARE BEHIND THIS AND WHETHER THEY BECOME THE EXECUTIVES NOW. RACHEL: THIS WAS A PROJECT OUT OF THE SKY COMPUTING LAB AND A BUNCH OF GRADUATE STUDENTS WORKED ON IT AND UNDERGRADUATE STUDENTS HELPED AS WELL AND A NUMBER OF THE GRADUATE STUDENTS ARE GOING TO BE THE COFOUNDERS OF IT AND I THINK THEY ARE TRYING TO FIGURE OUT WHO IS GOING TO HAVE WHAT ROLE IN THE COMPANY. SOME OF THEM WILL HAVE TITLES. CAROLINE: GREAT STORY. THANKS FOR BRINGING IT TO US. THAT DOES IT FOR THIS EDITION
OF BLOOMBERG TECHNOLOGY. LET'S KEEP OUR EYES ON THESE MARKETS BECAUSE IT IS AGAIN A DOWN DAY FOR THE NASDAQ 100, OFF BY MORE THAN 3%, HITTING SESSION LOWS. TESLA OFF BY MORE THAN 7%. EARNINGS COME OUT TUESDAY. WE HAVE ALPHABET THURSDAY AND TEXAS INSTRUMENTS. MUCH TO BE DIGESTED FROM THE CEOS AND EXECUTIVES BUT TESLA ON THE DOWNSIDE. WE HAVE BITCOIN UP, HITTING THE
HIGHEST SINCE MARCH AS WE SEE A MOVE INTO HAVENS SUCH AS GOLD, MAYBE DIGITAL GOAL BEING SEEN AS THE HAVEN OF CHOICE WHEN IT COMES TO BITCOIN AND YOU ARE SEEING MONEY INTO SHORT-TERM TREASURIES SO THE 10 YEAR IS STILL BEING SOLD OFF. CHECK OUT OUR BLOOMBERG TECHNOLOGY PODCAST AS WELL. YOU CAN FIND IT ON APPLE. FROM NEW YORK, THIS IS BLOOMBERG TECHNOLOGY.
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2025-04-23 16:22
