Elon Musk's Pay Package and Broadcom's Surge | 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: I’M CAROLINE HYDE IN NEW YORK. TIM: THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: WE PUSH AHEAD TO THE VOTE RESULTS ON ELON MUSK’S PAY PACKAGE THAT HAS TESLA, IT KICKS OFF. TIM: BROAD CAM SURGERIES. CAROLINE: AND WE’LL DIG INTO THE TERMS OF APPLE AND OPEN A.I.’S PARTNERSHIP, THEIR LANDMARK AGREEMENT. BUT FIRST, LET’S CHECK IN ON THE MARKETS. YOU’VE GOT MORE FUEL. WE’VE GOT STILL RECORD HIGH AFTER RECORD HIGH ACROSS BENCH MARKS.
IF YOU LOOK AT THE S&P 500, FOURTH STRAIGHT RECORD HIGH. NASDAQ UP ANOTHER TENTH OF A PERCENT. NOT A BIG GAIN LIKE WE SAW YESTERDAY, BUT WE DIGEST YET ANOTHER COOLING OF INFLATION. THE MACRO PICTURE LOOKS GOOD. THE 10-YEAR YIELD FALLS DOWN ANOTHER THREE, FOUR BASIS POINTS. FOREIGN COSTS ON THE DOW, NOT SO MUCH EUROPEAN STOCKS. STILL OPEN TO TRADE. WE’RE OFF BY 1.3%. MORE POLITICAL ANXIETY
HAPPENING IN EUROPE AND PERHAPS SUGGESTING A BIG MOVE LIKE YESTERDAY. MOVE ON, SEE WHAT’S HAPPENING IN THE WORLD OF CRYPTO. WE HAVE BEEN SEEING BASICALLY PRETTY STEADY, 57,000, INTERESTINGLY COMING OFF OF THOSE HIGHS. THAT MUSIC NOT QUITE FLOWING INTO BITCOIN TODAY, BUT WHAT ARE YOU WATCHING ON THE MICRO? TIM: I’M WATCHING SHARES OF BROADCOM. THEY ARE SURGING CLOSE TO 14%. THE COMPANY DID REPORT EARNINGS
AFTER THE BELL YESTERDAY ON THE TOP LINE, IT BEAT ON THE BOTTOM LINE. THE GUIDANCE SURPASSED EXPECTATIONS. THE COMPANY ALSO ANNOUNCED A STOCK SPLIT GOING TO TAKE EFFECT NEXT MONTH. INVESTORS ARE CERTAINLY CHEERING THAT NEWS, SENDING SHARES HIGHER. WIDELY SEEN AS SORT OF A BAROMETER FOR WHAT’S HAPPENING IN THE CHIP SPACE. NVIDIA ALSO AT A NEW RECORD RIGHT NOW, SHARES UP MORE THAN 2%. AND THEN WATCHING WHAT’S HAPPENING INTO THE DATA CENTER HARDWARE NETWORKING WHEN IT COMES TO THESE A.I. DATA CENTERS.
ARISTA NETWORKS UP MORE THAN 4%. BUT SPEAKING OF SHARES SURGING, LET’S TALK TESLA. SHARES ARE HIGHER THIS MORNING, THIS AFTER ELON MUSK SENT A TWEET EARLY THIS MORNING AGAIN, AS YOU MENTIONED, THE DAY OF THAT SHAREHOLDERS MEETING, SAYING THAT THOSE TWO SHAREHOLDER ISSUES THAT WERE BEING VOTED ON HAVE PASSED OR WILL PASS BY A "WIDE MARGIN." WE’RE TALKING ABOUT THE 2018 PAY PACKAGE THAT HAS BEEN UNDER SO MUCH SCRUTINY, IN ADDITION TO THAT THE IDEA THE COMPANY MOVING ITS CORPORATION FROM DELAWARE TO TEXAS.
SHARES HIGHER RIGHT NOW BY 3.7%. NOT MUCH CAN BE SAID PERMANENTLY ABOUT WHAT HAPPENS WITH THAT PAY PACKAGE, BUT THIS BILL WIDELY SEEN AS SORT OF A BAROMETER FOR HOW PEOPLE ARE SEEING ELON MUSK’S LEADERSHIP, AT THE TIME WHEN THE STOCK HAS BEEN UNDER PRESSURE, DOWN GOING INTO TODAY AROUND 30%. CAROLINE: IT’S NOT GOING TO HAVE ANY IMPLICATIONS ON THE COURT IN THE HERE AND NOW, IT’S STILL RIDING ON A JUDGE IN THE LONG TERM. BUT CERTAINLY IT HOLDS ON FROM
MUSK WALKING TOO SOON. >> YEAH, AND TO BE HONEST, IT’S NOT EXPECTING ELON MUSK TO FRONT RUN TESLA AND A.G.N. CLEARLY TESLA IS KEEPING VERY CLOSE TRACK OF THE VOTES THAT THEY DO HAVE, AND A LOT OF VOTES CAME IN YESTERDAY AT THE DEADLINE TO CAST A VOTE. IT WAS LATE LAST NIGHT, AND THEY’VE GOT THE VOTES.
I MEAN, IF YOU BELIEVE ELON’S TWEET, AND I DON’T THINK THERE’S A REASON NOT TO, THEY HAVE THE VOTES ON BOTH HIS PAY AND ON THE MOVE TO TEXAS. WHAT THIS MEANS IS THAT MANY OF THE VERY BIG SHAREHOLDERS THAT TESLA WAS WORRIED ABOUT, EITHER ABSTAINED OR VOTED YES. AND THAT’S LIKE A SUPER FASCINATING DYNAMIC, BECAUSE SOME OF THE LARGE FUNDS LIKE VANGUARD VOTED NO IN 2018, AND THEY ARE THE LARGEST SHAREHOLDER IN TESLA AFTER MUSK ITSELF.
>> THAT’S WHAT SURPRISED ME SO MUCH ABOUT THIS VOTE. YOU HAD THESE LARGE ASSET MANAGERS, SUCH AS VANGUARD, VOTING IN FAVOR OF THIS. DO YOU KNOW ANYTHING ABOUT WHY THEY SWITCHED OR THE SORT OF STRANGE BEDFELLOWS HERE? >> VANGUARD HAS NOT SAID ANYTHING YET. WE DON’T KNOW FOR SURE HOW THEY VOTED. TIM: SORRY, "NEW YORK TIMES" VOTED EARLY THIS MORNING.
>> WE’VE NOT CONFIRMED THAT OURSELVES. BUT IF YOU LOOK AT THE VOTE COUNT, A LOT OF YES VOTES CAME IN YESTERDAY, AND THEY HAVE TO BE THE BIG VOTES FROM THE SHAREHOLDERS, VANGUARD, BLACKROCK, GEODE, STATE STREET. AND YEAH, IT’S INTERESTING, TOO, BECAUSE BOTH I.S.S. AND GLASS LEWIS, THE BIG PROXY ADVISORY FIRMS, WERE NO ON THE PAY PACKAGE. THAT’S WHY TESLA WAS COURTING RETAIL INVESTORS. THEY WERE WORRIED THEY DIDN’T HAVE THE VOTES FROM BIG FUNDS, AND THEY WERE ACTIVELY COURTING RETAIL. WE KNOW THAT THEY WERE ACTIVELY
COURTING THE LARGE SHAREHOLDERS TOO, BUT SOMETHING TURNED THEIR WAY, AND I THINK THEY’VE GOT IT. TONIGHT WE’LL GET THE FINAL TALLY, BUT I MEAN, YOU’RE GOING SEE AN EBULLIENT ELON MUSK TAKE THE STAGE TODAY. TIM: THAT STARTS AT 4:30 WALL STREET TIME TODAY. DANA HULL, THANKS SO MUCH FOR
THAT. TURNING TO APPLE. WHEN TIM COOK ANNOUNCED THE COMPANY’S PARTNERSHIP WITH OPEN A.I., THEY DID YOU NOT DISCLOSE THE FINANCIAL TERMS OF THE AGREEMENT. FOR MORE ON WHAT WE KNOW ABOUT THE DEAL, LET’S BRING IN OUR REPORTER IN NEW YORK. WHAT DO WE KNOW ABOUT THE
FINANCIAL TERMS OF THE AGREEMENT, ZEROS ALL AROUND? >> FIRST, THANK YOU FOR HAVING ME. SECOND, THERE ARE NO FINANCIAL TERMS APPARENTLY. IT’S FUNNY, BECAUSE I FEEL LIKE THAT WAS THE BIGGEST QUESTION ON THAT DAY WHEN THEY ANNOUNCED THIS PARTNERSHIP. IT WAS LIKE, OK, SO WHO’S PAYING WHO? WHO’S MAKING MONEY HERE? IT TURNS OUT THERE’S NO MONEY EXCHANGING HANDS, AT LEAST AT THE ONSET. WHAT’S ACTUALLY HAPPENING IS, ACCORDING TO A APPLE REPORTER, APPLE BELIEVES THAT THERE’S ENOUGH VALUE, MAYBE EVEN MORE VALUE THAN MONETARY VALUE TO OPEN A.I.
AND HAVING ITS PRODUCTS ON A TON OF APPLE DEVICES ACROSS THE BOARD. THE PROMOTION OF THEIR PRODUCT OFFERS THEM A BUSINESS PROPOSITION, IF PEOPLE WANT TO GO FROM THE FREE VERSION OF OPEN A.I. TO THE PAID VERSION FOR $20 A MONTH, SO THAT’S THE PROPOSITION TO OPEN A.I. FOR APPLE, IT’S CLEARLY A VALUE ADD IN ALLOWING USERS LIKE ME AND YOU TO BE ABLE TO ACCESS OPEN A.I. AND ALL OF THE TOOLS, THE GENERATED CONTENT IT HAS ON OUR APPLE DEVICES. CAROLINE:
THERE HAS BEEN SOME COSTA PART FROM ELON MUSK’S IRE, BUT THIS INTEGRATION WILL ACTUALLY COST OPEN A.I. SOMETHING. THEY GOT TO PAY FOR THE COMPUTER IF EVERYONE STARTS USING IT? >> THAT’S RIGHT, AND THE IDEA BEHIND IT IS THAT IN THE LONG TERM, THIS COST, THIS INVESTMENT THAT THEY’RE MAKING, WILL PAY OFF, BOTH FOR APPLE AND OPEN A.I. FOR APPLE, I THINK THAT THE LONG-TERM ADVANTAGE HERE, THE REASON WHY THEY ARE MAKING PARTNERSHIPS WITH OPEN A.I. AND ARE TRYING TO MAKE PARTNERSHIPS WITH OTHER A.I. DEVELOPERS, BY THE WAY, THIS IS NOT AN EXCLUSIVE ARRANGEMENT, IS THAT HOPEFULLY ONE DAY THEY WILL BE ABLE TO MONETIZE IT THROUGH REVENUE SHARING AGREEMENTS. SO ANY TIME ONE OF THESE A.I. DEVELOPERS IS ABLE TO SELL A
SUBSCRIPTION THROUGH AN APPLE DEVICE, HOPEFULLY APPLE WILL GET A CUT FROM IT. THAT’S WHAT APPLE HOPES. AND AS FAR AS THE A.I. DEVELOPERS GO, THEY’RE WILLING TO GIVE THIS INVESTMENT IN THE HOPES THAT IT WILL GENERATE MORE REVENUE. AND MIND YOU, THIS IS A BIG
PUSH FOR OPEN A.I. RIGHT NOW. THEY’RE UNDER A LOT OF PRESSURE TO SHOW THAT THEY CANNOT ONLY GENERATE REVENUE, BUT GENERATE ENOUGH REVENUE TO TURN A PROFIT. THAT’S WHAT THEY REALLY NEED IN ORDER TO KEEP ALL THIS A.I. COMPUTE GOING, MORE AND MORE MONEY COMING INTO THE INSTITUTION TO FUND IT. A LOT OF DATA CAPACITY CENTER. CAROLINE: MAYBE THEY’RE SAVING A LITTLE BIT BY APPLE NOT GETTING A CUT ON THE CHAP GPT APP FOR NOW, BUT WE THANK YOU.
THAT WAS A PERFECT SUMMARY. MEANWHILE, COMING UP, WE’LL BREAK DOWN BROADCOM’S PRETTY SENSATIONAL RESULTS. SHARES SURGING AS TIM OUTLINED EARLIER. IT’S ALL ON A.I.
DEMAND. BUT WE WANT TO GO BACK TO WHAT’S HAPPENING OVERSEAS. CHINESE E.V. MAKER TRADED HERE IN THE U.S., WENT HIGHER ON THE DAY. THAT’S AS WE STOP TO DIGEST THE E.U. TARIFFS, WHICH INITIALLY WAS A SHOCK, BUT ACTUALLY WE THINK THIS IS SLIGHTLY LESS OF A TARIFF THAN HAD BEEN ANTICIPATED, 17%, AND IF THEY’RE GOING TO CONTINUE TO SELL INTO EUROPE. THIS IS "BLOOMBERG TECHNOLOGY."
♪ TIM: SHARES OF BROADCOM SURGING AFTER THE COMPANY REPORTED EARNINGS THAT WERE BOOSTED BY DEMAND FORAY PRODUCTS. JOINING US NOW FOR MORE IS OUR REPORTER FROM "BLOOMBERG INTELLIGENCE." THESE RESULTS SUCCEEDED ALL ANALYSTS EXPECTATIONS ON THE TOP LINE, BOTTOM LINE, GUIDANCE AS WELL. REMIND US OF THE SPACE THAT BROADCOM PLAYS AND A HUGE APPLE SUPPLIER, OF COURSE, BUT TELL US ABOUT THE A.I. ELEMENT HERE. >> THEY HAVE TWO CORE BUSINESSES.
ONE IS THE ACCELERATORS, WHICH IS ALTERNATIVE TO WHAT SOMEONE LIKE THEY LIKE. SO MAINLY LARGE CLOUD PLAYERS AND HYPER SCALERS LIKE GOOGLE, META, MICROSOFT, ETC. THE SECOND IS THE A.I. NETWORKING OR OVERALL NETWORKING BUSINESS, WHICH UNTIL NOW WAS THE BIGGEST PIECE, WHICH IS WHERE THE PIPELINE THAT RUNS THE DATA CENTER OUTSIDE OF THE G.P.U. MEMORY THAT’S BASICALLY ALL THE NETWORKING COMPONENTS. CAROLINE: WE HAVE CLEARLY SOME COMPETITOR
INCHING INTO THE SPACE WHEN YOU THINK OF NVIDIA. IT’S A GOOD, STRONG NUMBER, TOO. WHAT’S ALSO INTERESTING IS THEY’RE TAKING A LEAF OUT OF NVIDIA’S BOOK, DOING A STOCK SPLIT. >> YEAH, I MEAN, THAT SEEMS TO BE THE TREND THESE DAYS. YOU GET GOOD RESULTS, AND YOU SEE WHAT HAPPENS, DOUBLE-DIGIT STOCK GROWTH. I THINK FROM A COMPILING POINT OF VIEW, IN THE NEAR TERM, IN TERMS OF USE CASE, WE DON’T THINK THEY’RE REALLY COMPETING WITH EACH OTHER, BECAUSE THE USE CASE RIGHT NOW ARE DIFFERENT AND THERE’S NO HURDLE TO SEE GROW FOR BOTH COMPANIES. IN THE LOCK TERM, IT’S MORE IN
THE USE CASE. THE CLOUD PROVIDES AND HYPER SCALERS WOULD HAVE LIMITED BUDGET TO SPEND. CAROLINE: AND DESIGNING THEIR OWN CHIPS SLOWLY BUT SURELY. REALLY INTERESTING. WE THANK YOU SO MUCH.
IS ALL THE PLAY ABOUT THE INFRASTRUCTURE SPACE, THE PICKS AND SHOVELS, WHAT ABOUT THE LARGE MODELS? WE GOT THE PERFECT VOICE TO REALLY DOVE TAIL THAT WITH FEDERAL POLICY RESERVE. JOE USED TO WORK AT THE FED, SO YOU’RE THE PERFECT PERSON TO OUTLINE WHETHER, IN THIS ENVIRONMENT, WHERE EVENTUALLY WE MIGHT GET ONE OR TWO CUPS THIS YEAR IN TERMS OF OVERALL POLICY, YOU SHOULD BE PUTTING YET MORE MONEY INTO BROAD CAM, NVIDIA, INTO OTHER PLAYS? >> LOOK, I’VE TAKEN A STEP BACK. THERE WAS A HUGE BUILDOUT, AND THERE’S A COUPLE OF WAYS TO EMPLOY THIS MARKET. YOU CAN PARTICIPATE IN A G.T.F., PICK THE WINNERS, BUT I THINK WHAT I’M THINKING ABOUT IS, THERE ARE SOME NAYSAYERS WHO ARE SAYING THIS A.I. BUILDOUT, WE’RE GOING TO SEE
THE PERK IN A COUPLE OF YEARS. I PERSONALLY THINK THIS GROWTH PHASE WILL PROBABLY GO ON YEARS. WHAT THEY’RE NOT SAYING IS THAT THERE’S GOING TO BE A LOT OF INCREMENTAL DEMAND FROM SOME OF THE TECH LAGGERS. THERE’S FOREIGN BUYERS FROM, LET’S SAY, EUROPE AND THE EMERGING MARKETS, AND LASTLY, WHAT WE’RE ALSO THINKING IS THERE’S GOING TO BE A LOT OF TRAINING AND RETRAINING OF A.I. A.I. IS LIKE SOFTWARE. EVERY TIME ON YOUR IPHONE, UPDATE IT EVERY SINGLE WEEK.
SO IN A.I., AS NEW DATA BECOMES AVAILABLE, YOU HAVE TO UPDATE THE A.I., RETRAN. I PERSONALLY THINK THAT THE A.I., THEY HAVE A LOT OF ROOM TO GO. TIM: STICKING WITH YOUR EXPERIENCE ON THE FEDERAL RESERVE, BECAUSE LOOK, AT THE END OF THE DAY, RATES ARE PRETTY MUCH EVERYTHING WHEN WE’RE TALKING ABOUT THIS STUFF. I WONDER HOW YOU THINK ABOUT THESE HIGH-FLYING TECH COMPANIES AND WHAT EXACTLY IS PRICED IN WITH REGARD TO RATE CUTS. ARE WE GOING TO SEE STILL MOVES
HIGHER EVEN AFTER THE FED DOES CUT RATES, OR IS THAT ALREADY PRICED IN? >> AS A FORMER STAFFER, NOW A FOUNDER IN OUR FIRM, I VIEW THAT AS IT’S IMPORTANT TO LOOK AT THE LONG-TERM DIRECTION. IN ECONOMICS, THERE’S A SAYING, WE’RE 90% CONFIDENT, WE’RE PROBABLY 90% THERE’S GOING TO BE AT LEAST ONE RATE CUT SOMETIME IN THE NEXT NINE MONTHS. WHETHER IT STARTS IN JULY, SEPTEMBER, DECEMBER, OR JANUARY, I THINK IT’S NOT AS IMPORTANT TO ME AS AN INVESTOR, BECAUSE YOU KNOW THAT THE DIRECTION OF THE RATES ARE COMING DOWN. SO WHAT THAT MEANS, WHAT YOU CAN DO IS, I THINK THERE’S ONE MORE THING THAT I THINK THE STREET OFTEN GETS WRONG ABOUT, THE I THINK THE STREET PUTS SO MUCH EMPHASIS ON IT. WHAT I WOULD DO IS PROBABLY PUT 60% ON THE CHART AND PUT 40% OF YOUR OWN ANALYSIS INTO THE THINKING, SO YOU COME UP WITH YOUR OWN FRAMEWORK TO WHAT YOU THINK IS GOING TO BE THE PATH OF INTEREST RATES, AND THEN PUT THAT INTO YOUR MODEL ON EXCEL, AND THEN YOU CAN SORT OF FIGURE OUT WHAT YOU THINK IS FAIR VALUE ON THE S&P, ON THAT, ON THE STOCKS.
FOR ME, I TAKE A STEP BACK. I THINK THERE’S A RATE COMING, AND THEN THEY’LL HELP ME MAKE BETTER DECISIONS AS AN INVESTOR. CAROLINE: YOU’RE BETTING ON THE TREND, AND YOU’RE BETTING ACTUALLY ON PRIVATE COMPANIES. ON PROFIT, SOME OF THE LARGE LANGUAGE MODELS, SO SET FOR US WHERE THE MONEY IS ALLOCATED IN THIS SPACE. IS IT THE LARGE LANGUAGE MODELS, AND AT WHAT POINT DO WE SEE MORE MONEY APPLE INDICATED TO THE USE OF THESE LARGE LANGUAGE MODELS? >> YEAH, SO, YOU KNOW, THERE’S SORT OF SIX BROADER THEMES OF TRAINING I HAD. IF YOU START FROM THE VERY BOTTOM, YOU HAVE ELECTRICITY, YOU HAVE DATA CENTERS, YOU HAVE COOLING CENTERS, AND ON TOP OF THAT, YOU’LL HAVE CHIPS, AND YOU HAVE THE DATA OWNERS, LIKE THE SEVEN, AND ON THE PATH YOU HAVE LARGE LANGUAGE MODELS, AND THEN YOU NEED HUMAN TALENT, SMART PEOPLE TO TRAIN THE A.I. AND WORK ON IT, AND THE LAST
THING YOU NEED, WE’RE GOING TO BUILD THE APPLICATIONS. I THINK AS AN INVESTOR, EVEN OBVIOUSLY THIS TRADE IN PUBLIC MARKETS BY BUYING PUBLIC STOCK, BUT IN PRIVATE MARKETS, WHAT WE’RE DOING IS SORT OF LIKE, WE’RE SORT OF E.T.F. IN THE PRIVATE MARKET, AND INVESTED, BECAUSE THESE ARE INNOVATIONS COMPANIES HAVE IN THE PRIVATE MARKETS, BUT THERE’S ALSO OTHER WAYS TO PLAY THIS TRADE, BECAUSE YOU CAN ALSO INVEST IN UTILITY, BE BUYING DATA CENTERS. I THINK THERE’S DIFFERENT WAYS, BUT I THINK THE FUNDAMENTAL THESIS YOU MIGHT HAVE IS THAT IT’S A FOREGONE CONCLUSION WHETHER A.I. IS REAL. IN FACT, I THINK A.I. IS GOING TO BE SQUARE, I THINK THE BIGGEST QUESTION I HAD IS A.I. REGULATION, BUT THAT ASIDE, I THINK WHEN YOU TAKE A STEP BACK AND LOOK AT SOME OF THE COMPANIES IN THE A.I. TRADE, WE’RE AT A VERY
BEGINNING. YOU CAN THINK OF IT LIKE A 2-YEAR-OLD BABY. THE SAYING IS IF THIS BABY AT 2-YEAR-OLD CAN DO WHAT IT CAN DO, IMAGINE WHEN THAT BABY MATURES AS AN ADULT, HOW MUCH MORE THAT PERSON CAN DO. TIM: AS A VENTURE CAPITALIST, YOU’RE THINKING ABOUT THAT BABY AS AN ADULT. PANT A PICTURE FOR US ABOUT
WHAT A.I. CAN DO WHEN IT’S 19 YEARS OLD. >> YEAH, THEN WE’RE TALKING ABOUT THE SECT LAYER, WHICH IS THE APPLICATION LAYER. IT’S CALLED VIRTUAL SOFTWARE, WHICH IS YOU CAN APPLY A.I. IN CYBERSECURITY, ROBOTIC, AUTOMATION. THERE’S A COMPANY THAT’S
COMBINING ROBOTICS WITH A.I. SO YOU CAN ALSO DO RESEARCH, MANY OTHER FIELDS THAT WE HAVEN’T EVEN THOUGHT ABOUT, THERE’S ONE THING I GOT TO SAY THAT’S REALLY, REALLY IMPORTANT. WHEN WE THINK BACK OF THE LAST 200 YEARS, WHETHER IT WAS ELECTRICITY, THE ENGINE, THE INTERNET, HOW DID WE AS A HUMANITY CREATE THAT? WE DID IT WITH HUMAN INTELLIGENCE. PEOPLE WORKING TOGETHER. WHAT HAPPENS NOW WHERE YOU CAN RE-CREATE INTELLIGENCE, YOU CAN RE-CREATE MANY, MANY, SO THERE’S MANY POSSIBILITIES THAT WE CAN CREATE. SO WHAT I’M TRYING TO SAY IS,
PINK HOW WE NURTURE THIS TECHNOLOGY IN A WAY THAT’S GOING TO HELP COMMUNITY MOVE FORWARD AND GROW IN A WAY THAT’S RESPONSIBLE. TIM: THANKS SO MUCH FOR JOINING US, CERTAINLY DO APPRECIATE IT. COMING UP NEXT, WE PUSH AHEAD TO ADOBE’S RESULTS AS THEY RAMP UP TO REPORT THEIR PROGRESS AFTER THE BELL. CAROLINE: IN EUROPE, I’M AFRAID NOT
EVERYTHING IS ON THE UP AND UP TODAY N. EUROPE, WE’RE ON THE DOWN, OFF BY 11%. TWO BILLION POUNDS GONE, $2 BILLION, THE COMPANY’S OUTLOOK FOR REVENUE GROWTH DISAPPOINTED INVESTORS.
THE UNDERLINE INCOME EXPECTED TO CLIMB 15% TO 20%. ♪ CAROLINE: TIME FOR "TALKING TECH." FIRST UP, A.I. MUST GROW BEYOND CHAPEL IN ORDER TO BE PROFITABLE. SPEAKING TO BLOOMBERG, THE
C.E.O. SAID BUSINESSES NEED MORE SPECIALIZED MODELS. HE WENT ON TO COMPARE THE CURRENT A.I. CRAZE TO THE LIKES OF THE DOT-COM BUBBLE OF THE LATE 1990’S. NORWAY HIT META WITH A COMPLAINT OVER THEIR PLANS TO USE IMAGES AND POSTS FROM FACEBOOK AND INSTAGRAM TO TRAIN A.I. MODELS. THE NORWEGIAN CONSUMER COUNCIL SAYS META HAS MADE IT DELIBERATELY CUMBERSOME TO OPT OUT OF THE PROCESS, WHICH WOULD VIOLATE E.U. RULES. MEANWHILE, SAM ALTMAN SAYS THE COMPANY IS ON PACE FOR A $3 BILLION ANNUAL REVENUE. THEY’RE ADDRESSING STAFF, AND
IN AN ALL-HANDS MEETING WEDNESDAY, HE ADDED THE COMPANY WAS ON TRACK TO GENERATE $200 MILLION WITH ITS A.I. PARTNER HIPP WITH MICROSOFT AZURE. TIM: AFTER THE BELL, INVESTORS WILL BE FOCUSES ON THE COMPANY’S A.I. PROGRESS AND IF CUSTOMERS ARE SPENDING MORE IT.
JOINING US NOW IS BLOOMBERG’S BRODY FORD. GOOD TO SEE YOU THIS MORNING. I’M WONDERING WHERE THE CONTEXT IS HERE.
SHARES ARE DOWN 20%, AND THE COMPANY PLAYS IN AN INTERESTING SPACE, BECAUSE IT PROVIDES A.I. SERVICES, BUT AT THE SAME TIME ITS SOFTWARE ASSIST A SERVICE, WHICH HAS BEEN BEAT UP THIS YEAR, AS COMPANIES HAVE SHIFT THEIR BUDGET MORE TO HARDWARE. WHAT HAS BEAT UP THE COMPANY MORE GOING INTO EARNINGS? IS IT COMPETITION OR IS IT A LACK OF SPEND WHEN IT COMES TO SOFTWARE AND SERVICES? >> YEAH, ADODI IS ONE OF THE MORE INTERESTING -- ADOBE IS ONE OF THE MORE INTERESTING DEBATES OUT THERE. LIKE SOFTWARE, THE QUESTION IS ARE THEY BENEFITING OR REPLACED BY A.I.? ADOBE IS FAMOUS FOR THEIR PHOTO
SHOP, VIDEO THETORS, AND THEY’VE VENTURED INTO THIS NEW FEATURE TO GENERATE IMAGERY IN THERE. THE KEY FOR INVESTORS IS THAT OVER TIME WITH A.I., IF I’M ABLE TO TYPE IN, I DON’T KNOW, TV CHON SCORES TALKING ABOUT TECH, AM I REALLY GOING TO NEED PHOTO SHOP TO DO THAT? AM I GOING TO NEED A VIDEO EDITOR THAT? ARE SMALL BUSINESSES GOING TO STOP USING THESE LICENSES SO MUCH, RIGHT? SO ADOBE HAS SPOKEN A BIG GAME ABOUT A.I. UPLIFT FOR PROBABLY OVER A YEAR NOW. IT REALLY HASN’T SHOWN UP IN THE NUMBERS. SO INVESTORS ARE STARTING TO
FEEL LIKE, HOLD ON, MAYBE THESE NUMBERS AREN’T GOING TO REALLY COME. CAROLINE: BRODY, THE NUMBERS AIN’T THAT BAD IN TERMS OF GROWTH OF 10% FOR REVENUE, AND ACTUALLY, CONSISTENTLY GOING TO BE ABOUT 10%, 11% FROM THE NEXT FEW YEARS. WHERE IS THE ANXIETY GOING TO SHOW UP? WHERE ARE WE GOING TO SEE THEM ERODING SOME OF THE GAIN? >> YEAH, IT IS FOR SURE A LONG-TERM RISK. I HAVEN’T SEEN A WHOLE LOT OF EVIDENCE OF COMPANIES, FOR EXAMPLE, ENDING THEIR ADOBE LICENSES AND SAYING I’M JUST GOING TO USE OTHERS TO GENERATE IMAGES.
THE ANXIETY IS THERE’S A LOT OF NEW SPENDING GOING TOWARD THESE A.I. STARTUPS, AND IN THEORY THAT NEW SPENDING SHOULD HAVE BEEN GOING TOWARD THE SOFTWARE INCUMBENT LIKE ADOBE. IT IS SUCH A SMALL METRIC INVESTORS FOCUS ON HERE. IT’S LIKE NET NEW, THE DIGITAL MEDIA SEGMENT, AND THAT’S GONE DOWN BIT BY BIT, AGAIN, BECAUSE THERE’S THIS SENSE OF HEY, MAYBE THEY ARE NOT GETTING NEW WORK LOADS THAT ARE ENDING UP IN THE HANDS OF RUNWAY OR DOLLY OR MID JOURNEY. TIM: I’M WONDERING WHAT YOU SEE OR ANALYSTS SEE AS THE BIGGEST COMPETITION ON IT THERE RIGHT NOW IN THE UPSTART THAT EXISTS. IS IT THE L.L.M.’S OR IS IT THE BIGGER COMPANIES THAT ARE STARTING TO ADOPT WHAT THE L.L.M.’S KIND OF STARTED DOING EARLIER?
>> IT’S DEFINITELY NOT BIGGER COMPANIES. ADOBE IS THE INCOUPLE DID NOT HEREMENT THE BIGGEST IS CANVA AND HAS BEEN FOR A LONG TIME. THE GREAT AUSTRALIAN STARTUP ARE KNOWN FOR MAKING TEMPLATES YOU MIGHT SEE ON INSTAGRAM OR SEE AT YOUR FRIEND’S WEDDING. THEY JUST MADE IT A LOT SIMPLER TO DO QUICK DESIGN. IT’S A LITTLE CHEAPER. IT’S ALL ON THE WEB. THAT’S WHO ADOBE INVESTORS HAVE BEEN ANXIOUS ABOUT FOR A WHILE. ON THE UPSTART SIDE, IT IS MORE
OF THE LARGE LANGUAGE MODEL MAKERS WHO ARE GENERATING IMAGES. CAROLINE: BRODY, THANK YOU FOR JOINING US. ALL EYES ON ADOBE AFTER THE BELL. MEANWHILE, COMING UP WE’RE GOING TO BE JOINED BY UNFEWITY’S C.E.O. WE’LL TALK ABOUT THE COMPANY’S CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." LET'S GET A CHECK ON THE MARKET. HIGHER WHEN YOU'RE LOOKING AT TECHNOLOGY STOCKS. S&P 500 AT A NEW RECORD. NASDAQ AT A NEW RECORD.
TWO-YEAR YIELD MOVED BY INPATIENT -- INFLATION PRESSURES DIALING BACK. EUROPE TO THE DOWNSIDE. MAYBE A REPAVING OVER THE FEDERAL RESERVE PUSHES RATES AND PEOPLE HAVING ANXIETY OVER THAT. INDIVIDUAL MOVERS. THE RECORD HIGH FOR BROADCOM. 13% ON THE NOSE HIGHER. THE STOCK SPLIT BY TEN. WE WILL PERHAPS SEE MORE RETAIL COMING TO THIS CHIPMAKER. ALSO ON A TEAR WHEN IT COMES TO AI DEMAND. MICROSTRATEGY OFF BY 6%.
CONVERTIBLE NOTES. WHAT IS MICHAEL SAILORS SELLING CONVERTS? TESLA UP BY 3%. IT SEEMS THOUGH SHAREHOLDERS VOTING IN FAVOR OF NOT ONLY OF THE $56 BILLION PAY PACKAGE BUT ALSO THE MOVED TO TEXAS. WILL THE JUDGE THANKS, LILY? -- THINK SIMILARLY? I WANT TO DISCUSS AT INTUIT. INTUIT MAILCHIMP HAS A NEW REVENUE TOOL. PROTECTIVE AND GENERATIVE AI
MODELS DESIGNED TO HELP MARKETEERS WITH MORE REVENUE. SENDING THE RIGHT EMAIL AT THE RIGHT TIME THE RIGHT CONVERSION. THE CEO WILL TALK US THROUGH IT. SASAN GOODARZI JOINING US FOR MORE. THIS IS ABOUT ARTIFICIAL INTELLIGENCE.
YOU HAVE BEEN TALKING UP AI AND REWORKING YOUR BUSINESS SINCE YOU CAME IN CEO. KUDOS TO YOU FOR TALKING ABOUT IT BEFORE THE MARKET DID BUT HAVE LET GENERATE REVENUE FOR YOU? SASAN: THANK YOU SO MUCH FOR HAVING ME. WHAT WE ANNOUNCED IS A REALLY BIG DEAL. LET ME START WITH CONTACTS AND TALK ABOUT WHAT WE LAUNCHED AND HOW IT WILL GENERATE REVENUE FOR INTUIT. THERE ARE THREE BIG THINGS WE DECLARED.
ONE IS SHIFTING FROM BUILDING WORKFLOWS WERE CUSTOMERS DO THE WORK TO GET TO THEIR FINANCIAL OUTCOMES TO WORKFLOWS WHERE WE DO THE WORK FOR OUR CUSTOMERS. THE SECOND ELEMENT IS EMBEDDING AI POWERED EXPERTS, HUMAN EXPERTS WITHIN EVERY WORKFLOW SO THERE'S ANOTHER DEAD-END FOR CUSTOMERS. -- NEVER A DEAD-END FOR CUSTOMERS. OUR EXPERTS SIT ON OUR DATA AND AI PLATFORM AND CAN BE THE ASSISTANT FOR CONSUMERS AND SMALL BUSINESSES. THIRD, TO TAKE THE GAME TO THE MIDMARKET AND SMALL ENTERPRISES AND SERVE OUR CUSTOMERS IN WAYS THEY CAN NEVER IMAGINE POSSIBLE.
SPECIFICALLY, WHAT WE ANNOUNCED ON OUR INTUIT MAILCHIMP PLATFORM IS REVENUE INTELLIGENCE. ONE OF THE THINGS SMALL BUSINESSES CARE ABOUT MOST IS REVENUE GROWTH AND PROFITABILITY GROWTH. WITHIN THAT THEIR CASH FLOW MATTERS A LOT. REVENUE INTELLIGENCE DOES SOMETHING REMARKABLE.
IT LEVERAGES ALL OF OUR CUSTOMERS' DATA ACROSS MAILCHIMP AND QUICKBOOKS AND HELPS THEM WITH UNDERSTANDING HOW THEY CAN DRIVE CUSTOMER AND REVENUE GROWTH. CAROLINE: I'M GOING TO THINK ABOUT IMAGINING IT AS A CONSUMER. I CAN SEE HOW THIS MIGHT BE USING TO MARKETEERS' EARS BUT DO I WANT MORE SMS'S AND EMAILS AND MARKETING HEADING MY WAY? SASAN: IF I FINISHED THE THOUGHT AROUND THE IMPACT IT WILL HAVE TO THE CONSUMER, THE SMALL BUSINESS CAN UNDERSTAND WHICH CUSTOMERS THEY HAVE AN OPPORTUNITY TO PROVIDE MORE SERVICES TO. WHERE THEY CAN DRIVE MORE BENEFITS AND PROFITABILITY .
FOR THE CONSUMER IT LETS YOU USE A COUCH OR NEW CHAIRS AS A FURNITURE STORE. AS A CONSUMER OF THOSE DEVICES OR COUCHES OR CHAIRS I HAVE AN OPPORTUNITY TO KNOW WHAT'S AVAILABLE AND KNOW WHERE I CAN MODERNIZE MY HOUSE. FROM A CONSUMER PERSPECTIVE THE BENEFIT IS SIGNIFICANT. CONSUMERS BELIEVE IT OR NOT,
95% OF CONSUMERS LOVE THE DIGEST SMS. THEY ARE SHORT AND SWEET AND TO THE POINT. IT HAS AN OMA'S IMPACT FOR CONSUMERS. A BIG IMPACT FOR SMALL
BUSINESSES. TO ANSWER YOUR QUESTION, THE MORE WE GET HELP DRIVE REVENUE AND PROFITABILITY GROWTH FOR SMALL BUSINESSES THE MORE WE HAVE THE CAPABILITY TO MONETIZE AND BE ABLE TO DRIVE GROWTH FOR INTUIT. WE ARE VERY EXCITED ABOUT WHAT WE LAUNCHED TODAY. CAROLINE: I WANT TO TALK ABOUT THE TRIP -- TIM: I WANT TO TALK ABOUT THE TURBOTAX BUSINESS. LOOKING FOR CUSTOMERS WHO USE
HUMAN ACCOUNTS TO ADOPT TURBOTAX AND NOT USE THEM ANYMORE. THERE'S A REASON I'M ASKING THIS QUESTION. I WOULD IMAGINE YOU HAVE A VERY COMPLICATED TAX SITUATION AS THE PRESIDENT AND CEO OF THIS COMPANY. DO YOU USE TURBOTAX FOR YOUR
TAXES? SASAN: GREAT QUESTION. LET ME START WITH ANSWERING YOUR FIRST QUESTION AND THEN YOUR SECOND ABOUT MYSELF. FIRST AND FOREMOST, THERE'S A $35 BILLION TOTAL ADDRESSABLE MARKET. OF THAT $35 BILLION, $30 BILLION IS CONSUMERS AND SMALL BUSINESSES THAT GO TO SOMEBODY ELSE TO HAVE THEIR TAXES DONE.
THAT IS WHERE WE HAVE BUILT OUT THE PLATFORM WHERE IT SITS ON A DATA AND AI PLATFORM AND WE CAN DO YOUR TAXES FOR YOU. I DO NOT USE TURBOTAX BECAUSE IT'S FROM A GOVERNANCE PERSPECTIVE THAT SOMEONE DOES MY TAXES OUTSIDE OUR PLATFORM. TIM: DO YOU EVER PICTURE A TIME WHEN SOMEBODY WITH US COMPLICATED A TAX PICTURE AS THE EXECUTIVE OF A PUBLIC BETRAY THE TREATY COMPANY CAN ONLY USE A PRODUCT LIKE TURBOTAX FOR THE TAXES? DOES THAT DAY, AND WHEN -- DOES THAT DATY COME AND WHEN? SASAN: TAR EXPERTS CAN DO ANYBODY'S TAXES FOR THEM. IT'S ALL DIGITAL AND AI POWERED, AND WE HAVE MULTIPLE SECOND REVIEWS WITHIN OUR PLATFORM TO ENSURE YOUR TAXES ARE DONE ACCURATELY. YOU'RE EITHER GETTING THE LARGEST REFUND OR IF YOU HAVE A BALANCE DUE THAT YOU ARE PAYING THE RIGHT AMOUNT. ANYBODY CAN DO THEIR TAXES ON A PLATFORM AND HAVE US DO IT FOR THEM. WE HAVE ALL THE EXPERTISE, ALL
THE DATA AND AI CAPABILITIES. WE ARE THE BEST EXPERTS ON OUR PLATFORM. CAROLINE: WE WERE JUST SEEING HOW WELL YOUR SHARE PRICES HAVE BEEN DOING OF LATE. IN MANY WAYS OF LATE WE HAVE SEEN A POP. THERE'S A PRICE INCREASE COMING ACCORDING TO ANALYSTS WHOSE OUTLINING WITH THAT WILL DO FOR YOUR REVENUE.
HOW BIG AN INCREASE ARE GOING TO SEE FOR QUICKBOOKS? CAN YOU GIVE US THE LEVEL REVENUE AND THE PRICE POINT? SASAN: I WOULD START BY SAYING WE HAVE HAD SIGNIFICANT INNOVATION ON THE PLATFORM IN THE LAST YEAR ACROSS ALL THE ELEMENTS OF OUR PLATFORM . WHETHER IT IS THE ABILITY TO BE ABLE TO FEEL YOUR SUCCESS OR DRUG OR PROFITABILITY, AND/OR HAVING EXPERTS TO HELP YOU RUN YOUR BUSINESS AS A SMALL BUSINESS. WE ALWAYS PRICE FOR VALUE. THIS IS SORT OF IN LINE WITH OUR PRICING STRATEGY AND PRICE PRINCIPLES WHERE WE ARE RAISING PRICES ALL THE WAY FROM THOSE THAT TODAY START OUT TO FEEL THEIR SUCCESS AND FOLLOW THEIR PASSION TO MIDMARKET CUSTOMERS. WE HAVE GOTTEN GREAT FEEDBACK
RELATIVE THE INNOVATIONS WE HAVE DELIVERED IN THE LAST YEAR. WE ARE SIMPLY PRICING FOR VALUE AND WE ARE EXCITED ABOUT THE POSSIBILITIES. TIM: I WANT TO TALK ABOUT MINT BECAUSE THERE WAS SADNESS WHEN YOU GUYS SHUT MINT DOWN. I'M WONDERING IF YOU HAVE SEEN THOSE CUSTOMERS MOVE OVER TO CREDIT KARMA'S PRODUCTS? SASAN: WHAT -- WHO HAD SERVED, IT SERVED PRIME CUSTOMERS. THOSE THAT GENERALLY HAVE CREDIT SCORES ABOVE 700.
WHEN WE THOUGHT ABOUT OUR VISION AS A CONSUMER PLATFORM WE WANT TO HAVE A SELF-DRIVING PLATFORM WHERE WE CAN SERVE YOU EARLY IN LIFE TO BUILD YOUR CREDIT ALL THE WAY TO HOW YOU BUILD WEALTH OVER TIME. GIVEN THAT VISION WE BROUGHT MINT AND CREDIT KARMA TOGETHER TO SHARE -- SERVE OUR CUSTOMERS FOR THOSE THAT HAVE GREAT CREDIT SCORES BUT ALSO HAVE DIFFERENT NEEDS ALL-IN-ONE PLATFORM. WE HAD MORE THAN WHAT WE ASSUMED CONVERT TO CREDIT KARMA.
THE MAJORITY OF OUR CUSTOMERS CONVERTED TO CREDIT KARMA PARTICULARLY BECAUSE OF ALL THE CAPABILITIES WE HAVE ON CREDIT KARMA TO BE ABLE TO SERVE OUR PRIME CUSTOMERS. THERE ARE A SMALL COHORT OF CUSTOMERS THAT DID NOT CONVERT. THEIR LOVE IS BUDGETING TOOLS, BUDGETING GOALS AND THOSE ARE SOME OF THE CAPABILITIES THAT OVER TIME WE ARE BUILDING AT CREDIT KARMA BUT ARE NOT AVAILABLE TODAY. SOME CUSTOMERS WERE VERY SAID THAT MINT WENT AWAY BUT MANY ARE DELIGHTED TO BE ON CREDIT KARMA NOW. CAROLINE: I'M INTERESTED -- WE GOT SOME RECENT NEWS THAT THERE WILL BE A FREE TOOL TO FILE DIRECTLY WITH THE IRS. ULTIMATELY TO BE IN CHARGE OF THEIR OWN TAXES.
ARE YOU GOING TO LOSE PEOPLE TO THIS FREE TOOL? SASAN: THE SHORT ANSWER IS NO BECAUSE FREE IS AVAILABLE TO ALL AMERICANS TODAY. WITH WHAT THE IRS HAS LAUNCHED ITS ANOTHER FREE TOOL. IT'S NOT A THREAT TO US, BECAUSE FREE IS ALREADY AVAILABLE ACROSS ALL PRIVATE COMPANIES. WE DON'T BELIEVE IT IS THE BEST USE OF GOVERNMENT MONEY TO COME OUT WITH ANOTHER TOOL THAT IS FREEWARE FREE IS ALREADY AVAILABLE. IT IS NOT THE BEST USE OF MONEY. WE WOULD LOVE TO SEE MORE MONEY GO TOWARDS THE SERVICE THAT THE IRS PROVIDES AND TAKE GOOD CARE OF THE CITIZENS. AS FAR AS THE THREAT FOR US, IT
REALLY IS NOT. TIM: SASAN GOODARZI, THANK YOU SO MUCH FOR JOINING US. SASAN: THANK YOU FOR HAVING ME. TIM: COMING UP, AMBER ATHERTON WILL TALK ALL THINGS GAMING AND VC.
THIS IS BLOOMBERG. 3:00 P.M. EASTERN. THIS IS BLOOMBERG. ♪ AND TODAY'S VC SPOTLIGHT DOES TALK ABOUT THE HEALTH OF THE VIDEOGAME INDUSTRY, OF SOCIAL NETWORKS, AND GROUPINGS AND AN UPTICK INVESTMENT IN THE SECOND HALF OF THE YEAR. AMBER ATHERTON IS WITH THIS -- US. YOU ARE ALL IN ON NETWORKS OF PEOPLE, OF THINKING AND GAMING INTERACTION ONLINE. WHAT IS ARTIFICIAL INTELLIGENCE DOING TO THE CONVERSATIONS AT THE MOMENT? AMBER: GOOD TO BE BACK. THANK YOU FOR HAVING ME.
AFTER SELLING MY STARTUP TO DISCORD I SAW FIRSTHAND THIS YOUNGER GENERATION SEES GAMING NOT AS ENTERTAINMENT BUT AS A SOCIAL NETWORK. IT IS WHERE THEY HANG OUT WITH FRIENDS. YOU ARE SEEING US MOVE TOWARDS A MORE COMMUNITY-DRIVEN MULTIPLAYER INTERNET.
WHEN YOU SEE AI AS PART OF THAT STORY, IF YOU LOOK AT NVIDIA AND MICROSOFT, ALL THESE ARE COMPANIES THAT STARTED OUT SERVING THE GAMING MARKET. IT IS NOT A SURPRISE THEY NOW HAVE AN EDGE ON AI, BECAUSE THEY STARTED OUT SERVING GAMERS WHO ARE EARLY ADOPTERS TO NEW PLATFORMS. THEY HAVE HUGE DEMAND FOR GRAPHICS AND INFRASTRUCTURE. WE ARE EXCITED ABOUT STARTUPS USING GAMING AS A WEDGE TO FURTHER IMPROVE AI. TIM: I WANT TO TALK ABOUT WHEN OF YOUR RECENT INVESTMENTS. WE WERE TALKING ABOUT IT
EARLIER. FARIA -- ARIA ANNOUNCED YESTERDAY. AI GOES INTO THE BACKGROUND THERE WITH THIS AI POWERED CONCIERGE. TALK ABOUT WHAT EXACTLY THIS INVESTMENT IS. IT IS NOT COMPLETELY IN THE
WORLD OF GAMING, AS IN YOU ARE PLAYING GAMES AGAIN SOME OF THE ELSE IN A VIRTUAL WORLD. IT TAKES A REAL-WORLD APPROACH. AMBER: EXACTLY. PART OF PATRON'S THESIS IS GAMING CAN BE A SOURCE OF GOOD AND BETTER GOODNESS FOR THE WORLD. WHEN WE ARE LOOKING AT GAMING IT IS FROM A BROADER LENS. WE ALSO LOOK AT HOW GAMING IS INFLUENCING CONSUMER TECHNOLOGY. ARIA IS A GOOD EXAMPLE. AI DOES NOT HAVE TO COMPLETELY REPLACE HUMAN INTERACTION.
WHAT ARIA IS DOING IS HELPING COUPLES INCREASE THE RELATIONSHIP STRENGTH, BE BETTER PARTNERS TO EACH OTHER THROUGH THIS WONDERFUL HYBRID OF AI, SEARS, PHYSICAL BOXES AND A LOT OF CONTENT. WE LOOK AT IT IN A MUCH BROADER LENS. COMPANIES LIKE ARIA HAVE A GREAT SHOT OF USING AI IN A WAY THAT DOESN'T ISOLATE HUMAN CONNECTION. CAROLINE: DIGITAL HUMAN BEINGS IS THE THESIS AROUND ALTEARA. YOU ARE INVESTING ALONGSIDE ERIC SCHMIDT ON THIS ONE. IT'S ABOUT LAB BUILDING AGENTS. WILL YOU BE GAMING ALONGSIDE
AGENTS OR ARE THEY WITHIN YOUR WORLD ONE IS CREATING? AMBER: IT'S VERY RARE AS AN INVESTOR TO WITNESS A PARADIGM SHIFT IN TERMS OF HOW HUMANS INTERACT WITH COMPUTERS. WHEN WE MET THE FOUNDERS OF ALTERA WE WERE EXCITED ABOUT WHAT THEY WERE BUILDING. IN THE INITIAL PHASES YOU ARE ABLE TO GAME WITH AN AI AGENT INSTEAD OF A FRIEND OR WITH A FRIEND. WHERE THAT IS GOING IS TO WERE
DIGITAL HUMAN BEINGS. I DON'T THINK IT'S INCONCEIVABLE TO THINK IN THE FUTURE WE WILL HAVE AI AGENTS AND AI FRIENDS THAT PROVIDE MORE THAN UTILITY BUT COMPANIONSHIP, FRIENDSHIP, AND YOU CAN PLAY GAMES WITH THEM, THEY CAN ASSIST YOU WITH YOUR LIFE. ALTERA IS AN INTERESTING EXAMPLE USING GAMING AS A WEDGE TO SERVE A MUCH BROADER CONSUMER MARKET. CAROLINE: YOU WROTE A BOOK ABOUT ONLINE COMMUNITIES. THEY ARE REAL PEOPLE HAVING
REAL RELATIONSHIPS VIA THE INTERNET. NOW WE THINK ABOUT HOW WE WILL BE PLAYING AGAINST TOTALLY FALSE AGENTS WHO ARE NOT REAL HUMANS. WE ARE THINK ABOUT BUILDING YOUR OWN INTIMACY THROUGH THE POWER OF AI. ARE YOU FEELING COMFORTABLE WITH THE DIRECTION OF ARTIFICIAL INTELLIGENCE AND HUMANITY AT THE MOMENT? IS IT ULTIMATELY HELPING OR HINDERING IT IN SOME WAY? AMBER: I'M IN THE BUSINESS OF OPTIMISM.
AI IS NOT REPLACING HUMANS. AI IS AUGMENTING HUMANS AND BRINGING A NEW DIMENSION OF FUN AND PERSONALIZATION INTO SO MANY DIFFERENT CONSUMER INTERACTIONS. FOR US AS PATRONS WE INVEST ACROSS THIS SPECTRUM OF PLAY. IT'S DIFFICULT TO SEE WHERE CONSUMER TECHNOLOGY NAI IS GOING IF YOU DON'T UNDERSTAND GAMING.
WE ARE EXCITED ABOUT FOUNDERS OPERATING IN THE EARLIEST STAGES AND ARE USING AI TO BE A FORCE OF GOOD IN THE WORLD. TIM: WHO IS THE PLATFORM WINNER IN THE WORLD YOU ENVISION IN THE COMING YEARS? IS IT IOS, ANDROID, NINTENDO, MICROSOFT, SONY OR SOMEBODY WE ARE NOT TALKING ABOUT? AMBER: YOU MENTIONED A LOT OF VERY INTERESTING NAMES WHO ARE ALL EXPERIMENTING AT THE FOREFRONT OF DIFFERENT TECHNOLOGICAL EDGES. WHAETHER IT IS AI.
LOOKING AT THE GAMING STOCKS, DISCORD, REDDIT, AND A COMPANY LIKE WEBTUBNES, THEY ARE VERY INTERESTING IN TERMS OF WEB AND NEXT GENERATION IS SPENDING THE TIME GROWING UP ON GAMES. HALF OF U.S. EIGHT TO 10 EUROS PLAY ROADBLOCKS EVERY DAY. -- EIGHT TO 10-YEAR-OLDS FLAG ROBLOX EVERYDAY. TIM: WE WILL HAVE TO LEAVE IT THERE.
PATRON PARTNER AMBER ATHERTON JOINING US FROM CALIFORNIA. COMING UP, ELON MUSK AND HIS COMPANIES ARE EMBROILED IN DOZENS OF LAWSUITS RANGING FROM FATAL CRASHES BLAMED ON TESLA'S AUTOPILOT SYSTEMS TO CIVIL RIGHTS COMPLAINTS OVER THE TREATMENT OF EMPLOYEES. WE DISCUSSED THE LATEST SUIT AFTER THIS. THIS IS BLOOMBERG. CAROLINE: ON WEDNESDAY, FIVE SPACEX ENGINEERS FOLLOW SUIT -- FILED A LAWSUIT AGAINST ELON MUSK. THIS ESCALATES A -- THEIR LEGAL BATTLE.
IT CLAIMS THAT MUSK POSTED DEMEANING COMMENTARY AND CHOSE TO FIRE EMPLOYEES FOR SPEAKING UP. EIGHT EMPLOYEES HERE. THIS IS NOT THE FIRST TIME WE HEARD FROM THEM. >> THAT'S RIGHT.
THIS IS A CASE FROM 2022 IN WHICH WORKERS AND ENGINEERS SAY THAT BECAUSE THEY WORKED ON AN OPEN LETTER RAISING CONCERNS ABOUT THE COMPANY'S CULTURE AND MUSK'S BEHAVIOR ASKING IF THE POLICIES ARE BEING APPLIED EQUALLY TO THE CHIEF EXECUTIVE AND WHETHER THIS WAS THE KIND OF CULTURE THEY WANTED TO BRING TO MARS, AS A RESULT THEY WERE FIRED. THEY BROUGHT A CASE TO THE U.S. LIEBERT BOARD -- LABOR BOARD ISSUING A COMPLAINT SAYING THEY WERE ILLEGALLY RETALIATED AGAINST. THAT CASE IS ESSENTIALLY FROZEN BY FEDERAL COURT INJUNCTION. SPACEX RESPONDED BY ACCUSING THE U.S. LABOR BOARD OF HAVING AN UNCONSTITUTIONAL STRUCTURE. THIS IS A DIFFERENT FRONT WHERE
THESE WORKERS ARE SAYING THE COMPANY VIOLATED CALIFORNIA STATE LAW. IN THIS CASE THEY CAN NAME ELON MUSK PERSONALLY AS A DEFENDANT. THEY CAN SEEK DAMAGES THAT THE LABOR BOARD CAN'T. CAROLINE: WE WANT TO GET TO THE RESPONSE FROM SPACEX AND MUSK. THEY PREVIOUSLY DENIED WRONGDOING AND SAID THE FIRED EMPLOYEES VIOLATED POLICIES AND MUSK WAS NOT INVOLVED IN THE TERMINATION. HAVE WE SEEN RESPONSES COMING FROM THE BUSINESS MORE COORDINATED FASHION TO TRY TO TACKLE AT LEAST SOME OF THE ISSUES THAT ARE BEING CIRCULATED AMONGST CITIZENS AND THOSE WITHIN THE COMPANY? JOSH: WE HAVE SEEN IN THE WALL STREET JOURNAL GLENN SHOTWELL THE PRESIDENT SAYING ALLEGATIONS MADE DON'T REFLECT THE CULTURE AT THE COMPANY. THE LAWSUIT THAT THESE FIRED
ENGINEERS FILED SEEKS TO GET A COURT TO FORCE THE COMPANY TO CHANGE HIS POLICIES TO ADDRESS WHAT THEY SAY IS THE COMPANY AND CEO KNOWINGLY CREATING A HOSTILE WORK ENVIRONMENT AND RETALIATING AGAINST PEOPLE FOR BRINGING IT UP. THEY NOTE MUSK HAS PUBLICLY MOCKED MISCONDUCT ALLEGATIONS AGAINST HIM IN THE PAST. TIM: WHAT COULD THE APPLICATIONS BE FOR SPACE X IF THE ENGINEERS ARE SUCCESSFUL IN THEIR LAWSUIT AND THE APPLICATIONS FOR ELON MUSK AS WELL? JOSH: THEY ARE SEEKING DAMAGES. THEY ARE SEEKING AN INJUNCTION THAT WOULD FORCE THE COMPANY TO CHANGE HIS BEHAVIOR.
ONE QUESTION HERE IS HOW MUCH THE ENTITIES SPACE X CONTRACTS WITH CARE ABOUT THIS, INCLUDING THE U.S. GOVERNMENT. ELON MUSK HAS SHOWN TOLERANCE FOR CONTROVERSY AND FOR LEGAL BATTLES AND APPEALS. WE WILL SEE IF THE COMPANY CHOOSES TO CHANGE ANYTHING IN RESPONSE TO THIS ESCALATING CONTROVERSY. TIM: DOESN'T HAVE IMPLICATIONS FOR TESLA OR ELON MUSK'S OTHER COMPANIES? JOSH: PEOPLE SAID THEY SEE PATTERNS AT EACH OF THESE PLACES IN TERMS OF THE COMPANY'S BEHAVIOR AND IN TERMS OF THE CEO'S WILLINGNESS TO CONTINUE TAKING THE APPROACH HE HAS TAKEN IN THE FACE OF PUBLIC EMBARRASSMENT AND ALLEGATIONS. THE COMPANY HAS DENIED WRONGDOING. TIM:
JOSH TITLE VII -- IDELSON, THANK YOU. CAROLINE: THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY ." DON'T FORGET TO CHECK OUT OUR PODCAST ON THE TERMINAL AND ONLINE ON APPLE, SPOTIFY. THERE IS MORE TO DO JUST GOING FOR THE REST OF THE DAY. TIM: SHOULD WE DO THIS AGAIN TOMORROW? CAROLINE: YOU CAN STOP BY. MAKE YOUR DAY A LITTLE LONGER. WE WILL BE WATCHING THE
ALL-IMPORTANT TESLA AGM LATER. THIS IS "BLOOMBERG TECHNOLOGY."
2024-06-19 11:38
