Intel Appoints New CEO, FTC's Microsoft Antitrust Probe | Bloomberg Technology
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: FROM NEW YORK, CAROLINE HYDE. >> JACKIE DEVOL LOS, WASHINGTON. CAROLINE: THE FTC CHARGING AHEAD WITH THE BIDEN ANTITRUST PROBE INTO MICROSOFT. INTEL JUMPING FOLLOWING THE NEWS OF A NEW CEO.
A CONVERSATION ON NOW 120 TECH FOUNDERS ARE BOOSTING EUROPEAN TECH. NASDAQ 100 OFF A PERCENTAGE POINT AFTER YESTERDAY WE GOT A REPRIEVE. SELLING YOUR KEY WINNERS LARGELY WITHIN THE MAG SEVEN.
THE EARNINGS FLOW NOT LIVING UP TO EXPECTATIONS. THE CURRENT QUARTER, THE GUIDANCE NOT GOOD ENOUGH. THE FOUR-YEAR GUIDANCE REMAINING THE SAME. INTEL SORES ON THE BACK OF A NEW CEO. HE RETURNS, HE WAS ON THE BOARD BEFORE.
MICROSOFT CONTRIBUTING TO THE POINTS DECLINE. WHAT DOES IT MEAN FOR THE FTC LOOKING INTO THAT ANTICOMPETITION ANALYSIS? JOSH CISCO WITH US. WHAT IS THE FTC DOING. WE THOUGHT A NEW ADMINISTRATION WOULD MEAN LESS SCRUTINY ON TECH GIANTS. JOSH: SINCE BEFORE TRUMP TOOK OFFICE, HIMSELF AND HIS ALLIES MADE IT CLEAR TECH WILL BE A FOCUS OF ENFORCEMENT REGULATORY EFFORTS.
WE ARE UNCERTAIN HOW THAT WILL PLAY. THE FACT THEY ARE CARRYING FORWARD FROM THE BIDEN ADMINISTRATION IS A SIGN THEY WILL KEEP AGGRESSIVE AGAINST THE TECH SECTOR. JACKIE: WHAT OTHER CASES IS THIS COMMISSIONER INHERITING? IT COULD OFFER CLUES. JOSH: HE'S GOT A BUNCH OF STUFF ON COMPETITION ANTITRUST AND THE CONSUMER PROTECTION SIDE, THE AGENCY DOES ENFORCEMENT IN BOTH AREAS. THEY'RE GOING TO TRIAL NEXT MONTH AGAINST META IN A CASE FIRST FILED IN THE INITIAL TRUMP ADMINISTRATION, DECEMBER, 2020 TWO BREAKUP META, THAT IS GOING TO TRIAL IN APRIL. THAT WAS AT THE END OF TRUMP'S
FIRST TERM. LINA KHAN CARRY THAT FORWARD. THEY HAVE A LAWSUIT AGAINST AMAZON THAT COULD LEAD TO MAJOR TO INVESTORS OF AMAZON'S BUSINESS. THAT'S ABOUT A YEAR-AND-A-HALF. ANOTHER LAWSUIT IS CHALLENGING THE PRIME SUBSCRIPTION BUSINESS AND HOW THE FTC SAYS IT DOES NOT ALLOW CONSUMERS TO CANCEL EASILY. THOSE OF THE BIG ONES.
CAROLINE: RESOURCE IS AN ISSUE. THE CONTEXT HERE IS ONE WHERE THE DOJ SEEMS TO BE GOING AFTER THAT GOOGLE INVESTIGATION AND THE TOUGH REMEDIES THEY ARE EYEING TO ENSURE GOOGLE DOESN'T SEEM A LIMITATION ON COMPETITION. FROM THE CONTEXT OVERALL, IT LOOKS AS THOUGH BIG TECH IS NOT GETTING OFF THE HOOK WHEN IT COMES TO AI. JOSH: SOME REGULATORY STUFF AROUND AI SAFETY AND OTHER GUARDRAILS, THAT'S A LITTLE UP IN THE AIR. THEY HAVE MADE IT CLEAR THEY WANT TO SEE MORE THAN THREE COMPANIES DOMINATE TECH FROM NVIDIA CHIPS TO MICROSOFT, OPENAI AND MORE END-USER APPLICATIONS. FOR NOW, IT WILL BE A FOCUS.
JACKIE: JOSH, THANKS FOR JOINING US. FOR MORE ON MICROSOFT AND THE BROADER TECH MARKET. THIS IS NOT THE FIRST TIME MICROSOFT IS DEALING WITH A STRICT FTC. IS THIS SPARKING YOU TO CHANGE THE RISK CALCULUS YOU WERE BETTING FOR THE COMING YEAR OR ARE YOU PUSHING IT OFF? >> I'M NOT BRUSHING IT OFF. THE POTENTIAL IMPACTS, WE HAVE BEEN PREPARED FOR THIS. THIS HAD BEEN TALKED ABOUT. MICROSOFT HAD GOTTEN THEMSELVES IN HOT WATER.
IT HAS BEEN A GENTLER MICROSOFT THAT HAS EMBRACED INTEROPERABILITY. THEY WERE EARLY TO INVEST IN OPENAI AND HAVE GONE ALL IN ON GENAI. OVER THE PAST YEARS, PORTERS, MICROSOFT HAS BEEN DIVERSIFYING, BUILDING RELATIONSHIPS WITH VENDORS. OPENAI HAS BEEN DIVERSIFYING. OCI, STARGATE, CORE WE AVE. IT FEELS LIKE MICROSOFT IS
DOING THE RIGHT THINGS TO SHOW THEY ARE NOT ABUSING THEIR POSITION. IT BECOMES TOUGHER TO MAKE A CASE WITH THE OPENAI RELATIONSHIP WHEN THERE IS INTEROPERABILITY AND COMPETITORS HAVE SIMILAR RELATIONSHIPS. AMAZON WITH ANTHROPIC. ORACLE. GOOGLE WITH DEEPMINE. IT WILL BE A TOUGH ARGUMENT TO MAKE.
CAROLINE: BACK TO THE INAUGURATION OF THE CURRENT PRESIDENT, HOW MANY TECH LEADERS WERE THERE. MANY FELT WE WERE COMING INTO A DIFFERENT FIELD FOR BUSINESS. WILL THAT BE THE CASE? ANY DECENT M&A AGAIN? RISHI: WE ARE PROBABLY GOING TO BE IN A BETTER ENVIRONMENT FOR M&A. IT WILL BE HARD TO GET AWAY WITH THESE ACQUISITIONS WE SAW A DECADE AGO. I STILL THINK WE WILL BE IN A FAVORABLE ENVIRONMENT FOR M&A. THERE WILL BE SCRUTINY TO PROVE THERE IS POWER, TO KEEP BIG TECH IN CHECK. I THINK THE IDEA OF SPLITTING
UP COMPANIES, DIVESTING ASSETS. THIS IS A CONTINUED SHOW OF WANTING TO KEEP THEM IN LINE. JACKIE: HOW DO WE RECONCILE PRESIDENT TRUMP HAS ALMOST ANOINTED CERTAIN COMPANIES IN THE U.S., COULD THAT SHIELD COMPANIES THAT HAVE STAKES MORE FROM FTC SCRUTINY WE ARE SEEING OR WILL WE SEE BROADER SCRUTINY ACROSS TECH? RISHI: I THINK BROADER SCRUTINY AT LEAST RELATIVE TO THE FIRST TRUMP ADMINISTRATION. I THINK IT WILL BE EQUIVALENT TO WHAT WE SAW IN BIDEN. THERE IS A RELATIONSHIP ANGLE TO THIS. YOUR INSTINCT IS ACCURATE.
COMPANIES THAT HAVE TIES TO THE ADMINISTRATION, AT LEAST SOMEWHERE WILL BE MORE PROTECTED. IT'S IN A LOT OF COMPANIES INTERESTS TO HAVE A GOOD WORKING RELATIONSHIP. THE FTC IS AN INDEPENDENT ENTITY. THE CHAIR IS APPOINTED BY THE TRUMP ADMINISTRATION. THE WAY THEY ACT SHOULD BE FULLY INDEPENDENT. FOR MICROSOFT, THE CASE COMES DOWN TO PROVE, THAT THERE ARE ANTITRUST CONCERNS, THE MORE WORK WE DO ON THAT, WE SEE THE MOVES THEY ARE MAKING INDEPENDENT OF EACH OTHER, THE EMBRACING OF OPERABILITY, THE HARDER IT IS TO MAKE A CASE FOR ANTITRUST. CAROLINE:
FOR THE SOFTWARE COMPANIES YOU COVER, YOU COVER A HOST, SOFTWARE HASN'T BEEN IS PUNISHED AS HARDWARE. WE ARE REEVALUATING PREVIOUS WINNERS. ARE WE HITTING A BOTTOM AFTER THE SELLOFF OF THIS WEEK? RISHI: THIS BIG SELLOFF IN SOFTWARE HAS NOT BEEN AS MUCH. A LOT OF HIGH-QUALITY
BUSINESSES ARE DOWN 30%. IT IS CREATING SOME GOOD OPPORTUNITIES. SALESFORCE AND INTUIT ARE INTERESTING, EVEN GOING MORE DOWN THE CAP SPECTRUM. HUB SPOT IS DOWN 30%.
MONGO DB, THE NEXGEN ORACLE IN THE DATABASE SPACE, REALLY COMPELLING. I THINK IT IS CREATING BUYING OPPORTUNITIES. SOFTWARE, LET'S SEE WHAT HAPPENS WITH THE BROADER ENVIRONMENT. SOFTWARE IS VERY MUCH A TARIFF PROOF SECTOR.
THAT IS SOMETHING TO KEEP IN MIND. JACKIE: THANK YOU FOR JOINING US. COMING UP, OPENAI SHARES SUGGESTIONS FOR AI POLICY WITH THE TRUMP ADMINISTRATION. CAROLINE: INTEL. THE REST OF THE MARKET FALLS. INTEL OUTPERFORMS BY 15%. WHY? LIP-BU TAN RETURNS TO THE BOARD. THIS TASK IS TO IMPROVE THEIR
CAPITALIZATION. ♪ CAROLINE: OPENAI RESPONDED TO A TRUMP ADMINISTRATION REQUEST TO SHARE WAYS TO BOOST COMPETITIVENESS IN THE AI RACE. FUNNILY ENOUGH, LESS REGULATIONS SEEMS TO BE THE VIBE. >> IT'S A REAL WISH LIST. OPENAI IS SAYING WE WANT RULES ON COPYRIGHT, MORE INFRASTRUCTURE INVESTMENT. THEY ARE ASKING FOR MORE PROTECTION AND RELIEF FROM THE PATRICK OF HUNDRED -- THE PATCHWORK OF HUNDREDS OF BILLS.
JACKIE: TALK TO US ABOUT WHAT THAT PATCHWORK LOOKS LIKE BECAUSE A LOT OF THESE ARE UNDERWAY. INTERESTING THEY USED THE WORD PREEMPTION. IT ALLUDES TO THE FACT THEY WANT THAT SHIELD. HOW MANY BILLS? SETH: 780 CURRENTLY IN DISCUSSION. THESE RANGE FROM DEEPFAKES TO BIASED SYSTEMS, TO SOME THAT SAID WE MAY HAVE CIVIL LIABILITY HERE IF THERE ARE CRITICAL HARMS FROM AI MODELS. OPENAI IS NOT SO HAPPY WITH
THAT. CAROLINE: THE MINUTE YOU SAID COPYRIGHT, IT MADE ME THINK OF THE U.K. WE HAVE SEEN JD VANCE IN EUROPE. THE U.S. IS ONE CASE. SETH: SOUNDS LIKE OPENAI IS SAYING WE WANT YOU TO ADVOCATE FOR THIS FAIR USE REGIME SAYING WE HAVE A RIGHT TO USE TRENDING DATA -- TRAINING DATA THAT MIGHT BE COPYRIGHTED.
IT COULD BE CRITICAL TO HOW THEY DEVELOP THIS TECHNOLOGY. JACKIE: ANOTHER THING IS THEY WANT TO USE GOVERNMENT HELD DATA LIKE HEALTH CARE DATA TO TRAIN THEIR MODELS. SETH: THAT WILL GO SWIMMINGLY I AM SURE. IF COPYRIGHT BECOMES TOO STRICT, THEY ARE HOPING THE GOVERNMENT CAN PROVIDE A RESOURCE OF OTHER DATA. I AM SURE NOT EVERYONE WILL BE COMFORTABLE USING THEIR HEALTH CARE INFORMATION. JACKIE: THANK YOU FOR JOINING US.
SHARES OF ADOBE SINKING AFTER THE COMPANY GAVE A DISAPPOINTING OUTLOOK FOR REVENUE GROWTH. SALES IN THE CURRENT QUARTER ARE EXPECTED -- IT'S NOT THAT FAR OFF. HELP US UNDERSTAND WHAT INVESTORS ARE WORRIED ABOUT. EXECUTION OR COMPETITION? >> I HAVE BEEN SURPRISED BY THE REACTION. THEY REAFFIRMED GUIDANCE FOR THE FULL YEAR. IN THE CURRENT ENVIRONMENT, NO ONE KNOWS HOW THE ENVIRONMENT SHAKES OUT. THEY GAVE OUT MORE DETAILS.
THE THING WITH ADOBE IS IT IS THE MOST CONTROVERSIAL STOCK IN SOFTWARE. I HAVEN'T SEEN THAT GOING BACK 20 YEARS. IT WAS ALWAYS TRADING AT A PREMIUM. PEOPLE ARE WORRIED ABOUT THEIR CORE CREATIVE BUSINESS AND THE FUTURE OF THAT. BECAUSE OF FREE AI TOOLS, YOU CAN DEVELOP VIDEOS, PICTURES ON THE FLY -- WHY WOULD YOU NEED ADOBE? THAT IS A SIMPLIFIED RISK.
THEY HAVE A STRONG MODE AROUND THEIR PRODUCTS. CAROLINE: EVEN IN THE HARDWARE NAMES, MARVIN L GOT CRUSHED WHEN IT ALSO LIVED UP TO EXPECTATIONS. IF FORECASTS ARE ANY WAY OFF DOWN YOU GO, WHAT ELSE DO ADOBE NEED TO BE DOING? >> PAUL THEY NEED TO DO IS STUDY EXECUTION OVER THE NEXT 24 MONTHS. PUT THIS RISK TO REST THAT THEY WILL GET DISRUPTED BY AI. THAT IS THE SINGLE MOST
IMPORTANT THING FOR THEM. THEY KEEP ON GIVING INFORMATION ABOUT HOW AI'S ENHANCING THEIR BUSINESS. MARKETS SEEM TO BE IN A NOTION OF ACCELERATING GROWTH FOR THE INDUSTRY WHICH IS NOT A GOOD THING FOR AN EARNINGS SEASON COMING UP. I DON'T THINK THERE WILL BE THAT MUCH GROWTH GOING FORWARD NEAR-TERM, WHICH MEANS MORE VOLATILITY FOR THE SOFTWARE NAMES NEXT MONTH. CAROLINE: I LOVE THAT YOU ARE POINTING US TOWARD THE NEXT EARNINGS SEASON. WE ARE STILL WRAPPING UP THIS ONE.
COMING UP, WHAT'S THE RECENT MARKET VOLATILITY? WE WILL DISCUSS WITH MARK KLEIN. CAROLINE: COREWEAVE'S IPO ONE THE MOST ANTICIPATED THIS YEAR. $25 MILLION WORTH OF SHARES. YOURS PUBLICLY TRADED FUND AND YOU DISCLOSE HOLDINGS YOU HAVE. WILL THIS GO PUBLIC? MARK: WE ARE PUBLICLY TRADED FUND THAT INVESTS IN VENTURED BACK COMPANIES. COREWEAVE IS A UNIQUE PROPERTY.
IN 40 YEARS I HAVE NEVER SEEN THE SUPPLY-DEMAND IMBALANCE, THE NEED FOR COMPUTE AND SUPPLY IS SO OFFSET. COREWEAVE SAT RIGHT IN THE PLACE TO TAKE ADVANTAGE OF THAT. THIS IS THE LARGES ST INVESTMENT WE'VE EVER MADE. WE ARE EXCITED ABOUT THE IPO. MARKET VOLATILITY ISN'T GREAT.
I'M SURE YOU HAVE BEEN SPEAKING ABOUT THAT. THEIR BUSINESS MODEL IS SO STRONG, THE MARKET IS GOING TO APPRECIATE IT AND I THINK WE WILL HAVE THE OPPORTUNITY TO GO PUBLIC. CAROLINE: THE MARKET WAS ANXIOUS THAT THEY ARE SO DEPENDENT ON KEY CLIENTS, MICROSOFT BEING ONE.
HOW DO THEY PROVE THAT? THERE ARE NOT MANY HYPER SCALARS OUT THERE. MARK: THERE IS SUCH A LARGE CUSTOMER, THEY DO SERVICE SOME OF THE OTHER LARGER TECHNOLOGY TYPE COMPANIES. THERE ARE NOT THAT MANY THAT NEED IT. IT IS SORT OF LIKE LOOKING AT
THE HEALTH INSURANCE INDUSTRY. A HANDFUL OF INSURERS APPLY FOR EVERYBODY. AS COMPUTE BECOMES LESS EXPENSIVE, THEY CAN DIVERSIFY THEIR CUSTOMER BASE. JACKIE:
HOW ARE YOU ADVISING YOUR PORTFOLIO COMPANIES, PARTICULARLY THOSE THAT HAVE NOT GONE PUBLIC YET? ARE THERE CERTAIN SECTORS THAT SHOULD STAY PRIVATE FOR NOW? MARK: ONE OF THE REASONS WE BUILT THIS 14 YEARS AGO, COMPANIES WANTED TO STAY PRIVATE LONGER. WHEN WE FIRST STARTED SURO, UNDER 100 COMPANIES WERE WORTH $1 BILLION. NOW THERE ARE 20, THERE ARE HUNDREDS OF THEM. BEING PUBLIC IS NOT FOR EVERYBODY. COMPANIES THAT WANT TO GO
PUBLIC HAVE TO UNDERSTAND THE MERITS OF GOING PUBLIC. THE ADVENT OF THE SECONDARY MARKET AVAILABLE NOW FOR THESE LARGER COMPANIES ALLOWS LARGER COMPANIES TO STAY PRIVATE LONGER AND ALLOW THEM TO MAKE A DETERMINATION WHEN IT IS APPROPRIATE FOR THEM TO GO PUBLIC, IF THEY NEED TO GO PUBLIC. CAROLINE: YOU'VE INVESTED BEFORE IN THE KEY WINNERS. WOULD YOU ENVISAGE OPENAI WOULD DO ANYTHING BUT STAY PRIVATE? THEY MUST BE ONE OF THE MOST SOUGHT AFTER HOLDINGS? MARK: OPENAI, WIDELY REPORTED, IS IN THE PROCESS OF GOING FROM A NOT-FOR-PROFIT TO FOR-PROFIT.
CAROLINE: YOU SUPPORT THAT? MARK: I THINK THAT'S APPROPRIATE. IF THEY WANT TO AGGREGATE CAPITAL IN THE WAY THEY NEED TO CONTINUE ON THEIR MISSION TO BUILD OUT A PHENOMENAL COMPANY, THEY NEED A MORE NORMALIZED CAPITAL STRUCTURE. JACKIE: MARK KLEIN, CEO OF SURO. COMING UP, INTEL SHARES JUMPING AFTER THE ANNOUNCEMENT OF A NEW CEO.
♪ CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I AM CAROLINE HYDE IN NEW YORK. LET US CHECK IN ON THE MARKETS AGAIN. A TRADE WAR WITH ANXIETY BETWEEN THE U.S. UP -- THE EUROPE AND U.S. DIALING BACK UP AS SENTIMENT IS PUSHED LOWER AFTER WE GOT A REPRIEVE WITH A LOWER THAN EXPECTED WE ARE OFF BY 1.3 PERCENT. WE MOVE UNDER THE HOOD IS -- ON WHO IS OUTPERFORMING BECAUSE MOST OF THE MAGNIFICENT SEVEN ARE DRAGGING LOW.
BUT LOOK AT INTEL, ONE OF THE BEST POINT PERFORMANCES ON THE OUTSIDE. BECAUSE A BOARD MEMBER COMES BACK AS A CEO. IAN KING HAS BEEN FOLLOWING THE TRIALS AND TRIBULATIONS. IS HE THE RIGHT MAN TO STEER THIS COMPANY BACK TO GOOD FORTUNE? IAN: THE REACTION TELLS YOU THAT PEOPLE ARE CLEARLY HAPPY ABOUT THAT.
AND THEY HAVE SOMEBODY IN A CRUCIAL SEAT ADDED OVER -- AT A CRUCIAL TIME. OR WHETHER IT IS ABOUT HIS CAPABILITIES AND FIT FOR THE ROLE. WE WILL SEE HOW THAT PLAYS OUT ON THE LONG-TERM AND CERTAINLY TODAY PEOPLE ARE HAPPY. JACKIE: TALK TO US ABOUT WHAT THIS HAS LOOKED LIKE IN THE PAST BECAUSE THIS IS THE FOURTH PERMANENT CEO OVER THE LAST SEVEN YEARS.
OUR INVESTORS GOING TO LOOK FOR SOMETHING OTHER THAN A NEW PERSON BECAUSE THE COMPANY HAS SUPPORT FROM THE TRUMP ADMINISTRATION. BUT WHAT OTHER QUESTIONS ARE STILL OPEN ABOUT WHETHER THEY CAN ACTUALLY EXECUTE ON THIS TO STAY RELEVANT? IAN: THAT IS THE GIANT QUESTION AND WE DO NOT HAVE AN ANSWER IN TERMS OF WHAT DIRECTION HE WILL CHOOSE. IT IS MORE OF HOW -- HOW HE WILL MAKE INTEL WHAT IT ONCE WAS OR WHETHER IT WAS A CARETAKER WHO WILL PRESIDE OVER IT BEING BROKEN UP. WE DID NOT GET THE ANSWER AND THAT IN THE THINGS THAT HE PUT OUT PUBLICLY YESTERDAY. THAT WILL BE SOMETHING THAT PEOPLE ARE FOCUSED ON. CAROLINE:
AND THE CHIPS ACT MONEY, ONE IS THAT $8.5 BILLION POTENTIAL HE GOING TO COME HIS WAY? WHAT DO YOU MAKE HIS INTERACTIONS GOING FORWARD WITH THE CURRENT ADMINISTRATION? IAN: THAT IS A WILD CARD FOR ANYBODY IN THE SEMICONDUCTOR INDUSTRY, WHETHER IT IS TRADE OR THE CHIPS ACT OR ANYTHING. ALL ALONG IT HAS BEEN A VERY STRUCTURED SITUATION WHERE YOU HAVE TO BUILD THE PLANTS AND EQUIP THEM AND START PRODUCTION, OTHERWISE YOU DO NOT GET THE MONEY. IT IS A MILEPOST. THEY HAVE TO DO WHAT THEY SAID THEY WOULD DO OR ELSE THEY WILL NOT GET THE MONEY ANYWAY REGARDLESS OF PRESIDENT TURNING ON THEM OR NOT. JACKIE: THANK YOU SO MUCH FOR JOINING US.
NEXT, JANET FROM RBC AND THE HEAD OF MARKET ANALYSIS, THANK YOU FOR JOINING US. LET US KEEP TALKING ABOUT THE SEMICONDUCTOR SPACE. INTEL IS A BIG PLAYER, BUT I WANT TO UNDERSTAND HOW YOU ARE THINKING ABOUT THE SPACE COMING OFF OF A BUSY WEEK THAT GOT RATTLED BY TARIFFS AND OTHER ANNOUNCEMENTS, THE CHIP AND SCIENCE ACT AS ANOTHER. HOW ARE YOU THINKING ABOUT THIS GOING FORWARD? JANET: THANK YOU FOR HAVING ME.
OVER THE LONGER TERM, AI WILL BE RELEVANT IN A VERY KEY DRIVER FOR THE SEMI CONDUCTORS INDUSTRY AND SYSTEM. ON THAT WE ARE STILL CONFIDENT ON THE OUTLOOK AND THERE IS STILL PLENTY OF SUPPORT. UNFORTUNATELY, WE ARE IN A VERY COMPLEX AND UNCERTAIN LANDSCAPE AT THE MOMENT WHERE COMPANIES WITH THE MOST COMPLEX SUPPLY CHAINS ARE LIKELY TO BE AT RISK, AND THAT IS INCLUDING THE SEMICONDUCTOR SECTORS. UNFORTUNATELY, GIVEN THE MICRO BACKDROP, THE STOCKS ARE NOT DOING WELL. BUT I THINK VALUATIONS HAVE BECOME MORE ATTRACTIVE AS A WHOLE. AND I DO BELIEVE THAT YOU CAN PICK THE LEADERS ACROSS THE SEMICONDUCTOR ECOSYSTEM.
AND YOU ARE LIKELY TO STILL DO WELL IN THE LONG TERM. CAROLINE: IS INTEL A LEADER? WOULD YOU PUT THAT COMPANY ALONGSIDE SOME OF THE WINNING FORMULA AS WE HAVE SEEN WITH NVIDIA AT THE TOP OF THE LIST? JANET: FOR NOW, PROBABLY NOT. WE HAVE TO AWAIT MORE STRATEGIC DIRECTIONS FROM THE NEW CEO.
I THINK THAT INTEL FACES CHARRED -- CHALLENGES REGARDLESS OF WHO IS IN CHARGE. ON THE DESIGN FRONT IT IS LETTING COMPETITORS LIKE NVIDIA AND AMD AND AS A FOUNDRY BUSINESS ITS DIRECTION IS NOT CLEAR. THEY REALLY HAVE TO REVIVE THAT BUSINESS IN ORDER TO SECURE THE POSITION IN THE SECTOR. I GUESS WE WILL JUST HAVE TO WAIT AND SEE. APPARENTLY THE MARKET IS VERY ENTHUSIASTIC ABOUT THE NEW CEO. JACKIE: LET US TALK ABOUT SOFTWARE BECAUSE WE HAD A GUEST EARLIER THIS MORNING TELL US THAT THESE SOFTWARE NAMES ARE A LITTLE BIT MORE INSULATED FROM THE TARIFF WOES THAT WE ARE SEEING OTHER NAMES GET BATTERED BY. WOULD YOU AGREE WITH THAT?
HOW MUCH MORE PROTECTION DO THOSE NAMES GET? JANET: I WOULD TEND TO AGREE. IN TERMS OF THE SUPPLY CHAIN IMPACTS, OBVIOUSLY THE HARDWARE AND INDUSTRIAL SECTOR DISSECTOR WOULD BE STRONGER AND THE SOFTWARE WOULD NOT BE HIT. I WOULD AGREE WITH THAT BUT GIVEN THE VARIOUS UNCERTAINTIES THAT WE HAVE HAD ABOUT THESE SOFTWARE COMPANIES AND IF YOU LOOK AT THE MEGA CAP TECH COMPANIES, THEY ARE HEAVILY EXPOSED TO THE DOMESTIC U.S. ECONOMY IN TERMS OF ADVERTISING AND REVENUE AND ETC.. IT JUST DEPENDS ON THE BUSINESS
CYCLE. ARGUABLY LAST 6 -- LESS CYCLICAL AND OBVIOUSLY THE VALUATIONS HAVE COME OFF BECAUSE OF THE SENTIMENT. I THINK IT IS BEST TO STAY CAUTIOUS, BECAUSE WE STILL HAVE POTENTIALLY A RANGE OF UNCERTAINTY COMING FROM THE RECIPROCAL TARIFF FRONT THAT WILL HEAT THE CHANNEL. JACKIE: THE REASON I AM CURIOUS IS THAT MORE RECESSION FEARS HAVE COME TO THE FORWARD. WHEN WE THINK ABOUT THE TECH SECTOR WE DO NOT REMEMBER THE FACT THAT ALL OF THESE SOFTWARE NAMES, MANY OF THEM AND I'M THINKING LIKE THE SOCIAL MEDIA COMPANIES ARE SENSITIVE TO DIGITAL ADVERTISING. HOW MUCH OF THAT IS VULNERABLE TO THE SWINGS IN THE ECONOMY? COULD THERE BE MAUVE OR -- MORE VULNERABILITY GOING FORWARD IF RECESSION FEARS PLAY OUT? JANET: I THINK THERE IS CERTAINLY SOME RISK BECAUSE WHAT WE ARE SEEING IS THE SENTIMENT CHANNEL.
WE HAVE NOT SEEN TOO MUCH AS THE HEAT TO ACTUAL EARNINGS AND THE REAL ECONOMY. THERE IS RECESSION ANXIETY, BUT I WOULD NOT PUT THAT AT A CENTRAL CASE. BUT, IF THAT EVENTUALLY DOES PLAY OUT, I THINK THAT COULD BE MORE TO GO IN TERMS OF THE HIT TO THE EARNINGS OUTLOOK. THAT WOULD BE QUITE BAD TO THESE COMPANIES. BECAUSE ADVERTISING I THINK IS VERY CYCLICAL. AND IT WILL BE THE FIRST TO BE
CUT IF THE COMPANY WANTS TO REDUCE SPENDING. AND IF CONSUMER CONFIDENCE IS FALLING THEN CONSUMERS WILL TIGHTEN THEIR BELTS AND SPEND LESS. THAT IS GOING TO HIT ALL OF THESE COMPANIES EVENTUALLY. AS I SAID, IT IS CURRENTLY THE SENTIMENT THAT IS PLAYING OUT, AND THAT IS NOT REALLY INTO THE EARNINGS. WE JUST HAVE TO WAIT AND SEE. JACKIE: AND WHAT ABOUT OVERSEAS?
SOME OF THE WOES IN THE UNITED STATES MIGHT BE A GAIN FOR LET'S SAY CHINESE STOCKS. EVERY TIME A NEW MODEL COMES OUT OF CHINA IT SENDS U.S. TECH STOCKS FREAKING OUT, ESPECIALLY THOSE WITH EXPOSURE TO AI. HOW ARE YOU THINKING HE -- THINKING ABOUT POSITIONING OUTSIDE THE U.S.? JANET: THEY ARE CERTAINLY MORE ROOM FOR CHINESE TECH STOCKS BECAUSE IT HAS BEEN TO DISS -- TWO DEPRESSED AND INVESTORS HAVE REACHED FOR CHINESE TECH AND THERE IS A BUNCH OF GOOD NEWS INCLUDING A SHIFT IN A TOWN FROM A POLITICIAN AND A BIT MORE WELCOMING.
IN A BIT MORE SUPPORTIVE TO THE PRIVATE SECTOR. AND OF COURSE, THE INNOVATION NAI AND THE BROADENING OUT OF USING AI IN VARIOUS SECTORS. I THINK IN THE NEAR TERM IT IS REASONABLE TO FEEL MORE OPTIMISTIC. THERE COULD STILL BE MORE INFLOWS GOING TOWARDS THAT SECTOR. WE NEED TO BE CAUTIOUS BECAUSE WE UNDERSTAND THE CHINESE STOCK MY CREDIT IS VOLATILE -- STOCK MARKET IS VOLATILE. I DO NOT THINK IT WOULD CHANGE AND I THINK THERE IS A LOT OF VOLATILITY AND PROFIT-TAKING ACTIVITY IF THE INDEX GOES UP. WE HAVE TO BE A BIT MORE
CAREFUL. JACKIE: IT SEEMS LIKE FOREVER AGO THAT THE MARKET WAS SPEAKING -- WAS FREAKING OUT ABOUT DEEPSEEK AND ALL OF A SUDDEN WITH EARNINGS COMING OUT HAS BEEN REAFFIRMED AND INVESTORS SEEM REASSURED THAT WE ARE PAST THIS. DO YOU SEE THE DEEPSEEK FEARS SHOWING UP ANYWHERE AND IF THAT IS SOMETHING THAT WILL DRIVE THE MARKET GOING FORWARD? JANET: YES. I THINK THAT IS SOMETHING THAT WE ARE OF THE VIEW THAT DEEPSEEK'S APPEARANCE SHOWS THAT THESE MODELS CAN BE MORE RUN IN AN EFFICIENT WAY AND THEREFORE THE COST OF RUNNING AND TRAINING WHAT ACTUALLY STIMULATE DEMAND IF THE COST GOES DOWN, SO MORE PEOPLE WILL BE USING IT. ULTIMATELY, THAT WILL BE
BENEFICIAL. AT THE SAME TIME, THE THING IS THAT WE DO NOT KNOW YET. IF YOU DO NOT GET THE LATEST EARNING RESULTS FROM NVIDIA, YOU WILL NOT BE ABLE TO SEE THAT IMPACT YET. IT IS MORE DISTANT IN THE FUTURE, WHETHER THE HYPER SCALARS WILL REDUCE THEIR CAPITAL SPENDING. SO, THERE IS A LOT OF QUESTIONS THAT ARE YET TO BE ANSWERED. AND FROM OUR VIEW, IF YOU LOOK BACK IN THE HISTORY OF THE SEMI CONDUCTORS OF THE COST OF IMPACT AND DEMAND. USUALLY WHEN THE COSTS ARE
LOWER THAN EVENTUALLY DEMAND GROWS EXPONENTIALLY. OF COURSE YOU ALSO HAVE TO CONSIDER THAT THE PIE WILL BE SHARED BY MORE PLAYERS. SO I THINK THAT JUST FOCUSING ON ONE OR TWO PARTICULAR LEADERS IS POTENTIALLY MORE RISKY. THAT IS WHY OUR STRATEGY IS TO ALWAYS GET EXPOSURE TO A WHOLE RANGE OF THE STOCKS IN THE SEMICONDUCTOR ECOSYSTEM. JACKIE:
WE DO NOT HAVE A CRYSTAL BALL. THANK YOU SO MUCH FOR JOINING US. MORE COMING UP NEXT. THIS IS BLOOMBERG. ♪ TUNE IN TOMORROW FOR AN INTERVIEW WITH THE CEO OF PALANTIR. THIS IS BLOOMBERG TECHNOLOGY.
TIME FOR TALKING TECH. SPACEX IS THE LATEST MISSION TO BRING BACK TWO STUCK ASTRONAUTS FROM THE INTERNATIONAL SPACE STATION. AND THE MISSION WOULD HAVE LAUNCHED A NEW CREW TO THE ISS AND BROUGHT BACK THOSE TWO ASTRONAUTS. THE LAUNCH HAS BEEN RESCHEDULED TO TAKE PLACE NO EARLIER THAN TOMORROW EVENING. ALIBABA LAUNCHED A NEW VERSION OF ITS QUARK AI AGENT.
QUARK UTILIZES ITS OWN REASONING MODELS AND IS THE LATEST ATTEMPT TO KEEP PACE WITH CHINA RIVALS. SHARES OF THE LIVER -- DELIVEROO ARE FALLING SINCE 2022. IT GAVE AN EARNINGS FORECAST THAT DISAPPOINTED INVESTORS AND COMES DAYS AFTER IT ANNOUNCED THAT IT WOULD THE HONG KONG MARKET. JACKIE: THE HEAD OF ALIBABA GROUP'S ORIGINAL CORE BUSINESS SAYS THE USE OF VARIOUS AI IMPLY CAP -- APPLICATIONS ARE HAVING A PROFOUND IMPACT. EARLIER THIS WEEK ALIBABA.COM'S PRESIDENT TOLD BLOOMBERG THAT ITS VENDORS ARE HAVING AN EASIER TIME FINDING NEW MARKETS. TAKE A LISTEN. >> TAKE THE BUYER AS AN EXAMPLE. SO IF WE SEARCH FOR THE
INFORMATION OF THE PRODUCT, AS IN THE SEARCH VOLUME FOR THE INFORMATION PART 10 TIMES THEN THE PRODUCT PART. SO IF YOU WANT TO START A BUSINESS HE WOULD NOT SPECIFICALLY GO TO A PRODUCT OR THOSE KIND OF SUPPLIERS. YOU WILL COME UP WITH THE IDEA OF WHAT IS TRENDING AND WHAT SPECIFIC KIND OF TEXTILE YOU WILL USE IN YOUR PRODUCT.
AND THEN, IT COMES TO THE PRODUCTS. SO NOW USING AI WE HAVE THIS MODALITY AROUND THE DIALOGUE SEARCH. A LOT OF PEOPLE, IT IS MORE EASY TO DO BUSINESS ONLINE. AND FOR THE SELLERS, BC CURRENTLY THESE TOOLS ARE ALREADY BETTER THAN 60 OR 70% OF THEM IF THEY ARE NEW TO ALIBABA.COM IN TERMS OF THE CONVERSION RATE FOR THE KINDS OF ENGAGEMENT AND PRODUCT MANAGEMENT.
>> HOW MANY BUSINESSES, I THINK THERE ARE AROUND 200,000, HOW MANY BUSINESSES ARE USING AI TODAY? >> IT IS MORE THAN 100. MORE THAN HALF OF THE SELLERS ARE ALREADY EQUIPPED BY THIS AGENT-BASED TOOLS. AND FOR THE BUYERS, ACTUALLY WE LAUNCHED FROM LAST NOVEMBER AND UNTIL NOW THERE ARE MORE THAN ONE MILLION USERS THAT ARE USING THIS AI-BASED POWER OF SEARCH. >> HOW MUCH DO YOU FEEL THE COMPETITIVE PRESSURE ON AI GIVEN THE AMOUNT OF INNOVATION COMING FROM CHINA? >> FIRST OF ALL, WE THINK THERE IS A LOT WE CAN DO SO FAR.
FOR EXAMPLE WE TALK ABOUT THE REASONING MODELS AND THOSE ARE BASED ON LANGUAGE. THERE IS A LOT ON THE MULTIMODAL STUFF. THAT WE CAN DO LATER ON, LIKE YOU CAN BASE ANYTHING, AND IMAGE, VIDEO OR A FILE THAT YOU UPLOAD THAT THE MODEL CAN HELP INTEGRATE THEM. SO, WE STILL BELIEVE THAT IS A HUGE SPACE TO GROW AND THEN WE CAN LEVERAGE THE MODELS FROM DEEPSEEK OR META, OR THE CLOUD. SO ALL OF THESE MODELS CAN HELP
US BOOST THE CAPABILITY OF THE APPLICATIONS THAT WE BELIEVE ARE THE KEY HERE. AND WHY DO WE THINK WE SHOULD -- WE CAN DO IT HERE AND BETTER THAN OTHERS IS NOT GOING TO BE A FEW TOOLS THAT HELP PEOPLE ANSWER THE EASY QUESTIONS. THEY NEED TO BE HIGHLY INTEGRATED INTO THE PEAKS AND NARROWS. LIKE MOBILE TRADE IS A U.S.
DOLLAR. I DO NOT THINK ANY OTHER BUSINESSES IS LARGER THAN THIS. IF WE CAN APPLY AI AND WE WOULD BE HELPING A LOT OF S&P'S WHO CANNOT PARTICIPATE IN THE GLOBAL TRADE AND NOW THEY CAN. THIS IS A BIG SUCCESS FOR US. >> A LOT OF PEOPLE ARE EXPECTING INDUSTRY OR AI CONSOLIDATION IN CHINA THIS COMING YEAR. HOW ME WINNERS DO YOU SEE ANY -- HOW MANY WINNERS DO YOU SEE ANY AI SPACE IN CHINA? >> FOR THAT PART I CAN ONLY SPEAK OF MY OPINION.
IF YOU ASK THIS QUESTION IN JANUARY OF 2025, I THINK NOBODY COULD HAVE ANTICIPATED A COMPANY CALLED DEEPSEEK. YOU ASK THIS QUESTION IN MARCH, I DO NOT THINK ANYBODY KNEW WHAT WOULD HAPPEN IN APRIL AS WELL. THIS INDUSTRY IS MOVING SO FAST AND A LOT OF PEOPLE ARE DOING A LOT OF INNOVATIONS. WE NEED TO FOCUS ON THE RIGHT PROBLEMS WE NEED TO TACKLE. AS PEOPLE IN THIS TECHNOLOGY DOMAIN, I DO NOT THINK ANYBODY COULD ANTICIPATE WHAT IS GOING ON. CAROLINE:
ALIBABA.COM'S PRESIDENT SPEAKING EXCLUSIVELY WITH BLOOMBERG. WE WILL DISCUSS HOW APPLE IS THROWING THE MEAD -- THE NEEDLE BETWEEN BUDGET AND PREMIUM.
KEEPING AN EYE ON THE KEY SHARES ON THE MOVE TO THE DOWNSIDE. WE HAVE PALANTIR HAVING ITS AI PCON, AND IT IS STILL DRIVE LOWER 5% AND TESLA IS A KEY CONTRIBUTOR TO A DOWNSIDE UP BY ALMOST 5%. AND SEEMINGLY A COMMENT BY PRESIDENT TRUMP BUYING A TESLA IS NOT ENOUGH TO KEEP THE STOCK UP. ♪ CAROLINE: LET US TAKE A QUICK CHECK ON APPLE SHARES. YEAR TO DATE, THEIR EROSION IN MARKET CAPITALIZATION IS TO THE TUNE OF HAVE A TRILLION DOLLARS.
A 15% WIPEOUT IS FAR WORSE THAN THE NASDAQ 100. THERE ARE A MYRIAD OF RISKS THAT RUN -- THAT RON WRITES ABOUT TALKING ABOUT TARIFFS, AND THE AI OFFERING FIZZLING AND THEN THERE IS A LUCRATIVE PARTNERSHIP WITH GOOGLE AND WHETHER OR NOT THOSE PAYMENTS WILL COME FOR EXCLUSIVE ACCESS TO GOOGLE SEARCH WITHIN THE IPHONE. LET US TALK ABOUT APPLE AND THE WAY IT IS TRYING TO OFFSET HEADWINDS.
THE AFFORDABLE IPHONE 16 E, HOW AFFORDABLE IS IN IT -- HOW AFFORDABLE IS IT AN BLOOMBERG WRITES ABOUT HOW IT IS A TOUGH SELL AT THIS PRICE BOARD -- PRICE POINT. MARK: IT IS NOT AFFORDABLE ENOUGH. IT IS AT $600 AND IT IS AT THE HIGH END OF THE BUDGET RANGE. BUT THE SPECIFICATIONS, ONE CAMERA, ITS PROCESSING AND AI CAPABILITIES PUTS IT AT THE BOTTOM BARREL. YOU CAN GET ANDROID PHONES FOR A COUPLE OF HUNDRED DOLLARS LESS PARTICULARLY OVERSEAS WHERE YOU ARE GETTING THREE OR FOUR CAMERAS WHERE YOU ARE GETTING BETTER DISPLAYS AND HIGHER RESOLUTION PANELS WITH IMPROVED FRAME RATES FOR SCROLLING. YOU ARE GETTING BETTER GAMING.
SO, THEY HAVE A LOT OF COMPETITION AND IT CONTINUES TO BE MIND-BOGGLING THAT THEY ABANDON THAT 300 24 HUNDRED DOLLAR PRICE POINT. I THINK SOMETHING LIKE THAT WOULD'VE HELPED THEM TREMENDOUSLY WITH GROWTH PARTICULARLY FOR SERVICES IN PLACES LIKE INDIA AND SOUTHEAST ASIA AND EASTERN EUROPE. CAROLINE: DO YOUR POINT, WHEN YOU FIRST REPORTED ABOUT THIS PRODUCT THE IDEA WAS THAT IT WAS VERY LIKE AN IPHONE 16 AND THERE WAS NOT VERY MUCH YOU ARE HAVING TO LEAVE ON THE TABLE BY NOT GOING DOWN. WILL THEY EVER BRING ANYTHING OUT IN THAT PRICE RANGE THAT COULD TEMPT MORE -- MORE OF EMERGING-MARKET PURCHASE ARE? MARK: I WOULD NEVER SAY NEVER BUT I THINK THE PLAN IS TO BRING THE PRICE DOWN ON THIS MODEL. TODAY IT IS $600 BUT MAYBE IN A YEAR-AND-A-HALF IT WILL GO DOWN TO $500. AT THAT POINT IT IS GOING TO BE MORE UPDATED SPECIFICATION WISE BUT FROM A PRICE POINT IT WILL ACTUALLY BE QUITE A BIT MORE COMPELLING. THAT WOULD PUT IT SQUARELY IN
THE SAME PRICE RANGE AS THE GOOGLE PIXEL A SERIES. THEY HAVE THE 9A COMING. A LOWER END PIXEL PHONE. THE CONCERN IS FOR GOOGLE IS THAT NO ONE IS BUYING THE PIXEL PHONES. FOR APPLE, AT LEAST THEY ARE GETTING SOME MOMENTUM BECAUSE THIS IS A PHONE THAT WILL NOT GET SWITCHERS, BUT YOU CAN UPGRADE FROM OLDER IPHONES. FROM THAT STANDPOINT IT IS COMPELLING FOR SOME PEOPLE.
THEY HAD THE OPPORTUNITY TO DO SOMETHING BOLDER AND BIGGER AND CHEAPER. CAROLINE: FOR NOW, WE STILL WONDER WHAT IS HAPPENING IN TERMS OF GENERATIVE AI INTEGRATION. THERE IS A LOT GOING ON FOR THIS COMPANY. AS ALWAYS, YOU BREAK IT DOWN. LET US RETURN TO A KEY MOVER ON
THE DAY BECAUSE AT LAST THE RELIEF FLOODING THE MARKET THAT INTEL HAS A SINGLE CEO. THE INTERIM CEOS GOES BACK TO THEIR DAY JOBS AND WE ARE UP 14% AS THEY COME BACK TO BUSINESS. CAN HE BE A TURNAROUND KING? THAT DOES IT FOR BLOOMBERG TECHNOLOGY.
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2025-03-19 04:27
