Tariffs Weigh on Big Tech, Increasing US Energy for AI | Bloomberg Technology
ANNOUNCER: WHERE INNOVATION, MONEY AND POWER COLLIDE, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: FROM NEW YORK, APPLE HIT WITH DOWNGRADES. THE LATEST EARNINGS. ED: ROBLOX CEO LATER THIS HOUR. CAROLINE: 100 DAYS OF TRUMP POLICIES. ANOTHER DAY OF GAINS, BOUNCING BACK FROM THE APRIL SELLOFF. IT'S THE SECOND WEEK. RISK ON ATTITUDE RETURNS.
MAYBE A SIGN OF THAWING IN CHINA-U.S. RELATIONS. ED: APPLE IS OFF 4%. TARIFF STORIES. WEAKNESS IN CHINA. OUTPERFORMANCE ON IPHONE. TIM COOK TOLD US THERE WILL BE A $900 MILLION IMPACT IN THE CURRENT PERIOD. AMAZON BILLIONS BELOW WHAT THE STREET THOUGHT. CAROLINE:
SO MUCH GREAT ANALYSIS ON BOTH. EARNINGS, THE BIG MEGA CAP THIS WEEK, MICROSOFT AND META MANAGED TO BOUNCE THROUGH BUT APPLE AND AMAZON DO NOT. >> OVERALL THIS SEASON HAS BEEN POSITIVE FOR BIG TECH UNTIL YESTERDAY. APPLE, PEOPLE WORRYING HOW MUCH
THE TARIFF WILL IMPACT THEM. WHAT WILL THIS MEAN FOR GROWTH WHICH WAS ALREADY STALLED? MULTIPLES ELEVATED RELATIVE TO OTHERS. THIS WASN'T THE WORST CASE. IT WAS A DISAPPOINTMENT AND UNDERLINES CONCERNS PEOPLE HAD. ED: HOW IS THE SELL SIDE REACTING? RYAN: WE HAD TO GROUND GRADES -- TWO DOWNGRADES. THERE IS CONCERN WE HAVEN'T
FULLY SEEN THE IMPACT OF TARIFFS. MAYBE THIS WILL BUILD OVER THE YEAR. ROSENBLATT WARNED ABOUT, WHAT WILL IT TAKE FOR AN INFLECTION OF GROWTH? AI IPHONE SUPER CYCLE UPGRADE IS NEEDED, LOOKING LESS LIKELY AS TIME GOES. ED: THANK YOU. IN TERMS OF CONSUMER ELECTRONICS APPLE HAS BUILT AROUND THE WORLD. IF THE IMPACT OF TARIFFS IS $900 MILLION, IS THAT SIGNIFICANT? HOW DO YOU MODEL? >> GREAT QUESTION.
IN THE GRAND SCHEME, IT IS NOT MUCH. 2% OF THEIR REVENUE. WHAT WILL APPLE DO WITH PRICES? TIM COOK DIDN'T ADDRESS THAT. WILL THEY INCREASE PRICES ON DEVICES? THEY HAVE NEVER RAISED PRICES ON PRODUCTS MIDCYCLE. EVERYONE IS LOOKING.
OTHER CHALLENGE, HOW THEY NAVIGATE SUPPLY CHAIN. APPLE DEMONSTRATED FLEXIBILITY MOVING THEIR CHAIN Q1, RAMPING UP AND THEY CONFIRMED. REPORTS EARLY LAST WEEK. MOVING TO INDIA.
THEY MOVED HALF OF THEIR UNITS TO THE U.S. FROM INDIA. CAROLINE: WE ARE LOOKING AT THE DEMAND-SIDE. IN CHINA, THERE WAS WEAKNESS AGAIN DESPITE SUBSIDIES. HOW DID TIM COOK DEFLECT A STORY THEY COULDN'T TEAR OUT? NABILA: THE TARIFF STORY, THIS WEAKNESS IN CHINA HAS BEEN SOMETHING THEY HAVE BEEN DEALING WITH. WE WERE BAKING THIS IN. THE CHALLENGE FOR HUAWEI CONTINUES. THEY CONTINUE TO BE THE LEADER
IN CHINA. THEY HAVE 70% SHARE. THE SILVER LINING FOR APPLE IS NOT CHINA THIS YEAR BUT EM. INCREASINGLY THEY WILL PROBABLY HAVE MORE MODELS MOVE TO IN-HOUSE MODEM WHICH WILL HELP PROFITABILITY. AS THEY SCALE PRODUCTION IN INDIA, THAT WILL HELP THEM DEAL WITH TARIFFS. HOPEFULLY, ONCE WE HEAR THE
ANNOUNCEMENTS WITH GOOGLE -- ED: TIM COOK DIDN'T SPEAK ABOUT A LOT OF THIS ON THE CALL. APPLE WILL SOURCE, STARTING NOW, MILLIONS OF CHIPS FROM TSMC IN ARIZONA. HOW DOES THAT IMPACT THE COST OF PRODUCTION OF A HANDSET? IT'S BEING TAKEN OUT OF THEIR HANDS WHETHER THEY RAISE PRICES ARE NOT. -- OR NOT. NABILA: WE DON'T HAVE VISIBILITY ON HOW MANY CHIPS FROM WHERE.
APPLE'S BIGGEST STRENGTH IS HOW THEY NAVIGATE, HOW THEY NEGOTIATE SUPPLY CHAIN. THEY HAVE STRENGTH. EVEN WITH PRICES/LOGISTICS. TIM COOK'S BACKGROUND IS OPERATIONS.
ON TOP OF GEOPOLITICS, HE HAS HISTORY WITH NEGOTIATING WITH BOTH ADMINISTRATIONS. I HAVE FAITH HE WILL WEATHER THE STORM. IT WILL TAKE TIME, WHETHER THROUGH THE SUPPLY CHAIN OR INTERNAL CHANGING MORE IN-HOUSE /MANUFACTURING THROUGH INDIA OR U.S. WE EXPECT THIS TO BE A CHALLENGING YEAR. LONG-TERM, THEY WILL COME THROUGH. CAROLINE: GREAT TO SPEAK WITH YOU. APPLE TO AMAZON. SHARES REACTING TO ITS OWN REPORT WARNING OF A TOUGHER CLIMATE AMID GLOBAL TRADE TENSIONS.
BEFORE AWS, THE GEOPOLITICS. HOW MUCH ARE WE ABLE TO SEE AMAZON SURVIVE BY HAVING BROUGHT IN INVENTORY AND CHANGING THEIR CHAIN? >> THEY ARE WORKING. THEY WOULD ACKNOWLEDGE IT IS UNCERTAIN. WE SPOKE LAST NIGHT. THAT WAS THE MESSAGE. GUNS FOR THE WAR, PICKS AND SHOVELS.
AMAZON HAS MILLIONS OF SELLERS. THERE WILL BE SELLERS IMPACTED BY THIS HAVING EXPOSURE TO CHINA. OTHERS DON'T. PEOPLE LOOKING FOR DEALS, TRYING TO SAVE MONEY ALREADY, THEY WILL GO TO AMAZON AND FIND SELLERS NOT EXPOSED TO CHINA CHAIN HEADWINDS AND FIND DECENT PRICES. UNDER ALMOST ANY MACRO SCENARIO, AMAZON GAINS. ED: THE FUNDAMENTAL BASICS OF HOW THE BUSINESS WORKS.
HALF THE AUDIENCE KNOW IT IS AMAZON.COM, E-COMMERCE. THAT'S THE VAST VOLUME. THE MAJORITY OF OPERATING INCOME IS AWS CLOUD.
WHEN AMAZON TELLS US OPERATING INCOME WILL BE BILLIONS BELOW FORECASTED, IS THAT A TARIFFS ISSUE ON .COM OR REFLECTING SOFTNESS ON CLOUD SPENDING? BRAD: I DON'T THINK IT IS CLOUD. I EXPECT THAT TO CONTINUE. THE MIDPOINT OF GUIDANCE WAS BELOW. TYPICALLY AMAZON HITS FOR EXCEEDS THE HIGH-END. THE QUARTER PROBABLY ENDS UP CLOSER TO IN-LINE. I AM SURE THEY ARE BUILDING IN
RISK AROUND TARIFFS. AD BUSINESS DRIVES A HUGE PORTION OF OPERATING INCOME. THAT IS GROWING 18% IN THE QUARTER.
THERE IS LESS CONCERN THAN YOU MIGHT THINK. CAROLINE: THEY ARE FOCUSED ON INNOVATION, PWS, IN SPACE. ALL OF THAT COSTS. META SIGNALED, WE ARE STICKING TO CAPEX AND RAISING IT. INFRASTRUCTURE SPEND WILL GO UP BECAUSE OF TARIFFS. WILL THAT AFFECT THE COST OF BUSINESS AT AWS? BRAD: COULD.
THE COMMENT REMAIN ON META WAS THEY CALLED OUT COMPONENT COSTS GOING UP. FOR THE INDUSTRY, A STRUCTURAL RETURN ON INVESTED CAPITAL IS LOWER TODAY THAN 90 DAYS AGO. THAT IS NOT GREAT. AMAZON, META CAME OUT MORE UNSCATHED FROM TARIFFS.
AMAZON IS PROBABLY HAVING MORE MEASURED CAUTION I.E. THEY DID NOT TAKE THE CAPEX GUIDE UP BUT THEY ARE BULLISH ON THE CLOUD AND GROWTH FORWARD. ED: WHAT DID AMAZON DO WELL IN THE QUARTER? BRAD: THEY GREW ADS 18%. THEY HAD BEEN MISSING PRIOR QUARTERS. CAROLINE: CAN I JUMP?
I'M INTERESTED IN THE AD SIDE. HOW MUCH OF A HEADWIND IS THAT IF THIRD-PARTY SELLERS BECOME WEAKER? THE KNOCK ON EFFECTS OF TENSION? BRAD: ADS HAVE A ONE-TO-ONE RELATIONSHIP WITH VOLUME. UNITS ESSENTIALLY. WITH SELLER DENSITY, A SELLER WHO HAS CHINA EXPOSURE MIGHT LOSE VOLUME BUT THERE WILL BE ANOTHER WHO WILL STEP IN AND MOVE THE UNIT. IF THEY DO, THEY WILL STILL SPEND AD DOLLARS. WE THINK THAT CAN BE MORE
RESILIENT. ED: PROJECT KUIPER OFF TO A ROCKY START. DO YOU MODEL THAT INTO AMAZON? ANY MEANINGFUL CONTRIBUTION FOR A SPACE-BASED INTERNET BUSINESS? BRAD: IT'S HARD. [LAUGHTER] Q2 IT'S EMBEDDED. THEY LAUNCHED IN APRIL. THEY WILL LAUNCH MORE IN Q2. THERE IS COST. MAYBE $100 MILLION ON AVERAGE PER ROCKET.
THAT'S THE MAGNITUDE. THEY'VE TALKED ABOUT 80 ROCKETS OR $10 BILLION TOTAL OUTLAY RELATED TO THE CONSTELLATION PROJECT OVERALL. THEY SAID LAST NIGHT THEY WOULD HAVE COMMERCIAL SERVICE UP BY THE END OF THE YEAR. THEY WILL BE GENERATING REVENUE. THE MATH IS DIFFICULT. ED: THANK YOU. COMING UP, EFFORTS TO ADDRESS THE WINDING SKILL GAP IN LABOR MARKETS. THIS IS BLOOMBERG.
CAROLINE: U.S. LABOR MARKET STRONGER FOR APRIL. THERE IS STILL UNCERTAINTY. IT'S ABOUT TARIFFS AND LONG-TERM EFFECTS OF ADVANCES IN TECH. YOU HAVE DONE FASCINATING RESEARCH ABOUT WHAT IS FACING THE CURRENT LABOR MARKET AND THE SKILLS GAP MISSING WHEN IT COMES TO TECH. NELA:
IF WE CHANGE APERTURE TO LONG-TERM, DO YOU SEE AN AGING U.S. WORKFORCE COMPLEMENTED BY THE AGING CHINESE AND EUROPEAN FORCES. YOU SEE NASCENT NEW TECHNOLOGIES COMPANIES HAVE YET TO FULLY EMBRACE. THERE WILL BE A GAP BETWEEN THE TECH AND THE SKILLS. UNTIL THE CHASM IS CLOSED, YOU WILL SEE A HIT TO PRODUCTIVITY. OUR FOCUS IS ALIGNING NEW JOBS,
IN DEMAND JOBS WITH IN DEMAND SKILLS TO BRING THE WORKFORCE ALONG TO TECH CHANGE AND THE PROMISE IT HOLDS. ED: THE CALCULUS FOR THE INDUSTRY IS THE JOBS NUMBER AGGREGATE SHOWS THERE IS AN IMPACT FOR UNCERTAINTY IN TARIFFS OVERALL BUT IF THERE IS A SKILLS GAP , I KNOW HEADLINES ARE LAYING OFF PEOPLE BECAUSE THERE ARE PLACES THEY DESPERATELY NEED PEOPLE THAT AREN'T AVAILABLE, TO FREE UP THE SALARY, STOCK AND HEADCOUNT. HOW MUCH DO YOU EXPECT THAT TO CONTINUE, LITTLE TRENDS BUT OVERALL HIGHER? NELA: COMPANIES MADE BIG BETS THROUGHOUT THE PANDEMIC RECOVERY. SOMETIMES THEY HAVE HAD TO
RESHUFFLE HEADCOUNT. APRIL NUMBERS, INFOTECH SECTOR, A LOT OF PEOPLE IN COMPANIES THAT CREATE AND PUBLISH SOFTWARE, IT WAS FLAT IN APRIL. IT WAS NEGATIVE THE MONTH BEFORE, AND FLAT THE MONTH BEFORE THAT. THERE IS A DISCONNECT BETWEEN THE PEOPLE AND THE TECH. WHERE ARE THE PEOPLE IF TECH IS THE FUTURE? TALENT IS BEING SUBSUMED ELSEWHERE. TALENT IS EVOLVING.
ADP IS TRYING TO SHOW WHERE TALENT IS, HOW IT IS MOVING FROM INDUSTRIES YOU WOULD EXPECT LIKE TECH TO MANUFACTURING TO HEALTH CARE TO THESE OTHER INDUSTRIES WHERE TECH IS BECOMING MORE IMPORTANT. CAROLINE: HOW MUCH ARE WE SEEING HEADCOUNT LESS NECESSARY BECAUSE OF TECH AND EVASION? -- INNOVATION? AI IS SAYING WE ARE NOT GIVING YOU HEADCOUNT UNLESS YOU CAN AUTOMATE. IS THAT STARTING TO SHOW? NELA: AT THE EDGES, THERE IS CHANGE IN OUR COMPANIES ARE HIRING, KNOWING THEY HAVE THIS ADVANCED TECH.
IT IS COMMONLY SAID YOUR JOB WON'T BE REPLACED BY TECH. IT WILL BE REPLACED BY SOMEONE WHO KNOWS AI. I WANT TO UNPACK THAT. THERE ARE SKILLS ASSOCIATED TO JOB TITLES.
AT ADP WE IDENTIFIED 100,000 SKILLS ASSOCIATED WITH 9000 TITLES. IT DOESN'T MEAN THE JOBS ARE CHANGING. THE TASKS REQUIRED FOR THOSE JOBS ARE CHANGING. WHEN YOU LOOK AT COMPANY
ANNOUNCEMENTS, IT IS STATING THE JOBS AS THEY HAVE BEEN IN THE PAST HAVE EVOLVED. WHAT DOES IT MEAN FOR A WORKER? YOU MAY HAVE THE SAME JOB BUT THE SKILLS REQUIRED HAS CHANGED. COMPANIES ARE TRYING TO FIGURE THAT OUT WHETHER REDUCING HEADCOUNT AND REHIRING SKILLS THEY NEED OR, HERE IS WHERE THE OPPORTUNITY IS, TRAINING THE CURRENT WORKFORCE TO HAVE THOSE SKILLS. ED: COMING UP, GRAND THEFT AUTO 6 DELAYED AGAIN. ♪ ED: SHARES OF TAKE-TWO INTERACTIVE UNDER PRESSURE AFTER GRAND THEFT AUTO IS DELAYED AGAIN UNTIL MAY '26. FOR SOME PEOPLE, THIS IS THE WORST NEWS. THE STOCK DOWN 6%.
WHAT ACCOUNTS FOR THE DELAY? >> THAT WILL BE A SAD CHRISTMAS FOR YOU. ED: DEFINITELY. AND MANY OTHERS. JASON: NO CRAZY SECRET BEHIND THIS.
PEOPLE DIDN'T BELIEVE FALL WAS A REAL RELEASE WINDOW. THERE IS TOO MUCH WORK TO DO. THE COMPANY HAS BEEN TRYING HARD TO AVOID THE BRUTAL OVERTIME THEY TRADITIONALLY PUT PEOPLE THROUGH ON THEIR GAMES. THEY HAVE BEEN SHAPING UP THE LAST FEW YEARS. THIS WAS INEVITABLE. WE PREDICTED THIS WOULD HAPPEN. CAROLINE: ANALYSTS SAYING THIS DOESN'T WIPE AWAY PROFITABILITY. 50% SOME HAVE IT DOWN.
JASON: IT IS BONKERS THE STOCK IS TAKING A HIT. THIS WILL BE THE BIGGEST THING ON THE PLANET. IT WILL MAKE A KAJILLION DOLLARS. 5 SOLD 250 MILLION COPIES, THE SECOND BEST-SELLING GAME OF ALL TIME. 5 ALONE HAS SOLD MORE THAN THE ENTIRE ASSASSIN'S CREED SERIES.
THIS IS GOING TO BE THE BIGGEST ENTERTAINMENT LAUNCH EVER. THE FACT INVESTORS ARE SPOOKED BECAUSE IT MOVED FY'S IS BONKERS TO ME. CAROLINE: IT'S ANXIETY. ARE YOU STICKING WITH 5 OR ARE YOU PLAYING OTHER GAMES? JASON: THIS GAME IS AN ANOMALY. A LOT OF GAMES HAVE TO WORRY
ABOUT THAT. MULTIPLAYERS HAVE TO WORRY. BUNGEE'S MARATHON WILL COMPETE WITH OUR NEW ONLINE GAME. IT'S A COMPETITIVE LANDSCAPE. GTA IS A CLASS OF ITS OWN. PEOPLE WILL PLAY IT NO MATTER WHAT. IT IS SILLY INVESTORS ARE WORRIED. ED: EXPLAIN THE BASICS OF THE GAME.
30 SECONDS. JASON: GTA6, THE SINGLE PLAYER. A BIG OPEN WORLD GAME WHERE YOU DRIVE AROUND A FICTIONAL VERSION OF MIAMI. IT'S CINEMATIC.
THE SECOND PART IS ONLINE. YOU DO SIMILAR THINGS, HEISTS, CRIMES AND DRIVING, EXCEPT WITH YOUR FRIENDS. CAROLINE: THE TETRIS DATA. 500 MILLION PEOPLE. [LAUGHTER] ONE OF OUR PRODUCERS, A KEEN LOVER OF TETRIS.
CAROLINE: WELCOME BACK. ED: WHAT'S THE SECTOR DOING? IT'S HIGHER ON A MACRO PERSPECTIVE. SECOND WEEK OF GAINS. THE JOBS MARKET NOT TOO IMPACTED BY TARIFFS. MAYBE THERE IS COOLING ON THE TENSIONS WITH CHINA. AIRBNB POSTED SALES GROWTH BUT THEY PUSHED FORWARD THAT THAT WILL MODERATE AMIDST ECONOMIC ANXIETY. TIMU WILL GO LOCAL.
NVIDIA, INTERESTING REPORTING. COULD THEY BE INVENTING A NEW CHIP? H20 CANNOT GO TO CHINA BUT CAN THEY SERVICE THEM WITH SOMETHING ELSE? ED: PRESIDENT TRUMP MARKED HIS FIRST 100 DAYS IN OFFICE THIS WEEK. D.O.E. IS CELEBRATING 100 DAYS OF WHAT IT IS CALLING VICTORIES IN MANUFACTURING AND INNOVATION. SECRETARY, THANK YOU FOR YOUR
TIME IN JOINING US. THERE IS ONE QUESTION AMERICANS HAVE FOR YOU. HOW HAVE YOU CHANGED POLICY IN THAT TIME FOR ENERGY THAT SUPPORTS MANUFACTURERS? SEC. WRIGHT: I AM AT A PLANT IN GRIFFIN, GEORGIA, SOUTHEAST OF ATLANTA THAT MAKES LOW-COST, TANKLESS, NONCONDENSING HOT WATER HEATERS. THESE ARE LOW-COST HEATERS. OVER ONE MILLION AMERICANS
TODAY TAKE SHOWERS AND WASH THEIR HANDS FROM WATER HEATED BY A DEVICE MADE IN THIS PLANT, IN THE LAST THREE YEARS. MILLIONS MORE INTERESTED. IT IS VERY LOW COST. THIS WAS GOING TO BE LEGAL. DECEMBER 26, THE BIDEN ADMINISTRATION ASKED TO RULE THROUGH D.O.E., MY PREDECESSOR,
THAT WOULD HAVE MADE THE MANUFACTURE OF THESE DEVICES ILLEGAL. HUNDREDS IN GEORGIA WOULD HAVE LOST THEIR JOBS AND MILLIONS WOULD NOT HAVE A LOW COST CHOICE TO PUT IN THEIR HOUSE, APARTMENT, WHEREVER THEY WANT HOT WATER, RESTAURANTS, BUSINESSES. WE ARE THRILLED TO SEE THIS FACTORY AND EXCITED FOR THE WORKERS AND PRODUCTS THAT HAVE A FUTURE. ED: 50 MILES FROM WHERE YOU ARE STANDING, THERE IS AN EV PLANT IN GEORGIA. RIVIAN SECURED A $6.6 BILLION LOAN FROM D.O.E., AGREED UNDER THE PRIOR ADMINISTRATION. WHAT'S YOUR ASSESSMENT OF THAT?
WILL IT PROCEED? ARE YOU REVIEWING THE ISSUANCE? SEC. WRIGHT: WE WILL REVIEW ISSUANCE OF ALL THE FUNDS, LOANS AND GRANTS FROM D.O.E. ONE REASON FOR SERIOUS CONCERN WE HAVE. 80% OF THE LOAN MONEY AND GRANT MONEY PUT OUT BY THE BIDEN ADMINISTRATION, WENT OUT AFTER PRESIDENT TRUMP WAS ELECTED AND BEFORE HIS INAUGURATION DAY. IF THEY HAD GREAT ROCKSOLID OPPORTUNITIES, COULD THEY HAVE DONE THAT IN THE PREVIOUS 2.5 YEARS? INSTEAD SO MUCH MONEY WAS
RUSHED OUT THE DOOR BEFORE THE INAUGURATION. WE HAVE REASONS TO BE SUSPICIOUS ABOUT THAT. WE ARE STEWARDS OF TAXPAYER MONEY. THE GOAL OF THE DEPARTMENT IS TO IMPROVE OUR SYSTEM AND MAKE ENERGY AFFORDABLE, RELIABLE AND SECURE. EVERYTHING THAT SERVES THAT AGENDA, WE WILL CARRY THROUGH.
WE WANT TO CARRY OUT THE PRESIDENT'S AGENDA, FOLLOW RULE OF LAW. SOME OF THE LOANS WILL GO FORWARD. SOME OF IT, IT IS TOO LATE TO CHANGE COURSE. A LOT OF THEM WILL NOT GO FORWARD. THAT IS A CAREFUL REVIEW
PROCESS WE HAVE PUT IN PLACE AND JUST GOTTEN THE TEAM EXECUTING. ED: THE INFRASTRUCTURE, FROM A UTILITIES VIEW, THERE IS CONCERN ABOUT STORAGE CAPABILITY. TESLA IS THE LEADER IN ENERGY STORAGE. FRANK REALITY, FOR THE ENERGY STORAGE PRODUCTS, IT RELIES ON PRISMATIC LFP CELLS THAT ARE 100% MANUFACTURED IN CHINA.
IF THERE IS A NEED TO BUILD OUT STORAGE PRODUCTS AT COMMERCIAL SCALE, ARE YOU EVALUATING ANY EXEMPTIONS IN THE CONTEXT OF TARIFFS OR ANY WORD WITH TESLA SO THEY CAN GET MOVING ON BUILDING OUT THE INFRASTRUCTURE IN THIS COUNTRY? SEC. WRIGHT: I WON'T TALK ON SPECIFIC THINGS HERE BUT WE ARE LOOKING CAREFULLY AT EVERYTHING WE CAN DO TO RESHORE MANUFACTURING OF CRITICAL SYSTEMS LIKE THE ONES YOU TALKED ABOUT IN THE U.S. WE HAVE BECOME TOO DEPENDENT ON CHINA FOR DEFENSE, ELECTRIC GRID, AUTOS, SPACE SYSTEMS. WE NEED TO BRING THAT MANUFACTURING, TECHNOLOGY AND MATERIALS BACK TO THE U.S.
IT'S A HIGH PRIORITY OF THE TRUMP ADMINISTRATION. CAROLINE: YOU SPEND TIME TALKING TO EXECUTIVES AS DOES THE PRESIDENT. THE NVIDIA CEO ON THE HILL THIS WEEK. JENSEN: WE NEED TO BUILD THE SYSTEMS. WE NEED A PROGRESSIVE GROWTH,
INDUSTRY ORIENTED ENERGY POLICY, WHICH THIS PRESIDENT HAS PUT HIS WEIGHT BEHIND. WITHOUT ENERGY, WE CANNOT HAVE NEW GROWTH INDUSTRIES. CAROLINE: INDUSTRY FOCUSED ENERGY POLICY FOR AI. WHAT DOES THAT LOOK LIKE?
SEC. WRIGHT: GETTING THE BARRIERS OUT OF THE WAY OF ENERGY PRODUCTION. BIDEN ADMINISTRATION SPENT FOUR YEARS, ALL OF GOVERNMENT APPROACH TO IMPEDE PRODUCTION OF HYDROCARBONS IN THE U.S. I AM FOR ALL ENERGY. HYDROCARBONS, OVER 80% OF U.S. ENERGY WHEN I WAS BORN AND THEY ARE TODAY.
IF YOU STAND IN THE WAY OF AN ENERGY SYSTEM, YOU GET HIGHER PRICES. WE GREW ELECTRICITY PRODUCTION 2%. 20% PRICE RISE. TO ACHIEVE NVIDIA AND AMERICA'S DREAM TO WIN THE AI RACE, WE HAVE TO PRODUCE MORE ENERGY IN THE U.S.. THE GOVERNMENT NEEDS TO GET OUT OF THE WAY.
A LITTLE COMMON SENSE, AMERICAN BUSINESSES, CAPITAL AND TECH READY. PRESIDENT TRUMP'S GOAL IS TO UNLEASH THAT AMERICAN ENERGY. CAROLINE: IS THERE POTENTIAL YOU ARE ACCIDENTALLY GETTING IN THE WAY BECAUSE OF GEOPOLITICS AND TRADE ISSUES? THE ENERGY LACK OF IN MANY WAYS IS A SUPPLY CHAIN ISSUE. YOU DON'T HAVE THE TURBINES TO BRING THE ENERGY AT THE INFRASTRUCTURE RATE CEOS WANT TO SEE. THERE IS NOT ENOUGH EQUIPMENT. IS THERE ENOUGH TIME TO PIVOT TO MAKE THAT IN THE U.S.? SEC. WRIGHT:
I HAVE SPOKEN TO THE TURBINE MANUFACTURERS. THEY ARE IN HUGE DEMAND. GD VERN NOVA MAY 27 LAST YEAR. THEY WILL MAKE 80 NEXT YEAR. AMERICANS ARE INGENIOUS. WITH REGULATORY COMMON SENSE, THEY CAN RAMP UP CAPACITY RAPIDLY. I AM EXCITED ABOUT HOW MUCH NEW PRODUCTION CAPACITY WE WILL SEE IN THE U.S.
UNDER CONSTRUCTION TODAY AND A LOT MORE UNDER CONSTRUCTION BY THE END OF THE YEAR. WE WILL RAMP IT UP IN TIME. IT WILL BE A RACE. WE MUST LEAD IN AI. WE MUST RAPIDLY GROW ENERGY PRODUCTION. ED: HOW RELIANT WILL THE AI BOOM IN THIS COUNTRY BEYOND FOSSIL FUELS AND WHILE WE HAVE YOU, WHAT IS THE PLAN? SEC. WRIGHT: NATURAL GAS IS THE BIGGEST SOURCE OF ELECTRICITY IN THE U.S., FOLLOWED BY NUCLEAR AND
COAL. THAT WILL POWER THE AI RACE. IT IS SLOW TO BUILD COAL PLANTS. NUCLEAR IS VERY SLOW. WE WANT TO CHANGE THAT. SHORT-TERM, THE MAIN SOURCE
WILL BE EXPANDED NATURAL GAS. THAT WILL BE THE WORKHORSE OF WINNING THE RACE. A LOT OF SOLAR IS GETTING BUILT. TRANSMISSION, ENERGY STORAGE, ALL OF THE ABOVE THAT WORKS. YOUR LAST QUESTION? ED: THE STATUS OF THE SPR? SEC. WRIGHT: SPR WAS HALF TRAINED FOR THE 2022 MIDTERMS. WE ARE FILLING IT SLOWLY. WE WILL TRY TO GET MONEY THROUGH CONGRESS TO FILL IT MORE RAPIDLY. YOU CAN ONLY FILL IT AT A
SLOWER PACE THAN YOU CAN DRAIN IT. IT WILL TAKE US YEARS TO FILL IT BUT WE WILL. IT IS THE STRATEGIC RESERVE. YOU HAVE TO HAVE THAT. YOU NEVER KNOW WHAT IS COMING. CAROLINE: APPRECIATE YOUR TIME.
WE LOVE A HIGH VIZ JACKET ON THE SHOW. BREAKING NEWS, ETORO GOING FORWARD WITH ITS NEW IPO. NO DECISION IS FINALIZED.
COMING UP, ROBLOX SEES A BETTER-THAN-EXPECTED JUMP IN ACTIVE USERS. ♪ CAROLINE: ROBLOX ON THE UP AND UP. JUMP IN USERS FOR THE FIRST QUARTER. 97.8 MILLION USERS. THE CEO JOINS. ARE YOU RECESSION PROOF?
DAVID: SIGNIFICANT OUTPERFORMANCE Q1. OUR MISSION TO GET 10% GLOBAL GAMING SOFTWARE MARKET ON THE PLATFORM. ROBLOX IS VIRTUAL AND DIGITAL. NO SUPPLY CHAIN ISSUES. NO SHORTAGE OF ROBLOX.
WE ARE CONTRIBUTING TO U.S. TRADE IMPORT/EXPORT RATIO. CAROLINE: YOU ARE PAYING CONTENT CREATORS. THAT 10%. WHAT TIMEFRAME ARE WE TALKING? YOUR 3% NOW? SEC. WRIGHT: 2.5% -- DAVID: 3%. WE CAN GROW AT GREATER THAN 20% YEAR ON YEAR. WE HIGHLIGHTED Q1 RATES WERE HIGHER THAN THAT INCLUDING REVENUE GROWTH RATES 29% YEAR ON YEAR. DAILY AVERAGE USER GROWTH 26%
YEAR ON YEAR. REALLY INTERESTING HIGHLIGHTS. DAU'S GREW 36% YEAR ON YEAR. INDIA GREW BY 77% YEAR ON YEAR, HUGE MARKET. ED: I AM A PASSIONATE GAMER IN THE OVER 30 CATEGORY.
THE BIGGEST HEADLINES RIGHT NOW ARE THE DELAY OF GTA6, HIGH FIDELITY GAME AND THE DELAY OF SWITCH2 ON THE CONSOLE SIDE. IS THAT WHERE YOU THINK YOU WILL COMPETE? HOW DO THOSE HEADLINES IMPACT ROBLOX? SEC. WRIGHT: DAVID: WE SHARED A ROADMAP HIGHLIGHTING GENRE EXPANSION INTO OUR SPORTS AND RACING BATTLE GAMES ON THE PLATFORM. WE ARE SEEING MORE OF THIS. RECENTLY, NASCAR TEAMED UP WITH DRIVING EMPIRE, PARAMOUNT TEAMED UP WITH SPONGEBOB SIMULATOR, PGA TOUR TEAMED UP. WE ARE SEEING MORE OF THIS.
THESE THREE GENRES WHICH WILL CONTRIBUTE TO US GETTING 10% OF THE GAMING SPACE, THROUGH OVER 60% YEAR ON YEAR. ED: GROWING REVENUE, WHAT ROLE WILL ADVERTISING PLAY? DAVID: WE ALREADY HAVE SOME CREATORS WHO ARE MAKING MORE MONEY ON ADVERTISING THAN THEY ARE WITH VIRTUAL CURRENCY. WE BELIEVE IT'S A NATURAL COMPLEMENT. IT'S NOT BIG ENOUGH YET TO BREAK UP THE NUMBERS.
WE JUST RELEASED A PARTNERSHIP WITH GOOGLE THAT WILL PROVIDE MORE VIDEO ADVERTISING FOR SOME DEVELOPERS. IT'S PART OF BUILDING AN ECONOMIC ECOSYSTEM. OVER 100 CREATORS MADE OVER $1 MILLION IN THE LAST 12 MONTHS. THERE'S A VARIETY OF CREATORS STARTING TO MAKE GOOD BUSINESSES. CAROLINE: WHEN BUSH SAYING THAT CONTENT DRAWS PEOPLE, BUT YOU TELL US THE NUMBERS ON ADVERTISING, THAT'S THE NEXT CATALYST FOR SHARES. ANY TIMEFRAME? DAVID:
WE WANT TO BREAK OUT THOSE NUMBERS AS SOON AS WE CAN. STAY TUNED. WE ARE LOOKING FORWARD TO THAT. WE ARE GROWING AT ENORMOUS RATES WITH THE CORE BUSINESS OF VIRTUAL CURRENCY ON ENGAGEMENT AND USERS, SIGNIFICANT OUTPERFORMANCE Q1. CAROLINE: THE DELICATE SIDE.
LAST TIME YOU JOINED US, IT WAS ABOUT PARENTAL CONTROLS AND SAFETY. SINCE WE SPOKE, THERE HAVE BEEN MORE LEGAL CASES YOUR WAY. LAWSUITS AIMED AT YOU AND DISCORD.
IT'S ABOUT A LEGEND GROOMING, SEXUAL EXPLOITATION USING THE PLATFORMS. HOW ARE YOU FEELING? YOU HAVE YOUR OWN FAMILY USING IT. I KNOW YOU THINK SERIOUSLY ABOUT THIS STUFF. DAVID: OPTIMISTIC AND HUMILITY FOR THE RESPONSIBILITY. ANY SINGLE INCIDENT ON OUR PLATFORM IS ONE TOO MANY. THERE IS ALMOST 100 MILLION
DAILY USERS ON THE PLATFORM. WE TAKE THIS AS AN ENORMOUS RESPONSIBILITY. WE ARE TAKING LEADERSHIP AND THAT ALL COMMUNICATION ON OUR PLATFORM IS FILTERED THROUGH AI WHICH ARE GETTING ENORMOUSLY BETTER.
THERE IS NO IMAGE SHARING ON OUR PLATFORM. THERE IS LESS RISK OF SOME OF THE THINGS IN THAT AREA. WE ARE FOCUSING NOT JUST ON UNDER 13 BUT ON 13-17, THAT IS A DELICATE AGE. WE ARE STARTING TO LEAN INTO AGE VERIFICATION. WE WORK HEAVILY WITH LOCAL STATE AND FEDERAL LAW ENFORCEMENT.
ROBLOX IS A DANGEROUS PLACE FOR BAD ACTORS. WE HAVE A BIG RESPONSIBILITY HERE. ED: M&A IN THE ROBLOX ECOSYSTEM DURING THE CALL. GIVE ME SOLID NUMBERS. SOME M&A FOR THE COMPANY AS WELL? DAVID: THREE CREATORS ARE ON A RUN RATE OF OVER $50 MILLION PER YEAR. PUT MULTIPLES ON TOP OF THAT AN ESTIMATE WHAT THEIR BUSINESSES MIGHT BE WORTH. AT THE DEVELOPER CONFERENCE
LAST YEAR, WE SHARED THE PREDICTION THEY WILL BE A BILLION-DOLLAR VALUATION STUDIO ON THE PLATFORM. WE THINK THAT IS POSSIBLE. INTERNALLY WE HAVEN'T ANNOUNCED M&A. WE ARE GENERATING CASH. WELL NORTH OF $3 BILLION. ED: THANK YOU.
ANOTHER SOCIAL PLATFORM IS READ IT -- REDDIT SAYING THEY EXPECT TO BE BETTER THAN ESTIMATES. I SPOKE WITH THE COO EARLIER TODAY. >> ON THE USER SIDE, REDDIT IS BECOMING MORE ACCESSIBLE OUTSIDE THE U.S. FOR NON-ENGLISH SPEAKERS.
LIFE EXPERIENCE, PARENTING, FANDOM WE TRANSLATE INTO LOCAL LANGUAGE SO FOLKS CAN ENJOY IT IN LOCAL LANGUAGE. THE SECOND THING WE ARE DOING IS RECRUITING MODERATORS IN THOSE COUNTRIES AND DEVELOPING THRIVING LOCAL COMMUNITIES. REDDIT IS GREAT WHEN IT IS LOCAL. FRANCE, GERMANY, OTHER FOCUSED COUNTRIES. WE HAVE EIGHT FOCUSED MARKETS GETTING THIS TREATMENT.
THEY ARE GROWING 2X AS THE REST OF INTERNATIONAL DAILY UNIQUE. WE HAVE BRAZIL, SOUTHEAST ASIA EXPANDING THAT. THAT TREATMENT WILL EXPAND TO THE REST. ON THE REVENUE SIDE,
I JUST CAME BACK FROM VISITING THE AUSTRALIAN AND EUROPEAN TEAMS. THERE IS TREMENDOUS MOMENTUM. A LOT OF NEW ADVERTISERS ARE COMING ON. ED: DATA LICENSING IN THE AI CONTEXT. THE PITCH YOU GIVE TO DEVELOPING FRONTIER MODELS IS REDDIT'S CONTEMPORANEOUS. THERE IS NEW AND GENERALLY HUMAN CONTRIBUTIONS TO THE PLATFORM THEREFORE THE DATA IS VALUABLE.
WE KNOW THE BIG NAMES WORKING ON NEXGEN MODELS THROUGHOUT THE YEAR. HOW DO YOU ENSURE YOUR LICENSING DEALS TARGET NEW DEALS LINE UP WITH THEM STARTING THE TRAINING PROCESS ON THEIR NEXT MODEL? JEN: WHAT WE ARE REALLY TALKING ABOUT IS REDDIT DATA IS VALUABLE FOR OTHERS TO BUILD PRODUCTS AROUND AND FOR US TO BUILD AROUND. WE ARE OPEN FOR CONVERSATIONS. WE ARE PLEASED WITH THE PARTNERSHIPS SO FAR AND EXCITED ABOUT WHAT WE CAN BUILD. REDDIT ANSWERS WE RELEASED GLOBALLY THIS WEEK. I DON'T HAVE ANYTHING NEW TO SHARE RIGHT NOW BUT WE ARE OPEN. WE'RE EXCITED. CAROLINE:
COMING UP, MORE ON EARNINGS. ED: EU SLAPPING A $6 MILLION FINE ON BYTEDANCE FOR SENDING USER DATA TO CHINA. TIMU SHIFTING TO A LOCAL FULFILLMENT MODEL, PLANNING TO SELL GOODS ONLY FROM U.S. MERCHANTS TO AMERICAN CONSUMERS. OYO HOLDING OFF IPO UNTIL ITS EARNINGS. THIS IS THE THIRD TIME THEY HAVE PUT OFF THE IPO. CAROLINE: THAT DOES IT FOR THIS EDITION. WHAT A JOY TO HAVE YOU HERE.
ED: INTENSE WEEK OF EARNINGS. WE GOT A LOT DONE. THE NAMES ARE IDIOSYNCRATIC. THAT'S A BIG DECLINE FOR APPLE. WHAT ABOUT TAKE-TWO? CAROLINE: YOU WILL SHED A TEAR. IT'S TOO EMOTIONAL TO TALK ABOUT FOR YOU. PROFITS WILL COME EVENTUALLY. DON'T FORGET ABOUT THE PODCAST.
2025-05-03 16:06
