Tesla Deliveries Increase, Apple Readies Low-End iPhone | Bloomberg Technology
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, TESLA POSTS ITS FIRST INCREASE IN QUARTERLY SALES THIS YEAR BUT DISAPPOINTS. ED: APPLE PREPARING TO ANNOUNCE A NEW LOW-END IPHONE. CAROLINE:
WE TALK TO TECH HEAVY HITTERS LATER, THE CEO OF PINTEREST. ED: TESLA POSTED ITS FIRST INCREASE IN QUARTERLY SALES THIS YEAR BUT DELIVERIES CAME IN BELOW THE STREET. SHARES DOWN SHARPLY. THEY WERE SHY OF THE ESTIMATE, THIS AHEAD OF THE ROBOTAXI EVENT NEXT WEEK. CRAIG JOINS US FROM LONDON. THE DATA IS INTERESTING. THE VOLUME PRODUCTS BEAT. THE OTHER BUCKET, SX AND CYBER TRUCK MISSED.
>> THIS IS A CASE OF A NARROW BEAT GIVEETH AND TAKETH AWAY. THE SHARES ARE QUITE VOLATILE. ONE QUARTER AGO THEY BARELY EXCEEDED EXPECTATIONS. I DON'T THINK WE LEARN A TON FROM THE NUMBERS. WE GENERALLY SEE AN UPWARD TREND SEQUENTIALLY AND YEAR-OVER-YEAR. IF YOU PAN OUT AND LOOK AT THE TREND GOING FOR THE BACK WE SEE A GENERAL FLATTENING AND LACK OF GROWTH FROM THE COMPANY.
YEAR TO DATE BASIS, WE MAY SEE A DECLINE IF TRENDS HOLD. WE'VE SEEN THEM DROP 2% FOR THE YEAR. THIS COMPANY PRICED AS A GROWTH STOCK HAVING TROUBLE GROWING.
CAROLINE: IN CHINA? CRAIG: THE EXPECTATION GOING INTO NUMBERS WAS THE COMPANY WOULD GET A BOOST FROM CHINA INCREASING SUBSIDIES FOR PEOPLE TO TRADE IN OLDER CARS AND GET EV'S. WE SAW TESLA'S WHOLESALES TICK UP. THOSE NUMBERS ARE WHOLESALES. THEY ARE CLOSER TO SHIPMENTS AS OPPOSED TO VEHICLE DELIVERIES. WE MAY SEE SUPPORT COMING INTO PLAY IN THE FOURTH QUARTER OF THIS YEAR. ED: THERE ARE PEOPLE THAT SAY THE SELL SIDE DOES NOT KNOW WHAT IT'S TALKING ABOUT.
THIS IS NOT ABOUT DELIVERING EV'S. IT'S ABOUT A FUTURE WHERE TESLA OPERATES THE PROPRIETARY, THEY RUN AND OPERATE ROBOTAXIS. NEXT WEEK WE WILL FIND OUT WHETHER OR NOT THAT IS TRUE. CRAIG:
THE COUNTER TO THAT WOULD BE THIS IS A COMPANY THAT TALKED ABOUT PUTTING SELF DRIVING CARS ON THE ROAD, OFFERING A SERVICE THAT WOULD BE UBER LIKE WHERE YOU COULD HAIL A SELF-DRIVING CAR FOR YEARS NOW AND IT HAS BEEN A HALF DECADE SINCE HE WAS OPENLY MUSING ABOUT THIS. WHETHER OR NOT THEY ARE ABLE TO DELIVER THAT IS ANOTHER QUESTION. IF THEY ARE ABLE TO EXECUTE AND DO WHAT OTHERS HAVE NOT PULLED OFF, WHICH IS THIS AT SCALE, OF COURSE THAT WOULD BE A MASSIVE THING FOR THIS COMPANY. IT'S ALREADY A MASSIVE VALUATION FOR A MANUFACTURER STRUGGLING TO INCREASE SALES. CAROLINE: THANK YOU. THE INVESTOR PERSPECTIVE.
NANCY JOINS US WITH YOUR VIEW MORE BROADLY. THE AI PLAY, SO KEY TO TESLA AND THE MARKET. WE STILL QUESTION IT. NANCY: WE ARE STRONG BELIEVERS THIS IS EARLY INNINGS AND IT IS THE LONG-TERM. MEDIUM-TERM, DISINFLATIONARY. NEAR-TERM, LOOK AT THE FACTS. HYPER SCALARS ARE HAVING TO SPEND BILLIONS, PROBABLY TRILLIONS.
ONE TIMESHIFT FROM CPUS TO GPU'S FOR EXTENDING DATACENTER CAPACITY. WE HAVE TO BUILD POWER. NOT JUST FOR GENAI. AUTONOMOUS VEHICLES. POWER DEMAND WILL DOUBLE OVER THE NEXT FIVE YEARS.
THESE ARE HUGE NUMBERS, HUGE CAPEX INVESTMENT. IT MAY BE NEAR-TERM THIS INVESTMENT, WHICH IS AN INTERESTING OPPORTUNITY IN INFRASTRUCTURE, AND MAYBE SHORTAGES THAT IT CAN BRING NEAR-TERM, THE MONETIZATION DOESN'T COME AS QUICKLY, IT COULD BRING INFLATION AS WELL. CAROLINE: WHERE DOES ONE INVEST? PICKS AND SHOVELS, CHIPS? INFRASTRUCTURE, ENERGY? APPLICATIONS? NANCY: WE THINK YOU GO A LITTLE TO ALL. WE ARE INVESTED IN INFRASTRUCTURE. SUPER INTERESTING. DIGITAL INFRASTRUCTURE, POWER AND THE COMBO. WE CAN EARN EQUITY LIKE RETURNS, ESSENTIAL SERVICES, LESS CORRELATION TO THE MARKET WITH GREAT COUNTERPARTIES HERE AND REVENUE ESCALATION/INFLATION PROTECTION OVER TIME. POWERFUL STORY.
WE ALSO HAVE INVESTMENTS AT THE OTHER END OF THE SPECTRUM WITH VENTURE COMPANIES DOING THINGS INCREDIBLY DISRUPTIVE. THERE WILL BE WINNERS AND LOSERS FROM GENAI AND WE WANT EXPOSURE TO THAT. WE HAVE A SPECIALIST TECH MANAGER BECAUSE THAT ALLOWS US IN THE PUBLIC MARKETS TO LOOK WHERE GENAI IS NOT YET PRICED AND I WOULD SAY ALL VALUATIONS IN DATA HEAVY INDUSTRIES, GENAI IS NOT PRICED IN TODAY AND THERE ARE INTERESTING OPPORTUNITIES. ED: THE PROBLEM FOR OUR AUDIENCE IS TESLA IS DOWN 5% ON A DATASET THAT COMES OUT ONCE A QUARTER. THERE'S A BIG BODY OF PEOPLE
THAT BELIEVE IN THE LONG-TERM STORY THAT IS ANALOGOUS WITH WHAT YOU HAVE OUTLINED. WHAT WINS OUT HERE? THIS MULTI-YEAR HORIZON BELIEF IN AI OR THE SHORT-TERM PAIN OF HAVING TO GET THERE? NANCY: WE HAVE A VIEW TECH MAY UNDERPERFORM. THERE ARE HIGH EXPECTATIONS.
STOCKS ARE TRADING AT HIGH MULTIPLES, 32 TIMES ON AVERAGE FOR THE MAG SEVEN. THE FED AND CENTRAL BANKS IN THE WORLD ARE EASING RATES WHICH WILL HELP THE OTHER 493 SHARES WHICH TRADE AT MORE ATTRACTIVE VALUATIONS AND WITH EASING SHOULD SUPPORT EARNINGS GROWTH FORWARD. THERE ARE THINGS TO DO IN THE MARKET. YOU DON'T JUST HAVE TO PLAY TECH TO BENEFIT FROM WHAT'S HAPPENING WITH THE SOFT LANDING IN THE EASING.
WE THINK THERE WILL BE TIME FOR MONETIZATION TO TAKE HOLD. MAYBE '26 OR '27. $1 TRILLION IN REVENUE? LET'S SEE. IT WILL TAKE TIME. IN THE ENTERPRISE WHEN YOU USE GENAI, YOU HAVE TO EMBED IT IN BUSINESS PROCESSES, INDUSTRIALIZE AND MAKE SURE IT DOES NOT HAVE CYBER THREATS. THIS TAKES TIME.
NOTE OF CAUTION NEAR-TERM ON GENAI. WE CAN DO OTHER THINGS IN THE MARKETPLACE AND BENEFIT FROM THE PICKS AND SHOVELS WHILE WE ARE WAITING BUT WE THINK IT WILL BE TRANSFORMATIONAL. ED: IS THERE A CORNER OF THE TECH SECTOR UNDERAPPRECIATED BY INVESTORS? NANCY: BEYOND THE MAG SEVEN, MORE BROADLY, OTHER COMPANIES WILL PARTICIPATE. NVIDIA WILL NOT BE ALONE. MAYBE IT IS A WINNER TAKE MOST, SO THERE WILL BE COMPETITION. OTHER COMPANIES BENEFIT. DATA CENTERS. THEY NEED COOLING.
INDUSTRIAL COMPANIES WILL PROVIDE COOLING SERVICES TO DATA CENTERS THAT TRADE AT ATTRACTIVE VALUATIONS. THERE ARE OTHER WAYS OF PLAYING GENAI IN THE INFRASTRUCTURE BOOM. UTILITIES, ONE OF THE BEST PERFORMING SECTORS YEAR TO DATE. WHO WOULD HAVE THUNK? THERE ARE OTHER WAYS TO THINK ABOUT THIS BUT YOU HAVE TO THINK MORE BROADLY, WHERE IS GENAI NOT PRICED IN IN THE SPHERE WITH THE CAPEX BUILD AND THE MONETIZATION WILL TAKE TIME? AT THE MOMENT INVESTORS MAY BE GETTING AHEAD OF WHAT MAY BE DELIVERED NEXT QUARTER. CAROLINE: WHAT ABOUT WHERE IT IS UNDERPRICED GLOBALLY? THE LATEST NEWS WE WILL GO INTO LATER ABOUT KKR LOOKING TO TAKE TRADED CHIP COMPANIES. NANCY: THERE ARE INTERESTING THINGS GLOBALLY.
BLACKSTONE ADJUSTED $16 BILLION IN AUSTRALIA WITH THE LARGEST ASIA-PACIFIC DATACENTER. EUROPE IS FURTHER BEHIND. INTERNATIONAL EXPOSURE TO DATACENTER IN FOR STRUCTURE POWER AND BUILD OUT IS INTERESTING. THEY ARE MUCH FURTHER BEHIND THE U.S. PRICES ARE MORE REASONABLE ON A RELATIVE BASIS. THERE ARE OPPORTUNITIES HERE BEYOND THE U.S. ED:
NANCY CURTIN, SIZABLE ADVISORY FIRM, THANK YOU VERY MUCH. COMING UP, ANALYSTS RAISE CONCERNS ABOUT IPHONE SALES GROWTH. ♪ CAROLINE: APPLE PREPARING TO ANNOUNCE A NEW LOW-END IPHONE EARLY NEXT YEAR ALONG SIDE UPGRADED IPADS. IS THIS ABOUT INDIA AND CHINA AND THE CONSUMER THERE? >> THIS IS NOT. THIS IS MORE OF A GLOBAL THING.
THE IPHONE 16 ACROSS THE WORLD IS NOT MEETING EXPECTATIONS ACCORDING TO SOME. THEY HAVE BEEN PLANNING THIS FOR YEARS, A PLAN THAT BRINGS DOWN THE PRICE POINTS OF THESE FEATURES, GLOBALLY, AT A SUB $500 PRICE POINT, THEY WILL BRING SOMETHING QUITE COMPELLING TO THE MARKET. THE REASON THIS IS NOT ABOUT INDIA IS BECAUSE IN INDIA THE MARKET SHARE LEADERS, THEY ARE SUB $200 PHONES.
THEY ARE STILL NOT PLAYING IN THAT MARKET THAT WOULD BOOST SHARE SIGNIFICANTLY IN INDIA. THIS WOULD HELP THEM MAKE ADDITIONAL STRIDES GLOBALLY. ED: PROJECT CODENAME V59, WHAT ARE SOURCES TELLING YOU ABOUT A REFRESHED IPHONE AS HE -- IPHONE SE. MARK: IT IS THE NEW LOW-END IPHONE. IT WILL LOOK SIMILAR TO THE 14. IT WILL SUPPORT APPLE INTELLIGENCE. UPGRADED CAMERAS OVER THE PRIOR
SE. THE CURRENT SE LAUNCHED IN '22 STILL HAS THE HOME BUTTON. IT IS THE ONLY IPHONE LEFT WITH THE HOME BUTTON AND THE ONLY APPLE PRODUCT THAT HAS NOT BEEN UPDATED TO REMOVE IT.
THEY TRANSITIONED THE LOW-END IPAD TO MAKE IT A FULL-SCREEN DESIGN. THIS WAS THE LAGGARD. THAT WILL CHANGE NOW. THIS WILL MAKE THINGS EASIER FOR APPLE. THEY DON'T HAVE TO SUPPORT OLDER OPERATING SYSTEMS FOR MUCH LONGER. THEY ARE ABLE TO MOVE TO A USER INTERFACE CONSISTENT ACROSS ALL DEVICES. THIS IS A BIG DEAL FOR THE CONSUMER AND THE COMPANY.
I THINK IT WILL BE A STRONG SELLER. CAROLINE: HOW BIG A DEAL IS THE NEW IPOD AIR? MARK: THAT UPDATE WILL BE MINOR. IT WAS LAST UPDATED ALONGSIDE THE IPAD PRO INMATE. LAST MAY, THEY INTRODUCED A LARGER SIZE OF THE AIR. THEY WERE BRINGING THE PRO DISPLAY DOWN MARKET AND THAT IS SIGNIFICANT FOR SCHOOLS AND BUSINESSES WHERE YOU BUY THESE IN BULK AND YOU MAY WANT SOMETHING WITH A BIGGER DISPLAY BUT NOT SPEND THE EXTRA $500. THAT WAS INTERESTING. THEY ARE MANUFACTURING NEW
KEYBOARDS. THE CURRENT MODELS USE THE OLD IPAD PRO KEYBOARD. THEY DIDN'T CREATE A NEW AIR KEYBOARD WHEN THEY LAUNCHED EARLIER THIS YEAR. THEY ARE BRINGING DOWNMARKET SOME OF THE NEW FEATURES TO THAT FAMILY AND CREATING MORE OF A UNIFIED ACCESSORY ECOSYSTEM. I THINK THAT WILL BE A STRONG SELLER AS WELL. ED: MARK, ANOTHER BIG BREAKING STORY ON APPLE, THANK YOU VERY MUCH.
COMING UP, HOW ONE COMPANY IS USING AI TO SPEED UP CODING. ♪ CAROLINE: GOOGLE. IT'S LOOKING TO TAKE ON OPENAI WITH AI SOFTWARE THAT DEMONSTRATES THE HUMAN ABILITY TO REASON.
RACHEL METZ HAS MORE. HOW MUCH ARE THEY CHASING OPENAI? HOW MUCH WERE THEY ALREADY BUILDING THIS? RACHEL: GOOGLE HAS BEEN A PIONEER BUILDING THE TECHNOLOGY USED IN A LOT OF THESE SYSTEMS. CHAIN OF THOUGHT, THE IDEA BEHIND THE TECHNIQUE IS WHEN A PERSON GIVES AI A PROMPT LIKE A HARD MATH PROBLEM, WITH THIS KIND OF TECHNIQUE, THE SYSTEM TAKES THE PROMPT AND IN THE BACKGROUND UNSEEN TO THE USER IT IS COMING UP WITH SIMILAR PROMPTS AND SORTING THROUGH THE PROBLEM STEP-BY-STEP AND PRESENTING WHAT SEEMS LIKE THE BEST ANSWER TO THE USER. GOOGLE HAS A HISTORY HERE. OPENAI MADE A SPLASH RECENTLY. GOOGLE TENDS TO BE MORE CAUTIOUS. HUGE COMPANY.
A LOT OF MOVING PARTS. WE WILL SEE. ED: IT TENDS TO BE CAUTIOUS. SINCE CHATGPT IN NOVEMBER '22, IT'S BEEN A WILD RIDE.
THERE IS PRESSURE. COMPETITION, THEY ARE COGNIZANT. WHAT DOES THAT LOOK LIKE, THE PUSHBACK TO CATCH UP AGAINST OPENAI? RACHEL: A FEW DIFFERENT THINGS. INITIALLY, CHATGPT WAS POPULAR. GOOGLE FELT CAUGHT FLAT-FOOTED. THEN FELT WE HAVE TO PUT SOMETHING OUT TO BE COMPETITIVE.
AS TIME PASSED, THEY WANT TO BE CAUTIOUS. THEY HAVE A LOT TO THINK ABOUT. SO MANY USERS, SO MANY PEOPLE IN THE COMPANY. THEY ARE TRYING TO TAKE THEIR TIME AND GET IT RIGHT. THEY HAVE AMAZINGLY SMART
PEOPLE WORKING ON THIS TECH FOR A LONG TIME SO IT WILL BE INTERESTING. CAROLINE: HAVEN'T EVEN DISCUSSED NOTEBOOK LM YET. THANK YOU SO MUCH. NOT EVERYONE IS BULLISH ON AI. A RENOWNED PROFESSOR AT M.I.T. IS NOT SURE AI CAN DELIVER ON THE PROMISE OF AN ECONOMIC REVOLUTION. HE GETS THE POTENTIAL OF AI BUT BY HIS CALCULATION A SMALL PERCENT OF ALL JOBS, 5% IS RIGHT TO BE TAKEN OVER OR HEAVILY AIDED BY AI OVER THE NEXT DECADE. ED:
COD IEUM RAISED $150 MILLION IN A SERIES C ROUND, THE CEO AND COFOUNDER JOINS US FOR MORE. WELCOME. A LOT OF PEOPLE PHONED ME, YOU HAVE TO CHECK OUT CODIEUM. VARUN: IT FUNDAMENTALLY ENABLES USERS TO USE SOFTWARE FASTER. THE PLATFORM HAS 700,000 DEVELOPERS. ONE OF THE KEY THINGS WE FOCUS ON D ISE-PERSONALIZATION. CODE IS AN INDEPENDENT DATA SOURCE AND WE TRY TO MAKE THE RESPONSES AS PERSONALIZED AS WE CAN TO THE COMPANIES.
RIGHT NOW THEY ARE SEEING A 20% REDUCTION IN TOTAL DEVELOPMENT TIME. ED: I WILL MAKE AN OBSERVATION AND YOU RESPOND. 700,000 USERS, 100,000 ENTERPRISE CUSTOMERS. YOU RAISED LITTLE MONEY COMPARED TO COMPANIES THAT HAVE RAISED A LOT, THAT HAVE NOT STARTED SELLING ANYTHING YET. WHAT DO YOU MAKE OF THAT? VARUN: I DON'T HAVE A LOT OF COMMENTS ON THIS. I WORKED IN AUTONOMOUS VEHICLES WHERE COMPANIES WERE RAGING LARGE AMOUNTS OF MONEY WITHOUT DEVELOPING A PRODUCT. THIS IS NOT UNCOMMON.
WE ARE IN A SPACE MOVING INCREDIBLY FAST. THE ONLY THING THAT WILL GUARANTEE THE ABILITY TO EARN THE RIGHT TO WORK WITH LARGE ENTERPRISES IS SHIPPING QUICKLY AND STAYING CLOSE TO THE TECH. CAROLINE: IT'S A CROWDED SPACE. GITHUB THE COPILOT, SAM ALTMAN SAYING HE LOVES TO CODE ON CHATGPT. HOW DO YOU TAKE MARKET SHARE? VARUN: WE BELIEVE THIS SPACE WILL BE CROWDED BECAUSE THE PRIZE IS LARGE.
IF A TOOL IS ABLE TO GENERATE OR REDUCE APPLICATION DEVELOPMENT TIME BY 20%, IT WOULD BE SURPRISING IF THERE WERE ONLY ONE PLAYER. THE WAY WE LIKE TO LOOK AT IT IS WHAT CAN WE DIFFERENTIALLY DO BETTER THAN OTHER COMPANIES? WE CARE A LOT ABOUT SECURITY AS WELL AS BEING A PLATFORM AGNOSTIC TOOL. WE ARE NOTICING A SMALL FRACTION OF LARGE ENTERPRISES STAND ARISING ON -- STANDARDIZING ON GITHUB CLOUD.
WE DON'T TIE OURSELVES TO A PLATFORM. IN ADDITION WE DON'T REQUIRE A COMPANY TO SEND THEIR IP OUTSIDE THEIR FIREWALL WHICH GITHUB REQUIRES RIGHT NOW. CAROLINE: YOU FEEL YOU HAVE A UNIQUE SELLING POINT. YOU WILL KEEP INNOVATING. YOU TOLD PREVIOUSLY YOU RAISED MONEY BEFORE AND HAVEN'T SPENT THAT. WHY DO YOU NEED THE MONEY NOW? VARUN: AS WE START TO WORK WITH SOME OF THE WORLD'S LARGEST ENTERPRISES LIKE DELL, WE WANT TO MAKE SURE WE ARE GREAT VENDORS TO CUSTOMERS.
THAT MEANS CONTINUING TO INVEST IN INNOVATION. GPU COSTS ARE HIGH. BEYOND THAT, INCREASING THE AMOUNT OF, THE SIZE OF R&D. WE DON'T WANT TO BE IN A POSITION WHERE WE ARE WORKING WITH LARGE COMPANIES THAT TRUST US AND WE CANNOT PROVIDE SUPPORT TO THEM IN THE BEST WAY POSSIBLE. CAROLINE: $65 MILLION IN A SERIES B AND NOW THE SERIES C.
YOU HAVE SOME MONEY TO SPEND. THANK YOU FOR JOINING US. GOOGLE RACING OPENAI. WHAT NEXT IN TERMS OF INNOVATION IN AI AND THE KEY COMPANIES TO LOOK OUT FOR? ♪ CAROLINE: WELCOME BACK. ED: CAROLINE: WE WERE TRADING LOWER AT THE START OF THIS PROGRAM. BROADCOM, NVIDIA LEADING FROM A POINTS PERSPECTIVE. BITCOIN BOUNCING BACK FROM YESTERDAY, THE SELLOFF AMID THE GEOPOLITICAL TENSIONS, THE KEY CONCERNS OF IRAN MISSILE ATTACKS ON ISRAEL. WE ARE CURRENTLY IMPROVING FROM
A MARKET SENTIMENT PERSPECTIVE. ED: TESLA DOWN AFTER THE COMPANY POSTED QUARTERLY SALES BELOW ESTIMATES. OFF THE SESSION LOWS. APPLE IS NOW FLAT. IT HAD BEEN DOWN 1.5% AFTER PRODUCTION OF A LOW-END IPHONE WHICH COULD COME EARLY NEXT YEAR. ON A DAY LIKE TODAY WHERE WE WERE TREADING WATER, SOME OF THOSE MAKE CAP NAMES, THE MOVES WERE MORE NOTABLE. DO YOU SEE A STORY TODAY? JESS: LOOKING AT THESE BIG TECH COMPANIES IN THE S&P, WHEN YOU HAVE NVIDIA AND BROADCOM AMONG THE BIGGEST POINT CONTRIBUTORS, THE OTHER SIDE TESLA HAS MISSED THIRD-QUARTER DELIVERY NUMBERS, ESPECIALLY THE ISSUES WITH CHINA. THAT'S THE BIGGEST POINT
DECLINER IN THE S&P AS WELL AS THE OTHER NAMES LIKE APPLE AS WELL AS META AND ALPHABET. CHIP SHARES WERE DOWN LAST QUARTER. EVERCORE MADE A CALL FOR THE FOURTH ORDER THAT THEY ANTICIPATED A POTENTIAL REBOUND IN CHIP STOCKS AND YOU ARE BEGINNING TO SEE THAT THIS MORNING. CAROLINE: LOOK AT THAT, UP MORE THAN 2.2%. IS THIS THE KNEE-JERK REACTION TO YESTERDAY'S SELLOFF OR IS THE THESIS CHANGING? JESS: IT LOOKS LIKE A KNEE-JERK REACTION. THAT WAS THE BIGGEST DECLINE OF THE MONTH FOR THE S&P. MICRO TECHNOLOGY LAST WEEK BOOSTED CHIP COMPANIES AFTER IT HAD THE OPTIMISTIC OUTLOOK.
WE STILL HAVE TIME BEFORE WE WOULD HEAR FROM NVIDIA, WELL IN NOVEMBER. A LOT OF THOSE COMPANIES LIKE MICRON WERE TRADING AT A DISCOUNT. ESPECIALLY BECAUSE OF THAT, EVEN NVIDIA, WHEN IT HAD THE STOCK SPLIT IN JUNE, IT WAS UNDERPERFORMING APPLE. THE QUESTION IS THOSE THAT LOOKED CHEAPER, MAYBE PEOPLE ARE STEPPING UP TO BUY THOSE NAMES. CAROLINE: THANK YOU.
CHIP COMPANIES THINKING ABOUT GLOBAL SEMICONDUCTORS. MAKERS ARE MONITORING SUPPLIES OF QUARTZ AFTER HURRICANE HELENE HALTED PRODUCTION IN NORTH CAROLINA MINES. WHY DOES HIGH-PURITY QUARTZ MATTER TO CHIPMAKERS? >> I'M GLAD TO GEEK OUT ABOUT THIS WITH YOU. QUARTZ IS A PREHISTORIC MATERIAL, HUNDREDS OF MILLIONS OF YEARS OLD, DEVELOPED IN A TIME WHEN THERE WAS VERY LITTLE WATER AROUND ON THE PLANET.
BECAUSE OF THAT SCARCITY OF WATER, FEWER IMPERFECTIONS IN THE MATERIAL WHICH MEANS WHEN IT IS USED IN THIS CHIPMAKING PROCESS, IT IMPARTS FEWER IMPERFECTIONS ONTO THE EVENTUAL CHIP. ED: ITS ROLE IN THE MANUFACTURING PROCESS IS MULTIFACETED. QUARTZ WAFERS ARE USED IN FREQUENCY CONTROL. ONE THING I'VE LEARNED ABOUT THE INDUSTRY THE LAST FEW YEARS, IT IS GOOD AT STOCKPILING STUFF IT NEEDS. IS THAT THE SCENARIO PLAYING OUT HERE? DANA: INDEED. WE REACHED OUT TO MAJOR
CHIPMAKERS ON DIFFERENT CONTINENTS, TSMC, SAMSUNG, ALL OF THEM DELIVERED COMMENTS THAT SEEMED UNBOTHERED. THEY SEEM TO BE THRIVING OFF OF STOCKPILES. THAT SAID, TWO THESE TWO MINES IN NORTH CAROLINA ACCOUNT FOR 80% OR MORE OF THE GLOBAL SUPPLY OF QUARTZ. THEY HOPEFULLY SOON WILL BE ABLE TO REOPEN AFTER THE HURRICANE. CAROLINE: IT FEELS VERY PAINFUL SOMETHING
THAT WAS FOCUSED ON BECAUSE OF A LACK OF WATER IS NOT PREVENTED BECAUSE OF TOO MUCH WATER AND FLOODING. DO WE HAVE A TIMEFRAME? ANYTHING FROM THE MANUFACTURERS AS TO WHEN THEY MIGHT GET BACK ONLINE? DANA: OUR REPORTING DOES NOT KNEEL DOWN A TIMELINE. THE TONE IS ROSY ENOUGH. I DON'T WANT TO SAY ROSIE GIVEN THE CIRCUMSTANCES BUT THE MANUFACTURERS SEEM CONFIDENT THAT THE PLANS WILL -- THE PLANTS WILL EVENTUALLY REOPEN. CAROLINE: THANK YOU. KKR CONSIDERING A TAKEOVER BID FOR ASMPT.
THEY HAVE MADE A NONBINDING PRELIMINARY APPROACH. IT FOLLOWS SIMILAR ATTEMPTS IN THE PAST BY OTHERS. ORACLE SPENDING $6 BILLION TO BUILD OUT SERVICES IN ASIA, PROVIDING DATA CENTERS TO CORPORATE CLIENTS.
THEY DID NOT OFFER SPECIFICS. A NEW LAW IN THE PHILIPPINES WOULD IMPOSE A 12% VALUE ADDED TAX ON NONRESIDENT DIGITAL SERVICE PROVIDERS, INCLUDING SEARCH ENGINES, DIGITAL MARKETPLACES, CLOUD SERVICES AND EVEN MEDIA LIKE DISNEY. COMING UP, WE ARE JOINED BYALOK SAMA, BEHIND THE SCENES TO LOOK TECH VC FIRMS WERE BEHIND SOME OF THE BIGGEST DEALS. ♪ AND I HEART. THIS IS BLOOMBERG.
ED: WE ALL KNOW THE POWERHOUSE THAT IS SOFTBANK, THE TECH INVESTOR. BUT WE DON'T KNOW AS MUCH ABOUT WHAT GOES ON BEHIND THE SCENES OF THESE MAJOR DEALS. A NEW BOOK GIVES US A PEEK INTO THE DEALINGS AND INTO THE ICONIC FOUNDER. IT IS CALLED THE MONEY TRAP. LET'S START, NOW THAT THE BOOK IS WRITTEN, WHAT IS SOFTBANK? >> THANK YOU FOR HAVING ME. GREAT TO BE HERE.
ED: YOU JUST WROTE A BOOK. >> IT'S A SOFTWARE DISTRIBUTOR. SOFTBANK IS REALLY ABOUT MY SEO SHEET -- MASAYOSHI SAN. I CONSIDER IT A GREAT PRIVILEGE OF MY LIFE TO WORK ALONGSIDE HIM FOR A WHILE.
KIND OF THE DEALMAKER IN CHIEF. THE ONE THING I WOULD HIGHLIGHT ABOUT HIM, HE IS A FUTURIST IN THE TRUE SENSE OF THE WORD. THAT TERM VISIONARY GENIUS GETS THROWN AROUND A LOT BUT HE HAS PROVEN IT TIME AND AGAIN. ED: SOFTBANK IS A CONGLOMERATE. YOU HAVE DIVISIONS WITH INVESTMENT COMMITTEES. IT COMES DOWN TO MASA MAKING AN INSTINCTIVE CALL. IS THAT WHAT YOU FOUND? ALOK: IT IS MORE THAN INSTINCTIVE.
SOFTBANK IS ALL ABOUT MASA. THE STANDOUT THING IS HE GETS THE BIG BETS SPECTACULARLY RIGHT. THE STORIES ARE AMUSING. SOFTBANK JAPAN IS A LOWER PROFILE.
IT'S A REMARKABLE STORY. PEOPLE THINK HIS COME BACK IN 2006 WAS THE DEAL WITH ALIBABA. PHENOMENAL. SOFTBANK JAPAN, VODAFONE WAS SO DESPERATE TO GET RID OF IT, HE BOUGHT THE COMPANY ON A HANDSHAKE FROM STEVE JOBS. HE SAW THAT COMING. HE'S MADE HUGE BETS.
ARM IS $100 BILLION. CAROLINE: HE HAS GOT SOME SPECTACULAR MRS. AS WELL -- MISSES AS WELL. THAT'S THE VC WAY. SOME PAYOFF, OTHERS DON'T.
MONEY BEING THROWN AT WE WORK, AT IMPROBABLE, AT WAG, WHICH WENT HORRIBLY WRONG -- WHAT MAKES THE OPENAI POTENTIAL THERE? IS THAT THE RIGHT ONE TO BE THROWING MONEY AT RIGHT NOW? ALOK: I'M NOT SURE THROWING MONEY IS THE WAY I WOULD DESCRIBE IT. KEEP IN MIND, MASA HAS BEEN FASCINATED BY AI. HE WAS TALKING ABOUT THIS WHEN I FIRST GOT TO KNOW HIM IN '14. I DESCRIBED THIS IN MY BOOK, SITTING ON HIS PORCH AT HIS HOME IN TOKYO AND HE WAS TALKING OBSESSIVELY ABOUT AI, SINGULARITY AND WHAT IT WOULD MEAN FROM A TECH PERSPECTIVE.
HONESTLY I DID NOT TAKE THEM SERIOUSLY AT THE TIME. HE HAS BEEN CLEAR NOW. HE ANNOUNCED EVERYTHING WE HAVE SEEN BEFORE IS A WARM UP. HE'S READY TO MAKE BIG MOVES.
THAT'S A LONG-WINDED WAY TO ANSWER YOUR QUESTION. SOFTBANK AND ITS SCALE, IT IS SITTING NORTH OF $40 BILLION CASH. I DON'T THINK $500 MILLION IN OPENAI AS A BIG BET BY SOFTBANK STANDARDS. IT'S BEING IN THE GAME. I'M WAITING FOR HIM TO MAKE HIS NEXT BIG MOVE. THEY WILL BE BIG KNOWING HIM. THAT'S THE WAY HE ROLLS. CAROLINE: PAINT US THE VISION. WE HAVE HEARD THE AI THESIS.
ARM, THE DEAL YOU HELPED ORCHESTRATE, WAS FIRST THE TARGET. WHAT DOES HE BUILD EVENTUALLY? SOMETIMES IT'S PURCHASING WITH SOFTBANK, SOMETIMES WITH THE VC ARM. ALOK: THE FIRST VISION FUND WAS A TRUE FUND. IT INVOLVES THIRD-PARTY MONEY MAINLY FROM THE MIDDLE EAST. THE OTHER VISION FUNDS ARE ON
BALANCE SHEET. THE SUBTLETY OF SOFTBANK, THE VC ARM, TO ME, IT'S NOT MEANINGFUL IN THAT CONTEXT. WHEN YOU READ ABOUT SOFTBANK BUYING CRAFT CORE, MY UNDERSTANDING IS THAT IS A STRATEGIC DEAL AND WHAT THEY INTEND TO DO IN CONJUNCTION WITH OWNERSHIP OF ARM, REMAINS TO BE SEEN. TALKING ABOUT VISION, I SPEAK, I HAVE BEEN OUT OF SOFTBANK FIVE YEARS NOW SO I AM NOT AN INSIDER BUT IN TERMS OF WHAT I SEE, FIRST OF ALL ARM. I DON'T FOLLOW STOCKS. I WILL NOT COMMENT ON THE VALUATION. ARM IS WELL-POSITIONED.
IT HAS ALWAYS BEEN ABOUT BLUEPRINTS FOR CHIP DESIGN. ENERGY EFFICIENCY HAS ALWAYS BEEN THE SECRET SAUCE. WHEN YOU GET TO THE EDGE OF AI WITH APPLE INTELLIGENCE AND AUTONOMOUS CAR'S, THAT GETS TO BE IMPORTANT.
THE GRAPHCORE ACQUISITION IS A SIGNAL. THE COMPANY IS BEING EXPLICIT THAT ARM INTENDS TO BE A CHALLENGE TO NVIDIA IN TERMS OF THEIR DOMINANCE IN DATA CENTERS. THERE IS A LOT OF THAT GOING ON. MY OWN VIEW OF AI, I SPEND TIME WITH SENIOR ADVISORS AND WHAT THEY HAVE AVOIDED GETTING INTO, THE LM'S, WHAT THEY ARE SEEING IS AI FOCUSED ON THEIR PORTFOLIO AND THE IMPLICATIONS FOR DEPLOYING AI. JENSEN WONG TALKED ABOUT IT IN HIS LAST EARNINGS RELEASE.
AIR DUCTS AND A 30% REDUCTION IN SERVICE COST. THAT STUFF IS REAL. ED: THEY WERE IN EARLY IN NVIDIA SOFTBANK BUT THEY GOT OUT EARLY.
500 MILLION DOLLARS IN OPENAI MAY NOT BE BIG. YOU SAID THEY WILL MAKE THEIR NEXT BIG BET. HOW DO YOU KNOW HE WILL TIME IT RIGHT AND THAT IN THE END, WHATEVER HAPPENS, HE WILL BE PART OF THE CONVERSATION? ALOK: THE TRACK RECORD. HE'S DONE IT OVER AND AGAIN. WITH SMARTPHONES, HE WAS THREE YEARS AHEAD. I DON'T KNOW WHAT HIS NEXT BIG MOVE WILL BE.
I KNOW IT WILL BE BIG. I THINK HE HAS SAID IT WILL BE SOMETHING TO DO WITH AI. ENERGY IS ANOTHER SPACE. SOFTBANK ENERGY IS ONE OF THE LEADING SOLAR POWER GENERATORS.
THAT'S A HUGE BOTTLENECK IN TERMS OF THE BUILDOUT OF DATA CENTERS. THEY ARE HUGELY POWER-HUNGRY. COULD BE SOMETHING IN THAT SPACE FOR EXAMPLE. CAROLINE: THANK YOU SO MUCH FOR SPENDING TIME WITH US.
COMING UP, THE PINTEREST CEO TELLS US ABOUT MAXIMIZING ADVERTISING IMPACT. CAROLINE: INTEREST LAUNCHED PERFORMANCE+, A NEW SUITE OF TOOLS TO HELP ADVERTISERS TARGET RESULTS. I'M ASSUMING THE BETTER EFFICIENCY MEANS MORE REPEAT ADVERTISERS ON YOUR PLATFORM? BILL: EXACTLY RIGHT. WE HAD PINTEREST PRESENTS YESTERDAY, OUR ANNUAL EVENT FOR ADVERTISERS AND WE SAW A RECORD TURNOUT.
OVER THE LAST TWO YEARS WE TRANSFORMED PINTEREST FROM DIGITAL WINDOW SHOPPING TO A PLACE WHERE PEOPLE WERE BUYING AND SHOPPING DIRECTLY WITH RETAILERS. THAT'S GIVEN US OUR BEST PRODUCT MARKET FIT EVER WITH USERS AND ADVERTISERS. WE'VE DOUBLED THE NUMBER OF CLICKS TO ADVERTISERS YEAR ON YEAR FOR THREE CONSECUTIVE QUARTERS AS WE BRING ON AI ADD TOOLS. CAROLINE: YOU WERE BROUGHT ON BECAUSE OF YOUR EXPERTISE IN PAYMENTS.
I'M INTERESTED IN WHICH DEMOGRAPHIC YOU SERVE? BILL: WE'VE BECOME THE PLACE GEN Z SHOPS. 40% OF USERS ARE GEN Z, OUR LARGEST AND FASTEST GROWING DEMOGRAPHIC. THE NUMBER ONE REASON FOR SHOPPING. 60% SAY THEY ARE ALWAYS SHOPPING. THE RISE OF GEN Z, THEIR BUYING
POWER IS GROWING. OVER THE NEXT FIVE YEARS, THEY ARE PREDICTED TO BYPASS BABY BOOMERS IN BUYING POWER. PINTEREST IS WHERE THEY SHOP. IT'S A GREAT PLACE FOR
ADVERTISERS TO MEET THAT GROWING AUDIENCE. ED: DO YOU HAVE A SENSE FOR THE UPCOMING HOLIDAY SEASON WHAT THE BIGGEST FINAL WILL BE OR WHO YOU WILL HELP THE MOST? WE TALKED ABOUT AMAZON, ALSO SOME OF THE OTHER NAMES FROM CHINA ARE BECOMING IMPORTANT FOR YOU. BILL: WE ARE BROADENING OUR REACH WITH ADVERTISERS. AS WE OPENED THE STORES ON OUR PLATFORM WE SAW THE MOST SOPHISTICATED ADVERTISERS FIRST. THAT'S GREAT. THEY ARE THE HARDEST TO PLEASE. THAT'S WIDENING.
WITH PERFORMANCE+ AND AI DRIVEN TOOLS, PITS MAKING IT EASIER FOR A BROADER SET TO TAKE ADVANTAGE. AUTOMATED CAMPAIGN CREATION, AUTOMATED CREATIVE. WE ARE SEEING BIG ADVERTISERS, WALGREENS IS SEEING A 55% IMPROVEMENT IN CLICK THROUGH RATE BY USING OUR GENERATED BACKGROUNDS SO THE PRODUCTS LOOK MORE ATTRACTIVE, SO YOU CAN SEE THAT SHAMPOO IN YOUR BATHROOM.
WE ARE ALSO SEEING SMALLER UP-AND-COMING ADVERTISERS, LIKE RUGGABLE, WE ARE NOW THEIR LARGEST TRAFFIC SOURCE BY VOLUME AND EFFICIENCY DRIVING THREE TIMES THE CLICKS AT HALF THE COST. THESE AI DRIVEN TOOLS ARE BROADENING OUT THE ADVERTISERS ON OUR PLATFORM. ED: AUGMENTED REALITY. CHECK OUT MY PIECE ON META. WILL PINTEREST MAKE INVESTMENTS IN HARDWARE FOR AR? BILL: WE ARE NOT A HARDWARE PLATFORM BUT WE ARE SEEING WE HAVE BECOME INCREASINGLY A DESTINATION FOR USERS, MORE THAN 80% OF USAGE IS PEOPLE COMING TO THE MOBILE APP DIRECTLY.
THAT USAGE INCREASINGLY, MORE SO WITH GEN Z, IS TO SHOP. THESE VISUAL EXPLORATION JOURNEYS, THIS IS WHERE PINTEREST IS WINNING. VISUAL SEARCH, SHOPPING IS INHERENTLY VISUAL. THIS IS WHERE PINTEREST STANDS OUT. WE SEE USERS COMING DIRECTLY TO
US FOR THAT INCREASINGLY. CAROLINE: WHAT IS THE UNDERLYING TECHNOLOGY DRIVING THESE INNOVATIONS? BILL: AI HAS BECOME A CORE COMPETENCY FOR US. WHEN WE MOVED TO GPU SERVING, LARGE MODELS, 100 TIMES LARGER THAN TWO YEARS AGO, THAT GAVE US A 10 PERCENTAGE POINT LIFT IN RELEVANCY OF RECOMMENDATIONS. AI IS ONLY AS GOOD AS IT IS ACTING. WE HAVE A UNIQUE SIGNAL. USERS COME TO PINTEREST TO
CURATE THEIR TASTES. HOW WILL THAT HANDBAG LOOK WITH THIS DRESS AND SHOES? HUNDREDS OF MILLIONS OF USERS DO THAT EVERY DAY. WHAT'S AGREEMENT RECOMMENDATION -- WHAT IS A GREAT RECOMMENDATION, NOT JUST FOR THAT USER BUT FOR OTHERS? WHEN WE TEST LLMS OFF THE SHELF FROM MAJOR PROVIDERS, WHEN THAT SAME LLM'S TUNE ON OUR SIGNAL, WE GET 300 BASIS POINTS OF ADDITIONAL ENGAGEMENT. CAROLINE: BILL READY, THANK YOU FOR YOUR TIME. THAT DOES IT FOR THIS EDITION
OF BLOOMBERG TECHNOLOGY.
2024-10-03 20:13
