Trump Wants US iPhone Production, EToro CEO on IPO | Bloomberg Technology
>> FROM THE HARDWARE INNOVATION, MONEY, AND POWER COLLIDE, IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS "NUMBER TECHNOLOGY." TRUMP ASKS'S CEO TO MOVE PRODUCTION FROM INDIA TO THE U.S. MARKET. ED: THE COREWEAVE CEO JOINS US ON
THE BACK OF THE COMPANY'S FIRST EARNINGS AS A PUBLIC COMPANY. CAROLINE: THE CEO OF ETORO JOINS US AS THE IPO MARKET OPENS BACK UP. WE CHECK IN ON THIS MARKET, WHICH MAYBE HAS JUST GOT A LITTLE OVER EXUBERANT AND DIALS BACK ON THE DAY. HIT OVERBOUGHT TERRITORY ON THE RELATIVE STRENGTH INDEX WHEN YOU ARE LOOKING AT THE NASDAQ YESTERDAY. TODAY WE PAIRED THAT, BUT ONLY BY .3%. WE ON TRACK FOR 5% GAINS THIS WEEK AND IT SEEMS AS THOUGH BIG TECH COMES OFF OF SOME OF THOSE HIGHS AS THE MACRO DATA PAINTS MAY BE SLIGHTLY COOLER INFLATION ENVIRONMENT THEN WE WERE THINKING. ED:
WE SEE THE SAME BEHAVIOR IN APPLE. MUTED DECLINES PARING SOME OF ITS MORE SIGNIFICANT DECLINES EARLIER. ON HIGH'S U.S.-LISTED SHARES, THE COMPANY ASSEMBLING THE IPHONE, SOFT OR IN PART AN EARNINGS STORY, BUT IN PART THE PRESIDENT OF THE UNITED STATES WITH SEVERE WORDS FOR APPLE AND TIM COOK. LISTEN TO THIS. PRESS TRUMP I HAD A PROBLEM WITH TIM COOK YESTERDAY. I SAID, YOU'VE TREATED ME VERY GOOD. COME HERE WITH 500 BILLION DOLLARS BUT YOU ARE BUILDING
ALL OVER INDIA. I DON'T WANT YOU BUILDING IN INDIA. CAROLINE: MARK GURMAN GIVES US THE CONTEXT. I WANT TO UNDERSTAND FOR OUR
AUDIENCE JUST HOW MUCH WE HAVE SEEN PRODUCTION SHIFT TO INDIA TO SATISFY THE U.S. MARKET. MARK: THANK YOU FOR HAVING ME. THESE ARE TRULY SOME HARSH COMMENTS COMING FROM PRESIDENT TRUMP. OBVIOUSLY, TIM COOK HAS NO CHOICE, BECAUSE OF THE THREAT OF TARIFFS, TO MOVE A LOT OF PRODUCTION OF THE IPHONE AND OTHER DEVICES TO ELSEWHERE, RIGHT? FOR THE MOST PART THEY WERE BUILDING THINGS IN CHINA, BUT NOW THEY ARE BUILDING PROBABLY THIRD OF IPHONES IN INDIA. THEY SAID ON THE EARNINGS CALL THAT THE MAJORITY OF IPHONE PRODUCTION FOR THE U.S.
MARKET IN THIS COMING QUARTER IS GOING TO BE DONE IN INDIA. THEY CERTAINLY HAVE AGGRESSIVE PLANS TO EXPAND EVEN FURTHER. AGAIN, THAT IS FOR THE U.S. MARKET. THIS IS ABOUT AVOIDING TRADE WAR-TYPE OF SITUATIONS BETWEEN THE U.S. AND CHINA. GEOPOLITICAL ISSUES HAVING TO DEAL WITH CHINA, BUT ALSO BECAUSE OF THESE TARIFFS. LOT OF THIS CAME INTO PLACE BECAUSE OF THE ANTICIPATION OF THESE TARIFFS AND HOW MUCH MORE IT WILL COST APPLE TO PRODUCE IPHONES AND HOW MUCH THAT WOULD SNAP INTO THEIR MARGIN IF THEY CONTINUE TO EXPORT FROM CHINA TO THE U.S.
DEFINITELY SOMETHING APPLE HAD TO DO, AND IT IS UNDERSTANDABLE THAT WITH DONALD TRUMP'S AGENDA WHY HE WOULD NOT BE SO HAPPY ABOUT IT. ED: I WANT TO RECAP SOME OF THE DATA YOU SHARED, WHICH IS BASICALLY ALMOST 90% OF IPHONES ARE CURRENTLY MADE IN CHINA, AND THE BALANCE OF IPHONES ARE MADE IN INDIA. AROUND 30 MILLION UNITS PER ANNUM. DID WE LEARN ANYTHING FROM APPLE'S MOST RECENT EARNINGS OR IN ANY OF YOUR REPORTING SENSE ON HOW APPLE IS PLANNING FOR THE LONG TERM ON ITS PRODUCTION OF THE IPHONE, HE RESPECTED WHAT THE WHITE HOUSE SAYS? MARK: RIGHT NOW THE PLAN IS TO PRODUCE THE VAST MAJORITY OF IPHONES IN INDIA FOR THE U.S. MARKET BY THE END OF 2026. THERE IS STILL GOING TO BE A NICE CHUNK OF IPHONES MADE IN CHINA THAT IS THE HIGHER-END PRO MODELS. THEY ARE WORKING ON TWO NEW IPHONE MODELS FOR THE 20TH ANNIVERSARY. OBVIOUSLY STEVE JOBS UNVEILED
THE FIRST IPHONE IN 2007, SO CROSS THE END OF 2027 THEY HAVE TWO MAJOR NEW IPHONES COMING OUT. HAVE A VULNERABLE IPHONE, WHICH WOULD COMPETE WITH THE SAMSUNG FOLDER, GOOGLE PIXEL, SOME OF THE OTHER CHINESE-MADE FOLDABLE SPIRIT THEY ALSO HAVE A 20TH ANNIVERSARY PHONE COMING OUT AT THE END OF 2027. IT USES ADVANCED, CURVED GLASS. VERY ADVANCED TECHNOLOGY. THEY ARE NOT GOING TO BE ABLE TO PULL THAT OFF OUTSIDE OF CHINA.
TO THE LARGER POINT, THERE IS NO PLAN IN PLACE TO BEGIN BUILDING IPHONES IN THE UNITED STATES. I HAVE AN ARTICLE I WROTE IN APRIL WHICH OUT LINES BY THIS ONE HAPPENED. THE ENGINEERING TALENT, THE MANUFACTURING SKILL SETS, THE MANUFACTURING SPACE.
ALL OF THAT ESSENTIALLY MAKES IT IMPOSSIBLE FOR APPLE TO PRODUCE IPHONES IN THE U.S. AT ANY REASONABLE RATE OR SCALE. ED: BLOOMBERG'S MARK GURMAN. LET'S GET MORE WITH MIKE SHEPARD AND THE POLITICAL SIDE OF THE STORY IN WASHINGTON. IN THE LAST 48 HOURS THE PRESIDENT HAS TAKEN TO THE STAGE, SO TO SPEAK, AND CALLED OUT JEN-HSUN HUANG, THE NVIDIA CEO. CALLED HIM "MY FRIEND WHO IS IN
THE ROOM." 48 HOURS LATER HE CALLS OUT TIM COOK WITH LESS KIND WORDS. THIS IS A PRESIDENT WHO IS USING THE PUBLIC FORUM TO TRY AND GET TECH COMPANIES, AMERICAN TECH COMPANIES TO DO THINGS HIS ADMINISTRATION WANTS. MIKE: THAT'S RIGHT. HE'S USING THE PUBLIC SPACE TO PRESSURE THESE COMPANIES, AND HE IS NOT SHY ABOUT DOING IT.
IT IS A TACTIC WE HAVE SEEN BEFORE. BACK TO THE VERY EARLY DAYS OF THE ADMINISTRATION. WHEN SOFTBANK WAS PLEDGING $100 BILLION OF INVESTMENT IN THE U.S. AND DONALD TRUMP TURNED TO SAO SHE SUN, HOW ABOUT DOUBLING IT? COULD YOU MAKE IT $200 BILLION? RIGHT THERE AS THE TWO MEN WERE STANDING AT A LECTERN, WITH THE ANNOUNCEMENT BEING MADE. IT IS A TACTIC WE HAVE SEEN
REPEATEDLY. THE STARGATE ANNOUNCEMENT WAS MADE, AGAIN, HE WAS ASKING, AND HUNDRED BILLION DOLLARS? WHY CAN'T WE MAKE IT 500 BILLION DOLLARS? LET'S SCALE IT UP. THE PRESIDENT IS PUSHING COMPANIES TO HELP FULFILL HIS AGENDA HERE, WHICH IS THE EXPANDED MANUFACTURING BASE. HE'S LEANING HEAVILY ON THE TECH INDUSTRY TO DO SO. OBVIOUSLY OTHERS LIKE AVIATION AND CAR MAKING TOO ARE FEELING THAT PRESSURE, BUT TECH IS TAKING CENTER STAGE IN THIS AND YOU CAN SEE THAT WITH THE CONNECTIONS HE HAS TRIED TO MAKE, AS YOU HAVE MENTIONED, WITH JEN-HSUN HUANG AND TIM COOK. SOMEONE HE HAS HAD A RELATIONSHIP WITH SINCE THE FIRST ADMINISTRATION. CAROLINE:
APPLE HAS NOT RESPONDED PUBLICLY TO THE PRESIDENT'S COMMENTS, BUT THEY HAVE FRONT RUN, PERHAPS THE PRESIDENT'S COMMENTS IN TERMS OF TRYING TO SIGNAL THE INVESTMENT TO COME. $500 MILLION THEY SAY THAT WAS GOING TO BE INVESTED IN THE U.S. BUT THAT IS FOR CHIPS OR THE AI FOCUS. IT IS NOT FOR MAKING IPHONES. REALISTICALLY ARE WE GOING TO
SEE APPLE RESPOND BY MORE INVESTMENT, BUT JUST NOT IN TERMS OF IPHONE PRODUCTION? MIKE: IT IS A DIFFICULT QUESTION. THE PRESIDENT MADE VERY CLEAR WHAT HE WANTED. HE WANTS U.S. PHONES MADE HERE, IN THE U.S., AND NOT IN INDIA, AND NOT IN CHINA, CERTAINLY. TO DO THAT PERHAPS DONALD TRUMP NEEDS TO READ MARK GURMAN'S PIECE LAYING OUT ALL OF THE DIFFICULTIES. BUT OF COURSE, THOSE KINDS OF
DETAILS, THE PRESIDENT HAS NOT PAID ATTENTION TO THAT. IT IS UP TO COMPANIES, REALLY, TO USE THE TIME THEY GET WITH DONALD TRUMP AND HIS AIDES TO SHOW, LOOK, IT WILL BE VERY DIFFICULT TO DO THIS. THIS IS WHAT THE COSTS WILL BE. SOME OFFICIALS HAVE TALKED ABOUT, MAYBE THERE SHOULD BE SOME SAVINGS WHEN IT COMES TO AI, WHEN IT COMES TO PROCESSES. HERE ALSO WE DO HAVE A TALENT DEFICIT.
WE DON'T NEARLY HAVE ENOUGH ENGINEERS AND ASSEMBLY-LINE TALENTS TO BE ABLE TO PRODUCE THE VAST NUMBER OF IPHONES FOR THE U.S. MARKET THAT ARE CURRENTLY PLANNED RIGHT NOW IN INDIA. CAROLINE: MICHAEL SHEPARD, GREAT TO CHECK IN WITH YOU.
LET'S RETURN TO WHAT PRESIDENT TRUMP HAS MANAGED TO ACHIEVE FOR NVIDIA AND THE LIKE IN THE MIDDLE EAST. A RIFT WITHIN HIS OWN ADMINISTRATION. TRUMP'S EIGHT IDEALS ARE RAISING ALARM BELLS FOR CHINA HAWKS. CONCERNS GROW THAT THE PROJECT COULD PUT ECONOMIC INTERESTS AT RISK. LET'S BRING IN RILEY GRIFFIN. THIS IS A REALLY WELL-READ STORY AT THE MOMENT AND ALL TO DO WITH BASICALLY HOW WE ENSURE THAT NVIDIA CHIPS GOING TO THE MIDDLE EAST DON'T END UP IN CHINA'S HANDS. RILEY:
WE HAVE SEEN THIS WEEK SPEAKING WITH ADMINISTRATION OFFICIALS THAT THEY ARE UNCOMFORTABLE WITH THE FAST AND LOOSE WAY THESE NEGOTIATIONS HAVE HAPPENED. PARTICULARLY WE ARE INTERESTED TO SEE THAT THERE IS CONCERN ABOUT THE WAY WHITE HOUSE AI ADVISOR DAVID SACKS IS A PART OF THESE NEGOTIATIONS. TRUMP ADMINISTRATION OFFICIALS FEEL THAT HE IS NOT PAYING SENSITIVE ATTENTION TO THE ECONOMIC AND NATIONAL SECURITY CONCERNS THAT YOU MENTIONED. ED:
I THINK IT IS IMPORTANT TO EXPLAIN TO THE AUDIENCE THE BASICS OF THE RELATIONSHIPS BETWEEN THESE NATIONS. THE ORIGINAL AI DIFFUSION RULE TOOK INTO ACCOUNT THIRD COUNTRIES, RIGHT? IT WAS THE IDEA THAT IF YOU SELL A TECHNOLOGY TO A NATION LIKE SAUDI ARABIA OR THE UAE THOSE NATIONS ALSO HAVE A CLOSE RELATIONSHIP WITH CHINA, AND ECONOMIC RELATIONSHIPS. THERE ARE CHINESE NATIONALS WORKING IN THE FIELDS OF AI IN THE UAE, FOR EXAMPLE, AND THAT THEY MAY GIVE ACCESS INDIRECTLY TO CHINESE TECHNOLOGY. HAS THE U.S. ANSWERED ANY OF THAT IN EVERYTHING THAT HAS HAPPENED IN THE LAST FOUR DAYS? RILEY: THE DIFFUSION RULE ITSELF HAS BEEN UNDER REVIEW. IN A WAY THESE NEGOTIATIONS HAVE FRONT RUN THE ANSWER TO THAT QUESTION. AND WE ARE SEEING CONGRESSIONAL
REPUBLICANS RAISE CONCERNS ABOUT THIS PROCESS AS WELL. THIS IS NOT JUST HAPPENING BEHIND CLOSED DOORS. IT IS BEING DISCUSSED IN THE OPEN, BUT THERE ARE TWO SIDES OF THE TRUMP ADMINISTRATION. ONE IN WHICH WE ARE SEEING CONCERNS ABOUT THESE CHIPS SIMPLY BEING IN OTHER COUNTRIES, POTENTIALLY THREATENING AMERICAN DOMINANCE, BUT DAVID SACHS HIMSELF BELIEVES AND HAS SAID PUBLICLY THAT HAVING AMERICAN TECHNOLOGY BEING USED ABROAD HELPS ENSURE DOMINANCE. HELPS ENSURE COMPANIES ARE NOT TURNING TO CHINA FOR THAT SAME TECHNOLOGY. ED: ONE EXAMPLE, G 42 FOCUSED ON AI THAT HAS CLOSE LINKS NOT JUST TO CHINA AND THE UAE, BUT A RELATIONSHIP WITH HUAWEI.
RILEY GRIFFIN, TOP REPORTING. THANK YOU VERY MUCH. COMING UP, COREWEAVE'S PROFIT FORECAST ARE DISAPPOINTING INVESTORS. WE ARE GOING TO SPEAK TO THE CEO NEXT. THIS IS BLOOMBERG. CAROLINE: COREWEAVE SHARES, PUSHING HIGHER TODAY. THEY ARE POSTING EARNINGS AFTER THE BELL YESTERDAY. WERE CONCERNS AROUND PROFITABILITY. THIS IS AS COREWEAVE WORKS TO
BRING FORWARD SPENDING IN AN EFFORT TO MEET CONSUMER DEMAND THAT IS RATIONING HIGHER AND HIGHER. COREWEAVE CEO MICHAEL INTRATOR JOINS US ON THE BACK OF A DEEPENING TIE UP WITH OPENAI. ED LUDLOW HAS BEEN WRITING ABOUT A DEAL WORTH ANOTHER $4 BILLION. YOU CAN ALREADY SEE REVENUE CLIMBING TO SOME UNLEAVENED BILLION DOLLARS WITH THE PREVIOUS DEAL. ARE WE SEEING INSATIABLE DEMAND? AND HOW CAN YOU MEET IT? MICHAEL: THANK YOU FOR HAVING ME ON. THE DEMAND FOR THE PRODUCT THAT WE DELIVER HAS TRULY BEEN INSATIABLE. YOU KNOW, IT HAS RESULTED IN US
HAVING AN OPPORTUNITY TO BEAT OUR GUIDANCE AND RAISE OUR GUIDANCE FOR THE YEAR, AND BEAT OUR EARNINGS FOR THE QUARTER AS WE CONTINUE TO CALL IN INFRASTRUCTURE SO WE CAN DELIVER TO OUR CLIENTS THAT NEED THE TYPE OF SOFTWARE STACK, THAT NEED THE TYPE OF COMPETE WE DELIVER IN ORDER TO DRIVE THEIR PRODUCTS INTO THE MARKET. CAROLINE: I WANT TO PICK UP ON THE BEAT, BECAUSE, WOW, DID YOU BEAT IN TERMS OF REVENUE. WE SEE WHAT 400% GROWTH IS EXTRAORDINARY. TALK TO US ABOUT THE FORECAST
ON PROFITABILITY. THE AREA OF INVESTOR CONCERN IS ULTIMATELY YOUR CAPITAL EXPENDITURE. WERE HAVING TO RAISE CAPITAL EXPENDITURE TO $23 BILLION. JUST VINDICATE THAT TO THE MARKET. MICHAEL:
THE STRUCTURE OF OUR BUSINESS IS BUILT AROUND THE IDEA THAT WE HAVE SUCCESS-BASED FINANCING. WHEN YOU SEE US GO OUT TO THE MARKET AND RAISE OUR CAPITAL BUDGET FOR THE YEAR, YOU ARE SEEING US RAISE MONEY TO FULFILL OUR OBLIGATIONS UNDERSIGNED CONTRACTS FOR OFFTAKE AGREEMENTS. IT IS REALLY WONDERFUL INDICATION OF THE DEMAND FOR OUR PRODUCT, AND OUR UNIQUE ABILITY TO DELIVER SUCH A SOLUTION TO HOW YOU DRIVE COMPUTE INTO THE ARTIFICIAL INTELLIGENCE ECOSYSTEM. IT HAS REALLY BEEN A -- YOU KNOW, IT IS AN INTERESTING ASPECT OF THE BUSINESS WE HAVE PUT TOGETHER, BUT THE INCREASE IN CAPITAL IS REPRESENTATIVE OF THE CLIENT DEMAND. ED: MICHAEL, I THINK THE SOLE OUTSTANDING QUESTION INDUSTRY HAS FOR COREWEAVE IS, WHAT IS THE PROPORTION OF WORKLOAD YOU ARE RUNNING THAT HIS INFERENCE, VERSUS THE PROPORTION OF WORKLOAD YOU ARE RUNNING THAT IS TRAINING? THEY ARE SEARCHING FOR A VERY SPECIFIC NUMBER, AND WE CAN GET INTO WHY. MICHAEL: SO, I'M GOING TO DISAGREE WITH YOU. AM GOING TO SAY THERE ARE A FEW
MORE QUESTIONS WE ARE WORKING THROUGH. ED: I'VE GOT MORE. MICHAEL: I SAID THIS ON YESTERDAY'S EARNINGS CALL, RIGHT? THERE IS NOTE FRIEND THAT MAKES ME MORE EXCITED ABOUT THE PROSPECTS OF OUR BUSINESS THAN THE CONTINUED INCREASING VELOCITY OF INFERENCE. BECAUSE, AT THE END OF THE DAY, WHAT INFERENCE REPRESENTS IS THE MONETIZATION OF ALL OF THE INVESTMENTS GOING ON INTO ARTIFICIAL INTELLIGENCE. IT IS A REPRESENTATION OF THE AI LABS, OF THE ENTERPRISE CLIENTS THAT HAVE INVESTED ENORMOUS SUMS OF MONEY INTO THE COMPUTE, INTO THE SOFTWARE, INTO ALL OF THE ASPECTS OF IT, ACTUALLY TURNING IN ON AND HAVING CLIENTS USE IT TO IMPROVE THE QUALITY OF THEIR PRODUCTS DELIVERED TO THEIR CLIENTS. IT IS BY FAR THE MOST IMPORTANT TREND I WATCH EVERY DAY. ED: THIS IS YOUR FIRST QUARTER AS A
PUBLIC COMPANY. IF YOU SCALE BACK TO THE BASICS, IT IS BUYING GP USE AND RENTING OUT THE GP USE, AND THAT BECOMES A LITTLE BIT LIKE A LOW-MARGIN COMMODITIZED BUSINESS. WHAT IS IT THAT YOU WERE DOING THAT IS THE VALUE AT? WHAT IS IT THAT IS MAKING DATA CENTERS MORE EFFICIENT? MICHAEL: THIS IS ONE OF THE KIND OF RECURRING TRENDS, IS THAT PEOPLE TRYING TO UNDERSTAND THE COMPUTE REQUIREMENTS FOR ARTIFICIAL INTELLIGENCE ARE RELYING ON THE BEST PROXY THEY HAVE.
AND THAT IS, THE LEGACY CLOUD. THEY ARE LOOKING AT IT AND THINKING AT IT AS IF IT IS A COMMODITY SERVICE. THE REASON THAT THESE CLIENTS, THE REASON MOST DEMANDING CONSUMERS OF THESE COME TO COREWEAVE, IS THE WAY WE INTEGRATE THE COMMODITY HARDWARE INTO OUR SPECIFIC SOFTWARE SOLUTION NUMBER WHICH EXTRACTS SUCH INCREDIBLE PERFORMANCE GAINS AND MAKES IT SO INCREDIBLY EFFECTIVE TO BUILD MODELS, TO RUN MODELS, TO BE ABLE TO ULTIMATELY BUILD THEIR BUSINESS.
IT IS NOT A COMMODITY. IT IS REALLY DIFFICULT TO RUN THIS INFRASTRUCTURE. IT IS REALLY DIFFICULT TO BUILD THIS INFRASTRUCTURE. AND COREWEAVE'S ENTIRE BUSINESS, FROM THE DATA CENTER UP THROUGH THE SOFTWARE STACK, HAS BEEN BUILT AROUND THE FACT THAT WE ARE COMMODITIZING IT, THAT WE ARE PROVIDING ENORMOUS VALUE ON TOP OF THE COMPUTE. WEITZEN BIAS IS A GREAT EXAMPLE OF HOW OUR SOFTWARE STACK WILL FUNDAMENTALLY D COMMODITIZED THE PRODUCTS WE ARE DELIVERING AND IMBUE THE PRODUCTS WE HAVE WITH INCREDIBLE VALUE. ED:
COREWEAVE CEO MICHAEL INTRATOR R. IT IS GREAT TO HAVE YOU ON "TUMOR TECHNOLOGY." CONGRATS ON YOUR FIRST QUARTER AS A PUBLIC COMPANY. ETORO WENT PUBLIC YESTERDAY AND AN UPSIZE LISTING. WE ARE GOING TO TALK ABOUT THE
COMPANY'S CEO NEXT. THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: WE WANT TO WELCOME OUR WORLDWIDE TV AND RADIO AUDIENCES.
WE LOOK AT SHARES OF INVESTMENT PLATFORM ETORO, STABILIZING A LITTLE BIT AFTER A PRETTY HYPERBOLIC DEBUT IN PUBLIC MARKETS. YESTERDAY THE COMPETITORS OF ROBINHOOD BEGAN TRADING AT $52 A SHARE. IT RAISED NEARLY 600 MILLION DOLLARS FOR COMPANIES AND INVESTORS. WE ARE JOINED NOW BY CEO YONI ASSIA.
IT IS A BIT OF A FULL CIRCLE STORY, BECAUSE OVER THE LAST DECADE OR MORE ETORO IS A COMPANY WE PROBABLY MOST CONSISTENTLY TALKED ABOUT. FINALLY YOU HAVE GONE PUBLIC. SHARES STARTED TRADING IT WAS WELL ABOVE $52. HOW DOES THAT FEEL FOR YOU? YONI: IT IS AN AMAZING FEELING. THE LAST TWO WEEKS ON THE ROAD SHOW BEING INSIDE CAPITAL MARKETS HERE IN THE U.S., NOW
LISTING ON NASDAQ, A SUPER-EXCITING JOURNEY. 18 YEARS IN THE MAKING OF BUILDING ETORO, AND NOW OUR CUSTOMERS CAN TRADE ETORO ON ETORO. ED: EDUCATE THE AUDIENCE THAT DOESN'T NECESSARILY KNOW ABOUT ETORO. WHAT IS THE PROPORTION OF STOCK ACTIVITY ON THE PLATFORM VERSUS CRYPTO? WHAT IS THE MAINSTAY OF YOUR BUSINESS? YONI: WE ARE DOING BOTH. CUSTOMERS TODAY CAN TRADE
STOCKS FROM OVER 20 DIFFERENT CAPITAL MARKETS, AS WELL AS MORE THAN 130 DIFFERENT CRYPTO ASSETS. WE STARTED THE BUSINESS IN EUROPE AND THE U.K. OUR LARGEST MARKETS EXPANDED TO ASIA, THE UAE, AND THE U.S.
AS WELL. OUR CUSTOMERS, WHEN THEY TRADE THEY SHARE ALL OF THEIR TRADING ACTIVITY AND YOU CAN SEE THE PORTFOLIOS AND TRACK RECORD OF OUR INVESTORS AND YOU CAN COPY THE MOST SUCCESSFUL INVESTORS. IT IS NOT ONLY ABOUT TREADING YOURSELF, IT IS ABOUT BEING ABLE TO SEE OTHERS THAT ARE SUCCESSFUL AND COPY THEM AUTOMATICALLY. AND THE RATIO BETWEEN STOCKS AND CRYPTO CHANGES IN MARKET DYNAMICS. LAST YEAR, 25% OF TOTAL NET
CONTRIBUTION WAS CRYPTO TRADING ACTIVITY. YEARS WHEN CRYPTO WAS LIKE BEFORE, SOMETIMES IT IS UP TO 62%. SO, IT REALLY CHANGES WITH THE MARKETS. CAROLINE: WE KEEP COMPARING YOU TO
ROBINHOOD, AND IN THE MOMENT YOU HAVE A SOCIAL NATURE, OF COURSE, WHICH YOU WERE SPELLING OUT. BUT WITH ROBINHOOD AT A $52 BILLION MARKET CAP AND YOUR FIVE AT A $5 BILLION, HOW DO YOU CLOSE THAT GAP? HOW DO YOU SHOW YOU ARE CLOSE IN TERMS OF COMPETITORS? YONI: I THINK EVENTUALLY A LOT OF GREAT COMPANIES ARE AIMING AT A VERY BIG OPPORTUNITY, WHICH IS THE LARGEST GENERATIONAL TRANSFORMATION OF WEALTH IN HISTORY. $84 TRILLION HERE IN THE U.S. ARE GOING TO MOVE FROM OLDER GENERATIONS TO YOUNGER GENERATIONS. IN EUROPE, NOT THAT FAR BEHIND. $60 TRILLION. I BELIEVE OUR GENERATION
EXPECTS TO TRADE, INVEST, AND SAVE IN A DIGITAL NATIVE SOLUTION. WE ARE PROVIDING MORE THAN THE ABILITY TO DIRECTLY TRADE IN THE MARKETS. THROUGH THE TECHNOLOGY WE ALLOW PEOPLE TO COPY TOP INVESTORS FROM AROUND THE WORLD, AS WELL AS MORE THAN 100 DIFFERENT SMART PORTFOLIOS WHERE WE ACTUALLY HAVE OUR OWN CHIEF INVESTMENT OFFICE WITH 60 MARKET ANALYSTS ACROSS THE GLOBE WHO HELP OUR CUSTOMERS, BASICALLY, FIND PORTFOLIOS LIKE FANATICS. ALSO MARKET-NEUTRAL STRATEGIES, LEARNING FROM THE HEDGE FUNDS I MET HERE IN NEW YORK.
SO, WE ARE ABLE TO CREATE MORE THAN JUST A SELF-DIRECTED TRADING, BUT ALSO THE ENTIRE WORLD OF INVESTMENTS WITH SMART PORTFOLIOS AND COPY TRADER. CAROLINE: AS THE MODEL MATURES, YOU HAVE SAID YOU HAVE GOT YOURSELF TO A MORE MATURE STATE THAT IN 2021 WHEN YOU ARE LOOKING AT GOING PUBLIC VIA SPAC. TELL US HOW DIFFERENT IT LOOKS NOW AND WHAT HAPPENED THEN TO MAKE YOU PUSH TO GO FOR AN IPO THIS TIME? YONI: WE CALLED 2022 THE YEAR OF EDUCATION. A LOT OF OUR CUSTOMERS LEARNED
THAT MARKETS DO NOT ALWAYS GO UP. AND WE WERE FOCUSED INITIALLY IN 2021, REALLY, ON GROWTH AT ALL COSTS. LET'S JUST SPEND MONEY TO GROW, AND I THINK WHAT 2022 TAUGHT US IS, TO CHANGE OUR STRATEGY TO PROFIT ROVE. AND WE HAVE SIGNIFICANTLY
SCALED UP PROFITABILITY, WITH MORE THAN $300 MILLION OF ADJUSTED PROFIT. THAT IS THE SIGNIFICANT TRANSITION WE HAVE DONE. IN THE PRIVATE MARKET. RINGING US TO PROFITABLE GROWTH, WHICH IS A STRATEGY BELIEVE IS MORE FIT TO PUBLIC MARKETS. CAROLINE: THERE WAS A LOT OF DEMAND, AND NOW WE SEE A LOT MORE IPOS WANT TO FOLLOW YOUR TRACKS. YONI ASSIA, THAT IS GREAT TO HAVE YOU ON THE SHOW. COMING UP, WE ARE GOING TO BE
SPEAKING WITH HENNA VIRKKUNEN, FROM THE EUROPEAN COMMISSION. WE ARE DISCUSSING EU TECH POLICY, INCLUDING THE APPROACHED ARTIFICIAL INTELLIGENCE. THAT IS NEXT. THIS IS "BLOOMBERG TECHNOLOGY." ♪ >> I HAD A LITTLE PROBLEM WITH TIM COOK YESTERDAY.
I SAID, YOU ARE COMING HERE WITH $500 BILLION, BUT HERE YOU ARE BUILDING ALL OVER INDIA. I DON'T WANT YOU BUILDING IN INDIA. YOU CAN BUILD IN INDIA IF YOU WANT TO TAKE CARE OF INDIA. WE WANT YOU TO BUILD HERE. THEY ARE GOING TO BE UPPING THEIR MANUFACTURING IN THE UNITED STATES. CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." ED: I'M ED LUDLOW IN SAN FRANCISCO. CAROLINE:
WE THINK ABOUT THE RAMIFICATIONS OF PRESIDENT TRUMP. SATISFIED THE INDIAN DEMAND IN INDIA. WANT TO SATISFY U.S. DEMAND CLOSER TO HOME. IT IS EXTRAORDINARY THAT SHARES MANAGED TO BOUNCE OFF OF THEIR LOWS. WE ARE BLACK -- WE ARE BACK FLAT ON THE DAY. MAYBE SOME RESILIENCY WHEN IT
COMES TO THE INFLATIONARY DATA WE ARE SEEING. RETAIL, LACKLUSTER, BUT NOT A DISASTER. WE HAVE TO DIG INTO WHAT IS HAPPENING IN TERMS OF APPLE AND ITS CALL UPON ITS OWN SUPPLY CHAIN RIGHT NOW. ED:
LET'S GET OUT TO WHERE THE ACTION IS HAPPENING. ANNMARIE HORDERN JOINS US FOR THE LATEST FROM DONALD TRUMP'S VISIT TO THE MIDDLE EAST. HE HAS USED THE PUBLIC FORUM IN THE LAST 48 HOURS TO NAME CHECK TECHNOLOGY CEOS. SOME POSITIVELY, FOR EXAMPLE JEN-HSUN HUANG, AND SOME MORE SEVERE WORDS FOR TIM COOK. WHAT HAVE WE LEARNED? ANNMARIE:
THIS IS THE SECOND TIME ON THE PRESIDENT'S MIDDLE EAST TOUR THAT HE CALLED OUT TIM COOK. THE FIRST TIME WAS ON TUESDAY IN RIYADH. HE LOOKED OUT OF THE ROOM AND SAID, MY FRIEND JENSEN, YOU ARE HERE, BUT NOTICEABLY MISSING IS TIM COOK. FOR HE TOUCHED DOWN IN ABU DHABI HE WAS TALKING ABOUT TIM COOK ONCE AGAIN IN DELHI. HE WAS TALKING ABOUT THE FACT THAT INDIA MIGHT BE PREPARED TO LOWER THEIR TARIFF RATES TO ZERO. HE SAID, I'M HAVING A PROBLEM WITH TIM COOK.
I SPOKE TO HIM ABOUT THIS YESTERDAY. WHY ARE YOU MOVING YOUR MANUFACTURING TO INDIA? WE LET IT GO THAT YOU BUILT ALL OF THESE PLANTS IN CHINA. WE WANT YOU TO COME TO THE UNITED STATES. THE PRESIDENT HAS BEEN FLANKED BY CORPORATE AMERICA. ESPECIALLY TECH EXECUTIVES. NOTABLY MISSING WAS THE APPLE
CEO. IN THE PRESIDENT FOUND TIME TO CALL HIM BACK. WHICH HE FINDS FRUSTRATING AND DISTURBING TO HIM. THE PRESIDENT SAID HE IS GOING TO BE MOVING THAT MANUFACTURING TO THE UNITED STATES. THAT HAS NOT BEEN WHAT APPLE HAS BEEN TALKING ABOUT.
THEY ARE TALKING ABOUT DE-RISKING FROM CHINA, WILLING TO GO INTO INDIA. POTENTIALLY MORE CONVERSATIONS ABOUT INVESTMENTS IN THE UNITED STATES, THOUGH. CAROLINE: AND OF COURSE, INVESTMENTS STILL COMING WITH THE MIDDLE EAST. A LOT OF THAT IS FOCUSED AROUND ACCESS TO AI, SOPHISTICATED SHIPS GOING TO WHERE YOU CURRENTLY ARE. EITHER IT IS ABU DHABI, ALSO IN SAUDI ARABIA.
THIS IS RINGING ALARM BELLS WITHIN THE PRESIDENT'S OWN ADMINISTRATION. ANNMARIE: THAT'S RIGHT. THAT BECOMES A NATIONAL SECURITY CONCERN AROUND ALL OF THIS. GETTING WHAT MANY WOULD CONSIDER THESE GULF COUNTRIES AS GEOPOLITICAL SWING STATES. THIS ADMINISTRATION, ESPECIALLY CHINA HAWKS IN THIS ADMINISTRATION, AND EVEN DEMOCRATS IN WASHINGTON, WANT TO MAKE SURE THE TECHNOLOGY DOES NOT LEAK CHINA. WE SAW A HUGE WIN FOR THE LIKES OF NVIDIA AND AMD IN SAUDI ARABIA. WE ARE ON THE HEELS, WAITING FOR A POTENTIAL ANNOUNCEMENT IN ABU DHABI OF SOME SORT OF TECH COOPERATION WHEN IT COMES TO AI. IN MARCH I REPORTED ABOUT
COMING TO THE UNITED STATES AND THE UAE ANNOUNCED THEY WERE WILLING TO INVEST $1.4 TRILLION WHEN IT COMES TO AI AND BUILDING DATA CENTERS. BUT IN ORDER FOR THEM TO DO THAT THEY NEED TO GET THEIR HANDS ON THE CHIPS. WE HAVE REPORTING AND POTENTIALLY WE WILL SEE THESE COME ACROSS THE FINISH LINE, WHETHER THE PRESIDENT IS IN THE EMIRATES, THAT THEY WOULD LIKELY ALLOW ONE MILLION HIGH-ADVANCED CHIPS FROM NVIDIA COMING INTO THE COUNTRY. KEY, THOUGH, TO YOUR POINT, FOR THIS TO HAPPEN THEY NEED TO MAKE SURE THAT THAT TECHNOLOGY DOES NOT LEAK INTO THE HANDS OF BEIJING. ED: ANNMARIE HORDERN, THANK YOU
VERY MUCH. THE EU ACCUSED TIKTOK OF BREAKING RULES BY NOT BEING TRANSPARENT ENOUGH ABOUT ADVERTISEMENTS. CHINESE SOCIAL MEDIA PLATFORMS SAYS IT IS REVIEWING THE DECISION, THE LATEST REGULATORY MOVE AGAINST SO-CALLED BIG ATTACK. I WANT TO GET SOMEONE HOW THE EUROPEAN UNION IS APPROACHING TECH REGULATION AND DEVELOPMENT, LIKE AI, AND BRING IN HENNA VIRKKUNEN, THE EUROPEAN COMMISSION VICE PRESIDENT FOR TECHNOLOGY, SECURITY, AND DEMOCRACY. WELCOME TO SAN FRANCISCO AND TO THE PROGRAM. YOU HEARD ANNMARIE DISCUSS A NUMBER OF ISSUES ON THE GLOBAL STAGE.
ON YOUR AGENDA I BELIEVE YOU HAVE MET ALREADY WITH TIM COOK AND SUNDAR PICHAI. YOU WILL MEET WITH LEADERS LIKE ANTHROPIC'S. WHAT WERE THOSE CONVERSATIONS ABOUT AND WHAT WAS THE FOCUS OF YOUR VISIT? HENNA: OF COURSE I WANT TO MEET AMERICAN TECH COMPANIES, BECAUSE FOR THEM THE EUROPEAN UNION IS THE BIGGEST EXTERNAL MARKETS AND MANY OF THEM ARE HAVING MORE USERS IN THE EUROPEAN UNION. IT IS VERY IMPORTANT WE HAVE
GOOD DIALOGUE WITH TECH COMPANIES. WE WANT TO BOOST INVESTMENTS AND INNOVATIONS WHEN IT COMES TO TECHNOLOGIES AND WE WANT TO MAKE SURE THAT, FOR EXAMPLE, IN AI WE ARE BUILDING AI. ESPECIALLY WE ARE SPEAKING ABOUT OUR INNOVATION AGENDA, WHERE WE ARE WILLING TO BOOST INVESTMENTS , INNOVATIONS, CREATE ONE SINGLE MARKET, SIMPLIFY THE PROCESSES. WE WANT TO MAKE IT FASTER AND
EASIER FOR BUSINESSES. ED: THE TOP STORY IN THE WORLD TODAY IS THE PRESIDENT OF THE UNITED STATES HAS MADE AN APPEAL TO TIM COOK TO MOVE PRODUCTION OF THE IPHONE. ANY MILLIONS FROM INDIA TO THE UNITED STATES. DOES THE EUROPEAN UNION HAVE AN OFFER TO AMERICAN TECHNOLOGY COMPANIES TO THINK ABOUT MOVING SOME OF THEIR INDUSTRIAL BASE TO THE BLOCK? HENNA: WE HAVE OUR OWN STRENGTHS WHEN IT COMES TO THE EUROPEAN UNION. WE ARE VERY STABLE PLACE FOR INVESTMENTS, OF COURSE, AND I THINK WE HAVE ALSO VERY PREDICTABLE REGULATORY FRAMEWORK ALSO, AND OF COURSE VERY TALENTED WORKFORCE. I THINK THESE ARE OUR GREAT
STRENGTHS IN THE EUROPEAN UNION AND WE WANT TO ENCOURAGE ALSO MORE INVESTMENTS AND INNOVATIONS IN THE EUROPEAN UNION WHEN IT COMES TO TECHNOLOGIES. CAROLINE: EXECUTIVE VICE PRESIDENT, IT IS INTERESTING YOU SAY A PREDICTABLE REGULATORY ENVIRONMENT. MANY EXECUTIVES FROM BIG TECH COMPANIES FIND IT A FRUSTRATING REGULATORY ENVIRONMENT. THEY THINK IT IS TOO TOUGH. WHAT WOULD YOUR RESPONSE BE WHEN YOU ARE GOING TO MEET MARK ZUCKERBERG, WHO HAS LOBBIED THE PRESIDENT BECAUSE OF SOME OF WHAT HE SEES, OR CONEY AND REGULATION COMING FROM THE EU? HENNA: WHAT WE ARE GOING TO MAKE SURE IN THE EUROPEAN UNION IS WE WANT TO HAVE A FAIR AND SAFE AND DEMOCRATIC ENVIRONMENT, AND ALSO WHEN IT COMES TO CLEAR RULES. WE DON'T THINK IT IS GOOD TO HAVE MONOPOLIES, BECAUSE THOSE GATEKEEPERS ARE OFTEN BLOCKING NEW INNOVATIONS TO ENTER TO THE MARKETS.
WE WANT TO MAKE SURE WE HAVE FAIR COMPETITION, WE HAVE LEVEL PLAYING FIELD FOR EVERYBODY, AND ALSO IT COMES TO ONLINE PLATFORMS THEY ALSO HAVE TO TAKE THE RESPONSIBILITY TO MAKE SURE THEY HAVE NOT, FOR EXAMPLE, ARE SPREADING ILLEGAL CONTENT OR SELLING ILLEGAL PRODUCTS. AND THEY HAVE TO TAKE CARE OF SAFETY WHEN IT COMES TO PROTECTION OF MINORS, FOR EXAMPLE. SO, WE HAVE SOME VERY IMPORTANT PRIORITIES. WE ARE ALSO DISCUSSING WITH OUR PLATFORMS. THE PRIORITIES ARE CONNECTED TO OUR DEMOCRATIC PROCESSES AND PROTECTION OF MINORS, FOR EXAMPLE. AND TRANSPARENCY IS SOMETHING
WE ARE ALSO OBLIGING FROM VERY LARGE ONLINE PLATFORMS, BECAUSE THEY HAVE A GREAT ECONOMIC POWER NOWADAYS IN THE WORLD AND ALSO CREATE A POWER IN OUR SOCIETY. THAT IS WHY IT IS IMPORTANT THEY ARE ALSO RESPECTING OUR RULES AND VALUES. CAROLINE: AND YOUR FINES. HE DID JUST LEVY $500 MILLION FINE TO APPLE RECENTLY. $200 MILLION TO META, BECAUSE YOU FELT THEY DID NOT ALIGN THEMSELVES WITH THE DIGITAL MARKETS ACT.
BUT SOME WOULD SAY THOSE ARE SMALLER THAN EXPECTED BECAUSE WE ARE WORRIED ABOUT THE REPERCUSSIONS WITHIN THE TARIFF NEGOTIATION. HOW DO YOU RESPOND TO THAT? THAT PERHAPS YOU ARE GOING SOFTER BECAUSE TRUMP IS GOING HARDER? HENNA: IT IS NOT SOMETHING WE ARE SEEKING, THAT WE ARE POSTING FINES FOR THE COMPANIES. THE MAIN IDEA IS ALL THE TIME TO MAKE SURE THAT EVERYBODY IS COMPLYING WITH OUR RULES AND THE MAIN TOOL, HOW WE ARE WORKING WITH COMPANIES IS TO HAVE ALL THE TIME DIALOGUE WITH THEM AND LOOKED AT WHAT WE ARE EXPECTING FROM THEM AND HOW THEY COULD COMPLY WITH OUR RULES. AND, OF COURSE, ALL OF THEM ALWAYS DEFENDING THEIR BUSINESS INTEREST, BUT I THINK WE HAVE ALSO GOOD DIALOGUE WITH THEM AND CONSTRUCTIVE DISCUSSIONS. ED: LAST MONTH BLOOMBERG REPORTED THAT PRESIDENT TRUMP WAS PRESSURING EUROPE TO GET RID OF THE AI CODE OF PRACTICE, WHICH IS THE FRAMEWORK ATTACHED TO THE EU'S ARTIFICIAL INTELLIGENCE ACT. CONVERSATIONS HAVE YOU HAD WITH THIS ADMINISTRATION ABOUT THAT ISSUE? THE ADMINISTRATION FEELS IT IS TOO BURDENSOME ON U.S. TECHNOLOGY COMPANIES OPERATING
IN THE BLOCK. HENNA: WE SEE ALSO THAT IT IS IMPORTANT NOW WHEN WE ARE IMPLEMENTING OUR AI ACT THAT WE ARE DOING IT IN VERY INNOVATION-FRIENDLY MANNER. IT IS SOMETHING THAT IS SUPPOSED TO HELP ALSO BUSINESSES AND INDUSTRIES TO COMPLY WITH OUR RULES. WE ARE STILL FINALIZING CODE OF PRACTICE, BUT THERE HAS BEEN MONTHS OF DISCUSSION WITH THE DIFFERENT STAKEHOLDERS AND PUBLIC HEARINGS ABOUT IT, AND WE ARE STILL WORKING ON IT. BUT HOW WE WANT TO IMPLEMENT OUR AI IS THAT WE WANT TO SUPPORT OUR INDUSTRIES THAT REALLY DID A LOT OF AI IN THE EUROPEAN UNION. BUT AT THE SAME TIME WE SEE IT IS IMPORTANT TO BE AWARE OF THE RISKS. ED:
YOU BROUGHT NEWS WITH YOU, AND THAT IS THE TIKTOK NEWS. EU SAYS THAT THE TIKTOK AD SYSTEM BREAKS RULES. WHAT IS YOUR ARGUMENT? HENNA: THEY HAVE NOT BEEN TRANSPARENT. IT IS SOMETHING THAT IS CORE IN OUR DIGITAL SERVICES ACT, THAT ONLINE PLATFORMS HAVE TO BE TRANSPARENT WITH THEIR ACCESS.
THAT IS WHY WE SAW THAT TIKTOK IS NOT COMPLYING WITH OUR RULES, SO WE PUBLISHED OUR FINDINGS TODAY, AND NOW THEY HAVE TIME ALSO TO REVIEW AND RESPOND AND COMPLY. WE HAVE SEVERAL INVESTIGATIONS GOING ON IN THE PIPELINE NOW. CAROLINE: HENNA VIRKKUNEN, IT HAS BEEN WONDERFUL HAVING TIME WITH YOU. EUROPEAN COMMISSIONER FOR TECH SOVEREIGNTY, SECURITY, AND DEMOCRACY. MEANWHILE, WE BRING YOU SOME BREAKING NEWS. , BRAVO HAS SOLD ITS REMAINING
STAKE IN NASDAQ. FOR $3.4 BILLION. THIS IS THE COMPANY THAT OPERATES THE EXCHANGES, AND OVERALL THE PRIVATE EQUITY FIRM IS CONDUCTED IN AN UNREGISTERED BLOCK OF TRADES ON MAY 13. SHARES, FLAT ON THE DAY FOR THAT COMPANY. ED: COMING UP, CATO IS SET TO BECOME THIS YEAR'S BIGGEST LISTING GLOBALLY, ON TRACK TO RAISE $4 BILLION. WE HAVE MORE ON THAT STORY NEXT.
THIS IS "BLOOMBERG TECHNOLOGY." PODCAST. THIS IS BLOOMBERG. ED: ALIBABA EARNINGS FAILED TO IMPRESS INVESTORS AS IT FACED SLOWING GROWTH IN ITS E-COMMERCE ARM AND MISSED PROJECTIONS FOR ITS CLOUD BUSINESS. THAT'S GET OUT TO HENRY RAN. WHAT DID WE LEARN ABOUT THE UNDERLYING REASONS? HENRY: SOME WORRYING SIGNS FOR ALIBABA THIS QUARTER, AND LET'S START FROM THE E-COMMERCE BUSINESS. CUSTOMER MANAGEMENT REVENUE WAS
STRONG. UP BY ABOUT 12%. HOWEVER, THERE HAS BEEN SOME MORE SIGNS OF COMPETITION GOING ON. THE COMPANY SAID IT IS GOING TO INVEST MORE HEAVILY IN QUICK COMMERCE, WHICH IS AN AREA UNDER INVESTMENT, UNDER ASSAULT BY ITS PEERS.
THE COMPANY SAID THAT ITS ADVERTISING TOOL, AS WELL AS RATES FROM MERCHANTS, ARE TAKING EFFECT. HOWEVER, IT IS UNCLEAR HOW MUCH OF THE GM V HAS BEEN GROWING FOR ALIBABA. THAT HAS ALWAYS BEEN A CONCERN, BECAUSE IT HAS BEEN CEDING MARKET SHARE TO JD.COM. ON THE OTHER HAND FOR CLOUD, IT IS GROWING ABOUT 18% IN TERMS OF REVENUE. HOWEVER, ON THE EARNINGS FRONT, EARNINGS WAS AMISS.
ON THE SALES GROWTH, IT IS ALSO MISSING MORE BULLISH INVESTOR ESTIMATES ABOUT 20%. SO, THAT HAS BEEN A DISAPPOINTMENT AS WELL INTO THIS EARNINGS. CAROLINE: JUST GO TO THE AI SIDE OF THE EQUATION AS WELL. THEY HAVE BEEN TRYING TO ORIENTATE THE LOGISTICS SIDE, BUT GENERATIVE AI AND THE INVESTMENT THEY ARE NOT QUITE LIVING UP TO THE HYPE. HENRY: INDEED. REMEMBER LAST QUARTER THAT ALIBABA NEEDS TO BE AN AI-FIRST COMPANY, IS GOING TO BE PIVOTING ITS STRATEGY TO AGI.
HOWEVER, WE DIDN'T HEAR SO MUCH ABOUT AGI FROM THE MANAGEMENT IN THIS QUARTER. THE COMPANY, TO ITS CREDIT, IS STILL SEEING DEMAND FOR AI INFERENCING. HOWEVER, IT TAKES TIME TO INVEST BECAUSE IT IS STILL KIND OF TOLD US IT IS DOING INVESTMENT PHASE OF THIS BUSINESS AND IN THE MEANTIME IT'S MODELS IS GENERATING SOME REVENUE. HOWEVER, IT JUST TAKES TIME TO GAIN TRACTION. CAROLINE: HENRY WREN, WE APPRECIATE IT.
LET'S STICK WITH CHINA. CATL IS SET TO RAISE AT LEAST $4 BILLION IN ITS HONG KONG LISTING. PRICING AT THE TOP OF THE END OF ITS RANGE. LET'S GO OUT TO CRAIG TRUDELL, WHO CAN TELL US EXACTLY HOW THE EV BATTERY MAKER, WAS IN THE EYE OF THE GEOPOLITICAL STORM BETWEEN THE U.S. AND CHINA, IS ABLE TO DRUM UP SO MUCH SUPPORT FOR THE SECONDARY LISTING? CRAIG: THIS LISTING WAS CAUGHT UP IN THAT GEOPOLITICAL TENSION, WHERE YOU HAD U.S. BANKS THAT WERE MAYBE GOING TO HAVE A ROLE HAVE TO BOW OUT. YOU KNOW, CATL, GOING BACK A
FEW YEARS, HAS VERY MUCH BEEN A POLITICAL FOOTBALL. I AM REMINDED OF THE GOVERNOR OF VIRGINIA, WHEN YOUNGKIN, WAS IN THE RUNNING FOR A PLANT, OR FORD WAS GOING TO LICENSE CATL TECHNOLOGY, AND HE PULLED HIS ESTATE OUT OF THE RUNNING AND SAID, THIS IS A TROJAN HORSE. THESE ARE JUST BATTERIES, TO BE CLEAR, AND YET BECAUSE OF THE DOMINANCE OF CHINA IN THIS SPACE WAS A LOT OF CONCERN ABOUT HOW THE WEST CAN POSSIBLY CATCH UP OR COMPETE WITH THE SCALE THAT THIS COMPANY HAS NOW REACHED. ED: I REMEMBER THAT STORY AND
INTERVIEW WITH GLENN YOUNGKIN VERY WELL. THE FRANK REALITY IS, CATL IS THE WORLD'S BIGGEST. IT IS CORE TO THE EV BATTERY SALES SUPPLY CHAIN.
WHERE DO THOSE BATTERIES GET MADE AND WHERE THE -- WHERE DID THEY GO? OF COURSE, I'M HINTING AT TESLA'S RELATIONSHIP WITH CATL. CRAIG: THEY'RE PREDOMINANTLY MAKE THEIR BATTERIES IN CHINA FOR CHINA. IF YOU WANT TO BUY A TESLA AND YOU HAPPEN TO BE IN CHINA YOU MAY INDEED HAVE A CAR WITH CATL BATTERIES. VIRTUALLY ALL MANUFACTURERS,
YOU KNOW, MOST OF THE MAJOR MANUFACTURERS ARE AT LEAST USING CATL BATTERIES IN MANY OF THEIR MODELS, RIGHT? AND SO, THIS IS A COMPANY THAT IS GOING OVERSEAS A LITTLE BIT. IT IS, YOU KNOW, OPENING IN GERMANY. IT IS NOT ENTIRELY RELIANT ON CHINA, BUT IT IS VERY MUCH A DOMINANT ASPECT OF THEIR BUSINESS.
I THINK THAT IS PART OF WHY YOU HAVE SO MUCH CONCERN ON THE PART OF GOVERNMENTS. IT IS NOT SO MUCH MY YOU KNOW, COMPLETELY BEING UNWILLING FOR THIS COMPANY TO SUPPLY. IT WANTS -- I THINK ESPECIALLY OVER HERE IN EUROPE THERE IS A DESIRE FOR, OK, WE ARE OPEN TO YOU SUPPLYING OUR MANUFACTURERS, BUT YOU NEED TO BUILD HERE. CAROLINE: THAT IS A THEME FOR THE DAY, IT SEEMS. WE APPRECIATE YOU. WHAT IS NEXT? ED: FIRST UP, PONY AI HAS CONFIDENTIALLY FILED FOR A HONG KONG LISTING, WITH AN OFFERING SET TO TAKE PLACE THIS YEAR. THE MOVE COMES AS THE AUTONOMOUS DRIVING COMPANY ANNOUNCED A PARTNERSHIP WITH UBER LAST WEEK.
PONY AI DECLINED TO TALK ABOUT THE POTENTIAL LISTING AND THE SIZE REMAINS UNKNOWN. SALES OF THE XIAOMI SEDAN PLUNGED TO AROUND 36,000 UNITS IN APRIL, CONTINUING A LOWER TREND FROM MARCH AFTER THE COMPANY FACED A FATAL HIGHWAY ACCIDENT INVOLVING ONE OF ITS VEHICLES. THE COMPANY ALSO FACING BACKLASH FROM CONSUMERS OVER ALLEGED FALSE ADVERTISING OF THE VEHICLE'S HOOD DESIGN.
BAIDU IS PLANNING TO TEST AND LAUNCH ITS AUTONOMOUS RIDE-HAILING SERVICE CALLED APOLLO GO IN COUNTRIES LIKE TURKEY AND ACROSS EUROPE. THE COMPANY IS IN TALKS WITH SWIFT -- WITH SWISS POST TO ROLLOUT A ROBOTAXI SERVICE BY THE END OF THE YEAR. CAROLINE: APOLOGIES, SOME OF THE AUDIO ISSUES THERE. COMING UP, BLOOMBERG TECHNOLOGY'S ONES TO WATCH LIST. SOME OF THE NAMES SHAPING AI. THAT IS NEXT. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: BLOOMBERG TECHNOLOGY'S ONES TO WATCH LIST IS OUT TODAY. THIS YEAR HIGHLIGHTS 10 PEOPLE SHAPING THE ARTIFICIAL INTELLIGENCE SECTOR. JOSHUA JOINS US TO TALK THROUGH WHAT IS A MYRIAD OF INVESTORS, REGULATORS, THOUGHT LEADERS, AND I'M INTERESTED IN, LET'S START WITH THREE WE ARE GOING TO SING ALOUD. LUKE FERRIER IS A SOFTWARE ENGINEER. WE KNOW HIM FOR HIS DOGE WORK, BUT WE SHOULD KNOW HIM FOR WHAT HE WAS DOING WITH AN ANCIENT SCROLL EARLIER.
>> WE WROTE ABOUT HIM LAST YEAR WHEN HE WON A CONTEST TO USE ARTIFICIAL INTELLIGENCE TO READ THE WORDS ON A SERIES OF ANCIENT SCROLLS THAT HAD BEEN EARNED DURING THE EXPLOSION OF POMPEII. THIS BROUGHT HIM TO PROMINENCE, AND HE IS ALSO A FORMER SPACEX INTERN. HE GOT A NEW POSITION WORKING WITH DOGE. WE DON'T KNOW A LOT ABOUT WHAT
HE'S DOING NOW BUT WE DO KNOW THAT A LOT OF PEOPLE ARE TRYING TO WATCH IT, AT LEAST. ED: SERCO ARE HAS BEEN COMING ON THIS PROGRAM WITH RESPECT FOR ALMOST TWO YEARS. I THINK I IDENTIFIED HER AS ONE TO WATCH WELL BEFORE THIS LIST, BUT SHE IS CONNECTED. SHE IS INFLUENTIAL IN SILICON VALLEY AS AN INVESTOR, BUT POTENTIALLY IN THE REALM OF AI.
>> SHE WAS ONE OF THE MOST-NOMINATED PEOPLE WHEN WE WENT LOOKING FOR CALLS HERE. HAD A HISTORY INVESTING IN OTHER SECTORS, NOTABLY CRYPTO. RECENTLY HAS BEEN LOOKING INTO THE AI SECTOR. SHE HAS MADE INVESTMENTS INTO COMPANIES THAT IF YOU FOLLOW AI CLOSELY YOU MAY HAVE HEARD OF. MISTRAL, THE EUROPEAN AI COMPANY, AND HARVEY, A COMPANY THAT IS DOING AI FOR LEGAL WORK. CAROLINE: I THINK IT IS NOTABLE YOU HAVE 50/50, WOMEN AND MEN ACROSS THIS LIST. ONE OF THE MOST LEADING VOICES WHEN IT COMES TO
THE NEW ERA OF SOCIAL IS JAY OVER AT BLUE SKY, AND HAS PERHAPS TAKEN ON MARK ZUCKERBERG AS -- AT HIS OWN GAME. JOSHUA: IT IS A SOCIAL NETWORK THAT STARTED WITHIN TWITTER AND SPUN OUT. THE IDEA IS TO HAVE A SOCIAL NETWORK THAT YOU HAVE MORE CONTROL OVER WHAT YOU ARE SEEING, WHAT IS IN YOUR FEEDS. IT IS DECENTRALIZED SO YOU CANNOT HAVE THE CONTROL SOMEONE LIKE MARK ZUCKERBERG HAS. GRABER WAS NOTABLY WEARING A SHIRT THAT HAD SOME ROTTEN WRITING IN IT, SORT OF MARKING MARK ZUCKERBERG FOR WEARING A SHIRT THAT COMPARES HIMSELF TO JULIUS CAESAR. ED: JOSHUA BRUCE STEEN, THANK YOU VERY MUCH.
THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." CAROLINE: DO NOT FORGET TO CHECK OUT OUR
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