TSMC, ASML China Invasion Plan, Microsoft's New AI Tool | Bloomberg Technology
>> THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. ♪ CAROLINE: I AM CAROLINE HYDE IN NEW YORK. ED LUDLOW IS OFF. COMING UP, BASELESS OF REPORTINGTSMC AND ASML DOWN THE KEY EQUIPMENT IN THE EVENT OF INNOVATION. WE HEAR FROM THE MICROSOFT CEO
AS THEIR CONFERENCE BUILDS OFF. ACTRESS SCARLETT JOHANSSON BACK AGAINST OPENAI IN THE EERILY SIMILAR VOICE. ALL OF THAT AND SO MUCH MORE AHEAD. WE WANT TO KEEP THE RECORD HIGHS GOING.
THE NASDAQ TURNS FLATS. PUSHING FORWARD TO WHAT'S HAPPENING IN CRYPTO. WE WILL GET BACK TO THE MAJOR BENCHMARKS IN A MOMENT BUT CRYPTO HAS BEEN A KEY STORY. ALL I SHIFTING FROM WHAT WE SAW WAS A SPOT BITCOIN ETF TO POTENTIALLY A SPOT ETH ETF. THE NASDAQ TRADING INTO POSITIVE TERRITORY. WE ARE AT A NEW RECORD HIGH FOR THE S&P. NOT SO FOR THE STOXX 600 BUT
ALL EYES FOCUSED ON FED TALK. RAPHAEL BOSTIC STILL TRYING TO ANALYZE THE DATA. WE ARE SEEING WHAT'S HAPPENING WITH THE 10 YEAR YIELD. MAY BE A BIT OF BUYING INTO THE BOND MARKET RIGHT NOW AS WE PUSH FORWARD TO WHAT'S HAPPENING IN EARNINGS. LET'S HAVE A LOOK AT SOME OF
THE INDIVIDUAL MOVERS. PALO ALTO NETWORKS COMING OFF ITS LOWS. CYBERSECURITY COMPANY POSTING REVENUE THAT IS 11% -- 15% GROWTH ON A YEAR ON YEAR BASIS, THAT IS NOT THE 20% TO 30% REVENUE GROWTH WE ARE USED TO. WE SPEAK TO THE CEO LATER IN THE SHOW. NVIDIA TRADING FLAT AHEAD OF ITS ALL-IMPORTANT EARNINGS TOMORROW. WHAT IS KEY IS THE RELATIONSHIP WITH WHAT THEY'VE BEEN TALKING ABOUT IN AI AND TAIWAN, HOW DEPENDENT THEY ARE ON TSMC TO DELIVER THE SUPER CHIPS.
AND INTERESTING REPORTING ON ASML AND TSMC. ASML IS OFF BY 1.5% AS WE SEE THE EXTRUSIVE REPORTING SHOWING THAT AN EVENT THAT CHINA INVADES TAIWAN, BOTH TSMC AND THE CHIP EQUIPMENT MAKING COMPANY ASML COULD HAVE A KILL SWITCH. THEY CAN REMOTELY DISABLE THEIR
CHIPMAKING MACHINES. WE HEAR ABOUT THE IMPORTANCE OF TAIWAN FROM NVIDIA'S CEO. >> TAIWAN IS AT THE EPICENTER OF THE WORLD'S TECHNOLOGY SUPPLY CHAIN. WITHOUT TAIWAN, IT WOULD BE VERY DIFFICULT FOR MICHAEL AND I TO DO OUR JOBS. IT WOULD BE DIFFICULT FOR US TO SERVE. THE TECHNOLOGY INDUSTRY DEPENDS VERY HEAVILY ON TAIWAN.
CAROLINE: THE AI JUGGERNAUT HAS SPOKEN AND HE SAYING TAIWAN IS REALLY IMPORTANT AS IF WE FORGOT. WE JOIN MIKE SHEPPARD. THIS IS EXTRAORDINARY PIECE OF REPORTING. COMPANIES HAVING TO EASE U.S. GOVERNMENT CONCERNS HERE. MIKE: THAT IS RIGHT.
THIS IS ACTUALLY ANSWERING THIS REPORTING ONE OF THE FUNDAMENTAL QUESTION SURROUNDING TAIWAN, ONE OF -- ONE OF THE BIG WHAT IF SPEED THREE YEARS, THE U.S. GOVERNMENT HAS WARNED THAT CHINA HAS ITS EYES ON TAIWAN AND MIGHT TRY TO REUNITE WITH THE ISLAND USING MILITARY FORCE. BEIJING HAS SAID THEY HAVE NO INTEREST IN DOING SO.
THEY WOULD PREFER A PEACEFUL REUNIFICATION BUT THEY HAVE NOT RULED OUT MILITARY INTERVENTION AT THE SAME TIME. ONE OF THE KEY QUESTIONS IS WHAT HAPPENS IF THIS TAKES PLACE? ONE OF THE BIG QUESTIONS IS WHAT HAPPENS TO THE SEMICONDUCTOR INDUSTRY. TAIWAN IS RESPONSIBLE FOR 90% OF THE WORLD TO SUPPLY OF THE MOST ADVANCED CHIPS, THE SITE -- THE KIND THAT SUPPLY NVIDIA.
IT IS SO ESSENTIAL FOR THE U.S. WE SAW DURING THE PANDEMIC AND MOST RECENTLY WITH THE EARTHQUAKE IN TAIWAN, THE CONCERNS OF ANY SORT OF SUPPLY CHAIN DISRUPTION. CAROLINE: WHAT IS PHENOMENAL IS THAT ASML IS THE LINCHPIN. IS THAT HAS SHIPPED MORE THAN 200 OF THESE MACHINES OUTSIDE OF CHINA BUT STILL SHIPPED TO CHINA BUT FAR LESS TECHNICALLY SOPHISTICATED KINDS OF MACHINES. IT LOOKS LIKE CHINA HAS BEEN
MAKING STRIDES WITH SELF-SUFFICIENCY. MIKE: IT HAS. WE SAW A SAMPLE OF THAT LAST YEAR DURING GINA RAIMONDO'S VISIT TO MAINLAND CHINA -- VISIT TO MAINLAND CHINA. THERE WAS A MUCH FASTER SEMICONDUCTOR PROCESSING CHIP THAT ANYONE THOUGHT THEY WERE CAPABLE OF GENERATING AND USING IN A CONSUMER DEVICE. VERY SMALL CHIP. THE U.S. WAS TAKEN ABACK BY IT AND IT
WAS MADE IN PART WITH OLDER GENERATION ASML MACHINES BUT WITH TECHNOLOGIES THAT CAME FROM OTHER SOURCES. IT WAS A SIGN THAT THE CONCERN IS THAT CHINA WILL BE ABLE TO CATCH UP IN TERMS OF TECHNOLOGICAL ADVANCES IN PRODUCING THE SEMICONDUCTORS. IT REQUIRES SENSITIVE EQUIPMENT LIKE THE KIND THAT ASML MAKES. ASML WAS THE ONLY PRODUCER OF THESE MACHINES CALLED EXTREME ULTRAVIOLET MACHINES AND THEY HARNESS LIGHT WAVES TO CREATE THESE TINY.
TRANSISTORS Y THATE YOU NEED A MICROSCOPE TO LOOK AT. THEY DO THESE POWERFUL COMPUTATIONS THAT EVEN MILITARY APPLICATIONS REQUIRE. THE SENSITIVITY OF THIS IS VERY CLEAR. WHAT WE ARE TALKING ABOUT ALSO
WAS A MAINTENANCE FUNCTION BECAUSE THESE EUV MACHINES REQUIRE A LOT OF UPKEEP. AND THE COMPANY, ASML, TO BE ABLE TO TURN THEM OFF REMOTELY JUST FOR MAINTENANCE PURPOSES. HOWEVER, THEY HAVE A GEOPOLITICAL SIGNIFICANCE TOO.
CAROLINE: MICHAEL SHEPPARD WEAVING IT BEAUTIFULLY TOGETHER FOR US. IT HAS REAL EFFECTS ON COMPANY'S EARNINGS. ASML HAS SAID WITH THE LATEST EXPORT CONTROLS, THEIR ABILITY TO SHIPPED TO CHINA, THEY COULD SEE A REVENUE IMPACT OF 15% THIS YEAR. WE LOOK AT NVIDIA EARNINGS YET TO COME AND WE KNOW THEY HAVE EXPOSURE TO CHINA TOO. CHINA IS A HEADWIND, RECORD HIGHS ACROSS ALL MAJOR BENCHMARKS OF THE U.S. FOR HIS CHINA MUCH OF A
HEADWIND FROM YOUR PERSPECTIVE?? >> THERE ALWAYS BE GEOPOLITICAL CONCERNS BUT MARKETS HAVE A FUNNY WAY OF ADDING BLINDERS ON AND FOCUSING ON WHAT IS MOST IMPORTANT, FUNDAMENTALS AS WELL AS MONETARY POLICY IN THESE CHALLENGING TIMES AND UNIQUE TIMES. I THINK THERE'S A CALCULUS THAT HAS GONE ON THAT HAS SAID YES, THERE ARE NUMBER OF RISKS OUT THERE BUT WE WILL KEEP INVESTING AND WE ARE GOING TO CONTINUE TO ENJOY THE EARNINGS GROWTH WE HAVE SEEN. CAROLINE: TALKING OF EARNINGS GROWTH, EVERYONE WAITING ON BATED BREATH ON WHAT SORT OF GROWTH AND VIDEO POSTS AFTER THE BELL TOMORROW. THERE IS A MARKET MOVE ON THE BACK OF REPORTING COMING FROM OTHER TITLES TODAY THAT MAYBE THERE WILL BE SOME SORT OF POCKET, AIR POCKET IN BETWEEN SOME OF THE MORE SOPHISTICATED CHIPS THAT THEY MADE FROM NVIDIA MOVING ON TO GRACE BLACKWELL AND AMAZON CAUSING THE ONES ON THE LESS SOPHISTICATED GRACE HOPPER.
DOES THAT MATTER MORE, THE WHO'S BUYING, WHO'S NOT THEN FED POLICY RIGHT NOW? KRISTINA: FOR THE TECH SECTOR PERHAPS, IT IS NVIDIA. WHEN WE LOOK AT WHAT IS LIKELY TO HELP MARKETS MOVE FORWARD, IT IS RATE CUTS. THE REALITY IS THAT IMPACTS THE TECH SECTOR IN PARTICULAR BECAUSE TYPICALLY WHEN WE SEE HIGHER YIELD, THAT EXERTS DOWNWARD PRESSURE ON TECHNOLOGY STOCKS AND VICE VERSA. THE HIGHER VALUATION NAMES ARE MORE SENSITIVE. I THINK THAT RIGHT NOW IS IMPORTANT. NVIDIA IS IMPORTANT FOR SEMICONDUCTORS, FOR THE TECH SECTOR, BUT RIGHT NOW, THERE IS A WAIT ON FOR CENTRAL BANKS TO START CUTTING.
WE'VE GOTTEN A FEW LITTLE CUTS SO FAR -- THE SWISS NATIONAL BANK -- BUT NOW WE ARE READY FOR MORE. I LOOK AT IT THIS WAY. AS A PARENT OF TEENAGERS, A SON WHO WENT THROUGH THE COLLEGE PROCESS A COUPLE YEARS AGO, HE GOT INTO SCHOOL OFF THE WAITLIST. SOME GOT IN EARLY DECISION. WE ALL WOUND UP GRADUATING AT THE SAME TIME WITH THE SAME DEGREE. WE WILL PROBABLY SEE THE FIRST
MOVER BEING ECB,, MAYBE THE BANK OF CANADA BUT THE FED WILL BE A LONG AS WELL. WE WILL ALL END UP PRETTY MUCH IN THE SAME PLACE BUT WE WILL SEE OTHERS START THE BALL ROLLING, OTHER MAJORS START THE BALL ROLLING BEFORE THE FED. CAROLINE: IN A WAY, BE PATIENT, BUT SHOULD YOU BUY INTO TECH ON THE BASIS OF THAT MACRO POLICY? KRISTINA: I AM NOT A BELIEVER IN MARKET TIMING BECAUSE IT IS SO HARD TO DO BUT I THINK STARTING TO INCREASE EXPOSURE NOW AS WE WAIT FOR RATE CUTS TO BEGIN THE IS ARGUABLY A VERY SENSIBLE STRATEGY. MANY INVESTORS, RETAIL AND INSTITUTIONAL, ARE OVERWEIGHT TO CASH. CERTAINLY, THEY SHOULD BE TAKING SOME MONEY OFF THE SIDELINES AND MOVING INTO FIXED INCOME. LOCKING IN RATES ON THE LONG
AND BUT THEY SHOULD BE ALSO MOVING INTO EQUITIES. TECH IS VERY ATTRACTIVE BUT FOR VALUATION REASONS, EUROPEAN EQUITIES, U.K. EQUITIES, EMERGING MARKETS EQUITIES, THERE ARE A LOT OF OPPORTUNITIES OUT THERE. CAROLINE: UTILITIES DOING VERY WELL BUT ALSO BECAUSE PEOPLE THINK THAT IS AN AI PLAY. KRISTINA: THAT IS NOT ON MY BINGO CARD FOR THIS YEAR BUT IT IS ABSOLUTELY AN AI PLAY. CAROLINE: YOU THINK WE SHOULD STOP
SPREADING HER WINGS FROM A GEOGRAPHICAL? PERSPECTIVE KRISTINA: ABSOLUTELY. A LOT OF THE SIGNIFICANT GROWTH IS COMING FROM THE TECH SECTOR. WHEN WE LOOK AT THE INDUSTRIES WITHIN TECH, THREE OF THEM ARE DELIVERING DOUBLE DIGIT EARNINGS GROWTH. WE HAVE TO RECOGNIZE THAT VALUATIONS ARE HIGHER.
CAROLINE: THANK YOU FOR COMING UP, WE WILL BE BREAKING DOWN SOME OTHER KEY EARNINGS METRICS WE JUST GOT. ZOOM COMPANY CFO KELLY STECKELBERG IS HERE. LET'S TAKE A LOOK AT HOW SOME COMPANIES ARE STILL TRYING TO WHETHER THE NEED TO CUT COSTS. DISNEY UP .4%. THEY ARE CUTTING 175 JOBS AT PIXAR. TOY STORY, FINDING NEMO -- 14% LEFT TO GO. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: LET'S TALK ZOOM VIDEO FOR A MOMENT. REPORTING FIRST-QUARTER RESULTS, BEATING EXPECTATIONS
ON THE PRIOR QUARTER. THE SALES FORECAST HAVE PEOPLE TRYING TO UNDERSTAND WHERE THE CONSERVATIVE ELEMENTS ARE LYING AND WHERE THE OPPORTUNITIES ARE. LET'S TALK WITH KELLY STECKELBERG, ZOOM CFO PETE GREAT TO HAVE YOU WITH US.
THERE IS SOME CONCERN ABOUT MORE CAUTIOUS FORECAST. CAN YOU TALK US THROUGH HOW YOU SEE SMALL, MEDIUM-SIZED ENTERPRISE DEMAND FOR YOUR PRODUCTS? KELLY: WE WERE VERY PLEASED WITH OUR Q1 RESULTS. WE BEAT ANALYST EXPECTATIONS ACROSS REVENUE, PROFITABILITY AND FREE CASH FLOW. WE REPORTED Q1 REVENUE OF $1.14 BILLION, UP 3% YEAR-OVER-YEAR.
WE DID SEE GROWTH IN OUR ENTERPRISE WHICH WAS UP 5% YEAR-OVER-YEAR. IN TERMS OF SMB, WHICH WE'VE GOTTEN A LOT OF QUESTIONS ABOUT, WE SUPPORT THAT SEGMENT OF OUR BUSINESS MOSTLY THROUGH OUR ONLINE SEGMENT. THAT ACTUALLY DID BETTER THAN WE EXPECTED THIS QUARTER. VERY PLEASED WITH THE RESULTS ACROSS ALL OF OUR SEGMENTS.
CAROLINE: YOU ARE A NUMBERS PERSON. WE SAW THE NUMBER OF ENTERPRISE CUSTOMERS DECLINED SLIGHTLY BUT THERE WAS A RESHUFFLING, ACCOUNTING FOR THE DIFFERENCE OF HOW YOU COUNT CUSTOMERS. WHY ARE THEY DECLINING? HOW DO WE DIGEST THAT DECLINE? KELLY: WHAT I WANT TO POINT OUT IS WE DID TRANSITION SOME CUSTOMERS FROM THE DIRECTLY SEGMENT ONLINE JUST TO PROMOTE BETTER SELF-SERVICE. THESE ARE TYPICALLY MUCH SMALLER CUSTOMERS WHERE WE CONTINUE TO SEE GROWTH IS THE UPMARKET. WHEN YOU LOOK AT CUSTOMERS THAT CONTRIBUTE MORE THAN $100,000 OF REVENUE, THAT WAS ACTUALLY UP 8% YEAR-OVER-YEAR. THAT IS THE SEGMENT OF THE
BUSINESS THAT IS REALLY HELPING US DRIVE GROWTH AND WHERE WE ARE REALLY FOCUSED. ON THE SMALLER END, THOSE CUSTOMERS, WE GIVE THEM A LOT OF FLEX ABILITY. THEY SOMETIMES TURN THE SERVICE OFF WHILE THEY TAKE A BREAK WITH THE KIDS AND THEN COME BACK WHEN IT SERVES THEM WELL. CAROLINE: LET'S TALK ABOUT THE AREAS YOU HAVE BEEN PUSHING INTO. WORKFORCE ENGAGEMENT
MANAGEMENT, AI. CITIGROUP ANALYSTS SAY THEY FIND IT HARD TO FIND OF DURABLE PATHWAY TO RE-ACCELERATING GROWTH. PAINT THAT PICTURE. KELLY: WE TALKED ABOUT THIS A LOT ON THE CALL YESTERDAY. WE SAID WE EXPECT GROWTH IN THE SECOND HAVE TO START TO REACCELERATING. WE ANNOUNCED YESTERDAY THAT WE HAVE OVER 90 CUSTOMERS AND OUR CONTACT CENTER THAT ARE CONTRIBUTING MORE THAN $100,000 OF TRAILING 12 MONTH REVENUE WHICH HIGHLIGHTS THESE ARE SOPHISTICATED BUYERS.
OUR PRODUCTS ARE NOW COMPETING WITH THE TOP FOUR IN THE QUADRANT THAT YOU PROBABLY KNOW ALL THE NAMES OF. THAT COMBINED WITH THE STRENGTH WITH ZOOM PHONE, WORK VIVO, WHERE META IS DISCONTINUING ITS WORKPLACE AND WE HAVE BEEN NAMED THE PREFERRED PARTNER FOR THAT TRANSITION WHICH OPENS UP A WHOLE NEW OPPORTUNITY FOR US. THOSE ARE ALL THE COMPONENTS THAT WILL LEAD TO RE-ACCELERATION IN THE BACK HALF OF THE YEAR AND INTO 2025. -- 2026. CAROLINE: MICROSOFT TEAMS IS A STRONG COMPETITOR. WE UNDERSTAND THAT HAS BEEN SOME REGULATORY CONVERSATIONS COMING FROM ZOOM ABOUT UNFAIR COMPETITION. HOW IS THAT GOING? KELLY: THERE'S A LOT GOING ON IN THE EU. THEY UNBUNDLED IT THERE.
UNTIL THEY GET TO A COMPETITIVE PRICING FOR THEIR PRODUCTS, IT IS NOT REALLY A LEVEL PLAYING FIELD. THAT IS WHAT WOULD SERVE EVERYONE IN THIS INDUSTRY. WE BELIEVE THE BEST, INCLUDING CUSTOMERS, BECAUSE HAVING A LEVEL PLAYING FIELD FOR THE TWO STRONGEST COMPETITORS WHICH IS ZOOM AND MICROSOFT WE THINK IS THE BEST APPROACH. CAROLINE: ARE REGULATORS LISTENING? KELLY: WE WILL WAIT AND SEE HOW IT CONTINUES TO EVOLVE. CAROLINE: EUROPE IS USUALLY QUITE QUICK
ON THE REGULATORY DECISION-MAKING. WE ARE STILL WAITING FOR THIS REAL GAVIN IS A TEST READ GAVIN IS A SHIP -- THIS REAL GAVIN'S -GALVANIZATION. TALK ABOUT STRATEGIC M&A. ANY NEWS FOR THE INVESTOR BASE
THERE? KELLY: REACCELERATING AND TOPLINE GROWTH IS OUR NUMBER ONE PRIORITY. IN THE MEANTIME, WHILE WE ARE FOCUSED ON INVESTING THERE, WE ARE FOCUSED ON GIVING RETURNS BACK TO OUR SHAREHOLDERS. LAST QUARTER, WE ANNOUNCED A $1.5 BILLION SHARE BUYBACK PROGRAM. Q1, WE DID BUYBACK 2.1 MILLION
SHARES AND WE WILL CONTINUE TO EXIECUTE THAT. CONTINUING TO LOOK FOR OPPORTUNITIES TO DEPLOY CASH IF WE SEE STRATEGIC OPPORTUNITIES. THOSE OF THE TWO AREAS WE KEEP FRONT AND CENTER. CAROLINE: KELLY, IT IS GREAT TO HAVE YOU HERE. COMING IN FROM TEXAS. ZOOM CFO KELLY STECKELBERG. COMING UP, WE HAVE TO TALK ABOUT CRYPTO FOR A MOMENT.
ETHER SURGING ON MOMENTUM FOR THE ETF APPROVAL. WELL IT COME? WE HAVE A KEEP AN EYE ON WAS HAPPENING WITH TENCENT BECAUSE THERE HAS BEEN PRESSURE, THERE HAS BEEN A BIG NEW GAME, A BLOCKBUSTER GAME EVERYONE HAS BEEN WAITING FOR. WITHIN AN HOUR, THEY HAD TO PUT THE GAME ON ICE BECAUSE THE SERVERS WERE OVERLOADED. DUNGEONS AND FIGHTER MOBILE HAS
EVERYONE CLEARLY EXCITED BUT SOME SERVER FLUCTUATIONS HAVE HURT IN THE INTERIM. ANALYSTS SAY THIS WILL NOT BE A LONG-TERM IMPACT. CAROLINE: LET'S TALK ABOUT THIS RALLY IN CRYPTOCURRENCIES. IT IS UNDERWAY AMID SIGNS OF A MOMENTUM FOR APPROVAL OF ANOTHER SPOT ETF BUT THIS TIME LINKED TO ETH. JOINING US IS JAMES FROM BLOOMBERG INTELLIGENCE. UP 23% THE LAST COUPLE OF DAYS.
WE ARE USED TO VOLATILITY BUT WHAT OF THE TEA LEAVES YOU ARE READING THIS? JAMES: WE'VE HAD THESE FILINGS FOR MONTHS NOW SINCE THE FALL EVEN PETER NOTHING OVER THE LAST COUPLE OF MONTHS SIGNIFIED THERE WAS ANY SORT OF APPROVAL. IF YOU TALK TO THE ISSUERS, EXCHANGES, NO ONE THOUGHT IT WOULD HAPPEN. WE STARTED HEARING FROM DIFFERENT PEOPLE YESTERDAY THAT THE SEC REACHED OUT WITH COMMENTS AND REQUESTING IMMEDIATE RESPONSES AND UPDATES THE FILINGS. THE DEADLINE FOR THIS WAS THURSDAY. IT IS MAY 23.
THE SEC WAS BASICALLY SILENT, NOT INTERACTING WITH ANYONE ON THESE TOPICS UNTIL YESTERDAY. BASICALLY, THE SEC DECIDED AS OF MONDAY, WE DON'T KNOW WHEN IT STARTED, MAYBE LATE MORNING, EARLY AFTERNOON, BUT THE SEC BASICALLY STARTED SAYING WE ARE GOING TO LIKELY APPROVE THESE THINGS. AND BASICALLY TOOK THE APPROVAL ODDS OUT. CAROLINE: THEREFORE, YOU MOVED YOUR SPOT ETHER LIKELIHOOD PROBABILITY TO 75%. IS THIS TYPICAL TO HAVE A
SUDDEN RESURGENCE IN THE DRAMA, SHALL WE CALL IT? JAMES: NO. WE WERE THINKING ABOUT LOWERING OUR ODDS LAST WEEK. WE ONLY WENT TO 90% FOR THE SPOT BITCOIN ETF EVEN THOUGH EVERYTHING WAS POINTING IT WOULD GET APPROVED. WE LEFT THAT 10% BECAUSE WE HEARD RUMBLINGS THE BIDEN WHITE HOUSE WAS CONSIDERING STEPPING INTO STOP THE APPROVALS, WHICH SOUNDS A LITTLE CRAZY ON ITS FACE BUT IT SEEMS LIKE THE EXACT OPPOSITE MIGHT HAVE HAPPENED. IT SEEMS LIKE THE SEC WAS LIKELY PLANNING TO APPROVE, THERE MIGHT HAVE DENIAL LETTERS DRAFTED UP.
IT MIGHT BE THAT THE BIDEN ADMIN CAME IN AND SAID YOU NEED TO IMPROVE THESE -- APPROVE THESE THINGS. CAROLINE: INTERESTING PERSPECTIVE. I AM INTERESTED WHAT IT MEANS IN TERMS OF INSTITUTIONAL DEMAND. WHAT WE SAW WAS THE BITCOIN ETF, A WHOLE HOST OF NEW ETF'S WERE LAUNCHED. SUDDENLY, A WHOLE WAVE OF MONEY CAME IN. IS THE SAME THING GOING TO
HAPPEN FOR SMART CONTRACT FOCUS? JAMES: I DO THINK THERE WILL BE A WAVE OF ETHEREUM ETF'S THAT LAUNCH. THE BITCOIN ETF WAS PLANNED OUT FOR MONTHS. THERE ARE WHOLE BUNCH OF OTHER FILINGS WE ARE NOW EXPECTING. THERE NEEDS TO BE APPROVAL ON THE S1'S AS WELL. WE DO THINK THERE WILL BE SIGNIFICANT DEMAND FOR THESE THINGS BUT IT WOULD PROBABLY SOME FRACTION OF THE BITCOIN ETF DEMAND. IF YOU LOOK AT THE MARKET CAP OF BITCOIN, A THEORY HIM IS ABOUT ONE THIRD -- ETHEREUM IS ABOUT A THIRD OF THE MARKET CAP. IF THESE ETF'S CANNOT STAKE,
THAT SHOULD DIMINISH THEM OF THE DEMAND. IF YOU TAKE THE DEMAND IN THE NATIVE CRYPTO MARKET AND SAY IT IS ABOUT 30% OF BITCOIN A DISCOUNT THAT A LITTLE BIT, I THINK THERE WILL BE DEMAND. MAYBE 25% OF THE DEMAND FOR BITCOIN ETF'S OVER THE LONG-TERM. THAT IS STILL BILLIONS OF DOLLARS. $13 BILLION OF INFLOWS TO SPOT BITCOIN ETF'S IN FOUR MONTHS. EVEN IF WE GET 25% OF THAT,
THAT IS A PRETTY SIGNIFICANT CHUNK OF CHANGE GOING INTO NEW ETF'S THAT WILL POTENTIALLY LAUNCH. CAROLINE: ALL EYES ON THE MAY 23 SPOT ETHER ETF APPLICATION. JAMES RAISING THOSE PROBABILITIES. THANK YOU. WE WILL HEAR FROM NONE OTHER THAN THE MICROSOFT CEO ON HOW TO WORK TOGETHER WITH ARTIFICIAL INTELLIGENCE. THAT IS COMING UP NEXT. TALKING OF ARTIFICIAL
INTELLIGENCE AND HOW PEOPLE ARE USING IT, A BIT OF A PRICE WAR POTENTIALLY IN CHINA. ALIBABA SPARKING AT THIS TIME. AN AI PRICE WAR. REALLY DEEP DISCOUNTS, TO THE TUNE OF 97% FOR ITS AI SERVICES. BAIDU'S IMMEDIATELY RESPONDED. BYTEDANCE ALSO ANNOUNCING PRICING FOR ITS AI SERVICES, ESSENTIALLY 99% LOWER THAN THE CHINA INDUSTRY NORMS. THERE'S A WHOLE WAVE OF DESIRE TO GET PEOPLE TO USING THE PRODUCTS. FROM NEW YORK, THIS IS "BLOOMBERG TECHNOLOGY." ♪
CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I AM CAROLINE HYDE. LET'S CHECK THE MARKETS. SINCE THE MARKETS. SENSITIVITY RIGHT NOW WE STILL NEAR RECORD HIGHS ACROSS MOST BENCHMARKS IN THE U.S. DOWN BY FIVE POINTS ON THE NASDAQ 100 DIGESTING FED SPEAK TODAY. HOW QUICKLY MIGHT WE SEE RATE CUTS? RAPHAEL BOSTIC SAYING WE MIGHT REANALYZE. THE STOCK SEE -- 605 POINT 2%. THE CRYPTO SPACE ON THE UP AND UP.
IN PARTICULAR ETHEREUM UP MORE THAN 8% AS WE POTENTIALLY START TO GET OURSELVES READY FOR A SPOT ETHEREUM UDF IN THE U.S.. INDIVIDUAL STOCKS. AMAZON DOWN BY MORE THAN A PERCENTAGE POINT. INTERESTING STORY REPORTED BY
THE FINANCIAL TIMES. MAYBE AMAZON IS PUTTING PAUSE ON ITS DEMAND, OR AT LEAST ORDERS, FOR THE MOST HIGH RATE AND MOST SOPHISTICATED TECHNOLOGY CHIP ARCHITECTURE COMING FROM NVIDIA AND INSTEAD OF GETTING THAT GRAYS HARBOR THEY ARE WAITING AND GOING FOR GRACE BLACKWELL. NVIDIA STILL UP 1/10 OF A PERCENT. WE WILL GET EARNINGS AFTER THE BELL WEDNESDAY. MICROSOFT UP BY ALMOST A PERCENTAGE POINT, ENHANCING COPILOT. WE ARE HEARING HOW THEY ARE TAKING ON APPLE WITH NEW AI PCS.
WE HAVE SO MUCH TO HEAR FROM THE LEADER OF MICROSOFT. THEY ARE LAUNCHING THE TEAM COPILOT. AND THEY HAVE A NEW AI FEATURE HELPING YOU WITH PROJECT MANAGEMENT FOSTERING COMPETITION. THE CHAIRMAN AND CEO SAT DOWN WITH THE BLOOMBERG ORIGINALS HOST EMILY CHANG AND TALKED ABOUT HOW IT CAN HELP WITH DRUDGERY IN MEETINGS. LISTEN. >> EVERYONE COMPLAINS ABOUT MEETINGS. WHAT YOU SHOULD REALLY COMPLAIN ABOUT IS NOT BEING PREPARED FOR MEETINGS. NOT PAYING ATTENTION IN
MEETINGS, NOT REMEMBERING WHAT HAPPENED IN MEETINGS. THE MEETINGS COPILOT HELPS KEEP THE KNOWLEDGE ALWAYS FRONT AND CENTER FOR ORGANIZATIONS. THE FEATURE WE ARE LAUNCHING IS CALLED TEAM COPILOT. TEAM COPILOT WILL BE IN THE MEETING AND EVERYWHERE YOUR TEAM IS WORKING. IF YOU ARE DOING A PROJECT AT WORK PROJECT MANAGEMENT ASSISTANCE THE TEAM COPILOT WILL HELP YOU AND YOUR TEAMMATES. IT IS LIKE NAI TEAMMATE THAT HELP TO YOU. CAROLINE:
FOR THIS TO WORK YOU HAVE TO TRUST YOUR PC WITH EVERYTHING ABOUT YOU. WILL IT KNOW YOU BETTER THAN A REAL ASSISTANT, FRIEND, OR COLLEAGUE? ARE WE IN RELATIONSHIP TERRITORY? >> THAT IS A SUPER IMPORTANT ONE. TO ME THERE ARE TWO THINGS. ONE, HOW SHOULD ONE THINK ABOUT PRIVACY? HOW SHOULD ONE THINK ABOUT SAFETY? THIRD, HOW SHOULD WE RELATE TO AR? ON THE PRIVACY SIDE, I THINK THERE WILL BE NEEDS FOR REAL PRIVATE INFORMATION, WHETHER ON THE ENTERPRISE SIDE WHERE PEOPLE SAY, DON'T TRAIN ON MY DATA. THAT IS THE ASSURANCE WE HAVE FOR ANYBODY IN THE CLOUD. OR THE NEW PCS WE LAUNCHED YESTERDAY THAT ARE ALL ABOUT KEEPING EVERYTHING YOU ARE DOING ON THE PC LOCAL, ON THE PRIVACY SIDE. SAFETY IS ANOTHER ONE. HOW DO I MAKE SURE THAT WHATEVER I AM DOING A SAFE? AND I SAY FROM ADVERSARIAL ATTACKS? THIRD, THE RELATIONSHIP SITE. I DON'T LIKE ANTHROPOMORPHIZING
AI. I BELIEVE IT IS A TOOL. IT DOES HAVE INTELLIGENCE IF YOU WANT TO GIVE IT THAT MONIKER. BUT, IT'S NOT THE SAME INTELLIGENCE I HAVE. ONE OF THE MOST UNFORTUNATE NAMES IS ARTIFICIAL INTELLIGENCE. I WISH WE CALLED IT DIFFERENT INTELLIGENCE, EVEN.
I HAVE MY INTELLIGENCE. I DON'T NEED ARTIFICIAL INTELLIGENCE. I JUST WANT MY INTELLIGENCE TO COMPOSE WITH A DIFFERENT INTELLIGENCE SO I HAVE MORE AGENCY, FREQUENTLY -- FRANKLY. CAROLINE: AND KEY COMPANY ON THE MOVE. SHARES OF PALO ALTO NETWORKS HAVE BEEN UNDER PRESSURE AS THE COMPANY IS TELLING US WHERE ITS FORECAST IS DOING. FOURTH QUARTER REVENUE COMING
IN 2.15 BILLION DOLLARS-2.1 7 BILLION DOLLARS. WE TALKED THROUGH THE FORECASTS AND WHERE THE DIRECTION OF STRATEGY IS WITH THE PALO ALTO NETWORKS CEO. GREAT TO HAVE TIME WITH YOU. ULTIMATELY THE FORECAST WE USED TO GET, THE GROWTH WE HAVE BEEN USED TWO OF REVENUE FROM PALO ALTO NETWORKS IS WHAT, 20%, 30% YEAR ON YEAR GROWTH AND NOW WE HAVE TO GET USED TO POTENTIALLY 811 PERCENT GROWTH PERSPECTIVE. IS IT BUYER FATIGUE FOR CYBER? >> NOT REALLY. THANK YOU FOR HAVING ME HERE. WE ARE PLANNING TO DELIVER CLOSE TO $2 BILLION OF REVENUE IN Q4 MAKING US AN $8 BILLION COMPANY FOR THE YEAR AND ARE GROWTH RATES ARE FORECAST BETWEEN 10% AND 15%.
THERE IS NO BUYER FATIGUE IN CYBER SECURITY. WE ARE THE FIRST COMPANY TO BREAK THE BARRIER AND GET THE SCALE IN CYBERSECURITY. CYBERSECURITY IS A ROBUST MARKET FROM A DEMAND PERSPECTIVE AND OUR TEAMS ARE EXECUTING AMAZINGLY AROUND THE WORLD. CAROLINE:
LET'S TALK ABOUT WHERE THE ROBUST DEMAND COMES FROM AND WHAT FOR. YOU HAVE TALKED ABOUT ULTIMATELY BEING AND EVERYTHING OFFERING, PLATFORM VISITATION AT THE HEART OF THE STRATEGY. THE IDEA THAT YOU WANT TO ENSURE ALL PARTS ARE SOPHISTICATED LEE PROTECTED. BUT, HOW DOES IT WIN OUT VERSUS WHAT PEOPLE CALL IT THE BEST IN BREACH OFFERING OFFERING ONE PARTICULAR ELEMENT OF CYBER? NIKESH: 15 OR 20 YEARS AGO WE USED TO HAVE A MULTITUDE OF APPLICATIONS ACROSS OUR ENTERPRISE THAT DID CUSTOMER MANAGEMENT THINGS. TODAY YOU DON'T THINK ABOUT HAVING 15 DIFFERENT APPLICATIONS TO MANAGE CUSTOMERS.
YOU USE SALESFORCE, ORACLE, MICROSOFT DYNAMICS. YOU DON'T -- USE 14 DIFFERENT APPLICATIONS. IN HR, PEOPLE SYSTEMS, WHETHER WORKADAY OR OTHERS, YOU ARE GETTING TO A PLACE WHERE THESE CONCEPTS REQUIRE INTEGRATION. OTHERWISE, THE OWNERS OF INTEGRATION GOES ON THE CUSTOMER. THAT MEANS EVERY CUSTOMER HAS
TO BE ABLE TO CREATE AMAZING SECURITY OUTCOMES. ON THE OTHER, BAD ACTORS HAVE CHANGED TACTICS. THEY CAN GET IN AND OUT OF YOUR BUSINESS IN UNDER AN HOUR. IT IS A PROBLEM STACKED AGAINST COMPANIES IF THEY PLAN TO STITCH THIS UP TOGETHER FOR YEARS TO COME.
THAT IS WHY WE NEED TO MOVE TOWARDS MORE INTEGRATED THINGS THAT WORK TOGETHER AND MORE REAL-TIME OUTCOMES AND SECURITY STRATEGIES AS OPPOSED TO THE BEST RISK STRATEGY THAT HAS WORKED HISTORICALLY. CAROLINE: IS THE MARK -- MARKET THING I BY THE PLATFORMIZATION? NIKESH: THESE SHORT-TERM BONDS ARE PART OF THE ABSORPTION OF THE MARKET ON WHERE THE MARKET NEEDS TO GO. WE HAVE DONE WELL THE LAST FIVE YEARS, THE LAST ONE YEAR. IT'S A VERY STRONG DEMAND MARKET. WE ARE EXECUTING AMAZINGLY. WE ARE THE LARGEST PLAYER IN THE MARKET.
THE NUMBER OF PLATFORM DEALS THIS QUARTER EXCEEDED ANY WE HAVE DONE IN HISTORY, SETTING US IN THE RIGHT DIRECTION TO TRY TO ACHIEVE A $15 BILLION A ARE A NUMBER OF TARGETED IN THE NEXT FEW YEARS. WE THINK THINGS ARE ON TRACK AND WE ARE EXECUTING. CAROLINE: YOU LIKE THE ARR NUMBER BUT THERE'S A NUMBER IN YOUR METRICS YOU DON'T LIKE PEOPLE FOCUSING ON, THE BILLING NUMBER. YOU SAY IT IS VOLATILE AND ULTIMATELY AN ARTIFICIAL METRIC. WHY IS IT ARTIFICIAL? YOU SAY IT'S DUE TO PAYMENT TERMS CHANGING. BUT EVERYBODY IS WORRIED ABOUT
THE BILLING FORECAST BEING THE SLOWEST SINCE YOUR IPO. NIKESH: WHEN WE LIVED IN THE ZERO INTEREST RATE ENVIRONMENT PEOPLE WERE WILLING TO PAY YOU UP FRONT FOR YEARS OF UPCOMING SERVICE. TODAY CFOS GET INVOLVED IN SAY, LISTEN, I WILL PAY YOU WHEN YOU DELIVER SERVICE. COMPANIES IN THE ARR BUSINESS ON AN ANNUALIZED PAYMENT PLAN THEY GIVE YOUARR AND ANNUAL VALUES AND IT SEEMS TO WORK. FOR AS PEOPLE LOOK AT ARE YOU COLLECTING THE MONEY UP FRONT? THAT IS WHAT BILLINGS IS. FOR US THE NUMBER IS RPO REMAINING PERFORMANCE OBLIGATIONS WHICH GREW AT 23%.
THAT'S AN IMPORTANT METRIC. GROWTH IS IMPORTANT. IT TELLS YOU HOW BIG BUSINESSES THAT IS COMMITTED BY CUSTOMERS. IT GIVES YOU A TRUE UNDERSTANDING OF THE STRENGTH OF THE BUSINESS.
BILLING CAN BE MANAGED DEPENDING ON WHEN CUSTOMERS CHOOSE TO PAY YOU. IT CAN BE A LESS RELIABLE METRIC IN A HIGHER INTEREST RATE ENVIRONMENT WHERE CUSTOMERS ARE CAUTIOUS. CAROLINE: IS THERE LIKELY TO BE PRESSURE ON CONTRACT LINKS GOING FORWARD AND WHAT DOES THAT SAY ABOUT THE ENTERPRISE DESIRE TO COMMIT TO CYBERSECURITY PROTECTION? NIKESH: THINGS ARE ACTUALLY IN THE OPPOSITE DIRECTION. IF YOU GET PRICE PROTECTION IN A HIGHER INTEREST RATE ENVIRONMENT YOU HAVE A RISK OF HIGHER PRICES IN THE FUTURE. YOU ARE SEEING CUSTOMER SAY, I
DON'T WANT TO DEAL WITH THE INFLATIONARY IMPACT OF PRICE INCREASES. CAROLINE: LOOK AT WHAT ALL OF THE ANALYSTS ARE SAYING VERSUS YOUR PARTICULAR EARNINGS. THEY ARE SAYING IT'S A KNEE-JERK REACTION. CORE FUNDAMENTALS REMAIN HEALTHY. A LOT OF ANALYSTS BELIEVE IN THE LEADERSHIP NOW.
TALK ABOUT WHAT YOU BELIEVE AND HOW ARTIFICIAL INTELLIGENCE IS CHANGING YOUR ROLE AS A LEADER AND CHANGING HOW WE PROTECT AGAINST CYBERSECURITY. WE TALK ABOUT HOW HARD IT HAS MADE LIFE. AS IT REALLY IN TERMS OF ATTACKS? NIKESH: IN THE LAST FIVE YEARS OUR COMPANY HAVE GONE UP FIVE TIMES IN VALUE. WE HAVE DONE WELL FOR SHAREHOLDERS. WE HAVE DONE WELL FROM EXECUTION PERSPECTIVE. WE ARE ONE OF THE LARGEST COMPANIES NOW. WE HAVE AN EVER-GROWING PORTFOLIO.
WE BROUGHT THE NOTION LARGE CYBERSECURITY COMPANIES CAN CONTINUE TO ELEVATES OUR CUSTOMERS DON'T HAVE TO. IN THE CONTEXT OF AI MOST RECENTLY WE ANNOUNCED CITIES HAVE AI SECURITY PRODUCTS. THE ENTHUSIASM FOR AI ON THE BAD ACTOR AND COMPANY SIDE IS HIGH. PEOPLE WANT TO TRY AI. YOU HAD A SUDDEN EARLIER SEEN COPILOTS BEING INTRODUCED. EVERYBODY WANTS AN AI BUDDY, AND AI ASSISTANT TO MAKE THEIR LIFE MORE PRODUCTIVE. IN THAT ENVIRONMENT EVERY
COMPANY IS RARING TO GO TO EMPLOY THE TECHNOLOGY AND YOU HAVE TO BE CAREFUL. IT HAS TO BE SECURED BY DESIGN. YOU HAVE TO MAKE SURE THE ELEMENTS DON'T HALLUCINATE. YOU HAVE TO MAKE SURE NOBODY GETS INSIDE YOUR LM AND POISONS IT WITH A LOT OF DATA. WE WILL SEE A LOT OF ATTEMPTS BECAUSE BACKERS HAVE LEARNED THE TECHNOLOGY. IT IS IMPORTANT TO DELIVER AI IN A WAY THAT IS SECURE FOR CUSTOMERS. WE PIONEERED AT RSA MOST RECENTLY A COMPREHENSIVE SUITE OF PRODUCTS WE INTEND TO MAKE AVAILABLE TO CUSTOMERS THE NEXT FOUR WEEKS THAT ALLOWS THEM TO GO DOWN THE JOURNEY AND BE SECURE FROM THE GET GO.
CAROLINE: PALO ALTO CEO NIKESH ARORA THANK YOU FOR SPENDING TIME WITH US. COMING UP WE HEAR FROM THE CEOS OF DELL AND NVIDIA, BOTH AT THE DEL WORLD CONFERENCE IN LAS VEGAS. THEY SAT DOWN WITH OUR OWN ED LUDLOW. LET'S CHECK IN ON WHAT SONOS IS DOING.
YOU KNOW THEM FOR SPEAKERS. NOW THEY WANT IN YOUR HEADPHONE SPACE. THE MARKET THEY SEE FOR A 449 DOLLAR DEVICE PART OF THEIR EFFORT TO GO OVER MY HOME SPEAKER COMPANY TO A BROADER MAKER OF CONSUMER TECHNOLOGY.
UP .1%. THIS IS BLOOMBERG TECHNOLOGY. THIS IS BLOOMBERG. CAROLINE: THE DELL WORLD CONFERENCE IS IN FULL SWING TODAY IN LAS VEGAS. ED LUDLOW SAT DOWN YESTERDAY WITH SOME OF THE KEYNOTE SPEAKERS. IT INCLUDED THE DELL CHAIRMAN AND CEO MICHAEL DELL AND NVIDIA CEO JENSEN LONG.
>> WE LOVE TO BRING CUSTOMERS AND PARTNERS TOGETHER TO TALK ABOUT WHAT'S NEW AND EXCITING. THIS AI OPPORTUNITY IS VERY TREMENDOUS. WE CAN NEVER DO ANYTHING BY OURSELVES.
THIS IS A GREAT EXAMPLE OF HOW YOU HAVE AN ECOSYSTEM OF COMPANIES COMING TOGETHER ALONG WITH ALL OF THESE INCREDIBLE INNOVATIONS IN GPU, COMPUTE, STORAGE, AND NETWORKING AND ALL OF THE AI MODELS AND SOFTWARE COMPANIES UTILIZING ALL THIS POWER. IT IS CAUSING A NEW INDUSTRIAL REVOLUTION. ETH THERE ARE FIVE THINGS ED: -- THERE ARE FIVE THINGS I WOULD LIKE TO TALK ABOUT. THE FIRST IS THE RELATIONSHIP
BETWEEN YOUR COMPANIES AND HOW YOU WORK TOGETHER. THE SECOND IS AI AND. HOW DURABLE WHAT IS HAPPENING AS. A IPC. YOU HAVE TALKED ABOUT A IPC ON SOCIAL MEDIA FOR SOME TIME OFFICIALLY AS WELL. U.S. LEADERSHIP. I HAVE THREE AMERICAN CEOS
AROUND ME ALL PULLING TOWARDS THE SAME GOAL. INCREASINGLY PEOPLE ASK ME TO ASK YOU ABOUT POWER AND ENERGY CONSUMPTION AND WHETHER WE SHOULD START TALKING ABOUT THAT. BUT, THE ORIGIN OF THIS, ONE OF THE REASONS I WANTED POSITION WAS GT C. YOU SAID BASICALLY THERE IS NO ONE BETTER AT END TO END SYSTEMS THAT SCALE ATHAN DELL. WHY?
HOW DOES NVIDIA INTERACT WITH THAT PART OF MICHAEL'S BUSINESS? >> IT'S A REALLY IMPORTANT TIME. WE HAVE REENGINEERED AND REINVENTED EVERY PLAYER OF COMPUTING FROM THE CHIP TO THE OPERATING SYSTEM TO THE SYSTEM SERVERS TO THE WAY THE DATA CENTERS ARE PUT TOGETHER. THERE IS ONLY ONE COMPANY IN THE WORLD THAT CAN HAVE THE ABILITY TO BUILD A COMPUTING SYSTEM, THE STORAGE SYSTEM, THE NETWORKING SYSTEM, ALL THE SOFTWARE THAT GOES ALONG WITH IT. THE PATH TO THE WORLD'S ENTERPRISE. WE WANT TO BRING THIS
GENERATIVE AI CAPABILITY TO EVERY COMPANY IN THE WORLD. SOME OF THEM CAN USE IT IN THE CLOUD BUT MANY APPLICATIONS STILL HAVE TO BE DONE. FOR US TO BRING THEM TO THE GENERATIVE AI REVOLUTION WE WILL HAVE TO GO THROUGH A PARTNER THAT CAN HELP US TAKE THIS COMPLETELY NEW REINVENTION OF A COMMUTER -- COMPUTER, THESE AI FACTORIES AND HELP EVERY CUSTOMER. ED: ON PRIM'S BACK, YES OR NO? JENSEN: ON PRIM NEVER LEFT. ON PRIM IS COOL AGAIN. CAROLINE: AS IF IT EVER WAS NOT COOL. NVIDIA CEO JENSENHUANG AND DELL CEO MICHAEL DELL. GREAT INTERVIEW.
LET'S TALK ABOUT AI AT THE START UP. SCALE AI IS HELPING TALK TECH COMPANIES IMPROVED THE DATA USED TO BUILD AI PRODUCTS, BASICALLY TO ENSURE IT IS TAGGED RIGHT. IT'S ROUGHLY DOUBLED ITS VALUATION TO GET 13 $.8 BILLION AND IT IS RAISING $1 MILLION IN ONE OF THE LARGEST FINANCING DEALS OF THE YEAR. THE ROUND WAS LED BY ACCEL WITH NEW CORPORATE BACKERS, AMAZON, META, AMD, SERVICE NOW, AND INTEL. COMING UP, WE HAVE BEEN NOTING THAT DISNEY IS SAVING SOME MONEY. THEY ARE CONTINUING TO DO THAT
WITH PIXAR ANNOUNCING LAYOFFS TO THE TUNE OF SOME 14% OF THE BUSINESS. WE HAVE DETAILS NEXT. SHARES OF TESLA TODAY. IT HAS BEEN NOTABLE WE ARE UP SOME 2.2%. IT HAS BEEN ONE OF THE BETTER PERFORMANCE ON THE NASDAQ 100. EVEN AS TESLA SHAREHOLDERS CALL ELON MUSK'S PAY DEAL AN ABYSMAL FAILURE. A COALITION OF TESLA SHAREHOLDERS URGING THE PIERS TO REJECT THE $56 BILLION PEG RECORD FOR ELON MUSK. THAT THE COMPANY BOARD HAS ASKED INVESTORS TO IMPROVE -- APPROVE AGAIN. THIS IS BLOOMBERG TECHNOLOGY.
>> ACTORS SCARLETT JOHANSSON SHARE --AS SHE WAS FORCED TO HIRE LEGAL COUNSEL FOR THE REMOVAL OF AN OPENAI OR THAT SOUNDED EERILY LIKE HER. RACHEL METZ JOINS US. WE HEARD BASICALLY OPENAI WAS PRESSING PAWS ON THE USE OF SKY. RACHEL: THE OTHER DAY OPENAI STOPPED USING THE VOICE FOR NOW. IF USERS TRIED TO USE IT IN THE CHATGPT OUT THERE WITH YOU -- HEAR A DIFFERENT VOICE CALLED JUNIPER. THESE VOICES, THE SKY VOICE IN PARTICULAR DID NOT JUST LAUNCH . THEY LAUNCHED LAST YEAR IN SEPTEMBER, WHICH SCARLETT JOHANSSON SAID IS AROUND THE SAME MONTH WHEN SAM ALTMAN REACHED OUT TO HER AND ASKED IF SHE WOULD BE INTERESTED IN PRESENTING ONE OF THESE VOICES WITH HER VOICE. CAROLINE: AND THAT SHE DECIDED A LOT OF
-- AFTER A LOT OF THOUGHT, APPARENTLY NOT TO DIVERT -- TO PROVIDE HER OWN VOICE. THERE'S A MOVIE, YEARS OLD NOW, CALLED HER WHERE JOAQUIN PHOENIX PLAYS A PART WHO FALLS IN LOVE WITH AN ARTIFICIAL INTELLIGENCE CHATBOT BASICALLY THAT HAPPENS TO BE VOICED BY SCARLETT JOHANSSON. WE SAW SAM ALTMAN PUT IN A POST LITERALLY "HER GOD" BUT COME -- HER." BUT HE SAYS IT WAS NOT BASED ON SCARLETT JOHANSSON. RACHEL: IT IS INTERESTING. TWEETING THAT, EVERYBODY KNOWS WHAT YOU MEAN. YOU COULD SAY IT'S IN A MARCH. BUT IT SOUNDS LIKE SHE DID NOT
WANT ANY PART OF IT. IT WILL BE INTERESTING TO SEE THE NEXT MOVE FROM OPENAI OR FROM SCARLETT JOHANSSON'S CAMP AS FAR AS WHAT HAPPENS NEXT. WHERE THE BOYS COME BACK? IT'S ANOTHER ACTRESS.
BUT IT DID SOUND QUITE A BIT LIKE HER I THINK A LOT OF PEOPLE WILL AGREE. CAROLINE: OPENAI HAVE TRIED TO MAKE CLEAR HOW THEY FOUND THE VOICE. IT WAS FOUND ONE YEAR AGO THROUGH 400 APPLICATIONS AND THEY FOUND FIVE VOICES THAT THEY EVENTUALLY WENT WITH. THERE'S ANOTHER ACTRESS THAT JUST HAPPENS TO SOUND LIKE SCARLETT JOHANSSON THAT MAY NOW NOT GET PAID? RACHEL: THIS IS A REAL PERSON'S VOICE BEING USED TO TRAIN A VOICE MODEL.
I HAVE NO WAY OF KNOWING HOW MUCH MODIFICATION HAVE BEEN DONE TO THE VOICE. THEY WOULD HAVE RECORDED PROBABLY QUITE A NUMBER OF SAMPLES OF THE PERSON SPEAKING. AND THEN, I AM NOT REALLY SURE WHAT KIND OF TWEAKING THEY WOULD HAVE DONE TO PRESENT THE FINAL ACTUAL VOICE.
IT IS POSSIBLE THERE WAS WORK DONE THERE. MAYBE THEY JUST NEED TO CHANGE THE VOICE A LITTLE. MAYBE THEY NEED TO RETIRE THE VOICE. MAYBE THEY WILL SAY THIS IS NOT HER VOICE AND WE WILL KEEP USING IT. IT WILL BE INTERESTING TO SEE WHAT HAPPENS. >> IT HAS HIGHLIGHTED THAT THERE ARE MORE VOICES ON CHATGPT FOR MANY. RACHEL METZ, THANK YOU FOR
ROLLING US THROUGH A CELEBRITY STORY. STICKING WITH CONTENT, PIXAR AT THE PIONEERING ANIMATOR THAT MADE TOY AND FINDING NEMO IS CUTTING 40% OF ITS STAFF. WE HAVE ANTICIPATED CUTS HERE.
>> IT IS PART OF BOB IGER'S BROADER TERM TO BRING DOWN COSTS AT DISNEY. PIXAR FOR YEARS CANNOT DO ANYTHING WRONG. THEY HAD HIT AFTER HIT AFTER HIT AND DURING THE PANDEMIC THEY RELEASED A COUPLE MOVIES RIGHT TO THE STREAMING SERVICE. THEIR LAST ONE, ELEMENTAL WAS NOT A BIG HIT. LIKE YEAR WAS NOT A BIG HIT.
THIS HAS BEEN EXPECTED A WHILE. THEY ENVISIONED DOING MORE TV PRODUCTION FOR THE STREAMING SERVICE. NOW THEY HAVE BASICALLY DECIDED WE WILL GO BACK TO JUST MAKING MOVIES. IT IS RELATED TO THAT ALSO. CAROLINE: IS THERE ANYWAY WE COULD SAY I WILL BE DOING IT? FELIX: I AM SURE AI WILL BE PART OF THE MIX. THAT IS NOT WHAT THEY ARE CREDITING THE CUTS TO AT THIS POINT.
THEY ARE POINTING TO THE SHIFT BACK TO MOVIE PRODUCTION. AGAIN, BOB IGER HAS BEEN LOOKING FOR SOMETHING LIKE $8 BILLION WORTH OF CUTS ALL ACROSS DISNEY. THIS HAS JUST BEEN THE LATEST OF MULTIPLE WAVES OF PEOPLE LOSING JOBS. CAROLINE: THANK YOU FOR RUNNING US THROUGH IT WITH DISNEY. THAT DOES IT FOR THIS EDITION
OF BLOOMBERG TECHNOLOGY.
2024-05-22 21:11
