US Targets China EVs With Tariffs, More Tech Earnings | Bloomberg Technology
ANNOUNCER: THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: ED LUDLOW IS OFF. SWEEPING TARIFFS ON CHINA TARGETING EVS, BATTERIES AND MORE. THE LATEST EARNINGS RESULTS.
APPLE APOLOGIZING AFTER ONLINE BACKLASH. QUICK CHECK ON MARKETS. THREE STRAIGHT WEEKS OF GAINS, THE BEST SINCE FEBRUARY. MIXED DATA COMING THROUGH. CONSUMER CONFIDENCE FALLING BECAUSE OF LINGERING INFLATIONARY ISSUES.
STOXX 600 ON A TEAR IN EUROPE. REAL RUN OF GOOD GAINS IN EUROPE. EARNINGS BEAT TIME AFTER TIME. BITCOIN ECHOING RISK AVERSION. NOTABLY, FIRST TIME YOU SEE CRYPTO EXCHANGE VOLUME FALLING IN SEVEN MONTHS.
SLIGHT REALITY BUMP. WARNER BROS. DISCOVERY, BEST PERFORMER. DAVID IS LOOKING TO CONTROL COSTS. WE COULD SEE MORE JOB CUTS AND A FOCUS ON PROFITABILITY.
APPLE OFF A PERCENTAGE POINT. WE WILL GET INTO THE WOES. APPLE APOLOGIZES. TESLA DOWN. ELON MUSK WILL BE FOCUSING ON $500 MILLION OF INVESTMENT IN SUPERCHARGERS. HE FIRED THE ENTIRE TEAM. IS THIS MORE TO DO WITH GEOPOLITICS AND THAT THE BIDEN ADMINISTRATION IS SET TO UNVEIL DECISIONS ON CHINA TARIFFS NEXT WEEK TARGETING EV'S AND BATTERIES? MIKE SHEPPARD IN WASHINGTON. INCREDIBLE REPORTING. IT SEEMS AFTER YEARS, MORE FOCUS ON CHINA.
MIKE: CERTAINLY. THE TEAM DID A TERRIFIC JOB GOING AFTER THIS TO TRY AND FIGURE OUT IN WHAT MANNER THIS DECISION WOULD TAKE PLACE. IT'S SHAPING UP IN THOSE THREE AREAS YOU OUTLINED. THIS WILL BE THE MOST SIGNIFICANT MOVE BIDEN HAS MADE SINCE TAKING OFFICE WITH RESPECT TO CHINA. IT'S CONSEQUENTIAL. IT AFFECTS THE TARIFFS DONALD TRUMP ANNOUNCED IN '18.
CAROLINE: THEREFORE ARE WE EXPECTING BACK AND FORTH, BRACING OURSELVES, THAT IF THIS COMES, THIS TARGETS SOLAR, DVDS AND METALS, ARE WE GOING TO HAVE MORE TIT-FOR-TAT? MIKE: CHINA RESPONDED THIS MORNING WITH A VERBAL VOLLEY, OBJECTING TO THIS CALL, WITH THE EMERGENCE OF NEWS ABOUT EXPORT CONTROLS AIMED AGAINST HUAWEI, THAT THEY SAW THIS AS COERCION. THE RESPONSE WAS SWIFT FROM THE CHINESE GOVERNMENT. THEY ARE CONCERNED. THE RETALIATION MAY NOT COME IN AREAS DIRECTLY ALIGNED WITH POLICY WE ARE SEEING AND EXPECT NEXT WEEK. SENATOR GRASSLEY IS INDICATING WE MAY SEE A RETALIATION IN AGRICULTURAL PRODUCTS, TRYING TO HIT AMERICA WHERE IT HURTS, BUT IN A DIFFERENT PLACE, WHICH IS SOMETHING IN THE PAST THAT HAS BEEN TARGETED BY BEIJING. CAROLINE: BREAKING NEWS.
THE BIDEN ADMINISTRATION WILL QUADRUPLE TARIFFS ON CHINESE EV'S. HOW BROAD IS THAT CONSIDERING NOT MANY ARE SHIPPED FROM CHINA TO THE U.S.? MIKE: YOU ARE RIGHT.
THE IDEA IS IT IS SYMBOLIC IN A WAY. LOW COST FOR THE ADMINISTRATION. THERE'S NO CONSUMER IMPACT AT HOME. WHEN YOU RAISE TARIFFS, IT'S NOT THE COUNTRY TARGETED, IT'S ACTUALLY THE CONSUMERS IN THE PURCHASING COUNTRY THAT PAY THE PRICE. IN THIS CASE, CHINA DOESN'T HAVE MUCH OF AN EV MARKET PRICE PRESENCE IN THE U.S. THE UNION MINISTRY SHOULD -- THE ADMINISTRATION IS TRYING TO SHOW IT IS TOUGH BUT ALSO TRYING TO CREATE A BULWARK SO IT IS HARD FOR CHINESE MAKERS TO BREAK INTO THE U.S. MARKET, WHICH IS BECOMING
AMENABLE TO THE IDEA OF EV'S. CAROLINE: EUROPE HAS BEEN FOCUSING ON EV'S WHEN IT COMES TO CHINA AS WELL. BRILLIANT TO HAVE YOU. THANK YOU. THE CONTEXT WITH WHICH YOU ARE TRYING TO INVEST BROADLY, IF GEOPOLITICS IS A KEY HEADWIND, LET'S DIVE INTO THAT. ONCE AGAIN, MORE NAVIGATION BY BIG TECH COMPANIES ON GEOPOLITICS.
>> GREAT QUESTION. AS WE GET CLOSER TO THE ELECTION, WE WILL HEAR MORE ABOUT THE POLICIES BOTH SIDES OF THE ISLE WILL BE PROPOSING AND A LOT OF TIMES IT IS FELT IN AN OUTSIDE WAY IN CERTAIN SECTORS. TECHNOLOGY AND HEALTH CARE. HIGHER TAXES, AS WAS NOTED, HIGHER TARIFFS IN GENERAL TENDS TO BE INFLATIONARY. WILL THE ADMINISTRATION WANT TO
TAKE THAT STEP? IS THIS MORE SYMBOLIC IN THAT WE DON'T WANT TO ENTER A MORE MEANINGFUL TRADE WAR WITH CHINA BUT ALSO SIGNALED TO THEM THEY CANNOT BE FLOODING THE MARKET WHETHER IT IS EV'S OR ANY OTHER GOOD THEY MAY BE TRYING TO GET INTO THE U.S.? SOME OF IT IS SIGNALING. SOME OF IT HAS IMPLICATIONS FOR TECHNOLOGY. WE WILL GET MORE INSIGHT INTO HOW POLICIES MAY UNFOLD AS WE GET CLOSER TO NOVEMBER. BROADLY WE ARE LOOKING AT A MARKET DRIVEN STILL BY MOMENTUM BEHIND AI, TECH AND MEGA CAP. WE EXPECT THAT TO BROADEN OVER
TIME. CAROLINE: CAN THAT BROADENING WITHSTAND INFLATIONARY PRESSURE -- THE FED IS STILL FOCUSED ON IT. MANY A MEMBER SAYING WE WILL BE HIGHER FOR LONGER. STOCKS TAKING A DIP. ARE YOU EXPECTING INFLATIONARY HEADWINDS TO LIMIT THINGS? MONA: WE ARE IN THE JEROME POWELL CAMP.
WE THINK INFLATION CAN GRADUALLY MOVE MEANINGFULLY TOWARD 2%. WE SEE THE SHELTER AND RENT COMPONENT PLAYING CATCH-UP. WE ARE SEEING THE DATA MOVE LOWER. THAT HASN'T SHOWED UP IN THE CPI BASKETS OR THE PCE BASKET, WHICH HAS A LOWER EXPOSURE. WE THINK THAT'S COMING.
TWO, WE SEE MORE MEANINGFUL POTENTIAL SLOWDOWN IN THE WAGE GAINS COMPONENT OF THE LABOR MARKET. COUPLE EARLY SIGNALS OF SOFTENING. THE JOBS REPORT ON FRIDAY. THE JOBLESS CLAIMS THIS WEEK WAS ELEVATED. OVER TIME THERE WILL BE BETTER BALANCE IN THE LABOR FORCE.
MORE SUPPLY COMING IN, LESS DEMAND FOR JOBS, WHICH WILL LEAD TO SOFTER GAINS. THE COMBINATION WILL LEAD TO BETTER INFLATIONARY TRENDS GOING FORWARD. THAT COMBINED WITH THIS EARNINGS GROWTH PICTURE CONTINUING TO OUTPERFORM AND IMPROVE MEANINGFULLY, WE THINK IS A GOOD TAILWIND FOR EQUITIES BROADLY. CAROLINE: INTERESTINGLY, IN SAN FRANCISCO, THE KEY THING IS HOW EXPENSIVE ENGINEERS ARE, WHETHER IN THE FIELD OF AI, SOFTWARE DEVELOPERS A LITTLE LESS BUT ARGUABLY ONE MILLION IN TERMS OF OVERALL PAY. I'M INTERESTED IN WHAT YOU MAKE OF THE TAILWINDS OF AI MORE BROADLY. YOU MENTIONED BROADENING OUT. THE HEALTH CARE INDUSTRY GROUPS. MONA: GREAT POINT.
THUS FAR WE'VE SEEN MOST OF THE GAINS FROM THE AI TRADE HAVE BEEN FELT BY THE ENABLERS OF AI. INFRASTRUCTURE, SEMICONDUCTORS. OVER TIME, YOU WILL SEE SECTORS THAT BENEFIT START TO PLAY MEANINGFUL CATCH UP. HEALTH CARE IS ONE OF THEM. FINANCIAL SERVICES. MANUFACTURING. INDUSTRIALS. ALL THOSE WE THINK WILL BE BENEFICIARIES. THIS IS OVER 3-5 YEARS. WE WILL START TO SEE PRODUCTIVITY GAINS. THOSE SECTORS ARE PREVALENT IN
THE U.S. AND GLOBALLY. MANUFACTURING, FINANCIALS, INDUSTRIALS TEND TO BE IN NON-US MARKETS AS WELL. THERE IS A CASE TO BE MADE TO HAVE EXPOSURE TO U.S. WE LIKE EXPOSURE TO MEGA CAP
AND THE SECTORS BENEFITING FROM AI BUT ALSO INTERNATIONAL PLAYS A MEANINGFUL PART. CAROLINE: WE LOVE IT. GREAT TO HAVE YOU. STAY WELL AND HAPPY WEEKEND. MAYBE NOT HAPPY WEEKEND FOR SOME. A SEVERE SOLAR STORM IS EXPECTED THIS WEEKEND. IT THREATENS TO DISRUPT NAVIGATION SYSTEMS AND KNOCKED OUT HIGH-FREQUENCY RADIOS AROUND THE WORLD.
THIS IS THE FIRST TIME SINCE 2005. MULTIPLE WAVES OF SOLAR ENERGY WILL BE BEARING DOWN ON THE PLANET. LATE FRIDAY PERSISTING THROUGH SUNDAY. COMING UP, THE SNAPCHAT CEO ON ALL THINGS SOCIAL MEDIA AS TIKTOK LOOMS. TSMC ON A TEAR. APRIL SALES JUMPED 60%. PERHAPS A BOTTOMING OUT IN THE GLOBAL INDUSTRY. IT IS PAYING OUT FOR THE WORLD'S LARGEST CONTRACT CHIPMAKER.
CAROLINE: ELON MUSK'S YOU TURN ON SUPERCHARGERS. THE COMPANY WILL SPEND OVER $500 MILLION TO GROW ITS CHARGING NETWORK THIS YEAR. TESLA FIRED 500 PEOPLE RUNNING THE CHARGING BUSINESS.
SOFTBANK HAS QUIETLY SOLD OFF BILLIONS OF DOLLARS OF A SSETS FROM VISION FUND. IT'S ALL ITS U.S. PORTFOLIO SHRINK. MICROSOFT ENTERS THE MOBILE GAMING ARENA. IT WILL LAUNCH ITS OWN VERSION OF A MOBILE GAME STORE BY JULY.
IT WILL OFFER DISCOUNTS ON IN GAME ITEMS. SNAP IS URGING THE GOVERNMENT TO DEVELOP A FRAMEWORK FOR DEALING WITH SOCIAL MEDIA COMPANIES. HERE'S PART OF WHAT HE HAD TO SAY AT OUR TECHNOLOGY EVENT IN SAN FRANCISCO. EVAN: FUN, FAST, VISUAL. THAT'S WHY WE'VE GROWN THROUGH
THE CHANGES. 800 MILLION PEOPLE. STAYING FOCUSED ON CLOSE RELATIONSHIPS THAT MEAN THE MOST TO US TO, ENRICHING THAT WITH STORIES, WITH A MAP. ALL THESE PRODUCTS HELP BRING PEOPLE CLOSE TOGETHER. THAT'S WHAT'S LED TO OUR ENDURING GROWTH. >> TIKTOK SPECIFIC POLL.
WHAT IS YOUR OPINION ON THE BAN? TOTALLY BANNED? EVAN: THAT'S PROBABLY A NO-BRAINER. EMILY: BUT REALLY. [LAUGHTER] EVAN: WHAT'S IMPORTANT IS WE COME UP WITH A DURABLE FRAMEWORK TO DEAL WITH NATIONAL SECURITY. THE U.S. HAS RECOGNIZED ISSUES BUT HAS BEEN DEALING WITH THEM AD HOC. THAT HAS IMPLICATIONS FOR THE ECONOMY. BUSINESSES IN THE U.S. HAVE A RELATIONSHIP WITH CHINA.
IT'S GOING TO BE IMPORTANT TO GET CLARITY AROUND WHAT THE GOVERNMENT THINKS IS OK. MAYBE THAT'S KIDS TOYS AND DIAPERS, NO PROBLEM. SENSITIVE TECH, CHIPS, THINGS THAT COULD BE USED IN WEAPONS -- PROBABLY NOT OK. THE SOONER THE GOVERNMENT CAN BE CLEAR, THE MORE STABILITY WE CAN HAVE AND WE CAN BETTER STRENGTHEN THE RELATIONSHIP. THE UNCERTAINTY IS TRICKY.
THE MORE THE GOVERNMENT CAN SHARE WILL BE HELPFUL. >> TIKTOK IS NOT BANNED YET. WHAT ARE YOU DOING TO TAKE ADVANTAGE OF UNCERTAINTY? EVAN: FOCUS ON OUR OWN BUSINESS. SHORT VIDEO. SPOTLIGHT. YOUTUBE SHORTS. INSTAGRAM REELS.
THERE ARE OPPORTUNITIES. WE FOCUS ON WHAT CREATORS LOVE ABOUT OUR PLATFORM, WHICH IS THE RELATIONSHIP THEY CONFORM WITH THEIR AUDIENCE. STORIES. WE REVENUE SHARE. CREATORS DON'T FEEL PRESSURE TO DO BRAND DEALS. THEY USE TOOLS LIKE SPOTLIGHT TO GET MORE DISTRIBUTION AND HELP PEOPLE DISCOVER THEM. THAT'S A UNIQUE VALUE
PROPOSITION. WE ARE GOING TO STAY FOCUSED. CAROLINE: COMING UP, DEEP DIVE INTO GRINDER, POT ON THE HEELS OF ITS OWN EARNINGS REPORT. SOUND HOUND AI, SHARES TRADING HIGHER 30%.
FIRST QUARTER REVENUE SMASHED EXPECTATIONS. THEY ARE ANNOUNCING SEVERAL NEW PARTNERSHIPS. CAROLINE: LET'S TALK EARNINGS WITH GRINDR SHOWING REVENUE GROWTH 35% YEAR-OVER-YEAR. GEORGE IS HERE WITH ME. STRONG SET OF NUMBERS.
GEORGE: WE HAVE WARRANTS. THEY ARE HELD AS A LIABILITY. WE HAVE OPERATING PROFIT. FROM THE BUSINESS PERSPECTIVE, WE DIDN'T LOSE MONEY. WE ARE INVESTING. CAROLINE: WHERE ARE YOU INVESTING? A LOT OF TECHNICAL INNOVATION. GEORGE: WE ANNOUNCED A NEW CHAT
ARCHITECTURE. CHATS WERE HOSTED LOCALLY ON YOUR DEVICE. WE'VE MOVED AWAY FROM THAT. WHEN I JOINED, WE DIDN'T HAVE A LONG-TERM. THERE ARE HUGE EXTENSION OPPORTUNITIES FOR THE PRODUCT.
AI WILL BE FIRST. PEOPLE EXPECT SOCIAL NETWORKS WILL DRIVE CONNECTIONS THROUGH AI. TODAY DATING PLATFORMS HAVEN'T FUNDAMENTALLY CHANGED. I THINK IT WILL CHANGE. CAROLINE:
AI CAN ALREADY UNDERSTAND THAT GEORGE: EVEN ACTIVITY FROM THE OUTSIDE OF THE APP. THERE IS SO MUCH INFORMATION. WHAT IF YOU UPLOAD TEXT MESSAGES, AND WE UNDERSTAND WHO YOU ARE? NOT SAYING WE ARE GOING TO DO THAT BUT THOSE ARE THE TYPES OF THINGS AI WILL ALLOW US TO DO. THERE IS A LOT OF DATING THAT HAPPENS ON THE APP THROUGH CONVERSATIONS. AS WE BUILD IT OUT, THERE'S A
HUGE OPPORTUNITY TO SKIP WHERE WE ARE TODAY AND GO DIRECTLY TO THE WORLD THAT IS COMING. CAROLINE: YOU HAVE TO HAVE A LOT OF COMMUNITY BY AN -- BUY IN. IN THE U.K., YOU HAVE BEEN SUED FOR WHAT YOU CLAIM IS MISCHARACTERIZATION OF THE WAY YOU WERE RUNNING THE BUSINESS.
WHEN THERE IS A CONCERN, HOW DO YOU PUSH FORWARD? GEORGE: PRIVACY IS PARAMOUNT. IN 60 COUNTRIES AROUND THE WORLD, BEING GAY IS ILLEGAL. WE REALLY NEED TO PROTECT USER PRIVACY. IT IS A MATTER OF LIFE AND
DEATH IN SOME RESPECTS. WE DO A LOT TO PROTECT PRIVACY. YOU CAN GET ON GRINDR WITHOUT GIVING YOUR PHOTO. WE HAVE NEVER SHARED ANY HIV OR ANY MEDICAL WITH ANY ADVERTISER EVER. THAT'S A COMPLETE MISCHARACTERIZATION OF WHAT WE
DO. WE'VE NEVER DONE IT. WE NEVER WILL. WE WILL FIGHT THE LAWSUIT. IT DOES NOT HAVE MERIT. WHATEVER THEY ARE SAYING MIGHT HAVE HAPPENED, WHICH IS TRUE, THEY ARE CLAIMING IT HAPPENED A LONG TIME AGO.
THIS IS A VERY DIFFERENT GRINDR TODAY THAN IT WAS IN '18. THAT'S IMPORTANT AS WELL. USERS HAVE TO TRUST US. THAT'S IMPORTANT FOR US. THAT'S WHY WE MAY PRIVACY SUCH A BIG DEAL. CAROLINE: YOU ARE HIRING AGAIN. GEORGE: WE ARE. WE HAVE A LOT OF ROLES OPEN.
CAROLINE: GEORGE, COME BACK. THANK YOU FOR TALKING US THROUGH. COMING UP, SHARES OF BUMBLE, KIND OF LINKED TO THE SPACE, UPGRADING THE COMPANY. UNDER PRESSURE BY 1% ON THE
DAY. CAROLINE: WELCOME BACK. MARKET SANGUINE ON THE BROADER BENCHMARK BUT THE NASDAQ 100 TURNING GREEN.
CONTEXT FROM THE FED SAYING WE KEEP RATES HIGHER FOR LONGER. ON THE FLIPSIDE, WEAKER CONSUMER SENTIMENT. WE ARE ON COURSE FOR THE BEST THREE WEEKS IN BENCHMARKS SINCE FEBRUARY. STOXX 600 ON A TEAR. EUROPE SEEING GAINS. THAT'S RAMPING.
10 YEAR YIELD UP FOUR BASIS POINTS. SOME SENSITIVITY TO FED SPEAK. ULTIMATELY, TSMC MOVES, UP 5%. ANOTHER GREAT MONTH. APRIL SHOWING REVENUE IS HIGHER. ONGOING AI DEMAND, GLOBAL
SMARTPHONES BOTTOMING OUT, SEEING RECOVERY IN REVENUE GROWTH. TESLA OFF BY 1.5%, WHETHER OR NOT IT'S THE FACT THAT WE ARE GETTING TOUGH TALK FROM THE U.S., MAYBE WE WILL SEE
INCREASED TARIFFS ON CHINESE EV'S. COULD THAT HURT TESLA? NVIDIA UP 1.4%. NVIDIA EARNINGS STILL TO COME.
ANOTHER KEY STOCK, AKAMAI, CURRENTLY FALLING. CAME IN LESS THAN WHAT THE MARKET WANTED TO SEE. THE CONTENT DISTRIBUTION SEEMS TO BE THE WEAKNESS.
SECURITY REVENUE WAS GOOD. COMPUTER REVENUE WAS GOOD. THE DELIVERY REVENUE IS UNDER PRESSURE. IS THAT WHAT IS HITTING THE FORECAST? >> EXACTLY RIGHT. INTERNET TRAFFIC INCREASES BUT NOT IN A STRAIGHT LINE. WE HAVE THE LARGEST CONTENT
DELIVERY NETWORK. WHEN THERE ARE DIPS, WE FEEL IT. WE DIVERSIFIED BEYOND DELIVERY. TWO THIRDS OF REVENUE, SECURITY AND COMPUTE. BOTH BUSINESSES ARE STRONG. GREAT GROWTH. GREAT POTENTIAL.
OVER TIME, MORE REVENUE FROM SECURITY AND COMPUTE, THE DIPS IN INTERNET TRAFFIC, WE WON'T SEE AS NOTICEABLY. CAROLINE: DIVERSIFICATION. MY INTEREST, A LARGE SOCIAL MEDIA CUSTOMER OPTIMIZING COST, AS TO WHY YOU DOWNGRADED OUTLOOKS. ARE WE SEEING THAT BROADLY OR IS IT ONE? TOM: WE HAVE A LARGE SOCIAL COMPANY. THEY ARE CUTTING BACK AS BEST THEY CAN, FACING SOME GEOPOLITICAL PRESSURES. BROADLY, WEAK PAST COUPLE MONTHS IN GAMING AND VIDEO.
REPORTS TALKING ABOUT SUBSCRIBER NUMBERS, TRAFFIC AS A WHOLE. WE FEEL THAT. WE CARRY ALL THE VIDEO OUT THERE. BIG FOR THE GAMING COMPANIES. THAT CREATES A DIP IN OUTLOOK FOR THE YEAR.
WE RAISED OUTLOOK ON SECURITY AND COMPUTE, BOTH VERY STRONG. CAROLINE: THE PERFECT PERSON TO ASK, READING BETWEEN THE LINES, GEOPOLITICALLY AFFECTED SOCIAL COMPANY HAS TO BE TIKTOK. I KNOW YOU HAVE EXPERTISE. HOW MUCH ARE YOU SEEING GEOPOLITICS WEIGHING ON YOUR BUSINESS? TOM: THERE IS CONCERN. WE MADE DISCLOSURE, IF THE LAW
TAKES EFFECT, THAT COULD IMPACT 1.5% OF OUR REVENUE NEXT YEAR. IT SHOULDN'T HAVE A DIRECT IMPACT THIS YEAR. REMAINS TO BE SEEN IF THE LAW WILL GO INTO EFFECT. CAROLINE: ARE YOU TRYING TO DIVERSIFY OUT OF EXPOSURE TO CHINA? TOM: WE WANT TO DIVERSIFY AS A WHOLE. SEVEN CUSTOMERS, 1% OF REVENUE. THE GOAL IS TO HAVE A BROADER BASE. WE'VE DONE A GOOD JOB ON THAT WITHIN THE CUSTOMER BASE AND ALONG CUSTOMER GEOGRAPHIES. HE WON'T SEE MUCH OF AN IMPACT
AS WE GO FORWARD WHEN THINGS HAPPEN ON THE POLITICAL STAGE OR YOU GET A DIP IN TRAFFIC. CAROLINE: WITH THE FOCUS ON SECURITY, WHERE ARE WE IN THE CYBER LANDSCAPE? WHERE IS IT BECOMING HARDER TO ENSURE WE ARE PROTECTED? TOM: THINGS ARE IN A CHALLENGED STATE, PARTICULARLY WITH THE ADVANCES IN GENAI, WHICH AS OF NOW ARE VERY HELPFUL TO THE ATTACKER. IT'S MUCH EASIER TO GENERATE MALICIOUS MALWARE. WE ARE SEEING MORE BREACHES. THE KEY NOW IS TO DEVELOP THE INTERNAL LAYER OF DEFENSE. PROBABLY YOU WILL GET BREACHED. THE KEY IS TO IDENTIFY QUICKLY
AND PROACTIVELY BLOCK THE SPREAD. WE HAVE THE MARKET-LEADING SOLUTION TO STOP THAT SPREAD. THAT'S A RAPIDLY GROWING SEGMENT FOR US. CAROLINE: THANK YOU SO MUCH.
I TALKED ABOUT AI AT OUR TECHNOLOGY EVENT. RENÉ JAMES WAS ON STAGE WITH ME TO DISCUSS THE STATE OF THE SEMICONDUCTOR INDUSTRY. >> I WORKED IN SEMICONDUCTORS A LONG TIME.
ONE OF THE UNEXPLORED AREAS WAS CONTINUING TO DELIVER PERFORMANCE BUT AT LOWER POWER. ONE OF THE THINGS WE HAVE THE LUXURY OF DOING IN THE EARLY DAYS OF HIGH-PERFORMANCE SEMICONDUCTORS WAS TO USE MORE POWER. MAKE THEM MORE POWERFUL. THEY GOT FASTER. MORE POWER. WE DON'T NEED TO START A COMPANY TO PROVE WE KNOW HOW TO MAKE SEMICONDUCTORS OR TO DO WHAT WE HAD DONE. WE WANTED TO PIONEER EFFICIENCY FRONTIER, THE KNIFE'S EDGE BETWEEN SUPER HIGH-PERFORMANCE AT LOWER POWER.
AT THE TIME IT MEANT LOW PERFORMANCE. PEOPLE WOULD THINK ABOUT IT LIKE, WE HAVE A LOW-POWER DEVICE. IS IT FOR A CELL PHONE? WHATEVER. NOWADAYS PHONES ARE SUPERPOWERFUL. WE ENDEAVORED TO BUILD PRODUCTS THAT COULD BE AIR COOLED. WE HAVE BEEN BUILDING MICROPROCESSORS FOR A LONG TIME.
WE KNEW ML AI WAS COMING. WE WERE THINKING ABOUT HOW MUCH POWER IT TAKES AND HOW ARE WE GOING TO BUILD THESE DATA CENTERS? WE HAD A TEAM THAT HAD WORKED TOGETHER ON THE FIRST DAYS OF HYPER SCALARS. WE KNEW HOW BIG THEY WERE GETTING AND HOW MUCH POWER, THE COMBINATION. THAT WAS OUR THESIS. YOU CAN DO THIS AT LOWER POWER. IN A WAY THAT ENABLES ALL THESE WORKLOADS AND STAY AIR COOLED, WHICH MEANS YOU DON'T HAVE TO BUILD A BRAND-NEW DATACENTER FOR COOLING AND YOU CAN STAY WITHIN THE ENVELOPE -- THINK ABOUT BEING LANDLOCKED. WHEN YOU BUILD A DATACENTER, YOU HAVE CERTAIN POWER. HOW DO YOU UPGRADE TO BETTER
COMPUTE? CAROLINE: IT'S A NEW CHIP COMPANY. IT'S MAKING INROADS. 28 YEARS AT INTEL BEFORE STARTING HER OWN. INDEX VENTURES, COMING UP. THE TAKE ON AI INVESTING TRENDS. THAT'S NEXT. ♪ >> '24 WILL BE A MONUMENTAL YEAR FOR AI.
>> THE CURRENT GENERATION IS STILL IN THE $100 MILLION RANGE. ALL OF THIS CAN SCALE TO $100 BILLION. >> IT'S A NATIONAL SECURITY HAZARD. >> WE'RE TRYING TO BE THE MOST RESPONSIBLE ACTORS. WHAT ARE THE POTENTIAL EXTERNALITIES THAT COULD BE CAUSED ACCIDENTALLY BY THIS? >> I WORRY ABOUT THE OVERHYPING. THAT'S BLOWN OUT OF CONTROL.
>> TODAY EVERY SINGLE COMPANY HAS TO BUILD THEIR OWN AI, OTHERWISE THEY RUN THE RISK OF BEING LEFT BEHIND. GET THE THEME? ACROSS EVERY CONVERSATION YESTERDAY AT THE BLOOMBERG TECHNOLOGY EVENT. LET'S KEEP IT GOING. NINA JOINS US FOR TODAY'S VC SPOTLIGHT. YOU'VE BEEN BUSY. NINA: THERE IS A TALE OF TWO CITIES. AI COMPANIES CAN RAISE IN THE 100 X MULTIPLE BUT NOT, 10.
THERE'S A HUGE DISCREPANCY. CAROLINE: WHERE DO YOU SEE VALUE IN AI INVESTMENTS? NINA: THE BASICS. IS THIS COMPANY BUILDING SOMETHING? WE ARE SEEING THAT A LOT IN THE APPLICATION LAYER. WE INVESTED IN THIS COMPANY. THEY BUILD SOFTWARE FOR
INDUSTRIAL DESIGNERS. ANYONE THAT HAS TO DESIGN A CAR, FURNITURE. THEY USE AI TO HELP THESE DESIGNERS ACCELERATE THEIR PROCESS. THEY HAD INTEREST EARLY ON FROM FORD AND NEW BALANCE.
THOSE ARE AREAS WE FIND ATTRACTIVE. CLEAR CUSTOMER, CLEAR ROI. CAROLINE: MANY ENTREPRENEURS ARE INTERESTED IN HOW THEY GET YOUR INTEREST. HOW DO YOU FIND OUT? NINA:
IT'S ALL ABOUT INVESTING IN PEOPLE. WE TRY TO BUILD RELATIONSHIPS EARLY. SOMETIMES WHEN THEY ARE AT THEIR CURRENT JOB OR THROUGH A NETWORK WE HAVE. WE MEET PEOPLE IN DIFFERENT AVENUES. EVENTS, REFERRALS, JUST OUTBOUND. WE ARE ALWAYS OPEN. CAROLINE: WHERE ARE SOME OF THE OTHER USE CASES OF AI PEAKING YOUR APPETITE? LOOK AT THE BACKLASH TO APPLE'S AD. WHERE ELSE IS AI AND GENAI REAPING REWARDS FOR COMPANIES? NINA: THE COGENERATION SPACE HAS BEEN AN AREA PEOPLE HAVE TALKED ABOUT.
MANY COMPANIES HAVE POPPED UP. THAT IS AN OBVIOUS USE CASE. EVEN FORTUNE 500S ARE PUTTING DOWN COMMITMENTS TO TRY OUT NEW SOFTWARE'S. AUGMENT AND OTHERS. WE ARE EXCITED. THINK ABOUT ANYBODY USING PEN AND PAPER. THAT IS RIGHT FOR THE USE OF AI. NOW TO MAKE SENSE OF THE DATA AND INTEGRATE INTO YOUR WORKFLOW, SOMETHING THAT WILL ACCELERATE WHAT YOU ARE TRYING TO DO. CAROLINE:
THAT SPARKS MY CONVERSATION BACK TO YESTERDAY. ULTIMATELY, A LOT OF COMPANIES ARE RUNNING OUT OF MONEY. IS THIS SOMETHING YOU ARE SEEING? NINA: ABSOLUTELY. WE WILL SEE A LOT OF CONSOLIDATION. EVERYONE TALKS ABOUT THE WAR FOR TALENT WITHIN AI. IT IS NOT SUSTAINABLE THESE COMPANIES CAN EXIST AT HIGH VALUATIONS. WE SAW THAT EARLY ON WITH
MOSAIC. THE MICROSOFT PARTNERSHIP. WE WILL SEE MORE OF THAT OVERTIME. HOPEFULLY ONE PLUS ONE WILL EQUAL GREATER THAN TWO. CAROLINE: THE INFLECTION- MICROSOFT DEAL WAS EXTRAORDINARY. NINA: WE WERE ALSO SCRATCHING OUR HEADS ON IT. IT COMES DOWN TO ACQUISITION OF
TALENT. FOR COMPANIES THAT HAVE RAISED MONEY, THEY ARE STRUGGLING TO FIND THAT FIT. THEY COULD BE ATTRACTIVE MOVING FORWARD. CAROLINE: WHERE ELSE IF NOT AI? NINA: I THINK THIS TRANSITION FROM DOING THINGS MANUALLY TO DIGITIZING THEM IS IMPORTANT FOR THESE MASSIVE INDUSTRIES. THERE'S A COMPANY I INVESTED IN. THEY ARE TRYING TO BE THE WORKDAY FOR THE AGRICULTURE INDUSTRY. RIGHT NOW YOU HAVE TO DO A LOT OF PAPERWORK, DIGITAL ONBOARDING MANUALLY.
DOING THINGS LIKE THAT, HELPING HUGE INDUSTRIES TO TRANSFORM IS HUGE. CAROLINE: WISH WE COULD TALK MORE. NINA: THANKS. CAROLINE: GOOD TO HAVE YOU HERE. LET'S GO BACK TO THE BLOOMBERG TECH EVENT HELD IN THE CITY YESTERDAY.
THE ATTEMPTS TO WIN BACK WE WORK. >> WE'RE IN THE MIDDLE OF IT. JUST TO EXPAND, OUR BID WAS $650 MILLION.
THAT SEEMS TO BE THE ONE THEY ARE CONSIDERING TO CONFIRM AT THE END OF THE MONTH. IT'S A DIFFERENCE OF $250 MILLION. I WILL EXPLAIN. IN BANKRUPTCY, I DIDN'T THINK IT WAS A COMPETITION. >> THAT IS A LINE IN YOUR BRIEF. >> YES. I THOUGHT IT WAS WHOEVER'S GOING TO GIVE THE BEST OFFER. WHAT IS THE OTHER OFFER? WHAT'S THE PLAN? THEY SHOW A PLAN. THEY GIVE NUMBERS.
THE PLAN SAYS THE NUMBERS ARE EASY TO TRACK. THE TWO NUMBERS THE CURRENT PLAN IS FORECASTING WOULD BE THE HIGHEST NUMBERS WE HAVE SEEN SINCE 2019, WHICH IS AS FAR AS WE CAN GO. TO ACHIEVE THOSE NUMBERS BY THE END OF THE YEAR, THE PROFIT MARGIN, MARGIN OF THE BUILDINGS, WOULD HAVE TO GO FROM 16% MARGIN, THE LAST NUMBER WE SAW ALL RIGHT BEFORE WE DECLARED BANKRUPTCY, TO 24%. THAT IS 50% GROWTH IN MARGIN BY THE END OF THE YEAR.
>> THIS IS UNDER THEIR PLAN? IT COULD BE HYPERBOLIC. >> I'M SAYING IT IS UNFEASIBLE. >> DON'T THE CREDITORS HAVE A LEGAL REQUIREMENT TO TAKE THE BEST DEAL? YOU SAID IT'S NOT A POPULARITY CONTEST. IF IT WAS, IF THEY LOOKED AT YOUR DEAL AND HAD A LEGAL REQUIREMENT, SELF-INTERESTED, TO TAKE THE BEST DEAL, WHY DO YOU THINK THEY BYPASSED? >> WE ARE DOING TECHNICAL. >> I DON'T THINK IT'S TECHNICAL. >> IT IS. THE REAL QUESTION IS, IS THE JUDGE OBLIGATED TO TAKE THE BEST DEAL OR DOES THE JUDGE GET TO CHOOSE? LET'S SAY SOMETHING ELSE, FROM 16% TO 24%, 50% GROWTH IN ONE YEAR, WITHOUT SPENDING ANY MONEY ON A BUSINESS THAT NOW HAS AGING -- AND WHAT I THINK IS ONE OF THE WORST OFFICE MARKETS IN HISTORY, NOT JUST IN SAN FRANCISCO. IT'S A GLOBAL PHENOMENON.
IF THEY ACHIEVE THESE ROSY >> ♪ ALL I EVER NEED IS YOU ♪ ♪ CAROLINE: GOING VIRAL. PART OF APPLE'S RECENTLY PULLED ADVERTISEMENT. THE COMPANY FACING BACKLASH ONLINE AFTER THE AD FEATURED TOOLS BEING CRUSHED UNDER AN IPAD.
APPLE ISSUED A DIRECT APOLOGY SAYING IT WILL NOT AIR THE AD ON TV AS PLANNED. LET'S TALK ABOUT HEALTH CARE. HUGE ACQUISITION, ORACLE, TWO YEARS AGO. INTERVIEWS OF CURRENT AND FORMER EMPLOYEES SHOW THAT THEY HAVE LOST A DOZEN LARGE CLIENTS. THEY ARE ALL IN ON HEALTH CARE BUT THE CLIENTS DON'T LIKE IT TIED TOGETHER? >> IT'S HARD NOT TO LOOK AT THE HEALTH CARE SYSTEM IN AMERICA AND SAY, SOMETHING IS NOT RIGHT HERE. WE COULD FIX THIS. APPLE, GOOGLE, ORACLE. CONSISTENTLY THEY FOUND THIS IS TOUGH TO DISRUPT. ORACLE SAID WE CAN BUY THIS
COMPANY, IF YOU ARE AT THE DOCTOR'S OFFICE, THEY ARE TAKING NOTES, ALL THE SOFTWARE FOR MEDICAL FACILITIES, THEY RUN THAT, THEY SAID WE COULD INTEGRATE THIS, PUT IT ON THE CLOUD, MAKE IT RUN EASIER, GENAI -- TURNS OUT IT IS HARD. IT'S BEEN TOUGH. THEY HAVEN'T MADE THE PROGRESS THEY WANTED. THE COMPANY THEY BOUGHT WAS ON
A DOWNWARD TRAJECTORY. THIS IS NOT ALL ORACLE. IN THE TWO YEARS, REVENUES DOWN, CUSTOMERS LEFT, THEY FIRED 3000 PEOPLE. IT'S BEEN TOUGH GOING. THEY THOUGHT INITIALLY, THIS IS GOING TO BOOST EARNINGS, REVENUE GROWTH. EXCLUSIVE FINANCIALS. THIS HASN'T BEEN THE CASE. CAROLINE: THE MOVE TO NASHVILLE? >> IT'S HARD TO SAY. I SAW SOME DOCUMENTS, WHEN THEY MOVED TO TEXAS, MORE PEOPLE ARE STILL IN CALIFORNIA.
IS THE HEADQUARTERS A STATE OF MIND? WE DON'T KNOW. CAROLINE: NASHVILLE IS A STATE OF MIND. THANK YOU FOR BEING WITH US. WE ARE GOING BACK TO NEW YORK. DO NOT FORGET TO CHECK OUT THE PODCAST. RELIVE SO MUCH OF THE
2024-05-11 18:46
