The Presidential Debate and Apple's Business in China | Bloomberg Technology
>> FROM THE HEART OF WHERE MONEY AND POWER COMBINE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY, WITH CAROLINE HYDE AND DAN LUDLOW. ED: I'M ED LUDLOW IN SAN FRANCISCO. CAROLINE HYDE IS OFF. COMING UP, WE HAVE FULL COVERAGE OF THE FIRST PRESIDENTIAL DEBATE AND DISCUSS THE STATE OF CRYPTO WITH THE FORMER REPUBLICAN PRESIDENTIAL HOPEFUL VIVEK RAMASWAMY. PLUS, WE BREAK DOWN APPLE'S BUSINESS IN CHINA. AND A NEW SURVEY SHOWS TESLA
DESIGN CHANGES ARE CONFUSING CUSTOMERS AND UNDERCUTTING ITS QUALITY. WE DISCUSS THAT AND SO MUCH MORE THROUGH THE HOUR. HAPPY FRIDAY. LET'S GET RIGHT TO FINANCIAL MARKETS. THE S&P 500 AT AN ALL-TIME HIGH. IT IS BRIEFLY BREACHING THE 20,000 MARK FOR THE FIRST TIME. YIELDS A LITTLE HIGHER. BITCOIN HAD A RISK ON SENTIMENT. SOFTER BY A PERCENTAGE POINT.
THE MAIN FACTOR IN THE MARKETS THIS MORNING IS NOT THE FIRST PRESIDENTIAL DEBATE, AT THE PCE READING DECELERATING. THE PCE BEING THE FED'S PREFERRED GAUGE OF INFLATION. THAT IS THE DISCUSSION ON THE WEEK. I ALSO WANT TO TAKE A LOOK AT ONE SPECIFIC NAME IN THE CONTEXT OF WHAT WE ARE ABOUT TO TALK ABOUT, WHICH IS THE PRESIDENTIAL DEBATES, AND THAT IS TRUMP MEDIA TECHNOLOGY GROUP. THIS MORNING, WE TRADED SIGNIFICANTLY HIGHER.
YOU CAN SEE WE ARE NOW DOWN 6/10 OF A PERCENT. THIS IS THE PARENT COMPANY OF TRUE SOCIAL, THIS IS A COMPANY WITH TIES TO DONALD TRUMP. LET'S GET A RECAP OF THE PRESIDENTIAL DEBATE HOSTED BY CNN. PRES. BIDEN: THERE IS MORE TO BE DONE. PEOPLE ARE STILL IN TROUBLE. MR. TRUMP: HE HAS DONE A POOR JOB AND INFLATION IS KILLING THE COUNTRY. IT IS KILLING US. PRES. BIDEN: THE PRICE OF GAS, THE PRICE OF HOUSING -- WE HAVE BEEN WORKING HARD TO DEAL WITH THOSE PROBLEMS. I WAS IN FRANCE FOR
THE DAY AND I SPOKE TO ALL THE HEROES WHO DIED. -- I SPOKE ABOUT ALL THE HEROES WHO DIED. I WENT TO THE CEMETERY IN WASHINGTON.
HE REFUSED TO GO THERE. HE TOLD ME, I DON'T WANT TO GO IN BECAUSE THERE ARE LOSERS AND SUCKERS. I SUN WAS NOT A LOSER OR A SUCKER. MR. TRUMP: NOBODY HAS TAKEN BETTER CARE OF OUR SOLDIERS THAN I HAVE.
THE MONEY WE ARE SPENDING ON THIS MORE -- IT SHOULD HAVE NEVER HAPPENED. I WOULD HAVE THE WAR SETTLED AS PRESIDENT-ELECT. BEFORE I TAKE OFFICE ON JANUARY 20, I WILL HAVE THE WAR SETTLED. IF WE HAD A PRESIDENT THAT WAS RESPECTED, HE WOULD HAVE NEVER INVADED UKRAINE. ISRAEL WOULD HAVE NEVER BEEN
INVADED IN A MILLION YEARS BY HAMAS. YOU KNOW WHY? IRAN WAS BROKE WITH ME. I WOULD NOT LET ANYBODY DO BUSINESS WITH THEM. PRES. BIDEN: THE NATIONAL SECURITY COUNCIL TO NETANYAHU HIMSELF -- THE ONLY ONE WHO WANTS THE WAR TO CONTINUE IS HAMAS. MR. TRUMP: IN ROE V. WADE, YOU HAVE LATE-TERM ABORTION.
DEPENDING ON THE STATE, YOU CAN DO WHATEVER YOU WANT. WE DON'T THINK THAT IS GOOD. WE THINK IT IS A RADICAL THING. WE THINK THE DEMOCRATS ARE RETICLES, NOT REPUBLICANS. BUT SPAM IT IS A TERRIBLE THING YOU ARE DOING. THE VAST MAJORITY OF AMERICANS SUPPORTED ROE AND SUPPORT ROE.
THE IDEA THEY ARE AGAINST IT IS RIDICULOUS. MR. TRUMP: I TOOK TWO TESTS, COGNITIVE TESTS. I ACED THEM. I JUST WON TWO CLUB CHAMPIONSHIPS. ED: KAILEY LEINZ JOINS US WITH MORE FROM THE SEA I WANT TO REDO THE HEADLINE OF THE MOST READ STORY ON BLOOMBERG.
BIDEN'S DISASTROUS DEBATE ACCELERATES DOUBTS OVER THE CANDIDACY. LET'S START WITH HOW POORLY BIDEN IS PERCEIVED TO HAVE PERFORMED RELATIVE TO TRUMP IN THAT DEBATE. KAILEY: INCREDIBLY POORLY. LAWMAKERS, POLITICAL STRATEGISTS, SAYING THAT THIS MORNING JOE BIDEN, AND 81 YEARS OLD, SHOWED HE IS AN OCTOGENARIAN PRESIDENT. THE WHITE HOUSE HAS SAID HE WAS BATTLING A COLD WHEN HIS VOICE WAS RASPY.
AT ONE POINT, HE SAID THAT HE BEAT MEDICARE, NOT ADEQUATELY ARTICULATING HIS OWN POLICY, WHICH GAVE TRUMP OPPORTUNITIES TO ATTACK. DONALD TRUMP SEEMED MORE ENERGETIC, FOCUSED, UNCHARACTERISTICALLY SO. WORKING WITHIN THE FORMAT OF THIS DEBATE, WHICH WAS MICS CUT OFF, LACK OF A LIVE STUDIO AUDIENCE, THINGS THAT WERE THOUGHT TO HELP BIDEN MORE. THEY ACTUALLY TURNED OUT TO BE ADVANTAGEOUS TO DONALD TRUMP.
THAT SAID, DONALD TRUMP LIED REPEATEDLY ON THINGS LIKE STATISTICS, LIKE THE LOWEST BLACK UNEMPLOYMENT RATE. THAT HAPPENED DURING THE BIDEN ADMINISTRATION. HE SAID THAT TARIFFS WOULD NOT CAUSE HIGHER INFLATION, SOMETHING ALMOST EVERY ECONOMIST WE SPEAK TO WOULD DISPUTE. HE INSISTED HE DID NOT SAY THINGS HE HAS SAID ON TAPE ABOUT THE OUTCOME OF THE ELECTION. HE WAS NOT FACT CHECKED BY MODERATORS. JOE BIDEN WAS STRUGGLING TO
FACT CHECK HIMSELF AND REPEATEDLY CALLED HIM OUT FOR LYING SEVERAL TIMES. HE COULD NOT ARTICULATE WHAT THE TRUTH OF THE MATTER WAS. IT WAS A DIFFICULT NIGHT FOR JOE BIDEN. THERE IS A LOT OF TALK IN WASHINGTON, INCLUDING WITHIN THE AQUATIC PARTY, AS TO WHETHER HE CAN GO FORWARD AS THE NOMINEE. ED: THE PLACEMENT OF THE DEBATE AS WELL AS THE WORDS JOE BIDEN ON GOOGLE TRENDS IS INTERESTING. UNSURPRISINGLY, ALL OF THE
NAMES INVOLVED ARE TRENDING ON THE PLATFORM FORMERLY KNOWN AS TWITTER. WE HAVE WOKEN TO A WORLD THIS MORNING PERHAPS DIFFERENT TO WHAT WE EXPECTED. WE ARE DEBATING PRESIDENT TRUMP' AS CANDIDACY AND WHAT MIGHT HAPPEN NEXT. IT IS A LONG WAY TO GO TO THE
NEXT DEBATE IN SEPTEMBER. WHAT ARE YOU HEARING IN WASHINGTON, D.C.? KAILEY: THERE IS AN IDEA, CONSIDERING THIS WAS A VERY EARLY DEBATE -- IT HAPPENED IN JUNE BEFORE TRUMP OR BIDEN ARE OFFICIALLY THE NOMINEES -- THEY ARE STILL PRESUMPTIVE NOMINEES. THERE ARE QUESTIONS ABOUT
WHETHER THERE MIGHT BE AN OPEN CONVENTION. THAT IS A DECISION ONLY PRESIDENT BIDEN IS ABLE TO MAKE. THE DELICATES PLEDGED TO HIM HAVE TO REMAIN SO AND LESS HE DECIDES TO DROP OUT OF THE RACE AND ALLOWS THEM TO CAST THEIR VOTES FOR SOMEONE ELSE. THAT IS A DECISION THAT THE PRESIDENT AND THOSE CLOSE TO HIM, INCLUDING JILL BIDEN, WILL HAVE THE MAKE. THAT IS A CONVERSATION
HAPPENING IN WASHINGTON. A NUMBER IN THE SPIN ROOM FOR THE AYDEN CAMPAIGN THOUGHT THIS COULD BE SOMEONE WHO WAS THE NOMINEE INSTEAD OF HIM -- GOVERNOR NEWSOM, WHO WAS SWARMED AFTER THE DEBATE. HE SAID JOE BIDEN IS GOING TO BE THE NOMINEE. OTHER POTENTIALS LIKE GRETCHEN WHITMER SAID THE SAME WITHIN THE LAST 24 HOURS.
IT IS A DIFFICULTY THE DEMOCRATIC PARTY AT-LARGE IS FACING AS DONALD TRUMP DOES SEEM TO BE EVEN FURTHER AHEAD IN THIS RACE. ED: WHAT I SEE ON SOCIAL MEDIA BEYOND THE MEMES AND ENDLESS CLIPS IS A FRUSTRATION FROM AMERICAN VOTERS THAT THEY DID NOT LEARN ANYTHING. THERE WAS NO ANSWER TO MANY OF THE QUESTIONS POSED. THIS IS GOING INTO A PRESIDENTIAL CAMPAIGN. KAILEY:
FREQUENT A, THEY DID NOT ANSWER THE QUESTIONS DIRECTED AT THEM AND CHANGE TO ENTIRELY DIFFERENT SUBJECTS. YOU SAW SOCIAL MEDIA IN A TIZZY. DEMOCRATS EXPRESSING DESPERATION WITH THE PERFORMANCE OF JOE BIDEN. THIS CALLS INTO QUESTION HOW THE U.S. ENDED UP WITH THESE TWO AS CANDIDATES.
WE KNOW THAT VOTERS ARE UNHAPPY. THEY ARE HOPING FOR ANY OTHER CHOICE, IT IS WHY YOU ARE SEEING THIRD PARTY CANDIDATES LIKE RFK JUNIOR. THERE IS A LOT OF FRUSTRATION. VOTERS HEARING ABOUT ISSUES THAT WE HEARD THAT JOE BIDEN WAS PLANNING TO HIT ON, LIKE ABORTION -- AT ONE POINT, TALKING ABOUT ABORTION SPIRALED INTO A STORY ABOUT IMMIGRATION AND A WOMAN WHO WAS MURDERED, AND IT GOT VERY CONFUSING AT TIMES. IT WAS DIFFICULT FOR POLICY TO BREAKTHROUGH FOR EITHER OF THESE CANDIDATES.
DONALD TRUMP WAS ASKED REPEATEDLY IF HE WOULD ACCEPT THE RESULT OF THIS ELECTION NO MATTER WHAT THE OUTCOME WAS. HE WOULD NOT GIVE A STRAIGHT YES OR NO ANSWER. ED: THAT IS KAILEY LEINZ OUT OF WASHINGTON, D.C.
GREAT TO HAVE WITH YOU AFTER A LATE NIGHT FOR YOU. A SURPRISE FOR MANY AS THE WORLD WOKE UP THIS MORNING. WE WILL KEEP THE CONVERSATION GOING, BECAUSE WE WILL BE JOINED BY VIVEK RAMASWAMY FOR HIS TAKE. THE VIC RAMASWAMY IS CLOSE TO THE TRUMP TEAM, AND ADVISING ON SOME AREAS OF TECHNOLOGY. THIS IS BLOOMBERG TECHNOLOGY.
ED: LET'S BREAK DOWN THE PRESIDENTIAL DEBATE FROM LAST NIGHT WITH VIVEK RAMASWAMY. HE JOINS ME NOW FROM ATLANTA. GOOD MORNING TO YOU. WE ARE A TECHNOLOGY SHOW. I HAVE WANTED TO ASK YOU TO COME ON FOLLOWING THE DEBATE BECAUSE OF YOUR BACKGROUND, BECAUSE OF THE REPORTING OF YOUR RELATIONSHIP WITH FORMER PRESIDENT TRUMP AND THE TRUMP CAMPAIGN TEAM. WE SHOULD TALK ABOUT LAST NIGHT. THE FLOOR IS YOURS. YOUR REACTION TO THAT DEBATE? VIVEK: I WAS IN ATLANTA LAST NIGHT. I AM BACK TO MY HOME IN COLUMBUS TODAY.
THIS WAS SAID FOR THE UNITED STATES OF AMERICA, TO SEE THE CURRENT PRESIDENT, JOE BIDEN, AND THE MENTAL STATE THAT HE IS ACTUALLY IN. IT WAS A LOT OF JOKE TALKING ABOUT DRUG TESTING. HE LOOKED LIKE HE HAD A LOBOTOMY. THAT IS A SAD THING. WHEN YOU THINK ABOUT THE COUNTRY WITH LEADERS LEADING COMPANIES IN THE PRIVATE SECTOR, TO SEE THE PERSON WHO IS LEADING THE FEDERAL GOVERNMENT BE AS HE WAS YESTERDAY IS REALLY AN INDICTMENT OF THE MODERN DEMOCRATIC PARTY. ED: MAY I JUMP IN? IT IS INTERESTING THAT YOU RAN AS A PRESIDENTIAL CANDIDATE FOR THE REPUBLICAN PARTY. YOU ARE REPRESENTING FORMER PRESIDENT TRUMP BUT YOU STARTED SPEAKING ABOUT PRESIDENT BIDEN'S PERFORMANCE.
MANY FRUSTRATED THAT WE DID NOT HEAR ANY ANSWERS TO THE QUESTIONS POSED FORMER PRESIDENT TRUMP ABOUT WHAT HE WOULD DO IF REELECTED, WHAT SOME OF HIS POLICY PLATFORMS WERE. WHAT DID YOU LEARN ABOUT WHAT FORMER PRESIDENT TRUMP MIGHT DO, WERE HE TO BE REELECTED TO THE WHITE HOUSE? VIVEK: I THINK THE NUMBER ONE MOST SALIENT THING ABOUT THE DEBATE WAS THE SURPRISE OF BIDEN'S PERFORMANCE, WHICH IS WHY I COMMENTED ON IT IN RESPONSE TO YOUR QUESTION. I AGREE IT IS MORE IMPORTANT TO TALK ABOUT THE POLICY VISION OF WHO IS LIKELY TO BE THE NEXT PRESIDENT, WHO IS DONALD TRUMP. HE TALKED ABOUT THE REVIVAL OF AMERICAN SUCCESS. THE FACT OF THE MATTER IS PRESIDENT TRUMP DEMONSTRATED THAT DESPITE BEING A MEMBER OF A DIFFERENT ECONOMIC CLASS THAN MOST AMERICANS, AS A BILLIONAIRE, HE IS STILL SOMEONE WHO UNDERSTANDS THAT PRICES HAVE GONE UP, WHAT WAGES HAVE REMAINED FLAT.
THINK THAT PART REALLY LANDED. I WISH THE DEBATE HAD GONE INTO GREATER DEPTH ON POLICY. IF BIDEN HAD SHOWN UP WITH GREATER MENTAL ACUITY, HE MIGHT HAVE HAD THAT OPPORTUNITY. THAT STOPPED THE DEBATE FROM BEING AS USEFUL AS IT COULD. WHAT WE LEARN FROM THIS AND THE COMMON NATION OF SPEECHES THAT PRESIDENT TRUMP HAS GIVEN -- ECONOMIC GROWTH IS A CORE OBJECTIVE.
THAT IS NOT A LEFT OR RIGHT LEANING MESSAGE. ECONOMIC GROWTH IS A WORTHY OBJECTIVE, FROM BRINGING DOWN THE TAX INTO DRILLING FOR OIL AND NATURAL GAS AND INCREASING THE SUPPLY OF ENERGY TO BRING DOWN COSTS. THOSE ARE CORE ISSUES THAT I THINK MATTER NOT ONLY TO BUSINESS OWNERS AND ECONOMICALLY MINDED VOTERS -- IT MATTERS TO ALL VOTERS. THAT WAS ONE OF THE MORE POWERFUL THINGS THAT CAME OUT OF LAST NIGHT, WAS A DISCUSSION OF THE ECONOMIC VISION FOR THE LAST FOUR YEARS. ED: MAY I POINT OUT WHAT YOU SENT ON PRICES AND WAGE INFLATION? IS THAT PRICES HAVE GONE UP BUT WAGES HAVE REMAINED FLAT. THAT IS NO LONGER TRUE. WE SAW INFLATION IN MAY DOWN
FRACTIONALLY. BUT WAGES WERE UP 0.7%. I JUST WANT TO GET THE LATEST DATA OUT THERE. VIVEK: LET ME COMMENT IN DIRECT RESPONSE TO YOU. YOU ARE A NUMBERS GUY. I LIKE THAT. AS I BELIEVE YOU WELL KNOW, INFLATION IS CUMULATIVE.
THAT IS THE INFLATION RATE. BUT INFLATION OVER THE COURSE OF THE LAST SEVERAL YEARS, LOOKING AT MANY CONSUMER GOODS AND PRODUCTS, WERE UP MORE THAN 50% SINCE THE TIME BIDEN TOOK OFFICE. HOW MUCH DOES A CARTON OF EGGS COST? HOW MUCH IS YOUR ELECTRIC BILL? THOSE ARE HIGHER THAN WHEN JOE BIDEN TOOK OFFICE.
WAGES HAVE NOT GONE UP AT THE SAME RATE. I DON'T WANT TO PLAY VERBAL JIU-JITSU OVER LAST MONTH'S NUMBERS. THOSE ARE IN DISPUTE WILL FACTS. MOST AMERICANS WHO PAY THOSE BILLS ALREADY HAVE AN UNDERSTANDING OF THAT. I THINK THAT WILL BE A GUIDING FORCE. ED: YOU AND I BOTH AGREE ON ONE THING, WHICH IS ABOUT TECHNOLOGY AND POLICY BEING INTERESTING. YOU MENTION TECHNOLOGY AND OIL. ONE OF THE THINGS I REPORTED IS THAT YOU ACTED AS ALMOST AN INTERMEDIARY BOTH BETWEEN FORMER PRESIDENT TRUMP AND ELON MUSK. IT SEEMS AS THOUGH THE FORMER
PRESIDENT AND ELON MUSK SPEAKING OR HAVE SPOKEN. WHERE DO YOU SEE THEM FINDING MIDDLE GROUND IF PRESIDENT TRUMP WERE TO RETURN TO THE WHITE HOUSE? VIVEK: I RESPECT THE TWO OF THEM INDIVIDUALLY AS PEOPLE WHO HAVE SUCCEEDED IN THIS COUNTRY THROUGH THE PRIVATE SECTOR. I THINK WE ALL SHARE A BELIEF THAT WE NEED MORE OF THOSE VOICES IN AMERICAN POLITICS, DRIVING CHANGE, NOT AS PROFESSIONAL POLITICIANS, BUT PEOPLE WHO LOOK AT POLITICAL PROBLEMS THROUGH THE LENS OF AN ENTREPRENEUR AND BUSINESS LEADER, OBJECTIVELY. I THINK THAT IS A BASIS FOR THE FRIENDSHIP WITH BOTH OF THEM. THE REALITY IS ONE OF THE THINGS WE ARE ALL ROOTING FOR IS NOT ONLY ECONOMIC REVITALIZATION OF THE U.S., BUT A REVITALIZATION OF INNOVATION IN THE UNITED STATES OF AMERICA. I THINK WE HAVE SEEN A DECLINE
IN THE RATE OF INNOVATION IN THE U.S. THAT IS ULTIMATELY OUR COMPETITIVE ADVANTAGE IN THE END, IS THE INNOVATIVE SPARK OF STARTING THE GREATEST COMPANIES KNOWN TO MANKIND, GENERALLY HERE IN THE UNITED STATES. THAT HAS BENEFITS OF CREATING JOBS AND CREATING WEALTH, BUT IT IS ALSO THE FOUNDING SPARK OF AMERICAN EXCEPTIONALISM. OUR FOUNDING FATHERS WERE THE
LIKES OF THOMAS JEFFERSON, NOT ONLY WROTE THE DECLARATION OF INDEPENDENCE -- HE INVENTED THE SWIVEL CHAIR AND THE POLYGRAPH TEST. REGIMENT FRANKLIN. I THINK OF ELON MUSK AS A MODERN GERMAN FRANKLIN WHO INVENTED THE LIGHTNING ROD IN THE FRANKLIN STOVE. THESE WERE ALSO PEOPLE WHO LEAD THE COUNTRY POLITICALLY AND SET IT INTO MOTION. I THINK WE HAVE A CHANCE TO REVIVE THAT 1776 KIND OF SPIRIT. I THINK THERE IS A ROLE FOR A MODERN WASHINGTON, A MODERN JEFFERSON, A MODERN BENJAMIN FRANKLIN. IN MANY WAYS, PRESIDENT TRUMP IS STEPPING UP TO BE THE MODERN GEORGE WASHINGTON. ELON MUSK ARE MINDS ME OF
BENJAMIN FRANKLIN. WE FOUND COMMON CAUSE IN OUR LOVE OF THIS COUNTRY TO REVITALIZE THIS FOUNDING SPIRIT, EVEN THOUGH EACH OF US HAVE HAD OUR OWN SUCCESSES SEPARATELY IN THE PRIVATE SECTOR. I AM BIASED. I HAVE A VIEW THAT WE NEED MORE OF THOSE PEOPLE STEPPING UP AND DEFINING THE FUTURE OF OUR POLITICS. ED: CAN I ASK VERY QUICKLY AS A MATTER OF CHECKING -- HAVE YOU SPOKEN TO THE FORMER PRESIDENT SINCE LAST NIGHT? VIVEK: I HAVE NOT SPOKEN TO HIM SINCE LAST NIGHT, NO. ED: THE REASON I ASK IS ABOUT YOUR ROLE WITH HIM, HIM DIRECTLY AND ALSO HIS TEAM. ONE OF THE AREAS OF REPORTING
FOCUS HAS BEEN DISCUSSIONS YOU MAY HAVE HAD WITH HIM AROUND CRYPTO AND THE ROLE CRYPTO MAY PLAY IF FORMER PRESIDENT TRUMP RETURNS TO THE WHITE HOUSE. CAN YOU TELL ME A BIT ABOUT THAT AND THE CONVERSATIONS YOU HAVE HAD? VIVEK: THAT STARTED AFTER I LEFT THE RACE. I LEFT THE RACE AFTER THE IOWA CAUCUS AND BEFORE THE NEW HAMPSHIRE PRIMARY.
IN NEW HAMPSHIRE, I BEGAN MY CONVERSATIONS WITH DONALD TRUMP ABOUT WHY IN MY CAMPAIGN I HAD BEEN OPPOSED TO A CENTRAL-BANK DIGITAL CURRENCY. IN ONE OF THE THINGS THAT IMPRESSED ME ABOUT PRESIDENT TRUMP WAS HIS INTELLECTUAL CURIOSITY ABOUT THAT ISSUE. I HAVE MET A LOT OF POLITICIANS, INCLUDING REPUBLICANS, WHO DO NOT KNOW THE FIRST THING ABOUT WHAT IT ACTUALLY MEANS. BUT THEY PRETEND LIKE THEY DO. DONALD TRUMP WAS THE OPPOSITE
OF THAT. HE SAID, WHAT IS THAT? AND ONE OF THE BEST ARGUMENT FOR WHY THEY ARE SUPPORTING IT -- I THOUGHT THAT WAS THE MARK OF A GOOD LEADER WHO WANTED TO UNDERSTAND THE BEST ARGUMENTS FOR THE OTHER SIDE. LATER ON, HE SAID FROM THE CAMPAIGN STAGE AT AN EVENT -- I FEEL COMFORTABLE SHARING. IT AFTER CAREFUL CONSIDERATION AND STUDY OF THE ISSUE, HE CAME OUT WITH HIS OPPOSITION TO A CENTRAL-BANK DIGITAL CURRENCY, AND HE EXPLAINED WHY. THE FLIPSIDE IS WHAT YOU MIGHT FAVOR DECENTRALIZATION AND ALTERNATIVE OPTIONS FROM PEOPLE JUST STAYING TETHERED TO THE DOLLAR, OF THE FED ACCOUNTABLE HAVING OTHER OPTIONS IN THE MARKETPLACE OF ALTERNATIVE CURRENCIES. THERE HAVE BEEN A NUMBER OF
PRODUCTIVE CONVERSATIONS HE AND I HAVE HAD. ONE OF THE THINGS I LOOK AT THIS FOR -- I DO NOT LOOK AT CRYPTOCURRENCY AS A SECTOR. I LOOK AT THE FIRST PRINCIPLES OF THE UNITED STATES OF AMERICA, FOUNDED ON COMPETITION AND CHOICE AND FINANCIAL FREEDOM. I THINK THOSE PRINCIPLES ARE WHAT MOTIVATED MY INTEREST IN THESE ISSUES IN THE CAMPAIGN. I THINK THAT IS ALSO WHAT
HELPED A LOT OF MY CONVERSATION WITH PRESIDENT TRUMP. LET US LOOK AT WHAT IS RIGHT FOR AMERICA, NOT ONE SECTOR OR ANOTHER. I LOOKED AT THE KINDS OF POLICIES THAT ALLOW AMERICA TO REMAIN THE BEACHHEAD OF INNOVATION RATHER THAN PLAYING FROM BEHIND. ED:
ONE ITEM ON THE IDEA THE PRESIDENT HAS THE ABILITY TO BLOCK ANYONE FROM DOING CBDC --THE FED HAS SAID MANY TIMES IT IS NOT GOING TO INTRODUCE ONE UNLESS MANDATED BY CONGRESS. THAT IS THE FED'S POSITION ON THAT. I WANT TO TALK TO YOU ABOUT ARTIFICIAL -- VIVEK: CLOSING ON THAT, THERE IS ADVOCACY AND THE EXECUTIVE BRANCH SPONSORS LEGISLATION THAT GOES TO CONGRESS. THAT IS HOW THINGS WORK IN WASHINGTON, D.C. IT IS CLEAR ABOUT THE POSITION AND DONALD TRUMP ADOPTED THE RIGHT POSITION. ED: I WOULD LIKE TO TALK ABOUT
ARTIFICIAL INTELLIGENCE, AND I APPRECIATE THAT THIS WAS NOT A QUESTION POST LAST NIGHT. AT ANY OF THE POLICY QUESTIONS POSED WERE NOT REALLY ANSWERED BY EITHER PARTY. WHEN FORMER PRESIDENT TRUMP WAS IN OFFICE, WE WERE NOT TALKING ABOUT THE IDEA OF AN EXISTENTIAL THREAT FROM A LARGE LANGUAGE MODEL AND HUNDREDS OF PARAMETERS. WE WERE NOT TALKING ABOUT THE NEED TO REGULATE I I -- AI. FORMER PRESIDENT TRUMP DOES NOT HAVE THE EXPERIENCE OF THAT. DO YOU THINK HE HAS THE ACADEMIC STUDY.
GOING INTO OFFICE, IF HE WERE TO REGAIN THE WHITE HOUSE, IT WOULD BE AN ISSUE TO CONSIDER. VIVEK: I DO WISH THIS HAD BEEN A TOPIC AT THAT DEBATE AND EVEN THE REPUBLICAN PRIMARY DEBATES, WHERE THIS ISSUE DID NOT COME UP. IT FALLS OUTSIDE OF TRADITIONAL BOUNDARIES. HIS PRESIDENT TRUMP GOING TO CLAIM TO BE A DOMAIN EXPERT? NO, AND THAT IS WHAT I LOVE ABOUT HIM. I THINK HE IS GOING TO BE ABLE TO SET RATIONAL POLICY THAT ALLOWS THE U.S. TO BE A LEADER IN INNOVATION. AT THE SAME TIME, IT ACKNOWLEDGES A DIFFERENT RISK FROM DIFFERENT TYPES OF GENERATIVE AI.
ONE OF THE THINGS THAT MAKES A LOT OF SENSE AS A FIRST STEP -- RATHER THAN SOME CENTRAL GOVERNMENT BUREAUCRACY, TREATED THE SAME WAY YOU TREAT OTHER SECTORS. IN THE SAME WAY YOU ARE A CHEMICALS MANUFACTURER AND CANNOT DUNCAN SOMEONE ELSE'S RIVER -- IF YOU ARE THE DEVELOPER OF AN ALGORITHM THAT HAS UNPREDICTABLE NEGATIVE EFFECTS, YOU ARE LIABLE FOR THOSE EFFECTS. A SICK PRINCIPLES OF THE LAW WE ALREADY USE ELSEWHERE -- BASIC PRINCIPLES OF THE LAW WE ALREADY USE ELSEWHERE, USED IN THIS NEW DOMAIN. THIS IS THE SAME QUESTION THAT CAME UP THE LAST TIME WE DISCUSSED THIS.
I HAVE SEEN IN PRESIDENT TRUMP INTELLECTUAL CURIOSITY. SOMEONE WHO HAS BEEN AN EXECUTIVE. SOMEONE WHO IS STILL INTELLECTUALLY WITH IT ENOUGH TO GO DEEP ON THE DETAILS, ATTRACT THE BEST PEOPLE, AND MAKE THE RATIONAL POLICY DECISION, NOT THE IDEOLOGUE WHEN IT COMES TO AI. BUT UNDERSTANDING OF THE FACTS -- I DO HAVE CONFIDENCE IN HIS ABILITY. ED: WE HAVE A SHORT TIME AND I WANT TO MAKE THE MOST OF IT. HAVE YOU BEEN ASKED TO SUBMIT
DOCUMENTATION FOR VETTING FOR A POTENTIAL CANDIDATE POSITION IN THE EVENT OF A TRUMP WHITE HOUSE? VIVEK: WE HAD A LOT OF CONVERSATIONS ABOUT THE FUTURE. I HAVE NOT BEEN ASKED TO BE THE VICE PRESIDENT. NEVER IT IS, I'M GOING TO LOOK AT THE NEXT IMPACT OF THE COUNTRY. MAKING SURE THE TERM IS THE BEST IT POSSIBLY CAN BE. I’'M SURE WE ARE GOING TO SEE
THE STRONGEST TICKET NOT JUST OF THE CENTURY, THAT OF MY LIFETIME. HAVE A UNIQUE OPPORTUNITY IN THIS COUNTRY. WE HAVE HAD A LOT OF THIN ICE ELECTIONS. THIS COULD BE A REAGAN IN 1984 STYLE LANDSLIDE.
MINORITIES, HISPANICS, BLACKS, YOUNG PEOPLE, READING A NEW COALITION IN THIS COUNTRY THAT IS PRO-AMERICAN AND GOES BEYOND THE BOUNDARIES OF THE TRADITIONAL REPUBLICAN PARTY. THAT IS WHAT I AM ROOTING FOR. ED: I AM OUT OF TIME. I NEED TO ASK YOU ABOUT BUZZFEED, BUT ALSO THE IDEA -- I AM TOLD OF YOUR INTEREST IN A MEDIA COMPANY. THIS HAS BEEN REPORTED, YOUR STATEMENT. WHAT DO WE NEED TO DO? VIVEK: I AM THE SECOND LARGEST CLASS A SHAREHOLDER AT BUZZFEED. THIS IS A COMPANY THAT STRUGGLED AND FAILED FOR REASONS I STILL THINK ARE FIXABLE. PEOPLE DO NOT KNOW WHAT THE
BRAND STANDS FOR. I THINK THEY HAVE A HISTORIC OPPORTUNITY TO DO WHAT MANY IN THE MAINSTREAM MEDIA HAVE AN OPPORTUNITY TO DO -- ILL A BRAND CENTERED ON TRUST AND THE PURSUIT OF TRUTH. WE ARE A PLATFORM FOR ALL VOICES -- IT DOESN'T MATTER, ACROSS THE CULTURAL SPECTRUM. USE THAT TO DEFINE A COHERENT AND POWERFUL BRAND THAT I THINK AUDIENCES ARE HUNGRY FOR. ESPECIALLY YOUNGER AUDIENCES TODAY THAT ARE SICK AND TIRED OF YESTERDAY'S LEGACY MEDIA. THEY WANT TO TRUST CONTENT READERS.
I HAVE GIVEN THEM A CONTEXT OF THE LETTER I SENT TO THE BOARD. I ALSO PROPOSED TO JOIN THE BOARD WITH A STRATEGY THAT I HOPE WILL CREATE THE VALUE. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I'M ED LUDLOW IN AND INTERESTING POSITION UP FOR A FIFTH STRAIGHT DAY RECOVERING UNDER THE RADAR.
IT IS A NAME WE HAVE HAD CONCERN ABOUT WITH REGARDS TO VALUATION. WE HAVE DEBATED WHETHER THE AR STRATEGY WITH APPLE IS UNDERSTOOD BY INVESTORS OR IF THEY HAVE GIVEN THE STOCK TOO MUCH CREDIT ABOUT AI OR TOO LITTLE. WHAT IS DRIVING TRADING IS DATA AROUND CHINA THAT JUST SHIPMENTS UP 40% IN MAY, CONTINUING SHORT-TERM RECOVERY AFTER A TOUGH FIRST THREE MONTHS OF THE YEAR WHERE SALES WEREN'T GREAT AND DOMESTIC HEADSET MAKERS WERE TAKING MARKET SHARE. WE ENTERED A TIME OF YEAR IN
CHINA THAT'S THE KEY MARKET FOR ALL ELECTRONICS PROVIDERS AND MAKERS WHERE THEY DID A LOT OF DISCOUNTING. SPECIAL HOLIDAY SALES AND THINGS LIKE THAT. THE STOCK, INTERESTING, OVER A FIVE DAY BASIS ITS LONGEST STREAK SINCE JUNE 8, THE END OF AN EIGHT DAY WINNING STREAK.
IT IS ON THE VERGE OF RETAKING THE CROWN OF WORLD'S MOST VALUABLE COMPANY THAT IT LOST TO MICROSOFT AND BRIEFLY NVIDIA. LET'S BRING IN BLOOMBERG'S MARK GURMAN, THE PERFECT CORRESPONDENT. IT IS OFFICIAL DATA WE HAVE CRUNCHED THE NUMBERS ON. I AM TRYING TO EXTRAPOLATE A STORY OUT OF IT. IS IT A RECOVERY?
MARK: DEFINITELY. THE FIRST COUPLE MONTHS OF 2024 YOU SAW IPHONE SHIPMENTS DECLINED SIGNIFICANTLY IN CHINA. AROUND A SPRINGTIME INTERESTING THINGS HAPPENED. APPLE STARTED OFFERING PROMOTIONS ON HIGHER END IPHONE MODELS AND RETAIL CHANNELS FOR IPHONES ONLINE STARTED OFFERING DISCOUNTS. THERE ARE SEVERAL SHOPPING HOLIDAYS IN CHINA THAT OFFER DISCOUNTS FOR NOT ONLY THE IPHONE BUT SEVERAL DIFFERENT PRODUCTS.
YOU HAVE SEEN AN UPTICK IN SALES. BASED ON DATA OFFICIALLY FROM CHINA YOU SAW 40% GROWTH IN THE LAST MONTH OR SO, QUITE SIGNIFICANT FOR APPLE. THE SMARTPHONE MARKET IS GROWING STRONGLY IN CHINA RIGHT NOW. IT'S NOT JUST APPLE.
IT IS WOBBLY AND OTHER CHINESE PHONE MAKERS. APPLE WAS THAT CHINA WAS A REAL CONCERN FOR INVESTORS IN APPLE EARLIER THIS YEAR AND LAST YEAR AND WITH THE SALES UPTICK THOSE CONCERNS ARE BEING MITIGATED. IT'S HAPPENING AT A GREAT TIME FOR APPLE.
SUMMERS ARE USUALLY THE SLOW SEASON FOR IPHONE SALES GIVEN IN ANTICIPATION OF NEW MODELS IN SEPTEMBER. YOU ARE SEEING A STRONG UPTICK IN THE CURRENT IPHONES IN THE MONTHS LEADING TO THE NEXT IPHONES. THEN YOU WILL GET ANOTHER BIG PUSH COME SEPTEMBER AND OCTOBER WHEN THE NEW IPHONES ROLLOUT. RIGHT NOW THINGS IN CHINA FOR APPLE IN TERMS OF THE IPHONE ARE AS GOOD AS THEY HAVE BEEN IN SEVERAL MONTHS. ED: LET'S TALK ABOUT THE BIG PICTURE STRATEGY IN CHINA.
YOU REPORTED JUNE 21 APPLE WAS HALTING ITS AI ROLLOUT IN EUROPE BECAUSE IT WAS CONCERNED ABOUT THE REGULATORY ENVIRONMENT THERE. BY COMPARISON, DO WE HAVE A GOOD SENSE OF WHAT THE AI ROLLOUT WILL BE IN CHINA AND WHETHER IT MIRRORS WHAT THEY PLAN TO DO IN THE U.S.? MARK: AS YOU KNOW THERE ARE THREE FACETS TO APPLE INTELLIGENCE.
THERE IS AN ON DEVICE LARGE LANGUAGE MODEL FOR MINOR TASKS LIKE NOTIFICATION AND PRIORITIZATION. THERE'S A CLOUD COMPONENT THAT IS ALSO RUN THROUGH APPLE FOR MORE ADVANCED THINGS LIKE WRITING TOOLS, SUMMARIZING INFORMATION. THEN THE THIRD IS THE CHATBOT, THE FEATURE THAT WILL BE MOST EXCITING TO A LOT OF PEOPLE. IN THE U.S.
YOU GET OPENAI AS A PARTNER BUT IN CHINA YOU WILL NEED ANOTHER PARTNER. IF THEY HAVE TALKED TO ALIBABA, AND SOME OTHERS. BUT THEY DON'T HAVE AN AGREEMENT IN PLACE THERE AND UNTIL THEY CAN GET AN AGREEMENT FOR THIRD-PARTY CHATBOT INTEGRATION THEY WON'T BE ABLE TO ROLLOUT APPLE INTELLIGENCE IN A MEANINGFUL WAY. I WOULD EXPECT THAT TO COME TOGETHER SOMETIME BY THE MIDDLE OF NEXT YEAR.
ED: APPLE HAS RAISED ITS FRIDAY GAIN AND IS FLAT BUT UP ON THE WEEK. COMING UP ON BLOOMBERG, WE ARE JOINED BY ALLIE LOVE TO DISCUSS THE TECHNOLOGY AT M&A MARKET. TAKING A SHORT BREAK, THIS IS BLOOMBERG TECHNOLOGY. CHECK OUT OUR PODCAST+ ON THE TERMINAL END ONLINE.
THIS IS BLOOMBERG. ED: THE FORD -- FIRM KLEINER PERKINS ANNOUNCED TODAY RAISED MORE THAN $2 BILLION FOR TWO NEW FUNDS. THE FIRST 825 MILLION DOLLARS FUND WILL TARGET YOUNG STARTUP THAT ANOTHER $1.2 BILLION FUND WILL BE ALLOCATED TOWARDS A LATER STAGE FUND.
KLEINER PERKINS WILL LOOK FOR START UPS LEVERAGING AI FOR GROWTH. NOW LET'S LOOK AT THE STATE OF THE TECH M&A MARKET. ALY LOVE FROM PLIMPTON JOINS US FOR MORE.
IT'S BEEN AN INTERESTING FEW WEEKS IN THE WORLD OF M&A. WHEN I SPEAK TO VENTURE CAPITALISTS, THEY MIGHT BE MORE UPBEAT THAT SOME OF THEIR LATER STAGE VENTURE BACKED COMPANIES ARE MORE LIKELY TO BE ACQUIRED THEN GO PUBLIC. THERE IS ENERGY THERE. IS THAT SOMETHING YOU SEE FROM YOUR DESK? ALY: THAT'S EXACTLY RIGHT. THERE IS A LOT OF OPTIMISM IN THE MARKET RIGHT NOW.
WHEN YOU LOOK AT THE LAST THREE-FOUR YEARS, THERE WAS A MASSIVE UPTICK IN 20 21 AND 2022 THAT DROPPED OFF PRECIPITOUSLY WITH VALUES DROPPING IN THE END OF 2022 AND ALL OF 2023 AND TO SOME EXTENT THE BEGINNING OF THIS YEAR. WE HAVE THREE MAJOR GROUPS OF ACQUIRERS THAT WOULD ACQUIRE VENTURE BACKED TECHNOLOGY COMPANIES. PRIVATE EQUITY, TRADITIONAL TECHNOLOGY ACQUIRERS AND WHAT I REFER TO AS NONTRADITIONAL TECHNOLOGY ACQUIRERS, OLDER INDUSTRIES.
LOOKING AT PRIVATE EQUITY, THE RISE IN INTEREST RATES MADE THEM NERVOUS. GOING BACK IN HISTORY, PRIVATE EQUITY IS USED TO OPERATING AT DOUBLE-DIGIT INTEREST RATES. HAVE THEY DUSTED OFF THE OLD PLAYBOOK REMINDED THEMSELVES HOW DO WE DO THIS AGAIN? ABSOLUTELY.
THEY HAVE BECOME INCREASINGLY ACTIVE THE FIRST TWO QUARTERS OF THIS YEAR. A LOT OF TRADITIONAL TECH ACQUIRERS SET OUT THE FIRST COUPLE YEARS OF THE BOOM. THEY DID NOT WANT TO SPEND CASH AT THAT LEVEL.
ED: I WANT TO JUMP IN AND ASK ABOUT THE MECHANICS OF IT, USING CASH. I, PARTICULARLY, UNDERSTAND THE PRIVATE EQUITY SIDE OF THE EQUATION. THERE IS ALSO A LITTLE BIT OF A PSYCHOLOGICAL SIDE OF ANY TRANSACTION. YOUR FIRM IS ON BOTH SIDES OF THE TABLE, BUYER AND SELLER.
WHAT ARE THE ATTITUDES NOW TO SITTING DOWN AND HASHING OUT A DEAL? ALY: ONE THING WE WORK WITH CLIENTS NOW A LOT ON IS BOTH FOR TRADITIONAL AND NONTRADITIONAL TECHNOLOGY ACQUIRERS, UNDERSTANDING THE MINDSET OF FOUNDERS AND BOARDS. THESE ARE COMPANIES THAT WERE TWO INDIVIDUALS IN A GARAGE THAT HAVE GROWN TO MULTIBILLION DOLLAR COMPANIES AND ALONG THE WAY UNDERPAID THEMSELVES. THEY HAVE NOT BOUGHT HOUSES. THEY HAVEN'T GOTTEN MARRIED. THEY HAVEN'T AND CHILDREN. THEY HAVE NOT GONE ON VACATION. ANY BUYER THAT LOSES SIGHT OF
THAT DOES NOT UNDERSTAND THE COMPANY THEY ARE BUYING. ED: SOMETHING INTERESTING IS HAPPENING IN NONTECHNOLOGY COMPANIES AS WELL. THE IDEA THAT WORLD OF AI, AS WE JUST DISCUSSED THE NEW KLEINER PERKINS FUND, YOU HAVE TO HAVE SOME SORT OF AI TOOL. YOUR INVESTOR BASE, YOUR
EMPLOYEES WON'T BELIEVE YOU OR THEY WILL LEAVE. I SEE THAT IN ALL SECTORS. OIL AND GAS, UTILITIES, EVEN CONSTRUCTION SAYING, WE HAD A BETTER BUY A SOLUTION HERE.
THAT MUST BE A BOON TO BUSINESS TO YOU. ALY: RIGHT. YOU HAVE TWO THINGS GOING ON. FIRST, SPEAKING SPECIFICALLY TO AI, IT'S A MISCHARACTERIZATION TO SAY THAT'S A LOT OF AI M&A ACTIVITY. THERE AREN'T ENOUGH AI PLATFORM COMPANIES WERE THERE TO BE CONSOLIDATION.
A LOT OF COMPANIES DO SOMETHING ELSE. THEY DO SUFFER SECURITY. MAYBE THEY ARE AND HR PLATFORM OR FINTECH COMPANY. ARE THEY ADDING AI TO WHAT THEY DO TO IMPROVE THEIR PRODUCTS? ABSOLUTELY. THE PRODUCTS ARE GETTING FASTER, SMARTER, AND ARE MORE ATTRACTIVE TO THEIR CUSTOMER BASE BUT THEY AREN'T FUNDAMENTAL AI PLATFORMS. ON THE FLIPSIDE WE ARE SEEING A LOT OF, AS YOU SAID, NONTRADITIONAL TECHNOLOGY ACQUIRERS COME DEEPER INTO THE TECH SPACE. ANOTHER AREA WHERE THEY ARE DOING THAT IS SEPARATE SECURITY. AT THE BEGINNING OF THE
PANDEMIC EVERYBODY MIGHT REMEMBER A MASSIVE PIPELINE HACK ON THE EASTERN SEABOARD. IT WOKE UP OIL AND GAS COMPANIES TO SAY WE HAVE NOT INVESTED ENOUGH IN TECHNOLOGY, CYBERSECURITY, AND PROTECTING INFRASTRUCTURE. A LOT OF COMPANIES, IN THEORY, COULD BUILD CYBERSECURITY SOLUTIONS. BUT SOME OLDER INDUSTRIES
AREN'T EQUIPPED TO DO THAT SO THEY GO BY THEM WHOLESALE. THEY BUY A COMPANY TO CREATE A PRODUCT JUST FOR THEM. THAT IS WHAT A LOT OF INDUSTRIES ARE DOING. IT COULD BE OIL AND GAS OR AGRICULTURE.
TO SOME EXTENT BANKING IS BEHIND THE BALL FOR SOME OF THESE TECHNOLOGIES. ED: WHAT YOU JUST SAID ON CONSOLIDATION WAS VERY INTERESTING. IT ALMOST CONTRADICTS WHAT WE HAVE BEEN HEARING WHAT I WROTE ABOUT A FEW WEEKS AGO. BASED ON COMMENTS FROM HOOKING FACE, A PLATFORM THAT HOSTS LARGE OF -- LOTS OF LARGE LANGUAGE MODELS PROVIDERS. SMALLER PLAYERS HAVE RUN OUT OF CASH. IT'S AN EXPENSIVE ENTERPRISE. YOU SEEM TO BE SAYING AT THE
PLATFORM LEVEL THAT IS NOT HAPPENING BECAUSE THERE AREN'T ENOUGH PLATFORM LEVEL PROVIDERS NOW. GIVE ME MORE ON THAT? ALY: TO BE CLEAR, THERE IS A TON OF INVESTMENT GOING INTO AI AND AR PLATFORM COMPANIES 100% AND YOU SEE THAT WITH THE KLEINER PERKINS FUND THAT WAS JUST ANNOUNCED BUT YOU AREN'T SEEING EXITS. THERE AREN'T ENOUGH COMPANIES TO BE CONSOLIDATION. ABSOLUTELY THERE ARE SOME. NOT TO THE VOLUME YOU SEE IN OTHER SUBSECTORS OF TECHNOLOGY.
ED: ALY LOVE GREAT TO HAVE YOU ON THE PROGRAM. LET'S LISTEN IN ON THE FIELD OF CLIMATE TECHNOLOGY AND HOW AI CAN HELP. WE WILL BRING IN COHEAD OF VENTURES AT ENTERPRISE A FIRM FOCUSED ON CLIMATE SOLUTIONS WITH $1.4 BILLION OF CAPITAL TO PLAY WITH. FROM THE M&A PERSPECTIVE, I HAVE HAD THEMATICALLY SPECIALIZED VC'S, THE SHOW IN RECENT WEEKS AND MONTHS AND SAY PRETTY GOOD OUTLET FOR US. BECAUSE THEY EITHER PROVIDE A PRETTY CLEAR TECHNOLOGY PLATFORM TO A BIGGER BEAST IN THE ENERGY FIELD, FOR EXAMPLE. WHAT DID YOU MAKE OF HER COMMENTS? LIKE I SORT OF AGREE.
I THINK WE ARE SEEING GROWING INTEREST FROM TRADITIONAL INDUSTRIAL COMPANIES LOOKING FOR DIGITAL TECHNOLOGIES AND POCKETS OF GROWTH. FRANKLY IN OUR SPACE, THE SOFTWARE MEETS CLIMATE INTERSECTION BRINGS BOTH DIGITAL TECHNOLOGIES AND GROWTH POCKETS THAT A LOT OF TRADITIONAL BUYERS ARE BRINGING. THE INTEREST IS NOT EXCLUSIVE TO AI COMPANIES. MAYBE IT IS CATALYZED.
I AGREE A LOT OF AI SPECIFIC COMPANIES ARE EARLY IN THEIR JOURNEY STILL. THERE IS NO DOUBT THAT TECH DRIVEN GROWTH IS ATTRACTIVE. COMPANIES ARE LOOKING FOR PRODUCTS TO BUILD ON DEPLATFORMS AND TALENT. NEXT GENERATION TO HELP THEM PULL FORWARD TO WHERE THE TRANSITION IS ACTUALLY GOING. ED: I DON'T THINK IT IS A SURPRISE TO OUR AUDIENCE THAT WE HAVE A VENTURE CAPITALISTS SPECIALIZING IN ENERGY OR CLIMATE TECHNOLOGY TALKING ABOUT AI. WE NEED TO UNDERSTAND HOW MUCH IS HYPE AND HOW MUCH IS ACTUAL IMPACT. I WAS A BATTERY AND TV REPORTER
FOR A LONG TIME. THERE ARE LOADS OF EXAMPLES WHERE SOFTWARE MAKES A VERY FUNDAMENTAL DIFFERENCE. TAKE THAT AND GIVE ME CASE STUDIES OF WHERE YOU ARE SEEING AI ABOUT YOUR PORTFOLIO COMPANIES OR THE INDUSTRY AT LARGE. >> YES, ABSOLUTELY. I THINK AI IS ALREADY HAVING A
BIG IMPACT IN OUR SPACE. IN TWO PRIORITY WAYSD. ONE, IT IS VERY COMPUTATIONALLY INTENSIVE AND IT DEMANDS HUGE AMOUNTS OF POWER, ELECTRICITY TO GIVE RISE TO THE COMPUTER. IT'S A HUGE STORAGE -- SEARCH IN THE POWER LOAD OF OUR WORLD. ENERGY CONSUMPTION WILL GROW 7% YEAR ON YEAR OVER THE NEXT SEVERAL YEARS AND THAT IS A HUGE DRAW FOR POWER.
IT'S A HUGE DRAW FOR POTENTIAL AI APPLICATION. AI APPLICATION. AR IS ENABLING A WIDE SET OF OPPORTUNITIES TO ACCELERATE THE ENERGY TRANSITION. WORKFLOW AUTOMATION CAN HELP REDUCE SOFT COST OR GENERATIVE TOOLS CAN HELP IMPROVE THE DEVELOPMENT AND DEPLOYMENT OF RENEWABLE PROJECTS. FOR EXAMPLE BATTERIES. YOU MENTIONED THEM.
WE HAVE A COMPANY IN OUR PORTFOLIO THAT CAN USE AI ENGINES TO CALIBRATE HOW BATTERIES WILL AGE AND DEGRADE OVER TIME. SO, WE CAN BETTER PREDICT BATTERY BEHAVIOR. WE CAN BETTER PREDICT PERFORMANCE. WE CAN BETTER PREDICT DETAILED INSIGHTS INTO THE STATE OF CHARGE, CAPACITY, TO MAKE SURE WE CAN USE RESOURCES MORE EFFECTIVELY AND APPROPRIATELY AT SCALE. ED: I'M SURE YOU WATCHED THE PRESIDENTIAL DEBATE LAST NIGHT.
INFRASTRUCTURE HAS BEEN AT THE HEART OF PRESIDENT BIDEN'S POLICY PLATFORM FOR THE LAST 3.5 YEARS. HOW HAS IT MANIFESTED IN THE REAL WORLD? FOR YOU AND THE AREAS YOU INVEST IN? JUAN: THE INFLATION REDUCTION ACT IS AN INFRASTRUCTURE BILL. IT PULLED THE FUTURE FORWARD IN DIFFERENT WAYS.
AT ENERGIZE WE DON'T SEE A SHIFT IN POLITICAL POWER AS A PARTICULAR THREAT TO THE ENERGY TRANSITION. WE SEE THAT TRAIN IS UNDERWAY AND THE COMPANIES WE ARE INVESTING IN OUR ACCELERATING THAT. IT MAY CHANGE A LITTLE BIT. THE PACE.
THE DIRECTION IS NOT REALLY CHANGING. FOR ME IT COMES DOWN TO ECONOMICS. THE TRANSITION TECHNOLOGY THAT IS VIABLE TODAY, WIND, SOLAR, BATTERIES, THEY HAVE COME DOWN ON A COST DRAMATICALLY OVER THE LAST 10-15 YEARS AND THAT WILL CONTINUE. WE INVESTED UNDER REPUBLICAN AND DEMOCRATIC PRESIDENTS AND EITHER WAY THE TRAIN HAS REALLY LEFT THE STATION. WE THINK THE DIRECTIONAL ARROW OF PROGRESS WILL CONTINUE TO FOLLOW BETTER PRODUCTS AND BETTER ECONOMICS AND BETTER SOCIAL OUTCOMES AROUND THE WORLD.
ED: I THINK OF THE BAY AREA AND SILICON VALLEY AS THE HOTBED OF ENERGY AND CLIMATE RELATED TECHNOLOGY. IS THAT THE CASE? JUAN: THERE'S A LOT OF INNOVATION OUTSIDE SILICON VALLEY FOR CLIMATE. CLIMATE IS A GLOBAL OPPORTUNITY. THE TALENT TACKLING THE CLIMATE CHALLENGE IS GLOBAL. WE SEE A LOT OF INNOVATION IN
EUROPE SPECIFICALLY WHERE THE POWER DYNAMICS AND ENERGY INFRASTRUCTURE IS VERY DIFFERENT. WE SEE A LOT OF OPPORTUNITY TO INVEST OUTSIDE OF SILICON VALLEY AND WE REALLY LIKE TO BE TOAST TO CUSTOMERS. BEING IN THAT MIDWEST HEART OF INDUSTRY IS IMPORTANT TO US. ED: JUAN LUDOON -- MULDOON GREAT HAVE YOU ON THE PROGRAM. COMING UP, A NEW SURVEY SHOWS TESLA NO LONGER STANDS ABOVE OTHER ELECTRIC VEHICLES IN QUALITY. THAT'S BECAUSE OF SPECIFIC HEAD SCRATCHING DESIGN CHANGES.
ED: TWO STORIES IN THE NEWS. MICROSOFT NAI’'S $13 MILLION PARTNERSHIP THAT DEFRAY FACE SCRUTINY. UNITED NATIONS ANTITRUST WATCHDOGS SET TO ASK RIVALS ARE TO CUSTOMERS ABOUT THE COMPANY THINK THAT EXCLUSIVITY BECAUSE -- CLAUSE UNDER WHICH MICROSOFT AZURE IS THE SOLE CLOUD PROVIDER FOR OPENAI. NO FORMAL INVESTIGATION HAS BEEN OPENED YET. AND A RAIN AI RECRUITS AND APPLE EXACTLY AT THE STARTUP BACKED BY SAM ALTMAN EMPLOYED AN APPLE CHIP EXECUTIVE THAT ONCE LED HARDWARE ENGINEERING.
RAIN AI IS HOPING TO DESIGN A NEW TYPE OF SEMICONDUCTOR SPECIFICALLY FOR ARTIFICIAL INTELLIGENCE. ACCORDING TO THE JD POWER'S INITIAL QUALITY STUDY TESLA NO LONGER STANDS ABOVE OTHER ELECTRIC VEHICLES IN QUALITY BECAUSE OF HEAD SCRATCHING DESIGN CHANGES ON ITS CARS SUCH AS REMOVING THE TURN SIGNAL STOCKS. I WANT TO BRING IN MY FRIEND AND COLLEAGUE BLOOMBERG'S CUES NOT IN THE BYLINE ON THIS ONE. I FOUND IT SO INTERESTING TO READ. SO MUCH OF THE TESLA ORIGIN
STORY WAS ITS TECHNOLOGY WAS GREAT. IT WAS A GREAT PRODUCT. THEY HAVE MADE TWEAKS ON SPECIFIC MODELS. I THINK MODEL X AND S AFTER A CERTAIN YEAR. THAT HAVE NOT GONE DOWN WELL WITH TESLA OWNERS.
>> IT DID START IN 2021 WITH S AND X AND NOW IT HAS MIGRATED TO THREE-HIT INTO MAINSTREAM BUYER. THE MAINSTREAM BUYER DOES NOT LOCK -- LIKE GIVING UP TURN SIGNAL STOCKS. ELON IS TRYING TO GO STOCK FREE. YOU LEARN THE TERMS -- MOVES THE TURN SIGNAL STOCK AND THE WINDSHIELD WIPER STOCK ON THE OTHER. ALL THOSE MIGRATED TO BEING BUTTONS ON THE STEERING WHEEL. ED: AS REGULAR VIEWERS OF BLOOMBERG TECHNOLOGY KNOW, I HAVE A MODEL Y THAT I PAY FOR MYSELF.
IT HAS THE STOCKS. I OBSERVE THE SCREEN IN THE MIDDLE, THERE ARE NO DIALS OR BUTTONS ON THE --. I SPEND A LOT OF TIME LOOKING AT THE SCREEN, READING THE JD REPORT I THINK THAT WAS A BIG POINT MANY OF THE RESPONDENTS MADE AS WELL. KEITH: YES ABSOLUTELY. JD POWER SAID, THE AUTHOR OF
THE STUDY TOLD ME THAT THE CONSUMER'S REPORT, THEY HAVE MUCH MORE EYES OFF THE ROAD TIME BECAUSE THEY ARE HUNTING AROUND FOR THESE ORDINARY FUNCTIONS. IT'S NOT HIGH-LEVEL TECHNOLOGY THAT PEOPLE ARE LOOKING FOR. THEY JUST WANT TO BE PER THE HORN BECAUSE SOMETHING -- BEEP THE HORN BECAUSE SOMETHING HAPPENED IN FRONT OF THEM AND THEY CAN'T FIND IT. ED: WE WANT TO GET INTO THE HISTORY
OF TESLA AND FULL SELF-DRIVING WERE TO ELON MUSK'S MIND YOU WILL NOT NEED TO PAY ATTENTION ANYWAY. YOU HAVE COVERED THE INDUSTRY A LONG TIME. YOU HAVE WRITTEN BRILLIANT PIECES THAT THE PRODUCT LEVEL. HOW IMPACTFUL ARE THESE REPORTS. IT DOES THE AVERAGE CONSUMER PICK IT UP AND GO, THIS WILL INFORM WHETHER OR NOT I GET A TESLA? KEITH: ABSOLUTELY. JD POWER AND CONSUMER REPORTS, THOSE TWO MEASURES CARRY THE MOST WEIGHT WITH CONSUMERS. YOU CAN SEE IT IN AUTOMAKER
ADVERTISING. JD POWER IS ONE OF THE PREFERRED BRANDS. TESLA HAS ALWAYS BEEN THE HIGHEST RANKED EV. NOW THE OTHER EV'S, RIVIAN, LEGACY AUTOMAKERS HAVE CAUGHT UP WITH TESLA PRIMARILY BECAUSE OF THESE RUDIMENTARY FUNCTIONS THAT HAVE BEEN PUT ON THE STEERING WHEEL AND TAKEN AWAY FROM MUTUAL LOCATIONS. ED: IN THE STORY THERE IS A CHART OF PROBLEMS PER 100 VEHICLES.
IT'S ALSO A QUALITY SURVEY. CAN WE TALK ABOUT THE QUALITY PART OF THE DISCUSSION? KEITH: YES. QUALITY IS DEFINED IN A COUPLE WAYS. ONE IS THE THINGS THAT BREAK THAT DON'T GO WELL. ALSO QUALITY IN THE SURVEY NOW REFLECTS WHEN CONSUMERS ARE HAVING TROUBLE OPERATING. IT MIGHT BE FUNCTIONING AS
DESIGNED. BUT IF THE DRIVER CAN'T FIGURE OUT HOW TO USE IT THAT IS A QUALITY PROBLEM. THAT IS WHAT IS SHOWING UP ON TESLA HERE.
THE BUTTONS WORK IF YOU CAN FIND THEM WEIRD BUT CAN YOU FIND THEM IN AN EMERGENCY. -- CAN FIND THEM. BUT CAN YOU FIND THEM IN AN EMERGENCY SITUATION? IF YOU ARE IN A ROUNDABOUT IN THE MIDDLE OF IT IN YOUR STEERING WHEEL IS UPSIDE DOWN YOU DON'T KNOW WHAT ARROW TO PUSH. ED: BLOOMBERG'S KEITH NAUGHTON, GREAT TO CATCH UP ON BLOOMBERG TECHNOLOGY THAT IS IT FOR THIS EDITION. CHECK OUT THE PODCAST. WHAT AN EPISODE. HAPPY FRIDAY TO EVERYBODY AROUND THE WORLD.
2024-07-02 05:07
