April 23, 2024 • 41 mins
Bloomberg's Caroline Hyde and Ed Ludlow break down why Apple is facing its worst start to the year in China since the Covid pandemic. Plus, a look at the TikTok bill heading to the Senate and an overview of Tesla's upcoming earnings.
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Episode Transcript
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Speaker 1 (00:01):
From Mahart.
Speaker 2 (00:02):
We're Innovation, Money and Power Collie in Silicon Vallet NBN.
Speaker 3 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
I'm Caroline Hyder Bloomberg's World headquarters in New York, and I'm.
Speaker 4 (00:28):
Ed Lodlow in San Francisco. This is Bloomberg Technology coming up.
Speaker 3 (00:31):
Apple faces its worst start to the year in China
that since the COVID pandemic, as new reports shows sales
fell by nineteen percent in the first quarter.
Speaker 4 (00:40):
Plus the Senate is set to consider the ninety five
billion dollar aid package that could lead to a nationwide
ban on TikTok if not divested.
Speaker 5 (00:48):
We'll go on the ground to Washington and we.
Speaker 3 (00:50):
Put your head to Tesla earnings after the Bella's investors
brace for Musk to nix the roll out of a
cheaper model and refocus on developing a robotax shares already
suffering their long routes is twenty twenty two. We'll discussed
that and so much more throughout this hour. But even
as we sit with much anticipation of the earnings to come,
we managed to see some risk appetite in the market today.
(01:11):
Maybe the bad news is good news from a macro
perspective today, maybe some of that business activity actually cooling
off more than the market anticipated means well we decide
to go into equities as we think the Federals of
maybe has more space to be cutting in the second
half of the year. Now's THATAK currently off up one
and a half percent, but remember we've been beaten up,
particularly at the end of last week two year yield
(01:32):
big auction sixty nine billion dollars worth record amount coming
to the market, yet still yields managing to be falling today.
That's so as we see money move into some of
the havens we're seeing four point ninety three there are thereabouts,
so interesting that we've got equities rallying and indeed Bob
Market's rallying on this particular day. Stocks six hundred over
in Europe also having a stellar run. On the moment,
we're up a percentage point, notably UK call out for
(01:54):
them the footsy one hundred crentyet a new record high.
And that's actually as we see some of the haven
stocks there actually do well amid some of the geopolitical tensions.
We have a look overall at money moving into both
risk asset classes, and indeed it's a good old bitcoin,
but four ten percent at the moment, we're currently at
sixty eight hundred and forty nine, so well off. The
highs are still money coming in despite a relatively strong dollar.
Speaker 6 (02:16):
Ed.
Speaker 3 (02:16):
What for you've got coming up on the micro.
Speaker 4 (02:17):
Are earnings and a lot of individual individual tech names.
Tesla's getting a boost ahead of earnings. After the bell,
we will play Oh get ready to play Tesla Bingo.
Tune in at the end of the show to find
out what I'm talking about. Spotify swing to profit, strong
sub subscriber growth, Bloomberg's actually Carmen's going to join us.
This is a name that a lot of people watching.
Look at the big jump in the shares and then
Adobe's higher. It's the one year anniversary since Firefly was released.
(02:41):
I think there's big questions about particularly text to video generation.
We have a key interview with an Adobe executive. Then
there's Apple, so Apple's interesting. We're now higher, maybe four
tens one percent in the session. We had open lower,
but basically we're trading at the same level on Apple
we were one year ago. It has been a difficult start.
Speaker 5 (02:59):
To the year.
Speaker 4 (03:00):
Concern principally about China. Third party data Counterpoint Research shows
that iPhone sales in China down nineteen percent one nine.
More interesting, perhaps, is the other data outside of Apple
showing domestic handset makers gaining market share. Apple has fallen
to third and it's on par with Huawei, which is
(03:20):
kind of resurgent at the higher end of the smartphone market.
Speaker 5 (03:24):
The data doesn't seem to be worrying.
Speaker 2 (03:26):
Anyone right now.
Speaker 4 (03:27):
We continue to push higher in the session, but big
picture ahead of earnings later on next week, Apple in focus.
Let's talk to none other than Bloomberg's chief Apple correspondent,
Mark German. We stress third party data. It is not
Apple telling us this, but there's a bit of concern
that China is still the key battleground and the iPhone
is losing ground mark.
Speaker 7 (03:50):
This is exactly what Wall Street and investors have been
bracing for another big decline in China. As you know,
Apple had its biggest decline in a cup of years
last quarter related to overall China sales, and now it
looks like you're going to see another decline in China
given this data from Counterpoint Research. Now, as I typically say,
(04:11):
these data points are typically not exactly on the money,
but they're usually directionally correct. So if they're telling us
that iPhone sales in China are down by a fifth,
I would believe that iPhone sales in China are down
quite considerably, not maybe as bad as nineteen percent, but
in all likelihood they're going to be down, bringing down
of the overall picture in China. Now, why is that
(04:32):
partcurely interesting? Because even though China had about a two
billion dollar decline in the prior quarter, Tim Cook on
the earnings call said, that's not because of the iPhone,
it's because of Apple's other products that they sell in China. Well,
this timearound, it's likely because the iPhone. If these numbers
are to be believed to be.
Speaker 3 (04:49):
Believed, let's talk about other products. Because we've kind of
got signaling on all of this before IDC another third
party data giving us a similar picture. What's new on
day mark? Is it?
Speaker 2 (05:01):
Well?
Speaker 3 (05:01):
May seventh, we've got a new event and it's all
around those new iPads.
Speaker 7 (05:06):
Yeah, as I've been saying on here and on power
on the last several weeks, Apple is set to launch
its biggest free damp to the iPad in over five years.
You're going to see new versions of the iPad air
in the iPad pro introduced on May seventh. They're going
to play a video on their website. They're trying something
new here, a video starting time of seven am versus
(05:27):
the usual ten am, and they're announcing this video well
in advance. They've been trying some different things lately. Their
usual cadence is to announce these things seven days in advance,
So now we're getting a full two weeks, which is
quite interesting. Maybe they want a little bit more momentum
leading into that they're trying to see for these smaller
scale launches if more advanced notice brings in more people.
(05:50):
So this is certainly going to look out for new
iPad pro, new iPad Air, new Apple pencil, new Magic keyboards,
all coming about one month before they announced their new
AA initiatives at the Worldwide Developers Conference in early June.
Speaker 8 (06:03):
So this is going to be significant.
Speaker 7 (06:05):
In the hope, if you're on Wall Street or a
shareholder of the company, is that this is going to
boost iPad sales, which have been down quite considerably the
last several quarters due to a lack of any updates
across twenty twenty three.
Speaker 3 (06:19):
And they're in lines a lot of the issue, a
lack of update and certainly weakness in China. Mark German
always telling us as telling us at first reappreciate it. Meanwhile,
let's continue the conversation now on basically where you should
sit with Apple when you're an investor, Ioka, you're Yoshi Yoka. Sorry,
get my words out today, portfolio manager over at Wealth
Enhancement Group in the house with us, Ioka. When you're
(06:41):
looking at Apple, when you've seen some of the weakness,
the worries about product updates, about perhaps behind the curve
when it comes to AI, is this still such a
solid name that you cannot avoid but to remain allocated
to it, would you start to take some risk off?
Speaker 9 (06:56):
It's a great question, Caroline. So you know, when we
look at Apple, it is a great company. It's got
a high quality balance sheet. There's so much cash on
their balance sheet and that allows them.
Speaker 3 (07:07):
To buy back a lot of stock.
Speaker 9 (07:08):
It's a big position within the S and P five
hundred index, so it is difficult to not own it.
And yet we do start to see some of these
issues with Apple in terms of innovation and then being
able to really bring new products that can continue to
grow at the pace that they have been growing over.
Speaker 3 (07:25):
The last several years. And I think this is some
of the tension we're seeing across the so called Magnificent seven,
those that are deemed less than magnificent for some still
managing to do very well. When we're worried about a
Tesla and Apple, which in many ways have very similar
issues China weakness, competition coming from China, worries about ultimately
a lack of an update from a product, is it more. Therefore,
(07:46):
you have to look at valuations rather than trying to
see a narrative as to when you get the next product.
Speaker 9 (07:52):
I think it's the combination of both valuation and then
just future growth. I think both Apple and Tesla are
suffering from, you know, the issues that you talked about,
and that's dampening their overall growth going forward, and so
valuation for that lower growth is a little bit higher
than everybody would like to.
Speaker 5 (08:11):
Pay the OCO. If the megacaps don't beat, what happens.
Speaker 9 (08:18):
You know, I think there could be a little bit
of another sort of sell off in the market. We
saw it last week and a half, you know. Ever
since the inflation print, and I think we do need
to see a lot of these larger names Microsoft, Amazon, Google, Meta.
They need to come out and show us that they
(08:38):
can continue to grow at the pace that they can grow,
and show that free cash flow growth so that people
can continue to rely on them for that quality growth.
Speaker 5 (08:48):
Do you get this sense here?
Speaker 4 (08:49):
Okay, this is the quarter where we look past the
AI height and we start again to look at fundamentals.
Did you have earnings growth? How is your free cash flow?
Boring things like that?
Speaker 9 (09:02):
You know, I think it's going to be a combination
of both ed in terms of you know, you have
to produce those numbers. Those fundamentals are going to matter,
but everybody wants to look at the future and say, well,
can you continue to produce those quality numbers that we've seen.
So AI continues to be, you know, a tailwind that
everybody wants to see production out of and further continuance
(09:26):
of that revenue and earnings growth.
Speaker 3 (09:29):
When you are seeing such a run up in big
tech of late, how much you thinking about the macro,
thinking about the data that we got today.
Speaker 4 (09:39):
Oh?
Speaker 9 (09:39):
Absolutely, I think the macro always contributes to the overall
market narrative. You know, the larger cap names just tend
to be at the very top of the funnel, per se,
and they are technically those long duration assets that everybody
likes to talk about and are most impacted by higher
interest rates, and so they are a a crucial part
(10:01):
of how we look at the overall macro as well
as the individual stocks.
Speaker 4 (10:05):
Let's do a case study, which is Spotify. It's an
interesting subscriber and ad based platform, profit and user growth.
Speaker 5 (10:13):
What does that tell you?
Speaker 9 (10:14):
You know, Spotify has been on quite a tear over
the last year. They've really focused on managing costs and
you know, as you know everybody's seen with the results,
those gross margin numbers were really eye popping, you know,
seeing those. The guidance for gross margin to continue higher
at twenty eight percent next quarter is definitely something that
(10:36):
we can continue to see with Spotify really, you know,
generating that revenue and the earnings growth and managing the
costs while they do that.
Speaker 4 (10:48):
The stock on track for its biggest jump since October
twenty nineteen. Are you Yoshioka, portfolio manager a wealth enhancement group.
Speaker 5 (10:55):
Thank you.
Speaker 4 (11:02):
Let's get back to Spotify earnings now. After the audio
streaming giants swung to profit in the first quarter. Bloomberg's
actually Carmens here with the details swung to profit and
subscriber growth?
Speaker 5 (11:13):
What were behind those two things?
Speaker 1 (11:17):
Over the past year, Spotify has really changed its business
today and its earnings called Daniel like the CEO, called
it the new Spotify. They reduced their costs significantly, particularly
in their podcast business, which had been weighing on margins,
and they've reduced their costs. They unfortunately did have to
reduce their headcount quite a bit, but we're seeing that
play out in that first quarter earnings for sure.
Speaker 3 (11:38):
I mean, phenomenal move in shares Ashley, and yet still
some of the forecasts maybe behind where the market and anticipated.
Is this just such a feel good factor around profitability?
Speaker 1 (11:49):
Finally, Yeah, I think the investors are really thrilled to
see that they're still growing their user base and their subscribers,
that profitability, and I mean it's worth noting that this
is happening while they've reduced the number of people working
from them, as well as increasing prices around the world
with more price increases to come. So I think investors
are just feeling like there's a lot of opportunity here.
(12:10):
For them to continue growing and squeezing more revenue out
of their users.
Speaker 4 (12:15):
Something that happened in the current period was Taylor Swift happened?
I know, I listened to the entire thing on Friday.
Did they talk about that?
Speaker 8 (12:23):
They did not.
Speaker 1 (12:24):
They did not talk about Taylor Swift, though I wish.
Speaker 3 (12:28):
But more what they perhaps are talking about is their
focus on audio from the book's perspective. Sure, they've been
pulling back in podcasting, but they still kept their heavy hitters.
I think of Joe Rogan. But what then of the
ability to charge more for audiobooks in full Ashley That
seems to be working.
Speaker 1 (12:46):
Yes, so we had reported this last week, but Daniel
Eck also mentioned this on the call today that basically,
you know, they introduced fifteen hours of audiobook listening to
subscribers in certain parts of the world, and of those
users who have had the ability to play audiobooks, twenty
five percent of them have taken advantage of their offering.
So what they're really seeing is adoption and what they
(13:07):
can do with that adoption. I mean, they could charge more,
they can break out this audiobooks only tier which they launched.
I think it's giving them a lot of room to
potentially play with the different subscription tiers once again giving
them flexibility with their users and the revenue that they
can get from.
Speaker 3 (13:22):
Them as the opportunity. Investors love it. Ashley Carmen, thanks
so much coming on talking us through what is a
key mover today. Meanwhile, sticking with earnings and those that
are companies over in Europe, SAP says it's current cloud
backlog so as fastest growth on record. This comes as
Europe's biggest software firm is actually seeking to my great
customers from its legacy on premise software to the cloud,
(13:43):
where of course it gets to offer business AI services too.
Sweetened that deal. We spoke to the CFO a little
earlier today.
Speaker 10 (13:51):
The advent of AI has clearly propelled the story of
the transformation to the cloud. To move our customers from
their on prem installations onto clouds are thing in an
uptick on a constant currency basis, and all that is
driven really by the core offering we have in the cloud,
which is called the cloud ear Peacewite. That offering has
actually generated in excess of thirty percent growth for nine
(14:12):
quarters in a row.
Speaker 11 (14:13):
Now time for talking tech first up, Elon Musk's social
network has been hit with an interim injunction by an
Australian court to remove footage of a recent terrorist attack
and hearing last night in Sydney, the Federal Court of
(14:35):
Australia ordered x to hide all recordings of the attack
until Wednesday.
Speaker 4 (14:40):
The court will then convene for a second hearing at
a later date to determine the validity of a removal
notice by the country's e Safety Commissioner. Meanwhile, ASML is
weighing options to expand its presence in the Netherlands. The
move comes after the government committed two point seven billion
dollars to infrastructure and education spending in the region. The
(15:01):
company said it's signed a letter of intent and the
final decision is subject to ironing out a few crucial
points and Perplexity Ai has raised about sixty three million
dollars in a new funding round that values the company
and more than one billion dollars. Perplexity offers an AI
chatbot that summarizes search results, list citations for its answers,
(15:22):
and helps users refine their queries to get the best responses.
The financing doubles perplexities valuation from just three months ago, Caroline.
Speaker 3 (15:31):
AI still so hot. Let's talk about AI in the
context of Adobe now, because it's bringing more generative AI
tools to Photoshop powered by it's Adobe Fileflight, Image three
Foundation model. Joining us now from their Maps Creativity conference
over in London, David Wanjani, Adobe Digital Media President, Welcome,
and you know, how is this incentivizing clients to pay
(15:53):
more for Adobe? How are you seeing generative AI really
bring about a revenue increase for the business?
Speaker 12 (15:59):
Great to be here, Caline, you know, I think we
have to put everything we're doing with generative AI in
the context of what we've been doing over the last year.
We first introduced generative AI a year ago, and in
that period of time, we've added imaging model, a vector model,
which is another very important format for a creative professionals,
(16:19):
a design model. We've enabled customization of that content for
their specific design needs or their assets that they work on,
and we've exposed that in Photoshop at our creative cloud applications.
We've exposed it in Adobe Express for marketers and creative
professionals and solentrepreneurs, and we've exposed it as APIs for
(16:39):
a broad base of automation workflows, And what this has
really done is it's supercharged content creation. If you're a
creative pro, you can produce that content much more effectively
and much more quickly. If you're trying to automate workflows,
you can do that with your existing environments that you have.
And if you're a marketer, you can react more quickly
to anything that's happening on social really empowered businesses to
(17:02):
operate at another level of scale.
Speaker 3 (17:05):
I want to talk about scale and the difficulty ultimately
of feeding data into foundational models. At the moment, you've
just been unveiling sort of the new foundational model, and
I'm interested in is what's going in because what set
you apart, particularly in the narrative of Adobe, is that
you're safer because you are building basically upon your own data,
(17:25):
your own well images that you own, your stock. But
then there was some reporting, some bloomberg ultimately that you're
having to use synthetic data which is sometimes used from
rival AI well image generators. Can you just tell us
about how clients are responding to really what your data
is being trained on right now?
Speaker 12 (17:44):
Yeah, we are, I think, without a doubt, the most
responsible training model in the market. We've been very clear
that we have full license rights for everything that we've
trained on. We have a process that we internally call
ART which is about accountability, responsibility, and transparency. So everything
we generate and any model before its hips goes through
(18:05):
this process.
Speaker 13 (18:06):
We have.
Speaker 12 (18:09):
Basically a moderation system in place so that we make
sure any content that comes in does not have or
is not encumbered with any misappropriated IP rights. And so
customers have been very very clear with us is that
there's a lot of interesting work going on around the
industry around AI models, but when it comes to true
(18:29):
production systems, we're really at the top of the marks
in terms of the ability to actually use this to
create and ship content that's generated with these models.
Speaker 4 (18:39):
David, there is only one single question that's being directed
at a Davy right now, which is when and in
what form will you have a text to video generation
platform akin to Sora.
Speaker 8 (18:53):
Yeah, I don't know.
Speaker 12 (18:54):
If you had a chance to see the announcements that
we made last week at the National American Broadcast, there's
a video series we announced and we talked about how
we are We actually gave us sneak of our text
of video capabilities as part of that, we also announced
that we're working with Sora, that we're working with Runway
(19:16):
and with Pika, and together all of these capabilities are
going to be embedded in all of our creative applications.
What's really exciting about all this text of video capability
is that we have the ability now to look at
this and say, all of this generative capabilities is analogous
to more cameras in the world, and the more content
(19:37):
that gets created, the more content comes into our systems
for editing. We've also been just as clear our technology
for video, the architecture and the research that's gone into
it is very similar to what we see out of
Sora and others, and that we expect to have our
model in market later this year.
Speaker 4 (19:56):
The strategy in Premier, and when I was at Generalism School,
i trained Premiere, So it's interesting full circle. You are
going to use third party models, and so far Photoshop
has not had the extension of that strategy. Just explain
why and what you'll do going forward.
Speaker 12 (20:14):
We are going to embrace all models. You know Photoshop
you will see again later this year.
Speaker 8 (20:20):
You will see.
Speaker 12 (20:20):
Support for any model that can be integrated into Photoshop
will be integrated into Photoshop. But we also recognize that
each model has its own personality, and at any given moment,
what you generate in one model versus another model, there
might be be varying preferences. The one thing that we
know is that Firefly is going to be, you know,
(20:40):
synonymous with the best quality of content, with the best
detail of content, and with the most controllability of that
content that's generated in particular, and that means that whatever
we create with Firefly can get more deeply embedded in
our tools. As Caroline mentioned, we just had an enormous
(21:01):
set of announcements in terms of dozens of new capabilities
of AI generation embedded in our tools and workflows, and
it's because of the way we build Firefly, but we
are embracing third party models and we anticipate and expect
to integrate those in our tools as well.
Speaker 4 (21:17):
David Worldwhinnie, Adobe Digital Media President, Great to have you on.
We're marking one year, believe it or not, since Firefly,
appreciate it. Welcome back to Bloomberg Technology. Ed Ludlow in
San Francisco.
Speaker 3 (21:35):
Anan had anyw York. Let's get a quick check on
your markets, because oh I got a little bit of
money back into the tech sector after what has been
beaten up over the last few training days. Money one
point four percent higher on the Nasdaq one hundred. We
are all bracing for the earnings narrative that comes out
thick and fast for the rest of the week, and
so far we're seeing a little bit of buying the
dip that we've seen in some of the tech names
have been beaten up, certainly from Friday into Monday. Now Tuesday,
(21:57):
now's that one hundred higher. We're seeing the two year
yield auction. We're looking at two year ye'l currently down
by almost four basis points ahead of that all important
sixty nine billion dollar auction of two year bonds foot
instead of record high Europe having a good day to
moving on, have a look at some of the individual
movers as we do anticipate some big earnings narratives for
this week. Want to shine out on Nvidia. Yes, it
was down ten percent on Friday, but Monday got bought
(22:18):
the dip. Tuesday they're buying the dip again. We're up
three point seven percent, so managing to whittle weigh some
of those losses that extended to more than two hundred
billion dollars worth of market cap lost on Friday. I'm
looking also what's happening in Microsoft at one point four percent. Yes,
we get their earnings later, but we also anticipating while
still they're focused on artificial intelligence of their own building,
They've got a smaller model that they've announced today, built
by Microsoft's own AI researchers, and that's going to be
(22:40):
able to be adopted. Finational model, use more on your
actual devices. What does that mean? It's an open source
model as well, so interesting as they continue to basically
create even with their close relationship with the likes of
Mistra and indeed of course of open AI. I'm looking
what's happening on Instacart down heavily, down by more than
seven percent. This is, as we understand, Amazon is going
to be well getting into the world a grocery delivery.
(23:02):
It's not always worked that well before ed, but still
this is the bread and butter of Instacart. It is
feeling some of the competitive threat, even though amast say, look,
there's room enough for more. A what if you've got
in the micro.
Speaker 4 (23:13):
Away from some of the public names, is a private
name that is top of mind for everyone and that
is TikTok and the legislation involving TikTok, which would bar
the Social Platform from operating in the US if it's
China based owner doesn't sell its stake within a year.
Bloomberos Kielyons is here from DC for more on the
bill on its way to the Senate. So my understanding
(23:34):
today that there's kind of a next procedural step.
Speaker 5 (23:37):
Before the kind of main event what's going to happen.
Speaker 3 (23:40):
Yeah, and that's exactly right.
Speaker 14 (23:42):
This is the United States Senate and which procedure does
loom large. So what really needs to happen in order
to get to a final passage vote is first it
must pass the closure vote that will begin later this
afternoon votes beginning around one pm Eastern times. Sixty votes
will be needed in order to advance this and then
it's going to be a question of how much debate
there is of this package, which yes, does include the
TikTok divestor band bill, but it's part of a much
(24:03):
wider bill that has ninety five billion dollars in four
and aid for US allies. So that is why a
lot of Senators may end up voting for this bill,
whether or not. They've been advocates for this kind of
legislation around TikTok in the past. Keep in mind that
a very similar bill that didn't have TikTok included already
had passed the Senate by a vote of seventy four
months ago, so it's highly likely that this ultimately will
(24:24):
pass during final passage. It really is just a question
of when how much disruption we can see from the
likes of Republican Senator Ran Paul or even Democratic Senator
Bernie Sanders. But the way the procedure goes is once
this closure vote happens, there will be a maximum of
thirty hours of debate after that. So this is highly
likely to pass the Senate, if not today, by Wednesday
at the latest.
Speaker 3 (24:43):
It's worth keeping in mind that.
Speaker 14 (24:45):
They are supposed to be on recess this week, so
it's likely that a lot of Senators are eager to
get out of Washington and to go actually take their
time off in their districts. But then, of course, it
becomes a question of what happens after this gets President
Biden's signature, because not only does this give TikTok potentially
a year to work on this divestiture. It also, we
understand plans to fight this in court. There is likely
to be a long legal battle that will play out,
(25:07):
and then a lot of remaining questions, including whether or
not China would actually sign off on any divestiture of
by Dance and the TikTok Us operation, what help happens
to the algorithm, who will be able to buy this
business without running into anti trust issues? A lot of
questions will still remain after today.
Speaker 3 (25:22):
Caroline, Kaymie, and I therefore ask a question on the
sentiment you're hearing from the people you speak to on
Capitol Hill about what this means for China in the US,
what this means for other Chinese businesses looking to will
continue to expand in the US. I think a PDD
and TIMU.
Speaker 14 (25:37):
Yeah, that's a very real concern, Caroline. Those who were
more opposed to this legislation when it first passed the
housekeeping in mind that initially it was a bill that
would see TikTok need to be invested within a six
month period. You did have some critics, including the chair
of the Senate Commerce Committee, Senator Maria campt Well, talking
about how that timeline seemed unrealistic, There were also others
who were calling attention to the fact that this is
(25:57):
a piece of legislation targeting a private business and what
kind of precedent that may set if the US is
suddenly pursuing that kind of policy. By and large, though,
it does seem that, especially among the intelligence and national
security community, they are much more concerned with those national
security issues around data privacy, the way in which the
Chinese government may be access user data from the well
(26:18):
over one hundred million Americans who are on this platform,
and also on the propagation of mis or disinformation that
could be on this platform in the run up to
the election. And it's worth keeping in mind with the
timeline that is set in this new piece of legislation,
which would be divestiture between nine months up to a
year should the President choose, that will take us well
beyond the vote in November.
Speaker 3 (26:38):
Articularly put Katie lines with all the procedural events and
indeed what this has impact longer term. We thank you.
Let's get more of a deep dive on all of this.
Doug Kelly US is with US. He's former chief of
staff to Senator Amy Klobashaw and now a fellow at
the Harvard Belfer Center, where he focuses on US tech policy,
in particularly, you're thinking around thoughtful AI policy with Americans
(26:59):
responsible innovation, Doug. I'm interested is to the nuance here
of promoting innovation at the same time as promoting safety
and will this ultimately see less social media competition here
in the US and what does that mean for innovation.
Speaker 15 (27:18):
I think the TikTok is really a unique case. You know,
it's a case we're looking at. You know, most policymakers
want a foster competition. They also have great respect for
First Amendment rights of free expression. But on both sides
of the aisle, you've seen the argument me that TikTok
is a unique national security threat, and I think when
the intelligence community comes together and makes the case that
(27:39):
this is a step that needs to be taken for
national security policy makers, buy a largele listen. I also
think it's likely that this type of BAM or holt
up in the courts for that very reason.
Speaker 8 (27:50):
But time will tell.
Speaker 5 (27:52):
Doug.
Speaker 4 (27:53):
In the divestent ban, let's go with the band scenario.
You are a student of US technology policy. You have
a CV that shows you understand the organs of government.
You explain to me how you get one hundred and
fifty million Americans to not use TikTok in a twelve
month timeline.
Speaker 15 (28:14):
You know, the way that the legislation works, it wouldn't
be an immediate on off switch. You would have the
app store beyond able to update the app. And what
makes TikTok so great is that it's so user friendly,
so over time it would degrade and people wouldn't move
to other things. I agree that if there is no
divestiture and this moves to a ban, there'd be a
(28:35):
large public outcry, but I believe that Congress will be
able to make the case.
Speaker 8 (28:39):
Okay, we gave a full year of notice.
Speaker 15 (28:42):
We made it so everything was in place for a divestiture,
and they've tried to make this painfully clear. And if
there isn't a divestiture, the question is why. I think
there will definitely be buyers. There may be anti trust concerns,
but I believe that anti trust regulators would be cognizant
of the fact that this is a forced sale and
really try to he can do to it to making
it had in. It seems likely that the Chinese government
(29:05):
has said that they are not going to be okay
with this, and they're going to stand in the way.
And if the Chinese Communist Party is standing in the
way of a divestiture, then I think that just makes
the case for the law even more clear, and Congress
really will have winter that's back in terms of public opinion.
Speaker 8 (29:19):
But I agree it could be messy.
Speaker 15 (29:20):
There are a lot of people who really rely on
TikTok for their livelihood and if there isn't a divestiture
and a band goes through, there's gonna be a lot
of pain. But there are other options, and I think
this is something that Congress beliefe is worth it in
the long run, even though it could be difficult.
Speaker 3 (29:34):
Doug talk to us about the other options and whether
there are enough of them. Some of the sudden question
marks about how swiftly a potential ban or divest would
go through was because former President Trump suddenly highlighting concerns
around Meta ultimately becoming more powerful in his mind's eye
without TikTok? Is that a concern for you? Do you
(29:55):
think there's enough competition out there? Do you think just
more will be bred?
Speaker 8 (30:00):
That is a concern.
Speaker 15 (30:01):
I believe that with Instagram and with Facebook, you know,
Meta really does have you know, a major position here,
and they will be well poised to consolidate control if
TikTok is taken off the table. And I think that's
something that a lot of policymakers don't want to see.
But here because the national security concerns they're willing to
countenance not possibly happening. There are other also competitors in
(30:24):
the space. We could see things spring up. I think
that you know, TikTok's really became a phenomenon because its
algorithm is so good and it gave users what they wanted.
Speaker 8 (30:34):
But that's not secret now.
Speaker 15 (30:35):
I mean, the algorithm itself is secret, But what they're
using to try to drive engagement and really make it
fun and easy to use and very social are things
that other social platforms can copy. Now, and TikTok were
no longer a competitor than I think you would see
other apps spring up to try to do the same thing.
Speaker 4 (30:53):
Doug, finally, go back to your experience of advising a
senator put that hat on. What is the benefit to
a lawmaker going strong on the anti China rationale of
doing this if their constituents are saying, hey, I love TikTok.
(31:14):
I use TikTok.
Speaker 5 (31:17):
They have to then go back and.
Speaker 4 (31:18):
Explain why they're doing this, all told ahead of an
election cycle.
Speaker 15 (31:24):
He's right, that's difficult, and I think the reason it
works is because the leading lawmakers all held hands and said,
this is something we really care about. The bill came
through the House committee unanimously with no one posing. That
almost never happens, and that shows how broad the support
it is. The vote in the House was very strong.
You had some members on the far right and the
(31:45):
far left to a pose, but most of them voted
for it.
Speaker 8 (31:48):
And you're going to see a similar thing here in
the Senate.
Speaker 15 (31:50):
And you know, if there's one thing that lawmakers like,
it's political covering. And when they can actually hold hands
and do something difficult altogether, it makes it much easier
for each one of them go back to their district
and set of the constituents.
Speaker 8 (32:02):
Is something that needed to be done.
Speaker 4 (32:04):
From the political to the tech policy. Doug, I think
you were well placed to explain all of that to us.
Stud kalidas part of a Belfa Center fellow, of course,
chief of staff for Amy Klovich previously Okay, coming up
Apple sales in China slide in the country as the
company faces it's worst starts the year since COVID. That's
according to some third party data. We'll talk about that
again next character.
Speaker 3 (32:25):
Let's just look at shares of other social media companies
right now, Trump Media and Technology in particular. Now we
understand the blank check deal has brought Donald Trump's media
startup Public is now going to give him another one
point three billion dollars in stock after meeting certain targets.
Now these sources of weakness, they're common and as part
of the special purposition purpose acquisition companies the spack deals,
(32:47):
but ultimately with thirty six million in additional shares in
mark for him, bring a total position to nearly one
hundred and fifteen million shares, currently down by some nine
percent on Trump Media and Tech. This is Blue Medtechnology.
Speaker 5 (33:09):
Okay, let's get back to Apple.
Speaker 4 (33:10):
I find sales fell in China by nineteen percent during
the March quarter, worst performance in that market since twenty twenty,
according to data from independent research firm Counterpoint Bloomberg Intelligence.
And this Amak Grana is here to give his thesis.
I'd note that the stock actually even with the perceived
negative headline, isn't reacting negatively. I guess maybe that's because
(33:32):
it's a situation we've been aware of for a little while.
Speaker 5 (33:36):
Yeah, I know absolutely So.
Speaker 13 (33:37):
One of the numbers I will you know, request you
to remember is IDC came out a little while ago,
a couple of weeks ago and said the global shipments
are down about ten percent for Apple. So I think
a lot of what we see today is already accounted
for in that big number. So it's going to be
fun to see what happens next week when Apple reports,
and our eyes are mostly on the guidance for three
(33:59):
Q or the next quarter more than what's happening in
the current quarter.
Speaker 3 (34:03):
Interesting, for the current quarter, just to remind our viewers,
we're expecting what a five percent decrease in overall revenues.
That's according to our earning expectations over at Bloomberg when
they consolidate all of the analysts. But for the next
quarter after that, there's going to be growth two percent
growth there or thereabouts.
Speaker 4 (34:21):
Right.
Speaker 3 (34:21):
What drives that is this the new unveiling of certain
iPads that we're likely to get May seventh.
Speaker 13 (34:27):
So that's where we think there could be you know,
maybe a little bit of a risk in terms of
estimates coming down because when you look at estimates right now,
iPhone estimates for the current quarter or the results that's
coming out next to next week. Is iPhone revenue down
eleven percent? Now, we think if the shipments were down
ten percent, then the iPhone revenue may be slightly better
(34:47):
than that in a sense that it could be down,
you know, eight nine percent or so, because we all
know that the Promax model is doing well and it
has higher price, so the ASP goes up for next quarter.
We are looking at iPhone, you done just two percent. Now,
if the stuff that's happening in China continues, then that
number could go down. I think that's weird, a little
(35:07):
bit of a riskers in terms of forward estimates for Apple.
And that's going to be the biggest thing that we
follow is what is company going to say about the
reception of the phone in you know for the next quarter.
Speaker 3 (35:19):
May second love that you push us forward to that
and the earnings after the boll Anna Agrana on Roomberg,
Intelligence and all things Apple. We so appreciate his expertise.
Speaker 4 (35:35):
Quick news story Elon Musk's social platform x is launching
a TV app, pushing deeper into video as it takes
on the likes of YouTube. X didn't confirm a date
for the platform's released, but said it would be quote
coming soon to most smart TVs. The company also talks
about the ability to cast video from smartphones to bigger
TV screens through the app, a move that, of course
(35:57):
Google and Amazon have made in recent months as well.
Speaker 3 (36:00):
Carolyn, Yeah, let's stick on all things in a muster amendment.
Is time for Tesla earnings Bingo card game from the
Elon Inc. Podcast team over at Business Week and here
with us for more than other than Bloomberg Business Weeks,
Max Chafkin, we're doing it again. You did it in
the previous earnings and there were all sorts of fun
things that you had to sort of shout Bingo. Whether
(36:20):
he's saying union, whether he's saying Tesla is an AI company,
whether he's saying dojo. This time, I'm pretty sure Robotaxi
is gonna be one of those keeping co works.
Speaker 6 (36:27):
Robotaxi is there. We've got We've got a few others.
We've got Horse up there. I believe it's in oh one,
which is a reference to the fact that Elon said
owning a horse, sorry, owning a non ROBOTAXI will be
like owning a horse in fifteen years.
Speaker 2 (36:41):
We'll see if he says.
Speaker 6 (36:42):
That on the earnings call, it should be you know,
it's obviously this is a huge earnings day for Tesla.
A lot of dark news going on, but we're trying to.
Speaker 2 (36:50):
Keep it light.
Speaker 5 (36:52):
Max.
Speaker 4 (36:52):
I think we should be honest with the audience that
you and I have come in for a bit of
stick on social media about some of the selections we made.
That's okay, is specific to this earning school. You and
I have been trying to guess the likely outcome the row.
You're thinking right now, please, well, I.
Speaker 5 (37:10):
Think you got to.
Speaker 2 (37:11):
You gotta look at the central square.
Speaker 6 (37:13):
That's the free space, of course for for regular bingo players.
I think the in line going down looks pretty promising.
You've got interest rates obviously been a huge issue groc
Elon Musk has has mentioned the possibility of integrating Twitter's
AI assistant in the Tesla cars reasonably optimistic.
Speaker 2 (37:30):
He says that all the time, and of course.
Speaker 6 (37:32):
Advertising, which has been a big issue of for Tesla
late because they've had these demand challenges.
Speaker 2 (37:37):
So that's my pick your pick.
Speaker 3 (37:40):
I mean, I want to know how close anyone came
last time. It wasn't. It wasn't an out and out
win on some of the choices. Which ones are you
a little bit more concerned than my not coming up?
Speaker 2 (37:51):
We Yeah, we got pretty close last time.
Speaker 6 (37:53):
I think in a good bingo game, you want some
You don't want it to be a gimme, you want
you want a little bit of tension, you know. I
think balls to the wall, which was Elon Musk's phrase
for how they're approaching Robotaxi.
Speaker 2 (38:06):
I would be surprised if that.
Speaker 6 (38:08):
Appears during this earnest call, although Elon Musk loves these
kind of extremely hardcore, these metaphors that convey just how
hard he's pushing, so you never know. That would be
I five for those who are playing at home.
Speaker 4 (38:19):
By the way, okay, let's look at the bingo carda
final time. But there is a serious point to this
that actually investors have a lot of questions and there
is a lot of unknown you and I tried to
go over this on the Elon inc Podcast due out
this afternoon, and Robotaxi is at the heart of it.
I get the sense Max that Musk has been busy
(38:39):
for a few months. He's come back to Tesla, and
he's decided to focus having realized that things weren't to.
Speaker 5 (38:44):
His liking at that company.
Speaker 6 (38:46):
You'll take please, yeah, absolutely, I think that is certainly
what's going on. I mean, just looking at his social
media handle, you can see that his attention has been elsewhere,
and it's you know, it's understandable that he'd come back
or sort of snap in focus and see a company
that in many ways seems to be in crisis. You know,
we've seen the stock fall pretty dramatically over the first
(39:08):
few months of the year. You know, these huge issues
with inventory piling up, questions about demand, so there are
things to worry about, and he is leaning into robotaxes,
as you said, ed, because of course that is this
kind of like huge bet which Elon Musk likes, that
could potentially turn this whole thing around, that could really
separate Tesla from some of these other electric cars that
(39:30):
are coming to market right now and that you know,
people are getting excited about, are also getting good reviews.
Speaker 4 (39:35):
Max for our millions of Bloomberg Technology audience members around
the world make the case for why they should follow
us along during earnings and how they can follow along
this evening.
Speaker 6 (39:45):
So you can follow along on the Bloomberg dot com
live blog on the terminal. Ed and I will be
playing this game, you know, like crazy on social and
hopefully offering, you know, while we have fun, offering some
you know, half decent commentary to help you.
Speaker 2 (40:00):
Is this because of course this is a huge company.
This is a big issue.
Speaker 6 (40:03):
This is one of the largest companies in the world
by market cap and where.
Speaker 2 (40:07):
Elon Musk goes from here is going to affect us all.
So we'll be paying attention to that as well.
Speaker 3 (40:12):
Surning with share prices so well under pressure to say
the very least, this year all important for those investors
being them. Business Week's master chef can making light of
what will be a very serious earnings called the Elon
in podcast drops later today. Go check it out with
our own Ed Ludlow on it. Meanwhile, some breaking news
from you coming regarding TikTok. This is about Ed the
EU focus on TikTok.
Speaker 9 (40:34):
Now.
Speaker 3 (40:34):
EU had issued TikTok basically twenty four hours to be
able to send over a risk assessment for its new app.
That's TikTok Light, which it had issued in Spain and France.
Now we understand that bike Dance says it has sent
a TikTok Light risk assessment report to the EU. All
of this just highlighting the ongoing regulatory focus for this
particular social media company that opened a new probe the
(40:56):
EU had on Monday basically threatening fines of up to
light one percent of total annual income if they didn't
give a particular risk assessment for TikTok like they say,
it potentially violated the block's new content law when it
was launched. Overall, remember this is kind of like a
less heavy from a memory perspective version of TikTok, but
also it pays you to play, and there was some
(41:18):
addiction worries coming from Thierry Breton over in the EU.
So all eyes on TikTok later today here in the
United States as well. That olimportant discussion in the Senate.
But for now, that does it for this edition of
Blue Meat Technology.
Speaker 4 (41:30):
Yet, don't forget to recap on the podcast earning seasons
kicked off in Ernest. I know we're very excited about
the megacat names in Tesla, but Spotify my goodness, what
a great report from Ashley Carmen out in New York City.
We're publishing the pod to Apple, Spotify, iHeart, and of
course all of the Bloomberg platforms from San Francisco and
New York City.
Speaker 5 (41:50):
This is Bloomberg Technology.
From Mahart.
Speaker 2 (00:02):
We're Innovation, Money and Power Collie in Silicon Vallet NBN.
Speaker 3 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
I'm Caroline Hyder Bloomberg's World headquarters in New York, and I'm.
Speaker 4 (00:28):
Ed Lodlow in San Francisco. This is Bloomberg Technology coming up.
Speaker 3 (00:31):
Apple faces its worst start to the year in China
that since the COVID pandemic, as new reports shows sales
fell by nineteen percent in the first quarter.
Speaker 4 (00:40):
Plus the Senate is set to consider the ninety five
billion dollar aid package that could lead to a nationwide
ban on TikTok if not divested.
Speaker 5 (00:48):
We'll go on the ground to Washington and we.
Speaker 3 (00:50):
Put your head to Tesla earnings after the Bella's investors
brace for Musk to nix the roll out of a
cheaper model and refocus on developing a robotax shares already
suffering their long routes is twenty twenty two. We'll discussed
that and so much more throughout this hour. But even
as we sit with much anticipation of the earnings to come,
we managed to see some risk appetite in the market today.
(01:11):
Maybe the bad news is good news from a macro
perspective today, maybe some of that business activity actually cooling
off more than the market anticipated means well we decide
to go into equities as we think the Federals of
maybe has more space to be cutting in the second
half of the year. Now's THATAK currently off up one
and a half percent, but remember we've been beaten up,
particularly at the end of last week two year yield
(01:32):
big auction sixty nine billion dollars worth record amount coming
to the market, yet still yields managing to be falling today.
That's so as we see money move into some of
the havens we're seeing four point ninety three there are thereabouts,
so interesting that we've got equities rallying and indeed Bob
Market's rallying on this particular day. Stocks six hundred over
in Europe also having a stellar run. On the moment,
we're up a percentage point, notably UK call out for
(01:54):
them the footsy one hundred crentyet a new record high.
And that's actually as we see some of the haven
stocks there actually do well amid some of the geopolitical tensions.
We have a look overall at money moving into both
risk asset classes, and indeed it's a good old bitcoin,
but four ten percent at the moment, we're currently at
sixty eight hundred and forty nine, so well off. The
highs are still money coming in despite a relatively strong dollar.
Speaker 6 (02:16):
Ed.
Speaker 3 (02:16):
What for you've got coming up on the micro.
Speaker 4 (02:17):
Are earnings and a lot of individual individual tech names.
Tesla's getting a boost ahead of earnings. After the bell,
we will play Oh get ready to play Tesla Bingo.
Tune in at the end of the show to find
out what I'm talking about. Spotify swing to profit, strong
sub subscriber growth, Bloomberg's actually Carmen's going to join us.
This is a name that a lot of people watching.
Look at the big jump in the shares and then
Adobe's higher. It's the one year anniversary since Firefly was released.
(02:41):
I think there's big questions about particularly text to video generation.
We have a key interview with an Adobe executive. Then
there's Apple, so Apple's interesting. We're now higher, maybe four
tens one percent in the session. We had open lower,
but basically we're trading at the same level on Apple
we were one year ago. It has been a difficult start.
Speaker 5 (02:59):
To the year.
Speaker 4 (03:00):
Concern principally about China. Third party data Counterpoint Research shows
that iPhone sales in China down nineteen percent one nine.
More interesting, perhaps, is the other data outside of Apple
showing domestic handset makers gaining market share. Apple has fallen
to third and it's on par with Huawei, which is
(03:20):
kind of resurgent at the higher end of the smartphone market.
Speaker 5 (03:24):
The data doesn't seem to be worrying.
Speaker 2 (03:26):
Anyone right now.
Speaker 4 (03:27):
We continue to push higher in the session, but big
picture ahead of earnings later on next week, Apple in focus.
Let's talk to none other than Bloomberg's chief Apple correspondent,
Mark German. We stress third party data. It is not
Apple telling us this, but there's a bit of concern
that China is still the key battleground and the iPhone
is losing ground mark.
Speaker 7 (03:50):
This is exactly what Wall Street and investors have been
bracing for another big decline in China. As you know,
Apple had its biggest decline in a cup of years
last quarter related to overall China sales, and now it
looks like you're going to see another decline in China
given this data from Counterpoint Research. Now, as I typically say,
(04:11):
these data points are typically not exactly on the money,
but they're usually directionally correct. So if they're telling us
that iPhone sales in China are down by a fifth,
I would believe that iPhone sales in China are down
quite considerably, not maybe as bad as nineteen percent, but
in all likelihood they're going to be down, bringing down
of the overall picture in China. Now, why is that
(04:32):
partcurely interesting? Because even though China had about a two
billion dollar decline in the prior quarter, Tim Cook on
the earnings call said, that's not because of the iPhone,
it's because of Apple's other products that they sell in China. Well,
this timearound, it's likely because the iPhone. If these numbers
are to be believed to be.
Speaker 3 (04:49):
Believed, let's talk about other products. Because we've kind of
got signaling on all of this before IDC another third
party data giving us a similar picture. What's new on
day mark? Is it?
Speaker 2 (05:01):
Well?
Speaker 3 (05:01):
May seventh, we've got a new event and it's all
around those new iPads.
Speaker 7 (05:06):
Yeah, as I've been saying on here and on power
on the last several weeks, Apple is set to launch
its biggest free damp to the iPad in over five years.
You're going to see new versions of the iPad air
in the iPad pro introduced on May seventh. They're going
to play a video on their website. They're trying something
new here, a video starting time of seven am versus
(05:27):
the usual ten am, and they're announcing this video well
in advance. They've been trying some different things lately. Their
usual cadence is to announce these things seven days in advance,
So now we're getting a full two weeks, which is
quite interesting. Maybe they want a little bit more momentum
leading into that they're trying to see for these smaller
scale launches if more advanced notice brings in more people.
(05:50):
So this is certainly going to look out for new
iPad pro, new iPad Air, new Apple pencil, new Magic keyboards,
all coming about one month before they announced their new
AA initiatives at the Worldwide Developers Conference in early June.
Speaker 8 (06:03):
So this is going to be significant.
Speaker 7 (06:05):
In the hope, if you're on Wall Street or a
shareholder of the company, is that this is going to
boost iPad sales, which have been down quite considerably the
last several quarters due to a lack of any updates
across twenty twenty three.
Speaker 3 (06:19):
And they're in lines a lot of the issue, a
lack of update and certainly weakness in China. Mark German
always telling us as telling us at first reappreciate it. Meanwhile,
let's continue the conversation now on basically where you should
sit with Apple when you're an investor, Ioka, you're Yoshi Yoka. Sorry,
get my words out today, portfolio manager over at Wealth
Enhancement Group in the house with us, Ioka. When you're
(06:41):
looking at Apple, when you've seen some of the weakness,
the worries about product updates, about perhaps behind the curve
when it comes to AI, is this still such a
solid name that you cannot avoid but to remain allocated
to it, would you start to take some risk off?
Speaker 9 (06:56):
It's a great question, Caroline. So you know, when we
look at Apple, it is a great company. It's got
a high quality balance sheet. There's so much cash on
their balance sheet and that allows them.
Speaker 3 (07:07):
To buy back a lot of stock.
Speaker 9 (07:08):
It's a big position within the S and P five
hundred index, so it is difficult to not own it.
And yet we do start to see some of these
issues with Apple in terms of innovation and then being
able to really bring new products that can continue to
grow at the pace that they have been growing over.
Speaker 3 (07:25):
The last several years. And I think this is some
of the tension we're seeing across the so called Magnificent seven,
those that are deemed less than magnificent for some still
managing to do very well. When we're worried about a
Tesla and Apple, which in many ways have very similar
issues China weakness, competition coming from China, worries about ultimately
a lack of an update from a product, is it more. Therefore,
(07:46):
you have to look at valuations rather than trying to
see a narrative as to when you get the next product.
Speaker 9 (07:52):
I think it's the combination of both valuation and then
just future growth. I think both Apple and Tesla are
suffering from, you know, the issues that you talked about,
and that's dampening their overall growth going forward, and so
valuation for that lower growth is a little bit higher
than everybody would like to.
Speaker 5 (08:11):
Pay the OCO. If the megacaps don't beat, what happens.
Speaker 9 (08:18):
You know, I think there could be a little bit
of another sort of sell off in the market. We
saw it last week and a half, you know. Ever
since the inflation print, and I think we do need
to see a lot of these larger names Microsoft, Amazon, Google, Meta.
They need to come out and show us that they
(08:38):
can continue to grow at the pace that they can grow,
and show that free cash flow growth so that people
can continue to rely on them for that quality growth.
Speaker 5 (08:48):
Do you get this sense here?
Speaker 4 (08:49):
Okay, this is the quarter where we look past the
AI height and we start again to look at fundamentals.
Did you have earnings growth? How is your free cash flow?
Boring things like that?
Speaker 9 (09:02):
You know, I think it's going to be a combination
of both ed in terms of you know, you have
to produce those numbers. Those fundamentals are going to matter,
but everybody wants to look at the future and say, well,
can you continue to produce those quality numbers that we've seen.
So AI continues to be, you know, a tailwind that
everybody wants to see production out of and further continuance
(09:26):
of that revenue and earnings growth.
Speaker 3 (09:29):
When you are seeing such a run up in big
tech of late, how much you thinking about the macro,
thinking about the data that we got today.
Speaker 4 (09:39):
Oh?
Speaker 9 (09:39):
Absolutely, I think the macro always contributes to the overall
market narrative. You know, the larger cap names just tend
to be at the very top of the funnel, per se,
and they are technically those long duration assets that everybody
likes to talk about and are most impacted by higher
interest rates, and so they are a a crucial part
(10:01):
of how we look at the overall macro as well
as the individual stocks.
Speaker 4 (10:05):
Let's do a case study, which is Spotify. It's an
interesting subscriber and ad based platform, profit and user growth.
Speaker 5 (10:13):
What does that tell you?
Speaker 9 (10:14):
You know, Spotify has been on quite a tear over
the last year. They've really focused on managing costs and
you know, as you know everybody's seen with the results,
those gross margin numbers were really eye popping, you know,
seeing those. The guidance for gross margin to continue higher
at twenty eight percent next quarter is definitely something that
(10:36):
we can continue to see with Spotify really, you know,
generating that revenue and the earnings growth and managing the
costs while they do that.
Speaker 4 (10:48):
The stock on track for its biggest jump since October
twenty nineteen. Are you Yoshioka, portfolio manager a wealth enhancement group.
Speaker 5 (10:55):
Thank you.
Speaker 4 (11:02):
Let's get back to Spotify earnings now. After the audio
streaming giants swung to profit in the first quarter. Bloomberg's
actually Carmens here with the details swung to profit and
subscriber growth?
Speaker 5 (11:13):
What were behind those two things?
Speaker 1 (11:17):
Over the past year, Spotify has really changed its business
today and its earnings called Daniel like the CEO, called
it the new Spotify. They reduced their costs significantly, particularly
in their podcast business, which had been weighing on margins,
and they've reduced their costs. They unfortunately did have to
reduce their headcount quite a bit, but we're seeing that
play out in that first quarter earnings for sure.
Speaker 3 (11:38):
I mean, phenomenal move in shares Ashley, and yet still
some of the forecasts maybe behind where the market and anticipated.
Is this just such a feel good factor around profitability?
Speaker 1 (11:49):
Finally, Yeah, I think the investors are really thrilled to
see that they're still growing their user base and their subscribers,
that profitability, and I mean it's worth noting that this
is happening while they've reduced the number of people working
from them, as well as increasing prices around the world
with more price increases to come. So I think investors
are just feeling like there's a lot of opportunity here.
(12:10):
For them to continue growing and squeezing more revenue out
of their users.
Speaker 4 (12:15):
Something that happened in the current period was Taylor Swift happened?
I know, I listened to the entire thing on Friday.
Did they talk about that?
Speaker 8 (12:23):
They did not.
Speaker 1 (12:24):
They did not talk about Taylor Swift, though I wish.
Speaker 3 (12:28):
But more what they perhaps are talking about is their
focus on audio from the book's perspective. Sure, they've been
pulling back in podcasting, but they still kept their heavy hitters.
I think of Joe Rogan. But what then of the
ability to charge more for audiobooks in full Ashley That
seems to be working.
Speaker 1 (12:46):
Yes, so we had reported this last week, but Daniel
Eck also mentioned this on the call today that basically,
you know, they introduced fifteen hours of audiobook listening to
subscribers in certain parts of the world, and of those
users who have had the ability to play audiobooks, twenty
five percent of them have taken advantage of their offering.
So what they're really seeing is adoption and what they
(13:07):
can do with that adoption. I mean, they could charge more,
they can break out this audiobooks only tier which they launched.
I think it's giving them a lot of room to
potentially play with the different subscription tiers once again giving
them flexibility with their users and the revenue that they
can get from.
Speaker 3 (13:22):
Them as the opportunity. Investors love it. Ashley Carmen, thanks
so much coming on talking us through what is a
key mover today. Meanwhile, sticking with earnings and those that
are companies over in Europe, SAP says it's current cloud
backlog so as fastest growth on record. This comes as
Europe's biggest software firm is actually seeking to my great
customers from its legacy on premise software to the cloud,
(13:43):
where of course it gets to offer business AI services too.
Sweetened that deal. We spoke to the CFO a little
earlier today.
Speaker 10 (13:51):
The advent of AI has clearly propelled the story of
the transformation to the cloud. To move our customers from
their on prem installations onto clouds are thing in an
uptick on a constant currency basis, and all that is
driven really by the core offering we have in the cloud,
which is called the cloud ear Peacewite. That offering has
actually generated in excess of thirty percent growth for nine
(14:12):
quarters in a row.
Speaker 11 (14:13):
Now time for talking tech first up, Elon Musk's social
network has been hit with an interim injunction by an
Australian court to remove footage of a recent terrorist attack
and hearing last night in Sydney, the Federal Court of
(14:35):
Australia ordered x to hide all recordings of the attack
until Wednesday.
Speaker 4 (14:40):
The court will then convene for a second hearing at
a later date to determine the validity of a removal
notice by the country's e Safety Commissioner. Meanwhile, ASML is
weighing options to expand its presence in the Netherlands. The
move comes after the government committed two point seven billion
dollars to infrastructure and education spending in the region. The
(15:01):
company said it's signed a letter of intent and the
final decision is subject to ironing out a few crucial
points and Perplexity Ai has raised about sixty three million
dollars in a new funding round that values the company
and more than one billion dollars. Perplexity offers an AI
chatbot that summarizes search results, list citations for its answers,
(15:22):
and helps users refine their queries to get the best responses.
The financing doubles perplexities valuation from just three months ago, Caroline.
Speaker 3 (15:31):
AI still so hot. Let's talk about AI in the
context of Adobe now, because it's bringing more generative AI
tools to Photoshop powered by it's Adobe Fileflight, Image three
Foundation model. Joining us now from their Maps Creativity conference
over in London, David Wanjani, Adobe Digital Media President, Welcome,
and you know, how is this incentivizing clients to pay
(15:53):
more for Adobe? How are you seeing generative AI really
bring about a revenue increase for the business?
Speaker 12 (15:59):
Great to be here, Caline, you know, I think we
have to put everything we're doing with generative AI in
the context of what we've been doing over the last year.
We first introduced generative AI a year ago, and in
that period of time, we've added imaging model, a vector model,
which is another very important format for a creative professionals,
(16:19):
a design model. We've enabled customization of that content for
their specific design needs or their assets that they work on,
and we've exposed that in Photoshop at our creative cloud applications.
We've exposed it in Adobe Express for marketers and creative
professionals and solentrepreneurs, and we've exposed it as APIs for
(16:39):
a broad base of automation workflows, And what this has
really done is it's supercharged content creation. If you're a
creative pro, you can produce that content much more effectively
and much more quickly. If you're trying to automate workflows,
you can do that with your existing environments that you have.
And if you're a marketer, you can react more quickly
to anything that's happening on social really empowered businesses to
(17:02):
operate at another level of scale.
Speaker 3 (17:05):
I want to talk about scale and the difficulty ultimately
of feeding data into foundational models. At the moment, you've
just been unveiling sort of the new foundational model, and
I'm interested in is what's going in because what set
you apart, particularly in the narrative of Adobe, is that
you're safer because you are building basically upon your own data,
(17:25):
your own well images that you own, your stock. But
then there was some reporting, some bloomberg ultimately that you're
having to use synthetic data which is sometimes used from
rival AI well image generators. Can you just tell us
about how clients are responding to really what your data
is being trained on right now?
Speaker 12 (17:44):
Yeah, we are, I think, without a doubt, the most
responsible training model in the market. We've been very clear
that we have full license rights for everything that we've
trained on. We have a process that we internally call
ART which is about accountability, responsibility, and transparency. So everything
we generate and any model before its hips goes through
(18:05):
this process.
Speaker 13 (18:06):
We have.
Speaker 12 (18:09):
Basically a moderation system in place so that we make
sure any content that comes in does not have or
is not encumbered with any misappropriated IP rights. And so
customers have been very very clear with us is that
there's a lot of interesting work going on around the
industry around AI models, but when it comes to true
(18:29):
production systems, we're really at the top of the marks
in terms of the ability to actually use this to
create and ship content that's generated with these models.
Speaker 4 (18:39):
David, there is only one single question that's being directed
at a Davy right now, which is when and in
what form will you have a text to video generation
platform akin to Sora.
Speaker 8 (18:53):
Yeah, I don't know.
Speaker 12 (18:54):
If you had a chance to see the announcements that
we made last week at the National American Broadcast, there's
a video series we announced and we talked about how
we are We actually gave us sneak of our text
of video capabilities as part of that, we also announced
that we're working with Sora, that we're working with Runway
(19:16):
and with Pika, and together all of these capabilities are
going to be embedded in all of our creative applications.
What's really exciting about all this text of video capability
is that we have the ability now to look at
this and say, all of this generative capabilities is analogous
to more cameras in the world, and the more content
(19:37):
that gets created, the more content comes into our systems
for editing. We've also been just as clear our technology
for video, the architecture and the research that's gone into
it is very similar to what we see out of
Sora and others, and that we expect to have our
model in market later this year.
Speaker 4 (19:56):
The strategy in Premier, and when I was at Generalism School,
i trained Premiere, So it's interesting full circle. You are
going to use third party models, and so far Photoshop
has not had the extension of that strategy. Just explain
why and what you'll do going forward.
Speaker 12 (20:14):
We are going to embrace all models. You know Photoshop
you will see again later this year.
Speaker 8 (20:20):
You will see.
Speaker 12 (20:20):
Support for any model that can be integrated into Photoshop
will be integrated into Photoshop. But we also recognize that
each model has its own personality, and at any given moment,
what you generate in one model versus another model, there
might be be varying preferences. The one thing that we
know is that Firefly is going to be, you know,
(20:40):
synonymous with the best quality of content, with the best
detail of content, and with the most controllability of that
content that's generated in particular, and that means that whatever
we create with Firefly can get more deeply embedded in
our tools. As Caroline mentioned, we just had an enormous
(21:01):
set of announcements in terms of dozens of new capabilities
of AI generation embedded in our tools and workflows, and
it's because of the way we build Firefly, but we
are embracing third party models and we anticipate and expect
to integrate those in our tools as well.
Speaker 4 (21:17):
David Worldwhinnie, Adobe Digital Media President, Great to have you on.
We're marking one year, believe it or not, since Firefly,
appreciate it. Welcome back to Bloomberg Technology. Ed Ludlow in
San Francisco.
Speaker 3 (21:35):
Anan had anyw York. Let's get a quick check on
your markets, because oh I got a little bit of
money back into the tech sector after what has been
beaten up over the last few training days. Money one
point four percent higher on the Nasdaq one hundred. We
are all bracing for the earnings narrative that comes out
thick and fast for the rest of the week, and
so far we're seeing a little bit of buying the
dip that we've seen in some of the tech names
have been beaten up, certainly from Friday into Monday. Now Tuesday,
(21:57):
now's that one hundred higher. We're seeing the two year
yield auction. We're looking at two year ye'l currently down
by almost four basis points ahead of that all important
sixty nine billion dollar auction of two year bonds foot
instead of record high Europe having a good day to
moving on, have a look at some of the individual
movers as we do anticipate some big earnings narratives for
this week. Want to shine out on Nvidia. Yes, it
was down ten percent on Friday, but Monday got bought
(22:18):
the dip. Tuesday they're buying the dip again. We're up
three point seven percent, so managing to whittle weigh some
of those losses that extended to more than two hundred
billion dollars worth of market cap lost on Friday. I'm
looking also what's happening in Microsoft at one point four percent. Yes,
we get their earnings later, but we also anticipating while
still they're focused on artificial intelligence of their own building,
They've got a smaller model that they've announced today, built
by Microsoft's own AI researchers, and that's going to be
(22:40):
able to be adopted. Finational model, use more on your
actual devices. What does that mean? It's an open source
model as well, so interesting as they continue to basically
create even with their close relationship with the likes of
Mistra and indeed of course of open AI. I'm looking
what's happening on Instacart down heavily, down by more than
seven percent. This is, as we understand, Amazon is going
to be well getting into the world a grocery delivery.
(23:02):
It's not always worked that well before ed, but still
this is the bread and butter of Instacart. It is
feeling some of the competitive threat, even though amast say, look,
there's room enough for more. A what if you've got
in the micro.
Speaker 4 (23:13):
Away from some of the public names, is a private
name that is top of mind for everyone and that
is TikTok and the legislation involving TikTok, which would bar
the Social Platform from operating in the US if it's
China based owner doesn't sell its stake within a year.
Bloomberos Kielyons is here from DC for more on the
bill on its way to the Senate. So my understanding
(23:34):
today that there's kind of a next procedural step.
Speaker 5 (23:37):
Before the kind of main event what's going to happen.
Speaker 3 (23:40):
Yeah, and that's exactly right.
Speaker 14 (23:42):
This is the United States Senate and which procedure does
loom large. So what really needs to happen in order
to get to a final passage vote is first it
must pass the closure vote that will begin later this
afternoon votes beginning around one pm Eastern times. Sixty votes
will be needed in order to advance this and then
it's going to be a question of how much debate
there is of this package, which yes, does include the
TikTok divestor band bill, but it's part of a much
(24:03):
wider bill that has ninety five billion dollars in four
and aid for US allies. So that is why a
lot of Senators may end up voting for this bill,
whether or not. They've been advocates for this kind of
legislation around TikTok in the past. Keep in mind that
a very similar bill that didn't have TikTok included already
had passed the Senate by a vote of seventy four
months ago, so it's highly likely that this ultimately will
(24:24):
pass during final passage. It really is just a question
of when how much disruption we can see from the
likes of Republican Senator Ran Paul or even Democratic Senator
Bernie Sanders. But the way the procedure goes is once
this closure vote happens, there will be a maximum of
thirty hours of debate after that. So this is highly
likely to pass the Senate, if not today, by Wednesday
at the latest.
Speaker 3 (24:43):
It's worth keeping in mind that.
Speaker 14 (24:45):
They are supposed to be on recess this week, so
it's likely that a lot of Senators are eager to
get out of Washington and to go actually take their
time off in their districts. But then, of course, it
becomes a question of what happens after this gets President
Biden's signature, because not only does this give TikTok potentially
a year to work on this divestiture. It also, we
understand plans to fight this in court. There is likely
to be a long legal battle that will play out,
(25:07):
and then a lot of remaining questions, including whether or
not China would actually sign off on any divestiture of
by Dance and the TikTok Us operation, what help happens
to the algorithm, who will be able to buy this
business without running into anti trust issues? A lot of
questions will still remain after today.
Speaker 3 (25:22):
Caroline, Kaymie, and I therefore ask a question on the
sentiment you're hearing from the people you speak to on
Capitol Hill about what this means for China in the US,
what this means for other Chinese businesses looking to will
continue to expand in the US. I think a PDD
and TIMU.
Speaker 14 (25:37):
Yeah, that's a very real concern, Caroline. Those who were
more opposed to this legislation when it first passed the
housekeeping in mind that initially it was a bill that
would see TikTok need to be invested within a six
month period. You did have some critics, including the chair
of the Senate Commerce Committee, Senator Maria campt Well, talking
about how that timeline seemed unrealistic, There were also others
who were calling attention to the fact that this is
(25:57):
a piece of legislation targeting a private business and what
kind of precedent that may set if the US is
suddenly pursuing that kind of policy. By and large, though,
it does seem that, especially among the intelligence and national
security community, they are much more concerned with those national
security issues around data privacy, the way in which the
Chinese government may be access user data from the well
(26:18):
over one hundred million Americans who are on this platform,
and also on the propagation of mis or disinformation that
could be on this platform in the run up to
the election. And it's worth keeping in mind with the
timeline that is set in this new piece of legislation,
which would be divestiture between nine months up to a
year should the President choose, that will take us well
beyond the vote in November.
Speaker 3 (26:38):
Articularly put Katie lines with all the procedural events and
indeed what this has impact longer term. We thank you.
Let's get more of a deep dive on all of this.
Doug Kelly US is with US. He's former chief of
staff to Senator Amy Klobashaw and now a fellow at
the Harvard Belfer Center, where he focuses on US tech policy,
in particularly, you're thinking around thoughtful AI policy with Americans
(26:59):
responsible innovation, Doug. I'm interested is to the nuance here
of promoting innovation at the same time as promoting safety
and will this ultimately see less social media competition here
in the US and what does that mean for innovation.
Speaker 15 (27:18):
I think the TikTok is really a unique case. You know,
it's a case we're looking at. You know, most policymakers
want a foster competition. They also have great respect for
First Amendment rights of free expression. But on both sides
of the aisle, you've seen the argument me that TikTok
is a unique national security threat, and I think when
the intelligence community comes together and makes the case that
(27:39):
this is a step that needs to be taken for
national security policy makers, buy a largele listen. I also
think it's likely that this type of BAM or holt
up in the courts for that very reason.
Speaker 8 (27:50):
But time will tell.
Speaker 5 (27:52):
Doug.
Speaker 4 (27:53):
In the divestent ban, let's go with the band scenario.
You are a student of US technology policy. You have
a CV that shows you understand the organs of government.
You explain to me how you get one hundred and
fifty million Americans to not use TikTok in a twelve
month timeline.
Speaker 15 (28:14):
You know, the way that the legislation works, it wouldn't
be an immediate on off switch. You would have the
app store beyond able to update the app. And what
makes TikTok so great is that it's so user friendly,
so over time it would degrade and people wouldn't move
to other things. I agree that if there is no
divestiture and this moves to a ban, there'd be a
(28:35):
large public outcry, but I believe that Congress will be
able to make the case.
Speaker 8 (28:39):
Okay, we gave a full year of notice.
Speaker 15 (28:42):
We made it so everything was in place for a divestiture,
and they've tried to make this painfully clear. And if
there isn't a divestiture, the question is why. I think
there will definitely be buyers. There may be anti trust concerns,
but I believe that anti trust regulators would be cognizant
of the fact that this is a forced sale and
really try to he can do to it to making
it had in. It seems likely that the Chinese government
(29:05):
has said that they are not going to be okay
with this, and they're going to stand in the way.
And if the Chinese Communist Party is standing in the
way of a divestiture, then I think that just makes
the case for the law even more clear, and Congress
really will have winter that's back in terms of public opinion.
Speaker 8 (29:19):
But I agree it could be messy.
Speaker 15 (29:20):
There are a lot of people who really rely on
TikTok for their livelihood and if there isn't a divestiture
and a band goes through, there's gonna be a lot
of pain. But there are other options, and I think
this is something that Congress beliefe is worth it in
the long run, even though it could be difficult.
Speaker 3 (29:34):
Doug talk to us about the other options and whether
there are enough of them. Some of the sudden question
marks about how swiftly a potential ban or divest would
go through was because former President Trump suddenly highlighting concerns
around Meta ultimately becoming more powerful in his mind's eye
without TikTok? Is that a concern for you? Do you
(29:55):
think there's enough competition out there? Do you think just
more will be bred?
Speaker 8 (30:00):
That is a concern.
Speaker 15 (30:01):
I believe that with Instagram and with Facebook, you know,
Meta really does have you know, a major position here,
and they will be well poised to consolidate control if
TikTok is taken off the table. And I think that's
something that a lot of policymakers don't want to see.
But here because the national security concerns they're willing to
countenance not possibly happening. There are other also competitors in
(30:24):
the space. We could see things spring up. I think
that you know, TikTok's really became a phenomenon because its
algorithm is so good and it gave users what they wanted.
Speaker 8 (30:34):
But that's not secret now.
Speaker 15 (30:35):
I mean, the algorithm itself is secret, But what they're
using to try to drive engagement and really make it
fun and easy to use and very social are things
that other social platforms can copy. Now, and TikTok were
no longer a competitor than I think you would see
other apps spring up to try to do the same thing.
Speaker 4 (30:53):
Doug, finally, go back to your experience of advising a
senator put that hat on. What is the benefit to
a lawmaker going strong on the anti China rationale of
doing this if their constituents are saying, hey, I love TikTok.
(31:14):
I use TikTok.
Speaker 5 (31:17):
They have to then go back and.
Speaker 4 (31:18):
Explain why they're doing this, all told ahead of an
election cycle.
Speaker 15 (31:24):
He's right, that's difficult, and I think the reason it
works is because the leading lawmakers all held hands and said,
this is something we really care about. The bill came
through the House committee unanimously with no one posing. That
almost never happens, and that shows how broad the support
it is. The vote in the House was very strong.
You had some members on the far right and the
(31:45):
far left to a pose, but most of them voted
for it.
Speaker 8 (31:48):
And you're going to see a similar thing here in
the Senate.
Speaker 15 (31:50):
And you know, if there's one thing that lawmakers like,
it's political covering. And when they can actually hold hands
and do something difficult altogether, it makes it much easier
for each one of them go back to their district
and set of the constituents.
Speaker 8 (32:02):
Is something that needed to be done.
Speaker 4 (32:04):
From the political to the tech policy. Doug, I think
you were well placed to explain all of that to us.
Stud kalidas part of a Belfa Center fellow, of course,
chief of staff for Amy Klovich previously Okay, coming up
Apple sales in China slide in the country as the
company faces it's worst starts the year since COVID. That's
according to some third party data. We'll talk about that
again next character.
Speaker 3 (32:25):
Let's just look at shares of other social media companies
right now, Trump Media and Technology in particular. Now we
understand the blank check deal has brought Donald Trump's media
startup Public is now going to give him another one
point three billion dollars in stock after meeting certain targets.
Now these sources of weakness, they're common and as part
of the special purposition purpose acquisition companies the spack deals,
(32:47):
but ultimately with thirty six million in additional shares in
mark for him, bring a total position to nearly one
hundred and fifteen million shares, currently down by some nine
percent on Trump Media and Tech. This is Blue Medtechnology.
Speaker 5 (33:09):
Okay, let's get back to Apple.
Speaker 4 (33:10):
I find sales fell in China by nineteen percent during
the March quarter, worst performance in that market since twenty twenty,
according to data from independent research firm Counterpoint Bloomberg Intelligence.
And this Amak Grana is here to give his thesis.
I'd note that the stock actually even with the perceived
negative headline, isn't reacting negatively. I guess maybe that's because
(33:32):
it's a situation we've been aware of for a little while.
Speaker 5 (33:36):
Yeah, I know absolutely So.
Speaker 13 (33:37):
One of the numbers I will you know, request you
to remember is IDC came out a little while ago,
a couple of weeks ago and said the global shipments
are down about ten percent for Apple. So I think
a lot of what we see today is already accounted
for in that big number. So it's going to be
fun to see what happens next week when Apple reports,
and our eyes are mostly on the guidance for three
(33:59):
Q or the next quarter more than what's happening in
the current quarter.
Speaker 3 (34:03):
Interesting, for the current quarter, just to remind our viewers,
we're expecting what a five percent decrease in overall revenues.
That's according to our earning expectations over at Bloomberg when
they consolidate all of the analysts. But for the next
quarter after that, there's going to be growth two percent
growth there or thereabouts.
Speaker 4 (34:21):
Right.
Speaker 3 (34:21):
What drives that is this the new unveiling of certain
iPads that we're likely to get May seventh.
Speaker 13 (34:27):
So that's where we think there could be you know,
maybe a little bit of a risk in terms of
estimates coming down because when you look at estimates right now,
iPhone estimates for the current quarter or the results that's
coming out next to next week. Is iPhone revenue down
eleven percent? Now, we think if the shipments were down
ten percent, then the iPhone revenue may be slightly better
(34:47):
than that in a sense that it could be down,
you know, eight nine percent or so, because we all
know that the Promax model is doing well and it
has higher price, so the ASP goes up for next quarter.
We are looking at iPhone, you done just two percent. Now,
if the stuff that's happening in China continues, then that
number could go down. I think that's weird, a little
(35:07):
bit of a riskers in terms of forward estimates for Apple.
And that's going to be the biggest thing that we
follow is what is company going to say about the
reception of the phone in you know for the next quarter.
Speaker 3 (35:19):
May second love that you push us forward to that
and the earnings after the boll Anna Agrana on Roomberg,
Intelligence and all things Apple. We so appreciate his expertise.
Speaker 4 (35:35):
Quick news story Elon Musk's social platform x is launching
a TV app, pushing deeper into video as it takes
on the likes of YouTube. X didn't confirm a date
for the platform's released, but said it would be quote
coming soon to most smart TVs. The company also talks
about the ability to cast video from smartphones to bigger
TV screens through the app, a move that, of course
(35:57):
Google and Amazon have made in recent months as well.
Speaker 3 (36:00):
Carolyn, Yeah, let's stick on all things in a muster amendment.
Is time for Tesla earnings Bingo card game from the
Elon Inc. Podcast team over at Business Week and here
with us for more than other than Bloomberg Business Weeks,
Max Chafkin, we're doing it again. You did it in
the previous earnings and there were all sorts of fun
things that you had to sort of shout Bingo. Whether
(36:20):
he's saying union, whether he's saying Tesla is an AI company,
whether he's saying dojo. This time, I'm pretty sure Robotaxi
is gonna be one of those keeping co works.
Speaker 6 (36:27):
Robotaxi is there. We've got We've got a few others.
We've got Horse up there. I believe it's in oh one,
which is a reference to the fact that Elon said
owning a horse, sorry, owning a non ROBOTAXI will be
like owning a horse in fifteen years.
Speaker 2 (36:41):
We'll see if he says.
Speaker 6 (36:42):
That on the earnings call, it should be you know,
it's obviously this is a huge earnings day for Tesla.
A lot of dark news going on, but we're trying to.
Speaker 2 (36:50):
Keep it light.
Speaker 5 (36:52):
Max.
Speaker 4 (36:52):
I think we should be honest with the audience that
you and I have come in for a bit of
stick on social media about some of the selections we made.
That's okay, is specific to this earning school. You and
I have been trying to guess the likely outcome the row.
You're thinking right now, please, well, I.
Speaker 5 (37:10):
Think you got to.
Speaker 2 (37:11):
You gotta look at the central square.
Speaker 6 (37:13):
That's the free space, of course for for regular bingo players.
I think the in line going down looks pretty promising.
You've got interest rates obviously been a huge issue groc
Elon Musk has has mentioned the possibility of integrating Twitter's
AI assistant in the Tesla cars reasonably optimistic.
Speaker 2 (37:30):
He says that all the time, and of course.
Speaker 6 (37:32):
Advertising, which has been a big issue of for Tesla
late because they've had these demand challenges.
Speaker 2 (37:37):
So that's my pick your pick.
Speaker 3 (37:40):
I mean, I want to know how close anyone came
last time. It wasn't. It wasn't an out and out
win on some of the choices. Which ones are you
a little bit more concerned than my not coming up?
Speaker 2 (37:51):
We Yeah, we got pretty close last time.
Speaker 6 (37:53):
I think in a good bingo game, you want some
You don't want it to be a gimme, you want
you want a little bit of tension, you know. I
think balls to the wall, which was Elon Musk's phrase
for how they're approaching Robotaxi.
Speaker 2 (38:06):
I would be surprised if that.
Speaker 6 (38:08):
Appears during this earnest call, although Elon Musk loves these
kind of extremely hardcore, these metaphors that convey just how
hard he's pushing, so you never know. That would be
I five for those who are playing at home.
Speaker 4 (38:19):
By the way, okay, let's look at the bingo carda
final time. But there is a serious point to this
that actually investors have a lot of questions and there
is a lot of unknown you and I tried to
go over this on the Elon inc Podcast due out
this afternoon, and Robotaxi is at the heart of it.
I get the sense Max that Musk has been busy
(38:39):
for a few months. He's come back to Tesla, and
he's decided to focus having realized that things weren't to.
Speaker 5 (38:44):
His liking at that company.
Speaker 6 (38:46):
You'll take please, yeah, absolutely, I think that is certainly
what's going on. I mean, just looking at his social
media handle, you can see that his attention has been elsewhere,
and it's you know, it's understandable that he'd come back
or sort of snap in focus and see a company
that in many ways seems to be in crisis. You know,
we've seen the stock fall pretty dramatically over the first
(39:08):
few months of the year. You know, these huge issues
with inventory piling up, questions about demand, so there are
things to worry about, and he is leaning into robotaxes,
as you said, ed, because of course that is this
kind of like huge bet which Elon Musk likes, that
could potentially turn this whole thing around, that could really
separate Tesla from some of these other electric cars that
(39:30):
are coming to market right now and that you know,
people are getting excited about, are also getting good reviews.
Speaker 4 (39:35):
Max for our millions of Bloomberg Technology audience members around
the world make the case for why they should follow
us along during earnings and how they can follow along
this evening.
Speaker 6 (39:45):
So you can follow along on the Bloomberg dot com
live blog on the terminal. Ed and I will be
playing this game, you know, like crazy on social and
hopefully offering, you know, while we have fun, offering some
you know, half decent commentary to help you.
Speaker 2 (40:00):
Is this because of course this is a huge company.
This is a big issue.
Speaker 6 (40:03):
This is one of the largest companies in the world
by market cap and where.
Speaker 2 (40:07):
Elon Musk goes from here is going to affect us all.
So we'll be paying attention to that as well.
Speaker 3 (40:12):
Surning with share prices so well under pressure to say
the very least, this year all important for those investors
being them. Business Week's master chef can making light of
what will be a very serious earnings called the Elon
in podcast drops later today. Go check it out with
our own Ed Ludlow on it. Meanwhile, some breaking news
from you coming regarding TikTok. This is about Ed the
EU focus on TikTok.
Speaker 9 (40:34):
Now.
Speaker 3 (40:34):
EU had issued TikTok basically twenty four hours to be
able to send over a risk assessment for its new app.
That's TikTok Light, which it had issued in Spain and France.
Now we understand that bike Dance says it has sent
a TikTok Light risk assessment report to the EU. All
of this just highlighting the ongoing regulatory focus for this
particular social media company that opened a new probe the
(40:56):
EU had on Monday basically threatening fines of up to
light one percent of total annual income if they didn't
give a particular risk assessment for TikTok like they say,
it potentially violated the block's new content law when it
was launched. Overall, remember this is kind of like a
less heavy from a memory perspective version of TikTok, but
also it pays you to play, and there was some
(41:18):
addiction worries coming from Thierry Breton over in the EU.
So all eyes on TikTok later today here in the
United States as well. That olimportant discussion in the Senate.
But for now, that does it for this edition of
Blue Meat Technology.
Speaker 4 (41:30):
Yet, don't forget to recap on the podcast earning seasons
kicked off in Ernest. I know we're very excited about
the megacat names in Tesla, but Spotify my goodness, what
a great report from Ashley Carmen out in New York City.
We're publishing the pod to Apple, Spotify, iHeart, and of
course all of the Bloomberg platforms from San Francisco and
New York City.
Speaker 5 (41:50):
This is Bloomberg Technology.
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