May 6, 2024 • 43 mins
Bloomberg's Caroline Hyde gauges the health of technology earnings with 80% of S&P 500 companies out with results. Plus, as Buffet cuts his stake, we push ahead to Apple's product event as the company prepares to launch new iPads, and Anduril founder Palmer Luckey joins for an exclusive interview on the company's new AI-powered products.
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Episode Transcript
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Speaker 1 (00:01):
From Mahard where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 2 (00:06):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3 (00:24):
I'm Caroline Heidel, Bloomberg's World headquarters in New York. Ed
Ludlow's off This is Bloomberg Technology coming up. We engage
the health of technology earnings with eighty percent of S
and P five companies out with results. And as Buffett
cuts his steak, we'll push your head to Apple's product
event as the company prepares to launch new iPads plus,
we speak to andrel founder.
Speaker 4 (00:46):
Palmer Lucky as a company announces.
Speaker 3 (00:48):
A brand new range of AI powered products. But first
let's check in on these markets and look, we have
a post fed feeling of well optimism in the markets
that feel so. We don't have an awful lot of
economic data on the table. We do have some significant
bondishuents ten yure yields holding steady. We're four point five
percent the nawstak managing to push up to six tens
(01:09):
ofven percent, notably seeing the S and P five hundred
breaking some of those technical levels of where we've seen
an average and trade over the last fifty days.
Speaker 4 (01:15):
So there seems to be some boyant moves and risk
on attitude.
Speaker 3 (01:18):
Not though in bitcoin, though crypto off by nine tens
of percent, we're seeing sixty three one hundred and fifty
five is currently where we trade.
Speaker 4 (01:24):
Move it on though, and when it comes to encrypto.
Speaker 3 (01:25):
Related news will be digging into what's happened.
Speaker 4 (01:27):
With Robin Herd.
Speaker 3 (01:28):
Of course, wells notice received SEC looking at particularly it's
crypto sales that it currently does up seven tens percent,
despite of course announcing that the SEC may well be
looking into its business. Apple down seven tens percent. This
is all post of course, the oracle of Omaha over
Warren Buffett saying, look, I'm pulling back on the steak
in Apple, even though he did shower its praise over
(01:49):
the business, really loving the iPhone product. But nevertheless, we
look ahead to new products, new iPads. Push ahead with
that in Mark German in a moment, but in Vidia
up two point six percent. I want to shine like
more broadly on some of each makers because we are
seeing a lot of movement higher the socks, for example
trading high and Vidia is still yet to report that
comes May twenty May twenty second. We also get arm
(02:10):
this week. There is still so much to be said
for earnings. The earning season well underway. Results from about
eighty percent of the S and P five hundred already
in technology communication services companies, they're beating profit estimates.
Speaker 4 (02:22):
Roughly ninety percent of.
Speaker 3 (02:23):
Teching communication services companies actually topped earnings estimates, according to
Day to combined by Bloomberg. When get all the statistics,
Bloomberg's jestmenton is with us and pleased to say, and
just more broadly, it feels as though when companies have
beat have they really outperformed? I mean, Apple was a
massive sigh of relief when we saw the stock rally,
but how has that been bearing up?
Speaker 5 (02:43):
So you can actually see this function in Bigo, So
Gina Marrit Adams team ver in that function and you
can see basically on the equities there. So when you're
looking at how starks in aggregate from the S and
P five hundred have been performing in excess of the
broader index, they actually it's basically kind of appeals in
comparison to how they have been in prior quarters. But nonetheless,
because of Apple on Friday, when you see this now
(03:05):
the S and P five hundred since earning season basically
got into full swing with JP Morgan back on April twelfth.
Now it's up close to about one percent in that span.
It had been about lower than one percent prior to
Apple's earnings results. So now you're starting to see that
pick up a bit just on the back of obviously
these big tech bell weathers. But to your point, Caroline,
we still have Nvidia coming up.
Speaker 4 (03:25):
On May twenty second, I know, and there was so
much optimism baked in.
Speaker 3 (03:30):
What about those that have missed, I mean, they've been
punished hot, have they and have have been any themes
as to why they've missed.
Speaker 5 (03:36):
Well, that's a great point too, because a lot of
that also has to do with more forward looking guidance.
And that's why because as we know, when you do
think about first quarter earnings results, that is more backward looking.
So when it comes to the guidance, that's where it
has been disappointing. And then, of course, because this is
a technology program, obviously a lot of traders and investors
want to know when those cost cutting efforts that have
really helped propel any sort of big tech company or
(03:59):
especially anything that is tied to that, especially as when
you think back to Meta at the end of twenty
twenty two when it started its first big job cuts
entranch there and then another one last spring. How much
longer can this continue? So if you look at the
bifunction though on a twelve month aggregate basis, seal site
analysts are still marking up their projections for technology companies
and growth companies too, But a lot of those laggards
like healthcare and utilities, those are actually starting.
Speaker 3 (04:21):
To pick up too now maybe with the effect of AI.
Many wanted to just see that impact. How the industry
groups just lastly give us the sentence of whether companies
have already been rewarding shareholders, because that felt like why
a lot of the reason Apple popped it was because
we got a massive buyback was starting to see companies
give dividends. I mean, you triggered my memory with the
fact that Meta didn't this time, but they did in
the pre setting season.
Speaker 5 (04:42):
That's always usually music to trader's ears there. But also
the big thing about buybacks is also when you look
at what's happening with Capex and reinvesting into those businesses,
so just beyond that, So that's something that investors want
to see more of as far as what are companies
doing to reinvest beyond just those buyback programs, But we
have seen a number of companies in a especially to
your point, Caroline, looking at Apple with that historic buyback announcement.
(05:04):
Of course it still has to execute those, but we
still have when you're thinking about what potential catalysts could
come for Apple. Obviously we know in early June we'll
have the Worldwide Developers Conference, but I know Mark German
from Bloomberg is coming up soon, so he's going to
talk about the big event tomorrow where potentially we could
can see some more new iPads that are coming out.
Speaker 3 (05:20):
Caroline, let Mark loose at the moment of the HANJ
just meant and brilliant to have your round level what's
been happening in.
Speaker 4 (05:25):
Terms of the earning season.
Speaker 3 (05:27):
We actually want to get aroun investors take care as well.
Uncle Crawlford's with us executive vice president for Phodio manager
over at algia twenty five billion dollars NASA's under management,
and Uncle Apple actually one of your biggest holdings. You
have been cutting that a little bit across some of
your funds. Water Muffett doing the same thing. How have
you interpreted, for example, a company such as Apple's results
(05:47):
and ultimately the growth trajectory of a business like that.
Speaker 6 (05:50):
Look, Apple is a consumer utility, and one of the
things about Apple has been that they has been slower
in adopting this AI cycle. So the hope is that
at some point they will catch up and they will
be a FEST follower, which we strongly believe that they will.
But in the near term, there are other companies that
are more immediately investing in and procuring AI type revenues
(06:14):
that is propelling growth.
Speaker 4 (06:15):
Okay, let's talk through some of those names.
Speaker 3 (06:17):
I mean, we've heard from Alphabet, from Amazon, from Meta,
all of them. The capec spend their making are they
building the reward in return for that investment?
Speaker 6 (06:27):
From your perspective, absolutely, It's the number one thing that
we have been looking at through this earning season has
been capex and how these companies are spending their capex.
We wholeheartedly expected them to have a big CABEC CAPEX
number through twenty twenty four, and they're even talking about
twenty twenty five. And this to us is the leading
(06:48):
indicator of what's to come in AI because they wouldn't
be building this CAPEX unless they saw the demand trends.
I would remind you that during earning season, both Microsoft
and Amazon talked about how they were limited on capacity
of GPUs. So this again, I mean people keep asking
like the where is the application.
Speaker 4 (07:07):
Someone is using those GPUs?
Speaker 6 (07:09):
They're all used up already, the hundreds of millions that
have always been already been spent.
Speaker 3 (07:12):
And of course benefits from the desire for GPUs. It's
going to be in video, right, I mean, is that
the number one play for you? Have you been looking
at well a MD or indeed looking at the design
element with M Yeah.
Speaker 6 (07:25):
So I think a lot of boat boats are going
to rise over the next decade, and a lot of
boats are rising now. So it will it be a
winner take all market. It's not going to be a
winner take all market. There will be many different winners.
Nvidia is going to be the winner take most however,
and we are really excited about what Nvidia is doing
(07:47):
in terms of not only software development, but how they're
changing the network in order to make data centers more efficient.
So they're reaching out beyond just chips into the price
networking and software as well, so that sets up a
really great note for them and makes us very bullish
(08:09):
on Nvidia.
Speaker 3 (08:10):
I mean, it's one of your number one holdings across
some of your largest funds. I note that you've also
been starting new funds and ETF in particular, trying to
execute on this AI theme. Can you talk us through
some of the names and perhaps why not automatically consider
the AI play that you've been adding to.
Speaker 6 (08:25):
Yeah, so you know there's two companies in the industrial space,
Vertive and Quantu Services, both of which are you know,
they used to be relatively slow growth companies but are
now levered to the AI play. Vertive makes cooling systems
for data centers, and Quanta I actually I joke that
(08:45):
these are ditch diggers or their pool climbers, because they
effectively distribute or make the transmission for electricity.
Speaker 4 (08:53):
Both of these.
Speaker 6 (08:54):
Things are going to be to have radically changing competitive
dynamics in that, for example, for Quanta, we don't have
enough electricity, so we expect to see utility capex start
to rise incrementally over the next five to seven years,
all of which will service the people that implement the
transmission lines.
Speaker 4 (09:15):
For Vertive, you have a.
Speaker 6 (09:17):
Very changing dynamic on the cooling aspect of the data
center and vertive ends up being the net winner.
Speaker 3 (09:26):
And God, that's really interesting because we're hearing again and
again that this is a worry for example of Sam
Altman been going around the Middle East in particular, worrying
that the key anxiety, the kid bottlenecks here are energy
and indeed access to GPU. That's why there's been so
much reporting of the fact that he's trying to build
up other chip makers. How have you been thinking about
(09:48):
ultimately that actually being the key bottleneck? Do you agree
that energy is going to be the real issue here,
limiting factor?
Speaker 6 (09:54):
I think that technology is pretty amazing in that as
you forward, I mean, as we stand today, is energy
going to be a bottleneck?
Speaker 4 (10:03):
It is.
Speaker 6 (10:04):
However, as you move forward two three and four years,
the energy efficiency efforts that are occurring, not only at
the chip level but at the data center level are
quite significant, and we think that the technology on cooling
and electricity will keep up and not hamper.
Speaker 4 (10:23):
The growth of the industry.
Speaker 6 (10:25):
So, for example, if you look at the performance per
want of the B one hundred, which is Nvidia's newest chip,
it's actually significantly more efficient than the older generations, and
so as you move through time, I do believe that
on a performance per want basis, you end up getting
(10:45):
more efficiency than is currently baked in by the market.
Speaker 4 (10:49):
What is the market getting?
Speaker 3 (10:52):
Two wigsubun Do you believe any view that the hype
has made market capitalizations unsustainable in certain names?
Speaker 6 (11:01):
I don't think the market is exuberant right now. And
and you know everyone always asks like, are we in
a bubble? Are we in an AI bubble? And I
would say it's much too early. This is very much
like you know, it's revolutionary in terms of what is
about to happen. So, you know, I was just look
at the valuations across across the mag seven this morning.
Speaker 4 (11:23):
You look at Meta.
Speaker 6 (11:24):
Meta currently trades at a ten percent discount to the
market on our twenty twenty five earnings. Actually it might
be a fifteen percent discount now that it's pulled back
so much. That to me, for UH, a company that
is going to change the way that we interact as
consumers with AI and how businesses interact with consumers is
(11:45):
not an egregious multiple. You know, you can go down
the list with Amazon. Amazon doesn't trade at that egregious
so multiple to the market, especially as they're showing leverage.
You know, you look at Microsoft Microsoft again, if you
look at twenty twenty six numbers, it trades at a
five percent free CASHUW yield. So to me, these aren't
really set up as bubble esque type valuations, and we're
(12:06):
not terribly exuberant, especially after this fallback.
Speaker 4 (12:10):
Well said Uncle Crawford.
Speaker 3 (12:11):
Really great to get your perspective as someone who is
holding a lot of these names, investing in and indeed
adding to we thank you, Uncle Crawford of algia.
Speaker 4 (12:19):
Great way to kick off this week.
Speaker 3 (12:20):
Meanwhile, coming up, Apple preparing to unveil a new lineup
of vipe as we're just talking about. It's the product
launch called Let's Loose as tomorrow we're gonna be previewing
the event. Next Meanwhile, let's just look at GameStop, which
is moving for no apparent reason. Again, you know, it's
the og meme stock. We're down some thirteen percent last week.
Of course it was rallying hard. I mean ended Friday's
(12:43):
session up about twenty nine percent. That seems to be
a real well desired to be getting in and out
on this key meme name once again, we'll keep an
eye for you. This will blue Bid Technology. Berkshire hathawayn
Hel does annual meeting over the weekend, of course, and
(13:05):
Apple quickly became one of the biggest topics as the
meeting unfolded. Warren Buffett here praise the company, calling the
iPhone one of the greatest products of all time.
Speaker 4 (13:14):
That was after revealing h kind of steak.
Speaker 3 (13:16):
Berkshire reported a one hundred and thirty five point four
billion dollar holding in Apple at the end of the
first quarter, down.
Speaker 4 (13:22):
From one hundred and seventy four zero point three billion
at the year end.
Speaker 3 (13:26):
Now, meanwhile, whole news when it comes to Apple and
fox Conn, which of course assembles the majority of iPhones,
posted its strongest monthly sales growth since the start of
twenty twenty three. And just look at what the impact
I had on the shares potentially of course, raising those
expectations for iPhones for a server sales. I spoke it
all down and push your heead tomorrow's event. Of course,
all regarding the iPad Springberg's Mark Guman here with us
(13:47):
and on high or fox Conn, however you want to
talk about it, always a great tell we'd been worried
about its previous earnings. But now it looks that from
a month to month basis on year on year monthly posting,
we're getting record say for the company.
Speaker 7 (14:02):
If you look at the prior quarter, han Hi's revenue,
their expectations, their forecasts.
Speaker 2 (14:08):
Weren't so hot, right.
Speaker 7 (14:09):
And then you saw Apple reveal its iPhone sales for
the previous quarter last week, and you saw the iPhone
come in about five billion dollars down on a year
of a year basis.
Speaker 2 (14:19):
Right.
Speaker 7 (14:19):
But looking ahead to the June quarter, the current window
that we're in, Apple set it expects revenue to grow
low single digits, right, so growing for the first time
in a couple quarters. Here, and fox CON's expectations for
this quarter as well, it seems to align with that,
given that they still assemble the vast majority of iPhones
via fox Con. Now not only iPhones driving that han
(14:42):
high revenue, it's also development and manufacturing of AI servers
for various companies. However, I don't believe that the AI
servers that fox Coon is building are connected to Apple's
AI announcement coming in June. For all intentsive purposes, the
AI from Apple will be on device at least from
the get go, and probably using third party infrastructure, not
(15:03):
something they're creating on their own. But one day I
do expect Apple to move to its own AI server environment.
Speaker 3 (15:08):
Oh interesting, Okay, And therefore talk to us about the
long term commitment to Apple and indeed perhaps a pullback
coming from what is its third biggest shareholder, Berkshire Hathaway saying, look,
we are pulling and trimming back, but they still seem
to believe in Apple as a key tech winner.
Speaker 2 (15:23):
Yeah.
Speaker 7 (15:24):
I think Buffett does seem to believe Apple is a
key tech winner. I mean Buffett in his typical process
for which stocks he buys.
Speaker 2 (15:31):
Apple is right up his alley. Right, You're not.
Speaker 7 (15:33):
Going to see Apple grow tenfold or to some significant
degree at this point, but you know that it's more
likely than not that you're going to get solid returns
off this company. You're not going to lose your money.
It's certainly better than putting your money in a bond
market or in a mutual fund in most cases. So
it is a very safe pick Apple, I think for
(15:53):
many quarters to come, despite the fact that it's not
going to be a high flyer or anything like that.
Speaker 3 (15:58):
I meant one hundred and ten billion dollar share by
that many feeling that that's the tell it's a value
stock now rather than a growth stock mark. But I'm
interested in away from the arbitrary way in which we
describe whether you buy into this stock. We are all
caring about the products and the unveilings, and we're going
to get some.
Speaker 7 (16:18):
Yeah, that's right. Tomorrow Tuesday, seven am Pacific time, t
am Eastern time, is there let loose iPad product launch.
There's going to be a few things coming. One is
a revamped version of the iPad Pro. This will be
the most significant update to the company's tablet since the
current model was launched in twenty eighteen. You're also going
to see a new iPad Air. Why is that important, Well,
(16:40):
in addition to a spec bump, you're getting a bigger
iPad Air, something closer to the size of a MacBook
Air for the screen, a twelve point nine inch display.
This will be the first time that Apple's offering a
twelve point nine inch iPad at that mid tier price
point right and at that mid tier product line. So
that's a big deal as Apple looks to make it
iPads more like Max and expand the product line there,
(17:03):
and then you're going to see them rebuild the ecosystem
around its iPads. It's two key new accessories. Is going
to be a new Magic keyboard, a higher end version
that makes the iPad pro look more like a laptop
all in use, something that's a bit more durable and convenient.
The second thing is a pro version of the Apple pencil,
so a new higher end skew of its Apple pencil silence.
(17:24):
That's a really popular accessory that artists and creatives and
others like to use for drawing. The new version will
have some new gestures so you can squeeze on it
to have certain commands. Apples homepage was updated this morning
where you can use an Apple pencil a virtual pencil
to erase the logo on Apples homepage, which might imply
that the pencil's finally getting an eraser on the back
(17:46):
like a classic number two pencil. And the other thing
I've written that we'll have is hap to feedback, so
when you use the pencil, it'll vibrate back on your finger,
so you know what you're doing based on tactile feedback.
So that's going to be a pretty nissed the update
as well. And I think overall, for iPad fans, especially
those who've been waiting many, many, many months, even years
(18:08):
for a revamp version of iPad Pro, tomorrow is going
to be quite an exciting product launch for them.
Speaker 3 (18:13):
I love playing Mark German bingo of all the things
that you've just told us and playing it out tomorrow
when they all come to life. We thank you, Lumog's
Mark German on all things Apple and iPad.
Speaker 4 (18:31):
Time now for talking tech.
Speaker 3 (18:32):
First up Chinese self driving firm Momenta, but as far
confidentially for an IPO in the United States calling to
sources and it may happen as early as this year now.
The company was founded in twenty sixteen by a team
of AI engineers from Microsoft Research Asia, and its backers
include General Motors and Tamasek Plus. The Biden Administration is
opening applications for two hundred and eighty five million dollars
(18:54):
in federal funding set up an institute focused on digital
twin technology for the chip industry. This technology can leverage
AI to help reduce development and manufacturing costs. And Jack Dawsey,
when he's left the board of social networking service Blue Sky,
which he of course, helped fund and popularize.
Speaker 4 (19:10):
A year ago, in the week of Coin of some
regret over.
Speaker 3 (19:12):
The sale of Twitter to Elon musk Now, the Twitter
co founder took to now x to tout his new
philanthropic grants to open Internet protocols, which he described as
quote freedom technology. In fact, he said that X is
such a freedom technology. Now, let's turn our attention to
the French tech company Atos now.
Speaker 4 (19:31):
It says it has received some.
Speaker 3 (19:33):
Four proposals to restore the group to financial health, including
one it already rejected from main Capital.
Speaker 4 (19:40):
Now the firm is seeking to reach a deal by
the end of.
Speaker 3 (19:43):
The month to inject fresh funds after clients have actually
begun to hold off business.
Speaker 4 (19:46):
The latest bidders to throw their hats into the ring.
Speaker 3 (19:49):
Are check billionaire Danielle Kratinski and David Leani's one point,
let's break it all downs, Benoir, butterlo is with us
and Benoir just remind us this is a company that's
sort of incredibly integraly in the tech space in France
and ultimately the government was to make sure that it survives.
Speaker 8 (20:07):
Yeah, it's been a darling of the French tech scene
and a major blue chip indexed company in France. It
used to have a market capitalization of fifteen billion. It's
now down to two hundred millions. It's got lots of
problem and it's in indeed a key IT company. It
has one hundred thousand employees ten billion of revenues last year,
(20:31):
many key customers around the world. The IT for the
Olympic Games for example upcoming in Paris this summer, but
also key defense activities for just the French defense industry.
It also has supercomputers that help the nuclear industries. So
the French government, seeing the trouble of the company, finally
(20:51):
decided to make a bid on that part of the company.
The more strategic activities.
Speaker 4 (20:57):
Talk us through the rivals here.
Speaker 3 (20:59):
Some of the key players, as we mentioned, mentioned a
couple of billionaires during their hasten the ring.
Speaker 8 (21:04):
Exactly. So one of the bids is actually from the
bondholders of the company. They want to be center stage here,
They want to be key in deciding who's going to
be the winner, so they are open to partner with
an anchor shareholder, and this could be either the check
billionaire Daniel Kretinski. He's been known to buy sort of
(21:27):
unloved assets assets that need structuring. He started in energy.
He's been to retail in France. He already made a
bid to buy retailer Casino. It was with a test
the credit Fund. And he's teaming up with Attesta again
to make a bid for Atos. And then there is
(21:47):
David Laianis, a French entrepreneur. He has a much smaller
IT company called one Point and he's teaming with Butler Industries,
another investor in France to buy the company and in
a plen that he's calling one. So it's sort of
down to a race between these two.
Speaker 3 (22:07):
We'll see how the race continues. Renoir Blo, we thank
you so much. Welcome back to Blue Mel Technology. I'm
Caroline hired in New York. Let's get a quick check
on these markets because it's a little bit of optimism
out there. On the day we're managing to see a
higher tuned than as that one hundred and six tens percent.
(22:28):
After we see well perhaps a quietening in overall economic data,
but a ramp up in discussion coming from the Federal Reserve,
after we got a little bit more of a tamer
comments coming out of Chair Power the market trying to
even bait back in some of those rate cuts for
the rest of the year. We're seeing the MSCI or
country world in next on the higher side too. Really,
we've seen money move into the European assets and indeed
(22:49):
Asian on the day Bitcoin though.
Speaker 4 (22:50):
Not finding the love for the risk on feeling.
Speaker 3 (22:53):
We're down to sixty three, three and ninety two currently
up down by just five ten percent though so small change.
Speaker 4 (22:58):
Let's move on and have a.
Speaker 3 (22:59):
Look at else was moving in the world of crypto
and individual companies, because well, more broadly, we have seen
the chip sector doing particularly well on the day, seeing
in video Ramphi, I was seeing Micron getting an upgrade
from analysts. That's on the higher side, leading the charge
on the socks. We're seeing generally a veeling of getting
back into these chip names ahead of arm this week.
Speaker 4 (23:18):
Remember the chip design.
Speaker 3 (23:19):
Company coming out with its earnings Apple on the downside, there,
I'm afray Warren Buffett cutting his stake even though he
poured on a lot of love for the company.
Speaker 4 (23:25):
All eyes in.
Speaker 3 (23:26):
The iPad unveil tomorrow and Robin Hood up a quarter
of percent now coming off of some of its highs.
Were training exactly eighteen on the nose Now's after the
SEC is one that robin hood is crypto business faces
potentially a lawsuit a so called Well's notice from staff
of the SEC. I'spoke it down, woemgs Shnani Bassack any
detail what it is the SEC doesn't like about robin
(23:48):
Hood's playing crypto.
Speaker 9 (23:49):
Let's just talk about crypto in general, because what this
was was a security stiling that robin Hood made that
had about a two paragraph detailing that said they received
the Wells notice, which knows essentially an intent for the
SEC to sue against the use of its cryptocurrency business.
So we don't know exactly all the details behind it,
but we do have robin Hood's statement in return, which
(24:12):
says that they firmly believe at Robinhood, their officials believe
that the assets listed on our platform are not securities.
We know that the SEC has been looking at exchanges
and brokerages for the listing of what they deem as
unregistered securities, but we also know that this has been
a massive fight between many players in the industry as
well as their fight against the SEC itself in this pursuit.
Speaker 3 (24:34):
I mean, yes, you can trade crypto on robin Hood,
but most people think of it more of a stock play.
I mean, it's interesting that game stops back front and
center with the mean stock frenzy today. But how important
is crypto to robin Hood?
Speaker 9 (24:46):
So look at the overall assets here, the assets under
custody over at Robinhood at the end of last year,
less than fifteen percent were crypto. But even though it's
a small amount of the overall crypto play, the overall
also the overall marketplay. To your point, they're known for
equities and options trading for the most part. That same quarter,
the last quarter of last year, you saw equities and
(25:08):
options volumes kind of drop off here, they were negative,
whereas crypto trading volumes had risen pretty meaningfully. So, even
if it's a smaller base, the business has been rising
very dramatically, and they report on Wednesday after market, and
you would probably see them really benefiting from that crypto
boom in the first quarter of this year. It is
volatile revenue, it's a smaller part of their business, but
(25:28):
it's been helping them attract new customers. With that said,
investors have also shaken off these worries about the sec
at other platforms as well, and again these fights have
been long because companies have tended to sue back. Let's
see how Robinhood handles the.
Speaker 3 (25:43):
Situation with you, and we look forward to their earnings
as well. Shaniambasse, thanks so much for bringing us the latest. Meanwhile,
let's go to the latest in LA. The Milkin Institute
Global Conference has just kicked off this weekend in Beverly Hills,
where finance chiefs, tech heavyweights, even in a mosca there
gathering to discuss everything from your guess to AI of
course geopolitics. Now, our own Wall Street Week host David
Weston just sat down with armand Krishna IBM chairman and
(26:06):
CEO to discuss well, the regulatory landscape for tech.
Speaker 4 (26:08):
Take listen.
Speaker 10 (26:10):
I think every regulator is worried about three topics, not
just safety in regulation. They're wanted about innovation. They're worried
about competition, and they're worried about safety and regulation. So
when you take those three together, the AI alliance that
open really come together to help you foment innovation. So
I think that that actually helps the regulators to think
(26:30):
about what is going on here. While I am caution
there will be some guardrails that are always put. But
in my experience, open technologies have always been safer and
more secure than close technologies.
Speaker 1 (26:42):
Is one of the risks that maybe you're aviating with
your emphasis on open architecture, that some of that i'll
call them big guys get an advantage and really have
an entrenched position.
Speaker 10 (26:52):
Well, I'll use the concern of a world garden. When
you have a world garden, has those areas and technologies
been more innovative or less innovative? All the said of
all garden has always been less innovative, And so I
think that it actually helps you create more competition. Does
it avoid regulatory lock in off a certain one or
(27:13):
two players?
Speaker 7 (27:14):
Likely?
Speaker 2 (27:15):
But isn't that good for all of us?
Speaker 1 (27:17):
Are you pro regulation?
Speaker 10 (27:20):
I am pro regulation as long as is it a
light touch and allows innovation to happen. I absolutely would
be pro regulation. If regulation tries to reduce innovation, I
think that's the problem.
Speaker 1 (27:32):
What about the tsituation between between regulating the technology as
opposed to regulating the uses. We had Sam parmasan or
somebody you know well on who said he thinks regulate
the uses, don't regulate that technology because that will impair innovation.
Speaker 10 (27:45):
Always How can you regulate the technology when you don't
even know where the technology can go? Two years ago,
who had heard of a large language model. If you
come out with our technique instruct Lab six months ago,
nobody had heard of that, there will be.
Speaker 2 (27:58):
Another one, and another one and another one.
Speaker 10 (28:01):
So I think triger regulated technology implies that the regulator
and the policy forks believe no more innovation can happen.
Speaker 4 (28:10):
I think that's a bad bet to make.
Speaker 3 (28:13):
Of course, the CEO of IBM there a Vin Krishna
with our own David Weston. Meanwhile, coming up, look, we're
going to be joined by Andreill founder Harma Lucky from
an exclusive interview on the company's brand new suite of
AI powered products coming out next This is really big technology.
(28:39):
Andreil is announcing a brand new range of AI powered
defense products, now the Pulsar family of AI enabled Electromagnetic
warfare or EW systems. They basic expand on the existing
EW systems by not only countering known threats with pre
programmed techniques, but by leveraging you guessed artificial intelligence to
detect both known and new threats. Got to break down
(29:00):
what this really means, ANDREW founder Palma Lucky joins us
NOW and Palmer.
Speaker 4 (29:04):
A key question is how is this used? How is
this different?
Speaker 2 (29:09):
Well, first of all, note that Pulsar is already being
used by US military customers across multiple continents, multiple AORs,
on fixed sites, on mounted vehicles, and on aircraft. So Pulsar,
while we're announcing it for the first time today ahead
of Softweek, it's actually been in existence for years. This
is something we haven't been able to talk about, but
we've been working on for a long time. It's an
(29:29):
AI powered electronic warfare tool. They can understand what's going
on in the RF domain and then take measures to
accomplish your aims within the RF domain, so jamming, hacking, spoofing, controlling,
identifying things, countering those things, making sure that your own
electronic systems maintain their functionality. And it's able to do
that extremely fast because it's powered by Lattice, our AI
(29:52):
system that powers all and or all products. It's able
to do what would have previously taken a team of
electronic warfare specialists and a build full of equipment weeks
or months to accomplish in just seconds.
Speaker 3 (30:05):
So to that point and power, I of course preface
all of this from a political perspective, but from a
personal perspective. Right now, it is an emotional time when
we're discussing war, when we're discussing warfare, so we're sensitive
to that. But where at the moment is this being
used in a different kind of way. You were just
talking about how it's already been basically been new since
twenty twenty.
Speaker 4 (30:24):
That's the first time you can discuss it.
Speaker 3 (30:26):
How has artificial intelligence change the pace with which you
can iterate? But also things are changing within warfare well.
Speaker 2 (30:33):
I started an underall because I was concerned with the
United States and our allies around the world. We're losing
our technological edge to some of our near peers and
even now in many areas peers, and I think that
how things have been playing out in Ukraine and around
the world have really proven that out AI is changing
the game in a lot of ways because it allows
you to deploy large numbers of systems in a much
(30:54):
more intelligent, much more useful way than we've ever been
able to do before with even remotely piloted systems, and
been focused on AI since the beginning of our company
about seven years ago. You'll notice that our name and
or all industries is you know, the acronym is AI,
and that's for a reason we were we believe that
artificial intelligence was going to be changing the nature of
warfare long before a lot of people were paying any
(31:16):
attention to AI. I remember when we were starting our
company and it was hard to raise money for AI companies.
People weren't taking it seriously. They saw it as kind
of a science fiction gem, but not something that was real.
And unfortunately the reality of the world today has forced
people to start paying more attention to what AI can
do on the battlefield.
Speaker 3 (31:35):
People paying attention a government they have to are the
defense sector in particular, and I mean I speak to
the fact that the Air Force in the United States
has got with the program, understood the impact that you're making,
and ultimately what.
Speaker 4 (31:47):
Brought you on.
Speaker 3 (31:47):
You're now doing a program you're sort of seen as
a new type, a new force of defense tech startup.
You actually call it a non traditional defense company. Can
you talk us through the Collaborative Combat Aircraft program? Basically,
this is about aircraft that fly alongside those that are manned.
Speaker 2 (32:05):
Sure. I mean this is an area where the US
Air Force and Secretary Kendall deserve a lot of credit
for their vision. They want to deploy AI powered aircraft
at scale alongside manned aircraft on a timeline that is
relevant to the conflicts that we are trying to deter
and that have the ranges and capabilities that we need
to be meaningful to the adversaries that we might have
(32:26):
to fight. I'll just name the name. It's China. CCA.
The Collaborative Combat Aircraft Program is the program to develop
and then build over one thousand ccas that are going
to fly alongside manned aircraft. Loyal wingman, they've loyal wingman,
they've been called andre All just beat out Lockheed Martin,
Northrop Grumman, and Boeing for a slot on the CCA program.
(32:48):
We're going to be using that slot to build production
representative aircraft, not prototypes, but production representative aircraft that are
going to be ready to go to scale at manufacturing
if we can hit all of our hit all of
our milestones, and proved that we are as good at
building airplanes as we are at building AI.
Speaker 4 (33:05):
You went there and you mentioned China.
Speaker 3 (33:07):
I'm interested as to therefore where you will manufacture and
ultimately see deploying of these particular autonomous fighter jets.
Speaker 2 (33:16):
Well, they're going to be deployed right here or built
right here in the United States. Where they're going to
be deployed, that's up to our customer. I don't have
a ton of ton of insight into where exactly they
might do that, though I've got some ideas.
Speaker 4 (33:28):
I'm interested where you see.
Speaker 3 (33:30):
Therefore, at the moment, the US taking leadership back or
do you still worry since splesh you the founding of Andreille,
whether you do think that US has reasserted itself become
again the leader.
Speaker 2 (33:46):
I think that we have a long way to go
in certain areas. But the really powerful thing is that
we've recognized the areas where we have problems. I think
people have been pulled out of their slumber. They realize
that there's areas we can move much faster. We can
do things in not years that just were not possible
to do within the bureaucracy before, within the previous construct
(34:07):
of how we're supposed to get things done. I mean,
the Air Force taking a bet on andrel on CCA
is just one of many examples of people realizing that
business as usual is not something that we have time for,
not in the modern timeline, not in the modern threat environment.
Speaker 3 (34:21):
But what about the competition from the Boeings, from the Lockeys.
Are they not getting with the programs, starting up their
own internal startups or indeed making acquisitions.
Speaker 2 (34:31):
You know, I don't feel like those guys are really
the competition. I feel a bit of a kinship with them. Look,
I'm not running my business the same way that they're
running their business. But at the end of the day,
we're all trying to protect the same country. We're all
trying to protect the same values more or less here
and around the world. I'm actually much more worried about
the competition from Iran. I'm much more worried about the
(34:51):
competition from Russia and China. We've had systems in Ukraine
since the second week of the war, and the innovation
that I've seen coming out of Russia, China and Iran
as kind of a coalition of very technologically advanced adversaries,
it worries me a lot more than the competition that
I have here in the US. There's things that I'm
going to build that I do better than Boeing, for example,
(35:13):
and there's things that Boeing is going to build that
where they're better than me. And I recognize that, and
I think we're doing a pretty good job of finding
how we can continue working together with all of these
different companies, and all these companies that I just mentioned
us beating on the CCA program, we're working with all
of them in some capacity on other programs. It's actually
a little less cutthroat than people would think because of
(35:34):
that very strong shared sense of mission that you see
in the United States National Security apparatus.
Speaker 4 (35:39):
And your aligning incentives with allies as well.
Speaker 3 (35:41):
And we note, of course, an autonomous sub that you've
been working with well Australia and actually sort of co
developing and keeping on pace unheard of kind of in
the defense contract space of actually being on time and
in budget.
Speaker 4 (35:54):
But where else might you manufacture? Might you co develop?
Speaker 3 (35:58):
It is interesting that one of our own reporters highlighting
that the VP of Taiwan was speaking at a US event,
would there ever be manufacturing in Taiwan?
Speaker 2 (36:08):
Well, you're right on the Ghost Shark program. That's an
autonomous robotic submarine the size of a school bus that
we've been developing with the Royal Australian Navy, and we
actually just delivered the first submarine a year ahead of
schedule and on budget, which, as you mentioned, is rare.
It's practically unheard of. There are other areas where we're
looking to expand. I can't talk about the specifics of it,
but I can tell you that I'm in Taiwan frequently.
(36:30):
I was just there a few months ago. I'm going
back in just a few weeks. Taiwan is obviously one
of the key technological partners of the United States, especially
in the region. It's critical for United States military security
that Taiwan remains free and independent and democratic. But it's
also very important for our economy. I would say there
might not be another country in the world that is
(36:54):
really underpinning so much of our way of life when
it comes to semiconductors and all of the things they
power throughout our consumer and industrial and defense economy.
Speaker 3 (37:04):
You talk about how things have changed, certainly from the
Ministry of Defense perspective, but what's also changing is the politicization,
ultimately of companies that are working within warfare, and we
certainly see that from protests here among students. How have
you been feeling angrel is being embraced still by the
(37:24):
private sector from a money perspective, are you raising money.
Speaker 4 (37:27):
Is it easy to do so? Are you looking to
go public?
Speaker 2 (37:30):
Well, Luckily, I think that there is a very big
golf and sophistication around international affairs between the types of
people who are funding ANDERL and the types of people
who are skipping class to camp out on campus on campuses,
I think that there's a lot of people who recognize
that the United States should have the best technology. The
(37:51):
only way to credibly deter warfare is to have a
backstop of credible threat of violence. There is no way
that you can deter every adversary with the threat of
a sternly warded letter or this idea that sanctions are
going to cripple their economy, especially in areas where we
don't even have the leverage to make that true. I
think that on the funding side, where we don't have
(38:12):
any problems, We've got a lot of money in the bank,
we have a very healthy revenue pipeline. We're on the
path to being a publicly traded company, and a lot
of people are really excited about that because ANDROL, in
addition to building tools that keep our men and women
on the front line safe, which is something people want
to be invested in, is also just a good, credible
business with a really good roadmap that's doing well on
our existing products, and it's a healthy pipeline of future products.
(38:34):
We just announced Pulsar, we just showed off some other
new products like Mencex. We're going to be announcing products
through the rest of the year. We've got about a
dozen products that we've publicly announced. We've got another dozen
that are not even publicly talked about yet, and they're
of a similar caliber. And I think that our investors
recognize that perspective and existing I.
Speaker 3 (38:54):
Look forward to you coming back and talking about it
when they can talk about it publicly but quickly. IPO
twenty twenty four or twenty twenty five.
Speaker 2 (39:03):
Well, I can almost promise you it won't be twenty
twenty four. If it was, we'd already have to be
way down that path. Anderal wants to be a publicly
trade company for a variety of different reasons. It's something
that we've wanted to do since the very beginning. You know,
this is my second company. You might know I started
a company called Oculus VR when I was nineteen. I
sold that to Facebook for a few billion dollars. I
was there for a few years before I was fired,
(39:24):
and I've decided that I want to go on a
different path this time, and luckily that aligns with what
our customers want us to do, what our investors want
us to do, and I think what the American people
want to do where they want to be able to
buy into these companies, not have them operate as private
entities beyond reach and beyond control.
Speaker 3 (39:41):
I'm a lucky great to sit down with you. Thank you,
andrewl Founder. This is bruly met technology.
Speaker 2 (39:57):
That's real eating gees and if I sephony of phrases.
Speaker 3 (40:06):
What a song simp Simplicity's delight and was created with
software from Suno, one of the new crop of AI
startups focused on basically building tools to automate the music
making process. But while the AI music hera is creeping
upon us, not everyone is a fan.
Speaker 4 (40:20):
Just break it all down.
Speaker 3 (40:21):
I believe makes Rachel Mets, who actually is the joy
behind that.
Speaker 4 (40:25):
Song that you just heard? And Rachel, when am I
gonna be able to stream it on Spotify?
Speaker 3 (40:29):
And ultimately that is the issue here right that a
lot of AI made songs are.
Speaker 4 (40:33):
Kind of taking away the business of real artists.
Speaker 11 (40:36):
Who I think it's a little bit it's a little
bit early to say that definitively, but that is a
concern absolutely, both of artists that see the technology developing
of record labels. You know, there are a lot of
different stakeholders in the music industry, and as AI becomes
better and better at making music, they have a lot
of concerns about this that they're increasingly expressing.
Speaker 10 (40:57):
For sure.
Speaker 3 (40:58):
What's interesting is perhaps use Footshina light on Souno, but
also Udio, which is actually backed by Andrewson Horrace, but
also some players in the game. I think a common
is one of the as one of the money behind it,
as well as United Masters that Steve Stout, So they
do have backing of some players within music.
Speaker 4 (41:16):
But it looks as though.
Speaker 3 (41:17):
These companies are trying to ensure that you're not able
to say please make me a song in well the
essence of Billie Eilish. They are trying to be clever
about the way in which we basically copy or don't.
Speaker 11 (41:29):
Yeah, I mean they want to position themselves as something
that anybody can use and I am anybody and I
can use them to make music. And it is true
that a very quick process or you can make it
as long as complicated as you want.
Speaker 2 (41:44):
You can bring your own music to it. So it's
for anybody.
Speaker 11 (41:48):
It's someone who's a professional musician who wants to augment
the music making process, or for someone who just wants
to type in a quick prompt and get in a
song about the simple pleasures of eating cheese or any topic.
Speaker 2 (41:58):
Really.
Speaker 11 (42:00):
Yes, there are some people in the music industry, such
as Common. Also will I Am was another person who
put some money into UDO. So it'll be interesting to
see where musicians sort of you know, come in in
the coming months and years, if they're interested in participating
with these companies and using them, or if they say, hey,
wait a minute, I don't want you training on my music,
(42:22):
or maybe a little bit of both.
Speaker 3 (42:24):
I assume, as we've seen with image generation, as we've
seen with video very briefly Rachel, lawsuits likely.
Speaker 4 (42:30):
To happen here.
Speaker 2 (42:32):
I will yes, I would expect. So.
Speaker 11 (42:36):
I spoke to somebody in the music industry and they
said that was one of the things they're expecting to
see happen. They're expecting to see some deals between companies
and that are building this music making software and record labels,
and maybe other stakeholders in the coming months, but also
perhaps some lawsuits. And as we know, the music industry
(42:58):
has been quite litigious. It has already involved in some
lawsuits regarding other types of generative AIA companies.
Speaker 3 (43:04):
And look you MG just striking that deal with TikTok,
looking at how to protect artists versus AI.
Speaker 4 (43:09):
It is going to be something we unpack with your help. Rachel.
We thank you so much. Rachel Metz. How does it for?
This in edition and Bloomberg Technology. Don't forget to check
out our podcast. This is a Bloomberg
From Mahard where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 2 (00:06):
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3 (00:24):
I'm Caroline Heidel, Bloomberg's World headquarters in New York. Ed
Ludlow's off This is Bloomberg Technology coming up. We engage
the health of technology earnings with eighty percent of S
and P five companies out with results. And as Buffett
cuts his steak, we'll push your head to Apple's product
event as the company prepares to launch new iPads plus,
we speak to andrel founder.
Speaker 4 (00:46):
Palmer Lucky as a company announces.
Speaker 3 (00:48):
A brand new range of AI powered products. But first
let's check in on these markets and look, we have
a post fed feeling of well optimism in the markets
that feel so. We don't have an awful lot of
economic data on the table. We do have some significant
bondishuents ten yure yields holding steady. We're four point five
percent the nawstak managing to push up to six tens
(01:09):
ofven percent, notably seeing the S and P five hundred
breaking some of those technical levels of where we've seen
an average and trade over the last fifty days.
Speaker 4 (01:15):
So there seems to be some boyant moves and risk
on attitude.
Speaker 3 (01:18):
Not though in bitcoin, though crypto off by nine tens
of percent, we're seeing sixty three one hundred and fifty
five is currently where we trade.
Speaker 4 (01:24):
Move it on though, and when it comes to encrypto.
Speaker 3 (01:25):
Related news will be digging into what's happened.
Speaker 4 (01:27):
With Robin Herd.
Speaker 3 (01:28):
Of course, wells notice received SEC looking at particularly it's
crypto sales that it currently does up seven tens percent,
despite of course announcing that the SEC may well be
looking into its business. Apple down seven tens percent. This
is all post of course, the oracle of Omaha over
Warren Buffett saying, look, I'm pulling back on the steak
in Apple, even though he did shower its praise over
(01:49):
the business, really loving the iPhone product. But nevertheless, we
look ahead to new products, new iPads. Push ahead with
that in Mark German in a moment, but in Vidia
up two point six percent. I want to shine like
more broadly on some of each makers because we are
seeing a lot of movement higher the socks, for example
trading high and Vidia is still yet to report that
comes May twenty May twenty second. We also get arm
(02:10):
this week. There is still so much to be said
for earnings. The earning season well underway. Results from about
eighty percent of the S and P five hundred already
in technology communication services companies, they're beating profit estimates.
Speaker 4 (02:22):
Roughly ninety percent of.
Speaker 3 (02:23):
Teching communication services companies actually topped earnings estimates, according to
Day to combined by Bloomberg. When get all the statistics,
Bloomberg's jestmenton is with us and pleased to say, and
just more broadly, it feels as though when companies have
beat have they really outperformed? I mean, Apple was a
massive sigh of relief when we saw the stock rally,
but how has that been bearing up?
Speaker 5 (02:43):
So you can actually see this function in Bigo, So
Gina Marrit Adams team ver in that function and you
can see basically on the equities there. So when you're
looking at how starks in aggregate from the S and
P five hundred have been performing in excess of the
broader index, they actually it's basically kind of appeals in
comparison to how they have been in prior quarters. But nonetheless,
because of Apple on Friday, when you see this now
(03:05):
the S and P five hundred since earning season basically
got into full swing with JP Morgan back on April twelfth.
Now it's up close to about one percent in that span.
It had been about lower than one percent prior to
Apple's earnings results. So now you're starting to see that
pick up a bit just on the back of obviously
these big tech bell weathers. But to your point, Caroline,
we still have Nvidia coming up.
Speaker 4 (03:25):
On May twenty second, I know, and there was so
much optimism baked in.
Speaker 3 (03:30):
What about those that have missed, I mean, they've been
punished hot, have they and have have been any themes
as to why they've missed.
Speaker 5 (03:36):
Well, that's a great point too, because a lot of
that also has to do with more forward looking guidance.
And that's why because as we know, when you do
think about first quarter earnings results, that is more backward looking.
So when it comes to the guidance, that's where it
has been disappointing. And then, of course, because this is
a technology program, obviously a lot of traders and investors
want to know when those cost cutting efforts that have
really helped propel any sort of big tech company or
(03:59):
especially anything that is tied to that, especially as when
you think back to Meta at the end of twenty
twenty two when it started its first big job cuts
entranch there and then another one last spring. How much
longer can this continue? So if you look at the
bifunction though on a twelve month aggregate basis, seal site
analysts are still marking up their projections for technology companies
and growth companies too, But a lot of those laggards
like healthcare and utilities, those are actually starting.
Speaker 3 (04:21):
To pick up too now maybe with the effect of AI.
Many wanted to just see that impact. How the industry
groups just lastly give us the sentence of whether companies
have already been rewarding shareholders, because that felt like why
a lot of the reason Apple popped it was because
we got a massive buyback was starting to see companies
give dividends. I mean, you triggered my memory with the
fact that Meta didn't this time, but they did in
the pre setting season.
Speaker 5 (04:42):
That's always usually music to trader's ears there. But also
the big thing about buybacks is also when you look
at what's happening with Capex and reinvesting into those businesses,
so just beyond that, So that's something that investors want
to see more of as far as what are companies
doing to reinvest beyond just those buyback programs, But we
have seen a number of companies in a especially to
your point, Caroline, looking at Apple with that historic buyback announcement.
(05:04):
Of course it still has to execute those, but we
still have when you're thinking about what potential catalysts could
come for Apple. Obviously we know in early June we'll
have the Worldwide Developers Conference, but I know Mark German
from Bloomberg is coming up soon, so he's going to
talk about the big event tomorrow where potentially we could
can see some more new iPads that are coming out.
Speaker 3 (05:20):
Caroline, let Mark loose at the moment of the HANJ
just meant and brilliant to have your round level what's
been happening in.
Speaker 4 (05:25):
Terms of the earning season.
Speaker 3 (05:27):
We actually want to get aroun investors take care as well.
Uncle Crawlford's with us executive vice president for Phodio manager
over at algia twenty five billion dollars NASA's under management,
and Uncle Apple actually one of your biggest holdings. You
have been cutting that a little bit across some of
your funds. Water Muffett doing the same thing. How have
you interpreted, for example, a company such as Apple's results
(05:47):
and ultimately the growth trajectory of a business like that.
Speaker 6 (05:50):
Look, Apple is a consumer utility, and one of the
things about Apple has been that they has been slower
in adopting this AI cycle. So the hope is that
at some point they will catch up and they will
be a FEST follower, which we strongly believe that they will.
But in the near term, there are other companies that
are more immediately investing in and procuring AI type revenues
(06:14):
that is propelling growth.
Speaker 4 (06:15):
Okay, let's talk through some of those names.
Speaker 3 (06:17):
I mean, we've heard from Alphabet, from Amazon, from Meta,
all of them. The capec spend their making are they
building the reward in return for that investment?
Speaker 6 (06:27):
From your perspective, absolutely, It's the number one thing that
we have been looking at through this earning season has
been capex and how these companies are spending their capex.
We wholeheartedly expected them to have a big CABEC CAPEX
number through twenty twenty four, and they're even talking about
twenty twenty five. And this to us is the leading
(06:48):
indicator of what's to come in AI because they wouldn't
be building this CAPEX unless they saw the demand trends.
I would remind you that during earning season, both Microsoft
and Amazon talked about how they were limited on capacity
of GPUs. So this again, I mean people keep asking
like the where is the application.
Speaker 4 (07:07):
Someone is using those GPUs?
Speaker 6 (07:09):
They're all used up already, the hundreds of millions that
have always been already been spent.
Speaker 3 (07:12):
And of course benefits from the desire for GPUs. It's
going to be in video, right, I mean, is that
the number one play for you? Have you been looking
at well a MD or indeed looking at the design
element with M Yeah.
Speaker 6 (07:25):
So I think a lot of boat boats are going
to rise over the next decade, and a lot of
boats are rising now. So it will it be a
winner take all market. It's not going to be a
winner take all market. There will be many different winners.
Nvidia is going to be the winner take most however,
and we are really excited about what Nvidia is doing
(07:47):
in terms of not only software development, but how they're
changing the network in order to make data centers more efficient.
So they're reaching out beyond just chips into the price
networking and software as well, so that sets up a
really great note for them and makes us very bullish
(08:09):
on Nvidia.
Speaker 3 (08:10):
I mean, it's one of your number one holdings across
some of your largest funds. I note that you've also
been starting new funds and ETF in particular, trying to
execute on this AI theme. Can you talk us through
some of the names and perhaps why not automatically consider
the AI play that you've been adding to.
Speaker 6 (08:25):
Yeah, so you know there's two companies in the industrial space,
Vertive and Quantu Services, both of which are you know,
they used to be relatively slow growth companies but are
now levered to the AI play. Vertive makes cooling systems
for data centers, and Quanta I actually I joke that
(08:45):
these are ditch diggers or their pool climbers, because they
effectively distribute or make the transmission for electricity.
Speaker 4 (08:53):
Both of these.
Speaker 6 (08:54):
Things are going to be to have radically changing competitive
dynamics in that, for example, for Quanta, we don't have
enough electricity, so we expect to see utility capex start
to rise incrementally over the next five to seven years,
all of which will service the people that implement the
transmission lines.
Speaker 4 (09:15):
For Vertive, you have a.
Speaker 6 (09:17):
Very changing dynamic on the cooling aspect of the data
center and vertive ends up being the net winner.
Speaker 3 (09:26):
And God, that's really interesting because we're hearing again and
again that this is a worry for example of Sam
Altman been going around the Middle East in particular, worrying
that the key anxiety, the kid bottlenecks here are energy
and indeed access to GPU. That's why there's been so
much reporting of the fact that he's trying to build
up other chip makers. How have you been thinking about
(09:48):
ultimately that actually being the key bottleneck? Do you agree
that energy is going to be the real issue here,
limiting factor?
Speaker 6 (09:54):
I think that technology is pretty amazing in that as
you forward, I mean, as we stand today, is energy
going to be a bottleneck?
Speaker 4 (10:03):
It is.
Speaker 6 (10:04):
However, as you move forward two three and four years,
the energy efficiency efforts that are occurring, not only at
the chip level but at the data center level are
quite significant, and we think that the technology on cooling
and electricity will keep up and not hamper.
Speaker 4 (10:23):
The growth of the industry.
Speaker 6 (10:25):
So, for example, if you look at the performance per
want of the B one hundred, which is Nvidia's newest chip,
it's actually significantly more efficient than the older generations, and
so as you move through time, I do believe that
on a performance per want basis, you end up getting
(10:45):
more efficiency than is currently baked in by the market.
Speaker 4 (10:49):
What is the market getting?
Speaker 3 (10:52):
Two wigsubun Do you believe any view that the hype
has made market capitalizations unsustainable in certain names?
Speaker 6 (11:01):
I don't think the market is exuberant right now. And
and you know everyone always asks like, are we in
a bubble? Are we in an AI bubble? And I
would say it's much too early. This is very much
like you know, it's revolutionary in terms of what is
about to happen. So, you know, I was just look
at the valuations across across the mag seven this morning.
Speaker 4 (11:23):
You look at Meta.
Speaker 6 (11:24):
Meta currently trades at a ten percent discount to the
market on our twenty twenty five earnings. Actually it might
be a fifteen percent discount now that it's pulled back
so much. That to me, for UH, a company that
is going to change the way that we interact as
consumers with AI and how businesses interact with consumers is
(11:45):
not an egregious multiple. You know, you can go down
the list with Amazon. Amazon doesn't trade at that egregious
so multiple to the market, especially as they're showing leverage.
You know, you look at Microsoft Microsoft again, if you
look at twenty twenty six numbers, it trades at a
five percent free CASHUW yield. So to me, these aren't
really set up as bubble esque type valuations, and we're
(12:06):
not terribly exuberant, especially after this fallback.
Speaker 4 (12:10):
Well said Uncle Crawford.
Speaker 3 (12:11):
Really great to get your perspective as someone who is
holding a lot of these names, investing in and indeed
adding to we thank you, Uncle Crawford of algia.
Speaker 4 (12:19):
Great way to kick off this week.
Speaker 3 (12:20):
Meanwhile, coming up, Apple preparing to unveil a new lineup
of vipe as we're just talking about. It's the product
launch called Let's Loose as tomorrow we're gonna be previewing
the event. Next Meanwhile, let's just look at GameStop, which
is moving for no apparent reason. Again, you know, it's
the og meme stock. We're down some thirteen percent last week.
Of course it was rallying hard. I mean ended Friday's
(12:43):
session up about twenty nine percent. That seems to be
a real well desired to be getting in and out
on this key meme name once again, we'll keep an
eye for you. This will blue Bid Technology. Berkshire hathawayn
Hel does annual meeting over the weekend, of course, and
(13:05):
Apple quickly became one of the biggest topics as the
meeting unfolded. Warren Buffett here praise the company, calling the
iPhone one of the greatest products of all time.
Speaker 4 (13:14):
That was after revealing h kind of steak.
Speaker 3 (13:16):
Berkshire reported a one hundred and thirty five point four
billion dollar holding in Apple at the end of the
first quarter, down.
Speaker 4 (13:22):
From one hundred and seventy four zero point three billion
at the year end.
Speaker 3 (13:26):
Now, meanwhile, whole news when it comes to Apple and
fox Conn, which of course assembles the majority of iPhones,
posted its strongest monthly sales growth since the start of
twenty twenty three. And just look at what the impact
I had on the shares potentially of course, raising those
expectations for iPhones for a server sales. I spoke it
all down and push your heead tomorrow's event. Of course,
all regarding the iPad Springberg's Mark Guman here with us
(13:47):
and on high or fox Conn, however you want to
talk about it, always a great tell we'd been worried
about its previous earnings. But now it looks that from
a month to month basis on year on year monthly posting,
we're getting record say for the company.
Speaker 7 (14:02):
If you look at the prior quarter, han Hi's revenue,
their expectations, their forecasts.
Speaker 2 (14:08):
Weren't so hot, right.
Speaker 7 (14:09):
And then you saw Apple reveal its iPhone sales for
the previous quarter last week, and you saw the iPhone
come in about five billion dollars down on a year
of a year basis.
Speaker 2 (14:19):
Right.
Speaker 7 (14:19):
But looking ahead to the June quarter, the current window
that we're in, Apple set it expects revenue to grow
low single digits, right, so growing for the first time
in a couple quarters. Here, and fox CON's expectations for
this quarter as well, it seems to align with that,
given that they still assemble the vast majority of iPhones
via fox Con. Now not only iPhones driving that han
(14:42):
high revenue, it's also development and manufacturing of AI servers
for various companies. However, I don't believe that the AI
servers that fox Coon is building are connected to Apple's
AI announcement coming in June. For all intentsive purposes, the
AI from Apple will be on device at least from
the get go, and probably using third party infrastructure, not
(15:03):
something they're creating on their own. But one day I
do expect Apple to move to its own AI server environment.
Speaker 3 (15:08):
Oh interesting, Okay, And therefore talk to us about the
long term commitment to Apple and indeed perhaps a pullback
coming from what is its third biggest shareholder, Berkshire Hathaway saying, look,
we are pulling and trimming back, but they still seem
to believe in Apple as a key tech winner.
Speaker 2 (15:23):
Yeah.
Speaker 7 (15:24):
I think Buffett does seem to believe Apple is a
key tech winner. I mean Buffett in his typical process
for which stocks he buys.
Speaker 2 (15:31):
Apple is right up his alley. Right, You're not.
Speaker 7 (15:33):
Going to see Apple grow tenfold or to some significant
degree at this point, but you know that it's more
likely than not that you're going to get solid returns
off this company. You're not going to lose your money.
It's certainly better than putting your money in a bond
market or in a mutual fund in most cases. So
it is a very safe pick Apple, I think for
(15:53):
many quarters to come, despite the fact that it's not
going to be a high flyer or anything like that.
Speaker 3 (15:58):
I meant one hundred and ten billion dollar share by
that many feeling that that's the tell it's a value
stock now rather than a growth stock mark. But I'm
interested in away from the arbitrary way in which we
describe whether you buy into this stock. We are all
caring about the products and the unveilings, and we're going
to get some.
Speaker 7 (16:18):
Yeah, that's right. Tomorrow Tuesday, seven am Pacific time, t
am Eastern time, is there let loose iPad product launch.
There's going to be a few things coming. One is
a revamped version of the iPad Pro. This will be
the most significant update to the company's tablet since the
current model was launched in twenty eighteen. You're also going
to see a new iPad Air. Why is that important, Well,
(16:40):
in addition to a spec bump, you're getting a bigger
iPad Air, something closer to the size of a MacBook
Air for the screen, a twelve point nine inch display.
This will be the first time that Apple's offering a
twelve point nine inch iPad at that mid tier price
point right and at that mid tier product line. So
that's a big deal as Apple looks to make it
iPads more like Max and expand the product line there,
(17:03):
and then you're going to see them rebuild the ecosystem
around its iPads. It's two key new accessories. Is going
to be a new Magic keyboard, a higher end version
that makes the iPad pro look more like a laptop
all in use, something that's a bit more durable and convenient.
The second thing is a pro version of the Apple pencil,
so a new higher end skew of its Apple pencil silence.
(17:24):
That's a really popular accessory that artists and creatives and
others like to use for drawing. The new version will
have some new gestures so you can squeeze on it
to have certain commands. Apples homepage was updated this morning
where you can use an Apple pencil a virtual pencil
to erase the logo on Apples homepage, which might imply
that the pencil's finally getting an eraser on the back
(17:46):
like a classic number two pencil. And the other thing
I've written that we'll have is hap to feedback, so
when you use the pencil, it'll vibrate back on your finger,
so you know what you're doing based on tactile feedback.
So that's going to be a pretty nissed the update
as well. And I think overall, for iPad fans, especially
those who've been waiting many, many, many months, even years
(18:08):
for a revamp version of iPad Pro, tomorrow is going
to be quite an exciting product launch for them.
Speaker 3 (18:13):
I love playing Mark German bingo of all the things
that you've just told us and playing it out tomorrow
when they all come to life. We thank you, Lumog's
Mark German on all things Apple and iPad.
Speaker 4 (18:31):
Time now for talking tech.
Speaker 3 (18:32):
First up Chinese self driving firm Momenta, but as far
confidentially for an IPO in the United States calling to
sources and it may happen as early as this year now.
The company was founded in twenty sixteen by a team
of AI engineers from Microsoft Research Asia, and its backers
include General Motors and Tamasek Plus. The Biden Administration is
opening applications for two hundred and eighty five million dollars
(18:54):
in federal funding set up an institute focused on digital
twin technology for the chip industry. This technology can leverage
AI to help reduce development and manufacturing costs. And Jack Dawsey,
when he's left the board of social networking service Blue Sky,
which he of course, helped fund and popularize.
Speaker 4 (19:10):
A year ago, in the week of Coin of some
regret over.
Speaker 3 (19:12):
The sale of Twitter to Elon musk Now, the Twitter
co founder took to now x to tout his new
philanthropic grants to open Internet protocols, which he described as
quote freedom technology. In fact, he said that X is
such a freedom technology. Now, let's turn our attention to
the French tech company Atos now.
Speaker 4 (19:31):
It says it has received some.
Speaker 3 (19:33):
Four proposals to restore the group to financial health, including
one it already rejected from main Capital.
Speaker 4 (19:40):
Now the firm is seeking to reach a deal by
the end of.
Speaker 3 (19:43):
The month to inject fresh funds after clients have actually
begun to hold off business.
Speaker 4 (19:46):
The latest bidders to throw their hats into the ring.
Speaker 3 (19:49):
Are check billionaire Danielle Kratinski and David Leani's one point,
let's break it all downs, Benoir, butterlo is with us
and Benoir just remind us this is a company that's
sort of incredibly integraly in the tech space in France
and ultimately the government was to make sure that it survives.
Speaker 8 (20:07):
Yeah, it's been a darling of the French tech scene
and a major blue chip indexed company in France. It
used to have a market capitalization of fifteen billion. It's
now down to two hundred millions. It's got lots of
problem and it's in indeed a key IT company. It
has one hundred thousand employees ten billion of revenues last year,
(20:31):
many key customers around the world. The IT for the
Olympic Games for example upcoming in Paris this summer, but
also key defense activities for just the French defense industry.
It also has supercomputers that help the nuclear industries. So
the French government, seeing the trouble of the company, finally
(20:51):
decided to make a bid on that part of the company.
The more strategic activities.
Speaker 4 (20:57):
Talk us through the rivals here.
Speaker 3 (20:59):
Some of the key players, as we mentioned, mentioned a
couple of billionaires during their hasten the ring.
Speaker 8 (21:04):
Exactly. So one of the bids is actually from the
bondholders of the company. They want to be center stage here,
They want to be key in deciding who's going to
be the winner, so they are open to partner with
an anchor shareholder, and this could be either the check
billionaire Daniel Kretinski. He's been known to buy sort of
(21:27):
unloved assets assets that need structuring. He started in energy.
He's been to retail in France. He already made a
bid to buy retailer Casino. It was with a test
the credit Fund. And he's teaming up with Attesta again
to make a bid for Atos. And then there is
(21:47):
David Laianis, a French entrepreneur. He has a much smaller
IT company called one Point and he's teaming with Butler Industries,
another investor in France to buy the company and in
a plen that he's calling one. So it's sort of
down to a race between these two.
Speaker 3 (22:07):
We'll see how the race continues. Renoir Blo, we thank
you so much. Welcome back to Blue Mel Technology. I'm
Caroline hired in New York. Let's get a quick check
on these markets because it's a little bit of optimism
out there. On the day we're managing to see a
higher tuned than as that one hundred and six tens percent.
(22:28):
After we see well perhaps a quietening in overall economic data,
but a ramp up in discussion coming from the Federal Reserve,
after we got a little bit more of a tamer
comments coming out of Chair Power the market trying to
even bait back in some of those rate cuts for
the rest of the year. We're seeing the MSCI or
country world in next on the higher side too. Really,
we've seen money move into the European assets and indeed
(22:49):
Asian on the day Bitcoin though.
Speaker 4 (22:50):
Not finding the love for the risk on feeling.
Speaker 3 (22:53):
We're down to sixty three, three and ninety two currently
up down by just five ten percent though so small change.
Speaker 4 (22:58):
Let's move on and have a.
Speaker 3 (22:59):
Look at else was moving in the world of crypto
and individual companies, because well, more broadly, we have seen
the chip sector doing particularly well on the day, seeing
in video Ramphi, I was seeing Micron getting an upgrade
from analysts. That's on the higher side, leading the charge
on the socks. We're seeing generally a veeling of getting
back into these chip names ahead of arm this week.
Speaker 4 (23:18):
Remember the chip design.
Speaker 3 (23:19):
Company coming out with its earnings Apple on the downside, there,
I'm afray Warren Buffett cutting his stake even though he
poured on a lot of love for the company.
Speaker 4 (23:25):
All eyes in.
Speaker 3 (23:26):
The iPad unveil tomorrow and Robin Hood up a quarter
of percent now coming off of some of its highs.
Were training exactly eighteen on the nose Now's after the
SEC is one that robin hood is crypto business faces
potentially a lawsuit a so called Well's notice from staff
of the SEC. I'spoke it down, woemgs Shnani Bassack any
detail what it is the SEC doesn't like about robin
(23:48):
Hood's playing crypto.
Speaker 9 (23:49):
Let's just talk about crypto in general, because what this
was was a security stiling that robin Hood made that
had about a two paragraph detailing that said they received
the Wells notice, which knows essentially an intent for the
SEC to sue against the use of its cryptocurrency business.
So we don't know exactly all the details behind it,
but we do have robin Hood's statement in return, which
(24:12):
says that they firmly believe at Robinhood, their officials believe
that the assets listed on our platform are not securities.
We know that the SEC has been looking at exchanges
and brokerages for the listing of what they deem as
unregistered securities, but we also know that this has been
a massive fight between many players in the industry as
well as their fight against the SEC itself in this pursuit.
Speaker 3 (24:34):
I mean, yes, you can trade crypto on robin Hood,
but most people think of it more of a stock play.
I mean, it's interesting that game stops back front and
center with the mean stock frenzy today. But how important
is crypto to robin Hood?
Speaker 9 (24:46):
So look at the overall assets here, the assets under
custody over at Robinhood at the end of last year,
less than fifteen percent were crypto. But even though it's
a small amount of the overall crypto play, the overall
also the overall marketplay. To your point, they're known for
equities and options trading for the most part. That same quarter,
the last quarter of last year, you saw equities and
(25:08):
options volumes kind of drop off here, they were negative,
whereas crypto trading volumes had risen pretty meaningfully. So, even
if it's a smaller base, the business has been rising
very dramatically, and they report on Wednesday after market, and
you would probably see them really benefiting from that crypto
boom in the first quarter of this year. It is
volatile revenue, it's a smaller part of their business, but
(25:28):
it's been helping them attract new customers. With that said,
investors have also shaken off these worries about the sec
at other platforms as well, and again these fights have
been long because companies have tended to sue back. Let's
see how Robinhood handles the.
Speaker 3 (25:43):
Situation with you, and we look forward to their earnings
as well. Shaniambasse, thanks so much for bringing us the latest. Meanwhile,
let's go to the latest in LA. The Milkin Institute
Global Conference has just kicked off this weekend in Beverly Hills,
where finance chiefs, tech heavyweights, even in a mosca there
gathering to discuss everything from your guess to AI of
course geopolitics. Now, our own Wall Street Week host David
Weston just sat down with armand Krishna IBM chairman and
(26:06):
CEO to discuss well, the regulatory landscape for tech.
Speaker 4 (26:08):
Take listen.
Speaker 10 (26:10):
I think every regulator is worried about three topics, not
just safety in regulation. They're wanted about innovation. They're worried
about competition, and they're worried about safety and regulation. So
when you take those three together, the AI alliance that
open really come together to help you foment innovation. So
I think that that actually helps the regulators to think
(26:30):
about what is going on here. While I am caution
there will be some guardrails that are always put. But
in my experience, open technologies have always been safer and
more secure than close technologies.
Speaker 1 (26:42):
Is one of the risks that maybe you're aviating with
your emphasis on open architecture, that some of that i'll
call them big guys get an advantage and really have
an entrenched position.
Speaker 10 (26:52):
Well, I'll use the concern of a world garden. When
you have a world garden, has those areas and technologies
been more innovative or less innovative? All the said of
all garden has always been less innovative, And so I
think that it actually helps you create more competition. Does
it avoid regulatory lock in off a certain one or
(27:13):
two players?
Speaker 7 (27:14):
Likely?
Speaker 2 (27:15):
But isn't that good for all of us?
Speaker 1 (27:17):
Are you pro regulation?
Speaker 10 (27:20):
I am pro regulation as long as is it a
light touch and allows innovation to happen. I absolutely would
be pro regulation. If regulation tries to reduce innovation, I
think that's the problem.
Speaker 1 (27:32):
What about the tsituation between between regulating the technology as
opposed to regulating the uses. We had Sam parmasan or
somebody you know well on who said he thinks regulate
the uses, don't regulate that technology because that will impair innovation.
Speaker 10 (27:45):
Always How can you regulate the technology when you don't
even know where the technology can go? Two years ago,
who had heard of a large language model. If you
come out with our technique instruct Lab six months ago,
nobody had heard of that, there will be.
Speaker 2 (27:58):
Another one, and another one and another one.
Speaker 10 (28:01):
So I think triger regulated technology implies that the regulator
and the policy forks believe no more innovation can happen.
Speaker 4 (28:10):
I think that's a bad bet to make.
Speaker 3 (28:13):
Of course, the CEO of IBM there a Vin Krishna
with our own David Weston. Meanwhile, coming up, look, we're
going to be joined by Andreill founder Harma Lucky from
an exclusive interview on the company's brand new suite of
AI powered products coming out next This is really big technology.
(28:39):
Andreil is announcing a brand new range of AI powered
defense products, now the Pulsar family of AI enabled Electromagnetic
warfare or EW systems. They basic expand on the existing
EW systems by not only countering known threats with pre
programmed techniques, but by leveraging you guessed artificial intelligence to
detect both known and new threats. Got to break down
(29:00):
what this really means, ANDREW founder Palma Lucky joins us
NOW and Palmer.
Speaker 4 (29:04):
A key question is how is this used? How is
this different?
Speaker 2 (29:09):
Well, first of all, note that Pulsar is already being
used by US military customers across multiple continents, multiple AORs,
on fixed sites, on mounted vehicles, and on aircraft. So Pulsar,
while we're announcing it for the first time today ahead
of Softweek, it's actually been in existence for years. This
is something we haven't been able to talk about, but
we've been working on for a long time. It's an
(29:29):
AI powered electronic warfare tool. They can understand what's going
on in the RF domain and then take measures to
accomplish your aims within the RF domain, so jamming, hacking, spoofing, controlling,
identifying things, countering those things, making sure that your own
electronic systems maintain their functionality. And it's able to do
that extremely fast because it's powered by Lattice, our AI
(29:52):
system that powers all and or all products. It's able
to do what would have previously taken a team of
electronic warfare specialists and a build full of equipment weeks
or months to accomplish in just seconds.
Speaker 3 (30:05):
So to that point and power, I of course preface
all of this from a political perspective, but from a
personal perspective. Right now, it is an emotional time when
we're discussing war, when we're discussing warfare, so we're sensitive
to that. But where at the moment is this being
used in a different kind of way. You were just
talking about how it's already been basically been new since
twenty twenty.
Speaker 4 (30:24):
That's the first time you can discuss it.
Speaker 3 (30:26):
How has artificial intelligence change the pace with which you
can iterate? But also things are changing within warfare well.
Speaker 2 (30:33):
I started an underall because I was concerned with the
United States and our allies around the world. We're losing
our technological edge to some of our near peers and
even now in many areas peers, and I think that
how things have been playing out in Ukraine and around
the world have really proven that out AI is changing
the game in a lot of ways because it allows
you to deploy large numbers of systems in a much
(30:54):
more intelligent, much more useful way than we've ever been
able to do before with even remotely piloted systems, and
been focused on AI since the beginning of our company
about seven years ago. You'll notice that our name and
or all industries is you know, the acronym is AI,
and that's for a reason we were we believe that
artificial intelligence was going to be changing the nature of
warfare long before a lot of people were paying any
(31:16):
attention to AI. I remember when we were starting our
company and it was hard to raise money for AI companies.
People weren't taking it seriously. They saw it as kind
of a science fiction gem, but not something that was real.
And unfortunately the reality of the world today has forced
people to start paying more attention to what AI can
do on the battlefield.
Speaker 3 (31:35):
People paying attention a government they have to are the
defense sector in particular, and I mean I speak to
the fact that the Air Force in the United States
has got with the program, understood the impact that you're making,
and ultimately what.
Speaker 4 (31:47):
Brought you on.
Speaker 3 (31:47):
You're now doing a program you're sort of seen as
a new type, a new force of defense tech startup.
You actually call it a non traditional defense company. Can
you talk us through the Collaborative Combat Aircraft program? Basically,
this is about aircraft that fly alongside those that are manned.
Speaker 2 (32:05):
Sure. I mean this is an area where the US
Air Force and Secretary Kendall deserve a lot of credit
for their vision. They want to deploy AI powered aircraft
at scale alongside manned aircraft on a timeline that is
relevant to the conflicts that we are trying to deter
and that have the ranges and capabilities that we need
to be meaningful to the adversaries that we might have
(32:26):
to fight. I'll just name the name. It's China. CCA.
The Collaborative Combat Aircraft Program is the program to develop
and then build over one thousand ccas that are going
to fly alongside manned aircraft. Loyal wingman, they've loyal wingman,
they've been called andre All just beat out Lockheed Martin,
Northrop Grumman, and Boeing for a slot on the CCA program.
(32:48):
We're going to be using that slot to build production
representative aircraft, not prototypes, but production representative aircraft that are
going to be ready to go to scale at manufacturing
if we can hit all of our hit all of
our milestones, and proved that we are as good at
building airplanes as we are at building AI.
Speaker 4 (33:05):
You went there and you mentioned China.
Speaker 3 (33:07):
I'm interested as to therefore where you will manufacture and
ultimately see deploying of these particular autonomous fighter jets.
Speaker 2 (33:16):
Well, they're going to be deployed right here or built
right here in the United States. Where they're going to
be deployed, that's up to our customer. I don't have
a ton of ton of insight into where exactly they
might do that, though I've got some ideas.
Speaker 4 (33:28):
I'm interested where you see.
Speaker 3 (33:30):
Therefore, at the moment, the US taking leadership back or
do you still worry since splesh you the founding of Andreille,
whether you do think that US has reasserted itself become
again the leader.
Speaker 2 (33:46):
I think that we have a long way to go
in certain areas. But the really powerful thing is that
we've recognized the areas where we have problems. I think
people have been pulled out of their slumber. They realize
that there's areas we can move much faster. We can
do things in not years that just were not possible
to do within the bureaucracy before, within the previous construct
(34:07):
of how we're supposed to get things done. I mean,
the Air Force taking a bet on andrel on CCA
is just one of many examples of people realizing that
business as usual is not something that we have time for,
not in the modern timeline, not in the modern threat environment.
Speaker 3 (34:21):
But what about the competition from the Boeings, from the Lockeys.
Are they not getting with the programs, starting up their
own internal startups or indeed making acquisitions.
Speaker 2 (34:31):
You know, I don't feel like those guys are really
the competition. I feel a bit of a kinship with them. Look,
I'm not running my business the same way that they're
running their business. But at the end of the day,
we're all trying to protect the same country. We're all
trying to protect the same values more or less here
and around the world. I'm actually much more worried about
the competition from Iran. I'm much more worried about the
(34:51):
competition from Russia and China. We've had systems in Ukraine
since the second week of the war, and the innovation
that I've seen coming out of Russia, China and Iran
as kind of a coalition of very technologically advanced adversaries,
it worries me a lot more than the competition that
I have here in the US. There's things that I'm
going to build that I do better than Boeing, for example,
(35:13):
and there's things that Boeing is going to build that
where they're better than me. And I recognize that, and
I think we're doing a pretty good job of finding
how we can continue working together with all of these
different companies, and all these companies that I just mentioned
us beating on the CCA program, we're working with all
of them in some capacity on other programs. It's actually
a little less cutthroat than people would think because of
(35:34):
that very strong shared sense of mission that you see
in the United States National Security apparatus.
Speaker 4 (35:39):
And your aligning incentives with allies as well.
Speaker 3 (35:41):
And we note, of course, an autonomous sub that you've
been working with well Australia and actually sort of co
developing and keeping on pace unheard of kind of in
the defense contract space of actually being on time and
in budget.
Speaker 4 (35:54):
But where else might you manufacture? Might you co develop?
Speaker 3 (35:58):
It is interesting that one of our own reporters highlighting
that the VP of Taiwan was speaking at a US event,
would there ever be manufacturing in Taiwan?
Speaker 2 (36:08):
Well, you're right on the Ghost Shark program. That's an
autonomous robotic submarine the size of a school bus that
we've been developing with the Royal Australian Navy, and we
actually just delivered the first submarine a year ahead of
schedule and on budget, which, as you mentioned, is rare.
It's practically unheard of. There are other areas where we're
looking to expand. I can't talk about the specifics of it,
but I can tell you that I'm in Taiwan frequently.
(36:30):
I was just there a few months ago. I'm going
back in just a few weeks. Taiwan is obviously one
of the key technological partners of the United States, especially
in the region. It's critical for United States military security
that Taiwan remains free and independent and democratic. But it's
also very important for our economy. I would say there
might not be another country in the world that is
(36:54):
really underpinning so much of our way of life when
it comes to semiconductors and all of the things they
power throughout our consumer and industrial and defense economy.
Speaker 3 (37:04):
You talk about how things have changed, certainly from the
Ministry of Defense perspective, but what's also changing is the politicization,
ultimately of companies that are working within warfare, and we
certainly see that from protests here among students. How have
you been feeling angrel is being embraced still by the
(37:24):
private sector from a money perspective, are you raising money.
Speaker 4 (37:27):
Is it easy to do so? Are you looking to
go public?
Speaker 2 (37:30):
Well, Luckily, I think that there is a very big
golf and sophistication around international affairs between the types of
people who are funding ANDERL and the types of people
who are skipping class to camp out on campus on campuses,
I think that there's a lot of people who recognize
that the United States should have the best technology. The
(37:51):
only way to credibly deter warfare is to have a
backstop of credible threat of violence. There is no way
that you can deter every adversary with the threat of
a sternly warded letter or this idea that sanctions are
going to cripple their economy, especially in areas where we
don't even have the leverage to make that true. I
think that on the funding side, where we don't have
(38:12):
any problems, We've got a lot of money in the bank,
we have a very healthy revenue pipeline. We're on the
path to being a publicly traded company, and a lot
of people are really excited about that because ANDROL, in
addition to building tools that keep our men and women
on the front line safe, which is something people want
to be invested in, is also just a good, credible
business with a really good roadmap that's doing well on
our existing products, and it's a healthy pipeline of future products.
(38:34):
We just announced Pulsar, we just showed off some other
new products like Mencex. We're going to be announcing products
through the rest of the year. We've got about a
dozen products that we've publicly announced. We've got another dozen
that are not even publicly talked about yet, and they're
of a similar caliber. And I think that our investors
recognize that perspective and existing I.
Speaker 3 (38:54):
Look forward to you coming back and talking about it
when they can talk about it publicly but quickly. IPO
twenty twenty four or twenty twenty five.
Speaker 2 (39:03):
Well, I can almost promise you it won't be twenty
twenty four. If it was, we'd already have to be
way down that path. Anderal wants to be a publicly
trade company for a variety of different reasons. It's something
that we've wanted to do since the very beginning. You know,
this is my second company. You might know I started
a company called Oculus VR when I was nineteen. I
sold that to Facebook for a few billion dollars. I
was there for a few years before I was fired,
(39:24):
and I've decided that I want to go on a
different path this time, and luckily that aligns with what
our customers want us to do, what our investors want
us to do, and I think what the American people
want to do where they want to be able to
buy into these companies, not have them operate as private
entities beyond reach and beyond control.
Speaker 3 (39:41):
I'm a lucky great to sit down with you. Thank you,
andrewl Founder. This is bruly met technology.
Speaker 2 (39:57):
That's real eating gees and if I sephony of phrases.
Speaker 3 (40:06):
What a song simp Simplicity's delight and was created with
software from Suno, one of the new crop of AI
startups focused on basically building tools to automate the music
making process. But while the AI music hera is creeping
upon us, not everyone is a fan.
Speaker 4 (40:20):
Just break it all down.
Speaker 3 (40:21):
I believe makes Rachel Mets, who actually is the joy
behind that.
Speaker 4 (40:25):
Song that you just heard? And Rachel, when am I
gonna be able to stream it on Spotify?
Speaker 3 (40:29):
And ultimately that is the issue here right that a
lot of AI made songs are.
Speaker 4 (40:33):
Kind of taking away the business of real artists.
Speaker 11 (40:36):
Who I think it's a little bit it's a little
bit early to say that definitively, but that is a
concern absolutely, both of artists that see the technology developing
of record labels. You know, there are a lot of
different stakeholders in the music industry, and as AI becomes
better and better at making music, they have a lot
of concerns about this that they're increasingly expressing.
Speaker 10 (40:57):
For sure.
Speaker 3 (40:58):
What's interesting is perhaps use Footshina light on Souno, but
also Udio, which is actually backed by Andrewson Horrace, but
also some players in the game. I think a common
is one of the as one of the money behind it,
as well as United Masters that Steve Stout, So they
do have backing of some players within music.
Speaker 4 (41:16):
But it looks as though.
Speaker 3 (41:17):
These companies are trying to ensure that you're not able
to say please make me a song in well the
essence of Billie Eilish. They are trying to be clever
about the way in which we basically copy or don't.
Speaker 11 (41:29):
Yeah, I mean they want to position themselves as something
that anybody can use and I am anybody and I
can use them to make music. And it is true
that a very quick process or you can make it
as long as complicated as you want.
Speaker 2 (41:44):
You can bring your own music to it. So it's
for anybody.
Speaker 11 (41:48):
It's someone who's a professional musician who wants to augment
the music making process, or for someone who just wants
to type in a quick prompt and get in a
song about the simple pleasures of eating cheese or any topic.
Speaker 2 (41:58):
Really.
Speaker 11 (42:00):
Yes, there are some people in the music industry, such
as Common. Also will I Am was another person who
put some money into UDO. So it'll be interesting to
see where musicians sort of you know, come in in
the coming months and years, if they're interested in participating
with these companies and using them, or if they say, hey,
wait a minute, I don't want you training on my music,
(42:22):
or maybe a little bit of both.
Speaker 3 (42:24):
I assume, as we've seen with image generation, as we've
seen with video very briefly Rachel, lawsuits likely.
Speaker 4 (42:30):
To happen here.
Speaker 2 (42:32):
I will yes, I would expect. So.
Speaker 11 (42:36):
I spoke to somebody in the music industry and they
said that was one of the things they're expecting to
see happen. They're expecting to see some deals between companies
and that are building this music making software and record labels,
and maybe other stakeholders in the coming months, but also
perhaps some lawsuits. And as we know, the music industry
(42:58):
has been quite litigious. It has already involved in some
lawsuits regarding other types of generative AIA companies.
Speaker 3 (43:04):
And look you MG just striking that deal with TikTok,
looking at how to protect artists versus AI.
Speaker 4 (43:09):
It is going to be something we unpack with your help. Rachel.
We thank you so much. Rachel Metz. How does it for?
This in edition and Bloomberg Technology. Don't forget to check
out our podcast. This is a Bloomberg
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