August 18, 2025 • 43 mins
Bloomberg’s Matt Miller discusses plans by current and former OpenAI employees to sell $6 billion worth of shares to an investor group that includes SoftBank. Plus, investors react to US government plans to take a stake in Intel. And global competition in the electric vehicle space picks up.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Vla Low in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech. I'm Matt Miller here in New
York City.
Speaker 3 (00:26):
Coming up.
Speaker 2 (00:26):
Open Ai employees plan to sell about six billion dollars
worth of shares to an investor group. That value is
the company at five hundred billion, almost double what it
was valued at last time at race Capital Plus. The
Trump administration considers using funds from the US Chips Act
to take a stake in Intel, so using Biden money
(00:48):
to do Trump's work.
Speaker 3 (00:49):
And we'll take a look at the.
Speaker 2 (00:51):
Ev race between the US and China as we await
results from Chinese carmaker show.
Speaker 3 (00:57):
Me and Expang this week.
Speaker 2 (01:00):
First off, let's take a look what's going on in
the stock market. The Nasdaq right now off just about
one tenth of one percent, So although it's coming down
a little bit today, it's coming down from all time
highs twenty three six hundred ninety five, still quite an
elevated level for the NDX. Current and former open Ai
(01:20):
employees are planning to sell nearly six billion dollars worth
of shares, as I said to an investor group, and
that is one of the top stories.
Speaker 3 (01:31):
That we're following.
Speaker 2 (01:32):
But before I get there, take a look at what's
going on with Intel shares right now down about two
and a third percent, i should say, Intel falling after
that news on Friday, and Meta down on a story
out of the information that the company's going to revamp
its AI unit for the fourth time in six months,
splitting it into four also down two and a third percent. Now,
(01:56):
let's get to that open Ai story. As I said,
current and former employees planning to sell six billion dollars
with a shares to an investor group. That's a big number,
but the bigger one is five hundred billion. The maker
of chat GPT is now, according to sources, valued at
almost twice as much as it was last time it
raised capital for more. Let's bring in Bloomberg's Kate Clark
(02:18):
here on set seven thirty one.
Speaker 3 (02:20):
Lex Kate.
Speaker 2 (02:20):
It's a massive amount, considering a month ago it was
worth two hundred and sixty billion. Has it really grown
in value that much in four weeks?
Speaker 4 (02:28):
Not necessarily, but it's really you have to look at
this as a talent worse story, and open ai employees
are getting offers from big tech companies for tens of millions,
even hundreds of billions of dollars to leave open Ai.
Secondary transactions like this help open ai retain their talent.
Speaker 3 (02:46):
In terms of.
Speaker 2 (02:49):
Why we're seeing these big secondary offerings and at the
same time as we're seeing, you know, Mark Zuckerberg paying
people one hundred million dollar bonuses, is every valuation just
lifting out on the West Coast if you're involved in
AI programming.
Speaker 4 (03:04):
Absolutely, yes, is the short answer. And partly that's because
investors are incredibly excited about these companies. They think open Ai,
Athropic and others will be trillion dollar companies like Meta,
like Google, and employees, like I said, are getting these offers.
So there's no choice but to lift these valuations continually.
Speaker 2 (03:22):
So what's the next stop? I mean, why, say five
hundred billion. Why isn't open ai worth a trillion already?
Speaker 4 (03:30):
I mean, it's a good question, and these valuations are
pretty arbitrary at times. I mean, jumping from three hundred
billion to five hundred billion is pretty crazy and I've
never seen anything like this, but I think you can
expect Openingy's valuation in the private markets will continue to rise,
and I who knows how.
Speaker 3 (03:44):
Far it will go.
Speaker 2 (03:46):
So there's another story from Bloomberg about Meta's offering in
AI in terms of a standalone app. Right, does chat
gbt absolutely dominate or are people using Meta? Are people
using Plexity, are people using Gemini?
Speaker 4 (04:02):
People are absolutely using all of them. People are experimenting,
and there are a lot of questions about the durability
of the revenues of a lot of these products because
there is experimentation. But Chat tbt is the one of
the largest apps of all time. I mean, the use
is undeniable. People absolutely love it. It's part of everyone's
every day now, or most people's every day at least.
So I do think that there's real argument for the
future of this company. But I think everyone's correct too
(04:25):
to be very skeptical of how far these valuations are climbing.
Speaker 2 (04:27):
All right, Kate, great having you on this story and
look forward to more reporting. K Clark there from Bloomberg News.
Now let's get to a story about building AI in
the US. Han Hai, also known as Foxcon, is said
to take charge of a US factory owned by soft Bank,
setting up what could be the first manufacturing site in
the company's five hundred billion dollars stargate venture with Open
(04:51):
Ai and Oracle Soft. Bank will acquire Han Hi's electric
vehicle plants in Ohio, but the Taiwanese manufacturer will continue
operating the com complex, transforming it into a hub for
producing AI servers.
Speaker 3 (05:05):
For more on the.
Speaker 2 (05:06):
Broader tech market, including the impacts of tariffs, Iako Yoshioka
joins US Wealth Enhancement Group portfolio consulting director and IPO.
Great to have you on the program. How much of
this five hundred billion dollar stargate story is real? I mean,
is it actually going to happen in that size?
Speaker 3 (05:24):
You know?
Speaker 5 (05:25):
Hi, Matt, I hope you're doing well. You know, we
do think that the you know, stargate thing is really real,
at least so far, we're seeing it across a lot
of the tech companies.
Speaker 3 (05:36):
There are so many that.
Speaker 5 (05:37):
Are involved, but it's such a large number and we
still have to see it come through.
Speaker 3 (05:42):
So is this going to be.
Speaker 2 (05:47):
A situation where we have foreign owned companies coming in
here and just operating manufacturing plants in the US, Because
it seems like that runs to some extent counter to
what Donald Trump.
Speaker 3 (05:58):
Was hoping for.
Speaker 5 (06:00):
I think any investment here in the US is being
looked at very positively.
Speaker 3 (06:05):
You know.
Speaker 5 (06:05):
Overall, just digital infrastructure really is something that the US government,
you know, needs to make sure that we are at
the forefront. Similar to having a strategic petroleum reserve, we
really need to make sure we have that digital infrastructure
that is strategic. Just given you the proliference of AI,
(06:26):
just how it's going to be used going forward, and
there's so many unknowns still related to AI.
Speaker 3 (06:33):
So are we going to see a jump in employment?
Speaker 2 (06:35):
I mean, is the FED going to have to pay
attention to this or are we looking at you know,
just giant sort of server farms and electric plants that
are going to be needed.
Speaker 5 (06:45):
Sure, I think we're still in the early phases of
discovering what the productivity improvements are going to be.
Speaker 3 (06:52):
I think it's really.
Speaker 5 (06:54):
Clear so far that there are some But I think
there's also some challenges in regards to what is this
going to mean for like the entry level workforce. You know,
those kids who are just graduating college and when knowledge
is being democratized because of AI, you know, how do
you get them trained? How do you give them the
experience that they need in order to validate what AI
(07:17):
is telling you.
Speaker 3 (07:18):
It does look like Ioko, this is uh. You know,
the tariff.
Speaker 2 (07:21):
Strategy is forcing TSMC and fox Con and other foreign
owned companies to come here and produce. What about American
companies like in Nvidia and AMD that are going to
have to pay fifteen percent of the revenue on the
Chinese business they do? What about these export taxes? How's
(07:42):
that going to affect businesses here?
Speaker 3 (07:45):
Sure?
Speaker 5 (07:45):
I mean, I think it's sort of just the pay
to play issue that we're seeing here. But on the
flip side, I mean, Nvidia noted that China is a
fifteen billion dollar fifty billion dollar total are market, and
I don't think we want to exclude that, and we
want to make sure that it's American technology that is
(08:06):
going to be the base of overall AI.
Speaker 2 (08:10):
I noticed in your notes you're very focused on the
economic data coming in the FED meeting at Jackson Hole,
which obviously is key. Rates are incredibly important to your business.
What do you expect from Jerome Power. Are we going
to see a policy shift?
Speaker 5 (08:26):
I'm not sure if we're going to see a policy
shift so much. Perhaps they'll talk about, uh, the average
inflation targeting that they sort of introduced a few years ago.
But you know, for the most part, we are looking
to see if they are going to signal any sort
of openness to that rate cut in September that the
(08:46):
market's already pricing in just given some of the numbers
that we've seen so far this year regarding both inflation
and unemployment. But that PPI number last week really threw
a little bit of a wrench into the story.
Speaker 2 (09:00):
Yeah, three point seven percent on the core does four
and a half percent? Does the Does the FED target
rate right now feel restrictive to you a little bit?
Speaker 5 (09:11):
I believe that, you know, in normal times, I think
we're looking at a FED funds rate closer to three
to three and a half percent, and so you know,
having current rates above four is still a little restrictive,
and you're seeing it with those cyclical companies. I mean, thankfully,
most corporations have pretty solid balance sheets, just given the
(09:34):
opportunity refinance back during the COVID years. But we're, you know,
five years posts that, and so having a little bit
lower interest rate in order to refinance further is going
to be helpful for many of those cyclical companies.
Speaker 2 (09:47):
It does seem like cyclical companies, industrials, real estate investment
trusts are now far more important to the tech picture
than they once were.
Speaker 5 (09:56):
Absolutely, you know, the digital infrastructure really is something that
investors have been looking at beyond just the actual chips
and you know, servers that are powering AI. You know,
we're definitely looking at real estate, definitely looking at you know,
industrials that provide power, cooling, infrastructure and all of that
(10:19):
to the data centers, and so, you know, there's definitely
a broadening out. It's just that it's all still related
to one major theme, which is AI.
Speaker 2 (10:28):
All Right, Iako, great to get some time that you
really appreciate it. Iako Yoshioka of Wealth Enhancement Group talking
tech as well as, you know, the old economy, because
the two are coming together with digital infrastructure coming up.
Shares of Day four surge after reports Toma Bravo will
take the HR software firm private. More on that story next.
(10:49):
This is Bloomberg Tech chairs in Day force surging today.
(11:10):
That's because Toma Bravo is in talks to buy the
HR software maker, according to sources, with plans to take
it private and a deal that could be announced as
soon as the coming weeks. For more on this story,
let's bring in Bloomberg's Lenna Baker. She runs our deals
team here in New York, and Leanna, it's interesting because
(11:30):
a lot of these software companies, I feel like they
need to sell quickly before they're made obsolete by AI.
Speaker 6 (11:36):
So that's one opinion. But this company, day Force, has
been around a long time. It used to be called Sarridian,
it used to be private actually, you know, before twenty eighteen.
And they make software that helps with HR payroll and
they have their tentacles deep into enterprises, so maybe they
won't be disintermediated right away. There's been a little bit
(11:57):
of a surge and deals related to HR and payroll.
There was a deal for pay Corps earlier this year.
Paychecks bought that and ADP also did a deal to
buy Workforce last year. So these are just some of
the acquisitions that have been happening in the space. We're
seeing consolidation and not necessarily AI taken over.
Speaker 2 (12:16):
There's a couple take privates the Soho House story I'm
talking about also today.
Speaker 3 (12:20):
But is this part of a trend.
Speaker 6 (12:23):
These private equity firms have just raised so much dripout
over the years, Toma Bravo has you know, tens of
billions to deploy. They've been one of the more active
acquirers we've reported there and talks to buy another company
in the tech space called Varrant, and earlier this year
they did a big carvette out a Boeing, So they
definitely want to watch. Orlando Bravos appeared on Bloombero TV
(12:44):
many times to talk about their strategy of rolling up
software companies.
Speaker 2 (12:48):
So and they're one of the more equivalitive acquisitive firms
out there. How is private equity doing in general in
terms of making purchases because I thought they couldn't find exits.
Speaker 7 (12:57):
Now that's a great point.
Speaker 6 (12:58):
We are seeing the IPO markets starting to come back,
and we'll be watching to see whether there's these candidates
that are backed by private equity that could finally exit
through the public markets. But so far, a lot of
them like trading assets to each other. I mentioned that
day Force used to be backed by private equity, so
Thhlee as far back as to two oh seven they
(13:21):
were backed by another firm, So this would sort of
be a return to private equity.
Speaker 4 (13:26):
For day Force.
Speaker 2 (13:27):
So what's next in these deals? What are you and
your team watching out for us?
Speaker 6 (13:31):
So you mentioned that we reported that this could still
be a few weeks away, so they're still news to break.
What is Tomo Bravo pay for this company? The company
is eleven billion dollar enterprise value, but what's the exact
price they're paying? Does this go to up to fifteen
billion for example? So there's plenty of details to break
that investors will be watching.
Speaker 3 (13:47):
All right, Leanna, thanks very much.
Speaker 2 (13:48):
Lena Baker runs the deals team for us here at Bloomberg.
Speaker 3 (13:51):
Now.
Speaker 2 (13:52):
Swedish AI startup Lovable called itself the fastest growing startup
in July and now it's eyeing nearly a billion dollars
an annualized sales next year. That's according to the CEO
anton Oska. Speaking with Bloomberg text Tom mackenzie, he says
Lovable's approach to developing allows anyone to be a coder.
Speaker 8 (14:12):
I think everyone in the gage of AI really have
to relearn which tool to use well. And if you
are technically you know how the coding works, you're actually
more productive with Lovable, so that we're seeing a lot
of technical people loving the tool and then being able
to talk more productively to the AI. Anyone can learn
(14:35):
to be productive talking TODAI, but there's an advantage for
technical people. I think what we're going to see is
that everyone is a developer right now. There's been much
less one percent of the world population. Everyone is becoming
a developer now and ninety nine percent of the best
ideas are from people who don't know how to code.
So this is for me a very clear example of
(14:58):
AI having a positive impact. More people can start successful
businesses without being bottleneck by not having time or the
skill set required to build software.
Speaker 9 (15:08):
When you think about when you think about listing even
it is a further way prospect ants on. Is Europe
the place that you would consider or does it have
to be the gravitational pool of the US.
Speaker 8 (15:18):
So I'm really betting on Europe, and one of the
reasons we're here is to prove that you can build
a world class team and execute cute better and faster
than from the US. I would love to list e
ear off, but I haven't looked at any of the details.
Speaker 9 (15:33):
Okay, And in terms of when we look at for example,
Google absorbing Windsurf and earlier on of course, in this
innovation story, Microsoft absorbing a reflection, is that potentially what
happens to you and love. Would you be open to
that kind of acquisition where the talent is absorbed into
one of the megacap us tech companies or is that
(15:55):
something you would you would fight against.
Speaker 8 (15:57):
That's something I wouldn't fight against. I think most of
the value that we're going to accumulate us are, like
the bottomneck right now is on the technology. In the future,
most of the values in the relationship we have with
our customers, the trust and the community around it, and
that value can only be realized as a standalone and entity.
(16:19):
So that's what I'm expecting to us to continue to be.
Speaker 2 (16:24):
That was lovable CEO anton Oska. Coming up, Comcast gets
serious about its customer losses, but it's a long road ahead.
Details Next this is Bloomberg Tech. Comcast has a problem.
(16:48):
The company is losing customers in its most significant business,
the one that provides internet access to nearly thirty million
American households. Comcast has been reporting record losses in broadband
subscribers for three quarters in a row. Now. Bloomberg Telecoms
reporter Kelsey Griffiths joins US now with more So Kelsey,
what's the problem. Why is Comcast losing all these subscribers?
(17:11):
Where are they going?
Speaker 10 (17:13):
That's right, So Comcast is kind of caught in this
confluence of several factors. We're seeing competition from the mobile
companies as they are offering their own version of home
internet service that's boosted by or powered by their five
G infrastructure. We're also seeing the end of the Affordable
Connectivity program, which offered subsidies that Comcast greatly benefited from.
(17:35):
It kind of helped boost their subscriber numbers. Now those
subsidies don't exist anymore, and those customers have dropped off.
And we're also seeing that Comcast has struggled to kind
of maintain some of these customer relationships and that has
been a pain point that has led to some of
these cord cutters.
Speaker 3 (17:50):
So what are they doing about it? How can they
turn this around?
Speaker 10 (17:55):
Yeah, So Comcast has a multi prong structure. They've started
a five year price guarantee to sort of help lock
in some of these customers and give them certainty in
what they'll be paying from year to year. What Comcast
had been seen is that customers were responding well to
the cable subscription model of what some folks like to
(18:15):
call the exploding prices. So you sign up for an
introductory rate, it's really great for a year, and then
you're hit with this big increase. And so that's something
that Comcast is trying to move away from and they
are hoping that that will be successful.
Speaker 2 (18:29):
So when are we going to see results in It
sounds like obviously a longer term strategy. But when you've
had subscribers falling for three quarters in a row, I
guess you want investors want you to turn their around
this quarter.
Speaker 7 (18:44):
That's right.
Speaker 10 (18:44):
The market is typically focused on subscriber numbers from quarter
to quarter, and so the fact that we've seen them
falling for the last three quarters doesn't look great. Comcast
says that folks are responding really well, even though it's
still early days. People seem to really like the remobile
lines that Comcast is throwing in to kind of help
anchor that bundle a bit more in a more modern service.
(19:07):
We also see that people are potentially responding to this
price guarantee by upgrading their internet service. They say, look,
we know that we're not going to be paying huge
price increases over the next five years, maybe we go
up into speedchire or something like that. So Comcast says
that it's still early days, but they are feeling encouraged.
Speaker 2 (19:28):
All right, Kelsey, thanks very much, Bloomberg's Kelthy Griffiths colors
the telecoms for US. And now let's talk about one
of the companies that may be eating comcasts lunch. YouTube
is said to be looking at making a play.
Speaker 3 (19:41):
To host the Oscars.
Speaker 2 (19:42):
According to sources, the Google owned video site is inquired
about buying the rights to the Academy Awards.
Speaker 3 (19:48):
For more.
Speaker 2 (19:48):
Bloomberg Managing editor of Media and Entertainment Lucas Shaw.
Speaker 3 (19:51):
Joins us now and Lucas. Obviously, YouTube isn't.
Speaker 2 (19:54):
Offering you an Internet connection, but rather than paying for
a cable package, a lot of people are likely to
watch TV on YouTube instead.
Speaker 11 (20:03):
Yeah, I mean, look, YouTube is the single most popular
video platform by any metric, right you look, just yourship
on television in the US. It's much bigger than Netflix
and Amazon and all the different Disney channels. In fact,
people spend more time watching YouTube on a TV than
all of Disney's television networks and streaming services combined, that
(20:23):
would be the big reason why an award show like
the Oscars would at least consider what would be an
incredibly controversial move within the Hollywood industry.
Speaker 3 (20:31):
So how likely is YouTube to get the Oscars?
Speaker 2 (20:35):
Because I imagine a lot of Oscars viewers do still
have cable television packages or even watch just the networks
with rabbit ears, if you get my drift.
Speaker 11 (20:47):
The average aid to the Oscars is probably a little
bit older now. Some of that is because it's still
something you watch on television, and some of it certainly
because it's an award show that I think means more
to certain generations than the youngest generation that.
Speaker 3 (21:00):
Was raised on YouTube.
Speaker 11 (21:01):
As for the odds of YouTube getting it.
Speaker 3 (21:03):
It's hard to say at this point. So Disney, which.
Speaker 11 (21:06):
Has had the rights, or ABC has had the rights
for about five decades, they had an exclusive negotiating window
that they let laughs. They had spent a bunch of
money getting the Grammy Awards, which some people think means
it's likely or at least possible that they will let
the Oscars go, which would have been unthinkable previously. And
so you now have about a half dozen different companies
looking at it, Disney, Paramount, Netflix, Amazon, YouTube, and even
(21:31):
Comcast NBCUniversal, which you were just talking about.
Speaker 3 (21:34):
I would say YouTube. I have a hard time seeing
YouTube being the most likely winner.
Speaker 11 (21:39):
I just don't see why the Film Academy would go
with a company that doesn't really have anything to do
with the traditional movie business. But if the thinking about
it just as an award show, that's one great way
to maximize the audience well.
Speaker 3 (21:51):
And maybe a sign of things to come as well.
Speaker 2 (21:53):
Great reporting, Lucas, really love reading your take on the
media industry. Bloomberg's Lucas Shaw is our managing for that industry.
Coming up, Kim Forrest of Boca Capital Partners joins us
to talk about semiconductor stocks and what's moving the markets today.
This is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm
(22:35):
Matt Miller filling in for Ed and Caroline. Let's take
a look at what's going on in these markets. Here's
an intra day picture, so it doesn't tell you a
heck of a lot, except for the fact that we're
down by about a quarter of a percent from what
was an all time high. Obviously, we're at pretty lofty
levels here, both in terms of the price and in
terms of valuations.
Speaker 3 (22:56):
Let's take a look at what's going on in specifically.
Speaker 2 (22:59):
Chip right now, because the Philadelphia Semiconductor Index, the SOX
index is up even as Intel falls, because Intel is
not as important as it once was. Right, It's only
a one hundred billion dollar company, and today it's worth
one percent less because of some of the news that
we heard over the weekend and some of the moves
that we.
Speaker 3 (23:18):
Saw on Friday.
Speaker 2 (23:19):
Let's stick with Intel and semiconductors right now and bring
in Kim Forrest, the CIO of Boca Capital Partners, and Kim.
This I think was one of the most exciting stories
of last week, the fact that, at least according to
people familiar that we spoke with, the White House is
looking at taking an actual stake in Intel and could
use money from Biden's Chips Act to do it.
Speaker 3 (23:42):
How do you see that, Well, I see it.
Speaker 12 (23:45):
It's a distinct possibility, and especially because well if you
look at where the chips are produced. The most important
chips in the world, which I can say is probably
twofold of course AI chips, but also defense types of chips,
and not just for the US, but drones and all
(24:06):
manner of smart you know, killing machines that they use
in the in defense are made on an island sixty
miles away from Taiwan earth from China called Taiwan, and oh,
by the way, there's earthquakes there too, So doesn't seem
like it would be the natural place to have all your.
Speaker 3 (24:26):
Eggs in one basket, does it?
Speaker 12 (24:28):
Maybe Intel can change that, Kim.
Speaker 2 (24:30):
I think it's a great angle, right, the national defense angle.
In case we're in a war and someone cuts off
those supplies, we're in trouble.
Speaker 3 (24:40):
Is Intel the.
Speaker 2 (24:41):
Right company in which to take a steak? Is Intel
the right vehicle with which to make chips?
Speaker 12 (24:50):
Well, I mean, I think it's close enough for government work.
I love that phrase because what does that mean? Well,
it's not exactly one hundred percent on Semi would be
that name because while they're on Taiwan, but also they
make the world's most exotic chips, and they do it
at yields that are impressive, and Intel has struggled to
(25:11):
catch up. That being said, it's not out of the
realm of possibility for Intel to catch up. And oh,
by the way, seventy five percent of their chip making
capability is right here in the US.
Speaker 2 (25:25):
So how much do you think the US should take
and what are the best plans for Intel? I mean,
they did want to build a thirty billion dollar fab
in Lincoln County, Ohio. Is that something that they need
to revive plans to do?
Speaker 12 (25:43):
I would say maybe, like, look at what they've got, right.
I like that approach of incremental as opposed to let's
build new. But that being said, I don't really know
what the right amount is. I'm pretty much a straight
up capitalist. I think companies fighting each other for competitive
(26:04):
advantages and trying to serve customers is the best way
to go. But I understand that the government would have
to own something to be able to give it, you know,
essentially gobs of money and maybe some outside support from
things that it owns, like maybe the jet propulsion laboratory
or other smart government kind of think tanks.
Speaker 3 (26:26):
So I understand.
Speaker 12 (26:28):
I don't know. I would not like to see it
own a lot, and I certainly wouldn't like to see
it the government dictating Intel's business at a broader scale.
Speaker 2 (26:41):
Kim, what's your take on the export tax that this
administration wants to slap on Nvidia and AMD because if
you look at these things through the national security lens,
and that makes sense that deal would seem like we're
willing to sell some national security at a certain level.
Speaker 3 (27:01):
Well, we always are.
Speaker 12 (27:02):
We're capitalists here, and you know we have None of
this is new. If I've been in the world of
software and you had to go through some pretty strict
rules to be able to sell your software outside of
the US, and you could get a thumbs down for
many reasons, not all that we're explained to you necessarily.
Speaker 3 (27:24):
So none of this is new.
Speaker 12 (27:26):
So I'm not really sure that this is really selling
the top jewels to you know, China through a MD
and and videos kind of be not a products but
B or C products.
Speaker 3 (27:41):
So that's that's one thing.
Speaker 12 (27:43):
The other thing is quite honestly, you know, if there's
a will, there, there's a way. I'm sure that a
lot of the top rated chips, the Blackwell chips are
finding their way into China and and not direct routes,
we'll just call it. So let's try to control what
we can control. And I think that's a good way
to go for not just chips but software as well.
Speaker 2 (28:04):
As an investor, do you have to watch out for
the next company that has to promise a share of
its revenue to the I guess to the White House,
but really to the American taxpayer, right in order to
do business overseas.
Speaker 12 (28:20):
Sure well, it does seem like that is the trend here.
But the good news is that these chips aren't They
are in demand, and the price is what the price is,
So fifteen percent higher doesn't seem like it's a huge
barrier to anyone that really wants these chips. You know,
the Blackwell chips are a lot more expensive than the
(28:40):
chips that we are offering up and they'd rather have those, right,
But I don't think it's a huge barrier because the
companies are probably going to pass that price along.
Speaker 2 (28:51):
In order to avoid much higher prices for chips here
in the US. Big companies like Apple can make, as
President Trump told us, investments in the US and get
a carve out. What does that mean for smaller companies
that are historically also very important to the development of
technology in America?
Speaker 12 (29:10):
Sure well, I think they have to pay attention to that.
Right Right now, we're talking about hardware, but software is
a whole different category. Oddly enough, Synopsis was forced to
guarantee that China can access all of its chip software
development tools in perpetuity to allow this ancest deal that
(29:34):
went on. I hope you guys know what I'm talking about.
Answers is a small Pittsburgh company, but those small companies
can be mighty. And you know, I think that everybody
that is entering this area as a new company or
you know, the ones that are here, are going to
have to pay attention to now being the focus of
(29:56):
the government. And it is what it is, and it's
just another barrier. It's pretty much the same as any
regulation that comes your way.
Speaker 2 (30:05):
Kim, great talking with you. I love your intel on this.
Really helpful, I think to viewers. Kim Forrest, there is
the CIO of Boke Capital Partners coming up, former President
Joe Biden. You see here test driving Ford's electric F
one fifty the Lightning Way back in twenty twenty one.
(30:25):
But sales of EV pickup trucks still haven't picked up.
Speaker 3 (30:28):
Much with US consumers.
Speaker 2 (30:30):
We'll talk about why and where American carmakers stand in
the EV competition with China.
Speaker 3 (30:36):
This is Bloomberg tech.
Speaker 2 (30:50):
American car buyers typically love pickup trucks, but not Apparently
the electric versions Tesla, Ford, General Motors, and Rivian all
struggled to gain traction in this part of the market.
Bloomberg's Detroit bureau chief David Welch has been reporting on
this story, and David, I have to say, I'm following
these companies closely, and when you know the unit sales
(31:13):
numbers come out every month, I'm shocked to see how
small they are for evs in general, but also the
fact that all these companies have tried to get in
with pickup trucks first.
Speaker 3 (31:24):
Why is that.
Speaker 13 (31:25):
I think when you had announcements from riv and Tesla
early on that they were going to go with trucks,
I think what everybody figured is the US pickup market
is so big that even if a small portion of
it went electric, you would still get a pretty big
chunk of buyers. And you had all of these reservations
people paying one hundred dollars to Tesla or Ford for
(31:46):
the lightning. You know, Tesla said a million people, Ford
said one hundred and fifty two hundred thousand people at reservations,
and they tooled up production for that, and GM piled
in and everybody said, geez, you know that this is
really going to hit. But those reservations didn't really turn
in to sales for a variety of reasons. One is,
pickup trucks lose a lot of their range when you're
(32:07):
towing or hauling something, and not everybody uses. In fact,
the majority of pickup owners probably never haul or tow anything,
but they like the fact that they can. And those
who do, particularly commercial users, say they just don't get
enough range. They don't get enough driving range when they're
actually doing the work their truck needs. And there are
political reasons too, Matt. Republicans tend to buy pickup trucks,
or I should say pick up buyers tend to be
(32:29):
more Republican than not, and ebe buyers tend to be
more Democrats than not, and a little bit of a
disconnect there. So people just haven't bought them in big numbers,
and everybody is struggling to sell them.
Speaker 2 (32:40):
Nonetheless, the industry keeps pushing towards this. In fact, I
was talking to Jim Farley yesterday.
Speaker 3 (32:48):
He was out at Pebble Beach.
Speaker 2 (32:50):
And he's touting this new affordable It's a mid size pickup,
so not a full size American machine, but a mid
size pickup that they'll build in Kentuck for thirty thousand dollars.
Why do they continue to push towards this goal.
Speaker 13 (33:04):
Well, the price is one of the big problems with
pickup trucks. I mean, you look at GM's trucks, for example,
they can go five hundred miles on a charge the
Silverado and the gmcc era evs. That's quite a way,
and they do lose a lot of their range when
you're towing a decent amount of weight, but that's still
three hundred miles you can go if you're hauling something
(33:24):
that's pretty good. But the trucks are very expensive. So
if you're a fleet buyer or if you're just an
individual consumer, you're looking to pay another ten twenty thousand
dollars for the electric version, and you don't really get
anything more for that other than evs are pretty fun
to drive. But you know, a lot of truck owners
also like the hum of their VA too as opposed
to the silence of an electric motor, so they're just
(33:45):
not getting enough for that. You get the price down
to thirty thousand even for a mid sized pickup truck.
That's kind of where you're looking at Ford Ranger and
Chevy Colorado mid size pickup trucks. You know, that's where
they're selling, you know, roughly speak, then you'll get some
more sales. GM's doing something similar. They're going for a
lower range pickup truck four hundred miles instead of five hundred,
(34:08):
but should sell for thousands of dollars West. So everyone's
trying to get the cost down because that is one
of the big barriers with these vehicles.
Speaker 2 (34:14):
Right Slate for example, going for a much lower range
but also a far lower price is an interesting startup
as well, David. As always, I look forward to your reporting.
Bloomberg'sdavid Welch, Detroit bureau chief covering since he's in Detroit
for the most part, cars.
Speaker 3 (34:30):
Let's stay on that to some extent.
Speaker 2 (34:31):
Shipments of China's rare earth products reached their highest since
January last month. The increased supply comes as Beijing agreed
to resume sales to the US as part of a
trade truce. Earlier this year, China curve flows of seven
rare earth products made there in retaliation to US tariffs.
That's a move that raised concerns about a global shortage,
(34:53):
and it hurts particularly the car industry, the electric vehicle makers,
because rare earths are so important for really.
Speaker 3 (35:02):
Ice and evs.
Speaker 2 (35:04):
Let's stick with the global competition in that space and
bring in Ellen Hughes Cromwich. She's a visiting fellow at
Third Way's Climate and Energy Program, former chief global economist
at the Ford Motor Company. And Ellen, this is so critical.
We were just talking about the importance of ship you know,
semiconductor manufacturing, and at least there there's a solution, right,
(35:27):
you can actually make them in the US.
Speaker 3 (35:30):
But what about rare earth?
Speaker 2 (35:31):
Is it possible to have a scalable business that manufactures
rare earth magnets in the US or is it just
too dirty?
Speaker 14 (35:43):
Oh hi, Matt, great to be with you. No, we
have plenty of rare earth. The question is when not
if it takes a long time to get to a
point where you're harvesting and you're refining. We learned that
with some simple critical minerals like liftium in some others
for the auto industry. So I'm firmly in the camp
(36:06):
of hey, if you if you want to do it, you.
Speaker 7 (36:08):
Can lift it and refine it, but it will take
some time to.
Speaker 14 (36:13):
Get that infrastructure in place, and really that's been one
of the bottlenecks for evs in general, which is, you know,
you've got a very complicated industry. It's making a transition.
It takes a substantial amount of time to do that.
Speaker 2 (36:29):
So this is another area where the Trump administration is
buying into private industry to help push it along. NP
Materials is one company in which they've taken a stake
to do that. Do you believe we need a real
government push in order to be refining rare eers here?
Speaker 14 (36:50):
Well, you know, if you think about public finance theory,
and I you know, just want to put this on
the table. If you think you have a market failure
or you got a negative externality, it's very simple. There's
a role for government intervention. But we got to stick
to those principles. And if you know, in the case
of these things where you know, we have a public good,
(37:15):
which is our climate, it's a public good.
Speaker 7 (37:19):
We consume it, everybody does every day.
Speaker 14 (37:22):
And if you think that that public good has to
be protected, then there is a role for government policy.
Speaker 7 (37:30):
And I, you know, I just.
Speaker 14 (37:31):
Stick to that framework and those principles, and I think
those are important tests for understanding where we need public
policy and where we don't need public policy.
Speaker 2 (37:41):
So we've seen ellen Ford has to pause production at
some of its factories over the past few months because
they can't get a hold of enough rare it's enough
magnets to make the vehicles that they need to. I'm
sure other US manufacturers have had, if not pauses, similar
problems and frustrations. How long until you think we can
(38:03):
get the US refining infrastructure up to speed so that
we no longer have issues like that?
Speaker 3 (38:10):
Are we talking just a matter of years or decades?
Speaker 7 (38:15):
Matt?
Speaker 14 (38:15):
I really think it's going to be in a five
to ten year timeframe.
Speaker 7 (38:20):
I mean, it really takes that long.
Speaker 14 (38:22):
We had a great acceleration in the transition to evs
that started after twenty ten. You know, it grew exponentially
toward the back half of that decade, and we're now
at about a ten percent market share. You know, this
has been a you know, month in, month out gradual increase,
(38:46):
even though July EV sales were surging obviously as customers
wanted to take advantage of the tax credits before they
end next month.
Speaker 7 (38:55):
End to next month.
Speaker 14 (38:56):
You know, it will continue to gravitate higher, but you
know without the IRA tax credits, this is.
Speaker 7 (39:06):
Going to slow it down.
Speaker 14 (39:08):
And you know it doesn't seem like from a competition standpoint,
and like you were just sorrying to like on sort
get sourcing domestic for a lot of reasons, not just
the climate but national security. You know, we got to
move in that direction. So let's make sure we got
the incentive structure.
Speaker 2 (39:29):
Right, Ellen, Great to talk to you, hope to get
you back to talk more about this. Ellen Hughes Cromwick,
Senior Visiting Fellow for the Climate and Energy Program at
Third Way formally at Ford. Coming up, what's in store
for Apple's Vision Pro after adoption has been slow to
pick up. I'm sure that you don't have one that's next.
This is Bloomberg Tech. Apple has slow walked the release
(40:04):
of immersive video, creating a conundrum for the Vision Pro,
which remains an extremely niche products. Here to discuss the
future of the Vision Pro and the latest power on newsletters,
Bloomberg's Managing editor in Consumer Tech, Mark German Mark. It's
interesting because they have this hardware now it is expensive
(40:25):
and heavy, right, but they don't have a ton of
software for it.
Speaker 3 (40:29):
Is that the case yeah, that's right.
Speaker 15 (40:31):
And you know, taking a step back, we've never seen
Apple launch a major new product category that they've spent
nearly a decade and nearly ten billion dollars developing.
Speaker 3 (40:42):
Sort of floup like this, Right.
Speaker 15 (40:43):
The Apple Watch was a little slow out the gate,
but pretty quickly, within a year or several months, it
started to go mainstream. The iPod quickly went mainstream. The
iPhone ticked up pretty quickly. The iPad was a blockbuster
out the gate. So this is going slower than I
think even Apple anticipated to some degree. The best feature
(41:05):
on the headset, to your point, is the immersive video content,
some of the stuff we're showing on the display right now,
but it's very limited. They have a few series, they
only have a few episodes for each of those. They've
only released twenty seven pieces of immersive content in the
last year and a half.
Speaker 3 (41:20):
And it's a conundrum.
Speaker 15 (41:21):
It's very expensive to make, but why invest all that
money in it if the headset's not selling well. On
the other hand, that's why people would buy the headset
because of that immersive content. So they're a little stuck here.
Speaker 2 (41:32):
Well, I mean, there's only so many hours of entertainment
I can get out of like a dinosaur or bono, Right,
So why don't they either make more content for this
thing or put it on hold until they're really ready
to sell a product we need or can use.
Speaker 15 (41:50):
Well, here's the thing. Let's say the vision Pro line
doesn't take off for another two years in twenty twenty seven,
they're going to release a much lighter, completely re vamped,
cheaper version. So if they put out a bunch of
content now and pile up all the content now, by
the time people actually start using the platform right in
two three years from now, all that content is going
(42:12):
to be outdated. They're going to refresh the vision Pro
in the next several weeks here, right before the end
of this year, with a faster processor and a new
strap that's going to make it faster, more capable for applications,
probably improve immersive video content, improve three D video.
Speaker 3 (42:28):
It's going to make it feel a.
Speaker 15 (42:29):
Bit lighter when you're wearing it on the head, so
a bit of a marginal improvement, but the real changes
are still far out. But again, the endgame here is
augmented reality glasses. This is going to be table stakes
for all the tech companies within the next three to
five years. Google's working on this, Samsung's working on this,
and Apple has been working on this for several years.
Speaker 3 (42:51):
You know, the original.
Speaker 15 (42:52):
Concept for a headset for Apple was glasses, but they're
not going to release glasses until they can get some
visual quality on par with Division Pro at the thin
enlightness of a glasses form factor. That's still going to
take quite a bit more time.
Speaker 3 (43:06):
All right, Mark, thanks very much for joining us.
Speaker 2 (43:08):
Bloomberg's Mark German there you can check out his power
on column to get the inside scoop on everything Apple
that does it for this edition of Bloomberg Tech. Don't
forget to check out our podcast. You can find that
on the terminal as well as on Apple Podcasts, Spotify,
iHeart and check out my podcast too.
Speaker 3 (43:28):
It's called Hot.
Speaker 2 (43:29):
Pursuits with Hannah Elliott. If you care about cars, search
for it. I'm Matt Miller. This is Bloomberg
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Vla Low in San Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech. I'm Matt Miller here in New
York City.
Speaker 3 (00:26):
Coming up.
Speaker 2 (00:26):
Open Ai employees plan to sell about six billion dollars
worth of shares to an investor group. That value is
the company at five hundred billion, almost double what it
was valued at last time at race Capital Plus. The
Trump administration considers using funds from the US Chips Act
to take a stake in Intel, so using Biden money
(00:48):
to do Trump's work.
Speaker 3 (00:49):
And we'll take a look at the.
Speaker 2 (00:51):
Ev race between the US and China as we await
results from Chinese carmaker show.
Speaker 3 (00:57):
Me and Expang this week.
Speaker 2 (01:00):
First off, let's take a look what's going on in
the stock market. The Nasdaq right now off just about
one tenth of one percent, So although it's coming down
a little bit today, it's coming down from all time
highs twenty three six hundred ninety five, still quite an
elevated level for the NDX. Current and former open Ai
(01:20):
employees are planning to sell nearly six billion dollars worth
of shares, as I said to an investor group, and
that is one of the top stories.
Speaker 3 (01:31):
That we're following.
Speaker 2 (01:32):
But before I get there, take a look at what's
going on with Intel shares right now down about two
and a third percent, i should say, Intel falling after
that news on Friday, and Meta down on a story
out of the information that the company's going to revamp
its AI unit for the fourth time in six months,
splitting it into four also down two and a third percent. Now,
(01:56):
let's get to that open Ai story. As I said,
current and former employees planning to sell six billion dollars
with a shares to an investor group. That's a big number,
but the bigger one is five hundred billion. The maker
of chat GPT is now, according to sources, valued at
almost twice as much as it was last time it
raised capital for more. Let's bring in Bloomberg's Kate Clark
(02:18):
here on set seven thirty one.
Speaker 3 (02:20):
Lex Kate.
Speaker 2 (02:20):
It's a massive amount, considering a month ago it was
worth two hundred and sixty billion. Has it really grown
in value that much in four weeks?
Speaker 4 (02:28):
Not necessarily, but it's really you have to look at
this as a talent worse story, and open ai employees
are getting offers from big tech companies for tens of millions,
even hundreds of billions of dollars to leave open Ai.
Secondary transactions like this help open ai retain their talent.
Speaker 3 (02:46):
In terms of.
Speaker 2 (02:49):
Why we're seeing these big secondary offerings and at the
same time as we're seeing, you know, Mark Zuckerberg paying
people one hundred million dollar bonuses, is every valuation just
lifting out on the West Coast if you're involved in
AI programming.
Speaker 4 (03:04):
Absolutely, yes, is the short answer. And partly that's because
investors are incredibly excited about these companies. They think open Ai,
Athropic and others will be trillion dollar companies like Meta,
like Google, and employees, like I said, are getting these offers.
So there's no choice but to lift these valuations continually.
Speaker 2 (03:22):
So what's the next stop? I mean, why, say five
hundred billion. Why isn't open ai worth a trillion already?
Speaker 4 (03:30):
I mean, it's a good question, and these valuations are
pretty arbitrary at times. I mean, jumping from three hundred
billion to five hundred billion is pretty crazy and I've
never seen anything like this, but I think you can
expect Openingy's valuation in the private markets will continue to rise,
and I who knows how.
Speaker 3 (03:44):
Far it will go.
Speaker 2 (03:46):
So there's another story from Bloomberg about Meta's offering in
AI in terms of a standalone app. Right, does chat
gbt absolutely dominate or are people using Meta? Are people
using Plexity, are people using Gemini?
Speaker 4 (04:02):
People are absolutely using all of them. People are experimenting,
and there are a lot of questions about the durability
of the revenues of a lot of these products because
there is experimentation. But Chat tbt is the one of
the largest apps of all time. I mean, the use
is undeniable. People absolutely love it. It's part of everyone's
every day now, or most people's every day at least.
So I do think that there's real argument for the
future of this company. But I think everyone's correct too
(04:25):
to be very skeptical of how far these valuations are climbing.
Speaker 2 (04:27):
All right, Kate, great having you on this story and
look forward to more reporting. K Clark there from Bloomberg News.
Now let's get to a story about building AI in
the US. Han Hai, also known as Foxcon, is said
to take charge of a US factory owned by soft Bank,
setting up what could be the first manufacturing site in
the company's five hundred billion dollars stargate venture with Open
(04:51):
Ai and Oracle Soft. Bank will acquire Han Hi's electric
vehicle plants in Ohio, but the Taiwanese manufacturer will continue
operating the com complex, transforming it into a hub for
producing AI servers.
Speaker 3 (05:05):
For more on the.
Speaker 2 (05:06):
Broader tech market, including the impacts of tariffs, Iako Yoshioka
joins US Wealth Enhancement Group portfolio consulting director and IPO.
Great to have you on the program. How much of
this five hundred billion dollar stargate story is real? I mean,
is it actually going to happen in that size?
Speaker 3 (05:24):
You know?
Speaker 5 (05:25):
Hi, Matt, I hope you're doing well. You know, we
do think that the you know, stargate thing is really real,
at least so far, we're seeing it across a lot
of the tech companies.
Speaker 3 (05:36):
There are so many that.
Speaker 5 (05:37):
Are involved, but it's such a large number and we
still have to see it come through.
Speaker 3 (05:42):
So is this going to be.
Speaker 2 (05:47):
A situation where we have foreign owned companies coming in
here and just operating manufacturing plants in the US, Because
it seems like that runs to some extent counter to
what Donald Trump.
Speaker 3 (05:58):
Was hoping for.
Speaker 5 (06:00):
I think any investment here in the US is being
looked at very positively.
Speaker 3 (06:05):
You know.
Speaker 5 (06:05):
Overall, just digital infrastructure really is something that the US government,
you know, needs to make sure that we are at
the forefront. Similar to having a strategic petroleum reserve, we
really need to make sure we have that digital infrastructure
that is strategic. Just given you the proliference of AI,
(06:26):
just how it's going to be used going forward, and
there's so many unknowns still related to AI.
Speaker 3 (06:33):
So are we going to see a jump in employment?
Speaker 2 (06:35):
I mean, is the FED going to have to pay
attention to this or are we looking at you know,
just giant sort of server farms and electric plants that
are going to be needed.
Speaker 5 (06:45):
Sure, I think we're still in the early phases of
discovering what the productivity improvements are going to be.
Speaker 3 (06:52):
I think it's really.
Speaker 5 (06:54):
Clear so far that there are some But I think
there's also some challenges in regards to what is this
going to mean for like the entry level workforce. You know,
those kids who are just graduating college and when knowledge
is being democratized because of AI, you know, how do
you get them trained? How do you give them the
experience that they need in order to validate what AI
(07:17):
is telling you.
Speaker 3 (07:18):
It does look like Ioko, this is uh. You know,
the tariff.
Speaker 2 (07:21):
Strategy is forcing TSMC and fox Con and other foreign
owned companies to come here and produce. What about American
companies like in Nvidia and AMD that are going to
have to pay fifteen percent of the revenue on the
Chinese business they do? What about these export taxes? How's
(07:42):
that going to affect businesses here?
Speaker 3 (07:45):
Sure?
Speaker 5 (07:45):
I mean, I think it's sort of just the pay
to play issue that we're seeing here. But on the
flip side, I mean, Nvidia noted that China is a
fifteen billion dollar fifty billion dollar total are market, and
I don't think we want to exclude that, and we
want to make sure that it's American technology that is
(08:06):
going to be the base of overall AI.
Speaker 2 (08:10):
I noticed in your notes you're very focused on the
economic data coming in the FED meeting at Jackson Hole,
which obviously is key. Rates are incredibly important to your business.
What do you expect from Jerome Power. Are we going
to see a policy shift?
Speaker 5 (08:26):
I'm not sure if we're going to see a policy
shift so much. Perhaps they'll talk about, uh, the average
inflation targeting that they sort of introduced a few years ago.
But you know, for the most part, we are looking
to see if they are going to signal any sort
of openness to that rate cut in September that the
(08:46):
market's already pricing in just given some of the numbers
that we've seen so far this year regarding both inflation
and unemployment. But that PPI number last week really threw
a little bit of a wrench into the story.
Speaker 2 (09:00):
Yeah, three point seven percent on the core does four
and a half percent? Does the Does the FED target
rate right now feel restrictive to you a little bit?
Speaker 5 (09:11):
I believe that, you know, in normal times, I think
we're looking at a FED funds rate closer to three
to three and a half percent, and so you know,
having current rates above four is still a little restrictive,
and you're seeing it with those cyclical companies. I mean, thankfully,
most corporations have pretty solid balance sheets, just given the
(09:34):
opportunity refinance back during the COVID years. But we're, you know,
five years posts that, and so having a little bit
lower interest rate in order to refinance further is going
to be helpful for many of those cyclical companies.
Speaker 2 (09:47):
It does seem like cyclical companies, industrials, real estate investment
trusts are now far more important to the tech picture
than they once were.
Speaker 5 (09:56):
Absolutely, you know, the digital infrastructure really is something that
investors have been looking at beyond just the actual chips
and you know, servers that are powering AI. You know,
we're definitely looking at real estate, definitely looking at you know,
industrials that provide power, cooling, infrastructure and all of that
(10:19):
to the data centers, and so, you know, there's definitely
a broadening out. It's just that it's all still related
to one major theme, which is AI.
Speaker 2 (10:28):
All Right, Iako, great to get some time that you
really appreciate it. Iako Yoshioka of Wealth Enhancement Group talking
tech as well as, you know, the old economy, because
the two are coming together with digital infrastructure coming up.
Shares of Day four surge after reports Toma Bravo will
take the HR software firm private. More on that story next.
(10:49):
This is Bloomberg Tech chairs in Day force surging today.
(11:10):
That's because Toma Bravo is in talks to buy the
HR software maker, according to sources, with plans to take
it private and a deal that could be announced as
soon as the coming weeks. For more on this story,
let's bring in Bloomberg's Lenna Baker. She runs our deals
team here in New York, and Leanna, it's interesting because
(11:30):
a lot of these software companies, I feel like they
need to sell quickly before they're made obsolete by AI.
Speaker 6 (11:36):
So that's one opinion. But this company, day Force, has
been around a long time. It used to be called Sarridian,
it used to be private actually, you know, before twenty eighteen.
And they make software that helps with HR payroll and
they have their tentacles deep into enterprises, so maybe they
won't be disintermediated right away. There's been a little bit
(11:57):
of a surge and deals related to HR and payroll.
There was a deal for pay Corps earlier this year.
Paychecks bought that and ADP also did a deal to
buy Workforce last year. So these are just some of
the acquisitions that have been happening in the space. We're
seeing consolidation and not necessarily AI taken over.
Speaker 2 (12:16):
There's a couple take privates the Soho House story I'm
talking about also today.
Speaker 3 (12:20):
But is this part of a trend.
Speaker 6 (12:23):
These private equity firms have just raised so much dripout
over the years, Toma Bravo has you know, tens of
billions to deploy. They've been one of the more active
acquirers we've reported there and talks to buy another company
in the tech space called Varrant, and earlier this year
they did a big carvette out a Boeing, So they
definitely want to watch. Orlando Bravos appeared on Bloombero TV
(12:44):
many times to talk about their strategy of rolling up
software companies.
Speaker 2 (12:48):
So and they're one of the more equivalitive acquisitive firms
out there. How is private equity doing in general in
terms of making purchases because I thought they couldn't find exits.
Speaker 7 (12:57):
Now that's a great point.
Speaker 6 (12:58):
We are seeing the IPO markets starting to come back,
and we'll be watching to see whether there's these candidates
that are backed by private equity that could finally exit
through the public markets. But so far, a lot of
them like trading assets to each other. I mentioned that
day Force used to be backed by private equity, so
Thhlee as far back as to two oh seven they
(13:21):
were backed by another firm, So this would sort of
be a return to private equity.
Speaker 4 (13:26):
For day Force.
Speaker 2 (13:27):
So what's next in these deals? What are you and
your team watching out for us?
Speaker 6 (13:31):
So you mentioned that we reported that this could still
be a few weeks away, so they're still news to break.
What is Tomo Bravo pay for this company? The company
is eleven billion dollar enterprise value, but what's the exact
price they're paying? Does this go to up to fifteen
billion for example? So there's plenty of details to break
that investors will be watching.
Speaker 3 (13:47):
All right, Leanna, thanks very much.
Speaker 2 (13:48):
Lena Baker runs the deals team for us here at Bloomberg.
Speaker 3 (13:51):
Now.
Speaker 2 (13:52):
Swedish AI startup Lovable called itself the fastest growing startup
in July and now it's eyeing nearly a billion dollars
an annualized sales next year. That's according to the CEO
anton Oska. Speaking with Bloomberg text Tom mackenzie, he says
Lovable's approach to developing allows anyone to be a coder.
Speaker 8 (14:12):
I think everyone in the gage of AI really have
to relearn which tool to use well. And if you
are technically you know how the coding works, you're actually
more productive with Lovable, so that we're seeing a lot
of technical people loving the tool and then being able
to talk more productively to the AI. Anyone can learn
(14:35):
to be productive talking TODAI, but there's an advantage for
technical people. I think what we're going to see is
that everyone is a developer right now. There's been much
less one percent of the world population. Everyone is becoming
a developer now and ninety nine percent of the best
ideas are from people who don't know how to code.
So this is for me a very clear example of
(14:58):
AI having a positive impact. More people can start successful
businesses without being bottleneck by not having time or the
skill set required to build software.
Speaker 9 (15:08):
When you think about when you think about listing even
it is a further way prospect ants on. Is Europe
the place that you would consider or does it have
to be the gravitational pool of the US.
Speaker 8 (15:18):
So I'm really betting on Europe, and one of the
reasons we're here is to prove that you can build
a world class team and execute cute better and faster
than from the US. I would love to list e
ear off, but I haven't looked at any of the details.
Speaker 9 (15:33):
Okay, And in terms of when we look at for example,
Google absorbing Windsurf and earlier on of course, in this
innovation story, Microsoft absorbing a reflection, is that potentially what
happens to you and love. Would you be open to
that kind of acquisition where the talent is absorbed into
one of the megacap us tech companies or is that
(15:55):
something you would you would fight against.
Speaker 8 (15:57):
That's something I wouldn't fight against. I think most of
the value that we're going to accumulate us are, like
the bottomneck right now is on the technology. In the future,
most of the values in the relationship we have with
our customers, the trust and the community around it, and
that value can only be realized as a standalone and entity.
(16:19):
So that's what I'm expecting to us to continue to be.
Speaker 2 (16:24):
That was lovable CEO anton Oska. Coming up, Comcast gets
serious about its customer losses, but it's a long road ahead.
Details Next this is Bloomberg Tech. Comcast has a problem.
(16:48):
The company is losing customers in its most significant business,
the one that provides internet access to nearly thirty million
American households. Comcast has been reporting record losses in broadband
subscribers for three quarters in a row. Now. Bloomberg Telecoms
reporter Kelsey Griffiths joins US now with more So Kelsey,
what's the problem. Why is Comcast losing all these subscribers?
(17:11):
Where are they going?
Speaker 10 (17:13):
That's right, So Comcast is kind of caught in this
confluence of several factors. We're seeing competition from the mobile
companies as they are offering their own version of home
internet service that's boosted by or powered by their five
G infrastructure. We're also seeing the end of the Affordable
Connectivity program, which offered subsidies that Comcast greatly benefited from.
(17:35):
It kind of helped boost their subscriber numbers. Now those
subsidies don't exist anymore, and those customers have dropped off.
And we're also seeing that Comcast has struggled to kind
of maintain some of these customer relationships and that has
been a pain point that has led to some of
these cord cutters.
Speaker 3 (17:50):
So what are they doing about it? How can they
turn this around?
Speaker 10 (17:55):
Yeah, So Comcast has a multi prong structure. They've started
a five year price guarantee to sort of help lock
in some of these customers and give them certainty in
what they'll be paying from year to year. What Comcast
had been seen is that customers were responding well to
the cable subscription model of what some folks like to
(18:15):
call the exploding prices. So you sign up for an
introductory rate, it's really great for a year, and then
you're hit with this big increase. And so that's something
that Comcast is trying to move away from and they
are hoping that that will be successful.
Speaker 2 (18:29):
So when are we going to see results in It
sounds like obviously a longer term strategy. But when you've
had subscribers falling for three quarters in a row, I
guess you want investors want you to turn their around
this quarter.
Speaker 7 (18:44):
That's right.
Speaker 10 (18:44):
The market is typically focused on subscriber numbers from quarter
to quarter, and so the fact that we've seen them
falling for the last three quarters doesn't look great. Comcast
says that folks are responding really well, even though it's
still early days. People seem to really like the remobile
lines that Comcast is throwing in to kind of help
anchor that bundle a bit more in a more modern service.
(19:07):
We also see that people are potentially responding to this
price guarantee by upgrading their internet service. They say, look,
we know that we're not going to be paying huge
price increases over the next five years, maybe we go
up into speedchire or something like that. So Comcast says
that it's still early days, but they are feeling encouraged.
Speaker 2 (19:28):
All right, Kelsey, thanks very much, Bloomberg's Kelthy Griffiths colors
the telecoms for US. And now let's talk about one
of the companies that may be eating comcasts lunch. YouTube
is said to be looking at making a play.
Speaker 3 (19:41):
To host the Oscars.
Speaker 2 (19:42):
According to sources, the Google owned video site is inquired
about buying the rights to the Academy Awards.
Speaker 3 (19:48):
For more.
Speaker 2 (19:48):
Bloomberg Managing editor of Media and Entertainment Lucas Shaw.
Speaker 3 (19:51):
Joins us now and Lucas. Obviously, YouTube isn't.
Speaker 2 (19:54):
Offering you an Internet connection, but rather than paying for
a cable package, a lot of people are likely to
watch TV on YouTube instead.
Speaker 11 (20:03):
Yeah, I mean, look, YouTube is the single most popular
video platform by any metric, right you look, just yourship
on television in the US. It's much bigger than Netflix
and Amazon and all the different Disney channels. In fact,
people spend more time watching YouTube on a TV than
all of Disney's television networks and streaming services combined, that
(20:23):
would be the big reason why an award show like
the Oscars would at least consider what would be an
incredibly controversial move within the Hollywood industry.
Speaker 3 (20:31):
So how likely is YouTube to get the Oscars?
Speaker 2 (20:35):
Because I imagine a lot of Oscars viewers do still
have cable television packages or even watch just the networks
with rabbit ears, if you get my drift.
Speaker 11 (20:47):
The average aid to the Oscars is probably a little
bit older now. Some of that is because it's still
something you watch on television, and some of it certainly
because it's an award show that I think means more
to certain generations than the youngest generation that.
Speaker 3 (21:00):
Was raised on YouTube.
Speaker 11 (21:01):
As for the odds of YouTube getting it.
Speaker 3 (21:03):
It's hard to say at this point. So Disney, which.
Speaker 11 (21:06):
Has had the rights, or ABC has had the rights
for about five decades, they had an exclusive negotiating window
that they let laughs. They had spent a bunch of
money getting the Grammy Awards, which some people think means
it's likely or at least possible that they will let
the Oscars go, which would have been unthinkable previously. And
so you now have about a half dozen different companies
looking at it, Disney, Paramount, Netflix, Amazon, YouTube, and even
(21:31):
Comcast NBCUniversal, which you were just talking about.
Speaker 3 (21:34):
I would say YouTube. I have a hard time seeing
YouTube being the most likely winner.
Speaker 11 (21:39):
I just don't see why the Film Academy would go
with a company that doesn't really have anything to do
with the traditional movie business. But if the thinking about
it just as an award show, that's one great way
to maximize the audience well.
Speaker 3 (21:51):
And maybe a sign of things to come as well.
Speaker 2 (21:53):
Great reporting, Lucas, really love reading your take on the
media industry. Bloomberg's Lucas Shaw is our managing for that industry.
Coming up, Kim Forrest of Boca Capital Partners joins us
to talk about semiconductor stocks and what's moving the markets today.
This is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm
(22:35):
Matt Miller filling in for Ed and Caroline. Let's take
a look at what's going on in these markets. Here's
an intra day picture, so it doesn't tell you a
heck of a lot, except for the fact that we're
down by about a quarter of a percent from what
was an all time high. Obviously, we're at pretty lofty
levels here, both in terms of the price and in
terms of valuations.
Speaker 3 (22:56):
Let's take a look at what's going on in specifically.
Speaker 2 (22:59):
Chip right now, because the Philadelphia Semiconductor Index, the SOX
index is up even as Intel falls, because Intel is
not as important as it once was. Right, It's only
a one hundred billion dollar company, and today it's worth
one percent less because of some of the news that
we heard over the weekend and some of the moves
that we.
Speaker 3 (23:18):
Saw on Friday.
Speaker 2 (23:19):
Let's stick with Intel and semiconductors right now and bring
in Kim Forrest, the CIO of Boca Capital Partners, and Kim.
This I think was one of the most exciting stories
of last week, the fact that, at least according to
people familiar that we spoke with, the White House is
looking at taking an actual stake in Intel and could
use money from Biden's Chips Act to do it.
Speaker 3 (23:42):
How do you see that, Well, I see it.
Speaker 12 (23:45):
It's a distinct possibility, and especially because well if you
look at where the chips are produced. The most important
chips in the world, which I can say is probably
twofold of course AI chips, but also defense types of chips,
and not just for the US, but drones and all
(24:06):
manner of smart you know, killing machines that they use
in the in defense are made on an island sixty
miles away from Taiwan earth from China called Taiwan, and oh,
by the way, there's earthquakes there too, So doesn't seem
like it would be the natural place to have all your.
Speaker 3 (24:26):
Eggs in one basket, does it?
Speaker 12 (24:28):
Maybe Intel can change that, Kim.
Speaker 2 (24:30):
I think it's a great angle, right, the national defense angle.
In case we're in a war and someone cuts off
those supplies, we're in trouble.
Speaker 3 (24:40):
Is Intel the.
Speaker 2 (24:41):
Right company in which to take a steak? Is Intel
the right vehicle with which to make chips?
Speaker 12 (24:50):
Well, I mean, I think it's close enough for government work.
I love that phrase because what does that mean? Well,
it's not exactly one hundred percent on Semi would be
that name because while they're on Taiwan, but also they
make the world's most exotic chips, and they do it
at yields that are impressive, and Intel has struggled to
(25:11):
catch up. That being said, it's not out of the
realm of possibility for Intel to catch up. And oh,
by the way, seventy five percent of their chip making
capability is right here in the US.
Speaker 2 (25:25):
So how much do you think the US should take
and what are the best plans for Intel? I mean,
they did want to build a thirty billion dollar fab
in Lincoln County, Ohio. Is that something that they need
to revive plans to do?
Speaker 12 (25:43):
I would say maybe, like, look at what they've got, right.
I like that approach of incremental as opposed to let's
build new. But that being said, I don't really know
what the right amount is. I'm pretty much a straight
up capitalist. I think companies fighting each other for competitive
(26:04):
advantages and trying to serve customers is the best way
to go. But I understand that the government would have
to own something to be able to give it, you know,
essentially gobs of money and maybe some outside support from
things that it owns, like maybe the jet propulsion laboratory
or other smart government kind of think tanks.
Speaker 3 (26:26):
So I understand.
Speaker 12 (26:28):
I don't know. I would not like to see it
own a lot, and I certainly wouldn't like to see
it the government dictating Intel's business at a broader scale.
Speaker 2 (26:41):
Kim, what's your take on the export tax that this
administration wants to slap on Nvidia and AMD because if
you look at these things through the national security lens,
and that makes sense that deal would seem like we're
willing to sell some national security at a certain level.
Speaker 3 (27:01):
Well, we always are.
Speaker 12 (27:02):
We're capitalists here, and you know we have None of
this is new. If I've been in the world of
software and you had to go through some pretty strict
rules to be able to sell your software outside of
the US, and you could get a thumbs down for
many reasons, not all that we're explained to you necessarily.
Speaker 3 (27:24):
So none of this is new.
Speaker 12 (27:26):
So I'm not really sure that this is really selling
the top jewels to you know, China through a MD
and and videos kind of be not a products but
B or C products.
Speaker 3 (27:41):
So that's that's one thing.
Speaker 12 (27:43):
The other thing is quite honestly, you know, if there's
a will, there, there's a way. I'm sure that a
lot of the top rated chips, the Blackwell chips are
finding their way into China and and not direct routes,
we'll just call it. So let's try to control what
we can control. And I think that's a good way
to go for not just chips but software as well.
Speaker 2 (28:04):
As an investor, do you have to watch out for
the next company that has to promise a share of
its revenue to the I guess to the White House,
but really to the American taxpayer, right in order to
do business overseas.
Speaker 12 (28:20):
Sure well, it does seem like that is the trend here.
But the good news is that these chips aren't They
are in demand, and the price is what the price is,
So fifteen percent higher doesn't seem like it's a huge
barrier to anyone that really wants these chips. You know,
the Blackwell chips are a lot more expensive than the
(28:40):
chips that we are offering up and they'd rather have those, right,
But I don't think it's a huge barrier because the
companies are probably going to pass that price along.
Speaker 2 (28:51):
In order to avoid much higher prices for chips here
in the US. Big companies like Apple can make, as
President Trump told us, investments in the US and get
a carve out. What does that mean for smaller companies
that are historically also very important to the development of
technology in America?
Speaker 12 (29:10):
Sure well, I think they have to pay attention to that.
Right Right now, we're talking about hardware, but software is
a whole different category. Oddly enough, Synopsis was forced to
guarantee that China can access all of its chip software
development tools in perpetuity to allow this ancest deal that
(29:34):
went on. I hope you guys know what I'm talking about.
Answers is a small Pittsburgh company, but those small companies
can be mighty. And you know, I think that everybody
that is entering this area as a new company or
you know, the ones that are here, are going to
have to pay attention to now being the focus of
(29:56):
the government. And it is what it is, and it's
just another barrier. It's pretty much the same as any
regulation that comes your way.
Speaker 2 (30:05):
Kim, great talking with you. I love your intel on this.
Really helpful, I think to viewers. Kim Forrest, there is
the CIO of Boke Capital Partners coming up, former President
Joe Biden. You see here test driving Ford's electric F
one fifty the Lightning Way back in twenty twenty one.
(30:25):
But sales of EV pickup trucks still haven't picked up.
Speaker 3 (30:28):
Much with US consumers.
Speaker 2 (30:30):
We'll talk about why and where American carmakers stand in
the EV competition with China.
Speaker 3 (30:36):
This is Bloomberg tech.
Speaker 2 (30:50):
American car buyers typically love pickup trucks, but not Apparently
the electric versions Tesla, Ford, General Motors, and Rivian all
struggled to gain traction in this part of the market.
Bloomberg's Detroit bureau chief David Welch has been reporting on
this story, and David, I have to say, I'm following
these companies closely, and when you know the unit sales
(31:13):
numbers come out every month, I'm shocked to see how
small they are for evs in general, but also the
fact that all these companies have tried to get in
with pickup trucks first.
Speaker 3 (31:24):
Why is that.
Speaker 13 (31:25):
I think when you had announcements from riv and Tesla
early on that they were going to go with trucks,
I think what everybody figured is the US pickup market
is so big that even if a small portion of
it went electric, you would still get a pretty big
chunk of buyers. And you had all of these reservations
people paying one hundred dollars to Tesla or Ford for
(31:46):
the lightning. You know, Tesla said a million people, Ford
said one hundred and fifty two hundred thousand people at reservations,
and they tooled up production for that, and GM piled
in and everybody said, geez, you know that this is
really going to hit. But those reservations didn't really turn
in to sales for a variety of reasons. One is,
pickup trucks lose a lot of their range when you're
(32:07):
towing or hauling something, and not everybody uses. In fact,
the majority of pickup owners probably never haul or tow anything,
but they like the fact that they can. And those
who do, particularly commercial users, say they just don't get
enough range. They don't get enough driving range when they're
actually doing the work their truck needs. And there are
political reasons too, Matt. Republicans tend to buy pickup trucks,
or I should say pick up buyers tend to be
(32:29):
more Republican than not, and ebe buyers tend to be
more Democrats than not, and a little bit of a
disconnect there. So people just haven't bought them in big numbers,
and everybody is struggling to sell them.
Speaker 2 (32:40):
Nonetheless, the industry keeps pushing towards this. In fact, I
was talking to Jim Farley yesterday.
Speaker 3 (32:48):
He was out at Pebble Beach.
Speaker 2 (32:50):
And he's touting this new affordable It's a mid size pickup,
so not a full size American machine, but a mid
size pickup that they'll build in Kentuck for thirty thousand dollars.
Why do they continue to push towards this goal.
Speaker 13 (33:04):
Well, the price is one of the big problems with
pickup trucks. I mean, you look at GM's trucks, for example,
they can go five hundred miles on a charge the
Silverado and the gmcc era evs. That's quite a way,
and they do lose a lot of their range when
you're towing a decent amount of weight, but that's still
three hundred miles you can go if you're hauling something
(33:24):
that's pretty good. But the trucks are very expensive. So
if you're a fleet buyer or if you're just an
individual consumer, you're looking to pay another ten twenty thousand
dollars for the electric version, and you don't really get
anything more for that other than evs are pretty fun
to drive. But you know, a lot of truck owners
also like the hum of their VA too as opposed
to the silence of an electric motor, so they're just
(33:45):
not getting enough for that. You get the price down
to thirty thousand even for a mid sized pickup truck.
That's kind of where you're looking at Ford Ranger and
Chevy Colorado mid size pickup trucks. You know, that's where
they're selling, you know, roughly speak, then you'll get some
more sales. GM's doing something similar. They're going for a
lower range pickup truck four hundred miles instead of five hundred,
(34:08):
but should sell for thousands of dollars West. So everyone's
trying to get the cost down because that is one
of the big barriers with these vehicles.
Speaker 2 (34:14):
Right Slate for example, going for a much lower range
but also a far lower price is an interesting startup
as well, David. As always, I look forward to your reporting.
Bloomberg'sdavid Welch, Detroit bureau chief covering since he's in Detroit
for the most part, cars.
Speaker 3 (34:30):
Let's stay on that to some extent.
Speaker 2 (34:31):
Shipments of China's rare earth products reached their highest since
January last month. The increased supply comes as Beijing agreed
to resume sales to the US as part of a
trade truce. Earlier this year, China curve flows of seven
rare earth products made there in retaliation to US tariffs.
That's a move that raised concerns about a global shortage,
(34:53):
and it hurts particularly the car industry, the electric vehicle makers,
because rare earths are so important for really.
Speaker 3 (35:02):
Ice and evs.
Speaker 2 (35:04):
Let's stick with the global competition in that space and
bring in Ellen Hughes Cromwich. She's a visiting fellow at
Third Way's Climate and Energy Program, former chief global economist
at the Ford Motor Company. And Ellen, this is so critical.
We were just talking about the importance of ship you know,
semiconductor manufacturing, and at least there there's a solution, right,
(35:27):
you can actually make them in the US.
Speaker 3 (35:30):
But what about rare earth?
Speaker 2 (35:31):
Is it possible to have a scalable business that manufactures
rare earth magnets in the US or is it just
too dirty?
Speaker 14 (35:43):
Oh hi, Matt, great to be with you. No, we
have plenty of rare earth. The question is when not
if it takes a long time to get to a
point where you're harvesting and you're refining. We learned that
with some simple critical minerals like liftium in some others
for the auto industry. So I'm firmly in the camp
(36:06):
of hey, if you if you want to do it, you.
Speaker 7 (36:08):
Can lift it and refine it, but it will take
some time to.
Speaker 14 (36:13):
Get that infrastructure in place, and really that's been one
of the bottlenecks for evs in general, which is, you know,
you've got a very complicated industry. It's making a transition.
It takes a substantial amount of time to do that.
Speaker 2 (36:29):
So this is another area where the Trump administration is
buying into private industry to help push it along. NP
Materials is one company in which they've taken a stake
to do that. Do you believe we need a real
government push in order to be refining rare eers here?
Speaker 14 (36:50):
Well, you know, if you think about public finance theory,
and I you know, just want to put this on
the table. If you think you have a market failure
or you got a negative externality, it's very simple. There's
a role for government intervention. But we got to stick
to those principles. And if you know, in the case
of these things where you know, we have a public good,
(37:15):
which is our climate, it's a public good.
Speaker 7 (37:19):
We consume it, everybody does every day.
Speaker 14 (37:22):
And if you think that that public good has to
be protected, then there is a role for government policy.
Speaker 7 (37:30):
And I, you know, I just.
Speaker 14 (37:31):
Stick to that framework and those principles, and I think
those are important tests for understanding where we need public
policy and where we don't need public policy.
Speaker 2 (37:41):
So we've seen ellen Ford has to pause production at
some of its factories over the past few months because
they can't get a hold of enough rare it's enough
magnets to make the vehicles that they need to. I'm
sure other US manufacturers have had, if not pauses, similar
problems and frustrations. How long until you think we can
(38:03):
get the US refining infrastructure up to speed so that
we no longer have issues like that?
Speaker 3 (38:10):
Are we talking just a matter of years or decades?
Speaker 7 (38:15):
Matt?
Speaker 14 (38:15):
I really think it's going to be in a five
to ten year timeframe.
Speaker 7 (38:20):
I mean, it really takes that long.
Speaker 14 (38:22):
We had a great acceleration in the transition to evs
that started after twenty ten. You know, it grew exponentially
toward the back half of that decade, and we're now
at about a ten percent market share. You know, this
has been a you know, month in, month out gradual increase,
(38:46):
even though July EV sales were surging obviously as customers
wanted to take advantage of the tax credits before they
end next month.
Speaker 7 (38:55):
End to next month.
Speaker 14 (38:56):
You know, it will continue to gravitate higher, but you
know without the IRA tax credits, this is.
Speaker 7 (39:06):
Going to slow it down.
Speaker 14 (39:08):
And you know it doesn't seem like from a competition standpoint,
and like you were just sorrying to like on sort
get sourcing domestic for a lot of reasons, not just
the climate but national security. You know, we got to
move in that direction. So let's make sure we got
the incentive structure.
Speaker 2 (39:29):
Right, Ellen, Great to talk to you, hope to get
you back to talk more about this. Ellen Hughes Cromwick,
Senior Visiting Fellow for the Climate and Energy Program at
Third Way formally at Ford. Coming up, what's in store
for Apple's Vision Pro after adoption has been slow to
pick up. I'm sure that you don't have one that's next.
This is Bloomberg Tech. Apple has slow walked the release
(40:04):
of immersive video, creating a conundrum for the Vision Pro,
which remains an extremely niche products. Here to discuss the
future of the Vision Pro and the latest power on newsletters,
Bloomberg's Managing editor in Consumer Tech, Mark German Mark. It's
interesting because they have this hardware now it is expensive
(40:25):
and heavy, right, but they don't have a ton of
software for it.
Speaker 3 (40:29):
Is that the case yeah, that's right.
Speaker 15 (40:31):
And you know, taking a step back, we've never seen
Apple launch a major new product category that they've spent
nearly a decade and nearly ten billion dollars developing.
Speaker 3 (40:42):
Sort of floup like this, Right.
Speaker 15 (40:43):
The Apple Watch was a little slow out the gate,
but pretty quickly, within a year or several months, it
started to go mainstream. The iPod quickly went mainstream. The
iPhone ticked up pretty quickly. The iPad was a blockbuster
out the gate. So this is going slower than I
think even Apple anticipated to some degree. The best feature
(41:05):
on the headset, to your point, is the immersive video content,
some of the stuff we're showing on the display right now,
but it's very limited. They have a few series, they
only have a few episodes for each of those. They've
only released twenty seven pieces of immersive content in the
last year and a half.
Speaker 3 (41:20):
And it's a conundrum.
Speaker 15 (41:21):
It's very expensive to make, but why invest all that
money in it if the headset's not selling well. On
the other hand, that's why people would buy the headset
because of that immersive content. So they're a little stuck here.
Speaker 2 (41:32):
Well, I mean, there's only so many hours of entertainment
I can get out of like a dinosaur or bono, Right,
So why don't they either make more content for this
thing or put it on hold until they're really ready
to sell a product we need or can use.
Speaker 15 (41:50):
Well, here's the thing. Let's say the vision Pro line
doesn't take off for another two years in twenty twenty seven,
they're going to release a much lighter, completely re vamped,
cheaper version. So if they put out a bunch of
content now and pile up all the content now, by
the time people actually start using the platform right in
two three years from now, all that content is going
(42:12):
to be outdated. They're going to refresh the vision Pro
in the next several weeks here, right before the end
of this year, with a faster processor and a new
strap that's going to make it faster, more capable for applications,
probably improve immersive video content, improve three D video.
Speaker 3 (42:28):
It's going to make it feel a.
Speaker 15 (42:29):
Bit lighter when you're wearing it on the head, so
a bit of a marginal improvement, but the real changes
are still far out. But again, the endgame here is
augmented reality glasses. This is going to be table stakes
for all the tech companies within the next three to
five years. Google's working on this, Samsung's working on this,
and Apple has been working on this for several years.
Speaker 3 (42:51):
You know, the original.
Speaker 15 (42:52):
Concept for a headset for Apple was glasses, but they're
not going to release glasses until they can get some
visual quality on par with Division Pro at the thin
enlightness of a glasses form factor. That's still going to
take quite a bit more time.
Speaker 3 (43:06):
All right, Mark, thanks very much for joining us.
Speaker 2 (43:08):
Bloomberg's Mark German there you can check out his power
on column to get the inside scoop on everything Apple
that does it for this edition of Bloomberg Tech. Don't
forget to check out our podcast. You can find that
on the terminal as well as on Apple Podcasts, Spotify,
iHeart and check out my podcast too.
Speaker 3 (43:28):
It's called Hot.
Speaker 2 (43:29):
Pursuits with Hannah Elliott. If you care about cars, search
for it. I'm Matt Miller. This is Bloomberg
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