March 25, 2025 • 42 mins
Bloomberg’s Caroline Hyde looks at Tesla shares. The electric vehicle makers reported falling sales in Europe, but Tesla investors - like Ark Invest CEO Cathie Wood - remain bullish. Plus, even with recession sentiment high, Fidelity Investments’ Denise Chisholm says there are unique opportunities, especially in software. And, the fight against deepfake pornography is getting more challenging, explains Bloomberg’s Margi Murphy.
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Speaker 1 (00:00):
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hide and Ed Ludlow.
Speaker 2 (00:26):
Live from New York.
Speaker 3 (00:27):
I'm Caroline Hyde, and this is BlueBag Technology coming up
tes the sales slump forty percent in Europe, having fallen
in ten of the last twelve months. We get the analysis,
plus foreign officials and tech execs push Trump's administration to
rethink the US's global chip strategy and export limits.
Speaker 4 (00:44):
This is the debate.
Speaker 3 (00:45):
OURAI regulation heats up, and Ali Baba chairman Joe Side
criticizes US tech giants for their massive spending on AI
infrastructure and warns of a potential bubble in data center construction.
We shine a light what's happening in the markets, bring
you also breaking news as well as we understand that
Russia is currently in the US saying that Russia agrees
(01:07):
to ban on striking Ukraine energy assets. That was, of
course something that had been discussed in the previous end
of the show, but we are seeing of course the
United States coming out there and saying indeed that Russia
agrees to a ban on the striking of Ukrainian energy assets.
Will bring you more on that story in a moment
and the implications to the broader market. But right here,
right now, we go back to what's happening in the
(01:28):
tech space. I'm looking at US that currently off about
five tens percent after yesterday's significant rally. I want to
drill into some of the individual companies that have been
on the move as well, and interestingly, after the phenomenal
rally that we saw in Tesla yesterday, it's off by
only about two tents of percent. That's in the light
of that significant drop once again in European sales that
(01:49):
are down forty percent from the month of February after
performing a similar amount in the month of January, and
we're now down forty three percent over the last two months.
I'm shining like what happens to BYD as well. It's
not by more than four percent, maybe even five percent
after yesterday's rally, as it finally shows that it crescendoed
further than Tesla in terms of its revenue for fiscal
twenty twenty four. Let's drill into all of this, the
(02:10):
pushes in the pools and pleased to welcome Craig.
Speaker 4 (02:12):
Trudell with us and Craig.
Speaker 3 (02:13):
Look, the moon music has been sour for Tesla in
terms of sales when it comes to Asia, when it
comes to Europe, and this is more of the same,
but it's not dragging on the stock too much today.
Speaker 5 (02:25):
Yeah, I think it's really been something to watch the
last few days now that we've seen this real rally
in the shares. They were really getting beaten down and
we saw, you know, the Trump administration sort of mount
this push, you know, with the Commerce Secretary coming out,
Howard Lutnik and saying, you know, go out and buy
(02:46):
Tesla stock. It's never going to be this cheap again.
We you know, didn't see an immediate sort of perking
up of the shares as a result of that, but
they really sort of furiously, you know, rallied to begin
this week. And you know, even despite the fact that
these numbers from the European Auto Manufacturers Association are really ugly,
(03:09):
as you say, you know, this isn't just a last
couple of months. It's ten of the last twelve that
we've seen the red, as this chart shows.
Speaker 3 (03:16):
I think what's important is to shine a light on
how much it's the opposite of the trend in you're
more broadly though EV sales are actually are more than
thirty percent.
Speaker 4 (03:25):
It really is an outlier.
Speaker 5 (03:27):
Yeah, absolutely, And we should of course note that this
is not just a story about you know, Elon Musk
and potential brand damage. There is a transition of the model.
Why that's really important to keep in mind here where
you know, when you change over a vehicle from one
generation to the next, it means some disruption in your
output that is having an effect on Tesla the beginning
(03:51):
to begin the year. But you know, this is also
the case that you know, the industry was preparing for
twenty twenty five being a much tougher compliance year from
and emissions perspective. So Tesla also is just going to
have a lot more to deal with in terms of
competition because other carmakers feel the need to bring their
emissions down for those compliance reasons.
Speaker 3 (04:13):
If competition wasn't stiff enough coming from China's byd creature, Dell,
we thank you so much. Meanwhile, let's get an investigate
because Kathy would well maybe unsurprising me for many, is
remaining bullish on Tesla but still calling for the stock
to hit two than six hundred dollars in five years,
almost ten times its current price, but a Megs daviding
there sat down for an exclusive interview with the invest
CEO that was over at HSBC Global Investment Summit in
(04:35):
Hong Kong.
Speaker 6 (04:36):
Take listen, China is very important to Tesla, and I
actually think that Elon Musk and May Musk his mother
are are sort of ambassadors for the United States. Yes, yes, yes, yes,
and rightly so so. But to answer your question directly,
if China were to fail, that would be a short
(04:57):
term hit to the stock. Would it take us away
from twenty six hundred dollars? No, because the robotaxi story
is much more a function of the Western world where
ride hailing costs are so much higher than they are
in China.
Speaker 3 (05:15):
That's going to take in Bailey Lipshitz, who's been delving
into the resilient pollition coming from ARC invest. But really
this isn't so much about warries and blips of European sales.
This is about long time focus on AI and robotaxis No.
Speaker 7 (05:30):
Exactly, And as Craig Treudale pointed out earlier, she's been
predicting the dawn of robotaxies from Tesla since at least
twenty seventeen, so long term bullish. It is their biggest
holding in the rc ETF. But one thing I want
to call out when you look at this company when
it trades on it's multiple If you pull the pe
on Tesla relative to the rest of the mag seven
p is north of ninety.
Speaker 3 (05:49):
Are you saying that Tesla doesn't trade on fundamental They
don't trade on fundamentals.
Speaker 7 (05:53):
And also, keep in.
Speaker 3 (05:53):
Mind, show us, Bailey, you show us if you bought.
Speaker 7 (05:56):
ARC five years ago, you're up twenty seven percent. You're
lagging the S and P five hundred by one hundred
and twenty five percent, okay, and the Nazak by one
hundred and fifty percent. So been a losing bet in
the long term. But nonetheless, Kathy would sticking to those guns.
It kind of does sound like some of the retail
investors I talked to and the idea that the cyber
truck was only part of a thesis and now we're
looking to driverless taxis as well as the humanoid robot.
Speaker 4 (06:17):
And she doesn't even facts.
Speaker 7 (06:18):
You're in the human eye on robots, right, Yeah, No,
I mean again, if you do the math with a
current share count, that's an eight and a half trillion
dollar company with her forecasts, So they're going to be
doing a lot with driverless technology. Even if you add
up some of the bigger carmakers with the likes of
an Uber, you're still not even close to what that
would look like. She's obviously been bullish. She's pounded the
table for bitcoin to hit a million dollars at some
(06:40):
point in the not too distant future. So really talking
her book, but definitely something.
Speaker 4 (06:45):
To take a bit with a grain.
Speaker 3 (06:46):
Of salt we put into perspective of Kathy would the
bets that has won out and she was a long
term bull on Nvidio but actually removed her options and
ultimately exposure to the company just as it started to
rally hard. With Tesla, she has main committee, but they
have pulled some of their chips off the table.
Speaker 7 (07:02):
Right, Yeah, it's a lower percentage of the holding of
when you look at the flagship ETF that Ark Innovation ETF,
now about eleven twelve percent of the ETF is allocated
to that. That was closer to like one fifth when
you look in that looked towards the beginning of the
year the end of last year, so pulling back, but
as you mentioned, kind of as the stock was rallying. Yes,
it's down about a third year to date, but nonetheless,
(07:23):
taking that long term view is retail investors will say,
you've been right about Tesla for five six years at
this point, and you're sitting pretty strongly in the green.
But if you look at the rest of some of
the investments that ARC has been pitching and been leaning into,
they haven't all really worked out, and that's why there's
been such a lag between the flagship ETF and pretty
much every other tech index.
Speaker 3 (07:43):
Any Lipshaw's bringing us one investor take when it comes
to Tesla, Let's go broader in terms of the overall
market analysis of these EV numbers and the.
Speaker 4 (07:52):
Future for the company.
Speaker 3 (07:52):
Seth Goalstea and please say welcomes from morning Star Equity Strategist.
You're also the chair of the EV committee over there.
You currently have a hold rating Tesla. You've got a
price target of two fifty, so actually below where we
currently are after yesterday's rally. Why are we not sinking
more on these yet further dire sales news out of Europe?
Speaker 8 (08:13):
Well, I think there's a lot of enthusiasm with the
full self driving technology. Yesterday's news that full self driving
was approved in China bodes well for China sales is
a far bigger market for Tesla than Europe. And so
when you look at full self driving, we have the
robo taxi testing that's going to be launched in Austin,
the full self driving unsupervised launch in Austin, and we'll
(08:34):
come to California later this year. And then with the
positive news of being able to launch the supervised level
two version of full self driving in China, that bodes
well for Tesla delivery. So I think that's the momentum
that's that's carrying heavier today versus the European deliveries being down.
Speaker 3 (08:51):
Okay, it has that optimism enough to vindicate the about
one hundred times future earnings that we currently trade at
for Tesla. As we were just hearing from Bailey, well.
Speaker 8 (09:03):
Tesla's a very high growth stock, has been for years,
and with Tesla's still having strong growth prospects, whether that's
the energy storage system, whether that's robotaxis, full self driving,
subscription softwarees, there is still a lot of room for
the Tesla growth story to play out. So I think
the market is still valuing the Tesla does still have
a lot of growth left. Even if the Mile three
(09:25):
model y are approaching that limit of deliveries, they still
have the new more formal suv coming out later this
year that should then push deliveries back into growth.
Speaker 3 (09:35):
Seth get into the details here. Therefore, is it the
fact that they haven't really had an overhaul of their
current product that is limiting current sales and of course
the mismatches they try and iron out a new form
of production, or actually is it the politicking of La
must taking an effect here.
Speaker 8 (09:52):
It's still unclear what the drivers are behind the first
two months to client, especially in the European market, you
could have a lot of consumers waiting for their new
model Why, which just began deliveries in Europe in March,
so consumers could have been holding off until they could
secure a new model Why. You also have the more
affordable vehicle being launched, and so some consumers may be
waiting for a lower price point vehicle from Tesla. But
(10:14):
in the European market especially you finally have long range
ed competition at a comparable price for years, a Tesla
Model three year model. Why was the only long range
in this case, I'm defining it at at least four
under kilometers or more of range at the same price
that would be as the same as an IC after subsidies.
So for key markets like Germany or the UK, a
(10:35):
Tesla was the most affordable long range eed. Now you
have other competitors who are offering long range evs at
a similar or slightly cheaper price point, and so there's
true competition for the first time in the European market,
and that could be leading some consumers to choose a
different vehicle besides the Tesla.
Speaker 3 (10:52):
Latin America Europe can access BYD and I was interested
in Kathywood's take there that BWEY isn't a compation competive
so when it comes to av but we've heard that
they are focusing on autonomous vehicle technology, So could it
start to ramp up and take on the robotaxi future
of Tesla too?
Speaker 8 (11:12):
Well, they very well could. Bid has a level two
product that they offer in China for free right now,
whereas even if you buy a Tesla and China you
still have to pay for full self driving.
Speaker 1 (11:22):
So that could lead.
Speaker 8 (11:23):
Some consumers to choose a bid, both will be level
two products inside China, and China is a unique market
because the data for ad testing has to stay within China.
You can't send it back to Tesla's headquarters in the
US for refinement, and so China maybe a different market
altogether where BID is more comparable to a Tesla. But
(11:44):
if you're looking at a market like the US or
Europe right now, I think Tesla would be more comparable
with Alphabet's Waymo product as a robo taxi competitor.
Speaker 3 (11:53):
So with the current price, we're trading app more than
your two fifty dollars, call you hold and brace for
further volatility. Are we ever going to just see a
calmer up into the right trajectory for Tesla stock.
Speaker 8 (12:08):
Well, if there are months and quarters of good news
that comes out, then we could see Tesla's stocks start
to rally. But when it was trading in the high
four hundreds, like it was in mid December, we had
a one star rating, we thought Tesla was to sell
because we thought a lot of the good news was
priced in, a lot of it was priced for perfection.
Even when you're looking at valuing the robotaxi business, we
(12:30):
assigned maybe.
Speaker 7 (12:31):
A lower valuation of some of the more.
Speaker 8 (12:33):
Bullish forecasts, because when you think of robotaxi, it's going
to be a cheaper price point, which means the lower
total addressable market for consumers and for Tesla's profitability. And
they can't just take a thirty percent take like an
uber can. They also have to manage their expensive That's
another whole set of additional overhead expenses. So I do
(12:54):
think it's going to be a very profitable business for them,
but maybe not as profitable as the market's implying.
Speaker 3 (13:00):
How warried have you been about key man risk with
Tesla as well, concerns about access to the pay he'd
been promised, and indeed the focus he has over at
the White House right now.
Speaker 8 (13:11):
Well, Elon Musk has always had multiple positions, you know,
whether that was buying Twitter, turning into X a couple
of years ago, or helping to lead SpaceX. He wasn't
the CEO, but he still does take a leadership position
in that company. He also has boring company, Neurolinks, so
I'd imagine that Elon is still focusing most of his
(13:31):
time and energy at Tesla. I think last week's event
highlighted that that he's still focused on Tesla, and he's
probably taking a little bit of a step back at
some of his other companies, letting the management teams at
places like SpaceX and X do more of the projects,
take more of a leadership role so he can spend
more time at the White House. I'm not too concerned
(13:51):
right now that Elon's going to leave Tesla. I think
they'll work out a deal that'll be a very favorable
compensation package because the shareholders did both for it. So
there is a lot of shareholders report for Elon wants
to get paid, and I think what we'll see is
Elon will get a pay package, we'll stay at Tesla,
and so I don't see a lot of keyper service
for testing.
Speaker 3 (14:09):
Seth Golstein, it has been great catching up with you.
Thank you, morning star Crity strategists on things Tesla. Meanwhile,
coming up major tech companies and foreign officials. They are
pushing the Trump administration to rethink the country's global semiconductor strategy.
Speaker 4 (14:21):
We'll have the details next.
Speaker 3 (14:22):
Meanwhile, let's talk about some of those key tech executives
and companies in Vidia, Broadcom, also Intel. Interesting report coming
out this time. From analysis over at UBS, it looks
as though Intel is reportedly strategizing to rejuvenate its chip
design and broaden its foundry business. Could this be about
securing these clients in VideA broadcom that being written up
(14:43):
by UBS analysts and within a chury this has been
big technology. Our own officials, our major tech companies are
lobbying the White House so loose some trade restrictions placed
(15:04):
on AI chips. Of course, that was back in the
final days of the Biden administration. REUMAGS Mike Sheppard joins
us for more on this. Now. It's a so called
AI diffusion rule here, and it feels as though Oracle
Nvidia are the key companies that would like this not.
Speaker 4 (15:18):
To go into act.
Speaker 9 (15:20):
Well, that's right, Caro, they have the most at stake here.
And to back up a little bit to reminder audience
of what this AI diffusion rule does to help understand
where the companies are. Look, this rule divides the world
into three tiers. It sets up a first tier of
countries the closest US allies maybe about twenty of them
that get unlimited access. And then there's another tier of
(15:43):
countries the adversaries of the Usa, China, and Russia that
are really cut off from access to the most advanced
AI chips. But then there's this big fat middle of
nations and that includes Israel, the United Arab Emirates, and
even India, which all have their own ambitions and are
all markets where Nvidia and Oracle are looking to do
(16:04):
a lot of business. And the prospect of having to
face restrictions on how much computing power they can sell
to anyone nation, or having to deal with guardrails that
could prove to be regulatory hurdles that might steer business elsewhere,
is what is prompting this lobbying push by Nvidia and
also by foreign leaders.
Speaker 3 (16:24):
I mean, just think if you're not able to house
more than seven percent of your overall compute capacity in
certain countries, that's really going to impact Oracle exactly its
plants at the moment, plans over Malaysia, for example. So
would they want a complete repeal? Are we likely to
see a complete repeal?
Speaker 9 (16:42):
Well, the reporting from our colleagues Jenny Leonard and Mackenzie Hawkins,
and a shout out to them for the great work
that they did with this report. What they turned up
was that Nvidian Oracle are most steadfastly against this role.
They are the ones who really want to see it
next all together and then started again from scratch. Everyone
(17:03):
recognizes that there is a need for some sort of
governance about where AI chips go. They do provide a
security advantage or risk if they spread to widely, and
the US is already subjected in video to restrictions on
exports of chips also used in AI to China. We've
seen that come up, for instance with deep Seek. But
(17:25):
now what they want to do is they want this
started from scratcher. Are there companies though, like Google and
Anthropic that are willing to work with the rule but
would like to see it recast in ways that are
a little bit more favorable in bugs.
Speaker 3 (17:37):
Mike Shefford, thank you so much on the AI diffusion rule.
Speaker 4 (17:47):
It's time now for talking tech.
Speaker 3 (17:49):
First up, another TikTok executive steps down.
Speaker 4 (17:51):
Rick Channeley, who.
Speaker 3 (17:52):
Oversaw ad sales and global marketing, will step into an
advisory role as part of a reorganization. Now it's the
leadst management change by the social media company as it
faces an April fifth deadline to reach a US sale deal. Now,
according to the information at least eight other executives of
Left TikTok since twenty twenty five plus Deep Seek unveiled
its latest V three model, promising better programming capabilities. Chinese
(18:14):
ai startup dropped the update without actually a formal announcement
as it looks to remain competitive against its rivals. Deep
Seak claims the V three model could address real world
challenges while remaining accurate and efficient, and Ali Baba chairman
Joe Sai says AI data centers maybe at the beginning
of a bubble. Who's speaking over the HSBC Global Investment
Summit in Hong Kong, and Sai said a lot of
(18:36):
US data center announcements were duplicative and overlap with each other.
So let's get more on that exact story of Bloomberg's
Peter Elstrom and finding talk trying to push against these
US giants that met the Amazons about their commitment to
AI infrastructure.
Speaker 10 (18:53):
Yeah, it's interesting comments from Joe Sai. As you mentioned,
he's chairman of Ali Baba. He's been through this for many,
many years. He got a start in the dot com bubbles,
so he's seen some of these bubbles in the past,
and he's calling it out. He was at this conference
in Hong Kong talking with investors and tech executives at
that point, and he said he's concerned about this AI
(19:14):
bubble forming, particularly around data centers. We have seen incredible
amounts of money getting poured into these data centers, especially
from the US tech companies Amazon and Microsoft and Google
all are pouring tens of billions of dollars into these
data centers. Of course, you'll re call that open Ai
and SoftBank talked about spending five hundred billion dollars on
data centers in the US, so they're really kind of
(19:35):
crazy numbers. Alibab has not been shy about making these investments.
In fact, they plan to spend more than fifty billion dollars.
But the numbers are starting to add up, and the
question is whether those are going to pay off with
some profitable services down the line.
Speaker 3 (19:48):
And it speaks to investor anxiety over the last few
months that we're just putting too much money in not
getting enough reward out. In fact, Mizuho analysis coming out today,
I always love the notes coming out from Jordan client
and he pointed, perhaps these are sort of these pot
shots being fired over in video and US giants buy
China tech internet leaders, and he said, it's kind of
(20:09):
funny that just straight after GtC, we're getting these negative
shots against in video and the entire AI investment narrative
that generally centers around one hundred percent on US suppliers.
Speaker 4 (20:19):
Is there a theme that.
Speaker 3 (20:20):
This is almost geopolitical, that this is China fighting back
against US, and how US has basically ridden the wave
of AI more than them so far.
Speaker 10 (20:29):
Well, I think it's important to look at the China
tech industry, China business for broadly, not as a monolith.
These are individual companies making individual choices, but when you
look at how they add up. There have been more
than ten AI models introduced just over the past two weeks.
They're coming out fast and furious after Deep Seek, and
you're exactly right. They are positioning themselves as quite different
(20:51):
from the US models. They're lower costs, they're much more
efficient in a lot of ways, and they're not spending
the same amount of money. Part of that is because
of US restrictions. The US has stopped them from buying
the highest end in video chips in particular, so rather
than spend tens of billions of dollars on some of
these efforts. They're spending much more and they're using a
lot of engineering expertise to be able to come out
(21:11):
with models that are very competent. They are competitive globally,
and they're innovative in a lot of ways. So they're
going at a different part of the market, and they
could be bringing down profits overall for the whole market.
Speaker 4 (21:24):
Just good to remind use of that.
Speaker 3 (21:25):
Ali Baba's CEO, though tod say that AI is one
in a generation opportunities. So kind of speaking from two
sides of the mouth here, Peter Elstrom is so good
to have you. Thank you, Welcome back to blumel Technology
and Caroline hid in New York. Let's get a quick
(21:46):
check on these markets, because we remain tentatively higher after
yesterday's big rally on the NASSACK. Across all benchmarks, we're
up another five ten percent on the Nasdaq one hundred.
Speaker 4 (21:55):
You dig into the detail who leads.
Speaker 3 (21:57):
Us on a points perspective on the downside's video, We've
still got some anxiety around geopolitics on restraints from exporting
for that name.
Speaker 4 (22:04):
But go into the.
Speaker 3 (22:05):
Companies that lead us on the higher side, and it's
Apple from a points perspective, we're off well currently up
by one and a quarter percent. We're seeing once again
maybe some feel good factors coming from the EU for
once for this particular name, but it really is your
biggest points contributor. We're now back on the last like
one hundred to where we're training at the beginning of March.
But in video, as I say, is still the worst
on the points downside, We're off by eight tenths of
percent as we're still trying to understand how much they
(22:27):
are going to be able to get their incredibly sophisticated
chips in More broadly around the world. I'm looking at
Tesla though, flitting between gains and losses. Today we have
negative news when it comes to EU sales down forty
percent again from the month of February. However, we saw
a significant rally yesterday up almost eleven percent, so maybe
we just pull back a little bit and a little
(22:48):
bit of profit taking. We're down three tenths toer percent,
but there is so much volatility in this market. Let's
get a broader context for you amid tariff threats and
so much else for big tech. Denise Chisholm is with
US fidelity investments, quantitive marks strategy direct to and you
put such a historical lens, which we need at this
moment because often it feels unprecedented. Take us back to
(23:08):
a sentiment right now and how it makes ultimately the
context of what it was like back in what the
Gulf War. You say, we've never had as much pessimism.
Speaker 11 (23:17):
Yeah, I mean, in some ways we've had a very
cluster of anomalous signals in this tempercent correction. I mean,
obviously this correction has been one of the fastest on record,
but I think the unique part of it was the
decline and sentiment from you know, you can look at
the AAII measure from you know, bullish to bearish. You
can look at the Google trends in terms of recession sentiment.
(23:38):
You can look at a lot of the sentiment indicators,
the defense of rotation we've seen, just the rotation in
international stocks. All of these signals happen less than three
and one percent of the time, and in some ways
much of it has been during war crises or prior recession.
So without a recessionary event, this is incredibly unique. I
think when you look at the signaling perspective and you're
(23:59):
willing to take a media term time horizon of six
to twelve months. All of these extreme signals are usually
contrarian buy signals for the overall market. But the extreme
anomaly this time is that the market isn't really down
a lot as much as we've seen a ten percent correction,
and even over the last six months you can say
it's flat. So to the extent that investors are uniquely
(24:19):
concerned about the fact that, hey, we're seeing google recessionary
trends spiking to recessionary levels to the extent that that
has been the case in history. Should stocks go down
to meet that recessionary sentiment, you actually find the opposite correlation,
meaning the less stocks are down when you are at
(24:39):
these peak recession sentiment levels, usually that's better signals in
terms of a stock market advance in the future. It's
almost like the lack of correction in stocks gets it right,
or that stocks are potentially looked throughing something, looking through something.
So I think that those unique signals in the data
that actually do suggest that opity.
Speaker 3 (25:00):
Okay, so if you are willing to take on the
abrupt fall or two coming going forward, are we nearing
a bottle is bottom. Is that sort of the signal
that you're getting from historical context right now?
Speaker 11 (25:12):
Yeah, I think when you look at it historically, it
doesn't really nail the bottom. In terms of picking bottoms,
I think that the signals that I look at from
a probability perspective or longer term in nature. So when
I look and say you want to look out six
to twelve months and absorb the volatility, I think that
there's opportunities in that. That's less to say that the
bottom was yesterday or today, or maybe even in two
months from now, but it is to say that after
(25:34):
the correction, I think that it might be too late
to be bearished to the extent that you have that
year long time horizon.
Speaker 3 (25:40):
And Denny's what we've seen is a real flip around
in terms of who's outperformed, healthcare dominating even a bit
of financials, but technology has lagged. Is it now that
we start to see people recommit, have fundamentals changed at
the same time as human anxieties and any pessimism across
the border markets.
Speaker 11 (26:00):
Yeah, So back to that defensive rotation. The defensive sectors
in the market, consumer staples, healthcare, the old telecommunications services,
and utilities have outperformed by about eleven hundred basis points.
That again has only happened less than three percent of
the time in history, and you usually see a cyclical
rotation after that, despite the fact that fundamentals may in
(26:21):
fact deteriorate, which is to say that, look, a lot
of that concern around numbers or around the economy has
been somewhat priced in. So I do think that there
are opportunities in technology. I think the intriguing part about
technology is that we've seen really more multiple compression than
we have seen a decline in earning estimates. So once
(26:41):
you're out of that top quartile, when I look back
in history and say, okay, you're out of the top
quartile of relative forward PE or even relative trailing PE,
and you're now into that muddy middle, you usually have
a positive risk reward to the extent that fundamentals continue
to improve.
Speaker 3 (26:56):
And the positive risk reward dominates in any of a
part of technology. Are we still thinking hardware the pix
and shovels where we reallocate or do software, which hasn't
had so much whiplash continue to support too.
Speaker 11 (27:11):
Yeah, So I think software looks the most intriguing in
my data set. So again we have the data going
back to nineteen sixty two, and once you're into that
bottom half of the distribution on any valuation measure, and
software is there. So you're getting in again cheap relative
to usually wear software trades. You usually have a positive
risk reward. Again, you don't have to necessarily be right
(27:32):
on fundamentals because you have above fifty to fifty ydds
of outperformance even if fundamentals tend to deteriorate. This isn't
to say that software is set up to outperform right
this second, but it is to say that it looks
like from a historical context your downside is limited and
to the extent that you have a call option for
future growth, your upside is actually shifting the positive risk reward.
(27:53):
So I think that of the three major subsectors, hardware
software and semiconductor software looks the most intriguing to me.
Speaker 3 (28:00):
A glasshow full kind of a feeling coming from Denise,
We thank you so much, enjoying the show. As always,
dnis Chism of Fidelity Investments, Now I'll invest. Kathy would
actually spoke exclusively with Bloomberg over at the HSBC Global
investors someone in Hong Kong to discuss the global economic outlook.
Let's give the context of how AI can help in
the long term.
Speaker 2 (28:18):
Just take a listen.
Speaker 6 (28:19):
We think the economy is getting hit by a lot
of uncertainty, and I think a lot of people are
scared for their jobs. In the US, anyone involved with
the government, so federal, state, and local or quasi government
in the healthcare and education space. You know, there could
be as much as thirty percent of the labor force
(28:41):
in the United States. And then we've got AI as
another layer of uncertainty. We're seeing middle management teams actually
being let go because of the productivity gains associated with AI.
You know, their bosses can handle more and more and
more over time. So that's another source of uncertainty, but
(29:03):
we think that is going to play out positively longer term.
Technology and breakthroughs in technologies are always associated with new
jobs that we can't even imagine. We're very impressed by
what is going on in China, and of course there
was the Deep Seek moment, which for China, or it
(29:24):
was the equivalent in China for the and the rest
of the world. That chat GPT was in late twenty two.
I think so that was a big wake up call.
And one of the things we learned so interesting is
that yes, they may have done it less expensively, maybe
much less expensively. We're not quite sure about that, but
(29:46):
the algorithm very creative. It had not been created in
the West. This is from China. It is open source.
So now everyone is starting to use it. They say,
we love that idea and we're it. So what we've
also learned and did not know until we started studying
this open source movement here in China is that it
(30:08):
really started a decade ago because a lot of software
providers from the Western world we're not providing their software
to China out of fear of IP theft. So China said, okay,
let's do it ourselves and move open source. I love
open source and I think it's going to create a
(30:28):
lot of competition out there, which when it comes to innovation,
is a very good thing, especially for the end consumer.
Speaker 3 (30:37):
I'll convess Kathy with there. Let's keep talking about competition.
Stick with chatchibt in the impact. For decades, Google dominated
online search, and now Generator AI and the competitiveness coming
from open AI are forcing the company to rethink it's
most well known product. Blue Meg's Julia Love joins us
now today Bloomg's big take, and Elizabeth Read is a
(31:00):
Google veteran that you really shine a light on in
your Bloomberg BusinessWeek story because she's now got some big
overhauls to do and she's doing them.
Speaker 12 (31:09):
Yes, so Liz Read is a fascinating rising star within
doodle She is now in the top job leading doodle Search.
And she came to this role from the Maps division.
That's where she spent most of her career. And so
while she knew searched very well, she was a little
bit less wedded to some of the traditional ways of
(31:32):
doing things, and she brought a more experimental spirit that
has been really crucial in this new age when so
many of the basics about search are being challenged.
Speaker 3 (31:43):
And here comes AI overviews for example. Now, just go
back in history a little bit and talk about why
there was a lack of well real innovation on the
product side of things. Why were people curtailed from upending
what we all knew and understood in terms of the
blue links.
Speaker 12 (32:02):
Yes, with our reporting, we actually unearthed some new examples
of how doodle search employees were pushing to roll out
generative AI and search well before the launch of chat GPT,
but they faced a lot of resistance. I think there
was a lot of self regulation happening that Doodlers just
weren't inclined to challenge the company's fundamental business model. Executives
(32:28):
were also concerned about whether the technology could deliver the
necessary level of accuracy because people just hold Doodle to
such a high bar, a much higher bar than a
startup would be held too.
Speaker 3 (32:40):
And there's the frustration that actually their transformers innovation is
then used by someone else. But the question is monetization.
Have they really got to the bottom of that, because
many a warrant. What about the ads that you can
put into an AI overview?
Speaker 12 (32:53):
Yes, I think that remains the big question. Doodle has
incorporated ads into AI over views and so far their
search market share is pretty much unchanged, but there are
some concerns among analysts that growth in search will begin
to level off, and in the meantime, Goodle's embrace of
(33:15):
generative artificial intelligence is raising huge concerns for all of
the publishers who depend on Doodle for traffic.
Speaker 3 (33:22):
It's a fascinating story. Deep read go take it on
with Julia Love.
Speaker 4 (33:27):
We thank you.
Speaker 3 (33:28):
Coming up, US drone makers are battling for a biggest
share with the domestic market. I'll speak with Scudio CEO
about the growth.
Speaker 4 (33:35):
And Chinese competition. That's next. This is Blue Meg Technology.
Speaker 3 (33:51):
The global drone market is dominated by Chinese makers, but
there were growing efforts by US rulemakers, defense strands, and
startups to gain a bigger foothold in markets.
Speaker 4 (34:00):
Including the US domestic.
Speaker 3 (34:02):
One showing US now is Adam Murrie, the CEO of
drone maker Skuydio, and I love a quote that you've
been making saying that basically drones are revolving from toys
to tools to infrastructure. Well, how do you break down
your growth right now in those three contexts.
Speaker 13 (34:19):
So I think we're at a really exciting moment for
the industry where historically drones have been manually flown. You know,
if you're using it for work, you send an operator
out in the field to fly the drone, and people
have done all kinds of amazing things and that kind
of operating paradigm. But the big shift that we're seeing
now is you can put the drone in a docking station.
It can be flown remotely and autonomously. It basically becomes
(34:40):
a fully autonomous robotic system. And the impact and the
use cases that you unlock when you do that are
just incredible. So one of the areas where we're seeing
this accelerate the most is in public safety, where you
could put drones in docking stations and they can autonomously
fly out in response to nine one one calls and
just fundamentally change the outcome because they can get there
in a few seconds. They give the responding officers better
(35:01):
situational awareness. And you know, I think we're at the
beginning of this just entirely new chapter drones is infrastructure.
Speaker 3 (35:09):
Talk to us about the chapter of US versus Chinese
main drones in this police and fire department demand. How
much are you now able to fulfill it?
Speaker 13 (35:21):
So there's interesting historical context here. So if you think
about what a drone is, at its core, it's basically
consumer electronics combined with a radio control airplane a radio
control helicopter. That's the origin of the industry, and historically
both those things have been made in China, and so
the Chinese companies really got out to a substantial early lead,
especially in the kind of toy market and then the
(35:43):
tools market. You know, we believe very strongly it's critical
that there are strong US companies, strong Western companies that
can provide this technology. I think we're it's still early
days to the industry. It's going to become more and
more important over time.
Speaker 4 (35:55):
You know, we're.
Speaker 13 (35:56):
Installing these things across our cities, across critical infrastructure, and
the risks from a data perspective, from a national security perspective,
from a cybersecurity perspective, are substantial. Our goal is to
build the best products in the world for this new
chapter of drones right here in the US. We made
very big early bets on AI and autonomy when we
started the company ten years ago, and we're now at
(36:17):
the moment where we're starting those to see those payoff.
Speaker 3 (36:20):
Yeah, and talk about the payoff though, because when we
think about what China has done so well, it is
about efficiency. It is about the scale at which they've
been able to streamline production. How are you now managing
to replicate that here in the US.
Speaker 13 (36:35):
So you know, this is not the kind of thing
that's going to happen overnight. The strength of China and
the Chinese companies that we compete with is definitely in
their hardware scale, their cost leverage, you know, the hardware
ecosystem that they're taking advantage of in China. We've been
manufacturing our drones in the US from the beginning. You know,
we didn't start doing this honestly because we thought it
was going to be critical from a national security perspective.
(36:56):
We started doing it because we felt like it was
the best way to build the best product. And we've
gotten to the point now where we ship close to
fifty thousand drones, which is still small relative to our
Chinese competitors, but our market share in the enterprise segments
that we focus on, you know, public safety, critical infrastructure
like energy utilities is substantial, and the more scale we
(37:17):
get up to, the more cost advantages that we get,
I think from a capability standpoint now, just on the hardware,
you know, we've we've gotten to be very competitive with
the Chinese companies, and we have more advance capabilities in
AI and autonomy, so you know, it's it's it's tough
competition for sure. You know, we have the exciting position
of being the US underdog against big Chinese incumbents. But
(37:37):
I feel very good about our position. And I think
especially as these things become more air driven, more autonomous,
more and more the capabilities to find through software that
really plays to our strengths as a country and as
a company.
Speaker 3 (37:49):
Are they becoming ever more supported by the administration. What's
on your wish list?
Speaker 13 (37:54):
Well, look, we're you know, we're a product and technology company.
We're really focused on, you know, on making our products
as useful as they can be. I think that, you know,
looking back now, I think the first Trump administration deserves
a lot of credit for recognizing the nature of competition
with China, the kind of unfair trade practices that they
(38:15):
had been partaking in, and that has now become kind
of mainstream consensus view. I will say with the new administration,
we're very optimistic about seeing a lot of people from
the tech world in there that I think really understand
that technology at a deep level. And you know, it's
still early days, but we're optimistic.
Speaker 3 (38:32):
Skydio CEO Adam Ray, thanks for the optimism and for
joining us. Levittown It's a new six part podcast series
from Bloomberg investigating the rise of deep fake pornography online.
Speaker 4 (38:49):
It tells a story of a group.
Speaker 3 (38:51):
Of young women in a New York City suburb, horrified
to learn that their photographs have been manipulated and posted online,
and how they took matters into their own handsmerg's Margie
Murphy joins us. Now for more, you go back to
twenty twenty. You discuss how female called Kayla in particular,
finds a manipulated photo of herself online.
Speaker 4 (39:11):
But this is a global.
Speaker 3 (39:13):
Story of issues of deep fake pornography.
Speaker 4 (39:15):
But start here in Levittown.
Speaker 2 (39:18):
Absolutely, I mean, we start with Kayla and just to
it's not even Kayla who discovers a seemingly pornographic image
of herself, it's her father.
Speaker 4 (39:28):
And we take you.
Speaker 2 (39:28):
Back into her bedroom when her father comes in, hands
her a phone and says, what is this? And then
we unravel what kind of becomes this horror story that
engofs dozens of women in Leavittown, but they later realize
they're part of this small network, kind of global clearing
house of deep fake pornography, non consensual deep fake pornography,
(39:50):
revenge porn harassment, all connected to one website, which Olivia
and I try to find out more about and meet
lots of investigators, prosecutors, victims all around the world.
Speaker 3 (40:03):
Of course, you've been doing your work with Olivia Carvill
here at Bloomberg and the Story podcast of course based
in twenty twenty and then you wrote up a key
piece in twenty twenty three. But is this all still
an issue that we're currently seeing right?
Speaker 2 (40:17):
So the story that we're covering began in twenty twenty,
we reported on it twenty twenty three, and now twenty
twenty five we've got this podcast coming out. A lot
has changed. The problem has not gone away. We've seen
dozens of school cases where there's been children deep faking
their classmates. We're hearing obviously more about celebrity nonconsensual deep
(40:40):
fake pornography. And this is amidst the kind of rise
of generative AI improvements in technology. And we got a
figure recently from a traffic analysis company that showed that
there was a six hundred percent increase from last year
for newdifying apps. And those apps are the kind of
their like phone apps, that are very easily accessible, and
(41:02):
what they do is you can just screenshot a photo
from someone's social media account, run it through the app,
and minutes you've removed the person in the photos clothes.
So a lot of those apps are involved in these
school cases and those are just completely soaring in popularity,
very cheap and easy to use.
Speaker 3 (41:20):
Briefly, law enforcement is targeting it, the government targeting it.
Speaker 2 (41:26):
It's been a challenge and we've spoken to law enforces, cops, prosecutors,
law makers. Internationally, it's challenging because there are patchwork laws
in different countries, in different states. In the US, they
have different laws. Right now, there is hope that an
actual federal law will be brought into force. It passed
(41:50):
a bill passed through the Senate last month and it
will go through the House this month, hopefully to take
it Down Act, which would put pressure on the platforms
where these images are being shared to take the images
down as quickly as possible and also penalize the piece
for the people posting them.
Speaker 3 (42:10):
The right time to catch your full Big Take podcast
series therefore on Spotify and iHeart, We thank you.
Speaker 4 (42:15):
This is remote technology.
From the heart of where innovation, money and power collide
in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hide and Ed Ludlow.
Speaker 2 (00:26):
Live from New York.
Speaker 3 (00:27):
I'm Caroline Hyde, and this is BlueBag Technology coming up
tes the sales slump forty percent in Europe, having fallen
in ten of the last twelve months. We get the analysis,
plus foreign officials and tech execs push Trump's administration to
rethink the US's global chip strategy and export limits.
Speaker 4 (00:44):
This is the debate.
Speaker 3 (00:45):
OURAI regulation heats up, and Ali Baba chairman Joe Side
criticizes US tech giants for their massive spending on AI
infrastructure and warns of a potential bubble in data center construction.
We shine a light what's happening in the markets, bring
you also breaking news as well as we understand that
Russia is currently in the US saying that Russia agrees
(01:07):
to ban on striking Ukraine energy assets. That was, of
course something that had been discussed in the previous end
of the show, but we are seeing of course the
United States coming out there and saying indeed that Russia
agrees to a ban on the striking of Ukrainian energy assets.
Will bring you more on that story in a moment
and the implications to the broader market. But right here,
right now, we go back to what's happening in the
(01:28):
tech space. I'm looking at US that currently off about
five tens percent after yesterday's significant rally. I want to
drill into some of the individual companies that have been
on the move as well, and interestingly, after the phenomenal
rally that we saw in Tesla yesterday, it's off by
only about two tents of percent. That's in the light
of that significant drop once again in European sales that
(01:49):
are down forty percent from the month of February after
performing a similar amount in the month of January, and
we're now down forty three percent over the last two months.
I'm shining like what happens to BYD as well. It's
not by more than four percent, maybe even five percent
after yesterday's rally, as it finally shows that it crescendoed
further than Tesla in terms of its revenue for fiscal
twenty twenty four. Let's drill into all of this, the
(02:10):
pushes in the pools and pleased to welcome Craig.
Speaker 4 (02:12):
Trudell with us and Craig.
Speaker 3 (02:13):
Look, the moon music has been sour for Tesla in
terms of sales when it comes to Asia, when it
comes to Europe, and this is more of the same,
but it's not dragging on the stock too much today.
Speaker 5 (02:25):
Yeah, I think it's really been something to watch the
last few days now that we've seen this real rally
in the shares. They were really getting beaten down and
we saw, you know, the Trump administration sort of mount
this push, you know, with the Commerce Secretary coming out,
Howard Lutnik and saying, you know, go out and buy
(02:46):
Tesla stock. It's never going to be this cheap again.
We you know, didn't see an immediate sort of perking
up of the shares as a result of that, but
they really sort of furiously, you know, rallied to begin
this week. And you know, even despite the fact that
these numbers from the European Auto Manufacturers Association are really ugly,
(03:09):
as you say, you know, this isn't just a last
couple of months. It's ten of the last twelve that
we've seen the red, as this chart shows.
Speaker 3 (03:16):
I think what's important is to shine a light on
how much it's the opposite of the trend in you're
more broadly though EV sales are actually are more than
thirty percent.
Speaker 4 (03:25):
It really is an outlier.
Speaker 5 (03:27):
Yeah, absolutely, And we should of course note that this
is not just a story about you know, Elon Musk
and potential brand damage. There is a transition of the model.
Why that's really important to keep in mind here where
you know, when you change over a vehicle from one
generation to the next, it means some disruption in your
output that is having an effect on Tesla the beginning
(03:51):
to begin the year. But you know, this is also
the case that you know, the industry was preparing for
twenty twenty five being a much tougher compliance year from
and emissions perspective. So Tesla also is just going to
have a lot more to deal with in terms of
competition because other carmakers feel the need to bring their
emissions down for those compliance reasons.
Speaker 3 (04:13):
If competition wasn't stiff enough coming from China's byd creature, Dell,
we thank you so much. Meanwhile, let's get an investigate
because Kathy would well maybe unsurprising me for many, is
remaining bullish on Tesla but still calling for the stock
to hit two than six hundred dollars in five years,
almost ten times its current price, but a Megs daviding
there sat down for an exclusive interview with the invest
CEO that was over at HSBC Global Investment Summit in
(04:35):
Hong Kong.
Speaker 6 (04:36):
Take listen, China is very important to Tesla, and I
actually think that Elon Musk and May Musk his mother
are are sort of ambassadors for the United States. Yes, yes, yes, yes,
and rightly so so. But to answer your question directly,
if China were to fail, that would be a short
(04:57):
term hit to the stock. Would it take us away
from twenty six hundred dollars? No, because the robotaxi story
is much more a function of the Western world where
ride hailing costs are so much higher than they are
in China.
Speaker 3 (05:15):
That's going to take in Bailey Lipshitz, who's been delving
into the resilient pollition coming from ARC invest. But really
this isn't so much about warries and blips of European sales.
This is about long time focus on AI and robotaxis No.
Speaker 7 (05:30):
Exactly, And as Craig Treudale pointed out earlier, she's been
predicting the dawn of robotaxies from Tesla since at least
twenty seventeen, so long term bullish. It is their biggest
holding in the rc ETF. But one thing I want
to call out when you look at this company when
it trades on it's multiple If you pull the pe
on Tesla relative to the rest of the mag seven
p is north of ninety.
Speaker 3 (05:49):
Are you saying that Tesla doesn't trade on fundamental They
don't trade on fundamentals.
Speaker 7 (05:53):
And also, keep in.
Speaker 3 (05:53):
Mind, show us, Bailey, you show us if you bought.
Speaker 7 (05:56):
ARC five years ago, you're up twenty seven percent. You're
lagging the S and P five hundred by one hundred
and twenty five percent, okay, and the Nazak by one
hundred and fifty percent. So been a losing bet in
the long term. But nonetheless, Kathy would sticking to those guns.
It kind of does sound like some of the retail
investors I talked to and the idea that the cyber
truck was only part of a thesis and now we're
looking to driverless taxis as well as the humanoid robot.
Speaker 4 (06:17):
And she doesn't even facts.
Speaker 7 (06:18):
You're in the human eye on robots, right, Yeah, No,
I mean again, if you do the math with a
current share count, that's an eight and a half trillion
dollar company with her forecasts, So they're going to be
doing a lot with driverless technology. Even if you add
up some of the bigger carmakers with the likes of
an Uber, you're still not even close to what that
would look like. She's obviously been bullish. She's pounded the
table for bitcoin to hit a million dollars at some
(06:40):
point in the not too distant future. So really talking
her book, but definitely something.
Speaker 4 (06:45):
To take a bit with a grain.
Speaker 3 (06:46):
Of salt we put into perspective of Kathy would the
bets that has won out and she was a long
term bull on Nvidio but actually removed her options and
ultimately exposure to the company just as it started to
rally hard. With Tesla, she has main committee, but they
have pulled some of their chips off the table.
Speaker 7 (07:02):
Right, Yeah, it's a lower percentage of the holding of
when you look at the flagship ETF that Ark Innovation ETF,
now about eleven twelve percent of the ETF is allocated
to that. That was closer to like one fifth when
you look in that looked towards the beginning of the
year the end of last year, so pulling back, but
as you mentioned, kind of as the stock was rallying. Yes,
it's down about a third year to date, but nonetheless,
(07:23):
taking that long term view is retail investors will say,
you've been right about Tesla for five six years at
this point, and you're sitting pretty strongly in the green.
But if you look at the rest of some of
the investments that ARC has been pitching and been leaning into,
they haven't all really worked out, and that's why there's
been such a lag between the flagship ETF and pretty
much every other tech index.
Speaker 3 (07:43):
Any Lipshaw's bringing us one investor take when it comes
to Tesla, Let's go broader in terms of the overall
market analysis of these EV numbers and the.
Speaker 4 (07:52):
Future for the company.
Speaker 3 (07:52):
Seth Goalstea and please say welcomes from morning Star Equity Strategist.
You're also the chair of the EV committee over there.
You currently have a hold rating Tesla. You've got a
price target of two fifty, so actually below where we
currently are after yesterday's rally. Why are we not sinking
more on these yet further dire sales news out of Europe?
Speaker 8 (08:13):
Well, I think there's a lot of enthusiasm with the
full self driving technology. Yesterday's news that full self driving
was approved in China bodes well for China sales is
a far bigger market for Tesla than Europe. And so
when you look at full self driving, we have the
robo taxi testing that's going to be launched in Austin,
the full self driving unsupervised launch in Austin, and we'll
(08:34):
come to California later this year. And then with the
positive news of being able to launch the supervised level
two version of full self driving in China, that bodes
well for Tesla delivery. So I think that's the momentum
that's that's carrying heavier today versus the European deliveries being down.
Speaker 3 (08:51):
Okay, it has that optimism enough to vindicate the about
one hundred times future earnings that we currently trade at
for Tesla. As we were just hearing from Bailey, well.
Speaker 8 (09:03):
Tesla's a very high growth stock, has been for years,
and with Tesla's still having strong growth prospects, whether that's
the energy storage system, whether that's robotaxis, full self driving,
subscription softwarees, there is still a lot of room for
the Tesla growth story to play out. So I think
the market is still valuing the Tesla does still have
a lot of growth left. Even if the Mile three
(09:25):
model y are approaching that limit of deliveries, they still
have the new more formal suv coming out later this
year that should then push deliveries back into growth.
Speaker 3 (09:35):
Seth get into the details here. Therefore, is it the
fact that they haven't really had an overhaul of their
current product that is limiting current sales and of course
the mismatches they try and iron out a new form
of production, or actually is it the politicking of La
must taking an effect here.
Speaker 8 (09:52):
It's still unclear what the drivers are behind the first
two months to client, especially in the European market, you
could have a lot of consumers waiting for their new
model Why, which just began deliveries in Europe in March,
so consumers could have been holding off until they could
secure a new model Why. You also have the more
affordable vehicle being launched, and so some consumers may be
waiting for a lower price point vehicle from Tesla. But
(10:14):
in the European market especially you finally have long range
ed competition at a comparable price for years, a Tesla
Model three year model. Why was the only long range
in this case, I'm defining it at at least four
under kilometers or more of range at the same price
that would be as the same as an IC after subsidies.
So for key markets like Germany or the UK, a
(10:35):
Tesla was the most affordable long range eed. Now you
have other competitors who are offering long range evs at
a similar or slightly cheaper price point, and so there's
true competition for the first time in the European market,
and that could be leading some consumers to choose a
different vehicle besides the Tesla.
Speaker 3 (10:52):
Latin America Europe can access BYD and I was interested
in Kathywood's take there that BWEY isn't a compation competive
so when it comes to av but we've heard that
they are focusing on autonomous vehicle technology, So could it
start to ramp up and take on the robotaxi future
of Tesla too?
Speaker 8 (11:12):
Well, they very well could. Bid has a level two
product that they offer in China for free right now,
whereas even if you buy a Tesla and China you
still have to pay for full self driving.
Speaker 1 (11:22):
So that could lead.
Speaker 8 (11:23):
Some consumers to choose a bid, both will be level
two products inside China, and China is a unique market
because the data for ad testing has to stay within China.
You can't send it back to Tesla's headquarters in the
US for refinement, and so China maybe a different market
altogether where BID is more comparable to a Tesla. But
(11:44):
if you're looking at a market like the US or
Europe right now, I think Tesla would be more comparable
with Alphabet's Waymo product as a robo taxi competitor.
Speaker 3 (11:53):
So with the current price, we're trading app more than
your two fifty dollars, call you hold and brace for
further volatility. Are we ever going to just see a
calmer up into the right trajectory for Tesla stock.
Speaker 8 (12:08):
Well, if there are months and quarters of good news
that comes out, then we could see Tesla's stocks start
to rally. But when it was trading in the high
four hundreds, like it was in mid December, we had
a one star rating, we thought Tesla was to sell
because we thought a lot of the good news was
priced in, a lot of it was priced for perfection.
Even when you're looking at valuing the robotaxi business, we
(12:30):
assigned maybe.
Speaker 7 (12:31):
A lower valuation of some of the more.
Speaker 8 (12:33):
Bullish forecasts, because when you think of robotaxi, it's going
to be a cheaper price point, which means the lower
total addressable market for consumers and for Tesla's profitability. And
they can't just take a thirty percent take like an
uber can. They also have to manage their expensive That's
another whole set of additional overhead expenses. So I do
(12:54):
think it's going to be a very profitable business for them,
but maybe not as profitable as the market's implying.
Speaker 3 (13:00):
How warried have you been about key man risk with
Tesla as well, concerns about access to the pay he'd
been promised, and indeed the focus he has over at
the White House right now.
Speaker 8 (13:11):
Well, Elon Musk has always had multiple positions, you know,
whether that was buying Twitter, turning into X a couple
of years ago, or helping to lead SpaceX. He wasn't
the CEO, but he still does take a leadership position
in that company. He also has boring company, Neurolinks, so
I'd imagine that Elon is still focusing most of his
(13:31):
time and energy at Tesla. I think last week's event
highlighted that that he's still focused on Tesla, and he's
probably taking a little bit of a step back at
some of his other companies, letting the management teams at
places like SpaceX and X do more of the projects,
take more of a leadership role so he can spend
more time at the White House. I'm not too concerned
(13:51):
right now that Elon's going to leave Tesla. I think
they'll work out a deal that'll be a very favorable
compensation package because the shareholders did both for it. So
there is a lot of shareholders report for Elon wants
to get paid, and I think what we'll see is
Elon will get a pay package, we'll stay at Tesla,
and so I don't see a lot of keyper service
for testing.
Speaker 3 (14:09):
Seth Golstein, it has been great catching up with you.
Thank you, morning star Crity strategists on things Tesla. Meanwhile,
coming up major tech companies and foreign officials. They are
pushing the Trump administration to rethink the country's global semiconductor strategy.
Speaker 4 (14:21):
We'll have the details next.
Speaker 3 (14:22):
Meanwhile, let's talk about some of those key tech executives
and companies in Vidia, Broadcom, also Intel. Interesting report coming
out this time. From analysis over at UBS, it looks
as though Intel is reportedly strategizing to rejuvenate its chip
design and broaden its foundry business. Could this be about
securing these clients in VideA broadcom that being written up
(14:43):
by UBS analysts and within a chury this has been
big technology. Our own officials, our major tech companies are
lobbying the White House so loose some trade restrictions placed
(15:04):
on AI chips. Of course, that was back in the
final days of the Biden administration. REUMAGS Mike Sheppard joins
us for more on this. Now. It's a so called
AI diffusion rule here, and it feels as though Oracle
Nvidia are the key companies that would like this not.
Speaker 4 (15:18):
To go into act.
Speaker 9 (15:20):
Well, that's right, Caro, they have the most at stake here.
And to back up a little bit to reminder audience
of what this AI diffusion rule does to help understand
where the companies are. Look, this rule divides the world
into three tiers. It sets up a first tier of
countries the closest US allies maybe about twenty of them
that get unlimited access. And then there's another tier of
(15:43):
countries the adversaries of the Usa, China, and Russia that
are really cut off from access to the most advanced
AI chips. But then there's this big fat middle of
nations and that includes Israel, the United Arab Emirates, and
even India, which all have their own ambitions and are
all markets where Nvidia and Oracle are looking to do
(16:04):
a lot of business. And the prospect of having to
face restrictions on how much computing power they can sell
to anyone nation, or having to deal with guardrails that
could prove to be regulatory hurdles that might steer business elsewhere,
is what is prompting this lobbying push by Nvidia and
also by foreign leaders.
Speaker 3 (16:24):
I mean, just think if you're not able to house
more than seven percent of your overall compute capacity in
certain countries, that's really going to impact Oracle exactly its
plants at the moment, plans over Malaysia, for example. So
would they want a complete repeal? Are we likely to
see a complete repeal?
Speaker 9 (16:42):
Well, the reporting from our colleagues Jenny Leonard and Mackenzie Hawkins,
and a shout out to them for the great work
that they did with this report. What they turned up
was that Nvidian Oracle are most steadfastly against this role.
They are the ones who really want to see it
next all together and then started again from scratch. Everyone
(17:03):
recognizes that there is a need for some sort of
governance about where AI chips go. They do provide a
security advantage or risk if they spread to widely, and
the US is already subjected in video to restrictions on
exports of chips also used in AI to China. We've
seen that come up, for instance with deep Seek. But
(17:25):
now what they want to do is they want this
started from scratcher. Are there companies though, like Google and
Anthropic that are willing to work with the rule but
would like to see it recast in ways that are
a little bit more favorable in bugs.
Speaker 3 (17:37):
Mike Shefford, thank you so much on the AI diffusion rule.
Speaker 4 (17:47):
It's time now for talking tech.
Speaker 3 (17:49):
First up, another TikTok executive steps down.
Speaker 4 (17:51):
Rick Channeley, who.
Speaker 3 (17:52):
Oversaw ad sales and global marketing, will step into an
advisory role as part of a reorganization. Now it's the
leadst management change by the social media company as it
faces an April fifth deadline to reach a US sale deal. Now,
according to the information at least eight other executives of
Left TikTok since twenty twenty five plus Deep Seek unveiled
its latest V three model, promising better programming capabilities. Chinese
(18:14):
ai startup dropped the update without actually a formal announcement
as it looks to remain competitive against its rivals. Deep
Seak claims the V three model could address real world
challenges while remaining accurate and efficient, and Ali Baba chairman
Joe Sai says AI data centers maybe at the beginning
of a bubble. Who's speaking over the HSBC Global Investment
Summit in Hong Kong, and Sai said a lot of
(18:36):
US data center announcements were duplicative and overlap with each other.
So let's get more on that exact story of Bloomberg's
Peter Elstrom and finding talk trying to push against these
US giants that met the Amazons about their commitment to
AI infrastructure.
Speaker 10 (18:53):
Yeah, it's interesting comments from Joe Sai. As you mentioned,
he's chairman of Ali Baba. He's been through this for many,
many years. He got a start in the dot com bubbles,
so he's seen some of these bubbles in the past,
and he's calling it out. He was at this conference
in Hong Kong talking with investors and tech executives at
that point, and he said he's concerned about this AI
(19:14):
bubble forming, particularly around data centers. We have seen incredible
amounts of money getting poured into these data centers, especially
from the US tech companies Amazon and Microsoft and Google
all are pouring tens of billions of dollars into these
data centers. Of course, you'll re call that open Ai
and SoftBank talked about spending five hundred billion dollars on
data centers in the US, so they're really kind of
(19:35):
crazy numbers. Alibab has not been shy about making these investments.
In fact, they plan to spend more than fifty billion dollars.
But the numbers are starting to add up, and the
question is whether those are going to pay off with
some profitable services down the line.
Speaker 3 (19:48):
And it speaks to investor anxiety over the last few
months that we're just putting too much money in not
getting enough reward out. In fact, Mizuho analysis coming out today,
I always love the notes coming out from Jordan client
and he pointed, perhaps these are sort of these pot
shots being fired over in video and US giants buy
China tech internet leaders, and he said, it's kind of
(20:09):
funny that just straight after GtC, we're getting these negative
shots against in video and the entire AI investment narrative
that generally centers around one hundred percent on US suppliers.
Speaker 4 (20:19):
Is there a theme that.
Speaker 3 (20:20):
This is almost geopolitical, that this is China fighting back
against US, and how US has basically ridden the wave
of AI more than them so far.
Speaker 10 (20:29):
Well, I think it's important to look at the China
tech industry, China business for broadly, not as a monolith.
These are individual companies making individual choices, but when you
look at how they add up. There have been more
than ten AI models introduced just over the past two weeks.
They're coming out fast and furious after Deep Seek, and
you're exactly right. They are positioning themselves as quite different
(20:51):
from the US models. They're lower costs, they're much more
efficient in a lot of ways, and they're not spending
the same amount of money. Part of that is because
of US restrictions. The US has stopped them from buying
the highest end in video chips in particular, so rather
than spend tens of billions of dollars on some of
these efforts. They're spending much more and they're using a
lot of engineering expertise to be able to come out
(21:11):
with models that are very competent. They are competitive globally,
and they're innovative in a lot of ways. So they're
going at a different part of the market, and they
could be bringing down profits overall for the whole market.
Speaker 4 (21:24):
Just good to remind use of that.
Speaker 3 (21:25):
Ali Baba's CEO, though tod say that AI is one
in a generation opportunities. So kind of speaking from two
sides of the mouth here, Peter Elstrom is so good
to have you. Thank you, Welcome back to blumel Technology
and Caroline hid in New York. Let's get a quick
(21:46):
check on these markets, because we remain tentatively higher after
yesterday's big rally on the NASSACK. Across all benchmarks, we're
up another five ten percent on the Nasdaq one hundred.
Speaker 4 (21:55):
You dig into the detail who leads.
Speaker 3 (21:57):
Us on a points perspective on the downside's video, We've
still got some anxiety around geopolitics on restraints from exporting
for that name.
Speaker 4 (22:04):
But go into the.
Speaker 3 (22:05):
Companies that lead us on the higher side, and it's
Apple from a points perspective, we're off well currently up
by one and a quarter percent. We're seeing once again
maybe some feel good factors coming from the EU for
once for this particular name, but it really is your
biggest points contributor. We're now back on the last like
one hundred to where we're training at the beginning of March.
But in video, as I say, is still the worst
on the points downside, We're off by eight tenths of
percent as we're still trying to understand how much they
(22:27):
are going to be able to get their incredibly sophisticated
chips in More broadly around the world. I'm looking at
Tesla though, flitting between gains and losses. Today we have
negative news when it comes to EU sales down forty
percent again from the month of February. However, we saw
a significant rally yesterday up almost eleven percent, so maybe
we just pull back a little bit and a little
(22:48):
bit of profit taking. We're down three tenths toer percent,
but there is so much volatility in this market. Let's
get a broader context for you amid tariff threats and
so much else for big tech. Denise Chisholm is with
US fidelity investments, quantitive marks strategy direct to and you
put such a historical lens, which we need at this
moment because often it feels unprecedented. Take us back to
(23:08):
a sentiment right now and how it makes ultimately the
context of what it was like back in what the
Gulf War. You say, we've never had as much pessimism.
Speaker 11 (23:17):
Yeah, I mean, in some ways we've had a very
cluster of anomalous signals in this tempercent correction. I mean,
obviously this correction has been one of the fastest on record,
but I think the unique part of it was the
decline and sentiment from you know, you can look at
the AAII measure from you know, bullish to bearish. You
can look at the Google trends in terms of recession sentiment.
(23:38):
You can look at a lot of the sentiment indicators,
the defense of rotation we've seen, just the rotation in
international stocks. All of these signals happen less than three
and one percent of the time, and in some ways
much of it has been during war crises or prior recession.
So without a recessionary event, this is incredibly unique. I
think when you look at the signaling perspective and you're
(23:59):
willing to take a media term time horizon of six
to twelve months. All of these extreme signals are usually
contrarian buy signals for the overall market. But the extreme
anomaly this time is that the market isn't really down
a lot as much as we've seen a ten percent correction,
and even over the last six months you can say
it's flat. So to the extent that investors are uniquely
(24:19):
concerned about the fact that, hey, we're seeing google recessionary
trends spiking to recessionary levels to the extent that that
has been the case in history. Should stocks go down
to meet that recessionary sentiment, you actually find the opposite correlation,
meaning the less stocks are down when you are at
(24:39):
these peak recession sentiment levels, usually that's better signals in
terms of a stock market advance in the future. It's
almost like the lack of correction in stocks gets it right,
or that stocks are potentially looked throughing something, looking through something.
So I think that those unique signals in the data
that actually do suggest that opity.
Speaker 3 (25:00):
Okay, so if you are willing to take on the
abrupt fall or two coming going forward, are we nearing
a bottle is bottom. Is that sort of the signal
that you're getting from historical context right now?
Speaker 11 (25:12):
Yeah, I think when you look at it historically, it
doesn't really nail the bottom. In terms of picking bottoms,
I think that the signals that I look at from
a probability perspective or longer term in nature. So when
I look and say you want to look out six
to twelve months and absorb the volatility, I think that
there's opportunities in that. That's less to say that the
bottom was yesterday or today, or maybe even in two
months from now, but it is to say that after
(25:34):
the correction, I think that it might be too late
to be bearished to the extent that you have that
year long time horizon.
Speaker 3 (25:40):
And Denny's what we've seen is a real flip around
in terms of who's outperformed, healthcare dominating even a bit
of financials, but technology has lagged. Is it now that
we start to see people recommit, have fundamentals changed at
the same time as human anxieties and any pessimism across
the border markets.
Speaker 11 (26:00):
Yeah, So back to that defensive rotation. The defensive sectors
in the market, consumer staples, healthcare, the old telecommunications services,
and utilities have outperformed by about eleven hundred basis points.
That again has only happened less than three percent of
the time in history, and you usually see a cyclical
rotation after that, despite the fact that fundamentals may in
(26:21):
fact deteriorate, which is to say that, look, a lot
of that concern around numbers or around the economy has
been somewhat priced in. So I do think that there
are opportunities in technology. I think the intriguing part about
technology is that we've seen really more multiple compression than
we have seen a decline in earning estimates. So once
(26:41):
you're out of that top quartile, when I look back
in history and say, okay, you're out of the top
quartile of relative forward PE or even relative trailing PE,
and you're now into that muddy middle, you usually have
a positive risk reward to the extent that fundamentals continue
to improve.
Speaker 3 (26:56):
And the positive risk reward dominates in any of a
part of technology. Are we still thinking hardware the pix
and shovels where we reallocate or do software, which hasn't
had so much whiplash continue to support too.
Speaker 11 (27:11):
Yeah, So I think software looks the most intriguing in
my data set. So again we have the data going
back to nineteen sixty two, and once you're into that
bottom half of the distribution on any valuation measure, and
software is there. So you're getting in again cheap relative
to usually wear software trades. You usually have a positive
risk reward. Again, you don't have to necessarily be right
(27:32):
on fundamentals because you have above fifty to fifty ydds
of outperformance even if fundamentals tend to deteriorate. This isn't
to say that software is set up to outperform right
this second, but it is to say that it looks
like from a historical context your downside is limited and
to the extent that you have a call option for
future growth, your upside is actually shifting the positive risk reward.
(27:53):
So I think that of the three major subsectors, hardware
software and semiconductor software looks the most intriguing to me.
Speaker 3 (28:00):
A glasshow full kind of a feeling coming from Denise,
We thank you so much, enjoying the show. As always,
dnis Chism of Fidelity Investments, Now I'll invest. Kathy would
actually spoke exclusively with Bloomberg over at the HSBC Global
investors someone in Hong Kong to discuss the global economic outlook.
Let's give the context of how AI can help in
the long term.
Speaker 2 (28:18):
Just take a listen.
Speaker 6 (28:19):
We think the economy is getting hit by a lot
of uncertainty, and I think a lot of people are
scared for their jobs. In the US, anyone involved with
the government, so federal, state, and local or quasi government
in the healthcare and education space. You know, there could
be as much as thirty percent of the labor force
(28:41):
in the United States. And then we've got AI as
another layer of uncertainty. We're seeing middle management teams actually
being let go because of the productivity gains associated with AI.
You know, their bosses can handle more and more and
more over time. So that's another source of uncertainty, but
(29:03):
we think that is going to play out positively longer term.
Technology and breakthroughs in technologies are always associated with new
jobs that we can't even imagine. We're very impressed by
what is going on in China, and of course there
was the Deep Seek moment, which for China, or it
(29:24):
was the equivalent in China for the and the rest
of the world. That chat GPT was in late twenty two.
I think so that was a big wake up call.
And one of the things we learned so interesting is
that yes, they may have done it less expensively, maybe
much less expensively. We're not quite sure about that, but
(29:46):
the algorithm very creative. It had not been created in
the West. This is from China. It is open source.
So now everyone is starting to use it. They say,
we love that idea and we're it. So what we've
also learned and did not know until we started studying
this open source movement here in China is that it
(30:08):
really started a decade ago because a lot of software
providers from the Western world we're not providing their software
to China out of fear of IP theft. So China said, okay,
let's do it ourselves and move open source. I love
open source and I think it's going to create a
(30:28):
lot of competition out there, which when it comes to innovation,
is a very good thing, especially for the end consumer.
Speaker 3 (30:37):
I'll convess Kathy with there. Let's keep talking about competition.
Stick with chatchibt in the impact. For decades, Google dominated
online search, and now Generator AI and the competitiveness coming
from open AI are forcing the company to rethink it's
most well known product. Blue Meg's Julia Love joins us
now today Bloomg's big take, and Elizabeth Read is a
(31:00):
Google veteran that you really shine a light on in
your Bloomberg BusinessWeek story because she's now got some big
overhauls to do and she's doing them.
Speaker 12 (31:09):
Yes, so Liz Read is a fascinating rising star within
doodle She is now in the top job leading doodle Search.
And she came to this role from the Maps division.
That's where she spent most of her career. And so
while she knew searched very well, she was a little
bit less wedded to some of the traditional ways of
(31:32):
doing things, and she brought a more experimental spirit that
has been really crucial in this new age when so
many of the basics about search are being challenged.
Speaker 3 (31:43):
And here comes AI overviews for example. Now, just go
back in history a little bit and talk about why
there was a lack of well real innovation on the
product side of things. Why were people curtailed from upending
what we all knew and understood in terms of the
blue links.
Speaker 12 (32:02):
Yes, with our reporting, we actually unearthed some new examples
of how doodle search employees were pushing to roll out
generative AI and search well before the launch of chat GPT,
but they faced a lot of resistance. I think there
was a lot of self regulation happening that Doodlers just
weren't inclined to challenge the company's fundamental business model. Executives
(32:28):
were also concerned about whether the technology could deliver the
necessary level of accuracy because people just hold Doodle to
such a high bar, a much higher bar than a
startup would be held too.
Speaker 3 (32:40):
And there's the frustration that actually their transformers innovation is
then used by someone else. But the question is monetization.
Have they really got to the bottom of that, because
many a warrant. What about the ads that you can
put into an AI overview?
Speaker 12 (32:53):
Yes, I think that remains the big question. Doodle has
incorporated ads into AI over views and so far their
search market share is pretty much unchanged, but there are
some concerns among analysts that growth in search will begin
to level off, and in the meantime, Goodle's embrace of
(33:15):
generative artificial intelligence is raising huge concerns for all of
the publishers who depend on Doodle for traffic.
Speaker 3 (33:22):
It's a fascinating story. Deep read go take it on
with Julia Love.
Speaker 4 (33:27):
We thank you.
Speaker 3 (33:28):
Coming up, US drone makers are battling for a biggest
share with the domestic market. I'll speak with Scudio CEO
about the growth.
Speaker 4 (33:35):
And Chinese competition. That's next. This is Blue Meg Technology.
Speaker 3 (33:51):
The global drone market is dominated by Chinese makers, but
there were growing efforts by US rulemakers, defense strands, and
startups to gain a bigger foothold in markets.
Speaker 4 (34:00):
Including the US domestic.
Speaker 3 (34:02):
One showing US now is Adam Murrie, the CEO of
drone maker Skuydio, and I love a quote that you've
been making saying that basically drones are revolving from toys
to tools to infrastructure. Well, how do you break down
your growth right now in those three contexts.
Speaker 13 (34:19):
So I think we're at a really exciting moment for
the industry where historically drones have been manually flown. You know,
if you're using it for work, you send an operator
out in the field to fly the drone, and people
have done all kinds of amazing things and that kind
of operating paradigm. But the big shift that we're seeing
now is you can put the drone in a docking station.
It can be flown remotely and autonomously. It basically becomes
(34:40):
a fully autonomous robotic system. And the impact and the
use cases that you unlock when you do that are
just incredible. So one of the areas where we're seeing
this accelerate the most is in public safety, where you
could put drones in docking stations and they can autonomously
fly out in response to nine one one calls and
just fundamentally change the outcome because they can get there
in a few seconds. They give the responding officers better
(35:01):
situational awareness. And you know, I think we're at the
beginning of this just entirely new chapter drones is infrastructure.
Speaker 3 (35:09):
Talk to us about the chapter of US versus Chinese
main drones in this police and fire department demand. How
much are you now able to fulfill it?
Speaker 13 (35:21):
So there's interesting historical context here. So if you think
about what a drone is, at its core, it's basically
consumer electronics combined with a radio control airplane a radio
control helicopter. That's the origin of the industry, and historically
both those things have been made in China, and so
the Chinese companies really got out to a substantial early lead,
especially in the kind of toy market and then the
(35:43):
tools market. You know, we believe very strongly it's critical
that there are strong US companies, strong Western companies that
can provide this technology. I think we're it's still early
days to the industry. It's going to become more and
more important over time.
Speaker 4 (35:55):
You know, we're.
Speaker 13 (35:56):
Installing these things across our cities, across critical infrastructure, and
the risks from a data perspective, from a national security perspective,
from a cybersecurity perspective, are substantial. Our goal is to
build the best products in the world for this new
chapter of drones right here in the US. We made
very big early bets on AI and autonomy when we
started the company ten years ago, and we're now at
(36:17):
the moment where we're starting those to see those payoff.
Speaker 3 (36:20):
Yeah, and talk about the payoff though, because when we
think about what China has done so well, it is
about efficiency. It is about the scale at which they've
been able to streamline production. How are you now managing
to replicate that here in the US.
Speaker 13 (36:35):
So you know, this is not the kind of thing
that's going to happen overnight. The strength of China and
the Chinese companies that we compete with is definitely in
their hardware scale, their cost leverage, you know, the hardware
ecosystem that they're taking advantage of in China. We've been
manufacturing our drones in the US from the beginning. You know,
we didn't start doing this honestly because we thought it
was going to be critical from a national security perspective.
(36:56):
We started doing it because we felt like it was
the best way to build the best product. And we've
gotten to the point now where we ship close to
fifty thousand drones, which is still small relative to our
Chinese competitors, but our market share in the enterprise segments
that we focus on, you know, public safety, critical infrastructure
like energy utilities is substantial, and the more scale we
(37:17):
get up to, the more cost advantages that we get,
I think from a capability standpoint now, just on the hardware,
you know, we've we've gotten to be very competitive with
the Chinese companies, and we have more advance capabilities in
AI and autonomy, so you know, it's it's it's tough
competition for sure. You know, we have the exciting position
of being the US underdog against big Chinese incumbents. But
(37:37):
I feel very good about our position. And I think
especially as these things become more air driven, more autonomous,
more and more the capabilities to find through software that
really plays to our strengths as a country and as
a company.
Speaker 3 (37:49):
Are they becoming ever more supported by the administration. What's
on your wish list?
Speaker 13 (37:54):
Well, look, we're you know, we're a product and technology company.
We're really focused on, you know, on making our products
as useful as they can be. I think that, you know,
looking back now, I think the first Trump administration deserves
a lot of credit for recognizing the nature of competition
with China, the kind of unfair trade practices that they
(38:15):
had been partaking in, and that has now become kind
of mainstream consensus view. I will say with the new administration,
we're very optimistic about seeing a lot of people from
the tech world in there that I think really understand
that technology at a deep level. And you know, it's
still early days, but we're optimistic.
Speaker 3 (38:32):
Skydio CEO Adam Ray, thanks for the optimism and for
joining us. Levittown It's a new six part podcast series
from Bloomberg investigating the rise of deep fake pornography online.
Speaker 4 (38:49):
It tells a story of a group.
Speaker 3 (38:51):
Of young women in a New York City suburb, horrified
to learn that their photographs have been manipulated and posted online,
and how they took matters into their own handsmerg's Margie
Murphy joins us. Now for more, you go back to
twenty twenty. You discuss how female called Kayla in particular,
finds a manipulated photo of herself online.
Speaker 4 (39:11):
But this is a global.
Speaker 3 (39:13):
Story of issues of deep fake pornography.
Speaker 4 (39:15):
But start here in Levittown.
Speaker 2 (39:18):
Absolutely, I mean, we start with Kayla and just to
it's not even Kayla who discovers a seemingly pornographic image
of herself, it's her father.
Speaker 4 (39:28):
And we take you.
Speaker 2 (39:28):
Back into her bedroom when her father comes in, hands
her a phone and says, what is this? And then
we unravel what kind of becomes this horror story that
engofs dozens of women in Leavittown, but they later realize
they're part of this small network, kind of global clearing
house of deep fake pornography, non consensual deep fake pornography,
(39:50):
revenge porn harassment, all connected to one website, which Olivia
and I try to find out more about and meet
lots of investigators, prosecutors, victims all around the world.
Speaker 3 (40:03):
Of course, you've been doing your work with Olivia Carvill
here at Bloomberg and the Story podcast of course based
in twenty twenty and then you wrote up a key
piece in twenty twenty three. But is this all still
an issue that we're currently seeing right?
Speaker 2 (40:17):
So the story that we're covering began in twenty twenty,
we reported on it twenty twenty three, and now twenty
twenty five we've got this podcast coming out. A lot
has changed. The problem has not gone away. We've seen
dozens of school cases where there's been children deep faking
their classmates. We're hearing obviously more about celebrity nonconsensual deep
(40:40):
fake pornography. And this is amidst the kind of rise
of generative AI improvements in technology. And we got a
figure recently from a traffic analysis company that showed that
there was a six hundred percent increase from last year
for newdifying apps. And those apps are the kind of
their like phone apps, that are very easily accessible, and
(41:02):
what they do is you can just screenshot a photo
from someone's social media account, run it through the app,
and minutes you've removed the person in the photos clothes.
So a lot of those apps are involved in these
school cases and those are just completely soaring in popularity,
very cheap and easy to use.
Speaker 3 (41:20):
Briefly, law enforcement is targeting it, the government targeting it.
Speaker 2 (41:26):
It's been a challenge and we've spoken to law enforces, cops, prosecutors,
law makers. Internationally, it's challenging because there are patchwork laws
in different countries, in different states. In the US, they
have different laws. Right now, there is hope that an
actual federal law will be brought into force. It passed
(41:50):
a bill passed through the Senate last month and it
will go through the House this month, hopefully to take
it Down Act, which would put pressure on the platforms
where these images are being shared to take the images
down as quickly as possible and also penalize the piece
for the people posting them.
Speaker 3 (42:10):
The right time to catch your full Big Take podcast
series therefore on Spotify and iHeart, We thank you.
Speaker 4 (42:15):
This is remote technology.
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