July 2, 2025 • 41 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss the drop in Tesla’s second-quarter sales. Plus, Foxconn pulls Chinese workers from India in a blow to Apple. And Microsoft plans a second large round of layoffs as it looks to spend more on artificial intelligence.
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Speaker 1 (00:04):
Bloomberg Tech is alive from coast to coast, with Caroline
Hide in New York and ever though in San Francisco, this.
Speaker 2 (00:15):
Is Bloomberg Tech coming up.
Speaker 3 (00:16):
Tesla's global sales drop in the second quarter, but shares
pop his investors look to a robotaxi future.
Speaker 4 (00:23):
Plus, fox Conn asks hundreds of Chinese engineers to return
home from its iPhone factories in India, a blow to
Apple's manufacturing push in the country.
Speaker 3 (00:33):
A Microsoft to slash another nine thousand staff to streamline
its teams. It's the second major wave of layoffs this year.
Speaker 4 (00:41):
But first we check in on these markets, which the
equity benchmark in tech.
Speaker 5 (00:46):
Then as that one hundred shun it really does manage to.
Speaker 4 (00:48):
Shrug off the cell off we see in the bond
market right here, right now, up five ten percent the
data coming in on US jobs week, But does that
mean that we could see yet further fed stimulus baked
back in this market? We're up sixteen percent as technique
to the charge today ed, let's get.
Speaker 3 (01:05):
Right to Tesla shares up almost four percent off session
highs three hundred and eighty four thousand, one hundred and
twenty two vehicles delivered by Tesla in the second quarter. Now,
technically that came in below consensus, Caroline, However, we did
see expectations get reset in recent days.
Speaker 2 (01:22):
Maybe this came in above.
Speaker 3 (01:24):
The lowest level of expectations. It does leave Tesla with
some work to do in calendar twenty five if it
wants to catch up and have some growth in the year.
Speaker 2 (01:35):
Let's get to it.
Speaker 4 (01:37):
Yeah, let's do that with being most Craigshell Craig, just
how big a hole does Tesla have to climb itself
out of to post any sort of growth for twenty
twenty five.
Speaker 6 (01:49):
It's a big number of about one hundred and ten thousand vehicles,
which for a company of Tesla's size is pretty substantial. This,
this is a pret remarkable move for the shares, just
considering you know, how how low the consensus you know,
estimate for this company is. It's come down really substantially
(02:10):
over over those even just in the last few weeks.
Uh and and just you know, sort of how this
company has been viewed right as one where you know,
it was counted on for so long as as a
growth company, and we've sort of, you know, slowly but
surely very much reset And yet the investor, you know,
(02:30):
bases is willing to stick with this valuation that is
is pretty rich relative not only to other car companies,
but even you know, big tech tech peers.
Speaker 3 (02:42):
So this is global deliveries data. It doesn't distinguish by geography.
It does break out by model line, and of course
Model Y and Model three make up the bulk of
those deliveries. That said Craig, we did get data out
of China for the month of June overnight from the
Chinese consumer a passenger car association. Is there any read
(03:02):
across that you can tell us about that market?
Speaker 6 (03:06):
I think it's maybe consistent with this hope if you're
an investor, that maybe we've hit bottom right where we
saw you know, every month leading up to June, you know,
shipments out of Tesla's factory in Shanghai were down and
to have you know, just the slightest bit of an
increase in June, less than one percent, but still you know,
(03:27):
in the green instead of in the red. You know,
you count that as a win and maybe hope that
this is a matter of a turning point. And we've also,
of course, you know, seen just in the last few
days ed you've reported along with some of our colleagues
that there's been a change in management, right, and so
perhaps there's a sort of you know, bet that the
(03:48):
sort of bottom has been set here. Musk Is is
going to take control of sales in US and Europe,
and maybe that marks a sort of change in the trend.
Speaker 3 (03:58):
Okay, Bloombeck's create who leads our global coverage of the
auto industry out of London. Thank you so much. Let's
get the investor take on Testa sales data and bringing
Gene Monster, managing partner and co founder a deep water
asset management. So we're in this situation, Jane, and you've
written about this a lot right where we almost just
look past the quarterly delivery data if you hold the
(04:19):
bullish fesis that long term, it's a world where Tesla
operates a proprietary robotaxi ride hailing service. Take that and
interpret the data of this morning, please.
Speaker 7 (04:32):
So I think Craig really summed it up about this
shift in investor's psychology and it impacts how we think
about the delivery numbers today. So if we rewind four
years ago, the expectation was about twenty thirty Tesla would
be producing about ten million vehicles per year. They're going
to do about one point seven million this year, and
those expectations now are that they're probably going to do
(04:55):
somewhere between two or three million. And I think that
the consensus numbers today at the core of what's important
is that if they can just stick around like two
million deliveries a year, that would be about ten x
more deliveries than what weimo is going to be putting
on the road for their autonomy. And so this is
(05:16):
not all those of course, two million will go into
a robotaxi fleet, but all of those whill have opportunities
for Tesla to sell this very high margin full self
driving software, whether it's through a one hundred dollars description
a month or through eight thousand dollars up front. And
so ed I think that the context around delivery, of course,
is in relation to what's going on in autonomy. I
(05:38):
do that is the bigger story. You've done a great
job of framing that in today. Do you just want
to make a couple points that are important because investors
do still care about deliveries. A couple important points. First,
as Craig talked about, we're at the bottom here down
fourteen percent deliveries, it's going to be down ten probably
flatish in the December quarter. Something else is that the
(05:58):
sunsetting of these tax it's going to boost the deliveries.
I think that they could could surprise to the upside.
Based on my sensitivity, they probably can be up three
percent in December. The street kind of a flatish, But
any of that good news of this pull forward because
of the sunsetting, the US tax credit will probably be
(06:19):
dismissed by investors. And when you put all this together,
there's just a lot of noise around the delivery number.
And what's most important is what happens in the weeks
ahead in terms of Austin and going to another city
like that is really what this The investment case around
Tesla has boiled down to.
Speaker 4 (06:37):
But Gene the cash cow, the money that's funded all
of the focus on AI and what progresses robotaxi and
autonomous has been the ability to sell cars is two million.
Therefore enough from your perspective going forward to finance this
and could it not be eroded yet further if there's
more withering of brand elon.
Speaker 7 (06:57):
So right now they have thirty seven billion in cash
and equivalents and if they do one point six to
one point seven million cars, they're probably going to burn
and continue to invest in autonomy, invest in new production
of a lower, more affordable vehicle. They're probably going to
end the year somewhere between thirty three and thirty five billion,
(07:19):
this kind of ending. When I say ending the year,
I mean ending the next four quarters. Over the next
four quarters, so you're going to see this decline. So, Caroline,
answer your question is that they've got a ton of
cash and they can weather essentially these lower unit numbers,
and so I think at the core this is a
very different story. Elin and the last call talked about
(07:42):
the number of near death experiences the company has and
that twenty twenty five is going to be a most
difficult year and we're seeing that in these down fourteen
percent numbers today. But he also mentioned that we're not
we don't have this near death experience, and I think
that that just simply puts back to the cash and
another perspective around that cash and the tight spot, if
(08:03):
you will, that Tesla is in right now, is that
if you take a step back and say that the
world is going to be autonomous, whether it's robotics, and
factories or moving people around in vehicles. If you do
take that approach, then these other competitors need to be
making investments. And I think that that is one of
the reasons why Tesla continues to have the support of
(08:23):
investors is these investors look around to what else is
out there, and really no one is doing anything besides
Weimo and some of the things that are going on
with BYD in China. And so the setup, even with
a cash burn over the next four quarters, is still
very favorable in terms of how this story ultimately plays
out for Tesla.
Speaker 2 (08:43):
Gee.
Speaker 3 (08:43):
You know, I was spending a lot of time pouring
over the China data overnight, the Chinese Passenger Car Association data.
They don't distinguish between domestic sales and export, but there
was a return to growth there while the market broadly
across anyv grew.
Speaker 2 (08:59):
What did you get from that?
Speaker 7 (09:01):
Kind of a similar takeaway that Craig had is that
any news is good news. And kind of keep in
mind too, is that China is fiercely competitive. Bu Idea
has made huge leaps forwards, and way we kind of
play that forward is that a comparable Tesla in China
costs about twenty to thirty percent more than a comparable
BYD and that's a similar kind of a split as
(09:23):
buid starts to roll more into Europe. And so when
we look at these numbers, my sense is that, you know,
anything around flatish, it feels like I'm cutting the company
too much slack here. But the reality is is that
if they can maintain kind of this flatish, I think
that's a positive.
Speaker 4 (09:41):
Is it an overwhelming negative?
Speaker 8 (09:43):
Though?
Speaker 4 (09:44):
The arguments going on the feud that re erupted between
Trump and Mask, how much is that an issue?
Speaker 5 (09:51):
Fugiene?
Speaker 7 (09:53):
Well, at the end of the day, what was missing
from Trump's comments was, of course he came to after
the tax credits, he came after what was going on
with government spending and SpaceX. But what was notably missing
was any commentary that he was going to slow down
the adoption of autonomy. And I mean that, of course,
this is what we're talking about. This is the most
important piece. That's the one lever, that's the critical lever
(10:15):
for a Tesla investor, very different for SpaceX, but for
a Tesla investor that they have to look at is
how is this pace of autonomy going to move? And
I think One of the reasons why the White House
did not why President Trump didn't mention that is that
the concept of physical AI, specifically around robotaxis autonomous vehicles,
is going to be a signature example of AI in
(10:38):
the real world that as governments start to be more
competitive around A I just imagine a world where we
have robotaxis going wild from Bid and Baydu in China.
They're also in Europe, and they're not available in the US.
I think that would be a bad look for the
White House. And so when I think about this feud,
I'm entertained by it. I think cooler heads will prevail.
(11:00):
But most importantly, I think that what is going on
around AI and physical AI and autonomy is so much
bigger than any sort of high school feud between Eon
and Trump.
Speaker 3 (11:17):
In a win for chip makers, President Trump's Big Beautiful
Bill passed by the Senate would increase the investment tax
credit for semiconducting manufacturers, rising to thirty five percent if
they break new ground in plants before twenty twenty six.
From more, we go out to DC and bloomberz kdie
Lines Kelly, what do we.
Speaker 9 (11:33):
Know, Well, this is really just expanding an incentive that
already exists thanks to the twenty twenty two Chips Act,
which set this tax credit at twenty five percent. This legislation, though,
assuming it passes, would lift that tax credit to thirty
five percent. There is a time limit as to how
long chip makers manufacturers will have to take advantage of this.
(11:53):
You have to break ground on new plants in the
United States by twenty twenty six, so it is a
limited window here. But what is not limited is actually
the incentive itself. There is no cap on it, so
this very well account for the greatest share of incentives
that any of these individual companies will benefit from. This
is one area in which you are seeing a win
for some technology companies, while other tech companies, of course,
(12:14):
are not getting necessarily what they wanted out of this legislation,
specifically those that operate in the AI space. After the
provision that would have put a moratorium on state regulation
of AI was shot down in the Senate through an
amendment that passed ninety nine to one. All of that said,
this incentive or any other elements of this legislation are
not law yet. Even though it did pass the Senate,
(12:34):
it still has to pass the House. We're going to
get the first test of whether or not that can
really happen later on today when a procedural vote the
so called rule will be brought to the floor. Unclear
at this time whether or not the rule can pass,
paving the way to final passage of the legislation. House
Freedom CACUS members right now are signaling they are not supportive,
but their meeting with President Trump today after meeting with
the Speaker Mike Johnson earlier this morning, so they'll be
(12:57):
trying to convince those holdouts to vote, and that's something
will be one throughout the.
Speaker 4 (13:00):
Day, and Trump's focus is to get this done before
Independence Day July fourth, Kylee, Is there any contention over
the tech elements of it from lawmakers.
Speaker 5 (13:11):
In the House?
Speaker 9 (13:12):
Well, there was plenty of contention over the AI measure specifically,
though that was passed in the House legislation. It was
more of a problem in the Senate where it was
stripped out. It's not clear whether or not that's going
to be a deal breaker for any House lawmaker that
wanted to have that state moratorium in there, but by
and large, the prevailing issues that the holdouts have with
this legislation at this point is simply just the cost
that there's fiscal conservatives who are concerned that the Senate
(13:34):
pass version of this bill adds even more to the
deficit and is not fiscally responsible and doesn't cut enough spending.
And it's on those grounds that they're saying, at least
for right now, they're not in favor of this.
Speaker 5 (13:44):
Piece of legislation.
Speaker 4 (13:47):
Echoing one nail Musket feels like Bloomby's Kaylee lines, Thanks
so much. Turning to Apple now, the company was dealt
a blow from supply of fox Cone after it asked
hundreds of its Chinese staff to return home from its
iPhone trees in India. This is according to people familiar Now.
No reason for the decision was given, but the move
comes in growing tensions between Beijing and India's efforts to
(14:09):
any curb tech exports.
Speaker 5 (14:11):
Right now for more opening buds woman joins us.
Speaker 4 (14:13):
So, basically, China has seen the fact that manufacturing has
been moving outside of China into perhaps Vietnamal indeed India,
and they seem to be trying to curtail it.
Speaker 10 (14:25):
Yes, absolutely so, this move would bring back specialized workers,
which is really one of fox CON's advantages and China's
advantages in being able to produce certain devices that are
key to global markets, including of course, Apple's iPhones. Tim
(14:46):
Cook has said that the reasons for producing iPhones in
China come down not just to reductions and costs, but
also the company specialized labor and specialized equipment that resides
in the country.
Speaker 3 (15:00):
So our sourcing and our reporting told us about the
impact of the assembly lines in India and the iPhones
that are actually made in that market.
Speaker 2 (15:08):
Great question.
Speaker 10 (15:08):
So our reporting, to be clear, doesn't say that production
of iPhones in India will be impossible going forward. We
are reporting also says that the quality of the output
is not necessarily going to be affected, but the efficiency
of the assembly line absolutely is likely to be infected,
and that would have an impact on production costs and
(15:32):
we would assume prices of the final product possibly, which
is something that Bloomberg is reported on extensively already in
the months of this trade war has been going on.
Speaker 3 (15:43):
Right, and those Chinese nationals there were also involved in
the training of other staff.
Speaker 2 (15:47):
Bloombers Dane a Woolman.
Speaker 5 (15:55):
Perplexity.
Speaker 4 (15:57):
Could it be at the center of Apple's latest we've
vamp at the tech Giant looks to use an outside
AI model to revamp Siri. Bluemag has reported that Apple
was eyeing a potential bid for Perplexity, acquiring AI talent
tech potentially here to discuss Dmitri Shivlenko's Perplexity AI chief
business officer, we go in straight to the chase. Dmitri
(16:18):
has Apple been in touch about using your own general
to AI products interweave within.
Speaker 2 (16:23):
SyRI So Perplexity.
Speaker 8 (16:27):
We're focused on building AI that is trustworthy and accurate,
and it's no surprise that leading OEMs around the world
want to make their products better, want to take advantage
of all these new superpowers we have and have the
most trustworthy accurate AI as part of their solution.
Speaker 2 (16:46):
And you know, I wouldn't be good at.
Speaker 8 (16:47):
My job if I went around talking about confidential partner conversations,
but really excited to work closely with all kinds of OEMs,
because trustworthy, accurate AI is going to be a critical
substrate for how we get value out of our devices.
Speaker 4 (17:04):
So what's really interesting is what benchmarks you hold yourself
to if it's all about trust and accuracy, or if
it's about metrics.
Speaker 5 (17:11):
Such as numbers.
Speaker 4 (17:12):
We had of enjoying the Blueberg Tech Summit, but a
month or so ago talking about how the user base
in size has been increasing seven or eighteen million search
queries in just the month of May.
Speaker 5 (17:23):
How are you getting onto hitting a billion.
Speaker 8 (17:27):
We're building a company that we aspire to make generational,
and I think it's important to have the right structural
incentives to earn users trust. Ultimately, the underlying foundation models
are going to get smarter and more powerful. The scarce resource,
(17:48):
the scarce asset, when you project out in the future,
is going to be that trust. And so there's things
we could actually do today to grow faster, monetize quicker
that would actually potentially.
Speaker 2 (17:58):
Erode that trust.
Speaker 8 (18:00):
And so it's striking this right balance of playing the
long game, earning that that that you know, ability to
be trusted over many decades, while you know, really having
our growth be driven by users.
Speaker 2 (18:13):
A lot of the product.
Speaker 8 (18:14):
Most people that use perplexity use it because somebody had
told them they use perplexity, right and Dimitri.
Speaker 3 (18:21):
That's what I reflect on when I think about my interactions.
Speaker 2 (18:23):
With perplexity, if you call it a query or not,
I kind.
Speaker 3 (18:26):
Of think about time spent in the context that like
different to Google, I might make a query and stay
with it over a number of days. Is that kind
of data that you can share with us about how
you see users behaving differently on perplexity?
Speaker 8 (18:42):
Yeah, I mean it's an interesting you know, we both
save people a lot of time, right the time safe
to get knowledge.
Speaker 11 (18:50):
But then once.
Speaker 8 (18:52):
You realize you can acquire knowledge so efficiently and so quickly,
you want to learn more, right, And so our goal
is not to like, you know, have you use perplexity
more hours of the day. We want to empower users
to tap into their curiosity and learn everything they possibly
(19:12):
could want to learn. And so it is there's both
an efficiency metric and then there's kind of expanding that curiosity.
Speaker 2 (19:20):
Dmitri.
Speaker 3 (19:21):
There are reports in May that you're raising more money
at a higher evaluation that Excel the venture firm will
be leading.
Speaker 2 (19:26):
What's the status of that? Please?
Speaker 8 (19:29):
Yeah, we're you know, I won't go get into any
investment specifics, but it is something that makes my job
easier is that vcs and investors tend to be some
of the busiest people in the world, and many of
them love using perplexity, and so oftentimes, you know, when
we speak to investors. They know our product very well.
(19:51):
We have a lot of passionate users, broadly in finance,
because those are sectors where trustworthy, accurate AI. When you're
making million dollars, ten million dollars, hundred million dollars, billion
dollar decisions, that's where you really notice the difference of
a more accurate answer engine, and so that that has
made our ability to grow through capital, you know, more straightforward.
Speaker 4 (20:18):
It feels like vcs are desperate to give you money,
but it also seems as though plenty of other.
Speaker 5 (20:23):
Big tech want to buy into you.
Speaker 4 (20:24):
There's been reports that Meta was trying to buy you,
and indeed Apple you resolute or remaining.
Speaker 5 (20:30):
Independent or would you be bought at the right price. We,
as I.
Speaker 8 (20:35):
Said, are building a generational company, so we think of
the world through the lens of trillions, not billions. We
also think there's incredible value in remaining independent because that's
a key way to preserve that trust with our users,
and so we have no plans to sell the company
(20:56):
and are incredibly excited about, you know, remaining independent for decades.
Speaker 3 (20:59):
To Dmitriy ser Lenko, perplexed, it's great to have you
here on Bloomberg Tech.
Speaker 4 (21:13):
Welcome back to Bloomberg Tech. Let's take a look at
these markets as we see a rally and then as
that one hundred we have close to record his once
again five ten percent on the upside, even though we
see a worldwide bond market sell off. We see that
data coming in from the United States in terms of jobs,
maybe signaling tomorrow non varm payrolls will show us like
weakening in the jobs data and could that mean the
Fed doesn't decut.
Speaker 5 (21:34):
We move on to see what's happening underneath the hood.
Speaker 4 (21:36):
What leads inn Azzac higher is big names such as Nvidio,
but also Apple at one point seven percent, shaking on
anxiety that maybe Fox on its suppliers having to shift
to engineers back to China from India. What does that
mean for a supply chain? Tesla up four percent? Have
we seen the worst in terms of sales declin's ed
We saw those Q two numbers deliveries down thirteen percent,
(21:58):
but the market that braced itself for worse.
Speaker 3 (22:00):
Okay, let's get back to our top story in Tesla,
the EV maker is facing multiple headwinds, and its numbers
tell us that story.
Speaker 2 (22:08):
Stephanie Valdez.
Speaker 3 (22:08):
Street is Director of Industry Insights at Cox Automotive. So
three hundred and eighty four one hundred and twenty two
vehicles in the second quarter. The thing about the data
is it doesn't distinguish by geography, right, there is some
monthly data from different jurisdictions around the world, but like,
go under the hood of the data. What did you
learn from the Prince Stephanie.
Speaker 12 (22:29):
Yeah, you know, I was thinking about we had our
forecast call last last week, and we were forecasting that
Tesla would have a.
Speaker 11 (22:36):
Twenty one percent year over year decline.
Speaker 12 (22:39):
So I think if you look at when the numbers
start coming in, we'll probably see the numbers the next
few days. I think the US we're probably going to
see a larger decline year over year. And once again,
you know, with Tesla, it's all about having the product, right,
They've had no product other than the cybertruck, so they
need a new product. And then just globally, just the
competition from China, whether it's uid Ezeker shall Meet.
Speaker 11 (23:02):
There's lots of competition.
Speaker 12 (23:03):
And then as we all know, with the recent those participation,
Elon has had some polarization both in Europe and the
US markets.
Speaker 11 (23:14):
So I think.
Speaker 12 (23:14):
It's going to be critical for Tesla to rebrand themselves
and really bring some new product. If they can get
that affordable product launch, that could be a game changer
for them.
Speaker 4 (23:26):
Can they rebrand themselves with Elon taking over control of
even more so the US and European sales focus too?
Speaker 5 (23:33):
Is that the right sort of rebranding.
Speaker 12 (23:36):
Yes, I think it's gonna take a lot of work,
right especially in the US, especially in certain parts of
the country. In the US, I think it could be done,
but it's gonna have to be very targeted, very strategic,
and it has to be ongoing. It can't be a
one time thing. But also I think it's all about product,
right with you think about consumers. If you look at
the US market, GM has been rolling out evs the
(23:57):
last couple of years and they're right behind Tesla.
Speaker 11 (24:00):
Eating up market share.
Speaker 12 (24:01):
So I think it goes back to having kind of
that whole strategy as a car company, right their car
company trying to transition into an AI But.
Speaker 11 (24:09):
That car business is all about product and the right
price and the right consumer experience.
Speaker 4 (24:16):
But that consumer experience, that product is technology.
Speaker 5 (24:19):
Technology at it's very hot Stephanie.
Speaker 4 (24:21):
If we think about how China looks as though it's stabilizing,
many may be thinking that it's because of FSD. Actually
the wins back some of the focus in China and
competes against Shaomi with the latest SU seven and competes
against E BYD.
Speaker 5 (24:37):
How important is FSD.
Speaker 12 (24:39):
I think it's critical, especially you think about as Tesla
is trying to become this AI and with their recent
rowotax unveiling and often it was small scale, but it
was very important that they actually did launch when they
said they were And I think it's going to be
important for them to continue to scale. And I know
there's a lot of safety concerns and some regulatory but
(25:02):
I think it's going to be important for them to
continue to innovate on their chips, on their dojo to
really kind of create that competitive molt around AI.
Speaker 2 (25:13):
Stephanie.
Speaker 3 (25:14):
I use full self driving supervised every single day. I
do about sixty miles a day. Tesla's approach is get
in the car and try it, and then you'll see
the future. Where Testera operates as a ride hailing company
with robotaxis, is that sales pitch resonating the jump from
a driver assistant tool to them becoming an uber type player.
Speaker 12 (25:36):
I think it's challenging, and you think about just kind
of when they're a competition. You have Weimo, right, who
has lots of lots of miles, and I think recently
we just hit heard Jim Farley say that he thinks
the Weimo approach is better.
Speaker 11 (25:49):
So I think Tesla has a lot more to prove.
Speaker 12 (25:53):
I think their approach can be effective if they're able
to roll it out and get more miles and overcome
some of the safety and regulatory concerns.
Speaker 3 (26:00):
The idea that Tesla's going to send sell ten million
vehicles here by the end of the decade seems to
have change now, right, But within the data there are
signs that outside of.
Speaker 2 (26:09):
North American Europe they.
Speaker 3 (26:10):
Might be getting traction in new markets. Do you have
any sense of what those new markets are.
Speaker 11 (26:16):
Yeah, I think they're looking at India.
Speaker 12 (26:17):
I think that's another market and some of more of
these other South American countries.
Speaker 11 (26:22):
So I think that's going to be an opportunity for them.
Speaker 12 (26:24):
But to your point, it's going to be critical for
them to look at other options because, as we know,
China is getting to get to that overcapacity, and so
they need to find locations to.
Speaker 11 (26:35):
Export their evs.
Speaker 12 (26:37):
And also, I think with some of the tariffs in
place between US China, I think it's going to be
important for them. And then also to continue to increase
production in Berlin.
Speaker 11 (26:45):
I think that's a smart move as well. I will say, the.
Speaker 12 (26:48):
One thing, you know, we've talked about all the headwinds
Tesla does have, you know, the advantage of having the
vertical integration, and that's what really gives them up in some.
Speaker 11 (26:58):
Of the other US many factures.
Speaker 12 (27:00):
So that's one thing I want to just point out
that's really something important to remember about Tesla.
Speaker 4 (27:07):
Stephanie Valdez Streat, director of Industry Insights, that Cox Automotive
wonderful to have your insights. And look, let's return to
the fact that amid the disappointing sales figures, the recent
drop in share price too has been painful, but Tesla's
market cap still dwarfs other automakers. Bloomberg editor in Chief
emeritus and Bloomberg Opinion columnist Matt Winkler has been writing
(27:28):
about this in his latest column. Basically, how difficult is
it to remember what a juggernaut, what a success story
Tesla is in the face of all the headwinds and
news articles about Elon Musk right now, Matt.
Speaker 13 (27:45):
Pleasure to be with you, and you're quite right. Omitted
from the prevailing narrative, including everything we just heard, is
that Tesla still is the world's largest automaker. It's the
ninth largest public company. It's worth more than the gross
domestic product of Saudi Arabia, and the top ten automakers
(28:09):
are just say, seventy five percent, seventy eight percent maybe
of Tesla's market value, which is more than a trillion dollars.
So that's a really important point to make, which is
amid all of this doom mongering. Why is it that
the people with the most at stake, who are the shareholders,
(28:30):
somehow are missing from everybody's story, including this morning when
the sales were first reported, people thought that was the lead.
The sales are disappointing, and yet the share price is
up the most since June. So what does this share
price tell us? It tells us that Tesla is a
lot more than it's vehicles. It is the autonomous driving,
(28:52):
but it's so many more things other than that. It's robotics,
it's a visionary who wants to get to Mars, and
he's taking every thing he's got, which is artificial intelligence,
and applying it to his products. And the shareholders see
that because the shareholders are constantly looking at the future,
not at the past. And one thing I would say
about the vehicles. Everybody thinks there's a demand problem, but
(29:15):
the Model Why was actually refurbished if you like this year,
which counted for some of the production slippage. The sales
are way up in Norway, they're way up in Spain,
so the prevailing narrative really doesn't cut much there. And
the Model Why We Forget was the best selling vehicle
(29:39):
in twenty twenty three in the world, the best selling
vehicle in twenty twenty four in the world, looks like
it's going to be the best selling ed vehicle in
twenty twenty five. So those are all things that are
missing from the narrative that you've been sharing so far.
Speaker 3 (29:56):
Matt. You point out in your opinion piece that, by
Tesla's own description, it's a full stack technology company. I've
written a lot about that as well. And the most
bullish names on the street on the cell side, their
valuations are predicated on this vision of Robotaxi and Optimus.
But in the here and now the sales are driven
by the sale of cars to consumers. When does the
(30:18):
inflection point come where revenues are derived largely from software?
Speaker 2 (30:23):
Well, I would a party right.
Speaker 13 (30:25):
Attention to the share price, because you know what motivated
my colleague Chinpai and I to produce this piece is
all through this year, headline after headline, story after story
from everywhere was as we said, bad to worse, and
yet through it all, everybody is omitting the great parenthetical clause,
(30:46):
which is Tesla is still worth more than the ten competitors,
biggest competitors combined. Why is it that Toyota's valuation is
a fourth of what Tesla is? Why is the general
motors which you referenced earlier in this program is just
fifty billion dollars and Tesla's are trillion dollars. And the
(31:07):
answer is there's a lot more to Tesla that people
are not looking at, and the best place to go
is the share price, because the share price tells you
what the relative value of Tesla is.
Speaker 3 (31:17):
Every single day Bloomberg Opinions and Bloomberg's Editor in Chief
Emeritus Matt Winkler.
Speaker 2 (31:23):
Great to have you back on the show. Thank you
so much.
Speaker 3 (31:27):
This is Bloomberg Tech and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can buy it on the terminal as well as
online on Apple, Spotify and iHeart.
Speaker 2 (31:37):
This is Bloomberg.
Speaker 3 (31:48):
Cloud based design platform Figma has filed to go public.
It could be one of the year's biggest initial public offerings.
I want to go right to Bloomberg's Katie Ruth. You've
been tracking this one. Let's get into all the details,
like what do we know about the ticker, where it
will be listed, and just like me last night, I'm
sure you pulled through the entire regulatory filing.
Speaker 2 (32:06):
What do we know?
Speaker 5 (32:08):
Sure?
Speaker 14 (32:08):
Yeah, So their ticker is fig fig. They're going to
be on the New York Stock Exchange and sources tell
me they're aiming to go to debut later this month.
Speaker 5 (32:19):
You know, this is a long time coming.
Speaker 14 (32:21):
They almost got bought by Adobe in twenty twenty two,
and then that didn't happen, so they went theo IPO
rout instead.
Speaker 4 (32:30):
And there is the context that they were almost bought
by Adobe, but they managed to keep eye on the prize,
keep growing the business independently. Where do we stand in
terms of the growth of this company?
Speaker 14 (32:40):
Sure, and they recently turned a profit, so they have
growing revenue and now profit. You know, I think they're
trying to make themselves seem.
Speaker 5 (32:51):
Like they're AI related.
Speaker 14 (32:52):
They recently launched an AI related product. But you know,
they have a lot of design clients and then they
have a lot of non professional designers using their product,
you know, a lot of them outside of the US,
all around the world, and they're hoping, you know, that
this will the IPO will continue to raise their profile
(33:14):
with consumers.
Speaker 4 (33:17):
Most Katie roof all Things IPO for this summer, we
appreciate it. Now from public markets to increasing investment on
the private side.
Speaker 5 (33:24):
Menture firm AXL.
Speaker 4 (33:26):
Has led an unusually large Series A funding round for
the startup Campfi, now the AI native enterprise software firm,
recently close to thirty five million dollar financing round. Axcel
partner Christine Esman is here with us to talk it through.
This is largely I mean surprisingly large for a Series A,
but I feel like our numbers have gone all out
to whack the minute. General to AI came into the playbook. Christine,
(33:48):
why have you backed campfi?
Speaker 11 (33:51):
Yeah, well thanks for having me.
Speaker 15 (33:52):
I'm so excited to tell you more about campfire, meetcamfire
dot com. Campfire is an AI native ERP solution that
replaces companies like net suite and quick Books. It's tackling
the super large ERP markets, one of the largest markets
in software with over a trillion dollars of market cap,
and Campfires is coming to market with a really.
Speaker 3 (34:12):
Fresh approach to the uninitiated ERP enterprise resource planning, which,
when you say it in full, is not as exciting.
Speaker 2 (34:21):
Why is it exciting, It's super excited.
Speaker 15 (34:25):
It's super exciting. I mean, think about the incumbents.
Speaker 5 (34:28):
In this space.
Speaker 15 (34:28):
You have companies like Oracle and into It and SAP
that have dominated this category for decades. At this point,
all of those companies were founded decades ago in the.
Speaker 11 (34:39):
Pre AI world.
Speaker 15 (34:41):
And when you're actually a user of these solutions, they
take months to implement, they require consultants, and post implementation,
they don't really deliver an enjoyable solution for any users who.
Speaker 11 (34:54):
Are using those solutions.
Speaker 15 (34:56):
And Campfires is taking just a really fresh approach. Maybe
get a little bit more tangible. Think of you as
a finance leader and you're trying to do something routine
like forecast your cash in January, and that might require
multiple people, manual data entry and all that. Using Campfire,
you can flip this model on its head, and camp
(35:18):
Fire enables the user to use natural language to just
do this and automatically see the insights.
Speaker 3 (35:25):
Christine, the company itself and the people that company are
super interesting right led by John Glasgow, And I was
reading earlier in the Week that it's one of these
companies that from inception moved very fast. You know, within
nine months or so it had all of this business,
and there's evidence that business is being one from some
sort of more established scale players. Can you just give
us some of the data behind what gave you the
(35:47):
conviction to back them?
Speaker 2 (35:49):
Definitely.
Speaker 15 (35:50):
I mean, in less than two years, this company has
shipped a fully functioning ERP solution, which is just nothing
short of remarkable. They have over a dozen companies that
have moved from Sweek completely, over one hundred that have
moved from QuickBooks, and that's just absolutely exceptionable, exceptional for
the stage.
Speaker 11 (36:06):
Of company that they're at. They're also supporting some pretty
large companies.
Speaker 15 (36:11):
I mean Rutler is what example, They just announced that
they crossed one hundred million of arr publicly and they're
relying on campfires as their ERP.
Speaker 5 (36:21):
Can I switch to large companies?
Speaker 4 (36:23):
And actually, Christine, of course we know you for late
stage investment as well as these mighty series A round.
Speaker 5 (36:29):
That you've just delivered to Campfire. We just had Perplexity on.
Speaker 4 (36:33):
We just had Dimitri from Perplexity on and I'm hearing
we've all seen the reports that accels involved in a
new funding round for the business.
Speaker 5 (36:39):
Can you talk about it as to whether you are
looking at the business.
Speaker 15 (36:43):
Yeah, I won't comment on some of our unannounced investments,
but I think as a firm, we're incredibly bullish on AI.
We were the first investors in Scale AI, and obviously
Alex Wing has had a lot of news recently and
we think super highly of that company, and we can
and you to think super highly of the future successive
of Scale. We feel super fortunate to have invested in
(37:06):
Perplexity in companies like Superbase and Graphite and Cursor and
other AI companies that.
Speaker 11 (37:11):
Are really defining the next wave of technology.
Speaker 4 (37:15):
Talk to us though about these rather interesting aquahiers shall
we call them, because we're seeing it time and time
again in the Generator AI space. Is that a win
for you when you see Scale AI lose its key founder,
continuous different business, stripped of certain perhaps future business lines.
Or is that given the scale of the investment that
(37:36):
a Meta makes or that others have made in certain
aquahis is that nothing but a good thing from your perspective?
Speaker 15 (37:42):
Yeah, Well, Meta made an investment in Scale and the
company will remain independent and will continue to go on.
They have incredible privacy regulations in place and a number
of really phenomenal customers that will continue using Scale, and
I'm just excited to see what the future has in
store for Scale.
Speaker 3 (38:00):
Christine Estamon, Excel partner. It's great to have you here
on Bloomberg Tech.
Speaker 2 (38:04):
Thank you very much.
Speaker 4 (38:05):
Warner Music it is launching a three hundred million dollar
cost savings drive in order to free up funds for
growth initiatives, and the plan will rezelt though in an
unspecified number of job cuts, according to a regulatory filing. Now,
the company says almost two thirds of the savings will
(38:26):
be achieved through job cuts, with the rest coming from
organizational changes and overhead savings.
Speaker 15 (38:31):
Ed.
Speaker 3 (38:33):
Microsoft has initiated its second major wave of job cuts
this year, laying off about nine thousand workers.
Speaker 2 (38:39):
This is the company looks to raining costs.
Speaker 3 (38:41):
According to a spokesperson, less than four percent of the
total workforce will be impacted. Bloomberg's Brody Ford joins us
with the details. So second wave and the rational is
also pretty clear. Get rid of middle layers of management,
streamlined teams. Give us the size and scope.
Speaker 16 (38:56):
Size and scope is that you know, you here four
three percent a couple months ago. It doesn't sound like
that much, but with Microsoft, I mean these are huge
numbers of employees. We have fifteen thousand people impacted across
two waves, and there's been other little cuts in addition
to that. And you know, folks might say Microsoft the
world's most valuable company. A lot of days, ninety six
(39:17):
billion in profit, Why are they doing all this? A
lot of it's that AI spending. Right one day, you're
spending eighty billion on AI data centers, and you want
to keep your margins flat. In this case, that's led
to some cut heads.
Speaker 4 (39:32):
And Brody the view has been, actually, the AI is
getting so good that it means that they can start
getting one of engineers AI is doing the job of them,
But is that really where the cuts come from this
time round.
Speaker 16 (39:44):
I haven't seen a ton of evidence that there's that
kind of direct employee replacement, but I think companies certainly
want to do it, right. I mean, a vendor like Microsoft,
it is selling it software, telling people, hey, you can
do more with less. I think we'd be naive to
think they aren't also a to do that. Internally. We
saw at the layoffs a couple of months ago disproportionately
(40:04):
hit software engineers right, and.
Speaker 3 (40:07):
The Microsoft spokesperson told us that in this round it
will be across teams and geographies, but we know from
our reporting largely witch divisions.
Speaker 2 (40:15):
I'm thinking like Xbox sales and marketing.
Speaker 16 (40:18):
Correct sales and marketing are the really big ones right now,
and that's because it's the end of the fiscal year
and you generally don't want to fire salespeople the fourth
quarter because you're not going to get the results you want.
And so yeah, we're seeing cuts today that I have
reason to believe our focus on those sales employees, but
really cuts across the company, and I think it underscores
the kind of new reality of the tech market that
(40:40):
even if you are in one of the most successful companies,
jobs aren't safe the way they used to be.
Speaker 4 (40:46):
Ready for telling it straight, We appreciate it.
Speaker 5 (40:48):
Thank you.
Speaker 4 (40:50):
Let's turn now to some of our other key top
stories today, ed and we've been all over the moves
when it comes to Apple potentially seeing those Chinese engineers
that Fox gone and senter in having to go back home.
What does that mean for the supply chain? But Tesla
front and center. You're the man who helps break scoop
after scoop, we're up four percent because well, the deliveries
were bad, but not as bad as.
Speaker 3 (41:10):
We're expected, right, deliveries technically misconsensus estimates, but actually the
sort of lowest range of the estimates that exceeded, you know,
expectations really reset. But I think, as Gene Monster told
us and Bloomberg Opinions Matt Winkler, look past the deliveries
and think about Tesla as a technology company.
Speaker 4 (41:28):
I mean, while that's what we do right here, the technology,
and that does it for this edition of Bloomberg Tech, so.
Speaker 2 (41:33):
Much to recap. Don't forget the podcast. You know where
to find it. It's on the Bloomberg terminal.
Speaker 3 (41:37):
It's online, on apples, Spotify, and on iHeart from San
Francisco and Caroline's out in London.
Speaker 2 (41:43):
This is Bloomberg tech.
Bloomberg Tech is alive from coast to coast, with Caroline
Hide in New York and ever though in San Francisco, this.
Speaker 2 (00:15):
Is Bloomberg Tech coming up.
Speaker 3 (00:16):
Tesla's global sales drop in the second quarter, but shares
pop his investors look to a robotaxi future.
Speaker 4 (00:23):
Plus, fox Conn asks hundreds of Chinese engineers to return
home from its iPhone factories in India, a blow to
Apple's manufacturing push in the country.
Speaker 3 (00:33):
A Microsoft to slash another nine thousand staff to streamline
its teams. It's the second major wave of layoffs this year.
Speaker 4 (00:41):
But first we check in on these markets, which the
equity benchmark in tech.
Speaker 5 (00:46):
Then as that one hundred shun it really does manage to.
Speaker 4 (00:48):
Shrug off the cell off we see in the bond
market right here, right now, up five ten percent the
data coming in on US jobs week, But does that
mean that we could see yet further fed stimulus baked
back in this market? We're up sixteen percent as technique
to the charge today ed, let's get.
Speaker 3 (01:05):
Right to Tesla shares up almost four percent off session
highs three hundred and eighty four thousand, one hundred and
twenty two vehicles delivered by Tesla in the second quarter. Now,
technically that came in below consensus, Caroline, However, we did
see expectations get reset in recent days.
Speaker 2 (01:22):
Maybe this came in above.
Speaker 3 (01:24):
The lowest level of expectations. It does leave Tesla with
some work to do in calendar twenty five if it
wants to catch up and have some growth in the year.
Speaker 2 (01:35):
Let's get to it.
Speaker 4 (01:37):
Yeah, let's do that with being most Craigshell Craig, just
how big a hole does Tesla have to climb itself
out of to post any sort of growth for twenty
twenty five.
Speaker 6 (01:49):
It's a big number of about one hundred and ten thousand vehicles,
which for a company of Tesla's size is pretty substantial. This,
this is a pret remarkable move for the shares, just
considering you know, how how low the consensus you know,
estimate for this company is. It's come down really substantially
(02:10):
over over those even just in the last few weeks.
Uh and and just you know, sort of how this
company has been viewed right as one where you know,
it was counted on for so long as as a
growth company, and we've sort of, you know, slowly but
surely very much reset And yet the investor, you know,
(02:30):
bases is willing to stick with this valuation that is
is pretty rich relative not only to other car companies,
but even you know, big tech tech peers.
Speaker 3 (02:42):
So this is global deliveries data. It doesn't distinguish by geography.
It does break out by model line, and of course
Model Y and Model three make up the bulk of
those deliveries. That said Craig, we did get data out
of China for the month of June overnight from the
Chinese consumer a passenger car association. Is there any read
(03:02):
across that you can tell us about that market?
Speaker 6 (03:06):
I think it's maybe consistent with this hope if you're
an investor, that maybe we've hit bottom right where we
saw you know, every month leading up to June, you know,
shipments out of Tesla's factory in Shanghai were down and
to have you know, just the slightest bit of an
increase in June, less than one percent, but still you know,
(03:27):
in the green instead of in the red. You know,
you count that as a win and maybe hope that
this is a matter of a turning point. And we've also,
of course, you know, seen just in the last few
days ed you've reported along with some of our colleagues
that there's been a change in management, right, and so
perhaps there's a sort of you know, bet that the
(03:48):
sort of bottom has been set here. Musk Is is
going to take control of sales in US and Europe,
and maybe that marks a sort of change in the trend.
Speaker 3 (03:58):
Okay, Bloombeck's create who leads our global coverage of the
auto industry out of London. Thank you so much. Let's
get the investor take on Testa sales data and bringing
Gene Monster, managing partner and co founder a deep water
asset management. So we're in this situation, Jane, and you've
written about this a lot right where we almost just
look past the quarterly delivery data if you hold the
(04:19):
bullish fesis that long term, it's a world where Tesla
operates a proprietary robotaxi ride hailing service. Take that and
interpret the data of this morning, please.
Speaker 7 (04:32):
So I think Craig really summed it up about this
shift in investor's psychology and it impacts how we think
about the delivery numbers today. So if we rewind four
years ago, the expectation was about twenty thirty Tesla would
be producing about ten million vehicles per year. They're going
to do about one point seven million this year, and
those expectations now are that they're probably going to do
(04:55):
somewhere between two or three million. And I think that
the consensus numbers today at the core of what's important
is that if they can just stick around like two
million deliveries a year, that would be about ten x
more deliveries than what weimo is going to be putting
on the road for their autonomy. And so this is
(05:16):
not all those of course, two million will go into
a robotaxi fleet, but all of those whill have opportunities
for Tesla to sell this very high margin full self
driving software, whether it's through a one hundred dollars description
a month or through eight thousand dollars up front. And
so ed I think that the context around delivery, of course,
is in relation to what's going on in autonomy. I
(05:38):
do that is the bigger story. You've done a great
job of framing that in today. Do you just want
to make a couple points that are important because investors
do still care about deliveries. A couple important points. First,
as Craig talked about, we're at the bottom here down
fourteen percent deliveries, it's going to be down ten probably
flatish in the December quarter. Something else is that the
(05:58):
sunsetting of these tax it's going to boost the deliveries.
I think that they could could surprise to the upside.
Based on my sensitivity, they probably can be up three
percent in December. The street kind of a flatish, But
any of that good news of this pull forward because
of the sunsetting, the US tax credit will probably be
(06:19):
dismissed by investors. And when you put all this together,
there's just a lot of noise around the delivery number.
And what's most important is what happens in the weeks
ahead in terms of Austin and going to another city
like that is really what this The investment case around
Tesla has boiled down to.
Speaker 4 (06:37):
But Gene the cash cow, the money that's funded all
of the focus on AI and what progresses robotaxi and
autonomous has been the ability to sell cars is two million.
Therefore enough from your perspective going forward to finance this
and could it not be eroded yet further if there's
more withering of brand elon.
Speaker 7 (06:57):
So right now they have thirty seven billion in cash
and equivalents and if they do one point six to
one point seven million cars, they're probably going to burn
and continue to invest in autonomy, invest in new production
of a lower, more affordable vehicle. They're probably going to
end the year somewhere between thirty three and thirty five billion,
(07:19):
this kind of ending. When I say ending the year,
I mean ending the next four quarters. Over the next
four quarters, so you're going to see this decline. So, Caroline,
answer your question is that they've got a ton of
cash and they can weather essentially these lower unit numbers,
and so I think at the core this is a
very different story. Elin and the last call talked about
(07:42):
the number of near death experiences the company has and
that twenty twenty five is going to be a most
difficult year and we're seeing that in these down fourteen
percent numbers today. But he also mentioned that we're not
we don't have this near death experience, and I think
that that just simply puts back to the cash and
another perspective around that cash and the tight spot, if
(08:03):
you will, that Tesla is in right now, is that
if you take a step back and say that the
world is going to be autonomous, whether it's robotics, and
factories or moving people around in vehicles. If you do
take that approach, then these other competitors need to be
making investments. And I think that that is one of
the reasons why Tesla continues to have the support of
(08:23):
investors is these investors look around to what else is
out there, and really no one is doing anything besides
Weimo and some of the things that are going on
with BYD in China. And so the setup, even with
a cash burn over the next four quarters, is still
very favorable in terms of how this story ultimately plays
out for Tesla.
Speaker 2 (08:43):
Gee.
Speaker 3 (08:43):
You know, I was spending a lot of time pouring
over the China data overnight, the Chinese Passenger Car Association data.
They don't distinguish between domestic sales and export, but there
was a return to growth there while the market broadly
across anyv grew.
Speaker 2 (08:59):
What did you get from that?
Speaker 7 (09:01):
Kind of a similar takeaway that Craig had is that
any news is good news. And kind of keep in
mind too, is that China is fiercely competitive. Bu Idea
has made huge leaps forwards, and way we kind of
play that forward is that a comparable Tesla in China
costs about twenty to thirty percent more than a comparable
BYD and that's a similar kind of a split as
(09:23):
buid starts to roll more into Europe. And so when
we look at these numbers, my sense is that, you know,
anything around flatish, it feels like I'm cutting the company
too much slack here. But the reality is is that
if they can maintain kind of this flatish, I think
that's a positive.
Speaker 4 (09:41):
Is it an overwhelming negative?
Speaker 8 (09:43):
Though?
Speaker 4 (09:44):
The arguments going on the feud that re erupted between
Trump and Mask, how much is that an issue?
Speaker 5 (09:51):
Fugiene?
Speaker 7 (09:53):
Well, at the end of the day, what was missing
from Trump's comments was, of course he came to after
the tax credits, he came after what was going on
with government spending and SpaceX. But what was notably missing
was any commentary that he was going to slow down
the adoption of autonomy. And I mean that, of course,
this is what we're talking about. This is the most
important piece. That's the one lever, that's the critical lever
(10:15):
for a Tesla investor, very different for SpaceX, but for
a Tesla investor that they have to look at is
how is this pace of autonomy going to move? And
I think One of the reasons why the White House
did not why President Trump didn't mention that is that
the concept of physical AI, specifically around robotaxis autonomous vehicles,
is going to be a signature example of AI in
(10:38):
the real world that as governments start to be more
competitive around A I just imagine a world where we
have robotaxis going wild from Bid and Baydu in China.
They're also in Europe, and they're not available in the US.
I think that would be a bad look for the
White House. And so when I think about this feud,
I'm entertained by it. I think cooler heads will prevail.
(11:00):
But most importantly, I think that what is going on
around AI and physical AI and autonomy is so much
bigger than any sort of high school feud between Eon
and Trump.
Speaker 3 (11:17):
In a win for chip makers, President Trump's Big Beautiful
Bill passed by the Senate would increase the investment tax
credit for semiconducting manufacturers, rising to thirty five percent if
they break new ground in plants before twenty twenty six.
From more, we go out to DC and bloomberz kdie
Lines Kelly, what do we.
Speaker 9 (11:33):
Know, Well, this is really just expanding an incentive that
already exists thanks to the twenty twenty two Chips Act,
which set this tax credit at twenty five percent. This legislation, though,
assuming it passes, would lift that tax credit to thirty
five percent. There is a time limit as to how
long chip makers manufacturers will have to take advantage of this.
(11:53):
You have to break ground on new plants in the
United States by twenty twenty six, so it is a
limited window here. But what is not limited is actually
the incentive itself. There is no cap on it, so
this very well account for the greatest share of incentives
that any of these individual companies will benefit from. This
is one area in which you are seeing a win
for some technology companies, while other tech companies, of course,
(12:14):
are not getting necessarily what they wanted out of this legislation,
specifically those that operate in the AI space. After the
provision that would have put a moratorium on state regulation
of AI was shot down in the Senate through an
amendment that passed ninety nine to one. All of that said,
this incentive or any other elements of this legislation are
not law yet. Even though it did pass the Senate,
(12:34):
it still has to pass the House. We're going to
get the first test of whether or not that can
really happen later on today when a procedural vote the
so called rule will be brought to the floor. Unclear
at this time whether or not the rule can pass,
paving the way to final passage of the legislation. House
Freedom CACUS members right now are signaling they are not supportive,
but their meeting with President Trump today after meeting with
the Speaker Mike Johnson earlier this morning, so they'll be
(12:57):
trying to convince those holdouts to vote, and that's something
will be one throughout the.
Speaker 4 (13:00):
Day, and Trump's focus is to get this done before
Independence Day July fourth, Kylee, Is there any contention over
the tech elements of it from lawmakers.
Speaker 5 (13:11):
In the House?
Speaker 9 (13:12):
Well, there was plenty of contention over the AI measure specifically,
though that was passed in the House legislation. It was
more of a problem in the Senate where it was
stripped out. It's not clear whether or not that's going
to be a deal breaker for any House lawmaker that
wanted to have that state moratorium in there, but by
and large, the prevailing issues that the holdouts have with
this legislation at this point is simply just the cost
that there's fiscal conservatives who are concerned that the Senate
(13:34):
pass version of this bill adds even more to the
deficit and is not fiscally responsible and doesn't cut enough spending.
And it's on those grounds that they're saying, at least
for right now, they're not in favor of this.
Speaker 5 (13:44):
Piece of legislation.
Speaker 4 (13:47):
Echoing one nail Musket feels like Bloomby's Kaylee lines, Thanks
so much. Turning to Apple now, the company was dealt
a blow from supply of fox Cone after it asked
hundreds of its Chinese staff to return home from its
iPhone trees in India. This is according to people familiar Now.
No reason for the decision was given, but the move
comes in growing tensions between Beijing and India's efforts to
(14:09):
any curb tech exports.
Speaker 5 (14:11):
Right now for more opening buds woman joins us.
Speaker 4 (14:13):
So, basically, China has seen the fact that manufacturing has
been moving outside of China into perhaps Vietnamal indeed India,
and they seem to be trying to curtail it.
Speaker 10 (14:25):
Yes, absolutely so, this move would bring back specialized workers,
which is really one of fox CON's advantages and China's
advantages in being able to produce certain devices that are
key to global markets, including of course, Apple's iPhones. Tim
(14:46):
Cook has said that the reasons for producing iPhones in
China come down not just to reductions and costs, but
also the company specialized labor and specialized equipment that resides
in the country.
Speaker 3 (15:00):
So our sourcing and our reporting told us about the
impact of the assembly lines in India and the iPhones
that are actually made in that market.
Speaker 2 (15:08):
Great question.
Speaker 10 (15:08):
So our reporting, to be clear, doesn't say that production
of iPhones in India will be impossible going forward. We
are reporting also says that the quality of the output
is not necessarily going to be affected, but the efficiency
of the assembly line absolutely is likely to be infected,
and that would have an impact on production costs and
(15:32):
we would assume prices of the final product possibly, which
is something that Bloomberg is reported on extensively already in
the months of this trade war has been going on.
Speaker 3 (15:43):
Right, and those Chinese nationals there were also involved in
the training of other staff.
Speaker 2 (15:47):
Bloombers Dane a Woolman.
Speaker 5 (15:55):
Perplexity.
Speaker 4 (15:57):
Could it be at the center of Apple's latest we've
vamp at the tech Giant looks to use an outside
AI model to revamp Siri. Bluemag has reported that Apple
was eyeing a potential bid for Perplexity, acquiring AI talent
tech potentially here to discuss Dmitri Shivlenko's Perplexity AI chief
business officer, we go in straight to the chase. Dmitri
(16:18):
has Apple been in touch about using your own general
to AI products interweave within.
Speaker 2 (16:23):
SyRI So Perplexity.
Speaker 8 (16:27):
We're focused on building AI that is trustworthy and accurate,
and it's no surprise that leading OEMs around the world
want to make their products better, want to take advantage
of all these new superpowers we have and have the
most trustworthy accurate AI as part of their solution.
Speaker 2 (16:46):
And you know, I wouldn't be good at.
Speaker 8 (16:47):
My job if I went around talking about confidential partner conversations,
but really excited to work closely with all kinds of OEMs,
because trustworthy, accurate AI is going to be a critical
substrate for how we get value out of our devices.
Speaker 4 (17:04):
So what's really interesting is what benchmarks you hold yourself
to if it's all about trust and accuracy, or if
it's about metrics.
Speaker 5 (17:11):
Such as numbers.
Speaker 4 (17:12):
We had of enjoying the Blueberg Tech Summit, but a
month or so ago talking about how the user base
in size has been increasing seven or eighteen million search
queries in just the month of May.
Speaker 5 (17:23):
How are you getting onto hitting a billion.
Speaker 8 (17:27):
We're building a company that we aspire to make generational,
and I think it's important to have the right structural
incentives to earn users trust. Ultimately, the underlying foundation models
are going to get smarter and more powerful. The scarce resource,
(17:48):
the scarce asset, when you project out in the future,
is going to be that trust. And so there's things
we could actually do today to grow faster, monetize quicker
that would actually potentially.
Speaker 2 (17:58):
Erode that trust.
Speaker 8 (18:00):
And so it's striking this right balance of playing the
long game, earning that that that you know, ability to
be trusted over many decades, while you know, really having
our growth be driven by users.
Speaker 2 (18:13):
A lot of the product.
Speaker 8 (18:14):
Most people that use perplexity use it because somebody had
told them they use perplexity, right and Dimitri.
Speaker 3 (18:21):
That's what I reflect on when I think about my interactions.
Speaker 2 (18:23):
With perplexity, if you call it a query or not,
I kind.
Speaker 3 (18:26):
Of think about time spent in the context that like
different to Google, I might make a query and stay
with it over a number of days. Is that kind
of data that you can share with us about how
you see users behaving differently on perplexity?
Speaker 8 (18:42):
Yeah, I mean it's an interesting you know, we both
save people a lot of time, right the time safe
to get knowledge.
Speaker 11 (18:50):
But then once.
Speaker 8 (18:52):
You realize you can acquire knowledge so efficiently and so quickly,
you want to learn more, right, And so our goal
is not to like, you know, have you use perplexity
more hours of the day. We want to empower users
to tap into their curiosity and learn everything they possibly
(19:12):
could want to learn. And so it is there's both
an efficiency metric and then there's kind of expanding that curiosity.
Speaker 2 (19:20):
Dmitri.
Speaker 3 (19:21):
There are reports in May that you're raising more money
at a higher evaluation that Excel the venture firm will
be leading.
Speaker 2 (19:26):
What's the status of that? Please?
Speaker 8 (19:29):
Yeah, we're you know, I won't go get into any
investment specifics, but it is something that makes my job
easier is that vcs and investors tend to be some
of the busiest people in the world, and many of
them love using perplexity, and so oftentimes, you know, when
we speak to investors. They know our product very well.
(19:51):
We have a lot of passionate users, broadly in finance,
because those are sectors where trustworthy, accurate AI. When you're
making million dollars, ten million dollars, hundred million dollars, billion
dollar decisions, that's where you really notice the difference of
a more accurate answer engine, and so that that has
made our ability to grow through capital, you know, more straightforward.
Speaker 4 (20:18):
It feels like vcs are desperate to give you money,
but it also seems as though plenty of other.
Speaker 5 (20:23):
Big tech want to buy into you.
Speaker 4 (20:24):
There's been reports that Meta was trying to buy you,
and indeed Apple you resolute or remaining.
Speaker 5 (20:30):
Independent or would you be bought at the right price. We,
as I.
Speaker 8 (20:35):
Said, are building a generational company, so we think of
the world through the lens of trillions, not billions. We
also think there's incredible value in remaining independent because that's
a key way to preserve that trust with our users,
and so we have no plans to sell the company
(20:56):
and are incredibly excited about, you know, remaining independent for decades.
Speaker 3 (20:59):
To Dmitriy ser Lenko, perplexed, it's great to have you
here on Bloomberg Tech.
Speaker 4 (21:13):
Welcome back to Bloomberg Tech. Let's take a look at
these markets as we see a rally and then as
that one hundred we have close to record his once
again five ten percent on the upside, even though we
see a worldwide bond market sell off. We see that
data coming in from the United States in terms of jobs,
maybe signaling tomorrow non varm payrolls will show us like
weakening in the jobs data and could that mean the
Fed doesn't decut.
Speaker 5 (21:34):
We move on to see what's happening underneath the hood.
Speaker 4 (21:36):
What leads inn Azzac higher is big names such as Nvidio,
but also Apple at one point seven percent, shaking on
anxiety that maybe Fox on its suppliers having to shift
to engineers back to China from India. What does that
mean for a supply chain? Tesla up four percent? Have
we seen the worst in terms of sales declin's ed
We saw those Q two numbers deliveries down thirteen percent,
(21:58):
but the market that braced itself for worse.
Speaker 3 (22:00):
Okay, let's get back to our top story in Tesla,
the EV maker is facing multiple headwinds, and its numbers
tell us that story.
Speaker 2 (22:08):
Stephanie Valdez.
Speaker 3 (22:08):
Street is Director of Industry Insights at Cox Automotive. So
three hundred and eighty four one hundred and twenty two
vehicles in the second quarter. The thing about the data
is it doesn't distinguish by geography, right, there is some
monthly data from different jurisdictions around the world, but like,
go under the hood of the data. What did you
learn from the Prince Stephanie.
Speaker 12 (22:29):
Yeah, you know, I was thinking about we had our
forecast call last last week, and we were forecasting that
Tesla would have a.
Speaker 11 (22:36):
Twenty one percent year over year decline.
Speaker 12 (22:39):
So I think if you look at when the numbers
start coming in, we'll probably see the numbers the next
few days. I think the US we're probably going to
see a larger decline year over year. And once again,
you know, with Tesla, it's all about having the product, right,
They've had no product other than the cybertruck, so they
need a new product. And then just globally, just the
competition from China, whether it's uid Ezeker shall Meet.
Speaker 11 (23:02):
There's lots of competition.
Speaker 12 (23:03):
And then as we all know, with the recent those participation,
Elon has had some polarization both in Europe and the
US markets.
Speaker 11 (23:14):
So I think.
Speaker 12 (23:14):
It's going to be critical for Tesla to rebrand themselves
and really bring some new product. If they can get
that affordable product launch, that could be a game changer
for them.
Speaker 4 (23:26):
Can they rebrand themselves with Elon taking over control of
even more so the US and European sales focus too?
Speaker 5 (23:33):
Is that the right sort of rebranding.
Speaker 12 (23:36):
Yes, I think it's gonna take a lot of work,
right especially in the US, especially in certain parts of
the country. In the US, I think it could be done,
but it's gonna have to be very targeted, very strategic,
and it has to be ongoing. It can't be a
one time thing. But also I think it's all about product,
right with you think about consumers. If you look at
the US market, GM has been rolling out evs the
(23:57):
last couple of years and they're right behind Tesla.
Speaker 11 (24:00):
Eating up market share.
Speaker 12 (24:01):
So I think it goes back to having kind of
that whole strategy as a car company, right their car
company trying to transition into an AI But.
Speaker 11 (24:09):
That car business is all about product and the right
price and the right consumer experience.
Speaker 4 (24:16):
But that consumer experience, that product is technology.
Speaker 5 (24:19):
Technology at it's very hot Stephanie.
Speaker 4 (24:21):
If we think about how China looks as though it's stabilizing,
many may be thinking that it's because of FSD. Actually
the wins back some of the focus in China and
competes against Shaomi with the latest SU seven and competes
against E BYD.
Speaker 5 (24:37):
How important is FSD.
Speaker 12 (24:39):
I think it's critical, especially you think about as Tesla
is trying to become this AI and with their recent
rowotax unveiling and often it was small scale, but it
was very important that they actually did launch when they
said they were And I think it's going to be
important for them to continue to scale. And I know
there's a lot of safety concerns and some regulatory but
(25:02):
I think it's going to be important for them to
continue to innovate on their chips, on their dojo to
really kind of create that competitive molt around AI.
Speaker 2 (25:13):
Stephanie.
Speaker 3 (25:14):
I use full self driving supervised every single day. I
do about sixty miles a day. Tesla's approach is get
in the car and try it, and then you'll see
the future. Where Testera operates as a ride hailing company
with robotaxis, is that sales pitch resonating the jump from
a driver assistant tool to them becoming an uber type player.
Speaker 12 (25:36):
I think it's challenging, and you think about just kind
of when they're a competition. You have Weimo, right, who
has lots of lots of miles, and I think recently
we just hit heard Jim Farley say that he thinks
the Weimo approach is better.
Speaker 11 (25:49):
So I think Tesla has a lot more to prove.
Speaker 12 (25:53):
I think their approach can be effective if they're able
to roll it out and get more miles and overcome
some of the safety and regulatory concerns.
Speaker 3 (26:00):
The idea that Tesla's going to send sell ten million
vehicles here by the end of the decade seems to
have change now, right, But within the data there are
signs that outside of.
Speaker 2 (26:09):
North American Europe they.
Speaker 3 (26:10):
Might be getting traction in new markets. Do you have
any sense of what those new markets are.
Speaker 11 (26:16):
Yeah, I think they're looking at India.
Speaker 12 (26:17):
I think that's another market and some of more of
these other South American countries.
Speaker 11 (26:22):
So I think that's going to be an opportunity for them.
Speaker 12 (26:24):
But to your point, it's going to be critical for
them to look at other options because, as we know,
China is getting to get to that overcapacity, and so
they need to find locations to.
Speaker 11 (26:35):
Export their evs.
Speaker 12 (26:37):
And also, I think with some of the tariffs in
place between US China, I think it's going to be
important for them. And then also to continue to increase
production in Berlin.
Speaker 11 (26:45):
I think that's a smart move as well. I will say, the.
Speaker 12 (26:48):
One thing, you know, we've talked about all the headwinds
Tesla does have, you know, the advantage of having the
vertical integration, and that's what really gives them up in some.
Speaker 11 (26:58):
Of the other US many factures.
Speaker 12 (27:00):
So that's one thing I want to just point out
that's really something important to remember about Tesla.
Speaker 4 (27:07):
Stephanie Valdez Streat, director of Industry Insights, that Cox Automotive
wonderful to have your insights. And look, let's return to
the fact that amid the disappointing sales figures, the recent
drop in share price too has been painful, but Tesla's
market cap still dwarfs other automakers. Bloomberg editor in Chief
emeritus and Bloomberg Opinion columnist Matt Winkler has been writing
(27:28):
about this in his latest column. Basically, how difficult is
it to remember what a juggernaut, what a success story
Tesla is in the face of all the headwinds and
news articles about Elon Musk right now, Matt.
Speaker 13 (27:45):
Pleasure to be with you, and you're quite right. Omitted
from the prevailing narrative, including everything we just heard, is
that Tesla still is the world's largest automaker. It's the
ninth largest public company. It's worth more than the gross
domestic product of Saudi Arabia, and the top ten automakers
(28:09):
are just say, seventy five percent, seventy eight percent maybe
of Tesla's market value, which is more than a trillion dollars.
So that's a really important point to make, which is
amid all of this doom mongering. Why is it that
the people with the most at stake, who are the shareholders,
(28:30):
somehow are missing from everybody's story, including this morning when
the sales were first reported, people thought that was the lead.
The sales are disappointing, and yet the share price is
up the most since June. So what does this share
price tell us? It tells us that Tesla is a
lot more than it's vehicles. It is the autonomous driving,
(28:52):
but it's so many more things other than that. It's robotics,
it's a visionary who wants to get to Mars, and
he's taking every thing he's got, which is artificial intelligence,
and applying it to his products. And the shareholders see
that because the shareholders are constantly looking at the future,
not at the past. And one thing I would say
about the vehicles. Everybody thinks there's a demand problem, but
(29:15):
the Model Why was actually refurbished if you like this year,
which counted for some of the production slippage. The sales
are way up in Norway, they're way up in Spain,
so the prevailing narrative really doesn't cut much there. And
the Model Why We Forget was the best selling vehicle
(29:39):
in twenty twenty three in the world, the best selling
vehicle in twenty twenty four in the world, looks like
it's going to be the best selling ed vehicle in
twenty twenty five. So those are all things that are
missing from the narrative that you've been sharing so far.
Speaker 3 (29:56):
Matt. You point out in your opinion piece that, by
Tesla's own description, it's a full stack technology company. I've
written a lot about that as well. And the most
bullish names on the street on the cell side, their
valuations are predicated on this vision of Robotaxi and Optimus.
But in the here and now the sales are driven
by the sale of cars to consumers. When does the
(30:18):
inflection point come where revenues are derived largely from software?
Speaker 2 (30:23):
Well, I would a party right.
Speaker 13 (30:25):
Attention to the share price, because you know what motivated
my colleague Chinpai and I to produce this piece is
all through this year, headline after headline, story after story
from everywhere was as we said, bad to worse, and
yet through it all, everybody is omitting the great parenthetical clause,
(30:46):
which is Tesla is still worth more than the ten competitors,
biggest competitors combined. Why is it that Toyota's valuation is
a fourth of what Tesla is? Why is the general
motors which you referenced earlier in this program is just
fifty billion dollars and Tesla's are trillion dollars. And the
(31:07):
answer is there's a lot more to Tesla that people
are not looking at, and the best place to go
is the share price, because the share price tells you
what the relative value of Tesla is.
Speaker 3 (31:17):
Every single day Bloomberg Opinions and Bloomberg's Editor in Chief
Emeritus Matt Winkler.
Speaker 2 (31:23):
Great to have you back on the show. Thank you
so much.
Speaker 3 (31:27):
This is Bloomberg Tech and you're looking at a live
shot of the principal room. Check out the Bloomberg Tech podcast.
You can buy it on the terminal as well as
online on Apple, Spotify and iHeart.
Speaker 2 (31:37):
This is Bloomberg.
Speaker 3 (31:48):
Cloud based design platform Figma has filed to go public.
It could be one of the year's biggest initial public offerings.
I want to go right to Bloomberg's Katie Ruth. You've
been tracking this one. Let's get into all the details,
like what do we know about the ticker, where it
will be listed, and just like me last night, I'm
sure you pulled through the entire regulatory filing.
Speaker 2 (32:06):
What do we know?
Speaker 5 (32:08):
Sure?
Speaker 14 (32:08):
Yeah, So their ticker is fig fig. They're going to
be on the New York Stock Exchange and sources tell
me they're aiming to go to debut later this month.
Speaker 5 (32:19):
You know, this is a long time coming.
Speaker 14 (32:21):
They almost got bought by Adobe in twenty twenty two,
and then that didn't happen, so they went theo IPO
rout instead.
Speaker 4 (32:30):
And there is the context that they were almost bought
by Adobe, but they managed to keep eye on the prize,
keep growing the business independently. Where do we stand in
terms of the growth of this company?
Speaker 14 (32:40):
Sure, and they recently turned a profit, so they have
growing revenue and now profit. You know, I think they're
trying to make themselves seem.
Speaker 5 (32:51):
Like they're AI related.
Speaker 14 (32:52):
They recently launched an AI related product. But you know,
they have a lot of design clients and then they
have a lot of non professional designers using their product,
you know, a lot of them outside of the US,
all around the world, and they're hoping, you know, that
this will the IPO will continue to raise their profile
(33:14):
with consumers.
Speaker 4 (33:17):
Most Katie roof all Things IPO for this summer, we
appreciate it. Now from public markets to increasing investment on
the private side.
Speaker 5 (33:24):
Menture firm AXL.
Speaker 4 (33:26):
Has led an unusually large Series A funding round for
the startup Campfi, now the AI native enterprise software firm,
recently close to thirty five million dollar financing round. Axcel
partner Christine Esman is here with us to talk it through.
This is largely I mean surprisingly large for a Series A,
but I feel like our numbers have gone all out
to whack the minute. General to AI came into the playbook. Christine,
(33:48):
why have you backed campfi?
Speaker 11 (33:51):
Yeah, well thanks for having me.
Speaker 15 (33:52):
I'm so excited to tell you more about campfire, meetcamfire
dot com. Campfire is an AI native ERP solution that
replaces companies like net suite and quick Books. It's tackling
the super large ERP markets, one of the largest markets
in software with over a trillion dollars of market cap,
and Campfires is coming to market with a really.
Speaker 3 (34:12):
Fresh approach to the uninitiated ERP enterprise resource planning, which,
when you say it in full, is not as exciting.
Speaker 2 (34:21):
Why is it exciting, It's super excited.
Speaker 15 (34:25):
It's super exciting. I mean, think about the incumbents.
Speaker 5 (34:28):
In this space.
Speaker 15 (34:28):
You have companies like Oracle and into It and SAP
that have dominated this category for decades. At this point,
all of those companies were founded decades ago in the.
Speaker 11 (34:39):
Pre AI world.
Speaker 15 (34:41):
And when you're actually a user of these solutions, they
take months to implement, they require consultants, and post implementation,
they don't really deliver an enjoyable solution for any users who.
Speaker 11 (34:54):
Are using those solutions.
Speaker 15 (34:56):
And Campfires is taking just a really fresh approach. Maybe
get a little bit more tangible. Think of you as
a finance leader and you're trying to do something routine
like forecast your cash in January, and that might require
multiple people, manual data entry and all that. Using Campfire,
you can flip this model on its head, and camp
(35:18):
Fire enables the user to use natural language to just
do this and automatically see the insights.
Speaker 3 (35:25):
Christine, the company itself and the people that company are
super interesting right led by John Glasgow, And I was
reading earlier in the Week that it's one of these
companies that from inception moved very fast. You know, within
nine months or so it had all of this business,
and there's evidence that business is being one from some
sort of more established scale players. Can you just give
us some of the data behind what gave you the
(35:47):
conviction to back them?
Speaker 2 (35:49):
Definitely.
Speaker 15 (35:50):
I mean, in less than two years, this company has
shipped a fully functioning ERP solution, which is just nothing
short of remarkable. They have over a dozen companies that
have moved from Sweek completely, over one hundred that have
moved from QuickBooks, and that's just absolutely exceptionable, exceptional for
the stage.
Speaker 11 (36:06):
Of company that they're at. They're also supporting some pretty
large companies.
Speaker 15 (36:11):
I mean Rutler is what example, They just announced that
they crossed one hundred million of arr publicly and they're
relying on campfires as their ERP.
Speaker 5 (36:21):
Can I switch to large companies?
Speaker 4 (36:23):
And actually, Christine, of course we know you for late
stage investment as well as these mighty series A round.
Speaker 5 (36:29):
That you've just delivered to Campfire. We just had Perplexity on.
Speaker 4 (36:33):
We just had Dimitri from Perplexity on and I'm hearing
we've all seen the reports that accels involved in a
new funding round for the business.
Speaker 5 (36:39):
Can you talk about it as to whether you are
looking at the business.
Speaker 15 (36:43):
Yeah, I won't comment on some of our unannounced investments,
but I think as a firm, we're incredibly bullish on AI.
We were the first investors in Scale AI, and obviously
Alex Wing has had a lot of news recently and
we think super highly of that company, and we can
and you to think super highly of the future successive
of Scale. We feel super fortunate to have invested in
(37:06):
Perplexity in companies like Superbase and Graphite and Cursor and
other AI companies that.
Speaker 11 (37:11):
Are really defining the next wave of technology.
Speaker 4 (37:15):
Talk to us though about these rather interesting aquahiers shall
we call them, because we're seeing it time and time
again in the Generator AI space. Is that a win
for you when you see Scale AI lose its key founder,
continuous different business, stripped of certain perhaps future business lines.
Or is that given the scale of the investment that
(37:36):
a Meta makes or that others have made in certain
aquahis is that nothing but a good thing from your perspective?
Speaker 15 (37:42):
Yeah, Well, Meta made an investment in Scale and the
company will remain independent and will continue to go on.
They have incredible privacy regulations in place and a number
of really phenomenal customers that will continue using Scale, and
I'm just excited to see what the future has in
store for Scale.
Speaker 3 (38:00):
Christine Estamon, Excel partner. It's great to have you here
on Bloomberg Tech.
Speaker 2 (38:04):
Thank you very much.
Speaker 4 (38:05):
Warner Music it is launching a three hundred million dollar
cost savings drive in order to free up funds for
growth initiatives, and the plan will rezelt though in an
unspecified number of job cuts, according to a regulatory filing. Now,
the company says almost two thirds of the savings will
(38:26):
be achieved through job cuts, with the rest coming from
organizational changes and overhead savings.
Speaker 15 (38:31):
Ed.
Speaker 3 (38:33):
Microsoft has initiated its second major wave of job cuts
this year, laying off about nine thousand workers.
Speaker 2 (38:39):
This is the company looks to raining costs.
Speaker 3 (38:41):
According to a spokesperson, less than four percent of the
total workforce will be impacted. Bloomberg's Brody Ford joins us
with the details. So second wave and the rational is
also pretty clear. Get rid of middle layers of management,
streamlined teams. Give us the size and scope.
Speaker 16 (38:56):
Size and scope is that you know, you here four
three percent a couple months ago. It doesn't sound like
that much, but with Microsoft, I mean these are huge
numbers of employees. We have fifteen thousand people impacted across
two waves, and there's been other little cuts in addition
to that. And you know, folks might say Microsoft the
world's most valuable company. A lot of days, ninety six
(39:17):
billion in profit, Why are they doing all this? A
lot of it's that AI spending. Right one day, you're
spending eighty billion on AI data centers, and you want
to keep your margins flat. In this case, that's led
to some cut heads.
Speaker 4 (39:32):
And Brody the view has been, actually, the AI is
getting so good that it means that they can start
getting one of engineers AI is doing the job of them,
But is that really where the cuts come from this
time round.
Speaker 16 (39:44):
I haven't seen a ton of evidence that there's that
kind of direct employee replacement, but I think companies certainly
want to do it, right. I mean, a vendor like Microsoft,
it is selling it software, telling people, hey, you can
do more with less. I think we'd be naive to
think they aren't also a to do that. Internally. We
saw at the layoffs a couple of months ago disproportionately
(40:04):
hit software engineers right, and.
Speaker 3 (40:07):
The Microsoft spokesperson told us that in this round it
will be across teams and geographies, but we know from
our reporting largely witch divisions.
Speaker 2 (40:15):
I'm thinking like Xbox sales and marketing.
Speaker 16 (40:18):
Correct sales and marketing are the really big ones right now,
and that's because it's the end of the fiscal year
and you generally don't want to fire salespeople the fourth
quarter because you're not going to get the results you want.
And so yeah, we're seeing cuts today that I have
reason to believe our focus on those sales employees, but
really cuts across the company, and I think it underscores
the kind of new reality of the tech market that
(40:40):
even if you are in one of the most successful companies,
jobs aren't safe the way they used to be.
Speaker 4 (40:46):
Ready for telling it straight, We appreciate it.
Speaker 5 (40:48):
Thank you.
Speaker 4 (40:50):
Let's turn now to some of our other key top
stories today, ed and we've been all over the moves
when it comes to Apple potentially seeing those Chinese engineers
that Fox gone and senter in having to go back home.
What does that mean for the supply chain? But Tesla
front and center. You're the man who helps break scoop
after scoop, we're up four percent because well, the deliveries
were bad, but not as bad as.
Speaker 3 (41:10):
We're expected, right, deliveries technically misconsensus estimates, but actually the
sort of lowest range of the estimates that exceeded, you know,
expectations really reset. But I think, as Gene Monster told
us and Bloomberg Opinions Matt Winkler, look past the deliveries
and think about Tesla as a technology company.
Speaker 4 (41:28):
I mean, while that's what we do right here, the technology,
and that does it for this edition of Bloomberg Tech, so.
Speaker 2 (41:33):
Much to recap. Don't forget the podcast. You know where
to find it. It's on the Bloomberg terminal.
Speaker 3 (41:37):
It's online, on apples, Spotify, and on iHeart from San
Francisco and Caroline's out in London.
Speaker 2 (41:43):
This is Bloomberg tech.
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