May 2, 2025 • 43 mins
Bloomberg’s Caroline Hyde and Ed Ludlow discuss a busy week of tech earnings. Plus, US Energy Secretary Chris Wright explains the Trump administration's plans to boost US electricity output to support AI development. And Roblox CEO David Baszucki talks about the company’s earnings and growth strategy.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. This is Bloomberg Technology. Coming up.
Speaker 3 (00:37):
Apple hit with analyst downgrades as tariff.
Speaker 2 (00:40):
And growth warriors they increase.
Speaker 3 (00:41):
Will break down the company's latest earnings plus roadblocks.
Speaker 4 (00:44):
Daily users jump twenty six percent mid efforts to bring
in new players. We had the CEO later this.
Speaker 3 (00:50):
Hour and a conversation with the US Energy Secretary after
one hundred days of Trump policies.
Speaker 2 (00:55):
But first we check in on these markets. Look, we've
got enough of gains.
Speaker 3 (01:00):
We are bouncing back from our April cell off. We're
up three point two percent over the last five training days.
We add a cool almost five hundred billion dollars in
terms of market cap to this key tech benchmark. And
once again it's the second week of gains. We are
seeing this risk on attitude return with the macro data,
those jobs ratings overall ed, but also maybe a sign
of thuring in China US relations.
Speaker 2 (01:21):
What have you got under the herd?
Speaker 4 (01:22):
Right in that upward pressure at the next level interesting
because there's downward pressure in the biggest names and technology.
Apple is off by almost four percent. Very simply, it
is a tariff stories earnings. There was weakness in China
in the quarter, gone outperformance on iPhone, but Tim Cook
told us there is going to be a nine hundred
million dollar impact from tariffs in the current period. What
does that even mean in the context of what Apple
(01:44):
does around the world. Amazon forecasting for the current period
operating income that's billions of dollars below what the street
for uncertainty in tariffs, It's a very clear story in
both socks arounder pressure.
Speaker 3 (01:55):
They are and we're going to have so much great
analysis on both individual names as a whole. We go
to Blue It's round for Stellca and Look earnings. Thus
far the big megacap four we had this week. Microsoft
Meta managed to bounce through these trade headwinds, but Apple
and Amazon, with tangible goods do not.
Speaker 5 (02:12):
Yeah, thanks for having me so, I'd say overall, this
earning season has been pretty positive for big tech. At
least it was until yesterday afternoon. Apple in particular, people
were already worried how much is tariff going to impact them?
What is this going to mean for their growth, which
was already sort of stalled relative to other big tech companies.
What is this going to mean for its multiple which
(02:33):
was already elevated relative to other big tech companies.
Speaker 4 (02:36):
And it really I.
Speaker 5 (02:37):
Don't think this was exactly the worst case scenario, but
certainly it was a disappointment, and it just underlines a
lot of the concerns that people already had about the stock.
Speaker 4 (02:45):
Let's focus on Apple in the context of the stock.
How has the cell side reacted? What do we see
in terms of downgrades on the stock from the street.
Speaker 5 (02:53):
Well, we had at least two downgrades this morning. One
of them is a cut to a cell rating, which
is pretty rare for Apple. There's a lot of concern
that maybe we haven't yet fully seen the impact of tariffs.
Maybe this is going to be something that continues to
build over the rest of the year. That was Jeffrey's
downgrading the stock to an underperformed rating. We also had
Rosenblatt which cut the stock to a neutral rating, warning
(03:15):
just in general about you know, what is it going
to take for a real inflection of growth? It says
anai iPhone sort of supercycle upgrade is needed, and it
says that it is becoming less likely as time goes.
Speaker 4 (03:26):
By the most Rhyan for Selica, thank you very much,
stay with Apple earnings and bring in the Vila po
power see a research director at IDC. I want to
think about this in terms of all of the consumer
electronics that Apple has built and moves around the world.
If the company tells us that the impact of tariffs
is nine hundred million dollars in the current period, what
(03:48):
does that really mean? Is that significant? Is it a
small hit? And how do you model for it? Yeah?
Speaker 6 (03:54):
Now that's a great question. Thanks for having me. I
think you know, if you look in for Apple, that
number of the grand scheme of things isn't much, right,
It's still less than two percent or h of their
of their revenue, right. But I think a bigger question
will be how will because they could still push that
in with other like their revenue from coming from other
(04:16):
product lines and for profitability from other places. But I
think the bigger question for will be what will Apple
do with prices? And that's what a question that Tim
Cook didn't address, right? Will they increase prices on their devices?
And that's traditionally something Apple hasn't done historically. They've never
raised prices on their products mid cycle. So I'm, you know,
(04:37):
very curious and I think everyone's really looking to see
how Apple does that. But the but the other challenge,
you know, is how they are going to navigate with
their supply chain. And we've already seen that, right Apple's
already demonstrated incredible flexibility in moving their supply chain already
in q On ramping it up significantly, and they confirmed
(04:59):
that right. There were earlier last week about them wrapping
it up very fast from moving from India, but Tim
Cook just confirmed that they moved about half of their
nebula of the West market from India. Y.
Speaker 3 (05:11):
Yeah, can I jump in because you make such a
clear case in the supply chain and the way in
which that is being navigated.
Speaker 2 (05:16):
But we're looking right now at the demand side.
Speaker 3 (05:19):
In China there was weakness once again despite some of
those subsidies. How did Tim Cook manage to deflect what
seems to be once again just a story they can't
turn around?
Speaker 6 (05:30):
You know, China has been an area that they are
you know, recently have been challenging. And that's what I'm saying.
Speaker 2 (05:35):
Before even the terrist story.
Speaker 6 (05:36):
They've been these This weakness in China has been something
that they've been dealing with and they will continue to
deal We were already you know, baking this in our forecast,
but this year the challenge from Huawe continues to grow.
But at the same time there they are continued to
be the leader in China in terms of the premium segment.
(05:57):
They still have seventy percent share. But the silver lining
for Apple is still not maybe not be in China
this year, but they're still going in emerging markets. They
are probably going to increasingly have more of their models
move over to their you know, in house modem, which
will help their profitability.
Speaker 2 (06:17):
So there are still.
Speaker 6 (06:18):
Some silver lining in again as they scale their production
in India, that will really help them deal with the
teriff challenges as well. And hopefully once we hear it
more you know in WWBC in terms of the announcements.
Speaker 4 (06:30):
With before we hear about it WWDC right like, because
Tim Cook did not speak about a lot of this
stuff on the call. You make a good point though.
The other news headline is that Apple is going to
source starting right now, apparently millions more chips from the
TSMC fab in Arizona. How does that impact the cost
of production of a handset and how do you model
(06:51):
for it being taken out of their hands that they
have to raise prices or not.
Speaker 2 (06:58):
You know, it's just it's.
Speaker 6 (06:59):
Just very you know, we don't have visibility in terms
of exactly how many chips are going to come from where,
but we do know that they are really trying. I mean,
the thing is with Apple, right, they have been.
Speaker 7 (07:09):
So they're really good.
Speaker 6 (07:11):
And what their biggest strength is there how they navigate
through all of these the way they negotiate with their
supply chain, and they have a lot of strength right
in terms of where they want to move things around.
They are able to even with prices, with logistics and tipicos.
Background is an operations guy, right, and on top of
his strength in terms of geopolitics, he has strength and
(07:33):
you know history with navigating and negotiating with both administrations.
So I do have faith that he will be able
to take you know, whether through the storm. It will
just take some time, whether it's through the supply chain
or whether he does it through internal you know, changing
of going through more in house or changing the supply
chain and manufacturing, whether it's through India or through to
(07:55):
the US, but it just takes some time, and we
do expect this to be a challenging year for Apple well,
but in the long term I do see that you know,
they will be able to come through it.
Speaker 3 (08:05):
Really, popol, it is always so great to speak with you,
senior director at IDC. We shift from Apple to Amazon
now shares as we see reacting to its own report,
we're down about three tenths of a percent. The company
did want of a tougher business climate, of course, amid
global trade tensions. Let's get more brad ericson Internet analysts
for RBC Capital Markets. Before I go to the AWS
side of it, come to the geopolitics of it all.
(08:27):
How much are we able to see Amazon survive and
weather this at the moment by having brought in inventory
but ultimately be able to change up their supply chain too.
Speaker 8 (08:38):
Yeah, so I think you know, they're definitely working the situation.
They would acknowledge that it's very uncertain. We spoke with
them last night and there was definitely that was the
message on all of this.
Speaker 7 (08:51):
But I think the idea is is that you know, we.
Speaker 8 (08:53):
Think about it kind of the guns for the war
picks and shovels type of dynamic.
Speaker 7 (08:57):
Here. Amazon has millions of sellers. There will absolutely be
sellers that are.
Speaker 8 (09:02):
Impacted by this in terms of having supply chain exposure
to China, but there are others that don't. And when
you think about people you know, looking for deals trying
to save money already, they're going to go to Amazon
and they're still going to find sellers that are not
exposed to those China supply chain headwins, and they're going
to find decent prices and they're going to buy.
Speaker 7 (09:23):
So I think under almost.
Speaker 8 (09:24):
Any macro scenario, right, we're not saying we know the downside,
but under any any scenario Amazon games.
Speaker 4 (09:30):
Share, I want to go to the fundamental basics of
how Amazon's business works. Half of the audience watching GMOT technology, No,
it is Amazon dot Com an e commerce business that's
the vast volume of sales, but the vast majority of
operating income is AWS cloud. So when Amazon tells us
that be in the current period, operating income will be
(09:52):
billions of dollars below what you guys on the street
had forecast, is that singularly a tariff's issue on dot com?
Or is it also reflecting softness in cloud spending.
Speaker 8 (10:05):
I don't think it's reflecting softness and cloud spending.
Speaker 7 (10:08):
In fact, I expect that to kind of continue.
Speaker 8 (10:11):
I think the issue is more just that well, one
thing I would clarify is that, yes, the midpoint of
the guidance was below the street, but typically Amazon hits
or exceeds the high end of the guidance, and so
I think really when you think about where the quarter
likely ends up, it was probably closer to in line.
I'm sure they're building in some risk around you, just
(10:33):
the terror situation and the impact that that could have,
But the ad business drives a huge portion of that
that operating income as well, and that's still growing really
well too.
Speaker 7 (10:42):
That grow eighteen percent in the quarter.
Speaker 8 (10:44):
So I think there's less sort of discounted in and
there less concern in there than you might think.
Speaker 3 (10:48):
And they're still very focused on all the innovation, whether
it be o ver aws, whether it be in space,
whether it be on what they're doing in terms of
getting your product too faster. All of that, though, takes costs,
and I'm interested that meta signal. Look, we're sticking to,
for example, our CAPEX and we're raising it because of
infrastructure spends going to go up because of tarifs. Do
you think that's going to affect the cost of doing
(11:09):
business at AWS in any way?
Speaker 4 (11:11):
Brad?
Speaker 7 (11:13):
It could yeah.
Speaker 8 (11:14):
I mean I think the comment we made earlier in
the week on Meta was that, you know, they called
out equipment infrastructure, equipment and component costs are going up. Technically,
what that means for the industry is that structurally, return
on investment capital is lower today than it was ninety
days ago.
Speaker 7 (11:30):
So sure, that's not great. I think in Amazon's case.
Speaker 8 (11:33):
You know, Meta probably came out a little bit even
more unscathed from tariffs based on what we know at
this point. So I think Amazon's probably having a little
bit more measured caution. Ie they didn't take the Capex
guide up, but I think they sound every bit is
bullish on the cloud business and their growth they're going forward.
Speaker 4 (11:52):
What did Amazon do well in the quarta?
Speaker 7 (11:57):
What did they do well? They grew ads eighteen percent.
Speaker 8 (12:00):
They did not miss on ads, which they had been
in prior quorders, so that was probably the best one
of the standouts.
Speaker 2 (12:07):
Can I don't pen that, Brad.
Speaker 3 (12:09):
I'm really interested in the ads side because you said
that now really clearly twice. How much of a headwind
is that going forward if third party sellers become that
little bit weaker, if we do see the knock on
effects of tensions in trade.
Speaker 7 (12:21):
Yeah, for sure.
Speaker 8 (12:22):
So I go back, so ads basically have a one
to one relationship with volume, right units essentially, And so
back to what I said earlier, with that seller density,
you might a seller might who has a China supply
chain exposure, might lose some volume, but there's going to
be another seller that's going to step in there and
probably still move that unit. If they do, they're still
(12:45):
going to be spending those AD dollars. So we think
that actually can be more resilient here.
Speaker 4 (12:50):
Project Kaiper has got off to a rocky start. I
think it's fair to say, do you even model that
into your model for Amazon? Any meaningful contribution for space
based internet business that takes on starlink?
Speaker 8 (13:04):
Yeah, it's hard, That's what I'll say. For Q two,
you know, it's embedded in the guidance. They launched a
rocket earlier in April, they're going to launch more in
Q two, So clearly there is cost, and you know,
I think we're thinking about maybe one hundred million on
average per rocket that goes up. So that's kind of
the magnitude we're talking about, and they've talked about kind
of somewhere in the range of eighty rockets or maybe
(13:26):
ten billion dollars of total outlay related to the Constellation
project overall. So the good news is what they said
last night was they are going to have commercial service
up for that by the end of the year, so
they're actually gonna be driving revenue. It's not just a
cost headwind, which is nice as we think about twenty
twenty six. But yeah, the math on it in our
model very difficult at this point.
Speaker 4 (13:46):
I'd say pad Ericson obviously Capital Markets, thank you very much.
Now coming up, ADP's Nella Richardson joins us on the
efforts to address the widening skill gap in labor markets.
This has been bo technology.
Speaker 3 (14:12):
The US labor market is stronger than perhaps expected for April,
shrugging off those trade tensions, one hundred and seventy seven
thousand jobs added, but there is still uncertainty, and it's
about tariff impact. It's also perhaps about the longer time
effects of advances in technology here to address well the
skills gap in particular is Neila Richardson.
Speaker 2 (14:30):
She's the chief economist and the SG officer.
Speaker 3 (14:32):
At ADP, and you've done some fascinating research and ontology.
You call it about perhaps what is facing the current
labor market and the skills gap that is missing when
it comes to tech. Is that in any way being
reflected in jobs numbers right now.
Speaker 2 (14:44):
A little bit?
Speaker 9 (14:45):
But if we raise up our view, if we change
your aperture to the big picture, the long term picture,
what you see is an aging US workforce that's being
complemented by an aging Chinese in an Asian aging euree workforce,
and then you see all these nascent new technologies that
companies have yet to fully embrace. And so as this
(15:08):
plays out, there's going to be a gap between the
tech and the skills, and until that chasm is closed,
you're going to see a hit to productivity. So our
focus is really aligning all the new jobs and the
in demand jobs with the in demand skills so that
we can bring the workforce along to all this technological
(15:30):
change and all the promise.
Speaker 2 (15:31):
That it holds.
Speaker 4 (15:32):
The calculus for the tech industry is that the job's
numbers and aggregate show that there isn't this impact from
uncertainty in tariff's overall in that market? But if there
is a skills gap. You look at some of the
headlines in tech, metalaid off about one hundred people in
reality labs. But I know that those companies are doing
that in small trims because there are places they desperately
(15:53):
need people that aren't really available. They've got to free
up the salary, the stock and the head count. How
much do you exp that to continue in this market?
Make little trims but overall higher.
Speaker 9 (16:04):
You know, companies and tech companies in particular, made big
bets throughout this pandemic recovery, and sometimes they've had to
pull back on those bets and reshuffle their headcount. If
you look at the April numbers that information tech sector,
which has a lot of people and companies that create
and publish software, it was flat in April. It was
(16:25):
negative the month before and flat again the month before that.
So there's this disconnect between the people and the tech
where all these people with tech is the future. And
I think what you're seeing is a couple things. First,
that talent is being subsumed elsewhere, and also that talent
is evolving, So at ADP. What we're trying to do
(16:46):
is show where the talent is, how it's moving, maybe
from industries that you would expect, like the tech sector
to manufacturing, to healthcare, to these other industries where tech
is becoming even more important than it has been historically.
Speaker 3 (17:02):
And how much are we starting to see headcount less
necessary because of technological innovation AI. For example, this week,
everyone's been talking about the Gio Lingo announcement. AI first
means we're segno to contractors, We're not giving you headcount
unless you can automate it and show that you can't
get any more automation done.
Speaker 2 (17:20):
Is that starting to show through?
Speaker 4 (17:21):
You know?
Speaker 9 (17:22):
At the edges, I think there is some change in
how companies are hiring knowing that they have this advanced technology.
It's commonly said your job won't be replaced by tech,
it will be replaced by someone.
Speaker 2 (17:34):
Who knows AI very well.
Speaker 9 (17:36):
I want to unpack that a little bit to show
you what that means. There are skills associated to job titles.
So at ADP we've identified one hundred thousand skills associated
with nine thousand job titles. It doesn't mean that the
jobs are changing. It means that the tasks and the
skills required for those jobs are changing. So when you
(17:57):
look at these company announcements, it's also stating that the
jobs as they have been in the past, have you
volved And what does it mean for a worker, Well,
it means that you may have the same job, but
what you do your skills required has changed, and companies
are trying to figure that out, whether it is reducing
headcount and rehiring the skills they need or and what
(18:21):
here's where I think is really the opportunity training the
current workforce to have those skills.
Speaker 4 (18:26):
Neila richardson the ADP, thank you very much, shares of
Take two Interactive under pressure after the company announced its
highly anticipated Grand Theft Auto six game is being delayed
again until May of twenty twenty six bloombax. Jason Schreyer
(18:49):
is here a Jason. For some people, this is like
the worst possible news in their personal gaming lives they
could have happened for Take two. The stockdown six percent?
What are the details, what accounts for the delay?
Speaker 10 (19:03):
Ed is just going to be a sad Christmas for
you not getting to play the new Grand.
Speaker 4 (19:07):
Theft Definitely and many others.
Speaker 10 (19:10):
Yeah, it's I don't think there's any sort of like
crazy secret or alter your motive behind this. I've been
hearing for a little while now people at Rockstar did
not believe Fall twenty twenty five it was a real
release window. There's just too much work left to do,
not enough time to do it, and the company has
really been trying pretty hard to avoid the kind of
(19:31):
brutal overtime that they had traditionally put people through on
their games. They've really been shaping up over the last
few years, as Bloomberg has been reporting, So this was inevitable.
I feel like we talked about this a little bit
earlier in the year. We predicted on our game on
Bloomberg newsletter that this was going to happen. To me,
it's always felt more like a when than an if.
Speaker 3 (19:51):
Yeah, I'm straus Zelnik coming out saying we fully support
Rockstar games, and you've got analysts coming out Jason saying
that this doesn't wipe away the profitability. Up to fifty
percent profit is what I think webbush have it down as,
but you just push it back.
Speaker 10 (20:05):
It is bonkers to me that their stock is taking
a hit this morning. This game is still going to
be the biggest thing on the planet. It is still
going to make a kajillion.
Speaker 4 (20:15):
Dollars technical question.
Speaker 10 (20:19):
The last game, Grand Theft out of Five, has sold
two hundred and ten million copies, which makes it the
second best selling game of all time, second to Minecraft,
which is on phones. So that's apples and oranges. To
put that in perspective, that Grand Theft out of Five
alone has sold more than the entire Assassin's Creed series,
an entire public trade and publisher Ubisoft It's flagship series
(20:40):
has under sold GTA five alone. This is going to
be the biggest entertainment launch ever. And the fact that
investors are now spooked because it's coming a few months later,
maybe moved fiscal years, that is bonkers to me.
Speaker 3 (20:53):
I think the bonker's element though, is trip away. It's
just once again anxiety, isn't it. The people's eyeballs go elsewhere?
Where does it go?
Speaker 2 (21:00):
Jason?
Speaker 3 (21:00):
If you're not you're still sticking with Grand Theft Auto
five or are you playing other games you're getting more
excited about the switch to what happens?
Speaker 10 (21:08):
Yeah, I mean this game is such an anomaly. I
think a lot of games have to worry about that.
A lot of multiplayer games, especially that are coming out,
have to worry. Oh no, Bungee's Marathon is coming later
this year. Is that going to compete with our new
online game that is coming. It's a very competitive landscape.
GTA is a class.
Speaker 7 (21:26):
Of its own.
Speaker 10 (21:26):
This is a game that everybody is going to play
no matter what. So again, it seems a little silly
to me that investors are worried about a delay when
the game is still going.
Speaker 4 (21:35):
We're showing that data right now, right. You were just
talking about two hundred and ten on GTA five. Just
real quick, just explain the basics of what the game is.
You have thirty seconds because the audience might not know.
Speaker 7 (21:47):
Yeah, GTA.
Speaker 10 (21:48):
So GTA six is going to be two components. One
is going to be the single player part of it,
which is a big open world game where you drive
around a fictional version of Miami and you do crimes
and you follow a story and it's all very beautiful
and cinema and I really love that. The second part
is an online component where you do similar sort of
things heists and crimes and online driving, except with your friends.
Speaker 3 (22:10):
I just I still can't get over the first that
screen cris data, Tetris data like five hundred million.
Speaker 4 (22:16):
People pick it up another time based worry.
Speaker 3 (22:18):
One of our producers a clean lover of Tetris, Jason Tryer,
We adore having you. Thank you, Welcome back to Blue
Med Technology.
Speaker 2 (22:32):
I'm Caroenine Hide in New.
Speaker 4 (22:33):
York and I med Ludlow also in the Big Apple.
What is the technology sect you're doing?
Speaker 2 (22:37):
It's higher, and it's higher on macro perspective.
Speaker 3 (22:39):
Actually, if you're look at NASNAK more broadly, look if
five days of gains, we're up more than three point
six percent. That's the second week of gains, and we're
at one point three percent. Because the jobs market thus
far not too impacted by tariffs, and indeed maybe there's
some cooling intensions between US and China. But we also
look at some individual movers. I want to get under
the hood and show you what's happening. Airbnb off by
a quarter of percent. Look, they post almost eight percent
(23:01):
sales growth for the court just gone, but they push
forward that that's going to moderate. I mean this economic anzoniety.
We look a PDD up three point four percent. Look,
TIMU is going to go local. They're not going to
be giving you everything from China. They're going to source
it in the US and more locally. And then there's
Nvidia two point seven percent higher. Interesting reporting coming from
the information. Could they be inventing yet a new type
(23:23):
of chip A's tailor made to the Chinese H twenty
can't go there, but can they service them with something else?
Speaker 10 (23:28):
Ed?
Speaker 2 (23:28):
It stock is higher?
Speaker 4 (23:29):
It is. As President Trump marked his first one hundred
days in office this week, the Department of Energy is
also celebrating one hundred days of American energy what it's
calling victories, including in manufacturing and innovation. Joining us now
is US Energy Secretary Chris Wright, Secretary right, thank you
for your time in joining us here on Bloomberg Technology.
(23:50):
There is one question that that Americans that watch this
show have for you, which is, how have you changed
policy in that period of time for energy in a
way that supports you manufacturers.
Speaker 11 (24:04):
Well, here, I am at a plant in Griffin, Georgia,
about forty miles southeast of Atlanta that makes low cost, tankless,
non condensing.
Speaker 4 (24:13):
Hot water heaters.
Speaker 11 (24:14):
A little too technical there, These are low cost heaters.
Over a million Americans today take showers and wash their
hands from water heated from a device made in this
plant just in the last three years, and of course
millions more interested in this technology because it's very low cost.
Speaker 4 (24:34):
And this was going to be illegal.
Speaker 11 (24:36):
On December twenty sixth, the Biden administration passed a rule
through the Department of Energy, my predecessor, that would have
made the manufacture of these devices illegal. Hundreds of people
here in Georgia would have lost their jobs, and millions
of Americans wouldn't have had a low cost choice to
put into their house, their apartment, their you know, wherever
it is. They want hot water, their restaurant, their business.
(24:59):
And so we're through to see this factory, hum and
along and excited workers that they have the future and
their products have the future.
Speaker 4 (25:06):
Secretary, right fifty miles away from where you're standing, Rivian
is building an electric vehicle plant in Georgia. Rivian had
secured a six point six billion dollar loan from the
Department of Energy agreed under the prior administration. What is
your assessment of that loan, will it proceed and are
(25:27):
you reviewing the issuance of those funds?
Speaker 11 (25:33):
So we will review the issuance of all the funds,
loans and grants from the Department of the Energy. To
give you one reason for the serious concern. We have
about eighty percent of the loan money and the grant
money put out by the Biden percent Biden administration, eighty
percent went out after President Trump was elected and before
(25:54):
his inauguration day.
Speaker 4 (25:56):
If they had great, rock.
Speaker 11 (25:57):
Solid, make American lives better opportunities, wouldn't they have done
that in the previous two and a half years. But instead,
so much of the money was rushed out the door
after election day and before inauguration. So we've got a
lot of reasons to be worried and suspicious about that.
We're stewards of the American taxpayer's money. And the goal
the Department of Energy is to improve our energy system,
(26:18):
to make energy more affordable, reliable, and secure. Everything that
serves that agenda we will carry through. So we want
to we want to carry out the president's agenda, follow
the rule of law, and so some of these loans
will go forward, some of them it's too late to
change courses. A lot of them won't go forward. But
(26:39):
that's a very careful review process, yes, that we've just
put in place and just got the team to execute on.
Speaker 4 (26:46):
Secretary Right it's not just the company's manufacturing. If you
think about the infrastructure, particularly from the utilities point of view,
there is a lot of concern about storage of capability.
Tesla is the leader in energy storage, right but the
frank reality is that for the energy storage products it
relies on prismatic LFP cells that are one hundred percent
(27:07):
manufactured in China by catl. If there is a need
to build out storage products at the commercial scale, are
you evaluating any exemptions in the context of tariff or
any work with Tesla so that they can get moving
on building out energy storage infrastructure in this country.
Speaker 11 (27:27):
Well, look at well it's talk on specific things right here,
but we are looking very careful at everything we can
do to resure the manufacturing of critical systems like the
ones you've talked about here in the United States. We've
just become way too dependent on China for things that
are in our defense systems, that are in our electric grids,
that are in our automobiles, that are in our space systems.
Speaker 4 (27:49):
We need to bring.
Speaker 11 (27:50):
That kind of manufacturing, those technologies, and those materials back
into the United States. It is a high priority of
the Trump administration.
Speaker 3 (27:58):
Secretary, right You spend a lot of time talking to executives,
as does the President. I just want you to rehear
what the Nvidia CEO said on the hill just this week.
Speaker 2 (28:08):
Take a listen.
Speaker 12 (28:09):
In order for this industry to thrive, we need to
build these systems, of course, but we also need a
progressive growth and industry oriented energy policy, which this president
has really put his way behind. I really appreciate that
without energy we can't possibly have new growth industries.
Speaker 3 (28:29):
An industry focused energy policy for AI Secretary, right, what
does that industry policy look like?
Speaker 11 (28:40):
That means getting the barriers out of the way of
energy production. The Bidy administration spent four years in sort
of an all of government approach to impede the production
of hydrocarbons in the United States for all energy sources.
But hydrocarbons are over eighty percent of US energy when
I was born and they are today.
Speaker 4 (29:00):
So if you stand in the way of.
Speaker 11 (29:02):
Our main energy system, guess what you get higher prices.
We grew our electricity production only two percent twenty percent
price rise.
Speaker 4 (29:10):
So to achieve in Videos.
Speaker 11 (29:12):
And America's dream to win the AI race, we've got
to produce a lot more electricity, a lot more energy
of all sorts in the United States, and all the
government needs to do is get out of the way
a little bit of common sense. There's American businesses, American capital,
and American technologies ready to roar, and President Trump's goal
is to unleash that American energy, that American capital and
(29:34):
let American energy production grow sexually.
Speaker 3 (29:37):
Right though, is there a potential that you're accidentally getting
in the way because of geopolitics and trade issues? Because
the energy lack of in many ways is an infrastructure
and supply chain issue. You don't have the turbines to
be able to bring the energy at the infrastructure rate
that the CEOs want to see. There's not enough equipment.
(29:57):
Is there enough time to pivot to make that in
the US?
Speaker 4 (30:03):
Oh.
Speaker 11 (30:03):
I've spoken to the turbine manufacturers and they are in
huge demand right now. But ge Vernova made twenty seven
of them last year. They'll make eighty of them next year.
So the Americans are ingenious and with a little bit
of regulatory common sense, they can ramp up their capacity rapidly.
So no, I'm quite excited about how much new energy
(30:25):
production capacity we'll see in the United States under construction today.
And a lot more will be under construction by the
end of this year. I think we will ramp it
up in time. But you're right, it's going to be
a race. It's going to be a race, but we
must lead in AI and that means we must rapidly
grow our energy production. But we're up for the job.
Speaker 4 (30:43):
Secretary, right, how reliant will the AI boom in this
country be on fossil fuels? And while we have you,
what is the plan for the SPR Please?
Speaker 11 (30:57):
Well, foss the natural gas is by far the big
source of electricity in the United States, followed by nuclear
and coal. So that's what's going to power THEI race.
It's slow to build coal plants and nuclear plants are
very slow.
Speaker 4 (31:10):
We want to change that.
Speaker 11 (31:11):
But in the short term, the main source of additional
electricity that will power AI arms race is going to
be expanded natural gas electricity production. That'll be the workhourse
of winning the AI race. But a lot of solars
getting built, transmission, energy storage, all of the above that works,
that'll add to it. Your last question, sorry, repeated again.
Speaker 4 (31:33):
The status of the SPI Please.
Speaker 11 (31:37):
Hey, the SPR was half drained for the twenty twenty
two mid term elections. So we are filling it slowly
right now, but we're going to try to get money
through Congress to fill it more rapidly. But unfortunately, you
can only fill it at a much slower pace than
you can drain it, so it will take us years
to fill it back. But we will entirely fill it
because it's a strategic reserve. You got to have that
(31:59):
because you never know what's coming.
Speaker 3 (32:01):
We appreciate your time outside, of course, for in I
America Corporation US Energy Secretary Chris Wright, we love a
high vis jacket on this show.
Speaker 2 (32:09):
Meanwhile, let's get to the breaking news for you.
Speaker 3 (32:11):
Potential IPO coming as soon as next week. Etro is
said to be weighing actually going forward with its initial
public offering, having delayed it back in last month.
Speaker 2 (32:20):
They could be eyeing as soon as next week.
Speaker 3 (32:22):
No decision is yet finalized, but it's certainly been considered.
Speaker 2 (32:25):
Meanwhile, coming up.
Speaker 3 (32:26):
Roadblocks sees much better than expected jump in active users
will be speaking with the CEO, say Bazooki, that's next,
stick with us.
Speaker 2 (32:33):
This is Blue Meg Technology.
Speaker 3 (32:48):
Once again video game platform roadblocks. The shares on the
up and up. Of course, the company reported large and
expected jumping users for the first quarter with its daily
active players jumping twenty ninety seven point eight billion now
and that was for the first three months ending in March.
Dave Pazuki Redlox CEO joins us and Dave, are you
economic anxiety proof?
Speaker 2 (33:08):
You recession proof.
Speaker 10 (33:11):
Ed?
Speaker 13 (33:11):
Carolyn? Thank you for having me on the program. I
want to highlight significant performance in Q one. We just
shared yesterday on our Ernie's Call on our really mission
to get ten percent of the global gaming software market
running on the platform. Roadblocks is virtual, roadblocks is digital.
We do not have any supply chain issues. There is
(33:33):
no shortage of roadblocks, and we are contributing to the
US trade import export ratio. We're bringing cash into.
Speaker 3 (33:41):
The US and you're paying some of those content creators,
in particular developers. Dave, I'm interested in that ten percent figure,
Like what sort of timeframe are we talking here? Because
what you're at about three percent now?
Speaker 2 (33:53):
Am I right?
Speaker 13 (33:54):
We're at about two and a half to three percent.
We have shared consistently that we believe can grow at
greater than twenty percent year on year. We highlighted in
Q one growth rates much higher than that, including revenue
growth rates of twenty nine percent year on year, daily
active user growth rates of twenty six percent year on year,
(34:17):
and a couple really interesting highlights. Over thirteen users on
the platform, DAUS grew by thirty six percent year on
year and India huge market grew by seventy seven percent
year on year. So we really think it's attainable.
Speaker 4 (34:38):
Dave, I'm a passionate gamer in the over thirty category,
and I'd say that the biggest headlines right now are
the delay of GTA six high fidelity game and the
delay of switch to on the console side. Is that
where you think you're going to compete when you aim
ten percent market share? How did those two headlines impact
(35:01):
roadblocks and the platform.
Speaker 13 (35:03):
We have shared a roadmap including highlighting genre expansion into RPG,
sports and racing battle games on the platform. We are
seeing more of this on the platform. For example, we
recently NASCAR has teamed up with Driving Empire, Paramount teamed
(35:25):
up with SpongeBob simulator, PGA Tour has teamed up, so
we're seeing more and more of this. We shared that
these three genres which will contribute to us getting to
ten percent of the gaming space, We believe grew over
sixty percent year on year on the platform.
Speaker 4 (35:44):
Growing revenue. What role is advertising going to play.
Speaker 13 (35:49):
We think we already have some creators on our platform
who are making more money on advertising than they are
with virtual currency. We believe it's a natural complement. What
it's not big enough yet for us to break out
the numbers. We just released a partnership with Google that
will provide more video advertising for some of our developers.
(36:12):
So it's part of building an economic ecosystem, you know.
We also shared that over one hundred creators on the
platform made over a million dollars in the last twelve months,
So there's a huge variety of creators starting to make
good businesses.
Speaker 3 (36:28):
And look Wedbush for example, the analyst, they're saying that payment,
when it improves the content, it draws more people there, Dave.
But you'll also say, look, when you actually tell us
exactly you break out the numbers advertising, that's the next
catalyst for roadblock shares. Any timeframe on when you will
be able to break out the advertising numbers.
Speaker 13 (36:47):
We want to break out those numbers sooner as soon
as we can. They are growing, Stay tuned. We're looking
forward to that. That said, we're growing at enormous rates
with the core business of virtual currency, both on engagement
and on users, really significant outperformance in Q one.
Speaker 3 (37:05):
I'm going to go to the delicate side because last
time you joined us, Dave, it was all about parental controls.
It's all about the focus on safety. Now since we
last spoke, there's been a couple more legal cases come
your way. Look, these lawsuits aimed at you and at Discord,
and once again is about alleged grooming, sexual exploitation using
the platforms. How are you dealing and responding to those
(37:26):
particular lawsuits.
Speaker 2 (37:27):
How you feeling, Dave? As well as I know you
have your.
Speaker 3 (37:29):
Own family using it and you think seriously about this stuff,
I would.
Speaker 13 (37:33):
Say both optimistic and as well a humility for the
responsibility we have. You know, any single incident on our
platform is one too many, and you know there's almost
one hundred million daily users on the platform every day.
We take this as an enormous responsibility. We are taking
leadership here in that all communication on our platform is
(37:57):
filtered and goes through AI filters, which are getting enormously better,
including voice. There's no image sharing on our platform, so
there's less risk of some of the things that happen
in that area, and more and more we're focusing not
just on under thirteen, but on thirteen through seventeen year olds.
That's also a delicate age. We're starting to lean into
(38:19):
age verification around this. We work very heavily with local, state,
and federal law enforcement. Roadblocks is a dangerous place for
bad actors, so we have a big responsibility here.
Speaker 4 (38:31):
Dave, you talked about M and A actually in the
Roadblocks ecosystem during the call. Give me some solid numbers
on what that looks like and some MNA for the
company as well. Going forward.
Speaker 13 (38:44):
We have shared that there are over there's now three
creators on a run rate of over fifty million a year.
You can put some multiples on top of that and
estimate what their businesses might be worth. At our Developer
conference last year, we shared a prediction there'll be a
billion dollar valuation studio on the platform. We think that's very,
(39:07):
very possible. Internally, we haven't announced any M and A,
but we are generating a fair amount of cash. You know,
we have well north of three billion dollars of cash,
but no Roadblocks M and A plans right now.
Speaker 4 (39:19):
Deveyzekier roadblocks. Thank you very much for joining us on
Bloomberg Technology. Another social media platform or online platform we're
watching is Reddit. The social media site said it expected
revenue in the current quarter to be better than estimates,
with Q two sales between four hundred and ten and
four hundred and thirty million dollars. I spoke we've Reddit
Coogen Wong earlier today.
Speaker 14 (39:39):
On the user side, Reddit is becoming more accessible outside
of the US for non English speakers, and we do
that a couple ways. The first is using machine translation
to take universal conversations things like life, experience, parenting, fandom,
and translate that into local language so that folks in
France and Germany, et cetera can enjoy it in local language.
(40:01):
The second thing we're doing is recruiting moderators in those
countries and developing thriving local communities, because Reddit is great
when it's global and it's local, and so those communities
are creating a very local feel for you know, redditors
in France and Germany and our focused countries. Right now,
(40:23):
we have eight focused markets that are getting this treatment,
and they're growing two times as fast as the rest
of international daily Active uniques, which is great to see,
and we'll be expanding that. So we have Brazil, we
have parts of countries in Southeast Asia, but that treatment
will expand to the rest of the year. On the
revenue side, what's interesting is I just came back from
(40:45):
visiting our Australian and European teams and there's really tremendous
momentum there and there's a lot of new advertisers coming
on and obviously that's reflected in the growth that I
mentioned before.
Speaker 4 (40:55):
Jenny, the other part of the business is data data
licensing in the AI context, right that the pitch that
you give to those developing frontier models is that Reddit
is contemporaneous, there is new and genuinely human contribution to
the platform, and that therefore the data is valuable. You know,
we know about all the big names that are working
(41:17):
on next gen models throughout the calendar year. How do
you ensure that your data licensing deals and your targets
for new deals line up with them starting the training
process on their next model.
Speaker 14 (41:31):
Well, I think when we talk about data licensing, what
we're really talking about is the fact that Reddit data
is really valuable, and it's valuable for others to build
products around, and it's valuable for us to build products around.
I would say we're open for conversations, and we're really
you know, we're pleased with the partnership so far, and
we're really excited about what.
Speaker 7 (41:52):
We can build, what we can build.
Speaker 14 (41:53):
I mean, you see this with Reddit answers, which we released,
you know, globally this week. We don't have anything new
to share on this right now, but I'd say we're
open for conversations. We're excited about the products that we
can build.
Speaker 2 (42:05):
Gen Wong there, Reddit COO.
Speaker 4 (42:15):
Time for talking tech. First up, the EU slapping a
six hundred million dollar fine on TikTok owner Byte Dance
for illegally sending user data to China. TikTok saying it
would appeal the decision, claiming it never received a request
from Chinese authorities. Plus Timus shifting to a local fulfillment model,
planning to sell goods only from local US merchants to
American consumers. It's a move aimed at avoiding tariffs to
(42:38):
keep prices lower, and Oios delayed IPO plans yet again,
holding off into its earnings are stronger. Market turbulence is
also a factor. This is the third time the company's
put off its IPO.
Speaker 3 (42:50):
Meanwhile, we get that news, of course that eToro is
still going ahead with it potentially next week. That does
it for this edition of BlueBag Technology. What joy to
have you here next to me.
Speaker 4 (42:58):
It's been an intense earnings We've got a lot done earning.
Still the story in markets, right, let's have a look
at what is moving. And you know the names that
we've covered throughout the show, they're idiosyncratic Apple. That's a
big decline for Apple, right if you look at historic norms.
And then what about take two carracter, Well, I'm.
Speaker 2 (43:15):
Sorry, you'll probably go shed a tear.
Speaker 3 (43:18):
Crime theft auto six so you're too emotional for you
to talk about of by six point six percent, another delay,
but look, profits still go coming the mentionally in video
up to two point seen percent. Don't forget about the podcast.
This is the Bloomberg Technology
Bloomberg Audio Studios, podcasts, radio news from the heart of
where innovation, money and power collide in Silicon Valley and beyond.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2 (00:34):
Live from New York. This is Bloomberg Technology. Coming up.
Speaker 3 (00:37):
Apple hit with analyst downgrades as tariff.
Speaker 2 (00:40):
And growth warriors they increase.
Speaker 3 (00:41):
Will break down the company's latest earnings plus roadblocks.
Speaker 4 (00:44):
Daily users jump twenty six percent mid efforts to bring
in new players. We had the CEO later this.
Speaker 3 (00:50):
Hour and a conversation with the US Energy Secretary after
one hundred days of Trump policies.
Speaker 2 (00:55):
But first we check in on these markets. Look, we've
got enough of gains.
Speaker 3 (01:00):
We are bouncing back from our April cell off. We're
up three point two percent over the last five training days.
We add a cool almost five hundred billion dollars in
terms of market cap to this key tech benchmark. And
once again it's the second week of gains. We are
seeing this risk on attitude return with the macro data,
those jobs ratings overall ed, but also maybe a sign
of thuring in China US relations.
Speaker 2 (01:21):
What have you got under the herd?
Speaker 4 (01:22):
Right in that upward pressure at the next level interesting
because there's downward pressure in the biggest names and technology.
Apple is off by almost four percent. Very simply, it
is a tariff stories earnings. There was weakness in China
in the quarter, gone outperformance on iPhone, but Tim Cook
told us there is going to be a nine hundred
million dollar impact from tariffs in the current period. What
does that even mean in the context of what Apple
(01:44):
does around the world. Amazon forecasting for the current period
operating income that's billions of dollars below what the street
for uncertainty in tariffs, It's a very clear story in
both socks arounder pressure.
Speaker 3 (01:55):
They are and we're going to have so much great
analysis on both individual names as a whole. We go
to Blue It's round for Stellca and Look earnings. Thus
far the big megacap four we had this week. Microsoft
Meta managed to bounce through these trade headwinds, but Apple
and Amazon, with tangible goods do not.
Speaker 5 (02:12):
Yeah, thanks for having me so, I'd say overall, this
earning season has been pretty positive for big tech. At
least it was until yesterday afternoon. Apple in particular, people
were already worried how much is tariff going to impact them?
What is this going to mean for their growth, which
was already sort of stalled relative to other big tech companies.
What is this going to mean for its multiple which
(02:33):
was already elevated relative to other big tech companies.
Speaker 4 (02:36):
And it really I.
Speaker 5 (02:37):
Don't think this was exactly the worst case scenario, but
certainly it was a disappointment, and it just underlines a
lot of the concerns that people already had about the stock.
Speaker 4 (02:45):
Let's focus on Apple in the context of the stock.
How has the cell side reacted? What do we see
in terms of downgrades on the stock from the street.
Speaker 5 (02:53):
Well, we had at least two downgrades this morning. One
of them is a cut to a cell rating, which
is pretty rare for Apple. There's a lot of concern
that maybe we haven't yet fully seen the impact of tariffs.
Maybe this is going to be something that continues to
build over the rest of the year. That was Jeffrey's
downgrading the stock to an underperformed rating. We also had
Rosenblatt which cut the stock to a neutral rating, warning
(03:15):
just in general about you know, what is it going
to take for a real inflection of growth? It says
anai iPhone sort of supercycle upgrade is needed, and it
says that it is becoming less likely as time goes.
Speaker 4 (03:26):
By the most Rhyan for Selica, thank you very much,
stay with Apple earnings and bring in the Vila po
power see a research director at IDC. I want to
think about this in terms of all of the consumer
electronics that Apple has built and moves around the world.
If the company tells us that the impact of tariffs
is nine hundred million dollars in the current period, what
(03:48):
does that really mean? Is that significant? Is it a
small hit? And how do you model for it? Yeah?
Speaker 6 (03:54):
Now that's a great question. Thanks for having me. I
think you know, if you look in for Apple, that
number of the grand scheme of things isn't much, right,
It's still less than two percent or h of their
of their revenue, right. But I think a bigger question
will be how will because they could still push that
in with other like their revenue from coming from other
(04:16):
product lines and for profitability from other places. But I
think the bigger question for will be what will Apple
do with prices? And that's what a question that Tim
Cook didn't address, right? Will they increase prices on their devices?
And that's traditionally something Apple hasn't done historically. They've never
raised prices on their products mid cycle. So I'm, you know,
(04:37):
very curious and I think everyone's really looking to see
how Apple does that. But the but the other challenge,
you know, is how they are going to navigate with
their supply chain. And we've already seen that, right Apple's
already demonstrated incredible flexibility in moving their supply chain already
in q On ramping it up significantly, and they confirmed
(04:59):
that right. There were earlier last week about them wrapping
it up very fast from moving from India, but Tim
Cook just confirmed that they moved about half of their
nebula of the West market from India. Y.
Speaker 3 (05:11):
Yeah, can I jump in because you make such a
clear case in the supply chain and the way in
which that is being navigated.
Speaker 2 (05:16):
But we're looking right now at the demand side.
Speaker 3 (05:19):
In China there was weakness once again despite some of
those subsidies. How did Tim Cook manage to deflect what
seems to be once again just a story they can't
turn around?
Speaker 6 (05:30):
You know, China has been an area that they are
you know, recently have been challenging. And that's what I'm saying.
Speaker 2 (05:35):
Before even the terrist story.
Speaker 6 (05:36):
They've been these This weakness in China has been something
that they've been dealing with and they will continue to
deal We were already you know, baking this in our forecast,
but this year the challenge from Huawe continues to grow.
But at the same time there they are continued to
be the leader in China in terms of the premium segment.
(05:57):
They still have seventy percent share. But the silver lining
for Apple is still not maybe not be in China
this year, but they're still going in emerging markets. They
are probably going to increasingly have more of their models
move over to their you know, in house modem, which
will help their profitability.
Speaker 2 (06:17):
So there are still.
Speaker 6 (06:18):
Some silver lining in again as they scale their production
in India, that will really help them deal with the
teriff challenges as well. And hopefully once we hear it
more you know in WWBC in terms of the announcements.
Speaker 4 (06:30):
With before we hear about it WWDC right like, because
Tim Cook did not speak about a lot of this
stuff on the call. You make a good point though.
The other news headline is that Apple is going to
source starting right now, apparently millions more chips from the
TSMC fab in Arizona. How does that impact the cost
of production of a handset and how do you model
(06:51):
for it being taken out of their hands that they
have to raise prices or not.
Speaker 2 (06:58):
You know, it's just it's.
Speaker 6 (06:59):
Just very you know, we don't have visibility in terms
of exactly how many chips are going to come from where,
but we do know that they are really trying. I mean,
the thing is with Apple, right, they have been.
Speaker 7 (07:09):
So they're really good.
Speaker 6 (07:11):
And what their biggest strength is there how they navigate
through all of these the way they negotiate with their
supply chain, and they have a lot of strength right
in terms of where they want to move things around.
They are able to even with prices, with logistics and tipicos.
Background is an operations guy, right, and on top of
his strength in terms of geopolitics, he has strength and
(07:33):
you know history with navigating and negotiating with both administrations.
So I do have faith that he will be able
to take you know, whether through the storm. It will
just take some time, whether it's through the supply chain
or whether he does it through internal you know, changing
of going through more in house or changing the supply
chain and manufacturing, whether it's through India or through to
(07:55):
the US, but it just takes some time, and we
do expect this to be a challenging year for Apple well,
but in the long term I do see that you know,
they will be able to come through it.
Speaker 3 (08:05):
Really, popol, it is always so great to speak with you,
senior director at IDC. We shift from Apple to Amazon
now shares as we see reacting to its own report,
we're down about three tenths of a percent. The company
did want of a tougher business climate, of course, amid
global trade tensions. Let's get more brad ericson Internet analysts
for RBC Capital Markets. Before I go to the AWS
side of it, come to the geopolitics of it all.
(08:27):
How much are we able to see Amazon survive and
weather this at the moment by having brought in inventory
but ultimately be able to change up their supply chain too.
Speaker 8 (08:38):
Yeah, so I think you know, they're definitely working the situation.
They would acknowledge that it's very uncertain. We spoke with
them last night and there was definitely that was the
message on all of this.
Speaker 7 (08:51):
But I think the idea is is that you know, we.
Speaker 8 (08:53):
Think about it kind of the guns for the war
picks and shovels type of dynamic.
Speaker 7 (08:57):
Here. Amazon has millions of sellers. There will absolutely be
sellers that are.
Speaker 8 (09:02):
Impacted by this in terms of having supply chain exposure
to China, but there are others that don't. And when
you think about people you know, looking for deals trying
to save money already, they're going to go to Amazon
and they're still going to find sellers that are not
exposed to those China supply chain headwins, and they're going
to find decent prices and they're going to buy.
Speaker 7 (09:23):
So I think under almost.
Speaker 8 (09:24):
Any macro scenario, right, we're not saying we know the downside,
but under any any scenario Amazon games.
Speaker 4 (09:30):
Share, I want to go to the fundamental basics of
how Amazon's business works. Half of the audience watching GMOT technology, No,
it is Amazon dot Com an e commerce business that's
the vast volume of sales, but the vast majority of
operating income is AWS cloud. So when Amazon tells us
that be in the current period, operating income will be
(09:52):
billions of dollars below what you guys on the street
had forecast, is that singularly a tariff's issue on dot com?
Or is it also reflecting softness in cloud spending.
Speaker 8 (10:05):
I don't think it's reflecting softness and cloud spending.
Speaker 7 (10:08):
In fact, I expect that to kind of continue.
Speaker 8 (10:11):
I think the issue is more just that well, one
thing I would clarify is that, yes, the midpoint of
the guidance was below the street, but typically Amazon hits
or exceeds the high end of the guidance, and so
I think really when you think about where the quarter
likely ends up, it was probably closer to in line.
I'm sure they're building in some risk around you, just
(10:33):
the terror situation and the impact that that could have,
But the ad business drives a huge portion of that
that operating income as well, and that's still growing really
well too.
Speaker 7 (10:42):
That grow eighteen percent in the quarter.
Speaker 8 (10:44):
So I think there's less sort of discounted in and
there less concern in there than you might think.
Speaker 3 (10:48):
And they're still very focused on all the innovation, whether
it be o ver aws, whether it be in space,
whether it be on what they're doing in terms of
getting your product too faster. All of that, though, takes costs,
and I'm interested that meta signal. Look, we're sticking to,
for example, our CAPEX and we're raising it because of
infrastructure spends going to go up because of tarifs. Do
you think that's going to affect the cost of doing
(11:09):
business at AWS in any way?
Speaker 4 (11:11):
Brad?
Speaker 7 (11:13):
It could yeah.
Speaker 8 (11:14):
I mean I think the comment we made earlier in
the week on Meta was that, you know, they called
out equipment infrastructure, equipment and component costs are going up. Technically,
what that means for the industry is that structurally, return
on investment capital is lower today than it was ninety
days ago.
Speaker 7 (11:30):
So sure, that's not great. I think in Amazon's case.
Speaker 8 (11:33):
You know, Meta probably came out a little bit even
more unscathed from tariffs based on what we know at
this point. So I think Amazon's probably having a little
bit more measured caution. Ie they didn't take the Capex
guide up, but I think they sound every bit is
bullish on the cloud business and their growth they're going forward.
Speaker 4 (11:52):
What did Amazon do well in the quarta?
Speaker 7 (11:57):
What did they do well? They grew ads eighteen percent.
Speaker 8 (12:00):
They did not miss on ads, which they had been
in prior quorders, so that was probably the best one
of the standouts.
Speaker 2 (12:07):
Can I don't pen that, Brad.
Speaker 3 (12:09):
I'm really interested in the ads side because you said
that now really clearly twice. How much of a headwind
is that going forward if third party sellers become that
little bit weaker, if we do see the knock on
effects of tensions in trade.
Speaker 7 (12:21):
Yeah, for sure.
Speaker 8 (12:22):
So I go back, so ads basically have a one
to one relationship with volume, right units essentially, And so
back to what I said earlier, with that seller density,
you might a seller might who has a China supply
chain exposure, might lose some volume, but there's going to
be another seller that's going to step in there and
probably still move that unit. If they do, they're still
(12:45):
going to be spending those AD dollars. So we think
that actually can be more resilient here.
Speaker 4 (12:50):
Project Kaiper has got off to a rocky start. I
think it's fair to say, do you even model that
into your model for Amazon? Any meaningful contribution for space
based internet business that takes on starlink?
Speaker 8 (13:04):
Yeah, it's hard, That's what I'll say. For Q two,
you know, it's embedded in the guidance. They launched a
rocket earlier in April, they're going to launch more in
Q two, So clearly there is cost, and you know,
I think we're thinking about maybe one hundred million on
average per rocket that goes up. So that's kind of
the magnitude we're talking about, and they've talked about kind
of somewhere in the range of eighty rockets or maybe
(13:26):
ten billion dollars of total outlay related to the Constellation
project overall. So the good news is what they said
last night was they are going to have commercial service
up for that by the end of the year, so
they're actually gonna be driving revenue. It's not just a
cost headwind, which is nice as we think about twenty
twenty six. But yeah, the math on it in our
model very difficult at this point.
Speaker 4 (13:46):
I'd say pad Ericson obviously Capital Markets, thank you very much.
Now coming up, ADP's Nella Richardson joins us on the
efforts to address the widening skill gap in labor markets.
This has been bo technology.
Speaker 3 (14:12):
The US labor market is stronger than perhaps expected for April,
shrugging off those trade tensions, one hundred and seventy seven
thousand jobs added, but there is still uncertainty, and it's
about tariff impact. It's also perhaps about the longer time
effects of advances in technology here to address well the
skills gap in particular is Neila Richardson.
Speaker 2 (14:30):
She's the chief economist and the SG officer.
Speaker 3 (14:32):
At ADP, and you've done some fascinating research and ontology.
You call it about perhaps what is facing the current
labor market and the skills gap that is missing when
it comes to tech. Is that in any way being
reflected in jobs numbers right now.
Speaker 2 (14:44):
A little bit?
Speaker 9 (14:45):
But if we raise up our view, if we change
your aperture to the big picture, the long term picture,
what you see is an aging US workforce that's being
complemented by an aging Chinese in an Asian aging euree workforce,
and then you see all these nascent new technologies that
companies have yet to fully embrace. And so as this
(15:08):
plays out, there's going to be a gap between the
tech and the skills, and until that chasm is closed,
you're going to see a hit to productivity. So our
focus is really aligning all the new jobs and the
in demand jobs with the in demand skills so that
we can bring the workforce along to all this technological
(15:30):
change and all the promise.
Speaker 2 (15:31):
That it holds.
Speaker 4 (15:32):
The calculus for the tech industry is that the job's
numbers and aggregate show that there isn't this impact from
uncertainty in tariff's overall in that market? But if there
is a skills gap. You look at some of the
headlines in tech, metalaid off about one hundred people in
reality labs. But I know that those companies are doing
that in small trims because there are places they desperately
(15:53):
need people that aren't really available. They've got to free
up the salary, the stock and the head count. How
much do you exp that to continue in this market?
Make little trims but overall higher.
Speaker 9 (16:04):
You know, companies and tech companies in particular, made big
bets throughout this pandemic recovery, and sometimes they've had to
pull back on those bets and reshuffle their headcount. If
you look at the April numbers that information tech sector,
which has a lot of people and companies that create
and publish software, it was flat in April. It was
(16:25):
negative the month before and flat again the month before that.
So there's this disconnect between the people and the tech
where all these people with tech is the future. And
I think what you're seeing is a couple things. First,
that talent is being subsumed elsewhere, and also that talent
is evolving, So at ADP. What we're trying to do
(16:46):
is show where the talent is, how it's moving, maybe
from industries that you would expect, like the tech sector
to manufacturing, to healthcare, to these other industries where tech
is becoming even more important than it has been historically.
Speaker 3 (17:02):
And how much are we starting to see headcount less
necessary because of technological innovation AI. For example, this week,
everyone's been talking about the Gio Lingo announcement. AI first
means we're segno to contractors, We're not giving you headcount
unless you can automate it and show that you can't
get any more automation done.
Speaker 2 (17:20):
Is that starting to show through?
Speaker 4 (17:21):
You know?
Speaker 9 (17:22):
At the edges, I think there is some change in
how companies are hiring knowing that they have this advanced technology.
It's commonly said your job won't be replaced by tech,
it will be replaced by someone.
Speaker 2 (17:34):
Who knows AI very well.
Speaker 9 (17:36):
I want to unpack that a little bit to show
you what that means. There are skills associated to job titles.
So at ADP we've identified one hundred thousand skills associated
with nine thousand job titles. It doesn't mean that the
jobs are changing. It means that the tasks and the
skills required for those jobs are changing. So when you
(17:57):
look at these company announcements, it's also stating that the
jobs as they have been in the past, have you
volved And what does it mean for a worker, Well,
it means that you may have the same job, but
what you do your skills required has changed, and companies
are trying to figure that out, whether it is reducing
headcount and rehiring the skills they need or and what
(18:21):
here's where I think is really the opportunity training the
current workforce to have those skills.
Speaker 4 (18:26):
Neila richardson the ADP, thank you very much, shares of
Take two Interactive under pressure after the company announced its
highly anticipated Grand Theft Auto six game is being delayed
again until May of twenty twenty six bloombax. Jason Schreyer
(18:49):
is here a Jason. For some people, this is like
the worst possible news in their personal gaming lives they
could have happened for Take two. The stockdown six percent?
What are the details, what accounts for the delay?
Speaker 10 (19:03):
Ed is just going to be a sad Christmas for
you not getting to play the new Grand.
Speaker 4 (19:07):
Theft Definitely and many others.
Speaker 10 (19:10):
Yeah, it's I don't think there's any sort of like
crazy secret or alter your motive behind this. I've been
hearing for a little while now people at Rockstar did
not believe Fall twenty twenty five it was a real
release window. There's just too much work left to do,
not enough time to do it, and the company has
really been trying pretty hard to avoid the kind of
(19:31):
brutal overtime that they had traditionally put people through on
their games. They've really been shaping up over the last
few years, as Bloomberg has been reporting, So this was inevitable.
I feel like we talked about this a little bit
earlier in the year. We predicted on our game on
Bloomberg newsletter that this was going to happen. To me,
it's always felt more like a when than an if.
Speaker 3 (19:51):
Yeah, I'm straus Zelnik coming out saying we fully support
Rockstar games, and you've got analysts coming out Jason saying
that this doesn't wipe away the profitability. Up to fifty
percent profit is what I think webbush have it down as,
but you just push it back.
Speaker 10 (20:05):
It is bonkers to me that their stock is taking
a hit this morning. This game is still going to
be the biggest thing on the planet. It is still
going to make a kajillion.
Speaker 4 (20:15):
Dollars technical question.
Speaker 10 (20:19):
The last game, Grand Theft out of Five, has sold
two hundred and ten million copies, which makes it the
second best selling game of all time, second to Minecraft,
which is on phones. So that's apples and oranges. To
put that in perspective, that Grand Theft out of Five
alone has sold more than the entire Assassin's Creed series,
an entire public trade and publisher Ubisoft It's flagship series
(20:40):
has under sold GTA five alone. This is going to
be the biggest entertainment launch ever. And the fact that
investors are now spooked because it's coming a few months later,
maybe moved fiscal years, that is bonkers to me.
Speaker 3 (20:53):
I think the bonker's element though, is trip away. It's
just once again anxiety, isn't it. The people's eyeballs go elsewhere?
Where does it go?
Speaker 2 (21:00):
Jason?
Speaker 3 (21:00):
If you're not you're still sticking with Grand Theft Auto
five or are you playing other games you're getting more
excited about the switch to what happens?
Speaker 10 (21:08):
Yeah, I mean this game is such an anomaly. I
think a lot of games have to worry about that.
A lot of multiplayer games, especially that are coming out,
have to worry. Oh no, Bungee's Marathon is coming later
this year. Is that going to compete with our new
online game that is coming. It's a very competitive landscape.
GTA is a class.
Speaker 7 (21:26):
Of its own.
Speaker 10 (21:26):
This is a game that everybody is going to play
no matter what. So again, it seems a little silly
to me that investors are worried about a delay when
the game is still going.
Speaker 4 (21:35):
We're showing that data right now, right. You were just
talking about two hundred and ten on GTA five. Just
real quick, just explain the basics of what the game is.
You have thirty seconds because the audience might not know.
Speaker 7 (21:47):
Yeah, GTA.
Speaker 10 (21:48):
So GTA six is going to be two components. One
is going to be the single player part of it,
which is a big open world game where you drive
around a fictional version of Miami and you do crimes
and you follow a story and it's all very beautiful
and cinema and I really love that. The second part
is an online component where you do similar sort of
things heists and crimes and online driving, except with your friends.
Speaker 3 (22:10):
I just I still can't get over the first that
screen cris data, Tetris data like five hundred million.
Speaker 4 (22:16):
People pick it up another time based worry.
Speaker 3 (22:18):
One of our producers a clean lover of Tetris, Jason Tryer,
We adore having you. Thank you, Welcome back to Blue
Med Technology.
Speaker 2 (22:32):
I'm Caroenine Hide in New.
Speaker 4 (22:33):
York and I med Ludlow also in the Big Apple.
What is the technology sect you're doing?
Speaker 2 (22:37):
It's higher, and it's higher on macro perspective.
Speaker 3 (22:39):
Actually, if you're look at NASNAK more broadly, look if
five days of gains, we're up more than three point
six percent. That's the second week of gains, and we're
at one point three percent. Because the jobs market thus
far not too impacted by tariffs, and indeed maybe there's
some cooling intensions between US and China. But we also
look at some individual movers. I want to get under
the hood and show you what's happening. Airbnb off by
a quarter of percent. Look, they post almost eight percent
(23:01):
sales growth for the court just gone, but they push
forward that that's going to moderate. I mean this economic anzoniety.
We look a PDD up three point four percent. Look,
TIMU is going to go local. They're not going to
be giving you everything from China. They're going to source
it in the US and more locally. And then there's
Nvidia two point seven percent higher. Interesting reporting coming from
the information. Could they be inventing yet a new type
(23:23):
of chip A's tailor made to the Chinese H twenty
can't go there, but can they service them with something else?
Speaker 10 (23:28):
Ed?
Speaker 2 (23:28):
It stock is higher?
Speaker 4 (23:29):
It is. As President Trump marked his first one hundred
days in office this week, the Department of Energy is
also celebrating one hundred days of American energy what it's
calling victories, including in manufacturing and innovation. Joining us now
is US Energy Secretary Chris Wright, Secretary right, thank you
for your time in joining us here on Bloomberg Technology.
(23:50):
There is one question that that Americans that watch this
show have for you, which is, how have you changed
policy in that period of time for energy in a
way that supports you manufacturers.
Speaker 11 (24:04):
Well, here, I am at a plant in Griffin, Georgia,
about forty miles southeast of Atlanta that makes low cost, tankless,
non condensing.
Speaker 4 (24:13):
Hot water heaters.
Speaker 11 (24:14):
A little too technical there, These are low cost heaters.
Over a million Americans today take showers and wash their
hands from water heated from a device made in this
plant just in the last three years, and of course
millions more interested in this technology because it's very low cost.
Speaker 4 (24:34):
And this was going to be illegal.
Speaker 11 (24:36):
On December twenty sixth, the Biden administration passed a rule
through the Department of Energy, my predecessor, that would have
made the manufacture of these devices illegal. Hundreds of people
here in Georgia would have lost their jobs, and millions
of Americans wouldn't have had a low cost choice to
put into their house, their apartment, their you know, wherever
it is. They want hot water, their restaurant, their business.
(24:59):
And so we're through to see this factory, hum and
along and excited workers that they have the future and
their products have the future.
Speaker 4 (25:06):
Secretary, right fifty miles away from where you're standing, Rivian
is building an electric vehicle plant in Georgia. Rivian had
secured a six point six billion dollar loan from the
Department of Energy agreed under the prior administration. What is
your assessment of that loan, will it proceed and are
(25:27):
you reviewing the issuance of those funds?
Speaker 11 (25:33):
So we will review the issuance of all the funds,
loans and grants from the Department of the Energy. To
give you one reason for the serious concern. We have
about eighty percent of the loan money and the grant
money put out by the Biden percent Biden administration, eighty
percent went out after President Trump was elected and before
(25:54):
his inauguration day.
Speaker 4 (25:56):
If they had great, rock.
Speaker 11 (25:57):
Solid, make American lives better opportunities, wouldn't they have done
that in the previous two and a half years. But instead,
so much of the money was rushed out the door
after election day and before inauguration. So we've got a
lot of reasons to be worried and suspicious about that.
We're stewards of the American taxpayer's money. And the goal
the Department of Energy is to improve our energy system,
(26:18):
to make energy more affordable, reliable, and secure. Everything that
serves that agenda we will carry through. So we want
to we want to carry out the president's agenda, follow
the rule of law, and so some of these loans
will go forward, some of them it's too late to
change courses. A lot of them won't go forward. But
(26:39):
that's a very careful review process, yes, that we've just
put in place and just got the team to execute on.
Speaker 4 (26:46):
Secretary Right it's not just the company's manufacturing. If you
think about the infrastructure, particularly from the utilities point of view,
there is a lot of concern about storage of capability.
Tesla is the leader in energy storage, right but the
frank reality is that for the energy storage products it
relies on prismatic LFP cells that are one hundred percent
(27:07):
manufactured in China by catl. If there is a need
to build out storage products at the commercial scale, are
you evaluating any exemptions in the context of tariff or
any work with Tesla so that they can get moving
on building out energy storage infrastructure in this country.
Speaker 11 (27:27):
Well, look at well it's talk on specific things right here,
but we are looking very careful at everything we can
do to resure the manufacturing of critical systems like the
ones you've talked about here in the United States. We've
just become way too dependent on China for things that
are in our defense systems, that are in our electric grids,
that are in our automobiles, that are in our space systems.
Speaker 4 (27:49):
We need to bring.
Speaker 11 (27:50):
That kind of manufacturing, those technologies, and those materials back
into the United States. It is a high priority of
the Trump administration.
Speaker 3 (27:58):
Secretary, right You spend a lot of time talking to executives,
as does the President. I just want you to rehear
what the Nvidia CEO said on the hill just this week.
Speaker 2 (28:08):
Take a listen.
Speaker 12 (28:09):
In order for this industry to thrive, we need to
build these systems, of course, but we also need a
progressive growth and industry oriented energy policy, which this president
has really put his way behind. I really appreciate that
without energy we can't possibly have new growth industries.
Speaker 3 (28:29):
An industry focused energy policy for AI Secretary, right, what
does that industry policy look like?
Speaker 11 (28:40):
That means getting the barriers out of the way of
energy production. The Bidy administration spent four years in sort
of an all of government approach to impede the production
of hydrocarbons in the United States for all energy sources.
But hydrocarbons are over eighty percent of US energy when
I was born and they are today.
Speaker 4 (29:00):
So if you stand in the way of.
Speaker 11 (29:02):
Our main energy system, guess what you get higher prices.
We grew our electricity production only two percent twenty percent
price rise.
Speaker 4 (29:10):
So to achieve in Videos.
Speaker 11 (29:12):
And America's dream to win the AI race, we've got
to produce a lot more electricity, a lot more energy
of all sorts in the United States, and all the
government needs to do is get out of the way
a little bit of common sense. There's American businesses, American capital,
and American technologies ready to roar, and President Trump's goal
is to unleash that American energy, that American capital and
(29:34):
let American energy production grow sexually.
Speaker 3 (29:37):
Right though, is there a potential that you're accidentally getting
in the way because of geopolitics and trade issues? Because
the energy lack of in many ways is an infrastructure
and supply chain issue. You don't have the turbines to
be able to bring the energy at the infrastructure rate
that the CEOs want to see. There's not enough equipment.
(29:57):
Is there enough time to pivot to make that in
the US?
Speaker 4 (30:03):
Oh.
Speaker 11 (30:03):
I've spoken to the turbine manufacturers and they are in
huge demand right now. But ge Vernova made twenty seven
of them last year. They'll make eighty of them next year.
So the Americans are ingenious and with a little bit
of regulatory common sense, they can ramp up their capacity rapidly.
So no, I'm quite excited about how much new energy
(30:25):
production capacity we'll see in the United States under construction today.
And a lot more will be under construction by the
end of this year. I think we will ramp it
up in time. But you're right, it's going to be
a race. It's going to be a race, but we
must lead in AI and that means we must rapidly
grow our energy production. But we're up for the job.
Speaker 4 (30:43):
Secretary, right, how reliant will the AI boom in this
country be on fossil fuels? And while we have you,
what is the plan for the SPR Please?
Speaker 11 (30:57):
Well, foss the natural gas is by far the big
source of electricity in the United States, followed by nuclear
and coal. So that's what's going to power THEI race.
It's slow to build coal plants and nuclear plants are
very slow.
Speaker 4 (31:10):
We want to change that.
Speaker 11 (31:11):
But in the short term, the main source of additional
electricity that will power AI arms race is going to
be expanded natural gas electricity production. That'll be the workhourse
of winning the AI race. But a lot of solars
getting built, transmission, energy storage, all of the above that works,
that'll add to it. Your last question, sorry, repeated again.
Speaker 4 (31:33):
The status of the SPI Please.
Speaker 11 (31:37):
Hey, the SPR was half drained for the twenty twenty
two mid term elections. So we are filling it slowly
right now, but we're going to try to get money
through Congress to fill it more rapidly. But unfortunately, you
can only fill it at a much slower pace than
you can drain it, so it will take us years
to fill it back. But we will entirely fill it
because it's a strategic reserve. You got to have that
(31:59):
because you never know what's coming.
Speaker 3 (32:01):
We appreciate your time outside, of course, for in I
America Corporation US Energy Secretary Chris Wright, we love a
high vis jacket on this show.
Speaker 2 (32:09):
Meanwhile, let's get to the breaking news for you.
Speaker 3 (32:11):
Potential IPO coming as soon as next week. Etro is
said to be weighing actually going forward with its initial
public offering, having delayed it back in last month.
Speaker 2 (32:20):
They could be eyeing as soon as next week.
Speaker 3 (32:22):
No decision is yet finalized, but it's certainly been considered.
Speaker 2 (32:25):
Meanwhile, coming up.
Speaker 3 (32:26):
Roadblocks sees much better than expected jump in active users
will be speaking with the CEO, say Bazooki, that's next,
stick with us.
Speaker 2 (32:33):
This is Blue Meg Technology.
Speaker 3 (32:48):
Once again video game platform roadblocks. The shares on the
up and up. Of course, the company reported large and
expected jumping users for the first quarter with its daily
active players jumping twenty ninety seven point eight billion now
and that was for the first three months ending in March.
Dave Pazuki Redlox CEO joins us and Dave, are you
economic anxiety proof?
Speaker 2 (33:08):
You recession proof.
Speaker 10 (33:11):
Ed?
Speaker 13 (33:11):
Carolyn? Thank you for having me on the program. I
want to highlight significant performance in Q one. We just
shared yesterday on our Ernie's Call on our really mission
to get ten percent of the global gaming software market
running on the platform. Roadblocks is virtual, roadblocks is digital.
We do not have any supply chain issues. There is
(33:33):
no shortage of roadblocks, and we are contributing to the
US trade import export ratio. We're bringing cash into.
Speaker 3 (33:41):
The US and you're paying some of those content creators,
in particular developers. Dave, I'm interested in that ten percent figure,
Like what sort of timeframe are we talking here? Because
what you're at about three percent now?
Speaker 2 (33:53):
Am I right?
Speaker 13 (33:54):
We're at about two and a half to three percent.
We have shared consistently that we believe can grow at
greater than twenty percent year on year. We highlighted in
Q one growth rates much higher than that, including revenue
growth rates of twenty nine percent year on year, daily
active user growth rates of twenty six percent year on year,
(34:17):
and a couple really interesting highlights. Over thirteen users on
the platform, DAUS grew by thirty six percent year on
year and India huge market grew by seventy seven percent
year on year. So we really think it's attainable.
Speaker 4 (34:38):
Dave, I'm a passionate gamer in the over thirty category,
and I'd say that the biggest headlines right now are
the delay of GTA six high fidelity game and the
delay of switch to on the console side. Is that
where you think you're going to compete when you aim
ten percent market share? How did those two headlines impact
(35:01):
roadblocks and the platform.
Speaker 13 (35:03):
We have shared a roadmap including highlighting genre expansion into RPG,
sports and racing battle games on the platform. We are
seeing more of this on the platform. For example, we
recently NASCAR has teamed up with Driving Empire, Paramount teamed
(35:25):
up with SpongeBob simulator, PGA Tour has teamed up, so
we're seeing more and more of this. We shared that
these three genres which will contribute to us getting to
ten percent of the gaming space, We believe grew over
sixty percent year on year on the platform.
Speaker 4 (35:44):
Growing revenue. What role is advertising going to play.
Speaker 13 (35:49):
We think we already have some creators on our platform
who are making more money on advertising than they are
with virtual currency. We believe it's a natural complement. What
it's not big enough yet for us to break out
the numbers. We just released a partnership with Google that
will provide more video advertising for some of our developers.
(36:12):
So it's part of building an economic ecosystem, you know.
We also shared that over one hundred creators on the
platform made over a million dollars in the last twelve months,
So there's a huge variety of creators starting to make
good businesses.
Speaker 3 (36:28):
And look Wedbush for example, the analyst, they're saying that payment,
when it improves the content, it draws more people there, Dave.
But you'll also say, look, when you actually tell us
exactly you break out the numbers advertising, that's the next
catalyst for roadblock shares. Any timeframe on when you will
be able to break out the advertising numbers.
Speaker 13 (36:47):
We want to break out those numbers sooner as soon
as we can. They are growing, Stay tuned. We're looking
forward to that. That said, we're growing at enormous rates
with the core business of virtual currency, both on engagement
and on users, really significant outperformance in Q one.
Speaker 3 (37:05):
I'm going to go to the delicate side because last
time you joined us, Dave, it was all about parental controls.
It's all about the focus on safety. Now since we
last spoke, there's been a couple more legal cases come
your way. Look, these lawsuits aimed at you and at Discord,
and once again is about alleged grooming, sexual exploitation using
the platforms. How are you dealing and responding to those
(37:26):
particular lawsuits.
Speaker 2 (37:27):
How you feeling, Dave? As well as I know you
have your.
Speaker 3 (37:29):
Own family using it and you think seriously about this stuff,
I would.
Speaker 13 (37:33):
Say both optimistic and as well a humility for the
responsibility we have. You know, any single incident on our
platform is one too many, and you know there's almost
one hundred million daily users on the platform every day.
We take this as an enormous responsibility. We are taking
leadership here in that all communication on our platform is
(37:57):
filtered and goes through AI filters, which are getting enormously better,
including voice. There's no image sharing on our platform, so
there's less risk of some of the things that happen
in that area, and more and more we're focusing not
just on under thirteen, but on thirteen through seventeen year olds.
That's also a delicate age. We're starting to lean into
(38:19):
age verification around this. We work very heavily with local, state,
and federal law enforcement. Roadblocks is a dangerous place for
bad actors, so we have a big responsibility here.
Speaker 4 (38:31):
Dave, you talked about M and A actually in the
Roadblocks ecosystem during the call. Give me some solid numbers
on what that looks like and some MNA for the
company as well. Going forward.
Speaker 13 (38:44):
We have shared that there are over there's now three
creators on a run rate of over fifty million a year.
You can put some multiples on top of that and
estimate what their businesses might be worth. At our Developer
conference last year, we shared a prediction there'll be a
billion dollar valuation studio on the platform. We think that's very,
(39:07):
very possible. Internally, we haven't announced any M and A,
but we are generating a fair amount of cash. You know,
we have well north of three billion dollars of cash,
but no Roadblocks M and A plans right now.
Speaker 4 (39:19):
Deveyzekier roadblocks. Thank you very much for joining us on
Bloomberg Technology. Another social media platform or online platform we're
watching is Reddit. The social media site said it expected
revenue in the current quarter to be better than estimates,
with Q two sales between four hundred and ten and
four hundred and thirty million dollars. I spoke we've Reddit
Coogen Wong earlier today.
Speaker 14 (39:39):
On the user side, Reddit is becoming more accessible outside
of the US for non English speakers, and we do
that a couple ways. The first is using machine translation
to take universal conversations things like life, experience, parenting, fandom,
and translate that into local language so that folks in
France and Germany, et cetera can enjoy it in local language.
(40:01):
The second thing we're doing is recruiting moderators in those
countries and developing thriving local communities, because Reddit is great
when it's global and it's local, and so those communities
are creating a very local feel for you know, redditors
in France and Germany and our focused countries. Right now,
(40:23):
we have eight focused markets that are getting this treatment,
and they're growing two times as fast as the rest
of international daily Active uniques, which is great to see,
and we'll be expanding that. So we have Brazil, we
have parts of countries in Southeast Asia, but that treatment
will expand to the rest of the year. On the
revenue side, what's interesting is I just came back from
(40:45):
visiting our Australian and European teams and there's really tremendous
momentum there and there's a lot of new advertisers coming
on and obviously that's reflected in the growth that I
mentioned before.
Speaker 4 (40:55):
Jenny, the other part of the business is data data
licensing in the AI context, right that the pitch that
you give to those developing frontier models is that Reddit
is contemporaneous, there is new and genuinely human contribution to
the platform, and that therefore the data is valuable. You know,
we know about all the big names that are working
(41:17):
on next gen models throughout the calendar year. How do
you ensure that your data licensing deals and your targets
for new deals line up with them starting the training
process on their next model.
Speaker 14 (41:31):
Well, I think when we talk about data licensing, what
we're really talking about is the fact that Reddit data
is really valuable, and it's valuable for others to build
products around, and it's valuable for us to build products around.
I would say we're open for conversations, and we're really
you know, we're pleased with the partnership so far, and
we're really excited about what.
Speaker 7 (41:52):
We can build, what we can build.
Speaker 14 (41:53):
I mean, you see this with Reddit answers, which we released,
you know, globally this week. We don't have anything new
to share on this right now, but I'd say we're
open for conversations. We're excited about the products that we
can build.
Speaker 2 (42:05):
Gen Wong there, Reddit COO.
Speaker 4 (42:15):
Time for talking tech. First up, the EU slapping a
six hundred million dollar fine on TikTok owner Byte Dance
for illegally sending user data to China. TikTok saying it
would appeal the decision, claiming it never received a request
from Chinese authorities. Plus Timus shifting to a local fulfillment model,
planning to sell goods only from local US merchants to
American consumers. It's a move aimed at avoiding tariffs to
(42:38):
keep prices lower, and Oios delayed IPO plans yet again,
holding off into its earnings are stronger. Market turbulence is
also a factor. This is the third time the company's
put off its IPO.
Speaker 3 (42:50):
Meanwhile, we get that news, of course that eToro is
still going ahead with it potentially next week. That does
it for this edition of BlueBag Technology. What joy to
have you here next to me.
Speaker 4 (42:58):
It's been an intense earnings We've got a lot done earning.
Still the story in markets, right, let's have a look
at what is moving. And you know the names that
we've covered throughout the show, they're idiosyncratic Apple. That's a
big decline for Apple, right if you look at historic norms.
And then what about take two carracter, Well, I'm.
Speaker 2 (43:15):
Sorry, you'll probably go shed a tear.
Speaker 3 (43:18):
Crime theft auto six so you're too emotional for you
to talk about of by six point six percent, another delay,
but look, profits still go coming the mentionally in video
up to two point seen percent. Don't forget about the podcast.
This is the Bloomberg Technology
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