August 6, 2025 • 42 mins
Bloomberg’s Caroline Hyde and Ed Ludlow speak with AMD CEO Lisa Su about the company’s earnings report and where it sees demand coming from. Plus, OpenAI is said to be selling shares at a $500 billion valuation. And the White House says Apple will announce an additional $100 billion domestic investment.
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Eva low in Sent Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
The White House says Apple will commit to spend another
one hundred billion dollars on domestic manufacturing.
Speaker 4 (00:30):
Plus, we speak with AMD CEO Lisa Sue on the
back of the company's earnings.
Speaker 3 (00:35):
And Bloomberg reports Open aiyes in talks for a potential
insider share sale that would value the company at five
hundred billion dollars extraordinary valuations.
Speaker 4 (00:46):
I turn my attention to the companies that are already
public and already reporting earnings ed and actually I'm on
the downside. They're all in the red at the moment.
Quickly wit through what AMD is up to down the worst.
It's October twenty twenty four. This is the China concerns,
the idea of when we're going to seem I three
or eight actually getting into the hands of Chinese customers,
non enough charity. We dig into that with Lisasu a little.
Speaker 2 (01:07):
Bit in the show.
Speaker 4 (01:08):
Because remember the earnings did beat on expectations thirty two
percent growth and revenue. I'm looking at Disney also beating,
but again there is a concern perhaps around age old
entertainment movies about TV that didn't manage to live up
to expectations, held back some of those profitability growth targets.
We're looking at Disney off by three percent, uber also
by two point four percent.
Speaker 2 (01:28):
It too be It too actually.
Speaker 4 (01:30):
Said they're going to be doing twenty billion dollar buy back,
but they're going to have to invest in autonomous and
maybe that's the insecurity here, Ed, But what do you got?
Speaker 2 (01:37):
Okay, let's get to that Apple news.
Speaker 3 (01:39):
The stocks actually just come off session highs, but it's
on track for its biggest jump since early May. One
hundred billion dollars in additional investment in US manufacturing and
supply chain. But here's the thing, that's all coming from
the White House. So let's get out to Washington, DC
and bloombergs Tyler Kendall, who joins us from the White
House as we wait for I guess the Apple side
(01:59):
of what's happen happening?
Speaker 2 (02:00):
But Tyler, what do we need to know?
Speaker 5 (02:02):
Yeah?
Speaker 6 (02:03):
Hey, Ed, Well, the White House says that this one
hundred billion dollar investment pledge is expected to go towards
a new manufacturing program that would in theory bring more
of Apple supply chains to the US, and the official
says that this brings the cumulative investment from Apple to
six hundred billion dollars. Because, as you well know and mentioned,
this bill A builds on a previous five hundred billion
(02:26):
dollar pledge from the company over four years. But with
that pledge we saw some really specific investment angles, including
that some of it would go towards building a factory
in Texas that holds AI servers. Part of it would
go towards twenty thousand jobs in the US really focused
on training as well as research and development. Now, our
reporting indicates that while this investment is substantial, it likely
(02:46):
falls short for the full production shift that this White
House really wants to see, though it is worth pointing
out twenty four percent of Apple suppliers are based in
the US already, the most of any country. Still, well,
we'll have to see if it's enough for President Trump
to perhaps give some sort of a reprieve when it
does come to the company. We know that the CEO team,
(03:08):
Tim Cook, has been lobbying for some sort of carve
out here, considering that earlier this year, President Trump had
threatened a twenty five percent tariff ed if Apple did
not move production to the United States.
Speaker 4 (03:19):
Amid all of this, of course, is that threat on
Apple exclusively, but also there's threats on high tariff for India,
where they've been shifting some of their supply chain to Tyler.
As we know, it is incredibly difficult, if not nigh
on impossible for them to really bring production of the
iPhone to the United States. Do you think that that's
starting to curry favor or at least appreciation in the administration.
Speaker 6 (03:42):
Right Well, today we saw really an escalation when it
did come to India rate. President Trump now posing an
additional twenty five percent tariff over India's imports of Russian
energy supply, which would bring the tear freight on that
country up to fifty percent. They're expected to be stacked
on top of each other. That additional rate to go
into effect in the next twenty one day, So we'll
have to see if there's some sort of negotiation that
(04:03):
happens here. It is clear though that the administration is
going to like this investment. The White House is already
out touting it because they really want to start to
see these funds coming in. And if you look at
all the unique deals perhaps that we've gotten from our
training partners so far, a lot of them do ultimately
have to do with investment funds. And the second thing
that I'll also put on your radar is that we
are expecting those sector specific tariffs to come down soon.
(04:26):
This administration has said we can see them as soon
as next week when it comes to chips. But really
important to keep in mind that the Section two thirty
two investigations, yes, are into semiconductors, but they're into the
entire supply chain, which means that we could really see
some wide ranging impacts.
Speaker 2 (04:40):
That's far.
Speaker 4 (04:40):
One hundred billion dollar extra commitment adds one hundred and
twenty billion dollars in terms of market cap to Apple
on the day, Tyler Kendall, thank you. Let's check in
on other companies now. Earnings Disney lower after the media
company reported third quarter revenue actually coming in slightly below
expectations but highlighting strength and streaming and the sparks business bugs.
(05:01):
Felix Jullett joins us for more look, they were ever
so slightly amiss in terms of general revenue growth of
just two percent, But it really seems to be the
old school part of the business they let them down.
Speaker 7 (05:12):
Yeah, the traditional part of the business in terms of
you know, the movie studio, the cable and broadcast channels
are all you know, continuing to show decline and that
you know has been offside someone by the growth in
streaming and parks, which have been very strong.
Speaker 2 (05:30):
Felix.
Speaker 8 (05:30):
Uh.
Speaker 3 (05:31):
Streaming is many parts. But listening to Bob Iiger on
the Cool Sports, I just want to recap his position
on ESPN because I think it's worth discussion.
Speaker 2 (05:41):
Listen to this.
Speaker 5 (05:42):
We're building ESPN into the pre eminent digital sports platform
with our highly anticipated Director consumer sports offering launching on
August twenty first, and there are just announced plans with
the NFL that will expand ESPN's programming and content offerings
for fans.
Speaker 2 (06:00):
August twenty first, not far away.
Speaker 3 (06:02):
Like how big a piece of the strategy is sports
and streaming and combination?
Speaker 7 (06:06):
Oh, a huge part of the strategy. I mean, they
want to grow their advertising revenue and streaming. To do that,
you need live events. There's nothing bigger in live events
than the NFL. This deal with the NFL that they
announced today, NFL gets a stake in ESPN and ESPN
gets control of some of the NFL's media properties, including
the Red Zone NFL Network, and also crucially, we'll get
(06:28):
more NFL games as part of this package. That's huge.
It's going to help them in terms of growing their
advertising business. And at the same time they announced the
deal today with TKOSWWE, the Wrestling Network, they're going to
get a bunch of big live events, including in WrestleMania. Again,
that too is going to bolster this new ESPN product
(06:49):
and get more people watching it at particular times, which
will help them with advertisers.
Speaker 4 (06:55):
Is there going to be any regulatory concern around this
about just the big getting to a bigger in the
world of sports.
Speaker 7 (07:02):
I mean, yeah, I think that this is going to
have to get regulatory approval. As we've seen with Paramount,
that can cause a lot of problems in this current
environment with the Trump administration, So that is a concern,
But I think you know, what they're trying to do
is again just build up. You know, they've been talking
about this direct to consumer ESPN product for years now.
(07:24):
This is a huge launch. It's been a long time
in the making and to come out with news that
you're going to have more NFL games, more WWE. I
think that's what they're trying to drive the excitement around
at the moment.
Speaker 3 (07:35):
Felix, you learn when you cover technology earnings in particular,
sometimes it's what they don't say that drives stories. And
I'm sorry to even ask this, but what's the latest
on Bob Eiger?
Speaker 2 (07:46):
Like is he going to be there.
Speaker 3 (07:47):
Forever and ever infinity or do they have some plans
in place for what happens next?
Speaker 7 (07:52):
Yeah, I mean, the succession issue with Disney never quite
goes away. You know, it's been the focus of investors
long time. They bodged it the last time Bob came back.
They have to get it right this time. You know,
there's been endless speculation about who that's going to be.
Looks like the internal candidates are really getting narrowed down.
(08:13):
But you know, again, TBD, that's all the next chapter
of Disney and they have to really stick the landing
this time.
Speaker 3 (08:27):
Welcome to our global audience across Bloomberg television and radio.
We're joined by AMD CEO Lisa Sue. And it was
such an interesting quarter to look back at Data Center
in particular CPU strength, not just accelerators, strong AI outlook
on accelerators, gaming PC, and then some concern about the
future of the China business. But Caroline and I Lisa
(08:50):
have talks for quite a while now about AMD as
the best performing chip stock so far this year. I
wondered if we start by just asking what in the
quarter changed for a MD what the kind of biggest
move forward was, do you think.
Speaker 8 (09:05):
Yeah, absolutely so. First of all, Ed and Caroline, great
to be here with you. We always, you know, look
at these things and say, when we have a business
where all of our businesses are actually performing extremely well,
it's a good it's a good place to be.
Speaker 9 (09:19):
So we had a very.
Speaker 8 (09:20):
Strong first half of the year, you know, second quarter
up thirty two.
Speaker 9 (09:23):
Percent year over year.
Speaker 8 (09:24):
We're guiding to a third quarter you know, up twenty
eight percent.
Speaker 9 (09:28):
And underneath that what you see is.
Speaker 8 (09:30):
You know, first of all, data center business is doing
extremely well. Our server CPUs are continuing to gain share
in cloud and in enterprise. One of the things that
we're seeing with AI is the AI investments from the
largest hyperscalers are actually pulling you know, both GPU and
CPU revenue, you.
Speaker 9 (09:48):
Know, which is good for us overall.
Speaker 8 (09:50):
You know, augentic AI actually requires lots and lots of
compute going forward. We're also seeing strength in you know,
PCs as well as gaming. Our products are extremely well positioned,
whether you're talking about you know, consumer or commercial. And
then we're also seeing you know, some improvement in the
embedded side of our business as you know, that is
(10:10):
also you know, going to I would say, return to
growth in the second half of the year. So we've
seen a lot of positive signals over the last ninety
days in terms of, you know, what the market needs
from computing and sort of the investment and things. You know,
there are some questions about China, of course, which you
know we can certainly talk about.
Speaker 3 (10:29):
Well, let's talk first about the AI accelerator outlook, because
actually from analysts to investors, to develop a community, when
we say that you're coming on the show, we get
questions from all quarters. You had said that the AI
accelerator business will grow to the tens of billions, and
what I'm kind of seeing is people just want granularity
from Lysia a little bit like when does that happen
(10:50):
and when does it happen? And you talked about the hyperscalers.
But what's the growth pathway to tens of billions in
accelerator revenue?
Speaker 8 (10:58):
Yeah, absolutely, ed, So let me give you a few
important markers. So what we said is the second half
of the year, our growth would be primarily driven in
the data center by accelerators. We launched a new product
just in June I three fifty five product. It's extremely competitive.
We really like how we stack up in terms of
(11:19):
total cost of ownership for inferencing and training workloads. Customers
really like that product. That's driving some of our second
half growth, and certainly when we talk about our sequential
growth into Q three, that's being primarily driven by that
accelerator capability.
Speaker 9 (11:34):
And now when you.
Speaker 8 (11:34):
Extend forward, you know I've said that the AI TAM
for accelerators and data center will be over five hundred
billion over the next couple of years. You know, we
expect to get a large portion of that new accelerator
TAM and that's how we get to tens.
Speaker 9 (11:50):
Of billions of dollars.
Speaker 8 (11:51):
Very key is also, you know, we've accelerated our roadmap
and so we are on an annual cadence and next
year we'll have yet a new capability with our four
hundred series, which will bring full rack level solutions, which
will be another giant step forward in terms of capability
for you know, AI solutions. So I think that's the
(12:11):
roadmap and path for the next couple of years. We're
really excited about the traction. We're getting lots of customer
validation saying hey, you're on absolutely the right path, and
you know we're making strong progress towards those goals.
Speaker 4 (12:25):
Lisa, the granularity there was demanded time and time again
on that earning score with analysts was around China though,
and I know it's so hard to give because in
many ways, as m I threeh eight, it's depending on
the licenses from the US government.
Speaker 9 (12:38):
How are those discussions going with.
Speaker 4 (12:40):
The US government. How quickly do you think they can
get through the backlog?
Speaker 9 (12:44):
Yeah, Caroline, definitely.
Speaker 8 (12:45):
Look, you know, I know people always want precision, and
what I will give you is exactly how things are
playing out from our standpoint. I think we've seen an
improvement over the last ninety days. You know, ninety days ago,
you know, we did not expect to believe to shift
to be able to ship to China because of some
of the regulations I think this administration, the Department of Commerce,
(13:07):
the government has actually been very open to trying to
find the right balance between national security and ensuring that
we have AI USAI technologies proliferated across the world. So
we think that's a great balance. We now know that
we have a number of licenses that are under review.
We've been given good indications that those are moving through
(13:29):
the review process, and we will certainly inform everyone when
the licenses are granted. But given that it's hard to
predict exact timing, just given all of the things that
are in front of the government at the moment, we
thought the right thing to do right now is just say, hey,
let's not include that in the third quarter revenue. But
even with that, we're growing twenty eight percent year over year,
(13:51):
which is fantastic growth rate. And if you asked me,
you know what we've learned in the last ninety days,
We've learned that the demand is even stronger in the
second half of the year. And we necessarily, you know,
thought maybe just a few months ago.
Speaker 4 (14:02):
And analysts really cooperated and thought it was right that
we should see such caution perhaps and not show up
in the numbers. But Lisa, I'm interested in the inventory
that you had been very clear about the eight hundred
million dollar knock on the fact that you couldn't access
China for a while. I know that most of those
manufacturing hadn't been complete, but do you think you can
unwind that eight hundred million how much you think can
(14:24):
you bring that back to bear?
Speaker 8 (14:26):
Well, we certainly expect that once licenses are approved, that
we will restart our supply chain and get those in place.
We do have, you know, a bit of time that
it takes to complete those, but we would expect to
be able, you know, to ship some of those products
as licenses are approved. And you know, again the exact
timing will depend on when licenses are approved. But I
(14:49):
again would hope that we don't get caught up in
something that I would say is moving actually in the
right direction and really see like the overall business is
doing extremely well. Right when I look at data center growth,
when I look at client and gaming growth, and really
the return to growth in the embedded those are the
key aspects to really understand about where the business is today.
Speaker 2 (15:13):
Lisa.
Speaker 3 (15:13):
The final question that we have on China, if I may,
is something that we've also discussed quite often with Video
and Jensen. One which is the idea that in the
interim period you just outlined, China's domestic chip makers have
made some progress on their own accelerators. Does a m
D make an assessment of that of how performance a
(15:36):
comparable Huawei or other Chinese accelerator is relative to them?
Speaker 2 (15:40):
I three hundred family.
Speaker 8 (15:42):
And of course, I mean, look, it's a very competitive
market out there. At the end of the day, everybody
wants AI computing, Like AI computing is the foundation for
you know, all the great things that we know that
AI can add to, you know, businesses and you know,
sort of.
Speaker 9 (15:58):
The overall capability.
Speaker 8 (16:00):
So yes, we're always looking at the competitive environment. That
being the case, you know, I think we are well positioned.
Speaker 9 (16:07):
Overall.
Speaker 8 (16:08):
Our roadmap for the rest of the world is very strong,
and we think is just getting stronger as we go forward,
and as it relates to China, it's something that we
have to work through with the administration, but as I said,
we've had very close conversations and we're making good progress there.
So from that standpoint, you know, I think the overall
competitiveness of our AI roadmap has never been stronger. And
(16:29):
we're excited about what we can deliver across you know,
AI GPUs as well as you know, our our CPU
franchise and all of the rest of our portfolio.
Speaker 3 (16:40):
This is Bloomberg Tech Live on Bloomberg Television and Bloomberg Radio,
and we're speaking with AMD CEO Lisa Sue Strong in
PC Strong in server particularly CPU. Is that an a
m D capturing market share story or is that just
a rebound in demand generally story?
Speaker 2 (16:59):
Lisa Well, I.
Speaker 9 (17:01):
Think it's both.
Speaker 10 (17:02):
Ed.
Speaker 8 (17:02):
I think the demand is is good. I think the
demand patterns are better. But clearly we're very, you know,
very competitive with our products. I think we have leadership
CPUs in both.
Speaker 9 (17:15):
Server and client.
Speaker 8 (17:16):
We've shown significant traction in cloud as well as enterprise,
and I think going forward you're going to see, you know,
enterprise customers want the best solution out there, and that is.
Speaker 9 (17:27):
You know, a m D for computing and gaming.
Speaker 4 (17:30):
Nisa so Strong. I'm interested into the nuance of pull
forward because you said on the call that you didn't
see a whole lot of pull forward. Are people trying
to get ahead of tarifs and price increases, but did
you see any.
Speaker 9 (17:43):
You know, very little Caroline.
Speaker 8 (17:45):
I think what we look at mostly is not just
what we're selling in to customers, but we actually look
at what's being sold out at end customers, and what
we're seeing being you know, really transferred to end customers
is good demand. I mean, people are refreshing their data centers,
which is very positive. Right We're in a place where
(18:06):
computing is important, and so we're seeing strong refresh cycles
on the data center side. We're seeing strong pull through
of our of our solutions in the enterprise in PC,
and then from a gaming standpoint, again, we have a
very strong product cycle. So you know, there's it's always
hard to tell exactly what the impact of the current
(18:30):
tariffs are, but I would say that that's the smaller
part of the impact on our business. The larger part
is just strong products, you know, very good traction from customers.
Speaker 9 (18:40):
And looking at a stronger second half.
Speaker 4 (18:42):
Of the year, a stronger second half of the year
where you take some market share from Nvidia, Lisa, how
are you seeing that grow out and the ability to
compete with the next ranger chips.
Speaker 8 (18:53):
Well, we are very bullish on our overall roadmap capability.
I think the second half of the year as a
number of customers. You're really you're broadly adopting AMD.
Speaker 3 (19:06):
Lisa, I have a question from our audience, if that's okay,
a viewer of Bloomberg Tech and as you know, like
loads of AMD employees, your peers, technology industry.
Speaker 2 (19:15):
People want to hear what you have say. I'm just
going to read it to you.
Speaker 3 (19:17):
Can Lisa, please explain AMD's winning and gaming consoles. But
AI is where the margins are. Now, what's the plan
to make a MD indispensable to the next open AI
and not just cost effective alternative? I think to invideor
is what they're saying well ed?
Speaker 8 (19:36):
The best way to say that is for you know,
those of you who know us as a company, you
know we execute extremely well.
Speaker 9 (19:42):
You know, our roadmaps are strong.
Speaker 8 (19:45):
We're very excited about all of the progress that we've made.
You know, I three hundred was an excellent product. M
I three point fifty is you know, a big increase
above that, and then our next generation is also and
the key for us, if you look at our history,
our history is doing what we say we're going to do,
delivering to customers, delivering total cost of ownership and with that,
(20:07):
you know, being a great partner, and so from that standpoint,
I think you can be very confident that we have
a strong roadmap and we're going to.
Speaker 9 (20:14):
Execute on it well.
Speaker 8 (20:15):
And you know, our largest customers want to have a
dependable and good partner.
Speaker 4 (20:23):
It's been wonderful spending time with you, Lisa sou Amd CEO.
We thank you very much time now for talking tech.
First up, soft Bank shares they're actually higher on the
news that open Ai is set to sell shares at
a five hundred billion dollar valuation insider shares. As a company,
(20:45):
of course it has a big investment in but the
news reversed an earlier fall in the Japanese company stock
after it brought to net income that missed analyst expectations. Meanwhile,
the US has charged two Chinese nationals. We're sending it
tens of millions of dollars worth of advanced AI chips
to China, violating export restrictions. Now the defendants allegedly sent
sensitive technology from Nvidia, including h one hundred AI accelerators.
(21:07):
Lawyers for the pair couldn't be immediately located for comment.
And this mountain traversing robot dog is causing shares of
Chinese robotics companies to climb, but the mechanical dog is
from startup Unitary. China has been showing off its robotics
prowess in a lot this year, including with running and
kickboxing humanoids and a favorite of yours.
Speaker 3 (21:31):
Yeah, coming up, Matt Romberg, CEO of gaming creation platform Unity,
going to talk about that company's earnings. We're going to
talk more about the mobile gaming space, in particular what
the dev community has been really focused on. This is
Bloomberg Tech. Welcome back to Bloomberg Tech. I'm taking a
(21:56):
look at AMD largely to just recap the conversation we
just had with cly to Sue. The stock came off
session lows during the course of that conversation talking about
clear demand, particularly from hyperscalers in the AI accelerator market.
They do think that they can shift some of that
China specific AI accelerated inventory Carrow that they had written down.
That's one of the responsors she gave to you. PC
(22:18):
demand is very strong and they're taking market share. Was
a very clear signal. We'll continue to track it. It's
bouncing around a lot going on. Apple continues to push
higher one hundred billion dollars additional investment in US according
to the White House later today, we expect to hear more.
The stock's now up five and a half percent. That's
a big jump. Shopify is up nineteen and a half percent.
(22:39):
It's now become Canada's biggest company by market cap. It
is taking e commerce market share and absolutely barm storming
print from that company. And then super Micro is down
twenty one percent. Simple Story told us that in fiscal
twenty six they would get thirty three billion dollars sorry,
in sales. They previously told us forty billion. Everyone's going, well,
(23:00):
what's going on? You know, it's just not as strong
as they had previously told us.
Speaker 2 (23:03):
We have more ends.
Speaker 4 (23:04):
Yeah, and we've got more big slumps. Actually this time,
let's check out snapshares plunging after reporting second quarter sales
that fell short of Wall Street. The expectation said, Look,
the company blamed a technical issue with its ad buying
tools that basically set price points too low. The glitch
has now been fixed. But let's break down the numbers
of the outlook with jasmin Enberg where poased to welcome
a back VP and principle analyst and eMarketer. This is
(23:26):
such a self inflicted wound and the market doesn't seem
to be well forgiving them for it.
Speaker 11 (23:32):
Yeah, absolutely, I mean it really was a dismal quarter
for a SNAP, and even before it reported its earnings,
I was saying that it wasn't looking great for the company,
and that had less to do with the economic uncertainty
and tariffs, which of course it had warned about at
the end of Q one, and more to do with
foundational structural issues within its AD platform and its ability
(23:53):
to monetize. Now, I obviously could not have predicted that
it would have an ad glitch in Q two that
would result in the deceleration and growth, but I think
that really does point to these longer term, more deeper
challenges that it has within its business model. I do
think in a different context, investors might have been just
a little bit more forgiving, though probably not much more
(24:17):
forgiving because they tend to be with Snap. But you know,
STAP hasn't working very hard for quite some time on
revamping its AD platform focus really on direct response, and
I think they're getting frustrated. They're getting impatient because the results,
while sometimes there's progress, it's mostly been inconsistent. And then
if you take the larger context of meta and reddits
(24:39):
blowout earnings.
Speaker 9 (24:40):
For Q two. It makes it really hard.
Speaker 11 (24:42):
For Snap to shift responsibility to macro conditions or headwinds
and leaves very little room for mistakes.
Speaker 4 (24:50):
I mean, well said, why they consistently deliver is daily
active users, unless we forget there's almost half a billion
of them. But what's interesting is they're trying to move
away perhaps some more volatile ad side of it to
subscription is that working well.
Speaker 11 (25:06):
Snapchat Plus has been and continues to be a bright
spot for Snap. And one of the things that that
says to me is that while Snap still struggles to
roll out features for advertisers that they like and need,
they certainly know how to bring features to consumers that
they like and that they're willing to pay for. I
(25:27):
do think going forward, diversification of its revenue streams in
general is just going to be so much more important
for Snap, and Snapchat Plus continues to drive a lot
of its revenue growth, especially considering the fact that while
its monthly active user base showed really strong signs of
progress in terms of going getting toward that one billion
dollar or one billion user goal that it has, we
(25:51):
saw a lot of weakness in North America, which is
Snap's core market and where it makes most of its money.
And that also means then that Snap is going to
be more reliant on international markets going forward to monetize
via ads, and that's extremely challenging or more challenging because
it's harder to make money there. And again, the weakness
(26:13):
in North America points to structural problems.
Speaker 3 (26:16):
Just real quick, I appreciate what you said about the
response investors have to Snap sometimes, like I just always remember,
are they going up a lot or down a lot?
But that speaks to lack of consistency. Like Meta showed
us that all the stuff they've done around AI shaws
up the core breading but of business.
Speaker 2 (26:33):
Is Snap not experiencing something similar?
Speaker 11 (26:36):
Yeah, I mean I think Meta showed us that you
can send a lot of money on AI if your
core business is doing well, and it truly is. I mean,
Meta is a powerhouse. It continues to deliver on efficiency
and effectiveness for advertisers. You know, Snap has been playing
catch up to Meta in many ways, including in AI.
(26:56):
You know, it doesn't have the same scale and resources
that Meta has to build this powerhouse AI driven ad business,
but it certainly needs to do more work there. One
thing I will say for Snap though, is you know,
we saw an increase in SMB advertising small and medium
sized businesses, and I do think that that is, you know,
(27:18):
a direct result of its investments in AI in its
ad platform, because these advertisers are generally drawn to places
where it's easy to advertise, and that's you know, one
of the impacts that AI has on advertising and these platforms.
Speaker 3 (27:34):
Jasmine Enberg from me Marketer, thank you so much for
joining us on the program. Let's stick with earnings and
get out to gaming. Shares of Unity software actually now
lower by almost nine percent. Blinking and miss it kind
of situation. This morning, Caro, the stock had spiked after
the company reported better than expected second quarter earnings.
Speaker 2 (27:52):
Something's changed.
Speaker 3 (27:53):
Let's talk it through with Unity CEO Matt Brumberg.
Speaker 2 (27:56):
Well, help me.
Speaker 3 (27:58):
There was a good response. You beat expectations. There's particular
focus for you guys in the mobile gaming market. The
stock is sort of reverse direction, is down eight percent.
Speaker 5 (28:08):
Matt.
Speaker 2 (28:09):
You'll read on that. Please.
Speaker 12 (28:11):
Yeah, you know we're not stock investors or business builders,
so you know, my answer to that is a little
bit of who knows what we're really focused on is
building or growing and during business. And I think that
when we look back on the second quarter twenty twenty five,
the history is going to show that it was an
inflection point for our turnaround, sort of the time when
accelerated product development and delivering more for customers started to
(28:34):
show up in a really meaningful way in our business.
Speaker 13 (28:37):
And I think that's basically where we are.
Speaker 3 (28:40):
I really appreciate having you on the show. I take
a lot of interest in Unity because we recently have roadblocks.
CEO David Zooki on the show of their own Earnings
is probably more analogous in the gaming space to put
you nearer to a roadblock. Maybe you disagree, but mobile
gaming right now is a huge focus. How is that
a driver for your business and a prioritype It's.
Speaker 13 (29:02):
The biggest priority there is.
Speaker 12 (29:03):
We're effectively the operating system for the mobile gaming business. Globally,
seventy percent of the mobile games in the world are
built on Unity, and eighty five of the top one
hundred advertisers mobile game advertisers advertise with us. So what
we've really seen in the last year or so of
this turnaround is that when we make fundamental investments in
(29:24):
delivering better product for that set of customers for the
mobile gaming business. That our business is lifting, and we've
really seen that over the year, and we're actually really
excited about investor reaction over the course of the year
as well.
Speaker 4 (29:39):
I'm going to go back to perhaps the stock reaction
and what our own bloombag intelligence analysts have been saying
that and forgive me, it's not always bathed in positivity
because they say, look, this is a cuerential decline of
your Create segment in the next quarter that suggests muted
adoption of your Unity six offering. Just describe that. Is
that something you're seeing seeing, Jenna.
Speaker 13 (30:00):
I started, I think that's just incorrect.
Speaker 12 (30:04):
UNI six is the fast most the fastest adoption of
any version of you we've ever seen.
Speaker 13 (30:10):
It's the most stable, it's the most performant. So we've
been really really pleased by that.
Speaker 12 (30:15):
Again, you're drawing into wondering about the stock I would
just tell you it's much more likely to be the
one hundred plus percent run up over the past year
in anticipation what are sharply better results, and again it's
a kind of inflection point in our business.
Speaker 13 (30:31):
I would guess that has some more to do with those.
Speaker 4 (30:32):
Dynams love that context, Matt, give us the context of
the ad space, and you're encroaching a bit more on
app love in space for example, how do you compete?
How you seeing your self take market share or indeed
app love and still being a really strong competitor.
Speaker 12 (30:47):
Yeah, we don't really think about market share in this business.
The way this business works is performance based. Mobile advertisers
buy performance and they buy against their rows, their return
on investment targets, and they will buy infinitely across that
efficient frontier.
Speaker 13 (31:01):
So as we deliver.
Speaker 12 (31:03):
More value, customers will spend more money with us, and
our business will grow.
Speaker 13 (31:07):
And that's what's happening. This is a big.
Speaker 12 (31:11):
Competitive space with some of the largest, most competitive players
in the world operating in it, and we're really excited
about our ability to compete and not just now but
in the future.
Speaker 3 (31:22):
I'd love to end by talking just very quickly about
developers and the creator community. Like one of the big
issues in the end market the app store, Apple or
Google is revenue split and just what you're doing to
incentivize the creators, but also like bring everyone with you
if you're growing at that click.
Speaker 2 (31:39):
Yeah.
Speaker 12 (31:39):
I mean, we are the tools that those folks use
to build their experiences and then operate those business for
years and years in life service. So when we deliver better,
more effective tools, for example, to your point, to help
them monetize commerce in a native way, for example, and
help them acquire users more efficiently, and that business grows.
Speaker 13 (32:01):
So we're a partner in that growth.
Speaker 4 (32:02):
With them at Bromberg, CEO of Unity, it's great to
have some time with you.
Speaker 3 (32:14):
Bloomberg's reporting that open ai is in talks for a
potential share sale for current and former employees that would
put the company at a five hundred billion dollar valuation.
Speaker 2 (32:26):
That's the chart right there.
Speaker 3 (32:28):
The move would boost open AI's price tag, according to sources,
which is previously at three.
Speaker 2 (32:33):
Hundred billion dollars.
Speaker 3 (32:34):
Bloomberg's Shringafari broke the story and it's with us now.
The mechanism actually doesn't even really matter. It's an insider
share sale that sets this valuation of five hundred billion dollars.
But it feels like just yesterday that we broke the
story on the last three hundred billion dollar valuation. Tell
us about the jump, tell us about what we're hearing
from sources is going on.
Speaker 14 (32:56):
Yeah, I mean it's a significant jump in valuation, more
than two thirds of the last price tag, you know,
the last round that we reported on finalized in March,
led by soft Bank. Since then, we've seen strong user
and revenue growth as we've reported, but again, this price
tag would put open a eye in a new league
(33:16):
as one of the most highly valued private companies out there.
Speaker 9 (33:21):
If this sale were to go.
Speaker 4 (33:22):
Through, extraordinary. How it eclipses even the owner of TikTok
over in China and well ahead of close second is
sort of SpaceX here in the US. What's interesting is
we're getting so many updates to the product itself for
the world as well, Shoen. We're seeing how they're getting
in offering chatchipt to federal offerings with just one dollar.
They're trying to open source a little bit more. Does
(33:43):
this just build up the idea that this is going
to be the winner?
Speaker 14 (33:48):
I think it's still too early to say in the
AGI race, who, if anyone, will be the definitive winner,
but I will say this is an This has always
been a rapidly moving field, and I think the past
few months have been especially fast. We are seeing new
releases from open Ai this week. We have the open
Source model that just dropped, and it's widely expected that
(34:12):
their more major model update, GPT five is coming soon.
On top of that, you know, if you look to
the left and right, we have Anthropic also released an
update to its model, also in talks to have a
new round of funding that would more than double their
past valuation from just earlier this year.
Speaker 9 (34:31):
So I think this is.
Speaker 14 (34:32):
Really a sign that the ai market continues to grow,
and it does raise questions about are these valuations justified?
And I think that depends on how bullish you are
on the genai market as a whole.
Speaker 3 (34:45):
Sharen, reading your report, there's a lot of detail here.
I mean, for one important point is we understand why
open ai is doing this right with the secondary The
timing is because the talent wars and Sam Altman has
this workforce that he has to keep happy.
Speaker 14 (35:01):
Right, So, as we reported, one of the reasons why
Opening Eye wants to do this secondary share cal wight
makes sense is that it gives employees an opportunity to
essentially cash out. If you're working at Meta, which is
aggressively By the way, there's this fierce talent war going
on right now right and Meta has poached several prominent
(35:23):
open ai employees if they want to retain these employees.
You know, people want to be able to liquidate their
shares and this provides current informer employees a potential way
to do that.
Speaker 4 (35:36):
Sharan KAfari, thanks so much for the update on open Ai.
Now let's get back to the public markets where Uber
is already out with its earnings, but after the bell
we get plenty more Lyft, Door, Dash, Airbnb. There is
one woman who covers them all, Natalie Lung. You've got
a busy day. Let's talk about Uber because it's actually
trading lower. Is that more about how father shares had
run into this or the worry about sort of the
(35:57):
spending or capex on autonomous here.
Speaker 10 (36:00):
It's a little bit of both. Definitely, there's a lot
of excitement going into the earnings today, which was mostly
a beat, But there was a small miss in the
core ride share business by Uber, and that was really
offset by the strong performance of the delivery units.
Speaker 9 (36:15):
So there's a lot for us to look at.
Speaker 10 (36:17):
In terms of what it means for consumer spending and investors.
Was also excited to hear more about the autonomous strategy
in the company.
Speaker 3 (36:25):
It's a twenty four hour period that's like the super
Bowl for Natalie Lung. In the gig economy and at
based tech company space, you're super busy, as Karen said,
But what always happens You get Uber and then you
get Lyft. And there's obviously some read across. What are
the expectations for the smaller of the two.
Speaker 10 (36:43):
For Lift, they're still expected to post double digit growth
in the key metric of gross bookings and for this
quarter in particular, we want to look at the third
quarter outlook because it's the first time they're including the
free Now business, which they completed the acquisition last week,
and that will add business from new European markets such
(37:05):
as UK and Germany. So that is something of interest
for me.
Speaker 4 (37:09):
Today doing in Europe and Germany and more broadly expansion
their DoorDash has been making a bit of m and
a over in the UK. It shares been on a
tear this year, up fifty three percent. Where do we
expect numbers for that company to go?
Speaker 10 (37:21):
Yeah. Similarly, on the back of Uber's very strong delivery results,
DoorDash is also expected to post nearly twenty percent growth
on that top line as well. Their delivery deal has
not closed yet, so might not be seeing those results
there yet, but pretty strong spending on the US side
is expected.
Speaker 3 (37:42):
Let's complete the grand slam, the complete sweep and do Airbnb.
Speaker 2 (37:46):
What are you looking for in that name?
Speaker 10 (37:48):
Yeah, it's again. It's a first quarter where we'll see
results from their newly relaunched Experiences and a Lacarte services business,
which Branchaskey has said would add one billion in analyzed
revenue for the company. So we will see the first
results from there, as well as a broader sentiment on
(38:09):
US travel.
Speaker 3 (38:11):
One question I'd have is how does Natalie Lung do
all of those earnings at the same time. Bloomberg's Natalie
Lung busy evening for you ahead, Thank you very much.
Speaker 2 (38:26):
Okay.
Speaker 3 (38:26):
Apple shares are on the screen, and we're pushing towards
session highs, up almost six percent now following the announcement
that the White House says the iPhone maker will invest
an additional one hundred billion dollars in the United States,
Bloomberg's senior executive editor for Tech, Tom.
Speaker 2 (38:42):
Jarles, is here.
Speaker 3 (38:43):
It's a big number in isolation, sort of but it's
also got to be taken in aggregate.
Speaker 9 (38:48):
Absolutely.
Speaker 15 (38:49):
Look, Apple spends a lot on these types of initiatives
all the time. They have already been planning to spend
hundreds of billions of dollars in the coming years. The
Trump administration likes big, round, big honkin numbers, right, and
this is a way for them to say, we've scored
(39:11):
a victory. We are bringing manufacturing back to the United States.
On Apple's part, making these pledges, throwing these numbers out there,
and again, these are plans that this is money that
they do plan to spend. This is a good way
for them to as as BI analysts have said so eloquently,
softened dampen Trump's ire because they still do have a
(39:32):
lot of their supply chain outside of the United States.
Trump administration wants to say big US corporations are bringing
manufacturing back to the United States. This is the question
that we need to ask, and we will be asking
in the coming months and weeks, and that is how
much of real production of the iPhone, how much of
Apple's high end products is actually going to come to
(39:56):
the United States versus China, versus India. That's the real question,
Or is it stuff around the edges, And that's a
question that we're going to be asking Apple to and
a lot of other people are going to be asking
Apple in the coming weeks.
Speaker 4 (40:09):
Yeah, because Tom, the five hundred billion thus far that
had already been announced, well, that was more about servers,
that was actually about training, and that was in some
ways we saw a little bit of the chunk of change.
I think it was about five million being allocated to
actually some rare earths as well. What are we actually
anticipating as to how much, if any, can really be
for the iPhone?
Speaker 6 (40:28):
Right?
Speaker 15 (40:29):
And some of this is also them committing to purchasing
more from US suppliers. Again, this is part of their
supply chain. They need these parts, they will be spending this,
But will this be creating lots of jobs? Will people
be manufacturing assembling these products in the US? Time will tell. Again,
these companies like to they've already been planning to spend
(40:52):
a lot of money and they're putting lots of big
round numbers around them. And again it's an opportunity for
the Trump administration to claim victory. But if you're talking
about server farms, if you're talking about buying from US manufacturers.
If you're talking about training facilities, there's a big delta
between that and actually putting together, piecing together these high
(41:16):
end devices and moving that supply chain out of India
and out of China. Look, it's in Apple's interest to
diversify their supply chain. No one is doubting that. So
much of it is relying on China and that really
bit them and a lot of other people, you know
where during the pandemic and they really need to kind
(41:36):
of diversify away from that.
Speaker 4 (41:38):
President Trump doesn't particularly what I'm only diversifying into India.
Bloomberg's Tom Jiles, great to have you. Thank you for
the analysis that does it even this edition of Blomberg
Tech and what a show.
Speaker 3 (41:49):
Yeah, and jokes aside, like it's a really heavy earnings period.
Still we move from the megacaps, but there's a lot
of names giving numbers. We're learning a lot about the
world of technology. Recap it on the podcast. You know
where to find it on the Bloomberg terminal, as well
as online on Apple, Spotify and iHeart from San Francisco and.
Speaker 2 (42:06):
New York City. This is Bloomberg Tech.
Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive
from coast to coast with Caroline Hide in New York
and Eva low in Sent Francisco.
Speaker 2 (00:22):
This is Bloomberg Tech coming up.
Speaker 3 (00:24):
The White House says Apple will commit to spend another
one hundred billion dollars on domestic manufacturing.
Speaker 4 (00:30):
Plus, we speak with AMD CEO Lisa Sue on the
back of the company's earnings.
Speaker 3 (00:35):
And Bloomberg reports Open aiyes in talks for a potential
insider share sale that would value the company at five
hundred billion dollars extraordinary valuations.
Speaker 4 (00:46):
I turn my attention to the companies that are already
public and already reporting earnings ed and actually I'm on
the downside. They're all in the red at the moment.
Quickly wit through what AMD is up to down the worst.
It's October twenty twenty four. This is the China concerns,
the idea of when we're going to seem I three
or eight actually getting into the hands of Chinese customers,
non enough charity. We dig into that with Lisasu a little.
Speaker 2 (01:07):
Bit in the show.
Speaker 4 (01:08):
Because remember the earnings did beat on expectations thirty two
percent growth and revenue. I'm looking at Disney also beating,
but again there is a concern perhaps around age old
entertainment movies about TV that didn't manage to live up
to expectations, held back some of those profitability growth targets.
We're looking at Disney off by three percent, uber also
by two point four percent.
Speaker 2 (01:28):
It too be It too actually.
Speaker 4 (01:30):
Said they're going to be doing twenty billion dollar buy back,
but they're going to have to invest in autonomous and
maybe that's the insecurity here, Ed, But what do you got?
Speaker 2 (01:37):
Okay, let's get to that Apple news.
Speaker 3 (01:39):
The stocks actually just come off session highs, but it's
on track for its biggest jump since early May. One
hundred billion dollars in additional investment in US manufacturing and
supply chain. But here's the thing, that's all coming from
the White House. So let's get out to Washington, DC
and bloombergs Tyler Kendall, who joins us from the White
House as we wait for I guess the Apple side
(01:59):
of what's happen happening?
Speaker 2 (02:00):
But Tyler, what do we need to know?
Speaker 5 (02:02):
Yeah?
Speaker 6 (02:03):
Hey, Ed, Well, the White House says that this one
hundred billion dollar investment pledge is expected to go towards
a new manufacturing program that would in theory bring more
of Apple supply chains to the US, and the official
says that this brings the cumulative investment from Apple to
six hundred billion dollars. Because, as you well know and mentioned,
this bill A builds on a previous five hundred billion
(02:26):
dollar pledge from the company over four years. But with
that pledge we saw some really specific investment angles, including
that some of it would go towards building a factory
in Texas that holds AI servers. Part of it would
go towards twenty thousand jobs in the US really focused
on training as well as research and development. Now, our
reporting indicates that while this investment is substantial, it likely
(02:46):
falls short for the full production shift that this White
House really wants to see, though it is worth pointing
out twenty four percent of Apple suppliers are based in
the US already, the most of any country. Still, well,
we'll have to see if it's enough for President Trump
to perhaps give some sort of a reprieve when it
does come to the company. We know that the CEO team,
(03:08):
Tim Cook, has been lobbying for some sort of carve
out here, considering that earlier this year, President Trump had
threatened a twenty five percent tariff ed if Apple did
not move production to the United States.
Speaker 4 (03:19):
Amid all of this, of course, is that threat on
Apple exclusively, but also there's threats on high tariff for India,
where they've been shifting some of their supply chain to Tyler.
As we know, it is incredibly difficult, if not nigh
on impossible for them to really bring production of the
iPhone to the United States. Do you think that that's
starting to curry favor or at least appreciation in the administration.
Speaker 6 (03:42):
Right Well, today we saw really an escalation when it
did come to India rate. President Trump now posing an
additional twenty five percent tariff over India's imports of Russian
energy supply, which would bring the tear freight on that
country up to fifty percent. They're expected to be stacked
on top of each other. That additional rate to go
into effect in the next twenty one day, So we'll
have to see if there's some sort of negotiation that
(04:03):
happens here. It is clear though that the administration is
going to like this investment. The White House is already
out touting it because they really want to start to
see these funds coming in. And if you look at
all the unique deals perhaps that we've gotten from our
training partners so far, a lot of them do ultimately
have to do with investment funds. And the second thing
that I'll also put on your radar is that we
are expecting those sector specific tariffs to come down soon.
(04:26):
This administration has said we can see them as soon
as next week when it comes to chips. But really
important to keep in mind that the Section two thirty
two investigations, yes, are into semiconductors, but they're into the
entire supply chain, which means that we could really see
some wide ranging impacts.
Speaker 2 (04:40):
That's far.
Speaker 4 (04:40):
One hundred billion dollar extra commitment adds one hundred and
twenty billion dollars in terms of market cap to Apple
on the day, Tyler Kendall, thank you. Let's check in
on other companies now. Earnings Disney lower after the media
company reported third quarter revenue actually coming in slightly below
expectations but highlighting strength and streaming and the sparks business bugs.
(05:01):
Felix Jullett joins us for more look, they were ever
so slightly amiss in terms of general revenue growth of
just two percent, But it really seems to be the
old school part of the business they let them down.
Speaker 7 (05:12):
Yeah, the traditional part of the business in terms of
you know, the movie studio, the cable and broadcast channels
are all you know, continuing to show decline and that
you know has been offside someone by the growth in
streaming and parks, which have been very strong.
Speaker 2 (05:30):
Felix.
Speaker 8 (05:30):
Uh.
Speaker 3 (05:31):
Streaming is many parts. But listening to Bob Iiger on
the Cool Sports, I just want to recap his position
on ESPN because I think it's worth discussion.
Speaker 2 (05:41):
Listen to this.
Speaker 5 (05:42):
We're building ESPN into the pre eminent digital sports platform
with our highly anticipated Director consumer sports offering launching on
August twenty first, and there are just announced plans with
the NFL that will expand ESPN's programming and content offerings
for fans.
Speaker 2 (06:00):
August twenty first, not far away.
Speaker 3 (06:02):
Like how big a piece of the strategy is sports
and streaming and combination?
Speaker 7 (06:06):
Oh, a huge part of the strategy. I mean, they
want to grow their advertising revenue and streaming. To do that,
you need live events. There's nothing bigger in live events
than the NFL. This deal with the NFL that they
announced today, NFL gets a stake in ESPN and ESPN
gets control of some of the NFL's media properties, including
the Red Zone NFL Network, and also crucially, we'll get
(06:28):
more NFL games as part of this package. That's huge.
It's going to help them in terms of growing their
advertising business. And at the same time they announced the
deal today with TKOSWWE, the Wrestling Network, they're going to
get a bunch of big live events, including in WrestleMania. Again,
that too is going to bolster this new ESPN product
(06:49):
and get more people watching it at particular times, which
will help them with advertisers.
Speaker 4 (06:55):
Is there going to be any regulatory concern around this
about just the big getting to a bigger in the
world of sports.
Speaker 7 (07:02):
I mean, yeah, I think that this is going to
have to get regulatory approval. As we've seen with Paramount,
that can cause a lot of problems in this current
environment with the Trump administration, So that is a concern,
But I think you know, what they're trying to do
is again just build up. You know, they've been talking
about this direct to consumer ESPN product for years now.
(07:24):
This is a huge launch. It's been a long time
in the making and to come out with news that
you're going to have more NFL games, more WWE. I
think that's what they're trying to drive the excitement around
at the moment.
Speaker 3 (07:35):
Felix, you learn when you cover technology earnings in particular,
sometimes it's what they don't say that drives stories. And
I'm sorry to even ask this, but what's the latest
on Bob Eiger?
Speaker 2 (07:46):
Like is he going to be there.
Speaker 3 (07:47):
Forever and ever infinity or do they have some plans
in place for what happens next?
Speaker 7 (07:52):
Yeah, I mean, the succession issue with Disney never quite
goes away. You know, it's been the focus of investors
long time. They bodged it the last time Bob came back.
They have to get it right this time. You know,
there's been endless speculation about who that's going to be.
Looks like the internal candidates are really getting narrowed down.
(08:13):
But you know, again, TBD, that's all the next chapter
of Disney and they have to really stick the landing
this time.
Speaker 3 (08:27):
Welcome to our global audience across Bloomberg television and radio.
We're joined by AMD CEO Lisa Sue. And it was
such an interesting quarter to look back at Data Center
in particular CPU strength, not just accelerators, strong AI outlook
on accelerators, gaming PC, and then some concern about the
future of the China business. But Caroline and I Lisa
(08:50):
have talks for quite a while now about AMD as
the best performing chip stock so far this year. I
wondered if we start by just asking what in the
quarter changed for a MD what the kind of biggest
move forward was, do you think.
Speaker 8 (09:05):
Yeah, absolutely so. First of all, Ed and Caroline, great
to be here with you. We always, you know, look
at these things and say, when we have a business
where all of our businesses are actually performing extremely well,
it's a good it's a good place to be.
Speaker 9 (09:19):
So we had a very.
Speaker 8 (09:20):
Strong first half of the year, you know, second quarter
up thirty two.
Speaker 9 (09:23):
Percent year over year.
Speaker 8 (09:24):
We're guiding to a third quarter you know, up twenty
eight percent.
Speaker 9 (09:28):
And underneath that what you see is.
Speaker 8 (09:30):
You know, first of all, data center business is doing
extremely well. Our server CPUs are continuing to gain share
in cloud and in enterprise. One of the things that
we're seeing with AI is the AI investments from the
largest hyperscalers are actually pulling you know, both GPU and
CPU revenue, you.
Speaker 9 (09:48):
Know, which is good for us overall.
Speaker 8 (09:50):
You know, augentic AI actually requires lots and lots of
compute going forward. We're also seeing strength in you know,
PCs as well as gaming. Our products are extremely well positioned,
whether you're talking about you know, consumer or commercial. And
then we're also seeing you know, some improvement in the
embedded side of our business as you know, that is
(10:10):
also you know, going to I would say, return to
growth in the second half of the year. So we've
seen a lot of positive signals over the last ninety
days in terms of, you know, what the market needs
from computing and sort of the investment and things. You know,
there are some questions about China, of course, which you
know we can certainly talk about.
Speaker 3 (10:29):
Well, let's talk first about the AI accelerator outlook, because
actually from analysts to investors, to develop a community, when
we say that you're coming on the show, we get
questions from all quarters. You had said that the AI
accelerator business will grow to the tens of billions, and
what I'm kind of seeing is people just want granularity
from Lysia a little bit like when does that happen
(10:50):
and when does it happen? And you talked about the hyperscalers.
But what's the growth pathway to tens of billions in
accelerator revenue?
Speaker 8 (10:58):
Yeah, absolutely, ed, So let me give you a few
important markers. So what we said is the second half
of the year, our growth would be primarily driven in
the data center by accelerators. We launched a new product
just in June I three fifty five product. It's extremely competitive.
We really like how we stack up in terms of
(11:19):
total cost of ownership for inferencing and training workloads. Customers
really like that product. That's driving some of our second
half growth, and certainly when we talk about our sequential
growth into Q three, that's being primarily driven by that
accelerator capability.
Speaker 9 (11:34):
And now when you.
Speaker 8 (11:34):
Extend forward, you know I've said that the AI TAM
for accelerators and data center will be over five hundred
billion over the next couple of years. You know, we
expect to get a large portion of that new accelerator
TAM and that's how we get to tens.
Speaker 9 (11:50):
Of billions of dollars.
Speaker 8 (11:51):
Very key is also, you know, we've accelerated our roadmap
and so we are on an annual cadence and next
year we'll have yet a new capability with our four
hundred series, which will bring full rack level solutions, which
will be another giant step forward in terms of capability
for you know, AI solutions. So I think that's the
(12:11):
roadmap and path for the next couple of years. We're
really excited about the traction. We're getting lots of customer
validation saying hey, you're on absolutely the right path, and
you know we're making strong progress towards those goals.
Speaker 4 (12:25):
Lisa, the granularity there was demanded time and time again
on that earning score with analysts was around China though,
and I know it's so hard to give because in
many ways, as m I threeh eight, it's depending on
the licenses from the US government.
Speaker 9 (12:38):
How are those discussions going with.
Speaker 4 (12:40):
The US government. How quickly do you think they can
get through the backlog?
Speaker 9 (12:44):
Yeah, Caroline, definitely.
Speaker 8 (12:45):
Look, you know, I know people always want precision, and
what I will give you is exactly how things are
playing out from our standpoint. I think we've seen an
improvement over the last ninety days. You know, ninety days ago,
you know, we did not expect to believe to shift
to be able to ship to China because of some
of the regulations I think this administration, the Department of Commerce,
(13:07):
the government has actually been very open to trying to
find the right balance between national security and ensuring that
we have AI USAI technologies proliferated across the world. So
we think that's a great balance. We now know that
we have a number of licenses that are under review.
We've been given good indications that those are moving through
(13:29):
the review process, and we will certainly inform everyone when
the licenses are granted. But given that it's hard to
predict exact timing, just given all of the things that
are in front of the government at the moment, we
thought the right thing to do right now is just say, hey,
let's not include that in the third quarter revenue. But
even with that, we're growing twenty eight percent year over year,
(13:51):
which is fantastic growth rate. And if you asked me,
you know what we've learned in the last ninety days,
We've learned that the demand is even stronger in the
second half of the year. And we necessarily, you know,
thought maybe just a few months ago.
Speaker 4 (14:02):
And analysts really cooperated and thought it was right that
we should see such caution perhaps and not show up
in the numbers. But Lisa, I'm interested in the inventory
that you had been very clear about the eight hundred
million dollar knock on the fact that you couldn't access
China for a while. I know that most of those
manufacturing hadn't been complete, but do you think you can
unwind that eight hundred million how much you think can
(14:24):
you bring that back to bear?
Speaker 8 (14:26):
Well, we certainly expect that once licenses are approved, that
we will restart our supply chain and get those in place.
We do have, you know, a bit of time that
it takes to complete those, but we would expect to
be able, you know, to ship some of those products
as licenses are approved. And you know, again the exact
timing will depend on when licenses are approved. But I
(14:49):
again would hope that we don't get caught up in
something that I would say is moving actually in the
right direction and really see like the overall business is
doing extremely well. Right when I look at data center growth,
when I look at client and gaming growth, and really
the return to growth in the embedded those are the
key aspects to really understand about where the business is today.
Speaker 2 (15:13):
Lisa.
Speaker 3 (15:13):
The final question that we have on China, if I may,
is something that we've also discussed quite often with Video
and Jensen. One which is the idea that in the
interim period you just outlined, China's domestic chip makers have
made some progress on their own accelerators. Does a m
D make an assessment of that of how performance a
(15:36):
comparable Huawei or other Chinese accelerator is relative to them?
Speaker 2 (15:40):
I three hundred family.
Speaker 8 (15:42):
And of course, I mean, look, it's a very competitive
market out there. At the end of the day, everybody
wants AI computing, Like AI computing is the foundation for
you know, all the great things that we know that
AI can add to, you know, businesses and you know,
sort of.
Speaker 9 (15:58):
The overall capability.
Speaker 8 (16:00):
So yes, we're always looking at the competitive environment. That
being the case, you know, I think we are well positioned.
Speaker 9 (16:07):
Overall.
Speaker 8 (16:08):
Our roadmap for the rest of the world is very strong,
and we think is just getting stronger as we go forward,
and as it relates to China, it's something that we
have to work through with the administration, but as I said,
we've had very close conversations and we're making good progress there.
So from that standpoint, you know, I think the overall
competitiveness of our AI roadmap has never been stronger. And
(16:29):
we're excited about what we can deliver across you know,
AI GPUs as well as you know, our our CPU
franchise and all of the rest of our portfolio.
Speaker 3 (16:40):
This is Bloomberg Tech Live on Bloomberg Television and Bloomberg Radio,
and we're speaking with AMD CEO Lisa Sue Strong in
PC Strong in server particularly CPU. Is that an a
m D capturing market share story or is that just
a rebound in demand generally story?
Speaker 2 (16:59):
Lisa Well, I.
Speaker 9 (17:01):
Think it's both.
Speaker 10 (17:02):
Ed.
Speaker 8 (17:02):
I think the demand is is good. I think the
demand patterns are better. But clearly we're very, you know,
very competitive with our products. I think we have leadership
CPUs in both.
Speaker 9 (17:15):
Server and client.
Speaker 8 (17:16):
We've shown significant traction in cloud as well as enterprise,
and I think going forward you're going to see, you know,
enterprise customers want the best solution out there, and that is.
Speaker 9 (17:27):
You know, a m D for computing and gaming.
Speaker 4 (17:30):
Nisa so Strong. I'm interested into the nuance of pull
forward because you said on the call that you didn't
see a whole lot of pull forward. Are people trying
to get ahead of tarifs and price increases, but did
you see any.
Speaker 9 (17:43):
You know, very little Caroline.
Speaker 8 (17:45):
I think what we look at mostly is not just
what we're selling in to customers, but we actually look
at what's being sold out at end customers, and what
we're seeing being you know, really transferred to end customers
is good demand. I mean, people are refreshing their data centers,
which is very positive. Right We're in a place where
(18:06):
computing is important, and so we're seeing strong refresh cycles
on the data center side. We're seeing strong pull through
of our of our solutions in the enterprise in PC,
and then from a gaming standpoint, again, we have a
very strong product cycle. So you know, there's it's always
hard to tell exactly what the impact of the current
(18:30):
tariffs are, but I would say that that's the smaller
part of the impact on our business. The larger part
is just strong products, you know, very good traction from customers.
Speaker 9 (18:40):
And looking at a stronger second half.
Speaker 4 (18:42):
Of the year, a stronger second half of the year
where you take some market share from Nvidia, Lisa, how
are you seeing that grow out and the ability to
compete with the next ranger chips.
Speaker 8 (18:53):
Well, we are very bullish on our overall roadmap capability.
I think the second half of the year as a
number of customers. You're really you're broadly adopting AMD.
Speaker 3 (19:06):
Lisa, I have a question from our audience, if that's okay,
a viewer of Bloomberg Tech and as you know, like
loads of AMD employees, your peers, technology industry.
Speaker 2 (19:15):
People want to hear what you have say. I'm just
going to read it to you.
Speaker 3 (19:17):
Can Lisa, please explain AMD's winning and gaming consoles. But
AI is where the margins are. Now, what's the plan
to make a MD indispensable to the next open AI
and not just cost effective alternative? I think to invideor
is what they're saying well ed?
Speaker 8 (19:36):
The best way to say that is for you know,
those of you who know us as a company, you
know we execute extremely well.
Speaker 9 (19:42):
You know, our roadmaps are strong.
Speaker 8 (19:45):
We're very excited about all of the progress that we've made.
You know, I three hundred was an excellent product. M
I three point fifty is you know, a big increase
above that, and then our next generation is also and
the key for us, if you look at our history,
our history is doing what we say we're going to do,
delivering to customers, delivering total cost of ownership and with that,
(20:07):
you know, being a great partner, and so from that standpoint,
I think you can be very confident that we have
a strong roadmap and we're going to.
Speaker 9 (20:14):
Execute on it well.
Speaker 8 (20:15):
And you know, our largest customers want to have a
dependable and good partner.
Speaker 4 (20:23):
It's been wonderful spending time with you, Lisa sou Amd CEO.
We thank you very much time now for talking tech.
First up, soft Bank shares they're actually higher on the
news that open Ai is set to sell shares at
a five hundred billion dollar valuation insider shares. As a company,
(20:45):
of course it has a big investment in but the
news reversed an earlier fall in the Japanese company stock
after it brought to net income that missed analyst expectations. Meanwhile,
the US has charged two Chinese nationals. We're sending it
tens of millions of dollars worth of advanced AI chips
to China, violating export restrictions. Now the defendants allegedly sent
sensitive technology from Nvidia, including h one hundred AI accelerators.
(21:07):
Lawyers for the pair couldn't be immediately located for comment.
And this mountain traversing robot dog is causing shares of
Chinese robotics companies to climb, but the mechanical dog is
from startup Unitary. China has been showing off its robotics
prowess in a lot this year, including with running and
kickboxing humanoids and a favorite of yours.
Speaker 3 (21:31):
Yeah, coming up, Matt Romberg, CEO of gaming creation platform Unity,
going to talk about that company's earnings. We're going to
talk more about the mobile gaming space, in particular what
the dev community has been really focused on. This is
Bloomberg Tech. Welcome back to Bloomberg Tech. I'm taking a
(21:56):
look at AMD largely to just recap the conversation we
just had with cly to Sue. The stock came off
session lows during the course of that conversation talking about
clear demand, particularly from hyperscalers in the AI accelerator market.
They do think that they can shift some of that
China specific AI accelerated inventory Carrow that they had written down.
That's one of the responsors she gave to you. PC
(22:18):
demand is very strong and they're taking market share. Was
a very clear signal. We'll continue to track it. It's
bouncing around a lot going on. Apple continues to push
higher one hundred billion dollars additional investment in US according
to the White House later today, we expect to hear more.
The stock's now up five and a half percent. That's
a big jump. Shopify is up nineteen and a half percent.
(22:39):
It's now become Canada's biggest company by market cap. It
is taking e commerce market share and absolutely barm storming
print from that company. And then super Micro is down
twenty one percent. Simple Story told us that in fiscal
twenty six they would get thirty three billion dollars sorry,
in sales. They previously told us forty billion. Everyone's going, well,
(23:00):
what's going on? You know, it's just not as strong
as they had previously told us.
Speaker 2 (23:03):
We have more ends.
Speaker 4 (23:04):
Yeah, and we've got more big slumps. Actually this time,
let's check out snapshares plunging after reporting second quarter sales
that fell short of Wall Street. The expectation said, Look,
the company blamed a technical issue with its ad buying
tools that basically set price points too low. The glitch
has now been fixed. But let's break down the numbers
of the outlook with jasmin Enberg where poased to welcome
a back VP and principle analyst and eMarketer. This is
(23:26):
such a self inflicted wound and the market doesn't seem
to be well forgiving them for it.
Speaker 11 (23:32):
Yeah, absolutely, I mean it really was a dismal quarter
for a SNAP, and even before it reported its earnings,
I was saying that it wasn't looking great for the company,
and that had less to do with the economic uncertainty
and tariffs, which of course it had warned about at
the end of Q one, and more to do with
foundational structural issues within its AD platform and its ability
(23:53):
to monetize. Now, I obviously could not have predicted that
it would have an ad glitch in Q two that
would result in the deceleration and growth, but I think
that really does point to these longer term, more deeper
challenges that it has within its business model. I do
think in a different context, investors might have been just
a little bit more forgiving, though probably not much more
(24:17):
forgiving because they tend to be with Snap. But you know,
STAP hasn't working very hard for quite some time on
revamping its AD platform focus really on direct response, and
I think they're getting frustrated. They're getting impatient because the results,
while sometimes there's progress, it's mostly been inconsistent. And then
if you take the larger context of meta and reddits
(24:39):
blowout earnings.
Speaker 9 (24:40):
For Q two. It makes it really hard.
Speaker 11 (24:42):
For Snap to shift responsibility to macro conditions or headwinds
and leaves very little room for mistakes.
Speaker 4 (24:50):
I mean, well said, why they consistently deliver is daily
active users, unless we forget there's almost half a billion
of them. But what's interesting is they're trying to move
away perhaps some more volatile ad side of it to
subscription is that working well.
Speaker 11 (25:06):
Snapchat Plus has been and continues to be a bright
spot for Snap. And one of the things that that
says to me is that while Snap still struggles to
roll out features for advertisers that they like and need,
they certainly know how to bring features to consumers that
they like and that they're willing to pay for. I
(25:27):
do think going forward, diversification of its revenue streams in
general is just going to be so much more important
for Snap, and Snapchat Plus continues to drive a lot
of its revenue growth, especially considering the fact that while
its monthly active user base showed really strong signs of
progress in terms of going getting toward that one billion
dollar or one billion user goal that it has, we
(25:51):
saw a lot of weakness in North America, which is
Snap's core market and where it makes most of its money.
And that also means then that Snap is going to
be more reliant on international markets going forward to monetize
via ads, and that's extremely challenging or more challenging because
it's harder to make money there. And again, the weakness
(26:13):
in North America points to structural problems.
Speaker 3 (26:16):
Just real quick, I appreciate what you said about the
response investors have to Snap sometimes, like I just always remember,
are they going up a lot or down a lot?
But that speaks to lack of consistency. Like Meta showed
us that all the stuff they've done around AI shaws
up the core breading but of business.
Speaker 2 (26:33):
Is Snap not experiencing something similar?
Speaker 11 (26:36):
Yeah, I mean I think Meta showed us that you
can send a lot of money on AI if your
core business is doing well, and it truly is. I mean,
Meta is a powerhouse. It continues to deliver on efficiency
and effectiveness for advertisers. You know, Snap has been playing
catch up to Meta in many ways, including in AI.
(26:56):
You know, it doesn't have the same scale and resources
that Meta has to build this powerhouse AI driven ad business,
but it certainly needs to do more work there. One
thing I will say for Snap though, is you know,
we saw an increase in SMB advertising small and medium
sized businesses, and I do think that that is, you know,
(27:18):
a direct result of its investments in AI in its
ad platform, because these advertisers are generally drawn to places
where it's easy to advertise, and that's you know, one
of the impacts that AI has on advertising and these platforms.
Speaker 3 (27:34):
Jasmine Enberg from me Marketer, thank you so much for
joining us on the program. Let's stick with earnings and
get out to gaming. Shares of Unity software actually now
lower by almost nine percent. Blinking and miss it kind
of situation. This morning, Caro, the stock had spiked after
the company reported better than expected second quarter earnings.
Speaker 2 (27:52):
Something's changed.
Speaker 3 (27:53):
Let's talk it through with Unity CEO Matt Brumberg.
Speaker 2 (27:56):
Well, help me.
Speaker 3 (27:58):
There was a good response. You beat expectations. There's particular
focus for you guys in the mobile gaming market. The
stock is sort of reverse direction, is down eight percent.
Speaker 5 (28:08):
Matt.
Speaker 2 (28:09):
You'll read on that. Please.
Speaker 12 (28:11):
Yeah, you know we're not stock investors or business builders,
so you know, my answer to that is a little
bit of who knows what we're really focused on is
building or growing and during business. And I think that
when we look back on the second quarter twenty twenty five,
the history is going to show that it was an
inflection point for our turnaround, sort of the time when
accelerated product development and delivering more for customers started to
(28:34):
show up in a really meaningful way in our business.
Speaker 13 (28:37):
And I think that's basically where we are.
Speaker 3 (28:40):
I really appreciate having you on the show. I take
a lot of interest in Unity because we recently have roadblocks.
CEO David Zooki on the show of their own Earnings
is probably more analogous in the gaming space to put
you nearer to a roadblock. Maybe you disagree, but mobile
gaming right now is a huge focus. How is that
a driver for your business and a prioritype It's.
Speaker 13 (29:02):
The biggest priority there is.
Speaker 12 (29:03):
We're effectively the operating system for the mobile gaming business. Globally,
seventy percent of the mobile games in the world are
built on Unity, and eighty five of the top one
hundred advertisers mobile game advertisers advertise with us. So what
we've really seen in the last year or so of
this turnaround is that when we make fundamental investments in
(29:24):
delivering better product for that set of customers for the
mobile gaming business. That our business is lifting, and we've
really seen that over the year, and we're actually really
excited about investor reaction over the course of the year
as well.
Speaker 4 (29:39):
I'm going to go back to perhaps the stock reaction
and what our own bloombag intelligence analysts have been saying
that and forgive me, it's not always bathed in positivity
because they say, look, this is a cuerential decline of
your Create segment in the next quarter that suggests muted
adoption of your Unity six offering. Just describe that. Is
that something you're seeing seeing, Jenna.
Speaker 13 (30:00):
I started, I think that's just incorrect.
Speaker 12 (30:04):
UNI six is the fast most the fastest adoption of
any version of you we've ever seen.
Speaker 13 (30:10):
It's the most stable, it's the most performant. So we've
been really really pleased by that.
Speaker 12 (30:15):
Again, you're drawing into wondering about the stock I would
just tell you it's much more likely to be the
one hundred plus percent run up over the past year
in anticipation what are sharply better results, and again it's
a kind of inflection point in our business.
Speaker 13 (30:31):
I would guess that has some more to do with those.
Speaker 4 (30:32):
Dynams love that context, Matt, give us the context of
the ad space, and you're encroaching a bit more on
app love in space for example, how do you compete?
How you seeing your self take market share or indeed
app love and still being a really strong competitor.
Speaker 12 (30:47):
Yeah, we don't really think about market share in this business.
The way this business works is performance based. Mobile advertisers
buy performance and they buy against their rows, their return
on investment targets, and they will buy infinitely across that
efficient frontier.
Speaker 13 (31:01):
So as we deliver.
Speaker 12 (31:03):
More value, customers will spend more money with us, and
our business will grow.
Speaker 13 (31:07):
And that's what's happening. This is a big.
Speaker 12 (31:11):
Competitive space with some of the largest, most competitive players
in the world operating in it, and we're really excited
about our ability to compete and not just now but
in the future.
Speaker 3 (31:22):
I'd love to end by talking just very quickly about
developers and the creator community. Like one of the big
issues in the end market the app store, Apple or
Google is revenue split and just what you're doing to
incentivize the creators, but also like bring everyone with you
if you're growing at that click.
Speaker 2 (31:39):
Yeah.
Speaker 12 (31:39):
I mean, we are the tools that those folks use
to build their experiences and then operate those business for
years and years in life service. So when we deliver better,
more effective tools, for example, to your point, to help
them monetize commerce in a native way, for example, and
help them acquire users more efficiently, and that business grows.
Speaker 13 (32:01):
So we're a partner in that growth.
Speaker 4 (32:02):
With them at Bromberg, CEO of Unity, it's great to
have some time with you.
Speaker 3 (32:14):
Bloomberg's reporting that open ai is in talks for a
potential share sale for current and former employees that would
put the company at a five hundred billion dollar valuation.
Speaker 2 (32:26):
That's the chart right there.
Speaker 3 (32:28):
The move would boost open AI's price tag, according to sources,
which is previously at three.
Speaker 2 (32:33):
Hundred billion dollars.
Speaker 3 (32:34):
Bloomberg's Shringafari broke the story and it's with us now.
The mechanism actually doesn't even really matter. It's an insider
share sale that sets this valuation of five hundred billion dollars.
But it feels like just yesterday that we broke the
story on the last three hundred billion dollar valuation. Tell
us about the jump, tell us about what we're hearing
from sources is going on.
Speaker 14 (32:56):
Yeah, I mean it's a significant jump in valuation, more
than two thirds of the last price tag, you know,
the last round that we reported on finalized in March,
led by soft Bank. Since then, we've seen strong user
and revenue growth as we've reported, but again, this price
tag would put open a eye in a new league
(33:16):
as one of the most highly valued private companies out there.
Speaker 9 (33:21):
If this sale were to go.
Speaker 4 (33:22):
Through, extraordinary. How it eclipses even the owner of TikTok
over in China and well ahead of close second is
sort of SpaceX here in the US. What's interesting is
we're getting so many updates to the product itself for
the world as well, Shoen. We're seeing how they're getting
in offering chatchipt to federal offerings with just one dollar.
They're trying to open source a little bit more. Does
(33:43):
this just build up the idea that this is going
to be the winner?
Speaker 14 (33:48):
I think it's still too early to say in the
AGI race, who, if anyone, will be the definitive winner,
but I will say this is an This has always
been a rapidly moving field, and I think the past
few months have been especially fast. We are seeing new
releases from open Ai this week. We have the open
Source model that just dropped, and it's widely expected that
(34:12):
their more major model update, GPT five is coming soon.
On top of that, you know, if you look to
the left and right, we have Anthropic also released an
update to its model, also in talks to have a
new round of funding that would more than double their
past valuation from just earlier this year.
Speaker 9 (34:31):
So I think this is.
Speaker 14 (34:32):
Really a sign that the ai market continues to grow,
and it does raise questions about are these valuations justified?
And I think that depends on how bullish you are
on the genai market as a whole.
Speaker 3 (34:45):
Sharen, reading your report, there's a lot of detail here.
I mean, for one important point is we understand why
open ai is doing this right with the secondary The
timing is because the talent wars and Sam Altman has
this workforce that he has to keep happy.
Speaker 14 (35:01):
Right, So, as we reported, one of the reasons why
Opening Eye wants to do this secondary share cal wight
makes sense is that it gives employees an opportunity to
essentially cash out. If you're working at Meta, which is
aggressively By the way, there's this fierce talent war going
on right now right and Meta has poached several prominent
(35:23):
open ai employees if they want to retain these employees.
You know, people want to be able to liquidate their
shares and this provides current informer employees a potential way
to do that.
Speaker 4 (35:36):
Sharan KAfari, thanks so much for the update on open Ai.
Now let's get back to the public markets where Uber
is already out with its earnings, but after the bell
we get plenty more Lyft, Door, Dash, Airbnb. There is
one woman who covers them all, Natalie Lung. You've got
a busy day. Let's talk about Uber because it's actually
trading lower. Is that more about how father shares had
run into this or the worry about sort of the
(35:57):
spending or capex on autonomous here.
Speaker 10 (36:00):
It's a little bit of both. Definitely, there's a lot
of excitement going into the earnings today, which was mostly
a beat, But there was a small miss in the
core ride share business by Uber, and that was really
offset by the strong performance of the delivery units.
Speaker 9 (36:15):
So there's a lot for us to look at.
Speaker 10 (36:17):
In terms of what it means for consumer spending and investors.
Was also excited to hear more about the autonomous strategy
in the company.
Speaker 3 (36:25):
It's a twenty four hour period that's like the super
Bowl for Natalie Lung. In the gig economy and at
based tech company space, you're super busy, as Karen said,
But what always happens You get Uber and then you
get Lyft. And there's obviously some read across. What are
the expectations for the smaller of the two.
Speaker 10 (36:43):
For Lift, they're still expected to post double digit growth
in the key metric of gross bookings and for this
quarter in particular, we want to look at the third
quarter outlook because it's the first time they're including the
free Now business, which they completed the acquisition last week,
and that will add business from new European markets such
(37:05):
as UK and Germany. So that is something of interest
for me.
Speaker 4 (37:09):
Today doing in Europe and Germany and more broadly expansion
their DoorDash has been making a bit of m and
a over in the UK. It shares been on a
tear this year, up fifty three percent. Where do we
expect numbers for that company to go?
Speaker 10 (37:21):
Yeah. Similarly, on the back of Uber's very strong delivery results,
DoorDash is also expected to post nearly twenty percent growth
on that top line as well. Their delivery deal has
not closed yet, so might not be seeing those results
there yet, but pretty strong spending on the US side
is expected.
Speaker 3 (37:42):
Let's complete the grand slam, the complete sweep and do Airbnb.
Speaker 2 (37:46):
What are you looking for in that name?
Speaker 10 (37:48):
Yeah, it's again. It's a first quarter where we'll see
results from their newly relaunched Experiences and a Lacarte services business,
which Branchaskey has said would add one billion in analyzed
revenue for the company. So we will see the first
results from there, as well as a broader sentiment on
(38:09):
US travel.
Speaker 3 (38:11):
One question I'd have is how does Natalie Lung do
all of those earnings at the same time. Bloomberg's Natalie
Lung busy evening for you ahead, Thank you very much.
Speaker 2 (38:26):
Okay.
Speaker 3 (38:26):
Apple shares are on the screen, and we're pushing towards
session highs, up almost six percent now following the announcement
that the White House says the iPhone maker will invest
an additional one hundred billion dollars in the United States,
Bloomberg's senior executive editor for Tech, Tom.
Speaker 2 (38:42):
Jarles, is here.
Speaker 3 (38:43):
It's a big number in isolation, sort of but it's
also got to be taken in aggregate.
Speaker 9 (38:48):
Absolutely.
Speaker 15 (38:49):
Look, Apple spends a lot on these types of initiatives
all the time. They have already been planning to spend
hundreds of billions of dollars in the coming years. The
Trump administration likes big, round, big honkin numbers, right, and
this is a way for them to say, we've scored
(39:11):
a victory. We are bringing manufacturing back to the United States.
On Apple's part, making these pledges, throwing these numbers out there,
and again, these are plans that this is money that
they do plan to spend. This is a good way
for them to as as BI analysts have said so eloquently,
softened dampen Trump's ire because they still do have a
(39:32):
lot of their supply chain outside of the United States.
Trump administration wants to say big US corporations are bringing
manufacturing back to the United States. This is the question
that we need to ask, and we will be asking
in the coming months and weeks, and that is how
much of real production of the iPhone, how much of
Apple's high end products is actually going to come to
(39:56):
the United States versus China, versus India. That's the real question,
Or is it stuff around the edges, And that's a
question that we're going to be asking Apple to and
a lot of other people are going to be asking
Apple in the coming weeks.
Speaker 4 (40:09):
Yeah, because Tom, the five hundred billion thus far that
had already been announced, well, that was more about servers,
that was actually about training, and that was in some
ways we saw a little bit of the chunk of change.
I think it was about five million being allocated to
actually some rare earths as well. What are we actually
anticipating as to how much, if any, can really be
for the iPhone?
Speaker 6 (40:28):
Right?
Speaker 15 (40:29):
And some of this is also them committing to purchasing
more from US suppliers. Again, this is part of their
supply chain. They need these parts, they will be spending this,
But will this be creating lots of jobs? Will people
be manufacturing assembling these products in the US? Time will tell. Again,
these companies like to they've already been planning to spend
(40:52):
a lot of money and they're putting lots of big
round numbers around them. And again it's an opportunity for
the Trump administration to claim victory. But if you're talking
about server farms, if you're talking about buying from US manufacturers.
If you're talking about training facilities, there's a big delta
between that and actually putting together, piecing together these high
(41:16):
end devices and moving that supply chain out of India
and out of China. Look, it's in Apple's interest to
diversify their supply chain. No one is doubting that. So
much of it is relying on China and that really
bit them and a lot of other people, you know
where during the pandemic and they really need to kind
(41:36):
of diversify away from that.
Speaker 4 (41:38):
President Trump doesn't particularly what I'm only diversifying into India.
Bloomberg's Tom Jiles, great to have you. Thank you for
the analysis that does it even this edition of Blomberg
Tech and what a show.
Speaker 3 (41:49):
Yeah, and jokes aside, like it's a really heavy earnings period.
Still we move from the megacaps, but there's a lot
of names giving numbers. We're learning a lot about the
world of technology. Recap it on the podcast. You know
where to find it on the Bloomberg terminal, as well
as online on Apple, Spotify and iHeart from San Francisco and.
Speaker 2 (42:06):
New York City. This is Bloomberg Tech.
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