>> FROM THE HEART OF WHERE
INNOVATION, MONEY AND POWER COLLIDE IN SILICON VALLEY AND
BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE
AND ED LUDLOW. ED:
I'M ED LUDLOW IN SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY.
MEDA SAYS IT WILL BE THE WORLD'S LEADING AI COMPANY BUT
INVESTORS DO NOT LIKE THE ROMANCE -- THE ROADMAP TO GET
THERE. A MASSIVE DROP IN ZUCKERBERG'S
STOCK. FROM EARNINGS TO IPO'S WE SPEAK
TO THE CEO AND RUBRIC'S ON LISTING DAY. $14 BILLION GOES TO MICRON FROM
THE CHIPS ACT TO BOOST AMERICA'S MEMORY CHIP PROWESS.
THERE IS ONLY ONE STORY THAT MATTERS RIGHT NOW AND IT IS
META-. YOU SEE THE SHARE REACTION TO
MOSQUE -- ZUCKERBERG OUTLINING BILLIONS OF DOLLARS TO BUILDING
OUT AI INFRASTRUCTURE. EXPENSES, ARRANGE RAISED, CAPEX
RAISED. THE FOCUS OF THE CALL WAS ON
THE PRODUCT CYCLE. HOW MANY YEARS WILL IT TAKE FOR
THIS INVESTMENT TO WOULD MATERIALIZE IN SALES GROWTH.
THAT'S THE QUESTION ON THE STOCK IS ON TRACK FOR BIGGEST
DROP SINCE OCTOBER OF 2022. REMEMBER HOW WELL IT'S
PERFORMING YEAR-TO-DATE. LOOK AT THE MARKET CAP, THE
SCALE OF THIS COMPANY BUT ALSO THE MARKET CAP LOST. THE
REPORTING FROM KURT WAGNER AND THE ANALYSIS FROM ANALYST
MANDEEP SINGH. MARK ZUCKERBERG WAS COGNITIVE
ON THIS CALL BUT WHAT HE TRIED TO DO WAS SAY TRUST ME END BEAR
WITH ME I'VE GOT A PLAN FOR AI TO HAVE AN IMPACT ON THE
EXISTING BUSINESS. EXPLAIN WHAT WE LEARNED. KURT: HE WAS SAYING THIS IS NOT ANYTHING THAT'S GOING TO RETURN
TO SHAREHOLDERS QUICKLY BUT BE PATIENT, HE SAID SMART
INVESTORS WILL SEE THE BENEFITS OF THIS LONG-TERM PLAN.
SUGGESTING THAT ANYONE WHO IS SAVVY OR WHO SEES THE FUTURE
LIKE I DO THEY WILL BE IN THIS STOCK EVEN THOUGH IT'S TAKEN A
SHORT-TERM HIT. IT'S A LITTLE BIT COMBATIVE.
IT'S ONE THING WE DON'T NECESSARILY HEAR FROM HIM WHICH
IS PLEADING TO INVESTORS BE PATIENT AND HANG TIGHT.
YOU'VE GOT TO WHETHER A LITTLE BIT OF THE TURBULENCE IN THE
MEANTIME. ED: WHEN YOU LOOK AT THE
FUNDAMENTALS OF THIS COMPANY, YOU AND I WOULD -- WERE
DISCUSSING BEFORE THE EARNINGS PRINT WHERE DO WE LOOK TO SEE
IF THERE IS EVIDENCE THAT THE AI IS IMPACTING THE TOP OR
BOTTOM LINE. I LOOKED AT THE IMPRESSIONS
GROWTH I LOOK TO THE PRICING GROWTH BECAUSE THIS IS AN
ADVERTISING BASED BUSINESS. WHAT DID YOU SEE IN THOSE
NUMBERS? MANDEEP: IT CONTINUES TO BE IMPRESSIVE
AND THAT'S DRIVEN BY BETTER FIELD RECOMMENDATIONS, AD
TARGETING IS BETTER. AD PRICING WAS MUCH BETTER IN
THE EUROPE REGION IF YOU PARSE THROUGH THE NUMBERS.
NORTH AMERICA WAS LIGHTER. PART OF THAT COULD BE EXPLAINED
FROM THE POLE BACK THAT EVERYONE IS EXPECTING FROM
CHINESE ADVERTISERS. BUT THEY DID NOT CALL THAT OUT.
CLEARLY THAT IS A RISK AND THAT'S WHY THE GUIDANCE WAS
WIDE WHEN YOU LOOK FOR TO Q. AT THE END OF THE DAY WHEN YOU
LOOK AT THE COST GROWTH, THAT WILL BE IN DOUBLE DIGITS SO IF
THAT MID TO HIGH TEENS REVENUE DOES NOT PAN OUT FOR SOME
REASON , THAT IS WHEN YOU WILL SEE MARGIN COMPRESSION. SO FAR THE STORY HAS BEEN COST
CONTROL AND REVENUE GROWTH ACCELERATING.
NOW THAT STORY COULD CHANGE BECAUSE THE COST WILL GROW
DOUBLE-DIGIT AND IF THE REVENUE GROWTH DOES NOT MATCH AND THERE
IS A RISK. ED: MEDA IS DOWN 12% BUT ON A
POINTS SPACE IS CLEARLY DRAGGING DOWN THE NASDAQ 100,
THE S&P 500. THE SEMICONDUCTOR INDEX THAT
WAS PUT ON THERE BECAUSE OF A KNEE-JERK REACTION.
NVIDIA LAST NIGHT FELL. IT IS NOW UP 3% AND THE LOGIC
IS ZUCKERBERG SAID 800,000 GP'S COME ONLINE AS META-TRAINS ITS
AI MODEL. THE OTHER AREA OF INTEREST IS
ZUCKERBERG'S KINDA FIRED UP ABOUT THINGS THAT SURPRISED HIM.
HE SPENT A LOT OF TIME TALKING ABOUT GLASSES, BUT THERE IS
STILL THIS CONFUSION. IS THE METAVERSE STILL A
STRATEGY? THE YEAR OF EFFICIENCY, JUST
TRYING AND CLEARING OUT THE MUDDY WATERS ON WHAT ZUCKERBERG
IS TRYING TO DO. >> THERE SO MANY THINGS THEY
ARE WORKING ON AT ONE TIME. IT'S UNDERSTANDABLE SOMEONE
MIGHT BE CONFUSED BUT HE BROUGHT UP THE GLASSES A LOT
AND WHAT HE SAID WAS THESE ARE PROGRESSING FASTER THAN
ANTICIPATED SO THE GLASSES IS THE IDEA OF WEARING A PAIR OF
SPECTACLES THAT LOOK LIKE READING GLASSES OR SUNGLASSES
BUT HAVE ALL KINDS OF AI OR AR FEATURES PACKED INTO THEM.
THEY ARE WORKING WITH RAY BANS TO PRODUCE THESE RIGHT NOW AND
WHAT MARK ZUCKERBERG WAS SAYING IS THESE OF GOTTEN SO GOOD SO
FAST IT'S ENCOURAGED ME TO CONTINUE TO INVEST IN AI AND
PUT MONEY INTO THE GROUP BUILDING THIS.
I THINK THIS HAS BEEN HIS LONG-TERM VISION.
HE THOUGHT THEY WOULD SORT OF BE THE NEXT ITERATION OF THE
PHONE. YOU WOULD WEAR IT ON YOUR FACE
BUT NOW HE SAYING HE THINKS THEY WILL BE FASTER THAN HE
ANTICIPATED WHICH IS WHY WE ARE SEEING THIS INCREASE IN SPEND.
ED: WE HAVE HAD SORT OF BREAKING NEWS HEADLINE SINCE WE'VE COME
ON THE AIR AND IT RELATES TO TIKTOK. BYTEDANCE HAS PUBLISHED ON ITS
CHINESE WEBSITE A STATEMENT BASICALLY SAYING IT HAS NO PLAN
TO SELL TIKTOK. BYTEDANCE HAS NO PLAN TO SELL
TIKTOK. WE NEED TO DIG DEEPER TO
UNDERSTAND WHAT THEY MEAN BY THAT. YOU'VE ALSO PUBLISHED RESEARCH,
YOUR LATEST THINKING ON TIKTOK JUST THIS MORNING ON THE
BLOOMBERG TERMINAL. JUST EXPLAIN THE BASICS TO US.
MANDEEP: TIKTOK HAS A LOT OF ORIGINAL CONTENT THAT GOES THROUGH
INSTAGRAM, YOUTUBE AND SO IF TIKTOK IS BANNED A LOT OF THOSE
CREATORS HAVE TO GO TO SOME OTHER PLATFORM.
WHETHER IT'S YOUTUBE SHORTS OR INSTAGRAM WE -- REELS YOU CAN
SEE A LOT OF THE ORIGINAL CONTENT CREATION HAPPENS ON
TIKTOK AND THAT'S WHERE YOU WILL SEE MEDA BEING A
BENEFICIARY BUT I AM EXCITED TO LOOK AT THE YOUTUBE NUMBERS
BECAUSE TO ME YOUTUBE SHOULD BE THE 15% CONSENSUS NUMBERS GIVEN
THE KIND OF VIEWERSHIP GAINS YOU HAVE ALREADY SEEN WITH
YOUTUBE AND SO I THINK THAT IS THE ONE ASPECT PEOPLE NEED TO
THINK ABOUT IS THE CREATORS WILL NOT WAIT FOR NINE MONTHS
TO MOVE. THEY ARE GOING TO START THINKING ABOUT WHAT'S THE
ALTERNATIVE PLATFORM AND WHERE THEY CAN MOVE THEIR FOLLOWERS.
THAT'S GOING TO DETERMINE GAINS FOR SNAP, YOUTUBE AND MEDA IN
THE COMING MONTHS. ED: IT'S IMPORTANT WE KNOW ON THE
EARNINGS CALL THE ANALYST ASKED MARK ZUCKERBERG FOR REACTION TO
TIKTOK. THE CFO JUMPED IN AND SAID THEY
ARE MONITORING THAT SITUATION CLOSELY BUT IT WAS TOO EARLY TO
TELL THE IMPACT OF THE TIKTOK DIVEST OR BAND.
WE WILL DIG IN BUT THANK YOU KURT WAGNER AND MANDEEP SINGH.
COMING UP ON THE PROGRAM SALES FORECAST FALL SHORT OF WALL
STREET EXPECTATIONS BUT THERE IS SOME POSITIVE OUTLOOK AI
RELATED. WE WILL SPEAK TO BILL MCDERMOTT.
THERE IS A LOT HAPPENING AT ONCE IN THE MARKETS AS WELL.
MICROSOFT AND GOOGLE REPORTING AFTER THE BELL.
THOSE ARE PRETTY SIGNIFICANT DECLINES IN THE IDEA IS WE ARE
WORRIED ON THE BACK OF MEDA'S EARNINGS, THAT ALL OF THIS
SPEND ON AI INFRASTRUCTURE IS NOT BRINGING SOME BIG BOOM IN
GENERATIVE AI DRIVEN SALES GROWTH.
ACTUAL SOFTWARE PRODUCTS THAT PEOPLE USE AND COMPANIES MAKE
MONEY FROM. THIS IS BLOOMBERG TECHNOLOGY. ED:
SERVICE OUT WITH FIRST-QUARTER RESULTS BUT IT'S THE OUTLOOK
WHERE THE FOCUS IS PROJECTED SUBSCRIPTION SALES WILL
INCREASE IN THE CURRENT PERIOD, THAT WAS BELOW WHAT THE STREET
WAS EXPECTING BUT THOSE ARE STREET EXPECTATIONS WHAT ABOUT
THE BIG EXPECTATIONS OF THE COMPANY CEO.
BILL MCDERMOTT JOINS US NOW. LET'S COVER OFF THE CLASSIC
EARNINGS STUFF. YOU HAVE A STRONG QUARTER AND
THEN YOU GIVEN OUTLOOK WHICH RELATIVE TO CONCESSIONS
ESTIMATES WAS DISAPPOINTING. WHAT WOULD YOUR PUSHBACK TO
THAT MARKET REACTION BE? >> FIRST YOU HAVE TO LOOK AT
THE TRIPLE PLAY WE JUST PULLED OFF AND WE HAD A BEAT ON THE
TOP LINE, A BEAT ON THE BOTTOM LINE AND WE RAISED THE
FULL-YEAR GUIDANCE. SO IF THE HIGH-CLASS PROBLEM
WAS SOLVING FOR IS WE DID NOT RAISE THE GUIDANCE ENOUGH,
EVERYONE CAN REALLY RELAX BECAUSE OVER THE LAST FIVE
YEARS THAT I'VE BEEN HERE WE ALWAYS BEAT AND WE HAVE EVERY
EXPECTATION OF DOING SO AGAIN. ED: I WANT TO INVITE YOU TO GIVE
THE BASICS OF WHAT SERVICE NOW DOES.
A PORTION OF THE AUDIENCE KNOWS THE NAME.
THEY MIGHT APPRECIATE JUST AN EXPLANATION OF WHAT YOU ARE
DOING OUT IN THE WORLD. MY SUMMARY IS YOU ARE TRYING TO
CAPTURE I.T. SPEND, THE BUDGET FOR I.T.
SPEND FOR ALL KINDS OF COMPANIES. BILL:
THE BEST WAY TO SUM IT UP IS THINK OF SERVICE NOW AS THE AI
PLATFORM FOR BUSINESS TRANSFORMATION.
IF YOU LOOK AT COMPANIES TODAY, THEY NEED A PLATFORM ON AN END
TO END BASIS FROM I.T. TO THE EMPLOYEE EXPERIENCE.
AND THE WAY THEY BUILD NEW PRODUCTS.
THEY NEED ONE PLATFORM THAT CAN DO ALL OF THAT.
WHAT IS UNIQUE ABOUT OURS, WE BUILT IT ORGANICALLY.
IT IS PRISTINE. IT'S A SHEET OF GLASS THAT LIES
ABOVE THE MASS THAT'S BEEN CREATED FOR THE LAST
HALF-CENTURY. THE BIG MOVEMENT TODAY IS NOW
WHAT IS THE NEW FRONTIER. THE NEW FRONTIER IS GENERATIVE
AI AND PEOPLE SAY GENERATIVE AI WHAT IS THAT MEAN. THEY NEED TO OPTIMIZE THEIR
PROCESSES AND EVERY ENTERPRISE WILL BE ENGINEERED WITH
GENERATIVE AI. WE ARE THE FIRST MOVER AND THE
MARKET LEADER IN THAT CATEGORY IN THE ENTERPRISE.
SO THE FUTURE GLIDE PATH COULD NOT BE BRIGHTER. >> THE STOCK IS DOWN, 6%.
I KNOW THERE IS SOME PRESSURE IN THE MARKET THIS MORNING
BECAUSE OF MEDA'S EARNINGS. LET'S TALK ABOUT RPO BECAUSE
THAT GIVES SOME EVIDENCE OF THE BACKLOG MEANING REMAINING
PERFORMANCE THAT'S BASICALLY SASS SPEAK FOR BACKLOG.
WHY SHOULD THE INVESTOR BASE BE MORE POSITIVE ABOUT THAT? BILL: THEY SHOULD FEEL GOOD WE HAVE
NEARLY $18 BILLION AND REMAINING PERFORMANCE
OBLIGATIONS SO THAT HIS BUSINESS WE HAVE IN THE BACKLOG
THAT HAS YET TO BE FULLY RECOGNIZED.
SO THE BACKLOG IS THERE. WE ARE BEATING ON THE REVENUE. WE BEAT ON THE REVENUE BY 100
BASIS POINTS, THE MARGIN BY 150 BASIS POINTS.
OUR FREE CASH FLOW WAS UP 47% AND OUR GROSS PROFIT WAS UP AND
WE WERE TALKING ABOUT WAS THE INCREASE IN THE GUIDE ENOUGH.
YOU MENTIONED PERFECTLY 18 BILLION IN BACKLOG.
THE COMPANY IS ON A TEAR. YOU'VE GREAT COMPANIES LIKE
MICROSOFT AND IBM AS AN EXAMPLE THAT ARE TRANSFORMING THEIR
EMPLOYEE EXPERIENCE WITH A DIGITAL FIRST SUPPORT MODEL
FREEING UP ALL KINDS OF RESOURCES AND FUELING
INNOVATIONS ON SERVICE NOW'S GENAI.
NOVARTIS DELIVERING NEW DRUGS AND INCREASING OPERATIONAL
EFFICIENCY BY STREAMLINING CLINICAL TRIALS RESEARCH AND
FINANCIAL MANAGEMENT WITH OUR GENAI AND THERE'S COUNTLESS
OTHER EXAMPLES. GENAI RIGHT NOW IS A SMALL PART
OF THE OVERALL TOTAL. BUT, THE UPTICK IN FUTURE SALES
IN GENERATIVE AI WHEN COMPANIES REENGINEER THE WAY THEY RUN ON
OUR PLATFORM IS THAT BELIEVABLE BECAUSE THERE WILL BE HALF A
TRILLION SPENT ON IT IN 2027 ALONE.
THIS IS A REALLY BIG MARKET. WE ARE THE LEADER AND WE ARE
TEAMING UP WITH THE BEST IN THE BUSINESS LIKE NVIDIA,
MICROSOFT, IBM AND OTHERS TO CREATE A BRIGHT FUTURE. ED: THE STOCK IS DOWN 6% AND THERE
ARE REASONS WHY FOR THAT IN THE SHORT TERM.
ONE OF THEM IS PROBABLY MEDA, YOU'RE THE CEO OF SERVICE NOW
BUT TO EXTRAPOLATE FROM META-, PART OF THAT CONCERN LAST NIGHT
WAS ALL THIS INVESTMENT IS GOING INTO THE UNDERLYING
INFRASTRUCTURE THAT SUPPORTS GENERATIVE AI.
MEDA IS A CASE STUDY THEY ARE NOT YET SEEING THAT INVESTMENT
IN THE INFRASTRUCTURE TRANSLATE TO TOPLINE GROWTH.
TANGIBLE EVIDENCE THAT THEY ARE SELLING AI AS A PLATFORM.
IN YOUR CASE YOU ARE ONLY SELLING IT AS A SOFTWARE AND
JUST EXPLAIN THAT THESIS, SHOULD WE BE AS CONCERNED THAT
CORPORATE AMERICA HAS NOT YET WORKED OUT HOW TO SELL AI. BILL:
ABSOLUTELY. FIRST OF ALL MEDA IS A GREAT
COMPANY. THEY HAVE VERY GOOD RESULTS,
AND THEIR GUIDE MIGHT'VE BEEN MUTED IN TERMS OF THE RETURN ON
GENAI. THEY ARE RUNNING LARGE LANGUAGE
MODELS AND THAT IS VERY IMPORTANT FOR THE FUTURE OF THE
WORLD AND THEY ARE DOING A GREAT JOB.
WE ARE RUNNING SMALL LANGUAGE MODELS WHICH BASICALLY MEANS WE
RUN OUR PLATFORM WITH THE CUSTOMERS DATA IN MIND.
SO IT IS ROCKET FAST, ZERO LATENCY.
BECAUSE WE ARE USING THE CUSTOMER'S OWN DATA THERE IS
TOTAL ACCURACY AND 80 IS VERY INEXPENSIVE AND THAT'S WHY
CUSTOMERS ARE BUYING OUR GENAI NOW BECAUSE IT IS SECURE,
INEXPENSIVE TO RUN AND IT'S 100% ACCURATE BASED ON THE
CUSTOMERS DATA. THAT IS WHAT THEY ARE BUYING
RIGHT NOW. WE ALSO HAVE AN OPEN PLATFORM
WHERE WE INTEGRATE WITH META AND WE INTEGRATE WITH GOOGLE
AND MICROSOFT AND ALL OF THE OTHER MARKET-LEADING COMPANIES
OUT THERE SHOULD THE CUSTOMER WANT TO REACH INTO LARGE
LANGUAGE MODELS. AND WE TEAMED UP WITH NVIDIA
WHERE NVIDIA PROBABLY OUR GREATEST PARTNER IN THIS
CATEGORY IS RUNNING SMALL LANGUAGE MODELS FOR US AND
LARGE LANGUAGE MODELS WITH THEIR COMPU POWER.
LET ME GIVE YOU AN EXAMPLE. LET'S THINK ABOUT EMPLOYEES AND
CUSTOMERS. THINK ABOUT GENERATIVE AI
DEFLECTING ALL THE SOUL CRUSHING WORK THAT PEOPLE DO
NOT WANT TO DO ANYMORE. SO THINK OF EMPLOYEE AND
CUSTOMER DEFLECTION WHERE VIRTUAL AGENTS CAN DO THE WORK
BUT PEOPLE USED TO HAVE TO DO. THINK ABOUT SOFTWARE ENGINEERS
INCREASING THEIR PRODUCTIVITY WITH THE SPEED OF INNOVATION BY
NEARLY 50% BY TEXTING SOMETHING IN NATURAL LANGUAGE AND TURNING
THAT INTO SOFTWARE CODE. THERE SEVERAL OTHER EXAMPLES
BUT THE POINT IS SMALL LANGUAGE MODELS ARE SELLING TODAY, WE
ARE MAKING A LOT OF MONEY AND LARGE LANGUAGE MODELS ARE ALSO
AVAILABLE ON OUR PLATFORM BUT OUR CUSTOMERS ARE TEARING UP
WITH MICROSOFT FOR EXAMPLE ON COPILOT AND SERVICE NOW ON OUR
VIRTUAL ASSIST AI PLATFORM AND WE GOT IT TOGETHER AS BETTER
SOLUTIONS FOR THE MARKETPLACE AND THAT'S WHAT'S SELLING TODAY.
>> I APPRECIATE THE DEPTH OF THE ANSWER. THANK YOU SO MUCH. MICROSOFT GOES PUBLIC AMID A
RISING DEMAND FOR DATA SECURITY. THIS IS BLOOMBERG TECHNOLOGY. ED: RUBRIC WHICH FOCUSES ON DATA
MANAGEMENT RECOVERY FROM RANSOMWARE ATTACKS AND
ACCELERATES CLOUD MOBILITY IS OFFICIALLY GOING PUBLIC.
JOINING IS THE RUBRIC CEO. THE SHARES HAVE INDICATED TO
OPEN IT $38 A SHARE, YOU PRICE THIS IPO AT 32.
TELL ME WHAT THAT MEANS TO YOU TODAY? >> THANK YOU FOR THIS
OPPORTUNITY TO SPEAK WITH YOU. IT'S A VERY EXCITING DAY FOR
OUR CUSTOMERS AND PARTNERS AND EVERYONE IN OUR ECOSYSTEM
AROUND THE WORLD. I WILL LEAVE THE STOCK PRICE TO
EXPERTS AND TRADERS, ULTIMATELY WE ARE A DIFFERENT TYPE OF
CYBERSECURITY COMPANY AND CUSTOMERS CONTINUE TO RUN THE
BUSINESS WITH CYBERATTACKS SO THAT HOSPITALS ARE OPEN WHEN
PEOPLE SWIPE THEY GET MONEY OUT IRRESPECTIVE OF A SUCCESSFUL
CYBERATTACK OR NOT. >> DID YOU REALLY NEED TO GO
PUBLIC FOR THE VISIBILITY, YOUR BUSINESS SEEMS TO BE DOING
QUITE WELL DO YOU THINK IT IS TANGIBLY IMPROVES YOUR SALES? >> WE ARE WORKING WITH A NUMBER
OF CUSTOMERS AROUND THE WORLD HAVING MORE VISIBILITY AND MORE
IMPORTANTLY WHEN YOU'RE A PUBLIC COMPANY YOU CAN SEE THE
NUMBERS AND UNDERSTAND THE RESILIENCY OF THE BUSINESS,
THAT'S GOOD FOR YOUR CUSTOMERS, FOR OUR ECOSYSTEM.
IT ALSO HELPS US IN FRONT OF MORE INNOVATIVE COMPANIES
TALKING TO THEM ABOUT AND HELP THEM AGAINST THE RANSOMWARE
ATTACK AND THIS OTHER CYBERATTACK. I SPENT TWO YEARS ASKING IF YOU
WOULD GO PUBLIC. YOU FINALLY AND EVENTUALLY ARE
DOING IT. BUT I THINK THERE IS A FEELING
THERE'S A PREMIUM ON THIS IPO A LOT OF PEOPLE WANT TO SEE
REVENUE AND PROFIT THAT COMES FROM THIS BUT YOU HAVE RESISTED
THE TEMPTATION TO TALK ENDLESSLY ABOUT AI.
YOU SAY YOU DO NOT HAVE A CORE AI STORY. >> WE DO, RUBRIC HAS BEEN
BUILDING AI FOR THE LAST 10 YEARS.
OUR DATA TREND ENGINE IS ON THE AI PLATFORM THAT DELIVERS
SECURITY FROM THE DATA. MORE RECENTLY WE ANNOUNCED A
GENERATIVE AI BASED DEFENSE AND RECOVERY THAT HELPS CYBER
DEFENDER FIGHT FIRE WITH FIRE BECAUSE YOU KNOW THEY ARE
APPLYING AI IN TERMS OF BRINGING THE VELOCITY OF
ATTACKS. WE ARE ALLOWING THE DEFENDERS
USING AI IN TERMS OF RUBRIC AND RUBY SO THEY CAN DELIVER CYBER
RESILIENCE. ED: MICROSOFT REMAINS AN IMPORTANT
FINANCIAL AND TECHNOLOGY PARTNER TO YOU.
HOW WILL THAT RELATIONSHIP WORK GOING FORWARD? BIPUL:
WE HAVE A VERY STRONG RELATIONSHIP WITH MICROSOFT.
WE HAVE BEEN PARTNER OF THE YEAR FOR USN U.K..
WE CONTINUE TO INNOVATE TOGETHER AND HELP OUR JOINT
CUSTOMERS GET CYBER RESILIENCE MAKE SURE THEY WITHSTAND
CYBERATTACKS AND RUN THE BUSINESS BECAUSE DIGITAL TRUST
STARTS WITH KEEPING THE SERVICES UP EVEN WHEN YOU ARE
ATTACKED AND A CYBER BREACH HAS HAPPENED TO YOU. ED: AFTER TWO YEARS OF ASKING YOU
WOULD GO PUBLIC, YOU DID. WE NEED TO TALK ABOUT THE
MARKETS LET'S LOOK AT THE INDEX LEVEL IN THE MAJORS.
THERE ARE SEVERAL STORIES. MEDA'S EARNINGS RESULTS AND THE
REACTION IN THE META-STOCK IS A FACTOR PARTICULARLY ON THE
NASDAQ 100 BUT WE HAVE A GDP PRINT FOR THE UNITED STATES.
ECONOMIC DATA THAT WAS THE OPPOSITE OF WHAT EQUITIES
MARKETS WANTED TO SEE AND THAT IS THE ECONOMY IS SLOWING DOWN.
THAT IS A BIG THING PARTICULARLY FOR TECHNOLOGY
SHARES IN THE MARKET TODAY, A LOOK AT THE NASDAQ 100 DOWN
1.6%. THE S&P 500 AND THE BROADER
NASDAQ ALSO DOWN IN SIMILAR TERRITORY.
THE MARKET IS SAYING LET'S RETHINK SOME THINGS, NOW
BETTING THE FIRST FED RATE CUT COMES IN DECEMBER.
WE CONTINUE TO TALK ABOUT THAT. THIS IS BLOOMBERG TECHNOLOGY. ♪ ED: WELCOME BACK TO BLOOMBERG
TECHNOLOGY. I THINK WE NEED TO GO BACK TO
THE MARKETS THERE'S A LOT HAPPENING IN THE LOT OF RED ON
THE SCREEN BEHIND ME. THE STORY IS MULTIFACETED.
MEDA'S EARNINGS AND A 12% DROP IN META-STOCK IS HAVING AN
IMPACT ON THE INDEX LEVEL BUT ECONOMIC DATA IS ALSO HITTING
TECHNOLOGY SHARES. WE GOT THE GDP READING FOR THE
UNITED STATES THAT CAME IN SOFTER THAN EXPECTED AND THE
RATIONALE I'M SEEING IN THE MARKETS COVERAGE IS THE
EQUITIES MARKET DID NOT WANT TO SEE THAT.
WE ARE RECALIBRATING WHEN WE THINK THE FEDERAL RESERVE,
AMERICA'S CENTRAL BANK IS GOING TO CUT INTEREST RATES OR MOVE
ON INTEREST RATES, WE ARE MOVING FROM THE SUMMER TO NOW
THINKING DECEMBER IS WHEN THAT WILL HAPPEN PRAYED ALL OF THAT
IMPACTS THE TECHNOLOGY SECTOR. SEMICONDUCTORS, REALLY
CURIOUSLY IT'S NVIDIA THAT STRIVING IS HIGHER. WHEN MEDA HEADED STATEMENT ON
ITS CAPEX FROM AI INVESTMENT, NVIDIA FELL BUT IN THE ACTUAL
SESSION TODAY IT'S RISING. THE IDEA IS IF MEDA WILL SPEND
MONEY ON AI IT WILL BE IN NVIDIA WHERE THEY ARE SPENDING
THAT. WE WILL KEEP CHECKING IN ON IT.
IT'S A WILD DAY WHERE NEWS FLOW AND ECONOMICS COMBINING.
AND WE LOVE THAT. THE CLOCK IS TICKING FOR TIKTOK
TO AVOID ITS BAN IN THE U.S. SHOULD IT BE UNABLE TO DIVEST.
JOINING US NOW FROM D.C. IS MIKE SHEPPARD.
MIKE LEADS OUR COVERAGE WITH THE INTERSECTION OF POLITICS
AND TECH. WE HAD THAT BREAKING NEWS
HEADLINE THAT BYTEDANCE SAYING THROUGH ITS CHINESE WEBSITE
THAT IT HAS NO PLAN TO DIVEST OR NO PLAN TO SELL TIKTOK, THAT
WAS THE WORDING. I DON'T REALLY FEEL LIKE I
UNDERSTAND WHAT THEY MEAN BY THAT. THEY ARE DIGGING IN. >> THE STATEMENT IN A WAY IS
NOT THAT MUCH OF A SURPRISE. THEY'VE MADE CLEAR THROUGH THIS
PROCESS AS THE LEGISLATION STARTED TO TAKE SHAPE LAST
MONTH THAT REALLY STARTED TO LOOK REAL LIKE IT WAS GOING TO
HAPPEN. THAT THEY HAVE NO INTENTION OF
PLAYING BALL AND THEY WOULD TRY TO FIGHT IT WITH EVERY ARROW IN
THEIR QUIVER. THEY REALLY WANT TO MAKE SURE
THEY ARE ABLE TO HOLD ON TO THIS VALUABLE ASSET AND RESIST
WHAT THEY'RE ABLE TO SEE AS INTERFERENCE IN THE VALUABLE
MEDIA PROPERTY. >> THERE IS A LOT HAPPENING
QUITE QUICKLY. WE REPORTED BYTEDANCE WAS
THINKING ABOUT A SOLUTION WHERE IT SOLD TIKTOK BUT WITHOUT ITS
SACRED ALGORITHM AND ON THE SHOW YESTERDAY WE TALKED ABOUT
WHY THE ALGORITHM IS SO IMPORTANT FOR CONTENT CREATORS
IN PARTICULAR, THE PRESIDENT SIGNED THIS INTO LAW YESTERDAY
AS FAR AS I'M AWARE THE PRESIDENT HASN'T ACTUALLY
POINTED OR TALKED ABOUT HIS VIEW ON TIKTOK, JUST UPDATE US
ON THE POLITICS OF THE LAST 24 HOURS. >> THIS IS A GREAT QUESTION
BECAUSE POLITICS IS REALLY SURROUNDING THIS NOT ONLY THE
GEOPOLITICS BETWEEN THE U.S. AND CHINA BUT EVEN THE DOMESTIC
POLITICS. ON ITS SURFACE BACK IN MARCH
PRESIDENT BIDEN SAID HE WOULD SIGN THE MEASURE, BUT HE HASN'T
REALLY EXPANDED MUCH MORE. TO BE CLEAR THE TIKTOK BILL WAS
ATTACHED TO A MUCH LARGER FOREIGN AID PACKAGE WHICH WAS A
FAR GREATER PRIORITY FOR THE PRESIDENT AND HIS
ADMINISTRATION. THEY WANTED TO SEE A UKRAINE
THAT THROUGH ABOVE ANYTHING ELSE AND IN HIS REMARKS HE
DEVOTED THE LION'S SHARE OF HIS COMMENTARY TO THAT.
AT THE SAME TIME HIS SPOKESPERSON BEING CLEAR
YESTERDAY AFTER THE PRESIDENT SPOKE THAT SELLING TIKTOK A
FULL TO VEST AT YOUR WANTED. AT THE SAME TIME THEY DO NOT
WANT TO SEE THE APP SHUT DOWN. THEY RESPECT MANY USERS DERIVE
GREAT ENJOYMENT FROM IT AND ALSO FOR MANY IT IS A SOURCE OF
BUSINESS AND THAT IS SOMETHING THE ADMINISTRATION DOES NOT
WANT TO SEE SHUT DOWN. ED: REALLY APPRECIATE THE COVERAGE.
WE WILL TALK ABOUT THIS QUITE A LOT. THANK YOU.
A CONVERSATION GOING GETTING THE MARKET ANALYSIS, PRINCIPAL
ANALYST AT INSIDER INTELLIGENCE. WE ARE WAITING THROUGH A LOT OF
UNKNOWNS, BUT WHERE IS YOUR HEAD AT.
YOU LOOK AT TIKTOK FROM THE POINT OF VIEW WHERE THIS IS A
PLATFORM WHERE ALMOST 50% OF AMERICANS ARE USING.
WHAT DO YOU THINK WILL HAPPEN? >> I THINK THE ANNOUNCEMENT
TODAY THEY WEREN'T GOING TO SELL WAS TO BE EXPECTED.
TIKTOK HAS SAID IT WILL WAGE AN INTENSE LEGAL BATTLE.
THE QUESTION IS WITH ALL THIS UNCERTAINTY, TIKTOK HAS A LOT
OF LOYAL USERS. MANY OF COME OUT IN FULL FORCE
TO DEFEND THE APP AND I EXPECT THEY WILL DO SO AGAIN.
I DON'T EXPECT MANY TO LEAVE. ADVERTISERS ARE NOT GOING TO
LEAVE AS LONG AS THERE'S AUDIENCES TO REACH. THEY ARE NOT GOING TO LEAVE IF
THERE IS MONEY TO BE MADE. IF THERE'S ONE THING
ADVERTISERS DO NOT LIKE IT IS UNCERTAINTY AND IF THIS
UNCERTAINTY SURROUNDING THE LEGAL BATTLE AND WHAT HAPPENS
TO TIKTOK SENDS ENOUGH OF THEM RUNNING FOR HIGHER GROUND, THAT
COULD LEAD TO CREATOR STARTING TO LEAVE END-USERS WILL FOLLOW
CREATORS WHEREVER THEY GO AND THAT COULD END UP AND UNDOING
OF TIKTOK BEFORE THIS MATTER IS RESOLVED IN COURTS OR IF LIGHT
DANCE CHANGES ITS MIND. ED: COMING INTO THE SHOW TODAY
BEFORE THE HEADLINE COST OF BYTEDANCE WITH NO PLANS TO SELL
TIKTOK WHAT WAS YOUR THESIS BEFORE THAT? >> MY THESIS IN TERMS OF
WHETHER IT WAS GOING TO BE SOLD OR NOT, WHAT I WAS THINKING
ABOUT MOSTLY WAS IN TERMS OF THE ALGORITHM AND HOW IMPORTANT
PART OF THAT WOULD BE IN TERMS OF THE SALE THAT COULD TAKE
PLACE. THE ALGORITHM IS PART OF WHAT
MAKES TIKTOK TICK AND NOT HAVING IT AS PART OF THE SALE
BUT LESS THAN THE VALUATION POTENTIAL EXPANDING LIST OF
FIRES -- OF BUYERS. EVEN IF BYTEDANCE WERE WILLING
TO SELL THAT. >> LAST NIGHT DURING MEDA'S
EARNINGS CALL WHEN ANALYST ASKS MARK ZUCKERBERG FOR BASICALLY
REACTION TO THE TIKTOK SITUATION , SUSAN LI WHO IS THE
CFO ANSWERED THE QUESTION AND THAT WAY ARE MONITORING IT --
WE ARE MONITORING IT. DO YOU HAVE A CLEAR WINNER IN
ANY SCENARIO WHO THE MAIN BENEFICIARY OF A TIKTOK DIVEST
OR BAN MIGHT BE IN THE SOCIAL MEDIA LANDSCAPE? JASMINE:
META HAS BEEN SILENT ON THE ISSUE.
THERE COULD BE RAMIFICATIONS. IN COUNTRIES WHERE MEDA DOES
BUSINESS, IT WOULD BE A CLEAR WINNER IF TIKTOK WERE TO
DISAPPEAR FROM THE U.S. MAINLY BECAUSE OF INSTAGRAM
REELS, IT'S ONE OF THE MOST NATURAL FITS FOR TIKTOK
DISPLACED USERS. I IMAGINE A LARGE NUMBER OF
TIKTOK USERS WOULD MOVE THEIR OR TO YOUTUBE SHORTS.
IT WOULD BE A WINNER IN TERMS OF AD DOLLARS.
A MASSIVE PLAYER IN THE DIGITAL AD LANDSCAPE WERE EXPECTING IT
TO BRING IN $64 BILLION. TIKTOK'S AD BUSINESS IS
SMALLER, IT IS ABOUT 10 BILLION AD DOLLARS.
$10 MILLION IN AD REVENUES SO OF COURSE SOME OF THOSE
DOLLARS, A BIG CHUNK WOULD GO TO META AS WELL. ED: WILL META BE THE WORLD'S
LEADING AI COMPANY? JASMINE: IT'S A GREAT QUESTION AND META
IS IN THE AI RACE TO WIN IT. I THINK IT COULD BE A DARK
HORSE IF YOU THINK ABOUT THE DISTRIBUTION POTENTIAL ALONE IT
HAS A BUILT IN AUDIENCE THROUGH FACEBOOK, INSTAGRAM, I WAS
DOING SOME CALCULATIONS AFTER THEY RELEASED META AI INTO THE
SEARCH BARS LAST WEEK AND META ONLY NEEDS 43% OF THE U.S.
FACEBOOK USERS TO USE META AI ON A MONTHLY BASIS FOR ITS
AUDIENCE TO BE AS BIG AS CHATGPT IS HERE IN THE U.S.
AND THAT IS NOT UNTHINKABLE IF YOU CONSIDER HOW PROMINENTLY
AND PERMANENTLY META AI IS DISPLAYED ACROSS THE APPS.
IN TERMS OF MONETIZATION THAT WILL BE A BIG FACTOR IN
DETERMINING WHO WINS THE AI RACE. META HAS A COMPETITIVE
ADVANTAGE THERE. WE DON'T KNOW HOW GENAI WILL BE
MONETIZED BUT PRETTY MUCH EVERYTHING META DOES IS LIKELY
TO BE AN AD PLAY CONNECTED TO ITS POWERFUL AD ECOSYSTEM.
I COULD SEE IT EMERGING AS THE UNEXPECTED WINNER.
THERE'S A LOT OF COMPETITION IN A CROWDED MARKET TO FACE. ED:
STILL DOWN MORE THAN 12%. ALWAYS GREAT TO HAVE YOU ON THE
PROGRAM, THANK YOU. I BROKE THIS STORY WITH KURT
WAGNER, WE JUST PUBLISHED IT ON THE BLOOMBERG TERMINAL.
ELON MUSK WILL BE DEPOSED ON MONDAY AS PART OF THE FIRST
ARBITRATION HEARINGS IN THE LEGAL PROCESS WHERE FORMER
TWITTER EMPLOYEES HAVE BASICALLY BROUGHT A CLASS
ACTION AGAINST ELON MUSK. THE FORMER TWITTER EMPLOYEES
SAY THEY WERE CHEATED OUT OF SEVERANCE PAY WHEN HE BOUGHT
THE SOCIAL MEDIA COMPANY IN OCTOBER OF 2022.
THE LAW FIRM WILL BE REPRESENTING ALMOST 2000 FORMER
TWITTER STAFF IN INDIVIDUAL ARBITRATIONS AS WELL AS MORE
THAN A DOZEN CLASS-ACTION LAWSUITS OVERALL IN THE COURTS.
THAT STORY JUST OUT ON BLOOMBERG AND WILL SURELY BE
ONLINE SOON. WE HAVE SO MUCH MORE AHEAD ON
THE PROGRAM. THIS IS BLOOMBERG TECHNOLOGY. CEO HOWARD LET NICK ABOUT HIS
DESK HOWARD LUTNICK. THIS IS BLOOMBERG. TIME FOR TALKING TECH. ABU DHABI STARTUP CHIEF 42 IS
CHOOSING SIDES. THE COMPANY KNOWN FOR A
SPRAWLING PRODUCT PORTFOLIO IS TEAMING UP WITH AMERICAN
COMPANIES LIKE AMAZON AND MICROSOFT AND DIVESTING FROM
ITS CHINESE PARTNERS. THE MOVE COMES AMID WORRIES
FROM U.S. OFFICIALS OF OPEN BACKDOORS
FROM THE CHINESE GOVERNMENT WITH SOME MEMBERS CONSIDERING
AN INTELLIGENCE BRIEFING TO DISCUSS G 42'S LATEST
PARTNERSHIP. THE CHINESE ONLINE TUTORING
PLATFORM HAS FILED FOR A U.S. IPO ACCORDING TO SOURCES.
IT ADDS TO SIGNS BEIJING IS LOOKING TO BOOST FUNDS FOR ITS
TECH INDUSTRY. THE COMPANY IS WORKED WITH
ADVISORS ON A POTENTIAL LISTING THAT COULD TAKE PLACE AS EARLY
AS THIS YEAR. THE SEMICONDUCTOR MAKER EXPECT
A FULL RECOVERY IN THE MEMORY CHIP MARKET LED BY AI RELATED
DEMAND. THE COMPANY POSTING FIRST-QUARTER RESULTS THAT
EXCEEDED EXPECTATIONS FOR CASTING ITS FASTEST PACE OF
REVENUE GROWTH SINCE 2010. THEY SAY THEY'RE ENTERING A
REBOUND PHASE AND IS PREPARING TO EXPAND CAPACITY FOR ITS
LEADING EDGE CHIPS. LET'S STICK WITH CHIPS AND
MEMORY, MACRON IS EXPECTED TO RECEIVE NEARLY $14 BILLION IN
U.S. GRANTS AND LOANS TO HELP THE
COMPANY BUILD NEW AMERICAN FACTORIES.
WE ARE ALSO EXPECTING INTEL RESULTS AFTER THE BELL, THERE
IS A LOT HAPPENING IN REAL TIME WITH THE SEMICONDUCTOR INDUSTRY.
LET'S START WITH MICRON. THEY ARE THE NUMBER THREE MAKER
OF MEMORY CHIPS. THE U.S. LEADER OF MEMORY CHIPS.
ALMOST $14 BILLION IN GRANTS AND LOANS OFFICIALLY.
IT SEEMS LIKE A LOT OF MONEY. IT'S NOT REALLY IS IT? IAN:
FOR SOMEONE LIKE YOU OR MICRON IT MIGHT NOT BE A LOT BUT FOR
ME IT IS. WHEN YOU PUT IT IN CONTEXT OF
THE 125 BILLION THEY ARE LOOKING TO PUT INTO A FACTORY
NETWORK THAT WILL BE BUILT OVER THE NEXT FEW YEARS CLEARLY IT
IS NOT. IT WILL HELP EVEN THE COST BASE
BETWEEN BUILDING HERE VERSUS IN ASIA OR THEY HAVE MOST OF THEIR
FACILITIES BUT IT IS NOT A FREEBIE BY ANY STRETCH. ED:
THE MEMORY MARKET IS INTERESTING.
HISTORICALLY COMMODITIZED BOOM AND BUST CYCLES. THE NEXT GENERATION GOES INTO
DATA CENTERS FOR AI AND MICRON IS COMPETING AGAINST THOSE
NAMES. WHY ARE THEY WANTING TO ON
SHORE THIS IN AMERICA? WHAT IS THE PLAYBOOK? IAN:
WE HAD A CONFERENCE CALL WITH POLITICAL LEADERSHIP BEHIND
THIS SAYING WE CANNOT AFFORD TO HAVE ALL OF OUR EGGS IN ONE
BASKET. WE NEED PRODUCTION OF THIS
INCREASINGLY IMPORTANT TECHNOLOGY IN THE UNITED STATES
AND AS YOU INDICATED IT ISN'T JUST A COMMODITY OR WON'T BE
JUST THE COMMODITY IT HAS BEEN IN THE PAST SO WE NEED THIS KEY
TECHNOLOGY IS THE ARGUMENT BEING MADE. ED:
WE'VE DONE A LOT ON THE PROGRAM. WE CONTINUE TO TALK ABOUT IT.
IN THE MOMENT, INTEL IS THE NEXT BIG CHIP NAME TO REPORT
AFTER THE BELL. WHAT ARE WE EXPECTING? IAN:
EXPECTATIONS ARE VERY LOW. A STOCK THAT WAS DOWN WAY BELOW
THE KEY SEMICONDUCTOR, WE ALREADY KNOW THE OPERATIONS ARE
STRUGGLING IN THE MANUFACTURING PAUL.
THE KEY QUESTION WE WILL SEE TODAY IS OUR PEACE IS GETTING
BETTER, COMPANIES AND HYPER SCALARS STARTING TO ON THE
SERVER CHIPS AGAIN. >> IS THE SAME STORY EVERY
QUARTER AND WE WONDER IF THE STORY CHANGES WHEN IT COMES TO
EARNINGS. THANK YOU. I WANT TO LOOK AT SHARES OF
NVIDIA. IT IS AN OUTLIER IN THE MARKETS
THIS MORNING. AS IS THE PHILADELPHIA
SEMICONDUCTOR INDEX LARGELY BECAUSE OF THE PULL UP FROM
NVIDIA. LAST NIGHT WHEN META REPORTED
ITS EARNINGS IN AFTER HOURS THERE WAS A NOTABLE MOVE LOWER
BY ABOUT 1.5, 2%. IT'S HIGHER 2% AND IF YOU
EXTRAPOLATE THE LOGIC, THERE WAS CONCERN ABOUT HOW MUCH META
WOULD SPEND ON AI INFRASTRUCTURE. WE ARE TALKING ABOUT NVIDIA'S
HIGH-PERFORMANCE GPU'S AND AI ACCELERATORS GOING INTO DATA
CENTERS. THAT'S WHERE THAT WILL BE SPENT.
ED: LET'S TALK AGAIN ABOUT META.
IT'S OFF SESSION LOWS BUT THERE'S A LOT OF ANXIETY IN
TECHNOLOGY MORE BROADLY BASED ON WHAT WE HAD IN META'S
EARNINGS. IN THE COMMENTARY ON THE AI
INFRASTRUCTURE SPEND THAT'S CAN HAPPEN. JEFFREY JOINS US NOW. ON META SPECIFICALLY WE NEED TO
HAVE A BIGGER PICTURE CONVERSATION, YOU CUT YOUR
PRICE TARGET TO $540 FOR 585. ARE YOU ACTUALLY ANXIOUS OR
WORRIED ABOUT WHAT YOU HEARD LAST NIGHT FROM ZUCKERBERG? >> I THINK IT IS A GIFT FOR
INVESTORS. WHAT WE'VE LEARNED IN AI YOU
THREE THINGS YOU NEED USERS, DATA AND MONEY.
THE LIST OF VENDORS THAT WILL SURVIVE IS VERY SMALL.
META IS GOING TO BE ONE OF THEM. FOR LONG-TERM SHAREHOLDERS THIS
IS A GREAT OPPORTUNITY, THEY WILL DO $25 EARNINGS POWER EVEN
A LOW 20 MULTIPLE TO MID IN THE BEGINNING BETWEEN 500 PLUS TO
600 PLUS IN THE STOCK. WHEN YOU LOOK BACK AND THE
EARNINGS IT HAS HUGE SUPPORT WITH STOCK TRADING AT 16 OR 17
TIMES RIGHT NOW. IN TERMS OF THE WORRY I DON'T
WORRY BECAUSE I THINK THEY ARE DOING THE RIGHT THING.
THESE INVESTMENTS ARE NOT GOING INTO THE METAVERSE.
THEY ARE GOING BACK INTO THE CORE PLATFORM FOR USERS TRYING
TO HAVE BETTER ENGAGEMENT HELPS ADVERTISERS CREATE CAMPAIGNS
FASTER IT WILL SEND MORE AD DOLLARS INTO THE PLATFORM.
IT WOULD BE SO EASY CAMPAIGN AND FIND A USER FOR YOUR TRAVEL
COMPANY FOR YOUR APPAREL COMPANY , YOU'LL BE ABLE TO
FIND MORE USERS AND MORE RELEVANT WAY.
IT PAYS OFF SO I'M NOT WORRIED. >> LET'S PUSH AHEAD TO ALPHABET
AND MICROSOFT AND IF I DRAW COMMONALITY AND THERE IS AN
ANXIETY OF WHAT HAPPENED WITH META IT'S THE IDEA FOR ALL THE
BILLIONS OF DOLLARS IN DATA CENTERS AROUND THE WORLD BEING
BUILT IT DOES NOT YET TRANSLATE TANGIBLY TO REVENUE GROWTH THAT
IS SELLING IN AI PRODUCT DIRECTLY.
IS THAT A THESIS YOU SHARE? >> WE ARE IN THE AGE OF AI
HYPE, NOT THE REVENUE CYCLE YET. AT OUR PRIVATE INTERNET
CONFERENCE WE HAD MANY TOP AI LEADERS AND EVERYONE SAID AI'S
AND INFRASTRUCTURE. YOU ARE DEAD RIGHT ABOUT THIS. IT IS NVIDIA, AND, -- AMD, DELL.
IT HASN'T GOTTEN TO THE APPLICATION LAYER.
95% OF THESE AI DEPLOYMENTS ARE PROOF OF CONCEPT.
LESS THAN 5% OF THEM ARE LIVE. HOW DO YOU MONETIZE WHEN YOU
ARE PROOF OF CONCEPT? IBM TALKED ABOUT THE BILLION
DOLLAR BACKLOG NUMBER ON THEIR CALL.
THAT WAS A FEW HUNDRED MILLION. THE INTEREST IS BUILDING BUT IN
TERMS OF THE IMPACT OVERALL IT STILL NOT THERE YET.
MICROSOFT REMAINS IN THE BEST POSITION BECAUSE THEY ARE THE
FURTHEST AHEAD AND THAT THE BEST MANAGEMENT TEAM OF ANYONE
WITH NO QUESTIONS ASKED. THEY WILL BE IN A GREAT SPOT
BUT EVEN FOR MICROSOFT IT WILL TAKE TIME AND AGAIN WE HAVE
SAID THIS, THE REVENUE REALITY IS KICKING IN LATER THIS YEAR
AND THAT'S WHY INVESTORS WANT TO BE OVER 8 -- OVERWEIGHT.
THAT'S WHERE CLIENTS ARE AND ALL MY STOCKS ARE RED. ED:
I AM NOT ASKING YOU TO DO MY JOB FOR ME BUT I WILL SPEAK TO
RUTH PRATT AFTER THE INVESTORS -- THE NUMBERS HIT THIS
AFTERNOON WHAT DO YOU THINK I SHOULD ASK? BRENT: THE NUMBER ONE QUESTION FOR
RUTH IS WHEN IS THE NEW CFO COMING ON BOARD, IT'S BEEN NINE
MONTHS AND YOU HAVE NOT EFFECTIVELY UPDATED US.
TWO, IF YOU DID SIMPLE THINGS WITH INVESTORS YOUR STOCK WOULD
GO UP 15%. GOOGLE IS THE LEAST SHAREHOLDER
FRIENDLY COMPANY OF ANYONE IN TECH AND THERE'S SIMPLE THINGS
THEY CAN DO TO GET THE STOCK HIGHER.
HAVE AN ANALYST DAY, TALK ABOUT AI, THEY'RE THE ONLY COMPANY
THAT DOESN'T TALK ABOUT AI. THEY ALL GIVE SOME COLOR.
WITH NO COLOR AND NO INSIGHT AND NO HANDHOLDING, OUR CLIENTS
ARE LIKE I WANT TO BE ABLE TO DO THE WORK AND I CAN DO THE
WORK IN THESE OTHER COMPANIES. RIGHT NOW I THINK INVESTORS ARE
FRUSTRATED WITH THAT. ONE WOULD BE THE CFO AND TWO
WOULD BE DO YOU REALIZE HOW EASY IT IS TO GET YOUR STOCK
HIGHER? ED: APPRECIATE THE HELP, THANK YOU.
THAT WAS NOT AN ANSWER I WAS EXPECTING.
THAT DOES IT FOR A PRETTY PACKED ADDITION OF BLOOMBERG
TECHNOLOGY. IT WAS A BIG MORNING IN MARKETS
BUT TECHNOLOGY STORIES WERE AT THE HEART OF IT. LISTEN TO THE PODCAST ON APPLE,
SPOTIFY AND WE ARE ALSO POSTING THE POD ON BLOOMBERG PLATFORMS.
BUCKLE UP, EARNINGS IS THE STORY TO COME.
