Intel Weighs Plan to Stem Losses, Musk's Brazil Battle | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER CLYDE IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS "BLOOMBERG TECHNOLOGY." INTEL IS WORKING ON A PLAN B. THE BLOOMBERG EXCLUSIVE ON BANKERS EYEING A POTENTIAL SALE OF THE FOUNDRY DIVISION AND MORE COST CUTS. ED: ELON MUSK'S BATTLE WITH BRAZIL
DEEPENS, THREATENING SOCIAL PLATFORM X AND SPACEX'S STARLINK BUSINESS. CAROLINE: TECH FIGHTS TO END THE WEEK STRONG. WE HAVE A KEY CIO ON THE SHOW. LET'S JUST DWELL ON THESE MARKETS FOR A MOMENT. WE END THE MONTH AS WE STARTED IT, ON THE DOWNSIDE. WE HAD A BRUTAL SYLLABUS ON AUGUST, AND -- BRUTAL SELL OFF TO START AUGUST. WE ARE TRYING TO MAKE SOME POWER HIGHER ON THIS FRIDAY, AND WE HAVE CERTAIN THINGS TO THANK FOR THAT. MORE BROADLY THIS IS A WEEK WE
ARE FIXATED ON ONE NAME ALONE, NVIDIA. HE DID NOT LIVE UP TO SOME OF THE HYPO. ED, WHAT ARE YOU WATCHING ON THE MICRO DATA? ED: YOU CAN NEVER QUITE GET THE NEWS FLOW. INTEL IS UP AT THIS POINT THE MOST SINCE OCTOBER 2023. THE MOST SINCE OCTOBER OR LATE 2022.
THERE IS A DETAILED NOTE FROM BLOOMBERG ABOUT BASICALLY PLAN B. CLEARLY THE STREET LIKES IT. CAROLINE: IT'S BLOOMBERG EXCLUSIVE REPORTING, LEARNING THAT INTEL IS LOOKING TO INVESTMENT BANKERS FOR HELP NAVIGATING THE MOST DIFFICULT PERIOD IN ITS 56-YEAR HISTORY. THE CHIPMAKER IS DISCUSSING A RANGE OF SCENARIOS INCLUDING A SPLIT OF ITS PRODUCT DESIGN AND MANUFACTURING BUSINESSES. IAN KING IS THE MAN HELPING DRIVE THE EXCLUSIVE REPORTING.
MAYBE THIS SHOULD COME AS NO SURPRISE, BUT IT IS QUITE WHOLESALE LOOK AT THE BUSINESS. >> AFTER THEIR EARNINGS ANNOUNCEMENT, THERE'S CLEARLY BEEN A LOT OF PRESSURE ON THE COMPANY, AND CLEARLY PEOPLE ARE LOOKING AT THIS COMPANY AND SAYING CAN YOU DO WHAT IT SET OUT TO DO. IT'S KIND OF NATURAL THE MANAGEMENT AND THE BOARD WOULD DO THEIR JOB, AND THAT IS TO LOOK AT THEIR OPTIONS, REALLY. NOTHING IS BEING DECIDED AND
EVERYTHING IS IN THIS PRELIMINARY STAGES. AS THE MARKET IS SHOWING US TODAY, THIS IS KIND OF A HEALTHY AND NATURAL THING FOR A COMPANY IN THIS KIND OF SITUATION TO BE DOING. ED: WE CALLED IT PLAN B, BUT IT MIGHT AS WELL BE PLAN C, D, E. THINGS HAVE BEEN DIFFICULT FOR INTEL. WE USE THE WORD "CHIPMAKER" A LOT FOR ALL KINDS OF SEMI- CONDUCTOR COMPANIES, BUT IN INTEL'S CASE IT IS TRUE. THE DESIGN CHIPS AND THEN THEY MANUFACTURE THEM FOR THEMSELVES. THE PROBLEM THEY HAVE GOT IS
THAT THEY DON'T CURRENTLY MANUFACTURE CHIPS FOR ANYONE ELSE. THAT IS THE FINANCIAL ISSUE. IAN: IT IS A CONUNDRUM. THEY ARE SAYING, LOOK, WE WANT TO BE A FOUNDRY. IN ORDER TO DO THAT, WE NEED MORE FACTORIES, WE NEED WHAT TECHNOLOGY. BUT THAT COSTS A LOT OF MONEY. THE MONEY COMES FROM THE
PRODUCTS THEY SELL. THE AMOUNT OF PRODUCT THEY ARE SELLING IS GOING DOWN OR NOT BEING AS LUCRATIVE AS THEY USED TO BE. IT IS A DIFFICULT SITUATION. THE ARGUMENT HAS BEEN FOR SOME TIME NOW THAT PERHAPS THESE TWO DIVISIONS ARE BETTER OFF SEPARATE, AND THAT WAY IT IS GOING TO BE EASY TO ATTRACT OUTSIDE CUSTOMERS. CAROLINE: THE KEY ISSUES THAT PAT GELSINGER CAME ON -- THIS WAS KIND OF HIS FOCUS. I WANT TO GO BACK TO WHAT HE WAS TELLING THE MARKET, THE INVESTOR BASE. TAKE A LISTEN, IAN.
>> WE DELIVERED A SOLID Q1. WE MET ON REVENUE, WE BEAT ON EARNINGS. A BIT TEPID IN THE FIRST HALF, BUT WE SEE A LOT OF IMPROVEMENT AS WE GO THROUGH THE YEAR. WITH THAT, OBVIOUSLY THE FOUNDRY BUSINESS -- WE ARE GOING TO SEE PROGRESS ON THE FOUNDRY BUSINESS EVERY QUARTER FROM NOW UNTIL THE END OF THE DECADE. CAROLINE: MAYBE NOT TO THE END OF THE DECADE. HOW MUCH OF AN IMPACT IS THIS ON PAT GELSINGER IN AND OF HIMSELF, IAN? IAN: HE CAME -- HE WAS BROUGHT INTO TURN THIS COMPANY AROUND, IF YOU LIKE, TO MAKE UP FOR THE MISTAKES OF HIS PREDECESSORS. THE PROBLEM IS THAT IT TAKES
TIME. YOU DON'T DESIGN A CHIP ONE DAY AND HAVE IT ON THE MARKET THE NEXT. WE ARE LOOKING AT YEARS TO HAVE NEW PRODUCTS OUT THERE AND GAIN TRACTION. IN SNC IS DOING WHAT HE SAID HE WAS GOING TO DO -- IN A SENSE HE IS DOING WHAT HE SAID HE WAS GOING TO DO. AT THE TIME INVESTORS SIGN OFF
ON THAT. THE PROBLEM IS WE ARE LOOKING AT THE BOTTOM, THE POINT AT WHICH THINGS START TO GET BETTER. THE PROBLEM PAT HAS IS A LOT OF THINGS HAVE COME TOGETHER AND THAT HASN'T HAPPENED YET. DON'T HAVE A SIGN WE ARE BACK ON THE UPSLOPE. ED: IAN KING, THANK YOU FOR THIS ENTIRE WEEK, NVIDIA EARNINGS, THE REPORTING. IT'S BEEN QUITE A WEEK IN THE
WORLD OF SEMICONDUCTORS. IT'S BEEN A BIG WEEK IN MARKETS, PARTICULARLY FOR TECHNOLOGY INVESTORS. UNDERSTATEMENT. THE FOCUS, AND VIDEOS EARNINGS
WHICH -- NVIDIA'S EARNINGS WHICH WERE JUST NOT ENOUGH AGAINST SKYHIGH EXPECTATIONS. TAKE EARNINGS AT LARGE ARE ALL UNDER DESK, TOO. JOINING US AS THE CHIEF INVESTMENT OFFICER OF THE MEDIC INNOVATION EQUITIES AT ALLIANCEBERNSTEIN. THAT IS WHERE WE START. DO WE KNOW MORE ABOUT THE WORLD OF TECHNOLOGY, PARTICULARLY THE LONGEVITY OF THIS AI INVESTMENT CYCLE, THAN WE DID PRIOR TO NVIDIA'S EARNINGS A FEW DAYS AGO? >> WELL, THANK YOU FOR HAVING ME HERE. SO TO START, ONE, DEMAND FOR MEANS VERY STRONG.
WE ARE AT THE VERY EARLY STAGES. WHEN WE SAY DEMAND IS STRONG, WE ARE SEEING IT FROM ENTERPRISES AND WE ARE SEEING IT FROM NATIONS AS WELL. AT THIS STAGE AND WITH NEW PRODUCT COMING, YOU CONTINUE TO SEE VERY ROBUST DEMAND FOR EXISTING PRODUCT. THAT IS SOMETHING WE HAVE NEVER SEEN BEFORE IN PREVIOUS PRODUCT CYCLES. THAT IS A STRONG SIGNAL. TWO, WHEN WE SAY "EARLY STAGES," YES, IT IS EARLY STAGES ON THE SUPPLY SIDE.
WE HAVE GONE FOR MANUFACTURING A SINGLE CHIP TO SYSTEM-LEVEL COMPUTE. A LOT OF THINGS HAVE BECOME TOGETHER, WHETHER IT BE MEMORY, NETWORKING, SOFTWARE, OR THE INFRASTRUCTURE SIDE. A LOT HAS TO COME TOGETHER, AND ECOSYSTEM ITSELF HAS TO ADAPT. THERE WILL BE UNEVENNESS FROM
TIME TO TIME. GO BACK TO A DEMAND-SUPPLY IMBALANCE, BUT WE REMAIN VERY CONSTRUCTIVE ON THE OUTLOOK OF AI. ED: LEI, ALLIANCEBERNSTEIN, BASED ON BLOOMBERG'S DATA, IS THE 22ND LARGEST SHAREHOLDER OF NVIDIA. JUST GENERALLY YOUR REACTION TO THE EARNINGS STATEMENT CALL AND THE WHOLE WATCH PARTY HAPPENING FOR THAT NAME AROUND THE WORLD? LEI: WE BELIEVE THAT NVIDIA REMAIN WHEN THE LEADING PLAYERS TO REMAIN ONE OF THE LEADING PLAYERS IN THE AI ECOSYSTEM. WHAT THEY ARE DOING IS TENSE FORMATIVE, AND IT IS REALLY. THAT'S WHAT THEY ARE DOING IS
TRANSFORMATIVE, AND IT IS -- WHAT THEY ARE DOING IS TRANSFORMATIVE, AND IT IS EARLY. SOMETIMES YOU HAVE TO LOOK OUT TO EVEN MAKE MONEY NEAR-TERM OR LONG-TERM. WE CONTINUE TO HAVE A CONSTRUCTIVE HAVE YOU OF THE AI ECOSYSTEM AS A WHOLE, AND WE BELIEVE IN NVIDIA'S LEADING POSITION AS WELL. CAROLINE: LEI, I CAN ONLY IMAGINE HOW OFTEN AT OCONTO -- A CARTEL PARTY OR DINNER PARTY YOU'RE TAKEN TO ONE SIDE AND ROLLED OVER THE RETURN DESK GRILLED ON -- GRILLED ON THE RETURN ON GENERATIVE AI A LOT OF PEOPLE ARE WONDERING WHEN GENERATIVE AI WILL CHANGE OUR LIVES. LEI: ONE, IT IS ABOUT ACCELERATED
COMPUTE, A NEW FORM OF COMPUTE THAT IS FAR MORE EFFICIENT AND POWERFUL. WHEN YOU LOOK AT EXISTING PLAYERS, THEY ARE USING IT TO SUPPORT THEIR CURRENT BUSINESS MODEL. IF YOU LOOK AT INFRASTRUCTURE AS A SERVICE IN THE CLOUD, YOU ARE SEEING THEIR SPENDING BECAUSE HEY DAVE -- AWS IS GROWING, GPC IS GOING. IN SOME EXISTING INDUSTRIES, WHETHER ADVERTISING OR LIFE SCIENCE, AUTONOMOUS DRIVING, FOR THAT MATTER, YOU ARE SEEING GENERATIVE AI MAKE A POSITIVE IMPACT ALREADY.
WE ACTUALLY BELIEVE THIS IS A GREAT TIME FOR ACTIVE INVESTING, BECAUSE THIS IS A TIME YOU CAN USE IT TO IDENTIFY THE FUTURE WINNERS AND LEADERS. IT IS AN OPPORTUNITY WHEN CENTER TRANSFORMATIVE PRODUCT CYCLE HAPPENS. YOU REDEFINE WHO ARE THE FUTURE WINNERS AND LEADERS. IT IS A ONCE-IN-A-LIFETIME OPPORTUNITY FOR THESE PLAYERS TO GET INTO EACH OTHER'S BACKYARD. WE ACTUALLY THINK YOU ARE GOING TO SEE MORE AND MORE BUSINESS MODEL EMERGING. WE ALWAYS SAY SOMETHING TO TAKE A STEP BACK. WITHOUT THE BUILDUP OF THE
MOBILE ECOSYSTEM, WE WOULDN'T HAVE UBER, SPOTIFY, FACEBOOK. WE WOULDN'T HAVE THE SUBURBS IF WE DIDN'T BUILD THE HIGHWAY. IT IS STILL EARLY. WE BELIEVE INFRASTRUCTURE
BUILDS ON ITSELF. WE ARE WATCHING VERY CLOSELY ACROSS INDUSTRIES TO SEE NEW BUSINESS MODEL ACTUALLY EMERGING. CAROLINE: BUT WHAT IS SO INTERESTING, YOU HAVE BEEN DOING THIS SINCE 1999, 2000. MANY PEOPLE GO BACK TO CISCO IN THOSE YEARS, AND ULTIMATELY HOW FAR IT RAN OUT, AND THIS FOCUS ON ONE PARTICULAR NAME, BUT INDEED, THE ENTIRE TECH SECTOR. IS THERE TOO MUCH FOCUS ON A SINGLE OR NAME LIKE NVIDIA? WHEN WE BROUGHT IT OUT? WHEN DO WE NOT GET THE ULTIMATE CRASH THAT WE SAW IN THE 1990'S, 2000S RUN-UP? LEI: I AGREE, THE MARKET IS HYPER FOCUSED ON ONE THING, BUT WE ARE FOCUSED ON THE ENTIRE ECOSYSTEM. WE THINK THERE ARE A LOT OF OPPORTUNITIES OUTSIDE. YOU TAKE THE SUPPLY CHAIN, FOR
EXAMPLE. IF YOU TAKE A STEP BACK AND THINK AT A HIGH LEVEL, THERE IS SUCH A-DEMAND IMBALANCE. THE DEMAND -- THERE IS SUCH SUPPLY-DEMAND IMBALANCE. THE DEMAND REMAINS SO ROBUST AND THERE ARE SUPPLY CHAIN ISSUES. THERE IS PRICING POWER AND PROFIT POOLS. WITH AI, WE ARE REDEFINING THE FUTURE BUSINESS MODELS. YOU CAN ACTUALLY FIND FUTURE
WINNERS AND LOSERS. IT IS THE ACCELERATED COMPUTE, THE IMPACT OF THE FUTURE OF TECHNOLOGY, AND FRANKLY, THE FUTURE OF ECONOMIC GROWTH. ED: LEI, I TRIED TO SPEAKER JOHNSON WRONG ABOUT THE ENERGY COMPONENT ABOUT THE SUPPLY CHAIN. LET'S LISTEN TO WHAT HE SAID.
>> THE MOST IMPORTANT THING WE DO IS INCREASE PERFORMANCE AND EFFICIENCY OF THE NEXT GENERATION. BLACKWELL IS MANY TIMES MORE PERFORMING THAN HOPPER AT THE SAME LEVEL OF POWER USED. THAT IS ENERGY EFFICIENCY. MORE PERFORMANCE WITH THE SAME AMOUNT OF POWER OR SAME PERFORMANCE AT A LOWER POWER. ED: JENSEN LOOKS AT THE ENERGY COMPONENT THROUGH THE LENS OF BLACKWELL'S GREATER EFFICIENCY. HOW DO YOU LOOK AT THE ENERGY COMPONENT OF ACCELERATED COMPUTING? LEI: WE CERTAINLY ARE VERY CONSTRUCTIVE ON THE ENERGY EFFICIENCY OF THE FUTURE OF COMPUTE, BUT WE ALSO ARE CONSTRUCTIVE ON THE PHYSICAL INSTRUCTOR ASPECT OF IT. WHEN WE LOOK AT HOW THE DATA CENTERS WILL BE POWERED, SO MUCH GREENFIELD POWER IS ACTUALLY NEEDED. WE ARE CONSTRUCTIVE ON THE
PHYSICAL ASPECT OF IT. IF HE THINK ABOUT THE DIGITAL INFRASTRUCTURE, IT AS LEAPFROGGED THE PHYSICAL INFRASTRUCTURE OF MANY DEVELOPED NATIONS COME AND WE FIND MANY INTERESTING PLAYS THERE AS WELL. ED: LEI, HOW DO YOU BALANCE ALL OF THIS? THE CHAOS AROUND NVIDIA EARNINGS, ALL OF THE CENTRAL BANK TO SPEAK, ALL OF THE ECONOMIC DATA IN ONE WEEK? WHAT WAS THAT LIKE FOR YOU AND ALL THE THINGS QUESTION YOUR DESK? LE-- ALL THE THINGS CROSSING YOUR DESK? LEI: THAT IS THE EXCITEMENT OF BEING IN INNOVATION INVESTOR. WE FOCUS ON STORIES THAT DRIVE THE STOCK FUNDAMENTALS WERE GONE THIS OF WHAT THE CENTRAL BANK WILL DO. WE ALWAYS GO BACK TO IN 2008, IPHONES STILL SOLD. IRRESPECTIVE OF ECONOMIC CYCLE, IF WE FOCUS ON FUNDAMENTALS, THAT IS WHAT ACTIVE INVESTMENT IS ABOUT. WE FIND STORIES THAT WILL GROW
IRRESPECTIVE A CYCLICAL BACKDROP. CAROLINE: IF YOU ARE LOOKING ACTIVE AT THE MOMENT AND YOU SEEK VALUATION OF CERTAIN COMPANIES, HOW DO YOU BROADEN THEN OUT, LOOK AT THE SUPPLY-SIDE? AM I AUTOMATICALLY THINK AND GO GLOBAL HERE? LOOK AT THE JAPANESE SUPPLIES THAT FEED INTO NVIDIA. HOW ARE YOU LOOKING AT THE BROADER WEALTH OF OPPORTUNITIES OUTSIDE THE MAG SEVEN NAMES? LEI: WE GO BACK TO THE FUNDAMENTALS.
WE ARE ACTIVE INVESTORS. WE LOOK AT EACH COMPANY WITH RESPECT TO ITS OWN GROWTH OPPORTUNITY. OBVIOUSLY AT A HIGH LEVEL WE LOOK AT HOW BIG THE SECULAR TREND IS. THEN WE LOOK AT THE DEMAND-SUPPLY IMBALANCE AND THE LONGEVITY OF IT. THEN WE LOOK AT IT AT A GLOBAL LEVEL AND FIND WHO ARE THE FUTURE WINNERS AND LOSERS. AGAIN, GO BACK TO GET IS A TIME OF CHANGE, A TIME OF INFLECTION, AND AT TIME OF INFLECTION SOMETIMES YOU FIND THE MARKET WILL UNDERESTIMATE THE GROWTH OPPORTUNITIES OF DIFFERENT PARTS OF THE SUPPLY CHAIN COME AND THAT IS WHAT WE FOCUS ON, ONE STOCK AT A TIME, HOW STRONG THE GROWTH MOMENTUM IS, AND MORE IMPORTANTLY, ARE THEY GOING TO GET MAJORITY OF THE FUTURE PROFIT POOL, HOW THE INDUSTRY IS BEING RESHAPED.
THAT'S WHAT WE FOCUS ON. CAROLINE: YOU TALK ABOUT THIS HIGHWAY, AND EVERYONE IS FOCUSED ON THE INFRASTRUCTURE PLAY. EVERYONE IS TRYING TO WORK OUT, PARTICULARLY THE VC COMMUNITY, WHERE THE VALUE IS IN THE APPLICATIONS. YOU TALK ABOUT HEALTH CARE AND ADVERTISING ADOPTED GENERATIVE AI. WHERE ARE SOME OF THE LONG-TERM OPPORTUNITIES? WHERE HAS IT BEEN UNDERVALUED AND UNDERAPPRECIATED WHERE IT CAN ADOPT GENERATIVE AI? LEI: AT A HIGH LEVEL I WOULD SAY WE ARE STILL EARLY, AND BEING INNOVATION INVESTORS, SOMETIMES IT DOES REQUIRE A TOUCH OF IMAGINATION, BECAUSE THE FUTURE HAS YET TO COME. THE FUTURE IS THE BEST PART OF IT. I WOULD ALSO POINT TO WE ARE ALREADY SEEING THIS TIME IS A
LITTLE BIT DIFFERENT. IF DO LOOK BACK THE PAST 15 YEARS, IT IS ABOUT CONSUMER ELECTRONICS. YOU ARE SEEING THE KILLER APP. WE CALL THEM THE KILLER APP BECAUSE WE CAN TOUCH AND FEEL. THAT SAID, THIS IS ABOUT THE INVESTOR TO UPGRADE, SO IT IS LESS OBVIOUS, BUT IT DOESN'T MEAN THE OPPORTUNITY IS NOT AS BIG. WE LOOK FORWARD, WE CAN SEE THE DIGITAL MANUFACTURING, WHERE WE THINK ABOUT RESTORING, HOW MUCH WE ARE GOING TO NEED ON THE AUTOMATION SIDE, AND ALSO THE FUTURE OF ROBOTICS.
THOSE ARE SOME OF THE AREAS THAT WE THINK WE ARE GOING TO SEE A LOT OF GREAT OPPORTUNITIES AHEAD. CAROLINE: LOVE HAVING YOU ON TO TALK US ALL THROUGH YOUR THESIS. CHIEF INVESTMENT OFFICER OF INNERVATION EQUITIES AT ALLIANCEBERNSTEIN. COMING UP, A CLASH BETWEEN
BRAZIL AND ELON MUSK IS HEATING UP AS THE COUNTRY THREATENS TO BLOCK X THE NEXT 14 HOURS. WHAT ARE YOU WATCHING, ED? ED: EARNINGS EARNINGS STILL HAPPENING. THERE ARE OTHER NAMES, AND ONE OF THEM IS DELL, AND DELL AS PART OF THE AI STORY. IT ASSEMBLES THE SERVERS THAT GO INTO DATA CENTERS, AND THAT HELPED IT WITH ITS EARNINGS REPORT. WHICH WE WILL GET MORE ON LATER IN THE PROGRAM. THIS IS "BLOOMBERG TECHNOLOGY." ED: A WIN FOR ELON MUSK. THERE HAS BEEN A DISMISSAL OF A
LAWSUIT CLAIMING HE PUMPED UP THE PRICE OF THE DOGECOI INTO AN $250 BILLION "PYRAMID SCHEME." INVESTORS WHO LOST THOUSANDS OF DOLLARS INVESTING IN THE QUINN BLAMED MUSK FOR --IN THE COIN BLAMED MUSK FOR PROMOTING THE COIN ON X. A JUDGE DISMISSED CLAIMS THAT MUSK'S STATEMENTS WERE ASPIRATIONAL RATHER THAN FACTUAL, AND NO REASONABLE INVESTOR COULD RELY UPON THEM. MEANWHILE, A CLASH IN BRAZIL FOR ELON MUSK.
THE COUNTRY'S TOP JUSTICE IS TAKING ON MUSK COMPANIES AS HE BLOCKED STARLINK BANK ACCOUNTS IN LINE AMERICA'S LARGEST ECONOMY. ELON CALLING FOR JUSTICE AND OUTRIGHT CRIMINAL OF THE WORST KIND. KURT WAGNER HAS THE JOB OF JOINING US IN EXPLAINING WHAT IS GOING ON. LET'S START THERE. KURT, WHAT IS GOING ON? >> THIS HAS BEEN ONGOING FOR A WHILE NOW.
THIS JUDGE, AS YOU MENTIONED, HAS BEEN TRYING TO GET X TODAY ACTION AGAINST CERTAIN ACCOUNTS ON THE PLATFORM, RIGHT-WING ACCOUNTS, MISINFORMATION, THINGS LIKE THAT. ELON IS A SELF-PROCLAIMED FREE-SPEECH ABSOLUTIST AND IS SAYING WE ARE NOT GOING TO DO THAT, WE ARE NOT GOING TO REMOVE THESE ACCOUNTS OR ADHERE TO YOUR DEMANDS. AS A RESULT, HE A FEW WEEKS AGO SHUT X'S OPERATIONS IN THE COUNTRY. NOW THE JUDGE IS SAYING YOU NEED AT LEAST A LEGAL REPRESENTATIVE HERE IN THE COUNTRY IN ORDER TO OPERATE, AND IF YOU DON'T APPOINT ONE, WE WILL REMOVE THE APP ENTIRELY. IT SOUNDS LIKE X IS NOT GOING
TO APPOINT SOMEONE, SO WE ARE IN A BIT OF A STANDOUT WAITING TO SEE IS THIS JUDGE IS GOING TO FOLLOW THROUGH AND BAN X IN BRAZIL. CAROLINE: AND THIS IS WHERE ELON MUSK'S CONGLOMERATE OF COMPANIES SUDDENLY COMES TO BYTE HIM, BECAUSE THIS JUDGE ISN'T TAKING ACTION JUST AT X ALONE. KURT: THAT'S RIGHT, THIS IS THE ELON, INC., UNIVERSE. TO GET TO X, THE JUDGE IS GOING THROUGH STARLINK, ONE OF ELON'S OTHER BUSINESSES. FREEZING BANK ACCOUNTS THERE IN ORDER TO TAKE MONEY FROM FINES THAT X OWES.
TO YOUR POINT, CAROLINE, THIS IS A GREAT EXAMPLE WHERE RUNNING SIX DIFFERENT COMPANIES, ESPECIALLY IN COMPANIES WHERE THERE ARE ADVERSARIAL RELATIONSHIPS, CAN BE A DETRIMENT TO HIM. THIS IS SOMETHING THAT WENT ELON FIRST BOUGHT X WAS A REAL CONCERN, WITH THEIR BE GOVERNMENTS AROUND THE WORLD THAT WOULD APPLY PRESSURE ON TESLA OR STARLINK IT ORDER TO GET TO THE SPEECH-RELATED ISSUES THAT HAVE BEEN ON X. WE ARE SEEING THAT PLAY OUT IN BRAZIL. ED: KURT, I KNOW THIS SOUNDS LIKE A SIMPLE,, BASIC QUESTION BUT WHAT IS X'S FOOTPRINT IN THE COUNTRY OF BRAZIL? WHAT ARE WE TALKING ABOUT OPERATIONALLY? KURT: OPERATIONALLY I BELIEVE IT WAS SOMEWHAT SMALL COMPARED TO A LOT OF WHERE THEY OPERATE IN OTHER COUNTRIES, LIKE THE U.S. OR EVEN IN JAPAN. FROM A USER BASE PERSPECTIVE, WE DON'T KNOW EXACTLY.
I'VE SEEN ESTIMATES BETWEEN 20 MILLION AND 40 MILLION ACTIVE USERS THERE. MY UNDERSTANDING IT IS AROUND THE THIRD-LARGEST MARKET FOR THEM FOR USER BASE BEHIND THE UNITED STATES AND JAPAN. SIGNIFICANT FOR SURE. RESULT IS A COUNTRY WHERE PEOPLE ARE VICTIMS BRAZIL IS A COUNTRY WERE -- BRAZIL IS A COUNTRY OR PEOPLE ARE ACTIVE ONLINE, WHATSAPP IS HUGE THERE, INSTAGRAM IS HUGE THERE.
THIS IS A SIGNIFICANT ISSUE FOR THEM. I DON'T KNOW IF THE USER TRANSLATES TO A HUGE REVENUE DRIVER FOR THE COMPANY. REGARDLESS, THE OPTICS AND TAKING A COUNTRY OF SUCH IMPORTANCE AND SIGNIFICANCE IN THE WORLD, BUT CERTAINLY LATIN AMERICA, OFF OF X ENTIRELY IS A BIG DEAL IF THIS ENDS UP HAPPENING. CAROLINE: WE ARE USED TO ELON MUSK FIRING OFF ON HIS OWN PLATFORM, BUT HE HAS GOT SOME FIGHTING TALK FOR THIS SUPREME COURT JUSTICE, IN PARTICULAR SAYING THAT ULTIMATELY HE IS AN OUTRIGHT CRIMINAL OF THE WORST KIND MASQUERADING AS A JUDGE. WHAT SORT OF IMPLICATIONS IS THIS GOING TO HAVE FOR ELON MUSK TO SAY THAT SORT OF THING? KURT: WELL, IT IS HARD TO IMAGINE THERE IS A BRIDGE BEING REBUILT AT ANY POINT IN THE NEAR FUTURE. HE'S GOING SCORCHED EARTH ON THIS JUDGE.
HE POSTED AN IMAGE THAT WAS GREETED BY GRO -- CREATED BY GROK, IS AI BOT, THAT SHOWED THE JUDGE BEHIND BARS, SAYING YOU ARE GOING TO JAIL. WHEN YOU HAVE SOMEONE LIKE ELON WHO IS KNOWN TO LASH OUT AT HIS COMPETITORS AND HAS ALMOST 200 MILLION FOLLOWERS ON X, THESE ARE SERIOUS, SERIOUS ATTACKS. WE'LL SEE WHAT IS GOING TO HAPPEN, BUT I THINK THE BRIDGE IS BURNT QUITE AGGRESSIVELY. CAROLINE: KURT WAGONER, APPRECIATE IT. WE WILL BE THINKING ABOUT ALIBABA NEXT. STAY TUNED. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: IT IS TIME NOW FOR "TALKING TECH." ALIBABA HAS WON THE ENDORSEMENT OF CHINA'S ANTITRUST WATCHDOG. ESTATE ADMINISTRATION FOR MARKET REGULATION SAYING THE COMPANY HAS CEASED TO THE ANTI-COMPETITIVE PRACTICES. THE MOVE SUGGESTS THAT BEIJING IS KING TO SIGNAL SUPPORT FOR THE INTERNET SECTOR. CHINESE EV MAKERS ARE FEELING THE IMPACT OF EU TARIFFS. THEY ACCOUNTED FOR 9.9% OF EV REGISTRATIONS IN EUROPE IN
JULY, DOWN FROM 10.2% IN JULY 2023. AUTOMAKERS HAVE BEEN SCRAMBLING TO ADJUST TO THE INTRODUCTION OF NEW TARIFFS ON JULY 5 THAT RAISED DUTIES ON CHINESE-MADE EV'S. UBER PLANNING TO EXPAND ITS SOUTH KOREAN BUSINESS AND STEP UP ITS BIT WITH A DOMESTIC RIVAL. THE CEO IS MAKING HIS FIRST OFFICIAL BUSINESS TRIP TO THE ASIAN NATION, SAYING THE COMPANY IS MAKING HEADWAY IN THE REGION AS RIDES JUMPED 8% THE FIRST HALF OF 2024. ED: COMING UP, NVIDIA IN TALKED ABOUT JOINING IN OPENAI FUNDING ROUND ALONG WITH APPLE AND MICROSOFT. IT'S TRANSFER DEADLINE DAY FOR COPIES RAISING MONEY. WE WILL HAVE THE DETAILS.
THIS IS "BLOOMBERG TECHNOLOGY." >> NVIDIA, NOW ONE OF THE WORLD'S MOST VALUABLE COMPANIES, IMMERSED FROM AN INDUSTRY OFTEN MISUNDERSTOOD. GAMING. THE FIRST MAJOR TRIUMPH IN 2001
WHEN BILL GATES -- THE CONSOLE GAMING PLATFORM. A VITAL STEPPINGSTONE THAT ALIGNED NVIDIA HARDWARE WITH PC BOUGHT BY GAMERS KEEN ON UPGRADING COMPONENTS. SOMETHING ELSE HAPPENED DURING THOSE 20 YEARS. PEOPLE STARTED TO ASK IF THESE THINGS ARE SO GOOD TRANSPORTING CODE, COULD IT WORK THE OTHER WAY AROUND? GPUS EXCEL AT SOMETHING, DIVIDING A PROBLEM INTO SMALL CALCULATIONS AND SOLVING THEM QUICKLY. >> A LOT OF TIME YOU SEE THERE ARE RUNS BECAUSE THERE ARE A LOT OF APPLICATIONS OUTSIDE OF GAMING.
>> COMPANIES ACQUIRE GPU'S FOR USE WITH ARTIFICIAL INTELLIGENCE. CHATGPT USES NVIDIA HARDWARE. NVIDIA BECAME THE LEADER BY ADVANCING TECHNOLOGY DESIGN FOR GAMES BUT VALUABLE TO INDUSTRIES. THEY KNEW TO SUCCEED THEY NEEDED GAMERS. ED:
BLOOMBERG ORIGINALS TAKING A LOOK BACK AND HOW NVIDIA GAME DOMINATED THE AI INDUSTRY. CHECK OUT THE FULL VERSION AT YOUTUBE OR BLOOMBERG.COM. LET'S LOOK AT WHAT SHARES OF NVIDIA HAVE BEEN DOING. FIVE DAYS, WE ARE DOWN BY AROUND 9%. IT IS THE BIGGEST WEEKLY DECLINE GOING BACK TO APRIL.
THAT IS THE KIND OF RESPONSE WE HAD. THE BAR WAS SO HIGH, A STOCK UP 150% YEAR-TO-DATE, ALMOST 1000% FROM ITS 2022 BEAR MARKET I DO NOT THINK I HAVE EXPERIENCED ONE WEEK LIKE THIS BUT IT HAS BEEN A RIDE, LET'S SAY THAT. CAROLINE: $300 BILLION WIPED OFF ALMOST IN TERMS OF MARKET CAPITALIZATION.
SOURCES TELLING BLOOMBERG THAT NVIDIA IS IN TALKS TO JOIN A FUNDING ROUND THAT WOULD VALUE THE START ABOUT MORE THAN $100 BILLION. LET'S GET RIGHT TO IT. WHY WOULD NVIDIA WANT TO TAKE A STRATEGIC STAKE IN OPENAI? >> IT IS NVIDIA, MICROSOFT AND APPLE, THE THREE MOST VIABLE TECHNOLOGY COMPANIES IN THE WORLD. THEY HAVE A VESTED INTEREST IN THE SUCCESS OF OPENAI. THE REASON NVIDIA HAS BEEN SUCCESSFUL OVER THE LAST TWO YEARS IT IS SELLING A TON OF COMPONENTS THE GPU'S MENTIONED TO COMPANIES LIKE OPENAI AND OTHERS THAT ARE POWERING FEATURES ON THE CLOUD LIKE CHATGPT, ALEXA AND OTHER TYPES OF AI SERVICES. APPLE IS INTEGRATING CHATGPT INTO THE IOS TEAM LATER THIS YEAR. MICROSOFT ALMOST ENTIRE
STRATEGY IS RELIANT ON OPENAI. THEY KNOW OPENAI IS IMPORTANT TO THE PRODUCTS OF TODAY. IT IS ALSO POSSIBLE LIKE IN THE CASE OF APPLE THAT EVEN MORE CRITICAL TO EXPAND INTO THEIR ECOSYSTEMS. NOT ONLY DO THEY HAVE A VESTED INTEREST, THEY WANT SOME SKIN IN THE GAME. THEY WANT TO BE AT THE TABLE. TO DO THAT YOU HAVE TO PUT IN $100 MILLION-PLUS. ED: IT IS NOT STRAIGHTFORWARD.
$100 MILLION IS A DROP IN THE OCEAN FOR NVIDIA BUT MY UNDERSTANDING IS THEY WANT TO KNOW WHAT IS GOING ON. NOT SUGGESTING THEY GET A BOARD SEAT AT THE TABLE BUT AT LEAST THEY WOULD KNOW WHAT IS GOING ON, BROADLY SPEAKING. IT IS COMPLETELY DIFFERENT TO APPLE. THE APPLE SIDE OF THIS TO ME IS THE BIGGER BIT.
WHAT IS YOUR UNDERSTANDING OF APPLE'S MOTIVATIONS TO BE ON THE CAP TABLE OF OPENAI? MARK: APPLE WANTED A BOARD OBSERVER SEAT. THEY LITERALLY WANTED TO BE AT THE TABLE. THEY ONE OF SAME ACCESS MICROSOFT HAD DESPITE A LOT LESS MONEY INVESTED.
FOR VARIOUS REASONS, OPENAI PULLED OUT OF THAT BOARD OBSERVER SITUATION WITH BOTH MICROSOFT AND APPLE LAST MONTH IN JULY. RIGHT AFTER AGREEING TO THE APPLE BOARD OBSERVER SEAT, SO THAT FELL APART. THE NEXT BEST WAY TO BE INVOLVED AND HAVE A SEAT AT THE FIGURATIVE TABLE IS TO JOIN THE CAP TABLE AND BE AN INVESTOR. IT IS IMPORTANT TO THE NEW VERSION OF IPHONE AND IOS GIVEN IT WILL BE PART OF THE NEW AI SERVICES. OVER TIME, APPLE'S INTERNAL AI STRATEGY IS KIND OF WEAK.
IF THEY DO NOT GET UP TO SNUFF THEY WILL HAVE TO MAKE A DECISION TO PARTNER WITH SOME SORT OF TEAM WITH JENNIFER OF AI ORGANIZATION AND THERE IS NO BETTER PARTNER AT THIS POINT IN OPENAI. BY BEING INVOLVED THEY GIVE THEMSELVES OPTIONS FOR THE FUTURE BUT ALSO HAVE A BETTER UNDERSTANDING OF WHAT IS GOING ON FOR A CURRENT PARTNER. CAROLINE: ONCE AGAIN, ITS INTEGRAL LARGE LANGUAGE MODEL MAKERS AT THE SAME BIG TECH COMPANIES. THEY CANNOT LIKE THIS. MARK: I AM SURE THEY DO NOT LIKE IT. AT THIS POINT, THE ONLY THING THEY CAN DO IS TRY TO STOP IT. WE HAVE NOT SEEN ANY -- EVIDENCE THEY WILL TRY TO PULL THIS APART.
IT IS UNCLEAR IF OPENAI IS BLOCKING INVESTMENTS FROM OTHER COMPANIES SO WE HAVE TO SEE HOW OPEN THIS IS. I THINK REGULATORS WILL WAIT AND SEE WHAT THE FINAL NUMBERS ARE. THIS IS ALL FLUID. THERE IS A POSSIBILITY MICROSOFT, APPLE AND NVIDIA ARE NOT PART OF THIS. THAT IS EXTRAORDINARILY UNLIKELY.
WE ARE A COUPLE WEEKS TOO EARLY FOR REGULATORS TO START CREATING PROBLEMS FOR THESE INVESTMENTS. IF THEY DO MOVE THROUGH, YOU CAN BE CERTAIN THEY WILL. ED: I DO NOT THINK IT IS THE END OF THE STORY. MARK GURMAN, THANK YOU VERY MUCH. COMING UP, MCAFEE LAUNCHING THE WORLD'S FIRST DEEPFAKE DETECTOR. WE WILL DISCUSS WITH THE CTO NEXT.
MORE EARNINGS, MORE MOVERS, WHAT IS GOING ON? CAROLINE: MORE THAN 15% HIGHER EARNINGS. THE DATABASE SOFTWARE COMPANY IS STRONG FOR THE SECOND QUARTER RESULTS, BEATING EXPECTATIONS. SOME ANALYSTS CITIES ARE ENCOURAGING RESULTS. NOT ALL IS PERFECT WITH THE OVERALL GROWTH RATES HAVE COME DOWN.
THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: LET'S GET A CHECK ON THE MARKETS. BITCOIN. FOR EVERYTHING THAT HAS BEEN GOING ON, TAKE A LOOK AT THE LAST FIVE DAYS. WE ARE BELOW $60,000 PER TOKEN. THERE WAS A PERIOD WHERE IT WAS SLIGHTLY DOWN.
IT HAS BEEN BEHAVING LIKE A RISK ASSET IN LINE WITH EVERYTHING ELSE GOING ON. THERE IS SOME POLITICAL ADJACENT HEADLINE THAT MIGHT BE AFFECTING IT. I DO NOT KNOW BECAUSE I HAVE BEEN QUITE BUSY WITH THE OTHER STUFF BUT THAT IS THE HEADLINE I SEE ON THE BLOOMBERG TERMINAL. CAROLINE: THIS IS SUPPLY AND DEMAND DYNAMICS WHEN IT COMES TO CRYPTO AND BITCOIN IN PARTICULAR.
HOW MUCH BITCOIN -- SONALI: MANY OF THESE GOVERNMENT SEIZED BITCOIN LOOKING FOR CRIMINAL ACTIVITY. THE NUMBERS ARE QUITE LARGE. THE U.S. ADMINISTRATION HOLDS MORE THAN 200,000. UKRAINE HOLD SOME AS WELL. DONATIONS TO FINANCE THEIR PART IN THE WAR. WHEN YOU LOOK AT WHAT IS GOING ON, A LOT OF THIS IS WRITTEN ABOUT THE SUPPLY ISSUE, THAT OVERHANG TO THE TUNE OF $33 BILLION.
FOR THE PEOPLE WHO BOUGHT IT DURING AUGUST, THAT HAS BEEN PRETTY FRUSTRATING. YOU SAW A BIG BUMP IN BITCOIN PRICES AT THE HEELS OF THAT POWERFUL P -- POWELL PIVOT BUT YOU HAVE SEEN ALMOST ALL OF IT ERASED AFTER THE BUMP. $56,000 TO $65,000. THE OTHER BRIGHT SPOT IS FIN TRADING VALUES.
ALONG WITH THE BITCOIN ETF MARKETS. ACCORDING TO BLOOMBERG INTELLIGENCE, YOU HAVE SEEN AS HIGH AS $10 BILLION IN LIQUIDITY AND NOW CLOSER TO $1 BILLION. THINGS COULD BE DIFFERENT ONCE WE GET PAST THE SUMMER SLUMP BUT IT HAS BEEN AN ORDERLY MOVEMENT THIS MONTH, EVEN IF BITCOIN HAS NOT KEPT UP WITH THE BROADER MARKET. ED: THE POLITICS ADJACENT SIDE OF BITCOIN I WAS REFERRING TO WAS FORMER PRESIDENT TRUMP AND MAKE BITCOIN GREAT AGAIN. THE QUOTE IS HE WANTED BITCOIN TO BE MADE IN THE UNITED STATES. AHEAD OF THE ELECTION, THAT IS A FACTOR. SONALI:
IT CERTAINLY IS. WHEN IT COMES TO BITCOIN MINING, A LOT OF THAT IS DONE BASED OUT OF CHINA. SHANGHAI AND BEIJING-BASED FIRMS THAT ARE MUCH BIGGER IN THE BITCOIN MINING SPACE THAN WHAT YOU SEE IN THE U.S. THERE IS A SERVICE YOU HAVE SEEN SOME MOVEMENT TOWARD IN RECENT DAYS BUT THERE IS A LONG WAY TO CATCH UP AND A LOT OF ENERGY NEEDS TO HELP THAT CATCH UP HAPPEN.
NEXT WEEK WE WILL BE TACKLING THIS ISSUE AT 12:00 P.M. ON TUESDAY BECAUSE HOW HARD IS IT TO MAKE THE MOVEMENT TO U.S.-BASED FIRMS? WE WILL ASK OUR GUESTS ABOUT HOW THEY FEEL. WE DO NOT HAVE A LOT OF INFORMATION FROM KAMALA HARRIS ON HOW SHE MIGHT APPROACH CRYPTO. PEOPLE HAVE BEEN FRUSTRATED WITH THE FCC UNDER THE BIDEN ADMINISTRATION. YOU HAVE HAD BITCOIN REACHED RECORD HIGHS UNDER BIDEN AND MULTIPLE ETF'S APPROVED. IT IS HARD TO SAY AT THE END OF
THE DAY. THEY JUST WANT CLARITY. IT SHOULD SEEM LIKE WE WILL GET MORE CLARITY IN THE COMING MONTHS. ED: SONALI BASAK, HAPPY FRIDAY. THANK YOU VERY MUCH. COMPUTER SECURITY COMPANY MCAFEE HAS RECENTLY ANNOUNCED A NEW TOOL THAT WILL HELP USERS FIGURE OUT IF THE AUDIO THEY ARE LISTENING TO IN A VIDEO IS REAL OR A DEEPFAKE. IT COMES AT A PIVOTAL TIME. WE ARE AROUND TWO MONTHS FROM
THE U.S. PRESIDENTIAL ELECTION. EARLIER THIS YEAR WE SAW A SCAM THAT IMPERSONATED PRESIDENT BIDEN URGING VOTERS IN NEW HAMPSHIRE TO SKIP VOTING IN THE PRIMARIES. STEVE GROBMAN IS CTO AT MCAFEE. I WANT TO START BY ASKING YOU, WHY THE TWO WILL NOW? WHY DID YOU NOT DO THIS SOONER? STEVE: THANK YOU FOR HAVING ME. WE ARE AT A PACE AT MCAFEE AND THE INDUSTRY WHERE WE NOW HAVE THE POWER TO BUILD THIS KIND OF TECHNOLOGY TOOL AND MAKE IT PRACTICAL FOR CONSUMERS. PART OF THAT IS WHAT WE HAVE DEVELOPED. THERE IS A RAPID INVESTMENT AT
MCAFEE BUT ALSO NEW TECHNOLOGY IN THE INDUSTRY. FOR EXAMPLE, MCAFEE DEEPFAKE DETECTOR THAT WE LAUNCHED LAST WEEK, IT TAKES FULL ADVANTAGE OF THE NARROW PROCESSORS IN THE LATEST GENERATION OF AI PCS. IT IS THAT HARDWARE-SOFTWARE COMBINATION THAT MAKES THIS PRACTICAL SO USERS CAN RUN THE ANALYSIS ON THE AUDIO, LOOKING FOR WHETHER SOMETHING IS REAL OR FAKE CONTINUOUSLY WITHOUT IMPACTING OUR PERFORMANCE. ED: OK.
THERE ARE SOME CONSTRAINTS ON THE ROLLOUT OF THIS. I JUST WANT TO SAY, AGAIN, IS ANALYSIS OF THE AUDIO IN A VIDEO. IT TOOK ME A WHILE TO GET MY HEAD AROUND THAT. WHY IS THAT APPROACH IMPORTANT? AN AUDIO REVIEW ON A VIDEO? STEVE: WE LOOKED AT THIS CLOSELY WOULD WE STARTED OUR RESEARCH INTO DEEPFAKES AND ONE THING WE FOUND WAS ALMOST EVERY FAKE VIDEO HAS FAKE AUDIO. OFTEN THERE IS NO FAKE VIDEO ELEMENT OF IT. SOMETIMES IT IS GOING TO B ROLL, SOMETIMES IT IS USING REAL VIDEO OF SOMEONE AND HAVING FAKE AUDIO.
BY CHECKING AUDIO FIRST, WE ARE ABLE TO COVER THE MOST SCAMS AND DISINFORMATION THAT IS HARMFUL TO CONSUMERS. WE KNOW THAT DEEPFAKE AUDIO IS USED FOR ALL SORTS OF PURPOSES, SOME OF IT NOT HARMFUL. THERE IS A LOT OF AI PARODY VIDEOS OUT THERE, THAT IS FINE.
WHAT WE ARE TRAINED TO HELP CONSUMERS DETECT IS WHEN THEY ARE LOOKING AT SOMETHING LIKE AN INVESTMENT SCAM THAT HAS A CELEBRITY OR WELL-KNOWN INDIVIDUAL MAKING STATEMENTS AND IT IS THAT DEEPFAKE AUDIO THAT THEY CAN THEN DETECT. THAT IS GENERATED BY AI. YOU HAVE TO BE A BIT MORE CAREFUL. ESPECIALLY AS WE ARE TWO MONTHS AWAY FROM THE U.S. ELECTION, ANYTHING WE CAN HELP
TO ARM CONSUMERS WITH POWERFUL TOOLS TO DETECT DISINFORMATION IS SUPER HELPFUL. CAROLINE: IT IS REALLY QUITE INTERESTING, ALMOST FUN, GOING ON TO YOUR WEBSITE AND SEEING -- TAYLOR SWIFT WILL NOT SEND YOU A FREE DUTCH OVEN. IT SHOWS A LOT OF B ROLL. GWYNETH PALTROW FOR EXAMPLE. GOING BACK TO WHAT ED SAID ABOUT LIMITATIONS, HOW CAN WE BROADEN THIS OUT. STEVE: THIS IS OUR INITIAL LAUNCH.
ONE THING YOU WILL SEE FROM MCAFEE IS THIS IS THE FIRST INNING AND ALONG GIVEN WE ARE NOT STOPPING. WE HAVE A LOT OF GREAT TECHNOLOGY IN THE PIPELINE LOOKING AT ALL SORTS OF OTHER ELEMENTS AROUND HELPING CONSUMERS DETECT AI GENERATED CONTENT. WE ANNOUNCED SOME PARTNERSHIPS WITH INTEL A FEW MONTHS AGO AND YOU WILL SEE SOME GREAT THINGS FROM US IN THE FUTURE. WHILE WE ARE SUPER EXCITED ABOUT WHAT WE LAUNCHED THIS WEEK, IT IS REAL PRODUCT WE CAN GET IN THE HANDS OF CONSUMERS. TO SOLVE A REAL DIFFICULT PROBLEM, THERE IS A LOT TO COME. CAROLINE: WE HAVE AN AUDIENCE THAT LOVES THE NITTY-GRITTY OF THE PROBLEM. HOW DIFFICULT IS IT?
WHAT TECHNOLOGY HAVE YOU USED YOURSELVES TO UNCOVER THESE DEEPFAKES? STEVE: IT IS A DIFFICULT PROBLEM. ONE REASON I AM SO PROUD OF THE TECHNOLOGISTS AND THE DATA SCIENTISTS WE HAVE AT MCAFEE IS WE INVENTED A LOT OF NEW TECHNOLOGY BUT WE ALSO WORK WITH OUR HARDWARE PARTNERS, THE GREAT FOLKS AT QUALCOMM AND INTEL HAVE BEEN WORKING WITH US FOR MONTHS. WE HAVE BEEN WORKING WITH OUR OS PARTNERS, MICROSOFT, AND WE BUILD NEW AI ALGORITHMS THAT ARE BASICALLY DETECTING AI GENERATED CONTENT. YOU CAN ALSO THINK OF IT AS WE ARE BUILDING GOOD AI TO DETECT AI GENERATED CONTENT THAT COULD BE HARMFUL TO CONSUMERS AND REALLY GIVING THEM THE TOOLS THAT THEY CAN USE IN CONJUNCTION WITH A BETTER EDUCATION OF UNDERSTANDING THAT THREATS AND SCAMS CAN BE AI GENERATED, TO PROTECT THEMSELVES. ONE WAY WE ARE DOING THAT IS IN CONJUNCTION WITH THE LAUNCH, WE ARE ALSO LAUNCHING AN AI HUB, WHICH IS A WEBSITE THAT FOCUSES ON THE EDUCATION SIDE. IT IS A COMBINATION OF TECHNOLOGY AND EDUCATING THE GENERAL PUBLIC TO KEEP THEMSELVES SAFE FROM THIS NEW WAVE OF CYBERCRIME THAT CAN BE REALLY DAMAGING. WE HAVE SEEN SOME OF THE AI
SCAMS THAT CAN TAKE ANYWHERE FROM $250 TO $500,000. ED: WHEN I WAS A KID I HAD MCAFEE ON MY PERSONAL COMPUTER. IN THIS DAY AND AGE -- SORRY FOR THIS WASHY STATEMENT -- WHAT IS THE BUSINESS MODEL FOR YOU GUYS IN TRYING TO FIGHT DEEPFAKES IN AN ELECTION CYCLE? STEVE: MCAFEE IS COMMITTED TO KEEPING CONSUMERS SAFE FROM DIGITAL THREATS AND THAT MEANS ALL SORTS OF DIGITAL THREATS. THE CLASSIC DIGITAL THREATS WITH MALWARE, DANGEROUS WEBSITES, WE ARE STILL HEAVILY INVESTED IN THAT AND THAT IS A BIG PART OF OUR BUSINESS BUT WE KNOW KEEPING CONSUMERS SAFE IS MUCH MORE. PROTECTING CONSUMERS FROM DISINFORMATION, SCAMS, HELPING THEM PROTECT THEIR IDENTITY AND ALL OF THE THINGS THAT WILL BE THE FORWARD-LOOKING CHALLENGES FOR CONSUMERS IN 2024 AND BEYOND. CAROLINE: STEVE GROBMAN, GREAT TO SPEAK WITH YOU. CTO OF MCAFEE.
DELL GETTING A BOOST FROM ITS AI SERVERS. WE WILL UNPACK THE RESULTS NEXT. ED: DELL DELIVERING BETTER-THAN-EXPECTED EARNINGS. SECOND QUARTER REVENUE JUMPING 9% DUE TO AN INCREASE IN SALES OF SERVERS THAT HANDLE AI WORKLOADS.
IT IS THE AI OPTIMIZE SERVER. WHAT I'M TRYING TO UNDERSTAND WITH DELL, IS THIS BECAUSE THEY ARE AN ESSENTIAL COG OR IS THERE A VALUE ADD THAT THEY BRING? >> THERE IS A VALUE ADD THAT DELL OFFERS THAT OTHERS HAVE A TOUGH TIME DOING. IF YOU THINK ABOUT HOW SOME OF THESE ARE BUILDING UP, THEY ARE BUILDING UP CLUSTERS OF AI SERVERS.
WERE NOT TALKING ABOUT ONE PARTICULAR SERVER BUT HUNDREDS OF SERVERS. CASE IN POINT, THEY DID $3.1 BILLION IN AI SERVER SALES. THERE IS ONLY ONE OTHER COMPANY I KNOW OF THAT EXCEEDED THAT. CAROLINE: SUPERMICRO HAS SOME ISSUES AT THE MOMENT.
I AM INTERESTED IN THE PROFITABILITY OF THIS. REVENUE GOES HIGH AND THEY ARE SELLING EXPENSIVE EQUIPMENT BUT HOW MUCH ARE THEY GETTING IN RETURN? >> THAT IS A FANTASTIC QUESTION. THERE WAS CONCERN ABOUT THE MARGIN PROFILE OF AI SERVERS. I WANT TO DISPEL THE MYTH IT IS A ZERO MARGIN BUSINESS. IT IS A LOW-MARGIN BUSINESS. IT IS PROBABLY IN THE SINGLE DIGITS.
IF WE SAW THE ISG MARGIN, THAT IMPROVES SEQUENTIALLY. PART OF IT IS THE CUSTOMER BASE. THERE WAS SOME PRUDENCE IN TERMS OF DEALMAKING FOR DELL. CAROLINE: WE WILL KEEP AN EYE ON DELL RISING AFTER WHAT HAS BEEN A REVENUE JUMP OF PROFITABILITY'S. WE THANK YOU SO MUCH.
THAT IS THE END OF THIS EDITION OF "BLOOMBERG TECHNOLOGY." WHAT A WEEK. WHAT A POWERFUL SET OF INTERVIEWS YOU HAVE DONE. ED: I HAVE A QUESTION STILL WHETHER HE NEEDS MICHAEL DELL MORE THAN THE OTHER WAY. WE WILL CONTINUE TO LOOK INTO THAT. ASTONISHING ACROSS THE WORLD OF
TECHNOLOGY. RECAP TODAY ON THE PODCAST ON THE BLOOMBERG TERMINAL AND ONLINE AT APPLE, SPOTIFY AND I HEART. THANK YOU TO THE TEAM IN NEW YORK. WHAT A WEEK.
2024-08-31 20:08
