Nvidia Shares Fall, California AI Bill Advances | Bloomberg Technology
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, THIS IS BLOOMBERG TECHNOLOGY. NVIDIA PAYS THE PRICE OF LOFTY EXPECTATIONS. CEO JENSEN HUANG TRIES TO BOOST CONFIDENCE. ED: THE TELEGRAM CEO IS CHARGED AND NOW ON BAIL IN FRANCE OVER CRIMES COMMITTED ON THE AFT. WE GO LIVE TO PARIS. CAROLINE:
A CONTROVERSIAL AI SAFETY BILL THAT HEADS TO THE CALIFORNIA STATE SENATE. THAT AND MORE, BUT FIRST WE CHECK IN ON THE KEY NAME WE ARE ALL WATCHING TODAY -- NVIDIA. THE $3 TRILLION COMPANY NOT LIVING UP TO THE HYPE IN TERMS OF FORECASTS. IT IS NOT DRAGGING DOWN THE REST OF THE INDEXES. ED: MARKET UP, NVIDIA DOWN. I CAUGHT UP WITH CEO JENSEN
WONG -- -- HUANG AFTER THE RESULTS. JENSEN: WE ARE EXPECTING MORE SUPPLY THROUGH Q1. I THINK OUR SUPPLY CONDITION GOING INTO NEXT YEAR WILL BE A LARGE IMPROVEMENT OVER THIS LAST YEAR. ED: A REPORTER FROM BLOOMBERG INTELLIGENCE JOINS US NOW IN SAN FRANCISCO. YOU SAID IT. NVIDIA -- STRONG.
EXPECTATIONS -- STRONGER. WHAT IS YOUR THESIS THIS MORNING? >> THEY SET UNREALISTIC EXPECTATIONS. WHEN WE LOOK AT THE TOP CONCERNS GOING INTO THE SPRING, WHEN THE SEVERAL MILLION FOOT PRESSURE ON DEMAND SUSTAINABILITY -- ED: 7 MILLION DOES NOT MEAN ANYTHING? >> IT IS STILL IMPRESSIVE THEY WERE ABLE TO PULL IT OFF. DEMAND SUSTAINABILITY, WE SAW DEMAND BROADENING AND GETTING STRONGER. FINALLY, WE PUT IT ALL TOGETHER.
OUR ESTIMATES, AND MOST OF THE SCREEN ESTIMATES, ARE GOING UP. CAROLINE: CONCERNED THAT IT IS A VICTIM OF ITS OWN SUCCESS AND ANALYST INVESTORS' EXUBERANCE, BUT IS IT ALSO A VICTIM OF ITS OWN AMBITIONS? IT SET ITSELF TERMS OF TIME THAT JUST ARE NOT ABLE TO BE HIT. WE SEE THAT PEOPLE ARE DISAPPOINTED BY A Q4 AND LATER RAMP-UP, FISCALLY.
>> DEFINITELY. THE EXECUTION -- IT HAS BEEN NOTHING BUT PHENOMENAL. IT IS VERY HARD TO CONTINUE WITH THE NEW CHIP DESIGNS. IT IS DEFINITELY A HIGH BAR THEY HAVE SET. ED:
THERE WAS A QUESTION ON THE ANALYST CALL WHICH I ALSO TRIED TO GET TO JENSEN HUANG ABOUT GENERATIONAL UPGRADES. RIGHT, H 200 IS IN THE REAL WORLD. IF YOU ARE A DATA CENTER OPERATOR, YOU HAVE THE OPTION OF BOTH POTENTIALLY AT THE SAME TIME. HOW DO YOU MODEL FOR THAT? >> EACH DATA CENTER OPERATOR
HAS A DIFFERENT TECHNOLOGY STACK AND A DIFFERENT PHASE IN THE JOURNEY, SO THERE HAS BEEN PENT-UP DEMAND. RIGHT NOW, THIS IS GEARED TOWARD NEW ENTERPRISES. BLACKWELL IS NOT REALLY FOR ANYONE. YOU REALLY NEED SIGNIFICANT ROI, SIGNIFICANT INVESTMENT. CAROLINE: WHAT ABOUT GEOGRAPHICAL REACH HERE? WERE YOU WORRIED ABOUT ALL OF THAT? >> THIS IS THE LAST TIME WE SAW THE U.S. DECLINE. WHEN WE LOOK AT THE REST OF THE WORLD, THE GROWTH THAT HAS BEEN SIGNIFICANTLY FASTER LEADS TO THAT LOW DOUBLE-DIGIT MILLION DOLLARS. CAROLINE:
IT HAS BEEN A BUSY 24 HOURS FOR YOU. WE APPRECIATE YOU. MEANWHILE, LET'S GET A BROADER MARKET REACTION. CHIEF MARKET STRATEGIST -- WHO WOULD HAVE THOUGHT IT, WITH NVIDIA SO IMPORTANT TO THE S&P, TO THE NASDAQ? AND MARKS ARE HIGHER EVEN THOUGH THE NAME IS DOWN.
>> BEGINNING OF THE WEEK, WE KIND OF SAID, MOVE OVER. HERE COMES JENSEN HUANG. YOU ARE SEEING THE MARKETS NOT REALLY REACT TO NVIDIA EARNINGS LAST NIGHT. THEY THINK IT IS BECAUSE EARNINGS WERE POSITIVE. THE WOW FACTOR IS STARTING TO COME DOWN BECAUSE THE RATES ARE GETTING HIGHER. IT IS GETTING HARDER TO ACHIEVE THAT.
OVERALL, THE DELIVERY OF PROFITS BY NVIDIA WERE SOLID, SO I THINK THE MARKET IS STARTING TO LOOK FORWARD AND SAY EVERYTHING IS OK WITH BIG TECH. WE ARE GOING TO MOVE OVER THE NEXT COUPLE OF QUARTERS. THERE IS GOING TO BE A CONCERN COMING HERE OVER THE NEXT FEW WEEKS AS WE GET RATE CUTS FROM THE FED LATER NEXT MONTH.
BUT I THINK THE STORY IN BIG TECH IS LESS HOMOGENOUS TRADING, A LITTLE BIT MORE FOCUS ON WHERE IS THE PAYOFF FOR AI, WHAT IS THE SUPPLY AND DEMAND BILL FOR COMPANIES LIKE NVIDIA, MOVING FORWARD, AND I THINK IT WILL LIKELY PROVIDE OPPORTUNITIES WHERE WE WILL GET SOME OF THESE PULLBACKS FOR INVESTORS TO REINVEST AND MAYBE LOOK AT STOCKS THAT GOT AWAY FROM EARLIER THIS YEAR. CAROLINE: WOULD YOU SAY THAT NVIDIA -- I DON'T WANT TO GO INTO INDIVIDUAL NAMES. TODAY APPLE, MICROSOFT, AMAZON, META, GOOGLE, TESLA ARE THE TOP PERFORMERS IN TERMS OF THE S&P 500. SHOULD YOU BE WRAPPING UP TECHNOLOGY WITH YOU ASIANS AT THESE LEVELS? -- WITH VALUATIONS AT THESE LEVELS? >> THE WEIGHT IS 30%, 40% OF THE S&P 500.
I DON'T THINK YOU NEED TO GET OVER YOUR SKIS AROUND EXTENDING IN THESE AREAS. WHEN WE SEE THESE PULLBACKS IN THESE BIG TECH LEADERS, THIS IS THE TIME TO START LOOKING AT THEM, AT LEAST IF YOU HAVE UNDER WEIGHTED THE AREA. OUR VIEW IS THAT THERE IS A BROADER GROUP OF STOCKS THAT ARE MORE ATTRACTIVE. EXPECTATIONS GROUPS ARE MOVING HIGHER.
THE GDP GREW BY 3% IN THE SECOND QUARTER. THE FED IS LIKELY TO START THEIR MOVES TO LOWER RATES OVER THE NEXT FEW MONTHS, FEW QUARTERS. SO THE OUTLOOK FOR THE REST OF THE 493 STOCKS THAT ARE NOT THE MAGNIFICENT SEVEN ARE STARTING TO LOOK MORE ATTRACTIVE. THAT IS WHAT WE ARE SEEING THIS MONTH. CONSUMER STAPLES, HEALTH CARE, UTILITIES -- THEY ARE OFF THE CHARTS FOR AUGUST. IT MIGHT BE BECAUSE SEPTEMBER IS A PRETTY POOR MONTH. ED: THAT IS A PRETTY SWEET
BLOOMBERG TERMINAL CHART OVER YOUR LEFT SHOULDER. WHAT IS THAT? THAT IS NVIDIA QUARTERLY REVENUES? >> THAT IS RIGHT. AND THE CHART, IF YOU CAN SEE IT IN THE BACK, IT SHOWS THE ACTUALS AND THE ESTIMATES STARTING TO GET CLOSER. THINK THAT IS WHY YOU ARE SEEING NVIDIA START MOVING HIGHER EVEN THOUGH THEY HAD GREAT RESULTS. ED: BEAR WITH ME. I HAVE A CHART OF MY OWN. THIS IS THE BEAT IN THE QUARTER RELATIVE TO EXPECTATIONS. IT WAS A 4% BEAT AGAINST CONSENSUS, UPSIDE SURPRISE.
HAVE YOU EVER EXPERIENCED A QUARTER LIKE THIS, WHERE EVERYONE HAS LOST THEIR MINDS OVER A SINGLE NAME IN A WEEK WHERE WE HAD CENTRAL-BANK SPEAKERS LEFT, RIGHT, AND CENTER, AND MORE ECONOMIC DATA THAN WE CAN INTO OUR PROGRAM? -- CAN FIT INTO OUR PROGRAM? >> WE SAW A VOLATILITY SPIKE IN AUGUST. SOME OF THAT WAS THE JAPAN YEN CARRY TRADE. BUT THESE BIG TECH MAGNIFICENT NAMES -- NOT ONLY DO THEY HAVE TO SURPASS AND MEET THE PERFECTION STANDARDS THAT INVESTORS PUT ON IT, WHAT THEY NEED TO SURPASS THEM BY EVEN MORE. THAT IS GETTING HARDER. AS MY EARLIER COMMENT SAID, I THINK YOU ARE GOING TO SEE LESS HOMOGENOUS TRADING BETWEEN SOME OF THESE BIG TECH LEADERS, AND IT IS GOING TO COME DOWN TO FUNDAMENTALS AND REVENUE OUTLOOK. HOW MUCH ARE YOU BEATING?
THOSE THINGS WILL PLAY A MORE DOMINANT ROLE IN MOVING SHARE PRICES AROUND. IN THE SAME BREATH, YOU HAVE A LOT OF STOCKS THAT HAVE NOT KEPT PACE WITH THESE BIG TECH COMPANIES THAT REMAIN ATTRACTIVE IN AN ENVIRONMENT WHERE WE ARE GROWING. IF THE FED IS CUTTING INTEREST RATES AND CAN ENGINEER THAT SOFT LANDING, THERE ARE SOFT SECTORS OF THE ECONOMY THAT ARE MORE ATTRACTIVE. ED: IN AGGREGATE, NVIDIA AND EVERYTHING ELSE YOU HAVE OUTLINED -- DO YOU BELIEVE THAT THIS INVESTMENT CYCLE AROUND AI IS INTACT AND CONTINUES? >> FROM YOUR INTERVIEW WITH JENSEN HUANG, I THINK IT IS CLEAR THE AI INFRASTRUCTURE BILL AND THE ARCHITECTURE AROUND THAT IS IN THE VERY EARLY INNINGS. SOME OF THESE COUNTRIES LIKE MICROSOFT, AMAZON, META, ALPHABET -- THEY GREW $60 BILLION ON AI INVESTMENT. THEY SAID THEY WERE CONNECTED TO THAT OVER THE NEXT SEVERAL QUARTERS. THE SOVEREIGN AI THAT NVIDIA
MENTIONED LAST NIGHT AS COUNTRY START TO BUILD THAT INFRASTRUCTURE -- THERE IS A LOT OF OPPORTUNITY STILL LEFT IN AI. HOWEVER, LIKE THE EARLY TO THOUSANDS, EXPECT -- LIKE EARLY 2000, EXPECTATIONS GET HIGH AND MAYBE NEED TO RESET. I THINK WE ARE STARTING TO SEE THAT WITH BIG TECH AND THE AI THING. >> -- ED: YOU ARE THE CHIEF MARKET STRATEGIST AT AMERIPRISE FINANCIAL. COMING UP, A CONVERSATION WITH THE CEO OF A FIRM. CAROLINE: AFFIRM IS UP. CROWDSTRIKE UP AS WELL, MORE THAN 5%.
SALES TOPPED ANALYST ESTIMATES. WE WERE ALL WORRIED ABOUT THE GLOBAL I.T. OUTAGE BACK IN JULY. IT DOES NOT SEEM TO HAVE AN IMMEDIATE BAD RESULT. WE ARE CURRENTLY HIGHER. ♪ ED: AFFIRM DELIVERING BETTER-THAN-EXPECTED EARNINGS, SENDING SHARES UPWARD. THE REVENUE FORECAST BOTH COMING IN AHEAD OF ESTIMATES. THE CEO SAYING THE COMPANY HAD "A KILLER QUARTER." MAX JOINS US NOW IN SAN
FRANCISCO. I HAVE SPENT ENOUGH TIME WITH YOU TO KNOW THAT WHEN YOU SAY SOMETHING LIKE THAT, YOU MEAN IT. I WOULD NOT SAY THAT YOU ARE PRONE TO SUPERLATIVES LIKE THAT. WHY? WHY A KILLER QUARTER? MAX: NUMBERS SPEAK FOR THEMSELVES. ED: GO BEYOND THAT. COME ON. TELL ME THE STORY OF WHAT IS
HAPPENING ON YOUR PLATFORM AND IN YOUR USER BASE. MAX: I THINK THERE IS REAL MOMENTUM. YOU CAN TELL BY LOOKING AT OUR METRICS AND THE QUALITATIVE MEASURES THAT WE TAKE, AND JUST THE FACT THAT WE HAVE OUTPERFORMED THE CREDIT CARD INDUSTRY, WHICH IS OUR DIRECT COMPETITOR, IN TERMS OF MANAGING CREDIT, AND THE SHEER NUMBER OF MERCHANT SIGNINGS, AND EVERY METRIC I COULD CAST MY EYE ON AND SAY THAT IS A REALLY GOOD QUARTER. SOMETIMES, YOU HAVE TO TAKE A BOW. ED: LET'S SAY THE BY NOW, PAY LATER SPACE IS MORE COMPETITIVE SINCE LAST YEAR ON THE PROGRAM. AT THAT TIME, CAROLINE AND I SPOKE WITH A CEO THAT SEEMED VERY OPTIMISTIC ABOUT THE UNITED STATES.
YOU CONTINUE TO GROW. I DON'T HAVE DATA FOR MARKET SHARE, COULD YOU JUST CONTEXTUALIZE YOUR PERFORMANCE IN THAT SENSE? MAX: I THINK WE ARE OUTPACING THEM RELATIVELY WELL IN TERMS OF HER GROWTH, ACCORDING TO THE NUMBERS. NOT THAT I AM TOO COMPETITIVE. I AM VERY COMPETITIVE. LET'S BE HONEST. BUT THE REALITY IS IT IS A GIANT MARKET AND ALL OF US TOGETHER ADD UP TO LESS THAN 10% OF E-COMMERCE AND ARE NOW LOOKING AT OFFLINE. THE REAL SHIFT IS HAPPENING AGAINST CASH, AGAINST CREDIT CARDS, AGAINST DEBIT CARDS. JUST AN INCREDIBLE AMOUNT OF ROAD AVAILABLE TO ALL OF US, AND A IN PARTICULAR.
-- AFFIRM IN PARTICULAR. CAROLINE: WHAT DOES THAT MEAN IN THE MACRO CONTEXT? HOW CONFIDENT ARE YOU OF THE U.S. CONSUMER, THE GLOBAL CONSUMER? MAX: WE ARE ABOUT TO LAUNCH IN THE U.K., SO WE WILL FIND OUT HOW CONFIDENT WE SHOULD BE. LOOK AT OUR INVESTOR SUPPLEMENT. CREDIT CARD COMPANIES HAVE BUILT UP THEIR DELINQUENCIES AND OURS REMAIN FIRMLY IN CONTROL. OUR CONSUMER IS SHOPPING AND PAYING BACK, WHICH IS IMPORTANT FOR A CREDIT BUSINESS. SO FAR, WE DID NOT SEE A MAJOR
SLOWDOWN. WE DID NOT SEE SIGNIFICANT PULLBACK IN DEMAND. THERE WAS A LOCK -- A LOSS OF INTEREST IN ELECTRONICS. IT CAME BACK ROARING. PEOPLE GOT THERE POST-COVID FIX.
ALL IN ALL, CONSUMER IS EFFECTIVELY SHOPPING AND PAYING BACK AND I DO NOT SEE PROBLEMS. CAROLINE: THE MARKET IN PARTICULAR LIKES THE FOCUS ON PROFITABILITY. KARMA DID POST A PROFIT EVEN THOUGH THEY ARE STILL A PRIVATE COMPANY. AND THEY ARE CUTTING COSTS BY LEANING INTO AI. IS THAT SOMETHING YOU LEAN INTO AND FEEL YOU HAVE TO COMPETE INTO? MAX: THE GOOD NEWS IS THAT WE HAVE BEEN IN THE AI BUSINESS SINCE INCEPTION. 100% OF OUR LOANS ARE UNDERWRITTEN ENTIRELY BY MACHINES. WE HAVE BEEN ON THE MACHINE
LEARNING SINCE DAY ZERO. WE DO NOT THINK OF IT AS A WAY TO REPLACE HUMANS OR GET RID OF HUMANS. THINK OF IT AS A GREAT TOOL FOR INCREASING PRODUCTIVITY TO GIVE US AN EDGE IN UNDERWRITING AND CUSTOMER SERVICE.
WE ARE VERY ACTIVE IN AI, THAT THERE ARE LOTS OF FUN THINGS HAPPENING, VISIBLE AND NOT, AND IT IS A HUGE PART OF WHAT WE DO. IN TERMS OF BUFFET ABILITY, I LEFT IT OUT ON THE EARNINGS CALL AND WANT TO MAKE SURE I REPEAT THIS WAS NOT A CONTORTIONIST THING WHERE WE SAID PROFITABILITY IS ON THE HORIZON. IT IS PART OF THE PLAN. IT HAS ALWAYS BEEN PART OF THE PLAN. IT IS NO CLOSE ENOUGH WHERE I CAN SAY WE ARE GOING TO BECOME PROFITABLE. WE ARE GOING TO DO MORE.
ED: I AM AND AFFIRM CUSTOMER. I USED IT TO FINANCE A CLICK ON. THE EMPHASIS ON POINT OF SALE -- -- IT IS KIND OF A WEIRD TRANSACTION. YOU ARE PRESENTED WITH THE OPTION ALMOST STRAIGHT AWAY. DO YOU NEGOTIATE THAT AGGRESSIVELY, FOR THOSE BIGGER TICKET ITEMS? MAX: I'M NOT SURE INDIVIDUAL DEALS ARE WORTH COMMENTING ON, BUT EVERY DEAL WHERE WE ARE REPRESENTED AT THE POINT OF SALE AND EVERY DEAL WHERE YOU SEE A FUNNEL BEFORE YOU GET TO THE CHECKOUT -- THOSE ARE DIRECTLY INTEGRATED. WE GO TO THE MERCHANT.
WE SPEND A LOT OF TIME MAKING SURE WE ARE AS HELPFUL AS POSSIBLE TO THEIR ABILITY TO SELL A PELOTON TREAD OR A MATTRESS OR ANYTHING IN BETWEEN. THAT GIVES US A HUGE ADVANTAGE. THE CONSUMER HAS THE CLARITY OF WHAT IT MIGHT COST THEM TO BUY MONEY -- TO BORROW MONEY. ED: THERE IS A STORY ON BLOOMBERG LAW ABOUT A FIRM FACING A CLASS-ACTION SUIT AFTER THE BANK RIDGE SITUATION. MAX: PROBABLY A BAD IDEA TO COMMENT ON ONGOING OR POTENTIAL FUTURE THAT OCCASION, SO I'M NOT SURE I HAVE ANYTHING TO SAY ON THAT. I SAID IT THE DAY OF THE NEWS -- THAT THE AFFIRM CARD NUMBERS, WE WOULD NOT NEED TO ROTATE THEM AND GIVE NEW CARDS.
NO NUMBERS HAVE LEAKED. IF YOU HAVE YOUR CARD, PLEASE CONTINUE USING IT. CAROLINE: GREAT TO HAVE YOU ON THE SHOW. WE APPRECIATE IT. MEANWHILE, THE TELEPHONE CEO -- THE TELL GRAHAM CEO ACCUSED IN FRANCE OF BEING COMPLICIT IN MESSAGING. YOU ARE WATCHING A COUPLE OF STOCKS. ED: IT WAS SQUEEZED IN AMONG THE CHAOS OF LAST NIGHT.
YELP AND GOOGLE -- YELP HAS FILED A LOCAL SEARCH MONOPOLIZATION SUIT AGAINST GOOGLE. ALPHABETIC, FOLLOWING OTHER LITIGATION AND COURT RULINGS. I DON'T THINK IT IS HAVING IMPACT ON EITHER STOCK. IF YOU MISSED IT, GO TO BLOOMBERG TECHNOLOGY AND CHECK IT OUT. ED: TELEGRAM CEO PAOLO GERARD OF WAS CHARGED IN FRANCE -- HELLO - - PAVEL DUROV WAS CHARGED IN FRANCE FOR THE WAY THE PLATFORM WAS USED, IN SEXUAL IMAGES OF CHILDREN. I'M GOING TO GO TO THE DETAILS WITH OUR PARENT -- PARIS BUREAU CHIEF. OUR UNDERSTANDING IS DUROV'S
OUT ON SIGNIFICANT BAIL AND THERE IS A PROCESS TO COME. >> THERE IS. HE IS OUT OF -- A HOLDING CELL IS THE WAY THEY DO IT IN FRANCE, THAT FOUR-DAY INTERROGATION HE HAD BEFORE BEING PRESENTED TO THE JUDGE. HE HAD TO POST A 5 MILLION EURO BOND, ABOUT $5.5 MILLION. IT IS A LOT OF MONEY.
HE IS QUITE A WEALTHY FELLOW, SO HE CAN AFFORD IT. FROM HERE ON OUT, ACCORDING TO THE INITIAL RULING, HE HAS TO CHECK IN TWICE A WEEK WITH AUTHORITIES TO MAKE SURE HE IS STILL IN FRANCE, AND HE IS NOT ALLOWED TO LEAVE THE COUNTRY. IT NOW GOES TO AN INVESTIGATION, AND THE MAGISTRATE WILL LOOK INTO THE CASE. THAT COULD TAKE MONTHS, A YEAR, LONGER. IT IS UNCLEAR HOW LONG THE REST OF THE PROCESS WILL TAKE BEYOND THAT. CAROLINE:
AND THE CASE IS THAT DUROV AND TELEGRAM, WHICH HE IS CEO OF, IN NO WAY HELPED WHEN IT COMES TO INVESTIGATIONS. THEY REFUSE TO RUN LEGAL WIRETAPS ON SUSPECTS, PARTICULARLY WHEN IT COMES TO ORGANIZED CRIMINALS AND SEXUAL EXPLICATION OF CHILDREN. IS THAT REALLY WHAT IS AT HEART HERE, THE FACT THAT HE DOES NOT WANT TO TAKE ANY ACTION AS A LEADER OF A SOCIAL MEDIA PLATFORM? >> WELL, YES. THE ACTION YOU ARE TALKING ABOUT IS HE DOES NOT -- HE DELIBERATELY, ACCORDING TO FRENCH OFFICIALS, DELIBERATELY DID NOT RESPOND TO OR REPLY TO WHAT THEY CALL LEGITIMATE REQUESTS FOR HELP IN INVESTIGATIONS THEY WERE RUNNING WITH CRIMINAL ACTIVITIES THEY SAW ON THE TELEGRAM NETWORK. THAT IS DIFFERENT THAN THE WAY MOST OTHER MESSAGING SERVICES OPERATE. THAT IS REALLY WHY THEY ISSUED THE ARREST WARRANT FOR HIM IN THE FIRST PLACE.
THE PROSECUTOR SAID THAT WAS WHAT WAS PARTICULAR ABOUT TELEGRAM AS A PLATFORM, AND NOT JUST IN FRANCE. SHE SPECIFICALLY MENTIONED BELGIUM AS WELL IS HAVING THE SAME ISSUES WITH TELEGRAM. CAROLINE: A COMPLETE LACK OF RESPONSE. THAT IS HOW THE PARIS
PROSECUTOR PUT IT. ALAN KATZ, THANK YOU. ED: IT IS TIME FOR TALKING TECH. THE NETHERLANDS PLANNING TO RESTRICT ASML'S ABILITY TO REPAIR AND MAINTAIN ITS SEMICONDUCTOR EQUIPMENT IN CHINA, ACCORDING TO SOURCES. THE DECISION COMING AFTER PRESSURE FROM THE U.S.. THE DUTCH GOVERNMENT WOULD NOT RELY -- RENEW LICENSES FOR LITHOGRAPHY MACHINES. HUAWEI'S REVENUE GREW FOR THE
SIXTH STRAIGHT QUARTER AFTER SMARTPHONES GAINED MARKET SHARE IN CHINA AT APPLE'S EXPENSE. IT AND OTHER LOCAL PLAYERS BUILT OUT APPLE, WHICH DROPPED TO SIXTH PLACE AMONG HANDSET MAKERS IN CHINA. CAROLINE: COMING UP, MORE OF OUR EXCLUSIVE CONVERSATION WITH NVIDIA CEO JENSEN HUANG. SHARES UNDER PRESSURE. THEY CONTINUE TO FOCUS ON THE BLACKWELL CONFIDENCE OR LACK THEREOF. WE WILL HAVE MORE ON "BLOOMBERG
TECHNOLOGY." ♪ >> WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I’M CAROLINE HYDE IN NEW YORK. ED: I’M I’M ED LUDLOW IN SAN FRANCISCO. CAROLINE: WE’VE HAD SO MUCH ANXIETY AROUND THIS ONE NAME, ALL AROUND NVIDIA. THE FACT THAT IT WAS THE MOST CRUCIAL THAT IT HAD EVER BEEN TO THE MARKET, 8% WEIGHTING IN THE NASDAQ, 6% WEIGHTING IN THE S&P. THAT WOULD MEAN EARNINGS WOULD
DICTATE THAT BENCH MARK. NOT SO. CURRENTLY UP 1.1% IN THE NASDAQ 100, DESPITE THE 14% WEIGHTING IN THE STOXX, WE’RE UP 1.4%. AND IT IS LOWER BY 3.6%. THE REASON IT’S LOWER IS WHAT YOU POURED OVER YESTERDAY, THE FACT THAT, YES, IT STILL BEAT IN ITS QUARTER THAT WAS JUST ANNOUNCED, AND THE FACT THAT THE FORECAST LOOKED PRETTY DECENT, BUT IT WAS SOME OF THE ISSUES WITH BLACK WELL IN PARTICULAR THAT CAUSED UNIS NOT.
YOU SPOKE TO THE C.E.O. JUST ABOUT THAT. ED: I DID. I DID SPEAK WITH THE NVIDIA C.E.O. FOLLOWING WHAT WAS KIND OF SEEN AS A DISAPPOINTING EARNINGS REPORT. SO BIZARRE TO SAY THAT OUT LOUD.
HE LAID OUT HIS AND THE COMPANY’S EXPECTATIONS FOR NEXT YEAR SURROUNDING PRODUCTION. LISTEN TO THIS. >> WE MADE A MASS CHANGE TO IMPROVE THE YIELD, FUNCTIONALITY OF BLACKWELL IS WONDERFUL. WE’RE SAMPLING BLACKWELL ALL OVER THE WORLD TODAY.
WE SHOW PEOPLE GIVING TOURS TO PEOPLE. YOU CAN FIND PICTURES OF BLACKWELL SYSTEMS ALL OVER THE WEB. WE HAVE STARTED VOLUME PRODUCTION. VOLUME PRODUCTION WILL SHIFT IN
Q4. Q4 WE WILL HAVE BILLIONS OF DOLLARS OF BLACKWELL REVENUES. WE WILL RAMP FROM THERE. WE WILL RAMP FROM THERE. THE DEMAND FOR BLACKWELL FAR EXCEEDS ITS SUPPLY, OF COURSE, IN THE BEGINNING BECAUSE THE DEMAND IS SO GREAT. BUT WE’RE GOING TO HAVE LOTS AND LOTS OF SUPPLY, AND WE WILL BE ABLE TO RAMP STARTING IN Q4. WE HAVE BILL I DON’T UNDERSTAND
OF DOLLARS OF REVENUES, AND WE’LL RAMP FROM THERE INTO Q1, INTO Q2, AND THROUGH NEXT YEAR. WE’RE GOING TO HAVE A GREAT NEXT YEAR AS WELL. ED: WHAT IS THE DEMAND FOR ACCELERATED COMPUTING BEYOND THE HYPER SCALERS AND META? >> HYPER SCALERS REPRESENT ABOUT 45% OF OUR TOTAL DATA CENTER BUSINESS. WE’RE RELATIVELY DIVERSIFIED
TODAY. WE HAVE HYPER SCALERS. WE HAVE INTERNET SERVICE PROVIDERS. WE HAVE SOVEREIGN A.I.’S. WE HAVE INDUSTRIES. ENTERPRISES. SO IT’S FAIRLY DIVERSIFIED. OUTSIDE OF HYPER SCALERS, AS THE OTHER 55%, THE APPLICATION USE ACROSS ALL OF THAT DATA CENTER STARTS WITH ACCELERATED COMPUTING. ACCELERATED COMPUTING DOES EVERYTHING FROM, WELL, THE MODELS, THE THINGS THAT WE KNOW ABOUT, WHICH IS GENERATIVE A.I., AND THAT GETS MOST OF THE ATTENTION.
BUT AT CORE, WE ALSO DO DATABASE PROCESSING, PRE AND POST-PROCESSING OF DATA BEFORE YOU USE IT FOR GENERATIVE A.I., TRANS CODING, SCIENTIFIC SIMULATIONS, COMPUTER GRAPHICS OF COURSE, IMAGE PROCESSING OF COURSE, AND SO THERE’S TONS OF APPLICATIONS THAT PEOPLE USE OUR ACCELERATED COMPUTING FOR, AND ONE OF THEM IS GENERATIVE A.I. ED: THAT WAS THE NVIDIA C.E.O. SPEAKING WITH ME LAST NIGHT. CAROLINE, YEAH, BODY LANGUAGE, WHAT HE’S WEARING, THERE’S A LOT TO TALK ABOUT. CAROLINE:
NO LEATHER, ED. NO LEATHER. HE WORE A BOMBER JACKET. BUT LOOK, THERE WAS A LOT OF DEEP DIVING ON THE NUMBERS IN PARTICULAR. LET’S GET SOME OF THAT REACTION FROM OUR GUESTS ON BLOOMBERG TV. >> I’M NOT CONCERNED. I THINK IF YOU LOOK AT NVIDIA THEY STILL CONTROL THIS MARKET AND WILL CONTINUE TO, I WOULD SAY, DOMINATE THIS SPACE OVER THE NEXT THREE TO FIVE YEARS. >> DELIVERING CHIPS AT THIS RATE, AT THIS SCALE, IS FANTASTIC AND UNPRECEDENTED. I DON’T THINK THERE’S MUCH OF A REVENUE ISSUE HERE, OF A GROWTH ISSUE HERE.
I THINK A LITTLE BIT OF A PUSHBACK IS PROBABLY MORE AROUND THE MARGIN SITUATION. >> THAT TYPE OF GROWTH ISN’T NECESSARILY REALISTIC OR SUSTAINABLE IN THE LONG TERM. TWO, IT’S NOT NECESSARY IN THE LONG TERM EITHER. AT THE END OF THE DAY, WE STILL SENSE ENORMOUS AND URGENT DEMAND AND THAT’S TO MITIGATE SHIPMENT, AS CUSTOMERS WAIT FOR THE NEXT GENERATION OF CHIPS TO BE AVAILABLE IN VOLUMES. CAROLINE: NOT ENOUGH. WE NEED MORE REACTION. THE SENIOR PORTFOLIO MANAGER
JOINING US NOW. THE MARKET THINKING IT’S A DISAPPOINTMENT. DID YOU THINK IT WAS A DISAPPOINTMENT? >> HI, CAROLINE. YOU KNOW, I WAS NOT DISAPPOINTED WITH THE ACTUAL NUMBERS HERE.
I THINK EXPECTATIONS WERE VERY HIGH GOING INTO THIS PARTICULAR PRINT. AND ESPECIALLY WHEN YOU’RE HEARING THINGS LIKE EVENTS IN NEW YORK, IN WHICH BARS ARE BEING RENTED OUT TO SEE WHAT THE EARNINGS REPORT WAS GOING TO BE -- CAROLINE: WERE YOU IN ONE? >> I WAS NOT IN ONE. I WAS AT MY DESK, LOOKING AT THE NUMBERS. CAROLINE: I SAW OUR BLOOMBERG REPORTER WAS INDEED OUT THERE IN THE BARS.
BUT I’M INTERESTED, EVEN THOUGH YOU DID SEE SOME OVERALL DISAPPOINTMENT IN VERY HIGH EXPECTATIONS, WAS THERE ANY CAUSE FOR CONCERN? DO YOU THINK, IN ANSWER TO OUR PREVIOUS QUEST, THAT THE A.I. TRAIN IS INTACT? >> THE A.I. TRAIN IS INTACT. I THINK WE HAVE TO PUT THIS IN THE LONGER TERM CONTEXT. NVIDIA WAS GENERATING REVENUES OF ABOUT $27 BILLION ABOUT TWO YEARS AGO.
THEY’RE ON PACE TO GENERATE REVENUES OF OVER $125 BILLION THIS YEAR. THAT’S JUST ENORMOUS. IS THAT GROWTH RATE SUSTAINABLE? CLEARLY IT’S NOT. BUT THEY’RE CONTINUING TO GROW, AND THE EXPECTATIONS ARE FOR GROWTH OF OVER 40% IN REVENUES FOR NEXT YEAR. BLACKWELL IS JUST GOING TO BE ANOTHER STEP UP IN ALLOWING THAT TO HAPPEN. ED: YOUR GROUP HAS 7.8 MILLION SHARES, $1 BILLION WORTH OF STOCK. I KNOW YOU WERE PART OF OUR
WATCH PARTY LAST NIGHT, WATCHING THE INTERVIEW. YOU LEAD RESEARCH, RIGHT? YOU USE YOUR EXPERTISE TO TRY TO WORK OUT WHAT’S GOING ON. WHAT DID YOU WORK OUT DURING THE COURSE OF THAT CONVERSATION? >> YOU KNOW, I THINK THIS IS A LONG GAME. I THINK WE’RE STILL IN THE EARLY INNINGS OF A.I. DEPLOYMENT. THE HYPER SCALERS, META, THERE’S SO MUCH USE FROM ALL OF THESE, IT IS STAKES FOR THESE LARGE CLOUD PROVIDERS. THEY’RE SAYING PRODUCTIVITY GAINS FROM THE USE OF A.I.
SO I THINK THAT’S GOING TO CONTINUE. IT’S GOING TO PROLIFERATE. IT IS GOING TO TAKE TIME, BUT, YOU KNOW, THE INTERNET TOOK TIME AS WELL. 20 YEARS LATER, IT’S STILL EVOLVING. ED: WERE YOU CONVINCED BY WHAT JENSEN JUST SAID, WE PLAYED IN THAT CLIP JUST THEN, THEIR BUSINESS HAS BROADEN THE OUT BEYOND THE HYPER SCALERS? >> YES, I MEAN, THEY MENTIONED ABOUT SOVEREIGN ENTITIES, PURCHASING, BEING THE LOW DOUBLE-DIGIT BILLIONS OF DOLLARS IN TERMS OF REVENUE. THAT WAS EXCITING TO SEE. HYPER SCALERS, 55% IS OTHER REVENUES. SO THAT IS A NICE
DIVERSIFICATION AS WELL. BUT THAT CONSISTENCY FROM THE HYPER SPACE SCALERS IS LIKELY TO CONTINUE. IT’S JUST GOING TO BE CHOPPY YEAR TO YEAR. MANY OF THESE COMPANIES, APPLE, MICROSOFT, AMAZON, GOOGLE, THEY’RE ALL GOING TO BE EVALUATING THEIR CAP EX BUDGET FOR NEXT YEAR. EACH YEAR IS NOT GOING TO BE THE SAME. SO WE HAVE TO BE DILIGENT ABOUT
THAT, BUT FOR THE MOST PART, THEY WILL BE SPENDING IN ORDER TO GET THE PRODUCTIVITY ENHANCEMENT GOING FORWARD. CAROLINE: WHAT ABOUT COMPETITION? A LOT OF PEOPLE FEELING THAT IF THERE WAS JUST A SLIGHT BLIP IN ITS ANNUAL CADENCE OF INNOVATIVE, MAYBE A.M.D. CAN START TO WORK ITS WAY IN A LITTLE BIT MORE. DO YOU AGREE? >> I THINK FROM A HIGH EFFECTIVE, FROM THE CLOUD PROVIDERS, INTERNET SERVICE PROVIDERS, YOU ALWAYS WANT TO HAVE MORE THAN JUST ONE PROVIDER OF YOUR CHIPS. THERE IS ROOM FOR COMPETITION. I THINK THAT’S ALWAYS SOMETHING THAT WE HAVE TO KEEP IN MIND. LET’S NOT FORGET THAT INTEL HAD
THE MAJORITY OF DATA CENTER SHARES FOR MANY, MANY YEARS, AND HERE WE ARE WITH NVIDIA REALLY COMING OUT AND TAKING SHARE, A.M.D. AS WELL. COMPETITION IS ALWAYS SOMETHING THAT WE LOOK FOR AND WATCH OUT FOR. CAROLINE: CAUTIONARY CAL. WHAT’S INTERESTING IS YOU HAVE HOLDS ON TEXAS INSTRUMENTS, ON BROADCOM. WHAT MANY HAVE THOUGHT PERHAPS HASN’T MOVED AT THE PACE THAT WE’RE EXPECTING WAS THAT THESE HYPER SCALERS WOULD MAKE THEIR OWN CHIPS TO COMPETE IN QUITE THE SAME WAY USING A TEXAS INSTRUMENTS, USING CSMC, FOR EXAMPLE. I’M INTERESTED IF YOU SEE THAT REALLY COMING IN AS A COMPETITION.
>> YOU KNOW, IT’S TOUGH. THE DESIGN PART OF THOSE CHIPS IS WHERE NVIDIA HAS THE ADVANTAGE, ALONG WITH THE SOFTWARE ASSOCIATED WITH A.I. ALL THE CHIPS ARE BUILT OFF THAT, AND THAT REALLY PROVIDES THEM WITH THE BENEFIT THAT OTHER CHIP PROVIDERS AND CHIP MANUFACTURERS JUST DON’T HAVE.
ED: AYAKO, CAN YOU DEFINE WHAT NVIDIA IS, WHAT IT ACTUALLY IS? >> YOU KNOW, NVIDIA IS A CHIPMAKER AT THE END OF THE DAY, RIGHT? BUT IT IS A CHIPMAKER, AND IT’S A PRIMARY BENEFICIARY FORAY A.I. AND HOW COMPUTE -- FOR ARTIFICIAL INTELLIGENCE AND HOW COMPUTE WILL GO GO FORWARD IN THE COMING DECADE. ED: I THINK JENSEN MIGHT DISAGREE WITH YOU AND SAY IT’S MORE THAN THAT. WE’LL GET ANOTHER STAB AT IT. AYAKO, SENIOR PORTFOLIO MANAGER
AT WEALTH GROUP, THANK YOU. ANOTHER STORY WE’VE BEEN WATCHING IS MEITUAN STOCK. THEY POSTED STRONG EARNINGS AND UNVEILED A $11 BILLION BUYBACK. IT’S A POSITIVE SIGNAL FOR INVESTORS WHO ARE INCREASINGLY WORRIED ABOUT DOMESTIC CONSUMER MALAISE IN CHINA. CAROLINE: COMING UP, WE’VE GOT MORE OF
OUR CONVERSATION ON THE A.I. ABOUT REGULATION. THE DIRECTOR OF STANFORD’S A.I. JOINS US. LET’S GET A QUICK CHECK ON A.I. IN ANOTHER AREA. META UP 1.6%. THEY HAVE AN ANNOUNCEMENT. A FOUNDATIONAL MODEL WAS DOWNLOADED, APPROACHING 350 MILLION TOTAL DOWNLOAD.
BASIC IT WILL SHOWS TRACTION, BLOOD VESSEL INTELLIGENCE SAYS, MAYBE SOME NEW LICENSING REVENUE STREAM IN THE HORIZON. THIS IS "BLOOMBERG TECHNOLOGY." ♪ THIS IS BLOOMBERG. ED: SOURCES TELLING BLOOMBERG OPEN A.I. IS GETTING CLOSER TO RAISING
FUNDING AT EVALUATION AT MORE THAN $100 BILLION IN AROUND. KIND OF KNEW ABOUT THIS BACK IN DECEMBER. YOU AND I REPORTED ABOUT THE IDEA OF LIKE A PRIMARY, MORE SECONDARY, PRETTY BIG NUMBER. MORE DETAILS, PLEASE. >> THAT’S RIGHT. SO OPEN A.I. IS ADVANCING TALKS TO RAISE A
NEW ROUND OF FINANCING THAT WOULD VALUE IT ABOUT $100 BILLION, AND THAT WOULD BE FROM $1 BILLION. CAROLINE: DO WE KNOW WHY THEY’RE RAISING FUNDING? >> DEVELOPING A.I. IS INCREDIBLY EXPENSIVE, RIGHT? SO ACCORDING TO AN EMPLOYEE MEMO WRITTEN BY THE OPEN A.I.
C.F.O. YESTERDAY, THE COMPANY IS DOING THIS BECAUSE THEY NEED TO COVER THEIR OPERATING AND COMPUTING COSTS. THE INCREDIBLE COST OF G.P.U.’S THEY NEED TO KEEP SCALING UP THE LARGE LANGUAGE MODEL TO SEE REACH THEIR GOAL OF REACHING ARTIFICIAL GENERAL INTELLIGENCE. THAT IS A PRODUCT THAT JUST DEMANDS AN ENDLESS AMOUNT OF CASH. CAROLINE: ALL WITH MICROSOFT’S BACKING. WE THANK YOU. MEANWHILE, CALIFORNIA’S STATE
ASSEMBLY APPROVED A CONTROVERSIAL A.I. SAFETY BILL THAT REQUIRES COMPANIES TO MAKE SURE AT THIS TECHNOLOGY DOESN’T CAUSE MAJOR HARM. THE BILL WOULD ALLOW CAR COMPANIES TO TAKE PRECAUTIONS SUCH AS IMPLEMENTING A KILL SWITCH THAT COULD TURN OFF THE TECHNOLOGY AT ANY TIME.
THE DEPUTY DIRECTOR OF THE STANFORD, AND YOU’RE DISCUSSING THE BILL AND LARGER LANDSCAPE WITH US, BECAUSE RUSSELL, MANY WOULD SAY, WELL, THAT’S A GOOD THING, BEING ABLE TO CONTROL TECHNOLOGY THAT PERHAPS SOME ARE FEARFUL OF. WHY IS THIS A THREAT TO YOUR ACADEMIC RESEARCH? >> WELL, GOOD MORNING, CAROLINE, AND THANK YOU FOR HAVING ME. I THINK WHAT’S REALLY IMPORTANT IS ABOUT GOOD POLICY. IT SHOULD SOLVE FOR THE HARM
IT’S TRYING TO SOLVE FOR. IN THE CASE OF 1047, UNFORTUNATELY IT DOES NOT DO THAT. HOWEVER, WHAT IS MOST CONCERNING FROM MY PERSPECTIVE IS IT HARMS ACADEMIA. IT HARMS ACADEMIA BECAUSE IT HURTS THE OPEN SOURCE COMMUNITY AND MAKES IT VERY DIFFICULT FOR THE OPEN SOURCE COMMUNITY, STARTUPS OR OTHER INDUSTRY, OR LARGE PLAYERS LIKE META, WHO PUTS OUT LONG MODEL, FOR US TO BE ABLE TO DISSECT, UNDERSTAND HOW THAT WORKS WHAT IT’S IMPACT WILL BE. IF WE CAN’T HAVE ACCESS TO THIS BECAUSE THIS COULD HURT THIS ENTIRE COMMUNITY, THEN I THINK 1047 IS ACTUALLY COUNTER PRODUCTIVE. CAROLINE: NOW, WHAT THOSE WHO HAVE WRITTEN THIS WOULD COME BACK WITH, AND INDEED, WE DID HAVE SCOTT WIENER ON THE SHOW PREVIOUSLY SAYING, LOOK, WE’RE NOT TAXING, WE’RE NOT ASKING THOSE THAT ARE RUNNING THE MODELS, SPENDING LESS THAN $10 MILLION OR SO.
WE ARE AFTER THE BIG PLAYERS. WHY IS IT SUCH A BIG IMPACT WHEN WE JUST HAD NUMBERS FROM META THERE’S 20 MILLION DOWNLOADS IN THE PAST MONTH ALONE. >> META IS LOOKING AT RESTRICTING USE IN THE E.U. BECAUSE OF THE OVERLY STRINGENT AREAS. SB1047 IS BY FAR FAR REACHING THAN THIS WHEN IT COMES TO THE LIABILITY ISSUES RELATED TO THAT. THE PROBLEM IS COMPANIES LIKE META WON’T BE RELEASING THIS IF THERE’S SUCH STRONG LIABILITY. AND WITHOUT THAT, WE WON’T BE
ABLE TO UNDERSTAND AND INTERROGATE THESE MODELS AND SEE HOW THEY WORK AS THE WAY ACADEMIA DOES AND HOW WE DO THAT VERY WELL. SO THAT WILL CUT OFF AN ENTIRE CHOKE POINT TO US. SECOND, I WOULD ALSO ADD THAT ACADEMIA, WELL RESOURCED UNIVERSITIES, DO WANT TO LOOK INTO HOW TO BUILD THESE. THERE’S CONSORTIUMS OF UNIVERSITIES THAT WANT TO BUILD THESE SO WE CAN TRAIN THE NEXT GENERATION HOW THIS WORKS, AND WE WON’T BE ABLE TO DO THAT BECAUSE WE WOULDN’T BE ABLE TO AFFORD ALL THE LAWYERS AND LEGAL FEES THAT WILL BE REQUIRED TO BE ABLE TO STAY COMPLIANT. ED: SOMETHING YOU JUST SAID,
RUSSELL, ABOUT ACADEMIC ACCESS TO TECHNOLOGY, WE HAD NVIDIA’S EARNINGS LAST NIGHT AND A DISCUSSION WITH JENSEN WAS ABOUT THE BROADENING OUT OF THE USE OF A.I. ACCELERATORS BEYOND THE HYPER SCALERS. CAN STANFORD UNIVERSITY FOR HUMAN CENTER’S A.I. GET ACCESS TO A CLUSTER? IS THIS A SITUATION THAT WORKS HERE? >> IT’S ACTUALLY A SIGNIFICANT CHALLENGE FOR US. WE ACTUALLY JUST WERE ABLE TO SECURE 30 H100’S. IT’S UNFORTUNATE, BECAUSE THE REALITY IS IF YOU LOOK AT WHAT META HAS TRIED TO SECURE, THEY’RE TRYING TO SECURE 300,000. SO THE REALITY IS ACADEMIA IS
CONSTRAINED AS TO WHAT IT CAN DO IN THIS PARTICULAR SPACE. AND WE ARE VERY LIMITED, AND WHAT WE NEED TO DO IS HAVE CONGRESS PASS THE CREATE A.I. ACT. THAT IS A GOVERNMENT SUBSIDIZING COMPUTE AND DATA FOR ACADEMIC RESEARCH, AND IT’S DESPERATELY NEEDED. AND ACADEMIA ALSO NEEDS TO
CONSIDER HOW TO REFORM HERE AND PUT GREATER DEGREE OF INVESTMENT IN THIS SO THAT WE CAN BE ABLE TO TRAIN STUDENTS, SO THAT THEY CAN BE THE NEXT A.I. LEADERS. ED: SB1047, IS THIS THE END OF THE STORY, OR DO YOU THINK YOU’LL CONTINUE TO BE CONSULTED AS THIS MOVES FORWARD? >> WE ARE BEING CONTINUALLY CONSULTED ON THIS, BUT THE REALITY IS THERE’S A CHORUS OF PEOPLE WHO ARE DEEPLY CONCERNED ABOUT THIS. IT’S NOT JUST ACADEMIA, IT IS INDEED SMALL BUSINESSES THAT ARE STARTUPS THAT ARE AFRAID OF WHAT THIS WILL MEAN FOR THEM. AND THERE’S THIS IRONIC SIDE OF THE, BIZARRELY IT WILL ENTRENCH OR MAKE THE MOST POWERFUL COMPANIES EVEN MORE SECURE IN THIS SPACE BECAUSE THEY CAN AFFORD THE LEGAL FEES. THEY CAN AFFORD ALL THE COMPLIANCE FEES AND THINGS THAT COME FROM THIS.
STARTUPS IN ACADEMIA CANNOT. >> RUSSELL WALD, STANFORD INSTITUTE FORAY A.I. COMING UP, SALES FORCE RESULTS TOPPING ESTIMATES, PLUS A SHAKEUP IN THE C SUITE. WE’LL HAVE DETAILS NEXT. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: LET’S CHECK IN ON SHARES OF SALES FORCE. EARNINGS TOPPED ESTIMATED AND ANNOUNCED CHANGES AT THE C SUITE. AMY WEAVER STEPPING DOWN AFTER FOUR YEARS ON THE JOB. WHAT ELSE DID WE HEAR, OTHER THAN EXECUTIVE SHAKEUP? >> WHAT WE REALLY LEARNED IS THAT SOFTWARE COMPANIES ARE NOT SURE WHERE THEY FIT IN THE A.I. MOMENT. LAST NIGHT SALES FORCE
REBRANDED A.I. TOOLS, NOT ASSIST ASSISTANTS, BUT AS AGENTS. WE HEARD THIS WORD OVER A HUNDRED TIMES. WE KEPT SAYING WE ARE MAKING AGENTS NOW. HOW DOES THAT DIFFER? NO ONE IS SURE YET. BUT WE ARE LEARNING THAT SOFTWARE COMPANIES CONTINUE TO TRY TO FOUND THEIR PLACE IN THIS A.I. MOMENT, AND THE REVENUE IS NOT
HERE YET. BUT HEY, JUST WAIT A YEAR OR TWO. ED: I SAW THE POST ON LINKEDIN. HOW’S THE MARKET TAKING THAT DEPARTURE? >> YEAH, THE MARKET I THINK IS READING THIS AS, WAIT A SECOND, IS THAT EVER LASTING SALES FORCE SUCCESSION STORY STARTING TO KIND OF GET ROLLING AGAIN? FOUR YEARS IS A RELATIVELY SHORT C.F.O. TENURE. SHE WAS WELL LIKED.
SHE’S NOT LEAVING FOR ANOTHER OPPORTUNITY, IT DOESN’T SEEM. SO HEY, IS THIS ANOTHER PHASE OF SALES FORCE’S GROWTH? THEY’RE DOING MORE CONSUMPTION-BASED PRICING. MAKE THEY FEEL THE NEED TO BRING FLESH BLOOD IN AT THE TOP, BECAUSE THEY’RE GETTING THE IDEA WHO HAVE WILL ONE DAY REPLACE BENOF AS A LASTING QUESTION. CAROLINE: WHO HAS BEEN THERE A SIGNIFICANT AMOUNT OF TIME THAT PEOPLE FEEL CAN STEP INTO THE VOID? >> THEIR CHIEF OPERATING OFFICER, HE’S BEEN THERE FOR VERY LONG AND HAS TAKEN ON A MUCH WIDER EXPANDED ROLE.
I WOULD SAY IF TOMORROW SAYS HEY, I’M DONE WITH THIS, IT WILL PROBABLY BE HERE. AT THE END OF THE DAY INVESTS WOULD LIKE TO SEE MORE NEW TALENT COMING IN FROM THE OUTSIDE. THAT’S SOMETHING I HEAR OFTEN. CAROLINE: WE THANK YOU. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY," A BIG ONE. ED: YEAH, IT WAS A BIG ONE.
RECAP IT ON THE PODCAST. IT’S ON APPLE, SPOTIFY, HEART, AND ALL THE BLOOMBERG PLATFORMS. BIG THANKS FROM EVERYONE NEAR SAN FRANCISCO. THERE’S ONE DAY TO GO IN THIS BUSY TECH WEEK. THIS IS "BLOOMBERG TECHNOLOGY." ♪
2024-09-01 04:46
