Tesla Bingo, Netflix Earnings | Bloomberg Technology
>> 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. CAROLINE: AT BLOOMBERG WORLD HEADQUARTERS IN NEW YORK. ED: THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: COMING UP, FULL EARNINGS COVERAGE. NETFLIX SOARS AFTER HOSTING ITS BIGGEST SUBSCRIBER GROWTH SINCE THE PANDEMIC. DETAILS AHEAD. ED: WE BREAK DOWN THE RESULTS FROM EUROPE'S MOST VALUABLE TECH COMPANY AND HEAR FROM THE ASML CEO HIMSELF. CAROLINE:
PARTAKING IN A GAME OF BINGO. YOU HAVE TO LISTEN INTO THE TESLA EARNINGS CALL TO WIN. THAT AND SO MUCH MORE AHEAD. LET'S CHECK IN ON THESE EARNINGS. WE ARE SEEING REPRIEVE MONEY POURING IN ON THE BACK OF TECHNOLOGY TO OUTPERFORM, THE NASDAQ IS UP MORE THAN 1.1% ON
THE BACK OF IT. INTERESTING THINKING ABOUT CHINA AND WHETHER OR NOT STIMULUS IS INDEED TO COME. THEY WILL REDUCE THOSE, RESERVE REQUIREMENTS WILL COME DOWN. HIGHLIGHTING WHAT'S HAPPENING AT THE NASDAQ GOLDEN DRAGON. BOND MARKET PRETTY LAST -- PRETTY LACKLUSTER.
MOVE ON TO SEE WHAT'S HAPPENING IN THE WORLD. WHAT A RIDE WE'VE HAD OF LATE. TODAY WE ARE UP AGAIN, 2%. LET'S DIG INTO WHAT'S HAPPENING. ED: A LOT GOING ON IN SINGLE NAMES. TEXAS INSTRUMENTS IS THE BIGGEST MAKER OF ANALOG CHIPS. IT GAVE THE SALES OUTLOOK THAT
FRANKLY THE INDUSTRIAL SEMI'S, THESE ARE THE MOST BASIC CHIPS THAT DO VITAL FUNCTIONS. EUROPE'S MOST VALUABLE TECH COMPANY, OF THESE OF THE EUROPEAN LIST IT SHARES. IT'S ORDERS TRIPLED IN THE QUARTER JUST GONE. THE SHARE REACTION UP. YOU WILL HEAR FROM THE CEO IN DUE COURSE. TESLA AFTER THE BELL UP 1.4%.
IT'S BEEN THE BIGGEST POINTS DRAG SO FAR IN 2024. HOW MANY EV'S WILL THEY BUILD? MICROSOFT UP 1%. AS IT STANDS IT'S COME ACROSS ONCE AGAIN THE 3 TRILLION MARKET CAP, THAT'S MORE OF A PUBLIC SERVICE ANNOUNCEMENT ON THAT ONE. META HAS HAD A KEY MILESTONE. IT'S GAIN HAS TAKEN ITS MARKET CAP TO $1 TRILLION FOR THE FIRST TIME IN AROUND TWO YEARS. EARNINGS COMING UP.
THIS IS A STOCK STARTING TO GET SOME CREDIT FOR THE AI STORY AND COME BACK LATER IN THE PROGRAM AND THE WEEK AS WELL. CAROLINE: WE HAVE TO GET TO WHAT IS DICTATING TRADE. SHARES POPPING AFTER THOSE COMPANIES NUMBERS.
WE SAW THE BIGGEST DRIVER. WE ARE BLOWN AWAY BY SUBSCRIBER GROWTH AND BY SEEMINGLY THE ADVERTISING RE-STAND NOW. >> WE SAW THOSE HUGE SUBSCRIBER NUMBERS. SO MUCH OF THE CONFIDENCE IN THIS STORY IS YOU HAVE ALL THESE GROWTH DRIVERS IN PLACE. THE ADVERTISING TEAR HAS KICKED OFF AND GOT OFF TO A SLOW START. IT ONLY HAPPENED ABOUT 12 MARKETS SO IT HAS TO GAIN MUCH GREATER TRACTION.
THEY'VE INVESTED NOW IN THIS RAW PROGRAMMING DEAL SO WE SHOULD START TO SEE THE ADVERTISING TEAR BECOME MUCH MORE MATERIAL IN REVENUE STARTING IN 2025. IT'S THE PAID SHARING PASSWORD SHARING CRACKDOWN THAT'S WORKING WELL. IT WASN'T JUST THE RESULTS, IT WAS THE GUIDANCE FOR 2024 THE LOU EVERYONE AWAY. ED: BLOOMBERG INTELLIGENCE ANALYST, THANK YOU SO MUCH. LET'S KEEP THE CONVERSATION GOING WITH RICH GREENFIELD.
WHEN I WENT THROUGH THE NUMBERS MORE DEEP LEE, THERE'S THE 13.1 MILLION NEW SUBS BUT 5 MILLION OF THOSE CAME FROM THE EMEA REGION. WHAT ARE THOSE DRIVERS THAT GEETA WAS TALKING ABOUT. RICH: WE HAVE THE SORT OF PERFECT STORM. OBVIOUSLY ALL THE COMPANIES, THE LEGACY MEDIA COMPANIES WHETHER WE ARE TALKING DISNEY OR WARNER BROS. DISCOVERY OR PARAMOUNT, THEY ARE ALL PULLING BACK ON THEIR STREAMING EFFORTS. THEY'VE SHIFTED INTO LET'S CUT
COSTS AND RAISE THE PRICE AND SO THE COMPETITIVE LANDSCAPE FOR NETFLIX IS FAR LESS INTENSE THAN IT WAS. WE HAD THIS BRIEF TIME DURING THE PANDEMIC WHERE EVERYONE IN LEGACY MEDIA AND CABLE NETWORK MEDIA THOUGHT GETTING INTO STREAMING WAS EASY. THEY ARE REALIZING IT IS REALLY HARD, THEY WANT TO SEE PROFITABILITY. THEY ARE ALL FALLING BACK SO NUMBER ONE COMPETITION IS LESS FOR NETFLIX.
I THINK THE REALITY IS NETFLIX INVESTING IN LOWER COST TEAR, HAVING A LOWER COST SERVICES MAKING A VERY BIG DIFFERENCE AND THEN I THINK 3, 1 OF THE AMAZING THINGS YOU ARE IN NOW AS THE LEGACY MEDIA COMPANIES PULL BACK THEY ARE SEEING THEIR LEGACY BUSINESSES, CABLE TELEVISION REALLY UNDER PRESSURE. THEY ARE LICENSING MORE CONTENT. LAST NIGHT YOU SAW WARNER BROS. DISCOVERY LICENSING SEX AND THE CITY TO NETFLIX. EVERYTHING IS FOR SALE AND SO THE AMOUNT OF CONFLICT -- CONTENT ON NETFLIX, WE'VE COME FULL CIRCLE.
FIVE YEARS AGO EVERYTHING WAS ON NETFLIX FROM THIRD-PARTY COMPANIES THEN THERE WAS NOTHING AND NOW WE ARE REALLY RIGHT BACK TO IT. BACK TO THE HEROIN NEEDLE BACK IN THE ARM WHERE WE CANNOT GET OFF THE DRUG OF LICENSING CONTENT. THEY NEEDED FOR SURVIVAL RIGHT NOW AND SO NETFLIX IS IN THIS POSITION WHERE THEY HAVE MORE CONTENT THAN EVER BEFORE AND THE COMPETITIVE DYNAMIC IS LESS THAN IN YEARS AND THEY HAVE A CHEAPER SERVICE WITH ADVERTISING TO OFFER TO CONSUMERS. THAT IS WHY NETFLIX HAD THEIR SECOND-BEST NET ADD QUARTER. CAROLINE: BEFORE WE GET INTO WHAT SEEMS TO BE A BIT OF A BLOWOFF AND THE REST OF THE COMPETITIVE LANDSCAPE, WHAT ABOUT THE LEADERSHIP POSITION THE DEUTSCHE BANK IS SAYING IS FULLY PRICED INTO THE STOCK AT THESE LEVELS? IS IT HOW MUCH FURTHER WE CAN RUN? RICH: THE INTERNET IS GENERALLY WINNER TAKE MOST. I WAS LISTENING 20 OR COLLEAGUES TALK ABOUT MEDA GETTING BACK TO A TRILLION DOLLAR MARKET CAP.
YOU ARE STILL LOOKING AT A COMPANY THAT THERE'S NO REASON WHY THEY CAN HAVE HUNDREDS OF MILLIONS OF SUBSCRIBERS. THEY ADDED 13 MILLION IN A QUARTER. I THINK PEOPLE NOT TOO LONG AGO THOUGHT THE U.S. WAS TAPPED OUT. NOW THEY OWN THE U.S. NICELY AGAIN AND ALL SIGNS POINT TO 80- 90 MILLION SUBS OVERTOP.
LABEL LOWER-COST PRODUCT IN ADVERTISING TEAR THAT REPRESENT -- ADVERTISING DOLLARS WORLDWIDE. I DON'T THINK THE GROWTH STORY IS OVER IT ALL. AS COMPETITIVE DYNAMIC EASES. THE QUESTION SHOULD BE WHAT
HAPPENS TO THESE OTHER COMPANIES. ED: WE DISCUSSED THAT IN THE CONTEXT OF THE WWE DEAL. IT ANSWERS THE POINTS. IT'S RAW IN THE U.S. AND EXCLUSIVE PROPERTIES OUTSIDE THE U.S.. WE ARE NOT SEEING ESPN DO THESE DEALS. RICH: THE REALITY IS THESE COMPANIES CANNOT COMPETE.
THEY ARE TRYING TO BALANCE THEIR LEGACY MEDIA ASSETS WHETHER IT'S CABLE NETWORKS OR TV STATIONS, THEY ARE TRYING TO BALANCE. THE RESULT IS THOSE BUSINESSES WHICH ARE PROFITABLE DECLINE, THEY DON'T HAVE THE SAME DOLLARS TO INVEST IN STREAMING. WE HAVE THE MAJOR MEDIA COMPANIES REPORTING OVER THE NEXT COUPLE OF WEEKS ITEM SURE YOU WILL BE DISCUSSING IT. THE QUESTION IS SHOULD YOU JUST GIVE UP? IS THERE A PATH TO BUILDING A SCALED GLOBAL STREAMING PLATFORM THAT MAKES MEANINGFUL DOLLARS OR ARE YOU KIDDING YOURSELF AND IN THAT DENIAL PHASE.
YOU WOKE UP THIS MORNING AND ARE LIKE THEY ADDED 13 MILLION SUBS. THEY ARE GROWING AT MULTIPLE OF HOW WE ARE GROWING. WHY ARE WE DOING THIS? SHOULD WE BE IN THE PEACOCK BUSINESS. HOW SOON DO THESE EXECUTIVES FIGURE OUT WHAT WE BELIEVE THEY SHOULD DO? CAROLINE: WE STILL SEE THE FIGHT WHEN IT COMES TO MORE BROADLY THE WORLD OF STREAMING. IT IS NOW NETFLIX A GLOBAL TV?
RICH: IT FEELS LIKE YOU HIT ESCAPE VELOCITY. THERE'S PROBABLY A TIME PRE-PANDEMIC I THINK THERE WAS A POINT IN TIME PEOPLE FELT THE SAME ABOUT NETFLIX. EVERYONE CALLED INTO QUESTION BECAUSE THE SOLOS HAPPENING WERE DISNEY PLUS EXPLODED, HBO MAX WAS EXPLODING. I RUINED A VERY EXCITED THIS WAS EASY TO REPLICATE. NOW THERE REALIZING THEY ARE NOT CAPABLE. THEY DO NOT HAVE THE TECHNICAL KNOWLEDGE, THE COMMITMENT TO THE BUSINESS SO I FEEL LIKE NETFLIX IS AT THAT ESCAPE VELOCITY. THE QUESTION IS HOW MUCH WILL
THESE MEDIA COMPANIES TORCH ON STREAMING BEFORE THEY REALIZE THIS IS NOT WHAT THEY DO WELL. THEY MAKE GREAT CONTENT AND SHOULD ON HARVESTING THAT AND NOT TRY TO BE A PLATFORM. THAT'S PROBABLY WHERE WE END UP WITH SEVERAL COMPANIES. CAROLINE: GREAT TO HAVE SOME TIME WITH YOU.
THE CROWD STRICT CHIEF TECHNOLOGY OFFICER WILL BE SITTING DOWN WITH US DISCUSSING CYBERSECURITY AND THE ROLE IN UPCOMING ELECTIONS. ED: SHARES OF ALPHABET HITTING NEW RECORDS IN TERMS OF SURPASSING ITS ALL-TIME CLOSING. THE TRADE IS AI OPTIMISM AROUND THIS NAME. THIS IS BLOOMBERG TECHNOLOGY.
>> THIS IS NOT YOUR TYPICAL VICTORY SPEECH BUT LET'S NOT HAVE SOMEBODY TAKE A VICTORY. >> THERE ARE DOZENS OF STATES LEFT TO GO. CAROLINE: FORMER PRESIDENT TRUMP AND CONTENDER NIKKI HALEY OUT THERE.
NOW COMING TO US FOR MANCHESTER, NEW HAMPSHIRE THE MORNING AFTER THE PRIMARY. TO GIVE US THE DETAILS AND HOW THE INTERNET TECHNOLOGIES INTERTWINED IN THIS. >> THE DETAILS WERE TROUBLED BY DOUBLE-DIGIT MARGINS, NOT NECESSARILY THE STRONG SECOND-PLACE SHOWING HER SUPPORTERS WERE LOOKING FOR. SHE IS GOING TO THE NEXT REAL CONTEST SHE WANTS TO COMPETE IN THE HOME STATE OF SOUTH CAROLINA. THE ISSUE IS SHE'S PULLING MORE THAN 30 POINTS BELOW TRUMP IN HER HOME STATE AND OVER THE NEXT FOUR WEEKS ATTACKS AGAINST HER IN CAROL -- SOUTH CAROLINA WILL ONLY INTENSIFY AS LIKELY CALLS FOR THE REPUBLICAN ESTABLISHMENT TO FALL IN LINE BEHIND TRUMP.
THIS TEASE US UP GIVEN THE DIFFICULT ROAD TO HEAD ROAD AHEAD, DONALD TRUMP VERSUS JOE BIDEN. THE BIDEN CAMPAIGN SEEMS LIKE IT'S WELCOMING THIS DEVELOPMENT. THEY HAVE WANTED TO HAVE A GENERAL ELECTION AGAINST PRESIDENT TRUMP -- AGAINST TRUMP BECAUSE BIDEN HAS BEATEN HIM IN 2020. THE DEMOCRATIC PARTY HAVE DECIDED THE FIRST PRIMARY SHOULD BE IN SOUTH CAROLINA. HE WAS NOT ON THE BALLOT. THERE WAS A WRITING CAMPAIGN WHILE OTHER CANDIDATES LIKE DEAN PHILLIPS WERE ACTUALLY ON THE BALLOT. BIDEN WINNING IN A HISTORIC WRITING CAMPAIGN.
WHAT WAS INTERESTING IS THIS RELATES TO THE PLURAL TEST PROGRAM ON BLOOMBERG TECHNOLOGY IS RIGHT BEFORE THAT A ROBO CALL AI GENERATED WITH JOE BIDEN WAS MAKING PHONE CALLS SAYING TO HOLD THEIR VOTE UNTIL NOVEMBER. WE ASKED THE CONGRESSMAN DEAN PHILLIPS ABOUT THAT A FEW DAYS AGO, HE DID NOT KNOW WHO WAS BOUGHT KIND IT BUT WE NEED TO BE THINKING CRITICALLY ABOUT DEEPFAKES IN THIS ELECTION CYCLE. HE TOOK -- HE DOES NOT THINK PRESIDENT BIDEN HAS DONE ENOUGH. ED: KAILEY LEINZ ON THE GROUND, TERRIFIC REPORTING. LET'S STICK WITH POLITICS IN
THE AI STORY. THE CROWD STRICT PRESIDENT JOINS US TO DISCUSS HOW GENERATIVE AI COULD AFFECT THE UPCOMING ELECTION AND I WAS COMPANY VIEWS ELECTION SECURITY OFF THE HEELS OF THE NEW HAMPSHIRE PRIMARY. IT'S ONE EXAMPLE OF MALICIOUS CONTENT THAT CIRCUITS OF SOCIAL MEDIA. IN THE EARLY FORAYS, WHAT IS THE ACTIVITY YOU ARE SEEING? MICHAEL: I THINK IT WILL BE AN INTERESTING YEAR, 40 COUNTRIES ARE VOTING THIS YEAR. THE PROBLEMS ARE A GROWING ISSUE. OTHERS BEEN SO MUCH TALK OVER THE YEARS ABOUT VOTING SYSTEMS, PROBABLY TOO MUCH BEING PUT IN TO THAT AREA BECAUSE WE HAVE TO THINK ABOUT DEEPFAKES AND DISINFORMATION CAMPAIGNS AND ULTIMATELY WHAT WILL COME DOWN TO IS THE AVERAGE VOTER WILL STRUGGLE TO UNDERSTAND WHAT'S REAL AND WHAT'S NOT. THEY HAVE TO MAKE SURE THEY ARE
NOT MAKING DECISIONS ON WHO TO VOTE FOR BASED ON INCORRECT AND JUST INFORMATION WRITTEN -- INCORRECT INFORMATION. CAROLINE: HOW MUCH ARE GOVERNMENTS FRONT AND CENTER MANAGING TO BRACE FOR THIS BECAUSE IT CAN BE LEFT IN THE HANDS OF THE CONSUMER FOR LONG? MICHAEL: IT CAN BUT IT'S EASY FOR THE CONSUMER TO -- CONTENT. IT'S NOW A FEW THOUSAND DOLLARS IF VERY GOOD CABLE GRAPHICS SYSTEM FOR YOU CAN GET SOME INSTRUCTIONS AND BUILD YOUR OWN DEEPFAKE.
THE CHALLENGES WE WILL SEE, A LOT OF THIS CONTENT WE HAVEN'T SEEN BEFORE CREATED BY THE AVERAGE PERSON. IT'S SOMETHING EVERYONE WILL HAVE TO STEP UP TO ADDRESS. IT'S SOMETHING THAT SHOULD BE CONSENT FOR EVERYBODY BECAUSE IT WILL BE -- IT'S SO EASY TO CREATE THIS CONTENT TODAY. CAROLINE: WE WANT TO THANK YOU SO MUCH FOR JOINING US TODAY. IT GROUP OF SENATORS FROM BOTH SIDES OF THE AISLE DRUMMING UP CALLS FOR CREATION OF A FEDERAL AGENCY TO REGULATE THE INDUSTRY. THE GROUP WROTE A LETTER URGING CHUCK SCHUMER TO ESTABLISH AN AGENCY REGULARLY GALORE -- LARGEST TECH COMPANIES.
>> ASML SEEING GROWTH. BLOOMBERG TV CAUGHT UP WITH ITS CEO. THIS IS BLOOMBERG TECHNOLOGY.
ED: WASHINGTON STATE LEGISLATORS ARE AT THE CENTER OF DEBATE REGARDING ARTIFICIAL INTELLIGENCE REGULATION. THE BILL HOPES TO PLACE RESTRICTIONS ON HOW BUSINESSES AND GOVERNMENT AGENCIES CAN REPLACE HUMAN DECISION-MAKING WITH AI. BIG TECH LOBBYISTS ARGUE THE BILL IS FLAWED. APPLE IS HITTING THE BRAKES ON ITS PLANS TO BRING A SELF-DRIVING CAR TO MARKET. THE COMPANY IS NOW SHIFTING ITS
FOCUS TOWARDS BUILDING AN ELECTRIC CAR WITH MORE LIMITED FEATURES WITH THE LATEST CHANGES THE COMPANY IS LOOKING TO INTRODUCE THE CAR IN 2028 AT THE EARLIEST DOWN FROM 2026. PLUS THE ASML CEO TELLING BLOOMBERG TV THE GENERATIVE AI BOOM MEANS THE TECHNOLOGY TO COMPUTE AND STORE DATA. THE DUTCH CHIPMAKER BENEFITED FROM STRONG DEMAND FROM CHINA LAST YEAR, SHARES TODAY AT AN ALL-TIME HIGH. >> EXTRAORDINARY SHARE REACTION AND THE NUMBERS. TALKING ABOUT THE PERFORMANCE YOU SPOKE WITH THE CEO A LITTLE BIT EARLIER WHO SAT DOWN WITH TOM MACKENZIE AND REALLY LATE INTO THE CLARITY OF CHINA AND ARTIFICIAL INTELLIGENCE. >> 90% OF OUR BUSINESS IN CHINA, THUS THE TECHNOLOGY WE NEED FOR THE MAJOR TRANSITIONS.
THE ELECTRIC VEHICLE TRANSITION, ROLLOUTS OF THE SMART GRID, LIFE SCIENCES, IT'S ALL MATURE TECHNOLOGY. >> WHAT IS YOUR MESSAGE TO THOSE IN WASHINGTON? LAWMAKERS WHO ARE PUSHING TO EXPAND THOSE RESTRICTIONS BEYOND THE MOST CUTTING-EDGE MACHINES, TO EXPAND THOSE RESTRICTIONS ON THE SALE OF LITHOGRAPHY TO CHINA? >> I RESPECT FOR NATIONAL CONCERT HE CAN STASH NATIONAL SECURITY -- NATIONAL SECURITY CONCERNS. IT HAS GIVEN US MASSIVE ADVANTAGES IN TERMS OF INNOVATION AND COST REDUCTION. FROM AN ECONOMIC POINT OF VIEW YOU NEED TO MAKE SURE THE ECONOMIC SYSTEM THAT WE HAVE CREATED WHICH HAS GIVEN US SO MUCH BENEFIT THAT WE KEEP THAT IN TACT. IT'S ABOUT MAKING SURE THAT
INNOVATION CAN KEEP GOING. >> YOU ARE STEPPING DOWN IN APRIL. DOES YOUR SUCCESSOR HAVE TO WARGAME THE SCENARIO WHERE ASML HAS TO OPERATE IN A GLOBAL MARKET.
>> I DON'T KNOW IF HE IS WARGAMING, WE JUST HAVE TO DEAL WITH THE REALITY. I'M AN OPTIMIST AND I DO BELIEVE THAT WE HAVE CREATED A MACROECONOMIC SYSTEM THAT ARE SO DEPENDENT ON EACH OTHER THAT I THINK THAT'S A SCENARIO YOU DON'T PUT INTO AGAIN. >> YOU DO NOT HAVE GENERATIVE AI WITHOUT ASML.
WITHOUT YOUR ULTRAVIOLET LITHOGRAPHY MACHINES. HOW MUCH DEMAND OR YOUR CLIENT SAYING THEY ARE SEEING FOR CHIPMAKING EQUIPMENT TO GENERATE THOSE AI CHIPS. >> THE FULL EXTENT OF WHAT AI COULD BRING HAS NOT -- IS NOT TOTALLY CLEAR. THAT STILL NEEDS TO DEVELOP. IT'S GOING TO NEED MASSIVE AMOUNT OF PUBLIC POWER AND DATA STORAGE.
WITHOUT ASML AND OUR TECHNOLOGY, IT'S VERY CLEAR IT'S GOING TO BE A BIG DRIVER FOR OUR BUSINESS. ED: THAT WAS THE ASML CEO, EUROPE'S MOST VALUABLE TECH COMPANY. TESLA EARNINGS OUT AFTER THE BELL.
WE PUSH AHEAD WITH A GAME OF BINGO. DETAILS NEXT. >> RETURNING TO VALUABLE TECH NAMES IN EUROPE, S.A.P. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED LUDLOW IN SAN FRANCISCO. CAROLINE: WE ARE RIDING HIGH AND IT SEEMS TO BE THANKS TO TECHNOLOGY ON THE EARNINGS MANAGING TO BREAK THROUGH AND ENCOURAGE THE MARKET TO BUYING INTO STOCKS AT THE TIME WHEN WE SAW STRONG ECONOMIC DATA THAT YOU MADE SOME OF THE NUMBERS PREDICATED ON THE BOND MARKET PULL OUT A LITTLE BIT. WE ARE SEEING SOME OUTPERFORMANCE AS WELL IN TERMS OF CHINA SHARES.
THIS IS AFTER WE KNOW IN THE ANTICIPATION OF A RATE CUT WITH SOME STIMULUS YET TO BE IN THE CHINESE ECONOMY. WE SAW BOTH INDEXES OF CHINESE INTERNET NAMES WE GALVANIZE THAT. THEY HAVE ERODED IN VALUE OVER THE LAST FEW MONTHS. WE ARE UP ABOUT 2%. LET'S JUST WELL ON SOME OF THE RECORD HIGHS TODAY.
IN A MONTH SOME OF THE STRONG ECONOMIC DATA WE ARE STILL DECIDING TECH NAMES WILL OUTPERFORM PARTICULARLY FROM THE MAGNIFICENT SEVEN. I SEE ABOVE A $1 TRILLION MARKET CAPITALIZATION. ALPHABET AT A NEW RECORD HIGH AS WELL. MICROSOFT ABOVE $3 TRILLION.
WE KNOW WHAT'S HAPPENING WITH TESLA. WILL THOSE EARNINGS MANAGE -- SOME INVESTORS COMING BACK TO THAT NAME. THE WORST PERFORMER -- >> A VERY DIFFERENT STORY WITH THE OTHER SET. TESLA'S REPORTING EARNINGS AFTER THE CLOSING BELL TODAY. WE WILL SPICE THINGS UP A BIT
IN TERMS OF HOW WE REACT TO THOSE RESULTS WITH A GAME OF BINGO FROM THE ELON INC. PODCASTED TEAM TO EXPLAIN THE METHODOLOGY, THE SCIENCE BEHIND THIS MASTERPIECE. BLOOMBERG -- I WILL GO TO SOMETHING YOU CHANGED TO SHORTCHANGE THE GLOBAL AUDIENCE ON. IN TWO SEPARATE SQUARES.
YOU AND I BOTH KNOW THAT THAT COMES IN ONE SENTENCE. >> AS BLOOMBERG'S CHIEF BINGO SCIENTIST, IT NEEDS TO HAVE SOME GUINEAS AND SOME THAT ARE MUCH LESS LIKELY TO HIT. IT WILL BE VERY SURPRISING IF ELON MUSK DID NOT SAY PRODUCTION IS HARD, IN REFERENCE TO THE DIFFICULTY MANUFACTURING THE CYBER TRUCK, TESLA'S NEW PICKUP TRUCK. CAROLINE: A LOT OF THESE ARE FUN, AT ONE POINT THINGS GO AUDIBLY, WHAT IS CRUCIAL FOR INVESTOR BASE HERE. WHAT WILL COME OUT OF HIS MOUTH
THAT MIGHT INJECT SOME ENTHUSIASM OR CREATE FURTHER ROUTES? >> WE ARE TRYING TO HAVE FUN WITH THIS AND ALSO PARTICIPATING IN WHAT IS A TIME-HONORED TRADITION AS WELL AS CRITICS, LOTS OF INVESTORS AND COMMENTATORS, YOU CAN FIND THEM ON REDDIT. I THINK FOR INVESTORS IT SOUNDS STRANGE TO SAY BUT THE MOOD IS VERY IMPORTANT. HE'S ONE OF THE MOST ACCESSIBLE CEOS, HE TALKS ALL THE TIME CONTINUOUSLY. HE DOES NOT HOLD BACK. HOW HE DESCRIBES THESE NUMBERS IS PROBABLY JUST IMPORTANT AS THE NUMBERS HE DESCRIBED. DO WE GET A SAD ELON OR OPTIMISTIC? THAT WILL ULTIMATELY DECIDE HOW INVESTORS REACT TO WHAT HAPPENS LATER TODAY. CAROLINE: THE SUPERCOMPUTER, THE AI THE ROBOTICS QUESTION.
THIS IS SOMETHING WE ARE STARTING TO HEAR FROM ELON MUSK THAT HE MIGHT TAKE THAT TECHNOLOGY ELSEWHERE IF HE IS NOT RECOMPENSED IN THE WAY HE WANTS TO BUY TESLA. WILL WE HEAR PUSHBACK? MAX: ELON MUSK IS UNCONVENTIONAL BUT THE IDEA HE'S ASKING FOR WHAT AMOUNTS TO A MASSIVE PAYRAISE AT THE SAME TIME MAKING A THREAT OR A VEILED THREAT TO TAKE HIS AI EXPERTISE ELSEWHERE IT'S KIND OF STAGGERING ESPECIALLY GIVEN FOR A COUPLE OF YEARS THE AI HAS BEEN COURT TO TESLA. THE WHOLE BAT HERE ESPECIALLY FOR TESLA BOWLS IS THIS COMPANY WILL OPERATE A ROBOTAXI FLEET AND BUILD A SUPERCOMPUTER DOJO. AND SO IT IS A BIT OF A HEAD SCRATCHER, ON THE OTHER HAND HE DOES HAVE SOME LEVERAGE HERE BECAUSE HE HAS THESE OTHER COMPANIES THAT ARE ALSO DOING AI STUFF.
SO THERE IS IN SOME SENSE A CREDIBLE THREAT TO TESLA INVESTORS AND THE TESLA BOARD HAS GENERALLY GONE ALONG WITH WHATEVER ELON MUSK ASKS FOR. HE WILL PROBABLY FEEL EMBOLDENED. ED: THE BEAUTY OF THIS BOARD AND CARD IS MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE SO THE BASICS FOR WALL STREET ARE WILL TESLA REITERATED ITS 50% COMPOUND ANNUAL AVERAGE GROWTH FOR 2024. WILL THEY SAY THEY ARE ON TRACK TO BUILD THE EV'S. FOR THAT TESLA OWNER FAN LOOK AT THE TOP RIGHT SQUARE FOR SELF-DRIVING AND WHAT'S SO INTERESTING IN THE LAST ONE HE FOUR HOURS IS THEY PRODUCT VERSION 12 AND THERE SO MUCH CHAT ABOUT IT. HOW DO YOU THINK THAT WILL BE DISTINGUISHED BETWEEN THE TESLA FAN, THE ELON MUSK SUPPORTER AND LEGACY WALL STREET.
IT FOCUSES ON THE FUNDAMENTALS. MAX: THE FULL SELF-DRIVING PROMISES IMPORTANT TO EVERYBODY. SOME ANALYSTS ARE MUCH MORE FOCUSED ON THE QUESTION MARGINS. BASICALLY HOW MANY PEOPLE WANT TO BUY TESLA'S AND WHAT ARE THE MARGINS. HOW ELON MUSK HIMSELF SEES SELF-DRIVING.
NEXT YEAR IT BASICALLY SEEMS LIKE EVERY YEAR HE SAYS COME IN NEXT YEAR. IT'S BEEN A SOURCE OF CONTINUAL DISAPPOINTMENT AND CRITICISM. WATCHING TO SEE IF THEY EVER PULL BACK FROM THE PROMISE I THINK THAT WOULD HAVE HUGE EFFECTS ON NOT JUST DEMAND, NOT JUST CAR BUYERS BUT ALSO ON HOW INVESTORS THINK ABOUT THIS STOCK. SO MUCH OF THE STOCK IS ABOUT THE FUTURE AND PROMISE ELON MUSK HAS BEEN REITERATING THAT THIS WILL BE MORE THAN A CAR COMPANY. >> IT'S A BEAUTIFUL BINGO CARD AND WE THANK YOU FOR BEING OUR CHIEF SCIENTIST IN RESIDENCE PARADE WHAT IF YOU GOT GOING ON.
ED: I HAD TO TAKE THE OPPORTUNITY TO TAKE A RIDE IN ONE OF THE TESLA VEHICLES THAT'S OPERATING IN THE VEGAS LOOP. HERE IS HOW IT WENT? >> A ONE POINT SEVEN MILE SERIES OF TUNNELS UNDER THE LAS VEGAS CONVENTION CENTER MADE BY ELON MUSK'S BORING CO.. WE TOOK A RIDE IN ONE OF THE TESLA MODEL LIES. -- TESLA MODEL Y'S. BEFORE CIRCLING BACK WITHOUT GETTING OUT. IT TOOK ME ABOUT 15 MINUTES TO DO THAT LOOP.
TOP SPEED WAS 40 MILES PER HOUR WITH AN AVERAGE OF 30. WHEN THINGS GOT CONGESTED, 15 MILES PER HOUR. THERE WERE NO CRAZY WAIT TIMES WITH THE FULL FLEET OF TESLA'S DEPLOYED IT GOT BUSIER AROUND LUNCHTIME. IN CERTAIN SECTIONS IT CAN BE BUMPY IF YOU'RE GOING TO WALK THAT CAN TAKE YOU 25 MINUTES. IT TAKES JUST TWO MINUTES IN THE LOOP. THE SYSTEMS DESIGNED TO CARRY MORE THAN 4400 CONVENTION GOERS AN HOUR IN THE TESLAS AND THE FUTURE THERE'S A PLAN FOR SPECIAL VEHICLES TO CARRY 12 PEOPLE. BORING IS PLANNING AN EXPANSION
OF 68 MILES OF TUNNELS WITH 93 STATIONS ACROSS THE CONVENTION CENTER AND THE LAS VEGAS STRIP. ED: BY THE WAY IF YOU ARE CLAUSTROPHOBIC THIS IS NOT THE FUTURE TRAVEL TECHNOLOGY FOR YOU. CAROLINE: LIMITATIONS STILL. COMING UP, HOW CREATIVE MORE
CREATIVE STARTUPS, HOW CAN THEY AVOID THAT. IBM AFTER THE BELL. THE MARKET IS LOOKING PRETTY POIGNANT IN ANTICIPATION OF CASH FLOW COMING BACK ON. CURRENT REMAINING PERFORMANCE OBLIGATION PROJECTED TO RISE ALMOST 21%. THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE: LET'S TALK ABOUT THE ENVIRONMENT FOR STARTUPS. TYPICALLY THEY DEPEND ON SERIAL INFUSIONS OF FUNDING FOR BACKERS TO GET THROUGH THEIR EARLY YEARS.
THEY SEE RAISING MONEY AT A LOWER VALUATION THAN BEFORE, LATELY COMPANIES HAVE GOTTEN CREATIVE TO AVOID BEING CONSIDERED LESS VALUABLE. I WANT TO BRING IN, PALMER WHOSE WITNESSED DUSTERS WRITTEN A KEY STORY ON THIS. ULTIMATELY HOW IT IGNORING OF THEIR OWN INVESTORS ARE THEY BECOMING? >> IT'S A VERY CHALLENGING ENVIRONMENT.
COMPANIES HAVE BEEN MORE RETICENT TO LET THEIR SHAREHOLDERS KNOW WHAT'S HAPPENING INSIDE THE COMPANY. THOUGH SHAREHOLDERS STRUGGLED TO VALUE AND MARK THESE COMPANIES AND THEIR BOOKS AND THAT HAS A TRICKLE UP EFFECT. ED: THERE'S AN INTERESTING ELEMENT WHICH IS THE SECONDARIES MARKET. WE'VE BEEN FOCUSED ON THIS IN
RECENT WEEKS. THINK ABOUT THE MECHANICS OF HOW IT WORKS IN TERMS OF EMPLOYEE LIQUIDITY AND WHAT YOU DO OR DO NOT HAVE TO SHARE IN TERMS OF FINANCIALS WHILE ALSO NOT HAVING TO OFFER NEW EQUITY. >> THE SECONDARY MARKET HAS GOTTEN INTO HIS DESK INTERESTING AS INVESTORS DO NOT HAVE A WAY TO GET OUT THOSE FEW IPO'S. YOU SEE THE SECONDARY MARKET
WHERE PEOPLE TURN TO TO GET LIQUIDITY. MAY BE LOOKING FOR SOME CASH ON HAND. THAT'S BECOMING MORE CHALLENGING BECAUSE IF PEOPLE DO NOT KNOW WHAT'S HAPPENING AT THE COMPANY. THEY DON'T HOW TO PRICE THESE THINGS. IF A BUYER IS INTERESTED THEY DON'T KNOW HOW THEY SHOULD VALUE WHAT BID THEY SHOULD OFFER. AND THEY MAY NOT BE ABLE TO GET
THROUGH WITH THEIR DUE DILIGENCE. SELLERS AS WELL MAY NOT HAVE THAT INSIGHT ESPECIALLY IF THEY ARE LOWER IN THE CAP TABLE. ED: THANK YOU. NOW SPEAKING OF STARTUP VALUATIONS HERE'S ONE THAT JUST DOUBLED.
BUILD REWARDS IS THE APP THAT REWARDS CONSUMERS ON THEIR RENT JUST RAISED LED BY GENERAL CATALYSTS AND PUSH THE COMPANY'S VALUATION TO $3.1 BILLION. THE NEW YORK-BASED STARTUP IS USE SOME OF THAT MONEY TO EXPAND ITS REWARDS NETWORK TO INCLUDE RESTAURANTS, GROCERY STORES, DRY CLEANERS. AS SOMEONE WHO RENTS AND JUST TRYING TO FIND A HOUSE TO BUY IN THE BAY AREA, GOOD LUCK. THIS IS AN INTERESTING CONCEPT LET'S BRING IN THE CEO FOR MORE.
WELCOME TO THE PROGRAM. LET'S START WITH THE ROUND. BIG CHUNK OF CHANGE, A BIG VALUATION BUT WHY DID YOU DO IT? >> THE NICE THING ABOUT RAISING CAPITAL IS WE ARE NEVER ACTUALLY RAISING CASH IN A MOMENT WHERE WE NEEDED MONEY. THE COMPANY IS PROFITABLE AND IT'S ALLOWED US TO BE MORE STRATEGIC. THIS WAS REALLY ABOUT PARTNERSHIPS. WHAT WE'VE BEEN SO LUCKY TO HAVE HAPPEN TODAY IS WE BROUGHT IN THE CEO OF AMERICAN EXPRESS, FOR YEARS HE BUILT MEMBERSHIP REWARDS AND THIS MERCHANT ECOSYSTEM JOIN US.
HE JOINED GENERAL CATALYST WHERE PART OF THIS ROUND IS REALLY THE LINING INTEREST BRINGING IN CAN IS A PARTNER IN THE BUSINESS AND THEN A LOT OF THIS CAN BE USED FOR THINGS LIKE SHARE BUYBACKS. ONE OF THE BENEFITS OF BEING A PROFITABLE COMPANY AS YOU CAN FOCUS ON LONG-TERM WHILST STILL GIVING INVESTORS EARLY LIQUIDITY OPPORTUNITIES. CAROLINE: WILL IT CHANGE YOU HAVING A COBRANDED MASTERCARD.
>> WE ARE THE PAYMENTS AND REPORTS PLATFORM ACROSS THE COUNTRY. PEOPLE GET REWARDED WITH RENT PAYMENTS TO MATTER HOW THEY PAY. CHECK AND CASH, AMEX, VISA, MASTERCARD. WHAT'S SO EXCITING NOW IS WE ARE NOT JUST GETTING POINTS ON RENT, YOU'RE ALSO EARNING YOUR NEIGHBORHOOD.
THERE'S NEVER BEEN -- WE ARE REALLY EXCITED ABOUT THAT. REWARDING YOU ON THE BIGGEST EXPENSE RENT TO NOW BUILDING THAT LOYALTY AND ALLOWING THE LOCAL RESTAURANTS TO SAY HERE IS HOW YOU BIG -- REACH THIS AND REWARD THEM FOR COMING IN REGULARLY. THAT CAN BE A GAME CHANGER. CAROLINE: IT'S ALL ABOUT BUILDING LOYALTY. REMIND US HOW YOU'RE GETTING PAID.
YOU GOT A REALLY STRONG REVENUE STREAM HERE. >> THE SHORT ANSWER IS YES. WE DIDN'T HAVE TO REINVENT THE BUSINESS MODEL. WE HAVE TO BUILD THE ECOSYSTEM. LOYALTY PROGRAMS EXIST, THEY MAKE MONEY FROM THEIR MERCHANT PARTNERS WHEN THEY STRIVE SPEND. WE'VE ALSO DONE AND BUILT THE BIGGEST PAYMENT PROCESSOR ON TOP OF THAT. YOU ALLOW YOURSELF TO BE
PROFITABLE AND GENERATE REVENUE FROM HOW PEOPLE SPEND ON RENT. WHEN PEOPLE USE YOUR CARD AND THAT ECOSYSTEM TOGETHER IS WHAT MAKES THIS UNIQUE. ED: I'VE GOT TO GO BACK, PAYING RENT IS PAINFUL RIGHT. THERE IS NO EQUITY REWARD, GETTING ANY OF THE TAX BENEFIT OF OPENING -- OWNING A HOME OR -- IT'S CRAZY BUT WHAT IS THE MARKET FOR IT? IS THERE A CLEAR DEMOGRAPHIC, CUSTOMERS THAT CAME TO YOU AND SET I LIKE THIS. IS THERE GEOGRAPHIC CONCENTRATION? THE MARKET HERE IN NEW YORK IS WELL KNOWN.
>> MOST MEMBERS ARE IN A 21 TO 35-YEAR-OLD DEMOGRAPHIC. YOUR AT THIS POINT IN YOUR LIFE OR BUYING A HOME IT'S NOT JUST ABOUT AFFORDING THE HOME YOU ARE JUST SHE WANT THE FLEXIBILITY. YOU CAN MOVE TO DALLAS OR DENVER. THE PROBLEM IS HISTORICALLY YOU HAVEN'T GOTTEN ANYTHING BACK. WITH BUILT EARN THOSE POINTS
WHICH WE CONVERT INTO AIRLINE MILES. WE SPENT 18 MONTHS WITH FANNIE AND FREDDIE TO ALLOW PEOPLE TO USE POINTS TOWARDS THE DOWN PAYMENT ON THE HOME. TO BUILD YOUR CREDIT AND HELP QUALIFY FOR A MORTGAGE. YOU PAY YOUR RENTED ANY APARTMENT USING A DEBIT CARD OR BANK. AS YOU BUILD YOUR POINTS BALANCE YOU ARE BUILDING YOUR CREDIT HISTORY SO IF YOU DECIDE TO BUY A HOME, YOU HAVE A HEAD START.
>> I'M INTERESTED ON ULTIMATELY HOW YOU CONTINUE TO EXPAND AND IS IT ABOUT TALENT RIGHT NOW? THE MONEY YOU SAID YOU RAISED, DIDN'T MEAN TO. WHERE'D YOU PUT IT TO WORK? >> TODAY WE HAVE OVER 50% OF THE TOP 50 RESIDENTIAL OWNERS AND OPERATORS ALREADY IN THE ALLIANCE. NOW WE HAVE AN OPPORTUNITY TO REALLY SCALE ACROSS THE LONG TAIL OF THE MULTIFAMILY AND TO PROVIDING REWARDS ON SINGLE-FAMILY HOMES. WE JUST ROLLED OUT OUR FIRST
SET OF CONDOS AND MORTGAGE SERVICES. EVEN HOMEOWNERS CAN START TO PARTICIPATE IN THIS REWARDS PLATFORM FOR PAYING THEIR MORTGAGE AND BEING IN THEIR NEIGHBORHOOD. THE SECOND PART WHICH I THINK IT TAKES TIME WITH AMERICAN EXPRESS AND VISA IS BRINGING IN ALL THESE LOCAL MERCHANTS AND SAYING WE CAN BE A PLUG AND PLAY PLATFORM FOR YOU. HERE'S A WAY TO REACH PEOPLE. 50% OF RENTERS MOVE OUT EVERY YEAR.
ALL THOSE NEW PEOPLE MOVING INTO THE NEIGHBORHOOD WE MAKE IT EASY TO REACH THOSE CUSTOMERS AND GIVE THEM REWARDS AND BENEFITS AS A LOCAL. THE PERSON MOST LIKELY TO COME IN ON A MONDAY EVENING. I THINK THAT'S A POWERFUL ECOSYSTEM AND COMMUNITY WE CAN BUILD. CAROLINE: GREAT TO HAVE YOU ON THE SHOW. ED: CROSSING THE BLOOMBERG TERMINAL, JOHN STUART RETURNING TO COMEDY CENTRAL'S THE DAILY SHOW STARTING FEBRUARY 12. JOHN STUART WILL HOST THE PROGRAM EVERY MONDAY. HE IS RETURNING AFTER NINE
YEARS TO TAKE THE SHOW THROUGH THIS YEAR'S ELECTION CYCLE. A STORY WE CONTINUE TO MONITOR. THIS IS BLOOMBERG TECHNOLOGY. >> WHAT TIME DO YOU CLOSE TODAY? >> WE CLOSE TODAY AT 10:00 P.M.. CAN I HELP YOU WITH ANYTHING ELSE? ED: JERSEY MIKE'S JUMPING INTO THE WORLD OF ARTIFICIAL INTELLIGENCE BECOME BE ANNOUNCED A PARTNERSHIP WITH SOUND HOUND AI TO ADD STATE-OF-THE-ART VOICE AI ORDERING. THE SOUND HOUND CEO JOINING US NOW.
HOW MANY STORES, WHERE, WHEN, HOW? >> WE ARE VERY EXCITED ABOUT THE ANNOUNCEMENT. JERSEY MIKE'S HAS A LITTLE BIT OVER 2500 LOCATIONS. USUALLY WE START WITH ONE OR TWO BEFORE THEY EXPAND. WE ARE STARTING THE YEAR WITH OVER 10,000 LIVE LOCATIONS ACROSS GLOBAL BRANDS. CAROLINE: WHAT IS COMPETITION LIKE GIVEN THE WORLD HAS EMBRACED GENERATIVE AI? >> SOUND HOUND HAS THREE PILLARS OF BUSINESS.
WE PROVIDED BRANDED -- BRANDED AI ASSISTED PRODUCTS. IN A SECOND WE HAVE AI CUSTOMER SERVICE OR BUSINESSES LIKE RESTAURANTS AND BEYOND. THE THIRD WE BRING THEM TOGETHER. YOU CAN TALK TO YOUR CAR INSTEAD OF THE RESTAURANT TO ORDER FOOD. IT BRINGS THIS TO THE USERS OF PILLAR ONE CUSTOMERS. SO SOMETHING CHANGE LAST YEAR. LARGE LINE WHICH MODELS CHANGE
THE LANDSCAPE. WE'VE BEEN DEVELOPING THE CORE TECHNOLOGY FOR ALMOST TWO DECADES. BUT WHEN LARGE LANGUAGE MODELS CHANGE THE LANDSCAPE IT ACCELERATED OUR PATH TO ADOPTION AND COMPETITORS, THEY HAVE TO BUILD THEIR OWN LARGE LANGUAGE MODELS. ED: WE JUST HAVE 10 SECONDS LEFT.
THIS AN EXCLUSIVE DEAL OR ARE YOU PHONING JACK-IN-THE-BOX AND WENDY'S NEXT? >> IT'S NOT EXCLUSIVE WE ARE WITH 25 BRANDS ALREADY. INCLUDING WHITE CASTLE. WE CAN ALSO POWER SOME OTHER BRANDS. CAROLINE: GREAT HAVING SOME TIME WITH YOU. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY.
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