Loading summary
Transcript144 lines
- [00:00]
Michael McDermott
At CES. Michael McDermott, EVP of Samsung, spoke with Bloomberg Media Studios about what the company calls its next AI chapter, your companion to AI living. It's a shift from AI as a feature to AI as a trusted partner in everyday life.
- [00:15]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
You need to make a huge presentation in an hour. Luckily, Adobe Acrobat Studio uses AI to.
- [00:22]
Uncle Crawford
Take all your documents and generate a.
- [00:24]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Presentation with a single click, building slides faster than ever before. So so if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design?
- [00:34]
Carmen Reineke
Do that with acrobat.
- [00:35]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
You have 30 documents that need to be simplified into a proposal. Do that with Acrobat. Learn more@adobe.com do that with Acrobat.
- [00:44]
Michael McDermott
I'm caught up in the game. My attention is on every play and every whistle. But what I'm missing is a signal coming from my kidneys. That signal isn't like a ref's whistle, it's more of a silent sos, which could be warning me of an increased risk for events like heart attack or stroke. And and a way I can catch that signal a simple urine test called UACR. If you have type 2 diabetes or high blood pressure, talk to your doctor about the UACR test, Detect the SOS. Visit detectthesos.com to learn more.
- [01:17]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Bloomberg Audio Studios Podcasts Radio News.
- [01:26]
Jeff Lawson
Bloomberg Tech is live from coast to.
- [01:29]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Coast with Caroline Hyde in New York.
- [01:32]
Eva (Ritz Carlton Yacht Collection spokesperson)
And Ed Ludlow in San Francisco.
- [01:37]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
This is Bloomberg Tech. Coming up, Wall street is shedding stocks it thinks are on the wrong side of the revolution.
- [01:43]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Plus, Twilio founder Jeff Lawson has a new company, nuclear fusion startup Inertia. We'll discuss how the surging demand for electricity is powering big energy bets and.
- [01:53]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Shares of Lyft plunging after the company's latest earnings results, will be joined by CEO David Rischer to unpack it all.
- [02:00]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
But first we turn our attention to these public markets actually being whipsawed on the day we get the big jobs data that signals the strength people start to backtrack maybe on when or where we could see some sort of Fed rate cut and it impacts Treasuries, but stocks actually manage to having been in the red now shake it off for up a tenth of a percent on the NASDAQ 100 managing climb back after yesterday's lows. Bitcoin though, I'm afraid no respite from the selling. There are 5%, 66,000 and what are you looking at underneath the hood?
- [02:28]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
I'm going to run through the earnings that we're going to get through throughout the hour. Lyft is down or on track to be down the most since August of 2024. Its profit outlook has the Street a little bit worried because they don't have the answers on why that outlook is weaker than consensus. T Mobile actually missed on wireless subscribers in the quarter, gone was lower and is now higher 3% in the session and then Shopify be estimates. But there seems to be this concern out there with the stock on track for its biggest drop since April last year that air is coming for it. That is a common theme we've heard for a little while now Cara.
- [03:01]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
And as I'm looking at the software index, it's once again down by 3.3%. So clearly having having a torrid time as those rising fears just about AI of pummeling shares of companies at risk being caught on the wrong side of the new technology. From small software makers to big wealth management firms just yesterday a tax strategy tool and it rolled out by a little known startup called Altruist such as a Charles Schwab. Raymond James LPL Financial, as you'll see, absolutely tumbling. Let's get more on Bloomberg's tech equity reporter Carmen Reineke. You've been all over the implications and anthropics. One thing to have these small, smaller LM or AI offerings start to rule markets, that's quite something.
- [03:43]
Carmen Reineke
Yeah. I think what it really shows here is that kind of everyone's at risk, right. Investors have been so quick to punish the shares of companies that might be in the crosshairs here of any new innovation or disruption from AI. And it really marks kind of a shift or sort of two truths that are happening in the market right now. One, this fear of an AI bubble and sort of overspending and that the technology won't live up to the hype. And then on the flip side side that the technology it's here and it's really good and it's going to disrupt entire parts of the market. So we're seeing these little pockets sell off on these new things that are coming out and investors are really just trying to see what's next.
- [04:20]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
We were talking about your story as a team. Common is really one of the most read on the terminal and on dot com. There are names in there that are familiar like some of the wealth managers for example. And then there are names that really like even we haven't heard of go through those impacted specifically.
- [04:36]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Yeah.
- [04:37]
Carmen Reineke
So some of the ones that were most impacted yesterday, you know, Charles Schwab was one. Raymond James LPL Financial. But then we've also seen, you know, some stocks across Europe also get hit. Not, you know, super high profile, I think for some of us here in the U.S. but you know, last week it was things, you know, Intuit saw a little bit of a sell off also tax, you know, programming just really all over sort of across the board. Insurers, you know, had a little bit of, of a sell off as well. So it's a very broad range of stocks that we're seeing here get hit and there is not, there's not an easy way to really think about what could be next.
- [05:14]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Carmen Reineke, she's going to be writing what's Next. We so appreciate it. For more on the software sell off, but still the demand for hardware, we're joined by Uncle Crawford, EVP Portfolio Manager over at Algeria. You recently updated your 2023 paper AI and the Declining cost to create your thesis is now playing out in real time. You've been writing when I can software. The cost to create software plummets. I believe the market is starting to question the terminal value of these businesses. I will be more challenging. It will be more challenging for companies who are not native. So how much longer could this pressure build for?
- [05:49]
Uncle Crawford
You know, I think again when the terminal value is changing and you don't really know what the, the end point is, it's difficult to put a multiple on these stocks. Now I would say that we're getting a little bit of a phenomenon of the baby's getting thrown out with bath water in that all, all stocks are going down regardless. Because there is such a fear factor right now when not all of the software stocks are created equal. Right. And there are going to be some beneficiaries. But one thing is for sure, the entire industry needs to rethink. And you know something that the Shopify CFO said this morning that I thought was really interesting is he, he wrote, he said the rules of what is possible are being rewri. Real time.
- [06:36]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Yeah.
- [06:36]
Uncle Crawford
And, and I think that's what you're seeing is when you can create bespoke software on the fly. And that's today. What happens five years from now when these lambs and these, you know, self coding mechanisms are actually even more powerful by orders of magnitude. So anything digital, any digital asset, you must call to question as to what is its future.
- [07:02]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
But this knee jerk of sell first, ask questions later. What questions are you now asking to decide where you can bottom pick which ones aren't going to be disrupted.
- [07:11]
Uncle Crawford
So I think it becomes again a Very much a stock pickers market because there are, you have to understand the architecture of how some of the software is actually being built. I would say things like point solutions that are in the small to mid cap space, very difficult to own because that kind of end market that they're addressing can easily get usurped by companies that are bigger or adjacent businesses. You know, so you, it's very difficult to own some of those. I think companies that are larger cap more platform like companies, parts of those businesses are at risk, not the entire thing. We'll still have SaaS. It will just exist at a different margin structure, different growth rates than we are used to. So how do you pick? I think you have to understand the differences between all the software security is not the same as enterprise software, not the same as you know, mid and small cap point solutions. So you have to be almost very, very deliberate in what you're looking at and not just by the group.
- [08:21]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
We've been zeroed in on this software story for so many days in a row now. And earnings of course. But we should discuss the stronger than expected US jobs report. Payrolls in January rising by the most in more than a year. Unemployment falling unexpectedly. What does that signal for the tech sector? What do our audience need to understand about that?
- [08:43]
Uncle Crawford
So look, I think, I think we're living in two states, two separate regimes right now in that you know, the tech sector is going through its own hiccups with understanding the, the what, what I will do to it. On the other hand you have the hardware sector inside of tech which is faring much better than software because they are the net beneficiaries of, of all of this AI and the infrastructure spending. So how do we would I read the unemployment report and, and attach it to I think today or over the next few weeks they're kind of not connected to one another and I won't read anything into it for, for the tech sector.
- [09:29]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
That would suggest that we are still zeroed in on the capital expenditures numbers that will come from the hyperscalers and others and that that will be the yardstick by which we judge continued growth. Right for that for the balance of this year. How important a data set is that going to be for you this year Anchor?
- [09:47]
Uncle Crawford
I think very much. I think besides that, the hyperscaler capex numbers, I think we have to look at demand. Token growth in the month of January was 25% growth month over month from December. If you annualize that, that means token growth for the year is going to, going to be 14 fold what we saw last year, 14 fold token growth. And that is just a measure of the amount of intelligence that we are, we are asking the system or AI to do for us. That is an incredible amount of demand that is being put into the system and we will need an incredible amount of capex to support it. And, and I will remind everyone we are in the, the very early innings of adoption of artificial intelligence and you know, so that capex number actually is necessary and it doesn't really scare me because as we, as we move forward two, three, four and five years, I do believe that our world is changing in such a dramatic way that we are going to need this capex.
- [10:57]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Uncle Crawford about. Great to have you back on the program. Thank you very much. Coming up, time to launch Space X meets X AI. Why I may be key for the company's next launch. Bloomberg Intelligence just initiated coverage and we have it next. This is Bloomberg Tech.
- [11:23]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Space X is acquisition of Xi has many wondering what the company's next chapter will look like. The profitable rocket maker is set to merge the AI startup up which is what burning billions as it races to compete with other players. All of this comes as Space X that you're looking at now is expected to IPO later this year. Today Bloomberg Intelligence has launched coverage of the combined entity and says the merger along with the planned IPO could help fund investment in larger launch vehicles and space based data centers. As new reports suggest the IPO could value the company as much as $1.5 trillion or more. When to bring in a dream team? Bloomberg Intelligence Roundtable George Ferguson, Senior Aerospace and Defense Analyst and Mandeep Singh, Global head of tech research has been thinking about the Tesla implications. George, we start with you on Space X. How much is a burden or a help to be now aligned with Xi because it's certainly cash burning. Meanwhile, you think revenues are up to the tune of 10 billion for certain parts of SpaceX or if not more.
- [12:21]
Michael McDermott
Yes. So we think launch is worth probably revenue generating probably at least 10 billion. And, and we think that the satellite constellation starLink is probably 8 ish, 9 ish billion. My colleague John Butler did the work on that. So we're up actually probably closer to the 20 billion. Look, I think the, the combining with XIA is all about sort of strategy and funding AI. I mean Mandeep will of course talk to it deeper but I think that business needs a lot more investment. I think Musk wants to push it up in its competitiveness and so I think he put it ins the broader Offering for Space X in order to help move some money that way.
- [13:04]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Mandeep, the combination, you know, long term it's about compute in space, right? Satellite space, form factor data center. In your research you're continuing to look at what we reported as being a potential tie up between Tesla XI and Space X. Give me a thesis.
- [13:24]
Mandeep Singh
Well, so the way XI has been looking to monetize is through consumers consumer subscription so far. And when I stack them against, let's say an OpenAI, you know, they are nowhere close to the scale that OpenAI is or Gemini is in terms of consumer subscriptions. On the enterprise side, yes, they have that big defense contract, but that's where you know, the XI revenue run rate is close to 1 billion. And compare that to Anthropic and others, they're not growing at the same pace. So because all these large language models are converging and growing really fast, you have to ask yourself how are they going to fund the next training run? And you need that sort of funding to really keep up in terms of how these models are developing. So I think the merger is really an attempt to make sure that they don't lack the funding because all these companies are tapping, you know, the private market, the debt market and you know, as a combined entity they have already sort of come up with the 1.25 trillion. Yes, they go public, probably 1.5 trillion could be achievable, but it's a very high valuation multiple that they already have.
- [14:34]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Mandy, what's interesting in your research is you really compare and contrast how many individual users are going to a standalone GROK AI. Yeah, not many, but there are plenty of us Tesla users out there who could be using it. How much should they need to lean in to to ensure that adoption is brought to bear in that respect?
- [14:51]
Mandeep Singh
Yeah, and you make a great point. The digital assistant use case within a Tesla makes perfect sense. I mean, why would they not deploy Groq inside a Tesla as a digital assistant? And you already have, you know, 10 million cars on the road where you could potentially deploy that. So from that perspective, the feedback loop can be very fast in terms of, you know, them deploying the product, the feedback in terms of how well is it's doing and constantly improving that. But you need that consumer adoption because that's what all these lamps you're competing against, Google, Gemini with more guardrails as.
- [15:25]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Well, I might add.
- [15:26]
Mandeep Singh
Yeah, and that's where GROK so far has been kind of, I feel like they haven't really caught up in terms of implementing the right guardrails and people feel skeptical about implementing them on the enterprise side. So there is work to be done on that front.
- [15:43]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
This is a big moment where Bloomberg Intelligence is initiating coverage deep research of a big private entity that we think will go public. Right GEORGE the data in the deck is so valuable. You're tracking the size of the Starlink Constellation, you're tracking launch cadence and then our forecasted financials. Which of those are going to be most important now that Space X is hard pivoted to the moon from Mars? George very quick.
- [16:10]
Michael McDermott
Well so I guess where I see the money really being generated from is the constellation, the satellite constellation around the around the Earth. And that's going to bring broadband revenue and it's going to bring direct to cell revenue. The pivot to the moon and Mars I think is a little more about sort of marketing than it is about revenue generation. I'm all about revenue and profit generation.
- [16:33]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
George Ferguson Mandeep Singh Bloomberg Intelligence Coverage of Space X and X I appreciate it a lot. There's a lot going on in the world of Elon Inc. Jimmy Barr Tony Wu Co founders of X I have announced they're leaving the company after less than three years by my count Carrie that means that half of the about dozen initial founders, which includes Elon Musk.
- [16:54]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Have now gone and maybe that's to be expected when you see such a difference in the architecture of the business. Now it's subsumed into things Space X. What does that mean in terms of the founding principles of this business? But is there any read through look, we're looking at their statements that their resignation posts that they actually put on X of course. What do you make of it? As someone who's so deeply within the Elon Musk space?
- [17:17]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
We just, we just don't know. When I read the merger documents, you know it was pretty clear and we reported this right that XI would operate as a standalone subsidiary because remember Space X is subject to ITAR rules vehicles, the use of technology in defense applications. Is that it? Is it about the reports that Musk has been frustrated about the pace of grocer's deployment but these are notable people who are leaders in field and talent's everything in this game and boy is.
- [17:45]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
The competition hot at the moment with Anthropic, with open AI with Xi we continue to track it. Meanwhile coming up Google another AI player that we keep rely on but it's also adding a way to shop within its AI search. We'll discuss with the company's general manager of ads and commerce. Stick with us this Bloomberg Tech.
- [18:09]
Michael McDermott
How do you shift AI from being a flashy feature to a trusted partner in consumers everyday lives on the ground at CES Bloomberg Media Studios, asked Michael McDermott, EVP of Samsung. Our 2026 vision is built around an AI companion. It understands you and responds intuitively. This intelligence works quietly in the background across TVs, home appliances and mobile devices. By putting AI at the center of everything we do, we're simply improving everyday life for everyone everywhere.
- [18:40]
Jeff Lawson
Sound familiar? At Mattress Firm we understand there are many problems that can keep you up at night, like snoring, aches and pains or sleeping hot. Our sleep experts have the unrivaled know how to match you with a Matt can help. And now at Mattress Firm, save up to $500 on Tempur Pedic plus get a $300 instant gift for the great sleep you deserve. Visit Mattress Firm. We make sleep easy. Restrictions apply. See store or website for details.
- [19:09]
Eva (Ritz Carlton Yacht Collection spokesperson)
Hi, it's Eva and I think it's about time you discovered the world's first luxury hospitality brand at sea. The Ritz Carlton Yacht Collection. Imagine setting sail on an all inclusive voyage where every moment is entirely yours. Explore the Amalfi coast, the islands of Thailand or Alaska's glacial fjords and the lagoons of French Polynesia. Or maybe just stay aboard and indulge in a spa day, dining from Michelin starred chefs and kayaking directly from the exclusive marina platform. There are so many possibilities and so much time to relax every journey unlike the rest. The Ritz Carlton Yacht Collection Learn more at Ritz Carlton Yacht Collection.com.
- [19:58]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Google is adding shopping features to its AI search and Gemini Chatbot. The move comes as tech companies more broadly look for ways beyond subscriptions to make money from the AI tools. Let's discuss with Vijay Srinivas and Google's vice president and general manager of ads and commerce. There's always been a relationship, at least you know, for me personally as well, between Google searching and then getting to a product. But in AI mode, that's what we're talking about here. AI mode. There's just a more direct interaction to a transaction, right where. Where you can go ahead and buy something.
- [20:33]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
That's right.
- [20:33]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
How big a moment is that for Google?
- [20:35]
Vijay Srinivasan
It is a massive moment for us. We see this as not just a big moment for Google, just sort of stepping back in the last year. What we see is shoppers have really changed their behaviors. They are now typically shoppers had to pick between shopping fast or shopping smart. And with AI that trade off is kind of disappearing and therefore businesses now need a new playbook. And a lot of what they're doing now is all about how to empower them. And in AI mode, what we are seeing is people's search behavior is completely evolving from keyword search to conversational search. They upload pictures. There's so much multimodal input that comes in. And that's just a moment for us to rethink how we do the whole thing.
- [21:14]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Vijay, Anyone that watched the super bowl will know that the inclusion of ads within a generative AI tool is, let's not say, controversial, but that people are deciding if it's what the consumer wants. Right. If you're interacting, interacting with an AI, do you want an ad to pop up? And you've been testing different ad formats as part of this. What do you think the consumer wants?
- [21:38]
Vijay Srinivasan
Yeah, obviously we spend a lot of time figuring out what consumers want. We've had a 25 year history in, in satisfying human curiosity with search. In all of these experiences, ads have been a big part of that. And they work because they are helpful and assistive to the person in the moment. Now, with what's happening with AI mode, what we see is the conversational modality is changing. It is a moment for us to reimagine what ads are possible and what will actually work. And there's a lot of experimentation that we're doing. In fact, we have a couple of announcements on that. But the foundations of what makes this work continue from what we've learned all these years, and that's really based on a foundation of trust and safety. Trust.
- [22:21]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Safety. Then tell us about how you become entrepreneurial in your thinking, how you become creative in your thinking that these don't feel unnerving to the purchaser. They feel natural, organic and useful.
- [22:36]
Vijay Srinivasan
Mm. Let me actually give you an example. So let's say you're in a mode and you want to purchase a lamp for your bedroom. And you talk to the. You tell AI mode of about your, you know, the decor you like, it's a modern decor. You want a certain kind of lamp, this is a color. And you get to a point where you know the product that you want, you see the product that you want. The feature that we just launched today lets you purchase it right there in that moment. Now, you're still very much in control of the purchase. However, a lot of the grunt work of getting from what I want to, when I have it is removed in this process. So this feels assistive, this feels natural, and it's based on the same principles that we've done a lot of things before.
- [23:19]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Direct Offers. Who can I buy from when I found the perfect lamp? Is it just Etsy and Wayfair? You've got partnerships there. How is this expanding across the entire remit of partners that you have?
- [23:30]
Vijay Srinivasan
Yeah, so Direct Offers is an opportunity for retailers to provide us a very specialized discount that we can. That our air actually matches with people during their shopping journeys and gives them this very personalized discount. And it allows retailers to just close the sale in that moment because they give, they motivate people to do this. And the way it's going to scale is we just, we currently are running a pilot with, with a lot of retailers. There will be more that can come on board and they just have to participate in this as a new ad format.
- [24:02]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
The technology needs to work. For me, it's still a technology story. So you want whatever appears in AI mode to be relevant to the query. You know that has been a criticism of, of other generative AI tools. What's come up in front of me has nothing to do with what I'm talking about. How's Google solving for that?
- [24:21]
Vijay Srinivasan
There are many aspects to that. I think it goes back to the foundation, core foundations of search in general. We are in the constant crash test to make the results more relevant. One of the things that can help in this space is also understanding the context of the user better. And AI mode is, is good in that sense because we do have the opportunity to go back and forth with the user. So the questions we have as a follow on all of these things help us learn a little bit more about the person. So we have the best shot at producing results that are more relevant for them.
- [24:52]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Very briefly you talked about safety and privacy is a criticism particularly of Elizabeth Warren for example, worrying that you're pushing people into making well, purchases that they otherwise wouldn't their privacy. How do you tackle that?
- [25:06]
Vijay Srinivasan
The the way we tackle the foundations is people today have choice to go purchase something or not. There are many, many opportunities that you have to click on that buy button in many places in many different products. Those same principles of control and choice price continue to exist in this domain as well. And it's still on the person to choose to click on that button and make that purchase.
- [25:30]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Video. It's been great having you Google's video Srinivasan. We thank you. Coming up, Twilio founder Jeff Lawson. It's got a new company, it's a nuclear company. He joins us to discuss the energy startup's $450 million Series A. That's next. This is Bloomberg Tech. Welcome back to Bloomberg Tech. Checking in on these markets which have been whipsawed by macro data. By course, jobs coming in stronger than expected. What does that mean for an overall policy from the Federal Reserve in terms of rate cuts coming maybe July rather than June. But I'm looking at individual stocks that are on the move. Check out the earnings story coming from Lyft, a surprise revenue miss on the fiscal fourth quarter. Look, bookings are good. People are wanting to ride with Lyft. But what about the profitability there and what about the revenue drivers? What about the expansion outside the US we're going to have that conversation with the CEO a little bit later. As you can see a painful day off by 15%. Move on to some of the other just key indexes. Look, this is the push and the pull in the market software we have more anxiety about the latest AI formats, LLM developments, latest ways in which business models are getting disrupted, whether it's in your financial services, whether it's in your legal services, but also whether more broadly it's about what software is going to do for you in the longer term and how much you can charge for it. Software under pressure again down 3.6%. That rotation continues. But still the capex is there, still the hardware is there, still the high bandwidth memory anxiety and lack of it is there. A micron goes higher. So we're seeing still those chip makers ad in the green. What are you looking at?
- [27:09]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
This goes to the private markets. Surging demand for electricity is powering big investments in energy. Among them fusion startup Inertia Co founded by Twilio founder former chairman and CEO Jeff Lawson, which just closed a $450 million Series A funding round. Jeff Lawson, co founder and CEO of Inertia is with us.
- [27:31]
Michael McDermott
Us.
- [27:32]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
It's good to have you back on Bloomberg Tech.
- [27:33]
Jeff Lawson
Thanks to be back.
- [27:34]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
A completely different field. It's not just fusion. I think let's start by you introducing us to Inertia because a fusion powered plant is completely contingent your case and you cracking extremely powerful lasers. A sentence I never thought I'd say on this show. Take it from there.
- [27:53]
Jeff Lawson
Well, Inertia is the commercial fusion energy company. That's because in order to commercialize the technology you need to prove the science. So we are resting on the scientific proof that it was made several years ago. You probably read about it at Lawrence Livermore National Lab.
- [28:06]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Yes.
- [28:06]
Jeff Lawson
And now we are here to take it out of the lab. And bring it to the grid. And we do that in three ways. One, of course, start with proven science. Number two, we're going to go build the world's most powerful laser. In fact, the laser we're going to build is a million times more powerful than the one they use over at Lawrence Livermore. It's 20 times more efficient and 110 the size. Then we're going to go build the world's first fusion fuel target manufacturing plant. And then lastly, we're going to bring all those things together into a grid scale 1.5 gigawatt power plants that we hope to bring online in the 2030.
- [28:37]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
There's a lot there. There's a lot of we are going to with lasers. Like we broke the story about substrate, for example, which is also using X rays in lithography. That was born out of the national labs here in California. There's some interesting tangents there. That's all to say it sounds like you probably need $450 million to get started if you're going to pull all of this off. What's the first priority?
- [28:57]
Jeff Lawson
Well, fusion energy is not a cheap endeavor. So yes, it will be capital intensive. That's why we're so happy to be starting off with such a great group of investors for our Series A. And if you think about it, commercialization really requires three things. First of all, you need proven science, so we've got that. Second is you need a great team. And so for a team to go commercialize, you've got my co founder and he was the lead designer of the experiment at Lawrence Livermore that achieved this huge milestone. My other co founder, Mike Dunn, ran the program that designed the power plant based on that experiment. And then I'm bringing business experience to the domain as well. And so you look at the team that we're building, which is a team that is designed to commercialize. And the third thing you need is funding. And that's why this funding announcement is such a big part of our story.
- [29:40]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
What's interesting is you hit while the iron is hot, so to speak, in terms of a need, an energy need. And it's coming from the very top. It's coming from the administration. Just listen to what a key administration official told us today.
- [29:53]
Michael McDermott
Now we're facing this arms race with China. We need more power. We need energy addition. The way to have energy addition is to stop, stop getting rid of the stuff that already works. And of course that includes our fossil fuel baseload. In the PGM market, 70% of the power was Coming from, from hydrocarbons, you know, during, during those storms.
- [30:13]
Jeff Lawson
I mean America and the world is.
- [30:15]
Michael McDermott
Dependent on it and is going to be for the, for in the long future.
- [30:18]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
U.S. interior Secretary that Doug Burgum speaking. Jeff, how quickly can you provide this very much needed alternative energy source?
- [30:27]
Jeff Lawson
Well, I think investment in new energy sources is always a long term play. No matter what kind of energy you're talking talking about, it takes time to develop the technology. Our goal is to have the first fusion pilot plant online in the 2030s available to start producing grid scale energy. And our solution is a grid scale answer to our energy problems which can provide enough power to power a million homes or a medium to large sized city at any one point in time. And that's just the first plant. After that we'll move on to building the second, the third, the fourth and keep stamping these things up out, stomping.
- [30:59]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
These fusion things out, which could go either direction. I love talking about the big lasers. I also love talking about big magnets. Jeff, why was this the technology you bet on when it comes to nuclear fusion?
- [31:12]
Jeff Lawson
Well, the reason why we're betting on the laser based fusion approach is because it is actually work. The basic science of our approach thanks to more than 60 years of work in the national labs and more than $30 billion invested by the government to get to this huge milestone where it actually produced energy. And so now that is the time when you want to go commercialize. And that experiment was first proven in December of 2022, but since then has been now run many times and in fact increase the yield or the amount of energy it creates multiple fold. And so that's why this is the time to take it out of the lab and bring it to the grid. Because the proven science that that is.
- [31:48]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Demonstrated, the science, the skepticism, the pause is that we have been talking about this technology for quite a long time and people's projections are always wrong. And when it gets commercialized, do you have a kind of line of sight to that, like will you do it in California for example, or is that just not realistic in this state? You're looking elsewhere in the United States. Give us the kind of like plans operationally to make this real?
- [32:14]
Jeff Lawson
Absolutely. Well, we have a 12 to 24 month period right now where we are approving the design validation of the things we're going to go manufacture. Then we've got a multi year stage where we're going to go actually make the prototypes of our laser units of our target manufacturing plant. And after that that's when we break ground on the plant itself, where we put the plant, we have not yet decided. I think that's up for a determination over the next several years. But the key thing for us is that this is not about basic science. The thing that introduces a lot of uncertainty into these types of innovations and is basic science. You never know if it's going to work tomorrow or a decade or 100 years from now or maybe never. But when you're talking about engineering, bringing a product to market, doing an industrial scale up to go build bigger lasers, more targets, you know, those are the kinds of things that are predictable. Think about, you know, Apple. Every year they're bringing a brand new, really hard to manufacture, incredibly innovative device to market in terms of our new iPhones and they figure out how to take it a to factory and make a billion of them. Well, that's basically what our approach is. It's just we're making lasers and targets and bringing those together into a plant.
- [33:18]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Jeff, over a period of many years you came on this program as the leader of a public company whether the stock was up, down or sideways. And in difficult moments right now, software, which was your former love, former domain, is having a difficult moment because people are concerned that I will just render it obsolete. Would you just tell me what you're making of this? That moment and you know, your former company, but the field.
- [33:42]
Jeff Lawson
Yeah, absolutely. I mean I did make this call back then which was to say that I believe that software as a service companies would struggle in this era. Not because people are going to go ask Claude to go just make them their own SaaS. I don't think that's the reason, but because per seat pricing is going to be a big challenge. In fact, services that are back end infrastructure APIs like Twilio is, I think those are the services, services that win because they provide the services that agents are going to be able to plug into and be able to, you know, build all sorts of new and interesting use cases. But I think the idea that you've got a workflow that's based on the number of employees you have doing that workflow, I think those companies can get disrupted and I think that's what you're seeing in the markets right now.
- [34:19]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
And Jeff, is it an overreaction from your perspective because many are just throwing everything out baby with bath water rather than being discerning about whether this is a platform engagement, whether or not it's just a change in the way of pricing the offering in the future rather than having to rebuild from the ground up.
- [34:38]
Jeff Lawson
Well, I'm firmly in the camp of not throwing away babies with bathwater and so I think that over time investors will discern which companies are well poised for success in this era as well as which ones are going to struggle because they have the innovators dilemma based on the pricing models.
- [34:52]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Jeff Lawson, Co Founder, CEO of Inertia, former CEO and co founder of Twitter really appreciate all of that. Thank you very much Carrie.
- [34:59]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
More news yeah, it's time now for talking tech up ED and first up AI humanoid robotics startup Actronic raised $520 million in a new funding round, valuing the company more than $5.5 billion. Now the fresh capital will support the commercialization of its Apollo robot and help expand the scale ITS systems. Plus Chinese AI firm Zhipu says it is set to release GLM5, an upgrade to its flagship model with a new version is designed to handle more complex coding and agentic tasks, putting it in direct competition with anthropics. Claude Opus GP says GLM5 will officially roll out on Thursday. And China's top chip maker SMIC is warning that the surge in AI chip spending may be pulling forward years of future demand, increasing the risk that some datacenter capacity can ultimately sit idle. Air related infrastructure investment investment is projected to exceed $3 trillion over the next five years. That's according to Moody's Ratings and okay.
- [35:56]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Coming up, we'll discuss Lyft's earnings with Lyft CEO David Rischer. This is Bloomberg Tech.
- [36:09]
Michael McDermott
Sound familiar?
- [36:11]
Jeff Lawson
At Mattress Firm, we understand there are many problems that can keep you up at night, like snoring, aches and pains or sleeping hot. Our sleep experts have the unrivaled know how you with a mattress that can help. And now at Mattress Firm save up to $700 plus get a free adjustable base with select Sealy mattresses for the great sleep you deserve. Visit Mattress Firm. We make sleep easy. Restrictions apply. See store or website for details.
- [36:38]
Eva (Ritz Carlton Yacht Collection spokesperson)
Hi, it's Eva and I think it's about time you discovered the world's first luxury hospitality brand at sea, the Ritz Carlton Yacht Collection. Imagine setting sail on an all inclusive voyage where every moment is entirely yours. Explore the Amalfi coast, the islands of Thailand, or Alaska's glacial fjords and the lagoons of French Polynesia. Or maybe just stay aboard and indulge in a spa day, dining from Michelin starred chefs and kayaking directly from the exclusive marina platform. There are so many possibilities and so much time to relax every journey. Unlike the rest The Ritz Carlton Yacht Collection. Learn more at Ritz Carlton yachtcollection.com Reese's Peanut Butter Cups.
- [37:22]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
They go perfectly with music, podcasts, and.
- [37:26]
Michael McDermott
Welcome back to the show. Even nature sounds. Oh, and the thing where someone crinkles.
- [37:32]
Jeff Lawson
Tissue and whispers at you.
- [37:34]
Mandeep Singh
Hello.
- [37:35]
Michael McDermott
Look, I'm not here to judge what you listen to. I'm here to judge you for not.
- [37:40]
Jeff Lawson
Eating Reese's while you listen to it.
- [37:43]
Michael McDermott
Reese's actually, go back to the nature sounds. Nice. Yeah, that's really nice.
- [37:57]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Okay. Shares of Lyft are down around 15% on track for their biggest drop since August of 2024. The stock's under pressure, but in the company's earnings. The company kind of set out on working on a global global expansion and new product offerings. Lyft CEO David Richer is here with us in San Francisco. I want to go to the core business because, you know, I'm going to get to Robotaxi shortly. You know, like the things that are good for you are black chauffeured rides, airports. Those are higher value. And so like my interpretation of reading all the analyst response at least is that they looked at the kind of profit outlook and said that's a bit below what we expected. What were the factors behind that if those kind of high value segments are doing great?
- [38:37]
Michael McDermott
I mean, it's so it's a good question. Right. Look, we had a blowout quarter, so record bookings, accelerated, record profits, never been higher. Record cash flow, record customers. Okay? So all that is really good and what it shows is that customer obsession is what drives profitable growth. Now, there's no question it sounds like analysts are looking at things like margin, but as you just pointed out, a lot of our biggest growth is actually in the highest value, most, its highest margin modes. So we've got a lot of conviction that we're in a good place and only getting better.
- [39:05]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
You and I spent some time together at the end of last year and we went kind of a bit deeper on the Robotaxi plan. Yeah, it's through partnerships and it's leveraging what you believe is a strength in fleet management.
- [39:17]
Michael McDermott
That's right.
- [39:17]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Succinctly update us on everything that's due to happen then, please.
- [39:21]
Michael McDermott
Oh, my God. I mean, this is going to be a big year for self driving cars. Right. And let's start with sort of the big picture. When self driving cars come on to a network like ours, it tends to expand the market. And you would expect that because it's a cool new product, it's reliable, you know, you can kind of space out. You can text and not worry about a driver overhearing a phone call, something like this. So that's really good. Okay, so then what happens is you got to make sure that you're well positioned with all the best players in the market if you're on. You know, in our, in our business, we are, we've got way more partnership, as you know. We've got a Baidu partnership that we've just announced is going to be live in London later this year here. We just worked out an agreement with the city of Hamburg in Germany to be the first Robotaxi provider there. So that's wonderful. So you've got the partnerships, you've got the cities lined up and now you've got to be able to manage this fleet. And as you just said, this is the sexy part, but it's so important. You've got to be able to make sure these cars are charged, clean and ready to go. We have a Flex Drive subsidiary that's been doing that for years. We think we're the best in class and our goal is to be maybe 5% cheaper than any other place with higher quality to put robotech prices on the network cheaper.
- [40:21]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
That doesn't immediately make me think profit driving, David, in that way. And so like, talk about your targets. You've got this one billion dollar by 2027 and Bloomberg Intelligence warning, that looks pretty ambitious at this stage.
- [40:35]
Michael McDermott
Well, so when I say cheaper, I mean the lowest cost way. Right. And that's the thing is I want our cost position to be really good to your point, like our goals, which we set out a couple of years ago, our top line growth of 2015%, mid teens, year on year, we're very much on track for that. And bottom line growth, getting to $1 billion of adjusted EBITDA, which would be 4% margin. Very much on track for that. But what it means is you've got to be really smart about managing your costs. You've got to be really good about kind of managing your quality. And we're doing really well on both. We've just made progress. As I say, we've had our best profitable, highest profitable quarter just this past Q4.
- [41:09]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
I think that's of all go back to the AV world because there is this ongoing anxiety that the competition is just going to get so fierce. Are you set up to win? What are you saying to convince the investor base they shouldn't be selling off your shares like this?
- [41:24]
Michael McDermott
Yeah, I think that the way to think about EVs is they're going to be good for the whole industry, the rideshare industry, because as I say, it's a good new product at a lower cost. And I think why we are particularly well positioned is, is we have demand that runs to the 2, 3, 4 million people a day level. So we have lots of demand for this. And you know what they want? They want a fast, reliable pickup that's going to get them where they want to go. Sometimes they'll want to be driven by a human, sometimes by a robot. Just kind of depends. And so this idea of a hybrid network, I think it's a real strength, particularly when you, when you sort of marry it with fleet.
- [41:54]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Is there a case study for you to reflect on in real terms then, like Atlanta may mobility? What are you learning there? Yeah, by the way, what's the statistics status of it in terms of like fully driverless, etcetera?
- [42:04]
Michael McDermott
Yeah, for sure. So we're in Atlanta, we have, we still have safety drivers in the car just to make sure everything is going well. And you know, because we want this to be an incredibly high quality, incredibly safe experience. What we're learning is people love it. I mean, this is the interesting thing. People before they, when they hear about EVs, are often a little skeptical. They sound like, I'm not sure I'm going to be excited about taking a car that's driven by a robot. You know, five minutes later they've kind of fallen in love.
- [42:25]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
And that's kind of the. Is high. Like what's the metric risk?
- [42:27]
Michael McDermott
Yeah, super high. Super high, basically. I mean, as much supply as we can get, we can put on the road because there's plenty of demand for these things. I think if you want to look at case study for broadly speaking, maybe look at the transition from DVDs to streaming, right? It's a similar sort of technology shift. And look how big streaming is today compared to DVDs the past. It's going to be that kind of wave.
- [42:47]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Steven, you know what else I love a lot of New Yorkers love is the bikes. And boy, has this snow made things really difficult. Hate to get personal, but I mean, look at these pictures. I am really struggling to get my bike out. I'm really struggling to get it back in. How much of a hit is this to having to refund customers? How much are you thinking about what the city and you can work together with to make this a really costly business for you in these sorts of temperatures?
- [43:12]
Michael McDermott
Yeah, I mean, look, this has been a big, big learning force. Obviously there's a huge snowstorm. I'm told that we're about 75% dugout right now, which is amazing. But that takes a lot of work, a lot of just physical labor to make sure the bike stations are available. I think people have taken something like half a million rides in the last couple of days, which is pretty amazing considering the cold and the snow. Anyway, working super closely with the city on it, really making sure that the availability of these bikes, which as you say, we run behind the scenes as high as we can get it.
- [43:38]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
I asked Bloomberg Tech producer Justin now to pop his head out the window and check because like here in the bay, obviously we don't get confronted by snow. But you know, I went back and read my history about the kind of micro mobility part of the business. It is a smaller part revenues basis, but clearly it's still important to you.
- [43:55]
Michael McDermott
It is.
- [43:56]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
How important?
- [43:57]
Michael McDermott
Yeah, I mean, look, as you say, financially it's relatively small, but this is the future. Look, when you talk about AVs, that's part of the future. When you talk about micro mobility people, once people get on an E bike, it's, I say this sometimes it's kind of like meeting a person who's just started pickleball. Like they have to tell you about.
- [44:10]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
It, how amazing this thing is.
- [44:11]
Michael McDermott
Same with E bikes, you know, so it's like, so this is sometimes you can see the future and if you look out three, five, ten years, you're going to see more people on E bikes. You're going to see more people in self driving cars and you know, and of course you're also going to see people in human driven cars. And that's what we're building.
- [44:24]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Just a personal request. I really want less E bikes, one of the bog standard ones. We all fight for them here. Lift. David. Richard, so appreciate your time, but I think about my health, David. I got to think about my health. Thank you.
- [44:36]
Michael McDermott
Gotcha.
- [44:37]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Meanwhile, coming up, we're going to head to a discussion on Instagram. Adam Mosseri is set to testify today in a jury trial examining whether social media companies built their products to be addictive for kids. More on that next. This is Bloomberg Tech. Later today, Instagram head Adam Mossari will become the first social media boss to take the stand in a case alleging that products like those from Matter and YouTube are designed deliberately to addict users. Let's discuss this in Bloomberg Social Media reporter Alex Levine. There are plenty of cases, plenty of claims, but it really does start in L. A today with Adam Mossari.
- [45:30]
Carmen Reineke
It does. And I think the interesting thing is we've have seen these conversations play out over so many years at this point. Mosseri testified before Congress already, as did many of the big tech CEOs, including some of them like Zuckerberg, who we're going to be seeing testify in this trial. Mosseri testified half a decade ago and we're still sort of talking about the same things. I think the key thing that is different now is that most of the past legal challenges to social media companies have centered on the content that users have posted. And for the most part, tech companies have been able to wiggle their way out of any, any accountability for that because of a little known statute called section 230, which basically just lets them off the hook legally for things that people post on the platforms. The key difference now is that it's not about the content that users are posting that they're arguing is harmful. What they're arguing is harmful is actually the design. So they're making this a personal injury. They're making personal injury claims here, saying that it is the algorithm that prioritizes engagement, that it is the scrolling, that that is what is that, that it is personal injury. The personal injury being like addiction, being body dysmorphia and all these issues we've heard about and that, that it's more about that than it is about the actual content.
- [46:39]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Alex, that's the bit that I want to understand. So in this case. Right, just go a bit deeper. The plaintiffs are arguing what has happened to them. And of course, like when Mr. Mosseri takes the stand, what is it that the companies themselves, themselves or the platforms are arguing in response about the addictiveness or not of the design of the platform.
- [46:58]
Carmen Reineke
So the, a lot of the claims that, you know, we've been hearing over the years about the sorts of mental health harms to young users are going to be some of the same things that we are hearing about in this trial. One of the plaintiff's lawyers just, just, I believe earlier this week was, was describing these platforms as if they're a digital casino. So we're going to hear of a lot, lot of the same sort of addiction, you know, addiction claims and sort of what that has led to from a mental health perspective. I think what the company is really going to be focusing on and that we might hear from Mosseri today is that they, they believe that they have, you know, the sorts of programs and features and tools in place within the company that are really showing that they do care about protecting children. I think though, that it remains to be seen. It remains to be seen. Sort of what else is in the testimony today.
- [47:47]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
It's also about legal precedents. Right. Because we're going to have matter. But then we're looking to tick tock and others.
- [47:54]
Carmen Reineke
Sure. And I think, and so TikTok and Snap settled their pieces of this. They're not off the hook for, for, you know, other, for, for like other parts of the trials that are going to be playing out through the rest of the first quarter or second quarter. But I think that what we've seen is that a lot of times these companies are just sort of try to throw money at the issue to make it go away. And I think, and I think here we're, we're right. This may be the start of a much longer process.
- [48:19]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Bloomberg's Alex Levine, thank you very much. Now that does it for this edition of Bloomberg Tech.
- [48:24]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Don't forget to check out the podcast. You can find it on the terminal, online, on Apple, on Spotify. This is Bloomberg Tech.
- [48:34]
Eva (Ritz Carlton Yacht Collection spokesperson)
Hi, it's Eva and I think it's about time you discovered the world's first luxury hospitality brand. At the end, see the Ritz Carlton Yacht Collection. Imagine setting sail on an all inclusive voyage where every moment is entirely yours. Explore the Amalfi coast, the islands of Thailand or Alaska's glacial fjords and the lagoons of French Polynesia. Or maybe just stay aboard and indulge in a spa day, dining from Michelin starred chefs and kayaking directly from the exclusive marina platform. There are so many possibilities and so much time to relax every journey unlike the rest, the Ritz Carlton Yacht Collection. Learn more at ritzcarlton yachtcollection.com@cvs it matters.
- [49:18]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
That we're not just in your community, but that we're part of it. It matters that we're here for you when you need us, day or night. And we want everyone to feel welcomed and rewarded. It matters that CVS is here to fill your prescriptions and here to fill your craving for a tasty and, yeah, healthy snack. At cvs, we're proud to serve your community because we believe where you get your medicine matters. So Visit us@cvs.com or just come by our store.
- [49:47]
Michael McDermott
We can't wait to meet you.
- [49:49]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
Store hours vary by location.
- [49:53]
Michael McDermott
Janice Torres here and I'm Austin Hankwitz. We host the podcast Mind the Small Business Success Stories produced by Ruby Studio in partnership with Intuit QuickBooks.
- [50:02]
Eva (Ritz Carlton Yacht Collection spokesperson)
We're back for season four to talk.
- [50:04]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
To some incredible small business owners.
- [50:06]
Michael McDermott
The big thing about working at tech is that it's ever evolving, ever changing.
- [50:09]
Bloomberg Host (possibly George Ferguson or Mandeep Singh)
Everyone's a rookie.
- [50:10]
Bloomberg Host (possibly Caroline Hyde or Ed Ludlow)
That's how fast the industry is changing.
- [50:12]
Michael McDermott
So what I'm really excited about is to be part of that change. So listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.