Loading summary
Transcript88 lines
- [00:00]
Caroline Hyde
Cybercriminals. Count on chaos. Count on Veeam to stop them fast. Partner with them and get 24. 7 ransomware support from the first red flag to full recovery. Whatever the world throws at your data, it's all good. Learn more@veeam.com that's VECOM introducing the all.
- [00:20]
Commercial Announcer
New Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com dothatwith acrobat running small and.
- [00:51]
Amazon Ads Representative
Medium sized businesses is hard work. Business owners need to be sure their ads are working just as hard as they do. And Amazon streaming TV ads makes your marketing dollar work harder. With Amazon ads, trillions of insights help small and medium businesses reach the right customers that matter. Your ads will show up during the shows the people are actually watching and measurement tools show you what's working the hardest. Gain the edge with Amazon Ads.
- [01:21]
Commercial Announcer
Bloomberg Audio Studios Podcasts Radio News.
- [01:30]
Caroline Hyde
Bloomberg Tech is live from coast to coast with.
- [01:34]
Commercial Announcer
Caroline Hyde in New York and Ed.
- [01:36]
Caroline Hyde
Ludlow in San Francisco. This is Bloomberg Tech. Coming up Amazon and Google probed by the US FTC over their search advertising practices. Plus OpenAI is getting closer to its for profit restructuring. This is it also plans to spend billions of dollars in the UK on datacenter investments alongside Nvidia. And we to Palo Alto to sit down with Robin Denholm, Tesla Board Chair to discuss the ambition to be the most valuable company in history. But first we check in on these markets which are also at the most valuable in history. For the NASDAQ 100 we're up 4. 10 of a percent. It is another record high. We're up almost 2% on the week. There has just been relentless desire to get into the AI focus of companies and we drive higher when it comes to tech stocks. Dig in to the really breaking news at the moment though once again top of mind is regulatory concerns but not so much on the share price impact. Looking at Amazon trading flat on the day, Alphabet just down 2. 10 of a percent. But there are further steps coming from the FTC to perhaps bring to heel some of the domination of these companies, particularly in areas of the market like advertising. We Bring in Bloomberg's senior tech editor Mike shepherd on this. And it's not affecting the shares, but it must be of concern to the companies.
- [02:51]
Mike Shepherd
Well, it is. And Carol, the key takeaway here is that there is no sign of a let up for big tech under the Trump administration. The Federal Trade Commission is opening new probes into whether Amazon and Google have misled advertisers who are placing online ads on their services. And this is an area of concern down the road. This will take a long time to unfold. The consumer protection unit is exploring this. And we have to remember that these ads are not something like you used to buy in the old days. These happen in seconds through online auctions that the agency will be scrutinized. Specifically, they want to know whether the companies are properly disclosed, exposing both the terms and the pricing to advertisers who are seeking to place these ads. This investigation is expected to take a fair amount of time. That could be why we're not seeing much reaction yet in the shares. Perhaps investors are getting used to the idea that the government is going to be in these companies grills for some time. And this really, as I said, Carol, is one of the latest fronts. Google was found to have illegally monopolized the search market and some search advertising. And Amazon too is facing its own antitrust trial coming up in 2027. Carol. So this is something we'll be watching closely here in Washington, Bloomberg's Mike Shepherd.
- [04:11]
Caroline Hyde
Great wrap up. We thank you. Meanwhile, OpenAI said it's closer to converting into a more traditional for profit company. Nearing the resolution of negotiations with top shareholder Microsoft and outlining terms of at least $100 billion in equity for its nonprofit arm. Now, plan changes will give the existing OpenAI nonprofit control over a new public benefit corporation and provide the nonprofit with an equity stake that would make it, quote, one of the most well resourced philanthropic organizations in the world. Meanwhile, we've also got leaders of both OpenAI and Nvidia and plenty more planning to pledge support more 4 billions of dollars in the UK datacenter investments when they visit the country next week. We want to turn to Bloomberg Intelligence senior analyst Mandeep Singh. Look, there is an anxiety perhaps lifted on Microsoft shareholders here that the relationship with OpenAI is still there, particularly for inference compute. Just talk to us about how this memorandum of understanding is laying out.
- [05:10]
Mike Shepherd
Yeah, I mean especially in the context of the $300 billion deal that OpenAI signed with Oracle, which it seems like is predominantly for training and some inferencing. But the fact that Microsoft signed this agreement shows that or not signed it but well signed a manner the memorandum of understanding. And look, I think in this case OpenAI has benefited a lot in terms of the being that early adopter of LLMs and getting that enterprise data through Microsoft. So it's in both of them's interest. But I still feel Microsoft needs OpenAI more right now given all the compute kind of shakeups that are going around. And from that perspective it doesn't surprise me that OpenAI, given they have to raise, you know, that $300 billion and pay to Oracle, they need to be a separate entity who will finance to a nonprofit entity. So all that points towards OpenAI really betting big on scale. Maybe they feel that GPT5 they have another product breakthrough that they feel they want to scale further. That's why they are betting big. But clearly it's coming in at a time where they are going after scale.
- [06:22]
Caroline Hyde
And they're going to get scale in the UK as well in terms of compute. Mandeep Singh and Bloomberg Intelligence. We thank him. Coming up, a sit down with Robin Denham, Tesla Chair of the Board to discuss Tesla's business, Elon's leadership and so much more. Stay tuned. This is Bloomberg Tech. Cybercriminals Count on chaos. Count on Veeam to stop them fast. Partner with them and get 24. 7 ransomware support from the first red flag to full recovery. Whatever the world throws at your data, it's all good. Learn more@veeam.com that's V E E A.
- [07:01]
Commercial Announcer
M dot com introducing the all new Adobe Acrobat Studio now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal. Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time. Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com Dothatwith Acrobat. Hiscock Small Business Insurance knows there is no business like your business. Across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance.
- [08:10]
Caroline Hyde
Welcome back To Bloomberg Tech. And we now go to Palo Alto where Ed Ludlow standing by.
- [08:15]
Ed Ludlow
Caroline. Tesla's board has made an unprecedented proposal for a compensation package for its CEO Elon Musk. The total award value could be up to $1 trillion, but it is set against mandatory targets that have a high bar, both operational and financial investors. Shareholders are going to vote on that package in November. But many of those shareholders still have questions. To answer the questions, the chair of Tesla's board, Robin Denholm is with us. Thank you Robin, for your time. This proposed package was about Tesla's long term goals as much as it was about retaining Elon Musk. But why is it so crucial to the board's mind that it is Elon Musk that is able to get Tesla to this future?
- [09:03]
Robin Denholm
Well, thank you, Ed. I think it is a pivotal time at Tesla and also in the world. I mean AI and autonomous and the application of AI is transformative technologies. And we believe at Tesla in big ambitious goals. And so Elon put out the Master Plan 4 on the 1st of September, very auspicious day I think in terms of putting out the, the vision for the company for the next decade or more. And AI and autonomous is at the front and center of that, both in the vehicles but also in our optimus lineup and what we're doing from a robotics perspective as well. And so having the board's responsibility is to look at who the CEO is for the next period of time. And we believe that Elon is the right CEO for Tesla over this transformative period of time. And our view is he's a generational leader. There aren't any other people out there like Elon who can actually lead the company over this next decade or so. And so once you decide who the leader should be, you need to put in place a compensation package to incent and motivate him to actually deliver against.
- [10:26]
Ed Ludlow
The ambitious motivational piece is interesting. In the course of the Proxy, as you read it, a negotiation plays out, doesn't it? Seven or eight months. But there were sticking points on both sides. What were they?
- [10:38]
Robin Denholm
Well, obviously in any discussion around the future of the company, but also the future of an individual in terms of what motivates them. It's very important to understand that. And from a board perspective, from a special committee perspective, as we've outlined in the proxy, we had a very fulsome process. We had more than 10 meetings with Elon in terms of understanding what were his motivations, what does he want to do over this period of time. And having worked with him now, I've been on the board for 11 years and Kathleen Wilson Thompson, our other amazing special committee member, has also been working with him for the past six or seven years as well. And so from our perspective, seeing him in the boardroom, but also understanding, understanding what motivates him, it's things that other people can't do. It's what the company could do that no other company could do. So those types of things are what are in this plan. And so as you said in the outset, it is a zero compensation package unless he delivers against pretty ambitious goals for the company.
- [11:46]
Caroline Hyde
Ambitious goals that include 20 million vehicles, that include 10 million FS, that think about a million robots and robotaxis. Robin, tell us from your experience with the 2018 pay package are in the investor base really wants to understand how structurally this is different.
- [12:05]
Robin Denholm
Yes. So for us, the framework of the 2018 plan worked very, very effectively. And so this, this package, this framework that we've put in place for the 2025 proposed compensation package has 12 tranches, 12 market cap goals, where the top goal is eight and a half trillion dollars and we're just over $1 trillion today. The first milestone on the, on the market cap side is at $2 trillion. So we've got almost double the size of the company before any of the market cap goals are actually achieved. And then it increases by half a trillion up into the last two tranches where there's a trillion dollar jump each time. And then on the operational side, to your point, Caroline, they're ambitious where just over 8 million cars that have been produced and delivered at Tesla. The milestone on the vehicle side is 20 million vehicles, 10 million FSD paid subscription areas. So, so to me, these are ambitious goals, not to mention what we're, what we proposed in terms of the, the goals around of our robotics areas, our optimus and bots, a million of those and so, and robotaxis. And so to me, it really brings the Master Plan 4 to life within this compensation package because they're the goals that Elon has. It's the goals that the company has as well.
- [13:38]
Caroline Hyde
Some had worried that Elon's goals had turned more towards politics. And you draw him back from that within the proxies policy and he's agreed to wind down his political activity. How do you define political activity, Robin?
- [13:55]
Robin Denholm
I think, you know, from my perspective, this is a package that really motivates Elon. So having him front and center at the company and delivering against really ambitious goals to me is great for, for him it's great for, for the company. It's also great for shareholders. And as we've outlined, the shareholders, you know, in this proposal actually win, you know, very extensively with that market cap at eight and a half trillion dollars in order to achieve this, this compensation package. To me, that actually is one of the things that all shareholders will benefit from by. And so from a politics perspective, obviously we're in a democracy, so everybody gets to voice their points of view. I think Elon, having served as a special government employee, he obviously completed that activity and he is back and front and center at the company these days.
- [14:59]
Ed Ludlow
But did those reassurances go as far as to Elon Musk agreeing not to, to specifically participate in any one political party, take another government role, extend to whether or not he makes donations in a political cycle?
- [15:14]
Robin Denholm
Yeah, I mean, what he does from a personal perspective, in terms of his political motivations, et cetera, is up to him. I mean, clearly from our perspective as a board, we're measuring him on results and measuring him on what he does as a, as a CEO of Tesla. And our view is he's delivered big time in the past and, you know, we look forward to him doing that in the next era.
- [15:40]
Ed Ludlow
Robyn, you've just been unequivocal about the future of the company and the inclusion of those operational milestones on Optimus and Robotaxi. But when the proxy hit, many, many shareholders went straight to the bullet point on the 20 million vehicle deliveries. How much was that informed by a. The board wanting Elon Musk to focus on the bread and butter business in the near term. But also did you have some data that sales specifically were being impacted by Musk's political activity?
- [16:11]
Robin Denholm
Yeah, I would say that vehicles are our mainstay of our business today. So is the energy business. A lot of people forget about this brilliant business that we have on the sustainable energy side. And so, so from from our perspective, from a board perspective, they are the revenue drivers of the company in the, in the near term, but obviously in the plan, you can see that there are other areas of revenue activity and profitability and growth for the company in what we're doing with AI as it relates to Optimus, but also FSD and, and beyond. And you know, we've put pretty ambitious goals out there in terms of ebitda. And so I think, yeah, the profit in terms of having four operational goals around product, but also for pretty extensive, six actually pretty extensive goals around the profitability of the company as well. And you can't do that without selling fabulous products that customers want fabulous products.
- [17:16]
Caroline Hyde
That people have to want to buy. And sometimes because of the brand or the person who built them. I just ask a little bit again, did you think sales were hit by his political activity?
- [17:28]
Robin Denholm
So my view is, over the long term, people buy things that they really love and, and Tesla vehicles, things that people really love. You know, it doesn't matter who you are, the minute you get into a Tesla and you drive that car, you, you know what that experience is like. And so from our perspective, focusing on products that customers love, that our consumers, both in the vehicle space and in the energy space, really do enjoy using and appreciate in terms of not only the technology aspects, but also the how the, how the vehicle responds, the user interface, those types of things. So again, we're a products company. We love building things that people love.
- [18:17]
Caroline Hyde
And we can see the future products just behind your shoulder as well. With Optimus and Robin, what's been so interesting is the push from Elon's side in the 10 times you met him in the negotiations and indeed on X's platform, to have more voting control and have more ownership of shares. Can you tell us a little bit about how you weighed that as a board and as the chair?
- [18:42]
Robin Denholm
Well, clearly Elon's been very public in terms of the things that he motivates him and what, what actually he wants over this next period of time. So as a special committee, as a board, that's actually easy to work with because when you're designing a compensation package, you're looking for the things that will motivate an individual to do something above and beyond the mainstay. And so clearly voting rights are important to Elon, particularly in this era, as we're developing products around artificial intelligence, autonomous, those types of things where we could use products for good as opposed to any nefarious activity with the products. And so he's been very clear on that. And so, so for us, as a special committee, taking that information and then working through what were the right goals in order for him to earn those voting rights is really important. And again, I'll say again that it's a zero plan if he doesn't achieve the goals. So each tranche is worth, you know, 1% in terms of voting rights. They kick in when he actually hits the goals, both an operational goal as well as a market cap goal. And then the economic benefits are delayed beyond that period of time, which is a difference in the plan that we structured in 2018. So bifurcating the voting rights versus the economic benefit actually has a Huge retentive effect. And so from our perspective, that's one of the key, key levers that we used in the plan.
- [20:31]
Ed Ludlow
You're joining us on Bloomberg television and radio around the world. This is Bloomberg Tech live at Tesla in Palo Alto where we're speaking with the chair of Tesla's board, Robin Denholm, about the proposed compensation package for Elon Musk that investors will vote on in November in the proxy. Again, it's very clear, if one is to go and read it, that Elon Musk essentially said to the special committee that my priority is the voting power, but you know, if my motivations aren't met, I am interested to go and pursue other interests. What was the kind of absolute for the board on your side? You know, I'm trying to understand both Caroline's question on, you know, I think Musk wants the voting power so that he can focus on this future, but in return if to hand over that voting power, what is it, Robin, that you wanted to ensure?
- [21:27]
Robin Denholm
Yeah, I think, you know, as I said before, Elon's a unique individual. He can apply his time, effort and energy into different endeavors. He has different endeavors out there. What the board sought to do through this plan is to actually have him focus, you know, an outsized proportion of his time, effort and energy on Tesla because when, when he does that, shareholders win.
- [21:54]
Ed Ludlow
Might I just add that what's kind of missing from the proxy, it's not codified, but you are calm, sanguine, comfortable with him also being the CEO at another company, private company, or having another leadership position across multiple companies. That's okay.
- [22:09]
Robin Denholm
Yes, it is okay. It is how he's delivered in the past. And you know, from, from our perspective, actually having his creative energies in various endeavors that are outside of Tesla actually helps Tesla. Yes, I know that sounds perverse and people don't really understand that, but having worked with him now for 11 years, it actually benefits Tesla with him doing things that are not in the mission of Tesla outside of Tesla, both from a resource perspective, but also from a motivation perspective. And so I think to really understand that point is to understand Elon and how he actually works. And so that's what the board sought to do through this plan succession.
- [22:56]
Ed Ludlow
The latter tranches directly relate to Elon Musk's participation in succession planning and the successful implementation of that succession planning. You started this conversation by saying there isn't anyone like Elon Musk, given that this is a decade long plan. So maybe succession after a decade is more timely than. Do you have confidence as A board, there are leaders already within Tesla that could potentially step up when he's gone. Or are you already starting to speak with Elon Musk about external candidates, those that are nearest to him, you know, in that level of extraordinary ability that you see in him?
- [23:34]
Caroline Hyde
Yeah.
- [23:34]
Robin Denholm
So clearly succession planning is a very important responsibility for the board and we take that responsibility very seriously. I meet with investors all the time and I will say it's probably my number one question that I get in terms of consistency of feedback from investors around succession planning. And so from our perspective, we obviously have a plan if something untoward were to happen in the near term, but we also want to have a, and do have a longer term succession plan. Now this plan, this compensation plan is a 10 year plan. Elon will be 64 or close to 65 by the time this plan completes. At some point he will want to ease back. Maybe he doesn't believe that today, but at some point he may want to do that. And so we want to make sure that we have the right leaders in place to do an orderly transition at some point in the future. And so making that part of this plan was a very deliberate activity. And obviously he was part of that discussion as well. And he is part of the discussion on an ongoing basis that the board has around succession planning. The talent that we, we have, we have extraordinary talent inside of Tesla across many facets of the company. And so making sure that we're continuing to develop those leaders but also bringing in talent. And you know, that's the other part, it's in the report as well, and that Elon is a talent magnet, particularly on the engineering side, that we have extraordinary depth in the AI space, in the engineering space, in the manufacturing space, and largely because he, he works with them day in and day out. And so that's, that's one of the unique aspects to this and also one of the unique aspects to the plan is to make sure that we have that visible succession plan as we near the end of this decade long compensation package.
- [25:44]
Caroline Hyde
Robin, what you just said was really interesting. The fact that there is a plan in place if something untoward would happen. Can you spell out what that would look like in the here and now?
- [25:55]
Robin Denholm
No, I won't go into details here, but from my perspective it is a responsibility the board takes very seriously. And you know, Elon has participated in that. We have, we have leaders in geographies that run large portions of the organization. We have a really extensive executive team. And as I said before, Elon works very closely. He's a hands on leader both in the engineering spaces, but also across the board from an operational perspective as well.
- [26:30]
Caroline Hyde
And I realize that was a sensitive question to ask and forgive me, I will ask another sensitive one because it is a tough time of sensitivity. We've just had the death of Charlie Kirk. We've had Musk himself on his own platform X raising questions, well, about his own security and the fact that he is focused on it. I know it's something that you are focused on. What is the view board's view on terms of upping his own security right now?
- [26:53]
Robin Denholm
Yes. So very tragic circumstances this week. I think there isn't anybody in a boardroom that isn't touched by what's happened with Charlie Kirk. And also, you know, there have been other incidents, you know, in the executive world over the last 12 months that I think every board stops and thinks about security of their CEOs, but also their executive team. And it's no different at Tesla. We have been focused as a board on Elon Security for many years now. He's been very public and very much out there. And so, so it is something that we take very seriously. He takes it very seriously as well. And so, so again from a board perspective, it is something that we've discussed at length.
- [27:47]
Ed Ludlow
Robin, there are a number of other proposals in the proxy. One is a shareholder initiated proposal for Tesla to invest in xi. It is non binding. The board doesn't take a position. But how does the board think about it? For example, example, if investors would say no, we don't want Tesla to make that, that investment, would the board still look to pursue it independently?
- [28:09]
Robin Denholm
So clearly there is 16 proposals overall in the proxy. I know we've spent quite a bit of time on, on one important one on compensation. But the XAI proposal is a shareholder proposal that has been put into the board. We value our shareholders input and, and the reason why we have not put a recommendation is we want to hear from shareholders in terms of what their views are if as to whether or not we should make an investment in xai. One thing I will say at the outset is there's a lot of misunderstanding of AI in the, in the marketplace. It is not one thing, okay. It is a range of technologies. What Tesla is doing today with AI is quite different to what XAI does. XI is working on fundamental areas in, in, in AI, but it's also working on large language, large language models. That's not what Tesla is doing. As you can see behind me with, with Optimus, we're taking Real world application of AI and putting it into physical products to actually empower those products to do things. So with, with Optimus, it's very visual. You can see what he does in terms of visualizing things and then actually doing things. And the same with the vehicle. So what we're doing with AI within FSD is actually taking that visual data and using that to drive the car. And so that's quite different to what AN XI does.
- [29:47]
Ed Ludlow
Robyn, a very quick question and then we will end on the final proposal for the compensation package. This week Bloomberg reported an investigation about some fatal incidents where passengers or those inside the vehicle had difficulty using the manual release. Now, as you know, I drive a Tesla vehicle, you drive a Tesla vehicle. All I want to ask is, is the board aware of that reporting and will it raise that issue with Elon? And is Tesla looking at the design of the dual manual override?
- [30:17]
Robin Denholm
So I can tell you that the board takes very serious, seriously any safety related reporting or any incidents of any type globally in terms of what we look at. But in the Tesla there is a manual override already. And in fact it's been reported on that you can actually manual open the door if there is a power event or anything like that. So safety is our number one factor in terms of what we're doing.
- [30:48]
Ed Ludlow
And Tesla ranks very highly on safety, very highly.
- [30:51]
Robin Denholm
It's also why we're pursuing FSD because you know, just in North America there are 50,000 deaths on the road. That's 50,000 too many. And so, and we know with the data that we have for all for FSD that it's actually safer than a human driver because of those 50,000, 94% are human error. So if you can eliminate 5% of that, that's a lot of deaths that you can avoid. And so again, safety is one of our key priorities in any aspect of the business.
- [31:25]
Ed Ludlow
Let's end on this unprecedented proposal and I'm going to ask you this. What would happen if, to Tesla if Elon Musk left tomorrow? You know, in order to try and help shareholders understand the board's motive here in keeping him. But there was one specific question from our audience which I really appreciated. Why does Elon need to be CEO? Could he not take on a more technical role?
- [31:50]
Robin Denholm
Well, that, that is contemplated in the, in the package, just like in the 2018 package. We want his service at the company. He can be the CEO, but he can also be another in another role, whether it's Chief Product Officer or that type of thing. We've contemplated that before. But to me I think the really key thing is that shareholders get to vote on the future of the company, not just on a compensation package. The compensation package is the institution substantiation of the goals and ambitious, the super ambitious goals that we have as a company. And so I think with this proposal, it's really up to shareholders what the future of Tesla looks like.
- [32:34]
Ed Ludlow
Robyn Denholm, Chair of Tesla's board There is a key shareholder vote in November on what is, we've said it, an unprecedented proposal on a compensation package for Elon Musk set against very high bar deliverables. But what a conversation, Caroline, to inform the understanding of some of those deliverables.
- [32:55]
Caroline Hyde
Back to you New York and ambitious plan to be the most valuable company in history. What a wonderful chance to be there with Robin Denham. And we leave you. Thank you very much indeed. Let's check in back on these markets because Tesla is having a good day, is up 5.4%. It's been up yesterday as well, some 6% were riding high. And remember a trillion dollar company with the aim of becoming a 2 trillion at least for the first tranche of that voting and indeed that money going to Elon Musk. But I want to focus in on also what's happening elsewhere in the markets because we are having a strong day for the Nasdaq. We having a strong day for Paramount and Warner Brothers. What about the discovery now up 15%. We digest that reporting that Paramount under David Ellison and with the help of his family, one Larry Ellison might indeed take Warner Brothers Discovery by the whole lot, not even just the areas of the Studios and streaming 15% elsewhere in the market. We're looking at Apple delaying the launch of its new iPhone air in mainland China citing regulatory approval issues. Let's just get out to Bloomberg's global consumer tech managing the editor Mark Gurman. This seems to be pretty seismic, the fact that they're not going to be selling the air in the China right now, at least it's a big deal.
- [34:06]
Mark Gurman
Because if any market was going to be a hot market for the iPhone air, it is China where they have a lot of fashion forward consumers who want to whip out the latest and greatest, slimmest iPhone, the newest looking phone. That's why iPhones sell in China. Remember they came out with the gold iPhone a decade and change ago because they knew that people in China wanted to buy those types of phones. So this is disappointing in terms of a delay for the iPhone air in China. And it is a bit of a change because just A few days ago, when they introduced the iPhone Air, they said on their website the preorders would begin on September 12th today and it would go on sale on September 19th. So something happened in the last few days that led the company to postpone it. Now, ESIM technology is at the very heart of this phone. Physical SIM cards cannot fit in this super slim 5.6 million millimeter frame. The problem? ESIM is not really ubiquitous or plentiful in China like it is in the US and many other countries. So initially, when this phone was supposed to go on sale in China next week, it was only to be available on one carrier and not even the country's biggest carrier, that's China Unicom. And even more so, anyone who bought the iPhone Air would have to go to a physical China Unicom retail store, which is a bit of a headache. So even if it did launch on time, it wouldn't be so smooth. Maybe they're waiting for them to be able to launch and have a smooth release and maybe they feel like that's the better approach. So we'll see how long this takes, but I'm sure Apple's on the case to get this done quickly.
- [35:34]
Caroline Hyde
Mark Gurman, always with the breaking. We so appreciate it. Now let's turn to other breaking news on a fundraise U.S. satellite bus company, especially a spacecraft manufacturer. It's called Apex. It's just raised $200 million dollars in funding. Brings the company's valuation to over $1 billion. I'm pleased to welcome to the show. Ian Cinnamon is CEO and co founder of Apex. And as always, we ask the money, what are you going to be using it for? Ian?
- [35:58]
Ian Cinnamon
We're really using it to expand the factory that you see behind me right here. So what it really comes down to is there's a massive shift in the industry away from building these very expensive, exquisite systems into moving towards what we call proliferated system system. So how are we launching hundreds of satellites into orbit to really supply for constellations, for commercial applications, government applications and more? And that requires manufacturing satellite platforms at scale. And for us here in what we call Factory one here in Los Angeles, at Apex, before this funding round, we were able to produce about 12 satellites per month out of this facility. And now we're able to up that to about 18. We are continuing to scale that manufacturing though, because the demand is even far higher than that.
- [36:43]
Caroline Hyde
Talk to us about that demand. You're providing essential services basically to all satellites that need to survive in space. I'm interested in as to whether that demand glut at the moment is coming from the government or is it coming more from the private commercial side of.
- [36:56]
Ian Cinnamon
Things, it's a great question. It's actually coming from both. So the one that you know is very out there and we talk about a lot is things like Golden Dome and a lot of the US defense initiatives that are pushing for getting more and more of these capabilities into space. Space truly is the ultimate high ground. We're in the middle of what we call a new space race right now where it's the US against our adversaries and we're not in a position to win unless we increase that manufacturing. So this demand for constellations is very heavily coming from the government side. We're also seeing it starting to emerge on the commercial side as well. Companies like Space X have really pioneered commercial constellations like Space Starlink and others. And now we're seeing a lot of other companies follow suit. Even just today, right, the new Apple products went for sale where all of those iPhones are able to connect to satellites, the new Apple watches connect to satellites. And seeing more and more of those constellation requirements for what we experience every day with consumer electronics, it just continues to grow.
- [37:53]
Caroline Hyde
I mean, it's interesting that there's been a lot of pressure put on Apple CEO Tim Cook to make more in America. You on your website when you go there, you have proudly made in the usa. But how much are you relying on components coming from abroad? How much are you trying to ensure that you're sort of self sufficient here?
- [38:10]
Ian Cinnamon
So we did an assessment as soon as the tariffs came out and we said are we impacted at all? And the impact was pretty much zero. And the reason for that is we really are using US components. But it goes a step further than just US components. Almost everything that we're building we actually vertically introduced integrate and build in house here in our facility and then our expansion facility right next door. So by bringing all of that in house, we really control our own destiny, control the supply chain, are able to ensure that it's not just about building a lot of these satellite platforms, but it's about building a lot of them incredibly quickly.
- [38:43]
Caroline Hyde
To control your own destiny, you don't just need the resources in terms of the production side, but you also need the talent in how easy or hard is that?
- [38:50]
Ian Cinnamon
Right now I have to say we are in Los Angeles, which I consider to be one of the aerospace capitals of the world, right? Just down the street is companies like Space X or Rocket Lab or the Jet Propulsion Laboratory. We have amazing companies around us that we're able to source great talent from. That being said, we always need more people. We are hiring dozens and soon to be hundreds of roles. We are looking to bring on a lot more people and frankly there's not that many people with the skill sets are actually required. So we are very much looking forward to seeing kind of an increased attention towards aerospace and a lot of students studying this in order for them to come eventually join us here at Apex.
- [39:30]
Caroline Hyde
Join you help serve clients that include Anduril, that include NASA. You've talked about how much everyone focuses on the defense and the government side of things, but there is this real spurring coming from private sector. But if you could ask the US Government for one thing right now, Ian, because they are focused on your area, what would it be?
- [39:49]
Ian Cinnamon
I would say it is rethinking how we do acquisition. So traditionally on the government side of things, it's been working the same way for decades, which is the government will say I need some capability and then they go out and they pay people to go build a specific product for those capabilities. What we do here, here at Apex is very different. We take our investor capital, like this $200 million round led by Actual and Tom at Interlogos, we take that capital and we invest that into actually building products before the government ever says that they need it. And then once the government realizes they need it, we're able to supply it to them in a matter of days or weeks or months instead of having to wait for years. It also costs way less on the taxpayers by us getting ahead of it. The problem is not all of government procurement has caught up to that strategy where they're still putting out requirements asking for people to make things custom and new. So our big push is if I were to ask one thing of the US government, it's focus on commercially available off the shelf parts, actual products like we here, we have here at Apex, instead of reinventing the wheel every time.
- [40:54]
Caroline Hyde
And Cinnamon, I mean just months after racing your Series C, you're Ontario Series D Lintel Argos, as you say. Leading that round, Ian Cinnamon, APEC CEO, live from Los Angeles. We appreciate it. Now coming up, Judy Sweet, CEO of Accenture is going to be joining us to discuss the pace of AI adoption in the enterprise. So much more than that as well. This is Bloomberg Tech.
- [41:21]
Commercial Announcer
Introducing the all new Adobe Acrobat studio. Now with AI powered PDF spaces. Do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into 5 insights with a click do that with Acrobat. Need templates for a sales proposal that'll close that deal? Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time? Do that with the all new Adobe Acrobat Studio. Learn more@adobe.com do that with Acrobat. Hiscox Small Business Insurance Knows there is no business like your business across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online quote@hiscox.com that's hiscox.com there's no business like small business. Hiscox Small Business Insurance these days, AI.
- [42:23]
Amazon Ads Representative
Can help you write emails, summarize long meetings, and even create presentations that impress your most demanding customer. But how about industrial AI that uses data and simulation to boost productivity on the shop floor? AI tools that help you understand machine language. AI that helps you grow your business. With Siemens Xcelerator, you can use AI services, software and consulting from a single trusted digital business platform. Plus, you can find the right AI partner without having to search through hundreds of providers. That's AI for real. From the global market leader in industrial AI, Siemens Xcelerator. Learn more at Siemens US/ACcelerator.
- [43:12]
Caroline Hyde
A stat for you nearly 85% of C Suite leaders plan to increase spending this year, even if a recession happens by the end of the year. That's all according to Accenture's latest Pulse of Change survey, giving insights into how talent and technology trends really are shaping and driving change within business. Perfect person to discuss it with. Judy Sweet, Accenture CEO. It is wonderful to have you here, Julie, on the show. And it comes at the perfect time because there's been anxiety in the market, MIT reports, for example, making people question question the return on AI investment and deployment. What are you hearing from the C suite?
- [43:48]
Judy Sweet
Well, Caroline, thanks for having me. The number one topic. I've been with five CEOs in the last five days. The number one topic is how do I scale AI? How do I make sure it's embedded in how we operate every day? And that is because there's a huge difference between how we're all using AI every day, day in our individual lives. That's easy. But AI in how you operate an enterprise is hard. Which is of course why we, you know, our clients call us because we're seeing that roi, whether we're working with an industrial player, entire manufacturers that now identifies defects in minutes instead of days. Or a consumer goods company where we saved $20 million in the first first year using advanced AI to help excess inventory. The difference between the MIT report and what we're seeing and helping our clients do is they're getting the ROI.
- [44:45]
Caroline Hyde
Julie, those five CEOs you've seen in the last five days, busy person, are they seeing this from the long term perspective? They got the patience that perhaps some in the market don't.
- [44:57]
Judy Sweet
Absolutely. They understand that AI is going to reinvent every aspect of the enterprise and that's a long term game. And so what they're asking me to an Accenture to help with is how do you create? How do you prioritize? And the answer is you prioritize starting with your business strategy, the readiness of the technology and your organizational readiness.
- [45:25]
Ed Ludlow
Right.
- [45:25]
Judy Sweet
Where in your organization do you have the confidence that they can embrace? Because embracing AI is about changing the way you work, changing your workforce and changing the workbench. You know, how you actually get work done. And so absolutely, long term view and where we're helping is how do you actually execute on that view.
- [45:47]
Caroline Hyde
I thought some of the statistics were fascinating. The 75% of C suite leaders survey saying the pace of a change is moving faster than actually they can currently prepare their workforce for. I'm going to ask a sensitive one because I'm showing here the Wall Street Journal a write up that happened earlier this week talking about, it's pretty damning actually about consultants and saying that basically at the moment this is such new technology that you can't buy the experience you need. Quoting consultants who often had no more expertise on AI than they did in internally struggled to deploy use cases that created real business value. Can you respond to that, Julie? Because you must have seen that story and been rankled by it.
- [46:27]
Judy Sweet
So look, when you think about the new ways of technology and why Accenture has been successful for the last decades is because we have the ability to reinvent, train people. So we went from 30 people trained in Jenny in November 2022 to over 500,000 trained today. Companies can't do that. By definition, every new wave of technology has a time for, you know, where you've got to train and retool. And Accenture's core competency is being able to do that at scale to help all of our clients. Our clients can't possibly build all of that expertise that they need. And without, without an Accenture to be able to help them scale. And so it's Absolutely core. And think about the way that we've been training, right? We have gone from 40,000 to 80,000 data and AI professionals in the last three years. That's enormous, right? We've trained over 500,000 people and starting just this month, we're now training all of our over 700,000 people in the basics of agentic AI. Our clients come to us to say, we need your help to do this and help us with our talent. Which is why we launched our Learn Vantage business.
- [47:48]
Caroline Hyde
So when a Bristol Moss Squibb Chief Digital Officer says there's no more experience within the Big four, for example, talking about your rivals than, than a kid in college, you say, no, not true. Look at what we're doing.
- [48:01]
Judy Sweet
Absolutely. And you can see that in the, again in the actual results. So starting with Accenture, right, We've deployed at scale in areas like sales, which we're rewiring. We're using AI to get our proposals faster, we're using it to get to market faster. And then we're taking those solutions to our clients who are adapting them. We're working with a global bank right now where they're now creating, having conversational AI in a single global platform and they're already seeing a double in double sales on their mobile app than they had before. But what, in order to do that, that wasn't something you did at the edge. The first thing we had to do was build the foundation with them to actually be able to do that. The reason enterprise AI is hard is because it's not what you expect. Experience every day, putting in a question, summarizing your emails, creating new PowerPoints. It's about actually rewiring the way that you do work, your processes and understanding where you get value. And we're doing that at 2000 different projects at a time. And that's the experience we bring to our clients.
- [49:15]
Caroline Hyde
And how does it affect your people, your talent pool, your hiring processes at the moment? Are you, you slowing hiring at all at the moment? Julie, are you turning to graduates more or less?
- [49:29]
Judy Sweet
When you think about the workforce, think about it in three things that you have to do. You have to upskill the people that you have, right? Give them the skills. That's why everybody's being trained in Agent GI in the same way everyone was trained with Jenny I. You have to do a talent rotation. There are some people that won't make the journey, right? You have a mismatch in skills and you're not able to train, you know, everyone. And then you also will have efficiencies so if you keep that framework in upskilling talent rotation and efficiencies, that really kind of answers the workforce strategy that not only Accenture has but all companies need to have.
- [50:11]
Caroline Hyde
And certainly your clients like Palantir, Nvidia us to name but a few. We thank you so much for taking time amid a very busy circuit of all the other CEOs that you speak to on a daily basis. Judy Sweet, Accenture CEO, wonderful to have some time and expertise with you now. Coming up, Gemini is about to make its trading debut today. We'll discuss what to expect next. This is Bloomberg Tech Gemini making its public debut today. This after a hot week for tech IPOs to say the very least. Bloomberg's Bailey Lipschultz covers all things IPOs joins us now. Another crypto related one, another one that's going to pop on the open if indications are right. We're currently seeing $32 is where we're currently indicated having price at $28. Why do people want in on the Winklevoss twins?
- [51:04]
Bailey Lipschultz
I think people want in on pretty much anything crypto. As you mentioned, we've seen some pretty strong rallies to start yesterday. Figure a blockchain company rallied pretty sharply and is trading higher again today. Really betting on the future of crypto. Winklevoss twins with Gemini not the biggest player, not really one of the biggest players as it comes to exchanges. But the broader pitch is if we are going to go to a future for crypto where it's a bigger part of the financial institutions and bigger part of finance, then investors are really putting money to work because of just that scarcity value.
- [51:36]
Caroline Hyde
Scarcity value. Particularly when before the test it felt like was you need to be profitable, you need to have really shown the bottom line growth, not just top line. Gemini doesn't really have that.
- [51:47]
Bailey Lipschultz
No, not at all. And when you talk to investors like I have been doing, it's really a question of are you just kind of putting money to work, work in what should be or could be the next exchange again to go of the IPO to retail investors. So leaning into that retail trend. This has been something we've been tracking with the last handful of deals. But it really seems like the kind of bet is maybe further away from institutions and betting more on some of those individual investors on a Robinhood or a Sofi to put their money to work and buy and hold the stock and really support it in the aftermarket.
- [52:18]
Caroline Hyde
Bailey, very quickly, why is it called with Space Station?
- [52:20]
Bailey Lipschultz
I don't know. Someone I was talking to kind of assumed it has to do with the whole I don't know, rockets going to the moon and sending crypto tokens to the moon. I have not gotten a real answer so if you find an answer I would love to know.
- [52:31]
Caroline Hyde
Audience, give us your real answers or your funny ones too. Bloomberg's Bailey Lipschultz is a joy having you. Thank you. Happy weekend. Meanwhile, that does it for this edition of Bloomberg Tech Recapping We've had plenty to talk about this show and just at the very first first half we were talking about Tesla, the future of the pay package for one Elon Musk. We spoke with Robin Denham of course the chair board really honing in on the fact that we're seeing a political motivations of Elon's that are his the Tesla chair telling us the board also takes very seriously any safety incidents within Tesla cars in particular. On the back of that reporting around the cybertruck from our in bring bad news car colleagues and Denham says the pay package does contemplate different roles for Musk not just CEO. We're still up 6%. Don't forget to check out our podcast. Find it on the terminal as well as online on Apple and Spotify. This is Bloomberg.
- [53:27]
Commercial Announcer
Hiscock Small Business Insurance Knows there is no business like your business across America, over 600,000 small businesses, from accountants and architects to photographers and yoga instructors, look to Hiscox Insurance for protection. Find flexible coverage that adapts to the needs of your small business with a fast, easy online'@hiscox.com that's his c o x.com there's no business like small business. Hiscox Small Business Insurance Running small and.
- [53:58]
Amazon Ads Representative
Medium sized businesses is hard work. Business owners need to be sure that their ads are working just as hard as they do. Amazon Streaming TV ads helps put small and medium businesses front and center on premium content and shows that people are already watching. With Amazon ads, you don't have to sacrifice relevance for reach. Trillions of browsing, shopping and streaming insights help you reach the right audience, and measurement tools show you what's working the hardest to help you optimize your campaign in real time. Gain the Edge with Amazon Ads these.
- [54:33]
Caroline Hyde
Days, AI can help you adopt better time management, but it can't stop colleagues booking meetings during lunch. But how about being able to easily adopt industrial AI to streamline your business?
- [54:44]
Judy Sweet
Siemens Xcelerator helps you find the right.
- [54:46]
Caroline Hyde
AI providers and easily understand what they offer so you can use modular solutions to quickly scale up and grow your business. That's AI for real from the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI.