Loading summary
Transcript94 lines
- [00:01]
Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams who can help you connect the dots across your enterprise, from risk to operations to customer needs. So opportunities don't slip by and surprises don't spread. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte together makes progress. Learn more@deloitte.com TogetherMakesProgress so there's a lot
- [00:35]
IBM Representative
of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business.
- [01:01]
President Trump (quoted)
Business.
- [01:01]
IBM Representative
Let's create smarter business.
- [01:03]
Cigna Healthcare Representative
IBM for many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [01:37]
Deloitte Representative
Bloomberg audio studios podcasts radio news. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.
- [01:58]
Tim Stenback (Bloomberg Tech Host)
This is Bloomberg Tech. I'm Tim Stanback in New York. Coming up, tech stocks on a roller coaster this morning, but pushing higher now as Iran's deputy foreign minister announced the country is drafting a protocol with neighboring Oman to oversee traffic through the Strait of Hormuz. Plus, Tesla posts one of its worst quarters for sales in years. Disappointing Wall Street. We're going to have the details. And NASA's Artemis 2 successfully launched. We'll discuss what's next for the crew of four astronauts in Earth orbit right now. Well, let's take a quick look at markets. US Tech stocks, they are just whipsawing this morning as well. Oil price prices are climbing. Bitcoin and really cryptocurrencies across the board taking a hit. Stocks moved off their lows. This after Iran's deputy foreign minister announced the country is drafting a protocol with neighboring Oman to really oversee traffic through the Strait of Hormuz. This all comes after a speech from President Trump Last night did little to assure investors that the war in the Middle east was, was coming to a swift resolution. Take a listen.
- [03:04]
President Trump (quoted)
We are going to hit them extremely
- [03:06]
Martin Schroeder (Kyndryl CEO)
hard over the next two, three weeks.
- [03:09]
President Trump (quoted)
We're going to bring them back to
- [03:11]
Cigna Healthcare Representative
the Stone Ages where they belong.
- [03:16]
Tim Stenback (Bloomberg Tech Host)
Let's first go now to Washington where we find Bloomberg's Washington correspondent, Tyler Kendall. She joins us now. Tyler, it seems like at least the most recent market reaction notwithstanding, the market really wanted more from President Trump about a swift end to this conflict. Did we get anything new last night?
- [03:36]
Tyler Kendall (Bloomberg Washington Correspondent)
Well, Tim, President Trump really touted tactical successes so far in the military operation, but he didn't provide new information about a timeline or how the US Is going to address some of these strategic setbacks, mainly the Strait of Hormuz. Instead, we heard President Trump reiterate what we've heard before, including that pressure on allies to lead the way in reopening the critical waterway as the United Kingdom today convened the Foreign ministers of 35 countries to discuss the issue. But we heard from the French President, Macron, for example, saying that he thinks it is, quote, unrealistic that military, military assets would be committed in order to reopen the strait. The prevailing sense seems to be that these assets aren't going to go to help reopen the Strait of Hormuz until there is a cease in the hostilities. Now, President Trump did maintain that the US Is getting close to achieving its objectives in this war, but he also previewed that we could soon see an escalation as he reiterated threats that we could have the US Attack Iranian energy infrastructure. That tracks with reporting from Bloomberg News yesterday that the vice president, J.D. vance, did convey through intermediaries that there is going to be this increase in threats on Iranian strategic assets until a deal is reached. Tim, at this point, the White House maintains that it is still negotiating with Iran, that these negotiations are ongoing, though at least publicly. Iran has denied that it's engaged in formal talks with the U.S. bloomberg's Tyler
- [04:59]
Tim Stenback (Bloomberg Tech Host)
Kendall at the White House. Thanks so much, Tyler. Well, let's take a look at the market reaction now. Bloomberg Tech Equity reporter Ryan Bastellica joins us with more. Ryan, the NASDAQ 100 was down more than 2% earlier in the session, down only about 3, 4, 10 of 1% right now. There was a swift turnaround just in the last half hour or so. What can you tell us about this whipsawed market?
- [05:20]
Ryan Bastellica (Bloomberg Tech Equity Reporter)
Well, what I would say is that this really shows how much stocks, especially tech stocks, have been so highly correlated to any of the latest Headlines that come out surrounding geopolitical tensions with Iran. There is still a lot of uncertainty right now. And just having this geopolitical issue just augment some of the other concerns people have right now about tech valuations, about the state of AI, about the outlook for AI spending, AI disruption, all those things is what investors were focused on prior to the war. And now you have this new element that's coming in that is really overshadowing everything else.
- [05:54]
Tim Stenback (Bloomberg Tech Host)
Yeah, I think the question a lot of investors have is like, how long does this overshadow those fundamental questions that you mentioned, Ryan? Because there is a connection when it comes to higher energy prices and then, well, perhaps higher inflation for a longer period of time and then valuations for these tech firms.
- [06:12]
Ryan Bastellica (Bloomberg Tech Equity Reporter)
Yeah, absolutely. And the longer we have the sort of uncertainty, the longer the strait is closed, the more questions we have about that, the harder it is to sort of suss out what valuation should be, what fundamentals really look like right now, especially if you're looking at sort of the hardware space and chip makers which have, which count helium as a major component that is built into their products. If you have uncertainty about supply for that, all these other kinds of questions just right now, just like I said, add to the growing level of uncertainty about what the outlook is overall.
- [06:42]
Tim Stenback (Bloomberg Tech Host)
Love that we're talking helium right now. Bloomberg's Ryan Vistelika, always great with an update. Thanks, Ryan, Appreciate it. Well, coming up, Tesla deliveries, they disappoint and Tesla shares are lower. More on the EV Maker next, as Tesla down 3.7% right now. This is Bloomberg Tech. Shares of Tesla under pressure this morning, down about 3.7%. The EV maker posting one of its worst sales quarters in years, delivering 358,000 vehicles, levels Wall street had anticipated, 372,000. For more, we go back to Bloomberg's global business editor, Craig Trudeau with the details. Craig, you did a great job setting us up for this print yesterday when we spoke to you and we talked about how the idea that even though a lot of analysts value this company, not necessarily as a company that sells cars, cars are still really important. So a disappointing quarter when it comes to or disappointing month when it comes to sales, that still has an effect on Tesla's business, even if it has big ambitions beyond autos.
- [07:56]
Craig Trudell (Bloomberg Global Business Editor)
Yeah, I mean, this is still what pays the bills, right? Everyone is excited about robo taxis. They're excited about human humanoid robots, but those are still really concepts. And we don't have a robot actually that, that Tesla is selling. And it doesn't sound like they're particularly close if you're following Musk's, you know, sort of daily missives on X. You know, the expectations here weren't all that high and they were trending lower. And so to see them miss by a fairly substantial margin is a big disappointment. And when you compare what some of the peak quarters have been for Tesla, where they've come close a couple of times to half a million vehicles in a quarter, this is a really big letdown relative to those sort of loftier levels.
- [08:38]
Tim Stenback (Bloomberg Tech Host)
The company facing a lot of headwinds here in the US regarding tax credits and policy changes and not excitement from this White House when It comes to EVs but but also challenges outside the US where Elon Musk is not viewed necessarily favorably. And with growing competition from China. How does Tesla turn itself around before it gets to that point where it doesn't rely on autos to generate cash?
- [09:01]
Craig Trudell (Bloomberg Global Business Editor)
Yeah, it's a really good question. I mean, I think there is some hope that this Cyber Cab that is supposed to start production this quarter will be helpful and that it at least is a new product. I think this is a company that has a bit of a tired lineup. They've changed over the Model 3 and Model Y, but, you know, they're not all that different from, you know, the way they looked when they first came out. And so, you know, this two door, smaller car could be interesting to people, but is it actually ready to be put on roads without a steering wheel or pedals? I think a lot of regulators are going to have some, some doubts given the challenges that the company has had with what it markets as full self driving. And so, you know, there are again all of these hopes as well that the humanoid robot business has a lot of promise. But this is still very much a case of, you know, approve it in terms of whether or not that's actually going to be a business that analysts can sort of wrap their heads around anytime soon.
- [10:03]
Tim Stenback (Bloomberg Tech Host)
Bloomberg's Craig Trudeau from London. Craig, thanks so much. Let's say on Tesla. Ben Callow is Baird senior Research Analyst. He joins us now for more. Ben, you've got an outperform rating on the stock. A new price target though of $538 per share. That's down from $548 per share. That's a far cry from where Tesla is right now at 367. How does it get there in the next 12 months?
- [10:26]
Ben Callow (Baird Senior Research Analyst)
Well, thanks for having me on. It was great commentary that you guys had about, you know, the vehicle Miss and numbers did come in. I think more importantly on the miss was on the energy side of the business. And as Craig said, you know, what pays the bills is auto sales and, and battery sales for, for energy. And so that was disappointing, more disappointing than the auto miss and with Capex, their capital expenditures, with all the investment doing for Robo Taxi, for Optimus and for the Cyber Cab as well as doing Datacenter and the semi truck, they're going to spend $20 billion this year and so they're going to have to pay for it. And the auto business and the energy business is where the cash comes from. You know, they have 40 billion plus in cash. They're probably going to be a $2 billion cash drawdown this quarter. And you know, as show me story, I, you know, I agree with that. There's also so much going on right now with Space X, with xi and you know, the possibility that they're going to come together at some point. And so there's a lot we can talk about.
- [11:43]
Tim Stenback (Bloomberg Tech Host)
Yeah, let's, let's talk about that, that possibility that these two companies do come together. Let's say Space X goes public in June. So we're going to have to sort of, you know, play this out a little bit. We don't know exactly what, what's going to happen if that does happen. Ben, do you think that Tesla will become part of that Elon Musk company?
- [12:03]
Ben Callow (Baird Senior Research Analyst)
I think that. It's better if they're both public companies to merge them together just from a, you know, accounting standpoint, from both being public and having valuations. But they've already started going way back when they, you know, there are some shared employees between Space X and Tesla. But now, you know, you're starting to do like the Terrafab. You're, you're doing this, you know, macro hard project. And so, you know, they're linking more and more together. And I think, you know, one big thing with Elon wanting to have ownership over 25% or you know, some kind of control that he said in the past with Tesla that that would also help him because he has a bigger share of Space X and xi, that that would also get him to that point as well. And it just makes sense from a scale perspective too because this is a big arms race that we're in for AI and you know, speed to market capital, very important right now. And so he knows that and he's, you know, they're doing everything they can as fast as they can to, to do that race.
- [13:26]
Tim Stenback (Bloomberg Tech Host)
Ben Craig also mentioned the idea of the Cyber Cab and that could bring some excitement to people. But I'm also wondering about other parts of the portfolio and what's in the pipeline. Namely maybe a new SUV that has been banded about a little bit. Is that something that moves the needle? And what can you tell us about timeline there and what that would do to the top line and the bottom line for the company?
- [13:49]
Ben Callow (Baird Senior Research Analyst)
Sure. Well, you know, one thing that the Craig said, and Craig said a lot of great things but about just kind of like a tired brand, brand of models and you know, the Model Y refresh, you know, if you ride in it, it's, it's a lot better than the original Model Y. And so there's not big changes and the fact that they, you know, they have just, you know, the Model y, the Model 3, really main sellers versus other auto OEMs, they're more profitable on that and they sell, you know, they sell a lot of them because people like them, they're, they're very good cars. And so it's good to expand if they have an suv, you know, like, look, I have, I have six year old twins. I'd like to have a SUV as well. You know, I, I think that, you know, the real growth is, is winning this robotaxi war. And I don't know if it's a winner take all. I don't think so. I think, but you know, Tesla has, you know, yeah, the data, they have a scale, they have the service centers and in the strategy and it's going to be hard for others to compete and scale.
- [15:00]
Tim Stenback (Bloomberg Tech Host)
Ben Callo a Baird. Ben, always good to check in with you. Appreciate you taking the time and joining us this morning on Bloomberg Tech. Well, coming up, NASA's Artemis 2 successfully launched. Now the crew's attention turns to firing off towards the moon. Details on that with Ed Ludlow next. This is Bloomberg Tech.
- [15:20]
Deloitte Representative
The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams. People with deep industry experience who can challenge assumptions and help you connect the dots across your enterprise. From risk signals to operational pressure points to shifting customer needs. Deloitte helps you see what's coming sooner so opportunities don't slip by and surprises don't spread. It's not just dashboards. It's real clarity in the moments your decisions are made. When models reveal patterns, people can ask better questions. When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the frontline to the C suite because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn more@deloitte.com TogetherMakesProgress support for the show comes from Public.
- [16:22]
Public Investing Representative
Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific, like biotech companies with high R and D spend small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures.
- [17:32]
My Policy Advocate Representative
We buy insurance for peace of mind. But every year millions of claims are denied, not because people did anything wrong, but because their policies quietly excluded what happened. Insurers know every detail. Policyholders rarely do. That's why my policy advocate exists. For just 27 cents a day, their platform reads your policies and explains where you are vulnerable. They don't sell insurance. They deliver transparency. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Go to mypolicyadvocate.com.
- [18:09]
Tim Stenback (Bloomberg Tech Host)
NASA's Artemis 2 astronauts are in Earth orbit and they're prepping for the next crucial step in their historic journey to the moon. They're going to fire the engines tonight to send them toward lunar orbit. With us now is Bloomberg Tech's own Ed Ludlow. Ed, just give us the latest when it comes to the mission status and what happens before tonight's big move.
- [18:30]
Ed Ludlow (Bloomberg Tech Reporter)
Yes, the crew inside the Orion spacecraft are essentially in safe orbit. They conducted a burn this morning that took them from low Earth orbit to higher Earth orbit and in a sort of elliptical fashion going around the earth until about 7 or 8pm Eastern time. That's when the mission direction directors and flight directors have to decide if they are a go for the trans lunar injection, the burn that you described which propels Orion the 250,000 miles or so to the far side or dark side of the moon. And that's why we're all here. That's the big part. And so there is risk, but they are testing systems. At some point the crew has to sleep, but that's what we're tracking toward
- [19:10]
Tim Stenback (Bloomberg Tech Host)
the dark side of the moon. The far side side of the moon. What's back there?
- [19:18]
Ed Ludlow (Bloomberg Tech Reporter)
Yeah, I mean the point of the mission in part is observation of what's on the surface of the far side of the moon. Right. This is a resources story. Water, minerals, oxygen, the value of the moon is in part strategic from that resources standpoint. There's also an important moment where the Orion capsule and spacecraft is going to lose control contact with Houston and control and you're all thinking watching Bloomberg Tech, what the crew, then they're going to lose contact on the fossil. Yeah, obviously the moon's in the way, but that is also important. And they planned for that and prepared for that. And you know, it's going to be a really significant moment when through what's called a free return trajectory, the moon's gravitational field and Earth's gravitational pull swings the Orion space craft back around in a figure 8 and send it back to Earth. So there's risk here but, but it is record breaking in terms of what they're trying to achieve.
- [20:13]
Tim Stenback (Bloomberg Tech Host)
Well, we're talking about space. Ed, we got to ask you a different question about orbit and that has to do with shares of Global Star. They're rallying today up about 9%. This after we learned that Amazon is in talks for a buyout. Now Apple owns about 20% of this company. What would this do for Amazon and if you know, quote unquote competition for providing satellite service, web based satellite service or satellite web based service for. Yeah, you know, really competing with Space X.
- [20:42]
Ed Ludlow (Bloomberg Tech Reporter)
It's interesting because the financial terms and what they're kind of agreeing to buy isn't disclosed. But what Global Star has is very valuable license spectrum. You know that, that having Constellation in orbit is not really about the hardware that's up there, but the spectrum that it occupies. That's part one. The other part is that, that it's a kind of go to market story, right, Where Global Star is authorized and regulated in markets around the world. It has ground, infrastructure Corresponding to the Constellation based infrastructure that would help Amazon with its own space based Internet ambitions get into those markets. Even if the satellites that are up there are about cell connectivity in places where terrestrial real cell signal doesn't reach. That's all a big part of it. And, and you're right, the history of Global Star is that right now that's how you get emergency messages on your iPhone or make emergency calls, but the bigger picture is just access to the space that's up there.
- [21:37]
Tim Stenback (Bloomberg Tech Host)
Bloomberg's Ed Ludlow live at Kennedy Space center in Florida. Thanks, Ed. Well, the fintech company Chime is launching new checking accounts that offer cash back and other benefits as it steps up its challenge to traditional banks banks. Let's talk through it with Chime CEO Chris Britt. Chris, so called Chime prime, it seems like a departure from the core Chime product that appeals to people who don't necessarily care about Priority Pass or luxury hotels. Explain this strategic shift.
- [22:04]
President Trump (quoted)
Well, we think it's a natural evolution for our company. And by the way, thanks for having me today, Tim. It's great to see you. We've already been come come of age as America's choice for banking and you've seen that in the data. JD Power for multiple quarters in a row now have reported that Chimes opened up more checking accounts than any brand in America, including some of these, the biggest incumbent banks in the world. So we think that the addition of Chime prime is a natural addition for us. We've always done a really good job of cultivating primary direct deposit relationships with our members, people that are getting direct deposit and using Chime for their everyday transactions. What we realized is that we weren't doing enough to reward members who either had the capacity to or were already awarding us with large amounts of deposits. So with Chime prime, if you give Chime a $3,000 total direct deposit over the course of a month, we unlock 5% cash back on the Chime card, which is a secured credit card card. And you can choose the category that you get the 5% cash back in. So it could be groceries, restaurants, your monthly bills, you name it. But it's pretty powerful if you think about a consumer who spends say $1,500 a month on groceries. We're talking about $75 of cash back in the month with this new product. So we're pretty excited about it and we think it actually is a natural extension of our product.
- [23:33]
Shereen Ghaffari (Bloomberg Reporter)
Sweet me.
- [23:34]
Tim Stenback (Bloomberg Tech Host)
Well, Chris, one of the reasons we like talking to you is because you have this great real time view of what the consumer is doing and how the consumer is feeling. And I'm wondering, with higher energy prices and with savings not really there for a lot of Americans right now, how did they weather the last month?
- [23:51]
President Trump (quoted)
Well, as we've reported the past few quarters, there's been certainly a lot of understandably uncertainty and, and some would say some doom and gloom as it relates to the state of the consumer. But as we've reported the past few quarters, we're seeing a steady resilient consumer that continues to increase their, their spend across the categories of both discretionary and non discretionary spend. We see saving account balances continue to stay at a high rate and we haven't seen any uptick in unemployment. So I think across all, all of those areas we see a healthy consumer. I would note that from February to March we did see not surprisingly a pretty, a pretty significant uptick in the amount that consumers are spending on their fuel purchases. So up over 25% actually month over month. So, so yeah, that is, that's definitely something that consumers are feeling a real
- [24:48]
Tim Stenback (Bloomberg Tech Host)
pinch in real quick. What were they spending less on as a result of spending more on fuel?
- [24:53]
President Trump (quoted)
Well, we have not seen any sort of downdraft in spend at all. So we're continuing to see an uplift across, you know, all the, all the regular sort of everyday categories. About 70% of our spend is on nondiscretionary. So that's one of the you know, sort of really positive things about our business models that whether the economy is sort of up or down, people are still buying groceries and paying their monthly bills and paying their mobile bill and all those sorts of things. So, so nothing's changed on that front.
- [25:22]
Tim Stenback (Bloomberg Tech Host)
I think it's fair to say that a lot of CEOs see this environment as, as a much friendlier regulatory environment in different industries. Why would you, a non bank still believe that not pursuing a bank charter is the best move in this environment?
- [25:39]
President Trump (quoted)
Well, you know, there's no question that the regulatory environment has, has loosened up a bit and you can see it in all the quite a few number of applications to become a bank charter. We've certainly, you know, that's something that we evaluate every year and it's certainly something that an option that's on the table for us. But you know, historically when we've looked at how we've constructed this business, we think it's, it's really been a win win for Chime and our community bank partners that hold the deposits of our members in these fdic. Insured accounts. It gives gives us the benefits of being a fintech that can move fast and innovate and really focus on our member needs and have our bank, you know, provide our members with all the security and protections of having your money safe in a bank account. You know, certainly as the market changes, we will, we will reevaluate that. But we don't have any plans to announce in the short term on that front.
- [26:34]
Tim Stenback (Bloomberg Tech Host)
Chris, always good to see you. Time CEO Chris Brittany, it thanks so much. Well, coming up next, a conversation with Stephanie Valdez street of Cox Automotive as Tesla posts one of its worst sales quarters in years. That's next on Bloomberg Tech. Welcome back to Bloomberg tech. I'm Tim Stanback in New York. Let's take a look at markets with Bloomberg stocks reporter Natalia Cunning David here in New York. Natalia, the NASDAQ 100 was down more than 2% earlier in the session. It's kind of flat right now. There was about an hour ago some news about potentially some discussions with Oman and Iran about the Strait of Hormuz. Is that what's driving markets right now?
- [27:23]
Natalia Cunning David (Bloomberg Stocks Reporter)
It looks like, yes. So we do see that major indexes are basically flat right now. But it's still a good, pretty, pretty defensive move. If we look at the sectors right now, real estate, utilities, consumer staples. So these are sectors that are moving higher today. So we got some headlines, yes, from Iran that is working on a draft of a protocol with amount to oversee the Strait of Hormuz. However, when we look at the stock market, of course we do see that the playbook is still really familiar. We see that stocks since the beginning of the war in Iran, stocks are flat or up from Monday to Wednesday and they are down on average from Thursday to Friday by about 9%. It tells us that investors don't want to hold positions going into weekend because a lot can happen. And when I spoke with many traders or analysts like what exactly you guys are doing, they said yes, get rid of positions, go long and enter on energy or you know, oil, gas or energy related commodities related stocks and of course sell economically sensitive stocks, especially out
- [28:26]
Tim Stenback (Bloomberg Tech Host)
of a three day weekend where the equity market isn't even open tomorrow on a day where we are getting some jobs numbers for the month of March. You mentioned commodities. Let's talk oil real quick because it does seem like the equity market is, is buying this, but it doesn't seem like the oil market is buying this with Brent still up 6%. And wow, look at that WTI up 10%.
- [28:47]
Natalia Cunning David (Bloomberg Stocks Reporter)
Yes, 10%. So in terms OF headlines yes, Iran is working with Oman in terms of a protocol to oversee the Strait of Hormuz. Deputy foreign minister said that vessel traffic through the state should take place under Iran and Oman supervision and coordination. But of course, we also look at all global supplies in terms of oil and commodities. So for example, when we checked inventories in Egypt, which is also super important in terms of deliveries of Saudi Arabia crude to Europe, and now we see that those inventories are down by about 1 million barrels per day in the past two weeks. Just to compare, this is the equivalent of the growth in global oil demand that we projected before the war in Iran began.
- [29:33]
Tim Stenback (Bloomberg Tech Host)
Okay, Natalia. Connie David of Bloomberg News with a markets and oil update. Let's get to another big mover today. Tesla shares under pressure down more than 4%. This after the EV maker posted one of its worst sales quarters in years, missing Wall street expectations. Stephanie Valdez street is director of Industry insights for Cox Automotive and she joins us now. Stephanie, I want to start off where we left off with Natalia, and that's with higher energy prices. Do you see this, this increase in energy prices, the substantial increase, the more that Americans are spending and the more that people around the world are spending on oil as something that can actually push people to buy more Teslas?
- [30:15]
Stephanie Valdez Street (Cox Automotive Director of Industry Insights)
Yeah, I think definitely like it's causing the conversation to come up. But I don't think that consumers will immediately go out and buy an ev. I think what it does do is have them start, if they earn the market for a vehicle, start to consider more fuel, fuel efficient vehicles, which an EV is part of that conversation. But I think these high gas prices would have to stay prolonged for consumer behavior to really change. But definitely impacting consideration how long and how high. I think like you know, six months to a year. I think, I think consumers are just kind of waiting now. But I want to take a step back and look at the broader economy. I think consumer, you know, as gas prices go up, consumer, consumer sentiment goes down and that leads to consumer spending going down, especially for a high ticket vehicle like a car. So I think consumers are just going to wait in general to buy a vehicle, whether it's an EV or an ice, just because of the current economic situation.
- [31:12]
Tim Stenback (Bloomberg Tech Host)
Yeah, I mean, especially such a big purchase like an auto, whether it is an electric car or an internal combustion one. I want to go back to Tesla and this, this miss when it, when it comes to deliveries, analysts got it wrong, but they weren't expecting a great quarter. Where's the biggest, biggest opportunity for Tesla right Now is it in the US or is it outside of the us Where I think many analysts would argue it faces even more competition, particularly from China.
- [31:40]
Stephanie Valdez Street (Cox Automotive Director of Industry Insights)
You know, I think in the US they have to basically the model Y, model 3, right. That's the mature vehicles, no fresh product. They have a lot more competition the U.S. and then in addition, right. The regulatory changes, the IRA is gone. And so that's really impeding sales for across, across the landscape for EVs. And then you mentioned globally. Right. China, I think that's a challenger to everyone, not only Tesla. So I think for Tesla it's really, I think for their product it's like repositioning it, really focusing on affordability, product freshness. And I think with their infrastructure and battery tech, I think highlighting some of that and really having targeting target marketing for that I think might help a little bit.
- [32:26]
Tim Stenback (Bloomberg Tech Host)
You know, if you think about it just from the perspective of outside the US and some of the European countries and some of the Asian countries, of course, where it does face competition from what many analysts would say are better and even less expensive cars from the likes of byd. And show me, how does Tesla position itself against those competitors?
- [32:44]
Stephanie Valdez Street (Cox Automotive Director of Industry Insights)
I think it needs to continue to vertical integration. I think they need to continue to do that. But I think at the end of the day, if they want to continue to get maintained, defend market share within the auto sector, they need new product and customers like Nunez. Right. And they haven't had any of that cyber, which is really niche. And so I think for them to compete globally, having new product is key.
- [33:11]
Tim Stenback (Bloomberg Tech Host)
What kind of new product? I mean, Craig Trudell covers autos globally for Bloomberg, talked about the cybercab. But what else?
- [33:19]
Stephanie Valdez Street (Cox Automotive Director of Industry Insights)
I think more affordable, right. Affordability is the key thing, whether it's US globally. And so having an affordable EV that they had talked about a couple of years ago but never came to fruition. So I think having an affordable option for consumers, I mean that's the biggest barrier right now for EV adoption, is the price points there. I think 65% of products in the US are above $65,000. That really pushes out many households. So I think for Tesla, if they can have an affordable EV launch, that can really help.
- [33:49]
Tim Stenback (Bloomberg Tech Host)
But the challenge with that is at least here in the US you don't necessarily have the credits that Tesla was used to and Tesla investors were used to for years because of the lack of support from this current administration for EVs. Can Tesla get prices down without government intervention?
- [34:03]
Stephanie Valdez Street (Cox Automotive Director of Industry Insights)
I mean, you know, usually it's the battery Right. Batteries up to 40% the cost of the vehicle. So it's continuing to innovate on battery production, chemistry and even within the manufacturing process, process itself, trying to come up with more efficiencies to reduce that overall cost. And I think going back to the, you know, whether it's tariffs or gas prices, logistics, it all adds up to it has that multiplier effect which could impact the overall cost of operations and manufacturing. So there's a lot of headwinds.
- [34:34]
Tim Stenback (Bloomberg Tech Host)
Yeah. Tesla shares coming their way. Yeah. Well, the investors facing some headwinds in the long term. And even today with Tesla shares down about 4%. Stephanie Valdez, street of Cox Automotive. Thanks, Stephanie. Appreciate it. Let's take a look at shares of Blue Owl Capital, which will limit redemptions from two of its private credit funds after facing an unprecedented surge in withdrawal requests. Shares under pressure right now though, off their worst levels of the day down about 1.2%. Investors have grown skittish about private credit after some high profile collapses and concerns over AI discovery disrupting software companies that relied heavily on direct lenders. Coming up next, Kyndryl CEO Martin Schroeder joins us to discuss how he plans on helping companies scale up in the age of agentic AI. That's next on Bloomberg Tech.
- [35:28]
Public Investing Representative
Support for the show comes from public. Lately it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth on public. You can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts. Yep. High yield cash. Yes again. They even have direct indexing. Public has modern design, powerful tools and customer support that actually helps go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash. All investing involves risk of loss. See complete disclosures@public.com disclosures.
- [36:27]
My Policy Advocate Representative
Here's a paradox. We buy insurance for peace of mind. Yet the very policies we trust can deliver the biggest financial shocks across America. Millions of claims are denied every year, not because people did anything wrong, but because policies quietly excluded the things that happened. The psychology of trust tells us we assume the contract is fair. But in insurance, the information gap is massive. The insurer knows every detail of what's covered. The policyholder rarely does. That's where my policy advocate comes in. For just 27 cents a day, their platform reads your policies and shows you in plain language where you're vulnerable. They're not selling insurance. They don't do that. It's about transparency, giving ordinary people the same understanding insurance companies have had for decades. Because when you know what's really in your policy, you can plan, protect and avoid surprises. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Visit mypolicyadvocate.com today. Peace of mind starts with knowing the truth. Mypolicyadvocate.com so there's a lot of noise
- [37:30]
IBM Representative
about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [38:05]
Tim Stenback (Bloomberg Tech Host)
The release of the source code for Anthropic's hit programing tool Claude code was, quote, absolutely not a breach. That's according to the company's chief Commercial officer, Paul Smith. Smith blamed the incident which exposed some unreleased features on, quote, process errors. Let's get to the latest with Bloomberg's reporter, Shereen Ghaffari. Shereen, you and the team have been covering this really closely. What did you learn from this Anthropic executive?
- [38:34]
Shereen Ghaffari (Bloomberg Reporter)
Sounds like it was, as he said, not a hack, but a human error. That the company is moving very quickly to release new features which has been their strength and that they've been able to get ahead and close in on competition by having this succession of features rolling out. But when things move that fast, it also leaves room for error, as we saw with the release of thousands of lines of code that the company is now trying to contain.
- [39:00]
Tim Stenback (Bloomberg Tech Host)
What did it expose exactly and what are the risks for of that exposure? Like why is the company, what specifically is the company trying to contain as a result of this?
- [39:11]
Shereen Ghaffari (Bloomberg Reporter)
So what was released was source code, which is just the underlying code for their very hit product, cloud code, which is a coding agent. Now that's not the only part that goes into a model secret recipe. There are other layers on top of that that are not out there. However, that source code is still valuable is something that now is in the ether and hard to sort of put back in the bag.
- [39:35]
Tim Stenback (Bloomberg Tech Host)
Does tin can competitors actually do something with this?
- [39:41]
Shereen Ghaffari (Bloomberg Reporter)
Well, Anthropic has issued takedown requests on to people who are distributing this code. And so there are potential ways that they could try to stop that legally. However, again, when something's out there, especially if you take code and then let's say change that code or tweak it, it becomes a little harder to contain.
- [40:03]
Tim Stenback (Bloomberg Tech Host)
All right, Bloomberg Shereen Ghafari. Follow her for the latest at the Bloomberg terminal and of course also@bloomberg.com well, Alibaba has unveiled its third closed source AI model in as many days. Chinese tech firms have typically taken an open sources approach, but the proprietary models allow the company to charge more directly for its tools. The Chinese tech giant is keen to monetize its growing AI portfolio in part to counter weakness in its e commerce business. And most businesses in the US Run on a tech infrastructure built for another era, but not for AI agents. Kyndryl is trying to change that. Today, the enterprise tech services provider announced the launch of its agentic service management to help companies scale and get actual return on AI investment. Kingdrail CEO Martin Schroeder joins us now in New York to explain more. Martin, good to have you on the program. How do you do you know that this is the right way to invest? Like how do you know that agents are what we should be betting on and what you should be betting on right now?
- [41:05]
Martin Schroeder (Kyndryl CEO)
Well, we're using it in real time already. We use agents across our infrastructure to help our customers achieve their business objectives. We are the world's largest IT infrastructure services provider. So tens of millions of people, hundreds of millions of people every day are relying on the banks that we help. We help over half the world's largest banks run their Systems. We help eight of the 10 largest airlines. We help the the industrial base that makes most of the world's cars. So health care companies. So what we already see today is the technology is very robust, but it also needs to be controlled and managed properly. And that's really what agentic service management's and our announcement today is all about how to how do we help our customers deploy agentic to get the benefits from it at scale while still being able to control it and make sure it's secure and performing the things that you're expecting it to perform.
- [41:58]
Tim Stenback (Bloomberg Tech Host)
Everyone's trying to figure out what the benefits of this technology is actually going to be. You see it, you know, day in and day out when you're Talking to customers, how are they using it right now and what's the return on the investment that they're getting?
- [42:08]
Martin Schroeder (Kyndryl CEO)
So the return on investment was, which I'm sure, I'm sure you've seen as well, is sort of, it's sort of very disparate. So many of our customers are seeing great returns on using productivity from AI within their employee bases. We see that as well. Our own employee base now as we sit here today has already created nearly 25,000 agents that they use to be more productive in their jobs. So our customers are seeing some of that at the other, at the other end of the scale. Many, many customers are struggling to get AI to scale properly, as you said. Well, in your intro, the world's infrastructure was built for a different time and probably not really ready yet for agentic AI. It's, it's like building a brand new bullet train that can go 200 miles an hour, but still running on tracks that were built for 30 miles an hour. And that's where agentic service management comes in to give you that control plane to allow you to start to modernize your systems.
- [43:04]
Tim Stenback (Bloomberg Tech Host)
You know, you have a great view on what these firms are spending when it comes to enterprise tech, when it comes to this technology. Just the climate out there right now with the volatility that we've seen this year, particularly in the last month with the US and Israeli war on Iran, are you seeing any change in spending? Is that market, is that customer base pretty resilient?
- [43:27]
Martin Schroeder (Kyndryl CEO)
Well, the customer base, particularly for the work we do, which is mission critical, right, the hearts and lungs of these firms, it is pretty, it is pretty stable. I'd also say that, look, the, the, the, the situation in the Middle east is, is creating slight shifts, making sure that you have resiliency in those operations. But we also see some other, what I'll call longer term arcs that are important. Data sovereignty is top of mind for everybody today and we have obviously a point of view on that. We're helping customers think about data to sovereignty. So, so in the mission critical world, the issues of security and resilience, the issues of modernization, they're pretty stable there. It's a growing market and I don't expect to see massive shifts based on whatever is in the news, but on
- [44:09]
Tim Stenback (Bloomberg Tech Host)
budgets, there's sort of a more fundamental question and that's about the spend when it comes to what these companies are actually buying and purchasing right now. And a lot of that in really recent months, months and even in the recent last year has really shifted toward AI, how do you convince them to spend on infrastructure, maybe tie that, that infrastructure spend to the AI story that's, that's happening right now.
- [44:31]
Martin Schroeder (Kyndryl CEO)
So we're, we're in the business of creating productivity for our customers, right. And the way we get to growth is by creating productivity in order to create pools of money that they can go invest in whatever is sort of top of mind. And to. You said it well, AI has been top of mind. But again in a, and when you have, when you have disruption in the world and geopolitics, geopolitics playing a role, it may be resiliency, it may be, it may be data sovereignty, it may be trying to rebalance your work to a private cloud versus a public cloud. So, so the, the, the nature of what we do has always been about, about drive productivity for our customers, do what they are doing more efficiently, create a pool of money and then help them, help them invest where they want to be.
- [45:18]
Tim Stenback (Bloomberg Tech Host)
You know, on agentic AI, we hear from, from people all the time who say we're all going to have our own AI agents and in a really short time. And the agents already out there acting on behalf of some people who are sort of early adopters. Is that a view that you agree with?
- [45:31]
Martin Schroeder (Kyndryl CEO)
I think that each of us, I mean I have agents that do automated work for me, right. But it's very much a productivity tool. I will tell you, you're here with me as person, I will tell you that. I will tell you that in the infrastructure we run for our customers, in the production workloads we have as we sit here right now, 920 trusted proprietary agents doing the work that helps helps us run the infrastructure. Compare that to, again, our employee pool is created just under 25,000 agents. So, so yes, there is a proliferation of agents in the, the productivity space that is going to continue. But agents doing real running production systems for, for companies, for the kinds of companies we work, that's at about a twentieth of what, of what the, the others are now that's going to grow fast. It's going to grow fast because they're very effective. They allow us to deliver higher quality. They do save money, but it is going to take a while to get into the production environments.
- [46:26]
Tim Stenback (Bloomberg Tech Host)
Martin, before we go, I'd be remiss if I didn't ask about the volatile year that Kendra has had and the leadership changes, the CFO leaving some accounting disclosure issues that certainly spooked the market. Given those hiccups, what can you say to investors right now that mid term revenue, profit and cash flow goals remain within reach.
- [46:43]
Martin Schroeder (Kyndryl CEO)
Yeah, so, so we did have material weakness that we disclosed. We, we also are cooperating with the SEC to try to get through the, the issues and the questions they have around disclosure, foreclosure. Keep in mind there was no financial restatement. Right. So the financial position of the firm is the financial position of the firm. And we will this year continue to make progress toward 28. And we still see 28 as, as a year where relative to what we talked about almost two years ago now we'll be able to triple cash flow and double profits on our way to sustainable revenue growth.
- [47:17]
Tim Stenback (Bloomberg Tech Host)
Kyndrol CEO Martin Schroeder, thanks so much for joining us on Bloomberg. Bloomberg well, the tech sector's job purge is continuing to rise. New data from challenger Graham Christmas shows that layoffs in tech companies topped 18,000, up more than 24% from March of 2025. I accounted for a quarter of the 60,620 total job cuts last month as companies such as Metta and Oracle shift budgets toward AI investment. Coming up next, Microsoft CFO Amy Hood has one of the toughest jobs in big tech. We're going to explain why next. This is Bloomberg. Microsoft CFO Amy Hood has the toughest job when it comes to navigating internal tensions and financial discipline. While competitors such as Medicine, Google and Amazon are spending tens of billions of dollars without hesitation, Hood has maintained a reputation for extreme accountability. Let's bring in Bloomberg's Brody Ford in San Francisco, who has more. The author of Today's Big Take about the Microsoft CFO Brody. Why is her job particularly more difficult than some CFOs at other publicly held tech companies?
- [48:35]
Brody Ford (Bloomberg Reporter)
Well, we talk about it on the show every day. Like the big question in the economy right now is are these huge data centers going to pay off? And so Amy Hood at Microsoft is sitting on kind of a nation state size level of investment and she has to figure out how much do you give to data centers, how much do you allocate to internal teams or OpenAI or other customers? And so essentially she is having a very big job beyond the scope of what you would think of as a cfo. And you know, every six months to a year, the market has a different feeling on whether these data centers will pay off. And she's the one on the day to day within Microsoft determining what's the right amount of money to spend.
- [49:18]
Tim Stenback (Bloomberg Tech Host)
Yes, a great deep dive on her history. She's been at the company since she's been at CFO since 2013. She was at Goldman Sachs earlier in her career. Give us an example of a time where she was right about financial discipline when others really thought they should be spending more money on certain products.
- [49:37]
Brody Ford (Bloomberg Reporter)
Well, the big thing right now is that she is skeptical of straight up renting out the servers to AI customers. Right? You think about the big Oracle deal that vaulted their stock late last year with open air. That $300 billion booking. That contract was on Amy Hood's desk. They had the option to take it and she said no. And when Oracle first signed that deal, it seemed like a coup. It seemed like, man, you know, Larry Ellison is having his comeback. And within a couple of months it started seeming much more like a burden. And maybe Amy Hood had dodged a bullet. The jury is still out on a lot of this stuff and how the Air will look, but at this point it seems like she has made a shrewd choice.
- [50:20]
Tim Stenback (Bloomberg Tech Host)
Bloomberg's Brody for Check out his big Take written along with Matt Day of Bloomberg News on the Bloomberg terminal and@Bloomberg.com that is going to do it for this edition of Bloomberg Tech. Do not forget to check out our podcast. You can find it on the terminal as well as online at Apple, Spotify and I Heart. This is Bloomberg.
- [50:41]
Cigna Healthcare Representative
For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [51:12]
Public Investing Representative
Okay tech leaders Word on the street is security incidents are dropping way down. With Windows 11 PCs built in, security for the win. Upgrade to Windows 11 Pro at windows means business.com Shake it up with Vital
- [51:28]
My Policy Advocate Representative
Proteins, Collagen and Protein Shake. It's a high quality, ready to drink
- [51:33]
Tim Stenback (Bloomberg Tech Host)
shake with 30 grams of protein and 10 grams of collagen to support healthy hair, skin, nails, bones and joints. With 0 grams of added sugar, no
- [51:42]
My Policy Advocate Representative
artificial sweeteners, and absolutely, absolutely no carrageenan. It's a clean, delicious way to fuel
- [51:48]
Tim Stenback (Bloomberg Tech Host)
your day so you don't just age gracefully, you age powerfully. Vital proteins stay vital.
- [51:55]
My Policy Advocate Representative
Learn more@vitalproteins.com.