Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (1:57)

And Instagram makes some changes with tighter content restrictions for teenagers. We'll discuss with Instagram's global director of policy.

Caroline Hyde (2:04)

But first to check in on these public markets. And once again, anxiety returns to the fore. We are worried about US, China, Europe, China and the trade tit for tat that really moves out into the world of shipping. We're down 9.10of a percent on the index of the NASDAQ 100. But Bitcoin crypto in the eye of the storm and $150 billion wiped out in terms of market cap across the industry. We see margin calls leverage flush out. It really is a dial up of worries when it comes to geopolitical risk here.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (2:33)

Okay, let's get to our top story. Treasury Secretary Scott Bessant said he still expects Presidents Trump and Xi Jinping to meet though China's latest escalation in that trade conflict between the world's two largest economies raises questions about all issues can be resolved before that meeting. Bloomberg senior technology editor Mike shepherd joins us. Mike, what do we need to know? What's the latest on those US China trade talks?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (2:58)

Well, the latest really, Ed, is that China is hitting the gas rather than hitting the brake. Now as the two sides prepare to meet to discuss these Ahead of a possible summit between Presidents Donald Trump and Xi Jinping, China earlier today unveiled new measures aimed at US Shipping sanctioning a South Korean company with strong US Ties and the US Operations of that venture, Hanwha, and then also unveiling other possible port fees. This is the latest escalation in an area where Beijing feels like it has an advantage over the supply chain. China is has been the world's largest shipbuilder since 2017. And it follows the last week's move where China imposed new export controls on sales of rare earths minerals to the US and to other countries around the world. Again, another area where they have a hold on the supply chain. And even as Scott Besant is saying that he sees the prospects for a meeting between Donald Trump and Xi Jinping, he has also indicated that he sees China's moves against rare earth efforts. And he hasn't commented yet on the shipping decision by China. But he sees those steps as aiming a bazooka at the global supply chain. And it is not the tone you would expect the two sides to be striking as they try to reach some sort of an agreement.

Caroline Hyde (4:15)

The global supply chain is key here, Mike. Europe really considering what its own options are where leverage can be applied to protect its own manufacturers because the rare earth implications are large for them, too.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (4:28)

Well, the rare earth's implications are huge and they're looking at it at a number of fronts. One area of particular concern, of course, has been the vehicle industry and electric vehicles more specifically. And what the EU is considering now is whether to require Chinese firms that want to operate within the bloc to share technology. And this is sort of taking a page from Beijing's own playbook. Any foreign company that wanted to do business with the Chinese partner in mainland China had to share a technology with that partner as really the price of admission. And the EU is now considering the same. And it is worried because it is seeing BYD make such inroads into the European market. And putting some of the European makers and their own EV ambitions in jeopardy now would require not only the sharing of technology, but this also joins Carol, other steps that are aimed at trying to rein in China on the continent. And that includes a doubling last week of tariffs on steel imports. Clearly a move aimed at China. And this also follows something that we were covering very closely over the past two days. The Dutch decision to seize Next Period from its Chinese owner Wingtag, a venture that was subject to possible U.S. sanctions we learned today if it did not replace its Chinese CEO. And that prompted the government, the Dutch government to move and to seize control of the local venture Next Period from its Chinese parent.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (5:58)

Bloomberg's Mike shepherd, thank you very much. Let's get more details in the story. Mike mentioned China retaliates after the Dutch government invoked a cold war era law to take control of chip maker Next Period. With Beijing now blocking Next Period and its subcontractors from exporting products from the Asian nation. The company is a subsidiary of China's Wingtech Technology and a key supplier of mature chips used by the automotive and consumer electronic industries.

Caroline Hyde (6:25)

Cara now look these US China trade tensions and European China trade tensions clearly weighing across risk assets. Most notably though crypto, it continued to lose ground after a historic round of liquidations that triggered a sharp sell off over the weekend. Remember look bitcoin is in a technical correction. The market value of all cryptocurrencies fell by more than 150 billion over the last 24 hour period according to Coin Gecko Data. Person we turn to is Bloomberg's Bailey Lipschelz covers tech assets for us. And this is washing out the leverage from the system.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (6:55)

Washing out the leverage. You have people getting margin called the thing that's interesting with crypto when you talk to your kind of regular Joe crypto trader they sometimes use 50 times leverage which means that if they're that levered and you see any type of pullback, they don't get to say oh actually let me try to get some assets together. They immediately get margin called. That's when you see some of this leverage be flushed out so quickly. And this comes back to the the debate 247 trading. If you're asleep or taking a weekend off to watch some college football and all of a sudden bitcoin pulls back, well guess what, your portfolio just got blown up. And that is something that we saw really happen and play out over the weekend. And when you see the back and forth with the US And China, we're going to continue to see this volatility.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (7:36)

Bailey One of the best read stories on the Bloomberg terminal and on the website is the latest bank of America fund manager survey and in particular the focus on how the market feels about evaluations in equity markets, what do we need to know?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (7:50)

You look at it and say that are there fears of a bubble? Looking at that, 54% of participants in that October poll pointing to tech stocks being too expensive, you look at the NASDAQ 100 forward PE nearly 28 versus an average over the last decade of 23. So all signs do point to overvaluation. When I talk to portfolio managers, they the question is, where are you allocating capital? Is it that Mag 7/broadcom? And also if we're going to say that, hey, this is a market that could be overvalued, these are investors who get paid to at least outperform their peers. So when you see where stocks have been trading for the last six months, or even if you go back to that April bottom, if you missed out on the immediate snapback, you kind of continue to buy even if you think the stock market is overvalued. We see investors kind of bending over backwards, doing some mental gymnastics, saying, okay, well maybe it's overvalued on the forward price to earnings. But if we really look out to 2028, well, what does Nvidia look like then? Then they're justifying buying now. But there's so much talk about froth, and we've seen it with large cap tech with some of these smaller companies. I often keep an eye on the Goldman Sachs unprofitable basket. That's a returned about 48% year to date. So quickly outstripping the magnificent seven. Quickly outstripping the NASDAQ 100. Is that a short switch tweezers that people taking on risk? It's really been a topic of conversation depending on who you talk to, whether that's in the private or the public markets.

Caroline Hyde (9:10)

Topic of conversation on the earnings calls. Look, we've just had the CFO of Citigroup being asked about frothy valuations in AI. This is focused for institutional investors as well as retail investors, and it's undeniable.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (9:20)

And the question is, are you going to hit on one of those 10 investments? I look at a company like Oklo in the nuclear space up 470% this year. Quantum stocks are up hundreds of percent. Is that a bet on these being kind of the next wave of companies, or is this investors saying, you know, what If I hit one out of the 12 companies and Quantum ends up being kind of the next paradigm? Well, at least I got in on Nvidia, the next in video, if you will, on the ground floor, which Is.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (9:48)

The biggest story today the CFO of a bank saying something quite measured or a Bank of America survey of all the fund managers that they track.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (9:56)

Cfo I think when you see management teams start to kind of grapple publicly with the idea of froth and publicly discussing whether they're going to outright say are we in an AI bubble or not? Whether you want to ascribe a lot of value to what we've seen and heard from the likes of Sam Altman talking about kind of it is an AI bubble or Jeff Bezos, every leader at these biggest companies in the world, whether it's tech giants or whether it's the, the C suite of banks are grappling with this debate. And it's going to be something that is a theme in this earnings season, whether you want to talk about tariffs. But it's going to inevitably come back to air bubble valuations and expectations because there is so much debate around the cycling of money and what this actually will mean with building out data centers, buying these chips, OpenAI partnering with seemingly everyone. What that does mean when we look back a year from now, two years from now, was this kind of the build out of the next generation in terms of AI or was this something that we all kind of should have seen the signs that there was a.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (10:53)

Potential top Bloomberg's Bailey Lipschultz with big Bailey Lipschultz fans here on Bloomberg Tech, try saying that in the morning without a coffee. Thank you very much. So coming up, AMD announces a new agreement with Oracle supplying even more AI chips. We have the details on that next. This is Bloomberg Tech Foreign says Oracle is set to deploy 50,000 of their Mi450 chips into data center computers starting next year. It's the latest commitment in the AI infrastructure frenzy. Here with the details, Bloomberg's Ian King, who leads our coverage of semiconductors. This is an important deal for amd. It's one of the only stocks on the stocks that's in the green right now. What do we need to know about it? The specificity of where these chips are going.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (11:54)

So the first thing to note is that these chips don't actually exist yet. These are the new products promised for next year. So what this is is another affirmation that AMD has a role in the future of this massive build out. That it is perhaps a more than just an alternative to in video that people are actually looking at its technology and saying, hey, we'll have some of that. We like that. We're going to commit at least part of our Data center build to that.

Caroline Hyde (12:19)

And what's interesting is, and it comes hot on the heels of course of OpenAI amd teaming up. Oracle's down significantly today. They got AI World upon us. But how much are we seeing AMD reap the rewards? How much will some of these be built out in data centers and the market margins be impacted for Oracle here?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (12:37)

Yeah, I mean we, we've obviously saw the massive open air announcement with amd. Another affirmation, a separate affirmation from this that hey, they've got a role. Oracle has been a customer of AMD for a while. This gives Oracle more options. Obviously everybody else including Oracle is paying most of their money to Nvidia right now. The margins are massive, the prices are massive. So this creates an alternative.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (13:03)

Let's go back to what you said about these chips don't yet exist. AMD, much like Nvidia has future generations of their GPU that they've designed and announced, but they're not yet in production. How do we best understand where AMD stands in this market for this lead edge accelerator versus Nvidia in the next year or so?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (13:23)

Yeah, I mean I think the best way to look at it is up until the open air announcement it seemed like everybody was kind of AMD curious that they were getting, you know, orders which were substantial and bringing in a good amount of money for the company. But compared to what was on offer, compared to what was happening at Nvidia, really nothing. I mean they were the best of, of follow a group that's following Nvidia. What we're seeing now is at least the beginnings of these kind of volume orders and these future commitments which would imply that they are a serious technology provider.

Caroline Hyde (13:55)

And king with always the latest. Thank you so much. Sticking with chips, shares of Samsung actually sliding over in Asia trading hours despite the company reporting its biggest quarterly profit or expectations of in more than three years. Here to discuss it, Bloomberg's Peter Ellstrom. And it's all about memory and demand for it. But why is the stock under pressure?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (14:17)

Well, Samsung stock has really been on a run this year. It's up about 75. It was up about 75% before the these earnings came out. So investors are taking a bit of profit here. On the actual news. Samsung's numbers were pretty good. This is just preliminary earnings for them. They just put out revenue numbers and then operating profit, just two numbers so far. And their operating profit was the biggest in at least three years. It was about $8.5 billion. So they are making more Money, they're gaining some traction on the HBM side. These are the memory chips that are paired with the accelerators. But you were talking earlier with Bailey about some of these tech stocks getting ahead of themselves. Samsung, as of those examples, it had run up quite a bit. Now investors are taking a bit of profits, but the numbers look pretty strong. We're going to get final earnings from them later on in the month. We'll get more detail about exactly how much of this is coming from memory chips, the HBM chips in particular, how much from smartphones and other kinds of components. Samsung in this, in this AI memory chip race has been behind SK Hynix, its local competitor. SK Hynix has been very good at working with in video in particular. But now Samsung appears to be making some progress. We'll get more detail on that later, but it does look like they're making some progress.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (15:29)

Peter, you're the editor that leads our coverage of Asian technology. Right. How do we cover Samsung? That's a company that has all of these different arms. And in the calendar, is Samsung the most important Asian technology company right now?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (15:46)

Well, we've got a big one week for tech companies in Asia and particularly chip companies in Asia. TSMC comes later on in the week. TSMC of course, makes chips for everybody, but particularly they're the ones who actually manufacture those chips for Nvidia when they go ahead and sell them to OpenAI and the rest of their customers. So that's going to be a biggie. In between, we have ASML in Europe, which is another very important company in the chip ecosystem because they make the highest end chipmunk equipment for manufacturing these high end chips. So both of those are going to be important indicators. Samsung is very much in there recently. They've had some struggles as they fell behind SK Hynix in the memory chip business in particular. It looked like Hynix was going to run away with this market. Now Samsung, of course, big, big company within South Korea, the biggest company historically. They've made a lot of progress in terms of catching up. So they're important. And together Samsung and SK Hynix give you an indication of how the AI market is doing. So both of those companies are partnering with OpenAI too. As you mentioned earlier, OpenAI seems to be partnering with everybody. They both have contracts to be able to supply those memory chips. As OpenAI embarks on this enormous construction project to build more data centers across the US and beyond the US Samsung.

Caroline Hyde (17:00)

Under pressure and you articulate how far the stock has run up recently. But is there any implication from the dialing up of geopolitical anxieties in the moment? We know that China, South Korea are getting embroiled from a shipping perspective. Peter, is there anything weighing more broadly on worries that Samsung will be engulfed in yet further tensions between South Korea, China and more broadly, there are certainly tensions.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (17:21)

I think everybody is watching the negotiations between the US And China. We, of course, had that flare up over the weekend where China threatened to use their control over the rare earth elements in the trade negotiations. President Trump responded by saying perhaps tariffs would go to 100%. I think that concerns everybody when it comes to South Korea in particular and Samsung. Samsung is one of the companies that is building facilities within the U.S. they're one of the Chips act beneficiaries. So they're doing construction in the U.S. they plan on adding a lot of capacity here. So as the Trump administration pushes for more domestic manufacturing, they seem to be one of the beneficiaries at this point at least. They, of course, make these memory chips, which is really where they make all of their money. The mobile phone business may be a little bit higher profile, but the chips business is really where they make the profit. As they push ahead with that and they work more with TSMC and Nvidia on those memory chips. That should help their profits. But in terms of these trade wars, it's very important that they continue to build out in the US and build up those fabs that they have in.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (18:24)

The U.S. bloomberg's Peter Alstrom on all things Samsung. Thank you very much. Now, coming up, we're going to speak with Tonal CEO Darren McDonald about the company's retail expansion, expansion and its push to infuse AI into all of its products. That's next. This is Bloomberg Tech.

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Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (21:19)

Tonal Systems, the maker of at home fitness equipment, says it's seen a return to revenue growth fueled by sales of its tech infused Tonal to the company has experienced a turbulent few years after Pandemic era lockdowns lifted and people went back to in person gyms and fitness classes. Let's talk more about the company's turnaround efforts with Tonal CEO Darren McDonald. There is a strategy now, right? A different environment to say 2020 through 2022 and I'm trying to make sense of what links it all. You seem to want to look at the high street a little bit and retail. What is your big strategy?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (21:57)

Well yeah, just in the past year we've actually rolled out from 19 locations to over 100 locations for distribution. So we now we have more places for people to see and touch and feel a tonal product, which is incredible because we have 75% NPC and some of the lowest churn in the category. So giving people an opportunity to actually experience this system means that people end up buying. And so just we want to really focus on that.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (22:19)

Tonal systems are still higher end. And if we learned anything from a couple of weeks ago when Peloton had its latest change in strategy, people are still very sensitive to pricing. They want more for less. What's your strategy for pricing?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (22:34)

Yeah, you know, we feel like we've got the world's leading strength training system. It's. It's a personal trainer on your wall. It's a full gym. You don't have to think about it in the sense that we personalize all the weights for you. So there isn't anything out there in the market like what we do. So the fact that we can personalize the workout, we can adjust weights in real time, we'll move weights up by one pound or decrease it by one pound, or if you're not doing well and you don't have to think about it at all. And from our perspective, because of our platform and the way it's built, which just sits on top of AI, it's not just entertaining you, it's really a strength training system that works with you.

Caroline Hyde (23:09)

And you are offering more to those who already have one. With Reformer Pilates options being built in Darren and Unfolded. But I'm interested in the artificial intelligence part of it that has been being baked into everyday workouts on the tonal. How you make embracing it.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (23:24)

Yeah, well, as you said, Carolyn, we're super excited today to announce the fact that we're working with Chris McGee and we're announcing our Pilates system. You know what's really great about it is that what we see on our platform is that almost 2/3 of our members are interested in pilates, but only 17% of them are actually doing it. And the reason for that is pretty clear. You know, we've got people who have difficulty getting into classes. They're inaccessible. You have to drive to them. The classes losses are often difficult to find. And so we rolled that out on our tunnel system. We have force curves that are very similar to what a Reformer looks like. So as you move further away from from the machine, it actually increases in resistance as well. It's really unlike anything that's ever been offered out there. So now a greater part of our community is able to actually interact with something Like Pilates. And so you add that to strength, you add that to yoga, you add that to the cardio work that we do. And so to. To answer your question, around the AI component of it, we think we have the world's largest strength data database. So we have nearly 300,000 members lifting nearly 300 billion pounds. It's a tremendous data set. So as we learn about you and who you are, we can look at our cables and say, you know, somebody is lifting certain amount of weight, a certain amount of reps, force, velocity, range of motion, all of those things, which helps us to define what outcomes could look like for somebody. So people get stronger on Tonal than any other system.

Caroline Hyde (24:49)

It is a premium offering. Would you ever think about having cheaper offerings or just the application, as we've seen with Peloton, for example?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (24:58)

Yeah, we don't have anything to announce today, but we're certainly looking at alternative opportunities for.

Caroline Hyde (25:03)

For our hardware.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (25:03)

I mean, we could move upstream, we could move downstream. But again, I would just refer back to the fact that nobody has anything quite like what we have.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (25:11)

Just very quick, before we let you go, you know, you've raised money in the past. Would you raise money just to keep growth going or what would the rationale be?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (25:18)

Sure. I mean, we're always looking to fuel growth. So, you know, in terms of developing new hardware, in terms of acquiring new customers, expanding any new modalities, as we're announcing today, we think there's an opportunity for us to keep that.

Caroline Hyde (25:29)

Keep that going, keep that going. We really appreciate it. Darren McDonald, CEO of Tonal on the latest announcement when it comes to reformer Pilates and the growth story. But coming up, and we've got so much more to discuss when it comes to. Salesforce's Dreamforce conference kicks off today. We're going to speak to may have a writer and Mattie Stanislavski of eleven Labs. This is all about the integration of AI and the future of enterprise software. Basically, today the key question is, are we in an AI bubble? How much, therefore, are we seeing a return on AI investment in the enterprise? Look at what the impact though, is of China, us as well.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (26:06)

Funny day in the market. So we're down about a percentage point on the NASDAQ 100. I'm still recovering from Friday where the president broke that news at the top of our show. And then markets went into free fall. But the blanket theme is the same anxiety about trade and unknowns about the relationship between the United States and China, particularly in the context of technology. The outlier amd doing deals all over the place. This is Bloomberg Tech. Welcome back to Bloomberg Tech. I'm looking at the markets and here are some technology stories we haven't got to yet. The first is Wal mart up almost 3%. What do you think it is? It's a relationship with Open Air, an API integration into Chat GPT sending the stock stock high just like we saw with a number of names that Open Air dev day. Wal Mart is the latest to do a deal in the E commerce context through integration in chat GPT also the chip sector. So we talked about AMD. AMD's paired some of its gain relating to the Oracle deal which in King explained to us is separate from that Open Air arrangement. On the downside is Nvidia down 3.6% it fell in recent days because of the tensions with China. I don't really think see a specific piece of news or a catalyst that's driving this down lower. There was of course the Broadcom and Open Air six news of yesterday. They're all names we track because they're moving the markets.

Caroline Hyde (27:36)

Carrie, let's talk about the moves in the market just of late in the valuations that they're at because global fund managers they are sounding the alarm bells on stocks with a record share, more than half saying they're in a bubble. It's all according to the survey by bank of of America. Meanwhile over at Citigroup, CFO Mark Mason also out with a warning when questioned by analysts saying that there is signs of frothiness in valuations. Let's get to Bloomberg's equities reporter Ron Vas Delica. I mean the noise is becoming deafening.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (28:05)

Absolutely.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (28:05)

We have heard almost daily warnings from.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (28:08)

People about overvaluation in AI stocks, some kind of bubble brewing, concerns about sort of the circular nature of some of these financing deals, a lack of detail that people want. Yeah, certainly there is a growing, growing concern. Although I also would say there continues to be a lot of optimism about the long term path of AI, the long term productivity enhancements it is expected to deliver. There's still a lot of optimism that these companies will eventually see some pretty amazing returns from all the investments they're making. So certainly a lot of bulls but also a lot of bears.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (28:42)

Ryan, there's a lot of headlines around sales force on the terminal today, many positive, but the Stock's down almost 2%. 1 I see that you filled with the team is that Salesforce has been cut at Northland. What's the analyst saying?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (28:56)

I believe he was discussing a lack of Real growth acceleration from his Agent Force AI product. He's not seeing it showing up. And crpo, that's current remaining performance obligations. He's not seeing it show up in average revenue per user.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (29:09)

Now, Salesforce does have a team Agent Force event today.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (29:12)

I haven't been able to monitor it. So we are hoping to see some new details maybe about adoption if they.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (29:18)

Give any kind of insight into how.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (29:20)

Much revenue growth they're seeing from this overall adoption rates. I mean, that's all going to be very critical for the stock. But this is one of those software companies that has really been struggling this year even amid all the AI optimism. There are a lot of software companies that have really been sort of struggling against the perception that Maybe, you know, AI native companies, notably OpenAI, are these.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (29:39)

Companies going to really represent some kind.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (29:41)

Of competition to them that's very difficult to shake. So people looking to this event today really as an opportunity to help counter that narrative.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (29:49)

Bloomberg's Ryan for Celica. Thank you very much. Now, as Wall street debates whether stocks are heading into bubble territory, Salesforce is doubling down on the technology. Dreamforce 2025 kicks off today, bringing together celebrities and tech leaders to explore the future of AI in the world of enterprise. Among the featured speakers, eleven Labs CEO Matthew Stanislavski and writer CEO May Habib, who will appear together on a panel titled Rewriting the Enterprise Playbook with AI. Please to say they both joined us now here in San Francisco. May I start with you? You heard what Ryan just said. I know Writer to be an LLM focused company, company agent tech, AI focused company for the enterprise. Either you beat Salesforce at that or you work with them at that. Which is it?

Caroline Hyde (30:39)

Yeah. What we do is help companies rewire operations to be AI native. And so partnerships with companies like Salesforce are really important part of that. So it's definitely the partnership angle. But there is something to be said around doing things AI native and being able to start with a blank sheet of paper versus, you know, layering on a Gentex into, you know, a system of record that has existed for a while. Yeah, you've kind of wanted to build it from the ground up, May, but I turn therefore to Mattie. And when you're thinking about the audio applications of artificial intelligence, we've had you on the show to think about how now music can be created by just writing in a few key prompts. How are companies adopting 11 labs appropriately with a return on that investment? Is it with a Salesforce or is it from the ground up?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (31:26)

Caroline, thanks for having me here. We've seen an incredible shift over last year where the combination of Voice and conversational agents can elevate a customer experience for customers across Fortune 500 all the way to some of the highest scaling startups. And we've seen both. We've seen companies built using some of the best in breed technologies including voice, like you said, all relying on the entirety of the of the platform. We are thrilled to be here at Dreamforce and as part of the work we do and be part of the voice for Agent Force powering that that work across across their platform. So we've seen both and in across the enterprise segment, quick adoption in that sector.

Caroline Hyde (32:09)

May we have loved how outspoken and clear you've been in pushing back on Perhaps, perhaps These narratives of 95% of all AI pilots aren't working when we think about the MIT report that really rocked the market. But it's about nuance in this conversation. May so bring us that nuance of when is it working when they're adopting. Right. Either from the ground up or indeed within Salesforce offerings. Yeah, AI is not another software upgrade. You can't outsource it to the CIO and expect results. You know a lot of what we do is go to executives and CEOs and say look, this is about you. Sometimes you kind of want to shake them. Like this has got to be a top down, very heavy mandate to rewire processes end to end. If you leave it up to people, a lot of what they're going to be doing is personal productivity stuff with AI versus the high leverage things that executives certainly want. And as you've seen in terms of what the market wants and this continued investment in AI, what people are expecting from this enterprise investment.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (33:06)

Mattie, what you and may have in common is your private companies. You're free from the scrutiny that public companies are. But in the last segment we talked about how some of the analysts that cover Salesforce are skeptical about Agent Force in particular. You've just said to us, both of you, we actually do see adoption in the enterprise. So what does that tell you if the data for their products specifically isn't.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (33:34)

As strong like our focus is predominantly on working across our work at 11 labs and we've seen use cases across E Commerce elevate where where you suddenly can not only have customer supporting of a customer experience where users going into the product, going into the site will be able to interact with agents to help you shop through the product all the way from the start. It's a good company in Mobilio, one of the biggest in Italy working on use cases like this. And we've seen this scale across, across wider degree of segments in financial services and in technology and health care. What I think is true and key as you think about Salesforce, their distribution across clients, of course stretches all types of industries and including regulated industries. So it will take a slightly longer time to bring a lot of the technology into those industries where, where additional deployment, additional integrations to existing stock are slightly more complex to some of the companies. And in the space.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (34:38)

May, when you're both on stage with each other later today, what's kind of the one key thing you want to get across about what is happening among your enterprise customers at the moment, what you're fighting with each day or what your most focused on?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (34:50)

On.

Caroline Hyde (34:50)

Yeah, this is. We are hosts of Salesforce, right. They are wonderful partners and I think a big part of what we want to impart to that audience is how do you make the most out of your data investment with agent tech AI? And I think both of us have got companies where enterprises are getting real ROI right from our products and really helping bring that to the data they've got in the Salesforce ecosystem is going to be one of the things we talk about. What's so interesting thing really Mattie, has been the ongoing anxiety among that enterprise workforce about whether they're being augmented or whether indeed they're being replaced. How do you continue to try and tell that story, particularly when you're in the world of music, of, of, of ip, of real individuality and creativity?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (35:37)

For us it's extremely important to work with the industry together. So our music is the first fully licensed music model at incredible quality, working with our research team and that's the approach we've taken across voice, across music, across as we build conversational agents. But like you say, AI is bringing change in. The way that we've seen this across, across enterprise, across the companies we work with is people using AI will be the people that will unfortunately replace people not using AI. So that adoption, both in the enterprise segment setting and across the wider global setting, it's all about being the user, trying it out and bringing that to, to your work.

Caroline Hyde (36:15)

And may, when you come on, we've always been very keen to ask you about your growth trajectory, but also the haves and the have nots in the space, how much you still having companies, smaller companies call you up saying hey, we'd like to team with you, we'd like to offer you, we'd like to have some sort of buyout. Are you seeing that coming from VCs just being more discerning, putting money for the winners but taking away from those that aren't hitting scale. The bar for sharp differentiation has never been harder. I think with the hyperscalers just flooding the zone, it has been such a challenge to make sure the enterprise understands what's real, what's what. And I think that's just getting harder for smaller startups to enter the enterprise as a result. You know, we were lucky in that we started buildings for the enterprise five years ago and so a lot of our long standing relationships, you know, have been a result of why we land new customers in these spaces. And I think that is just getting harder because of the hyperscaler investment. But there's just so many categories. The enterprise needs so much help and people are not focused on it the way that startups can. So still a ton of opportunity, but yeah, absolutely getting harder here and we love having both of you on to talk about that opportunity. We're excited to hear from you at Elseforce Dreamforce as well a little bit later may have been as well. Matty Stadiski, we appreciate you of course, of writer and 11 labs coming up, Tara Hopkins, Global Director of Policy at Instagram, joins us to talk about the company's new PG13 content restrictions for teen users. That's next. This is Bloomberg Tech. Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make your business growth their priority. The Chase team takes the time to understand your mission, where you are now and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools. Looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more@chase.com business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates. May apply JPMorgan Chase Bank Naomi Member FDIC Copyright 2025 JPMorgan Chase & Co. Okay, creativity and organizing ideas don't always go together, but Canva brings them together seamlessly and it adds so much. It's like this. You've got a vision, great idea for, let's say, a presentation. The presentation in your head is a 12 out of 10 standing ovations for you and your boss raises all around. But turning the presentation in your mind into an actual presentation, something else entirely. There are like two dozen complicated apps involved. Not enough time. And to be honest, you don't really know what you're doing. With Canva, you can bring all your ideas together in one place with one app. Use AI to speed things up, and bring other people in to help, because teamwork makes the team work. I might have gotten that wrong. Point is, your presentation will look great. You'll look great. Everybody will look great. And isn't that what you're after? There's a reason 95% of Fortune 500 companies use Canva. Canva lets you bring your ideas to life as fast as you can think of them. Put imagination to work@canva.com 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 Instagram will prevent teens from seeing content deemed inappropriate for PG13 audiences is a new move following Instagram's launch of Teen Accounts last fall. And that already offers stricter settings and comes as its parent company Matter and indeed the wider social media industry rebatt the narrative that they expose young people to dangerous content. So let's get the details. Instagram's global director of policy, Tara Hopkins, I'm pleased to say is here and I think it's worth in a nutshell, Michelle, explaining what Teen Accounts now provide, you've added on new updates today. How are we restricting content?

Tara Hopkins (41:07)

So, Caroline, as you said, just to take a step back, we launched Teen Accounts in the US and now globally last year. Teen Accounts was to address the three things that parents were most concerned about about their young people using Instagram. It was about unwanted contact. It was about the time they're spending on our app, and it was about inappropriate content and minimizing the amount of inappropriate content a teen would see on Instagram. What the update is today is specifically about that inappropriate content piece of this because we're continually learning from parents and what they told us was they were a little bit confused about the different settings and the different trolls they were a little bit confused about when we talk about what is age appropriate or what, you know, how we age gate and that kind of, you know, tech speak that a lot of parents just don't really understand. So what we've done is we've revamped teen accounts to be guided by PG13 movie ratings. Really trying to speak the language of parents who are much more familiar with the movie rating, movie rating standards. And as of today, it's going to be rolling out to all teenagers under the age of 18 who are defaulted into this so they can't opt in or update. We're going to be moving them into teen account experience over the course of the next few months.

Caroline Hyde (42:13)

And when you're deciding whether content or a content creator is generally PG13 or not using artificial intelligence for that, how.

Tara Hopkins (42:21)

We do we use artificial intelligence? So the first thing we did was we reviewed our policies, all the guidelines we have around what is inappropriate content for a team. So what's, what's appropriate for a team. So we did that review on Instagram. And then what we've done is we've built the classifiers or our technology, the AI that we use and we've retrained it on some of these new roles, rules and tweaks and adaptations we've made to the policies that goes out across the system. And then we, we find content that we don't believe to be in that PG13 movie rating kind of space.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (42:51)

Right.

Tara Hopkins (42:51)

We will either hide it from teens or we'll remove it entirely.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (42:55)

Tara, there's still questions about from how the technology and from a policy perspective, you define what is or what is not PG 13. So could you answer that more specifically on a post by post basis? How is a decision made? This is or this is not PG13?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (43:13)

Yes.

Tara Hopkins (43:13)

So the first thing is you don't rate if you're on Instagram and how this is going to look and feel if you're a teenager on Instagram. Now, first of all, we're going to be sending a notification at the top of your feed for teenagers to let them know what we're doing here, to let them know that we're going to be aligning and guided by PG13 ratings. What it will look and feel like if you're, if you're a parent is hopefully that they will understand. Again, we're going to be sending notifications to parents, again, really trying to speak the language of parents. What we've done is we've made some changes to the policies so that if you're thinking about a PG13 movie, that's the kind of experience your teens are going to have. So a good example of that would be around cursing. So profanity, we've always had rules around profanity on Instagram and there's certain things you can and can't say, but on a PG13 movie, they have very, very specific standards around this. You can use one or two to quite strong curse words and then other, you know, less, less, more minor curse words. So what we did is we looked at this. We're not apples for apples, of course. You know, we're a social media company as opposed to making movies. But we thought what would be the equivalent on Instagram? And the equivalent on Instagram is we're not going to be recommending content to teens that has severe, what we would describe as severe curse words. So we trained the AI to find those types of curse words and we will remain move them so that we're not going to be recommending that kind of content to teens.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (44:30)

Tara, what other protections are you thinking about doing additionally going forward?

Tara Hopkins (44:35)

So we're also announcing today two further things. One is that we're going to be giving parents more control if they wish to. So again, these, this update is for all teens under the age of 18. When we know you're under the age of 18, you're going to be moved by default into the PG13 or the Plus 13 setting on Instagram. That's the first thing. But if a parent wants to go that step further, we're really going to help parents to do that. So one of the additional, one of the other things we're doing announcing today is that we will have limited, even more limited content control. Parents can go in and they can have a look at that, they can talk to their teen, have a conversation with them, particularly if your teenager is in that younger category. You might want to limit the content even further.

Caroline Hyde (45:15)

Yes, briefly, you got tens of millions, millions of teen accounts. How many are trying to opt out, navigate those age rules? How are you ensuring that they do remain within those age catchments?

Tara Hopkins (45:26)

So we now have hundreds of millions of teens in the teen account experience, which, which has been, which we launched last year, which is really good news. We've been able to do that technically, which is a pretty big challenge to be able to do that. We know that 97% of teens that we've moved into the teen account experience have not tried to change those, those more protective settings when they're in the younger age category. So teens below the age of 16 cannot change the settings we set in teen accounts without getting a parent's permission. We're going a step further with these content setting changes which is it's for every teen under the age of 18 but they can't change them unless they get a parent to approve it as well.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (46:04)

Tara Hopkins, global director for policy for Instagram, thank you very much for joining us us here on Bloomberg Tech. Okay, coming up, Europe races to prove Jensen Huang wrong about their capabilities. That Bloomberg deep dive next. This is Bloomberg Tech.

Caroline Hyde (46:30)

Time now talking tech and first up, SpaceX. Well it's pulled off another successful launch and return of its Starship rocket which deployed testing satellite into orbit. Elon Musk's space company still has to demonstrate and master several novel technologies to meet its goal of a lunar landing in the next two years. Plus Apple well it set a release date for the launch of its super thin iPhone Air in China. The phone will be available in stores later this month after a pause that allow local carriers to prepare for the device, which is ESIM only. The news coincided with a visit to the country by Apple CEO Tim Cook. And Google is planning its biggest investment in India yet, about $15 billion to build an infrastructure hub in the south over the next five years. India has been one of the biggest winners of the global air boom and the project will help accelerate local government efforts to expand the AI industry.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (47:20)

And Nvidia's Jensen Huang issued an AI warning to Europe and France over the summer. You are too slow. Now European leaders are working to prove him wrong, with many committing billions to homegrown AI startups and services. Bloomberg's European tech reporter Mark Bergen has been writing about Europe's attempts at catching up and joins us now. Jensen Huang says you are too slow at sort of an EU wide level or country by country level. What is it that they're actually doing to prove him wrong or at least catch up?

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (47:52)

Yeah, that anecdote from our story was like the lead of it was a dinner hosted by Emmanuel Cronin in a way before his government collapsed. France was seen as the vanguard here. They had that this earlier this year they announced the largest data center project in the eu. They have Mistral, which is the closest thing that Europe has to sort of an open air rival and a lot of money and public support from the government. The European Commission, European Union has put money behind chips behind what they call these gigafactories, basically large datacenter projects. If you compare the funding though to the US and China though, obviously Europe is still lagging third place.

Caroline Hyde (48:32)

When we think about the key players of Europe, they do have some standouts. Asml. When you think chip equipment making, you've got SAP bringing it to the enterprise. But where else are they trying to grow their own talent and indeed risk pushing back though the US US influx of money that seemed to come with Jensen's last visit.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (48:51)

Yeah, I think there's a couple of things happening and we can't try to capture some of the debate. There are, you know, Jensen has been kind of teased Europe for moving too slowly. Clearly he wants them to be buying more Nvidia chips. And there are others that are argue that maybe this, this, this sovereignty, this idea of independence from the US and China means not relying on Nvidia, not relying on OpenAI, not relying on Microsoft and the cloud providers. That's a lot more difficult. I think the cloud is where we're starting to see some really interesting Neo clouds. Nebulous is a Dutch company here that spun out from Russia's Yandex that's had a really fascinating growth trajectory. We've seen a lot of these new cloud companies come up in Europe. Some of them are really positioning themselves as alternatives to the US providers and.

Caroline Hyde (49:36)

Scale being another key name we keep hearing about. Mark Bergen, great story. And what you don't want to forget is we're going to dive into all of these topics. So much more next week during Bloomberg Tech Summit sale being hosted in London is on October 21st. But meanwhile, that does it for this edition of Bloomberg Tech. And a lot to digest in terms of geopolitics and in terms of valuations.

Bloomberg Host/Interviewer (e.g., Caroline Hyde or another Bloomberg anchor) (49:59)

Yeah, there's still a little bit of anxiety in technology markets. It's largely focused to trade. Salesforce is down 2% on the day that Dreamforce kicks off. How's that going to go down? You can recap that on the podcast. You know where to find it. It's online on all those platforms. It's on the Bloomberg platforms. Big week ahead. This is Bloomberg Tech.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (50:25)

There are two kinds of people in the world.

Caroline Hyde (50:27)

People who think about climate change and.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (50:29)

People who are doing something about it. On the Zero podcast we talk to.

Caroline Hyde (50:33)

Both kinds of people.

Bloomberg Reporter/Analyst (e.g., Ed Ludlow, Mike Shepherd, Bailey Lipschultz, Ryan Vas Delica, Ian King, Peter Ellstrom) (50:34)

People you've heard of like Bill Gates. I'm looking at what the world has to do to get to zero, not using climate as a moral crusade and the creative minds you haven't heard of yet. It is serious stuff, but never doom and gloom. I am Akshat Rati listen to Zero every Thursday from Bloomberg podcasts on Apple, Spotify or anywhere else you get your podcast.