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Let's bring in our global autos Zar right now. Craig Trudell joins us out of London. He covers all the carmakers and has around the world, but focuses in because he also is the editor of the Hyperdrive newsletter.
On EV's and we're seeing really.
A changing, a changing c here in terms of EV demand, Craig, certainly in the US, and that reads out well in the drop in Tesla sales, doesn't it.
It absolutely does, I think.
You know, it was interesting earlier this week to see Tesla come out with its own company compiled census.
For these delivery figures.
You know, it's sort of turned a lot of heads because the average estimate that they put in in their release was much lower than the Bloomberg compiled average estimate. It turns out that Tesla came up short even of their own lower.
Expectations that they pulled together.
It wasn't by much, and so we're not seeing a huge move in the shares at least for the moment. But we did see the company's stock price kind of stumble in the last few sessions of the year, perhaps in anticipation of the fact that these numbers were going to be a bit soft.
How do what's the view out there in the marketplace at craig about how committed Tesla is to its core auto business visa vs. Some of the other businesses that Tesla's involved in. That seems to have attracted Elon's real attention and the attention to the marketplace in general.
Yeah, I mean, I would say, you know, if we were to sort of break down, you know, maybe use Groc his chatbot to break down how much which he's talking about his humanoid robot optimists versus you know, Tesla's sort of core business, I think it would be no contests. I mean, he does also talk quite a bit about robotaxis. And yet in terms of execution there, you know, we have vehicles in Austin and in the San Francisco Bay
area that are operating still with people supervising upfront. And you know, yes, the company did do some testing towards the very end of the year, you know, some driverless testing, but you know that would put them years behind Weimo on that front.
You've not seen them scale up a.
Quote unquote robotaxi business the way Weimo has now in many cities across the US.
Craig.
We had a Bloomberg client writing in earlier with the tongue in cheek comment about how many robots Tesla has sold. But it's interesting, you know, the company is valued at one and a half trillion dollars, not because it sells one point eight million cars a year, but because investors have faith in Elon Musk's I guess creativity and success in future endeavors like robots.
What do we know about what else Tesla could do to make money?
Yeah, I mean I think that's a really good question, and I guess I would put that more so focus that more so on the question of robotaxis. And I think, you know, with Waimo, we know very little at this juncture about you know, just how profitable Weimo's business is. I think we can you know, make a pretty informed, you know, assumption that they're losing quite a bit of money. The company is regularly raising a lot of cash from
primarily from Alphabet and has knock gone public. So we've not seen you know, what sort of figures they have internally, but you know, I think that's one of the things that's going to be interesting to watch play out in twenty twenty six is, you know, everybody is very excited about robo taxis, and for good reason. It's really neat to sit in a car with no one behind the wheel. The question I have is, of course, you know, how quickly can we scale that capability in a way that's
actually generating money? And I think, you know, some people are willing to give us the benefit of the doubt, as you mentioned, and willing to also take him at his word that he can scale quicker, you know, sort of over a longer time period. But in terms of you know, here and now, who actually has cars on the road that don't have drivers behind the human drivers behind the wheel, Weimo is ahead of Tesla, and it's not at all close because we've not seen Tesla actually commercialize that.
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Let's talk about deep Seek. Yes, it is back in the news.
Deep Seek is going to soon release new AIMI model that could up end.
The sector like it did just a year ago.
The company just published a paper that outlines ways to develop AI that improves scalability while reducing the computational and energy demands of training the model, or so it claims to. Let's bring in Bloomberg Tech co host ed Ludlow, who's in San Francisco.
Ed.
Is this going to do the same thing as.
Last February when the markets are roctions or are we sort of used to the fact now that other people can do AI too?
Yeah, it's certainly kind of a repeat of the format that Deep seekers is kind of utized, where they publish a white paper and the white paper or research and it kind of explains that because of constraints on Chinese technology companies, principally a lack of access to the lead edge AI chips, they have to get clever from a computer science perspective on the architectures, how a model is weave together, how it is trained, the data it uses,
et cetera. And again they've just published a white paper that would suggest they found another way of doing that that, as you pointed out, it's computationally and from an energy perspective, much more efficient. But it's often a precursor to the
release of a wider model. So what we're waiting on is what most people refer to as deep seek are two the kind of next large scale frontier model and the expectations that that will come in February or March, and depending on how it performs and ranks in the tables, could potentially upend the kind of marketplace right now, which includes competition with American frontier labs for models.
So if we had that deep seek news again a year ago and it really up ended the market, yeah, is it just me that I haven't really heard too much about deep seek since then?
I mean, yeah, I don't know. I mean two things.
The first is that deep seek has continued to work on smaller models with fewer parameters, and it takes time to train very very large models. But kind of what happened in the kind of eruption of February, March and April of last year in the financial markets is when Deep Seak started publishing its evidence and the performance of its models and what it took to train them. Everyone was like, well, huh, hold on a minute. It didn't
cost you guys very much. It was a lot cheaper than what the American companies are doing, and you didn't have access to all this technology that is propping up the entire market, right, and so it kind of raised the question why are we so bullish and all of this in America's context, like all of our evidence for this market rally or to that point, because remember, like within video in a mag seven, this was a multi year thing was because of all the spending and the
performance of those chips. But the present day, the way that we compare the performance different models is peer review and performance tables and in the kind of free, lower cost Chinese models are up there. And so that's why we're kind of bracing for R two and what it might show us in terms.
Of performance ed what do we know about what chips Deepseek is using And was there just a little bit of skepticism that maybe Deep Sea might be using some kind of in video chip at one point.
Yeah, there have been media reports that deep Seek and other Chinese firms were able to get access to the latest generation of Nvidia GPUs by acquiring them from data centers in permitted countries, disassembling those data centers, and then essentially smuggling them through a third country. Go on to Bloomberg dot Com or the Terminal read the very detailed reporting on that. There was also a lot of skepticism about that reporting because right now in Nvidia is severely
supply constrained. Any demand that's out there accounts for all the chips they're ever going to make, and as one source put it to me, you don't just sort of see thousands of black well chips go missing, such is the demand for them. So it was something that at the time in Vidia issued a statement straight away and said, you don't see any evidence of sort of these missing chips that are being smuggled through different countries. But therein lies the point of why you're asking me about deep
Seek and it's white paper. It's what China's technology companies are able to do without access to those chips. That is the main focus.
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From January to year round moderation.
Non Alcoholic beer is booming. Bill Schufeldt is the co founder and CEO of Athletic Brewing Company. I'm sure you've seen those cans in the stores or perhaps your local bar. It's one of the nation's top non alcoholic beer brands. He joins us now in studio to talk about what's on tap for Booseless SuDS. So, Bill, this is an insane growth story that you've just been telling me. So you started actually what ten years ago, and now your ten x or the market is ten x.
Explain what you were just telling us.
For sure, it's it's been a really fun ride. We started the non alcoholic beer market basically had flatline for thirty years before ten years ago. Where we came in and liked to think we reimagined both the product and the marketing of the category, taking out of the penalty box into the mainstream with delicious flavors, and we've taken it as a category from about one hundred million to passing a billion dollars in the US market this year,
and we think that could continue to grow. We expected to five x in the next ten years, with Athletic being twenty five percent of that market. Right now, Athletic is about eighteen point four share the total category. The next biggest is about fourteen and a half share, and that it's another four point dropped to the next brand
behind that. Athletics also fifty two share of the non al called craft beer category, which has well over one hundred brand So we're outsiding the next one hundred plus combined. And it's really meeting those that next generation of consumers where they're at.
What's been the response competitive response from some of the big brewers, which I can't even know the names now they've all merged into one big entity, I think for sure.
So as you've heard on this segment before too, over forty percent of consumers are doing dry January this year, Over fifty percent of consumers now view one or two drinks today as unhealthy, and a record low number of Americans are also consuming alcohol on a weekly basis. So this is a huge growth opportunity for the adult beverage market,
and a lot of companies relate to that. But over the last five years, basically every major brand has entered that category with an alcoholic analog to our non alcoholic analog to their full strength version, and we really appreciate that support and growing the category.
It's so funny to me, because I didn't have an alcoholic beverage in my life until I was nearly thirty. I think, and I wonder what makes somebody reach for a non alcoholic beer when there are so many other drinks that are already non alcoholic out there.
For sure, it's so when we start Athletic and I would try to get people to taste samples or buy one of our beers. Getting people to cross that barrier was so hard seven or eight years ago. But I think the light bulb that goes on over and over again for people is that it is such a delicious meal pairing at a fraction of the calories as a
full strength alcohol equivalent. For example, we were just talking about before I came in, how our Athletic light is twenty five calories no sugar light and carbs, but a full taste that's like a perfect guilt free weeknight beer. And then we brought a ton of innovation to the market too. For example, we're now launching an excited lineup of non alcoholic brewed cocktails this January at select retailers like Target, and all these different fond flavored.
Like what give us a foretaste?
Yeah, so we have off that Athletic light logger. We have an Athletic Light Limeman salt launching this year, and in a typical year we launch almost fifty different styles of beers on our website Athletic Brewing dot com. Where before Athletic Brewing this category was a logger only category. So from day one, we've really blown the lid off what taste and availability can be in this category.
Who's typical athletic drinker customer?
So when we came into the category, this category was typically a lapsed alcoholic drinker. It was very male heavy, it was an older population generally, and since we've redefined the product and marketing of the category, we've seen that
drift younger and younger every year. We think forty five percent of our consumers are below age forty five very heavy in gen Z consumers really, as people have grown up in this digital generation where you have your work in your pocket at all times, everything in your life is filmed and recorded and on record. And people still like to drink, but then they like to zebra stripe and work in non alcoholic and options.
Like zebra striping. And I heard that and I forgot it already.
Yeah, sorry, jumped right over that. It's it's basically we And this has been shocking to me. I hear from bartenders all the time that people order alcoholic drinks non alcoholic alto.
Oh okay, I got you.
Okay, it's a brilliant idea. You could put food in there too, That would actually be a better idea. Curians, how do you do it?
You have so many options and as you say, you're trying out different ones all the time, I mean, are you very.
Non profitable or how does it work? That costs a lot of money?
Well, at the end of the day. In our retail lineup, we're very focused. We have a core group of about five beers which are very popular and highly awarded. We won thirty three Taste Awards last year alone and have
won about one hundred and eighty five Taste Awards. Since you know, there's there's been a plethora of entrance into this category from major brewers to there's been ten celebrity brands with more on the way, and almost none of these companies make their own beer, where Athletic has gone the other way. We invested one hundred and thirty million into our own manufacturing, our brewing quality teams, and ultimately, consumers like to know, they want to get the best
products and like to know what's behind their products. And after that celebrity hype, they've really loved what they found in that Athletic and so we really try to stay focused in our retail lineup and bring people the best beers over and over again.
I got to put my investment backer hat back on. How do you capitalize your company? Always fascinate to see how these private companies and entrepreneurial companies how they fan themselves.
Yeah, it's such an interesting Like I came from the financial world, it's such an interesting world these days between private and public capital. And we've been so fortunate to have great access to private capital, from angel investors to private equity investors like Aligance. Consumer growth in General Atlantic and an institutional investor in Kurg Doctor Pepper, and that's afforded us the opportunity over the past eight years to invest one hundred and thirty million dollars into our US
manufacturing base. Non all called breweries and taperms weren't a thing before Athletic in the country. We built the first one, and since then we've built them that are one hundred times the output of the original brewery on both coasts and in that world we have found really good access to private to capital in the private market. But ultimately it is really exciting for us to think about potentially being a public company or running a long term private company.
Yeah.
I want to ask you more about that, but first I have to say the marketing is brilliant because you're you know, you're a nonancoholic brewery, but you're targeting athletes and people who go for hikes and you know, serious mountaineers and dog lovers and outdoors the people. I mean, it's just it's amazing. So what is the trajectory that you see before going public? I mean, you're going to open breweries around the country. Are you going to have you know, bars?
Is that?
Is that something that can be profitable now to the bottom line, or you know, is it better to have people just subscribe and sort of have it as a you know, beer as a service software is Yeah.
Well, in terms of our target customer, I basically built the target customer around my lifestyle because I was authentically living this as a busy professional, love the outdoors. Seventy percent of the population considers the self an athlete. Even though you'll never find me on any podiums anywhere. I love being out there and participate, and so it was really about that health and wellness trend. And then yeah,
beyond that, our awareness is still very low. It's about twenty five percent nationally, so we have and our distribution is only about thirty nine percent with our top product, where a lot of the major beer companies, even in our category, even though athletics the number one, have double our distribution. So we have a huge amount of awareness and distribution to go over the next five ten years, and that allows us. We also are trying to open
the aperture who to who drinks beer? Where Beer over the past thirty years had been marketing the smaller and smaller audiences, and so this January bringing plans to We're working with Open Table with a big partnership to expand into the culinary world chefs and athletes and stuff.
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For more on travel, Now, let's bring in Dakota, Smith's co founder and president of Hopper.
Dakota, thank you so much for joining. How is business travel?
How's it come back post pandemic to the extent that we would have liked to come back.
Yeah, Hi, nice to meet you. The good news this travel is doing pretty well in the industry. It's mostly fully recovered since the pandemic. Business travel is finally reaching its pre pandemic levels and starting to grow. Visure travel has been you know, it's surpassed the pre pandemic levels probably in twenty twenty three.
So travel travel out look is still strong.
I mean, people are still spending on travel despite any biggering concerns, any greater economy. We just did a survey this year and Traveler said they spent just as much as travel on the twenty twenty five holiday season as they did twenty twenty four.
For example, how are people spending? What are they doing?
Is it's still the experiences that people are looking for.
Here people are spending.
I would say there's probably one trend that is shifting and has really accelerated post pandemic, which is people are using their credit card and loyalty programs more and more when they're booking travel. Obviously, that is partially to offset the costs. Those things lower the cost. Our business has
really grown around that. For instance, we power travel rewards and loyalty for probably about ten banks around the world, including Capital One here in the US, other banks around the world like Commonwealth Bank of Australia, New Bank in Brazil,
the world's largest neo bank. And we're building these like integrated travel rewards and loyalty experiences directly on the banking website or banking apps, so when people are using their credit cards, they can earn and burn points and kind of access all of these great travel products like some of what you were showing on your screen, And that's
a trend that's just really accelerated. Something like twenty percent, twenty five percent of online travel in the United States now is being booked directly through a credit card loyalty program and that's.
Just like much, much higher than it was maybe ten years ago.
How much do the banks play into that? You mentioned banks in Brazil and outside the United States, But how much are customers, you know, booking their travels through banks in the US. You said twenty five percent of travelers, but how would you increase that figure?
Well, I think it's been growing year of year. It's the fastest growing segment of online travel. So online travel is growing about five to six percent year of year, which is about two x the average GDP growth rate. And most of that growth is actually coming through this banking credit card loyalty segment. And there's some simple answers
and reasons for that. Fundamentally, the banks are offering really compelling value propositions and rewards to customers that kind of make these experiences some of the best places to book travel.
Right.
So to go back to my New Bank example, in Brazil, New Bank is offering its customers zero percent APR free installment financing for up to twelve months for all trips booked in new travel.
That's very compelling.
I think the average APR rate for installment financing in Brazil is thirty five percent elsewhere.
So that's one example.
When you look at Capital one, if you have the Adventure X card here in the United States, you can earn ten X points when you book a hotel on Capital and Travel that's functionally ten percent back for your next trip. You know, that makes a difference when travel is such a large.
Category Dakota, just in my own household. I think this is part of this is generational. Like the extent I go to is I have a Chase card that's branded with United because I'm captive to United here in New York.
Okay, So that's about it.
My daughter's got twenty seven different scams going any which way. She's got it on spa readsheet about points here, points there. What you need to do is it a younger generation more aggressively, I guess using point to trying to manage and capitalize on them.
I think short and series, yes, I mean the statistics are pretty clear. Gen Z is the generation that uses loyalty programs and credit card programs to book travel at the highest clip of any generation by a lot.
Yeah, So how are they doing that?
I mean, how do you keep track and all these partner airlines and all these you know, alliances between different airlines and so on. Does that happen in the hotel industry too? And you know who ultimately benefits from all of this?
I think ultimately the consumer benefits because it's the bank is functionally funding or offsetting the costs of these trips. You know, the average persons taking four trips per years. It's over ten percent of their total income. Humans are spending on travel. So anything to make that more affordable, I think just benefits the consumer. It benefits the economy, benefits the local regions who are receiving the tours and revenue and the tax revenue, and ultimately it benefits the suppliers,
right the airlines and hotels. The banks are making it easier for travelers to go through their hotel and to book a ticket on their airline. It is hard to keep track, but I think a lot of people spreadsheet, you know, can afford one or two premium credit cards. You know, there's a limit to how many of those you can have in your wallet. And you know, just choose the best one and it's a great place to book.
Are the are the travel is the industry? Are they embracing this? How do they view it? Is it? Is it some way to grow their business?
Yes, I think in the United States is furthest along of any country in the world.
You've seen this for years and years.
Right.
You can look at the earnings reports of the major airlines in the US and a huge percentage of their their income and especially their profit is related to their loyalty program and selling the points to their co brand credit card issuing partners.
So that that's a fundamental.
Part of the airline business that keeps it going, keeps it profitable. Hotels more and more, especially with the large chains, are doing those co brands and leaning into their points program too. So the interoperability between the airline and hotel points programs and the credit card programs is a huge part of that. And then I would say the US
is very far ahead. And then what we're seeing as in our business, we're doing a lot of global partnerships, so we're seeing a lot of other countries have been you know, a lot of companies in other countries have been tracking what these American credit card issuers are doing with the American travel suppliers are doing, and they want to share in some of that success too, so they're not as far ahead, but that's where we come in, and we kind of can bring them the greatest technology,
the most innovative technology in the space and help them kind of achieve those results in their markets for the first time.
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