Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hide in New York and Eva Though in San Francisco.
This is Bloomberg Tech coming up. Another setback for Apple's struggling AI efforts as one of its top executives leaves for Meta Plus. Amazon Prime Day kicks off, but already spending is down about fourteen percent.
We'll bring you the latest and we sit.
Down with the CEO of Core Weeve after the company's big purchase of Core Scientific for nine billion dollars. But first we take you to these publicly traded markets right here, right now, just erasing earlier gains. We're now trading about flat on the Nasdaq one hundred y Well. Clarity, it seems, coming from President Trump on a truth social post saying August the first, that is your deadline and will not be extended for the impact to be.
Felt of reciprocal tariffs. Remember, an awful.
Lot of negotiation still to take place, it would seem we also want to be digging into what's happening on the individual stock level. I want to shine, like what's happening in terms of Apple and Meta. We're up four tens percent on Apple and down about three percent on Meta. This all after once again, Meta juggernaut that is sucking AI talent with promises of tens of millions of dollars, takes a top executive, a top AI engineer from Apple.
Now we've already got some thoughts coming from lead investors such as Kathy would just take a listen to what she thought about the movement of talent to Meta.
What we've seen there is one turnover of management teams after another, and it's all you know, Autonomous driving is an AI project, just the largest AI project on Earth, we believe, and so losing the talent that it has, and as I understand it lasts another one today to Mark Zuckerberg's top fifty. So they've had a lot of trouble in this regard, and I think the burden of proof is on them.
And she learned that from our own Mark German, who broke the story of the Apple executive lead believing and Mark just dig into whom mister Pang is and why indeed he's left.
Yes, so Roman Pang. He is the distinguished engineer and manager of the company's Apple Foundation Models team, Now we talk about all these AI features, we talk about all these AI companies, but how does generative AI actually work well? Large language models? These are the models that actually power this technology, and so all of these companies are racing to get the best engineers in the world who can develop these models, and Pang is known as probably the
best of the best. He was the most respected AI engineer at Apple, the most respected AI executive at Apple, and one of the most respected model engineers in the entire artificial intelligence research community. So this is a massive swing for Meta, a major higher by Meta, and as big as a hired is for Meta, it's probably even a bigger loss for Apple. Yeah, in many ways, this was one of the guys holding everything together there. We've known their AI features have been struggling, we know their
models have been struggling. There's a lot of background, you can read all my articles about this as to why they've been struggling. But this is a pretty big loss for Apple. And I'm told in order to get paying into Meta, they had to offer him a multi year package worth somewhere north of two hundred million dollars.
That's an extraordinary amount mark and it paints a picture of the commitment coming from Mark Zuckerberg, but painting the picture of morale left over at Apple because more people like you to leave the Foundations Model team.
I'm told there are more people likely to leave the Apple Foundation Models team. Obviously, Paying is the most significant AI departure from Apple since the generator of AI boom started a few years ago. His top engineer, Tom Gunter, he last a couple of weeks ago from the Foundation Models team, and now Pang is leaving as well. I'm told he'll start at Meta in the coming days, and informed Apple yesterday that he would be leaving to Zuckerberg's company.
This certainly is the beginning I think of more departures to your points. Apple just does not compensate in the same way as Open AI or Meta. And what this has done is it's raised the idea within Apple that their points to need to start paying more to retain these people, and so far they've shown our reluctance to doing so. I'm told they didn't really make the counter offer to keep paying. They didn't do much to keep them. And when your employees being offered north of two hundred
million dollars, there's really not much you can do. These pay packages from Meta are nearing what CEO of the biggest public companies we're getting, So you can't really do that for a singular manager or engineer.
Money talks, so does a vision to win.
Mark Gurman, thanks so much extraordinary reporting as always.
Meanwhile, let's get the investor. Take here.
Jed Ellebrook's with us as portfolio manager at Argent Capital Management, and.
I just want to go broader here.
The commitment that we're seeing from certain companies, take Meta, but also Microsoft and Google. The so called hyperscaler is to invest with such certainty in winning the so called superintelligence race. Is this the right thing you want to be hearing and seeing?
Yeah?
I think it is.
This is an exceptionally big money competition. It takes really deep pockets to attract the engineering talent to get the compute power. So the big companies are flexing their muscles and showing great commitment, and they're seeing the demand signs
thus far that that effort is worthwhile. And I think it's going to continue, and I think we're going to get a really good indication of that here in a few weeks when Microsoft reports their fiscal fourth quarter earnings, they will announce CAPEX intentions for their next fiscal year, and I think we're going to see another big increase, probably not as big as last year, but still a double digit percentage increase to a number that's north of one hundred million dollars.
So, before I dig more into the hyperscale in the AI trade, jed with your more than two decades of experience managing money here in large caps, is Apple just one that you have to view in a different manner now the way in which the company sees future growth.
Yeah, Apple is a defensive tech business for investors. It is not a dynamic growth business, hasn't been for some time and won't be in the future. They're behind in AI capabilities and talent and resources, and that is a concern for investors. But I do think it was kind of interesting that a week or two ago, when word was got out that Apple was considering using anthropic and a open AI models more for their customer interactions on the phone, that the stock went up three or four
percent on that news. The market liked Apple de emphasizing its own internal AI research.
Effort, and that was Mark Guman's reporting as well.
So Pivot therefore, to the companies that are committed that are building the large language models. I know, in particular, you think Amazon's a winner here.
Why I do.
I think that their AWS cloud computing business is very well positioned to ride the wave of AI spending. Enterprises are deploying AI tools on their cloud platforms, and I think that AWS, Azure, and GCP all have really outstanding growth prospects. And I guess we should throw Oracle in there as well.
Interesting that Oracle is also navigating a future of more hurdles when it comes to accessing chips by the country. You think of Oracle, which has been investing a lot in Malaysia, for example, And we understand from reporting here at Bloomberg that maybe the administration is going to make it harder and get your own video chips into countries such as this without licenses. But I'm also interested more broadly about how any of these tech giants are navigating
the current trade environment. We've just had the latest headline out of President Trump that August the first is where he's sticking.
Yeah, I think he said. I think he said the opposite more or less yesterday. So it's hard to put too much stock in one day's worth of comments from him. But yeah, the big tech companies have incredible advantages. Their balance sheets are incredibly strong, They're producing prodigious cash flow, and they have you know, all the AI capabilities that we listed earlier, So they're ready to flex those muscles. They are ready to pivot and adjust, and I think
that they're all really well positioned to succeed. AI is a big money game, and is.
It one you want to commit more money to at this moment? Jed, we're basically near record highes.
Yeah.
I think for some of them the answer is yes. You know, meta valuation is higher than normal. I think maybe that's one where you don't need to rush into it right now. But I think others are you know, fairly compelling. Amazon, like I said, is our personal favorite Microsoft. Is that a huge run up here in the last month and a half. Maybe no need to rush on that one. In Nvidia, I think is pretty compelling, you know, exceptionally strong competitive.
Position with the GPU chips.
They they just sent out Blackwell Ultra, the first one into the wild last week.
That's going to be.
An incredibly compelling product for enterprises and hyper scalers to put in their data center. So yeah, there are places, I think where you can put money to work confidently today in businesses that are AI beneficiaries.
They said out into the world to call weave. And we've got the core vav CEO coming on a little bit later in the show. But Jen, last question for you. Is it all about American exceptionalism here?
Still?
Yeah, it's such an interesting investing environment today. We have, you know, I think a fairly moderate growth US economy, but with an AI revolution over here on the side that is very compelling is going to continue I think for quite some time, both the investment and then you know, the inference demand, the software deployment of these tools. So yeah, I think I think that the outlook for US stock markets, for tech stocks in particular, is pretty bright.
Urgent Capital Management, Jed Eliver, it's been great having your perspective.
Thank you.
No, let's shift gears and look at what the shares of Samsung currently doing trading in London as we speak ADRs, and look they are down by eight ten percent. Profit fell for the first time since twenty twenty three. In fact, it plummeted fifty six percent. This is once again about the chip maker not managing to win when it comes to high bandwidth memory yet.
But is this the bottom?
Some analysts feeling that way, investors feeling that way, particularly over at CLSA, and notably, we keep an eye on how these companies perform out of their earnings.
Meanwhile, coming up.
President Trump unveils a wave of letters again threatening key trading partners with high tariff rate impact on big tech is coming up next for you.
This is Greenberg Tech.
Wednesday was the original tariff deadline, but less than a handful of agreements are ready to announce, and President Trump instead is now saying his new August first tariff deadline will not be extended. Let's get to the latest bluegg's Balance of Power host Kaylee Lines is with us taking to truth social to well try and tell us this commitment to this one.
Yeah.
This is after he was asked at the White House yesterday Caroline if this was a firm deadline, and he said yes, August versus firm, though not one hundred percent firm, indicating some degree of flexibility. And it seems that's what he's trying to course correct for with this true social post today, saying that on August first, tariffs will start being paid. He says, there has been no change to that date, and there will be no change to that date.
I would just keep in mind that initially he had suggested there wouldn't be a change to the July ninth date either, and that is the action he signed yesterday to extend the deadline from July ninth to August first for various trading partners that we don't have trade deals
with yet. He of course, yesterday wrote fourteen letters and sent them to the heads of fourteen different countries outlining the tariff rate that they will start paying next month in the absence of a deal, ranging from twenty five percent for countries like Japan and South Korea up to
forty percent for countries like Mianmark and Laos. So he did say in the letter that if countries would like to open their financial markets eliminate tariff and non tariff barriers, the tariff set out in the letter could be revisited, so still leaving some wiggle room for negotiations here. The President, also in on Tru's Social today, is saying additional letters will be sent today, tomorrow and for the next short
period of time. So we do expect to get news on new tariff rates that are set on various countries, and we also could still see news on deals. Our understanding is that deals are getting closer for countries like India, for Taiwan, for the European Union as well. Signals that there has been progress there. It's just not clear when may be announced, in how robust they will be, or
whether or not. It's really just trade frameworks we're talking about here, knowing that the team that the administration has put together to work on these has struggled to make progress in a lot of arenas, not only because it's about the teri free countries could pay overall, but there's also sectoral tariffs to contend with existing ones like tariffs on autos and steel and aluminum, for example, but also ones that have been threatened that have opened Section two
thirty two investigations into them, like semiconductors and pharmaceuticals, and that could be a sticking point in all of these talks.
Caroline, and of course semiconductor's key to this audience putting bags, Kaylee lines, thank you so much. Now let's bring in Michelle Guider now from more perspectives, she is the CEO of the Kruck Institute for Tech Diplomacy over at Purdue. You served as an Assistant Secretary of State for Global Public Affairs under the first Trump administration that was twenty eighteen to twenty twenty. And Michelle, what the big picture we need to remind ourselves is what the ultimate goal
is here. Yes, they might have to push back deadlines, but the aim is to have fairer trade.
Oh, we actually be getting to that point.
You're so right, Caroline. The big picture is really important here. So let's remember that tariffs are a tool that are a means to an end of a very big objective here, and that is for America to both design and physically build the technology infrastructure that is going to be the
backbone of the free world in the next century. And so in order to do that, we have to build and in some cases rebuild a lot of critical industries here at home, and we have to rebalance the trade ecosystem in order to do that, because the current system
right now disincentivises our leadership and critical industry. It rewards offshoring, it punishes production here at home, and ultimately exports leadership in a lot of really important industries to countries overseas, and that can't be the case if we're going to lead in the new technology era. And I'll give you
a really good example. For the AI revolution to happen, we have to build a lot of data centers, and in the pipeline at the end of twenty twenty four, we had fifty two million square feet of data centers that we have to build in the United States. Do you know how much steel that that requires. It's billions and billions of dollars of steel. How great for that to be built by American companies with American workers, rather than from artificially cheap steel from international partners overseas. So
that's what's at sake. It's American leadership in many critical industries are going to be good for us, and it's going to be good for our allies.
Many would say, though, taking out of chips, looking at defense for example, or indeed looking at magnets and electric vehicles and the electrification of our economy here in the United States, we yet need more clarity on ultimate demand hearing time and time again than the defense tech startups that they need the DoD to actually buy the stuff commit to we're hearing time and time again that we can't start extracting rare earth that we don't have access
to in the United States yet because there's not clarity on whether the energy field will already transition the way that they thought, particularly as you see the big beautiful bill as so cooled, seeming to drown out some of that movement to electrifications. So, Michelle, how did they garner clarity and security here?
Well, when it comes to clarity and it comes to certainty, I don't think there was anything more certain than the fact that tariffs were coming. When Donald Trump was re elected president. It was a core pillar of his first administration. When I served as Assistant secretary, Fair and reciprocal trade was a core message that we were communicating to every international partner in one hundred and eighty five missions across the world. And you can even go back to nineteen
eighty eight. There's a interview that Donald Trump did with Oprah Winfrey talking about how he would revamp US foreign policy, and in that he talks about asking our allies to pay their fair share, and he focuses on allies, he says, because they're much easier to talk to than our enemies, and he highlights what country. He highlights Japan, and he talks about how they're dumping cars and dumping VCRs into the American market. At the same time they're making it
really hard for Americans to do BIS. So this has been a long time coming, but we're trying to rebalance a trade system that's existed for fifty sixty, seventy, in some cases eighty years across ninety countries. It's going to take some time, and some deadlines are going to be pushed, and it's going to be a little bit messy. But at the end of this, if American America can come out leading in critical industries, that'll give really good certainty to our businesses in the long term.
Should if we've got the talent to be able to do the manufacturing here, particularly as we look at making H one BVS is tougher, for example, I'd.
Say yes, and we would benefit from all the brilliant talent from across the world. The Crock Institute is based at Purdue University. It is the largest engineering school in the country, graduates more engineers than any other top university
in the countries. It's engineering excellence at scale that type of talent is ready for national security jobs in commercial industries and in defense industries that are going to matter to our leadership in the twenty for a century, and the same is true in many other places across the country. So we have the talent. What we need to do is incentivize the economic landscape and the trade landscape in order to let them flourish.
Michelle Geider, great to catch up with you at the Crack Institute for Tech Dipromacy over at Purdue. Now coming up, Amazon's Prime Day is kicked off, but shoppers they might not see the heavy discounts like years prior. We're on that next. This is Bloomberg Tech.
Time.
Now for talking tech and first up, your sensitive data or should from today be safer? After a Justice Department rule takes effect today after an end of a ninety day grace period. Now companies across sectors must now comply to the safeguard of bulk transfers and sensitive data from countries the post of National Security risk, including China and Iran,
plus Epic Games. While it is settled an anti trust case against Samsung alleging that the company was conspiring with Google in blocking rival at marketplaces.
By default, Epic dismissed all.
Anti trust claims against Samsung and Google, but Google remains defendant on several non anti trust claims. And some brands and consumers are sitting out on this year's Amazon Prime Day. Is President Trump's trade wark really rattles shopping sentiment? Some mergents are actually unable to offer discounts due to increased costs from tariffs. Some shoppers, well, they're planning to skip Prime Day altogether.
Prime Day spending has already fallen.
It currently seems fourteen percent in early hours compared to twenty twenty four. So let's get to it, Bloomberg, Spenser's Soapa and give us the inside track.
Is it all about tariff's here, Spencer?
Yeah, tariffs are definitely a key factor. This is like our first Prime Day, you know, since Trump's President Trump's Liberation Day tariffs, and that really just created Even though a lot of the tariffs are still on again, off again and being negotiated, it's just this cloud of uncertainty that has forced a lot of businesses to just be cautious. You know, how much inventory do we have in the country.
Do we really want to discount it? That deeply if we're trying to protect our margins from tires down the road. So all of that stuff is kind of weighing down on Prime Day this year.
So why they're making it so long, such an extended period, and what ultimately do you think they'll end up offering here.
That's a really great question. So Prime Day started as one day, you know, when they started in twenty fifteen, and it gradually got longer. It was two days last year, now it's four days this year. The best thing to see is that like a lot of their competitors, like Walmart has like a six day sale, and I think
Target has a week long sale that they might. Amazon's likely looking at those and saying, okay, let's just extend the number of days and prevent us from losing sale to a lot of these competitors, and especially competitors like Walmart and Target. The appetite is really strong for everyday essentials things like snack packs for lunchboxes. So Amazon needs to to fight them on the you know, the grocery aisle as much as for electronics.
Yeah, and when you think of electronics, you will immediately think of China. Just more broadly, how have the companies you speak to the SELVI Amazon been navigating me on again, off again, feeling around tariffs.
Well right now in terms of Prime Day, we're seeing Apple is going very hard on discounts, you know, very very deep discounts. I spoke with the Crazy Coupon Lady earlier. They kind of track all of these deals, you know, and they use They used Black Friday last year as at benchmark, and they're seeing Apple kind of, you know, going even less than some of their Black Friday deals
a year ago. They call that. One thing in particular, like app the AirPods for you know, earbudds were discounted very steeply, but then you contrast that with Amazon's own devices, and the discounts on things like their echo speakers and stuff were pretty soft. So well, we're seeing these these companies react react differently, you know, to the tariff situation.
And question is how the shopper reacts. We'll get the data throughout the day. Spencer SOFA brilliant to have you.
Thank you.
Coming up, we're going to be speaking with the care We've CEO Michael and Trader under the company's nine million dollar purchase for Core Scientific. That's next, this is Blue meg Tech. Welcome back to Blue meg Tech. Quick check on these markets because we're being knocked around about by the tariff headlines. The latest coming out of President Trump is that August the first is hard and fast. You will see those reciprocal tariffs put into force on that date.
We're currently just off by about a ten percent. On the upside is the likes of Tesla and in video from a point's perspective. On the downside, Amazon drags as we see Prime Day off to a slow start. So is Google and Microsoft on the red. But let's look at Data Dog for a moment, because this is a company that's about to enter the S and P five hundred this week. We're off by three point eight percent. This is as we get a key downgrade from Googenheim.
Why open ai optimization risks, So they say they cut to a cell from neutral, worrying about the longevity of that particular client. So it says Howard Marr, So keep an eye on that company. But remember it's rallied hard after the news that it will be entering the big dogs for Data Dogs. Now, let's also take a look at the shares a core weave and core Scientific that.
Huge deal announced yesterday that.
Core Weave is indeed acquiring core Scientific in a nine billion dollar all stock deal. Now we're currently off by two point four percent as you'll see on core Weave just a bit. But all of this is about boosting Corey's infrastructure to meet the insatiable AI demand. We get the inside track with Michael and Tracho's the core We've CEO now on hot off the heels on this particular deal. Why Michael go vertically integrated?
Explain it for us.
Sure, thank you for having me and uh, the the cloud marketing at large is going through this incredible inflection point where the the scale of what needs to be built, the type of infrastructure that needs to be built, the software that's required to be able to build it, all
of those things are changing in a generational way. And when we have talked about our company, when you know, and I have now been shy about this, I believe that there is an opportunity to U integrate so that vertically, so that you can deliver the best solutions to your clients that are the largest, most sophisticated consumers of this infrastructure.
And so we we you know earlier this year, you saw us move up the stack with the acquisition of weights and biases, where we an extension on the software that we have right, so our software is like really focused on orchestration and monitoring of the GBUS. As you move up the stack into weights and bias, it connects closer to the clients, and if you move down the stack, you're down into the physical data centers, the power requirements, all of those.
I think people the investibate saw weights and biases as margin a creative, as more able to really bring the profitability to bear. But many worry and I cite for example, Stifel downgrading the stocks. They seem positive on the long term idea of this purchase of core scientific but a vertical data center provider changes the valuation structure from their perspective. Why go down the stack when perhaps it doesn't mean you as profitable.
Yeah, so I would I would take an issue with that assessment. I think that there's enormous opportunities for us to capture margin by insourcing the infrastructure component of it. One number two is I think that in a market that is as dynamic as this market, is the ability to have more physical control over your ability to build more control over your ability to deliver infrastructure is enormously
valuable to a company like ours. And what we're doing by integrating with Core Scientific a company that we know very very well. We have very long standing relationships with them. Our first contract was in twenty eighteen.
And you tried to buy them for about a billion last year.
R We did try to buy them for last year, and during that period we've extended our relationship with them. We've expanded our relationship with them, and we continue to think, as they continue to think, that the integration of the two companies is net positive for both investor groups. And you know, over time, we believe that that will become incredibly clear to the investing public at large.
And let's talk about that over time perspective, because I think Rubin roy over at Stiefel is saying, look, longer term, he does get it, but we need to see material margin accretion and growth benefits.
What sort of time frame are you seeing that?
Yeah, So, look, when when you insource a data center that you have a hosting contract with where where you're building your infrastructures, immediate right, because as soon as you acquire them, you've moved the contract with which you're paying them on a monthly basis into internalizing it, and so you will see a margin and creative impact associated with
us purchasing them as soon as this deal closes. And so once again I take issue with with with the assessment that this is not going to be margin a cretive. I actually think it's going to be enormously marginal and creative for the combined companies. But I also think it's going to be incredibly constructive for our ability to meet
the demands of the clients. And what gets lost in this discussion sometimes is that you have a group of clients that are moving so incredibly fast to build infrastructure at enormous scale that they require to be able to deliver artificial intelligence to the world, our ability to control our destiny in terms of how we build, where we build, when we build. By integrating the two companies, where we're making huge strides in that direction.
And you get one point three gigawats thereabouts of the power that's going to be in the data centers. Just talk to us a bit about say the Oracle open AI reported deal four and a half gigawatts is what they seeing promised to open AI in the longer term is not achievable. That sort of measure of scale, of power, of necessity to go into the data.
Centers it is. It's going to take a lot of work. It's going to take a lot of of investment. It's going to take a lot of thought around how you do that. And that once again leans back into the idea that you want to vertically integrate so that you can do it in the most efficient, most effective way.
What's the hardest work.
Oh, there's a lot of hard work here right, Like you know, the the integration of two companies is always challenging. The ability to continue to extend our capacity to deliver infrastructure is always enormously challenging.
Is energy that bottlening?
That energy is a bottleneck. The you know, the pipeline of projects within the core scientific portfolio positions us to jointly be able to deliver infrastructure on the largest scale in the world. And so when you when you look back over the last several months, you know, we did a twelve billion dollar contract, right or just under twelve you saw the thirty billion dollar contract. The demand is voracious.
And is it just coming from Microsoft? Is it coming from more players.
Now for you, it's coming from more players. I mean during during our earnings, you know, you heard me talk about the fact that we actually had a second hyperscaler begin to come on board and use us as a solution for building the highest quality infrastructure and delivering compute to them. And so you're you're really starting to see us broadening our client base, which is going to be a work in progress for for for a long time
because there is concentration with these really large contracts. But it's it's been a you know, incredibly important for the whole company and for the investors in the company to see the progress that we're making bringing on more and more names, you know, across the enterprise space, more names across the IDAI labs and the AI native, increasingly building
our footprint among the clouds. It's it's really been a great indication of the demand for the product that we deliver, and we're positioning ourselves to be able to deliver it faster and larger.
And the share price has rocketed off the back of it since your IPO earlier this year. But I try and understand a little bit about the acquisition play that you're making the fact that looks as though you're im boltant to do more.
Where is it most important to do it? Is it the downstack, is it hire and stack? Is it more about the software and services?
So we really do look at it from a long term perspective, and it's what's allowed us to build a company that is breaking the mold to an extent in terms of launching the AI cloud, a new cloud, a cloud that doesn't fit into the history of the Big three right, and that's been based on the idea that you're making decisions about what it takes to deliver the highest quality infrastructure and products to your clients. You will
see us continue to build up the stack. This acquisition, of course, Scientific is an example of us going down the stack. We have other data centers that we are building internal to the company. You know, it's part of this strategy of how you get to scale, because only by getting to scale are you relevant in this revolution
that's occurring within the cloud space. And this is an important building block, an important step for us to be able to ensure that we are able to continue to participate in the scale building of this infrastructure.
We loved hearing the Vision Mia Colent traitor, thanks for coming on to join with us, is the CEO of cour We've hot on the heels of that big deal. Meanwhile, coming up start up Nothing is betting big on a phone they designed to be used less then nothing, CEO, He'll pay you.
That's next, the say is blue Bag Tech. Let's take a quick.
Check in on Tesla shares now, because we're trying to make up some lost ground today at least, but we are still lower of the course of the last three training days by more than four percent. After Elon Musk announced he's forming a new political.
Party over the weekend.
Of course, now Ark in their CEO Kathy Wood joined Bluemberg Surveillance earlier to weigh in on this, as some analysts call for the company's board to get involved to address masks politicking and whether it has hurt Tesla's standing with car buyers.
We've been dealing with controversy around Elon Musk in one form or another since we first bought the stock when the company was founded in twenty fourteen, and we owned Tesla in it's one of the top holdings in three of our ETF so arkk W and Q so we are watching this like a haark, no question about it. But with the experience over the last eleven years, we turn around today and see Tesla really not an EV
manufacturer anymore. Moving into the robotaxi age, we believe successfully and we believe it will scale much better than most of its competitors. We see SpaceX really only ninety percent of all of the satellites out there, neurally transforming lives of paralyzed people, people with als, and probably most surprising of all, XAI. Now we own all of those again in our venture fund, following them very carefully. XAI is on some benchmarks. It hit a point that three pro
hit in June, it hit it in February. So you know, we are very focused on barriers to entry technology moats and we believe that the moats that Elon has built, and obviously this is not just Elon. He's attracting the best and the brightest to help solve some of the world's biggest problems. So again we do trust the board and the board's instincts here and we stay out of politics.
Well, we'd love your opinion on the current situation, just on TESTA specifically, you mentioned some phenomenal companies doing some incredible things for Tesla, though, do you believe that Elon can pursue his political ambitions at the same time pursuing the best interest of Tesla shareholders.
One of the announcements Elon made recently is that he is going to oversee sales in the US and in Europe. And when he puts his mind on something, he usually gets.
The job done.
I confess CEO and CIO Kathy with them and let's talk about nothing. It's the hardware startup taking aim at the big smartphone makers like Apple, like Samsung is the latest phone three is launching.
With a design actually aimed to be used less.
Joining us now is Carl Pai Nothing co founder CEO are in New York over from London.
Why do we need a smartphone that we use less?
Smartphones used to be these tools that were supposed to make us more creative and more productive, just like the personal computer. Right, it was a bicycle for the mind. But today on smartphones we just keep doing scrolling. And we wanted to create a product that help people be more in focus. Right, So if you put the phone down, you can still be notified about the most important things.
That are happening without always checking your screen. I don't know about you, but for me sometimes when I have to respond to an important message, I just happened to go into my social media and scroll a bit afterwards.
Yeah, so it's keeping you engaged in the process.
What's interesting is, well, it looks like nothing else really on the market. People have loved that. The geeks in particular have loved that. But what sort of scale you're getting to now? Who is buying this?
Yeah, so we're targeting a very different customer base. As a startup, we're really focused on our users, the young creatives today we are this year, we're doing about a billion in revenue. Last year we did north of five hundred millions. We're doubling this year and it's a good start, but a long way to go.
What are they trading in for because this is Android operating system. Are people ditching their Samsungs? They ditching their apples?
What are they doing?
Yeah?
Our users come from all over the industry. Actually, we have two types of products. We have earbuds and smartphones. For our earbuds, more than half of the users come from iPhone, which is really surprising to us and our phones come from all over the market, but we do see a lot of iPhone users switching to US.
Where are these being made?
We manufacture most of our phones in India, but we also have a site in China, and we have a new site coming up soon as well.
Where would that be to be announced? Okay?
Interesting, because what do you you're a man who's you've built companies before. Boy, have you built well over in China? You sort of stuck in really in the Chinese smart phone industry yourself, and now we're seeing this pushback in America, in particular manufacturing in the United States.
What do you make of.
That ability, that capability to get the scale the talent here in the US.
It's not something that we thought about a lot because we've been really focused on markets like Europe and India, and we're manufacturing in India. Recently, we just started exploring how to export from India to the rest of the world with a phone three. Actually we're exporting from India to the US.
How hard is that with tariff's?
Uh, it's it's okay. I mean, I don't think the tarifts are that bad from India.
Okay, So you don't think that a little bit of a hit to what is a more expensive version of the phones that you're now having? What is it sem nine to nine as the price point for this particular phone. Why go to that upscale level?
You've been more of a mid range kind of.
We always wanted to compete on the flagship level, but we had to build a lot of our capabilities because when we sell a product at eight hundred dollars, people expect the best the best camera, the best screen, the best of everything. And building a smartphone company is hard, like all types of hardware is hard, but smartphones are particularly hard. I think we finally got to a space where our engineering capability is at the level where we can take a shot at the flagship.
You have that experience having helped build OnePlus now with nothing, how much is there now? Focus on the AI integration because that's where Apple seems to be stumbling.
Yeah, we're super excited about AI. We're not really focused on the large language models, but we're focused on how to apply AI. And I believe that to win in consumer AI, you need to own your own hardware. And for me, the smartphone is the most exciting piece of hardware because of two reasons. It's got the most scale, right because more than one point two billions smartphones are sold every year, and it's also got the most depth in terms of what we do on our phones. We
do everything. So I think consumer AI needs both scale and depth because we want to be able to really understand the users, to then automate the smartphone use as much as possible.
For them to do all of that, and to get more manufacturing footprint.
You need money. Are you raising money? What sort of scale do you need?
We raised about two hundred and fifty million dollars so far. We've been relatively capital efficient. We've done more than a billion dollars in lifetime sales. We're doing a billion dollars in sales this year. Of course, we're always entertaining conversations, but we have nothing to announce right now.
Please come back when you do call pay of nothing great to have some time with him