From our Heart where Innovations, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde at Bloomberg's World headquarters in New York and.
I'm Ed Ludlow in San Francisco. This is Bloomberg Technology coming out of ed.
We have full earnings coverage. Of course, we digest Apple, it rises on signs of its weathering that smartphone slowdown. We've also got dowdash lift, block analysis, you name it.
We're on it.
And following another strong US payrolls report, we'll discuss the state of the job market for the tech industry, specifically when it comes to artificial intelligence.
Plus we'll break down results from Warner Brothers as the company reports a surprise profit and streaming how will the writers strike impact results going forward?
Though all of that.
As we analyze the broader context of the markets today, it's Friday feeling when you're looking at the regional banking nex in particular, in fact, when you're looking at tech stocks too. Even with a strong jobs report and what that means in terms of Federal Reserve still probably having to tame inflation we're looking at one point eight percent
arrive on the NASDAG. We really are seeing a bounce back in risk sentiment today KBW bankingex as I say, on fire up more than four percent, but remember how far we've fallen over the last few days. This is all about a bounce back in regional banks. Maybe people just buying the dip today. Ed I know you're going to dig into that a little bit later. The VIGs that all important fear gauge therefore really pulling down by
almost three points, were at seventeen handle once again. So we decide we're going to go along this market into the weekend. Let's quickly look at what happening in terms of the world a crypto, because actually it looks as though risk sentiment is rallying there as well. We're at one point eight percent, We're not at that all important thirty thousand level, but still a little bit of a pushback. And I just drill into what's happening in terms of the micro Is there is there risk on sentiment?
There is at.
Earnings, Yeah, there's a lot driven by Ernie's. You look at a name like Lit down twenty percent more than ten actually at one point in the session, Lift is touching a record low on that stock. The outlook for revenue is not driving with investors. I think there's a lot of concern about the near term economic model and the new CEO's plan to turn that around. Really big decline in Lift Streaming is interesting. Paramount twenty four hours ago had a loss. Warner Brothers Discovery out with a
surprise profit for the streaming unit. Even though the legacy business is seeing advertiser flight, We're seeing some buoyancy in those names. And then again you talk about the banks, Packwest up the most on record eighty four percent or so. Why I'm actually not seeing much rationale on the bloomberg or out in the reporting. It may be a by the dip kind of situation. We will dig into that later in the program. There is one clear name moving
us to the upside, and that is Apple. You look at the gain in Apple shares following what was a beat on expectations in the quarter, strengthen iPhone and in services growth in both units year on the year, Although low growth one and a half percent or so for the iPhone five and a half percent for the services, that four point eight gain is the biggest jump since November.
We did get commentary on AI quite muted, all about emerging markets, all about India, and then that developing services business. I know you and I have been talking about fintech in particular and what Apple's doing on that side of things. That's where there was some strength.
Yeah, and strength in terms of the points that it's adding to the SMP more than fourteen. So Apple helping drag the market high.
Let's get more on all of this.
Third Bridge Global Sector lead for TMT it is Scott Kesler. So let's go back to basics of Apple the broad picture. We're talking about the nuances of AI there, but really this is about iPhones and still demand internationally.
Absolutely.
I mean, if you think about the quarter that they just reported, more than half of revenues came from iPhone. iPhone outperformed, but as you alluded to, it seems like the other major product areas when you think about hardware and you think about mac and iPad and wearables, those also declines in the quarter. So iPhone was the and out in terms of total revenues, but also in terms of the beat, and I think that helped carry Apple over the finish line, so to speak.
Yes, Scot, I'll jump in. I think there's a real interest here on India in emerging markets. How much confidence that does that give you that Apple has pockets for major growth going forward.
You know?
And I think growth has to be on the minds of Apple investors today. Sure, people are happy the stock is up, the company reporter results that were largely better than expectations. But I think more intermediate term people have to wonder about whether or not this is a double digit grower in terms of revenues in the foreseeable future or at any point in the future. To be frank, emerging markets would seemingly have to be a big part
of that. But when you think about India, and that's something they've been talking about, and I think they talk more about India during the call than they did AI, and rightly so, because that seems to be more of a term opportunity for the company. That being said, I think people understand that getting that premium pricing is going to be difficult in India, and so the strategy and the specifics.
Are very key there.
We'll see kind of how they go about approaching that market. There's no issue when it comes to things like the number of potential customers and kind of the possible volumes going forward. But how that plays into what Apple is able to do. Yeah, given the price sensitivity there, I think that's a big question going forward.
Scott, how much of the rally and shares, to your mind, is driven by the comments on AI?
You know what, I have to be honest, I don't know that people are making a lot of those you know, it's interesting. I did a search of the transcript for AI. There were a handful of references. I think there are more references to Mumbai than AI. And I think that goes to what I was just saying before. I think talking about the fact that it's something they're thinking about, it's something they're looking at.
They don't speak to their product roadmaps.
I mean that's their way of saying that we haven't quite figured it out to the point where we.
Want to talk about this.
But look, we speak to experts day in and day out, and they consistently tell us that this is an area where Apple is behind. If you think about the headlines we've seen from Microsoft and from Alphabet and from others like Meta, those companies are all well ahead of Apple.
I think when it comes to AI.
You know, Caroline, we were waiting for the numbers and services to be services came in below expectations, that still led growth. And what was interesting is the kind of emphasis on the fintech side of that business.
And that really was the talking point throughout the course of Scott. Interestingly was the fact that they're launching the savings card, the fact that they're offering such a high yield on savings.
How much is fintech or indeed just the addiction to the.
Services side and the way they're trying to keep us so much within Apple's ecosystem a selling point for you at the moment, you.
Know, I think it actually is pretty important.
I think a lot of people are wondering about kind of R and D and innovation and growth, and with WWDC kicking off I think exactly a month from today, rightly, so they should be.
Thinking about those things.
But Apple has been talking more about payment services and financial services, and we've regularly heard that not only does that have a massive total addressable market that Apple can pursue, but that Apple actually has products and services that can take share there and they've been pretty active, frankly, not just over the last couple of years, but the last couple of quarters.
In terms of seizing upon that opportunity.
It scolled Kessler Thirdbridge on all Things Apple.
Thank you for your time.
We're going to turn to door Dash, the food delivery company beating estimates driven by strong demand for deliveries, joining us now cr for a CFRA Senior analyst Angelo Zeno Angelo, Hello, this is an interesting company. Yeah, good to see you. What does this tell you about the consumer right now and where they're spending money. I find door Dash left over the gig economy names as pretty good. Baromea to right of what's going on on the ground.
Yeah, I would actually agree with that. And when you kind of look at the numbers from all three across, you know, this week, I'd say for the most part, it's been very resilient in nature. I mean you kind of look at Doordash's numbers. Actually they grew the top night line very well, grew at about forty percent. And when you kind of look at where the gross orders were up about twenty nine percent, and they maybe about a third of a third of that, you know, being
driven by their endeavors into Europe. With that Walt acquisition. But nonetheless, when you kind of look at the results here, specifically from the likes of Uber and to a lesser extent, DoorDash,
I'd say the consumer right now looks really resilient. And specifically i'd done the food delivery side of things, that was kind of an area where a lot of you know, investors out there thought that, you know, potentially revenue which start kind of you know, waning off in a post pandemic world, and that just hasn't happened yet.
And in fact, what's also working for them is not just your delivery of your hot food, but plenty of other things to be delivered. How much does that have to be part of the business model because it's a one error that lift really doesn't have.
Yeah, listen, I think that's a great contributor for both Uber as well as doordessk. I think Uber kind of highlighted thirty five percent growth in kind of new vertical markets within kind of that delivery side of things. We actually think DoorDash growing faster than that and kind of
adjacent market. So it's a huge part of their kind of growth initiative here over the next couple of years and kind of you know, adding stickiness to that platform, because consumers that are kind of leveraging their other businesses, whether it be on the food delivery side of things or whether it be in ride sharing, they are you know, they are looking to, you know, further kind of take advantage of services in other adjacent markets.
And I mean ed, this is where you really do compare and contrast the companies that do well that a broadened their overall offering, and then you look at Lyft, which is tunneling stay ed.
Yeah, we're down twenty one percent. We've just touched another record low. We'll see if that holds through the close. Is this just a lift problem, a unique lift problem?
I think there is. I think it is a lift problem, to be honest with you, when you kind of look at, you know, what investors are rewarding this week versus what they're not rewarding, especially in broader tech, right, they are rewarding the names that are kind of pushing the bottom line. And we've seen it, you know, not only from Uber, which which you know clearly is essentially holding op X steady here and seeing that double digit top line orders growth.
DoorDash also doing it? Last three quarters, essentially keeping op X relatively flat, growing the top line nicely. You saw what Shopify just announced yesterday, right, and just saw the impact on the stock price there when you kind of look at Lift here, they've announced some big cost cuts in the sense of twenty percent workforce reduction on top of a north of a ten percent work force reduction
late last year. But the fact of the matter is those quest cuts are just being reinvested in the business to try to keep a float versus their bigger competitor
in Uber. So it's not going back to shareholders. They're not benefiting in any way, and that's a big problem in this type of market, and we don't think that likely changes anywhere anytime in the near future because of the environment we're dealing with, and especially if macro conditions start to deteriorate, then Lift becomes in a whole lot of trouble relative to Uber.
Oh, Angelus, you know you're the perfect guest for these sorts of days. To wrap it all together, we thank you for the CFRA. I mean, ed you were just talking about the volatility that we see in Lift, the record loan near well, look at the record move that we're getting on the day in certain bank stocks, regional bank stocks, but Pac West rallying hard, being stopped out time and time again. We're up more than eighty percent.
There seems to be no fundamental change here. A lot of people saying, look, you've got to buy this step Ultimately it is too hard sold off. But actually put it in context, we're back to the higher sinse oh when we're still well off the average price, which is an excess of twenty dollars.
Yeah.
Look that there are big names in the market like Bill Ackman who say there's a lot of concern in the banking sector. Still, the point that our colleagues at Bloomberg Intelligence would make is that the sell off in these stocks is not easy to reconcile with the liquidity available to the banks. You look at the deposit base. This is not Silicon Valley Bank. The proportion of ensured
deposits is much higher. That's what I'm trying to do, Caroline, our audience that's listening, the tech founders, the vcs, they bank with these names, and they're trying to work out what's actually wrong.
And a lot of that fear and concern gets spread through social media.
It's on technology.
It's also far easier to then become a reality, as you're able to whip out your deposits that much faster using your bank cap. But ultimately the foundation of these banks aren't nearly as concerning. There isn't so much of an isolated focus on one particular type of borrower and one particular type of overall integrated system that just lean to back to the overall tech scenes. But we are still questioning ultimately the solidity of the entire financial system right now.
Look, when Jamie Diamond and JP Morgan stepped inim with First Republic, he was confident it would settle things down in the near tub settle things down.
President Biden is currently making comments about what was a particularly strong set of jobs numbers today now with two hundred and fifty three thousand jobs being added, that was well above I mean, it's sawed past most economist expectations all but three of the seventy seven survey by Bloomberg. You got health and education jobs to thanks for this. But notably, we're still seeing pretty strong hourly earnings coming in.
They're coming in hot.
That's an inflatory pressure for the federal Reserve to have to tackle. Notably, also there is an equality within once again a really low unemployment rate. When you're looking at overall, you're still seeing black unemployment rate at four point seven percent visa a white unemployment level at three point one percent.
But overall we.
Did see unemployment coming in once again relatively low. This is a strong jobs market, even as we see the Reserve continue to raise rates. With hearing from President Biden, we understand Treasure Sectory Janet Yellen is with him.
To Ed.
Caroline, taking a little look at shares of Yelp. We're hire two tens of percent off. The online review company posted first quarter revenue that did come in ahead of analysts expectations. Joining me here on set in San Francisco, Yelp CFO David Schwartzbuck. David, you talk about high intent users.
What does that mean?
First, Ed, it's great to be here.
Thanks high intent users. When someone comes to Yelp, they actually tell us what they're looking for. It could be landscaping, it could be a locksmith, and so that actually enables us to really match that consumer with the right service pro when they come. And also it's important to recognize nearly half of our visitors come from households with income over one hundred thousand dollars. So that's a great audience for advertisers to reach.
When we look at your earnings and your outlook going forward, what does it tell us about engagement from the consumer and platforms like you? They are they kind of penny pinching right now and looking for the most reliable, valuable deals across all kinds of things or is this just a robust growth in use of platforms like yours.
So what is certainly true is inflation is making things more expensive, and so I think overall consumers are spending about the same amount but less frequently.
So they're really.
Focused on ensuring they make a good decision, and what Yelp provides them is with reliable information to make that purchase.
Decision, David, advertisers, are they willing to invest? Are they feeling confident in the moment?
What's your assessment?
So we obviously serve both large enterprise customers or advertisers as well as small and medium businesses. And what we see on the services side, as things have slowed down a little bit, service pros want to stay busy and so they've actually increased their ad spend, and what we've seen on Yelp is that their spend per pain advertising location has gone up so that they can stay busy.
And of course we believe that with our high intent audience, we're able to match them with a great lead that leads to business for them.
Got to ask it, artificial intelligence, what are you doing to incorporate that within the business. How have you got the right talent to ensure you can enact that sort of entertwinement.
So we have been using artificial intelligence for some time. Of course, everybody's talking about chat, GPT and these new large language models, but for our search experience for matching consumers with pros, we've been applying AI for some time. We have both the infrastructure and the ability to deliver that to the consumer when they visit the site. Now, large language models making that interaction more conversational. We think that's a great opportunity for us, and we're looking forward
to deploying it. It's still early.
Though, David shares up half of percent. We're up significantly higher earlier in the session three point six percent. I covered QSRs for a really long time. Restaurant industry There's a titbit that really fascinates me, which is that when you go to Yelp, you can look for into restaurants normally. Is their data telling you that actually now people are looking at chains because of the value proposition. It seems like there is evidence that actually consumers a looking for value.
There's definitely been a lot of talk about consumers choosing to go to quick serve restaurants on Yelp. Though when people are coming, they're really looking to find that hot and new restaurant or something that's different, or if they're going out on a Friday night. Of course, people are very familiar with these large, quick serve restaurants, and so that's not the first thing they're searching for on Yelp.
We are seeing continued interest, of course in sit down dining, and people want to make sure that experience is great, so again they come for our reliable reviews.
What is your key competition at the moment from your perspective, David, Because dare I say it, and I mean this with full affection for things yelp, but it's pretty old school for many people. How are you feeling that it's still yeah? How do you feel that the younger generation are interacting with it. Are you feeling that you're remaining as relevant present when everyone seems to be turning into different ways to search? I mean Instagram for one example.
So one of the things that we have it Yelp is actually an even distribution of consumers across each of the three large age groups eighteen to thirty four, thirty four to fifty four, above, fifty five and above. So actually folks who are younger are using us because they want to spend their money.
Well.
Now, obviously video reviews on some of the other platforms, or reviews that through a post that are gain a lot of attention, but completeness is very important. When you're going out. You want to ensure that you actually have a sense for all the things that you could do, and Yelp is that complete. So we delivered thirteen percent growth in the first quarter. We think that was terrific performance.
More than sixty percent of our revenue comes from services, and so while we're known for the restaurant side, we really have been taking share on the services side.
All right, Yelp, CFI David Schwoltzbeck, thank you so much, Carrie.
Some bringing ease Yeah, let's look at First Republic Bank, because of course we understand that the SEC is investigating actually the conduct of executives there before the government seizure. There was some reporting, some discussion about basically the sale of certain assets and indeed holdings, and all of this is ahead of what's now been brought up by JP Morgan. The SEC is looking to whether any members of the executive team at First Republic improperly traded ed on inside information.
So we're going to be covering that particular story. We're also going to be going broader into the macro situation because we're knowing the administration. We know the FAIR is looking at the banking sector, but the administration is also rather gloating at this job's number today, So we understand that President Biden is really out there discussing there's two hundred and fifty three thousand number added to jobs, that there's still inflationary pressure within that. So keep a close sign.
While President Biden has been saying today we had some live discussion there, but overall he is holding a cabinet meeting speaking about more to do with the trend that they think overall inflation is trending in the right direction, from New York, from San Francisco, Afrol.
Washington, a sublimband.
It is time now for talking tech and we're going to start with software ag shares falling after the German company Look refused to enter talks with a rival bidder for the company and said that it's supporting an increased two point six billion dollar Tacos offer for the existing backer, Silver Lake Management. Meanwhile, billionaire tech investor Peter Thiel is reluctant to move his operations from Silicon Valley to Florida. Why he's staying on a podcast on Wednesday, housing prices
with Sword compared to three years ago. It would just be too costly to make the move. And finally, New York Attorney General the Tisha James proposing a state law to titan rules over cryptocurrencies in her latest swing in an industry that she claims is suffering from rampant forward and dysfunction ed. Is really interesting overall that we are seeing this focus at the moment on crypto coming from Tis James. She spoke about it way back at the
beginning of the year. She has really been thinking about an inequality lens, worrying about people of color, about the lowest income that have been hit.
Interesting dichotomy when you're.
Looking at, well, the New York mayor who's been trying to take pay in bitcoin, when you're trying to build up the situation of crypto.
Here in New York.
Yeah, and what we're hearing from those people that are in the crypto hype cycle, they're now looking at AI. But what they have in common is the regulation top of mind.
Have a listen.
I think the biggest mistake that was made in crypto was is and still is, just the absolute lack of clear cut regulations so people know what the rules are that they.
Should be playing by. I think that there were a lot of.
Companies that were assuming that blockchain technology could be used for a lot of different things that it really shouldn't have been used for.
It From New York and San Francisco, this is Bloomberg, Welcome back to Bluebow Technology.
I'm Caroline Hyde in New.
York and ourmed Lovelow in San Francisco. There's a lot going on in the market, especially for the technology sector, data earnings. Let's talk about all of it. I think we've got a lot of catalysts pushing us to the upside. Look at the NASA one hundred up one point five percent. A big part of that is the job's data coming in strong above many broad expectations outperformance. In the semiconductor space,
we're kind of finding our feet a bit. We've had downward pressure as a result of earnings Qualcom being laggered. As an example, you see the US tenure yield climbing seven basis points ten point four percent, but we are way from that three point six percent level that we were at just a week ago and where we were holding for some time. Kind of risk on mentality sees Bitcoin creep a little higher beyond twenty nine thousand US dollars per token towards thirty thousand US dollars per token.
Interesting developments overnight. When it comes to AI, you talk about the megacaps that are making moves, Apple biggest jumps since November, moving on earnings, not so much about the AI narrative. But I'm looking at alphabet Flat a slight underperformer when it comes to its megacap tech piers. One reason might be the disclosure of an internal document from a concerned engineer about perhaps them falling behind. I think that's one thing to look at later in the show.
That is a fascinating conversation We've got to get into and on our spaces a bit later, ed. But meanwhile, let's talk about the jobs Stata once again. Here they're now showing real strength. A is a A two hundred fifty three thousand jobs added in the US market. Where is the demand coming from technology in particular, It's definitely on the minds of recent college graduates. So for more insight on what they are thinking about, let's bring in Handshake
CEO Garrett Lord. Handshaker is a network and recruiting platform for early career talent. And look, they just put out their latest report on what they see in job search trends. Young people fresh out of school are willing and able to see that their workplace is going to be disrupted, Garrett. And to that end, how are we seeing people change their search?
Are they all aware.
That General to AI is going to change the game, and are they trying to pret themselves for that?
Yeah, well, I mean you have to imagine what it was like being a college student in the last four years. I mean, there was a global pandemic. You got to send home, you had to learn how to learn from home. Then you thought the economy was going to crash, but the economy started booming. And now fast forward today where a lot of students the headlines are companies that are laying off employees and so students says, you might imagine they're very resilient. But now more so than ever, are
the interested in working in industries the value stability. I mean, students are looking at companies that you know, eighty four percent of them want a company that is really highlighting how stable of opportunities are. Students are also expanding the horizon to new industries. So students are forty percent more likely to applied industries that they hadn't considered before. So I think the dream job is like shifting right now in real time.
What's interesting is, well, defense seems to be an area that they're going into and speak nothing about geopolitics on that. But Raytheon was really trending up two hundred percent in terms of search is but Nike, Toyota, they're resilient brands. Are they therefore not looking for jobs at big tech companies given some of the headlines around layoffs, Well.
I think big tech searches are down fifteen percent year on year. Big tech is still very much hiring in college today, but I think the dream job is like
really shifting. So I coming back to like the dream job might be working in evs at General Motors, or working in robotics at Johnson and Johnson, or you know a fun story you talk about Ratheon, Like there's a student I just talked to you earlier this week named Wes who went to a small aeronautical school in Florida, and he built his profile and handshake, got a message from Raytheon and fast forward a week later he's got an internship offer and is actually going to work there.
So that's an example of like connecting companies that view this moment as an opportunity to go on the offensive. Like big tech, yes is pulling back in terms of overall demand from students, but companies view this as like an offensive opportunity to win top talent. So just this week, like publicly.
John.
JP Morgan and Fidelity talked about publicly increasing the number of early talent hires they're making, so they view this as an opportunity to pick up top talent.
Really interesting and ed, I have to think at the moment what was interesting in the stats was also Capital One was being highly sought after. Bank of America Morgan Stamley. I wonder if the current situation around banks is going.
To change that in terms of demand.
Yeah, I find it so interesting because the headlines are about chaos and volatility and technology with the layoffs in the banking sector around SVB. But Garrett, what I'm actually interested is the speed in which those young people are finding jobs in those sectors. Is it a case of, Oh, the opportunities there for me, and they take it.
I mean, the students are very much interested in banking still. I mean, JP Morgan has increased publicly the number of opportunities that they're posting on the network. They're hiring more software injurers than ever before, They're hiring more data scientists than ever before. And students really are interested in working in finance. I think obviously the news cycles are dominating students, chair but there are still tons of students that want to work in finance.
I'm looking at some of the companies that are being sold out. I know we've been over many of them. You're talking about Rayfia and Nike, Toyota, Boeing, Chevron. Tell me what all of those have in common? What is it that makes them interesting to a young person seeking a modern day job.
I think students really want to understand what a day in the life looks like at a company, and so what that really means is like, what are other students like them doing that have been there a year, eighteen months, What does their day in life look like, what skills are they learning, what exit opportunities are available inside of the company. They're really interested in understanding what the mission of the company and the impact.
That companies make me on the world.
They care more about that than they care more about mission than actually salary in most situations. So I think companies that bring a personal approach to sharing what the culture looks like and the impact they're making on the world is a really important facet of those companies.
Your mission a handshake is to democratize access to opportunity. Now, when I look at the jobs data today, record unemployment, so low level of unemployment for black people in particular four point seve percent, but there's still a big disparity between white unemployment, which is three point one percent, and
black unemployment is four point seven percent. I'm interested in whether you're seeing the mission being around equality, the mission being around bringing in all types of people from whatever education background, and particularly minorities in this economic environment, or whether unfortunately that goes to the backseat as we see perhaps VC dollars going to diverse founders.
I mean, companies are so focused on trying to build representation and build the future leadership of their company. Many companies, in order to hire fift percent women, they really want to have fifty percent applicants in order to hire fift percent women. Or if they want to hire thirteen percent black college students, it's important to have thirteen percent applying.
And so many companies are trying to be really proactive in shape their early talent programs to be able to have enough women and enough unrepresented students so they can cultivate and build those leaders internally. And so that's how companies use hand is really focused on great, resilient, amazing talent and also diverse talent. And I think that very much connects to like my story, I mean, I was I grew up in a blue cour family. I went to community college for two years. The mission of our
company and why everyone goes to work every day. Is really around expanding access to students all across the country, because I mean, so much about this is like in the way the world works. It's like who you know, or you know what your parents do, or what school you go to. Talent's really everywhere and opportunity is in.
And so I think Handshake is really helping companies connect with talent everywhere and to bolster the representation of their classes and to build the future workforce of tomorrow.
Handshake CEO and co found it, Garrett Lord, I think that gives us kind of the boots on the digital ground of how the next gen of tech talent are looking for jobs.
Thank you so much for the time.
I want to keep talking about AI, with the White House saying it would support new regulations or legislation to mitigate the potential harms from AI. That's after, of course, Vice President Kamala Harris met with the CEOs of Alphabet, Microsoft, Open AI, and Anthropic yesterday. I want to break that all down in some other developments with Bloomberg's Rachel met the Bloomberg AI reporter. I mean, let's start. I saw a tweet that you did. Oh there was somebody missing
from that meeting? Yes, who was that?
Well missing but popped in? That would be the President.
Oh I thought I was going to go with Zuckerberg.
Okay, go with your president.
Thought that's fine.
Oh sorry, I know.
I saw a tweet from the President who said he stopped in on the meeting, and I actually thought that was surprising that he wasn't a part of the meeting, because the White House is saying like how important this is, and a lot of companies are also saying how important it is to talk about coming up with legislation and just just for the government to learn more about how these technologies are working as their revolving question.
So you have Sam Altman, Sunder Pitch Eye, and Satching Adela in a room with the Vice president and at one moment the president and Mark Zuckerberg is not there. Yes, why is that significant? I think the point you raise is that Meta has a lot of people working in AI.
Oh yeah, Meta has long been in AI. Meta has been researching AI, using AI in its products for I mean the majority of the company's existence and a lot of it's AI has been pushed out into the community
and used to develop other things. So Yeah, that is a pretty big surprise for like just one data point, a recent development from Meta called Lama, which is a large language model that is being looked at very seriously by a lot of people in the open source community as a way to catch up with companies like open Ai and Google.
But drill there from Omer Rachel.
So, I've been reading so many interesting Twitter threads today about this leak that we've seen from Google in particular, and a worry that basically everyone's behind the curve versus open source data at the moment in terms of building these large language models.
Within that sort of Twitter storms.
That I've been seeing is the fact that what was it, Lama, the large language model over it Meta kind of got leaked and is basically done Meta a huge service here.
Yeah, that's kind of interesting, isn't it. This model came out in a way and that probably wasn't intentional, and it has been used to bolster the ways that people are developing large language models in the open source community, which is a different sort of animal than a big company like Google who would do that stuff privately, or open Ai, which is also doing that privately. When things are done in the open source community they can be
iterated on really quickly. They are tending to be less expensive, and you just have way more eyes on these software products, so you can have people either coming up with new ways to do new things or new ways to fix things that aren't working. So well, it's really interesting.
Let's go back to what you reported.
Elite memo from a pretty senior software engineer within Google about them falling behind. Cara alluded to it, But what have you reported what happened?
So this memo or a letter, you know, depending on how you want to talk about it. It's not an official company document, but it was something that this person had written, and it had been seen internally by a whole lot of different people at Google, and somebody then published it on a public discord channel, and from there it was then picked up by a lot of different
people and published more widely. So when you have something like that happening, you have somebody internal saying, hey, like, I mean, I think the wording was basically open sources eating our lunch.
That's I feel like it's a pretty big deal.
You don't see that strong wording that often, at least not sort of percolating out more widely and perhaps it shows that a lot of people are feeling that way at large companies.
Decentralization seems to be the booking point everywhere. Rachel Metz, thank you so much bringing us what is fascinating scoop and indeed what's happening over at the White House all things AI. And look, let's talk about how people are remaining pretty bullish about artificial intelligence. It's not just about jobs or productivity. Just take a listen to Tiger twenty one chairman and founder Michael Sonenfeld what they have to say.
Artificial intelligence is also going to have a huge impact on climate, where we're going to need a lot of new technologies to fight climate. So you can look at some of the climate plays as well. But the largest technology companies are investing heavily in AI, and that's where the opportunity is if you're a believer in it.
Just how pervasive AI is in all the conversations they were having. Now coming up a welcome signed with streaming for Warner Brothers Discoveries. The company sees subscriber growth and profits in its first quarter, but how did the company fare on other key metrics?
More on that next. This has bloom low.
Let's do more earnings because there's a bit of a mixed bag over there at Warner Brothers Discovery, which reported first quarter results that on the one.
Hand saw the media giant.
Post a surprise profit for its streaming business, but on the other, well, the legacy cable network's not doing quite so well, losing advertising, losing viewers. Therefore, the overall revenue missed estimates, and so did adjusted a bit dar This in the week, of course, disappointing results from Paramount Fresh Writer Strike on Hollywood. There's a lot to discuss with the one and only Lucashow who joins us now to break.
It all down. Let's just start on Warner Brothers for a moment, because it.
Seems they wanted to lean into Max, which is now branded and the fact that streaming is actually managing to prove profitable.
Yeah, I mean, the big criticism of all these streaming enterprises has been that they lose money. Other than Netflix and David's Aslam, the CEO of Warner Brothers Discovery is Billy doing everything he can to turn Max into a profitable service. They're cutting costs in a lot of ways. They've laid off people and that seems like positive news.
The problem or the cloud looming over all these companies is that their linear cable networks are declining really quickly, and so investors are still a little bit uncertain whether the growth of the profits on streaming are ever really going to replace what was an incredibly lucrative business model.
It's interesting because in a twenty four hours span, lucas, you had Paramount post that loss and then Warner Brothers posts the profit. What can we discern about the competitive nature of the two when it comes to streaming.
Well, it may depend on where they are in their investment cycle.
You know.
Paramount, I think said that this year was going to be its year of peak investment. You know, it wasn't long ago, I think maybe a year and a half where Paramount was still sort of bragging about how much it was spending because it thought that that's what Wall Street wanted to hear. It had this investor day in early twenty twenty two hours earnings I forget which one may be both, and it just really changed.
On a dime.
You know, around that time a year ago, I think Warner Brothers Discovery has sort of moved into cost cutting mode more swiftly partially forced by the merger, and those almost always resulting in cost cutting.
You know, Caroline, the story of the week that Lucas's team and screen Time had been at the forefront of is the WGA and Hollywood strike. Right, That's what we've been talking about.
And really the intersection here of a new type of environment they have to work in Lucas, the fact that there is a focus on streaming, what that means in terms of recompense for them, and also I mean artificial intelligence as being some competitive threat too.
Yeah, I mean it's interesting, given the conversation we are just having around profitability and what happens to these companies, to strike could benefit a lot of these companies bottom line.
It's one of the reasons why some of the writers and a lot of industry experts are sort of concerned that this strike is going to go on for a long time, because these companies looking to cut costs will benefit from not spending a bunch of money on new projects or you know, we reported this week that some of the studios are already ceasing to pay some of
these writers that they have producer deals with. You know, it feels like the sides are pretty far apart on pay, and they're not even really close on a subject like AI where the writers want certain projections in the studios steal.
It's too early to sort of put anything.
To paper, Lucas, the last strike was two thousand and seven, I believe, right, How long does this one go on? How are talks progressing?
Yeah, I mean the last one lasted about one hundred days. I think the one in the late eighties was longer than that. It set the record. Look, I'm not supposed to make predictions, but nobody I talked to things that this one is going to be over anytime soon. It feels as if the studios have already shifted to focusing on the Director's Guild and the Actors Guild, both of which have contracts coming up in the next couple of months.
You know, it feels like it's going to stretch into the fall, but of course things could change over the summer.
And Lucas, of course you report on this from Hollywood from la but our producer was saying how she saw people at the Piggot lines in New York because she came in to work today. I mean, this is how national in nature does this become.
Well, there are major production hubs in certainly in New York. You know, a lot of the late night shows which have already gone off the air are made in New York. And then you have people who work in Atlanta, or in New Orleans, or in Chicago. I don't know that you're going to have protests in all of those places, especially because the writers are more concentrated in LA and
New York. But this has become a pretty global industry, and so even if even if the Writers Guild only affects writers in the United States, you're going to see people everywhere else. Government, you know. I think there were some stories this week about, you know, writers in the UK being urged not to cross the picket line and do work with guild signatories.
There's a fair few strike actions going on in the UK more broadly, so one to watch out for Lucas Shaw.
Great to have some time with you.
It's time now for going viral, and much of the United Kingdom and the world in fact, is buzzing for Saturday's Coronation ceremony. Now, the religious event celebrates the start of King Charles the third reign over the British State naw Megus.
Lizzie Burden hasmon.
First coronation in seventy years, will formally ring in King Charles the Third at Westminster Abbey, home to the ceremonies since ten sixty six. As seventy four, he's the oldest monarch ever to be crowned. Twy two hundred guests will attend roughly a quarter of the number who are at Queen Elizabeth I's nineteen fifty three coronation, and it's expected
to take half the time. Amid a cost of living crisis, the King has asked for the service to beat good value, but with a reported one hundred million pound price tag, it's double the cost of his mother's in today's terms. Charles will wear Saint Edward's crown, decorated with more than four hundred gemstones Camilla. Meanwhile, the Queen consort will carry two two hundred diamonds in hers, worth up to an estimated five billion pounds. But what's the economic impact of
the and pageantry. Bloomberg Economics reckons that on balance, the extra bank holiday is going to cost the economy about two billion pounds, but estimates have suggested that tourism, hospitality and souvenirs will bring in more than one billion pounds, somewhat meager compared to the Queen's Jubilee last year for Britain's pubs and restaurants. That includes a three hundred and fifty million pound boost to sales, so the hangovers may be as memorable as the coronation itself.
We thank our Lizzie Burden for that reporting and an ed I was looking at Instagram just have followed the Royals are now the Royal family has twelve point nine million Instagram followers. It's generally Charles Kamene, Prince and Princess of Wales. They've got fourteen point six millions, so they pit them to the post. But compere, that's like Kim.
Kardashian's got three hundred and forty five million hits on Pales and Insignificance.
Yeah, like you and I two Brits living in the United States, and we've seen firsthand the following that the Royal family has a lot of that driven by Netflix and The Crown, a fictional series that the Royal family would say, it's not a engagement really right, But you know again, we did this piece on Bloomberg the most googled terms ahead of the coronations, kind of learn about it. There's really high engagement ahead of this weekend.
Yeah, mainly the time is going to be painful for you. It's at six thirty am New York time. I'm going to be up anyway because I've got small kids, but don't get up at three thirty in the morning.
Air DeKay TBD TVD.
It's a big moment in history. But I'll be tired.
I mean, you could always be raving out until that time and then watch it.
But we'll see that does over this edition of Bloomberg Technology.
Yep, don't forget recap podcasts. Iheartspotify, Bloomberg, wherever you get your podcasts.
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