From Mahart.
We're Innovation of Money and Power co Lie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Loved.
Love live from New York and San Francisco. This is Bloomberg Technology coming up Apple's iPhone sixteen. It hits the stores today without the crucial AI features what people buy.
And Microsoft's AI power needs prompt the revival of a dormant reactor.
Plus we hear from Salesforce CEO Marc Benioff and from the company's head of ventures. But first, let's just check in on these markets as we round out a risk. On week, we are up more than a percentage of point. Let's put it at that for the Nasdaq one hundred. Remember significant gains on this benchmark the previous week, where we eclipsed to five percent gain extraordinary moves. We dive back on the day Ed we have digested the federal
reserve whopping cuts. What does that now mean for a little bit of profit taking happening in the MAGS seven for example? But what are you watching in terms of a key name.
Going straight to Apple? Apple ups six tens of one percent the iPhone sixteen lineup goes on sale today sixty countries around the world. You will have seen the scenes in New York City, Caro here in San Francisco, the same thing. There's a lot of questions about how or whether or not this will drive an upgrade cycle. So we think about the iPhone in the context of Apple's overall portfolio of products. It is critically important. That's why
this pie chart tells the story, right. I think there's a lot of skepticism about the innovation, the main innovation being a button on the side of the handset for camera control. Will that be enough? Is the delay of the release of Apple Intelligence, its generative AI platform to a later date going to impact this cycle? Those are all things that we need to consider.
Got the perfect voice to do it with the Rilla profile, Senior research director at IDC.
You run the numbers, you tell us a future of how integral the iOS system and Apple remains. Look, are you anticipating growth ultimately of market share Apple here?
So you know, we all recognized, like right at the time of launch, right the features and everything that was announced. It was exciting, but a lot of people were disappointed.
However, for those.
Who you know, really follow the market market. I think we an't understand it's a long term play, right. It is definitely a first step for Apple in a long journey and in a big step, I think, so long term, we do expect this to you know, improve and impact
Apple in a very positive way. But this year we're not expecting iPhone sixteen launch, you know, despite the hype and the marketing and the introduction of Apple Intelligence, even if it's a little bit rolled out a little later, we don't expect that to cause an upgrade cycle.
This year.
We think things will be slow to to pick up. But next year, however, we are expecting a four percent growth for our.
Apple Why why the four percent acceleration?
So you know, we've moved it up.
I think it was about one or two percent, but after you know, all the announcements of WWDC and when we put out our forecasts, which was just a few weeks ago, given everything that we've seen already talked about Apple Intelligence of what's to come, right, I think it's not really about what's here today, but by next year
what's going to happen. We're going to get language being rolled out and hopefully the issues with the you know, introduction of Apple Intelligence and EU and in China with partnerships being established, we think that will really help accelerate the momentum towards you know, the Apple Intelligence fold, whether it's sixteen, you know, towards later next year or the seventeen series, especially because I think right now it's still
new in terms of the use cases. But as consumers start using it and they see their friends and family use it, and of course marketing picks up, consumer awareness and education increases, we do think, you know that those all those factors combined together will create sort of a bump of a certain percentage of people like that are because the average of fresh cycle.
Nows are about four years and even five years.
Right, we know plenty of people that have iPhone elevens and iPhone X, but next year, we're thinking it's going to lead to those with the thirteens or the fourteens even thinking, hey, you know what I want the seventeen.
So Nabida, you and I were together at Apple Park just last week, it seems like a long time ago. I think it's worth reminding the audience of how Tim Cook summarized this generation of phone.
This is this the innovation and invention these products deliver will continue to deepen the meaningful impact they have on all of our lives. I'm proud of our teams and what they've accomplished, and I can't wait for you to experience these amazing products.
So then I look at your own research, your IDC forecasts for shit mints of smartphones in the years to come, and generate today I And that's my question for you. The innovation Tim Cook's talking about, It's not really on the hardware side, is it.
No, And you know they.
Drove that message very very clearly, right, It's really about the change of the user experience. Right, How is these new features going to improve your life? And how are they going to make your lives easier? And of course they showcase some of those use cases, but I think it's just really in the long run, going to change
the complete way we interact with our smartphones, right. And I think that's when jen Ai or the super cycle, the refresh will really really kick, when those digital assistants start coming into play where we can just talk to our phones rather than having to go into multiple apps to do the task we need to do.
And I'm really excited for when that happens.
So software innovation the hardware innovation. Well, that Limelight got stolen by Huawei a few hours after Apple. It feels like, look, not everyone wants a trifle phone, but how are we seeing innovation? Mean that we all pulling away from market share in China.
So definitely, Huawei's launch, you know, did get a lot of attention and they were trying to showcase in a different way.
Right, this is our on the hardware side, right with the foldable device.
But the truth of the matter is, you know, while Huawei does remain a very valid competitor for Apple in China, right, we've all seen the number as recently, the foldable segment is still very niche, and we do believe that, you know, in terms of foldables or this specific product impacting Apple negatively, I don't think so. Again, it's a very niche segment, and specifically, you know, with the trifold device, it's still going to be even further niche within the foldables because
of supply challenges that Huawei's seeing. But overall, you know, it is a rocky road this year for Apple. But we do hope that with as they you know, resolve the partnership issues in China, especially because AI is a very more important you know, China market consumers are very spec driven. When you compare globally in terms of importance of AI features to consumers, Chinese consumers are more likely to place it incomining.
Appurchase Nabila, We were just showing pictures from around the world, including China, sixty countries, right, that's important. I think it's what reminding ourselves. Like some people will buy some iPhone sixteens, it's all relative to prior generations, right that. Could you give any sort of geographical context on where you think this handset will do well and where it will do poorly.
In terms of you know, this coming for the rest of this year. We think definitely there's a large installed base of users. Right, Like I mentioned, I'm sure we're all you know, iPhone elevens and X and regions where the refreshed cycles are longer. I think develop markets where Apple has larger share, right, where there's lots of those installed based of older models. I think those are the regions that will this year. So essentially it's not really
Apple intelligence that's going to motivate them to buy. It's time for them to upgrade anyway, and I think those new buyers or shorter reverse cycles that's going to happen next year, especially with the trade and promotions. Right right now, it's more of a future proof device with the Apple iPhone sixteenth.
Lebe lipa Pow whose research at IDC on smartphone markets so closely followed. Thank you. Good to have you back here on Bloomberg Technology. Okay, coming up on the show, Elon Musk is now on the Secret Services Radar after deleting a post about assassination attempts on presidential candidates. We're going to cover that story next. This is Bloomberg Technology. Israel continues to carry out strikes against Lebanon. Across Lebanon,
stepping up hostilities against Hezballah. Thousands of pages and other device is exploding in Lebanon this week mark a new and deadly escalation in the use of supply chains against enemies, an urgency to reduce dependence on technology from rivals. Bloomberg's Dwan Flatley covers national security and joined us from Washington.
And you've done some deep reporting with colleagues on this idea that, particularly for cheap goods, that when you go across the supply chain and the assembly of these products. They persent a risk because they can be weaponized. What did you learn?
Yeah, it's a fascinating topic, and obviously what happened in Lebanon with these pagers and walkie talkies really I think crystallize the issue in a lot of people's minds. Where before we had we knew coming out of the pandemic that these supply chains were a big deal because we were worried about the cutoff of critical you know, PPE and other things like that, but this is taking it to a whole other level. I mean, I think you have to kind of think about this two categories.
Right.
You have what happened in Lebanon, which was according to what we've been able to ascertain. You know, Israel has not claimed responsibility for this, but you know the senses that they were involved obviously, and it was a specific hack and a specific sort of intelligence operation that has been used in various contexts, you know, for a long time. This is probably the most dramatic, you know, out outcome of that, but that is something that's been around for
a while. And then you have this sort of separate but related issue of supply chains hacking critical infrastructure, and both of those two things kind of come together in our story, which sort of explains and looks at how as supply chains have both been concentrated in some countries like China, for instance, there's a vulnerability there. But at the same time, diversifying your supply chains also creates some vulnerabilities because you have excuse me, more entry points for
people to to kind of exploit. So it's you know, it's kind of you there's not a lot of great options. But I think the one thing that folks that we talked to said was we just need more visibility into the supply chain. And so that's one of the takeaways.
Let's talk about that visibility because many would say, look, it is now that the US says this, but previously the US and spies have a history of taking an advantage of the United States dominance in the supply chain. Now the shoes on the other foot, what can be done for investment by US companies to just track the supply chain.
Absolutely, I mean, it's a great question because it kind of goes both ways.
Right.
We've seen this in the context of the Russia Ukraine War, where the US government has really been leaning on companies to get more visibility into the supply chains going out, who are you exporting to, who's not only who is
your customer, but who's your customer's customer. And there's a big push on that from the government side, and actually on Capitol Hill a couple of weeks ago there is a big hearing and Intel and Texas Instruments and some other companies were really pressed on this, and basically what they were saying was it's very difficult to get that kind of clarity on not just who you're selling to, but who the people that you're selling to are selling to. So that goes out and then coming in same problem
because you're not necessarily sourcing. You know, when you're buying a vast quantity of these types of material semiconductors or whatever, you're not buying it from. You know, you may be buying it from one point, but that vendor is getting it from multiple points. And so it's kind of the double edged source of globalization that we're really seeing here. So it's a very difficult problem to solve.
This is where the Internet of Things comes in. Blue mugstand flatten me. We really appreciate your time. Thank you.
Meanwhile, one of email Musk's posts.
On X is facing an investigation by the Secret Service following the latest assassination attempt of form a. President Donald Trump mask took to X writing quote and no one is even trying to assassinate Biden Comma in a now deleted post for more, Bomberg Stanahal joins us for more, and you learned about this investigation through freedom of information at.
Requests to the Secret Service? What did you ask for?
Well, so the backup for a minute. When emailon posts things, they see an incredibly wide audience. He has millions of followers. His tweets are often amplified by others. And what was curious to me is that he posted this on Sunday and then he deleted it, and I was wondering why did he delete it? And I deleted and I think I actually tweeted at him like, hey, did you get a phone call from the FBI or the Secret Service? So then I just filed a request to the Secret
Service asking you know, do you have records? Are you investigating the side like any email correspondence? And what's funny about Foyer? And there's a little bit of an art to this is that usually it takes quite a while to pry records loose sort of get a response. But I immediately got a response, like within twenty four hours. They sent a record, they said to me a response, and simultaneously, our colleague Jason Leopold, who is like the master of Foyer requests, had also done the same thing.
So I was talking to Jason, like, hey, I just want to let you know that I filled this request, and he's like, oh, I did the same thing, and we've gotten very similar responses.
So dona just real quick. I mean, it is an our. You know, I've looked to you so often to try and get hold of documentation because you cannot hide from documentation. The response of the Secret Service is really interesting because in the actual response itself, I'm just going to look down on my screen because I don't want to get it wrong that they withheld certain thing because disclosure could
reasonably be expected to interfere with enforcement proceedings. And it's that sentence alone that lets us know what's going on in the background between Musk and the Secret Service.
Correct, And to be clear, we shouldn't like jump to a conclusion that this means that there will be an enforcement proceeding or that there will be a big outcome. But I think the Secret Service, you know, by a law, I mean they have to investigate anything that could be seen as a credible bet thread or could be seen as something that's a potential incitement of violence, and so it's fairly standard operating procedure that they would look into this.
For me, what I just want to know is what happened behind the scenes, Like was.
He urged to take this down by investors or members of his family or people in his inner circle. Was there a whole back and forth, you know, with campaigns, or did the Secret Service like call him on the phone and be like, hey, buddy, like this is maybe not so great.
Like I just would love to know exactly what happened in.
Terms of what inspired him to take him down take it down, because he got quite a lot of backlash and it was up for several hours.
ANAHA, the ALTA reporting Thank you Now. Palentiner has won a one hundred million dollar contract that will extend access to AI targeting tools to more US military personnel via the company's Digital Warfare platform. Now this will help create a picture of the same battlefield on thousands of digital screens simultaneously, and it's been used by the US military to help identify targets for airstrikes in the Middle East.
This year, Greenberg is reporting that.
Constellation Energy, it's the owner of the shuttered three Mile Island nuclear plant over in Pennsylvania, it's hitting record highs in terms of its share price because it's going to restart the reactor and set its output to Microsoft to power you guess, their oftificial intelligence. Bloomberg's Deinabas reported on this and actually there is this florry need for energy.
And we're turning to nuclear.
Now absolutely, because it's not just energy that Microsoft, Amazon, Google and all the cloud hyper scalers are looking for. They want clean energy. And you know, I think often we talk about solar and wind. Nuclear is also clean. It has some different components. It's always on, whereas wind and solar are a bit more variable. That's both a strength and weakness. One of the reasons Constellation had shut down this site five years ago is that they didn't have you know, the customer.
Demand for that always on.
Because for green energy, people were trying to pair things with solar and wind which are again more variable. Incomes Microsoft, which needs you know, tremendous amount of clean energy to run its ever expanding fleet of data centers and meet its climate pledges. And those data centers always need to be on so you know, Microsoft, Microsoft Energy chief Bobby Hollis told me it's a good match.
It's an interesting deal for Constellation. Obviously, Constellations shares are up significantly. They have to invest one point six billion dollars. But they get a customer who's pledging or contractually applied obliged to buy energy for twenty years. That's the mechanics of the deal. But I guess we have short memories, right, Diana. I remember, let's say two years ago, when not just Microsoft but Amazon as well had very ambitious energy and climate targets.
Right.
How much is that a priority for Microsoft?
So this has been a real issue for Microsoft. They still have these climate targets. One is, you know, all data centers running on green energy by twenty twenty five. And the other, which is the one that they're really not sure they can make at this point because of AI, which is there are pledge to be carbon negative by twenty thirty. They told us last spring that that pledge has been imperiled by the dramatic expansion in AI.
So the deal.
Today helps them, but it doesn't help them on the hardest problem. The deal today gives them green energy, and so it helps them with the green energy goal. But the biggest reason they are worried about their carbon negative by twenty thirty goal is other the embodied emissions from concrete, steel and chips which sure used in these data centers. So you know this part of the deal today that does not help them with that.
That is, as Bobby Hollis told me, a harder problem.
Bloombergstina Bess on an important deal but also important development in the world of AI. Thank you. Let's focus on the Xbox side of Microsoft's business, and in particular how it's president Sarah Bond is laying the groundwork for the company's next console in a bid to catch up to Sony and Nintendo. Bloomberg Cecilia the Anastasio joins us. Now this is a deep dive into Sarah Bond, a relative outsider, but now in what's a massive gaming company or arm
she's really important. What is she trying to do?
Sarah Bond is trying to move the Xbox business beyond the Xbox console. A head of Microsoft Gaming, Phil Spencer, says that they've been selling consoles to the same two hundred million global households, and they really want Xbox to mean more than the plastic box in your living room. Sarah Bond's mandate is to expand xbo games into phones, into next generation hardware shore but also, you know, potentially handheld, which is something that she and her boss have have sort of teased at.
Your story is so fascinating because you go into the relationship between her and her boss, how they turn to HR to really ensure that they could communicate more efficiently. But also her history T Mobile, what is she going to bring to the TABLESSMIA.
Yeah, Sarah Bond's history from T Mobile really gives Microsoft expertise that was lacking in the mobile world and in the mobile gaming world in particular. So at T Mobile, she's someone who knows a lot about subscriptions, a lot about how to keep people coming back to a product and also how to trim subscriptions in a way where users don't feel bloated by extra services they don't need.
And Microsoft has a sort of Netflix for game service called the game Pass that has thirty four million subscribers, probably more at this point because that data is old, and Sarah Bond is being to reach gamers who want sort of a subscription product using game Pass, which will be available on phones, on PCs, on tablets, on Xbox, on smart TVs, whatever you you know have, Xbox hopes to be there.
So see really quick, A big impetus for the Activision deal was mobile gaming and yet to see the story there, what is it.
It's a little challenging. So when Microsoft announced the deal with Activision, mobile was the fastest growing segment of the games industry. Now, global consumer spending on mobile games dropped two percent in twenty twenty three. It's still, you know, an over one hundred billion dollar industry. But you know, PC gaming is actually the fastest growing sector of the games industry this year according to one recent study. So it's going to be a little challenging for Sarah to
kind of make good on the Activision acquisition. And at the same time, you know, she has high hopes because so many people have mobile phones.
Cecilia, it's a great report. We thank you, Cecilia Anastasio, We thank you. Welcome back to Bloomberg Technology. I'm Caroline Height.
In New York and I'm me d Ludlow in San Francisco.
I need to be discussing when it comes to AIS always an open. AI's latest fundraising is near completion, with perspective investors set to find out today whether.
They'll be part of the deal.
Sort according to sources, Bloomba's Katie Ruth has more everyone wanting in on this.
Well, certainly a lot of venture firms are in strategics. You know, we've reported that Microsoft, which is an existing investor, would be putting in more, but also in Nvidia and Apple, and then you know a flew of other investors are trying to put money in.
They'll find out.
Today after it was over subscribed by billions of dollars.
What I find interesting, Katie, a source told me a couple of weeks ago. You may remember that in Video is only going to put in one hundred million dollars, and there's other reports out there that there's a threshold. But it's not a surprise, is it that the world's most important AI company has investors of all kinds fighting to get over what is a relatively rare round sure.
Well, I mean they raised last year at an eighty six billion dollar valuation, so it's a significant premium to that.
I think.
You know, there's no question there's a lot of demand to be in you know, this this transformative AI company. By at what price?
That was the real question.
But they've certainly had plenty of demand at this one hundred and fifty billion pre money valuation.
Yeah, that was a liquidity event for the employees. That eighty six billion phenomenal at the rate that they've managed to raise.
Do how important is the strategic side of this?
How much does Open AI want them at the cap table?
Well, certainly it's good to have trillion dollar companies in your court. It remains to be seen, you know what exactly they have in mind, what kinds of otnerships they want to expand upon. But yeah, you know, I think that it's a very competitive race to be the leader in AI. And if you have companies like Microsoft, Apple and Nvidio betting on you, then it really makes you even more competitive.
Katie Ruth, Wait, thank you.
Now.
Another side of AI is its regulation. The United Nations Expert Group says AI governance discussions been too fragmented The group includes government officials, academics, other executives actually from Google, Microsoft and and deed open AI and it just came out with a report suggesting measures like establishing a fund to support poorer countries looking to work on artificial intelligence and calling on countries to limit military use of AI
to prevent human rights violations. Meanwhile, we sat down with the presidents of Latvia yesterday and asked him whether.
AI should be more regulated take to.
Listen the use of social media, artificial intelli joints for disinformation, the fakes, interference and elections. I think we need some framework. But at the same time, and this is sometimes a challenge for the European Union and about the European Union. Let's face it, to be sometimes back in Europe get overly regulatory.
Let's keep the conversation going with NYU Professor Emeritus an AI expert Gary Marcus, who's known for his critique of the booming AI industry. He's also the author of a new book called Taming Silicon Valley, How we can ensure that AI works for us and he joins us now. Gary, based on the idea of fragmentation of regulation, I always think about how AI technology is required to respect the laws and rules of various jurisdictions. At the same time,
technology isn't bound by jurisdictions or borders. What do you make of the sort of preamble that we're fragmented.
I mean, we certainly are fragmented. I think when we think about global AI governance, there's actually an advantage to the companies and having global AI governance, and that is that fragmentation. You think about how expensive it is to train these models you saw earlier today Microsoft buying the rights to the energy of three Mile Island one hundred percent.
It's very expensive to train these models. And if you have to do that differently for every jurisdiction, because they each have their own rules, that would be an insane amount of power, especially when we're talking about maybe making bigger models one hundred times, a thousand times, ten thousand times bigger than existing models. So fragmentation is actually a problem for the companies.
It's also a problem for the world.
I mean, we really do want to have some uniform approach to all of the downsides, things like nonconsensual deep thake, foreign misinformation and so forth. There are many downsides, and we want a coordinated response to it. So I think it's actually in everybody's interest to have some coordination.
But fragmentation is the DePaul.
Let's talk about coordination.
The United Nations has put up this thought process report and now they want an independent scientific panel on artificial intelligence in the same way they almost have with climate change.
Is that going to help?
Is that going to make sure that more people are at the table other than basically the G seven and some of the biggest companies in the world.
I mean, God is in the details. But I think it's a good start. I think absolutely we need more independent scientists weighing in. We also need authority if something doesn't work, to do something. So one of the most interesting things that happened the last couple of weeks is open AI put out a new model and they said there's a bioweapons risk here.
Now they might be right about that.
They might be wrong about it, but let's suppose they're right about it. They decided, despite that risk, they would go ahead and release it. And that was really just ultimately Sam Altman's decision and nobody else's. Who was Senate testimony earlier in the week where former employee and a former board member said basically they didn't feel listened to, right, and so open Ai sam Almon doesn't have to listen.
If his employee say the bioweapons risk here is serious, maybe not for this model, but the next model, he can go ahead anyway and say, but I need to make back the money for one hundred and fifty billion dollar valuation, which by the way, is not a trivial thing.
And there's also no outside input.
So even if this IPC panel that says, you know, this is dangerous, there's nothing in the UN that can immediately do anything about it. There's nothing in the US government that immediately do anything about it. So it's a very good, I think thought experiment, like when this stuff gets worse, who's making these decisions?
I mean, but this has happened time and time again, and we always go they should self regulate.
And in a way, Samon one did just that. You just told me that you're coughing.
A bit because you're basically exhausted having written this book in two months out of share anger.
In a way, what's what's the response to the anger? What's the answer here?
Well, I mean the anger is partly I went to the Senate. I testified next to Sam Altman, and he talked about not just self regulation but real regulation. The Senate bipartisan all talked about. This was May of last year. Nothing has actually happened. There's been no you know, major piece of legislation in the United States to deal with any of this. And self regulation is not going to happen.
I mean, even when they make promises, they often back down and they're not they're going to agree to things like information sharing. They're not going to agree to, you know, deferring the decision about whether to release this new product that maybe finally makes them some money to the general public.
And they're not making money right now.
I mean open Ai I had a five billion dollar operating last year.
Last year, Let's go back to what you just said on open ai. It's not a trivial amount of money, but the stakes are also very high. How much does that keep you up at night that we have a single company with quite confusing governance structure that has the world's biggest technology companies and investors fighting over around and it's releasing technology at a cadence that you outlined.
I mean, everybody should have been worried at the drama last year. It sort of made for an amazing Netflix special or something like that when Sam.
All we remember buyed and we hired and all of this drama.
But it also says like who is running this company and what are the checks and balances? Right, And the ultimate answer is Sam is running it. There are no checks and balances, And you know, we should be worried if a company can't even govern itself internally. A lot of people left after that incident. We should be worried.
It's a lot of power, and we should be worried, not just about open air, but the whole industry, like responsible AI excuse me as a watchword for the entire field for a few years, and now it's almost like nobody really cares because there's so much money on the table.
We had the President of Latvia here yesterday from the European Union. You have Hunger next week. Do you have any hope that actually these sort of round table, state level discussions will yield some kind of framework in which the world's kept safe from AI.
I have a mild bit of hope, but I think that we really need the public to be involved and say this matters, So you know, politicians always have to weigh in competing interests. They get a lot of money from the tech companies. They are involved with the tech companies in various ways. If the public doesn't speak up, I think we will see very light regulation, if any
at all. The reason I wrote this book is I think making these decisions the most important thing that we can do for one of the most important things we can do in the world in the next few years. Think about what happened with social media. We waited too long and we entrenched the set of practices that now lead to all kinds of polarization, bad for teenage girls and so forth, and it's hard to fix these things. We have to get AI policy right now.
I expert Gary Marcus, so good to have you appreciate.
It, And what are you looking at?
I think we should reflect on the week in markets, Carol. I'm going to the mag seven index. It's a Bloomberg index of those magnificent seven names, because we spent a lot of the week talking about them in the context of the FED that, okay, we now know where we stand with rates finally being cut by fifty basis points going lower. There's a valuation question around some of those that had incredible performance in the first half of this
year and actually over a longer duration. And then there's the idea of, well, what happens if we do or don't get a recession? It very closely mirrors. Then there's that one hundred that you showed earlier in the show. But yeah, no dirt. You know a lot of the biggest points drivers on that index are than mag seven anyway, and it's just interesting to keep our eye on the trajectory of them. Will they continue to be the story
in this market? Okay? Coming up in the program, we're going to hear from Salesforce CEO Mark Benioff as they launched some new AI tools over at Dreamforce. Their conversations. Coming up next Sploomberg Technology.
Salesforce is launching a slow of new gen AI tools known as Agents. CEO Mark Benioff spoke with bloom Megseminey Chang at their annual Dreamforce event in San Francis.
Go to take a listen.
These customers have been convinced something that's not true, that they have to buy an LLM, they have to go to a hyperscaler, they have to get a database, they have to buy a security technology, they have to choose a chip, they have to hook it all together themselves. They have to deiy their AI. It's not true. You do not have to diy your AI. And when we
started the show, they didn't really believe it. So that's why we created a whole factory across the street as you saw in Moscowe West, where we have put more than ten thousand customers through already, to show them that on the Salesforce platform, which they've already been committed to for more than twenty years, we've had great success in sales and service and marketing and communications and commerce and analytics and Slack and all of these technologies that now
they're also building AI. And this is a shock to them and sing for us because they're showing them how once again we're future proofing their company with the Salesforce platform.
So you've basically di wied it for them, software company.
What models you've built it on? Is it?
Is?
It?
Is it?
We have our own, We have many and they don't need to know. Okay, and they don't why what chip am I using? You know what hyperscaler? They don't care. They don't care what I'm using you know, it's like what type of flowers in the cake? What kind of sugar did I buy at the store? Why does it matter? Do you like the cake? Is this the final product that you like?
All right?
And I think that for our customers, they don't want to know all the pieces. They want to know does this work and can they make a greater success for their own companies.
That was Salesforce CEO Mark Benioff. Staying with Salesforce, it's investment on Salesforce Ventures just announce a five hundred million dollar investment fund for AI that is expanding. It is discussed as John SUMMERGI, Salesforce Ventures President, and I just want to do the mechanics of this really quickly. You basically invest now with almost like a billion dollars capital play with off balance sheet from Salesforce, Right, and you're looking for things that add to what Mark Benioff was
just talking about. Right, You're looking for the next frontier of an actual GENAI tool exactly.
So we feel that AI is one of the most significant innovations in our lifetime, and we're looking for entrepreneurs who are helping to solve business challenges in unprecedented ways. That AI allows them to do so. And last year we announced a five hundred million dollar fund. We invested in twenty four companies with that money, and we decided to expand it to up to a billion dollars now to invest in this very exciting AI innovation.
We just listened to Mark Benioff talk about why salesforces generative air offering is better than any company of any size engaging with the GPU provider right through to application layer, and it sounds like they're pretty happy with what they've got to offer. So how can you go and find something new that Salesforce doesn't already have.
Well, we're seeing interesting companies develop new business applications that are in new areas. Like for example, we invest in a company called Runway, and if you're familiar with the Oscar Awards winning film Everything Everywhere, All at once, they used Runway technology to take their editing staff from you know, normally hundreds of people editing this very complex movie down to a handful of people using their technology. And this
is real productivity value that's being delivered. We're seeing interesting developments in new models, in new vertical applications, in AI security, in areas that are we do not cover today, but we want to partner with these companies and deliver more solutions to our customers.
You're an Anthropic.
Listed as one of the wannabes in open Ai.
Why not?
So we partner with both open ai and Anthropic and the number of other LLM providers. We also have our own lms as well, our large language models, and we are very excited about what we've invested in with Anthropic. We are in hugging Face, which is an open source provider of models, and we're also in Mistral, which is another another provider, and so we feel pretty good about the investments that we've made in the foundational model level.
And now we're looking to invest in different types of companies with this new five hundred million dollar fund.
What's so interesting is full of Salesforce. Last five acquisitions have been funded at some point by Salesforce ventures. How much do you end up realizing you should buy these companies, not just strategically invest in them.
Well, one of the benefits of investing in a company first is that you do get a chance to work with them and see how the technology can help deliver success to your customers. And we do partner very well with a lot of the companies that we invest in. But keep in mind we've made investments in over six hundred and thirty companies over the past fifteen years. We've only acquired twenty of the companies that we've invested in, so it's a very small minority of the businesses that
we've invested in. But we're very excited about some of the recent acquisitions we've made out of the fund. Companies like SPIF, which do an incentive compensation management airkit, which is a big foundational element of our Agent Force technology.
We acquired them last year.
Adam Evans, the founder of Erkitt, is a two time boomerang back to Salesforce. We're really excited to have him.
John tens At thousands of people have descended on our city for Dreamforce.
So exciting.
I've always thought about it as a customer event. I know loads of people that either work at Salesforce, MuleSoft, or they use CRM right historically, for you, what's the week been like in terms of unearthing interesting founders, interesting startups that you might write a check for.
I think this week is one of the most exciting weeks I've ever been in San Francisco. The energy in the city is really palpable, and you're seeing CIOs and C suite executives meeting with entrepreneurs at Dreamforce together all at Moscowy Center. We had over forty five thousand people in person, and from my perspective, I got to.
Say the traffic was dreadful last night, Thank you very much.
From my perspective, I got to meet with some fascinating founders who are really redefining the way AI is going to work in the future and solving critical business challenges. So I'm very excited about what I saw this week.
It's great to have some time with you.
Thank you, John SUMMERJAI as sales scance ventures.
Demand has been really strong in the US. We've had incredible large infrastructure projects going on, the overhaul of the grid that's going on, AI demands on electrification, telecom and everything is being delivered, both services and goods, and this has created a whole new sets of business for US. So we see incredible demand across all our vehicle lines, both here and any of Europe.
Ford pro CEO Tim Canis.
They're talking about the accelerating commercial adoption of evs and he's there at the outset of a new and revamped Wall Street Week with David Weston now joins us because the host of that show that we're about to be able to watch in full later today, David and.
Ted Cannis is a friend of yours of this show. Actually, I've seen him.
He's the character.
Yeah, but the demand seems well, and he's always been somewhat raw raw. I think you'd agree. But the thing that I didn't really understand until i'd gone out there and talked to him and Jim Farley, the CEO of Ford, is there are two stories about EV's i'd heard meaning one story, and one of is the consumer side, which is slowing down all around the world, frankly, and then is the commercial side, these delivery vans and emergency vehicles,
And that one is just as robust as ever. And as you know, Ford has a significant advantage in that it's something like forty percent market share in that market.
I think the thing you learn about the EV industry is it's complicated. David. You make that point so well, So how do we take that to Wall Street Week? There's always a money story behind everything, and within an industry, and even on Wall Street. There's a culture story behind it. How are you going to tell us that?
The question is really and that is the larger story. You're exactly right ed. The question is what does this mean for an auto industry Detroit, O industry that is trying to rebound from some very dark days as you know, back in the eighties and the nineties and actually going to the brink of extinction during the Great Financial Crisis. What is that need they think that the ev impetus
will really drive them. They're having a little trouble on the consumer side, but Ford particularly is relying heavily on the commercial side. So it really raises the question for investors is this a good investment or not? Is this someplace you want to put your money or not into
this resurgent auto industry. And one of the things we talk about with Jim Farley particularly is China and China coming on the scene and the very high quality, very low cost something he says a little bit like Toyota because he used to work, as you know, Jim Farley at Toyota. Even though he comes from Detroit, he were for Toatorya and he saw those battle days.
It's going to be fascinating China, important for higher education. You delve into that sea as well as the business of restaurants. You don't want to miss it all Street week later at David Weston six pm New York Time. That does it, though, for this edition of Bloomberg Technology Ed What.
A week Cambionship Technology Recap on the podcast you know exactly where to find it from New York and ess this is Bloomberg