From Mahart where Innovation, Money and power collie in Silicon Valley NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Live from New York and San Francisco.
This is Bloomberg Technology coming up Microsoft and Meta results drag the market lower. We'll take a deep dive into how the AI story is playing out for them.
And door dash posts its first operating profit since the pandemic as it grows outside restaurant deliveries.
We speak to the CFO.
And we will sit down with Graylock partner and LinkedIn co founder Reed Hoffman to discuss the impact of the election on Silicon Valley. But first we check in on these markets that are to the downside the NASDAC as I shine a light off by more than two percent of this is as the earnings come thick, come fast, and Ed's going to be describing some of the key point contributors to the downside. But I highlight Uber, one of the latest ones out this morning, down the most in two years.
Why gross bookings just not as high as market had wanted to see.
We're seeing forty one billion dollars for their quarter just reported, but the market wanted to see higher and they wanted a better forecast as well. Is it being crimped back by perhaps a slightly slower growth in the United States.
We're seeing California and.
New Jersey perhaps pushed back a little bit by the cost of insurance, for example. But also there's an FX headwind that's happening even though we saw record operating profit eds so uber to the downside.
What else are you watching on the micro.
Basis, Yeah, emphasis on forecast when it comes to the megacaps and members of the mag seven that reported Meta narrowly beaten the quarter gone on the advertising business, but it's warning of greater losses in reality labs as it continues to invest in AI and capital expenditures growth into
twenty twenty five. Microsoft is similar story. In fact, the stocks down by the most or on track to be dropped by the most since October of twenty twenty two, as your growth in the next three month period will be thirty one to thirty two percent, but that's a declined sequentially from the thirty four percent in the court of just Gone. Unbelievably, they're saying that their supply constrained or capacity constrained on the data center side.
In other words, they.
Don't have the compute capacity needed to meet the demand that's out there for AI, which is like a really fascinating predicatiment to be in there. But also record spending right in the course just gone. The themes are quite consistent.
Carroc, the themes are and so is the movement across most of the market. Let's bring in bloomberg'sjes menton who helps really focus in on a drag lower for the NASDAC and all eyes really have been on AI capacity and AI spending.
That's right, and especially with Microsoft because they've ramped up so much spinning, and especially I know you cover the data center's focused as well, because that's not.
Something typically a company.
Like Microsoft would have done, say before twenty twenty, but especially especially if you think about the utility stocks have been taken off those types of tie to the data
center biness. But that's really where it is when you're thinking about the CAPEC spending, not just for Microsoft, when it comes to these other companies too, because even say if you're looking over at Meta Mark Zuckerberg made it clear they're still going to keep up that spending for AI even though you're starting to see that is quite of a boost there too when it comes to sales tied to those types of AI losses there, but also when you're thinking about we still have in a video
coming up for it's still a few weeks away, so it's November twentieth, but when you think about its core key clients here when it comes to AI spending and what it means, I mean, they're all reporting this week, so we already heard from Alphabet, obviously, we had Microsoft and of course Meta, and then we'll have Amazon after
the bell. But with them raping up spending, that obviously is going to boilde well for Nvidia, and when you think about nearly half of its revenue growth when it comes to those types of addison.
Yes, let me jump in here.
Though.
Really interesting, we're showing in videos down four percent or more than right in video right And what's so interesting is that second biggest points drag on the Nasdaq one hundred and maybe the logic here is that Microsoft one of the biggest buyers of invidious chips along with Meta, their growth outlooks are disappointing. So even though they're both saying we are committed to spending on AI if they can't sustain the growth that investors want to see in
response to that, maybe those plans change. I just think that's so interesting to see that name down significantly despite its biggest customers saying yeah, we're going to spend money on them, no worries.
Well, a lot of that also has to do because the lingering concerns about the black wall chips, and especially when you think of product delays and it's long term growth prospects. So a lot of that really is tied there to your point as far as what that means and as far as how long can some of these companies continue to ramp up that spending because we normally haven't seen that, Like I mentioned, when it comes to something.
Like Microsoft astonishing gains going into earnings. It's an amazing and interesting market session, and we have Bloomberg's Jesmentum, we're grateful for it. Thank you. Let's get the cell side reaction and bring in Sweater Cajuria, Managing director for Global Internet at Wolf Research, And I think we've got to start with Meta. It's a really interesting company to understand because beaten, the care to gone, the social media advertising
supported business reality labs will see greater losses. Capital expenditures will continue to grow. I've got a really big sense of deja vu. I don't know about you, Schweta, but what was your takeaway from that?
Yeah, well, first of all, thanks for having me ed, it's good to be here. My takeaway was that there are a lot of good things that are going on for Meta and if we think about at a high level, yes, on the negative side, gapex remains unclear. They'll probably spend maybe fifty to sixty billion dollars in gapex next year. We'll see when they guide, but that's a pretty big number. And the losses in reality labs, certainly to your point,
is a concern. But on the flip side, what they are doing in terms of how they are leveraging LAMA, which I believe is a stroke of genius on their part to their own advantage, is amazing. Especially as we
think about engagement and monetization. Video recommendations alone are driving mid to high single dige percentage growth on time spent impression growths are highcing gole digit pricing is improving eleven percent for them and so and METAAI already has five hundred million mus and so the engagement on the platform is remarkable, and what they are trying to do is continue to be able to monetize on a go forward basis.
So we expect their revenue growth to be sustained that you know, call it mid team's growth rate even at current levels. And they are probably one of the biggest beneficiaries of deploying AI for their own advantage.
I mean, not half a billion monthly active use as a metter AI was arresting, but what arrested the market was the twenty twenty five promise to spend.
Just take a listen to what Mark Zuckerbag said on the core.
First, it's clear that there are a lot of new opportunities to use new AI advances to accelerate our core business that should have strong ROI over the next few years. So I think we should invest more there. And second are AI and continue to require serious infrastructure, and I expect to continue investing significantly there too.
So in your note Shretter, you talk about the new opportunities, the new revenue avenues that we're going to see. What are they articulate that for the market.
Sure, well, in the nearer mid term it is leveraging these AI, the AI models and LAMA to their own advantage around engagement and monetizations, so they are making their recommendations better. An example would be unified videos. They're making a full screen video on their platforms across their apps, and that's going to drive engagement because it's live videos, short form videos, differentiated videos, all on one platform on a full screen, and that itself has opportunity to increase
supply in terms of ad impressions in that format. In addition to that, they're using AI to make those recommendations more targeted and they have not really untapped that opportunity as much advantage, which plus is what grew their growth in twenty twenty four. In twenty twenty five is most likely going to be video recommendation platform and their video feed That will probably drive their advertising growth in the mid to long term. There are several other revenue sources
that they never had before. For example, business to business messaging on WhatsApp that's probably two years out, but they're already monetizing that, and then beyond two years Meta AI in terms of adding advertising to their search feeds on Meta ai in addition to subscription. Just like Chad GPT or Gemini are completely new revenue sources for them.
And they continue to see early surprise success with ray van Metas the Glasses and Swetter. You do not cover Microsoft, but you do follow Alphabet, the parent of Google and Amazon that reports after the bell and in the context of cloud, I look at what Alphabet said and last night Microsoft both seeming to suggest that the number three and two players took market share from Aws, Amazon the number one player. Do you go into Amazon's earning tonight with that analysis as well?
Absolutely, I mean the top three players in the market are Amazon's AWS, Azure and Google Cloud. What we also saw with Google Cloud because I do cover it is thirty five percent cloud growth rate and in part driven by them not only gaining share, but also part of expanding markettam, which is their AI services and products are really driving that growth. If we look at their ten Q and the backlog, the demand rends that they're seeing
are pretty amazing. So going into Amazon's print, our expectation is that Amazon's AWS Cloud revenue likely grew twenty to twenty one percent, and the streets looking for nineteen percent growth rate. That's our expectation and we expect that to accelerate in the fourth quarter.
You have an outperform writing on Amazon allies in that after the ball Schwartzek.
Great to have you of Wolf Research coming up.
DoorDash remarks a major milestone since launching its IPO. The CFO Rabi Uconda joins us. Next, this is Blueberg Technology Time now for talking tech. First up, It's official the EU is investigating e commerce platform Temu for potentially violating the Digital Services Act. Now, the commission suspects that the company is not doing enough to combat sales of illegal products on its site.
Meanwhile, Elon Musk.
Was sued by the Philip Philadelphia District Attorney of his political action committees one million a day sweepstakes targeting swing state voters. Now the DA is asking a state court to stop Musk from engaging in what it calls an unlawful lottery. And Pelton has tapped Ford executive Peter Stern as its new CEO. The fitness brand has struggled to lose profitability since the pandemic. Ford Hardston last year to run a newly created technology focused division of the automaker ed Okay.
Door Dash has topped Wall Street expectations in nearly every key metric. This earning season seeing its first quarterly operating profit since the start of the pandemic, generating one hundred and seven million dollars in operating income. And really it's a story about an app or platform that's shifted from restaurant deliveries to so much moreh CFO Rave in a Conda is with us here in San Francisco. Let's just focus on the future. So that was the story, right,
that what's happening is success in other business lines. But so many interested about this long term future of door Dash. You hinted there would be long term investments in new areas.
What are they sure?
We started our business with the restaurants as the core focus, but today we are so much more than restaurants. Consumers have it an all time high. More consumers are ordering from more categories. It's grocery, its retail, it's Halloween costumes. We are partnering with every single store in your local neighborhood. Our goal is to be your local neighborhood superstore.
Which areas are the most profitable potentially business lines for the app.
The overall business has been gap profitable now for the first time as a public company. The way we think about it is we are trying to build scale in our business. Scale is the most important thing because scale drives efficiency, which ultimately drives profitability in the business. If you look at our restaurants business that has been profitable for a few years, we're taking the profitability and building our new categories business as well as our international business.
Let's just talk about international because you made acquisitions there and I'm interested as to how the consumers stack up US versus international consumer.
Right now, RABI International is seeing very good and strong growth. The growth has been substantially faster than peers. We're gaining share virtually in every country that we operate in. All of that is being driven by the underlying product innovation. Users are growing, order frequencies growing. We launched World Plus, our subscription program in international markets, and that's off to our flying start.
What's interesting is.
You're doing partnerships here in the US.
It is with lift.
How integral is that sort of a partnership for growing your user base, which, of course your CEO is saying, you're still only a single digit fraction of the overall restaurant industry.
We're excited by the partnership with Lyft. We think it's an opportunity for us to make dash Pass even more valuable. We have over eighteen million plus subscribers that have saved over ten billion dollars globally. Partnerships like this make it a little bit more attractive, help our consumers save even more. But the core focus continues to be to improve the platform. That's where we see still the majority of the growth for us.
You know, Rabi combining right hailing with delivery of food and groceries sounds a lot like what Uba does, but there's an interesting analysis to be done why you're friving. But Uber also printed results that showed the consumer is a little bit tepid right now in the right hailing context in this gig economy world. Why is it that you're succeeding in the here and now?
We have so much more than restaurants. I'll give you a small example. Just a couple of months ago, we were running late for back to school. We use DoorDash for back to school supplies for both of our kids.
Okay, we want to.
Take away the worry of having a to do list.
We want DoorDash to be.
Your local commerce to do list. Local commerce is a large opportunity. Delivery is the most frequent use case people need at local stores. People order from local stores more than any other activity, and we are the leaders in that space. We are providing selection, We're bringing the best of local neighborhoods to your doorstep.
Let's just talk a little bit more about the geography of where you want to be expanding. I mean, is it about spending power a geography when it comes to a deal like the one that we see with Lift, and how do you then extrapolate that to potentially international geography growth as well.
We operate in over thirty countries, and the interesting thing is even in all the countries that we operate in, we're not in all the cities. Our focus continues to be to build the best product possible, not just for consumers, but merchants as well as dashers. We just announced a product we call Commerce Platform for our merchants, which continues to do really well. Even in the US, we are the fastest growing from a grocery perspective. We're gaining share
compared to peers. Our goal is to expand to all things within local commerce, within all the countries that we operate.
In your technology company. You just talk us about your business. Why give me one reason why it helps you stand out. You're very good at that, maybe others on.
There's three legs to the stool of growth that we think about. It's selection, it's quality, it's affordability. It's not one or the other. It's a combination of all three things that consumers are looking and asking for. And we're driving same store sales growth for merchants. Over seven million dashers have dashed with us in the last year, earning over fifteen billion, and we are the fasts going from an overall consumer footprint perspective as well.
Rabbi, we want to thank you for coming in spelling out the learnings and the potential door dash Cfo Ravi in Acondo there. Meanwhile, coming up, I'm going to be speaking with the Twilio CEO coming up next on the heels of the company's quarterly earnings report and what are you looking at in tess of earnings?
So really quick check on eBay stockdown more than eight percent as a familiar story. The forecast for that key holiday period was lackluster, and you know, I think It's an interesting one because we're just talking about door Dash and Uber and this key final three months of the year. Everyone is giving us different as signals about consumer behavior, but investors do not like what eBay is saying about its marketplace and platform. We'll keep tracking it. This has
been most technology cloud communications player. Twilio's third quarter earnings beat all street estimates and the company has now raised its full year revenue outlook. Here with more Twilio CEO Cozama Ship Chandler turnaround plan seems to be working, Margins are improving. There's been this call ay structuring since you came in as CEO or jump to CEO, which bit is working best?
Yeah, I wouldn't call it a restructuring.
I would say it's steady progress, really good financial discipline, operating rigor, a lot of innovation focus. And I think what you're starting to see is that show up in terms of accelerated growth, and I think increasingly we're starting to become a beneficiary of this AI wave.
Let's expand on the innovation. Part of the blackstory you know with Twilio was investors who really want to see sort of discipline and a growth plan. But you're doing things in the world of technology that matter.
Yeah, I mean, I think you're starting to see margins.
Really improve over the last several years, which I think has been exciting for investors, certainly been exciting for us. I think on top of that, though, we've also seen a real return to innovation. So we're making some really
focused bets in terms of where that innovation lies. And for us, it's really about delivering for consumers Visa VR customers personalization at scale, and what that really means is how do we combine communications plus contextual data plus AI to deliver these amazing consumer experiences through digital interactions.
Because the magic of television. Your IFB's popped out, feel free to pop it back in. And I'll point out that a lot of the cell side analysts have raised price targets on this idea. I think they see a clearer future just very quick. So I want carry to come in. I think that's fair. There's a clear longer term coffee.
Yeah, I do think so, and I think we feel pretty optimistic about our long term growth ambitions. Obviously, we want to balance our ability to grow the company as well as drive ongoing profitability and free cash flow and finding that balance really is the trick.
But as I look out.
And see what's happening in sort of this age of AI, I think we're going to be one of the real beneficiaries.
Let's talk about monetizing that AI cousmurf. You can hear me well, because Morgan Stanley says, look, it's encouraging this AI product integration, but they want to see the monetization.
How do you turn that on?
I mean, I think the way that it happens is is that we've got this great data asset that we bought several years ago in Segment, and on kind of a standalone basis, it's a relatively small piece of our revenue. But the long term play here is is that what Segment does is extract contextual data out of the businesses that we serve and our ability to combine that with communications capabilities and then use a little bit of a to create that awesome consumer outcome on the other side.
Like, that's really what we're going for, And.
What it kind of means is is that whether it's you, whether it's the two of us, or whether it's thousands of other consumers all at the same time, us being able to achieve that personalization as if a business knows every single thing about us in the way that they interact with us.
That's what we unlock.
It's really interesting you bring up that segment part because that was the area of the business that activist investors wanted you to shirk to sell off. There is still some weakness within it. Are you standing by the decision to keep it as part of Twilio and how do you tell that story going forward?
Yeah, I mean, look, I think we've made progress in that business. We made a number of commitments at the start of the year in terms of what we intended to do to improve the ongoing performance of that business. We're very much on track to get that business to break even. We've made a number of improvements in the go to market capacity of that business. It's not like our work has done yet, it's still kind of continues
to pace. Again, I think it's important to remember that it's really less than seven percent of our revenues overall, and so when you consider it in the totality of Twilio, the business growth is reaccelerating, the margins have been fantastic, free cash flows have been activating, and now segment really becomes an activation engine for AI using data and communications.
Because the stock is up fifteen percent, on track for his biggest jump since twenty twenty two, at one point, biggest jump since twenty twenty. I know that this is a technology show and that many executives on it are very disciplined about talking about the stock. But the market's rewarding you here. What do you make of it?
Look, I think we're making steady progress right and we're not necessarily focused on the day to day movement of the stock price. I think this is the long game that we're fundamentally playing here, and I think the age of AI is going to play out for a long time to come.
That's what we're excited about.
How can we deliver for customers in a very personalized way, again using communications plus contextual data plus AI to deliver those amazing consumer outcomes.
Twillio, CEO Kozumership Chandler, thanks for joining us today on the numbers. Welcome back to BlueBag Technology. I'm Caroline Hide in New York, kind of ed.
Lovelo in San Francisco.
In terms of earnings and markets, car I'm going to go to some of the crypto related stocks because there's a lot to fit in. So coin based missed estimates essentially in the quarter gone. And what they're talking about is we're entering election week, there is volatility and crypto assets and markets tied to that, but it's not really clear whether they're going to benefit or not. We'll continue
to track it. Micro Strategy again, it's a name that holds bitcoin in particular on its balance sheet and has pledged to buy more bitcoin but saw a loss in the quarter. Were one of the first companies to do that, by the way. And when we think about bitcoin volatility, yes, but still above seventy thousand dollars per token. Then there's the megacaps. Much to discuss with them.
So much on the megacaps. Let's talk about Microsoft earnings. You want to get back to it because it underwhelmed the forecast for growth from as you're perhaps letting the market down somewhat in terms of growth.
But Microsoft CEO Sati and Adella is continuing to talk.
Up the company's AI business on the earning school at least just take a listen.
All up.
Our AI business is on track to surpass an annual revenue run rate of ten billion dollars next quarter, which will make it the fastest business in our history to reach this milestone.
He's got big talk.
Let's analyze it with the BLUEBG intelligence Senior and this manly saying Microsoft is such an interesting one.
Because the cores look great.
They're seeing as your growth back at thirty four percent, and then the forecast was a little bit weaker and it seems to be a capacity that's limited.
Here would you make of it?
Well, so look at the Google Cloud growth and all these vendors are growing. You know, the core business is growing north of twenty percent. When you take out the AI element. In the case of Google Cloud, we saw the growth accelerate to thirty five percent and that was all powered by AI. In the case of Microsoft, they did some resegmenting, so they took out some portion and it's not a very clean number to see. Okay, AI contribution was twelve percentage points, and that's where you know
whether it's behind Google Cloud. It's not very clear because of the resegmenting. But net Net, you know, they called out GPUs supply shortages when your capex is growing up fifty percent, and that's where you have to ask for yourself, what is the CAPEX being spent on then if you don't have enough GPUs, are they spending more on facilities?
And you know it's hard to parse that out, but Google didn't call that out, so you know, it'll be interesting to see what Amazon does tonight in terms of you know, their n radio allocation and how they are framing you know, the capacity shortages when it comes to the advanced accelerators. But that's what it comes down to, is how much capacity do you have available for external use versus what is open AI consuming internally for training?
A lot of that is geared towards the enterprise business, right Mandy. Even with Microsoft, this is a company that's been wonderful. It's selling software to consumers as well, particularly software that sometimes you can get for free on other platforms. Did you get any sense of the trajectory of consumer adoption for these kind of AI Improved Office three sixty five and products like.
That, I mean, very unlikely.
I don't think they want to focus on consumer right now because the enterprise opportunity is so big.
And they called out you.
Know, separate products Copilot, Copilot, Studio, Agent studio, so they are creating you know that bundle that Microsoft is so good at selling, and I'm sure they'll get a lot of traction. But in terms of separate AI contribution, which is what I think Meta got penalized for last night, is not having that separate AI contribution even though it's
getting reflected in their family of apps. That's what investors are focused on because the topics increases are so big, and these companies keep calling out skialing was so you know, you have to find that ceiling. How much will their cabex keep going up?
Need the transparency you help bring it. Bloomberg Intelligence Senior analyst Mandat Singh.
As the election approaches, leading voices in technology and the bench capital industry on both sides are throwing their weight behind their preferred candidates, like Elon Musk appearing at a Donald Trump rally just this past weekend. Today on Bloomberg Technology,
we're going to speak with Reid Hoffman. You perhaps know him best as the co founder of LinkedIn, but the billionaire and investors also part of a group of Silicon Valley investors that are immersed in this presidential election, rallying behind his or their favorite candidate in the race.
Kamala Harris.
Reid Hoffman joins US now and read thank you for your time in coming on Bloomberg Technology. You know, the pitch and the place is to keep this focused on tech. So I would like to ask you why is Kamala Harris the best candidate for the technology industry and bench capitalists around the US.
Well, So, what the tech industry needs is kind of a stable environment in order to you know, kind of follow the rules and prosper in an ability because, by the way, one of the things that the tech industry brings to the US is a kind of a It's one of our most successful global industries where most of for example, the large tech companies get the vast majority of the revenues overseas, like the majority and depends on
the business and and so good global relations. In addition to stability and an ability to kind of know that you're following a rule of law versus what I think of as grifter capitalism, all of that leads to, like, you know, the reason why I and others like me support Vice President Harris for president because I think those are the more fundamental things. Then you know whether or
not a corporate tax rate goes up or down a little. Obviously, those can be important in other other times for business. But that's the reason why I think within the technology industry, I think it's a fairly clear choice.
Read.
We recently had SEC chair Gary Ginster on the program and a part of the conversation for both candidates is continuity at the FTC and the SEC. You've actually spoken publicly, I think about both already, But what is your latest position.
On those two roles.
Lina Kahn and Gary Gensler if Kamala Harris were to continue in the White House due to their impact on the technology industry.
Well, let's see.
So first, since I've spoken, because I get asked a lot about Lena Kahn, I've spoken more about Lena Kahan. You know, one misconception of clear Up is I've never ever talked to Kamala Harris or anyone in the White House about Lena con for this. So this is entirely a press set of stories where I'm asked about my.
Point of view.
And I think she's done a very good job on a number of things, the anti compete stuff that click to cancel and subscriptions, the number of things on M and A speaking as a partner at Greylock and as a Silicon Valley person who invests in companies trying to create the next generation of large tech companies.
Her you know, kind of like waging.
War on M and A is actually, in fact as unhelpful to the tech industry. It actually accomplishes something different than what she thinks she's accomplishing. She thinks she's trying to accomplish the you know, kind of the limitation of the growth of the large tech companies, and actually, in fact she's causing a lack of funding for any of
the companies that might potentially compete with them. And so that's a that's a different thing, and that's the Lena Khan, which I still have the same point of view, and I've asked about it from anyone and from.
An Nextperti's point of view.
I will continue to say that Gary Gensler, I think the question, and I know Gary, I've talked to him from the MIT days, is how do you kind of shift kind of a kind of approach to crypto that's less kind of hit with stick and more of a here's the set of rules that we could set out that would create a beneficial technological investment that helps US position globally, and I think it's been uneven, And so I would hope that you know, Vice President Harris, who
grew up within the California tech community, understands the importance of this kind of rule of law, you know, kind of equal basis innovation economy. She talked about, you know, kind of innovation opportunities. She's the only presidential candidate in US history who's spoken about the importance of founders. And so I hope that she would bring a kind of a more innovation forward point of view here.
And you know, would anticipate that.
An innovation forward perspective.
Is that the key difference that you anticipate if hypothetically we had Harris administration, a difference from the current Biden administration, or where else might she differ?
Well, I think so.
So she has always brought a certain because of you know, talk to her over the years, and this intellectual curiosity to what's going on in the tech industry, how that can help everyday Americans, how that can help the rest of American industry. And so it's kind of like, look, I realize that the tech industry is about innovation and building new things and those building of new things or new products and services. But there are also ways that can help all of America. And those are the questions
that she's asked. Now Biden, who has done a number of great things in his presidency. You know, he's controlled inflation better than you know, post COVID, than any other you know, kind of first world country in doing that, and I.
Think has done a number of very good things.
But he has not been as.
Engaged with the tech industry, whereas I think, you know, Vice President Harrises, including you know, kind of in her very acceptance speech, has been And so I think that that kind of of how do we engage in the conversation and look, for example, what she did in the artificial intelligence you know, regulation and executive order process she ran that first thing she did is she brought the companies into the White House to say, hey, we really need you guys to be going foot forward on safety
and regulation. What kinds of things can you voluntarily commit to? You know, I talked to the folks who were there. She pushed them very hard on map. Then she looked at okay, so this is what they can commit to. Here's what we can put into an executive order law. Here's what we can do to ongoing monitor to what happened and leave room renovation. That's what I expect across her approaching the entire technology industry with AI as the instance of it.
Let's go to the other hypothetical, because she's engaging at the moment with the tech community. But many would say that Trump is very much engaging with technology community with the amount that he's having.
Elon Musk on stage.
Is we see Musk taking a bigger role within a future administration? What does that mean for you and and ultimately for the relationship that Silicon Valley has with el On the Musk.
Well, I think it depends on what the Trump administration, what Elon does. I think you know, the the Trump you know, Trump and Trump presidency won. You know, his his early presidency has shown a certain amount of grifter capitalism. It's like trying to penalize his opponents using the instruments
of state. You know, obviously, you know, we saw that happen with Amazon, which probably is you know, no inside knowledge that probably correlated with Bezos's you know, forbidding the Washington Post from issuing a support statement and so It's kind of like the if you're going to be individual company retaliatory, It's part of what might underlie a terrorist is I can choose like who I'm going out favors to that does not create a good stable environment for
investing in, you know, kind of like you know, how do you invest in an overall industry and ecosystem. And so then the question, you know, would come down with Elon. Obviously, Elon's businesses have great ties to government. I mean, the whole space business is deeply tied to regulation and kind of government contracts. UH Automobiles is also tied to a bunch of regulatory frameworks.
Obviously, you know what's going on with you know.
Kind of media and information has ties there too, And I think unfortunately X dot Com is the primary supporter of conspiracy theories and you know other kinds of things, which is a serious problem.
All of that, the question.
Is is, all right, well, does it continue to be.
Grifter capitalism which is calling out to specific companies, or is it rule of law?
I read on X and conspiracy theories. Bloomberg did a deep report, a data based piece of investigative journalism on that recently, and in that segment on the show, which you can find on YouTube. We gave X's point of view, which is that they disagree with that. And if you allow me to, I've invited Elon Musk onto this program many times, and you are here and he's not. Something's
different in this election. You're a well known person in the world of technology, but there are others on both sides who are speaking out, in my experience, more prominently than previously. Have there been any negative consequences of that. For example, if you are a bench capitalist or a CEO that publicly speaking about your political orientation and your support of a candidate has resulted in a loss of opportunity in deals or whatever it may be.
Well, I've seen and you know, I think, you know, this is something that's this fraught. You know, I don't think it's just you know, retaliation in business circumstances from folks who are supporting Trump, like I saw, you know, kind of you know, when vcs were speaking out, some LPs were very supportive of Trump, not at gray Lock in this, but in other firms kind of uh, you know,
withdrew their support from the venture firms. I've seen other kinds of things where you know, people you know kind of uh, you know, kind of business relationships of soured because of it, you know, which I think is very unfortunate. I mean, I actually think the part of what we should aspire to as Americans and as business people is to is to kind of say, hey, look, what we should do is say what's the thing that we do
to make American business and American industry better? And you know, like I've I've I've heard of Republican senators trash talking me internationally where you know, you think they'd be supportive of American business people. So I think that there is I think there are consequences of it, which you know, I think is unfortunate. But I think it's more important to be, you know, kind of patriotic about what is good for America, American industry, and American society even when.
You have this fear.
Let's talking about the souring of certain relationships. The first one that comes to my mind is the souring of the relationship of who was a co founder of open ai, Elon Musk and now open ai more.
Explicitly in its new form.
Have you spoken to Sam Altman about and indeed open ai about the worries of Elon Musk, who seems to have a dislike for the business, if he took a more prominent role within the administration, what would it look like for AI more broadly to have Elon Musk in a position of power.
Well, one of the things that I would worry about if Elon took a more prominent role is that he would view that the only real success for you know, the AI.
Industry is if he is doing it.
I mean, this is part of the question around the fact that he's kind of doing these baseless lawsuits against open AI that are you know, kind of like, well, I gave money philanthropically and I should kind of cut of what then turns into commercial, which is by the way, illegal, right, and so you know, so that kind of of of of issue might then rear its head in this kind of tradition of you know, kind of Trump's grifter or capitalism.
I would hope that actually, in fact, if if Elon were to accept a role, that he would go, look, what I care about is all of them, you know, the tech sector of American industry, not just my own efforts.
And I think we'd have to see what would play out.
Then the latest on the listigation between the two I believe is also the eighth when open AI accused Elon Musk of harassment in that legal fight, and again we've covered it on this program Read and we'll go back to it. Is AI and regulation of AI being discussed enough in this election by either candidate.
Well, I'm not sure that it's the most central thing for kind of the general American society at the moment. Look, I think the how we get the benefits of AI for American industry, American society, American consumers, I think is
really important. And one of the things about regulation is it tends to slow down innovation, it tends to delay and I think our tools for getting a medical assistant on every smartphone, a tutor on every smartphone for every American and maybe even more globally, I think those are the important things to be trying to get to. And that's less of a discussion about, you know, AI in the election, but more kind of a like we should be building towards the future.
Read. Ifdent former President Trump were to get a second term in office, how are you preparing for that and how do you approach it?
Were that to be the A case.
Well, if that's the case, then I would hope for the folks who who have argued to me that, you know, you shouldn't actually in fact take President Trump's words seriously. That the fact that he is declaring a you know, like a tariff war where you can do individual kind of grifter capitalism, but that's actually not what.
He's going to do.
That he's going to try to be more business forward, more technology forward, and you should not be paying attention to what his words are. I would hope that they would be they would be correct if it ends up being what I fear, which is actually in fact a you know, kind of an individual kind of uh, you know, like sweating various businesses for his own kind of political favor. I think that will affect American industry in a way
that will affect American prosperity. And so I think you have to you have to you build in more resilience to chaos an uncertainty, and that's what you would do. I'm obviously very hopeful that Vice President Harris will win the election, and so therefore haven't done enormous contingency planning yet.
We want to thank you so much for your perspective today as you do. Indeed back Vice Paradison and Harris for the administration is the future, Gray Lot partner Reid Hoffman, we appreciate it, ed Okay.
Today's Big Take focuses on how Amazon is working to make its Alexa devices a force in artificial intelligence. CEO Andy jasse is eager to take on chat GPT with the voice assistant that Amazon's claims is in one quarter of US households, but technical challenges are slowing the company down. Bloomberg's Austin carr Co wrote the Big Take, we are an Alexa household that I'm using Chat GPT four oh, voice inputs, so much more meta AI through the ray
banned glasses. It's an incredible dissection of the struggle Amazon is having bringing Alexa into that field.
Yeah, it's pretty wild.
I mean just think it's been already almost two years since chat GPT launched. Meanwhile, Microsoft, Google, even Apple have rolled out a lot of AI tools and we haven't really seen anything from Amazon despite them having more than a decade lead in the chat bond space. You know, they're in five hundred million some households with their devices, but they've been struggling to move that old Alexa brain to sort of a new LLM large language model approach.
And they've been dealing internally, based on the sources we're talking to, with tons of hallucinations, with struggles with basic tax The old Alexa used to be good at, like turning on and off lights. And it's been really fascinating to watch this company that is, you know, famous for data infrastructure for cloud computing with AWS and with Alexa A really fall behind in this AI war, and there's a lot of questions among the sources we talked to over whether or not they'll be able to catch up.
What's so great about the way you write is you make it interesting and personal. We all know Andy Jesse, of course, the leader of Amazon, is a big sports fan, and you talk about how he keeps plodding the Alexa with sports questions, and it just hallucinates in that effect, particularly about up to the moment results. What therefore are we seeing in terms of further investment, What are we seeing in terms of eventual rollout.
It's TVD at this point, but our sources are indicating that it's actually been repeatedly pushed back. There was an early target in twenty twenty early twenty twenty four. Then it was moved back month by month, most recently in October they were hoping to launch it. They scrap that event and they've replaced it with a smaller Kindle rollout. So sourts are telling us this could actually be their target. Deadline is being kicked back into twenty twenty five, which
really puts them behind the ball. But again, it's all these technical challenges they're facing. It's not a matter of necessarily buoucracy or some lack of overall goal. They're really marghaling at troops toward this, and they're really running into challenges with again making sure sort of an LLLM can do basic tasks like you know, all the tasks that you asked it to do around your home. Lms are
actually not particularly good at that. And with the hallucinations with all these devices and homes of families, kids, you don't want it spewing off sort of information that's provocative or the list that can be a really reputational cause a lot of reputational damage for Amazon and the Alexa brand.
There's this great academic debate we could have, but we don't have time about the best hardware form factor to use AI models in the voice system form. The other bit of news is there is a timeline delay into twenty twenty five. Just tell us what you understand. The team is working to Amazon to get this into the real world.
So the big challenge right now is merging that old brand with the new brain. There's a lot of argument about whether they should just scrap the old Amazon approach and move to the sort of an LLM model that chat, GPT and meta or using. But they're trying to do this hybrid approach and that takes a lot of custom code to make sure you know, when I ask it to do a request it can deliver that it knows my permissions, it knows that I have access to this
light bulb or this kitchen time or this microwave. And that's the irony is that all the stuff that Amazon Alexa is actually re good at are very simple tasks, and that's what lms are not particularly adept at.
Bloomberg's Austin Carr, it's a great read. Thank you for bringing it to us. Meanwhile, that does it for this edition of Bloomberg Technology and Ed. We've got earnings like Amazon after the Bell. But an important conversation coming up tomorrow.
Yeah, today the Democratic perspective. Tomorrow the Republican vivet Ramaswami, a surrogate or backer or booster for Trump, will be on the program to give his take on the technology discussion to be had for either candidate. But you should recap on the podcast. It was a pack show. It was crazy. You know where to find it. Cara and the team in New York. Everyone here in SF. Wow, this was a great Bloomberg technology