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Live from New York. This is Bloomberg Technology.
Let us get straight to the breaking geopolitical news and its market impact. Now, the US has indications that Iran is preparing to imminently launch a ballistic missile attack against Israel. So all according to a senior White House official, markets while seeking out safety, We're down on the S and P five hundred more than a percentage point. It was a swift move from the headline, but notably, this is only the biggest sell of since September sixth, not even
a month. Nazak one hundred has similar moves to the downside. We're seeing money move into oil up three and a half percent, worries about the supply side there and a tenure yield that crashes down some six basis points. This, of course as we see a search for safety, but we want to bring you the context. Bloomberg's Kaylee lines on the Latest News, we are very pleased to have
you in New York. We understand that the US is actively supporting preparations to defend Israel against the possible attack.
Yeah, that's right, Caroline, and I would remind everyone that the US already has had to act in tandem with Israel and other allies, including the UK and Jordan about six months ago when Iran launched hundreds of missiles and drones at Israel and an attack back in April. Largely those were intercepted as it was telegraphed beforehand that they were coming. Now, the US intelligence does suggest that iron may be preparing to do something similar as it retaliates
against Israel. This is retaliation that we have been expecting for about two months now since Israel took out although it did not claim credit for it, Hamas's political leader in Tehran over the summer. Uran has yet to hit back over that, and there is potentially more for them to retaliate against now after Israel just in the last week was able to kill the leader of Hamasna san has Hassan Asrala of course in Lebanon, and has just in the last twenty four hours launched a ground incursion
into Lebanon and what they're calling targeted operations. But that is the kind of behavior that the US and others have been warning could be seen as escalatory as everyone is trying to fend off a wider regional war in the Middle East, but still Israel is moving into Lebanon
as we speak. And Hesbela, of course, one of the most powerful, if not the most powerful, Iranian proxy, has been seriously weakened by Israeli activity over the last several weeks, not just with the killing of Nostralla, but also of a number of senior commanders, the explosions of pagers and walkie talkies in recent weeks that has limited their ability to communicate, and the weekend Hesbola could be seen potentially as a week in Iran and Iran wanting to show
could be wanting to show here a force of strength in the region, even if it does have the potential to draw others more directly into this conflict, including the United States, which is yesterday said they're sending thousands of more troops and assets into the region.
You give us a context of the US response, Kanie. All of this comes after, of course, what Iran did in April. This isn't the first time that we've seen them respond but at that time it almost felt as though it wasn't as aggressive as it could have been. What are you getting in terms of signals now, yeah.
Caroline, that's absolutely right.
It was explained to me back in April that Iran sent its slowest drones first. Essentially they were trying to signal that this attack was coming, and of course that enabled the attack to largely be intercepted. It resulted in very little damage to Israeli infrastructure. Only one person was ultimately killed, So that was escalation that actually was more de escalatory than it was escalatory. Israel hit back in a relatively my own manner and no tensions were continuing
to climb from there at that point. The question is going to be the size and scope of Iran's response this time around. After that original killing of the Hamas political leader in t I Ran earlier this summer, many Middle East experts I was speaking with were warning that Iran might actually want to land a punch this time in a way that it didn't back in April due to that inn of everything pretty much that they sent over.
So it's going to be a question of how limited in scope Aron chooses to be here as Iran may not have direct incentive to escalate this war further put its own self into this conflict rather than doing the fighting through its proxies as we've been seeing them do since October seventh, which is of course now almost a full year ago, and of course not wanting to draw more direct conflict with the United States either, because when American troops get involved, Caroline, that is where thanks get
a whole lot trickier.
Bloom Meg's Katie lines, thank you so much for being here. Meanwhile, we want to get yet more insight for you now. Bloomg's Dan Williams is on the ground Israel's Northern Command close to.
The Lebanese border.
Now we know that the imminent threat of the attack on Israel follows as Kaylie was pointing out, Israeli forces moving into southern Lebanon in an escalation of their own campaign against Tran backed hezbelah Dan.
What's the latest on the ground?
Has now all the Lady publicly moved round forces on a fairly large scale, while at the same time revealing to the world that since November of last year, it has been conducting dozens of small scale commander operations, but across that very border in order to prepare for what we've seen in the last hours, in order to collect intelligence in order to detect and dismantle Hezbeler position at e the bod use for a crosswater attack by Asbella
resembling the October seventh attack by Hamask on his rol.
From Garsen, Dan Williams on the move for us. Now, we so appreciate your time. Now let's get a market reaction toward is a very people focused story, geopolitical story, and then we will move on to the world of technology. Alga portfolio manager on core Corawford is with us. It's difficult to respond to breaking news on the day. But does any of this vindicate a knee jerk reaction that we see in the markets?
For sure?
I mean, look, anytime there's uncertainty, it's going to hit the market because the ramifications of a war are clearly you know, global, widespread and impactful. You know, besides the fact that it's very sad, and you know, the market reaction is not surprising at all.
Uncle, when you look at what the biggest point drags are on a Nasdaq benchmark, on an S and P benchmark, Unsurprisingly they are big tech, but that's largely because they are the biggest companies out there, rather than they have the most exposure to any geopolitical tensions. But does that warrant a desire to pull back on any over focus on the Magnificent seven for example?
You know, I think it's it's clear as the market has outflows and people try and sell the market that the mag seven are the biggest proportion of the benchmarks and the easiest place to take capital from. So it's not surprising that they're they're underperforming. Does it give us any less conviction in the long term of where these businesses are going? It doesn't, and it doesn't really change that thesis.
Talk to about where these businesses are going. Today, we have Apple on the downside significantly, not just because of the market selling, but because of worries about the sales of its iPhone sixteen. A lot of that predicated on when it will really intertwine AI into that offering. The flip side, Microsoft today is showing off its prowess in the area of consumer AI. What is the thesis for these names and how much we'll actually start all using the artificial intelligence they promise?
Yeah, so you know, one thing I'd like to remind everyone is that AI burst onto the consumer scene only twenty two months ago, and we are expecting the leaps and bounds we expecting revenue, and you know, the ROI inside of twenty two months is probably the fastest expectation baked into any company for any technological revolution. And so you know, where I think they're going is AI will be integrated with everything that we do. And today we think of it as a copilot. I think it's really
a co worker of where we're going to. A personal digital assistant is where the consumer AI will go. And then one has to really ask for a company like Apple, can they actually abstract you away from your phone and abstract you away from the app layer and really significantly change the business model as they go into a more personalized digital assistant type world?
And what is that worth to Apple?
Know?
What is that worth to a consumer?
I would argue that it's significantly more than worrying about a near term product cycle, because you know that software based product cycle is coming.
We have been talking about the AI impact on stocks on revenue for twenty two months, even if the consumer hasn't embraced it.
As much as perhaps the market wants to talk about it.
Where have it we embraced in terms of the stokes that will rally that we haven't really seen outperform yet.
Yeah, I think I think AI is going to go through waves. So initially we've looked at the pigs and shovels, and it has been Nvidia, the semiconductor companies, and even inside the semis.
It hasn't been all semis.
There have been a select few and there's been a big bifurcation. We've seen it in a select number of industrials, those that cater to data center and the changing data center. Then we saw it in in electricity with some of these nuclear nuclear plays and the utilities and then catching on fire.
And so you know, I.
Believe the next phase of this is going to come in the rest of the data center and also those companies that show that by using AI they're in fact improving their operating margins. And that's the next phase. Now I expect that to come and you know, twenty five to twenty six, because still deploying this AI is not necessarily flipping on a switch.
It takes some planning.
AI is of course disrupting many a vertical. We think how it's going to be applied to healthcare, we think of how it's going to be applied to finance. I go back to our top story of the day and geopolitical tensions. How much will it be applied to defense? And is that an area that you've been thinking would be outperforming not only in a gypolitical instance, but also from an AI backing.
Yeah, it absolutely will that the amount of money that will be required to shore up our defenses and that will be spent on defense is going to be significant, and in part because you know, just like the Industrial Revolution and in the late seventeen hundreds kind of change the geopolitical landscape for England at that point in time.
I believe that.
AI is going to change the geopolitical landscape for whichever country is actually wholeheartedly adopted and then also become leaders in it, and that can set the chessboard for the next fifty years.
It's been wonderful to have you in the studio today. We appreciate you going across the whole gamut of breaking news.
Unco Crawford ALGA portfolio Manager.
Now Taiwan closing its two and a half trillion Dollar stock market as super typhoon Krathon approaches the island with strong winds and heavy rain.
Now the market will not conduct.
Securities, currency, or fixed income trading on Wednesday, according to statements from its exchanges. Traders are watching for any possible disruption from the typhoon, which is likely to hit the West coast, home to Taiwan's heavy industry manufacturing, including of course, a plant made a.
Chip making giant TSMC.
Echo Star announced yesterday that it's selling its video distribution business to Direct TV, a merger that the satellite providers have flirted with for almost two decades. We caught up with Ecosta CEO Hamid Akaban.
Here's what you have to say.
The founders was that this business ends up in great hands and continue to develop according to their lifelong working vision to you know, make it, you know, one of the greatest companies that can make and you know, the combination of the two companies now will be that company. The company that you know is unique in his position in the marketplace. So it's bittersuite, you know in a way.
They see it in you know, great hands. They're coming together and being that challenger that Charlie has created over time, but it's also letting it go. It's also very difficult. So the answer is bittersweet, not really obvious.
Satellite TV is ultimately in a state of decline.
Will this be a period of managed to climb for the bigger company.
It's certainly as part of the thesis that you know right now. This is not you know at the time that it used to be ten or fifteen years ago, when the you know, position of these two companies that
are coming together was unique and was very strong. The two companies have lost sixty percent of their subscribers over the past since twenty sixteen, They've lost that everyone has access to broadband today, whether it be terrestrial or through satellite starlink, you know, the direct to a consumer digital providers programmers going around these two companies are ten to
twenty times largely in terms of customer base. So it is time for these companies to come together to increase their sustainability and ability to negotiate better deals that it can pass on to the consumers.
That was Ekosta CEO Hamid Akavan. Now let's continue this PATV measuer. I'm joined by well who Echo Star sold Dish to DirecTV. The CEO now joins us, Bill Morrow. Bill, welcome to the show. And I ask you this now strategy going forward, the combined nineteen million subscribers you now have or do you offer them?
Is it managed to climb?
Well?
Thanks Caroline, And actually we're going to offer them something that the new kind of competition cannot.
You think about the volume of.
Directed consumer subscription type services. These are the Netflix, Amazon, Primes, HBO Maxes that are out there. They have a very narrow scope of the content that they offer, the way in which they can only navigate through their platforms. Consumers are left with having to pick and choose multiple subscription services and manage this on their own. They're having the difficulty to navigate across these different platforms. With a new company with DirecTV and Dish, will do is number one.
It will actually bundle all of those different services together. We'll still have a form of linear or time of day type programming, but we're going to let the consumer pick and choose two or three or four if that's what they want. Of these other directed consumer programs. We'll wrap a user interface around that. We'll make navigation easy,
We'll make search and recommendation easy. But equally as important to Caroline is that the combined entity with just under twenty million subscribers will give us them very neat influence on the industry to work with the programmers, to say, the days of the past.
If two hundred and fifty channels are gone.
Consumers don't want to pay for content that they are never going to watch, and the programmers are still kind of tied to those old carriage agreements. This influence is going to change that it is in the interest of the consumers. We think it's in the industry, the programmers in the long run, and of course to our company as well.
Bill.
I can see how you offer from a price perspective, and I can also see how ultimately this is about slimming down costs.
But what about growth.
Do you think you will ever increase that number subscribed or is it about just serving the ones you have?
Well, well, Caroline, we've really studied the market and what are the pain points of the current environment that consumers feel and again having to manage multiple subscriptions, not knowing where your content is. Even the biggest search engines that can't keep up when you're looking for a particular season or episode of your favorite.
Series, or a movie that you want to watch.
We know that the consumers need more than what's available today. By combining these two companies having the influence to be able to change those carriage agreements, we're going to give them thinner, linear bundles of genres that they can pick.
We'll let them add in and.
Insert in the s FOD or those directed consumer Netflix or Amazon Primetype services and again with a very different kind of experience that will allow us to get back into a growth situation. Now we need the two companies to come together because we are falling fast. You've heard this from a number of different industry experts. So this buys us some time, gives us the influence to shape the industry. That's all about the consumer, and it's going to give something to them that they haven't had.
But do we need more streaming?
I know that you're thinking about DirecTV stream and Dish TV, and ultimately it sounds that we're going back to the past by rebundling the things we've already snipped in terms of the cord.
Number of it is that bundle pass is not going to service going into the future and That's why we believe with a new kind of carriage agreement, it's going to allow you, the rest of the consumers, the rest of your viewers, to pick and choose the genres of their choice and not pay for all the rest of it. So it's not as big of a bundle as what we've seen in the past, and that's what we've been advocating.
That was the deal that we struck with Disney. We fought so hard for to be able to get let the consumers pick what they want to watch and not force them to pay for stuff that they'll never tune into. And that is our future.
You have other stakeholders, largely private equity now when it comes to TPG, but also the creditors, and a lot of this is based upon whether or not the bondholders of Dish in particular sign up to this. Do you think that will go through? How painful is it to take those sorts of haircuts.
Well, we think the current bondholders of the DBS business under Echo Star with Dish are going to have a better deal by converting and exchanging into the debt that we're offering. We think it'll be better leverage ratios than they see today, there's better confidence in terms of this business model about looking forward into the future without the risk that they might perceive today with that DBS business.
We also have advocated and explained that while our initial leverage ratio will be in the two and a half times, that still is better than any other PayTV provider that is out in the marketplace today, and within a twelve to twenty four month window, we're going to be very focused on bringing that leverage ratio down to below two.
So that's the reason that we believe they're interested.
In making this exchange, lowering that debt, making sure that this M and A deal can happen, and then we of course proceed to the FCC and the DOJ for the needed regulatory approvals.
We'd like to keep in touch as you go through those approvals. DirecTV CEO Bill Morrow. We really appreciate your time. Now, let's get back to the markets, which are under a significant pressure from geopolitical news today. Of course, through off by one point three percent on the SMPO four hundred. It's a large move, but actually the largest since September
the sixth. We have seen this element of volatility prior to this and a's that one hundred off by more than two percent though, so big tech feeling the most pain. Money moves into Brent crude. Money moves into the haven. That is the US tenure will keep you up to speed with the moves between Iran and Israel.
This is BlueBag technology.
Quick struck check on soft banks ADRs because those equity like instruments that are trading here in the United States off by eight tenths of a percent, but it had been rising and in fact they closed more than three percent higher in Japan trading after the Information reported that the firm's Vision Fund plans to invest five hundred million dollars in open Ai, citing a source.
This is, of course, as open ai is kicking off its developers day to day. Bomberg's Rachel Metz is busy. Tell us a little bit more about the investment round.
Where we stand in terms of the six and a half billion dollar raise.
Yeah, so it is our understanding that that should be closing soon. I mean typically it takes some time for these rounds to close. I would expect her to close, yeah, and the probably, I don't know, soon in the next few days, perhaps.
Okay, Keen I what's happening in the private markets. In public they go to their developers today. It will be live streamed. What are we going to expect coming for developers from open Ai?
So this is going to be a really different kind of developer day than what they held last year. Last year was the first one, so it was a big splashy day, cool snacks and like stickers, you know, cool stuff like that, and it was in San Francisco. At this point, they actually have a lot of developers. They have three million developers around the world, and they decided to turn this into three events, and sadly for people
like us, it is closed to the media. But they're going to have an event in San Francisco's to day, and then they're going to have another one in London and other one in Singapore. Since we have so many developers around the world, they said they want to focus on meeting in smaller groups with these people and also just communicating with them and tailoring some of their API type stuff to them.
Very briefly, what is the most exciting area developers have been leaning into.
With open Aire.
The company actually at this point has a really wide range of software available to developers. So it's a little bit hard to say what specifically they may want to use. I mean, the company has things for content moderation, and it has in the past had things that like it offers, you know, all kinds of chat chat related things. So it really just kind of depends like what you're building, if you want it for you inside of your company,
if you want to build it for consumers. So there's there's a lot of options there.
Rachel Metz quite excited to see what you bring us a bit later. We appreciate the time. Meanwhile, some breaking news this coming from Samsung going to cut thousands of jobs as part of a worldwide layoff. Once again, Samsung, of course the juggernaut when it comes to chip making, when it comes to hardware within phones, currently of course, televisions, you name it, electronics giant currently saying that it will be cutting thousands of jobs as part of worldwide layoffs.
We'll bring you more context.
This is Bloomberg Technology. Welcome back to Bloomberg Technology. I'm Caroline Hyde in New York. We get back to these markets because we have the breaking geopolitical news that the US has indications that Iran is preparing to imminently launch a ballistic missile attack against Israel. This so all according to a senior White House official. We see the move and flight to safety, as we like to call it, a three year yield current tenure yield currently at three
spots seventy two. We're down some six basist points SBO five hundred, off five percent points similar moves.
With then astat one hundred.
So equities under pressure, particularly big tech as they are the biggest points movers. They are the largest market capitalizations. Brent crude up more than four percent. Let's weave into some of the technology names we need to keep an eye on.
Round Glastelica is with us for more and more. Broadly, this is a key risk aversion trade today.
Yes, absolutely, we are seeing pretty broad based weakness across equities, but certainly tech, especially since this is a group that has done pretty well this year. It seems like they are taking some of the initial profit taking here. Some of the bigger moves companies like Apple, Nvidia, chip makers. Broadly, all of these are stocks that have been taking a bit of a drop today on the geopolitical risk and the kind of increased uncertainty surrounding path.
There are individual names that we want to call out because well, there's the Moon music and then there's the micro news with Apple falling for example.
Significantly.
This on the back of once again anxieties around the iPhone sixteen sales. Who's been coming back on that particular name where we're worried about in the supply chain as well.
Yeah, there's been a lot of concern about app or there's a lot of focus on the upcoming iPhone, which is the one that's going to have AI features. They're getting some early reads on demand as you're looking at pre orders and lead times and things like that. And today we had Barclays come out and kind of, you know, it was the latest firm to kind of say, maybe demand here isn't that strong as people were kind of
hoping or expecting. There was a lot of optimism built around the idea that the AI iPhone was going to lead to this big upgrade supercycle. People still kind of expect a pretty strong growth out of the AI iPhone over the longer term, but maybe this is going to be more of a twenty twenty five story than the
twenty twenty four story. City also came out today. They're lowering their iPhone unit forecast for this year, but raising them for next year, kind of saying, once the AI features are available, then we might see you know, more
people looking to upgrade them. But for the moment, you know, given how much Apple has been up since April, it seems like this is a name that people are you know, taking some profits in, especially when you have this sort of additional question mark both a geopolit but also the iPhone pre order.
Sales ron pushing us forward when we see these sorts of snap moves. Apple is an ongoing narrative, but more broadly in the market today, do you expect people hate to use the ton of phrase but by the deck.
That's a great question. And you know, one thing I've heard is that people kind of look at big tech as a more defensive place in the markets. Not a traditional defensive sector, but given strong cash flows, pretty durable earnings growth, pretty good revenue growth, pretty positive demand tail winds, especially when you consider you know, interests in AI and so forth. If people happen always looking to big tech as a area to go into in periods of heightened uncertainty,
they have some save harbor sort of characteristics. Although there are some concerns about valuations given how much they moved up this year. Would not surprise me if you did see people, you know, looking around saying there's a lot of uncertainty right now. Tech looks like a place of relative certainty, and they're willing to pay up for that.
We see the S and P five hundred just bouncing off its lows round Lostelca.
Thank you. Now, let's bringin blue mugs.
Mike Shephard, Now on the latest news when we are understanding the US, Mike is actively supporting preparations to defend Israel against any possible attack from Iran.
Can you bring us the latest in Washington.
Yes, Carolina, It's all happening very fast here today. We saw mid this morning a warning from the White House that Iran was making preparations to retaliate against Israel with a ballistic missile attack that could be imminent. Now, in a way, this is reminiscent of the kind of warning that we saw in twenty twenty two in February, when the US was warning that Russia was preparing to invade Ukraine.
So the US is sharing some of the intelligence and some of the information that it is seeing out there in the world, and that typically in the past has kept secret, that it's kept under under wraps for the sake of sharing with governments, but it is trying to show that Tehran, we are watching your next move and we are also making preparations to defend Israel, which is one of the closest US allies in the Mideast.
The key to de escalate, not see an escalation, but that feeling likely right now.
Well. The US has been calling for de escalation and trying to push Israel and Hamas, another Iran backed terrorist group, and Hezbollah as well to try to meet to de escalate to defuse this latest round of violence. But it has been moving very quickly in neither side. Neither Israel nor the Iran back groups are showing any sign of being willing to go to the table to try to talk this out. And in fact, overnight we saw Israel moving forces into southern Lebanon, ground troops into southern Lebanon
to conduct what it called limited ground operations. So we may be in here for a bit and US is concerned Israel maybe overreaching.
Mike, we are the Blueback Technology show, and often we associate Israel with its technology. How are we seeing that industry affected? Is it far too soon to be talking about that in this current instance.
Well, it's a great question, Caroline, because we see the economic impact of conflict in the war in Ukraine. We've seen the economic fallout from that, and there is economic fallout here. It's early to tell whether businesses are really thinking about whether Israel is a good place to be. But for the tech sector, Israel is a significant player. The Israeli Innovation Authority says that it accounts for as
much as twenty percent of the nation's economy. Israel has a reputation for being an incubator of startups, especially in the cybersecurity and fintech areas. So we'll want to see how they assess what happens next with Iran over the next few days and weeks and months, to see whether stability has an impact on their operations in bags.
Mike Shephard, we thank you, and let's keep talking about other economic news here in the United States. The fallout from dock workers walking out of every major port on the US East and Gulf coasts for.
The first time in nearly fifty years.
It's affecting thirty six ports which have the combined capacity to handle as much as half of all US trade volumes. No Meg, Danny Burger joins US now from New Jersey, and the latest is a pushback against automation and a desire for higher wages here, Danny, that's.
Right, Caroline.
At the moment what we know of what's being offered, the two sides are starting to move. They are starting to come closer together, so talks are ongoing.
Still they have not met in the middle. So the details of which, yes, you said, wages. The most recent.
Wage offer from the employers of the dock workers, that is the us MX United States Marine Association, late last night they said that they were offering a fifty percent wage increase. Reports suggest that the dock workers themselves are now looking for a sixty one and a half percent wage increase. That's coming down from seventy seven. So they are inching closer. But Caroline, you are so right. One
of the last sticking points is still automation. In their update last night, when they offered that fifty percent wage increase, the employer said that they would keep the current language in the contract about automation. Now, the current contract basically prevents them from expanding any automation. There's a question as to whether that's going to be enough for the dock workers.
Part of the disagreement started this past summer when it seems like a port in Alabama was indeed starting to use more automation, and the dock worker said, hey, that's violating our contract. We don't want more automation for fear that it's going to lose their job. So, yes, Caroline, they're starting to inch closer together when it comes to the pay number. But is that current language about automation.
And not That is still a question.
And to that point, we sold these issues, these disputes on the West Coast. We've seen them in all the industries, whether it comes to a pushback against AI in Hollywood. How ultimately do we see the contracts change? Do we see an ability to stop technology moving forward?
The employers of these dock workers would argue, no, Caroline, that it's inevitable. In fact, most docs use this automated technology. You could argue that the East Coast is behind in this regard. You have both Asia and the main ports in Amsterdam. They use the automated technology. Now a lot of the employers would point to the fact that they still have dock workers there. They're just simply doing different jobs. Instead of loading and offloading cargo, they are just working
in an office remotely. But again the dock workers might argue, Caroline, that's all well and good, but you need guarantees. You need to make sure that people aren't losing their job and that upskilling is taking place, that there are proper measures put in place that the folks who are currently working can adapt to this new reality. By the way, there are studies that show maybe even automation doesn't necessarily
speed things up. It's not a clear cut thing. So at the moment, they still seem to be at loggerheads and you know, it's technology. It marches forward. It might be a hard tied to put back out to shore.
Annie Berger, we appreciate you. Thank you.
Coming up, Microsoft is out with new features to its Copilot AI assistant, or on that next, this is blue Meg Technology.
Microsoft.
It's adding voice and vision features to its consumer focused AI assistant.
This in a bit to really.
Demonstrate a payoff from a pretty huge investment in artificial intelligence.
Bluebagstina bas joins us.
Some more and Diana you've seen it, you've written about it.
What most excites you about the updates?
So look, the things that we're seeing there are most new really in the form of an update to the Copilot consumer app, which is going to start rolling out today for there's an iOS.
Version, there's an Android version.
They're also starting to chry out on WhatsApp, which is new for them, and one of the more interesting things that they're adding our vision features that attempt to have the AI know what you're looking at when you're looking at a web page and then suggests other things you might want to do next steps, answer questions, things like that.
It's an interesting concept, but also a tricky one because you have to figure out how to do that while maintaining privacy, while maintaining safety, and so what they're doing in the original the preview version they're putting out today is a bit limited. It's only for certain websites, it's not going to save your data once you shut down
the app, things like that. But in this feature and in general, what they're going to have to balance is AI that attracts consumer interests by being more personal, by being more what a user wants, while at the same time not creeping people out, not violating their privacy. I talked a little bit to Microsoft's consumer AI chief, moustaf A famili amount about this, and you know what he really wants in order to attract consumers is kind of more emotional, you know, more of an emotional connection.
But again, that's a balance.
Dana Bass sets us up perfectly, and we thank you because we can talk about this a little bit more with Usef Mehdi, his executive vice president and consumer chief Marketing officer at Microsoft. That balance is hard. How do you not freak people out with how good it is?
Yeah?
Absolutely. I think that's one of the interesting things about technology now is how we shape it. It's changing quite a bit from something that was just sort of ones and zeros and answers to now an ongoing conversation with copal, your AI companion, where it can help you and support you throughout your entire day, across almost anything that you're working on.
Okay, So the enhancements from a vision from a voice perspective, Am I going to feel like I'm talking to an agent? Am I going to be able to outsource my day?
Yeah?
I think we're really moving from what I think of as an AI tool to an AI companion, and a companion in the sense that you trust it, you feel it's more personal. And when you speak to it with the new corporal a voice that we're announcing today, it's it's so fast, it's very fluent. You can interrupt it. This is not like the old Hey Alexa, Hey Siri, and you have to wait. This is literally you talk to it and it will have a sense of warmth and a sense of your energy and personality, so it'll
match that to you. So if you're nervous about a big trip or about a presentation, it'll coach you through. If you're excited about, you know, a kid's birthday party, but you.
Need some ideas, it'll help you.
So that kind of voice and that fluency will really change how you use AI.
Are more people actually using the tools you're building them?
Yeah, we've seen a lot. So we've seen, you know, millions and millions of people now every day slowly using it for more examples, for more questions, And that's in fact what goes into how we build a product. But I think this what we're announcing today with Voice and Vision is going to be that unlock that's going to make it a novelty to something that's mainstream that we use every day.
And I'm kind of being promised to an unlock everywhere. Whether I'm going to just easily integrate it into my Apple iPhone, whether I can just go to WhatsApp and easily use METROI, whether I'm looking at a whole new app and having to download Chatching BT and use it.
Why use your verse? What is it like in terms of competing for consumer time?
Yeah, no, it's a great point, and our time is so busy. I think the difference will be And what's going to announce today is, first off, you have an AI model that's so much faster, and it really, as I said, it understands you and it connects with you in a more human way. The second thing the voice, the convenience of it. It's one thing it's say, hey, we all learned Spanish in high school. We're kind of proficient,
but we're not fluent. This is fluent where you can think and it can act for you if you let it give you give it some points and tips, and that will really change I think the use case for it.
But why your version rather than open AI which is sort of the underpinning of the technological advancements you're making.
Yeah, and then there are many great offerings out there. What makes ours unique as we tune it a little bit so that, as I said, it's going to be much more personal, much more convenient. We also weave it into all the software you use, so whether it's Outlook, and in particular on Windows, we announce a new class of PCs we call Copilot plus PCs where it's the most advanced AI on it, so you can do things like now search your PC with Common Language, which seems like you would assault.
The people are buying those PCs because of the AI compact they are.
They're buying them because they're the fastest PCs out there. Now we took the high ground back from a MacBook and because of the most advanced AI, and what can you do with that AI? Your photos can now go to high res. You can search for anything on your device. You can recall anything you've ever seen on the device, which is a tough thing and a new feature day we call click to do. If you see something like even on a YouTube video, you can click and say,
tell me more about that. Maybe I want to buy that these are really powerful features.
Sina just mentioned it.
She spoke to my staffas Silliman, relatively new at your organization, AI CEO. How is that changing the way in which Microsoft presents to the consumer.
Yeah.
One of the great things about Mustafa is he really has this sort of deep history obviously with incredible expertise, but also the consumer ethos, and so he's helping, you know, change the company in terms of how we shape how we build products even so that you really it's kind of an interactive way that you products. They're not like products we used to build in the past that were
like ones in zero's calculate this number. It's really how do you know, engage with a consumer with an AI where you can bring them out, you can prompt with questions, you can guide, and we have to learn on that. He's bringing that great expertise to.
The company and you've got to go and market it. Thank you, Thank you.
Hetti, Executive vice president and Consumer Chief Marketing Officer at Microsoft.
Cerebras.
It's an AI startup taking on in video and as file for an IPO an evaluations as high as eight billion dollars, according to Bloomberg Estimates, we want to discuss it all the Bloomberg's amy or what's interesting is the financials they've disclosed. It's how dependent they are on one particular customer.
Yeah, definitely.
So G forty two is an Arberdiveei company that owns that has accounted for eighty seven percent, which is actually four percentage points higher than last year. And it's interesting to understand that G two is a company that is closely watched by the Department of Security. So it's interesting that it's not only about the company's the sales revenue, but also it is also an investor in the company.
That that's why it's very watched. Whether investors will really take that too hard is really to be seen.
Why go public when sales are currently only at one hundred and thirty six million dollars, why not wait?
Be farp even further.
So, aichipmicking is at a very interesting point in time, and it's actually burning a lot of cash, so it needs a lot of money it's to actually put into development at this point, so it's understandabable that it will actually come for cash. Obviously, a lot of tech companies want to actually make some kind of revenue be profitable before coming. But the fact that this company's cerebras is at the competing with a video which has actually had a really great run, and even despite the August fifth
kind of pullback, it's come back up again. So the valuation right now is actually pretty good and also is what everyone.
Is looking for. Amyo, keep a cur sye on that IPA.
Meanwhile, let's check back on those public markets and as that one hundred lower investors seeking out some safe havens right now amid growing geopolitical.
Risks as well. Lee is here with us big tech.
Fools the hardest because they are the most valuable companies out there.
It feels like definitely, And we also have company specific news today from Apple to Nvidia. But S and P five hundred is now done by more than one percent, and that's that almost two percent, And treasuries across the curb fell and tier point investors are flocking to safe haven assets like gold bitcoin. I know this show loves the bitcoin. It's also down and it's back below the
sixty one thousand level. We have gold climbing to twenty six twenty six hundred, and a gage of the US dollar strengthened so a lot of news really to their jest here, and we also have earlier this morning a mixed bag of economic data. We have usism price falling by the most since May twenty twenty three, and that's as US job openings throws in August, So those two are kind of like odds with a lot of data indicating that the demand.
For workers is slowing.
And on top of that, Caroline, we also have DOC workers on strike affecting almost thirty six ports, So there's really been a lot of swift in just one day. Yesterday Monday, the SMP five hundred hit its forty third record, and today you're seeing everything sinking.
So that is the context, right.
Yes, we've got Apple down more than three percent, and there's some micro news around the iPhone sixteen concerns there, but actually we're fooling only the most in September the sixth.
This is a key concern, a.
Potential imminent threat from Iran to Israel. But actually the knee jeg reaction is relatively limited, would you.
Say, exactly, because these companies are so big, but also the rally has been broadening, so they're not so much as macro events anymore. In Video earnings, Apple earnings, or even just corporate news, they're not as big of a deal because the rally is broadening, a lot of these docks are gaining more heft, and geopolitical conflicts and crises are really just really center stage right now more than big text, So for now they're away from the spotlight
and it's other issues now. Unfortunately, or and where people buy defense stocks.
We talk a lot about AI and implications within defense, but that does seem to be an area of equity outperformance.
On the day, and surprisingly defense stocks is outperforming, and also other stocks related to AI, like industrials or energy, so the ailes there is broadening to its other piers. So it's really just not the only game in town. But you're right, we're seeing that rally gains are broadening, and we who knows how to day will end. This is just one tweet that started out and then it's just domino from there in video currenting off.
By three and a half percent.
Of course, with its ultimate Maco capitalization, that is a huge move for the rest of the benchmark.
Bloombergs Isabel Lee.
We really appreciate the market wrap now that does it for this edition of Bloomberg Technology. Do not forget to check out our podcast. You can find it on the terminal as well as online on Apple, Spotify, and iHeart This is bloom Bag Technology