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Ed Ludlow.
Live from New York and San Francisco. This is Bloomberg Technology Coming up.
Google's AI bet is paying.
Off shares surging on the company's cloud growth.
Plus byd beats Tesla on quarterly revenue for the first time in the battle between the two ev giants.
And super Micro, shares plunge after Ey resigns as the auditor to the troubled server maker.
But first, Ed, Yeah, straight to that top story. Super Micro is a server maker. It takes those high performance GPUs from names like n Video and AMD packages them up for data centers. Ey, its auditor, has resigned citing concerns about the company's ethics, its integrity, and specifically management in the audit committee. The stock is down more than thirty percent. That puts it on track for its biggest
drop since October twenty eighteen. This is complex and there is a backstory and a series events that went on with super Micro. Let's bring in bloombergs brody Ford to discuss. Ey told us about this brody in a regulatory filing. First off, what did they say.
Yes, these are some words that you never want to hear from your auditor. Right, we only got a snippet of the resignation Letterer, but effectively, Ey said that they received some information that made them feel that they could not continue with this. And in addition, they felt that
there was information they weren't getting right. So there was something that made them feel that they were not right, and that they said they weren't willing to put their name behind reports that came out from this management committee. Obviously investors have to read a bit of tea leaves here, but they're not exactly mincing words. It doesn't look great for a company that's financials are on pause. We are
waiting to see them. Yeah, and they say that they are not going to restate, but clearly the shares today there's anxiety that they will right.
Berdy to the point of tea leaves. This tea has been being made for a long time.
They've had the Hindenburg research, We've had many people calling out concerns in this way.
Yeah, and I mean even going back to twenty twenty, super Micro paid to settle claims from the SEC about accounting issues, right, and so there has been these kind of murmurs for a little while that super Micro had some accounting issues that were going on. As you said that, there was a large Hindenburg report. About a month later, the company said that, hey, we're going to you know, delay our annual filing, a very rare step of a company of this scale. It's something you do not see
very often. When you do, often there are no issues at the end. Not to say that there are. We're we're still waiting to see you. But yes, this has been kind of bubbling for a while, and this is certainly a moment where the pot seems to be tipping'.
Okay, I just want to do this. It's important for our audience. Super Micro settled in accounting probe in twenty twenty with the SEC. But in April this year, a former employee accused them through litigation of exaggerating or misstating revenue. Then you had the Hindenburg report in August, and then last month the stock sank because of reports that the DOJ's investigating. That's the background, but we care about super Micro because of its role in AI infrastructure. Explain that part, Brady.
Yes, very expert history there. I appreciate you giving that in simple English. But yeah, we care about super Micro because all of a sudden, everybody needs to run these advanced work flows for AI and it requires much more powerful servers. And there's really three companies that are selling these right now. Right it's HPE, Dell and super Micro, and so super Micro this year has seen an incredible
ramp at revenue. There are debates over the margins some of that revenue, because you know, it requires these super expensive chips. But the server makers, which were somewhat of a sleepier segment of the tech industry maybe two years ago, have really come into the center of the zeitgeist, which makes this whole disruption kind of all the more. You know, cinematic.
Cinema is what potentially we'll get on November the fifth, not because it's election day only, but because that is when we will see the earnings being restated. We understood by the company, as you mentioned before, Brody, super Micro does not expect the issues to lead to revisions in previously issued financials.
We want to thank you, Brodie Ford.
Now we've got a lot to digest today Alphabet up five percent. We were higher than this earlier, but we surge on the back of of course AI paying off Alvabit. Look, they might not be buying all their chips from AMD at the moment it would.
Seem, but they are investing.
They're raising their capital expenditure, but it's paying off dividends. People are really buying into the cloud, offering a thirty five percent growth in cloud. Let's just see what the CEO Snapitchi was particularly pleased about in terms of adoption of AI offerings.
Take a listen.
I'm very pleased with our growth. This business is real momentum and the overall opportunity is increasing as customers embrace jen Ai. We generated Q three revenues of eleven point four billion dollars, up thirty five percent over last year, with operating margins of seventeen percent.
Let's get an invest to take now, like im Asinos with our CEO of we family offices AI paying office some not others. Let's just hear about Alphabet's perspective.
I definitely think one of the interesting things is everybody was worried about how much money they were spending on AI, and now they're using AI, and I heard their CFO speak yesterday talking about how they're going to be using AI to actually become more productive and reduce expenses. So I think they're already starting to become more productive using AI.
Itself, using AI managing to build up in terms of the cloud offering.
We're also seeing not.
Much competition eating in to their search offering. Are they going to manage to keep that mote there well?
And I think with the search of offering, and as sun Dar was talking about that yesterday, people are asking customers are asking more questions, They're asking more important questions, more complex questions, and AI is delivering, and so I think the opportunity is tremendous.
Well, final question on Alphabet, but sort of looking ahead as well to Microsoft and later Amazon, the calculus is the same, right, you look at capital expenditures going forward and then decide if it's showing up in revenue growth and bottom line growth in terms of do you see that with Google?
Yes, I do see that with Google, and I see her with the other two as well. I think I think we sort of underestimate just the incredible impact of AI in terms of productivity and efficiency in these companies as well as in revenue.
World, AMD is going to do about twelve billion dollars of data center sales this year. In video is going to do one hundred and ten billion dollars. What do you make of AMD?
I think they've got a catchup extrapolate opportunities there.
Okay, let's talk about the opportunities that are there.
Because is it that the market just wants too much too quickly? From Lisa suit because she has been pointing that twenty twenty five is where they're making inroads. She anticipates that they're making big moves. Analysts call out the Middle East in particular, going well, they talk about Meta being a key well buyer of AMD.
They think at least is that.
Likely to be where they need to make the inroads.
I think how you manage the narrative is very important. And I think that the street tends to get ahead, whether it's about interest, whether it's about interest rates or revenue or whatever. And I think that's a little bit of the story here. She's been signaling what actually has happened, but the market wanted more.
It's a really interesting time to be a technology journalist. And I imagine an investor in the technology sector. I note that Google said the election was a tailwind for their search business and other parts. Try and tie that all together for us. If you're an investor this week looking at the sector, where's your attention focused.
I'm not focused on the election at all. I'm focused on the long term tailwinds for the technology sector and for risk assets in general. All we get is good news. We have sunny skies out there. Look at the GDP report this morning, up two point eight percent. Look at the employment report this morning. Interest rates are going to come down, maybe not as fast as the market wanted, but they're going to come down. The housing market, housing
sales are actually up. Everything that we have in the economy, all the drivers of the economy are pointing green, and so I think it's not about the election. Actually, the only thing that I think can mess up this sunny outlook is mistakes that politicians might make, because when we look at the fundamentals of economic growth, they're all there.
The US economy is in a fantastic space. And from an investor perspective, no matter whether you're going to invest in fixed income, in real estate, in the equity market, it's all green light ahead.
All these valuations within Nvidia trading at forty.
Nine times future earnings.
The right level for these green skies at green the outlook of being a positive one, Well.
It depends how long your timeline is. I mean, if I wouldn't be without Emdia in my portfolio, I wouldn't be without any of these hyperscalers in my portfolio, because that's that's the future, and you buy them and you hold them.
Oh, if we had more time, I would ask you, how on earth you know what's going to happen in the world in twenty twenty seven, twenty twenty eight, But we don't, so we'll save it for next time. Melga Messino, CEO of we Family of this, thank you, Okay. Other earnings that we're watching Reddit in particular, it's fiscal fourth quarter outlook. Yes, that is a stock that's up forty one percent in the session. Yes, it was a stock that post ipo in March was already up one hundred
and forty percent. And basically they're making money in different ways. The ad business is strong, but also there's the data licensing and AI part. It's a pretty astonishing jump and a lot of optimism that Reddit will continue to grow, even though Carro points out something interesting the user base if you compare it to like a snap very small, They're just gould at squeezeing dollars out of them.
I'm with a market cap of now excess a twenty one billion extraordinary.
Ed.
Meanwhile, coming up another earning story BYD it's now beating Tesla on quarterly revenue for the first time. We'll have all the details. As of Blueberg technology, the European Union has imposed those higher tariffs of up to forty five percent on electric vehicles from China, so ratcheting up trade tensions between the world's leading export powers. The regulation was published in the EU's official journal last night, going into force today after months of negotiations.
ED Yeah, let's stick with EV's Chinese clean energy vehicle Giant BYD posted quarterly sales that eclipse Tesla's for the first time, but the race to dominate the EV market is very much still on Blueberg's. Danny Lee is still awake for us in Hong Kong, and I posted on social media about this this metric. Many would point out this is not apples to apples right, because you need to explain to us Danny that within those BYD sales include plug in hybrids and the scales are completely different.
What do we learn in the court just gone.
I mean we learn in the quarter how BID is continue to dominate the China market where it gets most of its sales. But when you look at how BYD and Tesla are both building out the electric vehicles, BID obviously has its hybrids and so it has a greater advantage in particularly at the time when demander is skewed when it comes to electric vehicles and hybrids and the
infrastructure is not necessarily always there around the world. But clearly, when you look at how BID is doing on a per employee basis, Tesla earns six times more per employee. So as much as the figure shows a new landmark for BID, clearly there are still other metrics to show just how efficient Tesla is. And you know, whether you get those who support must those who are big fans of Tesla who point out otherwise, clearly it's still a.
Good run for BYD.
We had that run last year of them eclipsing pure D sales, but this time on revenue.
Talk about that vertical integration though, that we do see with BID in its supply chain, can it ring out more efficiencies, can it start to produce more per capita.
It's already got the efficiencies there, and what it is doing now, particularly where it's nine hundred thousand employees, is scale, scale, and what it's doing is to try and build as many cars as possible, not just in China but now around the world with all the factories it's committed to. So you know, it's got the efficiency there and now it can use it to its advantage. And that is what is scaring the European and US automakers who are
really struggling with the EV transition. But when you look at Tesla and BYD combined the might of them, they can show that profitable path to get into that EV transition, which the others out there, the legs you'll becerus, are struggling, which is why you see Tesla and BODS at one and three. In terms of valuations, it is hard to compare them.
I look at gross margin for example, where like BYD in the Quarrid was near to twenty two percent and Tesla just under twenty percent. But again it's not apples to apples. Many point out well, Tesla's an AI and robotics company and it's investing there. How is BYD different, you know, what are its product lines? Where is it moving toward?
BUID has very much focused itself on the product, the car itself, and so it doesn't necessarily have those wildly big evaluations that Tesla has with that you know, full
self driving that it's been pushing constantly. So BID is starting to think about how it's looking to be more more savvy with its digital skills because on the roads in China it does have this level of automation which could match Tesla frankly, and so with its scale in China, it's all its learnings perhaps that can be extrapolated into something more meaningful in a long run.
More than eight hundred billion dollar valuation for Tesla just over one hundred billion BYD. Dannie Lee stays late for US, We thank you now. Despite more than six years of US tariffs, expert controls, financial sanctions, China is making steady progress in position itself to dominate the industries of the future, like the one we were just discussing.
There's some new research by.
Blue Meg Economics and Blueberg Intelligence diving into thirteen key technologies, and it shows that China achieved a global leadership position in five of them, catching up fast in seven others. We're pleased to welcome to the show that the author of this piece, Jered Dipipio from Bloomberg Economics, who takes part in the report in Gerard, just outline the five where they're dominant and the areas that they're growing.
Right, So we looked with our Bloomberg Intelligence and Economics colleagues at thirteen key technologies that are part of China's Made in China twenty five initiative from about ten years ago. The five areas where China is clearly leading as of this year would be drones, high speed rail evs, as
you were just discussing, solar panels, and graphing. So some advanced materials where there are competitive would be things like semiconductors, AI, machine tools, LERG carriers they have like a big ship target and drugs like pharmaceuticals. Where they're really behind is commercial aircraft, interesting toads.
You just read out the sort of dream smallus board of Bloomberg technology stuff. I think one thing we reflect on in the show is that some of those key areas, right, semiconductors, even drones. In EV it's very policy focused. In other words, the government in China change their minds, but they're often willing to support those industries through finance or policy to make them successful.
Indeed, I mean industrial policy is a big part of it. China's new energy vehicle targets and plans go back to around two thousand and nine, so they predate Man in China twenty five. How they do this it's hard to quantify, but there are a lot of subsidies for buyers for firms. There's state backed credit, state backed investment funds, government procurement, etc. But I think BYD is a good example. So the EV sector clearly benefited from Chinese industrial policy, but the
industrial policy also didn't pick winners, so to speak. BYD was the one that rose to the top, in part because consumers were ultimately the ones sociding. And now it is a globally competitive firm.
Let's just talk about what this means for the US as well, because the US has been trying to prevent great strides in certain areas of technology. AI chips comes first to mind by limiting trade from the US, but also from its allies.
What does this do if China gets there?
Anyway, The US measures I media tariffs are kind of more macro in terms of hitting many things. The expert controls are very much focused on van semic conductors and things related to artificial intelligence. The US concern, as articulated by Jake Sullivan recently, is basically that they're afraid that China having advanced leading these things while having military application,
particularly for things like artificial intelligence. But there's also an economic side, because these are the industries of the future, and from a competitiveness perspective, especially if you think China is benefiting from its own industrial policy. The US thinks, you know, in a sense, it's quote unfair and that they don't want to be left behind.
Job, let's do semiconductors as one final case study, please, partly because it's also been in the news cycle. Right, Yes, US export controls, but China's responded and tried to champion specific names. What did your research find in that space?
So, I mean China's main fab is Smick, right, and Smick is sort of their TSMC equivalent. It receives heavy subsidies. But then there are other firms like Quawei, which is ultimately buying the chips that they're making that are also being state supported. So in general, I think the US export controls have probably done less damage in many in the US government would have hoped two years ago. China is still making strides, but it's also clear that or
at least maybe debatable, how good THEO strides are. And even recently Bloomberg was reporting that maybe Huawei was getting chips from TSMC through a carve out right, So there's still leakage in the export controls and this is something that the Biden administration in its final days is looking to address.
Gerard DiPippo from Bloomberg Economics, just incredible, Thank you so much, really appreciate it.
Time now for talking tech. First up, in Or Musk's startup, Xai, seeking new funding at a roughly forty billion dollar valuation, according to a person familiar with the matter, and the company's valuation was twenty four billion, including the six billion dollar raised during its last funding round back in May. This week, Musk said that his aim was to double Xai's access to compute, of course, the resource that fuels official intelligence, plus open Ai is working with broad content
developing custom AI chip focused on running AI models. After training, the chips will run I software that responds to user requests and is expected to be in some high demand. You are Apple again this hour, veiling an updated MacBook Pro lineup with new M four chips, looking to entice shoppers with Speedia processing and of course AI capabilities. Is part of a flurry of Mac upgrades this week. The company also released Apple Intelligence, it's new AI platform.
Earlier in the week ed what are you watching?
Super Micro the server maker again reminder it's down significantly, biggest drop since twenty eighteen. Ey It's auditor resigned. It's concerned about ethics and integrity of the management team and the audit committee. This is Bloomberg Technology.
Welcome back to Bloomberg Technology. I'm karenine Hyde.
In New York and I'm ed Lovelo in San Francisco. Let's get back to the technology earning story. Social media kind of a focus snaps up the most in six months. User growth looks good. Sales in the cour have gone above expectations, and it's like they've done a lot of work on advertising to make them more relevant. They're getting rewarded for that. Also Reddit biggest jump since IPO day March twenty first, a strong outlook for the holiday quarter again ad business, but of course they had the data
licensing side with AI as well. We're going to talk about that in just a moment. And then Meta up eight ten to one percent. I think this is going to be a megaprint. You know, Meta, the social media company, Meta, the AI company, Meta, the biggest runner of data centers that no one talks about that kind of stuff, Garrett.
Someone talks about all of it.
We're pleased to have flue megazation accounts across a florry of social media moves. Let's just start with snap because they are managing to show that they can still get growth outside of the US. It seems to mainly be and also people subscribing.
Yeah, I mean the snapsom was really interesting. As you mentioned earlier, they tend to have a lot of altility. Sometimes they're not always rewarded for the investments that they're making in their advertising business. But they put a lot of money, spent a lot of money on artificial intelligence and machine learning. So it really is coming to fruition across multiple areas. Better targeting ads, better recommending video content,
and then as you mentioned, subscriptions. Subscription revenue is now about one hundred and twenty three million dollars in the quarter, which is eight to nine percent of the revenue. So they're one of the few social media companies that's really been able to benefit from subscriptions and really turn that into a notable business.
He shoul Let's talk about Reddit, I mean a bit of a surprise in the session of forty percent gain on the stock. You spoke to Steve Hoffman, the CEO. What do we learn about how it's going and what the Reddit platform is doing to be different?
I mean, of course the simple advertising story, right, they've really been able to convince advertisers to actually buy ads. So part of that is expanding Reddit to other languages so they can have more users and more advertisers across the world. Part of it is just investing in artificial intelligence, machine learning, better targeting ads, and then educating the market. Reddit is very different than our social media platforms. You
target based off of topics, not necessarily personal data. A lot of users are anonymous, so they've really had to do a lot of educating the market and that's seen you pay off, and then of course there's the AI story selling their data to AI companies, having partnerships with open ai and Google that's really pushing their revenue over the edge. And then again coming into the holiday, core huge beat on what they're forecasting for the holiday.
So all that is really led to that stock rise.
It's just so interesting though, Like Eda and I were having this back and forth earlier about when you look at the underlying amount of users of both of these platforms. We won't even get into meta quite yet, but Reddit's got what just over ninety seven million users. Snap has way more, and they also have far bigger revenue, I mean four times that of Reddit, yet their market capitalizations are about the same.
At this level, where is.
The market seeing the future potential of Reddit versus Snap?
I think it really comes down to that data licensing business. When I was talking to Steve yesterday, one of the things he mentioned was he said every large language model has used Reddit data to train, and so he's like, that right there, shows you the potential of the value of the data on the site. So I think investors are really seeing that. Some investors are projecting as much as six hundred million dollars a year in data licensee revenue, which is huge, and so I think part of it's that.
And then you know Snap has been public for a lot longer, so the expectations may be a little bit higher. Right of course, Reddit just in March they beat expectations every quarter, and so we'll see if they can continue to do that.
The biggest of them all in the social media context, but a lot more is meta. After the bell today, what's going to happen.
I expect revenue to beat expectations. I mean, they're definitely going to have a higher bar. Their peers, as we just talked about, have done really well. Google also did really well in their earnings, and so I think the
bar is going to be high. But over the past quarters they've achieved double digit revenue growth, oftentimes as much as twenty percent in Quortant, So we'll expect that, and then we'll expect to hear more about the AI story, so whether it's their AI video generator movie Gin that they just announced they have new AI tools for creators,
for advertisers. I mean, they really doubled down on finding ways to put a in front of users and then not even to mention their METAAI assistant, which has five hundred million users that are chatting with AI across Facebook and Instagram. So we'll expect to see that, expect to hear them continue to talk about how they're getting a return on their investments in AI. And as you mentioned,
they have tons of data centers. They spend a lot of money on infrastructure, and so part of the story too will be will they not spook investors with how much they're spending on infrastructure like they did a couple of quarters ago.
Investors for sort of.
Worry about how much money they were spending there. So we'll be looking for all those things.
Stay tuned after the market closed. Blim Baxasia counts on a trio of earnings. Thank you very much. Let's keep talking about technology and means with Jeffrey's analyst Brent Till And you know, I think that if you're trying to find the common denomination to particularly if it's like the Hyperscala's meta, et cetera, for me, it's that the calculus is the same as last quarter, right, capex money going in,
how much money's coming out, particularly in AI. Have you seen some good evidence that that's the case so far.
Well, we're early in the curve, so you know that the revenue is not coming in because remember you know, for Microsoft, we're on a recurring subscription model. So even if they plowed ten dollars into AI today, you're paying a monthly fee.
So no, we haven't.
But I think we're seeing proof that if you had all the hyperscalers at their total bookings relative to their capex and their actual booking numbers accelerated. That's not all AI, but we are seeing that return. We're also seeing in pricing. I mean, Microsoft's double the cost of office. See, if you're paying thirty dollars per se per office, you just double your AI, Like it doesn't cost double that to serve.
They're making a lot of money. Look at last year, amy Hood gave you a hundred basis points of margin improvement in the in the beginning of AI, and this year they're guying to about one hundred basis points aheadwind. But like, this isn't this isn't like they're losing money, right, they made money in your an AI like so Brenda, I mean these are incredible numbers, So like this isn't a wasteland and this is the number one question we're
getting whereas all this capital are going. Well, you can see in the booky number, you can see it in the margins, you can see it now on the incremental revenue, you can see it in the pricing, and then you can start to see it in the in the customer case studies.
Brent, you're excited about Microsoft. I can tell we're all excited. That never makes I mean the thing about Microsoft, they've always been good at selling software that you can otherwise get for free somewhere else. Meta is a different beast, Right, you have this bio meta and in the AI story it's like interesting the business model, Like I've been using the ray Baan metas for about a month now, That's
how I use meta AI. What are you ex expecting in the earnings print and the sort of belief that they can demonstrate this feature business model?
Well, I think again, we're super early across the entire industry when we think about AI in applications, right, we're not early in AI and infrastructure. We see it in all Nvidia, all the numbers, right, you see it. It's going to be a delayed reaction, So I want to be careful like you're not going to solve This isn't going to pop out of pop, pop out of the cake and surprise everyone. Like this is going to be slow, steady, a gradual ramp like we've said, like this is is
going to be game changing. So I'm a believer in meta. I think ultimately, over time we as users will get a better experience because of AI. The advertisers which pay the bill. Again, none of us pay to build. It's a meta, right, it's all out ad driven. If you if you can create an easier ad campaign, uh, and do it quickly and do it more cost efficiently, Like our sizes are going to stampede because all the users are going to stay there and more people are going
to be there because the experience is so good. So again, I think it's a phased approach. I don't think it's going to be overnight success.
But I think what.
Zuck has been doing, Like he's very confident, right, you can see it in his style, his T shirt, his necklace, his hair.
You can just see it.
He's not he's not.
He's got a stylist man, he's got himself a good style.
Stand. We all love to see it. I'm a big approver and appreciate it.
But Brent, what's also interesting is there were some news as to whether or not Meta AI is ultimately trying to build its own search, real time search within its Meta AI offering, becoming less dependent on the likes of being which is Microsoft of Google Search, which of course his alphabets.
How much do you.
Think these frenemies will continue to use each other? Of course, Meta in some ways when it depends on access to compute or just building its ownes and going to Nvidia and the others the ecosystem.
Own searches and no brain I mean, think about it, like if you buy a golf shirt or or you buy something for your house and you want to find something else on the platform, why can't you just go on their platform search for it. It's it's not a good search experience today. It should be a better search experience. So is in an area that they can improve upon.
Does that mean I'm not going to Google Maps because I'm going from San Francisco down to the valued visit a company and I'm going to jump on on their you know there, I'm not going to search there for traffic and all the other things. So but I think the experience is going to get better because it's not great right now, and there's no question all the data that's trapped in that platform. I mean it's really really hard to find something that you've seen and go back
and try to find it. I'm not a the experience is going to get better, but it's not going to box out Google. It's not going to box up Perplexity. It's not going to change. I think the the opportunity for the others, and we saw that at Google's number, right. I meant digit.
About talk to us about how they're managing to finding meet the different but ins the rewards of an AI investment, Well.
I think you go back to it's not all AI driven, which is you get in your car, use ways to get to work. You you effectively looking for a restaurant. What are the hours you don't you don't go to other you don't go to other engines like Perplexity of other places for that information. You may want to say, how do I stop my washer driver from blinking? I'll go to Perplexity and do that on eve go to
Google anymore. But I'm not like, I think the thing is we're having a higher query volume, and then all of us are becoming more comfortable that they're different tools, and so we're just increasing our usage across all these platforms. And so it's like everyone wants to Hey, this vendor is gonna gonna die, and this vendor is gonna win.
Like I think everyone seems to be then in a good spot or winning.
And that is again these bigger platforms, right, AI needs three things capital, users, and data and and when you think about all the big platforms Amazon, Google, Microsoft.
They all have that matter incredible usage.
Obviously to argue is the big keep getting bigger and it's a really boring storyline, Like I wish I had a better storyline, but like I'm sorry, but like they're just going to keep getting bigger and better.
Regulators might have something to say about it, but for you, you've got to buy across the border and all those names. Jeffrey's analyst Brent Thill, we thank you so much for joining us today. Meanwhile, coming up and look at the major impact of the results in the upcoming election could have on technology and innovation.
Linden Melman's joining us.
From bl Government Strategies team.
That's next.
This is a BlueBag technology conspiracy theorists who believe that Donald Trump won the twenty twenty election. I'm making plans online to monitor and film polling places in swing states, a move that some groups argue amounts to voter suppression. Jeff Stone has been reporting on this, joining us now. This is surrounding the messaging app Telegram, in particular, where these conversations and views to meet the happening.
That's right, Caroline. Telegram is an incredibly popular app, certainly globally, and it's gained a lot more attention in the United States over the past couple of years. There's large communities, tens of thousands of people through the country, many of them in swing states Georgia, Wisconsin, who are making plans and trying to coordinate to take efforts to do what would they describe as stopping another stolen election.
So, Jeff, I'm not a Telegram user. It's a cloud based messaging app basically, right. Take that explain literally what people are doing to communicate. But why it's noteworthy, why this is a news item in the context of this election.
This is important because the way that Facebook and formerly Twitter now x have you know, really removed a lot of conspiratorial and false election related to content over the past few years that doesn't exist on Telegram. So Telegram was a Russia founded app. It has nearly a billion users, and people communicate in large communities, so they're a lot like large group chats, almost like WhatsApp. Without that moderation, things can get pretty extreme and pretty radical. Sometimes there's
calls for violence. And really what's happening now is that some of these groups are circulating petitions. They are circulating calls for volunteers, looking for people who are willing to stand outside of ballot boxes in the middle of the night. Again, some places that are pretty key to the election.
And it's worth pointing out that in our reporting, Telegrams press team did not respond to requests for comment Bloomberg's Jeff Stone, that's really important one week out, Thank you so much. Let's stay with the election and the technology industry. Immigration is one of the most hotly contested topics in the upcoming US election, but there's one area of general agreement.
A recent pewpole finds the vast majority of both Harris and Trump voters support allowing high skilled immigrants into the country. For example, doctors engineers, but also computer scientists. Let's discuss this with Linda melmad He's a partner at BAL and oversees the company's government strategies group. This is interesting. It is a policy topic at the heart of the election. But do you have a firm understanding of either candidate's position on this, even if the voting base agrees.
Well, first, thank you for having me on today, and you're correct that the asylum crisis on the border has certainly dominated the conversation. But behind the curtain, there is a lot of commonality across voters of both parties that high skilled immigration is beneficial for the United States. And I think Americans understand immigration better than a lot of
people give them credit for. They see CEOs, foreign born CEOs at companies like Google, Uber Chabani, and they know that they want those individuals investing and creating jobs in
the United States. But this election will be the most consequential election for immigration policy, both in terms of that asylum crisis, but also for high skilled immigration because the candidates will implement very different policies and that will affect how companies hire and attract and build out their talent pipelines.
Okay, So I'm an employer, I want to get access to AI talent, I need to go abroad for it.
What can I anticipate?
How do I need to align my business hiring with either outcome from the election.
Well let's start with that. So you know, if President Trump is elected, we all recall back in twenty sixteen that he put travel bans in place, and we are planning for that eventuality. So if he is elected again, we could see travel bands going to affect as early
as the first week. They won't necessarily target AI specifically, but there could be peripheral damage, so to speak, if they target nationalities China, for example, or just particular visa categories that employ a number of AI professionals in it. So really, as early as the first week, we could see an impact on the ability to bring new AI talent into the United States. But that's only part of
the story. I think approximately two thirds of graduate students in AI fields are foreign born, and what we are expecting is that there will be restrictions on the ability of companies to hire foreign born talent out of US universities. And that's on top of a broken system that already exists today. It's already very difficult to transition someone from a foreign student to work visa, but it could get worse if Trump is elected.
We're just showing this brilliant chart of the top technology companies are the beneficiaries of H one B visas, Amazon the most and Apple the fewest. Based on this data from UCIS, you must know what the company's attitudes are towards this. How active are they in this election cycle in impressing the importance of skilled labor to either candidate in either party.
Well, all the companies have been operating under a dysfunctional immigration system for as long as they've been around, and this isn't the first election that they have to prepare for different scenarios, and even within any particular administration, there's very competing views about how to implement immigration policy. So all of them are preparing for both eventualities and putting really the teams and people in place to be able
to react. One thing to understand is that if President Trump is elected, a lot of those action plans will get started right away. During the lame duck period of time, there might be a small window to try and get some policies done under a Biden administration during those final few weeks that might be beneficial to those companies. But I think it's best to describe their activity going into
this election as preparing for all eventualities. No one, of course, knows for sure how the election is going to play out in a few next week, but the companies are prepared from a workforce perspective. Probably the most difficult challenge for them is the fact that a lot of their foreign workers like to travel holidays like all of us do, and that that could be difficult for them to put in place quickly.
Bender moment, thank you so much uponner at Baal, whoever sees the company's government strategies. More big tech earnings after the bell, Let's get to it with Bloomberg Intelligence senior and mis Manning Singh, who joins us. Now, you're just saying, how the gargantuan beat that you saw out with Alphabet, is that going to be a read across to the metas to the Microsoft's.
I mean, look at industry is doing well, and that's what we saw with Reddit's app and Alphabet all calling that out. I think the magnitude of Google beat, you know that two billion dollar on the top line what's
pretty impressive. You're not going to see that sort of beat from Microsoft or Meta if I had to take a guess, But clearly I think with Alphabet specifically their LLLM integration across their family of apps with two billion plus users is what's driving you know, the positive sentiment today.
Mandie, Really quick, do you see the market share split in cloud changing based on Google's progress?
It could simply because you know, everyone is getting the same allocation of GPUs, So if Google is using more of their TPUs for training, they can have and Vidia GPUs on their cloud that can generate revenue, whereas some of the other cloud providers are using it for their own training. So from that perspective, it'll be interesting to see if Azure prints more than thirty four percent growth tonight, But anything less than that I think will be disappointed.
We have so much still to digest when it comes to these magnificent five for this week that are reporting of course, just in video that we lack now for the next weeks to come. Bloomberg Intelligence senior Alis Man Yep saying love having him. Meanwhile, that does it for an extremely busy addition Bloomberg Technology, it was and.
It's just going to continue. It's amazing there's so much focus on tech all the time. Recap on the podcast, you know where to find it online on those platforms and on the Bloomberg ones as well. Thank you team in New York, thank you team here in San Francisco. Get some rest because there's a lot more to come. This is Bloomberg Technology.