Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hyde in New York and Eva low in sentences go.
This is Bloomberg Tech coming up.
SpaceX acquires wireless spectrum from EchoStar for about seventeen billion dollars. Must starlink with a new director, sell opportunity plus.
We discuss Elomusque's one trillion dollar pay package offer.
But the corporate.
Governance advisor for Tesla's special.
Committee, and we sit down with the CEOs of renowned public and private companies, roadblocks and Cognition late to this hour, Let's get to our top story. So SpaceX acquires spectrum licenses from Echo Star in a seventeen billion dollar deal. It's split between cash and SpaceX stock. There is a lot more to it than that. Let's get out to Washington, DC. Bloom As Kelsey Griffith has the details. Let's just start with the basics of the deal. What is SpaceX offering here and what is SpaceX.
Getting Absolutely so, SpaceX is offering a much needed infusion of cash for EchoStar. It's helping EchoStar beat a regulatory probe that's been hanging over it for months, in which EchoStar could have lost many of its valuable spectrum licenses because the FCC said that it wasn't putting them to use. So this deal allows EchoStar to partner with SpaceX and delivered director device service, and that's a goal that SpaceX
has had for a long time. So both companies are really getting a lot out of this.
Okay, it gets money EchoStar, but it's no longer going to be a viable competitor to T Mobile, to AT and T. Meanwhile, T Mobile perhaps less viable as a long term partner with Starlink.
That's right, there's a lot of moving pieces here, but exactly as you said, this sale does represent the sort of closure of EchoStar being a fourth standalone wireless competitor, as the terms of the Sprint T Mobile deal sort of dictated. So we're seeing them sell off this remaining crown jewel of echostars spectrum portfolio, and instead it's going to be in more of a partnership mode with both T Mobile on the direct to device side and also on the side of AT and T where they're still
offering some mobile services there. So we're also seeing that SpaceX really might become a bit more independent, like you mentioned Caroline in offering these direct to device services on its own terms.
Kelsey, Spectrum refers to this sort of range of invisible radio frequency, and I think that's really important to go back to, like what are we talking about here. When the FCC kind of looked at EchoStar, I think my understanding was they were like, you're not even using the space that you're assigned. So take that and what you just said about starlink and standing on its own two feet. I was part of the T mobile beta when they had that relationship.
How would this be different for SpaceX, So I'm.
Still kind of working through the details on my side as well, But on a very high level, it does seem that SpaceX is in a better position, owing more spectrum to offer its own director device service on a standalone basis. We're still waiting to hear more from the company about what that might look like.
Well, thank you for the latest in the reporting. It's an ongoing del that you're doing for us. Kelsey Griffith, thank you so much on the deal. Meanwhile, turning to the broader tech sector, let's bring in. Janetmui, head of market analysis for RBC Brewin Dolphin. It's always great to
get your take because there are deals happening at the moment. Janet, we are seeing new record highs for Broadcom after its earnings, and yet there's this wall of worry that the market has to climb up, and that's the macro picture.
Hey, Caroline, thanks for having me. I think on the optimistic side, we have seen Marquez climbed to the wolf worry very well in the second quarter, So I guess I would take a glass half fool view from here because I think primarily the most important thing is that you look at the earnings results, particularly technology, communications services and discretionary I think these are really great results and gives us more comfort that actually companies remain resilient and
they benefit from AI. Profitability is increasing. The visibility of broadening in AI application is there, So I'm cautiously optimistic. There are certainly micro headwinds there, but I am keeping an optimistic view. But I think overall we are keeping a modestly positive stands not overlaid bullish at this stage.
Janet. What was interesting as looking at Bloomberg Intelligence data, This morning. It's showing that basically AI and capital expenditure spending is propping up the US economic growth. It represents about a percentage point of all GDP additions so far in twenty twenty five. How important is the AI story to offset what is the weakness we see in the labor market for example.
Yeah, I think that is very significant. You mentioned the contribution from AI Cappax. I think he has overtaken consumer spending as a contribution to GDP groups, So that's unprecedented. It really just highlights how important this area is, and we are actually seeing a lot of visibility in this AI capac spending. We already know the exact figures from the hyperscalers already, and there are also loads coming from other sovereign states going into investments in the US for example.
So I think this is very exciting. This is an area that keeps US investors excited because this is all incremental demand which is arguably new which haven't existed before. So that that's I think a very positive thing.
Dannet on the Bloomberg terminal this morning, the focus is a FED cut in September. Will it or won't it? What's the technology investors' perspective on that.
Well, I think it is very much like very likely. I would say, unless there's some surprise in this week's data, I think it's pretty much baked in, to be honest. I think from an investor perspective, particularly in growth areas like tech, a rate cut would be appreciated, and I think further insight into how much the fat can ease
over the coming year would be important as well. And I would suspect they may lean into a more davish tone, which, ultimately, if they're rade cuts that are outside of a recession, recession is not a base case, by the way, that tends to benefit stocks. And as I said, you're adding the earning store, you're adding the AI Capex story. So I think that's a pretty much cautiously optimistic I would.
Look cautiously optimistic. You know what does not appear to be cautious is activity. Karen and I did the story about SpaceX buying spectrum licenses for Eco Star. There was still an earning story last week with Broadcom. Corporate America, particularly in technology right now, seems full of confidence and to have momentum.
Is that what you see?
Yeah, yeah, I will say, so, I think they're obviously risk from the macroside. For example, most clearly we saw that the labor market is weakening, so is it gonna be a further concern? Are there going to be further worse data revision that shows things are actually worse than expects, And of course the potential inflation impacts from tarifs. You can also argue that the markets are a bit complacent on that, and of course President Trumken potentially flare up
any geopolitical nuance. We just don't know, so I guess that's why I mentioned cautiously up Tomist. I think there are lots of positive factors out there, but as investors, we just also have to keep an eye on all the risks out there. So that's why, as I said, we're modestly progressed, but we're not overly overly Poolish.
Janet Mauie from rbcper and Dolphin back on Bloomberg Tech, Thank you very much.
They're coming up in the show.
The US considers a new option to try and prevent disruptions to the global electronics industry. Going to have those details next. This is Bloomberg Tech.
The US. Well, it's proposing annual approvals for exports of chip making supplies to Korean giants such as SKA Heinek, Samsung with Chinese manufacturing hubs. Now, this is a compromise to try and prevent disruptions to the global economic and electronic industry after revoking Biden era waivers that could have meant countless license requests a year. Bloomberg's Tech Executive editor Mike Shephard Joyce's in Washington.
This built on last.
Week's story where the waivers were taken away and it meant that thousands of licenses might be having to be asked for each year. Is this some sort of compromise.
Well, it sure is taking shape in that forum care And that was one of our big questions and our discussions of this last week, is what would take its place the blanket waivers that the US government had been granting to Samsung and sk Heinex to allow them to continue sending supplies of restricted equipment to their facilities in China. That had really helped those plants remain in operation even
with US restrictions. More broadly applying to China, the revocation of the so called balot dated end user agreement really threatened to upend operations at those facilities. So now what they will have to do is on an annual basis, basically come up with a shopping list for lack of a better word, carrow for the US government to approve on an annual basis, and that would include semiconductor manufacturing equipment and other inputs like chemicals in exact quantities to
get approval on an annual basis. Now, on one level, it's a measure of relief for the companies which have really been grappling with the prospect of a lot of uncertainty. At least they know that they'll have to do this every year. But then again, Caro, they're going to have to go through this exercise every year, and it's going to be a bureaucratic headache for them, and it will
be a burden for the government agencies as well. It also thrusts these companies right into the middle of the competition between the US and China, and it's a new headache on trade for Samsung, an sk Heinex, and the South Korean government as it grapples with taris at The Trump administry has also recently imposed.
Mike There is a second and separate story about the United States and South Korean firms. Last week, the US raided a JV between Hyundai and LG Energy in Georgia. Now we're reporting that other South Korean firms are kind of scrambling to get ahead of a bigger picture situation.
What are the details, Well, the details are this that there was a rate over the weekend at this battery facility in Georgia operated by Hyundai and LG Energy, as you noted, and a number of the workers involved were
South Korean. Now, one thing that's important to note is that for these foreign makers not only of batteries and other sophisticated electronic equipment, but also semiconductor makers, as they try to put their plants from overseas here in the US, they need that foreign talent, They need that homegrown engineering know how, the technical skill. They need to be schooled in the systems that have worked well in their home countries.
For instance, Hyundai and LG in South Korea, but also Samsung is preparing to invest in its own plants here in the US. They will have to bring in their own engineers, and they are facing a squeeze in the number of visas that they can legally obtain through the US government.
The H one B.
Visa program annually allows for only eighty five thousand in total, and of that total, South Korea gets a grand a grand total of two thousand visas, and that's not nearly enough to be able to supply those plants. So the
companies have been trying to work around this. And it's an example ed you know, we talk about this perhaps being separate from the other story on the on the waivers, the end of the blanket waiver on exports to China, but really for South Korean companies, they really do see this as another conflict with the US in terms of how they're able to do their business here in the US and abroad. So it really does become a challenge.
And now the question is how are the companies and the South Korean government raised this with the US and perhaps seek a solution.
Makes Mike Sheppard out of DC, thank you very much. Chip Designer, Qualcom and Google Cloud deepening their partnership to bring AI agents to cars. Qualcom CEO Christiano mum told us people need to think of cars as digital firsts. Listen to this.
We said that this is going to happen. We said that once you are behind the wheel of a car, you have you have no legacy of OSS and applications, and that the new agentic experiences enabled by Jenai will happen, especially because voice is very natural as an interface. So the way you should think about this the same thing that is happening, for example, with smart glasses, and we're incredibly excited about what's happening there as new personal AI devices.
It's going to happen when you're behind the wheel of the car. The car has those answers were used for navigation. They can see things, they can see the road, they can see different things as you navigate. And then you have this computing power that can run AI models into the car. The Gemini models get integrated the digital chassis and now you can have a gentic experience in the car. You can do search, you can ask about a planning navigation. You can ask you and I to tell you a
story of different things as you drive along. You can ask about what is the review of a certain restaurant that you want to do? Would stop if you want a reservation. The possibilities are endless.
You paint a picture of the future of driving. What about Gemini models that set them apart? Were they only game in town due to the previous relationship. Did you really set them versus some of the competition.
There's a lot of development of foundational models, and one thing that we've been saying for the past two years now is happening. I think those models are evolving to have big models in the cloud and models that also run on the edge and work together. This is true for all companies. It's true for Gemini, it's true for open Ai, it's true for what's happening in Meta and in an Amazon and et cetera. And I think that's
a great opportunity. We have obviously a very close relationship with Google, but I expect that maybe other car companies may want other models as well. And I think that's the change in the car computing. I think the car is going to embrace those agentic experiences very very fast.
Well com CEO Christiana Aarman coming up Cognition CEO Scott wu joins us to talk about the company's new fundraise is valuation as it integrates Windsor following that acquisition of the coding startup in July. This is really bad tech.
Artificial intelligence startup Cognition AI has a new evaluation ten point two billion dollars post money, coming from a roughly four hundred million dollar funding round. The deal comes just a few months after Cognition purchased AI coding start up Windsurf, in the wake of Google's agreement to license windsurfs technology and hire away pretty much most of its talent. Cognition CEO Scott Wou is with us to talk about it.
I think the most interesting part here is not that you've been able to raise more money at a higher evaluation necessarily, but since you guys acquired what was left of Windsurf, you have seen massive acceleration. Why did that happen so quickly?
Yeah, yeah, no, it's it's been like pemut butter and chocolate, basically having the two product experiences. And you know, I think in code especially, I think AI has really really taken off, and all the best software engineers have already you know, entirely changed their workflorce. The two main product experiences that you really see for that are one the ad which is what Windsurf is, and to the agents, which is what Devon is. And now that we have
that combined suite. We've just seen growth accelerating. We've been able to you know, bring Windsurf customers onto Devon, bring Devin customers onto Windsurf, and also just continue to.
Grow much much better.
Founders fun led this round eight vc Lux Capital prior investors also participated many others. When you were negotiating the funds and the valuation, how much was the sort of what you got for Windsurf baked into that conversation.
You know, it's funny.
And so we raised this round, you know, just recently. But as we were doing the Windsurf deal in July, that weekend, I was on the phone with Peter kind of giving an update on.
The business, Peter being Pizza Tal, Peter Tal, that's right.
Giving an update on the business and how things were going, and talking about the winster of opportunity that we had in front of us. And they were, first of all, you know, they were they were extremely supportive of doing the deal and they saw the same synergy as well.
But they were very clear with us.
That that they were very happy to give the support that we needed to make sure that we could get the deal done as well. And so that was a lot of what gave us the confidence to go ahead and go through with the acquisition.
How much is the money necessary right now, Scott to fend off competition? Now, I'm thinking of you as the first AI software engineer.
That's what Devon is.
But we hear some aman talking about GPT five, how good it is at coding. How much you seeing other companies trying to get in the space.
Yeah, yeah, yeah, absolutely so far.
You know, we've been quite efficient as a business in terms of capital spend, but of course we see a lot of ways that we can accelerate our business further with a lot more capital. There's a lot of work to do on good of market and on just generally growing the business out there, but of course much more to do as well on research, model training and so on.
And many would say the talent wars, as many have deen them, is an expensive habit for many.
Scott.
I want to go into your talent because it's fascinating the way in which you're offering incredibly generous buyouts to certain Windsurf employees, largely because is it because the team is too large or do you see it more as a cultural alignment, Because it's about the grind You've tried to make very clear to them.
Yeah, it's more about the cultural alignment. And you know, I think it's worth calling out that, you know, especially in AI with things moving as fast as they are, we have a very very intense culture and and and that's a lot of what we are. And obviously it's it's not it's not for everyone, and so we want to make sure that it's clear for folks that that's the case. And you know, I think for the right people it's it's it's amazing and it's exactly what they're
looking for. But again, it really is not for everyone. And we've been excited to grow the team. I mean, we've brought in some incredible folks from from the windsurf side now in the in the last six seven weeks post this acquisition, and then also been growing the team in a lot of other ways as well.
Well a lot of other ways.
My understanding, Scott is that two historic or either participating investors in this round have decided to join you full time.
That's who are they and why? Yeah?
Yeah, So so we had Christian Lawless from Conversion Capital who came and joined us full time, and then Emily Cohen from Neo. Both of those were early investors in US, supported US, you know, all the way through, and have made the decision to come join US full time, which we're extremely excited about.
There's a lot to clarify and unpacked here. My understanding is that when you close the Windsurf deal, revenues basically doubled overall, and enterprise combined enterprise ARR is running at thirty percent just in that period. But you said something a minute ago, Well, we've been very disciplined. You founded this company in late twenty twenty three.
Correct, Yeah, end of twenty three, started twenty four, and.
You've spent burned call it where you were about twenty million dollars in that period of time.
That's right.
Why do you need four hundred million dollars?
Yeah, yeah, No, it's a great question.
I mean, And to be clear, you know, I think Devin was already growing exponentially, you know, up until this deal. Windsurf was growing exponentially itself.
Up until this deal.
You know, we got to bring the products together and the businesses together and do that. I think from our perspective, as the game gets bigger and bigger and bigger, to Caroline's point. You know, it's very valuable to have the capital to be able to do much larger work in model training, or to be able to grow and blood scale our business much faster.
You call it a game.
The game gets bigger and it is about mission focus right now, Scott, so many people have so many questions about the culture of building startups. Right here, right now, it does feel world changing. But Scott, I put it to you, when you're talking about routinely being in the office through the weekend, doing some of your best work late at night, many of us literally living where we work, how do you keep people engaged? Sure, within your talent pool,
you probably have to lose carers in some way. You have to lose those who have other physical and mental passions. But when you're asking people to develop the latest and greatest product that maybe replaces them themselves, how do you keep them grinding?
Yeah?
Yeah, you know, I think on the one hand, of course, there I think there's all of the incentives and the benefits, and it's you know, it's very important for everyone at the company to be an owner of the company and
to hold equity in the company. I actually think that the most important piece of it, to be honest, is you know, for many of us on the team of course are programming nerds ourselves, and because of that, I think teaching an aid A program is maybe the funnest thing that we could be working around and spending our time on. And the truth is a lot of it is very very self directed for us.
The passion Scott, we we love having you want to talk about it, and the fundraise congratulation co founder and CEO of Cognition There.
Welcome back to Bloomberg Tech.
I want to get back to that deal between Echo Star and SpaceX, who are buying spectrum licenses from EchoStar. So the stocks up about sixteen percent in the session right a show that two day charts show the jump. On August twenty sixth, the stock had jumped almost ninety percent. Because AT and T is also in the markets by spectrum licenses, this is a stock that's trading at all
time highs. We focus very much on the SpaceX portion at the start of the show if you're just joining us, Caro, But for Echo Star, this is a company that's got itself out of a bit of trouble by doing this transaction and.
The board market signaling at to Echo Star. But let's dig in more to Musk Inc. And the recent board proposed one trillion dollar potential pay package being put to investors, an unprecedented incentive in corporate America. Of course, we're going to bring in Professor Shane Goodwin. He's executive director of
SMUU Corporate Governance Initiative. You were brought in by Teslas Special Committee to advise it on corporate governance matter, including, and I'm quoting from Tesla's proxy here, satisfaction of fiduciary duties under Texas law.
Take us to Texas law.
Shane, How is that different versus Delaware, particularly when you're thinking about more predictable corporate governance framework as it's said in the proxy.
No, absolutely. First of all, thank you very much for having me. It's a delight to see you again. With respect to Texas law versus Delaware. The one thing I do want to make clear for everyone is this pay package, which is actually a pay for performance. It's not a pay for promises, and that's one of the things I want to make clear. There are a lot of headlines right now, but this package as it's designed today actually works in Texas clearly, but it works in really every
other state, including Delaware. As everyone talks about the differences, we can get into some of the details, but it really is a pay for performance package and not a pay for promises.
And some of those performances are interestingly around a million robots, a million robo taxis, but actually it's still about getting twenty million actual evs on the road chain. How much was there a focus still in the bread and matter of what Teeser is, which is an EV maker.
Well, that's what it.
Is today and obviously, as everyone knows, and something that both Laon and the rest of the company and the board have talked about through at a critical inflection point today moving from a traditional EV manufacturer into a world that's with AI robotics, energy transformation, and as that master plan for clearly demonstrated, this is about sustainable abundance and this was the right time to actually make this decision today.
This is about timing and responsibility. It's certainly not reckless to make a decision today to keep the leadership and vision of Elon and that's exactly what the board and obviously the special Committee determined.
Professor Goodwin, the board addressed Musk's political activity and wrote in the proxy it had secured assurances that that activity would wind down. Taking into account the shareholder initiated proposal to invest in Xai, the board appears prepared to allow Elon Musk to continue to have responsibility across a number of companies at the same time. How much was that discussed the split focus as leader of a number of entities.
Now, it's a great question, and look, this is not a new topic. Obviously that the everyone has known that Elon's had a lot of other ventures and interests. When I say interest he before even came to Tesla, he was at Space x So this is not new. What I can tell you and what I have observed of myself, and this is something from being inside and watching it.
The art of committee that has a related transaction oversight as well as what the board and obviously the special Committee thought through very extensively, is how do we harness everything that is great that Elon brings to the table, and then how can we actually work together as we move and transition Tesla from this EV manufacturer which is a world class and moving that now to an AI
focused robotics and energy sustainable abundance company. And so this has thought about very extensively and it has actually been addressed throughout this whole process.
This committee, that the Board committee met with Musk ten times, and in the course of the three hundred pages, a negotiation plays out right where they Musk is able to say, well, here are my terms. How typical atypical is that given that the big package is atypical? And what did you advise the board on allowing must to come back and say, here is what I want in return for what you want?
Well, no, you're absolutely correct that there is definitely a negotiation that goes between a board and a CEO on any of these topics. And what informs my view and my decision is not just today as the corporate executive director for our SMU's corporate Governance initiative, it was over twenty five years of investment banking. I actually spent time in the boardrooms with these companies, advising them on M
and A transactions. Today I'm I'm also a board member, I'm also an investor, but more importantly, as wearing the hat as a professor and a teacher, if you will, I actually teach on these topics all the time, and this is a very important topic that comes up as far as CEO compensation. How do you retain, motivate, and incentivize your management team to align with shareholder interests? And that's fundamental here and that's exactly the process the undertook.
What I can tell you is that they had discussions with Elon throughout the process. But any deliberations and any thoughtfulness that went in, including all the alternatives and now the alternatives were all detailed in the proxy. Those were all done within the special Committee and then brought to the board. But it's a very typical process to have board members engage with their CEOs to understand what their
vision is first, and that was very clear. We need to understand what the CEOs and management team's vision is and then how do we blind that to our shareholders.
Interesting, of course on the board is Elon Musk, his brother Kimmel Musk too. They recused themselves when it came to putting forward this proxy to the investor base. But the twenty eighteen pay package, it was challenged, it was overturned because of so called conflicts of interest. What safety guards have you in this time? Chane to push back on any cynicism around it.
Sure, and there are going to be some critics, to be sure, but this was.
Actually thought about with an address the twenty eighteen Delaware Considerations. This has a fully informed, disinterested special committee. Both Robin Denholm and Kathleen Wilson Thompson were not only viewed as disinterested by the board when they formed the special committee, but McDermott, led by Wilson Chew and Joanna Lynn, actually conducted their own separate disinterested and not only at the time of when this was occurred back in February, but
everywhere through and up until today. And I've seen all the files and seen all the questionneers. That is a very important point. The second point is that they acquired and hired engaged independent advisors, and what I mean by that are accounting firms, valuation firms, compensation companies and then also in the case for me a governance to discuss about the implications around that.
So this was thought through with in contemplation. What happened.
It was a seven and a half month process. It did include, as you already talked to about Elon's vision, but he was exclude from all the deliberations.
Professor Goodwin, A question from our audience actually submitted to you. If I may across the operational and financial targets and requirements, why include the ebit DA goal.
Were you involved in that?
I wasn't necessarily involved with certainly picking out any of the operational targets. That was the special committee working directly with the company. There needs to be an alignment to be sure between what operational goals and what that will actually translate on financial performance. But what is clear is there are market capitalism targets all the way up to eight and a half trillion dollars, but also you have to meet operational targets as well, and obviously we talked about that.
That includes.
Robotics, the omnibile and then also the target you mentioned about ebit DAH. That's extremely critical to make sure there's an alignment between operational performance and also performance in the performance of the stock.
Shane, you advise on corporate governance, you sit on boards. You're also a teacher a lecturer, Professor, how extraordinary is this one key pay package offering when.
You teach about it?
Well, I do think that the headlines obviously of a trillion catches the attention for sure. But what I would point out though, is that maybe the headlines chase those numbers, but this plan chases results. And as I mentioned, there's no pay unless there's performance.
So there are no results, there are no votes, and there's no payout.
So what I would point people to is to say this trillion, I would focus on seven and a half trillion dollars of performance, that generation that the shareholders are going to receive, and obviously alignment for Elon Musk along the way and the rest of the management team as well.
Shane Goodwin, executive director at SMU Corporate Governance Initiative and an advisor to Tesla's board and the committee that did that compensation package, thank you very much. Shares of Roadblocks basically flat. Now they've been markedly higher after a big moment for the company, and lists have been raising their price targets for the stock because Roadblocks just held its
developers conference and it really reinforced its growth prospects. To like to say that Roadblocks is CEO David Zuki is with us here in San Francisco. Roadblocks moments now, I don't know necessarily you put too much stock into the headline of what an analyst says. But there are analysts out there saying that this is potentially transformational for engagement. So let's start with Roadblocks Moments. What is it and why so important?
Yeah, so, thank you coming off a great developer conference and coming off, you know, reiterating our audacious goal of getting ten percent of all gaming running on roadblocks. Look, we're looking for ways that developers can share and people can find their amazing experiences. A lot of people go on to social media. Roadblocks Moments is right inside Roadblocks.
It allows users to capture a great moment, like at the bottom of a roller coaster, or when you have, like something really amazing happen, and turn that into a short little video that other people can watch. What's really exciting about roadbox Moments. If you really like what you're seeing, you can click on it and jump directly into a Roadblox game. So it's it's one hundred percent Roadblocks. It's fun to watch and you find great new stuff.
Dave, We've talked about this idea in the past. Is it a competition for ribles with the likes of TikTok or is it something different? You know, gamers, actually people playing the games go to Twitch and YouTube, this goes back to the creator. It's slightly different.
There's a really interesting angle to hear and that anyone on roadblocks can make a Roadblox moment ultimately, and also a lot of the creators, whether we're playing minute golf for something else, are going to have the capability to let you automatically take a clip of your favorite thing, like a hole in one. So we're hoping individual users on roadblocks can make amazing moments other people can watch them and then find them miniature golf game.
A developers conference is exactly about the creator's Dave, and you offer them these moments, You offer them new AI improvements, new tools, ultimately ways to thrive the take rate for the content creators. At the moment, Dave, talk us through why you're recompensing them even more.
Yeah, thank you. Long term, we've shared we want to grow bookings faster than our employee costs or our cogs or infracosts, and we want to take that remaining cash and as much as possible distribute it transparently directly to the creators. So arguably the top applause at our developer conference was for the first time in six years, we increased the dev x rate, or the percent that our creators take home today for every robot they're they're earning
eight point five percent more than they used to. And as you correctly know, we introduce this a pile of new AI capability that we can talk about as well.
Yeah, what goes on behind that AI capability? How much you having to think through, get the right talent in place, and what is it that it allows roadblocks to really harness?
Yeah, rolling the clock back. We became an AI shop over four years ago and over the last four years have developed over four hundred AI models, so text translation, safety, voice filtering, text filtering, all of that. What's really exciting is we have a vision not just of using AI for safety, civility or for creating games, but AI should
be live inside of every experience. And so we were demoing live three D experiences where people were creating vehicles on the fly by talking about them, where in the past it was very hard for many of us to create vehicles. So we would say for any form of creativity, fashion vehicles, we're going to have more people creating in roadblocks experiences.
Dave when you bring all these people together in San Jose, what were the pieces of feedback you got from the developer community, good or bad? That either surprise you and you think, I got to go and act on that.
Now with the team, when people think about building a high tech company and with us this really audacious goal. Could we have ten percent of all the gaming running on roadblocks, RPGs, auto racing, sports, all of that. Interestingly enough, the creators really want raw scale, raw performance, raw realism. They're looking as we design this gaming platform in the cloud,
can it be bigger? Can it be better? So, in addition to the devx rate and the economics, some of the biggest applause was really around hardcore technical features that support ultimately photorealism and scale.
Part of that is that use engagement. The data on engagement for August is looking strong. Might carry through for the rest of the year. We've talked about this before and it's worth repeating. You have had Friday nights and Saturday nights where the servers are melting. How are you dealing with that?
I knowed, Yeah, we like the servers to melt. That's obviously a good thing, not a bad thing. Last year, our peak concurrency around this time was eleven million people playing Roadblocks at the same time. Two weeks ago, there were over forty five million people playing Roadblocks at the same time, and this was a coordinated event.
We like it.
A lot of the creators of the top games all had events at the same time to try to melt our servers. What's beautiful about our architecture is in addition to our primary focus, like we build our own data centers, we have great cloud partners, and our cloud partners now can come online for two or three hours on a Saturday. We can burst into this forty five million concurrency. So it's a really great problem. Tell all these creators try to stress our system briefly at time.
A problem has been safety, Dave, and you've been leaning into that with AIS. You just articulated still about what is it forty percent of your users are under thirteens. You've been making changes, particularly about estimates of user ages and check ins, Dave. How is that being received by developers and by countries at the Middle East, in particular of.
Late I'd highlight we have a history of leaning in before law or legislation. For example, California, age appropriate design code. We leaned in on that because we were already doing it. Last week we announced a somewhat bold and audacious vision to lead the industry in using facial age estimation, id estimation and other tools to know the age of everyone approximately on our platform, who's using communication, and also to use that to maybe adjust a bit who communicates with who.
The key I'd like to highlight is this sits on top of everything else we do, which is filtering all texts, filtering all voice, and also not allowing image sharing or video sharing on the platform. We think it's going to set a standard that other social media, messaging and comms products will look into.
Following David ZOOKI love having you on. Thanks for talking us through it found a CEO of roadblocks. Appreciate the time. Now coming up, let's talk Apple. It's about to launch its new iPhone seventeen air tomorrow.
Will it live up to the hype?
A's next as is a Bloomberg Tech Apple's biggest product launch of the year.
It's tomorrow.
The company which has fallen behind in the generator of AI race, shall we say we'll show if it's new iPhone seventeen for more and what we can expect, Blue Most Chief Global consumer tech correspondent Mark German, Mark, you always have it before, we told it tomorrow. What are you most excited about?
Yeah, I'm excited about the new iPhone seventeen Pro line. Personally, I think that the new design on the back looks pretty cool. I think the camera upgrades are pretty substantial, probably the most substantial in the history of the product. And for Apple, that is what is going to drive sales. It is those new Pro models. They're going to heavily market and feature this new iPhone seventeen Air so to speak, which is this much slim down phone.
It's about a third thinner than the iPhones of today.
But I still think for Apple's revenue purposes, it's the profones that are going to be the big driver here.
Mark. I really appreciated how you set the scene for Air in your power on. You compared it to the launch of Macair. Right, My first MacBook was like twenty ten MacBook.
Pro at the time, a big, old, chunky thing.
At first that was a difficult thing for Apple, and with time and innovation things improved. Explain the pathway you see for the Air going forward.
Well, it's the same as the MacBook Air pathway right. It came out in two thousand and eight. It had some things that worked well. The screen was full size, the keyboard was full size eyes it was a nice product with a touch track multi touch track pad, the first in the industry. But it was too expensive, it was too slow, and the battery life wasn't great. The
iPhone Air is going to be very similar. It's going to have a breakthrough design with its thinness, it's going to have great flagship features like a six point six in screen with one hundred and twentyz refresh rate, but it's going to have limitations on its camera and its battery. Over time, you'll see the MacBook Air transition play out as the iPhone Air transition.
So you'll see the ultimately the pro phones.
Get thinner, get lighter, get more processor heavy, and get better cameras.
And so this is a peak of the future.
It's just your beta testing what's really to come here With something that ultimately will be a little bit subpar compared to Apples other models.
Many would say perhaps all of this so called innovation, It really is innovative, but compare it to foldable phones and compare it to generator AI use cases at Google and competitors. How are you expecting this one to stack up?
Well, if you take two iPhone error side by side and you put some tape in the middle, maybe some glue, there's your foldable phone. Because that's basically what Extra's foldable phone is going to be like. Right, This is to prove out the concept of making a panel as thin as possible, slimming down the battery.
And so this is you know, Apple testing.
You know, Apple has much higher volumes than any of these other companies that have foldable phones that we've been talking about, right, and so they kind of need to test these things in the wild. They need to test their manufacturing capabilities, They need to engineer these things earlier on to make sure when they do release the foldable next year, it's at that Apple quality level. And Apple, at the end of the day, is a hardware company, and they're doubling down on what they're good at and
how they make their money. And so this is going to be primarily a hardware showcase. You're not going to see a whole lot of new AI features. They may refer to things as AI, but ultimately this is about the products.
Bloomberg's Mark Gunman, Thank you, and Bloomberg Tech will be live from Apple's event tomorrow. Tune in for some great conversations before and after. That does it for this edition, though a Bloomberg Tech carrot.
Yeah we can catch up. Don't forget to check in on the podcast if find out on the terminal as well as online on Apple, Spotify, and iHeart a Big week to come to miss out. This is Bloomberg Tech