Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and.
Ed Ludlow.
Live from New York On Caroline Hyde.
Man Achim Stenebeck in San Francisco.
This is Bloomberg Technology coming up.
All eyes on Video is the tech community gears up for the company's GtC conference this week. Will discuss what investors expect from US. Our conversation with FTC Chairman Andrew Ferguson on how it's prioritizing big tech, and two NASA astronauts will soon return to Earth a water SpaceX Dragon capsule after more than nine months stuck in space. The first we return to this particular area of the world. Evan checking on the markets. We're off by tenth percent
on the nast that one hundred. We can flip flopping between gains and losses, but ultimately underwater after what have been a stellar rally on Friday, but the points drags of the downside are significant. You've got Tesla, Apple, Amazon, Brolcon, Meta MicroStrategy, Google, but in video a key one as well. The biggest points drag on the day off by some twenty eight points, dragging then as that one hundred lower
as we see in video. Just seeing a little bit of cautious trading of course ahead of the all important GtC event this week. What can Jensen Wang articulate to steady nerves? We're currently off by one point eight percent him.
Well, as you mentioned in video, shares are lower the company kicking off its annual GtC conference this week. Investors are focused in on CEO Jensen Wong's keynotes set to be delivered.
Tomorrow for what we can't expect.
Bloomberg's Carmen Ranicky joins us Now, Carmen, good to see you.
What does Jensen need to do tomorrow?
What does he need to take hell investors to show that earnings haven't peaked and growth hasn't peaked.
Yeah, those are really the key things. I think what investors are looking for is that demand is good, that they're seeing people wanting to buy, you know, the next iteration of chips they're blackwell, and that ultimately in Nvidia sees a ton of growth ahead that they're you know, still at the forefront of the AI trade. That they're seeing things that are that are good, that there's growth in the future.
My question, though, is what more can he say that he didn't get across in his earnings. He tried to talk about that future, about the next scaling laws that are upon us, but it didn't refuel, regalvanize the trend higher for the stock. I think that's a really good point.
I think something that investors are looking for is maybe more information on the macro level. I think that they'll potentially be looking for anything that can be said about China the impact there, and I think that there are also things outside of just chips that investors might be looking for, you know, hearing Jensen speak about things like robotics and you know, autonomous driving and other parts you know, just of the overall market where in Vidia chips could
be used, I mean healthcare. You know, there are just so many instances in which AI could benefit different sectors and companies. So I think that that very future sort of view is something that people are really looking for, and we might also get, you know, a little bit more information on gross margins. That was something that was you know, very top of mind for investors coming off of the earnings, and so any clarity or optimism that Jensen could give there may also really lift the stock.
We thank you comm and Ranicky on all things in Vidia. Can he vindicate the valuation? Let's talk about these valuations and broader tech markets. Tiffany Waders with US Columbia Thread Needles, senior portfolio manager, and we try to take stock on the cell off that's already occurred that we've seen tumbling ten percent so far this year, for example, like an Invidia, but we're training at twenty six times future earnings. Are
these valuations more attractive yet? Or were still trying to catch a falling knife.
I think we're starting to see the valuations for certain stocks are more attractive. If you think about Nvidia, for example, it's trading significantly cheaper than where it has been for the last couple of years, and it's trading significantly cheaper than other parts of the market like staples, while growing much faster. So there's certainly some areas of the market, you know, certainly with intact that have sold off quite
a bit over the last couple of weeks. So we think the valuations do look attractive.
Friday's moved notwithstanding, but we're still down significantly from all time hives hit earlier this year on the major indices. Do you think this is the end of the pullback, Tiffany, or is there more room to move lower.
I think we're.
Getting close to the end of the pullback, at least for the short term. So I think, you know, in the near term we might be able to see a bit of a bounce in the market. But in order for us to see sort of longer term sustainability of that bounce, I think we need to see some resolution of policy uncertainty.
Right now, many wondering when we might get that, and that doesn't see certainty doesn't seem to be bothering ultimately the administration in terms of giving that to the markets at least, what does therefore a long time in the to decide when it comes to China, for example, at the moment, and whether or not you want globally focused stocks or whether you want actually US focused stocks right.
Now, yeah, I think you need to focus on the fundamentals of the names, you know, what are the opportunities for the stocks, certainly within the US. Outside of the US, there's a lot more enthusiasm for stocks that are based in Europe, right now. But I think we need to focus on the fundamentals, you know, even with the policy uncertainty, and look through some of this to what the longer term picture is.
Fundamentals Maney would say haven't changed in the last few weeks despite the never ending, ceaseless sell off. So from your perspective, has it been a just weighed out this sort of volatility and what fundamentals do you try and focus in on.
Yeah, I think companies are seeing a bit of a change in the fundamentals. If we do see tariffs being enacted right now, A lot of companies are kind of sitting on their hands for the year, waiting to see what the policies will be and how those might impact their cost for the year. So I think there's a lot of waiting and seeing in terms of companies deciding how to deploy their budgets for the year. But you're right, I think for the most part, the fundamentals haven't changed.
What could cause a change in the fundamentals is if we see a very long drawn out period of policy uncertainty that leads to lower consumer spending, lower corporate spending, which then impacts economic growth.
Okay, so let's talk a little bit about that Tiffany, because this administration doesn't seem that bothered about this selloff. Scott Bessen said as much yesterday, President Trump saying as much the weekend before. Are you confident that this administration can implement these pro growth policies that it keeps talking about.
It's saying to investors, essentially, patients, patients, When we figure out tax cuts, when we push those through, when we get companies to start making stuff here in the US, again, everything will be fine.
I do think that we see policies out of the administration that are potentially pro growth and are balancing some of the other policies like higher tariffs that might impact pricing, inflation, and consumer spending. But again, I think it comes down to the uncertainty around tariffs does some of the other policies, And if we can get some certainty, then I think
we see a resumption of consumer and corporate spending. And companies for the most part have plans on how they would offset tariffs, which might impact some consumer pricing, but overall, I think the consumer is still strong, So I really think it comes down to that uncertainty which is causing a lot of consumers and corporates to be on hold.
For the moment.
Okay, so raises the question of the federal reserve, And with the Federal Reserve, we'll do this week. Of course, the policy meeting kicking off tomorrow, we'll hear from Jay Powell on Wednesday. What's the needle that he actually has to thread in providing an outlook and communicating for the remainder of the year what FED policy looks like.
Yeah, I think there's a chance that we see some changes to FED policy, maybe some lower rates in the second half of the year, But for right now, there's still a lot of indicators that the economy is still strong and that inflation is coming down but is not
yet totally at tamed. So he certainly has to walk a fine line between acknowledging that we're seeing some signs of things like higher unemployment rates, maybe some lower consumer spending in the near term, but overall, the key indicators that they look at are still not indicating that it's maybe time for them to move in terms of policy quite yet.
Tiffany, I remember back in November of last year, when we knew the administration was going to be new, but hadn't come in. You were articulating how you thought, really, Tariss aware, it's going to be the pressure point for tech but also regulatory stances. How do you feel that this current administration feels about big tech and ultimately some of the antitrust weight that's on a meta, on an alphabet, on a Microsoft.
Yeah, I think it's unclear.
We haven't seen a lot of regulatory changes around from this administration. I think one thing we have heard from them is that in terms of things like M and A, they want to make the process a lot smoother for companies.
So that may not be helpful for the big tech names, which might be under scrutiny still for any type of M and A, but I think that they are trying to be a little bit more favorable or you know, more helpful for companies that are looking to do any sort of corporate action by at least, you know, speeding up the process.
Tiffany Wade of Columbia Threadneedle joining us on a set in New York City.
Thanks so much well.
China's internet search leader by Do released a new AI model that articulates its reasoning in an apparent bid to regain momentum against rivals like deep Seek.
The company says its new model.
Called ernie x one excels in areas like daily dialogues, complex calculations, and logical deduction.
The FDC is not taking its foot off the gas when it comes to enforcement action.
Now.
That's according to its chairman Andrew Ferguson. We sat down with him earlier today to discuss the FDC's mission under the second Trump administration and how he will approach dealing with big tech. Just take a listen.
I think if you are a big tech company, you should be getting your lawyers to give you great advice on complying with our competition and consumer protection laws. Look, I don't have a particular acts to grind within the industry, but I do think it's very important that the FTC devote its resources to the markets that Americans most frequently engage with. It's not just big tech, although that's definitely one of them. It's also healthcare, and it's protecting American
as laborers. But no matter who you are, I think it's important to proceed like the FTC is a vigilant cop on the beat. We're surveying the markets, We're looking for competition, problems. We're looking for violation of the consumer protection laws, and if we.
Think they're there, we're going to go to court.
But most importantly, if we don't think that there are problems, it's really important for the FTC to get out of the way. Again, one of the most consistent complaints that I've heard about the previous administration was a lack of certainty and a tendency to want to do a lot of regulating the FTC.
We're not regulators. We're cops on the beat.
We police for competition problems and consumer protection problems, but we're not trying to regulate the economy. We want to create economic conditions that allow companies to innovate, to grow, and to help lift the whole country out of this debt crisis and bring about the golden age that President Trump has promised the American people.
Talk about striking that balance because many would say, if I look at Europe, they regulate too much. There's too much enforcement. But in many ways they're being a strict coup on the beat. Some would say, so from your perspective, are you seeing overregulation in Europe? And is there a worry about stifling innovation in the United States by the amount of focus you have on big tech right now.
Well, I do think that Europe has a real regulatory problem that has an innovation problem, and we definitely don't want to create conditions here in the United States that suppress innovation. But I think it's important to bear in mind monopoly suppresses innovation. Monopoly makes it very difficult for little companies with the next great idea to sort of rise.
And I think it's very important if we want to sort of preserve the American innovating spirit, that we create conditions in our economy that allow little tech who have the next great ideas, the next life changing ideas for all Americans to thrive. President Trump has been pretty emphatic on the importance of making sure that our economics system allows little tech to bring its ideas to market. And that's what antitrust really does, is it prevents monopoly, and
monopoly stifles innovation. So if the antitrust cops are vigilant and are making sure that they're protecting us from competition problems, it allows the innovation that has made America and our economy sort of the driving engine of the whole world.
What deals do you think can get done. Is there any prescription you can give as to this MNA will look good if you are a big tech hying a little tech.
I think that the deals that can get done are the deals that are lawful. And I think the most important thing I want to take away from this is.
I see it as my job.
To screw deals consistently with the timeline Congress created.
And our antitrust laws.
And if we think that they are illegal and we think that we can win in court, We're going to go to court.
But if we don't think that they.
Are illegal or we don't think we can win in court, the FTC is going to get out of the way again. I've heard this complain a lot from the business community that in the previous administration, a deal would enter the FTC and it would sort of disappear, and sometimes it could disappear for months while you know, novel ideas were floated, different theories, and sometimes it sort of seemed like the FTC was hoping that deals would die on the vine while they waited for regulatory clearance.
I want nothing to do with that.
If a deal is illegal and I think we can win in court, I'm going to go to court. But if it's not, we're going to get out of the way and we're going to let deals go forward. M and A is part of how the economy grows. It's an important part of fostering a system that allows for innovation and dynamism. But we have to make sure that we don't create monopoly, and I see that as my job.
If we think there's a.
Monopoly problem, then the government's going to intervene. But if not, we've got to get out of the way as quickly as possible and let the economy grow.
Does the AI space look like it's thriving or do you worry about monopolistic behavior there?
Yeah, I think it is extremely important that we protect competition in the AI space, But I think it is equally important that the government not race to regulate AI. Vice President Vance's speech in Europe on AI, I think is about the perfect way to thread this needle. We've got to ensure that there's competition. We got to ensure there's competition because competition promotes promotes innovation. But we can't have the government come in with a heavy regulatory hand
and stifle innovation. Again, we don't want monopoly stifling innovation. We don't want big government stifling innovation. And admittedly that's not an easy needle to thread, but that's how I think about it, is protect competition, but don't over regulate AI, because that's exactly how we're going to kill the innovative prospects of AI.
You started all of this by talking about the very close look you're going to take at every enforcement action that's out there at the moment, whether you pursue it or not, But just that assessment takes a lot of labor. You've also said you've got the resources.
I know everyone's been to asking you about.
What this lawyer said in court yet last week regarding the Amazon Prime deal, and ultimately you've been saying he was wrong, and they came out and said that, no, we do have enough resources, even though he said there's an extremely severe resource shortfall in terms of money and personnel at the FTC. Have you got the right amount of people and how are you living up to Doge's necessities to slim.
Down Well, I didn't say that the lawyer was wrong. The lawyer said the lawyer was wrong. He filed something almost immediately after his statements of the court, explaining we don't have the resource constraints that he thought. We don't have resource constraints. I've said from day one, we've got the resources to litigate these cases. That remains true. But I also want to be clear. I think that the President's efficiency agenda is one of the most important things
going in government right now. Government should not be any larger than necessary to deliver the services and protections that the American people deserve. And at the FTC, look, we're a lean operation. Our budget is less than half a billion dollars. We've only got around thirteen hundred employees, and we deliver a lot of value for the American people. But we have got the resources we need to deliver
on our competition mandate, our consumer protection mandate. But we're always looking to be as efficient as possible.
Well, there you have it.
FTC Chairman Andrew Ferguson in his interview with Caroline Hide just moments ago, Andrew in a very festive tie for the holiday I should know. Let's stay in Washington to break it all down with Mike Shephard. Hey, Mike, what are investors learning at this point about any daylight between Alena Kahn run FTC and an Andrew Ferguson run FTC.
What are the differences that are emerging?
Well.
One of the differences that became clear in this interview is the speed with which he is promising to move and the decisiveness he said he.
Will try to bring.
He faulted the prior administration, the Biden administration, and the prior chair of the FTC for perhaps moving too slowly and deciding on some of these enforcement actions and whether to intervene to block a deal. Sometimes companies would be left hanging for months, uncertain about whether their transaction, their
proposal would actually win the Commission's blessing. When he says, look, we'll try to give a thumbs up er thumbs down much more quickly and much more decisively, so that there is uncertainty removed from the equation.
And he also made clear.
That look, we are going to proceed with a number of these enforcement cases against big tech. Little tech is responsible for a lot of the innovation that we see
in the economy. And the competition cases that are now really hitting their stride against Google, against Meta that are in court now, those were brought during Donald Trump's first administration, and he warrened is we heard very clearly lawyers for some of these big tech companies should be ready to make sure that they're complying with competition law.
Some of the concern regarding just the sheer scale of big tech has been around artificial intelligence. It's interesting that here in New York looks as though the Governor Kathy Hokeel what's to cross the divide at the moment mind, wants to work with the administration when it comes to the AI Action Plan. Just talk us through what we're starting to see on a bipartisan nature.
Well, it was interesting to see her way in so quickly with New York State's vision for how the AI plan that is being pulled together by Donald Trump's AI ZR.
David Sachs at the White House.
With a June deadline to pull this new vision for AI policy together. She is the first governor to put in a state's vision for how that plan should come together. She called for a couple of things. One encourage adoption of AI across the board more widely in industries.
To do more to.
Revise intellectual property protection laws so that there is a less of this uncertainty surrounding all the data that these large language models need to be able to run and to be able to work and to train. And then three the energy question. This is one we've talked about
so much. Here they're even talking about nuclear energy. And there's a lot at stake for New York because Micron is building those big factories that got chipsacked money upstate, and they want to make sure that New York is getting a piece of the action.
Here, Max, Mike Sheffind, we thank you so much. The latest from Washington now coming up. Klana officially files for an IPO and it dethrones a firm to become a Walmart partner. More on that next. As a promote technology payment's firm, Klana, It's felled publicly for a US IPO, showing the company's revenue jump twenty four percent last year. The company also today announcing that it will be partnering with Walmart to offer buy Now, Pay Later to more
US shoppers. It's actually replacing a firm as a retail Jant's fast credit option for more Boberg's Bailey Lipshaw's choice US. Now, I go to Today's news because this is quite an upending of the relationship for a firm, right.
Yeah, it's a big change, and as you can see, a firm down more than ten percent, this coming the company announcing in a statement that Walmart alone accounts for about five percent of its gross merchandise volume in about two percent of suggested operating income. So pretty sizeable chunk, not quite the size of an Amazon or Shopify, but obviously a big move for a firm, And obviously, if you're Klarna, announcing this right after you launch your IPA or file for your IPO publicly is kind of big.
News on that ipo. Bailey, what took Klarna so long? I mean, this is a company that is almost as old as Facebook, trying.
To get it right, tim When you look back, this is a company that at one point was valued magnitudes higher back in twenty twenty one, Soft Bank cutting a sizeable check and ramping up its valuation more recently private valuation around fourteen point six billion dollars. So trying to right size the operations, trying to grow back into that valuation. Even if you look at a firm, this is a stock that's up thirty two percent on a trailing twelve
month basis, trading around forty five bucks. Just a last month it was north of eighty, so a lot of volatility, and as much as a Klarna management team will want to pitch you on different kind of offerings and diversification, at the end of the day, the buyside is going direct to directly compare this company to a firm who is still well below the peak that it hit back in twenty twenty one when it was traded for one hundred and sixty nine dollars a share.
Swedish founders coming to the US very briefly, Baby, anything worrying in that IPO listing, not.
Really nothing jumped out completely. It is interesting they have three classes of stock, so we're trying to get a better understanding of what that means, what that could look like, and kind of how that's going to impact the path forward. But the typical kind of red flags and wards of caution, we're kind of what you would expect.
On Bloomberg's Bailey Lipschaltz, Thanks so much, Bailey.
Welcome back to the Technology. I'm Canline Hide in New York and.
I'm Tim Sanoveki and that's San Francisco.
Checking on these markets. Tim, because we have flipp floping between gains and losses the NASAK one hundred currently of five dollars tenth of a percent. Now, we got retail sales that weren't too ugly, but they weren't great. And ultimately we're still trying to work out after Friday's push higher, can we sustain any sort of built in risk on attitude not in big tech have to say. And video is pulling us lower from a points perspective, but so
too is Tesla. Drill into what's happening on the next board, because Tesla is off by forty percent year to date thus far, Mizuho slashing its price target for this company, once again reaffirming some of the key concerns we got across the company. We're worried about China sales, European sales, US sales. Were worried about ultimately a long term AI vision not hit being timed to the here and now of really how many cars are going to be sold under Elon Musk. We're looking at BYD and I compare
and contrast is up two percent. They're saying they're going to have EV charging at just five minutes. That'd be a big game changer for me and my EV. But tim we're seeing once again BID up to date on its overall US Depository receipts, wherest has result by well.
Have you got five minute charging? That's like almost as convenient as a gas station. So we'll see if that actually comes to fruition. Well to hu NASA astronauts, Butch Wilmore and A Sunny Williams will soon return to Earth after SpaceX is at Dragon Capsule successfully docked with the International Space Station early Sunday morning. The two astronauts spent over nine months in space following a series of unexpected events and technical issues with their original spacecraft.
For more, Bloomberg's Bruce Einhorn, it joins US.
Now, Bruce, this is as much about SpaceX as it is about Boeing and it's Starliner capsule.
What does this mean Boeing moving forward? Sorry to jump in there.
So there are a lot of questions about Boeing's space program following what's happened here. So, of course, Butch and Sunny they went up on the Starliner capsule. They were supposed to be there firmly about a week. They've been there for quite a lot longer. The star Liner did return to Earth without them, but there were concerns about the safety of it, and a lot of questions remain about just whether that's a program that has a future.
Take it back to the success that this shines on spacexse Yes, they were slightly delayed, but ultimately they're the ones that have to be dependent on. From a US government perspective, right now, that's all there is really.
The US currently has two ways of getting people to the space station, SpaceX's Capsule and Starliner, but Starliner is not really an option right now, so it's really just SpaceX. The only other way to get people to and from the space station is a board of Russian Sawyers Rocket.
But as far as US capabilities, it's just SpaceX. There are others that have either already had a cargo flights or Planner having cargo flights, but as far as getting astronauts to and from its uh, it's SpaceX with essentially monopoly now, given that Boeing Starliner is questionable at best.
Mort Bruce Sinhorn, we thank you much celebration for those returning astronauts. I'm sure a little bit later meanwhile, electric air taxis could soon been on the horizons of London and Manchester Joby Aviation and Virgin Atlantic have announced a partnership to launch an air taxi service in the United Kingdom. Let's bring in the CEO of Joby, Jobyn Vivet and Jovin. How soon am I going to be able to fly back to the UK and hop on one of these jobs.
It's just a few years out, Carolyn.
We're so excited to be announcing today our partnership with with Virgin. Virgin has an incredible dedication to customer service
that matches with our own. In addition, Delta is one of Virgin's largest shareholders and a cudable partner for Jobie, and so this is really a match made in heaven and we're so thrilled to be announcing it and really using it to help catalyze the development of takeoff and landing locations both within London and across the UK, which is going to bring the service to market, so just
within the next few years. We're so excited to be bringing the opportunity for Virgin customers across the UK to fly on our air taxis.
Would Virgin and in d Delta actually buy some of these aircraft? Are they just helping promote them?
So We're going to have Virgin customers. We're going to give them the opportunity to book a Jobe Air taxi flight on the Virgin app, on the Virgin website, and to be a key demand funnel alongside our partners at Delta and Uber in driving to put passengers and fill the seats of our.
Serri It's marketing actually going to be committing to purchase one correct.
It will be job owning and operating the service in the UK, much like we do in the UEE, in Dubai and in New.
York and La Jovin.
What is the main thing holding us back right now from flying in these to the airport in the US and the UK at this point is it regulators.
So we're making record progress on certification. This last quarter we announced the FA had made record progress on their side.
Joby is really leaned in.
And delivering day after day on the component system and aircraft level testing. We're testing more components, building more components, building FA conforming components, and testing FA conforming components. So we're really thrilled with the momentum we're seeing on that side. We're seeing incredible lean in from the administration, from the DOT from the FA, and we also had uk CAAA regulators here in California with US beginning the preparation work
for the validation of our FA certification. So fabulous progress across the board on the certification front.
How has your relationship with the FA changed with this administration?
As I said, really seeing a lot of lean in.
The administration has made air taxi is a very high priority, and that also is going to roll into the buildout of infrastructure. And we view these vertiports, the takeoff and landing locations that you can fly from, as being a critical enabled to delivering really spectacular customer experiences. And so we're very grateful for the administration and the priority that they're putting on building you take off and landing infrastructure.
And how about at the moment me as a consumer might be able to get one in twenty twenty six I believe your new timeline is But Defense, how are you working with the Defense Department at the moment? Potentially I'm seeing EVE tools in that particular area.
We've had an incredible partnership dating back to twenty sixteen, and this is a critical accelerant to all of our work. The DD has been a fabulous first mover and that continues. We delivered our second aircraft to Edward's Air Force Base and so now we're thrilled to have both of those aircraft flying, building a really valuable flight test experience, and we see that as just the beginning to incredible opportunities
for vertical tech off landing aircraft. On the defense side, the dd gave us provided us with funding which enabled the demonstration of our five hundred and sixty one mile flight this last year of our hybrid aircraft, and so we're just thrilled to be seeing such incredible momentum on the dud side for this industry.
Joeb CEO Joe Ben Bever joining us from Santa Cruz. Thanks so much for joining us today. Do appreciate it well. Coming up, Zoom's chief product officer, Smita Hashim joins us to discuss the company's updated AI agents.
That's next, This is Bloomberg.
Let's talk about AI spending because resources are going to continue to be increased by hyperscalers. In fact, we're expecting them to increase by forty four percent this year, top five hundred billion dollars in the early next decade. That's according to a new report today from blue Meg Intelligence for more, what's actually driving the spending spree that's bring in Bluemeg Seth Figeman and look, there was a worry
about deep Seek. Is some of these much more efficient and ultimately cheaper, less powerful models coming to there, and we don't seem to need to worry about it. Hyperscalus is still going to flood the system for data centers for infrastructure.
Business as usual, if anything, is the opposite issue. Now we're seeing deep seek and the attention to it being kind of a catalyst here for the tech companies to say, well, we want to invest more to develop this technology and specifically around inference. So I think a lot of the investment today has been around training building the models, but now with reasoning systems like deep seeks, there's more investment
in how they operate after they've been trained. And if you're an investor right now, maybe the silver lining is more of that spending shifts too after the model has been developed and deployed.
But Seth, won't reasoning become more efficient as well, We'll be able to do more with less, you.
Know, one way, hope.
Although we're trying to build more sophisticated reasoning models. So TVD on that front. But I think the idea is as this gets developed at scale, deployed not to some of the US book abroad, you're going to see the amount of money that goes into inference to support reasoning really shoot up in the coming decade and really make up a much larger percentage of the whole.
So let's just go back to the anxiety that that reporting of Microsoft pulling back on leases of data centers sent shot ways through the market off the week, of course, got the efficiencies of deep seek. That's not going on. We're still seeing an ever scaling amount of money going into infrastructure.
Yeah, I mean, at least the cording of the Bloomberg Intelligence report, the pace of growth is actually greater than they have previously expected before Deep Seek and the shift towards reasoning models. So again business as usual to some extent, more investment in data center is more in chips, but shifting a little bit of the focus to inference.
All right, Bloomberg Seth Figureman, Seth, good to see you, Thanks so much.
Well.
Today Zoom announced new features and skills for its AI companion. The company is leaning into new products as its video business matures. Joining us now is Smid ah Hashim, Zoom's chief product officer. Smida good to see you. I do wonder and we'll get to the announce in just a minute. But how would you characterize how subscribers right now, how customers are actually using the AI features of Zoom beyond its core video products.
Yeah, absolutely, so, I said great too, great to be here, thank you for having me. So we continue. We are seeing accelerated growth in customers using Zoom Ai Companion, which is a generative AI assistant. Last quarter, the quarter over quarter actives group by sixty eight percent, So that is a huge increase in one quarter. So we continue to see customers get more comfortable and using generative AI a lot more.
When can you tell investors that you'll be able to charge more for these products and grow that top line as a result of the innovations that you're making when it comes to AI.
So, Zoom Ai Companion is so we include Zoom may I Companion at no additional cost in our product, and we continue to expand it. So last year we expanded it to work across Zoom workplace. Talked about expanded product portfolio, so across meetings, chats, Phone Wideboard, but also Microsoft Outlook, Calendar, Gmail, Office Docs. So we expanded its footprint quite a lot, and we continue to see the growth which I talked about.
We also announced a custom AI Companion add on, so that is a paid add on, and with the Custom AI Companion paid add on, which is coming out next month, customers will be able to use Zoo AI Companion in ways that's really unique to them, so with custom vocabulary, connected across different applications, So that is something which we would be charging for, and we also charge for I mean our departmental our products like contact Center, we have advanced AI in them like AI Expert Assist and those
are also paid product.
But really the.
Crux for us is we want customers and users to really benefit from AI capabilities. And then on top of that, you know, as they start using them, we want to give them more ways to customerze and expand, which is where the monetization is.
And it's interesting how you're talking about working alongside Microsoft Outlook, working alongside Google's Gmail. You've worked at both those companies, helping of course with Google products with Microsoft teams. Just how competitive is it out there, because that's what investors a worry about, that you're going to lose out to a teams for example.
Yeah, so I do think customers we see a lot of customer interest and love for Zoom. When we talk about customers, why do you love Zoom? I mean a lot of it is it just works. It's really a great experience. We also work hard to give customers choices, so we are an open platform, and customers like that. They actually like a lot of choice, and we give them great value along with these experiences. So for example, including Zoom ai companion as part of all of our
paid licenses. So all of this is what's coming together to keep our customer engagement really high and have the incredible love that I see for Zoom PROMA customers, which honestly, I have not seen anywhere else in my long career.
You just talked about some of the growth quarter on quarter, what was it sixty eight percent increase? But what is the amount that people are using it? You might see adoption increase, but how addicted to it are they?
Yeah? So you know, I mean the growth numbers to tell the story that if people are using it and abandoning it, then obviously we are not going to get the growth that we are seeing. So customers continue to use it, and they continue to use more and more of it, and some of the data what we are hearing about is how much customers are using it all the time in order to streamline their work. So personally, for me, I'm using zoom ai Companion to prepare for meetings.
During the meeting even to understand different viewpoints. I'm using it to summarize Zoom team chats, understand my action items, and one cool use case I have is I'm beginning to use it end of the day to really reflect on my day. So when we are talking to customers, we're seeing a breadth of use cases now that zoom ai Companion is across zoom workplace and it's across these connected applications, and that is where the engagement is coming from.
But in that spirit, I also want to talk about our next set of announcements which we made, which is we really talked about how the big changes Zoom ai Companion is becoming edgentic and agentic really means that it can behave more and more like you and I do. So we have added capabilities like reasoning, It can reason over a large surface area memory, so it can remember what happened. It can orchestrate across all these different products and more skills and agents, and then it can also
take actions. So not only can it reason, it can complete actions. So with some of those changes, a Zoom work pace AI companion is not only able to help you understand what it's going on, but also complete things for you like complex calendar scheduling, writing documents in ways that really affect those even send messages on your behalf.
So these agentic skills are those which are going to further deep in the engagement and help users save more time so they can be more effective, whether it's connecting with each other or being more productive.
Are these agentic schools built organically by Zoom or are you relying on a third party perhaps LLM or other AI agent to actually power the Zoom skills.
Yeah, so the agentic skills themselves are the So we do a lot of our core AI stock, but in terms stack, but in terms of the agentic skills or the models, the models that we are using. From day one, we have had this federated approach which means we work across a variety of models. We work across open AI and tropic. We use open source models, we have Zoom's own models, and recently we have also started investing where
we have Zoom small language models. So these are smaller, more specialized models, and we have seen these models really perform at the top of the public leaderboards and benchmarks. So we use a variety of these models using the federated approach her party as well as ours in order to give users these great experiences.
Smita Hashim, thanks for joining us today.
Same chief product officer.
Amazon's Alexa division is set to introduce a new premium tier of gadgets alongside a revamped AI operating system called Alexa Plus. This in an effort to revitalize the brand for more Bloomberg's Mark German, it joins us Mark. How much of a departure is this for Amazon's hardware strategy. Apart from the fire phone more than ten years ago, Amazon has really created gadgets and hardware that is cheap and allows you to buy more stuff from Amazon.
Yeah, that's right, So todate, the focus has not been on making money on the hardware. It's not been on people really loving the hardware. It's been a focus on get people to use Alexa, getting people to buy things through Amazon Prime, getting people to subscribe to Prime in their video services and their music services and the like. Obviously the Fire TV sticks, the echos, the Echo shows and what have you. Now it's about both. They want
to bring Alexa Plus to more people. They want to get people hooked on that Prime subscription one hundred and forty dollars a year, but they also want to make more money on the hardware, have more premium hardware, and really make products that compete with the upper echelon of the consumer tech industry. And so panos Pine was brought
in about a year and a half. He was post for Microsoft or he was the chief product officer, and at Microsoft he was known for high end materials, using new types of materials like what you would see on maybe car seats or in a car as laptop padding on the palm rests, using lots of aluminum, high end hinges, just very high quality materials and product development processes, basically the type of stuff you were seeing from Apple for decades at this point, and applying that to Microsoft's products.
He's going to do the same thing at Amazon, and he's going to start rolling out those new higher end products beginning at the tail end of this year.
And talking of that premium focus that Apple has, you had a great power on out over the weekend talking about the slimmer smartphone that's likely to come when we get iPhone seventeen and just how this pushes them ever more further forward in terms of charging in particular.
Yeah, this is really cool.
Actually, So this year they're coming out with what I've been calling the iPhone seventeen Air or the iPhone Air. Why well, let's look at the MacBook strategy. They have the higher end, thicker MacBooks with all the specifications. Then they have the lower end MacBook Air, and that's a focus on thin and light, using next generation technologies for thinking futuristic. So now they saw the success with the mac they want to do the same thing to the iPhone. So this is going to be a slim down model.
It's a fifth thinner than the other iPhones on the market, and when you're getting down to twenty percent thinner, that's really thin because the iPhones are pretty darn thin already, right, And the way they've created a very sophisticated display and battery technologies to get the power efficiency up using a new modem. It's going to have a display around six point six inches, so a little bit bigger than the
smaller pro, so it's an in between er size. I think this phone's going to be really successful, really hot. They wanted to make it even more futuristic by removing the charging port from it, but they were worried about EU regulators, so that charging port will be there for this generation. But my anticipation is that this is one to foreshadow even thinner, even bolder iPhones with bigger design changes, foldables, and certainly models down the road without charging.
Portsmis margam and always foreshadowing the future.
We thank you now.
That does it for this edition of plumag 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. From New York and San Francisco, this is Plumbag Technology.