Snap Earnings and AT&T Slumps

We will discuss. Plus, consumers are so strapped for cash they're pushing back cell phone payments and that's hurting A T and t s bottom line, chairs dropping the most in two decades. I'll ask a T and T CEO John Stanky what this tells him about the state of the economy. And big tech is on a health kick. Amazon is buying one Medical in a three and a half billion dollar deal. The news a day after Apple published a sixty page report about its own dominant in

the sector. We will head to the front lines of a new showdown all of that in a moment, But I do want to talk a little bit more about Snap now bringing Jasmine Edinburgh, principal analyst at Insider Intelligence. Look Jasmine just had a bad How bad a signal does this send? Well, this isn't totally unexpected. I think the big question was how big of a slump it would be, And now it's just become increasingly clear that all these macro economic challenges are really putting pressure on

Snap's ad business. Now. Snap has staked its future on augmented reality, which holds promise, but it is still very niche as an advertising and an e commerce tool. And at the same time we also have Apple's privacy changes which have disproportionately affected performance advertiser. So it's really creating this one to punch um to snapchats ad business. Now, Snap, of course is a small player in the digital ad market.

At Insider Intelligence, we expect Snap to make up just one percent of worldwide digital ad revenues this year, which means it could be more susceptible to a lot of these challenges than bigger players, for example. Well, that's a question, is this just Snap or is this going to impact everyone else? And are we going to see this in the results of Facebook and Meta excuse me, and Google and Twitter for example? Stocks of all of these companies dropped on the back of Snaps results as well? How

much how contagious if you will, is this? Yeah, I think we'll be hard pressed to find any social platform that hasn't struggled in Q two. I'm not expecting fantastic results for any of these companies, but again it's the smaller players that tend to be more vulnerable to a lot of these challenges than the larger ones. How much competition do you foresee from streaming services in the ad business? With Netflix, Disney, HBO all exploring these ad support in models.

Is that now a new battleground? So I cover social media companies and I don't cover Netflix and other streaming companies, but I will say that the more consumer attention is divided onto these different platforms, and the more options advertisers have on where to spend their ad dollars, especially with a lot of these issues like the app like Apple's privacy changes that are impacting the social media companies, the more likely it is that they will diversify their spending

and perhaps spend elsewhere. What can we anticipate from Twitter results coming out tomorrow? Obviously we know Twitter one Round one in core and that side show is gonna be going on now for several more months at least. Yeah, I'm not expecting really great things for Twitter tomorrow. Um. It has been distracted from most of Q two with the whole Musk ordeal, and that has made it harder for it to really focus on growing its business and its revenues. Um. Twitter is also a small player in

the digital ad market. It will also make up around one percent of total worldwide digital ad revenues this year per our podcast, So it is vulnerable to a lot of these necro economic challenges as well as other changes and online privacy and shifts them consumer behavior. All right, Jasmine Emberg, Insider Intelligence principal analyst, thank you as always for your insights. Will continue to listen. In two snaps call,

it was a strong earnings report, but oblique outlook. A T and T just had its worst open in twenty years as rising prices from gas to groceries way on customers. A T and T cut it's free cash full forecast by two billion dollars, saying more people are putting off paying their bills. Joining me now, John Stanky, the CEO of A T and T, So John look, investors were a little spooked by what they saw today what's your

response to their response. Well, I think the investors looked at the cash number and they were you know, certainly it was a bit out of pattern for our second quarter, and I acknowledge it. It is, and as I described this morning during the call, that a lot of it was by our choice. One. You know, we had record customer growth and we had to fund that customer growth, and that requires cash out the door, and that's not

business I'm going to walk away from. And and frankly, the numbers and the economy is a bit stronger right now that we had anticipated last year when we set the plan. And I think it's a good thing we've got the customers coming in the door, but it did have a negative impact on CAST. Secondly, we're investing at record levels in the business, and we front endloaded our capital plan this year, which from our perspective is probably

a good thing. It allows us to sell into that inventory and and drive more broadband subscribers, and we were able to get more five G coverage out there to our customers on midband spectrum than what we had planned. That also took cash. The one element that I think you're referring to is we did see customers take a little bit longer to pay their bills, and that how working capital impact. But we were pretty clear that we weren't saying customers weren't paying their bills, and we weren't

saying that activity was slowing down. We just said simply that we've got customers taking a little bit longer to pay their bills, and there was a working capital impact. And in a business our size, you know, when you end up seeing them take a day or two longer to pay, that's a significant impact to the cash flow. Now, what's also recently really interesting here is this is a fairly recent trend that you've been seeing just over the

last several weeks. A day or two maybe not a huge deal, but what are the chances these delays get longer or are you expecting some of these customers potentially to cancel. I think we don't expect these customers to cancel. We've we've had, you know, a lot of experiences going through economic downturns, probably depending on what point of view you hold of the economy in the future right now, looking at looking at projections, certainly people are talking to

either saw landing or avoiding a recession. Altogether. Um, So, you know, we've been through much more severe cycles. And what we know is that customers really want to keep their connectivity services. They stick through. And that's why I said, we don't view this as a cataclysmic problem at all. We see customers choosing to take a couple more days to pay their bills, creating a working capital problem, not a bad debt issue. Uh. And you know whether or not it gets more severe. I mean, I'm not a

fortune teller. I wouldn't anticipate that in the economy right now based on the numbers are seeing. But we do expect a more tepid environment working looking forward, and that tepid environment, you know, could slow down economic economic activity a little bit, it could extend things a little bit. We've taken a conservative view on our forecast right now. We feel pretty comfortable that we've got that under control

for the balance of this year. You've cut your free cash flow forecast, but you've maintained your capital spending plans as you've been talking about. You are investing in the business. Will you have to cut the dividend. No, we don't have to cut the dividend. We have plenty of coverage on the dividend. We we adjusted the dividend coming out

of the Warner Brothers Discovery transaction. We just paid down over forty billion dollars of debt on the balance sheet, saw a great improvement to our justed net debt to EBITDA. As a result of that, we've got a lot of free cash flow cushion. We are investing at a record pace, both in customer growth and in our networks. As we've explained to our investor base, that's not a forever rate

of investment. Right now. We're repositioning the business, we're penetrating with fiber, We're improving some of our internal processes to take costs out. Those will start to yield dividends back into our business in terms of better operating performance and better operating leverage. As we've characterized for the balance of this year, we'll have plenty of room to cover the dividend, and we have plenty of room to invest in this business at a robust clip moving forward. We feel very

comfortable about that. You had said you were considering raising prices again. Are you still considering raising prices and if so,

by how much? And when, Emily, I think what I said, is that any company that gets into an environment where there's extended high inflation rates has to be aware of running both sides of the equation, not only being vigilant about costs and trying to make sure that they're on a perpetual cycle to take costs out of the business, but also being aware that if you're in a long, extended inflationary cycle, sometimes you have to work the revenue

side of the equation too. And you know, we did one of our first actions earlier this year, and we I think frankly engineered that as a win win for customers. We did have to take some prices up, but we're also able to give the customers some more value is we took prices up some new features and plans and services that they could migrate into. UM I don't know what the next twelve months has in store. If it extends on while we see nine percent inflation, will we

have to consider psibly some other actions on pricing. I would say that's not off the table right now. We haven't made any decisions around that, or we don't have any specific plans. Curious, if you think this is an industry wide issue, would you be surprised if T Mobile and Verizon don't see customers putting off their bills. I don't know what T Mobile and Verizon is going to report.

I know what I reported, and I know what our data is, and I can tell you that our customers, you know, basically have extended their payment cycle by about two days. And as I said, I'm not concerned about that given past history. I'm also looking at a relative to pre pandemic levels, and it's not grossery grossly out of line with pre pandemic levels. Um, what I can tell you is a T and T is kind of

a mini microcosmos society and our customer base. I would think what we're seeing is is kind of representative of the broader economy. But I don't know that for a fact. I just know the data I've got on my customers. All Right, You've got a twenty three state footprint in fiber, and I know one of your big ambitions is to make a T and T the best broadband provider in the United States. The competitive landscape is changing here and fast. Are you looking to buy or build beyond what you've

done so far? You know, it's it's a really good question. Emily. I think they'll put this in perspective. From January of this year to this today, as we've reported, we've grown over two million connected locations on our fiber network and we're now at eighteen million connected locations. We are the scaled fiber provider in the United States, and we are building at a rate faster than anybody else. It's deploying fiber. Our organic growth is what's powering this business right now.

Our ability to muscle supply chain, the resources and the capabilities to go out and build more infrastructure, and that is really the foundation of what we need to do moving forward. There are other people that deploy fiber in the United States, frankly, most of them are subscale compared

to us. And when we're having this success for having doing the things that we do well, engineering grade fiber networks, learning how to penetrate them quickly, working through this on an organic basis, frankly, is is probably the right play for us right now. Now. A T and T got out of the media business with a big sale of Time Warner, and since then we've seen streaming giants media companies really struggle. What did you and A T and

T ce that for example, Netflix didn't. Oh. I first of all, I think Netflix is you know, to be praised and admired for what they've managed to create as a business. I mean, they've been a very successful company, and they have built a new model that will be the dominant model of distributing entertainment content and and all

consumption of video content for a decade to come. And what I would tell you that I think we viewed as sibly being a little bit different and a little more quickly is many times I said I felt it was really important that these streaming platforms have a two sided model, both subscription and advertising. And you know clearly reports are and the company itself has said Netflix is going to actually start to introduce advertising in their platform. I frankly think that will be good for them over

the long haul. It allows them to start thinking about other types of content, like sports content that really does need to be alongside advertising in order for it to be a viable and economic approach. But they had a great valuation and it's been tempered a bit. Um. My point of view on streaming is is not that it's

a bad thing. I think what I would like to see if I were in David zaslav shoes is that he moves a little bit closer to their valuation, and maybe they kind of came down to a more realistic valuation, and all things considered, I think it's going to be a strong and viable business moving forward. Is ultimately the early innings of the shakeout and we get into a steady state and I think David and Warner Brothers Discoveries

well positioned for that. And do you think that the shutting down of CNN Plus was was the right move based on what you knew? I don't know. I wasn't in the room at the time. You know, David has after the transaction closed a lot of different you know, considerations, his own strategies as to where he wants to take the business, his own decisions on how he wants to

allocate capital. I'm not party to those conversations. I don't know what they were, and I'm sure within that context he made a decision that he felt was best for the business. So one last question, John, to wrap this up. You know, we also saw your business segment a little week and I'm wondering what other companies should be looking at for signals here in your report our business is pulling back more broadly on spending and should that be a warning sign about the economy? You know, I don't

think so, Emily. I think in our circumstance, you know, we have a very unique position and in the business market, we are the largest provider of services the large complex organizations,

and that's an envied position to have. But they're also the businesses that are going through the fastest rate of technology evolution, and they are orienting themselves away from traditional networks that used to be operated and managed exclusively by companies like us, to software defined networking, which ultimately shift some of the capabilities either to the company itself or

into a hyper scale or environment. And that changes our role in those particular companies, and that's why as a business, we're pivoting away from our strong position on the enterprise side. Will continue to service those customers and meet their needs in the way we can match them, but we we really want to strengthen our position in the mid market, and our brand is very well positioned to do that.

They're the types of customers you still need our expertise and our owned and operated infrastructure to run their companies, and we're under penetrated there, and we have an opportunity for a great amount of growth as a result of that. So I don't think it's a weakness in business. In fact, I think networking is getting more and more important, both mobile and fix for all business customers. It's more of a pivot on technology and how we're positioning our company

to line up against that. Interesting. All right, A T and T CEO, John staying key, John, great to have you here on the show. Thank you for taking the time, Thanks for having me and Emily. All Right, coming up a probe into one of Tesla's highest ranking executives and a number of employees already fired this according to Bloomberg sources, we'll talk about their role in a so called secret project, a scoop from our own ed Ludlow. Next, this is Bloomberg.

One of you La Musk's top lieutenant, the executive that runs Testla's Texas factory, is now the focus of an internal investor stigation. According to Bloomberg sources, Tesla is looking into omed off Shar for his role in a plan to purchase hard to get supplies that warrant for Tesla. Bloomberg's Ludlow broke the story, He joins us. Now, so ed, who is Omed Afshar and what did he do? Yes? So,

Omed af Sha is Elon Musk's right hand man. He used to be executive assistant, then he got promoted to be the director for Projects of the Office of the CEO, and more recently he's basically overseen the construction of the Austin plant Giga Texas and now production that's taking place there. And according to sources, internally the finance group and Legal Audit are looking at a procurement order from earlier this

year for some glass. They want to know what the glass was going to be used for and if Omed Afsha knew about it or not um And ultimately, according to sources, one of the questions being asked was is this glass going to be used by Elon Musk for a personal project? Personal use in other words, not for Tesla's own construction or a building associated with Tesla. So what are we thinking here? Was this for an outside quote unquote secret project or a secret project for the CEO? Yes,

so we don't know. Sources tell us that omedaf Shar instructed some Tesla employees to generate this procurement order this PO and told them literally that it was for a secret project. Beyond that, we don't have much more information.

We know that the PO has generated much earlier this year, um and that the consideration of the suspicion around it has been in place for a number of months, through first Tesla's finance and internal audit team and more recently their head of legal David soul who was kind of looking into this and also looking into Ohmed's involvement. A number of other employees, according to your reporting, I've already

lost their jobs over this. Is Omed off Shar You know, is he going to is he going to keeping at the company? Is he going to go on a leave of absence? So what we've been told according to sources is that people have been fired in connection to this, and we're told by sources that the consideration right now is that om Dasha will be put on a leave of absence. We don't have any timing of when that

will take place. We of course asked elon Mask Tesla representatives for comment about this, and we haven't heard anything back. So we don't, frankly know what Tesla's position is on all of this, or you know, the latest that's happening inside as of this afternoon. But that's what our reporting is. Okay, I'd lead though big scoop from you. Thank you, will continue to follow your reporting. Welcome back to lovone. We're

technology and emily changing in San Francisco. This week, Apple published a sixty page report detailing us for into the health tech business. This well, Amazon has been building its own healthcare presence over the last few years. Now, Amazon's latest salvo buying a primary care provider, One Medical, and in all cash deal value at three point four nine billion dollars. One Medical operates one and eighty two medical offices in twenty markets across the United States are Bloomberg

Deal's reporter Michelle Davis, joins us now for more. So obviously we've known about Amazon's healthcare ambitions. This is an interesting turn, though. Why is Amazon buying One Medical? Yeah, so this is Amazon's third biggest deal after Whole Foods

and MGM, and uh. With this deal, Amazon gets you know, access to One Medicals, hundreds of thousands of customers, it's relationships with employers, the app, and uh, this is Amazon really an anti Jazzy You know, Amazon's new CEO really trying to make its mark and and really pushing into healthcare in a big way. They had bought a pill pack, you know, they were offering some virtual care through Amazon Care, but this is them really getting deep into the primary

care market. Um. The deal took some people by surprise, but I think, you know, knowing how good Amazon is with like manipulating data and analyzing it, um, it'll be really interesting to see what they do with One Medical. You know, how they use the Whole Foods channel, if they you know, combine some of those things to offer I don't know, memberships or like services where you could get i don't know, blood pressure checked at Whole Foods or something like that. The way that you could deliver

or return on Amazon package at Whole Foods. Interesting. Wow, never thought of that, which brings me to my next question for One Medical customers, what's going to change? So there aren't that many details that we know so far about what Amazon plans to do with One Medical. We do know that One Medical had been burning cash pretty substantially.

It's stock, as you probably know, you know, has been has been on a roller coaster over the past few years since the I pod, And so what this will do is help it expand a little more quickly UM and uh, you know, probably push into new markets. But beyond that, we're still waiting on more details from Amazon about what it plans to do. Meantime, you've got Apple touting its own health tech offerings. Is this is space an area where you expect to see M and A

potentially pick up. Definitely, there's been a huge trend of you know, healthcare companies and tech companies converging. Last year Loan we saw two mega deals with cern or Oracle buying cern Or, a health records company, Microsoft buying Nuanced, a data company. A lot of these deals are about UM access to data UM and so you know, and

Google has also signaled ambitions into healthcare. It obviously has devices I do think and and you know, the people I've talked to say that this is going to continue, especially now that Amazon has made this big push. It's a signal to the other tech players to you know, do something to to punch back. All right, Michelle Davis, will continue to watch your reporting on this. Thank you.

I want to stay with this story. Now. I'm bringing Christina far principal investor at Omer's Ventures and a former health reporter who had been reporting on Amazon's ambitions and healthcare for years. Christy, A lot of people didn't believe you that Amazon was really going to go deep here, and here they are. What do you make of One Medical being added to the portfolio? Oh, it's just absolutely massive news, Emily, and it's really a long time coming.

I first started reporting on Amazon having ambitions in the space back in UM pharmacy was really the first leg of the stool. And then you saw them tackling telemedicine with Amazon Care, and now they've moved into primary care with One Medical. UM not not only primary care in the sense of consumer cash pay primary care, but One Medical has networks and relationships with lots of employers across

the country. They have their own medical record that they built from the ground up, so they also have healthcare software that will be amazing for Amazon to access and no doubt kind of part of the reasoning behind this deal. UM. So, I think where they go from here, they're really the sky is the limit and I could see them integrating all of these offerings into something very powerful. What exactly does that look like to you? I mean, are are we going to be getting our blood pressure checked at

Whole Foods? Do patients even want that? I think all of these things are absolute, you possible. I mean, what they've fundamentally recognized here is that the future of healthcare is hybrid. It's not just tell the medicine. It's not just virtual, and it's not brick and mortar either. It's something in between, because you can't really do everything from home as much as we would love to. Um, But eventually you will need to go somewhere to get your

blood pressure checked if you need it. Um So, yes, that's a possibility. Blood pressure checks at Whole Foods? Why not? And you know, while we're at it, I could absolutely see Whole Foods expanding deeper into pharmacy as well. Um So. I just that's just one of the kind of many directions that they could go with this with this buy up um, I think at the end of the day, how I see it is fundamentally about Amazon's obsession with

the customer. And they've been saying this four decades now, you know, first with books, and then they moved into other areas of retail and so this this just seems so obvious to me because it was really the last piece of their retail empire that they hadn't conquered healthcare um, so now you know they're they're signal to the industry that this is something that they are moving into and they're deadly serious about it. There have been some compar

Harrison's to Kaiser here. Do you think that Amazon could could potentially be a competitor to Kaiser? It's a great question. I think of Kaiser more in the sense of, you know, imagine if Kaiser was starting today, what would they build? And that's really kind of the question that Amazon has in front of them. They wanted to be one of the most innovative healthcare care delivery companies. What would they do?

And I think that involves having it all, having you know, the pharmacy piece, the lab and diagnostic piece, having that that primary care piece as well, and then I think to you about what they could do with the referral networks that they're building with with health systems. How do you send patients to the right care at the right time. And that really is the promise here, Emily that that for years the space has been talking about building a

true front door to healthcare. You're a patient, you need help. What do you do next? How do you access care at the right price? And I think that's really what Amazon could do, and they could be the first player to do it. Well, it hasn't all got and write Amazon. For example, that JP Morgan healthcare venture with Berkshire half of the way collapsed, it didn't last very long. Meantime,

you've got Apple pushing into this business. You know, how do you see Amazon differentiating itself from let's say an Apple. I mean, just yesterday we were asking if Apple might buy Peloton, could that be um something of interest to Amazon as well? I think Peloton could be of interest to both companies. Um. The difference I see with Amazon though, is they could really do something in actual healthcare services and delivery because they're not afraid of low margin businesses.

When you look at some of the big tech competitors, they're used to kind of sas like software margins. And with Apple, it's it's a hardware play um at its core, So it doesn't make as much sense to be in the actual provision of healthcare that it might for Amazon, which is really a supply chain and logistics company. UM. So, I think Amazon really has the biggest promise here of all of the big tech companies to to do something

very real. Um, and then you mentioned Haven, which is a great point, and that that was not a successful ventia. They teamed up with two other big employees that try to do something in that in that space. But to me, you know, when I was back at the NBC and this roll was unveiled, it was kind of felt like a little bit of a distraction that maybe the real, the real healthcare push would happen behind the scenes. And I think that's exactly what's happened. All right, Christina, far

really interesting to hear perspective here. We'll continue to watch where this goes. Investor at Omer's Ventures, thank you for joining us. All right, coming up the energy crisis and bitcoin mining. We're going to talk to a mining giant or scientific about why it had to dump most of its bitcoin holdings last month. That's next. This is Bloomberg. It's time now for our crypto report, and Bloomberg has learned US authorities have arrested a former coin based product

manager in an alleged insider trading scheme. People familiar with the matter say, is Sean Wha He leaked insider information to help his brother and a friend by tokens just before they were listed on the crypto exchange. I want to bring in our crypto contributor Snale Bostic for more

details on this story, Shanali. What happened? Yeah, this was just a massive bloomberg scoop here, Emily, and you have both federal prosecutors as well as the SEC taking a look at what happened here at coin base with an employee who helped oversee listings allegedly tipping off his friend and brother. Here about listings, remember when listings of tokens happened, that intends to improve liquidity of those tokens and therefore

is quite material here. I want to point out this quote here from the Damien Williams of this um of the Manhattan US Attorney's Office, and he's really saying that this is a further reminder here that Web three in particular here is not a total law free zone. So in addition to the SEC here, you now have federal prosecutors taking a look at insider trading against the first

time in crypto currency. So certainly a landmark case that affected a coin based employee and coin base itself has taken a look at the issue themselves, fraud as fraud as fraud there from the Manhattan US attorney. Okay, coin Base has been under pressure already because of this crypto route, which, by the way, where are we in the markets today? Things have actually been looking green, They have been looking in green. We are flipping to the green here again

after a couple of days of weakness. And remember this is a month where you've seen crypto actually jump once again after declining ending the month uh, ending last month less than nineteen thousand dollars in the red. Really, we're really had seen a really deep sell off in crypto winter, but you are back to seeing gains now back above twenty three k. Remember it started last month above thirty k, about thirty one k, So we have a while to go before recouping all of last month's games, but we

are indeed to your point climbing back. All right, Shanali, thank you, hang on. I want you to join us for this next conversation because we're going to talk a little bit more about this and the impact of the crypto winter on crypto mining. Mike Lovett joining us now. He's the CEO and co founder of course, Scientific, which is one of the largest publicly traded blockchain data center providers and miners of digital assets in North America. Mike,

thank you so much for joining us. So, first of all, what's your take on what's going on in the crypto markets right now? Obviously we've seen a lot of red, We're seeing a bit of a turnaround. Now. Nobody knows if this is a long term, sustainable rally or if this is just a blip. Um, I know it's hot where you are, but it's certainly feeling cold. If you're an investor, what's your take? Well, first, thank you for having me, and you're right, it is hot where I am.

It's about a hundred two degrees here in Austin, Texas. Of course, that heat wave is running across the entire South. Um, what what I think I would say we really are seeing is first of all, a period in our industry that happens with many growing and mason industries where in fact rationalization and some cleansing occurs. And when you take market pressure, macroeconomic pressure, pressure on technology, and the pressure in our industries, what you're seeing is a tumultuous period

of time. That said, and Shenali referenced it. We've seen bitcoin come back a bit, and we're very happy to see some stability in the pricing of digital assets. Now we've seen bitcoin mining companies, which you know they're normally big holders, uh, selling their assets. You just dumped a huge portion of your bitcoin a month ago. Why and do you wish you didn't at this point? Uh? No,

I I can't say that I regret what we have done. Um, but we produce a lot of bitcoin every month or currently running at a pace of cooin a month, and expect for that to grow considerably over the course of this year as we continue to invest in both our servers and our infrastructure. There are a couple of considerations that are axiomatic when you're running a production business. One is, you make sure you have to make sure you've got

enough capital or cash to pay your bills. Wind and we produce bitcoin, but our our obligations are in dollars, so we need to make sure we generate enough dollars to pay those obligations. Second is, in these distressed or tumultuous environments, Uh, liquidity is very important. UH. If you've got liquidity, One, you both make sure that your business is built to survive. And second, it puts you in a position to take advantage of opportunities that arise in

a distressed marketplace. And so we made a strategic decision that it would behoove us to become much more liquid on our balance sheet to give us a lot more flexibility to take advantage of the situation we see in the coming months. Um. Yeah, and the coming months are some other issues too, and that is indeed, you guys were talking about it before, and it's the weather and so the heat wave that you're seeing. How is this going to continually impact operations and what can you do

to get around it? Well, you're right, it is hot. It's very hot across the south. It's very hot where I live in Austin, Texas. And as as you've probably discussed with others before me, one of the beauties of our industry is that our production can can be uh can be adapted to demand response, and so in situations like this, we quite often curtail or down power machines to make sure that we're providing the support to the grid that's necessary so that consumers and others aren't acted.

As we sit here in Texas at this very moment, we have in fact curtailed our operations for the afternoon at the request of air Cut that said, they're roughly five thousand excess or reserve megal on hours available of five thousand, two hundred to be exact, mega watts available right now for the Texas grid. By downpowering, what we as a mining industry have done is provided more cushion to the system here in Texas. Mm hmm. And I also want to talk about liquidity because you see this

also issue affect others as well. You have Tesla saying, for example, that they're selling shouldn't be seen as a verdict on bitcoin, but wasn't a concern about liquidity of the company overall. But this is so soon after Elon Musk also said that Tesla had diamond hands. So how do you reconcile both things. That's such a large believer and a corporate buyer of bitcoin. Really it could now

have to sell because of the broader market issues. Well, it's although I don't know Tesla's finances, intimately, I do happen to own one of their cars, and my son was smart at me. And it happens though in their stock. But that said, I think it's a smart business move to get more liquid in an environment like this. As I understand it, both Ellen personally as well as the

company continue to have considerable holdings. But as I said, we decided that it made good business sense to get more liquid, and it seems that Tesla decided to do the same. These markets have been moving very quickly, the conditions have been very uncertain, a lot of volatility, and so I understand why they would decide to create a little bit more cash on their balanchie All right, Mike Lovett, CEO and co founder of Core Scientific and our own

Chinali boss. Really interesting, Mike, thank you for joining us. Amazon is starting to deliver with Rivans, electric vans. Amazon has a major investment in the electric car maker and plans to use at least a hundred thousand of its vans in the United States are at Bludlow sat down with Amazon's vice president of transportation to talk about the partnership.

By the end of the year, we're gonna have thousands of electric vehicles delivering to millions of customers in over a hundred major US Now, our focus really is an unsustainability. Now we bogner with Rivian because we really believe that this shed and our mission around decoganization, and we thought together we could do something that would reinvent, reimagine what

a sustainable fleet could look like. Meantime, Rivian CEO R. J. Scarne also spoke to add about the rollout because our production is continued to ramp and we're building more and more vans. Simultaneous to that, Amazon's ramping the number of their centers that can accept and gjest all these vans. So that's everything from charging infrastructure to making sure the drivers already. So it's a really close partnership as we

plan out. You know what it looks like when you go from hundreds to thousands and tens of thousands to you know, a hundred thousand bands within their system. How is the ramp of riv and Prime Bang going. Because at the same time you're ramping all one T introducing all one S. Is the van experiencing the same supply chain issues that tema vehicles have. The demand and the consumer vehicle are are similar in that they have the

same core technology backbones. So right, the electronic stack, our network architecture, elements of the propulsion platform, but obviously the rest of its very different the body of the interior, so in some of the areas where we're constrained, like semiconductors, that has been a challenge over the last six months. But with regards to the way the vehicles are produced in the plant, we have two separate lines, so it almost because has two plants housed on the same campus.

And so the the R one line produces the truck and and now our sub um and the commercial vehicle line produces this the seven cubic foot version of it, and then there's also a narrower and shorter one, this we call the So launching four different vehicles on two different lines over the last six months is has certainly been challenging with this, uh the supply chain backdrop of course, with the pandemic backdrop, but the teams have really come

together to deliver on that. We've been hyper focused on ramp uh you know, living in the plant so to speak, to get the production RAMPDUP and we're we're excited about the back half of this year. Amazon is a glible company and they operate in jurisdictions outside of the US. Do you see a future where rivan manufacturers bands in the markets where Amazon would hope to deploy them. Yea.

To start, we have our production facility here in UH in Illinois, now far from here, no file, but as our commercial business scales, of course, will have to ultimately have multiple plants producing commercial dands and to really go into those other major markets, having localized or regionally localized production is key. So as you think about Europe as a market in the long term, will certainly have to

purt production. Art Bloomberg has reported that Rivian is considering around of layoffs or reduction in force, that those roles will be outside of manufacturing, that the folks building the actual stuff. Have you made any progress on that and what is the kind of thinking that. Yeah, that One of the things we've talked about even in some of our earnings calls, is the need for us to be hyper focused on the right set of objectives given the

economic climate that we're in. So that's ramping our R one t R R one s our commercial vehicles in our normal facility, that's developing and launching and ramping O our two platform. That's building out all of our go to market parts of the business. UH and importantly, that's also driving profitability into the business or driving a level

of cost efficiency. And yet so we've gone through the rationalization of all the different things we're doing and has created operatornies for us to more efficiently structure parts of the team, and we're working through that process. These are some of the hardest decisions, you know, a leader has to take in in running a business, and certainly we're trying to be as intentional and as thoughtful in terms of what that means for the business, what that means

for individuals as we work through that process. But as you said, this doesn't impact our manufacturing teams. This is really more heavily in some or other aspects of the business. We're ving CEO R J. Scridge there with our own ed Ludlow. You can catch more of that interview, of course at Bloomberg dot com. And that does it for

this edition of Bloomberg Technology Friday. We're gonna be talking everything Crypto bit Y CEO Matt Hogan will be joining us, including a discussion about their potential lawsuit against the SEC. And don't forget to check out our podcast that's always wherever you get your podcast. I'm Emily chanting in San Francisco. This is Bloomberg,