From the heart where Innovation of Money and power.
Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Live from New York and San Francisco. This is Bloomberg Technology coming up. TSMC SAWS as the chipmaker hikes its revenue outlook, AI hardware exuberance is it back?
Plus Meta's new effort to stop set stortion across Instagram, a first look at the campaign Mate to keep Team safe across its platforms.
And Amazon embraces nuclear power to insurance AI energy needs and met awsco joins US Live with details on the clean energy effort. But first I've got to check out the TSMC trade.
D Yeah, TSMC is off top story Taiwan Semiconducts and Manufacturing. These are the ADRs the US listed shares.
They are up big.
In fact, the shares are trading at their highest level since nineteen ninety seven, when they first started trading in the United States. The outlook for revenue growth for twenty twenty four is boosted about thirty percent in dollar terms. And the big picture, Carro, is that we kind of feel better about the outlook for the chip industry in general,
why TSMC is the contrat manufacturers to the world. They make the most important chips that we care about, namingly those high performance GPUs in the AI context and.
Post ASML, we had a lot of anxiety around hardware and chip making, but doesn't seem like it's there right now because most Peter Elstrong can join us from London for more and Peter just give us that context. What TSMC manages to prove to the market that really echoing in video the demand is insatiable.
That's right, Kirolin, As you alluded to, all eyes were on TSMC for this ASML report. The Dutch equipment company came out and it said that bookings in the chip industry were only about half of what analysts had been expecting. And that really started the industry and Vidia stock was down and everybody was wondering who is the weak player in the industry, which company is, which chip company is struggling, And now we know it's not TSMC. TSMC has done
very very well here. They boosted their guidance, they beat earnings estimates, and they reassured the market really that demand for AI in particular is very very strong.
At this point. CC way.
The CEO got a lot of questions in the call after results about that, and he said that the demand is real. He called it insane at one point. He said, it's very very strong at this point. So that's there's a reassurance play that's going on here too.
Piter TSMC boosted its capital expenditures outlook for twenty twenty five.
Why is that important, Well, it's partly important because ASML is the company that sells the chip making machines to all these companies. TSMC is the most advanced producer of these chips, and so there's a question about who's going to buy these machines from ASML and then others in the industry. We know that a couple of the key players are struggling right now. Intel and Samsung are both having quite a bit of trouble. TSMC appears to be
doing very well, partly because of AI to Nvidia. They also supply the chips to Apple, which is trying to sell its phones in part because of their AI capabilities.
So we're seeing this.
Bifurcation in the market right now where you have some week players, some struggling quite a bit, and then you have some like TSMC, like in Nvidia, like s Kahnix in Korea too, that are doing very.
Well, and TSMC committing to capital expenditure globally. Right they're going to be building out manufacturing, not just in Asia where you usually sit.
That's a very important point.
For many decades, TSMC only produced its chips within Taiwan. It felt it was easier to kind of concentrate all its production in one place. And over the past few years we've seen that business model really evolve where they've been asked by the US, by Europe, by Japan too to build these chip making plants in their domestic markets, probably because of the supply chain sharks that we saw
during the COVID pandemic. While these countries want to make sure that they can get those chips, TSMC is the best chip maker out there, so they want TSMC to come to the United States, to Japan, to Europe and beyond to try to make those chips and make sure that they're being produced locally.
So far, that model seems to be working pretty well.
Bloomberg's Peter Elstrom, who's the executive editor leading our tech coverage from Asia, hours into Europe, now into the US, and by the way, one of the names up big on the same logic is in Nvidia caro another top story you've got.
Yeah, look at Nvidia at a new record high. Let's switch to Apple now, because secretly it had worked with Chinese auto make a BYD four years. According to Bloomberg's sources, the tech giant partner with BYD to develop long range EV batteries as part of what it's now canceled car project Nimbos. Gabrielle Coupler is with us and Gabby the context here is a wonderful big take that you have going into the BYD success story. But just take us to the Apple relationship and would it helped BYD.
Achieve sure, thank you.
You know, I want to be clear, I think this was really a two way street, you know. I think BYD and like a lot of battery makers in China had been working with the new chemistry called LFP lithium iron phosphate and they had made a battery cell that was really impressive in terms of its safety metrics, its resistance you know to fire risks, but also could hold
a lot of energy. Meanwhile, Apple was working on the Apple car and they were working on a design for a pack to have an EV they would have maximum range. That was one of their kind of key targets for that project. And these two companies came together from about twenty seventeen to twenty twenty and kind of put their best and brighters together to work on a battery that would be best in class for the Apple car. Now, ultimately, as we know, Apple pulled the plug on that project
earlier this year. Meanwhile, BYD, which took that you know work that hit it, are you know its own IP. I want to be very clear, BYD did comment to us that there is no Apple IP in its own famous blade battery. But today you look at all the cars that BYD is selling, every single one of them has this blade battery in there. It was a game changer for the company. It's what helped them improve their sales really rocket from being kind of a nobody and also ran in the China market to being the number
one in the world's biggest car market. And what my colleague and i am Mark German, uncovered is that there was some influence from Apple in that journey. I don't want to take away anything from BID because they themselves are a very innovative company, but we did the world did not know. We thought this was all something that went on in the labs and BID and Shanjen, and that's not the case. There was a lot of collaboration between Apple and BID.
Right, really important piece of reporting about BYD's prowess in batteries and history and batteries. And then there's the electric vehicle side, specifically in the cheaper categories, and that's the whole point of the big take thought. With the basics, what is the conclusion you reach about BYD and it strides globally.
I would say that my biggest takeaway from reporting this story over the last few months is that if you want to understand why BYD is the biggest car maker in China, why they can make cars that are have such impressive technology and yet such a low cost that truly terrifies auto executives all around the world, whether they're in Tokyo, Wilsburg, or Detroit, you've got to understand that
the story is much more complicated than subsidies. Obviously, right now we're in the middle of a really intense period of trade war and tariffs with the US and China, with Europe, and China. And there's a lot of rhetoric going around about, you know, how subsidies or what's making these companies grow, and I don't want to deny that at all. China is not a free market economy. The level of subsidy. People always say, yeah, well the US
has subsidy two or the EU s subsidies two. That's true, but the scale of subsidies in China is much greater than any other freemark market, democratic country. So having said that, if it was just subsidise, you would see twenty buids, whereas there's only one. And that is really a testament to the innovation, the engineering breakthroughs, the determination, the kind of stick it to it. This of the founder, Juan Chuanfu, And that's really what I try to tell in this story.
Bloomberg's Gabrielle Coppola, thank you so much for joining us on Bloomberg Technology. Now coming up, Instagram sets launch a new campaign meant to keep team safe from sextortion scams. We have metas head of Global Safety here on the program. This is Bloomberg Technology.
Now let's turn to Instagram, whose parent company Meta has today launched a new campaign meant to help protect teams on its platform. The campaign raises awareness of sextortion and includes this.
Ad Let's talk about sex stortion. That's when someone threatens to a expose a sexual image or video to get you to do something like send money. Here are some red flags to look out for someone coming on too strong, asking to trade photos.
Or move to another app.
I had to talk more about the changes is I'm taking any Davis Physic, Global head of Safety for Meta and it's not just the ad campaign or crisis line, but there's also product features updates. Can you talk us through them?
Yeah?
Absolutely.
I'll give you three of the most compelling features. So one is the prevention of screenshots. So if you send a view once image or video, we're going to prevent somebody from screenshotting that image or recording that video. That's important because you're sending a signal that you want to protect that image and you don't want someone sharing that with somebody. The other is blocking the follow requests of potentially scamming accounts.
This is important because we already block.
Suge requests even from just unconnected accounts for teens, but we want to make sure that we're closing down the avenues for these scammers to try to find teens on the platform, and then the other one is hiding the follower and following lists of teens from these potential scammers. The reason that's important is because once they have that image, they threaten to share with a friends and family that they find on those lists.
And TIGGINGI why is the campaign being launched today and not previously a year ago when data showed spikes in this kind of activity that you're now trying to prevent and crack down on.
Yeah, thank you very much.
This is building on initial additional protections that we had already launched. So recently we launched teen accounts that put teens automatically into private accounts and have our strictest messaging restrictions. This is taking it another layer out and it reflects a change in the crime. It's moved to becoming a financial crime where people ask for more money, and with that, there's been a spike of this across the Internet.
And taken how's the technology changed if there's a change in the crime. What my colleague Olivia Carville reported, for example, was in the case of Facebook in Nigeria, for example, technologies used to as accounterance to suspicious activity. So you have the video which we showed, But what's the role of technology here.
Yeah, it's a very very good question.
The technology tries to identify potentially scamming accounts, and they'll do things like they see a new account that.
Sends a lot of follow requests to a.
Team that is outside of the teens, that are outside of the area where that initial individual is messaging from or following from.
Those are the kinds of signals we use.
We use a large range of signals to identify these scamming accounts potentially scamming. They're not scamming if they're scaming, or we're going to remove them, but potentially scamming accounts.
You'll of course helping hide from these potentially scamming accounts. Why not let a teen just hide full stop their followers and who they follow.
Well, it's a good question.
These are features that are important for connecting and finding the people that you're interested in, and we want to protect those valuable features for enjoying the app, but we want to find ways to make sure that they can't be exploited by these scammers.
You, I'm sure face countless questions and indeed, your company and others face countless lawsuits now from families, from authorities that feel that what you offer in social media is harmful for children, whether indeed it's sextortion or indeed addiction. How are you fighting those fights? How do you feel that it's coming to you at a lawsuit perspective.
Well, from my perspective, the thing that's most important is to listen to parents and understand what it is that they're worried about and make sure that they feel that we can that we have the protections that give them the peace of mind.
So we know, for example, parents.
Are worried about the amount of time that teens are spending on the platform. So when we launch teen accounts, we've now created it so that between ten pm and seven am, they're not getting notifications to their account and we're sending an auto apply saying hey, this is time for sleep and tikenny.
I'm interested in the audience you're trying to protect and how they use the technology you have. The family of apps largely smartphone centric, but sometimes they're accessed through a web browser right on the computer. How do you adjust your technology and your policy for that, How people actually access your applications.
That's a really good question. One of the things that I can give you an example of is for screenshotting, So we are now preventing screenshots. As I mentioned, for certain types of image sharing on the browser, you can't really prevent that screenshot, so we're just preventing them from actually sharing seeing the image.
I go back to the point that you say you're listening to what parents and I'm ge I'm sure some teams are saying to you, what about as you see these legal efforts proceeding, do it in your heart of heartsfield, enough is being done for the parents, for the teams using it? And do you think the legal way in which they're pursuing the claims is the right way for them.
To try and make change.
I think one of the things that parents are struggling with is a set of standards that they can understand for assessing whether their team should use a particular app. One of the things that we've been pushing for is legislation that would require the operating system or the app store to provide apps like ours with the age of the user. That would enable us to ensure that we can provide an age appropriate experience, and they could also set it up so that parents can not approve of
an app download if they want to. These are the kinds of things we need to make it much simpler for parents.
I'm Tikenny Davis thanks to spending out some of the changes for those parents and teens. Today, head of Global Safety for Meta.
Big Tech is going nuclear in order to secure the energy needed to fuel AI. Here's what Google's senior director of Climate and Energy told us yesterday on Bloomberg Technology.
The world needs more carbon free energy and this agreement that we've signed with Cairos is an important milestone in what's been a fifteen year journey at Google to make the transition to clean energy. It's our first nuclear energy deal, and we feel that nuclear is a very important technology for going carbon free for officers, data centers, communities where we operate because it's an always on carbon free energy resource.
Google's not the only one. Amazon also announcing half a billion dollar investment in nuclear clean energy. Here to discuss it, Matt Garman, CEO of AWS, and Matt, welcome back to Bloomberg Technology. It's so interesting to see that. Thank you to see the hyperscala Is so focused on this. I think we start with y SMRs, right, that's a very specific avenue to go down.
Yeah.
I think SMRs are a great new technology and they're an important part of the energy landscape that we're looking at. We made a five hundred million dollar investment in a company called X Energy that are really I think they're one of the leaders in this space, and they're really pushing on the technology SMRs.
They have a couple of advantages. They're able to be.
Constructed in a smaller footprint, which means you can put them closer to where the energy needs to be. They're also incredibly safe and easily manufactural, and so they're very promising technology and we're quite excited about our investments in this space and the partnerships that we have coming up.
Small modular reactors SMRs For those getting in the acronym lingo, Matt, it's great to have you. What about other deals, I mean, is this the first of many?
Yeah, and so a couple of details on the things that we announced yesterday. One, we have this investment with x Energy, who's a producer of these, but we also have have announced two partnerships with utilities and so we're actually well down the path, ongoing and actually implementing some
of these deals. So we have a partnership with Dominion in Virginia to go implement an SMR as part of their energy footprint here in Virginia and with Energy Northwest in Washington and Oregon, and our goal is to deliver more than five gigawatts of nuclear energy. We think that it's a fantastic opportunity for us to keep pushing on the carbon energy footprint that's needed as we continue to scale around the country.
Matt, if you're well down the path and based on what you just said, do you have a clear line of sight on what the dollar per mega what hour is going to be out of those facilities.
We don't know that yet.
We're still we are still early and we're still learning many of these technologies for these reactors or probably won't come online until twenty thirty, so we'll still be learning there.
But we feel that as we.
Scale and in the fullness of time, these energy are going to be quite competitive from a cost perspective, and it's one of the reasons that we're so excited about them.
Would you bring back a full nuclear plant like three mile Island in Pennsylvania. And if so, which.
One, well, I wouldn't have done that one in particular. But we actually have a partnership with Talent where we're bringing more energy online in Pennsylvania, and that's we're actually the very first company to announce a deal with Talent several months ago. And so I think that some of these large nuclear plants are also excellent source of energy
and they're an important part of that. As I said, I think small modular reactors are going to be a component of what we need for a carbon free energy world, but large nuclear plants are going to be an important part of that too. And we've said that we'll take as much as almost a gigawot of power that we're bringing back online from this large plant in Pennsylvania, where
we'll also be building data centers nearby. So I think it's all an important part of the portfolio as we move to decarbonized the energy.
Let's talk about the decobonization, because back when you announce that deal in March with Susquehanna, you talked about how still the aim is to be by twenty twenty five one hundred percent renewable energy. Is that attainable with a sudden desire to have AI and the energy that goes with it.
Yeah.
In fact, we announced that this year we hit one hundred percent carbon free energy in our systems, and I think that now our goal is how do we, as we look at all of the energy demands that the business and the world frankly needs, how do we get to a continued path on growing carbon free energy. And so that's what a lot of these deals are about,
is for the future. As we look at power that we're going to need in twenty five, twenty seven, thirty, twenty forty, how do we make sure that we have a ramp of power so that as the energy needs grow, whether they're from electric vehicles or from companies increasingly digitizing, or from generative AI, that we have enough carbon free
energy to support them. And so it's really a long term view that we have, and part of this is is on that long term view, how we continue to have enough power well into the future.
Let's talk about.
Short term view if we come for a minute, Matt though, because right here, right now, do you have the power that is necessary from the places you want to be getting it from.
We work really hard to make sure that we do.
Our businesses continuing to grow rapidly, and we're adding new power and new data centers all of the time, and so we.
Continue we look further out.
We have power that we're adding in twenty four, power that we're adding in twenty twenty five, and continue out. And as you may have heard, over the last five years, Amazon has been the single biggest purchaser of renewable power contracts in the world every year for the last five years,
and so we continue to do that. We continue to add power to our footprint, and we plan multiple years out because these projects that we go and launch they take many years to come online, and so we have lots of plans and we continue to grow as the needs of our customers grow.
Matt, will you have any Blackwell online by the end of this year?
No.
Unfortunately, in Video's timelines have shifted on that, and so we have samples in the lab and we're working on them right now. But production qualities are production quantities we expect to be early next year. We work very closely with in Nvidia on GBUS and super excited about that launch. And in Video's own large research cluster is actually launching in AWS, so we'll have the first production qualities will be in AWS when they're ready.
But so right now we're working with them and we have.
Early samples, but as they get their yields up from the respind of the Blackwell chip, it'll probably be early next year before we really get production samples in real volume.
Another partnership, then Anthropics work on the chips. How is that going?
Briefly, fantastic. Anthropic continues to deliver fantastic new models. Their Sonnet three to five model is one of the most powerful ones that is out there today and customers are really enjoying using it on a variety of tasks. I think the reasoning is industry and world class and a bunch of the capability that enterprises are able to deliver and the value they get from those models is really right.
It's fun to watch and we really enjoy that partnership and we continued expected to go for a long time.
Matt Carmen, AWS CEO, we appreciate your time. Thank you. Welcome back to Melumow Technology. I'm carolinehid in.
New York and Imed love Low in San Francisco. Let's take a quick check on the markets and actually carried the s and P five hundred is off its session high, but at one point in the session reached an all new time high on an interday basis. Technology has a part to play in that right. There are many names moving to the upside in VideA you will not be surprised to hear is one of them. And part of that is and carry through on the optimism around TSMC's
guidance that updated revenue growth outlook. We talked about it earlier, so if you're just joining us, those are TSMC's US listed shares. This is the contract manufacturer of chips to the world, and what they said is, yeah, things are pretty good. The outlook for twenty twenty five is pretty good, and it was in stark contrasts from what we heard earlier in the week from ASML, which is the company
that makes the machines that makes the chips. Netflix is down a percentage point and I flag it because we're going to talk about it later in the show. They have earnings after the bell. Maybe that's some positioning. What will we hear? Who knows?
Caro, I'm the here and now we're going to talk about AI adoption ed in the financial sector, it's rapidly increasing.
It so all.
According to a new report by AI benchmarking platform evident Now, the rate of AI utilization is actually happening twice as fast though in the top performers, the top ten banks of this index, let's dig in evidence CEO, Alexander and Musaviside is with us now and Alexandra. It does seem to be that if you've put a lot of talent and focus and energy in R and D in you're winning and you're.
Going to continue winning.
Yes, you are calin.
Yes.
We release the index today and as it's covering the fifty largest banks the in US and Europe, and we cover all of those aspects as in the looking at the talent stack and the innovation levels that the banks are pulling. We're also very carefully tracking what the banks are reporting on in terms of their use cases and their ROI and also looking at the responsible AI side.
And what we see is that the leaders are pulling ahead and leading more at double the pace of the rest of ten top ten ranked banks in the index are moving at double pace from the rest of the banks in the index, which should indicate and does indicate bifurcation in the ranking, so the leaders are leading more and the ones that are following or standing still are actually falling behind in this race.
Now, Alexandra, I'm pretty certain that social media accounts like Overheard on Wall Street and Wall Street Memes are listening to this because there are two things here, banks and AI, and in.
Our world that is everything.
So here's the question, what is it that makes a bank good or not good at AI?
Well, we look at the strength of the capability of the bank, so all of the aspects that goes into a very strong ecosystem that moves a use case from ideation to production. So a good bank is able to move that through the system. So identify where you have problems where AI can be a solution to those problems and move them into a testing phase and then into
a production of a use case using GENAI. So good bank can do that very quickly and all of the elements that are needed to move the use case into production swiftly and well and with the intended ROI have those the strength of those component parts.
Okay, So we're showing JP Morgan, Capital One and our BC and so based on your report, they are top three performers. Is it that they just hired the best computer scientists early, the best engineers early. What did they do differently to the rest of the list.
Yeah, the common denominator of the leading banks is that they went out early, and they went in big, and they reorganized the bank to look like more like a tech company, So an AI first business that has a research lab, that is attracting the best talent, that is reorganizing the bank from inside, looking at the data infrastructure, looking at this question of build versus by looking at the decision making whether that lies in the center of
the bank or it's federated, and striking that balance. So what these leading banks did is that they went out early. Jamie Diamond famously laid out then AI strategy for JP Morgan in twenty eighteen and established a research lab and really went to work on looking at how to reorganize a bank so it could respond to the oncoming technology swiftly and easily and get that time to production down and really infuse the bank with AI thinking, an AI
mindset and a nimbleness. And that is what they're reaping the benefits of now. Not that they're standing still, they're moving at double pace of other banks continuously and to spend more on AI, hire more people and continue the research and the patents and the partnerships that are delivering the impact that they hope to get from their AI investments. Jamie Diamond said this year that the ROI from his AI investments is at two billion dollars, So that's what.
Is making money. Who else is managing to see a return on investment because everyone's desperate for that.
Everyone's measuring the impact internally. Only two banks and their fifty the list of fifty are actually talking explicitly about their ROI. That's JP Morgan and that's DBS out in Singapore.
But this is going to ramp up. So we think that in the next twelve six to twelve maybe eighteen months really as AI use cases move into production more solidly and the pressure to show ROI off, that investment is going to ramp up, and the ROI is being measured internally in the banks, and we're seeing many of the banks looking at how is it impacting on non numerical terms and numerical terms. But we're going to see
a cascade of announcements of ROI. We think probably from about six to twelve months on.
Well, that's what's so interesting. On the timing of the report. We've just had banks earning season, so I guess, did you see any early evidence that gets you excited for future reports of.
ROI absolutely, absolutely, I mean it was also other factors that were going on in the earnings calls were around the rates and geopolitics, of course, but there were four banks that were asked about their AI strategy and spend and use cases and the impact is having and so Jamie Diamond was asked. There was also Ted Pick from Morgan Stanley was asked. B and Y and Bank of America were asked specifically about what they were expecting to see in terms of their AI investments and where they
see that having an impact. And Tedpick actually went into a lot of detail on a tool that they've rolled out across Morgan Stanley called debrief. That is something that they're trying to put in the hands of many across the bank, an AI service that helps manage meetings and responses and so on.
But we must.
Remember that we're in the early innings. It is a big and monumental transformation, and we're only two years in so there's a lot to come and the tools are getting better and better with much more reliability and speed. But we're looking at in the next year or two seeing what we call agentic ai come in and being tested out and being a potential tool for the banks to consider and are considering already. That's going to be a real game changer on many accounts.
So agents front and center. What are they using and they're using models? Are they building all on open ai largely?
And what are the.
Frustrations on the agaentic ai or no, Just more broadly.
What models have been deployed, are they building them from within depending on our own large language models, deploying from open ai and the competitors.
Most of the banks are looking at the variety of models out there, So it could be open Ai Anthropic
that you were mentioning before, Mistral hugging face. Every model has a uniqueness, and when you're looking at the variety of use cases and problems that you're trying to solve in the bank, there will be different types of models that need to be deployed and fitted, and then the building and the engineering of making it fit on your own data used for your own systems in a particular way that is unique for you depending on what type
of bank you are. You're at You're looking at these variety of large language models that each have their own features, but then they get bought in and then they get implemented and fitted into the data and to the system of the bank.
Alexandra are so pleased we come back to hear how this latest evident index has gone evidence CEO Alexandra, who is a visit on the latest in financial AI. Meanwhile, coming up, Unity just announced that the latest version of its gaming engineer software is out. CEO Matt Romberg joining us next. This is Blue meg Technology.
Okay. Unity releases its latest developer platform today called Unity six. It's a suite of tools and it's used by the gaming industry and professionals to create, market and grow games and VR experiences across a variety of platforms. Unity CEO Matt Bromberg joins us now, and Matt, I've come to learn in the last couple of years that loads of video game developers, publishers, and video game industry people watch this show, but many won't know what the engine is,
the tools are. Why is Unity six so important? And welcome to the program.
Thank you so much and thank you for having me. Yeah.
Union is really a global platform that enables, enables and sort of powers very large chunks of the video game industry. For example, more than seventy percent of the mobile games in the world are built on.
Top of our platform.
So it's a really important fundamental piece, and we're the only company in the world can help developers come from beginning to the end of the life cycle, so prototyping, building the game, operating the game and live service, and then going out to find users for that game, or monetizing advertising inventory inside the game.
So it's really a full suite.
And we're really very close partners with game developers all over the world, by the way, as well as non game.
Uses, right, and there are plenty.
We'll dig into the non game uses in a moment, but really, when you think about those developers, you're having to win back their trust. We'll try to focus really on being a good partner. Because you're relatively relatively.
New to the role.
The previous CEO had to leave because there was a pricing pain point. How are those relationships building, How your discussions around Unity six.
Yeah, the first five months of my tenure have been really exciting because it's given me an opportunity to fly all over the world and spend time with as many of our customers as I possibly can. I've been really really excited about how willing they are to reconnect with us. The ecosystem is really best when we do well, because you're building. When you choose, you know you're building on top of us for maybe ten or twenty years in the operating game. It's really important that you trust us.
It's really important that we deliver what is needed. And what customer has told us all over the world was, hey, we're happy to pay you more, we just don't like the way you've asked for it.
And that was the easiest decision.
In the world to reconnect with folks and find a way to charge them that work for their business and regenerated our relationships.
But there is tough competition, epic games Unreal Engine being one of them, and there's open source.
Game engines as well.
Well.
How have you managed to retain or even build on or lose market share?
Yeah.
Unity has been developing this platform for more than twenty years, and as I said, the vast majority of.
Model developers are on the platform. We already know them.
So what we have to do is do things like release Unity six right, better software, more performance software, but software that's also stable and kind of stables a rock. So if we keep.
Doing that, we feel really good about our position.
Matt.
A question from the developers and our audience is you will raise prices right over time? Just explain the cadence by what percentage and the rationale behind it.
Yeah.
So we announced that we were reverting to a very typical kind of subscription model, just very very common in the SaaS business, and we talked about making the software more available for our community, so really small users that don't generate meaningful revenue with our software, and then raising some prices on our largest customers. And it's been the news has been really really well received. As I said, not even so much because of the price increase, but
because of the way we did it. Part of reconnecting with our customers has been really spending time with them to listen to them, to test our ideas with them, and to not surprise them. And so the way we rolled out the pricing and the nature of it has again has been really well received. And we think, you know, well, we'll just revert to some annualized increases, which is as typical in.
Our industry, and you know there's there won't be uch trauma.
What's the Unity story going to be under your leadership? There was a time where Unity was like, Okay, we're going to be a metaverse company, and I get why. It seems like you're doing hard reset back to being a video games company.
Yeah.
I think one of the exciting things about UNI, but also one of the challenging things is we sit at the intersection of so many powerful forces, three D digital advertising, interactive entertainment, it's just.
The metaverse AI.
You could be forgiven for wanting to pursue lots of wonderful things, But to your point, what we've wanted to focus on is making sure that we deliver for our core customer set in video gaming. Make sure we deliver rock solid software that they can build their businesses on, that they can use to help acquire new users and
sell their advertising inventory. And to make sure we nail that so that folks trust us, that we reconnect and then you know, once people trust you, then they beget you can begin to dream and make all kinds of other investments.
Oh, other investments.
Would they be inorganic rather than organic? You looking at developing genitive AI offerings by buying partners rather than building your own.
Yeah, our focus right now is on building our own business in general. But I will say that AI is a really important piece for us. I think as a platform we're really interested.
In being able to change the economics of the industry.
So the best thing that could happen to a game developer is for us to create a tool that enables them to make games more quickly, more efficiently.
That chaine is how many games they can make and change the real calculus for them.
So as a platform developer, we use AI to obfuscate the complexity of our software and help them move more quickly.
Then that's the best thing we could possibly deliver.
We didn't hear that you're not going to buy anyone. You said you go focus on organic, but would you buy someone?
We are really focused on what we're doing right now and being better, Matt.
I want to just bring this all together. I think the question from this point is how to video games change Unity?
Six?
Great? AI great? We just want better games. Can you promise that that's going to be the case.
I can promise I'm going to tell you, well, I worked in the video game business, making video games for more than fifteen years before I got to Unity, and I know that there's a lot of talk about where we are as an industry, and perhaps you know with growth is flattening, But I think it's really important to remember that the video game business is a very big, vibrant business. It's bigger than streaming video, streaming music, and
Bible box office combined. And sometimes when you get late in the hardware cycle, you start to see some flattening as we are now. But one thing I can promise you is that the creative geniuses in our business are going to create amazing interactive entertainment.
They're going to release that entertainment.
There are going to be new platforms, and growth is going to return out to our market.
Matt Bromberg, Unity CEO, thank you so much for joining us here on Bloombog Technology. Cable companies are not only seeing a drop in TV subscribers, they're also struggling with broadband. Look at Charters broadband subscription data for the past six quarters. According to Bloomberg Intelligence, cable providers may lose up to four hundred and eighty one thousand Internet customers in the
third quarter. That would be the worst ever decline for the industry, and let's say it's due to the expiration of a government subsidy program as phone companies bundle home internet while it's offerings.
Carrot Trouble for cable providers also extend to arrival Netflix, which reports to earnings today. Shares have tripled since May of twenty twenty two, hitting a record high earlier this month. But can we sustain this? Maybe revenue growth is slowing a little bit. We've seen the password crackdowns already. Has that been priced into where we're currently standing? Pretty mugs,
Phelix Jillette. I'm not going to ask you as to whether we should be trading at this valuation, but this set of numbers fiscal third quarter do look like they're going to remain strong. Four and a half million subscribers added. Is that enough to keep us all joyant about Netflix?
Yeah?
I mean, I think for the time being, four and a half million is pretty solid growth.
It's down from third.
Quarter last year, which was a closer to nine million, but a huge run up in the side price that we've seen since May of twenty twenty two is really driven by two things. Yeah, it was the password crackdown, which has been very effective. It's also been driven by the introduction into this lower price add tier, right, and so I think that's really what to keep an Ion going forward is how many subscribers do they have in that advertising tier. How much is the advertising revenue growing.
I think a big part of that is Netflix is also you know, they're going more heavily into live programming, right. In order to get advertisers and viewers SYNCD up, you want to have live events, and the more we've seen in the past year has been you know, all this increase in live production. You had the Joe Rogan comedy special, live comedy special over the summer, hot dog eating contest.
That's all pretty small compared to I think what's going to be coming down the pipeline for Netflix in the next couple of years, which is really live sports.
When you and I were hanging out in Hollywood last week rubbing shoulders with all the celebrities and movie makers, I guess what they weren't talking about so much was some kind of crisis when we were one year ago. Are they looking to the horizon for a crisis.
I mean, I think like everyone's happy that the strikes are over, and you know, we're in the bell tightening phase of Hollywood. It feels like the major crisis has passed, but there's still production is still way down from what it was during the peak TV years, you know, in terms of what Netflix has come in. You know, I'm still curious about their gaming investments. They had to shake up in their gaming department over the summer. They haven't
had much success there. You know, they're going to point to big things, right, you know, like Squeed Game two next quarter.
Okay, yeah, plenty to get excited about in terms of the content on deck, Felix Ja let me thank you. That does it for this edition of Bloomberg Technology yet.
Yeah, good show, if I say so myself. Recap on the podcast. You know where to find it. This is Bloomberg Technology.