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AMD Says Oracle Is Pledging Widespread Use of New AI Chips · Bloomberg Intelligence

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  Speaker 2: Oracle will deploy a large batch of AMD's forthcoming m
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  Speaker 2: I four fifty chips next year.
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  Speaker 3: It's kind of like our AI story of the day.
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  Speaker 2: It seems like every day we've got one of these
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  Speaker 2: stories of these tech companies doing business with one another
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  Speaker 2: and maybe even involving some investments in each other.
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  Speaker 3: Honorag Rana, it's his job to.
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  Speaker 2: Keep it all straight here. He's a technology aneist to
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  Speaker 2: Bloomberg Intelligence. Honurag If you're Oracle, if you're AMD, is
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  Speaker 2: this just business as usual?
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  Speaker 3: Why? Or is this something new and unusual?
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  Speaker 4: The slight and usual part is that the AMD chip
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  Speaker 4: seems to be doing at parity at what and video
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  Speaker 4: chips are for this particular case. Now, I do not
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  Speaker 4: know what kind of workloads Oracle will put on it,
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  Speaker 4: so you really can't do an apples to apples comparison.
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  Speaker 4: But the story at this point is Oracle has a
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  Speaker 4: massive backlock of orders and it needs to invest money
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  Speaker 4: to get them converted into revenue. They need to open
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  Speaker 4: more data centers or rent out more data centers. They
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  Speaker 4: need to buy more chips, buy more hardware, and combine
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  Speaker 4: all that together and eventually then they're going to get
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  Speaker 4: paid for all that stuff. So they're going anywhere they
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  Speaker 4: can find chips right now, and you know, it seems
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  Speaker 4: that AMD is their next stop.
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  Speaker 5: So there are a couple of threads to pull on there.
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  Speaker 6: It feels like AMD is increasingly the number one alternative
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  Speaker 6: to invidious chips.
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  Speaker 5: We can talk about that a little bit.
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  Speaker 6: But what struck me is that there's no dollar amount
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  Speaker 6: disclosed in this deal or partnership or promise. The previous
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  Speaker 6: deal that AMD struck with open Ai just said tens
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  Speaker 6: of billions of dollars in new revenue.
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  Speaker 5: Why are firms keeping it so vague, Well.
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  Speaker 4: Because they do not know how many chips they would
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  Speaker 4: need at what point, at whatcity. This is a you know,
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  Speaker 4: it's not you know, it's it's more so signaling that
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  Speaker 4: we are not just truly dependent on in video, we
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  Speaker 4: have other options as well. It helps them with navigating
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  Speaker 4: in terms of pricing from in video. Also, you know,
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  Speaker 4: we know in video chips are getting expensive over the
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  Speaker 4: last few years, so there is there could be one reason.
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  Speaker 4: The other thing we don't know is what kind of
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  Speaker 4: workloads there are. Because we know, for the absolute best
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  Speaker 4: of the best, you you have to use in video chips.
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  Speaker 4: That's what we know as of today. Whether all of
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  Speaker 4: that changes in twelve to eighteen months, we don't know.
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  Speaker 4: But there are other workloads that may not require that
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  Speaker 4: amount of you know, firepower or horse power you could say.
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  Speaker 4: For that you may use you know, AMD chips or
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  Speaker 4: something even more inferior.
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  Speaker 2: And even yet another announcement in your space today on
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  Speaker 2: rock Salesforce, a company you've been talking to us about
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  Speaker 2: for many, many years, Salesforce and open Ai today announced
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  Speaker 2: an expanded strategic partnership.
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  Speaker 3: What's going on there?
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  Speaker 4: Yeah, So for me, this is actually a bar bigger
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  Speaker 4: news and has more ramifications in the long run. If
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  Speaker 4: you see what's been happening in the software landscape over
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  Speaker 4: the past two years, the threat is that Opening I
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  Speaker 4: will come and it will take away you know, basically
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  Speaker 4: the businesses of all the application software vendors, you know,
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  Speaker 4: whether that's Adobe workday, Salesforce, HubSpot, you name it. Because
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  Speaker 4: open ai has shown capabilities that their model can help
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  Speaker 4: out in functions such as finance, human resources, sales automations,
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  Speaker 4: et cetera. This integration between the world's biggest CRM software vendor,
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  Speaker 4: which is Salesforce, and open Ai shows that both of
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  Speaker 4: them will be working together and you know, it'll be
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  Speaker 4: easier for enterprises to go inside open Ai chargpt ask
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  Speaker 4: for what they want that gets connected to the data
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  Speaker 4: that resides in Salesforce. Makes it very easy for the
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  Speaker 4: enterprise customers to do their work as well rather than
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  Speaker 4: just going into you know, Salesforce. So I think this
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  Speaker 4: is a bigger news in the law run, but you
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  Speaker 4: know we are all talking about Oracle as well.
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  Speaker 7: Yeah.
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  Speaker 6: Open Ai announces a new deal with someone every day, Paul,
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  Speaker 6: This is kind of what you're you're getting back to.
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  Speaker 6: And this really both of these announcements are the latest,
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  Speaker 6: uh in this string of big tech building more computing
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  Speaker 6: infrastructure and meeting this demand, this and satual demand. I've
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  Speaker 6: really lost track of the permutations, Anra. What worries you
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  Speaker 6: about these back and forth announcements and partnerships and you know,
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  Speaker 6: the billions of dollars that may or may not change hands.
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  Speaker 6: Do do we think that these are just announcements that
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  Speaker 6: may not come to fruition if circumstances change, for instance,
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  Speaker 6: in the next six months.
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  Speaker 4: See from a salesforce point of view, and which is
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  Speaker 4: what I was. You know, you would say most of
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  Speaker 4: us are worried about also legacy software names. It's a
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  Speaker 4: good thing because Opening Eye is a new channel of
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  Speaker 4: communication with you know, the rest of the world. If
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  Speaker 4: you can integrate your product with them, it kind of
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  Speaker 4: saves you from getting disrupted. The question is in the
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  Speaker 4: long run and then we'll find out what happens is
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  Speaker 4: will Opening I have that much level of funding to
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  Speaker 4: keep up with all the promises that they have. They
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  Speaker 4: have given very high revenue estimates for the next few years.
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  Speaker 4: But at the same time, I mean, the rest of
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  Speaker 4: the bigger you know, tech vendors are not you know,
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  Speaker 4: just sleeping. At that point, I would say, we'll find
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  Speaker 4: out whether Opening I will be able to gain market
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  Speaker 4: share from the likes of you know, Microsoft, Apple, Google
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  Speaker 4: and Meta or Amazon, or this is going to be
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  Speaker 4: just an expansion of the overall market.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming.
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  Speaker 2: Speaking of an industry that's kind of I don't know,
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  Speaker 2: in transition, that's probably the polite way to say it
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  Speaker 2: is the auto industry. And saw General Motors today incurring
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  Speaker 2: a one point six billion dollars in charges related to
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  Speaker 2: pairing back electric vehicle productions plans due to flagging federal
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  Speaker 2: support for plug in vehicle.
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  Speaker 3: Steve Man joins us.
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  Speaker 2: He covers the global autos and industrials industry for Bloomberg Intelligence.
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  Speaker 2: Steve tell us what's in this charge? Why is GM
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  Speaker 2: doing this? And why is it and why is GM
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  Speaker 2: doing this now?
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  Speaker 8: Look, Paul, I used to work at GM prior to
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  Speaker 8: being an analyst on the South Side, And look, I
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  Speaker 8: think what GM is doing today is a little bit
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  Speaker 8: unprecedented because they're actually changing shifting that changing the direction
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  Speaker 8: of that ship around fairly quickly. You know, once you know,
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  Speaker 8: when they in the seventy five hundred dollars subsidy expire.
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  Speaker 8: You know, they knew they had a portfolio that was
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  Speaker 8: not congruent with with what they think sales is going
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  Speaker 8: to be, So they're going to have to rationalize that
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  Speaker 8: that that portfolio. They've been the most aggressive, if not globally,
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  Speaker 8: but amongst the top you know, the big three in
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  Speaker 8: Detroit in rolling out new evs. So you know they're
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  Speaker 8: gonna have to review that portfolio, maybe even ween out
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  Speaker 8: some of the lower sales not less profitable EV's going
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  Speaker 8: going forward.
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  Speaker 6: Yeah, what surprised me about this action? Like you said,
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  Speaker 6: they've been pretty aggressive on the EV front. Is Ford
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  Speaker 6: has delayed or scrapped some plug in models and definitely
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  Speaker 6: moved money away.
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  Speaker 5: From the EV business, which it's been losing money on.
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  Speaker 6: And it seemed like General Motors was taking the stance
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  Speaker 6: of like, no, that's not us, we are going forward
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  Speaker 6: with this. Is GM simply catching up to the economic
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  Speaker 6: realities that Ford has already acknowledged, or is there a
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  Speaker 6: different strategy at play here.
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  Speaker 8: I think it's really hard to foresee. These policies are
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  Speaker 8: changing so fast. You know, with Biden in the administration,
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  Speaker 8: there was a huge push you know, not just GM,
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  Speaker 8: but a lot of autumn, Makers was pushing evs. You
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  Speaker 8: had new startupsbian like Lucid pushing evs. But you know,
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  Speaker 8: things have changed, and look GM is reacting to it.
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  Speaker 8: It's interesting you brought up Ford and now actually Ford,
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  Speaker 8: Chris Farley looks actually pretty good, right, he looks like
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  Speaker 8: he made the right call. But I think you know,
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  Speaker 8: if you look at the bigger picture, what GM is
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  Speaker 8: doing today is probably just the beginning. We'll probably hear more,
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  Speaker 8: not just from GM, but from the other makers in
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  Speaker 8: terms of their ev plans going forward.
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  Speaker 2: Has this changed the way you're viewing the evolution to
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  Speaker 2: evs that hey, maybe it's not going to be as
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  Speaker 2: far as we thought or as quick as we thought.
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  Speaker 3: How should we think about that? Because it seems to
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  Speaker 3: have lost steam.
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  Speaker 2: And I'm not sure if it's just tied to this
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  Speaker 2: administration and it's policies and names, or is it more
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  Speaker 2: market driven.
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  Speaker 8: Well, I think it's it's up in the air. You know, personally,
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  Speaker 8: I still think there is a market for EV's, not
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  Speaker 8: necessarily in the US. You know, the Chinese are still
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  Speaker 8: pushing evs. The Europeans the certain extents are a certain
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  Speaker 8: extent are also pushing ev I think, you know, with
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  Speaker 8: the current policies of no subsidies, no penalties for you know,
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  Speaker 8: selling gas guzzlers. Uh and and you know us consumer
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  Speaker 8: still loving the gasoline engine. I think it's just going
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  Speaker 8: to take a little bit more time to shift to
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  Speaker 8: a greater penetration EV. Look, there is demand, right because
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  Speaker 8: if you look just before the expiration of the seventy
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  Speaker 8: five hundred dollars subsidy, we did see a spike in
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  Speaker 8: EV sales, be EV sales. So there is a certain
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  Speaker 8: segment of the consumer that is looking for evs and
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  Speaker 8: I think a lot of people who have driven EV's
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  Speaker 8: love them. So, look, it's just going to take time, right,
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  Speaker 8: It's going to take time to get there. There's there's
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  Speaker 8: still other hurdles that the EV industry has to has
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  Speaker 8: to overcome, for example, the charging the structure, you know
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  Speaker 8: that that needs to be built out.
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  Speaker 5: Yeah, no, no kidding.
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  Speaker 6: Which legacy automaker, not just in the US, but around
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  Speaker 6: the world has figured out, you know, the best approach
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  Speaker 6: to EV's, you know, gotten the balance correctly.
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  Speaker 8: Yeah, I just take a step back. I think GM
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  Speaker 8: is probably the best because they actually have even with
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  Speaker 8: this about face, yes, because they're reacting to reality fairly quickly. Look,
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  Speaker 8: they're they're cutting back on the US UH EV capacity
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  Speaker 8: potentially EV product offering, but they're actually doing fairly well
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  Speaker 8: in China. They do have plug in hybrids, they do
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  Speaker 8: have extended range evs, which I think we talked about
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  Speaker 8: it here before. And uh they also have battery electric
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  Speaker 8: vehicles in China, and you know, sales have been improving
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  Speaker 8: over the past few quarters over there.
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  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: get your podcasts, or watch us live on YouTube.
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  Speaker 2: I think back in the pandemic, we all became, whether
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  Speaker 2: we wanted to or not, we became experts on the
• 11:20
  Speaker 2: global supply chain and how fragile that is. And that
• 11:24
  Speaker 2: is no more evident than in the airline business and
• 11:28
  Speaker 2: aircraft manufacturing business. Apparently, it's not an easy thing to
• 11:32
  Speaker 2: build a jet aircraft here, and you need specialized skills
• 11:36
  Speaker 2: and people with those skills. That's still rippling through the
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  Speaker 2: aviation and aerospace industries Boeing and Airbus are suffering quote
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  Speaker 2: unprecedented delays and certifying delivering aircraft, stiffing airlines growth and
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  Speaker 2: plans to decarbonized.
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  Speaker 3: Customers are saying George Ferguson joints us here.
• 11:53
  Speaker 2: He's a senior aerospace, Defense and airlines anamals for Bloomberg Intelligence.
• 11:57
  Speaker 3: George, it's we're well passed the pandemic here.
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  Speaker 2: I know you've educated us and explaining to us how
• 12:03
  Speaker 2: just how intense these supply chains are and how complicated
• 12:07
  Speaker 2: they are. Give us an update on the ability of
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  Speaker 2: Airbus and Boeing to deliver aircraft to their customers.
• 12:13
  Speaker 9: Yeah, so, I think the update would be that Boeing
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  Speaker 9: is converging, I think on air Bus as far as
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  Speaker 9: delivery numbers. You know, Airbus sort of came out of
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  Speaker 9: the pandemic with supply chains I think, in relatively better shape,
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  Speaker 9: and they were doing better at deliveries because of that.
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  Speaker 9: But recently things have stagnated, and so Airbus has been
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  Speaker 9: having problems getting engines from specifically ge which is making
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  Speaker 9: hard for them to deliver their bread and butter aircraft,
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  Speaker 9: the A three twenty. During the month of they delivered
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  Speaker 9: fifty nine a three twenties not bad, but they want
• 12:50
  Speaker 9: to be at seventy five a month by twenty twenty seven,
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  Speaker 9: and they have months where they're in the forties and
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  Speaker 9: so very sporadic. Again, I think a lot of it
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  Speaker 9: has to do with that g supply chain. So it
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  Speaker 9: was an okay month, I think for Airbus in an
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  Speaker 9: okay quarter, they have a lot of work to do
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  Speaker 9: to get to their targets. For the end of the year.
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  Speaker 9: Boeing just reported deliveries. They're in the fifties. Most importantly,
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  Speaker 9: seven thirty seven's are around forty I think it was
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  Speaker 9: for the month, which is a pretty good number. It's
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  Speaker 9: been it's a little bit less than August, but has
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  Speaker 9: been improving. That's how they're going to drive cash flow
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  Speaker 9: and profitability, better cash flow and profitability. So it looks
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  Speaker 9: like Boeing really starting to get there through poo in
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  Speaker 9: the factory sort of in hand and working well and
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  Speaker 9: starting to deliver some of that inventory aircraft, which will
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  Speaker 9: reduce some of the drag of on their earnings.
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  Speaker 2: So at a recent investor or industry conference, Ben Smith
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  Speaker 2: of Air France KALM said, for some long haul airplanes,
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  Speaker 2: we've been waiting for certification for seven or eight years,
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  Speaker 2: which is unprecedented.
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  Speaker 3: What's going on with with some of those wide body jets.
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  Speaker 9: Yeah, I mean the Triple seven is I think he's
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  Speaker 9: referring to Triple seven right. Boeing has been trying to
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  Speaker 9: get the Triple seven X, their latest version of the
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  Speaker 9: Triple seven certified, and it just keeps pushing, and recently
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  Speaker 9: it pushed from a twenty twenty six initial delivery to
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  Speaker 9: a twenty twenty seven. I think you know a lot
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  Speaker 9: of these airlines, you know, they're looking for this airplane
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  Speaker 9: because it's going to be it's going to be the
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  Speaker 9: biggest in the sky, right since the seven forty seven
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  Speaker 9: and the A three eighty have been retired, this is
• 14:34
  Speaker 9: going to be the sort of the biggest seat count
• 14:36
  Speaker 9: you can get. So it's really good for driving sea
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  Speaker 9: cost efficiencies at airlines. It's still though a small portion
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  Speaker 9: of Boeing's business. I mean the backlogs I think around
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  Speaker 9: four hundred, so it's not huge. The biggest backlogs are
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  Speaker 9: to the Middle East, to Emirates and to Katar And
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  Speaker 9: my guess is that as Boeing manages challenges in the
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  Speaker 9: engineering workforce, Unfortunately. I think Triple seven sometimes maybe get
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  Speaker 9: some short shrift, and so certification sort of keeps getting
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  Speaker 9: pushed on.
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  Speaker 2: That one US government shutdown can't be helping this industry
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  Speaker 2: in terms of getting a certification and things like that.
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  Speaker 2: Are any of the companies calling that out as a challenge.
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  Speaker 9: Not Yeah, I mean we're about to go in an
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  Speaker 9: earning season, right, so they're all in quiet period. I
• 15:21
  Speaker 9: think we'll hear. But I think you're right. The FAA,
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  Speaker 9: i'm sure is not working at you sort of full
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  Speaker 9: gallop at this point given the government shutdown. There's some
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  Speaker 9: folks I'm sure that still have to work, but it's
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  Speaker 9: not gonna help certification. We'll see how much longer it lasts. Again,
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  Speaker 9: Triple seven we'd like to see certified and delivered. We
• 15:43
  Speaker 9: think Boeing still can keep that line open well into
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  Speaker 9: twenty twenty seven. They have a lot of orders for
• 15:50
  Speaker 9: the freighter still. But you know, companies like Emirates Air
• 15:54
  Speaker 9: France KLM cut to our chomping at the bit to
• 15:57
  Speaker 9: get that airplane in the portfolio. Leftons too.
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  Speaker 3: What's the labor situation in the aerospace business. You explained
• 16:02
  Speaker 3: to us that the.
• 16:03
  Speaker 2: Industry lost a lot of talented skilled people during the pandemic,
• 16:06
  Speaker 2: and it's kind of hard to retrain find these people
• 16:09
  Speaker 2: and retrain them.
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  Speaker 9: Yeah, it's getting better, and I think you could sort
• 16:13
  Speaker 9: of look at some of those those labor indicators, like
• 16:17
  Speaker 9: the you know these surveys that show jobs, jobs open,
• 16:21
  Speaker 9: and people looking for jobs. During the pandemic, there were
• 16:24
  Speaker 9: a lot more jobs open than people looking for jobs
• 16:27
  Speaker 9: that sense crisscrossed. So that will improve stability in the
• 16:33
  Speaker 9: air space supply chain. I guess it's not as an
• 16:36
  Speaker 9: exciting career as it maybe it was back when I
• 16:39
  Speaker 9: was a boy, I guess for a long time ago.
• 16:42
  Speaker 9: And so you know, there's people that would love to
• 16:45
  Speaker 9: be able to work at home. You can't really do
• 16:47
  Speaker 9: that when you're manufacturing airplanes. So they've had a hard
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  Speaker 9: time sort of backfilling a lot of the baby boomers
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  Speaker 9: that left, and the new workforce just isn't as I
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  Speaker 9: would say, I don't know if it's fair adept with
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  Speaker 9: their hands maybe as the boomers. And so they're bringing
• 17:04
  Speaker 9: people in that haven't worked manufacturing and trying to teach
• 17:08
  Speaker 9: them how to do that kind of business, which makes
• 17:10
  Speaker 9: it even harder to train up. But it is improving again,
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  Speaker 9: We're seeing it. I think in the throughput we're getting
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  Speaker 9: out of Boeing. The delivery numbers today are indicator of it.
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  Speaker 9: And as we see the you know, the uh what
• 17:23
  Speaker 9: we call it, the employment situation, get back and balance
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  Speaker 9: it all out.
• 17:27
  Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 2: There's a million important things we can talk about, but
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  Speaker 2: I have to lead off with this. Keleanova offering a
• 17:53
  Speaker 2: version of pop Tarts with higher protein content starting in
• 17:56
  Speaker 2: early November. This follows Pepsi's plans for higher protein version
• 18:00
  Speaker 2: of do Ritos. How do you know what protein is
• 18:03
  Speaker 2: and how you added into something? Jen, what's going on here?
• 18:07
  Speaker 7: Yeah, hi, Paul. So really what we're seeing is a
• 18:10
  Speaker 7: lot of these package free companies are tapping into this
• 18:12
  Speaker 7: protein trend. It's something that consumers are really looking for.
• 18:16
  Speaker 7: And at the end of the day, when it comes
• 18:18
  Speaker 7: to PepsiCo or it comes to Kelenova, This is really
• 18:21
  Speaker 7: about making people feel marginally better about eating food that
• 18:24
  Speaker 7: is bad for them. Right, Let's let's just be honest
• 18:28
  Speaker 7: about it, right. So you know, when you put protein
• 18:30
  Speaker 7: on the package, people feel like, even if they're making
• 18:33
  Speaker 7: a bad choice, it's not as bad as it could
• 18:35
  Speaker 7: have been. And that's really what's behind this.
• 18:37
  Speaker 6: It's like the equivalent of vanity sizing at retailers. Right,
• 18:41
  Speaker 6: you know, you're actually size six, but we're going to
• 18:43
  Speaker 6: tell you you're a size two so you feel better
• 18:45
  Speaker 6: and buy more clothes. Is this as simple, jen as
• 18:48
  Speaker 6: just adding protein powder on top of the Kellogg's pop tarts?
• 18:52
  Speaker 5: Excuse me, Kelenova pop arts.
• 18:54
  Speaker 7: Yes, so what they've done is they've they've added protein
• 18:57
  Speaker 7: into the pastry part of the pop tarts and that
• 19:01
  Speaker 7: changes the texture and the taste just a little bit.
• 19:04
  Speaker 7: But what's really interesting is the consumer trend behind it.
• 19:06
  Speaker 7: You know, we ran a proprietary protein study back in
• 19:09
  Speaker 7: the middle of the summer, and what we saw was
• 19:12
  Speaker 7: that almost forty percent of consumers eat something with protein enhanced,
• 19:17
  Speaker 7: whether it's a snack or a beverage, on a weekly basis.
• 19:20
  Speaker 7: And you know, at least thirty eight percent said that
• 19:23
  Speaker 7: they're eating more protein enhanced products in the last three months.
• 19:27
  Speaker 7: So clearly there's a consumer uptake, there's interest in this,
• 19:31
  Speaker 7: and that's what these companies are really tapping into.
• 19:33
  Speaker 3: Do I want more protein? Do I need more protein?
• 19:35
  Speaker 6: I'm eating more egg whites, but that's because it's available
• 19:38
  Speaker 6: at work.
• 19:38
  Speaker 5: What are you doing?
• 19:39
  Speaker 3: I don't know the same thing of your goldfish?
• 19:42
  Speaker 5: Do not have extra protein.
• 19:43
  Speaker 3: On the goldfish? Have extra protein?
• 19:47
  Speaker 7: Neither of you are on GLP one drugs, right, But
• 19:50
  Speaker 7: protein is a big solution for people who are on
• 19:52
  Speaker 7: those drugs because you tend to lose muscle mass as
• 19:55
  Speaker 7: a side effect of those drugs, and so as the
• 19:58
  Speaker 7: uptake of GLP one goes up, there's more and more
• 20:01
  Speaker 7: demand for these protein and Harry products.
• 20:03
  Speaker 3: That's what I needed.
• 20:04
  Speaker 2: Okay, now I'm at a cocktail party and I need
• 20:06
  Speaker 2: to sound smart on proteins.
• 20:08
  Speaker 3: Now I got my line.
• 20:08
  Speaker 6: But apparently fiber is the new protein and jen Is.
• 20:12
  Speaker 6: Didn't the PepsiCo CEO say something about this?
• 20:15
  Speaker 7: Yeah, you know, whether it's anything that helps kind of
• 20:18
  Speaker 7: enhance the product. So when you're talking about Dorito's that
• 20:22
  Speaker 7: they have additional milk protein being added you know, higher
• 20:26
  Speaker 7: fiber products. All of these things are things that people,
• 20:29
  Speaker 7: the average consumer perceives as having a health or wellness benefit,
• 20:33
  Speaker 7: and people are trying, in small steps to be a
• 20:35
  Speaker 7: little bit better about their health.
• 20:37
  Speaker 2: All right, let's get to another story I thought was
• 20:39
  Speaker 2: really interesting. Walmart partners with open Ai to offer shopping
• 20:43
  Speaker 2: on chat GPT.
• 20:45
  Speaker 3: This sounds like a natural what's going on here?
• 20:49
  Speaker 7: Jen, Yeah, this is an interesting move, but I think
• 20:52
  Speaker 7: it really illustrates sort of that trend of what's happening
• 20:55
  Speaker 7: across retail in general. Walmart's really been very good about
• 20:59
  Speaker 7: doing it experimentation and kind of checking out what the
• 21:02
  Speaker 7: opportunities are whether it comes to social media and social
• 21:07
  Speaker 7: commerce particularly, and this lad us to partnership with with
• 21:11
  Speaker 7: Opening Eye. This really does tap into that as well. Now,
• 21:15
  Speaker 7: social spending is still very small in terms of the
• 21:18
  Speaker 7: overall percentage of what retailers are achieving, but it's important
• 21:22
  Speaker 7: to be present and I think that's what's most notable
• 21:25
  Speaker 7: about this announcement.
• 21:26
  Speaker 6: What is social spending and how do the numbers differ
• 21:30
  Speaker 6: from from normal shopping through Walmart's website or going into
• 21:35
  Speaker 6: Walmart's actual stores.
• 21:37
  Speaker 7: Yeah, so social commerce is when you're on a platform,
• 21:40
  Speaker 7: whether it's on Chat, gpt now, or whether it's on TikTok,
• 21:43
  Speaker 7: or whether it's on Facebook or you know, any of
• 21:46
  Speaker 7: the social media platforms, and you have the ability to
• 21:48
  Speaker 7: add to cart and buy now. That's that's social commerce.
• 21:52
  Speaker 7: But it's still a tiny, tiny fraction of the overall
• 21:56
  Speaker 7: e commerce that happens for these companies. So while it's
• 21:59
  Speaker 7: important in terms of their showing that they're present and
• 22:02
  Speaker 7: that they're aware of new technologies, it's not going to
• 22:05
  Speaker 7: move the needle with regards to their overall e commerce
• 22:08
  Speaker 7: sales or their overall business mix.
• 22:09
  Speaker 2: At this point, Jen, we've got a little bit more data,
• 22:13
  Speaker 2: a little bit more time, And as it relates to teriffs,
• 22:16
  Speaker 2: what's your best guess as to what your package food companies,
• 22:20
  Speaker 2: your retailers, how are they kind of segmenting the terraffs
• 22:24
  Speaker 2: before maybe passing along something to the consumer.
• 22:28
  Speaker 7: Yeah, it's a complicated situation, Paul, And really what's happening
• 22:32
  Speaker 7: is you know where they can find alternative sourcing. A
• 22:35
  Speaker 7: lot of companies have been trying to do that. There
• 22:37
  Speaker 7: are some companies in package food where that's not as easy.
• 22:40
  Speaker 7: So I would take McCormick as an example, where a
• 22:43
  Speaker 7: lot of spices you can't produce domestically or you can't
• 22:46
  Speaker 7: source domestically, and then it becomes a question of how
• 22:49
  Speaker 7: do you negotiate with partners? Do you find alternative countries
• 22:54
  Speaker 7: of origin that maybe have slightly lower tariff levels? And
• 22:57
  Speaker 7: it's also a lot of effort right now is going
• 23:00
  Speaker 7: into finding efficiencies that can help offset those costs so
• 23:03
  Speaker 7: that they can absorb some of that cost and not
• 23:05
  Speaker 7: have to pass it on to consumers. Ultimately, most of
• 23:08
  Speaker 7: the companies we're talking to are saying that where needed,
• 23:11
  Speaker 7: they will very strategically pass price through, but they're trying
• 23:15
  Speaker 7: to avoid a uniform, unilateral price increase just due to tariffs.
• 23:19
  Speaker 6: How much of this work has been done what you
• 23:21
  Speaker 6: just described, and I guess I wonder how much of
• 23:24
  Speaker 6: it will be covered in the earnings calls this quarter.
• 23:28
  Speaker 7: I think it will be definitely a topic of the
• 23:30
  Speaker 7: earnings calls this quarter. But when we had tariffs back
• 23:34
  Speaker 7: in twenty eighteen, a lot of companies started the process
• 23:37
  Speaker 7: of identifying other options for sourcing. So there's probably been
• 23:42
  Speaker 7: more progress made than people would recognize because it didn't
• 23:46
  Speaker 7: just start this year. And so it's been sort of
• 23:49
  Speaker 7: a gradual shift, and once they have those plans in place,
• 23:52
  Speaker 7: they can sort of accelerate that and then the focus
• 23:56
  Speaker 7: really is on efficiencies, and that's where the technology comes
• 23:59
  Speaker 7: back into play, where it helps them be better with
• 24:02
  Speaker 7: regards to their sourcing, their negotiations, and really in terms
• 24:06
  Speaker 7: of understanding what products they actually need to carry and
• 24:10
  Speaker 7: which products they could perhaps suspend or discontinue.
• 24:14
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