Latest / Bloomberg Intelligence / BI Weekend: Nvidia Chips, Dating Apps, Tesla Vote

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BI Weekend: Nvidia Chips, Dating Apps, Tesla Vote · Bloomberg Intelligence

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Speaker 4: Sweeney and I'm Lis Matteo filling in on Bloomberg Intelligence.
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Speaker 2: On today's show, we dig inside the big business stories
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Speaker 2: impacting Wall Street and the global markets. Each and every
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Speaker 2: week we provide in dept with research and date on
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Speaker 2: some of the two thousand companies in one hundred and
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Speaker 2: thirty industries our animals cover worldwide. Today, we'll look at
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Speaker 2: Bloomberg Intelligence deep dive into aiding apps and how gen
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Speaker 2: Z is using them.
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Speaker 4: Plus a look at how Trump administration policies are impacting
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Speaker 4: the transition to clean power.
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Speaker 2: First, we begin with the tech sector.
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Speaker 4: Well, this week we heard that tech giants Nvidia and
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Speaker 4: AMD they plan to resume sales of some AI chips
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Speaker 4: in China. This came after US government officials told the
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Speaker 4: companies these shipments would get approved for.
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Speaker 2: More at least than I were joined by Mandeep seeing
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Speaker 2: Bloomberg Intelligence senior tech industry analysts.
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Speaker 4: We first asked Mandeep to explain the policies of the
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Speaker 4: US government as it relates to chips.
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Speaker 5: In mid April, the current administration banned the sale of
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Speaker 5: Nvidia H twenty chips. And remember H twenty is a
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Speaker 5: deprecated version of the Hopper two hundred chip that Nvidia
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Speaker 5: sells in the US and other markets. So it's not
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Speaker 5: the highest hip in terms of performance and power consumption.
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Speaker 5: But at the same time, what they were able to
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Speaker 5: do is to sell this deprecated verd and for a
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Speaker 5: while and then since mid April it was completely banned.
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Speaker 5: And so what Nvidia did was they took down the
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Speaker 5: guidance and they pretty much rode off. The inventory of
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Speaker 5: the EDH twenty chips for their one Q party was
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Speaker 5: around two point one billion for one queue and then
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Speaker 5: for two Q they guided for an eight billion dollar
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Speaker 5: sort of headwind from the lack of sales to the
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Speaker 5: China region. Now with this new guideline around Nvidia being
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Speaker 5: able to sell those edged twenty chips, I believe it's
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Speaker 5: a similar version to what they were selling before. I
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Speaker 5: think you could pretty much add you know, I would
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Speaker 5: say up to a twenty five billion dollar run rate
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Speaker 5: annually in terms of sales to China. So think of
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Speaker 5: Nvidia sales next year are going to be around two
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Speaker 5: hundred and fifty billion. That's the current consensus US add
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Speaker 5: twenty five billion dollars to that because that's how much
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Speaker 5: they are able to sell to China as of right now.
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Speaker 5: It could be much higher, but at least a ten
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Speaker 5: percent lift from being able to sell into China with
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Speaker 5: these kind of lighter version of their highest end chips.
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Speaker 5: So I think it's a net positive. Same thing for
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Speaker 5: AMDMD the market is much smaller for them given their
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Speaker 5: market share in GPUs, but I would say AMD would
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Speaker 5: get a similar lift at least ten percent of their
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Speaker 5: sales expectations.
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Speaker 4: So is there a difference between what Nvidia can sell
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Speaker 4: and what AMD can sell in China? Is it about
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Speaker 4: the same as far what the white House would say.
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Speaker 5: So. AMD also has a deprecated version of their highest
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Speaker 5: stand chips that they're selling into the US market as well,
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Speaker 5: just because the administration doesn't want either AMD or Nvidia
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Speaker 5: to sell their highest and chip that's made on three
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Speaker 5: nanometers note that has got a search to performance PEC
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Speaker 5: and so they don't want the latest technology to be
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Speaker 5: sold into the China region. What they're okay with is
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Speaker 5: an older version of Nvidia chips that doesn't have the
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Speaker 5: same level of performance as the current version, and that
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Speaker 5: they can sell into these Chinese companies, and the administration
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Speaker 5: is okay with that, all.
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Speaker 2: Right, man, Deep, I have no idea why the government's
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Speaker 2: changing its policy, but it's good for these companies negotiations certainly,
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Speaker 2: so we'll keep it on that. Do we know just
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Speaker 2: off and why they change the policy.
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Speaker 5: I mean, it's part of the bigger negotiation. The administration
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Speaker 5: is focused on building more data centers here in the
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Speaker 5: US for them for the companies to be able to
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Speaker 5: do that meta talking about superintelligence and you know all
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Speaker 5: the capex spen they need some stuff from China as well.
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Speaker 5: So this is more about you have the rare earth stuff.
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Speaker 5: We have the chips and it's part of the bigger negotiation.
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Speaker 4: Our thanks to man deep seeing Bloomberg Intelligence senior tech
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Speaker 4: industry analyst.
5:04
Speaker 2: We recently focused on a Bloomberg story entitled Stealth Steak
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Speaker 2: Sales Health, United Health beat Wall Street Targets.
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Speaker 4: You can find it on the Bloomberg Terminal and Bloomberg
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Speaker 4: dot com. It discusses how until this year, United Health
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Speaker 4: Group had managed to pull off an impressive feat more
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Speaker 4: than sixty consecutive quarters of earnings that beat Wall Street estimates, but.
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Speaker 2: Now analysts are starting to question how United Health is
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Speaker 2: arriving at these numbers for more. Atleasta and I were
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Speaker 2: joined by Michelle Davis, Bloomberg senior deals reporter.
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Speaker 4: We first asked Michelle about what she found out when
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Speaker 4: she looked into United Health's earnings.
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Speaker 6: They had kind of a pristine record for more than
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Speaker 6: sixty quarters. They beat estimates. Analysts love them, and at
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Speaker 6: the end of last year that got a bit harder
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Speaker 6: for them to keep up. You know, medical costs arising,
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Speaker 6: the government's been cracking down on reinforcements and that was
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Speaker 6: eating into profits. And so what we reported is that
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Speaker 6: at the end of last year they approached several private
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Speaker 6: equity firms and asked them if they wanted to buy
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Speaker 6: stakes off of them of their businesses, and a couple
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Speaker 6: interesting things happen here. Not only did they quietly do this,
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Speaker 6: but the deals were structured such that United Health can
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Speaker 6: be forced to buy the businesses back down the road,
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Speaker 6: so it's temporary in nature. And United booked the gains
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Speaker 6: in an interesting place. They booked them as part of
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Speaker 6: operating earnings, which is or adjusted earnings, which is normally
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Speaker 6: where you look to see kind of how a business
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Speaker 6: is doing, you know, excluding one off gains or one
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Speaker 6: off events like this, And so it was just interesting
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Speaker 6: to see not only the fact that they stealthily did this,
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Speaker 6: but where they put them. And without these gains, they
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Speaker 6: would have missed estimates and profit would have dropped in
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Speaker 6: the last quarter of last year.
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Speaker 4: So, as I'm going through this article, this certain quote
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Speaker 4: stands out for me From an analyst that you spoke to.
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Speaker 4: He said, if the company is manufacturing earnings by chopping
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Speaker 4: up their furniture or selling their assets, that's not exactly
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Speaker 4: a great business model. Okay, so is the risk that
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Speaker 4: it might be kind of masking this weakness in the operations.
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Speaker 6: That's the concern, and to be clear, you know, there's
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Speaker 6: nothing illegal about what they're doing, per se. You know,
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Speaker 6: they disclosed that they did this, most people didn't see it.
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Speaker 6: It was in a footnote in their ten K that
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Speaker 6: kind of went under the radar, and there are no
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Speaker 6: details about what exactly they sold. That's what we're trying
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Speaker 6: to you know, report on here. But yeah, the concern
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Speaker 6: is it clouds, you know, your ability to see how
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Speaker 6: the business is actually performing. And we heard from sources
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Speaker 6: that there's a culture inside United Health of you know,
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Speaker 6: kind of there being this pressure to do whatever you
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Speaker 6: can to meet targets every quarter.
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Speaker 7: Yep.
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Speaker 2: It's a huge company, huge player in the managed care business.
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Speaker 2: What's the underlying concern for investors out there? Do you
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Speaker 2: think around this company?
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Speaker 6: United Health has been dealing with a lot of things.
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Speaker 6: I mean, even before we knew about this, there was
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Speaker 6: obviously the tragedy of you know, one of their executives
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Speaker 6: being murdered last year, and then you know, there was
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Speaker 6: a Wall Street Journal investigation this year about potential medicare fraud,
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Speaker 6: which they have denied. They also, in the first courts
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Speaker 6: reported their first earnings miss in you know, more than
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Speaker 6: sixty quarters, so that shoe finally dropped. They outed their CEO.
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Speaker 6: So investors are just concerned about the story here, you know, what,
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Speaker 6: what is the United Health story? I think that's what
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Speaker 6: the big concern is.
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Speaker 4: So are there any other companies, like maybe other health
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Speaker 4: companies or something like that where this same story that
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Speaker 4: you've been talking about kind of plays out?
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Speaker 6: Not that we could find it. Seems like United Health
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Speaker 6: is really, you know, unique in its ability and history
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Speaker 6: of you know, really carefully managing its reporting every quarter.
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Speaker 2: Our thanks to Michelle Davis, Bloomberg Senior Deals reporter, we.
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Speaker 4: Move next to the IT space. This week, we heard
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Speaker 4: that the IT company, Hewlett Packard Enterprise is creating a
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Speaker 4: new strategy committee and HPA is agreeing to work with
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Speaker 4: activist investor Elliott Investment Management on ways to help the
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Speaker 4: software company boost value for more.
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Speaker 2: Lisa and I were joined by Wujin Hope, Bloomberg Intelligence
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Speaker 2: senior technology analysts. You're first to ask Wugent about the
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Speaker 2: new committee HPE is creating.
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Speaker 8: It is a handpicked board member by Elliott Management. Keep
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Speaker 8: in mind, Elliott is an activist investor that has a
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Speaker 8: ten percent plus shareholding of HPE. I think I believe
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Speaker 8: they made their position earlier this year, and who they
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Speaker 8: appointed was Bob Calderoni, who has done similar type of
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Speaker 8: deals in terms of taking companies private or more importantly
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Speaker 8: operational streamlining. So any changes, I think Elliott is going
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Speaker 8: to try through Bob to affect a lot of changes
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Speaker 8: at HPE.
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Speaker 2: Which just remind us what HP is today. Number one
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Speaker 2: and number two, what do they need to fix to
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Speaker 2: move this thing forward?
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Speaker 8: Yeah, hey, Paul, so, HPE is one of the leading
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Speaker 8: enterprise IT infrastructure vendors. They provide servers, storage, now a
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Speaker 8: bigger networking presence with the June acquisition, and actually, quite
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Speaker 8: quite frankly, there's quite a bit to fix from an
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Speaker 8: operational standpoint. They fumbled the first quarter results by mispricing
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Speaker 8: their server business and it seems to be reconciled now,
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Speaker 8: but it flags some of the operational issues. Number one,
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Speaker 8: Number two, they have made a lot of M and
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Speaker 8: A that just didn't create the synergies that they had hoped. So,
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Speaker 8: you know, they did hire the former HPCFO to streamline
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Speaker 8: the financials, and with the Juniper merger starting underway, I
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Speaker 8: suspect that you know, the new strategy board, it will
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Speaker 8: try to find more operational synergies between the two networking businesses.
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Speaker 4: WIJ and can you dig more into how it's under
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Speaker 4: pressure kind of like lagging behind Dell and growing AI.
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Speaker 4: What kind of pressure is it facing in that market?
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Speaker 8: Yeah, so if we think about AI, right, you know,
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Speaker 8: HPE actually owns Cray, and we think about high performance compute,
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Speaker 8: they are the market leaders there. They weren't able. HPE
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Speaker 8: has not been able to transition that Cray business elegantly
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Speaker 8: to UH the to the AI side of things. So
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Speaker 8: let me put this into context. I think HPE should
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Speaker 8: be on track for about three to four billion dollars
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Speaker 8: in AI sales UH this year, possibly you know four
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Speaker 8: to five, right, Dell is going to be on track
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Speaker 8: for about fifteen billion dollars this year, and super Micro
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Speaker 8: is probably on track for about twenty billion this year.
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Speaker 8: So you know, they've lagged on the AI front even
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Speaker 8: though they have some of the leading technologies on high
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Speaker 8: performance compute. That's an area that you know could be
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Speaker 8: fixable under the right hands.
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Speaker 2: One more here before we let you go, which is
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Speaker 2: just you mentioned they owned Cray, they owned Juniper. If
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Speaker 2: i'm Elliott Management, am I thinking about maybe they can
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Speaker 2: be selling or spinning off some of these businesses to
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Speaker 2: enhance value.
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Speaker 8: Well, you know, Bob Calderoni used to be on the
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Speaker 8: Juniper board and they actually helped with the operational stitch
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Speaker 8: lining of Juniper. Right, so I think that you want
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Speaker 8: to keep Juniper. Okay, there are other aspects of the
12:20
Speaker 8: networking business that you could probably probably parse away. Right,
12:25
Speaker 8: the crab business you'd want to keep because AI is
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Speaker 8: going to be the growth engine and also help you
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Speaker 8: transition to the enterprise AI our.
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Speaker 2: Thanks to Wujinell, Bloomberg Intelligence Senior Technology Analyst.
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Speaker 4: Coming up, we'll look at Bloomberg Intelligence to this deep
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Speaker 4: dive into dating apps.
12:41
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Speaker 2: research and data on two thousand companies and one hundred
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Speaker 2: and thirty industries.
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Speaker 4: You can access Bloomberg Intelligence big. I'm the Terminal, I'm LISMITTEO.
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Speaker 4: I'm Paul Sweeney and I'm Lisa Matteo filling in on
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Speaker 4: Bloomberg Intelligence The.
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Speaker 2: Next move, So the world of online dating.
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Speaker 4: Bloomberg Intelligence recently did a survey on dating apps and
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Speaker 4: how gen Z is using them, and the survey found
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Speaker 4: that gen Z is dating less than most other generations
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Speaker 4: from are.
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Speaker 2: On this Lisa and I were joined by Nicole Desuza,
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Speaker 2: Bloomberg Intelligence Internet and software equity analysts.
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Speaker 4: We first asked Nicole to explain her findings.
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Speaker 3: We have Bloomberg Intelligence conducted the survey to better understand
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Speaker 3: how people are navigating dating, how they use dating apps,
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Speaker 3: and then also how they feel about AI within dating apps.
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Speaker 3: And so some really interesting findings. First that you know, specifically,
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Speaker 3: gen Z tends to be single but not dating. Gen
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Speaker 3: Z's what age again, sixteen to twenty eight, sixteen.
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Speaker 2: To twenty al right, so yeah, single, two of my
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Speaker 2: four into that one, okay, And so they're not using
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Speaker 2: the apps.
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Speaker 3: They're not even dating. Single and not dating. So this
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Speaker 3: is I mean, there's a few reasons. Studies have kind
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Speaker 3: of shown they do have higher rates of loneliness, but
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Speaker 3: they are also prioritizing independence. They are also you know,
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Speaker 3: feeling a reduced stigma around being single. So it could
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Speaker 3: really change dating patterns generationally.
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Speaker 4: I can kind of say my son was on a
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Speaker 4: dating app and then he stopped because he got tired
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Speaker 4: of it and it just and he's in that gen
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Speaker 4: Z kind of group and they're not going to pay
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Speaker 4: for them too. So how does that change for these
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Speaker 4: different you know, dating apps out there. How do they
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Speaker 4: have to change their approach?
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Speaker 3: So right now a lot of what we're seeing from
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Speaker 3: gen Z is that even though they are dating less,
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Speaker 3: they are looking for long term relationships. Those that are dating,
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Speaker 3: they are looking to form meaningful connections. So, you know,
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Speaker 3: some of the products we've seen from these dating apps
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Speaker 3: that really introduce AI are more around how to create
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Speaker 3: a profile, how to make it easier to talk to people,
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Speaker 3: you know, using AI to generate prompts that might not
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Speaker 3: necessarily you know, correlate with what gen Z is looking
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Speaker 3: for in terms of forming a meaningful connection.
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Speaker 2: I'll tell you Lisa go to the Parker House and
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Speaker 2: seeing her at New Jersey on a summer Saturday, thousands
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Speaker 2: and thousands of kids of gen Z type are there
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Speaker 2: at like four o'clock in the afternoon. They're not on
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Speaker 2: the beach. They're all made up, dressed to the nines.
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Speaker 2: I think they're looking to hook to you meet somebody
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Speaker 2: right now. I've been there.
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Speaker 3: I had to wait.
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Speaker 2: I mean, I don't know what's going on. How about millennials?
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Speaker 2: How did they fare?
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Speaker 3: So millennials are they kind of came of age during
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Speaker 3: the time of dating apps, so a lot of dating
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Speaker 3: apps are really created to target dating patterns of millennials.
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Speaker 3: So millennials have a more favorable relationship with dating apps.
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Speaker 3: And they also are much more like comfortable with AI
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Speaker 3: in dating apps versus gen Z, which was surprising to us.
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Speaker 4: Now what about Okay, people always forget about gen X,
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Speaker 4: the gen X folks, So what about gen X? And
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Speaker 4: then you know my mom, you know, single, like she
16:05
Speaker 4: wants to find out about these apps. I'm telling you,
16:08
Speaker 4: what about the older generation?
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Speaker 3: They're on dating apps, so they're on it. There are Yeah,
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Speaker 3: there are a lot of gen X and baby boomers
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Speaker 3: on dating apps, and there are a wide variety of
16:18
Speaker 3: dating apps to kind of address different age groups, different
16:20
Speaker 3: you know, things that people are looking for. So they're
16:22
Speaker 3: they're available.
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Speaker 2: How does AI I have to ask the AI questions
16:27
Speaker 2: Because we had a guest on earlier about it. I
16:29
Speaker 2: walked out of there thinking AI is going to take
16:31
Speaker 2: over Wall Street? How about AI and dating apps that
16:35
Speaker 2: I would think could be helpful to better select somebody
16:38
Speaker 2: who might be a good match or something.
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Speaker 3: So we've seen dating app companies roll out a lot
16:43
Speaker 3: of AI products. I would say, right now, it seems,
16:47
Speaker 3: at least based on our survey, that they haven't been
16:49
Speaker 3: that well received. It seems like people don't necessarily need
16:52
Speaker 3: AI to build a better profile, they don't need AI
16:55
Speaker 3: to help them engage in conversation. I think where it
16:58
Speaker 3: has been helpful is user safety, so to weed out
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Speaker 3: profiles that are fake or you know, potentially sent people
17:04
Speaker 3: who are sending harmful messages. And that is a common complaint.
17:08
Speaker 3: But as of right now, it doesn't seem that you know,
17:12
Speaker 3: at least gen Z and even some millennials are really
17:16
Speaker 3: really adopting these new AI products.
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Speaker 4: So, and there are certain a dating apps that are
17:21
Speaker 4: more popular than others, I mean, which are the hot
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Speaker 4: ones right now?
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Speaker 3: So right now, at least by users, Tinder has by
17:28
Speaker 3: far the most users that's owned by match Group. And
17:31
Speaker 3: then Hinge is actually one of the few dating apps
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Speaker 3: that is continuing to grow users, and that's probably because
17:37
Speaker 3: Hinge focus is a little bit more on kind of
17:39
Speaker 3: long term relationships, building meaningful connections. Tinder still has a
17:42
Speaker 3: reputation of kind of a hookup app.
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Speaker 2: Yes, which one.
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Speaker 5: Yeah, that's how my son was on.
17:52
Speaker 2: Our thanks to Nicole Desuza, Bloomberg Intelligence, Internet and Software analysts.
17:56
Speaker 4: We move next to news from the ev giant Tesla.
17:59
Speaker 2: This week, I heard that Tesla's shareholders will vote on
18:01
Speaker 2: whether to invest in CEO Elon Musk's artificial intelligence startup
18:05
Speaker 2: x Ai. That's according to Elon Musk.
18:08
Speaker 4: Musk made the statement in response to an account on
18:10
Speaker 4: x that said the Carmaker must be able to invest
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Speaker 4: in x Ai to be fair to Tesla retail investors for.
18:17
Speaker 2: More at least and I were joined by Craig Trudell,
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Speaker 2: Bloomberg Global Autos Editor.
18:21
Speaker 4: We first asked Craig what kind of message he thinks
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Speaker 4: Musk's recent statement is sending.
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Speaker 7: It's sending that, you know, Elon's Elon's business empire is
18:30
Speaker 7: becoming all the more intertwined. So this has been, you know,
18:34
Speaker 7: sort of a case on and off for years. We
18:38
Speaker 7: can think back to say, you know, the Tesla Solar
18:41
Speaker 7: City acquisition, you know, and that's going back quite a ways.
18:45
Speaker 7: But you know, in this case, it would be Tesla,
18:50
Speaker 7: you know, his most valuable company in investing in in
18:54
Speaker 7: sort of his up and comer and one where he's
18:56
Speaker 7: you know, spent an awful lot of time and energy, folks, Gustan. Lately,
19:01
Speaker 7: as Tesla's electric vehicle sales have been slowing, he's been
19:05
Speaker 7: really sort of dead set on taking on Open AI
19:08
Speaker 7: and and sort of standing up a competitor to chat
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Speaker 7: GPT and as with all the companies in the space,
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Speaker 7: spending an awful lot of money to try and compete
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Speaker 7: in that realm.
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Speaker 2: So where do we stand here in terms of kind
19:24
Speaker 2: of how investors are viewing their investment in Tesla. Are
19:27
Speaker 2: they invested in a auto company or are they invested in
19:30
Speaker 2: an AI company or they invested just an Elon Inc?
19:34
Speaker 2: How did they think about it these days?
19:36
Speaker 5: Yeah?
19:36
Speaker 7: I mean, I think Musk has has been trying for
19:39
Speaker 7: for several years now to sell and position Tesla as
19:43
Speaker 7: much more than just a car company, right and you know,
19:46
Speaker 7: it's it's definitely in the energy space and and you know,
19:52
Speaker 7: has a battery business to show for that. And in Ai,
19:56
Speaker 7: you know, he's he's talked a big game about you know,
20:00
Speaker 7: developing self driving technology. He's not he's not gotten there yet.
20:04
Speaker 7: Uh as as we've seen with the company, you know,
20:07
Speaker 7: starting to offer rides in in Tesla's around Austin, Texas,
20:11
Speaker 7: uh they still have uh, you know, Tesla employees in
20:15
Speaker 7: the front passenger seat to sort of take over in
20:17
Speaker 7: events where you know, the cars have not been able
20:20
Speaker 7: to handle uh, you know, navigating the streets on their own.
20:24
Speaker 7: And yet with with uh SpaceX, I think interest interestingly,
20:28
Speaker 7: you know, for them to have just pumped two billion
20:31
Speaker 7: into x Ai, I think there's a little bit of
20:34
Speaker 7: fomo on the part of some in the Tesla shareholder
20:38
Speaker 7: base where they've seen you know, x AI go from
20:42
Speaker 7: you know, not all that valuable a startup to suddenly,
20:45
Speaker 7: you know, an extremely valuable startup and they feel like
20:49
Speaker 7: they've missed out on some of this appreciation and one
20:52
Speaker 7: in on that.
20:53
Speaker 4: So with all that said, Craig, I mean, does must
20:55
Speaker 4: support a merger between x AI and Tesla or maybe
20:59
Speaker 4: x a hind SpaceX You mentioned space X two, He says.
21:03
Speaker 7: He does not. And and I think there's been talk
21:05
Speaker 7: about this for years, right that, you know, and on
21:08
Speaker 7: and off again there's been you know, questions as to
21:11
Speaker 7: whether or not Musk is you know, sort of stretched
21:13
Speaker 7: too thin and doing too much. Would it make more
21:16
Speaker 7: sense to turn his companies into into one and and
21:20
Speaker 7: sort of you know, he's sort of the think about
21:23
Speaker 7: it as sort of the general electric of of the
21:26
Speaker 7: New age, right, which is kind of fascinating because of
21:29
Speaker 7: course that didn't work out too well for Ge. And
21:32
Speaker 7: and yet you know, even some of Musk's own allies
21:37
Speaker 7: have sort of alluded to, you know, viewing him and
21:42
Speaker 7: his empire as as sort of you know, modern day
21:45
Speaker 7: general electric.
21:46
Speaker 5: So uh.
21:47
Speaker 7: He he did take pains to say on an x
21:50
Speaker 7: that he does not support a full blown merger of
21:54
Speaker 7: Tesla and x Ai, but he has you know, signals
21:57
Speaker 7: on there multiple times now that he would be in
22:00
Speaker 7: favor of of Tesla putting money in and you know,
22:04
Speaker 7: that's that's of course, you know, a proposition that could
22:08
Speaker 7: be helpful if Xai continues to grow its valuation. We
22:13
Speaker 7: should note, however, that our colleagues have reported just in
22:16
Speaker 7: the last month or so that Xai has been burning
22:19
Speaker 7: through about a billion dollars a month. So this is
22:21
Speaker 7: a company that is really sort of cash hungry and
22:26
Speaker 7: needy as it's trying to stand up a business, you know,
22:30
Speaker 7: with all of this capability.
22:31
Speaker 2: Yeah, and Craig, it's been I don't know a month
22:33
Speaker 2: or two since Elon Musk left the US government. Doje
22:37
Speaker 2: is there any evidence that he is meaningfully engaging with Tesla?
22:42
Speaker 7: You know what, I think he's messaging more about, you know,
22:46
Speaker 7: sort of what Tesla's up to than he was while
22:49
Speaker 7: he was in Washington. He did also post that, you know,
22:53
Speaker 7: he was in Tesla's design studio and sort of hyped
22:57
Speaker 7: up how excited he was about what he saw. But
23:01
Speaker 7: you know, the company is is, you know, sort of
23:04
Speaker 7: in this really sort of challenging state from a sales perspective,
23:09
Speaker 7: and you've you've sort of gotten indications that, well, maybe
23:12
Speaker 7: he doesn't necessarily fully have his his finger on the
23:15
Speaker 7: pulse in the sense that he told us just within
23:18
Speaker 7: the last few months that sales have turned around, you know.
23:21
Speaker 7: A couple of months later, the company reports that its
23:23
Speaker 7: vehicle deliveries had fallen thirteen percent in the second quarter.
23:28
Speaker 7: So either he was you know, not necessarily up to
23:31
Speaker 7: speed on the state of sales, or perhaps he was
23:34
Speaker 7: more optimistic that they were able to going to be
23:36
Speaker 7: able to turn things around then they ultimately were able
23:39
Speaker 7: to last quarter.
23:40
Speaker 2: Oh thanks to Craig Trudell and Bloomberg Global Auto's editor.
23:43
Speaker 4: Coming up a conversation with nuclear electricity influence or an
23:46
Speaker 4: author Isabelle bo Mecki.
23:48
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing indes
23:51
Speaker 2: research and data on two thousand companies and one hundred
23:54
Speaker 2: and thirty industries.
23:55
Speaker 4: You can access Bloomberg Intelligence via b I Go, I'm
23:57
Speaker 4: the Terminal, I'm Lisa Matteo and on paulse Need.
24:00
Speaker 2: This is Bloomberg.
24:09
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
24:12
Speaker 1: weekdays at ten am Eastern on Apple Corplay and Android
24:16
Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever
24:19
Speaker 1: you get your podcasts, or watch us live on YouTube.
24:23
Speaker 4: I'm Paul Sweeney and I'm Lisa Matteo. Filly in on
24:25
Speaker 4: Bloomberg Intelligence.
24:26
Speaker 2: Each week we will get research from Bloomberg and EF
24:29
Speaker 2: previously known as New Energy Finance. They're the team at
24:32
Speaker 2: Bloomberg that tracks and analyzes the energy transition from commodities
24:36
Speaker 2: to power, transport, industries, buildings, and agricultural sectors.
24:40
Speaker 4: This week, we looked at the recent policies of President
24:42
Speaker 4: Donald Trump and how they may impact clean power moving forward.
24:46
Speaker 2: For more, Lisa and I were joined by Meredith Annex
24:48
Speaker 2: b n EF, head of Clean Power.
24:51
Speaker 4: We first asked Meredith how the Trump administration is impacting
24:54
Speaker 4: the transition to clean power.
24:55
Speaker 9: I don't know if I've called it so much a
24:57
Speaker 9: new policy as a reversal of the policy that's been
25:00
Speaker 9: in place for about two years. For the last couple
25:03
Speaker 9: of years, the big flagship policy for renewable energy in
25:06
Speaker 9: the United States has been the Inflation Reduction Act. What
25:10
Speaker 9: the One Big Beautiful Act now has effectively done is
25:14
Speaker 9: is remove those tax credits on a set schedule. Now,
25:18
Speaker 9: in the text of the bill, that schedule would be
25:21
Speaker 9: mid next year. However, with an executive order that came out,
25:25
Speaker 9: there's a possibility that these tax credits has been very
25:27
Speaker 9: fundamental for the build up and expansion of renewable energy,
25:32
Speaker 9: that those might actually become very difficult to find at
25:35
Speaker 9: the end of this year.
25:37
Speaker 4: All since that announcement of the change, what's changed actually
25:41
Speaker 4: since then, since that announcement.
25:44
Speaker 9: Yeah, what we saw was an executive order from the
25:46
Speaker 9: Trump administration essentially saying that they're going to really look
25:49
Speaker 9: at how companies claim these tax credits. Now, the details
25:53
Speaker 9: on that are still pretty opaque. A lot of that's
25:55
Speaker 9: going to come from IRS guidance that we're expecting to
25:58
Speaker 9: see in the coming weeks or months. However, there's a
26:01
Speaker 9: couple of things that could be open to debate. For instance,
26:05
Speaker 9: the interpretation of what it means to safe harbor these
26:09
Speaker 9: tax credits, which means proving that you're far enough along
26:11
Speaker 9: that you would still merit the tax credits once you
26:13
Speaker 9: become in service. Those definitions could change at the moment.
26:17
Speaker 9: Usually there's a look at five percent of capex commitment
26:21
Speaker 9: or some amount of equipment being procured, that sort of
26:25
Speaker 9: thing as an indicator. If that changes, that could change
26:28
Speaker 9: which projects are eligible. We could also see differences in
26:31
Speaker 9: the timelines around how long you can have to become
26:35
Speaker 9: in service in order to claim the tax credit.
26:37
Speaker 2: Any sense at this early stage, Meredith, how this will
26:41
Speaker 2: affect this overall transition to cleaner energy? Is this a
26:45
Speaker 2: material bump in the timeline?
26:50
Speaker 9: Unfortunately? I think it is, and that's hard because renewables
26:53
Speaker 9: are the fastest technology to deploy in the US right now.
26:56
Speaker 9: So the segment's been talking a lot about data centers
26:59
Speaker 9: around the need from power in the United States. That
27:02
Speaker 9: power is not going to come from nuclear tomorrow. It's
27:04
Speaker 9: going to come from solar, a project that takes six
27:07
Speaker 9: months to deploy. What we're finding is that there's sort
27:11
Speaker 9: of a couple of sectors that are particularly impacted. On
27:14
Speaker 9: Shore wind, for instance, is affected a lot because it's
27:17
Speaker 9: quite location sensitive. What the tax credits did was it
27:20
Speaker 9: allowed more projects to be able to break even at
27:23
Speaker 9: the same rate of return, even with the change in
27:26
Speaker 9: the quality of the wind speed that was in that area.
27:29
Speaker 9: Now you're going to have to be a lot more picky.
27:32
Speaker 9: Even with solar, especially things like rooftop solar. The tax
27:36
Speaker 9: credits that are available for homeowners are disappearing by the
27:38
Speaker 9: end of this year. When you're looking at more utility
27:41
Speaker 9: scale solar, we think that is more robust, just because
27:44
Speaker 9: it's so cheap. But there are concerns around what's called
27:48
Speaker 9: the Foreign Entities of Concern FBOC categorization and how that
27:53
Speaker 9: will get calculated, how that exposure will get calculated once
27:57
Speaker 9: IRS guidance comes out. That could be complex because a
28:00
Speaker 9: lot of solar modules, despite an increase in local manufacturing,
28:03
Speaker 9: are still imported.
28:04
Speaker 4: What changes could the act mean for data centers for
28:09
Speaker 4: manufacturing sites.
28:11
Speaker 9: So as of right now, a data center is much
28:14
Speaker 9: more likely to be operational. It's connected to the grid.
28:17
Speaker 9: So at the end of the day, the biggest thing
28:19
Speaker 9: that the US needs, which wasn't addressed at all in
28:21
Speaker 9: this budget bill, is more invested in transmission distribution CRAD
28:25
Speaker 9: networks so that you can actually connect outside of that.
28:30
Speaker 9: Renewables are the easiest thing to deploy, So if you're
28:32
Speaker 9: talking about more power demand being on the system, you
28:36
Speaker 9: need to generate more power. It's one thing to produce
28:39
Speaker 9: natural gass, another thing to make that into electricity that
28:42
Speaker 9: a data center can use. That requires a turbine. We're
28:46
Speaker 9: seeing very long wait times on the supply chain for
28:48
Speaker 9: new gas turbines for power plants nuclear capacity. Similarly, if
28:53
Speaker 9: it's not a restart, can take maybe a decade before
28:57
Speaker 9: it'll be online. If you want something online now, the
29:00
Speaker 9: vast majority of planned and permittive projects in the US
29:03
Speaker 9: are wind, solar, and storage.
29:05
Speaker 4: Our thanks to Meredith adds bn EF head of Clean Power.
29:08
Speaker 2: Staying in the Energy space, guest host Normal Linda and
29:11
Speaker 2: I recently spoke with Isabelle Bomecki. Isabelle is a nuclear
29:14
Speaker 2: electricity influencer and author.
29:16
Speaker 4: She's also a former model who is built a following
29:19
Speaker 4: discussing the role of nuclear energy to fight climate change.
29:22
Speaker 4: Her upcoming book, rad Future will be released this summer.
29:26
Speaker 4: The book focuses on nuclear electricity and its effectiveness.
29:29
Speaker 2: I began the conversation with isabel by asking about some
29:32
Speaker 2: of the points she's trying to get across to our
29:34
Speaker 2: audience when it comes to nuclear energy.
29:36
Speaker 10: Well, first of all, I think when we talk about
29:39
Speaker 10: nuclear energy, it's very important to highlight so this is
29:42
Speaker 10: the most reliable source of clean energy. And so when
29:46
Speaker 10: we're talking about a transition to clean energy, which is
29:49
Speaker 10: what we all know are aiming to do, we have
29:52
Speaker 10: to make sure we remain with the stable grid, and
29:55
Speaker 10: nuclear really helps with that. We've seen around the world
29:58
Speaker 10: that places that turn of from nuclear end up with
30:02
Speaker 10: thirtier and less reliable grids. But there are so many
30:05
Speaker 10: other benefits. For instance, a nuclear power plant employees up
30:09
Speaker 10: to one thousand people who have very high being stable jobs,
30:13
Speaker 10: union jobs. It's the source of energy that uses the
30:15
Speaker 10: least materials, the least amount of land, and more importantly,
30:19
Speaker 10: as we're witnessing right now, it's a source of energy
30:22
Speaker 10: that has bipartisan support. In the United States. The Biding
30:25
Speaker 10: administration was extremely pro nuclear and so is the Trump administration.
30:29
Speaker 10: So I think those are all things that we need
30:31
Speaker 10: to take into consideration when we're talking about a clean
30:34
Speaker 10: energy future as well.
30:36
Speaker 11: So back in twenty nineteen, there was the Aulstragian bush
30:39
Speaker 11: fire season, and then additionally we had the Amazon rainforest wildfires.
30:43
Speaker 11: Both of these events really helped to inspire you to
30:46
Speaker 11: become a part of the solution. When we think about
30:48
Speaker 11: fighting climate change. How much progress has been made in
30:52
Speaker 11: that fight against climate change since then?
30:55
Speaker 10: Well, some progress, but as always, our energy and you
31:00
Speaker 10: were talking about this beforehand, our energy demand just keeps
31:04
Speaker 10: increasing because we keep inventing newer technologies that use a
31:07
Speaker 10: lot of energy. Right now, you know, ten years ago
31:10
Speaker 10: it was cryptocurrencies. Right now we're talking about AI and
31:13
Speaker 10: the huge increasing energy demand, and so I think unfortunately
31:18
Speaker 10: we just you know that everyone out of way is
31:20
Speaker 10: to use more and more energy. So while some progress
31:22
Speaker 10: has been made, our demand has also increased, so we're
31:25
Speaker 10: still burning a lot of fossil fuels. About eighty percent
31:28
Speaker 10: of the world's energy is still provided by by fossil fuels.
31:33
Speaker 10: So we have to keep investing in these technologies, and
31:36
Speaker 10: this is where nuclear can play a really big role.
31:39
Speaker 10: It's already the second largest source of clean energy in
31:42
Speaker 10: the world, just behind hydropower. It is the largest source
31:45
Speaker 10: of clean energy in the United States, and I think
31:48
Speaker 10: for you know, over three decades it was completely ignored
31:52
Speaker 10: for a variety of reasons, and some of them is
31:55
Speaker 10: the fears around accidents, which we can talk about a
31:58
Speaker 10: little bit as well. So it's very important that we're
32:01
Speaker 10: now investing in this technology again so that we can
32:04
Speaker 10: speed up this transition to clean energy.
32:06
Speaker 2: Isabelle talk to us about modular plants. We don't have
32:10
Speaker 2: to go and build these monster plants that we see occasionally.
32:12
Speaker 2: I know one most recent one was built years ago
32:15
Speaker 2: in Georgia. Talked just about the smaller modular plants, how
32:18
Speaker 2: that technology could.
32:19
Speaker 10: That be used. So I think we actually do need
32:22
Speaker 10: to build some of the large plants, because as much
32:26
Speaker 10: as small modular reactors or these new technologies that people
32:29
Speaker 10: are very very excited about. Unfortunately, if I'm a utility
32:33
Speaker 10: or a data center, I cannot go and buy one
32:36
Speaker 10: of those off the market just yet. None of those
32:38
Speaker 10: companies have built prototypes, so we're still pretty far from
32:42
Speaker 10: them being commercially available. In the meantime, we have to
32:45
Speaker 10: build the existing technologies that we have. But some of
32:49
Speaker 10: the benefits that the small modular companies claim they will
32:53
Speaker 10: have is they'll be able to reduce costs, time to build,
32:57
Speaker 10: and so on. But again, all of this has yet
32:59
Speaker 10: to be proven, and so I think we cannot put
33:01
Speaker 10: all of our eggs in that one basket. We have
33:04
Speaker 10: to invest in technology that we already know works.
33:08
Speaker 11: So it's about you have a book called rad Future.
33:10
Speaker 11: What's that all about?
33:11
Speaker 10: So Red Future was inspired really by my own need
33:15
Speaker 10: to have an accessible book about nuclear electricity. To your point,
33:19
Speaker 10: In twenty nineteen, I saw the fires in Australia and
33:22
Speaker 10: the Amazon and that inspired me to do something using
33:25
Speaker 10: my platform that I had built as a fashion model,
33:29
Speaker 10: to do something about climate. And at the time I
33:32
Speaker 10: tried buying books that explained how nuclear worked, and I
33:35
Speaker 10: couldn't find anything that was accessible. It took me many,
33:39
Speaker 10: many years of research to get to a point where
33:40
Speaker 10: I could break down this information about nuclear, the history,
33:44
Speaker 10: the history of the anti nuclear movement, and the technology
33:46
Speaker 10: itself into something that was extremely accessible. And so Red
33:51
Speaker 10: Future was inspired by that, by a need to provide
33:53
Speaker 10: accessible material. And I think it's such an important topic
33:57
Speaker 10: that right now is being discussed everywhere, and I think
34:01
Speaker 10: people should be able to learn about the technology and
34:03
Speaker 10: answer their questions.
34:05
Speaker 2: Is it well with the Trump administration to used inse
34:07
Speaker 2: that nuclear power may get more support, less support, or
34:12
Speaker 2: no real change.
34:13
Speaker 10: No, the Trump administration is extremely supportive of nuclear. He
34:17
Speaker 10: passed several executive orders mandating the acceleration of nuclear in
34:22
Speaker 10: the United States to be determined what's going to happen. Also,
34:27
Speaker 10: in the One Big Beautiful Bill, they basically maintained all
34:30
Speaker 10: the support, the credits, the credit techs, and the LPO
34:35
Speaker 10: guarantees for nuclear as well. So the administration is extremely
34:38
Speaker 10: supportive of nuclear. Hopefully this will play out in the
34:42
Speaker 10: real world, but it's still to be determined, depending on
34:45
Speaker 10: some of the nuances of the text credits.
34:48
Speaker 4: Our thanks to nuclear electricity influencer and author Isabelle bo Mecki.
34:53
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