Latest / Bloomberg Intelligence / Anthropic Finalizing $15 Billion Pre-IPO Credit Facility

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Anthropic Finalizing $15 Billion Pre-IPO Credit Facility · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts.
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  Speaker 3: Radio.
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  Speaker 2: News.
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  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
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  Speaker 4: you get your podcasts or watch us live on YouTube.
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  Speaker 5: There is going to be a lot of attention on
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  Speaker 5: the tech space. Always is the march to highly anticipated
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  Speaker 5: initial public offerings for both Anthropic and OpenAI continues. Who's
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  Speaker 5: going to blink first? Who's going to get on the
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  Speaker 5: initial public offering going forward? Let's bring in Bailey Lipschultz
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  Speaker 5: to talk more about this because there has been some
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  Speaker 5: news as far as Anthropic's upcoming IPO is concerned. Bailey
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  Speaker 5: is a senior equities reporter for Bloomberg News. Nice to
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  Speaker 5: see you once again, Bailey. So the news is that
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  Speaker 5: Anthropic is set to expand its revolving credit facility from
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  Speaker 5: a target of $ 10 billion to $ 15 billion. Why is
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  Speaker 5: this important ahead of the.
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  Speaker 3: IPO?
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  Speaker 2: It's important because... It shows that this IPO is going
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  Speaker 2: to happen sooner than later. And it's also important because
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  Speaker 2: as we broke out last night, not only is it
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  Speaker 2: a very large revolving credit facility, as you had mentioned,
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  Speaker 2: they'd been targeting $ 10 billion. We put that out last month.
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  Speaker 2: When you compare it to SpaceX's, it's larger than what
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  Speaker 2: they had, which was $ 5 billion before their IPO. So
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  Speaker 2: three times as large.
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  Speaker 1: So that's a big deal. It's also a big deal because.
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  Speaker 2: Now you're getting a lay of the land of what
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  Speaker 2: the IPO mandates should be. So this deal was led
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  Speaker 2: by Morgan Stanley, Goldman Sachs, JP Morgan, Citigroup had key
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  Speaker 2: roles in it. Barclays and Wells Fargo also had key
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  Speaker 2: roles in it. So that's notable if you're at those
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  Speaker 2: banks or you have relationships with those banks from an
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  Speaker 2: IPO perspective. And as we broke out, it kind of
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  Speaker 2: expands in the so-called second line, B of A, Deutsche Bank, RBC,
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  Speaker 2: and UBS. And again, that does matter because now people
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  Speaker 2: can kind of get a sense where their sales relationships
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  Speaker 2: are going to pay off if they're trying to get
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  Speaker 2: a piece of this IPO. And also from those banks,
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  Speaker 2: it's a big step for what will be a potentially
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  Speaker 2: record-setting fee event from their ECM desk. So again, this was,
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  Speaker 2: as we reported last night, being finalized, probably is finalized
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  Speaker 2: by now since ECM. It's about noon on Friday, and
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  Speaker 2: that sets the table really for this offering.
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  Speaker 5: The memories are still fresh of the competition, the touting
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  Speaker 5: around the SpaceX IPO. There were mock-up rockets in the
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  Speaker 5: lobbies of Goldman Sachs and Morgan Stanley with the banners.
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  Speaker 5: I mean, talk about the anticipation going into Anthropic here,
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  Speaker 5: potentially the first of the big chatbot startups to go public.
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  Speaker 2: No, there's a lot of excitement. And you referenced those
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  Speaker 2: spaceships that we saw. And I remember going through Morgan
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  Speaker 2: Stanley's offices and kind of laughing because it's just huge.
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  Speaker 2: And it seemed like a beauty pageant as opposed to
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  Speaker 2: the normal, like, welcome to X company sign. It's like
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  Speaker 2: a three foot by three foot sign. This was an
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  Speaker 2: entire branding event. And we saw that promotion from Goldman
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  Speaker 2: Sachs that they were lead left. And Morgan Stanley saying, oh, well,
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  Speaker 2: we're stabilization agent, which means something if you are in
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  Speaker 2: the IPO world, but for the rest of the world
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  Speaker 2: really means nothing. This is highly anticipated, Nathan, because again,
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  Speaker 2: to your point, the first relative to the other LLMs,
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  Speaker 2: namely OpenAI, and again, why it matters is the scale
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  Speaker 2: of growth that we've seen and reported on this company,
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  Speaker 2: and we'll see when they publicly file, where you're talking
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  Speaker 2: about ARR, as much as that can be debated, over
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  Speaker 2: $ 65 billion. There aren't many companies in the world that
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  Speaker 2: really generate that kind of growth when you look at
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  Speaker 2: where Anthropic was three months ago, a year ago. And
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  Speaker 2: so there's so much excitement, so much of anticipation around
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  Speaker 2: what the valuation target will be, what the ultimate filings
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  Speaker 2: even will show, and how people can kind of position
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  Speaker 2: around what, again, is going to be another likely record-setting
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  Speaker 2: event when it seems like just a few months ago
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  Speaker 2: we were only talking about SpaceX and how that is
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  Speaker 2: going to impact the entire market.
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  Speaker 5: Yeah, so many zeros behind these IPO numbers, potentially. And
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  Speaker 5: at the same time, you know, Anthropic has been butting
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  Speaker 5: heads with the federal government. We just talked with Commerce
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  Speaker 5: Secretary Howard Lutnick saying that Anthropic's found religion since then. And,
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  Speaker 5: you know, hearing from OpenAI CEO Sam Altman as well,
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  Speaker 5: talking about the potential PR issues that artificial intelligence has
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  Speaker 5: as well. Maybe they need to sell the benefits of
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  Speaker 5: AI a little better to the public as opposed to investors.
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  Speaker 5: How does that potentially affect an IPO?
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  Speaker 2: Well, I think it's a big discussion. And obviously, we
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  Speaker 2: saw this with a number of companies, depending on the industry,
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  Speaker 2: sometimes under scrutiny, other times under scrutiny. kind of riding
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  Speaker 2: the high of what the administration maybe is pushing forward.
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  Speaker 2: And I think it'll be an interesting discussion when we
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  Speaker 2: do see them formally on the road. So something that'll
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  Speaker 2: probably take place, call it late September, maybe into early October,
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  Speaker 2: where they're able to really craft the narrative. Because right now,
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  Speaker 2: so much of these conversations are happening behind closed doors
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  Speaker 2: and it's about positioning when they're ultimately on the road.
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  Speaker 2: And when we do see IPOs being priced, what does
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  Speaker 2: that bring from some of the members of Congress hypothetically?
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  Speaker 2: And what does it ultimately mean for individual investors to Again,
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  Speaker 2: it kind of goes back to the debate of Wall
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  Speaker 2: Street isn't emblematic of the rest of the nation. Same
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  Speaker 2: thing with D.C. So it'll be interesting to see how
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  Speaker 2: these different themes can be kind of either put against
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  Speaker 2: each other or layered over one another.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 5:53
  Speaker 4: Auto with the Bloomberg Business app. Listen on demand wherever
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  Speaker 4: you get your podcasts or watch us live on YouTube.
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  Speaker 5: All right. Well, let's move on to one of the
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  Speaker 5: big stock stories that we're watching this morning. That would
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  Speaker 5: be Adobe. The creative software maker reports earnings next week
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  Speaker 5: before the inflation data come out. But We also saw
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  Speaker 5: a long-awaited leadership change that now has that stock down
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  Speaker 5: nearly 7%. Let's bring in Anurag Rana to talk more
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  Speaker 5: about what's going on with Adobe. Anurag is Senior Tech
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  Speaker 5: Analyst for Bloomberg Intelligence. Great to speak with you, Anurag.
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  Speaker 5: Of course, we've been waiting for this announcement for quite
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  Speaker 5: some time here, and it looks like maybe there's a
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  Speaker 5: sense that one of the contenders for Shantar Narayan's job
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  Speaker 5: is may have been passed over with Anil Chakravarty, the
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  Speaker 5: marketing analytics software guy, getting the nod. What do you
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  Speaker 5: make of the decision here and the stock reaction?
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  Speaker 6: So you go back and let me see the history
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  Speaker 6: of Adobe of what's happened in the last two years.
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  Speaker 6: This is the poster child of a software company being,
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  Speaker 6: you know, hurt by free AI tools. Now that hasn't happened,
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  Speaker 6: but the market obviously has written it off that Adobe
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  Speaker 6: is going to be one of the casualties of new
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  Speaker 6: AI models. And that's the reason we think Shantanu decided
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  Speaker 6: to step down and, you know, move on and appoint
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  Speaker 6: a new CEO. Now, the two contenders that we have is,
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  Speaker 6: as you mentioned, it was David Valdwani on one side
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  Speaker 6: and it was Anil Chakraborty on the other side. Now,
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  Speaker 6: Anil runs the smaller of the bigger two divisions of Adobe,
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  Speaker 6: and the division is not Creative Cloud, the one where
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  Speaker 6: we have the most of the disruption. It's just like
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  Speaker 6: what happens in a particular boardroom. One of them got
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  Speaker 6: the job and the other one didn't. I think all
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  Speaker 6: of us or a lot of us in the market
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  Speaker 6: thought that the executive that was running the Creative Cloud
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  Speaker 6: portfolio would get it because that's where the disruption risk is. Now,
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  Speaker 6: it's very much likely when the board looked at everything,
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  Speaker 6: you know, Anil has experience of running a public or
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  Speaker 6: a big, large company before. He was the CEO of
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  Speaker 6: Informatica before he came over to Adobe. So that could
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  Speaker 6: have been reasons or some other reason. But I think
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  Speaker 6: there is a little bit of disappointment with investors. Now,
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  Speaker 6: you know, I would also want to mention that it's
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  Speaker 6: possible that somebody was expecting somebody from outside to come in.
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  Speaker 6: Maybe that's the reason. But one of the other things
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  Speaker 6: is that the stocks actually had a 35%, 40% run previously.
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  Speaker 6: from its lows over the last few months, ever since
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  Speaker 6: we have seen kind of a reversal between the semi
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  Speaker 6: and the software trade. So this could be another sellout
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  Speaker 6: because of that. So there are multiple factors here.
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  Speaker 3: Okay.
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  Speaker 7: Anirag, what is Adobe in the AI world in terms
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  Speaker 7: of their business?
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  Speaker 6: So, so far, we have not seen any deterioration in
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  Speaker 6: their fundamentals because of free AI tools. Now, that is
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  Speaker 6: going to happen really in our view on the lower
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  Speaker 6: end of it. So if there is somebody on the
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  Speaker 6: lower end, let's say if I was using their Lightroom,
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  Speaker 6: which is $ 9. 99 a month for a period of 12 months,
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  Speaker 6: I may decide, you know what, the Google tools are
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  Speaker 6: free enough and that's good. But so far, what we
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  Speaker 6: have not seen is serious photographers, seriously creative people are
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  Speaker 6: abandoning Adobe's tools and going out for free tools. So
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  Speaker 6: that's the first thing. What Adobe has done to counter
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  Speaker 6: this threat is it has its own AI tools that
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  Speaker 6: people can use. And then as they use a lot
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  Speaker 6: of it, they can move on to the higher subscription
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  Speaker 6: package where they can do Creative Cloud. You can store
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  Speaker 6: that document. You can do a lot more with it
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  Speaker 6: on the cloud. So there are elements of usage for
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  Speaker 6: them using AI tools themselves that they are really pushing aggressively.
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  Speaker 6: And we will see how that shapes up over the
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  Speaker 6: next couple of years.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
• 9:50
  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 9:54
  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 9:57
  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
• 10:00
  Speaker 4: you get your podcasts or watch us live on YouTube.
• 10:05
  Speaker 5: You are listening to Bloomberg Intelligence. Paul Sweeney is taking
• 10:08
  Speaker 5: a much deserved long Labor Day weekend off. Scarlett Fu
• 10:12
  Speaker 5: is going to be back shortly. So it's me, Nathan
• 10:14
  Speaker 5: Hager in Washington. along with Caroline Hepker taking you through
• 10:18
  Speaker 5: the rest of the hour. And Caroline, I'm not going
• 10:20
  Speaker 5: to ask you what you wear at the gym. That
• 10:22
  Speaker 5: would be inappropriate. But it seems like a number of
• 10:26
  Speaker 5: consumers or not enough consumers are taking Lululemon with them
• 10:30
  Speaker 5: to the yoga mats. The Athleisure company, the Yoga Wear company,
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  Speaker 5: has cut its full year outlook for the second straight quarter.
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  Speaker 5: Shares right now down more than 17%. That's actually off
• 10:45
  Speaker 5: session lows. Tough job ahead on this Jobs Friday for
• 10:50
  Speaker 5: incoming CEO Heidi O'Neill to turn this company around. Let's
• 10:55
  Speaker 5: bring in Poonam Goyal to talk more about this. Poonam,
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  Speaker 5: the senior U.S. e-commerce and retail analyst for Bloomberg Intelligence,
• 11:03
  Speaker 5: who covers this company so ably quarter to quarter. Poonam,
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  Speaker 5: The struggle continues to be real at Lululemon. What's it
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  Speaker 5: going to take to turn this company around?
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  Speaker 3: It's going to take a lot of work, and it's
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  Speaker 3: not a guaranteed turnaround. As Heidi steps in next week,
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  Speaker 3: there's a lot to fix here, starting with product, innovation, traffic,
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  Speaker 3: brand heat, and getting the customer the right assortment. So
• 11:33
  Speaker 3: there's a lot of moving pieces. She also has some
• 11:36
  Speaker 3: holes to fill in terms of her executive team because
• 11:39
  Speaker 3: there were some recent departures. So a lot of moving pieces.
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  Speaker 3: I don't see how this will happen immediately. I'm skeptical
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  Speaker 3: that it will happen in the next six months and
• 11:52
  Speaker 3: we'll have to see what plan she puts forward. She
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  Speaker 3: is a product person, right? She comes from Nike, but
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  Speaker 3: Nike and Lululemon are very different yet alike. So we'll
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  Speaker 3: have to see what she has plans for, but it
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  Speaker 3: will not be an easy climb. Yeah.
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  Speaker 7: Lululemon's shares dropping to an eight year low. I just
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  Speaker 7: had to look up the cost of those famous yoga
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  Speaker 7: pants between 88 bucks and 128 bucks. Oh, is that all?
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  Speaker 7: And there's a lot of competition. And in Europe, you know,
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  Speaker 7: where I sit most of the time, Adidas and Nike,
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  Speaker 7: they've seen this kind of cycle also of trying to
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  Speaker 7: grab the consumer, having the zeitgeist.
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  Speaker 3: What does it take?
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  Speaker 7: I mean, I was looking at the tennis this week.
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  Speaker 7: It was all about, you know, have the right shoe,
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  Speaker 7: the right fashion. Is actually at leisure high fashion now?
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  Speaker 3: So there's a few things that you have to look at. One, yes, absolutely,
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  Speaker 3: you have to get the right performance. So when you
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  Speaker 3: think about yoga wear and you think about performance wear,
• 12:56
  Speaker 3: there's two ways to look at it. When you're looking
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  Speaker 3: at it for women specifically, it's about performance, it's about fit,
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  Speaker 3: and it's about style. All three of them need to
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  Speaker 3: come together. And they did for Lululemon several years ago.
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  Speaker 3: That's not the case today. Nike and Adidas, largely male-dominated brands,
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  Speaker 3: are also now... making a much bigger push into women's.
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  Speaker 3: And they have done a good job, but they focus
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  Speaker 3: on performance first. Nike Skims was its first attempt to
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  Speaker 3: really focus on the fashion per se cycle of yoga
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  Speaker 3: wear or athletic wear, as you call it. And I
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  Speaker 3: think the competition is just getting deeper and smarter. And
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  Speaker 3: It's harder to differentiate between product today than it was
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  Speaker 3: a long time ago. The other thing is people want
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  Speaker 3: things that aren't stuck to them, right? So the away
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  Speaker 3: from body trend is rising and it's not big enough
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  Speaker 3: to offset what had been the legging trend. So there's
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  Speaker 3: a lot of moving pieces here. And I think it's
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  Speaker 3: a combination of macro micro that's really driving the shortfall.
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  Speaker 5: It gets to one of the issues that I think
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  Speaker 5: a lot of consumers, maybe a lot of investors had
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  Speaker 5: about Lululemon over the last couple of years, the see-through
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  Speaker 5: leggings issue. Has Lululemon gotten past that? And if not,
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  Speaker 5: how can it?
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  Speaker 3: Yeah, it's definitely moved past that. And you're talking about
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  Speaker 3: the Align leggings and when they were see-through several years ago,
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  Speaker 3: they moved past that. We saw that in the results
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  Speaker 3: with double-digit gains for several years past that. That's not
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  Speaker 3: the issue today. The issue is how is Lululemon better
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  Speaker 3: than what's out there? And I don't have an answer
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  Speaker 3: for that. I don't think they are. So how did
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  Speaker 3: they get better? And that's what Heidi has to answer.
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  Speaker 3: What is she going to fix? And are customers going
• 14:45
  Speaker 3: to come back with that same enthusiasm? When you walk
• 14:50
  Speaker 3: the mall several years ago, and this is when malls
• 14:52
  Speaker 3: were kind of falling and traffic was weak, the two
• 14:55
  Speaker 3: stores that were always crowded, or three stores, I should say,
• 14:58
  Speaker 3: in the mall whenever I went, was the Apple store,
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  Speaker 3: the Sephora store, and the Lululemon store. Today, Sephora's still crowded,
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  Speaker 3: Apple's still crowded, but Lululemon is not. So how do
• 15:09
  Speaker 3: we fix that?
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  Speaker 6: Yeah.
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  Speaker 7: Well, I was in all of those stores in Manhattan
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  Speaker 7: this week. This is nuts. And I was also in
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  Speaker 7: the Nike store, in fact, and saw the skims, the
• 15:21
  Speaker 7: kind of... And it was interesting. They are still in
• 15:24
  Speaker 7: the kind of skin-tight... mold, aren't they? And sort of
• 15:28
  Speaker 7: high fashion, very bright colors. Anyway, what about the global business?
• 15:32
  Speaker 7: What about China for Lululemon? I mean, China is surely
• 15:36
  Speaker 7: massively important for so many US businesses. It's been tough there.
• 15:41
  Speaker 3: It is absolutely important for Lululemon and everyone else. So
• 15:45
  Speaker 3: a 4% increase in China, not what anyone had expected,
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  Speaker 3: down in constant currency. They're blaming it on the Tmall
• 15:52
  Speaker 3: promotions that they had and the comparisons with that. They
• 15:55
  Speaker 3: do expect China to accelerate and so do we on
• 15:59
  Speaker 3: the heels of following that promotion and not having the compares.
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  Speaker 3: But that said, it's not accelerating as it was. So
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  Speaker 3: there is some slowdown there. And I wonder if the
• 16:08
  Speaker 3: slowdown is to blame on just the carryover from North
• 16:11
  Speaker 3: America where the product isn't good enough. And we also
• 16:15
  Speaker 3: have to remember that there's another thing happening in athleisure, right?
• 16:19
  Speaker 3: And this is something that we haven't talked about as much,
• 16:21
  Speaker 3: but it's the GLP-1s. So as more and more consumers
• 16:24
  Speaker 3: are taking GLP-1s, they're not going to the gym as much, right?
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  Speaker 3: They're not exercising as much. So does that mean that
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  Speaker 3: they need fewer athleisure wardrobes? And that's just something that
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  Speaker 3: we're looking at very early on. But that could be
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  Speaker 3: a very small part of just the shortfall that we've
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  Speaker 3: seen in athleisure, not just at Little Lemon, but broadly.
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  Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
• 16:53
  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 16:57
  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 17:00
  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
• 17:04
  Speaker 4: you get your podcasts or watch us live on YouTube.
• 17:08
  Speaker 7: I want to talk about a major story out of Europe.
• 17:11
  Speaker 7: This is VW slashing jobs, Volkswagen, the board backing a
• 17:16
  Speaker 7: sweeping restructuring. How is it really going to play out, though?
• 17:22
  Speaker 7: Where are those jobs cuts going to come? Craig Trudell
• 17:26
  Speaker 7: is Bloomberg's Managing Editor of Global Business Coverage. Really lovely
• 17:30
  Speaker 7: to have you on the program. So this is the
• 17:32
  Speaker 7: big question, isn't it? It's thousands of job cuts, but
• 17:36
  Speaker 7: are they really going to happen in Germany or is
• 17:38
  Speaker 7: it going to be outside of Germany?
• 17:40
  Speaker 8: That is sort of the perpetual question with Volkswagen. And
• 17:43
  Speaker 8: it's long been a well-established fact that this is a
• 17:47
  Speaker 8: company that has way more employees than any other major
• 17:50
  Speaker 8: auto manufacturer. And that so many of those employees are
• 17:55
  Speaker 8: concentrated in Germany. And that sort of perpetuates in part
• 17:58
  Speaker 8: because you have a situation where the Works Council and
• 18:02
  Speaker 8: the German state of Lower Saxony have this very powerful
• 18:06
  Speaker 8: labor political alliance and that sort of adds up to
• 18:10
  Speaker 8: this exercising of unique sort of veto over management when
• 18:15
  Speaker 8: they do choose to act, which we're seeing Oliver Bluma,
• 18:19
  Speaker 8: the current CEO, at least making yet another attempt.
• 18:24
  Speaker 5: Of course, this company has been at the center of
• 18:27
  Speaker 5: the automotive industry, arguably throughout Europe for decades in a
• 18:31
  Speaker 5: country that's the economic powerhouse of Europe. To have this
• 18:35
  Speaker 5: kind of retrenchment now, this slim down, what does it
• 18:39
  Speaker 5: say about the overall automotive industry in Europe, Craig?
• 18:43
  Speaker 8: I think the big thing that's sort of hanging over
• 18:46
  Speaker 8: everybody's heads in Europe at the moment is just the
• 18:50
  Speaker 8: sort of unending rise of the Chinese manufacturers. You've already
• 18:54
  Speaker 8: had a situation where this is an extremely crowded market.
• 18:59
  Speaker 8: Decades ago with the Japanese companies, the Toyotas and Hondas
• 19:03
  Speaker 8: and Nissans moving in, and the Koreans following suit, you've
• 19:07
  Speaker 8: had Chinese companies like BYD, like Geely come in quickly.
• 19:13
  Speaker 8: There was some pushback with an attempt to try and
• 19:17
  Speaker 8: tariff electric vehicles, but that was a fairly narrow application
• 19:22
  Speaker 8: of higher duties. And what you've seen those manufacturers do
• 19:26
  Speaker 8: in response to that is say, OK, we won't come
• 19:28
  Speaker 8: in with fully electric vehicles. We'll come in with plug-in
• 19:31
  Speaker 8: hybrid vehicles that aren't subject to those tariffs. And so
• 19:35
  Speaker 8: it's a sort of one-two punch of you're not achieving
• 19:39
  Speaker 8: your environmental goals and you're not being effective in really
• 19:43
  Speaker 8: keeping those manufacturers at bay.
• 19:46
  Speaker 7: Yeah, look at Cherry's J.Coup. I mean, they're everywhere on
• 19:48
  Speaker 7: the streets of London, aren't they? In a remarkably short
• 19:52
  Speaker 7: space of time. And they're also a very affordable price
• 19:56
  Speaker 7: point for consumers. What is VW's car makeup looking like now?
• 20:02
  Speaker 7: Because the other thing that we have to layer into
• 20:05
  Speaker 7: this are the regulations in the EU and the UK.
• 20:08
  Speaker 7: looking to phase out the sale of petrol and diesel
• 20:12
  Speaker 7: only vehicles. There's a bit of a wrangle about when
• 20:15
  Speaker 7: they're going to do it.
• 20:16
  Speaker 8: Absolutely. I think that's part of another sort of aspect
• 20:20
  Speaker 8: of how and why we get to this place of
• 20:24
  Speaker 8: this company having so many employees and so much layers.
• 20:27
  Speaker 8: You haven't necessarily seen the really sort of difficult, painful
• 20:33
  Speaker 8: cuts that you would need to make to do away
• 20:36
  Speaker 8: with the combustion engine aspects of the business. And meanwhile,
• 20:40
  Speaker 8: you've had all of this addition of attempts to stand
• 20:44
  Speaker 8: up a battery division within the company, software as well.
• 20:49
  Speaker 8: And despite the fact that you've seen failures on both
• 20:52
  Speaker 8: of those fronts, you haven't necessarily seen and ability on
• 20:56
  Speaker 8: this company to be able to sort of address the
• 20:59
  Speaker 8: fact that they've kind of swung and miss. And so
• 21:01
  Speaker 8: you have a lot of employees at divisions like Cariad,
• 21:05
  Speaker 8: which is on the software side, but also the sales
• 21:09
  Speaker 8: business that has a lot of staff and yet not
• 21:12
  Speaker 8: much to show for it in terms of output or
• 21:14
  Speaker 8: things actually going into these vehicles.
• 21:17
  Speaker 5: You know, there is, as Caroline mentioned, that push away
• 21:21
  Speaker 5: from gasoline-powered vehicles toward electrics. It's almost the opposite side
• 21:26
  Speaker 5: of the coin in this country. I've been thinking about
• 21:30
  Speaker 5: the difficulty that the ID.Buzz, a car that I was
• 21:35
  Speaker 5: really looking forward to test driving, has had in this
• 21:38
  Speaker 5: country gaining traction here. Talk a little bit about the
• 21:41
  Speaker 5: challenge in the U.S. for VW when it comes to
• 21:45
  Speaker 5: what drivers in this country are looking for.
• 21:47
  Speaker 7: Are you going to have to tell me what the
• 21:48
  Speaker 7: vehicle is? Yeah.
• 21:53
  Speaker 1: So, so I think it's the old VW bus, VW bus. Yeah.
• 21:57
  Speaker 3: Yeah.
• 21:58
  Speaker 8: Came to market and it looked really neat, but the
• 22:01
  Speaker 8: range was, was pretty disappointing. They had an embarrassing recall
• 22:05
  Speaker 8: right off the bat, having to do with like seatbelts
• 22:07
  Speaker 8: that didn't go far enough across the back seats, which seemed,
• 22:10
  Speaker 8: you know, really hard to believe that, that a manufacturer
• 22:13
  Speaker 8: could get that so wrong. But absolutely, I think Volkswagen
• 22:17
  Speaker 8: is far from alone, I should say, in really having
• 22:20
  Speaker 8: a very difficult time with keeping straight what does the U.S.
• 22:25
  Speaker 8: want in terms of regulation, because we couldn't have had
• 22:31
  Speaker 8: a more extreme swing from Trump 1 to Trump. where
• 22:35
  Speaker 8: he was slashing fuel economy rules to Biden, who put
• 22:39
  Speaker 8: in place the Inflation Reduction Act, really wanted manufacturers to
• 22:44
  Speaker 8: go sort of no holds barred and 50-50 electric and combustion.
• 22:49
  Speaker 8: Now we're going all the way back to, and then
• 22:52
  Speaker 8: some actually, to just completely eviscerating the rules. And it's
• 22:55
  Speaker 8: really hard to keep up with that as a manufacturer
• 22:57
  Speaker 8: that operates over, makes these product decisions with the next
• 23:02
  Speaker 8: decade in mind.
• 23:03
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