Transcripts For BLOOMBERG Bloomberg 20240703

Caroline im Caroline Hyde in new york. Ed and im in san francisco. Caroline tesla asked its investors to approve a pay package. Ed chipmaking orders dive at asml. Our chip stockpiles back . Caroline we will bring you into a conversation with the French Company a toss. In the equity market pulls back a little bit from where it had been. Nevertheless we see bond markets outperform, currently seeing a 20 year yield down to, three basis points. Moving on and looking on the world of crypto. Its been on the downside as the u. S. Dollar is falling. The first time in six days we saw the dollar give up strength as we digest what has been a slightly more hawkish of. Risk assets are still cautious out there. Ed tesla continues to dominate headlines. Down for a fourth straight session. The stock is trading at its lowest level in almost a year and i dont think this has to do with the headlines on the bloomberg terminal. The idea of incorporating in texas, thus about the downward pressure. There is indigestion from the past four days. Layoffs, and elon going in on robotaxis. What is happening . But the stock is under a lot of pressure while the talk from elon musk is finding talk and we have some pretty good guest go over that. Caroline whats so interesting is coming out fighting to delaware, the court, the 2018 pay package and you are not doing enough to push back. Why does the argument go it would cost billions more to renegotiate the pay package . Is interesting the board tried to portray this as a nuisance. This idea that they would have to take on additional expense that the company accounted for. Having to set up these options and satisfy this compensation for musk and do it over again. It does also strike me from the language used that robin done home referred to this idea that the court had taken away shareholder voice. It was the freedom of speech argument. But Corporate Governance critics are not going to look at this fondly. This idea of this award being slapped down on the board going back to the well with the same plan. Ed youve been reading the proxy for the past four hours and 30 minutes. There are some granular detail in it that tesla explains they ran the Compensation Program in the idea of recompensating in texas and my read is that they dont want to be accused of using the text as a corporation as leverage in this patent issue . They want to get the shareholders back in again and make the case that shareholders if they did not already know what went into this award. The Delaware Court brought to light a lot of these details and make clear with the shareholders, are you ok with this or arent you . We have heard rumblings of this idea of the retail shareholders were in an uproar based on the volume of complaints about the way this was handled. Tesla is saying that four of his 10 biggest Institutional Investors communicated that they were in support of this award. There is some reason to think that perhaps the stands a chance of being approved just as it was in 2018. Ed it was a lot of dense tax to go through. Great work, thank you very much. Pierre ferragu from new Street Research what is the story of tessa right now . Pierre the one sentence would be this is a car manufacturer. In order to be successful in manufacturing cars as a platform to do additional amazing things. Driverless driving, they are making exceptional progress. In the long term, the goalposts of being able to do robotaxi. In the opportunity to develop robots on the platform and these things will take years. Elon musk is very impatient and tends to accelerate that momentum but it will take years. In the meantime it still is successful car manufacturer, gain share in the market and in the next 2, 3 years to continue to grow sustainably with Revenue Growth and margin expansion. Ed it was a loaded question but you didnt give me one sentence. The reason i ask it is because im trying to understand the downward pressure on the stock and i dont think it has much to do with the proxy. With all the headlights of the four days which was the most interest to you . Pierre of the last few days the most important ive heard, to digest the headline from last week. We have had elon musk in the designer. This understanding the probably whats happening to tesla they are developing the robotaxi for now because in order to ramp up millions of units of mexico is still too high for three years to wait. My educated guess, lets go all in on robotaxi. And then lets get back to manufacturing later. That was the last big thing of 48 hours. Caroline i love the fact that you give us your reasoning. Should it be down by a third this year . Pierre its a company that makes electric cars said they were in the future of cars. And no one can make electric cars is good and is cost efficiently. This gap is widening. I just recently drove the highlander. It is still mind blowing. In terms of developments i have a lot of sympathy because tesla has been hitting a wall in terms of growth. Has been forced to raise his pricing. They have to reset the bar. That wont happen over a few weeks. Its still not enough to convert. Yes, i have sympathy for that. It continues to work on long term moon shots like the robotaxi. It will take years of recovery. Caroline giving us the shortterm and longterm. Meanwhile, tech earnings, they are upon us. We will dive deeper into what we should expect. What are you looking at. Ed the story, chip contract manufacturers are not ordering chipmaking machines what does that tell us . That is next. This is bloomberg. Good game. Thanks for coming to our clinic, first ones free. So, what are you thinking . Im thinking. speaking to self about our honeymoon. What about africa . Safari . Hot air balloon ride . Swim with elephants . Wait, can we afford a safari . Great question. Like everything, it takes a little planning. Or, put the money towards a downpayment. On a ranch. In montana. With horses lets take a look at those scenarios. J. P. Morgan Wealth Management has advisors in chase branches and tools, like wealth plan to keep you on track. When youre planning for it all. The answer is j. P. Morgan Wealth Management. Caroline a s m l the chip manufacturer having its worst days since 2022. Nevertheless we see a pullback because earnings disappoint. In terms of revenue, it will be lower than the market anticipated. Samsung pulled back on some of the owners they bought for their chipmaking equipment. This shows a chip sector thats recovering. But what of the ai revolution . There are number one market is china. Half of their revenue is coming from china even though we receive those high you ev going to china. Ed china historically is a big market. The historic anxiety is around taiwan, south carolina. The drop was quarter on quarter 60 . By machines that make chips. Lets dig into these markets. Tech earnings around the corner. Ipek ozkardeskaya from Swissquote Group the u. S. Is saying come and build chip factories is going to be great and it gave us capex outlooks for this year and somehow its not so rosy . Ipek this is eyebrow pricing an important to note that in the second half of this year is great to see a rebound in the cap their full year outlook unchanged. This does ointment has left a sour taste in investors mouth and we actually think at some point the growth and Growth Expectation for chipmakers will be leveling out. Its just to see if we see these expectations slow down. That could trigger a sizable correction and profittaking. They expect ai to continue to contribute to the revenues. We expect ai to continue but maybe not in the same way. We expect changes within the ai segment. We saw in the first phase, a benefit to companies in chipmakers, data centers. All of these companies that provide ai tools to other companies. We are thinking there will be a second phase of the ai rallies that will benefit to companies that invest heavily in ai. I think even though we see some disappointment and chipmaking earnings. It will not end. Caroline for the rest of the earnings season, ai expectations . Ipek the expectations around Earnings Growth around 40 for the first quarter. That is still down from 55 . If these signal out things like apple and tesla that have been in trouble while the expectation of Earnings Growth goes up to 18 . Nvidia, microsoft, google, facebook. We will be interested in who within this ai segment will be profiting from ai . The provider of ai tools or shift towards the user . Caroline Ipek Ozkardeskaya Senior Market analyst from Swissquote Group. Jamie dimon and his thoughts on the future of money. His thoughts, that some bloomberg tech knology. Thoughts on bloomberg technology. Caroline Jpmorgan Chase ceo jamie dimon. He is laying out his vision for the future of money in this ai world. This is with bloomberg originals house emily chang. Take a listen. Jamie for any business when you think about risk things could go terribly wrong, can you survive them . It could be technology, government regulations, it could be the weather if you are a restaurant. They could close you down and if you lose this weeks business you out of business. Emily how could fintech replace banks . Jamie hes not wrong the Technology Changes everything. What is banking . Somebody has to hold the money, someone has to move the money, someone has to raise the money. Someone has to research the money. Those services will still need to be around and tech helps us do a better job of it. I have been writing about big tech and are business. We have fintech and they have big tech. I would be against an unfair use of their position to dominate a business. Apple is going into financial. Jamie if they hold money and move money they are a competitor. We partner with people. Emily existential threat . Jamie if we were complacent about it, yes. Ed that was Jpmorgan Chase ceo, jamie dimon. He is one of the most obsessed about people. A highflying executive. The circuit series to you get people in a chair but being themselves. How did she do with this time around . Emily in london and he was just there for a tech conference. It was the most of making use of every moment. The chitchat before the formal sit down and we talked about how many days hes on the road each year. Childhood, family. I asked how are you doing and he said what you mean . How do you juggle it all . You usually ask that to a woman. You dont usually ask jamie dimon. Family actually comes first and that is where we started and we tried to open it up from there. Caroline you got him to speak about his family and you outside of both men and women and how ai is changing its business . Emily ai is a big part of the season as its a huge part of your show. We can avoid it. One of the questions i had for him chatgpt i have 30 years what should i do with my money . Its already embedded in everything and learn more and more about you. What if you ask how to get rich quick and he said i hope it tells you thats impossible. Ed real quick, what are you doing this season . Emily we go to see mary barra in detroit. We get to know her behindthescenes. The founder of oculus in making drones, satellites, warfare. I think you will love it. Ed you can catch the full episode tonight here on bloomberg. Caroline coming up, regulation that could be coming up next month two. Thats coming up. When people come, they say theyve tried lots of diets, nothings worked or theyve lost the same 10, 20, 50 pounds over and over again. They need a real solution. Ive always fought with 510 pounds all the time. Eating all these Different Things and nothings ever working. Ive done the diets, all the diets. Before golo, i was barely eating but the weight wasnt going anywhere. The secret to losing weight and keeping it off is managing insulin and glucose. Golo takes a systematic approach to eating that focuses on optimizing insulin levels. We tackle the cause of weight gain, not just the symptom. When you have good metabolic health, weight loss is easy. I always thought it would be so difficult to lose weight, but with golo, it wasnt. The weight just fell off. I have people come up to me all the time and ask me, does it really work . And all i have to say is, here i am. It works. My advice for everyone is to go with golo. It will release your fat and it will release you. Youre probably not easily persuaded to switch mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless bill versus the big three carriers . You can get two unlimited lines for just 30 each a month. All on the most reliable 5g mobile network nationwide. Wireless that works for you. For a limited time, ask how to save up to 830 off an eligible 5g phone when you switch to comcast business mobile. Dont wait call, click or visit an xfinity store today. Ed tesla off. 7 . Still down for fourth straight session. We talked about the reasons why earlier in the show to stop the below 500 billion now in market cap. I am looking for stories, clear downward direction in the market. Tesla is one name that contributes. Bitcoin is interesting. During the course of the show we are now down to 6000 u. S. Dollars per token on bitcoin a drop of 4 on the session of an asset that there trades 24 7. On the bloomberg terminal there with ranting about the real world use case. Atms in latin america becoming mainstay and the industry bracing. Lots of people say they are ready. Look at technology rates of stocks linked to crypto. They are also seeing downward pressure and we have other pieces of news from that industry too. The Grayscale Investment ceo says the market for u. S. Spot get one spot bitcoin etf is still relatively new. In an exclusive conversation the ceo spoke about the sec approval of bitcoin etf and the long road to regulatory approval. Even though they have now been in market for three and a half months we still dont have listed options on spot bitcoin etfs. It is an important feature investors want and deserve. It can help investors manage their positions and manage risk. Ultimately i believe the sec should approve these though they are once again not in a position to trot treat spot bitcoin etfs from Bitcoin Futures based etfs. Ed moving onto stable coins. Amid a push in the house and senate to pass such legislation as soon as next month. Senator loomis and senator gillibrand are proposing a measure that would ban algorithmic stable coins saying the bill would protect consumers and the u. S. Dollar while enabling innovation in payment. I saw a headline on the terminal this morning that says the legislation has momentum. Does it . Kailey this is an initiative by these senators that have introduced in the past wider legislation to set regulatory standards for the industry as a whole. This is a much narrower effort and perhaps the narrowness could get this across the finish line in a way other efforts havent. We are talking about a framework for stable coins that would ban algorithmic stable coins. An example of and around grzelcyk and algorithmic stable coins that looms large in our head is terra usd that was supposed to be paid one to one by the dollar but instead of being backed by reserve use smart contracts to try to keep the peg that worked until it is not and it collapsed on a Fabulous Fashion with 40 billion wiped out. They want to avoid that in the future. This regulation would not allow those and require one to one reserve. Other guidelines as well as to the authority federal and state regulators would have. It would establish the fbi see as being able to recover lost assets should the stable coins collapse. This is probably a product of what we have seen in the past. Will the initiative move forward . That question will be left to the democratic senator from ohio and chair of the Banking Committee sherrod brown, largely crypto skeptic. This weekend he suggested he could see the stable going measure attack attached to other measures. We will see if the Initiative Moves Forward in the senate. Our notice as well and had a house the chair of the Financial Services Committee Patrick henry and Ranking Member Maxine Waters are working on a stable going effort of their own. Meeting within a Chuck Schumer about this already. More broadly how necessary is this for the industry to have some sort of robust set of rules, of guardrails . We have already spoke with the European Commission about they how they are trying to enforce regulation, and at least its clarity of some sort. Clarity is often what this industry is asking for. This does not go as far as the industry would like, but it does address a certain part of it. We have heard from groups like the Block Chain Association that they are supporting the stable going effort. When i have talked to people here in washington a lot of them have expressed more optimism that stable going legislation its the most likely thing to get through this Congress Versus more wide, sweeping legislation that would perhaps delineate for example what the fcc would have control over versus the cftc. This has proven more difficult to do on capitol hill. We have seen an effort get through the Financial Services and agricultural committees in the house. It would delineate the regulatory land, if you will, the territory for those two different agencies. That has not moved forward further. In the meantime you probably know well based on your conversations at bloomberg technology, the industry exceeds enforcement and it will stay that way until Congress Moves forward sick tangibly substantially. Caroline thank you. The sec blocked thirdparty messaging apps and texts from employees work mobile phones. It includes whats up and i message. The sec says this will lower risk their systems can be compromised and enhance recordkeeping. Ed the ceo of atos, a company struggling with temping shares and a wall of debt is confident french i. T. Company will be saved. The ceo spoke in an exclusive interview with bloomberg in paris. We are actually working with our creditors, both our banks and bondholders for a solution to our high level of debt and the maturities coming due in the next 18 months. The dialogue is very positive. We are offering debt conciliation, as you mentioned, mediators are helping those discussions. I believe everybody is aligned. We recently had liquidity from the same bondholders and banks. Again, it is an indication everybody is aligned to find a solution. What else can be thought of the proposal apart from this group of bondholders . Will we see for example, asset disposal ahead of next week . Is that a possibility . Or do you totally exclude this . We have presented a comprehensive plan that included all of the assets of atos and now we will have to see what proposals will come soon. Some of them will keep the whole of the company together. One of those proposals is likely to come from one point, one of our largest shareholders and others will come from bondholders that also if interested in keeping the whole company. But we cannot forgo any potential proposal that may come in and entail different ideas like asset disposal. Will this plan be able to save atos . Atos is a Great Company and i believe we will come up with a plan and the company will succeed longterm. So it will be saved . It will be saved. Caroline coming up, we will be joined by matt murphy on Menlo Ventures. A live shot at the principal room less than a month from bloomberg technologies life event in san francisco. Check out the qr code for the details. We will see you in sf for bloomberg tech. This is bloomberg. Caroline todays vc spotlight looks at some other winning strategies, the formulas used by early a native enterprise companies. That is the focus of Menlo Ventures latest ai play look. Playbook. You have put out the seven golden roles for generative ai apps. Its not the foundational models, but the applications that can be built upon the model sent used across industry, sales, or marketing. What have you learned about the success similarities in these breakout successes we have seen . Matt this is the fastest innovation cycle we have seen across many like mobile, cloud, etc. What has happened to create the foundation for application innovators to move as quickly as they want to is you need the infrastructure side built out. You have the brain, the heart dental in something that heart and soul in Something Like anthropic and surrounding data to get to the modellike structure, clean lab, or pinecone that can help you curate data and get it to the model. That is well underway. We are at a Tipping Point where the infrastructure stack is pretty well solidified. Now we will see a 10 year innovation cycle around applications that will move faster and faster now that the tooling and infrastructure is in place. What we look at in the reporters, what are some of the early breakout applications . What have they done differently . We came up with seven golden roles. Things like having almost an infinite content loop. Think about applications before. You had to had have a designer design creative for each potential campaign. You attest that, take it back, iterate. Generative ai can make different campaigns that closed the loop to have a constant feedback system. A company that does that well is called typeface. It is the former cto of adobe, basically recreating the adobe Creative Cloud with generative ai. That is one very concrete example. Caroline that is one of your portfolio companies. What is interesting is, what sets that particular business apart from others you are. . You also say you want to see within the ai apps target work that is highvalue, highvolume, or facing labor shortages. Basically, where will ai have the biggest impact . What are the winning formulas there . Matt there are two ways of generative ai model can work. As an assistant, a copilot where it makes a worker smarter, better, and more efficient other job. At their job. Sometimes it can replace the job and allow a worker to do something else, like a higher value activity like customer service. Look for the pattern based highvolume workflows. On the other end of the spectrum there are highvalue, may be a lower amount of people workflows. Like a paralegal that spends all this time digging through documents and matching terms and things when they could do the analytic work if a system built out for them. That is what is being reimagined here with generative ai. How do you take the bulk work and allow workers to do more higher value activities on top of that . Ed i want to discuss how about word or how backward or forward looking your report is and how crowded the field of activity is in this space. Caroline and i talk about companies and platforms targeting developers and apps regularly. An example being salesforce and the app exchange. They have brought in a generative ai liar to their existing cash later layer to their existing products. Matt its extremely busy. In our portfolio over 50 companies early last year maybe 20 were doing something with generative ai and now it is near 100 . That is a good proxy for the market. If you are an existing Software Company not doing something with generative ai you are falling behind. What we are most exciting about his people rebuilding from the get go now with new capabilities of generative ai like a couple i have mentioned to you most creative and innovative way to disrupt applications is to start with a Founding Team that has the dna around ai and thinks about how to build the application from the bottom up that way. Whenever you bought something on later it is beneficial. It is additive. It will be great for salesforce and other companies. When another Company Comes in and says, this application should not even exist without generative ai. Take a company like helios, doing generative ai for a therapist conversation. You can listen to the conversation and use your own model to parse that and give dr. Notes as well as a potential diagnosis and use a generative ai to package that and curate the content that comes out of it. These are capabilities are model was never able to process before, nor synthesize it down to something as precise or important as a diagnosis. Ed one of your bullets is billed were incumbent armed, cannot, or will not. Often in Silicon Valley something gets built because of founder realizes there is a problem because they ran another tech company where they were frustrated by something. You have a sense that end markets know their use cases yet . How they are supposed to be using generative ai in whatever their business does . Matt thats my point. Everybody knows generative ai is a great writer that can take all the content you have, synthesize it down, and help people get through it really quickly. If you have a graph or a set of output you can distill that down. It makes it so much more effective for the user to consume the output of europe recursion. But thats kind of table stakes. We are most interested in how you are using that technology to make the application completely different than what the incumbent has done in the past. That is really the opportunity here. We have seen a bunch of examples of the legal vertical, a fast mover out of the gate in areas like that. I already mentioned customer service. It is different when you say lets change the entire workflow versus bolt on capability after the fact. Menlo ventures partner matt murphy, thank you very much. Nine pop caroline toshiba is seeking to cut 5000 jobs, roughly 10 of its headcount in japan what the nikkei is currently reporting and the move could initiate one of japans biggest rounds of staff reductions this year in a country with some of the worlds strictest Worker Protection laws. Apple is weighing the possibility of making some gadgets in indonesia exporting production bases beyond its longtime stronghold of china to minimize geopolitical risk as tensions may rise between the worlds two biggest superpowers. Business Software Startup rippling is in talks to raise funding between 13 billion and 14 billion planning to raise about 500 million in video. Talks between investors are ongoing but plans are to finalize terms within a few weeks. Rippling has so far denied those reports. Ed coming up we will be joined by the ceo of a Carbon Capture tech company, svante. This is bloomberg. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh you have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. Caroline the bloomberg nef summit is in full swing in new york. Discussing how to shape a cleaner, more competitive future, we are speaking to a person doing that. The ceo of svante fresh office panel from the summit. Claude, you are providing the technology, the filters, the ability for companies such as, say, manufacturing makers to Carbon Capture. How . Applaud claude we took our name similar to tesla on the ev. We are a unicorn focusing on Carbon Management by providing solution to avoid co2 going into the atmosphere in the first place. Industrial factories, pulp and paper plants and removing co2 from the atmosphere that is already above the ground. We are working with the company on that to provide filters to collect co2 from the atmosphere. Caroline you have built a lot of partnerships and you are working with a lot of companies and emitters. How long of a timeframe is it to build this, to manufacture, to get this going when you know one of your clients wants action in this . Claude our legacy as we are 16 years in research developing technology and product proving in them market. We have raised 500 million to get where we are. We are building a factory to make the filters to equip the equivalent of one million tons. The world needs to get to 1000 plans with one million tons. This is factory number one for us. We are almost to the capacity to deliver projects. Look at one specific project with one emailer. Emitter. Usually it takes years of discussion to evaluate how we will take a Cement Factory or pulp and paper plant and then years to construct. These projects take time to deploy. We need to deploy at a rate of two capture plans per week for the next 30 years. 318 million led by chevrons venture are met in 2021 and 2022 there was a lot of Energy Behind your industry and financial backing. Have things slowed down with corporate interest and public commitment . The question is twofold. Corporate commitment has been growing has been there and is growing. The support we got from the oil and gas industry primarily led by chevron is instrumental in us being here today being able to talk about Carbon Management. But, what is missing now, to grow the business at the scale that needs to be done is we need a private equity infrastructure funds to come to play. So far, they never come to the valley of death of early startup companies. To help them deploy. This is something we are working on these days to bring the two together. It is the sum of the Financial Sector plus the corporate that will make this work. From a consumer point of view, the public acceptance, i think it is a slow process. The analogy i can give you is we have been throwing co2 in the atmosphere freely for the last 100 years with no consequences in the minds of people. The analogy is waste management. Your rubbish at home, the waste management, somebody collects it, transports it, recycles, and stores your rubbish because it smells and you can see it. You cant see or smell co2. So it is difficult for people to associate a Carbon Management industry. The price of collecting your rubbish is about 150 per ton of co2 acquire the land. Caroline we wish we had more time, claude letourneau, ceo of svante. If that does it for bloomberg technology. Do you want to close out . Should i . Normally id hold. But. Taking the gains is smart here, right . Feel more confident with stock ratings from j. P. Morgan analysts in the chase app. When youve got a decision to make. The answer is j. P. Morgan Wealth Management. Welcome to bloomberg etf iq. I am scarlet fu. Katie i am katie greifeld. It feels like a regime change. Katie four Straight Days of losses. More than 12 trillion global etf industry. Etfs play a growing role on exchanges. Scarlet we will