Apple Glowtime Special | Bloomberg Technology

>> THIS IS "BLOOMBERG TECHNOLOGY ," CAROLINE HYDE AND ED LUDLOW. ED: I'M ED LUDLOW. CAROLINE HYDE, IN NEW YORK. WELCOME TO A SPECIAL EDITION OF "BLOOMBERG TECHNOLOGY." ITS GLOW TIME IN CUPERTINO, CALIFORNIA, EMPHASIZING APPLE'S MOST IMPORTANT EVENT OF THE YEAR, THE TECH GIANT UNVEILING ITS BIGGEST UPDATE IN YEARS, A NEW GENERATION OF IPHONES AND WEARABLES. WHAT ARE YOU LOOKING AT, CAROLINE? CAROLINE: TECH STOCKS, BOUNCING BACK FOLLOWING THEIR BIGGEST WEEKLY DECLINE IN TWO YEARS. PLUS ORACLE REPORTING EARNINGS AFTER THE CLOSING BELL. WILL AI COMPUTE DEMAND SUPPORT STOCK OUTPERFORMANCE THIS YEAR? AND WE DISCUSSED THE POTENTIAL OF AI WITH BIOLOGY AND THE FOUNDER OF DISCOVERY. FIRST, WE CHECK IN ON THE SO-CALLED BOUNCE BACK IN THE MARKETS, BECAUSE IT IS DWINDLING. WE ARE STILL UP .4% BUT NOT TO THE EXTENT OF EARLIER TRADING. THERE WAS DIP BUYING BROADLY BUT IT'S A PAINFUL WEEK WE ARE COMING OFF OF. REMEMBER, IT WAS THE WORST DAY WE SAW FOR SET NUMBERS SINCE 2020 AND TODAY WE ARE ONLY UP 1%. REMEMBER HOW MUCH MONEY WAS LOST THIS QUARTER ALONE OVER THE COURSE OF FIVE TRADING DAYS. TODAY IT'S ABOUT APPLE AND I WANT TO LOOK AT HOW THIS IS THE WORST PERFORMER ON THE NASDAQ TESLA POINTS DRAG ON THE OVERALL BENCHMARK, UP BY 1.5%. SO MUCH TO THINK ABOUT, WEDBUSH, JP MORGAN REITERATING THE OVERATE, IT WANTED TO SEE DATES, TIMES, PRICE POINTS WITH HUAWEI COMING IN A FEW HOURS LOOKING FOR PREORDERS GETTING LOCKED IN FOR THE TRIFOLD PHONE. LET'S GET TO IT, WHAT ARE WE EXPECTING? ED: APPLE AT SESSION LOWS IN THE LAST 1214 OF ITS EVENTS. WE'VE GOT DETAILED REPORTS ON WHAT TO EXPECT AND I THINK WE SHOULD START WITH THE NEXT GENERATION IPHONE, THAT IS USUALLY THE POINT OF EMPHASIS. WHAT HAVE YOU LEARNED? >> THE BIG MODELS THIS YEAR WILL BE THE PRO VERSIONS. NOT A LOT OF NEW STUFF, SO WE ARE FOCUSING ON THE DESIGN, WHICH ESSENTIALLY LOOKS THE SAME AS LAST YEAR'S MODEL. YOU ARE GETTING TWO CAMERA UPGRADES. ON THE PRO MODELS RIGHT NOW YOU HAVE A 48 MEGAPIXEL STANDARD CAMERA, A WIDE ANGLE CAMERA, AND NOW THEY ARE MOVING A CENTRAL CAMERA TO THE ULTRA WIDE ANGLE AND A NEW BUTTON, A CAMERA BUTTON THAT WILL COME ACROSS ALL FOUR MODELS. IT WILL BE A BUTTON ON THE RIGHT SIDE THAT IS TOUCH SENSITIVE. YOU CAN SWIPE IT TO ZOOM IN AND OUT, YOU CAN TAKE A PICTURE, LIGHTEN IT, TOUCH IT TO FOCUS ON THE SUSPECT -- SUBJECT, LIKE YOU SEEN STANDARD ON SOME FOR MANY YEARS NOW. THE OTHER CHANGE IS THE SLIGHTLY BIGGER DISPLAY, PROCESSORS ACROSS THE MODELS TO HELP WITH APPLE INTELLIGENCE. OVERALL, THIS IS A VERY MINOR UPDATE YEAR-OVER-YEAR. THE BIGGER CHANGES ARE COMING TO THEIR OTHER PRODUCTS. INCLUDING THE AIRPODS. ED: WE WILL TALK ABOUT THE WEARABLE SIDE OF THE BUSINESS. THE CHRONOLOGY OF THE EVENTS IS IMPORTANCE. NEXT MONTH YOU GET IOS 18.1. WHAT HAVE YOU REPORTED ABOUT THE STAGGERED ROLLOUT OF THAT? >> APPLE INTELLIGENCE, I WOULD CALL IT HALF-BAKED AT THIS POINT, COMING WITH THINGS LIKE THE ABILITY TO SUMMARIZE INCOMING NOTIFICATIONS, GET TRANSCRIPTIONS, THE ABILITY TO USE AI TO REMOVE PEOPLE OR OBJECTS FROM CERTAIN PHOTOS. OVER TIME THERE WILL BE MORE FUNCTIONALITY COMING, RIGHT? PHONES WILL BE SHIPPED WITHOUT ANY APPLE INTELLIGENCE AND THEN YOU WILL GET THE FIRST FEW MEAT FEATURES I MENTIONED. THERE WILL BE ANOTHER UPDATE IN DECEMBER CHATGPT, IMAGE PLAYGROUND FOR GENERATIVE AI FOR IMAGE CREATION. NEXT YEAR, NOT UNTIL MARCH OR APRIL IS WHEN YOU GET THE BIGGER ENHANCEMENTS TO SIRI THAT APPLE TALKED ABOUT IN JUNE AT THE DEVELOPER CONFERENCE. THIS IS A VERY STAGGERED ROLLOUT. THIS IS NOT BY INTENTION. THIS IS SOMETHING THAT WAS MOSTLY RUSHED TOGETHER TO GET OUT FOR THIS YEAR IN RESPONSE TO THE BIG AI CRAZE USING WITH GOOGLE, META, AND OTHERS. CAROLINE: THIS IS A GLOBAL PRODUCT. HOW MUCH WILL THIS STUDY THE NERVES OF SALES DECLINED IN PLACES LIKE CHINA? >> IT'S A GLOBAL PRODUCT BUT THEY ARE BANKING HEAVILY ON APPLE INTELLIGENCE TO SELL THE GLOBAL PRODUCT AND APPLE INTELLIGENCE WON'T BE AVAILABLE IN THE NEARLY 30 COUNTRIES THAT MAKE UP THE EUROPEAN UNION AND IT WON'T BE AVAILABLE IN CHINA, OBVIOUSLY ONE OF THEIR BIGGEST MARKETS AND A BIG SALES DRIVER, RIGHT? I'VE SEEN REPORTS IN THE LAST 24 HOURS INDICATING THAT YOU WILL SEE AN IPHONE SUPER CYCLE BECAUSE OF STRONG SALES OUT OF CHINA WITH APPLE INTELLIGENCE, BUT THAT ISN'T COMING TO CHINA FOR THE FORESEEABLE FUTURE AND THERE WILL BE NO IPHONE SUPER CYCLE. THE THINGS THAT SELL IPHONES AND BIGGER QUANTITIES ARE MAJOR DESIGN CHANGES AND YOU ARE NOT SEEING MAJOR DESIGN CHANGES THIS YEAR. YOU ARE ALSO NOT SEEING AS MUCH PENT-UP DEMAND AS YOU MIGHT HAVE SEEN ONE OR TWO YEARS AGO AS PEOPLE HOLD ON CASH LONGER. I THINK YOU SHOULD RETHINK YOUR EXPECTATIONS FOR THIS YEAR. WHERE I THINK YOU WILL PROBABLY SEE AN IPHONE SUPER CYCLE IS NEXT YEAR WITH THE IPHONE 17, WHICH WILL HAVE BIGGER DESIGN CHANGES AND IT WILL LAUNCH BY THE TIME THAT APPLE INTELLIGENCE IS FULLY ROLLED OUT AND MAYBE EVEN AVAILABLE IN CHINA. ED: MARK GURMAN WITH THE REPORTING ON WHAT WE EXPECT. THANK YOU VERY MUCH. LET'S GET TO THE ANALYSIS WITH CAROLINA. LET'S PICK UP WITH WHERE MARK LEFT OFF. DO WE EXPECT A SUPER CYCLE DRIVEN BY THE 16 GENERATION AND APPLE INTELLIGENCE? >> WE DO NOT. LIKE MARK SAID, THERE ARE A COUPLE OF REASONS. NORMALLY YOU SEE A SUPER CYCLE WHEN THERE ARE GREAT DESIGN CHANGES, BUT HARDWARE STILL DRIVES SALES OF SMART PHONES. THE FIRST THING THAT YOU SEE IS SOFTWARE, THAT'S SOMETHING THAT YOU DISCOVER AFTERWARDS. WHAT GETS YOU INTO THE STORE IS THE DESIGN. THE SECOND PART IS THE FACT THAT RIGHT NOW APPLE INTELLIGENCE IS ONLY AVAILABLE IN ENGLISH, LIMITING THE AMOUNT OF PEOPLE THAT CAN TAKE ADVANTAGE OF IT. ED: I FIND THAT AN INTERESTING POINT. IDC DATA FORECASTS FOR THE FULL YEAR IPHONE BASICALLY FLAT. NEXT YEAR IS A LOT BETTER. IS THAT BECAUSE THE EXPECTATION IS THE CONSUMER TO WAIT AND SEE HOW THE ROLLOUT OF APPLE INTELLIGENCE GOES BEFORE GETTING A NEW IPHONE? >> I THINK IT IS A BIT OF DELAYED GRATIFICATION, BUT IN MY OPINION THERE WILL BE A LONG TAIL OF SALES THAT APPLE INTELLIGENCE ENABLES. BECAUSE OF THE ROLLOUT, THE CULTURE OF INTELLIGENCE IS NOT JUST ABOUT BEING HALF-BAKED OR RUSHED, IT'S THE FACT THAT IT TAKES A LOT TO ACTUALLY MAKE APPLE INTELLIGENCE RELEVANT AT A COUNTRY, LANGUAGE, AND CULTURAL LEVEL. IT'S NOT JUST A SOFTWARE FEATURE, IT TAKES UP SO MUCH MORE THAT IS REALLY LINKED TO THE INDIVIDUAL USER, SO IT IS GOING TO TAKE LONGER. ED: WHAT ABOUT THE GOOD OLD OTHER DEVICES? WHAT ABOUT AIRPODS? WE ARE EXPECTING A LOT FROM THE WATCHES, IS THAT ENOUGH TO KICK OFF A NEW LIFECYCLE? CAROLINE: THERE ARE RUMORS AROUND THE WATCH IN THE AIRPODS, THAT WILL DEFINITELY CONTRIBUTE TO APPLE REALLY PUSHING HIGHER SALES AND REVENUE. APPLE WATCHES HAVE BECOME SO IMPORTANT TO SO MANY AND NOT JUST THAT BASIC MODEL WITH THE APPLE WATCH 10, BUT ALSO WITH THE ULTRA THAT HAS A MUCH HIGHER PRICE POINT. I DO THINK THAT THAT IS GOING TO GET SOME EXCITEMENT AND MAYBE STEAL THE SHOW FROM A HARDWARE DESIGN PERSPECTIVE TODAY. ED: I STILL WANT TO UNDERSTAND THE SIMPLE STORY. HOW DOES THE CONSUMER AND EVERYDAY TECHNOLOGY USER ACTUALLY USE APPLE INTELLIGENCE? DO YOU HAVE THE ANSWER TO THAT? CAROLINE: FOR ME, GENERALLY AI IS ABOUT TAKING MORE OUT OF YOUR DEVICE. YOUR IPHONE, YOUR MAC, SOMETHING ELSE. FROM A USER PERSPECTIVE, IT'S ABOUT MAKING YOUR WORKLOAD EASIER. EVERYTHING YOU ARE DOING SHOULD BE STREAMLINED BECAUSE OF INTELLIGENCE. THE OTHER PART WITH APPLE IS THE FACT THAT APPLE KNOWS ME WELL AS A USER. THEY HAVE A LOT OF INFORMATION ABOUT ME. EVERYTHING THAT APPLE INTELLIGENCE IS GOING TO BE ABLE TO GIVE ME IS CONTEXTUALIZED AND PERSONAL AND THAT IS HOW YOU GET THE EMOTIONAL CONNECTION FROM THE USER TO APPLE INTELLIGENCE VERSUS, YOU KNOW, WE HEAR A LOT FROM OTHER VENDORS ABOUT HOW YOU CAN PLAN YOUR NEXT VACATION OR YOUR NEXT PARTY. I WAS JOKING AND SAYING I NEED TO UPGRADE MY LIFE IN ORDER TO TAKE ADVANTAGE OF APPLE INTELLIGENCE OR ANYTHING ELSE, RIGHT? BUT IT'S REALLY THAT, MAKING USING A PHONE THAT HAS BECOME MUCH MORE COMPLEX EASIER. CAROLINE: TO THAT POINT, APPLE USERS ARE LOYAL AND IT IS WHAT MAKES THE COMPANY THE MOST VALUABLE IN THE WORLD, FROM A PUBLIC PERSPECTIVE. BUT THERE IS SAM SON, THEY ALREADY HAVE AI INTEGRATED. WHILE WEIGHT IS LIKELY TO FOLLOW IN TWO HOURS TIME WITH INCREASED SELLING. ARE WE EVER GOING TO BE TEMPTED ELSEWHERE BY AI INNOVATIONS FROM OTHER PLACES, OTHER SOURCES? CAROLINA: I THINK THE MORE YOU ARE GOING TO GET VALUE FROM YOUR DATA IN YOUR DAY TO DAY EXPERIENCE, THE HARDER IT'S GOING TO BE FOR YOU. WE KNOW, OF COURSE, APPLE INTELLIGENCE IS ONE PART OF THE AI THAT GETS DELIVERED, CHATGPT WILL BE ANOTHER ONE. GOING FORWARD I'M EXPECTING TO SEE GEMINI ON APPLE PRODUCTS. THE USER HAS OPTIONS TO USE OTHERS, BUT WHEN IT COMES TO THE MOST PERSONAL EXPERIENCES, THE TRUST ON THE BRAND IS WHAT IS GOING TO KEEP THEM WITH APPLE. ED: CAROLINA, PRINCIPAL ANALYST AT CREATIVE STRATEGIES, SOMEONE WHO LOOKS AT THE MARKET AS HANDS-ON WITH THE AVAILABLE TECHNOLOGY, THANK YOU. CAROLINE: SO MUCH MORE TO COME. THERE IS. PLENTY OF TECH STOCKS BOUNCING BACK FROM THEIR WORST WEEK SINCE 2022. UP NEXT, WE'VE GOT MICHELLE FROM PRINCIPAL ASSET MANAGEMENT. CAROLINE: TECH STOCKS, CAN THEY REBOUND FROM THEIR WORST WEEKLY PERFORMANCE IN TWO YEARS? THE RECENT DECLINES HAVE BEEN LED BY THE LIKES OF NVIDIA, SHEDDING FOUR HUNDRED BILLION DOLLARS IN MARKET CAP LAST WEEK ALONE. WE ARE HERE TO TALK ABOUT THE PAIN TRAIT OF LAST WEEK, RAISING GAINS ON THE DAY. WHY DID WE SEE SUCH LOSSES LAST WEEK AND FRIDAY? >> LAST WEEK REALLY HIGHLIGHTED THE PERILS THAT SO MANY PEOPLE HAVE BEEN WORRIED ABOUT IN TERMS OF CONCENTRATED TECHNOLOGY WITH ONE GROUP COMPRISING SUCH A BIG SHARE OF THE MARKET, THE MAGNIFICENT SEVEN STOCKS MAKING UP ONE THIRD OF THE S&P 500 INDEX. WHEN THE MOMENTUM IS GOING IN THE RIGHT DIRECTION, IT LIFTS ALL BOATS, THINGS ARE GOOD. WHEN YOU HAVE DISAPPOINTING EARNINGS EMERGING, THE GROWTH CURVES WE SAW FROM LAST YEAR'S PAYROLL DATA, MOMENTUM GOES RAPIDLY TO THE DOWNSIDE. IT BEGINS TO SELL AND IT ACCENTUATES THE MOST ON THE DOWNSIDE WITH A LOT OF INVESTORS THIS YEAR BUYING TECH STOCKS AT EXPENSIVE PRICES. WHEN IT IS TIME TO DEAL WITH THOSE LOSSES, THINGS BECOME EXTREME YOU 500 POSTING THE DECLINE OF 4%, THE WORST WEEK SINCE THE S&P COLLAPSE OF MARCH 2023 AND TECH STOCKS THE WORST IN TWO YEARS. CAROLINE: ULTIMATELY STOCKS ARE OFF TO THEIR WORST SEPTEMBER 6 YEARS. WILL INFLATION DATA SET US INTO A BETTER FUNDAMENTAL PICTURE? ALEX: GOING BACK TO 1950, THIS IS THE WORSE YOUR ROUTINE FOR -- WERE SEPTEMBER WE HAVE SEEN FOR STOCKS, BUT THE FUNDAMENTALS HAVEN'T CHANGED MUCH. WE ARE SEEING PRONOUNCED LAYOFFS. THINGS ARE LOOKING PRETTY GOOD, COMPANIES DELIVERING ON EARNINGS AND EXPANDING BEHIND -- BEYOND THE MAGNIFICENT SEVEN STOCKS. THINGS SHOULD STILL FAREWELL. CAROLINE: JUST NEED APPLE TO DELIVER TODAY AS WELL. THE WORST POINTS DRAG. NOW, WE ARE HEARING ABOUT MOMENTUM TRADE PULLING BACK FROM LAST WEEK, BUT WHAT ABOUT THIS WEEK, SEEMA? SEEMA: IT'S A TOUGH ENVIRONMENT, TO BE HONEST. TECH HAS BECOME A BIT OF A BAROMETER FOR INVESTOR SENTIMENT. AS WE KNOW, THERE ARE A LOT OF QUESTIONS AROUND THE STATE OF THE ECONOMY AND WHETHER OR NOT THE FED IS GOING TO BE QUICK ENOUGH TO MOVE. WHETHER IT'S ADVANCED EVALUATION OR IMPROVED FUNDAMENTALS WITH SOME INTERESTING YOUTH FROM THESE COMPANIES, TECH IS GOING TO UNFORTUNATELY IS A SOMEWHAT CHALLENGING COUPLE OF MONTHS. ED: GOOD MORNING, SEEMA, TRYING TODAY -- TIED TODAY'S EVENT TO THE ECONOMIC PICTURE THAT YOU OUTLINED, THE QUESTION AROUND A SUPER CYCLE IS DEPENDENT ON THE ECONOMIC HEALTH OF THE CONSUMER, THE BUYER. ONE PLACE I'M LOOKING AT THE MOMENT IS THE SPENDING HEALTH OF THE MIDDLE AND HIGHER INCOME EARNERS. WHAT DOES THAT DATA SET TELL YOU AT THE MOMENT? SEEMA: THAT'S SO TRUE, WHEN WE LOOK AT THE CONSUMER DATA FROM A BROAD PERSPECTIVE, IT'S A SLOWING PROCESS TAKING PLACE. IF YOU LOOK TOWARDS THE INCOME LEVELS YOU CAN SEE THAT MOST OF IT IS LIMITED TO THE LOWER INCOME SIDE. MEDIUM TO HIGHER IS FAIRLY STRONG, HIGH INTEREST RATES, YOU CONTINUE TO SEE THAT PURCHASING POWER AND THE PROBLEM IS A LOT OF THE REAL WEALTH GAINS HAVE BEEN DRIVEN BY THE EQUITY MARKET, STRENGTHENED BY THE EQUITY MARKET. IF YOU HAVE FURTHER CONCERNS ABOUT THAT, IT COULD COME THROUGH TO MIDDLE INCOME AND HIGHER INCOME HOUSEHOLDS, MAKING THEM REALLY QUESTION THE KINDS OF PURCHASES THEY WANT TO MAKE. CAROLINE: SEEMA, WE TALK A LOT NOT ONLY TO INSTITUTIONAL INVESTORS, BUT RETAIL INVESTORS WHO HAVE BEEN SO EXCITED AND ENAMORED, HYPED AROUND CERTAIN NAMES LIKE NVIDIA, TWO X, ETF EXPOSURES. ARE THEY RIGHT TO AT THE MOMENT? SHOULD WE BE SO FOCUSED ON MAG SEVEN? SEEMA: YOU ARE RIGHT THAT THE RETAIL INVESTOR BASE HAS BEEN DRIVEN A LOT BY PHONE MOW, FOR WANT OF A BETTER WORD. IT'S THAT CONTINUED INTEREST ON THE BIG BRAND NAMES. UNFORTUNATELY AT THE MOMENT, INVESTOR SENTIMENT HAS DETERIORATED SO THE PHONE MOW NO LONGER EXISTS. THE REASON THE INVESTOR IS TAKING A LOOK BACK IS SAYING LOOK, IF WE ARE WORRIED ABOUT THE ECONOMY THERE HAS TO BE AN IMPACT ON THESE BIG BRANDS AND THERE HAS TO BE A POINT AT WHICH IT STARTS TO LOOK MORE INTERESTING. THE GENERAL THESIS AROUND TECH, AI, THE IMPACT AROUND THE MAGNIFICENT SEVEN, WILL THEY DELIVER A SEVEN YEAR PERSPECTIVE? YOU ARE PROBABLY QUESTIONING AT THE MOMENT THE VALUATIONS AND WHETHER IT IS THE RIGHT TIME TO HAVE EXPOSURE. CAROLINE: THAT'S WHAT WE'RE HEARING, PEOPLE TRADING THE NAMES AT THE MOMENT WITH INDIVIDUAL VOLATILITY. HOW DO YOU KEEP THE DIVERSIFICATION MINDSET? HOW ARE YOU SEEING THAT OPPORTUNITY? SEEMA: LOOKING AT THE LARGE CAP TECH SPACE, WE HAVE TO WORK A LITTLE BIT, WE ARE STILL QUITE OVERWEIGHT, THE REASON IS WE ARE STILL LOOKING AT THE DEFENSIVE PLAY. THESE COMPANIES WITH THE CASH FLOW, THAT MEANS THEY SHOULD CONTINUE TO DO WELL, EVEN IS -- EVEN IF THERE IS AN OPPORTUNITY TO INCREASE EXPOSURE. AT THIS POINT IN TIME A LOT OF IT IS AROUND DIVERSIFICATION, NOT JUST EXPOSURE TO TECHNOLOGY BUT OTHER PARTS OF THE MARKET THAT ARE MORE DEFENSIVE, SUCH AS UTILITIES AND SOME OF THOSE CONSUMER STAPLES AS WELL. ED: SEEMA, I HAVE ASKED YOU BEFORE ON BLOOMBERG TECHNOLOGY HOW YOU USE GENERATIVE AI IN YOUR PROFESSIONAL AND DAILY LIFE. THE NEXT EXTENSION OF THAT, ARE YOU SEEING ANY EVIDENCE WHATSOEVER THAT ALL OF THE CAPITAL INVESTMENT EXPENDITURE INTO CAPACITY FOR BUILDING GENERATIVE AI TOOLS IS TRANSLATING INTO PRODUCTIVITY GAINS IN ANY OF THE ECONOMIES FOR WHICH YOU ARE CONCERNED? SEEMA: YOU ARE HEARING NEWS, CORPORATE NEWS, REALLY, OF COMPANIES SAYING THEY HAVE SEEN PRODUCTIVITY GAINS OR ENVISAGING THAT IF THEY WERE TO INVEST FURTHER INTO AI, THERE WOULD BE SIGNIFICANT PROPERTY GAINS. EVEN THE U.K. GOVERNMENT, THIS IS SOMETHING TO TALK ABOUT REPEATEDLY, INVESTING IN THOSE AREAS OVER THE COMING YEARS. IN TERMS OF IF IT'S COMING TO FRUITION, I'M NOT NECESSARILY SEEING SO MUCH OF THAT NEWS, BUT THERE IS STILL THE EXPECTATION THAT AI WILL DELIVER IN THAT IT SITS AT THE FRONT TIER ALL PRODUCTIVITY GAINS OVER THE COMING FUTURE. CAROLINE: ABOUT A WEEK AGO WE WERE DISCUSSING IF NVIDIA OR THE FED ARE MORE IMPORTANT. WHAT IS IT FOR YOU NOW? SEEMA: THEY BOTH HAVE A VERY SIGNIFICANT IMPACT ON THE MARKET. BUT AS I SAID I THINK THESE COMPANIES ARE A BAROMETER OF INVESTOR SENTIMENT AND AT THE MOMENT IT IS BEING DRIVEN BY WHAT THE MARKET THINKS THE FED IS GOING TO DO. IF WE WERE TO SEE THE FED COMING IN WITH A SIZABLE INTEREST RATE CUT NEXT WEEK, DOWNPLAYING CONCERNS OF RECESSION, INVESTOR SENTIMENT COULD IMPROVE AND YOU COULD SEE A BOUNCE BACK AND A LOT OF THE MAG SEVEN. SO MUCH OF IT IS TIED TOGETHER AT THIS POINT. ED: QUICKLY, WHAT'S THE BIGGEST HEADWIND WE ARE NOT TALKING ABOUT THAT INVESTORS MIGHT FACE? SEEMA: THE CHINA STORY IS THERE BUT WE HAVE ONGOING CONCERNS ABOUT THE STRENGTH OF THE CONSUMER IN CHINA, WHERE THE ECONOMY IS GOING AND HOW MUCH IT FEEDS INTO TECH DEMAND. THAT'S ONE OF THE AREAS WE COULD BE LOOKING AT CLOSELY IN THE COMING MONTHS. CAROLINE: COMING UP, WE ARE TALKING TECH AND APPLE'S BIG LAUNCH EVENT. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: TIME NOW FOR TALKING TECH. FIRST UP, NVIDIA BACKS AI IN JAPAN AS RISING TENSIONS SPUR OF THE COMPANY TO RISK THEIR OWN AI ECOSYSTEM. RECENTLY THEY SAID THAT THE RECENT FUNDING ROUND AT SAKANA WAS MORE THAN ENOUGH AMMUNITION TO DEVELOP ITS TECH. PLUS THEY ARE LOOKING FOR $700 MILLION FROM NEW AND INVESTING -- EXISTING INVESTORS. LOOKING AT THE CONSTRUCTION OF THEIR FOUNDRY IN HOKKAIDO, RAPID US -- RAPIDUS IS LOOKING FOR A LOAN BEFORE INVESTMENTS. GOOGLE, HEADING BACK TO COURT, THE SEARCH ENGINE GIANT SET TO FACE ALLEGATIONS FROM THE JUSTICE DEPARTMENT THAT THEY MANIPULATE THE ADVERTISING MARKET. THIS COMES ONE MONTH AFTER THEY LOST A LANDMARK RULING THAT THEY ILLEGALLY DOMINATED ONLINE SEARCH. NOW COMING UP, WE ARE GOING TO BE TALKING NOT ONLY ABOUT APPLE, WHILE LIKE AND -- APPLE, BUT HALLWAY -- HUAWEI, CUPERTINO, AND THE BIG SHOWDOWN. THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: WELCOME BACK TO A SPECIAL EDITION OF "BLOOMBERG TECHNOLOGY ." I'M ED LUDLOW. CAROLINE HYDE IS IN NEW YORK AND RIGHT NOW WE ARE LIVE IN CUPERTINO AND ITS GLOW TIME. EMPHASIS ON A NEW GENERATION OF IPHONE, A REFRESHED WEARABLES OFFERING IN THE FUTURE OF AI. LIVE COVERAGE CONTINUING IN A FEW MOMENTS. OUR CONVERSATION WITH RAY WANG OF CONSOLATION RESEARCH. GOT TO CHECK IN ON THESE MARKETS. CAROLINE: WE DO BECAUSE LAST WEEK WAS BRUTAL AND WE KNOW THAT WE GAVE UP MORE THAN 400 BILLION IN ONE DAY ALONE OVER FIVE TRADING DAYS WE HAD THE WORST WEEK SINCE 2022 AND THE NASDAQ IS NOW UP .6%, NOT MANAGING TO HOLD ON TO THE PREVIOUS GAINS. WE ARE ACTUALLY SEEING A RISK ON SENTIMENT WORLDWIDE, THE WE ARE FAILING SOME OF THE GAINS. BITCOIN IS UP, 55,000 EIGHT STRAIGHT DAYS OF NET OUTFLOWS FROM THE BITCOIN ETF'S. ARE WE GOING TO START TO SEE PEOPLE TREADING BACK INTO PAY MONEY TO SPOT BITCOIN? IN THE MEANTIME, LOOK AT THESE INDIVIDUAL NAMES ON FRIDAY AMID THE TURBULENCE WHERE WE SAW A NEW GOAL AT ROBLOX, 10% OF GLOBAL VIDEOGAME CONTENT REVENUE. NOW FALLING ON THAT PARTICULAR NAME. HOLDING ONTO GAINS, UP ALMOST 4%. WHY? IT'S AROUND THE REPORTS THAT THEIR OWN TECHNOLOGY AND CHIP DESIGNS WILL BE POWERING THE IPHONE 16, AND ON MONDAY WE UNDERSTAND THEY ARE EMBRACING THE NEWEST CHIP DESIGN. WE WILL SEE IF THAT COMES TO FRUITION. MEANWHILE, APPLE IS OFF AND THAT'S THE BIGGEST POINTS DRAG ACROSS THE INDEXES TODAY. WE WANT TO TALK MORE ABOUT APPLE. TODAY'S BIG TAKE FOCUSES ON THE APPLE TRANSITION FROM TECH REBEL TO TECH OVERLORD. MAX CHAPIN COWROTE THE PEACE THAT IS GETTING A LOT OF TRACTION ON THE TERMINAL AND ONLINE. MAX, THIS IS A COMPANY THAT BACK IN THE DAY WAS THE REBEL AND NOW IS THE MOST VALUABLE COMPANY IN THE WORLD. MAX: IN THAT STARK WAY IT'S A REVERSAL BUT IN THAT WAY WERE YEARS AGO THEY WERE TARGETING PLACES LIKE IBM, THERE'S A SWIRL OF CRITICS NOW LIKE REGULATORS AROUND THE WORLD, THE DOJ, AS WELL AS SOME BIGGEST PARTNERS START TO LOUDLY SAY THAT, YOU KNOW, SOMETHING NEEDS TO BE DONE. EVEN WHEN YOU LOOK AT THE BODY LANGUAGE AROUND THE LAUNCHES, YOU REALLY SEE HOW THERE IS A GRAVITY AROUND CUPERTINO. NOT JUST ON AN ANNOUNCEMENT DAY, BUT THE TECH INDUSTRY IN GENERAL AND THE GLOBAL ECONOMY MORE BROADLY. WHAT ABOUT THE APPLE -- CAROLINE: WHAT ABOUT THE APPLE DEFENSE, JUST SAY THEY ARE BETTER? MAX: THE DEFENSE IS THAT CUSTOMERS LOVE US. THE DEPARTMENT OF JUSTICE, WHICH DROPPED A BIG LAWSUIT BACK IN MARCH ALLEGING CUSTOMER HARM, APPLE SAYS THAT THE THING THAT YOU ARE ATTACKING, THE FACT THAT OUR STUFF WORKS BETTER THAN ANYTHING ELSE IS EXACTLY THE THING THAT CUSTOMERS CARE ABOUT. IT'S THE THING THAT HAS DIFFERENTIATED US AND IT WILL MAKE OUR PRODUCTS CONTINUE TO SELL, SO THAT'S WHERE THE DEBATE REALLY IS. ED: WHAT A PIECE TO DROP ON IPHONE DAY OF ALL DAYS. I GOT THROUGH IT AND WHAT YOU DO IS YOU DOCUMENT THE HISTORY OF THIS COMPANY AND THEN POSE THE QUESTION FOR ALL OF THE REGULATORY PRESSURE, THE STRATEGY, THE COMPETITION, WILL IT MATTER? IN THE SHORT TERM THE ANSWER IS NO. MAX: FOR SURE. THE DEPARTMENT OF JUSTICE CALLED IT BAD THAT YOU ARE DOMINATING THESE MARKETS WITH PROFITS AND NO COMPETITORS HERE, THOSE ARE EXACTLY THE KINDS OF THINGS THAT INVESTORS ARE ONE OF THE MOST VALUABLE IN THE WORLD. WHEN YOU LOOK AT THE LONG-TERM CONSEQUENCE HERE, YOU DO HAVE A SENSE -- THIS IS A CONVERSATION THAT HAS BEEN GOING ON FOR A DECADE BUT IT HAS GOTTEN LOUDER, APPLE FOR ALL OF ITS REPUTATION FOR INNOVATION AND SO ON HAS MAYBE LOST A STEP, AS CRITICS WOULD SAY. AND YOU DO HAVE THESE SLOW-MOVING REGULATORY ACTIONS, BUT REGULATORY ACTIONS CAN HAVE CONSEQUENCES. WE ARE SEEING THIS SECOND DEPARTMENT OF JUSTICE CASE AGAINST GOOGLE, SEEKING TO BREAK UP APPLE. THOSE ARE THE KINDS OF THINGS THAT APPLE IS GOING TO HAVE TO CONTEND WITH AND PERHAPS CONTEMPLATE IN THE YEARS TO COME. ED: MAX WITH THAT BIG TAKE, JUST INCREDIBLE AND A DETAILED WRITING ON AN IMPORTANT DATE. THERE'S ONE AREA WHERE PERHAPS APPLE IS NOT AS DOMINANT IN THE AREA WHERE IT IS STILL PROVING THE WORK IT HAS DONE, THE DOMAIN OF ARTIFICIAL INTELLIGENCE OR APPLE INTELLIGENCE. LET'S GET SOME RESEARCH FROM RAY IN HIS HOMETOWN, RIGHT NEXT TO ME. WE SHOULD GET TO THAT CONVERSATION ABOUT A SUPER CYCLE YEAR ON YEAR GENERATION FOR IPHONE, BUT FOR ME THE SIMPLE QUESTION IS DOES THE CONSUMER OR IOS USER UNDERSTAND HOW THEY ARE GOING TO USE ARTIFICIAL INTELLIGENCE IN THEIR DAILY LIVES? >> THEY HAVE IT IN THE BACKGROUND, AMBIENT, THE ABILITY TO TAKE AN IMAGE AND TRANSFORM IT INTO A PICTURE, TO MAKE SUGGESTIONS GRAMMATICALLY, IT'S ALL BEEN HAPPENING IN THE BACKGROUND. THE APPLE VIEW ON AI IS VERY DIFFERENT. IT'S MASS SCALE WITH PRIVACY AND THE ABILITY TO ACTUALLY DO IT IN THE BACKGROUND AS AN AMBIENT EXPERIENCE. THAT'S WHAT MAKES IT SO SPECIAL AND PEOPLE TRUST THEM MORE THAN OTHER AI. ED: I FIND THE TIMELINE INTERESTING. I HAD AN IPHONE 15 PRO AND I UPGRADED. WILL I UPGRADE TO THE 16? I DON'T KNOW, BUT APPLE INTELLIGENCE WILL BE AVAILABLE TO ME NONETHELESS. HOW DO YOU INTERPRET THAT? >> IT'S IMPORTANT. A MASS MAJORITY OF SUBSCRIBERS ARE GOING TO USE THAT SUBSCRIPTION MODEL, RENEWING ON THAT CYCLE, THAT WILL BE THE AREA WHERE YOU SEE IT. THE MOVE TO 5G, THAT WAS ONE OF THE MOVES, THE MOVE TO AI IS THE NEXT SET AND IT'S CAUSING A REFRESH CYCLE. 1.34 BILLION IPHONES OUT THERE AND IT WILL BE A 240 MILLION REFRESH CYCLE THAT HAPPENS EVERY THREE OR FOUR YEARS. ESPECIALLY IF YOU HAVE A CARRIER CONTRACT WHERE YOU PAY A MONTHLY FEE WITH SUBSCRIPTION REVENUE. CAROLINE: THAT CYCLE THAT YOU ARE TALKING ABOUT, THE NUMBERS THAT NEED UPDATING AND UPGRADING, IT'S NOT JUST AMERICA, IT'S ALSO CHINA AND THE EU. WE'VE HEARD ABOUT THE MARKET THAT'S BEING WHO AVERRED BY HUAWEI. WHAT YOU MAKE OF THE COMPETITION? >> IT'S GOING TO BE LIMITED. THEY WON'T BE ABLE TO SELL IN THE U.S. AND IT WILL CHANGE THE MARKET OUTSIDE THE U.S., BUT YOU WILL SEE APPLE PUSHING HARD INTO INDIA AND THAT GROWING MARKET IS A STATUS SYMBOL IN LUXURY DEVICE, NOT JUST A FUNCTIONAL UTILITY. IT'S A DIFFERENT MARKET AND THEY ARE COMING AT IT FROM DIFFERENT PRICE AND MARKET POINTS. ED: SOMETHING FASCINATING IS HAPPENING IN CHINA THAT IS SIMPLE, APPLE INTELLIGENCE WON'T BE AVAILABLE THERE, BUT PEOPLE ARE EXCITED NONETHELESS. EVEN IF THEY CANNOT ACCESS IT NOW, THEY MIGHT UPGRADE BECAUSE OF THE PROMISE THAT IT MIGHT COME EVENTUALLY. WHAT DOES YOUR RESEARCH TELL YOU ABOUT THAT PHENOMENON? >> WE SEE IT EVERYWHERE, PEOPLE ARE LOOKING FORWARD TO THOSE FEATURES. THEY WILL HAVE TO COMPLY TO REGULATIONS AND THE EU AND FOR CHINA. YOU MIGHT SEE THINGS EMERGE IN THE MIDDLE EAST. I'M HEADING OUT FOR THAT GLOBAL AI SUMMIT AND WE WILL BE TALKING ABOUT IN HEARING SOME OF THOSE THINGS. CAROLINE: ARE YOU WORRIED? SOUNDS LIKE EVEN WITH THE MARKET NO LONGER BEING THE TOP FLIGHT -- TOP FIVE PLAYER IN CHINA FOR APPLE WITH THESE LIMITATIONS IN THE EU, IT SOUNDS LIKE YOU DON'T THINK IT MATTERS AND THERE WILL BE A SUPER CYCLE NO MATTER WHAT. >> I DEFINITELY BELIEVE IN THE SUPER CYCLE. ALL OF THE FORCES IN TERMS OF SUBSCRIPTION AND THE STATUS SYMBOL FEATURES, THEY MIGHT EXPECT BUMPS, BUT THE BOTTOM LINE IS CONSUMERS ARE GOING TO STICK WITH WHAT THEY HAVE, GIVEN THE ECOSYSTEM IN THE ACCESS TO SERVICES AND MORE IMPORTANTLY THE FACT THAT THAT IS THEIR ONLY ACCESS POINT IN TERMS OF AI. ED: HOW IMPORTANT? >> VERY IMPORTANT, A WATCH REFRESH AND WE MIGHT EVEN SEE SOMETHING FOR AIRPODS. ED: RAY, ALWAYS ON IT, ALWAYS THOROUGH. CAROLINE: AND BULLISH. COMING UP, CHAI DISCOVERY RECEIVING BACKING FROM INVESTORS INCLUDING OPENAI. THIS IS "BLOOMBERG TECHNOLOGY." ♪ PODCAST ON THE TERMINAL, APPLE, SPOTIFY. THIS IS BLOOMBERG. ELON MUSK IS REPORTEDLY WORKING ON A DEAL THAT WOULD LEVERAGE HIS X AI START UP DATA IN EXCHANGE FOR TESLA REVENUE. KURT WAGNER JOINS US FOR MORE. IT'S A "WALL STREET JOURNAL" PIECE ABOUT THE INTERTWINED OF HIS COMPANIES. CAN YOU TELL US WHAT HAS BEEN REPORTED ON WHAT WOULD BE GOTTEN IN EXCHANGE? WHAT X AI WOULD GIVE TO TESLA? KURT: CAN THIS PROPOSED FEEL IT WOULD HELP TESLA WITH THE SELF DRIVING TECHNOLOGY AS WELL AS OTHER PROJECTS LIKE THE HUMANOID ROBOT PROJECT TESLA IS WORKING ON. IN EXCHANGE FOR A SHARE OF REVENUE DRIVEN BY THE PROJECTS. AS YOU MENTIONED, WE WERE JUST TALKING ABOUT THIS LAST WEEK, ALL OF THESE DIFFERENT COMPANIES IN THE ELON UNIVERSE WORKING TOGETHER. SAYING THIS SOUNDS LIKE A GREAT DEAL, RIGHT? SUDDENLY A HUGE POTENTIAL REVENUE STREAM AND CLIENT IN TESLA. I IMAGINE THE TESLA INVESTORS MIGHT FEEL SLIGHTLY DIFFERENT BUT THIS IS YET ANOTHER EXAMPLE OF THE ELON WORLD COLLIDING WITH HIS VARIOUS BUSINESSES. THERE HAS BEEN PUSHED BACK FROM INVESTORS ABOUT THE SHARING OF CHIPS, FOR EXAMPLE -- CAROLINE: THERE HAS BEEN PUSHED BACK FROM SOME INVESTORS ABOUT THE SHARING OF CHIPS. HIS OWN RESPONSE WAS THAT THE CHIPS WERE LAYING AROUND IN A WAREHOUSE UNLESS HE PUT THEM TO WORK FOR X AI. WILL WE HEAR MORE INVESTOR PUSHBACK? KURT: I THINK HE MIGHT BECAUSE THERE IS THIS FEELING THAT ELON IS USING TESLA, THE CROWN JEWEL OF HIS EMPIRE, TO ELEVATE OR BOOST HIS OTHER BUSINESSES, RIGHT? X AI BEING ONE OF THEM. THOSE COMPANIES PROBABLY SHARE A LOT OF INVESTORS, SO SOME MIGHT SAY IT'S A GREAT OPPORTUNITY, BUT IF YOU WERE INTERESTED IN JUST TESLA, YOU MIGHT ASK YOURSELF WHY YOU WERE GIVING BUSINESS TO HIS OTHER COMPANY, SO I IMAGINE THAT THERE WILL BE OTHERS SCRATCHING THEIR HEADS AND SAYING IS THIS THE BEST OPTION OR OPPORTUNITY FOR US OR JUST THE BEST OPPORTUNITY FOR ELON AND HIS OTHER BUSINESSES? ED: WHEN HE RESPONDED TO THAT REPORT, SAID THAT HE HADN'T READ IT BUT THAT IT WASN'T ACCURATE, AND HE CONCEDED THAT AT A BASIC LEVEL X AI ENGINEERS SPEAK TO TESLA ENGINEERS AND I REMEMBER THE WEEK THAT HE WALKED INTO WHAT WAS TWITTER HEADQUARTERS, NOW X, YOU AND I REPORTED THAT HE BROUGHT IN TESLA ENGINEERS TO BASICALLY STAFF X AND THIS IS NORMAL IN ELON INC., A CASUAL RELATIONSHIP BETWEEN THE COMPANIES AND STAFF. KURT: 100% NORMAL. THIS IS WHAT HE DOES, HE SHARES EMPLOYEES AND RESOURCES AMONG COMPANIES. IF YOU WORK FOR ELON AT ONE COMPANY, YOU WORK FOR THE ELON UNIVERSE OF COMPANIES. WE HAVE SEEN THIS HAPPEN, AS YOU MENTIONED, PUSHING BACK ON THE STORY, BUT OFTEN HE PUSHES BACK ON THINGS THAT END UP BEING TRUE OR MOSTLY TRUE, SO IT'S HARD TO TAKE THAT TO MEAN THAT THIS IS NOT GOING TO HAPPEN AND AS YOU POINT OUT, THERE IS A NATION SHOULD, IT'S JUST IT DEPENDS ON WHAT IT IS ULTIMATELY GOING TO LOOK LIKE. CAROLINE: KURT, THANK YOU SO MUCH. STICKING WITH ARTIFICIAL INTELLIGENCE NOW FROM A BIOLOGY PERSPECTIVE, THE STARTUP CHAI TECHNOLOGY HAS ALREADY RAISED $30 MILLION FROM AI HEAVYWEIGHTS , LOOKING TO BRING ARTIFICIAL INTELLIGENCE TO DRUG DISCOVERY. JOSH MAYER JOINS US NOW, CONGRATULATIONS ON THE ROUND. I'M SO INTERESTED IN CHAI ONE AND OPEN-SOURCE. COMPARED TO OTHERS, THINKING OF ALPHA FOLD FOR THE EVOLUTIONARY SCARES MODEL -- SCALES MODEL, YOU SAY IT'S BETTER. HOW? JOSH: FIRST OF ALL, THANKS FOR HAVING ME HERE. WE ARE REALLY EXCITED TO PUT OUT THIS MODEL FOR THE COMMUNITY. YOU ARE ASKING A GREAT QUESTION AND ONE OF THE PROPERTIES IN THIS FIELD IS ITS CHALLENGE AS IT COMPARED'S TO ONE ANOTHER. AVAILABLE IN NONCOMMERCIAL SETTINGS, IT CAN BE HARD TO BENCHMARK SET AGAINST THOSE COMPANIES, BUT WE FIND THAT WITH GHOSTBUSTERS THE MODEL IS 77% THIS IS 70 6%. THE MODELS ARE NECK AND NECK AND WE ARE EXCITED TO PUT IT OUT, INCLUDING FOR COMPANIES THAT WANT TO MAKE A NEW DISCOVERY. CAROLINE: ALPHABET HAS GOOGLE BEHIND IT. BEHIND YOU ARE SOME EMPTY CHAIRS AND A TEAM OF 10. WHAT WILL THE 30 MILLION GO TOWARDS? IS IT ABOUT THE TALENT? THE COMPUTE? WHERE DO YOU WANT TO BUILD? KURT: -- JOSH: WE ARE GOING INTO EXCITING TIMES. THE FACT THAT DRUG DISCOVERY WORKS AT ALL IS NOTHING SHORT OF MIRACULOUS, SO WE ARE REALLY EXCITED TO PARTICIPATE IN THIS MARKET AND BUILD TOOLS THAT WILL MAKE A DIFFERENCE IN THE PROCESS . I THINK THE RESULTS SPEAK FOR THEMSELVES. THIS IS WHY WHEN WE WERE EXCITED EVEN AFTER A COUPLE OF MONTHS OF WORK TO PUT IT OUT FOR THE COMMUNITY, FOR FOLKS TO EVALUATE THEMSELVES AND HOPEFULLY FIND IT USEFUL, BUT THERE IS SO MUCH WORK AHEAD OF US AND I'M SO GRATEFUL FOR THE INCREDIBLE TEAM BEHIND US. MY COFOUNDERS, MATT AND JOSH, AMONG OTHERS, IN SUCH A GREAT TEAM TO BE WORKING WITH THE END WE ARE JUST INSPIRED BY THE POSSIBILITIES IT. >> THERE HAS BEEN A LOT OF HOPE AND ENTHUSIASM WITH SUCCESS RATE, HOW DOES IT MANIFEST ITSELF IN THE REAL WORLD, PUSHING FORWARD THE FEELING THAT ONE DAY A CONSUMER OR A PATIENT COULD GET ACCESS TO THIS WORK? JOSH: WE ARE IN THE EARLY INNINGS OF AI AND DRUG DISCOVERY. IT'S THE FIRST SIGNS OF LIFE. BECAUSE OF THINGS YOU MIGHT DERIVE FROM LIKE A WET LAB EXPERIMENT, YOU COULD SEE BETTER IMPROVEMENTS ON UNDERSTANDING HOW MOLECULE INTERACT WITH ONE ANOTHER. THOSE MOLECULES ARE THE BASIS OF LIFE AS WE KNOW IT. WE THINK THAT WITH THESE CAPABILITIES WE COULD USE THEM TO BETTER UNDERSTAND HOW THE MODELS INTERACT AND PROGRAM THEM, HOPEFULLY COMING UP WITH BETTER MEDICINES. MAKING THINGS FOR ALL OF US. CAROLINE: KEEP COMING BACK AS YOU MAKE DISCOVERIES WITH YOUR MODEL. COMING UP, MORE AI. ORACLE REPORTING AFTER THE CLOSING BELL. COULD THE CURRENT AI DARLING INDICATES SHE RISE? CAROLINE: ORACLE ERASING ITS EARLIER GAINS ON THE DAY AHEAD OF REPORTED EARNINGS TODAY, WITH INVESTORS HOPEFUL THAT THERE IS CONTINUED MOMENTUM IN THIS LANE, FUELED BY AI DEMAND. WE WERE TRADING HIGHER BUT ARE NOW OFF AND THERE WAS HOPE THAT WE COULD COMMUNICATE THAT 30% RUN-UP IN THE STOCK. >> THIS IS ONE OF THOSE FUNNY CASES WHERE YOU HAVE A MATURE COMPANY KNOWN FOR SOMETHING AT A BUSINESS LINE THAT IS 10% OF TOTAL REVENUE IS SUDDENLY ALL THAT FOLKS CARE ABOUT. ORACLE CLOUD INFRASTRUCTURE, A LOT OF FOLKS DIDN'T TAKE IT SERIOUSLY BUT NOW THEY HAVE A LOT OF WINS WITH COMPANIES DOING GENERATIVE AI ,X FAMOUSLY A CUSTOMER, AND A LOT OF MOMENTUM WITH CLOUD INFRASTRUCTURE AND ONE OF THE BEST PERFORMING COMPANIES OF THE YEAR. CAROLINE: SOME ANALYSTS ARE NERVOUS, SAYING THEY WANTED TO KNOW IF ORACLE WAS AN AI FAKER. THAT'S FROM MIZUHO. WHY WOULD THEY BE DEEMED A FAKER? >> IT REMINDS ME OF THE DEBATE AROUND THE SERVER COMPANIES BUT THE QUESTION IS -- IS THIS NEEDED NOW? AZURE MIGHT NOT HAVE THE CAPACITY, OR IS THERE SOMETHING DIFFERENT ABOUT THE ORACLE CLOUD THAT MEANS IT WILL CONTINUE LASTING? THEY ARE SPENDING $8 MILLION PER YEAR BUILDING OUT NEW DATA CENTERS, I'M SURE THEY SEEM CONFIDENT THIS WILL CONTINUE DEMAND. CAROLINE: THEY BEING THE LARRY ELLISON AND HIS TEAM. HE'S A BUSY GUY, ALSO TECHNICALLY THE CONTROLLER PARAMOUNT. THAT MUST HAVE GIVEN YOU A CHUCKLE. >> YEAH, I'M EXPECTING SOMETHING TONIGHT ON THE EARNINGS CALL ABOUT THAT. PARAMOUNT IN THE ELLISON TEAM HAVE MADE COMMENTS ABOUT USING ORACLE TECHNOLOGY TO HELP US MAKE MOVIES. NO ONE'S CLEAR WHAT THAT MEANS. THEY DON'T HAVE THAT TECHNOLOGY, BUT I BET WE WILL SEE SOME INTERESTING PRESS RELEASES ABOUT PARAMOUNT USING AI SCRIPT WRITING, THERE WILL BE INTERESTING CO-MINGLING I IMAGINE. ED: LET US KNOW -- CAROLINE: LET NOT US KNOW WHAT GOES ON WITH THAT CALL. MEANWHILE, ED, WE ARE COUNTING DOWN JUST OVER ONE HOUR UNTIL GO TIME. ED: I THINK WE KNOW THE BASICS. IPHONE 16, GENERATION FOUR VARIANT BASE, AND THEN THE TWO PRO AND PRO MAX. IT'S STILL THE SAME QUESTION, APPLE INTELLIGENCE, HOW DO I USE IT IN MY DAILY LIFE, AT WORK, AND AS MARK REPORTED IN DETAIL, THIS STAGGERED ROLLOUT IS SET FOR NEXT MONTH WITH IOS 18.1 BEING AT THE END OF THIS MONTH. HOW DOES THAT GO DOWN WITH CONSUMERS WHEN IT'S NOT AVAILABLE , BUT IT IS OFTEN IN THE STORY ON STAGE WHERE I CAN UNDERSTAND HOW WE DO THIS IN OUR DAILY LIFE. CAROLINE: WE'VE ONLY GOT A MINUTE BUT THE STOCK IS LOWER AND USUALLY IS ON THESE DAYS, RIGHT? ED: I JUST LOVE HISTORY AND APPLE STOCKS CLOSED DOWN IN 12 OF THE LAST 16 SELL THE PHONE EVENTS, BUT THIS MIGHT BE DIFFERENT AS THERE IS NO SUBSTANTIVE HARDWARE UPDATE. IT'S THE SOFTWARE SIDE THAT MIGHT DRIVE US FORWARD IF WE ARE TO HAVE A CAROLINE: SO-CALLED SUPER CYCLE. CAROLINE:IT IS STILL THE WORLD'S MOST VALUABLE COMPANY. THANK YOU, ED LUDLOW, FOR EVERYTHING YOU ARE DOING NOW AND FOR THE REST OF THE DAY. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." DON'T FORGET TO TUNE INTO OUR PODCAST AS WELL ON THE TERMINAL, APPLE, SPOTIFY, AND I HARD.