Apple and Google Vs. EU, and Apple's Big Bet on AI | Bloomberg Technology

from the heart of where Innovation money and power cly in Silicon Valley and Beyond this is Bloomberg technology with Caroline Hyde and Ed L [Music] low live from New York and San Francisco this is Bloomberg technology coming up Apple and Google gole losing multi-billion Dollar Court fights with the European Union Plus shares of Oracle touch a fresh record high on strong demand for AI products meanwhile Apple bets big on AI unveiling a new line of products centered around Apple intelligence but first let's check on the markets and well it is Apple that we're going to dive in on a micro perspective Ed and maybe tugs the NASDAQ more broadly off of its highs we're up 1 and a half% over the last two trading days but most of those gains are from yesterday today are calling some of that risk on sentiment and some of the me most focus is on some of the individual movers and you're going to dive into it yeah apple and alphabet the parent of Google two court fights lost with the EU but the stock telling two different stories apple is lower alphabet the parent of Google modestly higher actually at the kind of low point of the session a14.4 billion uh decision to in back taxes essentially for apple and it's a fine for Google in the fight with the European Union EU competition commissioner Margaret Vester who ends her term in November says the rulings brought her to tears listen to this you of course own your victories but you also own your defeats and we' have had both uh and hopefully that shows that we're willing to push the envelopes also sometimes to take a risk in order uh to try to make sure that the market serves the consumer uh and that we're not just small porns or meat for the machine I think Vesta has long maintained this idea that an individual member State should not make an ad hoc beneficial tax arrangement with a specific company like apple let's bring in Bloomberg's Jennifer Dugen out of Dublin for more and this relates to a historic uh series of events in Ireland back taxes essentially just explain the basics of the EU ruling in Apple's case I yeah um the case relates to tax um to Apple's tax uh that was paid in Ireland back in the 1990s and um early 200s um under the ruling today um the European uh Court ruled that um Apple didn't hadn't paid enough tax and that Ireland had granted Apple state aid um in relation to its presence in Ireland so that tax will now need to be paid in Ireland just to remind us more broadly of Ireland's view on taxes of old and why it is embroiled in this way with apple well back in the early uh 1990s um Ireland had uh wanted to make itself an attractive place for foreign direct investment um and it had um a lower uh corporation tax rate as part of um those efforts since then um there was a lot of accusations at the time of irand that irand had become a tax Haven there are some um tax um tax Loops essentially uh one in particular that was known as the double Irish um those have um in the past 10 15 years those have um you know essentially been closed off and Ireland is now subject to um has signed up to um oecd rules on global Taxation and it now has um a 15% corpor corporation tax rate so those situations have changed um but at the time back in this refers to a very specific period back in the 1990s and 2000s Apple has some cash spare luckily but is a huge amount to be paying in back taxes Jennifer Dugen live from Ireland we thank you very much apple in fact though introduced the latest version of its Flagship product just yesterday the iPhone 16 CEO Tim Cook saying it was built for AI quote from the ground up Mark German has had oh a little under 24 hours to digest you knew most of it coming ahead of the game Mark is it going to be AI that makes everyone buy a new iPhone well it's interesting because Apple intelligence isn't as we' discussed many times isn't going to be released uh until mid October at the earliest and these phones begin shipping on September 20th uh but AI is where the marketing message is at right now ai is what Wall Street is interested in right now ai has been on the minds of consumers for the past supper months so that is where apple is focusing its messaging for these new devices in my view what's really going to Spur upgrades are people who are on older phones whether that's the 14 the 13 12 11 or earlier people who have a completely drained battery people who have a crack screen people who want those nice camera upgrades it's not really going to be the AI That's pushing these sales it's going to be the other factors I think Mark you had access to to iOS 18.1 beta version right and yesterday I was able to get Hands-On with 16 16 plus pro and pro Max and the early functionality is like quite limited Tech summarization autor response in email there's there is some pretty cool image editing stuff you know in in the version that I was able to access but you you seem to have details as well about what happens next a series of updates and more functionality that's perhaps The Cutting Edge yeah that's right so in 18.1 that's going to be the first version that includes Apple intelligence like you said that's going to include summarization that's going to call phone include phone call recording and provide you a transcription afterwards it's going to include voice memo transcriptions it's going to include notification summarization uh notification prioritization within the mail app then you have 18.2 coming in December that's going to include things like chat GPT integration from open AI it's going to include gen Emoji where you can use text uh to create your own emojis it's going to include an image playground app for uh generative image creation uh there's an updated interface for Auto uh email categorization within the mail app there's General notification prioritization across the system on your loog screen so more bells and whistles there but the real thing that people think about when you think about AI is Siri and right now Siri has an updated interface on these newer phones when you're running Apple intelligence but truth be told uh that's just lipstick right because the reality is that the underpinnings of Siri really haveen been changed and Siri is not going to change in any meaningful way until it gets its own sort of brain transplant uh so to speak in March April of next year that's when Siri is going to be able to do things like pull up uh when when my mom's flight lands or what uh is the uh podcast that my wife sent me two weeks ago right that's the deeper integration and inap actions that people have been waiting for that's probably four to six months away still do B Mark German uh an honor to be live blogging with you in the trenches with you going through pretty much every piece of of product announcement that you had nailed in advance anyway really strong reporting thank you very much I just point out one thing as well that we posted in the blog that you take for granted but best ever battery life most powerful processor these are things that people are interested in and there's a lot more than the iPhone let's keep it going with marabel Lopez principal Analyst at Lopez research and you know in aggregate what was there to be excited about across the product portfolio for you marabel I think in many ways we saw exactly the predictable Hardware innovations that you would always see with a smartphone launch we talked about a better camera we talk about less bezel so a bigger screen with a watch we talked about thinner lighter I think for consumers that are coming into these new phones that need to do upgrades uh the concept of having the camera button and the visual intelligence was really interesting really what cells phones with consumers continues to be the visual aspects how's the camera what can we do with photos what can we do with videos and we saw a strong showing on that I think some of the surprises were around things like the health features that they added with sleep apnea and hearing aid so it was actually in some ways predictable with a few surprises that really focus on usability I think that Health focus is an interesting one marabel but give us your take on artificial intelligence and apple intelligence is that going to be a winning formula if it's not actually here to use right yet well first of all I think the concept that it's not here until December or q1 of next year being a big deal is really overplayed in general most consumers are not going out and saying what I really want right now is artificial intelligence right what they want is they want things to be easier to use they want to be able to capture better visuals do better sharing Express themselves in different ways and I think that Apple took a very tempered approach to what artificial intelligence means and really tried to tie it to those things that they thought consumers would find important so not just artificial intelligence for artificial intelligence sake but something that's going to make your life better they talked about personalization and context and how to create videos easier and how to do Emojis so I think these are things that resonate with consumers and the timing of that it'll come to them they'll use it but you know they're not knocking the doors down for it right now what they want is they want a phone or watch that's going to be able to run whatever comes next from Apple ambient AI is how a guest put it yesterday just naturally doing it all in the background marabel go back then to the watches and the airpods it did have quite an impact on certain stocks certainly hearing aid makers at one point in the trade how much are people going to be spurred to buy this on a health Focus so I don't know if they're necessarily going to buy it on the health Focus what I think is really going to happen and what the real win is for apple is the concept of the continuous upgrade cycle once I get that airpod in I figured out that I have a hearing issue or that I can have better quality hearing with this I I think that's a GameChanger in terms of continual use and constant upgrades I do think it's an issue for the hearing aid manufacturers I mean one of the things that we've always had an issue with is do people want to feel like they're wearing Health devices these are just airpods right nobody knows if it's a hearing it or not so I think there's a lot of opportunity for that I also just find the usability think about not needing to change of battery as an elderly person you just have easy charging capability I think it could be a huge win for people that need to have better hearing marabel it was interesting that inside the Steve Jobs theater the most audible sort of gasps and and excitement was around watch and airpods in part specifically sleep apnea and hearing aid we talk about wearables as kind of the jumping in point because actually the hardware costs less than the smartphone and lowers the barrier to entry how do you model that for the success of Apple's ecosystem so when I think about Apple it is a portfolio approach right you have a phone you have a smart device but I think the real win for Apple what they're very good at is that all these things work together and the more of them you have the better your life becomes and I think they really tried to augur in on we can help you with your health we can help you with Fitness we can help you with problems that you didn't even know you had and all of that's attached to the personalization of you and kind of taking what we talked about as that Ai and really trying to make that AI relevant in someone's life so I think moving forward we're going to continue to see that the Health Market is going to be one of the drivers for Apple Revenue moving forward a lot of this was about the what's inside of the Apple iPhone because it hasn't changed that much ostensively from the outside what has changed on the outside is what's going on in China Huawei we see a trifold phone how much are we seeing Innovation from a hardware perspective coming from China uh we actually see quite a bit of innovation coming from China what I think is very interesting is that Apple continues to have the perspective that the foldable phone is not something that they need to participate in clearly a trifold phone is an innovation the timing of the Huawei launch was really important to try to create some of that fear and uncertainty in Apple's presence in China and I actually think it accomplished that but the reality of the situation is foldable devices are very expensive it's been a limited market for some time Samsung's been pushing that rock up the hill for quite a while and it has also not made that break so it makes perfect sense to me if you're looking at a mainstream market that foldability isn't going to be where it's at but if you want to talk Tech Factor cool foldability is absolutely Harel Lopez principal Analyst at Lopez research wonderful take thank you coming up we're going to be joined by rubric CEO with Cena for a conversation on the firm's earnings doubts around growth in the second half is that what's pulling the shares lower this is Bloomberg [Music] [Applause] technology two notable calls from the sales side this morning first up da Davidson initiating coverage on alphabet with a neutral recommendation the analyst highlighting numerous headwinds within the company's core search business and our second call comes from deutche Bank naming Tesla its top pick within the auto sector noting that shares deserve a unique valuation given its potential to reshape business models across multiple Industries car let's have another stock that we should be looking at rubric posting a 35% gain in Revenue raising full year guidance yet Shares are off 6% joining us now to dive in as rubric CEO before Cena who you know must be looking at the stock with some surprise you got analysts such as Guggenheim saying you significantly outperformed on all key metrics but Bloomberg intelligence they're flagging papap some questions around growth Dynamics in the second half can you speak to that Thank You Caroline for this opportunity look I leave this talk to to the expert but we are building a long-term business and if you look at the growth in a very important Market that is cyber resilience we grew 40% year-over year on on our subscription AR to over 900 million I mean we are growing at this speed at that scale and last quarter we beat the quarter handsomely uh Q2 then quarter before we beat the quarter hombly We are continuing to outperform both on Top Line and uh and our profitability metrics and this quarter we also raise the guidance for the rest of the year so we are very bullish about what is in front of us we are confident in our execution what we see and we want will finish our year strong people in the context of like what rubric actually does it seems like when Enterprises invest more in in cloud or shift to the cloud there's a benefit that you derive from that could you explain the basics of that relationship and those mechanics as more and more businesses and governments have realized that just doing cyber prevention will not uh allow them to run their business when there is a successful Cyber attack because cyber attacks are inevitable they are all thinking about cyber resilience how do they continue to run their business even in presence of attacks how do hospitals continue to admit patients Banks continue to do out money and that's what we do we help businesses ensure that their applications are running and applications could be in their Enterprise could be in the SAS could be in the cloud and as businesses are doing more digital transformation to gain productivity cyber is the number one rest and ability to run their services all the time irrespective of successful Cyber attack is what we help the businesses with so more Cloud transformation more SAS adoption more digital transformation is actually helping our business and people Switching gears slightly I think we asked you let's say a dozen times over the course of a year when you were going to go public uh and eventually it happened and it feel like it all happened quite fast I just wanted to ask what it's like being a public company and how that you think that's going it's going great as a as a public company but for me as a CEO is no real difference other than reporting to public market and doing call backs with our stakeholders because from the day one of the company we wanted to build a long-term company a company that lasts longer than my own professional career and life and there's no difference in terms of how we build our product how we think about the next chapter of rubric we are coming up on a billion dollar that we actually guided to I'm thinking about how do we go to 3 billion and Beyond what are the product configuration that we do today so that we have high acceleration 3 4 years down the line that's how we think as a business and there's no real change in how we operate our business since You' gone public though we had the most major Global it outage and everyone started thinking about resiliency all over again now today in fact I think Microsoft is currently hosting a cyber security Summit for the first time since that outage with government participation to really get their learnings people how many customers did you suddenly sign from that event event how have you seen the market shift after it it was an unfortunate event but it actually previewed what a real Cyber attack could do to our digital interconnected global economy and it really as you mentioned brought the discussion of resilience at the top and so we are seeing a lot of uh cios and board of directors and cesos and CEOs having this conversation that how do we keep our businesses up and running irrespective of what happens so we are definitely seeing anecdotal evidence of like uh A Renewed interest renewed focus and cyber resilience is the number one Topic in cyber security but it is one of the many factors and over time it'll be clear how much impacts it does to actual like demand and and uh and Top Line people very simply did uh did you get invited to this Summit that Microsoft's hosting and and what are you hearing about it we have a great partnership with Microsoft in fact uh they gave us uh Healthcare partner of the year because we are really going after protect the unprotected which is the healthcare segment of the market and obviously Microsoft is very serious about cyber security if you look at uh the number of initiatives that they are doing number of Partnerships that we are creating with micros software we are bringing the Cyber resilience they are bringing the cloud and infrastructure security and together we are delivering end to- endend security so as far as Microsoft is concerned our partnership around security is very strong and and they are quite serious about it what about global growth more broadly B and where are you seeing CEOs cesos willing to spend at this moment so I was in uh in Asia 3 4 weeks ago and it spent almost a week in Japan and if you look at a country like Japan which is a large industrial uh economy they are also undertaking digital transformation because they want to gain productivity they want to have this whole digital moment for themselves and the number one concern for their digital transformation is cyber security because in a in a in a manufacturing oriented economy if you have digital disruption because of cyber attacks I mean the whole uh economy could come to stand still or the whole company could come to stand still so folks are very serious about uh investing in cyber security particularly around cyber resilience because they have done lot of investment in prevention of attack but they're not able to prevent the unpreventable so so focus is how do do I keep my services up and running how do I ensure that I confidently do digital transformation and more prri CEO b s it's great to have you back here on Bloomberg technology thank you very [Music] [Applause] much it's time for talking Tech and first up Amazon's audible is set to begin selecting us-based narrators to help train AI of their own voices the company plans to use cloned voices to quickly and cheaply increase their audiobook offerings Amazon currently offers the option for self-publish offers to use a generic virtual voice narration for their works plus shares of Alibaba rising in Hong Kong trading this is the Ecommerce giant made its stock debut to investors from mainland China for the first time shares of Alibaba were added to the stock connect program that links Shanghai and shenzen with the Hong Kong exchange the stock grows 4.2% the most since August 16th and a sigh of relief for AI investors tsmc Revenue Rose 33% in August with sales reaching $7.8 billion taiwan's largest company now making more than half of its revenue from high performance Computing driven by AI demand for the third quarter and this expect tsmc's Revenue to grow 37% Cara let's just check in some stocks again and Ed you referenced this earlier Tesla having a very good day one of the biggest points to the higher side for the NASDAQ Deutsche Bank naming the EV it's top pick with auto sector also and interestingly the EU may be actually reducing those tariffs on Teslas and other EVS from China interesting as we get that news on Google and apple from the EU today and I'd also point out it's 30 days until Robo taxi day and Elon Musk if you're watching I'm still waiting on my invite La here you come I'm coming up it's the first ever private space walk mission for SpaceX we have all the details on today's launch that's next this is Bloom technology [Music] [Applause] welcome back to Bloomberg technology I'm Caroline Hyde in New York and I'm Ed llo in San Francisco quick check on these markets for you because we're trying to remain risk on in with field on the day we're up 5/10 of a percent let's call it on the NASDAQ 100 after remember a decent more than one percentage Point gain yesterday so Riding High even though we got the anxiety of an inflation print and of course a presidential debate that comes later tonight the 10-year yield they getting a bid maybe there is some anxiety and we're wanting to get into some of these well more Haven trades that is the bond market despite we've got some auctions coming up we're down some three four basis points let's call it on the 10e looking at Bitcoin just catching a slight bid up 210% it's been a bit volatile on the day move on and have a look at the individual movers because it's a day of micro news today Apple drag lower off of its lows but still trading 310% to the downside after well we're still wondering what happening elligence really comes and what it means for sales of the new iPhone 16 but it loses that fight it had with the EU over more than 14 billion tax debt that they owe of course they have preferential treatment coming from Ireland EU says we still want that money look Bloomberg intelligence other analyst saying this isn't going to affect the business from a fundamental business one of the few ones that could afford it but Google also loses its fight a more than two billion one in terms of exerting its power it would seem when it comes to e-commerce and its own search platform and look once again maybe it's owing they're both disappointed we understand let's have a look at Oracle though record high for the stock up more than well let's call it 12% now ai a driving force in terms of cloud what are you watching Ed well earlier today SpaceX launched a rocket carrying four private astronauts to [Music] space c one alpha Vehicles ping down range flying crew on board dragon and Falcon 9 to new heights all part of a groundbreaking Mission aimed at performing the world's first commercial space walk after a number of days of delay Caro the Polaris Dawn mission is underway Jared isaacman billionaire happens to run a company also now in space it would seem just remind us why The Space Walk is so groundbreaking yeah I think that it just hasn't been done before and the point of of Jared's ambition to go back to space because remember he was part of the inspiration for crew is he is this adrenaline junkie billionaire he is bankrolling this th thing in partnership with SpaceX he's fascinated by pushing the boundary of Technology but also sort of humankind's um achievements in space I'd also point out like he's not alone up there he's with Sarah Gillis and Anna Menon two very senior SpaceX Engineers who go as Mission SP specialist and medical officer respect on the right Scott petite Mission pilot is Jared's best friend essentially another adrenaline junkie and Fighter Jet Pilot and Sarah and Jared they're the ones that are what going to open the hatch walk on out and make history ultimately what's different about this space walk is not just the sort of altitude that they'll do it that but also the mechanism so I think we're kind of used to Historic pictures of space walks on the outside of the ISS where they have a air lock and they're tethered up this time they'll be teed up but the only way to do it inside the Dragon capsule is to open up the hatch so it means that the two of them will go out one by one but there'll be a vacuum inside the capsu itself meaning that the other two who are not doing The Space Walk also have to sort of dawn these specialist suits and just sit in there floating in a vacuum and then when the two return hopefully they close the hatch repressurize and and add oxygen to the chamber and and all being well and equal they'll come home let's hope now we want to turn from One race the Space Race to another one to the White House presidential nominees kamla Harris of course VP and Donald Trump are set to debate stage set to debate on the stage later tonight at 9:00 p.m. Eastern for more let's bring in Kaye lines who joins us and Kay really technology show is it corporate tax for us is it well the focus on Innovation anything you think we might get well you could get some on Innovation investing in US Innovation is actually something both of these uh campaigns have talked about there is a whole segment in that regard on KLA Harris's policy page the issues page on her website so you could get some of that Donald Trump may even bring crypto into the conversation as he has been talking about that more and more given the money the crypto industry is throwing uh into this election cycle wants to make America the crypto capital of the world he says but for business as a whole Beyond just technology they of course will be affected by things uh like taxes too Comm Harris obviously wants to raise the corporate tax rate to 28% she also wants to lift to 28% the tax on long-term capital gains for those making over a million dollars she of course hasn't specifically said anything about unrealized capital gains although Donald Trump has accused her of that it is true her campaign initially said it supported a number of policy ideas and the president Biden's last budget proposal which included a tax on unrealized capital gains for those making over $100 million a year who had uh less than 25% tax rate on their income but she hasn't outright said that that is not on her uh policy platform and of course she wants to raise taxes uh on regular capital gains for those making over a million dollars and help to to fund some of her other initiatives including down payment assistance for firsttime home buyers uh and no tax on tips that kind of thing Donald Trump of course wants to cut the corporate tax rate for companies that make things in America down to 15% and also wants to make permanent his 2017 tax cuts all of those proposals are estimated uh to cost about 10.5 trillion dollar over the next 10 years and there just simply isn't enough non-defense discretionary spending projected over the next 10 years to pay for that and he also wants to cut government spending or make it more efficient with the help of one Elon Musk Kay in my more limited experience of presidential debates having only lived in this country since 2018 the news cycle also kind of informs what they'll discuss sometimes you have the idea of a sovereign wealth Fund in the headlines um and you've kind of outlined crypto just is there a set stage of what will be asked and and the key Battleground well no questions have actually been uh told of the candidates or to us ABC and those moderators are keeping them uh close to the chest that is part of the rules for this debate including of course the rule that the microphone will be off for the candidate whose turn it is not to speak which be an interesting Dynamic there but yeah you're right news does indeed uh Drive questioning often on The Sovereign wealth fund we're getting that frankly from uh both the Democrat and Republican sides of the aisle first Donald Trump floated a US Sovereign wealth fund at the economic Club of New York last week then Bloomberg reported uh just a day later that this is actually something that Biden AIDS including Jake Sullivan has Al have also been uh pursuing that is a question of how exactly that would be funded we don't know those details yet Donald Trump has suggested it could be funded and perhaps by tariffs and tariffs of course is another thing we expect could come up on the stage tonight as Donald Trump has floated a blanket tariff on all us Imports potentially of 10% and even higher tariffs on China uh and and China of course gets us to the foreign policy aspects that could be present in this debate as well not just on China but the ongoing war between Russia and Ukraine of course perhaps most difficultly for kamla Harris in particular as the vice president of this Biden Administration could be questions around Israel and the ongoing war in Gaza and of course here domestically it's the economy always Kaye Lions thank you very [Music] [Applause] much time now for our VC Roundup first up Singapore based firm Genesis alternative Ventures a private lender to venture and growth stage company says closed its second debt fund and the lower end of its Target that says Global Investors remain somewhat cautious about Southeast Asia's startup industry and the firm has raised 125 million for the fund securing new investors including Japan's mizuo bank and is's our crowd plus atomico it's a London based bench firm that has backed fintech darling stripe and clana it's raised $1.24 billion for two new funds the Dual fund strategy includes its first dedicated arm for growth capital and acts as a response to a Dar of late stage technology financing in Europe according to the firm CEO and EXO what is a startup backed by open AI Sam Altman just launched a modular system to generate store and dispatch clean energy to Data Centers the the startup is relatively knew it already has a demand backlog of some 1.2 GW from some of the world's largest data center operators and wind and solar solar developers Ed another story laravel an open source startup in Arkansas just raised $57 million from Excel an Excel partner Mars Clemens who led this investment joins us here in San Francisco curiously enough I've got a bit of experience covering Tech in Arkansas I've spoken a lot with like Stuart Walton and um the up partnership who kind of like want it to be a tech Hub I was surprised to see the headline tell me about the round and a bit about the company and also the state yeah sure thing so the accent was not a dead giveaway for Little Rock Arkansas but I'm glad to know that you spent time in that uh Tech ecosystem too laravel is an exceptional company founded by a really generational founder Taylor otwell and um the fact that it's in Little Rock the fact that it is bootstrapped and profitable and really a company that controls its own destiny is entirely consistent with what our growth investing strategy is at Excel and has been for 16 years all right miles well bite bootstraps and profitable definition explanation yeah sure thing so we have this kind of peculiar growth investing strategy with fits which fits in with Excel strategy that we have deployed for 40 years across all of our firm which is that at the most fundamental level we want to be the first partner that Founders turn to when they go to raise Capital now doing that requires a certain degree of flexibility some companies want to raise a million dollar in the heart of San Francisco on a seed round other companies want to raise a $57 million bootstrap series a as was the case with Taylor and Little Rock or I would point to a company like one password which raised a $200 million series a in Toronto which my partner run Matthew led a couple of years ago one password might see competition coming from well a pretty age-old firm favorite Silicon Valley that is Apple how are you seeing competition coming from the huge publicly traded companies and can there still be room for these startups absolutely I mean the technology industry today is so humbling there are so many great incumbents there's so many great startups you're seeing companies move at warp speed with the assistance of AI but with that said the companies that we really um have built our growth practice around are just growing durably sustainably profitably at kind of a different Cadence and um it's a Cadence of growth and a discipline that we really really appreciate and that we seek out when we spend time in geographies like uh Toronto with one password Sydney Australia with atlassian uh Provo Utah with qual tricks Etc so um we're humbled we're always sort of paranoid and aware of the the competition out there but we think these companies are special in their ability to be durable and compound for decades at a time it's interesting about open source and we had chai discovery on yesterday just raised around that's sort of Open Source large language model particularly around biotech now when you're thinking about the open source area you you know just mentioned AI we think about open source a lot with AI but you're actually talking talking about open source to BU to build full stack web applications when it comes to lavel what is the business model there because interestingly chai Discovery didn't talk about how they going monetize how already is lavel cloud monetizing right well the thing that we love about open source whether it is biotech and Pharma or developer tooling is that they tend to be rooted in these vibrant organic ecosystems and if you are loyal and faithful to the ecosystem if you serve your company your customers and end users well over time I think the best open source software companies in the world have demonstrated this win-win capability of monetizing where you can build this Revenue flywheel but I think the best companies in open source invest the profits back into the ecosystem they invest the profits back into enhancing the product road map and that is exactly what Taylor wants to do um with this Capital that he's raised from Excel it's 7 million you've also backed versel and Sentry so not unaccustomed to the open source area miles clim Axel partner thanks for joining us [Applause] today shares of Oracle all-time highs today that says artificial intelligence demand continues to boost its cloud computing business and there's some new agreements being made for example with Amazon web services new intelligence senior analyst Anar joins us some more and Oracle managing to really focus on this new area of growth yeah think of this as the downstream effect on all the Nvidia sales that you're seeing because at the end of the day it's these Cloud providers that are buying those gpus and then in turn offering those services to clients to experiment on gen to run new workloads and that's really where Oracle is getting a lot of that bump uh not to mention the brand new deal that they have with AWS well let's jump on it uh I don't understand the deal with AWS I thought that for a long time they had some pretty Frosty relations where does that work and also that there's this debate about on Prem versus not on Prem which is a big part of Oracle history right yeah no even I was surprised to see this particular deal I mean I would say a year ago I was surprised to see them do a deal with Microsoft and then again with Google so a couple of things are happening over here if I run an on- premise application it was theoretically possible for me to take that uh application out from my data center move it to AWS and at the same time run an Oracle database on it it can be done but it was expensive so Oracle was trying to say well if you want to run an application why don't you come to my uh Cloud which is the Oracle Cloud infrastructure and that has been the friction um at the same time um they people want to train on the data that resides on the article database so articles figured out one thing that the end demand is so wide that they won't mind you know losing a little bit of money on one side or the other in the net it will actually be beneficial for them if more of their databases mooved to the cloud so I think for Oracle this may be actually helpful for their database business down the road and given the shortage of workloads out there I think they have enough in this in in you could say in the pipeline that for the next couple of years you're not going to have a problem in terms of their Cloud growth rate alag R of Bloomberg intelligence thank you that was the analysis let's get the take from one of the companies involved in bringing ruber Boro VP of worldwide channels and alliances at aw us and I'd love to start ruber by just simply asking how this deal and how this relationship with Oracle came about thank you for having me Ed it's uh it's great to be here we always work backwards from our customers and just like unog said the pace of innovation is accelerating and with generative AI our customers want to be able to take advantage of their biggest assets which is their data that's their differentiation and so with this partnership we're announcing that customers can move their data seamlessly from Oracle database at AWS to AWS in order to be able to take advantage of their assets and innovate at the pace that's required today Ruba what you make of perhaps anurag's take that this was surprising there is sort of Frenemies going on at the moment what is it like working alongside Oracle you know we've actually been working alongside them for a very long time in fact we've had joint customers with Oracle since 2008 so our our Focus has always been working backwards from the customer it's in our DNA and the time was right for us to bring this offer to our customers as they're thinking about how to transform their businesses they want to move faster they want to be able to take the data that they have stored in Oracle and be able to take advantage of aws's large uh offerings of services like Amazon Q Amazon Bedrock the other services that they've gotten accustomed to and that was made that made it the the time right right now for to work together so it's not new we've been doing it for a long time but it became a lot more urgent to support our customers on their Transformations ruber we got a lot of questions from our Bloom techn technology audience that have a relationship with either AWS Oracle or both and they're very simple like how does this work in practice is there Revenue split or Revenue sharing what are the obligations that the customer has to sign up to well we're not sharing our own commercial terms between AWS and Oracle but from a customer perspective this is a great opportunity for customers to leverage uh this service they've got their existing relationship with Oracle their existing relationship with AWS when we launch it later this year we'll provide all of that information to our customers but it should be just as seamless it'll be single billing through their AWS console the same way they subscribe to any services from AWS you'll very title ruber is alliances is this a new world of alliances at the moment as people search out compute as they work within operators are you seeing that more and more globally speaking I think that we've been seeing it for a long time AWS has the largest cloud native partner Network in the world and we've had that because it is in our ethos to provide our customers with choice and provide them with simplicity so that they can run their businesses as seamlessly as possible and innovate not just through AWS first party services but also through the breadth of third party services that they need to run their businesses it's not a New Concept for AWS and we're just see we're trying to make it easier on our customers to take advantage of all of that Innovation just very quickly are you seeing more smmes kind of take note now we're trying to move Beyond sort of the biggest companies thinking about their their access to compute and the software that they're using absolutely I mean small and medium Enterprises are continuing to be a high growth engine for technology adoption I wouldn't say that they've been laggards but they are now certainly moving faster it is easier for them to take advantage of it and so we are working directly with those customers we are working through many of our Channel Partners to reach those customers and help them adopt uh Innovation that's available in the cloud and so we'll continue to see that we're going to continue to build services with them for them and with our partners roro BP of worldwide channels and alliances and AWS busy time we thank you now it's been a busy time for the show as well that does it for this edition of Bloom Bay technology so many Market moves more guests to come Ed yeah tomorrow we're going to be joined by weo co-ceo tadra manacar for an exclusive interview a lot of data points coming out of whmo and a lot of questions asked about the ongoing tie up with alphabet parent of Google don't forget also check out the podcast you know where to find it on the Bloomberg terminal as well as online on Apple Spotify and ihart from the team out in New York City and all the team here in San Francisco this is Bloomberg technology [Music]