LIVE FROM NEW YORK, THIS IS BLOOMBERG TECHNOLOGY. AI INVESTMENTS PAY OFF FOR META. DETAILS TO COME AND ARM SLUMS AT THE CHIP COMPANY HOLDS OFF TO STING ITS OUTLOOK. WE SPEAK TO THE CEO. PLUS, NVIDIA SHATTERS RECORDS ADDING $329 BILLION TO ITS MARKET CAP IN A SINGLE SESSION. I WANT TO START ON THAT STORY. THIS IS WHAT THE STOCK LOOKS LIKE. BASICALLY TRADING AS IT STANDS ON TRACK FOR ITS BIGGEST JUMP SINCE FEBRUARY. WE KNOW ALL ABOUT THE CAPITAL EXPENDITURES COMMITMENT. BUT IT LOOKS LIKE THIS WHOLE AI THING IS HELPING THE TOP LINE EAST IF YOU LOOK AT THE SALES OUTLOOK FOR THE RENT. THROUGHOUT THE SHOW, WE ARE GOING TO GET A LOT MORE ON META. ONE STOCK GOING IN THE OTHER DIRECTION IS THE CHIP DESIGN FIRM ARM.

I THINK WE ARE DOWN AROUND 15%.
THEY SMASHED IT IN THE QUARTER. GONE RELATIVE TO STREET
EXPECTATIONS, BUT THE STORY AROUND ARM. AS WE BRING UP THE
STOCK YEAR, DOWN MORE THAN 15% IS SIMPLY THAT THEY RESISTED
THE URGE TO BOOST THEIR OUTLOOK, AND THAT RAISES SOME
QUESTIONS. THE QUESTION SHOULD BE ANSWERED
NOW. WE HAVE RENE HAAS STANDING BY.
GOOD MORNING TO YOU. THAT IS THE STORY.
WHAT WERE THE FACTORS BEHIND YOU NOT BOOSTING THE OUTLOOK? WHAT FACTORS MAY YOU CAUTIOUS,
MAYBE IT IS YOUR VIEW OF THE MACRO SITUATION AROUND THE
WORLD? RENE: THANK YOU ANY GREAT QUESTION TO
KICK OFF WITH. THE WAY I THINK ABOUT IT IS AS
FOLLOWS. THIS IS OUR FOURTH QUARTER AS A
PUBLIC COMPANY, OUR FOURTH

QUARTER OF RECORD REVENUE. WE SMASHED IT LAST QUARTER,
OVER $930 MILLION OF REVENUE. SUPER HAPPY ABOUT THE QUARTER.
LAST QUARTER, 90 DAYS AGO. WE RAISED THE ANNUAL GUIDANCE
ABOUT 8%-10%. SO WHEN WE LOOKED AT THE OUTLOOK FOR THE YEAR, 90
DAYS LATER, COMING OFF A GREAT QUARTER, WE JUST DIDN'T FEEL
THE NEED TO RAISE EXPECTATIONS AGAIN.
THAT'S REALLY THE BACKDROP. IT'S QUITE SIMPLE.
WE RAISED THE GUIDANCE FOR THE YEAR LAST QUARTER, A RECORD
QUARTER THIS QUARTER, AND WE ARE MAINTAINING AT THIS POINT. ED:
IS THERE ANYTHING YOU COULD TELL ME ABOUT SPECIFIC MARKETS
THAT YOU SERVE WHERE YOU SEE SOME CAUTION, SOME HESITATION,
BUT WERE ALSO ABLE TO SEE

WHATEVER IT IS HOLDING YOU BACK,
WORKING ITSELF OUT? REMEMBER REACT THOSE HOOK TO
BUSINESS. THE LICENSING BUSINESS AND THE
ROYALTY BUSINESS. THE LICENSING BUSINESS, WHICH IS
REALLY THE FORWARD INDICATOR OF DEMAND FOR TECHNOLOGY, HAS NEVER
BEEN STRONGER. THE LICENSING REVENUE YEAR ON
YEAR UP 70%. WHAT IS DRIVING THAT? THAT IS
DEMAND FOR BUILDING NEW COMPLEX CHIPS, MORE DEMAND FOR ARM,
MORE COMPUTER CAPABILITIES. THAT IS A HARBINGER OF FORWARD
TYPE OF DEMAND. ROYALTIES WERE ALSO UP YEAR ON
YEAR, ALMOST 20%. LARGELY DRIVEN BY SMARTPHONE
GROWTH, WHERE UNITS HAVE BEEN MODEST, BUT OUR NEW VERSION NINE
IS DRIVING HIGH REALTY GROWTH. SO IN GENERAL, WE ARE VERY
OPTIMISTIC ABOUT THE LONG-TERM

OUTLOOK PARTICULARLY BECAUSE OF
THE LICENSING ACTIVITY BEING SO STRONG. ED:
ONE OF THE AREAS I COVER IF IT WERE DEEPLY IS AUTOMOTIVE
TECHNOLOGY. I'M TRYING TO DRAW PARALLELS TO
UNDERSTAND WHAT IS HAPPENING. WE WERE TOLD THIS MORNING THAT
PARTICULARLY IN CHINA, GLOBALLY SOME OF THE CUSTOMERS STOPPED
MAKING ORDERS THE SECOND HALF OF THE YEAR.
I UNDERSTAND THAT IS DIFFERENT. YOU THINK ABOUT THE PIPELINE OF
A SPECIFIC CHIP THAT YOU ARE INVOLVED IN, THE DESIGN OF IT,
MUCH FURTHER AFIELD LONGER-TERM. BUT DID YOU SEE IN THAT
INDUSTRY IN PARTICULAR ANY SORT OF CYCLICAL PROCESS HAPPENING
OR SOME SPECIFIC WEAKNESS? >> I THINK THE WAY WE THINK
ABOUT THE AUTOMOTIVE MARKET IS

WE ARE GROWING FASTER IN TERMS
OF DEMAND FOR OUR TECHNOLOGY AND THE MARKET ITSELF.
SO, WE WERE ACTUALLY UP DOUBLE DIGITS IN AUTOMATED ROYALTIES,
AND THAT IS REALLY A FUNCTION OF MARKET SHARE, BUT MORE
IMPORTANTLY, THE QUALITY OF THE TECHNOLOGY THAT IS FILLING IN
IS MUCH HIGHER. THESE ARE MORE COMPLEX PLATFORM
DEVICES; THEY RUN A LOT SOFTWARE.
SO, WE ARE VERY BULLISH ABOUT THE LONG-TERM AUTOMOTIVE
OUTLOOK. THE NEAR-TERM ISSUES THAT GO
BACK AND FORTH, WE HAVEN'T BEEN IMPACTED BY THAT SO MUCH,
BECAUSE WE ARE GAINING SHARE. COMPLEXITY OF TECHNOLOGY BEING
USED KEEPS GOING UP. ED: THE COMMON THEME OF THIS
EARNINGS SEASON IS CAPITAL EXPENDITURES RELATING TO
INFRASTRUCTURE FOR AI.

AND MY QUESTION SIMPLY IS, WHAT DIRECT BENEFIT DOES ARM GET FROM ANY OF THAT PROCESS OR INVESTMENT CYCLE? RENE: THANK YOU FOR THE QUESTION. WE GET A BIT OF A DUAL BENEFIT. THERE IS A LOT OF FILLING INTO OVERALL INFRASTRUCTURE SCALE OUT. THIS GENERAL-PURPOSE COMPUTER. ARM BENEFITS BECAUSE OUR LOW-COST, LOW-POWER PROCESSORS ARE VERY EFFICIENT IN TERMS OF BUILDING DATA CENTERS. YOU HAVE AWS, MICROSOFT, GOOGLE. AND THEN YOU HAVE THE AI DATA CENTERS, WHICH ARE VERY COMPLEX, REQUIRE A HIGH DEGREE OF CUSTOMIZATION, POWER EFFICIENCY, EVEN MORE IMPORTANT, AND THAT HAS BEEN A GREAT TAILWIND FOR BUSINESS. JUST LOOK AT NVIDIA NOW, A VERY COMPLEX CHIP AND PLATFORM BASED ON ARM, USING THEIR MOST ADVANCED GPU TO DRIVE THE MOST COMPLEX DATA CENTERS.

SO FOR US, WE BROADLY VIEW THIS EXPENDITURE AS A TAILWIND FOR THE BUSINESS. >> YOU MENTIONED GRACE BLACKWELL. THAT TAKES ME TO ONE OF OUR AUDIENCE QUESTIONS. WHEN I SINGULAR COMING ON THE SHOW I GOT QUITE A NUMBER OF SUBMISSIONS FOR YOU AND ONE IS STRAIGHTFORWARD. DOES ARM PLANNED TO DESIGN ITS OWN ACCELERATOR TO COMPETE AGAINST SOME OF THE PARTNERS THAT YOU ARE WITHOUT IN THE PLACE? >> NO PRODUCT DIMENSIONS TODAY, WE ARE JUST HERE TO TALK ABOUT THE PAST QUARTER AND AROUND. ED: NO PRODUCT ANNOUNCEMENT WOULD INDICATE FROM A SORT OF ACADEMIC OR R&D STANDPOINT THAT YOU AT LEAST THINK ABOUT IT. >> TO THINK ABOUT A LOT OF THINGS. AVID TECHNOLOGY, AS BROAD AS IT IS, AS MANY MARKETS AS WE CAN

PLAY IN. MY JOB IS TO THINK ABOUT A LOT OF THINGS. SO I THINK THAT IS A SAFE STATEMENT. I THINK THE AI PC IS SOMETHING THAT HAS PRETTY MUCH DOMINATED THE NEWS CYCLE SO FAR IN 2024. ONE OF THE OTHER AUDIENCE QUESTIONS WAS, WHEN DID WE SEE SORT OF A TRULY COMPETITIVE ARM-BASED WINDOWS PRODUCT THAT CAN TAKE ON THE PERFORMANCE OF MACS OR APPLE'S ON SILICA AND? I KNOW THAT YOU THINK ABOUT THIS FILE LOT, BUT ON THE COMPETITION SIDE, WHAT DO YOU MAKE OF THAT QUESTION? I WANT TO BE RESPECTFUL OF MY GREAT PARTNER AT APPLE AND THEIR ECOSYSTEM, BUT THERE ARE SOME GREAT PRODUCTS OUT THERE TODAY. DELL XPS HAS SOME AMAZING TECHNOLOGY. THE BATTERY LIFE I THINK I WAS READING ONLINE, I WAS LOOKING

TO BUY ONE OF THEM, THE ADVERTISING BATTERY LIFE IS 19 HOURS. FOR A WINDOWS MACHINE, THAT IS RATHER UNPRECEDENTED IN TERMS OF BATTERY LIFE. ALL DAY USE, DON'T NEED A BREAK. SO DALE AND MICHAEL AND HIS TEAM HAVE DONE AN AMAZING JOB DEVELOPING SOME GREAT PRODUCTS. ED: FOR ALL OF THE AI PC ANNOUNCEMENTS, ARE THERE ANY EXAMPLES OF THINGS THAT ACTUALLY SORT OF TRANSLATE INTO REVENUE FOR ARM? RENE: AGAIN, WHEN YOU THINK ABOUT AI PCS RUNNING ON ARM, THAT IS REVENUE FOR ARM. THE WAY WE THINK ABOUT THE AI PC ON OUR MARKET IS PROBABLY LESS ABOUT THE SHIPMENTS THIS QUARTER, BUT THE LONG-TERM TRAJECTORY. I THINK WITH YOU ARE NOW SEEING IS SINGLE SUPPLIERS ARE IN THE MARKET TODAY. WE'VE HEARD FROM A LOT OF SOURCES THAT IN THE UPCOMING

YEAR. IS THIS GOING TO BE MORE AND MORE VENDORS BUILDING CHIPS FOR THE WINDOWS ON OUR MARKET. THAT'S JUST GOING TO BE GREAT FOR US BECAUSE NOT ONLY DOES IT FILL OUT THE CHOICES OF UNITS IN END MARKET, IT IS GOING TO DRIVE THROUGH FOR US. I SAID A FEW MONTHS AGO THAT I THOUGHT ARM COULD BE A 50% MARKET SHARE IN THE BUSINESS MARKETING FIVE YEARS. I DO BELIEVE THAT. WE ARE ABOUT 100% OF THE APPLE OPERATING SYSTEM, SO 50% OF THE WINDOWS MARKET DOESN'T SEEM TOO AMBITIOUS. ED: FOUR QUARTERS AGO PROBABLY A NUMBER OF YEARS AGO YOU AND I MIGHT HAVE STARTED A CONVERSATION ABOUT THIS ARTFUL IN MARKET. WHAT IS GOING ON IN THE SMARTPHONE MARKET RIGHT NOW? WHATEVER IS HAPPENING AT AN

INDUSTRY-WIDE LEVEL, IS THERE
ANYTHING SPECIFIC RELATING TO ARM AT THE HIGH-END OF THE
SMARTPHONE MARKET? LOWER END MODELS THAT YOU CAN TELL ME
ABOUT? >> I DON'T WANT TO SOUND LIKE A
BROKEN RECORD SAYING THAT THE TRENDS ARE GOOD, BUT I'M GOING
TO SAY THAT. WHAT WE ARE SEEING IN THE
SMARTPHONE MARKET IS WHILE UNIT GROWTH HAS BEEN MODEST
SINGLE-DIGIT, THERE HAS BEEN SIGNIFICANT GROWTH IN THE
PREMIUM SEGMENT, THE HIGH-END. AND FOR ARM, THAT IS WHERE WE
DRAW THE HIGHEST LEVEL OF REVENUE.
THE REASON IS WE USE VERSION NINE UP IN THAT AREA.
THAT IS A MUCH HIGHER LOYALTY RATE THAN THE PREVIOUS VERSION
AND THOSE VERSION NINE SMARTPHONES IN THE PREMIUM
SPACE USING A LOT OF ARM

PROCESSORS, IN SOME CASES 12,
14, 16, DEPENDING ON THE MIX. IT IS A TRUE SOLUTION, WHICH
DRIVES GROWTH FOR US, WHICH IS WHY IN THE LAST ORDER WHERE
UNITS WERE SINGLE DIGITS, ACT SMART PHONE ROYALTIES WERE UP
60% YEAR ON YEAR. I HAD ED: A SIMILAR CONVERSATION
YESTERDAY ED:. IS THAT SOMETHING SPECIAL ARM
IS DOING TO OUTPERFORM IN MARKET? RENE:
I THINK IT IS THE CULMINATION OF BOTH.
A NUMBER OF YEARS AGO, WE ADDED SOME SIGNIFICANT COMPUTE
CAPABILITY TO DRIVE PERFORMANCE. NOW, WHAT WE ARE SEEING,
PARTICULARLY IN THE NEAR TERM AND GOING FORWARD, IS THE SKEWS
THAT ARE BEING BUILT. PEOPLE ARE TRYING TO PUT AS MUCH
COMPUTER PERFORMANCE AS POSSIBLE IN THOSE PHONES.
CAN YOU THINK ABOUT THE LARGE

LANGUAGE MODELS SUCH AS LLAMA
OR GEMINI, AND THOSE FUNDS WERE DEVELOPED. THOSE MODELS DIDN'T
EVEN EXIST. SO NOT ONLY ARE WE HAVING TO RUN ALL OF THE
COMPLEX SOFTWARE, THE CAMERAS, BUT NOW YOU WANT TO RUN AI
WORKLOAD. WHICH IS GOOD FOR US. ED: THANK YOU VERY MUCH.
FOR WHAT IT IS WORTH, THE STOCKETT SESSION LOW DOWN 16.2%
DURING THAT CONVERSATION. THIS STICK WITH EARNINGS AND
LOOK AT ETSY, WHICH RELEASED SECOND-QUARTER EARNINGS ON
WEDNESDAY AFTER THE CLOSING BELL.
THE CEO JOINED ME EARLIER TO TALK ABOUT IT. >> WE ARE REALLY PROUD OF THE
FACT THAT IN AN ENVIRONMENT WHERE WE ARE REALLY SWIMMING
UPSTREAM WITH A REALLY TOUGH MACRO, AND THE STORY OF THIS
QUARTER HAS BEEN FOR

DISCRETIONARY PRODUCTS. IN PARTICULAR, IT IS A TOUGH TIME. ED: THAT IS HITTING THE CONSUMER DIRECTLY. >> WELLS FARGO PUBLISHED A REPORT RECENTLY, SAYING 60% OF AMERICANS SAY THAT BY THE TIME THEY ARE DONE PAYING THEIR ESSENTIAL BILLS, THEY HAVE VERY LITTLE MONEY LEFT OVER FOR ANYTHING ELSE. AND YET WE ARE ACTUALLY MAINTAINING. WE HAVE ROUGHLY THE SAME NUMBER OF ACTIVE BUYERS AS OUR ALL-TIME HIGH, 91.5 MILLION. WE CAME IN ABOVE THE TOP OF THEIR GUY OR AT THE TOP OF OUR GUIDE ON EVERY METRIC SEVERELY OUT OF HOW WE ARE DOING, AND WE ARE AWARE THAT IT IS A SUPER VOLATILE MACRO. BUT IN THIS TIME WHEN ARE SWIMMING UPSTREAM AND MAINTAINING, WE ARE BUILDING MUSCLE THAT WE KNOW WAS GOING

TO MAKE US STRONGER, AND MOST IMPORTANTLY, WE ARE NOT LETTING OURSELVES BE DRAGGED DOWN. WE ARE IN A MOMENT WHERE THERE IS A RACE TO THE BOTTOM OF WHO COULD SELL THE CHEAPEST, AND ETSY IS NOT FOCUSED ON THAT. WE ARE FOCUSED ON LEANING INTO OUR POINT OF DIFFERENTIATION. IN REGARD TO YOUR POINT ABOUT AI, AI IS GOING TO BE SO HELPFUL FOR US BECAUSE THERE'S OVER 120 MILLION RINGS FOR SALE ON ETSY, AND EVERY SINGLE ONE OF THEM IS UNIQUE. EVERY SINGLE ONE IS MADE JUST FOR YOU. SO ORGANIZING THAT IN A WAY THAT IS EASY TO NAVIGATE IS A VERY TOUGH CHALLENGE. THERE'S NO ARMY OF HUMANS YOU COULD HIRE TO DO THAT. BUT LLMS ARE REALLY GOOD AT ORGANIZING A HUGE AMOUNT OF

INFORMATION ANYWAY, THAT IS EASY
FOR HUMANS TO UNDERSTAND. ED: COMING UP, META TO THE RESCUE,
DELIVERING ON EARNINGS AND EASING SOME OF THOSE BIG TECH
GROWTH CONCERNS. STOCK UP ALMOST 7%.
A LOT TO TALK ABOUT. THIS IS BLOOMBERG TECHNOLOGY. >> THERE ARE ALL THE JOKES
ABOUT HOW ALL THE TECH CEOS GET ON THE CALL AND TALK ABOUT AI
WHEN IT IS ACTUALLY OVEREXCITED, AND IT IS GOING TO CHANGE ALL
THESE DIFFERENT THINGS OVER MULTIPLE TIME HORIZONS. ED:
I THINK WE SHOULD PROBABLY UPDATE A PHOTO.
THAT WAS MARK ZUCKERBERG. HE DOESN'T LOOK LIKE THAT
ANYMORE. META-POSTING BETTER-THAN-EXPECTED RESULTS,
AND IT SIGNALS THAT THE COMPANY'S AI INVESTMENTS ARE
STARTING TO PAY OFF.

TRIGGERING THE STOCK BIGGEST ONE-DAY RALLY IN AROUND FIVE MONTHS. ON TRACK FOR JUMP SINCE FEBRUARY. THAT'S GET RIGHT AT KURT WAGNER, AND WITH THE QUESTION. HE SPENT ALL THIS MONEY IN THE NUMBER AT THE BOTTOM SLIGHTLY BOOSTED. BUT DOES IT HELP YOU MAKE MONEY IN THE NORMAL AREAS OF YOUR BUSINESS? >> THIS IS THE STORY THEY ARE TRYING TO TELL. IT IS MAKING ADS MORE RELEVANT, HELPING ADVERTISERS EVEN CREATE NEW ADS WITH AI TOOLS. IT IS HELPING THE TIMELINE, GIVING PEOPLE MORE RELEVANT CONTENT SO THEY ARE STICKING AROUND LONGER. THIS IS THE NARRATIVE THEY'RE TRYING TO TELL ON THE MORE IMMEDIATE SIDE, AND THE CHALLENGE IS THERE INVESTING VERY HEAVILY IN THE FUTURE AS WELL, SO THEY ARE

TRYING TO BALANCE THE AI IS PAYING OFF NOW, BUT IT WILL ALSO PAY OFF IN A COUPLE OF YEARS WHEN THESE GLASSES. IS LARGE LANGUAGE MODELS COME TO FRUITION. IT IS A TOUGH BALANCE FOR THEM, BUT THEY WERE ABLE TO SORT OF DO THAT THIS WEEK. ED: SHOWING THE REVENUE NUMBERS, I THINK THAT IF THE BIT THAT WE ARE TRYING TO UNDERSTAND. YOU AND I HAVE ALL THESE CONVERSATIONS, WE ARE VERY SMART PEOPLE WHO GIVE THEM A LOT OF CREDIT FOR THEIR WORK IN THE FIELD OF LARGE LANGUAGE MODELS. FOR FUTURE APPLICATIONS OF GENERATIVE AI, BUT IT SEEMS LIKE THE STORY HERE IS THAT IT IS REALLY HELPING ADVERTISING, WHICH IS WHAT THEY HAVE BEEN BASING THEIR BUSINESS ON ALL ALONG. >> IS NOT AS SEXY OF A STORY BECAUSE IT IS LIKE HEY,

INVESTING BILLIONS OF DOLLARS
INTO THE LARGE LANGUAGE MODELS IS GOING TO IMPROVE THE PRODUCT.
IS NOT REALLY THE EXCITING AI STORY THAT A LOT OF PEOPLE WANT
TO HEAR. THAT IS AI SMART GLASSES AND
ASSISTANTS AND THINGS LIKE THAT. BUT I DO THINK THERE IS AN
ELEMENT OF THIS INVESTMENT PAYING OFF MORE IN THE SHORT
TERM. WE HEARD A LOT ABOUT THAT YESTERDAY, BUT I DON'T THINK
THAT IS WHAT GETS MARK ZUCKERBERG AS EXCITED.
THAT IS GOING TO FUEL AND FUND THESE BIGGER VISIONS HE HAS,
BUT I REALLY THINK WHEN HE TALKS ABOUT AI, HE IS
PREDOMINANTLY TALKING ABOUT THIS FUTURISTIC TECHNOLOGY,
THIS NEXT COMPUTING PLATFORM. >> WITH A QUICK, OUR AUDIENCE
AROUND THE WORLD WILL HAVE

DIFFERENT RELATIONSHIPS WITH META AND ITS PRODUCTS, BUT I FOUND THE DATA ACROSS THE FAMILY OF APPS OR FAMILY OF PRODUCTS REALLY INTERESTING. WHY IS THAT GOING WELL? >> WELL, I MEAN THEY HAVE WHATSAPP AS SORT OF A SECRET WEAPON THAT A LOT OF PEOPLE DON'T THINK ABOUT BECAUSE IS NOT AS BIG A PART OF THE BUSINESS, BUT THIS IS ALSO JUST FOR THE STAYING POWER OF FACEBOOK AND INSTAGRAM. THESE ARE PRODUCTS THAT ARE STILL GROWING AND FINDING NEW PEOPLE DESPITE YEARS AND DECADES OF EXISTENCE, AND THEY ARE ADDING THREADS TO THE MIX. I DON'T THINK THAT IS COUNTED IN THE DAILY ACTIVE PEOPLE TALLY, BUT EVENTUALLY IT WILL BE, AND MARK ZUCKERBERG WAS TALKING ABOUT THAT WITH A LOT OF PRAISE YESTERDAY ON THE EARNINGS CALL. ED: THANK YOU VERY MUCH.

THE OTHER THING WE LOOKING AT
HIS CHIPS. THE LESS WEIGHING UNILATERAL
RESTRICTIONS ON CHINA'S ACCESS TO AI MEMORY CHIPS AND
EQUIPMENT CAPABLE OF MAKING THOSE SEMI CONDUCTORS AS SOON
AS NEXT MONTH. TALK QUITE A BIT ABOUT THIS ON
BLOOMBERG TECHNOLOGY, THAT FOR ALL THE HYPE AROUND AI AND THE
GPU, YOU'VE GOT TO HAVE A HIGH BAND WITH AS WELL TO MAKE IT
COMPETITIVE. JUST GIVE ME THE BASICS OF WHAT YOU'VE REPORTED
AND WHEN IT IS HAPPENING. SO THE U.S.
GOVERNMENT RECOGNIZES THAT YOU CAN'T MAKE THE NVIDIA GPU WORK
WITHOUT ACCESS TO MEMORY AND OFFICIALS HAVE BEEN CONSIDERING
FOR MONTHS ADDING TO THE RESTRICTIONS THAT THEY ALREADY
REPLACED ON CHINA'S ACCESS TO

LAUNCHING CHIPS, WHICH ARE THE DEVICES TO ATTACK A MEMORY SIDE WHICH HANDLES DATA STORAGE.
AND THEY ARE WORKING ON THIS MASSIVE CONTROL PACKAGE,
PROBABLY THE MOST SIGNIFICANT WE'VE SEEN SINCE THE OCTOBER
2022 RULES INITIALLY ROLLED OUT AND SORT OF CHANGED THE GLOBAL
LANDSCAPE FOR SEMICONDUCTORS. THIS LIST COULD INCLUDE
RESTRICTIONS ON HIGH-BANDWIDTH MEMORY ABOVE THE 2.0
GENERATION, CAPTURING SAMSUNG LATEST MODELS.
ALSO ON THE TOOLS USED TOMATOES CHIPS. THEN THERE IS A SEPARATE
MASSIVE RESTRICTION ON ADDITIONAL TOOLS AND EQUIPMENT
THE COFFEE INDUSTRY THAT WOULD PRIMARILY AFFECT U.S. EQUIPMENT COMPANIES, SO THINK
CARVEOUTS FOR THEIR JAPANESE AND DUTCH RIVALS.
THIS IS REALLY A MASSIVE

PACKAGE.
IT WILL PROBABLY BE THE BIDEN ADMINISTRATION'S BIG SWING
IN THIS SPACE, AND IT COULD BE UNVEILED AS SOON AS A COUPLE
OF WEEKS FROM NOW. ED: THIS STRATEGY TO MAKE THE U.S.
CHIP SECTOR MORE COMPETITIVE IS TWO-SIDED:
RESTRICTIONS AND INCENTIVES. THE OTHER BIG STORY REPORTED
WAS ONE, NAMELY APPLIED MATERIALS, NOT GETTING ACCESS TO FUNDING
AND INCENTIVES. >> RIGHT.
WE HAVE THE CONTROL SIDE OF THE COIN, AND WE ALSO HAVE THE CHIPS
ACT, WHICH IS A $39 BILLION SUBSIDY PROGRAM DESIGNED TO
BRING CHIP MANUFACTURING BACK TO U.S. SOIL.
AND SO FAR, WE'VE SEEN OVER ALMOST 90% OF THE FUNDING
COMMITTED TO NAMES LIKE INTEL, SAMSUNG, TSMC FOR THESE MASSIVE
COMMERCIAL FACILITIES.

BUT MORE THAN 670 COMPANIES EXPRESSED INTEREST IN THE FUNDING, SO THEY WERE ALWAYS GOING TO BE COMPANIES THAT DIDN'T HIT IT. THE BIGGEST NAME AMONG THEM, PERHAPS, IS APPLIED MATERIALS. THIS $4 BILLION RESEARCH AND DEVELOPMENT PROGRAM THAT THEY ARE WORKING ON, AND THEY HAD HOPED TO GET GOVERNMENT SUPPORT FOR THAT. UNFORTUNATELY, IT DIDN'T WORK OUT FOR THEM AFTER THE U.S. SCRAPPED PART OF THE GRANT PROGRAM SPECIFICALLY DESIGNATED FOR COMMERCIAL R&D BECAUSE OF A SEPARATE PROGRAM ON MILITARY CHIPS. THEY'VE ALWAYS SAID THAT THE SCOPE OF THAT PROJECT WILL DEPEND ON U.S. GOVERNMENT. ED: IS THERE ANY MONEY LEFT FROM THE CHIPS ACT, OR IS IT ALL NOW ACCOUNTED FOR? >> THERE IS A BIT LEFT.

WE SHOULD EXPECT TO SEE
ANNOUNCEMENTS THROUGH THE END OF THE YEAR. WE WILL PROBABLY EXPECT TO SEE
A LOT OF SMALLER SUPPLY-CHAIN INVESTMENTS BETWEEN NOW AND THE
END OF THE YEAR. >> MCKENZIE HAWKINS VERY BUSY
WITH A LOT OF REPORTING. COMING UP, READ IT MAKES AN AI
PURCHASE. HOW IT IS SET TO INTEGRATE AI,
NEXT. THIS IS BLOOMBERG TECHNOLOGY. ♪ THE GHOST -- >> OLYMPIC
PARTNERS REPORTED A LOSS OF $2.1 BILLION OF THE YEAR ON
WEAKER CUSTOMER DEMAND. THE FRENCH IT COMPANY STRUGGLED
WITH DATA, ACCOUNTING ERRORS, AND INDUSTRYWIDE HEADWINDS THAT
HAS WIPED OUT NEARLY $14 MILLION OF MARKET VALUE OVER
THE PAST SEVEN YEARS. PLUS, BREADED ACQUIRES STARTUP
MEMORABLE AI IN ITS FIRST

ACQUISITION SINCE GOING PUBLIC.
IN MARCH, THE SORT OF USES GENERATIVE AI TO HELP MARKETERS
CREATE BETTER ADS WITH MORE EFFECTIVE TEXT, IMAGES, AND
VIDEOS. READ SET THE ACQUISITION WOULD
IMPROVE THE QUALITY OF ITS ADS ON THEIR SERVICE. AND SAMSUNG
CHIP SPOTS ISSUES A WARNING, SAYING THE COMPANY WOULD BE AT
RISK OF GETTING CAUGHT IN A VICIOUS CYCLE
IF IT DOESN'T REVAMP ITS WORKPLACE CULTURE.
IN AN UNUSUALLY HARSH MEMO TO EMPLOYEES, THE HEAD OF THE CHIP
DIVISION SAYS SAMSUNG MUST TAKE STEPS TO ERADICATE
COMMUNICATION BARRIERS AND STOP HIDING OR AVOIDING PROBLEMS.
THE LETTER COMES AFTER RECENT MISSTEPS BY THE COMPANY IN
SUPPLYING MEMORY CHIPS OR AI. COMING UP, WE ARE GOING TO BE
JOINED BY DENNY FISH, PORTFOLIO.

MANAGER, THE DIVE DEEPER INTO META-AND THE OTHER TECH EARNINGS. REAL QUICK CHECK ON SHARES. THIS IS THE JERUSALEM, ISRAEL-BASED MAKER OF CHIPS FOR ADVANCED DRIVER ASSISTANCE SYSTEMS. AT STOCK DOWN 20%, TRADING AT A RECORD LOW. WHY? BECAUSE TO AGE DOWNGRADED ITS REVENUE OUTLOOK. AUTOMOTIVE CUSTOMERS STOP PLACING ORDERS. THIS IS BLOOMBERG TECHNOLOGY. JON: WELCOME BACK TO BLOOMBERG TECHNOLOGY. ED LUDLOW HERE IN NEW YORK. BIG TECH EARNINGS IN FOCUS THIS WEEK. META POSTING BETTER-THAN-EXPECTED QUARTERLY RESULTS WITH NO INVESTMENTS IN AI. ATTENTION TURNING TO APPLE, AMAZON, BOTH REPORTING AFTER THE CLOSING BELL. LET'S STICK WITH THE EQUITY STORAGE THE NASDAQ PULLING BACK.

AFTER A MONSTER RALLY LED BY NVIDIA ON WEDNESDAY, THE STOCK REPORTING ITS BIGGEST ADVANCE IN OVER FIVE MONTHS. HERE IS THE BIT -- ADDING A RECORD $329 BILLION TO ITS MARKET CAP, DESTROYING THE SINGLE DAY RECORD THAT IT HAD PREVIOUSLY ALREADY OWNED. THERE IS A LOT TO TALK ABOUT. LET'S KEEP THE CONVERSATION GOING. DEBBIE FISH IS A PORTFOLIO MANAGER. LET'S START WITH NVIDIA. WE SAY IT IS A MOMENT IN MARKET HISTORY. IT BROKE ITS OWN RECORD. IT IS ONE OF THE BIGGER POSITIONS YOU HOLD. WHEN YOU SEE THE RED HEADLINE ON THE BLOOMBERG TERMINAL, HOW DOES THAT MAKE YOU THINK? >> I THINK NVIDIA HAS BEEN A REMARKABLE STOCK FOR THE LAST YEAR AND A HALF. THAT HAS PRIMARILY BEEN BECAUSE

OF THE FINANCIAL PERFORMANCE.
THE REVENUES WE HAVE SEEN WITH ITS AI CHIPS, GP USE, IS LIKE
NOTHING WE HAVE EVER SEEN BEFORE.
WHERE THE MARKET IS AT RIGHT NOW, IT IS REALLY JUST PUSH AND
PULL. WHAT WE HAVE SEEN, IF YOU LOOK AT THE HYPER SCALER EARNINGS SO
FAR, PARTICULARLY THE CAPEX FORECAST, MARKET IS REALLY
HINGING ON EVERY WORD WE ARE HEARING.
EFFECTIVELY, WHAT WE HAVE HEARD IS THAT NOBODY IS BLINKING.
YOU HAVE SEEN CAPEX GO UP AT GOOGLE.
YOU HAVE SEEN CAPEX GO UP AT MICROSOFT.
YOU ARE SEEING CAPEX GO UP AT META.
ALL OF THE COMPANY SEEM TO BE IMPLYING THAT THERE IS NO END
IN SIGHT, AT LEAST THROUGH 2025, AND THAT SHOULD BE GOOD
FOR NVIDIA. IF WE ACTUALLY LOOK AT THE
OTHER DATA POINTS IN THE

INDUSTRY. AMD JUST REPORTED, AND THE NUMBERS WERE FINE. BUT IT IS REALLY JUST A REALLY SMALL FRACTION OF THE AMOUNT OF THE AI-RELATED CHIPS THAT NVIDIA IS SELLING, AND NVIDIA IS EMBARKING ON ITS MOST SIGNIFICANT EVER WITH BLACKWELL. ED: IF I ASK YOU ABOUT THAT SPECIFIC POINT, I HAVE DISCUSSED THE ANNUAL CADENCE OF NEW PRODUCT REFRESH. THE BIT THAT IS CONCERNING OR HARD TO UNDERSTAND IS, WHAT ABOUT ALL THOSE COMPANIES, HYPER SCALER, BUT ALSO OTHERS, THAT INVESTED IN THE H 100 GENERATION AND MAY HAVE JUST GOT PAST THE YELLOW LINE. SUDDENLY, THEY HAVE THE OPTION OF WHETHER THEY BUY THE NEXT CUTTING-EDGE GENERATION OF SHIP UPGRADE. I THINK WE HAVE TALKED ABOUT THE ABILITY TO SWAP OUT THE

GENERATIONAL GPU QUITE EASILY.
IT IS HARD TO FATHOM, REALLY. DENNY:
WHAT IS REALLY INTERESTING, AND I WILL GIVE YOU A COUPLE DATA
POINTS -- LAST NIGHT, MARK ZUCKERBERG ANNOUNCED THIS
PUBLICLY. HE TALKED ABOUT THE NEXT
GENERATION OF THE OPEN SOURCE LANGUAGE MODEL. IT IS GOING TO REQUIRE TENEX --
10X THE COMPUTE. IF YOU TALK TO THE LEADERS IN
INDUSTRY, YOU WILL HEAR A COMMENT. THE COMMENT IS WE WANT
TOMORROW'S GPU'S. THE REASON YOU HEAR THAT
COMMENT IS BECAUSE ONE OF THE SINGLE BIGGEST BOTTLENECKS TO
ACTUALLY ADVANCING THESE LARGE LANGUAGE MODELS, WHETHER IT IS
OPENAI, GOOGLE GEMINI, WHATEVER IT MIGHT BE -- YOU NEED
INCREASED COMPUTE POWER.

THAT IS EXACTLY WHAT BLACKWELL
BRINGS. THE IMPORTANT PART FOR THESE
COMPANIES IS MAKING SURE THAT THEY HAVE THE ABILITY TO
ACTUALLY CREATE FUNGIBILITY WITH THE GPU USE, SO THAT WHEN
YOU USE H 100'S, AND YOU ARE GOING TO MOVE TO BLACKWELL, YOU
CAN ACTUALLY USE THOSE FOR INFERENCE OR OTHER PARTS OF
YOUR COMPANY. FOR MICROSOFT, THAT COULD BE TO
SUPPORT OFFICE 365 AND COPILOT, OR GET HELP -- GITHUB COPILOT,
OR IN META'S CASE TO SUPPORT THE RECOMMENDATION ENGINE OR
WHATEVER IT MAY BE. HAVING FUNGIBILITY OF THE GPU
BUT ALSO THE ABILITY TO LEAN IN ON THE LATEST GENERATION SO YOU
CAN PUSH THE ENVELOPE WITH THESE MODELS. ED:
THIS IS A GOOD POINT TO GO TO APPLE BECAUSE IT IS A DIFFERENT
STORY.

THEY ARE NOT A HYPER SCALER.
DO NOT MAKE THE SAME DIRECT INVESTMENT IN INFRASTRUCTURE.
BUT THE AI STORY IS THE SAME. IT IS A SIMILAR POSITION FOR
YOU, YOUR APPROACH GOING INTO THIS EVENING? DENNY:
IT IS ALWAYS HARD. YOU NEVER KNOW, RIGHT?
HERE IS WHAT I CAN SAY. WE WERE REALLY IMPRESSED WITH
APPLE INTELLIGENCE, WHAT WE SAW. THE WORLD WAS WAITING TO HEAR
WHAT THEY WERE GOING TO DELIVER. THIS IS UNLIKELY TO BE A
MASSIVE CYCLE WITH THE 16. AS WE START LOOKING INTO NEXT YEAR, IF THEY GET SIRI RIGHT.
HERE IS THE BEAUTY OF THE APPLE MODEL.
ALL THIS CAPEX, THIS $200 BILLION PLUS THAT THE HYPER
SCALERS ARE DOING IN CAPEX -- APPLE GETS TO LEVERAGE THAT
BECAUSE THEY ARE THE GATEWAY TO.

THE AI ENABLED INTERNET FOR THE IPHONE INTERFACE. I THINK THAT IS REALLY UNDERAPPRECIATED AS IS RELATED TO APPLE. IT IS A VERY CAPITAL-EFFICIENT MODEL. ED: WITH APPLE, A WS, WHETHER THE INVESTMENT CYCLE IS STILL INTACT? DENNY: AMAZON IS A LITTLE DIFFERENT. IF YOU THINK ABOUT ALPHABET, MICROSOFT, META, AND THE FUNGIBILITY ON THE ELEMENT OF GPU AND CAPITAL EXPENDITURES -- AMAZON DOES NOT QUITE HAVE IT. THEY CANNOT REALLY REPURPOSE A BUNCH OF GPU'S INTO THEIR CORE BUSINESS, BECAUSE IT IS NOT A DAILY ENGAGEMENT APPS LIKE OFFICE 365 OR COPILOT OR META OR SEARCH, AND IT REALLY DOES HINGE ON THEIR ABILITY TO PROVIDE THE UNDERLYING COMPUTE FOR OTHER COMPANIES. SO THEY ARE REALLY IN A PUSH AND PULL OF HAVING BEEN THE

DOMINANT PROVIDER OF CLOUD COMPUTING SERVICES FOR THE LAST 15 YEARS, AND NOW PIVOTING THEIR BUSINESS TO TRY TO COMPETE AS AGGRESSIVELY WITH MICROSOFT AND ALPHABET IN THIS NEXT GENERATION OF CLOUD COMPUTE, WHICH IS AI ENABLED. ED: DENNY FISH, PORTFOLIO MANAGER AT JANUS HENDERSON. BREAKING NEWS CROSSING THE WIRE. YOUR GETTING MORE DETAILS ON THE PRISONER SWAP BETWEEN THE U.S. AND RUSSIA, WHERE WALL STREET JOURNAL REPORTER EVAN GERSHKOVICH AND FORMER U.S. MARINE PAUL WHELAN ARE BEING RETURNED. VLADIMIR CRIES A COUGH -- KRASI KOV WILL BE RELEASED IN A HISTORIC SEVEN COUNT PRISON SWAT. HE WAS SERVING A LIFE SENTENCE IN GERMANY FOR THE 2019 KILLING.

OF A FORMER CHECHEN REBEL IN
BERLIN. WE WILL BRING YOU ANY ADDITIONAL UPDATES AS WE GET
THEM. PRESIDENT BIDEN WILL DELIVER
REMARKS ABOUT THE AMERICANS FREED FROM RUSSIA.
AMAZON IS SHOWING INTEREST IN ROBOT SOFTWARE MAKEUP
COVARIANT, ACCORDING TO SOURCES. THE COMPANY HAS RAISED $245
MILLION FROM INVESTORS AND WAS VALUED AT 625 MILLION DOLLARS
IN A 2023 FUNDING ROUND. WE BROKE THIS STORY TOGETHER
LAST NIGHT. IT IS VERY IN LINE WITH WHAT
AMAZON IS FOCUSED ON. ME THE DETAILS THAT WE KNOW.
KATIE: THIS IS A WAREHOUSE, ROBOT,
SOFTWARE MAKER, USING AI. FOR THOSE WHO HAVE BEEN PAYING
ATTENTION FOR A WHILE, IT REMINDS OF AMAZON'S ACQUISITION
OF KIVA SYSTEMS IN 2012, WHERE

THEY BOUGHT A WAREHOUSE ROBOT
MAKER. BUT THIS IS OBVIOUSLY MODERN
TECHNOLOGY IN THIS SPACE, AND COULD SYNC WITH OTHER
WAREHOUSE ROBOTS THAT CAN PUT THINGS TOGETHER AND PACKAGE
THINGS, WHICH IS WHAT AMAZON NEEDS. ED:
AMAZON AND COVARIANT BOTH DECLINED TO COMMENT ON THE
STORY. AMAZON IS AT A STAGE WHERE IT
HAS 750,000 ROBOTS AROUND THE WORLD DOING ALL SORTS OF THINGS.
ONE SOURCE -- COVARIANT HAS RAISED ALL THIS MONEY. IT IS MORE OF AN R&D RESEARCH
PROJECT AND YOU NEED AMAZON TO GET GOING.
THE MARKET IS INTERESTING. DO YOU NEED A SAVIOR IF YOU ARE
A SMALLER STARTUP THAT IS BUILDING OUT YOUR TECH? KATIE:
THERE IS CAPITAL AVAILABLE FOR THE CREAM OF THE CROP STARTUPS
RIGHT NOW, BUT INVESTORS

SKITTISH, GIVEN THAT WE HAVE BEEN A COUPLE OF YEARS INTO A CORRECTION. HAVING A LARGE STRATEGIC LIKE AMAZON PROVIDE RESOURCES WOULD CERTAINLY HELP THIS STARTUP CONTINUE TO GROW INSIDE AMAZON. ED: WE ARE SHORT ON TIME. LOOKING AT CHARACTER - MUSKA WEIGHED IN. WHAT IS GOING ON? KATIE: THIS IS ANOTHER AI ACQUISITION RUMOR. WE HAVE HEARD THERE MIGHT BE SOME INTERACTION BETWEEN CHARACTER AI AND XAI ABOUT POTENTIAL. A DEAL IS NOT YET DONE AND THAT IS WHAT ELON IS WEIGHING IN ABOUT. WE HAVE HEARD THERE IS SOMETHING GOING ON. IT REMAINS TO BE SEEN WHETHER A DEAL ACTUALLY HAPPENS. ED: KATIE RUTH, THANK YOU VERY MUCH. BEFORE WE HAD TO BREAK, WE WANT

TO TURN OUR ATTENTION TO THE BANK OF ENGLAND, WHICH CUT INTEREST RATES FOR THE FIRST TIME SINCE 2020, AND SIGNALED FURTHER CAUTIOUS REDUCTIONS AHEAD. WE SAT DOWN WITH GOVERNOR ANDREW BAILEY. HAVE A LISTEN.
ANDREW: DON'T EXPECT WE ARE GOING BACK TO ZERO, BECAUSE HE WROTE WAS THE PRODUCT OF THE FINANCIAL CRISIS. I THINK TO GET TO THERE, CHECK OUT OUR PODCAST. THIS IS BLOOMBERG. I WANT TO TALK ABOUT GITHUB, THE LEADING AI POWERED DEVELOPER PLATFORM. THE COMPANY ANNOUNCED EXPANSIONS IN THE AI STRATEGY WITH INCREASED ACCESS TO AND NEW EXTENSIONS OF THE COPILOT MODELS. GITHUB'S CEO JOINS US. YOU HAVE BEEN VERY BUSY ON SOCIAL MEDIA. NOW IS YOUR OPPORTUNITY TO TALK.

ABOUT THIS MORE EXPLICITLY.
WHAT IS GOING ON? >> IT IS AN EXCITING DAY, AND I
AM SO FULL OF ENERGY. GET HELP -- GITHUB HAS MODELS
THAT OPEN AND CLOSE DIRECTLY ON THE PLATFORM. DEVELOPERS HAVE TO INTEGRATE
DIFFERENT MACHINE LEARNING MODELS RIGHT INTO THEIR APPS,
AND WE WANT TO CATCH THEM EARLY IN THE LIFECYCLE, TO GIVE THEM
ACCESS TO TRIALS. MICROSOFT HAS MODELED FOR FREE
RIGHT ON GET HELP -- GITHUB TO PLAY WITH THESE MODELS.
IT WILL GET A LIFE PATH INTO AZURE AI. ED:
YOU SAID HINT. IT'S NOT COPILOT, BUT IT'S NOT NOT AI.
EXPLAIN WHAT YOU WERE TRAINED TO GET OUT WITH THAT. >> IN THE PAST, WHEN I WAS ON THE SHOW, WE TALKED WITH AI,
GITHUB, ABOUT COPILOT. IT HELPS THEM TO DO THE WORK ON
A DAY-TO-DAY BASIS.

THE GITHUB MODELS WERE GIVING THEM A COMPONENT TO PUT INTEL ON IT. IT GIVES ACCESS TO MODELS LIKE LLAMA AND AI 21 LABS. IT WILL PUT THE MODEL INTO THE APPLICATION. IT IS NOT COPILOT, BUT IT IS AI AND MACHINE LEARNING MODELS AVAILABLE FOR DEVELOPERS. ED: THE OTHER NEWS CAME DURING MICROSOFT EARNINGS AND DISCUSSION AROUND GITHUB, YOUR GROWTH. THE ANNUAL RUN RATE -- THAT SEEMED LIKE AN IMPORTANT MILESTONE. WHY? >> IT IS IMPORTANT FROM TWO PERSPECTIVES. SIX YEARS AGO, I WAS PART OF THE TEAM AT MICROSOFT THAT INQUIRED GITHUB, AND WE HAD HIGH HOKE -- I HOPE FOR THIS TO BE A SUCCESSFUL ACQUISITION. THIS SHOWS THAT WE HAVE DONE A GOOD DEAL AT MICROSOFT. WE NOT ONLY BOUGHT A COMPANY

BUT WE INVESTED IN TO GITHUB,
AND WE SET THE POWER OF THE DEVELOPER IMMUNITY TO CREATE AN
EVER-GROWING REVENUE STREAM. WE SAID WE ARE GOING 45%
YEAR-OVER-YEAR. IT IS NOW OVER 2 BILLION U.S.
DOLLARS. 40% OF OUR GROWTH CAME FROM
COPILOT. 700,000 UTILIZATIONS. IT IS NO LONGER ABOUT THE EARLY
ADOPTERS. COPILOT HAS CROSSED THE CHASM.
AM I PART OF THE EARLY MAJORITY, OR AM I GOING TO WAIT AND
BECOME THE LAGGARD OF ADOPTING AI TECHNOLOGY IN MY DEVELOPMENT
LIFECYCLE? ED: THOMAS, IT IS GREAT TO HAVE YOU
BACK ON THE SHOW. THANK YOU VERY MUCH.
COMING UP, WE ARE GOING TO BE JOINED BY THE CEO OF KNICKKNACK
TO DIVE A BIT DEEPER INTO

META'S AT PERFORMANCE. TO TRY TO JOIN IT TO THE ADVERTISING STORY. ♪ ED: LET'S GET BACK TO META AND META'S RESULTS. THE STOCK OFFICE SESSION HIGHS BUT STILL UP 6%. THE TECH GIANT BEATING IS THEM. IT'S ON ITS ADVERTISING GROWTH. RACHEL TIP GRAPH, FOUNDER AND CEO OF THE E-COMMERCE MARKETING PROGRAM MIKMAK, JOINS US NOW. YOU HAVE THIS DATA SET TRACKING WHERE ADVERTISERS INVEST THEIR DOLLARS ACROSS NOT JUST META, BUT ITS COMPETITIVE LANDSCAPE AS WELL. I THINK WHAT IS INTERESTING IS THAT THE DATA YOU TRACK WAS BASICALLY JUSTIFIED BY THEIR FORECAST FOR SALES IN THE CURRENT PERIOD. JUST YOUR RESPONSE FOR THAT. RACHEL: THANKS FOR VERIFYING OUR DATA. MIKMAK WORKS WITH OVER 1700 OF THE BIGGEST BRANDS IN THE

WORLD, POWERING E-COMMERCE MEDIA. WHAT DID WE SEE IN OUR DATA? WE SAW 10% YEAR-OVER-YEAR REVENUE GROWTH, SO IT IS SPOT ON. META REMAINS THE MOST TRAFFICKED BRAND ADVERTISING CHALLENGE CHANNEL ON MIKMAK. ON ANY GIVEN DAY, IT REPRESENTS ABOUT 40% OF OUR TOTAL TRAFFIC. ED: YOU HAVE THE DATA, AND YOU NEED TO FIND THE REASONS BEHIND THE DATA. WE WENT INTO THE EARNINGS PRINT SOLELY FOCUSED ON ARTIFICIAL INTELLIGENCE. IT SEEMS LIKE THE EARLY WORK AND INVESTMENT META HAS MADE IN AI IS JUST MAKING THEIR ADS MORE COMPETITIVE. IS THAT FAIR? RACHEL: AI IS PART OF IT, BUT I THINK SOMETHING COMES BEFORE IT. FOR THE LAST 2.5 YEARS, META HAS STOPPED FOCUSING ON SHINY

OBJECTS LIKE THE METAVERSE AND GOT BACK TO BUSINESS AND FOCUSED ON ITS CORE REVENUE STREAM, WHICH IS ADVERTISING. THAT HAD TO RESPOND TO APPLE'S PRIVACY CHANGES. IT RESPONDED IN A BIG WAY. META DID A HUGE CAMPAIGN TO EVERY BIG GLOBAL ADVERTISER, AND ESSENTIALLY ENCOURAGED THEM TO INTEGRATE WITH THEIR EVENT ATTRIBUTION API. EACH BULLET PROVED THE EFFECTIVENESS OF THE ADS. THAT WAS NUMBER ONE. NUMBER TWO, META MADE A CONCERTED EFFORT TO PARTNER WITH RETAILERS AND ENABLE OFF-SITE RETAIL MEDIA AND THE META PLATFORM. IT ALSO IMPROVES THE EFFECTIVENESS OF THEIR ADS. I WOULD ARGUE THAT AI IS NUMBER THREE. WHAT AI IS DOING FOR META AND FOR REALLY ALL ADVERTISING PLATFORMS IS LOWERING THE BARRIER TO ENTRY. ONE OF THE MAJOR BARRIERS TO

ENTRY IN ADVERTISING IS CREATIVE. IF META CAN REMOVE THAT BARRIER, IT OPENS THEM UP TO ANY BUSINESS ON THE PLANET. I SUSPECT WITH THE INVESTMENTS IN AI, YOU ARE GOING TO SEE THE SMALL MEDIAN BUSINESS ADVERTISING GROWTH. ED: WE JUST SHOWED THE PIE CHART BREAKING DOWN WHERE ADVERTISERS PLACE THEIR MONEY. THE STORY YOU ARE TELLING IS SO SIMILAR TO LAST WEEK WITH ALPHABET. WE WENT INTO IT REALLY FOCUSED ON AI, BUT THE BIGGEST CONTRIBUTOR TO GROWTH WAS JUST THE SEARCH BUSINESS, THE LEGACY BUSINESS. RACHEL: 100%. IT IS ALL ABOUT MAKING EVERY DOLLAR STRETCH FOR THE BIGGEST ADVERTISERS IN THE WORLD. ON TOP OF THE BIG TECH EARNINGS, YOU HAD BIG CPG EARNINGS. THEY ARE STRUGGLING WITH IS TOPLINE GROWTH.

WHERE IS TOPLINE GROWTH COMING,
INVESTING IN CHANNELS LIKE META, GOOGLE, AND TIKTOK?
WE ALSO SEE THAT META IS THE MOST TRAFFICKED SOURCE ON THE
PLATFORM, BUT WHAT IS NUMBER TWO? TIKTOK.
TIKTOK NOW REPRESENTS 20% OF OUR TOTAL TRAFFIC.
IF WE WERE SPEAKING FOR YEARS AGO, TIKTOK WOULD NOT BE IN
THAT CHART. IF I WAS META, THE HEADWIND
THEY NEED TO WORRY ABOUT IS TIKTOK, AND THEY ALLUDED THAT
INTO -- THAT IN THEIR MEMO. ED: TIKTOK IN THE UNITED STATES --
IF YOU ARE AN ADVERTISER, WHY WOULD YOU KEEP PUTTING DOLLARS
INTO THAT PLATFORM IF YOU KNOW THAT IS A POTENTIAL RISK DOWN
THE ROAD? RACHEL: BECAUSE OF THE EFFECTIVENESS OF
TIKTOK.

WITH ADVERTISING, IT IS VERY EASY TO MOVE DOLLARS FROM CHANNEL TO CHANNEL. WE HAVE TALKED ABOUT ACCESS -- WE HAVE TALKED ABOUT X IN THE PAST. DID ADVERTISERS CARE ABOUT A DROP IN TRAFFIC? NO, THEY JUST REALLOCATED THE DOLLARS ELSEWHERE. UNLESS SOMETHING HAPPENS WITH TIKTOK, WILL SEE INVESTMENT BY ADVERTISERS BECAUSE OF THE EFFECTIVENESS OF THE APPS. WE SAW A YEAR-OVER-YEAR INCREASE IN TIKTOK TRAFFIC. WE ONLY SAW 10% IN META. IF I WAS META, I WOULD BE VERY CONCERNED ABOUT TIKTOK RIGHT NOW. ED: THE FOUNDER AND CEO OF MIKMAK. EXCELLENT BREAKDOWN OF YOUR DATA AND LINKING IT TO META'S OWN DATA. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY.

THERE IS ONE BIG EARNINGS
EVENING READY TO GO. SO MUCH TO RECAP ON THE
PODCAST. YOU KNOW EXACTLY WHERE TO FIND IT.
APPLE, SPOTIFY, AND THIS IS WHAT IS TO COME.
THIS IS THE PICTURE OF THE MARKETS RIGHT NOW. WE AWAIT APPLE, WHICH IS DOWN
0.9%. WE AWAIT. -- WE AWAIT AMAZON.
META OFF SESSION HIGHS. IT CONTINUES TO TRADE, ON TRACK
FOR ITS BIGGEST JUMP. THIS IS BLOOMBERG TECHNOLOGY.

Meta's AI Investments Pay Off, Nvidia Shatters Records | Bloomberg Technology

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