Show notes
Brad Stone, Bloomberg News Senior Executive Editor for Global Tech, shares his AI insights from the World Economic Forum in Davos. Wedbush's Dan Ives details his takeaways from the CES conference. Dana Telsey of the Telsey Advisory Group discusses the strength of the US consumer in the wake of retail sales data. Charles Schwab's Liz Ann Sonders ties in Led Zepplein with her markets outlook. Hosted by Tom Keene and Damian Sassower. Get the Bloomberg Surveillance newsletter, delivered every weekday. Sign up now: https://www.bloomberg.com/account/newsletters/surveillance Full Transcript: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrell and Lisa Abramowitz. Join us each day for insight from the best and economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. He is definitive on Amazon of course, the Trophy book right now Amazon Unbound. Jeff Bezos The Invention of a Global Empire. He joins us from Davos, the meetings of the World Economic Forum at brad Thrilled to have you with Bloomberg Surveillance this morning. Let me cut to the chase. I see AI at Microsoft is countable, revenue, co pilot, azore all the rest of it. And I see a lot of other AI is smoking mirrors. How do you parse between legitimate artificial intelligence future and the makeup, the fantasy, the comedy of it. How do you parse? Oh? Boy, well, thanks Tom for having me. Hi Damien. Look, I've been covering Silicon Valley long enough that I've seen this story play out before. We're at the beginning of a hype cycle. There will be disappointment a lot of you know, the visions of Agi computers that reason that change our world, they seem far fetched, you know. There there we talk about a trough of dissolutionment that will happen. But you're right that there you know that there are real revenues, real benefits. Yesterday, Microsoft announced that it was bringing its open AI powered co pilot to the office seat, so you know at twenty dollars a month, making it available small business as an individual users. That's real. Yeah, brtt I signed up last night. I was going to be reack. Can you see me, Damien? Can you see me do an artificial Intelli get out of the way. Fred. If I look at this, can you say that the Magnificent seven they seem to be away from the hype. How is the Magnificent seven going to create revenue and cash flow out of AI? Yeah? I mean they're the best position because they're they're they're selling the picks and shovels to all the miners. You know, this is Alphabet and Amazon and Microsoft running the world's most powerful cloud services and making basically AI available as a service to every university and startup in consumer goods company that you know wants to use these tools for a variety. It's it could be R and D could be customer service. So you know, even even though that'll be a work in progress there, the revenues will be real. My question for Santia Tom by the way yesterday was you know, do you control any of this. You're you're investors in open AI. You don't even have a board seat. You're like in the back of the bus with a seatbelt, and it's got such peculiar governance. And he said, you know, it's fine, we just want stability. So I don't know if I quite believe it. I think they're outsourcing a key competency. But they're in the cappards seat, the driver's seat because they did make that investment. I'm sure the Amazons and the Googles of the world wish that they hadn't passed up the open AI opportunity when they had the chance. Well, Brad, I appreciate you answering those two questions from that artificial personification of Tom Keen that wasn't really Tom Keen answering those questions, And my question for you is talk to me about deep fake videos X these platforms. What's to stop open AI and chat, GPT and all this artificial nonsense from mudding the waters ahead of the election? Yeah? Well, what it's funny because it is really the talk of the conference that you've got national elections in some seventy seven countries around the world. Half the world's population could head to the polls at the same time as this enormously powerful technology is made available to people, and what's to stop it from being missus? I know this is going to carry a lot of water with our listeners, but you know they are raising their right hand and putting their left hand over their hearts and saying, we're not going to allow our technology to be abusing. They really understand the risks. I mean, I mean do they? I think they do? They? I think they do because we've all seen this movie before and meta its reputation went through the meat grinder because social media was perverted. You know, yesterday, it's no surprise that Sam Altman's here. He spent time with us at the Bloomberg House, and before our interview, they posted a statement on their blog on their election policy and said that chat GPT cannot be used for any political campaign. And they said that images generated by DOLI, their their image maker, will carry a cryptographic watermark to show the providence. And but you know, and my question for Sam was like, these are great intentions. You've got the weight of all the black cat developers trying to break this stuff. How to enforce it where Meta and Google and TikTok have all kind of let failed it with the genie out of the bottle, right And he said, you know, they're aware of the risks. So I do think it's going to be a rocky year with some of these elections, and we're going to see this technology abuse, right, brand I'm sure that no one can forge those crypto water marks. I have one last question. I mean, my colleague Tim Craig had from BI is actually in Davos listening to Altman, and he said, I mean, you know, Paulman obviously spoke and he was talking about how AI will make people more productive. Talk to us a little bit about that narrative. The great worry is that when this technology is fully implemented, that there will be a great dislocation of workers at low level level programmers, customer service agents, you know, in en mass replacement along with productivity, and it will worsen the digital divide, and you'll have countries that are particularly hard hit, and it could lead to further political alienation and you know, maybe more or autocratic government's or real nightmare scenario. So you know, that's the worry. And I think the stewards of this technology, you know, Davos is the land of performative optimism, I kind of like to joke, And so of course they're saying that it's going to increase productivity and we're all going to lead better lives working less. You know, maybe Tom will get to sleep in one one morning when AI kind of takes over. But I don't know. I mean, you know, the I think it will make people more productive, but I think it might replace some jobs as well. More question, I think it's what everyone knows. With your your ownership of Amazon and all you've done with the Amazon unbound, They've gone round trip massive post pandemic collapse. The come back is the next Amazon, Josie's Amazon. Is it going to make total return like we've known over the last decade. Excuse me, so you're asking me about the stock price. I mean it's it's yeah. I mean, look, if I could predict it, I'd probably be in a different line of work. I mean, I do think. You know, Andy Jassey is now a couple of years into his tenure. He is and by the way he's here at Davos, he has pared back some of the excesses of the late stage Bezos that we just saw another round of Laos. This is becoming a very lead and efficient company as he bets on the core competencies, which is AWS and the Amazon marketplace, empowering third party sellers. They've got their work cut out for them. But I do think there's a bit of momentum there. Brad Stone from the meetings of the World Economic Forum, I can't say enough about his new book, Amazon and Bound. Jeff Bezos, The Invention of a Global Empire, Joining us now the Tech Pignata of two twenty four. Daniel Heize joins us in Webbush. He's been traveling ces Las Vegas, joining us today from Warsaw Poland. And what you learn at Las Vegas at cees don't give me the mumbo jumble. What was the backstory in Las Vegas? I thought it's about Ai just how mainstream the technology is getting. I mean, tom My opinion, the biggest cees in the last twenty five years. It shows this AI revolution it's not hype, it's real. It's on the doorstep. I want you to talk Dan Ives, and this is what you don't see folks, as Dan Ives is doing the media blah blah blah by this apple. The gloom crew hates them, but beneath it is careful financial work. Can you quantify what the new announcement of AI over to Microsoft three sixty five, like, can you add up the impact of that to a giant company like Microsoft. It's when you put it together, this is going to be eight hundred billion to a trillion of incremental value to the Microsoft story. I mean they are leading the AI revenlue with the Della and Redman, along with the godfather of AI jents and the video Tom I think the monzation that's happening in Microsoft is still so underappreciated in terms of what we're seeing in the field. Dan they're asking for more money, I mean they're asking for more computing power, more hardware, more technology. They say, this is not just big, it is massive. It is huge. Do you agree with that. I think it's the biggest transformational tech we've seen since Star of the Internet. And that's why enterprises they're lining up. Conversion could be sixty seventy percent. And that's why as Tom's talking about the doomsayers again, you know, obviously negative untech, I think this earning season turns that around because the real monization of AI is here. It starts from the Della and Microsoft and Dan. I mean the real I mean you just said it right there. Don't you need access to data, to unique data sets in order to basically make the AI go. And so when I think of Amazon, okay, find they've got access to consumer data, I think of Microsoft. It's everything else. You know, people on their computer and talk to us about these companies and the data they have access to and how that's going to differentiate them in the environment you're talking about. I mean, it's a new age. And that's why when you look at the cloud, the big hyperscale players, Microsoft, of course, Amazon, Google and others, they've had the data sets, but they haven't had the tools that they can monetize and make intelligence. That that's why the use cases are excluding. That's why this AI revolution right now, I believe it fuels is new tech bull market. I a February second, We're going to get Apple earnings. It's a ballet. I actually sit down with the beverage of my choice folks at the home computer after the surveillance n APP and what's a joy here? Is they release like other firms, a press release that's clear and in English? Dan ies, what are we going to see in the treatment of the four accounting statements from Apple? Four pm, February second. Yeah, look, that's the drum roll, right, And I think when Cooper Tino comes out, the big thing is going to be services. We are looking at team type of growth for services and that's key that could really be incrementally we need that as a one point five to one point six trillion services the margins double out of hardware obviously all focus on iPhone units. Despite obviously many yelling fire in a crowd theater, I actually think it was a pretty strong iPhone unit number. Okay, wait, well, want to get upside of the track now, Dan knows a drill, Damian pick it up here. Okay, But I'm sitting there with the beverage in my left hand, looking at the accounting statement, and the media is not readjusting the currency iPhone sales as mister Ive says, we're pretty darn good. And then you had to figure in dollar currency adjustments. Whoa doom and gloom? I mean, Ives is one hundred percent right about the iPhone of the global market, Tom. I mean, it just passed Samsung as the world's top phone in the full year twenty twenty three. But I mean, Dan, here's my question. What companies are best position to profit from what you're talking about here? I mean, is it the chip makers? I mean what sort of hardware companies? Is it software? I mean, what are you seeing? I think it's software and chips. When you look at names like Microsoft, the Magnificent seven, you can Microsoft, Google, Amazon. Then you look at some of these names like Mango, dB, Salesforce, dot Com and of course a MD with Lisa Sue and chips. This is the start of this tidal wave, A trillion dollars of incremental spend next decade. That's how this is all going to play out. Software and chips leading it. You know, I got one more for you. I mean, if you're a new company with you know, and you're in the AI boom, and you know you've got the talent, and you know you're competing. Where do you want to be located? Do you want to be on the West Coast? Do you still want to be in Palo Alto. I want to be based in a five one two area. Oh. Really, that's new look and that's what that's that's that's a silicon value two dot of you're seeing that boom more and more for AI engineers, and I think that's really started the new age that we're seeing from an AI perspective. Well, we'll help our international audience. What is Michael Dell and Venna down in Austin to the two of you, Damien? When you think five to one two South Congress, I think of South Congress. I think of barbecue. I mean I think of Austin, Texas. I mean that is the Los Angeles. I think of Joe Wisenthal's band myself. I think they're you know, outstanding dan Ees. What's special about Austin, Texas. I Mean, there's a lot of things special about Austin, Texas, but the engineering talent that that's been created there, obviously outside University of Texas, is really unprecedented. It's one of the you know, more and more tech companies from Google to of course Tessa to Meadow moving down there, and it's really becoming a really go to destination for tech leaving the four one five, going to the five one two worldwide on Bloomberg surveillance. And it's time now to make some news. You got a two hundred and fifty dollars price target on Apple. Can we lift that up to day? Miss Graves? I mean, look Tom, I mean you talk the bolt case. This will be a four trillion dollar mark ab we believe by the end of this year. I remember AI. There's zero dollars given for AI in Apple's valuation. That's why this is it. Get that popcorn ready in the key in household when they come out with that AI and au June from Warsaw poland a trooper to be with us in his travels. Dana is a Webush of course, outstanding work by him. It's he's with Webbush Security is optimistic on Apple and computers. Right now, we're going to talk about the pulse of the Christmas holiday this season that we saw. There's just no one better to do with this than Dana at Telsea with all of our heritage at the corner in Fifth Avenue in fifty seventh Street, her family's heritage, and she's done it in securities analysis per year at Dana, you were right, the gloom crew was wrong. What did the people of caution get wrong about retail America i…
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