Paramount's Writedown, Silicon Valley and the Election | Bloomberg Technology

Market Performance and Earnings Reports

• The NASDAQ is flat for the week, but a negative close would mark five consecutive weeks of declines, the worst run since May 2020.
• Despite concerns about growth and geopolitical risk, earnings have been mixed, and the technology sector is feeling better, in part due to AI infrastructure.
• NVIDIA, a major player in AI accelerators, is expected to report earnings on August 28.
• The market's performance is expected to be influenced by earnings reports, with NVIDIA's report scheduled for August 28th.

AI Infrastructure and Chip Demand

• TSMC, a major chip manufacturer, saw sales grow 35% in July, driven by strong demand for AI accelerators.
• This growth is significant compared to last year when smartphone market-related chip orders were weak.
• The strong demand for chips from companies like AMD and Intel suggests that AI infrastructure buildout is continuing.
• While TSMC's performance can provide some insight into NVIDIA's potential earnings, the relationship is not direct.
• Despite concerns about new chip designs, NVIDIA has confirmed that demand for its older products remains strong.

Paramount's Financial Performance and Streaming Strategy

• Paramount has announced a $6 billion write-down on its legacy cable TV assets, similar to the recent write-down by Warner Bros. Discovery.
• Paramount's write-down is attributed to the declining value of cable television networks as streaming services gain popularity.
• Paramount Plus lost subscribers in the second quarter due to a one-time event, the end of a deal in South Korea.
• Despite the setback, Paramount is optimistic about its streaming service and has seen revenue increases.
• Paramount's deal with Skydance, expected to finalize in the first half of 2025, is contributing to a positive outlook for the company.
• Paramount is also undertaking cost-cutting measures, including a $500 million cost-reduction effort and $2 billion in cost efficiencies.
• Paramount has announced layoffs affecting 15% of its U.S. workforce.

Tech Layoffs and AI Investment

• Cisco is expected to lay off thousands of employees in a second round of job cuts this year.
• The job cuts could be announced as early as Wednesday, August 14th.
• Cisco reports earnings on Wednesday, August 14th.
• Over 126,000 tech employees have been laid off so far in 2024.
• This is a 42% decrease from the same time last year.
• Tech layoffs are down quarter-on-quarter.
• Layoffs in the tech industry have generally been declining since their peak in the first quarter of 2023, but have increased slightly in recent weeks.
• Despite the recent uptick, 2024 is still on track to have more layoffs than any other year this decade, except for 2023.
• Companies like Tesla, S&P in Germany, and Cisco have recently announced layoffs.
• Tech companies are increasingly citing AI as a reason for layoffs, as they reallocate resources to invest in AI development.
• Dell has cut employees as part of a sales team reorganization that included creating a new team focused on AI sales.
• Intuit laid off 1,800 employees earlier this year to invest in AI development for its tax preparation software.
• Building AI is expensive, with senior AI engineers in the Bay Area earning an average base salary of $208,000 per year, which is 16% more than non-AI engineers.
• When including equity, AI engineer compensation packages can easily reach half a million to a million dollars.
• The economic environment is still a factor, and companies are finding that the only way to increase investment in AI is to cut costs elsewhere.
• Layoffs are expected to pick up again as we head towards the end of the year and early next year, as companies typically do their annual budgeting around the end of the year.
• The first and fourth quarters tend to be the biggest quarters for layoffs, while the middle of the year tends to be slower.

Akamai's Earnings Report and Cybersecurity

• The conversation then shifts to Akamai, a cybersecurity company, and its recent earnings report.
• The speaker highlights that Akamai's earnings have been inconsistent, leading to questions from analysts.
• Akamai's enterprise compute business is performing well, with revenue expected to reach $100 million annually.
• The company attributes this success to the importance of security for major enterprises, even during tough economic times.
• Akamai's market-leading products and competitive value proposition, offering better performance at a lower price point, are contributing to its success.
• Akamai was not directly impacted by the CrowdStrike incident, as it does not use the software.
• The incident highlighted the importance of phased updates for software, as simultaneous global updates can lead to unintended consequences.
• Akamai learned this lesson 20 years ago and has since implemented phased updates to prevent such issues.
• The incident also emphasized the importance of reliability in security systems, leading enterprises to prioritize investment in this area.
• The speaker believes that the CrowdStrike incident will push enterprises to take action on the academic debate regarding agent versus agent-less security delivery.
• Distributed Denial of Service (DDoS) attacks are a common and long-standing threat, with some of the largest attacks originating from the Middle East.
• Akami Technologies, a leading provider of cybersecurity services, has seen a significant increase in DDoS attacks and offers solutions to help defend customers.
• Tom Leighton, CEO of Akami Technologies, emphasizes the importance of having state-of-the-art defenses against DDoS attacks, even though they have been around for decades.

Social Shopping and the Impact of Technology on Entrepreneurs

• The discussion then moves to the rise of social shopping, particularly in China, where a company owned by Wang has become the country's richest person.
• The speaker mentions that social shopping is becoming increasingly popular in the United States.
• The discussion then touches upon the impact of Turkey's ban on Instagram on female entrepreneurs who relied on the platform for sales.

Kamala Harris's Candidacy and Tech Industry Support

• The discussion then shifts to the upcoming election and the role of technology in the campaign.
• The segment mentions Kamala Harris's candidacy and the potential impact of her campaign on the election.
• The segment also highlights the importance of understanding the role of technology in shaping public opinion and influencing voters.
• The text discusses the support for Kamala Harris within the tech industry, particularly from a grassroots group called Tech4Kamala.
• Tech4Kamala was founded by Shannon Nash, a former Wing CEO, and has garnered support from over 1200 tech workers.
• The group aims to give voice to the millions of tech workers who support Harris and her stance on issues like responsible AI and STEM education.
• The text highlights the contrast between the vocal support for Trump and JD Vance from a few prominent figures in the tech industry and the widespread support for Harris among tech workers.
• The text also mentions the support for Harris from San Jose Mayor Matt Mahan, who emphasizes the city's close ties to the tech industry.
• Mayor Mahan, former Mayor of San Jose, highlights Kamala Harris's experience in the tech sector and her understanding of the importance of a diverse workforce, immigration, intellectual property, and infrastructure investments.
• Shannon, a guest on the show, believes that Vice President Harris will bring a fresh perspective to the tech industry and continue the policies of President Biden.
• Mayor Mahan emphasizes the importance of having a partner in the White House who understands the challenges faced by Silicon Valley and California and will not use them as a "punching bag."
• Mayor Mahan believes that Vice President Harris will be a pragmatic partner who will help address the challenges faced by the region.

Election Discussion and Candidate Stances on Silicon Valley Issues

• The discussion focused on the upcoming election and the candidates' stances on issues relevant to Silicon Valley.
• Mayor Matt Mahan of San Jose expressed his support for Kamala Harris, highlighting her pragmatic approach to issues like homelessness and public safety.
• Mahan acknowledged that Harris has been criticized from both sides of the political spectrum but believes she represents a balanced approach.
• Shannon Nash, co-founder of Tech4Kamala, also expressed support for Harris, emphasizing her understanding of the tech industry and her ability to represent the interests of Silicon Valley.
• Nash argued that Harris's support within the tech community is evident in the rapid mobilization of support for her candidacy.
• The discussion also touched upon the perception of J.D. Vance as a candidate who understands entrepreneurship due to his experience as a venture capitalist.
• Nash countered this perception, suggesting that Harris's record and her VP pick demonstrate a stronger commitment to supporting the tech industry.

Bitcoin's Performance and the Election

• The stock market has experienced four consecutive weeks of decline, the worst run since May 2022.
• Bitcoin's price has fluctuated throughout the week, trading near $60,000 per token.
• The discussion surrounding the recent election has included Bitcoin's performance.

Sound Ventures and AI Investment

• Alexandra Burbey, an investor at Sound Ventures, will be joining the show to discuss her perspective on AI from a venture capital standpoint.
• Sound Ventures, founded by Ashton Kutcher, has invested in companies like Airbnb and Spotify.
• Burbey joined Sound Ventures a few months ago, drawn to the firm's investment in successful companies and the positive feedback from founders.
• Sound Ventures has a generalist approach to investing, with a particular focus on AI.
• The firm launched a thematic fund in 2023, investing in companies like OpenAI and Anthropic.
• The thematic fund operates in parallel with Sound Ventures' flagship funds.
• Sound Ventures invests in companies across various layers, including application, infrastructure, and everyday software.
• The firm focuses on companies that are using AI to improve their operations and customer interactions.
• Sound Ventures believes that all companies need to incorporate AI to remain competitive.
• The firm has a presence in various locations, including the Bay Area, New York, and Los Angeles, as well as globally.
• Alexandra Burbey, a partner at Sound Ventures, has a background in various industries and has worked with a diverse range of founders.
• While Sound Ventures is known for its consumer-focused investments, it also invests in enterprise companies.
• Burbey believes that her consumer background is valuable for enterprise companies, as it helps them focus on branding and storytelling.
• Burbey is excited about the opportunity to combine her consumer background with her experience in AI.

Viral Moments at the Olympics and Misinformation on Social Media

• The 2024 Olympics in Paris have seen several viral moments, including a swimmer's love for muffins and a Turkish shooter's win without equipment.
• Elon Musk posted a meme of the Turkish shooter on X.
• Responsible Media, a coalition of advertisers, dissolved after Elon Musk's ex-father filed a lawsuit against it for organizing a boycott of X's advertisements.
• The lawsuit alleged that Responsible Media caused advertisers to flee the platform by setting guidelines around the type of content an ad could be next to.
• Musk has used litigation as a tool in the past, targeting organizations that found harmful content on his platforms.
• Linda Yaccarino, CEO of X, has spoken about the importance of addressing misinformation.
• Aisha, a journalist, believes there is a shift in how misinformation is being handled, with platforms struggling to keep up with its spread.
• The recent war between Israel and Hamas and the UK riots have highlighted the rapid spread of misinformation on social media.
• Musk has been criticized for sharing articles about the UK riots that turned out to be fake news.
• A fake article from The Telegraph was shared on social media.
• The Telegraph later confirmed that they did not create the article.
• The article received almost 2 million views before it was deleted.
• The article was deleted by the original creator.