Block's Bullish Nature, Disney's Succession Plans

Intro - Tech, Disney, Microsoft, Taiwan Semiconductor

• This is Bloomberg Technology, a show that covers the intersection of hardware, innovation, money, and power in Silicon Valley and beyond, hosted by Caroline Hyde and Ed Ludlow, live from London and San Francisco (9s).
• The show will cover various topics, including why Muddy Waters founder Carson Block is bullish on big tech, the future of Disney's kingdom, and the company's new leadership and CEO succession plans (34s).
• Disney has named former Morgan Stanley CEO James Gorman as its new chair of the board and plans to name a new CEO early 2026 (1m20s).
• Microsoft is taking on Salesforce with new agents, and the US-listed shares of Taiwan Semiconductor are continuing to gain momentum (1m31s).

Muddy Waters on Big Tech & Magnificent Seven

• The show will feature an interview with Taiwan's Premier, discussing the country's thriving chip business and energy needs (1m39s).
• Muddy Waters Capital founder Carson Block offered bullish advice on the "Magnificent Seven," stating that flows drive the US market, especially the S&P 500 (2m4s).
• Block believes that as long as the labor market is strong in the US, there will be inflows into the most heavily weighted names in the S&P 500, making the market more fragile but still a good investment opportunity (3m8s).
• Block suggests that it may be best to "close your eyes and buy" the Magnificent Seven, as the Fed can likely fix any issues that arise (4m11s).
• The current environment is considered a "sweet spot" for US equities, with a strong economy and limited near-term risks, making the US dollar attractive and supporting the performance of the MAG seven (Mach seven) stocks (4m37s).
• The MAG seven stocks are seen as a strategic asset allocation play, expected to deliver not just in the short term but also in the long term, with many investors looking to continue their exposure to these stocks (4m55s).
• Despite the attractiveness of the MAG seven stocks, there are opportunities in other parts of the market that may not be as expensive and have not yet seen a catch-up trade post-COVID (5m16s).
• The market, particularly the MAG seven stocks, is expected to be supported by retirement money, which is on "autopilot" and provides a continuous stream of inflows (5m36s).
• The MAG seven stocks are considered a safety defensive play in the US market, attracting flows and providing a consistent performance (6m0s).

Tech Earnings Season & Market Outlook

• Earnings season is starting for the technology sector, and this quarter is considered important in maintaining the rally, with expectations high due to frothy valuations (6m42s).
• The tech sector is under pressure to deliver on lofty expectations, but a disappointing quarter may not necessarily sound the death knell, instead leading to a recalibration of expectations (7m15s).
• Investors are expected to continue believing in the MAG seven stocks, particularly those with a strong narrative, over the next few quarters and years (7m43s).
• The cybersecurity sector, including companies like Palo Alto Networks, is seeing a trade up to new records, with other key names in the sector also performing well (7m54s).
• The NVIDIA chip sector is important but reducing in importance due to a strong economic backdrop, with investors focusing on companies that can benefit from new themes in the market (8m23s).
• The S&P 500 may not keep up its rate of returns, with Goldman Sachs predicting an annualized 3% return in the future, leading investors to consider other assets such as bonds and fixed income (9m11s).
• Investors are advised to have exposure to fixed income, with long-duration investments for safety and credit for yield income, given the strength of the US economy (9m26s).
• The Fed and other central banks' low interest rates drove high returns in the past, but with rate cuts expected, the math for equities becomes more challenging, although still a compelling proposition (9m56s).
• Diversification across risk assets is recommended, as it continues to deliver, with opportunities available in various sectors (10m18s).

Disney Board Changes & CEO Succession

• Disney has announced changes to its board, with James Gorman, former Morgan Stanley CEO, taking on the role of chairman in 2025, and a new CEO to be revealed in early 2026 (10m36s).
• James Gorman has been leading Disney's succession planning since August and is seen as a strong candidate to oversee the process, given his track record and lack of baggage from previous Disney succession plans (11m29s).
• Mark Parker will retire, and James Gorman will take over, with Gorman's formal role in making the next CEO choice seen as a sensible move (12m3s).
• The names in the running to replace Bob Iger as CEO of Disney include the four direct reports to Iger: the head of Parks, the head of TV, the head of movies, and the head of ESPN, although the company has kept its cards close to the vest and no leading candidate has been identified (12m14s).
• Disney has had a good year, with a strong Emmy performance, a successful film release, and a mixed performance from its parks, but still faces open questions about its future, particularly regarding ESPN's transition to direct-to-consumer (12m52s).

Microsoft vs. Salesforce in AI

• Microsoft is launching a new set of A.I. tools designed to perform business-related tasks, such as sending emails and managing records, as part of its rollout of A.I. technology (13m31s).
• The launch puts Microsoft in competition with Salesforce, as both companies aim to lead the way in A.I. technology in the SaaS field, with Salesforce CEO Marc Benioff having recently spoken about Microsoft's A.I. tools (14m34s).
• Microsoft and Salesforce are competing in the CRM and supply chain management segments, with both companies seeking to establish themselves as leaders in A.I. technology (14m48s).

Prosser's E-commerce Surge & Other Tech News

• Prosser's e-commerce division is expected to surge more than 950% this fiscal year, with adjusted earnings before interest and taxes projected to be $400 million in the 12 months ending in March, under the leadership of new CEO Fabrizio Blasi (16m1s).
• Jack Dorsey will join Bloomberg's London Tech summit tomorrow, and Lumen Technologies and Matta have announced a partnership to support Metz's AI ambitions by providing dedicated interconnection for Metz's infrastructure, crucial for future development (16m27s).

Russia's Hacking Campaign Against Georgia

• Russia has been operating a multi-year hacking campaign targeting the nation of Georgia, focusing on the country's Foreign Ministry, finance ministry, central bank, and key energy and telecommunications providers (16m39s).
• Russia's hacking efforts involve targeting countries like Georgia with disinformation and searching for vulnerabilities within critical infrastructure and government ministries, allowing them to gather information undetected for years and potentially commit acts of sabotage (17m17s).
• The hacking operation had two main aspects: gathering intelligence, including emails of government officials and employees, and putting themselves in a position to sabotage key bits of the country's critical infrastructure, such as the energy grid, telecommunications, or railways (18m20s).
• Russia's goal in the hacking campaign appears to be gathering information and positioning themselves to take action if Georgia's politics go in a direction Russia does not like, with the ability to commit acts of sabotage, such as targeting electricity grids or telecommunications systems (19m6s).
• The hacking campaign is seen as a precedent, with similar actions taken by Russia in the past in Ukraine, and it is expected that Russia will not officially comment on the reports, but may refer to them in a press conference or statement in the coming days (19m56s).
• The hacking campaign's impact on Georgia's democratic process, particularly with elections taking place this week, is a concern, and it remains to be seen whether the country will be able to proceed with its democratic process (20m41s).
• Elections in certain countries may be influenced by external factors, such as disinformation campaigns and voter manipulation, as seen in the recent Moldovan election where reports of Russia paying people to vote in a certain way surfaced (21m5s).
• Russia's use of hybrid campaigns, disinformation, and hacking to achieve its goals is a topic of ongoing reporting, with a focus on its activities in Ukraine and other countries (21m47s).

Interview with Taiwan's Premier

• Taiwan's premier, Cho Jong Tai, believes the country's economic resiliency comes from its partnership with friendly countries and its strong, vertically integrated supply chain, which enables it to play a crucial role in the democratic supply chain (24m27s).
• Despite the importance of high-tech industries, especially semiconductors, Taiwan aims to achieve comprehensive growth by helping traditional industries and small to medium-sized enterprises adopt AI applications and integrate with the industry (24m51s).
• The Taiwanese government plans to use its resources to assist small and medium-sized enterprises in adopting AI and integrating with the industry, allowing the economy to grow comprehensively (25m8s).
• The upcoming US presidential election may impact Taiwan's semiconductor industry, with former President Trump having previously suggested that Taiwan should pay protection fees to the US (25m27s).
• Disney has announced James Gorman as its new chairman of the board, starting in 2025, and promised to deliver a new CEO by early 2026 (23m38s).
• The market is under pressure due to macro concerns, but some tech companies, such as Palo Alto Networks and Nvidia, are performing well, with Nvidia reaching a record high (23m48s).
• The demand for Nvidia's chipsets will be closely watched as its customers, including Alphabet and Microsoft, report their earnings (24m4s).
• Taiwan's government has a responsibility to its industries and the world, and the country needs to rely on advanced countries for new technologies in materials and equipment (25m46s).
• Taiwan must take responsibility for safeguarding its sovereignty and national security, and has allocated over 640 billion Taiwan dollars for defense in the next year's central government budget, bringing defense spending to approximately 2.4 to 2.6% of GDP (26m25s).
• Taiwan hopes that through its efforts, the world will recognize its determination and provide greater support, maintaining not only Taiwan's security but also the peace and stability of the entire Indo-Pacific region (26m48s).
• There is a debate about electricity supply due to the importance and expansion of artificial intelligence, but Taiwan expects to have no issues with power supply for industries before 2030 (26m56s).
• Taiwan's nuclear power plants are being decommissioned, but the personnel will remain to address new technologies or solve current issues, and the country will reconsider the existing nuclear power plants in the future (27m37s).

Elon Musk, X, and the 2024 Election

• Governor Josh Shapiro expressed concern over Elon Musk's plan to give money to voters, suggesting law enforcement reviews, following Musk's announcement to donate $1 million daily to a random registered voter supporting his super PACs petition on free speech and gun rights (28m16s).
• Elon Musk is using his social media platform X as a pro-Trump megaphone, with many of his posts supporting Trump and pushing his Republican or conservative agenda (29m1s).
• Vice President Harris also posts daily and regularly on her official vice presidential account and personal or campaign account, but the content and commentary of Musk's posts are notable (29m45s).
• The social media platform X has an algorithm that prioritizes election content, making it front and center for every news hour, which may lead to burnout for some users (30m54s).
• In contrast, Meta and Mark Zuckerberg are taking a different approach by leaning away from election content and not recommending posts about the election to people outside of their network (31m26s).
• The prioritization of election content on X may be a deliberate choice to cater to users who want to see election information 24/7, but it may also lead to burnout (31m42s).

ZIP's AI-Powered Procurement Platform

• ZIP, a high-powered procurement software startup, has raised $190 million in series D funding and is changing the way companies obtain supplies (32m57s).
• ZIP's co-founder and CEO, Roger Support, used to work at Airbnb and was frustrated with the procurement process, which led him to start a company that provides a better solution (33m13s).
• ZIP's solution provides one front door for any employee to request a purchase, streamlining the procurement process and reducing the need for multiple approvals (33m49s).
• ZIP's platform is powered by generative AI, specifically a large language model, which enables the company to provide a more efficient and effective procurement process (34m3s).
• ZIP's AI-powered platform is built upon open AI, and the company is building a solution that can be used by businesses to improve their internal procurement processes (34m5s).
• The procurement process involves a large amount of unstructured data, including contracts, invoices, and order forms, which can be analyzed and applied in a practical way using generative A.I. (34m13s)
• A company is using A.I. to help with tasks such as passing invoices, reading messages and contracts for risks, and is investing in an AI lab to further develop these tools. (34m35s)
• The company is using open models, but is also investing in creating its own large language models to be able to apply A.I. in a more practical way. (35m9s)
• The company has raised a significant amount of money and has a valuation of over $2 billion, and has been able to sell its product and technology to other businesses and enterprises. (35m48s)
• The company has worked with large enterprises such as Discover Financial, Snowflake, Prudential, and Coinbase, and has helped them save millions of dollars and thousands of hours. (36m4s)
• Procurement is the second largest area of spend for any business in the world, after payroll, and is a trillions-dollar industry. (36m31s)
• The company has had a positive experience building on top of open A.I., and has received positive feedback from customers. (36m58s)

Perplexity's Funding and Enterprise Search

• Perplexity, a company trying to build a search product that rivals Google, is in early talks to raise funding from investors at a valuation of roughly $9 billion. (37m57s)
• Perplexity, a search app, has gained popularity among early adopters and investors, with a recent mega round and continued interest in investing, due to its use of cutting-edge AI to provide a standalone search experience (38m24s).
• Perplexity's moat is being questioned, as Google can potentially take it on by integrating AI into its search results, but Perplexity had a head start in using AI for search (38m31s).
• Some users are starting to stop using Google and use Perplexity instead, reflecting its popularity among early adopters (39m9s).
• Perplexity is looking to raise $500 million, with a significant jump in valuation from its previous funding round, and is increasingly focusing on enterprise search, such as financial search and searching through customer data (39m23s).

New iPad Mini and Apple's Strategy

• Apple has announced a new iPad mini with updated memory and processor to support Apple Intelligence, which allows for features like notification summaries, although it lacks more advanced AI features like generative AI-created emojis (40m22s).
• The new iPad mini's ability to support Apple Intelligence is significant, as it shows Apple's ability to rapidly add support for new features across its ecosystem, which is unmatched by other providers (41m1s).
• The iPad mini's price point is interesting, as it has the same processor as the iPhone 15 Pro, and Apple is using leftover components from iPhone 15 Pro production to make the iPad mini (41m25s).
• Apple's use of leftover components, known as binning, allows it to produce the iPad mini at a lower cost, giving it a competitive advantage (41m59s).
• The A17 chip has different versions, with the 15 pro version having six CPU cores, while the new iPad mini has five processing cores, indicating a slightly stripped-down version of last year's processor (42m14s).
• The new iPad mini supports the new Apple Pencil Pro, whereas the previous models supported older Apple pencils (42m48s).

Tim Cook's Role at Nike

• Tim Cook, Apple's CEO, has a side role as the lead independent director of Nike, which has been going through a tumultuous period (43m0s).
• As a Nike board member, Tim Cook helped bring on their new CEO, Elliot Hill, whose hiring has characteristics similar to those of a typical Tim Cook hire (43m11s).
• The new leadership at Nike will be closely watched over the next six months to see how the company progresses (43m17s).
• Mark Gurman, a journalist, has been writing about Tim Cook's role at Nike and other related topics (42m44s).